Titan S.A.

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1 2021 TITAN CEMENT GROUP integrated annual report About the Report The 2021 TITAN Cement Group Integrated Annual Report (IAR 2021) has been prepared in accordance with the Belgian law, the 2020 Belgian Code on Corporate Governance, the Non-ﬁnancial Reporting Directive 2014/95/EU, the European Taxonomy Regulation (EU) 2020/852, the International Financial Reporting Standards (IFRS) and the International Integrated Reporting Council (IIRC) principles for integrated reporting. Other reporting frameworks followed by TITAN Cement Group include the UN Sustainable Development Goals (SDGs) 2030, the UN Global Compact Communication on Progress Guidelines, the Charter and Guidelines of the Global Cement and Concrete Association (GCCA), the Sustainability Accounting Standards Board (SASB) Standards and the Carbon Disclosure Project (CDP) for climate change and water security. In 2021, the Group also started reporting according to the Task Force on Climate-related Financial Disclosures (TCFD) recommendations. The separate and consolidated ﬁnancial statements of the IAR 2021 were audited by PwC. The ESG performance overview and statements were independently veriﬁed at a reasonable level by ERM Certiﬁcation and Veriﬁcation Services (ERM CVS), in accordance with the Charter and Guidelines of the Global Cement and Concrete Association (GCCA) and the Advanced Level criteria for Communication on Progress of the United Nations Global Compact (UNGC). The independent auditor’s report by PwC and the independent assurance statement by ERM CVS are included in the IAR 2021 and are available online at www.titan-cement.com/newsroom/annual-reports. You may access the IAR 2021 by scanning the QR code with your mobile device. We welcome your feedback, which you can send to us through the link above. Photos on the cover: Main photo: Rod El Farag Axis, Cairo, Egypt Bottom middle photo: Miami All aboard Florida Rail Station and residential apartments. Approximately 80% of the cement used is TITAN's lower carbon cement Type IL Bottom right photo: Titan America employees Photos on pages 24 & 74: Y. Yerolymbos 1 2021 highlights Message from the Chairman of the BoD Message from the Chairman of the Group Executive Committee Overview 6 Our business approach in a changing global landscape A long history of sustainable growth One set of strong values Our Group strategy: Transforming for growth Global presence Creating and sharing value Focusing on material issues Moving ahead with ambitious ESG targets for 2025 and beyond Working together for sustainable development Corporate governance and risk management 54 Corporate governance statement 55 Corporate governance code Capital, shares and shareholders Board of Directors Composition and operation of Board committees Diversity and inclusion Internal audit and risk management in the scope of the ﬁnancial reporting process Internal audit Remumeration report 2021 Information to be disclosed pursuant to Article 34 of the Royal Decree of 14 November 2007 Shareholder information and services Risk management 73 Risk management process Risk management governance and controls TITAN's principal risks ESG performance review 80 ESG performance overview 82 Decarbonization and digitalization Growth-enabling work environment Positive local impact Responsible sourcing Good governance, transparency and business ethics TCFD Framework implementation (climate change risk and opportunities) Taxonomy EU Regulation implementation ESG performance statements 98 Performance highlights 24 Financial performance Equity market information ESG performance acknowledged by world-leading rating agencies ESG performance: • Making progress towards our ESG targets • Delivering on our ambitions with concrete actions • Good governance, transparency and business ethics • Climate-related ﬁnancial disclosures (TCFD) Regional performance Outlook 2022 51 Financial review 142 Financial performance overview 144 Review of the year 2021 Regional review of the year 2021 Financing and investments Resolutions of the Board of Directors Outlook Treasury shares Sale of stock in the framework of the stock options plan Post balance sheet events Going concern disclosure Viability statement Financial statements 151 Parent company separate summarized ﬁnancial statements 219 Declaration by the persons responsible 221 Auditors’ reports 222 Glossary 232 Understanding TITAN Management report Contents 245.7 Speciﬁc water consumption (l/t cementitious product) 829 New hires across the Group 0.91 Lost time injuries frequency rate (LTIFR) for employees 654.2 Speciﬁc net direct CO₂emissions (kg/t cementitious product) 5,358 Employees (as at 31 December 2021) 16.6 Speciﬁc dust emissions (g/t clinker) 2021 Highlights €275.2m EBITDA (Earnings before interest, taxes, depreciation and amortization) €1,714.6m Revenue “ΒΒ” On a stable outlook Credit rating (S&P) 2 3 Message from the Chairman of the BoD Dear Shareholders and Stakeholders, Two full years now into the COVID-19 pandemic and, while some uncertainty remains, especially in emerging markets, we are beginning to see light at the end of the tunnel. The resulting recovery in demand, in conjunction with workforce shortages, has created supply chain disruptions and forced central banks into a juggling act between containing inﬂation and preventing a recession. On top of that, the war in Ukraine has spurred geopolitical uncertainties and volatility in the energy markets, further accentuating the rise in input costs. Against this inﬂationary backdrop, the costs of running businesses have risen sharply, forcing companies to pass on the increases to their customers in order to maintain proﬁtability. We, at TITAN Cement Group, believe that we will be able to adapt to this new reality fairly quickly, which will allow the company to remain on its sustainable growth path. In 2021, amidst a complex and challenging environment, we successfully pursued our priorities of protecting our people, mitigating the COVID-19 impact on society and safeguarding the continuity of the business. These challenges will continue going forward. We are fully aware of the fact that, as we gradually move into the new post-pandemic era, corporations will be evaluated not only on ﬁnancial results but also on how they articulate values, develop talent, manage supply chains and environmental impact, embrace diversity and engage with employees, customers and local communities. To ensure that the Group continues to adhere to the highest standards of corporate governance, we concluded a formal evaluation of the effectiveness of the Board, which we had launched towards the end of 2020. The assessment addressed the Board’s performance and its interaction with executive management, as well as its size, composition, functioning and committees. Later in the year, Board members were updated on the developments of climate legislation and its implications for TITAN. In the fall, we conducted a full strategic review to approve the new growth platform and capital allocation priorities proposed by the executive “We, at TITAN Cement Group, believe that we will be able to adapt to this new reality fairly quickly, which will allow the company to remain on its sustainable growth path.” INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP team. The balance of initiatives and the merits of investment in the core business and beyond it were discussed in depth. On the basis of our results, we activated a €10m share buy-back program and returned €0.5 per share to all our shareholders. In closing, and on behalf of the TCI Board of Directors, I wish to congratulate management for yet another year of an all-round exemplary performance and extend our best wishes to all for a happy and successful 2022. Takis Arapoglou Chairman of the BoD 4 Message from the Chairman of the Group Executive Committee Dear Shareholders and Stakeholders, As I look back on 2021, I feel a sense of accomplishment and pride. For how we adapted to the challenges that the COVID-19 pandemic continued to pose. For the way we delivered results and served our customers effectively, amidst soaring energy prices and global supply chain disruptions. For how, staying true to our values, we took care of our colleagues and communities, with health and safety top of mind. And for how we learned new things, developed additional capabilities, and continued to lay the foundations for sustainable future growth. Volumes and prices rose across our geographies on the back of buoyant construction activity, yet cost inﬂation weighed on margins. Our US business experienced record sales as its operations on the East Coast beneﬁted from robust employment, increased consumer spending, tight housing inventories and attractive mortgage rates. Greece, where all construction segments displayed positive trends, increasingly appears to be on a steady long-term growth trajectory. Residential construction in the main urban centers, coupled with private infrastructure and small industrial unit projects across the country, bolstered demand for our products. Building activity was also strong in Southeastern Europe, but the spike in energy costs penalized results in the region. In Egypt, where our plants have been operating at the levels of the production cap imposed by the state, investments in public housing and the rehabilitation of port infrastructure have supported sales growth. And whereas in Turkey the market softened as a result of the currency crisis, the one in Brazil continued to grow. Overall revenue for the Group increased by 6.7% to €1.7 billion. Due to the fact that price increases did not fully mitigate energy and freight headwinds within 2021, operating proﬁtability (EBITDA) declined by 3.6% to €275.2 million. Net proﬁt after taxes and minority interests (NPAT) came in at €91.9 million. After a €41.8 million increase in capital expenditure, which had been restrained following the onset of the pandemic in 2020, net debt increased to €713.2 million, or 2.61 times EBITDA. During the year, we reviewed and reﬁned our strategic priorities. Our strategy has talent, skills, culture and organization as its foundation and relies on the triptych “decarbonize – digitize – deliver” to transform the Group so that it can tap into new sources of growth. At the core are also our ESG targets for 2025 and beyond, in direct alignment with our commitment to the UN Sustainable Development Goals (SDGs) and the Ten Principles of the UN Global Compact. They are underpinned by strong governance, transparency and business ethics, and are organized in four focus areas – decarbonization and digitalization, growth-enabling work environment, positive local impact, and responsible sourcing. Addressing climate change remained at the top of our sustainability agenda, as we were among the ﬁrst cement companies worldwide with decarbonization targets validated by the Science Based Targets initiative (SBTi). Ahead of COP26, we signed the “Business Ambition for 1.5°C” Commitment letter, joining a number of leading companies seeking to keep warming to 1.5°C and reach net-zero emissions by 2050. To improve our disclosure of climate-related risks, we started implementing the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). And we were recognized by the CDP as a global 5 climate leader for our transparency and actions to mitigate climate change and transition to a net-zero economy. Our net CO₂ emissions declined in line with our 2030 goals, as we ramped up our consumption of alternative fuels and accelerated the transition to greener products. The investment for a pre-calciner at our Kamari plant in Greece, which will enable the utilization of greater quantities of waste-derived fuels, is progressing according to schedule. Meanwhile, since September, approximately half of Titan America’s cement output consists of the lower-carbon Type IL cement. We continued to invest in innovation and to contribute to the activities of the Innovandi research network of the Global Cement and Concrete Association (GCCA). We evaluated a number of novel decarbonization and carbon capture and utilization technologies, and we experimented with the use of hydrogen as a fuel enhancer in our process in Greece and Bulgaria. On the other side of the Atlantic, we commissioned the world’s ﬁrst industrial-scale plant to reclaim, dry and electrostatically separate landﬁlled ﬂy ash. Our digitalization journey progressed further, in collaboration with an ecosystem of start-ups, universities, equipment manufacturers, and specialized advisers. Our Digital Center of Competence continued the rollout of our AI-based real-time optimizers and failure prediction solutions across our production facilities, yielding gains in productivity and energy efficiency. Our supply chain capabilities were augmented through the development of proprietary tools to forecast sales demand and the cost of selected production inputs, whereas the deployment of digital customer applications helped us reinvent how we interact with our customers, while elevating their experience. Throughout the year, we stayed close to those around us, with initiatives to shield our people, business partners and communities from the effects of the pandemic. The vaccination cost of more than 1,500 employees and contractors was covered by the company. Initiatives to promote physical and mental health were launched in all regions. We strengthened our accident prevention systems further and ended the year with a Lost Time Injuries Frequency Rate (LTIFR) that is among the best in the industry. We launched a new Diversity, Equity and Inclusion policy and leveraged digital tools to continue to upskill our people despite COVID-19 restrictions. To maximize our positive local impact, our business units renewed their efforts to improve biodiversity and water management, promote recycling and circular economy practices, and curtail air emissions. At the same time, almost 2,000 of our employees volunteered in initiatives to support 0.4 million people in our local and broader communities. Last but not least, having moved faster than planned in energy- efficiency and waste-management certiﬁcation, we will not only continue pushing for further improvement in this area, but will also now focus on our supply chain, seeking to empower our business ecosystems to incorporate sustainability considerations in decision making. To this end, a Sustainable Supply Chain Roadmap was developed to ensure that our key suppliers meet the Group’s ESG standards. Looking ahead to 2022, the war in Ukraine is creating geopolitical uncertainties with macroeconomic implications that are bound to impact market trends and further increase volatility and risks. While we are preparing for different eventualities, we remain cautiously optimistic for three reasons. First, because we still expect growth in most of our markets. In the USA, a shortage of available housing and signiﬁcant funds earmarked for cement-intensive infrastructure projects should support consumption for several years ahead. To capitalize on this trend, we are investing to expand our supply chain capacity in the market, most notably through the construction of two new storage domes in Tampa, Florida, and Norfolk, Virginia. In Europe, leading indicators are pointing towards continued growth in all demand segments. And the stabilizing macroeconomic environment in Egypt, along with the country’s housing and infrastructure needs bodes well for construction. Cost challenges will persist, but a favorable pricing environment in most countries and our numerous efforts to address inﬂationary pressures should mitigate the impact on operating proﬁtability. The second reason for optimism is our progress in decarbonization and digitalization, which are now well embedded in our strategy. We will continue to accelerate the reduction of our carbon footprint with novel products and solutions, new bets in adjacent value chains, such as waste management and renewables, and further investments in research and development. We will also keep scaling up our world- leading digital innovations and leveraging the power of data to become more efficient and competitive, while creating more value for our customers. Yet the most important reason for our optimism are the skills, drive and energy of our colleagues. Their inspiring dedication and endurance, at all times, which is what keeps the company going and growing. Building the future means building better, smarter, more sustainably. In 2022, we will continue to harness the advantages offered by decarbonization, digital transformation and business model innovation to beneﬁt our customers, employees, suppliers, and communities. As always, we will do so with integrity, compassion, humanity and accountability, as we seek to shape a better and greener future for all. Dimitri Papalexopoulos Chairman of the Group Executive Committee “Building the future means building better, smarter, more sustainably. In 2022, we will continue to harness the advantages offered by decarbonization, digital transformation and business model innovation to beneﬁt our customers, employees, suppliers, and communities.” INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 6 Roanoke cement plant, USA 77 overview UNDERSTANDING TITAN An overview of our Group and our strategy in a changing global landscape. Our approach to value creation for our stakeholders, our materiality assessment process and our ESG targets for 2025 and beyond. 8 Our business approach in a changing global landscape Building on 119 years of industry experience and commitment to sustainable growth, TITAN has become an international cement and building materials producer, serving customers in more than 25 countries through a network of 14 integrated cement plants and three cement grinding plants. TITAN also operates quarries, ready-mix plants, terminals, and other production and distribution facilities. Our approach Turning aspiration into action, we are working hand in hand with our customers, supply chain partners, peers and our other stakeholders across geographies, to help limit global warming to 1.5 O C and achieve a net-zero economy by 2050. Committed to ambitious science-based targets, we are continuously reducing our carbon footprint by increasing the use of alternative fuels, improving energy efficiency, developing low-carbon products, and adopting innovative technologies and solutions. Our approach We are among the early adopters and leaders of digital innovation in the cement industry, harnessing the power of digital breakthroughs. Our digital journey so far has been powered by our innovative, entrepreneurial spirit and willingness to test and learn. With Artiﬁcial Intelligence solutions tailored to the needs of the cement industry, we are transforming our operations for ultimate efficiency and the delivery of high-quality products, with an eye on the present and future needs of our customers. At the same time, we help minimize energy consumption and reduce CO₂ emissions, supporting our net-zero goal. Digital transformation as a foundation for future growth Climate change and the road towards a carbon-neutral future Climate change represents a long-term risk for our planet and society. It requires the mobilization of organizations across many sectors, the cement industry among them. In 2021, the Global Cement and Concrete Association (GCCA) published its Roadmap for net-zero Concrete, which sets out a pathway to help limit global warming to 1.5 O C and deliver society with net-zero concrete by 2050. Our industry is working across the built environment value chain to deliver on this commitment and is calling on its stakeholders to play their part as well. The Fourth Industrial Revolution, driven by the advent of the Internet of Things, big data, artiﬁcial intelligence and advanced analytics, promises to transform key components of the industry’s value chain. Traditional value generation drivers and differentiators are complemented by new digital tools that unlock value through improved operational efficiency and higher customer engagement. Companies that embrace Industry 4.0 early on can reap signiﬁcant beneﬁts. UNDERSTANDING TITAN OVERVIEW 9 Our approach As the world is transitioning to a net-zero , circular economy, we are playing an active role in the development of the sustainable, green building materials and solutions of tomorrow. We focus on their affordability, durability and recyclability as well as on their carbon footprint. When designing them, we evaluate the environmental impact that they have throughout their entire life cycle, meeting the increasing needs of our customers for sustainable products and services. At the same time, we encourage our partners to incorporate sustainability considerations in their business decisions and daily behaviors, promoting responsible sourcing across the built environment value chain. Our approach Sustainability is at the heart of our strategy, as reﬂected on our everyday business practices and the behaviors of our people. With clear, measurable ESG targets and concrete plans in place across our regions, we are focusing our efforts on the areas where our actions and sustainable solutions can have the biggest positive impact, directly and indirectly, in line with the UN Sustainable Development Goals (SDGs). To address sustainability challenges, we have joined forces with local and global stakeholders. Increasing demand for sustainable products and services Comprehensive sustainability plans to create value for all stakeholders We serve society’s needs for safe, durable, resilient, and affordable housing and infrastructure. We create value by transforming raw materials into products – cement, concrete, aggregates, ﬂy ash, dry mortars, blocks, and other building materials. We offer transportation and distribution services to our customers, as well as a range of additional solutions, from beneﬁciation technologies to waste management. Amidst accelerating shifts and disruptive events, such as the COVID-19 pandemic, we effectively address critical challenges and play our part in building a better, more sustainable future together with our stakeholders. As the world continues to urbanize, demand for sustainable infrastructure and green building materials and solutions is set to rise. Concrete is an essential building material that has shaped our world and is critical for addressing society’s needs for the sustainable built environment of tomorrow. It will play an integral role in creating sustainable and prosperous communities through the delivery of key infrastructure, homes, clean energy and a more resilient environment. Customers increasingly seek sustainable products that will meet their evolving needs. Building a sustainable future demands comprehensive planning and collaboration with other businesses, governments, academia and society at large. Companies need to set goals, develop roadmaps to achieve these goals, track their performance and communicate their progress to their stakeholders in a consistent and transparent manner. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 10 1902-1960 INTERNATIONAL EXPANSION GROWTH IN GREECE FOUNDATIONS 1990 - 2018: Acquisitions and investments A long history of sustainable growth Driven by our entrepreneurial spirit and our commitment to sustainable growth, we have expanded beyond our Greek roots with operations in four continents. 1902 TITAN Cement is founded with the opening of the ﬁrst cement plant in Elefsina, Greece. It is the ﬁrst cement- producing unit in Greece 1912 Listing on the Athens Stock Exchange 1951 - 1957 Rapid growth of exports, which during the period account for over 50% of the company’s sales and approximately 50% of Greece’s total cement exports 1962 Second cement plant in Thessaloniki 1968 Third cement plant in Drepano, Patras 1976 Fourth cement plant in Kamari, near Athens 1990-2021 1960-1990 • (1992) 60% in Roanoke Cement, Virginia, USA • (1998) Cementarnica Usje, North Macedonia • (1999) Beni Suef Egypt (50% joint venture) • (2000) 100% of Roanoke, Virginia, and Pennsuco, Florida, USA • (2002) Kosjeric, Serbia • (2002) Alexandria PCC (APCC), Egypt (50% joint venture) • (2003) Zlatna Panega, Bulgaria • (2007) Greenﬁeld investment, Antea plant, Albania • (2008) 50% in Adocim, Turkey (JV) • (2008) 100% of Beni Suef and APCC Egypt • (2010) Sharr plant, Kosovo • (2016) 50% in Cimento Apodi, Brazil (JV) • (2018) 75% in Adocim, Turkey 2019 OUR GROWTH JOURNEY SINCE 1902 UNDERSTANDING TITAN OVERVIEW Titan Cement International S.A. becomes TITAN Group’s parent company and is listed on Euronext Brussels, Euronext Paris, and the Athens Exchange 11 Ingrained in the Group’s identity and embedded in our culture and our people’s practices, our values guide the way we conduct our business – with respect, accountability, and responsibility. Our values are at the core of who we are; they guide our strategy and provide the foundation for all our operations. They have provided our people with a strong bond and supported the growth that has sustained us for over a century, stemming directly from the principles, beliefs, and vision of our founders back in 1902. They remain the solid basis of our culture and family spirit. One set of strong values Know-how ▶ Enhancement of knowledge base ▶ Proﬁciency in every function ▶ Excellence in core competencies Integrity ▶ Ethical business practices ▶ Transparency ▶ Open communication ▶ Good governance Value to the customer ▶ Anticipation of customer needs ▶ Innovative solutions ▶ High quality of products and services ▶ Continuous improvement ▶ Learning organization ▶ Willingness to change ▶ Rise to challenges Delivering results ▶ Shareholder value ▶ Clear objectives ▶ High standards ▶ Corporate Social Responsibility ▶ Safety ﬁrst ▶ Sustainable development ▶ Stakeholder engagement ▶ INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 12 TITAN Group has created long-term value for its stakeholders for almost 120 years, by constantly evolving and renewing a strategy of geographic diversiﬁcation, selective vertical integration, continuous operational improvement and a focus on human capital and sustainability. Building on this solid foundation, the Group has reviewed its strategic direction and priorities, to focus its growth-oriented strategy on harnessing the new opportunities presented by decarbonization and “Industry 4.0”, which are transforming the industry’s customer engagement and value creation models, while continuing to leverage TITAN’s proven abilities to deliver on improving performance and develop distinctive competences. Our three-year strategic plan incorporates the perspectives and priorities of our businesses around the world, coupled with the key directions and commitments provided by the Group’s Executive Committee and BoD. Our strategy is founded on the following three pillars: Deliver Our operations around the world are well placed to deliver robust results for the foreseeable future, based on strong market momentum for growth in housing and infrastructure spending (often supported by government incentives in the post-pandemic environment), positive macroeconomic trends and local markets recovering from cyclical lows. Building on this solid outlook, TITAN will leverage its continuous performance improvement record to deliver operational excellence in manufacturing, supply chain and customer experience. The Group will thus continue its focus on cost-to- produce and cost-to-serve, as well as on providing solutions and a superior customer experience across all its businesses. This operational excellence extends to TITAN’s ESG performance, where the Group has achieved strong environmental, safety and social engagement performance in the last 20 years. TITAN’s ESG targets for 2025 and beyond provide a rich and ambitious set of measurable goals in all ESG focus areas, comprising the dimensions of decarbonization and digitalization, a growth-enabling work environment, positive local impact and responsible sourcing, all underpinned by good governance, transparency, and business ethics. Decarbonize TITAN’s vision is to grow by transforming our business, focusing on resilience and innovation to serve our customers more efficiently as we move towards a carbon-neutral world. To that end, the Group has set a 2030 target to reduce its direct net speciﬁc CO₂ emissions (Scope 1) to 500 kg CO₂/t of cementitious material, in line with the targets of the most ambitious players in the industry and validated by SBTi (Science Based Targets initiative). Furthermore, TITAN is committed to playing its part to limit global warming to 1.5°C and to reach net-zero emissions by 2050. TITAN’s decarbonization strategy includes a comprehensive set of levers to reduce emissions of cement production, by accelerating the use of alternative fuels, substituting clinker by cementitious materials with lower carbon intensity, increasing energy efficiency and optimizing its raw materials mix. New innovative products will be offered to TITAN’s customers that will meet their needs for durable and sustainable building materials, leveraging the Group’s unique assets and competencies, including its proprietary ﬂy ash beneﬁciation technology. In the long-term, the Group will continue its tradition of innovation by piloting new emerging technologies for the future net-zero construction value chain. Digitize TITAN has been among the pioneers in its sector in implementing innovative Artiﬁcial Intelligence (AI) digital solutions in its operations. Signiﬁcant innovations have already been implemented, with measurable impact in operational efficiency, such as AI-based real-time optimizers and predictive maintenance in manufacturing, use of advanced analytics for its supply chain network and spare parts inventories, use of Building Information Modelling for its new infrastructure projects, and digital applications for its customer-facing operations. Leveraging this momentum, TITAN aims to continue improving its operating performance and customer experience, by leveraging big data and AI to develop a digitally empowered and efficient operating model and to provide cutting-edge digital solutions for its customers. TITAN’s “cement plants of the future” will fully harness the power of digital technologies and advanced analytics to achieve higher asset productivity and reliability, reduce production inputs and energy consumption, and decrease CO₂ emissions. The Group is also deploying innovative digital solutions for the next generation of supply chain management, with optimized distribution networks, predictive planning and dynamic logistics operations. Finally, a digitally enabled customer experience will drive value generation for our cement and concrete business through excellence in customer service. Our Group Strategy: Transforming for Growth TITAN’s growth-oriented Group strategy aims to harness the opportunities presented by Decarbonization and Digitalization, and to provide the building materials and solutions that will bring additional beneﬁts to our customers, employees, suppliers and communities. UNDERSTANDING TITAN OVERVIEW 13 Building capabilities and developing talent The foundation of our growth-oriented strategic plan is TITAN’s long tradition of building capabilities and developing talent, with an entrepreneurial mindset and a values-driven culture. The strategic plan encompasses, and is powered by, an accelerated drive to transform by further building our talent, both in our core competences, as well as in new skillsets. In parallel, growth will be underpinned by an agile and learning-oriented organization, based on our performance-oriented culture and our focus on long-term sustainability, with digitally enabled structures and processes, and a safe, healthy, inclusive, and diverse work environment for our people. Developing our growth platform Leveraging operational excellence, a distinctive ESG performance and superior customer engagement, the decarbonization of its operations and the digitally enabled operational model, TITAN will develop its growth platform capitalizing on opportunities to strengthen and extend its current core business, as well as pursuing opportunities in new sources of value in the building materials value chain. To that end, important investments are already implemented or planned to enhance the operating leverage and sustainability of existing assets, increase the Group’s logistics capabilities, pursue further targeted vertical integration, and accelerate the development of new products and customer solutions. TALENT Skills & organization DIGITIZE Manufacturing Supply Chain Customer Data DELIVER Continuous improvement Customer Operations DECARBONIZE Manufacturing Commercial Αdjacencies GROWTH Leverage assets and expand in new sources of growth INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 14 1 3 4 2 USA 1 2 USA PRINCIPAL PRODUCTS/ ACTIVITIES 3 IMPORT TERMINALS 8 QUARRIES 82 READY-MIX PLANTS 7 CONCRETE BLOCK PLANTS 4 * FLY ASH PROCESSING PLANTS 2 INTEGRATED CEMENT PLANTS EBITDA 158.0m REVENUE 983.6m ASSETS 1,133.3m USA Integrated cement plants 1. Roanoke – Virginia 2. Pennsuco – Florida Greece Integrated cement plants 1. Thessaloniki 2. Kamari 3. Patras Cement grinding plant 4. Elefsina Brazil USA Greece 2 1 Brazil (Joint venture) Integrated cement plant 1. Quixere Cement grinding plant 2. Pecem € 3 QUARRIES 4 READY-MIX PLANTS PRINCIPAL PRODUCTS/ ACTIVITIES BRAZIL ** 1 CEMENT GRINDING PLANT 1 INTEGRATED CEMENT PLANT Global presence We report on our performance and activities based on four geographic regions, and separately on our joint venture in Brazil. Principal products/ activities key: Cement Ready-mix concrete Aggregates Dry mortars Building blocks Fly ash Waste management and alternative fuels Νumber of operational units of all regions as calculated for ESG performance reporting purposes at Group level * 1 facility in Canada is included. ** The joint venture in Brazil is incorporated in the ﬁnancial statements using the equity method of consolidation. In the ESG performance overview and statements, the joint venture in Brazil is not included. UNDERSTANDING TITAN OVERVIEW 15 1 Egypt 2 2 1 Southeastern Europe Integrated cement plants 1. Kosjeric – Serbia 2. Zlatna – Bulgaria 3. Sharr – Kosovo 4. Usje – North Macedonia 5. Antea – Albania Integrated cement plants 1. Alexandria 2. Beni Suef Eastern Mediterranean Integrated cement plant 1. Tokat Cement grinding plant 2. Marmara 28 READY-MIX PLANTS 3 IMPORT TERMINALS 1 DRY MORTAR PLANT 2 PROCESSED ENGINEERED FUEL FACILITIES EBITDA 23.6m REVENUE 267.6m ASSETS 549.4m PRINCIPAL PRODUCTS/ ACTIVITIES GREECE & WESTERN EUROPE € 1 CEMENT GRINDING PLANT 25 QUARRIES 3 INTEGRATED CEMENT PLANTS PRINCIPAL PRODUCTS/ ACTIVITIES 7 READY-MIX PLANTS 1 CEMENT GRINDING PLANT 13 QUARRIES 2 PROCESSED ENGINEERED FUEL FACILITIES 3 INTEGRATED CEMENT PLANTS EBITDA 11.8m REVENUE 172.8m ASSETS 447.2m € EASTERN MEDITERRANEAN 6 READY-MIX PLANTS 1 PROCESSED ENGINEERED FUEL FACILITY EBITDA 81.9m REVENUE 290.6m ASSETS 467.1m PRINCIPAL PRODUCTS/ ACTIVITIES SOUTHEASTERN EUROPE € 20 QUARRIES 5 INTEGRATED CEMENT PLANTS EU Taxonomy Regulation eligible economic activities Turnover OpEx CapEx % of total TITAN Group 58.6 60.5 58.9 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Turkey 1 2 3 4 5 North Macedonia Albania Kosovo Serbia Bulgaria 16 DRIVEN BY OUR OBJECTIVES WE DRAW ON OUR CAPITAL TO PROVIDE OUR PRODUCTS AND SERVICES Products Services and solutions Manufactured capital We manufacture our products using the best available techniques in a network of 14 integrated and three cement grinding plants in 10 countries, as well as quarries, ready-mix plants, and other production facilities, and we distribute them reliably to our customers through dedicated terminals. Financial capital We use our economic resources efficiently to support our business growth and safeguard our international competitiveness. Intellectual capital We use our R&D capabilities, our core competencies, and our deep knowledge of the building materials industry to enhance our offerings and further improve our performance. Human capital We value our people’s contribution and continuously support their professional development in an engaging, inclusive and collaborative working environment. Social and Relationship capital We engage with our stakeholders, building long-term relationships of trust and working together in collaborative projects to make a positive impact on society and local communities. Natural capital We source materials responsibly, and we preserve natural resources and biodiversity in the areas where we operate. We contribute to the circular economy by applying the principles of “reduce, reuse, recycle, recover”. Creating and sharing value We use our capital resources efficiently to drive sustainable, long-term shared value creation 1 , through our products and services. We help address global societal and environmental challenges, and contribute to the attainment of the UN SDGs 2030. Note: For terms denoted with (1)-(12) under “Creating and sharing value”, please refer to the section “ESG performance statements, 2.5.10 Notes for Value Creation Indicators”. Cement Ready-mix concrete Aggregates Dry mortars Building blocks Fly ash We foster sustainable solutions over the life cycle of our products Production, transportation, distribution of building materials Circular economy solutions: • Separation technologies • Alternative fuel and waste management solutions We engage with business partners to scale sustainability efforts along our value chain UNDERSTANDING TITAN OVERVIEW 17 Key Indicators Amounts Stakeholders SDGs 2030 Gross value added 2 €603.1m Employees, customers, suppliers, shareholders and investors Net value added³ €466.7m Employees, customers, suppliers, shareholders and investors Total spend on suppliers (local, national and international) for goods and services 4a €1,341m Suppliers and contractors % local spend of TITAN 4b 65.1% Local communities, customers Taxes to national and local authorities 5 €104.0m Governments and authorities (central and local) Payments in cash to shareholders and minorities 6 €32.0m Shareholders Total spend on donations and community engagement initiatives 7 €2.3m Communities, academia and educational and environmental organizations, civil society, and society at large Investment in environmental protection⁸ €25.3m Communities, society at large Alternative fuels and raw materials 2.0m tonnes Communities, governments and authorities (central and local), society at large Salaries, pensions (contributions) and social beneﬁts, including additional beneﬁts beyond those provided by law 9 €309.3m Employees and their families, local communities Investments in training of direct employees¹⁰ €1.0m Employees and their families Internships 391 interns Employees and their families, local communities, youth Investments in research and innovation 11 €10.7m Employees, customers, academia and society at large Capital expenditures 12 €126.0m Employees, shareholders, customers, local communities, suppliers and contractors AND CREATE VALUE FOR OUR STAKEHOLDERS CONTRIBUTING TO THE UN SDGS 2030 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 18 Focusing on material issues TITAN’s approach to sustainability is based on the principle of double materiality assessment, an integrated, on-going process of mapping and assessing the impact of our operations on society and the environment, as well as the ﬁnancial impacts of socio-environmental risks on the Group. Impacts may become material for ﬁnancial reporting purposes over time, leading to what is known as dynamic materiality assessment process. A full cycle of materiality assessment at TITAN has a duration of ﬁve years. We use the resulting prioritization of material issues at local level as input for the materiality assessment at Group level and vice versa. The latest assessment at Group level, which was conducted in 2020, yielded nine material issues grouped in four focus areas, all underpinned by good governance, transparency and business ethics. In 2021, all TITAN business units completed a new cycle of materiality assessment, by updating their priorities following the process established by the Group in 2020. This milestone marks the completion of our fourth materiality assessment cycle. The Group harmonized and further developed its materiality assessment process in alignment with the ten principles of the UN Global Compact and the SASB Materiality Map for our sector. Based on this methodology, both sector-agnostic and sector- speciﬁc material issues, as well as country-speciﬁc material issues, were identiﬁed and are presented in Table 1 of the ESG Statements. The issues that are most material for the majority of our business units are: Future-ready business model in a carbon- neutral world, safe and healthy working environment, positive local social, economic and environmental impact, and continuous development of our people. Following the completion of this exercise, TITAN set and announced its ESG targets for 2025 and beyond (see pages 20-21). We are engaging with our stakeholders across our locations to obtain a deeper understanding of their expectations and needs. Mapping what is most material to them and to the business through a double materiality process helps us develop sustainable business strategies and create value that lasts. 2 . I m p l e m e n t a t i o n 1 . S e t t i n g o u r S t r a t e g y p e r f o r m a n c e t o s t a k e h o l d e r s 4 . R e v i e w a n d r e p o r t 3 . P e r f o r m a n c e m e a s u r e m e n t Sustainability governance and organization Overall business strategy Current achieve- ments Double material- ity assessment Forward looking progress report against targets Policies and targets Action plans and resources Entity as a whole Topics and subtopics Sustainability Reporting SUSTAINABILITY REPORTING STRUCTURE UNDERSTANDING TITAN OVERVIEW 19 Αudience: Investors, Consumers, Civil Society, Employees FINANCIAL MATERIALITY ENVIRONMENTAL & SOCIAL MATERIALITY Climate change impact on company Company impact on climate change Understanding both the impact that climate change has on TITAN’s development, performance and position, as well as the impact that our activities have Double materiality assessment on climate change Stemming from the double materiality assessment, “future-ready business model in a carbon-neutral world” is ranked at the top of the list of our material issues. It is related to the long-term sustainability of the Group operations and the resilience of our planet. TITAN is assessing climate change risks and opportunities according to TCFD recommendations, considering a long-term horizon and the whole value chain, as presented on page 41. What is immaterial to a company or industry today can become material tomorrow. Therefore, receiving regular feedback from our stakeholders through open and structured communication is imperative. In this context, we have designed a process to validate the existing materiality assessment with key stakeholders at each business unit. The outcomes of this exercise will help us adjust our priorities, if needed, and possibly add to our preparedness before the next materiality cycle. Through this dynamic materiality process, we aim to build on our trusted relationships and create shared value. (1) Future-ready business model in a carbon-neutral world (2) Innovation with emphasis on digitalization and decarbonization (3) Safe and healthy working environment (4) Continuous development of our people (5) Diverse and inclusive workplace (6) Positive local social, economic and environmental impact (7) Resource efficiency, recycling, and recovery, contributing to the circular economy (8) Reliable and sustainable supply chain (9) Good governance, transparency and business ethics Importance to stakeholders Importance to TITAN 5 1 2 4 3 7 6 89 MATERIALITY MATRIX MATERIAL ISSUES INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 20 Decarbonization and digitalization Growth-enabling work environment All underpinned by: Good governance, transparency and business ethics Material issues addressed SDGs SDGs Material issues addressed Targets Ambition Ambition Targets We will TRANSFORM our business, focusing on resilience, innovation and building solutions to serve our customers more efficiently as we move towards a carbon-neutral, digital world We will CULTIVATE an inclusive culture with equal opportunities for all our people to grow professionally within a safe and healthy work environment • Future ready business model in a carbon-neutral world • Innovation with emphasis on digitalization and decarbonization • Safe and healthy working environment • Diverse and inclusive workplace • Continuous development of our people 1 Scope 1: direct CO₂ emissions; Scope 2: indirect CO₂ emissions from electricity; Scope 3: indirect CO₂ emissions of the supply chain ² Peer group deﬁnition: Cemex, Holcim, Argos, HeidelbergCement, CRH, Cementir, Vicat, Buzzi ³ Active wholly-owned sites Moving ahead with ambitious ESG targets for 2025 and beyond Building on our strong sustainability performance over the years, in 2021 we launched our Environmental, Social and Governance (ESG) targets for 2025 and beyond, focusing on four areas. • we will reduce our CO₂ emissions 1 by 2030, and will have our targets validated by the Science Based Targets Initiative (SBTi) as follows: • Scope 1 (net): -35% vs. 1990 level • Scope 2: -45% vs. 2020 level • we commit to drive down the CO₂ footprint of our operations and products aspiring to deliver society with carbon-neutral concrete by 2050 • we will monitor and independently verify our supply chain (Scope 3) emissions • we will increase our annual investment in Research and Innovation to €20m • we strive for zero fatalities and for an employee LTIFR performance which consistently places us among the three best in our peer group 2 • we will implement initiatives addressing the physical, mental, social and ﬁnancial dimensions of wellbeing for our employees, in all countries • we commit that 1/3 of our BoD members will be women • we will promote equal opportunities and inclusion and will grow by 20% the participation of women in senior roles, talent pools and new hires • we will offer upskilling and reskilling opportunities to 100% of our employees, especially in areas vital for sustainable growth, such as health and safety, digitalization, and decarbonization Read about our progress towards them on pages 30- 31 UNDERSTANDING TITAN OVERVIEW 21 Positive local impact Responsible sourcing SDGs SDGs Material issues addressed Material issues addressed Ambition Ambition Targets Targets We will ENABLE our business operations and our people worldwide to contribute to the prosperity of our local communities with respect to their social and environmental concerns We will EMPOWER our business ecosystems to incorporate sustainability considerations in their business decisions and daily behaviors, while using natural resources responsibly • Positive local social, economic, and environmental impact • Resource efficiency, recycling and recovery, contributing to the circular economy • Reliable and sustainable supply chain • we will sustain and further improve our strong performance in cement production-related speciﬁc dust, NOx and SOx emissions • we will have quarry rehabilitation plans at 100% of our sites 3 and will rehabilitate 25% of the affected areas • we will have quarry biodiversity management plans at 100% of our sites 3 in high biodiversity value areas • we will have community engagement plans that are aligned with material issues for stakeholders and UN SDGs 2030 at 100% of our key operations • we will ensure that 2/3 of our total spend is directed to local suppliers and communities • we commit to a water consumption of 280 l/t cementitious products and to covering 70% of our water demand with recycled water • we will have 85% of our production 4 covered by ISO 50001 or energy audits • we will have 50% of our production 4 covered by “Zero Waste to Landﬁll” certiﬁcation • we will ensure that 70% of our key suppliers 5 meet TITAN ESG supplier standards 4 Production of our integrated cement plants 5 Key suppliers: critical suppliers according to the GCCA Guidance for Sustainable Supply Chain management with a meaningful level of spend for TITAN. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 22 Working together for sustainable development TITAN Group is an active participant in global collaborative initiatives and international organizations, aiming to contribute to the shaping of the sustainable world of tomorrow. • we were among the ﬁrst 500 signatories in 2002 and became a participant of the UN Global Compact (UNGC) in 2017. We also participate in local UNGC Networks. • we have aligned our strategy and operations with the Ten Principles on human rights, labor, environment and anti-corruption; and take strategic actions to advance the UN Sustainable Development Goals (SDGs), with an emphasis on collaboration and innovation. • we submit annually the UNGC Communication on Progress (CoP) at an advanced level, providing valuable information with transparency to our stakeholders. Related material issues: 1, 3, 5, 6, 8, 9 • we were one of the ﬁrst cement companies worldwide to have our CO₂ emissions reduction targets validated by the Science Based Targets initiative (SBTi) as consistent with levels required to meet the goals of the Paris Agreement. Related material issues: 1, 2 • we have signed the “Business Ambition for 1.5°C” Commitment, a global campaign led by the Science Based Targets initiative (SBTi), in partnership with the UN Global Compact and the We Mean Business Coalition, joining a number of leading companies worldwide that are committed to keeping global warming to 1.5°C and reaching net-zero emissions by 2050. Related material issues: 1, 2 • we collaborate with the world’s most inﬂuential businesses within the nonproﬁt “We Mean Business Coalition” to ensure that the world economy is on track to avoid dangerous climate change, while delivering sustainable growth and prosperity for all. Related material issues: 1, 2 • we participate in the “Race To Zero” global campaign led by the Science Based Targets initiative (SBTi) in partnership with the UN Global Compact and the We Mean Business coalition for a healthy, resilient, zero-carbon recovery that prevents future threats, creates decent jobs, and unlocks inclusive, sustainable growth. • it mobilizes a coalition of leading net-zero initiatives, representing 733 cities, 31 regions, 3,067 businesses, 173 of the biggest investors, and 622 higher education institutions. Related material issues: 1, 2 UNDERSTANDING TITAN OVERVIEW Participations Participations 23 • we are a member of the Global Cement and Concrete Association (GCCA) since 2018. In 2021, we contributed to the development of the GCCA 2050 Roadmap to Net Zero Concrete “Concrete Future”. • in addition, we participate in the GCCA Research Network, INNOVANDI, aiming to bring forth novel technological solutions towards decarbonization in collaboration with start-ups from across the globe. Related material issues: 1, 2, 3, 6, 7, 8, 9 • we became a member of CSR Europe in 2004, and a founding member of national partner organizations. In 2021 TITAN participated in the collaborative work for: • the “Biodiversity and Industry Collaborative Platform”, and • the “Inclusion Think Tank” through CSR Europe and its participation in EFRAG’s European Reporting Lab, TITAN is contributing to the development of a New European Standard on ESG Reporting. Related material issues: 5, 6, 9 • we participate in the Energy Transition and Climate Change Working Group of the European Round Table for Industry to address the triggers for a successful transition towards a low carbon economy, and thus contribute to achieving the goals of the Paris Climate Agreement. Related material issues: 1, 2 • we participate in the European Cement Research Academy (ECRA), founded in 2003, which supports and conducts research activities on the production of cement and its application in concrete, aiming at advancing innovation within the context of climate change mitigation and sustainable construction. Related material issues: 1, 2, 4, 6, 7 Material issues: (1) Future-ready business model in a carbon-neutral world (2) Innovation with emphasis on digitalization and decarbonization (3) Safe and healthy working environment (4) Continuous development of our people (5) Diverse and inclusive workplace (6) Positive local social, economic and environmental impact (7) Resource efficiency, recycling, and recovery, contributing to the circular economy (8) Reliable and sustainable supply chain (9) Good governance, transparency and business ethics INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Participations Participations 24 Kamari cement plant, Greece 24 252525 UNDERSTANDING TITAN performance highlights An overview of our Group’s overall performance in 2021, focusing on our ﬁnancial and ESG pillars. 26 Financial performance Revenue growth in all geographies and strong Group net proﬁt (NPAT). In 2021 the fundamentals driving demand across our markets, namely the strong recovery of economic activity and a rise in public and private investment against a low interest rate environment, stimulated growth. It was a year of robust performance for TITAN Cement Group, although the second half of 2021 was marked by the surge in fuel, electricity and shipping freight costs, which held back proﬁtability. TITAN Cement Group generated record revenues of €1,714.6 million, up 6.7% from 2020, reﬂecting higher demand and a supportive pricing environment. Due to the unexpected spike of input costs in the second semester and despite pricing initiatives that partly alleviated the burden, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) declined by 3.6% to €275.2 million. Net Proﬁt after Taxes and minorities (NPAT) climbed to €91.9 million (vs €1.1 million in 2020 and €50.9 million in 2019). This signiﬁcant increase was the result of lower ﬁnance costs, more favourable FX movements and a lower effective tax rate. It should be noted that in 2020 there were €63.9 million one- off charges related to Egypt. Thanks to a successful reﬁnancing strategy the Group lowered signiﬁcantly its ﬁnance costs for a third consecutive year to €33.6 million (€19.0 million lower than 2020 and €30.0 million lower than 2019). 2021 performance highlights TITAN’s US operations had another strong year. Beneﬁtting from the growth of the housing market, sales in cement, ready mix and concrete blocks increased while sales in aggregates were sustained at high levels. Fly ash volumes reversed the previous year’s trend by posting signiﬁcant sales growth thanks to higher supply. Overall, in US$ terms, 2021 revenue increased by 8.6% year on year reaching $1.2 billion. In euro terms, revenue increased by 4.7% to €983.6 million, while EBITDA decreased to €158.0 million, a decline of 10.5% compared to 2020 due to the spike of energy, labor and transportation costs in the second semester. Greece continued its upward trajectory with further improved performance. In 2021, higher domestic demand combined with higher export volumes and further operational efficiencies from the implementation of the digital optimization initiatives, were only partially offset by the increase of fuel and electricity costs. All in all, revenue for Greece and Western Europe increased by 9.4% to €267.6 million while EBITDA increased by €7.4 million to €23.6 million. Southeastern Europe continued its ascending track as well, recording increased revenues of 7.3% at €290.6 million. During 2021 both cement plants in Albania and in North Macedonia achieved a new record, exceeding sales of 1 million tonnes. On the other hand, electricity and energy costs rose sharply after the second quarter of the year, resulting in an EBITDA of €81.9 million, lower by 14.8%. Despite the macroeconomic uncertainties in the Eastern Mediterranean region, performance marked a material improvement year on year. In Egypt, the rationalized production regime implemented by the authorities improved the cement supply-demand balance and drove pricing to healthier levels. In Turkey, despite the slowdown of the economic activity and the pronounced volatility of the currency, domestic demand remained high. Following few years of weak performance and despite the macroeconomic uncertainties, the Eastern Mediterranean region recorded total revenue of €172.8 million, an increase of 13.9% from 2020. EBITDA was €11.8 million versus a €3.3 million loss in 2020. Finally, our Brazilian operations continued to grow signiﬁcantly. Increased sales volumes thanks to strong market fundamentals Trends in domestic sales volumes were positive across all regions, testifying to strong market fundamentals. At Group level, volumes increased across all product lines: cement, ready-mix concrete, aggregates, building blocks and ﬂy ash. Group cement sales increased by 7% compared to 2020, reaching 18.3 million tonnes, with US being the main contributor of this increase. Ready-mix concrete sales increased by 2% in 2021, reaching 5.5 million m 3 on the back of stronger sales in US and Greece. Aggregates' sales increased by 1% reaching 20.2 million tonnes, thanks to the strength of the Greek market. 2021 2020 +/- Cement (million metric tonnes) 18.3 17.1 7% Ready-Mix concrete (million m 3 ) 5.5 5.4 2% Aggregates (million metric tonnes) 20.2 20.0 1% Cement sales include clinker and cementitious materials Includes Brazil, does not include Associates Investments and Operating Free Cash Flow In 2021, Group Operating Free Cash Flow reached €104.7 million versus €225.3 million in 2020. Lower OFCF was primarily due to higher capital expenditures by €41.8 million from the catch-up of the 2020 COVID-19 -restrained investment program, higher working capital needs by €48.9 million resulting from stronger business activity and higher levels of fuel inventories. Group capital expenditures during the year reached €126.0 million compared to €84.3 million in 2020, with most of the funding directed to investments focusing on production efficiencies, improved logistics capacities and reduction of carbon footprint. Moreover, the ﬁnal tranche of €40.8 million were paid to IFC for the acquisition of their minority stakes held in the Group's activities in Southeastern Europe and Egypt. 2021 2020 2019 Operating free cash ﬂow €104.7m €225.3m €175.1m Capital expenditure €126.0m €84.3m €109.3m Net debt at the year end €713.2m €684.4m €839.6m UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS 27 Group Leverage Year-end net debt increased to €713.2 million (2020: €684.4 million), following the repayment of a €163.5 million outstanding bond and the conscious reduction of cash balances. Net Debt/ EBITDA ratio came at 2.61x. To diversify its funding base, TITAN Group uses a variety of funding sources and debt instruments that combine long-term and short- term ﬁnancing. At year end, 75% of Group debt was in bonds, 17% in bank loans and 8% in lease liabilities. In the prevailing low interest environment, the Group took a number of initiatives and succeeded in both lowering its ﬁnance costs and extending the debt maturity proﬁle. In June 2021, TITAN paid back the remaining €163.5 million of the originally €300 million Notes issued in 2016. The next signiﬁcant maturities are one issue of €350 million maturing in November 2024 and another issue of €250 million maturing in July 2027. Both outstanding bonds are traded on the Global Exchange Market (GEM), which is the exchange-regulated market of Euronext Dublin. In December 2021, Standard & Poor’s affirmed its rating for Titan Cement International S.A. of “BB” with a stable outlook. Outstanding bonds ISIN Amount Outstanding Coupon Maturity XS2199268470 250,000,000 2.750% 09/07/2027 XS1716212243 350,000,000 2.375% 16/11/2024 Resolutions of the Board of Directors • Cancellation of treasury shares: In June 2021, TITAN Group cancelled 4,122,393 own shares, representing 5% of the voting rights. Following this transaction, the share capital of Titan Cement International amounts to €1,159,347,807.86 and is represented by 78,325,475 shares. • Share buy-back: In October 2021, following the Board’s decision, the Group activated a share buy-back program of an amount up to €10 million for a duration of up to six months. Until the end of 2021, 230,141 shares were purchased on Euronext Brussels and the Athens Exchange (ATHEX) for a total consideration of €3.2 million. On 31 December, the Group owned treasury shares representing 1.91% of the voting rights. • Initiation of a new share buy-back programme: In March 2022, given the latest market developments, the Board decided to implement a new share buy-back programme. The new programme will begin on or around April 1, 2022, following the end of the current running programme. The new share buy-back programme will be up to €10 million and will have a duration of up to six months. TCI will keep the market fully informed of the progress of the relevant transactions in line with applicable regulations. • Return of Capital: Following the authorization granted to the Board of Directors by the Extraordinary Meeting of the Company's Shareholders on 13 May 2019, the Board decided the return of capital of €0.50 per share to all the Shareholders of the Company. All shareholders who are recorded as shareholders on Thursday, 28 April 2022, at 12.00 midnight (CEST) (record date) will be entitled to receive the capital return. Shareholders will receive the payment of the capital return on Tuesday, 5 July 2022, through their custodians, banks, and securities brokers. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 0 50 100 150 200 250 300 350 400 <Dec '21 <Dec '22 <Dec '23 Dec '27 4 7 1 6 5 6 8 16 6 100 14 364 252 33 8 16 247 348 2 8 6 84 6 Bank debt Bond Leases 28 DEBT MATURITY PROFILE (€m) AS OF 31 DECEMBER 2021 28 TITAN Cement Company S.A. was founded in 1902 in Athens, Greece and its shares were listed on the Athens Exchange in 1912. In June 2019 following a successful share exchange tender offer, Titan Cement International (“TCI”) became TITAN Cement Group’s parent company. TCI is listed in Euronext Brussels (primary listing) as well as in the Athens Exchange and in Euronext Paris. Aiming to enhance value for its shareholders, Titan Cement Group decided to cancel treasury stock of 4,122,939 own shares corresponding to 5% of the total shares of TCI on June 22nd, 2021. Therefore, since then the total number of outstanding shares of TCI was 78,325,475. TCI’s shares are included in various indices, such as the BEL Mid Cap Index and the FTSE/ATHEX Large Cap. Moreover, TCI shares are constituents of the BEL Industrials, BEL Continuous, BEL ALL- Shares, ATHEX Composite, MSCI Greece Small Cap, CAC All-Shares and CAC industrials indices. Furthermore, TCI shares were also included in the ATHEX ESG index that was launched in August 2021. The ATHEX ESG Index tracks the ﬁnancial performance of companies listed in the Athens Exchange who adopt and actively promote ESG practices. Share price evolution The share price of TCI as of December 31 st , 2021, closed at €13.26 on Euronext and at €13.38 on the Athens Exchange, corresponding to a decline of 4.4% and 2.6% year on year respectively. In 2021, the BEL Mid cap Index and the ATHEX General Index, increased by 21% and 10%, respectively. As of December 31 st , 2021, TCI’s market capitalization stood at €1.05 billion (previous year at €1.1 billion). Liquidity and market making contracts Targeting an enhancement of liquidity for its shares in both exchanges, TCI partners with liquidity providers and market makers. At the end of 2020 TCI signed a liquidity provider agreement for its shares on Euronext with KBC Securities and a market maker agreement for its shares traded on the Athens Exchange with Eurobank Equities. In early 2021 Piraeus Securities was added as a second market maker in the Athens Exchange. ESG investors Titan Cement International is committed to sustainable development and focuses its efforts on the four pillars deﬁned as material by its stakeholders to meet its ESG targets for 2025 and beyond. TCI aligns its targets with the expectations of its stakeholders, follows best practices and continuously seeks feedback from independent ESG rating agencies. Since 2010, ΤΙΤΑΝ Cement Group has attained and maintained the “Advanced” level reporter status in line with United Nations Global Compact principles. During 2021, TCI has been assessed multiple times by various rating agencies on its ESG performance, achieving very positive results. Amongst other ratings, TCI achieved an improved rating of “AA” from MSCI ESG Research (versus “A” in 2020) and a “A-” score from CDP. Details on ESG ratings for TCI, can be found on page 29. Equity market information TITAN Cement Group is committed to maintaining relationships of trust with the investment community. Treasury shares In October 2021, the Group activated a share buy-back programme. By the end of 2021, 230,141 shares were acquired for an amount of €3.2 million. At the end of 2021, treasury shares represented 1.91% of total voting rights. For more information please refer to the “Financial review” section on page 27. Shareholder structure of TCI Below you can ﬁnd the shareholder structure of the Company as of December 31st, 2021*: • E.D.Y.V.E.M. Public Company Ltd and TCI founders acting in concert 39.12% • Paul and Alexandra Canellopoulos Foundation 10.17% • FMR LLC, FMR CO Inc, Fidelity Institutional Asset Management Trust Company, FIAM LLC 10.53% • Others 40.18% * Based on the transparency notiﬁcations made by its shareholders on 24 June 2021 and on changes in shares that did not require a transparency declaration due to the fact that the 5% threshold was not exceeded either upwards or downwards. Data for FMR LCC are based on the transparency notiﬁcations made on 24 June 2021. GEOGRAPHIC SPLIT OF TCI'S SHRAREHOLDER STRUCTURE Europe 69% USA & Canada 15% UK & Ireland 3% Rest of the world 13% Source: Shareholder ID and company estimates Symbols Euronext ATHEX Oasis TITC TITC Reuters ticker TITC.BR TITC.PA Bloomberg ticker TITC.BB TITC.GA ISIN code: BE0974338700 UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS 29 ESG performance acknowledged by world-leading rating agencies We are committed to continuously improving our sustainability performance and further aligning our targets with the expectations of our stakeholders. To this end, we seek and value feedback from independent ESG rating agencies. In 2021, TITAN was recognized by the CDP as a global climate leader for its transparency, climate actions and transition to a net zero carbon economy. With an “A-” score, TITAN was ranked in the top 15% of publicly disclosing companies globally, being one of only ﬁve cement sector companies (out of 27) to achieve this level. TITAN received an MSCI ESG Rating of “AA”. MSCI ESG Research provides ESG Ratings on global public and a few private companies on a scale of AAA (leader) to CCC (laggard).* TITAN was ranked 10 th in the construction materials sector across Europe and America, with a “B+” score by Reﬁnitiv. TITAN received an improved ESG Risk Rating of 27.9 and was assessed by Sustainalytics to be at medium risk of experiencing material ﬁnancial impacts from ESG factors. The score places us 16 th out of 119 construction materials companies. TITAN was ranked 5 th out of 25 in the building materials’ sector by V.E., part of Moody’s ESG Solutions, with an ESG overall score of 56/100. The Group was assessed to have a robust ESG performance and a high reporting rate (90%) compared to the sector average (75%). In the ISS ESG Corporate Rating, TITAN was assessed as a company with a very high transparency level and received an overall rating of “C” with a decile rank of 2, indicating a high relative ESG performance in its industry group. TITAN received a score of 54 in the 2021 S&P Global Corporate Sustainability Assessment, reﬂecting an improvement of 22 points over the previous year. * Disclaimer statement. The use by Titan Cement International S.A. of any MSCI ESG research llc or its affiliates (“MSCI”) data, and the use of MSCI logos, trademarks, service marks or index names herein, do not constitute a sponsorship, endorsement, recommendation, or promotion of Titan Cement International by MSCI. MSCI services and data are the property of MSCI or its information providers, and are provided ‘as-is’ and without warranty. MSCI names and logos are trademarks or service marks of MSCI. Disclaimer: All logos, trademarks, service marks or index names used in this website are the property of their respective owners and are used for informational purposes only. The use of the such logos, trademarks, service marks or index names in this website does not constitute a sponsorship, endorsement, recommendation, or promotion of Titan Cement International S.A. or any of its subsidiaries by any of the respective owners of the logos, trademarks, service marks or index names. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP S&P Global Ratings 30 In 2021 we recorded substantial progress towards our ESG targets, demonstrating our strong commitment to sustainability and long-term value creation for our customers, local communities, employees and other stakeholders. Targets 2025 and beyond 2020 2021 annual progress Decarbonization and digitalization SBTi validation - Targets validated Scope 1 1 Reduction of our net CO₂ emissions to 500kg/t cementitious product (-35.0% vs. 1990 level) 674.0 (-13.4% vs. 1990) 654.2 (-16.0% vs. 1990) Scope 1 1 Reduction of our gross CO 2 emissions to 553kg/t cementitious product (-20.7% vs. 2020 level) 697.9 681.9 (-2.3% vs. 2020) Scope 2 1 Reduction of our CO₂ emissions to 32kg/t cementitious products (-45.0% vs. 2020 level) 61.0 51.5 (-15.6% vs 2020 level) Monitoring and independent veriﬁcation of supply chain (Scope 3) 2 emissions (kgCO₂/t cementious product) 116.8 103.4 Scope 3 emissions veriﬁed by independent auditor We commit to drive down the CO₂ footprint of our operations and products aspiring to deliver society with carbon-neutral concrete by 2050 Business Ambition for 1.5 o C commitment letter signed Increase annual investment in Research and Innovation to €20m 10.5 10.7 Growth enabling work environment Zero Fatalities 3 0 LTI frequency rate (employees) performance among the three best in peer group 3 0.57 0.91 Wellbeing initiatives, addressing the physical, mental, social and ﬁnancial dimensions of wellbeing for our employees, in all countries 43 118 1/3 female participation in BoD (%) 21.0 20.0 Promote equal opportunities and inclusion and increase by 20% female participation in senior roles, talent pools and new hires % women participation in management 16.5 17.6 % women in senior management 14.0 14.7 % women in new hires 13.4 17.2 100% of employees with access to upskilling and reskilling opportunities, especially in areas vital for sustainable growth, such as health and safety, digitalization, and decarbonization. Learning hours in health and safety and digital increased by 38% and 251% respectively ESG PERFORMANCE Making progress towards our ESG targets UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS 31 1 Scope 1: direct CO₂ emissions (net); Scope 2: indirect CO₂ emissions from electricity. 2 Scope 3: indirect CO₂ emissions of the supply chain related to six categories considered relevant to cement production activities according to GCCA guidance. 3 Frequency of Lost Time Injuries (LTIFR) per million worked hours. Peer group deﬁnition: Cemex, Holcim, Argos, HeidelbergCement, CRH, Cementir, Vicat, Buzzi. Comparison based on latest available information. 4 Active wholly-owned sites 5 Integrated cement plants 6 Key suppliers: critical ones according to GCCA Guidance for Sustainable Supply Chain management with a meaningful level of spend for TITAN. Positive local impact targets 2025 and beyond 2020 2021 annual progress Sustain and further improve strong performance in cement production-related speciﬁc dust, NOx and SOx emissions Dust emissions (g/t clinker) 19.3 16.6 NOx emissions (g/t clinker) 1,282 1,263 SOx emissions (g/t clinker) 253 245 100% of sites 4 with quarry rehabilitation plans 91 91 Rehabilitation of 25% of affected areas 23.6 22.6 Quarry biodiversity management plans at 100% of our sites 4 in high biodiversity value areas 90.0 83.0 100% of key operations covered with community engagement plans (CEP), aligned with material issues and UN SDGs 2030 All key operations covered by 124 initiatives • All key operations covered by 142 initiatives • New CEP guidance framework 2/3 of total spend directed to local suppliers and communities (%) 67.0 65.1 Responsible sourcing Commit to a water consumption of 280l/t cementitious product 260.5 245.7 70% of water demand covered by recycled water 67.2 66.1 85% of production 5 covered by ISO 50001 or energy audits 54.9 86.2 50% of production 5 covered by “Zero Waste to Landﬁll” certiﬁcation 29.5 56.2 70% of key suppliers 6 meeting TITAN ESG supplier standards • Sustainable Supply Chain Roadmap • New Group Procurement Policy in 2021 • ESG criteria to evaluate key suppliers Progress key: Achieved On track In progress INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 32 Delivering on our ambitions with concrete actions Decarbonization and digitalization TITAN seeks to transform its business, focusing on resilience, innovation and building solutions to serve our customers more efficiently as we move towards a carbon-neutral, digital world. Αs a signatory to the “Business Ambition for 1.5°C” commitment, a worldwide campaign led by the Science Based Targets initiative (SBTi), TITAN is committed to playing its part to limit global warming to 1.5°C and to reach net-zero emissions by 2050. By increasing the use of alternative fuels, accelerating our efforts in energy efficiency, developing low-carbon products and adopting innovative technologies and solutions, we further improved our performance to meet the ESG targets we have set for 2025 and beyond. In 2021, we reduced our speciﬁc emissions to 654.2kg CO₂ per tonne of cementitious product, 16.0% below 1990 levels. Following an investment of ca. €20 million across several TITAN plants in alternative fuel processing facilities and in feeding and combustion infrastructure in the USA, Bulgaria, Greece and North Macedonia, our alternative fuel thermal substitution rate grew to 15.5% in 2021, from 13.1% in 2020. We further reduced the carbon footprint of our products by shifting to lower-carbon cements in the USA, Greece, Egypt and North Macedonia. Meanwhile, since September, approximately half of Titan America’s cement output consists of the lower-carbon Type IL cement, which has almost 15% lower carbon emissions. Also, the Kamari plant in Greece has expanded its export product portfolio to include Type IL to meet US market demand for sustainable construction materials. We also reduced our Scope 2 emissions by 15.6% in 2021, bringing them to 51.5kg CO₂ per tonne of cementitious product due to our energy efficiency measures and the decarbonization of national power generation. In order to measure our Scope 3 emissions, we ran a full-scale exercise covering 13 integrated and 2 grinding cement plants. Scope 3 emissions represent 12.2% of total emissions and equal 103.4kg CO₂ per tonne of cementitious product. Through our participation in the Open Innovation Challenge of the Global Cement and Concrete Association (GCCA), we continued to contribute to the research activity of the GCCA’s Innovandi research network. We are experimenting with the use of hydrogen as a fuel enhancer in cement clinker manufacturing and have run industrial pilots in Greece and Bulgaria. With tangible progress on all focus areas, we are well on track to achieve all our ESG targets for 2025 and beyond. ESG PERFORMANCE % heat basis 0% 5% 10% 15% 20% 2016 2017 2018 2019 2020 2021 15.5% 13.1% 13.5% 12% 8.9% 8.4% ALTERNATIVE FUEL SUBSTITUTION RATE OUR CARBON FOOTPRINT IN 2021 Scope 1: 81.6% Scope 3: 12.2% Scope 2: 6,2% 31.2 million t Avoided (direct net) CO₂ emissions (1990-2021) kg/t cementitious product 620 640 660 680 700 720 2016 2017 2018 2019 2020 2021 654.2 674.0 676.6 686.1 700.3 701.4 SPECIFIC NET DIRECT CO2 Scope 1) UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS 33 In 2021, TITAN Group worked on identifying and assessing the risks from climate change, and the opportunities from the transition to a low-carbon economy, in alignment with the TCFD Framework. We were recognized by the CDP (formerly Carbon Disclosure Project) as a global climate leader for our transparency and actions to mitigate climate change and transition to a net-zero economy with an “A-” score. In the related ﬁeld of digitalization, we see big data, analytics and artiﬁcial intelligence (AI) of Industry 4.0 as an opportunity to transform the industry. In 2021, our Group Digital Center of Competence continued the rollout of existing AI-based Real Time Optimizer solutions in plants in the USA, Greece, Brazil and Southeastern Europe, leading to increased productivity and energy efficiency. We also rolled out a machine learning-based failure prediction system in plants in the USA, Egypt and Southeastern Europe. We continued to develop AI-based tools and proprietary tools for forecasting sales demand as well as selected production inputs. To improve customer experience and create a more efficient commercial operating model, we worked on digitalizing how we interact with our customers, deploying digital customer applications in business units in the USA and Europe. We support a digital transformation journey through internal and external capability-building efforts and by creating an ecosystem of partners comprising start-ups, academic institutions, equipment and systems manufacturers and specialized advisers. Group annual investment in Research and Innovation with emphasis on digitalization and decarbonization stood at €10.7m in 2021. Growth-enabling work environment Core to our purpose is the cultivation of an inclusive culture with equal opportunities for all our people to grow professionally within a safe and healthy work environment. In 2021, safeguarding our people and operations against COVID-19 remained our priority. We responded to the challenge of the pandemic across all regions, with more than 13 initiatives in 7 countries to combat the impact on our employees and business partners as well as to provide humanitarian support to local communities. We launched information campaigns on vaccination and encouraged our employees to get immunized, covering the cost for more than 1,500 employees and contractors in the USA, Egypt, Albania and North Macedonia. Guided by our Group Health and Safety policy, we systematically strengthened our accident prevention and health promotion systems in all production and distribution operations. In Europe, Turkey and Egypt, all of the cement plants and more than 83% of the combined ready-mix concrete and aggregates plants are now certiﬁed to the ISO 45001 standard, which has replaced OHSAS 18001. In the USA, all TITAN activities conform to the requirements of the relevant OHS organizations. Lost Time Injuries Frequency (LTIFR) for our own personnel was 0.91 LTI per million hours worked. While slightly higher than in 2020 (0.57 LTIs per million hours worked), the ﬁgure remains consistent with the continuous improvement that began in 2017 (LTIFR 2.41) and has yielded an overall reduction of 62% that places us among the best in our peer group. There were no fatalities. Living up to our commitment to implement initiatives for the physical, mental, social and ﬁnancial wellbeing of our people, 0 0.5 1.0 1.5 2.0 2.5 3.0 2016 2017 2018 2019 2020 2021 0.91 0.57 1.44 1.54 2.41 1.92 #/10⁶ h 0 20 40 60 80 100 120 2016 2017 2018 2019 2020 2021 38.1 24.1 57.4 55.7 109.0 78.2 EMPLOYEE LOST TIME INJURIES SEVERITY RATE d/10⁶ h INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 34 to their social and environmental concerns is a major pillar of our ESG targets and a ﬁeld where TITAN has always demonstrated strong performance. In all our plants, management systems monitor and report on the reduction of air emissions, the protection of biodiversity, water management and recycling and quarry rehabilitation. Across the group, we maintained a strong performance in reducing cement production-related dust, NOx and SOx emissions, which were within the target set for 2025. The percentage of active quarry sites with rehabilitation plans remained at the same level as last year. Furthermore, the percentage of quarry land areas rehabilitated out of the total affected land was slightly reduced. Although there was progress with the rehabilitation activities in most of our Group Quarries, this has not been reﬂected in the relevant indicator due to the opening of a large land area in one aggregates quarry in Titan America. However, the rehabilitation activities will continue in the following years so as to achieve the respective ESG targets for 2025. Finally, the number of the active quarry sites with biodiversity management plans increased to 10, following the completion of the plan at Agrinio quarry in Greece. The focus is now to develop biodiversity management plans at the two new sites recognized for their high biodiversity value, in order to meet the respective ESG target for 2025. Our community engagement plans (CEP) were aligned with the material issues for our stakeholders and the UN SDGs 2030. We implemented 142 initiatives in all countries of operation, which we launched a Group-wide mental health campaign to raise awareness and promote good mental health. Individual business units provided a variety of programs to their employees, from cyber and live expert talks, smoking cessation programs, and nutritional support classes to virtual exercise sessions. The recognition that achieving our aspirations for diversity and inclusion requires the awareness, action, responsibility and accountability of everyone in our business is at the foundation of our Group Diversity, Equity and Inclusion Policy, launched in 2022. The share of women in management increased to 17.6 in 2021 from 16.5 in 2020. The Group is on track to increase the participation of women in senior roles, talent pools and new hires by 20% by 2025. Investment in upskilling our people and building the required capabilities needed for long-term growth continued. Due to COVID-19 restrictions, our efforts focused on ensuring digital training reached all targeted audiences. Our e-learning offerings increased to 11,233 virtual training hours in 2021, corresponding to 214 courses. Total learning hours in health and safety and digital increased by 38% and 251% respectively. Our external learning platform provides employees with a vast choice in acquiring knowledge and building skills. 97% of the available LinkedΙn learning licenses have been activated, resulting in the completion of attendance of nearly 29,000 learning videos by almost 980 employees. Positive local impact Enabling our business operations and our people worldwide to contribute to the prosperity of our local communities with respect g/t clinker 1,000 1,200 1,400 1,600 1,800 2,000 2016 2017 2018 2019 2020 2021 1,263 1,282 1,269 1,307 1,345 1,709 SPECIFIC NO € 25.3m Investments in environmental protection in 2021 65,132t Avoided dust emissions (2003-2021) 2016 2017 2018 2019 2020 2021 83%83%83% 81% 80% 81% 75% 77% 79% 81% 83% 85% UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS 35 saw the engagement of more than 2,750 participants, of whom almost 2,000 were TITAN employees. The CEPs beneﬁtted, directly and indirectly, more than 0.4 million people in the local and broader communities around our operations. We also ensured that two-thirds of our total spend was directed to local suppliers and communities, thus further enhancing our positive local impact. In total, our 2021 local spend accounted for 65.1% of total spending, close to the level of 2020. Responsible sourcing We are committed to the circular economy, taking actions to minimize, reuse, recycle or recover materials and energy in order to preserve natural resources, reduce CO₂ emissions and manage waste efficiently. In 2021, speciﬁc water consumption at our cement and grinding plants and their attached quarries showed a reduction of approx. 6%, reaching 245.7l per tonne of cementitious product, which is well below the target set for 2025. In addition, use of recycled water over total water demand decreased slightly to 66.1%, but is is still on track to reach the respective target for 2025. We also continued to expand the use of energy-efficiency management systems, with our plants in Alexandria and Beni Suef in Egypt and Usje in North Macedonia successfully installing systems certiﬁed according to ISO 50001:2018. As a result, 86.2% of our total clinker production is now covered by ISO 50001, exceeding the 2025 target of 85.0% and marking a 54.9% improvement from last year. Steady progress was made to reduce landﬁll waste. Our cement plants in Greece (Kamari, Patras and Thessaloniki) obtained “Zero Waste to Landﬁll” certiﬁcation – and the highest Platinum rating – for diverting virtually all plant waste from landﬁll. As a result, 56.2% of our total clinker production is now covered by “Zero Waste to Landﬁll” certiﬁcation, exceeding the 2025 target of 50.0% and showing an increase of 29.5% from 2020. To empower our business ecosystems to incorporate sustainability considerations in their business decisions and daily behaviors, a Sustainable Supply Chain Roadmap was developed with speciﬁc milestones to ensure that 70% of our key suppliers meet TITAN ESG Supplier standards by 2025. As a ﬁrst step and in line with the roadmap, our ﬁrst TITAN Group Procurement Policy was published, laying down the fundamental principles governing procurement, incorporating practices that enhance our commitment to be a socially responsible, ethical and environmentally sensitive enterprise. Our efforts to engage with our suppliers on climate change have been recognized by CDP with an “A-” score in the CDP Supplier Engagement rating, which is in the Leadership band of CDP. 36.3 million m³ Avoided water consumption (2003-2021) 86.2% of the Group’s total clinker production capacity covered by ISO 50001 % Dry 0% 2% 4% 6% 8% 2016 2017 2018 2019 2020 2021 6.6% 6.4% 7.1% 5.5% 5.4% 5.1% ALTERNATIVE RAW MATERIALS USE 2,750 participants in 142 community engagement initiatives INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 36 Through sound corporate governance, we aim to ensure that every management decision is aligned with our purpose and core values, takes due account of our sustainability considerations and serves the best interests of our stakeholders. By proactively identifying, assessing and managing all our potentially signiﬁcant risks and opportunities, we ensure that we are prepared to achieve our strategic objectives and address issues that may affect the long-term sustainability of our business. UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS ESG PERFORMANCE Legal structure of Titan Cement International S.A. Titan Cement International S.A. (TITAN or the Company) is a public limited liability company (société anonyme) incorporated under Belgian law. Its shares are listed on the regulated markets of Euronext Brussels, Euronext Paris and the Athens Exchange. The seat of the management of the Company is in Cyprus. Governance structure TITAN has a one-tier governance structure, consisting of the Board of Directors, which is authorized to carry out all actions that are necessary or useful to achieve the company’s purpose, except for those which only the General Meeting of Shareholders is legally authorized to carry out. At least once every ﬁve years, the Board of Directors reviews whether the chosen governance structure remains appropriate. Board of Directors The Company’s Board is currently composed of 15 directors. The Board members have high-level, diverse and complementary expertise, and signiﬁcant experience relevant to the main challenges that TITAN faces in its business environment and key markets. The Board members bring their experience and competence in many areas including ﬁnance, international investments, engineering, technology, business administration, sustainability, strategic planning, banking, legal/regulatory matters, insurance, audit, energy, politics, government and foreign affairs, as well as their broader perspective on society and the world. The Board’s role Our Board, as a collegial body, pursues sustainable value creation by setting the Company’s strategy, putting in place effective, responsible and ethical leadership, and monitoring the Company’s performance. To effectively pursue such sustainable value creation, the Board has developed an inclusive approach that balances the legitimate interests and expectations of shareholders and other stakeholders. The Board appoints the executive management and constructively challenges the executive management when appropriate. Management Committee The Management Committee is composed of the Managing Director of the Company and other members appointed and removed by the Board of Directors. Its main role is to support the Managing Director in the day-to-day management of the Company. Group Executive Committee The Group Executive Committee (ExCo) consists of the following members: • Dimitri Papalexopoulos, Chair • Alexandra Papalexopoulou, Deputy Chair • Michael Colakides, Managing Director and Group CFO • Leonidas Canellopoulos, Group Chief Sustainability Officer • Michael Chivers, Group Human Resources Director • Antonis Kyrkos, Group Transformation and Strategic Planning Director • Yanni Paniaras, Group Executive Director Europe and Sustainability • Christos Panagopoulos, Regional Director Eastern Mediterranean • Fokion Tasoulas, Group Innovation and Technology Director • Bill Zarkalis, Group COO, President and CEO of Titan America LLC The role of the Group Executive Committee is to facilitate: • cooperation and coordination of the Company’s subsidiaries • supervision of Group operations • monitoring of Group management performance • implementation of decisions and related accountability Good governance, transparency and business ethics 37 Efstratios-Georgios (Takis) Arapoglou Chairman Chair of Nomination Committee Non-executive Director Kyriacos Riris Vice-Chairman Chair of Audit and Risk Committee Independent Director Dimitri Papalexopoulos Chair of the Group Executive Committee Executive Director Michael Colakides Managing Director and Group CFO Executive Director William Antholis Member of Remuneration Committee Independent Director Andreas Artemis Member of Nomination Committee Independent Director Leonidas Canellopoulos Chief Sustainability Officer Executive Director Harry David Member of Audit and Risk Committee Independent Director Lyn Grobler * (since 31 December 2021) Member of Nomination Committee Independent Director Yanni Paniaras Group Executive Director Europe and Sustainability Executive Director Alexandra Papalexopoulou Deputy Chair of the Group Executive Committee Executive Director Stelios Triantafyllides Member of Remuneration Committee Independent Director Dimitris Tsitsiragos Member of Audit and Risk Committee Independent Director Bill Zarkalis Chief Operating Officer President and CEO of Titan America LLC Executive Director Mona Zulﬁcar Chair of Remuneration Committee Independent Director INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Other Board committees The Board, in order to discharge its duties effectively and efficiently, has set up specialized committees to analyze speciﬁc issues and provide relevant advice. Without prejudice to its right to set up other committees, the Board has established the: • Audit and Risk Committee, comprised entirely of independent directors • Remuneration Committee, comprised entirely of independent directors • Nomination Committee, comprised of two independent directors and chaired by the Chairman of the Board, who is a non- executive director The Board ensures that each committee has a balanced composition and has the necessary independence, skills, knowledge, experience and capacity to execute its duties effectively. 