Annual Report • Apr 20, 2022
Annual Report
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Untitled Annual Report 2021 @Baltic c onnec tor Oratori senesceret Aquae Sulis, ut cathedras corrumperet chirographi. Umbraculi fermentet rures. Gulosus ossifragi suffragarit quadrupei. Augustus vix comiter conubium santet umbraculi. Oratori spinosus suffragarit Medusa. Ossifragi A. Viohalco 2 B. Message from the President of the Board of Directors 4 C. Business segments 6 D. Financial highlights 2021 10 E. Business segments’ review 16 F. Subsequent events 66 G. Risks and uncertainties 68 H. Non-nancial information report 72 I. Corporate governance statement 92 J. Appendix – Alternative Performance Measures (APMs) 106 K. EU Taxonomy Reporting Principles 110 L. Consolidated nancial statements 2021 and Auditor’s report 115 M. Declaration of responsible persons 194 N. Condensed statutory balance sheet and income statement 195 O. Glossary 197 Table of contents VIOHALCO | ANNUAL REPORT 2021 2 A. Viohalco Viohalco S.A. is listed on Euronext Brussels (VIO) and the Athens Stock Exchange (BIO). Commercial network in 21 countries Products distributed in 105 countries 3 ElvalHalcor S.A. a subsidiary of Viohalco, is listed on the Athens Stock Exchange (ELHA). Viohalco S.A. (‘Viohalco’) is the Belgium-based holding company of leading metal processing companies, which sustainably manufacture aluminium, copper, cables, steel and steel pipes products. Viohalco companies supply high-quality, innovative products to a diverse range of markets, including building and construction, packaging (rigid, semi-rigid and exible), transportation (automotive, shipbuilding and rail), energy and power networks (oshore energy, utilities and power grids, renewable energy, gas and liquid fuels), heating, ventilation, air conditioning and refrigeration (‘HVAC&R’), water supply, telecom mu - nications and printing, along with various industrial applications. Viohalco’s dedicated research, development and innovation (‘R&D&I’) and technology segment focuses on product innovation, industrial research, technological development, engineering applications and ERP application services, to ensure its companies maintain superior product and service quality. Viohalco is also active in the real estate sector, predominantly in Greece, mainly through a leading Real Estate Investment Company (‘REIC’). Companies in the real estate segment also provide a wide range of additional real estate, property and facility management services to Viohalco subsidiaries. Production facilities across Greece, Bulgaria, the United Kingdom, Romania, North Macedonia and participations in production facilities in Turkey, Russia and the Netherlands are supported by a strong marketing and sales network. This comprises commercial subsidiaries, agents and distributors, which enable the Viohalco companies to provide comprehensive customer support on a global scale. Across all segments, Viohalco companies oer products and services that closely align with current global sustainability trends. This reects their ability to meet the evolving needs and commitments of customers, and their commitment as responsible corporate citizens to operate in a sustainable manner. Such trends include a growing commitment to a low carbon, circular economy, reected in rising demand for easily recyclable products, with high recycled content; a clear transition from fossil-fuel consumption to climate neutrality, through the use of renewable energy sources; sustainable urbanisation reected in the rise of energy-ecient buildings and e-mobility; and ongoing technological advancements. A signicant portion of Viohalco companies’ products and solutions caters directly to these trends. These include recyclable aluminium packaging made from secondary raw materials, lightweight and energy- ecient aluminium products, copper products with high recycled content for use in energy eciency and digital applications, circular construction steel products, cables to facilitate the transportation of green energy, steel pipes to support the energy transition, and the development of more environmentally-friendly buildings, among others. Cenergy Holdings S.A. a subsidiary of Viohalco, is listed on Euronext Brussels and the Athens Stock Exchange (CENER). VIOHALCO | ANNUAL REPORT 2021 4 B. Message from the President of the Board of Directors Viohalco companies delivered strong growth and robust nancial performance in 2021, as a testament of their ability to align product oerings with the sustainability megatrends, their measured approach to managing the businesses by optimising utilisation of assets and the implementation of disciplined cost control to drive operating eciencies. Viohalco achieved consolidated revenue for the year of EUR 5,375 million, compared with EUR 3,850 million in 2020. Consolidated adjusted EBITDA (a-EBITDA) amounted to EUR 426 million in 2021, up from EUR 294 million in 2020, and consolidated prot before income tax amounted to EUR 276 million, compared to EUR 59 million in 2020. The aluminium segment delivered growth during the year, responding swiftly to improving market demand and strategically operating in sectors that facilitate the energy transition and climate change mitigation. Additional production capacity secured the previous year, through the installation of a new four- stand tandem hot rolling mill, was effectively utilised strengthening Elval’s operational advantage and enabling the business to secure an optimal product mix. Furthermore, the second phase of the segment’s EUR 150 million investment programme was successfully initiated, with the development, among others, of a six-high cold rolling mill and new automated laquering line progressing. Improved market sentiment drove sales volumes in the copper segment, particularly for alloy rods and tubes and at-rolled products, while improved availability of scrap facilitated an increase in the protability of Halcor, the copper and alloys extrusion division of ElvalΗalcor. Soa Med’s ve-year strategic growth plan remained on track during the year and is expected to be further supported by market conditions which are due to remain favourable in 2022, especially for automotive connectors and energy distribution. The strength of the cables segment was reected by solid growth across both its projects and products businesses during the period. Hellenic Cables continued to tender throughout the year and was awarded several new projects in the oshore wind and interconnections markets, as well as other contracts, capitalising on its ability to expand into new markets, while strengthening positions in existing markets. Looking ahead, positive market momentum in the oshore wind sector, the segment’s proven ability to expand into new markets and a strong backlog of projects at the end of the year, signals solid growth in the short term. Finally, the segment intends to further leverage its market-leading expertise by further exploring opportunities within the submarine cable industry and the oshore wind sector. 2021 was a challenging year for the steel pipes segment. The energy market rebounded strongly, following a signicant decline in energy consumption and prices during the pandemic. This, coupled with continued postponement and cancellation of multiple fossil fuel distribution projects, led to elevated energy process. Several pipeline projects restarted in the second half of the year however, with natural gas remaining the main intermediate fuel in the global energy transition. Throughout the year, the company has also been leading the technological developments for pipelines certied to transport up to 100% hydrogen, following its long R&D programme and innovation strategy, oil and gas company qualications and geographical dierentiation to enhance competitiveness, including a roadmap towards the digitalisation of its processes. Despite challenges, a strong backlog of projects gives the segment cause for optimism in the near term. In the steel segment, building on gradual improvements in the second half of 2020, uplift in demand from the construction sector coupled with the segment’s dominant market position in Greece, the Balkans and Cyprus, led to a remarkable performance compared with the previous year. The benefits of cost reduction efforts initiated in 2020 began to flow through, which, together with better business performance, led to significantly improved profitability for 2021. During 2021, Sidenor was the first steel producer in Greece awarded with the Environmental Product Declaration (EPD) for SD concrete reinforcing steel products (bars and coils, meshes and prefabricated cages) manufactured in Sovel (Almyros, Greece). EPD offers reliable and quantitative information regarding to product’s life cycle and is a significant step towards a more sustainable future. Recent investments to new technologies and innovative solutions have long-term strategic value, strengthen our product portfolio with high quality products, further reduce cost and gradual reduce the environmental footprint of our operations. Covid-19 pandemic-related relief measures relating to commercial real estate brought in by the Greek government in 2020 remained in force throughout the rst semester of the year, mainly impacting the hospitality and retail sectors. This continued to have an adverse eect on income at Noval Property, Viohalco’s main real estate company. However, the diversity of the segment’s portfolio, coupled with the nancial strength of its tenants and active asset management, enabled Noval Property to avoid arrears in rent or service charges in the period. It continued its investment programme during 2021 and also initiated new projects. In December 2021, Noval Property issued its rst Green Bond Loan of EUR 120 million. The Green Bond Loan, which is listed in the Category of Fixed Income Securities at the Regulated Market of the Athens Stock Exchange, is aligned with the International Capital VIOHALCO | ANNUAL REPORT 2021 5 Market Association’s (‘ICMA’) Green Bond Principles and will support the decarbonisation of the building sector in Greece. The issuance supports Noval Property’s scaling strategy by providing funding to pursue new environmentally accredited investments and sustainable property developments, while diversifying its funding sources and optimising its capital structure. The year 2021 was also an important year for Viohalco and its subsidiaries in the context of sustainability, as the company created a comprehensive framework under which all the subsidiaries are required to operate. The company created an Environment, Social and Governance Roadmap (“ESG Roadmap”) by assessing related risks and opportunities and creating an extensive monitoring system to assess progress over time, while setting improvement targets for the most material issues. While it is too early to ascertain the full impact of the troubling events in eastern Europe on Viohalco and its companies, Viohalco companies’ overall exposure to Ukraine and Russia is minimal and no immediate material impact is expected. The companies have, of course, taken action to mitigate potential disruption and are monitoring the situation closely. Should the crisis be protracted, compounding issues such as ination and rising energy prices, Viohalco will reassess and amend its approach accordingly. As for the Covid-19 pandemic, despite reaching an inection point in its trajectory some uncertainty persists. We expect this to continue to impact Viohalco and its businesses, albeit to a lesser extent than in 2020 and 2021. Overall, however, we expect uptrends in demand across Viohalco’s product portfolio to continue as normal business operations resume at pace. In the context of the worldwide climate emergency, Viohalco companies are increasingly well-positioned to benet from sustainability trends, which will signicantly increase demand for circular products. Such products, which are by their nature easily recyclable, produced with high recycled content, and have a low carbon production footprint, constitute a signicant proportion of Viohalco’s oering. We continue to deploy resources and investments to ensure that our product and service oering remains at the forefront of our industries, while continuing to cater to these trends. Across the segments, we continue to take a disciplined approach to executing our strategy. We are investing in optimising production capacities and extending our product and service oering, seeking entry into new markets and solidifying our position in existing markets. At the same time, the companies maintain a customer- centric approach to marketing and product development and drive operating eciencies by optimising the utilisation of assets and maintaining disciplined cost control. Viohalco companies continue to prioritise their people, by not only continuing to safeguard their health and wellbeing across all businesses, but also through investment in employee development and training, and new talent. In addition, of paramount importance to all our companies is steadfast adherence to sound business practices, operating in an ethical and responsible manner, and continuously improving their environmental footprint. Leveraging the strength of our diversied business model and our commitment to our strategic aims, we are condent that Viohalco and its companies will continue to act with agility to turn challenges into opportunities for growth. Nikolaos Stassinopoulos President of the Board of Directors VIOHALCO | ANNUAL REPORT 2021 6 C. Business segments Viohalco operates under the following organizational structure, which comprises seven business segments: Aluminium ElvalHalcor Elval - Aluminium rolling division Elval Colour Etem Bridgnorth Aluminium Etem Bulgaria Copper ElvalHalcor Halcor - Copper and alloys extrusion division Sofia Med Cablel Wires Epirus Metalworks Steel pipes CPW America Corinth Pipeworks Cables Fulgor Hellenic Cables Icme Ecab Steel Sovel Sidenor Steel Industry Stomana Industry Dojran Steel R&D&I and Technology Elkeme Praksys Teka Systems Real estate Noval Property Steelmet Property Services Symetal VIOHALCO | ANNUAL REPORT 2021 7 Aluminium The aluminium segment operates through its aluminium rolling division (‘Elval’) and the subsidiaries Symetal S.A. (‘Symetal’), Elval Colour S.A. (‘Elval Colour’), Vepal S.A. (‘Vepal’), Bridgnorth Aluminium Ltd (‘Bridgnorth Aluminium’), Etem Bulgaria S.A. (‘Etem Bulgaria’) and Etem S.A. (‘Etem’). The segment produces at rolled and extruded products and solutions for a wide range of markets including packaging, transportation, building and construction, HVAC&R, printing, energy, industrial and engineering applications. Copper Through its copper and alloys extrusion division (‘Halcor’), and the copper segment’s subsidiaries (Sofia Med S.A. ('Sofia Med'), Epirus Metalworks S.A. ('Epirus Metalworks'), Cablel Wires S.A. ('Cablel Wires') and the NedZink BV and HC Isitma joint ventures), manufactures a range of copper, brass and high- performance copper alloys products, as well as titanium zinc products. The copper tubes division has a long history and strong track record of developing products that strengthen its global commercial reach. Halcor and the copper segment subsidiaries provide innovative and value-adding, solutions. Major product categories include copper tubes and rolled and extruded copper alloy products for a wide range of applications, including plumbing, HVAC&R, renewable energy, construction, engineering, automotive and industrial products, fish farming, all types of coin blanks and enamelled wires. Cables Viohalco’s cables segment comprises three companies: Hellenic Cables S.A. Hellenic Cables Industry (‘Hellenic Cables’), its Greece- based subsidiary Fulgor S.A. (‘Fulgor’), and Romania-based Icme Ecab S.A. (‘Icme Ecab’), hereafter collectively referred to as ‘Hellenic Cables companies’. The Hellenic Cables companies manufacture land and submarine power cables, telecommunication cables and compounds. Combined, they are the largest cable producer in Greece and Southeastern Europe, exporting to more than 50 countries. A key advantage of the Hellenic Cables companies is their ability to provide turnkey solutions to customers. Steel pipes With a manufacturing plant in Greece and extensive expertise in delivering complex projects on a global scale, Corinth Pipeworks S.A. (‘Corinth Pipeworks’) is a supplier of choice of steel pipes and hollow sections to the energy and construction industries. Corinth Pipeworks’ three main product categories are: • steel pipes for onshore/oshore pipelines for gas and liquid fuel, CO 2 and hydrogen transportation, which are manufactured in either Corinth Pipeworks’ high frequency induction welding unit (‘HFW’), the helically-submerged arc welding unit (‘HSAW’), or the longitudinal submerged arc welding unit (‘LSAW/JCOE’); • casing steel pipes used in exploratory drillings (‘OCTG’); • hollow structural sections used in the construction sector. Corinth Pipeworks has extensive experience and a strong track record of implementing complex projects for the energy sector worldwide, both onshore and oshore. The company is an approved supplier to major oil and gas companies and to engineering, procurement and construction (“EPC”) contractors. The Company is ready for the energy shift and is committed in making a positive contribution to the energy transition and to tackle climate change, through new technological solutions that allow the increasing use of renewable sources in the energy mix and through the development of innovative products and the reduction of the carbon footprint of our production activities. Steel Sidenor Steel Industry S.A. (‘Sidenor Steel Industry’), Stomana Industry S.A. (‘Stomana Industry’) and their subsidiaries are leading producers of steel products in Southeastern Europe. The steel segment companies have signicant expertise and more than 60 years of experience in the manufacture and distribution of steel products, along with an extensive product portfolio which includes long, at and downstream steel products. The steel segment companies produce a range of value-added products and solutions for industries, including building and construction, mechanical engineering, shipbuilding, road and rail, automotive, as well as mining and tunneling applications. To achieve the optimum balance between operational, commercial exibility and productivity, the steel segment has adopted the following operational structure: • mini-mills; • downstream operations for steel product processing; and • sales and distribution. 8 9 Real estate Viohalco, through its leading Real Estate Investment Company (‘REIC’), Noval Property, creates value by investing in and commercially developing oce, logistics, retail, hospitality and residential buildings in Greece and abroad, and by providing a wide range of real estate services to its subsidiaries, through Steelmet Property Services S.A. In October 2019, Noval Property became a Real Estate Investment Company (‘REIC’) and an internally managed Alternative Investment Fund, following the award of the necessary licenses by the Hellenic Capital Markets Commission. It is already the second largest Greek REIC in terms of property portfolio value. In December 2021, Noval Property successfully issued a Green Bond Loan of EUR 120 million on the Athens Stock Exchange. Noval Property’s portfolio is diversified and comprises 44 high quality properties, mainly located in Greece and selectively, in Bulgaria. It comprises office buildings, shopping centres, logistics and hotels, with a total built-up area of c. 453,000 sq.m. Steelmet Property Services supports Viohalco and its subsidiary companies by providing a wide range of centralised real estate, property and facility management services. R&D&I and Technology Viohalco’s portfolio includes dedicated research, development and innovation (‘R&D&I’) companies and centres within its subsidiaries. These centres support sustainable growth through the development of innovative and high value-added products, ecient solutions for the optimization of industrial and business processes and the research into the environmental performance of their manufacturing plants. Notes: - Cenergy Holdings S.A. (‘Cenergy Holdings’) was founded in 2016, following a cross-border merger by absorption of Corinth Pipeworks Holdings S.A. and Hellenic Cables S.A. Holdings Société Anonyme. Cenergy Holdings is listed on Euronext Brussels and the Athens Stock Exchange. - In December 2017, the merger by absorption of Elval by Halcor was concluded, while the latter was renamed to ElvalHalcor Hellenic Copper and Aluminium Industry S.A. (‘ElvalHalcor’). ElvalHalcor is listed on the Athens Stock Exchange. D. Financial highlights 2021 Viohalco companies have clearly articulated growth strategies. Despite operating in dierent market segments, they share common strategic goals which aim to: • optimise production capacity and product oering through continuous innovation; • increase penetration of existing and new markets; • maintain a customer-oriented approach for marketing and product development; • drive operating eciencies by optimising asset utilisation and cost control; and • operate in a sustainable and responsible manner. The companies have faced a signicant number of external challenges in recent years, including economic uncertainty in key operating markets, metal price uctuations, depressed demand in energy markets and the wider eects of the Covid-19 pandemic. Despite this, they have maintained a disciplined focus on improving operational performance, implementing a number of initiatives in support of this. Most notably, they have invested heavily in new technologies, R&D&I and upgrading existing facilities, and importantly, have also invested in personnel development, training and safety. These investments have enabled the companies to redene and improve their product and service oerings across key markets, resulting in the award of numerous signicant projects. 11 Consolidated revenue amounted to EUR 5,375 million, up 40% versus EUR 3,850 million in 2020. Robust consolidated EBITDA reached EUR 514 million, an increase of 80% versus 2020. Consolidated adjusted EBITDA increased by 45% to EUR 426 million (2020: EUR 294 million). Consolidated prot before income tax amounted to EUR 276 million, compared to EUR 59 million in 2020. Continued investment in capacity optimization combined with prudent cost management drove efciency and supported improved protability. Ongoing focus on developing circular products and services that cater to demand driven by rising sustainability megatrends. VIOHALCO | ANNUAL REPORT 2021 12 Overview In 2021, Viohalco reported strong revenue and protability with many of its companies delivering impressive growth, despite continued challenges. Viohalco’s companies continued to optimise asset utilization, while implementing prudent cost controls to drive operating eciencies. The health and wellbeing of Viohalco companies’ employees remained a top priority, and measures to ensure that all employees and other stakeholders stayed safe and healthy remained in force. In the aluminium segment, the rolling division of ElvalHalcor, Elval, delivered growth during the year responding promptly to improving market demand and strategically supporting sectors that facilitate the energy transition and climate change mitigation. Additional production capacity, provided by the newly installed four-stand tandem hot rolling mill, strengthened Elval’s operational advantage and optimized its product mix. The EUR 150 million second phase of the investment programme, which includes among others the six-high cold rolling mill and the new lacquering line, is progressing. Profitability at Symetal improved as the company adapted to market trends, increasing sales of flexible packaging and lidding foil as demand from the U.S. and European markets rose, and absorbed cost pressures related to energy and raw material price increases. Meanwhile, Etem Bulgaria’s automotive division launched its new BMW project and finalized related investment projects in the pipeline, with the industrial part of the business experiencing significant growth. Demand at Bridgnorth Aluminium returned to pre-pandemic levels which positively impacted volumes. While the company continued to develop its product mix during the year, cost pressures due to inflation resulted in a weaker financial performance. Improved market sentiment drove increases in volume in the copper segment, with strong demand across most markets at the start of year continuing throughout 2021. The majority of the copper segment’s companies performed well, with increased volume and protability. Halcor, the copper and alloys extrusion division of ElvalΗalcor, achieved a marginal increase in copper tubes sales, but signicant growth in sales of alloy rods and tubes which fully recovered in volumes and protability. Soa Med’s ve-year strategic growth plan remained on track during the year, as sales in both copper and copper alloy rolled products and extruded copper products continued to grow for another year. Healthy demand for enameled wires drove increased sales volumes of Cablel Wires. The performance of the cables segment was very strong, reecting solid growth across both the projects and products businesses. All plants maintained a full production schedule throughout the year resulting in further growth in protability. Hellenic Cables continued its tendering eorts and was awarded several new projects in the oshore wind and interconnections markets, along with frame contracts from major transmission system operators (TSOs). Sales volumes of the products business unit increased as a result of an upturn in demand and the unit’s successful commercial strategy. Investment in Hellenic Cables’ submarine plant in Corinth to expand its inter-array cables capacity continued during the year and is almost complete. By the end of the year, the order backlog of the segment exceeded EUR 650 million. VIOHALCO | ANNUAL REPORT 2021 13 The steel pipes segment experienced a challenging year. A recovery in energy consumption from depressed levels during the pandemic, coupled with reduced supply capacity because of the postponement and cancellation of multiple fossil-fuel distribution projects, led to exceptionally high energy prices. In the second half of 2021, however, several pipeline projects resumed to facilitate the transfer of natural gas, the key intermediate fuel in the global energy transition. Initiatives to enhance Corinth Pipeworks’ competitive advantage continued, including the delivery of a programme of major energy company qualications and the development of pipelines certied to transport up to 100% hydrogen. Finally, at the end of the year, the backlog increased reaching EUR 350 million. The steel segment experienced a gradual uplift in demand during the year and maintained its dominant market position in Greece, the Balkans and Cyprus. The combination of these factors led to a remarkable performance for the year which, coupled with the emerging benets of cost reduction eorts initiated in 2020, resulted in signicantly improved protability. During the year, Sidenor was the rst steel producer in Greece to be awarded the Environmental Product Declaration (EPD) for SD concrete reinforcing steel products. This certication provides important information on a product’s life cycle, vital to improving sustainability in production. In addition, recent investments in new technologies and innovative solutions are expected to deliver long-term strategic value, strengthen the segment’s product portfolio, further reduce costs and gradually limit the environmental footprint of operations. In the real estate segment, Noval Property continued its invest - ment programme during 2021. Among other projects, the expansion of the River West shopping centre was completed, boosting the value of investment property and increasing rental incomes for the REIC. In addition, the fourth quarter of 2021 saw Noval Property acquire (in a joint venture with a real estate fund) a prime plot of land in Athens, where a large-scale environmentally friendly oce complex will be developed. Ιn November 2021, ElvalHalcor successfully issued a EUR 250 million Bond Loan. In December 2021, Noval Property successfully issued a Green Bond Loan of EUR 120 million. Both bonds have a seven-year term and are listed on the Athens Stock Exchange. Finally, in 2021 Viohalco developed a comprehensive plan and a roadmap for its subsidiaries to monitor all environmental, social and governance risks. This includes tracking a broad range of performance indicators to measure progress and risk mitigation. Furthermore, Viohalco subsidiaries focused on increasing the share of recycled metals used in raw material input, as well as reducing the companies’ operational carbon footprint to help their customers reach their own sustainability goals. VIOHALCO | ANNUAL REPORT 2021 14 Financial overview Summary consolidated statement of prot or loss Amounts in EUR thousands 2021 2020 Revenue 5,374,512 3,850,077 Gross prot 590,645 349,043 EBITDA 514,285 285,340 a-EBITDA 426,017 294,463 EBIT 374,396 153,321 a-EBIT 286,128 162,443 Net nance cost -95,882 -92,307 Prot before tax 275,984 59,273 Prot for the period 219,989 32,771 Prot attributable to owners of the Company 194,994 21,377 * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision ‘Attributing Benet to Periods of Service’. Viohalco’s consolidated revenue for 2021 was EUR 5,375 million, up 40% compared to 2020 (EUR 3,850 million), reecting an upturn in demand across almost all segments and the rise in metal prices. Consolidated a-EBITDA increased by 45% to EUR 426 million for 2021 (2020: EUR 294 million). Net nance cost stood at EUR 95.9 million (2020: EUR 92.3 million). Viohalco’s consolidated prot before income tax for the period amounted to EUR 276 million, compared to EUR 59 million in 2020, mainly attributable to the noticeable recovery of the steel segment, the solid growth across both the projects and the products business of the cables segment and the continuous rise in demand of the aluminium and copper segments. Summary consolidated statement of nancial position Amounts in EUR thousands 31/12/2021 31/12/2020 Fixed & intangible assets 2,446,354 2,302,552 Other non-current assets 74,450 75,126 Non-current assets 2,520,805 2,377,678 Inventory 1,469,840 1,074,589 Trade and other receivables (incl. contract assets) 724,907 515,976 Cash and cash equivalents 503,267 219,161 Other current assets 19,602 10,109 Current assets 2,717,616 1,819,835 Total assets 5,238,420 4,197,513 Equity 1,655,594 1,395,253 Loans and borrowings 1,294,093 1,001,986 Other non-current liabilities 222,987 215,586 Non-current liabilities 1,517,080 1,217,572 Loans and borrowings 848,145 746,010 Trade and other payables (incl. contract liabilities) 1,145,287 807,130 Other current liabilities 72,314 31,548 Current liabilities 2,065,746 1,584,687 Total equity and liabilities 5,238,420 4,197,513 * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision ‘Attributing Benet to Periods of Service’. Capital expenditure for the period amounted to EUR 266 million (2020: EUR 285 million), mainly attributable to the aluminium segment’s investment programme (including the advanced six-high cold rolling mill and automated lacquering line), investments in Hellenic Cables’ submarine cables production plant in Corinth, and infrastructure improvement investment in the steel segment. Working capital increased by 30%, or EUR 235 million, compared to 31 December 2020, as a result of the increases in metal prices and sales volumes. Viohalco companies’ net debt increased to EUR 1,684 million (31 December 2020: EUR 1,581 million) before IFRS 16 adjustment, mainly attributed to the increase in working capital. After adjusting for IFRS 16, net debt amounted to EUR 1,664 (31 December 2020: EUR 1,560 million). VIOHALCO | ANNUAL REPORT 2021 15 Performance by business segment Amounts in EUR thousands Revenue EBITDA a-EBITDA EBIT EBT Segments 2021 2020 2021 2020 2021 2020 2021 2020 2021 2020 Aluminium 1,677,918 1,167,735 138,327 89,875 122,508 94,968 79,234 35,899 59,556 21,529 Copper 1,563,775 1,066,014 94,338 47,680 60,465 52,084 77,672 32,413 58,979 16,000 Cables 757,170 568,615 84,287 72,046 89,623 81,495 67,629 56,929 45,754 35,549 Steel pipes 225,067 304,824 555 21,106 14,141 22,020 -8,305 12,251 -15,407 1,575 Steel 1,067,782 677,939 160,316 29,917 123,654 33,603 134,716 826 108,943 -24,776 Real estate 18,667 10,041 27,921 20,409 6,618 6,511 19,144 14,463 15,347 10,511 Other activities 64,134 54,909 8,541 4,308 9,008 3,781 4,307 540 2,813 -1,114 Total 5,374,512 3,850,077 514,285 285,340 426,017 294,463 374,396 153,321 275,984 59,273 * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision ‘Attributing Benet to Periods of Service’. Outlook In 2022, Eurozone ination, rising energy prices and geopolitical tension are expected to aect the business during the year. However, as the pandemic recedes, wider market conditions are expected to be increasingly favourable with recovery across a number of markets, including the automotive, industrial and construction sectors, among others. Encouraging upward trends in demand for products and services across Viohalco’s segments are evident. While it is too early to ascertain the full impact of the troubling events in eastern Europe on Viohalco and its companies, overall exposure to Ukraine and Russia is minimal and, as such, no immediate material impact is expected. Viohalco and its companies have taken action to any mitigate potential disruption and are monitoring the situation closely. Should the crisis be prolonged compounding issues, such as ination and rising energy prices, Viohalco will reassess and amend its approach accordingly. Viohalco companies are very well-positioned to benet from sustainability trends which increase demand for low carbon products. Such products, which are also highly recyclable, are produced with high recycled content, contributing to a circular economy and replacing primary metals with much higher carbon content, make up a signicant proportion of Viohalco’s oering and are expected to be in high demand during 2022 and beyond. Viohalco will continue to take a dynamic approach to executing its strategy, which is already delivering tangible results. Its companies plan to invest further in optimizing production capacities and will maintain a sharp focus on innovation to extend their product and service oering, enhancing their competitive advantage. On an ongoing basis, Viohalco companies will seek to enter new markets and solidify positioning in existing markets, maintaining a customer-oriented approach to marketing and product development. Furthermore, they will continue to prioritize their people, safeguarding their health and wellbeing, and investing in employee development, training, and attracting new talent. Finally, Viohalco companies maintain their strong commitment to sustainability, as they continue to support the energy transition and endeavor to capture global megatrends. Revenue in EUR million % per segment a-EBITDA in EUR million % per segment 3,721 4,406 4,198 3,850 5,375 284 313 303 294 426 2017 2018 2019 2020 2021 2017 2018 2019 2020 2021 Aluminium Copper Cables Steel Steel pipes Real estate & Other 29% 14% 20% 4% 2% 31% Aluminium Copper Cables Steel Steel pipes Real estate & Other 14% 21% 29% 3% 4% 29% 16 E. Business segments’ review 17 Aluminium Revenue (EUR thousands) 2021: 1,677,918 2020: 1,167,735 EBITDA (EUR thousands) 2021 : 138,327 2020: 89,875 a-EBITDA (EUR thousands) 2021 : 122,508 2020: 94,968 18 Aluminium segment Activities Viohalco’s aluminium segment, through its aluminium rolling division (‘Elval’), and its subsidiaries Symetal, Elval Colour, Vepal, Bridgnorth Aluminium, Etem Bulgaria and Etem, manufacture a variety of aluminium rolling and extrusion products for a wide range of markets and applications. The aluminium segment offers rolled products and solutions for: • Packaging (rigid and exible packaging solutions, beverage and food cans, closures, household products, pharmaceutical and aseptic packaging foil); • Transportation (automotive, marine, road and rail industries, as well as the HVAC&R sector); • Construction (mill nish and coated aluminium sheets and coils for the entire building envelope, such as etalbond® aluminium composite panel, orofe® and Ydoral® coated coils, sheets and strips for roong applications and rain gutters); • Industrial applications (aluminium sheets, coils and circles for general engineering, renewable energy and household applications); • Lithographic coils used as a substrate in the manufacture of printing plates; • Extruded products; • Architectural systems (aluminium systems for doors, windows, dynamic building facades, curtain wall systems, interior applications, corporate ID applications, sun shading systems, rolling shutters, ventilated façades systems and security systems); • Industrial aluminium applications (aluminium proles and processed hard alloy bars for industrial use, general engineering applications, building applications, energy applications and transportation); • Automotive applications (extruded aluminium proles and parts that have undergone special tooling and machining and are used in car chassis, suspension systems and doors and decorative aluminium proles for roof railings, aluminium composite panels for special automotive applications). Aluminium ElvalHalcor Elval - Aluminium rolling division Elval Colour Etem Bridgnorth Aluminium Etem Bulgaria Symetal VIOHALCO | ANNUAL REPORT 2021 19 ■ Production facilities Viohalco’s aluminium companies operate the following state-of-the-art production facilities: Elval rolling plant (Oinofyta, Greece) Anoxal (Agios Thomas, Greece) Vepal (Thiva, Greece) Elval Colour (Agios Thomas, Greece) Symetal aluminium foil rolling plant (Oinofyta - Viotia, Greece) Symetal aluminium foil converting plant (Mandra - Attica, Greece) Viomal (Nea Artaki - Evia, Greece) Bridgnorth Aluminium (Bridgnorth, UK) Etem – Gestamp Bulgaria (Soa, Bulgaria) Etem (Magoula- Attica, Greece) 375,000 tons 50,500 tons 40,500 tons 52,000 tons 26,000 tons 30 M meters 127,000 tons 30,000 tons 18,000 tons • The aluminium segment’s main production facility • Flat rolled aluminium products for contemporary applications in packaging, building and construction, sea, road and rail transportation, automotive, industrial, energy, cookware and HVAC&R markets • Recycling and casting aluminium • Manufacturing billets and slabs • Aluminium products for the construction, food and automotive industries • Extensive range of coated aluminium products and aluminium composite panels for facades • Extensive range of coated aluminium products and aluminium composite panels for facades • A series of advanced performance products that are dedicated to the improvement of the environmental ecacy on buildings, increase in the durability of building facades and roong while resulting in the reduction of their impact on the environment • Plain aluminium foil in a wide range of gauges and alloys for various usages such as exible and pharmaceutical packaging, food containers, automotive rechargeable batteries and various other technical applications (e.g. cable insulations and heat exchangers) • Conversion of aluminium foil into packaging applications • Aluminium foil coating and/or paper lamination for products used in food, pharmaceutical and tobacco industries • Aluminium rolling shutters for windows and garage doors • Fly screen systems • Pleated net production • Lithographic aluminium coils • Semi-nished aluminium coils • Electrical aluminium strip for transformer windings • Proles for industrial application in the transportation, automotive, shipbuilding, electronic and photovoltaic industries • Aluminium extrusion • Architectural systems • Industrial proles ISO 9001:2015, IATF 16949:2016, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018, ASI Performance Standard, ASI Chain of Custody Standard, AS9100D, ISO 27001:2013 Certied for the design, production and sale of aluminium rolled /mill nish painted products, and the manufacture of aluminium rolled products for the automotive industry and aviation industry. Certied plant for responsible production, sourcing and steward- ship of aluminium. Certied products, manufactured from material sourced and pro- cessed within responsible supply chains, Certied by all major classication societies as an approved man- ufacturer for shipbuilding products (ABS, BV, DNV.GL, KR, LRS, RINA and NK). ISO 9001:2015, ISO 14001:2015, ΙSO 45001:2018 ISO 9001:2015, ISO 14001:2015, ΙSO 45001:2018 ISO 9001:2015, ISO 14001:2015, ΙSO 45001:2018, ISO 50001:2018, ISO 14064:2018, ASI Performance Standard ISO 9001:2015, IATF 16949:2016, ISO 14001:2015, ISO 50001:2018, ISO 45001:2018 ISO 9001:2015, ISO 14001:2015, ISO 50001:2018, ISO 45001:2018, ISO 15378:2017, ISO 22000:2018, FSSC 22000 (v.5), FDA/IMS Cer- ticate, FSC® Chain of Custody, ASI Performance Standard Registered under the European Commission Eco-Management and Audit Scheme (EMAS) for environmental management. ISO 9001:2015, ISO 14001:2015 ISO 9001:2015, ISO 14001:2015, ΙSO 45001:2018, ASI Performance Standard (v2 2017) Accredited TIER 2 and TIER 1 automotive supplier. Certied for the production of crash-relevant aluminium proles. IATF 16949:2016, ISO 9001:2015, ISO 14001:2015, ΙSO 45001:2018, QUALICOAT, EN 15088:2005 ISO 9001:2015, ISO 45001:2018, ISO 14001:2015, EN 15088:2005, ATG, QUALICOAT SEASIDE CLASS, EPD (Environmental Product Declaration) Plant Production focus Annual Quality and management systems certications production capacity VIOHALCO | ANNUAL REPORT 2021 20 ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 1,677,918 1,167,735 Gross prot 147,873 100,469 Gross prot (%) 8.8% 8.6% EBITDA 138,327 89,875 EBITDA (%) 8.2% 7.7% a-EBITDA 122,508 94,968 a- EBITDA (%) 7.3% 8.1% EBIT 79,234 35,899 EBIT (%) 4.7% 3.1% a-EBIT 63,415 40,992 a-EBIT (%) 3.8% 3.5% Prot before tax 59,556 21,529 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. ■ 2021 Financial performance In 2021, revenue increased by 44% to EUR 1,678 million (2020: EUR 1,168 million), while prot before income tax amounted to EUR 60 million (2020: EUR 22 million). Elval, ElvalHalcor’s aluminium rolling division, recorded strong growth for the year, as a result of responding swiftly to increased market demand through an expanded product oering, and a robust and agile business model. Elval’s innovative solutions portfolio, primarily aimed at the packaging, transportation, and building and construction sectors, strategically supported market segments that facilitate the energy transition and climate change mitigation. Sales volumes at Elval increased signicantly by 19%, compared with 2020 (2021: 331k tons; 2020: 279k tons), mainly due to high demand in the packaging and transportation sectors during the year. The nal determination of antidumping duty (AD) in March 2021, which calculated a nal dumping margin of 0% for imports from ElvalHalcor, positively aected sales growth in the US market. Moreover, the combination of market optimism and increased demand in aluminium products led to a rapid rise in the London Metal Exchange’s (LME) average cash price per ton, amounting to EUR 2,101 in 2021 (2020: EUR 1,490). Additional production capacity provided by the newly installed four-stand tandem hot rolling mill, further strengthened Elval’s operational advantage and secured an optimum product mix. The EUR 150 million second phase of the investment programme, which includes among others the six-high cold rolling mill and the new automated lacquering line, is also progressing. Elval strengthened customer relationships across all geographies and capitalized on favourable market conditions and strong demand. It focused on embedding business practices and emerging technologies that support responsible production and sustainable supply chains and certied its production facility to the Aluminium Stewardship Initiative (ASI) Chain of Custody Standard. This complements the ASI Performance Standard, enabling Elval to oer customers ASI-certied aluminium products manufactured from material sourced and processed within responsible supply chains certied by the ASI. Elval also received AS9100D Standard certication, the International Quality Management System Standard for the Aviation, Space and Defense (AS&D) industry. Aluminium is the dominant metal in aerospace engineering and, with the AS9100D Standard certication, Elval can expand its solutions portfolio oering and pursue opportunities across the aerospace supply chain. At Symetal, while demand for aluminium foil products increased rapidly during the year, foil deliveries were adversely impacted by supply chain disruption, the increased cost of raw materials and rising energy prices. Having adapted successfully to market trends, however, Symetal increased protability by focusing on the sale of higher value- added products. The company increased sales of exible packaging and lidding foil, as demand from U.S. and European markets rose throughout the year, and successfully absorbed cost pressures related to energy and raw material price increases. Symetal also invested in the production of sustainable and high value-added products in response to global trends. The company initiated the installation of a new lacquering line in Mandra plant, Greece, which will commence operations in early 2022 and will gradually increase the production of lacquered foil products. Etem Bulgaria’s automotive division launched its new BMW project in 2021, while other projects in the pipeline entered nal preparation stages. The company’s sales were not impacted by the microchip supply crisis or other supply chain diculties during the year, and the industrial part of the business grew by approximately 38%, in terms of volume, compared with 2020. The company’s investment plan was supported by healthy free cash ow, despite increased energy costs and a rally in aluminium prices. The optimization of Etem Greece’s product portfolio, together with operational improvements and increased production at the Magoula plant, Greece, led to an improved performance in 2021. Etem Greece posted double-digit volume growth in its core architectural systems sales business, while its custom-tailored industrial proles sector also saw signicant volume growth. VIOHALCO | ANNUAL REPORT 2021 21 At Bridgnorth Aluminium, demand returned to pre-pandemic levels and the company recorded its second highest annual volume in its history. The company continued to develop its product range, supplied increased volumes to the rigid packaging and distribution sectors, and installed a coil levelling and sheeting line. Financially, Bridgnorth Aluminium faced inationary headwinds from signicant increases in LME premium, energy costs, freight, and packaging. ■ Outlook By processing aluminium, with its recyclable properties and numerous rolling possibilities, to manufacture products and provide solutions that enable a more sustainable future, Elval is strategically positioned to capture growth opportunities created by the global response to climate change, quest for energy eciency and the move to the circular economy. New investments, including the six- high cold rolling mill and the automated lacquering line, will further enhance product quality, securing the long-term capacity, eciency, and exibility to execute Elval’s strategic priorities. Going forward, Symetal remains focused on capitalising on demand for lacquered products and exible packaging foil, retaining market share in the exible packaging market, and increasing production of lacquered products once the new lacquering line investment is complete. In 2022, sales growth across both the automotive and industrial businesses is expected, following the expansion of production capacity and encouraging evidence of continued strong demand. Challenges remain, however, as energy costs and eurozone ination rates continue to rise. Looking ahead, Etem will remain focused on increasing its share of architectural proles in its home markets (the key Balkan countries) and will continue to implement strategic and operational improvements to enhance value. Looking ahead, Bridgnorth’s demand levels are expected to remain robust throughout 2022, and the company is well positioned to mitigate the effect of inflationary pressures. In addition, the company plans to further develop its product range and customer mix. Further information about the companies is available on their corporate websites: Elval: www.elval.com Symetal: www.symetal.gr Bridgnorth Aluminium: www.bridgnorthaluminium.co.uk Elval Colour: www.elval-colour.com Etem (Greece): www.etem.gr Viomal: www.viomal.com 22 23 Revenue (EUR thousands) 2021 : 1,563,775 2020: 1,066,014 EBITDA (EUR thousands) 2021 : 94,338 2020: 47,680 a-EBITDA (EUR thousands) 2021 : 60,465 2020: 52,084 Copper 24 Copper segment Activities The copper segment companies manufacture a wide range of copper, brass and high-performance copper alloys products, as well as titanium zinc products. The segment comprises a copper and alloys extrusion division (‘Halcor’), and its sub - sidiaries Soa Med S.A., Epirus Metalworks S.A., Cablel Wires S.A., and the NedZink BV and HC Isitma joint ventures. Halcor oers a diverse product range including copper and brass tubes, along with extruded and rolled products. It continuously seeks to grow its network and market share, both in Europe and the rest of the world, via its subsidiaries and commercial partners, and by entering new markets, investing in innovative sustainable technologies, and delivering high added-value products and solutions. The main product categories of Halcor and the copper segment are: • Copper tubes: Talos®, Talos® Ecutherm, Cusmart®, Talos® Plastic Coated, Talos® Gas, Talos® Med, Talos® ACR, Talos® ACR Inner Grooved, Talos® ACR Ecutherm™, Talos® ACR Ecutherm II, Talos® Geotherm, Talos® Ecutherm Solar, Talos® Solar Plus, Talos® ACR Linesets, Talos® Form, Talos® Sprinkler, Talos® XS, Talos® Plated, Talos® S80 and Talos® S60. • Rolled products: all shapes strips (including hot dip tinned surface),reoofing strips Doma® foil, sheets, Sheets for roofing Doma® discs, circles and plates in all alloys as copper, brass and special high performance alloys. • Extruded products: copper bus bars, rods, wires, proles, fabricated parts with tin and silver surface coating (electroplating) options, brass copper alloy rods and tubes, sections and wires, and UR30® copper alloy wire and net cages for aquaculture and sh farming. • Coin blanks: monochrome coin blanks, outer rings for bi- co lour blanks, inner blanks for bi-colour blanks, elect roplated bi-colour coin blanks and assembled bi- colour coin blanks in a wide range of colors and material combinations. • Rolled titanium zinc products: coils, strips, sheets, accessories. • Enamelled wires: round and rectangular copper wires, round aluminium wires, copper welding wires. Copper ElvalHalcor Halcor - Copper and alloys extrusion division Sofia Med Cablel Wires Epirus Metalworks VIOHALCO | ANNUAL REPORT 2021 25 ■ Production facilities The copper segment’s industrial base comprises the following manufacturing facilities: Plant Production focus Annual Quality and management systems certications production capacity Halcor foundry (Oinofyta, Greece) Halcor copper tubes (Oinofyta, Greece) Halcor extrusion for brass and copper alloy products (Oinofyta, Greece) Soa Med copper and copper alloys processing plant (Soa, Bulgaria) Cablel Wires enameled wires plant (Livadia, Greece) Epirus Metalworks (Epirus, Greece) HC Isitma (Gebze, Turkey) NedZink (Budel-Dorplein, the Netherlands) 235,000 tons 80,000 tons 40,000 tons 140,000 tons 8,500 tons copper and aluminium enameled wires 3,500 tons bare wires 10,000 tons 10,000,000 m. 36,000 tons • Semi-nished copper • Copper alloys • Brass products in billet and slab form Copper tubes for: • Building installations including plumbing, heating, oor heating and cooling, natural and interior gas networks, HVAC&R, solar system application, industrial networks and ttings. • HVAC&R applications including heating, ventilation, air-conditioning, refrigeration, heat exchangers, heat pump systems and ttings. • Renewable energy applications including solar panels, solar system networks, geothermal heating and cooling. • Industrial applications including heating, ventilation, air-conditioning, refrigeration, heat exchangers, electrical and mechanical engineering. • Solid and hollow copper alloy rods and sections • Copper alloy wire and bars • Seamless and welded copper alloy tubes of dierent cross-sections • Copper alloy wire cage nets for farming aquaculture • Copper, brass, high performance rolled products • Copper bus bars • Rod proles • Wires • Additional capabilities for tintin and silver plating • Copper and aluminium enameled wires (round and rectangular) • All types of coin blanks • Rings for bi-colour coins • Ecutherm copper tubes • Corrugated A/C drain hoses • Titan zinc coils, sheets, strips, gutters and other accessories for roong ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018 Products comply with several quality specications (EN, DIN, BS, ASTM, JIS) ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 26000:2010, ISO 50001:2011, IATF 16949:2016 ISO 9001 :2015, ISO 14001 :2015, ISO 45001:2018, IATF 16949:2016, ISO 50001:2018 ISO 9001:2015, ISO 14001:2015, ISO 50001:2018 NEN-EN-ISO 9001:2015 VIOHALCO | ANNUAL REPORT 2021 26 ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 1,563,775 1,066,014 Gross prot 125,054 73,940 Gross prot (%) 8.0% 6.9% EBITDA 94,338 47,680 EBITDA (%) 6.0% 4.5% a-EBITDA 60,465 52,084 a- EBITDA (%) 3.9% 4.9% EBIT 77,672 32,413 EBIT (%) 5.0% 3.0% a-EBIT 43,800 36,817 a-EBIT (%) 2.8% 3.5% Prot before tax 58,979 16,000 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. ■ 2021 Financial performance Revenue amounted to EUR 1,564 million versus EUR 1,066 million in 2020, driven by increased sales volumes and an uptrend in the price of copper. Prot before income tax amounted to EUR 59 million (2020: EUR 16 million). Strong demand across most markets at the start of the year was maintained throughout 2021. The majority of the segment’s companies performed well in their respective markets, with recovery in copper alloy markets and continued growth in the at- rolled products market boosting sales volumes. The average price of copper stood at 7,881 EUR/t compared with 5,395 EUR/t in 2020, as metal prices continued to rise across international markets throughout 2021. Copper tube sales amounted to 75.3k tons in 2021 compared with 74.6k tons in 2020, growing by 0.9%, as strong demand was oset by capacity constraints and an unscheduled shutdown of Halcor’s copper tubes plant in Oinofyta. Overall protability grew also due to improved availability of scrap in the rst three quarters. In the last quarter of 2021, the eects of supply chain disruption due to the pandemic became more prominent, but were mitigated with spot material supplies in response to delayed shipments and lower scrap availability. In addition, eorts were made to pass on the eect of rising energy prices to conversion prices. Finally, healthy demand for enameled wires supported increased sales volumes of Cablel Wires against the prior year. Soa Med’s ve-year strategic growth plan is on track, and the company continued to gain market shares and volumes, with a year-on-year sales growth of 8.7%. Market conditions were favourable, with automotive connectors and energy distribution experiencing particularly strong demand. Soa Med adjusted its production and product portfolio to align with prevailing market dynamics more closely, focusing on more demanding products. This will enable the company to continue expanding its customer base and market share in the coming years, especially since it has now received approval as a “regular supplier” from key international customers with high demand and potential. ■ Outlook In 2022, market conditions in the copper segment are expected to remain favourable as the pandemic gradually recedes. The tubes mill is operating almost at capacity and, as such, current eorts are focused on improving eciency and increasing output. Production of copper and copper alloy rolled products is expected to continue rising, as the factors driving long-term demand are sustained. Finally, continuous investment in higher value-added products is expected to lead to further product portfolio improvements and copper segment protability. Further information about the companies is available on their websites: Halcor: www.halcor.com Soa Med: www.soamed.com Cablel Wires: www.cablelwires.com Epirus Metalworks: www.epirusmetalworks.com NedZink: www.nedzink.com 27 VIOHALCO | ANNUAL REPORT 2021 28 Aluminium products VIOHALCO | ANNUAL REPORT 2021 29 Copper products 30 ElvalHalcor S.A. Formed in December 2017, through the merger of Elval, a leading European aluminium rolling company, and Halcor, the largest copper tubes producer in Europe, ElvalHalcor Hellenic Copper and Aluminium industry S.A. (‘ElvalHalcor’) is a leading global industrial manufacturer of aluminium and copper products. As a combined entity, ElvalHalcor leverages synergies in innovation, technology, R&D&Ι, procurement, marketing, infrastructure and sustainability to produce high-quality, value added solutions for customers globally. ElvalHalcor’s success is driven by its customer-focused philosophy, commercial export eorts and continuous innovation achieved through ongoing investment in R&D&I. The company has over 80 years of experience, a strong production base across 16 industrial units, a market presence in over 90 countries, and highly experienced specialist personnel. ElvalHalcor is a key player in the non-ferrous metals industry. It eectively navigates the challenges of the evolving business environment, whilst generating value for its stakeholders through sustainable growth and development. 31 ElvalHalcor is active in a number of dynamic, growing markets, including: • Packaging (food and beverages); • Road, sea and rail transportation; • Automotive; • Heating, ventilation, air conditioning and refrigeration (‘HVAC&R’); • Building and construction; • Renewable energy; • Shipbuilding • Energy and power networks; • Electronics and electrical; • Water supply; • Industrial and engineering applications; • Other applications. ElvalHalcor is listed on the Athens Stock Exchange (ELHA). Further information on ElvalHalcor is available on the website: www.elvalhalcor.com 32 VIOHALCO | ANNUAL REPORT 2021 33 Revenue (EUR thousands) 2021 : 757,170 2020: 568,615 EBITDA (EUR thousands) 2021 : 84,287 2020: 72,046 a-EBITDA (EUR thousands) 2021 : 89,623 2020: 81,495 Cables 34 Cables segment Activities The cables segment comprises three companies: Hellenic Cables S.A., Greece-based Hellenic Cables Industry (‘Hellenic Cables’) and its subsidiary Fulgor S.A. (‘Fulgor’), and Romania-based Icme Ecab S.A. (‘Icme Ecab’). Hereafter collectively referred to as the ‘Hellenic Cables companies’. The Hellenic Cables companies are approved suppliers to some of the largest international electricity network operators and have one of the biggest and most advanced submarine cable plants in the world. They oer a variety of products including underground and submarine power cables (low, high and extra high voltage), telecommunications cables, enameled wires, copper wires and compounds. Over the past decade, the Hellenic Cables companies have collectively established themselves as the largest producer of cables in Greece and Southeastern Europe. They have a strong international focus, exporting to more than 50 countries worldwide. Their key product categories are as follows: • Power cables: low, medium, high and extra high voltage submarine and land cables, umbilical cables, subsea flexible pipes, control cables, cables for industrial applications and external installations, fire-retardant, fire-resistant and halogen-free cables, marine cables, copper and aluminium conductors, ACSR and ACSS/TW conductors; • Telecommunications cables: conventional telephone cables, telephone exchange and data transmission cables (LAN), bre-optic (single-mode and multi-mode), submarine cables, and signaling cables; • Plastic and rubber compounds: PVC-based plastic compounds, low smoke halogen free polyolen-based plastic compounds and rubber compounds. The Hellenic Cables companies have an established Project Management Oce (‘PMO’) and, where appropriate, use their own specialised assets, trained personnel, and experienced subcontractors to oer complete "turnkey" projects in Greece and internationally. The cable companies’ capabilities include the following: • System design and engineering; • Cable route survey; • Design and manufacture of suitable underground and submarine cable types; • Loading and transportation of cables to the project site; • Installation of cables (with the use of specialised cable laying vessels for submarine cables); • Protection of cables along cable routes; • Supply and installation of repair joints, transition joints and cable terminations; • Supply and installation of terminal equipment; • System testing and commissioning; • Project management; • Training of customer personnel in system operations; • Provision of maintenance and repair solutions. Hellenic Cables and its subsidiary, Fulgor, were recently awarded several high-prole projects by major utilities companies across Europe. This is testament to the leading positions that the Hellenic Cables companies have established in both the submarine cable manufacturing sector and the wider global oshore energy industry. Cables Fulgor Hellenic Cables Icme Ecab VIOHALCO | ANNUAL REPORT 2021 35 ■ Production facilities The cables segment’s production base comprises ve plants: Plant Production focus Annual Quality and management systems certications production capacity Hellenic Cables power and optical bres Cable plant (Thiva, Greece) Fulgor Submarine cable plant and port (Corinth, Greece) Icme Ecab power and telecom cables plant (Bucharest, Romania) Hellenic Cables plastic and rubber compounds plant (Oinofyta, Greece) Lesco Ltd wooden packaging products plant (Blagoevgrad, Bulgaria) 60,000 tons • 50,000 tons of cables • 120,000 tons of 8mm diameter copper wire rod 50,000 tons 24,000 tons 16,500 tons • Low voltage (‘LV’) power cables • Medium voltage (‘MV’) power cables • High voltage (‘HV’) power cables • Extra high voltage (‘EHV’) power cables up to 500 kV • Fibre optic cables • MV submarine power cables • HV submarine power cables • Fiber optic submarine cables • LV, MV and HV power cables • Copper and aluminium wire rods • Cables for indoor installations, energy, control, industrial and external applications, • LV and MV power cables • Fire-retardant, re-resistant and halogen-free cables • Mine cables • Marine and special-requirement cables • Telecommunication cables (including signaling, remote control and data transmission) • Copper and aluminium conductors • Plastic and rubber compounds • PVC and rubber compounds • Wooden reels and pallets ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018, ISO 22301:2019, ISO 27001:2013 Authorised Economic Operator (AEO), Safety Culture Ladder-Step 4, VCA/SCC, Petrochemicals 2017/6.0 ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018, ISO 22301:2019, ISO 27001:2013 Authorised Economic Operator (AEO), Safety Culture Ladder-Step 4, VCA/SCC, Petrochemicals 2017/6.0 ISO 9001:2015, ISO 14001:2015, ISO 45001:2018 ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018, ISO 27001:2013 Authorised Economic Operator (AEO) 36 ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 757,170 568,615 Gross prot 94,442 81,605 Gross prot (%) 12.5% 14.4% EBITDA 84,287 72,046 EBITDA (%) 11.1% 12.7% a-EBITDA 89,623 81,495 a- EBITDA (%) 11.8% 14.3% EBIT 67,629 56,929 EBIT (%) 8.9% 10.0% a-EBIT 72,964 66,379 a-EBIT (%) 9.6% 11.7% Prot before tax 45,754 35,549 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. ■ 2021 Financial performance Revenue for the segment amounted to EUR 757 million (2020: EUR 569 million) and prot before tax to EUR 46 million (2020: EUR 36 million). The performance of the cables segment reects strong growth in both the projects business, owing to ecient execution of recent orders, and the products business, as a result of signicant increases in the volume of cables products compared with 2020. Additionally, all plants maintained a full production schedule, resulting in further growth in protability. Hellenic Cables continued its tendering eorts and was awarded several new projects in the oshore wind and interconnections markets, along with frame contracts from major transmission system operators (TSOs). At the same time, a number of projects were successfully delivered, in full or partially, throughout 2021 including: • The 178 km-long submarine and underground electrical interconnection between Crete and Peloponnese in Greece, one of the most demanding projects ever completed worldwide (the longest and deepest – 1,000m – HVAC interconnection). This was successfully installed and electried in May. • Electrical tests of the 150 kV high voltage submarine cable, that 37 connects Skiathos island to the Greek National Transmission System, were successfully completed early in 2021. • The production of all 66kV inter-array cables for the Seagreen oshore wind farm in the UK was completed and deliveries are expected to be concluded early in 2022. • Production for phase B of the Hollandse Kust Zuid project in the Netherlands was also completed, with delivery of the two 220kV subsea cables completed in the second quarter of 2021. • Production for the submarine cables for the Kareas II Wind Farm interconnection in Greece was concluded, on schedule, during Q4 2021. Sales volumes for the products business unit increased by 14% in 2021, as a result of an upturn in demand and successful commercial strategy. This, together with improved product mix, positively impacted the segment’s protability. Finally, investment in the Hellenic Cables’ plant in Corinth to expand the inter-array cables capacity is almost complete. ■ Outlook Building on its strong performance in 2021, and considering the current macroeconomic environment, the cables segment is expected to continue to benet from a robust set of secured projects and signicant new orders (e.g. the Soa Oshore Wind Farm (OWF) project in the UK, and the Vesterhav OWF project in Denmark, among other). Positive market momentum, indicating strong potential in the oshore wind sector, and the segment’s proven ability to expand into new markets, signals solid growth in the short term. The submarine projects business is expected to retain high-capacity utilisation throughout 2022, driving protability across the entire segment. Additionally, the announced possible partnership with Ørsted, world leader in oshore wind development, for the establishment of a submarine inter array cable factory in the State of Maryland, USA, is an example of opportunities created by the market’s positive potential. In the onshore projects business, several awards in the UK reect Hellenic Cables’ continuous presence and investment in this market, while its strong positioning in other markets, such as the Eastern Mediterranean and Central Europe, points to expected robust growth in this business. 