Annual Report

2024

Czechoslovak Group 
Annual Report 2024 
 
 
2 
Content 
 
 
Group  Highlights  14 
CSG in Figures  14 
Letter from  the Chairman  16 
Strategic Review  18 
Our Business at a Glance  18 
Business Segments per Division  18 
Business Segments per Countries/Regions  20 
Business Segments per End Markets  20 
Business Divisions  21 
Our History in Milestones  23 
Before the Birth of CSG  23 
The CSG Era  23 
Our History in Words  24 
The Origins of CSG  24 
The Acquisition of Tatra and the Formation of the Holding  24 
Michal Strnad’s Leadership and Divisional Structure  25 
International Expansion and Strengthening Global Position  25 
Conclusion  26 
Where We Operate  27 
Governance  28 
General Meeting  28 
Board of Directors  28 
Supervisory Body  31 
Audit Committee  33 
Sustainability Committee  33 
Leadership Team  34 
Organisational Structure  35 
Our Vision, Mission, and Values  35 
Business Strategy  36 
Operational Efficiency & Integration  36 
Organic Growth  37 
Inorganic Growth  38 
Financial Review  39 
Statement from the CFO  39 
Management Discussion & Analysis  40 
Financial Track Record  40 
Comparison of Results  46 
Financial Performance Analysis—CSG Pro-forma with The Kinetic Group  49 
Forward-looking Statements  54 
Risk Factors  55 

Czechoslovak Group

Annual Report 2024

Approval of the Annual Report 63

INDEPENDENT LIMITED ASSURANCE REPORT 64

Sustainability Statement 69

Table of Contents 70

How to navigate in this report 73

Structure of the Report 73

How to Use This Report 73

1. General Information 74

1.1. Basis for Preparation 74

ESRS2.BP-1 1.1.1. General Basis for Preparation of Sustainability Statement 74

Scope of Consolidation 74

Extent to Which Sustainability Statement Covers Upstream and Downstream Value Chain 77

ESRS2.BP-2 1.1.2. Disclosures in Relation to Specific Circumstances 78

Time Horizons 78

Value Chain Estimation 78

Sources of Estimation and Outcome Uncertainty 79

Workforce and Environmental Data Methodology and Considerations 79

Changes in the Preparation or Presentation of Sustainability Information 79

Reporting Errors in Prior Periods 80

The corrected data for 2023 is incorporated in chapter 2 (EU Taxonomy Disclosures) of this

sustainability report, reflecting adjustments made to the previously disclosed EU Taxonomy

data. 80

Disclosures Stemming from Other Legislation or Generally Accepted Sustainability Reporting

Pronouncements 80

Incorporation by Reference 80

Use of Phase-in Provisions 80

1.2. Governance 81

ESRS2.GOV-1 1.2.1. Role of Administrative, Management, and Supervisory Bodies 81

ESRS2.GOV-2 1.2.2. Sustainability Matters Addressed by CSG Administrative, Management, and

Supervisory Bodies 84

Disclosure of How Administrative, Management, and Supervisory Bodies are Informed about

Sustainability Matters and How These Matters Were Addressed 84

Disclosure of Integration of Sustainability-related Performance in Incentive Schemes 85

ESRS2.GOV-4 1.2.4. Statement on Due Diligence 86

Mapping of Information Provided about the Due Diligence Process 86

ESRS2.GOV-5 1.2.5. Risk Management and Internal Controls over Sustainability Reporting 86

Disclosure of Risk Management and Internal Controls over Sustainability Reporting 86

1.3. Strategy 87

ESRS2.SBM-1 1.3.1. Strategy, Business Model, and Value Chain 87

Disclosure of Elements of Strategy That Relate to or Impact Sustainability Matters, Business Model

and Value Chain 87

Description of Business Model and Value Chain 88

ESRS2.SBM-2 1.3.2. Interests and Views of Stakeholders 89

Disclosure of How Stakeholders’ Interests and Views Are Taken into Account by CSG’s Strategy and

Business Model 89

ESRS2.SBM-3 1.3.3. Material Impacts, Risks and Opportunities and Their Interaction with Strategy and

Business Model 90

Disclosure of Material Impacts, Risks and Opportunities and How They Interact with Strategy and

Business Model 90

1.4. Impact, Risk, and Opportunity Management 92

ESRS2.IRO-1 1.4.1. Process to Identify and Assess Material Impacts, Risks and Opportunities 92

Disclosure of Process to Identify Impacts, Risks, and Opportunities and to Assess Which Ones are

Material 93

Czechoslovak Group

Annual Report 2024

ESRS2.IRO-2 1.4.2. Disclosure Requirements in ESRS Covered by Sustainability Statement 95

Disclosure of ESRS Disclosure Requirements Complied with in Sustainability Statements 96

2. EU Taxonomy Disclosures 103

Introduction to KPI Reporting for 2024 105

3. Environmental Information Chyba! Záložka není definována.

3.1. Climate Change 112

Sustainability Matters in Topical ESRS 113

Governance – Disclosure of Integration of Sustainability-Related Performance in Incentive Schemes

113

Strategy – Disclosure of Material Impacts, Risks and Opportunities and How They Interact with

Strategy and Business Model 113

Strategy – Disclosure of Information Related to Resilience Analysis 113

Impact, Risk and Opportunity Management – Disclosure of the Processes to Identify and Assess

Material Climate-related Impacts, Risks and Opportunities 114

E1-1 3.1.2. Transition Plan for Climate Change Mitigation 115

Transition Plan for Climate Change Mitigation 115

E1-2 3.1.3. Policies Related to Climate Change Mitigation and Adaptation Including Minimal

Disclosures 115

Sustainability Matters in Topical ESRS 115

Disclosure of Policies Adopted to Manage Material Impacts, Risks and Opportunities Related to

Climate Change Mitigation and Adaptation (Including Minimal Disclosure requirements) 116

E1-3 3.1.4. Actions and Resources in Relation to Climate Change Policies 116

Sustainability Matters in Topical ESRS 116

Minimum Disclosure Requirement – Actions and Resources in Relation to Climate Change Policies 116

Further Information on Actions and Resources in Relation to Climate Change Policies 117

E1-4 3.1.5. Targets Related to Climate Change Mitigation and Adaptation 118

Sustainability Matters in Topical ESRS 118

Minimum Disclosure Requirement – Targets Related to Climate Change Mitigation and Adaptation 118

Further Information on Targets in Relation to Climate Change Mitigation and Adaptation 118

E1-5 3.1.6. Energy Consumption and Mix 118

Sustainability Matters in Topical ESRS 118

Disclosure of Energy Consumption and Mix 118

Energy Intensity Based on Net Revenue 120

E1-6 3.1.7. Gross Scopes 1, 2, 3 and Total GHG Emissions 120

Sustainability Matters in Topical ESRS 120

Disclosure of GHG Emissions 120

Total GHG Emissions – Scope 1 & Scope 2 121

Disaggregation of GHG Emissions 121

Disclosure of Significant Scope 3 Categories 122

GHG Intensity Based on Net Revenue 125

E1-7 3.1.8. GHG Removals and GHG Mitigation Projects Financed through Carbon Credits 126

Sustainability Matters in Topical ESRS 126

Disclosure of GHG Removals and Storage Resulting from Projects Developed in Own Operations or

Contributed to in Upstream and Downstream Value Chain 126

Disclosure of GHG Emission Reductions or Removals from Climate Change Mitigation Projects

outside Value Chain Financed or to be Financed through Any Purchase of Carbon Credits 126

E1-8 3.1.9. Internal Carbon Pricing 126

Sustainability Matters in Topical ESRS 126

Disclosure of Whether Internal Carbon Pricing Schemes Have Been Applied 126

E1-9 3.1.10. Anticipated Financial Effects from Material Physical Risks 127

Sustainability Matters in Topical ESRS 127

Disclosure of Anticipated Financial Effects from Material Physical Risks, Material Transition Risks, and

Potential to Benefit from Material Climate-Related Opportunities 127

3.2. Pollution 127

E2.IRO-1 3.2.1. General Disclosures Related to Pollution 128

Czechoslovak Group

Annual Report 2024

Sustainability Matters in Topical ESRS 128

Processes to Identify and Assess Material Pollution-Related Impacts, Risks and Opportunities 128

E2-1 3.2.2. Policies Related to Pollution 129

Sustainability Matters in Topical ESRS 129

Disclosure of Policies Adopted to Manage Material Impacts, Risks and Opportunities Related to

Pollution Prevention and Control (Including Minimal Disclosure Requirements) 129

Mitigation of Negative impacts Related to Pollution 129

Substitution, Minimization, and Phasing Out of Substances of Concern 129

Avoiding Incidents and Emergency Situations 130

E2-2 3.2.3. Actions and Resources Related to Pollution 130

Sustainability Matters in Topical ESRS 130

Minimum Disclosure Requirement – Actions and Resources in Relation to Pollution 130

Further Information on Actions and Resources in Relation to Pollution 131

E2-3 3.2.4. Targets Related to Pollution 131

Sustainability Matters in Topical ESRS 131

Minimum Disclosure Requirement – Targets Related to Pollution 131

Further Information on Targets in Relation to Pollution 132

E2-4 3.2.5. Pollution of Air 132

Sustainability Matters in Topical ESRS 132

Disclosure of Pollutants Emitted Through Own Operations 132

Further Information on Air Pollution 133

E2-5 3.2.6. Substances of Concern and Substances of Very High Concern 133

Sustainability Matters in Topical ESRS 133

Substances of Concern 133

Substances of Very High Concern 134

E2-6 3.2.7. Anticipated Financial Effects from Material Pollution-related Risks and Opportunities 135

Sustainability Matters in Topical ESRS 135

Disclosure of Anticipated Financial Effects from Material Pollution-related Risks and Opportunities 135

Percentage of Net Revenue Connected to Products and Services That Are or That Contain

Substances of Concern / Substances of Very High Concern 136

Operating Expenditures (OpEx) / Capital Expenditures (CapEx) in Conjunction with Major Incidents

and Deposits (Pollution) 136

Provisions for Environmental Protection and Remediation Costs 136

3.3. Water and Marine Resources 136

E3.IRO-1 3.3.1. General Disclosures Related to Water and Marine Resources 137

Sustainability Matters in Topical ESRS 137

Processes to Identify and Assess Material Water- and Marine-Resources-Related Impacts, Risks and

Opportunities 137

E3-1 3.3.2. Policies Related to Water and Marine Resources 137

Sustainability Matters in Topical ESRS 137

Disclosure of Policies Adopted to Manage Material Impacts, Risks and Opportunities Related to Water

and Marine Resources (Including Minimum Disclosure Requirements) 138

E3-2 3.3.3. Actions and Resources Related to Water and Marine Resources 138

Sustainability Matters in Topical ESRS 138

Minimum Disclosure Requirement – Actions and Resources in Relation to Water and Marine

Resources 139

Further Information on Actions and Resources in Relation to Water and Marine Resources 139

Sustainability Matters in Topical ESRS 139

Minimum Disclosure Requirement – Targets Related to Water and Marine Resources 140

Further Information on Targets in Relation to Water and Marine Resources 140

E3-4 3.3.5. Water Consumption 140

Sustainability Matters in Topical ESRS 140

Disclosure of Information About Water Consumption Performance Related to Material Impacts, Risks,

and Opportunities 140

Data Related to Water Consumption 141

Czechoslovak Group

Annual Report 2024

E3-5 3.3.6. Anticipated Financial Effects from Material Water- and Marine-Resources-Related Risks

and Opportunities 141

Sustainability Matters in Topical ESRS 141

Disclosure of Anticipated Financial Effects from Material Water- and Marine-Resources-Related Risks

and Opportunities 142

3.4. Resource Use and Circular Economy 142

E5.IRO-1 3.4.1. General Disclosures Related to Resource Use and the Circular Economy 143

Sustainability Matters in Topical ESRS 143

Processes to Identify and Assess Material Resource Use and Circular-Economy-Related Impacts,

Risks, and Opportunities 143

E5-1 3.4.2. Policies Related to Resource Use and the Circular Economy 143

Sustainability Matters in Topical ESRS 143

Disclosure of Policies Adopted to Manage Material Impacts, Risks, and Opportunities Related to

Resource Use and Circular Economy (Including Minimum Disclosure Requirements) 144

E5-2 3.4.3. Actions and Resources Related to Resource Use and the Circular Economy 144

Sustainability Matters in Topical ESRS 144

Minimum Disclosure Requirement – Actions and Resources in Relation to Resource Use and Circular

Economy Actions and Resources Allocated to their Implementation 144

E5-3 3.4.4. Targets Related to Resource Use and the Circular Economy 145

Sustainability Matters in Topical ESRS 145

Minimum Disclosure Requirement – Targets Related to Resource Use and the Circular Economy 145

Further Information on Targets in Relation to Resource Use and the Circular Economy 146

E5-5 3.4.5. Resource Outflows Sustainability Matters in Topical ESRS 146

Products and Materials 146

Waste 146

E5-6 3.4.6. Anticipated Financial Effects from Material Resource Use and Circular-Economy-Related

Risks and Opportunities 148

Sustainability Matters in Topical ESRS 148

Disclosure of Anticipated Financial Effects from Material Resource Use and Circular-Economy-

Related Risks and Opportunities 148

Workforce Data Methodology and Considerations 149

Sustainability Matters in Topical ESRS 149

All People in Undertaking’s Own Workforce Who Can Be Materially Impacted by Undertaking Are

Included in Scope of Disclosure Under ESRS 2 150

Description of Types of Employees and Non-employees in Its Own Workforce Subject to Material

Impacts 150

Occurrence of Material Negative Impacts (Own Workforce) 150

Description of Activities That Result in Positive Impacts and Types of Employees and Non-Employees

in Undertaking’s Own Workforce That Are Positively Affected or Could Be Positively Affected

151

Description of Material Risks and Opportunities Arising from Impacts and Dependencies on

Undertaking’s Own Workforce 151

Description of Material Impacts on Workers That May Arise from Transition Plans for Reducing

Negative Impacts on Environment and Achieving Greener and Climate-Neutral Operations 152

Information About Types of Operations and Countries or Geographic Areas at Significant Risk of

Incidents of Forced Labor or Compulsory Labor 152

Information About Types and Countries or Geographic Areas of Operations at Significant Risk of

Incidents of Child Labor 152

Disclosure of Whether and How an Understanding of People in Undertaking’s Own Workforce with

Particular Characteristics, Working in Particular Contexts, or Engaged in Particular Activities

May Be at Greater Risk of Harm Has Been Developed 153

Disclosure of Which of Material Risks and Opportunities Arising from Impacts and Dependencies on

People in Its Own Workforce Relate to Specific Groups of People 153

S1-1 4.1.2. Policies Related to Own Workforce 153

Sustainability Matters Covered in the Topical ESRS 153

Czechoslovak Group

Annual Report 2024

Sustainability Matters in Topical ESRS 155

Disclosure of Whether and How Perspectives of Own Workforce Inform Decisions or Activities Aimed

at Managing Actual and Potential Impacts 155

Sustainability Matters in Topical ESRS 156

Disclosure of General Approach to and Processes for Providing or Contributing to Remedy Where

Undertaking Has Caused or Contributed to a Material Negative Impact on People in Its Own

Workforce 156

Disclosure of Specific Channels in Place for Its Own Workforce to Raise Concerns or Needs Directly

with Undertaking and Have Them Addressed 156

Grievance or Complaints Handling Mechanisms Related to Employee Matters Exist 156

Disclosure of Processes Through Which Undertaking Supports or Requires Availability of Channels

156

Disclosure of How Issues Raised and Addressed Are Tracked and Monitored and How Effectiveness

of Channels Is Ensured 156

Disclosure of Whether and How It Is Assessed That Its Own Workforce Is Aware of and Trust

Structures or Processes as Way to Raise Their Concerns or Needs and Have Them

Addressed 157

Policies Regarding Protection Against Retaliation for Individuals That Use Channels to Raise Concerns

or Needs Are in Place 157

4.1.5. Taking Action on Material Impacts on Own Workforce 157

Sustainability Matters in Topical ESRS 157

Minimum Disclosure Requirement – Actions and Resources in Relation to Own Workforce 157

Further Information on Actions and Resources in Relation to Own Workforce 158

Sustainability Matters in Topical ESRS 158

Minimum Disclosure Requirement – Targets Related to Own Workforce 159

Further Information on Targets in Relation to Own Workforce 159

S1-6 4.1.7. Characteristics of CSG's employees 159

Sustainability Matters in Topical ESRS 159

Disclosure of Cross-Reference of Information Reported in Financial Statements 160

Average Number of Employees 160

Average Number of Employees in Countries with 50 or more Employees representing at least 10% of

total number of employees 160

Information on Employees by Contract Type 160

Information on Employees by Region 161

Number of employees Who Have Left and Percentage of Employee Turnover 161

During the reporting period, a total of 1,638 employees left the undertaking. The employee turnover

rate for the group was 12.7%, calculated by dividing the total number of employees who

left—whether voluntarily or due to dismissal, retirement, or death in service—by the total

number of employees at the end of the reporting period. 161

Description of methodologies and assumptions used to compile data (employees) 161

Employee Numbers Reported using Head Count or FTE 161

S1-7 161

4.1.8. Characteristics of Non-employees in Undertaking’s Own Workforce 161

Sustainability Matters in Topical ESRS 161

Description of Key Characteristics of Non-Employees in Own Workforce 161

Description of Methodologies and Assumptions Used to Compile Data (Non-Employees)

Methodology for Measurement of Non-Employee Data 162

Non-Employee Numbers Reported Using Headcount or FTE 162

S1-8 4.1.9. Collective Bargaining Coverage and Social Dialogue 162

Sustainability matters in topical ESRS 162

Percentage of total employees covered by collective bargaining agreements 163

Percentage of own employees covered by collective bargaining agreements are within coverage rate

by country with significant employment (in the EEA) 163

Percentage of own employees covered by collective bargaining agreements (outside EEA) by region

163

Czechoslovak Group

Annual Report 2024

Percentage of employees in country with significant employment (in the EEA) covered by workers'

representatives 163

Disclosure of existence of any agreement with employees for representation by European Works

Council (EWC), Societas Europaea (SE) Works Council, or Societas Cooperativa Europaea

(SCE) Works Council 163

S1-9 164

4.1.10. Diversity Metrics 164

Sustainability Matters in Topical ESRS 164

Gender Distribution in Number of Employees (Headcount) and Percentage in Top Management Level

164

Disclosure of Own Definitions of Top Management Used 164

S1-10 164

4.1.11. Adequate Wages 164

Sustainability Matters in Topical ESRS 164

S1-11 165

4.1.12. Social Protection 165

Sustainability Matters in Topical ESRS 165

Social Protection Against Loss of Income Due to Sickness 165

Social Protection Against Loss of Income Due to Unemployment 165

Social Protection Against Loss of Income Due to Employment Injury and Acquired Disability 165

Social Protection Against Loss of Income Due to Parental Leave 165

Social Protection Against Loss of Income Due to Retirement 165

Types of Employees Who Are Not Covered by Social Protection 165

Sustainability Matters in Topical ESRS 166

Percentage of Persons with Disabilities Among Employees 166

Contextual Information Necessary to Understand Data and How Data Has Been Compiled (for

Persons with Disabilities) 166

S1-13 4.1.14. Training and Skills Development Metrics 166

Sustainability Matters in Topical ESRS 166

Training and Skills-Development Indicators 166

Percentage of Employees That Participated in Regular Performance and Career Development