699.05%3/15 Directors are female 8/15 Directors are independent 9/15 Directors are non-executive Board attendance Different nationalities represented on the Board (US, Egypt, UK, Cyprus, Greece, South Africa) * Maria Vassalou served as Independent Director and member of the Nomination Committee until 31 December 2021. Titan Cement International S.A. Board of Directors: 38 Sustainability governance Sustainability is embedded ﬁrmly in our strategy through the regular review of all issues that are material to the business and our stakeholders, the deﬁnition of appropriate actions and targets, and the adherence to environmental, social and governance policies. Our two governance bodies, the Board of Directors and the Group Executive Committee, oversee the implementation of our strategy and sustainability imperatives and reﬂect the culture of good governance, transparency and business ethics that is prevalent across the Group. ExCo Sustainability Committee Chair: Chairman of the Group Executive Committee Convener: Chief Sustainability Officer The Group Executive Committee, acknowledging sustainability as a top priority of the Company, has set up an ExCo Sustainability Committee comprised of Executive Directors of the Company, the Group ESG Performance Director and other senior managers of the Group depending on the agenda. TITAN’s Executive Sustainability Committee is convened by the Chief Sustainability Officer to monitor performance and implementation of the sustainability strategy set by the Board. In particular, its role is to: • oversee and monitor the implementation of the Company’s sustainability strategy • monitor performance vs. ESG targets and • decide on corrective actions, review and revise the areas of focus, set appropriate targets dynamically reviewing the corporate materiality assessment Sustainability Working Group (SWG) Chair: Chief Sustainability Officer Convener: Group ESG Performance Director The Sustainability Working Group SWG is responsible for supporting the coordination of the Group sustainability agenda and the relevant decision-making at both Group and regional level. The main responsibilities of the SWG are to: • develop and prepare speciﬁc proposals related to the Group Sustainability Agenda • cascade targets internally through different functions and business units • coordinate TITAN’s partnerships with international organizations, networks and initiatives Group ESG performance department The role of the Group ESG Performance department is to consolidate, coordinate and monitor the sustainability actions undertaken across the Group, ensuring that we collectively deliver the best possible results against well-deﬁned ESG criteria. It does so through a network, which consists of ESG liaison delegates from every business unit and coordinates the implementation of sustainability commitments at regional level. Introducing ESG criteria in executive Remuneration TITAN recognizes that linking environmental, social and governance (ESG) performance to executive pay can help hold executive management to account for the delivery of the Group’s ESG targets, while strengthening the oversight of the sustainability agenda at Board level. As per the Group’s remuneration policy, a three-year CO₂ target that is compatible with the Group’s 2030 CO₂ targets is included in the performance objectives of the deferred compensation incentive for executive members of the Board and the members of the Executive Committee. In addition, 5% of the Short- term Incentive Scheme (STIP) is linked to the Lost Time Injury Frequency Rate. Group policies and Code of Conduct To ensure that we conduct our business with respect, accountability and responsibility, we have developed our Code of Conduct and Group Policies, applicable to all Group operations, which cover all strategic areas and provide guidelines to employees and external business collaborators, to ensure compliance with the applicable internal and statutory rules. Group Policies include, but are not limited to, Anti-Bribery and Corruption, Conﬂict of Interest, Competition Law, Sanctions, Corporate Social Responsibility, Whistleblowing, Environmental and Climate mitigation, Protection of Personal Data, Human Rights, Occupational Health and Safety. In 2021, we launched a new Procurement policy and at the beginning of 2022, we launched a new Diversity, Equity and Inclusion policy. All our policies are available on the Group corporate website (https:// www.titan-cement.com/about-us/corporate-governance/group- policies/). Male: 17 Female: 21 ESG NETWORK MEMBERS UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS 39 TITAN Group’s Compliance Program and business ethics A TITAN Group Compliance Program has been in place since 2020, as an integrated system of activities, mechanisms and controls, aiming to provide adequate assurance that compliance risks are timely identiﬁed, properly assessed and effectively mitigated, so that the possibility of a signiﬁcant compliance failure is minimized. The Compliance Program facilitates the effort to maintain and foster a strong compliance culture, ensuring adherence to compliance requirements and promoting consistent and responsible ethical behavior. It is a risk-based program with dynamic elements and incorporates monitoring and oversight, compliance awareness, training, risk assessment and third-party due diligence components. Consistent with our values and culture, and as clearly articulated in the TITAN Code of Conduct and relevant Group Policies, the Group follows a zero-tolerance approach towards bribery, fraud and any other corruptive practice. The Anti-Fraud Program Framework was developed during 2021 and widely communicated throughout the Group promoting openness and transparency, providing standards and guidelines, and clarifying roles, expectations and responsibilities on the subject of occupational fraud. TITAN launched in 2021 the second phase of its “Group Policies Awareness” program, with the aim to raise awareness and understanding around our Code of Conduct and the set of Sustainability and Social Responsibility Policies – the tools that foster ethical behavior and represent “Our Culture in Practice”. Commitment to human rights Consistent with the United Nations Guiding Principles on Business and Human Rights, TITAN is committed to respecting and supporting human rights with regard to its employees, the communities where it operates and its business partners. Human rights is one of the key subject areas of the TITAN Group Compliance Program, which provides a well-structured framework to address relevant activities in a disciplined and holistic way across the Group. To intensify our efforts to ensure compliance not only with regulatory but also with ESG requirements, and to ensure a responsible supply chain, a comprehensive Third-Party Due Diligence system, supported by an online tool, was developed in 2021 and is ready to be put into operation. Our Whistleblowing Policy, introduced in 2020, encourages employees to report possible misconduct, fraud or abuse. In parallel, EthicsPoint, the Group reporting platform launched in 2020, provides a uniform, anonymous and strictly conﬁdential channel, through a globally available digital tool, to facilitate the conﬁdential reporting of any concern and ensure that incidents are reported, examined and resolved with a remedy plan, if and when necessary, thus fostering a culture of integrity and ethical conduct. 11 Cases reported through EthicsPoint 8,974 Compliance training hours INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 40 Risk management TITAN is active in a diverse geographical, business, and operational landscape. This results in a multitude of potential risk exposures, including strategic, ﬁnancial, sustainability (ESG) and operational risks. Risks are categorized using established risk taxonomies relevant to the Group’s business and are assessed in terms of probability, impact, and preparedness, in line with industry best practices. TITAN’s risk management framework is presented below. Risk Management Centrally-led Hybrid BU-led Risks Covered Strategic, e.g.: • Climate change mitigation and adaptation • Industry cyclicality • Market conditions • Political and economic uncertainty • Global disruptions (e.g. COVID-19) Financial - in particular: • Foreign currency risks • Interest rate risks • Liquidity and leverage risks • Counterparty risks ESG risks: • Health and safety • Risks related to the environment • Human Resources, Diversity and Inclusion • Regulatory compliance risk Operational Risks: • Production cost • Natural disasters (e.g. due to climate change) • Cybersecurity Risks • Supply Chain Disruption Most Operational/ ESG risks that occur at the level of individual businesses Risk Management Approach • Executive Committee • Capex Committee • Group Finance • Other Group functions (e.g. Procurement, R&I, IT, HR, ESG) • Business Units (BU) • Higher central oversight vs. BU-led risks • BU management as part of day-to-day operations • Embedded into business processes In 2021 a speciﬁc scenario-modelling assessment of the Group’s climate-related risks and opportunities took place implementing the TCFD framework as one can see on page 41. The exercise covered physical risks like extreme temperatures, ﬂooding and water stress, as well as transition risks, like carbon pricing, reputational risks and litigation. Internal Audit, Risk and Compliance Unit and Audit and Risk Committee The list of the Group's main risks and the respective probability vs. impact heat map is presented below: UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS SR1 Climate Change & GHGE SR2 Industry Cyclicality SR3 Local Market Conditions and Prospects SR4 Geopolitical Risk SR5 Global Systemic Disruption SR6 Acquisitions/ Investments/ Divestments SR7 Key (top level) Management OR1 Energy Costs OR2 Cybersecurity OR3 Extreme Natural Events OR4 Supply Chain Disruption OR5 Product Quality/ Product Failure OR6 Litigation ESG1 Health and Safety ESG2 License to Operate/ Access to Key Materials ESG3 Risk Related to the Environment ESG4 Human Resources, Diversity & Inclusion ESG5 Corruption/Fraud ESG6 Regulatory and Compliance Risk ESG7 Governance, Transparency & Ethics FR1 Foreign Currency Risk FR2 Goodwill Impairment Risk FR3 Taxation Risk FR4 Customer Credit Risk FR5 Liquidity Risk FR6 Interest Rate Risk FR7 Counterparty Risk 0 1 2 3 4 5 SR1 SR5 SR7 FR6 FR5 SR2 Probability Impact Strategic Financial ESG Operational FR7 ESG7 ESG5 ESG6 OR6 OR4 OR5 SR6 ESG4 FR4 ESG3 OR3 ESG2 OR1 FR3 OR2 ESG1 FR2 SR4 SR3 FR1 012345 41 Climate-related ﬁnancial disclosures (TCFD) Engaging with climate change risk experts and based on the different Intergovernmental Panel on Climate Change (IPCC) scenarios, TITAN Group in 2021 assessed the physical and transitional risks stemming from climate change, as well as the opportunities from the transition to a low-carbon economy, according to TCFD recommendations. The table below provides all necessary links with the TITAN Integrated Annual Report and our 2021 submission to the CDP. More information on the methodology used and the risks and opportunities can be found on page 95-96 of the Report (ESG Performance Review). Governance Strategy Risk management Metrics and targets Board’s oversight of climate-related risks and opportunities IAR 2021, p.36-38, 40, 95-96 CDP C1. Governance Climate-related risks and opportunities identiﬁed IAR 2021, p.12, 73-78 CDP C2. Risks and opportunities Processes for identifying and assessing climate-related risks IAR 2021, p.40, 73-78, 95-96 CDP C1. Governance C2. Risks and opportunities Metrics used IAR 2021, p.30, 40, 73-78, 82-84, 95-96, 103-105, 120 CDP C1. Governance C4. Targets and performance C9. Additional metrics C11. Carbon pricing Management’s role IAR 2021, p.36-38, 40, 95-96 CDP C1. Governance Impact on the organization’s businesses, strategy, and ﬁnancial planning IAR 2021, p.12, 73-78 CDP C2. Risks and opportunities C3. Business Strategy C4. Targets and performance C9. Additional metrics C12. Engagement Processes for managing climate-related risks IAR 2021, p.40, 73-78, 95-96 CDP C1. Governance C2. Risks and opportunities C3. Business Strategy C9. Additional metrics C11. Carbon pricing C12. Engagement Scope 1, 2 and 3 GHG and the related risks IAR 2021, p.82-84, 103-105, 120 CDP C6. Emissions data C7.Emissions breakdown C8. Energy C9. Additional metrics Resilience of the organization’s strategy, for different scenarios IAR 2021, p.12, 73-78 CDP C2. Risks and opportunities Integration into overall risk management IAR 2021, p.40, 73-78, 95-96 CDP C1. Governance C2. Risks and opportunities Targets and performance against targets IAR 2021, p.30 CDP C1. Governance C4. Targets and performance Please visit https://www.cdp.net for TITAN’s response to the CDP Climate change questionnaire The cement sector will play a dual role in the transition to carbon neutrality: it will provide infrastructure that is resilient to a changing climate and extreme weather events, and it will reduce its own carbon footprint to help limit climate change. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2021 performance highlights REGIONAL PERFORMANCE A record year of growth despite global cost headwinds. Favorable macroeconomic indicators support construction activity; substantial investments under way to capture the anticipated market upside. Scope 1 net CO₂ emissions (kg/t cementitious product): 643.6 (2020: 700.2) LTIFR (employees): 0.38 (2020: 0.39) %sales of Type IL: 50 Alternative fuel substitution rate (%heat basis): 8.8 (2020: 5.8) Revenue €983.6m (2020: €939.7m) EBITDA €158.0m (2020: €176.4m) Assets €1,133.3m (2020: €1,104.9m) 2 2 Integrated cement plants 2,278 8 Quarries 3 Import terminals 82 Ready- mix plants 7 Concrete block plants 4 Fly ash processing plants Operational Units Employees USA Market overview The US economy rebounded strongly in 2021, following the historic slowdown attributed to the COVID-19 pandemic. Real GDP increased by 5.7% following a decrease of 3.4% in 2020 and unemployment declined to 3.9%, showcasing an impressive economic recovery. Inﬂation reached 7%, a level not seen since the 1980s, reﬂecting the buoyancy of the economy. Bolstered by historically low interest rates, construction spending increased by 8.2% to $1.59 trillion. Residential spending increased by 22.9% mainly driven by strong single- family housing. Public construction spending contracted by 4.1% and private non-residential construction decreased by 2.1%, principally due to the decline in the travel and office construction segments. In total for 2021, cement consumption in the US increased by 4.1% reaching 109 million tonnes. Regional performance 2021 was a year of solid growth for Titan America. Consumption in our markets grew considerably above the US average, as our customers saw their activities expanding and their backlogs increasing. 2021 also marked an industry milestone as US lawmakers approved the $1.2 trillion Infrastructure Investment and Jobs Act. The Act includes $550 billion in additional new spending that equates to an estimated increase of 50 million tonnes of cement consumption over a ﬁve-year period (PCA estimates). Considering the strength of the US market and its positive outlook, the Group initiated an ambitious investment program, aimed at expanding the effective supply capacity of its operations and at achieving efficiencies in logistics UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS Roanoke cement plant, USA 43 TITAN aims to produce carbon-neutral concrete by 2050, in line with the goals of the Paris Climate accord. In an important step towards achieving this goal, TITAN USA has pioneered the adoption of Portland-limestone cement (PLC), which offers customers lower CO₂ emissions of up to 15% with equivalent performance. Low-carbon cements, such as PLC (ASTM Type IL), are essential for sustainable development and were ﬁrst introduced by TITAN USA in 2015. Since September 2021, approximately half of Titan America’s cement output consists of the lower-carbon Type IL cement, making Pennsuco the largest producer of it in the USA. Our PLC was the ﬁrst such cement to be approved by Florida Department of Transportation (FDOT) in 2017. We also worked closely with customers and speciﬁers to update commercial construction speciﬁcations and support successful conversions of our products to PLC. Leading in low-carbon cement manufacturing SDGs related to regional material issues: and production, in order to capture growth. In 2021 cement, ready-mix, concrete blocks and ﬂy ash sales increased, while aggregates sales were maintained at high levels. Revenue for TITAN’s US operations increased compared to 2020 reaching $1.2 billion, an increase of 8.6% year on year. In euro terms, revenue increased by 4.7% to €983.6 million. EBITDA reached €158.0 million, a decline of 10.5% compared to 2020 (-6.8% in US $ terms) as operational proﬁtability was constrained by global cost headwinds and supply chain disruptions which reﬂected negatively on import freight, energy, logistics and labor costs. Florida Florida continues to develop as a business and ﬁnancial center and also to beneﬁt from the positive migration trends of recent years, which are leading to increased housing demand and attendant non-residential construction. Overall, 2021 cement consumption in Florida grew by 12.2% to 9.1 million tonnes. Virginia, and the Carolinas Cement consumption in Virginia increased by 2.9% to 2.2 million tonnes, while consumption in North Carolina increased by 7.3% to 3.2 million tonnes. Business performance was driven by increased volumes, boosted by strong residential demand and cement-intensive public works projects. New York/Metro In the New York Metropolitan area, cement consumption increased by 4.6% to 1.9 million tonnes and in New Jersey by 7.4% to 1.5 million tonnes. Our import terminal, which serves both aforementioned markets, expanded its sales but higher import costs negatively affected its proﬁtability. ESG Performance In 2021, protecting the health and wellbeing of our people and communities from COVID-19 remained a key priority. We continued to provide emergency sick and quarantine pay, which we established in 2020, and to implement COVID-related safe- working protocols. We provided onsite vaccination clinics for families and contractors, and established new mental health and wellbeing programs. Lost time and recordable health and safety incidents remained at historical lows. Despite the pandemic and the tight labor market, we were able to continue to hire, onboard and train employees in preparation for our next phase of growth. We accelerated progress towards our carbon footprint goals. Our new processed engineered fuel facility at Pennsuco enabled the substitution of coal and natural gas usage in our kiln by 30% with alternative fuels. The plant is now also the largest producer of Portland-limestone cement (PLC) which meets ASTM C595 Type IL speciﬁcations, in the USA. Pennsuco and Roanoke, the only US cement plants certiﬁed to ISO 50001, enjoy at least 15 years of energy-management excellence under the EnergyStar program. The Portland Cement Association (PCA) and the US Green Building Council recognized the two sites in their annual environmental performance awards for excellence in sustainability and community engagement. Last but not least, the Roanoke team strengthened community partnership during the pandemic by creatively using drone technology to deliver plant tours. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Pennsuco cement plant, USA REGIONAL PERFORMANCE Greece and Western Europe 2019 Performance highlights Marked performance improvement despite the signiﬁcant rise in energy costs. Market overview Demand continued to grow at a strong rate, similar to the one recorded in 2020, leading cement consumption in 2021 close to the 3 million tonnes mark. The main drivers of demand were the increased levels of activity in public and municipal infrastructure projects, as well as growth in residential construction and broader real estate and logistics projects. Tourism activity also picked up, following the slowdown caused by the pandemic. The positive trend in residential construction and tourism is set to continue, as indicated by the consistent increase in building permits, while large-scale infrastructure projects across Greece are now underway. Cement exports remained strong, with the US representing Greece’s biggest export destination. Regional performance 2021 was a year of solid sales performance, with higher export and domestic cement volumes. At the same time proﬁtability was impacted by an unexpected steep rise in energy, raw materials, and transportation costs in the second half of the year which have affected the industry at a national and international level. Energy costs were partly mitigated by the notable increase in alternative fuel utilization and by further operational efficiencies that resulted from an increased number of digitalization projects, such as the Cement Mill Optimization projects carried out in our plants. Overall export volumes remained strong with the US being the leading destination. The Group’s import terminals in the UK, Italy and France performed in line with the trends of their respective local markets. As such, high cement export volumes also resulted in high capacity utilization rates of the plants. Total revenue for Greece and Western Europe in 2021 increased by 9.4% to €267.6 million while EBITDA increased by €7.4 million to €23.6 million. 2021 performance highlights Employees 1,208 Revenue €267.6m (2020: €244.6m) EBITDA €23.6m (2020: €16.2m) Assets €549.4m (2020: €551.5m) Alternative fuel substitution rate (%heat basis): 28.6 (2020:27.0) LTIFR (employees): 0.00 (2020: 0.49) Active quarry sites with biodiversity management plans: 6 (2020: 5) Share of women in new hires (%): 29.8 (2020: 20.3) 3 Integrated cement plants 25 Quarries 1 Cement grinding plant 2 Processed engineered fuel facilities 3 Import terminals 28 Ready- mix plants 1 Dry mortar plant Operational Units UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS Patras cement plant, Greece 45 ESG Performance We maintained our strong performance in Health and Safety despite the limitations caused by the pandemic. Leading indicators, including training hours for employees and contractors remained on target and we piloted a new e-learning program in our plant in Patras. We continued to reduce our carbon footprint, by further increasing the use of alternative fuels and reducing our clinker-to-cement ratio, through the launch of new types of cement – CEM II/B-M 42.5 and Type IL (ASTM) for our domestic and international markets. We also piloted two new decarbonization initiatives: the introduction of hydrogen as a fuel enhancer in the main burner of the kiln and the use of calcined clays in low-carbon cement production. Moreover, we issued third-party veriﬁed Environmental Product Declarations (EPDs) for all cement and key concrete products, to mark our product and process excellence, disclosing the information customers need for sustainable construction. All our integrated cement plants in Greece received platinum-level zero waste-to-landﬁll certiﬁcations for diverting practically 100% of waste from landﬁlls. Our sustainability initiatives in 2021 focused on creating value for communities through partnerships with the Hellenic Society for the Protection of Nature, Young Men's Christian Association Thessaloniki and Youthnest. The previous year was also rich in actions for our employees, with an emphasis on promoting well-being, fostering open communication and accelerating talent development. Last but not least, following the devastating summer wildﬁres across Greece, TITAN and the Paul and Alexandra Canellopoulos Foundation jointly donated a total of €1 million for long-term rehabilitation and prevention efforts. In 2021, TITAN’s cement plant in Thessaloniki participated in the multi-stakeholder circular economy program “Nothing to Waste” to promote sustainable solutions for the local community and the environment, in collaboration with other companies. At the core of the project, which was initiated by TITAN and its employees, are 24 companies and more than 500 employees. The initiative was designed and implemented with the scientiﬁc support of the non-proﬁt organization “NoWaste21”. It promotes efficient waste management while taking into account the speciﬁcs of each type of business activity. Recycling corners were created in each of the 24 businesses to collect and sort six types of recyclable materials, namely paper, PET plastic bottles, residual plastic-metal-composite packaging (PMD), electrical appliances, portable batteries, and cooking oil. A training program for the employees and their families was carried out on topics such as waste prevention, circular economy as a new model of individual responsibility towards the environment, and the preservation of natural resources for future generations. Some 16 metric tonnes of recyclable materials were collected. This signiﬁcant result highlights the role that all businesses, irrespective of size, can play in promoting circular economy and the leadership that companies such as TITAN, can and must show in bringing together peers, authorities and communities for the beneﬁt of the environment. “Nothing to Waste”: A recycling business initiative for the community SDGs related to regional material issues: INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP REGIONAL PERFORMANCE Southeastern Europe Construction activity and attendant cement demand continued to grow; surge in energy costs in the second half softened proﬁtability performance. Regional performance In this growing regional market, revenue increased to €290.6 million, driven by higher domestic market volumes and improved pricing. Price increases were not sufficient to offset the increase in electricity and fuel costs, which surged especially in the second half of the year. As a result, in spite of productivity gains, EBITDA declined by 14.8% versus 2020, reaching €81.9 million, still above however the proﬁtability of 2019. In the last quarter, price increases were announced, in anticipation of further input cost hikes in the coming months. In the second year of the pandemic, our plants were fully operational, whilst our focus remained on protecting the health and well-being of our employees. We continued investing in expanding the efficiency of our plants, with two of them reaching more than 10-year production records. Albania The Albanian economy grew by ca. 7%, following a year of contraction. Private construction activity continued being robust, while heightened building activity in the run-up to elections held in the ﬁrst half of the year boosted cement demand by an estimated 12% compared to 2020. Bulgaria In spite of a ca. 3% growth in Bulgaria’s GDP, the construction market slowed down, as a result of the political uncertainty generated by repeated elections. Cement demand recorded only a marginal increase of approximately 1%. Group volumes decreased, squeezed by the increase in the ﬂow of imports into the country. Alternative fuel utilization reached new records, supporting both the company’s decarbonization efforts and helping mitigate energy costs. 2021 performance highlights Employees 1,130 Revenue €290.6m (2020: €271.0m) EBITDA €81.9m (2020: €96.2m) Assets €467.1m (2020: €456.9m) Scope 1 speciﬁc net CO₂ emissions (kg/t cementitious product): 633.1 (2020: 641.6) LTIFR (employees): 2.43 (2020: 1.48) Share of women in new hires (%): 33.8 (2020: 29.5) Number of community engagement initiatives: 77 (2020: 65) Alternative fuel substitution rate (8.0% heat basis): 8.0 (2020:6.7) 5 Integrated cement plants 20 Quarries 1 Processed engineered fuel facility 6 Ready- mix plants Operational Units UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS Antea cement plant, Albania 47 Kosovo The construction sector in Kosovo, driven by the residential and commercial segments, grew by an estimated 4% on the back of a GDP growth of ca. 7%. TITAN supplied the market from its local plant as well as through its nearby cement plant network in North Macedonia and Albania, having set up the supply chain to effectively serve the market in line with the evolution of demand. North Macedonia GDP in North Macedonia grew by ca. 4% in 2021 with the construction market following at pace and recording a growth of ca. 3%, driven by all market segments. Demand for apartments and an increase in construction permits after the lifting of a moratorium in Skopje, were pertinent growth drivers. Thanks to an investment in a new shredding line at ΤΙΤΑΝ’s plant, the use of locally sourced alternative fuels was increased. Serbia The Serbian economy grew by 6% in 2021. Continuing public infrastructure spending, but mainly a strong activity in residential and commercial building, fueled cement demand, which grew by ca. 14%. In neighbouring Montenegro, the main export market of our Serbian subsidiary Kosjeric, the cement market declined despite strong economic growth. The expected start of new infrastructure projects has not yet materialized. During a major kiln overhaul, we invested in the installation of a new main ﬁlter for the plant, further reducing dust emissions. ESG Performance All ﬁve plants in the region continued to apply preventative measures to stem the spread of COVID-19 among their people, partners and local communities and to offer youth training, outreach, mental health support and wellbeing programs. TITAN Bulgaria’s efforts were recognized as best in class by the Centre for Safety and Health at Work Foundation, while TITAN Serbia continued its support to local public health institutions. In Kosovo, we provided employment opportunities to young people and training towards employability by joining forces with private sector companies and local authorities. The Kosovo CSR Network acknowledged TITAN’s contribution to society with the Annual CSR Award. Health and Safety remained a priority, with TITAN Bulgaria digitizing safety procedures and devising a new safety program that streamlines all safety-critical procedures for the region. The plants also continued to take important steps towards decarbonization. TITAN Bulgaria managed to replace 44% of the conventional fossil fuels in the clinker production process with alternative fuels, thus cutting CO₂ emissions by 25kg CO₂/t cementitious product. The installation of a modern bag ﬁlter on the rotary kiln in Serbia, an investment of almost €2 million, has signiﬁcantly reduced dust emissions, contributing to the overall strong environmental performance of the plant. Zlatna Panega plant and its quarries are located in an area of high biodiversity value. In 2021, we implemented two projects, in cooperation with Bulgarian experts, in order to map out a science- based path for the rehabilitation of the ecosystems in the quarry. We conducted a Net Impact Assessment (NIA) based on the GCCA Guidelines for Quarry Rehabilitation and Biodiversity Management. This will allow us to amend, improve or come up with additional respective biodiversity rehabilitation measures in the area, such as increasing afforestation areas, diversifying the hornbeam with other species characteristic for the area, but also adding hairy oak plantations, supporting thus some threatened and vulnerable species developing on the periphery of such forests. We also carried out an ecosystem services assessment, which follows the Toolkit for Ecosystem Service Site-based Assessment (TESSA), developed by Birdlife International in partnership with the University of Cambridge and Anglia Ruskin University. This assessment will help us to better evaluate the possible future uses of the rehabilitated area. As part of the TESSA study, we conducted two public consultations with the local community and other important stakeholders. Connecting biodiversity management with social needs SDGs related to regional material issues: INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP REGIONAL PERFORMANCE Eastern Mediterranean Return to positive performance in an environment of continued demand growth, despite local macroeconomic uncertainties. Market overview Egypt's economy has been resilient in the face of the COVID-19 pandemic, recording GDP growth of 3.3% in 2021, following growth of 3.6% in 2020. Cement demand started to recover after four years, as a result of stronger construction activity coming from national infrastructure projects and the construction of affordable housing. Cement consumption reached 48.5 million tonnes posting a 6% increase. In Turkey, despite the volatile economic environment witnessed through a sharp depreciation of the local currency of 65% vs the euro, soaring inﬂation of 36% and a reduction in households’ real income, the economy grew by 9% in 2021, thanks to the continuous credit expansion following a series of rate cuts by the Central bank. Domestic cement demand strengthened by 7%, reaching 60 million tonnes, still approximately 15% below the peak levels of 2017. Regional performance Following a few years of weak performance and despite the macroeconomic uncertainties, the Eastern Mediterranean region recorded total revenue of €172.8 million, an increase of 13.9% from 2020. EBITDA was €11.8 million versus a €3.3 million loss in 2020, reﬂecting a signiﬁcant improvement in the EBITDA margin, despite the sharp depreciation of the Turkish Lira. Egypt The market regulation agreement set by the Egyptian government on all cement producers in July 2021 narrowed the gap between supply and demand, leading prices to much healthier levels. Moreover, to assist the real estate industry, the government initiated a new construction-mapping layout deﬁning permitted 2021 performance highlights Employees 742 Revenue €172.8m (2020: €151.7m) EBITDA €11.8m (2020: €-3.3m) Assets €447.2m (2020: €484.8m) Alternative fuel substitution rate (%heat basis): 13.1 (2020: 10.8) LTIFR (employees): 2.17 (2020: 0.00) Employees from local community (%): 88.9 (2020: 88.9) Local spend(%): 85.1 (2020: 85.9) Integrated cement plants with certiﬁed Energy Management Systems (ISO 50001 or equivalent) (%): 100 (2020: 37) 3 3 Integrated cement plants 1 Cement grinding plant 7 Ready-mix plants 2 Processed engineered fuel facilities 13 Quarries Operational Units UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS Tokat cement plant, Turkey 49 and restricted areas for building, issued new construction licensing procedures and directed the central bank of Egypt to facilitate mortgage procedures and conditions. TITAN achieved 7% volume growth year on year and an increase in revenue, mainly driven by price increases and expansion in new cement products. Many decarbonization initiatives took place, leading to a reduction of CO₂ emissions by 6% in Alexandria and 2% in Beni Suef. The Company focused on operational excellence and digitization projects, while also exploring new growth opportunities, mainly in export markets. Turkey The performance of our Turkish operations in 2021 reﬂected the upward trend of the cement industry. Continued demand for private housing, public infrastructure projects as well as exports were for another year the backbones of growth for our local operations. Production costs increased mainly due to higher electricity and fuel prices -both affected by the depreciation of the Turkish Lira by 65%- however they were offset by signiﬁcant price increases and by growth in both domestic and export volumes. Our local modern assets and the healthy balance sheet, allowed us to withstand macroeconomic headwinds and to satisfy the increasing market demand. ESG performance Despite a challenging year in both plants due to COVID-19 and its ﬁnancial ramiﬁcations, TITAN Egypt and TITAN Turkey took a number of steps to improve their ESG performance. TITAN Egypt secured ISO 50001 certiﬁcation in energy management, thus building on its achievements in reducing its carbon footprint. Likewise, TITAN Turkey stepped up its usage of alternative fuels and reduced the clinker content of its cement, launching CEM II/A-LL 42.5R in the market. In Egypt, we maintained our academic- industrial collaboration with Alexandria and Beni Suef universities, preparing about 150 undergraduates for the labor market, while in Turkey, our people attended over 100 different training programs in ﬁelds such as soft skills, leadership, digitalization and project management. In the area of COVID-19, in Egypt we implemented awareness raising and vaccination campaigns for our people and our contractors while taking all precautionary measures. In Turkey, we achieved another Health and Safety milestone by successfully completing the transition to ISO 45001. Community outreach also continued, though Adocim’s Employee Assistance program and online wellbeing seminars for employees and their families, as well as through TITAN Egypt’s programs, conducted in partnership with NGOs, to improve the living and health conditions of our local communities. In order to attract young talented candidates to the company and offer internships in Tokat, in 2021 TITAN Turkey signed a protocol with Tokat Gaziosmanpaşa University (TOGÜ). Under the protocol, we committed ourselves to provide internship and employment opportunities (both full- and part-time) to TOGÜ students and graduates. The two-day TOGÜ career fair 2021 allowed members of our technical staff to speak directly to students, to answer their questions and invite them to submit job and internship applications. The career fair was a very fruitful experience as we were able to contribute to informing TOGÜ students about their job prospects, creating career awareness and providing them with information about companies, institutions and professions. Finding and recruiting talent SDGs related to regional material issues: INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 50 STET ST Equipment & Technology LLC (STET), a wholly owned subsidiary of the TITAN Group based in Needham, MA, USA, is a designer, manufacturer and marketer of proprietary separation equipment. The patented STET technology is suited for the processing of dry powders and recycling of waste streams in an innovative, environmentally sustainable and cost-effective manner, contributing to the circular economy and climate change mitigation. The applications for the STET processing technology include the recycling of coal combustion ﬂy ash, water-free processing of minerals, and upgrading of plant derived proteins for animal feed and human food applications. In 2021, STET commissioned the world’s ﬁrst industrial-scale plant to reclaim, dry and electrostatically separate landﬁlled ﬂy ash which is then used to reduce the carbon footprint of cement and concrete products. Through this innovative process, an unusable waste material is converted into high-quality, green end-products used in the cement, concrete and power generation industries. Resulting beneﬁts include a lower carbon footprint and a solution for the cleanup and remediation of ﬂy ash landﬁlls and ponds. The STET water-free beneﬁciation process offers sustainability beneﬁts to industries other than cement. In 2021, STET successfully manufactured a high-protein Dry Distillers Grain with Solubles (DDGS), a plant-based protein source generated from the corn ethanol industry that offers a sustainable source of protein for aquaculture rations. GAEA Green Alternative Energy Assets (GAEA) is a company that provides services in waste utilization and alternative fuels production. Established in 2011 in Bulgaria, GAEA has been recognized as a reliable solutions provider in the Bulgarian waste market. During its ten years of operation in Bulgaria, GAEA has provided solutions to a wide range of manufacturing and recycling industries in the country, actively contributing to the circular economy. In 2021, GAEA upgraded its operations by investing in new, state-of-the- art mechanical treatment equipment, enabling the Zlatna Panega Cement plant to substantially increase its alternative fuels’ thermal substitution rate to a new all-time record. GAEA has also expanded its operations in Egypt since 2016, providing solutions for municipal solid waste to the municipalities of Alexandria and Beni Suef and producing refuse-derived fuel (RDF) to supply the Group’s cement plants, thus reducing the Group’s carbon footprint. Other business activities REGIONAL PERFORMANCE Joint venture in Brazil Overview In Brazil, the improved economic environment led to stronger construction activity and cement demand grew for a third consecutive year. In the second half of 2021 however, the market witnessed a slight slowdown as inﬂationary pressures started to mount and interest rates increased. Regional performance Our joint venture Apodi increased its sales volumes at a higher rate than the national average by continuing to penetrate the bulk cement segment, with a focus on the pre-cast industry, the growing regional wind park sector and projects in the renovation and expansion of infrastructure such as the Fortaleza airport. As a result, Apodi posted a signiﬁcant increase in revenue to €83.8 million vs €70.7 million in 2020, while net proﬁt attributable to TITAN Group reached €2.7 million compared to €2.6 million in 2020, posting a 4.6% increase. ESG performance Our joint venture in Brazil continued to integrate ESG practices, according to its material issues and the Sustainable Development Goals and it published its second Sustainability report in 2021. Cimento Apodi’s main sustainability and community outreach projects continued in 2021, despite the challenges posed by the pandemic. The promotion of the use of the native carnauba palm tree as biomass in co-processing contributed to the creation of new forms of employment and income for the local communities around our plants while our participation in the Construir Saber Project of the Social Service of Industry (SESI) continued to equip young people and adults with higher levels of education. Furthermore, we kept doing voluntary work in the community, supporting handcrafts, donating food parcels, providing PPE to hospitals while also raising awareness on the need for environmental conservation and other topics. UNDERSTANDING TITAN PERFORMANCE HIGHLIGHTS Demand growth for a third consecutive year. 51 Outlook 2022 The current military conﬂict after the Russian invasion in the Ukraine creates geopolitical uncertainties with macroeconomic implications the extent of which cannot yet be assessed. TITAN Group has no exposure to Ukraine, Russia or affected regions. Nevertheless the effect on the Group’s businesses from developments in the energy sector and the broader macro implications are anticipated to impact market trends and further increase inﬂation risks. In the US, despite macroeconomic risks, the underlying construction market dynamics remain strong. Residential activity continues to reﬂect the country’s housing deﬁcit with both the multi- and single-family segments driving demand. The infrastructure segment is poised to provide a steady backbone to demand from 2023 onwards, as the full effect of America’s large infrastructure investment drive starts to materialize on the ground. Cost pressures are expected to persist and the Group will continue to address global cost headwinds by adjusting pricing, as evidenced already by the successful price increase implemented in January in both Florida and mid-Atlantic and by the recently announced second round of price increases in Florida. At the same time, TITAN initiated an investment program to signiﬁcantly grow its effective capacity. This centers around the transformation and expansion of the import terminals in Tampa, Florida and in Norfolk, Virginia, including the $60 million construction of two new storage domes. Several other investments and initiatives are in progress aiming to achieve logistics and production efficiencies, which will effectively allow the Group to capture the market’s upside for several years ahead and to improve ﬂexibility and customer service. Concurrently, TITAN America is building on its head start with the full adoption of lower carbon footprint cements across its operations. The impact of the ongoing war in the Ukraine may lead to more uncertainties in Europe overall. There is a negative impact already on the energy sector, the severity of which, as well as the duration, cannot yet be assessed. The European economies are entering a difficult phase, with increased risks of rising inﬂation and a slowdown of economic growth. In Greece, demand growth in the residential segment looks set to continue from a low base, with the larger urban centers which our plants primarily serve, holding the lion’s share of growth. The infrastructure pipeline is ripe with projects scaling up and offering a backlog timeline for the years ahead. The Group is continuing its efforts on all fronts to manage its cost base and minimize its carbon footprint. Alternative fuel utilization is constantly increased, supported by investments in both the Kamari and Thessaloniki plants. The Group is continuing with the roll-out of more environmentally friendly cement products with lower clinker content. Southeastern Europe should continue delivering satisfactory returns, driven primarily by residential and light commercial development, as well as select infrastructure projects, depending on the country. Cost challenges will persist but the Group continues its efforts unabated to address inﬂationary pressures and mitigate their impact on operational proﬁtability. Alternative fuel utilization is increasing, as is the promotion of new products with lower carbon emissions throughout our regional presence. In Egypt the economy is growing driven by large infrastructure projects and the country’s increased LNG exports. Trends of cement demand are positive going forward and the new balance between supply and demand favors a healthier pricing environment. The Group is well-placed to beneﬁt from market dynamics and alternative fuel utilization has been increasing, aiming to both address costs as well as ameliorate the Group’s carbon footprint. The situation remains challenging in Turkey, exacerbated by the geopolitical turbulence on the Black Sea. The outlook for the construction sector is highly dependent on the fortunes of the economy which remains under stress. Successful price increases manage to address the inﬂationary pressures while increased export volumes provide an outlet for the Group. In Brazil, while high commodity prices and the country’s trade surplus should support the economy, global inﬂationary pressures, in an election year, make for a very delicate macroeconomic setting. In 2022, we will continue to harness the advantages offered by decarbonization, digital transformation and business model innovation to beneﬁt our customers, employees, suppliers, and communities, aspiring to deliver to society carbon-neutral concrete by 2050. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 52 Pennsuco cement plant, USA 52 53535353 MANAGEMENT REPORT corporate governance and risk management Our approach to corporate governance and risk management. 54 1. Corporate Governance Code 1.1 Application of the Belgian Corporate Governance Code 2020 Titan Cement International S.A. (the Company) is a public limited liability company incorporated under Belgian law. Its shares are listed on the regulated markets of Euronext Brussels, Euronext Paris and the Athens Exchange. The Company is committed to the highest governance principles, seeking consistent enhancement of its corporate governance performance and promoting transparency, sustainability and long-term value creation. The Company applies the principles of the Belgian Corporate Governance Code 2020 (the 2020 CG Code or the Code), which is publicly available on the website: https://www. corporategovernancecommittee.be/en/over-de-code-2020/2020- belgian-code-corporate-governance. The Code is structured under ten principles, which are further detailed in several provisions-recommendations. The “comply or explain” principle states that all listed companies are expected to comply with all the provisions of the Code, unless they provide an adequate explanation for deviating from a provision. The Corporate Governance Charter (the CG Charter), which is available on the Company’s website (https://www.titan-cement. com/wp-content/uploads/2021/07/TCI-CG_Charter_22.7.2021. pdf), describes the main aspects of the Company’s governance structure, as well as the terms of reference of the Board of Directors and its Committees and the Dealing Code of the Company. 1.2 Deviations from the Code The Company complies with the provisions of the Code except with regard to the following deviations: a. Non-executive board members do not receive part of their remuneration in the form of shares in the Company. Therefore, the Company deviates from Provision 7.6 of the Code. This deviation is explained by the fact that the interests of the non- executive directors are currently considered to be sufficiently oriented to the creation of long-term value for the Company and, hence, that their partial payment in the form of shares is not deemed necessary. This is a new provision of the Code, which had not been taken into account when the remuneration of the non-executive directors had been decided. However, the Company intends to consider, after the completion of the current term in office of the non-executive Board members, the alignment of the Company with the Provision 7.6 of the Code. b. No provisions regarding the recovery of variable remuneration paid to executives or withholding the payment of variable remuneration of executives are included in the contracts with the Managing Director and other executives. Therefore, the Company deviates from Provision 7.12 of the Code. This deviation is explained by the fact that variable remuneration is paid only after the criteria set for such payment in advance, have been met. In case of early termination, the Company applies the Remuneration Policy, which was approved by the Annual General Meeting of Shareholders on 14 May 2020. 1.3 Governance Structure The Company has chosen the one-tier governance structure consisting of the Board of Directors, which is authorized to carry out all actions that are necessary or useful to achieve the Company’s purpose, except for those for which the General Meeting of Shareholders is authorized to carry out by law. At least once every ﬁve years, the Board shall review whether the chosen one-tier structure is still appropriate, and if not, it should propose a new governance structure to the General Meeting of Shareholders. 2. Capital, Shares and Shareholders 2.1 Capital On 31 December 2021, the share capital of the Company amounted to €1,159,347,807.86 and was represented by 78,325,475 shares, without nominal value, with voting rights, each representing an equal share of the capital. 2.2 Shareholder Structure The shareholder structure of the Company as of 31 December 2021, based on the transparency notiﬁcations made by its shareholders on 24 June 2021 is the following: • E.D.Y.V.E.M. Public Company Ltd, Andreas Canellopoulos, Leonidas Canellopoulos, Nellos-Panagiotis Canellopoulos, Pavlos Canellopoulos, Takis-Panagiotis Canellopoulos, Trust Neptune, Alexandra Papalexopoulou, Dimitri Papalexopoulos and Eleni Papalexopoulou, who act in concert, hold 29,004,392 shares corresponding to 37.03% of the Company’s voting rights; • FMR LLC – Fidelity Institutional Asset Management Trust Company – FIAM LLC and Fidelity Management & Research Company LLC hold 8,244,786 shares corresponding to 10.53% of the Company’s voting rights; • The Paul and Alexandra Canellopoulos foundation holds 7,900,039 shares corresponding to 10.09% of the Company’s voting rights. However, based on changes in shares that did not require a transparency declaration, due to the fact that the 5% threshold was not exceeded either upwards or downwards, the actual percentage held by shareholders on 31 December 2021 is the following: • E.D.Y.V.E.M. Public Company Ltd, Andreas Canellopoulos, Leonidas Canellopoulos, Nellos-Panagiotis Canellopoulos, Pavlos Canellopoulos, Takis-Panagiotis Canellopoulos, Trust Neptune, Alexandra Papalexopoulou, Dimitri Papalexopoulos, Eleni Papalexopoulou, Alpha Trust, Delta Trust and Lamda Trust, who act in concert, hold 30,641,972 shares corresponding to 39.12% of the Company’s voting rights; • The Paul and Alexandra Canellopoulos foundation holds 7,962,542 shares corresponding to 10.17% of the Company’s voting rights; Corporate governance statement MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 55 • FMR LLC – Fidelity Institutional Asset Management Trust Company – FIAM LLC and Fidelity Management & Research Company LLC hold 8,244,786 shares corresponding to 10.53% of the Company’s voting rights (based on the transparency declaration made on 24 June 2021); • Others: 40.18% The legal threshold applied by the Company requires a transparency declaration by shareholders at 5% and each subsequent multiple of 5%. The Company’s Shareholder Structure and the relevant transparency declarations are available on the Company’s website: https://ir.titan-cement.com/en/shareholder-center/ shareholder-structure. 2.3 Interactions with institutional and individual investors The Company regularly interacts with institutional investors. Roadshows are organized with the participation of executive Board members and investor relations representatives. The Company’s representatives attend investor conferences and pursue dialogue with the investment community on TITAN’s strategy, business performance and progress against ESG goals. In 2021, TITAN participated mainly remotely in investor conferences and roadshows in several countries across Europe. In addition, a few in-person meetings were held in autumn before the new upsurge in the pandemic. At the same time, shareholders have access to clear, comprehensive and transparent information through direct contact with the investor relations team, including corporate presentations and information available on the Investor Relations section of the Company's website. The Shareholder Services Department responds to all queries and requests for information and shareholder assistance. 3. Board of Directors 3.1 Resumes of Directors Efstratios-Georgios (Takis) Arapoglou Chairman – Non-executive Director – Chairman of the Nomination Committee Takis Arapoglou has had an earlier career in International Capital Markets and Corporate & Investment banking based in London and later in managing, restructuring and advising publicly listed Financial Institutions and Corporates, primarily in SE Europe and the Middle East. Most recent executive assignments include: Managing Director and Global Head of the Banks and Securities Industry for Citigroup; Chairman and CEO of the National Bank of Greece; CEO of Commercial Banking at EFG-Hermes Holding SAE. He is currently holding the following non-executive board positions: Chairman of Bank of Cyprus Group, Chairman of Tsakos Energy Navigation (TEN) Ltd and non-executive Board member of EFG-Hermes Holding SAE. He has degrees in Mathematics, Engineering and Management from Greek and British Universities. Kyriacos Riris Vice Chairman – Independent Director – Chairman of the Audit and Risk Committee Kyriakos Riris completed his high-school education in Cyprus, before continuing his higher education and professional qualiﬁcations at Birmingham Polytechnic. He completed his professional exams with the Association of Certiﬁed Chartered Accountants (ACCA) in the UK in 1975, becoming a Fellow of the Association of Certiﬁed Accountants in 1985. Since 1976, he has worked mostly in Greece. He was a member of the Executive Committee of PwC Greece and became a Partner in 1984. His responsibilities have included that of Managing Partner of the Audit and the Advisory/Consulting Departments respectively, and later Deputy Territory Senior Partner. In 2009, he was elected as Chairman of the Board of PwC Greece, retiring from that position in 2014. With a career spanning some 40 years, he has accumulated vast experience with both domestic and multinational entities in a variety of sectors and industries, including manufacturing, shipping, commerce, food and beverages, construction, pharmaceuticals, ﬁnancial services and information systems. Dimitri Papalexopoulos Chairman of the Group Executive Committee Dimitri Papalexopoulos started his career as a business consultant for McKinsey & Company Inc in New York and Munich. He joined TITAN in 1989 and in 1996 he assumed the position of Chief Executive Officer. Mr. Papalexopoulos is Vice-Chair of the European Round Table for Industry (ERT) and chairs the ERT’s Energy Transition and Climate Change Committee. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 56 In June 2020, he was elected Chairman of the Board of the Hellenic Federation of Enterprises (SEV). He is a member of the Board of the Foundation for Economic and Industrial Research (ΙΟΒΕ), the Hellenic Foundation for European and Foreign Policy (ELIAMEP) and of Endeavor Greece He holds an MSc in Electrical Engineering from the Swiss Federal Institute of Technology (ETHZ) and an MBA from Harvard Business School. Michael Colakides Managing Director – Group CFO Michael Colakides started his career at Citibank Greece, where over time he held the positions of Head of FIG and Head of Corporate Finance and Local Corporate Banking (1979–1993). In 1993, he was appointed Executive Vice Chairman at the National Bank of Greece responsible for the Corporate and Retail Banking business. In 1994, he joined TITAN Cement Company S.A. as Group CFO and was a member of the Board until 2000. He was also responsible for a number of cement company acquisitions in Southeast Europe, Egypt and the U.S.A. From 2000 to 2007, he served as Vice Chairman and Managing Director at Piraeus Bank S.A., overseeing the domestic Wholesale and Retail Banking business, as well as the group’s international network and activities. In 2007, he joined EFG Eurobank Ergasias S.A. as Deputy CEO - Group Risk Executive Officer (2007–2013), overseeing the risk management in Greece and abroad. In January 2014, he returned to TITAN Cement Group as Group CFO and executive member of the Board of Directors. In July 2019, he was also appointed to the position of Managing Director of Titan Cement International SA. As of November 2021, he is non-executive Chairman of Alpha Bank Cyprus. He holds a BSc in Economics from the London School of Economics and an MBA from the London Business School. William Antholis Independent Director – Member of the Remuneration Committee William Antholis is director and CEO of the Miller Center, a nonpartisan affiliate of the University of Virginia that specializes in presidential scholarship, public policy and political history. From 2004 to 2014, he was Managing Director of the Brookings Institution. He has also served in government, including at the White House National Security Council and National Economic Council, and at the US State Department’s policy planning staff and bureau of economic affairs. He has published two books, as well as dozens of articles, book chapters, and opinion pieces on US politics, US foreign policy, international organizations, the G8, climate change and trade. He earned his PhD from Yale University in Politics (1993) and his BA from the University of Virginia in Government and Foreign Affairs (1986). Andreas Artemis Independent Director – Member of the Nomination Committee Andreas Artemis is an executive member of the Board of Directors of Commercial General Insurance Group since 1985 and Chairman since 2002. He is also member of the Board of Directors of the Cyprus Employers and Industrialists Federation, as well as of the Council of the Cyprus Red Cross Society. He has served as member of the Board of Directors of the Bank of Cyprus Group (2000–2005), Vice Chairman (2005–2012) and Chairman (2012–2013). He has also served on the Board of Directors of the Cyprus Telecommunications Authority (1988– 1994) and as Honorary Consul General of South Africa in Cyprus (1996–2012). He studied Civil Engineering at the Queen Mary and Imperial College of the University of London and holds a BSc in Engineering and an MSc degree. Leonidas Canellopoulos Executive Director Leonidas Canellopoulos is the Chief Sustainability Officer of TITAN Group. He is also responsible for Group Corporate Affairs. Since 2012, he has covered various roles within the Group’s Finance and Strategic Planning functions and has served as Cement Operations Director of the Group’s Greek Region. Prior to that, he worked for Separation Technologies LLC. He is a member of the Board of Directors of the Foundation for Economic and Industrial Research (ΙΟΒΕ) and of Junior Achievement Greece. He holds a BA in Economics with Honors from Harvard University and an MBA from INSEAD, where he received the Henry Ford II Prize. Harry David Independent Director – Member of the Audit and Risk Committee Harry David earned his BS from Providence College and began his career as a certiﬁed investment advisor with Credit Suisse in New York. He then served in several executive positions within Leventis Group Companies in Nigeria, Greece and Ireland. Today he serves as the Chairman of Frigoglass S.A. and as member of the Board of A.G. Leventis (Nigeria) PLC, the Nigerian Bottling Company Ltd, Beta Glass (Nigeria) PLC, Frigoglass Industries (Nigeria) Ltd, Pikwik (Nigeria) Ltd (a joint venture with Pick n Pay, South Africa). He is a member of the TATE Modern’s Africa Acquisitions Committee. He has served on the Boards of Alpha Finance, Greece’s Public Power Corporation and Emporiki Bank (Crédit Agricole). MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 57 Lyn Grobler Independent Director – Member of the Nomination Committee Lyn Grobler is an experienced executive with a strong track- record in technology and IT roles. She was appointed Group Chief Information Officer (CIO) at Howden Group Holdings (formerly Hyperion Insurance Group) in 2016. Prior to this she was Vice President and CIO Corporate Functions at BP, where she led the transformation of both the organization and the digital landscape through introducing sustained change in process capability and technology, having held a variety of roles across IT and global trading over 16 years. She is also Vice Chairperson of Bank of Cyprus. Before BP, she managed large scale global technology projects and strategies within banking and trading based in both London and South Africa. She holds a Higher National Diploma in Computer Systems from Durban University in South Africa and a National Diploma in Electronic Data Processing from Cape Peninsula University (South Africa). Yanni Paniaras Executive Director Yanni Paniaras studied Civil Engineering at Imperial College (B.Sc., M.Sc.) and Business Administration at INSEAD (MBA). He started his career at Knight Piésold, an international mining and engineering consultancy headquartered in London. Between 1998 and 2015, he held senior management positions, in Greece and Germany, in S&B Industrial Minerals Group and – in 2015 – in its new parent company, IMERYS. He concluded his term there as Vice President of the former S&B Division and Managing Director of S&B Industrial Minerals S.A. In January 2016, he joined the management of TITAN Group, where he has led, since 2020, its European business, as well as Group Sustainability. From 2016 to 2021, he served as Chairman of SEV Business Council for Sustainable Development. Alexandra Papalexopoulou Executive Director Alexandra Papalexopoulou is the Deputy Chair of the Group Executive Committee, with direct oversight of Group Strategy and Business Development, Trading, Legal and the Group’s operations in the Eastern Mediterranean. Her career began as an analyst for the Organization for Economic Co-operation and Development (OECD) and later as an associate at the consulting ﬁrm Booz Allen Hamilton in Paris in the 1990s. Joining TITAN Group in 1992, she started out in trading, subsequently moving to business development before heading Strategic Planning. She is a non-executive director of Coca-Cola HBC, an FTSE 100 company, an independent, non-executive director of Aegean Group, a member of the Board and Treasurer of the Paul and Alexandra Canellopoulos Foundation and serves on the Board of Trustees of INSEAD Business School. She holds a BA in Economics from Swarthmore College, USA, and an MBA from INSEAD, France. Stelios Triantafyllides Independent Director – Member of the Remuneration Committee Stelios Triantafyllides has been working with and been a partner of Antis Triantafyllides & Sons LLC law ﬁrm since 1983. His practice focuses on international business transactions, banking and ﬁnance, capital markets, M&A and joint ventures, general corporate and commercial, corporate restructuring, tax, ﬁnancial services and securities regulation. He is the legal adviser to the Cyprus Securities and Exchange Commission. He regularly advises major international companies on corporate and banking matters. He is member of the Cyprus Bar Association (admitted in 1984) and a member of the Committee for Private Companies, of which he served as Chairman until 2021. He is also member of the Committee on the Cyprus Stock Exchange. From 2006 to 2012, he was a member of the Board of Directors of the Cyprus Investment Promotion Agency (CIPA). He studied at Worcester College, Oxford University (M.A. in Jurisprudence), and at the University of California, Berkeley (LLM). Dimitris Tsitsiragos Independent Director – Member of the Audit and Risk Committee Dimitris Tsitsiragos has over 30 years of extensive international experience in emerging markets ﬁnance across industries, sectors and products. He started his career in 1985 in New York as a corporate bond evaluator at Interactive Data Services Inc (former subsidiary of Chase Manhattan Corporation). In 1989, he joined the International Finance Corporation (IFC), a member of the World Bank Group, as an Analyst and retired in 2017 as Vice President, leading IFC’s global business operations and stakeholder relations with a global network of governments, ﬁnancial institutions and private-sector clients. He also chaired IFC’s Corporate Credit Committee. During his progressive career at the institution, he held the following positions: Vice President, Europe, Central Asia, Middle East and North Africa (EMENA) INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP ANTEA cement plant, Albania 58 (2011-2014) based in Istanbul; Director of Middle East, North Africa and Southern Europe (MENA) (2010-2011) based in Cairo; Director of Global Manufacturing and Services Department (2004-2010); Director of South Asia (2002-2004) based in New Delhi; Manager, New Investments, Central and Eastern Europe (2001-2002); Manager Oil and Gas (2000-2001) and held a number of investment positions in the same unit (1989-2001). Currently he is a Senior Advisor, Emerging Markets at the Paciﬁc Investment Management Company (PIMCO). He also sits on the Board of Alpha Bank (Greece) as an independent director. He holds an MBA from the George Washington University and a BA in Economics from the Rutgers University. He has also attended the World Bank Group Executive Development Program at Harvard Business School. Bill Zarkalis Executive Director Bill Zarkalis, in addition to his responsibilities as President and CEO of Titan America LLC and Chairman of Separation Technologies (STET) since 2014, has assumed the broader leadership role of Group Chief Operating Officer (COO) and oversight of joint venture Apodi in Brazil. He is a business executive with an international career, having led diverse global teams across all continents while located mostly in the USA and Switzerland. He dedicated 19 years to Dow Chemical Co., where he started in commercial posts, growing in experience through a fast succession of marketing and product management responsibilities, culminating into global business-unit leadership roles. Among others, he served as Vice President of Dow Automotive, M&A Leader for DuPont-Dow Elastomers, Global Business Director for Specialty Plastics and Elastomers and Global Business Director for Synthetic Latex. He joined TITAN in 2008 as Group Executive Director for Business Development and Strategic Planning. In 2010 he became the TITAN Group Chief Financial Officer, where he served until 2014 before moving into his current role leading Titan America. He holds a BSc in Chemical Engineering from the National Technical University of Athens and an MSc from the Pennsylvania State University. Mona Zulﬁcar Independent Director – Chairwoman of the Remuneration Committee Mona Zulﬁcar is one of the founding partners of Zulﬁcar & Partners Law Firm, a specialized law ﬁrm, which has become one of the best ranked law ﬁrms in Egypt since it was established in June 2009. She was previously senior partner at Shalakany Law Firm, serving as the Chair of its Executive Committee for many years. She is recognized in local and international legal circles as a precedent setter and one of Egypt’s most prominent corporate, banking and project ﬁnance attorneys. As an M&A and capital markets transactions specialist, she has led negotiations on some of Egypt’s and the Middle East’s largest and most complex successful transactions over the past three decades. She has also played an instrumental role in modernizing and reforming economic and banking laws and regulations as a former member of the Board of the Central Bank of Egypt and as a prominent member of national drafting committees. She is also a leading human rights activist, recognized locally and internationally and has initiated several successful campaigns for new legislation including women’s rights, freedom of opinion and family courts. She served as Vice President of the Constitutional Committee of 50 and played a key role in drafting the 2014 Egyptian Constitution, and has served as member of the National Council for Human Rights for several terms ending September 2021. She has served as Non-Executive Chairperson of EFG Hermes since 2008. In 2015, she was elected President of the Egyptian Microﬁnance Federation and has chaired several NGOs active in providing social development and microﬁnance to poor women. Internationally, she served as an elected member of the international Advisory Committee of the United Nations Human Rights Council for two terms, ending in 2011. She holds a BSc in Economics and Political Science from Cairo University and an LLM from Mansoura University, as well as an honorary PhD in law from the University of Zurich. 3.2 Role and competencies of the Board of Directors The CG Charter, which is available on the Company’s website (https://www.titan-cement.com/wp-content/uploads/2021/07/TCI- CG_Charter_22.7.2021.pdf), deﬁnes the terms of reference of the Board of Directors including its role, mission, composition, training and evaluation. 3.3 Structure of the Board of Directors As at 31 December 2021, the Board was composed of ﬁfteen (15) directors: • The majority of directors, namely nine (9) out of ﬁfteen (15), including the Chairman, are non-executive directors. • Eight (8) out of the ﬁfteen (15) directors, namely Kyriakos Riris, William Antholis, Andreas Artemis, Harry David, Lyn Grobler, Stelios Triantafyllides, Dimitris Tsitsiragos and Mona Zulﬁcar, met on their appointment the independence criteria of article 7:87 of the Belgian Code on Companies and Associations (the BCCA) and also those of Provision 3.5 of the Code. • Six (6) out of the ﬁfteen (15) directors, namely Dimitrios Papalexopoulos, Michael Colakides, Leonidas Canellopoulos, Yanni Paniaras, Alexandra Papalexopoulou and Bill Zarkalis, are executive directors. • Three (3) out of the ﬁfteen (15) directors are women. Τhe Company’s primary listing on Euronext Brussels took place on August 2019. Therefore, the Company is required to comply with the gender diversity rule of 1/3 provided in article 7:86 of the BCCA by 1 January 2025 at the latest. Nevertheless, the Company intends to comply with the above rule, earlier than provided by law; • The directors represent six (6) different nationalities (US, Egyptian, UK, Cypriot, Greek and South African); • The Board meeting attendance at the seven scheduled Board meetings was 99.05%. The non-executive board members held a meeting on 10 November 2021, in the absence of the Managing Director and the other executive directors, in which the attendance was 88.89% (8 out of 9). The individual attendance of each Board member is shown in the table included in Section 3.4 (“Functioning of the Board of Directors”) below. MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 59 Currently the Board consists of the following ﬁfteen (15) directors: Name Position Term started Term expires Efstratios-Georgios (Takis) Arapoglou Chairman, Non-Executive Director July 2019 May 2022 Kyriacos Riris Vice-Chairman, Independent Non-Executive Director October 2018* May 2022 Dimitri Papalexopoulos Executive Director July 2019 May 2022 Michael Colakides Managing Director July 2019 May 2022 William Antholis Independent Non-Executive Director July 2019 May 2022 Andreas Artemis Independent Non-Executive Director July 2019 May 2022 Leonidas Canellopoulos Executive Director July 2019 May 2022 Haralambos (Harry) David Independent Non-Executive Director July 2019 May 2022 Lyn Grobler Independent Non-Executive Director December 2021 May 2022 Ioannis (Yanni) Paniaras Executive Director May 2021 May 2022 Alexandra Papalexopoulou Executive Director July 2019 May 2022 Dimitrios Tsitsiragos Independent Non-Executive Director March 2020 May 2022 Stylianos (Stelios) Triantafyllides Independent Non-Executive Director October 2018* May 2022 Vassilios (Bill) Zarkalis Executive Director July 2019 May 2022 Mona Zulﬁcar Independent Non-Executive Director July 2019 May 2022 * Kyriacos Riris and Stelios Triantafyllides were reappointed as independent members of the Board of Directors by the Annual Shareholders' Meeting held on 13 May 2021 for a term of one year, namely until the Annual Shareholders' Meeting of 2022. Individual attendance of each Board member at the scheduled meetings of the Board and the Board Committees Director Board of Directors Meetings Non-executive Directors Meetings Audit and Risk Committee Meetings Remuneration Committee Meetings Nomination Committee Meetings Efstratios-Georgios (Takis) Arapoglou 7/7 1/1 - - 1/1 Kyriacos Riris 7/7 1/1 6/6 - - Dimitri Papalexopoulos 7/7 - - - - Michael Colakides 7/7 - - - - William Antholis 7/7 1/1 - 2/2 - Andreas Artemis 7/7 1/1 - - 1/1 Leonidas Canellopoulos 7/7 - - - - Harry David 7/7 1/1 6/6 - - Yanni Paniaras 3/3 1 ---- Alexandra Papalexopoulou 7/7 - - - - Stelios Triantafyllides 7/7 1/1 - 2/2 - Dimitris Tsitsiragos 7/7 1/1 6/6 - - Maria Vassalou 2 6/7 0/1 - - 1/1 Bill Zarkalis 7/7 - - - - Mona Zulﬁcar 7/7 1/1 - 2/2 - 1 Yanni Paniaras was appointed as executive board member by the Annual Shareholders' Meeting held on 13 May 2021. Therefore, he participated in all board meetings held after his appointment. 2 Maria Vassalou was a member of the Board of Directors until 31 December 2021. The Board decided to co-opt Lyn Grobler as independent director of the Company and member of the Nomination Committee, effective 31 December 2021. 3.4 Functioning of the Board of Directors During 2021, the Board of Directors held seven (7) scheduled meetings on 20 January, 22 March, 8 April, 12 May, 27 July, 4-5 October and 10 November 2021. The following table shows the individual attendance of each Board member at the meetings of the Board and its committees held in 2021: INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 60 3.5 Board evaluation As provided in the Code, the Board should assess at least every three years its own performance, its interaction with the executive management, as well as its size, composition, functioning and that of its committees. After the completion of one and a half year as a listed Company primarily on Euronext Brussels with secondary listings on the Athens Exchange and on Euronext Paris, in December 2020 the Board carried out a formal Board evaluation without external facilitation. Each Board member received a questionnaire, in the form of a survey link, comprising of 33 questions, ensuring the anonymity of each participant and requesting feedback on how the Board functions, its composition, effectiveness and operation, the role of the Chair and the functioning of the Board committees. All Board members responded to the questionnaire and the Board evaluation feedback was presented and discussed at the ﬁrst Board meeting of 2021. Given that the term in office of all Board members will end on 12 May 2022, the Nomination Committee will evaluate each member’s presence at the Board or Committee meetings and their commitment and constructive involvement in discussions and decision-making, in accordance with a pre-established and transparent procedure. The Nomination Committee will also assess whether the contribution of each Board member adapted to changing circumstances. 3.6 Code of Conduct – Conﬂicts of interest A Code of Conduct has been drawn-up, setting out the expectations for the Company’s leadership and employees in terms of responsible and ethical behavior. All Board members should uphold the highest standards of integrity and always act in the best interest of the Company. Each member of the Board, both during his or her membership of the Board and afterwards, should not disclose to anyone in any manner any conﬁdential information relating to the business of the Company or companies in which the Company has an interest, unless he or she has a legal obligation to disclose such information. No member of the Board may use the information described above to his or her own advantage. Each member of the Board undertakes not to develop, either directly or indirectly, during the term of his or her mandate, any activities nor perform any actions that conﬂict with the activities of the Company or its Subsidiaries. All members of the Board are required to inform the Board of conﬂicts of interests as they arise. In case a director has a direct or indirect ﬁnancial interest that conﬂicts with the interests of the Company, he or she is required to inform the other directors before the Board takes a decision and the Board is required to implement the procedures set forth in articles 7:96 and 7:97 of the BCCA. Pursuant to the above articles of the BCCA, the following decisions took place, without the presence of one or more executive members of the Board: 1. Resolution of the meeting of the Board of Directors held on 20 January 2021: Amendment to the 2020 LTIP approval decision of 9 April 2020 On 20 January 2021, the Board decided to amend the 2020 Long Term Incentive Plan (the 2020 LTIP) approval decision of the Board taken at the meeting of 9 April 2020. The conﬂict of interest relates to the fact that the amendment would beneﬁt the Cyprus- based executive directors, namely Michael Colakides and three members of the Group Executive Committee based in Cyprus, Christos Panagopoulos, Fokion Tasoulas and Grigoris Dikaios. Mr. Colakides, in his capacity as member of the Board of Directors, declared that he had a potential conﬂict of interest pursuant to article 7:96 of the BCCA and withdrew from the meeting. The amendment of the 2020 LTIP provided that, instead of “shadow shares” the above senior executives based in Cyprus would receive in their individual accounts in the “Kronos Special Pension Fund” the number of fund units corresponding to the same number of “shadow shares”, once they would mature. The value of the award will be the same. The above action does not impact the principles of the 2020 LTIP nor the grants awarded. The relevant awards were approved by the Board at the meeting of 9 April 2020, but the Cyprus Ministry’s tax ruling regarding their treatment in Cyprus was only received in December 2020. Following relevant deliberation, the Board, in the absence of Michael Colakides, decided unanimously and by separate votes to approve the above proposed amendment of the 2020 LTIP. 2. Resolution of the meeting of the Board of Directors held on 22 March 2021 The following decisions were taken, in the absence of the executive members of the Board of Directors, namely Michael Colakides, Leonidas Canellopoulos, Alexandra Papalexopoulou, Dimitri Papalexopoulos and Bill Zarkalis, who declared that they had a possible conﬂict of interest, pursuant to article 7:96 of the BCCA: a. to approve the variable remuneration payouts (bonuses) for 2020 of the executive members of the Board, the members of the Management Committee and the members of the Group Executive Committee, as included in the Remuneration Report for the year 2020, noting that the relevant variable remuneration payouts, which amount in total to €2,744,316, are paid in accordance with the provisions of the 2020 Remuneration Policy and following the appraisal of the performance of each executive director and the achievement of personal and collective targets provided in the Remuneration Policy; MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT Demir Kapija – Smokvica Highway, section of Corridor 10, N. Macedonia 61 b. to approve the long-term incentive awards to be granted in 2021 to the executive members of the Board, the members of the Management Committee and the members of the Group Executive Committee, as recommended by the Remuneration Committee, noting that the value of such long-term incentive awards amount in total to €2,572,000 and are granted subject to the achievement of personal and collective targets provided in the 2020 Remuneration Policy; and c. to approve the implementation of the Deferred Compensation Plan as presented, noting that the awards granted amount in total to €643,000. The conﬂict of interest is related to the fact that the executive members of the Board are beneﬁciaries of the variable remuneration payouts of 2020, the long-term incentive awards to be granted in 2021 and the implementation of the Deferred Compensation Plan. The Board has set (a) a Policy for transactions and other contractual relationships between the Company or Group Subsidiaries and members of the Board or the Management Committee or the Group Executive Committee or other designated persons and (b) a Dealing Code, which is addressed to the Company’s directors, managers and officers, as well as to Group’s directors, managers, officers and employees who are in possession of inside information (within the meaning of the Regulation (EU) No 596/2014 on market abuse). The Policy for Transactions and the Dealing Code are included (as Appendix 2 and Appendix 8, respectively) in the Company’s CG Charter which is available on the Company’s website (https:// www.titan-cement.com/wp-content/uploads/2021/07/TCI-CG_ Charter_22.7.2021.pdf). 4. Composition and Operation of Board Committees 4.1 Audit and Risk Committee 4.1.1 Composition, Role and Functioning Chair: Kyriacos Riris, independent director Members: Harry David, independent director Dimitris Tsitsiragos, independent director With a career spanning some 40 years, the Chairman of the Audit and Risk Committee has accumulated vast experience in auditing and accountancy. Likewise, Harry David and Dimitris Tsitsiragos, have collective expertise regarding the activities of the Company. The Audit and Risk Committee performs all duties set out in article 7:99 of the BCCA and is entrusted with the development of a long-term audit program encompassing all activities of the Company, including: a. monitoring the ﬁnancial reporting process; b. monitoring the effectiveness of the Company’s internal control and risk management systems; c. monitoring the internal audit and its effectiveness; d. monitoring the statutory audit of the annual and consolidated ﬁnancial statements, including any follow-up on any questions and recommendations made by the External Auditor; e. reviewing and monitoring of the independence of the External Auditor, in particular regarding the provision of additional services to the Company. The Audit and Risk Committee held six meetings in 2021: on 22 February, 22 March, 8 April, 11 May, 27 July and 9 November 2021. The discussions and decisions of the Audit and Risk Committee meeting held on 22 February 2021 included: the presentation by the external auditors (PwC) of the audit plan for the year ended 31 December 2020; the presentation by the Head of the Group’s Internal Audit, Risk and Compliance Department of the full activity report for the year 2020 and the update on the Company’s internal control environment; the presentation by the Head of the Group’s Internal Audit, Risk and Compliance Department of the fraud and whistleblowing cases reported in 2020; the presentation by the Group IT Manager of the Cyber Security status of the Company and the measures taken; the presentation by the General Counsel of the Company of the legal cases that may potentially have a signiﬁcant negative effect on the ﬁnancial statements of the Company. The discussions and decisions of the Audit and Risk Committee meeting held on 22 March 2021 included: the presentation of the condensed ﬁnancial statements for the year ended 31 December 2020, the relevant ﬁnancial statements and the press release for the fourth quarter and the year end results; the presentation by the external auditors (PwC) of their report on the consolidated ﬁnancial statements for the year 2020 and a discussion on their ﬁndings; the approval of non-audit services (NAS) provided in Q1 (following management’s approval). The discussions and decisions of the Audit and Risk Committee meeting held on 8 April 2021 included: the presentation and recommendation for approval of the Integrated Annual Report for the year 2020; the presentation and recommendation for approval of the stand-alone ﬁnancial statements for the year ended 31 December 2020 of Titan Cement International S.A.; the presentation by the external auditors (PwC) of their audit reports on the Integrated Annual Report and the stand-alone ﬁnancial statements of Titan Cement International S.A. for the year ended 31 December 2020 (both unqualiﬁed); a brief discussion on the Management Letter which would be repeated at a date after the Annual Shareholders' Meeting. The discussions and decisions of the Audit and Risk Committee meeting held on 11 May 2021 included: the presentation of the new Audit Engagement Partner of PwC Réviseurs d’Entreprises SRL, Didier Delanoye, who replaced Marc Daelman as of 13 May 2021; the presentation and recommendation for approval of the unaudited condensed ﬁnancial statements for the ﬁrst quarter ended 31 March 2021 and the press release for the same period; the discussion with the Head of the Group’s Internal Audit, Risk and Compliance Department of the status of implementation of the Internal Audit plan during Q1, the ﬁndings of this period, the compliance and anti-fraud activities performed and other matters. The discussions and decisions of the Audit and Risk Committee meeting held on 27 July 2021 included: the presentation of the interim condensed ﬁnancial statements of the half year 2021 and the press release for the same period; the approval of NAS provided in Q2 (following management’s approval); a discussion on the ﬁndings of the external auditors (PwC) in respect of the interim condensed ﬁnancial statement and their unqualiﬁed report for the same period; a discussion with the external auditors (PwC) on the quality review control of PwC Réviseurs d’Entreprises SRL executed by the CTR/CSR; the status of INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 62 implementation of the Internal Audit Plan; the Q2 activity report of the Group Audit Risk and Compliance Department. Finally, the discussions and decisions of the Audit and Risk Committee meeting held on 9 November 2021 included: the presentation of the unaudited condensed ﬁnancial statements of Q3 2021 and the 9 months press release; the presentation of the 2021 Audit Plan by the External Auditors (PwC); the extensive discussion of the 2020 Management Letter; the approval of NAS provided in Q3 (following management’s approval); the discussion with the Head of the Group’s Internal Audit, Risk and Compliance Department, without the presence of any member of the management team, of the status of implementation of the Internal Audit Plan; the Q3 activity report of the Group Audit, Risk and Compliance Department, the compliance and anti-fraud activities performed, one new whistleblowing case and other matters. 4.1.2 External Auditor The audit of the Company’s ﬁnancial statements was entrusted, by virtue of the resolution of the Extraordinary General Meeting of Shareholders dated 13 May 2019, as amended by virtue of the resolution of the Annual General Meeting of Shareholders dated 13 May 2021, to PriceWaterhouseCoopers, Réviseurs d’Entreprises SRL, with registered office located at Culliganlaan 5, 1831 Machelen, Brussels, represented by Mr. Didier Delanoye, for a term of three years, ending on the date of the Annual General Meeting of Shareholders to be held in 2022 related to the approval of the annual accounts for the year ending on 31 December 2021. The responsibilities and powers of the External Auditor are set by law. The Audit and Risk Committee monitors and assesses the effectiveness, independence and objectivity of the external auditor having regard to the: • content, quality and insights on key external auditor plans and reports; • engagement with the external auditor during committee meetings; • robustness of the external auditor in handling key accounting principles; and • provision of non-audit services. The yearly 2021 audit fees for the statutory accounts of Titan Cement International S.A. (TCI) were set at €117,200 (plus VAT, out of pocket expenses and the IRE/IBR fee) (€109,000 in 2020). The audit fees for Group and statutory audit of TCI subsidiaries and affiliates in 2021 amount to €1,397,795 (€1,207,861 in 2020). Non-audit fees (for TCI, subsidiaries and affiliates) paid or accrued in 2021, amount to €187,116 (€334,637 in 2020) and include: • Audit related fees (assurance services for TCI, subsidiaries and affiliates) €168,055 (€298,596 in 2020); • Tax advisory, other advisory and compliance services €19,061 (€36,041 in 2020). The rules governing the composition, tasks and method of functioning of the Audit and Risk Committee are laid down in Appendix 3 of the Company’s CG Charter (“Terms of Reference of the Audit and Risk Committee”), which is available on the Company’s website (https://www.titan-cement.com/wp-content/ uploads/2021/07/TCI-CG_Charter_22.7.2021.pdf). 4.2 Remuneration Committee Chair: Mona Zulﬁcar, independent director Members: William Antholis, independent director Stelios Triantafyllides, independent director The Remuneration Committee has the duties set out in article 7:100 of the Belgian Companies and Associations Code, including, to prepare and assess proposals for the Board with regard to: a. the Company’s remuneration policy and the remuneration of directors, members of the Company’s Management Committee and members of the Group Executive Committee, as well as on the arrangements concerning early termination; b. the annual review of the executive management’s performance; and c. the realization of the Company’s strategy against performance measures and targets. The Remuneration Committee held two meetings in 2021: on 19 March and 22 November 2021. The main topics of the meeting of the Remuneration Committee held on 19 March 2021 referred to recommendations of the Committee on: a. the variable remuneration payouts for 2020 based on the actual collective performance versus targets; b. the vesting of the stock options awarded in 2018; c. the salary increases for 2021, bonus payout for 2020 and LTIP awards for 2021 for the executive members of the Board, the members of the Management Committee, the members of the Group Executive Committee and the Group Internal Audit, Risk and Compliance Director; d. the implementation of the Deferred Compensation Plan; e. the Remuneration Report for the year 2020. The topic of the meeting of the Remuneration Committee held on 22 November 2021 referred to the approval by the Committee of a deferred cash bonus payment to one executive director (Mr. Bill Zarkalis) as provided by his contract. The relevant decision was approved by the Board of Directors on 18 January 2022 and for this reason it is not included in section 3.6 “Code of Conduct – Conﬂicts of interest” of the Corporate Governance Statement of 2021. The rules governing the composition, tasks and method of functioning of the Remuneration Committee are laid down in Appendix 5 of the Company’s CG Charter (“Terms of Reference of the Remuneration Committee”), which is available on the Company’s website (https://www.titan-cement.com/wp-content/ uploads/2021/07/TCI-CG_Charter_22.7.2021.pdf). 4.3 Nomination Committee Chair: Efstratios-Georgios (Takis) Arapoglou, non-executive director Members: Andreas Artemis, independent director Lyn Grobler, independent director The role of the Nomination Committee is to make recommendations to the Board with regard to the appointment MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 63 of new members in the Board of Directors, the Managing Director, members of the Management Committee and the Group Executive Committee, as well as their orderly succession. The main duties of the Nomination Committee include: a. the nomination of candidates for any vacant directorships, for approval by the Board; b. the preparation of proposals for reappointments; c. the periodical assessment of the size and composition of the Board and making recommendations for any changes; and d. ensuring that sufficient and regular attention is paid to the succession of executives, talent development and promotion of diversity in leadership positions. The Nomination Committee meets at least once a year and whenever a meeting is deemed necessary and advisable for its proper functioning. During 2021, the Nomination Committee held one meeting on 2 November 2021. The main topics of the meeting of the Remuneration Committee held on 2 November 2021 referred to the presentation of Lyn Grobler as potential Board candidate to replace Maria Vassalou, subject to the conﬁrmation of the mandate by the next general meeting, and the presentation of two more women as potential new Board candidates, in order to increase the number of women in the Board to ﬁve (5). The rules governing the composition, tasks and method of functioning of the Nomination Committee, as well as the procedure to be followed by the latter for the appointment and reappointment of Board members, are laid down in Appendix 4 of the Company’s CG Charter (“Terms of Reference of the Nomination Committee”), which is available on the Company’s website (https://www.titan-cement.com/wp-content/ uploads/2021/07/TCI-CG_Charter_22.7.2021.pdf). 4.4 Management Committee Chairman: Michael Colakides, Managing Director and Group CFO Members: Grigoris Dikaios, Company CFO Christos Panagopoulos, Regional Director East Med The main role and main duties of the Management Committee are to implement and monitor the company strategy, to prepare and present to the Board the ﬁnancial statements of the Company in accordance with the applicable accounting standards and policies of the Company, to prepare the Company’s required disclosure of the ﬁnancial statements and other material ﬁnancial and non-ﬁnancial information, to manage and assess the internal control systems of the Company and to support the Managing Director in the day-to-day management of the Company and the performance of his other duties. The Management Committee meets whenever a meeting is required for its proper functioning. The rules governing the composition, tasks and method of functioning of the Management Committee, as well as the code of conduct, are laid down in Appendix 6 of the Company’s CG Charter (“Terms of Reference of the Management Committee”), which is available on the Company’s website (https://www. titan-cement.com/wp-content/uploads/2021/07/TCI-CG_ Charter_22.7.2021.pdf). 4.5 Group Executive Committee Chair: Dimitri Papalexopoulos Deputy Chair: Alexandra Papalexopoulou Members: Michael Colakides, Managing Director and Group CFO Leonidas Canellopoulos, Group Chief Sustainability Officer Michael Chivers, Group Human Resources Director Antonis Kyrkos, Group Transformation and Strategic Planning Director Yanni Paniaras, Group Executive Director Europe and Sustainability Christos Panagopoulos, Regional Director Eastern Mediterranean Fokion Tasoulas, Group Innovation and Technology Director Bill Zarkalis, Group Chief Operating Officer – President and CEO of Titan America LLC – Chairman of STET The role of the Group Executive Committee is to facilitate the supervision of the Group operations, the cooperation and coordination between the Company’s subsidiaries and the monitoring of the Group management performance, while ensuring the implementation of decisions and related accountability. Τhe Group Executive Committee held 19 meetings during 2021. A variety of coordination topics were covered, including strategy, quarterly results, Group budget, H&S reviews, sustainability issues, HR issues, procurement, progress of key projects (decarbonization, digitalization), trading activities, diversiﬁcation, risk, etc. The rules governing the composition, tasks and method of functioning of the Group Executive Committee, as well as the code of conduct, are laid down in Appendix 7 of the Company’s CG Charter (“Terms of Reference of the Group Executive Committee”), which is available on the Company’s website (https://www.titan-cement.com/wp-content/uploads/2021/07/ TCI-CG_Charter_22.7.2021.pdf). 5. Diversity and Inclusion TITAN is committed to offering equal opportunities and encourages diversity and inclusion at every level of employment in the Company. Diverse and inclusive workplace has been recognized as a material issue for the Group. Diversity includes gender, age, nationality, disability, ethnic origin, sexual orientation, culture, education and professional background. At Group level, particular attention is given to monitoring the implementation of our Human Rights Policy, part of which refers to the promotion of diversity and to ensuring consistent improvement of diversity across the organization. Improving the gender mix at all levels is always an area of focus. Likewise, we focus on inclusion and on creating a working environment that maximizes the potential of all employees. Currently, the number of women on the Board is 3 out of 15. However, the Company intends to comply with the 1/3 gender diversity rule, earlier than provided by law, by increasing the number of women serving on the Board. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 64 The Board has also promoted diversity in the composition of the Board Committees, by appointing a woman as Chair of the Remuneration Committee and another woman as a member of the Nomination Committee. TITAN monitors gender diversity in management at both Group and local levels (see ESG Performance statements, table 2.2 Focus area growth enabling work environment). In 2019, an assessment of Group policies was conducted by the Group Human Resources Department to deﬁne priorities and future targets accordingly. Our Group Code of Conduct, Human Rights and CSR policies were updated to incorporate clearer references to diversity and inclusion. Diversity at the Board level has also been promoted through a balanced mixture of academic and professional skills. More speciﬁcally, the Board includes directors from a variety of sectors, including, among others, banking and insurance, corporate/ business, audit services, public policy and political history, the cement sector, emerging markets and ﬁnance, legal services, technology and IT. As far as residence is concerned, six Board members have their permanent residence in Cyprus, two in the USA, four in Greece, one in Egypt and two in the UK. The Group focuses on fostering diversity and inclusion awareness through workshops, training and development programs in the various regions. The results of diversity promotion in 2021 are published in the ESG Performance review and statements, table 2.2 Focus area growth enabling work environment. 