ANNUAL REPORT 2021

Annual report 2021 Železiarne Podbrezová a.s. 72 20 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 2020 31 Dec 2021 31 Dec 2020 Obligations under finance leases Due within 1 year inclusive 2 275 623 1 599 859 1 555 512 1 555 512 Due from 1 to 5 years inclusive 3 731 747 3 837 488 3 691 466 3 691 466 Due after 5 years 6 384 724 4 715 947 2 354 280 2 354 280 12 392 094 10 153 294 7 601 258 7 601 258 Less: unrealised financial expenses (2 539 985) (2 552 036) n/a n/a Present value of obligations under financial leases 9 852 109 7 601 258 7 601 258 7 601 258 Less: Principal value due within 1 year inclusive (recorded in current loans and borrowings) (1 555 512) (1 555 512) Principal value due in over 1 year (recorded in non-current loans and borrowings) 6 045 746 6 045 746 Inaccordance with internal policies,theCompany leasescertain production equipment underfinance leasecontracts (seeNote5). Theaverage lease term is 8 years. For the year ended 31 December 2021, the average effective interest rate was 1.71%. The interest rates are fixed as at the date of the contract, and hence the Company is exposed to the risk that the fair value of interest rates will change. All leases have fixed payments and no agreements weremade 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 2021 31 Dec 2020 Deferred income on subsidies (Note 25) 3 891 329 3 159 588 Other 110 164 85 170 Total 4 001 493 3 244 758 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 onthe definedtermsalsotoregular service loyaltybonusesforyearswiththeCompany,and jubilee bonuses. As at 31 December 2021, the programme was applicable to 3 290 employees (31 December 2020: 3 287) of the Group. As of the aforementioned date, the programme was unfunded, i.e. no specific assets were determined to cover liabilities arising from the scheme. 31 Dec 2021 31 Dec 2020 Present value of retirement benefits 8 132 429 7 656 448 Present value of length - of - service benefits 1 242 519 944 715 Present value of jubilee benefits 194 053 200 319 Total 9 569 001 8 801 482 Key assumptions used in actuarial valuation: 31 Dec 2021 Annual future 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. 17 PROVISIONS Warranties Litigations Other Total 2021 Total 2020 Balance at 1 Jan 101 693 501 046 - 602 739 910 643 Provisions created during the year - 305 077 25 887 330 964 4 717 Use/reversal of a provision during the year (638) (4 717) - (5 355) (312 621) Balance at 31 Dec 101 055 801 406 25 887 928 348 602 739 The provisions are included in liabilities as follows: Current liabilities (included in trade and other payables) Non-current liabilities Total As at 31 Dec 2020 26 717 576 022 602 739 As at 31 Dec 2021 52 964 875 384 928 348 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 (IN EUROS)