Reviews 167

Average Number of Training Hours by Gender and per Person 167

S1-14 4.1.15. Health and Safety Metrics 167

Sustainability Matters in Topical ESRS 167

Percentage of People in Own Workforce Who Are Covered by Health and Safety Management

System Based on Legal Requirements and (or) Recognized Standards or Guidelines 167

Number of Fatalities in Own Workforce as Result of Work-Related Injuries and Work-Related Ill Health

167

Number of Fatalities as Result of Work-Related Injuries and Work-Related Ill Health of Other Workers

Working on Undertaking’s Sites 167

Number of Recordable Work-Related Accidents 168

Rate of Recordable Work-Related Accidents 168

Number of Cases of Recordable Work-Related Ill Health 168

Number of Days Lost to Work-Related Injuries and Fatalities from Work-Related Accidents, Work-

Related Ill Health and Fatalities from Ill Health 168

S1-15 4.1.16. Work-Life Balance Metrics 168

Sustainability Matters in Topical ESRS 168

Percentage of Employees Entitled to Take Family-Related Leaves 169

Percentage of Entitled Employees That Took Family-Related Leave 169

S1-16 4.1.17. Remuneration Metrics (Pay Gap and Total Remuneration) 169

Sustainability Matters in Topical ESRS 169

Gender Pay Gap 169

Annual Remuneration Ratio 169

Czechoslovak Group

Annual Report 2024

Contextual Information Necessary to Understand Data, How Data Has Been Compiled and Other

Changes to Underlying Data That Are to Be Considered 170

Sustainability Matters in Topical ESRS 170

Number of Incidents of Discrimination 170

Number of Complaints Filed Through Channels for People to Raise Concerns 170

Number of Complaints Filed to National Contact Points for OECD Multinational Enterprises 170

Total Amount of Fines, Penalties, and Compensation for Damages as Result of Incidents and

Complaints 170

Contextual Information Necessary to Understand Data and How Data Has Been Compiled 170

Number of Severe Human Rights Incidents 171

Number of Severe Human Rights Incidents Connected to Own Workforce That Are Non-respect of

Un Guiding Principles on Business and Human Rights, ILO Declaration on Fundamental

Principles and Rights at Work or OECD Guidelines for Multinational Enterprises 171

Total Amount of Fines, Penalties, and Compensation for Damages for Severe Human Rights Incidents

171

Sustainability Matters in Topical ESRS 172

All Affected Communities That Can Be Materially Impacted by Undertaking Are Included in Scope of

Disclosure Under ESRS 2 172

Description of Types of Affected Communities Subject to Material Impacts and Types of Communities

Subject to Material Impacts by Own Operations or Through Value Chain 172

Description of Material Risks and Opportunities Arising from Impacts and Dependencies on Affected

Communities 172

Disclosure of Whether and How the Undertaking Has Developed an Understanding of How Affected

Communities with Particular Characteristics, Those Living in Particular Contexts, or Those

Undertaking Particular Activities, May Be at Greater Risk of Harm 173

Disclosure of Which of Material Risks and Opportunities Arising from Impacts and Dependencies on

Affected Communities Are Impacts on Specific Groups 173

Sustainability Matters in Topical ESRS 173

Sustainability Matters in Topical ESRS 175

Disclosure of Whether and How Perspectives of Affected Communities Inform Decisions or Activities

Aimed at Managing Actual and Potential Impacts 175

Sustainability Matters in Topical ESRS 175

Disclosure of General Approach to and Processes for Providing or Contributing to Remedy When

Undertaking Has Identified That It Is Connected with a Material Negative Impact on Affected

Communities 176

Disclosure of Specific Channels in Place for Affected Communities to Raise Concerns or Needs

Directly with Undertaking and Have Them Addressed 176

Disclosure of Processes Through Which Undertaking Supports or Requires Availability of Channels

176

Disclosure of How Issues Raised and Addressed Are Tracked and Monitored and How Effectiveness

of Channels Is Ensured 176

Disclosure of Whether and How It Is Assessed That Affected Communities Are Aware of and Trust

Structures or Processes as Way to Raise Their Concerns or Needs and Have Them

Addressed 176

Policies Regarding Protection Against Retaliation for Individuals That Use Channels to Raise Concerns

or Needs Are in Place 176

Sustainability Matters in Topical ESRS 177

Minimum Disclosure Requirement – Actions and Resources in Relation to Affected Communities 177

Sustainability Matters in Topical ESRS 178

Minimum Disclosure Requirement – Targets Related to Affected Communities 178

Further Information on Targets in Relation to Affected Communities 178

Sustainability Matters in Topical ESRS 179

All Consumers and End-Users Who Can Be Materially Impacted by Undertaking Are Included in

Scope of Disclosure Under ESRS 2 179

Czechoslovak Group

Annual Report 2024

Description of Types of Consumers and End-Users Subject to Material Impacts and Types of

Consumers and End-Users Subject to Material Impacts by Own Operations or Through Value

Chain 180

Description of Material Risks and Opportunities Arising from Impacts and Dependencies on

Consumers and End-Users 180

Disclosure of Whether and How an Understanding of How Consumers and End-Users with Particular

Characteristics, Working In Particular Contexts, or Undertaking Particular Activities May Be at

Greater Risk of Harm Has Been Developed 181

Disclosure of Which of Material Risks and Opportunities Arising from Impacts and Dependencies on

Consumers and End-Users Are Impacts on Specific Groups 181

Sustainability Matters in Topical ESRS 181

Disclosure of Policies Adopted to Manage Material Impacts, Risks and Opportunities Related to

Consumers and End-Users (Including Minimum Disclosure Requirements) 182

Sustainability Matters in Topical ESRS 183

Disclosure of Whether and How Perspectives of Consumers and End-Users Inform Decisions or

Activities Aimed At Managing Actual and Potential Impacts 183

Sustainability Matters in Topical ESRS 183

Disclosure of General Approach to and Processes for Providing or Contributing to Remedies Where

Undertaking Has Identified That It Is Connected with a Material Negative Impact on

Consumers and End-Users 183

Disclosure of Specific Channels in Place for Consumers and End-Users to Raise Concerns or Needs

Directly with Undertaking and Have Them Addressed 184

Disclosure of Processes Through Which Undertaking Supports or Requires Availability of Channels

184

Disclosure of How Issues Raised and Addressed Are Tracked and Monitored and How Effectiveness

of Channels Is Ensured 184

Disclosure of Whether and How It Is Assessed That Consumers and End-Users Are Aware of and

Trust Structures or Processes as Way to Raise Their Concerns or Needs and Have Them

Addressed 184

Implementation of Policies Regarding Protection Against Retaliation for Individuals That Use Channels

to Raise Concerns or Needs 184

Sustainability Matters in Topical ESRS 185

Minimum Disclosure Requirement – Actions and Resources in Relation to Consumers and End-Users

185

4.3.6. Targets Related to Consumers and End-Users 186

Sustainability Matters in Topical ESRS 186

Minimum Disclosure Requirement – Targets Related to Consumers and End-Users 186

Further Information on Targets in Relation to Consumers and End-Users 186

5. Governance – Business Conduct 186

ESRS G1 5.1. General Disclosures Related to Governance 187

Sustainability Matters in Topical ESRS 187

5.1.1. Role of Administrative, Management, And Supervisory Bodies 188

Information about Roles and Responsibilities of Administrative, Management, and Supervisory Bodies

188

5.1.2. Processes to Identify and Assess Material Business Conduct Related Impacts, Risks, and

Opportunities 189

5.1.3. Minimum Disclosure Requirements 189

Policies Related to Business Conduct 189

Actions and Resources Related to Business Conduct 189

Metrics Related to Business Conduct 189

Targets Related to Business Conduct 190

G1-1 190

5.2. Business Conduct Policies and Corporate Culture 190

Sustainability Matters in Topical ESRS 190

Policies on Business Conduct and Corporate Culture 190

Czechoslovak Group

Annual Report 2024

Executive Summary 190

Aspects of Corporate Culture 191

This chapter relates to the sustainability matter “G1_SM_36: Corporate Culture and Ethics.” 191

Mechanisms for Reporting and Investigating Unlawful or Non-Compliant Behaviour 191

This chapter relates to the sustainability matter “G1_SM_38: Whistleblowing and Reporting.” Within

the group, CSG has established clear mechanisms for identifying, reporting, and

investigating concerns related to unlawful behavior or actions that contradict its Code of

Ethics, which is part of the Compliance Program. Concerns can be reported through CSG’s

ethics line, accessible via the Group’s website, which provides a secure and confidential

channel through which stakeholders can raise issues. The compliance department oversees

the intake and examination of reported cases, ensuring that all credible allegations are

thoroughly assessed and appropriately addressed. The reporting process is designed to

protect the confidentiality of the reporting party while promoting a transparent and

responsive investigative procedure. Employees are encouraged to report any actions

reasonably suspected to breach legal, ethical, or safety standards. In cases where reports

involve external partners, such as dealers and suppliers, these concerns are evaluated with

the same level of scrutiny. The compliance department plays a central role in coordinating

investigations and has direct access to the Board of Directors, ensuring high-level oversight

and effective resolution of any identified concerns. 191

Anti-Corruption and Anti-Bribery Policies in Place 191

Protection of Whistleblowers 192

This chapter relates to the sustainability matter “G1_SM_38: Whistleblowing and Reporting.” 192

Procedures for Independent Business Conduct Investigations 192

This chapter relates to the sustainability matter “G1_SM_40: Legal Compliance and Investigations”

192

Animal Welfare Policies in Place 192

The sustainability matter “G1_SM_41: Animal Welfare”, was assessed as non-material across all CSG

sectors. 192

Business Conduct Training Policy 192

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training.” 192

High-Risk Functions for Corruption and Bribery 192

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.” 192

G1-2 193

5.3. Management of Relationships with Suppliers 193

Sustainability Matters in Topical ESRS 193

Executive Summary 193

Policy to Prevent Late Payments to SMEs 193

Approach to Supplier Relationships 193

Supplier Selection Based on Social and Environmental Criteria 193

G1-3 194

5.4. Prevention and Detection of Corruption and Bribery 194

Executive Summary 194

System to Prevent, Detect, and Respond to Corruption and Bribery 194

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.” 194

Independent Investigators for Corruption and Bribery 194

This chapter relates to the sustainability matter “G1_SM_40: Legal Compliance and Investigations.”

194

Anti-Corruption and Bribery Prevention Training 194

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.” 194

Reporting Process to Management and Supervisory Bodies 195

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.” 195

Procedures for Preventing and Addressing Corruption and Bribery 195

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.” 195

Communication of Policies This chapter relates to the sustainability matter “G1_SM_37: Anti-

Corruption and Anti-Bribery.” 195

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Training 195

Details of Anti-Corruption and Anti-Bribery Training 195

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training & G1_SM_37:

Anti-Corruption and Anti-Bribery.” 195

Training Coverage of At-Risk Functions 196

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training.” 196

Training Coverage for Management and Supervisory Bodies 196

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training.” 196

G1-4 196

5.5. Incidents of Corruption or Bribery 196

Sustainability Matters in Topical ESRS 196

Convictions for Violations of Anti-Corruption and Anti-Bribery Laws 196

Fines for Violations of Anti-Corruption and Anti-Bribery Laws 196

G1-5 197

5.6. Political Influence and Lobbying Activities 197

Sustainability Matters in Topical ESRS 197

Executive Summary 197

Information about Representatives Responsible in Administrative, Management and Supervisory

Bodies for Oversight of Activities Related to Political Influence and Lobbying 197

Information about Financial or In-Kind Political Contributions 197

Total Financial Political Contributions Made 197

Total In-Kind Political Contributions Made 197

Disclosure of How Monetary Value of In-Kind Contributions Is Estimated 198

Disclosure of Main Topics Covered by Lobbying Activities and Undertaking’s Main Positions on

These Topics 198

Undertaking is Registered in EU Transparency Register or in Equivalent Transparency Register in

Member State 198

Information about Appointment of Members of Administrative, Management and Supervisory Bodies

Who Held Positions in Public Administration in the Last Two Years 198

Financial and In-Kind Political Contributions Made by Country (Table) 198

6. Independent Auditor’s Report Chyba! Záložka není definována.

Annex 1: List of Phase-in ESRS Data Points in accordance with Appendix C to ESRS 1 199

Nadpis první úrovně Chyba! Záložka není definována.

Nadpis druhé úrovně Chyba! Záložka není definována.

Nadpis třetí úrovně Chyba! Záložka není definována.

Poznámka Chyba! Záložka není definována.

Czechoslovak Group

Annual Report 2024

Czechoslovak Group

Annual Report 2024

Group

Highlights

Czechoslovak Group (“CSG” or “the Group”) is a global defence, industrial, and

technology group active in five strategic business divisions: Defence, Ammo+,

Aerospace, Mobility, and Business Projects.

CSG in Figures

— Revenues: €4.0 billion

— Pro-forma Revenues With The Kinetic Group€5.2 billion

— Operating EBITDA: €1.1 billion

— Pro-forma Operating EBITDA With The Kinetic Group€1.4 billion

— Operating EBITDA margin: 26.9%

— Net leverage 1.3x

— Number of employees: 14,000+

— Years of the Group’s history: 30

— CSRD: Sustainabillity report aligned with ESRS

— ESG AUDIT: ESG data independently audited

In 2024, CSG strengthened its market position by delivering both revenues and Operating EBITDA growth

throughout its existing markets, reflecting the effectiveness of its strategic initiatives.

CSG remains committed to its growth strategy, consistently investing in the expansion of operations, vertical

integration, enhancement of production capabilities, and advancement of innovation across its entities. The

company has continued to build strategic partnerships with technology leaders and industry experts,

reinforcing its commitment to staying at the forefront of innovation and technological advancement.

Czechoslovak Group

Annual Report 2024

Czechoslovak Group

Annual Report 2024

Letter from

the Chairman

Dear readers,

2024 brought a significant improvement in CSG’s financial results and the completion of a record

acquisition: the purchase of The Kinetic Group in the USA. Thanks to The Kinetic Group, we have become

the most significant producer of small-caliber ammunition in the USA and one of the largest worldwide. But

this is definitely not the end of CSG’s journey. My ambition is to make CSG one of the two most significant

defence companies in Europe, a goal we are steadily approaching with every strategic step we take.

It goes without saying that this growth is also driven by the global security situation, which is increasing the

role of the defence industry in Europe as a supplier of technologies for the task of defending the basic

values of civilization. However, I am convinced that the main credit here actually belongs to our initiative and

diligence, driven by our vision of building a global industrial player in defence and other strategic sectors as

well.

Let me first assess the acquisition of The Kinetic Group, which includes multiple major American small

caliber ammunition manufacturers including tradition-laden brands such as Federal and Remington. When

we first entered into the purchase agreement with Vista Outdoor – the company to which The Kinetic Group

companies then belonged – in October 2023, I would never have imagined the arduous journey that would

lead up to the successful closing of this transaction, which did not arrive until November 2024. We faced

very determined and strong competition that was trying to block this project, which was taking place on their

home turf.

However, we were victorious in this competition, and this can above all be credited to the qualities that

characterize our management team: experience, knowledge, strength, endurance, resilience, and the ability

to make important decisions quickly.

With this acquisition we have strongly diversified our business, because our main customer group here is

hunters and sport shooters, who purchase ammunition on an ongoing basis, in other words, not customers

from among defence forces. But we make no secret of the fact that we want to strengthen The Kinetic

Group’s position as a supplier to the armed forces in NATO and its allies in the future.

Defence is a very strong business segment and source of growth for CSG, and the production and trade of

large-caliber ammunition dominates within this segment. The outbreak of Russian aggression against

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Annual Report 2024

Ukraine has shown that there is a huge shortage of production capacity for this strategic commodity on

NATO territory. Very quickly, we decided to simply act rather than waiting for politicians to act – to begin

investing on our own in developing our production capacity and strengthening our global business network.

Thanks to this, we were able to supply Ukraine with one million units of artillery ammunition in 2024, some

of it under the “Czech Ammunition Initiative”: a Czech government project for supporting ammunition

supplies to Ukraine. We are working hard to ensure that a growing proportion of this ammunition is

manufactured by us. It is because of this goal that we announced several major investments for expanding

our production of large-caliber ammunition and its vertical integration in 2024. Please allow me to mention

at least one important project in this context: In Greece, we are preparing to resume full-scale production of

large-caliber ammunition in a joint venture with a local state-owned company, and with it the production of

TNT: an important ammunition commodity that is currently produced in just one single location in Europe.

Another major acquisition we announced in 2024 is also related to the production of large-caliber

ammunition: In Lower Saxony, Germany, we are in the midst of acquiring a nitrocellulose production plant,

and the industrial park in which the plant is located, from the U.S. company International Flavors &

Fragrances (IFF). This transaction is expected to be completed in the first half of 2025. Germany, the

nearest neighbor and most important economic partner of the Czech Republic – where CSG is based – will

thereby be “added to the map” of countries where we are a manufacturer and employer.

The information I’ve presented so far has been about traditional industries; now I would like to mention the

role CSG wishes to play in the use of modern technologies. In June 2024, we announced the launch of the

Presto Tech Horizons investment fund together with Presto Ventures. This fund plans to support dozens of

promising technology projects from NATO countries and their allies. It will focus primarily on companies

whose solutions have dual-use applications in both the civilian and security sectors. We’re moving fast here;

already last fall we made our selection of the first firms that will be creating highly innovative products

making use of drones or artificial intelligence thanks to this fund.

CSG is always ready to provide help wherever it is needed. In this context, please let me mention the tragic

floods that hit the Czech Republic in fall of 2024. We donated Tatra vehicles worth more than €4 million to

the Czech firefighters to help them deal with the aftermath. A team from Excalibur Army installed a

temporary bridge over the Bělá River with great dedication and in difficult conditions, using bridge systems

manufactured by a CSG company. As our Group grows, so must its ability to help and protect countries,

communities, our employees, and talented young people. That is why we have major projects planned for

2025 that will significantly strengthen our ability to help and protect others.

Throughout 2025, CSG will be celebrating a full 30 years since its founding. Yes, that is how long it has

been since the founding of our first company, Excalibur Army – which today is a major European defence

enterprise and a driving force for the Group's results. I am pleased to see how far we have come in these 30

years. Our companies deliver products and services that are of strategic value for the security of states and

communities. As a result, we play a significant role in protecting the values of the Western world. I am

confident that we will be celebrating this significant anniversary with a number of successful projects and

dynamic growth throughout our Group.

I would like, above all, to thank everyone who has helped us along the way during our 30-year journey.

Michal Strnad

owner of CSG and Chairman of the Board of Directors

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Annual Report 2024

CSG is a global industrial and technology group focusing on sustainable growth through continuous

investment in innovation and production, aiming to integrate new technologies into its diverse product

portfolio.

Strategic Review

CSG’s impressive financial performance, highlighted by significant growth in revenues and EBITDA,

underscores the success of our strategic initiatives and operational excellence. Looking ahead, CSG is

committed to strengthening its position as one of the key defence groups, with a focused strategy on

expanding our capabilities, driving innovation, and enhancing financial resilience. A key milestone in this

journey has been our recent strategic acquisition in the USA, which positions us to capitalize on growth

opportunities within the American market and broader industrial landscape. In tandem with these growth

strategies, the Group’s Sustainability Strategy, which spans a broad range of environmental, social, and

governance objectives, is designed to embed sustainability into the heart of our business practices. The

development of division-specific sustainability plans is integral to our overarching strategy, enabling

targeted and effective change that aligns with each division’s distinct priorities. This multifaceted approach

not only supports our expansion and market share growth but also affirms our commitment to responsible

business conduct and the generation of enduring value for all stakeholders. Looking forward, CSG is well-

positioned for sustained growth, underpinned by cutting-edge defence technologies, a talented workforce,

resilient supply chains, and continuous innovation. In response to the evolving security policy landscape, we

anticipate strong growth for our revenues and earnings through 2024, solidifying our financial strength and

strategic leadership in the global defence and industrial sectors.