6. Internal Audit and Risk Management in the Scope of the Financial Reporting Process The key elements of the system of internal controls utilized in order to avoid errors in the preparation of the ﬁnancial statements and to provide reliable ﬁnancial information are the following: The assurance mechanism regarding the integrity of the Group’s ﬁnancial statements consists of a combination of the embedded risk management processes, the applied ﬁnancial control activities, the relevant information technology utilized, and the ﬁnancial information prepared, communicated and monitored. Each month the Group’s subsidiaries submit ﬁnancial and non- ﬁnancial data to the Group’s consolidation department and provide explanatory information where necessary. In consolidating the ﬁnancial results and statements, the Group utilizes specialized consolidation software and specialized software for reconciling intercompany transactions. These tools come with built-in control mechanisms and have been parametrized in accordance with the Group’s needs. Finally, the above tools use best practices regarding the consolidation process, which the Group has to a very large extent adopted. The Group’s management reviews on a monthly basis the consolidated ﬁnancial statements and the Group’s Management Information (MI) – both sets of information being prepared in accordance with IFRS and in a manner that facilitates their understanding. The monthly monitoring of the ﬁnancial statements and Group MI and their analysis by the relevant departments are key elements of the controlling mechanism regarding the quality and integrity of ﬁnancial results. The Group’s external auditors review the mid-year ﬁnancial statements of the Group and its material subsidiaries and audit their full-year ﬁnancial statements. Moreover, they audit the full- year ﬁnancial statements of the Company. In addition, the Group’s external auditors inform the Audit and Risk Committee about the outcome of their reviews and audits. The Audit and Risk Committee, during its quarterly meetings prior to the ﬁnancial reporting, is informed by the Managing Director and Group CFO and by other competent officers of the Company and the Group about the performance of the Group, monitors the consolidated accounts and the ﬁnancial reporting process and reports accordingly to the Board. The Audit and Risk Committee monitors the ﬁnancial reporting process and the effectiveness of the Group’s and the Company’s internal control and risk management systems. The approval of the ﬁnancial statements (Company and Consolidated) by the Board is made after the relevant recommendation of the Audit and Risk Committee. 7. Internal Audit The internal audit is carried out by the Group Internal Audit function. As of January 2020, the function assumed a broader role, taking over responsibility for risk and compliance, in addition to the internal audit. Internal Audit is an independent department with its own written regulation, reporting directly to the Audit and Risk Committee. The Group Internal Audit workforce consists of 18 executives duly trained and having appropriate experience to carry out their work. Two (2) new hires were added in early 2021. Internal Audit’s primary role is to monitor the effectiveness of the internal control environment. Internal Audit’s scope also includes: • monitoring implementation and compliance with the Company’s Internal Regulation, Code of Conduct, Articles of Association and applicable laws in all jurisdictions in which the Group operates; • providing consulting services (e.g. new procedures review, new IT systems post-implementation reviews); • undertaking special assignments (e.g. fraud investigations). During the year, the Audit and Risk Committee received in total 35 internal audit reports. Likewise, the Audit and Risk Committee received all progress reports referring to the most important audit ﬁndings in 2021. As already mentioned in the section referring to the work and function of the Audit and Risk Committee, in all meetings held by the Audit and Risk Committee, the Head of the Group’s Internal Audit, Risk and Compliance Department participated. The Head of the Group’s Internal Audit, Risk and Compliance Department had a number of meetings with the Chairman of the Audit and Risk Committee pertaining to the better preparation of the Audit and Risk Committee meetings with regard to the Internal Audit. Following the relevant recommendation of the Audit and Risk Committee, the Board of Directors approved the Internal Audit MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 65 Plan for the year 2022 and speciﬁed the functions and areas on which internal audit should primarily focus. 8. Remuneration report 2021 In accordance with the applicable provisions, this Remuneration Report describes the remuneration paid on an individual basis to the members of the Board of Directors and the members of the Management Committee, who are in charge of the daily management. 8.1 Introduction In 2021 the fundamentals driving demand across our markets, namely the strong recovery of economic activity and a rise in public and private investment against a low interest rate environment, stimulated growth. It was a year of robust performance for TITAN Cement Group, although the second half of 2021 was marked by the surge in fuel, electricity and shipping freight costs which held back proﬁtability. The Group generated record revenues of €1,714.6 million, up 6.7% from 2020, reﬂecting higher demand and a supportive pricing environment. Due to the unexpected spike of input costs after the ﬁrst semester and despite pricing initiatives that partly alleviated the burden, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) declined by 3.6% to €275.2 million. Net Proﬁt after Taxes and minorities (NPAT) climbed to €91.9 million (vs. €1.1 million in 2020 and €50.9 million in 2019). This signiﬁcant increase was the result of lower ﬁnance costs, more favourable FX movements and a lower effective tax rate. It should be noted that in 2020 there were €63.9 million one-off charges related to Egypt. Thanks to a successful reﬁnancing strategy for a third consecutive year the Group lowered signiﬁcantly its ﬁnance costs to €33.6 million (€19 million lower than 2020 and €30 million lower than 2019). US operations marked a new milestone with sales revenue at record levels thanks to growing demand, underpinned by healthy macroeconomic conditions. In Greece, the market continued its positive performance, lending further support to the belief that demand is solidly in the upward path of the business cycle. In Southeastern Europe performance was robust. Performance in the Eastern Mediterranean turned positive, thanks to the mix of demand pick-up and better pricing dynamics in Egypt, while in Turkey, despite the volatile economic situation, the Group recorded revenue growth as well. Finally our Brazilian operations continued to grow signiﬁcantly. 8.2 Remuneration Policy The 2020 Remuneration Policy was approved by the Annual General Meeting of Shareholders that was held on 14 May 2020 and is aligned to a great extent with the implementation of the European Shareholder Rights Directive II (“SRD II”). The 2020 Remuneration Policy ensures that TITAN is remunerating on the basis of the Company’s short and long-term business plan, so as to continue creating value for customers, shareholders, employees, societies and economies. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 8.3 Target Pay Mix The following pie charts represent the ﬁx/variable pay mix for the Executive Directors and the members of the Management Committee (on aggregate target average) in case of ‘on-target’ performance and reﬂects the underlying pay-for-performance principles and market-competitive reference of the Remuneration Policy. 29% Short-Term Incentive Plan (STIP) Long-Term Incentive Plan (LTIP) Fixed Remuneration MANAGEMENT COMMITTEE (AGGREGATE) 26% 45% BOARD EXECUTIVE DIRECTORS (AGGREGATE) Short-Term Incentive Plan (STIP) Long-Term Incentive Plan (LTIP) Fixed Remuneration 32% 29% 39% The total amount of remuneration of the Executive Directors and the member of the Management Committee is in line with the Remuneration Policy adopted, linked to strategy, mechanisms and relevant performance measures and contributes to the long-term performance of the Company. Main principles that govern the Remuneration Policy and contribute to the Company’s business strategy and sustainability are: • Establish a fair and appropriate level of ﬁxed remuneration aiming at attracting high caliber senior professionals who can add value to the Company. • Maintain a balanced approach between ﬁxed and variable remuneration, so as to avoid over relying on variable pay and undue risk taking. • Establish a balanced approach between short and long-term incentives, to ensure there is focus on short term objectives that will ultimately contribute to the creation of long-term value creation. • Alignment of executives to shareholder interests and long-term value creation through long-term incentives where the reward is linked to company shares. • Avoidance of undue risk taking by focusing on ﬁnancial and non-ﬁnancial performance metrics in variable pay design. 66 MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 8.5 Variable pay schemes Short Term Incentive Scheme and Long-Term Incentive Plan awards are treated in accordance with the rules of the relevant plans. Element of Remuneration Overview Short-Term Incentive Scheme Target payout: Executive Directors of the Board and the Management Committee: up to 100% of Annual Base Salary Maximum: In case of overachievement, the collective part of the STI is capped at 130% of target, the individual part at 150% (in case of extraordinary performance) and the safety part at 200% Performance Criteria: • Financial Performance (up to 45%): EBITDA • Individual Performance (up to 55%): combination of objectives and behaviors • Safety (5%): Lost Time Injury Frequency Rate Long-Term Incentive Plan (LTIP) A new Long Term Incentive Plan (LTIP) applied in 2020 in line with the approved 2020 Remuneration Policy. Awards are granted to the plan participants in the form of a conditional grant of TCI shares. The individual awards granted are based on each participant’s position, ﬁxed salary, individual performance and potential for development. The LTIP award granted to each participant is approved by the Board of Directors following relevant recommendation by the Remuneration Committee. The award has been deﬁned up to 125% of Annual Base Salary for the Management Committee and the Executive Directors of the Board. The conditional grant of the number of TCI shares is determined based on the value of the TCI share at the time of grant. The value of each “conditionally granted share” is equal to the average TCI share closing price on Euronext Brussels during the last 7 trading days of March of the grant year. The vesting schedule is 50% on year 3, 50% on year 4. Upon the completion of the vesting period, the beneﬁt of the employee is determined based on the value of TCI share at the time of vesting. Upon vesting the LTIP provides the ﬂexibility to the eligible Executive, upon her/ his request, to receive the vested award as contribution to a company-provided pension plan investing mainly in TCI shares (Fund). Participants are expected to maintain in TCI shares (or Fund(s)) at a minimum 20% of the total awards vested during the last ﬁve (5) vesting years (rolling basis). TCI shares, as well as Fund(s) balance, already owned by participants through previous LTI plans will be taken into consideration. Special Trust Fund Plan (Fund) Special Trust fund is a fund which invests in TCI shares. LTIP participants may elect to receive their LTIP award as contributions in the Fund, and therefore their long term interests are still linked to TCI share. 8.4 Labor Market In setting the remuneration levels for the Managing Director, as well as of the other Executive Directors and the members of the Management Committee, the Remuneration Committee gathers market insights from various relevant perspectives. These reﬂect the relevant industries for the Company, the relevant geographies (e.g. Europe, and for speciﬁc positions the U.S.), and also take into consideration the size and the scope of the Company and the respective positions. The Remuneration Committee regularly reviews the Remuneration Policy, in order to ensure continuous alignment with its principles, as well as market trends and best practices. On an annual basis, the Remuneration Committee recommends the levels of the annual remuneration of the Executive Directors and the members of the Management Committee, as well as of other Group executives on the basis of their performance and responsibilities. The Committee also recommends the levels of remuneration of Non-Executive Directors on the basis of their time commitment and responsibilities. In case of substantial changes, and at least every four years, the Remuneration Policy is submitted for approval to the General Meeting. The level of remuneration for the Chairman of the Board of Directors is decided by the General Meeting, following respective recommendation of the Board of Directors and of the Remuneration Committee. Likewise, the level of remuneration for the Managing Director and the members of the Management Committee, is set by the Board of Directors, following relevant recommendation of the Remuneration Committee and in line with the applicable Remuneration Policy. 67 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Element of Remuneration Overview Deferred Compensation Plan (DCP) As of 2021, the Company launched a Deferred Compensation Plan (“DCP 2021”) aiming at further aligning the Senior Executives’ long-term interests with those of shareholders. The DCP 2021 substitutes 20% of the LTIP of the eligible executives. Target payout: The award has been deﬁned up to 25% of Annual Base Salary for the Management Committee and the Executive Directors of the Board. Maximum: In case of overachievement, the DCP is capped at 160% of target. Performance Criteria: • Sustainability KPI: a 3-year CO₂ target supporting the decarbonization priority of the Group; reduction of net direct CO₂ emissions/t cementitious product (50%). •Total Shareholder Return (TSR) performance vs a Peer Group Index (50%). The peer group which formulates the index is the following (as set by the Board of Directors and may be changed, if required): 1. Lafarge-Holcim 5. CRH 2. Heidelberg 6. Buzzi 3. Cemex 7. Argos 4. Cementir 8. Vicat The performance period is 3 years. Flexibility is provided in ways to receive vested beneﬁt (e.g. cash, pension plan contributions). Retirement Allowance Type of Plan: Deﬁned contribution plan Maximum contribution: up to 10% of Annual Base Salary Plan mechanism: First tier: up to 8% of Annual Base Salary. Second-tier: in addition to the 1st tier 8%, a further up to 2% is offered through matching the employee’s contribution by a ratio of 1:2. In the event Executives leave the Company prior to 5 years from the entry to the Program, any contributions by the Company are lost. No speciﬁc clauses and/or arrangements in relation to change in control are applicable. No variable remuneration claw back mechanisms were used during FY2021. 8.6 Non-executive Directors’ remuneration in 2021 As at 31 December 2021, the fees of the Non-Executive Directors for the year 2021, amounted to: Non-Executive Director Compensation by the Company Board of Directors Board Committees Pro-bono allowance Eftrsatios-Georgios (Takis) Arapoglou €200,000 gross €15,000 gross No Andreas Artemis €50,000 gross €10,000 gross No William Antholis €50,000 gross €8,000 gross No Harry David €50,000 gross €15,000 gross No Lyn Grobler as of 31 December 2021 member of the Nomination Committee --- Kyriacos Riris €50,000 gross €20,000 gross No Stelios Triantafyllides €50,000 gross €8,000 gross No Maria Vassalou until 31 December 2021 €30,000 gross €3,750 gross Paid for period 1-25 July 2021 No Dimitris Tsitsiragos €50,000 gross €15,000 gross €5,000 Mona Zulﬁcar €50,000 gross €12,000 gross No According to the 2020 Remuneration Policy, non-executive directors do not receive variable compensation linked to results or other performance criteria. As a result, non-executive directors are not entitled to annual bonuses, stock options or performance share units. Neither are they entitled to any supplemental pension scheme. Non-executive members of the Board are not entitled to termination payment. 68 MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT Executive Directors of the Board and Management Committee Remuneration packages in 2021 Name Annual Base Salary Board Fees Allowances and Other Beneﬁts 1 Annual Variable Compensation 2 Pension Contribution 3 Long-Term Incentives (vested in 2021) Total Annual Compensation Fixed Compensation Variable Compensation Total Annual Compensation Total Annual Compensation Year 2021 2020 2019 Board Executive Directors Michael Colakides, Managing Director 426,150 45,000 32,139 363,743 42,615 138,782 1,048,429 52% 48% 1,075,190 1,124,092 Dimitri Papalexopoulos, Chairman of Group Executive Committee 514,547 30,000 18,652 513,939 51,225 242,398 1,370,760 45% 55% 1,381,193 1,432,979 Alexandra Papalexopoulou, Deputy Chair of Group Executive Committee 394,462 30,000 33,702 335,214 39,270 155,698 988,347 50% 50% 980,443 909,587 Leonidas Canellopoulos 198,386 30,000 15,615 116,410 21,774 18,493 400,678 66% 34% 283,046 248,366 Yanni Paniaras* 238,542 19,000 17,072 185,108 23,750 107,651 591,122 50% 50% - - Bill Zarkalis** (in €) 642,301 30,000 248,488 563,327 47,861 186,126 1,718,102 56% 44% 1,561,012 1,627,556 Takis-Panagiotis Canellopoulos*** ---------85,065308,000 Management Committee Members Grigoris Dikaios 188,580 0 34,079 63,363 11,315 18,187 315,524 74% 26% 316,092 306,617 Christos Panagopoulos 274,800 0 108,215 152,722 26,480 61,442 623,659 66% 34% 591,567 581,835 Konstantinos Derdemezis**** ---------614,685 647,087 * Amounts refer to period May-December 2021 during which Yanni Paniaras was Board Executive Director. ** Amounts include allowances linked to Bill Zarkalis' international assignment in the US and part of the Deferred 3-year assignment success bonus linked to 2021. Amounts, paid in $, are converted into euro based on fx rate €/$ of 31 December 2021 for 2021, on 31 December 2020 for 2020 and on 31 December 2019 for 2019 ﬁgures respectively. *** Takis-Panagiotis Canellopoulos was Board Executive Director till March 2020. **** Konstantinos Derdemezis was member of the Management Committee till October 2020. In alignment with the Company's Remuneration Policy, severance payment of 12 months' remuneration offered to Mr. Derdemezis as a way for the Group to express its appreciation for the loyalty, hard work and ﬂexibility during the last 23 years. 1 Includes beneﬁts and allowances (such as travel, housing, international assignment related allowance), life insurance, medical plan, company car. 2 Cash payment. 3 Deﬁned contribution. 8.8 Remuneration of the Executive Directors and the members of the Management Committee in 2021 8.7 Remuneration of Executive Directors and members of the Management Committee in 2021 The remuneration of the Executive Directors and the members of the Management Committee was approved by the Board of Directors following relevant recommendation of the Remuneration Committee and is in full compliance with the 2020 Remuneration Policy and thus contributes to the long-term performance of the company as set above in § 8.3. Given that the Company was established in 2019, the data referring to the annual change in remuneration, expressed in full time equivalents, of the Company’s employees other than the directors, the members of the management committee and other executives and the persons in charge of the daily management, are presented jointly with respect to FY2019. The annual change in the average remuneration (excluding board fees and long term incentive), expressed in full time equivalents, of the company’s employees other than the Directors, the members of the Management Committee, the other directors and the persons in charge for the daily management for 2021 is 4%. The ratio between the highest remuneration of the management members and the lowest remuneration (in full time equivalent) of the Company’s employees is 40 times. 69 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Name Speciﬁcation of plan 1 Grant Date Vesting Date of 2021 Grant Expiry Date 2 Number of Stock grants in 2021 Number of units Fund 3 2021 grant Options forfeited in 2021 Options Vested in 2021 (granted in 2019) Exercise Price Options Exercised in 2021 Michael Colakides, Managing Director* LTI April 2021 31/3/2025 N/A - 42,860 - 6,176 €10 12,658 DCP April 2021 31/3/2024 N/A 5,910 - - - - - Dimitri Papalexopoulos, Chairman, Group Executive Committee LTI April 2021 50% on 31/3/2024 50% on 31/3/2025 N/A 30,450 - - 20,833 - - DCP April 2021 31/3/2024 N/A 7,620 - - - - Alexandra Papalexopoulou, Deputy Chair, Group Executive Committee LTI April 2021 50% on 31/3/2024 50% on 31/3/2025 N/A 23,630 - - 13,506 - - DCP April 2021 31/3/2024 N/A 5,910 - - - - - Leonidas Canellopoulos, Board Executive Director LTI April 2021 50% on 31/3/2024 50% on 31/3/2025 N/A 4,730 - - 1,391 €10 379 DCP April 2021 31/3/2024 N/A 1,190 - - - - - Yanni Paniaras, Board Executive Director** LTI April 2021 50% on 31/3/2024 50% on 31/3/2025 N/A 18,900 - - 7,331 - - DCP April 2021 31/3/2024 N/A 4,730 - - - - Bill Zarkalis, Board Executive Director LTI April 2021 50% on 31/3/2024 50% on 31/3/2025 N/A 30,450 - - 14,276 €10 23,206 DCP April 2021 31/3/2024 N/A 7,620 - - - - - Grigoris Dikaios, Management Committee member* LTI April 2021 LTI: 31/3/2025 N/A - 4,170 - 1,083 €10 2,003 Christos Panagopoulos, Management Committee member* LTI April 2021 LTI: 31/3/2025 N/A - 15,240 - 3,861 €10 4,878 DCP April 2021 DCP: 31/3/2024 N/A 2,100 - - - - - 1 Long Term Incentive Plan (LTI), Deferred Compensation Plan (DCP). 2 2021 Grant refers to Stock (or Fund units) Grant and therefore expiry date i s not applicable. 3 Fund invests in TCI shares. * Management Committee members' 2021 LTI award received as units of Fund which invest mainly in TCI shares. ** Yanni Paniaras is Board Executive Director since May 2021. Options vested in 2021 granted prior to Mr. Paniaras' appointment as Board Executive Director 8.9 Share-based Remuneration (for 2021) 8.10 2021 performance criteria and outcomes | Short-Term Incentives Following relevant recommendation by the Remuneration Committee, the Board determines the most relevant performance criteria for the short-term incentive plan. These KPIs provide the framework for incentive schemes throughout the company. Additionally, the Board sets challenging, but realistic target levels for each of those performance criteria. The Covid challenges were still very much the cause of signiﬁcant uncertainties at the beginning of 2021. The Group maintained the view that the trend of market fundamentals was positive and within this context set the emphasis of performance criteria primarily on Group, regional and country proﬁtability targets. These performance criteria are a key incentive for leading the company to successfully surpass the Covid period’s uncertainty and to be better positioned to pursue its longer term strategy thereafter. The ﬁnal assessment is determined at the end of the ﬁscal year, based on the audited ﬁnancial results. Any potential payout under the short-term incentive plan occurs annually during the ﬁrst semester of the next ﬁnancial year. A minimum level of performance must be achieved before any payment under the plan will be made. Payout is capped for stretch performance. The ﬁnal assessment of performance under the short-term incentive plan is done by the Remuneration Committee, which in turn make the necessary proposal to the Board for decision making. Despite very sharp cost increases in critical cost elements (such as fuel, electricity and shipping freight) in the last four months of the year, the overall proﬁtability of The Group was sustained at levels not far below the original targets. In 2021, at Group level, EBITDA was below the target resulting in a 88.0% payout in the respective part of variable pay and Group ROACE was also below target resulting in a 79.6% payout in the respective part of variable pay. Furthermore, in 2021, at Group level, a strong performance achieved against the set target linked to safety (the Lost Time Injuries Frequency Rate index (LTIFR) was lower than the target), resulting in a 120.9% payout in the respective part of variable pay. The remuneration committee considered the overall performance and concluded to award the variable pay for 2021 according to the achieved results. 70 MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 8.11 2021 performance criteria and outcomes | Long-Term Incentives As already mentioned, two Restricted Stock Option plans (the RSIP 2014 and the RSIP 2017) are currently under implementation: The 2014 Stock Options Plan (approved by the AGM of Titan Cement Company SA of 2014) According to this three- year Plan, the Board of Directors was entitled to grant up to 1,000,000 stock options at a sale price equal to €10.00 per share. Beneﬁciaries of the 2014 Stock Option Plan are executive directors, directors holding senior positions at Group or Regional or Country level in companies of TITAN Group, and a limited number of employees, standing out on a continuous basis for their good performance, having a high potential for advancement. The vesting period of the stock options granted in 2014, 2015 and 2016 was three years. As a result, the granted options matured in December 2016, December 2017 and December 2018 respectively, provided that the beneﬁciaries were still employees of the Group. After the completion of the three-year vesting period, the Board of Directors, based on the following criteria, decided the ﬁnal number of options that the beneﬁciaries had the right to exercise: a. by 50%, based on the average 3-year Return on Average Capital Employed (ROACE) compared to the target of each 3-year period and; b. by 50%, based on the overall performance of the Company's TSR compared to the average overall performance of a predeﬁned international cement peer group: 1. Lafarge-Holcim 5. CRH 2. Heidelberg 6. Buzzi 3. Cemex (in US$) 7. Argos (in US$) 4. Cementir 8. Vicat Based on the achievement against the above performance criteria, the percentage (%) vested of the options granted in 2014, 2015 and 2016 was: 49% options vested out of the total granted options in 2014, 46% options vested out of the total options granted in 2015 and 81.3% options vested out the total options granted in 2016. The Plan’s beneﬁciaries are entitled to exercise their stock option rights, either in whole or in part, within the ﬁrst ﬁve working days of each month, paying the Company the relevant amounts until the expiration date of their stock options i.e. until December of the third year after vesting of the stock options. Based on the Board of Directors decision dated April 9, 2020 due to covid-19 market conditions, it has been approved for the expiration date for the grant of 2014 to be extended for one year to December 2021 and for the grant of 2015 to December 2022. The 2017 Stock Options Plan (approved by the AGM of TITAN Cement Company SA of 2017) According to this three-year Plan, the Board of Directors is entitled to grant up to 1,000,000 stock options at a sale price equal to €10.00 per share. Beneﬁciaries of this Plan are the executive directors, directors holding senior positions at Group or Regional or Country level in companies of TITAN Group, and a limited number of employees, standing out on a continuous basis for their good performance, having a high potential for advancement. The vesting period of the stock options granted in 2017, 2018 and 2019 is three years. As a result, the granted stock options mature in December 2019, December 2020 and December 2021 respectively, provided that the beneﬁciaries were still employees of the Group. After the completion of the three-year vesting period, the ﬁnal option rights number which the beneﬁciaries will be entitled to exercise, shall be determined by the Board of Directors, within the ﬁrst four months of 2020 (done), 2021 (done) and 2022 respectively and shall depend: a. by 50%, based on the average 3-year Return on Average Capital Employed (ROACE) compared to the target of each 3-year period; and b. by 50%, based on the overall performance of the Company's TSR compared to the average overall performance of a predeﬁned international cement producing companies peer group: 1. Lafarge-Holcim 5. CRH 2. Heidelberg 6. Buzzi 3. Cemex (in US$) 7. Argos (in US$) 4. Cementir 8. Vicat Based on the achievement against the above performance criteria, the percentage (%) vested of the options granted in 2017, 2018 and 2019 was: 49.8% options vested out of the total number of options granted in 2017, 35.88% options vested out of the total number of options granted in 2018 and 31.83% options vested out the total number of options granted in 2019. The Plan’s beneﬁciaries are entitled to exercise their stock option rights, either in whole or in part, within the ﬁrst ﬁve working days of each month paying the Company the relevant amounts until the expiration date of their stock options, i.e. until December of the third year after these stock options have been vested. 8.12 Executive Directors’ contracts The employment contracts of the Managing Director of the Company as well as of the other Executive Directors and the members of the Management Committee are contracts of indeﬁnite duration. In case of termination of the employment contract of the Managing Director, the Executive Directors and the members of the Management Committee, at the initiative of the Company, severance payment, as provided in the 2020 Remuneration Policy, cannot exceed 18 months’ remuneration. For the payment of additional compensation in case of retirement or early termination of employment, Board approval is required following respective recommendation of the Remuneration Committee. Notice periods are according to statutory law provisions. 9. Information to be disclosed pursuant to Article 34 of the Royal Decree of 14 November 2007 In accordance with Article 34 of the Belgian Royal Decree of 14 November 2007, the Company hereby discloses the following: 9.1 Capital Structure – Transfer of Company Shares As referred above, in Section 2.1, on 31 December 2021, the Company’s share capital amounted to €1,159,347,807.86 represented by 78,325,475 shares, without nominal value, with voting rights, each representing an equal share of the capital. The shares of the Company are of the same class and are either 71 in registered or in dematerialized form. Holders of shares may elect to have, at any time, their registered shares converted to dematerialized shares, and vice versa. The Company’s Articles of Association do not contain any restriction on the transfer of the Company’s shares. 9.2 Restrictions on voting rights Each Share of the Company corresponds to one vote at the Shareholder’s Meeting. Article 13 of the Company’s Articles of Association provides that in the event shares are held by more than one owner, are pledged, or if the rights attached to the shares are subject to joint ownership, usufruct or any other kind of split-up of such rights, the Board of Directors may suspend the exercise of such voting rights until a sole representative of the relevant shares is appointed. 9.3 Shares conferring special control rights None of the Company shares carries any special rights of control. 9.4 Agreements between Shareholders of the Company, which are known to the Company and contain restrictions on the transfer of shares or on the exercise of voting rights The Company, following the transparency notiﬁcation received on 24 June 2021 and changes in shares that did not require a transparency declaration, due to the fact the 5% threshold was not exceeded either upwards or downwards, has been informed that the following shareholders, E.D.Y.V.E.M. Public Company Ltd, Andreas Canellopoulos, Leonidas Canellopoulos, Nellos- Panagiotis Canellopoulos, Pavlos Canellopoulos, Takis-Panagiotis Canellopoulos, Trust Neptune, Alexandra Papalexopoulou, Dimitri Papalexopoulos, Eleni Papalexopoulou, Alpha Trust, Delta Trust and Lamda Trust, holding in total 30,641,972 shares, which correspond to 39.12% of the Company’s voting rights, are acting in concert. 9.5 Control mechanism of any employee scheme where the control rights are not exercised by the employees There is no employee scheme with such a mechanism. 9.6 Amendment of the Company’s Articles of Association Any amendment of the Company’s Articles of Association must be approved by the Extraordinary Shareholders’ Meeting and at least 50% of the share capital must be present or represented. If such quorum is not met at the ﬁrst Extraordinary Shareholders’ Meeting, a new Shareholders’ Meeting may be convened and shall validly deliberate and resolve irrespective of the share capital present or represented. An amendment of the Company’s Articles of Association is adopted if it has obtained three-quarters of the votes cast, whereby abstentions are not taken into account either in the numerator or in the denominator. 9.7 Rules governing the appointment and replacement of Board Members Pursuant to Article 17 of the Company’s Articles of Association, the Company is managed by a Board of Directors that shall consist of a minimum of three and a maximum of ﬁfteen directors, who shall be natural persons or legal entities, whether or not shareholders, appointed by the Shareholders’ Meeting. The directors are appointed for a maximum term of three years and may be reappointed. Their mandate may be revoked at any time by the Shareholders’ Meeting. When a legal entity is appointed as director, it must speciﬁcally appoint an individual as its permanent representative to carry out the office of director in the name and on behalf of the legal entity. The appointment and termination of the office of the permanent representative is governed by the same disclosure rules as if the permanent representative was exercising the office on his/her own behalf. Should any of the director’s mandates become vacant, for whatever reason, the remaining directors may temporarily ﬁll such a vacancy. The next Shareholders’ Meeting must conﬁrm the mandate of the co-opted director; in case of conﬁrmation, the co-opted director ﬁnishes the mandate of his or her predecessor, unless the Shareholders’ Meeting decides otherwise. If there is no conﬁrmation, the mandate of the co-opted director expires immediately after the Shareholders’ Meeting, without prejudice to the validity of the composition of the Board of Directors until that date. As long as the Shareholders’ Meeting or the Board of Directors, for whatever reason, does not ﬁll such vacancy, the directors whose mandate has expired remain in function if the Board of Directors would otherwise no longer consist of the minimum number of directors required by law or the Company’s Articles of Association. 9.8 Powers of the Board of Directors The Board of Directors is vested with the power to perform all acts that are necessary or useful for the realization of the Company’s purpose, except for those which the law or the Company’s Articles of Association reserve to another corporate body. The powers of the Board of Directors are further detailed in the Company’s Articles of Association and in the Company’s CG Charter, which are both available on the Company’s website (https://www.titan-cement.com/about-us/corporate- governance/). 9.9 Power of the Board of Directors to issue and buy-back shares 9.9.1 The Board of Directors, pursuant to article 6 of the Company’s Articles of Associations and the relevant resolution of the Shareholders’ Meeting of 13 May 2019, may increase the share capital of the Company in one or several times by a (cumulated) amount of maximum €1,106,211,679.40. The Board of Directors can exercise this power for a period of ﬁve (5) years as from the date of publication of the Annexes to the Belgian Official Gazette of the completion of the condition precedent of the amendment to the Company’s Articles of Association approved by the Extraordinary Shareholders’ Meeting of 13 May 2019. This authorization may be renewed in accordance with the relevant legal provisions. 9.9.2 Pursuant to Article 15 of the Company’s Articles of Association, the Company may, without any prior authorization of the Shareholders’ Meeting, in accordance with articles 7:215ff of the BCCA and within the limits set out in these provisions, acquire, on or outside a regulated market, its own shares, which correspond to maximum 20% of the issued shares, for a price which will respect the legal requirements, but which will in INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 72 any case not be more than 20% below the lowest closing price in the last thirty trading days preceding the transaction and not more than 20% above the highest closing price in the last thirty trading days preceding the transaction. This authorization is valid for ﬁve years from the date of the publication of the completion of the condition precedent of the amendment to the Company's Articles of Association approved by the Extraordinary Shareholders' Meeting of 13 May 2019. This authorization covers the acquisition on or outside a regulated market by a direct subsidiary within the meaning and the limits set out in article 7:221ff of the BCCA. If the acquisition is made by a direct subsidiary, the dividends attached to the shares held by the subsidiary go to the subsidiary. Pursuant to article 15 of the Company's Articles of Association, the Board of Directors is authorized, subject to compliance with the provisions of the BCCA, to acquire for the Company's account the Company's own shares, if such acquisition is necessary to avoid serious and imminent harm to the Company. Such authorization is valid for three years as from the date of publication in the Annexes to the Belgian Official Gazette of the completion of the condition precedent of the amendment of the Company's Articles of Association, approved by the Extraordinary Shareholders’ Meeting of 13 May 2019. The Board of Directors is authorized to divest itself of part of or all the company’s shares at any time and at a price it determines, on or outside the stock market or in the framework of its remuneration policy to personnel or directors of the company or to prevent any serious and imminent harm to the Company. The authorization covers the divestment of the Company's shares by a direct subsidiary within the meaning of the BCCA. The authorization is valid without any time restriction, irrespective of whether the divestment is to prevent any serious and imminent harm for the Company or not. 9.10 Important agreements which come into effect, are amended or terminated in the event of change of control of the Company, following a public tender offer The Company has not entered into agreements, which come into effect, are amended or terminated in the event of a change of control of the Company, solely following a public tender offer. It should be noted, though, that the Company has entered into, as it is common, in agreements with a “change of control” clause, specifying the right of the lending bank to request the early repayment of the loan or the exit of the counterparty from a company of the Group, in the event of a change of control in the Company. In particular, such a clause is included in a Multicurrency Revolving Facility Agreement of €208 million, which has been entered into among the Group’s subsidiary TITAN Global Finance PLC and a syndicate of lending banks with the Company and TITAN Cement Company S.A. as Guarantors. 9.11 Agreements between the Company and the Board Members or employees providing for compensation if the Board Members resign or are made redundant without valid reason or if the employment of the employees ceases because of a takeover bid The Company has not entered into any agreement with members of the Board of Directors or employees providing for the payment of compensation upon their resignation or dismissal without valid grounds or upon termination of their tenure or employment, due to a public tender offer. 10. Shareholder Information and Services The Board as a whole is responsible for ensuring a satisfactory and effective dialogue with shareholders. The Investor Relations team, together with the Managing Director, the CFO and other Group executives, regularly meet with institutional investors and participate in investor roadshows and industry conferences. The announcements of the annual and the interim Group results are accompanied by webcasts and conference calls with analysts and investors. All the regulatory and non-regulatory announcements, as well as all other information related to the Company, are available on the Company’s website (www.titan-cement.com). 10.1 Investor Relations Department The Investor Relations Department is responsible for monitoring Company relations with its shareholders and investors, and for communicating with the investor community on an equal footing, in a transparent and timely manner concerning the Company’s performance. The aim is to generate long-term relationships with the investment community and retain the high level of trust that investors have in the Group. Investor Relations: [email protected] Investor Relations Director: Afroditi Sylla, e-mail: [email protected] 10.2 Shareholder Services Department The Shareholder Services Department is responsible for providing timely information to shareholders and for facilitating their participation in General Meetings and the exercise of their rights as shareholders. The Department is also responding to correspondence from shareholders on a wide range of issues. Shareholder Services Manager: Nitsa Kalesi, e-mail: [email protected] 10.3 Share Facts 10.3.1 Share Basic Data Sector 5010 – Construction & Materials Subsector 50101030 – Cement Type Common share Stock Exchange Euronext (Brussels and Paris), Athens Exchange Number of shares 78,325,475 ISIN BE0974338700 CFI code ESVUFN 10.3.2 Tickers Oasis Reuters Bloomberg Euronext TITC TITC.BR TITC.BB ATHEX TITC TITC.PA TITC.GA MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 73 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Risk management TITAN Group is active in a diverse geographical, business and operational landscape, resulting in a multitude of potential risk exposures, including strategic, sustainability (ESG), operational and ﬁnancial risks. In order to effectively identify and mitigate such exposures, the Group manages its risks in accordance with established international practices for industrial companies, embedding key dimensions of Enterprise Risk Management (ERM) into its processes, systems, and governance. In particular, the following ﬁve main components of the ERM framework are supported by a set of principles, providing the basis for the Group’s understanding and management of risks associated with its strategy and business objectives: a. Governance and values, including oversight model, operating structures, deﬁnition of desired cultural traits, commitment to core values and development of appropriate talent; b. Strategy and objective-setting, including deﬁnition of risk appetite, analysis of context, evaluation of options, and formulation of strategic objectives; c. Performance, including risk identiﬁcation, assessment, and prioritization, implementation of responses, and development of risk portfolio view; d. Review and revision, including reviews of risk and performance, assessment of changes, and continuous improvement of approach; e. Information, communication of risk information, use of IT and reporting of risk performance. Risk Management process TITAN's Risk Management approach includes management practices to actively address risk, helping to safeguard the long- term sustainability of its business. It comprises a management system including strategy-setting, organization, governance, policies, reporting, communications with stakeholders, and measurement of performance across all units of the Group. The Board has overall responsibility for determining the nature and extent of the principal risks that the Group is willing to assume in achieving its strategic objectives. Risks are addressed on a day-to-day basis by the Group’s management at various levels in the organization according to the nature of each risk. As a result, risks are identiﬁed and quantiﬁed using multiple sources and are reported in the course of the planning and performance management cycle of the Group, ensuring a quick and effective response. Complementing this risk management culture and approach that is integral to the Group’s business processes and decision- making (both strategic and operational), the Group undertakes on a regular basis a systematic exercise to assess all material risks faced by the Group that could affect the Company’s business model, performance, solvency, or liquidity. These risks are categorized as “strategic”, “operational”, “ESG” or “ﬁnancial”. A committee consisting of senior managers from the Group’s Strategic Planning, Legal and Internal Audit, Risk and Compliance departments periodically assesses the Group’s main risks along the following three dimensions, in line with industry best practices: a. Probability: scale from 1 (Rare) to 5 (Almost certain) b. Impact: scale from 1 (Incidental) to 5 (Extreme) c. Preparedness: scale from 1 (Low) to 5 (High) Risks are categorized using established risk taxonomies relevant for the Group’s business (provided by consultants and external risk experts). The risks are also assessed using a variety of techniques, including the benchmarking of sector practices, enriched with the advanced practices of other industries, the qualitative and quantitative assessment of the risk elements, the evaluation of possible outcomes against the Group’s strategic objectives, the risk elaboration of the Group’s material issues, the evaluation of risk ownership and the recording of mitigating actions that are adopted or planned. The initial assessment is iterated with input from key Group managers. The risks are cross-referenced with the output of the Group’s materiality assessment exercise and reviewed by the Group Executive Committee. Finally, the Board validates the relevant risk assessment and monitors TITAN’s risk management and internal control systems, reviewing their effectiveness (covering all material controls, including ﬁnancial, operational, organizational, and compliance controls). To that end, in October 2021 the board held a meeting speciﬁcally dedicated to reviewing the Group’s strategic directions and priorities against the key business risks for the next three years (2022, 2023 and 2024). In addition, in 2021 a speciﬁc assessment of the Group’s climate change-related risks and opportunities took place. The exercise covered physical risks like temperature, ﬂooding and water stress, as well as transition risks, like carbon pricing, reputational damage and litigation. To this effect, TITAN’s relevant Sustainability and Risk teams engaged with climate risk experts to analyze risks stemming from climate change, as well as opportunities arising from the transition to a low-carbon economy, in alignment with the TCFD framework. The results indicated that the Group’s climate-related risks are in line with those of its sectoral peers. Risk Management, governance and controls In TITAN Group, Risk is managed at three levels, in line with industry best practices. Risks are managed on a day-to-day basis by the Group’s management at various levels in the organization according to the nature of each risk. TITAN’s risk governance framework follows a customized approach that best addresses the particularities of each risk area and ensures the optimum degree of risk ownership and accountability for the appropriate mitigation actions. Frontline management executes its risk management role in accordance with policies and standards, monitors and mitigates risks as part of performance management, and identiﬁes and escalates risks as required. This ﬁrst level of management includes the integration with key business processes (e.g., capital expenditures reviews, strategic planning, budgeting process, etc). 74 At a second level of risk governance and control, the central risk team (i.e., the Internal Audit, Risk and Compliance unit) ensures adherence to the ERM framework and internal policies and monitors its systematic assessment by aggregating risk insight, integrating input and analysis across the Group, and sharing policies and recommendations across the organization. At the senior level, the Board has the overall responsibility for determining the nature and extent of the principal risks that the Group is willing to assume in achieving its strategic objectives. The Board, through all its Committees, discusses and assesses on a regular basis the main areas of risk to which the Group is exposed, identiﬁes new risks, deﬁnes the risk appetite of the Group and monitors the effectiveness of the risk management and internal controls. The Board has delegated responsibility for the monitoring of the effectiveness of the Group’s risk management and internal control systems to the Audit and Risk Committee. In parallel, the Group Executive Committee provides strategic direction, an independent view of risks among all operating units, and coordination among them as needed. According to this framework, strategic and ﬁnancial risks are managed mainly by the Group Executive Committee, Group Finance, and the Capex Committee. The management of most operational and sustainability risks is to a large extent embedded in the daily operation and processes of the local business units. A number of risks, including legal and compliance risks, as well as operational and sustainability risks, including environmental risks, risks regarding energy and fuel prices, availability and cost of raw materials, safety at work, labor issues, brand and reputation, are managed both at Group level by the Group Executive Committee and the competent Group functions (Internal Audit, Risk and Compliance, Group Legal, Group Procurement, Group Innovation and Technology, Group Corporate Affairs, Group IT, Group Communication, Group HR) and also at the local business unit level (BU Legal, Procurement, Corporate Social Responsibility, HR units). This approach ensures that line management owns all the operational and sustainability risks that occur at the level of individual businesses and enables a strong risk culture embedded in all relevant decision-making. At the same time, all risks of higher magnitude that are relevant at Group level are managed centrally, aggregating risk data points from multiple sources across the organization, integrating insights, and crafting mitigating action plans that can be shared among all appropriate organizational levels. The Group Executive Committee is also responsible for setting Group policies and ensuring that they are implemented throughout the Group. To this end, a set of policies provide the necessary framework and reference point for a number of risk areas. In parallel, the ethics and compliance programs implemented throughout TITAN’s operations ensure that the Group’s principles and values are integrated into the day-to-day operations and the risk management culture is reinforced across the Group. The effectiveness of the systems and policies implemented at Group and business unit level are systematically reviewed by the Group Executive Committee and the business units’ management, including for compliance with relevant standards of the Group. Whenever weaknesses are identiﬁed, corrective measures are taken. Group Internal Audit, Risk and Compliance reports on the effectiveness of the risk management and internal control frameworks to the Audit and Risk Committee on a regular basis. The Board and the Audit and Risk Committee receive on a regular basis management reports on the key risks to the business and the steps taken to mitigate such risks and consider whether the signiﬁcant risks faced by the Group are being properly identiﬁed, evaluated and managed. TITAN’s principal risks Strategic risks • Climate change mitigation and adaptation The cement industry is potentially sensitive to ever more stringent carbon regulations. For example, the Group’s operations in Greece and Bulgaria are required to comply with an EU-wide cap and trade emissions scheme, namely the European Trading Scheme (ETS), under which industrial installations must report and control their CO₂ emissions on an annual basis. This may result in additional capital expenditure and reduced proﬁtability due to increases in operating costs; because of this, the Group may face increased competition from cement producers operating outside the EU, which do not incur ETS compliance costs. A mulled Carbon Border Adjustment Mechanism (CBAM) to protect against “carbon leakage” is still under design and may eventually prove ineffective. Beyond operations in the EU, additional countries in TITAN's footprint that do not face stringent carbon regulations today could in the future adopt CO₂ pricing or other carbon regulations, resulting in an uneven playing ﬁeld if “carbon leakage” is not adequately addressed (for example resulting in reduced competitiveness of exports). Moreover, the surging climate agenda may promote the use of concrete substitutes for construction as less carbon intensive. The Group closely monitors relevant regulatory developments and takes proactive measures to mitigate potential negative consequences. A scenario-modelling approach has been adopted for the examination of possible outcomes (transitional risks) and the identiﬁcation of appropriate roadmaps of mitigating actions MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT Kamari cement plant, Greece 75 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP for the safeguarding of the Group’s business resilience. Such measures include the reduction of the amount of clinker used in the production of cement, the use of alternative fuels, energy efficiency measures, the development of new products (including low-carbon clinker), and continuous innovation across the value chain. Indeed, the Group is engaging in research collaboration with the scientiﬁc community on less carbon-intensive cements and concretes (e.g. using cementitious materials and chemical additives) to develop and promote the use of new “green” concretes and create a level playing ﬁeld versus other building materials. • Industry cyclicality The building materials industry is dependent on the level of activity in the construction sector, which tends to be cyclical and dependent on various factors, including, but not limited to, the level of infrastructure spending, the demand for private and commercial real estate, mortgage lending, local economic activity, inﬂation, and interest rates. The Group’s business, operational results, or ﬁnancial condition could be adversely affected by a continued deterioration of the economic outlook or cyclical weakness in the construction industry on a global scale or in a signiﬁcant market in which it operates. • Market conditions The Group operates both in developed markets, like the USA and EU markets, as well as in emerging markets, such as Egypt, Turkey and Brazil. Any future deterioration in the global economic environment, or in any particular market, that contributes signiﬁcantly to the Group’s revenues and proﬁtability could have a material adverse effect on the construction sector, and consequently, on the Group’s business, operational results and ﬁnancial condition. • The concentration of a large proportion of the Group’s business, operations, and assets in the United States A large proportion of the Group’s business, operations, and assets is concentrated in the United States, in particular in Virginia, Florida, North and South Carolina, and New Jersey, and the Group’s operational results are dependent on the Group’s performance in the United States. Any decrease in cement consumption, building activity, or public spending on infrastructure in any of the US markets in which the Group operates, or a combination of the above, or any adverse change in logistics or freight costs, can have an adverse effect on the Group’s operating performance, business and proﬁtability. • Political and economic uncertainty The Group operates and may seek new opportunities in emerging markets with differing and, at times, volatile economic, social and political conditions. These conditions could include political unrest, civil disturbance, currency devaluation, capital controls and other forms of instability and may result in sudden changes to the operating and regulatory environment. Changes in these conditions may adversely affect the Group’s business, operational results, ﬁnancial performance and/or prospects. The annual budgeting and strategic review process, along with the regular monitoring of ﬁnancial results and forecasts, helps track political and economic events that may create uncertainties regarding ﬁnancial performance. Where political tensions are heightened, mitigation measures are in place to provide maximum protection of TITAN’s people and assets. • Global systemic disruption including COVID-19 pandemic risk Global-level disruptions can affect the Group’s operations in diverse and largely unpredictable ways but have a common thread: they would impact almost all our BUs/areas of operation (vs. more localized impacts). Such events could have a multitude of sources, for example: – Climate, e.g. extreme weather events, environmental disasters; – Societal, e.g. pandemics causing loss of demand due to economic downturn and loss of production due to health crisis (including COVID-19), crises of essential resources (food, water); – Large scale conﬂicts, e.g. interstate conﬂicts, trade wars causing disruptions in supply chains; – Global data infrastructure, e.g. nationwide cyberattacks, global information and communication infrastructure compromises disrupting global and/or regional ﬁnancial and trade systems. To anticipate and mitigate the effects of such globally relevant macro disruptions, the Group is engaging in risk assessments, scenario evaluation, and contingency planning at strategic, operational, and people (health and safety) levels. In addition, disaster-control protocols are continuously updated in order to mitigate the effects of health and safety-related crises, and ﬁnancial resilience measures are taken so as to bolster the Group’s balance sheet and insurance coverage. On a strategic level, the Group’s geographical diversiﬁcation can provide a high degree of resilience against the effects of more regional disruptions. In 2021, similar to the previous year, a particular focus on the potential risk assessment of COVID-19 (SARS-CoV-2) continued to be placed, given the ongoing prevalence of the global pandemic, focusing on the potential effects of the pandemic in dimensions such as the health and wellbeing of personnel, disruptions in production capacity of our assets, the drop of demand for the Group’s products in particular markets and supply chain disruptions affecting the local and international ﬂows of materials and people. All the measures that successfully addressed the COVID-19 related risks since early 2020, such as COVID-speciﬁc workplace health protocols and policies, effective production and supply chain processes, safeguarding of critical supplies, and dedicated reporting to enhance the ability to detect potential impacts in our markets, were fully applied throughout the year and adjusted where needed, following the pandemic evolution in each area of the Group’s operations. Financial risks The Group, due to the nature of its business and its geographical positioning, is exposed to ﬁnancial risks associated with foreign currency, interest rates, liquidity, and leverage, as well as counterparties. Financial risks are managed by Group Finance and Treasury. The Group does not engage in speculative transactions or transactions which are not related to its commercial and business activities. • Foreign currency risks Group exposure in foreign currency derives from existing or expected cash ﬂows and from acquisitions and/or investments denominated in currencies other than the euro. The Group’s net foreign currency exposure mainly arises from USD, EGP, RSD, LEK, GBP, BRL, and TRY. 76 Natural hedges (equity invested in long-term ﬁxed assets and borrowings in the same currency as the activities that are being ﬁnanced), currency swaps, and forward foreign currency contracts are used to manage currency exposures. • Interest rate risks The Group’s exposure to interest rate changes and increased borrowing costs are managed through employing a mix of ﬁxed- and ﬂoating-rate debt and interest rate derivatives, where appropriate. The ratio of ﬁxed to ﬂoating rates of the Group’s borrowings is decided on the basis of market conditions, Group strategy, and ﬁnancing requirements. As at 31 December 2021, the Group’s ratio of ﬁxed to ﬂoating interest rates stood at 88%/12% (31 December 2020: 93%/7%). • Liquidity and leverage risks In order to manage liquidity risks and to ensure the fulﬁlment of its ﬁnancial obligations, the Group maintains sufficient cash and other liquid assets, as well as extensive committed credit lines with several international banks, which complement its operating cash ﬂows. The Group’s ﬁnancial position allows it to have access to the international ﬁnancial markets and raise needed funds. • Counterparty risks Counterparty risk relating to ﬁnancial institutions’ inability to meet their obligations towards the Group deriving from placements, investments, and derivatives, is mitigated by pre- set limits on the degree of exposure to each individual ﬁnancial institution as well as by utilizing the collateral mechanism of credit support agreements (ISDA CSA Agreement). As at 31 December 2021, the majority of Group liquidity was held with investment-grade ﬁnancial institutions with pre-agreed credit support agreements. The Group is also exposed to counterparty risks relating to customer receivables. Customer receivables primarily derive from a large, widespread customer base. The ﬁnancial status of customers is constantly monitored at the business unit level and, where it is deemed necessary, additional security is requested to cover credit exposure. As at 31 December 2021, all outstanding doubtful receivables were adequately covered by relevant provisions. Environmental, Social and Governance (ESG) Risks • Health and safety Cement production and the operation of quarries and ready-mix facilities have inherent safety risks which could be inﬂuenced by factors outside the Group’s control. Ensuring health and safety and preventing accidents at work is a top priority for TITAN. Excellence in the area of health and safety is embedded in all TITAN operations and activities. The Group has implemented detailed policies and procedures promoting Health and Safety, including the coverage by an adequate number of safety engineers in all production units. Particular emphasis is placed on training and raising safety awareness and on the strict application of safety systems and processes. TITAN’s Group Health and Safety Policy mandates assessment of all incidents, proactive planning, the setting of speciﬁc targets, safety training, and the monitoring of progress. Health monitoring of employees is performed regularly. In parallel with all the other preventive measures, TITAN’s production and construction sites are regularly audited by the Group’s safety specialists. • Risks related to the environment The Group’s operations are subject to extensive environmental and safety laws and regulations in the USA, the EU, and elsewhere, as interpreted by the relevant authorized agencies and judicial authorities. These may impose increasingly stringent obligations and restrictions regarding, among other things, land use, remediation, air emissions, waste treatment, water use, and occupational and community health and safety. The costs of complying with these laws and regulations are likely to increase over time. The Group is in compliance with all environmental regulations and conditions in all countries where it operates. With a view to continuously managing the environmental impact of its operations, TITAN applies in all its plants management systems to monitor and report their environmental impact. The Group’s Environment Policy and environmental management provide targets for the reduction of air emissions, the protection of biodiversity, water and waste management, and quarry rehabilitation. • Human Resources, Diversity and Inclusion Cement companies, including ΤΙΤΑΝ face a multitude of potential risks related to their human resources and talent management. Existing processes to recruit, develop and retain talented individuals and promote their mobility may not be sufficient, thus potentially giving rise to risks of employee and management attrition, difficulties in succession planning, and an inadequate pipeline of future talent, potentially impeding the continued realization of high operational performance and future growth. Moreover, success in enforcing its Human Rights and Diversity and Inclusion policies is increasingly crucial in determining how the Group is perceived by key stakeholders, such as current and prospective employees, consumers, and investors. Greater diversity in the Group’s human capital increases the likelihood of innovation that contributes to business growth, and higher degrees of inclusion foster better employee engagement, productivity, and company loyalty, resulting in higher talent retention rates and overall employee engagement. ΤΙΤΑΝ is actively pursuing a rich agenda of actions to develop its talent management, including the updating and diffusion of its relevant HR policies (such as its Human Rights and Diversity and Inclusion policies) and people development processes. Relevant measures pursued include employee surveys, focus groups for feedback, training and capability-building programs, adoption of Diversity and Inclusion global best practices, provision of ubiquitous access to the TITAN Group reporting platform EthicsPoint®, and the fostering of a continuous dialogue on industrial relations with all relevant stakeholders. • Regulatory compliance risk The Group is subject to many local and international laws and regulations, including those related to competition law, corruption, and fraud, across many jurisdictions of operation and is therefore exposed to changes to those laws and MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 77 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP regulations and to the outcome of investigations conducted by governmental, international or other regulatory authorities. Potential breaches of local and international laws and regulations in the areas of competition law, corruption, and fraud, among others, could result in the imposition of signiﬁcant ﬁnes and/ or sanctions for non-compliance, and may inﬂict reputational damage. Compliance risks are proactively addressed at Group level through the TITAN Group Compliance Program, an integrated system of relevant activities, mechanisms and controls, aiming to provide adequate assurance that compliance risks are timely identiﬁed, properly assessed and effectively mitigated. The Compliance Program reinforces compliance culture, ensures adherence to compliance requirements, and fosters ethical behaviour. Moreover, all operations are continuously monitored at local and Group level by the Group Legal and Group Internal Audit, Risk and Compliance departments. Also, relevant reports provided by experts and independent organizations such as Transparency International, are taken in account. The set of Code of Conduct and Group Policies, applicable to all TITAN Group operations, cover all strategic areas and provide guidelines to employees and external business collaborators for compliance with the applicable internal and statutory rules. Such Group Policies include but are not limited to Anti-Bribery and Corruption, Conﬂict of Interest, Competition Law, Sanctions, Corporate Social Responsibility, Whistleblowing, Environmental and Climate mitigation, Protection of Personal Data, Human Rights, Occupational Health and Safety. Regular training of employees is conducted to ensure that the Group’s Code of Conduct and relevant Group Policies are effectively adhered to. All employees also have free and unrestricted access to the Group Policies, which have been uploaded on the Group Intranet and on our website (https://www.titan-cement.com/about-us/ corporate-governance/group-policies). Operational Risks • Production cost (including raw materials and energy) Thermal and electrical energy and fuel costs, freight rates or other transportation costs, and the cost of raw materials constitute the most important elements of the Group’s cost base. Increases or signiﬁcant ﬂuctuations in energy and fuel costs, freight rates, or other transportation costs could adversely affect the Group’s operational results, business, and ﬁnancial condition, especially if it is unable to pass along higher input costs to its customers. In 2021 the costs of energy (thermal and electrical) increased signiﬁcantly, especially in Europe, due to a variety of factors, especially in the second half of the year. Freight rates, which are responsible for a signiﬁcant part of the Group's logistics cost, also increased substantially. A speciﬁc review of the measures available to the Group for mitigating such cost increases was performed at regional level and at the Group Executive Committee and an appropriate set of actions (including hedging instruments) was put in place. In addition, in order to reduce costs and also curtail its environmental footprint, the Group is investing in low energy-requirement equipment and in energy efficiency. Ensuring access to the required quality and quantity of raw materials at competitive cost is a constant priority. Care is taken to secure the adequacy of the supply of raw materials during the facilities’ entire lifetime. The Group is investing in the use of alternative raw materials in order to gradually reduce its dependence on natural raw materials. • Risks arising from various risks of business interruption, including as a result of natural disasters Natural disasters such as earthquakes, hurricanes, storm surges, ﬂooding, wildﬁres may at any time disrupt our asset base and production and/or distribution capacity, etc. There is also a risk of an increase in the frequency of extreme natural events, potentially as a result of climate change. With regards to the mitigation of the effects of possible physical impacts on the Group’s assets from extreme natural events, the company is implementing a set of proactive protective measures for its assets and developing continuously updated emergency plans. With a view to protect its people and its operations, TITAN also invests systematically in equipment and systems to prevent or mitigate the effects or ﬂooding, ﬁre, hurricanes, etc. The Group also ensures adequate insurance policies against physical damage or temporary loss of business, as well as the ready availability of sufficient liquidity to absorb any potential impacts. • Cybersecurity Risks Cyberattacks may compromise the Group’s IT (Information Technology) and OT (Operations Technology) systems, data, and operations. There is a variety of potential threat actors (from opportunistic hackers to full-scale foreign government sponsored shadow organizations), with a diverse level of motivation, sophistication of attack systems, skills, and resources. Attacks could range from incidental in a minor location or domain, to a plant-speciﬁc event, company-wide attacks and even attacks affecting the broader industry and its external partners (suppliers, banks, customers). Loss or corruption or leakage of data may be crucial for: – sales, purchases, or ﬁnancial transactions (incl. banking fraud) – conﬁdentiality and GDPR-related commitments – operations (e.g., plant operational data used by control systems) Kosjeric cement plant, Serbia 78 IT systems’ breakdown or corruption could require lengthy remediation action, while OT systems breakdown or corruption could cause operational disruption in our plants and loss of production. The Group is taking a variety of measures to address such risks, including the analytical understanding of such threats and the creation of detailed mitigation plans, the development of cybersecurity policies and procedures (including the Group Information Security Policy), the increase of underlying security of critical IT and OT assets, the development of operational recovery plans, and the implementation of monitoring and reporting protocols on identiﬁed potential risks. • Supply Chain Disruption The integrity and proﬁtability of the Group’s production and customer-facing operations depend on its ability to safeguard critical resources for the uninterrupted manufacturing and delivery of its products. Scarcity of natural resources, such as water and aggregates reserves, could have a materially adverse effect on the Group’s costs and operational results. Additionally, should existing suppliers cease operations or reduce their production of key materials and production inputs, sourcing costs for the Group could increase signiﬁcantly or necessitate the search for alternatives. To mitigate such risks, the Group constantly evaluates its supply chain resilience, develops strategic options for the provision of its most critical supplies, stocks critical spare parts which in case of failure may result in long stoppages and seeks to secure production inputs through short and long-term contracts to ensure the necessary quantity, quality, and availability of required products. It also strives to secure long-term raw material reserves for its most critical production inputs. Such measures to create sourcing resilience were reviewed in detail during 2021, given the ongoing global supply chain disruptions. Finally, by deploying a scenario-logic in its planning processes, the Group is proactively developing ﬂexible and resilient sourcing strategies to withstand possible variability in the supply markets. MANAGEMENT REPORT CORPORATE GOVERNANCE AND RISK MANAGEMENT 79 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 80 Rehabilitated quarry, USA 80 81 MANAGEMENT REPORT esg performance review An overview of our performance on the environmental, social and governance pillars. 82 As presented in pages 20-21, TITAN has set ambitious Environmental, Social and Governance (ESG) targets for 2025 and beyond, underscoring its enduring commitment to sustainability and value creation for all. They focus on four pillars: Decarbonization and digitalization, growth-enabling work environment, positive local impact, and responsible sourcing, all underpinned by good governance, transparency and business ethics. In the ESG performance review section of the Management report, we provide a detailed overview of our annual performance and progress towards meeting our ESG targets. For each of the issues that have been identiﬁed as material for TITAN and its stakeholders, we present the foundations that we have built on and describe our management approach to addressing them, highlighting important achievements recorded throughout the year (e.g. new policies, initiatives, programs and investments). Focus area: Decarbonization and digitalization Material issue: Future-ready business model in a carbon- neutral world TITAN is committed to the COP21 Paris Agreement goal of keeping the increase in global average temperature to well below 2°C, and preferably to 1.5°C above pre-industrial levels, and to the UN Sustainable Development Goals 2030. The Group also supports the European Green Deal vision of carbon neutrality by 2050 and endorses the Global Cement and Concrete Association (GCCA) 2050 Climate Ambition, the cement industry’s joint effort towards carbon neutrality. Furthermore, TITAN Group has signed the “Business Ambition for 1.5°C” Commitment, a global campaign led by the Science Based Targets initiative (SBTi), joining a number of leading companies worldwide that are committed to keeping global warming to 1.5°C and reaching net- zero emissions by 2050. In 2021, the GCCA launched “Concrete Future”, the industry roadmap to net-zero concrete that will guide all GCCA members through their decarbonization process, a journey that has already started at TITAN with ambitious, science-based targets and concrete actions across all our regions and operations. The Group aspires to reduce its carbon emissions by increasing the use of alternative fuels, accelerating its efforts in energy efficiency, developing low-carbon products, and adopting innovative technologies and solutions. Through the participation in European and international consortia, as well as through collaborations in R&D projects, TITAN will continue to develop low-carbon cementitious products and pilot carbon-capture and utilization technologies in its plants, actively contributing to the industry’s ambition for a carbon-neutral future. Validation of TITAN’s CO₂ emissions reduction targets by the Science Based Targets initiative (SBTi) TITAN Group was among the ﬁrst cement companies worldwide to have its CO₂ emissions reduction targets validated by the Science Based Targets initiative (SBTi). Using the guidance and resources provided by SBTi, we developed the reduction targets in line with SBTi rules and submitted them for validation in mid-2021. Following a thorough procedure, the targets, covering greenhouse gas emissions from TITAN’s operations (Scopes 1 and 2), were validated as consistent with reductions required to keep global warming to well below 2°C, in accordance with the goals of the Paris Agreement. The Group is aiming to: • Reduce Scope 1 GHG (gross) emissions by 20.7% per tonne of cementitious product by 2030 from a 2020 base year. This target is in alignment with the 35% CO₂ reduction target on net emissions by 2030 from a 1990 base year, announced by TITAN in March 2021. • Reduce Scope 2 GHG emissions by 42.4% per tonne of cementitious product within the same timeframe. This target is in alignment with the 45% reduction target by 2030 from a 2020 base year, announced by TITAN in March 2021. Note: The target boundary includes biogenic emissions and removals associated with the use of bioenergy. The SBTi is a partnership between the Carbon Disclosure Project (CDP), the United Nations Global Compact, the World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). It independently assesses and validates corporate emissions reduction targets against the latest climate science. In addition, TITAN has committed to drive down the CO₂ footprint of its operations and products, aspiring to deliver society with carbon-neutral concrete by 2050, while monitoring and independently verifying its supply chain (Scope 3) emissions. TITAN’s Scope 1 CO₂ emissions performance In 2021, the Group improved further its net Scope 1 speciﬁc emissions by almost 20kgCO₂ per tonne of cementitious product to 654.2kgCO₂ per tonne of cementitious product, or else a 16.0% reduction compared to 1990 levels. The Group remains determined to address the climate change challenge and has committed to achieve a level of 500kg CO₂ per tonne of cementitious product by 2030 and a reduction of 35.0% since 1990. Alternative fuels (Co-processing) The increased use of lower-carbon fuels that replace non- renewable fossil fuels is a key lever towards achieving TITAN’s decarbonization targets. Co-processing contributes to the conservation of natural resources, the reduction of CO₂ emissions, and the cement industry's long-term competitiveness while it also provides a low-cost circular-economy solution to society. The Group’s alternative fuel thermal substitution rate reached 15.5% in 2021, an increase of ca. 19.0% since last year. Biomass use also increased, reaching a thermal substitution rate of 4.8%. Dried sewage sludge, reﬁnery sludge, tires, solid recovered fuel/ refuse derived fuel (SRF/RDF) and agricultural waste were used to substitute conventional solid fuels in several of the Group’s plants in 2021. The increase in the use of alternative fuels has been the result of (a) successful permitting, (b) continuous and rigorous sourcing efforts for new alternative fuels in the local and international markets, and (c) investments across several TITAN cement plants in alternative fuel processing facilities and the plants’ feeding, storage and combustion infrastructure of ca. €20 million. ESG performance overview MANAGEMENT REPORT ESG PERFORMANCE REVIEW 83 More speciﬁcally, a new state-of-the-art production facility for alternative fuels went into operation in Pennsuco cement plant, Florida, during the ﬁrst quarter of 2021, thus introducing high-quality RDF as a new fuel type for co-processing in the kiln. New installations or upgrades to the existing infrastructure for the production of alternative fuels were also completed in the cement plants of Zlatna Panega plant, Bulgaria, and Usje, North Macedonia, allowing both plants to reach record thermal- substitution levels and contributing to local waste-management efforts. The feeding installation of the Thessaloniki plant, Greece, was also upgraded, resulting in signiﬁcant improvements in the plant’s consumption of alternative fuels. TITAN continues to pursue opportunities to increase and optimize the use of low-carbon fuels in the cement-production process, with a steadfast commitment to reducing the environmental footprint of the Group’s plants. One of the key investments towards this goal is a new €25 million pre-calciner unit in Kamari plant, in Greece. Its installation started in 2021 and it is expected to be in full operation in 2023. Additional investments of ca. €14 million were approved during 2021, which will further improve the storage, handling and feeding infrastructure of Zlatna plant in Bulgaria, Beni Suef plant in Egypt and Thessaloniki plant in Greece. Fully aligned with its sustainability ambitions and commitment to the circular economy, TITAN is also diversifying into the waste management sector. A notable example is the participation in the public tenders (PPPs) for mechanical and biological waste treatment (MBT) plants in Greece, in a joint venture with TERNA Energy. MBT plants can maximize recycling, minimize landﬁlling and secure the availability of alternative fuels, providing a solution to the critical environmental issue of municipal solid waste (MSW). Low carbon products The Group further reduced the carbon footprint of its products by shifting to lower-carbon cements in the USA, Greece, Egypt and North Macedonia. In 2021, we made further progress in the reduction of our clinker-to-cement ratio, achieving a decrease of 0.7 percentage points (81.7% vs. 82.4% in 2020). Meanwhile, since September, approximately half of Titan America’s cement output consists of the lower-carbon Type IL cement. Its Pennsuco plant in Florida is now the largest US producer of Type IL cement, which has approximately 15% lower carbon emissions than Type I or Type II cement. In Greece, the Kamari plant further expanded its export product portfolio, including the less carbon-intensive Type IL, in response to US market needs for sustainable construction. Moreover, the Group’s plants in Greece – Kamari, Thessaloniki and Patras – started to produce a new Portland-composite cement (CEM II/B-M (P-LL) 42.5N) with an improved carbon footprint to cover both the domestic market and exports to other European countries. The Alexandria and Beni Suef plants in Egypt introduced a Portland-pozzolanic cement (CEM II/A-P 42.5N), with lower embodied CO₂ than the local industry benchmark of Ordinary Portland Cement (OPC). The Usje plant in North Macedonia, in line with its commitment for continuous improvement in the ﬁeld of environmental protection and sustainable development by reducing waste, introduced two new pozzolanic cements (CEM IV/B (V-P) 32.5N and CEM IV/B (V-P) 42.5N), which have a lower clinker content and use more high- quality ﬂy ash and natural pozzolana. Thermal energy efficiency Energy efficiency, the conscious use of raw materials and fossil fuels and their replacement with alternative ones, and the implementation of efficient waste management systems are proven means of adding value throughout the value chain as well as providing waste management solutions at a local level. TITAN Group thoroughly monitors energy consumption and efficiency in order to reduce its environmental footprint and curtail costs. As energy management and resource efficiency are closely connected to the sector’s decarbonization roadmap, the Group is investing in low energy demand equipment to improve energy efficiency. In a similar way, the frequent inspections of equipment and timely maintenance by plant teams, and the replacement or installation of new energy-efficient equipment (e.g., grate coolers and 5-stage preheaters with a pre-calciner and new burners), as well as careful selection of fuels, use of mineralizers and process optimization, helped sustain the Group’s strong performance in thermal energy consumption. In 2021, speciﬁc heat consumption (SHC) remained at almost the same level as in 2020. Climate change mitigation indicators 2021 2020 Group level (cement operations) Speciﬁc net Scope 1 CO₂ emissions (kgCO₂/t cementitious product) 654.2 674.0 Alternative fuel thermal substitution rate (%) 15.5 13.1 Clinker-to-cement ratio (%) 81.7 82.4 Speciﬁc heat consumption (kcal/kg clinker) 839.5 834.9 Scope 2 CO₂ emissions performance Regarding Scope 2 CO₂ emissions, TITAN Group is exploring the different options available to realize this target. Sourcing renewable energy from current or potential suppliers, installing renewable energy facilities like wind or solar farms at or near our plants and quarries or maximizing thermal energy retrieval using waste heat recovery systems are options that TITAN Group is considering as possible solutions. In 2021, Scope 2 speciﬁc emissions were reduced by 15.6%, bringing them to 51.5kg CO₂ per tonne of cementitious product. As part of our overall commitment to transparency, an external auditor veriﬁed our Scope 2 emissions. In recent years, we achieved a reduction in electrical consumption through the installation of advanced equipment, like low-energy vertical roller mills, roller presses and dynamic separators, or motors with inverters as well as the replacement of electrostatic precipitators with the lower energy-consuming bag ﬁlters. In 2021, INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 84 the Zlatna Panega plant in Bulgaria ﬁnalized and commissioned the upgraded raw meal silo and raw meal transportation system, which resulted in a 10% reduction in electrical energy consumption for clinker production. In 2021, speciﬁc electrical energy consumption slightly increased, reaching 115.0kWh per tonne of cement compared to 113.0kWh per tonne of cement in 2020. Scope 3 CO₂ emissions performance Monitoring our supply chain (Scope 3) CO₂ emissions is critical to achieving TITAN’s long-term ambition for carbon-neutral concrete by 2050. In mid-2021, after two pilot tests in Greece and Serbia, the Group ran a full-scale exercise covering 13 integrated and 2 grinding cement plants to measure Scope 3 emissions. Our analysis covered 6 of the 15 Scope 3 emissions categories. The selected categories, namely purchased goods and services, fuel and energy-related activities, upstream transportation and distribution, business travel, employee commuting and downstream transportation and distribution, are considered relevant to cement activities according to the GCCA analysis, with only 4 of them being mandatory. Emissions related to downstream transportation and distribution were independently veriﬁed and disclosed for the ﬁrst time in our second CDP 2021 report. ERM CVS reviewed our methodology to ensure that it is aligned with the GCCA guidance (Cement Sector Scope 3 GHG Accounting and Reporting Guidance) as well as the GHG protocol. In addition, ERM CVS veriﬁed our Scope 3 emissions, in all selected categories, in 2021. Scope 3 speciﬁc emissions were 103.4kg CO₂ per tonne of cementitious product, representing about 12.2% of the total GHG emissions. Fuel-related activities are the main contributor, accounting for more than 45.0% of the total Scope 3 emissions at Group level. Purchased goods and services is the second most important factor, contributing to about 25.0% of the total, while downstream transportation and distribution is the third most important category, at about 21.0%. Although Scope 3 emissions are affected by the speciﬁc operating conditions of each facility, such as the source of raw materials and fuels, product mix and market fragmentation, transportation distance, transportation means (e.g. trucks, trains, vessels, etc.), the analysis of the data showed that the above three categories are the main contributing factors for the majority of our facilities. 