3In the cable products business unit, increased demand in the main markets of Western Europe, the Middle East and the Balkans, is expected to be maintained, as both the construction and industrials sectors continue to rebound. In addition, recently signed frame contracts secure increased levels of capacity utilization over the coming years, while initiatives for further geographical diversication continue to strengthen revenue streams. By the end of 2021, the order backlog exceeded EUR 650 million. The cables segment’s operational focus remains the successful execution of existing projects and securing the award of new projects, while exploring possible new business opportunities around the globe. Further information about Hellenic Cables is available on the website: www.hellenic-cables.com 38 39 Revenue (EUR thousands) 2021 : 225,067 2020: 304,824 EBITDA (EUR thousands) 2021 : 555 2020: 21,106 a-EBITDA (EUR thousands) 2021 : 14,141 2020: 22,020 @ SapuraE nergy Steel Pipes 40 Steel Pipes segment Activities Corinth Pipeworks Pipe Industry S.A. (‘Corinth Pipeworks’) is a global supplier of high-quality steel pipes and hollow sections for the energy and construction sectors. It is a subsidiary of Cenergy Holdings, which was formed through the cross-border merger of Corinth Pipeworks and Hellenic Cables. Corinth Pipeworks has extensive experience and a strong track record of implementing complex projects for the energy sector worldwide, both onshore and oshore. Corinth Pipeworks’ three main product categories are: • Line pipes – manufactured either in the plant’s high frequency induction welding unit (HFW), or the helically submerged arc welding unit (HSAW) and the longitudinal submerged arc welding unit (LSAW/JCOE). • Casing pipes – these high-frequency induction welded pipes (HFW) are used in oil and gas extraction drills; their product range was expanded by the installation of an LSAW mill in 2016. • Hollow structural sections – used in the construction sector. Services: • Final site delivery; • Storage; • Sour service laboratory; • Material and corrosion testing (via Corinth Pipeworks’ accredited laboratory); • Hydrogen testing lab; • Pipe coating; • Ultra-tight pipe tolerances for special applications; • Fixed lengths; • Double jointing; • Pipe cutting services; • Technical consultancy and materials selection. The Corinth Pipeworks plant has dedicated port facilities at Thisvi Port, just 1.5 km away, enabling the company to reduce raw material transportation costs, offer more competitive product pricing and facilitate faster delivery. The port includes cranes, forklifts, and other machinery, in line with the provisions of the International Ship and Port Facility Security Code. CPW America is based in Houston, USA and aims to promote Corinth Pipeworks’ products and provide customer service to the Group’s customers, as well as to customers of other Viohalco companies located in North and South America. Steel pipes CPW America Corinth Pipeworks VIOHALCO | ANNUAL REPORT 2021 41 ■ Production facilities The steel pipes segment operates the following production plant: Plant Production focus Annual Quality and management systems certications production capacity Corinth Pipeworks plant and port (Thisvi, Greece) 925,000 tons • Welded pipes for gas and liquid fuel, hydrogen transportation, and CO 2 transmission (CCS) • Hollow structural sections for the construction industry • Concrete weight coating (enabling the supply of a complete oshore pipeline package in one location) ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018, ΑPI Q1, API-5CT-0509, API-5L-0396, CPW ISO 3834-2, DNV AD 2000- Merkblatt W0 & HP0 (WZ 2537 HH 1), DNV PED 2014-68-EC (DZ 134 HH 1), DNVGL EN 10219-1 REV.5, ISO 17025:2017, ZETOM CERTIFICATE VIOHALCO | ANNUAL REPORT 2021 42 ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 225,067 304,824 Gross prot 15,157 24,695 Gross prot (%) 6.7% 8.1% EBITDA 555 21,106 EBITDA (%) 0.2% 6.9% a-EBITDA 14,141 22,020 a- EBITDA (%) 6.3% 7.2% EBIT -8,305 12,251 EBIT (%) -3.7% 4.0% a-EBIT 5,280 13,165 a-EBIT (%) 2.3% 4.3% Prot/Loss (-) before tax -15,407 1,575 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. ■ 2021 Financial performance In the steel pipes segment, revenue decreased to EUR 225 million versus EUR 305 million in the prior year, while loss before income tax amounted to EUR 15 million (2020: prot of EUR 2 million). 2021 was a challenging year for the steel pipes segment. The energy market slowly, but steadily recovered after an unprecedented decline in energy consumption and prices due to the pandemic, which combined with the postponement or cancellation of several fossil-fuel distribution project saw energy prices climb to very high levels. A number of pipeline projects restarted in the second half of 2021, with natural gas remaining the main intermediate fuel in the global energy transition. During this turbulent period, Corinth Pipeworks took action to mitigate the impact of these challenges. Specically: • Action to safeguard the health and safety of its employees, while securing uninterrupted production for all current projects. • Strict working capital management, which secured liquidity and allowed operating activities to nance investments that took place during 2021. • Eorts to strengthen presence in new markets, specically Europe, the Americas, North Africa and Asia. • The award of new projects (e.g. INGL oshore project in Israel, Gaz System in Poland, Hydrogen certied pipelines for Snam in Italy, oshore projects in the North and Norwegian sea etc). • Continuous R&D and innovation strategy, which have positioned the company at the forefront of the energy transition and solutions on hydrogen transportation. During the year, the company also progressed technologies to develop pipelines certied for the transfer of up to 100% hydrogen. This is the culmination of an extensive R&D programme and innovation strategy, which also includes a roadmap for the digitalization of processes, energy company qualications and geographical diversication for competitive advantage. Corinth Pipeworks remains focused on research and development initiatives (e.g. green hydrogen transportation, CCS technologies and potential opportunities in the oshore wind sector), and the penetration of new geographical and product markets. Finally, at the end of the year, the backlog increased reaching EUR 350 million. Finally, on February 8, 2022, the US Department of Commerce (DoC) published the nal result of its administrative proceedings on large diameter welded pipe (LDWP) from Greece, resulting in an antidumping duty rate of 41.04%. Corinth Pipeworks intends to appeal this decision, while actively working with the DoC to reverse the nal determination. It is expected that the impacts of this will be minimal, as the company adheres to a geographically diversied commercial policy and the US market does not presently represent a core market. ■ Outlook Corinth Pipeworks remains focused on penetrating new geographical markets and developing new innovative products, e.g. infrastructure for the oshore wind sector, tubes for hydrogen transportation, carbon capture and storage (CCS) technologies etc. Such initiatives along with intensied eorts towards stronger competitiveness will improve the company’s market position. Looking ahead, Corinth Pipeworks expects energy prices to further increase as a result of continued geopolitical uncertainty. This, in combination with its solid backlog, oers a positive outlook for Viohalco’s steel pipes segment. Further information about Corinth Pipeworks is available on its corporate website: www.cpw.gr 43 VIOHALCO | ANNUAL REPORT 2021 44 Cable products VIOHALCO | ANNUAL REPORT 2021 45 Steel pipe products 46 Cenergy Holdings S.A. Cenergy Holdings S.A. (‘Cenergy Holdings’) is a Belgium-based holding company which invests in industrial companies at the forefront of high growth sectors, such as energy transfer, renewables and data transmission. Cenergy Holdings’ portfolio comprises two business segments: • Hellenic Cables, its subsidiaries and Icme Ecab constitute the Hellenic Cables companies. Collectively, the Hellenic Cables companies are among the largest cable producers in Europe. Hellenic Cables companies manufacture mainly power, telecommunication and submarine cables. • Corinth Pipeworks is one of the world’s leading manufacturers of steel pipes and hollow sections for the energy and construction sectors. Both entities have state-of-the-art production facilities and oer a diverse range of products to a variety of markets. 47 The companies in Cenergy Holdings’ portfolio: • have a long history of implementing large-scale projects in more than 70 countries; • have served major customers worldwide for almost 70 years; • operate six production units and four supporting facilities in three countries; and • provide value add products for niche markets. Cenergy Holdings is listed on the Euronext Brussels and the Athens Stock Exchange (CENER). Further information on Cenergy Holdings is available on its corporate website: www.cenergyholdings.com 48 VIOHALCO | ANNUAL REPORT 2021 49 Revenue (EUR thousands) 2021 : 1,067,782 2020: 677,939 EBITDA (EUR thousands) 2021 : 160,316 2020: 29,917 a-EBITDA (EUR thousands) 2021 : 123,654 2020: 33,603 Steel 50 Steel segment Activities Sidenor Steel Industry S.A. (‘Sidenor Steel Industry’), Stomana Industry S.A. (‘Stomana Industry’) and their subsidiaries are leading producers of steel products and the largest steel recyclers in Southeastern Europe. The companies have more than 60 years of manufacturing experience and expertise in steel production and distribution, and an extensive product portfolio which includes long, at, and downstream steel products. Sidenor is the rst steel company in Greece to oer customers the Environmental Product Declaration (EPD) for SD concrete- reinforcing steel products, reecting Sidenor’s commitment to operating responsibly and to reducing its environmental footprint in Europe. The steel segment companies oer a broad range of value- added products and solutions for building and construction (including buildings, roadworks, metro stations, bridges, shopping malls and hydroelectric dam projects), mechanical engineering, shipbuilding, road and rail, the automotive industry, mining and tunneling applications. The product family is structured as follows: • SD integrated reinforcing system: SD concrete reinforcing steel, SD stirrup reinforcing mesh, Sidet special mesh, SD wire mesh, Sidefor and Sidefor Plus prefabricated stirrup cages, Inomix steel bres and lattice girders; • Wire rods for cold drawing and mesh applications; • Special bar quality steels (SBQ); • Steel plates; • Merchant bars: hot-rolled square bars, hot-rolled at bars, hot-rolled round bars, hot-rolled equal angle bars and UPN channels; • Grinding balls; • Welding products and electrodes; • Wire products; • Flat wire for electric cables reinforcement; • Tubular products: tubes of pre-galvanized steel and cold and hot rolled steel in round, square and rectangular proles. In order to achieve the optimum balance between operational and commercial exibility and productivity, the steel segment has adopted the following operational structure: • Mini-mills; • Downstream operations for steel product processing; • Sales and distribution. Steel Sovel Sidenor Steel Industry Stomana Industry Dojran Steel VIOHALCO | ANNUAL REPORT 2021 51 ■ Production facilities Steel segment operates six steel manufacturing facilities: Plant Production focus Annual Quality and management systems certications production capacity Sidenor Steel Industry (Thessaloniki, Greece) Sovel plant and privately owned port facilities (Almyros, Greece) Stomana Industry (Pernik, Bulgaria) & the Port Svishtov West (Bulgaria) Erlikon (Thessaloniki, Greece) Dojran Steel (Nikolic, North Macedonia) Domoplex Ltd (Limassol, Cyprus) Meltshop: 800,000 tons Long products rolling mill: 800,000 tons Meltshop: 1,350,000 tons Long products rolling mill: 1,200,000 tons Meltshop: 1,400,000 tons Long products rolling mill: 1,200,000 tons Plate products rolling mill: 400,000 tons. Electrodes: 4,000 tons Copper-plated wires: 3,000 tons Galvanized wires: 32,000 tons Drawning machines: 40.000 tons Steel Fibres: 1.300 tons Long products rolling mill: 200,000 tons Wire mesh production: 20,000 tons Lattice girders: 10,000 tons 12,000 tons • Billets • SD concrete reinforcing steel (in bars and coils) • Merchant bars • Wire rod products • Billets • SD concrete reinforcing steel • SD spooled coils • SD wire mesh • SD stirrup reinforcing mesh • Sidet special mesh • Sidefor and Sidefor Plus prefabricated stirrup cages • SD concrete reinforcing steel • Steel quarto plates • Special Bar Quality steels (SBQ) • Steel balls • Continuously cast semi-products (billets, blooms and slabs) • Welding electrodes • Copper-plated wires • Galvanized wires • Galvanized steel wire armor for power cables, including submarine power cables (round and at) • Galvanized mesh in rolls and sheets • Black hard and annealed wires • Concrete reinforcing steel bres • SD concrete reinforcing steel • Merchant bars • Wire mesh • Double-twist hexagonal mesh (serasanetti) • Galvanized mesh in rolls and sheets • Galvanized concrete reinforcing mesh for oshore fuel pipes • All types of mesh made of welded wires or straight steel reinforcement bars ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2018, SustSteel Products certied according to EN, DIN, ELOT, SR, SRPS, BDS standards ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, ISO 50001:2011, SustSteel Products certied according to EN, BS, DIN, ELOT, SR, SRPS, BDS, HRN standards ISO 9001:2015, ISO 14001:2015, ISO 45001:2018, SustSteel Products meet requirements of EN, DIN, ASTM, JIS, BS, Lloyd’s Register and Germanischer Lloyd ISO 9001:2015 ISO 45001:2018 Products meets the requirements of BS, EN, DIN, ASTM, AWS, DIN, LRS, GL, ABS ISO 9001:2015, ISO 14001: 2015, ISO 45001:2018, ISO 50001:2018 Products certied according to EN, DIN, SRPS, BDS standards ISO 9001:2015 The facility also maintains its own quality control laboratory on site VIOHALCO | ANNUAL REPORT 2021 52 ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 1,067,782 677,939 Gross prot 181,255 46,096 Gross prot (%) 17.0% 6.8% EBITDA 160,316 29,917 EBITDA (%) 15.0% 4.4% a-EBITDA 123,654 33,603 a- EBITDA (%) 11.6% 5.0% EBIT 134,716 826 EBIT (%) 12.6% 0.1% a-EBIT 98,054 4,512 a-EBIT (%) 9.2% 0.7% Prot/(Loss) before tax 108,943 -24,776 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. ■ 2021 Financial performance Revenue for the steel segment amounted to EUR 1,068 million in 2021, versus EUR 678 million in 2020. Prot before income tax amounted to EUR 109 million (2020: loss of EUR 25 million). In 2021, the steel segment maintained its dominant market position in Greece, the Balkans and Cyprus. This, combined with recovery in demand following very low levels in 2020, led to a remarkable performance for the segment. This performance, coupled with the emerging benets of cost reduction eorts initiated in 2020, resulted in signicantly improved protability. Despite disruption to the global supply chain and increasing energy prices, the steel segment secured supply of scrap and other alternative raw materials, facilitating uninterrupted delivery of products to customers, continuous high service levels and the realization of increased production and sales volumes across all product categories. At the same time, the segment signicantly increased prices leading to higher spreads in all product categories. In Greece, previously announced medium and large-scale construction projects continued to be delayed due to the pandemic, but are expected to commence in 2022. Increased sales volumes were driven predominantly by private residential construction projects. At the Sidenor plant, continuous quality improvement projects and product offering expansion led to significant new sales in wire rods across new markets, including the Netherlands, Belgium, Poland and other European countries. Recovery of the automotive industry led to sales growth in special bar quality steels, and increased sales to Mexico, US and Europe for both construction and shipbuilding led to sales growth in plates. Sidenor was the first steel producer in Greece to offer its customers the Environmental Product Declaration (EPD) for SD concrete reinforcing steel products (bars and coils, meshes and prefabricated cages) manufactured at the Sovel plant, Almyros, Greece. The EPD demonstrates the company’s commitment to monitoring, measuring, and transparently reporting its environmental footprint. At Stomana Industry in Bulgaria, the SBQ long product mill’s upgrade project was completed, enhancing the quality of bars and increasing the safety of production operations. At Dojran Steel, the replacement of fuel with natural gas in the reheating furnace has significantly reduced costs and improved the company’s environmental footprint. ■ Outlook In 2022, uncertainty due to the pandemic, geopolitical issues, disruption to the global supply chain and high energy prices is expected to continue. However, the steel segment’s companies will maintain eorts to eectively adapt to ongoing changes, further enhancing competitiveness and operational eciency. Further information about the steel segment is available on the Sidenor Steel Industry website: www.sidenor.gr 53 54 VIOHALCO | ANNUAL REPORT 2021 55 Revenue (EUR thousands) 2021 : 18,667 2020: 10,041 EBITDA (EUR thousands) 2021 : 27,921 2020: 20,409 a-EBITDA (EUR thousands) 2021 : 6,618 2020: 6,511 Real estate 56 Real estate segment Activities Viohalco derives value from the real estate assets of its subsidiaries by developing and managing large-scale commercial and industrial properties. The segment is made up of Noval Property, a leading Real Estate Investment Company (‘REIC’) active in real estate development and investment, and Steelmet Property Services S.A., which provides a wide range of centralised real estate, property and facility management services. Noval Property owns a diversied, high quality and mature portfolio of real estate assets, including oce buildings, hospitality properties, shopping centres, retail parks, logistics, and residential and industrial complexes. With a highly marketable modern real estate portfolio with signicant geographical distribution, Noval Property is currently the second largest REIC in Greece in terms of portfolio value (EUR 413 million as of 31.12.2021). Underpinned by a strong capital structure, Noval Property is currently implementing a strategic investment plan aimed at sustainable growth, by enhancing and enriching its balanced real estate portfolio with environmentally accredited buildings. Investment opportunities are mainly located in Greece and in selected Southeastern European countries. In December 2021, Noval Property issued a Green Bond Loan of EUR 120 million to nance the company’s strategic investment plan. The Green Bond Loan, which is the third green bond issued in the Greek capital market, is listed on the Athens Stock Exchange and is included in the recently introduced “ATHEX BONDS GREENet” section of Athens Stock Exchange. ■ Properties At the end of 2021, Noval Property’s portfolio comprised 44 properties. The main income generating properties within Noval Property’s portfolio are the following: 1 Retail IKEA megastore 96-98-100 Kissou Avenue, Egaleo, Athens, Greece 2 Retail River West shopping centre 96-98-100 Kissou Avenue, Egaleo, Athens, Greece 3 Oce The Orbit oce complex 115 Kissias Avenue, Athens, Greece 4 Retail Mare West retail park Corinth, Greece 5 Hospitality Wyndham Grand Athens Hotel Karaiskaki Square, Athens, Greece 6 Oce 33 Amarousiou Chalandriou Street oce building Maroussi, Athens, Greece 7 Oce 16 Himaras Street oce building Maroussi, Athens, Greece 8 Oce The Buttery oce building 26A Apostolopoulou Street, Chalandri, Athens, Greece 9 Oce 57 Ethinikis Antistaseos Street oce buildings Chalandri, Athens, Greece 10 Logistics Iroon Politechneiou Street Magoula, Greece Real estate Noval Property Steelmet Property Services VIOHALCO | ANNUAL REPORT 2021 57 ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 18,667 10,041 Gross prot 3,555 2,481 Gross prot (%) 19.0% 24.7% EBITDA 27,921 20,409 EBITDA (%) 149.6% 203.3% a-EBITDA 6,618 6,511 a- EBITDA (%) 35.5% 64.8% EBIT 19,144 14,463 EBIT (%) 102.6% 144.0% a-EBIT -2,159 565 a-EBIT (%) -11.6% 5.6% Prot/Loss (-) before tax 15,347 10,511 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. ■ 2021 Financial performance Revenue for the real estate segment amounted to EUR 19 million in 2021 (2020: EUR 10 million), while prot before income tax amounted to a EUR 15 million (2020: EUR 11 million). It should be noted that Viohalco applies the historical cost in investment property, while the main Real Estate segment subsidiary follows the fair value model. As at 31 December 2021, Noval Property’s diversied portfolio comprised 44 properties (one, indirectly, through a joint venture with a real estate fund), mainly in Greece and selectively in Bulgaria. The portfolio comprises oces, shopping centres, logistics centres and hospitality assets, with a total built-up area of c. 453,000 sq.m. Noval Property recorded a 13.35% year-on-year increase in the fair value of its investment portfolio to EUR 413.29 million (as at 31 December 2021), despite dicult market conditions stemming from the Covid-19 pandemic. This growth was achieved as a result of completing specic development projects, new acquisitions and active asset management. Covid-19 relief measures, initially introduced by the Greek Government in 2020, were extended during H1 2021. The combination of these government measures and decreased economic activity of retail businesses during lockdowns, signicantly aected the income of real estate companies, including Noval Property. Despite these adverse conditions, Noval Property continued its development programme throughout the period. Construction works to expand the River West shopping centre were completed by the end of H1 2021 and commercial operations commenced in July 2021. During H1 2021, three new assets were acquired. In H1 2021, Noval Property was also declared the preferred bidder (in a joint venture with a real estate fund, as already mentioned above) to acquire a prime plot of land in Athens where a large-scale and environmentally-friendly oce complex will be developed. Acquisition of the said asset was completed in Q4 2021. In December 2021, Noval Property successfully issued a Green Bond Loan of EUR 120 million, listed in the Category of Fixed Income Securities at the Regulated Market of the Athens Stock Exchange. Noval Property’s Green Bond was one of only three Green Bonds ever issued in the Greek capital market and is included in the recently introduced “ATHEX BONDS GREENet” section of the Athens Stock Exchange. ■ Outlook Looking ahead, Noval Property will continue to actively manage its asset portfolio and the development of its captive pipeline, while exploring new acquisitions. Its focus will be on environmentally- accredited prime oce buildings, logistics, data centres, resort hotels, residences, and mixed-use urban regeneration projects. Further information is available on the Noval Property website: www.noval-property.com VIOHALCO | ANNUAL REPORT 2021 58 Steel products VIOHALCO | ANNUAL REPORT 2021 59 Real estate 6060 6161 R&D&I and Technology 62 R&D&I and Technology segment Activities Viohalco’s dedicated research, development and innovation (‘R&D&I’) companies and in-house production plant R&D&I departments focus on: • developing new and high value added products; • providing ecient solutions to optimize business and industrial processes; • improving the eciency and environmental performance of plants; • developing innovative applications for industry, energy and environment (including pioneering solutions in the elds of ERP, CRM, BI, traceability and others). The segment’s activities are supported by three companies: 1) Elkeme Hellenic Research Centre for Metals S.A. (‘Elkeme’). Elkeme focuses on applied industrial research and the technological development of the four major metals sectors (aluminium, copper, steel and zinc). Elkeme provides R&D&I services and technical solutions for new products, and also optimises existing products and production processes. Elkeme is certied according to ΙSO 9001:2015 and operates an ISO 17025:2017 accredited analytical chemistry laboratory. 2) Teka Systems S.A. (‘Teka Systems’) delivers engineering and construction projects for the steel, aluminium, copper, power and telecommunication cables industries, commissions industrial equipment, drives process automation through the integration of technologies in projects, and implements IT projects in ERP, CRM, BI and analytics, among others. 3) Praksys S.A. (‘Praksys’) develops, markets and oversees the implementation of new technologies in structural and concrete reinforcing steel. It has developed Synthesis™, a unique system for the industrial-scale prefabrication of reinforcing steel. Praksys has also developed a complete software package to accompany the technology, including components such as product design, machine operation control, e-ordering, production planning and logistics. The R&D&I work of the Viohalco companies’ technology departments is as follows: • Elval Technology Centre: develops customised alloys, highly resistant special products with non-skid properties, extra at sheets with top-quality lacquer-coatings, products made of 100% recycled aluminium and deep drawing and extrusion products. • Symetal’s Technology Department: develops technologies that introduce and ensure innovative surface design and enhanced mechanical characteristics. These technologies allow high aluminium foil anity control for laminates and coatings, as well as awless forming. Symetal also focuses on the development of battery foil, which is used in the automotive rechargeable batteries industry. Symetal Battery Foil (SBF) resides at the core of Li-ion batteries, as one of its core electrodes. The technical and quality requirements for such a product are extremely high. At the same time, the reduction of rolled aluminium thickness to as low as 11 microns, allows next generation batteries to achieve a signicant increase in the amount of energy stored. SBF special alloying and innovative production process is the result of extensive testing with established European rechargeable battery cells manufacturers. • Elval Colour R&D department: in collaboration with architects and material suppliers the department develops colours through identication and experimentation to create new pigments, innovative surfaces and designs. The department also digitizes colour measurement for quality control; develops coating technologies in cooperation with equipment and coating suppliers to investigate coating processes that are more environmentally and consumer-friendly, consume less energy and contain lower or no VOCs; develops polymer compounds for faster productivity and higher re- resistance, and explores material recyclability and material functionality. It also develops in-house and in-joint R&D projects, and new methods for the identication and R&D&I and Technology Elkeme Praksys Teka Systems VIOHALCO | ANNUAL REPORT 2021 63 analysis of material long-term performance. Elval Colour participates in numerous ongoing projects with universities relating to material performance evaluation methods, market research, and the long-term impact of coating materials on the environment. It also participates in European Technical Committees for standards’ publications and updates. • Etem Centre: develops, simulates and homologates heat treatable aluminium alloys and relative customized extrusion, and heat treatment processes, press lines and tooling for application to automotive end use parts. Together with Global Automotive OEM and Tier1 it co-develops and homologates tailored product solutions for specic performance requirements (namely crash behaviour, weight reduction, formability, corrosion resistance, post joining process requirements). The Centre designs, develops, simulates, and homologates product-specic processes, customized machinery, tooling and quality controls across processes and in laboratories, to meet specic quality, safety, volumes and cost requirements. Through R&D eorts and collaborations, Etem has become a Tier 2 and Tier 1 supplier to the automotive industry, certied to produce aluminium proles and parts for crash relevant systems. • Halcor Tube Heat Transfer laboratory (located within Halcor’s Oinofyta plant): is where Talos® Inner-Groove Tubes (IGT) and Talos® ACR tubes are manufactured in line with international standards and customer specications. IGT seamless copper tubes feature internal grooves which signicantly enhance the amount of heat transfer. Typical applications of IGT copper tubes include n-and-tube condensers and evaporator coils for air-conditioning, refrigeration, chiller, and heat-pump applications. Halcor's production technology for Talos® IGT copper tubes enables the manufacture of advanced inner- groove designs in a complete range of sizes, from 16mm outside diameter down to the latest microgroove™ tubes with an outside diameter of 5mm or less. The laboratory is one of the few manufacturers in the world with this capability. The Tube Heat Transfer Laboratory oers Halcor’s customers the opportunity to establish a mutually benecial relationship within an integrated support and product development framework. • Soa Med Product and Process Development Department (Technology Department): The main responsibilities of the department include developing new products, establishing the methods for producing the highest quality material at the lowest possible cost, maintaining the highest level of quality, providing excellent customer service and successfully homologating new customers. - During 2021, PPD signicantly contributed to nalizing the homologation process with all “big 5” global automotive connectors customers - TE, APTIV, MOLEX, LEAR, Ampfenol, as well as other signicant similar companies including MTA, Mista, Soehner, EATON. In addition, the PPD develops processes for new alloy CuZn9Sn3 and for Hot Dip Tinned material with very thin layer of Sn. • Hellenic Cables Companies: employ a team of highly skilled R&D engineers utilizing advanced software tools and modern testing facilities and pursues core product development research, innovation, the redesign/optimization of existing products and technical support across three business units (two in Greece and one in Romania). These eorts support the companies’ wider strategy towards the production of more sustainable products with lower environmental impact. Beyond the R&D personnel, it is worth of mention that Hellenic Cables SA has several state-of-the-art testing laboratories in its factories. Particularly, at the Oinota compounding plant, there is the testing polymer laboratory. The main focus of the laboratory is the development of new recipes for non-conductive cable components, chemical analysis and identication of raw materials, with emphasis on quality control and thorough analysis of polymers for underground high and extra-high voltage cables as well as submarine cables. The laboratory is also involved in the research and development of new plastic and elastomer compounds. In addition, the cable production plants have also testing laboratories with a full range of testing equipment, capable of carrying out complete mechanical and electrical tests of products in accordance with international standards. • Corinth Pipeworks R&D Centre: optimises a large array of pipe manufacturing and coating processes by (a) continuous internal trial productions and (b) modelling of specic processes, aiming to develop products for extreme applications(e.g. sour service, oshore, high strain applications such as reeling); improves working range to achieve enhanced product uniformity and broaden each mill’s production range; develops advanced destructive, corrosive and non-destructive specialised testing techniques providing state-of-the-art solutions. ■ 2021 Financial performance R&D&Ι expenditure (both expensed and capitalised) in 2021 amounted to EUR 13 million. The reported amount is based mainly on the provisions of the Frascati manual (OECD standard of conduct for R&D surveys and data collection) and on the relevant International Financial Reporting Standards (‘IFRS’). Further information about the companies is available on their websites: Elkeme: www.elkeme.gr Teka Systems: www.tekasystems.gr 64 VIOHALCO | ANNUAL REPORT 2021 65 Other activities Other activities mainly encompass expenses incurred by the parent (holding) company, along with the results of companies which operate in the Technology and R&D&I segment, ceramic trade activities (Vitruvit) and resource recovery segment. Prot before income tax amounted to EUR 3 million (2020: loss of EUR 1 million). ■ Key nancials Amounts in EUR thousands 2021 2020 Revenue 64,134 54,909 Gross prot 23,310 19,757 Gross prot (%) 36.3% 36.0% EBITDA 8,541 4,308 EBITDA (%) 13.3% 7.8% a-EBITDA 9,008 3,781 a- EBITDA (%) 14.0% 6.9% EBIT 4,307 540 EBIT (%) 6.7% 1.0% a-EBIT 4,774 13 a-EBIT (%) 7.4% 0.0% Prot/Loss (-) before tax 2,813 -1,114 - All percentages are vs Revenue * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. 66 F. Subsequent events VIOHALCO | ANNUAL REPORT 2021 67 1. On January 13th, 2022, Viohalco subsidiary, ElvalHalcor, participated in the share capital increase of the joint venture NedZink BV with EUR 1.5 million, maintaining its share to 50%. In addition, on February 28, 2022, the loan balance of EUR 1.25 million was converted to share capital. 2. On February 8th, 2022, the US Department of Commerce (DoC) published its nal results in the administrative proceedings conducted by the DoC for the period from April 19, 2019 through April 30, 2020 (“POR”) in connection with an antidumping (“AD”) order on large diameter welded pipe (LDWP) from Greece. As a result, the DoC determined for the POR an antidumping duty rate of 41.04% based on total adverse facts available (AFA) for mandatory respondent Corinth Pipeworks, Viohalco steel pipes segment. Despite the lengthy process of the administrative review involving the supply of extremely detailed data sets on Corinth Pipeworks’ commercial practices for the POR under scrutiny, as well as all reasonable estimations made throughout 2021 on the size, if any, of a possible AD duty rate, the DoC concluded on such a high AD duty rate. Corinth Pipeworks intends to le an appeal before the U.S. Court of International Trade against the decision of the DoC while continuing to actively work with the DoC in order to reverse the nal determination. Viohalco considers that there will be no material impact on the business of its subsidiary Corinth Pipeworks, as the latter strongly follows a geographically diversied commercial policy and the USA market does not presently constitute its core market. The one-o, additional provision charge on Viohalco annual consolidated economic results from a retrospective implementation of the AD duty rate and reaches ca. EUR 12.8 million (USD 14 million plus interest). 3. The Ukraine conict which began in February 2022 may cause increased market volatility and disruptions to many aspects of global economy during 2022. Although the impact of the crisis on Viohalco subsidiaries cannot be fully predicted, their overall exposure to Ukraine and Russia is limited and the consequences are not expected to have material impact on the business course. Sales exposure to these markets represents an insignicant portion of total turnover and any loss will be fully oset by demand in other markets. In order to mitigate potential disruption in supply chain, Viohalco companies have already initiated shifting the supply of raw materials currently sourced from Russia to alternative markets. In terms of nancing, the companies have no exposure to Russian banks though they may see some impact on credit and transportation insurance. Finally, although the conict in Ukraine has accelerated global energy crisis already experienced since the second half of 2021, Viohalco’s companies had already taken mitigating actions to reduce the business impact. Viohalco and its companies are monitoring the situation closely and will modify their approach when it is required. 4. On March 17th, 2022, Viohalco’s Board of directors decided to propose to the Ordinary General Shareholders’ meeting to be held on 31.05.2022, the approval of a gross dividend of EUR 0.10 per share. Taking into account the gross interim dividend of EUR 0.01 per share paid in June 2021, a balance gross amount of EUR 0.09 per share will be payable following approval by the shareholders’ meeting of this proposed resolution. 5. On March 17th, 2022, Viohalco’s Board of directors approved the acquisition of 25% non-controlling interest in subsidiary Bridgnorth Aluminium in consideration of GBP 11 million. As a result, Viohalco’s participation in Bridgnorth Aluminium amounts to 100%. There are no other subsequent events aecting the Consolidated Financial Information. VIOHALCO | ANNUAL REPORT 2021 68 G. Risks and uncertainties Viohalco’s Board of Directors is responsible for assessing the risk prole οf the Company’s subsidiaries. As Viohalco is a holding company and does not have itself any production operations, customers, suppliers, or personnel (besides employees for administrative tasks), the risks aecting it are attributed to its subsidiaries and their operations, suppliers, clients and personnel. Each Viohalco company is therefore responsible for the identication, measurement, analysis, response (mitigation), control and monitoring of its own risks. To support this, a set of common guidelines for an Entreprise-wide Risk Management (‘ERM’) framework across Viohalco companies exist. These guidelines include principles for eectively managing risk across all subsidiaries. Furthermore, the framework provides guidelines on how best to address these risks and facilitates discussion on risk management issues. Viohalco’s executive management, in consultation with the Board of Directors and an independent internal audit department, is responsible for as well as assessing possible risks and their control mechanisms across subsidiaries. The objective of this evaluation is to enable the Company to determine whether the subsidiaries have managed risks in a proactive and eective way to mitigate them to acceptable levels. Viohalco’s ERM process comprises the following steps: a) Identify key risks and measure / analyze their potential impact and likelihood. This is done at company level as all nancial, operational, compliance and strategic risks are associated with each company’s operations. b) Manage and respond to those risks by considering existing controls as well as selecting, prioritizing and implementing appropriate actions. This step is also done at company level, following the general principles outlined in the ERM framework. c) Control and monitor the internal and external environment for potential changes to risks, ensuring risk control continue to be eective. Each company monitors its risks and risk responses, using the common ERM guidelines but with separate procedures, systems and mechanisms put in place by each company’s management. A consolidated review of the subsidiaries’ financial performance, including potential risks is undertaken at Viohalco executive management level, by the internal audit department, the outcome of which is presented to the Audit Committee and the Board of Directors. The Audit Committee monitors the effectiveness of the subsidiaries’ internal control and investigates specific aspects of internal control and risk management on an on-going basis. ■ Key risks Risks are classied into two main categories – ‘Financial’ and ‘Business’. Financial risks consider market risk aecting the activity of each subsidiary (such as exchange rate, interest rate and commodities risk), as well as credit, counterparty and liquidity risks. Business risks, broadly dened as all risks that are not balance-sheet related, are broken down into further sub-categories, to help better understand and react to the dierent risk events: a) Operational and technology - the risk of loss resulting from inadequate or failed processes, people, and systems, or from external events. b) Compliance and reputational - possible negative impacts (economic – nes, penalties, etc. and other – exclusion from markets, etc.) of non-compliance with existing regulations and standards. For example, impact on brand image, business reputation and accounting risk. Strategic – those risks relating to the wider business environment (e.g. the macroeconomic environment, the sector / industry conditions, etc.) the market, competition, and medium to long-term decision making that may impact business continuity and protability. ■ Financial risks - Interest rate risk It is clear that signicant movements in interest rates may expose subsidiaries to higher borrowing costs, lower investment yields and/or decreased asset values. As a central rule, entities do not enter into speculative positions on interest rates of any kind but always try to follow natural immunization strategies i.e., matching durations of assets and liabilities. However, given the current low interest rate environment, each entity tries, in the measure possible, to secure xed (and low) rate nancing lines to avoid variations in cash ows and facilitate capital budgeting. If necessary, subsidiaries use derivatives to hedge any remaining interest rate risk, strict rules and limits, specic to each entity, regulate the use of such instruments. - Currency risk Viohalco holds stakes in a large number of companies with production plans and commercial relations spanning the globe. As such, they are exposed to nancial (transaction), accounting (translation) and economic potential losses due to volatility in foreign exchange rates. Companies manage this risk in a prudent manner, implementing natural hedges whenever possible (i.e. matching currencies in anticipated sales and purchases, receivables and liabilities) and VIOHALCO | ANNUAL REPORT 2021 69 using standard hedging products, such as forward contracts, if necessary. - Commodity risk Most Viohalco entities are industrial companies, using ferrous and non-ferrous raw materials as inputs. Fluctuations in commodity prices (especially metals and particularly copper, zinc and aluminium) may therefore expose them to lower product margins or trading losses. Future contracts traded in the London Metal Exchange (‘LME’) oer the obvious hedging choice for companies active in such metals. First, all metal price xing sales and purchase contracts are netted daily and the change in the net open commodity is generally hedged by LME future contracts so that Viohalco companies are not exposed to commodity price risk. Additionally, Viohalco subsidiaries may be aected from uctuations in energy prices. This risk is impacted by the on going CoviD-19 pandemic and the war in Ukraine. Monitoring of price indexes and forecasts, along with hedging mechanisms for longer term contracts, are utilized to protect companies from signicant uctuations in natural gas and electricity prices. - Liquidity risk For industrial companies, such as those forming the largest part of Viohalco’s holding portfolio, liquidity risk is the risk that a business will have insufficient funds to meet its financial commitments in a timely manner. Its two key elements are short- term cash flow risk and long-term funding risk. The latter includes the risk that loans may not be available when the business requires them or that such funds will not be available for the required term or at acceptable cost. Such risk may come from seasonal uctuations, business disruptions, unplanned capital expenditure, an increase in operational costs, a narrow funding market and other reasons causing inadequate cash availability. Viohalco companies constantly monitor cash ow needs and, on a quarterly basis, report monthly rolling forecasts to ensure sucient cash is on hand to meet its operating needs. Through monthly nancial reports, they closely track operating cash ow indicators, liquidity and leverage ratios and continuously assess available funding, both in the local and international markets. Finally, the Viohalco companies mitigate liquidity risk through careful cash ow management including optimizing working capital and maintaining unused, committed nancing facilities from a diversied number of nancial institutions. These allow their business to easily meet its future requirements or contingencies. - Credit risk Selling to a large number of customers spanning vast geographical regions and many sectors across the world, unavoidably creates a credit risk for Viohalco companies as their customers may default on their obligations. Such credit risk may be accentuated if a signicant portion of business is concentrated on a specic area, sector, or small number of clients. This risk is greatly mitigated by (a) avoiding receivables concentration of any kind, (b) executing robust creditworthiness checks for customers via credit rating agents, (c) setting relevant payment terms and credit limits, (d) demanding real or other security (e.g. letters of guarantee) for receivables whenever possible, and, nally, (e) using credit insurance extensively. ■ Business risks A. Operational and technology risks - Channel effectiveness risk Poorly performing or positioned distribution channels may threaten the subsidiaries’ ability to eectively and eciently access current and potential customers and end users. Subsidiaries manage channel eectiveness risk by appointing commercial executives per project/market. Periodic budget reviews are the main tools used for assessing and monitoring the eectiveness of distribution channel. - Procurement / Sourcing risk Limited sources of energy, metals and other key commodities, raw materials and component parts may threaten Viohalco companies’ ability to produce quality products at competitive prices on a timely basis. As such, all companies continuously aim to minimize the likelihood of such a risk occurring. Relevant measures include maintaining a wide and diverse suppliers base (geographically diversied, where possible), the existence of alternative material lists, the establishment of Service Level Agreements with key vendors and the reduction of reliance to the spot market through long term contracts. - Operation interruption risk The unavailability of raw materials, skilled labor, information technologies, or other resources and the danger of equipment VIOHALCO | ANNUAL REPORT 2021 70 breakdowns may threaten Viohalco companies’ capacity to continue operations. This being critical for industrial production, all subsidiaries diligently maintain their equipment, following well planned maintenance schedules formulated by their specialized maintenance departments. Plant equipment and production lines are also upgraded systematically to integrate new technologies and reduce obsolescence risk. All spare parts and consumables are gauged on criticality and safety stock levels are monitored. Some plants, facilities and production lines are interchangeable and have been mapped to ensure shifting and continuation of production if such a need arises. This risk is greatly mitigated by using business interruption insurance policies. - Product failure risk Faulty or non-performing products may expose Viohalco companies to customer complaints, warranty claims, eld repairs, returns, product liability claims, litigation and loss of revenues, market share and business reputation damage. In order to proactively mitigate the risk arising from actual or claimed defects in its products, companies have established rigorous quality management systems at their plants. They apply xed and formalized quality control procedures, while maintaining appropriate insurance coverage against such claims. Quality control procedures include sample testing per production batch or at item level at specic phases of production, establishment of monitoring equipment at set production phases and production lines and work centers to capture defects, and the implementation of end-to-end traceability systems, among others. In addition, companies have product liability insurance policies in place. - Information technology (IT) risk IT risk is usually dened as the likelihood of occurrence of a particular threat (accidentally triggered or by intentionally exploiting a vulnerability) and the resulting impact of such an occurrence on IT systems and processes. Most Viohalco companies are capital intensive and rely heavily on IT systems to guide and optimize production. IT systems bear a number of risks that arise naturally in the production environment, and thus the commercial environment overall, and may result in losses or legal liability. Such risks can revolve around disruptions due to IT equipment failure, disasters, human errors as well as unauthorized use, disclosure, modication, destruction of information, among others. Adequately identifying gaps that may result in risks, assessing the maturity of the existing controls, and identifying and implementing risk mitigation actions is an ongoing process that must consider evolving threats, controls, and the regulatory landscape. The continuous identication and application of appropriate and proportional controls that limit exposure against the aforementioned threats is vital to the integrity of IT systems in all companies and are legal requirements. Viohalco is conducting risk assessments and gap analyses against operational IT and information security risks in order to evaluate and continuously ameliorate its overall IT risk posture, as well as to comply with 2016/679 EU General Data Protection Regulation (‘GDPR’). As well as using industry standards for data and systems protection, companies request the services of Teka Systems, a subsidiary of Viohalco, focused on the implementation, customization and support of information systems. Teka is the ocial competence center of Viohalco and oers tailor-made applications and software support to Viohalco’s industrial companies as necessary. - Privacy risk Viohalco recognizes the need to protect personal data, not only as a legal compliance requirement vs the 2016/679 EU General Data Protection Regulation and other standing legislation, but also for the added value and competitive advantage it oers. The company is committed to protecting the personal data of employees, customers, suppliers, partners and investors. The aim is to adhere to the international standards and best practices and thus minimize risk against the privacy of individuals and their personal data. To that end, Viohalco adopted and implemented a Personal Data Protection Policy, set specic roles, procedures and controls for the protection of personal data throughout the activities spectrum of its subsidiaries, along with the establishment of overviewing mechanisms on risk mitigation actions and their continuous improvement. B. Compliance and reputational risks In response to requirements arising from Viohalco’s stock exchange listings, the Company has established the necessary structures and procedures to ensure continuous compliance and protect its reputation. This includes the adoption of its Corporate Governance Charter, which covers issues such as directors’ and managers’ accountability, good governance principles, insider trading, and conicts of interest. Laws and regulations apply to many aspects of subsidiaries’ operations including, but not limited to, labor laws, health and safety, environmental regulations, and building and operational permits, among others. Viohalco requires all companies in its holding portfolio to abide by all laws and regulations, whether at a local, European or international level. These may relate to health and safety in the production plants, labor and human rights, the protection of the environment, anti-corruption, bribery and nancial fraud. Viohalco requires its subsidiaries to develop their own policies for all such matters and to be exclusively responsible for compliance with these. Additional details are given in the Non-Financial Information Report section of this Report. C. Strategic risks - Country risk Adverse political actions may threaten subsidiaries’ resources and future cash ows in a country in which each subsidiary has invested, is dependent on for a signicant volume of business or has entered into a signicant agreement with a counterparty subject to the laws of that country. Companies address this risk by dierentiating their manufacturing and market reach. Viohalco companies currently have manufacturing sites in eight countries, a commercial network in 21 countries and products distributed in more than 100 countries worldwide. VIOHALCO | ANNUAL REPORT 2021 71 They also monitor the developments in the international and domestic environment on a continuous basis and adapt business strategy and risk management policies in a timely fashion to minimize the impact of macroeconomic conditions on their operations. - Industry risk Changes in opportunities and threats, competitors’ capabilities, and other conditions aecting the subsidiaries’ industries may threaten the attractiveness or long-term viability of these industries. Industry risk of the subsidiaries, which is related to the specic industry in which they operate, is primarily associated with the cyclicality of demand and the substitution rate of some products. Companies manage the former by expanding exports to global markets, to disperse cyclical exposure across geographical areas. The risk of substitution is addressed through dierentiation of the product mix, for example by shifting a portion of production to products where the substitution rate is lower. - Competitor risk The actions of competitors or new entrants to the market may impair any company’s competitive advantage or even threaten its ability to survive. Hence, strategic issues regarding response to competition are assessed as part of the annual budget process and strategic plan of all Viohalco companies. Exposure to competitor risk is captured through a daily review of market information. Relevant mitigating actions include a strong commitment to quality throughout the production phase, a competitive pricing policy in commodity products and a targeting of high-margin products. - Technological innovation risk As technology rapidly evolves, companies in Viohalco’s holding portfolio must ensure adequate innovation and investment to remain up to date. If they do not invest in the IT infrastructure necessary to eectively support current and future business requirements, this could aect sales, costs and revenues. In addition, companies may not successfully leverage advancements in technology to achieve or sustain competitive advantage or may be exposed to the actions of competitors or substitutes that do leverage technology to attain superior quality, cost and/or time performance in their products, services and processes. This strategic risk is primarily managed by Viohalco companies through the establishment of technical assistance and knowledge transfer agreements with global leaders in various sectors where the subsidiaries are active. All companies invest strongly in R&D and cooperate with scientic bodies and prominent international research centres. This strong focus on technology and innovation is also demonstrated through dedicated R&D departments at a number of Viohalco companies. 1. The set of perceptions about the company by the different stakeholders with whom it interacts, both internal and external. 2. The risk which concerns the proper and true economic and nancial reection of the companies’ reality as well as compliance with all related regulations (IFRS, etc.). 72 H. Non-financial information 73 VIOHALCO | ANNUAL REPORT 2021 74 ■ Introduction This document represents the Consolidated Disclosure of Non- Financial Information (hereinafter also the “Non-Financial Disclosure”, "NFD", "Statement” or "Sustainability Report") prepared pursuant to the Belgian Code of Companies and Associations (Legislative Decree no. 83180/11.09.2017) by Viohalco S.A. (‘’Viohalco’’, ‘’the Company’’) for nancial year 2021. The objective of this NFD is to provide the understanding of the business model, the activities, the main risks, and performance indicators of Viohalco with regard to the following non-nancial matters, also referred to as environmental, social and governance (ESG) matters: - Environmental - Social and labour - Human rights - Anti-corruption and bribery. The NFD comprises of non-nancial information for Viohalco and its subsidiaries that have a material contribution in the non-nancial matters under scope. The subsidiaries contributing in a material way come from all major operating segments except the real estate and R&D&Ι segments which due to their relative size, are not considered to contribute in a material way to the overall impact. The NFD has been drawn up in accordance with the United Nations’s Sustainable Development Goals (SDGs) reporting framework which embrace a very wide and universal approach to all sustainability issues facing today’s societies. The SDGs are a list of 17 interconnected global goals, designed to be a "blueprint to achieve a better and more sustainable future for all", that address current challenges societies all over the globe are facing. The 17 goals have 169 underlying, more specic targets that stimulate action in areas of concern. While Viohalco companies have a direct or indirect impact on all 17 SDGs, the NFD focuses on the SDGs directly impacted by the activities of the Company and its subsidiaries. The SDGs reporting framework serves as the basis for the reporting structure of non- nancial matters of the Company as it contains several non-nancial key performance indicators (KPIs) for the monitoring of all main risks associated with the non-nancial matters under scope in the Belgian Code of Companies and Associations. Due to the extensive number of KPIs selected to monitor Viohalco’s and its subsidiaries’ performance, the report is also based on the GRI Standards of the Global Reporting Initiative (GRI) for reasons of completion. ■ Highlights 2021 Expenditures for environmental management (in EUR) 30,567,315 Number of training hours 100,886 Manufacturing sites certied with ISO 14001:2015 89% Manufacturing sites certied with ISO 45001:2018 86% ■ Business Model Viohalco is a Belgium-based (listed on Euronext Brussels Exchange (VIO) and on the Athens Stock Exchange) holding company of leading metal processing companies in Europe. Uniquely diversied in metal sector activities and with an international presence, Viohalco companies are committed to sustainable manufacturing of high- quality, innovative and low carbon products and solutions with a wide portfolio and presence in dynamic markets such as building and construction, packaging, transportation (automotive, shipbuilding & rail), energy networks (oshore energy, utilities and power grids, renewable energy, gas and liquid fuels), HVAC&R (heating, ventilation, air conditioning and refrigeration), water supply, telecommunications, printing, and various industrial applications. Viohalco’s portfolio also includes a segment dedicated to technology, innovation and R&D, comprising companies focused on product innovation, industrial research and technological development, engineering applications, ERP application services. Viohalco is also active in the real estate sector, through a Real Estate Investment Company (REIC) that creates value through commercial exploitation of its diversied and high-quality portfolio spanning oces, shopping centres, hotels and logistics. Viohalco companies’ production model is based on secondary production and downstream processing of metals. This operational model is increasingly important in the value chain of metals for a climate neutral future as it increases demand for recycling of metals while at the same time reduces the carbon footprint and is therefore very well positioned for the new challenges today’s societies face, namely the transition to a low carbon economy adhering to circular economy principles. 