Our Business at a Glance

Business Segments by Division

CSG is a defence, industrial, and technology group with a diversified portfolio spanning multiple sectors.

The Group is structured into five divisions, each specializing in a distinct area while leveraging synergies

across industries.

CSG Defence integrates traditional and modern defence companies, focusing on military vehicles, weapons,

ammunition, and defence systems, along with lifecycle support. CSG Ammo+ is a global leader in small-

caliber ammunition production and trade, serving both civilian and defence markets. CSG Aerospace unites

companies in the aviation industry, delivering specialized products and services for military and civilian

applications. CSG Mobility drives innovation in automotive and rolling-stock manufacturing, producing

heavy-duty trucks, braking systems, and engineering solutions for transport. CSG Business Projects

encompasses high-potential ventures outside the Group’s core sectors, including premium firearms, luxury

watchmaking, and healthcare.

Through its defence, industrial, and technological expertise, CSG continues to expand its market presence,

combining innovation, operational excellence, and strategic investments to drive long-term growth.

The following breakdown provides insights into the composition of CSG’s revenues and Operating EBITDA,

highlighting the individual impact of each division on the Group’s overall financial results.

Revenues Contributions by Division

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Annual Report 2024

CSG Defence remains the most strongly contributing division, generating 77.6% of total revenues,

solidifying its position as the Group’s core business. CSG Ammo+, our division for small-caliber ammunition,

contributed 11.3%, with an increasing presence on global markets through the acquisition of The Kinetic

Group in November 2024. Therefore, only one month’s contribution from The Kinetic Group is presented in

the Group’s 2024 consolidated figures. CSG Aerospace represented 6.8% of revenues, leveraging its

advanced engineering and production capabilities. Meanwhile the CSG Mobility division focusing on

specialized vehicle solutions accounted for 1.8%, and CSG Business Projects added 2.4% to total revenues

through its diversified portfolio.

Operating EBITDA Contribution by Division

Moving on to profitability: CSG Defence, as the largest contributor, delivered an Operating EBITDA margin of

28.6%. The CSG Ammo+ division achieved an Operating EBITDA margin of 16.6%, reflecting only a single

month of contributions from The Kinetic Group. The CSG Aerospace division generated an operating

EBITDA margin of 20.2%, while CSG Mobility and other divisions maintained a healthy operating EBITDA

margin of 15.3%. Overall, the Group achieved a solid operating EBITDA margin of 26.9%, reflecting the

strength and efficiency of its diverse business segments.

The overall results demonstrate the Group’s ability to adapt to shifting market demands while maintaining

sustained profitability and operational excellence across its business segments. The accompanying pie

charts in the report offer a clear visual representation of revenue distribution by country, end market, and

division, reinforcing the Group’s diversified yet focused business model.

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Annual Report 2024

Business Segments by Countries/Regions

The Group continues to strengthen its global footprint by leveraging its diverse business segments to drive

growth across multiple industries and geographies. With more than 100 companies and 35 production sites

located primarily across the EU and the USA, we distribute our products to over 70 countries worldwide. Our

customer base ranges from government bodies and ministries of defence to large corporations, managed

through long-term contracts that ensure sustainable partnerships and operational stability.

The Group maintains a strong presence in Europe and the USA, with substantial revenue contributions from

its key regions. In FY24, Europe (excluding Ukraine) accounted for 43.5% of total revenues, reflecting the

Group’s continued dominance in its home markets. Ukraine contributed 42.8%, underscoring the

significance of defence-related business in the region. The USA accounted for 6.7% of revenues, driven by

strategic initiatives. The rest of the world represented 7.0%, demonstrating the Group’s ability to expand into

diverse international markets and reinforce its global outreach.

In terms of exposure to NATO and non-NATO markets, 49.6% of the Group’s total revenues originated from

NATO countries, while 50.4% came from non-NATO markets, with the vast majority being in Ukraine. 7.6%

of the total revenues come from non-NATO markets when excluding Ukraine. This distinction underscores

the Group’s strong positioning within NATO-aligned defence markets.

Business Segments by End Markets

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Annual Report 2024

The Group remains a key supplier to both defence and non-defence markets, with the Defence segment

continuing to dominate. In FY24, 83.8% of total revenues originated from the defence sector, reflecting the

Group’s role as a trusted partner for NATO, EU, and allied countries.

The civil market accounted for 9.7%, driven by the small-caliber ammunition business, which serves

hunters, sport shooters, and the broader civilian market. Meanwhile, the industrial non-defence market

contributed 6.5%, representing the Group’s activities in mobility, aerospace, and other engineering

programs. These include automotive and rolling-stock manufacturing, aerospace solutions for civilian

applications, and engineering projects supporting various industries.

Our main customers remain government institutions—primarily ministries of defence—along with large

corporate clients in the aerospace, transport, and industrial sectors.

Business Divisions

CSG’s product portfolio is very broad, and the Group’s organizational structure corresponds to this. CSG’s

companies are organized into divisions, which also represent the main pillars of the Group’s business:

Defence, Ammo+, Aerospace, Mobility, and Business Projects.

CSG Defence

The CSG Defence division brings together traditional and new defence companies operating in the Czech

Republic, Slovakia, and other European countries.

The activities by the portfolio of companies within the CSG’s Defence division include, for example, the

development, production, and sale of military and specialized wheeled and tracked vehicles, heavy off-road

trucks, weapons, and specialized weapon systems. Companies in this division also develop and

manufacture medium- and large-caliber ammunition for combat vehicles, artillery, and tanks, and sell

handguns, equipment, and so on for explosive ordnance disposal services. Additionally, they produce

engineering products for the automotive and aerospace industries, special mobile containers, and

accessories. The division’s offerings also include crew and support personnel training, logistics support,

and comprehensive technical lifecycle management.

*EXCALIBUR INTERNATIONAL a.s. is a separate entity that does not belong directly under the CSG Defence

division. However, due to the nature of its core business, the Group has decided to include it under the

defence segment for reporting purposes.

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Annual Report 2024

CSG Ammo+

The CSG Ammo+ division brings together companies engaged in the production and trade of small-caliber

ammunition.

Since 2024, it has newly included The Kinetic Group, and it brings together the leading American

manufacturers and brands of small-caliber ammunition for pistols, revolvers, rifles, and shotguns: CCI,

Federal, HEVI-Shot, Remington, and Speer. The Kinetic Group’s manufacturing facilities are located in

Minnesota, Arkansas, Idaho, and Oregon.

In addition to The Kinetic Group, Ammo+ division also includes Fiocchi Munizioni, an Italian manufacturer of

small-caliber ammunition with plants in Italy itself as well as the UK and the USA. It became a member of

CSG in 2022.

A significant portion of this division’s revenues is generated on the civilian market, where the customers are

mainly hunters and sport shooters. The remainder of sales is generated in the defence and law enforcement

segments in the US as well as other countries.

CSG Aerospace

CSG Aerospace is the division of the Group that brings together companies operating in the aerospace

industry.

Their products and services complement each other and offer a response to customer requirements in both

the civilian and military sectors. Thanks to product diversification, synergies, and cooperation among these

companies, as well as high flexibility in adapting their products to specific customer requirements, the

division’s companies have successfully built up significant positions among the global aerospace industry’s

controlling players.

CSG Mobility

This division brings together companies engaged in vehicle engineering, and particularly in automotive and

rolling-stock manufacturing.

The leader in automotive engineering is Tatra Trucks, the second-oldest truck manufacturer in the world,

with over 170 years of tradition in vehicle manufacturing. This company focuses on heavy vehicles for

extreme terrain and the most challenging weather conditions through its unique chassis concept. The

division’s flagship company in rolling-stock manufacturing is DAKO-CZ, one of the three largest European

manufacturers of brake systems and components for the world’s leading manufacturers and operators of

rolling stock, such as Siemens and Stadler. The division also includes the Tatra Trucks’ subsidiary Tatra

Metalurgie, CSG Mobility’s portfolio is suitably complemented by the manufacturer of containers and box

superstructures Karbox, the service company Truck Service Group, and Truck Machninery Group.

CSG Business Projects

The Business Projects division includes companies that fall outside CSG’s core business areas and yet are

important to the Group or have strong potential—or represent an interesting business opportunity.

Czechoslovak Group

Annual Report 2024

Its most significant representative is Armi Perazzi, a manufacturer of high-quality shotguns for sport

shooters and elite hunters. Another long-standing member is Elton hodinářská, the maker of the history-rich

Prim watches dating back to 1949. In 2020, the innovative Prague Fertility Centre IVF clinic was

incorporated into this division as well.

Our History in Milestones

Before the Birth of CSG

Late 14th century – The production of gunpowder and firearms began in Granada, Spain—a tradition still

drawn upon today by Fábrica de Municiones de Granada.

1816 – Eliphalet Remington II founded a firearms manufacturing company in the village of Ilion, New York,

USA—a tradition that continues with today’s small-caliber-ammunition producer still bearing the founder’s

name.

1816 – A machinery plant was established in Třemošnice, Czech Republic, which gradually evolved into

DAKO-CZ, now a manufacturer of braking systems and components for rail vehicles.

1850 – A carriage manufacturing business was founded in Kopřivnice, Czech Republic. It is now known

worldwide as Tatra, a producer of heavy off-road vehicles.

1876 – Giulio Fiocchi opened a factory in Lecco, Italy, for small-caliber-ammunition production, laying the

foundation for a prominent group that today also manufactures in the UK and the USA.

1957 – Young Italian gunsmith Daniele Perazzi founded a company near Brescia, Italy, bearing his name,

fulfilling his dream of crafting the world’s finest shotguns.

The CSG Era

1995 – Czech entrepreneur Jaroslav Strnad founded Excalibur Army, a company trading in military

equipment and technology, marking the inception of CSG.

2005 – Excalibur Army acquired its first production facility, a former military repair plant in Přelouč, Czech

Republic.

2008 – CSG’s founder expanded operations to Slovakia, securing long-term leases for several state-owned

defence industry companies and ensuring export contracts.

2010 – Jaroslav Strnad took control of DAKO-CZ, a Czech company manufacturing braking systems for rail

vehicles, thereby expanding into the railway industry.

2013 – Jaroslav Strnad, in cooperation with entrepreneur René Matera, acquired the renowned Tatra

automaker, quickly reviving it from a prior crisis.

2013 – Excalibur Army won a tender to sell military repair facilities in Šternberk, which soon became the

Czech Republic’s leading producer of military and specialized ground equipment.

2013 – Michal Strnad, Jaroslav’s son, became the CEO of the emerging group.

2014 – Companies controlled by Jaroslav Strnad were consolidated into a holding structure initially named

Excalibur Group, with Michal Strnad appointed as the Chairman of the Board of Directors a year later.

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Annual Report 2024

2016 – The holding was renamed Czechoslovak Group (CSG), a name it retains today.

2016 – CSG acquired new companies, including the radar manufacturer RETIA and the aviation repair firm

JOB AIR Technic.

2016 – TATRA DEFENCE VEHICLE (TDV) was established to develop and produce ground equipment, now

manufacturing the Pandur and TITUS wheeled armored vehicles.

2018 – Jaroslav Strnad transferred ownership of CSG to his son Michal and focused on founding CE

Industries, a new holding company.

2018 – CSG established its aerospace division, CSG Aerospace, incorporating the radar manufacturers

ELDIS and RETIA, as well as the air traffic control system developers CS SOFT and ATRAK.

2020 – CSG acquired its first Western European production company: it purchased Fábrica de Municiones

de Granada (FMG) from GDELS.

2022 – CSG acquired a majority stake in Fiocchi, a leading global ammunition manufacturer with operations

in Italy, the UK, and the USA, thereby becoming a global group.

2023 – CSG purchased a majority stake in the Italian family firm Armi Perazzi, a world-renowned

manufacturer of top-tier shotguns for sport shooting and hunting.

2024 – CSG announced the acquisition of a nitrocellulose production facility and an adjacent industrial park

in Lower Saxony, Germany, from the US company IFF.

2024 – CSG completed its largest acquisition to date, purchasing The Kinetic Group from US-based Vista

Outdoor, uniting leading US small-caliber-ammunition brands like Remington and Federal.

Our History in Words

The Origins of CSG

The history of CSG dates back to 1995, when EXCALIBUR ARMY was founded in the Czech Republic. The

company initially specialized in trading surplus military equipment and materials, sold through tenders from

the Czech Army and other NATO forces. Its founder and owner was Czech entrepreneur, Jaroslav Strnad.

As part of his strategic development and vertical integration activities, in 2005, Strnad acquired a production

facility—a bankrupt military repair plant in Přelouč. This step enabled the company to not only repair

acquired equipment but also increase its value.

In 2008, Strnad expanded into Slovakia, leasing several state-owned enterprises from the Slovak Ministry of

Defence. By securing export contracts, he stabilized their economic situation, preserved jobs, and

supported the continuation of Slovakia’s defense industry.

Business diversification led to an entry into the railway industry in 2010. Strnad acquired stakes in DAKO-CZ,

a global leader in manufacturing braking systems and components for rail vehicles, supplying major players

like Siemens, Alstom, and Bombardier.

The Acquisition of Tatra and the Formation of the Holding

A pivotal milestone in CSG’s growth and consolidation was the 2013 acquisition of a majority stake in the

automaker Tatra. This firm, the world’s third-oldest car manufacturer, known for heavy off-road vehicles,

Czechoslovak Group

Annual Report 2024

was in financial and operational distress. Within the same year, a successful restructuring, revival of

production, and new contracts led to a swift return to profitability. That same year, the acquisition of a

military repair facility in Šternberk, previously owned by the Czech Ministry of Defence, was completed.

This strategic move diversified Tatra’s production portfolio and secured export contracts, gradually

increasing employment. Today, the Šternberk plant is a key production site for EXCALIBUR ARMY and one

of Europe’s leading manufacturers of military ground equipment, significantly contributing to supplies of

heavy military hardware and equipment to Ukraine.

In 2014, the group began formalizing its holding structure, initially named Excalibur Group. In 2016, it was

renamed Czechoslovak Group (CSG), reflecting its international scope and honoring the historic industrial

tradition of the “MADE IN CZECHOSLOVAKIA” label, which retains a strong position on export markets in

Asia and Africa.

Michal Strnad’s Leadership and Divisional Structure

In 2013, Michal Strnad, son of Jaroslav Strnad, took over leadership of the emerging group, becoming its

CEO and, later, after the establishment of the holding structure, Chairman of the Board of Directors.

Having gained experience managing various parts of this group, he spearheaded a dynamic expansion

across Czech industry through strategic acquisitions and the establishment of new production entities.

Key acquisitions included JOB AIR Technic (aviation repairs) and RETIA (radar manufacturing). During this

period, CSG became one of the most active investors in Czech industry. Alongside acquisitions, the group

expanded its production base with the creation of TATRA DEFENCE VEHICLE in Kopřivnice, producing the

TITUS and Pandur wheeled armored vehicles. In 2017, further strategic additions included CS SOFT (an air

traffic control system developer) and ELDIS Pardubice (a radar manufacturer).

In 2018, a generational ownership transition took place. Jaroslav Strnad transferred 100% of CSG to his son

Michal, who had been managing it for five years. Jaroslav then focused on building CE Industries, a new

industrial group targeting the energy, food, recycling, and railway sectors.

A key strategic step was the introduction of a divisional structure within CSG. The first sub-holding, CSG

Aerospace, united aviation-focused companies, including the radar firms ELDIS Pardubice and RETIA, the

air traffic control developers CS SOFT and ATRAK, JOB AIR Technic, and tech startups focused on drones

and augmented reality.

This model evolved into CSG’s overall divisional structure, organized by key business segments:

CSG Aerospace – radar systems, aviation repairs, and air traffic control

CSG Defence – military ground equipment and large-caliber-ammunition production

CSG Mobility – automotive and railway transportation

CSG Ammo+ – small-caliber-ammunition production

CSG Business Projects – other entrepreneurial activities outside core sectors

This structure enables more efficient management, optimized investment flows, and better strategic

planning across the Group.

International Expansion and Strengthening Global Position

In recent years, CSG has pursued ambitious international expansion plans, significantly bolstering its global

market position.

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Annual Report 2024

In 2020, CSG entered Western Europe with the acquisition of the Spanish ammunition manufacturer FMG,

purchased from General Dynamics European Land Systems with Spanish government approval. In 2021, it

expanded beyond traditional industrial segments, acquiring a majority stake in Prague Fertility Centre, a

reproductive clinic.

The year 2022 marked a milestone as CSG surpassed €1 billion in revenue. It also completed its largest

acquisition to date, purchasing a majority stake in Fiocchi, a global small-caliber-ammunition producer, from

Italy’s Charme Capital Partners. With plants in Italy, the UK, and the USA, Fiocchi includes the renowned

Baschieri & Pellagri shotgun ammunition brand. This deal, approved by the US Committee on Foreign

Investment (CFIUS), strengthened CSG’s global presence and opened the US market.

In fall 2023, CSG agreed to acquire The Kinetic Group from Vista Outdoor, a publicly traded US company.

This group includes top US small-caliber-ammunition brands like Federal and Remington. Finalized in

November 2024 after competing with other investors, this acquisition boosted CSG’s growth, enhanced its

reputation in the USA, and added 3,400 US employees to its structure.

By late 2023, CSG had acquired the Italian family firm Armi Perazzi, a prestigious manufacturer of luxury

shotguns for sport shooters and hunters, enhancing its standing in the premium firearms segment.

In October 2024, CSG moved towards expansion into Germany and agreed to purchase a nitrocellulose

production plant and adjacent industrial park in Lower Saxony from International Flavors & Fragrances (IFF),

aiming at further strengthening the vertical integration in CSG ammunition production.

In 2024, CSG became a key player in the Czech Ammunition Initiative, led by the Czech government,

established to increase ammunition supplies to Ukraine. CSG and its companies played a critical role,

delivering one million artillery shells to Ukraine both within and outside the initiative, reinforcing its

geopolitical relevance and its ability to meet urgent defence industry demands.

Conclusion

In 2025, CSG celebrates 30 years of existence. From a trading company, it has grown into a diversified

global industrial holding, uniting prestigious brands and innovating in key sectors. CSG has successfully

expanded internationally and established itself as a strategic supplier of defence technologies to NATO

forces and Ukraine.

The acquisition of The Kinetic Group positioned CSG as a leader in small-caliber-ammunition in the Western

world and a major US employer. In all the countries where it operates, CSG pursues long-term investments

in production capacity, supporting both its business and local economies. It also actively integrates ESG

principles into its operations.

With its growth, CSG’s commitment to CSR has also increased. In 2024, CSG launched significant projects

in humanitarian aid, crisis response, culture, and employee nonprofit support. TATRA TRUCKS donated 12

specialized vehicles worth over €4 million to Czech emergency services for flood recovery, while

EXCALIBUR ARMY built a temporary bridge for the Czech Integrated Rescue System using its own bridge

systems. In February 2025, CSG established a foundation to oversee and expand its social responsibility

efforts.

The Group’s long-term goal remains sustainable growth through strategic investments in production and

acquisitions that complement its core segments. In alignment with its mission, CSG is strengthening its role

as a global industrial player, safeguarding democratic states’ security interests and investing in

technological innovation. Under Michal Strnad’s leadership, the focus remains on growing the group’s value

and ensuring its long-term stability on the global stage.