2021 emissions will serve as a baseline and help TITAN identify the major sources of emissions of its supply chain. The Group will also start encouraging its suppliers towards making a net-zero commitment. TITAN Group is continuously reﬁning its Scope 3 reporting approach, identifying gaps and exploring alternative ways to increase accuracy while establishing the required management systems needed in consultation with all business units. Decarbonization roadmap until 2030 In parallel with the validation of the Group’s CO₂ emission targets by the Science Based Targets initiative (SBTi) in July 2021, a thorough internal exercise was initiated in order to establish a detailed Scope1 decarbonization roadmap until 2030, covering all traditional reduction levers: 1. Reducing clinker content in the ﬁnal product (Clinker-to- cement ratio) 2. Increasing the thermal substitution rate of conventional fossil fuels by alternative fuels 3. Reducing speciﬁc heat consumption through process optimization and improvements in energy efficiency A speciﬁc methodology developed in-house was applied to all business units (excl. Brazil), regardless of the existence of local carbon pricing mechanisms. Participation in this process was universal and cross-functional; senior and middle-management from commercial and technical departments across the Group worked on the project under the guidance and support of the Group’s Corporate Center. The outcome conﬁrms TITAN’s ability to achieve its published and validated by SBTi CO₂ targets. A detailed list of over 90 actions and projects has been compiled, all of which provide signiﬁcant cost savings, business-growth opportunities and decarbonization potential. Total capital expenditure is ca. €150 million and relatively evenly distributed throughout the decade until the end of 2030. Material issue: Innovation with emphasis on digitalization and decarbonization TITAN continued to invest in research, development and innovation activities in 2021, covering the entire value chain of manufacturing and distributing cement, concrete and cement- based products, with a focus on decarbonization, digitalization and competitiveness. Innovation with emphasis on decarbonization In 2021, TITAN made progress in innovation to address climate change, both in terms of conventional levers (thermal energy efficiency, fossil fuel substitution, reduction of clinker-to-cement ratio), as well as through novel approaches, with an emphasis on new, lower-CO₂ cementitious products, carbon-capture utilization and sequestration, and hydrogen technologies. We implemented new methods developed in-house for the rapid and accurate evaluation of materials suitable for use in cement and concrete production with a minimal or zero-carbon footprint, including by-products and wastes. We proceeded with the successful thermal activation of locally available clay materials on an industrial scale, achieving product performance at par with conventional cement with up to 30% lower CO₂ emissions. We remain highly optimistic that the activated materials will be part of our sustainable low-carbon solutions, enabling the transition to the decarbonization of cement and concrete in many of our geographies. In Greece in particular, the Patras plant conducted some very successful industrial trials, including the calcination, in an old existing rotary kiln, of local ﬂysch, to produce calcined clay, a very active pozzolanic cement constituent. With regards to carbon capture, utilization and sequestration (CCUS), we remain actively engaged in collaborative research actions, including initiatives supported by institutions at both a local and regional level. Relevant research activities in 2021 included investigations and pilot preparations on advanced sorption materials, membranes, oxyfuel, solar calcination and CO₂ conversion through mineralization and green chemistry. At the same time, we are continuing to evaluate mature technologies for industrial deployment, in collaboration with our industrial and scientiﬁc partners for our cement operations in the EU and the USA. In addition, we are participating in the Open Innovation Challenge by the Global Cement and Concrete Association (GCCA), aiming to bring forth novel technological solutions on carbon capture, calcination, concrete recycling and MANAGEMENT REPORT ESG PERFORMANCE REVIEW 85 the use of captured CO₂ in construction, in collaboration with start-ups from across the globe. In this context, we continue to contribute to research activities of the GCCA Research Network, INNOVANDI, through our participation in the design and launch of new projects, as well as through industrial mentorships aiming to achieve new insights into calcined clays, recarbonation and efficient clinker calcination. In 2022, we look forward to obtaining ﬁrst-hand experience in novel carbon-capture and utilization technologies, by proceeding with two pilot demonstrations at our Kamari plant, in Greece, in collaboration with our partners in EU Horizon2020 projects RECODE and CARMOF. In 2021, we closely followed hydrogen use in cement clinker manufacturing, proceeding with industrial pilots in Greece and Bulgaria. Initial results showed that signiﬁcant reductions in direct CO₂ emissions are possible with hydrogen, especially when produced through renewable means (“green hydrogen”). We participated in the call for Important Projects of Common European Interest on Hydrogen Technologies and Systems (EU IPCEI on Hydrogen), with the project proposal entitled H2CEM. In H2CEM we envision to deploy and scale up the use of green hydrogen, targeting at least an 8% reduction in CO₂ emissions by 2030. With a view to developing innovative approaches to construction, we successfully completed laboratory and pilot trials involving 3D printing of cement and concrete structures in 2021. In collaboration with academic and industrial partners, we are proceeding with two full-scale printing demonstrations in 2022 while at the same time investigating business opportunities in the emerging market of 3D printed construction. During the year, we continued to develop and implement innovative digital tools, deployed with the use of state-of- the-art equipment with an emphasis on improving our direct carbon footprint. Focusing on our core cement manufacturing technologies, we realized digital pilots using novel systems for accurately monitoring high temperature processes within our kilns, maintaining product quality, as well as optimizing the use of fuels by minimizing ﬂuctuations. In addition, we implemented new online tools to continuously measure and control particle size during cement grinding operations, utilizing smart decision- making software, developed in-house to enhance product performance. Furthermore, in collaboration with our academic partners from the Aristotle University of Thessaloniki and the Centre for Research and Technology Hellas (CERTH), we launched the DIGIKILN project, co-funded by the Greek state. With DIGIKILN, we have begun to develop a mechanism-driven digital twin of the cement kiln, by coupling our long-term experience on clinker manufacturing with fundamental approaches and breakthrough computational methods. We developed energy consumption prediction models for cement mills at Kamari plant, following data science practices and adopting state-of-the-art machine learning (ML) technologies. By exploiting historical sensor measurements and operational data, the models offer high-accuracy predictions for energy consumption, supporting energy efficiency and decarbonization. The project was developed in cooperation with SYMBIOLABS, a spin-off company of ATHENA Research Center. Digitalization TITAN is a pioneer in the digital transformation in cement manufacturing. TITAN believes that investing in the digitalization of its operations will enable it to compete successfully in the new operating model that technology is creating for the building materials industry. TITAN established its Group Digital Center of Competence in 2020 to further strengthen the Group’s capabilities to develop and implement new digital solutions, with an emphasis on the manufacturing, supply chain and customer domains, built on the foundation of an integrated data platform and a new ﬂexible and agile working model for its operations. In the manufacturing domain, TITAN’s Group Digital Center of Competence continued the rollout of existing Artiﬁcial Intelligence-based Real Time Optimizer solutions (developed both in-house and with partners) for its cement manufacturing lines and developed new ones. The Real Time Optimizers allow for increased productivity, as well as reduced energy consumption. In 2021, the Group Digital Center of Competence installed Real Time Optimizers in plants in the USA, Greece, Brazil and Southeastern Europe. In addition, TITAN is rolling out a machine learning-based failure prediction system tailored to the operating environment of cement plants, increasing the plants’ reliability and reducing the cost of reactive maintenance. As of 2021, this system has been installed in plants in the USA, Egypt and Southeastern Europe. Finally, TITAN has fully incorporated advanced digital solutions based on BIM (Building Information Modelling) technology in its major internal infrastructure deployments (including plant upgrades, logistics terminals, etc.). TITAN continued the development of digital twins of the outbound supply chain network of its business units. The digital twin of the network enables the use of analytics for supply chain optimization. In addition, TITAN has invested in telematics solutions for its outbound truck ﬂeet in business units in the USA and Southeastern Europe. Finally, TITAN continued the rollout of its in-house, proprietary, cement spare-parts inventory optimization analytical methodology and as of 2021 has implemented it in its cement plants in Egypt and Greece. In the Customer Experience domain, TITAN is working on digitalizing the way the Group interacts with its customers to improve customer experience and create a more efficient INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Group Digital Center of Competence 86 commercial operating model. To that end, as of 2021, TITAN has deployed digital customer applications in business units in the USA and Europe. TITAN is supporting its digital transformation journey through internal and external capability building efforts (e.g., the Digital Academy established in Greece with an external training partner) and the development of an ecosystem of partners which includes start-ups, academic institutions, equipment and systems manufacturers, specialized advisers, etc. Resilience of IT infrastructure and cyberattacks The resilience of IT infrastructure is of high importance for the sustainability of the Group’s operations. Therefore, TITAN appointed a Group Information Security manager who reports to the Chief Information Officer and is responsible for the development of the organization’s information security strategy and program. Regional Information Security Managers report to the Group information Security Manager. TITAN’s Information Security framework, policies and the overall IT-related risk management are aligned with the requirements of the ISO 27001 standard. TITAN’s information security governance outcomes are: • Protection of information assets against cyber attacks • Value delivery through efficient utilization of security investments • Performance measurement through information security KPIs and self-assessment To strengthen the security and resilience of critical infrastructure against cyber-attacks, TITAN offers annually online interactive training to educate all end users, reduce vulnerabilities by enhancing existing proactive prevention capabilities and building new ones for rapid detection and response, constantly working towards the application of best practices and revising our business continuity plans. Furthermore, the Group has initiated a major IT project to implement a common ERP system across all Group entities. Focus area: Growth-enabling work environment Caring for and developing our employees is core to the purpose and values of TITAN and essential to ensuring a growth-enabling work environment. As such, we aim to cultivate an inclusive culture with equal opportunities for all our people to grow professionally within a safe and healthy work environment as part of our 2025 ESG commitments. Safeguarding our people and operations against COVID-19 was a priority in 2021 and, as a result, TITAN has managed to deal effectively with the waves of the ongoing pandemic. In close cooperation with medical experts, action plans were implemented at all sites to establish protective measures for people working on-site, both employees and contractors, and promote remote working, where possible. TITAN’s people strategy focuses on the three pillars of learning, talent, and organization, supported by a foundation of an engaging and inclusive work environment, fair and transparent reward management, and effective human resource management systems. The focus on learning encourages the development of upskilling and reskilling programs and strengthens leadership, functional as well as health and safety, decarbonization and digital skills across the Group. The focus on talent ensures the attraction, retention and development of the talent necessary to meet the strategic workforce needs of the company and the fulﬁllment of the career aspirations of employees. Finally, the focus on organization ensures that the structures, processes and workﬂows enable our talent to perform. Material issue: Safe and healthy working environment Response to COVID-19 TITAN responded to the pandemic through several measures, including increasing hygiene and sanitization standards, promoting social distancing, installing plexiglass panels, making mask use mandatory, offering PCR and rapid testing, and reducing or canceling travel and large meetings and events. In addition, medical and psychological support were provided by experts or through health care programs. More than 13 initiatives in 7 Group countries were implemented to mitigate the impact on our employees and business partners, and to provide humanitarian support to citizens in local communities. In 2021, we launched information campaigns on vaccination and encouraged our employees to get immunized. These campaigns were especially successful in our business units in Egypt and Turkey, where the share of vaccinated employees against COVID-19 exceeded 90%. In addition, we collaborated with local hospitals and NGOs and implemented initiatives to enable, accelerate and cover the cost of the vaccination programs for more than 1,500 employees and contractors in the USA, Egypt, Albania and North Macedonia. Health and Safety Guided by the Group Health and Safety policy, which envisages a work environment that ensures health and safety for employees, contractors and third parties, we are systematically strengthening our accident prevention and health promotion systems in all production and distribution operations. In this pursuit, the processes of health and safety certiﬁcation, site auditing and incident investigation play an important role in reducing workplace risks and improving safety behavior. In Europe, Turkey and Egypt, 100% of our cement plants and more than 83% of our combined ready-mix concrete and aggregates plants are now certiﬁed to the ISO 45001 Health and Safety Management System, which has replaced OHSAS 18001. In the USA, all TITAN activities conform to the requirements of the relevant OHS organizations. Group Health, Safety and Environment (HSE) audits on an annual basis all integrated cement plants and, occasionally, other selected facilities. Installations, behaviors and procedures are examined and detailed recommendations are made. These recommendations, together with the recommendations derived from the investigation of accidents and important near misses, are implemented by operations management. In 2021, more than 1,700 audits (internal and external) were conducted in our cement plants. While in 2020, COVID-related restrictions caused all Group HSE audits to be performed remotely (by streaming online video and audio from the sites to the remote auditors), the improved conditions in 2021 allowed the return to on-site auditing in most cases. MANAGEMENT REPORT ESG PERFORMANCE REVIEW 87 Lost Time Injuries Frequency (LTIFR) for our own personnel stood at 0.91 LTI per million hours worked. While this ﬁgure represents a slight increase relative to the 2020 LTIFR (0.57 LTIs per million hours worked), it remains consistent with the continuous improvement that began in 2017 (LTIFR 2.41) and has yielded an overall reduction of 62%. Contractor LTIFR increased slightly, from 1.46 to 1.55 LTIs per million hours worked. There were no fatalities. The average training hours in health and safety per person for both employees and contractors increased in 2021, despite the continuing difficulties posed by the pandemic. The effort to maintain safety awareness in relation to speciﬁc tasks and hazards continued in 2021 by targeting safe work at concrete-pouring sites , the safe unloading of silo trucks and safe driving. Safety at concrete-pouring and silo-truck unloading sites was a focus point in the Group HSE audits. Group HSE produced a detailed audit guide covering both the unloading silo truck and the receiving installation. This program will continue in 2022, as will Next Step in Safety, a multifaceted program for the prevention of serious incidents, which is already running in Europe, Turkey and Egypt. Refresher training in Root Cause Analysis, an important tool in incident investigation, will also be offered. Safe driving was also given signiﬁcant attention. In Greece, TITAN is implementing a program focusing on the condition of vehicles. Raw materials transportation trucks, concrete mixer trucks and concrete pumps are subjected (over and above legal requirements) to periodic controls at specialized workshops, in order to obtain or renew the Safety Pass stipulated by TITAN. In the US, TITAN is employing digital technology to improve the skills of concrete mixer drivers. Training on a digital Truck Driving Simulator is helping the drivers to avoid rollovers, while a Safe Driving system is coaching them to avoid unsafe behavior and detects rollover precursors in their driving style. Wellbeing initiatives TITAN’s legacy of caring for its people continues to evolve through our 2025 commitment to cultivate a safe and healthy work environment and implement initiatives addressing the physical, mental, social and ﬁnancial dimensions of wellbeing for our employees, in all countries. In October 2021, on World Mental Health Day, we launched a Mental Health campaign, aiming to raise awareness and promote good mental health across the Group. Addressing local needs, countries have provided a variety of programs to their employees, from cyber and live expert talks, smoking cessation programs, and nutritional support programs to virtual exercise programs. The campaign included useful resources, such as relevant articles, videos, and self-assessment questionnaires, and promoting TITAN Group’s consulting support service, TITAN EAP (Employee Assistance Program). For example, since 2019 TITAN Greece has established the program “Epilego”, which promotes self-care and wellbeing through numerous actions under three themes – nutrition, physical condition and balance. Typically, every year “Epilego” offers to all employees smoking cessation programs, nutritional support programs, virtual exercise programs and online and live expert talks. In 2021, the series of more than 15 online talks included topics such as Mindfulness, Self-Care: The Positive Psychology Way, Self- regulation and inner dialogue, Managing Stress, Understanding Depression, No Such Thing as a ‘Perfect Parent’, Resilience. Material issue: Diverse and inclusive workplace We are committed to creating an environment where all differences are valued and where everyone has the opportunity to ﬂourish and experience a sense of belonging. Following the identiﬁcation of equality, diversity and inclusion as material issues for 2020–2025, speciﬁc targets were set to increase female participation the company. These include a commitment to promote equal opportunities and inclusion, to increase by 20% the participation of women in senior roles, talent pools and new hires, and to achieve at least one-third representation of females on the Board of Directors. In order to monitor progress towards these objectives, diversity metrics were analyzed and reported. In addition, we continued the review and update of key people policies and process, including the Group’s Resourcing Framework, International Relocation Policy, People Management Framework and People Development Process, to ensure that they can positively inﬂuence and support inclusion and diversity across TITAN Group. Finally, recognizing that achieving our aspirations for diversity and inclusion in the work we do and the way we work is an on-going process and one that requires awareness, action, responsibility and accountability from everyone in our business, the Group Diversity, Equity and Inclusion Policy was launched in 2022. The policy sets out our principles, deﬁnitions, scope and approach to diversity and inclusion. The share of women in management increased to 17.6% in 2021 from 16.5% in 2020. Employment by ethnicity in the US, where employee race data is recorded, has broadly remained stable. Material issue: Continuous development of our people Upskilling and reskilling opportunities We invest in upskilling our people and building the required capabilities for our organization’s long-term growth. In 2021, as the COVID-19 restrictions continued, many of our employees worked remotely. Thus, efforts focused on digital training reaching all targeted audiences. The virtual learning environment we have been building for the past years through our Learning Management System enabled us to operate effectively in this unforeseen situation. 11,233 virtual training hours were recorded in 2021, corresponding to 214 courses. Total learning hours in health and safety, and digital increased by 38% and 251% respectively. In line with our strategic focus, we deﬁned and created a new Decarbonization training category in our Learning Management System, while enriching the Digitalization category. In addition, we developed e-learning courses to consolidate practical and advanced in-house knowledge. Cross-regional and cross-functional in-house authoring teams created these e-learning courses intended for cement professionals across the Group. These courses also aim to improve the operation of our cement plants, resulting in more sustainable use of natural resources, signiﬁcant fuel savings, and improved and consistent product performance. Some of our business units organized and ran trainings for a signiﬁcant percentage of their population. Titan America INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 88 recently went live with its new SAP ERP system, which is used by the operations, maintenance, quality, logistics, ﬁnance, procurement, and sales teams. Nearly 500 employees from across the business dedicated 5,600 hours to relevant training. This initiative trained those employees on how to perform their day-to-day work functions effectively with the new system. TITAN Greece launched an additional e-learning program on Health and Safety, addressed to 260 blue-collar employees. We continued to invest in an external learning platform to provide TITAN employees with vast choices in the areas they need to acquire knowledge and build skills. 97% of the available LinkedIn Learning licenses have been activated, with nearly 29,000 learning videos viewed by almost 980 employees. Our “Learning Bites” internal newsletter channels learners towards new technology trends, which are part of our digital transformation journey. Employee engagement and human resources management system Engaging its employees is a continuous process for TITAN Group, which incorporates feedback in structured and organized ways, via group-wide surveys, focus groups and local pulse surveys. In 2021, we implemented Group and country action plans that were developed to address the results of the 2019 Employee Engagement Survey. As a result, a number of initiatives were introduced, from more frequent employee communications on strategic priorities and a focus on employee health and wellbeing across TITAN, to local actions, such as the simpliﬁcation of work processes, focused development programs, and the enhancement of local communication tools and processes. Employment at TITAN Group, as of the end of the year, remained stable, with an increased share of women in employment (13.4% in 2021 vs. 12.4% in 2020). Overall, the Group employee turnover rate decreased (10.6% in 2021 vs. 11.4% in 2020). Turnover of female employees decreased from 10.4% in 2020 to 9.1% in 2021. In 2021, 3,250 employees (61% of our workforce) participated in annual performance reviews. Participating female employees were 597 that is 83% of the total female workforce, a ﬁgure similar to the equivalent one in 2020. We have capitalized on recent investments in human resources management systems (HRMS) to use data and effectively manage all key processes throughout the employee life cycle, from talent acquisition, to performance management, learning and development, career planning and reward management. TITAN’s HRMS data on recruitment, learning and performance are analyzed to provide insights and inform improvement efforts and investment decisions on future programs. In addition, performance data and individual development plans are used in the People Development Review process and Talent Spotlight sessions, both of which are integral parts of the Group’s Strategic Workforce Planning process. Furthermore, we have deﬁned TITAN’s Global Principles for Hybrid Work Models and outlined the key areas to incorporate locally. Business units, based on local needs, market practice and employee expectations have further elaborated and introduced local remote work practices. Focus area: Positive local impact Material issue: Environmental positive impact With a view to the continuous improvement of the environmental impact of the Group's operations all of TITAN’s business units monitor and report their environmental impact, while also setting targets for the reduction of air emissions, the protection of biodiversity, quarry rehabilitation, and water management and recycling. For almost 20 years, in line with our environmental policy, the Group has disclosed measurable qualitative and quantitative targets to monitor progress with respect to its environmental impact. The Group engages in a long-term process with experts and stakeholders, seeking meaningful ways to understand society’s needs and contribute to a net positive local impact for the communities in which it operates. The Group is implementing environmental management systems (EMS) across its operations, realizing solutions that best ﬁt local needs as well as international commitments. All Group cement plants have an ISO 14001 environmental management system, except those located in the USA, which have adopted a system that is aligned with local and federal regulatory requirements. Over the years, we have heavily invested in Best Available Techniques (BAT), reaching and sustaining a strong environmental performance that meets existing and potential new regulatory requirements, as well as our own targets, which are often more demanding. In recent years, TITAN Group ran an extensive investment program to install new or upgrade existing de-dusting equipment in the stacks of kiln lines. Electrostatic (ESP) ﬁlters were replaced either by bag ﬁlters or by hybrid ﬁlters (a combination of bag and ESP technology), with the latest example being the bag ﬁlter installed at Kosjeric cement plant in Serbia in 2021. Consequently, the main stacks are no longer the main dust sources and efforts are now underway to further reduce fugitive dust. On that front, we are covering conveyors and elevators in closed systems, reducing air leakages and spillage points, ensuring proper maintenance of the installation using vacuum cleaning, enclosing storage areas with natural wind barriers, using water spray for road wetting, and focusing on housekeeping as well as paving where feasible. The systematic monitoring of fugitive dust emissions safeguards the health of our employees and reduces the impact on nearby areas. The Group ensures the proper maintenance and optimal functioning of machinery and equipment and applies rigorous rules on the transport of materials within its plant sites and beyond. Combustion at high temperatures leads to the creation and emission of nitrogen oxides (ΝOx). Over the years, TITAN has invested heavily in technologies that reduce NOx emissions, like Selective Non-Catalytic Reduction (SNCR) systems and low NOx burners, as well as ﬂame reduction and secondary ﬁring, and will continue to follow this path in the future. The presence of sulfur (S) in raw materials is the primary cause of sulfur dioxide (SOx) emissions. At many of our Group plants, SOx emissions are negligible. Wherever there is a need, TITAN Group applies best practices to abate SOx emissions and ensure compliance with the limits stipulated in the environmental permits as well as speciﬁc conditions set by local authorities. Monitoring and reporting air emissions are part of the Group’s effort to mitigate its impact on the environment. In alignment with legal and sectoral requirements, TITAN monitors and reports dust, NOx, SOx, TOC, HCl, HF and NH₃, mostly through continuous emissions monitoring systems. Minor emissions like PCDD/PCDF and heavy metals are spot measured by accredited MANAGEMENT REPORT ESG PERFORMANCE REVIEW 89 independent laboratories at a frequency equal or higher than that mentioned in the relevant permits. In line with our commitments and permits, dust, NOx and SOx emissions, as well as CO₂, are covered by independent third-party veriﬁcation. Furthermore, air emission dispersion studies, which consider all local characteristics (atmospheric and geomorphological conditions) and are conducted in collaboration with local academics, ensure that the operation of plants does not have any negative impact on the air quality of the adjacent areas. In many regions in which the Group operates, air emission data are available through public platforms, with our cement plants in Greece, North Macedonia and Serbia facilitating such initiatives, while our cement plants in Egypt and Turkey are providing similar information to the local authorities. Group environmental performance in main air emissions is presented in the table below: Group level (cement operations) 2021 2020 Air emissions (g/t clinker) Speciﬁc dust emissions 16.6 19.3 Speciﬁc NOx emissions 1,263 1,282 Speciﬁc SOx emissions 245 253 Group performance in both NOx and SOx emissions remained at a level similar to that of 2020 and within the target set for 2025. Moreover, dust emissions were further reduced by 14.0%, and were also below the 2025 Group target. Protection of biodiversity and sustainable land stewardship are fundamental elements of our sustainability strategy. In order to mitigate the impacts of raw material extraction on biodiversity and ecosystems, the Group has developed standard practices for quarry rehabilitation and biodiversity management at sites of high biodiversity value, in line with the respective GCCA Guidelines. Relevant targets have been set for 2025, underscoring our commitment to contributing to the prosperity of our local communities and achieving positive local impact where possible. Following the results of the biodiversity risk assessment that was conducted in 2020 for all Group sites with the use of the Integrated Biodiversity Assessment Tool (IBAT, https://ibat- alliance.org/), further evaluation was made in 2021 for those sites that had been identiﬁed as in proximity to (or part of) areas of high biodiversity value. Two new such sites, namely the Drimos and Thisvi quarries, were identiﬁed in Greece, and a biodiversity study and a management plan will be developed for them by 2025, as presented in Table TITAN Group Quarry Sites with High Biodiversity Value of the ESG Statements. In 2021, TITAN continued to actively participate in the Biodiversity and Industry Platform that was launched in 2020 by CSR Europe. The platform is a cross-sectoral business-led initiative that aims to demonstrate how companies are driving the biodiversity agenda and to support them in the practical integration of biodiversity into decision-making processes. In its ﬁrst year of activities, the platform developed a structured framework, consisting of a ﬁve-step methodology, through which companies can assess their impact on biodiversity across their value chain, and follow a decision-making process involving stakeholder engagement to prioritize actions for biodiversity management. Our ongoing efforts to mitigate the local impacts of the raw material extraction process are reﬂected in the indicators presented in the following table, which also monitor our progress towards the respective ESG targets set for 2025. Local impact indicators 2021 2020 Active quarry sites with high biodiversity value (number) 12** 10 Active quarry sites with biodiversity management plans (number) 10 9 Active quarry sites with biodiversity management plans (percentage) 83% 90% Active quarry sites with quarry rehabilitation plans (percentage) 91% 91%* Disturbed quarry land areas that has been rehabilitated (percentage) 22.6% 23.6*% * Note: the quarries of Titan Cement Egypt (TCE) are no longer considered to be under full management control of TITAN due to changes in mining legislation in the country. Therefore, since 2021 all TCE quarries have been excluded from the baseline and the calculations of the respective local impact indicators. The 2020 ﬁgures have been adjusted accordingly where appropriate. ** Note: ﬁgure reﬂects the updated situation with the addition of the 2 new sites (under full management control of TITAN) that were identiﬁed in the 2020 Group biodiversity risk assessment as areas of high biodiversity value and for which the Group intends to develop a biodiversity management plan. The percentage of active quarry sites with quarry rehabilitation plans remained at the same level as last year. However, the rehabilitation plans for these remaining sites are scheduled to be completed in the next few years so as to meet the respective target by 2025. The percentage of land areas rehabilitated out of the total disturbed land was slightly reduced compared to last year. Despite the progress made with the rehabilitation activities at most of our Group Quarries, the opening of a big land area at one aggregates quarry in Titan America resulted in the deterioration of the respective indicator. The rehabilitation activities will however continue at a steady rate in the following years and it is expected that the respective ESG target for 2025 will be met. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Falco eleonorae. Courtesy of Hellenic Society for the Protection of Nature, ©Pavlos Andriopoulos 90 The number of active quarry sites with biodiversity management plans increased to 10, following the completion of the relevant plan at Agrinio quarry in Greece in 2021. The focus now is now on the two new sites identiﬁed for their high biodiversity value, namely the Thisvi and Drimos quarries. The goal is to develop BMPs for all these sites in line with the relevant 2025 target. Material issue: Social positive impact TITAN continued to engage with its stakeholders and contribute to the sustainability of the local communities in all areas where the Group has operations. TITAN promotes open dialogue and collaborative actions with stakeholders by implementing sustainability initiatives in all countries, as mandated by its target to have Community Engagement Plans (CEPs) aligned with material issues for stakeholders and UN SDGs 2030 at 100% of its key operations by 2025. In total, 142 initiatives were implemented in 2021 at 15 key operations (integrated cement plants and grinding plants) across 9 countries, with the engagement of 2,750 participants despite the difficulties caused by COVID-19 restrictions that impeded social interaction. Almost 2,000 participants were employees of TITAN, who acted as volunteers. In total more than 0.4 million people in the local and broader communities of our operations were direct and indirect beneﬁciaries of the CEPs, while the total cost for all our initiatives exceeded €1.3 million (30% of that amount was contributed in-kind). All 2021 initiatives were assessed to see whether they met an adequate or high level of alignment with the material issues important for both our stakeholders and our business activities at business unit level. Our analysis on the connection of material issues with our initiatives was based on the SASB Materiality Map methodology. We identiﬁed the Social Capital area as the most relevant material issue for our business units, as addressed by initiatives for community engagement, followed by Human Capital (speciﬁcally for the engagement and wellbeing of our employees). We found that the areas of Leadership and Governance, Business Model, Innovation, and Environment were also relevant, albeit in a smaller number of initiatives. Our initiatives towards the sustainability of our communities focused on supporting education (50 initiatives), promoting voluntary work (34), contributing to community infrastructure (34), improving skills for new jobs (31), and supporting our communities in crisis conditions (e.g. humanitarian relief due to COVID-19 pandemic, natural disasters such as wildﬁres, etc.). In relation to the level of business unit engagement with communities, more than 56% of the initiatives achieved active involvement of stakeholders, while 35% promoted good collaboration with participants from the communities (input of stakeholders in the decision-making to identify best solutions, agreement on win-win opportunities, and plan for joint implementation). We remain focused on strengthening our authentic and distinctive social engagement approach and enhancing our social positive impact. In Greece, the devastating wildﬁres of August 2021, amid an unprecedented heatwave, burned thousands of hectares of land and forest and destroyed homes and livelihoods. During the ﬁres, TITAN cooperated closely with the local authorities near our sites to make our vehicles and equipment available for the ﬁre-ﬁghting effort and to create ﬁre-protection zones. In the direct aftermath of the ﬁres, TITAN donated €0.5 million to forest ﬁre prevention and protection initiatives. Acting in tandem with TITAN, the Paul and Alexandra Canellopoulos Foundation committed another €0.5 million to initiatives that focus on the medium- and long-term response to the consequences of the wildﬁres. The funds are being distributed in consultation and collaboration with the competent authorities. Relevant initiatives in progress include the conversion of 50 cement silo trucks to water tanks and their donation to local authorities as well as the installation of open water reservoirs in depleted quarries for ﬁre-ﬁghting aerial means. As the crisis was evolving across Greece, TITAN cooperated closely with the local authorities in areas where it operates to offer mobile equipment to competent organizations ﬁghting wildﬁres and creating ﬁre- protection zones. In the USA, Titan America concentrated its efforts on the improvement of the sustainability of communities through partnerships. Roanoke plant partnered with local citizens groups to sponsor the scholarship for a local high school student and supported the local county’s livestock auction by sponsoring a collaborative food bank initiative with students to provide food to citizens in need in the community. In Bulgaria, we further promoted our internship program focusing on young people from the local community. Out of a total of 17 interns (11 females), 4 were hired, and another 8 continued their traineeships in the business unit. In Albania, North Macedonia, Kosovo, Serbia and Brazil, we enhanced our collaboration with the neighboring municipalities of our cement plants, by implementing several initiatives to support youth education with development programs tailored for local schools that boost learning opportunities and enhance job skills and employability while also empowering youth and fostering entrepreneurship. In Egypt and Turkey, we partnered with local universities to attract young talent. TITAN was also active in supporting blood donations in 2021, in cooperation with governmental authorities and local health centers, and succeeded in encouraging 579 employees and contractors in business units to voluntarily donate. In Greece we also reached an active pool of 646 potential bone marrow donors, with a track record of 4 donorships until 2021. In all countries, with Egypt and Albania serving as particularly good examples, TITAN’s business units were actively engaged in initiatives to improve local community infrastructure related to public schools and hospitals, as well as recreation and sports centers. MANAGEMENT REPORT ESG PERFORMANCE REVIEW Road Safety initiative, Antea cement plant, Albania 91 In 2021, our approach to community engagement was further enhanced through the introduction of a new framework to ensure that our efforts are aligned with TITAN’s principles and priorities across all business units. Using the ESG databank- ΤΙΤΑΝ's in-house information management system- as a tool, we ran a structured assessment of all initiatives and actions across business units in 2021 to ensure alignment with our material issues. Community Engagement Plans (CEPs) 2021 Number of initiatives and actions under the CEPs 142 Participants (TITAN employees, business partners, NGOs, local authorities, and people from communities) 2,750 TITAN volunteer-employees who were among participants 1,873 Beneﬁciaries from communities 447,000 Total amount of “social investment” (contribution in cash and in kind for the implementation of the initiatives under the CEPs) €1.3m Material issue: Economic positive impact TITAN recognizes the positive economic impact, both direct and indirect, of its operations on its local communities. The monitoring and reporting of “local spend” (calculated as the ratio of the spend on local suppliers to the spend on all suppliers in each country) according to TITAN standards and following the UNCTAD Guidance was ﬁrst introduced in 2019. The ongoing Group digital transformation process and the uniﬁcation of digital systems has enabled TITAN to track local spend of global activities accurately and efficiently. In 2021 average local spend accounted for 65.1% of total spend on a Group level, close to the level of 2020. TITAN’s business units seek to ensure that two-thirds of our total spend is directed to local suppliers and communities. This is achieved by implementing a number of projects, where local companies are selected for the supply of speciﬁc products and services. In addition to the positive impact on society, this process will help TITAN’s business units receive competitive products and services in a timely manner and thus limit risks from global supply chain disruptions. Focus area: Responsible sourcing Material issue: Resource efficiency, recycling and recovery, contributing to the circular economy TITAN Group is committed to the principles of the circular economy, taking actions to minimize, reuse, recycle or recover materials and energy in order to preserve natural resources, reduce CO₂ emissions and manage waste efficiently. Having recognized the circular economy as fundamental to the development of a more sustainable business model, the Group systematically adopts and applies good practices in order to minimize its footprint and ensure a sustainable future for coming generations. In 2021, we implemented circular economy programs and practices across all our activities, including the production of clinker, cement, concrete and concrete blocks and of aggregates for pavements and other applications. We have crucially reduced waste and minimized the need for primary raw materials. We eliminated landﬁlling of waste while contributing to the conservation of natural resources and mitigation of climate change. The Group continued its efforts to increase the use of alternative raw materials in clinker, cement and concrete production, designing and developing new low-carbon cement products to address the current and future needs of its customers. The use of alternative raw materials in the production of clinker and cement slightly increased in 2021 (6.6% of total consumption). ST Equipment & Technology LLC (STET), a wholly owned subsidiary of the TITAN Group based in Needham, MA, USA, explored the potential of using its patented separation technology to recover, process and reuse ﬂy ash stored in landﬁlls and impoundments. In 2021, STET began to generate high quality ﬂy ash product (ProAsh) from the ﬂy ash impoundment at Brunner Island, which can be used to make a low-carbon cement substitute. In Egypt, and after many years of research, in 2021 TITAN successfully began using bypass dust, a waste of the cement- making process, in road paving. Following several studies, and through a collaboration with a major local road-paving company, the use of bypass as a ﬁller in road paving was successfully demonstrated. Subsequently, and after securing the relevant environmental approval for this product, the bypass dust will be used for road paving. Not only does this usage reduce the landﬁlling of bypass dust, but it also substitutes the use of limestone and clay as a paving ﬁller. In 2021, around 50% of the produced bypass was successfully recycled as a road-ﬁlling material. Water management We seek to conserve the quantity and sustain the quality of water resources in all our facilities and neighboring areas, and to reduce the withdrawal and consumption of freshwater, by establishing recycling and promoting responsible and efficient practices for water usage and discharge. Effective water management inside and outside the premises of our sites is an important aspect of our environmental performance. Since 2010, we have developed and applied an Integrated Water Management System (IWMS) at all our operations to monitor and optimize water consumption and to disclose water data in a consistent way, according to the international practices and guidelines of the cement sector. A water risk assessment exercise was conducted with the use of Aqueduct (a tool developed by the World Resources Institute) in 2020 and the results were communicated to all business units this year. According to this assessment, 73% of the Group’s cement and cement grinding plant sites, 65% of its quarries for aggregates and industrial minerals, and 62% of its ready-mix concrete sites operate in water-stressed areas. As indicated also by the speciﬁc assessment of risks related to climate change that we made in 2021 in collaboration with recognized climate-risk experts, water stress poses the third highest physical risk (after coastal ﬂooding and drought) for the cement manufacturing facilities throughout TITAN’s global operations. In this respect, our next steps will involve the evaluation of local conditions at the sites operating in water-stressed areas, to identify related risks and opportunities and make the appropriate decisions to further enhance our practices for sustainable water management. Priority will be given to the cement plant sites, INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 92 which are the larger water users among Group activities, as presented in the Notes of Table 2.4 of the ESG Statements. In 2021, total water withdrawal and discharge quantities at Group level showed an increase of 5-6%, whereas the total water consumption increased by less than 2%. This increase is due to the higher production needs in most of the regions of our operations in 2021. On the contrary, the speciﬁc water consumption at the Group’s cement and grinding plants and their attached quarries showed a decrease of 5.7% to 245.7l/t cementitious product, well below the target set for 2025. Water recycled as a percentage of overall water demand declined slightly to 66.1% but is still on track to reach the respective target for 2025. Impact on natural resources: Water 2021 2020 Group level (all operations) Total water withdrawal, million m 3 43.2 41.3 Total water discharge, million m 3 31.9 30.2 Total water consumption, million m 3 11.3 11.1 Group level (cement operations) Speciﬁc water consumption, l/t cement 245.7 260.5 Percentage of water recycled over water demand 66.1% 67.2% Energy efficiency management Improved energy efficiency is a prerequisite, not just for addressing climate change, but also for preserving resources, enhancing energy safety and reducing the reliance on imported fossil fuels. In 2020, in the context of its new Environmental, Social and Governance (ESG) targets, TITAN Group committed to have 85% of its clinker production covered by ISO 50001 or energy audits by 2025. In 2016, the Group made its ﬁrst step in applying energy efficiency management systems in its cement production plants. The Tokat integrated cement plant in Turkey was the ﬁrst TITAN plant to be certiﬁed according to ISO 50001, followed by the Greek and USA-based integrated cement plants. Our integrated cement plant in Bulgaria is also covered by energy efficiency audits. In 2021, the Group continued to expand the use of energy efficiency management systems, with the Alexandria and Beni Suef integrated cement plants in Egypt and the Usje integrated cement plant in North Macedonia successfully completing the process and receiving their Energy Efficiency Management Systems certiﬁcations according to the international standard ISO 50001:2018. As a result, the Group’ s clinker capacity covered with ISO 50001 now represents 86.2% of its total clinker production, exceeding the target of 85% set for 2025 and showing a signiﬁcant increase compared to the 54.9% achieved in 2020. Waste management In the context of the global transition towards a circular economy, TITAN Group has worked steadily on the reduction of landﬁll waste. Since 2016, TITAN’s cement plants in the USA and Turkey have received zero waste certiﬁcations, having demonstrated diversion of waste from landﬁll through reducing, reusing, recycling, or composting discarded material. In 2021, TITAN’s cement plants in Greece – Kamari, Patras and Thessaloniki – were also certiﬁed under the “Zero Waste to Landﬁll” standard, receiving the highest Platinum rating as a result of diverting virtually 100% of plant waste from landﬁll. As a result, the Group’s clinker capacity covered with “Zero Waste to Landﬁll” certiﬁcation now represents 56.2% of its total clinker production, exceeding the target of 50% set for 2025 and showing a signiﬁcant increase compared to the 29.5% achieved in 2020. Waste produced by the Group as part of its everyday activities is collected, stored and disposed of through authorized contractors for reuse, recycling or recovery, with the aim to minimize landﬁll. As a result, the percentage of the total waste produced that was recycled increased slightly to 83.6%, compared to 82.6% in 2020. Furthermore, the percentage of concrete returns diverted from landﬁlls have stood consistently over 85.0% in the last ﬁve years, reaching 86.0% in 2021. Material issue: Reliable and sustainable supply chain In 2021, TITAN continued its Group Procurement transformation program by further improving the sourcing efficiency of the strategic purchasing categories managed centrally by the Group Procurement Department (global categories), with a more extensive focus on supply chain sustainability topics. Supplier landscape optimization, building and maintaining long-term supplier relationships and a holistic review of supplier performance (including sustainability) are key elements for enabling “total cost” optimization, transparency of value creation and the propagation of sustainability practices in the supply chain. The Group has also developed a Sustainable Supply Chain Roadmap which outlines speciﬁc milestones and deadlines to timely achieve the target of ensuring that 70% of our key suppliers meet TITAN ESG Supplier standards by 2025. In accordance with this roadmap, a ﬁrst ever TITAN Group Procurement Policy was developed and made official in July 2021. The Procurement Policy sets forth the fundamental principles governing procurement in TITAN, incorporating upgraded procurement practices that enhance the Group’s commitment to be a socially responsible, ethical and environmentally sensitive business organization. Finally, the Group initiated a process to further develop and expand the respective ESG criteria for use in the evaluation of its key suppliers. Our key suppliers have been deﬁned as critical suppliers according to the GCCA Guidance for Sustainable Supply Chain management, with a meaningful level of spend (i.e. 80% of total spend) for each business unit. Critical suppliers are the ones who may mostly inﬂuence sustainability drivers for the company (e.g. provoke disruption, affect brand, etc.) because of ESG impacts that they may have (e.g. contractors who violate safe conditions or have no permit to operate legally). The newly developed ESG criteria are in line with the GCCA guidelines for Sustainable Supply MANAGEMENT REPORT ESG PERFORMANCE REVIEW 93 Chain management and the UN Global Compact principles, including the areas of compliance with laws, regulations and social customs, human rights, labor rights, health and safety, environmental management, climate change, anti-corruption and transparency. TITAN’s efforts to engage with our suppliers on climate change have been recognized by CDP with an “A-” score in the CDP Supplier Engagement rating, which is in the Leadership band of CDP. Product responsibility TITAN offers a wide range of cement and concrete products to its customers, meeting the growing demand for sustainable construction in all areas of activity. It is widely accepted that concrete exhibits some of the lowest carbon footprints among construction materials, allowing for durable construction with increased service life. In addition, responsible use of concrete enables further reductions in CO₂ emissions across multiple sectors, including renewable energy generation (e.g. foundations for wind towers), resilient infrastructure (roads and bridges) and optimal use of energy for heating and cooling residential and office buildings (especially compared to other building materials with lower thermal capacity). Concerning cement products, a signiﬁcant part of our portfolio includes products manufactured with clinker content lower than that of Type I/II or CEM I cements. Also, TITAN offers, through its subsidiary Separation Technologies LLC (ST), valorized ﬂy ash for use in concrete, a product with very low associated carbon emissions that directly replaces cement, allowing for enhanced emission reduction in the value chain. As per the Group’s deﬁnition, lower carbon products represent approximately 40% of our portfolio of cement and cementitious products. In 2021, a new bagged cement- in a water-soluble sack- was introduced in Greece under the name EcoSack. The launch of this innovative product, available in distinct green packaging, responds to the market’s need to improve productivity on construction sites and, at the same time, contributes to the promotion of sustainable development and circular economy practices which rely on minimizing waste, reusing, recycling or recovering materials and energy, as well as on designing products that, throughout their lifecycle, will contribute to the conservation of natural resources, efficient management of waste, and reduction of CO₂ emissions. Also, in 2021, Interbeton, a subsidiary of the Group in Greece, launched an innovative ready mixed concrete that is reinforced with structural ﬁbers, branded Interforce. The new product can be used in commercial slab construction, displacing the use of wire mesh and economizing up to 5 kgCO₂ per square meter of application. Furthermore, Interbeton developed the Viridia ready mix product line, targeting residential and commercial construction. The innovative product is designed for extended durability under chloride ingress or carbonation, thus negating the need for costly and carbon intensive structural repairs during a project's lifetime. Regular customer satisfaction surveys are implemented in the regions where we operate, helping us understand customers’ needs. For instance, in TITAN America, we conducted a “Net Promoter Score” customer survey at both Pennsuco and Roanoke cement plants. The results of the survey were incorporated into our product quality and business development strategy. Furthermore, the Roanoke cement division created an outreach program to educate architects and engineers about low carbon building materials and encourage the speciﬁcation of more low- carbon cements. In 2021, TITAN Greece completed a full Life Cycle Analysis (LCA), according to ISO 14040 and EN 15804, for all cement products produced in Greece, and developed an Environmental Product Declaration (EPD) for each separate cement product at plant level, as well as for most commercial ready mixed concretes. The LCA, as well as the EPDs, are assessed and reviewed by an independent and nominated body and published in The International EPD® System. All Safety Data Sheets of our products comply with the European Regulation on Chemicals (REACH) and Classiﬁcation Labelling Packaging (CLP) Regulation requirements in providing health, safety and environmental information. Particularly for bagged cement, information for safe use is printed on the bag, while for bulk cement customers, all relevant information is provided with the delivery document. For cements traded in EU and UK, the relevant cement product SDS are registered with the competent authority in each country. In 2021, TITAN Greece bagged cement products were veriﬁed by an independent third party as compliant with the water-soluble hexavalent chromium content regulatory limit of Regulation (EC) 1907/2006. Assessment was based on the EN 196-10 evaluation scheme and a relevant certiﬁcation of conformity was issued. Good governance, transparency and business ethics TITAN Group is strongly committed to conducting business in accordance with the highest standards of integrity and ethical business practices. Compliance with high governance standards to address and manage risks related to bribery and corruption and human rights throughout the Group’s operations is considered fundamental in the implementation of TITAN’s sustainability strategy. TITAN’s Code of Conduct and Policies ensure, beyond compliance with applicable laws and regulations, the commitment to international norms and standards, including the UN Guiding Principles for Business and Human Rights and International Law against Bribery and Corruption. It is imperative that governance and ethics considerations are properly addressed at Group level and this is ensured through a consistent management approach and a strong governance structure, prescribed by the Group Corporate Governance Charter. Anti-bribery and corruption Bribery and corruption constitute a threat for businesses and societies across the world, one that impairs ethical values, enables crime and illegal activity, undermines equal opportunities in doing business and imposes a huge ﬁnancial cost on societies. Consistent with our values and culture, and as clearly articulated in the TITAN Code of Conduct and relevant Group Policies, the Group follows a zero-tolerance approach towards bribery, fraud and any other corruptive practice. All initiatives and efforts to ﬁght corruption are supported by and effected through a strong organizational structure that sets clear roles and responsibilities and provides increased assurance for good governance and solid ESG performance. The Audit and Risk Committee, a Board Committee comprised by non-executive, independent board members, is delegated to oversee, among INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 94 others, the risk of corruption and fraud. The Group Compliance and Anti-Fraud Department, as part of the Group Internal Audit, Risk and Compliance Department, maintains the overall responsibility to monitor compliance risks and to coordinate relevant controlling activities, in cooperation with management and the Legal Department. Our Anti-Bribery and Corruption Policy sets forth principles, rules and responsibilities, speciﬁes high-risk areas in which bribery and corruption may most often occur during business activities and provides guidance for preventive and detective procedures, including the performance of risk assessment activities and due diligence of third parties who perform services for or on behalf of TITAN Group. The TITAN Group Anti-Fraud Program sets out our strategic priorities and efforts to deter and detect occupational fraud and corruption throughout the Group, aiming to provide a protection shield for assets and resources, corporate reputation and credibility, cultural strengths and operational efficiency. A comprehensive structure of anti-fraud initiatives and controls is deployed, contributing to the prevention and detection of occupational fraud as well as the response of the Group in such event. Responding to the need for enhanced anti-fraud awareness, the Anti-Fraud Program Framework was developed during 2021 and widely communicated throughout the Group. The Framework promotes openness and transparency, provides standards and guidelines, and clariﬁes roles, expectations and responsibilities on the subject of occupational fraud. Among preventive actions, the Fraud Risk Assessment projects, conducted in risk areas, aim to identify and remediate potential gaps and weaknesses in the applied anti-fraud preventive controls, through consistent and effective action plans. Compliance Program and Group Policies Compliance risks are proactively addressed at Group level through the TITAN Group Compliance Program, an integrated system of relevant activities, mechanisms and controls that aim to provide adequate assurance that compliance risks are timely identiﬁed, properly assessed and effectively mitigated. The Compliance Program reinforces compliance culture, ensures adherence to compliance requirements and fosters ethical behavior. The set of Code of Conduct and Group Policies, applicable to all TITAN Group operations, covers all strategic areas and provides guidelines to employees and external business collaborators (i.e. vendors, customers), to ensure compliance with the applicable internal and statutory rules. Group Policies include, but are not limited to, Anti-Bribery and Corruption, Conﬂict of Interest, Competition Law, Sanctions, Corporate Social Responsibility, Whistleblowing, Environmental and Climate mitigation, Protection of Personal Data, Human Rights, Occupational Health and Safety. All TITAN Group employees have free and unrestricted access to the Group Policies, which are available on the Group Policies Repository in the Group Intranet. A separate section offers translations of Group policies in all local languages. Group policies are also communicated to our internal and external stakeholders through our website (https://www.titan-cement.com/about-us/ corporate-governance/group-policies). A key hallmark of the TITAN Group Compliance Program is awareness, training and continuous advice, as we consider it imperative that our people are adequately informed and supported in this continuous effort. To this end, the second phase of the TITAN Group Policies Awareness Program, comprising e-learnings, and assessment tests for the Code of Conduct and the set of Sustainability and Social Responsibility Policies, was implemented during 2021. The e-learnings were assigned to the general population through the learning management system platform and during the year around 1,500 employees took part in 6,400 training hours in total. Human rights Human rights is a material issue for employees and TITAN suppliers, local communities, but also regulators and civil society organizations. TITAN Group is committed to respecting fundamental human and labor rights, in full alignment with international norms and standards in all operations. Accordingly, an overview of potential risks to be addressed both in the workplace and in the supply chain is an integral part of the materiality assessment process that covers all countries in which the Group currently operates. As a follow up, a country-speciﬁc risk assessment is planned for 2022, as there are considerable differences in the enforcement of international human rights norms from country to country. A certain priority for the Group is the protection of labor rights and safe working conditions among contractors’ employees, particularly under the extraordinary conditions of COVID-19. We have not identiﬁed consequences in the areas of environment, human rights or/and anti-bribery and corruption compared to the pre-pandemic period. We measure the progress on these objectives through a set of key performance indicators, corresponding to advanced criteria which satisfy the Communication on Progress requirements of the UN Global Compact Network. Human rights is one of the key subject areas of the TITAN Group Compliance Program, which provides a well-structured framework to address relevant activities in a disciplined and holistic way across the Group. The set of commitments, are clearly articulated in the TITAN Group Human Rights Policy. Among the practices that are strictly prohibited are forced labor (including slave labor), human trafficking, and inhumane treatment of workers, child labor and discrimination. The TITAN Group Procurement Policy, released in 2021, clearly sets as a prerequisite for our suppliers to comply with all laws and regulations and respect human and labor rights in their business activities, and to establish a safe working environment. Contractual clauses embedded in contracts describe in detail the above requirements. Diversity and inclusion are also identiﬁed as priorities for the Group, and are important for the business and for key stakeholders, including suppliers, customers and local communities in addition to employees. We seek to maintain an environment where everyone has a strong sense of belonging and inclusion, preserving ethnic diversity and not to tolerate discrimination, bullying or harassment. Our Diversity, Equity and Inclusion Policy was approved by the Group Executive Committee in 2021 and launched in 2022. Intensifying our efforts to ensure compliance not only with regulatory but also with ESG requirements, a comprehensive Third-Party Due Diligence system, supported by an online tool, MANAGEMENT REPORT ESG PERFORMANCE REVIEW 95 was fully developed in 2021 and is ready to be put in operation. The objective is to provide across the Group the possibility for effective, fast, reliable and efficient due diligence, through a risk- based selection of counterparties, providing adequate assurance and ongoing monitoring over sanctions risks, ESG risks, other regulatory concerns and reputational risks. The EthicsPoint platform, a uniform, anonymous and strictly conﬁdential channel for reporting incidents of non-compliance, reiterates TITAN’s openness and transparency, safeguarding good governance and integrity. The platform, to which all Group employees have free access, ensures that incidents are reported, examined and resolved with a remedy plan when necessary. A ﬁve-member Supervisory Committee at Group level, including the Chairman of the Audit and Risk Committee, oversees the investigation and handling of reports, ensuring conﬁdentiality and non-retaliation for whistleblowers. In 2021, 11 cases in total were reported through the EthicsPoint platform, 10 of which were classiﬁed as allegations and one as an Inquiry - complaint (see ESG performance statements 2021 for more details)”. TCFD framework implementation (Climate change risks and opportunities) The 2015 Paris Agreement on Climate Change, the United Nations Sustainable Development Goals and the Intergovernmental Panel on Climate Change call for accelerated and decisive action to reduce greenhouse gas (GHG) emissions and to create a low- carbon and climate-resilient economy. In June 2017, the Task Force on Climate-related Financial Disclosures (TCFD), established by the G20’s Financial Stability Board, published recommendations to encourage ﬁnancial institutions and non-ﬁnancial companies to disclose information on climate-related risks and opportunities. The TCFD recommendations are widely recognized as authoritative guidance on the reporting of ﬁnancially material climate-related information. The European Commission encourages companies to implement them. Construction and building materials are vulnerable to climate-related transition and physical risks. Transition risks, such as the introduction of carbon pricing policies, have the potential to increase operational costs throughout the value chain. Physical risks, such as extreme weather events, could disrupt supply chains, halt operations and damage valuable assets. The Board of Directors, which has the overall responsibility to set the company’s sustainability strategy, has placed climate change at the forefront of TITAN’s sustainability agenda. The Group undertakes on a regular basis a systematic exercise to assess all material risks faced by the Group that could affect its business model and performance. This exercise identiﬁes the Group’s main hazards as well as the most vulnerable geographical areas in which TITAN operates. These core and complementary governance mechanisms are supported by the Group Research, Innovation and Quality department, the Group Strategic Planning and Group Internal Audit, Risk & Compliance departments and the Group ESG performance department. In 2021, under the supervision of its main governance body for climate-related issues (ExCo Sustainability) and in collaboration with recognized climate-risk experts, the Group worked on identifying, assessing and managing the risks from climate change, and the opportunities from the transition to a low- carbon economy, in alignment with the TCFD Framework which is demonstrated on page 41. The main elements of the Group’s approach are: • the exposure of our assets to hazards related to climate change • the vulnerability of our assets to hazards related to climate change • the ﬁnancial risks presented to our assets by the hazards and their relevant vulnerability Speciﬁc metrics are used to measure the impact of each hazard on our assets using a reference baseline. Our methodology covers both physical risks, like temperature, ﬂooding and water stress, as well as transition risks, like carbon pricing, reputational damage and litigation. In addition, opportunities related to climate change are also analyzed and quantiﬁed. The methodology is built on principles similar to catastrophe risk models, but is driven by climate model and socioeconomic model data on climate-related hazards, driving econometric models with hazard inputs and business data, and translating risk into ﬁnancial terms to provide decision-relevant insights. Our analysis uses two climate-change scenarios based on the Representative Concentration Pathways (RCPs) from the International Panel on Climate Change (IPCC), namely the RCP8.5 and RCP4.5. RCP8.5, the “high emissions” scenario, is related to an expected increase of the global mean surface temperature in 2100 in the range of 4.2 to 5.4 °C . RCP4.5, and the “low emissions” scenario, is related to an expected increase of the global mean surface temperature in 2100 in the range of 1.7 to 3.2 °C . The climate-related scenario assessment covers the cement manufacturing facilities throughout TITAN’s global operations, encompassing 15 of our cement manufacturing facilities in 9 countries across Southeastern Europe, North Africa, Turkey and the USA. The main physical risks for the Group already identiﬁed are coastal ﬂooding, drought, water stress and extreme temperatures. The Group faces the highest physical risk from coastal ﬂooding while drought poses the second highest physical risk. TITAN faces minimal or no risk from tropical cyclones. Financial impact from physical risks can be seen in Chapter C2 of the CDP questionnaire. 2021 was a year of multiple wildﬁres in Greece after a historic heatwave in the Mediterranean area (Greece, Turkey, etc.). The devastating ﬁres resulted in thousands of acres of scorched land and loss of property. Our assets and our supply chain were not impacted. TITAN cooperated closely with the local authorities in Greece to mitigate the consequences of the wildﬁre as one can see in the chapter “Social positive impact”. Our decarbonization plans can signiﬁcantly mitigate transition risks in the medium and long term. Within TITAN's geographical footprint, legally binding climate change rules are implemented mainly in the EU (ETS) and in Egypt (CO₂ emissions cap), where gross Scope 1 emissions of our operations represent 51.2% of total Group Scope 1 emissions. Under the current regulatory EU framework, Titan’s ﬁnancial exposure to the ETS is minimized as the Group has no shortfall of ETS emission rights based on its existing operating model. The Group’s plants in Greece and Bulgaria, where the EU Emissions Trading Scheme (EU ETS) is in force, are entering Phase IV (2021–2030) with a surplus of rights, which should last for at least ﬁve years assuming there is no signiﬁcant change in the EU ETS rules, thus minimizing the INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 96 Group’s ﬁnancial exposure. The price of CO₂ rights will become critical for the Group if the regulatory framework changes in a way that a shortfall is created. Furthermore, transition opportunities related to climate change have been identiﬁed as follows: • Innovation: development of new low-carbon products to address new customer preferences • Energy: sourcing of low-emissions energy that can lead to reduced energy costs • Cost: improvements in energy efficiency across production and the supply chain and efficient use of materials, water and waste management can lead to cost optimization. The links with the TCFD pillars are available on page 41 of this report. ESG criteria in remuneration policy TITAN recognizes that linking environmental, social and governance (ESG) performance to executive pay can help hold executive management to account for the delivery of the Group’s ESG targets, while strengthening the oversight of the sustainability agenda at Board level. As per the Group’s remuneration policy, a three-year target that is compatible with the path to reduce our net CO₂ emissions to 500kg per tonne of cementitious product by 2030 is included in the performance objectives of the deferred compensation incentive for executive members of the Board and the members of the Executive Committee. In addition, 5% of the Short- term Incentive Scheme (STIP) is linked to the Lost Time Injury Frequency Rate. Taxonomy EU Regulation implementation In 2021, TITAN encompassed in its reporting framework the requirements of the EU Taxonomy Regulation (EU) 2020/852, as supplemented with the respective Commission Delegated Regulation EU 2021/2178 of 6 July 2021 especially for climate change mitigation and adaptation (EU 2021/2139), which speciﬁes the content and presentation of information to be disclosed by undertakings concerning environmentally sustainable economic activities, and speciﬁes the methodology to comply with that disclosure obligation. In compliance with Article 8 of the Taxonomy Regulation, we screened all our taxonomy-eligible economic activities in 2021 and we disclose the prescribed indicators of turnover, capital and operational expenditures. It was concluded that the main Taxonomy-eligible economic activity is manufacture of cement (EU description refers to “manufacture of cement clinker, cement or alternative binder”). The economic activities in this category could be associated with NACE code C23.51 in accordance with the statistical classiﬁcation of economic activities established by Regulation (EC) No 1893/2006. An economic activity in this category is a transitional activity as referred to in Article 10(2) of Regulation (EU) 2020/852 where it complies with the technical screening criteria set out in this Section. The activity complies with the criteria set out in Appendix A to this Annex for climate adaptation. In addition to clinker and cement manufacturing, the processing of ﬂy ash could also be considered as a Taxonomy-eligible activity, although not economically material to disclose. According to the Regulation and based on the Group consolidated data, €1,004.7m or 58.6% of the Group turnover in 2021 comes from Taxonomy eligible activities while the total respective CapEx corresponds to €74.3m (58.9% of total CapEx) and the total Operating expenditures correspond to €71.0m (60.5% of total Operating expenditures). Revenue from ﬂy ash processing is around 0.1% of the total Group turnover. More data and information on the Taxonomy KPIs as for the proportion of the respective turnover, capital and operational expenditures over the total ﬁgures for TITAN Group are provided in the ESG Performance Statements section. The deﬁnitions for the KPIs were adopted by TITAN as in the Commission Delegated Regulation (EU) 2021/2178 (Annex I: KPIs of non-ﬁnancial undertakings). In speciﬁc the turnover covered the revenue recognized pursuant to International Accounting Standard (IAS) 1, paragraph 82(a), as adopted by Commission Regulation (EC) No 1126/2008 (1), and as deﬁned in Article 2, point (5), of Directive 2013/34/EU. The capital expenditures (CapEx) covered additions to tangible and intangible assets during 2021 considered before depreciation, amortization, and any re-measurements, including those resulting from revaluations and impairments, for the relevant ﬁnancial year and excluding fair value changes. Under the CapEx ﬁgure, we included costs that are accounted based on IAS 16.73 (e)(i)(iii), IAS 38.118 (e)(i), IAS 40.76 (a)(b), and IFRS 16.53(h). For calculating the ﬁgure of operational expenditures (OpEx), we considered all direct non-capitalized costs that relate to research and development (research and innovation investments), building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant, and equipment by TITAN or third party to whom activities are outsourced, that are necessary to ensure the continued and effective functioning of such assets. In the ESG Statements, Table 2.5.2, we provide detailed ﬁgures for the KPIs of Turnover, CapEx and OpEx, and Notes for the contextual information according to the requirements of the Taxonomy Regulation, and explanation for the TITAN accounting policy speciﬁcally for these disclosures. Speciﬁc data for calculating the KPIs, referring to Turnover and CapEx are disclosed in the Financial Statements. For the Turnover, see “Financial Statements”, section “Consolidated Income Statement”, page 149, and Note 3 “Operating segment information”, page 171. For the CapEx, see “Financial Statements”, section “Financial performance overview” page 145, and Note 3 “Operating segment information”, page 171. Independent assessment of ESG performance We are committed to continuously improving our sustainability performance and further aligning our targets with the expectations of our stakeholders. To this end, we engage with ESG Rating agencies, valuing their assessments and feedback. In addition, by responding to the CDP climate change and water security questionnaires, we are stepping up our efforts to provide increased transparency in our environmental disclosures. In 2021, Titan Cement International received an upgraded MSCI ESG Rating of “AA”. MSCI ESG Research provides ESG Ratings on global public and a few private companies on a scale of “AAA” (leader) to “CCC” (laggard), according to exposure to industry- speciﬁc ESG risks and the ability to manage those risks relative to peers. MANAGEMENT REPORT ESG PERFORMANCE REVIEW 97 TITAN Cement Group was also recognized by the CDP (formerly Carbon Disclosure Project) as a global climate leader for its transparency and actions to mitigate climate change and transition to a net-zero economy. With an “A-” score, TITAN Cement Group ranks in the top 15% of publicly disclosing companies globally and is one of only ﬁve Cement sector companies (out of 27) to achieve this level in 2021. Companies reaching the Leadership level represent best practice through their comprehensive disclosure of environmental data, thorough awareness of risks, demonstration of strong governance and management of those risks, as well as the implementation of market-leading best practices. Furthermore, and in line with our commitment to open and transparent communication with our stakeholders, in 2021 we responded to the Carbon Disclosure Project (CDP) Water Security questionnaire and achieved a “B” score, which corresponds to the management band where companies “take coordinated action on water issues”. For more information on the Group’s ESG performance assessment by ESG Rating agencies, please visit the corporate website (https://www.titan-cement.com/sustainability/esg- ratings/) INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 98 MANAGEMENT REPORT ESG PERFORMANCE REVIEW ESG performance statements TITAN’s approach for ESG Performance reporting In 2021 the approach of ΤΙΤΑΝ Group for integrated ESG Performance reporting on the basis of voluntary commitments to IIRC principles, UNGC Communication on Progress according to Criteria Advanced Level, GCCA Charter and Guidelines, and connection with the Sustainability Accounting Standards Board (SASB) Framework, was expanded for covering the Regulatory requirements of the EU Taxonomy, and the TCFD requirements for climate-related risks. In more specific about Taxonomy: TITAN encompassed the requirements of the EU Taxonomy Regulation (EU) 2020/852, as supplemented with the respective Commission Delegated Regulation EU 2021/2178 of 6 July 2021 in specific for climate change mitigation and adaptation. The Regulation specifies the content and presentation of information to be disclosed by undertakings concerning environmentally sustainable economic activities, and the methodology to comply with that disclosure obligation. TITAN complies in this Report in more specific with the requirements on disclosures pursuant to Article 8 of the Regulation, for its EU Taxonomy-eligible economic activities in their total turnover, capital, and operational expenditures, these being the key performance indicators (KPIs) set by the Regulation and provides qualitative information (description) for its Taxonomy-eligible activities and investments. TITAN made a screening of all economic activities in 2021 based on the classification set by the Regulation. It was concluded that the main Taxonomy-eligible economic activity is the manufacture of cement clinker, cement or alternative binder (NACE code C23.51, in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006). In addition, the production and sale of fly ash could also be considered Taxonomy-eligible activity (NACE code E38.32), although not economically material to disclose due to very low share in the total Group turnover. Baseline years: For committing on targets 2025 and reporting on progress for all other environmental parameters except CO 2 , the base line year is 2020. Also 2020 is used as base line for SBTi Targets on CO 2 emissions. For CO 2 emissions other than SBTi the baseline year for relevant target(s) is 1990 in line with the Kyoto Protocol. Changes in the structure and content of the 2021 Integrated Annual Report: Materiality: TITAN’s framework of material issues, as outcomes of the last cycle for materiality assessment for the Group (2019), is presented in Table 1 of the ESG Statements. In this framework we have connected the outcomes of BUs’ materiality, again following the outcomes of assessment in the most recent cycle for each country/BU level completed between 2020-2021. The connections provide a more inclusive approach of materiality for TITAN, which is seen as a bottom-up and top- down approach and combines the merits of BU level analysis and engagement with the Group level blueprint and guidance. Restructuring of the ESG KPIs Index: All disclosures for the performance KPIs for the areas of Environment, Social and Governance, were restructured by following the outcomes of materiality assessment on Group level, with using the "compass" of TITAN’s Focus Areas. The respective KPIs for ESG performance were aligned according to material issues mostly relevant under each of the Focus Areas. The new approach for our ESG Statements aimed at providing to the external as well as internal stakeholders an efficient flow of metrics around disclosures of performance focused on TITAN’s materiality framework and connected with TITAN’s targets 2025 and beyond. See Tables 2.1, 2.2, 2.3, 2.4, and 2.5, aligned with the Focus Areas of TITAN’s materiality: 1. De- carbonization and Digitalization, 2. Growth-enabling work environment, 3. Positive local impact, and 4. Responsible sourcing. All underpinned by 5. Good governance, transparency, and business ethics. New disclosures under the Focus Area Decarbonization and Digitalization, Table 2.1: Scope 1 gross and net direct CO 2 emissions, also with regional performance data and % clinker production emissions coverage rate, Scope 2 CO 2 emissions, and Scope 3 emissions, also with regional performance data, % clinker production emissions coverage rate, and specific CO 2 emissions per t cementitious product. Also, we report on sustainable products as part of our cement production, disclosed as % cement production, and annual investment in research and innovation. New disclosures under the Focus Area Growth-enabling work environment, Table 2.2: We added the KPIs for wellbeing initiatives for employees, % turnover breakdown by gender and age structure, % share of employees with performance evaluation and % share female employees with performance evaluation, also % share of female employees in talent pools. Under the Focus Area Positive local impact, Table 2.3, we added the KPIs: % employees from local communities, % share of Internships from local community, total number of Initiatives under community engagement plans, total number of participants to community engagement plans, TITAN employees as volunteers to community engagement plans, total amount of "social investment" for the implementation of these community engagement plans, and blood donations (TITAN employees, business partners and communities). 99 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Under the Focus Area Responsible sourcing, Table 2.4, we added KPIs for: water withdrawal and discharge, % water demand covered with recycled water, also regional performance in water consumption, regional performance in specific thermal energy consumption, Group performance and regional performance in specific electrical energy consumption, % renewable energy as part of total electrical energy consumption, number of integrated cement plants with “Zero Waste to Landfill” certification, and Key suppliers meeting TITAN ESG standards. Last, under the Focus Area Good governance, transparency, and business ethics, we added the information under the Table 2.5.1 for: Number of nationalities represented on the Board, Number of meetings and attendance rates of the Audit and Risk Committee, the Nomination Committee, and the Remuneration Committee, also the KPI for Grievance mechanism (Ethicspoint) coverage, % unionized employees, and % employees covered by Collective Bargain Agreements. New Tables under the ESG Statements as new KPIs and supplementary information supporting our disclosures for Governance: 2.5.2 Taxonomy, 2.5.3 ESG Polices, 2.5.5 Political contributions & Fines and other non- monetary sanctions, and 2.5.6 Environmental Audits. Also, we added under the Focus Area Good governance, transparency and business ethics the Tables 2.5.4 Group Management Systems, 2.5.7 Consolidated Report on Payments to Governments for extractive operations, and 2.5.10 Notes for Value Creation Indicators. See Notes below for facilitating the ESG performance statements review (in connection with KPIs under Tables 2.1, 2.2, 2.3, 2.4, and 2.5). Assurance: Specific KPIs included in the scope of ERM Certification and Verification Services (ERM CVS) assurance engagement (ERM CVS’ “Independent assurance statement”). GCCA: Specific KPIs calculated according to sector commitments integrated by TITAN, following the GCCA Charter and Framework Guidelines. UNGC: TITAN follows the reporting requirements for meeting the criteria of UN Global Compact concerning to a Communication on Progress (COP) Advanced Level. UNCTAD: TITAN has adopted under its reporting framework the applicable KPIs according to the Guidance of UNCTAD, as supplementary to the above Reporting Standards. TCFD: TITAN started reporting according to the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) in 2021. SASB: TITAN aligns its reporting on ESG performance with the Sustainability Accounting Standard Board (SASB). 100 MANAGEMENT REPORT ESG PERFORMANCE REVIEW 1. Material Issues TITAN Group Albania Bulgaria Egypt Greece 1 Future-ready business model for a carbon neutral world Safe and healthy working environment for our employees and business partners Safe and healthy working environment Environmental and energy management Customer satisfaction with sustainable, innovative and quality products and services 2 Safe and healthy working environment Employee engagement, continuous development and wellbeing Customer relations Health and safety Positive local social, economic and environmental net impact 3 Good governance, transparency and business ethics Customer satisfaction Employee development and wellbeing Competitiveness and business model resilience Health, safety and wellbeing for our employees 4 Diverse and inclusive workplace Good governance, transparency, and business ethics Climate change mitigation and adaptation Good governance, transparency, and business ethics Future-ready business model in a carbon-neutral word 5 Positive local social, economic and environmental impact Supporting our local communities well-being Quality and sustainability of products Positive impact for our communities Good governance, transparency and ethics 6 Innovation with emphasis on digital and de-carbonization Environmental management Efficient use of energy and natural resources (water, raw materials, and fuels) Employee engagement and development Resource efficiency, recycling and recovery, contributing to a circular economy 7 Continuous development of our people Responsible, reliable, and sustainable supply chain Good governance, transparency and business ethics Innovation with emphasis on digital and de- carbonization 8 Reliable and sustainable supply chain Stakeholder relations and engagement Sustainability of communities Employee engagement and continuous development 9 Resource efficiency, recycling and recovery, contibuting to circular economy Climate change and energy Responsible and reliable supply chain Reliable and sustainable supply chain 10 Business model innovation Biodiversity conservation Diverse and inclusive workplace 11 Global Material Issues Sectoral Material Issues Local Material Issues Level of Material Issues ESG performance statements - 101 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Tables Kosovo North Macedonia Serbia Turkey USA Safe and healthy working environment for our employees and business partners along the value chain Environmental management of local impacts and protection of natural resources Environmental protection and investments Health, safety and wellbeing Protect our people and promote health and safety Environmental performance Safe and healthy working environment for our employees and business partners Safe and healthy working environment  Marketing and customer satisfaction (quality, product innovation, and safety) Optimize and develop access to raw materials, including cement Engaging and contributing to our local communities Building trust of our customers and improve their satisfaction Employment andemployeeswellbeing  Environmental management Attract, develop and maintain talent in an open, inclusive and diverse culture Good governance, transparency, and business ethics Good governance and business ethics Economic performance and market presence Good governance, compliance and business ethics Mitigate climate change impacts and optimize energy use Employee engagement and development Continue engaging and contributing to sustainability of communities Product quality and safety Employee engagement, collaboration and people development Innovation and quick adaptation Climate change and energy efficiency Decarbonization energy efficiency, and business model resilience Stakeholder engagement and welfare of communities Climate change and energy Actively manage biodiversity and ecosystems (including water) Diverse and inclusive workplace Employee engagement, development and well-being Climate change and energy Efficient use of resources and contribution to a circular economy Community relations and engagement; license to operate Responsible, reliable, and sustainable supply chain Maintaining a sustainable and reliable supply chain Good governance, transparency, and business ethics  Sustainable growth and resilient infrastructure Sustainability of concrete/ sustainability of our products Responsible and sustainable supply chain  Responsible supply chain management Incoming regulation; increasing regulation complexity Responsible use of resources and contribution to acircular economy, biodiversity, and forestry  Social license to operatate and contribution to local communities' sustainability Communication (internal and external) Digitalization Brand reputation and exposure through social media 102 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Notes The first column of the Table above provides the order of prioritization of the material issues for TITAN, and same holds for the order of material issues in each column for the separate BUs, according to the outcomes of the materiality assessment of the last cycle in 2020 and 2021. About definitions: The boundaries of reporting for each material issue are defined by the principles of “materiality”, “relevance”, “conciseness”, “consistency”, and “connectivity” aligned with the guidance of the International Integrated Reporting Council (IIRC) 1 : Materiality A matter is material if it is of such relevance and importance 2 that it could substantively influence the assessments of providers of financial capital with regard to the organization’s ability to create value over the short, medium and long term. In determining whether or not a matter is material, senior management and those charged with governance should consider whether the matter substantively affects, or has the potential to substantively affect, the organization’s strategy, its business model, or one or more of the capitals it uses or affects. Relevance Relevant matters are past, present or future matters that impact or may impact the organization’s strategy, its business model or one or more of the capitals and thus ultimately affect the organization’s ability to create value over time. Identifying relevant matters for inclusion in the integrated report includes identifying the population of potentially relevant matters and narrowing these down to matters that are relevant for inclusion in the integrated report. Information about relevant matters will have either, or both, predictive value or confirmatory value with respect to intended users’ decisions. Conciseness Disclosures about material matters should include concise information that provides sufficient context to make the disclosures understandable and should avoid information that is redundant in nature. Consistency and comparability Reporting policies should be followed consistently from one period to the next unless a change is needed to improve the quality of information reported. This includes using the same KPIs to report on the same matters if they continue to be material across reporting periods. When a significant change has been made, the organization explains the reason for the change, describing (and quantifying if practicable and material) its impact. Comparability of reported information is intended to enable comparison with other organizations to the extent it is material to the organization’s own ability to create value over time. Connectivity Connectivity is intended to address the connection between financial and non-financial information, in order to provide a holistic view of the combination, interrelatedness and dependencies between all the factors that affect the organization’s ability to create value over time. 1. Sources: ‘Materiality Background Paper for \’ (IIRC, 2013), and ‘The International \ Framework’ (IIRC 2013). Further information about the IIRC can be found on its website www.theiirc.org. 2. TITAN uses the equivalent term "significance". 103 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2. ESG Key Performance Indicators (KPIs) 2.1 Focus area: De-carbonization and Digitalization code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.1.1 Material Issue: Future-ready business model in a carbon neutral world Cement and cementitious production activities 1.1 Scope 1 gross CO 2 emissions 2 million t 1 10.5 9.9 10.3 11.1 12.1 ƔƔƔƔƔ EM-CM-110a.1 SDG 9.4 1.2 Greece 1 million t 2.9 2.5 3.0 3.0 3.2 ƔƔƔƔ 1.3 USA 1 million t 2.2 2.2 2.2 2.1 2.1 ƔƔƔƔ 1.4 Southeastern Europe 1 million t 2.6 2.5 2.5 2.5 2.6 ƔƔƔƔ 1.5 Eastern Mediterranean 1 million t 2.8 2.8 2.6 3.5 4.1 ƔƔƔƔ 1.6 Scope 1 gross CO 2 emissions covered under limiting regulations % 51.2 49.9 55.1 56.9 58.6 ƔƔ EM-CM-110a.1 1.7 Scope 1 gross CO 2 emissions coverage rate 1 % Clinker production 100.0 100.0 100.0 100.0 100.0 1.8 Scope 1 net CO 2 emissions million t 10.1 9.6 10.0 10.8 11.9 ƔƔƔƔƔ 1.9 Greece 1 million t 2.7 2.3 2.8 2.8 3.1 ƔƔƔƔ 1.10 USA 1 million t 2.2 2.2 2.2 2.1 2.1 ƔƔƔƔ 1.11 Southeastern Europe 1 million t 2.5 2.4 2.5 2.5 2.6 ƔƔƔƔ 1.12 Eastern Mediterranean 1 million t 2.7 2.7 2.5 3.4 4.1 ƔƔƔƔ 1.13 Scope 1 net CO 2 emissions coverage rate 1 % Clinker production 100.0 100.0 100.0 100.0 100.0 1.14 Scope 1 specific gross CO 2 emissions kg/t Cementitious Product 681.90 697.92 701.12 708.80 716.59 ƔƔƔƔ 1.15 Scope 1 specific net CO 2 emissions kg/t Cementitious Product 654.20 673.99 676.56 686.08 700.25 ƔƔƔƔ 1.16 Avoided Scope 1 net CO 2 emissions 3 million t 31.2 29.3 27.8 26.3 24.9 ƔƔƔ 1.17 Scope 2 CO 2 emissions 4,5 million t 0.8 0.9 0.9 1.0 1.2 ƔƔƔƔƔ 1.18 Greece 1 million t 0.2 0.3 0.3 0.3 0.5 ƔƔƔƔ 1.19 USA 1 million t 0.1 0.1 0.1 0.1 0.2 ƔƔƔƔ 1.20 Southeastern Europe 1 million t 0.2 0.3 0.3 0.3 0.3 ƔƔƔƔ 1.21 Eastern Mediterranean 1 million t 0.2 0.2 0.2 0.3 0.3 ƔƔƔƔ 104 MANAGEMENT REPORT ESG PERFORMANCE REVIEW code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 1.22 Scope 2 CO 2 emissions coverage rate 1 % Clinker production 100.0 100.0 100.0 100.0 100.0 1.23 Scope 2 specific CO 2 emissions 1 kg/t Cementitious Product 51.50 61.00 62.18 63.99 72.74 ƔƔƔ 1 1 . . 