75 Steel pipes Steel R&D&I and Technology Real estate Viohalco segments Cables ElvalHalcor Halcor - Copper and alloys extrusion division Sidenor Steel Industry Elkeme Noval Property Teka Systems Praksys Sovel Dojran Steel Stomana Industry Corinth Pipeworks CPW America Hellenic Cables Fulgor Icme Ecab Sofia Med Bridgnorth Aluminium Etem Bulgaria Steelmet Property Services ElvalHalcor Elval - Aluminium rolling division Symetal Elval Colour Aluminium Copper Cenergy Holdings ElvalHalcor Cablel Wires Epirus Metalworks More precisely, Viohalco operates under the following organizational structure, comprising 7 business segments. “2021 was a milestone year for Viohalco companies as a comprehensive plan and roadmap was created to address all environmental, social and governance risks through extensive indicators to measure our progress. Furthermore, the subsidiaries focused on increasing the share of secondary metals in the raw material input, as well as reduce operational carbon footprint to help their customers reach their own sustainability goals.” Ioannis Ippokratis Stassinopoulos Viohalco CEO VIOHALCO | ANNUAL REPORT 2021 76 A thorough description of each business segment activity is provided on pages 16-65. Several of Viohalco’s subsidiaries play an active and important role to the energy transition as well as the global transformation to a climate neutral future. The segment of cables is a signicant enabler of the energy transition and the European Green Deal with over 38% of its revenues coming from activity eligible under the Taxonomy Regulation to be considered as environmentally sustainable because of the signicance of power cables in the expansion of Renewable Energy Sources (RES) in the energy mix and the gradual decarbonization of the global economy. The segment of steel pipes (Corinth Pipeworks) is also well positioned to contribute signicantly in the energy transition away from solid fossil fuels with approximately 95% of its revenues coming from natural gas projects while at the same time, Corinth Pipeworks has developed solutions that can adapt to emerging technologies such as Green Hydrogen and Carbon Capture and Storage (CCS). The company, although not included in the eligible sectors of the Taxonomy Regulation, will play a signicant role in the penetration of low carbon fuels that can replace natural gas in the future. In particular, the segments of aluminium, copper and steel have a signicant contribution of secondary raw materials in their total raw materials input which signicantly reduces the carbon footprint of their products as well as the dependence on natural resources. Consequently, due to their relatively low carbon intensity, Viohalco companies have less exposure to carbon pricing going forward and have signicantly lower cost risk exposure than primary metal producers. Indicatively, the benets of secondary production of metals are outlined below: Aluminium • By using aluminium scrap, CO 2 emissions can be reduced by 92% compared to primary aluminium. • Recycling aluminium saves 95% of the energy needed for primary production. • One tonne of recycled aluminium saves up to 8 tonnes of bauxite, 14,000 kWh of energy, and 7.6 cubic meters of land. Copper • By using copper scrap, a reduction by 65% in CO 2 emissions is achieved • Recycling copper saves 85% of the energy needed for primary production Aluminium ElvalHalcor Elval - Aluminium rolling division Elval Colour Etem Bridgnorth Aluminium Etem Bulgaria Copper ElvalHalcor Halcor - Copper and alloys extrusion division Sofia Med Cablel Wires Epirus Metalworks Steel pipes CPW America Corinth Pipeworks Cables Fulgor Hellenic Cables Icme Ecab Steel Sovel Sidenor Steel Industry Stomana Industry Dojran Steel R&D&I and Technology Elkeme Praksys Teka Systems Real estate Noval Property Steelmet Property Services Symetal VIOHALCO | ANNUAL REPORT 2021 77 Steel • Using steel scrap in the production process reduces CO 2 emissions by 58%. • Recycling steel saves 72% of the energy needed for primary production (i.e., 4,697 kWh per tonne). • Recycling one tonne of steel saves 1.4 tonnes of iron ore, 0.8 tonnes of coal, 0.3 tonnes of limestone and additives, and 1.67 tonnes of CO 2 . • Using recycled steel to make new steel reduces air pollution by 86%, water use by 40%, and water pollution by 76%. The ambitions of the European Green Deal can only be achieved with an increased contribution of sustainable metals’ production. It is estimated that a climate neutral future will demand 3-4 times more metals and many of Viohalco’s subsidiaries’ products will have further demand. Steel construction products will be critical in the ‘green building’ sector, with their low carbon content and high circularity prole, while aluminium is vital for lightweight mobility, sustainable packaging and energy ecient facades in sustainable buildings. At the end of their useful lifetimes, the majority of Viohalco products across all segments are 100% recyclable and will return to the value chain indenitely. Products made from steel, aluminium and copper can be completely recycled as often as desired and reintroduced into the economic cycle with virtually no waste or loss of quality. In addition, the production of Viohalco’s production installations meet European high standards for environmental and climate protection that far exceed global average standards. Integration of sustainability principles in business model Due to the nature of the industrial processes of the subsidiaries as well as the products’ markets, Viohalco companies’ future has a strong correlation on the ability to operate in a sustainable manner. The subsidiaries are in the process of developing additional goals towards carbon footprint improvement as well as energy eciency measures while at the same time becoming more engaged with their suppliers in order to ensure responsible sourcing of raw materials and services. Furthermore, two subsidiaries, Hellenic Cables and Corinth Pipeworks, have already committed to the Science Based Targets Initiative (SBTi) to meet near-term (2030) and long-term net zero targets at the latest by 2050. More specically, Hellenic Cables has already submitted its targets pending validation from SBTi, to halve its scope 1 and 2 emissions (50% by 2030 from a 2020 base year) and reduce value chain emissions (scope 3, including raw materials and commuting emissions) by 25%, within the same timeframe. Hellenic Cables also commits to increase annual sourcing of renewable electricity to 80% and 100%, by 2025 and 2030, respectively. Over and above near-term progress, Hellenic Cables projects to reach net- zero greenhouse emissions across its entire value chain before 2050, from a 2020 base year. Corinth Pipeworks submitted its commitment in February 2022 and is awaiting for its approval from SBTi. Viohalco companies are well positioned not only to operate in a low carbon economy, but to increase market share as the operational model allows for the exibility to operate with various quality metal sources, primary or secondary metals of various qualities. Most Viohalco companies are electricity intensive and the projected decarbonization of the energy grid will naturally improve and further decrease the indirect carbon footprint of the products contributing to Europe’ ambitious goals of a decarbonized economy. Viohalco companies are oriented towards a sustainable manner of operation with respect to all its stakeholders. Sustainable action and long-term corporate procedures have played a signicant role in achieving and strengthening the resiliency of Viohalco companies under challenging market conditions and changing customer demands. Viohalco companies acknowledge their duty towards current and future generations of employees, customers and other stakeholders. Viohalco companies comply with the Paris Agreement requirements by operating modern industrial plants with strong environmental foundations while at the same time manufacturing products that will play a signicant role in making a climate neutral future a reality. The sustainable path Viohalco companies have chosen to follow does not come without a demand for actions. Based on what has been achieved so far, Viohalco companies are still facing numerous operational, non-nancial risks that require constant monitoring and mitigation while the continuously changing and more demanding regulatory framework, especially due to the upcoming “Fit-for-55” Initiative, often create conditions of unfair competition with global competitors. Furthermore, the current environment with energy prices as well as energy security is of great concern and needs constant measures to ascertain business continuity. The greater risks emanate from the environmental regulatory environment and health and safety matters where several improvement areas have been identied and ambitious goals have been set. ■ ESG Roadmap The year 2021 was a very important year for Viohalco companies in the context of sustainability. The Company created a comprehensive framework within which all subsidiaries are required to operate. The Company established an Environment, Social and Governance Roadmap (“ESG Roadmap”) by assessing all related risks and opportunities and integrating all these matters into its business strategy. The integration considered several new parameters aecting its approach such as the European Green Deal and its requirements, the strict regulatory framework the subsidiaries operate under (especially in environmental compliance and labour laws), the emergency created by climate change and its eects, water availability, health and safety concerns, capability building, as well as the recent challenges in the energy sector aecting all of our companies. The ESG Roadmap refers to the adoption of seven (7) core company policies covering the entire framework of all environmental, social and governance matters. Each policy is thoroughly monitored by relative metrics, internal and external controls for adequate due diligence on important matters and regulatory compliance as well as appropriate governance measures to ensure transparency and accountability. Furthermore, the ESG Roadmap includes the obligation of the industrial subsidiaries to establish goals in strategic matters that include: (1) the gradual replacement of all electricity supply with Renewable Energy Sources (RES) as soon as technically and economically feasible; (2) the commitment to specic near and long-term carbon reduction targets on all carbon-intensive activities; (3) the evaluation of top tier suppliers on ESG issues; and (4) the establishment of a ve-year concrete, improvement action plan for health and safety for industrial companies. The rst two strategic goals are part of Viohalco companies’ operational model as these two elements are essential for the production of low carbon products. VIOHALCO | ANNUAL REPORT 2021 78 Regarding the supply chain, it is important to note that Viohalco’s subsidiaries operate at international level with global production supply chains. Given the dierent environmental, human rights as well as labour standards across the globe, it is Viohalco companies’ intent to embrace a common standard of ethical values and legal requirements within the supply chain. Viohalco companies are commited to ensuring that all employees return home safely every day. This is why it is of strategic importance to provide a safe working environment and invest in a continuous improvement programmes. During 2021, Viohalco companies, with the assistance of a globally leading consulting rm in health and safety (DuPont Sustainable Solutions), performed a health check of existing management systems and improved safety programmes through workshops, safety leadership training, etc. to improve health and safety performance. The ESG Roadmap includes other areas of focus such as: • environmental performance with water, waste, and chemicals management at the forefront; • gender equality; • working conditions; • labour and human rights; • business ethics; • the establishment of a whistleblower mechanism. ■ Sustainability Governance Viohalco’s sustainability strategy cannot be realized without the proper governance structures related to ESG matters in place at Board level and across the various subsidiaries. This is an essential ingredient in order to translate the ambitions and goals into actions. Viohalco’s Board has validated the ESG Roadmap including the following key pillars: establishment of policies and relevant KPIs, goal setting in material issues, establishment of appropriate due diligence mechanism, implementation of ESG in supply chain and oversight of ESG strategy, risks, and issues at Board level. The ESG Roadmap was further adopted at Board level by most of the subsidiaries. An ESG Working Group has been set up in order to support and advise the Board on ESG matters, and hence provide the assurance that such issues are adequately addressed. An executive management working group within Steelmet comprising of managers from all cross-referencing departments meet on a regular basis to discuss progress of the implementation of the ESG Roadmap, as well as new ESG initiatives. As stated in the “Control and Relationship with Subsidiaries” section of the Financial report on page 100, Steelmet is a Viohalco subsidiary assigned by a subcontracting agreement with the functional support towards all companies of Viohalco. To ensure compliance and accountability with the ESG Roadmap by the Viohalco subsidiaries, a compensation scheme for subsidiaries’ General Managers linked with performance on ESG matters is planned for implementation in calendar year 2022. In addition, an ESG coordinator at each subsidiary level was assigned the role of coordinating the various functions, facilitating relevant ESG actions at subsidiary level and reporting progress on a semi-annual basis. Essential role in our corporate governance structure is the implementation of a whistleblower mechanism which covers all the subsidiaries in all geographical regions Viohalco companies operate. The mechanism, which will be implemented in 2022, establishes the proper channels of communication for anyone either within or outside Viohalco and its subsidiaries, to report unethical or illegal wrongdoing, while at the same time ensuring comprehensive protection and support for reporting persons. All of the above structures were created to ensure that our organic growth and economic success do not come at the expense of fair competition, safe working conditions or environmental protection. Policy framework Viohalco as a holding company of a predominantly industrial portfolio believes that its companies must demonstrate the same responsibility and share the same values and commitment in sustainability matters in order to preserve long-term value for its shareholders. Viohalco companies are committed to operating safely in an environmentally and socially responsible manner and to partnering with their customers and community stakeholders to shape a more sustainable future for all parties involved. Viohalco companies aim to establish a relationship of responsibility and trust with its counterparties and to meet expectations by keeping faith with commitments undertaken. The responsible operation of the companies is considered a primary goal and is fundamental for their sustainable operation. During 2021 Viohalco adopted seven policies that cover the entire spectrum of environmental, social and governance matters. These policies cover the following areas: 1. Environment 2. Energy and Climate Change 3. Health and Safety 4. Labour and Human Rights 5. Supplier Code of Conduct 6. Business Ethics and Anti-corruption 7. Sustainability These policies can be found at https://www.viohalco.com/845/en/Policies/ Viohalcο’s core values are reected in its policies that its companies should follow, at a minimum, regarding sustainability matters. The companies in turn have developed their own respective, detailed policies adhering to Viohalco’s policy principles at a minimum. Environment Viohalco companies are committed to operate with responsibility and respect for the environment and the society. Sound environmental management of all production and storage installations is one of the most important focus areas and is essential to the sustainability of the companies’ s activities. Companies shall operate in full compliance with applicable national and EU environmental legislation, as well as with the specic environmental operational terms of each plant, always in a state of transparency and participation in an open dialogue on environmental matters with all the stakeholders. Energy and Climate Change Viohalco companies are committed to being a signicant contributor to the global eort to tackle climate change. As consumers of both non-renewable and renewable energy, Viohalco companies are committed to buying and using energy in a responsible, ecient, and cost-eective manner with the aim to reduce the carbon footprint. VIOHALCO | ANNUAL REPORT 2021 79 Health and Safety Viohalco companies are committed to continually promote health and safety for their employees as well as for their partners, including customers, suppliers, contractors, and visitors. All the companies shall strictly comply with all applicable legislation and fully implement all suitable standards, instructions and procedures regarding health and safety. Labour and human rights Viohalco companies do not accept any discrimination of race, gender, religion, age, nationality, social or ethnic origin, disability, belief, sexual orientation, or political and trade union engagement. These principles apply to the recruitment of new employees, to employees with an employment contract and to the professional merit-based promotion of employees. The only decisive factors of employment are performance, experience, eciency, skills, and qualications. Viohalco and its companies do not accept any form of forced labour. All work performed in the companies must be voluntary. The employment of individuals under the applicable statutory minimum age for workers is prohibited. Viohalco and its companies recognise the right of all employees and stakeholders to work with dignity and believe that everyone in the companies is responsible for having due regard for human rights. Viohalco and its companies support and respect the fundamental principles, as articulated in the Universal Declaration of Human Rights as well as the protection of international human rights within the sphere of their inuence and will not be complicit in human rights abuses. The Companies’ policies and procedures adhere to all applicable domestic laws concerning freedom of association and collective bargaining, non-discrimination, forced labour and underage workers in the workplace. Supplier Code of Conduct The Supplier Code of Conduct has the goal of ensuring that Viohalco companies business partners share and promote Viohalco companies’ fundamental values in ethics and sustainability principles. Viohalco companies require their business partners to comply with all the principles in the Supplier Code of Conduct and will correspondingly promote these principles within their own supply chain. Business ethics and anti-corruption Viohalco and its companies are committed to conducting its business with honesty and integrity and in compliance with all relevant laws. Viohalco and its companies ensure transparency in all interactions and acknowledges that it has a moral and legal obligation to act responsibly in all jurisdictions. Viohalco and its companies have put internal controls in place to ensure that illegal and unethical business activity does not occur. The performance and competitiveness are strengthened solely through lawful conduct. Viohalco and its companies have internal controls to ensure all kinds of bribery and corruption do not occur. Sustainability Viohalco, as a holding company, is committed through its subsidiaries’ activities to meet the needs of society by delivering, through its subsidiaries, products in a reliable, inclusive, and sustainable manner, and in doing so, creating shared value for all stakeholders. Viohalco companies commit to operate in a way that creates progress towards the UN Sustainable Development Goals. Through this commitment, Viohalco companies seek to help preserve the environmental, social, and economic assets that are fundamental for society and important to our long-term value creation. Viohalco companies build on the contribution of their employees and fully integrate sustainability in their strategy, business plans, operations, aiming to maximise its positive eect by engaging with all business partners. Operational Due Diligence The compliance of subsidiaries’ policies incorporating Viohalco’s policies’ principles is ensured by an extensive due diligence programme performed by Steelmet, which is responsible, , for the monitoring of Viohalco companies’ performance including non- nancial matters. Steelmet employs procient auditors in their respective eld of expertise who perform periodic reviews and assessments of the subsidiaries. During their periodic business reviews, the top management of Viohalco companies reports to Steelmet on performance metrics, where applicable, and analyses risks and challenges as well as corrective actions that are deemed necessary. The progress of corrective actions as well as any non-compliance matters are addressed, and the subsidiaries are required to commit to a veriable course of action within a specic timeframe. Steelmet reports on a regular basis to Viohalco’s Audit Committee identifying potential risks on these matters. In addition, due diligence in the matters of environment, energy management and health and safety is also performed by external auditors during periodic management system certication reviews. The entirety (100%) of Viohalco production companies under the scope of this report are certied with the Environmental Management System ISO 14001:2015 and the Occupational Health and Safety Management System ISO 45001:2018. When accounting for all production installations including those outside the scope of this report, 89% are certied with the environmental Management System ISO 14001:2015, and 86% with the Occupational Health and Safety Management System ISO 45001:2018. Considering that health and safety (H&S) matters are of strategic importance to Viohalco’s subsidiaries, further evaluations and health checks of the H&S programmes are performed by a third party (DuPont Sustainable Solutions) on a periodic basis to ensure a transparent and objective assessment. The above stated management systems lays out responsibility areas and operational practices for these task areas across all companies’ operations while at the same time create a regular monitoring of compliance with internal and external audits. To ensure that all subsidiaries are following a continuous improvement path, Steelmet professionals have close cooperation with subsidiaries’ top management and pertinent personnel to draw continuous improvement plans with specic, prioritized, improvement actions as well as benchmarks that need to be achieved within certain time frameworks. ■ Materiality analysis and performance outcome Viohalco is a holding company with a majority stake in multiple industrial companies of various sizes as described on page 3. Hence the scope of this report focuses on the legal entities with the most signicant impact and potential risks on non-nancial issues. These VIOHALCO | ANNUAL REPORT 2021 80 companies are the largest production facilities in terms of revenue and personnel employed which have a direct correlation to environmental, social and governance issues. The selection has been made basedon their comparatively large labour force, demand in natural resources such as water and raw materials, large energy intensity and carbon footprint, extensive business impact and therefore the largest and material overall impact in terms of non- nancial matters under the scope of this report. The two quantitative criteria that these companies meet are: a) a minimum 3% contribution to the Viohalco total consolidated revenue, and b) minimum 200 employees. The outcome of this selection is the following eleven companies: 1. ElvalHalcor (aluminium and copper segment) 2. Bridgnorth (aluminium segment) 3. Symetal (aluminium segment) 4. Soa Med (copper segment) 5. Hellenic Cables (cables segment) 6. Fulgor (cables segment) 7. Icme Ecab (cables segment) 8. CPW (steel pipes segment) 9. Sidenor (steel segment) 10. Sovel (steel segment) 11. Stomana Industry (steel segment) The above list includes companies from all Viohalco’s industrial segments. The non-nancial information for the above-mentioned companies are consolidated and presented on a per-segment basis as the companies within the same segment have similar non- nancial issues and risks. Indicatively, the above companies include approximately 91% of revenue before consolidation and 72% of Viohalco companies’ total employees. The Real Estate and R&D&I segments do not meet the two criteria due to the nature of their activities which have signicantly lower impact on environmental, social and governance issues under scope of the Belgian Code of Companies and Associations . They are more service-oriented, unlike the industrial companies with a much higher footprint in environmental and social issues. Due to the various geographic locations of each company and the varying degree of material environmental matters each company may be facing (carbon and water risks vary among subsidiaries depending on geographic location), it was deemed necessary that a separate materiality analysis is performed for each company. The selection of the material issues reported in the present report was based on an extensive materiality analysis performed separately by each company. The materiality analysis in each subsidiary was performed according to the GRI Standards within the last two years and a new materiality analysis will be performed within 2022 due to the rapidly changing business environment. The stakeholders considered in the materiality analysis were employees, customers, business partners, academic institutions, governments, local communities, local government, shareholders, nancial institutions, and suppliers. Several issues are included and assessed in the materiality analysis, such as environmental issues, employee issues, working conditions, compensation, products, social issues, business ethics, etc. The identied topics form the basis of this report. Based on these materiality analyses from each company, the major and more commonly found matters and associated non-nancial risks were selected due to their potential to negatively impact the companies’ business relations, products, and long-term sustainable operation. The non-nancial issues identied in the materiality analysis phase of the companies and corresponding risks were then correlated to non-nancial metrics from the SDGs’ reporting framework, where available. Furthermore, GRI Standards were selected to supplement SDG metrics to cover the entire spectrum of metrics for each material matter to assess the performance and risk exposure. Viohalco, as previously stated, has identied the major and more commonly found areas of material impact that have been selected by the individual companies’ materiality analysis as well as stakeholder assessment, and the main ESG issues and risks of concern are those listed in the table below. VIOHALCO | ANNUAL REPORT 2021 81 Issue identied Issue Relevant Viohalco subsidiaries’ risk area of material in materiality analysis category SDG impact Water availability and wastewater management Energy eciency, sources of energy Climate change impact Environmental protection and responsible production (waste management, circular economy) Occupational Health and Safety Labour and human rights Responsible sourcing Transparency and anti- corruption Environment Environment Environment Environment Social Social Social Governance Water intensity, water availability, compliance with wastewater discharge limits Energy consumption, availability of low carbon energy at competitive cost Carbon emissions of production, carbon intensity of raw materials Accidental releases to the environment, waste management, circularity of production process, hazardous chemicals monitoring Provision of safe working environment Equal rights among workers, labour conditions, training for employees’ skills development Environmental impact and human rights in the supply chain Business ethics, data privacy, compliance with regulatory system VIOHALCO | ANNUAL REPORT 2021 82 ■ Environmental Responsibility Water availability and wastewater management (SDG 6) Water is an essential element of Viohalco companies’ production process and therefore its responsible use is critical for the companies’ business continuity. Responsible use of water includes: • the reduction of water intensity utilizing water conservation technologies where possible, the continuous monitoring of consumption so leaks can be detected on time and the preventive maintenance of water networks to avoid water losses; • carefully assessing water availability and the adoption of measures, when needed, for adequate alternatives of supply in times of water shortage; • proper maintenance and operation of wastewater treatment plants to have full compliance with water discharge limits. The availability of industrial water is of critical importance and the majority of the plants have a programme of water consumption monitoring in order to improve their water intensity. There are continued eorts to decrease water consumption as part of the companies’ long-term improvement of their environmental footprint. The aluminium and copper segments experienced an increase in total water consumption due to higher production volumes while the water intensity of the individual companies remained steady except the aluminium segment of ElvalHalcor which showed an improvement of 8% in water intensity. The steel and cables segments also showed a signicant reduction in water consumption in 2021 despite the higher production volumes which is attributed mostly to improvements in the water intensity of Sovel (18%) and Icme Ecab (17%) which proves that the water reduction eorts have a signicant eect on the water intensity of the individual companies. Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 Water consumption (10 3 m 3 ) 977 884 861 765 699 682 2,509 2,530 3,025 Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 Water consumption (10 3 m 3 ) 305 315 403 44 63 71 During 2021, none of the subsidiaries were aected by water shortages and water reserves in all geographic locations. It is important to note that none of Viohalco’s companies is operating in a declared water-stressed areas. However, the companies monitor water availabilityand the hydrologic cycle as there may be changes in the future, especially considering the expected eect of climate change in the Meditarreanean region. The sourcing of water varies depending on the region. Approximately 32% of the companies’ source water directly from extraction wells while the rest 68% receives the water from the local water companies. Viohalco companies operate 21 installations throughout Europe that are subject to the Industrial Emissions Directive (Directive 2010/75/EU) and are therefore required to meet very stringent emissions limits in atmospheric emissions standards as well as water euents. The above- stated plants are required to meet Best Available Technique Associated Emissions Levels (BAT-AELs) that are among the strictest in the world and require extensive investments in environmental infrastructure as the plants require, in many cases, high level of water treatment to meet local discharge limits. The discharge points are regularly monitored either by automated systems on a 24-hour basis or periodically, by specialized personnel. The discharge of treated wastewater is a very important issue especially for the companies discharging treated wastewater directly to a water body and not to a wastewater network for further treatment. The measurement of possible incidents of discharge limits exceedances is critical in identifying the level of compliance as well as the possibility for any need of corrective measures. The wastewater discharge of all the companies are monitored closely by the pertinent authorities on a periodic basis. During 2021, there was one administrative ne for one occurrence in Stomana Industry collected wastewater samples. Energy consumption and sources of energy (SDG 7) Most of Viohalco companies are electricity intensive because of the nature of metal processing, both in metallurgy as well as downstream processing. Energy eciency of industrial operation is an extremely important matter that besides its obvious economic implications, has also a direct eect to the indirect carbon footprint (Scope 2 emissions). Energy ecient operations are considered by Viohalco and its subsidiaries absolute prerequisites for securing long-term viability. The focus of energy eciency eorts is on identifying investment opportunities in energy eciency measures through periodic energy audits performed by specialized consultants. It is important to note that 67% of the plants in the scope of the NFD are already certied with the Energy Management System ISO 50001:2018 and hence, are required to demonstrate continuous improvement of energy-related KPIs. The Viohalco companies generally purchase electricity from the main energy suppliers of the countries they operate as none of the companies own their own energy source. The energy consumption of each segment is shown below. All the segments experienced an increase in total energy (thermal and electrical) consumption in 2021 due to higher production volumes. The energy intensity of the individual companies VIOHALCO | ANNUAL REPORT 2021 83 remained at similar levels as in 2020 with small variations (<2%) from year-to-year intensities except in the case of Elval, the aluminium rolling division of ElvalHalcor S.A., which showed an improvement of 8% in energy intensity, primarily due to the first full of operation of the new, more efficient, four stand tandem hot-rolling mill. Besides energy consumption, it is of strategic importance for Viohalco subsidiaries to have access to low carbon electricity to minimize their carbon footprint as well as to decrease their exposure to carbon pricing through indirect emissions. The numbers shown in the following table reflect the grid energy mix and renewable energy share for the respective grid. The companies’ strategic goal is to cover the entirety of its electricity needs with renewable energy. Given their geographic footprint and the existing power market regulatory frameworks in these countries, currently there are limited available viable routes towards this goal. In the meantime, the companies continuously explore alternatives for direct supply of renewable electricity, such as bilateral or market based Green PPAs. As mentioned earlier, the entire cables segment as well as Corinth Pipeworks are in the nal stages of securing such PPA which are expected to deliver 80% RES power by 2025 at the latest. Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 Total energy consumption (10 3 MWh) 1,099 978 993 375 353 348 1,710 1,572 1,710 Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 Total energy consumption (10 3 MWh) 169 153 151 34 48 56 Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 Renewable energy share in electricity (%)* 28.6 28.6 25.3 22.5 22.4 19.9 23.8 23.6 20.7 Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 Renewable energy share in electricity (%) 32.7 32.8 29.6 25.9 25.9 22.9 * All data based on AIB 2019-2020 residual mix reports (Greece, Bulgaria, Romania). UK data based on UK National Statistics on Energy report 2021. ** Number is an estimation as nal gures for the Greek and Bulgarian energy grid are not nalized as of the date of publication Climate change impact (SDG 9) Climate protection is one of the priority issues on the European Union agenda. Climate change presents a threat to the viability of the planet and the EU has the ambition of becoming the rst climate neutral continent in the world by 2050. Viohalco companies support EU’s “Roadmap to 2050” and have committed to contribute actively and de cisively by reducing carbon emissions in their operations as well as through low carbon enabling products that are vital in the energy transition and for the customers to meet their own sustainability goals. The biggest challenges the companies commonly face is the minimisation of carbon emissions, both direct (Scope 1) and indirect (Scope 2) but most importantly, Scope 3 emissions (supply chain) as the latter generally contribute for the vast majority of embedded emissions in the delivered products. Due to their relatively high electro-intensity, certain Viohalco companies generally have a much higher Scope 2 emissions than Scope 1 emissions. As mentioned earlier, the companies have a strategic goal to cover the entirety of its electricity needs with renewable energy PPAs. Given their geographic footprint and the existing power market regulatory frameworks in these countries, currently there are limited available, viable routes towards this goal. The total footprint gures below (Scope 1 and 2) are reported according to Greenhouse Gas Protocol Scope 2 Guidance (https://ghgprotocol.org/scope_2_guidance) which is the most commonly used standard internationally. It is important to note, however, that in order for metal production companies in general to reach net-zero emissions by 2050, a global transformation of industrial production will be required as the necessary investments are technologically and economically several years (decades in some cases) away until they reach industrial scale. These elements are among others, green hydrogen to replace natural gas for thermal energy and a continuous supply of low carbon electricity as currently the energy storage is not competitive enough to ascertain 24-hour delivery of green energy. The potential for the further reduction of carbon intensity, therefore, has external limitations and higher reduction potentials must rst be developed and tested on an industrial scale before being incorporated in the companies’ operations. In particular, two Viohalco subsidiaries, Hellenic Cables and Corinth Pipeworks, have already committed to the Science Based Target Initiative (SBTi) to meet near-term (2030) and long-term net zero targets at the latest by 2050. More specifically, Hellenic Cables has already submitted its targets pending validation from SBTi, to VIOHALCO | ANNUAL REPORT 2021 84 Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 Direct emissions (Scope 1) 148,086 131,118 132,710 40,497 37,562 36,747 187,987 160,612 184,675 Indirect emissions (Scope 2) 163,664 148,330 169,085 65,479 59,675 70,271 529,710 492,511 615,181 Total carbon emissions 311,750 279,448 301,795 105,976 97,237 107,018 717,698 653,123 799,856 Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 Direct emissions (Scope 1) 14,724 15,743 13,989 1,797 3,212 2,434 Indirect emissions (Scope 2) 40,510 36,594 42,024 13,096 19,887 26,740 Total carbon emissions * 55,235 52,337 56,013 14,893 23,099 29,174 * Total carbon emissions in tn CO 2 / yr. Figure includes Scope 1 and Scope 2 emissions Environmental protection and responsible production (SDG 12) Viohalco companies make continuous eorts to minimize the environmental impact of their operations. Vital to this eort is the implementation of prevention measures in chemicals storage and use as well as continuous monitoring for the case of accidental incidents (spills or leaks) to the environment. All environmental incidents that have the potential to impact the environment directly or indirectly are closely monitored and procedures have been developed for their immediate detection, investigation, and immediate remediation if they do occur. All necessary safety measures (secondary containments, implementation of zone owners, etc.) have been implemented by the companies, so that the probability of a pollution incident is very low. During 2021, no such incidents with any impact on the environment occurred. All spills of chemicals or fuels that occurred in 2021 were contained within the secondary containment structure in place and were immediately resolved without consequences. It is important to note that all the installations under scope of the NFD are certied according to ISO 14001:2015 international standard. As part of the ESG Roadmap, Viohalco and its subsidiaries implemented in 2021 a new initiative to identify, record and ag associated hazard risks of all the chemicals purchased, stored, and used in the industrial plants. This project, due to its size, is expected to be completed within 2022. Viohalco companies are committed to environmentally friendly waste management and aim primarily at waste generation reduction and improvements related with reuse and recycling, as well as identifying contractors with a more environmentally friendly treatment method. The companies’ goal is to maximize closed loops cycles according to circular economy principles and the European Green Deal initiatives. Waste volumes generally increased in 2021 due to the higher production volumes across most segments. Although waste generation intensity varies signicantly depending on the production process, the waste intensity per company has remained at similar levels. It is noticeable, however, that the steel segment which is the most waste-intensive segment of Viohalco continues to improve its waste footprint with year-to-year improvements. Due to the gradual decharacterization of its waste from the “waste status” to “by-products” status according to the Waste Framework Directive , they improved the waste intensity 19% year-over-year on a consolidated basis. The portion of the generated waste that is sent for reuse, remanufactured or recycling remained at high levels for all segments supporting the transformation to a circular economy. halve its scope 1 & 2 emissions (50% by 2030 from a 2020 base year) and reduce value chain emissions (scope 3, including raw materials and commuting emissions) by 25%, within the same timeframe. Hellenic Cables also commits to increase annual sourcing of renewable electricity to 80% and 100%, by 2025 and 2030, respectively. Over and above near-term progress, Hellenic Cables projects to reach net-zero greenhouse emissions across its entire value chain before 2050, from a 2020 base year. Corinth Pipeworks submitted its commitment in February 2022 and is awaiting for its approval from SBTi. Currently, there are ve Viohalco companies in the EU Emissions Trading System (ETS) and one company in the corresponding UK Trading System. All Viohalco companies in the corresponding trading systems receive less free allowances than their actual emissions and a result, they are required to purchase carbon allowances on a annual basis. This shortage of allowances has an increasingly negative eect on their competitiveness as it does in over 95% or European industrial companies that participate in the ETS. The cost-free allocation is based on benchmarks, which unfortunately are far from adequate for even the most ecient Viohalco companies’ industrial plants. Total carbon emissions are shown below in order to show the materiality of carbon emissions and the corresponding exposure each segment has. The higher total emissions across all segments reects the higher production volumes in 2021 compared to 2020. The carbon intensities of the individual companies remained at similar levels as last year while Elval showed a signicant improvement (7.6%) due to the reduction of indirect emissions. VIOHALCO | ANNUAL REPORT 2021 85 Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 Waste generation (tn) 61,183 52,738 51,269 30,663 31,795 36,217 184,325 204,856 358,818 Waste reused, re manufactured and recycled (%) 98 98 98 95 96 95 86 88 94 * Waste reused, remanufactured, recovered and recycled measured versus total waste generated EU Taxonomy The EU's Regulation on the establishment of a framework to facilitate sustainable investment (the Taxonomy Regulation EU 2020/852) requests (Article 8) that companies subject to an obligation to publish non-nancial information shall disclose in their NFD the proportion of their turnover, capital expenditure and operating expenditure related to “Taxonomy-eligible and Taxonomy non-eligible economic activities”. 1 Viohalco has evaluated the business activities against the EU Taxonomy eligibility criteria for climate mitigation and climate adaptation and has subdivided eligible activities into four types (cf. Disclosures Delegated Act EU 2021/2178): Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 Waste generation (tn) 15,372 15,211 14,162 16,130 25,077 27,598 Waste reused, re manufactured and recycled (%) 92 91 89 99 99 99 * Waste reused, remanufactured, recovered and recycled measured versus total waste generated Eligible economic activity Description NACE- Code Climate change Climate change mitigation adaptation 3.8 Manufacture of aluminium Secondary aluminium production C24.42 3.9 Manufacture of iron and steel Manufacture of iron and steel, EAF production with over 90% of steel scrap relative to product output C24.10 3.1 Manufacture of renewable Manufacture of insulated wiring cables C27.32 energy technologies products used for the renewable energy sector 4.9 Transmission and distribution Construction and Installation services of C35.13 of electricity electricity distribution networks C35.12 The cables segment produces cables products that are used in various applications including renewable technologies manufacturing (3.1), as well as installation projects for transmission and distribution of electricity (4.9). The activity of the steel segment, produces crude steel in Electric Arc Furnaces (EAF) (3.9), using as raw materials scrap steel in a percentage higher than 90% relative to steel product output. The aluminium segment engages in secondary aluminium production (3.8), through the dierent aluminium companies. The table below present the necessary KPIs for the eligible Viohalco companies, based on Article 8 reporting requirements. 1. Activities that qualify as environmentally sustainable under Articles 3 and 9 of the same Regulation. VIOHALCO | ANNUAL REPORT 2021 86 ■ Responsibility towards society Occupational health and safety (SDG 3 and 8) The nature of the diversied portfolio of Viohalco companies results in a dierent occupational health and safety risk prole for each company. The dierence is attributed to many factors such as type of production, thermal metallurgy, rolling, extrusion, chemical coating, etc., technology of infrastructure, equipment condition and safety features, manufacturing processes and materials used. Irrespective of the dierent nature of the company activity, the health and safety of the companies’ personnel is of utmost importance and the companies invest signicant amount of resources to improve working conditions and create a safer working environment. Viohalco companies are committed to provide their employees a safe working environment and this is provided through investments in improving existing safety infrastructure (machine guarding, LOTO), increasing risk awareness and Behavior Based Safety through training programmes and establishing solid procedures and management systems. Viohalco companies in an eort to improve risk awareness among employees, develop detailed risk assessments by conducting a systematic hazard identication associated risks evaluation, subsequently facilitating the implementation of reasonable control measures. Emphasis is also given in performing accurate incidents analysis to ensure there is a solid framework in place for a systematic approach to incident reporting, management, and investigation, thereby enabling eective corrective and preventive actions to be set. During 2021 and as part of the ESG Roadmap strategic goals, all subsidiaries were required to establish a ve-year improvement plan. The year 2022 will be the rst year of the action plan implementation and Steelmet personnel will monitor closely the timely implementation. It is important to note that all the installations under scope of the NFD are certied according to ISO 45001:2018 so the installations are subject to external audits by the certifying bodies as well. As health and safety matters are of strategic importance to Viohalco’s subsidiaries, further evaluations and health checks of the H&S programmes are performed by a third party (DuPont Sustainable Solutions) on a periodic basis to ensure a transparent and objective assessment. These assessments are additional tools for identifying improvement areas. Three out of the ve segments showed a deterioration in the Lost Time Incident Rate (LTIR) and the companies have identied the improvement areas they will focus on in 2022 as well as the subsequent years to create a safer working environment. The severity rate, another main indicator used to show the seriousness of each incident, shows a declining trend as three out of the ve segments showed an improvementin 2021. Besides the two lagging indicators previously stated , the companies have an extensive list of internal leading indicators to guide them through the improvement process. Training in health and safety matters is of critical importance and emphasis has been given to the completion of a training matrix that is customized to each job description and the completion of all necessary sessions for each employee. EU Taxonomy – Viohalco Amounts in EUR millions % of % of % of Economic activities Turnover turnover CAPEX CAPEX OPEX OPEX A. Eligible activities Production of secondary aluminium 843.5 15.7% 18.2 6.8% 12.2 14.9% Production of secondary steel 967.1 18.0% 4.0 1.5% 5.4 6.6% Production of cables products and provision of services 290.2 5.4% 17.1 6.4% 4.2 5.1% Environmentally sustainable activities (A.1) 2,100.8 39.1% 39.3 14.8% 21.8 26.6% B. Non-eligible activities Non-eligible activities (B) 3,273.7 60.9% 226.8 85.2% 60.1 73.4% Total (A+B) 5,374.5 100.0% 266.0 100.0% 81.9 100.0% Further information about the allocation of turnover, CAPEX and OPEX to the environmental objectives of the EU Taxonomy can be found in pages 110-112. VIOHALCO | ANNUAL REPORT 2021 87 Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 LTIR* 5.4 4.1 7.1 6.8 7.1 8.5 5.0 3.6 5.0 SR 182 70 86 122 226 376 115 80 243 H&S training hours per employee 4.7 2.7 4.7 4.9 3.8 3.1 3.2 1.7 3.8 # fatalities 0 0 0 0 0 0 0 1 1 Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 LTIR 8.8 6.4 5.4 1.7 1.7 1.0 SR 105 111 149 27 119 106 H&S training hours per employee 6.4 6.4 10.2 6.2 5.3 3.7 # fatalities 0 0 0 0 0 0 * LTIR: Lost time incident rate (number of LTI incidents per million working hours) ** SR: Severity rate (number of lost workdays per million working hours) Labour and human rights issues (SDG 5 and 8) Viohalco companies recognize the contribution of their people in their successful business performance and future growth. In line with this approach, the companies are committed to implementing responsible working practices. All Viohalco companies seek to provide their employees a workplace of equal opportunities by investing materially and systematically, in their training and development. Steadily oriented to human values, the companies strive to implement responsible management practices regarding to human resources. As shown in the table below, special circumstances caused by the pandemic crisis faced by some of the segments resulted in very dierent directions regarding employee turnover ratio. Although relatively stable in the previous years, the employee turnover increased in four out of the ve segments. Finally, due to the eects of the pandemic crisis having a smaller impact in 2021, all 5 segments increased the training hours per employee signicantly With the further de-escalation of the pandemic eect, the companies have an ambitious plan to increase training hours further in 2022. Aluminium segment Copper segment Steel segment 2021 2020 2019 2021 2020 2019 2021 2020 2019 Employee turnover (%) 12.2 10.1 6.1 20.8 10.2 13.0 10.1 22.5 12.4 % of women 10.3 10.4 8.7 13.9 14.1 12.4 18.4 16.8 18.7 Training hours per employee ** 11.0 8.02 18.2 9.9 8.9 9.7 7.4 6.7 6.7 Cables segment Steel pipes segment 2021 2020 2019 2021 2020 2019 Employee turnover (%) 12.7 10.4 19.3 30.0 15.0 7.5 % of women 12.3 15.8 13.3 8.5 9.8 9.5 Training hours per employee ** 16.4 12.6 22.2 11.3 8.3 12.3 * Employee turnover = (employees who leave the organization voluntarily or due to dismissal, retirement, or death in service)/Total employees100 Total workforce: Total employees at the end of the year (31/12 data). ** Hours of training: Average hours of training per employee per year VIOHALCO | ANNUAL REPORT 2021 88 Viohalco and its subsidiaries have taken a series of steps to support and increase the share of female employees, such as supporting families with young children with child-care subsidies on top of their base salaries. Viohalco companies have established an Employee Code of Conduct that is based on the principles of the Labour and Human Rights and Business Ethics and Anti-corruption Policies adopted by the subsidiaries. During 2021 and as in previous years, no incidents of discrimination were recorded or reported within the existing grievance mechanisms and no incidents of forced or voluntary child labour occurred. As part of the ESG Roadmap established in 2021, Viohalco and its subsidiaries rolled out two new ambitious and important initiatives to support the transparency and compliance of all companies with the adopted policies. The rst initiative is an extensive employee training in matters of labour and human rights, diversity equality and inclusion, and workplace harassment and prevention. The training programme, due to its size, will be completed within 2022 and relative KPIs will be presented in next year’s NFD. The second initiative is the establishment of a whistleblower mechanism for all Viohalco companies which will be implemented in 2022. The mechanism establishes the proper channels of communication for anyone either within or outside Viohalco and its subsidiaries to report illegal behavior regarding labour or human rights practices, environmental compliance, and business ethics issues while at the same time ensuring full protection and support for reporting persons. Responsible sourcing (SDG 12) Viohalco companies are committed to operate responsibly in all their business activities while at the same time expecting the same responsibility from its business partners. Due to the relative position of Viohalco subsidiaries in the value chain, the subsidiaries rely heavily on primary metal producers often located outside the EU. It is therefore of utmost importance that the business partners and suppliers of raw materials practice sound management in all ESG matters. Suppliers are, after all, an important resource and Viohalco subsidiaries have the intention to work closely with strategic suppliers in order to establish relationships based on the same ethical, social, and environmental standards. As part of the ESG Roadmap established in 2021, two new initiatives were created to monitor business partners’ performance on sustainability issues. First, Viohalco and its subsidiaries adopted the Supplier’s Code of Conduct which requires the subsidiaries’ business partners to show the same concern for employee health and safety, respect and protection of the environment, and respect for labour and human rights. All subsidiaries during 2022 will request that tier 1 and 2 suppliers of raw materials (on a money spent basis) adopt the Supplier Code of Conduct. The results of the initiative will be presented in a relative KPI in next year’s NFD. The second initiative requires the evaluation of all Tier 1 suppliers of raw materials to be evaluated on sustainability matters by a world class company in this eld, Ecovadis. The results of the initiative will also be presented in a relative KPI in next year’s NFD. The purpose of this initiative is to increase transparency in the supply chain and to identify risks that may appear in the future. In addition, responsible sourcing is vital to the delivery of products that carry the minimum environmental and social impact. Viohalco and its subsidiaries are convinced that only through responsible sourcing the nal products delivered to customers can help them achieve their own sustainability goals. The Responsible Sourcing initiative of Viohalco’s ESG Roadmap includes close monitoring of suppliers’ compliance with the Conict Minerals Regulation in order to ascertain that no material is procured from conict countries. Disclosures for the implications of Covid-19 Impact The Covid-19 pandemic aected society to an even greater degree during 2021. Although the various countries in which Viohalco companies operate relaxed some of the preventive measures in place during 2021, Viohalco companies retained the preventive measures in order to attain business continuity (orders for critical materials placed in advance, alternative suppliers identied, increased safety stock for certain materials) and maximum protection of employees and their families. As a result, no interruption of regular operation was experienced throughout 2021 including projects under construction/ commissioning. Overall, due to the mitigating measures taken by the subsidiaries, Covid-19 was not disruptive to any of the companies meeting its sustainability goals and actions, including employee training which during 2020 decreased signicantly. The companies were able for the most part return to previous or higher levels of training with more sessions and less people present in order to avoid super-spreading events. An even more ambitious training programme is planned for the majority of Viohalco companies in 2022 in order to compensate for the loss of scheduled personnel classroom training in 2020. During 2021, emergency response plans remained in place with small variations depending on the various infection waves throughout the seasonal changes of the year. Viohalco and its companies implemented multiple preventive and mitigating measures in all aspects of work life that included frequent preventive PCR testing, transportation to and from work, obligatory mask use in all indoor company sites, extensive hygiene measures, medical advice and support to all work force, especially vulnerable groups. Remote work varied depending on the risk exposure and the density of seating among employees always in compliance with guidelines or mandatory requirements by the competent national authorities. The companies’ management was supportive to all employees throughout the pandemic by allowing for ample quarantine time when employees were exposed to confirmed cases. In addition, a support help line with a dedicated 24-hour telephone line by a specialized service was offered to all Viohalco companies’ employees throughout this trying period of quarantines and personal distress. The enhanced health and safety preventive and mitigating measures remain in place across Viohalco companies and the same model will be followed on a risk-based approach. VIOHALCO | ANNUAL REPORT 2021 89 ■ Governance Transparency and anti-corruption (SDG 16) Viohalco and its companies acknowledge the signicance of business ethics and anti-corruption matters. In order to ensure the implementation of the respective policy, they have applied the proper internal controls and procedures of operation demonstrating accountability, fairness, and transparency in the relationship with all stakeholders. As part of the ESG Roadmap established in 2021, Viohalco companies implemented a new initiative for employee training in matters of business ethics and code of conduct, and anti-bribery and corruption. The training programme, due to its size, will be completed within 2022 and relative KPIs will be presented in next year’s NFD. The training programme aims at management and employees with a special risk prole due to the nature of the job. The training will include special sessions for the management teams in order to ensure that all matters involving business ethics (money laundering, antitrust and competition laws, anti-corruption, data privacy, etc.) are well comprehended. Furthermore, a second initiative established in the ESG Roadmap in 2021 is the whistleblower mechanism that is intended to detect and prevent illegal behaviour at an early stage. The whistleblower mechanism will be implemented in 2022. The mechanism establishes the proper channels of communication for anyone either within or outside Viohalco and its subsidiaries to report illegal behavior regarding labour or human rights practices, environmental compliance, and business ethics while at the same time ensuring comprehensive protection and support for reporting persons. The mechanism will be in compliance with the European Whistleblowing Directive. During 2021, no incidents of corruption or bribery were recorded or reported within the existing grievance mechanisms while there were no incidents of data privacy breaches as reported by the GDPR Data Protection Coordinators of each Viohalco company. In addition, there were no nes paid due to settlements for unethical business practices or corruption matters. ■ Integrated management of non nancial risks Viohalco and its companies face a variety of non-nancial risks as previously discussed and has a risk identication process in order to identify those risks and implement mitigation measures wherever possible. All industrial activity-related risks such as environmental and health and safety are associated with the subsidiaries with industrial operations. Managing the non-nancial risks is considered to be a very critical task by the companies’ management as these risks have the potential to create a direct or indirect impact on the companies’ continuous operation as well as to create future liabilities. In order to improve risk management in non-nancial issues among subsidiaries, Steelmet professionals have established policies and procedures for managing risks that companies’ management must comply with. Furthermore, the ESG Roadmap has established the periodic monitoring of several key leading and lagging indicators in order to monitor progress on all ESG-related risks as well as risks that the companies anticipate will be or have the potential to be disruptive in the future. Such risks relate to new legislation coming into eect in the future such the ‘’Fit-for-55’’ package of legislative initiatives. The companies have their own skilled personnel and consultants managing these matters and they implement certied management systems ISO 14001:2015 and ISO 45001:2018 as well as the energy management system 50001:2018, thus providing an additional management tool for all related risks. The management systems provide the framework for planning and implementing measures, taking the proper preventive steps, monitoring the eciency of the measures, and providing the continuous improvement culture necessary to ensure improving performance and risk management. Risks are analyzed from a nancial, environmental, and social perspective in order to get a full understanding of the complete array of impacts of non-nancial issues. Below is a description of the main non-nancial risks identied that may aect business operations, reputation, and ultimately the nancial results of Viohalco. Environment The major risks related to environmental issues are regulatory compliance, climate change and water management. Regulatory Compliance The regulatory environment in which Viohalco companies operate is very demanding as industrial operations in Europe, especially in metal processing, are subject to a broad range of laws and regulations that are updated on regular intervals. The regulatory framework imposes stringent standards that require a continuous eort in human and capital resources in order to comply. Hazardous waste management, discharge limits, atmospheric pollution abatement, are some examples of environmental matters that can create potential liabilities for Viohalco companies. The associated risks extend to nancial risks (regulatory nes, pollution liabilities, remediation requirements), environmental risks (environmental damage to groundwater, surface soils, ecosystems) and social (impact to local communities’ quality of air or water supplies). It is important to note that 21 industrial installations of Viohalco companies are in the scope of the Industrials Emissions Directive of the EU which requires industrial installations to operate with the obligatory implementation of Best Available Techniques to ensure stringent emission limits. Mitigation of all those risks are managed by the established environmental management programmes and trained professionals at Viohalco companies. The total annual environmental expenditures of Viohalco companies are in excess of EUR 25 million over the last few years with an upward trend due to continuous improvement eorts implemented by the subsidiaries. Climate change Although ambitious and absolutely necessary to address the biggest current challenge for the environment, the proposed Fit- for-55 package by the EUposes several risks for Viohalco companies’ carbon intensive industries due to its short fall to create a level- playing eld with industries operating outside the EU. Although intended to protect carbon intensive companies from carbon leakage, the proposed Carbon Border Adjustment Mechanism (CBAM,) current measures are insucient to provide the framework for avoiding circumvention by resource shuing of extra-EU companies . At the same time the current plan gradually decreases free allocation and does not address much needed measures to allow for a WTO-compatible, carbon cost recovery for European exports. As such, carbon-related framework conditions for 2030 are being analyzed in various scenarios of carbon costs emanating from proposed climate policies and how these may aect the competitiveness of Viohalco companies due to direct and indirect carbon emissions related costs as well as the anticipated impact on the cost of imported primary metals. Viohalco companies consider that climate change is an area with a material impact not only with respect to nancial materiality (negative impact on the company) but also with respect the environment and society (negative impact to climate, hence to the environment and society). The nancial materiality stems from the fact that the companies have transition as well as physical risks. Transition risks relate to risks arising from the transition to a low carbon economy such as the proposed policies that: • Require demanding energy eciency measures; • Impose carbon pricing mechanisms which intend to increase carbon price, aecting both cost of direct and indirect emissions; • Impose CBAM on the aluminium and steel industries which are included in the rst phase of the mechanism and as a result, gradually decreases the free allowances these companies receive. The Viohalco segments of steel, aluminium