Czechoslovak Group

Annual Report 2024

Where We Operate

Czechoslovak Group

Annual Report 2024

Governance

General Meeting

The General Meeting (termed valná hromada in Czech) is the supreme body of CZECHOSLOVAK GROUP

a.s. (the “Company”). In light of the fact that the Company has a sole shareholder, namely CSG FIN a.s., as

of the date of this Annual Report, the General Meeting is not held. Instead, CSG FIN a.s. acts in the capacity

of the General Meeting in accordance with Section 12 of Czech Act No. 90/2012 Coll., as amended (the

Business Corporations Act). Any reference to the General Meeting within this document pertains to

decisions made by the sole shareholder in this representative capacity.

Decisions of CSG FIN a.s., in its capacity as the sole shareholder of the Company, must be made in writing,

signed by the representatives of the shareholder, and delivered to a member of the Board of Directors or to

the address of the registered office of the Company, or to an e mail address designated by the Board of

Directors.

The Board of Directors convenes the General Meeting at least once in each reporting period, while ensuring

it occurs no later than six months after the conclusion of the reporting period. Alternatively, a General

Meeting may be convened by a member of the Board of Directors or the Supervisory Board if it is deemed

beneficial for the interests of the Company.

Board of Directors

The Board of Directors (termed představenstvo in Czech) is the statutory body of the Company. Members

of the Board of Directors are appointed and recalled by the Company’s sole shareholder. In 2024, the Board

of Directors had seven members and elected its Chairman and two Vice-Chairmen from among its

Czechoslovak Group

Annual Report 2024

members. As of the date of this Annual Report, the Board of Directors has five members, as the terms of

office of Lukáš Andrýsek and David Štěpán as members of the Board of Directors have ended. The

Company is at all times represented by two members of the Board of Directors, one of whom must be the

Chairman or a Vice-Chairman of this Board. In the event that no Chairman or Vice-Chairmen of the Board of

Directors are elected, the Company shall be represented by two members of the Board of Directors in all

matters.

The Board of Directors is responsible for the business management of the Company. The scope of

competence of the Board of Directors includes making decisions in all matters that are reserved for the

Board of Directors pursuant to the Company’s Articles of Association, legal regulations, and decisions of

Company’s sole shareholder. A quorum is established when a majority of the Board of Directors’ members

are present. The consent of a majority of the present members of the Board of Directors is required for the

adoption of decisions, except for the election and recall of the Chairman and Vice-Chairmen of the Board of

Directors, for which a unanimous decision of all its members shall be required in accordance with the

Company’s Articles of Association.

All arrangements between the Company and the members of the Board of Directors related to the

performance of their offices are contained in their respective agreements on the performance of office or in

amendments thereto in accordance with Act No. 89/2012 Coll., the Civil Code, as amended, and Act No.

90/2012 Coll., the Business Corporations Act, as amended. These arrangements include also provisions on

remuneration.

As at December 31, 2024, the members of the Board of Directors of the Company were Michal Strnad as

Chairman, David Chour and Ladislav Štorek as Vice-Chairmen, and Petr Formánek, Zdeněk Jurák, David

Štěpán, and Lukáš Andrýsek as members.

As of the date of this Annual Report, the members of the Company’s Board of Directors are Michal Strnad as

Chairman, David Chour and Ladislav Štorek as Vice-Chairmen, and Petr Formánek and Zdeněk Jurák as

members. The term of office of Lukáš Andrýsek ended on January 13, 2025, and the term of office of David

Štěpán ended on February 25, 2025. The business address of the Board’s members is the current address

of the Company’s registered office, i.e., U Rustonky 714/1, Karlín, 186 00 Prague 8, Czech Republic.

__________________________________________________________________________

Michal Strnad

Chairman of the Board of Directors

since October 31, 2015

__________________________________________________________________________

Education, Experience and Other Relevant Information

Michal Strnad completed his secondary education at Anglické gymnázium, Střední odborná škola and Vyšší

odborná škola, s.r.o. From 2010 to 2013, he actively assisted within the business/project sector of

EXCALIBUR ARMY spol. s r.o. In 2014, he continued his professional engagement within the Group at CSGM

a.s., where he held the position of assistant to the project manager from 2014 to 2015.

In addition to his responsibilities on the Board of Directors of CZECHOSLOVAK GROUP a.s., a position he

assumed in 2015, Michal held the role of CEO at CSGM a.s. until 2019. As the current ultimate owner of CSG,

he has the key voice in determining the Group’s strategic direction.

__________________________________________________________________________

Czechoslovak Group

Annual Report 2024

David Chour

Vice-Chairman of the Board of Directors

since September 1, 2020

__________________________________________________________________________

Education, Experience, and Other Relevant Information

David Chour is a graduate of the Faculty of Economics and Administration at University of Pardubice. Over

the course of nearly two decades, he dedicated his professional efforts to the financial group Profireal

Group, where he entered the position of CEO in 2003 and assumed the role of Chairman of the Board of

Directors in 2007. Under his leadership, the Profireal Group evolved into a global player, successfully

expanding onto markets in various countries of Europe.

In August 2020, David began a new chapter in his professional career when he joined the Group as its CFO.

In September 2020, he was appointed Vice-Chairman of the Board of Directors of the Company. At the

beginning of 2023, he was entrusted with the role of Group COO.

__________________________________________________________________________

Ladislav Štorek

Vice-Chairman of the Board of Directors

member since September 1, 2022

__________________________________________________________________________

Education, Experience, and Other Relevant Information

Ladislav Štorek holds a law degree from the Faculty of Law at the Charles University. After his graduation,

he took the first steps on his professional journey as an associate and attorney at the American law firm

Altheimer & Gray, which subsequently became part of an international law firm SALANS and later on

Dentons. In 2002, he became a partner and, starting in 2008, he led its Prague office for a decade while

concurrently leading the Czech Dispute Resolution practice and managing the Bratislava office for several

years. In addition to these responsibilities, Ladislav was a member of European bodies of this firm. After

contributing his expertise for a period that cumulatively exceeded 25 years, he began pursuing a new

professional opportunity and joined the Czechoslovak Group as General Counsel.

Ladislav is a member of the Czech Bar Association. In his capacity as CSG’s General Counsel, he provides

strategic advice to its top management and the sole shareholder. His responsibilities include overseeing the

legal department’s operations and addressing all significant legal matters within the Group. His leadership

significantly contributes to the Group’s effective management and legal compliance. In January 2024,

Ladislav was appointed Vice-Chairman of the Board of Directors of the Company.

__________________________________________________________________________

Petr Formánek

Member of the Board of Directors

since November 4, 2019

Czechoslovak Group

Annual Report 2024

__________________________________________________________________________

Education, Experience, and Other Relevant Information

Petr Formánek holds a degree in Finance from the Prague University of Economics and Business.

He is a member of the Board of Directors of Czechoslovak Group (CSG) and Group Acquisitions Director. He

worked with his team on major foreign acquisitions of the Group, such as the acquisition of a majority stake

in Fiocchi Munizioni and others. He joined CSG from his position as a member of the Board of Directors of

Patria Corporate Finance, where he worked from 2005 to 2016. During his career, he has worked in

corporate banking and financial markets at ČSOB, Credit Lyonnais and Komerční banka.

He capitalized on his experience in corporate finance as a Managing Director at Waldeck Capital and Central

Asset Management Company. Petr Formánek graduated from the University of Economics in Prague and

started his career at ČSOB. In 1987 he completed a training programme at the World Bank.Since 2016, Petr

holds the role of Group Director of

M&A__________________________________________________________________________

Zdeněk Jurák

Member of the Board of Directors

since January 1, 2024

__________________________________________________________________________

Education, Experience, and Other Relevant Information

Zdeněk Jurák holds a degree from Mendel University in Brno and has completed an internship at the

University of Illinois in the USA. He is ACCA/DipIFR certified and holds certification as a qualified accounting

expert.

With over eight years of experience at KKCG, an international investment group, Zdeněk has gained

valuable insights into financial management in both domestic and foreign settings. His areas of expertise

include mergers and acquisitions, bond issues, and guiding companies through capital markets

preparations. During his time at KKCG, Zdeněk played a key role in implementing new ERP and CPM

systems and handled negotiations and communication with auditors. Prior to this tenure, Zdeněk worked at

Generali PPF Group and Mazars.

In June 2023, Zdeněk Jurák joined CSG as Chief Financial Officer (CFO), succeeding David Chour, who

assumed the role of Chief Operation Officer (COO) of the Group in the same year.

Supervisory Body

The Supervisory Board (termed dozorčí rada in Czech) is the supervisory body of the Company. The role of

the Supervisory Board is to monitor and supervise the activities of the Board of Directors and ensure that the

Company’s business activities are carried out properly. This includes monitoring compliance with legal

regulations, the Articles of Association, and the resolutions of the General Meeting or those of the

Company’s sole shareholder, as applicable.

As of December 31, 2024, the members of the Supervisory Board were Michaela Katolická as Chairman, and

Rudolf Bureš and Aleš Klepek as members.

Czechoslovak Group

Annual Report 2024

The business address for all members of the Supervisory Board is as follows: U Rustonky 714/1, Karlín, 186

00 Prague 8, Czech Republic.

__________________________________________________________________________

Michaela Katolická

Chairman of the Supervisory Board

since March 1, 2023

Education, experience and other relevant information

Michaela Katolická completed her education with a Doctor of Juridical Science degree (the Czech JUDr.

degree) from Charles University in 2014, complementing an academic journey that included studies in EU

Law at Université Toulouse 1 Science Sociales and the attainment of a Master’s Degree from the University

of West Bohemia in Pilsen.

Commencing her professional career as a paralegal at the District Office in Prague 1, she subsequently

contributed her legal expertise to the Financial Analytical Office, specializing in the fight against money

laundering and terrorist financing.

Since joining CSG in 2010, Michaela has held a variety of roles, including Compliance Specialist and Director

of Security and Compliance. Currently, Michaela Katolická is the CEO of CSGM a.s.

__________________________________________________________________________

Rudolf Bureš

Member of the Supervisory Board

since October 4, 2018

Education, experience and other relevant information

Rudolf Bureš holds a degree from the Faculty of Economics (i.e. the school of economics) within the

University of Economics in Prague. In 2015, he successfully completed the Master of Laws (LL.M.)

educational program with a focus on corporate law at the Law and Legal Science Institute in Prague.

From 1995 to 2003, Rudolf Bureš worked at Eurotel Praha spol. s r.o., where he co-founded its Treasury

department. He further enhanced his managerial and specialized expertise in the business groups Unipetrol

and AWT, where he worked from 2003 to 2008 and 2009 to 2015 respectively and held directorial positions

in Treasury and Risk Management. From 2016 forward, he held a managerial position in the advisory

company PwC.

In 2017, Rudolf took on the role of Group Treasurer at CSG. Between 2021 and 2023, he served as CFO and

CEO of DAKO-CZ, a.s., followed by a role as COO of the Group’s CSG Mobility division. Currently, Rudolf is

the Group’s Cash Flow Management Director.

__________________________________________________________________________

Aleš Klepek

Member of the Supervisory Board

Czechoslovak Group

Annual Report 2024

since September 2, 2020

Education, experience, and other relevant information

Aleš Klepek graduated from the Military Technical University in Liptovský Mikuláš, specializing in

radiolocation. He furthered his education with post-graduate studies at IEHEI in Nice, focusing on

international relations and European studies.

Throughout the majority of his career, he has been actively engaged in international relations, participation

in bilateral cooperation, and contributions to the processes related to the preparations for the Czech

Republic’s accession to NATO. Aleš concluded his activities in this field at a diplomatic post at the Czech

Embassy in France. In 2008, he joined the Czech Ministry of Defence and subsequently held various

positions in state administration, including roles as the director of the Defence Minister’s cabinet, as a

deputy minister, and later in the cabinet of the Czech Prime Minister, where he remained until the end of

2011. In 2006, French president Jacques Chirac awarded him the National Order of Merit for his

contributions to the development of CzechFrench relations. Aleš Klepek also served as a member of the

Supervisory Board of ČEZ a.s., where he was appointed as the chairman of its Strategic Committee.

Since January 2020, Aleš has held the position of member of the Board of Directors of CSG AEROSPACE

a.s., and he is currently also the CEO of the Group’s CSG Aerospace division. His responsibilities here

include the establishment of the organizational, procedural, and executive framework for the industry pillar

of the Group.

Audit Committee

The Audit Committee (termed výbor pro audit in Czech) performs the following activities, without effect on

the responsibilities of the members of the Board of Directors and the Supervisory Board:

1. it monitors the effectiveness of internal controls and the risk management system;

2. it monitors the effectiveness of internal auditing and ensures its functional independence;

3. it monitors the preparation process for financial statements and consolidated financial statements;

4. it approves the provision of other non-auditing services;

5. it monitors the process for the obligatory audit; and

6. it performs other activities in accordance with the Act on Auditors and directly applicable EU regulation.

The Audit Committee has three members appointed by the Company’s General Meeting. Members of the

Committee cannot be substituted. Members of the Audit Committee must also be independent and

professionally qualified.

The members of the Audit Committee as of December 31, 2024, are:

- Olga Nahodilová, Chairman of the Audit Committee

- Ivana Hubáčková, Member of the Audit Committee

- František Jirásek, Member of the Audit Committee

Sustainability Committee

The oversight of sustainability-related impacts, risks, and opportunities within the Group is primarily

managed by the Company’s Board of Directors, with a dedicated board member responsible for

sustainability-related topics. To support informed decision-making in this area, the Board of Directors is

advised by the Sustainability Committee (termed výbor pro udržitelnost in Czech), which is led by the Chief

Sustainability Officer (CSO). Responsibilities of the Sustainability Committee:

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Annual Report 2024

- Strategic direction in the area of ESG – development of an ESG strategy, defining the sustainability

vision and goals, proposing and discussing key sustainable business decisions for approval by the

Board of Directors

- Achievement of sustainability and ESG goals

- Regulatory compliance – supervising adherence to legal obligations in the area of sustainability and

ESG ensuring that the Company and its subsidiaries are adequately prepared to meet these

obligations

- Sustainability reporting – providing regular reports on sustainability-related matters to the Board of

Directors, identifying and addressing emerging sustainability challenges, and reporting on

sustainability matters in accordance with applicable legal regulations.

Members of the Sustainability Committee as of December 31, 2024:

- Serge Damian – Chief Sustainability Officer, Member of the Sustainability Committee

- David Chour – Member of the Sustainability Committee

- Zdeněk Jurák – Member of the Sustainability Committee

- Michaela Katolická – Member of the Sustainability Committee

- Kateřina Petko – Member of the Sustainability Committee

- Alena Kozáková – Member of the Sustainability Committee

- Milan Franc – Member of the Sustainability Committee

Leadership Team

THE GROUP’S MANAGEMENT TEAM

Management team:

Michaela Katolická, Chief Executive Officer of CSGM a.s.

Responsible for company operations & ICT.

Alena Kozáková, Human Resources Director of CSG

Responsible for human resource management for the Group’s companies.

Milan Matoušek, Director of Strategic Recruitment

Responsible for strategic recruitment for key management positions.

Jakub Zdeněk, Production Director of CSG

Responsible for the areas of production and production investments, as well as production process

efficiency and quality.

Milan Cícer, Director of Security and Compliance

Responsible for data and information security within the Group and for maintaining an effective CSG

compliance policy.

Serge Damian, Chief Sustainability Officer

Responsible for ESG and sustainability within the Group.

Milan Franc, Chief Executive Officer of CSG DEAL a.s.

Responsible for strategic procurement, investments, and supplier tenders for the Group.

Tomáš Vlček, Chief Operation Officer of CSG Aerospace division

Responsible for operational matters at the CSG Aerospace division.

Andrea Křížová, Financial Director of CSG Aerospace division

Responsible for the financial management of the companies within the CSG Aerospace division.

Czechoslovak Group

Annual Report 2024

Jan Marinov, Chief Executive Officer of CSG Defence division

Responsible for the management of the companies within the CSG Defence division.

Róbert Verbich, Financial Director of CSG Defence division

Responsible for the financial management of the companies within the CSG Defence division.

Jan Hamáček, Director, External Relations

Responsible for the management of the Group’s external relations.

Kateřina Petko, Group Director of Corporate Communication and Marketing

Responsible for communication and marketing within the Group.

Stanislav Kuba, Investment Director CSG

Responsible for the Group’s investment activities.

Organisational Structure

Our Vision, Mission, and Values

We are building a strong global brand, at the pinnacle of modern industry. We have no lack of business

drive, yet we are also driven to act ethically, with a sustainable future in mind. We deliver products and

Czechoslovak Group

Annual Report 2024

technologies worldwide that help ensure a safer and more stable future. We are proud that the products we

supply to armed forces, emergency responders, and end users protect lives, property, and the basic values

of civilization. We have the ambition of becoming a world leader in industrial innovation and sustainable

development.

Our goal is to continue successfully developing a broad portfolio of products and services and establishing

long-lasting and sustainable partnerships. We develop innovations to improve the lives of both current and

future generations, and we are progressively integrating breakthrough 21st century technologies into our

solutions: this means artificial intelligence, robotics, and elements of augmented and virtual reality. In this

process, we rely on team players – smart and agile employees, corporate teams, and companies around the

world.

CSG’s Values

Stability

We are a reliable partner for our customers, suppliers, and employees worldwide

Pride

We are proud of the industrial heritage of our ancestors, upon which we are building our success

Innovation

We deliver innovative solutions, to which we then apply breakthrough technologies one by one

Drive

We continuously seek new opportunities for our growth, which is sustainable with respect to social

responsibility and ethics

Security

As expressed by the symbolic shield in the CSG logo: through our products we are helping to protect our

world and its core values against security threats.

Our Group’s values are aptly represented by our slogan: Heart. Heritage. Horizon. It expresses how we put

our heart into our business, respecting the legacy of the predecessors whose work we are building upon,

while also looking to the future – beyond the horizon of today.

Business Strategy

Our strategic goal is to be a well-positioned multinational manufacturer in the Defence & Aerospace and

Small Caliber Ammunition segments. Our consistent delivery of our proven strategy and the way in which

we leverage our capacities, use vertical integration, and solidify our position as a significant multi-national

defence group all support our ability to grasp opportunities on both existing and new markets.

We have multi-jurisdictional operational expertise, as evidenced by our strong production growth, product

innovation credentials, and track record of operational excellence. All of this has resulted in strong

performance and organic growth in 2024, with high cash flow generation. We plan to continue investing in

organic growth and inorganic initiatives: increasing synergies in our existing operations, entering new

markets, and making strategic bolt-on acquisitions.

Operational Efficiency & Integration

We are highly focused on operational efficiency and profitability as important drivers of our cash flow, and

we aim to foster a culture focused on performance and efficiency across our operations. We are able to

apply the benefits gained from sharing best practices across the Group, such as product innovations and

developments, CRM initiatives, and procurement strategies, in order to drive operational efficiencies and

Czechoslovak Group

Annual Report 2024

accelerate growth. We aim for purchasing, marketing, and cost synergies across our markets and pursue

significant cost savings in areas such as key technologies and content delivery, leveraging our business

scale and purchasing power. We have a strong track record of increasing the profitability of the businesses

we acquire.

Organic Growth

Just as in previous years, we continued our strong organic growth in 2024, driven mainly by our CSG

Defence and CSG Aerospace divisions. We successfully expanded our production capacities and enhanced

our vertical integration and our work through innovations, increased effectiveness, and supply chain

planning. Through the long-term contracts for our products and components within our backlog, we are

able to focus on further sustainable growth.