2 24 Scope 3 CO 2 emissions 1,6,7 million t 1.6 n/a n/a n/a n/a ƔƔƔ 1.25 Category 1 - Purchased goods and services 1,7 million t 0.4 n/a n/a n/a n/a ƔƔƔ 1.26 Category 3 - Fuel and energy related activities 1,7 million t 0.7 n/a n/a n/a n/a ƔƔƔ 1.27 Category 4 - Upstream transportation and distribution 1,7 million t 0.1 n/a n/a n/a n/a ƔƔƔ 1.28 Category 6 - Business travels 1,7 million t 0.0 n/a n/a n/a n/a ƔƔƔ 1.29 Category 7 - Employee commuting 1,7 million t 0.0 n/a n/a n/a n/a ƔƔƔ 1.30 Category 9 - Downstreamtransportation and distribution 1,7 million t 0.3 n/a n/a n/a n/a ƔƔƔ Scope 3 CO 2 emissions per region 1.31 Greece 1,7 million t 0.4 n/a n/a n/a n/a ƔƔ 1.32 USA 1,7 million t 0.2 n/a n/a n/a n/a ƔƔ 1.33 Southeastern Europe 1,7 million t 0.4 n/a n/a n/a n/a ƔƔ 1.34 Eastern Mediterranean 1,7 million t 0.5 n/a n/a n/a n/a ƔƔ 1.35 Scope 3 CO 2 emissions coverage rate 1,7 % Clinker production 100.0 n/a n/a n/a n/a 1.36 Scope 3 specific CO 2 emissions 1,7 kg/t Cementitious Product 103.40 116.80 n/a n/a n/a ƔƔƔ 1.37 Conventional fossil fuels substitution rate % Heat 84.5 86.9 86.5 88.0 91.1 ƔƔƔƔƔ 1.38 Alternative fuel substitution rate % Heat 15.5 13.1 13.5 12.0 8.9 ƔƔƔƔƔ EM-CM-130a.1 1.39 Biomass in fuel mix 8 % Heat 4.8 3.8 4.3 3.4 2.8 ƔƔƔƔƔ EM-CM-130a.1 SDG 9.4 105 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 1.40 Fuel mix, energy consumption for clinker and cement production % Heat 100.0 100.0 100.0 100.0 100.0 ƔƔ 1.41 Conventional fossil fuels % Heat 8 84.5 86.9 86.5 88.0 91.1 ƔƔ 1.42 Coal, anthracite, and waste coal % Heat 44.7 33.0 42.8 32.6 29.3 ƔƔ 1.43 Petroleum coke % Heat 28.5 44.8 38.5 51.2 57.3 ƔƔ 1.44 Lignite % Heat 1.2 1.7 1.6 1.0 1.6 ƔƔ 1.45 Other solid fossil fuel % Heat 1.9 1.8 1.4 1.4 1.0 ƔƔ 1.46 Natural gas % Heat 7.4 5.0 1.0 0.5 0.6 ƔƔ 1.47 Heavy fuel (ultra) % Heat 0.3 0.3 0.6 0.8 0.7 ƔƔ 1.48 Diesel oil % Heat 0.4 0.4 0.6 0.5 0.6 ƔƔ 1.49 Gasoline, LPG (Liquified petroleum gas or liquid pr o % Heat 0.1 0.0 0.1 0.1 0.1 ƔƔ 1.50 Alternative fossil and mixed fuels % Heat 15.5 13.0 13.1 11.5 8.3 ƔƔƔƔ 1.51 Tyres % Heat 2.9 3.0 3.1 2.8 2.1 ƔƔƔƔ 1.52 RDF % Heat 5.6 3.6 3.9 1.7 0.8 ƔƔƔƔ 1.53 Impregnated saw dust % Heat 0.7 0.8 0.7 0.7 0.5 ƔƔƔƔ 1.54 Mixed industrial waste % Heat 1.5 1.2 1.4 1.8 1.0 ƔƔƔƔ 1.55 Other fossil based and mixed wastes (solid) % Heat 4.7 4.4 4.0 4.5 3.9 ƔƔƔƔ 1.56 Biomass fuels % Heat 0.1 0.1 0.4 0.5 0.6 ƔƔƔƔ 1.57 Dried sewage sludge % Heat 0.0 0.0 0.0 0.0 0.1 ƔƔƔƔ 1.58 Wood, non-impregnated saw dust % Heat 0.0 0.0 0.3 0.4 0.5 ƔƔƔƔ 1.59 Agricultural, organic, diaper waste, charcoal % Heat 0.0 0.0 0.0 0.0 0.0 ƔƔƔƔ 1.60 Other % Heat 0.0 0.0 0.0 0.0 0.1 ƔƔƔƔ 1.61 Alternative fuels consumption (total) t 335,700 234,451 269,665 244,395 203,170 ƔƔƔƔ EM-CM-130a.1 1.62 Clinker to cement ratio % 81.66 82.44 82.87 83.68 83.78 ƔƔƔ 1.63 Lower carbon products as part of our cement production 1,7,9 % Cement production 45.4 41.3 n/a n/a n/a Ɣ 2.1.2 Material issue: Innovation with emphasis on digitalization and de-carbonization All Activities 1.64 Annual investment in Research and Innovation 7,10 million € 10.74 10.50 7.90 5.80 n/a Ɣ SDG 13.2 SDG 7.2 SDG12.2 SDG 13.1 106 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Notes General Note for the consolidation of data Consolidation (aggregation) of data for the above ESG performance indicators related to the Material Issues • “Future-ready business model in a carbon neutral world” was made on the basis of the percentage of property share for each of the subsidiaries, where TITAN holds a property share of more than 50.0%, also called share of equity for the purposes of non-financial data consolidation. The indicators were calculated according to the share of equity held by the Group at the end of 2021. Performance of previous years was recalculated to reflect changes in share of equity in 2021, if required. A detailed list of TITAN Group subsidiaries and TITAN’s share of equity is provided in the Table 2.5.8 “TITAN Group Basis for Calculating Environmental Performance Indicators, using the Share of equity”, in this section of ESG performance statements. • “Innovation with emphasis on digitalization and de-carbonization” was made with 100.0% contribution for all subsidiaries, where TITAN holds percentage of property share of more than 50.0%. Notes for the external verification, standards, guidance, and terms used Assurance: Specific KPIs denoted in this Table are included in the scope of ERM Certification and Verification Services (ERM CVS) assurance engagement (ERM CVS’ “Independent assurance statement”). Standards: For the reporting standards under TITAN's Global Sectoral Approach, namely the GCCA, UNGC, UNCTAD, TCFD, and SASB, please refer to the section “TITAN’s approach for ESG Performance reporting” in the ESG performance statements. Guidance: TITAN follows the GCCA Sustainability Framework Guidelines, and the Sustainability Guidelines for the monitoring and reporting of CO₂ emissions from cement manufacturing, and coprocessing fuels and raw materials. The above Guidelines had superseded before 2021 the previous – and respective – Guidelines of the WBCSD/CSI, which were the guidance for measuring, reporting and verifying environmental performance until (and including) year 2018. For the Sector standards, see details in Table 2.5.9 “Sector Standards for the Non-financial disclosures in 2021”. Notes on specific KPIs 1. New indicator. 2. Direct CO₂ emissions related to the operation of TITAN’s cement production facilities. 3. Avoided CO 2 emissions is the total accumulated quantity for the period between the specific year and the base year which in the case of CO 2 emissions is 1990 in accordance to the Kyoto protocol. The base year performance for specific net Scope 1 CO 2 emissions was 778.3kg/tCementitious product, adjusted for the equity of year 2021. 4. Indirect CO₂ emissions related to emissions released for the production of the electrical energy consumed at TITAN’s cement production facilities. For their calculation, we use emission factors provided by the supplier of the electrical energy or other publicly available data sources. 5. 2020 figures adjusted based on updated information received after the publication of 2020 IAR. 6. Indirect CO₂ emissions related to the emissions of the supply chain. 7. Relevant information is not available for the specific years denoted as 'n/a'. 8. Biomass rate corresponds to the percentage of total thermal energy consumption that comes from renewable energy sources. 9. Lower carbon products refer to produced cement types with a carbon footprint that is at least 10.0% lower than that of a typical OPC type as well as any cementitious product sold to be used as cement or concrete additive. 10. For the definition of KPI "Annual investment in Research and Innovation" see the section 2.5.10 “Notes for Value Creation Indicators”. Notes for connection of KPIs with the SASB Standards Connection of ESG performance indicators with metrics according to SASB Standards, in specific: - EM-CM-110a.1 under the area “Greenhouse Gas Emissions” for Gross global Scope 1 emissions, percentage covered under emissions-limiting regulations. Also the connection with the EM-CM-110a.2 is provided by the disclosures under the section 'Understanding TITAN', in specific see: 'Making progress towards our ESG Targets', and 'Climate-related financial disclosures (TCFD)'. - EM-CM-130a.1 under the area “Energy Management” for total energy consumed, percentage grid electricity, percentage alternative, and percentage renewable. 107 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2.2 Focus area: Growth-enabling work environment code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.2.1 Material issue: Safe and healthy working environment 2.1 Employee fatalities # 01000ƔƔƔƔ 2.2 Employee fatality rate #/10 4 persons 0.00 1.85 0.00 0.00 0.00 ƔƔƔƔ 2.3 Contractors fatalities # 02020ƔƔƔƔ 2.4 Third-party fatalities # 00000ƔƔƔƔ 2.5 Employee Lost Time Injuries (LTIs) # 10 6 16 17 27 ƔƔƔƔ 2.6 Employee Lost Time Injuries Frequency Rate (LTIFR) #/10 6 h 0.91 0.57 1.44 1.54 2.41 ƔƔƔƔ EM-CM-320a.1 2.7 Employee lost working days 1 d 417 256 637 615 1,220 ƔƔƔ 2.8 Employee Lost Time Injuries Severity Rate 1 d/10 6 h 38.1 24.1 57.4 55.7 109.0 ƔƔƔƔ 2.9 Contractors Lost Time Injuries (LTIs) # 11 10 10 9 7 ƔƔƔƔ 2.10 Contractors Lost Time Injuries Frequency Rate (LTIFR) #/10 6 h 1.55 1.46 1.35 1.12 0.82 ƔƔƔƔ EM-CM-320a.1 2.11 Near misses # 3,603 3,467 3,746 2,169 1,185 Ɣ EM-CM-320a.1 2.12 Training man-hours on health and safety per employee 2 h/person 9.53 6.88 14.10 12.98 12.32 ƔƔ 2.13 Training man-hours on health and safety per contractor 2 h/person 10.83 10.40 12.34 14.88 11.73 ƔƔ 2.14 Expenditures for Health and Safety, Group Total 3,6 € 6,532,210 8,501,138 n/a n/a n/a ƔƔ 2.15 Employee fatalities # 00000ƔƔƔƔ 2.16 Employee fatality rate #/10 4 persons 0.00 0.00 0.00 0.00 0.00 ƔƔƔƔ 2.17 Contractors fatalities # 02020ƔƔƔƔ 2.18 Third-party fatalities # 00000ƔƔƔƔ 2.19 Employee Lost Time Injuries (LTIs) # 7 2 10 8 16 ƔƔƔƔ 2.20 Employee Lost Time Injuries Frequency Rate (LTIF #/10 6 h 1.11 0.33 1.59 1.25 2.41 ƔƔƔƔ EM-CM-320a.1 2.21 Employee lost working days d 283 176 440 416 1,014 ƔƔƔ 2.22 Employee Lost Time Injuries Severity Rate d/10 6 h 44.9 29.2 69.9 65.0 152.8 ƔƔƔƔ 2.23 Contractors Lost Time Injuries (LTIs) # 88866ƔƔƔƔ 2.24 Wellbeing initiatives for employees, Group total for all activities 3,6 # 118 43 n/a n/a n/a SDG 3.6 SDG 3.8 SDG 4.3 SDG 8.8 All activities All activities Cement production activities SDG 3.6 SDG 3.8 SDG 4.3 SDG 8.8 SDG 3.6 SDG 3.8 SDG 4.3 SDG 8.8 108 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Code ESG Performance Indicators Unit Greece and Western Europe USA SEE EM Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2021 Performance by region 2.25 Employee fatalities # 0000ƔƔƔ 2.26 Employee fatality rate #/10 4 persons 0.00 0.00 0.00 0.00 ƔƔƔ 2.27 Contractors fatalities # 0000ƔƔƔ 2.28 Third-party fatalities # 0000ƔƔƔ 2.29 Employee Lost Time Injuries (LTIs) # 0253ƔƔƔ 2.30 Employee Lost Time Injuries Frequency Rate (LTIFR) #/10 6 h 0.00 0.38 2.43 2.17 ƔƔƔ EM-CM-320a.1 2.31 Employee lost working days d 05734416ƔƔ 2.32 Employee Lost Time Injuries Severity Rate d/10 6 h 0.00 10.75 167.16 11.57 ƔƔƔ 2.33 Contractors Lost Time Injuries (LTIs) # 4043ƔƔƔ 2.34 Contractors Lost Time Injuries Frequency Rate (LTIFR) #/10 6 h 2.50 0.00 2.30 0.86 ƔƔƔ EM-CM-320a.1 2021 Performance by activity C Cement Aggregates Ready Mix Other 2.35 Employee fatalities # 0000ƔƔƔ 2.36 Employee fatality rate #/10 4 persons 0.00 0.00 0.00 0.00 ƔƔƔ 2.37 Contractor fatalities # 0000ƔƔƔ 2.38 Third-party fatalities # 0000ƔƔƔ 2.39 Employee Lost Time Injuries (LTIs) # 7030ƔƔƔ 2.40 Employee Lost Time Injuries Frequency Rate (LTIFR) #/10 6 h 1.11 0.00 0.90 0.00 ƔƔƔ EM-CM-320a.1 2.41 Employee lost working days d 283 0 134 0 ƔƔ 2.42 Employee Lost Time Injuries Severity Rate d/10 6 h 44.9 0.0 40.1 0.0 ƔƔƔ 2.43 Contractors Lost Time Injuries (LTIs) # 8120ƔƔƔ 2.44 Contractors Lost Time Injuries Frequency Rate (LTIFR) #/10 6 h 1.34 2.37 3.64 0.00 ƔƔƔ EM-CM-320a.1 SDG 3.6 SDG 3.8 SDG 4.3 SDG 8.6 SDG 8.8 SDG 10.3 SDG 3.6 SDG 3.8 SDG 4.3 SDG 8.6 SDG 8.8 SDG 10.3 109 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.2.2 Material issue: Diverse and Inclusive workplace 2.45 Average employment, Group total 4 # 5,352 5,363 5,382 5,424 5,552 Ɣ 2.46 Number of employees as of 31 December 2020, Group total # 5,358 5,359 5,400 5,365 5,432 Ɣ 2.47 Employee turnover per gender, Group average 3 % 10.62 11.31 12.33 11.03 13.94 Ɣ 2.48 Females % 9.08 10.41 11.11 14.20 14.70 2.49 Males % 10.86 11.48 12.50 10.47 13.49 2.50 Under 30 % 31.84 26.80 28.61 n/a n/a 2.51 Between 30-50 % 10.82 9.86 10.67 n/a n/a 2.52 Over 50 % 6.83 10.68 11.61 n/a n/a 2.53 Employees left, Group total 5 # 569 606 666 592 757 Ɣ 2.54 Under 30 # 121 97 111 119 108 2.55 Between 30-50 # 293 277 309 281 316 2.56 Over 50 # 155 234 246 192 333 2.57 Females #6569739196 2.58 Males # 504 539 593 501 661 2.59 Employee new hires, Group average 5 % 15.47 10.73 14.24 10.27 13.02 Ɣ 2.60 Employee new hires, Group total 5 # 829 575 769 551 707 Ɣ 2.61 Females # 143 77 119 77 123 Ɣ 2.62 Males # 686 498 650 474 584 Ɣ 2.63 Under 30 # 241 140 204 157 200 Ɣ 2.64 Between 30-50 # 415 330 417 294 367 Ɣ 2.65 Over 50 # 173 105 148 100 140 Ɣ 2.66 Full time # 5,247 5,231 5,297 5,342 5,461 Ɣ 2.67 Part Time #3048422835 Ɣ 2.68 Temporary #8180615456 Ɣ SDG 5.4 SDG 8.5 SDG 8.6 SDG 8.8 SDG 10.3 Employee turnover per age group 3,5,6 Employees left per age group 3 Employees left per gender 3 New hires per age group 5 Employment per type 5 Employee new hires per gender 5 110 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.69 Managers # 657 649 641 481 473 Ɣ 2.70 Senior managers # 116 121 114 121 126 Ɣ 2.71 Administration/technical # 1,514 1,459 1,460 1,616 1,654 Ɣ 2.72 Semi skilled/unskilled # 3,071 3,130 3,185 3,214 3,294 Ɣ 2.69 Females # 716 663 657 641 653 Ɣ 2.70 Males # 4,642 4,696 4,743 4,783 4,899 Ɣ 2.71 Share of women in employment, Group average 5 % 13.36 12.37 12.17 11.82 11.76 Ɣ 2.72 Share of women in management, Group average 5 % 17.59 16.49 15.50 16.53 15.69 ƔƔ 2.73 Share of women in Senior Management, Group average 5 % 14.66 14.05 14.91 19.01 16.67 ƔƔ 2.2.3 Material issue: Continuous development of our people 2.74 Training investment per (trained) employee, Group average 3,5 € 205 105 202 205 157 Ɣ Ɣ 2.75 Training investment, Group total 3 € 962,196 485,331 900,495 1,035,398 871,992 Ɣ Ɣ Training investment per gender, Group total 3,5 2.76 Females € 239,806 112,819 209,268 187,153 191,633 Ɣ Ɣ 2.77 Males € 722,390 372,512 691,659 848,245 680,359 Ɣ Ɣ 2.78 Trained employees, Group total 5 # 4,693 4,606 4,465 5,064 4,717 Ɣ 2.79 Share of trained employees (in total workforce), Group average 5 % 87.59 85.95 82.69 93.36 84.96 Ɣ 2.80 Share of trained female employees (i n total female employees). Group average 5 % 96.79 93.21 95.13 97.50 94.03 Ɣ Trained employees per category, Group total 5 2.81 Managers # 689 651 538 643 595 2.82 Senior Managers # 113 106 133 142 178 2.83 Administration/technical # 1,520 1,408 1,824 2,007 1,852 2.84 Semi skilled/Unskilled # 2,371 2,441 1,970 2,272 2,092 Employment per gender 5 SDG 4.3 SDG 4.4 SDG 5.1 SDG 5.5 SDG 8.5 SDG 10.2 SDG 10.3 SDG 16.5 Employment per category 5 SDG 5.4 SDG 8.5 SDG 8.6 SDG 8.8 SDG 10.3 111 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets Trained employees per age group, Group total 2.85 Under 30 # 357 318 461 510 444 Ɣ 2.86 Between 30-50 # 2603 2631 2644 2982 2725 Ɣ 2.87 Over 50 # 1733 1657 1360 1572 1548 Ɣ 2.88 Training hours, Group total # 109,364 79,350 137,272 138,114 155,587 ƔƔƔ 2.89 Average training hours per employee (over the total number of direct employees), and breakdown per gender, Group total 5 # 20.41 14.81 25.42 25.46 28.02 ƔƔ 2.90 Average female # 25.68 18.06 35.32 35.66 37.00 Ɣ 2.91 Average male # 19.60 14.35 24.05 24.10 27.00 Ɣ Training hours per subject, Group total Ɣ 2.92 Company on-boarding 3,6 # 2,651 942 6,414 n/a n/a Ɣ 2.93 Compliance # 8,974 6,359 1,191 1,430 308 ƔƔ 2.94 CSR and Sustainability # 554 525 970 955 211 ƔƔ 2.95 Digital 3,6 # 9,718 2,767 11,767 n/a n/a Ɣ 2.96 Environment # 3,186 2,115 3,722 3,136 4,801 Ɣ 2.97 Foreign languages # 3,692 2,837 3,113 3,929 6,772 Ɣ 2.98 Functional competence # 7,856 4,994 3,512 Ɣ 2.99 Generic competence # 4,711 2,947 6,302 Ɣ 2.100 Health and safety # 50,992 36,912 76,372 69,591 68,200 Ɣ 2.101 Managerial skills # 4,243 3,615 10,297 15,223 19,883 Ɣ 2.102 Other # 1,738 3,620 1,276 2,440 4,716 Ɣ 2.103 Security # 136 586 407 761 754 Ɣ 2.104 Technical know-how # 10,916 11,132 11,931 17,497 22,217 Ɣ 2.105 Share of employees with performance evaluation, Group average 3 % 60.66 58.70 58.80 48.60 48.20 2.106 Share of female employees with performance evaluation, Group average 3,6 % 83.38 82.05 n/a n/a n/a 2.107 Share of female employees in talent pools, Group average 3,6 % 13.90 13.00 n/a n/a n/a SDG 4.3 SDG 4.4 SDG 5.1 SDG 5.5 SDG 8.5 SDG 10.2 SDG 10.3 SDG 16.5 23,152 27,725 112 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Notes General Note for the consolidation of data Consolidation (aggregation) of data for the above ESG performance indicators was made with 100.0% contribution for all subsidiaries, where TITAN holds percentage of property share of more than 50.0%, also called share of equity for the purposes of ESG performance statements data consolidation. A detailed list of TITAN Group subsidiaries and TITAN’s share of equity is provided in the Table TITAN 2.5.8 "Group Basis for Calculating Environmental Performance Indicators", using the Share of equity, in this section of ESG performance statements. Notes for the external verification, standards, guidance, and terms used Assurance: Specific KPIs denoted in this Table are included in the scope of ERM Certification and Verification Services (ERM CVS) assurance engagement (ERM CVS’ “Independent assurance statement”). Standards: For the reporting standards under TITAN's Global Sectoral Approach, namely the GCCA, UNGC, UNCTAD, TCFD, and SASB, please refer to the section ‘TITAN’s approach for ESG Performance reporting’ in the ESG performance statements. Guidance: TITAN follows the GCCA Sustainability Framework Guidelines, and the Sustainability Guidelines for the monitoring and reporting of safety in cement and concrete manufacturing (last edition in February 2020). This document has been agreed within the GCCA to have extended application to concrete and other related activities. Notes on specific KPIs 1. Figure for 2020 was adjusted to include previously unreported data, 2. The KPI was calculated for closing of the reporting period 2020 in accordance with the practice for all Safety data, being the use of "Average Employment" (see Note 3 below). This is consistent with all years prior to 2021. 3. New KPIs and other notes: • “Wellbeing initiatives” was introduced in this report for providing the total number of initiatives of TITAN BUs which aim to support employees on all dimensions of the TITAN Health and Wellbeing framework (the four dimensions are: physical, mental, social, and financial), in a holistic and integrated way. In 2021 all BUs have increased efforts for achieving coverage of the dimensions of TITAN’s Framework, and 8 countries covered all four dimensions, while one country covered three out of four. The KPI aims to strengthen our reporting on performance for the Material Issue Safe and healthy working environment, under the Focus Area Growth-enabling work environment. • “Employee turnover per gender” (females and males), “Employee turnover per age group” (under 30, between 30-50, and over 50), “Employees left per age group”, and “Employees left per gender”, were introduced for the first time in this report, to enlarge the coverage of TITAN’s disclosures on performance related to the Material Issue Material Issue Diverse and Inclusive workplace. • Also new KPIs were introduced for TITAN’s discloser of performance related to the Material Issue Continuous development of our people, in specific: “Share of employees with performance evaluation”, “Share of female employees with performance evaluation”, and “Share of female employees in talent pools”. TITAN follows an inclusive approach for increasing the coverage of employees under the performance evaluation programs on each BU level and engages employees from all categories or employment (managers and senior managers, administration/technical, and employees in the category semi-skilled/unskilled). • Last, for the definition of KPI "Training Investment" see the section 2.5.10 “Notes for Value Creation Indicators”. 4. The calculation of the KPI "Average Employment" was made according to Belgian Law (sec. 165 XIVB of RD of 30 January 2001). 5. Other notes KPIs calculated on the basis of "Average Employment" data for years 2017-2018. As of 2019, the specific KPIs are calculated on the basis of the number of employees as of 31 December. Figures for the KPI "Share of trained female employees (in total female employees)" which were calculated above 100% (because of the Turnover for Females, or other reasons) needed to be reported as 100%. The total hours of training under the subject area “Environment” cover also the hours of training for the topics related to "Decarbonization" which was introduced as a new subject area in the last quarter of 2021 and accounted for insignificant in the total hours of training on Group level. The figures of KPIs for year 2020, related to "Employee new hires" and "Employees left", were amended in order to meet the requirements of TITAN standards and the in-house system for data analytics. 6. Relevant information is not available for the specific years denoted as 'n/a'. Notes for connection of KPIs with the SASB Standards Connection of ESG performance indicators with the metric EM-CM-320a.1 according to SASB Standards, under the area “Workforce Health and Safety”, and in specific for the near misses and frequency rate for full - time employees, and contract employees. 113 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2.3 Focus area: Positive local impact Code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.3.1 Material issue: Environmental positive impact 3.1 Overall coverage rate % 72.0 65.4 74.1 79.8 78.1 ƔƔƔ EM-CM-120a.1 3.2 Coverage rate continuous measurement % 77.8 77.7 78.6 81.0 82.1 ƔƔƔ EM-CM-120a.1 3.3 Dust emissions (total) t 206.9 225.4 177.5 155.9 277.9 ƔƔƔ EM-CM-120a.1 3.4 Specific dust emissions g/t clinker 16.6 19.3 14.7 12.1 19.8 ƔƔƔ EM-CM-120a.1 3.5 Coverage rate for dust emissions % 100.0 100.0 100.0 100.0 100.0 ƔƔƔ EM-CM-120a.1 3.6 Avoided dust emissions 1 t 65,132 60,700 56,600 52,310 47,680 ƔƔƔ 3.7 NOx emissions (total) t 15,729.4 14,962.1 15,316.6 16,880.8 18,863.1 ƔƔƔ EM-CM-120a.1 3.8 Specific NOx emissions g/t clinker 1,263.4 1,282.4 1,268.6 1,307.0 1,345.3 ƔƔƔ EM-CM-120a.1 3.9 Coverage rate for NOx emissions % 100.0 100.0 100.0 100.0 100.0 ƔƔƔ EM-CM-120a.1 3.10 Avoided NOx emissions 1 t 282,474 261,235 241,555 221,025 199,555 ƔƔƔ 3.11 SOx emissions (total) t 3,050.9 2,953.0 2,334.9 2,632.4 2,738.4 ƔƔƔ EM-CM-120a.1 3.12 Specific SOx emissions g/t clinker 245.0 253.1 193.4 203.8 195.3 ƔƔƔ EM-CM-120a.1 3.13 Coverage rate for SOx emissions % 100.0 100.0 100.0 100.0 100.0 ƔƔƔ EM-CM-120a.1 3.14 Avoided SOx emissions 1 t 39,664.7 37,290.0 35,350.0 32,630.0 29,855.0 ƔƔƔ 3.15 TOC emissions (total) t 492.6 435.3 682.2 546.9 710.7 ƔƔ EM-CM-120a.1 3.16 Specific TOC emissions g/t clinker 39.6 37.3 56.5 42.3 50.7 ƔƔ EM-CM-120a.1 3.17 Coverage rate for TOC emissions % 96.4 90.9 98.9 100.0 100.0 ƔƔ EM-CM-120a.1 3.18 PCDD/F emissions (total) mg 339.4 211.3 152.5 227.7 343.4 ƔƔ EM-CM-120a.1 3.19 Specific PCDD/F emissions ng/t clinker 27.3 18.1 12.6 17.6 24.5 ƔƔ EM-CM-120a.1 3.20 Coverage rate for PCDD/F emissions % 83.3 96.8 100.0 100.0 89.3 ƔƔ EM-CM-120a.1 3.21 Hg emissions (total) kg 279.6 360.3 494.5 492.8 478.0 ƔƔ EM-CM-120a.1 3.22 Specific Hg emissions m g/t clinker 22.5 30.9 41.0 38.2 34.1 ƔƔ EM-CM-120a.1 3.23 Coverage rate for Hg emissions % 94.5 100.0 97.0 100.0 96.0 ƔƔ EM-CM-120a.1 3.24 Cd and Tl emissions (total) kg 181.8 166.5 221.3 267.2 241.3 ƔƔ EM-CM-120a.1 3.25 Specific (Cd and Tl) emissions m g/t clinker 14.6 14.3 18.3 20.7 17.2 ƔƔ EM-CM-120a.1 3.26 Coverage rate for (Cd and Tl) emissions % 72.0 77.7 75.1 81.0 78.1 ƔƔ EM-CM-120a.1 3.27 Sb, As, Pb, Cr, Co, Cu, Mn, Ni and V emissions (total) kg 2546.7 2,092.6 2,101.1 2,479.6 3,758.1 ƔƔ EM-CM-120a.1 3.28 Specific (Sb, As, Pb, Cr, Co, Cu, Mn, Ni and V) m g/t clinker 204.6 179.36 174.03 191.99 268.03 ƔƔ EM-CM-120a.1 3.29 Coverage rate for (Sb, As, Pb, Cr, Co, Cu, Mn, Ni and V) emissions % 72.0 77.7 75.1 81.0 78.1 ƔƔ EM-CM-120a.1 3.30 Integrated cement plants and cement grinding plants with certified Environmental Management System (ISO 14001 or similar) % of plants 86.7 86.7 86.7 86.7 86.7 Ɣ Cement production activities Air emissions SDG 3.9 SDG 9.4 114 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 3.31 Environmental complaints 2,3 # 13 2 10 n/a n/a 3.32 Greece 2,3 # 6 2 8 n/a n/a 3.33 USA 2,3 # 0 0 0 n/a n/a 3.34 Southeastern Europe 2,3 # 6 0 1 n/a n/a 3.35 Eastern Mediterranean 2,3 # 1 0 1 n/a n/a 3.36 Sites with rehabilitation plans 4,7 % 91.0 91.0 94.0 78.0 83.0 ƔƔƔ EM-CM-160a.1 3.37 Sites rehabilitated areas over affected areas (cumulative) 3,4,7,8 % 22.6 23.6 n/a n/a n/a Ɣ EM-CM-160a.2 3.38 Sites with Environmental Management System (ISO14001 or similar) % 78.0 79.0 77.0 80.0 83.0 Ɣ EM-CM-160a.1 3.39 Sites in high biodiversity value areas 4,5 # 12 10 10 10 10 ƔƔ EM-CM-160a.1 3.40 Sites with biodiversity management plans 4,6 # 109998ƔƔ EM-CM-160a.1 3.41 Sites with biodiversity management plans % 83.3 90.0 90.0 90.0 80.0 ƔƔƔ EM-CM-160a.1 Investments in environmental protection All activities 3.42 Environmental expenditures across all activities 9 million € 25.3 22.2 26.6 29.1 27.6 ƔƔ 3.43 Environmental management million € 16.7 13.9 16.8 16.3 15.8 ƔƔ 3.44 Reforestation million € 0.5 0.3 0.5 0.5 0.5 ƔƔ 3.45 Rehabilitation million € 0.8 0.7 0.6 0.5 0.5 ƔƔ 3.46 Environmental training and awareness building million € 0.3 0.3 0.2 0.2 0.2 ƔƔ 3.47 Application of best available technologies million € 4.8 4.2 6.4 9.6 8.7 ƔƔ 3.48 Waste management million € 2.0 2.7 2.1 1.9 2.0 ƔƔ SDG 15.3 SDG 15.4 SDG 15.9 SDG 15a SDG 15.3 SDG 15.4 SDG 15.9 SDG 15a SDG 7b SDG 9.4 All activities Rehabilitation Cement production and aggregates activities Biodiversity Cement production and aggregates activities 115 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.3.2 Material issue: Social positive impact 3.49 Donations, Group total 10 € 2,310,864 2,125,725 2,532,248 2,263,920 2,083,370 ƔƔ 3.50 Donations in cash, Group total 10 € 1,836,286 1,560,093 2,020,330 1,626,390 1,498,483 ƔƔ 3.51 Donations in kind, Group total 10 € 474,578 565,633 511,918 637,530 584,887 ƔƔ 3.52 Employees from local community, Group average 11 % 83.31 83.16 83.32 80.79 80.00 3.53 Internships, Group total # 391 251 396 477 910 Ɣ 3.54 New entry level jobs from internships/traineeships, Group total # 24 15 24 23 24 Ɣ 3.55 Internships from Local Community, Group total 2,3 % 83.38 95.62 58.84 61.22 n/a 3.56 Key operations with Community Engagement Plans related to material issues and Group policies 2,3 # 15 of 15 14 of 14 6 of 14 3 of 14 n/a ƔƔƔ 3.57 Total number of Initiatives under Community Engagement Plans, Group total 2,3 # 142 124 n/a n/a n/a 3.58 Total number of Participants to Community Engagement Plans, Group total 2,3 # 2,750 3,633 n/a n/a n/a 3.59 TITAN Employees, volunteers to Community Engagement Plans, Group total 2,3 # 1,873 n/a n/a n/a n/a 3.60 Total amount of “social investment” for the implementation of the Community Engagement Plans, Group total 2,3 million € 1.3 1.5 n/a n/a n/a 3.61 Blood donations (TITAN employees, business partners and communities), Group total 2,3 # 579.0 n/a n/a n/a n/a 2.3.3 Material issue: Economic positive impact 3.62 Local Spend, Group average 3,10 % 65.12 66.95 65.35 n/a n/a ƔƔ SDG 2.1 SDG 2.3 SDG 4.3 SDG 4.4 SDG 9.3 116 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Notes General Note for the consolidation of data Consolidation (aggregation) of data for the above ESG performance indicators related to the Material Issues • “Environmental positive impact” was made on the basis of the percentage of property share for each of the subsidiaries, where TITAN holds a property share of more than 50.0%, also called share of equity for the purposes of non-financial data consolidation. The indicators were calculated according to the share of equity held by the Group at the end of 2021. Performance of previous years was recalculated to reflect changes in share of equity in 2021, if required. A detailed list of TITAN Group subsidiaries and TITAN’s share of equity is provided in the Table 2.5.8 “TITAN Group Basis for Calculating Environmental Performance Indicators”, using the Share of equity, in this section of ESG performance statements. • “Social positive impact” and “Economic positive impact” was made with 100.0% contribution for all subsidiaries, where TITAN holds percentage of property share of more than 50.0%. Notes for the external verification, standards, guidance, and terms used Assurance: Specific KPIs denoted in this Table are included in the scope of ERM Certification and Verification Services (ERM CVS) assurance engagement (ERM CVS’ “Independent assurance statement”). Standards: For the reporting standards under TITAN's Global Sectoral Approach, namely the GCCA, UNGC, UNCTAD, TCFD, and SASB, please refer to the section “TITAN’s approach for ESG Performance reporting” in the ESG performance statements. Guidance: TITAN follows the GCCA Sustainability Framework Guidelines, and the Sustainability Guidelines for the monitoring and reporting of emissions from cement manufacturing, and quarry rehabilitation and biodiversity management. The above Guidelines had superseded before 2021 the previous – and respective – Guidelines of the WBCSD/CSI, which were the guidance for measuring, reporting and verifying environmental performance until (and including) year 2018. For the Sector standards, see details in Table 2.5.9 “Sector Standards for the Non-financial disclosures in 2021”. Notes on specific KPIs 1. Avoided air emissions are the total accumulated quantities (for each specific emission separately) for the period between the specific year and the base year which in the case of air emissions is 2003, the year of publishing the first sustainability report of TITAN Group. The base year performance for specific dust emissions was 370.3g/tClinker, for specific NOx emissions was 2,969.2g/tClinker and for specific SOx emissions was 418.8g/tClinker, adjusted for the equity of year 2021. 2. New indicators. More details: - “Internships from Local Community”, “Total number of Initiatives under Community Engagement Plans”, “Total number of Participants to Community Engagement Plans”, “TITAN Employees, volunteers to Community Engagement Plans”, “Total amount of ‘social investment’ for the implementation of the Community Engagement Plans”, and “Blood donations (TITAN employees, business partners and communities)” were introduced as new KPIs in this report for strengthening our disclosures on performance related to the Material Issue “Social positive impact”. In more specific: • The number of “Internships from Local Community” is calculated as % share of Interns (students or other) who are residents from the local communities, over the total number of Internships, as reported by the KPI “Internships”. • The KPIs of “Total number of Participants to Community Engagement Plans”, “TITAN Employees, volunteers to Community Engagement Plans”, and “Total amount of ‘social investment’ for the implementation of the Community Engagement Plans” are related to the KPI "Key operations with Community Engagement Plans related to material issues and Group policies" which was incorporated for the first time in the ESG performance statements in the TITAN IAR 2020. In 2021 TITAN progressed with the implementation of a new framework guidance for Community Engagement Plans across all BUs and strengthened its approach. The discussion on performance in 2021 is provided in the Management report, section “ESG performance review”, for Material issue: “Social positive impact”. Few definitions for providing more clarity about TITAN’s approach to stakeholders engagement in communities, are as follows: o ”Inform” refers to: Provide (local) Stakeholders with info on the BU Materiality Assessment outcomes and the ESG targets, and assist in understanding problems, alternatives, and solutions, as well as exploring opportunities for win-win collaborative initiatives. o “Consult” refers to: Obtain Stakeholders feedback following the ‘Inform’ stage, and explore synergies of the BU with the local community. o “Involve” refers to: Work directly with Stakeholders, and consider their concerns, aspirations, and expectations from the company (BU). o “Collaborate” refers to: Listen to the input of Stakeholders as part the decision-making of the BU, following the previous 3 stages. Identify best option(s) for solutions, and agree on win-win opportunities for the local community and the company. Plan for implementation jointly with Stakeholders, and agree on the adequate level of advocacy for your decisions and actions. o “Empower” refers to: Stakeholders and the local community can make their decisions and plan for their actions, for leading (their) solution-based efforts. The company aims to be the ‘enabler’ or ‘facilitator’. 3. Relevant information is not available for the specific years denoted as 'n/a'. 117 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 4. Coverage includes all wholly-owned quarries attached to cement plants and quarries for aggregates production. 5. Active quarries within, containing or adjacent to areas designated for their high biodiversity value. See also Table “TITAN Group Quarry Sites with High Biodiversity Value”. 6. Active quarries with high biodiversity value where biodiversity management plans are actively implemented. See also Table “TITAN Group Quarry Sites with High Biodiversity Value”. 7. Performance figures of previous years have been re-calculated and adjusted to reflect the revised baseline (scope) (see Note 2). 8. 2020 is the initial year for disclosing data for this indicator. 9. The definition of “Environmental expenditures across all activities” is equivalent to the definition of “Investment in the Environment”, see section 2.5.10 “Notes for Value Creation Indicators”. 10. For definitions related to "Donations", and "Local Spend", see section 2.5.10 “Notes for Value Creation Indicators” (see the equivalent definitions, respectively: “Total spend on donations and social engagement initiatives”, and “% local spend of TITAN”). 11. Specific information is not available for the operations of TITAN in USA. The percentages for the Group Average are calculated excluding the employment of TITAN in USA. For specific method of calculation see respective Note under the Table 2.2 “Growth-enabling work environment”, part of the ESG performance statements. Notes for connection of KPIs with the SASB Standards Connection of ESG performance indicators with metrics according to SASB Standards, in specific: - EM-CM-120a.1 under the area “Air Quality” for air emissions of pollutants including NOx, SOx, particulate matter (PM10), dioxins/furans, volatile organic compounds (VOCs), polycyclic aromatic hydrocarbons (PAHs), and (7) heavy metals. - EM-CM-160a.1 and EM-CM-160a.2 under the area “Biodiversity Impacts” for the environmental management policies and practices for active sites, and terrestrial acreage disturbed, percentage of impacted area restored (see also Table “TITAN Group Quarry Sites with High Biodiversity Value” part of the ESG performance statements). 118 MANAGEMENT REPORT ESG PERFORMANCE REVIEW TITAN Group Quarry Sites with High Biodiversity Value Site Country Raw Material use Location Status Biodiversity Management Plan Notes Pennsuco Quarry USA Cement and Aggregates Miami Dade Florida Inside area for protection of freshwater ecosystems (wetlands) on local/state level YES According to New Permit (April 2010), Under Lake Belt Plan - 'Restoring Littoral Shelf Areas' BMP developed in 2012 Center Sand Quarry USA Aggregates Clermont, Florida Adjacent to area for preservation of terrestrial ecosystems on local/state level YES Relocate Gopher Tortoise Protected Species into new-created Conservation Area - Monitoring Program ongoing BMP developed in 2013 Corkscrew Quarry USA Aggregates Naples, Florida Adjacent to area for protection of freshwater ecosystems (wetlands) on local/state level YES Preservation of wetlands from invasive species; need to adjust BMP as per the GCCA Sustainability Guidelines for quarry rehabilitation and biodiversity management Zlatna Panega Quarry Bulgaria Cement Zlatna Panega Partly inside NATURA 2000 area for protection of terrestrial ecosystems (SAC) YES Baseline assessment by an "Initial Ecological Scoping Study" (ATKINS). A structured BMP was developed in end 2013 acc. to CSI Guidance; implemented in 2014. Xilokeratia Quarry Greece Cement Milos Island Inside/adjacent to NATURA 2000 area for protection of terrestrial and maritime ecosystems (SAC/SPA) YES Apsalos (West and East) Quarries Greece Cement Apsalos, Pella Inside NATURA 2000 area for protection of terrestrial ecosystems (SPA) YES Aspra Homata I + II Quarries Greece Cement Apsalos, Pella Inside NATURA 2000 area for protection of terrestrial ecosystems (SPA) YES Rethimno Quarry Greece Aggregates Rethimno, Crete Island Inside area for protection of terrestrial ecosystems on national level YES Leros Quarry Greece Aggregates Leros Island Inside area for protection of terrestrial ecosystems on national level YES Biodiversity Study completed in 2018, followed by BMP. Agrinio Quarry Greece Aggregates Agrinio, Aitoloakarnania Inside area for protection of terrestrial ecosystems on national level YES Biodiversity Study completed in 2021, followed by BMP. Thisvi Quarry Greece Aggregates Thisvi, Viotia Adjacent to NATURA 2000 area for protection of marine ecosystems (SCI) NO Biodiversity Study planned for 2022. Drimos Quarry Greece Cement and Aggregates Drimos, Thessaloniki Inside area for protection of terrestrial ecosystems on national level NO Biodiversity Study planned for 2023. Biodiversity Studies for the 'baseline' assessment completed in 2015, followed by BMPs. The Apsalos and Aspra Homata quarries are covered by the same biodiversity study and BMP. Notes 1. The above Table is complementary to the Table 2.3, "Focus area: Positive local impact" , and in specific for the KPIs: a) Active quarries with biodiversity issues, b) Active quarry sites with biodiversity management plans (number), c) Active quarry sites with biodiversity management plans (percentage). 2.In 2020 an updated biodiversity risk assessment was made for all TITAN Group sites with the use of the Integrated Biodiversity Assessment Tool (IBAT). Based on this assessment, 2 new sites (Thisvi Quarry and Drimos Quarry) were added in the above list. 3.The above Table includes the needed disclosures for supporting TITAN's performance monitoring and reporting according to the sectoral commitments (GCCA Sustainability Guidelines for Quarry Rehabilitation and Biodiversity Management, May 2020). Also this information, combined with the disclosures under the respective section of this report, cover the requirements for reporting according to the SASB Standards for "Biodiversity Impacts" and in more specific the KPI EM-CM-160a.1 Description of environmental management policies and practices for active sites. 119 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2.4 Focus area: Responsible sourcing code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.4.1 Material issue: Resource efficienc y , rec y clin g and recover y , contributin g to circular econom y All Activities 4.1 Water consumption (total) million m3 11.3 11.1 11.0 10.7 10.5 ƔƔƔ 4.2 Greece 1 million m3 1.6 1.5 1.5 1.6 1.8 4.3 USA 1 million m3 7.9 7.8 7.7 7.2 6.6 4.4 Southeastern Europe 1 million m3 0.9 0.9 0.9 0.7 0.8 4.5 Eastern Mediterranean 1 million m3 0.9 0.9 0.8 1.1 1.4 4.6 Water withdrawal (total, by source) 2 million m3 4 43.2 41.3 39.8 39.2 35.4 ƔƔƔƔ EM-CM-140a.1 4.7 Ground water million m3 39.8 37.8 36.4 35.5 31.4 EM-CM-140a.1 4.8 Municipal water million m3 1.0 0.9 0.9 1.1 1.3 EM-CM-140a.1 4.9 Rain water million m3 0.2 0.2 0.2 0.2 0.2 EM-CM-140a.1 4.10 Surface water million m3 0.8 0.8 0.8 0.9 1.0 EM-CM-140a.1 4.11 Quarry water used (from quarry dewatering) million m3 0.1 0.1 0.1 0.1 0.1 4.12 Ocean or sea water million m3 1.3 1.3 1.3 1.3 1.3 4.13 Waste water million m3 0.1 0.1 0.1 0.1 0.1 4.14 Water discharge (total, by destination) 3 million m3 31.9 30.2 28.8 28.5 24.9 ƔƔƔƔ 4.15 Surface (river, lake) million m3 30.4 28.7 27.3 27.0 23.5 4.16 Sub-surface water (well) million m3 0.1 0.1 0.1 0.0 0.0 4.17 Ocean or sea million m3 1.3 1.3 1.3 1.3 1.3 4.18 Off-site treatment million m3 0.1 0.1 0.1 0.1 0.1 4.19 Other 4,5 million m3 0.0 n/a n/a n/a n/a Cement and cementitious production activities 4.20 Water consumption (total) million m3 3.8 3.7 3.7 4.0 4.3 ƔƔƔ 4.21 Greece 1 million m3 1.0 1.0 1.0 1.0 1.2 4.22 USA 1 million m3 1.1 1.1 1.1 1.2 1.1 4.23 Southeastern Europe 1 million m3 0.9 0.9 0.9 0.7 0.7 4.24 Eastern Mediterranean 1 million m3 0.8 0.8 0.7 1.0 1.3 4.25 Water withdrawal (total) 2 million m3 7.8 7.6 7.6 7.9 8.3 Ɣ EM-CM-140a.1 4.26 Water discharge (total) 3 million m3 4.0 3.9 3.9 4.0 4.0 Ɣ 4.27 Water recycled (total) million m3 15.2 15.5 15.1 17.7 18.5 ƔƔƔ EM-CM-140a.1 4.28 Specific water consumption l/t Cementitious Product 245.74 260.54 255.70 256.53 259.29 ƔƔƔƔ 4.29 Specific water consumption l/t Cement 250.86 260.82 257.32 259.18 269.80 ƔƔƔƔ 4.30 Water demand covered with recycled water % 66.1 67.2 66.5 69.0 69.0 4.31 Avoided water consumption million m3 36.3 32.5 29.1 25.5 21.8 ƔƔ SDG 6.3 SDG 6.4 SDG 6.5 SDG 6.3 SDG 6.4 SDG 6.5 120 MANAGEMENT REPORT ESG PERFORMANCE REVIEW code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 2.4.1 Material issue: Resource efficiency, recycling and recovery, contributing to circular economy Ready mix concrete activities 4.32 Total water withdrawal million m3 3.1 3.0 3.0 2.9 3.0 ƔƔ 4.33 Specific water withdrawal l/m3 Concrete 572.8 577.8 598.3 589.7 555.5 ƔƔ All Activities 4.34 Thermal energy consumption (total) TJ 44,834 41,229 43,102 45,740 50,114 ƔƔƔ EM-CM-130a.1 4.35 Electrical energy consumption (total) TJ 6,580 6,116 6,328 6,549 6,914 ƔƔƔ EM-CM-130a.1 Cement production activities 4.36 Integrated cement plants with certified Energy Management System (ISO 50001 or similar) % Clinker production 86.2 54.9 40.5 40.7 6.1 ƔƔƔ 4.37 Thermal energy consumption (Cement, grinding plants and attached quarries) TJ 43,756 40,786 42,160 45,176 49,708 ƔƔƔƔƔ EM-CM-130a.1 4.38 Specific thermal energy consumption kcal/kg Clinker 839.5 834.9 833.5 835.6 847.1 ƔƔƔƔƔ 4.39 Greece 1 kcal/kg Clinker 894.5 874.3 865.7 853.8 858.2 ƔƔƔƔ 4.40 USA 1 kcal/kg Clinker 760.2 757.7 752.2 752.0 756.0 ƔƔƔƔ 4.41 Southeastern Europe 1 kcal/kg Clinker 839.3 844.9 843.5 844.1 838.7 ƔƔƔƔ 4.42 Eastern Mediterranean 1 kcal/kg Clinker 848.8 852.5 856.1 863.9 890.9 ƔƔƔƔ 4.43 GWh 1,723 1,604 1,661 1,724 1,826 ƔƔƔƔƔ EM-CM-130a.1 4.44 TJ 6,204 5,773 5,981 6,206 6,573 ƔƔƔƔƔ EM-CM-130a.1 4.45 Specific electrical energy consumption 1 kWh/t Cement 115.0 113.0 115.4 113.7 115.3 Ɣ 4.46 Greece 1 kWh/t Cement 132.1 130.6 137.4 135.6 141.6 Ɣ 4.47 USA 1 kWh/t Cement 123.0 120.7 121.7 105.8 108.2 Ɣ 4.48 Southeastern Europe 1 kWh/t Cement 100.6 104.8 104.5 102.8 103.3 Ɣ 4.49 Eastern Mediterranean 1 kWh/t Cement 106.5 100.4 101.7 109.1 108.6 Ɣ 4.50 Renewable energy as part of total electrical energy consumption 1,5 % Electrical energy consumed 24.0 22.8 n/a n/a n/a Ɣ Electrical energy consumption (Cement, grinding plants and attached quarries) SDG 6.4 SDG 6.5 SDG 7 SDG 12 SDG 7.2 SDG 7.3 SDG 9.4 SDG 12.2 121 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets Ready mix concrete activities 4.51 Specific electrical energy consumption in concrete production kWh/m 3 Concrete 3.7 3.5 3.7 3.8 3.2 ƔƔ SDG 6.4 SDG 6.5 All Activities 4.52 Natural raw materials extracted (total, wet) million t 3 34.9 32.5 32.4 33.6 34.2 Ɣ 4.53 Raw materials extracted for clinker and cement production million t 18.9 17.9 18.5 20.2 21.2 Ɣ 4.54 Raw materials extracted for aggregates million t 16.1 14.5 13.8 13.5 13.0 Ɣ Cement production activities 4.55 Materials consumption (total, dry) million t 22.0 20.6 21.1 22.5 24.4 Ɣ 4.56 Extracted (natural) raw materials consumption (dry) million t 20.5 19.3 19.6 21.2 23.0 4.57 Alternative raw materials consumption (dry) million t 1.5 1.3 1.5 1.2 1.3 4.58 Alternative raw materials use (of total raw materials consumed) % Dry 6.6 6.4 7.1 5.5 5.4 ƔƔ 4.59 Alternative raw materials rate (based on clinker- to-cement (equivalent) factor) % Dry 7.6 7.2 8.1 6.4 6.3 ƔƔƔƔ 4.60 Avoided consumption of natural resources and landfilling of alternative materials and fuels 6 million t 27.5 25.7 24.1 22.4 21.0 ƔƔ All Activities 4.61 Externally recycled waste materials (total, wet ) t 263,729 273,828 236,736 200,684 259,696 ƔƔ 4.62 Reused t 23 125 53 1,832 4,395 4.63 Recycled t 262,928 273,193 236,610 198,831 255,218 4.64 Recovered t 778 510 74 21 83 4.65 Waste disposal, break down by destination-usage (wet) % By mass 100.0 100.0 100.0 100.0 100.0 ƔƔ EM-CM-150a.1 4.66 Reuse % By mass 0.0 0.0 0.0 0.7 1.4 ƔƔ EM-CM-150a.1 4.67 Recycled % By mass 83.3 82.4 76.8 77.1 79.4 ƔƔ EM-CM-150a.1 4.68 Recovered (including energy recovery) % By mass 0.2 0.2 0.0 0.0 0.0 ƔƔ EM-CM-150a.1 4.69 Incineration % By mass 0.0 0.0 0.0 0.0 0.0 ƔƔ EM-CM-150a.1 4.70 Landfilled % By mass 16.4 17.3 23.1 22.1 19.0 ƔƔ EM-CM-150a.1 4.71 Other (incl. storage) % By mass 0.1 0.1 0.1 0.1 0.1 ƔƔ EM-CM-150a.1 SDG 12.2 SDG 12.2 SDG 12.4 SDG 12.5 SDG 12.2 SDG 12.4 SDG 12.5 122 MANAGEMENT REPORT ESG PERFORMANCE REVIEW code ESG Performance Indicators Unit 2021 2020 2019 2018 2017 Assurance GCCA UNGC UNCTAD TCFD SASB SDGs and Targets 4.72 Waste disposal (total, wet) t 3 315,623 331,709 308,218 258,032 321,240 ƔƔ EM-CM-150a.1 4.73 Non-hazardous waste t 315,178 331,201 307,241 255,943 320,436 ƔƔ EM-CM-150a.1 4.74 Hazardous waste t 445 508 977 2,089 803 ƔƔ EM-CM-150a.1 Cement production activities 4.75 Integrated cement plants with “Zero Waste to Landfill” certification 1,5 % Clinker production 56.2 29.5 n/a n/a n/a SDG 12.2 SDG 12.4 Ready mix concrete activities 4.76 Recycled/reused concrete (internally and externally) % Returned concrete 86.0 90.3 86.6 86.9 87.7 ƔƔ SDG 12.2 SDG 12.4 2.4.2 Material Issue: Reliable and Sustainable Supply Chain All Activities 4.77 Key suppliers meeting TITAN ESG standards 5,7 % See Note below n/a n/a n/a n/a SDG 6 SDG 7 SDG 12 SDG 13 SDG 12.2 SDG 12.5 Notes General Note for the consolidation of data Consolidation (aggregation) of data for the above ESG performance indicators related to the Material Issue “Resource efficiency, recycling and recovery, contributing to circular economy” was made on the basis of the percentage of property share for each of the subsidiaries, where TITAN holds a property share of more than 50.0%, also called share of equity for the purposes of non-financial data consolidation. The indicators were calculated according to the share of equity held by the Group at the end of 2021. Performance of previous years was re-calculated to reflect changes in share of equity in 2021, if required. A detailed list of TITAN Group subsidiaries and TITAN’s share of equity is provided in the Table 2.5.8 “TITAN Group Basis for Calculating Environmental Performance Indicators”, using the Share of equity, in this section of ESG performance statements. Notes for the external verification, standards, guidance, and terms used Assurance: Specific KPIs denoted in this Table are included in the scope of ERM Certification and Verification Services (ERM CVS) assurance engagement (ERM CVS’ “Independent assurance statement”). Standards: For the reporting standards under TITAN's Global Sectoral Approach, namely the GCCA, UNGC, UNCTAD, TCFD, and SASB, please refer to the section “TITAN’s approach for ESG Performance reporting” in the ESG performance statements. Guidance: TITAN follows the GCCA Sustainability Framework Guidelines, and the Sustainability Guidelines for the monitoring and reporting of monitoring and reporting of water in cement manufacturing. The above Guidelines had superseded before 2021 the previous – and respective – Guidelines of the WBCSD/CSI, which were the guidance for measuring, reporting and verifying environmental performance until (and including) year 2018. For the Sector standards, see details in Table 2.5.9 “Sector Standards for the Non-financial disclosures in 2021”. 123 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Notes on specific KPIs 1. New indicator. 2. Total withdrawal includes also the water quantities withdrawn by TITAN and supplied to third parties without being used in any of TITAN facilities. 3. Total discharge includes also the water quantities withdrawn by TITAN and supplied to third parties without being used in any of TITAN facilities. 4. Refers to the water quantities withdrawn by TITAN and supplied to third parties without being used in any of TITAN facilities. 5. Relevant information is not available for the specific years denoted as 'n/a'. 6. Avoided natural resources consumption is the total accumulated quantity (for water and raw materials/fuels separately) for the period between the specific year and the base year which in the case of natural resources is 2003, the year of publishing the first sustainability report of TITAN Group. The base year performance for specific water consumption was 503.9lt/tCement, adjusted for the equity of year 2021. According to TITAN’s approach, all quantities of alternative raw materials and fuels would, otherwise, have been handled as waste and would have been landfilled, with subsequent impacts to the local environment, land, water resources, and ecosystems. 7. TITAN progressed in 2021 with building an internal Sustainable Supply Chain Roadmap and establishing: (a) New Group Procurement Policy, and (b) Foundations for ESG criteria to evaluate key suppliers, as defined in accordance with the GCCA Guidance for Sustainable Supply Chain management, and with a meaningful level of spend for TITAN (i.e. 80% of total spend). Notes for connection of KPIs with the SASB Standards Connection of ESG performance indicators with metrics according to SASB Standards, in specific: - EM-CM-130a.1 under the area “Energy Management” for total energy consumed, percentage grid electricity, percentage alternative, and percentage renewable. - EM-CM-140a.1 under the area “Water Management” for total fresh water withdrawn, percentage recycled, percentage in regions with high or extremely high baseline water stress (see also Table “TITAN Group Cement Plant Sites within water-stressed Areas” part of the ESG performance statements). - EM-CM-150a.1 under the area “Waste Management” for amount of waste generated, percentage hazardous, percentage recycled. TITAN Group Cement Plant Sites within water-stressed Areas Site Country Water Stress (Baseline) Antea Albania >80% Zlatna Panega Bulgaria >80% Alexandria Egypt 40-80% Beni Suef Egypt 40-80% Kamari Greece 40-80% Patras Greece 40-80% Thessaloniki Greece 40-80% Kosjeric Serbia 40-80% Tokat Turkey 40-80% N N o otes 1. The water risk assessment for all TITAN Group sites was conducted in 2020 with the use of the World Resources Institute's (WRI) Aqueduct tool. 2. The above Table presents the Cement Plant sites (as the larger water users among Group activities) that operate within water-stressed areas, namely the areas where the Baseline Water Stress Indicator is >40%, as classified by the Aqueduct tool. 3. The Water Stress Indicator measures the ratio of total water withdrawals to available renewable surface and groundwater supplies. Higher values indicate more competition among users. 4. This information for the activities that operate in water-stressed areas, combined with the disclosures under the section 'Non-financial performance overview' of this report, cover also the requirements for reporting according to the SASB Standards for 'Water Management' and in more specific the KPI EM-CM-140a.1 (1) Total fresh water withdrawn, (2) percentage recycled, (3) percentage in regions with High or Extremely High Baseline Water Stress. 124 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Code Governance Core Indicators Notes Performance 2022 Reporting Standards Board structure 5.1 Number and percentage of female board members Number of females: 3 Contribution to the total: 20% 5.2 Number of nationalities represented on the Board 6 Board members by age range 5.3 Under 30 0 5.4 Between 30-50 1 5.5 Over 50 14 5.6 Number of independent board members 8/15 Board effectiveness 5.7 Number of board meetings and attendance rate 1 Seven (7) scheduled meetings were held in 2021, with attendance rate reaching 99.05%. 5.8 Audit and Risk Committee: Number of meetings and attendance rates 2 Six (6) meetings with 100% attendance. 5.9 Nomination Committee: Number of meetings and attendance rates 2 One (1) meeting with 100% attendance. 5.10 Remuneration Committee: Number of meetings and attendance rates 2 One (1) meeting with 100% attendance and one (1) meeting was held by circulation. Compliance and business ethics 5.11 Grievance mechanism (Ethicspoint) coverage 3 100% 5.12 Number of cases reported in EthicsPoint 3 In 2021, 11 cases in total were reported through the EthicsPoint platform, ten of which were classified as allegations and one as an Inquiry (complaint). 5.13 Percentage of unionised employees (%) 4 33.22% 5.14 Percentage of employees covered by Collective Bargain Agreements (CBAs) 5 52.26% 5.15 Average number of hours of training on subjects related to Compliance, per employee 6 1.67 2.5.1 Good governance, transparency and business ethics Notes Note for the standards, guidance, and terms used The KPIs referred in ESG Performance Statements as Governance core indicators are in line with the requirements of the UNCTAD Guidance on reporting of Core Indicators (UNCTAD, 2019), and are connected with the most relevant SDGs and specific Targets for each SDG. Specific KPIs from this list are also essential to reporting on progress with respect to TITAN Group commitments for the UNGC Ten Principles. Notes for specific Governance core indicators 1. Number of board meetings during the reporting period and number of Board members who participate at each Board meeting during the reporting period divided by the total number of directors sitting on the Board multiplied by the number of Board meetings during the reporting period. 2. Number of board meetings during the reporting period and number of Audit committee members who participate at each Audit committee meeting during the reporting period divided by the total number of members sitting on the Audit committee multiplied by the number of Audit committee meetings during the reporting period. 3. Of the ten (10) cases classified inside the TITAN EthicsPoint as allegations, nine (9) cases were thoroughly examined by the respective regional committees and reviewed by the Group Supervisory Committee, while one (1) case is still in process of examining. Out of these nine (9) cases, two (2) were found fully substantiated, one (1) was partially substantiated and six (6) were unsubstantiated. For each of the substantiated cases an action plan for remediation was implemented. In more specific, the cases with action plans related to the areas of 'Environment, Health & Safety’, and ‘People, Diversity and Workplace Respect'. 4. Specific information provided by the Adocim BU under confidentiality for the names of employees. 5. In 2021 this percentage reached 52.3%, slightly increased compared to 51.7% in 2020. The breakdown by employees in USA (TITAN America) and other countries was 9.1% vs. 85.5%, close to the respective figures of 2020 (9.3% and 85.0% respectively). TITAN keeps annual records of number and duration of strikes and lockouts inside internal data collection systems (zero cases recorded in 2021). These disclosures cover the requirements for reporting according to the SASB Standards for 'Labor Relations' and in more specific the metrics (KPIs) EM-MM-310a.1 and EM-MM-310a.2. 6. Average number of hours of training per employee and per year, on Policies & internal regulations of TITAN (priority being on the Code of Conduct, Policies for Human Rights, Anti-Bribery, GDPR, but without considering this list as exhaustive). The KPI is calculated as total hours of training in the subject areas, divided by the total number of employees. TITAN categorizes these training subjects under the overall subject area: "Compliance" (see Table 2.2, for the KPI "Training hours per subject, Group total"). SDG 5.5 SDG 16.5 SDG 16.6 SDG 16.7 UNGC UNCTAD SASB 5 125 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Taxonomy-Eligible Economic Activities Turnover 1 (mEUR) %Turnover 1 (%of Total) OpEx 2 (mEUR) %OpEx 2 (%of Total) CapEx 3 (mEUR) %CapEx 3 (%of Total) Manufacture of cement clinker, cement or alternative binder 1,004.7 58.6% 71.0 60.5% 74.3 58.9% Taxonomy Non-eligible Economic Activities 709.9 41.4% 46.2 39.5% 51.7 41.1% TITAN Group (Total) 1,714.6 100.0% 117.2 100.0% 126.0 100.0% Notes Consolidated data Group level (‘consolidated’ data ‘after elimination’) General Note The Taxonomy Regulation is a key component of the European Commission's action plan to redirect capital flows towards a more sustainable economy. It represents an important step towards achieving carbon neutrality by 2050 in line with EU goals as the Taxonomy is a classification system for environmentally sustainable economic activities. In this section, TITAN as a parent undertaking presents the share of our group turnover, capital expenditure (CapEx) and operating expenditure (OpEx) for the reporting period 2021, which are associated with Taxonomy-eligible economic activities related to the first two environmental objectives (climate change mitigation and climate change adaptation) in accordance with Art. 8 Taxonomy Regulation and Art. 10 (2) of the Art. 8 Delegated Act. Specific Notes for the Taxonomy KPIs 1. The calculation of Turnover covered the revenue recognized pursuant to International Accounting Standard (IAS) 1, paragraph 82(a), as adopted by Commission Regulation (EC) No 1126/2008 (1), and as defined in Article 2, point (5), of Directive 2013/34/EU. The economic activities in this category were associated with NACE code C23.51 in accordance with the statistical classification of economic activities established by Regulation (EC) No 1893/2006. An economic activity in this category is a transitional activity as referred to in Article 10(2) of Regulation (EU) 2020/852 where it complies with the technical screening criteria set out in this Section. The activity complies with the criteria set out in Appendix A to this Annex for climate adaptation. In addition to the economic activity of manufacture of cement clinker, cement or alternative binder, the economic activity of processing and selling of fly ash could also be considered as Taxonomy-eligible activity, although not economically material to disclose, since its contribution to the total Turnover of the Group reached 0.1% in 2021. 2. For calculating the figure of operational expenditures (OpEx), we considered all direct non-capitalized costs that relate to research and development (research and innovation investments), building renovation measures, short-term lease, maintenance and repair, and any other direct expenditures relating to the day-to-day servicing of assets of property, plant, and equipment by TITAN or third party to whom activities are outsourced, that are necessary to ensure the continued and effective functioning of such assets. 3. The capital expenditures (CapEx) covered additions to tangible and intangible assets during 2021 considered before depreciation, amortization, and any re- measurements, including those resulting from revaluations and impairments, for the relevant financial year and excluding fair value changes. Under the CapEx figure, we included costs that are accounted based on IAS 16.73 (e)(i)(iii), IAS 38.118 (e)(i), IAS 40.76 (a)(b), and IFRS 16.53(h). 2.5.2 Taxonomy 126 MANAGEMENT REPORT ESG PERFORMANCE REVIEW 2.5.3 ESG Polices Decarbonization and Digitalization Growth-enabling work environment Positive local impact Responsible sourcing Good governance, transparency and business ethics Environmental Policy ƔƔƔ Occupational Health and Safety (OH&S) Policy Ɣ Code of Conduct Policy √ ƔƔ Diversity and inclusion Policy √ Ɣ CSR Policy Ɣ Procurement Policy √ ƔƔ Whistleblowing Policy Ɣ Human Rights Policy ƔƔƔƔ Anti-Bribery and Corruption Policy Ɣ Competition Law Compliance Policy Ɣ Confict of Interest Policy Ɣ Data Protection Policy ƔƔ Information Security Policy ƔƔ Sanctions Policy Ɣ Group Polices New or Updated in 2021 TITAN Focus Areas mostly relevant 127 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Area Albania Bulgaria Egypt Greece Kosovo North Macedoni Serbia Turkey USA H&S ISO 45001 All operations ISO 45001 All operations ISO 45001 All integrated cement plants ISO 45001 All operations (except 2 terminals) ISO 45001 All operations ISO 45001 All operations ISO 45001 All operations ISO 45001 (1) integrated cement plant, (1) grinding cement plant and (1) RMC unit All operations conform with the regulatory framework of MSHA and OSHA Environment ISO 14001 All operations (except 1 terminal) ISO 14001 All operations ISO 14001 All integrated cement plants ISO 14001 All operations (except 2 terminals) ISO 14001 All operations ISO 14001 All operations ISO 14001 All operations ISO 14001 (1) integrated cement plant, (1) grinding cement plant and (1) RMC unit All operations conform with the regulatory framework of EPA Quality ISO 9001 All operations ISO 9001 All operations (except 2 quarries) ISO 9001 All integrated cement plants ISO 9001 All operations (except 1 quarry) ISO 9001 All operations ISO 9001 All operations (except 1 quarry) ISO 9001 All operations ISO 9001 All operations (except 1 terminal) Quality ASHTO All operations Energy ISO 50001 All RMC units Energy audits (1) integrated cement plant ISO 50001 All integrated cement plants ISO 50001 All integrated cement plants, Energy audits All RMC units All aggregates quarries ISO 50001 (1) integrated cement plant ISO 50001 All integrated cement plants (3) quarries for cement raw materials (1) RMC unit ISO 50001 All integrated cement plants Social GHRMS/SF and SA 8000 All operations GHRMS/SF All operations GHRMS/SF All operations GHRMS/SF All operations GHRMS/SF and SA 8000 All operations GHRMS/SF All operations GHRMS/SF All operations GHRMS/SF All operations GHRMS/SF All operations 2.5.4 Group Management Systems 128 MANAGEMENT REPORT ESG PERFORMANCE REVIEW 2.5.5 Political contributions and Fines and other non-monetary sanctions Country Political contributions 1 (in Euros) Significant fines 2, 3 (in Euros) Total number of non-monetary sanctions 2 Albania 2 0 10,900 0 Brazil 000 Bulgaria 000 Egypt 000 Greece 3 000 Kosovo 000 North Macedonia 000 Serbia 000 Turkey 000 USA 1 20,307 0 0 Notes 1. Total value of political contributions by country, including the total monetary value of financial and in-kind contributions made directly and indirectly. In 2021, TITAN America contributed with the total amount of 20,307 Euros various political organizations in support of local elections in Virginia and Florida. From the total amount spend, 16,334 Euros was offered to support political institutions and candidates in Virginia (payment made by Titan America LLC), and 3,973 Euros was offered to support political institutions and candidates in Florida. Except the above, no other cases of political contributions were recorded, neither financial nor in-kind, directly, or indirectly. 2. Monetary value of significant fines and total number of non-monetary sanctions for non-compliance with laws and regulations, including but not limited to environmental laws and regulations, laws and regulations concerning the provision and use of products and services, labor laws and regulations, and laws and regulations concerning anti-corruption, anti-competitive behavior and anti-trust or monopoly practices. Whereas: TITAN considers 'significant fine' any fine over 10,000 Euros. In 2021 there was one case of significant fine paid: A penalty imposed to Antea Cement (Albania) by the General Customs directorate for unmarked diesel, and related to unpaid Excise tax, in the amount of 10,900 Euros. The case was sent to administrative court in the country for ungrounded claim by the Customs directorate. In 2021 there were four cases of fines imposed and paid by Antea in Albania and its subsidiaries, for different violations of legal requirements for administrative matters, but not considered significant. in specific: An amount of 3,600 EUR imposed by the General Customs directorate for unmarked diesel, related to the above case related to unpaid Excise tax. Also, three fines in the amount of 3,300 Euros each, imposed by the National Business Centre of Albania due to delays in the registration of the Ultimate Beneficiary for each of the companies. The registration was completed in 2021, and the case was attributed to unclear ruling for the pertinent legal requirements, administrative documentation, and applicable deadlines by the state. 3.Also, there was one case of fine related to non-compliance of TITAN's operations in Greece, but not considered significant: A fine of an amount of 6,000 Euros was imposed to, and paid by, Interbeton LLC for a violation of labor law, namely negligence for updating properly the required maintenance records for a concrete pump, which was involved in an occupational accident in 2020. No corruption-related fines were imposed by regulators and courts in the reporting period. The above disclosures cover the requirements for reporting according to the SASB Standards for 'Pricing Integrity and Transparency' and in more specific the metric (KPI) EM-CM-520a.1. 'Total amount of monetary losses as a result of legal proceedings associated with cartel activities, price fixing, and anti-trust activities'. 129 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Area Albania Bulgaria Egypt Greece North Macedonia Kosovo Serbia Turkey USA Total External 1124311316 Internal 1201123 External 1231119 Internal 134 External 1521110 Internal 3148 External 13112531 Internal 213 External 63110 Internal 0 External 1517 Internal 1 1 External 4 3 4 1 10 4 26 Internal 1213119 External 6 7 19 17 20 3 5 31 1 109 Internal 003313141548 2.5.6 Environmental Audits Environmental Management System Energy Management System/Energy audits CO 2 emissions Waste Management Complaints Permitting Other TOTAL 130 MANAGEMENT REPORT ESG PERFORMANCE REVIEW 2.5.7 Consolidated Report on Payments to Governments for extractive operations Group Companies Country Payment type Amount TITAN CEMENT S.A. Greece Quarry Rental Fees/taxes 795,269.00 Quarry Rental Fees 2,127,848.76 Municipality Taxes 667,571.91 Clay Tax 2,333,374.00 Quarry Royalties 1,006,625.00 Clay Tax 3,356,420.00 Quarry Royalties 1,289,823.00 Road maintenance 138,314.00 TBAE EGYPT Quarry Roylaties 221,925.00 Zlatna Panega Cement AD Bulgaria Concession Fees 209,000.00 Cementi Antea Sha Albania Extraction Fees 491,543.00 Titan America LLC USA Sales / Mitigation Fees 369,151.10 SHARRCEM SH.P.K. Kosovo Extraction Royalties 206,903.00 Titan Cementarnica Usje A.D. North Macedonia Concession Fees 236,576.00 Titan Cementara Kosjeric A.D. Serbia Concession Fees 179,435.00 ADOCIM A.S. Turkey Permission/Forestation Fees 372,841.00 TOTAL 14,002,619.77 Note TITAN Cement International S.A. hereby reports, in accordance with article 3:33 of the Belgian Companies and Associations Code, that TITAN Cement Group has paid to municipal authorities of EU Member States and third countries the total amount of €14,002,619.77 for extractive operations in 2021, with the analytical data per country as presented in the above table. As specified in article 6:2 par. 2 of the Royal Decree dated 29 April 2019 on the execution of the Belgian Companies and Associations Code, the limit for disclosing the respective data is set at 100,000€ as a single payment or as a series of related payments. INTERBETON S.A. Greece Alexandria Portland Cement Co Egypt Beni Suef Cement Co Egypt 131 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2.5.8 TITAN Group Basis for Calculating Environmental Performance Indicators, using the Share of equity 1 Region Country Activity 2021 2020 USA USA All 100.00% 100.00% Greece and Western Europe Greece All 100.00% 100.00% Albania All 100.00% 100.00% Bulgaria All 100.00% 100.00% North Macedonia All 100.00% 100.00% Kosovo All 100.00% 100.00% Serbia All 100.00% 100.00% Egypt All 100.00% 100.00% Adocim all activities 75.00% 75.00% Marmara grinding plant 100.00% 100.00% Southeastern Europe Eastern Mediterranean Turkey Note 1. The term "share of equity" is used as a "proxy" of the percentage of property share, and only for the above purposes 132 MANAGEMENT REPORT ESG PERFORMANCE REVIEW 2.5.9 Sector Standards for the Non-financial disclosures in 2021 Sector Association or Initiative Guidelines and other documents of reference Published Sustainability Charter Sustainability Framework Guidelines Sustainability Guidelines for the monitoring and reporting of safety in cement and concrete manufacturing. This document has been agreed within the GCCA to have extended application to concrete and other related activities [Pillar 1] Sustainability Guidelines for the monitoring and reporting of CO 2 emissions from cement manufacturing [Pillar 2] Sustainability Guidelines for the monitoring and reporting of water in cement manufacturing [Pillar 4] Sustainability Guidelines for the monitoring and reporting of emissions from cement manufacturing [Pillar 4] Sustainability Guidelines for co-processing fuels and raw materials in cement manufacturing [Pillar 5] Sustainability Guidelines for quarry rehabilitation and biodiversity management [Pillar 4] Guidance for Sustainable Supply Chain Management [Pillars 1, 3 and 5] (Previously) WBCSD/CSI Recommended Good Practices for: (a) Contractor Safety, and (b) Driving Safety 2009 GCCA Latest edition (publications between 2019 and 2021) Notes The Global Cement and Concrete Association (GCCA) has built its Sustainability Charter around five (5) Sustainability Pillars, to encompass the full sustainability spectrum for its work purposes: Pillar 1: Health and Safety, Pillar 2: Climate Change and Energy, Pillar 3: Social Responsibility, Pillar 4: Environment and Nature and Pillar 5: Circular Economy. The terminology of 'Pillars' is specific to the GCCA Charter of commitments for member companies, and details are available in the Charter and Framework Guidelines in the GCCA website: https://gccassociation.org/sustainability-innovation/sustainability-charter-and-guidelines/ TITAN was actively participant in 2021 in various working groups of the GCCA, contributing with knowhow and expertise, in line with its practice in the previous years. 133 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP General Note for the consolidation of data Consolidation (aggregation) of data for the above Value Creation Core Indicators was made with 100.0% contribution for all BUs where TITAN has property share more than 50.0% (in line with the method of full consolidation in the Financials). The contribution of Turkey included Adocim Cemento Beton Sanayi ve Ticaret AS with 100%. Notes for the standards, guidance, and terms used Most terms related to the Value Creation Core Indicators were adopted from the “Guidance on Core Indicators for entity reporting on the contribution towards the attainment of the Sustainable Development Goals” (in short: UNCTAD Guidance, 2019), and incorporated under the TITAN standards. The related terms are outlined here and connected with the KPIs in the Index above. The figures for the Value Creation Core Indicators are provided in “Understanding TITAN, Creating and sharing value”. Detailed figures are provided in the Report under ‘Creating and sharing value', see also: Tables 2.1, 2.2 and 2.3. 1. The economic value created and distributed to key stakeholders has been calculated using the United Nations – UNCTAD “Guidance on Core indicators for entity reporting on the contribution towards the attainment of the Sustainable Development Goals” (2019 edition). 2. Gross Value added. Revenue minus costs of bought-in materials, goods, and services (called also: Value Added, according to the UNCTAD Guidance, 2019). TITAN’s approach is based on the verified and disclosed Financial Statements for the same reporting period, acc. to the IFRS. 3. Net value added. Revenue minus costs of bought-in materials, goods and services and minus depreciation on tangible assets (UNCTAD Guidance, 2019). TITAN’s approach is based on the verified and disclosed Financial Statements for the same reporting period, acc. to the IFRS. 4a."Total spend on Suppliers, local and international, for goods and services. According to TITAN Standards and the application of the IFRS, and in accordance with the approach for %local spend of TITAN" as defined in 4b below. 4b.% local spend of TITAN. The ratio of spend on local suppliers over the total spend on all suppliers, as a percentage. Costs of local procurement are a general indicator of the extent of an entity’s linkages with the local economy (UNCTAD Guidance, 2019). TITAN uses a bottom-up approach of raising awareness, guiding, and supporting the local BUs, in the direction of gathering – from the respective data sources – all such information, and consolidating on Group level. ‘Local’ are those suppliers which provide goods or services to TITAN and have company tax registration inside the country of interest, same as the country of TITAN BUs’ location and tax registration. For cases of countries with governmental structure characterized as ‘Federation-of-states’ – in specific applies today to USA where different states have ‘local’ governments and vast geographical extent – the term ‘local’ refers to those suppliers with company tax registration in the same state with the tax registration of the BU or location of operations. TITAN discloses the respective figure in Table 2.3 of the ESG Performance Statements. 5. Taxes to national and local authorities. According to TITAN Standards and the application of the IFRS, see Financial Statements. 6. Payments in cash, to shareholders and minorities. According to TITAN Standards and the application of the IFRS, see Financial Statements. 7. Total spend on donations and social engagement initiatives. Total amount of charitable/voluntary donations and investments of funds (both capital expenditures and operating ones) in the broader community where the target beneficiaries are external to the enterprise incurred in the reporting period, in absolute amount (UNCTAD Guidance, 2019). TITAN discloses this amount as "Donations", as equivalent to "charitable/voluntary donations and investments of funds", and in detail in Table 2.3 based on the verified and disclosed Financial Statements for the same reporting period. 8.Investments in environmental protection. Total amount of expenditures (capital and operational) for those investments whose primary purpose is the prevention, reduction and elimination of pollution and other forms of degradation to the environment (UNCTAD Guidance, 2019). TITAN discloses the respective figures in detail in Table 2.3 of the ESG Performance Statements (KPI "Environmental expenditures across all activities"). 9. Salaries (contributions to) pensions, and social benefits, including additional benefits beyond those provided by law. According to TITAN Standards and the application of the IFRS, see Financial Statements. 10. Investments in training of direct employees. Total expenditures including the direct and indirect costs of training for direct employees (including costs such as trainers’ fees, training facilities, training equipment, related travel costs etc.) reported also per employee and per year, and broken down by employee category (UNCTAD Guidance, 2019). TITAN discloses the respective figures in detail in Table 2.2 of the ESG Performance Statements. 11. Investments for Research and Innovation. Total amount of expenditures on research and development (R&D) and Innovation by the reporting entity during the reporting period (UNCTAD Guidance, 2019). It includes all expenditures for the R&D and Innovation activities, and projects, and incl. salaries, participations, travelling and other expenses of our employees which are related directly and indirectly, and other expenditures for promoting innovative technologies and products. TITAN uses the verified and disclosed Financial Statements for the same reporting period. TITAN discloses the respective figure in detail in Table 2.1 of the ESG Performance Statements. 12. Capital expenditures. Capital expenditures, commonly known as CapEx, are funds used by a company to acquire, upgrade, and maintain physical assets such as property, buildings, an industrial plant, technology, or equipment. 2.5.10 Notes for Value Creation Indicators The following Notes are inclusive of definitions for terms used in specific for Value creation and distribution to stakeholders and serves as index of Notes for Table “Creating and sharing value” 134 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Scope Principle Criteria for GC Advanced Level TITAN Approach TITAN Reference Criterion 3 The CoP describes robust commitments, strategies or policies in the area of human rights Criterion 4 The CoP describes effective management systems to integrate the human rights principles Criterion 5 The CoP describes effective monitoring and evaluation mechanisms of human rights integratio TITAN’s Human Rights Policy (updated in 2020) is in line with the UN Guiding Principles on Business and Human Rights (2011). The policy explicitly addresses the provisions of the International Bill of Human Rights (consisting, in addition to the Universal Declaration of Human Rights), of the International Covenant on Economic, Social and Cultural Rights) and the principles concerning fundamental rights set out in the International Labor Organization’s Declaration on Fundamental Principles and Rights at Work. We set targets to improve continuously our performance particularly in the areas identified and prioritized as more material for our stakeholders. IAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Corporate governance and risk management, ESG performance review, and ESG performance statements: Table 1, ESG performance KPIs, Table 2.5.3, and Table 2.5.4. Additional Notes to the ESG performance statements: 1. TITAN received no fines for non-compliance with human rights-related laws and regulations in 2021. 2. Unions, where established, operate freely according to each country’s laws and regulations. 3. Sustainability clauses referring to respect of human rights are included in all tenders for global suppliers and contracts for local suppliers. 4. Security is fundamental for a safe working environment, protection of assets and intellectual property. Third parties providing or interested to provide security services must ensure that their employees are trained appropriately and respect the international standards and principles. 5. A Group-level grievance mechanism is in place to facilitate reporting of potential violations of Group Code of Conduct and respective policies (EthicsPoint). 6. All operations certified according to ISO 14001 and ISO 9001 (see Table 2.5.4) apply mechanisms to record feedback and complaints by key external stakeholders. TITAN Website: Sustainability, and Corporate Governance/Group Policies 3. 2021 TITAN Group Global Compact Advanced Communication on Progress Review (CoP) The contents of TITAN Group 2021 Integrated Annual Report also serve as a progress report on implementation of the ten principles of the UN Global Compact and the Sustainable Development Goals. Since 2015, TITAN communicates performance to stakeholders also aligned with SDGs 2030 and key performance indicators in the ESG Performance statements are accordingly to codified serve understanding of TITAN’s contribution to sustainable development. Implementing the Ten Principles into Strategies and Operations Criterion 1 The CoP describes mainstreaming into corporate functions and business units Criterion 2 The CoP describes value chain implementation TITAN’s commitment to responsible business is embedded into governing objective and business practice, articulated in TITAN’s Code of Conduct and Group Policies for Human Rights, Occupational Health and Safety, Environmental Policy and Climate Mitigation Strategy, Anti- Corruption and Bribery IAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Corporate governance and risk management, ESG performance review, and ESG performance statements: Table 1, ESG Performance KPIs, Table 2.5.3, Table 2.5.4, Table 2.5.7, 2.5.10 Value Creation Core Indicator Index. TITAN Website: Sustainability, and Corporate Governance/Group Policies Human Rights Management Policies and Procedure Principle 1 Businesses should support and respect the protection of internationally proclaimed human rights Principle 2 Businesses should make sure they are not complicit in human rights abuse 135 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Scope Principle Criteria for GC Advanced Level TITAN Approach TITAN Reference IAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Understanding TITAN, (Our business approach in a changing global landscape, Materiality assessment and stakeholder engagement), Corporate governance and risk management (Corporate governance statement), ESG performance review, and ESG performance statements: Table 1, ESG Performance KPIs, Table 2.5.3, Table 2.5.4, 2.5.10 Notes for Value Creation Indicators. Additional Notes to the ESG performance statements: 1. TITAN received no significant fines for non-compliance with labor laws in 2021. There was one case of fine related to non-compliance of TITAN's operations in Greece, but not considered significant. See details in the ESG Statements, Table 2.5.5 Political contributions and Fines and other non-monetary sanctions. 2. Regular meetings with union representatives are conducted with the management throughout the year. Main topics cover among else wages and additional benefits, proposals to improve health and safety conditions at work and other topics raised by employees. Health and Safety Councils or Committees comprising of management and employee representatives are formed at plant level to ensure employee engagement in efforts to improve health and safety performance. 3. A health surveillance program focused on potential impacts like noise, dust and crystalline silica is implemented according to TITAN Group Guidelines. 4. Collective bargaining agreements are applicable to TITAN employees in all countries that such agreements exist. The continuous increase of employment for TITAN operations in countries with limited union presence (compared to other countries with extensive union presence) has led to a trend of relevant decrease of the number of TITAN employees covered by collective bargaining agreements during the last 5 years. For details about 2021 data related to TITAN operations see the ESG Statements, Table 2.5.1 Good governance, transparency and business ethics. TITAN Website: Sustainability, and Corporate Governance/Group Policies Rubust labor Management Policies and Procedures Principle 3 Businesses should uphold the freedom of association and the effective recognition of the right to collective bargaining Principle 4 The elimination of all forms of forced and compulsory labor Principle 5 The effective abolition of child labor Principle 6 The elimination of discrimination in respect of employment and occupation Criterion 6 The CoP describes robust commitments, strategies or policies in the area of labor Criterion 7 The CoP describes effective management systems to integrate the labor principles Criterion 8 The CoP describes effective monitoring and evaluation mechanisms of labor principles TITAN’s People Management Framework safeguards common standards throughout the Group operations and enables the implementation of the Group Human Rights Policy in accordance with international standards and the UN Guiding Principles for Business and Human Rights. The TITAN Group Occupational Health and Safety Policy provides the framework to implement TITAN’s ambition and long-term targets for health and safety at work. Equal opportunities and work-life balance are ensured with the provision of job opportunities and career development, flexible working options for female employees and various additional benefits for employees’ families. 136 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Scope Principle Criteria for GC Advanced Level TITAN Approach TITAN Reference IIAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Understanding TITAN, (Our business approach in a changing global landscape, Creating and Shaping Value, Focusing on Material Issues), Corporate governance and risk management, ESG performance review and ESG performance statements: Table 1, ESG Performance KPIs, Table 2.5.3, Table 2.5.4, Table 2.5.8 and Table 2.5.9.. Additional Notes to the ESG performance statements: 1. In 2021 no cases of significant fines or penalties were recorded, related to noncompliance of TITAN's operations with environmental laws. TITAN Website: Sustainability, and Corporate Governance/Group Policies Robust environmental management policies and procedures Principle 7 Business should support a precautionary approach to environmental challenges Principle 8 Undertake initiatives to promote greater environmental responsibility and Principle 9 Encourage the development and diffusion of environmentally friendly technologies Criterion 9 The CoP describes robust commitments, strategies or policies in the area of environmental stewardship Criterion 10 The CoP describes effective management systems to integrate the environmental principles Criterion 11 The CoP describes effective monitoring and evaluation mechanisms for environmental stewardship TITAN early recognized that Climate Change is a major challenge with planetary impacts and also corporate risks, and committed to playing its part in developing practical solutions at national, regional and global level. The Environmental Policy and Climate Change Mitigation Strategy of TITAN (published in 2018) reflects our commitment to sustainable development and our approach towards addressing the challenges and opportunities of climate change. As a heavy industry also focus on assessing and reducing environmental impacts at each facility while increasing the positive impact through on-going collaborative efforts, extensive use of Best Available Techniques, innovation and adoption of best practice. Environmental due diligence is conducted by internal and external experts on operating facilities and new projects. 137 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Scope Principle Criteria for GC Advanced Level TITAN Approach TITAN Reference IAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Understanding TITAN, Corporate governance and risk management, ESG performance review, and ESG performance statements: Table 1, Table 2.5.1, Table 2.5.3, Table 2.5.4, Table 2.5.5, Table 4. Additional Notes to the ESG performance statements: 1. TITAN received no fines for non-compliance with anti-corruption laws and regulations, and no incidents of legal action for anti-competitive behavior, anti-trust or monopoly practices recorded during 2021. 2. TITAN continues to engage with governments and take public positions on different business issues through business associations and business driven initiatives such as the UN Global Compact and the Global Cement and Concrete Association (GCCA). 3. Since 2020 the Group has established a common platform of use by all countries, providing access to anonymous reporting of incidents to all TITAN employees, called TITAN EthicsPoint. In 2021, 11 cases in total were reported through the EthicsPoint platform, ten (10) of which were classified as allegations and one as an inquiry or complaint. For details about 2021 data related to TITAN's operations see the ESG Statements, Table 2.5.1 Governance Core Indicators. 4. Mechanisms for supporting our communities and local stakeholders to report incidents operate in all countries, while guidance and technical infrastructure is provided to BUs. In more specific TITAN follows the good practice of recording cases of incidents from local communities (as ‘complaints’ or ‘grievance’) through an internal data collection system. No important cases of incidents were recorded in 2021 in any of BUs of TITAN's operations. 5. TITAN’s Code of Conduct ensures transparency regarding relations with political institutions. In 2021, TITAN America contributed with the total amount of 20,307 Euros various political organizations in support of local elections in Virginia and Florida. For details about 2021 data related to TITAN's operations see the ESG Statements, Table 2.5.5 Political contributions and Fines and other non-monetary sanctions. TITAN Website: Sustainability, and Corporate Governance/Group Policies Robust anti- corruption management policies and procedures Principle 10 Business should work against corruption in all its forms, including extortion and bribery Criterion 12 The CoP describes robust commitments, strategies, or policies in the area of anti- corruption Criterion 13 The CoP describes effective management systems to integrate the anti-corruption principle Criterion 14 The CoP describes effective monitoring and evaluation mechanisms for the integration of anti-corruption TITAN acknowledges the risk of bribery and corruption and accordingly endorsed the Global Compact collaborative efforts for the 10th principle. The following TITAN Group policies provide relevant guidance to all employees, underline the principle of non-tolerance, and mandate the BUs to follow regular training to employees: Group Anti- Bribery and Corruption Policy, Conflict of Interest Policy, and Group Code of Conduct. 138 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Scope Principle Criteria for GC Advanced Level TITAN Approach TITAN Reference IAR 2021 Understanding TITAN and Management report. In specific: Understanding TITAN (Our business approach in a changing global landscape, Creating and Sharing Value, Focusing on Material Issues), ESG performance Review, and ESG performance statements: Table 1, ESG Performance KPIs, Table 2.5.1, Table 2.5.3 and Table 2.5.4. Notes - See Criteria 1-18 - Independent Auditors’ Assurance Statement Non-financial performance review according to the UNGC criteria (see criteria 2-14) TITAN Website: Sustainability, and Corporate Governance/Group Policies Taking action in support of broader UN goals and issues The ten principles of the United Nations Global Compact Criterion 15 The CoP describes core business contributions to UN goals and issues Criterion 16 The CoP describes strategic social investments and philanthropy Criterion 17 The CoP describes advocacy and public policy engagement Criterion 18 The CoP describes partnerships and collective action TITAN was among the first 500 signatories of the UN Global Compact initiative and remains a participant at both global and local levels with active engagement in local UNGC Networks in Greece, Serbia and N. Macedonia. TITAN is also member of CSR Europe since 2004 and an elected Board member since 2019. At local member, TITAN is a founding and active member in CSR Hellas, CSR Albania and CSR Kosovo, as well as in the Hellenic Business Council for Sustainable Development where TITAN Greece holds the President's position. As of 2018, TITAN is a member of the Global Cement and Concrete Association (GCCA). IAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Understanding TITAN (Our business approach in a changing global landscape, Creating and Sharing Value, Focusing on Material Issues), ESG performance Review and ESG performance statements: Table 1, ESG Performance KPIs, Table 2.5.3, and Table 2.5.4 TITAN Website: Sustainability, and Corporate Governance/Group Policies Corporate sustainability governance and leadership The Ten principles of the United Nations Global Compact Criterion 19 The CoP describes CEO commitment and leadership Criterion 20 The CoP describes Board adoption and oversight Criterion 21 The CoP describes stakeholder engagement Corporate social responsibility is one of TITAN’s corporate values and underlines its enduring commitment to engage with stakeholders for sustainable development. TITAN CSR policy focus on understanding material issues for key stakeholders and delivering value for all, using available resources. 139 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Scope Principle Criteria for GC Advanced Level TITAN Approach TITAN Reference TITAN Group has no core business operations in countries or areas identified as high-risk conflict- affected IAR 2021 Understanding TITAN and Management report. In specific: Message from the Chairman of the BoD, Message from the Chairman of the Group Executive Committee, Understanding TITAN (Our business approach in a changing global landscape, Creating and Sharing Value, Focusing on Material Issues), Corporate governance and risk management, Performance highlights (Regional performance), ESG performance Review, and ESG performance statements: Table 1, Table 2.5.3 and Table 2.5.4 General Notes - See above, criteria 1-21 Additional Notes to the ESG performance statements: 1. TITAN does not operate in or near areas of conflict, according to data of the Uppsala Conflict Data Program UCDP - see the web site: Uppsala Conflict Data Program (uu.se). 2. TITAN has completed an analysis of Materiality Assessment in 2020 for all countries of operations, including a focus country research in each counrty by third party. The country-level research concluded that no such matters of conflicts had emerged. No new information on the subject matter was noted in the press/madia in any of the countries of our operations, in 2021. 3. TITAN followed a thorough process of addressing Material Issues in all countries of operations in 2020, under the Materiality Analysis and Assessment for all BUs. This process enabled the engagement of TITAN's management in each country, and the due diligence on BUs level with respect to human rights and indigenous peoples' rights. In 2021 TITAN prepared the 'blueprint' of a new campaign for receiving direct feedback from our key stakeholders in each country, in specific for the material issues prioritization for each BU. The survey is planned to be implemented in 2022 and the outcomes will be part of the TITAN IAR 2022. 4. TITAN operated in 2021 a dedicated Group e-platform to record our community initiatives and actions as well as to facilitate their self-assessment and align with our priorities. Community engagement plans are impemented in all countries where we operate, covering programs of initiatives for contributing to the engagement with local stakeholders, and with long-term positive impacts for our communities. See section Social Positive Impact in the Management Report for the assessment of TITAN's community engagehhment initiatives across all countries or operations. The above disclosures (Notes 1-4) cover the requirements for reporting according to the SASB Standards for 'Security, Human Rights and Rights of Indigenous Peoples' and in more specific the metrics (KPIs) EM-MM-210a.1, EM-MM-210a.2, and EM-MM-210a.3. 5. Concerning the SASB Standards under the area of 'Business Ethics and Transparency' and in specific the metric (KPI) 'EM-MM-510a.2' see Table 4. "Transparency International - Corruption Perception Index 2021". TITAN Website: Sustainability, and Corporate Governance/Group Policies Business and peace The Ten principles of the United Nations Global Compact Criterion22 The CoP describes policies and practices related to the Company’s core business operations in high-risk conflict-affected areas stewardship 140 MANAGEMENT REPORT ESG PERFORMANCE REVIEW Country CPI 2021 rank CPI 2020 rank Change in rank 2 USA 1 27 25 Ÿ Greece 58 59 ź Bulgaria 78 69 Ÿ Kosovo 87 104 ź North Macedonia 87 111 ź Turkey 96 86 Ÿ Brazil 1 96 94 Ÿ Serbia 1 96 94 Ÿ Albania 110 104 Ÿ Egypt 117 117 1RFKDQJHLQ 4. Transparency International - Corruption Perception Index 2021 Countries with TITAN key operations sorted by Transparency International CP Index 2021 Notes 1. According to the above Table there were no operations of TITAN's subsidiaries in countries with lower ranking than Egypt, in 2020. There were in total 58 countries which ranked lower, in positions between 123 and 179 in 2021. Please note that in the cases of: Brazil, Serbia, and USA, the CPI 2021 rank was higher (deteriorated) compared to the CPI 2020 rank, although the respective figures for the CPI scoring remained unchanged for these specific countries. This disclosure covers the requirements for reporting according to the SASB Standards for "Business Ethics and Transparency" and in more specific the metric (KPI) EM-MM-510a.2 Production in countries that have the 20 lowest rankings in Transparency International’s Corruption Perception Index. 2. Symbols for the change in rank explained: ▼ Improving conditions in the country reflected by the decrease of rank ▲ Deteriorating conditions in the country reﬂected by the increase of rank 141 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 142 Thessaloniki cement plant, Greece 142 143143 Albania plant, in Tirana 143143143143143 MANAGEMENT REPORT financial review An overview of our ﬁnancial performance and our ﬁnancial statements. 