ANNUAL REPORT 2021

Annual report 2021 Železiarne Podbrezová a.s. 24 NOTES TO THE SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 (IN EUROS) 25 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 2022 amounting to EUR 17 647 thousand, of which EUR 9 135 thousand is covered by contracts at 31 December 2021. 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 2021, the Company received a pro rata share of emission rights but the Company’s emission production in 2021 exceeded this share. The difference in the amount of EUR 1 587 thousand is recognised in the statement of profit and loss. ŽP has an obligation to surrender emission rights to cover produced emissions. This obligation was fulfilled by surrendering emission rights for the monitored 2021 period in April 2022. 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 2021 amounts to EUR 4 996 thousand. Since the Company’s management believes based on the financial positions of ŽP Informatika s.r.o. and ŽIAROMAT a.s. 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. 33 POST-BALANCE SHEET EVENTS From 31 December 2021 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. The conflict in Ukraine may require the reassessment of assumptions and estimates used in the preparation of the financial statements. They may require significant adjustments to the carrying amount of assets and liabilities in the next financial year. The Company is highly dependent on natural gas supplies and Company management is currently unable to reliably estimate the development of the situation in the near future, or any potential negative impact. The long - term impact may also affect volumes of business transactions, cash flows and profitability of the Company. However, as at the preparation date of these financial statements, the Company continues to meet its liabilities and expects to continue as a going concern. 34 APPROVAL OF SEPARATE FINANCIAL STATEMENTS The separate financial statements were prepared and approved for release on 16 March 2022.