Innovation and Technology

We are constantly assessing opportunities to optimize and expand our product selection, aiming to offer a

full range of best-in-class products.

Among other offerings, one of our companies, EXCALIBUR ARMY, has developed the Morana self-propelled

gun howitzer, which combines a car chassis and an independent tower artillery system with armor

protection for the crew. Its combination of lighter self-propelled artillery systems, heavy artillery systems

with battle towers, a unique fire control system, and a diagnostic system enables autonomous fulfillment of

combat tasks, high mobility, and a high level of crew protection. Meanwhile, the company’s R&D has

brought results such as the second generation of the Patriot 4×4 MRAP-class vehicle, as well as other new

military vehicles, which make it possible to upgrade existing systems and develop new ones so as to ensure

the long-term operability of all products in future missions.

Another of our companies, TATRA DEFENCE VEHICLE, has likewise continued to innovate and improve the

products under its portfolio. The development of the Pandur II 8×8, TITUS 6×6, and the new TADEAS in 6×6

and 4×4 versions, together with the development of armored cabins for the Tatra model series, which

provide ballistic protection of up to level 4 under the STANAG certification, are key continuing projects at

this company.

MSM GROUP has expanded its capacities for producing 155-millimeter artillery ammunition through a new

production line that it has opened in Slovakia. This group’s new technologies and advanced robotic lines,

along with the automation of its production process and the modernization of its entire infrastructure, are

among the results from its continuous R&D activities in the area of large-caliber ammunition.

The CSG Aerospace division has developed an augmented reality product named Lumnio, which brings

together synergies from remote service operations and allows less experienced technicians to perform

complex tasks under remote guidance from experts. This minimizes the need for travel and enhances

operational efficiency.

Through a joint venture, TATRA TRUCKS from the CSG Defence division has developed a vehicle called the

Tatra Force e-Drive Hybrid, as well as a special Tatra Force vehicle with an automated driving system and

remote control. The new hybrid technology used enables the driver to choose between operation using only

the electric motor, with a range of up to 70 km, or the internal combustion engine power alone, or the

internal combustion engine and electric motor in parallel.

Fiocchi and Baschieri & Pellagri, in cooperation with the University of Bologna, have maintained the use of

100% biodegradable materials and further developed the new Green Core ammunition. Its production is

already in place, and in addition to technical performance that is in line with or better than using traditional

plastic materials, it provides a new environmental generation of sport-shooting ammunition.

Czechoslovak Group

Annual Report 2024

Inorganic Growth

Our inorganic growth strategy has two levels: making strategic bolt-on M&A and entering new markets.

Expansion on the small-caliber-ammunition markets

In November 2024, CSG concluded its acquisition of The Kinetic Group, a leading small-caliber-ammunition

manufacturer in the US for commercial and law enforcement markets.

Through this acquisition and together with Fiocchi Munizioni, CSG has significantly strengthened its position

on the small-caliber-ammunition markets in the US as well as Europe.

Entering nitrocellulose production

In October 2024, CSG signed an agreement to acquire a nitrocellulose plant in Germany as part of our

vertical integration strategy and to secure our supply chain. Under the agreement, CSG is also to take over a

large industrial park around the nitrocellulose factory.

The transaction is expected to be closed in the first half of 2025, subject to customary closing conditions,

including regulatory approvals.

Strengthening of CSG’s technology portfolio

In September 2024, CSG expanded its augmented reality capabilities with the acquisition of smARtoo, a

startup that develops solutions to support field workers, particularly in maintenance.

Through this acquisition, CSG’s Aerospace division is now positioned as a leader in the Czech augmented-

reality market.

Czechoslovak Group

Annual Report 2024

Our exceptional financial performance in 2024 highlights robust growth across our geographies and product

segments, underscoring the success of our strategic initiatives and operational efficiencies.

Financial Review

Statement from the CFO

I am very pleased to present another year of excellent financial results. We achieved remarkable growth,

robust performance, and strong cash flow generation.

We achieved significant year-over-year growth across our key financial metrics, with total revenues

increasing by 131.1% and Operating EBITDA rising by 145.9% compared to last year. This growth was driven

by our strategic initiatives, operational efficiency, and the impact of ongoing geopolitical tensions. These

factors presented new opportunities for our business, allowing us to capture additional market share and

further strengthen our position in the industry.

In addition to external factors, our strong internal execution remained a key driver of success. Our operating

income and net profit surpassed expectations, reflecting our disciplined approach to cost management,

operational excellence, and continued investments in innovation.

A significant milestone this year was the successful acquisition of The Kinetic Group. This strategic move

enhances our product offerings, expands our market presence, and positions us for continued growth on

both new and existing markets. The integration of The Kinetic Group is progressing well, and we expect it to

generate significant synergies, creating further value for the Group in the coming years. Together with The

Kinetic Group, we achieved total 2024 revenues of €5,176.7 million and Operating EBITDA of €1,389.6

million on a pro forma basis.

In October 2024, we entered into a purchase agreement with IFF, a US publicly traded company, to acquire

its nitrocellulose business, associated plant, and the Walsrode Industrial Park in Lower Saxony, Germany.

The closing is expected in the second quarter of 2025 and will further strengthen the Group’s vertical

integration.

Our ability to generate strong cash flow from operations remains a cornerstone of our financial strength,

providing the flexibility to reinvest in high-growth areas while continuously reducing leverage. This healthy

cash flow reflects our strong operational performance, prudent financial management, and unwavering

commitment to long-term value creation.

2024 was also a milestone year for financing. In addition to securing financing for the acquisition of The

Kinetic Group, we successfully refinanced our entire Group with over €1.5 billion from the bank markets and

issued over €740 million in long-dated senior secured notes. This included our first US-dollar bond

issuance, diversifying our funding sources, extending our debt maturities, and simplifying our capital

structure. At the same time, our net leverage ratio remained stable year-over-year, staying below 1.5x.

The significant bond issuance and financing facilities secured underscore the strength of our business and

credit profile, as well as the advantages of having access to multiple sources of capital. I would like to

extend my gratitude to all our financing partners for their strong support as we continue to pursue and

execute our growth strategies.

We continuously evaluate various financing options and closely monitor market conditions, considering our

current strategic objectives, prospects for future access to capital, as well as our existing cost of capital and

Czechoslovak Group

Annual Report 2024

debt maturity profile. In this regard, we may, from time to time, pursue new credit facilities, access the debt

capital markets, incur additional indebtedness, or engage in liability management transactions to redeem,

refinance, or repay existing indebtedness. Any such transactions would be aimed at optimizing our capital

structure and liquidity, ensuring continued development and long-term growth.

Management Discussion & Analysis

The financial and operating information contained in this “Management Discussion & Analysis” (“MD&A”)

comprises information of CZECHOSLOVAK GROUP a.s. (the “Company” and, together with its subsidiaries,

joint ventures and associates, “the Group”, or “we”).

You should read the MD&A together with the Group’s consolidated financial statements for the year ended

December 31, 2024. The consolidated financial statements have been prepared in accordance with the

International Financial Reporting Standards as adopted by the European Union.

This MD&A contains certain forward-looking statements, which are based on assumptions about the Group’s

future business. The Group’s actual results could differ materially from those contained in forward-looking

statements as a result of many factors, including, but not limited to, those described under “Forward-

Looking Statements”.

Financial Track Record

In 2024, we achieved record-setting financial performance, underscoring our continued commitment to

enhancing production quality, driving expansion, and fueling growth across our diverse geographies and

product segments. Our sales and operating EBITDA more than doubled year-over-year, with the majority of

this growth attributable to robust organic expansion. While the acquisition of The Kinetic Group was finalized

late in the year, contributing only one month of results to our consolidated figures, the exceptional

performance of our core operations remains the primary catalyst for this outstanding financial achievement.

Revenues & Operating EBITDA

Revenues (€ million)

Operating EBITDA (€ million)

Czechoslovak Group

Annual Report 2024

In 2024, our consolidated total revenue reached €4,008.6 million, marking a 131.1% increase compared to

the prior year, primarily driven by significant growth within the defence segment. Operating EBITDA

amounted to €1,079.2 million, maintaining a robust EBITDA margin of 26.9%, consistent with the margin

achieved in the previous year, reflecting the continued strength and operational efficiency of our business.

Revenues increased by €2,274.2 million, i.e. 131.1%, arriving at €4,008.6 million. Operating EBITDA

increased by €640.4 million, i.e. 145.9%, to €1,079.2 million.

Operating EBITDA was primarily driven by the exceptional performance of the defence segment, while we

successfully maintained an EBITDA margin of 26.9%. This was achieved through effective control of our

operating costs, despite an increase in direct costs, highlighting our ability to sustain profitability and

operational efficiency.

Czechoslovak Group

Annual Report 2024

Operating Costs Structure

Operating costs experienced a significant increase in 2024, driven by the Group’s accelerated expansion

and increased production capacity. The Cost of Goods Sold (COGS) rose substantially, reaching €2,157.7

million in FY24, compared to €840.8 million in FY23, accounting for 73.7% of total operating costs, up from

64.9% the previous year. This increase was primarily attributable to higher production volumes and rising

material costs. Service costs also experienced a notable rise, reaching €442.3 million in FY24, compared to

€245.3 million in FY23. However, as a percentage of total costs, service costs decreased to 15.1% from

18.9%, reflecting improved cost efficiency. Staff costs increased to €286.2 million in FY24 from €194.0

million in FY23, representing 9.8% of total operating costs, down from 15.0% the previous year, highlighting

the effective management of workforce-related expenses. Other income and expenses rose to €43.3 million

in FY24, up from €15.6 million in FY23, largely reflecting the overall expansion of the Group’s operations

and increased business activities. Overall, total operating costs more than doubled year-over-year, reaching

€2,929.5 million in FY24, up from €1,295.6 million in FY23.

Net Working Capital Trend

Czechoslovak Group

Annual Report 2024

The trend in net working capital (NWC) reflects the production cycles and stability of the Group’s cash-flow

generation. The ratio -of NWC to last-twelve-months (LTM) revenues follow a consistent pattern year-over-

year, highlighting the Group’s ability to effectively manage liquidity and working capital during peak

production periods, thereby ensuring financial stability. The December 2024 figures incorporate the

working-capital position of The Kinetic Group, with calculations made on a pro-forma basis to align with the

expanded scale of operations.

Leverage

The Company’s leverage position reflects a strategic approach to financing growth while ensuring financial

stability. The Group increased its gross debt from €1,137.4 million in December 2023 to €3,017.2 million in

Czechoslovak Group

Annual Report 2024

December 2024. This increase was primarily driven by the financing of The Kinetic Group acquisition and

the refinancing of the Group’s entire indebtedness, resulting in an overall change of its capital structure.

Despite this, the Group’s effective management of growth, strong performance, and robust cash generation

enabled a reduction in its gross leverage from 2.6x in December 2023 to 2.2x in December 2024, while

maintaining a consistent net leverage position of 1.3x year-over-year.

Cash Flows

The table below presents a summary of our cash flows for the periods indicated.

Year ended December 31

€ million

2024

2023

Net cash from operating activities

856.1

199.1

Net cash (used in) / from investing activities

(2,082.6)

(70.5)

Net cash (used in) / from financing activities

1,919.1

190.7

Net increase / (decrease) in cash and cash equivalents

692.5

319.4

Cash and cash equivalents at beginning of year

563.9

241.7

Foreign exchange rate gains / (losses) from the translation of cash and cash equivalents

(7.9)

2.8

Cash and cash equivalents at end of period

1,248.5

563.9

Net Cash from Operating Activities

The net cash from operating activities for FY24 amounted to €856.1 million, a significant increase from

€199.1 million in FY23. This increase was primarily driven by higher operating profits and substantial positive

working capital movements. Cash generated from operating profits rose to €992.3 million (inflow) in FY24,

compared to €422.0 million in FY23. Working capital movements contributed an outflow of €50.9 million in

FY24 (vs. an outflow of €170.2 million in FY23), primarily reflecting the Group’s increased scale of

operations and efficient working capital management. Income tax payments also increased to €85.4 million

in FY24, compared to €52.6 million in the prior year. Overall, the increase of €656.9 million, or 330.1%,

reflects the Group’s strong underlying profitability and improved cash conversion in 2024.

Net Cash Used in Investing Activities

Net cash used in investing activities totaled €2,082.6 million (outflow) for FY24, compared to €70.5 million

(outflow) in FY23. This substantial increase was primarily attributable to the acquisition of investments in

subsidiaries, amounting to €2,104.4 million (outflow), reflecting major strategic acquisition completed during

the year. Other key items included investments into property, plant, equipment, investment property, and

intangible assets totaling €116.8 million (outflow), and loans provided of €35.6 million (outflow). These

outflows were partially offset by proceeds from the repayment of loans (€122.2 million inflow), interest

received (€39.8 million inflow), and disposal of subsidiaries (€7.0 million inflow). Compared to FY23, the

investing cash outflow increased by €2,012.1 million, primarily driven by the acquisition executed in 2024.

Net Cash from Financing Activities

Net cash from financing activities amounted to €1,919.1 million (inflow) for FY24, compared to €190.7 million

(inflow) in FY23. This sharp increase reflects a significant expansion in financing to support the Group’s

strategic acquisitions and investments. The inflow was primarily driven by proceeds from borrowings of

€1,405.5 million and bond placements totaling €770.7 million. These were partially offset by repayments of

Czechoslovak Group

Annual Report 2024

borrowings (€246.5 million), bond redemptions (€51.7 million), and interest paid (€79.3 million). In addition,

other equity contributions of €214.2 million further strengthened financing flows. The net increase of

€1,728.4 million reflects the Group’s active and diversified funding strategy in 2024.

Pre-tax Operating Cash Flow (€ million)

Pre-tax operating cash flow for FY24 amounted to €911.4 million (inflow), marking a significant increase

from €194.3 million in FY23. This strong result underscores the Group’s robust earnings generation and

continued discipline in managing its cash position.

Operating EBITDA more than doubled year-on-year, reaching €1,079.2 million in FY24, compared to €438.8

million in the prior year. This surge in profitability served as the key driver of improved cash flow

performance.

The change in net working capital amounted to an outflow of €50.9 million, a notable improvement

compared to the €170.3 million outflow in FY23. The reduced working capital requirement reflects enhanced

operational efficiency and more balanced inventory and receivables management, even amid continued

business growth.

Capital expenditure (CapEx) totaled €116.8 million in FY24, up from €74.2 million in the prior year. These

investments supported the Group’s strategy to modernize its infrastructure, scale up production capacity,

and invest in technology upgrades that will sustain long-term operational competitiveness.

As a result, the Group achieved a nearly fivefold increase in pre-tax operating cash flow, reinforcing its

strong liquidity profile and positioning it well to capitalize on future strategic opportunities while continuing

to fund its growth initiatives.

Czechoslovak Group

Annual Report 2024

Capital Structure

The table below presents a breakdown of the Group’s gross debt as of the dates indicated, providing an

overview of its financing structure, including term loans, revolving credit facilities, bonds, and leasing. It

reflects the composition and development of the Group’s Capital Structure over time. This increase in

financing reflects the Group’s strategic investments and expansion efforts, ensuring sufficient capital to

sustain growth while maintaining financial flexibility.

Year ended December 31

€ million

2024

2023

Term loans

1,462.9

597.1

Revolving Credit Facilities

449.6

160.4

Bonds

1,005.7

337.4

Leasing

99.0

42.5

TOTAL

3,017.2

1,137.4

Backlog

The Group continues to demonstrate strong performance in the defence segment, underpinned by a robust

backlog that significantly enhances revenue visibility and supports its commitment to sustained top-line

growth. As of December 31, 2024, the total backlog exceeded €11 billion—nearly triple the amount recorded

in the previous year. This remarkable increase highlights the Group’s success in securing large-scale

contracts across its key business divisions, reinforcing its growth strategy in the defense sector.

In response to the increasing demand for ammunition, the Group is actively driving growth in land-systems

products, aligning with its long-term strategy for strengthening its comprehensive defence portfolio and

ensuring the sustainability of revenue streams through diversified product offerings.

Comparison of Results

The year 2024 represented a significant milestone in the Group’s financial performance, achieving record

growth in both revenue and profitability. This remarkable growth was largely driven by the robust

performance of the defence segment and the full integration of recent acquisitions. The Group’s strategic

market expansion and ability to seize key opportunities have solidified its position as one of the key players

in the industry, demonstrating resilience and adaptability in a dynamic global market.

Year ended December 31

Change

€ milion

2024

2023

Abs

Revenues

4,008.6

1,734.4

2,274.2

131.1%

Cost of sales

(2,157.7)

(840.8)

(1,316.8)

156.6%

External costs

(442.3)

(245.3)

(197.0)

80.3%

Employee benefits costs

(286.2)

(194.0)

(92.2)

47.6%

Depreciation/amortisation

(66.3)

(60.7)

(5.6)

9.3%

Other operating income

61.0

18.1

43.0

237.6%

Czechoslovak Group

Annual Report 2024

Other operating expenses

(104.3)

(33.6)

(70.7)

210.0%

PROFIT / (LOSS) form operating activities

1,012.9

378.1

634.7

167.9%

Finance income

165.8

23.2

142.7

616.3%

Finance expense

(378.3)

(104.1)

(274.2)

263.4%

Profit/(loss) from financial instruments

43.5

(20.7)

64.2

(310.7%)

Net finance income/(expense)

(169.0)

(101.6)

(67.3)

66.3%

Share of profit of equity accounted investees, net of tax

(0.3)

0.6

(0.9)

(146.3%)

Gain/(loss) on disposal of subsidiaries and special purpose entities

2.2

1.8

0.5

26.0%

PROFIT / (LOSS) before income tax

845.8

278.9

566.9

203.2%

Income tax

(212.5)

(68.7)

(143.7)

209.2%

PROFIT / (LOSS) from continuing operations, net of income tax

633.4

210.2

423.2

201.3%

PROFIT / (LOSS) attributable to non-controlling interests

(107.3)

(36.2)

(71.2)

196.8%

PROFIT / (LOSS) FOR THE PERIOD (attrib. to equity holders of the Company)

526.1

174.1

352.0

202.2%

Revenues

Revenues increased by €2,274.2 million, or 131.1%, to €4,008.6 million in FY24 from €1,743.4 million in

FY23. This significant increase was primarily driven by the continued strong performance of the CSG

Defence division and supported by the single-month contribution of The Kinetic Group following its

acquisition late in the year.

Breakdown of Revenues by Country/Region

Year ended December 31

€ million

2024

2023

Czech Republic

545.2

247.2

Slovakia

135.7

75.1

European Union

1,063.6

560.4

United States of America

268.8

230.8

Indonesia

102.3

57.1

Ukraine

1,714.5

399.4

Other

178.4

164.4

Total

4,008.6

1,734.4

The Group’s revenue growth was geographically diversified, with particularly notable increases in the

European Union and Ukraine. Revenues from the Czech Republic nearly doubled to €545.2 million in FY24,

up from €247.2 million in FY23, driven by strong domestic demand. Slovakia saw an 80.7% increase,

reaching €135.7 million, compared to €75.1 million. The European Union overall also experienced substantial

growth, with revenues rising by 89.8% to €1,063.6 million, up from €560.4 million. In the US, revenues grew

by 16.5% to €268.8 million, up from €230.8 million, primarily due to inorganic growth following the

acquisition of The Kinetic Group. Indonesian revenues increased by 79.2% to €102.3 million, compared to

€57.1 million. Ukraine emerged as a standout performer, with revenues more than quadrupling from €399.4

million to €1,714.5 million, driven by significant demand within the defence sector. Other markets contributed

€178.4 million, reflecting steady growth from €164.4 million in the prior year.

