ANNUAL REPORT 2021

Annual report 2021 Železiarne Podbrezová a.s. 76 24 The Group records currency derivatives as trading instruments with fair value adjustments recorded in the statement of comprehensive income, and as instruments designed as cash flows hedges where changes in fair value are recorded in equity. The carrying amount of cash assets and cash liabilities of the Group denominated in a foreign currency as at the reporting date is as follows: Liabilities Assets 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020 USD 2 601 995 1 157 148 9 160 214 7 938 739 CZK 569 934 156 077 2 601 485 1 805 366 PLN 370 885 822 964 9 779 885 7 590 182 The following table presents the Group’s sensitivity to a 25% increase/decrease in the euro against the US dollar, a 20% increase/decrease in the euro against the Czech crown and Polish zloty. The sensitivity analysis includes monetary items denominated in foreign currencies, and adjusts their translation at the end of the reporting period for the aforementioned change in foreign currency rates. Positive balances indicate an increase in profit and other equity items upon the decrease of the euro against the respective currency. Appreciation of the euro against the respective currency would result in a similar, however opposite impact on profit and other equity items, while the data presented belowwould be negative. USD CZK PLN 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020 31 Dec 2021 31 Dec 2020 Profit or loss 1 639 555 1 695 398 406 310 329 858 1 881 800 1 353 444 To decrease risks resulting from fluctuations in foreign currency exchange rates, the Group uses financial derivatives. Liquidity risk Prudent liquidity risk management implies maintaining sufficient cash with adequate due date and marketable securities, the availability of funding through an adequate amount of committed credit lines, and the ability to close out market positions. The following tables summarise the residual maturity period of the Group’s non - derivative financial liabilities. The tables have been prepared based on undiscounted cash flows from financial liabilities, assuming the earliest possible date on which the Group can be required to settle the liabilities. The table includes cash flows from both interest and principal during the term of a loan agreement. Weighted average effective interest rate Up to 1 year 1-5 years 5+ years Total 2021 Interest - free liabilities 52 854 819 4 001 493 - 56 856 312 Floating interest rate instruments (loans) 1.05% 80 566 096 11 304 284 - 91 870 380 Fixed interest rate instruments (loans) 4.31% 5 411 144 22 502 320 530 288 28 443 752 Finance lease obligations 2 275 623 3 731 747 6 384 724 12 392 094 141 107 682 41 539 844 6 915 012 189 562 538 2020 Interest - free liabilities 33 188 140 3 244 758 - 36 432 898 Floating interest rate instruments (loans) 0.97% 50 107 513 15 034 564 - 65 142 077 Fixed interest rate instruments (loans) 3.20% 7 708 867 26 526 056 1 754 905 35 989 828 Finance lease obligations 1 599 859 3 837 488 4 715 947 10 153 294 92 604 379 48 642 866 6 470 852 147 718 097 b) Fair value estimation The fair value of publicly - traded derivatives and available - for - sale investments is based on quoted market prices at the reporting date. The fair value of currency swap contracts, forwards and options is determined using foreign exchange rates at the reporting date. In assessing the fair value of non - traded derivatives and other financial instruments, the Group uses a variety of methods andmarket assumptions that are based on the market conditions existing at the reporting date. Other techniques, mainly the estimated discounted value of future cash flows, are used to determine the fair value for the remaining financial instruments. Thefacevaluesoffinancialassetsand liabilities lessany estimated creditadjustmentswitha maturity of lessthan oneyearareassumedto approximate their fair values. The fair value of financial liabilities for disclosure purposes is estimated by discounting the future contractual cash flows at the current market interest rate available to the Group for similar financial instruments. Fair value measurement in the Statement of Financial Position The fair value measurement of the recognised financial instruments refers only to those that are derived from inputs other than quoted prices (unadjusted) in active markets for identical assets or liabilities that are observable on the market for the asset or liability, directly or indirectly (Level 2 hierarchy as applied by IFRS 7). 27 RELATED PARTY TRANSACTIONS 27.1 Members of statutory, supervisory and other bodies Remuneration paid to the members of the Group’s statutory, supervisory and other bodies for the year ended 31 December 2021 amounted to EUR 3 973 thousand (year ended 31 December 2020: EUR 3 454 thousand). Remuneration is included in personnel expenses. 27.2 Other related parties CPA s.r.o., Slovak Republic is the parent company of Železiarne Podbrezová a.s. During the year, the Group entered into the following transactions with related parties that did not represent consolidated entities in these consolidated financial statements: Purchases of goods and services in 2021 Payables as at 31 Dec 2021 Sales of goods and services in 2021 Receivables as at 31 Dec 2021 Parent company and ultimate owners 178 725 14 361 180 5 752 3 179 Associates 18 528 14 153 8 552 771 5 607 484 Other related parties 2 203 - 201 253 32 666 Total 199 456 14 375 333 8 759 776 5 643 329 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2021 (IN EUROS)