and copper, characterized by their energy intensive production processes, are some of the most exposed sectors in industrial manufacturing to carbon leakage because they are priced globally as commodities and are highly energy intensive. The existing technologies to mitigate the carbon emissions from the consumption of thermal and electrical energy are not widely available from a technological and economic perspective and therefore Viohalco companies do not have an alternative for aggressive decarbonization measures in their production processes in their immediate future, especially in the substitution of thermal energy which relies on natural gas. The EU’s new ambitious goal of 55% reduction climate target in 2030 will further increase carbon leakage risk, and while there are eorts to mitigate that risk, the nancial materiality remains signicant. Physical risks relate to risks associated with long chronic eects such as extreme weather, rising sea levels, and reduced freshwater availability. The physical risks for Viohalco companies remain low due to the geographical locations most plants are, but Viohalco and its companies continuously monitor changing conditions that may create physical risks in the future. The risk mitigation measures taken by the companies are, among others, the following: • Early policy trend identication and cooperation with European Federations in order to inform policy makers of the risks for the European metals industry; • Involvement and participation in sector studies to identify all related risks for carbon leakage and wider implications to the national economies as well as disruption to supply chains in the countries Viohalco companies operate; • development of action plans for investments in energy ecient equipment and carbon abatement measures;. • increase of capacity for utilization of secondary raw materials instead of primary; and • proper budget management practices that incorporate projected carbon costs. From an environmental and social perspective, Viohalco companies directly emit greenhouse gases to the atmosphere due to their routine production operations and indirectly through consumption of electricity. There are currently ve companies (ElvalHalcor, Sidenor, Sovel, Stomana Industry and Soa Med) in the European Trading Scheme and Bridgnorth Aluminium in the UK Carbon Scheme and these companies have made a series of investments in the past 15 years for carbon emissions reduction. In addition, all these companies are included in the corresponding schemes’ carbon leakage sectors so measures are taken for the protection of these sectors from carbon leakage at least until the end of 2025. The sum of the direct and indirect emissions of Viohalco segments is shown in the previous chapter as these are the most closely observed KPIs at each company level. Upstream activities include raw materials extraction, such as aluminium, copper and steel and amount to signicant emissions to the environment. Selection of raw materials suppliers is critical to identify areas of improvement and is considered the highest contributor to the overall emissions of the subsidiaries’ products. As stated earlier, the carbon footprint attributed to upstream activities amount to over 80% and reach up to 95% in some cases. The subsidiaries are in the process of identifying and evaluating dierent suppliers and their potential exposure to higher carbon costs as the increasing cost of carbon will eventually aect their competitiveness. Water management As stated earlier, water is an essential element of the Viohalco companies’ production process, and its availability is very important to the companies’ business continuity. The two water related risks are associated with • the availability of adequate water in both quantity and quality • the adequate treatment of wastewater before its discharge. Lack of availability of water, especially in water stressed areas, can lead to serious disruptions to the companies’ operation. In addition, the lack of water with the proper quality characteristics can lead to the need of signicant investments for water treatment that can also increase demand for energy (energy demanding treatment techniques like reverse osmosis) as well as increase in waste generation (wastes from water treatment). Water supply-related risks are important from a nancial and environmental perspective. Certain Viohalco companies are relatively water intensive as shown in the previous chapter. These companies treat the water supply risk as a business continuity issue that can ultimately have nancial materiality (negative impact on the company). In addition to the nancial implications of water shortages, environmental implications can occur when water shortages limit the amount of water available for other uses such as irrigation, municipal use, etc. The risk is mainly mitigated by our continuous eorts to improve the water footprint of the companies by setting internal goals for water use minimization, reevaluating existing usage, training VIOHALCO | ANNUAL REPORT 2021 90 VIOHALCO | ANNUAL REPORT 2021 91 employees on the importance of water use and have multiple sources of water so there are alternative sources of supply. Regarding wastewater quality discharge, the associated risk that could result from a breach of local discharge limits, is the adverse eect to local water supplies, reputational damage, and other administrative and criminal prosecution. The risk is mitigated through the proper infrastructure in place (adequate capacity of waste water treatment), properly trained personnel, preventive maintenance of equipment and very close performance monitoring so as to identify any possible problems in wastewater treatment. Social and labour issues The major risks related to social and labour matters are the occupational health and safety of the labour force and employee matters. These risks are signicant from a nancial and social perspective. Viohalco companies are exposed to occupational health and safety risks at industrial sites. Due to the nature of Viohalco companies’ industrial operations (thermal metallurgy with high temperature processes, heavy equipment, chemical treatment, work at heights, etc.) there is an inherent risk for accidents among the workforce or contractors with impact on human life, local communities, and reputation. With regards to occupational health and safety risks, Viohalco companies have management systems in place following a comprehensive approach for improvement which is translated into equipment upgrading, implementation of management principles (safety audits, standard operational procedures, work instructions, etc.), the establishment of a targeted safety training programme and the direct involvement of management. The companies’ management have a clear understanding of the importance of providing a safe working environment to the labour force and how vital it is to continuously strive for improvement as this is fundamental for good labour relations and business performance. Employee related risks entail potential violations of equal treatment and statutory working hours by personnel that may lead to operation interruption risks. These risks are mitigated by the companies through the implementation and monitoring of compliance with the employee Code of Conduct, personnel evaluation and training, and regular internal audits. Social risks are especially signicant in the supply chain of Viohalco’s companies as the raw materials used by Viohalco companies are located in various geographic locations with varying degrees of labour and environmental standards. Typically, the vast majority of the environmental and social footprint of Viohalco companies’ products originates from the supply chain. The Responsible Sourcing initiative described in the previous chapter targets the evaluation and engagement of all major suppliers so to identify business partners with poor environmental, social and governance practices. Following the evaluation, Viohalco companies will engage them regularly to monitor progress on an action plan or look for alternative suppliers that meet the companies’ ethical and environmental standards. Human rights The major risks related to human rights are related to the supply chain of the companies provided that many suppliers are not located in Europe or North America. As mentioned previously, the Responsible Sourcing initiative already developed, will assess among other issues, the business partners’ practices in human rights. Following the evaluation, Viohalco companies will engage them regularly to monitor progress on an action plan or look for alternative suppliers that meet the companies’ ethical and environmental standards. Anti-bribery and corruption The risks related to anti-bribery and corruption lies in the failure to conduct business operations ethically and comply with the laws and regulations in the jurisdictions in which Viohalco and its companies operate. To prevent and mitigate such risks, the whistleblower mechanism was created in the ESG Roadmap initiative so as to ascertain that any illegal behavior can be reported without retribution to the person reporting the illegal behavior. Furthermore, the internal audit function is responsible for monitoring and reporting timely and properly any related deviation or misconduct. Simultaneously, subsidiaries separately organize training courses and communication actions in order to increase awareness and stress the importance of compliance with the companies’ employee Code of Conduct. Detailed information on Viohalco companies’ actions can be found in their standalone sustainability reports which are published on an annual basis. VIOHALCO | ANNUAL REPORT 2021 92 I. Corporate governance statement ■ Introduction As a company incorporated under Belgian law and listed on Euronext Brussels, Viohalco applies standards that are compliant with the provisions of the 2020 Belgian Corporate Governance Code (the 2020 Code), which is the reference code and is publicly available on the website of the Corporate Governance Committee (www.corporategovernance-committee.be ). The 2020 Code is structured around principles, provisions, guidelines, and the «comply or explain» principle. Belgian listed companies must abide by the 2020 Code but may deviate from some of the Code’s provisions, if they provide a considerate explanation for any such deviation. During the 2021 nancial year, the Company complied with the principles of the 2020 Belgian Corporate Governance Code, except for the following: - Principle 7.6: “A non-executive board member should receive part of their remuneration in the form of shares in the company.” - Principle 7.8 “The variable part of the executive remuneration package should be structured to link reward to overall corporate and individual performance, and to align the interests of the executives with the sustainable value-creation objectives of the company.” - Principle 7.9: “The board should set a minimum threshold of shares to be held by the executives.” Explanation: The remuneration policy of the Company is set out in the remuneration report. Such policy provides for neither variable remuneration, nor share-based remuneration. The board of directors will consider the proposals submitted by the Nomination and Remuneration Committee in order to determine whether, and to what extent, a modication of this policy is justied in light of the Company’s objectives and strategy. The Nomination and Remuneration Committee is in the process of developing a variable remuneration plan for the members of the Executive Management. Viohalco’s Board of Directors ('BoD') has also adopted a Corporate Governance Charter in order to reinforce its standards for the Company in accordance with the recommendations set out in the 2020 Code. It aims at providing a comprehensive and transparent disclosure of the Company’s governance which is reviewed and updated from time to time. The Corporate Governance Charter (the Charter) is available on the Company’s website (www.viohalco.com). In order to have a complete overview of Viohalco’s corporate governance rules, the Corporate Governance Statement must be read in conjunction with the Company’s articles of association, the Charter as well as the corporate governance provisions laid down in the Belgian Code on Companies and Associations (the BCCA). As a company secondary listed on the Athens Stock Exchange (Athex), Viohalco also complies with the provisions of the applicable Greek capital market laws and regulations. ■ Board of Directors 1. Role Viohalco has chosen the one-tier governance structure. The board of directors (the Board) is vested with the power to perform all acts that are necessary or useful for the Company’s purpose, except for those actions that are specically reserved by law or the articles of association to the Shareholders’ Meeting or other management bodies. In particular, the Board is responsible for: • dening the general orientations of the Company; • deciding on and regularly reviewing any aspect related to all major strategic, nancial, and operational matters of the Company; • deciding on the Executive Management structure and determining the powers and duties entrusted to them; • taking all necessary measures to guarantee the quality, integrity, and timely disclosure of the Company’s nancial statements and other material nancial or non-nancial information about the Company in accordance with the applicable law; • monitoring and reviewing the eectiveness of the Audit Committee and the Nomination and Remuneration Committee; • approving a framework of internal control and risk management set up by the Executive Management and reviewing its implementation; • monitoring the quality of the services provided by the statutory auditor(s) and the internal audit, taking into account the Audit Committee’s review; • approving the remuneration report submitted by the Nomination and Remuneration Committee; and • any other issue reserved to the Board by the BCCA. The Board has delegated to the members of the Executive Management the duty to implement the corporate strategy determined by the Board and to carry out the general management of the Company. VIOHALCO | ANNUAL REPORT 2021 93 2. Composition of the Board In accordance with article 8 of the articles of association, the Board is composed of 15 members as follows: Name Position Term started Term expires Nikolaos Stassinopoulos Chairman, Non-executive member of the Board May 2021 May 2022 Evangelos Moustakas Vice-Chairman, Executive member of the Board May 2021 May 2022 Michail Stassinopoulos Executive member of the Board May 2021 May 2022 Ippokratis Ioannis Stassinopoulos CEO, Executive member of the Board May 2021 May 2022 Jean Charles Faulx Executive member of the Board May 2021 May 2022 Thanasis Molokotos Executive member of the Board May 2021 May 2022 Xavier Bedoret Non-executive member of the Board May 2021 May 2022 Patrick Kron Non-executive member of the Board May 2021 May 2022 Marion Steiner Stassinopoulos Non-executive member of the Board May 2021 May 2022 Margaret Zakos Non-executive member of the Board May 2021 May 2022 Efthimios Christodoulou Independent , Non-executive member of the Board May 2021 May 2022 Francis Mer Independent, Non-executive member of the Board May 2021 May 2022 Kay Breeden Independent, Non-executive member of the Board May 2021 May 2022 Bernadette Blampain Independent, Non-executive member of the Board May 2021 May 2022 Astrid de Launoit Independent, Non-executive member of the Board May 2021 May 2022 The mandates of all members of the Board expires at the end of the Annual Ordinary Shareholders’ Meeting to be held in 2022. 3. Information on the members of the Board Over the past ve years, the members of the Board have held the following positions (apart from their directorship in the Company) and maintained relationships with the following bodies which, in theory, could become the source of conict of interests: Nikolaos Stassinopoulos, Chairman - Non-executive member of the Board. Mr. Stassinopoulos holds a Master’s degree from the Athens University of Economics and Business. He served as President and Vice-Chairman of Viohalco Hellenic. Evangelos Moustakas, Vice-Chairman - executive member of the Board. Mr. Moustakas joined Viohalco in 1957 where he held various technical and managerial positions, in particular the position of President of the Board of Directors of several subsidiaries of Viohalco, such as Hellenic Cables S.A. and Etem S.A. He serves as President of the Board of Directors of the Hellenic Copper Development Institute and as a member of the Board of Directors of the International Wrought Copper Council (IWCC). He was also a member of the Board of Directors of the European Copper Institute (ECI) for many years. Moreover, he serves as corporate representative in the International Association “Intercable”, the International Cablemakers Federation (ICF, since 1990), and Europacable (since 1991) and is active in the development and promotion of copper and cable products around the world. Michail Stassinopoulos, Executive member of the Board. Mr. Stassinopoulos graduated from Athens College (1985) and holds a Bachelor Degree (BSc) in Management Sciences from London School of Economics (1989). He also holds a postgraduate diploma (MSc) in Shipping, Trade and Finance from City University Business School (UK). Mr. Stassinopoulos is the President of the Board of Directors of ElvalHalcor Hellenic Copper and Aluminium industry S.A. He is also President of the Board of Directors of the “Hellenic Production - Industry Roundtable for Growth”. He participates in the Board of Directors of the Foundation Michail N.Stassinopoulos- Viohalco and in the Board of the “Council on Competitiveness of Greece”. He was a member of the Hellenic Federation of Enterprises since 1996 and for several years until 2019. VIOHALCO | ANNUAL REPORT 2021 94 Ippokratis Ioannis Stassinopoulos, CEO – executive member of the Board. Mr. Stassinopoulos holds a Bachelor’s degree in Management Sciences from City University and a Master’s degree in Shipping, Trade and Finance from City University’s Business School (UK). He serves as a member of the General Council of SEV (Hellenic Federation of Enterprises), the Young Presidents Organisation, and the Board of Directors of Endeavor Greece. Mr. Stassinopoulos holds a managerial position at Viohalco Hellenic since 1995. Jean Charles Faulx, Executive member of the Board. Mr. Faulx holds a Master’s degree in Economic Sciences from the Catholic University of Louvain (UCL). He is a member of the Board of Directors of International Trade S.A., Genecos S.A. (Paris), Terra Middle East (Dusseldorf ), Base Metals (Istanbul), and Metal Agencies (London). He was also member of the Board of Directors of Codin and Codin Treasury Centre S.A. prior to their absorption by Codin in August 2013. Mr. Faulx also serves as CEO of TeproMKCl GmbH, a subsidiary of Viohalco, International trade SA, a subsidiary of Viohalco, Strega sprl. In the past, Mr. Faulx served as CEO of Tepro Metall AG, Airicom France SAS, Studio58 S.A. and Promark SPRL and held various positions at Techno Trade S.A, JCT Invest and Elval Automotive S.A. Τhanasis Molokotos, Executive member of the Board. Mr. Molokotos holds a Master’s degree in Mechanical Engineering and a Master’s degree in Marine Engineering and Naval Architecture from the Massachusetts Institute of Technology (Cambridge, MA), and a Master’s degree in Mechanical Engineering from Tuft University (Medford, MA); he is President and chief executive ocer (CEO) of Assa Abloy Americas until May 2018. In the past, he has served as General Manager of Molokotos Textile Corporation and design specialist at Rangine Corporation. Xavier Bedoret, Non-executive member of the Board. Mr. Bedoret holds a master degree in Law and Psychology from the University of Louvain (UCL) and is a certied public accountant (IRE). He holds also a Certicate in Corporate Governance (INSEAD). After ten years of nancial auditing at KPMG in Brussels (Belgium) and Stamford (USA), he joined the Finance Department and then the Audit & Risks Department of ENGIE (France). Since 2017, he advises boards and audit committees on governance matters. Today, he is also chairman of the board of directors and chairman of the audit committee of Cenergy Holdings. He is also chairman of International Trade, a Viohalco subsidiary. Patrick Kron, Non-executive member of the Board. Mr. Kron ia a graduate from Ecole Polytechnique and the Paris Ecole des Mines. Patrick Kron started his career in 1976 in the French Ministry of Industry. He then joined the Pechiney group where he became a Member of its Executive Committee and held senior managerial positions. In 1998, he was named Chief Executive Ocer of Imerys. He became in 2003 Chairman & Chief Executive Ocer of Alstom and left the company in January 2016 after the sale of its Energy assets to General Electric and an associated shares buy-back. He created a consulting company PKC&I and in November 2016, he joined True Capital, a capital rm specialized in BioMedTech and Digital, as Chairman of this rm. Patrick Kron is Chairman of the Board of Imerys since July 2019. He is also a Board Member of Sano (Fran ce) and of Holcim (Switzerland), and sits in the Supervisory Board of Segula Technologies. Patrick Kron has been awarded the « Légion d’Honneur » (Chevalier) and the « Ordre National du Mérite » (Ocier). Marion Steiner Stassinopoulos, Non-executive member of the Board. Mrs. Marion Steiner Stassinopoulos holds a Master’s degree and a Ph.D in Psychology from the University of Zurich. She has also completed one year of postdoctoral studies at Northwestern University of Chicago (USA). In the past, she worked as psychologist at the Gerontopsychiatric Centre of the Psychiatric University Clinic of Zurich. She is a member of the Advisory Board of Franz Haniel & Cie. GMBH , Duisburg-Ruhrohrt in Germany. Margaret Zakos, Non-executive member of the Board. Ms. Zakos holds a Bachelor’s degree from Queens University, Canada. She was a consultant with a US based management consulting rm and held a senior executive operational position at Mount Sinai Medical Centre, NYC. She has owned and operated private rms: Insurance Brokerage and Real Estate Development. She was a Board member of various Foundation Boards and of the Kingston Health Sciences Centre Board including Committee Roles in Finance and Audit for many years. Currently, she is active in Real Estate Holding companies. She is also member of the Board of directors of Cenergy Holdings. Efthimios Christodoulou, Independent, non-executive member of the Board. Mr. Christodoulou holds a Bachelor’s degree in Economics from Hamilton College and a Master’s degree in Economics from Columbia University. He has served on the sta of the National Bureau of Economic Research (New York) and was a lecturer at New York University. Mr. Christodoulou was Governor of the National Bank of Greece, President of the Union of Hellenic Banks, and Director General of the National Investment Bank for Industrial Development (ETEBA), Governor of the Bank of Greece (Central Bank of Greece). He has also acted as President of the Board and CEO of Olympic Airways, Executive President of Hellenic Petroleum S.A., and was a member of the European Parliament. He was Minister of Foreign Aairs and Minister of National Economy in Greece. Until June 2013, Mr. Christodoulou also served as President of EFG Eurobank. He is also President or member of various philanthropic institutions. Francis Mer, Independent, non-executive member of the Board. Mr. Mer holds a Master’s degree from Ecole Polytechnique and a Master’s degree in engineering from Ecole des Mines. He serves as honorary President of Safran Group. In the past, Mr. Mer has held various positions at Usinor Sacilor Group, including President of the Board of Directors and CEO, and served as President of Cockerill Sambre, Eurofer (European Steel Association) and the International Iron and Steel Institute. He was President of the French Steel Federation, the National Technical Research Association, EpE (Entreprises pour l’Environnement) and the Cercle de l’Industrie, and co-president of the Board of Arcelor. Mr. Mer was the French Minister of Economy, Finance and Industry from 2002 to 2004. Kay Breeden, Independent, non-executive member of the Board. Ms. Breeden holds a Bachelor’s degree in Biology and a Master’s degree in Bio-medical Engineering from the University of Illinois and has participated in Stanford’s University Executive Education Programme. Ms. Breeden has gained unique perspective through key leadership roles in government, corporate and management consulting environments, including eleven years spent at two top tier management consulting rms, Booz Allen and A.T. Kearney; more than fteen years with large global corporations including CBRE, Seagate, and Digital Equipment Corporations in executive positions in Environmental, Health, Safety and Corporate Social Responsibility, Business Excellence and Corporate Facilities and Real Estate; and ve years with the United States Environmental Protection Agency. Ms. Breeden has a broad array of industry experience including high tech, biotech, consumer products, energy, utilities, chemicals, construction and engineering, environmental services, aerospace, real estate, metals and mining and signicant international business experience in Europe, Asia, North and South America. Bernadette Blampain, Independent, non-executive member of the VIOHALCO | ANNUAL REPORT 2021 95 Board. Mrs. Blampain holds a Master's degree in Economic Sciences from the Catholic University of Louvain (UCL). She is also specialized in Information Security and Data Protection. She held various technical and managerial positions at ING Belgium SA/NV (formerly Bank Brussel Lambert) during 35 years, more specically in the IT division as project manager, risk manager or responsible for the IT development and maintenance of dierent banking areas. Since early 2019, she has held the position of Data Protection Ocer in the medical sector. Astrid de Launoit, Independent, non-executive member of the Board. Mrs. de Launoit holds a Bachelor’s degree in Economics and Finance from the University of Lille (Université Catholique de Lille) and a Master’s degree in Management specialized in Luxury. She is also a graduate of the Gemological Institute of America. She has worked in several positions in the luxury and education sectors. Within the last 5 years, Mrs. de Launoit has worked on a fundraising concert for the NGO SOS Children’s Villages. She is currently teaching at ISTEC Brussels. 4. Appointment of the members of the Board The members of the Board are appointed by the Shareholders’ Meeting under the quorum and majority conditions applicable to an amendment of the articles of association of the Company, upon proposal by the Board. The members of the Board are appointed for a term of one year and their term of oce is renewable. In case a seat of member of the Board becomes vacant, such vacancy may be lled temporarily by virtue of a unanimous vote of the remaining members of the Board, until the next Shareholders’ Meeting which proceeds to the denitive appointment of a Board member. Any proposal for the appointment of a Board member originating from the shareholders must be accompanied by a Board recommendation based on the advice of the Nomination and Remuneration Committee. The Nomination and Remuneration Committee reviews all the candidacies and seeks to ensure that a satisfactory balance of expertise, knowledge, and experience is maintained among the Board members. The Board decides which candidates satisfy the independence criteria set by law. To be considered independent, a member of the Board must full the criteria set forth in Principle 3.5 of the 2020 Code. Any independent member of the Board who no longer fulls the above criteria of independence is required to immediately inform the Board. The Board of Viohalco, having reviewed the independence criteria pursuant to the BCCA and the 2020 Code, has decided that Mr. Efthimios Christodoulou, Mr. Francis Mer, Ms. Kay Breeden, Ms. Bernadette Blampain, and Ms. Astrid de Launoit full these criteria and are independent members. Being a holding company oriented towards industrial companies, Viohalco does not have in place a formal diversity policy for its Board of Directors or its senior executives. The required expertise limits the possibility of gender diversication. It is common worldwide that in an industrial environment in metals processing the vast majority of personnel consists of males. Nevertheless, Viohalco employs skilled and experienced personnel without any discrimination and make eorts to ensure diversity in terms of nationality, age, religion, and ethnic origin. The Company’s Board, however, has acknowledged the legal requirement of Article 7:86 of the BCCA, and, with the assistance of the Nomination and Remuneration Committee, took the appropriate measures in order to ensure compliance with the legal requirement. Viohalco’s Board currently consists of 10 male and 5 female Board members. The Nomination and Remuneration Committee takes seriously this requirement as they consider future Board members. A thorough description of the Company’s “Labour and Human rights” policy is provided in the Non-nancial information section. 5. Functioning The Board has elected among its members Mr. Nikolaos Stassinopoulos as Chairman of the Board (the Chairman). The Chairman directs the Board’s works. He sets the agenda of its meetings after consultation with the Executive Management. The Chairman is responsible for ensuring that all members of the Board receive accurate, clear and timely information. The Board has appointed a company secretary, Mr. Xavier Bedoret, to advise the Board on all corporate governance matters (the Corporate Governance Secretary). The Board meets as frequently as the interests of the Company require so and, in any case, at least four times a year. The majority of the meetings in any year take place at the Company’s registered oces in Belgium. The meetings of the Board can also be held by teleconference, videoconference, or by any other means of communication that allow the participants to hear each other continuously and to actively participate in these meetings. Participation to a meeting through the above-mentioned means of communication is considered as physical presence to such meeting. The Board may adopt unanimous written decisions, expressing its consent in writing. The following table provides an overview of the Board meetings held in 2021: Date and place Attendance Present: 14 March 18, 2021 (video conference call) Represented: 0 Absent: 1 Present: 14 April 26, 2021 (video conference call) Represented: 0 Absent: 1 Present: 13 May 25, 2021 (video conference call) Represented: 1 Absent: 1 Present:14 September 23, 2021 (Athens) Represented: 0 Absent: 1 Present: 14 December 9, 2021 (video conference call) Represented: 0 Absent: 1 VIOHALCO | ANNUAL REPORT 2021 96 ■ Committees of the Board of Directors The Board has set up two committees to assist and advise the Board on specic areas: the Audit Committee and the Nomination and Remuneration Committee. The competences of these committees are primarily set out in the Charter. 1. The Audit Committee The Audit Committee is composed of Mr. Efthimios Christodoulou, acting as Chairman of the Committee, Mr. Xavier Bedoret, and Ms. Margaret Zakos. All members are non-executive members of the Board and one of them is independent. The majority of the members of the Audit Committee have sucient experience and expertise, notably in accounting, auditing and nance, acquired through their previous or current professional assignments. Pursuant to the Charter, the Audit Committee meets at least four times a year, and at least twice a year it meets with the Company’s statutory auditor. The Audit Committee advises the Board on accounting, audit and internal control matters. In particular, the Audit Committee: • monitors the nancial reporting process including risks; • monitors the eectiveness of the Company’s system of internal control and risk management as well as the internal audit function; • monitors the conducting of the statutory audit (contrôle legal/wettelijke controle) of the annual and the consolidated nancial statements, including any follow-up on questions and recommendations made by the statutory auditor; • presents recommendations to the Board with respect to the appointment of the statutory auditor; and • reviews and monitors the independence of the statutory auditor, in particular regarding the provision of non-audit services to the Company. In 2021, the Audit Committee met four times: on March 17, on May 21, and on December 8, via video conference call, with all members present; and on September 21, in Athens, with all members present. 2. Nomination and Remuneration Committee The Nomination and Remuneration Committee is composed of Mr. Efthimios Christodoulou, acting as Chairman of the Committee, Mr. Francis Mer, and Mr. Patrick Kron. All members are non-executive members of the Board, and two of them are independent. Pursuant to the Charter, the Committee meets at least twice a year, and whenever necessary in order to carry out its duties. The Nomination and Remuneration Committee advises the Board principally on matters regarding the appointment and the remuneration of the members of the Board and the Executive Management. In particular, the Nomination and Remuneration Committee: • submits recommendations to the Board with regard to the appointment.re-appointment and the remuneration of the members of the Board and the Executive Management; • identies and nominates, for the approval of the Board, the candidates for lling vacancies as they arise; • advises on appointment proposals originating from the shareholders; • periodically assesses the composition and size of the Board and submits recommendations for changes to the Board; • submits proposals to the Board regarding the remuneration policy; and • drafts and submits the annual remuneration report, including proposals regarding the remuneration policy and recom - mendations based on its ndings. In 2021, the Nomination and Remuneration Committee met two times: on March 18 and on December 9, via videoconference call, with two members present. ■ Evaluation of the Board of Directors and its Committees The Board regularly assesses its size, composition, performance and those of its committees, as well as its interaction with the Executive Management. On December 10, 2020, the Board reviewed the board evaluation process in order to ensure that the Company operates in an ecient way, consistently encouraging the continuous improvement of the Company’s governance. The non-executive members of the Board assess their interaction with the Executive Management on a regular basis. The performance of Executive Management is also assessed on an informal basis through the presentation of the Company’s performance in respect of the interim and annual nancial statements. ■ Executive Management The Executive Management comprises four persons: the chief executive ocer (CEO), Mr. Ippokratis Ioannis Stassinopoulos; the executive vice-Chairman, Mr. Evangelos Moustakas; the chief nancial ocer (CFO), Mr. Efstratios Thomadakis; and the Financial Manager of the Greek Branch, Mr. Panteleimon Mavrakis. In the past ve years, the members of the Executive Management held the following directorships and memberships of administrative, management or supervisory bodies and/or partnerships: Evangelos Moustakas, Vice-Chairman - executive member of the Board. Please see above section no 3, Information on the members of the Board, Board of Directors. Ippokratis Ioannis Stassinopoulos, CEO – executive member of the Board. Please see above section no 3, Information on the members of the Board, Board of Directors. Efstratios Thomadakis, CFO. Mr. Thomadakis studied Business Administration and holds an MBA from the University of Piraeus. He joined Viohalco Hellenic in 2000. Since then, he has held various managerial positions in the nancial department, whilst in 2010 became the CFO of the Sidenor Group, Viohalco’s steel business segment. He is also member of the Board of Directors of several Viohalco subsidiaries, such as Sidenor Industry S.A. Panteleimon Mavrakis, Financial Manager of the Greek Branch. Mr. Mavrakis studied Economics at the University of Piraeus. He joined Viohalco in 1979 and since then has held executive positions in the nancial department of several Viohalco companies. From 2000 to 2013, he served as CFO of Viohalco Hellenic and some of its subsidiaries, and since 2013 he is responsible for the accounting and scal aairs of the Greek Branch of Viohalco. The Executive Management is vested with the day-to-day management of the Company. They are also entrusted with the implementation of the resolutions of the Board. VIOHALCO | ANNUAL REPORT 2021 97 In particular, the Board has assigned the following missions to the Executive Management: • preparing strategic proposals for the Board; • putting internal controls in place; • monitoring and managing the Company’s results and performance against strategic and nancial plans; • giving direction, guidance, and support to the Company’s business; • preparing and presenting to the Board a timely, accurate, and reliable set of the Company’s draft nancial statements, in accordance with applicable accounting standards, and other material nancial and non-nancial information, as well as the related press releases; • providing the Board with a balanced and comprehensive assessment of the Company’s nancial situation; • making recommendations to the Board with respect to matters within its competency; and • reporting to the Board on the performance of the Company. ■ Remuneration policy This remuneration policy sets forth the principles applicable to the remuneration of the members of the Board of directors and the Executive Management of Viohalco. Procedure This remuneration policy has been prepared by the Board of directors upon recommendation of the Nomination & Remuneration Committee. It was approved by the Shareholders’ Meeting of 25 May 2021 and will be submitted to vote by the shareholders’ meeting each time there is a material change, and at least every four years. This policy may be revised by the Board upon recommendation of the Nomination & Remuneration Committee. Currently, the Nomination & Remuneration Committee is in the process of developing a variable remuneration plan for the Executive Management. In exceptional circumstances, the Board of directors may, upon recommendation of the Nomination & Remuneration Committee, temporarily derogate from the remuneration policy if the derogation is necessary to serve the long-term interests and sustainability of the Company or to assure its viability. For the preparation of this remuneration policy, the Board, with the assistance of the Nomination & Remuneration Committee, takes into consideration whether events of conicts of interests exist. For the prevention of such events, each member of the Board and each member of the Executive Management is required to always act without conict of interests and always put the interest of Viohalco before his individual interest. They are also required to inform the Board of conicts of interests as they arise. In the event a conict of interests may arise, the Board is required to implement the specic procedures of conict resolution set forth in articles 7:96 of the BCCA. The remuneration policy is based on the prevailing market conditions for comparable companies, paying at market- competitive level achieved through benchmarking. It takes into account the responsibilities, experience, required competencies, and participation/contribution of the members of the Board of Directors and the members of the Executive Management. The Board of Viohalco, a holding company of a predominantly industrial portfolio, aims at preserving long-term value for its shareholders. The determination and evolution of the Company’s remuneration policy is closely linked with the growth, results and success of the Company as a whole. The Company’s remuneration policy is built around internal fairness and external market competitiveness. The Company's objective is to balance oering competitive salaries while maintaining focus on performance and results. Board of directors The remuneration of the members of the Board of Directors consists in a xed annual fee amounting to EUR 25,000. In addition, Board members who are members of a Board committee receive a xed fee of EUR 25,000 per committee. Additional fees or other benets, such as company car, training, or other benets ‘in natura’ may be attributed either by the Company or by its subsidiaries based on the responsibilities and number of functions each member of the Board of Directors holds within the Company or in one or more of its subsidiaries. The fees are allocated on a “pro rata temporis” basis for the period extending from the Annual Ordinary Shareholders’ Meeting until the Annual Ordinary Shareholders’ Meeting of the following year and are payable at the end of such period. Members of the Board of directors do not receive any variable remuneration or remuneration in shares. Members of the Board of directors are not entitled to retirement pension plans or severance payments. Executive Management The remuneration of the members of the Executive Management of Viohalco consists in a xed annual remuneration, which is attributed either by the Company or by its subsidiaries. Members of the Executive Management are not entitled to retirement pension plans or severance payments other than what is provided by the applicable law in each case. In order to ensure focus on the Company’s short-term and long-term objectives as well as long-term value creation for all key stakeholders, the Board, with the assistance of the Nomination & Remuneration Committee, has commenced to develop a yearly variable remuneration plan related to the levels of achievement by the beneciaries of predened targets which will be added to the xed remuneration. Such plan would include nancial metrics (in this case adjusted EBITDA) as well as a set of individual targets in the following categories: specic Financials, Customer, ESG, Processes & Organizational Eciency, People & Leadership. Performance would be assessed on an annual basis using a set of pre-determined performance targets in each category, dened at the start of the year. Depending on the performance of each participant, they may receive a variable remuneration between 0 and 100% of the dened variable remuneration “at target”. The variable remuneration may be applicable starting form nancial year 2022. The updated policy will be submitted to approval by the shareholders’ meeting of 31 May 2022. ■ Remuneration report This remuneration report provides an overview of the remuneration granted during the nancial year 2021 to the members of the Board of directors and the members of the Executive Management, in accordance with the remuneration policy. It will be submitted to the vote of the shareholders’ meeting of 31 May 2022. With regard to the contribution of the remuneration to the long- term performance of the Company, the Company uses its KPIs (i.e. Profitability, Revenue) as a measure of its financial performance. The evolution of the measurement during the last five years as published in the Company’s financial statements is presented under the section related to the evolution of the remuneration. VIOHALCO | ANNUAL REPORT 2021 98 Board of Directors The following table (Α) provides an overview of the fees paid to the members of the Board of Directors in the nancial year 2021: Table A (Amounts in EUR) Fixed remuneration Name for members Paid by Base Fees (b) Other Total Proportion of xed and salary (a) benets (c) remuneration variable remuneration Viohalco - 50,000 - 50,000 100% Nikolaos Stassinopoulos Subsidiaries - - - - - Total - 50,000 - 50,000 100% Viohalco - 100,000 - 100,000 100% Evangelos Moustakas Subsidiaries 1,183,429 - - 1,183,429 100% Total 1,183,429 100,000 - 1,283,429 100% Ippokratis Ioannis Viohalco - 25,000 - 25,000 100% Stassinopoulos Subsidiaries 863,839 - - 863,839 100% Total 863,839 25,000 - 888,839 100% Viohalco - 25,000 - 25,000 100% Michail Stassinopoulos Subsidiaries 863,839 - - 863,839 100% Total 863,839 25,000 - 888,839 100% Viohalco - 25,000 - 25,000 100% Jean Charles Faulx Subsidiaries 210,773 19,642 - 230,415 100% Total 210,773 44,642 - 255,415 100% Viohalco - 25,000 - 25,000 100% Thanasis Molokotos Subsidiaries 802,543 90,304 - 892,848 100% Total 802,543 115,304 - 917,848 100% Viohalco - 320,000 4,012 324,012 100% Xavier Bedoret Subsidiaries - 50,000 - 50,000 100% Total - 370,000 4,012 374,012 100% Viohalco - 25,000 - 25,000 100% Patrick Kron Subsidiaries - - - - - Total - 25,000 - 25,000 100% Viohalco - 25,000 - 25,000 100% Marion Steiner Stassinopoulos Subsidiaries - - - - - Total - 25,000 - 25,000 100% Viohalco - 50,000 - 50,000 100% Margaret Zakos Subsidiaries - 50,000 - 50,000 100% Total - 100,000 - 100,000 100% Viohalco - - - - - Efthimios Christodoulou () Subsidiaries - - - - - Total - - - - - Viohalco - 50,000 - 50,000 100% Francis Mer Subsidiaries - - - - - Total - 50,000 - 50,000 100% Viohalco - 25,000 - 25,000 100% Kay Marie Breeden Subsidiaries - - - - - Total - 25,000 - 25,000 100% Viohalco - 25,000 - 25,000 100% Astrid de Launoit Subsidiaries - - - - - Total - 25,000 - 25,000 100% Viohalco - 25,000 - 25,000 100% Bernadette Blampain Subsidiaries - - - - - Total - 25,000 - 25,000 100% Viohalco - 795,000 4,012 799,012 100% Total remuneration Subsidiaries 3,924,422 209,947 - 4,134,369 100% Total 3,924,422 1,004,947 4,012 4,933,381 100% () This member of the Board has waived all remuneration. VIOHALCO | ANNUAL REPORT 2021 99 Executive Management The following table (B) provides an overview of the fees paid to the members of the Executive Management during the nancial year 2021: Table B (Amounts in EUR) Fixed remuneration Name for members Paid by Base Fees (b) Other Total Proportion of xed and salary (a) benets (c) remuneration variable remuneration Ippokratis Ioannis Viohalco - 25,000 - 25,000 100% Stassinopoulos (CEO) Subsidiaries 863,839 - - 863,839 100% Total 863,839 25,000 - 888,839 100% Executive management Viohalco 493,454 125,000 3,167 621,622 100% Subsidiaries 2,047,268 - - 2,047,268 100% Total 2,540,722 125,000 3,167 2,668,889 100% Total Remuneration to the Viohalco 493,454 125,000 3,167 621,622 100% Executive Management Subsidiaries 2,047,268 - - 2,047,268 100% Total 2,540,722 125,000 3,167 2,668,889 100% Notes to Tables A & B: (a) Base salary: this column includes the xed base salary in exchange for professional services regarding their mandate or for any other executive or non- executive services or functions provided during the reported nancial year under a specic contract. (b) Fees: this column includes all fees of the members of the Board for the participation in the administrative, management or supervisory bodies of the Company’s meetings during the reported nancial year. (c) Other benets: this column includes the value of any benets and perquisites, such as non-business or non-assignment related travel, medical, car, residence or housing, credit cards, and other benets in kind. Evolution of the remuneration The following table (C) provides an overview of the evolution over the ve most recent nancial years of the overall remuneration of the members of the Board of directors and the members of the Executive Management, and the performance of the Company through the reporting of some of its KPIs. Table C (Amounts in EUR) 2021 2020 2019 2018 2017 Remuneration of the members of the Board of directors 5,430,003 5,651,680 4,869,806 4,535,405 3,678,809 and the Executive Management Performance of the Company EBITDA 514,285,403 285,339,931 273,374,327 331,857,157 302,545,754 a-EBITDA 426,017,098 294,462,579 302,473,034 317,024,722 284,207,150 Revenue 5,374,512,326 3,850,077,328 4,198,193,708 4,406,185,353 3,721,310,855 * The information is provided on the basis of the available information from previous remuneration reports and the Company’s annual accounts. The average remuneration of a full-time equivalent basis of the employees of the Company (other than the members of the Board and the Executive Management) amounts to EUR 99,129. The remuneration ratio, as dened by Section 3:6 of the BCCA, was 26.8x for 2021. For its calculation, the Company used the remuneration of the CEO as the highest paid management member and the remuneration of the full-time employee of the holding company - who has worked for a full year - as the lowest paid employee. Publishing of this ratio is a practice required by the law and the presentation adopted is intended to comply with the transparency requirements. The disclosure on this ratio will be assessed and evaluated in the future subject to the evolution of the ratio and to potential future guidance/clarications that may be published on this requirement. ■ External audit The statutory auditor, appointed by the Shareholders’ Meeting among the members of the Belgian Institute of Certied Auditors, is entrusted with the external audit of the Company’s consolidated nancial statements. The statutory auditors’ mission and powers are those dened by the law. The Shareholders’ Meeting sets the number of statutory auditors and determines their remuneration in compliance with the law. The statutory auditor is appointed for a renewable term of three years. On May 29, 2019, the Company appointed PwC Reviseurs d’Entreprises SRL/ Bedrijfsrevisoren BV), in abbreviation PwC Reviseurs d’Entreprises, represented by Marc Daelman, as statutory auditor for a three-year period. VIOHALCO | ANNUAL REPORT 2021 100 ■ Company’s risk management and internal audit function The Belgian legislative and regulatory framework on risk management and internal control is set out in the law of 17 December 2008 on the establishment of an audit committee, and the law of 6 April 2010 on the enhancement of corporate governance, as well as in the 2020 Code. As mentioned in the chapter “Risks and Uncertainties” of this annual report, the Executive Management is responsible for the risk management and the system of internal control. Under the high supervision of the Executive Management, the management team of each Company’s subsidiary is responsible for developing an adequate organisation and an appropriate system of internal control for running the subsidiary’s operations and managing risk. The Audit Committee is responsible for monitoring the eectiveness of the Company’s risk management, its system of internal control and its internal audit function. - Risk management Risk management is a responsibility of the Management of the subsidiaries. The management team of the subsidiaries reports on business risks and challenges to the Company’s Executive Management on a regular basis; they provide the Board and the Audit Committee with a detailed business review which analyses risks and challenges. The Internal Audit, under the supervision of the Audit Committee, ensures the monitoring and the eectiveness of their risk management systems. - Internal audit function The Audit Committee supervises the internal audit function. Internal audit is an independent, objective assurance and consulting activity designed to add value and improve the organization's operations. It helps the organization accomplish its objectives by bringing a systematic, disciplined approach to evaluate and improve the eectiveness of risk management, control, and governance processes. Internal audit is conducted in accordance with the International Standards for the Professional Practice of Internal Auditing (IPPF). The internal audit function is responsible for performing audit engagements in accordance with its annual internal audit plan, which is prepared and reviewed in order to assist the organisation to eectively mitigate risk throughout its operations. The audit engagements follow the audit methodology described in the internal audit charter and the internal audit manual as well as aim at ensuring that subsidiaries comply with shared services processes with regards to their operations, industrial production and consolidation guidelines. At the end of each audit engagement, the internal audit function issues an audit report containing its audit ndings and recommendations. The subsidiaries’ management team is responsible to design and implement remedial actions towards each of the internal audit ndings and recommendations in due time. The internal audit function reports to the Audit Committee. The Audit Committee ensures that the internal audit work is focused on the activities and the risk areas it deems critical. It ensures that the internal audit function reduces the probability of fraud and error and provides eective mitigation of risk. ■ Control and relationship with subsidiaries Viohalco is a holding company that operates in a decentralised manner. Each of Viohalco companies is responsible for its performance and results. The management team of the subsidiaries is organised around solid global and regional teams, with responsibility assigned to the members of their respective Boards of directors and executive management team. In order to secure consistency of approach when separate companies deal with similar issues, and to optimise coordination throughout the network of the Company’s subsidiaries, the local management of the companies is provided with solid guidance and a workable framework for optimal local implementation and monitoring. Steelmet, a Viohalco subsidiary, is assigned by a subcontracting agreement with the functional support towards all companies of Viohalco. It deploys a team of subject matter experts who oversee policy implementation, monitor performance, and promote best practices while ensuring decentralization and entrepreneurial independence of the business units. The support they provide relates, among others, to functions such as nance, investor relations, ESG, Internal Audit, Operations etc. A shared services center is also responsible for the execution of common corporate services such as procurement, transportation, information technology and accounting. All Viohalco’s companies are accountable for their own organisation, risk management and system of internal control as these are developed and implemented depending on the business segment, the geographical location and the type of production plant concerned. ■ Financial reporting and monitoring Viohalco has established procedures for the adequate recording and reporting of nancial and non-nancial information. The objective is to ensure that nancial and non-nancial information produced by each entity is homogeneous, coherent, and comparable, and that consolidated nancial information is fair, reliable, and can be obtained in a timely manner. Each subsidiary reports nancial information on a monthly basis. This includes the balance sheet, the income statement, the statement of cash ows, and a working capital analysis. A review of each business segment is presented to the Board. The review includes “actual versus budget”, nancial and non-nancial information, the highlights of the reporting period, the business segment perspectives, and is a key component of Viohalco’s decision-making process. VIOHALCO | ANNUAL REPORT 2021 101 ■ Conict of interests Pursuant to Article 9 of the Charter, in the event a conict of interests with a member of the Board, a shareholder, or other Viohalco subsidiary, may arise, the Board is required to implement the specic procedures of conict resolution set forth in articles 7:96 and 7:97 of the BCCA. Each member of the Board and the Executive Management is required to always act without conict of interests and always put the interest of Viohalco before his individual interest. Each member of the Board and the Executive Management is required to always arrange his or her personal business so as to avoid direct and indirect conict of interests with Viohalco. All members of the Board are required to inform the Board of conflicts of interests as they arise. If the conflict of interests is of proprietary nature, they will abstain from participating in the discussions and deliberations on the matter involved in accordance with article 7:96 of the BCCA. If the conflict of interests is not covered by the provisions of the BCCA and involves a transaction or contractual relationship between Viohalco or one of its related entities, on the one hand, and any member of the Board or the Executive Management (or a company or entity with which such member of the Board or the Executive Management has a close relationship), on the other hand, such member will inform the Board of the conflict. The Board is under the obligation to check that the approval of the transaction is motivated by Viohalco’s interest only and that it takes place at arm’s length. In all cases involving a conict of interests not covered by article 7:96 of the BCCA, the member of the Board aected by the conict of interests is required to judge whether he or she should abstain from participating in the discussions and the vote. Since the listing of the Company, the Board has not been notied of any transaction or other contractual relationship between Viohalco and its Board members which caused a conict of interests within the meaning of articles 7:96 and 7:97 of the BCCA. ■ Shareholders 1. Capital structure On December 31, 2021, the Company’s share capital amounted to EUR 141,893,811.46 represented by 259,189,761 shares without nominal value. There is no authorised share capital. All shares of the Company belong to the same class of securities and are in registered or dematerialised form. Shareholders may select, at any time, to have their registered shares converted into dematerialised shares and vice versa. Share transfers are not restricted in the Company’s articles of association; all Company’s shares are freely transferable. Each share entitles the holder to one voting right. 2. Restrictions on voting rights The articles of association do not provide for special restrictions on the shareholders’ voting rights. Provided that the shareholders are admitted to the Shareholders’ Meeting and their rights are not suspended, they enjoy unrestricted freedom in exercising their voting rights. The relevant provisions governing the shareholders’ admission to the Shareholders’ Meeting are set out in article 19 of Viohalco’s articles of association. Article 7.3 of the articles of association provides that the Company’s shares are indivisible and that it recognises only one holder per share. The Board has the right to suspend the exercise of all rights attached to jointly owned shares until a single representative of the joint owners has been appointed. 3. Transparency Pursuant to the Belgian law of 2 May 2007 on the disclosure of major holdings in issuers whose shares are admitted to trading on a regulated market and laying down miscellaneous provisions (the Transparency Law), the Company requires that all any natural and legal person, who directly or indirectly acquires voting securities in the Company, notifies the Company and the Financial Services and Markets Authority (FSMA) of the number and proportion of existing voting rights they hold, where the voting rights attached to the voting securities reach 5% or more of the total existing rights. A similar notification is required in the following cases: • direct or indirect acquisition or disposal of voting securities, or change of the breakdown of the voting rights, where the proportion of voting rights attached to the securities held reaches or exceeds 10%, 15%, 20% and so on, by increments of 5%, of the total existing voting rights; • rst admission of the Company’s shares to trading on a regulated market, where the voting rights attached to the voting securities represent 5% or more of the total existing voting rights; • conclusion, modication or termination by natural or legal persons of an agreement to act in concert where the proportion of the voting rights that are the subject of the agreement, or the proportion of the voting rights held by a party to the agreement, reaches, exceeds or falls below one of the thresholds provided for in § 1, or the nature of the agreement to act in concert is modied; • crossing of stricter notication thresholds added by the Company’s articles of association. The notication must be made as soon as possible and, not later than four trading days following the acquisition or disposal of the voting rights triggering the reaching of the initial threshold. The Company must publish the information so notied within three trading days following receipt of the notication. At Shareholders’ Meetings, shareholders cannot cast more votes than those attached to the securities or rights they have notified to the Company, in pursuance to the Transparency Law, before the date of the Shareholders’ Meeting, subject to certain exceptions. The form, on which such notications must be made, together with additional explanations, is available on the FSMA website (www.fsma.be). The voting rights held by the major shareholders of the Company are available on the website of Viohalco (www.viohalco.com ). Viohalco is not aware of the existence of any agreement between its shareholders which may lead to restrictions on the transfer or the exercise of the voting rights attached to the shares of the Company. VIOHALCO | ANNUAL REPORT 2021 102 ■ Shareholders’ meeting 1. Meetings The Annual Ordinary Shareholders’ Meeting of the Company is held on the last Tuesday of May at 12:00 p.m. or, if the day is a public holiday in Belgium, on the previous business day, at the same time. It takes place in Brussels, at the registered oce of the Company or at a place indicated in the convening notice of the Shareholders’ Meeting. The other Shareholders' Meetings of the Company must take place on the date, hour and place indicated in the convening notice of the Shareholders' Meeting. They may take place in locations other than the Company’s registered oce. The Annual, the Special and Extraordinary Shareholders' Meetings of the Company may be convened by the Board or by the statutory auditor of the Company, or at the request of shareholders representing at least ten (10) % of the Company's share capital. 