Cost of Sales

Czechoslovak Group

Annual Report 2024

Cost of sales increased by €1,316.8 million, or 156.6%, reaching €2,157.7 million in FY24. This rise reflects

the scale of the business expansion and higher production volumes as the Company increased output in

2024 to meet growing demand. Despite higher material, energy, and logistics costs, the Company

successfully maintained profitability through rigorous cost controls, process optimization, and strategic

sourcing. The ability to manage input costs effectively while upholding high production standards casts a

positive light on the Group’s operational efficiency and financial discipline.

External Costs

Service costs increased by €197.0 million, or 80.3%, reaching €442.3 million in FY24. While absolute costs

rose due to higher production capacity and increased use of outsourced services, their proportion of total

revenues declined, reflecting strong operating leverage. The Company successfully streamlined service

expenditures through enhanced contract negotiations, optimized use of external services, and the

leveraging of economies of scale. This reduction in relative service costs underscores the Group’s ability to

grow efficiently, ensuring that additional revenues contribute to improved margins and higher profitability.

Employee Benefits Costs

Personnel expenses increased by €92.2 million, or 47.6%, reaching €286.2 million in FY24. This rise was

primarily driven by the hiring of additional employees to support growth and the full-year consolidation of

The Kinetic Group. As the Group continues to expand, its workforce has been strategically strengthened

with skilled professionals, ensuring operational excellence and enhanced production capacity. Despite the

increase in personnel expenses, their proportion to sales remained stable, demonstrating effective cost

management and productivity improvements across various functions.

Depreciation/Amortization

Depreciation and amortization increased by €5.6 million, or 9.3%, reaching €66.3 million in FY24. This

increase reflects ongoing investments in production infrastructure, modern equipment, and advanced

technologies to support the Company’s growth trajectory. By reinvesting in critical assets, the Company

ensures long-term operational efficiency and capacity expansion, preserving its competitive edge in a high-

demand market. These strategic capital expenditures are expected to drive future profitability and bolster

the Group’s ambitious growth plans.

Other Operating Income and Expenses

Other operating income increased by €43.0 million, or 237.6%, to €61.0 million, driven by capitalization

production costs of own assets, and other non-core operational revenues. This significant increase

underscores the Company’s ability to capitalize on asset optimization strategies and maximize returns from

ancillary business activities. Conversely, other operating expenses increased by €70.7 million, or 210.0%,

reaching €104.3 million, primarily due to provisions, impairments, and one-time adjustments. While these

expenses grew in absolute terms, the Company remains committed to prudent financial management,

mitigating risks, and maintaining a balanced cost structure.

Profit from Operating Activities

Czechoslovak Group

Annual Report 2024

Profit from operating activities more than doubled, increasing by €634.7 million, or 167.9%, bringing it to

€1,012.9 million in FY24. This substantial growth was primarily driven by revenue expansion, enhanced cost

efficiencies, and the successful integration of acquired businesses. The Company’s focus on margin

optimization, operational efficiency, and process automation played a crucial role in this strong

performance. Operating EBITDA reached record level, further solidifying the Company’s strong financial

position and its ability to generate sustainable earnings growth.

Financial Income and Expenses

Financial income increased by €142.7 million, or 616.3%, reaching €165.8 million. It was primarily driven by

higher interest income from investments and cash management. This growth reflects the Company’s ability

to optimize its financial assets and capitalize on favorable market conditions. Conversely, financial expenses

rose by €274.2 million, or 263.4%, to €378.3 million, primarily due to financing costs associated with recent

strategic initiatives. Despite the rise in financial expenses, the Company has managed its leverage and

liquidity effectively, ensuring its own long-term financial stability.

Profit from Other Financial Instruments

Profit from financial instruments recovered by €64.2 million, reaching €43.5 million, compared to a loss of

€20.7 million in FY23. This turnaround was primarily driven by disciplined hedging strategies during

acquisitions and market movements in interest rates and currency rates. The Group proactively managed its

financial risk. Through the implementation of hedging strategies and portfolio optimization, the Company

effectively navigated market fluctuations, minimizing its exposure to external economic volatility.

Net Profit

Profit before income tax increased by €566.9 million, or 203.2%, to €845.8 million in FY24. Net profit

attributable to equity holders of the Company after the recognition of income tax nearly tripled, growing by

€352.0 million, or 202.2%, to reach €526.1 million in FY24. This substantial growth demonstrates the

Company’s ability to scale efficiently while maintaining strong financial discipline, thereby delivering

significant value. CSG’s continued focus on strategic investments, operational efficiency, and market

expansion positions it for sustained profitability and long-term value creation, reinforcing its commitment to

delivering consistent returns.

Financial Performance Analysis—Pro-forma CSG with The Kinetic Group

Pro-forma Revenues & Operating EBITDA (€ million)

Czechoslovak Group

Annual Report 2024

The Company’s pro-forma revenues increased significantly to €5,176.7 million in FY24, representing a

66.6% growth from €3,106.5 million achieved in FY23. Operating EBITDA also demonstrated strong growth,

rising by 70.4% from €815.7 million to €1,389.6 million, with a pro-forma EBITDA margin of 26.8%,

compared to 26.3% in FY23.

The pro-forma EBITDA margin reflects integration costs and structural adjustments related to the acquisition

of The Kinetic Group. Despite these factors, the Group’s robust financial performance demonstrates its

ability to deliver strong profitability and growth. This solid performance highlights the Company’s

commitment to creating long-term value while successfully executing its strategic growth initiatives.

Geographical Breakdown of Pro-forma Revenues

Czechoslovak Group

Annual Report 2024

The Group’s global revenue footprint has expanded significantly, with The Kinetic Group’s contribution

substantially enhancing its presence in the US. On a pro-forma basis, Europe (excluding Ukraine) generated

€1,804.6 million, representing 34.9% of total revenues. Ukraine contributed €1,714.5 million, or 33.1% of

total revenues. The US experienced remarkable growth, contributing €1,335.6 million, or 25.8% of total

revenues, driven largely by the addition of The Kinetic Group. The “Rest of the World” category accounted

for €321.9 million, or 6.2%, reflecting the CSG’s ongoing efforts to expand into new global markets.

On a pro-forma basis, the Group’s revenue exposure across NATO and non-NATO markets underscores its

strategic positioning in key defence regions. In FY24, 61.0% of total revenues were generated from NATO

countries, while 39.0% originated from non-NATO markets, including Ukraine. This classification highlights

the Group’s strong reliance on NATO-affiliated defence contracts while also reflecting its targeted presence

in non-NATO markets—particularly in regions where strategic defence cooperation continues to evolve. The

Group’s diversified market exposure supports its resilience and aligns with its long-term growth strategy.

Breakdown of Pro-forma Revenues by End Market

Czechoslovak Group

Annual Report 2024

The Group’s core strength remains its defence segment, which continues to be the primary driver of

performance, accounting for €3,784.3 million, or 69.8% of CSG’s total revenues on a pro-forma basis.

Civilian markets contributed €1,358.0 million, or 25.1% of total revenues, and industrial non-defence markets

represented €278.0 million, or 5.1% of total revenues.

Breakdown of Pro-forma Revenues by Divisions

Following the integration of The Kinetic Group, the composition of the Group’s business divisions has

evolved. The CSG Defence division continues to be the cornerstone of the business, generating €3,301.3

million, or 60.9% of divisional sales, underscoring its main role in the Group’s performance. Last year the

CSG Ammo+ division, reflecting the full-year impact of The Kinetic Group on a pro-forma basis, contributed

€1,650.2 million, or 30.4% of total sales. The CSG Aerospace division accounted for €288.7 million, or 5.3%

of sales, reflecting targeted growth in this area. CSG Mobility and Business Projects division represented

1.4% and 1.9% of divisional sales, respectively.

Czechoslovak Group

Annual Report 2024

Breakdown of Pro-forma Operating EBITDA by Divisions

On the profitability front, the CSG Defence division remained the primary contributor to operating EBITDA,

delivering €943.9 million at a robust margin of 28.6%, highlighting its critical role in driving the company’s

financial performance. The CSG Ammo+ division demonstrated significant growth, with operating EBITDA of

€390.4 million and a strong margin of 23.7%, reflecting the division’s growing contribution to overall

profitability. The CSG Aerospace, Mobility, and Business Projects (incl. corporate costs) divisions posted

operating EBITDA of €58.4 million, €11.9 million, and €0.9 million, respectively.

Pro-Forma Operating Costs Structure

The integration of The Kinetic Group has notably impacted the Company’s cost structure. Cost of Goods

Sold (COGS) increased by 87.7%, from €1,372.2 million in FY23 to €2,575.0 million in FY24, driven by

Czechoslovak Group

Annual Report 2024

higher production volumes and increased raw-material costs. Service costs rose by 43.5%, reaching

€534.4 million, reflecting heightened operational requirements. Staff costs grew by 16.0%, totaling €605.4

million, while other income and expenses surged by 195.3%, primarily due to adjustments related to The

Kinetic Group.

As a percentage of total revenues, COGS increased from 44.2% to 49.7%, reflecting the impact of rising

material and production costs. Conversely, service costs improved, decreasing from 12.0% to 10.3%,

demonstrating enhanced cost absorption and operational efficiency. Staff costs as a percentage of sales

declined from 16.8% to 11.7%, underscoring the Company’s commitment to workforce efficiency amid

growth. Other expenses increased from 0.8% to 1.4%.

Pro-Forma Profit & Loss Comparison

Year ended December 31

Change

€ milion

2024

2023

ABS

Revenues

5,176.7

3,106.5

2,070.1

66.6%

Cost of sales

(2,575.0)

(1,372.2)

-1,202.8

87.7%

External costs

(534.4)

(372.4)

-162.0

43.5%

Employee benefits costs

(605.4)

(521.8)

-83.5

16.0%

Other operating result, net

(72.3)

(24.5)

-47.8

195.3%

Operating EBITDA

1,389.6

815.7

573.9

70.4%

Operating EBITDA margin

26.8%

26.3%

Revenues for FY24 increased by 66.6%, reaching €5,176.7 million, driven by robust organic growth in key

markets, with strong performance in the defence sector playing a significant role. The cost of sales nearly

doubled, rising from €1,372.2 million to €2,575.0 million, primarily due to higher production volumes and

increased procurement costs.

Service and personnel expenses grew by 43.5% and 16.0%, respectively, reflecting the Company’s

expanded operational structure to support growth. Other operating results saw a substantial increase of

195.3%, totaling €72.3 million, driven by adjustments related to the Company’s strategic initiatives.

Operating EBITDA increased by 70.4%, reaching €1,389.6 million, underscoring the Company’s strong

profitability and operational efficiency. This performance highlights the Group’s ability to manage costs

effectively while capitalizing on market opportunities to deliver sustainable growth.

Forward-looking Statements

This MD&A contains “forward-looking statements” within the meaning of the securities laws of certain

jurisdictions. In some cases, these forward-looking statements can be identified by the use of forward-

looking terminology, including words such as “believe,” “anticipate,” “estimate,” “expect,” “suggest,”

“target,” “intend,” “predict,” “project,” “should,” “would,” “could,” “may,” “will,” “forecast,” “plan,” and similar

expressions or, for all such cases, their negative or other variations or comparable terminology, or by

discussions of strategies, plans, objectives, targets, goals, future events, or intentions. These forward-

looking statements include all matters that are not historical facts. They appear in a number of places

throughout this MD&A and include statements regarding our intentions, beliefs, or current expectations

concerning, among other things, the results of the Group’s operations, financial condition, liquidity,

prospects, growth, strategies, and the industry in which the Group operates. By their nature, forward-

Czechoslovak Group

Annual Report 2024

looking statements involve known and unknown risks and uncertainties, because they relate to events and

depend on circumstances that may or may not occur in the future. Forward-looking statements are not

guarantees of future performance. You should not place undue reliance on these forward-looking

statements. Any forward-looking statements are only made as of the date of this MD&A, and the Group does

not intend, and does not assume, any obligation to update forward-looking statements set forth in this

MD&A. Many factors may cause the Group’s results of operations, financial condition, liquidity, and the

development of the industry in which it operates to differ materially from those expressed or implied by the

forward-looking statements contained in this MD&A.

These factors include, among others:

 the risk associated with damage to reputation;

 risks associated with new acquisitions;

 regulatory risks and the risk of potential loss of export licenses;

 competitive risks;

 political and macroeconomic risks;

 the risk of fluctuations in commodity prices;

 risks arising from product liability;

 risks associated with our ownership interest in certain subsidiaries and other

shareholders;

 the risk of a disruption to our external supply chains;

 risks associated with our indebtedness;

 other financial risks.

Risk Factors

— Financial Risks

The financial risk management of CSG focuses on the financial risks arising from the financial instruments to

which the Group is exposed as a result of their activities. Financial risks include primarily credit risk, liquidity

risk, currency risk, and interest rate risk. The main objective of financial risk management is to establish risk

limits and ensure that exposure to these risks remains within those limits.

Oversight of CSG’s risks is provided within the framework of the Group’s established market risk

management rules and, at the same time, by the decisions of the senior management of the Group in

individual areas of activity upon the basis of reporting, as well as by the relevant decision-making process

of the board of directors of the Company or its subsidiaries. The Group have used, and plan to continue to

use, derivative financial instruments to reduce the above-mentioned risks, particularly foreign exchange and

currency risks.

— Credit Risk

Credit risk represents the potential inability of the Group’s debtors to repay their debts arising from financial

or commercial relationships. It may lead to financial losses for the Group given the holding-company nature

of the Company, this risk is minimal at this level. The Group has a policy whereby each new customer

requesting products or services above a certain limit (based on the size and nature of a particular

subsidiary) is analyzed by an individual credit assessment before the subsidiary's standard payment and

delivery terms are offered.

As at December 31, 2024, trade and other receivables and other assets at their net value amounted to €

444,268 thousand (in 2023 it was € 444,268 thousand and 2022 € 298,941 thousands). Included in this

amount are the following figures from the consolidated statement of financial position: trade and other non-

Czechoslovak Group

Annual Report 2024

current receivables, non-current advances granted, accruals, trade and other current receivables, current

advances granted, and accruals. The maximum value of credit risk for December 31, 2024, December 31,

2023, and December 31, 2022, corresponds to the carrying amount of each financial asset. The Company

also represents that there is no material concentration of credit risk with respect to any one business entity.

The Company makes provisions for impairment of assets representing estimates of losses incurred in

respect to trade and other receivables. The main components of these provisions are the specific loss

components relating to individually significant receivables and the collective loss components established

for groups of similar assets in respect to losses incurred but not yet identified. The collective loss tolerance

is determined on the basis of historical data of payment statistics for similar financial assets. Regarding the

amounts for which no provision has been made, The Company believes that these are still collectible.

Despite all of the Group’s measures to limit the effects of credit risk, the failure of the Group’s counterparties

could cause losses that could adversely affect the Group’s business, results of operations, financial

condition and ultimately the Company’s ability to meet its obligations.

— Liquidity Risk

The main objective of liquidity risk management is to reduce the risk that the Group will not have the

resources to meet its debt, working capital, and capital expenditure commitments. the Group’s liquidity

management aims to ensure that resources are available to meet debts as they fall due.

The Company has a system in place for tracking income and expenses several months in advance,

in relation to purchase orders issued and invoices received, as well as in relation to orders received and

confirmed, invoices issued, other contracts entered into (leases, insurance, and loans), expected salaries,

etc. Expenditures are regulated so that there are always funds in the account in advance to pay debts to the

state and health insurance companies, salaries, and debts to banks in the amount corresponding to 1–2

months.

Despite all of the Group’s measures to mitigate the effects of liquidity risk, shortfall, if any, in available

resources could adversely affect the Company’s business, results of operations, financial condition, and

ultimately its ability to meet its obligations.

— Risk of Changes in Interest Rates

The Group’s business is exposed to the risk of interest-rate fluctuations when interest-bearing assets

(including investments) and liabilities mature or are repriced at different times or in different amounts. The

time periods over which a financial instrument’s interest rate is fixed indicate the extent to which the

instrument is exposed to interest rate risk.

The set of various derivatives used to reduce the amount owed that is exposed to interest rate fluctuations

and to reduce the cost of borrowing primarily contains interest-rate swaps. These contracts are typically

arranged with a notional amount and an expiry date less than or equal to the underlying debt, so that any

change in the fair value or expected future cash flows of these contracts is offset by a corresponding

change in the fair value or expected future cash flows of the underlying position.

No matter what measures are taken, losses due to adverse shifts in interest rates cannot be ruled out and

could adversely affect the Group’s business, economic performance, financial position, and ultimately its

ability to meet its obligations.

— Risk of Changes in Exchange Rates

The Group is exposed to the effect of movements in current exchange rates on its financial position and

cash flows.

Czechoslovak Group

Annual Report 2024

The Group is exposed to currency risk on sales, purchases, and borrowings that are denominated in

currencies other than the functional currencies of the Group’s entities. These are mainly the euro and the US

dollar for Czech subsidiaries and the US dollar and the Czech crown (CZK) for Slovak subsidiaries. After that

it is especially the US dollar and the Pound sterling (GBP) for other foreign Group’s entities (Italy, Spain,

etc.).

Various types of derivatives are used to mitigate currency risk on foreign currency assets, debt, and

expected future cash flows. These include currency forwards with maturities from one month to five years.

These contracts are also typically arranged with a notional amount and expiration date that is the same as

the underlying debt or expected future cash flows. Any change in the fair value or future cash flows of these

contracts—resulting from appreciation or depreciation, if any, of the Czech crown (CZK) against other

currencies—is fully offset by a corresponding change in the fair value and/or expected future cash flows of

the underlying position.

For financial assets and liabilities denominated in foreign currencies, CSG implements a currency risk

management system within the Group to limit the net exposure to an acceptable level by buying or selling

foreign currencies at spot rates when necessary to address short-term imbalances. Since 2022, the Group

has sought to eliminate this risk to a greater extent through natural hedging, i.e. the conversion of a portion

of the liabilities into EUR over the course of the year to naturally cover the income in EUR, and the remaining

portion is covered using the aforementioned derivatives, primarily forwards.

No matter what measures are taken, losses due to adverse movements in exchange rates cannot be ruled

out and could adversely affect the Group’s business, its economic performance, its financial position, and

ultimately the Company’s ability to meet its obligations.

 Operating Risks

— Competition Risk

Company and its subsidiaries operate in the aerospace, automotive, rail and defence industries and are

subject to competition. For this reason, the Group must respond flexibly to the changing situation on the

market, to the behavior of its competitors, and to customer requirements. In a highly competitive

environment, the Group may not be able to respond appropriately to the competitive environment, which

could lead to a deterioration in the economic position of the Company or the Group and ultimately adversely

affect the Company’s ability to meet its obligations.

— Risk of Changes in the Ownership Structure of Company and Group Companies

Although the Company is not aware of any plans for a change in its ownership structure, it cannot be ruled

out that the ownership structure of the Company or the Group will change in the future. In addition, in the

event of a change of shareholders or partners (or their shares) in the Group, there may be a change of

control and a modification of the Group’s strategy, which may comprise different objectives from the current

ones. These changes may have an impact on the results of the Group’s operations.