144 MANAGEMENT REPORT FINANCIAL REVIEW Financial performance overview Review of the year 2021 TITAN Cement Group generated record revenues of €1,714.6 million, up 6.7% from 2020, reﬂecting higher demand and a supportive pricing environment. Due to the unexpected spike of input costs in the second semester and despite pricing initiatives that partly alleviated the burden, Earnings Before Interest, Tax, Depreciation and Amortization (EBITDA) declined by 3.6% to €275.2 million. Net Proﬁt after Taxes and minorities (NPAT) climbed to €91.9 million (vs €1.1 million in 2020 and €50.9 million in 2019). This signiﬁcant increase was the result of lower ﬁnance costs, more favourable FX movements and a lower effective tax rate. It should be noted that in 2020 there were €63.9 million one- off charges related to Egypt. Thanks to a successful reﬁnancing strategy the Group lowered signiﬁcantly its ﬁnance costs for a third consecutive year to €33.6 million (€19.0 million lower than 2020 and €30.0 million lower than 2019). Delivery was strong across all Group markets: US operations marked a new milestone with sales revenue at record levels thanks to growing demand, underpinned by healthy macroeconomic conditions. In Greece, the market continued its positive performance, lending further support to the belief that demand is solidly in the upward path of the business cycle. In Southeastern Europe performance was robust. Performance in the Eastern Mediterranean turned positive, thanks to the mix of demand pick-up and better pricing dynamics in Egypt, while in Turkey, despite the volatile economic situation, the Group recorded revenue growth as well. Finally, our Brazilian operations continued to grow signiﬁcantly. Trends in domestic sales volumes were positive across all regions, testifying to strong market fundamentals. At Group level, volumes increased across all product lines: cement, ready-mix concrete, aggregates, building blocks and ﬂy ash. Group cement sales increased by 7% compared to 2020, reaching 18.3 million tons, with US being the main contributor of this increase. Ready-mix concrete sales increased by 2% in 2021, reaching 5.5 million m³ on the back of stronger sales in US and Greece. Aggregates' sales increased by 1% reaching 20.2 million tons, thanks to the strength of the Greek market. Regional review of the year 2021 2021 was a year of record sales for Titan America. Consumption in our markets grew considerably above the US average, as our customers saw their activities expanding and their backlogs increasing. Sales of cement, ready-mix, concrete blocks and ﬂy ash increased, while aggregates sales were maintained at high levels. Activity in Florida beneﬁts as the state develops into a vibrant business and ﬁnancial center, while augmented internal migration trends are generating an increase in housing demand and attendant non-residential construction. Cement consumption also grew in the Mid-Atlantic with business performance being driven by the increased volumes generated by strong residential demand and cement-intensive public works projects. The New York Metropolitan area and New Jersey, also saw cement consumption increase, allowing our import terminal to expand its sales, though higher import freight costs negatively affected its proﬁtability. Considering the strength of the US market and its positive outlook, the Group initiated an ambitious investment program, aimed at expanding the effective supply capacity of its operations and at achieving efficiencies in logistics and production, in order to capture growth. Revenue for TITAN’s US operations increased compared to 2020 reaching $1.2 billion, an increase of 8.6% year on year. In euro terms, revenue increased by 4.7% to €983.6 million. EBITDA reached €158.0 million, a decline of 10.5% compared to 2020 (-6.8% in US $ terms) as operational proﬁtability was constrained by global cost headwinds and supply chain disruptions which reﬂected negatively on import freight, energy, logistics and labor costs. In Greece, cement demand continued to grow at a strong rate, similar to the one recorded in 2020, driven by the increased levels of activity in public and municipal infrastructure projects, as well as growth in residential construction and broader real estate and logistics projects. Tourism activity also picked up, following the slowdown caused by the pandemic. Cement exports remained strong, with the US representing Greece’s biggest export destination. Proﬁtability was nevertheless impacted by the unexpected steep rise in energy and transportation costs in the second half of the year. The Group was able to partly mitigate the effect through product price increases implemented in Q4, with the notable increase in alternative fuel utilization and by further operational efficiencies that resulted from an increased number of digitalization projects across our plants. Total revenue for Greece and Western Europe in 2021 increased by 9.4% to €267.6 million while EBITDA increased by €7.4 million to €23.6 million. Performance in Southeastern Europe was again solid, driven by higher demand and improved pricing. Overall, it was the residential and private commercial works which formed the key sources of demand. The Group continued investing in expanding plant operational efficiency, with two of them reaching more than 10-year production records. Despite the strength of the market and successful price increases earlier in the year, the increase in electricity and fuel costs, which surged especially in the second half of the year, inevitably softened proﬁtability. Revenue for the region overall increased by 7.3% reaching €290.6 million while EBITDA declined by 14.8% versus 2020 reaching €81.9 million, however still above the proﬁtability of 2019. The Eastern Mediterranean region saw a return to positive performance in 2021 amidst continued demand growth, despite the local macroeconomic uncertainties. In Egypt, cement demand started to recover after four years, as a result of stronger construction activity coming from national infrastructure projects and construction of affordable housing. Cement consumption reached 48.5 million tons posting a 6% increase. Moreover, the market regulation agreement set by the Egyptian government on all cement producers in July 2021, has narrowed the gap between supply and demand, leading selling prices to much healthier levels. Group volumes grew and our plants also focused on operational excellence and digitization 145 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP projects, while also exploring new growth opportunities mainly in export markets. In Turkey, despite the volatile economic environment characterized by a 65% depreciation of the local currency, soaring inﬂation of 36% and a contraction in household real income, the economy grew by 9% in 2021, supported by the continuous credit expansion following a series of rate cuts by the Central bank. Domestic cement demand strengthened by 7%, reaching nearly 60 million tons, still approximately 15% below the peak levels of 2017. Group volumes reﬂected this upward trend, as demand continued to grow for private housing, public works in infrastructure projects, as well as exports. Following a few years of weak performance and despite the macroeconomic uncertainties, the Eastern Mediterranean region recorded total revenue of €172.8 million, an increase of 13.9% from 2020. EBITDA was €11.8 million versus a €3.3 million loss in 2020, reﬂecting a signiﬁcant improvement in the EBITDA margin, despite the sharp depreciation of the Turkish Lira. In Brazil the improved economic environment led to stronger construction activity and cement demand grew for a third consecutive year. In the second half of 2021 however, the market witnessed a slight slowdown as inﬂationary pressures started to mount and interest rates increased. Our joint venture Apodi increased its sales volumes at a higher rate than the national average by continuing to penetrate the bulk cement segment, with a focus on the pre-cast industry, the growing regional wind park sector and projects in the renovation and expansion of infrastructure such as the Fortaleza airport. As a result, Apodi posted a signiﬁcant increase in revenue to €83.8 million vs €70.7 million in 2020, while net proﬁt attributable to TITAN Group reached €2.7 million compared to €2.6 million in 2020, posting a 4.6% increase. Financing and Investments In 2021, Group Operating Free Cash Flow reached €104.7 million versus €225.3 million in 2020. Lower OFCF was primarily due to higher capital expenditures by €41.8 million from the catch-up of the 2020 COVID-19 -restrained investment program, higher working capital needs by €48.9 million resulting from stronger business activity and higher levels of fuel inventories. Group capital expenditures during the year reached €126.0 million compared to €84.3 million in 2020, with most of the funding directed to investments focusing on production efficiencies, improved logistics capacities and reduction of carbon footprint. Moreover, the ﬁnal tranche of €40.8 million were paid to IFC for the acquisition of their minority stakes held in the Group's activities in Southeastern Europe and Egypt. In the prevailing low interest environment, the Group took a number of initiatives and succeeded in both lowering its ﬁnance costs and extending the debt maturity proﬁle. Year-end net debt increased to €713.2 million (2020: €684.4 million), following the repayment of a €163.5 million outstanding bond and the conscious reduction of cash balances. Net Debt/EBITDA ratio came at 2.61x. The next signiﬁcant maturities are a bond of €350 million maturing in November 2024 and another of €250 million maturing in mid-July 2027. In December 2021, Standard & Poor’s affirmed its rating for Titan Cement International of ‘BB” with a stable outlook. Resolutions of the Board of Directors • Cancellation of Treasury Shares In June 2021 TITAN Group cancelled 4,122,393 own shares held as Treasury stock, representing 5% of the voting rights. Following this transaction, the share capital of Titan Cement International amounts to €1,159,347,807.86 and is represented by 78,325,475 shares. • Share buy-back In October 2021, the Board decided to implement a share buy-back programme of up to an amount of €10 million for a duration of up to 6 months. Until the end of 2021, 230,141 shares were purchased on Euronext Brussels and the Athens Exchange (ATHEX) for a total consideration of €3.2 million. On December 31st, the Group owned treasury shares representing 1.91% of the voting rights. • Initiation of a new share buy-back programme In March 2022, given the latest market developments, the Board decided to implement a new share buy-back programme. The new programme will begin on or around April 1, 2022, following the end of the current running programme. The new share buy-back programme will be up to €10 million and will have a duration of up to six months. TCI will keep the market fully informed of the progress of the relevant transactions in line with applicable regulations. • Return of Capital Following the authorization granted to the Board of Directors by the Extraordinary Meeting of the Company's Shareholders on 13 May 2019, the Board decided the return of capital of €0.50 per share to all the Shareholders of the Company. All shareholders who are recorded as shareholders on Thursday, 28 April 2022, at 12.00 midnight (CEST) (record date) will be entitled to receive the capital return. Shareholders will receive the payment of the capital return on Tuesday, 5 July 2022, through their custodians, banks, and securities brokers. Outlook The current military conﬂict after the Russian invasion in the Ukraine creates geopolitical uncertainties with macroeconomic implications the extent of which cannot yet be assessed. TITAN Group has no exposure to Ukraine, Russia or affected regions. Nevertheless, the effect on the Group’s businesses from developments in the energy sector and the broader macro implications are anticipated to impact market trends and further increase inﬂation risks. In the US, despite macroeconomic risks, the underlying construction market dynamics remain strong. Residential activity continues to reﬂect the country’s housing deﬁcit with both the multi- and single-family segments driving demand. The 146 infrastructure segment is poised to provide a steady backbone to demand from 2023 onwards, as the full effect of America’s large infrastructure investment drive starts to materialize on the ground. Cost pressures are expected to persist and the Group will continue to address global cost headwinds by adjusting pricing, as evidenced already by the successful price increase implemented in January in both Florida and mid-Atlantic and by the recently announced second round of price increases in Florida. At the same time, TITAN initiated an investment program to signiﬁcantly grow its effective capacity. This centers around the transformation and expansion of the import terminals in Tampa, Florida and in Norfolk, Virginia, including the $60 million construction of two new storage domes. Several other investments and initiatives are in progress aiming to achieve logistics and production efficiencies, which will effectively allow the Group to capture the market’s upside for several years ahead and to improve ﬂexibility and customer service. Concurrently, TITAN America is building on its head start with the full adoption of lower carbon footprint cements across its operations. The impact of the ongoing war in the Ukraine may lead to more uncertainties in Europe overall. There is a negative impact already on the energy sector, the severity of which, as well as the duration, cannot yet be assessed. The European economies are entering a difficult phase, with increased risks of rising inﬂation and a slowdown of economic growth. In Greece, demand growth in the residential segment looks set to continue from a low base, with the larger urban centers which our plants primarily serve, holding the lion’s share of growth. The infrastructure pipeline is ripe with projects scaling up and offering a backlog timeline for the years ahead. The Group is continuing its efforts on all fronts to manage its cost base and minimize its carbon footprint. Alternative fuel utilization is constantly increased, supported by investments in both the Kamari and Thessaloniki plants. The Group is continuing with the roll-out of more environmentally friendly cement products with lower clinker content. Southeastern Europe should continue delivering satisfactory returns, driven primarily by residential and light commercial development, as well as select infrastructure projects, depending on the country. Cost challenges will persist but the Group continues its efforts unabated to address inﬂationary pressures and mitigate their impact on operational proﬁtability. Alternative fuel utilization is increasing, as is the promotion of new products with lower carbon emissions throughout our regional presence. In Egypt the economy is growing driven by large infrastructure projects and the country’s increased LNG exports. Trends of cement demand are positive going forward and the new balance between supply and demand favors a healthier pricing environment. The Group is well-placed to beneﬁt from market dynamics and alternative fuel utilization has been increasing, aiming to both address costs as well as ameliorate the Group’s carbon footprint. The situation remains challenging in Turkey, exacerbated by the geopolitical turbulence on the Black Sea. The outlook for the construction sector is highly dependent on the fortunes of the economy which remains under stress. Successful price increases manage to address the inﬂationary pressures while increased export volumes provide an outlet for the Group. In Brazil, while high commodity prices and the country’s trade surplus should support the economy, global inﬂationary pressures, in an election year, make for a very delicate macroeconomic setting. In 2022, we will continue to harness the advantages offered by decarbonization, digital transformation and business model innovation to beneﬁt our customers, employees, suppliers, and communities, aspiring to deliver to society carbon-neutral concrete by 2050. Treasury shares Following the decision of the Extraordinary General Meeting of Shareholders dated 13 May 2019 which authorized the Board of Directors to acquire and dispose Company’s own shares in accordance with the provisions of article 7:215 ff of the Belgian Companies and Associations Code, in October 2021, the Board decided to implement a share buy-back program of up to a maximum amount of €10 million for a duration of up to 6 months. The Company kept the market fully informed of the progress of the relevant transactions as provided by the applicable regulations. In implementation of this program, during the period from October 14, 2021 until December 31, 2021, the Company acquired directly 90,948 own shares and indirectly through its subsidiary Titan Cement Company S.A. 139,193 shares, representing 0.12% and 0.18% respectively of the share capital of the Company. The total value of these transactions amounted to €3,229,701. On 31.12.2021 the Company holds 412,173 own shares representing 0.53% of the Company’s share capital and Titan Cement Company S.A. (Titan SA), a direct subsidiary of the Company, holds 1,084,976 shares of the Company, representing 1.38% of the Company’s voting rights. Sale of treasury stock in the framework of Stock Option Plans Titan S.A., a direct subsidiary of the Company, sold in 2021 to Titan Group employees, in implementation of existing stock option plans, 123,101 shares of the Company, representing approximately 0.16% of the share capital of the Company, for a total amount of €1,231,010 (i.e.€10/Company share). Going concern disclosure The Board of Directors having taken into account: a. the Company’s ﬁnancial position; b. the risks facing the Company that could impact on its business model and capital adequacy; and c. the fact that no material uncertainties are identiﬁed to the Company’s ability to continue as a going concern in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Financial Statements state that they consider it appropriate for the Company to continue to adopt the going concern basis in preparing its Financial Statements and that no material uncertainties are identiﬁed to the Company’s ability to continue to adopt the going concern basis in preparing its Financial Statements in the foreseeable future and in any event over a period of at least twelve months from the date of approval of the Financial Statements for the ﬁscal year 2021. MANAGEMENT REPORT FINANCIAL REVIEW 147 Viability statement The Board of Directors have assessed the prospects of the Company having regard on its current position and the major risks facing the Company over a period of ﬁve years, which was considered as appropriate to draw conclusions. The Board of Directors have a reasonable expectation that the Company will be able to continue in operation and meet its liabilities as they fall due over the period of their assessment. Annual report of the board of directors and ﬁnancial accounts for the ﬁscal year 2021 The Board of Directors considers that the Annual Report and the Financial Accounts for the ﬁscal year 2021, taken as a whole, are fair, balanced and understandable and provide the information necessary for shareholders to assess the Company’s performance, business model and strategy. INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 148 MANAGEMENT REPORT FINANCIAL REVIEW Financial statements The Annual Consolidated Financial Statements presented on the following pages were approved by the Board of Directors on 7 th of April 2022. Chairman of the Board of Directors Managing Director and Group CFO Efstratios-Georgios Arapoglou Michael Colakides Company CFO Financial Consolidation Director Grigorios Dikaios Athanasios Danas 149 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Consolidated Income Statement (all amounts in Euro thousands) Notes 2021 2020 Restated Revenue 3 1,714,623 1,607,033 Cost of sales 5 -1,403,728 -1,297,763 Gross profit 310,895 309,270 Other operating income 4.i 10,728 7,552 Administrative expenses 5 -153,951 -143,046 Selling and marketing expenses 5 -26,391 -24,278 Net impairment losses on financial assets 20 -1,722 -1,985 Other operating expenses 4.i -831 -1,485 Operating profit before impairment losses on goodwill 3 138,728 146,028 Impairment losses on goodwill 13 - -46,614 Operating profit 138,728 99,414 Other income 4.ii - 100 Finance income 6.i 4,255 636 Finance expenses 6.ii -37,835 -53,197 Loss from foreign exchange differences 6.iii -73 -13,216 Share of profit of associates and joint ventures 15 3,291 3,200 Profit before taxes 108,366 36,937 Income tax 8 -16,811 -35,777 Profit after taxes 91,555 1,160 Attributable to: Equity holders of the parent 91,923 1,126 Non-controlling interests -368 34 91,555 1,160 Basic earnings per share (in €) 9 1.2290 0.0146 Diluted earnings per share (in €) 9 1.2242 0.0145 The primary financial statements should be read in conjunction with the accompanying notes. Year ended 31 December Restated due to change in accounting policy (note 1) 150 (all amounts in Euro thousands) Notes 2021 2020 Restated Profit after taxes 91,555 1,160 Other comprehensive income: Items that may be reclassified to income statement Exchange gains/(losses) on translation of foreign operations 35 6,602 -121,042 Currency translation differences on transactions designated as part of net investment in foreign operation 5,707 -5,058 Gains/(losses) on cash flow hedges 35 3,093 -48 Reclassification to income statement 35 -1,723 - Income tax relating to these items 18 -1,009 1,150 Items that will not be reclassified to income statement Asset revaluation surplus 242 256 Effect due to changes in tax rates 18 263 - Re-measurement gains on defined benefit plans 25 1,240 30 Share of other comprehensive losses of associates and joint ventures -5 -15 Income tax relating to these items 18 -372 -41 Other comprehensive income/(loss) for the year net of tax 14,038 -124,768 Total comprehensive income/(loss) for the year net of tax 105,593 -123,608 Attributable to: Equity holders of the parent 113,625 -116,791 Non-controlling interests -8,032 -6,817 105,593 -123,608 Year ended 31 December The primary financial statements should be read in conjunction with the accompanying notes. Consolidated Statement of Comprehensive Income Restated due to change in accounting policy (note 1) MANAGEMENT REPORT FINANCIAL REVIEW 151 (all amounts in Euro thousands) 31/12/2021 31/12/2020 01/01/2020 Notes Restated Restated Assets Property, plant and equipment 11 1,545,382 1,529,243 1,694,725 Investment properties 12 10,980 11,720 11,628 Goodwill 13 271,986 268,013 344,523 Intangible assets 14 91,444 84,279 85,170 Investments in associates and joint ventures 15 88,753 85,610 113,858 Derivative financial instruments 36 2,488 2,291 - Receivables from interim settlement of derivatives 36 6,185 - 12,937 Other non-current assets 17 18,556 16,957 15,436 Deferred tax assets 18 8,867 12,464 11,453 Total non-current assets 2,044,641 2,010,577 2,289,730 Inventories 19 305,131 248,586 283,519 Receivables and prepayments 20 236,344 185,247 186,565 Income tax receivable 1,611 4,744 5,657 Derivative financial instruments 36 1,715 16,462 1,245 Receivables from interim settlement of derivatives 36 9,079 4,142 3,829 Cash and cash equivalents 21 79,882 206,438 90,388 Total current assets 633,762 665,619 571,203 Assets held for sale 11 238 - - Total Assets 2,678,641 2,676,196 2,860,933 Equity and Liabilities Equity and reserves attributable to owners of the parent 22,23 1,321,626 1,251,362 1,383,035 Non-controlling interests 15.3 15,260 23,994 34,626 Total equity (a) 1,336,886 1,275,356 1,417,661 Long-term borrowings 32 641,461 628,172 776,694 Long-term lease liabilities 33 46,004 38,821 46,126 Derivative financial instruments 36 6,185 - 11,084 Payables from interim settlement of derivatives 36 1,070 2,291 - Deferred tax liability 18 113,604 102,078 96,319 Retirement benefit obligations 25 22,063 22,824 24,912 Provisions 26 56,001 49,550 39,456 Non-current contract liabilities 27 1,692 1,991 - Other non-current liabilities 27 12,849 9,864 47,193 Total non-current liabilities 900,929 855,591 1,041,784 Short-term borrowings 32 89,242 205,656 90,140 Short-term lease liabilities 33 16,378 18,194 17,030 Derivative financial instruments 36 8,742 5,113 2,692 Payables from interim settlement of derivatives 36 - 12,957 1,092 Trade and other payables 28 302,611 278,370 260,009 Current contract liabilities 28 9,998 8,215 13,580 Income tax payable 1,544 4,054 3,251 Provisions 26 12,311 12,690 13,694 Total current liabilities 440,826 545,249 401,488 Total liabilities (b) 1,341,755 1,400,840 1,443,272 Total Equity and Liabilities (a+b) 2,678,641 2,676,196 2,860,933 The primary financial statements should be read in conjunction with the accompanying notes. Consolidated Statement of Financial Position Restated due to change in accounting policy (note 1) INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 152 (all amounts in Euro thousands) Ordinary shares Share premium Share options Ordinary treasury shares Balance at 1 January 2020 1,159,348 5,974 4,904 -117,139 Change in accounting policy (note 1) - - - - Restated balance at 1 January 2020 1,159,348 5,974 4,904 -117,139 Restated profit for the year - - - - Restated other comprehensive loss -- -- Total comprehensive (loss)/income for the year - - - - Deferred tax on treasury shares held by subsidiary - - - - Distribution of reserves (note 10) - - - - Dividends distributed - - - - Purchase of treasury shares (note 22) - - - -8,816 Sale - disposal of treasury shares for option plan (note 22) - - - 1,835 Share based payment transactions (note 24) - - 1,720 - Deferred tax adjustment due to change in income tax rates on revaluation reserves (note 18) ---- Acquisition of non-controlling interest ---- Transfer among reserves (note 23) - - -1,317 - Restated Balance at 31 December 2020 1,159,348 5,974 5,307 -124,120 Restated balance at 1 January 2021 1,159,348 5,974 5,307 -124,120 Profit for the year ---- Other comprehensive income/(loss) - - - - Total comprehensive income/(loss) for the year - - - - Cancellation of treasury shares - - - 92,820 Deferred tax on treasury shares held by subsidiary ---- Distribution of reserves (note 10) ---- Dividends distributed - - - - Purchase of treasury shares (note 22) - - - -3,230 Sale - disposal of treasury shares for option plan (note 22) - - - 2,757 Share based payment transactions (note 24) - - 886 - Tax expenses due to share capital transactions - - - - Deferred tax adjustment on revaluation reserves (note 18) ---- Withholding tax on dividend distribution of subsidiaries - - - - Acquisition of non-controlling interest - - - - Transfer among reserves (note 23) - - -2,280 - Balance at 31 December 2021 1,159,348 5,974 3,913 -31,773 The primary financial statements should be read in conjunction with the accompanying notes. Consolidated Statement of Changes in Equity Attributable to equity holders of the parent MANAGEMENT REPORT FINANCIAL REVIEW 153 Other reserves (note 23) Retained earnings Total Non-controlling interests Total equity -744,764 1,066,842 1,375,165 34,626 1,409,791 1,383 6,487 7,870 - 7,870 -743,381 1,073,329 1,383,035 34,626 1,417,661 - 1,126 1,126 34 1,160 -117,917 - -117,917 -6,851 -124,768 -117,917 1,126 -116,791 -6,817 -123,608 5,294 - 5,294 - 5,294 -15,414 - -15,414 - -15,414 - - - -2,238 -2,238 - - -8,816 - -8,816 - -1,056 779 - 779 - - 1,720 - 1,720 1,117 - 1,117 372 1,489 925 -487 438 -1,949 -1,511 -6,116 7,433 - - - -875,492 1,080,345 1,251,362 23,994 1,275,356 -875,492 1,080,345 1,251,362 23,994 1,275,356 - 91,923 91,923 -368 91,555 21,702 - 21,702 -7,664 14,038 21,702 91,923 113,625 -8,032 105,593 -65,318 -27,502 - - - -9,610 - -9,610 - -9,610 -30,780 - -30,780 - -30,780 - - - -1,143 -1,143 - - -3,230 - -3,230 - -1,526 1,231 - 1,231 - - 886 - 886 - -767 -767 - -767 -213 - -213 - -213 - -414 -414 -23 -437 14 -478 -464 464 - -207,001 209,281 - - - -1,166,698 1,350,862 1,321,626 15,260 1,336,886 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 154 (all amounts in Euro thousands) Notes 2021 2020 Restated Cash flows from operating activities Profit after taxes 91,555 1,160 Depreciation, amortization and impairment of assets 29 136,481 186,181 Interest and related expenses 29 35,972 48,397 Other non-cash items 29 10,733 68,390 Changes in working capital 29 -43,978 5,474 Cash generated from operations 230,763 309,602 Income tax paid -12,172 -10,176 Net cash generated from operating activities (a) 218,591 299,426 Cash flows from investing activities Payments for property, plant and equipment 11,12 -118,910 -76,787 Payments for intangible assets 14 -7,134 -7,509 Proceeds/(payments) of share capital decrease/(increase) in associates and joint ventures 336 -355 Payments for acquisition of subsidiaries, net of cash acquired 16 -45 -330 Proceeds from sale of PPE, intangible assets and investment property 29 8,694 3,110 Proceeds from dividends 934 2,449 Interest received 535 559 Net cash flows used in investing activities (b) -115,590 -78,863 Net cash flows after investing activities (a)+(b) 103,001 220,563 Cash flows from financing activities Acquisition of non-controlling interests -40,814 -21,795 Payments due to share capital decreases -767 - Dividends paid and share capital returns -31,985 -17,615 Payments for shares purchased back 22 -3,230 -8,816 Proceeds from sale of treasury shares 22 1,231 779 Payments for financial assets designated at FVTPL 36 -50 - Interest and other related charges paid 34 -36,153 -49,917 Proceeds from borrowings and derivative financial instruments 34 243,129 478,398 Payments of borrowings and derivative financial instruments 34 -347,968 -459,932 Principal elements of lease 34 -16,309 -15,967 Net cash flows used in financing activities (c ) -232,916 -94,865 Net (decrease)/increase in cash and cash equivalents (a)+(b)+(c) -129,915 125,698 Cash and cash equivalents at beginning of the year 21 206,438 90,388 Effects of exchange rate changes 3,359 -9,648 Cash and cash equivalents at end of the year 21 79,882 206,438 Restated due to change in accounting policy (note 1) The primary financial statements should be read in conjunction with the accompanying notes. Year ended 31 December Consolidated Cash Flow Statement MANAGEMENT REPORT FINANCIAL REVIEW 155 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 156 Contents Page 1. Corporate information and summary of signiﬁcant accounting policies 157 1.1 Basis of preparation 157 1.2 Consolidation 159 1.3 Foreign currency translation 161 1.4 Property, plant and equipment 161 1.5 Investment properties 162 1.6 Goodwill and intangible assets (other than goodwill) 162 1.7 Deferred stripping costs 163 1.8 Impairment of non-ﬁnancial assets other than Goodwill 163 1.9 Leases 163 1.10 Inventories 164 1.11 Trade receivables 164 1.12 Cash and cash equivalents 164 1.13 Share capital 164 1.14 Borrowings 164 1.15 Current and deferred income taxes 165 1.16 Employee beneﬁts 165 1.17 Government grants 166 1.18 CO₂ Emission rights 166 1.19 Provisions and contingencies 166 1.20 Site restoration, quarry rehabilitation and environmental costs 167 1.21 Revenue 167 1.22 Dividend distribution 167 1.23 Segment information 167 1.24 Financial assets 168 1.25 Offsetting ﬁnancial instruments 168 1.26 Impairment of ﬁnancial assets 168 1.27 Derivative ﬁnancial instruments and hedging activities 168 1.28 De-recognition of ﬁnancial assets and liabilities 169 1.29 Borrowing costs 170 1.30 Trade payables 170 1.31 Gains/losses on disposal of non-current assets, restructuring costs and other signiﬁcant gains/ losses 170 2. Signiﬁcant accounting estimates and judgments 170 2.1 Impairment of goodwill 170 2.2 Impairment of joint ventures 170 2.3 Deferred tax assets 170 2.4 Useful lives and residual values 170 2.5 Provision for environmental rehabilitation 170 3. Operating segment information 171 4. Other income and expenses 173 Page 5. Expenses by nature 174 6. Net ﬁnance costs and foreign exchange differences 174 7. Staff costs 174 8. Income tax expense 175 9. Earnings per share 176 10. Dividends and return of capital 176 11. Property, plant and equipment 177 12. Investment property 179 13. Goodwill 180 14. Intangible assets 182 15. Investments in associates, joint ventures and subsidiaries 183 16. Principal subsidiaries, associates and joint ventures 186 17. Other non-current assets 188 18. Deferred income taxes 188 19. Inventories 192 20. Receivables and prepayments 192 21. Cash and cash equivalents 193 22. Share capital and premium 194 23. Other reserves 195 24. Share-based payments 197 25. Retirement and termination beneﬁt obligations 199 26. Provisions 202 27. Other non-current liabilities and non-current contract liabilities 203 28. Trade payables, other liabilities and current contract liabilities 203 29. Cash generated from operations 204 30. Contingencies and commitments 204 31. Related party transactions 206 32. Borrowings 207 33. Leases 208 34. Changes in liabilities arising from ﬁnancing activities 209 35. Financial risk management objectives and policies 210 36. Financial instruments and fair value measurement 215 37. Fiscal years unaudited by tax authorities 217 38. COVID-19 implications 217 39. Events after the reporting period 218 MANAGEMENT REPORT FINANCIAL REVIEW 157 1. Corporate information and summary of signiﬁcant accounting policies TITAN Cement International S.A. (the Company or TCI) is a société anonyme incorporated under the laws of Belgium. The Company’s corporate registration number is 0699.936.657 and its registered address is Rue de la Loi 23, 7th ﬂoor, box 4, 1040 Brussels, Belgium, while it has established a place of business in the Republic of Cyprus in the address Arch. Makariou III, 2-4 Capital Center, 9th ﬂoor, 1065, Nicosia, Cyprus. The Company’s shares are traded on Euronext Brussels, with a parallel listing on Athens Stock exchange and Euronext Paris. The Company and its subsidiaries (collectively the Group) are engaged in the production, trade and distribution of a wide range of construction materials, including cement, concrete, aggregates, cement blocks, dry mortars and ﬂy ash. The Group operates primarily in Greece, the Balkans, Egypt, Turkey, the USA and Brazil. Information on the Group’s structure is provided in note 16. These consolidated ﬁnancial statements were authorized for issue by the Board of Directors on 7 April 2022. Summary of signiﬁcant accounting policies The principal accounting policies adopted in the preparation of these ﬁnancial statements are set out below: 1.1 Basis of preparation These consolidated ﬁnancial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as issued by the International Accounting Standards Board (IASB) and as adopted by the European Union and interpretations (IFRIC) issued by the IFRS Interpretations Committee. The preparation of ﬁnancial statements, in conformity with IFRS, requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the accounting policies. The areas involving a higher degree of judgment or complexity, or areas where assumptions and estimates are signiﬁcant to the ﬁnancial statements are disclosed in signiﬁcant accounting estimates and judgments in note 2. They have also been prepared on historical cost basis, except for investment properties, certain ﬁnancial assets and liabilities (including derivative instruments) and plan assets of deﬁned beneﬁt pension plans measured at fair value. The consolidated ﬁnancial statements are presented in euros and all values are rounded to the nearest thousand (€000), except when otherwise indicated. In addition, they have been prepared with the same accounting policies of the prior ﬁnancial year, except for the application of IFRIC Agenda Decision IAS 19 – Attributing Beneﬁt to Periods of Service (May 2021) and the adoption of new or revised standards, amendments and/or interpretations that are mandatory for the periods beginning on or after 1 January 2021. 1.1.1 Application IFRIC Agenda Decision IAS 19 – Attributing Beneﬁt to Periods of Service On May 24, 2021, the IFRS Interpretations Committee (IFRIC) published its Agenda Decision, Attributing Beneﬁt to Periods of Service (IAS 19 Employee Beneﬁts) and concluded that an entity’s obligation increases until the date when future service by the employee will lead to no material amounts of further beneﬁts. As such, each year of service between age 46 and age 62 leads to further beneﬁts. Prior to age 46 and after age 62 no further beneﬁt accrues. Consequently, the entity attributes the retirement beneﬁt to each year in which the employee renders service from the age of 46 to the age of 62. In accordance with the aforementioned decision, the application of the basic principles of IAS 19 in Greece has been changed. Group entities, which calculated retirement obligations form recruitment until the date when further service by the employee would lead to no material amount of further beneﬁts under the retirement plans, other than from further salary increases, have adjusted their calculations with the decision and recognized retirement obligations for the last 16 years of service until retirement. The application of the IFRIC Agenda Decision is a change in the accounting policy that is applied retrospectively according to paragraphs 19-22 of IAS 8. The affected entities adjusted the opening balance of each related component of equity and the other comparative amounts disclosed for 2020, as if the new accounting policy had always been applied. The effect of the change in the accounting policy is as follows: Impact on the consolidated statement of ﬁnancial position (increase/(decrease)) - all amounts in Euro thousand: 31.12.2020 1.1.2020 Deferred tax assets -2,737 -2,486 Total Assets -2,737 -2,486 Equity and reserves attributable to owners of the parent 8,669 7,870 Non-controlling interests 4 - Total Equity (a) 8,673 7,870 Retirement beneﬁt obligations -11,410 -10,356 Total Liabilities (b) -11,410 -10,356 Total Equity and Liabilities (a)+(b) -2,737 -2,486 Impact on the consolidated income statement (increase/ (decrease)) - all amounts in Euro thousand: 31.12.2020 Cost of sales -213 Gross proﬁt -213 Administrative expenses -386 Selling and marketing expenses -37 Operating proﬁt -636 Finance expenses 122 Proﬁt before taxes -514 Income tax 122 Proﬁt after taxes -392 Attributable to: Equity holders of the parent -392 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 158 Impact on basic and diluted earnings per share (EPS) (increase/ (decrease) in EPS) - all amounts in Euro: 31.12.2020 Basic earnings per share (in €) -0.0051 Diluted earnings per share (in €) -0.0051 Impact on the consolidated statement of comprehensive Income (increase/(decrease)) - all amounts in Euro thousand: 31.12.2020 Proﬁt after taxes -392 Re-measurement losses on deﬁned beneﬁt plans 1,568 Income tax relating to these item -374 Other comprehensive income for the year net of tax 1,194 Total comprehensive income for the year net of tax 802 Attributable to: Equity holders of the parent 798 Non-controlling interests 4 1.1.2 The following new standards and amendments to standards are mandatory for the ﬁrst time for the ﬁnancial year beginning 1 January 2021 and have been endorsed by the European Union: Amendments to IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 Interest Rate Benchmark Reform – Phase 2 (effective 01/01/2021). These amendments address issues that might affect ﬁnancial reporting after the reform of an interest rate benchmark, including its replacement with alternative benchmark rates. The amendments are effective for annual periods beginning on or after 1 January 2021, with earlier application permitted. The Group adopted the amendments on the required effective date. However, it continues to monitor the output from the various industry working groups managing the transition to new benchmark interest rates, including the announcements made by the IBOR regulators as the reform is ongoing. On 31.12.2021, the amendments had no impact on the consolidated ﬁnancial statements of the Group. The Group intends to use the practical expedients in future periods if they become applicable. Borrowings On 31.12.2021, the total amount of the Group’s borrowings is €730.7 million (note 32), from which €596.4 mil. are bonds of ﬁxed interest rate. The Group also has a ﬂoating interest rate revolving facility agreement with available commitment of €208 million, which already includes adequate fall back provisions for a cessation of the referenced benchmark interest rate. On 31.12.2021, the outstanding balance of this facility is €28 million. Moreover, it has local ﬂoating rate debt in Albania and Turkey. None of these debt agreements include ﬂoating interest rates that are based on IBORs. Finally, the Group’s subsidiary in USA, Titan America LLC, maintains committed and uncommitted credit facilities with banks of €33.3 million balance on 31.12.2021. The facilities provide for loans at variable interest rates based on Libor and they include adequate fall back provisions. Derivatives On 31.12.2021, the Group has recognised the following derivatives in the statement of ﬁnancial position (note 35): 1) Various short-term EUR/USD forward contracts, in order to hedge foreign currency risk, 2) Cross currency interest rate swaps, in order to hedge foreign currency exposure and exchange ﬁxed Euro rates to ﬁxed USD rates, 3) Energy swap transactions, in order to hedge ﬂuctuations of natural gas and coal prices, 4) Various forward freight agreements, in order to hedge ﬂuctuations of freight rates and 5) Forward starting interest rate swaps, in order to hedge variability to changes in the future interest payments. None of the aforementioned derivatives are subjects to IBOR reform. Leases On 31.12.2021, the total amount of the Group’s lease liabilities is €62.4 million (note 33). None of the Group’s lease contracts are based on IBORs and, as a result, there will be no impact on the Group’s lease liability balances. Receivables On 31.12.2021, the Group, through its subsidiary Titan America LLC in USA, incorporates in its statement of ﬁnancial position the amount of €43.2 million, as interest-bearing note receivables (note 20). The note receivables are ﬁxed-rate linked. Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions (effective 01/06/2020, with early application permitted). If certain conditions are met, the Amendment would permit lessees, as a practical expedient, not to assess whether particular covid-19- related rent concessions are lease modiﬁcations. Instead, lessees that apply the practical expedient would account for those rent concessions as if they were not lease modiﬁcations. The Group has not received Covid-19-related rent concessions, but plans to apply the practical expedient if it becomes applicable within allowed period of application. 1.1.3 The following new amendments have been issued, is not mandatory for the ﬁrst time for the ﬁnancial year beginning 1 January 2021 but have been endorsed by the European Union: Amendment to IFRS 16 Leases Covid 19-Related Rent Concessions beyond 30 June 2021 (effective 01/04/2021, with early application permitted). The amendments extend, by one year, the May 2020 amendment that provides lessees with an exemption from assessing whether a COVID-19-related rent concession is a lease modiﬁcation. In particular, the amendment permits a lessee to apply the practical expedient regarding COVID-19-related rent concessions to rent concessions for which any reduction in lease payments affects only payments originally due on or before 30 June 2022 (rather than only payments originally due on or before 30 June 2021). The amendment is effective for annual reporting periods beginning on or after 1 April 2021 (earlier application permitted, including in ﬁnancial statements not yet authorised for issue at the date the amendment is issued). MANAGEMENT REPORT FINANCIAL REVIEW 159 Amendments to IFRS 3 Business Combinations; IAS 16 Property, Plant and Equipment; IAS 37 Provisions, Contingent Liabilities and Contingent Assets as well as Annual Improvements (effective 1 January 2022). The package of amendments includes narrow- scope amendments to three Standards as well as the Board’s Annual Improvements, which are changes that clarify the wording or correct minor consequences, oversights or conﬂicts between requirements in the Standards. • Amendments to IFRS 3 Business Combinations update a reference in IFRS 3 to the Conceptual Framework for Financial Reporting without changing the accounting requirements for business combinations. • Amendments to IAS 16 Property, Plant and Equipment prohibit a company from deducting from the cost of property, plant and equipment amounts received from selling items produced while the company is preparing the asset for its intended use. Instead, a company will recognise such sales proceeds and related cost in proﬁt or loss. • Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets specify which costs a company includes when assessing whether a contract will be loss-making. • Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases. 1.1.4 The following new standards and amendments have been issued, but are not mandatory for the ﬁrst time for the ﬁnancial year beginning 1 January 2021 and have not been endorsed by the European Union: Amendments to IAS 1 ‘Presentation of Financial Statements: Classiﬁcation of Liabilities as current or non-current’ (effective 01/01/2023), affect only the presentation of liabilities in the statement of ﬁnancial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. They: • Clarify that the classiﬁcation of liabilities as current or non- current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the “right” to defer settlement by at least twelve months and make explicit that only rights in place “at the end of the reporting period” should affect the classiﬁcation of a liability; • Clarify that classiﬁcation is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services. Amendments to IAS 1 Presentation of Financial Statements and IFRS Practice Statement 2: Disclosure of Accounting policies (effective 1 January 2023). The amendments aim to improve accounting policy disclosures and to help users of the ﬁnancial statements to distinguish between changes in accounting estimates and changes in accounting policies. The IAS 1 amendment requires companies to disclose their material accounting policy information rather than their signiﬁcant accounting policies. Further, the amendment to IAS 1 clariﬁes that immaterial accounting policy information need not be disclosed. To support this amendment, the Board also amended IFRS Practice Statement 2, ‘Making Materiality Judgements’, to provide guidance on how to apply the concept of materiality to accounting policy disclosures. The amendments are effective for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted (subject to any local endorsement process). Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Deﬁnition of Accounting Estimates (effective 1 January 2023). The amendment to IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors, clariﬁes how companies should distinguish changes in accounting policies from changes in accounting estimates. The amendments are effective for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted (subject to any local endorsement process). Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (effective 1 January 2023). The amendments clarify how companies account for deferred tax on transactions such as leases and decommissioning obligations. The main change in the amendments is an exemption from the initial recognition exemption of IAS 12.15(b) and IAS 12.24. Accordingly, the initial recognition exemption does not apply to transactions in which equal amounts of deductible and taxable temporary differences arise on initial recognition. The amendments are effective for annual reporting periods beginning on or after 1 January 2023. Early adoption is permitted. 1.2 Consolidation 1.2.1 Subsidiaries The consolidated ﬁnancial statements comprise the ﬁnancial statements of the Company and its subsidiaries. Subsidiaries are all entities (including special purpose entities) over which the Group has control. The Group controls an entity when the Group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Group. They are deconsolidated from the date that control ceases. The Group uses the full acquisition method of accounting to account for business combinations. The consideration transferred for the acquisition of a subsidiary is the fair value of the assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Acquisition related costs are expensed as incurred. Identiﬁable assets acquired and liabilities and contingent liabilities assumed in a business combination are measured initially at their fair value at the acquisition date. The Group recognises any non-controlling interest in the acquiree on an acquisition- by-acquisition basis either at fair value or at the non-controlling interest’s proportionate share of the acquiree’s net assets. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is re-measured to fair value at the acquisition date; any gains or losses arising from such re-measurement are recognized in the income statement. Any contingent consideration to be transferred by the Group INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 160 is recognised at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration that is deemed to be an asset or liability is recognised in accordance with IFRS 9 in proﬁt or loss. Contingent consideration that is classiﬁed as equity is not re-measured, and its subsequent settlement is accounted for within equity. Goodwill is initially measured at cost, being the excess of the aggregate of the consideration transferred, the amount recognised for non-controlling interest and the fair value of any other participation previously held in the subsidiary acquired over the net identiﬁable assets acquired and liabilities assumed. If the fair value of the net assets acquired is in excess of the aggregate consideration transferred, the amount recognized for non- controlling interest and the fair value of any other participation previously held in the subsidiary acquired the gain is recognised in proﬁt or loss (note 1.6). Cost is adjusted to reﬂect changes in consideration arising from contingent consideration amendments. The subsidiaries’ ﬁnancial statements are prepared as of the same reporting date and using the same accounting policies as the parent company. Intra-group transactions, balances and unrealised gains/losses on transactions between group companies are eliminated. 1.2.2 Changes in ownership interests in subsidiaries without change of control Transactions with non-controlling interests that do not result in loss of control are accounted for as transactions with the owners in their capacity as owners. The difference between consideration paid and the relevant share acquired of the carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-controlling interests are also recorded in equity. Any proﬁt or loss and any item of the Statement of Other Comprehensive Income is allocated between the share-holders of the parent and the non-controlling interest, even if the allocation results in a deﬁcit balance of the non-controlling interest. 1.2.3 Disposal of subsidiaries When the Group ceases to have control any retained interest in the entity is re-measured to its fair value at the date when control is lost, with the change in carrying amount recognised in proﬁt or loss. The fair value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint venture or ﬁnancial asset. In addition, any amounts previously recognised in other comprehensive income in respect of that entity are accounted for as if the Group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognised in other comprehensive income are reclassiﬁed to proﬁt or loss. 1.2.4 Joint arrangements Investments in joint arrangements are classiﬁed as either joint operations or joint ventures depending on the contractual rights and obligations each investor has rather than the legal structure of the joint arrangement. The Group has assessed the nature of its joint arrangement and determined it to be a joint venture. Joint ventures are consolidated with the equity method of consolidation. Under the equity method of accounting, interests in joint ventures are initially recognized at cost and adjusted thereafter to recognize the Group’s share of the post-acquisition proﬁts or losses and movements in other comprehensive income. When the Group’s share of losses in a joint venture equals or exceeds its interests in the joint ventures (which includes any long- term interests that, in substance, form part of the Group’s net investment in the joint ventures), the Group does not recognize further losses, unless it has incurred obligations or made payments on behalf of the joint ventures. Unrealized gains on transactions between the Group and its joint ventures are eliminated to the extent of the Group’s interest in the joint ventures. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of joint ventures have been adjusted where necessary to ensure consistency with the policies adopted by the Group. The ﬁnancial statements of the joint venture are prepared as of the same reporting date with the parent company. 1.2.5 Associates Associates are entities over which the Group has signiﬁcant inﬂuence (holds directly or indirectly 20% or more of the voting power of the entity) but which it does not control. Investments in associates are accounted for using the equity method of accounting and are initially recognised at cost. The Group’s investment in associates includes goodwill (net of any cumulative impairments losses) identiﬁed on acquisition. Under the equity method the Group’s share of the post-acquisition proﬁts or losses is recognised in the income statement and its share of post-acquisition movements in other comprehensive income is recognized in other comprehensive income with a corresponding adjustment to the carrying amount of the investment. When the Group’s share of losses in an associate equals or exceeds its interest in the associate, the Group does not recognize further losses, unless the Group has incurred legal or constructive obligations or made payments on behalf of the associates. If the ownership interest in an associate is reduced but signiﬁcant inﬂuence is retained, only a proportionate share of the amount previously recognized in other comprehensive income is reclassiﬁed to proﬁt or loss where appropriate. The Group determines at each reporting date whether there is any objective evidence that the investment in the associate is impaired. If this is the case, the Group calculates the amount of the impairment as the difference between the recoverable amount of the associate and its carrying value and recognizes the amount adjacent to “share of proﬁt/(loss) of associates and joint ventures” in the income statement. Proﬁt and losses resulting from upstream and downstream transactions between the Group and its associate are recognized in the Group’s ﬁnancial statements only to the extent of unrelated investor’s interests in the associates. Unrealized gains on transactions between the Group and its associates are eliminated to the extent of the Group’s interest in the associates; unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred. Accounting policies of associates have been adjusted where MANAGEMENT REPORT FINANCIAL REVIEW 161 necessary to ensure consistency with the policies adopted by the Group. The ﬁnancial statements of the associates are prepared as of the same reporting date with the parent company. 1.3 Foreign currency translation Functional and presentation currency Items included in the ﬁnancial statements of each entity in the Group are measured in the functional currency, which is the currency of the primary economic environment in which each Group entity operates. The consolidated ﬁnancial statements are presented in Euros. Transactions and balances Foreign currency transactions are translated into the functional currency using the exchange rates (i.e. spot rates) prevailing at the dates of the transactions or valuation where items are re-measured. Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation at year-end exchange rates of monetary assets and liabilities denominated in foreign currencies are recognised under ﬁnance function in the account “gain/(loss) from foreign exchange differences” of the income statement, except when deferred in other comprehensive income as qualifying net investment hedges. When the related investment is disposed of, the cumulative amount is reclassiﬁed to proﬁt or loss. Exchange differences arising from intragroup long term loans and receivables that are designated as part of a reporting entity's net investment in a foreign operation shall be recognised in proﬁt or loss in the separate ﬁnancial statements of the reporting entity, or, of the individual ﬁnancial statements of the foreign operation, as appropriate. In the consolidated ﬁnancial statements such exchange differences shall be recognized in other comprehensive income and included in “currency translation differences reserve on transactions designated as part of net investment in foreign operation” in other reserves. Where settlement of these intragroup long term loans and receivables is planned or is likely to occur in the foreseeable future, then these transactions cease to form part of the net investment in the foreign operation. The exchange differences arising up to that date are recognized in other comprehensive income and after that date, they are recognized in proﬁt or loss. On disposal of the net investment in a foreign operation, the accumulated in other reserves exchange differences are reclassiﬁed from equity to proﬁt or loss. Translation differences on non-monetary ﬁnancial assets and liabilities, such as equity investments held at fair value are included in the income statement. Translation differences on non-monetary ﬁnancial assets, such as equities classiﬁed at fair value through other comprehensive income, are included in other comprehensive income. Group companies The ﬁnancial statements of all Group entities (none of which operate in a hyperinﬂationary economy) that have a functional currency different from the presentation currency are translated into the presentation currency as follows: • Assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet. • Income and expenses for each statement of proﬁt or loss and statement of comprehensive income are translated at average exchange rates. • All exchange differences resulting from the above are recognised in other comprehensive income and subsequently included in “foreign currency translation reserve”. • On the disposal of a foreign operation (partly or fully disposed), the cumulative exchange differences relating to that particular foreign operation, recognized in the “foreign currency translation reserve” within equity, are recognised in the income statement as part of the gain or loss on sale. On the partial disposal of a foreign subsidiary, the proportionate share of the cumulative amount is re-attributed to the non-controlling interest in that operation. On consolidation, exchange differences arising from the translation of borrowings designated as hedges of investments in foreign entities, are taken to other comprehensive income and included under “currency translation differences on derivative hedging position” in other reserves. Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognized in other comprehensive income. 1.4 Property, plant and equipment Property, plant and equipment (PPE) is stated at historical cost less accumulated depreciation and impairment losses, except for land (excluding land improvements and quarries), which is shown at cost less impairment losses. Cost includes expenditure that is directly attributable to the acquisition of the items and any environmental rehabilitation costs to the extent that they have been recognised as a provision (refer to note 1.20). Subsequent costs are included in the asset’s carrying amount or recognised as a separate asset, as appropriate, only when it is probable that future economic beneﬁts associated with the item will ﬂow to the entity and the cost of the item can be measured reliably. The carrying amount of the replaced part is derecognized. All other repairs and maintenance are charged to the income statement as incurred. Subsequent costs are depreciated over the remaining useful life of the related asset or to the date of the next major subsequent cost whichever is the sooner. Depreciation, with the exception of quarries and land, is calculated using the straight-line method to allocate the cost of the assets to their residual values over their estimated useful lives as follows: Buildings Up to 50 years Plant and machinery Up to 40 years Motor vehicles 5 to 20 years Office equipment furniture and ﬁttings (including computer equipment and software integral to the operation of the hardware) 2 to 10 years Minor value assets Up to 2 years INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 162 Land on which quarries are located is depreciated on a depletion basis. This depletion is recorded as the material extraction process advances based on the unit-of-production method. Other land is not depreciated. The assets’ residual values and useful lives are reviewed, and adjusted if appropriate, at each reporting date. Where the carrying amount of an asset is greater than its estimated recoverable amount, it is written down immediately to its recoverable amount (refer to note 1.8 - Impairment of non- ﬁnancial assets other than Goodwill). An item of PPE and any signiﬁcant part initially recognised is derecognised upon disposal or when no future economic beneﬁts are expected from its use or disposal. Gains and losses on disposals are determined by comparing proceeds with carrying amount and are included in proﬁt or loss. Interest costs on borrowings speciﬁcally used to ﬁnance the construction of PPE are capitalised during the construction period if recognition criteria are met (refer to note 1.29). 1.5 Investment properties Investment property is property held for long-term rental yields or for capital appreciation or both and that is not occupied by any of the subsidiaries of the Group. Owner-occupied properties are held for production and administrative purposes. This distinguishes owner-occupied property from investment property. Investment property is measured initially at cost, including related transaction costs and where applicable borrowing costs (refer to 1.29). After initial recognition investment property is carried at fair value. Fair value reﬂects market conditions at the reporting date and is determined internally on an annual basis by management or external valuators. The best evidence of fair value is provided by current prices in an active market for similar property in the same location and condition and subject to the same lease terms and other conditions (comparable transactions). When such identical conditions are not present, the Group takes account of, and makes allowances for, differences from the comparable properties in location, nature and condition of the property or in contractual terms of leases and other contracts relating to the property. A gain or loss arising from a change in the fair value of investment property is recognized in the period in which it arises in the income statement within “other income” or “other expense” as appropriate. Subsequent expenditure is capitalised to the asset’s carrying amount only when it is probable that future economic beneﬁts associated with the expenditure will ﬂow to the Group and the cost of the item can be measured reliably. All other repairs and maintenance costs are expensed when incurred. When part of an investment property is replaced, the carrying amount of the replaced part is derecognised. The fair value of investment property does not reﬂect future capital expenditure that will improve or enhance the property and does not reﬂect the related future beneﬁts from this future expenditure other than those a rational market participant would take into account when determining the value of the property. Where the Group disposes of a property at fair value in an arm’s length transaction, the carrying value immediately prior to the sale is adjusted to the transaction price, and the adjustment is recorded in the income statement within the gain or loss from fair value adjustment on investment property. Investment properties are derecognised when they have been disposed. If an investment property becomes owner-occupied, it is reclassiﬁed as PPE. Its fair value at the date of reclassiﬁcation becomes its deemed cost for subsequent accounting purposes. If an item of owner-occupied property becomes an investment property because its use has changed, IAS 16 is applied up to the date of transfer, since investment property is measured at fair value. The property is fair valued at the date of transfer and any revaluation gain or loss, being the difference between fair value and the previous carrying amount, is accounted for as a revaluation surplus or deﬁcit in equity in accordance with IAS 16. Revaluation surplus is recognized directly in equity through other comprehensive income, unless there was an impairment loss recognized for the same property in prior years. In this case, the surplus up to the extent of this impairment loss is recognized in proﬁt or loss and any further increase is recognized directly in equity through other comprehensive income. Any revaluation deﬁcit is recognized in proﬁt or loss. 1.6 Goodwill and intangible assets (other than goodwill) 1.6.1 Goodwill Goodwill arises on the acquisition of subsidiaries and represents the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identiﬁable assets acquired and liabilities assumed. If the excess of the aggregate of the consideration transferred and the amount recognised for non-controlling interest over the net identiﬁable assets acquired and liabilities assumed is smaller than the fair value of the net assets of the acquired subsidiary, the difference is recognized in the proﬁt or loss. Goodwill represents the future economic beneﬁts arising from assets that are not capable of being individually identiﬁed and separately recognized in a business combination. Goodwill is not amortized. After initial recognition, it is measured at cost less any accumulated impairment losses. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each cash-generating-unit that is expected to beneﬁt from the synergies of the combination. Each unit or group of units to which the goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Impairment reviews are undertaken annually (even if there is no indication of impairment) or more frequently if events or changes in circumstances indicate a potential impairment. The carrying value of goodwill is compared to the recoverable amount, which is the higher of the value-in-use and the fair value less costs to sell. Any impairment is recognised immediately as an expense and is not subsequently reversed. Where goodwill has been allocated to a cash-generating-unit (CGU) and part of the operation within that unit is disposed of, the goodwill associated with the disposed operation is included in the carrying amount of the operation when determining the gain MANAGEMENT REPORT FINANCIAL REVIEW 163 or loss on disposal. Goodwill disposed in these circumstances is measured based on the relative values of the disposed operation and the portion of the cash-generating unit retained. 1.6.2 Intangible assets (other than goodwill) Intangible assets acquired separately are measured on initial recognition at cost. The cost of intangible assets acquired in a business combination is their fair value at the date of acquisition. Following initial recognition, intangible assets are carried at cost less any accumulated amortisation and accumulated impairment losses. The Group’s intangible assets have a ﬁnite useful life. Intangible assets with ﬁnite lives are amortised over the useful economic life and assessed for impairment whenever there is an indication that the intangible asset may be impaired. The amortisation period and the amortisation method for an intangible asset with a ﬁnite useful life are reviewed at least at the end of each reporting period. Changes in the expected useful life or the expected pattern of consumption of future economic beneﬁts embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with ﬁnite lives is recognised in the income statement as the expense category that is consistent with the function of the intangible assets. Acquired computer software programs and licenses are capitalised on the basis of costs incurred to acquire and bring to use the speciﬁc software when these are expected to generate economic beneﬁts beyond one year. Costs associated with developing or maintaining computer software programs are recognised as an expense as incurred. The amortization methods used for the Group’s intangibles are as follows: Amortization Method Useful Lives Patents, trademarks and customer relationships straight-line basis up to 20 years Licenses (mining permits) straight-line basis / depletion method shorter of: the permit period and the estimated life of the underlying quarry unit- of-production method Development costs (quarries under operating leases) note 1.7 note 1.7 Computer software straight-line basis 3 to 10 years Gains or losses arising from derecognition of an intangible asset are measured as the difference between the net disposal proceeds and the carrying amount of the asset and are recognised in the income statement when the asset is derecognised. 1.7 Deferred stripping costs Stripping costs comprise the removal of overburden and other waste products. Stripping costs incurred in the development of a quarry before production commences are capitalised as follows: Where such costs are incurred on quarry land that is owned by the Group, these are included within the carrying amount of the related quarry, under PPE and subsequently depreciated over the life of the quarry on a units-of-production basis. Where such costs are incurred on leased quarries, these are included under ‘Development expenditure’ under Intangible assets and amortised over the shorter of the lease term and the useful life of the quarry. 1.8 Impairment of non-ﬁnancial assets other than Goodwill Assets that have an indeﬁnite useful life (land not related to quarries) are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. An impairment loss is recognised, as an expense immediately, for the amount by which the asset’s carrying amount exceeds its recoverable amount. For the purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identiﬁable cash ﬂows (cash-generating units). Non-ﬁnancial assets other than goodwill that suffered impairment are reviewed for possible reversal of the impairment at each reporting date. An asset’s recoverable amount is the higher of an asset or cash generating units (CGU) fair value less costs of sell and its value-in-use. 1.9 Leases 1.9.1 Lessees Leases are recognized as a right-of-use (ROU) asset and a corresponding lease liability at the date at which the leased asset is available for use. Each lease payment is allocated between the lease liability and interest, which is charged to proﬁt or loss over the lease period to produce a constant periodic rate of interest on the remaining balance of the liability for each period. The ROU asset is depreciated over the shorter of the asset's useful life and the lease term on a straight-line basis. The Group presents ROU assets that do not meet the deﬁnition of investment property in the account “property, plant and equipment”, in the same line item as it presents underlying assets of the same nature that it owns. ROU assets that meet the deﬁnition of investment property are presented with investment property. The lease liability is initially measured at the commencement date at the present value of the lease payments during the lease term that are not yet paid. It is discounted by using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate (IBR). The IBR is the rate that the lessee would have to pay to borrow the funds necessary to obtain an asset of a similar value in a similar economic environment with similar terms and condition. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is re-measured when there is a modiﬁcation that is not accounted for as a separate lease; a change in future lease payments arising INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 164 from a change in an index or rate; a change in the estimate of the amount expected to be payable under a residual value guarantee; and if the Group changes its assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. Lease liabilities include the net present value of the following lease payments: • Fixed payments (including in-substance ﬁxed payments) • Variable lease payments that are based on an index or a rate • Amounts expected to be payable by the lessee under residual value guarantees • The exercise price of a purchase option if the lessee is reasonably certain to exercise that option • Payments of penalties for terminating the lease if the lessee will exercise that option The ROU asset is initially measured at cost, and subsequently at cost less any accumulated depreciation and impairment losses, and adjusted for certain re-measurements of the lease liability. When ROU asset meets the deﬁnition of investment property is initially measured at cost, and subsequently measured at fair value, in accordance with the Group’s accounting policy. The initial measurement of the ROU asset is comprised by: • The amount of the initial measurement of lease liability • Any lease payments made at or before the commencement date less any lease incentives received • Any initial direct costs, and • Restoration costs For short term leases and certain leases of low value assets, the Group has elected not to recognise ROU assets and lease liabilities. It recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. For leases that contain both lease and non-lease components, the Group chose not to separate them, except for terminals in which non-lease components are separated from lease components. 1.9.2 Lessors Leases in which the Group does not transfer substantially all the risks and beneﬁts of ownership of an asset are classiﬁed as operating leases. Operating leases of PPE are recognized according to their nature in the statement of ﬁnancial position. Payments made under operating leases are charged to proﬁt or loss on a straight-line basis over the period of the lease. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the leased asset and recognised over the lease term on the same basis as rental income. Contingent rents are recognised as revenue in the period in which they are earned. 1.10 Inventories Inventories are stated at the lower of cost and net realisable value. Cost is determined using the weighted average cost method. The cost of ﬁnished goods and work in progress comprises raw materials, direct labour, other direct costs and related production overheads (based on normal operating capacity), but excludes borrowing costs. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses. Appropriate allowance is made for damaged, obsolete and slow moving items. Write-downs to net realisable value and inventory losses are expensed in cost of sales in the period in which the write-downs or losses occur. 1.11 Trade receivables Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. If collection is expected in one year or less (or in the normal operating cycle of the business if longer), they are classiﬁed as current assets. If not, they are presented as non- current assets. Trade receivables are recognised initially at the amount of consideration that is unconditional and subsequently measured at amortised cost using the effective interest method, less loss allowance. 1.12 Cash and cash equivalents In the statement of cash ﬂows, cash and cash equivalents comprise cash on hand, deposits held at call with banks, other short-term highly liquid investments of three months or less from the date of acquisition, and bank overdrafts, if they exist. Bank overdrafts are included within borrowings in current liabilities in the balance sheet. The components of cash and cash equivalents have a negligible risk of change in value. 1.13 Share capital Any excess of the fair value of the consideration received over the par value of the shares issued is recognized as “share premium” in shareholders’ equity. Incremental external costs directly attributable to the issue of new shares or share options are shown in equity as a deduction, net of tax, from the proceeds. Where the Company or its subsidiaries purchases the Company’s own equity share capital (treasury shares), the consideration paid including any attributable incremental external costs net of income taxes is deducted from total shareholders’ equity until they are cancelled or sold. Where such shares are subsequently sold or reissued, any consideration received, net of any directly attributed incremental transaction costs and the related income tax effect, is included in shareholders’ equity. 1.14 Borrowings Borrowings are recognised initially at fair value, net of transaction costs incurred. In subsequent periods, borrowings are carried at amortised cost using the effective interest method. Any difference between proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method. Fees paid on the establishment of loan facilities are recognized as transactions costs of the loan to the extent that it is probable that some or all of the facility will be drawn down. In this case, the fee is deferred until the draw down occurs. To the extent there is no evidence that it is probable that some or all of the facility will be drawn down, the fee is capitalised as a prepayment for liquidity services and amortised over the period of the facility to which it relates. MANAGEMENT REPORT FINANCIAL REVIEW 165 Borrowings are classiﬁed as current liabilities unless the Group entity has an unconditional right to defer settlement for at least 12 months after the balance sheet date. 1.15 Current and deferred income taxes The tax expense for the period comprises current and deferred tax. Tax is recognised in the income statement, except to the extent that it relates to items recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised in other comprehensive income or directly in equity, respectively. Current income tax is calculated on the basis of the tax laws enacted or substantively enacted at the reporting date in the countries where the Company and its subsidiaries operate and generate taxable income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax regulation is subject to interpretation. It establishes provisions where appropriate on the basis of amounts expected to be paid to the tax authorities. Deferred income tax is recognised using the liability method, on temporary differences arising between the tax bases of assets and liabilities and their carrying amounts in the ﬁnancial statements. However, if the deferred income tax arises from initial recognition of an asset or liability in a transaction other than a business combination that at the time of the transaction affects neither accounting nor taxable proﬁt and loss, it is not accounted for. Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable proﬁt will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilized. Deferred tax liabilities are recognised for taxable temporary differences arising on investments in subsidiaries, joint arrangements and associates, except where the Group is able to control the reversal of the temporary difference and it is probable that the temporary difference will not reverse in the foreseeable future. Deferred income tax is determined using tax rates (and laws) that have been enacted or substantively enacted at the reporting date and are expected to apply when the related deferred income tax asset is realised or the related deferred income tax liability is settled. Deferred income tax assets and liabilities are offset when there is a legally enforceable right to offset current tax assets against current tax liabilities and when the deferred income taxes assets and liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis. 1.16 Employee beneﬁts 1.16.1 Pension and other retirement obligations The Group operates various pension and other retirement schemes, including both deﬁned beneﬁt and deﬁned contribution pension plans in accordance with the local conditions and practices in the countries in which it operates. A deﬁned contribution plan is a pension plan under which the Group pays ﬁxed contributions into a separate entity. The Group has no legal or constructive obligations to pay further contributions if the fund does not hold sufficient assets to pay all employees the beneﬁts relating to employee service in the current and prior periods. A deﬁned beneﬁt plan is a pension plan that is not a deﬁned contribution plan. Typically deﬁned beneﬁt plans deﬁne an amount of pension beneﬁt that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service and compensation. The liability recognized in the statement of ﬁnancial position in respect of deﬁned beneﬁt pension or retirement plans is the present value of the deﬁned beneﬁt obligation at the reporting date less the fair value of plan assets. The deﬁned beneﬁt obligation is calculated annually by independent actuaries using the projected unit credit method. The present value of the deﬁned beneﬁt obligation is determined by discounting the estimated future cash outﬂows using interest rates of high-quality corporate bonds that are denominated in the currency in which the beneﬁts will be paid, and that have terms approximating to the terms of the related obligation. In countries where there is no deep market in such bonds, the market rates on government bonds are used. Past service costs are recognized in proﬁt or loss on the earlier of: • The date of the plan amendment or curtailment, and • The date that the Group recognizes restructuring-related costs Net interest is calculated by applying the discount rate to the net deﬁned beneﬁt liability or asset. The Group recognizes the following changes in the net deﬁned beneﬁt obligation: Service costs comprising current service costs, past-service costs, gains and losses on curtailments and non-routine settlements under other operating expenses/income Net interest expense or income under ﬁnance expenses Re-measurements, comprising of the actuarial gains and losses, the effect of the asset ceiling, excluding net interest (not applicable to the Group) and the return on plan assets (excluding net interest), are recognized immediately in the statement of ﬁnancial position with a corresponding debit or credit to retained earnings through other comprehensive income (OCI) in the period in which they occur. Re-measurements are not reclassiﬁed to proﬁt or loss in subsequent periods. For deﬁned contribution plans, the Group pays contributions to publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. Once the contributions have been paid, the Group has no further payment obligations. The regular contributions constitute net periodic costs for the year in which they are due and as such are included in staff costs. 1.16.2 Termination beneﬁts Termination beneﬁts are payable when employment is terminated by the group before the normal retirement date, or when an employee accepts voluntary redundancy in exchange for these beneﬁts. The Group recognises termination beneﬁts at the earlier of the following dates: (a) when the group can no longer withdraw the offer of those beneﬁts; and (b) when the entity recognises costs INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 166 for a restructuring that is within the scope of IAS 37 and involves the payment of terminations beneﬁts. The obligating event is the termination and not the service. In the case of an offer made to encourage voluntary redundancy, the termination beneﬁts are measured based on the number of employees expected to accept the offer. Beneﬁts falling due more than 12 months after the end of the reporting period are discounted to their present value. 1.16.3 Proﬁt sharing and bonus plans A liability for employee beneﬁts in the form of proﬁt sharing and bonus plans is recognised in other provisions when the following conditions are met: there is a formal plan and the amounts to be paid are determined before the time of issuing the ﬁnancial statements; or past practice has created a valid expectation by employees that they will receive a bonus/ proﬁt sharing and the amount can be determined before the time of issuing the ﬁnancial statements. 1.16.4 Share-based payments Share-based compensation beneﬁts are provided to members of senior management via Group share schemes that cover several subsidiaries. Equity-settled transactions The fair value of options granted under the Share Option Programs is recognised as an employee beneﬁts expense in the Income Statement, with a corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options granted: • Including any market performance conditions (for example, an entity’s share price); • Excluding the impact if any service and non-market performance vesting conditions (for example proﬁtability, sales growth targets and remaining an employee of the entity over a speciﬁed time period); and • Including the impact of any non-vesting conditions (for example, the requirement for employees to save) The total expense is recognised over the vesting period, which is the period over which all of the speciﬁed vesting conditions are to be satisﬁed. At the end of each period, the Group revises its estimates of the number of options that are expected to vest based on the non-market vesting and service conditions. It recognises the impact of the revision to original estimates, if any, in proﬁt or loss, with a corresponding adjustment to equity. Share options are exercised at given prices, which are normally at a discount of the share’s market price at grant dates. When the options are exercised, either the Company issues new shares, or the Group settles the awards with existing treasury shares. The proceeds received net of any directly attributable transaction costs are credited to share capital (nominal value) and share premium reserve. Cash-settled transactions The fair value of the awards granted to employees for nil consideration under the Long-term Incentive Plans is measured initially and at each reporting date up to and including the settlement date, at the fair value of the liability with changes in fair value recognised as employee beneﬁts expense in the Income Statement. At each reporting date, the Group revises its estimation of the number of the awards that they will vest and it recognises the impact of the revised estimates in the Income Statement. 1.17 Government grants Government grants are recognised at their fair value where there is a reasonable assurance that the grant will be received and the Group will comply with all attached conditions. Government grants are recognized in proﬁt or loss on a systematic basis over the periods in which the Group recognizes as expenses the related costs for which the grants are intended to compensate. Speciﬁcally, government grants whose primary condition is that the Group should purchase, construct or otherwise acquire non-current assets are recognized as deferred revenue in the statement of ﬁnancial position and transferred to proﬁt or loss on a systematic and rational basis over the useful lives of the related assets. 1.18 CO₂ Emission rights Emission rights are accounted for under the net liability method. Allocated allowances that are granted free of charge are recognised as an intangible asset at cost, which is nil. Emission rights purchased in excess of those required to cover shortages are recognised as an intangible asset, at cost. To the extent that emissions generated to date exceed the volume of allowances held, the Group recognizes a liability. If emissions do not exceed allowances held, there is no obligation to purchase additional allowances and, therefore, no liability to provide for additional emission allowances required. The Group has chosen to measure the net liability on the basis of the period for which the irrevocable right to the cumulative emissions rights have been received. Proceeds from the sale of granted emission rights are recorded as a reduction to cost of sales. 1.19 Provisions and contingencies Provisions represent liabilities of uncertain timing or amount and are recognised when the Group has a present legal or constructive obligation as a result of past events, it is probable that an outﬂow of resources will be required to settle the obligation, and a reliable estimate of the amount can be made. Where the Group expects a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset but only when the reimbursement is virtually certain. The expense relating to any provision is presenting in the income statement net of any reimbursement. Provisions are not recognized for future operating losses. The Group recognises a provision for onerous contracts when the economic beneﬁts to be derived from a contract are less than the unavoidable costs of meeting the obligations under the contract. Restructuring provisions comprise lease termination penalties and employee termination payments, and are recognised in the period in which the Group becomes legally or constructively committed to payment. Costs related to the ongoing activities of the Group are not provided for in advance. Where the effect of the time value of money is material, MANAGEMENT REPORT FINANCIAL REVIEW 167 provisions is measured at the present value of the expenditure expected to be required to settle the obligation using a pre-tax rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the obligation. The increase in the provision due the passage of time is recognized as a ﬁnance expense. Possible obligations and present obligations which do not meet the recognition criteria of a provision are not recognised on the statement of ﬁnancial position, but are disclosed as contingent liabilities. Contingent liabilities are current obligations arising from past events that might, but will probably not, require an outﬂow of resources embodying economic beneﬁts, or the obligations cannot be reliably estimated. Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inﬂow of economic beneﬁts to a reporting entity. Contingent assets are disclosed only when an inﬂow of economic beneﬁts is probable. A contingent asset is not recognised, because it might result in the recognition of income that is never realized. When it becomes virtually certain that an inﬂow of economic beneﬁts will arise, then the asset should be recognised. Contingent assets and liabilities are initially recognised and subsequently measured as provisions do. 1.20 Site restoration, quarry rehabilitation and environmental costs Companies within the Group are generally required to restore the land used for quarries and processing sites at the end of their producing lives to a condition acceptable to the relevant authorities and consistent with the Group’s environmental policies. Provisions for environmental restoration are recognised when the Group has a present legal or constructive obligation as a result of past events and, it is probable that an outﬂow of resources will be required to settle the obligation and the amount has been reliably estimated. Provisions associated with environmental damage represent the estimated future cost of remediation. Estimating the future costs of these obligations is complex and requires management to use judgment. The estimation of these costs is based on an evaluation of currently available facts with respect to each individual site and considers factors such as existing technology, currently enacted laws and regulations and prior experience in remediation of sites. Inherent uncertainties exist in such evaluations primarily due to unknown conditions, changing governmental regulations and legal standards regarding liability, the protracted length of the clean-up periods and evolving technologies. The environmental and remediation liabilities provided for reﬂect the information available to management at the time of determination of the liability and are adjusted periodically as remediation efforts progress or as additional technical or legal information becomes available. Estimated costs associated with such rehabilitation activities are measured at the present value of future cash outﬂows expected to be incurred. When the effect of the passage of time is not signiﬁcant, the provision is calculated based on undiscounted cash ﬂows. Where a closure and environmental obligation arises from quarry/mine development activities or relate to the decommissioning PPE the provision can be capitalized as part of the cost of the associated asset (intangible or tangible). The capitalized cost is depreciated over the useful life of the asset and any change in the net present value of the expected liability is included in ﬁnance costs, unless they arise from changes in accounting estimates of valuation. 1.21 Revenue Revenue is the amount of consideration expected to be received in exchange for transferring promised goods or services to a customer, excluding amounts collected on behalf of third parties (value-added tax, other sales taxes etc.). Revenue is recognized when (or as) a performance obligation is satisﬁed by transferring the control of a promised good or service to the customer. A customer obtains control of a good or service if it has the ability to direct the use of and obtain substantially all of the remaining beneﬁts from that good or service. Control is transferred over time or at a point in time. Revenue from the sale of goods is recognised when control of the good is transferred to the customer, usually upon delivery and there is no unfulﬁlled obligation that could affect the customer’s acceptance of the products. The main products of the Group are cement, clinker, ready-mix, ﬂy ash and other cementitious products. Revenue arising from services is recognised in the accounting period in which the services are rendered, and it is measured using either output methods or input methods, depending on the nature of service provided. A receivable is recognized when there is an unconditional right to consideration for the performance obligations to the customer that are satisﬁed. A contract asset is recognized when the performance obligation to the customer is satisﬁed before the customers pays or before payment is due, usually when goods or services are transferred to the customer before the Group has a right to invoice. A contract liability is recognized when there is an obligation to transfer goods or services to a customer for which the Group has received consideration from the customer (prepayments) or there is an unconditional right to receive consideration before the Group transfers a good or a service (deferred income). The contract liability is derecognized when the promise is fulﬁlled and revenue is recorded in the proﬁt or loss statement. 1.22 Dividend distribution Dividend to the Company’s shareholders is recognized in the ﬁnancial statements in the period in which the Board of Directors’ proposed dividend is ratiﬁed at the Shareholders’ Annual General Meeting. 1.23 Segment information Segment information is presented on the same basis as the internal information provided to the chief operating decision maker. The chief operating decision maker is the person (or the group of persons) that allocates resources to and assesses the operating results of the segments. For management purposes, the Group is structured in ﬁve operating segments: Greece and Western Europe, North America, South Eastern Europe, Eastern Mediterranean and Joint Ventures. Each region has a regional Chief Executive Officer INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 168 (CEO) who reports to the Group's CEO. In addition, the Finance Department is organized also by region for effective ﬁnancial controlling and performance monitoring. 