2. Quorum and majority required for modication of the articles of association The modication of Viohalco’s articles of association requires that two thirds (2/3) of the share capital are present or represented, and that it is approved by a qualied majority of 75% of the votes cast. If the quorum of two thirds is not reached during a rst Shareholders’ Meeting, a second Meeting can be convened with the same agenda and shall lawfully meet if 60% of the Company’s share capital is present or represented. If this second Meeting quorum is not reached, a third Meeting can be convened and shall lawfully meet if 58% of the Company’s share capital is present or represented. ■ Share information and evolution of the shares Τhe share capital of Viohalco is set at EUR 141,893,811.46 and is divided into 259,189,761 shares without nominal value. The shares have been issued in registered and dematerialised form. All the shares are freely transferable and fully paid up. The Company has not issued any other category of shares, such as non-voting or preferential shares. All the shares representing the share capital have the same rights. In accordance with the articles of association of the Company, each share entitles its holder to one vote. Viohalco’s shares are listed under the symbol “VIO” with ISIN code BE0974271034 on the regulated market of Euronext Brussels and on the main market of the Athens Stock Exchange (Athex) with the same ISIN code and under the symbol “VIO” (in latin characters) and “BIO” (in Greek characters). ■ Market data The table below sets forth, for the periods indicated the maximum and minimum year-end closing prices, and the end of the year closing prices of Viohalco S.A. on Euronext Brussels and Athens Stock Exchange. Share price EURONEXT BRUSSELS in EUR 2021 2020 At the end of the year 4.59 3.71 Maximum 5.30 3.98 Minimum 3.23 1.54 Share price ATHENS EXCHANGE in EUR 2021 2020 At the end of the year 4.59 3.74 Maximum 5.19 3.99 Minimum 3.32 1.52 ■ Investor relations contact details Soa Zairi Chief Investor Relations Ocer Email: [email protected] Viohalco S.A. Viohalco S.A. – Greek Branch 30 Marnix Avenue, 16 Himaras Street, 1000 Brussels, 151 25 Maroussi, Athens Belgium Greece Belgium tel: Greece tel: (+32) 2 224 09 11 (+30) 210 6861 111, (+30) 210 6787 773 www.viohalco.com Market NYSE Euronext Brussels Ticker VIO ISIN code BE0974271034 Market Athens Stock Exchange Ticker VIO (in latin characters) and BIO (in Greek characters) ISIN code BE0974271034 Viohalco remains committed to high-quality and transparent nancial reporting. Viohalco’s consolidated nancial statements have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (“IFRSs as adopted by the EU”). VIOHALCO | ANNUAL REPORT 2021 103 ■ Shareholding structure According to the last transparency notications, the shareholding structure of Viohalco is as follows: Name (Shareholders) % voting rights Ippokratis Ioannis Stassinopoulos 30.31% (7.05% exercised in his own name and 23.25% exercised in the name and on behalf of KIKPE Foundation in his capacity as President of the KIKPE Foundation’s Board) Nikolaos Stassinopoulos 27.43% Evangelos Stassinopoulos 19.20% Michail Stassinopoulos 7.01% ■ Distribution and dividend policy As a holding company with majority participations in industrial and commercial companies, Viohalco’s dividend policy depends on the ability of these companies to generate prot and cash ows sucient to secure capital invested, to support growth and long- term sustainability and pay dividends. As a matter of corporate policy, and based on careful evaluation of each year’s nancial results and of the wider economic and business context, the Company assesses whether it is sounder to re-invest the totality or part of the annual prots and dividends received into the operating companies’ businesses or to pay dividends to its shareholders. The Company can give no assurance that it will make any dividend payment, for any given year in the near or distant future. Such payment will always be conditional on the complex interplay of a broad number of factors, which include Viohalco’s overall strategy and business prospects, evolution of earnings, capital requirements and surplus, general nancial conditions, existing contractual restrictions, as well as other factors which the Board of Directors may each time deem relevant. ■ Financial calendar Date Event Friday, March 18, 2022 Financial results 2021 conference call for investors and analysts Wednesday, April 20, 2022 Publication of Annual Report 2021 Tuesday, May 31, 2022 Ordinary General Shareholders’ Meeting 2022 Friday, June 3, 2022 Ex-Dividend date of scal year 2021 Monday, June 6, 2022 Dividend beneciaries of scal year 2021 - Record date (The shares will trade ex-dividend before June 17, 2022, which is the expiration day of Futures Contracts (June series) in the Athens Stock Exchange and before July 15, 2022, which is the expiration date for the Futures Contracts on the FTSE/ATHEX Large Cap index) Tuesday, June 7, 2022 Dividend payment of scal year 2021 Thursday, September 22, 2022 Half yearly 2022 results VIOHALCO | ANNUAL REPORT 2021 104 VIOHALCO | ANNUAL REPORT 2021 105 VIOHALCO | ANNUAL REPORT 2021 106 J. Appendix – Alternative Performance Measures (APMs) Introduction Viohalco management has adopted, monitors and reports internally and externally P&L alternative performance measures (‘APMs’), namely EBITDA, EBIT, adjusted EBITDA (a-EBITDA) and adjusted EBIT (a-EBIT) on the basis that they are appropriate measures reecting the underlying performance of the business. These APMs are also key performance metrics on which Viohalco prepares, monitors and assesses its annual budgets and long-term (5 year) plans. However, it must be noted that adjusted items should not be considered as non-operating or non-recurring items. Relating to balance sheet items, Viohalco management monitors and reports the net debt measure. General Denitions EBIT EBIT is dened as prot for the period before: • income taxes; • Share of prot/loss of equity-accounted investees, net of tax; and • net nance cost. a-EBIT a-EBIT is dened as EBIT, excluding : • metal price lag; • impairment / reversal of impairment of xed and intangible assets; • impairment / reversal of impairment of investments; • gains/losses from sales of xed assets, intangible assets and investments; • exceptional litigation fees and nes; • other exceptional or unusual items. EBITDA EBITDA is dened as prot for the period before: • income taxes; • Share of prot/loss of equity-accounted investees, net of tax; • net nance cost; • depreciation and amortization. a-EBITDA a-EBITDA is dened as EBITDA excluding the same line items as a- EBIT. Net Debt Net Debt is dened as the total of: • Long term borrowings; • Short term borrowings; Less: Cash and cash equivalents. Metal Price Lag Metal price lag is the P&L eect resulting from uctuations in the market prices of the underlying commodity metals (ferrous and non-ferrous) which Viohalco subsidiaries use as raw materials in their end-product production processes. Metal price lag exists due to: 1. the period of time between the pricing of purchases of metal, holding and processing the metal, and the pricing of the sale of nished inventory to customers; 2. the eect of the inventory opening balance (which in turn is aected by metal prices of previous periods) on the amount reported as cost of sales, due to the costing method used (e.g. weighted average) ;and 3. certain customer contracts containing xed forward price commitments which result in exposure to changes in metal prices for the period of time between when our sales price xes and the sale actually occurs. Most of Viohalco subsidiaries use back-to-back matching of purchases and sales, or derivative instruments in order to minimize the eect of the Metal Price Lag on their results. However, there will be always some impact (positive or negative) in the P&L, since inventory in the non-ferrous segments (i.e. aluminium, copper and cables) is treated as being held on a permanent basis (minimum operating stock), and not hedged, in the ferrous segments (i.e. steel and steel pipes), no commodities hedging occurs. VIOHALCO | ANNUAL REPORT 2021 107 Reconciliation tables EBIT and EBITDA Steel Real Other 2021 (Amounts in EUR thousands) Aluminium Copper Cables pipes Steel estate activities Total EBT (as reported in Statement of Prot or Loss) 59,556 58,979 45,754 -15,407 108,943 15,347 2,813 275,984 Adjustments for: Share of prot/loss (-) of Associates -1,180 4,069 0 -386 -318 344 0 2,530 Net Finance Cost 20,858 14,624 21,874 7,488 26,091 3,452 1,494 95,882 EBIT 79,234 77,672 67,629 -8,305 134,716 19,144 4,307 374,396 Add back: Depreciation & Amortization 59,093 16,665 16,659 8,861 25,600 8,777 4,234 139,889 EBITDA 138,327 94,338 84,287 555 160,316 27,921 8,541 514,285 Steel Real Other 2020 (Amounts in EUR thousands) Aluminium Copper Cables pipes Steel estate activities Total EBT (as reported in Statement of Prot or Loss) 21,529 16,000 35,549 1,575 -24,776 10,511 -1,114 59,273 Adjustments for: Share of prot/loss (-) of Associates -511 2,271 0 67 -86 0 0 1,740 Net Finance Cost 14,881 14,143 21,380 10,609 25,687 3,952 1,655 92,307 EBIT 35,899 32,413 56,929 12,251 826 14,463 540 153,321 Add back: Depreciation & Amortization 53,976 15,268 15,117 8,855 29,091 5,946 3,767 132,019 EBITDA 89,875 47,680 72,046 21,106 29,917 20,409 4,308 285,340 * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. VIOHALCO | ANNUAL REPORT 2021 108 a-EBIT and a-EBITDA Steel Real Other 2021 (Amounts in EUR thousands) Aluminium Copper Cables pipes Steel estate activities Total EBT (as reported in Statement of Prot or Loss) 59,556 58,979 45,754 -15,407 108,943 15,347 2,813 275,984 Adjustments for: Net nance cost 20,858 14,624 21,874 7,488 26,091 3,452 1,494 95,882 Metal price lag -19,694 -35,193 4,915 0 -37,746 0 0 -87,718 Share of prot(-)/ loss of equity investees, net of tax -1,180 4,069 0 -386 -318 344 0 2,530 Impairment/ Reversal of Impairment (-)of PP&E, 2,067 0 0 0 0 -18,149 507 -15,575 intangibles and inv. property Gains (-) /losses from sales of PP&E, intangibles 524 -187 -24 0 -13 -491 -114 -306 and inv. property Gains(-)/losses from sales of investments 0 0 0 0 0 0 21 21 Exceptional litigation fees and nes / income (-) 0 0 0 0 0 0 41 41 Provision for antidumping duties 0 0 0 12,842 0 0 0 12,842 Reorganization costs 0 0 0 978 0 0 0 978 Incremental coronavirus costs (1) 1,285 1,508 445 -234 1,096 -2,663 12 1,449 a-EBIT 63,415 43,800 72,964 5,280 98,054 -2,159 4,774 286,128 Add back: Depreciation & Amortization 59,093 16,665 16,659 8,861 25,600 8,777 4,234 139,889 a-EBITDA 122,508 60,465 89,623 14,141 123,654 6,618 9,008 426,017 Steel Real Other 2020 (Amounts in EUR thousands) Aluminium Copper Cables pipes Steel estate activities Total EBT (as reported in Statement of Prot or Loss) 21,529 16,000 35,549 1,575 -24,776 10,511 -1,114 59,273 Adjustments for: Net nance cost 14,881 14,143 21,380 10,609 25,687 3,952 1,655 92,307 Metal price lag 3,908 4,311 8,086 0 1,277 0 0 17,581 Share of prot/ loss(-) of equity investees, net of tax -511 2,271 0 67 -86 0 0 1,740 Impairment/ Reversal of Impairment (-) -164 561 0 0 0 -13,782 0 -13,386 on xed assets Gains (-) /losses from sales of xed assets 349 -1,567 -6 0 -1,133 -8 -842 -3,208 and intangibles Exceptional litigation fees and nes / income (-) 0 0 0 0 195 0 0 195 Reorganization costs 0 0 0 447 2,341 0 0 2,788 Incremental coronavirus costs (1) 1,000 1,099 1,370 467 1,008 -108 0 4,837 Other exceptional or unusual income (-) /expenses 0 0 0 0 0 0 315 315 a-EBIT 40,992 36,817 66,379 13,165 4,512 565 13 162,443 Add back: Depreciation & Amortization 53,976 15,268 15,117 8,855 29,091 5,946 3,767 132,019 a-EBITDA 94,968 52,084 81,495 22,020 33,603 6,511 3,781 294,463 * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision “Attributing Benet to Periods of Service”. (1) Incremental coronavirus costs concern all incremental costs incurred due to the coronavirus outbreak. Such costs are directly attributable to the coronavirus outbreak and are incremental to costs incurred prior to the outbreak and not expected to recur once the crisis has subsided and operations return to normal, while they are clearly separable from normal operations. VIOHALCO | ANNUAL REPORT 2021 109 Segmental Information Steel Real Other 2021 Aluminium Copper Cables pipes Steel estate activities Total Revenue 1,677,918 1,563,775 757,170 225,067 1,067,782 18,667 64,134 5,374,512 Gross prot 147,873 125,054 94,442 15,157 181,255 3,555 23,310 590,645 Operating prot 79,234 77,672 67,629 -8,305 134,716 19,144 4,307 374,396 Net nance cost -20,858 -14,624 -21,874 -7,488 -26,091 -3,452 -1,494 -95,882 Share of prot/loss (-) of equity investees 1,180 -4,069 0 386 318 -344 0 -2,530 Prot/Loss (-) before tax 59,556 58,979 45,754 -15,407 108,943 15,347 2,813 275,984 Income tax -10,762 -9,052 -7,788 -451 -20,053 -399 -7,490 -55,996 Prot/Loss (-) 48,793 49,927 37,966 -15,859 88,891 14,948 -4,678 219,989 Steel Real Other 2020 Aluminium Copper Cables pipes Steel estate activities Total Revenue 1,167,735 1,066,014 568,615 304,824 677,939 10,041 54,909 3,850,077 Gross prot 100,469 73,940 81,605 24,695 46,096 2,481 19,757 349,043 Operating prot 35,899 32,413 56,929 12,251 826 14,463 540 153,321 Net nance cost -14,881 -14,143 -21,380 -10,609 -25,687 -3,952 -1,655 -92,307 Share of prot/loss (-) of equity investees 511 -2,271 0 -67 86 0 0 -1,740 Prot/Loss (-) before tax 21,529 16,000 35,549 1,575 -24,776 10,511 -1,114 59,273 Income tax -8,292 -3,622 -8,911 -1,854 428 -1,952 -2,300 -26,502 Prot/Loss (-) 13,237 12,378 26,638 -279 -24,348 8,559 -3,414 32,771 * The comparative information is restated due to retroactive application of the IFRIC Agenda Decision ‘Attributing Benet to Periods of Service’. Net Debt Amounts in EUR thousands As at 31 December 2021 As at 31 December 2020 Long term Loans & borrowings 1,294,093 1,001,986 Lease liabilities 34,639 41,276 Short term Loans & borrowings 848,145 746,010 Lease liabilities 10,696 10,935 Total Debt 2,187,573 1,800,207 Less: Cash and cash equivalents -503,267 -219,161 Net Debt 1,684,306 1,581,046 VIOHALCO | ANNUAL REPORT 2021 110 K. EU Taxonomy Reporting Principles Allocation of turnover, Capex and Opex to one environmental objective Viohalco is particularly concerned by the objective of climate change mitigation. It was determined that activities 3.1, 3.8, 3.9 & 4.9 should be allocated to climate change mitigation, as this objective is more pertinent to Viohalco’s activities and the Taxonomy does not allow double counting using other objectives. Relevant judgement on the Taxonomy-eligibility of our activities Activity 3.1 - Manufacture of renewable energy technologies The description of activity 3.1 in Annex I to the Climate Delegated Act does not contain a clear denition of the term "renewable energy technologies" and is thus open to interpretation. In the absence of a “renewable energy technologies” denition and in the spirit of the EU Taxonomy, we dened this term by referring to the technical screening criteria for substantial contribution to climate change mitigation. We thus included revenue generated from production & installation of cable systems used in Renewable Energy Sources projects (mainly wind and solar), which enable the diusion of renewable energy in the electricity network. Activity 3.8 - Secondary aluminium production The description of activity 3.8 in Annex I to the Climate Delegated Act does not contain a clear denition of the term "secondary aluminium" and is thus open to interpretation. In the absence of a “secondary aluminium” denition and in the spirit of the EU Taxonomy, we dened this term by referring to the technical screening criteria for substantial contribution to climate change mitigation. We thus included revenue generated from materials produced as a result of aluminium remelting process, since none of the Viohalco subsidiaries’ activities include primary aluminium production. Activity 3.9 - Manufacture of iron and steel According to the description of activity 3.9 in Annex I to the Climate Delegated Act an economic activity should comply with at least one of the following technical screening criteria: a. iron and steel where GHG emissions, reduced by the amount of emissions assigned to the production of waste gases in accordance with point 10.1.5(a) of Annex VII to Regulation (EU) 2019/331 do not exceed the following values applied to the dierent manufacturing process steps: i. hot metal = 1,331 tCO 2 e/t product; ii. sintered ore = 0,163 tCO 2 e/t product; iii. coke (excluding lignite coke) = 0,144 tCO 2 e/t product; iv. iron casting = 0,299 tCO 2 e/t product; v. electric Arc Furnace (EAF) high alloy steel = 0,266 tCO 2 e/t product; vi. electric Arc Furnace (EAF) carbon steel = 0,209 tCO 2 e/t product. b. steel in electric arc furnaces (EAFs) producing EAF carbon steel or EAF high alloy steel, as dened in Commission Delegated Regulation (EU) 2019/331 and where the steel scrap input relative to product output is not lower than: i. 70 % for the production of high alloy steel; ii. 90 % for the production of carbon steel. According to our assessment the steel segment revenue complies with the above mentioned technical criteria of paragraph b as the steel making process of Viohalco subsidiaries are based on secondary production of steel using steel scrap in excess of 90% input. Activity 4.9 - Construction and Installation services of electricity distribution networks According to the description of activity 4.9 in Annex I to the Climate Delegated Act an economic activity should comply with at least one of the following technical screening criteria: c. the system is the interconnected European system, i.e. the interconnected control areas of Member States, Norway, Switzerland and the United Kingdom, and its subordinated systems; d. more than 67% of newly enabled generation capacity in the system is below the generation threshold value of 100 gCO 2 e/kWh measured on a life cycle basis in accordance with electricity generation criteria, over a rolling ve-year period; e. the average system grid emissions factor, calculated as the total annual emissions from power generation connected to the system, divided by the total annual net electricity production in that system, is below the threshold value of 100 gCO 2 e/kWh measured on a life cycle basis in accordance with electricity generation criteria, over a rolling ve-year period; According to our assessment the cables segment revenue generated from projects relating to the interconnection of islands complies with the above mentioned technical criteria a. Taxonomy-non-eligible economic activities The activities that have not been identied as Taxonomy eligible, and which therefore comprise the Taxonomy non-eligible %, are currently not included among the sectors and activities included in the EU Taxonomy; however, they could be included in the activities envisaged in the additional four environmental objectives identied in the Regulation that are currently being standardised. VIOHALCO | ANNUAL REPORT 2021 111 Taxonomy-eligible Capex and Opex and individually Taxonomy- eligible Capex and Opex With regard to Capex and Opex related to our Taxonomy-eligible economic activities and Capex/Opex related to purchases and measures that we consider as individually Taxonomy-eligible, we refer to the explanations in the sections “Capex KPI” and “Opex KPI” in the description of our accounting policies. KPIs and accounting policies Reporting requirements include the eligibility percentage of the Turnover, CAPEX and OPEX for the companies that are already included in the Sustainable Finance E.U. law. Article 10(1) of the Disclosures Delegated Act explicitly requires that in the rst year of implementation, non-nancial undertakings should disclose "the proportion of Taxonomy-eligible and Taxonomy non-eligible economic activities in their total turnover, capital and operating expenditure". Turnover KPI Denition The proportion of Taxonomy-eligible economic activities has been calculated as the part of turnover derived from the economic activities presented below (numerator): • 3.1 Manufacture of renewable energy technologies • 4.9 Transmission and distribution of electricity • 3.8 Secondary aluminium production • 3.9 Manufacture of iron and steel divided by the turnover of Viohalco’s total turnover (denominator) for nancial year 2021. For further details on our turnover accounting policy please refer to page 125 of our Annual Report 2021. Reconciliation Turnover of Viohalco can be reconciled to our consolidated nancial statements, in “Operating segments” section, on page 140 of our Annual Report 2021. Capex KPI Denition The Capex KPI is dened as Taxonomy-eligible Capex (numerator) divided by Viohalco’s total Capex (denominator). The numerator consists of Taxonomy-eligible Capex related to assets or processes that are associated with the economic activities presented below (numerator): • 3.1 Manufacture of renewable energy technologies • 4.9 Transmission and distribution of electricity • 3.8 Secondary aluminium production • 3.9 Manufacture of iron and steel We consider that assets and processes are associated with Taxonomy- eligible economic activities when they are essential components necessary to execute an economic activity. Consequently, all Capex invested into machinery for the above mentioned activities have been included in the numerator of the Capex KPI. In particular, secondary aluminium Capex includes Capex related to the production of aluminium from secondary raw materials (including scrap and metal-bearing materials) and the remelting and alloying processes. The denominator consists of Viohalco companies additions to tangible and intangible xed assets during nancial year 2021, before depreciation, amortisation and any re-measurements, including those resulting from revaluations and impairments. It includes acquisitions of tangible xed assets (IAS 16), intangible xed assets (IAS 38) and investment properties (IAS 40). Additions resulting from business combinations are also included. Goodwill is not included in Capex, as it is not dened as an intangible asset in accordance with IAS 38. For further details on our accounting policies regarding Capex please refer to page 128 of our Annual Report 2021. Reconciliation Capex of Viohalco can be reconciled to our consolidated nancial statements, in “Operating segments” section, on page 140 of our Annual Report 2021. Opex KPI Denition The Opex KPI is dened as Taxonomy-eligible Opex (numerator) divided by total Viohalco’s total Opex (denominator). The numerator consists of Taxonomy-eligible Opex related to assets or processes that are associated with the economic activities presented below (numerator): • 3.1 Manufacture of renewable energy technologies • 4.9 Transmission and distribution of electricity • 3.8 Secondary aluminium production • 3.9 Manufacture of iron and steel Total Opex (denominator) consists of direct non-capitalised costs that relate to research and development, 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. This includes: • Research and development expenditure recognised as an expense during the reporting period. Τhis includes all non- capitalised expenditure that is directly attributable to research or development activities. VIOHALCO | ANNUAL REPORT 2021 112 • The volume of non-capitalised leases was determined in accordance with IFRS 16 and includes expenses for short-term leases and low-value leases. • Maintenance and repair and other direct expenditures relating to the day-to-day servicing of assets of property, plant and equipment were determined based on the maintenance and repair costs allocated to our internal cost centers. The related cost items constitute a portion of total operating expenses in the income statement. This also includes building renovation measures. In general, this includes sta costs, costs for services, and material costs for daily servicing as well as for regular and unplanned maintenance and repair measures. These costs are directly allocated to our PP&E including an appropriate allocation of overhead costs. This does not include expenditures relating to the day-to-day operation of PP&E such as raw materials, cost of employees operating the machine, electricity or uids that are necessary to operate PP&E. Direct costs for training and other human resources adaptation needs are excluded from the denominator and the numerator. This is because Annex I to Art. 8 Delegated Act lists these costs only for the numerator which does not allow a mathematically meaningful calculation of the Opex KPI. This section is included for the rst time in the section “Non- Financial Reporting”, pursuant to Regulation (EU) 2020/852. The information contained follows the requirements of the Regulation. Viohalco will follow the disclosure developments and will adapt the approach accordingly. VIOHALCO | ANNUAL REPORT 2021 113 L. Consolidated Financial Statements 2021 VIOHALCO | ANNUAL REPORT 2021 116 Contents Consolidated Statement of Financial Position 118 Consolidated Statement of Prot or Loss 119 Consolidated Statement of Other Comprehensive Income 120 Consolidated Statement of Changes in Equity 121 Consolidated Statement of Cash Flows 122 Notes to the Consolidated Financial Statements 123 1. Reporting entity 123 2. Basis of accounting 123 3. Functional currency and presentation currency 123 4. Use of estimates and judgements 123 5. Signicant accounting policies 124 6. Operating segments 139 7. Revenue 142 8. Other income and expenses 145 9. Net nance cost 146 10. Earnings per share 147 11. Employee benets 147 12. Employee benet expenses 149 13. Income tax expense 150 14. Inventories 153 15. Trade and other receivables 153 16. Cash and cash equivalents 154 17. Property, plant and equipment 155 18. Goodwill and intangible assets 157 19. Investment property 160 20. Equity-accounted investees 161 21. Other investments 163 22. Assets held for sale 163 23. Derivatives 163 24. Capital and reserves 165 25. Capital management 166 26. Loans and borrowings 166 27. Trade and other payables 169 28. Grants 169 29. Provisions 169 30. Financial instruments 170 31. Impact of Covid-19 pandemic 179 32. Subsidiaries 180 33. Joint operations 182 34. Non-controlling interests 182 35. Leases 184 36. Commitments 185 37. Contingent liabilities 185 38. Related parties 186 39. Auditor’s fees 187 40. Subsequent events 188 VIOHALCO | ANNUAL REPORT 2021 117 VIOHALCO | ANNUAL REPORT 2021 118 Consolidated Statement of Financial Position As at Amounts in EUR thousands Note 31 December 2021 31 December 2020 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) The notes on pages 123 to 188 are an integral part of these Consolidated Financial Statements. ASSETS Property, plant and equipment Right of use assets Intangible assets and goodwill Investment property Equity-accounted investees Other investments Deferred tax assets Derivatives Trade and other receivables Contract costs Non-current assets Inventories Trade and other receivables Contract assets Contract costs Derivatives Assets held for sale Current tax assets Cash and cash equivalents Current assets Total assets EQUITY Share capital Share premium Translation reserve Other reserves Retained earnings Equity attributable to owners of the Company Non-controlling interests Total equity LIABILITIES Loans and borrowings Lease liabilities Derivatives Deferred tax liabilities Employee benets Grants Provisions Trade and other payables Contract Iiabilities Non-current liabilities Loans and borrowings Lease liabilities Trade and other payables Contract Iiabilities Current tax liabilities Derivatives Provisions Current liabilities Total liabilities Total equity and liabilities 17 35 18 19 20 21 13 23 15 7 14 15 7 7 23 22 16 24 24 24 34 26 35 23 13 11 28 29 27 7 26 35 27 7 23 29 2,089,107 34,288 42,083 280,876 44,372 8,457 13,141 944 7,314 222 2,520,805 1,469,840 623,536 101,371 167 16,277 372 2,785 503,267 2,717,616 5,238,420 141,894 457,571 -24,450 440,437 399,175 1,414,626 240,969 1,655,594 1,294,093 34,639 3,587 97,263 24,183 33,985 1,825 17,615 9,889 1,517,080 848,145 10,696 1,093,804 51,482 40,035 7,563 14,020 2,065,746 3,582,826 5,238,420 1,954,096 38,498 39,545 270,413 38,089 8,324 17,206 936 10,349 222 2,377,678 1,074,589 447,459 68,517 491 7,225 730 1,663 219,161 1,819,835 4,197,513 141,894 457,571 -30,341 436,104 214,097 1,219,324 175,929 1,395,253 1,001,986 41,276 1,295 91,258 21,913 35,817 1,839 12,299 9,889 1,217,572 746,010 10,935 762,998 44,132 14,708 5,252 652 1,584,687 2,802,260 4,197,513 VIOHALCO | ANNUAL REPORT 2021 119 Consolidated Statement of Prot or Loss For the year ended 31 December Amounts in EUR thousands Note 2021 2020 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) The notes on pages 123 to 188 are an integral part of these Consolidated Financial Statements. Revenue Cost of sales Gross prot Other income Selling and distribution expenses Administrative expenses Impairment loss on trade and other receivables, including contract assets Other expenses Operating result (EBIT) Finance income Finance cost Net nance income / costs (-) Share of prot/ loss (-) of equity-accounted investees, net of tax Prot/Loss (-) before income tax expense Income tax expense (-) Prot/Loss (-) Prot/Loss (-) attributable to: Owners of the Company Non-controlling interests Earnings per share (in EUR per share) Basic and diluted 7 8 8 8 8 30 8 9 9 20 13 10 5,374,512 -4,783,867 590,645 43,422 -80,351 -142,620 -2,698 -34,003 374,396 2,371 -98,253 -95,882 -2,530 275,984 -55,996 219,989 194,994 24,995 219,989 0.752 3,850,077 -3,501,034 349,043 44,240 -76,001 -132,928 -1,497 -29,536 153,321 1,648 -93,955 -92,307 -1,740 59,273 -26,502 32,771 21,377 11,394 32,771 0.082 Consolidated Statement of Other Comprehensive Income For the year ended 31 December Amounts in EUR thousands Note 2021 2020 VIOHALCO | ANNUAL REPORT 2021 120 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) The notes on pages 123 to 188 are an integral part of these Consolidated Financial Statements. Prot / Loss (-) Items that will never be reclassied to prot or loss: Equity investments at FVOCI - net change in fair value Remeasurements of dened benet liability Related tax Total Items that are or may be reclassied to prot or loss Foreign currency translation dierences Changes in fair value of cash ow hedges –eective portion Changes in fair value of cash ow hedges - reclassied to prot or loss Related tax Total Other comprehensive income / expense (-) after tax Total comprehensive income / expense (-) after tax Total comprehensive income attributable to Owners of the Company Non-controlling interests Total comprehensive income / expense (-) after tax 21 11 13 30 30 13 219,989 702 -1,063 222 -139 7,731 4,839 -1,713 -447 10,409 10,270 230,259 203,578 26,681 230,259 32,771 -518 -1,057 175 -1,400 -11,155 2,174 1,857 -623 -7,747 -9,147 23,624 14,510 9,114 23,624 Consolidated Statement of Changes in Equity 2021 Non- Share Share Other Translation Retained controlling Total Amounts in EUR thousands Note capital premium reserves reserve earnings Total interests equity VIOHALCO | ANNUAL REPORT 2021 121 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) The notes on pages 123 to 188 are an integral part of these Consolidated Financial Statements. Balance as at 1 January 2021 Total comprehensive income Prot/loss (-) Other comprehensive income Total comprehensive income Transactions with owners of the Company Capitalization of reserves Loss of Control/Disposal of subsidiary Dividends Total Changes in ownership interests: Acquisition of NCI Other changes in ownership interests Balance as at 31 December 2021 24 141,894 0 0 0 0 0 0 0 0 0 141,894 457,571 0 0 0 0 0 0 0 0 0 457,571 436,104 0 2,985 2,985 1,150 0 0 1,150 331 -133 440,437 -30,341 0 5,880 5,880 0 49 0 49 -100 60 -24,450 214,097 194,994 -281 194,713 -1,338 -29 -7,776 -9,142 -5,112 4,620 399,175 1,219,325 194,994 8,584 203,578 -188 21 -7,776 -7,943 -4,881 4,547 1,414,626 175,929 24,995 1,686 26,681 188 0 -3,421 -3,233 -2,619 44,211 240,969 1,395,253 219,989 10,270 230,259 0 21 -11,196 -11,176 -7,500 48,758 1,655,594 2020 Non- Share Share Other Translation Retained controlling Total Amounts in EUR thousands Note capital premium reserves reserve earnings Total interests equity Balance as at 1 January 2020 Impact of change in accounting policy Adjusted balance at 1 January 2020 Total comprehensive income Prot/loss (-) Other comprehensive income Total comprehensive income Transactions with owners of the Company Capitalization of reserves Share capital increase of subsidiary Mergers & absorptions Loss of Control/Disposal of subsidiary Dividends Total Changes in ownership interests: Acquisition of NCI Other changes in ownership interests Balance as at 31 December 2020 24 32-34 141,894 0 141,894 0 0 0 0 0 0 0 0 0 0 0 141,894 457,571 0 457,571 0 0 0 0 0 0 0 0 0 0 0 457,571 426,607 0 426,607 0 2,690 2,690 3,607 0 3,271 -33 0 6,845 0 -39 436,104 -21,711 0 -21,711 0 -8,629 -8,629 0 0 0 0 0 0 0 0 -30,341 184,854 11,567 196,420 21,377 -928 20,449 -3,607 0 4,197 33 -2,592 -1,969 -1,144 341 214,097 1,189,214 11,567 1,200,781 21,377 -6,867 14,510 0 0 7,467 0 -2,592 4,876 -1,144 302 1,219,325 145,859 1,338 147,197 11,394 -2,280 9,114 0 21,963 1,083 0 -2,013 21,033 -1,113 -302 175,929 1,335,073 12,905 1,347,978 32,771 -9,147 23,624 0 21,963 8,550 0 -4,605 25,909 -2,257 0 1,395,253 Consolidated Statement of Cash Flows For the year ended 31 December Amounts in EUR thousands Note 2021 2020 VIOHALCO | ANNUAL REPORT 2021 122 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) The notes on pages 123 to 188 are an integral part of these Consolidated Financial Statements. Cash ows from operating activities Prot / loss (-) for the period Adjustments for: Income tax expense/ credit (-) Depreciation of PP&E Depreciation of right of use assets Depreciation of intangible assets Depreciation of investment property Impairment loss/ Reversal of impairment loss (-) and write o of PP&E and intangible assets Impairment loss/ Reversal of impairment loss (-) of investment property Prot (-) / loss from sale of PP&E and intangible assets Prot (-) / loss from sale of investment property Amortization of grants Finance cost Finance income Impairment loss on trade and other receivables, including contract assets Prot (-) / loss from derivatives valuation Gain (-) / loss from business combinations Share of prot of equity accounted investees Decrease / increase (-) in inventories Decrease / increase (-) in receivables Decrease / increase (-) in contract assets Decrease / increase (-) in contract costs Decrease (-) / increase in liabilities Decrease (-) / increase in employees benets liability Decrease (-) / increase in provisions Decrease (-) / Increase in contract liabilities Interest charges and related expenses paid Income tax paid Net cash ows from operating activities Cash ows from investing activities Acquisition of PP&E and intangible assets Acquisition of investment property Proceeds from sales of PP&E and intangible assets Proceeds from sales of investment property Acquisition of / share capital increase of associates and joint ventures Acquisition of other investments Proceeds from sale of other investments Interest received Dividends received Cash inows / outows (-) from business combinations Net cash ows used in investing activities Cash ows from nancing activities Proceeds from new borrowings Repayment of borrowings Principal elements of lease payments Proceeds from sales of subsidiaries shares Proceeds from collection of grants Acquisition of NCI Dividends paid to shareholders Dividends paid to non-controlling interest Net cash ows from/used in (-) nancing activities Net decrease (-)/ increase in cash and cash equivalents Cash and cash equivalents at the beginning of period Foreign exchange eect on cash and cash equivalents Cash and cash equivalents at the end of period 13 17 35 18 19 8 8 8 8 28 9 9 30 9 8 20 19 21 21 9 9-20 26 26 26 32 28 219,989 55,996 120,686 8,518 6,673 6,898 -6,725 -6,922 170 -476 -2,886 98,253 -2,371 2,698 -644 21 2,530 502,407 -395,251 -227,609 -32,854 324 367,284 1,208 13,355 7,350 -266,193 -91,512 -14,106 130,596 -234,689 -13,065 2,927 1,229 -9,525 -77 637 557 1,060 0 -250,947 896,672 -514,171 -11,562 50,000 1,529 -7,500 -7,776 -3,421 403,773 283,422 219,161 684 503,267 32,771 26,502 116,194 8,450 6,376 4,157 -6,052 -4,700 -1,727 143 -3,158 93,955 -1,648 1,497 853 -1,623 1,740 273,731 -14,580 -59,617 52,669 -117 187,782 503 -922 -14,505 151,214 -88,541 -11,293 325,111 -231,201 -22,514 6,573 100 -12,543 -598 0 842 707 278 -258,356 240,868 -286,282 -10,688 0 495 -2,257 -2,592 -2,008 -62,464 4,290 214,499 371 219,161 Notes to the Consolidated Financial Statements 1. Reporting entity Viohalco S.A. (hereafter referred to as “the Company” or “Viohalco S.A.”) is a Belgian Limited Liability Company. The Company’s registered oce is located at 30 Avenue Marnix, 1000 Brussels Belgium. The Company’s Consolidated Financial Statements include those of the Company and its subsidiaries (together referred to as“Viohalco”). Viohalco S.A. is the holding company and holds participations in approximately 100 subsidiaries, two of which are listed, one on Euronext Brussels and the other on Athens Stock Exchange. With production facilities in Greece, Bulgaria, Romania, North Macedonia and the United Kingdom, Viohalco companies specialise in the manufacture of steel, copper and aluminium products. In addition, Viohalco owns substantial real estate properties in Greece. Its shares are traded on Euronext Brussels (trading ticker “VIO”) and has since February 2014 its secondary listing on the Athens Stock exchange (trading ticker “ΒΙΟ”). The Company’s electronic address is www.viohalco.com, where the Consolidated Financial Statements have been posted. 2. Basis of accounting Statement of compliance The Consolidated Financial Statements have been prepared in accordance with the International Financial Reporting Standards (IFRS) as adopted by the European Union and authorized by the Company’s Board of Directors on 17 March 2022. Details of the Viohalco’s accounting policies are included in Note 5. Basis of measurement The Consolidated Financial Statements have been prepared in accordance with the historical cost principle, with the exception of the following assets and liabilities, which are measured on an alternative basis on each reporting date. 1. Derivative nancial instruments (fair value) 2. Other Investments - Equity instruments (fair value) 3. Net dened benet liability (present value of the obligation) 4. Provisions (present value of the expected future cash ows) 3. Functional currency and presentation currency The functional and presentation currency of the parent Company is Euro. All amounts in the Consolidated Financial Statements are rounded to the nearest thousand, unless otherwise indicated. As such, due to rounding, gures shown as totals in certain tables may not be arithmetic aggregations of the gures that precede them. 4. Use of estimates and judgements Preparing Financial Statements in line with IFRS requires that Management makes judgements, estimates and assumptions that aect the application of Viohalco’s accounting policies and the reported amounts of assets, liabilities, income and expenses. The actual results may dier from these estimates. Management’s estimates and judgements are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively. Information about judgements, assumptions and estimation uncertainties that have signicant risk of resulting in a material adjustment in the year ended 31 December 2021 is included in the following notes: • Note 8 – Revenue recognition; • Note 12 – Measurement of dened benet obligations: key actuarial assumptions; • Note 14 – Recognition of deferred tax assets: availability of future taxable prots against which carried forward tax losses can be used; • Note 19 – Impairment loss test: key assumptions underlying recoverable amounts; • Note 31 – Measurement of ECL allowance for trade receivables and contract assets: key assumptions in determining loss rates; VIOHALCO | ANNUAL REPORT 2021 123 5. Signicant accounting policies The accounting principles described below have been consistently applied to all periods presented in these Consolidated Financial Statements and have also been consistently applied by Viohalco and its companies (subsidiaries and equity accounted investees). 5.1. Basis of Consolidation (a) Business combinations Acquisition of subsidiaries is accounted for using the acquisition method on the acquisition date, i.e. the date on which control is transferred to Viohalco. To assess control, Viohalco takes into account substantive potential voting rights. Viohalco and its companies measure goodwill on the acquisition date as follows: • the fair value of the consideration paid, plus • the value of any non-controlling interests in the acquired subsidiary, less • the fair value of identiable assets and liabilities assumed. Any goodwill that arises is tested annually for impairment loss. Any gain on a bargain purchase is immediately recognized in the Consolidated Statement of Prot or Loss. Any expenses directly linked with acquisition are directly posted in the Consolidated Statement of Prot or Loss. Any contingent consideration is recognized at its fair value on the acquisition date. (b) Subsidiaries Subsidiaries are entities controlled by Viohalco. Viohalco controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to aect those returns through its power over the entity. The nancial statements of the subsidiaries are included in the consolidated nancial statements from the date on which control commences, until the date on which control ceases. (c) Non-controlling interests NCI are measured at fair value or at their proportionate share of the acquiree’s identiable net assets at the date of acquisition. This measurement is done on an acquisition by acquisition basis. Changes in Viohalco’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions. (d) Loss of control When Viohalco and its companies lose control over a subsidiary, they derecognise the assets and liabilities of the subsidiary and any related NCI and other components of equity. Any resulting gain or loss is recognised in prot or loss. Any interest retained in the former subsidiary is measured at fair value when control is lost. (e) Interests in equity-accounted investees Associates are those entities in which Viohalco has signicant inuence, but not control or joint control, over the nancial and operating policies. This is generally the case where Viohalco holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting, after initially being recognised at cost. Investments in joint arrangements are classied as either joint operations or joint ventures. The classication depends on the contractual rights and obligations of each investor, rather than the legal structure of the joint arrangement. Joint operations: Viohalco recognises its direct right to the assets, liabilities, revenues and expenses of joint operations and its share of any jointly held or incurred assets, liabilities, revenues and expenses. These have been incorporated in the nancial statements under the appropriate headings. Joint ventures: A joint venture is an arrangement in which Viohalco has joint control, whereby Viohalco has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Interests in joint ventures are accounted for using the equity method, after initially being recognised at cost in the consolidated balance sheet. Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognise Viohalco’s share of the post-acquisition prots or losses of the investee in prot or loss, and Viohalco’s share of movements in other comprehensive income of the investee in other comprehensive income, until the date on which signicant inuence or joint control ceases. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment. When Viohalco’s share of losses in an equity-accounted investment equals or exceeds its interest in the entity, Viohalco does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity. VIOHALCO | ANNUAL REPORT 2021 124 (f) Transactions eliminated on consolidation Intra group balances and transactions and any unrealised income and expenses arising from intra group transactions are eliminated. Unrealized gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of Viohalco’s interest in the investee. Unrealized losses are eliminated in the same way as unrealized gains, but only to the extent that there is no evidence of impairment. 5.2. Foreign currency (a) Foreign currency transactions Transactions in foreign currencies are translated into the respective functional currencies of Viohalco’s companies at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into functional currency at the exchange rate at the reporting date. Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate, when the fair value was determined. Foreign currency gains and losses are recognized and classied in the consolidated statement of prot or loss based on the nature of the related item of the consolidated statement of nancial position. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency dierences arising from the translation of the following items are recognised in OCI: - qualifying cash ow hedges to the extent that the hedges are eective; - an investment in equity securities designated as at FVOCI. (b) Foreign operations The assets and liabilities of foreign operations, including goodwill and fair value adjustments arising on acquisition, are translated into Euro at the exchange rates of the reporting date. The income and expenses of foreign operations are translated into Euro at the exchange rates at the date of the transactions. The average rate for the period is deemed to be an appropriate rate. Foreign currency dierences are recognised in OCI and accumulated in the translation reserve, except to the extent that the translation dierence is allocated to NCI. 5.3. Revenue Viohalco recognizes revenue from the following major sources: - Sale of customized products and revenue from projects; - Sale of standard products; - Rendering of services. Revenue is measured based on the consideration specied in a contract with a customer and excludes amounts collected on behalf of third parties. Viohalco recognizes revenue when it transfers control of a product or service to a customer. Consideration can vary because of trade discounts, volume rebates, returns or other similar items. Depending on the type of variable consideration the most appropriate method for measuring this variable consideration is used. Sales of customized products and revenue from projects Regarding contracts for projects and for customized products produced for the exclusive use of certain customers and with no alternative use, there is an enforceable right to payment for performance completed to date if the contract is terminated by the customer or another party for reasons other than Viohalco’s subsidiaries’ failure to perform as promised. Hence, it is concluded that the client controls all of the work in progress, as the goods are being produced. Therefore, for such contracts revenue is recognised progressively based on the most appropriate output or input method, to measure progress towards completion. The most common methods used are the following: - For performance obligations related to production of customized products, depending on the type of contract concerned, the methods to measure progress is estimated based on: i. Production time elapsed, i.e. the ratio between the actual time spent on the production and the total number of scheduled production time. This method is used for submarine cables produced in long continuous lengths, since the production of such products normally lasts for signicant period of time and, as a result, the related performance obligations are satised as production time elapses. ii. The quantity of manufactured and tested products compared with the total quantity to be produced according to the contract. This method is used for customized land cables, steel pipes and aluminium products, since the production is performed in batches and as a result the performance obligations related are satised as certain batches of agreed quantities have been produced. VIOHALCO | ANNUAL REPORT 2021 125 - For installation phases of cables segment’s turnkey projects, the method to measure progress is based on appraisal of results achieved or milestones reached, based to clearly dened technical milestones, such as transport or meters of cables installed. When milestones are being used as a method to measure progress, these milestones faithfully depict the performance. Sales of standard products For products which are not considered customized, customers do not take control of the product until production is completed, therefore revenue is recognised at a point of time, when the control of the goods sold has been transferred. The timing of the transfer of control usually occurs when the goods have been shipped to the customers’ location, unless otherwise specied in the terms of the contract. The terms dened on the contracts with customers are according to Incoterms. Revenue recognised at a point in time is invoiced either simultaneously with its recognition, or within a short time period from its recognition. A receivable is recognised when the control is transferred to the customer, as this represents the point in time at which the right to consideration becomes unconditional. Rendering of services Revenue is recognised using the stage-of-completion method. The total consideration in the service contracts is allocated to all performance obligations in the contract based on their stand-alone selling prices. The stand-alone selling prices are determined based on the list prices at which Viohalco sells the services in separate transactions. Contract assets and contract liabilities The timing of revenue recognition, billings and cash collections results in billed accounts receivable, unbilled receivables (contract assets), and customer advances (contract liabilities). These contract assets and contract liabilities are presented on the Consolidated Statement of Financial Position in the lines ‘Contract assets’ and ‘Contract liabilities,’ respectively. For products and services for which revenue is recognised over time, amounts are billed as work progresses in accordance with agreed-upon contractual terms, either upon achievement of contractual milestones, or at the nal delivery and acceptance of the manufactured items. Generally, billing occurs subsequent to revenue recognition for customized products and services performed over time resulting in contract assets. However, when advances from customers are received before revenue is recognized, a contract liability is recognized. Contract costs Viohalco’s subsidiaries recognize the incremental costs of obtaining contracts with customers and the costs incurred in fullling contracts with customers that are directly associated with the contract as an asset, if those costs are expected to be recoverable and record them in the line “Contract costs” in the Consolidated Statements of Financial Position. Incremental costs of obtaining contracts are costs incurred to obtain a contract with a customer that would not have been incurred if the contract had not been obtained. Fullment costs are only capitalized if they generate or enhance resources that will be used to satisfy performance obligations in the future. Assets arising from contract costs are amortized using either the straight-line method over a period based on the estimated contract duration or based on the portion of revenue recognised during the execution of the related contract. Incremental costs of obtaining contracts are recognised as an expense when incurred, if the amortisation period of the assets would be one year or less. 5.4. Employee benets (a) Short-term employee benets Short-term employee benets are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if Viohalco and its companies have a present legal or constructive obligation to pay this amount, as a result of past service provided by the employee and the obligation can be estimated reliably. (b) Dened contribution plans Dened-contribution plans are plans for the period after the employee has ceased to work during which Viohalco and its companies pay a dened amount to a third legal entity without any other obligation. The accrued cost of dened-contribution programmes is recorded as an expense in the period that it concerns. (c) Dened benet plans Viohalco and its companies’ net obligation in respect of dened benet plans is calculated separately for each plan by estimating the amount of future benet that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. The discount rate is based on high-quality corporate bonds that are denominated in the currency in which the benets will be paid. The calculation of dened benet obligations is performed annually by a qualied actuary using the projected unit credit method, while benets are attributed over the last 16 years before retirement of each employee. VIOHALCO | ANNUAL REPORT 2021 126 Remeasurements of the net dened benet liability, which comprise actuarial gains and losses, are recognised immediately in OCI. Viohalco and its companies determine the net interest expense on the net dened benet liability for the period by applying the discount rate used to measure the dened benet obligation at the beginning of the annual period to the then-net dened benet liability, taking into account any changes in the net dened benet liability during the period as a result of contributions and benet payments. Net interest expense and other expenses related to dened benet plans are recognised in prot or loss. When the benets of a plan are changed or when a plan is curtailed, the resulting change in benet that relates to past service or the gain or loss on curtailment is recognised immediately in prot or loss. Viohalco and its companies recognise gains and losses on the settlement of a dened benet plan when the settlement occurs. (d) Termination benets Termination benets are expensed at the earlier of when Viohalco and its companies can no longer withdraw the oer of those benets and when they recognise costs for a restructuring. If benets are not expected to be settled wholly within 12 months of the reporting date, then they are discounted. 5.5. Government Grants Grants from the government are recognized at their fair value where there is a reasonable assurance that the grant will be received and Viohalco’s companies will comply with all attached conditions. Government grants relating to costs are deferred and recognized in the statement of prot or loss over the period necessary to match them with the costs that they are intended to compensate. Government grants relating to the purchase of property, plant and equipment are included in non-current liabilities as deferred government grants and are credited to the statement of prot or loss (line “other income”) on a straight line basis over the expected useful lives of the related assets. 5.6. Finance income and nance cost Viohalco and its companies nance income and nance costs mainly include: • interest income; • interest expense; • dividend income; • Foreign currency gains and losses from loans and deposits. Interest income or expense is recognised using the eective interest method. The ‘eective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expected life of the nancial instrument to: • the gross carrying amount of the nancial asset; or • the amortised cost of the nancial liability. In calculating interest income and expense, the eective interest rate is applied to the gross carrying amount of the asset or to the amortised cost of the nancial liability. Dividend income is recognised in prot or loss on the date on which Viohalco’s right to receive payment is established. 5.7. Income tax Income tax expense comprises current and deferred tax. It is recognised in prot or loss except to the extent that it relates to a business combination, or to items recognised directly in equity or in OCI. A. Current tax Current tax comprised the expected tax payable or receivable on the taxable income or loss for the year and any adjustment to the tax payable or receivable in respect of previous years. It is measured using tax rates enacted or substantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and liabilities are oset only if certain criteria are met. B. Deferred tax Deferred tax is recognised in respect of temporary dierences between the carrying amounts of assets and liabilities for nancial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for: • Temporary dierences on the initial recognition of assets or liabilities in a transaction that is not a business combination and that aects neither accounting nor taxable prot or loss; VIOHALCO | ANNUAL REPORT 2021 127 • Temporary dierences related to investments in subsidiaries, associates and joint arrangements to the extent that Viohalco and its companies are able to control the timing of the reversal of the temporary dierences and it is probable that they will not reverse in the foreseeable future; and • Taxable temporary dierences arising on the initial recognition of goodwill. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary dierences to the extent that is probable that future taxable prots will be available against which they can be used. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benet will be realised; such reductions are reversed when the probability of future taxable prots improves. Unrecognised deferred tax assets are reassessed at each reporting date and recognised to the extent that is has become probable that future taxable prots will be available against which they can be used. Deferred tax is measured at the tax rates that are expected to be applied to temporary dierences when they reverse, using tax rates enacted or substantively enacted at the reporting date. The measurements of deferred tax reect the tax consequences that would follow from the manner in which Viohalco and its companies expect, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred income tax assets and liabilities are oset when there is a legally enforceable right to oset current tax assets against current tax liabilities and when the deferred income taxes relate to the same scal authority. 5.8. Inventories Inventories are stated at the lower of cost and net realisable value. The cost is determined by applying the method of weighted average cost and includes the production and conversion cost and all direct expenses required to bring inventories at their current condition. The net realisable value is estimated based on the inventory’s current sales price, in the ordinary course of business activities, less any possible selling expenses, whenever such a case occurs. The write-down of inventories to net realisable value and any reversals are recognized in ‘cost of sales’ in the period in which the write-downs occur. 5.9. Property, plant and equipment A. Recognition and measurement Property, plant and equipment are presented at their acquisition cost less accumulated depreciation and impairment. The acquisition cost includes all expenses that are directly associated with the asset’s acquisition or self-construction. The cost of self-constructed fixed assets includes the cost of direct labour, materials and any other cost that is required for the fixed asset to be ready for use as well as any borrowing costs. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to Viohalco and its companies. Repair and maintenance costs are recorded in the Consolidated Statement of Profit or Loss when these are incurred. On the sale of property, plant and equipment, any difference that may arise between the price that is received and the carrying value thereof is recorded through profit or loss in the category ’Other operating income/expenses’. Borrowing costs related to the construction of qualifying assets are capitalised during the period required for the construction to be completed. B. Depreciation Depreciation is calculated to write o the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives and is generally recognised in prot or loss. Land is not depreciated. The component approach is followed if the cost of an asset comprises dierent major components of that asset with dierent useful lives. Buildings 10-33 years Plants 50 years Machinery 2-35 years Furniture and other equipment 2-8 years Transport means 4-15 years Computers are included in the category "Furniture and other equipment". Depreciation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. VIOHALCO | ANNUAL REPORT 2021 128 C. Reclassication to investment property When the use of a property changes from owner-occupied to investment property, the property is reclassied to investment property. The item is reclassied at its net book value at the date of reclassication which becomes its deemed cost for subsequent accounting purposes D. Reclassication to assets held for sale Non-current assets and disposal groups are reclassied as held for sale when their carrying amount will be recovered principally through a sale transaction rather than continuing use. 5.10. Intangible assets and goodwill A. Recognition and measurement Goodwill: Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses. Research and development: Expenditure on research activities is recognised in prot and loss as incurred. Development expenditure is capitalised only if the expenditure can be measured reliably, the product or process is technically and commercial feasible, future economic benets are probable and Viohalco’s companies intend and have sucient resources to complete development and to use or sell the asset. Otherwise, it is recognised in prot or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses. Software programmes: Software licenses are recorded at their acquisition cost less accumulated amortisation. These assets are amortised on the straight line method over their estimated useful lives, which ranges between 3 to 5 years. Expenses that are associated with the software’s maintenance are recognised in prot or loss in the year in which they are incurred. Other intangible assets: Other intangible assets, including customer relationships, patents and trademarks, that are acquired by Viohalco and its companies and have nite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses. Other intangible assets having indenite useful lives are measured at cost less accumulated impairment losses. B. Subsequent expenditure Subsequent expenditure is capitalised only when it increases the future economic benets embodied in the specic asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in prot or loss as incurred. C. Amortisation and useful lives Amortisation is calculated to write o the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives and is recognised in prot or loss. Goodwill and other intangible assets with indenite useful lives are not amortised. The estimated useful lives for the current and comparative periods are as follows: •Trademarks and licenses 10 – 15 years •Software programmes 3 – 5 years Some intangible assets included in “Trademarks and licences” have indenite useful lives and are therefore not amortised, but subject to an impairment testing. See Note 19 for detailed information. Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate. 5.11. Investment property Investment property, which includes land, buildings and right of use assets, is owned by Viohalco and its subsidiaries for the collection of rents and is not used for owner purposes. Investment property is presented at cost less depreciation. When the carrying amounts of investment property exceed their recoverable value, the dierence (impairment loss) is directly recorded in prot and loss as an expense. The reversal of impairment losses is also recognised in prot and loss as income. Land is not depreciated. The buildings are depreciated by applying the straight-line method. The expected useful life of buildings is 18-33 years. Management exercises judgement to determine whether a property qualies as investment property or not. The criteria related to this judgement are as follows: • Whether a property generates cash ows derived from rentals and capital appreciation largely independently of the other assets held by Viohalco; VIOHALCO | ANNUAL REPORT 2021 129 • Whether a property does not generate cash ows from the production or supply of goods or services or the use of property for administrative purposes that are attributable not only to property, but also to other assets used in the production or supply process; • Whether a building that is vacant will be held to be leased out or for capital appreciation; • Whether a property that is being constructed or developed for future use as investment property; • Whether Viohalco holds land for a currently undetermined future use. 5.12. Assets held for sale Non-current assets or disposal groups comprising assets and liabilities are classied as held-for-sale, if it is highly probable that they will be recovered primarily through sale rather than through continuing use. Such assets or disposal groups are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets or employee benefits which continue to be measured in accordance Viohalco and its companies’ other accounting policies. Impairment losses on initial classification as held-for-sale and subsequent gains and losses on remeasurement are recognised in profit or loss. Once classied as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated and any equity- accounted investee is no longer equity accounted. 5.13. Impairment A. Non-derivative nancial assets Financial instruments and contract assets Viohalco recognises loss allowances for ECLs on: • nancial assets measured at amortised cost; • contract assets; • lease receivables. Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime ECLs, except for cash and cash equivalents (12-month expected credit loss). Viohalco considers a nancial asset to be in default when the borrower is unlikely to pay its credit obligations in full, without recourse by Viohalco companies to actions such as realizing security (if any is held). Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a nancial instrument. 12-month ECLs are the portion of ECLs that result from default events that are possible within the 12 months after the reporting date (or a shorter period if the expected life of the instrument is less than 12 months). The maximum period considered when estimating ECLs is the maximum contractual period over which Viohalco companies are exposed to credit risk. Measurement of ECLs ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the dierence between the cash ows due to the entity in accordance with the contract and the cash ows that Viohalco expects to receive). ECLs are discounted at the eective interest rate of the nancial asset. Presentation of allowance for ECL in the statement of nancial position Loss allowances for nancial assets measured at amortised cost are deducted from the gross carrying amount of the assets. Impairment losses related to trade and other receivables, including contract assets, are presented separately in the statement of prot or loss. Write-o The gross carrying amount of a nancial asset is written o when Viohalco has no reasonable expectations of recovering a nancial asset in its entirety or a portion thereof. For all customers, Viohalco individually makes an assessment with respect to the timing and amount of write-o based on whether there is a reasonable expectation of recovery. Viohalco expects no signicant recovery from the amount written o. However, nancial assets that are written o could still be subject to enforcement activities in order to comply with Viohalco’s procedures for recovery of amounts due. B. Non-nancial assets At each reporting date, Viohalco and its companies review the carrying amounts of its non-nancial assets (other than inventories and deferred tax VIOHALCO | ANNUAL REPORT 2021 130 assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill and intangible assets with indenite useful life is tested annually for impairment loss. