ANNUAL REPORT 2020

Železiarne Podbrezová a.s. ANNUAL REPORT 2020 23 23 32 COMMITMENTS AND CONTINGENCIES 32.1 Environmental matters Management believes that the Company complies with the relevant existing legislation in all material respects. It is not expected that the Company will become liable to make significant payments relating to the environment in the future. 32.2 Capital expenditure The Company prepared a capital expenditure plan for 2021 amounting to EUR 13 652 thousand, of which EUR 9 170 thousand is covered by contracts at 31 December 2020. 32.3 Litigation and potential losses At present, the Company is involved in a number of legal cases and other disputes that have arisen as a result of its ordinary business activities. It is not expected that the disputes will have a significant negative impact, individually or jointly, on the accompanying separate financial statements. In the accompanying separate financial statements, the Company recorded no provisions for litigation as the Company’s management, based on the advice of its legal counsel, believes that the final outcome of the litigation is uncertain. 32.4 Emission rights During 2005, the European Union - widegreenhouse gas emission rights trading scheme came into effect, together with the Act on Emission Rights Trading passed bythe SlovakParliament in orderto implementthe relatedEU Directive inSlovakia. Under this legislation,the Company is required to deliver emission rights to the Slovak Environmental Office to offset actual greenhouse gas emissions. ŽP has opted to recognise the allocated emission rights at a face value. In 2020, the Company received a pro rata share of emission rights but the Company’s emission production in 2020 exceeded this share. The difference in the amount of EUR 304 thousand is recognised in the statement of profit and loss. In 2020, the Company purchased and sold emission rights resulting in a gain of EUR 135 thousand recognised in the income statement. ŽP has an obligation to deliver emission rights to cover produced emissions. This obligation was fulfilled by delivering emission rights for the monitored 2020 period in April 2021. 32.5 Guarantee for loans provided to other entities The Company provided its assets as collateral for the liabilities of joint debtors ŽP Informatika s.r.o. and ŽIAROMAT a.s. arising from a loan agreement with SLSP up to EUR 6 million. The outstanding principal as at 31 December 2020 amounts to EUR 4 786 thousand. Since the Company’s management believes based on the financial positions of ŽP Informatika s.r.o. and ŽIAROMAT a.s., Kalinovo, that the subsidiaries will repay the loans. ŽP recorded no provision in the accompanying separate financial statements. 32.6 Bank guarantees The Company’s liabilities to Graftech Switzerland S.A. arising from the Graphite Electrode Supply Agreement dated 30 November 2017 are secured by a bank guarantee up to a total amount of EUR 1 676 thousand. The Company’s customs debt is secured by a bank guarantee of up to EUR 200 thousand and customs debt from representing third parties by a bank guarantee for the approved guarantor of up to EUR 50 thousand. The Company issued blank promissory notes to secure both guarantees. 33 POST-BALANCE SHEET EVENTS From 31 December 2020 to the preparation date of the financial statements, there were no such events that would have a significant impact on the Company’s assets and liabilities, except for those resulting from the ordinary course of business operations. 34 APPROVAL OF SEPARATE FINANCIAL STATEMENTS The separate financial statements were prepared and approved for release on 18 March 2021. NOTES TO THE SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2020 (IN EUROS)