1.24 Financial assets Classiﬁcation and measurement The Group classiﬁes its ﬁnancial assets in the following measurement categories: • Those to be measured subsequently at fair value (either through OCI or through proﬁt or loss) and, • Those to be measured at amortised cost. The classiﬁcation depends on the entity’s business model for managing the ﬁnancial assets and the contractual terms of the cash ﬂows. The Group initially measures a ﬁnancial asset at its fair value plus, in the case of a ﬁnancial asset not at fair value through proﬁt or loss, transaction costs. Transaction costs of ﬁnancial assets carried at fair value through proﬁt or loss are expenses. Trade receivables are initially measured at their transaction price. Financial assets with embedded derivatives are considered in their entirety when determining whether their cash ﬂows are solely payment of principal and interest. Under IFRS 9, debt ﬁnancial instruments are subsequently measured at amortised cost, fair value through other comprehensive income (FVOCI) or fair value through proﬁt or loss (FVPL). The classiﬁcation is based on two criteria: a) the business model for managing the assets and b) whether the instruments’ contractual cash ﬂows represent “solely payments of principal and interest” on the principal amount outstanding (the ‘SPPI criterion’). The new classiﬁcation and measurement of the Group’s debt ﬁnancial assets are, as follows: I. Debt instruments at amortised cost for ﬁnancial assets that are held within a business model with the objective to hold the ﬁnancial assets in order to collect contractual cash ﬂows that meet the SPPI criterion. Interest income from these ﬁnancial assets is included in ﬁnance income using the effective interest rate method. Any gain or loss arising on de-recognition is recognised directly in the income statement. II. Debt instruments at FVOCI, with gains or losses recycled to proﬁt or loss on de-recognition. Financial assets in this category are debt instruments that meet the SPPI criterion and are held within a business model both to collect cash ﬂows and to sell. Movements in the carrying amount are taken through OCI, except for the recognition of impairment gains or losses, interest revenue and foreign exchange gains or losses which are recognised in proﬁt or loss. Interest income from these ﬁnancial assets is included in ﬁnance income using the effective interest rate method. III. Financial assets at FVPL comprise derivative instruments and equity instruments, which the Group had not irrevocably elected, at initial recognition or transition, to classify at FVOCI. This category would also include debt instruments whose cash ﬂow characteristics fail the SPPI criterion or are not held within a business model whose objective is either to collect contractual cash ﬂows, or to both collect contractual cash ﬂows and sell. A gain or loss on ﬁnancial assets that subsequently measures at FVPL is recognized in income statement. Other ﬁnancial assets are classiﬁed and subsequently measured, as follows: IV. Equity instruments at FVOCI, with no recycling of gains or losses to proﬁt or loss on de-recognition. This category only includes equity instruments, which the Group intends to hold for the foreseeable future and which the Group (or the Company) has irrevocably elected to so classify upon initial recognition or transition. Equity instruments at FVOCI are not subject to any impairment accounting. Dividends from such investments continue to be recognised in proﬁt or loss, when the right to receive the payment is established, unless they represent a recovery of part of the cost of the investment. V. Financial assets designated as measured at FVPL at initial recognition that would otherwise be measured subsequently at amortized cost or at FVOCI. Such a designation can only be made, if it eliminates or signiﬁcantly reduces an “accounting mismatch” that would otherwise arise. 1.25 Offsetting ﬁnancial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset recognised amounts, and there is an intention to settle on the net basis the liability or realise the asset and settle the liability simultaneously. The legally enforceable right to offset should not depend on future events but it should apply in the ordinary course of business. However, it should be allowed for the related amounts to be set off in certain circumstances, such as bankruptcy or the termination of a contract. 1.26 Impairment of ﬁnancial assets The Group records an allowance for expected credit losses (ECLs) for all ﬁnancial assets not held at FVPL. ECLs are based on the difference between the contractual cash ﬂows due in accordance with the contract and all the cash ﬂows that the Group expects to receive. The shortfall is then discounted at an approximation to the asset’s original effective interest rate. For contract assets, trade receivables and lease receivables, the Group have applied the standard’s simpliﬁed approach and have calculated ECLs based on lifetime expected credit losses. For other ﬁnancial assets, the ECL is based on the 12-month ECL. The 12-month ECL is the portion of lifetime ECLs that results from default events on a ﬁnancial instrument that are possible within 12 months after the reporting date. However, when there has been a signiﬁcant increase in credit risk since origination, the allowance will be based on the lifetime ECL. 1.27 Derivative ﬁnancial instruments and hedging activities Initially, derivatives are recognized at fair value at commencement date and subsequently, they are re-measured at their fair value at each reporting date. Derivatives are carried as ﬁnancial assets when the fair value is positive and as ﬁnancial liabilities when the fair value is negative. MANAGEMENT REPORT FINANCIAL REVIEW 169 Any gains or losses arising from changes in the fair value of derivatives are taken directly to proﬁt or loss, except for the effective portion of cash ﬂow hedges, which is recognized in other comprehensive income (OCI) and later is reclassiﬁed to proﬁt or loss when the hedge item affects proﬁt or loss. For the purpose of hedge accounting, hedges are classiﬁed as: • Fair value hedges when hedging the exposure to changes in the fair value of a recognized asset or liability or an unrecognized ﬁrm commitment • Cash ﬂow hedges when hedging the exposure to variability in cash ﬂows that is either attributable to a particular risk associated with a recognized asset or liability or a highly probable forecast transaction or the foreign currency risk in an unrecognized ﬁrm commitment • Hedges of a net investment in a foreign operation At the inception of a hedge relationship, the Group formally designates and documents the hedge relationship to which it wishes to apply hedge accounting and the risk management objective and strategy for undertaking the hedge. The documentation includes identiﬁcation of the hedging instrument, the hedged item, the nature of the risk being hedged and how the Group will assess whether the hedging relationship meets the hedge effectiveness requirements (including the analysis of sources of hedge ineffectiveness and how the hedge ratio is determined). A hedging relationship qualiﬁes for hedge accounting if it meets all of the following effectiveness requirements: • There is “an economic relationship” between the hedged item and the hedging instrument. • The effect of credit risk does not “dominate the value changes” that result from that economic relationship. • The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the Group actually hedges and the quantity of the hedging instrument that the Group actually uses to hedge that quantity of hedged item. The full fair value of a hedging derivative is classiﬁed as a non- current asset or liability when the remaining hedged item is more than 12 months and as a current asset or liability when the remaining maturity of the hedged item is less than 12 months. Hedges that meet the strict criteria for hedge accounting are accounted for, as described below: 1.27.1 Fair value hedges Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recorded in the income statement, together with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. The gain or loss relating both to the effective and ineffective portion of interest rate swaps hedging ﬁxed rate borrowings is recognized in the income statement within “Finance income/expense” 1.27.2 Cash ﬂow hedges The effective portion of gains or losses from measuring cash ﬂow hedging instruments is recognized in OCI and accumulated in reserves, in the account “hedging reserve from cash ﬂow hedges”. The gain or loss relating to the ineffective portion is recognized immediately in the income statement within “Finance income/expenses”. Amounts accumulated in equity are reclassiﬁed to proﬁt or loss in the periods when the hedged item affects proﬁt or loss. When a hedging instrument expires or is sold or terminated, or when a hedge no longer meets the criteria for hedge accounting, any cumulative gain or loss existing in equity at that time remains in equity and is recognised when the forecast transaction is ultimately recognised in proﬁt or loss. When a forecast transaction is no longer expected to occur, the cumulative gain or loss that was reported in equity is immediately reclassiﬁed to proﬁt or loss. 1.27.3 Net investment hedge Hedges of net investments in foreign entities are accounted for similarly to cash ﬂow hedges. Where the hedging instrument is a derivative, any gain or loss on the hedging instrument relating to the effective portion of the hedge is recognised in currency translation differences on derivative hedging position in other reserves. The gain or loss relating to the ineffective portion is recognised immediately in other income/expenses in the income statement. However, where the hedging instrument is not a derivative (for example, a foreign currency borrowing), all foreign exchange gains or losses arising on the translation of a borrowing that hedges such an investment (including any ineffective portion of the hedge) are recognized in equity in “translation differences on derivative hedging position” in “other reserves”. Gains or losses accumulated in equity are included in the income statement when the foreign operation is (partially or fully) disposed of. The Group’s “other reserves” include gains that have resulted from such hedging activities carried out in the past. Derivatives that do not qualify for hedge accounting Certain derivative transactions, do not qualify for hedge accounting under rules in IFRS. Any gains or losses arising from changes in the fair value of ﬁnancial instruments that are not part of a hedging relationship are included in ﬁnance income / (expenses), gain / (loss) from foreign exchange differences and cost of sales in the income statement for the period in which they arise, depending on their nature. 1.28 De-recognition of ﬁnancial assets and liabilities 1.28.1 Financial assets A ﬁnancial asset (or, where applicable a part of a ﬁnancial asset or part of a group of similar ﬁnancial assets) is derecognized when: • the rights to receive cash ﬂows from the asset have expired; • the Group retains the right to receive cash ﬂows from the asset, but has assumed an obligation to pay them in full without material delay to a third party under a “pass-through” arrangement; or • the Group has transferred its rights to receive cash ﬂows from the asset and either (a) has transferred substantially all the risks and rewards of the assets, or (b) has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset. Where the Group has transferred its rights to receive cash ﬂows from an asset and has neither transferred nor retained substantially all the risks and rewards of the asset nor transferred INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 170 control of the asset, the asset is recognized to the extent of the Group’s continuing involvement in the asset. A respective liability is also recognized. Continuing involvement that takes the form of a guarantee over the transferred asset is measured at the lower of the original carrying amount of the asset and the maximum amount of consideration that the Group could be required to repay. 1.28.2 Financial liabilities A ﬁnancial liability is derecognized when the obligation under the liability is discharged or cancelled or expires. Where an existing ﬁnancial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modiﬁed, such an exchange or modiﬁcation is treated as a de-recognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognized in the consolidated statement of income. 1.29 Borrowing costs Borrowing costs directly attributable to the acquisition, construction or production of a qualifying asset are capitalized as part of the cost of the respective assets until such as the asset is substantially ready for its intended use or sale. Qualifying assets are assets that necessarily take a substantial period of time to get ready for their intended use or sale. All other borrowing costs are expensed in the proﬁt of loss in the period in which they are occurred. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds. 1.30 Trade payables Trade payables are obligations to pay for goods or services that have been acquired in the ordinary course of business from suppliers. Accounts payable are classiﬁed as current liabilities if payment is due within one year or less (or in the normal operating cycle of the business if longer). If not, they are presented as non-current liabilities. Trade payables are recognised initially at fair value and subsequently measured at amortised cost using the effective interest method. 1.31 Gains/losses on disposal of non-current assets, restructuring costs and other signiﬁcant gains/losses Gains/losses on disposal of non-current assets, restructuring costs and other signiﬁcant gains/losses are disclosed separately in the ﬁnancial statements where it is necessary to do so to provide further understanding of the ﬁnancial performance of the group. They are material items of income or expense that have been shown separately due to the signiﬁcance of their nature or amount. 2. Signiﬁcant accounting estimates and judgments The preparation of the ﬁnancial statements requires management to make estimations and judgments that affect the reported disclosures. On an ongoing basis, management evaluates its estimates, which are presented below. Estimates and judgements are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. These management’s estimation and assumptions form the basis for making judgments about the carrying value of assets and liabilities that are not readily available from other sources. The resulting accounting estimates will, seldom equal the related actual results by deﬁnition. The estimates and assumptions that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next ﬁnancial year are discussed below: 2.1 Impairment of goodwill Impairment tests for goodwill use the recoverable amounts of cash-generating units that are determined based on value-in- use calculations (note 13). These calculations require the use of estimates, which mainly relate to future earnings and discount rates. 2.2 Impairment of joint ventures The determination of the recoverable amount for each joint venture requires signiﬁcant judgments in respect of assumptions about the future results of the business and the discount rates applied to future cash ﬂow forecasts. In the Group’s view, a statement that the impairment test of joint ventures includes estimates that “have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next ﬁnancial year” should be made. 2.3 Deferred tax assets Deferred tax assets are recognized for unused tax losses to the extent that it is probable that taxable proﬁt will be available against which the losses can be utilized. Signiﬁcant management judgment is required to determine the amount of deferred tax assets that can be recognized, based upon the likely timing and the level of future taxable proﬁts together with future tax planning strategies (note 8). 2.4 Useful lives and residual values PPE are depreciated over their estimated useful lives. The actual lives of the assets are assessed annually and may vary depending on a number of factors. In reassessing asset lives, factors such as technological innovation, product lifecycles, life-of-mine and maintenance programmes are considered. 2.5 Provision for environmental rehabilitation The Group recognizes provision for environmental rehabilitation that is re-estimated on an annual basis. It reﬂects the present value of the expected restoration costs, using estimated cash ﬂows and is calculated based on the area of the land disturbed at the reporting date and the cost of rehabilitation per metric unit of land at the level of the broader area of interest. Given the complexity of the calculations and the signiﬁcant assumptions therein, management provides its best estimate in relation to the present value of the aforementioned liability. MANAGEMENT REPORT FINANCIAL REVIEW INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Information by operating segment (all amounts in Euro thousands) Greece and Western Europe North America South Eastern Europe Eastern Mediterranean Total Gross revenue 333,515 983,590 290,613 172,800 1,780,518 Inter-segment revenue -65,885 - -10 - -65,895 Revenue from external customers 267,630 983,590 290,603 172,800 1,714,623 Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) 23,558 157,962 81,926 11,763 275,209 Depreciation, amortization and impairment of tangible and intangible assets -22,173 -69,969 -25,467 -18,872 -136,481 Operating profit before impairment losses on goodwill 1,385 87,993 56,460 -7,110 138,728 ASSETS Property, plant & equipment 289,177 656,036 279,592 320,577 1,545,382 Intangible assets and goodwill 34,559 224,355 60,110 44,406 363,430 Other non-current assets 28,375 15,220 9,728 943 54,266 Current assets 197,290 237,698 117,716 81,296 634,000 Total assets of segments excluding joint ventures 549,401 1,133,309 467,146 447,222 2,597,078 Investment in joint ventures (note 15.2) 81,563 Total assets 2,678,641 LIABILITIES Non-current liabilities 237,052 458,840 77,914 127,123 900,929 Current liabilities 132,875 185,244 69,171 53,536 440,826 Total liabilities 369,927 644,084 147,085 180,659 1,341,755 Capital expenditures (note 11,12,14) 24,601 79,562 15,369 6,512 126,044 Allowance for doubtful debtors (note 20) -456 -777 -370 -119 -1,722 Investment in associates (note 15) 3,398 - 3,792 - 7,190 Non-qualified deferred compensation plans (note 17,25) - 3,307 - - 3,307 Non-current assets excluding financial instruments, deferred tax assets and post employment benefit assets 330,757 880,370 347,984 364,922 1,924,033 3. Operating segment information Revenue consists of the sale of goods and services. There are sales between operating segments. Total assets and capital expenditures are presented in the operating segment of the company that owns the assets. For the year ended 31 December 2021 Capital expenditures consist of additions of property, plant and equipment, intangible assets and investment property. Impairment charges are included in the income statement. Summarised financial information of the joint ventures, based on their IFRS financial statements, is disclosed in note 15.2. For management information purposes, the Group is structured in five operating segments: Greece and Western Europe, North America, South Eastern Europe, Eastern Mediterranean and Joint Ventures. Each operating segment is a set of countries. The aggregation of countries is based mainly on geographic position. Each region has a regional Chief Executive Officer (CEO) who is a member of the Group Executive Committee and reports to the Group's CEO. In addition, the Group’s finance department is organized by region for effective financial control and performance monitoring. Management monitors the operating results of its business units separately for the purpose of making decisions, allocating resources and assessing performance. Segment performance is evaluated based on earnings before interest, taxes, depreciation, amortization & impairment (EBITDA). EBITDA calculation includes the operating profit plus depreciation, amortization and impairment of tangible and intangible assets and amortization of government grands. 171 172 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) Cement Ready mix concrete, aggregates and building blocks Other activities Total Revenue 1,011,199 692,751 10,673 1,714,623 Information by operating segment (all amounts in Euro thousands) Greece and Western Europe North America South Eastern Europe Eastern Mediterranean Total Gross revenue 308,778 939,747 270,952 151,748 1,671,225 Inter-segment revenue -64,192 - - - -64,192 Revenue from external customers 244,586 939,747 270,952 151,748 1,607,033 Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) 16,246 176,397 96,202 -3,250 285,595 Depreciation, amortization and impairment of tangible and intangible assets -21,893 -71,818 -26,206 -19,650 -139,567 Operating profit before impairment losses on goodwill -5,647 104,580 69,996 -22,901 146,028 ASSETS Property, plant & equipment 286,912 604,241 286,841 351,249 1,529,243 Intangible assets and goodwill 35,035 200,647 60,180 56,430 352,292 Other non-current assets 32,267 8,465 8,847 1,275 50,854 Current assets 197,246 291,542 101,015 75,816 665,619 Total assets of segments excluding joint ventures 551,460 1,104,895 456,883 484,770 2,598,008 Investment in joint ventures (note 15.2) 78,188 Total assets 2,676,196 LIABILITIES Non-current liabilities 193,509 350,594 97,938 213,550 855,591 Current liabilities 93,775 289,762 49,055 112,657 545,249 Total liabilities 287,284 640,356 146,993 326,207 1,400,840 Capital expenditures (note 11,12,14) 15,675 46,317 14,227 8,077 84,296 Impairment of property, plant and equipment (note 11) - -992 - -992 Impairment of Goodwill (note 13) - - - -46,614 -46,614 Allowance for doubtful debtors (note 20) -766 -461 -611 -147 -1,985 Investment in associates (note 15) 3,523 134 3,765 - 7,422 Non-qualified deferred compensation plans (note 17, 25) - 2,572 - - 2,572 Non-current assets excluding financial instruments, deferred tax assets and post employment benefit assets 330,137 805,022 354,889 407,679 1,897,727 At Group level, "Revenue" is derived from a set of customers none of which separately represents greater than or equal to 10%. The cement activity includes cement and cementitious materials. Other activities include transportation services and the activity of Regulatory Electricity Market in Greece. None of these activities have the prerequisite magnitude to be presented separately. Greece and Western Europe segment is also engaged in the production and trade of dry mortars and the Regulatory Electricity Market. North America segment includes the production and trade of building blocks and the processing of fly ash. Finally, South Eastern Europe and Eastern Mediterranean segments are engaged in the processing of alternative fuels. The business activities that are common to all segments of the Group are the production and trade of cement, ready-mix concrete, aggregates and transportation services. 3.Operating segment information (continued) For the year ended 31 December 2021 For the year ended 31 December 2020 Information by business activities Segment information of 2020 was restated in order to be comparable with the corresponding segment information of 2021, as a result of Arresa Marine Co change of operating segment. restated Summarised financial information of the joint ventures, based on their IFRS financial statements, is disclosed in note 15.2. Capital expenditures consist of additions of property, plant and equipment, intangible assets and investment property. Impairment charges are included in the income statement. Revenue consists of the sale of goods and services. There are sales between operating segments. Total assets and capital expenditures are presented in the operating segment of the company that owns the assets. 173 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) Cement Ready mix concrete, aggregates and building blocks Other activities Total Revenue 896,137 705,138 5,758 1,607,033 (all amounts in Euro thousands) 2021 2020 restated Operating profit before impairment losses on goodwill 138,728 146,028 Ιmpairment losses on goodwill - -46,614 Operating profit 138,728 99,414 Other income - 100 Finance income 4,255 636 Finance expenses -37,835 -53,197 Loss from foreign exchange differences -73 -13,216 Share of profit of associates (note 15.1) 585 611 Share of profit of joint ventures (note 15.2) 2,706 2,589 Profit before taxes 108,366 36,937 i) Other operating income and expenses (all amounts in Euro thousands) 2021 2020 Scrap sales 48 237 Income from services 1,215 1,375 Rental income 2,550 4,087 Gains on disposal of PPE, intangible assets and investment property (note 11, 29) 5,747 1,094 Fair value gain from investment property (note 12) 333 - Other income 835 759 Other income total 10,728 7,552 Fair value loss from investment property (note 12) - -94 Restructuring cost -255 -531 Various recurrent taxes - fees -354 - Other expenses -222 -860 Other expenses total -831 -1,485 ii) Other income (all amounts in Euro thousands) 2021 2020 Income from participations and investments - 100 Other income - 100 3. Operating segment information (continued) Information by business activities Reconciliation of profit The restructuring cost relates to voluntary retirement incentive programs in all Group operating segments. 4. Other income and expenses Net finance costs, and other income/loss are not allocated to individual segments as the underlying instruments are managed on a Group basis. For the year ended 31 December 2020 174 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 2021 2020 restated Staff costs and related expenses (note 7) -328,879 -312,692 Raw materials and consumables used -481,338 -421,729 Energy cost -279,296 -204,269 Changes in inventory of finished goods and work in progress 20,309 -12,096 Distribution expenses -183,784 -178,932 Third party fees -136,410 -129,896 Depreciation, amortization and impairment of tangible, intangible assets and government grants (note 11,14,27) -136,481 -139,567 Other expenses -58,191 -65,906 Total expenses by nature -1,584,070 -1,465,087 Included in: Cost of sales -1,403,728 -1,297,763 Administrative expenses -153,951 -143,046 Selling and marketing expenses -26,391 -24,278 -1,584,070 -1,465,087 (all amounts in Euro thousands) 2021 2020 restated i) Finance income Interest income and related income 1,176 636 Fair value gains on derivatives 3,079 - Finance income 4,255 636 ii) Finance expenses Interest expense and related expenses -34,620 -46,222 Finance costs of actuarial studies (note 25) -186 -186 Unwinding of discount of rehabilitation and other provisions (note 26) -501 -730 Interest expense on lease liabilities -2,528 -2,811 Fair value losses on derivatives - -3,248 Finance expense -37,835 -53,197 iii) Loss from foreign exchange differences Net exchange gains/(losses) 25,385 -46,458 Fair value (losses)/gains on derivatives -25,458 33,242 Losses from foreign exchange differences -73 -13,216 (all amounts in Euro thousands) 2021 2020 restated Wages, salaries and related expenses 294,606 279,741 Social security costs 27,615 27,254 Share-based payment expense of 2020 plan (note 24) 2,829 1,394 Fair value of share options granted to directors and employees (note 29) 886 1,720 Other post retirement and termination benefits - defined benefit plans (note 25) 3,384 3,300 Total staff costs 329,320 313,409 The average number of Group employees for the fiscal year 2021 was 5,352 (2020: 5,363). 6. Net finance costs and foreign exchange differences 7. Staff costs Losses from foreign exchange differences incorporate mainly the effects of changes in foreign exchange rates of intragroup loans and the fair value of derivatives that hedge the volatility of foreign currencies associated with these intragroup loans (note 35a). 5. Expenses by nature Moreover, the Group's costs in raw materials impacted by the rising import shipping freight costs, especially in the North America region. In 2021, energy costs increased sharply. The Group faced unexpected spike of fuels (primarily pet coke and natural gas) and electricity costs, especially in the second semester of the year. The negative impact affected all Group regions. 175 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) 2021 2020 restated Current tax 11,717 10,380 Deferred tax (note 18) 2,612 23,761 Non deductible taxes and differences from tax audit 2,482 1,636 16,811 35,777 (all amounts in Euro thousands) 2021 2020 restated Profit before tax 108,366 36,937 Impairment of goodwill - -46,614 Profit before tax and impairment of goodwill 108,366 83,551 Tax calculated at the parent company tax rate of 12.5% (2020:12.5%) 13,546 10,444 Effect of different tax rates in the countries that the Group operates 5,695 1,098 Tax calculated at weighted average tax rate of 17.8% (2020: 14%) 19,241 11,542 Tax adjustments in respect of: Income not subject to tax -2,226 -1,182 Expenses not deductible for tax purposes 4,969 7,669 Effect of change in tax rate 127 - Utilization of prior years unrecognized losses -120 -15 Effect of unrecognized deferred tax asset on tax carry forward losses 1,898 5,148 Effect of de-recognition of net operating loss carryforwards - 12,198 Tax incentives -3,521 -3,374 Base Erosion and Anti-Abuse Tax 527 1,757 Tax on loss from disposal of treasury shares -6,174 - Change in recognition of net operating loss carryforwards -46 862 Other 2,136 1,172 Effective tax charge 16,811 35,777 On 31 December 2021, certain Group entities had tax carry forward losses of €127.4 million (2020: €115.5 million). These entities have recognized deferred tax assets amounting to €22.4 million (2020: 21.8 million), attributable to losses amounting to €93.2 million (2020: €86.2 million), as these deferred tax assets will be recoverable using the estimated future taxable income based on approved business plans (note 18). Deferred tax assets are recognized for the carryforwards of unused tax losses to the extent that it is probable that future taxable profit will be available against which the losses can be utilized. The calculation of the tax carry-forward receivable to be recognized requires management judgment in assessing future profitability and recoverability (note 2.3). Τhe profit before tax of the Group companies is taxed at the applicable rate corresponding to the country in which each company is domiciled. The local income tax rates vary, thus resulting in corresponding tax rate differentials. A weighted average tax rate is determined by taking tax rate differentials into account. The following table provides the reconciliation of prima facie tax payable to income tax expense : The Group's subsidiary in USA, Titan America LLC on 31.12.2020 had net operating losses carryforwards of €15.3 million which were utilized in 2021. For the remaining €34.2 million tax carry forward losses, no deferred tax asset has been recognized, since they did not meet the recognition criteria according to IAS 12. Tax carry forward losses amounting to €24.9 million and €7.9 million expire up to 2025 and 2026 respectively, while losses amounting to €1.4 million may be carried forward indefinitely. 8. Income tax expense Tax reconciliation 176 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands unless otherwise stated) 2021 2020 restated Net profit for the year attributable to equity holders of the parent 91,923 1,126 Weighted average number of ordinary shares in issue 74,795,239 77,133,713 Basic earnings per ordinary share (in €) 1.2290 0.0146 (all amounts in Euro thousands unless otherwise stated) 2021 2020 restated Net profit for the year attributable to equity holders of the parent 91,923 1,126 Weighted average number of ordinary shares for diluted earnings per share 74,795,239 77,133,713 Share options and awards 294,514 256,516 Total weighted average number of shares in issue for diluted earnings per share 75,089,753 77,390,229 Diluted earnings per ordinary share (in €) 1.2242 0.0145 Following the authorization granted to the Board of Directors by the Extraordinary Meeting of the company’s Shareholders on the 13th of May 2019, the Board of Directors of Titan Cement International SA decided on the 22nd of March 2021 the return of capital of €0.40 (40 cents) per share to all the Shareholders of the Company on record on the 29th of April 2021. 9.Earnings per share 10. Dividends and return of capital For the year ended 31.12.2020 Following the authorization granted to the Board of Directors by the Extraordinary Meeting of the Company's Shareholders on 13 May 2019, the Board of Directors of Titan Cement International SA decided on the 16th of March 2022 the return of capital of €0.50 (50 cents) per share to all the Shareholders of the Company on record on 28th of April 2022. Basic earnings per share are calculated by dividing the net profit attributable to shareholders for the year by the weighted average number of shares in issue during the year, excluding shares purchased by the Group and held as treasury shares. Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. Options granted to employees under the Group’s plans 2014 and 2017 (note 24) are considered to be potential ordinary shares. For the year ended 31.12.2021 177 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) Land Quarries Buildings Plant & equipment Motor vehicles Office furniture, fixtures and equipment Assets under construction Total Opening balance 253,640 134,805 211,496 880,352 71,136 12,904 72,909 1,637,242 Additions 41 1,747 309 3,402 227 668 56,071 62,465 Provisions for restoration 191 826 98 6,680 - - -432 7,363 Additions due to acquisition - - 133 29 - - - 162 Interest capitalization - - - - - 1,008 1,008 Disposals (NBV) -793 - -123 -108 -72 -31 - -1,127 Reclassification of assets from/to other PPE categories 784 338 5,674 39,306 3,329 2,361 -51,590 202 Transfers from/to other accounts 13 - 45 -206 -31 -146 515 190 Depreciation charge (note 29) -3,789 -9,911 -11,774 -74,363 -14,603 -4,267 - -118,707 Impairment of PPE (note 29) -944 - -42 -6 - - - -992 Exchange differences -16,422 -9,099 -14,890 -58,814 -4,514 -359 -6,498 -110,596 Ending balance 232,721 118,706 190,926 796,272 55,472 11,130 71,983 1,477,210 Opening balance 12,338 - 17,176 13,657 14,254 58 - 57,483 Additions 2,294 - 6,487 3,515 2,026 - - 14,322 Disposals (NBV) - - 1 -790 -100 - - -889 Reclassification of assets from ROU's to PPE - - - -75 -127 - - -202 Depreciation charge (note 29, 33) -1,472 - -4,493 -4,319 -4,554 -36 - -14,874 Exchange differences -1,125 - -955 -915 -812 - - -3,807 Ending balance 12,035 - 18,216 11,073 10,687 22 - 52,033 At 31 December 2020 Cost 305,220 217,785 452,991 1,897,048 260,036 62,441 72,478 3,267,999 Accumulated depreciation -55,200 -99,079 -242,910 -1,083,204 -193,873 -51,277 - -1,725,543 Accumulated losses of impairment of PPE -5,264 - -939 -6,499 -4 -12 -495 -13,213 Net book value 244,756 118,706 209,142 807,345 66,159 11,152 71,983 1,529,243 Year ended 31 December 2020 11. Property, plant and equipment Right of use assets 178 MANAGEMENT REPORT FINANCIAL REVIEW 11. Property, plant and equipment (continued) (all amounts in Euro thousands) Land Quarries Buildings Plant & equipment Motor vehicles Office furniture, fixtures and equipment Assets under construction Total Opening balance 232,721 118,706 190,926 796,272 55,472 11,130 71,983 1,477,210 Additions 60 6,178 101 2,399 380 769 90,077 99,964 Interest capitalization - - - - - - 461 461 Disposals (NBV) -824 - -138 -217 -110 -1 -178 -1,468 Reclassification of assets from/to other PPE categories 283 - 2,283 58,473 18,906 3,605 -78,155 5,395 Transfers from/to other accounts 1 -471 54 477 - -12 -3,724 -3,675 Depreciation charge (note 29) -3,249 -10,975 -10,817 -72,946 -14,682 -3,848 - -116,517 Exchange differences 13,080 8,007 -4,553 3,177 3,541 66 5,876 29,194 Ending balance 242,072 121,445 177,856 787,635 63,507 11,709 86,340 1,490,564 Opening balance 12,035 - 18,216 11,073 10,687 22 - 52,033 Additions 272 - 5,184 10,884 2,606 - - 18,946 Disposals (NBV) - - -43 -67 -88 - - -198 Reclassification of assets from ROU's to PPE - - - -1,257 -4,138 - - -5,395 Depreciation charge (note 29, 33) -1,459 - -4,869 -4,501 -3,116 -19 - -13,964 Exchange differences 923 - 932 1,136 405 - - 3,396 Ending balance 11,771 - 19,420 17,268 6,356 3 - 54,818 At 31 December 2021 Cost 323,716 239,047 457,687 2,005,400 292,025 59,930 86,877 3,464,682 Accumulated depreciation -64,375 -117,602 -259,472 -1,194,052 -222,162 -48,206 - -1,905,869 Accumulated losses of impairment of PPE -5,498 - -939 -6,445 - -12 -537 -13,431 Net book value 253,843 121,445 197,276 804,903 69,863 11,712 86,340 1,545,382 Year ended 31 December 2021 Right of use assets 179 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) 2021 2020 Opening balance 11,720 11,628 Disposals -1,043 - Net gain from measurement at fair value (note 4) 575 162 Transfer to assets held for sale -238 - Transfer to property, plant and equipment -38 -58 Exchange differences 4 -12 Ending balance 10,980 11,720 (all amounts in Euro thousands) 2021 2020 Rental income derived from investment property 426 428 Direct operating expenses (including repair and maintenance) that did not generate rental income -73 -63 Net profit arising from investment properties carried at fair value 333 -94 (all amounts in Euro thousands) 2021 2020 Within one year 522 467 Between 1 and 2 years 415 408 Between 2 and 3 years 334 313 Between 3 and 4 years 246 242 Between 4 and 5 years 228 153 Later than five years 574 544 2,318 2,127 12. Investment propert y Property that is leased among Group subsidiaries is not included in investment property but in property, plant and equipment in the Group statement of financial position. Investment property is measured at fair value by external, independent, certified valuators, members of the institute of the certified valuators and certified from the European Group of Valuers' Associations (TEGoVA) & RICS (Royal Institution of Chartered Surveyors). Investment property is measured at fair value on a yearly basis. The fair value measurement of the investment property of the Group has been mainly conducted in accordance with the comparative method or the current market values of similar properties. The main factors that were taken into consideration, are the property location, the surface area, the local urban planning, the bordering road networks, the regional infrastructure, the property maintenance status and merchantability, the technical construction standards in the case of buildings and the impact of environmental issues if any. The investment properties are leased to tenants under operating leases with rentals payable monthly, quarterly or yearly. Lease payments for some contracts include Consumer Price Index (CPI) increases, but there are no other variable lease payments that depend on an index or rate. Minimum lease payments receivable on leases of investment properties are as follows: The Board of Directors of the Group subsidiary in Greece, Titan Cement S.A., decided to sell its land plots located in Elefsina-Attika. In December 2021, the plots were sold at a selling price of €7.1 million, resulting in a gain of €6.1 million. A small part of the land plots with a carrying amount of €238 thousand was classified as forest area by the Forest State Office, which resulted in a delay in completing the sale within 2021. Its sale is expected to be made during 2022 with a selling price of €500 thousand, resulting in a gain of €262 thousand. 11. Property, plant and equipment (continued) On the Turkish subsidiaries Adocim Cimento Beton Sanayi ve Ticaret A.S. and Adocim Marmara Cimento Beton Sanayi ve Ticaret A.S. assets, there are mortgages of €29.31 million and €0 million respectively, securing bank credit facilities. As at 31.12.2021, utilization under these credit facilities amounted to €3.72 million and nil respectively. In 2020, the Group recorded impairment losses of €992 thousand, that were presented in the cost of sales in the consolidated income statement. Specifically, the amount of €944 thousand was recorded for a plot of land, €42 thousand for buildings and €6 thousand for machineries in Bulgaria. On 31.12.2020, their recoverable amount was estimated to be €1,516 thousand. Disposal of assets During 2021, the Group received €8,694 thousand (2020: €3,110 thousand) from the disposal of tangible/intangible assets and investment property with total net book value of €2,947 thousand (2020: €2,016 thousand). Thus, the Group recognized €5,747 thousand gains (2020: €1,094 thousand gains) on disposal of PPE in the consolidated income statement (note 4). Impairments of property, plant and equipment Property, plant and equipment pledged as securit y 180 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) Initial goodwill Goodwill impairment Total goodwill Balance at 1 January 2020 362,351 -17,828 344,523 Additions due to acquisition 6 - 6 Impairment (note 29) - -46,614 -46,614 Exchange differences -29,705 -197 -29,902 Balance at 31 December 2020 332,652 -64,639 268,013 Balance at 1 January 2021 332,652 -64,639 268,013 Exchange differences 1,207 2,766 3,973 Balance at 31 December 2021 333,859 -61,873 271,986 .H\DVVXPSWLRQV Sales volumes: 13. Goodwill Impairment testing of goodwill Terminal value and Perpetual growth rates: Terminal value cash flows are based on the long-term growth expectations for the industry in the country of operation. It is calculated based on sustainable sales volumes, capacity utilization, EBITDA margin and CAPEX, to reflect sustainable cash flows in perpetuity. Perpetuity Growth rates are in line with the nominal economic growth. Rates are reasonably compared to long-term inflation expectations, adjusted for per capita consumption expectations and capacity utilization. Inputs that have been taken into consideration are estimates from international agencies’ or banks’ forecasts. Group cash-generating-units (CGUs) are defined generally as a country or group area on the basis of the sales and management structure. The recoverable amount of all CGUs has been determined based on value-in-use calculations. These calculations use post-tax cash flow projections based on financial budgets approved by management covering generally a five-year period. Forecasts rely on a combination of internal and external factors that influence each CGU operations. Furthermore, in specific circumstances, when recent results of a CGU do not reflect historical performance and most external economic variables provide confidence that a reasonably determinable improvement is expected in the mid-term, management uses cash flow projections over a period up to 10 years, to reflect sufficiently the cyclical nature of the industry. The calculation of value-in-use for the Group's evaluated CGUs is most sensitive to the following assumptions: Input cos t evolut i on, ma i nly cons i st i n g o f thermal and electr i cal energy, transportat i o n costs , and raw mater i al costs , are determ i ned by f orecasted projections provided by international agencies and institutions. Furthermore, actions for mitigating supply chain disruption and the curtailment of th e group’s environmental footprint are factored-in. Volume assumptions are provided by local management and reflect its best estimates taking into consideration: past performance, local market growth estimates, infrastructure projects, etc. Sales volume growth rates are also based on published industry research and take into account demographic trends including population growth, household formation, and economic output (among other factors) in the countries where the Group operates. Selling prices and cost: Price assumptions are provided by local management and reflect its best estimates. Factors that have been taken into consideration are: historical trends, inflation, brand loyalty, growth rate of the regional economy, competition, production cost increases, etc. 181 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) Carrying amount of goodwill Perpetual Growth rates Discount rates North America 193,113 2%-3% 5.6% Bulgaria 45,440 1.5% 4.7% Turkey 16,294 11% 24.7% Other 17,139 0.8%-1.4% 5.2%-7.1% Total 271,986 (all amounts in Euro thousands) Carrying amount of goodwill Perpetual Growth rates Discount rates North America 178,246 2%-3% 3.8%-5.1% Bulgaria 45,440 1.3% 3% Egypt - 7.3% 17.60% Turkey 27,238 9.5% 15.9% Other 17,089 0.8%-2.4% 2.2%-6.9% Total 268,013 13. Goodwill (continued) -Increase in the Discount rate by: 3.8% for Bulgaria and 6.4% for Turkey. -Decrease in the operating margin (EBITDA margin) for each year of planning as well as in the terminal value of around 8.9% for Bulgaria and 8.6% for Turkey. Key assumptions used for value in use calculations in respect of goodwill 2020 Sensitivity of recoverable amounts Discount rates: Discount rates are according to post tax weighted average cost of capital (WACC) for each CGUs, deriving from Group’s current market risk assessment, applicable local tax rates and local currency risk free rates. Key assumptions used for value in use calculations in respect of goodwill 2021 On 31.12.2021, the Group analyzed the sensitivities of the recoverable amounts to the reasonably change in key assumptions. For all CGUs the sensitivity analysis did not present a situation in which the carrying value of the CGU would exceed their recoverable amount. With respect to Bulgaria and Turkey additional sensitivity analysis have been performed in order to assess the changes in the operational plan used for cash flow estimates or the discount rate, which would cause the carrying amount to be equal to the recoverable amount. 182 MANAGEMENT REPORT FINANCIAL REVIEW 14. Intangible assets (all amounts in Euro thousands) Licences Trademarks Customer relationships Computer software Other intangible assets Assets under construction Total Balance at 1 January 2020 38,508 16,123 5,791 1,219 4,162 19,367 85,170 Additions 72 - - 63 137 7,237 7,509 Additions due to acquisition - - - - 5 - 5 Reclassification of assets from/to other intangible assets categories - - - 2,950 111 -3,061 - Transfers from other accounts - - - 260 -2 -190 68 Amortization charge (note 29) -1,112 -916 -1,710 -918 -544 - -5,200 Exchange differences -1,597 -1,162 -283 -15 -128 -88 -3,273 Balance at 31 December 2020 35,871 14,045 3,798 3,559 3,741 23,265 84,279 Balance at 1 January 2021 35,871 14,045 3,798 3,559 3,741 23,265 84,279 Additions 6 - - 157 198 6,773 7,134 Disposals (NBV) (note 29) - - - - -238 - -238 Reclassification of assets from/to other intangible assets categories 411 - - 5,827 345 -6,583 - Transfers from other accounts - - - 18,435 47 -16,242 2,240 Amortization charge (note 29) -1,146 -877 -1,659 -1,991 -532 - -6,205 Exchange differences 1,701 1,044 228 -21 121 1,161 4,234 Balance at 31 December 2021 36,843 14,212 2,367 25,966 3,682 8,374 91,444 183 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 15.1 Investment in associates (all amounts in Euro thousands) 2021 2020 Summarized statement of financial position as at 31 December Non-current assets 17,686 26,617 Current assets 6,377 7,087 Total assets 24,063 33,704 Non-current liabilities 1,663 1,879 Current liabilities 6,864 7,198 Total liabilities 8,527 9,077 Equity 15,536 24,627 Summarized income statement and statement of comprehensive income for the year ended 31 December Revenue 15,233 20,306 (Loss)/profit after taxes -6,384 1,049 Other comprehensive losses for the year -10 -30 Total comprehensive (loss)/income for the year net of tax -6,394 1,019 Reconciliation to carrying amounts: Opening net assets 1 January 24,627 32,009 (Loss)/profit for the year -6,384 1,049 Other comprehensive losses for the year -10 -30 Share capital increase -700 740 Dividends paid -1,839 -6,173 Foreign exchange differences 235 -915 Restructuring -393 -2,053 Closing net assets 15,536 24,627 Adjustments due to unrecognized fair value gain on assets contributed to associate -4,318 -4,665 Accumulated depreciation adjustments related to unrecognized fair value 4,318 1,272 Group's carrying amount of the investment after adjustments 7,190 7,422 15. Investments in associates, joint ventures and subsidiaries Based on their contribution in its profit before taxes, the Group decided that each one of the aforementioned associates is individually immaterial and thus it discloses in aggregate its interests in these associates as follows: None of the aforementioned companies is listed on a public exchange market. The Group financial statements incorporate the following companies with the equity method of consolidation: a) Karierni Materiali Plovdiv AD with ownership percentage 48.711% (31.12.2020: 48.711%), Karierni Materiali AD with ownership percentage 48.764% (31.12.2020: 48.764%). The aforementioned companies are based in Bulgaria and operate in the aggregates business. b) Ecorecovery S.A. with ownership percentage 48% (31.12.2020: 48%). Ecorecovery is based in Greece and it processes, manages and trades solid waste for the production of alternative fuels. c) ASH Venture LLC with ownership percentage 33% (31.12.2020: 33%) which beneficiates, markets and sells fly ash. ASH Venture LLC is based in USA. 184 MANAGEMENT REPORT FINANCIAL REVIEW 15.2 Investment in joint ventures (all amounts in Euro thousands) 2021 2020 Summarized statement of financial position as at 31 December Non-current assets 124,251 126,497 Other current assets 42,544 34,130 Cash and cash equivalents 6,213 10,866 Total assets 173,008 171,493 Long-term borrowings 59,009 52,461 Other non-current liabilities 689 701 Short-term borrowings 21,192 40,653 Other current liabilities 27,991 19,477 Total liabilities 108,881 113,292 Equity 64,127 58,201 1.1 - 31.12.2021 1.1 - 31.12.2020 Summarized income statement and statement of comprehensive income Revenue 83,845 70,727 Depreciation, amortization and impairments of assets -8,363 -8,548 Finance income 623 779 Finance expense -7,364 -8,319 Income tax -- Profit after taxes 5,411 5,176 Total comprehensive profit/(loss) for the year net of tax 5,411 5,176 Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) 19,524 19,409 2021 2020 Reconciliation to carrying amounts: Opening net assets 1st January 58,201 74,155 Profit for the year 5,411 5,176 Foreign exchange differences 515 -21,130 Closing net assets 31th December 64,127 58,201 Group's share in % 50% 50% Group's share in '000 € 32,064 29,101 Goodwill 49,499 49,087 Carrying amount of the investment as at 31st of December 81,563 78,188 Companhia Industrial De Cimento Apodi - Consolidated * * Consolidated figures before elimination with the broader Group 15.Investments in associates, joint ventures and subsidiaries (continued) On 31 December 2021, the Group incorporated in its financial statements the following joint ventures with the equity method of consolidation. a) Companhia Industrial De Cimento Apodi with ownership percentage 50% (31.12.2020: 50%). Apodi is based in Brazil and operates in the production of cement. b) Apodi Distribuição e Logistica Ltda with ownership percentage 50% (31.12.2020: 50%). The Apodi Distribuição e Logistica Ltda is a trading company based in Brazil. None of the aforementioned companies is listed on a public exchange market. Summarised financial information of the joint ventures, based on their IFRS financial statements, and reconciliation with carrying amount of the investment in consolidated financial statements are set out below: - Increase in the Discount rate by 3.3%. - Decrease in the operating margin (EBITDA margin) for each year of planning as well as in the terminal value of around 7.5%. On 31.12.2021, the Group carried out an impairment test for the carrying value of the Brazilian CGU. The recoverable amount, which has been determined based on value-in-use calculations with a discount rate of 13.8% and a perpetual growth rate of 3.25%, exceeds the carrying value. Additional sensitivity analysis has been performed in order to assess the changes in the operational plan used for cash flow estimates or the discount rate, which would cause the carrying amount to be equal to the recoverable amount. 185 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) 2021 2020 Summarized statement of financial position as at 31 December Non-current assets 58,567 97,229 Current assets 15,791 19,076 Total assets 74,358 116,305 Non-current liabilities 14,459 17,266 Current liabilities 18,416 22,471 Total liabilities 32,875 39,737 Equity 41,483 76,568 Attributable to: Equity holders of the parent 31,112 57,426 Non-controlling interests (25%) 10,371 19,142 1.1 - 31.12.2021 1.1 - 31.12.2020 Summarized income statement and statement of comprehensive income Revenue 39,292 40,984 Loss after taxes -5,805 -4,594 Other comprehensive losses for the year -29,290 -27,742 Total comprehensive losses for the year net of tax -35,095 -32,336 Total comprehensive losses attributable to non-controlling interests -8,773 -8,084 Summarized cash flow information Cash flows from operating activities 20 842 Cash flows from investing activities -2,958 -1,457 Cash flows from financing activities 2,084 -105 Net decrease in cash and cash equivalents -854 -720 Cash and cash equivalents at beginning of the period 874 1,952 Effects of exchange rate changes 53 -358 Cash and cash equivalents at end of the year 73 874 15. Investments in associates, joint ventures and subsidiaries (continued) 15.3 Subsidiaries with significant percentage of non-controlling interests * Figures before elimination with the broader Group The following table summarizes the financial information of subsidiary Adocim Cimento Beton Sanayi ve Ticaret A.S. in which the non-controlling interests held significant portion (note 16). On 31.12.2021, the Group non-controlling interest was €15.3 million (2020: €24.0 million) of which €10.4 million (2020: €19.1 million) derived from Adocim Cimento Beton Sanayi ve Ticaret A.S., €0.7 million (2020: €0.6 million) from Alexandria Portland Cement Co. S.A.E., €3.0 million (2020: €3.0 million) from Usje Cementarnica AD and €1.1 million (2020: €1.1 million) from Cement Plus LTD. Adocim Cimento Beton Sanayi ve Ticaret A.S. 186 MANAGEMENT REPORT FINANCIAL REVIEW 16. Principal subsidiaries, associates and joint ventures Subsidiary, associate and joint venture name Country of incorporation Nature of business Direct Indirect Direct Indirect Full consolidation method Titan Cement International S.A. Belgium Investment holding company Τitan Cement Company S.A Greece Cement producer 100.000 - 100.000 Aitolika Quarries S.A. Greece Quarries & aggregates - 63.723 - 63.723 Albacem S.A. Greece Trading company - 100.000 - 100.000 Interbeton Construction Materials S.A. Greece Ready mix & aggregates - 100.000 - 100.000 Intertitan Trading International S.A. Greece Trading company - 100.000 - 100.000 Gournon Quarries S.A. Greece Quarries & aggregates - 100.000 - 100.000 Quarries of Tagaradon Community S.A. Greece Quarries & aggregates - 67.587 - 67.587 Vahou Quarries S.A. Greece Quarries & aggregates - 100.000 - 100.000 Sigma Beton S.A. Greece Quarries & aggregates - 100.000 - 100.000 Titan Atlantic Cement Industrial & Commercial S.A. Greece Investment holding company - 100.000 - 100.000 Titan Cement International Trading S.A. Greece Trading company - 100.000 - 100.000 Brazcem Participacoes S.A. Brazil Investment holding company - 100.000 - 100.000 Double W & Co OOD Bulgaria Port - 99.989 - 99.989 Granitoid AD Bulgaria Trading company - 99.760 - 99.760 Gravel & Sand PIT AD Bulgaria Quarries & aggregates - 99.989 - 99.989 Trojan Cem EOOD Bulgaria Trading company - 95.000 - 95.000 Zlatna Panega Cement AD Bulgaria Cement producer - 99.989 - 99.989 Green Alternative Energy Assets EAD Bulgaria Alternative fuels - 100.000 - 100.000 Cementi ANTEA SRL Italy Trading company - 100.000 - 100.000 Cementi Crotone S.R.L. Italy Import & distribution of Cement - 100.000 - 100.000 Fintitan SRL Italy Import & distribution of cement - 100.000 - 100.000 Separation Technologies Canada Ltd Canada Processing of fly ash - 100.000 - 100.000 Alexandria Development Co.Ltd (3) Cyprus Investment holding company - 100.000 - 100.000 Titan Eastmed Investments Limited (4) Cyprus Investment holding company - 100.000 - 100.000 Alvacim Ltd Cyprus Investment holding company - 100.000 - 100.000 East Cement Trade Ltd Cyprus Investment holding company - 100.000 - 100.000 Feronia Holding Ltd Cyprus Investment holding company - 100.000 - 100.000 Iapetos Ltd Cyprus Investment holding company - 100.000 - 100.000 KOCEM Limited Cyprus Investment holding company - 100.000 - 100.000 Rea Cement Investments Limited (1) Cyprus Investment holding company - 100.000 - - Themis Holdings Ltd Cyprus Investment holding company - 100.000 - 100.000 Titan Cement Cyprus Limited Cyprus Investment holding company - 100.000 - 100.000 Tithys Holdings Limited Cyprus Investment holding company 100.000 - 100.000 - Alexandria Portland Cement Co. S.A.E (2) Egypt Cement producer - 99.605 - 99.601 Beni Suef Cement Co.S.A.E. (2) Egypt Cement producer - 100.000 - 99.602 GAEA -Green Alternative Energy Assets (2) Egypt Alternative fuels - 99.996 - 99.992 Titan Beton & Aggregate Egypt LLC (2) Egypt Quarries & aggregates - 99.611 - 99.608 Sharr Beteiligungs GmbH Germany Investment holding company - 100.000 - 100.000 Arresa Marine Co Marshall Islands Shipping - 100.000 - 100.000 Adocim Marmara Cimento Beton Sanayi ve Ticaret A.S. Turkey Processing and trading of cement - 100.000 - 100.000 Adocim Cimento Beton Sanayi ve Ticaret A.S. Turkey Cement producer - 75.000 - 75.000 Titan Cement U.K. Ltd U.K. Import & distribution of cement - 100.000 - 100.000 Titan Global Finance PLC U.K. Financial services 100.000 - 100.000 - Carolinas Cement Company LLC U.S.A. Own/develop real estate - 100.000 - 100.000 Essex Cement Co. LLC U.S.A. Trading company - 100.000 - 100.000 Markfield America LLC U.S.A. Insurance company - 100.000 - 100.000 Massey Sand and Rock Co U.S.A. Quarries & aggregates - 100.000 - 100.000 Mechanicsville Concrete LLC U.S.A. Ready mix - 100.000 - 100.000 Metro Redi-Mix LLC U.S.A. Ready mix - 100.000 - 100.000 Miami Valley Ready Mix of Florida LLC U.S.A. Ready mix - 100.000 - 100.000 () Percentage of investment represents both percentage of shareholding and percentage of control 2021 2020 % of investment () % of investment () Parent company Parent company 187 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 16. Principal subsidiaries, associates and joint ventures (continued) Subsidiary, associate and joint venture name Country of incorporation Nature of business Direct Indirect Direct Indirect Full consolidation method Pennsuco Cement Co. LLC U.S.A. Cement producer - 100.000 - 100.000 Norfapeake Terminal LLC U.S.A. Trading company - 100.000 - 100.000 Roanoke Cement Co. LLC U.S.A. Cement producer - 100.000 - 100.000 S&W Ready Mix Concrete Co. Inc. U.S.A. Ready mix - 100.000 - 100.000 S&W Ready Mix LLC U.S.A. Ready mix - 100.000 - 100.000 Separation Technologies LLC U.S.A. Processing of fly ash - 100.000 - 100.000 Standard Concrete LLC U.S.A. Trading company - 100.000 - 100.000 ST Mid-Atlantic LLC U.S.A. Processing of fly ash - 100.000 - 100.000 ST Equipment & Technology LLC U.S.A. Sales of fly ash processing equipment - 100.000 - 100.000 ST Equipment & Technology Trading Company LLC U.S.A. Trading company - 100.000 - 100.000 Summit Ready-Mix LLC U.S.A. Ready mix - 100.000 - 100.000 Titan Florida LLC U.S.A. Cement producer - 100.000 - 100.000 Titan Mid-Atlantic Aggregates LLC U.S.A. Quarries & aggregates - 100.000 - 100.000 Titan Virginia Ready Mix LLC U.S.A. Ready mix - 100.000 - 100.000 Τitan Αmerica LLC U.S.A. Investment holding company - 100.000 - 100.000 Trusa Realty LLC U.S.A. Real estate brokerage - 100.000 - 100.000 Cementara Kosjeric AD Serbia Cement producer - 100.000 - 100.000 Stari Silo Company DOO Serbia Trading company - 100.000 - 100.000 TCK Montenegro DOO Montenegro Trading company - 100.000 - 100.000 Esha Material DOOEL North Macedonia Quarries & aggregates - 100.000 - 100.000 GAEA Zelena Alternative Enerjia DOOEL North Macedonia Alternative fuels - 100.000 - 100.000 ID Kompani DOOEL North Macedonia Trading company - 95.000 - 95.000 MILLCO-PCM DOOEL North Macedonia machines, equipment and - 100.000 - 100.000 Opalit DOOEL North Macedonia Quarries & aggregates - 95.000 - 95.000 Rudmak DOOEL North Macedonia Trading company - 100.000 - 100.000 Usje Cementarnica AD North Macedonia Cement producer - 95.000 - 95.000 Vesa DOOL North Macedonia Trading company - 100.000 - 100.000 Cement Plus LTD Kosovo Trading company - 64.999 - 64.999 Esha Material LLC Kosovo Quarries & aggregates - 100.000 - 100.000 Kosovo Construction Materials L.L.C. Kosovo Quarries & aggregates - 100.000 - 100.000 Sharrcem SH.P.K. Kosovo Cement producer - 100.000 - 100.000 Alba Cemento Italia, SHPK Albania Trading company - 100.000 - 100.000 Antea Cement SHA Albania Cement producer - 100.000 - 100.000 GAEA Enerjia Alternative e Gjelber Sh.p.k. Albania Alternative fuels - 100.000 - 100.000 Colombus Properties B.V. Holland Investment holding company - 100.000 - 100.000 Salentijn Properties1 B.V. Holland Investment holding company - 100.000 - 100.000 Titan Cement Netherlands BV Holland Investment holding company - 100.000 - 100.000 Equity consolidation method Companhia Industrial De Cimento Apodi S.A. Brazil Cement producer - 50.000 - 50.000 Apodi Concretos Ltda Brazil Ready mix - 50.000 - 50.000 Apodi Distribuição e Logistica Ltda Brazil Trading company - 50.000 - 50.000 ASH Venture LLC U.S.A. Processing of fly ash - 33.000 - 33.000 Ecorecovery S.A. Greece Engineering design services for solid and liquid waste facilities - 48.000 - 48.000 Karierni Materiali Plovdiv AD Bulgaria Quarries & aggregates - 48.711 - 48.711 Karierni Materiali AD Bulgaria Quarries & aggregates - 48.764 - 48.764 () Percentage of investment represents both percentage of shareholding and percentage of control 2021 2020 % of investment () % of investment () 188 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 2021 2020 Utility deposits 5,197 2,759 Excess benefit plan assets (note 25) 3,307 2,572 Other non-current assets 10,052 11,626 18,556 16,957 (all amounts in Euro thousands) 2021 2020 restated Deferred tax assets to be recovered: after more than 12 months -78,992 -91,911 within 12 months -14,877 -10,507 Deferred tax liabilities to be used: after more than 12 months 185,806 174,069 within 12 months 12,800 17,963 Deferred tax liability (net) 104,737 89,614 (all amounts in Euro thousands) 2021 2020 restated Opening balance, net deferred liability 89,614 84,866 Income statement charge (note 8) 2,612 23,761 Tax charged to equity through other comprehensive income 1,118 -1,109 Tax charged to equity 9,610 -5,294 Deferred tax adjustment on revaluation reserves 213 -1,489 Exchange differences 1,570 -11,121 Ending balance, net deferred liability 104,737 89,614 The movement in the deferred income tax account after set-offs is as follows: Deferred income taxes are calculated in full on temporary differences under the liability method using the principal tax rates that apply to the countries in which the companies of the Group operate. 17. Other non-current assets 18. Deferred income taxes 16. Principal subsidiaries, associates and joint ventures (continued) 4) In May 2021, Titan Egyptian Investments Limited changed its name to Titan Eastmed Investments Limited and the country of its incorporation from U.K. to Cyprus. 3) In April 2021, Alexandria Development Limited changed the country of its incorporation from U.K. to Cyprus. 2) Change in percentage ownership. Significant Group structure changes 1) On 17 May 2021, the Group's subsidiary in Cyprus, Tithys Holdings Limited, acquired Rea Cement Investments Limited. The Group incorporated Rea Cement Investments Limited in its financial statements with the full method of consolidation. 189 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) 2021 2020 restated A nalysis of deferred tax liabilities (before set - offs) Property, plant and equipment 128,342 131,322 Mineral deposits 17,624 17,223 Intangible assets 45,350 38,952 Unrealized foreign exchange differences 4,959 2,596 Receivables and prepayments 1,026 351 Trade and other payables 113 - Prepaid expenses 1,624 1,468 Other -432 120 198,606 192,032 Analysis of deferred tax assets (before set - offs) Intangible assets -78 -78 Investments & other non-current receivables -1,450 -1,068 Treasury Shares -1,940 -11,550 Unrealized foreign exchange differences -10,773 -13,442 Inventories -2,675 -3,029 Post-employment and termination benefits -4,460 -4,743 Receivables and prepayments -6,513 -6,155 Tax losses carried forward (note 8) -22,402 -21,782 Interest expense tax carried forward -4,421 -3,769 Deferred income -701 -930 Long-term debt/lease obligations -12,527 -10,675 Provisions and accrued expenses -23,683 -23,509 Trade and other payables -128 -87 Other -2,118 -1,601 -93,869 -102,418 Net deferred tax liability 104,737 89,614 Deferred tax assets (after set - offs) 8,867 12,464 Deferred tax liabilities (after set - offs) 113,604 102,078 Net deferred tax liability 104,737 89,614 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. 18. Deferred income taxes (continued) 190 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) January 1, 2021 Debit to equity Debit/(Credit) to net profit Debit/(Credit) to equity through statement OCI Exchange differences December 31, 2021 restated Deferred tax liabilities (before set - offs) Property, plant and equipment 131,322 213 -3,061 -263 131 128,342 Mineral deposits 17,223 - -993 - 1,394 17,624 Intangible assets 38,952 - 3,255 - 3,143 45,350 Unrealized foreign exchange differences 2,596 - 2,056 - 307 4,959 Receivables and prepayments 351 - 675 - - 1,026 Trade and other payables - - 113 - - 113 Prepaid expenses 1,468 - 33 - 123 1,624 Other 120 - -575 - 23 -432 192,032 213 1,503 -263 5,121 198,606 Deferred tax assets (before set - offs) Intangible assets -78 - - - - -78 Investments & other non-current receivables -1,068 - -372 - -10 -1,450 Treasury Shares -11,550 9,610 - - - -1,940 Unrealized foreign exchange differences -13,442 - 2,461 1,009 -801 -10,773 Inventories -3,029 - 442 - -88 -2,675 Post-employment and termination benefits -4,743 - -21 372 -68 -4,460 Receivables and prepayments -6,155 - -286 - -72 -6,513 Tax losses carried forward (note 8) -21,782 - -547 - -73 -22,402 Interest expense tax carried forward -3,769 - -652 - - -4,421 Deferred income -930 - 294 - -65 -701 Long-term debt/lease obligations -10,675 - -958 - -894 -12,527 Provisions and accrued expenses -23,509 - 1,258 - -1,432 -23,683 Trade and other payables -87 - -41 - - -128 Other -1,601 - -469 - -48 -2,118 -102,418 9,610 1,109 1,381 -3,551 -93,869 Net deferred tax liability 89,614 9,823 2,612 1,118 1,570 104,737 Deferred income tax assets and liabilities are offset when there is a legally enforceable right to set off current tax assets against current tax liabilities and when the deferred income taxes relate to the same fiscal authority. The movement in deferred tax assets and liabilities (prior to offsetting balances within the same tax jurisdiction) during the year is as follows: 18. Deferred income taxes (continued) 191 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) January 1, 2020 Credit to equity Deferred tax adjustment due to change in income tax rates Debit/(Credit) to net profit Debit/(Credit) to equity through statement OCI Exchange differences December 31, 2020 restated restated Deferred tax liabilities (before set - offs) Property, plant and equipment 150,046 - -1,489 -3,576 - -13,659 131,322 Mineral deposits 20,127 - - -1,292 - -1,612 17,223 Intangible assets 38,292 - - 3,809 - -3,149 38,952 Unrealized foreign exchange differences 5,694 - - -2,851 - -247 2,596 Investments 157 - - -154 - -3 - Receivables and prepayments 351 - - - - - 351 Trade and other payables 9---9--- Prepaid expenses 1,113 - - 481 - -126 1,468 Other 186 - - -22 - -44 120 215,975 - -1,489 -3,614 - -18,840 192,032 Deferred tax assets (before set - offs) Intangible assets -290 - - 208 - 4 -78 Investments & other non-current receivables -3,215 - - 2,142 - 5 -1,068 Treasury Shares -6,256 -5,294 - - - - -11,550 Unrealized foreign exchange differences -9,051 - - -4,240 -1,151 1,000 -13,442 Inventories -1,578 - - -1,560 - 109 -3,029 Post-employment and termination benefits -5,436 - - 508 42 143 -4,743 Receivables and prepayments -7,222 - - 867 - 200 -6,155 Tax losses carried forward (note 8) -60,086 - - 34,648 - 3,656 -21,782 Interest expense tax carried forward -3,914 - - 145 - - -3,769 Deferred income -681 - - -329 - 80 -930 Long-term debt/lease obligations -12,896 - - 1,253 - 968 -10,675 Provisions and accrued expenses -18,644 - - -6,442 - 1,577 -23,509 Trade and other payables -107 - - 19 - 1 -87 Other -1,733 - - 156 - -24 -1,601 -131,109 -5,294 - 27,375 -1,109 7,719 -102,418 Net deferred tax liability 84,866 -5,294 -1,489 23,761 -1,109 -11,121 89,614 The movement in deferred tax assets and liabilities (prior to offsetting balances within the same tax jurisdiction) during the prior year is as follows: 18. Deferred income taxes (continued) 192 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 2021 2020 Inventories Raw materials-maintenance stores 213,465 179,360 Finished goods 101,299 81,293 Provision for obsolete inventories -9,633 -12,067 305,131 248,586 Analysis of provision for impairment of inventories Balance at 1 January 12,067 4,538 Charge for the year (note 29) 606 9,197 Unused amounts reversed (note 29) -2,773 -984 Utilized -180 -730 Reclassification from/to PPE -184 135 Exchange differences 97 -89 Balance at 31 December 9,633 12,067 20. Receivables and prepayments (all amounts in Euro thousands) 2021 2020 Trade receivables 130,025 108,814 Cheques receivables 24,708 25,381 Allowance for doubtful debtors -26,286 -26,231 Total trade receivables 128,447 107,964 Creditors advances 4,478 6,303 V.A.T. and other tax receivables 19,788 11,465 Prepayments 16,774 13,080 Notes receivable 43,204 22,808 Receivables from authorities 13,292 12,329 Other receivables 13,082 13,338 Allowance for doubtful debtors -2,721 -2,040 Total other receivables 107,897 77,283 236,344 185,247 Moreover, the Group hold collaterals amounting to €29,449 thousand (31.12.2020: €30,720 thousand) (note 30). In 2021, the increase in inventories of raw materials and finished goods mostly affected by the increase in energy and shipping freight costs. 19. Inventories The Group applies the IFRS 9 simplified approach for measuring expected credit losses. The approach uses a lifetime expected loss allowance for all trade and other receivables. On that basis, an impairment analysis is performed at the end of the year, using provisional rates that are based on days past due for groupings of various customer segments with similar characteristics. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions, forecasts of future economic conditions, in addition with specific information for individual receivables. Financial assets are written off when there is no reasonable expectation of recovery, such as a debtor failing to engage in a repayment plan with the Group. Where receivables have been written off, the Group continues to engage in enforcement activity to attempt to recover the receivable due. Where recoveries are made, these are recognised in the income statement. Trade receivables are non-interest bearing and are normally settled on 30-170 days. The Group's subsidiaries have not pledged their inventories as collateral. Specifically, TALLC entered into an accounts receivable sale agreement with an unrelated SPE in 2014, whereby trade accounts receivable sold by TALLC to the SPE in exchange for cash and interest-bearing notes receivable. On 31.12.221, the balance of the notes receivable has been increased compared to the prior year due to the increased sales of trade accounts receivable by Titan America LLC (TALLC) to an unrelated Special Purpose Entity (SPE). 193 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 20. Receivables and prepayments (continued) (all amounts in Euro thousands) Expected credit loss rate Trade receivables Impairments As at 31 December 2021 Current 2% 65,695 1,299 More than 30 days past due 3% 47,632 1,385 More than 60 days past due 6% 7,723 437 More than 120 days past due 69% 33,683 23,165 154,733 26,286 As at 31 December 2020 Current 3% 69,168 1,963 More than 30 days past due 6% 26,663 1,625 More than 60 days past due 9% 8,041 738 More than 120 days past due 72% 30,323 21,905 134,195 26,231 (all amounts in Euro thousands) Trade receivables Impairments As at 31 December 2021 Greece and Western Europe 61,898 3,971 North America 43,850 2,654 South Eastern Europe 15,972 1,723 Eastern Mediterranean 15,919 844 137,639 9,192 As at 31 December 2020 Greece and Western Europe 51,316 4,406 North America 30,223 2,160 South Eastern Europe 16,778 1,320 Eastern Mediterranean 18,620 1,087 116,937 8,973 2021 2020 Balance at 1 January 28,271 27,542 2,412 2,835 -690 -850 -1,141 -755 183 96 -28 -597 Balance at 31 December 29,007 28,271 21. Cash and cash equivalents (all amounts in Euro thousands) 2021 2020 59 70 79,823 206,368 79,882 206,438 Short-term bank deposits comprise primarily of current accounts and time deposits. The effective interest rates on these short-term bank deposits are based on floating rates and are negotiated on a case by case basis. Utilized Short-term bank deposits The balances of trade receivables and impairment are as follows: Cash at bank and in hand Reclassification from other receivables/payables Exchange differences Allowance for doubtful and other debtors analysis Charge for the year (note 29) Unused amounts reversed (note 29) To measure the expected credit losses for trade receivables per region, the Group excludes balances that are past due more than five years, as these balances do not fairly represent current market conditions. Consequently, the balances presented in the tables below are adjusted by the amount of €17.1 million on 31.12.2021 and €17.3 million on 31.1.2020 compared with the balances in the tables above. The individually impaired receivables mainly relate to wholesalers, which are in unexpectedly difficult economic situation. It was assessed that a portion of the receivables is expected to be recovered. 194 MANAGEMENT REPORT FINANCIAL REVIEW 22. Share capital and premium (all amounts are shown in Euro thousands unless otherwise stated) Share premium Number of shares €'000 €'000 Number of shares €'000 Shares issued and fully paid Balance at 1 January 2020 82,447,868 1,159,348 5,974 82,447,868 1,165,322 Balance at 31 December 2020 82,447,868 1,159,348 5,974 82,447,868 1,165,322 Cancellation of treasury shares -4,122,393 - - -4,122,393 - Balance at 31 December 2021 78,325,475 1,159,348 5,974 78,325,475 1,165,322 Number of shares €'000 Balance at 1 January 2020 4,804,140 117,139 Treasury shares purchased 786,278 8,816 Treasury shares sold -77,916 -1,835 Balance at 31 December 2020 5,512,502 124,120 Cancellation of treasury shares -4,122,393 -92,820 Treasury shares purchased 230,141 3,230 Treasury shares sold -123,101 -2,757 Balance at 31 December 2021 1,497,149 31,773 Ordinary shares Total Treasury shares The average ordinary shares stock price of Titan Cement International S.A. for the period 1.1.2021-31.12.2021 was €15.44 (1.1.2020-31.12.2020: €12.62). The closing stock price on 31 December 2021 was €13.26 (31.12.2020: €13.86). Following the decision of the Extraordinary General Meeting of Shareholders dated 13 May 2019 which authorized the Board of Directors to acquire and dispose Company’s own shares in accordance with the provisions of article 7:215 ff of the Belgian Companies and Associations Code, in October 2021, the Board decided to implement a share buy-back program of up to a maximum amount of €10 million for a duration of up to 6 months. The Company kept the market fully informed of the progress of the relevant transactions as provided by the applicable regulations. In implementation of this program, during the period from October 14, 2021 until December 31, 2021, the Company acquired directly 90,948 own shares and indirectly through its subsidiary Titan Cement Company S.A. 139,193 shares, representing 0.12% and 0.18% respectively of the share capital of the Company. The total value of these transactions amounted to €3,229,701. On 31.12.2021 the Company holds 412,173 own shares representing 0.53% of the Company’s share capital and Titan Cement Company S.A. (Titan SA), a direct subsidiary of the Company, holds 1,084,976 shares of the Company, representing 1.38% of the Company’s voting rights. Titan S.A., a direct subsidiary of the Company, sold in 2021 to Titan Group employees, in implementation of existing stock option plans, 123,101 shares of the Company, representing approximately 0.16% of the share capital of the Company, for a total amount of €1,231,010 (i.e.€10/Company share). 195 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) Legal reserve Non- Distributable reserve Distributable reserve Re- organization reserve (note 22) Contingency reserves Tax exempt reserves under special laws Revaluation reserve Actuarial differences reserve Hedging reserve from cash flow hedges Currency translation differences on derivative hedging position Foreign currency translation reserve Total other reserves Balance at 1 January 2020 101,034 84,994 200,654 -1,188,374 272,885 26,457 64,200 -2,064 - 41,115 -345,665 -744,764 Change in accounting policy (note 1) - - - - - - - 1,383 - - - 1,383 Restated balance at 1 January 2020 101,034 84,994 200,654 -1,188,374 272,885 26,457 64,200 -681 - 41,115 -345,665 -743,381 Other comprehensive income/(loss) - - - - - - 243 -30 -36 - -118,094 -117,917 Distribution of reserves (note 10) - - -15,414 - - - - - - - - -15,414 Deferred tax on treasury shares held by subsidiary - - - - - - 5,294 - - - - 5,294 Deferred tax adjustment due to change in income tax rates on revaluation reserves (note 18) - - - - - - 1,117 - - - - 1,117 Acquisition of non-controlling interest 229 - - - - 7 1,815 - - - -1,126 925 Transfer from retained earnings - - -1,027 - - -869 -5,524 - - - - -7,420 Transfer among reserves - 3,876 -3,876 - 1,317 - - - - - -13 1,304 Balance at 31 December 2020 101,263 88,870 180,337 -1,188,374 274,202 25,595 67,145 -711 -36 41,115 -464,898 -875,492 Restated Balance at 1 January 2021 101,263 88,870 180,337 -1,188,374 274,202 25,595 67,145 -711 -36 41,115 -464,898 -875,492 Other comprehensive income - - - - - - 493 863 1,645 - 18,701 21,702 Cancellation of treasury shares - -65,318 - - - - - - - - - -65,318 Distribution of reserves (note 10) - - -30,780 - - - - - - - - -30,780 Deferred tax on treasury shares held by subsidiary - - - - - - -9,610 - - - - -9,610 Deferred tax adjustment on revaluation reserves (note 18) - - - - - - -213 - - - - -213 Acquisition of non-controlling interest 32 - - - - - 301 - - - -319 14 Transfer (to)/from retained earnings 6,883 - -422 - -212,560 5,869 -9,051 - - - - -209,281 Transfer among reserves - 51 -51 - 6,456 -4,226 50 - - - - 2,280 Balance at 31 December 2021 108,178 23,603 149,084 -1,188,374 68,098 27,238 49,115 152 1,609 41,115 -446,516 -1,166,698 23. Other reserves 196 MANAGEMENT REPORT FINANCIAL REVIEW 23. Other reserves (continued) The "Actuarial Differences Reserve" records the re-measurement gains and losses (actuarial gains and losses) arising from the actuarial studies performed by the Group's subsidiaries for various benefit, pension or other retirement schemes (note 25). The "Foreign Currency Translation Reserve" is used to record exchange differences arising from the translation of the financial statements of foreign subsidiaries. Moreover, it includes the currency translation differences reserve on transactions designated as part of net investment in foreign operations. During the last quarter of 2016, the Group's subsidiary in Egypt, Alexandria Portland Cement Co. S.A.E. (APCC) renewed the € 76.9 million loan it entered into with its parent company in 2010. According to its accounting policy, the Group recognizes in its consolidated financial statements the aforementioned intergroup loan as part of the net investment in the Egyptian operation. On 31 December 2021, this reserve has a debit balance of €26.0 million (2020: €28.4 million). The "Currency Translation Differences on Derivative Hedging Position Reserve" illustrates the exchange differences arising from the translation into euro of loans in foreign currency, which have been designated as net investment hedges for certain Group subsidiaries abroad. It also illustrates the exchange differences arising from the valuation of financial instruments used as cash flow hedges for transactions in foreign currencies. Certain Group companies are obliged according to the applicable commercial law to retain a percentage of their annual net profits as legal reserve. This reserve cannot be distributed during the operational life of the Group companies. The "Contingency Reserves" include, among others, reserves formed by certain Group subsidiaries by applying developmental laws. These reserves have exhausted their tax liability or have been permanently exempted from taxation, so there is no additional tax charge for the Group and the Company from their distribution. The "Revaluation Reserves" include, among others, €48.2 million (2020: €51.5 million) as the fair value of tangible and intangible assets that the Group had in Egypt through its participation in the joint venture Lafarge-Titan Egyptian Investments Ltd, until it fully acquired the joint venture and €2.0 million (2020: €11.6 million) deferred tax on treasury shares held by Titan Cement Company S.A. The "Tax Exempt Reserves under Special Laws", according to the tax legislation, are exempt from income tax, provided that they are not distributed to the shareholders. The distribution of the remaining aforementioned reserves can be carried out after the approval of the shareholders at the Annual General Meeting and the payment of the applicable tax. Depending on whether they are capitalized or distributed, some of these reserves have different tax charge. The Group has no intention to distribute the remaining amount of these reserves and consequently, has not calculated the income tax that would arise from such distribution. The "Distributable reserve" of €200 million was introduced with the reduction of TCI share capital after the completion of the share exchange transaction. This reserve may be distributed in the future subject to the approval of the respective authoritative body. On 31 December 2021, the distributable reserves amounts to €149.1 million. Under the requirements of the Belgian Law, the "Non-Distributable reserve" represents a reserve equivalent to the value of the treasury shares held by Titan Cement International S.A. and its subsidiary Titan Cement Company S.A. 197 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 24. Share-based payments 2020 plan 2017 scheme 2014 scheme Balance at 1 January 2020 - 1,247,400 236,951 Granted 616,980 - - Exercised - -18,548 -59,693 Non vested - -128,265 - Cancelled -116,460 -41,172 -6,901 Balance at 31 December 2020 500,520 1,059,415 170,357 Granted 407,630 - - Exercised - -82,166 -40,935 Non vested - -244,211 - Cancelled -6,420 -17,445 -5,340 Balance at 31 December 2021 901,730 715,593 124,082 Exercise price 2021 2020 2021 2020 2021 2020 Expiration date 2021 -----6,594 2022 ----124,082 163,763 2023 249,115 250,260 62,447 108,531 - - 2024 450,865 250,260 90,252 380,950 - - 2025 201,750 - 562,894 569,934 - - 901,730 500,520 715,593 1,059,415 124,082 170,357 Share options and other share-based awards are granted to members of senior management. Movements in the number of share options and awards outstanding are as follows: Share options and awards outstanding at the end of the year have the following terms: 2014 scheme The Beneficiaries shall be entitled to exercise their stock option rights, either in whole or in part, within the first five working days of each month, paying the relevant amounts until the expiration date of their stock options, i.e. until December of the third year after these stock options have been vested. a) By 50% on the average three year Return on Average Capital Employed (ROACE) compared to the target of each year period, as this will be determined by the Board of Directors before granting the relevant option rights. b) By 50% on the overall performance of TITAN Cement Company S.A. common share compared to the average overall performance of the shares of predefined international cement producing companies. 2014 Programme The vesting period of the stock options that were granted in 2014, 2015 and 2016 was three years. Therefore, the relevant option rights became mature in December of 2016, 2017 and 2018 respectively, provided that the beneficiaries were still employees of the Group. After the completion of the three- year vesting period, the final option rights number, which the beneficiaries would be entitled to exercise, should be determined by the Board of Directors of TITAN Cement Company S.A. within the first four months of 2017, 2018 and 2019 respectively and depends: On 20 June 2014, the General Meeting of TITAN Cement Company S.A. approved the introduction of a new, three-year (2014-2016) Stock Option Programme. According to this Programme, the Board of Directors can grant option up to 1,000,000 ordinary shares at a sale price €10.00 per share. Beneficiaries of the Stock Option Plan were the executive members of the Board of Directors of TITAN Cement Company S.A., the managers and the employees with the same rank in affiliated companies inside and outside Greece, as well as a limited number of additional employees who stand out on a continuous basis for their good performance and have a high potential for advancement. € 10 2020 plan € 0 2017 scheme € 10 The fair value of the options granted in 2015 was €4.14 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €19.55, the employee forfeiture rate 9.2%, the volatility of the share price estimated at 40.61%, the dividend yield of 0.59% and the yield of the 1 year EURIBOR rate of 0.166%. The options granted under the 2014 Programme have been accounted for in terms of the requirements of IFRS 2 “Share based payments”. The number of Share Options that were granted was: 250,190 during 2014, 313,080 during 2015 and 303,150 during 2016. The fair value of the options granted in 2014 was €7.39 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €25.32, the employee forfeiture rate 9.2%, the volatility of the share price estimated at 47.2%, the dividend yield of 0.376% and the yield of the 3 year EU Benchmark (Deutsche Bund) Government bond yield rate of 0.083%. The fair value of the options granted in 2016 was €5.17 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €20.38, the employee forfeiture rate 9.2%, the volatility of the share price estimated at 42.80%, the dividend yield of 0.87% and the yield of the 1 year EURIBOR rate of -0.15%. 198 MANAGEMENT REPORT FINANCIAL REVIEW 24. Share-based payments (continued) 2014 Programme (continued) 2017 Programme The number of Share Options that were granted during 2017 was 263,680. The fair value of the options granted in 2017 was €6.6 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €25.8, the employee forfeiture rate 4.5%, the volatility of the share price estimated at 42.82%, the dividend yield of 0.9% and the yield of the 1 year EURIBOR rate of -0.127%. On 1 June 2018, 402,370 share options were granted to Group executives under the three-year Stock Option Programme of 2017. The exercise price of the options is €10.0. The fair value of the options granted in 2018 was €5.99 per option, determined using the Binomial Method and the Monte Carlo Simulation valuation model. The significant inputs used in the aforementioned methodologies were the share price at grant date of €21.00, the employee forfeiture rate 2.5%, the volatility of the share price estimated at 42.71%, the dividend yield of 0.86% and the yield of the 1 year EURIBOR rate of -0.184%. On June 7 2019, 601,710 share options were granted to Group Executives under the three- years Stock Option Programme of 2017. The exercise price is €10.00. The fair value of the options granted was €4.13 per option, determined using the Binomial Method and the Monte Carlo Simulation model. The significant inputs used were the share price at the grant date of € 17.72, the employee forfeiture rate 2.7%, the volatility of the share price estimated at 40.49%, the dividend yield of 0.92% and the yield of the 1 year EURIBOR rate of -0.175%. On 31 December 2021, the number of the cancelled share options that were granted during 2017, 2018 and 2019 was 8,336, 21,420 and 38,816 respectively. Out of the options that were granted in 2017, the share options that were not vested amounted to 128,265 and out of the options that were granted in 2018, the share options that were not vested amounted to 244,211. Out of the share options that were granted during 2017, 10,193 vested and cancelled and 54,439 share options were exercised by 45 Group executives, while 62,447 remain unexercised and they can be exercised until the end of 2023. Out of the share options that were granted during 2018, 46,275 share options were exercised by 37 Group executives while 90,252 remain unexercised and they can be exercised until the end of 2024. Out of the share options that were granted during 2019, 562,894 remain unexercised and they can be exercised or cancelled until the end of 2025. The Extraordinary General Meeting of Shareholders of the new Parent Company Titan Cement International S.A. approved on May 13, 2019, subject to Completion of the share exchange Tender Offer between Titan Cement International SA and TITAN Cement Company S.A., the amendment of the existing stock option plans, namely to replace the stock options on Titan Cement Company S.A. shares by stock options on shares of Titan Cement International, without otherwise amending the terms and conditions of the plans. Titan Cement Company still has the obligation to settle the share- based payment transaction. The Beneficiaries shall be entitled to exercise their stock option rights, either in whole or in part, within the first five working days of each month, paying the relevant amounts until the expiration date of their stock options, i.e. until December of the third year after these stock options have been vested. The options granted under the 2017 Programme have been accounted for in terms of the requirements of IFRS 2 “Share based payments”. As a result, two plans (2014 and 2017) are currently under implementation by stock options on shares of Titan Cement International owned by its subsidiary Titan Cement Company S.A. During 2021, the Beneficiaries were provided with shares of Titan Cement International owned by its subsidiary Titan Cement Company. The sale price of common treasury share (over-the-counter transaction) equaled to €10.00 per share. The total share price amounted to €1,231 thousand. The loss caused by this transaction amounted to €1,526 thousand, recognised in equity. a) by 50% on the average three year Return on Average Capital Employed (ROACE) of the Group against the target for each three-year period and b) by 50% on the overall performance of TITAN stock compared to the average performance of the shares of the predefined international cement producing companies. On 31 December 2021, the number of the cancelled share options that were granted during 2014, 2015 and 2016 was 4,300, 12,060 and 14,370 respectively. Out of the options that were granted in 2014, the share options that were not vested amounted to 125,378. Out of the options that were granted in 2015, the share options that were not vested amounted to 161,305 and out of the options that were granted in 2016 the share options that were not vested amounted to 53,968. Out of the share options that were granted during 2014, 31,625 vested and cancelled. The remaining 88,887 share options were exercised by 83 Group executives. Out of the share options that were granted during 2015, 38,327 vested and cancelled while 11,086 remain unexercised and they can be exercised exceptionally until the end of 2022. The remaining 90,302 share options were exercised by 69 Group executives. Out of the share options that were granted during 2016, 11,849 vested and cancelled while 112,996 remain unexercised. The remaining 109,967 share options were exercised by 51 Group executives. On 12 May 2017, the General Meeting of TITAN Cement Company S.A. approved the introduction of the current three-year Stock Option Programme. According to this Programme, the Board of Directors can grant option up to 1,000,000 ordinary shares of the Company at a sale price equal to €10.00 per share. Beneficiaries of the Stock Option Plan are the executive members of the Board of Directors, the managers and the senior employees of the Company and its affiliated companies inside and outside Greece. The vesting period of the stock options that were granted in 2017, 2018 and 2019 shall be three years. Therefore, the relevant option rights shall become mature in December of 2019, 2020 and 2021 respectively, provided that the beneficiaries are still employees of the Group. After the completion of the three-year vesting period, the final option rights number that the beneficiaries will be entitled to exercise will be determined within the first four months of 2020, 2021 and 2022 respectively and depend: 199 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 24. Share-based payments (continued) 2020 Plan 25. Retirement and termination benefit obligations Non-qualified deferred compensation plan This plan is intended to constitute an unfunded plan of deferred compensation for a selected group of highly compensated employees under the Employee Income Security Act of 1974 ("ERISA"). For this purpose the Group's U.S. subsidiary created an irrevocable trust to facilitate the payment of deferred compensation to participants under this plan. Under this plan the participants are eligible to defer from 0% to 20% of eligible compensation for the applicable plan year. On 31 December 2021 and 2020, plan assets totaled €3,307 thousand and €2,572 thousand, respectively, and are classified as other non current assets in the accompanying consolidated statement of financial position (note 3, 17). There were no costs for the plan for the year ended 31 December 2021 or 2020. - future salary increases of 1.7% (2020: 1.7%) , - average turnover rate of employees with permanent contract up to age 50 is 1 % for voluntary resignation and 2 % for dismissal and for employees above the age 51 is 0 % for voluntary resignation and 1 % for dismissal. On May 24, 2021, the IFRS Interpretations Committee (IFRIC) published its Agenda Decision, Attributing Benefit to Periods of Service (IAS 19 Employee Benefits) and concluded that an entity’s obligation increases until the date when future service by the employee will lead to no material amounts of further benefits (note 1). In accordance with the aforementioned decision, the application of the basic principles of IAS 19 in Greece has been changed and the calculations have been adjusted to recognize retirement obligations for the last 16 years of service until retirement. Until the issuance of the IFRIC Decision, entities applied IAS 19 distributing the benefits defined by the respective law 2112/1920, and its amendment 4093/2012. USA The Group's U.S. subsidiaries operate defined benefit plans and other post-retirement benefit plans. The method of accounting for the latter, as well as the valuation assumptions and the frequency of valuations are similar to those used for defined benefit plans. All of the Group's U.S. subsidiaries' defined benefit pension plans and all but one of its other post-retirement plans have been frozen as to new participants and credited service. One post-retirement benefit plan exists (for certain active and former employees) whereby eligible retirees receive benefits consisting primarily of assistance with medical insurance costs between the dates of early retirement and Medicare eligibility. On 31 December 2021 the plan assets of the Group's subsidiaries in the US have invested approximately 56% (2020: 60%) in equity instruments quoted in US and international stock markets and 44% (2020: 40%) in fixed investments (US and international bonds). The discount rate that has been adopted for the study of the pension plans of the Group's subsidiaries in the U.S. was 2.56% (2020: 2.30%). The Group grants retirement indemnities which exceed the legal requirements. These retirement indemnities are unfunded and the liabilities arising from such obligations are actuarially valued by an independent firm of actuaries. The last actuarial valuation was undertaken in December 2021. The principal actuarial assumptions used were as follows: - discount rate of 0.5% as of 31/12/2019 with time weighted average duration 8.17 years according to the market conditions as of 31/12/2019, discount rate of 0.1% as of 31/12/2020 with time weighted average duration 8.19 years according to the market conditions as of 31/12/2020, and discount rate of 0.6% as of 31/12/2021 with time weighted average duration 8.19 years according to the market conditions as of 31/12/2021, Greece The awards vest at the designated dates, provided that the participants are still working in TCI or in any other employer company of the Group, or are still serving as an executive Director in the Board of Directors of TCI. Upon vesting, participants may select to receive their vested awards in TCI shares, or in contributions to a fund, or in cash. In any case, the fair value of the cash alternative is the same as the share alternative. Thus, the Group accounts for the plan as a cash-settled transaction by recognising a liability for the fair value of the services it receives from the participants. The vesting period of the awards is as follows: a) 50% at the completion of a three-year period and b) 50% at the completion of a four-year period On 13 May 2019, the Extraordinary General Meeting of TCI approved a new long-term incentive plan. One year after, on 14 May 2020, the Annual General Meeting of TCI included it in the Remuneration Policy. Participants of the plan are the executive members of the Board of Directors of TCI, the executives of TCI, as well as executives, in other companies of Titan Cement Group. The awards may also be granted selectively to a limited number of employees who stand out on a continuous basis for their outstanding performance and high potential for development. Under the plan, participants are granted awards for nil consideration in the form of a conditional grant of TCI shadow shares in April (or later) of each year. The awards have no dividend or voting rights. The number of the shadow shares granted to each participant is determined by the award amount and the value of the shadow share. The value of the shadow share is equal to the average TCI share closing price on Euronext Brussels during the last seven trading days of March of the grant year. During 2020, the number of the awards granted was 616,980, but 116,460 of them were cancelled. The fair value of the awards was calculated based on the closing price of the TCI share, €13.86 in Brussels, adjusted for future dividend payments and the forfeiture rate. The calculation of the unforfeited awards resulted in the recognition of an expense of €1.4 million against a liability, which had a carrying amount of €1.4 million at the end of 2020. During 2021, another 407,630 awards were granted and 4,130 of them were cancelled. Moreover, an additional number of 2,290 awards that are related to the 2020 granted awards were cancelled. The fair value of the awards was calculated based on the closing price of the TCI share, €13.26 in Brussels, adjusted for future dividend payments and the forfeiture rate. The calculation of the unforfeited awards resulted in the recognition of an expense of €2.8 million against a liability, which had a carrying amount of €4.2 million at year end. 200 MANAGEMENT REPORT FINANCIAL REVIEW 25. Retirement and termination benefit obligations (continued) (all amounts in Euro thousands) 2021 2020 restated Current service cost 1,805 1,650 Interest cost 441 528 Provision of past service cost for the following year due to the voluntary resignation plans 102 125 Interest income -255 -342 2,093 1,961 Additional post retirement and termination benefits paid out, not provided for 1,138 933 Post retirement and termination benefits paid out, not provided for due to the voluntary resignation plans 153 406 3,384 3,300 Amounts recognized in profit before interest, taxes, depreciation, amortization and impairment 3,198 3,114 Amounts recognized in finance cost (note 6) 186 186 Amounts recognized in the income statement 3,384 3,300 Actuarial losses recognized in οther comprehensive income -1,240 -30 Amount charged to statement of total comprehensive income 2,144 3,270 Present value of the liability at the end of the period 37,231 35,739 Minus fair value of US plans assets -15,168 -12,915 22,063 22,824 (all amounts in Euro thousands) 2021 2020 restated Opening balance 22,824 35,268 Change in accounting policy - -10,356 Total expense 3,384 3,300 Re-measurement losses recognized immediately in οther comprehensive income -1,240 -30 Exchange differences 261 -554 Benefits paid during the year -3,166 -4,804 Ending balance 22,063 22,824 (all amounts in Euro thousands) 2021 2020 Fair value of plan assets at the beginning of the period 12,915 14,634 Expected return 1,209 1,333 Company contributions 501 117 Administrative expenses -168 -178 Benefits paid -363 -1,758 Exchange difference 1,074 -1,233 Fair value of plan assets at the end of the period 15,168 12,915 The amounts relating to defined benefit pension plans and other post retirement and termination benefits (defined benefit plans) recognized in the statement of comprehensive income in the account other expenses are as follows: Change in the present value of the defined benefit obligation Changes in the fair value of US plan assets: 201 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 25. Retirement and termination benefit obligations (continued) (all amounts in Euro thousands) Assumptions 1.0% increase 1.0% decrease 1.0% increase 1.0% decrease Impact on the net defined benefit obligation: Discount rate -1,691 1,930 -1,970 2,299 Salary 555 -518 603 -558 Health care costs 89 -78 91 -79 Impact on the current service costs: Discount rate -80 90 -81 91 Salary 110 -99 109 -98 Healthcare costs 2 -2 3 -2 2021 2020 restated Not later than 1 year 4,451 4,118 Later than 1 year and not later than 5 years 8,865 8,075 Later than 5 years and not later than 10 years 8,671 8,883 Beyond 10 years 17,821 16,418 Total expected payments 39,808 37,494 2021 2020 restated Due to experience 157 -439 Due to assumptions (financial) -541 1,634 Due to assumptions (demographic) 98 -204 Re-measurement losses on DBO -286 991 Re-measurement gains on plan assets -954 -1,021 Re-measurement losses for the period -1,240 -30 Year ended 31 December 2020 A quantitative sensitivity analysis for significant assumptions is shown below: Year ended 31 December 2021 The components of actuarial losses that re-calculated and recognized immediately in the other comprehensive income for the years ended December 31, 2021 and 2020 are as follows: The sensitivity analyses above have been determined based on a method that extrapolates the impact on net defined benefit obligation as a result of reasonable changes in key assumptions occurring at the end of the reporting period. The following payments are expected payments to be made in the future years out of the undiscounted defined benefit plan obligation: restated 202 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 1 January 2021 Reclassifi- cations Additions for the year Unused amounts reversed Unwinding of discount Utilized Exchange differences 31 December 2021 Provisions for restorations a 29,689 -1,541 2,305 -1,524 501 -480 1,438 30,388 Insurance reserves b 15,106 - 2,448 -1,342 - - 1,079 17,291 Provisions for other taxes c 3,391 - 2,041 -178 - -258 288 5,284 Litigation provisions d 416 - 1,858 -324 - -80 12 1,882 Other provisions e 13,638 - 6,340 -3,277 - -3,682 448 13,467 62,240 -1,541 14,992 -6,645 501 -4,500 3,265 68,312 (all amounts in Euro thousands) 1 January 2020 Reclassifi- cations Additions for the year Unused amounts reversed Unwinding of discount Utilized Exchange differences 31 December 2020 Provisions for restorations a 21,717 - 9,541 -426 612 -733 -1,022 29,689 Insurance reserves b 13,379 - 2,881 - - - -1,154 15,106 Provisions for other taxes c 3,596 - 655 -293 - -372 -195 3,391 Litigation provisions d 843 - 5 -198 - -221 -13 416 Other provisions e 13,615 - 8,316 -3,608 118 -4,309 -494 13,638 53,150 - 21,398 -4,525 730 -5,635 -2,878 62,240 (all amounts in Euro thousands) 2021 2020 Non-current provisions 56,001 49,550 Current provisions 12,311 12,690 6 68,312 62,240 c. The provision of other taxes represents future obligations for taxes such as stamp duties, sales tax, employee payroll tax etc. It is expected that this amount will be fully utilized in the next five years. e. The other provisions are comprised of amounts relating to risks none of which are individually material to the Group. It is expected that the remaining amounts will be used over the next 1 to 20 years. a. The provisions for restorations are the present value of the estimated costs to reclaim quarry sites and other similar post-closure obligations. In 2020, the Group's subsidiary in USA, Titan America LLC (TALLC), changed its estimation and increased the provisions of restorations by the amount of €6.8 million due to increased fixed asset removal obligation associated with the long-term industrial use of one of its cement plant sites. It is expected that the amount of restoration provisions will be used over the next 1 to 50 years. d. The litigation provisions have been established with respect to claims made against certain companies in the Group by third parties, mainly against the subsidiaries in Egypt. These claims concern labor compensations, labor cases for previous years' benefits and dues and claims for shares revaluation. It is expected that this amount will be utilized mainly in the next twelve months. 