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inows from continuing use that are largely independent of the cash inows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benet from the synergies of the combination. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value in use is based on the estimated future cash ows, discounted to their present value using a pre-tax discount rate that reects current market assessments of the time value of money and the risks specic to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in prot or loss under ’Other expenses‘. They are allocated rst to reduce the carrying amount of any goodwill allocated to the CGU and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. 5.14. Leases From 1 January 2019, at inception of a contract, Viohalco assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identied asset for a period of time in exchange for consideration. To assess whether a contract conveys the right to control the use of an identied asset, the Viohalco companies use the denition of a lease in IFRS 16. Accounting for lease contracts as a lessee Viohalco companies lease various oces, warehouses, machinery and cars. Rental contracts are usually made for xed periods of 1 to 5 years, with some exceptions like lease of specialized machinery, ports, gas cylinders and land which are leased for longer periods. Viohalco recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, comprising the following: • 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. Subsequently, the right-of-use asset is measured at cost less any accumulated depreciation and impairment losses and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the following lease payments: • xed payments (including in-substance xed payments), less any lease incentives receivable; • variable lease payment that are based on an index or a rate; • amounts expected to be payable by the lessee under residual value guarantees; • the exercise price of a purchase option if the lessee is reasonably certain to exercise that option; and • payments of penalties for terminating the lease, if the lease term reects the lessee exercising that option. Lease payments are discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the incremental borrowing rate of the component that entered into the lease agreement. Generally, Viohalco uses its incremental borrowing rate as the discount rate. This is the rate that the lessee, i.e. each subsidiary of Viohalco, would have to pay on the commencement date of the lease for a loan of a similar term, and with similar security, to obtain an asset of similar value to the right-of-use asset in similar economic environment. The lease liability is subsequently increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured if there is a modification that is not accounted for as a separate lease; when there is a change in future lease payments arising from a change in an index or rate; a change in the estimate of the amount expected to be payable under a residual value guarantee; and changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. Lease liabilities and right-of-use assets are presented separately in the statement of nancial position. Right-of-use assets that meet the denition of investment property are presented within ‘Investment property’. Viohalco has elected not to separate non-lease components from lease components. VIOHALCO | ANNUAL REPORT 2021 131 Payments associated with leases of 12 months or less and leases of low-value assets are recognised on a straight-line basis as an expense in prot or loss. Low-value assets comprise IT-equipment and small items of oce furniture. Viohalco applies judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether Viohalco is reasonably certain to exercise such options impacts the lease term, which signicantly aects the amount of lease liabilities and right-of-use assets recognised. Viohalco has elected to present interest paid related to lease liabilities in the Consolidated Statement of Cash Flows, within the line ’Interest charges & related expenses paid‘ in operating activities. Accounting for lease contracts as a lessor Leases in which Viohalco companies do not transfer substantially all the risks and rewards incidental to ownership of an asset are classied as operating leases. Rental income is recognised as revenue on a straight-line basis over the term of the lease. Lease incentives granted are recognised as an integral part of the total rental income, over the term of the lease. Initial direct costs incurred in obtaining an operating lease are added to the carrying amount of the underlying asset and recognised as expense over the lease term on the same basis as lease income. 5.15. Financial instruments (a) Recognition and initial measurement Trade receivables and debt securities issued are initially recognised when they are originated. All other nancial assets and nancial liabilities are initially recognised when Viohalco becomes a party to the contractual provisions of the instrument. A nancial asset (unless it is a trade receivable without a signicant nancing component) or nancial liability is initially measured at fair value plus, for an item not at FVTPL, transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a signicant nancing component is initially measured at the transaction price. (b) Classication and subsequent measurement Financial assets On initial recognition, a nancial asset is classied as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassied subsequent to their initial recognition unless Viohalco changes its business model for managing nancial assets, in which case all aected nancial assets are reclassied on the rst day of the rst reporting period following the change in the business model. A nancial asset is measured at amortised cost if it meets both of the following conditions and is not designated as at FVTPL: - it is held within a business model whose objective is to hold assets to collect contractual cash ows; and - its contractual terms give rise on specied dates to cash ows that are solely payments of principal and interest on the principal amount outstanding. A debt investment is measured at FVOCI if it meets both of the following conditions and is not designated as at FVTPL: - it is held within a business model whose objective is achieved by both collecting contractual cash ows and selling nancial assets; and - its contractual terms give rise on specied dates to cash ows that are solely payments of principal and interest on the principal amount outstanding. On initial recognition of an equity investment that is not held for trading, Viohalco may irrevocably elect to present subsequent changes in the investment’s fair value in OCI. This election is made on an investment-by-investment basis. All nancial assets (except derivatives to which cash ow hedging is applied) not classied as measured at amortised cost or FVOCI as described above are measured at FVTPL. On initial recognition, Viohalco may irrevocably designate a nancial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL, if doing so eliminates or signicantly reduces an accounting mismatch that would otherwise arise. Financial assets – Business model assessment: Viohalco makes an assessment of the objective of the business model in which a nancial asset is held at a portfolio level because this best reects the way the business is managed and information is provided to management. Transfers of nancial assets to third parties in transactions that do not qualify for derecognition are not considered sales for this purpose, consistent with Viohalco companies’continuing recognition of the assets. Financial assets – Assessment whether contractual cash ows are solely payments of principal and interest: For the purposes of this assessment, ‘principal’ is dened as the fair value of the nancial asset on initial recognition. ‘Interest’ is dened as consideration for the time value of money and for the credit risk associated with the principal amount outstanding during a particular period of VIOHALCO | ANNUAL REPORT 2021 132 time and for other basic lending risks and costs (e.g. liquidity risk and administrative costs), as well as a prot margin. In assessing whether the contractual cash ows are solely payments of principal and interest, Viohalco considers the contractual terms of the instrument. This includes assessing whether the nancial asset contains a contractual term that could change the timing or amount of contractual cash ows such that it would not meet this condition. In making this assessment, Viohalco considers: • contingent events that would change the amount or timing of cash ows; • terms that may adjust the contractual coupon rate, including variable-rate features; • prepayment and extension features; and • terms that limit the claim to cash ows from specied assets (e.g. non-recourse features). Financial assets – Subsequent measurement and gains and losses: Financial assets at FVTPL These assets are subsequently measured at fair value. Net gains and losses, including any interest or dividend income, are recognised in prot or loss. Financial assets at amortised cost These assets are subsequently measured at amortised cost using the eective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in prot or loss. Any gain or loss on derecognition is recognised in prot or loss. Debt investments at FVOCI These assets are subsequently measured at fair value. Interest income calculated using the eective interest method, foreign exchange gains and losses and impairment are recognised in prot or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassied to prot or loss. Equity investments at FVOCI These assets are subsequently measured at fair value. Dividends are recognised as income in prot or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassied to prot or loss. Financial liabilities – Classication, subsequent measurement and gains and losses: Financial liabilities are classied as measured at amortised cost or FVTPL. A nancial liability is classied as at FVTPL if it is classied as held-for- trading, it is a derivative or it is designated as such on initial recognition. Financial liabilities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in prot or loss. Other nancial liabilities are subsequently measured at amortised cost using the eective interest method. Interest expense and foreign exchange gains and losses are recognised in prot or loss. Any gain or loss on derecognition is also recognised in prot or loss. (c) Derecognition Financial assets Viohalco derecognises a nancial asset when the contractual rights to the cash ows from the nancial asset expire, or it transfers the rights to receive the contractual cash ows in a transaction in which substantially all of the risks and rewards of ownership of the nancial asset are transferred or in which Viohalco neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the nancial asset. Viohalco enters into transactions whereby it transfers assets recognised in its statement of nancial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised. Financial liabilities Viohalco derecognises a nancial liability when its contractual obligations are discharged or cancelled, or expire. Viohalco also derecognises a nancial liability when its terms are modied and the cash ows of the modied liability are substantially dierent, in which case a new nancial liability based on the modied terms is recognised at fair value. On derecognition of a nancial liability, the dierence between the carrying amount extinguished and the consideration paid (including any non- cash assets transferred or liabilities assumed) is recognised in prot or loss. (d) Osetting Financial assets and nancial liabilities are oset and the net amount presented in the statement of nancial position when, and only when, Viohalco currently has a legally enforceable right to set o the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. (e) Derivatives and hedge accounting Viohalco has elected not to adopt the provisions of IFRS 9 regarding the hedge accounting and will continue applying IAS 39. Viohalco’s companies hold derivative nancial instruments designated as fair value or cash ow hedges. Derivatives are used to cover risks arising from uctuations in prices of metals, foreign exchange rates, interest rates on borrowings and energy prices (natural gas). VIOHALCO | ANNUAL REPORT 2021 133 Derivatives are initially measured at fair value; any directly attributable transaction costs are recognised in prot or loss as incurred. Subsequent to initial recognition, derivatives are measured at fair value and changes therein are generally recognised in prot or loss, unless the instrument qualies for cash ow hedge accounting. Gain or losses from derivatives are classied as operating or nancing expense according to the classication of the hedged item. Fair value hedge Derivatives are designated as fair value hedges when the exposure to changes in the fair value of a recognized nancial asset or liability is hedged. Changes in the fair value of derivatives that are designated and qualify as fair value hedges are recognised in the Consolidated Statement of Prot or Loss, along with any changes in the fair value of the hedged asset or liability that are attributable to the hedged risk. Cash ow hedge The eective portion of changes in the fair value of derivatives designated as cash ow hedges is recognised in the ’Hedging reserve‘. Any ineective proportion is recognized immediately in prot or loss. The amounts recorded in “Hedging Reserve” are reclassied to the consolidated statement of prot or loss in the same period or periods during which the hedged forecast cash ows aect prot or loss or the hedged item aects prot or loss. When a hedge item is sold or when the hedging proportion no longer meets the hedge accounting criteria, hedge accounting is discontinued prospectively, the amounts recorded in ‘Hedging reserve’ remain as a reserve and are reclassied to the consolidated statement of prot or loss when the hedged asset aects prots or losses. In the case of a hedge on a forecast future transaction which is no longer expected to be realized, the amounts recorded in ‘Hedging reserve’ are reclassied to the consolidated statement of prot or loss. Viohalco’s companies examine the eectiveness of the cash ow hedge at inception (prospectively) by comparing the critical terms of the hedging instrument with the critical terms of the hedged item, and then at every reporting date (retrospectively), the eectiveness of the cash ow hedge by applying the dollar oset method on a cumulative basis is examined. 5.16. Cash & cash equivalents Cash and cash equivalents comprise cash on hand and deposits held at call with nancial institutions and short-term highly liquid deposits with a maturity of three months or less, that are readily convertible to a known amount of cash and subject to an insignicant risk of changes in value. 5.17. Share capital Shareholder’s equity is composed of ordinary shares. Incremental costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted in equity (see note 5.7). 5.18. Provisions Provisions are measured by discounting the expected future cash ows at a pre-tax rate. The discount rate used for the determination of present value reects current market assessments of the time value of money and the risks specic to the obligation. Provisions are recognised when: (a) There is a present legal or constructive obligation as a result of past events. (b) Payment is probable to settle the obligation. (c) The amount of the payment in question can be reliably estimated. More specically: Provisions for pending court rulings are recognised when it is more likely than not, that a present obligation from this litigation exists, and payment is probable. Assurance warranty provisions are recognised when the product is sold and according to historical experience (probability that sold products will need to be replaced). The initial estimate of warranty-related costs is revised annually. Restructuring provisions are recognised only when Viohalco has a constructive obligation, which is when a detailed formal plan identies the business or part of the business concerned, the location and number of employees aected, a detailed estimate of the associated costs and an appropriate timeline, and the employees aected have been notied of the plan’s main features or when the company has already started to implement the plan. VIOHALCO | ANNUAL REPORT 2021 134 A provision for onerous contracts is measured at the present value of the lower of the expected cost of terminating a contract and the expected net cost of continuing with the contract. Before the provision is established, Viohalco recognises any impairment loss on the associated assets with the contract. 5.19. Earnings per Share Viohalco presents basic and diluted earnings per share. Basic earnings per share are calculated by dividing the net prot/ loss attributable to holders of the Company’s ordinary shares by the average weighted number of outstanding ordinary shares during each period. Diluted earnings per share are determined by adjusting the prot or loss attributable to holders of ordinary shares and the average weighted number of outstanding ordinary shares by the eect of all diluted eventual ordinary shares consisting of convertible notes and shares with options granted to the sta. 5.20. Operating prot Operating prot is the result generated from the continuing principal revenue-producing activities of Viohalco as well as other income and expenses related to operating activities. Operating prot excludes net nance costs, share of prot of equity-accounted investees and income taxes. 5.21. Fair value measurement ‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which Viohalco has access at that date. The fair value of a liability reects its non-performance risk. A number of Viohalco’s accounting policies and disclosures require the measurement of fair values, for both nancial and non-nancial assets and liabilities. When one is available, Viohalco measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sucient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in an active market, then Viohalco uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs. The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction. If an asset or a liability measured at fair value has a bid price and an ask price, then Viohalco measures assets and long positions at a bid price and liabilities and short positions at an ask price. The best evidence of the fair value of a nancial instrument on initial recognition is normally the transaction price – i.e. the fair value of the consideration given or received. If Viohalco determines that the fair value on initial recognition diers from the transaction price and the fair value is evidenced neither by a quoted price in an active market for an identical asset or liability, nor based on a valuation technique for which any unobservable inputs are judged to be insignicant in relation to the measurement, then the nancial instrument is initially measured at fair value, adjusted to defer the dierence between the fair value on initial recognition and the transaction price. Subsequently, that dierence is recognised in prot or loss on an appropriate basis over the life of the instrument but no later than when the valuation is wholly supported by observable market data or the transaction is closed out. 5.22. New standards, amendment to standards and interpretations of IFRS’s A number of new or amended standards became applicable for the current nancial year and subsequent years. Viohalco has applied all of the new standards, interpretations and amendments to existing standards that were mandatory for the rst time in the scal year beginning 1 January 2021 and none of the new or amended standards and interpretations has had material impact on recognition and measurement in the Consolidated Financial Statements, except for the eect of the adoption of the IFRIC Agenda Decision ‘Attributing Benet to Periods of Service’ as presented in note 5.23. Standards and Interpretations eective for the current nancial year: The following new standards and amendments to standards are mandatory for the rst time for the nancial year beginning 1 January 2021 and have been endorsed by the European Union: IFRS 9, IAS 39, IFRS 7, IFRS 4 and IFRS 16 (Amendments) ‘Interest rate benchmark reform – Phase 2’ The amendments complement those issued in 2019 and focus on the eects on nancial statements when a company replaces the old interest rate benchmark with an alternative benchmark rate as a result of the reform. More specically, the amendments relate to how a company will account for changes in the contractual cash ows of nancial instruments, how it will account for the change in its hedging relationships and the information it should disclose. VIOHALCO | ANNUAL REPORT 2021 135 IFRS 16 (Amendment) ‘Covid-19-Related Rent Concessions’ 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 modications. Instead, lessees that apply the practical expedient would account for those rent concessions as if they were not lease modications. International Financial Reporting Interpretations Committee (IFRIC) Agenda Decision: IAS 19 “Employee Benets” - Attributing Benet to Periods of Service An agenda decision was published in May 2021 by the IFRIC in relation to IAS 19 “employee benets” and more specically to how the applicable principles and requirements in IFRS Standards apply to attributing benet to periods of service. Further details and the impact on the Viohalco consolidated nancial statements from the adoption of this decision is presented in note 5.23. Standards and Interpretations eective for subsequent periods: The following new standards and amendments have been issued, but are not mandatory for the rst time for the nancial year beginning 1 January 2021 but have been endorsed by the European Union. The following amendments are not expected to have a material impact on Viohalco Consolidated Financial Statements in the current or future reporting periods. IFRS 16 (Amendment) ‘Covid-19-Related Rent Concessions’ (eective for annual periods beginning on or after 1 April 2021) 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 modication. 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 aects only payments originally due on or before 30 June 2022 (rather than only payments originally due on or before 30 June 2021). 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 (eective for annual periods beginning on or after 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 conicts 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 prot or loss. - Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets specify which costs a company includes when assessing whether a contract will be loss-making. - Annual Improvements 2018-2020 make minor amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IFRS 9 Financial Instruments, IAS 41 Agriculture and the Illustrative Examples accompanying IFRS 16 Leases. The following amendments have been issued, but are not mandatory for the rst time for the nancial year beginning 1 January 2021 and have not been endorsed by the European Union. The following amendments are not expected to have a material impact on Viohalco Consolidated Financial Statements in the current or future reporting periods. Amendments to IAS 1 ‘Presentation of Financial Statements: Classication of Liabilities as current or non-current’ (eective 01/01/2023), aect only the presentation of liabilities in the statement of nancial 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 classication 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 aected 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 aect the classication of a liability; - Clarify that classication is unaected 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 (eective 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: Denition of Accounting Estimates (eective 1 January 2023). The amendment to IAS 8, ‘Accounting Policies, Changes in Accounting Estimates and Errors’, claries how companies should distinguish changes in accounting policies from changes in accounting estimates. The amendments are eective for annual reporting periods beginning on or after 1 January 2023. Earlier application is permitted (subject to any local endorsement process). VIOHALCO | ANNUAL REPORT 2021 136 Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (eective 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 dierences arise on initial recognition. The amendments are eective for annual reporting periods beginning on or after 1 January 2023. Early adoption is permitted. Amendments to IFRS 17 Insurance contracts: Initial Application of IFRS 17 and IFRS 9 – Comparative Information (issued on 9 December 2021, eective 1 January 2023). The amendment is a transition option relating to comparative information about nancial assets presented on initial application of IFRS 17. The amendment is aimed at helping entities to avoid temporary accounting mismatches between nancial assets and insurance contract liabilities, and therefore improve the usefulness of comparative information for users of nancial statements. 5.23. Change in accounting policy In May 2021, the IFRS Interpretations Committee (IFRIC) nalized an agenda decision that includes material explaining how the applicable principles and requirements in IFRS Standards apply on attributing benets to periods of service on a specic fact pattern of a dened benet plan, which has the terms described below: a. employees are entitled to a lump sum benet payment when they reach a specied retirement age, provided they are employed by the entity when they reach that retirement age; and b. the amount of the retirement benet to which an employee is entitled depends on the length of employee service before the retirement age and is capped at a specied number of consecutive years of service. The indemnities' policy applied by Greek subsidiaries provides for a fact pattern that aligns with the one described in the IFRIC agenda decision. Therefore, to account for the Dened Benet Obligation, Greek subsidiaries of Viohalco are now attributing benets over the last 16 years before retirement of each employee. Prior to the issuance of this agenda decision, the Greek subsidiaries applied IAS 19 by attributing the benets dened in accordance with the applicable Greek legislation (Law 3198/1955, Law 2112/1920 and Law 4093/2012) during the period from the hiring until the expected retirement date of each employee. Based on IAS 8, this change shall be treated as a change in accounting policy. The following tables present the eect of implementing the nal agenda decision regarding every aected specic item of the consolidated nancial statements for the comparative periods. i. Consolidated Statement of Financial Position Eect on 2020 opening balances: At 31 December 2019 Amounts in EUR thousand As reported IAS 19 Restatement Restated gures Deferred tax assets 17,618 -2,946 14,672 Other Non-Current assets 2,201,781 0 2,201,781 Non-Current assets 2,219,399 -2,946 2,216,453 Current assets 1,843,511 0 1,843,511 Total assets 4,062,910 -2,946 4,059,964 Retained earnings 184,854 11,566 196,420 Other components of equity attributable to owners of the Company 1,004,361 0 1,004,361 Equity attributable to owners of the Company 1,189,215 11,566 1,200,781 Non-controlling interests 145,859 1,338 147,197 Total equity 1,335,074 12,904 1,347,978 Employee benets 37,362 -16,961 20,401 Deferred tax liabilities 82,317 1,111 83,428 Other Non-Current liabilities 1,036,145 0 1,036,145 Non-Current liabilities 1,155,824 -15,850 1,139,974 Current liabilities 1,572,012 0 1,572,012 Total liabilities 2,727,836 -15,850 2,711,986 Total equity and liabilities 4,062,910 -2,946 4,059,964 VIOHALCO | ANNUAL REPORT 2021 137 Eect on 2020 closing balances: At 31 December 2020 Amounts in EUR thousand As reported IAS 19 Restatement Restated gures Deferred tax assets 18,456 -1,250 17,206 Other Non-Current Assets 2,360,472 0 2,360,472 Non-Current assets 2,378,928 -1,250 2,377,678 Current assets 1,819,835 0 1,819,835 Total assets 4,198,763 -1,250 4,197,513 Retained earnings 201,467 12,630 214,097 Other components of equity attributable to owners of the Company 1,005,228 0 1,005,228 Equity attributable to owners of the Company 1,206,695 12,630 1,219,325 Non-controlling interests 174,431 1,498 175,929 Total equity 1,381,126 14,128 1,395,254 Employee benets 40,471 -18,558 21,913 Deferred tax liabilities 88,077 3,181 91,258 Other Non-Current liabilities 1,104,401 0 1,104,401 Non-Current liabilities 1,232,949 -15,377 1,217,572 Current liabilities 1,584,687 0 1,584,687 Total liabilities 2,817,637 -15,377 2,802,259 Total equity and liabilities 4,198,763 -1,250 4,197,513 ii. Consolidated Statement of Prot or Loss and OCI For the period ended 31 December 2020 Amounts in EUR thousand As reported IAS 19 Restatement Restated gures Revenue 3,850,077 0 3,850,077 Cost of sales -3,500,811 -223 -3,501,034 Gross prot 349,266 -223 349,043 Other income 44,240 0 44,240 Selling and distribution expenses -75,976 -25 -76,001 Administrative expenses -132,822 -106 -132,928 Reversal of / (Impairment loss) on receivables and contract assets -1,497 0 -1,497 Other expenses -29,701 165 -29,536 Operating result 153,511 -190 153,321 Net nance costs -92,307 0 -92,307 Share of prot of equity-accounted investees, net of tax -1,740 0 -1,740 Prot before tax 59,463 -190 59,273 Income tax expense -26,553 51 -26,502 Prot for the year 32,910 -139 32,771 Remeasurements of dened benet liability -2,844 1,787 -1,057 Other comprehensive income / (expense) after tax -8,265 0 -8,265 Related tax 600 -425 175 Total comprehensive income after tax 22,402 1,223 23,624 VIOHALCO | ANNUAL REPORT 2021 138 iii. Consolidated Statement of Cash Flows For the period ended 31 December 2020 Amounts in EUR thousand As reported IAS 19 Restatement Restated gures Cash ows from operating activities Prot of the period 32,910 -139 32,771 Adjustments for: - Income tax 26,553 -51 26,502 - Other 214,457 0 214,457 Changes in: - Employee benets 265 238 503 Other 50,897 -20 50,877 Net Cash inows from operating activities 325,082 28 325,111 Net Cash ows used in investing activities -258,356 0 -258,356 Net cash ows used in nancing activities -62,464 0 -62,464 Net (decrease)/ increase in cash and cash equivalents 4,262 29 4,290 Cash and cash equivalents at 1 January 214,499 0 214,499 Eect of movement in exchange rates on cash held 400 -29 371 Cash and cash equivalents at 31 December 219,161 0 219,161 6. Operating segments A. Basis for the division into segments For management purposes, Viohalco is split into seven major strategic reportable segments which operate in dierent industries: • Aluminium; • Copper; • Cables; • Steel pipes; • Steel; • Real estate; • Other activities. These segments oer dierent products and services, and are managed separately because they require dierent technology and marketing strategies. Such structural organization is determined by the nature of risks and returns associated with each business segment. It is based on the management structure, as well as the internal reporting system. It represents the basis on which Viohalco reports its segmental information. The segment analysis presented in these consolidated nancial statements reects operations analysed by business. This is the way the chief operating decision maker of Viohalco regularly reviews its’ operating results in order to allocate resources to segments and in assessing their performance. For the purposes of segmental reporting, all Viohalco companies, except those operating as trading companies, have been assigned to a specic reportable segment. Regarding the trading companies of Viohalco, their prot or loss and balance sheet gures have been allocated to the reportable segments, according to the nature of their transactions. A brief description of the segments is as follows: Aluminium: ElvalHalcor through its aluminium rolling division (Elval), its subsidiaries Symetal S.A., Elval Colour S.A. and Vepal S.A. along with Bridgnorth Aluminium and Etem Extrusions deliver a wide variety of products from aluminium coils and sheets for general applications and aluminium foil for household use, to special products, such as, rolled and extruded aluminium products for shipbuilding, automotive and construction industries, and lithographic coils. Copper: ElvalHalcor through its copper tubes division (Halcor) and its subsidiary Soa Med S.A. produce a wide range of copper and copper alloy products that span from copper and brass tubes, copper strips, sheets and plates, to copper bus bars and rods. Cables: Hellenic Cables companies consist one of the largest cable producers in Europe, manufacturing power, telecommunication and submarine cables, as well as enamelled wires and compounds. VIOHALCO | ANNUAL REPORT 2021 139 Steel Pipes: Corinth Pipeworks engages in the production of steel pipes for the transportation of natural gas, oil and water networks, as well as steel hollow sections which are used in construction projects. Steel: Sidenor Steel Industry, Stomana Industry and their subsidiaries manufacture long, at and downstream steel products. Real estate: Viohalco derives value from the real estate assets of its subsidiaries by developing and managing large-scale commercial and industrial properties. Other: Other activities mainly encompass expenses incurred by the parent (holding) company, along with the results of companies which operate in the Technology and R&D&I segment, ceramic trade activities (Vitruvit) and resource recovery segment. None of these activities met the quantitative thresholds for reportable segments in 2021 or 2020. B. Information about reportable segments The information disclosed in the tables below is derived directly from the internal nancial reporting system used by the executive management (i.e. chief operating decision maker) to monitor and evaluate the performance of the operating segments separately. The following tables illustrate the information about the reportable segments prot or loss, assets and liabilities at 31 December 2021 and 2020, and for the years ended. Revenue and operating prot per segment for 2021 were as follows: Steel Real Other Amounts in EUR thousands Aluminium Copper Cables Pipes Steel Estate activities Total Total revenue per segment 2,595,628 2,193,360 1,528,529 249,301 1,801,307 30,813 246,009 8,644,947 Inter-company revenue -917,710 -629,585 -771,359 -24,234 -733,525 -12,147 -181,875 -3,270,435 Revenue from external customers 1,677,918 1,563,775 757,170 225,067 1,067,782 18,667 64,134 5,374,512 Gross prot 147,873 125,054 94,442 15,157 181,255 3,555 23,310 590,645 Operating result (EBIT) 79,234 77,672 67,629 -8,305 134,716 19,144 4,307 374,396 Finance income 238 433 220 16 419 645 400 2,371 Finance cost -21,096 -15,057 -22,094 -7,504 -26,510 -4,097 -1,894 -98,253 Share of prot/ loss (-) of equity-accounted investees, net of tax 1,180 -4,069 0 386 318 -344 0 -2,530 Prot/Loss (-) before income tax expense 59,556 58,979 45,754 -15,407 108,943 15,347 2,813 275,984 Income tax expense (-) -10,762 -9,052 -7,788 -451 -20,053 -399 -7,490 -55,996 Net Prot/Loss (-) 48,793 49,927 37,966 -15,859 88,891 14,948 -4,678 219,989 Other information per segment for 2021 is as follows: Steel Real Other Amounts in EUR thousands Aluminium Copper Cables Pipes Steel Estate activities Total Equity accounted investees 8,862 12,072 1,732 11,216 4,808 5,681 0 44,372 Other assets 1,585,081 775,230 775,950 363,552 975,740 547,450 171,046 5,194,049 Segment assets 1,593,943 787,302 777,682 374,768 980,548 553,131 171,046 5,238,420 Segment liabilities 987,696 558,339 658,508 256,574 782,036 257,324 82,348 3,582,826 Capital expenditure 165,634 15,131 34,992 9,551 27,039 12,008 1,671 266,026 Depreciation and amortization -60,607 -16,846 -17,310 -8,938 -25,994 -8,777 -4,303 -142,775 VIOHALCO | ANNUAL REPORT 2021 140 Revenue and operating prot per segment for 2020 were as follows: Steel Real Other Amounts in EUR thousands Aluminium Copper Cables Pipes Steel Estate activities Total Total revenue per segment 1,884,216 1,524,107 1,041,269 343,792 1,146,206 14,421 195,377 6,149,388 Inter-company revenue -716,481 -458,093 -472,654 -38,968 -468,268 -4,379 -140,468 -2,299,311 Revenue from external customers 1,167,735 1,066,014 568,615 304,824 677,939 10,041 54,909 3,850,077 Gross prot 100,469 73,940 81,605 24,695 46,096 2,481 19,757 349,043 Operating result (EBIT) 35,899 32,413 56,929 12,251 826 14,463 540 153,321 Finance income 79 350 213 130 537 5 334 1,648 Finance cost -14,960 -14,493 -21,593 -10,739 -26,225 -3,957 -1,988 -93,955 Share of prot/ loss (-) of equity-accounted investees, net of tax 511 -2,271 0 -67 86 0 0 -1,740 Prot/Loss (-) before income tax expense 21,529 16,000 35,549 1,575 -24,776 10,511 -1,114 59,273 Income tax expense (-) -8,292 -3,622 -8,911 -1,854 428 -1,952 -2,300 -26,502 Net Prot/Loss (-) 13,237 12,378 26,638 -279 -24,348 8,559 -3,414 32,771 Other information per segment for 2020 were as follows: Steel Real Other Amounts in EUR thousands Aluminium Copper Cables Pipes Steel Estate activities Total Equity-accounted investees 8,151 13,258 2,162 9,965 4,554 0 0 38,089 Other assets 1,243,339 631,856 644,355 304,905 809,255 406,090 119,623 4,159,424 Segment assets 1,251,491 645,114 646,516 314,870 813,809 406,090 119,623 4,197,513 Segment liabilities 687,628 482,334 562,558 188,088 692,170 115,816 73,666 2,802,260 Capital expenditure 105,167 20,029 49,442 15,494 16,760 76,288 1,699 284,879 Depreciation and amortization -55,639 -15,464 -16,006 -8,873 -29,414 -5,946 -3,836 -135,178 Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) C. Geographic information Viohalco’s segments are managed on a worldwide basis, but operate manufacturing facilities and sales oces are located primarily in Greece, Germany, United Kingdom, France, Bulgaria, Romania, Serbia, North Macedonia and U.S.A. The geographic information below analyses the consolidated non-current assets by the Company’s country of domicile and other countries. In presenting the geographic information, segment assets were based on the geographic location of the assets. In Europe, assets’ information for Greece and Belgium is reported separately. Property, plant and equipment Balance at 31 December Amounts in EUR thousands 2021 2020 Belgium 1,368 1,374 Greece 1,611,432 1,481,299 Other 476,306 471,423 Total 2,089,107 1,954,096 Intangible assets and goodwill Balance at 31 December Amounts in EUR thousands 2021 2020 Belgium 11 29 Greece 35,029 34,526 Other 7,044 4,990 Total 42,083 39,545 VIOHALCO | ANNUAL REPORT 2021 141 Investment property Balance at 31 December Amounts in EUR thousands 2021 2020 Greece 280,091 269,608 Other 785 805 Total 280,876 270,413 Right of use assets Balance at 31 December Amounts in EUR thousands 2021 2020 Belgium 188 184 Greece 29,968 32,270 Other 4,133 6,044 Total 34,288 38,498 7. Revenue Revenue is derived from contracts with customers and investment property rental income. For the year ended 31 December Amounts in EUR thousands 2021 2020 Rental income from investment property 11,472 10,041 Revenue from contracts with customers 5,363,040 3,840,036 Total 5,374,512 3,850,077 A. Disaggregation of revenue In the following table, revenue from contracts with customers is disaggregated by primary geographical market and timing of revenue recognition. The table includes a reconciliation with the Viohalco's reportable segments (see Note 6). For the year ended 31 December 2021 Steel Real Other Amounts in EUR thousands Aluminium Copper Cables Pipes Steel Estate activities Total Primary geographical markets Greece 136,303 67,146 258,470 18,098 271,705 7,194 21,461 780,377 European Union 1,069,081 985,368 290,276 132,662 591,180 0 20,014 3,088,581 Other European countries 170,422 294,133 112,412 16,685 197,076 0 2,813 793,541 Asia 76,669 91,197 84,657 40,030 3,016 0 18,737 314,305 America 211,308 82,563 8,683 16,792 804 0 429 320,579 Africa 13,892 38,485 2,673 800 4,001 0 39 59,890 Oceania 243 4,883 0 0 0 0 640 5,767 Total 1,677,918 1,563,775 757,170 225,067 1,067,782 7,194 64,134 5,363,040 Timing of revenue recognition Revenue recognised at a point in time 1,677,184 1,560,158 483,591 82,834 1,057,423 1,768 44,980 4,907,938 Products transferred over time 0 0 273,579 142,234 0 0 58 415,871 Services transferred over time 733 3,617 0 0 10,358 5,426 19,096 39,231 Total 1,677,918 1,563,775 757,170 225,067 1,067,782 7,194 64,134 5,363,040 VIOHALCO | ANNUAL REPORT 2021 142 For the year ended 31 December 2020 Steel Real Other Amounts in EUR thousands Aluminium Copper Cables Pipes Steel Estate activities Total Primary geographical markets Greece 96,823 49,858 259,584 15,240 175,495 0 21,748 618,748 European Union 761,195 634,020 205,829 211,177 364,535 0 16,049 2,192,804 Other European countries 107,535 223,322 51,533 21,300 131,248 0 1,721 536,661 Asia 61,979 74,598 48,729 0 621 0 14,507 200,433 America 127,597 50,759 861 49,040 142 0 204 228,603 Africa 12,332 30,107 2,028 8,065 5,898 0 44 58,475 Oceania 274 3,350 51 0 0 0 636 4,311 Total 1,167,735 1,066,014 568,615 304,824 677,939 0 54,909 3,840,036 Timing of revenue recognition Revenue recognised at a point in time 1,166,810 1,061,661 323,657 30,873 671,971 0 36,689 3,291,661 Products transferred over time 0 0 242,198 273,736 0 0 737 516,670 Services transferred over time 925 4,353 2,760 215 5,968 0 17,483 31,704 Total 1,167,735 1,066,014 568,615 304,824 677,939 0 54,909 3,840,036 Viohalco’s consolidated revenue for 2021 amounted to EUR 5,375 million, increased by 40% compared to previous year (2020: 3,850 million), reecting an upturn in demand across almost all segments and the rise in metal prices. Revenue expected to be recognised in the future related to performance obligations that are unsatised (or partially unsatised) at the reporting date amounts to EUR 222 million, from which EUR 196 million is expected to be recognised during 2022 and the remaining EUR 26 million is expected to be recognized during 2023 and onwards. B. Contract balances Contract assets primarily relate to the rights to consideration for work completed but not billed at the reporting date on customized products or energy projects. Contract assets are transferred to receivables when the rights become unconditional. This usually occurs when Viohalco companies issue an invoice to the customer (unless the invoice is issued in advance). Contract liabilities primarily relate to the advance consideration received from customers for construction of customized products or energy projects for which revenue is recognized over time. Contract assets mainly relate to cables and steel pipes segments, where amounts are billed as work progresses in accordance with agreed-upon contractual terms, either upon achievement of contractual milestones, or at the nal delivery and acceptance of the products. The following table provides information about contract assets and contract liabilities. As at Amounts in EUR thousands 31 December 2021 31 December 2020 Contract assets 101,371 68,517 Contract liabilities -61,371 -54,021 Total 40,000 14,496 VIOHALCO | ANNUAL REPORT 2021 143 The movement in the contract assets and the contract liabilities balances during the period is described in the following table: Amounts in EUR thousands Contract assets Contract liabilities Balance at 1 January 2021 68,517 54,021 Increases due to unbilled receivables and changes in measure of progress 91,311 0 Revenue recognised relating to downpayments and deferred income balances as at the beginning of the period 0 -32,480 Transfers from contract assets recognised at the beginning of the period to receivables -58,283 0 New downpayments and deferred income outstanding at year end 0 39,934 Impairment allowance -175 0 Reversal of impairment allowance 0 0 Other movements 0 -96 Foreign exchange dierences 0 -9 Balance at 31 December 2021 101,371 61,371 Amounts in EUR thousands Contract assets Contract liabilities Balance at 1 January 2020 121,186 68,526 Increases due to unbilled receivables and changes in measure of progress 58,060 0 Revenue recognised relating to downpayments and deferred income balances as at the beginning of the period 0 -67,438 Transfers from contract assets recognised at the beginning of the period to receivables -110,667 0 New downpayments and deferred income outstanding at year end 0 53,009 Impairment allowance -48 0 Reversal of impairment allowance 21 0 Loss of Control/Disposal of subsidiary 0 -4 Foreign exchange dierences -35 -72 Balance at 31 December 2020 68,517 54,021 Contract assets increased by EUR 32.9 million compared to 31 December 2020 mainly due to the growth in project-related activities of cables segment and the timing of invoicing of specic ongoing projects for which the production started in the fourth quarter of the year in steel pipes segment. Contract liabilities, primarily, relate to the advance consideration received from customers. Contract liabilities which are expected to be settled within more than one year are classied as non-current liabilities (EUR 9,889 thousand as of 31 December 2021). C. Contract costs Viohalco companies’ recognized contracts costs, expect that fees, commissions and other costs associated with obtaining contracts for energy projects are recoverable. Therefore, as at 31 December 2021, Viohalco has recorded as contract costs an amount of EUR 0.4 million, out of which an amount of EUR 0.2 million is classied as non-current assets. During the year, amortization of contract costs was equal to EUR 0.2 million. D. Signicant judgements in revenue recognition In recognizing revenue, Viohalco companies make judgements regarding the timing of satisfaction of performance obligations, the identication of distinct performance obligations, as well as the transaction price and the amounts allocated to performance obligations. The most signicant of these estimates are described below: - Contracts including multiple performance obligations are mainly identied in cables segment for turnkey projects and for customized products in cables, steel pipes and aluminium segments, as described in Note 5.3. In such cases the total transaction price is allocated to these performance obligations on the basis of the relative standalone selling prices of the promised goods and services. If these goods and services are not sold separately, a cost plus margin approach is used to estimate the standalone selling price. - Some contracts with customers involve a variable transaction cost as they include a volume or trade discount based on the total sales to the customer within a time period. In such case revenue is recognized based on the anticipated sales to the customer throughout the year, as these sales are realized and new orders are received and up to an extent it is highly probable that a signicant reversal of cumulative revenue recognized will not be needed. - A signicant portion of contracts with customers, include transportation service. Transportation is considered as a separate performance obligation, if the customer can benet from the oered transportation service and the promise to transport the goods to the customer is separately identiable from the production of these customized products. Revenue for orders of standardized products is recognized at a specic point in time and transportation is not considered a separate performance obligation. VIOHALCO | ANNUAL REPORT 2021 144 8. Other income and expenses A. Other Income For the year ended 31 December Amounts in EUR thousands Note 2021 2020 Government grants/subsidies 5,650 2,212 Amortization of grants received 28 2,886 3,158 Rental income 647 774 Foreign exchange gains 0 50 Income from fees, commissions and costs recharged 1,357 2,047 Damage compensation 834 653 Gain on sale of PP&E and intangible assets 451 1,733 Gain on sale of investment property 476 0 Income from consulting services 0 451 Reversal of provisions 29 142 1,192 Reversal of impairment loss of PP&E and investment property 27,280 26,410 Gains from business combination 0 1,623 Income from valuation of options 0 936 Other 3,699 3,000 Total other income 43,422 44,240 B. Other Expenses For the year ended 31 December Amounts in EUR thousands Note 2021 2020 Impairment loss of PP&E and investment property 11,705 13,025 Write-o of PP&E and intangible assets 1,927 2,634 Loss on sale of PP&E 622 5 Loss on sale of investment property 0 143 Foreign exchange losses 0 309 Damages incurred 355 317 Other taxes 0 610 Employee benets 12 358 1,205 Provisions on antidumping duties 12,842 0 Penalties 413 251 Depreciation and amortization 2,087 6,491 Loss from business combinations 21 0 Other provisions 149 0 Other 3,523 4,546 Total other expense 34,003 29,536 Net other income/ expense (-) 9,419 14,704 Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) Net other income/expenses for the year ended 31 December 2021 amounted to a gain of EUR 9.4 million compared to gain of EUR 14.7 million during 2020. This variation is mainly attributed to the following reasons: - During 2022, the US Department of Commerce (DoC) published its nal results in the administrative proceedings conducted by the DoC for the period from April 19, 2019 through April 30, 2020 (“POR”) in connection with an antidumping (“AD”) order on large diameter welded pipe (LDWP) from Greece. As a result, the DoC determined for the POR an antidumping duty rate of 41.04% based on total adverse facts available (AFA) for mandatory respondent Corinth Pipeworks S.A., Viohalco subsidiary operates in the steel pipes segment. Corinth Pipeworks intends to le an appeal before the U.S. Court of International Trade against the decision of the DoC while continuing to actively work with the DoC in order to reverse the nal determination. The one-o charge related to the abovementioned case amounts to EUR 12.8 million (USD 14 million plus interest) and is included in ‘Provisions on antidumping duties’ line, as it relates to sales performed in previous years. - During 2021, a reversal of impairment loss recognized in previous years of own used property and investment property amounting to EUR 15.7 million- on net basis - took place, due to increase in the fair value of real estate portfolio. Impairment loss and reversal of impairment loss are described in notes 17 and 19. - During 2021, Viohalco subsidiaries received Covid-relief grants amounted to EUR 4.4 million. VIOHALCO | ANNUAL REPORT 2021 145 C. Expenses by nature For the year ended 31 December Amounts in EUR thousands Note 2021 2020 Cost of inventories recognized as an expense 3,812,652 2,620,977 Employee benets 12 368,796 335,353 Energy 178,289 108,799 Depreciation and amortisation 140,688 128,686 Amortization of contract costs 156 342 Taxes and duties 19,097 14,975 Insurance expenses 25,559 28,808 Rental fees 5,303 5,449 Transportation costs (goods and materials) 147,833 122,556 Promotion and advertising 4,879 3,969 Third party fees and benets 186,804 229,565 Other provisions 155 608 Gains (-)/losses from derivatives 10,843 16,498 Storage and packing 11,224 8,960 Commissions 13,820 11,281 Foreign exchange gains (-)/losses 451 3,186 Maintenance expenses 50,394 46,911 Royalties 2,371 1,814 Consumption of production tools 12,824 8,610 Other expenses 14,701 12,615 Total 5,006,838 3,709,963 Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) The key drivers of variation of operating expenses during 2021 are the following: - The increase in sales volumes and metal prices during 2021, aected cost of sales and related operating expenses which have increased proportionally. - The increase in “Energy” and “Transportation” expenses reects to the global increase in energy cost that began within 2021. - The decrease in “Τhird party fees and benets” is attributed mainly to fees paid to subcontractors for coating services in the context of steel pipes projects and for installation services in the context of turnkey contracts executed and completed during 2020 by subsidiaries in the cables segment. The aggregate amount of research and development expenditure recognized as an expense during 2021 amounts to EUR 13.3 million (2020: EUR 12.6 million). 9. Net nance cost For the year ended 31 December Amounts in EUR thousands 2021 2020 Income Interest income 557 842 Foreign exchange gains 950 661 Dividend income 220 146 Gain from derivatives 644 0 Finance income 2,371 1,648 Expense Interest expense and related charges 94,574 89,143 Interest on leases 2,076 2,374 Foreign exchange losses 1,604 1,368 Losses from derivatives 0 853 Other nance expense 0 217 Finance cost 98,253 93,955 Net nance income/cost (-) -95,882 -92,307 The increase of nance cost due to new loans facilities has been partially mitigated by the credit spread reductions that have been agreed gradually in all short and long term facilities across Viohalco companies during last years. As a result, interest expense and related charges have been increased by EUR 5.4 million. VIOHALCO | ANNUAL REPORT 2021 146 10. Earnings per share Considering that there are neither share options, nor convertible bonds, basic and diluted earnings per share are identical and have been based on the following prot attributable to the ordinary shareholders and weighted-average numbers of ordinary shares outstanding. A. Prot/loss (-) attributable to ordinary shareholders For the year ended 31 December Amounts in EUR thousands 2021 2020 Prot/loss (-) attributable to the owners of the Company 194,994 21,377 B. Weighted-average number of ordinary shares outstanding In thousands of shares 2021 2020 Issued ordinary shares at 1 January 259,190 259,190 Eect of shares issued related to the mergers 0 0 Weighted average number of ordinary shares at 31 December 259,190 259,190 The number of equity shares in 2021 remains equal to 2020, as no shares were issued during the year. C. Earnings per share The basic and diluted earnings per share are as follows: Earnings per share (in EUR per share) 2021 2020 Basic and diluted 0.7523 0.0825 11. Employee benets Amounts in EUR thousands Note 2021 2020 Net dened benet liability 24,183 21,913 Liability for social security contributions 27 12,465 11,033 Total employee benet liabilities 36,648 32,946 Non-current 24,183 21,913 Current 12,465 11,033 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) For details on the related employee benet expenses, see Note 12. A. Post-employment plans The following post-employment plans exist: Dened contribution plans All employees of Viohalco companies are insured for their main pension by the respective social insurance organizations as required by the local legislation. Once the contributions have been paid, Viohalco companies have 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 employee benet expenses. Dened benet plans The employees of Viohalco’s companies in some countries, mainly in Greece and Bulgaria, are entitled to receive a lump sum when they retire. This lump sum is determined in accordance with the years of service and the salary at the retirement date. This obligation meets the denition of dened benet plans and charges the accumulated benets through prot or loss in each period with a corresponding increase of the retirement liability. VIOHALCO | ANNUAL REPORT 2021 147 Benets paid to pensioners during each period are charged against this liability. Viohalco’s companies’ liability for personnel benets as of 31 December 2021 and 2020 is EUR 24,183 thousand and EUR 21,913 thousand respectively. These plans are unfunded. Eect of change in accounting policy The IFRS Interpretations Committee (IFRIC) issued in May 2021 the nal Decision on the agenda entitled "Attributing Benets to Periods of Service in accordance with International Accounting Standard (IAS) 19", which includes guidance on how to distribute benets in periods of service on a specic programme of dened benets. Based on the above Decision, the way in which the basic principles of IAS 19 were generally applied in Greece in the past changed and consequently entities preparing nancial statements in accordance with IFRS are required to amend their accounting policies accordingly. For further details, see note 5.23. Comparative information included in the tables below have been restated to reect the change in accounting policy. B. Movement in net dened benet liability The following table shows the reconciliation from the opening balance to the closing balances for net dened benet liability and its components. Amounts in EUR thousands 2021 2020 Balance at 1 January 21,913 37,362 Change in accounting policy 0 -16,961 Restated balance at 1 January 21,913 20,401 Included in prot or loss Current service cost 2,118 2,025 Past service cost 230 -4 Termination loss 5,152 4,859 Interest cost/income (-) 58 136 7,558 7,015 Included in OCI Remeasurement loss/gain (-) Actuarial loss/gain (-) arising from: - Demographic assumptions -46 228 - Financial assumptions 764 700 - Experience adjustments 345 129 1,063 1,057 Other Benets paid -6,344 -6,498 Loss of Control/Disposal of subsidiary 0 -57 Foreign exchange dierences -6 -5 -6,350 -6,560 Balance at 31 December 24,183 21,913 During the nancial year 2021, Viohalco and its companies paid EUR 6.3 million (2020: EUR 6.5 million) in benets in respect of employees who left during the year. An additional cost that arose due to these payments was recognized (termination loss of EUR 5.2 million – 2020: EUR 4.9 million). More specically, in the cases of dismissal, voluntary withdrawals with benet payment and retirement, the additional cost is the dierence between the benet paid and the amount recorded in the dened benet liability for the respective employees. C. Dened benet obligation (a) Actuarial assumptions The following were the weighted average principal actuarial assumptions at the reporting date: 2021 2020 Discount rate 0.31% 0.29% Price ination 2.06% 1.22% Future salary growth 2.66% 1.82% Plan duration (in years) 6 8 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) Assumptions regarding future mortality have been based on Swiss mortality table EVK2000. VIOHALCO | ANNUAL REPORT 2021 148 (b) Sensitivity analysis The sensitivity analysis for each signicant actuarial assumption which was reasonably possible, at the end of the reporting period, shows how the dened benet obligation (DBO) would have been aected by those changes as follows: 2021 2020 Sensitivity 1 (discount rate plus 0.5%) - % Dierence in DBO -2.95% -3.37% Sensitivity 2 (discount rate minus 0.5%) - % Dierence in DBO 3.14% 3.58% Sensitivity 3 (salary growth rate plus 0.5%) - % Dierence in DBO 2.84% 3.36% Sensitivity 4 (salary growth rate minus 0.5%) - % Dierence in DBO -2.70% -3.15% The above sensitivity analysis is based on a change in one assumption while all other assumptions remain constant. In practice, this is unlikely to occur, and changes in some of the assumptions may be correlated. When calculating the sensitivity of the dened benet obligation to signicant actuarial assumptions the same method (present value of the dened benet obligation calculated with the projected unit credit method at the end of the reporting period) has been applied as when calculating the pension liability recognized on the statement of nancial position. The methods and the formula of the assumptions used for the dened analysis have not changed compared to the previous year. The expected maturity analysis of undiscounted pension benets is as follows: Amounts in EUR thousands 2021 2020 Less than a year 5,654 4,210 Between 1 and 2 years 1,432 1,411 Between 2 and 5 years 5,574 4,139 Over 5 years 13,195 15,410 Total 25,855 25,170 12. Employee benet expenses Amounts in EUR thousands Note 2021 2020 Wages and salaries 283,576 257,577 Social security contributions 53,920 53,854 Dened contribution plans 1,152 1,214 Dened benet plans 11 7,558 7,015 Other employee benets 25,286 19,127 Total 371,492 338,787 Employee benets have been allocated as follows: Cost of goods sold 8 258,985 235,571 Selling and distribution expenses 8 47,935 43,741 Administrative expenses 8 61,875 56,041 Other expenses 8 358 1,205 Capitalised employee benets in projects under construction 2,338 2,229 Total 371,492 338,787 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) VIOHALCO | ANNUAL REPORT 2021 149 The number of employees, as well as their prole and gender, employed by Viohalco companies is presented in the following tables: 2021 18 - 30 30-50 51+ Total Male 986 4,715 2,518 8,219 Female 227 965 371 1,563 Number of Employees 1,213 5,680 2,889 9,782 Oce employees & professionals Workers Management Total Number of Employees 2,689 6,187 906 9,782 2020 18 - 30 30-50 51+ Total Male 895 4,711 2,321 7,927 Female 213 957 305 1,475 Total 1,108 5,668 2,626 9,402 Oce employees & professionals Workers Management Total Number of Employees 2,782 5,696 924 9,402 13. Income tax expense A. Amounts recognised in prot or loss Amounts in EUR thousands 2021 2020 Current tax -46,550 -21,566 Deferred tax -9,446 -4,936 Income tax expense (-) -55,996 -26,502 Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) B. Amounts recognised in OCI 2021 Amounts in EUR thousands Before tax Related tax Net of tax Amounts recognized in the OCI Remeasurements of dened benet liability -1,063 239 -823 Equity investments in FVOCI - net change in fair value 702 -17 684 Foreign currency translation dierences 7,731 0 7,731 Gain / Loss (-) of changes in fair value of cash ow hedging - eective portion 4,839 -462 4,377 Gain / Loss (-) of changes in fair value of cash ow hedging - reclassied to prot or loss -1,713 15 -1,699 Total 10,495 -225 10,270 VIOHALCO | ANNUAL REPORT 2021 150 2020 Amounts in EUR thousands Before tax Related tax Net of tax Amounts recognized in the OCI Remeasurements of dened benet liability -1,057 174 -882 Equity investments in FVOCI - net change in fair value -518 1 -517 Foreign currency translation dierences -11,155 0 -11,155 Gain / Loss (-) of changes in fair value of cash ow hedging - eective portion 2,174 -181 1,993 Gain / Loss (-) of changes in fair value of cash ow hedging - reclassied to prot or loss 1,857 -442 1,415 Total -8,699 -448 -9,147 C. Reconciliation of eective tax rate Amounts in EUR thousands 2021 2020 Prot/loss (-) before income tax expense 275,984 59,273 Statutory income tax expense rate in Greece -60,717 -14,226 Non-deductible expenses for tax purposes -9,936 -10,214 Tax-exempt income 4,770 5,398 Tax incentives 769 0 Recognition of previously unrecognised tax losses, thin capitalization allowance or temporary dierences of a prior period 2,012 382 Eect of tax rates in foreign jurisdictions 8,738 -1,198 Current-year losses for which no deferred tax asset is recognised -1,681 -2,507 Tax-exempt reserves recognition 660 0 Withholding tax on international dividends -57 -61 Change in tax rate or composition of new tax 5,035 -548 Derecognition of previously recognised deferred tax assets -4,874 -2,237 Prior year income tax adjustments -714 -1,294 Income tax expense reported in the statement of prot or loss (-) at the eective tax rate -55,996 -26,502 * Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) According to the Greek law N. 4646/2019, the corporate income tax rate for legal entities in Greece for the scal year 2021 and onwards is set at 22%. The consolidated eective tax rate for 2021 was 20% (2020: 45%). The eective income tax rate was inuenced by the recalculation of deferred taxation due to the change in tax rate in Greece and the fact that certain loss-making subsidiaries did not recognize deferred tax on current year’s tax losses, while the current assessment regarding the recoverability of available tax losses to oset future taxable income in steel pipes segment led to the derecognition of deferred tax asset on previously recognised tax losses. VIOHALCO | ANNUAL REPORT 2021 151 D. Movement in deferred tax balances 2021 Net balance at 31 December Change in tax Change rate in tax Net Recognised Recognised Foreign recognised recognised Deferred Deferred balance at in prot in exchange in prot in tax tax Amounts in EUR thousands 1 January or loss OCI dierences or loss OCI Other Net assets liabilities Property, plant & equipment -109,294 -5,500 0 -404 6,832 0 0 -108,365 281 -108,646 Right of use asset 97 -27 0 0 -65 0 0 5 424 -419 Intangible assets 1,159 -1,628 0 0 115 0 0 -354 1,820 -2,174 Investment property -606 -2,189 0 0 196 0 0 -2,598 89 -2,688 Other investments 875 607 -4 0 7 -13 0 1,471 1,550 -79 Derivatives -1,074 377 -390 -19 -70 -58 0 -1,233 462 -1,695 Inventories -350 176 0 0 116 0 0 -58 192 -249 Loans and borrowings -1,564 308 0 0 139 0 0 -1,117 216 -1,333 Employee benets 4,284 -181 45 -1 -327 195 0 4,014 4,126 -111 Provisions / Accruals 4,016 2,724 0 -4 -268 0 0 6,468 6,468 0 Contract with customers -12,625 -40 0 -10 918 0 0 -11,757 1,335 -13,092 Contract liabilities -9 0 0 0 1 0 0 -9 0 -9 Other items 4,269 -992 0 -3 -183 0 7 3,099 4,274 -1,175 Thin capitalisation 30,499 -3,879 0 -2 -2,389 0 0 24,229 24,229 0 Tax losses carried forward 6,272 -4,236 0 36 12 0 0 2,083 2,085 -2 Tax assets/liabilities (-) before set-o -74,051 -14,481 -349 -406 5,035 123 7 -84,122 47,552 -131,673 Set-o tax -34,410 34,410 Net tax assets/liabilities (-) -84,122 13,141 -97,263 2020 Net balance at 31 December Loss Change of in tax Control/ rate Net Recognised Recognised Foreign Disposal recognised Change in Deferred Deferred balance at in prot in exchange of in prot accounting tax tax Amounts in EUR thousands 1 January or loss OCI dierences subsidiary or loss policy Other Net assets liabilities Property, plant & equipment -107,111 -1,861 0 257 -69 -516 0 7 -109,294 2,207 -111,501 Right of use asset -699 802 0 0 -6 0 0 0 97 459 -362 Intangible assets 1,514 -357 0 0 2 0 0 0 1,159 3,508 -2,349 Investment property -615 11 -2 0 0 0 0 0 -606 1,859 -2,464 Other investments 850 25 1 0 0 0 0 0 875 961 -86 Derivatives -64 -365 -623 11 0 -32 0 0 -1,074 534 -1,608 Inventories 547 -897 0 0 0 0 0 0 -350 866 -1,216 Loans and borrowings -1,894 330 0 0 0 0 0 0 -1,564 461 -2,026 Employee benets 8,037 82 176 -11 0 0 -3,999 0 4,284 6,813 -2,529 Provisions / Accruals 3,489 527 0 0 0 0 0 0 4,016 4,041 -25 Contract with customers -7,617 -5,007 0 -1 0 0 0 0 -12,625 23 -12,648 Contract liabilities -9 0 0 0 0 0 0 0 -9 0 -9 Other items 2,032 2,387 0 -114 -20 0 -58 41 4,269 5,356 -1,087 Thin capitalisation 26,799 3,704 0 -4 0 0 0 0 30,499 30,499 0 Tax losses carried forward 10,044 -3,770 0 -3 0 0 0 0 6,272 6,273 -1 Tax assets/liabilities (-) before set-o -64,699 -4,389 -448 135 -93 -548 -4,057 48 -74,051 63,860 -137,912 Set-o tax -46,654 46,654 Net tax assets/liabilities (-) -74,051 17,206 -91,258 Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) VIOHALCO | ANNUAL REPORT 2021 152 Deferred tax assets relating to tax losses carried forward are recognised only if it is probable that they can be oset against future taxable prots. At each balance sheet date, Viohalco and its subsidiaries assess whether the realization of future tax benets is suciently probable based on approved business plans. On 31 December 2021, the accumulated tax losses carried forward available for future use amounted to EUR 80 million (31 December 2020 EUR 88 million). Viohalco companies have recognised cumulatively a deferred tax asset of EUR 2 million (31 December 2020: EUR 6 million) on tax losses because management considered it probable that future taxable prots would be available against which such losses can be used. EUR 0.4 million relate to Viohalco subsidiaries located in Greece and the rest EUR 1.6 million to subsidiaries in other jurisdictions. This deferred tax asset corresponds to losses equal to EUR 9 million (31 December 2020: EUR 27 million). Based on these estimates regarding future taxable prots, deferred tax assets have not been recognised in respect of tax losses carried forward for an amount of EUR 70 million (EUR 61 million in 2020). Out of these, tax losses equal to EUR 7 million expire in 2022 and 2023, while the rest expire between 2024 and 2026. According to the provisions of articles 49 and 72 of the Greek Law 4172/2013 concerning thin capitalization, net interest expense is deductible from current year’s tax prots, if it is equal or less than 30% of EBITDA and any excess can be settled with future tax prots without time limitations. Based on the current approved business plans, the balance of the respective tax asset was equal to EUR 24.2 million, as at 31 December 2021 (31 December 2020: EUR 30.5 million). 