— Risk of Insolvency Proceedings

Czech Act No. 182/2006 Sb. (Collection of Laws), on Bankruptcy and Methods of its Settlement, as

amended (the Insolvency Act), provides that a debtor is insolvent if it has multiple creditors and monetary

debts for a period of more than 30 days after the due date and is unable to pay these debts, or if it is over-

indebted. Insolvency proceedings may be initiated only upon a petition that the debtor or its creditor is

entitled to file. If insolvency is imminent, only the debtor can file an insolvency petition.

Despite certain measures to prevent unfounded and unsubstantiated petitions to commence insolvency

proceedings, the filing of such petitions cannot be ruled out. Insolvency proceedings are initiated by a court

order within two hours of the insolvency petition being delivered to the court. From the moment of

Czechoslovak Group

Annual Report 2024

publication of the order until the court’s decision on the insolvency petition (unless the court decides

otherwise), the debtor is obliged to refrain from disposing of the estate and any assets that may be part of it

if doing so would involve substantial changes in the composition, use, or destination of those assets or a

non-insignificant reduction thereof. Pursuant to the Insolvency Act, the court shall decide on an insolvency

petition filed by third parties without delay; the law does not provide for a more precise time limit for this

decision.

Even though the restriction on the disposal of assets does not apply, inter alia, to acts necessary to run a

business in the ordinary course of business or to avert imminent damage, it cannot be ruled out that, if an

unfounded insolvency petition is filed against the Company, the Company will be restricted in the disposal

of its assets for an indefinite period of time. This could adversely affect the Company’s financial condition

and results of operations.

— Risk Associated with the Legal, Regulatory, and Tax Environment in the Czech Republic

CSG is subject to a number of laws and regulations. However, the legal, regulatory, and tax environment

within the Czech Republic is subject to frequent changes and laws may not always be applied uniformly by

courts and public authorities. Changes in laws or their interpretation may adversely affect CSG’s operations

and financial prospects in the future. Changes in legislation are not always entirely predictable, and any

such change could have a negative impact on the Group’s business activities. Changes in tax regulations,

particularly increases in direct and indirect taxes or the introduction of new tax burdens, changes in tax

authority practices, or failures in tax risk management may adversely affect the Company’s ability to meet its

obligations.

Moreover, the business of the Group in the defence industry is highly regulated. Selected companies from

the Group were required to obtain a permit for foreign trade in military material in order for the Group to

operate on the international military material market. Subsidiaries of the Company that are engaged in

foreign trade in military material are subject to the regulations of Act No. 38/1994 Sb. (Collection of Laws),

on Foreign Trade in Military Material, as amended (the Foreign Trade in Military Material Act). In accordance

with the Foreign Trade in Military Material Act, the relevant Group subsidiaries hold a permit for foreign trade

in military material, which is, however, only a general permit, and specific transactions, or, more precisely,

the exporting or importing of military material is subject to further approval (and licensing) by the Licensing

Administration of the Ministry of Industry and Trade of the Czech Republic. This administrative authority

decides on the issuance of a specific license on the basis of the binding opinions of the authorities

concerned, which are: (a) the Ministry of Foreign Affairs in terms of the foreign policy interests of the Czech

Republic, and compliance with the obligations arising for the Czech Republic from international treaties, as

well as from the membership of the Czech Republic in international organizations; (b) the Ministry of the

Interior in terms of public order, security, and the protection of the population; (c) the Ministry of Defence in

terms of ensuring the defence of the Czech Republic. These controls on the export of military equipment are

intended to prevent exports to high-risk countries where there is a risk that such equipment could be

misused, for example for the suppression of human rights or for resale to unofficial armed forces. In

addition, the Group is subject, for example, to the EU’s common rules governing the control of exports of

military technology and equipment (Council Common Position 2008/944/CFSP), which further restrict and

regulate the Group’s business in this segment. The security situation in individual regions of the world, as

well as the policies of international organizations of which the Czech Republic is a member, in response to

this security situation therefore play an important role in the decision-making process for approving specific

foreign trade transactions in the realm of military equipment. All of the above-mentioned factors apply

similarly to the Slovak subsidiaries and another foreign Group’s entities (Italy, Spain, etc.). In addition, in

some markets there is also an approval procedure by the government authorities for imports from the Czech

Republic, Slovakia or other countries. These regulatory restrictions, or the lack or loss of licenses and

permits, may adversely affect the Company’s business and its ability to meet its obligations.

— Risk of CZECHOSLOVAK GROUP a.s. as a Holding Company

Czechoslovak Group

Annual Report 2024

CZECHOSLOVAK GROUP a.s. is a holding company that primarily holds, manages, and, where appropriate,

finances interests in other CSG companies and does not itself carry out any significant business activities.

Company is dependent on the success of its subsidiaries’ businesses. If the subsidiaries do not perform as

expected or if their ability to make payments (for example, in the form of dividends, interest, or otherwise) to

the Company is restricted for other reasons (for example, unavailability of resources, legal or tax

regulations, and/or contracts), this would have a material adverse effect on the Company’s income and its

ability to meet its obligations.

— Operational Risk

Operational risk is the risk of loss resulting from fraud, unauthorized activities, errors, omissions,

inefficiencies, or system failure. It arises in relation to all activities of CSG and is a risk faced by all business

corporations. Operational risk includes legal risk.

— Risk of the Loss of Key Persons

CSG’s key persons, i.e., members of the management of the Company and its subsidiaries, especially senior

management, work together to develop and implement the Group’s key strategies. Their work is critical to

the overall management of the Group, as well as to the Group’s ability to implement and execute the above

strategies. CSG is committed to retaining and motivating these people, despite the strong demand for skilled

people in the engineering sector. However, CSG cannot guarantee that it will be able to retain and motivate

these key persons or that it will be able to reach and attract new key persons. CSG actively encourages and

motivates these key persons to continuously upgrade their skills and gain practical knowledge in order to

support their career development. The potential loss of key persons could adversely affect the business of

the Company itself or the Group overall, results of operations, and financial condition, which could adversely

affect the Company’s ability to meet its obligations.

— Risk of Information Leak

The Group employs people who are involved in developing the strategy of the Group or its subsidiaries,

creating new products, and setting the Group’s business direction. In the event of a leak of sensitive

information about the Group, the Group’s operations may be compromised or its current market position

may be lost, which could result in a deterioration of CSG’s financial performance and thus have an adverse

impact on the ability of the Company to meet its obligations.

— Risks Associated with Property Insurance

Company and its subsidiaries have property insurance covering their most important assets. The costs

associated with any natural disasters or other unforeseeable events (fires, storms, floods, windstorms, hail,

etc.) may nevertheless have a negative impact on the assets of the Group and on its economic and financial

position, as the Group’s property insurance does not provide full coverage for all property-related risks.

 Risks Arising from the Group's Operations in Different Markets

— Risk Associated with an Unfavorable Macroeconomic and Political Situation

Adverse developments in the overall macroeconomic situation or political instability on the markets where

the Group operates would cause a slowdown in the economic activities of business undertakings and of the

Group’s partners in business and would have a significant impact on their current and future decisions. The

financial performance of the Group can be directly and indirectly affected by macroeconomic parameters

including, but not limited to, gross domestic product growth or decline, inflation trends, monetary and tax

policies, exchange rate and interest rate movements, unemployment, and the overall level of investment in

the countries in which the Group operates. The political or macroeconomic situation in these countries may

also be affected by regional events, such as the situation in Ukraine, sanctions against the Russian

Federation, the debt crisis in the euro area, and other similar factors. Any adverse changes in the

Czechoslovak Group

Annual Report 2024

macroeconomic situation or political instability in the countries in which Group operates may adversely

affect the Company’s operations, financial performance, and financial prospects.

— Inflationary Risk

The results of CSG are affected by inflation in the countries in which CSG operates. Significant changes in

inflation (i.e., changes of more than a few percent), or changes in inflation that cause it to differ significantly

from its expected levels, could adversely affect CSG business and financial condition.

— Risk of Unforeseeable Events

An unforeseeable event (natural disaster or terrorist attack) that causes disturbances on financial markets

and/or rapid movements in currency exchange rates may affect the value of bonds issued by the Company.

The negative impact of such events could cause a reduction in the return on the funds invested by the

Group and thus endanger its ability to repay all of its obligations.

— Risk of a General Economic Recession and Demographic Factors

A slowdown or recession in the national or regional economies of the countries in which the Group operates

and other significant external events, such as a decline in consumer demand, changes in interest rates, or

changes in the economic policies of neighboring countries, may adversely affect the macroeconomic

environment in which the Group operates. This may also have an adverse impact on the development of the

Group’s net income.

— Risk Associated with the Legal and Regulatory Environment

The Group operates in many countries around the world and, as such, is subject to a wide range of legal,

regulatory, and tax regulations. The legislative and regulatory environment in the countries in which the

Group operates is evolving over time, and the current or future environment may not provide sufficient legal

tools to mitigate the consequences of contractual breaches by business partners. There is a risk that the

Group may not be able to fully enforce its contractual rights against third parties in a reasonable time, which

could adversely affect the Company's operations, financial performance, and financial prospects. At the

same time, the legal and regulatory framework in the countries in which the Group operates varies and may

be subject to change and amendment without clear predictability. These changes may adversely affect the

Company’s contractual relationships and business. The Group’s assets, or any part thereof, may be subject

to expropriation, nationalization, or confiscation without sufficient financial compensation or with financial

compensation lower than the market value of the relevant assets, which may have an adverse effect on the

Company’s financial position.

— Tax Risk in Countries Outside the Czech Republic

The business activities of the Group are subject to different tax regulations in each country in which it

operates. However, the regulations in various tax systems are subject to change and may be subject to

different interpretations, which may also result in a change (worsening) of the tax consequences on a

particular investment or structure (including the repatriation of profits) after such investment is made. At the

same time, the Group is required to comply with regulations and adapt to changes in tax systems, some of

which arise at the European Union level. This may lead to increased costs for the Group for monitoring and

adapting to these changes during the investment period. The above-mentioned changes, differing or

changing interpretations of tax regulations, or the risk of non-compliance with tax regulations at the level of

the Group’s local companies may result in increased tax burdens or penalties, which could adversely affect

the Company’s operations, financial performance, and financial prospects.

 Risks Related to the Defence Industry Segment

— Risk of Reduced Defence Spending

Czechoslovak Group

Annual Report 2024

Restrictions on spending on the military and armed forces in the Czech Republic and abroad may reduce

demand for the arms-industry products supplied by CSG. The significant costs for the preparation and

future implementation of a contract may thus be devalued. Tenders for supplying the armed forces are

highly competitive and technically demanding, time-consuming, and costly. The potential cancellation or

suspension of tenders, or the Group’s failure to win individual tenders, may adversely affect the Group’s

operations, financial performance, and financial prospects.

— Risk of Long-Term Fixed-Price Contracts

Long-term contracts for the armed forces often have fixed terms and conditions, which are sometimes very

difficult to amend and could become less favorable to the relevant subsidiary in the event of a change in the

market. The Group thus assumes all the potential risks involved. The preparation and execution of contracts

takes several months or even years, and despite the relevant internal measures in place, the Group cannot

always guarantee a smooth process that ensures on-time deliveries at the required quality and the budgeted

production costs. Although the Group has some ability to change the terms of its contracts, fixed contracts

are inherently risky. Any delay in delivery may result in financial loss—contractual penalties paid by the

Group. Some contracts may also be terminated without adequate compensation. These circumstances may

have a negative impact on CSG’s performance.

— Risk of Failure to Keep up with Technological Progress

The activities of the Group are based on technological advances. The development or updating of a new

weapon technology takes years, during which multiple objective obstacles may arise, including an increase

of costs or a delay of the whole process. Due to the technology’s complexity, extensive research and

development expenditure may not always pay off in a commercially successful product. If the Group were

to fail to respond to the requirements arising from customer needs and related changes in the field of

weapons and technology development and ignore the needs of innovation and technological development,

it would have a negative impact on the Group’s financial performance and financial prospects.

 Risks Related to the Engineering Industry

— Risk of Increasing Requirements for Product Quality

In the field of engineering, the Group is exposed to increasing pressure and demands on the quality of

production and of the final product, which have a significant impact on costs above all—due to the fact that

if sufficient production quality is not achieved, several actions must be taken to remedy the situation. Often

this involves a change in the production process, which in turn involves increasing input costs due to the

use of higher quality materials and raw materials or the extending of the production process, which

ultimately affects the Group’s financial performance. In the case of a persistent state of low-quality

production, this risk is reflected in a loss of customer confidence and thus a reduction in demand for our

engineering products.

— Risk of Failure in Public Procurement

In the engineering sector as elsewhere, the Group is partly dependent on sales arising through public

procurement. Tender procedures tend to be time-consuming and costly, and failure, if any, to win tenders

may adversely affect sales of the Group’s engineering products, which may adversely affect the Group’s

results of operations.

— Risk of Failure to Keep up with Technological Progress

As in the defence segment, the Group is exposed here to the risk of failing to keep up with technological

progress, which would have a negative impact on its financial performance and financial prospects.

 Risks Related to the Aerospace Services Segment

Czechoslovak Group

Annual Report 2024

— Shortage of Skilled Workers

Professionally trained people are key to doing business in the aerospace segment. As the Group plans to

expand in the aerospace services sector, it will become increasingly difficult to find enough skilled labor, not

least due to the limited number of graduates in the relevant disciplines. The Group thus faces the risk that

there will be an objective shortage of people with training or experience in the aerospace industry and that it

will not be able to recruit such specialists. Personnel shortages could adversely affect the Group’s business.

Czechoslovak Group

Annual Report 2024

Approval of the

Annual Report

The members of the Company’s Board of Directors declare that, to the best of their knowledge, the financial

statements and consolidated financial statements, prepared in accordance with the applicable accounting

standards, give a true and fair view of the assets, liabilities, financial position and economic performance of

the issuer and the consolidated entities as a group, and the consolidated annual report under the

Accounting Act gives a true and fair view of the development and performance of the issuer and the

position of the issuer and the consolidated entities as a group, together with a description of the principal

risks and uncertainties that they are facing, and the Consolidated Sustainability Statement is prepared in

accordance with the sustainability reporting standards adopted by the European Commission and the

requirements established pursuant to Article 8(4) of the directly applicable European Union regulation

governing the framework for the facilitation of sustainable investments .

The annual report was approved on April 2, 2025 at the Company’s registered office.

David Chour

Vice-Chairman of the Board of Directors

since September 1, 2020

Zdeněk Jurák

Member of the Board of Directors

since January 1, 2024

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organization”). DTTL (also referred to as

“Deloitte Global”) and each of its member firms and related entities are legally separate and independent entities, which

cannot obligate or bind each other in respect of third parties. DTTL and each DTTL member firm and related entity is liable o

nly for its own acts and omissions, and not

those of each other. DTTL does not provide services to clients. Please see www.deloitte.com/about to learn more.

INDEPENDENT LIMITED ASSURANCE REPORT

TO THE SHAREHOLDER OF CZECHOSLOVAK GROUP a.s.

Having its registered office at: U Rustonky 714/1, Karlín, 186 00 Prague 8

We have conducted a limited assurance engagement on the Consolidated Sustainability Statement

of CZECHOSLOVAK GROUP a.s. and its subsidiaries (hereafter the “Group”) included in section Consolidated

Sustainability Statement of the Annual Report including the information incorporated in the Consolidated Sustainability

Statement (the “Consolidated Sustainability Statement”) as at 31 December 2024 and for the year then ended.

Identification of Applicable Criteria

The Consolidated Sustainability Statement was prepared by the Board of Directors of the Company in order to satisfy

the requirements of §32k of the Czech Accounting Act implementing 29(a) of the EU Directive 2013/34/EU, including:

• Compliance with the European Sustainability Reporting Standards introduced by Commission Delegated Regulation

(EU) of 31 July 2023 supplementing Directive 2013/34/EU of the European Parliament and of the Council (“ESRS”),

including that the process carried out by the Company to identify the information reported in the Consolidated

Sustainability Statement (the “Process”) is in accordance with the description set out in Note 1.4.1. Process to

Identify and Assess Material Impacts, Risks and Opportunities; and

• Compliance of the disclosures in subsection EU Taxonomy Disclosures within Environmental Information section

of the Consolidated Sustainability Statement with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”).

Inherent Limitations in Preparing the Consolidated Sustainability Statement

The criteria, nature of the Consolidated Sustainability Statement, and absence of long-standing established authoritative

guidance, standard applications and reporting practices allow for diﬀerent, but acceptable, measurement methodologies

to be adopted which may result in variances between entities. The adopted measurement methodologies may also

impact the comparability of sustainability matters reported by diﬀerent organizations and from year to year within an

organization as methodologies evolve.

In reporting forward looking information in accordance with ESRS, management of the Group is required to prepare

the forward-looking information on the basis of disclosed assumptions about events that may occur in the future and

possible future actions by the Group. Actual outcome is likely to be diﬀerent since anticipated events frequently do not

occur as expected.

In determining the disclosures in the Consolidated Sustainability Statement, management of the Group interprets

undeﬁned legal and other terms. Undeﬁned legal and other terms may be interpreted diﬀerently, including the legal

conformity of their interpretation and, accordingly, are subject to uncertainties.

Responsibility of the Company’s Board of Directors and Supervisory Board for the Consolidated Sustainability Statement

The Board of Directors is responsible for designing and implementing a process to identify the information reported in

the Consolidated Sustainability Statement in accordance with the ESRS and for disclosing this process in Note 1.4.1.

Deloitte Audit s.r.o.

Churchill I

Italská 2581/67

120 00 Prague 2

– Vinohrady

Czech Republic

Tel: +420 246 042 500

DeloitteCZ@deloitteCE.com

www.deloitte.cz

Registered by the Municipal

Court in Prague, Section C,

File

24349

ID.

No.:49620592

Tax ID. No.: CZ49620592

Process to Identify and Assess Material Impacts, Risks and Opportunities of the Consolidated Sustainability Statement.

This responsibility includes:

• understanding the context in which the Group’s activities and business relationships take place and developing an

understanding of its affected stakeholders;

• the identification of the actual and potential impacts (both negative and positive) related to sustainability matters,

as well as risks and opportunities that affect, or could reasonably be expected to affect, the entity’s financial position,

financial performance, cash flows, access to finance or cost of capital over the short-, medium-, or long-term;

• the assessment of the materiality of the identified impacts, risks and opportunities related to sustainability matters

by selecting and applying appropriate thresholds; and

• making assumptions that are reasonable in the circumstances.

The Board of Directors is further responsible for the preparation of the Consolidated Sustainability Statement, in

accordance with § 32k of the Czech Accounting Act implementing 29(a) of the EU Directive 2013/34/EU, including:

• compliance with the ESRS;

• preparing the disclosures in subsection EU Taxonomy Disclosures within Environmental Information section

of the Consolidated Sustainability Statement, in compliance with Article 8 of EU Regulation 2020/852

(the “Taxonomy Regulation”);

• designing, implementing and maintaining such internal controls that management determines are necessary to

enable the preparation of the Consolidated Sustainability Statement that is free from material misstatement,

whether due to fraud or error; and

• the selection and application of appropriate sustainability reporting methods and making assumptions and estimates

about individual sustainability disclosures that are reasonable in the circumstances.

The Supervisory Board is responsible for overseeing the Group’s sustainability reporting process.

Our Responsibility

We conducted our limited assurance engagement in accordance with International Standard on Assurance Engagements

(ISAE) 3000 (Revised), Assurance Engagements other than Audits or Reviews of Historical Financial Information.