26. Provisions b. The insurance reserves represent the expected costs of claims payments related to risk and workers’ compensation claims, in addition to sponsored health insurance costs. Previously, they were reported as other liabilities. 203 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) 2021 2020 Government grants 3,488 3,693 Liability of long-term incentive plan 4,223 1,394 Other non-current liabilities 5,138 4,777 12,849 9,864 Analysis of Government grants: Non - current 3,488 3,693 Current (note 28) 69 69 3,557 3,762 Opening balance 3,762 3,968 Amortization (note 29) -205 -206 Ending balance 3,557 3,762 (all amounts in Euro thousands) 2021 2020 Deferred Income 1,692 1,991 Non-current contract liabilities 1,692 1,991 (all amounts in Euro thousands) 2021 2020 Trade payables 238,746 175,360 Other payables 14,393 16,281 Consideration for acquisition of non-controlling interest - 41,453 Accrued expenses 31,832 26,264 Social security 2,965 3,430 Dividends payable 305 364 Government grants (note 27) 69 69 Other taxes 14,301 15,149 Trade and other payables 302,611 278,370 (all amounts in Euro thousands) 2021 2020 Customer down payments/advances 8,681 6,445 Deferred Income 1,317 1,770 Current contract liabilities 9,998 8,215 27. Other non-current liabilities and non-current contract liabilities Government grants relating to capital expenditures are reflected as long-term liabilities and are amortized on a straight line basis, based on the estimated useful life of the asset for which the grant was received. The amount of €5,817 thousand, which was included in the contract liability balance at the beginning of 2021, is recognised in revenue. Government grants received in respect of expenses are reflected in the income statement when the related expense is incurred, so that the expense is matched to the income received. 28. Trade payables, other liabilities and current contract liabilities Other payables include liabilities relating to transportation of cement and raw materials, as well as employee benefit payables. Trade payables are non-interest bearing and are normally settled in 10-180 days. Other payables are non-interest bearing and have an average term of one month. 204 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 2021 2020 restated Profit after taxes 91,555 1,160 Adjustments for: Taxes (note 8) 16,811 35,777 Depreciation (note 11) 130,481 133,581 Amortization of intangibles (note 14) 6,205 5,200 Amortization of government grants received (note 27) -205 -206 Impairment of assets (note 11,13) - 47,606 Net profit on disposals of tangible and intangible assets (note 4) -5,747 -1,094 Provision for impairment of debtors charged to income statement (note 20) 1,722 1,985 Cost of inventory obsolescence (note 19) -2,167 8,213 Provision for restoration (note 26a) 1,282 1,937 Provision for litigation (note 26d) 1,534 -193 Other provisions (note 26e) 4,169 4,826 Provision for retirement and termination benefit obligations (note 25) 2,093 1,961 (Increase)/decrease of investment property (note 12) -333 94 Dividend income (note 4.ii) - -100 Finance income (note 6) -1,176 -636 Interest expense and related expenses (note 6) 37,148 49,033 Losses/(gains) on financial instruments (note 6) 22,379 -29,994 (Gains)/losses from foreign exchange differences (note 6) -25,385 46,458 Gains on derivatives -3,220 - Share stock options (note 7) 886 1,720 Share in gain of associates and joint ventures (note 15) -3,291 -3,200 Changes in working capital: (Increase)/decrease in inventories -44,848 13,472 Increase in trade and other receivables -52,643 -11,821 (Increase)/decrease in operating long-term receivables and payables -258 136 Increase in trade payables 53,771 3,687 Cash generated from operations 230,763 309,602 Net book amount 2,947 2,016 Net gains on disposals (note 4) 5,747 1,094 Net proceeds from disposals 8,694 3,110 Cash generated from operations 230,763 309,602 Minus payments for intangible assets, property, plant and equipment -126,044 -84,296 Operating free cash flow 104,719 225,306 (all amounts in Euro thousands) 2021 2020 Bank guarantee letters 17,142 16,606 17,142 16,606 29. Cash generated from operations Operating free cash flow calculation: 30. Contingencies and commitments Contingent liabilities In the cash flow statement, proceeds from the disposals of tangible and intangible assets, and investment property are as follows: 205 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 30. Contingencies and Commitments (continued) 4. In May 2013, a new action was filed by three ex-employees of APCC seeking, as in the above case, the nullification of the sale of APCC to Blue Circle Cement Group. The case has been repeatedly adjourned and, as in the above cases, no judgment will be handed down from the competent Administrative Court until the Supreme Constitutional Court of Egypt decides on the constitutionality of Law no. 32/ 2014. The view of APCC’s lawyers is that the action is devoid of any legal and factual ground. 3. In 2012, an ex-employee of Alexandria Portland Cement Company SAE (APCC) brought an action before the Administrative Court of Alexandria against the President of the Republic of Egypt, the Prime Minister, the Minister of Investments, the Minister of Industry, the Governor of Alexandria, the Manager of the Mines and Salinas Project in Alexandria and the Manager of the Mines and Quarries Department in Alexandria (but not against APCC), seeking the nullification of the privatization of APCC through its sale in 1999 to Blue Circle Cement Group, before APCC was subsequently acquired by Titan Group. The claim was suspended by the Administrative Court of Alexandria initially until 28 May 2016 and subsequently until 15 October 2016, provided that by such date the Supreme Constitutional Court of Egypt would have ruled on the constitutionality of the above Law no. 32/2014. The case was subsequently referred to the Administrative Court of Cairo, Investment Circuit no.1 but no hearing has been scheduled until now. The view of APCC’s lawyers is that the action is devoid of any legal and factual ground. 2. In June 2013 another action was filed before the Administrative Court of Cairo, seeking, as in the above case, the nullification of BSCC’s privatization. The Administrative Court of Cairo issued on 25 June 2015 a first instance ruling referring the case to the Investment Circuit no. 7, which subsequently referred the case to the commissioners’ panel where no hearing date has been scheduled until now. The view of BSCC’s lawyers is that the action is devoid of any legal or factual ground. 1. In 2011, two former employees of Beni Suef Cement Company SAE (BSCC) filed an action before the Cairo Administrative Court, seeking the nullification of the privatization of BSCC that took place in 1999, when BSCC was sold to Financière Lafarge after a public auction, before being subsequently acquired by Titan Group. The Administrative Court of Cairo rejected in 2014 the plaintiffs’ claim in connection with BSCC’s privatization, however ruled that BSCC was under the obligation to re-instate all employees, the employment of whom had been terminated, including employees who had left BSCC in the framework of voluntary staff reduction programs. Both the plaintiffs and BSCC have appealed the ruling issued by the first instance Court before the Supreme Administrative Court, which on 19 January 2015 suspended the case until the Supreme Constitutional Court of Egypt issues a final ruling on the constitutionality of Law no. 32/2014. The case is still suspended and no further action has been taken until now. The view of BSCC’s lawyers is that the plaintiffs’ action is devoid of any legal or factual ground. Litigation matters A. Privatization cases The parties concluded the SPA in the context of PAK’s privatization process, through which SharrB acquired a cement plant in Kosovo (Sharr Cement Plant) by acquiring the local operating company, Ndërmarrja e Re SharrCem SH.P.K. (SharrCem). On March 7, 2022, the arbitral tribunal issued its award in favor of SharrB confirming that SharrB has discharged its investment obligation under the SPA. 5. Sharr Beteiligungs GmbH (SharrB), a Titan Group entity based in Germany, filed οn February 17, 2020, a claim in arbitration, seeking the arbitral tribunal’s confirmation that it has satisfied its commitment to implement investments estimated at €35 million within five years, pursuant to Section 5.01(a) of the Share Purchase Agreement entered into between the Privatization Agency of Kosovo (PAK) and SharrB on 9 December 2010 (SPA). BSCC recorded an increase of intangible assets amounted to EGP 251 million, in order to recognize the license claimed by IDA. In 2019, recognised additionally as capital expenditure the amount of EGP 166.6 million, that represented interest asked by IDA. The total amount recognised in intangible assets as license for the construction of a second production line at the company’s plant is EGP 417.6 million and the total amount of interest expenses , that it was charged in 2018 income statement, amounted to EGP 98.7 million. 1. In 2007, BSCC obtained the license for the construction of a second production line at the company’s plant in Beni Suef through a bidding process run by the Egyptian Trading and Industrial Authority (IDA) for a license fee of EGP 134.5 million. IDA subsequently unilaterally raised the license fee to EGP 251 million. In October 2008 BSCC filed a case before the Administrative Court challenging the price increase and requesting the license price to be set at EGP 500, or, alternatively, that the price be set at EGP 134.5 million, as had been originally determined through the bidding process. The Administrative Court dismissed BSCC’s action and BSCC filed an appeal before the High Administrative Court in June 2018. Until today, no appeal hearing has been scheduled. BSCC has also lodged an action against IDA requesting the calculation of the payable interest, which is accruing on the EGP 251 million fee that IDA is claiming, on the basis of the legal interest of 4% per annum and not on the basis of the CBE interest (varying from 9% to 19%) as calculated by IDA. In June 2018, BSCC and IDA entered into an agreement, pursuant to which BSCC paid to IDA the amount of EGP 251 million for the value of the license plus the amount of EGP 24.9 million as down payment for interest, calculated on the basis of the CBE interest. Moreover, BSCC has already fully paid in 2018 and 2019 the remaining amount of interest amounting to EGP 240.3 million, under the express agreement that, in case the Egyptian Courts accept the appeal of BSCC on the value of the license and/or the action of BSCC on the calculation of the payable interest, IDA will pay back to BSCC the relevant amounts. The view of BSCC’s lawyers is that there is high probability that the High Administrative Court will adopt the price of EGP 134.5 million for the license. Likewise, the view of BSCC’s lawyers is that there is very high probability that BSCC’s action on the calculation of the payable interest will be accepted by the Court. B. Other cases 206 MANAGEMENT REPORT FINANCIAL REVIEW Contingent tax liability Contingent assets (all amounts in Euro thousands) 2021 2020 Bank guarantee letters for securing trade receivables (note 20) 22,350 23,493 Other collaterals against trade receivables (note 20) 7,099 7,227 29,449 30,720 Collaterals against other receivable s 4,442 920 33,891 31,640 Commitments (all amounts in Euro thousands) 2021 2020 Property, plant and equipment 713 1,425 (all amounts in Euro thousands) 2021 2020 1,026 651 Directors 2021 2020 Executive members on the Board of Directors 65 Non-executive members on the Board of Directors 9 9 Key management compensation 2021 2020 Short-term employee benefits 5,864 5,690 Share-based payments 929 952 Post-employment benefits 264 246 7,057 6,888 The Group may enter into various transactions with related parties. During 2021 and 2020, the Group did not record material transactions with related parties. 31. Related party transactions In conjunction with the aforementioned take-or-pay natural gas agreement, TALLC also entered into capacity supply agreements with a natural gas marketer, one in 2020 and another in 2021. On 31.12.2021, there are 2,432,000 MMBtus of committed capacity remaining through October 2022. Pricing under the capacity contract is based on the front-month NYMEX natural gas price settlements, plus a fixed basis component. In addition to the aforementioned purchase commitments, the Group's subsidiary in USA, Titan America LLC (TALLC), has entered into various contracts to purchase raw materials and manufacturing supplies. Specifically, TALLC entered into a multi-year agreement to purchase construction aggregates in Florida at prevailing market prices. Moreover, TALLC has entered into a take-or-pay natural gas agreement with a local utility that requires TALLC to pay the utility $11,6 million over a maximum period of 6 years beginning November 1, 2020. This agreement requires minimum cumulative payments equal to $1,935 thousand per contract year until the full contract has been met. As of November 2021, TALLC had met the minimum cumulative payment requirement. On 31.12.2021, TALLC had paid €2,141 thousand (31.12.2020: €280 thousand) cumulatively under the agreement. 30. Contingencies and Commitments (continued) Capital commitments Purchase commitments Energy supply contracts (Gas, electricity, etc.) Capital commitments contracted for at the balance sheet date but not recognized in the financial statements are as follows: The financial years, referred to in note 37, have not been audited by the tax authorities and therefore the tax obligations of the Company and its subsidiaries for those years have not yet been finalized. 207 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) 2021 2020 Current Bank borrowings 30,997 2,968 Bank borrowings in non euro currency 52,517 33,789 Debentures - 163,133 Interest payable 5,728 5,766 89,242 205,656 Non-current Bank borrowings 30,863 - Bank borrowings in non euro currency 14,241 32,911 Debentures 596,357 595,261 641,461 628,172 Total borrowings 730,703 833,828 2021 2020 Between 1 and 2 years 4,517 22,058 Between 2 and 3 years 357,455 2,639 Between 3 and 4 years 1,774 354,592 Between 4 and 5 years 27,967 - Over 5 years 249,748 248,883 641,461 628,172 2021 2020 Borrowings (€) 2.59% 2.38% Borrowings (USD) 2.88% 2.86% Borrowings (LEK) 3.31% 3.38% Borrowings (EGP) 10.75% 12.51% Borrowings (TRY) 20.38% 14.32% (all amounts in Euro thousands) 2021 2020 Floating rate: - Expiring within one year 167,314 297,859 - Expiring beyond one year 188,876 237,730 The weighted average effective interest rates that affect the Income Statement are as follows: The Group has the following undrawn borrowing facilities: During 2021, local borrowing facilities in Greece, Western Europe and Eastern Mediterranean region were paid and cancelled. 32. Borrowings Finally, in November 2021, TGF amended the Syndicate Revolving Facility Agreement of €200 million maturing in January 2022, by extending the maturity to January 2026 as well as by increasing the available commitment to €208 million. Maturity of non-current borrowings: In June 2021, Titan Global Finance PLC's (TGF) previously held Guaranteed Notes of €163.5 million 3.50% expired and were fully repaid accordingly. In October 2021, TGF obtained a loan of €30 million by an International bank for a six month period, guaranteed by Titan Cement International SA. 208 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 2021 2020 Land 11,771 12,035 Buildings 19,420 18,216 Plant & equipment 17,268 11,073 Motor vehicle 6,356 10,687 Office furniture, fixtures and equipment 322 54,818 52,033 (all amounts in Euro thousands) 2021 2020 Long-term lease liabilities 46,004 38,821 Short-term lease liabilities 16,378 18,194 62,382 57,015 (all amounts in Euro thousands) 2021 2020 Depreciation charge of ROU assets (note 11) 13,964 14,874 Interest expense (included in finance cost) 2,528 2,811 Expense relating to short-term leases 1,247 1,379 Expense relating to low-value leases that are not shown as short-term leases 285 399 Expenses relating to variable lease payments not included in lease liabilities 887 994 (all amounts in Euro thousands) 2021 2020 Within 10 years 4,884 9,320 From 10 to 20 years 19,921 17,278 In more than 20 years 9,528 9,639 34,333 36,237 33. Leases On 31.12.2021, the undiscounted potential future cash flows of €34,333 thousand (31.12.2020: €36,237 thousand) were not included in the lease liability, as it is not reasonably certain that the leases will be extended. The timing of these payments would be as follows: Discount rate The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which is generally the case for the leases in the Group, the lessee's incremental borrowing rate (IBR) is used, being the rate that the individual lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right of use asset in a similar economic environment with similar terms and conditions. In order to determine IBR, the Group usually uses third party financing that it is received by the individual lessee and makes adjustments to reflect changes in financing conditions, since third party financing was received. Also, it makes judgements specific to the lease, such as term, country, currency and security. The following amounts that related to leases are recognised in the consolidated income statement: The total cash outflow for the leases in 2021 was €21,256 thousand (2020: €21,550 thousand). Extension and termination options The maturity analysis of lease liabilities is disclosed in note 35. Group as a lessee The Group has various lease contracts for offices, terminals, machinery, vehicles, computer hardware and other equipment. Rental contracts are typically made for fixed periods of 1 to 30 years, but may have extension or termination options. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions. There are leases with fixed increases and others where the increase is based on changes in price indices. The consolidated statement of financial position includes the following balances related to lease contracts: Balances of right-of-use assets (note 11) Balances of lease liabilities In determining the lease term, management considers all facts and circumstances that create an economic incentive to exercise extension options and the extension options are only included in the lease term if the lease is reasonably certain to be extended. Extension option which are reasonably certain to be exercised mainly concern assets which are of strategic importance for the operations of the Group and are not easily replaceable, without incurring significant relocation costs and disruption of the business such as terminals, ready-mix sites and heavy equipment. The assessment of reasonably certainty is only revised if a significant event or a significant change in circumstances occurs, which affects this assessment, and is within the control of the lessee. 209 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP (all amounts in Euro thousands) Long-term borrowings Short-term borrowings Lease liabilities Derivatives* and interim settlements Total Year ended 31 December 2020 Opening balance 776,694 90,140 63,156 -3,143 926,847 Cash flows 140,938 -216,389 -15,967 30,021 -61,397 Acquisition of leases - - 13,979 - 13,979 Changes in fair value - - - -29,994 -29,994 Transfer among financial liabilities -286,421 286,421 - - - Charged in the finance expenses 1,809 48,487 - - 50,296 Cash flow hedge - - - 48 48 Currency translation differences on transactions designated as part of net investment in foreign operation 1,200 3,858 - - 5,058 Exchange differences -6,048 -6,861 -4,153 534 -16,528 Ending balance 628,172 205,656 57,015 -2,534 888,309 Year ended 31 December 2021 Opening balance 628,172 205,656 57,015 -2,534 888,309 Cash flows from financing activities 12,653 -152,177 -16,309 -19,441 -175,274 Acquisition of leases - - 17,973 - 17,973 Changes in fair value - - - 22,379 22,379 Transfer among financial liabilities -322 322 - - - Charged in the finance expenses 1,758 35,841 - - 37,599 Cash flow hedge - - - -1,370 -1,370 Currency translation differences on transactions designated as part of net investment in foreign operation -4,557 -1,150 - - -5,707 Exchange differences 3,757 750 3,703 -23 8,187 Ending balance 641,461 89,242 62,382 -989 792,096 * Derivatives of financing activities 34. Changes in liabilities arising from financing activities 210 MANAGEMENT REPORT FINANCIAL REVIEW 35. Financial risk management objectives and policies (all amounts in Euro thousands) 31/12/2021 31/12/2020 Non-current assets Interest rate swap - cash flow hedges 2,488 - Cross currency swaps - trading derivatives - 2,291 2,488 2,291 Current assets Forward freight agreements - trading derivatives 1,715 - Forwards - trading derivatives - 16,462 1,715 16,462 Non-current liabilities Cross currency swaps - trading derivatives 6,185 - 6,185 - Current liabilities Natural gas forwards - cash flow hedges 1,084 47 Energy swap - trading derivatives 27 - Forwards - trading derivatives 3,290 1,224 Cross currency swaps - trading derivatives 4,341 3,842 8,742 5,113 (all amounts in Euro thousands) Fair value of derivatives Interim settlement of derivatives Net balance Balance at 31 December 2021 Forwards - expired in 2022 -3,290 3,754 464 Energy swap - expired in 2022 -27 - -27 Natural gas forwards - expired in 2022 -1,084 - -1,084 Forward freight agreements - expired in 2022 1,715 794 2,509 Interest rate swap - expired in 2023 2,488 -1,070 1,418 Cross currency swaps - expired in 2024 -10,526 10,716 190 -10,724 14,194 3,470 Balance at 31 December 2020 Forwards - expired in 2021 15,238 -11,977 3,261 Natural gas forwards - expired in 2021 -47 - -47 Cross currency swaps - expired in 2024 -1,551 871 -680 13,640 -11,106 2,534 Financial Risk Factors The next table shows the gross amounts of the aforementioned derivative financial instruments in relation with their interim settlement, that is received or paid, as they are presenting in the statements of financial position as at 31.12.2021 and 31.12.2020, in order to summarize the total net position of the Group. Net position - Asset /(Liability) The Group’s senior management is supported by the Group finance, the treasury and the risk committee that advise on risks and the appropriate risk governance framework for the Group. The risk committee provides assurance to the Group’s senior management that the Group’s financial risk activities are governed by appropriate policies and procedures and that financial risks are identified, measured and managed in accordance with the Group’s policies and risk objectives. All derivative activities for risk management purposes are carried out by specialist teams and treasury that have the appropriate skills, experience and supervision. It is the Group’s policy that no trading in derivatives for speculative purposes may be undertaken. The Board of Directors has overall responsibility for determining the nature and extent of the principal risks that the Group is willing to assume in achieving its strategic objectives. The Group has the following derivative financial instruments in the following line items in the statement of financial position: The Group, by nature of its business and geographical positioning, is exposed to market, credit and liquidity risk. The Group’s senior management oversees the management of these risks. Where all relevant criteria are met, hedge accounting is applied to remove the accounting mismatch between the hedging instrument and the hedged item. However, where derivatives do not meet the hedge accounting criteria, or the Group chooses not to designate a hedging relationship between a derivative and a hedged item, they are classified as trading derivatives for accounting purposes and are accounted for at fair value through profit or loss. 211 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 2021 2020 USD 302,800 378,800 TRY 5,190 9,218 LEK 49,923 66,680 In 2021, the aggregate net foreign exchange losses recognised in the consolidated income statement amounted to €73 thousand (2020: €13,216 thousand) and they are analysed further into net exchange gains of €25.4 million (2020: losses of €46.5 million) and fair value losses on derivatives of €25.5 million (2020: gains of €33.2 million) (note 6). The Group operates internationally and is exposed to foreign exchange risk (FX). Foreign exchange risk arises from future commercial transactions, recognised assets and liabilities, mainly borrowings, denominated in a currency that is not the functional currency of the relevant Group entity and international investments. Also, the Group recognised exchange gains on translation of foreign operations of €6.6 million in the consolidated statement of comprehensive income, mainly due to euro depreciation against US dollars (gain of €37.2 million), Egyptian pound (gain of €10.1 million) and Albanian LEK (gain of €1.7 million), in addition with euro appreciation against Turkish lira (loss of €43.6 million). The comparative exchange losses of 2020 amounted to €121 million were mainly due to euro strengthening against US dollar (€41.4 million), Turkish lira (€40.2 million), Brazilian real (€29.4 million) and Egyptian pound (€8.9 million). Currency risks are managed using natural hedges, FX derivatives/swaps and FX forwards. Borrowings denominated in the same currency as the assets that are being financed and these create a natural hedge for investments in foreign subsidiaries exposed to FX conversion risk. However, part of the financing of Group activities in the USA, Albania and Turkey is in different currencies (i.e. Euro) than their functional ones. Their refinancing in local currencies, along with FX hedging transactions, are examined at regular intervals. The Group's borrowing exposure to foreign currency risk at the end of the reporting period, expressed in Euro thousands, was as follows: Specifically, in August 2018, Titan America LLC (TALLC) entered into cross currency interest rate swap agreements (CCSs) that expire in November 2024. The derivatives hedge the interest payments and the foreign currency exposure created by the €150 million 7-year, fixed rate loan that TALLC borrowed from TGF in December 2017. The total borrowing exposure of €302.8 million in USA is hedged with derivatives that are classified as trading. 35. Financial risk management objectives and policies (continued) a) Market risk Market risk comprises three main types of risk: currency risk, price risk, such as commodity risk and interest rate risk. Moreover, TALLC entered into various short-term forward contracts during the year 2021, in order to hedge foreign currency risk arising from financial liabilities in Euro. Particularly, TALLC has rollovered the hedges of EUR/USD forward contracts of €152.8 million loan agreements (2020: €228.8 million) with maturities in January and in April of 2022. Currency risk 212 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) Foreign Currency Increase/ Decrease of Foreign Currency vs. € Effect on Profit Before Tax Effect on equity 5% 3,694 25,400 -5% -3,342 -22,981 5% 1,024 1,424 -5% -926 -1,288 5% -562 13,824 -5% 508 -12,507 5% 152 434 -5% -137 -393 5% -399 2,464 -5% 361 -2,230 5% 522 4,080 -5% -472 -3,692 5% 139 6,078 -5% -126 -5,499 5% 3,803 24,179 -5% -3,441 -21,876 5% 964 1,373 -5% -872 -1,242 5% -2,141 12,446 -5% 1,937 -11,260 5% 195 287 -5% -176 -260 5% -352 4,492 -5% 318 -4,064 5% 449 3,557 -5% -407 -3,218 5% 156 5,882 -5% -141 -5,321 Again, TALLC designated a cash flow hedge relationship between the highly probable forecast monthly purchases of natural gas during 2022 and the swap contracts. Due to coincidence of economic terms, no ineffectiveness is anticipated in this hedge relationship and none was recognised in the consolidated income statement during 2021. On 31.12.2021, TALLC, and consequently the Group, recognised a total fair value loss of €1,096 thousand in consolidated other comprehensive income and in equity as a “hedging reserve from cash flow hedges”, with no amount related to this hedge relationship reclassified to the consolidated income statement in 2021. Moreover, Zlatna Panega Cement AD entered into a energy swap agreement in December 2021 in order to fix a portion of (API2) coal cost for the month of November 2022. On 31.12.2021, the loss of the derivative, that was classified as trading, amounted to €27 thousand and it was recorded in the "cost of sales" account of the consolidated income statement. Finally, Arresa Marine Co entered into various forwards freight agreements (FFAs) during 2021 and various expirations dates in 2021 and 2022 in order to partially hedge price fluctuations of freight cost. The FFAs were classified as trading derivatives and their total gain during 2021 of €3.2 million was recognised in the "cost of sales" of the consolidated income statement. Price risk The Group is exposed to the price volatility of electricity, fuel costs, freight rates or other transportation costs, and the cost of raw materials that constitute the most important elements of the Group’s cost base. During 2021, the Group entered into the following derivatives in order to hedge its exposure price changes of natural gas, coal and freights. In December 2020, Titan America LLC (TALLC) entered into a natural gas swap transaction in order to fix a portion of the monthly NYMEX component of its natural gas costs during 2021. The total notional amount of the swap contract was 1,800,000 MMBtus and its termination date was on 31.12.2021. TALLC designated a cash flow hedge relationship between the highly probable forecast monthly purchases of natural gas during 2021 and the swap contract. During 2021, TALLC reclassified the net gain of €1,723 thousand associated with the monthly settlements from cash flow hedge reserve to cost of sales, while it recognised no ineffectiveness in the consolidated income statement. Additionally, in 2021, TALLC entered into a series of natural gas swap transactions in order to fix a portion of the monthly NYMEX component of its natural gas costs during 2022. The total notional amount of the swap contracts was 2,350,000 MMBtus and the final termination date is 31.12.2022. Year ended 31 December 2020 USD RSD EGP GBP TRY ALL BRL GBP TRY ALL BRL 35. Financial risk management objectives and policies (continued) The following table demonstrates the sensitivity of the Group’s profit before tax and the Group’s equity to reasonable changes in the USΑ Dollar, Serbian Dinar, Egyptian Pound, British Pound, Turkish Lira, Albanian Lek and Brazilian Real floating exchange rates, with all other variables held constant. The calculation of "Effect on Profit before tax" is based on year average FX rates and the calculation of "Effect on Equity" is based on year end FX rate changes. Sensitivity analysis in foreign exchange rate changes Year ended 31 December 2021 USD RSD EGP 213 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Interest rate variation Effect on profit before tax (+/-) (-/+) EUR 1.0% 283 USD 1.0% 337 EGP 1.0% - ALL 1.0% 248 TRY 1.0% 54 EUR 1.0% 14 USD 1.0% - EGP 1.0% 374 ALL 1.0% 209 TRY 1.0% 14 Note: Table above excludes the positive impact of interest received from deposits. The impact of interest rate volatility is limited in the income statement and cash flow from operating activities of the Group, as shown in the sensitivity analysis table below: Sensitivity analysis of Group's borrowings due to interest rate changes (all amounts in Euro thousands) Year ended 31 December 2021 Year ended 31 December 2020 35. Financial risk management objectives and policies (continued) Due to coincidence of economic terms, no ineffectiveness is anticipated in the aforementioned hedge relationship. The only potential sources of inefficiency that could result are due to changes in the credit risk of the counterparties, or, in case, the hedged forecast transaction does not (or is no longer expected to) occur in the amounts, tenor or at the date anticipated. Currently such changes are not expected. Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s exposure to the risk of changes in market interest rates relates primarily to the Group’s long-term debt obligations with floating interest rates. The Group manages its interest rate risk by having a balanced portfolio of fixed and variable rate loans and borrowings. The ratio of fixed to floating rates of the Group’s net borrowings is determined by market conditions, Group strategy and financing requirements. Occasionally interest rate derivatives may be used to mitigate the relevant risk and balance the mix of fixed and floating rates of the Group’s borrowings. Interest rate risk On 31 December 2021, the Group’s ratio of fixed to floating interest rates, taking into account outstanding cross currency swaps and interest rate swaps, stood at 88%/12% (31 December 2020: 93%/7%). Interest rate trends and the duration of the Group’s financing needs are monitored on a forward looking basis. Consequently, decisions about the duration and the mix between fixed and floating rate debt are taken on an ad-hoc basis. On 31.12.2021, the carrying amount of the derivative amounted to €2.5 million and it was presented in non-current assets. Moreover, TGF, and therefore the Group, recognised a fair value gain of €2.5 million in other comprehensive income statement during 2021, while it had no ineffectiveness to recognise in the income statement. In June 2021, Titan Global Finance (TGF) entered into a forward starting interest rate swap (IRS) agreement in order to partially hedge the risk of the increased future mid swap rate from a highly probable future debt issuance. At the inception of the agreement, TGF designated a cash flow hedge relationship between the IRS and the highly probable future debt issuance by formal documentation. The forward starting fixed-for-floating EURIBOR-based 5-year interest rate swap with a notional amount of EUR 250m and forward period up to October 2023 is designated as the hedging instrument for a 100% hedge of the future interest payments arising from the highly probable forecasted debt issuance in 2023. 214 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) < 1 month 1 to 6 months 6 to 12 months 1 to 5 years >5years Total Borrowings 10,130 54,373 40,988 443,470 256,875 805,836 Lease liabilities (note 33) 1,245 7,687 6,754 34,069 22,078 71,833 Derivative financial instruments 1,398 1,893 5,451 6,185 - 14,927 Payables from interim settlement of derivatives - - - 1,070 - 1,070 Other non-current liabilities - - - 5,138 - 5,138 Trade and other payables 177,289 91,258 16,729 - - 285,276 190,062 155,211 69,922 489,932 278,953 1,184,080 Borrowings 5,104 202,260 13,327 446,860 256,875 924,426 Lease liabilities (note 33) 2,079 6,760 9,663 29,722 17,551 65,774 Derivative financial instruments 1,224 - 3,889 - - 5,113 Payables from interim settlement of derivatives 12,957 - - 2,291 - 15,248 Other non-current liabilities - - - 4,777 - 4,777 Trade and other payables 127,241 128,291 4,190 - - 259,722 148,605 337,311 31,069 483,650 274,426 1,275,060 2021 2020 restated 641,461 628,172 46,004 38,821 89,242 205,656 16,378 18,194 793,085 890,843 79,882 206,438 713,203 684,405 275,209 285,595 1,341,755 1,400,840 1,336,886 1,275,356 c) Liquidity risk d) Capital management Year ended 31 December 2021 Year ended 31 December 2020 The primary objective of the Group’s capital management is to ensure that it maintains healthy capital ratios in order to support its operations and maximize shareholder value. The Group includes within net debt, interest bearing loans, borrowings and lease liabilities, less cash and cash equivalents. The Group manages its capital structure conservatively with the leverage ratio, as this is shown from the relationship between total liabilities and total equity as well as net debt and earnings before interest, taxes, depreciation, amortization and impairment (EBITDA). Titan's policy is to maintain leverage ratios in line with an investment grade profile. 35. Financial risk management objectives and policies (continued) Total liabilities Total equity (all amounts in Euro thousands) Long-term borrowings (note 32) Long-term lease liabilities (note 33) Short-term borrowings (note 32) Short-term lease liabilities (note 33) Less: cash and cash equivalents (note 21) Net Debt Earnings before interest, taxes, depreciation, amortization and impairment (EBITDA) The Group, in addition to its operating cash flows, maintains sufficient cash and other liquid assets, as well as extensive committed credit lines with several international banks to ensure the fulfilment of its financial obligations. Group Treasury controls Group funding as well as the management of liquid assets. The table below summarizes the maturity profile of financial and lease liabilities at 31 December 2021 & 2020 based on contractual undiscounted payments. Debt 215 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 36. Financial instruments and fair value measurement (all amounts in Euro thousands) 2021 2020 2021 2020 Financial assets At amortised cost Other non-current financial assets 9,249 6,275 9,249 6,275 Trade receivables 128,447 107,964 128,447 107,964 Cash and cash equivalents 79,882 206,438 79,882 206,438 Other current financial assets 52,860 36,831 52,860 36,831 Fair value through other comprehensive income Derivative financial instruments - non current 2,488 - 2,488 - Fair value through profit and loss Derivative financial instruments - non current - 2,291 - 2,291 Receivables from interim settlement of derivatives - non current 6,185 - 6,185 - Other non-current financial assets 230 181 230 181 Derivative financial instruments - current 1,715 16,462 1,715 16,462 Receivables from interim settlement of derivatives - current 9,079 4,142 9,079 4,142 Other current financial assets 30 30 30 30 Financial liabilities At amortised cost Long term borrowings 641,461 628,172 659,678 645,374 Other non-current financial liabilities 17 16 17 16 Short term borrowings 89,242 205,656 89,242 208,137 Other current financial liabilities 281,727 256,486 281,727 256,486 Fair value through other comprehensive income Derivative financial instruments - current 1,084 47 1,084 47 Fair value through profit and loss Derivative financial instruments - non current 6,185 - 6,185 - Payables from interim settlement of derivatives - non current 1,070 2,291 1,070 2,291 Derivative financial instruments - current 7,658 5,066 7,658 5,066 Payables from interim settlement of derivatives - current - 12,957 - 12,957 Fair value hierarchy The Group uses the following hierarchy for determining and disclosing the fair value of the assets and liabilities by valuation method: Level 1: based on quoted (unadjusted) prices in active markets for identical assets or liabilities. Level 2: based on valuation techniques whereby all inputs having a significant effect on the fair value are observable, either directly or indirectly and includes quoted prices for identical or similar assets or liabilities in markets that are not so much actively traded. Level 3: based on valuation techniques whereby all inputs having a significant effect on the fair value are not observable market data. Set out below is a comparison by category of carrying amounts and fair values of the Group’s financial instruments. Carrying amount Fair value Note: Derivative financial instruments consist of fx forwards, cross currency interest rate swaps (CCS), interest rate swaps (IRS), natural gas forwards, forward freight agreements (FFAs), energy swaps and interim settlements for derivatives that consist of cash, which covers fluctuations in the market value of the aforementioned derivatives. The management assessed that the cash and cash equivalents, trade receivables, trade payables, bank overdrafts and other current liabilities approximate their carrying amounts largely due to the short-term maturities of these instruments. 216 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) 2021 2020 A ssets Investment property 10,980 11,720 Level 3 Other financial assets at fair value through profit and loss 260 211 Level 3 Derivative financial instruments 4,203 18,753 Level 2 Receivables from interim settlement of derivatives 15,264 4,142 Level 2 Liabilities Long-term borrowings 614,391 612,463 Level 2 Long-term borrowings 45,287 32,911 Level 3 Short-term borrowings - 170,196 Level 2 Short-term borrowings 89,242 37,941 Level 3 Derivative financial instruments 14,927 5,113 Level 2 Payables from interim settlement of derivatives 1,070 15,248 Level 2 The following table provides the fair value measurement hierarchy of the Group's assets and liabilities. 36. Financial instruments and fair value measurement (continued) For the majority of the borrowings in level 3, the fair values are not materially different from their carrying amounts, since the interest payable on those borrowings is either close to current market rates, or the borrowings are of a short-term nature. The fair values of non-current borrowings in level 3 are based on discounted cash flows using a borrowing rate that is prevailed in current market condition. Level 2 derivative financial instruments comprise fx forwards, cross currency interest rate swaps, interest rate swaps, natural gas forwards, forward freight agreement and energy swaps. Τhe Group use a variety of methods and make assumptions that are based on market conditions existing at each reporting date. The aforementioned contracts have been fair valued using: a) forward exchange rates that are quoted in the active market, b) forward interest rates extracted from observable yield curves, c) US Natural Gas Henry Hub futures prices that are quoted in the active market, d) Baltic Supramax 10TC 58kt Forward Freight prices that are quoted in the active market and e) Coal API2 cif ARA (Argus /McCloskey) future prices that are quoted in the active market. Level 3 other financial assets at fair value through profit and loss refer mainly to investments in foreign property funds in which the Group owns an insignificant percentage. Their valuation is made based on their financial statements, which present the assets at fair value. Fair value Fair value hierarchy There were no transfers between level 1 and 2 fair value measurements during the period and no transfers into or out of level 3 fair value measurements during 2021. The fair value of level 3 investment property is estimated by the Group by external, independent, certified valuators. The fair value measurement of the investment property has been mainly conducted in accordance with the comparative method, or the current market values of similar properties. The main factors that were taken into consideration, are the property location, the surface area, the local urban planning, the bordering road networks, the regional infrastructure, the property maintenance status and merchantability, the technical construction standards in the case of buildings and the impact of environmental issues if any. The fair value of the financial assets and liabilities is the amount at which the instrument could be exchanged in a current transaction between willing parties, other than a forced liquidation or sale. The following methods and assumptions were used to estimate the fair values: For long and short term borrowings in level 2, the evaluation of their fair value is based on parameters such as interest rates, specific country risk factors, or price quotations at the reporting date. Specifically, they are used quoted market prices, or dealer quotes for the specific or similar instruments. 217 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP 37. Fiscal years unaudited by tax authorities (1) Τitan Cement Company S.A 2016-2021 Stari Silo Company DOO 2008-2021 (1) Albacem S.A. 2016-2021 Cementara Kosjeric AD 2016-2021 (1) Interbeton Construction Materials S.A. 2016-2021 TCK Montenegro DOO 2007-2021 (1) Intertitan Trading International S.A. 2016-2021 Double W & Co OOD 2018-2021 (1) Vahou Quarries S.A. 2016-2021 Granitoid AD 2007-2021 (1) Gournon Quarries S.A. 2016-2021 Gravel & Sand PIT AD 2005-2021 (1) Quarries of Tagaradon Community S.A. 2016-2021 Zlatna Panega Beton EOOD 2008-2016 (1) Aitolika Quarries S.A. 2016-2021 Zlatna Panega Cement AD 2010-2021 (1) Sigma Beton S.A. 2016-2021 Titan Investment EAD 2017-2019 (1) Titan Atlantic Cement Industrial and Commercial S.A. 2016-2021 Cement Plus LTD 2014-2021 (1) Titan Cement International Trading S.A. 2016-2021 Rudmak DOOEL 2006-2021 Titan Cement International S.A. 2019-2021 Esha Material LLC 2016-2021 Aemos Cement Ltd 2012-2018 Esha Material DOOEL 2016-2021 Alvacim Ltd 2013-2021 ID Kompani DOOEL 2015-2021 Iapetos Ltd 2014-2021 Opalit DOOEL 2019-2021 Themis Holdings Ltd 2019-2021 Usje Cementarnica AD 2020-2021 Feronia Holding Ltd 2019-2021 Titan Cement Netherlands BV 2010-2021 Vesa DOOL 2006-2021 Alba Cemento Italia, SHPK 2017-2021 Trojan Cem EOOD 2010-2021 Antea Cement SHA 2020-2021 (2) Titan Global Finance PLC 2020-2021 Sharr Beteiligungs GmbH 2014-2021 Salentijn Properties1 B.V. 2007-2021 Kosovo Construction Materials L.L.C. 2010-2021 Titan Cement Cyprus Limited 2017-2021 Sharrcem SH.P.K. 2017-2021 KOCEM Limited 2019-2021 Alexandria Development Co.Ltd 2019-2021 Fintitan SRL 2015-2021 Alexandria Portland Cement Co. S.A.E 2019-2021 Cementi Crotone S.R.L. 2015-2021 Beni Suef Cement Co.S.A.E. 2011-2021 Cementi ANTEA SRL 2017-2021 East Cement Trade Ltd 2019-2021 Colombus Properties B.V. 2010-2021 Titan Beton & Aggregate Egypt LLC 2015-2021 Brazcem Participacoes S.A. 2016-2021 Titan Egyptian Inv. Ltd 2019-2021 Adocim Cimento Beton Sanayi ve Ticaret A.S. 2021 Green Alternative Energy Assets EAD 2012-2021 Adocim Marmara Cimento Beton Sanayi ve Ticaret A.S. 2021 GAEA Zelena Alternative Enerjia DOOEL 2013-2021 Aeas Netherlands B.V. 2010-2020 GAEA Enerjia Alternative e Gjelber Sh.p.k. 2017-2021 Titan Cement U.K. Ltd 2015-2021 GAEA -Green Alternative Energy Assets 2016-2021 (3) Τitan Αmerica LLC 2018-2021 (4) Arresa Marine Co - Separation Technologies Canada Ltd 2016-2021 Tithys Holdings Limited 2020-2021 MILLCO-PCM DOOEL 2016-2021 Rea Cement Investments Limited 2021 38. COVID-19 implications At the same time, the Group continuously re-assessed the economic consequences of the pandemic and re-examined the estimations and/or assumptions made in various accounting analyses to include the uncertainty caused by the COVID-19 pandemic. Specifically, the Group reviewed the accounting estimates and management judgements used in the impairment test of non-financial assets, the measurement of net realizable value of inventories, the test of financial assets’ collectability and the calculation of deferred tax assets’ recoverability. It concluded that none of the above accounting analyses was impacted by the economic implications of the pandemic. Finally, governmental measures in the USA allowed Titan America LLC to accelerate the refund of outstanding alternative minimum tax credits, which was actually received during the first semester of 2021. In addition, governmental measures in the USA allowed Titan America LLC to defer certain payroll taxes of €6.4 million in 2020 and repay the deferred funds equally in December 2021 and December 2022. The December 2021 installment was repaid and only the December 2022 installment of €3.2 million remains outstanding. The Group responded to these challenges through several measures, including increasing hygiene and sanitization standards, promoting social distancing, installing plexiglass panels, making mask use mandatory, offering PCR and rapid testing, and reducing or canceling travel and large meetings and events. In addition, medical and psychological support were provided by experts or through health care programs. (1) For the fiscal years 2016-2020 Certified Auditors Accountants tax audited the above companies and issued tax certificates without qualifications, according to the article 65A, par. 1 of L. 4174/2013. (2) As per UK tax legislation, HMRC could address any enquiry only for the years 2020 – 2021 which remain open to enquiry without the need for a discovery assessment. (3) Companies operating in the U.S.A. are incorporated in the Titan America LLC subgroup (note 16). (4) Under special tax status. The 2021 was marked by the continuous effects of the Covid-19 pandemic, the emergence of new variants and the associated measures implemented globally. 218 MANAGEMENT REPORT FINANCIAL REVIEW 39. Events after the reporting period In March 2022, the Board decided to implement a new share buy-back programme. The new programme will begin on or around April 6, 2022, following the end of the current running programme. The new share buy-back programme will be up to €10 million and will have a duration of up to six months. Titan Cement International S.A. will keep the market fully informed of the progress of the relevant transactions in line with applicable regulations. Finally, the current military conflict after the Russian invasion in the Ukraine creates geopolitical uncertainties with macroeconomic implications the extent of which cannot yet be assessed. The Group has no exposure to Ukraine, Russia or affected regions. Nevertheless the effect on the Group’s businesses from developments in the energy sector and the broader macro implications are anticipated to impact market trends and further increase inflation risks. Especially in Europe, the economies are entering a difficult phase, with increased risks of rising inflation and a slowdown of economic growth. There is a negative impact already on the energy sector, the severity of which, as well as the duration, cannot yet be assessed. 219 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Parent company’s Separate summarized ﬁnancial statements (all amounts in Euro thousands) 2021 2020 Operating income 3,568 4,296 Operating charges -10,121 -9,457 Operating loss -6,553 -5,161 Financial result 356,887 1,799 Profit/(loss) for the period before taxes 350,335 -3,362 Income taxes -1 -1 Profit/(loss) for the period 350,334 -3,363 Year ended 31 December Income Statement This is an abbreviated version of the parent company's Financial Statements. A full version of the accounts (included the auditors report), that will be filled with the BNB/NBB, is available on the Company's website www.titan-cement.com and can be obtained free of charge. 220 MANAGEMENT REPORT FINANCIAL REVIEW (all amounts in Euro thousands) December 31, 2021 December 31, 2020 Assets Fixed assets Formation expenses 4,402 6,062 Intangible assets 47 41 Tangible assets 171 225 Financial fixed assets Participating interests 1,679,788 1,443,069 Other financial fixed assets 23 27 Total financial fixed assets 1,679,811 1,443,096 Total fixed assets 1,684,431 1,449,424 Current assets Inventory 20,061 - Amounts receivable within one year 1,456 4,614 Treasury shares 5,465 3,585 Cash at bank and in hand 139 267 Deferred charges and accrued income 145 119 Total current assets 27,266 8,585 Total assets 1,711,697 1,458,009 Equity and liabilities Equity Capital 1,159,348 1,159,348 Share premium 15,321 15,320 Reserves 162,261 135,648 Retained (losses)/earnings 246,683 -11,720 Total equity 1,583,613 1,298,595 Provisions and deferred taxes 578 329 Amounts payable Amounts payable after more than one year Financial debt -- Other amounts payable 63,401 100,709 Total amounts payable after more than one year 63,401 100,709 Amounts payable within one year Financial debt 21,717 19,780 Trade debts 2,408 3,505 Taxes, remunerations and social security 927 1,148 Other amounts payable 38,956 33,870 Total amounts payable within one year 64,008 58,303 Accruals and deferred income 97 72 Total amount payables 127,506 159,084 Total equity and liabilities 1,711,697 1,458,009 Statutory Balance Sheet After Appropriation This is an abbreviated version of the parent company's Financial Statements. A full version of the accounts (included the auditors report), that will be filled with the BNB/NBB, is available on the Company's website www.titan-cement.com and can be obtained free of charge. 221 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Declaration by the persons responsible The Board of Directors hereby declares that, to the best of their knowledge: a. The ﬁnancial statements, prepared in accordance with International Reporting Standards (IFRS), give a true and fair view of the assets, liabilities, ﬁnancial position and proﬁt or loss of the issuer and of the entities included in the consolidation; b. The management report includes a fair review of the development and performance of the business and the position of the issuer and of the entities included in the consolidation, together with a description of the main risks and uncertainties that these entities face. For the Board of Directors, 7 April 2022 Chairman of the Board of Directors Managing Director- Group CFO Efstratios- Georgios (Takis) Arapoglou Michael Colakides 222 MANAGEMENT REPORT STATUTORY AUDITOR'S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF TITAN CEMENT INTERNATIONAL SA ON THE CONSOLIDATED ACCOUNTS FOR THE YEAR ENDED 31 DECEMBER 2021 We present to you our statutory auditor’s report in the context of our statutory audit of the consolidated accounts of Titan Cement International SA (the “Company”) and its subsidiaries (jointly “the Group”). This report includes our report on the consolidated accounts, as well as the other legal and regulatory requirements. This forms part of an integrated whole and is indivisible. We have been appointed as statutory auditor by the general meeting d.d. 13 May 2019, following the proposal formulated by the board of directors and following the recommendation by the audit committee. Our mandate will expire on the date of the general meeting which will deliberate on the annual accounts for the year ended 31 December 2021. We have performed the statutory audit of the Company’s consolidated accounts for 3 consecutive years. Report on the consolidated accounts Unqualified opinion We have performed the statutory audit of the Group’s consolidated accounts, which comprise the Consolidated Statement of Financial Position as at 31 December 2021, the Consolidated Income Statement, the Consolidated Statement of Comprehensive Income, the Consolidated Statement of Changes in Equity and the Consolidated Cash Flow Statement for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies and other explanatory information, and which is characterised by a consolidated statement of financial position total of ‘000 EUR 2,678,641 and a profit for the year attributable to equity holders of the parent of ‘000 EUR 91,923. In our opinion, the consolidated accounts give a true and fair view of the Group’s net equity and consolidated financial position as at 31 December 2021, and of its consolidated financial performance and its consolidated cash flows for the year then ended, in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISAs) as applicable in Belgium. Furthermore, we have applied the International Standards on Auditing as approved by the IAASB which are applicable to the year-end and which are not yet approved at the national level. Our responsibilities under those standards are further described in the “Statutory auditor’s responsibilities for the audit of the consolidated accounts” section of our report. We have fulfilled our ethical responsibilities in accordance with the ethical requirements that are relevant to our audit of the consolidated accounts in Belgium, including the requirements related to independence. We have obtained from the board of directors and Company officials the explanations and information necessary for performing our audit. PwC Bedrijfsrevisoren BV - PwC Reviseurs d'Entreprises SRL - Financial Assurance Services Maatschappelijke zetel/Siège social: Culliganlaan 5, B-1831 Diegem T: +32 (0)2 710 4211, F: +32 (0)2 710 4299, www.pwc.com BTW/TVA BE 0429.501.944 / RPR Brussel - RPM Bruxelles / ING BE43 3101 3811 9501 - BIC BBRUBEBB / BELFIUS BE92 0689 0408 8123 - BIC GKCC BEBB 223 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Key audit matter A key audit matter is a matter that, in our professional judgment, was of most significance in our audit of the consolidated accounts of the current period. This matter was addressed in the context of our audit of the consolidated accounts as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on this matter. Impairment of goodwill, intangible assets, investments in Joint Ventures and PP&E Description of the key audit matter Titan Cement International Group carries significant values of property plant and equipment (PP&E), goodwill, intangible assets and investments in joint ventures on the balance sheet amounting to EUR 1,545 million, 272 million, 91 million and 89 million respectively as at 31 December 2021 as detailed in disclosure notes 11, 13, 14 and 15. As required by the International Accounting Standard (‘IAS 36’), as endorsed by the EU, the Group is required to test the amount of goodwill and indefinite useful life intangible assets for impairment at least annually. IAS 36 also requires that assets subject to depreciation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. International Accounting Standard (‘IAS 28’) states that investments in joint ventures are assessed for impairment where indicators of impairment are present. The recoverable amount of the joint venture is determined in accordance with IAS 36. Goodwill, intangible assets, investment in joint ventures and property, plant and equipment are allocated to cash generating units (CGUs). Management determines the recoverable amount for each CGU as the higher of fair value less costs to sell and value in use. The calculation of the recoverable amount of each CGU requires judgements applied by Management. We consider this matter to be of most significance because of the complexity of the assessment process and significant judgments in respect of assumptions about the future results of the business and the discount rates applied to future cash flow forecasts. The most important assumptions relate to the discount rate, sales volume and selling price evolutions, perpetual growth rates and operating margins. We focused on the Egypt, Turkey and Brazil CGUs because they are most sensitive to changes in key assumptions. How our audit addressed the key audit matter We evaluated management’s overall impairment testing process including assessing the process by which the value in use models are reviewed and approved. 224 MANAGEMENT REPORT We evaluated the appropriateness of the use of the forecast period for the value in use calculation of the CGUs. We assessed the reliability of management’s estimates by comparing actual performance against previous forecasts. We tested the Group’s key assumptions for growth rates, sales volumes, selling prices and gross margins in the future cash flow forecasts by comparing them to local industry trends and assumptions made in the prior years and agreed them to approved financial budgets. We critically assessed and checked the assumptions related to the long-term growth rates, by comparing them to industry forecasts and historical growth rates. We compared operating margin, working capital- and CAPEX percentages with past actuals. We compared the weighted average cost of capital (“WACC”) to the cost of capital and debt of the Group and comparable companies, as well as considering territory specific factors. We tested the calculation method used and the accuracy thereof. We evaluated the impact of alternative scenarios about discount rates, growth rates, selling prices and gross margins on the recoverable amount of each CGU. We found that sufficient headroom remained between the carrying value and the recoverable amount for all CGUs. We included valuation specialists in our team to assist us with these procedures. Based on the procedures performed we considered management’s key assumptions to be within a reasonable range and disclosures in the financial statements to be adequate. Responsibilities of the board of directors for the preparation of the consolidated accounts The board of directors is responsible for the preparation of consolidated accounts that give a true and fair view in accordance with International Financial Reporting Standards as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium, and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated accounts that are free from material misstatement, whether due to fraud or error. In preparing the consolidated accounts, the board of directors is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 225 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP Statutory auditor’s responsibilities for the audit of the consolidated accounts Our objectives are to obtain reasonable assurance about whether the consolidated accounts 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 consolidated accounts. In performing our audit, we comply with the legal, regulatory and normative framework applicable to the audit of the consolidated accounts in Belgium. A statutory audit does not provide any assurance as to the Group’s future viability nor as to the efficiency or effectiveness of the board of directors’ current or future business management at Group level. Our responsibilities in respect of the use of the going concern basis of accounting by the board of directors are described below. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: • Identify and assess the risks of material misstatement of the consolidated accounts, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; • Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control; • Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; • Conclude on the appropriateness of the board of directors’ use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated accounts 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 statutory auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; • Evaluate the overall presentation, structure and content of the consolidated accounts, including the disclosures, and whether the consolidated accounts represent the underlying transactions and events in a manner that achieves fair presentation; 226 MANAGEMENT REPORT • Obtain sufficient and 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 Group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee 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 the audit committee 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 the audit committee, we determine those matters that were of most significance in the audit of the consolidated accounts of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter. Other legal and regulatory requirements Responsibilities of the board of directors The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated accounts and the other information included in the integrated annual report on the consolidated accounts. Statutory auditor’s responsibilities In the context of our engagement and in accordance with the Belgian standard which is complementary to the International Standards on Auditing (ISAs) as applicable in Belgium, our responsibility is to verify, in all material respects, the directors’ report on the consolidated accounts and the other information included in the integrated annual report on the consolidated accounts and to report on these matters. Aspects related to the directors’ report on the consolidated accounts and to the other information included in the annual report on the consolidated accounts In our opinion, after having performed specific procedures in relation to the directors’ report on the consolidated accounts, this directors’ report is consistent with the consolidated accounts for the year under audit and is prepared in accordance with article 3:32 of the Companies' and Associations' Code. In the context of our audit of the consolidated accounts, we are also responsible for considering, in particular based on the knowledge acquired resulting from the audit, whether the directors’ report on the consolidated accounts and the other information included in the annual report on the consolidated accounts is materially misstated or contains information which is inadequately disclosed or otherwise misleading. In light of the procedures we have performed, there are no material misstatements we have to report to you. 227 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP The non-financial information required by virtue of article 3:32, §2 of the Companies' and Associations' Code is included in the directors’ report on the consolidated accounts which is part of the section “Management Report; ESG Performance statements” of the integrated annual report. The Company has prepared the non-financial information, based on the UN Global Compact Communication on Progress Guidelines, the Charter and Guidelines of the Global Cement and Concrete Association and the UN SDGs 2030. However, in accordance with article 3:80, §1, 5° of the Companies' and Associations' Code, we do not express an opinion as to whether the non-financial information has been prepared based on the UN Global Compact Communication on Progress Guidelines, the Charter and Guidelines of the Global Cement and Concrete Association and the UN SDGs 2030 as disclosed in the directors’ report on the consolidated accounts. European Uniform Electronic Format (ESEF) We have also verified, in accordance with the draft standard on the verification of the compliance of the financial statements with the European Uniform Electronic Format (hereinafter “ESEF”), the compliance of the ESEF format with the regulatory technical standards established by the European Delegate Regulation No. 2019/815 of 17 December 2018 (hereinafter: “Delegated Regulation”). The board of directors is responsible for the preparation, in accordance with ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (hereinafter “consolidated financial statements”) included in the annual financial report. Our responsibility is to obtain sufficient appropriate evidence to conclude that the format and marking language of the digital consolidated financial statements comply in all material respects with the ESEF requirements under the Delegated Regulation. Based on the work we have performed, we believe that the format of and marking of information in the digital consolidated financial statements included in the annual financial report of Titan Cement International SA per 31 December 2021 comply in all material respects with the ESEF requirements under the Delegated Regulation. Statement related to independence භ Our registered audit firm and our network did not provide services which are incompatible with the statutory audit of the consolidated accounts, and our registered audit firm remained independent of the Group in the course of our mandate. භ The fees for additional services which are compatible with the statutory audit of the consolidated accounts referred to in article 3:65 of the Companies' and Associations' Code are correctly disclosed and itemized in the notes to the consolidated accounts. Other statements භ This report is consistent with the additional report to the audit committee referred to in article 11 of the Regulation (EU) N° 537/2014. 228 MANAGEMENT REPORT Diegem, 8 April 2022 The statutory auditor PwC Reviseurs d'Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Didier Delanoye Réviseur d’Entreprises / Bedrijfsrevisor 229 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP  Independent Assurance Statement to the Board of Directors of Titan Cement International S.A. ERM Certification and Verification Services Limited (‘ERM CVS’) was engaged by Titan Cement International S.A. (‘TITAN Group’) to provide assurance in relation to the information set out below and presented in TITAN’s Integrated Annual Report 2021 for the reporting year ended 31 December 2021 (the ‘Report’). Engagement Summary Assurance Scope 1. Whether the following disclosures in the Report are fairly presented, in all material respects, with the reporting criteria:  “Focusing on material issues” in section “Understanding TITAN” on pages 18 to 19.  “Making progress towards our ESG targets” in section “Understanding TITAN” on pages 30 to 31  The information and 2021 performance data disclosed in section “Management Report; ESG performance overview” on pages 82 to 97  The Group data for the non-financial metrics relating to the period January 1 to December 31 2021 indicated within the assurance column in section “Management Report; ESG Performance statements” in tables 2.1 through 2.4 on pages 103 to 123. 2. Whether the relevant 2021 data and disclosures in the Report are aligned with the following GCCA requirements:  Sustainability Charter (October 2019)  Sustainability Framework Guidelines (October 2019)  Sustainability Guidelines for co-processing fuels and raw materials in cement manufacturing (October 2019)  Sustainability Guidelines for Quarry Rehabilitation and Biodiversity Management (May 2020)  Sustainability Guidelines for the monitoring and reporting of:  Safety in cement and concrete manufacturing (February 2020) with extended application to concrete and other related activities  CO 2 emissions from cement manufacturing (October 2019)  Emissions from cement manufacturing (October 2019)  Water in cement manufacturing (October 2019) 3. Whether the Report meets the UN Global Compact criteria relating to a Communication on Progress (COP) Advanced Level. Reporting Criteria  GCCA requirements for the scope referenced above;  UN Global Compact COP Advanced Level; and  as presented in notes to Tables 2.1-2.4 as referenced above. Assurance Standard and Level of Assurance International Standard on Assurance Engagements ISAE 3000 (Revised) ‘Assurance Engagements other than Audits and Reviews of Historical Financial Information’ issued by the International Auditing and Assurance Standards Board (IAASAB) of the International Federation of Accountants (IFAC). This standard requires that we comply with ethical, competence and quality requirements, and plan and perform the assurance engagement to obtain a reasonable level of assurance. Respective Responsibilities The Board of TITAN Group is responsible for preparing the Report and for the collection and presentation of the disclosures covered by the scope of our engagement. Also for designing, implementing and maintaining effective internal controls over the information and data. ERM CVS’ responsibility is to provide an opinion, based on the assurance activities undertaken and exercising our professional judgement, on whether the information covered by the scope of our engagement has been prepared in accordance with the stated reporting criteria. ERM CVS disclaims any liability for any decision a person or entity may make based on this Assurance Statement. 230  Our opinion We have assured selected information in the Report as detailed under ‘Assurance Scope’ above. In our opinion: 1. The performance disclosures and data in the Report as described under ‘Assurance Scope (1)’ above are fairly presented, in all material respects, in accordance with the reporting criteria; 2. The relevant 2021 data and disclosures in the Report are aligned with the following GCCA requirements:  Sustainability Charter (October 2019)  Sustainability Framework Guidelines (October 2019)  Sustainability Guidelines for co-processing fuels and raw materials in cement manufacturing (October 2019)  Sustainability Guidelines for Quarry Rehabilitation and Biodiversity Management (May 2020)  Sustainability Guidelines for the monitoring and reporting of:  Safety in cement and concrete manufacturing (February 2020) with extended application to concrete and other related activities  CO 2 emissions from cement manufacturing (October 2019)  Emissions from cement manufacturing (October 2019)  Water in cement manufacturing (October 2019) 3. The Report meets the UN Global Compact criteria relating to a Communication on Progress (COP) Advanced Level. Our reasonable assurance activities We planned and performed our work to obtain sufficient and appropriate evidence to support our opinion, and to reduce the risk of a material error or omission in the assured information to low, but not absolute. Our assurance procedures included, but were not restricted to, the following activities:  A review of external media reports to identify relevant sustainability issues for TITAN Group in the reporting period;  A review of the suitability of the reporting criteria and related internal reporting processes, including conversion factors, estimates and assumptions used;  A virtual meeting with TITAN Group’s Head Office in Athens, Greece to understand any (planned) changes to TITAN Group’s sustainability strategy, the Report and related reporting systems and processes, internal controls and responsibilities in 2021;  Virtual visits to TITAN Group’s cement operations in Greece (Patras) and Albania (ANTEA), and RMC operations in Greece (Drepano) to verify the source data underlying the 2021 data for the information in our assurance scope and to review local environmental and safety management, procurement procedures, labour and human rights and stakeholder/community engagement. TITAN Group explained that the two cement operations contributed circa 14.4% of the Group’s cement production and circa 15% of net CO 2 emissions for the reporting year;  Virtual meeting with TITAN Group’s cement operations in Egypt (Beni Suef) to verify source data and review management procedures for reported Scope 3 GHG emissions;  An assessment of the reports and conclusions of accredited third-party verification bodies relating to the verification of Scope 1 GHG emissions that fall within the scope of the EU emissions trading scheme (EU ETS). These provided coverage of an additional circa 22.5% of TITAN Group’s net CO 2 emissions (excluding Patras to avoid double counting with sites visited);  An analytical review and substantive testing (on a sample basis) of the 2021 data submitted by all sites included in the consolidated corporate data for the selected disclosures, and follow-up and close out of our queries;  Substantive procedures relating to the consolidation of the 2021 data for the selected disclosures;  A second virtual meeting over two-days with TITAN Group’s Head Office in Athens, Greece to:  review activities across the business during 2021 regarding stakeholder engagement and in relation to TITAN Group’s identified material issues;  test the effectiveness of internal controls in relation to the accuracy and completeness of the 2021 corporate consolidated data for the indicators in the scope of our engagement;  collect additional evidence through an extensive series of interviews with management representatives (including the Chief Sustainability Officer, ESG department, Environment, Safety, Human resources, Finance, Procurement, Legal and Internal Audit), and reviewed further evidence in underlying management and reporting systems such as the Global HR Management System and documents including the minutes of meetings of governance bodies; and MANAGEMENT REPORT 231 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP  A review of the presentation of information relevant to the scope of our work in the Report to ensure consistency with our findings. The limitations of our engagement We do not express any opinion on any other information in the Report or on TITAN Group’s website for the current reporting period, or on the baseline values used for presenting performance against targets. We do not provide any assurance on prospective information including ambitions, plans, expectations or the achievability of targets. For previous periods (2016-2020) we refer to our Assurance Statements in the Integrated Annual Reports for those years in order to understand the scope, activities and related opinions. The reliability of the assured 2021 data is subject to inherent uncertainties, given the available methods for determining, calculating or estimating the underlying information so it is important to understand our assurance opinion in this context. Our independent assurance statement provides no assurance on the maintenance and integrity of TITAN Group’s website, including controls used to achieve this or, in particular, whether any changes may have occurred to the information since it was first published. Force Majeure – COVID-19 As a result of travel restrictions arising from the current global pandemic, we were unable to carry out our assurance activities as originally planned and agreed with TITAN Group. In-person visits to operations and the head office were replaced with remote reviews via teleconference and video calls for this year’s assurance engagement. Whilst we believe these changes do not affect our reasonable assurance opinions above, we draw attention to the possibility that if we had undertaken in-person visits, we may have identified errors and omissions in the assured information that we did not discover through the alternative approach. Ethics, independence, competence and quality control ERM CVS is a member of the ERM Group and all employees are subject to ERM’s Global Code of business conduct and ethics. ERM CVS is accredited by the United Kingdom Accreditation Service (UKAS) and our operating system is designed to comply with ISO 17021:2011. We have policies and procedures in place covering quality, independence and competency. In line with established best practice for non-financial assurance, this engagement was undertaken by a team of assurance, EHS and sustainability professionals. The work that ERM CVS conducts for clients is solely related to independent assurance activities and auditor training. Our established management processes are designed and implemented to ensure the work we undertake with clients is free from organisational and personal conflicts of interest or bias. ERM CVS and the staff that have undertaken this assurance engagement provide no consultancy related services to Titan Cement International S.A. in any respect. Gareth Manning Partner, Corporate Assurance 1 April 2022 ERM Certification and Verification Services Limited, London www.ermcvs.com | Email: [email protected] 232 Glossary Financial CAPEX: Acquisitions/additions of property, plant and equipment, right of use assets, investment property and intangible assets. It allows management to monitor the capital expenditure. EBITDA: Operating proﬁt before impairment losses on goodwill plus depreciation, amortization and impairment of tangible and intangible assets and amortization of government grants. It provides a measure of operating proﬁtability that is comparable among reportable segments consistently. Net debt: Sum of long-term borrowings and lease liabilities, plus short-term borrowings and lease liabilities (collectively gross debt), minus cash and cash equivalents. It allows management to monitor the indebtedness. NPAT: Proﬁt after tax attributable to equity holders of the parent. It provides a measure of total proﬁtability that is comparable over time. Operating free cash ﬂow: Cash generated from operations minus payments for CAPEX. It measures the capability of the Group in turning proﬁt into cash through the management of operating cash ﬂow and capital expenditure. Operating proﬁt before impairment losses on goodwill: Proﬁt before income tax, share of gain or loss of associates and joint ventures, gains or losses from foreign exchange differences, net ﬁnance costs, other income or loss and impairment losses on goodwill. It provides a measure of operating proﬁtability that is comparable over time. Operating proﬁt: Proﬁt before income tax, share of gain or loss of associates and joint ventures, gains or losses from foreign exchange differences, net ﬁnance costs and other income or loss. It provides a measure of operating proﬁtability that is comparable over time. ESG Aqueduct: The World Resource Institute’s (WRI) Aqueduct Water Risk Atlas is a publicly-available online global database of local- level water risk indicators and a global standard for measuring and reporting geographic water risk. The World Resources Institute is a global, independent, non-partisan and non-proﬁt research organization, with mission to move human society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generations. CDP: CDP Global is an international non-proﬁt organization comprising of CDP Worldwide Group, CDP North America, Inc. and CDP Europe AISBL, founded in 2000. CDP runs a global environmental disclosure system supporting companies, cities, states and regions to measure and manage their risks and opportunities on climate change, water security and deforestation. CDP takes the information supplied in its annual reporting process and scores companies and cities based on their performance progress using an independent scoring methodology. COP: The Communication on Progress is intended as a mechanism to inform, in a standardized format of an annual report, company stakeholders (e.g., investors, consumers, civil society, and governments) on progress made in implementing the Ten Principles of the United Nations Global Compact. CSR Europe: The leading European business network for Corporate Sustainability and Responsibility. The network supports businesses and industry sectors in their transformation and collaboration towards practical solutions and sustainable growth. The ambition is the systemic change; therefore, following the SDGs, the network seeks to co-build with the European leaders and stakeholders an overarching strategy for a Sustainable Europe 2030. ECRA: The European Cement Research Academy (ECRA) was founded in 2003 supports and conducts research activities on the production of cement and its application in concrete aiming at advancing innovation within the context of climate change mitigation and sustainable construction. GCCA: The Global Cement and Concrete Association is a CEO-led industry initiative established in 2018, representing the global voice of the sector. The GCCA took over the role of the former CSI Project of the WBCSD and has carried, since 1 January 2019, the work programs and sustainable development activities of the CSI, with key objectives to develop and strengthen the sector’s contribution to sustainable construction across the value chain, and to foster innovation in collaboration with industry, associations and key experts-stakeholders. IBAT: The Integrated Biodiversity Assessment Tool, developed through a partnership of global conservation leaders including BirdLife International, Conservation International and IUCN, provides key decision-makers with access to critical information on biodiversity priority sites, to inform decision-making processes and address potential impacts. IIRC: The International Integrated Reporting Council is a global coalition of regulators, investors, companies, standard setters, the accounting profession, academia and NGOs. The coalition promotes communication about value creation as the next step in the evolution of corporate reporting. RECODE: Pilot project where TITAN engages with the European Union and collaborates with international stakeholders from the industry and academia, the aim being to advance in climate change-related innovation, and explore technical solutions for reducing CO₂ emissions, while developing more sustainable products. SASB: The Sustainability Accounting Standards Board is an independent standards board that is accountable for the due process, outcomes, and ratiﬁcation of its standards, the application of which (being the SASB’s mission) is to help businesses around the world identify, manage and report on sustainability topics that matter most to their investors. SBTi: The SBTi is a partnership between CDP, the United Nations Global Compact, World Resources Institute (WRI) and the World Wide Fund for Nature (WWF). SBTi aim is to mobilize companies to take the lead on urgent climate actions and guide them in setting science-based targets that could limit global warming to 1.5oC, achieve a net-zero world by no later than 2050 and prevent the worst effects of climate change. SDGs: The Sustainable Development Goals are a collection of 17 global goals designed to be a “blueprint to achieve a better and more sustainable future for all”. The SDGs, set in 2015 by the United Nations General Assembly and intended to be achieved by the year 2030, are part of UN Resolution 70/1, the 2030 Agenda. MANAGEMENT REPORT 233 INTEGRATED ANNUAL REPORT 2021 TITAN CEMENT GROUP TAXONOMY: The EU taxonomy is a classiﬁcation system, establishing a list of environmentally sustainable economic activities. It could play an important role helping the EU scale up sustainable investment and implement the European green deal. TCFD: Established by the Financial Sustainability Board in 2016, the Task Force on Climate-related Financial Disclosures is a market- driven coalition with the mission to develop voluntary, consistent climate-related ﬁnancial risk disclosures for use by companies in providing information to stakeholders (like investors, lenders and insurers). UNCTAD: The United Nations Conference on Trade and Development is a United Nations body responsible for dealing with economic and sustainable development issues with a focus on trade, ﬁnance, investment and technology, in particular for helping developing countries to participate equitably in the global economy. UNGC: The United Nations Global Compact is a voluntary initiative based on CEO commitments to implement universal sustainability principles (‘Ten Principles’) and to take steps to support UN goals. ‘Ten Principles’ are derived from the Universal Declaration of Human Rights, the International Labour Organization’s Declaration on Fundamental Principles and Rights at Work, the Rio Declaration on Environment and Development, and the United Nations Convention Against Corruption. WBCSD: The World Business Council for Sustainable Development is a global, CEO-led organization of over 200 leading businesses working together to accelerate the transition to a sustainable world, helping member companies to become more successful and sustainable by focusing on the maximum positive impact for shareholders, the environment and societies. WRI: The World Resources Institute is a global, independent, non-partisan and non-proﬁt research organization, with mission to move human society to live in ways that protect Earth’s environment and its capacity to provide for the needs and aspirations of current and future generations. Titan Cement International S.A. Rue de la Loi 23, 1040 Brussels, Belgium Tel.: (+32) 27 26 8058 www.titan-cement.com

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