14. Inventories Amounts in EUR thousands 2021 2020 Merchandise 40,633 27,434 Finished goods 431,583 314,132 Semi-nished goods 282,538 198,326 By-products & scrap 83,955 64,183 Work in progress 34,684 20,991 Raw and auxiliary materials, consumables and packaging materials 596,448 449,523 Total 1,469,840 1,074,589 The amount of inventories recognised as expense during 2021 and included in ’Cost of sales‘ was EUR 3.8 billion (2020: EUR 2.6 billion). Inventories with a carrying amount of EUR 177 million are pledged as security for borrowings received by Viohalco’s companies (See Note 26). 15. Trade and other receivables Amounts in EUR thousands Note 2021 2020 Current Assets Trade receivables 474,345 324,318 Less: Impairment losses -53,964 -57,551 Net trade receivables 420,381 266,767 Advance payments 16,478 7,567 Cheques and notes receivables & cheques overdue 40,967 32,216 Receivables from related parties 38 41,570 40,216 VAT and other tax receivables 62,298 59,663 Receivables from dividends of equity-accounting investees 38 334 334 Other debtors 54,856 54,838 Less: Impairment losses -13,348 -14,141 Net other receivables 203,155 180,692 Total current assets 623,536 447,459 Non-current assets Non-current receivables from related parties 38 5,746 3,975 Other non-current receivables 1,568 6,374 Total non current assets 7,314 10,349 Total receivables 630,850 457,809 Viohalco and its companies have not concentrated their credit risk in relation to receivables from customers, since they have a wide range and a large number of customers. VIOHALCO | ANNUAL REPORT 2021 153 A. Transfer of trade receivables The carrying amount of receivables includes amounts that are subject to factoring arrangements. Viohalco and its subsidiaries, enter into factoring agreements (with recourse) to sell trade receivables for cash proceeds. These trade receivables are not being derecognised from the statement of nancial position, because substantially all the risks and rewards are still retained by Viohalco - primarily credit risk. The amount received on transfer by the factor is recognised as a secured bank loan. The following table presents the carrying amount of trade receivables at the year-end that have been transferred, but have not been derecognised and the associated liabilities. Amounts in EUR thousands 2021 2020 Carrying amount of trade receivables transferred to banks 44,219 81,453 Carrying amount of associated liabilities 27,257 41,463 The fair value of trade receivables transferred approximates their carrying amount. As at 31 December 2021 and 2020, Viohalco companies had not used the total amount of credit line provided by the factoring companies. Related loans are included in the line ’Secured bank loans‘ in Note 26 ’Loans and Borrowings’. B. Credit and market risks and impairment losses During 2010, the subsidiary Corinth Pipeworks SA initiated in Greece and Dubai legal actions against a former customer in the Middle-East regarding the recovery of an overdue receivable of USD 24.8 million (EUR 22 million at 31 December 2021), plus legal interest. Following a series of court proceedings, the Dubai Court of Cassation issued its nal judgment, during 2017, and ruled to reject any counterclaim of the former customer and to conrm the amount due to Corinth Pipeworks. In order to recover this long overdue balance, Corinth Pipeworks has initiated the enforcement procedures against the assets of the former customer that are located within any of the countries, where the Court of Cassation judgment issued against the former customer is enforceable (i.e. UAE and various other countries in the Middle East). There were no other substantial developments during 2021. Corinth Pipeworks had recorded in the past an impairment loss for the whole outstanding amount, i.e. USD 24.8 million. However, the subsidiary will continue any and all actions required to collect the full amount of that receivable. Information about Viohalco companies’ exposure to credit and market risks, and impairment losses for trade and other receivables is included in Note 30. 16. Cash and cash equivalents Amounts in EUR thousands 2021 2020 Cash in hand and at banks 6,848 1,067 Short-term bank deposits 496,419 218,094 Total 503,267 219,161 Short term deposits have duration of less than 90 days and are available for use. In addition, cash and cash equivalents as at 31.12.2021 includes cash obtained from the issuance of EUR 120 million “Green bond” on 06.12.2021 in real estate segment, that will be used for the repayment of loan facilities related to environmentally certied properties and the nancing of new “Green investments”. VIOHALCO | ANNUAL REPORT 2021 154 17. Property, plant and equipment A. Reconciliation of carrying amount Machinery Furniture Land, plants & & transportation & other PP&E under Amounts in EUR thousands other buildings equipment equipment construction Total Cost Balance as at 1 January 2021 1,007,315 2,793,597 76,081 154,824 4,031,817 Eect of movement in exchange rates 1,129 10,230 -25 330 11,663 Additions 31,301 26,990 4,129 186,746 249,167 Disposals -2,710 -3,732 -188 -475 -7,105 Transfer to /from investment property -210 0 0 0 -210 Reclassications 29,420 94,977 1,237 -126,597 -962 Write os -267 -4,535 -1,836 -66 -6,705 Balance as at 31 December 2021 1,065,978 2,917,527 79,398 214,763 4,277,666 Accumulated depreciation & impairment losses Balance as at 1 January 2021 -378,847 -1,631,552 -62,340 -4,983 -2,077,721 Eect of movement in exchange rates -374 -6,543 13 0 -6,905 Depreciation -22,990 -92,682 -5,015 0 -120,686 Disposals 1,582 2,633 137 0 4,352 Write os 267 2,706 1,804 0 4,777 Reversal of previously recognized impairment loss 11,226 258 0 0 11,484 Impairment loss -2,087 -664 -2 0 -2,753 Reclassications 1 -1,085 -23 0 -1,107 Balance as at 31 December 2021 -391,222 -1,726,929 -65,426 -4,983 -2,188,560 Carrying amount as at 31 December 2021 674,756 1,190,598 13,971 209,781 2,089,107 Machinery Furniture Land, plants & & transportation & other PP&E under Amounts in EUR thousands other buildings equipment equipment construction Total Cost Balance as at 1 January 2020 949,993 2,610,463 72,400 224,846 3,857,702 Eect of movement in exchange rates -1,610 -9,703 -80 -147 -11,540 Additions 4,867 20,927 3,979 173,707 203,478 Disposals -236 -6,701 -214 -4,176 -11,328 Mergers and absorptions 2 0 29 0 30 Reclassications 54,922 189,176 1,325 -238,065 7,357 Write os -227 -8,271 -940 -558 -9,996 Loss of control / Disposal of subsidiary -395 -2,292 -418 -781 -3,887 Balance as at 31 December 2020 1,007,315 2,793,597 76,081 154,824 4,031,817 Accumulated depreciation & impairment losses Balance as at 1 January 2020 -350,926 -1,564,060 -59,385 -5,110 -1,979,481 Eect of movement in exchange rates 709 5,889 56 0 6,654 Depreciation -22,063 -89,652 -4,479 0 -116,194 Disposals 278 6,061 153 0 6,492 Mergers and absorptions 0 0 -29 0 -29 Write os 179 6,188 938 127 7,431 Reversal of previously recognized impairment loss 9,821 164 0 0 9,985 Impairment loss -1,299 0 0 0 -1,299 Reclassications -15,662 2,206 33 0 -13,422 Loss of control / Disposal of subsidiary 116 1,651 373 0 2,141 Balance as at 31 December 2020 -378,847 -1,631,552 -62,340 -4,983 -2,077,721 Carrying amount as at 31 December 2020 628,468 1,162,046 13,741 149,842 1,954,096 The net amount of EUR 2.1 million in ‘Reclassications’ movement mainly concerns assets under construction reclassied to intangible assets and reclassications from right of use assets. VIOHALCO | ANNUAL REPORT 2021 155 B. Security Property, plant & equipment with a carrying amount of EUR 1,006 million are mortgaged as security for borrowings received by Viohalco’s companies (see Note 26). C. Property, plant and equipment under construction The most important additions in property, plant and equipment under construction as of 31 December 2021 concern the following: • the six-high cold rolling mill and the new lacquering line installation in Oinofyta aluminium rolling plant; • the new lacquering machine in Oinofyta aluminium rolling plant of ElvalHalcor, • the construction of new lacquering machine of Symetal; • machinery upgrades in Bridgnorth aluminium plant; • the revamping of press in ElvalHalcor’s copper tube plant; • the upgrade of press and the installation of a new billet pre-heating furnace at copper alloys extrusion division of ElvalHalcor; • the installation of four new bell-shaped annealing bases and slitting line at Soa Med’s plant in Bulgaria; • the ongoing investments in the cables plant in Corinth; • certain productivity and capacity improvement investments in Thisvi’s plant of steel pipes segment; • steel segment’s additions like the meltshop lters installation, aiming to decrease the emissions and optimize the operation of the lters system along with other operational investments related to plants’ machinery upgrade. They also include the revamping of the New Rolling Mill facility for the production of the whole range of Special Bar Quality products in Bulgaria. Capitalized borrowing costs related to property, plant and equipment under construction amount to EUR 0.9 million (2020: EUR 4 million), which have been calculated using an average capitalization rate of 3.7% (2020: 2.4%). Additions in assets under construction also include capitalized employee benets equal to EUR 2,338 thousand (2020: EUR 2,229 thousand). D. Transfer to and from investment property During 2021, Property plant and plant and equipment amounting of EUR 0.2 million were transferred to investment property. E. Impairment loss of property, plant and equipment On 31 December 2021, an impairment test was performed for each Cash Generating Unit (further CGU) for which indications of impairment loss existed as at 31 December 2021 concerning subsidiaries from steel segment. The identied indications of impairment concerned the losses incurred by certain CGUs over the last years. For the calculation of recoverable amount per CGU, cash ow projections based on a period of ve years were used. The results of this test concluded that the property, plant and equipment used by these CGUs were not impaired at 31 December 2021, since the recoverable amount of each CGU exceeded the respective carrying amount. In addition, impairment losses of EUR 2.7 million where recognised mainly in the aluminium segment for specic xed assets that indications of impairment were existed. The recoverable amount of related real estate assets amounted EUR 1.7 million. During 2021, machinery equipment with NBV equal to EUR 1.9 million (2020: EUR 2.1 million) were written o since they are no longer used by Viohalco companies and they are not expected to bring economic benets in the future since these assets became obsolete. In addition, impairment tests were performed on real estate assets where indications of impairment exist, either owner occupied or held as investment property. The tests were carried out in order to address the risk of negative changes in the fair value of properties and respond if necessary. Valuation techniques and the results relating to investment properties are outlined in note 19. F. Reversal of impairment loss of property, plant and equipment A test has also been performed for CGUs, for which indications for reversal of previously recorded impairment loss existed at 31 December 2021. These indications concerned the improvement of expected performance of certain CGUs over the following years. However, the result of the test was that no impairment loss should be reversed in 2021. In addition, previously recognized impairment losses of EUR 11.5 million were reversed (recoverable amount EUR 54.6 million) and included in the line “Other Income” of the consolidated statement of profit or loss, related to Investment property that has been transferred to PP&E in the previous years. For segmental classication purposes, reversal of impairment losses reported in real estate segment. G. Derecognition due to disposal of subsidiary Assets amounting to EUR 1.7 million have been derecognized in 2020 due to the absorption of subsidiary Vianatt by Ecoreset S.A. H. Change in estimates During 2021, Viohalco subsidiary ElvalHalcor conducted an operational eciency review on its plants, which resulted in changes in the expected useful life of specic buildings and machinery which are contributing in the production process of the aluminium division of the company. VIOHALCO | ANNUAL REPORT 2021 156 The factors taken into account for this operational review were the following: - development and implementation of the investment programme of the company; - the continued maintenance and development operations; and - the future economic benets that will be occurred from the cash inows of the current equipment. As a result: - the expected useful life of buildings was extended by 5 years on average and - the useful life of machinery was extended by 3 years on average. Upon the application of the changes described above, the ranges of useful lives as described in the relative accounting policy remained unaected. The eect of these changes on annual depreciation expense, included in ‘Cost of sales’, was EUR 1.1 million for 2021. 18. Goodwill and intangible assets A. Reconciliation of carrying amount Development Trademarks Amounts in EUR thousands Goodwill costs and licenses Software Other Total Cost Balance as at 1 January 2021 1,500 2,097 34,400 49,000 2,818 89,814 Eect of movement in exchange rates 0 -1 0 -95 -5 -101 Additions 0 0 1,581 4,289 102 5,972 Disposals 0 0 -1 -10 0 -11 Write-os 0 0 -3 -183 0 -186 Reclassications 0 -779 1,645 2,216 0 3,082 Balance as at 31 December 2021 1,500 1,317 37,622 55,216 2,915 98,570 Accumulated amortization and impairment loss Balance as at 1 January 2021 -1,500 -1,097 -9,612 -37,200 -860 -50,269 Eect of movement in exchange rates 0 1 0 68 2 70 Amortization for the period 0 -137 -2,215 -4,269 -53 -6,673 Disposals 0 0 1 10 0 11 Write-os 0 0 3 183 0 186 Impairment loss 0 0 0 -79 0 -79 Reclassications 0 608 0 -341 0 267 Balance as at 31 December 2021 -1,500 -626 -11,823 -41,626 -912 -56,487 Carrying amount as at 31 December 2021 0 691 25,799 13,589 2,004 42,083 VIOHALCO | ANNUAL REPORT 2021 157 Development Trademarks Amounts in EUR thousands Goodwill costs and licenses Software Other Total Cost Balance as at 1 January 2020 3,132 2,024 29,282 43,163 2,747 80,348 Eect of movement in exchange rates 0 -1 -1 -84 -8 -94 Additions 0 23 1,316 4,840 111 6,290 Disposals 0 0 0 -13 0 -13 Write-os 0 0 0 -192 0 -192 Mergers and absorptions 0 0 0 6 0 6 Loss of Control/Disposal of subsidiary -1,632 0 0 -82 0 -1,714 Reclassications 0 51 3,803 1,362 -32 5,183 Balance as at 31 December 2020 1,500 2,097 34,400 49,000 2,818 89,814 Accumulated amortization and impairment loss Balance as at 1 January 2020 -1,500 -812 -7,484 -33,489 -837 -44,122 Eect of movement in exchange rates 0 1 1 47 7 55 Amortization for the period 0 -285 -1,985 -4,045 -61 -6,376 Disposals 0 0 0 3 0 3 Write-os 0 0 0 123 0 123 Mergers and absorptions 0 0 0 -6 0 -6 Loss of Control/Disposal of subsidiary 0 0 0 50 0 50 Reclassications 0 0 -144 116 32 3 Balance as at 31 December 2020 -1,500 -1,097 -9,612 -37,200 -860 -50,269 Carrying amount as at 31 December 2020 0 1,000 24,788 11,800 1,958 39,545 B. Amortisation The amortization of trademarks and licenses with nite useful lives, software programmes and other intangible assets is allocated to the cost of inventory and is included in ’Cost of sales‘ when inventory is sold, as trademarks and licenses and software programmes are mainly used directly for the production of products and they are considered as production overheads. The amortization of intangible assets not used for production is allocated to administrative expenses. C. Reclassications Reclassications mainly relate to intangible assets recorded initially in projects under construction (in property, plant and equipment) and upon the completion of the project, they are transferred to the column which describes their nature. D. Goodwill Goodwill of amount EUR 1.6 million was derecognized in 2020 due to the absorption of subsidiary Vianatt by Ecoreset S.A. No additional Goodwill has been recognized during 2021. E. Intangible assets with indenite useful lives All intangible assets have nite useful life (see Note 5.10), except for the following assets, included in trademarks and licenses category: i. Intangible assets recognized for the CGU “Fulgor” a. Trade Name “Fulgor” (carrying amount of EUR 1.4 million as at 31 December 2021) It relates to the sector of medium voltage submarine cables and terrestrial high voltage cables that Fulgor was operating prior to its acquisition by Hellenic Cables in 2011 and which has revealed signicant economic benets. Based on the analysis of relevant factors (e.g. knowledge, no longstanding engagement with a wide range of clientele, future development of the sector), the useful life of the brand was considered indenite. b. License of Port use in Soussaki, Corinth (carrying amount of EUR 8.3 million as at 31 December 2021) Fulgor holds a license for permanent and exclusive use of a port located in the premises of the factory in Soussaki, Corinth. The port is necessary for the production of submarine cables of medium and high voltage. Since the acquisition of the subsidiary, signicant investments for the upgrade and expansion of production capacity in producing high-voltage submarine cables took place. Since 2014, the production started as planned. The useful life of the asset is considered indenite, since the use of these port facilities is for an indenite period of time, in the context of the signicant development of the sector. ii. Intangible assets recognized for the CGU “Reynolds” (carrying amount of EUR 1.5 million as at 31 December 2021). Upon the completion of the acquisition of Reynolds Cuivre by Genecos, an intangible asset related to the brand name “Reynolds” was recognized, as signicant economic benets are expected from its use. Based on the analysis of relevant factors (e.g. knowledge of the relevant market, wide range of clientele, expected future developments), the useful life of the brand was considered indenite. VIOHALCO | ANNUAL REPORT 2021 158 F. Impairment testing (a) Intangible assets recognized for the CGU “Fulgor” As these intangible assets do not generate independent cash inows, it was considered appropriate to carry out the impairment test on the basis of the Cash Generating Unit (CGU) of Fulgor submarine cables production plant, which incorporates these assets. In order to evaluate the value in use, cash ow projections based on estimates by management covering a ve-year period (2022 – 2026) were used. These estimates take into consideration the contracts already signed, as well as contracts estimated to be awarded in Greece and abroad. The submarine cables CGU operates in a project-based business. Therefore, assumptions related to revenue and protability growth are based on the contracts already signed, as well as those estimated to be undertaken in the forthcoming period. The main assumptions regarding the operations of submarine cables CGU and the projects to be executed within the ve-year period are: • Progressively high capacity utilization of Corinth plant owed by Fulgor, as in 2020 & 2021, based on contracts already awarded & expected awards based on tendering activity. Given the continued growth, the existing backlog, the growth of renewables business around the world, which is a signicant driver in the attractive outlook for the oshore power generation market, the continuously high level of activity is expected to be retained throughout the period 2022-2026. • Capital expenditure of approx. EUR 102 million in the following 5 years, in order to cover estimated production and capacity needs. Capital expenditure reects investments for both maintenance purposes and expectations of organic growth. For the terminal period, the investments are set equal to depreciation. • Compound annual growth rate of revenue from oshore business for the ve-year period at ca. 3.8% attributable to assignment of new projects mainly in Greece, North Europe and the USA. • Protability per oshore project in terms of EBITDA at ca. 15%-25% of revenue. Estimated protability per project varies mainly due to dierent type of cable and technical specications, geographic region and project’s timeframe. • Compound annual growth rate of xed operating expenses at ca. 2.1% for the ve-year period. Cash ows after the rst ve years were calculated using an estimated long term growth rate of 1.55%, which mainly reects management's estimates for the world economy as well as long-term growth prospects of the oshore cable sector. The pre-tax rate used to discount these cash ows is 7.71% was based on the following: • Risk free rate was determined to zero. • The country risk for operating in Greece determined to 0.81%. • The market risk premium was determined to 4.87%, i.e. stable compared to prior year’s impairment test. Despite the fact that the commodity prices for copper and aluminium are part of the assumptions for the impairment test performed, due to the hedging activities undertaken and the customized nature of the products sold by Fulgor, the value of the business unit is not significantly affected by fluctuations in commodity prices. Neutral result from metal price fluctuations is assumed in the context of the impairment test. The results of this test indicated that the recoverable amount as of 31 December 2021 exceeds the carrying amount of the CGU amounting to EUR 219 million by EUR 524 million. A sensitivity analysis was carried out on the key assumptions of the model (discount rates and growth in perpetuity), to examine the adequacy of the headroom. The result of the sensitivity analysis indicated that the recoverable amount still exceeds the carrying value of the CGU. Assumptions may change as follows so as the recoverable amount equals the carrying amount: Change in rates (percentage points change) required for Assumptions used the recoverable amount to equal the carrying amount Discount rate 7.71% +12.0 ppc Terminal growth 1.55% -61.8 ppc (b) Intangible assets recognized for the CGU “Reynolds” The recoverable amount of the CGU that includes this intangible asset (Reynolds Cuivre S.A.) was estimated based on the present value of the future cash ows expected to be derived from the CGU (value in use). Cash ows after the rst ve years were calculated using an estimated growth rate of 0.5%, which reects management's estimates for the growth prospects for the market. The after-tax rate used to discount these cash ows is 7.6% for the ve year period and for the terminal value and was based on the following: • Risk free rate was capped to zero. • The market risk premium (including the country risk for operating in France) was determined at 5.36% Average annual revenue growth rate for the ve-year period is 3.2%, and the average annual operating expenses decrease percentage is 2.3%. Average capex equal to EUR 106 thousand. The results of this test indicated that the recoverable amount as at 31 December 2021 exceeds the carrying value of the CGU amounting to EUR 8.9 million by EUR 4.2 million. VIOHALCO | ANNUAL REPORT 2021 159 A sensitivity analysis was carried out on the key assumptions of the model (discount rates and growth in perpetuity), so as to examine the adequacy of the headroom. The result of the sensitivity analysis indicated that the recoverable amount still exceeds the carrying value of the CGU. Results of the sensitivity analysis for the impairment testing: Change in rates (percentage points change) required for Assumptions used the recoverable amount to equal the carrying amount Discount rate 7.6% +2.3ppc Terminal growth 0.5% -3.1ppc 19. Investment property A. Reconciliation of carrying amount Amounts in EUR thousands 2021 2020 Balance as at 1 January 270,413 195,003 Acquisitions 10,887 75,110 Disposals -753 -243 (Impairment losses) / Reversal of impairment losses 6,922 4,700 Modications 95 0 Transfers to property, plant and equipment -1 0 Transfers from property, plant and equipment 210 0 Depreciation -6,898 -4,157 Balance as at 31 December 280,876 270,413 Gross carrying amount 324,684 315,420 Accumulated depreciation and impairment losses -43,807 -45,007 Net carrying amount as at 31 December 280,876 270,413 Investment property comprises of a number of commercial and industrial properties that are either leased to third parties currently or will be in the foreseeable future. Each of these leases is indexed to consumer prices. During 2021, Viohalco invested an amount of EUR 11 million (EUR 75 million in 2020) for the acquisition and improvement of investment properties. B. Measurement of fair value –Impairment loss and subsequent reversal On December 31st 2021, an impairment test was performed on all real estate assets (individual assets), either owner occupied or held as investment property. The tests were carried out in order to address the risk of negative changes in the fair value of properties and respond if necessary. The results relating to owner occupied properties are outlined in note 17. For investment property assets, an impairment loss of EUR 8.9 million was recorded and included in the line ’Other expense‘ of the consolidated statement of prot or loss. Impairment losses relate primarily to land and buildings, and the recoverable amount was based on its fair value less costs of disposal. The fair value of these properties was determined by external, independent property valuers, having appropriate recognized professional qualications and recent experience in the location and category of the properties being valued. Valuation techniques are described in detail in the next paragraph. For segmental classication purposes, the impairment loss (recoverable amount EUR 3.7 million) was reported in real estate segment. Asset valuations were also used to identify if previously recognized impairment losses could be reversed. As a result, EUR 15.8 million were reversed and included in the line ’Other Income‘ of the consolidated statement of prot or loss. The recoverable amount of these assets as at 31 December 2021 was EUR 232 million and they relate to the real estate. The accumulated impairment losses carried forward as at 31 December 2021, amounts to EUR 30.2 million (31 December 2020: EUR 37.1 million). The fair value of all properties reported in the line ’Investment property‘, as at 31 December 2021, is EUR 355 million (31 December 2020: EUR 322 million). Valuation techniques and signicant unobservable inputs (Level 2 & 3) The fair value measurement for investment property has been categorized as a Level 2 and 3 regarding fair value hierarchy, based on the inputs to the valuation techniques used. VIOHALCO | ANNUAL REPORT 2021 160 Valuations methods used to determine the fair value of these properties were reecting the highest and best possible use. - For buildings currently rented or expected to be rented out in the foreseeable future for which no observable prices were available, the income approach (either Discounted Cash Flow or Direct capitalization) method was used. DCF method considered the present value of net cash ows to be generated from each property, taking into account expected rental growth rate, void periods, occupancy rate, lease incentive costs such as rent-free periods and other costs not paid by tenants. The expected net cash ows are discounted using risk-adjusted discount rates that ranged between 7,90 % - 12,00 %. Among other factors, the discount rate estimation considers the quality of each building, its location, tenant credit quality, lease terms and the expected market return. The estimated fair value would decrease if either the expected market rental growth was lower or the risk-adjusted discount rates were higher. Direct capitalization uses an All-Risk Yield in order for the current annual estimated rental value to be capitalized. ARY ranged between 5,00% - 12,50% and oers a holistic assessment of the property market's general condition. - For buildings, which were under construction and which are intended to be used as investment property in the future, the residual method was primarily used. The fair value determined by this method reects the value of the property in its current condition. - For all the properties, the comparative method (market approach) was used. According to this method the valuer estimates the market value of the subject asset by comparing the factors that mostly aect it. Such factors can be location, size, quality of construction etc. This method is based on estimation of the market price and what has been paid for similar properties under similar economic conditions. Each property is valued at a price at which similar ones in the area have recently sold with a subjective dierential added (or subtracted) to adjust for the unique characteristics of the property that make it dierent from the benchmark properties, such as location, size, accessibility etc. The specic valuation technique has been classied as Level 2, regarding the fair value measurement hierarchy. 20. Equity-accounted investees A. Reconciliation of carrying amount of associates and joint ventures Amounts in EUR thousands 2021 2020 Balance as at 1 January 38,089 37,742 Share of prot / loss (-) net of tax -2,530 -1,740 OCI prot (loss) for the period 1 0 Dividends received -886 -1,139 Eects on movement in exchange rates 671 -3,319 Additions 225 3,285 Share capital increase 8,800 4,000 Reclassications 0 -739 Balance as at 31 December 44,372 38,089 B. Financial information per associate and joint venture The following tables present nancial information per associate. The disclosed nancial information reects amounts in the nancial statements of the relevant associates. 2021 Prot or Non- Non- from loss Direct Ultimate Principal place Associate/ Carrying Current Current Current Current continuing Ownership ownership Company of business Segment JV Value Assets Assets Liabilities Liabilities Revenue operations interest interest ETEM GESTAMP AUTOMOTIVE SA Bulgaria Aluminium Joint Venture 8,095 9,465 16,390 230 14,177 41,028 1,335 49.00% 49.00% DOMOPLEX LTD Cyprus Steel Associate 1,165 3,756 2,186 547 2,966 6,811 806 45.00% 45.00% AO TMK-CPW Russia Steel Pipes Associate 11,216 64,836 5,004 23 46,926 70,009 1,910 49.00% 39.09% BELLVILLE TUBE USA Steel Pipes Associate 1,732 422 13,744 3,418 3,988 20,238 -2,837 19.40% 15.48% AWM SPA Italy Steel Associate 3,643 8,701 8,281 3,928 5,301 5,142 -698 34.00% 34.00% HC ISITMA Α.S. Turkey Copper Joint Venture 231 338 146 46 92 572 54 50.00% 42.39% U.E.H.E.M GmbH Germany Aluminium Associate 767 9,317 26 0 7,834 53,775 1,074 49.00% 41.54% NEDZINK B.V. Netherlands Copper Joint Venture 11,841 31,325 49,598 43,186 28,940 86,636 -8,192 50.00% 42.39% THE GRID SA Greece Real estate Joint Venture 5,681 2,403 28,605 19,600 47 0 -688 50.00% 43.64% 44,372 VIOHALCO | ANNUAL REPORT 2021 161 2020 Prot or Non- Non- from loss Direct Ultimate Principal place Associate/ Carrying Current Current Current Current continuing Ownership ownership Company of business Segment JV Value Assets Assets Liabilities Liabilities Revenue operations interest interest ETEM GESTAMP AUTOMOTIVE SA Bulgaria Aluminium Joint Venture 7,439 7,012 14,646 101 11,450 27,643 134 49.00% 49.00% DOMOPLEX LTD Cyprus Steel Associate 866 2,897 2,043 560 2,615 4,264 457 45.00% 45.00% AO TMK-CPW Russia Steel Pipes Associate 9,965 25,397 4,734 0 9,794 41,141 1,775 49.00% 39.09% BELLVILLE TUBE USA Steel Pipes Associate 2,162 1,975 14,200 3,428 3,773 14,548 -4,826 19.40% 15.48% AWM SPA Italy Steel Associate 3,688 8,863 7,400 5,500 3,712 12,352 -351 34.00% 34.00% HC ISITMA Α.S. Turkey Copper Joint Venture 321 359 247 42 36 594 83 50.00% 45.72% U.E.H.E.M GmbH Germany Aluminium Associate 713 9,219 23 0 7,843 37,974 923 49.00% 44.81% NEDZINK B.V. Netherlands Copper Joint Venture 12,937 25,959 49,083 29,255 32,561 79,602 -4,623 50.00% 45.72% 38,089 On January 28th 2021, Viohalco subsidiary, Noval Property REIC, participated by 50% in the establishment of a joint venture named “The Grid S.A.”, which operates in the real estate development sector. Aforementioned nancial information is presented considering the following: (a) There are no restrictions on the ability of joint ventures or associates to transfer funds to the entity in the form of cash dividends, or to repay loans or advances made by the entity. (b) The nancial statements of joint ventures or associates are used in applying the equity method and as of the same date with that of Viohalco. (c) There are no unrecognized share of losses of a joint venture or associate, both for the reporting period and cumulatively. C. Description of associates and joint ventures UEHEM (UACJ ELVAL HEAT EXCHANGER MATERIALS GmbH) is a joint establishment between ElvalHalcor and UACJ Corp. It markets aluminium products to manufacturers of automotive heat exchangers in Europe. HC ISITMA is a joint venture between ElvalHalcor and Cantas AS. It is active in the manufacture of pre-insulated copper tubes in Turkey. Bellville Tube manufactures steel tubular products for the local US market. AO TMK-CPW is a joint stock company between Corinth Pipeworks and AO TMK, the largest manufacturer of steel pipes in Russia and one of the top three globally. AO TMK-CPW has its production facilities in Polevskoy, Russia, where it manufactures pipes and hollow structural sections. AWM is developing, designing and manufacturing high-technology machines for the processing of reinforcement steel such as standard and special mesh welding machines, high-speed wire straightening and cutting machines, lattice girder machines, cold rolling lines, automatic mesh cutting and bending machines and special machines for production of tunnel reinforcement. Domoplex is a Cyprus-based company active in the manufacturing and trading of welded wire mesh for the reinforcement of concrete. NedZink B.V. is a Netherlands based company focusing on high quality zinc applications. Gestamp Etem Automotive Bulgaria S.A. is a joint venture between Gestamp and Etem Bulgaria S.A. that focus on the commercialisation and processing of aluminium extruded proles for the automotive industry. THE GRID S.A. is a joint venture between Noval Property REIC and Brook Lane Capital that operates in Real Estate development sector. VIOHALCO | ANNUAL REPORT 2021 162 21. Other investments Viohalco designates the investments shown below as equity securities at FVOCI, as they represent investments that Viohalco intends to hold for the long term strategic purposes. The movement of equity securities, as well as their analysis, is presented below: Amounts in EUR thousands 2021 2020 Balance as at 1 January 8,324 5,829 Additions 77 3,069 Disposals -637 -24 Change in fair value through OCI 702 -518 Reclassications 0 -29 Other changes -8 -2 Balance as at 31 December 8,457 8,324 Amounts in EUR thousands 2021 2020 Listed securities - Greek equity instruments 125 125 - International equity instruments 4,417 3,713 - Mutual funds 0 639 Unlisted securities - Greek equity instruments 2,951 2,946 - International equity instruments 849 849 - Mutual funds 94 30 - Other 20 20 Total 8,457 8,324 22. Assets held for sale The amount of EUR 0.4 million is the book value of machinery in the aluminium segment classied in 2021 as asset held for sale, according to IFRS 5. Management has set a plan for the sale of this equipment which is expected to take place in 2022. 23. Derivatives The following table sets out the carrying amount of derivatives: Amounts in EUR thousands 2021 2020 Non-current assets Future contracts 0 64 Options 944 871 Total 944 936 Current assets Forwards 760 1,889 Future contracts 7,670 5,336 Commodity Swaps 7,847 0 Total 16,277 7,225 Non-current liabilities Interest rate swap contracts 382 1,026 Future contracts 0 270 Commodity Swaps 3,205 0 Total 3,587 1,295 Current liabilities Forwards 2,501 659 Future contracts 5,062 4,593 Total 7,563 5,252 VIOHALCO | ANNUAL REPORT 2021 163 Hedge accounting Viohalco’s companies hold derivative nancial instruments for cash ow and fair value hedges. The abovementioned derivative nancial instruments cover risks from: - Changes in the prices of metals - Fluctuations of foreign exchange rates - Changes in loan interest rates - Fluctuations of energy prices (natural gas) The maturity and the nominal value of derivatives held by Viohalco’s companies match the maturity and nominal value of the underlying assets / liabilities (hedged items). Derivatives held by Viohalco’s companies concern mainly: - Future contracts to hedge the risk from the change of the price of metals listed in LME (London Metal Exchange) and used in production of Viohalco’s companies (i.e. mainly copper, aluminium and zinc). Such hedges are designated as cash ow hedges. - FX Forward and FX swaps to hedge the risk from the change in exchange rate of US Dollar and British Pound (i.e. currencies to which Viohalco’s companies are mainly exposed). Such hedges are either designated as fair value or cash ow hedges depending on the item hedged. FX Forwards and FX swaps when used for hedging FX risk on outstanding receivables and suppliers denominated in foreign currency these instruments are designated under fair value hedging. FX forwards when used for hedging FX risk on the forecasted sales of goods or purchase of materials executed in foreign currency FX forward is hedging instruments designated under the cash ow method. - Commodity Swaps referenced on the Title Transfer Facility (TTF) prices to hedge the risk of uctuations in natural gas prices from market conditions. Derivatives are recognised when Viohalco’s companies enter into the transaction in order either to hedge the fair value of receivables, liabilities or commitments (fair value hedges) or highly probable transactions (cash ow hedges). The change in fair value recognized in equity under cash ow hedging as at 31 December 2021 will be recycled to the consolidated statement of prot or loss during the next years, as some of the hedged events are expected to occur (the forecasted transactions will take place or the hedged items will aect prot or loss statement) within 2022 and some others at a later stage. Viohalco companies’ results from the hedging activities recorded in the statement of prot or loss are presented for metal future contracts, foreign exchange contracts and the energy contracts in the ’Revenue‘ and the ’Cost of sales‘ while for interest rate swaps in the ’Finance income/ expenses’. The amounts recognized in the consolidated statement of prot or loss are the following: Amounts in EUR thousands 2021 2020 Gain / loss (-) on future contracts -5,105 -14,174 Gain / loss (-) on FX forward contracts -3,754 519 Gain / loss (-) on comoddity swap contracts 1,251 0 Gain / loss (-) on options 0 -67 -7,608 -13,721 Prot or loss related to derivatives used for cash ow hedging recognized in other comprehensive income (Hedging reserve) as at 31 December 2021 and it will be recycled to prot or loss during the next nancial years. Options related to the associate Bellville Tube Company Based on the purchase agreement of Bellville Tube Company’s shares signed in 2020, the shareholders of Bellville Tube Company granted CPW America with a call option to purchase the remaining outstanding capital stock of Bellville Tube Company. The calculation of the purchase price prescribed in the call option is based on a predetermined formula. The exercise period for the call option starts in 2022 and expires in 2025. Upon the exercise of the call option CPW America will own 100% of outstanding capital stock of Bellville Tube Company. In addition, the purchase agreement prescribes that if CPW America does not exercise the call option described above, CPW America shall have the option (“put option”), but not the obligation, during the period 2022-2025 to require Bellville Tube Company to redeem all, but not less than all, of the shares of Bellville Tube Company then held by CPW America. The aggregate purchase price for the redeemed shares if the put option is exercised will be USD 3.3 million, i.e. equal to the amount initially disbursed. The options described above were recognized on the statement of nancial position. Based on the inputs used to determine the fair value of the put and the call options, such options are categorized as Level 3. The options are valuated in USD and based on year end exchange rates, the valuation of such options was EUR 944 thousand. The valuation of the call & put options was based on a widely acceptable pricing model methodology considering the complexity of the option plan. The basic inputs that have been used in the valuation model are the following: • Fair value of the share held in the associate, which in turn is dependent on expected turnover, EBITDA margins and future working capital needs of the associate. VIOHALCO | ANNUAL REPORT 2021 164 • Applicable discount rate. • Probability of default of the counterparty. Regarding the fair values of the call and put options, reasonably possible changes at the reporting date to one of the signicant unobservable inputs stated below, keeping other inputs constant, would have the following eect: • If the discount rate was higher by 1%, then the fair value of the options would be lower by EUR 6 thousand or 0.6%. • If the fair value of the shares held was higher by 10%, then the fair value of the options would be lower by EUR 146 thousand or 15.3%. • If probability of default of the counterparty was higher by 10%, then the fair value of the options would be lower by EUR 255 thousand or 26.6%. 24. Capital and reserves A. Share capital and share premium The share capital of the Company amounts to EUR 141,894 thousand divided into 259,189,761 shares without nominal value. Holders of shares are entitled to one vote per share at the general meetings of the Company. Share premium of the Company amounts to EUR 457,571 thousand. B. Translation reserve The translation reserve comprises all foreign currency dierences arising from the translation of the nancial statements of foreign operations. C. Nature and purpose of other reserves (a) Statutory reserve Pursuant to the Belgian tax legislation, the companies are obliged, from their scal year prots, to form 5% as a legal reserve until it reaches 10% of their paid share capital. The distribution of the legal reserve is prohibited. Pursuant to Greek company law, the companies are obliged to allocate each year at least 5% of its annual net prots to its statutory reserve, until this reserve equals at least 1/3 of the company’s share capital. The distribution of the statutory reserve is prohibited but it can be used to oset losses. (b) Hedging reserve The eective portion of the cumulative net change in the fair value of hedging instruments used in cash ow hedges pending subsequent recognition in prot or loss as the hedged cash ows aect prot or loss. (c) Other fair value reserve The cumulative net change in the fair value of the equity securities until the assets are derecognized (and therefore transferred to retained earnings). (d) Special reserves This category relates to reserves formed by the application of the provisions of certain developmental laws which were granting tax benets to companies that invested their retained earnings rather than distribute them to the shareholders. More specically, the aforementioned reserves include prots that have already been taxed or have been permanently exempted from income tax, after the lapse of a specied period beginning from the completion of the investments they concern. (e) Tax exempt reserves This category relates to reserves formed by the application of the provisions of certain tax laws and are exempt from income tax, provided that they are not distributed to the shareholders. In case these reserves are distributed, they will be taxed using the tax rate applying at such time. D. Reconciliation of other reserves Statutory Hedging Other Fair Special Tax exempt Other Amounts in EUR thousands reserves reserves Value reserve reserves reserves reserves Total Balance as at 1 January 2021 42,039 2,483 1,359 81,496 296,785 11,942 436,104 Other comprehensive income 0 2,282 704 0 0 -1 2,985 Capitalization of reserves 2,719 0 0 153 527 -2,248 1,150 Acquisition of NCI 196 3 -2 2 132 0 331 Change in ownership interests 64 -105 0 -111 -16 35 -133 Balance as at 31 December 2021 45,018 4,662 2,061 81,540 297,428 9,728 440,437 VIOHALCO | ANNUAL REPORT 2021 165 Statutory Hedging Other Fair Special Tax exempt Other Amounts in EUR thousands reserves reserves Value reserve reserves reserves reserves Total Balance as at 1 January 2020 39,955 -728 1,875 80,139 296,653 8,713 426,607 Other comprehensive income 0 3,210 -516 0 0 -4 2,690 Capitalization of reserves 2,117 0 0 1,357 133 0 3,607 Loss of Control/Disposal of subsidiary -33 0 0 0 0 0 -33 Change in ownership interests -1 0 0 0 0 -38 -39 Mergers and absorptions 0 0 0 0 0 3,271 3,271 Balance as at 31 December 2020 42,039 2,483 1,359 81,496 296,785 11,942 436,104 Mergers and absorptions are further explained in note 32. 25. Capital management Viohalco and its companies’ policy consists in maintaining a strong capital structure, so as to keep the condence of investors, creditors and the market and enable the future development of their activities. The Board of Directors monitors the return on capital which is dened as net results divided by total equity less non-controlling interests. The Board of Directors also monitors the level of dividends distributed to holders of ordinary shares. The Board of Directors tries to maintain an equilibrium between higher returns that would be feasible through higher borrowing levels and the advantages and security oered by a strong and robust capital structure. In this context, the Board of Directors monitors, the Return on Capital Employed (ROCE) index, otherwise the Return on Invested Capital (ROIC) index, which is dened as Earnings before Interest and Tax (EBIT) divided by total Capital Employed, (i.e. equity and debt). The Board of Directors seeks opportunities and examines feasibility to leverage Viohalco’s companies with relatively high ROCE (in every case higher than the cost of debt) and deleverage companies that go through a relatively low ROCE performance period. 26. Loans and borrowings A. Overview Amounts in EUR thousands 31 December 2021 31 December 2020 Non-current liabilities Secured bank loans 119,994 161,357 Unsecured bank loans 69,524 82,530 Secured bond issues 455,719 558,078 Unsecured bond issues 648,856 200,021 Loans and borrowings – Long term 1,294,093 1,001,986 Lease Liabilities – Long term 34,639 41,276 Total Long-term debt 1,328,732 1,043,262 Current liabilities Secured bank loans 183,484 147,210 Unsecured bank loans 459,179 432,697 Current portion of secured bank loans 63,553 51,153 Current portion of unsecured bank loans 15,473 14,657 Current portion of secured bond issues 82,388 69,676 Current portion of unsecured bond issues 44,068 30,617 Loans and borrowings – Short term 848,145 746,010 Lease Liabilities – Short term 10,696 10,935 Total Short term debt 858,841 756,945 Total loans and borrowings 2,187,573 1,800,207 Information about the Viohalco companies’ exposure to interest rate, foreign currency and liquidity risk is included in Note 30. VIOHALCO | ANNUAL REPORT 2021 166 The maturities of non-current loans are as follows: Amounts in EUR thousands 2021 2020 Between 1 and 2 years 251,691 367,571 Between 2 and 5 years 575,669 556,840 Over 5 years 501,372 118,850 Total 1,328,732 1,043,262 The eective weighted average interest rates of the main categories of loans and borrowings at the reporting date are as follows: 2021 Carrying amount Interest rate Bank loans (non-current)-EUR 260,465 2.46% Bank loans (current)-EUR 574,039 3.39% Bank loans (current)-USD 10,110 4.50% Bank loans (current)-GBP 36,372 3.17% Bond issues-EUR 1,231,031 2.94% 2020 Carrying amount Interest rate Bank loans (non-current)-EUR 229,293 2.90% Bank loans (non-current)-USD 235 1.00% Bank loans (current)-EUR 543,727 3.66% Bank loans (current)-USD 5,042 2.26% Bank loans (current)-GBP 7,735 2.75% Bond issues-EUR 858,391 3.45% The majority of Viohalco companies’ loans are Euro denominated. During 2021, Viohalco subsidiaries obtained new bank loans amounting to EUR 897 million and repaid bank loans of EUR 514 million maturing within the year. The new loans were mainly bond loans and drawdowns from existing revolving credit facilities for project nancing, or new loans with similar terms and conditions. More specically, during 2021 the main events relating to Viohalco companies’ nancing are the following: Aluminium and Copper segments • ElvalHalcor issued a common ve-year bond loan amounting to EUR 40 million with a major Greek bank, to nance current and general business needs. • ElvalHalcor bond loan of Euro 250 million commenced trading in the Athens Stock Exchange. The bond has a coupon of 2.45% payable semi- annually and a 7-year maturity. · ElvalHalcor signed two bond loans of 7.5-years maturity. The rst one amounted to EUR 140 million and the second one amounted to EUR 130 million, both of them were syndicated loans with the four major Greek banks. · ElvalHalcor reclassied an amount of Euro 25 million to current loans and borrowing, after receiving waiver from the lender, for violation of the “loans towards related parties” provisions, as the waiver has been granted after the reporting date of 31.12.2021. Cables and Steel Pipes segments • Hellenic Cables issued a ‘green’ bond loan of EUR 20 million, in compliance with ESG nancial principles, with a major Greek bank and an initial maturity of 2-years. • Fulgor also issued a ‘green’ bond loan of EUR 20 million, in compliance with ESG nancial principles, with a major Greek bank, with an initial 2- year term from the date of signing. Both bond loans will support working capital needs for the design, production, installation and operation of submarine and land cable systems in projects related to energy transmission from renewable energy sources and the electrical interconnection of islands. • Fulgor entered an agreement with a Greek bank for a long-term bond loan of EUR 10 million for 6 years from the date of signing. • Corinth Pipeworks entered an agreement with a major Greek bank for a long-term bond loan of EUR 10 million for 2 years from the date of signing. • Corinth Pipeworks entered an agreement with a Greek bank for a long-term bond loan of EUR 7 million for 5 years from the date of signing. • Corinth Pipeworks entered an agreement with a major Greek bank for a long-term bond loan of EUR 4.6 million for 5 years from the date of signing. • Hellenic Cables and Corinth Pipeworks repaid the syndicated bond loans issued in 2013 and reproled in 2018, EUR 36.6 million. There were also scheduled repayments in December 2021, for 14.0 million. For the mortgages on property, plant and equipment and pledges on inventories that these bond carried, in favor of the bank syndications, the process to lift them has been initiated but not yet completed. S VIOHALCO | ANNUAL REPORT 2021 167 teel segment • Viohalco subsidiary Stomana, nalized the reproling of the EUR 67 million long term syndication loan issued in by extending the term from 2023 to 2026. Real Estate segment • Noval Property successfully issued a Green Bond Loan of EUR 120 million, listed in the Category of Fixed Income Securities at the Regulated Market of the Athens Stock Exchange. The bond has a coupon of 2.65% payable semi-annually and a 7-year maturity. No other signicant events, related with the nancing of subsidiaries occurred during the period. Short term facilities are predominately revolving credit facilities, which nance working capital needs and specic ongoing projects. Viohalco subsidiaries have never in the past experienced any issues in nancing their activities, renewing their working capital lines or renancing longterm loans and borrowings. Management expects that any mandatory repayment of banking facilities will be met with operating cash ows or from currently unutilized and committed credit lines. Under the terms of the loan agreements, certain viohalco subsidiaries must comply with conditions (including nancial covenants) and such compliance is tested on an annual basis for the majority of the loans. Management has considered the measures that need to be taken to mitigate the risk relating to these potential breaches and expects that in the event that these covenants are breached, waivers will be granted. However, the improved performance across segments will reverse such event. The average interest rate of the outstanding bank loans as at 31 December 2021 was 3% (3.4% as at 31 December 2020). Property, plant and equipment and inventories of some subsidiaries carry mortgages and liens for a total amount of EUR 1,183 million, as collaterals for long term loans and syndicated loans. In addition, for certain Viohalco companies’ loans, there are change of control clauses that provide lenders early redemption rights. B. Reconciliation of movements of liabilities to cash ows from nancing activities Amounts in EUR thousands Loans and Borrowings Leases Total Balance at 1 January 2021 1,747,933 52,211 1,800,144 Changes from nancing cash ows Proceeds from loans and borrowings 896,672 0 896,672 Repayment of borrowings & lease liabilities -514,171 -11,562 -525,733 Total changes from nancing cash ows 382,501 -11,562 370,940 Other changes New leases 0 5,146 5,146 Interest expense 70,576 2,076 72,651 Interest paid -62,521 -2,061 -64,582 Capitalised borrowing costs 862 0 862 Terminations/Modications 674 -483 191 Eect of changes in foreign exchange rate 2,214 7 2,222 Total other changes 11,805 4,685 16,489 Balance at 31 December 2021 2,142,238 45,334 2,187,573 Amounts in EUR thousands Loans and Borrowings Leases Total Balance at 1 January 2020 1,773,978 53,420 1,827,398 Changes from nancing cash ows Proceeds from loans and borrowings 258,187 0 258,187 Repayment of borrowings & lease liabilities -286,282 -10,688 -296,970 Total changes from nancing cash ows -28,094 -10,688 -38,783 Other changes New leases 0 12,657 12,657 Interest expense 68,201 2,374 70,575 Interest paid -67,123 -2,252 -69,375 Capitalised borrowing costs 4,163 0 4,163 Terminations/Modications 0 -2,408 -2,408 Loss of Control/Disposal of subsidiary -1,482 -797 -2,279 Eect of changes in foreign exchange rate -1,710 -94 -1,804 Total other changes 2,049 9,479 11,529 Balance at 31 December 2020 1,747,933 52,211 1,800,144 * Interest paid reported in Cash Flow Statement, includes bank charges and other nance costs. VIOHALCO | ANNUAL REPORT 2021 168 27. Trade and other payables Amounts in EUR thousands Note 2021 2020 Suppliers 670,552 492,709 Notes payable 271,177 148,389 Social security funds 11 12,465 11,033 Amounts due to related parties 38 4,806 6,485 Sundry creditors 17,828 20,716 Accrued expenses 105,895 60,011 Taxes-duties 28,697 35,955 Total 1,111,420 775,297 Non-current balance of trade and other payables 17,615 12,299 Current balance of trade and other payables 1,093,804 762,998 Balance as at 31 December 1,111,420 775,297 The increase in trade and other payables is mainly attributed to increase in metal prices and the increase in “Notes payable” which concerns structured payable arrangements related to purchases of primary raw materials, such as copper, steel etc. whose payment periods can be longer than usual for such supplies. 28. Grants Amounts in EUR thousands Note 2021 2020 Balance as at 1 January 35,817 35,409 New grants received during the year 1,529 495 New grants for which receipt is pending 0 3,073 Transfer of grants to results -51 0 Transfer of grants to receivables/paybales -427 0 Amortisation of grants 8 -2,886 -3,158 Foreign exchange dierences 3 -1 Balance as at 31 December 33,985 35,817 Government grants have been received for investments in property, plant and equipment. During 2021, Viohalco subsidiary, ElvalHalcor, recorded an amount of EUR 1,227 thousands related to grants for the purchase of certain items of property plant and equipment. All conditions attached to the grants received by Viohalco’s companies were met as at 31 December 2021. 29. Provisions Non-current Amounts in EUR thousands Note Pending court rulings Other provisions Total Balance as at 1 January 2021 25 1,814 1,839 Additional provisions of the scal year 0 151 151 Reclassications 0 -24 -24 Provisions reversed 8 0 -140 -140 Balance as at 31 December 2021 25 1,800 1,825 VIOHALCO | ANNUAL REPORT 2021 169 Amounts in EUR thousands Note Pending court rulings Other provisions Total Balance as at 1 January 2020 25 2,752 2,777 Foreign exchange dierences 0 -46 -46 Additional provisions of the scal year 0 187 187 Transfer to short term provisions 0 -18 -18 Provisions reversed 8 0 -1,062 -1,062 Balance as at 31 December 2020 25 1,814 1,839 Current Amounts in EUR thousands Note Pending court rulings Other provisions Total Balance as at 1 January 2021 348 304 652 Foreign exchange dierences 573 0 573 Additional provisions of the scal year 12,995 0 12,995 Reclassications 0 -111 -111 Provisions reversed 8 0 -1 -1 Provisions used -58 -30 -88 Balance as at 31 December 2021 13,858 162 14,020 Amounts in EUR thousands Note Pending court rulings Other provisions Total Balance as at 1 January 2020 153 483 636 Foreign exchange dierences 0 -5 -5 Additional provisions of the scal year 321 99 420 Transfer from long term provisions 0 18 18 Provisions reversed 8 0 -130 -130 Provisions used -126 -160 -286 Balance as at 31 December 2020 348 304 652 In 2021, additional provision for antidumping duties have been recorded (note 8). During 2020, provision relating to environmental issue for underground pollution in United Kingdom was reversed, as no obligation was further exist. 30. Financial instruments A. Accounting classications and fair values The following table shows the carrying amounts and fair values of nancial assets and nancial liabilities, including the levels in the fair value hierarchy. 