ANNUAL REPORT 2020

Železiarne Podbrezová a.s. ANNUAL REPORT 2020 63 19 Interest rates of loans and borrowings: EUR - Fixed interest rate 1.10% - 3% EUR - Floating interest rate 1M, 3M, 6M, 12M EURIBOR, EONIA + (0.75% p.a. – 1.75% p.a.) CZK - Floating interest rate PRIBOR + 0.75% p.a. USD - Fixed interest rate 3.00% USD - Floating interest rate 12M LIBOR + 1.00% p.a. PLN - Fixed interest rate 0% The fair value of loans and borrowings approximates their carrying amount. The fair value represents cash flows discounted with the interest rate that, according to the assumption of the Group’s management, may be collected on the reporting date. As at 31 December 2020, the Group had the amount of EUR 32 420 thousand in the form of undrawn loan commitments in respect of which all the conditions for drawing have been fulfilled. The Group’s management has been in contact with the financing banks regarding compliance with the requirements resulting from thesigned loan agreements. Given the fact that based on the reported 2020 operating results, the Company was unable to comply with the financial covenants as at 31 December 2020 under the loan agreements, the financing banks granted the Company an exemption from non - compliance as at 31 December 2020, and thus waived all their rights under the existing loan agreements in this respect. Issued bonds in the amount of EUR 4 900 thousand bore interest at 3% p.a. and were paid in February 2020. Obligations under finance leases Obligations under finance leases are payable as follows: Minimum lease payments Present value of minimum lease payments 31 Dec 2020 31 Dec 2019 31 Dec 2020 31 Dec 2019 Obligations under finance leases Due within 1 year inclusive 1 599 859 1 575 471 1 555 512 1 531 308 Due from 1 to 5 years inclusive 3 837 488 4 085 479 3 691 466 3 920 640 Due after 5 years 4 715 947 5 047 983 2 354 280 2 543 546 10 153 294 10 708 933 7 601 258 7 995 494 Less: unrealised financial expenses (2 552 036) (2 713 439) n/a n/a Present value of obligations under financial leases 7 601 258 7 995 494 7 601 258 7 995 494 Less: Principal value due within 1 year inclusive (recorded in current loans and borrowings) (1 555 512) (1 531 308) Principal value due in over 1 year (recorded in non-current loans and borrowings) 6 045 746 6 464 186 In accordance with internal policies, the Group leases certain production equipment under finance lease contracts (see Note 5). The average lease term is 9 years. For the year ended 31 December 2020, the average effective interest rate was 1.81%. The interest rates are fixed as at the date of the contract, and hence the Group is exposed to the risk that the fair value of interest rates will change. All leases have fixed payments and no agreements were made on contingent future lease payments. The obligations under finance leases are denominated in euros. The Group’s obligations under finance leases are secured by ownership rights of the lessor to the leased assets. 15 OTHER FINANCIAL AND OTHER NON-CURRENT LIABILITIES 31 Dec 2020 31 Dec 2019 Deferred income on subsidies (Note 25) 3 159 588 3 121 170 Other 85 170 77 989 Total 3 244 758 3 199 159 16 PROVISIONS FOR EMPLOYEE BENEFITS In accordance with Slovak,Czech and Italian labour legislation, and in accordance with the Board of Directors’ programme, the Group pays benefits to its employees as described below. The long - term employee benefit scheme is the programme of defined benefits under which employees are entitled to a one - off bonus upon retirement, or disability, and depending on the defined terms also to regular service loyalty bonuses for years with the Company, and jubilee bonuses. As at 31 December 2020, the programme was applicable to 3 287 employees (31 December 2019: 3 324) of the Group. As of the aforementioned date, the programme was unfunded, ie no specific assets were determined to cover liabilities arising from the scheme. 31 Dec 2020 31 Dec 2019 Present value of retirement benefits 7 656 448 8 120 501 Present value of length - of - service benefits 944 715 975 512 Present value of jubilee benefits 200 319 203 064 Total 8 801 482 9 299 077 Key assumptions used in actuarial valuation: 31 Dec 2020 Annualfuture real rate of salary increases 0% - 2.0% Annual employee turnover 1.0% - 9.7% Retirement age 64 years or less, as per applicable legislation To calculate the provision for employee benefits, the Group applied the NBS current average interest rate provided to non - financial entities in the Eurozone. NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (IN EUROS)