31 December 2021 Amounts in EUR thousands Carrying amount First Level Second Level Third Level Total Other investments 8,457 4,543 0 3,915 8,457 Derivative nancial assets 17,221 14,343 1,934 944 17,221 25,679 18,886 1,934 4,859 25,679 Derivative nancial liabilities -11,149 -8,316 -2,833 0 -11,149 14,529 10,570 -899 4,859 14,529 VIOHALCO | ANNUAL REPORT 2021 170 31 December 2020 Amounts in EUR thousands Carrying amount First Level Second Level Third Level Total Other investments 8,324 4,478 0 3,846 8,324 Derivative nancial assets 8,161 5,188 1,889 1,084 8,161 16,485 9,666 1,889 4,930 16,485 Derivative nancial liabilities -6,547 -4,824 -1,443 -280 -6,547 9,937 4,841 446 4,650 9,937 The various levels are as follows: - Level 1: Quoted prices (unadjusted) in an active market for identical assets and liabilities; - Level 2: Inputs that are observable either directly or indirectly; - Level 3: Unobservable inputs for assets and liabilities. The fair value of the following nancial assets and liabilities measured at amortised cost approximate their carrying amount: - Trade and other receivables; - Cash and cash equivalents; - Trade and other payables; - Loans and borrowings; - Lease liabilities. Specically, the carrying amount of loans and borrowings is considered as a good approximation of their fair value as 85% of consolidated Loans and borrowings concern oating-rate debt, which are a very good approximation of current market rates. The following table shows reconciliation between opening and closing balances for Level 3 nancial assets: Amounts in EUR thousands Balance as at 1 January 2021 3,846 Additions 77 Disposals -8 Balance as at 31 December 2021 3,915 Balance as at 1 January 2020 830 Additions 3,069 Disposals -24 Reclassications (note 14) -29 Balance as at 31 December 2020 3,846 B. Measurement of fair values (a) Valuation techniques and signicant unobservable inputs The fair values of nancial assets that are traded in active markets (stock markets e.g. derivatives, shares, bonds, mutual funds) are set according to the published prices that are valid on the reporting date. The fair value of nancial assets is determined by their oer price, while the fair value of nancial liabilities is determined by their bid price. The fair values of nancial assets that are not traded in active markets are set through the use of valuation techniques and standards that are based on market data on the reporting date. The fair values of nancial liabilities, for the purpose of being recorded in nancial statements, are estimated based on the present value of the future cash ows that arise from specic contracts using the current interest rate that is available for Viohalco and its companies for the use of similar nancial-credit means. Inputs that do not meet the respective criteria and cannot be classied in Level 1 but are observable, either directly or indirectly, fall under Level 2. Over-the-counter derivative nancial instruments based on prices obtained from brokers are classied in this level. The nancial assets, such as unlisted shares that are not traded in an active market whose measurement is based on the Viohalco’s companies’ forecasts for the issuer’s future protability are classied under Level 3. VIOHALCO | ANNUAL REPORT 2021 171 The following table shows the valuation techniques used in measuring fair values, as well as the signicant unobservable inputs used: Signicant unobservable Inter-relationship between key unobservable Type Valuation technique inputs inputs and fair value measurement Derivatives Market value: Price as traded in active market Not applicable Not applicable Market comparison technique: The fair values are based on broker quotes. Similar contracts are Broker quotes Not applicable traded in an active market and the quotes reect the actual transactions in similar instruments Equity securities traded Market value: Price as traded in active market Not applicable Not applicable in active markets Equity securities not traded Discounted cash ows: The fair value of shares - Risk-free rate: oor to zero due The estimated fair value would increase (decrease) if: in active markets not traded in an active market is dened based to negative bond yields - the estimated risk-free rate, market risk premium on the estimates of Viohalco and its companies - Market risk premium: 4.9% and WACC were lower (higher) for the future protability of the issuer after taking - Expected tax expense rate: 22% - the estimated cash ows were higher (lower) into account the expected growth rate of its - WACC for the most signicant - the expected income tax rate was lower (higher) operations, as well as the discounted interest rate investment: 7-8% (b) Transfers between Levels 1 and 2 There were no transfers from Level 2 to Level 1 or from Level 1 to Level 2 in 2021 or in 2020. C. Financial risk management Viohalco and its companies are exposed to credit, liquidity and market risk due to the use of its nancial instruments. This Note sets forth information on their exposure to each one of the above risks, their objectives, the policies and procedures applied to risk measurement and management and Viohalco’s capital management (note 25). More quantitative particulars on these disclosures are included in the entire range of the Consolidated Financial Statements. The risk management policies are applied to identify and analyze the risks facing Viohalco and its companies, set risk-taking limits and apply relevant control systems. The risk management policies and relevant systems are examined from time to time so as to take into account any changes in the market and the companies’ activities. The implementation of risk management policies and procedures is supervised by the Internal Audit department, which performs ordinary and extraordinary audits relating to the implementation of procedures, whereas the results of such audits are notied to the Board of Directors. C.1. Credit risk Credit risk is the risk of the nancial loss to Viohalco and its companies, if a customer or counterparty to a nancial instrument fails to meet its contractual obligations, and arises principally from the companies’ receivables from customers, contract assets and bank deposits. The carrying amount of nancial assets represents the maximum credit exposure. Amounts in EUR thousands Note 2021 2020 Trade & other receivables 15 630,850 457,809 Contract assets 7 101,371 68,517 Less: Other down payments 15 -16,478 -7,567 Tax assets 15 -62,298 -59,663 Other non-nancial assets -28,012 -26,630 625,433 432,466 Other investments 21 8,457 8,324 Cash and cash equivalents 16 503,267 219,161 Derivatives 23 17,221 8,161 528,945 235,645 Total 1,154,378 668,111 (a) Trade and other receivables Viohalco companies’ exposure to credit risk is inuenced mainly by the individual characteristics of each customer. However, the companies’ management also considers the factors that may inuence the credit risk of its customer base, including the default risk of the industry and country in which customers operate. No client exceeds 10% of consolidated sales and, consequently, commercial risk is spread over a large number of clients. However, due to the fact that the business of certain subsidiaries (i.e. CPW Pipe Industry, Hellenic Cable Industry and Fulgor) is project oriented, there are cases where this threshold is individually exceeded for a rather short period of time. VIOHALCO | ANNUAL REPORT 2021 172 Viohalco’s companies have established a credit policy on the basis under which each new customer is examined on an individual basis in terms of creditworthiness before the standard payment and delivery terms are proposed to such customer. Viohalco’s companies review includes external ratings, if they are available, and in some cases bank references. Credit limits are set for each customer, which are reviewed in accordance with current circumstances and the terms of sales and collections are readjusted, if necessary. As a rule, the credit limits of customers are set on the basis of the insurance limits received for them from insurance companies and, subsently, receivables are insured according to such limits. When monitoring the credit risk of customers, the latter are grouped according to their credit characteristics, the maturity characteristics of their receivables and any past problems of receivability they have shown. Trade and other receivables mainly include wholesale customers of Viohalco’s companies. Any customers characterized as being “high risk” are included in a special list of customers and subsequent sales must be paid in advance. Depending on the background of the customer and its status, Viohalco’s companies demand real or other security (e.g. letters of guarantee) in order to secure its receivables, if possible. Viohalco’s companies record an impairment loss that represents its expected credit losses in respect of trade and other receivables. At 31 December, the maximum exposure to credit risk for trade and other receivables and contract assets by geographic region was as follows: Amounts in EUR thousands 2021 2020 Greece 184,545 179,175 Other EU member states 261,941 156,445 Other European countries 77,343 40,368 Asia 57,020 22,579 America 36,440 26,829 Africa 7,665 6,868 Oceania 479 202 Total 625,433 432,466 The ageing of trade and other receivables and contract assets that were not impaired was as follows: Amounts in EUR thousands 2021 2020 Neither past due nor impaired 556,236 374,390 Overdue - Up to 6 months 59,022 40,780 - Over 6 months 10,175 17,296 Total 625,433 432,466 Based on management assessment,the amounts that are past due up to 6 months and over 6 months are still collectible in full, based on historical payment behaviour and extensive analysis of customer credit risk, including underlying customers’ credit ratings wheneverthey are available. Viohalco companies insure signicant portion of their receivables in order to be secured in case of default. As at 31 December 2021, 77% of the balances owed by 3rd parties were insured. The movement in impairment of trade and other receivables and contract assets is as follows: 2021 2020 Trade & other Contract Trade & other Contract Amounts in EUR thousands receivables assets Total receivables assets Total Balance as at 1 January 71,693 143 71,836 73,215 115 73,330 Impairment loss recognized 2,999 175 3,173 2,027 48 2,075 Amounts written o -8,454 0 -8,454 -1,078 0 -1,078 Impairment loss reversed -476 0 -476 -558 -21 -578 Foreign exchange dierences 1,776 0 1,776 -1,914 0 -1,913 Reclassication -225 0 -225 0 0 0 Balance as at 31 December 67,313 318 67,630 71,693 143 71,836 The allowance for expected credit losses for trade receivables and contract assets are calculated at individual level when there is an indication of impairment. For receivables and contract assets without any indication of impairment the expected credit losses are based on the historical credit loss experience combined with forward-looking information in macroeconomic factors eecting the credit risk, such as country risk and customers’ industry related risks. Expected loss rates are updated at every reporting date. VIOHALCO | ANNUAL REPORT 2021 173 In 2021, the impairment loss recognized concerns mainly clients in steel, aluminium and copper segment while amounts that have been impaired mainly in copper and steel segments where written o. On the contrary, a reversal of impairment loss was recorded as a result of the improvement of the expected loss rates of major clients. The following collateral exists for securing non-insured receivables from customers and contract assets: Amounts in EUR thousands 2021 2020 Cash collateral 1,076 3,448 Letter of credit 10,674 11,740 Collateral on property 2,037 2,037 Payables which can be oset by receivables 11,441 7,248 Other 3,253 2,029 Total 28,480 26,502 (b) Cash and cash equivalents Viohalco and its subsidiaries held cash and cash equivalents of EUR 503 million at 31 December 2021 (2020: EUR 219 million). The cash and cash equivalents are held with bank and nancial institution counterparties, which are rated from A3 to Caa1 based on ratings of Moody’s. Impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reects the short maturities of the exposures. Viohalco considers that its cash and cash equivalents have low credit risk based on the credit assessment performed. C.2. Liquidity risk Liquidity risk is the risk that Viohalco companies will encounter diculty in meeting the obligations associated with its nancial liabilities that are settled by delivering cash or another nancial asset. The approach to manage liquidity is to ensure, as much as possible, that they will have sucient liquidity to meet their liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to their reputation. In order to avoid liquidity risks, Viohalco companiesaim to maintain the level of their cash and cash equivalents at an amount in excess of expected cash outows on nancial liabilities (other than trade payables) over the next quarter days. They also monitor the level of expected cash inows on trade and other receivables together with expected cash outows on trade and other payables. This excludes the potential impact of extreme circumstances that cannot reasonably be predicted. Viohalco’s subsidiary Steelmet SA, provides support services to other subsidaries, when agreeing nancing terms with credit institutions in Greece and other countries. Exposure to liquidity risk Financial liabilities and derivatives based on contractual maturity are broken down as follows: 2021 Amounts in EUR thousands Carrying Amount < 1year 1-2 years 2-5 years > 5 years Total Liabilities Bank loans 911,208 731,748 50,791 123,419 21,725 927,683 Bond issues 1,231,031 150,965 226,495 490,837 522,835 1,391,132 Lease liabilities 45,335 11,728 10,245 9,083 15,589 46,644 Derivatives 11,149 7,563 3,205 0 382 11,149 Contract liabilities 61,371 61,448 0 0 0 61,448 Trade and other payables 1,111,420 1,092,676 6,497 3,184 9,063 1,111,420 3,371,513 2,056,128 297,232 626,524 569,593 3,549,477 VIOHALCO | ANNUAL REPORT 2021 174 2020 Amounts in EUR thousands Carrying Amount < 1year 1-2 years 2-5 years > 5 years Total Liabilities Bank loans 889,604 632,215 63,598 156,812 51,732 904,356 Bond issues 858,391 126,178 306,657 428,278 81,781 942,895 Lease liabilities 52,211 11,832 12,160 28,750 2,090 54,833 Derivatives 6,547 6,278 270 0 0 6,547 Contract liabilities 54,021 54,103 0 0 0 54,103 Trade and other payables 775,297 780,469 6,868 3,330 1,133 791,800 2,636,072 1,611,075 389,552 617,171 136,736 2,754,533 Viohalco companies have syndicated loans that contain certain nancial covenants. The ratios most commonly used are ’Total liabilities / Total equity‘, ’Net debt / Total sales‘ and ’Current assets / Current liabilities‘. A future breach of covenants may require the companies to repay the loans earlier than indicated in the above table. Under the agreement, the covenants are monitored on regular basis and regularly reported to companies’ management to ensure compliance with the agreements. C.3. Market risk Market risk is the risk that changes in the market prices – such as commodity prices, foreign exchange rates and interest rates - will aect Viohalco and its companies income or the value of their nancial instruments. Viohalco’s companies use derivatives to manage market risk. All such transactions are carried out through Steelmet S.A. Generally, the companies seek to apply hedge accounting to manage volatility in prot or loss. (a) Currency risk: Viohalco and its companies are exposed to currency risk in relation to the sales and purchases carried out and the loans issued in a currency other than the functional currency of Viohalco and its companies, which is mainly EUR. The most important currencies in which these transactions are held are mainly EUR, USD and GBP. Over time, Viohalco’s companies hedge the greatest part of their estimated exposure to foreign currencies in relation to the anticipated sales and purchases, as well as to the receivables and liabilities in foreign currency. Viohalco’s companies enter mainly into forward contracts with external counterparties so as to deal with the risk of the exchange rates varying, which mainly expire within less than a year from the reporting date. When deemed necessary, these contracts are renewed upon expiry. As the case may be, the foreign exchange risk may also be covered by taking out loans in the respective currencies. Loan interest is denominated in the same currency with that of cash ows, which arises from the Viohalco’s companies’ operating activities. The investments of Viohalco and its companies in their subsidiaries are not hedged, because these exchange positions are considered to be long- term and have been made mainly in Euro. The summary quantitative data about Viohalco and its companies’ exposure to currency risk as reported is as follows. 2021 Amounts in EUR thousands USD GBP BGN RSD RON Other Total at risk EUR Total Trade and other receivables 70,522 24,868 33,598 5,661 32,395 10,245 177,288 453,562 630,850 Contract assets 0 0 0 0 0 0 0 101,371 101,371 Loans and borrowings -14,441 -36,467 -1,718 -31 -6,930 -7,315 -66,901 -2,120,672 -2,187,573 Trade and other payables -110,971 -23,080 -55,155 -556 -17,045 -947 -207,754 -903,666 -1,111,420 Contract Iiabilities -719 0 -1,511 -49 -1,001 -4,848 -8,129 -53,243 -61,371 Cash & cash equivalents 28,422 5,488 5,131 462 3,243 308 43,054 460,213 503,267 -27,188 -29,191 -19,655 5,486 10,662 -2,557 -62,442 -2,062,434 -2,124,876 Derivatives for risk hedging (Nominal Value) -61,934 -26,026 0 0 0 0 -87,960 0 -87,960 Exposure -89,122 -55,217 -19,655 5,486 10,662 -2,557 -150,402 -2,062,434 -2,212,836 VIOHALCO | ANNUAL REPORT 2021 175 2020 Amounts in EUR thousands USD GBP BGN RSD RON Other Total at risk EUR Total Trade and other receivables 47,491 10,834 19,184 2,051 19,768 8,353 107,681 350,128 457,809 Contract assets 0 0 0 0 0 0 0 68,517 68,517 Loans and borrowings -5,033 -8,724 -5,477 0 -6,131 -9,671 -35,036 -1,765,171 -1,800,207 Trade and other payables -65,286 -19,526 -44,230 -639 -12,706 -1,401 -143,789 -631,508 -775,297 Contract Iiabilities -3,759 0 -415 -943 -1,492 -37 -6,646 -47,374 -54,021 Cash & cash equivalents 25,999 9,969 4,109 1,082 2,974 1,001 45,134 174,027 219,161 -588 -7,446 -26,829 1,551 2,412 -1,756 -32,656 -1,851,382 -1,884,039 Derivatives for risk hedging (Nominal Value) -21,627 -21,439 0 0 0 0 -43,066 21,300 -21,766 Exposure -22,216 -28,885 -26,829 1,551 2,412 -1,756 -75,722 -1,830,082 -1,905,804 “Derivatives for risk hedging” includes also derivatives that relate to highly probable transactions, which have not been yet recognized as assets or liabilities in the consolidated statement of nancial position. Euro denominated amounts are included for totals’ reconciliation purposes. The following exchange rates have been applied during the year. Average exchange rate Year end spot rate 2021 2020 2021 2020 USD 1.18 1.14 1.13 1.23 GBP 0.86 0.89 0.84 0.90 BGN 1.96 1.96 1.96 1.96 RSD 117.57 117.58 117.58 117.58 ROΝ 4.92 4.84 4.95 4.87 Viohalco is primarily exposed to changes of Euro against US dollar, pound sterling, Serbian Dinar and RON. A reasonably possible strengthening (weakening) of Euro against these currencies as at 31 December would have aected the measurement of nancial instruments denominated in a foreign currency and aected equity and prot or loss by the amounts shown below. This analysis assumes that all other variables, in particular interest rates, remain constant and ignores any impact of forecast sales and purchases. The Bulgarian currency LEV is not analysed below due to its xed currency rate at 1.96 BGN/EUR. Prot or loss Equity, net of tax Amounts in EUR thousands EUR Strengthening EUR Weakening EUR Strengthening EUR Weakening 2021 USD (10% movement) 8,920 -8,920 13,751 -13,751 GBP (10% movement) 6,337 -6,337 8,367 -8,367 RSD (10% movement) -428 428 -428 428 RON (10% movement) -832 832 -832 832 2020 USD (10% movement) 1,070 -1,070 1,688 -1,688 GBP (10% movement) 2,195 -2,195 2,195 -2,195 RSD (10% movement) -118 118 -118 118 RON (10% movement) -183 183 -183 183 VIOHALCO | ANNUAL REPORT 2021 176 (b) Interest rate risk: Viohalco’s subsidiaries during the prolonged low interests period have adopted a exible policy of ensuring that between 0% and 20% of its interest rate risk exposure is at a xed rate. This is achieved mostly by borrowing at a oating rate and in certain circumstances by entering into xed–rate instruments. The interest rate prole of Viohalco companies’ interest-bearing nancial instruments, as reported is as follows. Nominal amount Amounts in EUR thousands 2021 2020 Fixed-rate instruments Financial assets 0 3,975 Financial liabilities -326,704 -103,359 Variable-rate instruments Financial liabilities -1,860,868 -1,614,903 Fixed-rate instruments Viohalco does not account for any xed-rate nancial assets or nancial liabilities at fair value through prot or loss. Viohalco currently uses derivatives (interest rate swaps) as hedging instruments under a cash ow hedge accounting model. Sensitivity analysis for variable-rate instruments A reasonably possible change of 0.25% in interest rates of variable-rate instruments at the reporting date would have increased/ decreased (-) prot or loss by the amount shown below. This analysis assumes that all other variables, in particular foreign currency exchange rate, remain constant. Variable rate Prot or loss Amounts in EUR thousands 0.25% increase 0.25% decrease 2021 Financial liabilities -449 452 Cash ow sensitivity (net) -449 452 2020 Financial liabilities -3,928 3,928 Cash ow sensitivity (net) -3,928 3,928 (c) Cash ow hedges The following table indicates the periods in which the cash ows associated with cash ow hedges are expected to occur: Carrying amount Amounts in EUR thousands at 31 December 2021 1-6 months 6-12 months More than 1 year 31 December 2021 Interest rate Swaps Liabilities 382 382 0 0 382 Forwards Assets 760 732 28 0 760 Liabilities 2,071 2,035 36 0 2,071 Future contracts Assets 7,670 7,564 107 0 7,670 Liabilities 5,062 5,077 -14 0 5,062 Commodity Swaps Assets 6,663 3,087 3,576 0 6,663 Liabilities 3,205 0 0 3,205 3,205 25,813 18,876 3,732 3,205 25,813 VIOHALCO | ANNUAL REPORT 2021 177 Carrying amount Amounts in EUR thousands at 31 December 2020 1-6 months 6-12 months More than 1 year 31 December 2020 Interest rate Swaps Liabilities 1,026 0 0 1,026 1,026 Forwards Assets 1,619 1,576 43 0 1,619 Liabilities 516 466 51 0 516 Future contracts Assets 5,188 3,984 1,139 64 5,188 Liabilities 4,583 4,591 -8 0 4,583 12,932 10,617 1,225 1,090 12,932 The table below provides information about the items designated as cash ow hedging instruments during the year and also as at 31 December 2021 and the reconciliation of hedging reserve. Based on their nature, hedging instruments are included in Derivatives assets and Derivatives liabilities in consolidated statement of nancial position. 2021 Changes in the Amount value of the reclassied Eect of hedging from movement Balance Balance 1 instrument hedging in 31 Nominal January recognised reserve to Other exchange December Amounts in EUR thousands Amount Carrying amount 2021 in OCI prot or loss movements rates 2021 Assets Liabilities Forward foreign exchange contracts 101,239 760 -2,071 1,103 -1,461 -1,079 0 127 -1,311 Future contracts 86,383 7,670 -5,062 605 2,843 -634 -230 25 2,608 Interest rate swap contracts 21,300 0 -382 -1,026 0 0 644 0 -382 Commodity swap contracts 28,886 6,663 -3,205 0 3,458 0 0 0 3,458 237,807 15,093 -10,720 682 4,839 -1,713 414 152 4,373 2020 Changes in the Amount value of the reclassied Eect of hedging from movement Balance Balance 1 instrument hedging in 31 Nominal January recognised reserve to Other exchange December Amounts in EUR thousands Amount Carrying amount 2020 in OCI prot or loss movements rates 2020 Assets Liabilities Forward foreign exchange contracts 50,197 1,619 -516 72 693 218 0 120 1,103 Future contracts 51,344 5,188 -4,583 -2,537 1,481 1,639 0 21 605 Interest rate swap contracts 21,300 0 -1,026 -172 0 0 -853 0 -1,026 122,841 6,807 -6,125 -2,637 2,174 1,857 -853 141 682 (d) Commodity price risk The commodity markets experience continuous price uctuations. Viohalco companies minimize their exposure to commodity price volatility by using hedging instruments, when possible. Viohalco companies are exposed to the uctuation of aluminium, copper, zinc, lead and nickel. In order to minimize the eect of the metal price uctuations on their results, companies use back to back matching of purchases and sales or derivative instruments (future contracts). VIOHALCO | ANNUAL REPORT 2021 178 As at 31 December 2021, the derivative net balance of future contracts per commodity as reported in the statement of nancial position is: Amounts in EUR thousands 2021 2020 Aluminium 975 2,828 Copper 1,658 -2,162 Lead -25 -58 Nickel 0 -4 Total 2,608 605 In addition, during 2021, Viohalco subsidiaries started using Commodity Swaps referenced on the Title Transfer Facility (TTF) prices to hedge the risk of uctuations in natural gas prices from market conditions. As at 31 December 2021, the derivative net balance these contracts as reported in the statement of nancial position is EUR 4.6 million. These hedges are designated in a cash ow hedge accounting relationship. C.4. Business and Operational Risk Management There were no changes in Viohalco companies’ business and operational risk management objectives and policies during 2021. Viohalco companies follows closely and continuously both international and domestic developments and timely adapt their business strategy and risk management policies in order to minimize the operational impact of macroeconomic conditions. 31. Impact of Covid-19 pandemic The Covid-19 pandemic has had a limited impact on the nancial performance of Viohalco companies during 2021. The health and safety of Viohalco companies’ employees is of the highest priority for the Executive Management, which continues to closely monitor the situation, observing national and local authority guidelines and ensuring an undisrupted supply chain. Since the beginning of the Covid-19 outbreak, Viohalco Management has put in place a multi-faceted action plan to mitigate negative eects and focusing on the following pillars: • Workforce protection, to avoid production interruptions; • Operational stability and customer engagement; • Continuity of the supply chain; • Sucient liquidity; • Commercial resilience (both sales & orders). The measures introduced were successfully implemented at all sites, and until now all the production plants are in undisrupted operation. Production continuity was maintained, while health and safety measures were enforced. Raw material supply was safeguarded and companies faced no shortage whatsoever in all critical inputs. The net incremental costs - including any reliefs provided by local legislation because of measures taken due to the pandemic - incurred due to the coronavirus outbreak amounted to EUR 1,449 thousand (2020: EUR 4,837 thousand). Such cost includes temporary premium payments to compensate employees for performing their normal duties at increased personal risk, charges for cleaning and disinfecting facilities more thoroughly and more frequently, medical equipment, nursery sta and other expenses directly associated with the coronavirus Covid-19 pandemic. VIOHALCO | ANNUAL REPORT 2021 179 32. Subsidiaries Viohalco’s subsidiaries and the percentages of nancial interest held by the parent company at the end of the reporting period are as follows: Subsidiary companies Country Financial interest 2021 Financial interest 2020 AEIFOROS S.A. GREECE 98.11% 98.94% AEIFOROS BULGARIA S.A. BULGARIA 98.11% 98.94% ALURAME SPA ITALY 91.59% 93.45% ANOXAL S.A. GREECE 84.78% 91.44% AΝΑΜΕΤ DOO SERBIA 97.54% 98.62% AΝΑΜΕΤ S.A. GREECE 97.54% 98.62% AΝΤΙΜΕΤ S.A. GREECE 100.00% 100.00% AΤΤΙΚI S.A. GREECE 75.00% 75.00% BASE METALS S.A. TURKEY 69.15% 70.55% BRIDGNORTH LTD U.K. 75.00% 75.00% CABLEL WIRES S.A. GREECE 84.78% 91.44% CENERGY HOLDINGS S.A. BELGIUM 79.78% 79.78% HELLENIC CABLES AMERICA CO. USA 79.78% - CLUJ INTERNATIONAL TRADE SRL ROMANIA 91.59% 100.00% CORINTH PIPEWORKS S.A. GREECE 79.78% 79.78% CPW AMERICA Co USA 79.78% 79.78% DE LAIRE LTD CYPRUS 79.78% 79.78% DIO PERNIK EOOD BULGARIA 98.11% 98.94% DIA.VI.PE.THI.V S.A. GREECE 91.54% 92.92% DOJRAN STEEL LLCOP NORTH MACEDONIA 100.00% 100.00% ELVAL COLOUR S.A. GREECE 84.78% 91.44% ELVAL COLOUR IBERICA S.A. SPAIN 84.78% 91.44% ELVALHALCOR S.A. GREECE 84.78% 91.44% ELVIOK S.A (former ELVALHALCOR CONSULTING SA) GREECE 84.78% 91.44% ELΚΕΜΕ S.A. GREECE 84.40% 90.57% EPIRUS METALWORKS S.A. GREECE 84.78% 91.42% ERGOSTEEL S.A. GREECE 89.12% 91.08% ERLIKON S.A. GREECE 100.00% 100.00% ETEM ALBANIA S.A. ALBANIA 88.79% 100.00% ETEM BULGARIA S.A. BULGARIA 100.00% 100.00% ETEM BG S.A. BULGARIA 88.79% 100.00% ETEM GESTAMP EXTRUSIONS S.A. BULGARIA 51.00% 51.00% EΤΕΜ COMMERCIAL S.A. GREECE 87.82% 100.00% ETEM SCG SERBIA 88.79% 100.00% EΤΕΜ SYSTEMS LLC UKRAINE 88.79% 100.00% EΤΕΜ SYSTEMS SRL ROMANIA 88.79% 100.00% EΤIL S.A. GREECE 100.00% 100.00% FITCO S.A. GREECE - 91.44% FLOCOS S.A. GREECE 100.00% 100.00% FULGOR S.A. GREECE 79.78% 79.78% GENECOS S.A. FRANCE 91.59% 93.45% HELLENIC CABLES S.A. GREECE 79.78% 79.78% HELLENIC CABLES TRADING CO. USA 79.78% 79.78% HUMBEL LTD CYPRUS 79.78% 79.78% ICME ECAB S.A. ROMANIA 79.76% 78.66% INOS BALCAN DOO SERBIA 97.54% 98.62% IWM S.A. BULGARIA - 98.94% INTERNATIONAL TRADE S.A. BELGIUM 91.59% 93.45% JOSTDEX LIMITED CYPRUS 100.00% 100.00% LESCO ROMANIA S.A. ROMANIA 51.86% 51.86% LESCO EOOD BULGARIA 79.78% 79.78% METAL AGENCIES LTD U.K. 91.59% 93.45% METALCO S.A. BULGARIA 100.00% 100.00% METALIGN S.A. BULGARIA 100.00% 100.00% VIOHALCO | ANNUAL REPORT 2021 180 Subsidiary companies Country Financial interest 2021 Financial interest 2020 METALLOURGIA ATTIKIS S.A. GREECE 50.00% 50.00% METALLOURGIA ATTIKIS PROPERTIES S.A. GREECE 50.00% - NOVAL PROPERTY REIC GREECE 87.29% 87.34% NOVOMETAL DOO NORTH MACEDONIA 97.54% 98.62% PORT SVISHTOV WEST S.A. BULGARIA 73.09% 73.09% PRAKSIS S.A. GREECE 61.00% 61.00% PRAKSIS BG S.A. BULGARIA 61.00% 61.00% REYNOLDS CUIVRE S.A. FRANCE 91.59% 93.45% ROULOC S.A. GREECE 84.78% 91.44% SIDEBALK STEEL DOO SERBIA 100.00% 100.00% SIDENOR INDUSTRIAL S.A. GREECE 100.00% 100.00% SIDERAL SHRK ALBANIA 99.92% 99.95% SIDEROM STEEL SRL ROMANIA 100.00% 100.00% SMARTREO PYT LTD AUSTRALIA - 99.00% SOFIA MED AD BULGARIA 86.37% 92.33% SOVEL S.A. GREECE 92.95% 92.95% STEELMET CYPRUS LTD CYPRUS 89.12% 91.08% STEELMET PROPERTIES S.A. GREECE 89.12% 91.08% STEELMET ROMANIA S.A. ROMANIA 91.59% 93.45% STEELMET S.A. GREECE 89.12% 91.08% STOMANA INDUSTRY S.A. BULGARIA 100.00% 100.00% STOMANA ENGINEERING SA (former SIGMA IS SA) BULGARIA 100.00% 100.00% SYMETAL S.A. GREECE 84.78% 91.44% TECHOR S.A. GREECE 84.78% 91.44% TECHOR ROMANIA S.A. ROMANIA 84.78% 91.44% TEPROMKC AG GERMANY 91.59% 93.45% TERRA MIDDLE EAST AG GERMANY 91.59% 93.45% TΕΚΑ SYSTEMS S.A. GREECE 85.72% 50.01% VEPAL S.A. GREECE 84.78% 91.44% VIENER S.A. GREECE 93.70% 96.46% VIEXAL S.A. GREECE 95.94% 97.72% VIOMAL S.A. GREECE 63.58% 68.58% VITRUVIT S.A. GREECE 99.75% 99.86% WARSAW TUBULARS TRADING SP.ZO POLAND 79.78% 79.78% The ultimate controlling entity is Viohalco S.A. for all the above entities. Viohalco does exercise control, by holding the majority of the voting rights, directly and/or indirectly and these entities are reported as subsidiary companies. The percentages reported on the above table represent the nancial interest held directly and indirectly by Viohalco. For example, if Viohalco holds 70% of company A and company A holds 70% of company B, then in the table above it will be presented that Viohalco holds 49% of nancial interest in company B. Transactions that took place in 2021 Acquisition of NCI • During 2021, Viohalco acquired further 26,78% of its subsidiary Teka Systems share capital, in consideration of EUR 7.5 million and after the cancellation of Teka System own shares, the percentage of participation was formed at 85.72% (31 December 2021: 50.01%). Increase of NCI • In April 2021, Viohalco has completed the placement of 25 million shares of its subsidiary ElvalHalcor, representing the 6.66% of the company’s share capital, in consideration of EUR 50 million. Following the aforementioned placement, Viohalco’s participation in ElvalHalcor paid up share capital amounts to 84.78%, decreased from 91.44%. Mergers & Absorptions • In July 2021, Viohalco subsidiary Fitco was absorbed by ElvalHalcor. New subsidiaries establishment • In December 2021, a new Greek based subsidiary, Mettalourgia Attikis Properties, was established of after the partial spin o of Real Estate activity of Metallourgia Attikis SA, operating in the Real Estate segment. VIOHALCO | ANNUAL REPORT 2021 181 • In December 2021, the subsidiary Hellenic Cables America Co. was renamed to Hellenic Cables Trading Co. • During 2021, Viohalco, established C-Energy Americas Co., a wholly owned subsidiary in the USΑ. On January 6, 2022, the subsidiary C-Energy Americas Co. was renamed to Hellenic Cables Americas Co. Other major transactions • In January 2021, the Board of Directors of ElvalHalcor granted a special permission for the conclusion of a transaction with a related party, to fully cover the share capital increase of " Etem Commercial S.A." of a total amount of EUR 24,316,420. After the transaction the direct holding percentage of Viohlaco to Etem Commercial S.A. was formed at 20%. • In February 2021, the share capital increase of EUR 18.8 million of Viohalco Subsidiary Etem BG S.A. was completed, that was entirely covered by Viohalco subsidiary Etem Commercial S.A., following the decision of Etem BG. S.A. General meeting on 31.12.2020. After the transaction the direct holding percentage of participation of Etem Commercial to Etem BG S.A. was formed at 92%. 33. Joint operations Viohalco’s subsidiary Hellenic Cables has a 62.48% interest in a joint arrangement called VO Cablel VOF, which was set up as a partnership together with Van Oord. The scope of this joint operation scheme is to supply and install sea and land cables for the Hollandse Kust (South) Alpha project and Hollandse Kust (South) Beta project. The principal place of business of the joint operation is in the Netherlands. Hellenic Cables has a 50.77% interest in a joint arrangement called DEME Oshore NL - Hellenic Cables V.O.F., which was set up as a partnership together with Tideway. The scope of this joint operation scheme is to execute a turnkey contract for the supply and installation of submarine cables for the connection of the Seamade oshore wind project to the Belgian grid. The principal place of business of the joint operation is in Belgium. Viohalco’s subsidiary Fulgor has a 10% interest in a joint arrangement called Fulgor – JDN Consortium, which was set up as a partnership together with Jan De Nul. The scope of this joint operation scheme is to execute a turnkey contract for the installation of submarine cables for the interconnection Crete-Peloponnese in Greece. The principal place of business of this joint operation is in Greece. Fulgor has a 71.09% interest in a joint arrangement called Fulgor – Asso.subsea Ltd Consortium, which was set up as a partnership together with Asso.subsea Ltd. The scope of this joint operation scheme is to execute a turnkey contract for the design, manufacturing, supply and installation of the 150 kV submarine cable system connecting the under construction 330 MW Kareas II Wind Farm to Greece’s mainland grid. The principal place of business of this joint operation is in Greece. The above joint operations were formed during prior years. The agreements in relation to the VO Cablel VOF, Fulgor – JDN Consortium and DEME Oshore NL - Hellenic Cables V.O.F. require unanimous consent from all parties for all relevant activities. The two partners have direct rights to the assets of the partnership and are jointly and severally liable for the liabilities incurred by the partnership. These entities are therefore classied as joint operations and the Group recognises its direct right to the jointly held assets, liabilities, revenues and expenses as described in note 5. 34. Non-controlling interests The following table summarises the information relating to each of the subsidiaries that have material NCI (at sub-group level in the cases of Cenergy, ElvalHalcor, Sidenor) before any intra-group elimination. VIOHALCO | ANNUAL REPORT 2021 182 2021 Intragroup Amounts in EUR thousands Cenergy ElvalHalcor Sidenor Bridgnorth Other eliminations Total NCI percentage 20.22% 15.22% 0.00% 25.00% Non-current assets 549,423 975,185 303,121 77,487 Current assets 646,185 1,107,514 399,056 149,518 Non-current liabilities 244,017 748,752 251,366 6,427 Current liabilities 684,392 647,843 400,441 111,108 Net Assets 267,199 686,104 50,371 109,470 Attributable to NCI by the companies 35 16,724 37,467 0 Net attributable to the equity holders & NCI of Viohalco 267,164 669,380 12,904 109,470 Attributable to NCI by parent Company 54,021 101,880 0 27,368 Carrying amount of NCI 54,056 118,604 37,467 27,368 43,535 -40,060 240,969 Revenue 1,054,203 2,889,696 726,333 322,697 Prot / Loss (-) 20,915 152,622 56,896 -5,829 Other comprehensive income 514 2,508 -170 6,913 Total comprehensive income 21,429 155,130 56,727 1,084 Attributable to NCI by the companies 1 2,560 12,658 0 Net attributable to the equity holders & NCI of Viohalco 21,428 152,569 44,069 1,084 Attributable to NCI by Viohalco 4,333 23,221 0 271 Total OCI of NCI 4,334 25,781 12,658 271 3,825 -20,189 26,681 Cash ows from operating activities 112,514 24,577 33,603 -30,468 Cash ows from investing activities -43,757 -169,242 -14,629 -8,261 Cash ows from nancing activities -20,494 202,003 1,389 41,392 Net increase/ decrease (-) in cash and cash equivalents 48,263 57,339 20,364 2,663 2020 Intragroup Amounts in EUR thousands Cenergy ElvalHalcor Sidenor Bridgnorth Other eliminations Total NCI percentage (at parent company level) 20.22% 8.56% 0.00% 25.00% Non-current assets 529,772 878,333 304,798 72,117 Current assets 473,103 797,393 281,904 91,458 Non-current liabilities 239,816 529,809 293,227 5,468 Current liabilities 517,289 523,993 299,831 49,721 Net Assets 245,770 621,924 -6,356 108,386 Attributable to NCI by the companies 287 10,493 24,809 0 Net attributable to the equity holders & NCI of Viohalco 245,483 611,430 -31,165 108,386 Attributable to NCI by parent Company 49,637 52,338 0 27,097 Carrying amount of NCI 49,923 62,832 24,809 27,097 46,190 -34,922 175,929 Revenue 908,417 2,028,569 469,627 192,064 Prot / Loss (-) 24,376 29,614 -11,994 -196 Other comprehensive income -5,084 2,863 -207 -5,278 Total comprehensive income 19,292 32,477 -12,201 -5,474 Attributable to NCI by the companies -8 1,467 -709 0 Net attributable to the equity holders & NCI of Viohalco 19,300 31,009 -11,492 -5,474 Attributable to NCI by Viohalco 3,903 2,654 0 -1,369 Total OCI of NCI 3,895 4,122 -709 -1,369 3,757 -581 9,114 Cash ows from operating activities 158,575 83,353 18,378 9,634 Cash ows from investing activities -72,182 -123,883 -9,974 -6,351 Cash ows from nancing activities -95,137 25,680 1,560 -3,422 Net increase/ decrease (-) in cash and cash equivalents -8,744 -14,850 9,964 -139 Restated gures due to the retrospective application of change in the method of attributing benet to periods of service (IAS 19) (see Note 5.23) On April 29th 2021, Viohalco has completed the placement of 25 million shares of its subsidiary ElvalHalcor, representing the 6.66% of the company’s share capital, in consideration of EUR 50 million. Following the aforementioned placement, Viohalco’s participation in ElvalHalcor paid up share capital amounts to 84.78%, decreased from 91.44% VIOHALCO | ANNUAL REPORT 2021 183 35. Leases A. Leases as lessee (a) Amounts recognised in the Statement of Financial Position The Consolidated Statement of Financial Position shows the following amounts relating to leases: Right of Use Assets Amounts in EUR thousands 31 December 2021 31 December 2020 Land 345 367 Buildings 4,091 4,291 Machinery 18,786 23,083 Transportation equipment 10,744 10,665 Other equipment 323 92 Total Right-of-use assets 34,288 38,498 Lease liabilities Amounts in EUR thousands 31 December 2021 31 December 2020 Current lease liabilities 10,696 10,935 Non-current lease liabilities 34,639 41,276 Total lease liabilities 45,335 52,211 Additions to the right-of-use assets during 2021 were EUR 6,276 thousands (2020: EUR 7,414 thousands). (b) Amounts recognised in the Statement of prot or loss The statement of prot or loss includes the following amounts relating to leases: Amounts in EUR thousands 2021 2020 Depreciation charge of right-of-use assets Plots 37 38 Buildings 911 843 Machinery 2,926 2,833 Transportation means 4,509 4,676 Other equipment 135 60 Total 8,518 8,450 Interest expense (included in nance cost) 2,076 2,374 Variable rental fees 730 1,131 Low value rental fees 461 362 Short term rental fees 4,111 3,956 Total 7,378 7,823 B. Leases as lessor Viohalco and its companies in the real estate development sector lease out their investment properties (See note 19). (a) Future minimum lease collections At 31 December, the future minimum lease payments under non-cancellable leases were as follows. Amounts in EUR thousands 2021 2020 Less than one year 16,658 15,001 Between one and two years 14,942 14,224 Between two and three years 14,551 10,897 Between three and four years 14,321 10,003 Between four and ve years 12,955 9,400 More than ve years 79,110 45,709 Total 152,537 105,234 VIOHALCO | ANNUAL REPORT 2021 184 (b) Amounts recognized in prot or loss The gures below are related to investment property that has been recognised in the statement of prot or loss. Operating expenses relate mainly to maintenance cost. Amounts in EUR thousands 2021 2020 Rental income from investment property 11,472 10,041 Direct operating expenses that do not generate rental income -61 -443 36. Commitments A. Purchase commitments The below mentioned commitments relate to contracts that Viohalco’s subsidiaries have entered into, according to their investment plans and are expected to be concluded during the next 3 years. Amounts in EUR thousands 2021 2020 Property, plant and equipment 20,383 19,308 Investment property 953 8,800 Intangible Assets 58 16 B. Guarantees Amounts in EUR thousands 2021 2020 Liabilities Guarantees to secure liabilities to suppliers 35,172 27,675 Guarantees for securing the good performance of contracts with customers 238,306 264,901 Guarantees for securing the good performance of contracts with suppliers 2,141 415 37. Contingent liabilities A. Litigations & administrative reviews Regarding Viohalco subsidiary, Corinth Pipeworks’ exports of large diameter welded pipe (LDWP) to the US for the periods April 2020 - April 2021 and April 2021 - April 2022, additional administrative reviews from the US Department of Commerce (DoC) are expected. Νo provision has been recorded in respect to these administrative reviews due to the following facts: • For the period April 2020 - April 2021 there were no sales to the US subject to antidumping duties; thus, no additional charge is expected for that period. • For the period April 2021 - April 2022 sales to the US subject to antidumping duties were not material. The outcome of such administrative review is considered as highly volatile and hard to predict, thus the amount of any arising liability cannot be reasonably estimated. B. Contigent tax liabilities The tax lings of the subsidiaries are routinely subjected to audit by tax authorities in most of the jurisdictions in which Viohalco and its companies conduct business. These audits may result in assessments of additional taxes. Viohalco and its subsidiaries provide for additional tax in relation to the outcome of such tax assessments, to the extent that a liability is probable and estimable. Viohalco companies believe that their accruals for tax liabilities are adequate for all open tax years based on their assessment of underlying factors, including interpretations of tax law and prior experience. VIOHALCO | ANNUAL REPORT 2021 185 38. Related parties A. Equity-accounted investees and other related parties The following transactions have been made with equity-accounted investees and other related parties. Amounts in EUR thousands 2021 2020 Sale of goods/ services Associates 96,281 61,380 Joint ventures 34,516 22,946 130,798 84,326 Sale of xed assets Joint ventures 198 9,898 198 9,898 Purchases of goods / services Associates 10,639 7,067 Joint ventures 2,335 2,530 12,974 9,596 Purchase of xed assets Associates 13,351 23 Joint ventures 26 0 13,377 23 Closing balances that arise from sales/purchases of goods, services, xed assets, etc.: Amounts in EUR thousands 2021 2020 Receivables from related parties Associates 37,625 31,118 Joint ventures 10,025 13,407 47,651 44,525 Contract assets to related parties Associates 90 40 Joint ventures 42 0 132 40 Liabilities to related parties Associates 3,543 5,165 Joint ventures 1,263 1,319 4,806 6,485 Contract liabilities to related parties Joint ventures 8 37 8 37 The outstanding balances from related parties are secured and the settlement of those balances is expected to be performed in cash during the following year, since the balances concern only short-term receivables and payables. Services to and from related parties as well as sales and purchases of goods are carried out in accordance with the price lists applying to non-related parties. During 2021, services of EUR 180 thousand (2020: EUR 180 thousands) acquired from entities that are controlled by members of the key management personnel. VIOHALCO | ANNUAL REPORT 2021 186 B. Key management personnel compensation The table below provides an overview of the transactions with Board members and executive management: Amounts in EUR thousands 2021 2020 Compensation to BoD members and executives 5,430 5,652 The compensation to directors and executive management in the table above are xed compensation. No variable compensation, post-employment benets or share based benets were paid in 2021 and in 2020. 39. Auditor’s fees The Company’s statutory auditor (PwC Reviseurs d’Entreprises SRL/ Bedrijfsrevisoren BV) and a number of other member rms of the auditor’s network, received fees for the following services: For year ended 31 December Amounts in EUR thousands 2021 2020 Statutory Auditor Audit 366 296 Tax related services 73 0 439 296 Statutory Auditor Network Audit 952 1,212 Tax related services 201 16 Other services 232 19 1,385 1,248 Total 1,824 1,543 VIOHALCO | ANNUAL REPORT 2021 187 40. Subsequent events - On January 13th, 2022, Viohalco subsidiary, ElvalHalcor, participated in the share capital increase of the joint venture NedZink BV with EUR 1.5 million, maintaining its share to 50%. In addition, on February 28th, 2022, the loan balance of EUR 1.25 million was converted to share capital. - On February 8th, 2022, the US Department of Commerce (DoC) published its nal results in the administrative proceedings conducted by the DoC for the period from April 19, 2019 through April 30, 2020 (“POR”) in connection with an antidumping (“AD”) order on large diameter welded pipe (LDWP) from Greece. As a result, the DoC determined for the POR an antidumping duty rate of 41.04 percent based on total adverse facts available (AFA) for mandatory respondent Corinth Pipeworks, Viohalco steel pipes segment. Despite the lengthy process of the administrative review involving the supply of extremely detailed data sets on Corinth Pipeworks’ commercial practices for the POR under scrutiny, as well as all reasonable estimations made throughout 2021 on the size, if any, of a possible AD duty rate, the DoC concluded on such a high AD duty rate. Corinth Pipeworks intends to le an appeal before the U.S. Court of International Trade against the decision of the DoC while continuing to actively work with the DoC in order to reverse the nal determination. Viohalco considers that there will be no material impact on the business of its subsidiary Corinth Pipeworks, as the latter strongly follows a geographically diversied commercial policy and the USA market does not presently constitute its core market. The one-o, additional provision charge on Viohalco annual consolidated economic results from a retrospective implementation of the AD duty rate and reaches ca. EUR 12.8 million (USD 14 million plus interest). - The Ukraine conict which began in February 2022 may cause increased market volatility and disruptions to many aspects of global economy during 2022. Although the impact of the crisis on Viohalco subsidiaries cannot be fully predicted, their overall exposure to Ukraine and Russia is limited and the consequences are not expected to have material impact on the business course. Sales exposure to these markets represents an insignicant portion of total turnover and any loss will be fully oset by demand in other markets. In order to mitigate potential disruption in supply chain, Viohalco companies have already initiated shifting the supply of raw materials currently sourced from Russia to alternative markets. In terms of nancing, the companies have no exposure to Russian banks though they may see some impact on credit and transportation insurance. Finally, although the conict in Ukraine has accelerated global energy crisis already experienced since the second half of 2021, Viohalco’s companies had already taken mitigating actions to reduce the business impact. Viohalco and its companies are monitoring the situation closely and will modify their approach when it is required. - On March 17th, 2022, Viohalco’s Board of directors decided to propose to the Ordinary General Shareholders’ meeting to be held on 31.05.2022, the approval of a gross dividend of EUR 0.10 per share. Taking into account the gross interim dividend of EUR 0.01 per share paid in June 2021, a balance gross amount of EUR 0.09 per share will be payable following approval by the shareholders’ meeting of this proposed resolution. - On March 17th, 2022, Viohalco’s Board of directors approved the acquisition of 25% non-controlling interest in subsidiary Bridgnorth Aluminium in consideration of GBP 11 million. As a result, Viohalco’s participation in Bridgnorth Aluminium amounts to 100%. There are no other subsequent events aecting the consolidated nancial statements. VIOHALCO | ANNUAL REPORT 2021 188 VIOHALCO | ANNUAL REPORT 2021 189 VIOHALCO | ANNUAL REPORT 2021 190 Auditor’s Report on the Consolidated Financial Statements STATUTORY AUDITOR'S REPORT TO THE GENERAL SHAREHOLDERS’ MEETING OF VIOHALCO 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 Viohalco 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. 28 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 Unqualied 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 statement of profit or loss, the consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows 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 EUR 5,238,420 thousands and a profit attributable to owners of the company of EUR 194,994 thousands. In our opinion, the consolidated accounts give a true and fair view of the Group’s net equity and consolidated nancial position as at 31 December 2021, and of its consolidated nancial performance and its consolidated cash ows 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 unqualied 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 fullled 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 ocials the explanations and information necessary for performing our audit. We believe that the audit evidence we have obtained is sucient and appropriate to provide a basis for our opinion. Key audit matters Key audit matters are those matters that, in our professional judgment, were of most signicance in our audit of the consolidated accounts of the current period. These matters were 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 these matters. Key audit matter 1: Availability of nancing resources and compliance with covenants Description of the Key Audit Matter The subsidiaries of the Group have signicant non-current and current nancial debts. The terms and conditions of the related nancing agreements often include nancial covenants that are to be complied with at each balance sheet date. Any breach in such nancial covenants could result in its lenders exercising the right to claim early repayment of certain non-current and/or current nancial debts. For these reasons, we considered the availability of nancing resources and failure to comply with covenants as most signicant to our audit. Reference is made to Note 5: Signicant accounting policies: Financial instruments and Note 26: Loans and Borrowings. How our Audit addressed the Key Audit Matter Our testing included, amongst others, an understanding of the nancing agreements and the Group’s procedures and controls in place both to ensure its compliance with the nancial covenants and to understand the used and unused nancing resources. We tested the calculation, performed by Management, of the nancial VIOHALCO | ANNUAL REPORT 2021 191 covenants related to the most signicant nancing agreements and assessed compliance with the terms and conditions stipulated therein. Furthermore, we evaluated both the presentation of the nancial debts on the Consolidated Statement of Financial Position and the adequacy of the relevant disclosures in the Notes to the Consolidated Financial Statements. We found the tested nancial covenants to be complied with and company’s disclosures of nancial debts appropriate. Key audit matter 2: Impairment of property, plant and equipment Description of the key audit matter The carrying value of the Group’s property, plant and equipment amounts to EUR 2,089,107 housands at 31 December 2021. In accordance with the International Financial Reporting Standards as endorsed by the EU (IFRS), the Company is required to perform an impairment assessment in respect of the property, plant and equipment when triggers for impairment are identified. We consider this matter to be of most significance to our audit because of the magnitude of the amount and because the determination of whether or not an impairment charge is necessary involves significant judgement in estimating the future results of the business. Reference is made to Note 17: Property, plant and equipment. How our audit addressed the key audit matter We evaluated the appropriateness of the Group’s accounting policies and assessed compliance with the policies in accordance with IFRS. In addition, we evaluated management’s impairment assessment including the identied triggers for impairment and challenged impairment calculations by assessing the future cash ow forecasts used in the models, and the process by which they were drawn up, including comparing them to the latest budgets provided by management. We challenged, amongst others, the following: • Assumptions used in the Group’s budget and internal forecasts and the long-term growth rates by comparing them to economic and industry forecasts; • The discount rate by assessing the cost of capital and other inputs including benchmarking with comparable organisations; • The historical accuracy of budgets to actual results to determine whether cash ow forecasts are reliable based on past experience; • The mechanics of the underlying calculations. In performing the above work, we utilized our internal valuation experts to provide challenge and external market data to assess the reasonableness of the assumptions used by management. We evaluated the sensitivity analysis around the key drivers within the cash ow forecasts to ascertain the extent of change in those assumptions and also considered the likelihood of such a movement in those key assumptions arising. Whilst recognizing that cash ow forecasting, impairment modelling and valuations are all inherently judgmental, we concluded that the assumptions used by management were within an acceptable range of reasonable estimates. 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. 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 eciency or eectiveness 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: VIOHALCO | ANNUAL REPORT 2021 192 • 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 sucient 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; • Obtain sucient and appropriate audit evidence regarding the nancial information of the entities or business activities within the Group to express an opinion on the consolidated nancial 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 signicant audit ndings, including any signicant deciencies 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 signicance 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 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 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 specic 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. The non-nancial information required by virtue of article 3:32, §2 of the Companies' and Associations' Code is included in the directors’ report which is part of the section ‘Non-nancial information’ of the annual report. The Company has prepared the non-nancial information, based on the UN’s Sustainable Development Goals (SDG’s) reporting framework. 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-nancial information has been prepared in accordance with the UN’s Sustainable Development Goals (SDG’s) reporting framework as disclosed in the directors’ report on the consolidated accounts. Statement related to independence • Our registered audit rm and our network did not provide services which are incompatible with the statutory audit of the VIOHALCO | ANNUAL REPORT 2021 193 consolidated accounts, and our registered audit rm remained independent of the Group in the course of our mandate. • 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. European Uniform Electronic Format (ESEF) We have also veried, in accordance with the draft standard on the verication of the compliance of the nancial 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 nancial statements in the form of an electronic le in ESEF format (hereinafter “digital consolidated nancial statements”) included in the annual nancial report. Our responsibility is to obtain sucient appropriate evidence to conclude that the format and marking language of the digital consolidated nancial 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 nancial statements included in the annual nancial report of Viohalco SA per 31 December 2021 comply in all material respects with the ESEF requirements under the Delegated Regulation. Other statements • This report is consistent with the additional report to the audit committee referred to in article 11 of the Regulation (EU) N° 537/2014. Diegem, 20 April 2022 The statutory auditor PwC Reviseurs d'Entreprises SRL / PwC Bedrijfsrevisoren BV Represented by Marc Daelman Réviseur d’Entreprises / Bedrijfsrevisor VIOHALCO | ANNUAL REPORT 2021 194 M. Declaration of responsible persons Statement on the true and fair view of the consolidated nancial statements and the fair overview of the management In accordance with the article 12, §2, 3° of the Belgian Royal Decree of 14 November 2007, the members of the Executive Management, (i.e. Evangelos Moustakas, Ippokratis Ioannis Stassinopoulos, Efstratios Thomadakis, Panteleimon Mavrakis) declare that, on behalf and for the account of the Company, to the best of their knowledge: a) the consolidated nancial statements for the year ended 31 December 2021, which have been prepared in accordance with the International Financial Reporting Standards as adopted by the European Union, give a true and fair view of the Equity, Financial position and Financial Performance of the Company, and the entities included in the consolidation as a whole. b) the management report on the consolidated nancial statements includes a fair overview of the development and performance of the business and the position of the Company, and the entities included in the consolidation, together with the description of the main risks and uncertainties with which they are confronted. VIOHALCO | ANNUAL REPORT 2021 195 In accordance with BCCA (Articles 3:17 and 3:36), the Company’s annual accounts are presented hereafter in a condensed version, which does not include all the notes required by law or the Statutory Auditor’s report. The full version of the Company’s annual accounts that shall be deposited with the National Bank of Belgium, is available on the Company’s website and can be obtained free of charge upon request. The Statutory Auditor’s report on the annual accounts was unqualied. N. Condensed Statutory Balance Sheet and Income Statement Statement of nancial position As at 31 December Amounts in EUR thousands 2021 2020 Non- current assets 1,174,218 1,096,826 Start-up costs 0 57 Intangible assets 7 11 Tangible assets 18,625 19,083 Financial assets 1,153,373 1,075,462 Non-current receivables 2,214 2,214 Current assets 73,533 28,086 Current receivables 2,433 6,115 Short-term cash investment 65,000 20,000 Cash and cash equivalents 5,271 1,101 Accruals and deferred income 829 870 Total assets 1,247,751 1,124,912 Equity 1,216,931 1,117,479 Share capital 141,894 141,894 Share premium 528,113 528,113 Translation reserve 21,054 21,054 Other reserves 389,365 389,365 Retained earnings 136,506 37,053 Liabilities 30,820 7,434 Non-current payables 0 72 Current payables 30,451 7,032 Accrued charges and deferred income 368 330 Total equity and liabilities 1,247,751 1,124,912 VIOHALCO | ANNUAL REPORT 2021 196 Statement of Prot or Loss For the year ended 31 December Amounts in EUR thousands 2021 2020 Sales and services 761 435 Operating charges -7,337 -5,673 Services and other goods -4,971 -3,661 Remuneration, social security and pensions -1,155 -1,043 Depreciation and amounts written o on start-up costs, intangible and tangible assets -216 -413 Other operating charges -994 -556 Operating prot (loss) -6,576 -5,239 Finance income 143,464 17,407 Income from nancial assets 122,475 14,022 Income from current assets 139 33 Non-recurring nancial income 20,851 3,352 Finance charges -6,717 -2,125 Debt charges -4 -46 Other nancial expenses -95 -2 Non-recurring nancial charges -6,618 -2,077 Prot for the year before income taxes 130,171 10,042 Income tax expense -4,800 -1,499 Prot/Loss (-) 125,371 8,544 VIOHALCO | ANNUAL REPORT 2021 197 The following explanations are intended to assist the general reader to understand certain terms used in this Annual Report. The denitions set out below apply throughout the annual report, unless the context requires otherwise. ASTM American Society for Testing and Material BCCΑ the Belgian Code of Companies and Associations Board of the Board of Directors of the Company from Directors or time to time appointed in accordance with the Board Articles of Association BS British Standards DIN Deutsches Institut für Normung EN European Norm ISO 17025 General requirements for the competence of testing and calibration laboratories FSMA Financial Services and Market Authority, which succeeded the Belgian Banking, Finance and Insurance Commission as the nancial regulatory agency for Belgium on 1 April 2011 Gross annual the gross annual return is calculated on the return share price it equals to (change in price from January 1 to 31 December/share price on January) HVAC & R Heating, ventilation, air-conditioning and refrigeration IAS International Accounting Standards IFRS International Financing Reporting Standards, as adopted by the EU JIS Japanese Industrial Standards LSAW Longitudinal Submerged Arc Welded Mill for the production of high-strength oshore and onshore energy pipes SD Trade Mark THN Mining proles Transparency the law of 2 May 2007 on the disclosure of Law signicant shareholdings in issuers whose securities are admitted to trading on a regulated market HFW high frequency induction welding unit HSAW helically submerged arc welding unit ERP application Enterprise resource planning application SBQ Special bar quality steel REIC Real Estate Investment Company PMO Project Management Oce LV, MV & HV Low Voltage -Medium Voltage –Hi Voltage power cables cables UPN European Standard channels The annual report, the full versions of the statutory and consolidated annual accounts, as well as the audit reports regarding said annual accounts are available on the website (www.viohalco.com) O. Glossary VIOHALCO | ANNUAL REPORT 2021 198 VIOHALCO | ANNUAL REPORT 2021 199 VIOHALCO | ANNUAL REPORT 2021 200 www.viohalco.com Viohalco S.A. Viohalco S.A. – Greek Branch 30 Marnix Avenue, 16 Himaras Street, 1000 Brussels, 151 25 Maroussi, Athens Belgium Greece Belgium tel: Greece tel: (+32) 2 224 09 11 (+30) 210 6861 111 549300U0BOLVY36TGJ312021-12-31549300U0BOLVY36TGJ312020-12-31549300U0BOLVY36TGJ312021-01-012021-12-31549300U0BOLVY36TGJ312020-01-012020-12-31549300U0BOLVY36TGJ312020-12-31ifrs-full:IssuedCapitalMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:IssuedCapitalMember549300U0BOLVY36TGJ312021-12-31ifrs-full:IssuedCapitalMember549300U0BOLVY36TGJ312020-12-31ifrs-full:SharePremiumMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:SharePremiumMember549300U0BOLVY36TGJ312021-12-31ifrs-full:SharePremiumMember549300U0BOLVY36TGJ312020-12-31ifrs-full:OtherReservesMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:OtherReservesMember549300U0BOLVY36TGJ312021-12-31ifrs-full:OtherReservesMember549300U0BOLVY36TGJ312020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300U0BOLVY36TGJ312021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300U0BOLVY36TGJ312020-12-31ifrs-full:RetainedEarningsMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:RetainedEarningsMember549300U0BOLVY36TGJ312021-12-31ifrs-full:RetainedEarningsMember549300U0BOLVY36TGJ312020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300U0BOLVY36TGJ312021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300U0BOLVY36TGJ312020-12-31ifrs-full:NoncontrollingInterestsMember549300U0BOLVY36TGJ312021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember549300U0BOLVY36TGJ312021-12-31ifrs-full:NoncontrollingInterestsMember549300U0BOLVY36TGJ312019-12-31ifrs-full:IssuedCapitalMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:IssuedCapitalMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:IssuedCapitalMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:IssuedCapitalMember549300U0BOLVY36TGJ312019-12-31ifrs-full:SharePremiumMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:SharePremiumMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:SharePremiumMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:SharePremiumMember549300U0BOLVY36TGJ312019-12-31ifrs-full:OtherReservesMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:OtherReservesMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:OtherReservesMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:OtherReservesMember549300U0BOLVY36TGJ312019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300U0BOLVY36TGJ312019-12-31ifrs-full:RetainedEarningsMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:RetainedEarningsMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:RetainedEarningsMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:RetainedEarningsMember549300U0BOLVY36TGJ312019-12-31ifrs-full:EquityAttributableToOwnersOfParentMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:EquityAttributableToOwnersOfParentMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300U0BOLVY36TGJ312019-12-31ifrs-full:NoncontrollingInterestsMemberifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:NoncontrollingInterestsMemberifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31ifrs-full:NoncontrollingInterestsMember549300U0BOLVY36TGJ312020-01-012020-12-31ifrs-full:NoncontrollingInterestsMember549300U0BOLVY36TGJ312019-12-31ifrs-full:PreviouslyStatedMember549300U0BOLVY36TGJ312019-12-31ifrs-full:FinancialEffectOfChangesInAccountingPolicyMember549300U0BOLVY36TGJ312019-12-31iso4217:EURiso4217:EURxbrli:shares
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