The procedures performed in a limited assurance engagement vary in nature and timing from, and are less in extent

than for, a reasonable assurance engagement. Consequently, the level of assurance obtained in a limited assurance

engagement is substantially lower than the assurance that would have been obtained had a reasonable assurance

engagement been performed.

Our objectives are to plan and perform the assurance engagement to obtain limited assurance about whether

the Consolidated Sustainability Statement is free from material misstatement, whether due to fraud or error, and to

issue a limited assurance report that includes our conclusion. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence decisions of users

taken on the basis of the Consolidated Sustainability Statement as a whole.

As part of a limited assurance engagement in accordance with ISAE 3000 (Revised) we exercise professional judgment

and maintain professional skepticism throughout the engagement.

Our responsibilities in respect of the Consolidated Sustainability Statement, in relation to the Process, include:

- Obtaining an understanding of the Process but not for the purpose of providing a conclusion on the eﬀectiveness

of the Process, including the outcome of the Process;

- Designing and performing procedures to evaluate whether the Process is consistent with the Group’s description

of its Process, as disclosed in Note 1.4.1. Process to Identify and Assess Material Impacts, Risks and Opportunities.

Our other responsibilities in respect of the Consolidated Sustainability Statement include:

- Obtaining an understanding of the entity’s control environment, processes and information systems relevant to

the preparation of the Consolidated Sustainability Statement but not evaluating the design of particular control

activities, obtaining evidence about their implementation or testing their operating eﬀectiveness;

- Identifying disclosures where material misstatements are likely to arise, whether due to fraud or error.

- Designing and performing procedures responsive to disclosures in the Consolidated Sustainability Statement where

material misstatements are likely to arise. The risk of not detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions,

misrepresentations, or the override of internal control.

Our Independence and Quality Management

We complied with the applicable independence and other ethical requirements of the Act on Auditors and the Code

of Ethics adopted by the Chamber of Auditors of the Czech Republic (the “Code”). The Code is founded on fundamental

principles of integrity, objectivity, professional competence and due care, confidentiality and professional behaviour.

We applied International Standard on Quality Management (ISQM) 1, Quality Management for Firms that Perform

Audits or Reviews of Financial Statements, or Other Assurance or Related Services Engagements, and accordingly

maintain a comprehensive system of quality control including documented policies and procedures regarding

compliance with ethical requirements, professional standards and applicable legal and regulatory requirements.

Summary of Work Performed

A limited assurance engagement involves performing procedures to obtain evidence about the Consolidated

Sustainability Statement.

The nature, timing and extent of procedures selected depend on professional judgement, including the identification

of disclosures where material misstatements are likely to arise, whether due to fraud or error, in the Consolidated

Sustainability Statement.

In conducting our limited assurance engagement, with respect to the Process, we:

- Obtained an understanding of the Process by:

o performing inquiries to understand the sources of the information used by management; and

o reviewing the Group’s internal documentation of its Process;

- Evaluated whether the evidence obtained from our procedures about the Process implemented by the Group was

consistent with the description of the Process set out in Note 1.4.1. Process to Identify and Assess Material Impacts,

Risks and Opportunities.

In conducting our limited assurance engagement, with respect to the Consolidated Sustainability Statement, we:

- Obtained an understanding of the Group’s reporting processes relevant to the preparation of its Consolidated

Sustainability Statement by performing inquiries to understand the Group’s control environment, processes and

information systems relevant to the preparation of the Consolidated Sustainability Statement;

- Evaluated whether material information identiﬁed by the Process to identify the information reported in

the Consolidated Sustainability Statement is included in the Consolidated Sustainability Statement;

- Evaluated whether the structure and the presentation of the Consolidated Sustainability Statement is in accordance

with the ESRS;

- Performed inquires of relevant personnel and analytical procedures on selected disclosures in the Consolidated

Sustainability Statement;

- Performed substantive assurance procedures based on a sample basis on selected disclosures in the Consolidated

Sustainability Statement;

- Obtained evidence on the methods for developing material estimates and forward-looking information and on how

these methods were applied;

- Obtained an understanding of the process to identify taxonomy-eligible and taxonomy-aligned economic activities

and the corresponding disclosures in the Consolidated Sustainability Statement;

- Conducted site visits at selected locations to test the application of the Company's reporting procedures.

We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our conclusion.

Limited Assurance Conclusion

Based on the procedures we have performed and the evidence we have obtained, nothing has come to our attention

that causes us to believe that the Consolidated Sustainability Statement is not prepared, in all material respects, in

accordance with Paragraph 32k of the Czech Accounting Act implementing 29(a) of the EU Directive 2013/34/EU,

including:

• Compliance with the European Sustainability Reporting Standards (ESRS), including that the process carried out by

the Group to identify the information reported in the Consolidated Sustainability Statement is in accordance with

the description set out in note 1.4.1. Process to Identify and Assess Material Impacts, Risks and Opportunities; and

• Compliance of the disclosures in subsection EU Taxonomy Disclosures within Environmental Information section

of the Consolidated Sustainability Statement with Article 8 of EU Regulation 2020/852 (the “Taxonomy Regulation”).

Emphasis of matter

We draw attention to note 1.1.2. Disclosures in Relation to Specific Circumstances, which describes the primary sources

of measurement uncertainty in Consolidated Sustainability Statement requiring the use of estimates and assumptions.

Estimates and assumption have been applied throughout the whole Consolidated Sustainability Statement.

We also draw attention to note 1.1.1. General Basis for Preparation of Sustainability Statement, which describes

different reporting boundaries related to presenting of non-financial information of TATRA EXPORT s.r.o.,

TATRA METALURGIE a.s., and TATRA TRUCKS a.s., in comparison to scope of financial consolidation, as well as the impact

of recent acquisition of the Kinetic Group and inclusion of data for this group into the Consolidated Sustainability report.

We also draw attention to note 1.1.1. General Basis for Preparation of Sustainability Statement, table ID 1 The Complete

List of Entities Within the Consolidation Scope of This Consolidated Sustainability Statement, which describes

understanding and breakdown of the “Wholesale and Retail” sector classification. This breakdown provides sector-

specific insight into the nature of goods traded under the Wholesale and Retail classification.

Our conclusion is not modified in respect of these matters.

Other Matter

Our assurance engagement does not extend to information in respect of earlier periods presented in the Consolidated

Sustainability Statement.

In Prague on 2 April 2025

Audit firm:

Statutory auditor:

Deloitte Audit s.r.o.

registration no. 079

David Batal

registration no. 2147

Czechoslovak Group

Annual Report 2024

Consolidated

Sustainability

Statement

Czechoslovak Group

Annual Report 2024

Table of Contents

Chapter

Page Number

How to navigate in this Consolidated Sustainability Statement

1. General Information

1.1. Basis for preparation

1.1.1. General Basis for Preparation of Consolidated Sustainability Statement

1.1.2. Disclosures in Relation to Specific Circumstances

1.2. Governance

1.2.1. Role of the Administrative, Management and Supervisory Bodies

1.2.2. Sustainability Matters Addressed by CSG Administrative, Management, and

Supervisory Bodies

1.2.3. Integration of Sustainability-Related Performance in Incentive Schemes

1.2.4. Statement on Due Diligence

1.2.5. Risk Management and Internal Controls over Sustainability Reporting

1.3. Strategy

1.3.1. Strategy, Business Model and Value Chain

1.3.2. Interests and Views of Stakeholders

1.3.3. Material Impacts, Risks and Opportunities and Their Interaction with Strategy and

Business Model

1.4. Impact, Risk and Opportunity Management

1.4.1. Process to Identify and Assess Material Impacts, Risks and Opportunities

1.4.2. Disclosure Requirements in ESRS Covered by Consolidated Sustainability

Statement

2. Environment Information

2.1. EU Taxonomy Disclosures

2.2. Climate Change

2.2.1. General Disclosures Related to Climate Change

2.2.2. Transition Plan for Climate Change Mitigation

2.2.3. Policies Related to Climate Change Mitigation and Adaptation Including Minimal

Disclosures

2.2.4. Actions and Resources in Relation to Climate Change Policies

2.2.5. Targets Related to Climate Change Mitigation and Adaptation

2.2.6. Energy Consumption and Mix

2.2.7. Gross Scopes 1, 2, 3 and Total GHG Emissions

2.2.8. GHG Removals and GHG Mitigation Projects Financed through Carbon Credits

2.2.9. Internal Carbon Pricing

2.2.10. Anticipated Financial Effects from Material Physical Risks

2.3. Pollution

Czechoslovak Group

Annual Report 2024

2.3.1. General Disclosures Related to Pollution

2.3.2. Policies Related to Pollution

2.3.3. Actions and Resources Related to Pollution

2.3.4. Targets Related to Pollution

2.3.5. Pollution of Air

2.3.6. Substances of Concern and Substances of Very High Concern

2.3.7. Anticipated Financial Effects from Material Pollution-related Risks and

Opportunities

2.4. Water and Marine Resources

2.4.1. General Disclosures related to Water and Marine Resources

2.4.2. Policies Related to Water and Marine Resources

2.4.3. Actions and Resources Related to Water and Marine Resources

2.4.4. Targets Related to Water and Marine Resources

2.4.5. Water Consumption

2.4.6. Anticipated Financial Effects from Material Water- and Marine-Resources-Related

Risks and Opportunities

2.5. Resource Use and Circular Economy

Resource use and circular economy

2.5.1. General Disclosures Related to Resource Use and the Circular Economy

2.5.2. Policies Related to Resource Use and the Circular Economy

2.5.3. Actions and Resources Related to Resource Use and the Circular Economy

2.5.4. Targets Related to Resource Use and the Circular Economy

2.5.5. Resource Outflows

2.5.6. Anticipated Financial Effects from Material Resource Use and Circular-Economy-

Related Risks and Opportunities

3. Social information

3.1. Own Workforce

3.1.1. General Disclosures Related to Own Workforce

3.1.2. Policies Related to Own Workforce

3.1.3. Processes for Engaging with Own Workforce and Workers’ Representatives

Regarding Impacts

3.1.4. Processes to Remediate Negative Impacts and Channels for Own Workforce to

Raise Concerns

3.1.5. Taking Action on Material Impacts on Own Workforce

3.1.6. Targets related to Own Workforce

3.1.7. Characteristics of CSG’s Employees

3.1.8. Characteristics of Non-Employees in Undertaking’s Own Workforce

3.1.9. Collective Bargaining Coverage and Social Dialogue

3.1.10. Diversity Metrics

3.1.11. Adequate Wages

3.1.12. Social Protection

3.1.13. Persons with Disabilities

Czechoslovak Group

Annual Report 2024

3.1.14. Training and Skills Development Metrics

3.1.15. Health and Safety Metrics

3.1.16. Work-Life Balance Metrics

3.1.17. Remuneration Metrics (Pay Gap and Total Remuneration)

3.1.18. Incidents, Complaints, and Severe Human Rights Impacts

3.2. Affected Communities

3.2.1. General Disclosures related to Affected Communities

3.2.2. Policies Related to Affected Communities

3.2.3. Processes for Engaging with Affected Communities About Impacts

3.2.4. Processes to Remediate Negative Impacts and Channels for Affected

Communities to Raise Concerns

3.2.5. Taking Action on Material Impacts on Affected Communities

3.2.6. Targets Related to Affected Communities

3.3. Consumers and End-users

3.3.1. General Disclosures Related to Consumers and End-Users

3.3.2. Policies Related to Consumers and End-Users

3.3.3. Processes for Engaging with Consumers and End-users about Impacts

3.3.4. Processes to Remediate Negative Impacts and Channels for Consumers and End-

Users to Raise Concerns

3.3.5. Taking Action on Material Impacts on Consumers and End-Users

3.3.6. Targets Related to Consumers and End-users

4. Governance - Business Conduct

4.1. General Disclosures Related to Governance

4.2. Business Conduct Policies and Corporate Culture

4.3. Management of Relationships with Suppliers

4.4. Prevention and Detection of Corruption and Bribery

4.5. Incidents of Corruption or Bribery

4.6. Political Influence and Lobbying Activities

5. Independent Auditor’s Report

Annex 1: List of Phase-in ESRS Data Points In accordance with Appendix C to ESRS 1

Czechoslovak Group

Annual Report 2024

How to navigate in the Consolidated

Sustainability Statement

This Consolidated Sustainability Statement provides a comprehensive overview of CSG’s environmental,

social, and governance (ESG) performance, structured in alignment with the European Sustainability Reporting

Standards (ESRS) under the Corporate Sustainability Reporting Directive (CSRD). It presents key policies,

actions, and performance indicators related to material sustainability matters relevant to CSG’s operations.

Structure of the Consolidated Sustainability Statement

To facilitate easy navigation, the Consolidated Sustainability Statement is structured as follows:

 General information – Outlines CSG’s general approach to this report including Governance, Strategy and

Materiality & Risk Assessment.

 Environmental Chapters – Covers EU Taxonomy disclosures, climate change mitigation and adaptation,

pollution, water and marine resources, circular economy, and resource use.

 Social Chapters – Addresses workforce-related matters, affected communities, and consumer

responsibility.

 Governance Chapters – Provides insight into business ethics, compliance, and corporate governance

structures.

How to Use This Consolidated Sustainability Statement

 Materiality information – each chapter / sub-chapter / paragraph contains information on relevant

sustainability matter (e.g. S1_SM_23: Workforce Management and Policy). Information about sectors

for which the topic is material can be found in chapter 1.4.2. (Disclosure Requirements in ESRS Covered

by Consolidated Sustainability Statement) and list of companies in each of the sectors in chapter 1.1.1.

(General basis for preparation of Consolidated Sustainability Statement)

 Cross-referencing - The Consolidated Sustainability Statement includes cross-references to relevant

chapters where additional information is available.

 Data Transparency - Where data is estimated or not available a disclaimer is provided.

 Regulatory Compliance - The Consolidated Sustainability Statement aligns with ESRS disclosure

requirements, with each section clearly indicating the applicable standard.

 Future Commitments - Information on planned policies, initiatives, and areas for improvement is included

throughout the Consolidated Sustainability Statement.

This Consolidated Sustainability Statement is intended for stakeholders, investors, regulators, and other

interested parties seeking insight into CSG’s sustainability journey. For further clarification on specific

topics, relevant policies, methodologies, and data sources are referenced in the respective sections.

Czechoslovak Group

Annual Report 2024

1. General Information

1.1. Basis for Preparation

ESRS2.BP-1

1.1.1. General Basis for Preparation of

Consolidated Sustainability Statement

This chapter explains how this sustainability statement was prepared, covering the scope of consolidation,

inclusion of upstream and downstream value chain information, and, where applicable, the use of options to

omit certain disclosures as permitted by regulations.

Scope of Consolidation

This Consolidated Sustainability Statement has been prepared on a consolidated basis at the level of

CZECHOSLOVAK GROUP a.s. for the calendar year 2024.

The scope of consolidation for this Consolidated Sustainability Statement is not the same as for the financial

statements, due to the nature and materiality of the entities within the Group. The sustainability-reporting

scope focuses on entities with significant operational activities and material sustainability impacts.

The companies within the scope of financial consolidation have been assessed based on their operational

profile and grouped into the following categories: holding companies, executive companies, active SPVs, and

inactive SPVs. Holding companies are assessed individually for non-financial reporting obligations, while

executive companies and active SPVs are fully included. Inactive SPVs, with minimal operations, are excluded.

This approach ensures that non-financial reporting aligns with financial consolidation while accurately

reflecting material sustainability impacts. The consolidation scope of this sustainability report encompasses

58 companies, including CZECHOSLOVAK GROUP a.s.

This is of particular importance for the sustainability information of TATRA EXPORT s.r.o., TATRA

METALURGIE a.s., and TATRA TRUCKS a.s., for which non-financial data is being reported in full despite the

fact that CZECHOSLOVAK GROUP a.s. is holding 65% of the shares and is not the controlling entity of these

companies.

We have further categorized the 58 companies within the consolidation scope of this Consolidated

Sustainability Statement according to the following criteria:

 12 sector categories based on the companies’ main business focus: Aerospace, Automotive, Defence,

Health Care, Metal Processing, Professional & Commercial Services, Real Estate & Services, Rolling

Stock, Software, Textiles, Apparels, Footwear & Accessories, Transportation, and Wholesale & Retail

Trade

 3 sizes as defined by Directive (EU) 2022/2464

: small/medium/large enterprises.

A complete list of the companies within the consolidation scope of this sustainability report can be found

further on in this chapter, along with a graphical view of the number of companies, and their sizes, within each

of the identified sectors.

There are no companies included in the non-financial-consolidation scope that are exempt from individual or

consolidated sustainability reporting. All relevant entities are accounted for within the scope of this

Consolidated Sustainability Statement in alignment with applicable reporting obligations.

DIRECTIVE (EU) 2022/2464 OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL of 14 December 2022 amending Regulation (EU)

No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability reporting.

Czechoslovak Group

Annual Report 2024

Inclusion of The Kinetic Group in Sustainability Reporting

The Kinetic Group (TKG) was acquired on November 27, 2024. However, for the purposes of this

Consolidated Sustainability Statement, companies within the scope of TKG—Ammunition Operations LLC,

Federal Cartridge Company, The Kinetic Group Operations LLC, and Vista Outdoor Sales LLC—have been

included with a differentiated approach.

1) For the purposes of GHG reporting in chapter 2.2.7. (Gross Scopes 1, 2, 3 and Total GHG Emissions),

full-year 2024 data were used, in compliance with the GHG Protocol.

2) For the remaining parts of the ESRS sustainability disclosures, data estimations representing proportional

part (1/12

) of the 2024 reporting year were included, reflecting the period after acquisition and aligning

with CSRD reporting boundary requirements.

Czechoslovak Group

Annual Report 2024

The Complete List of Entities Within the Consolidation Scope of This Consolidated Sustainability Statement

(Table ID 1)

Company Name

Operational Profile

Size

Sector

14. OKTOBAR d.o.o. Kruševac

Executive Company

Medium

Defence

ABIENNALE s.r.o.

SPV Active

Small

Transportation

Ammunition Operations LLC

Executive Company

Large

Defence

Armi Perazzi S.p.A.

Executive Company

Medium

Defence

ARMY TRADE a.s.

Executive Company

Medium

Defence

ATLAN GROUP, spol. s r.o.

Executive Company

Small

Real Estate & Services

ATRAK a.s.

Executive Company

Small

Software

AVIA Motors s.r.o.

SPV Active

Small

Automotive

CS SOFT a.s.

Executive Company

Medium

Software

CSG a.s.

SPV Active

Medium

Transportation

CSG DEAL a.s.

Executive Company

Small

Professional & Commercial Services

CSG MOBILITY a.s.

Executive Company

Small

Professional & Commercial Services

CSGM a.s.

Executive Company

Large

Professional & Commercial Services

CZECHOSLOVAK EXPORT a.s.

Executive Company

Small

Wholesale & Retail trade

CZECHOSLOVAK GROUP a.s.

Parent Company –

Consolidation Level

Small

HOLDING

DAKO-CZ INDIA PRIVATE LIMITED

Executive Company

Small

Rolling Stock

DAKO-CZ, a.s.

Executive Company

Large

Rolling Stock

DEFENCE TRADE SLOVAKIA, s.r.o.

SPV Active

Large

Wholesale & Retail Trade

ELDIS Pardubice, s.r.o.

Executive Company

Large

Aerospace

ELTON hodinářská, a.s.

Executive Company

Medium

Textiles, Apparels, Footwear, & Accessories

EXCALIBUR ARMY spol. s r.o.

Executive Company

Large

Defence

EXCALIBUR INTERNATIONAL a.s.

Executive Company

Large

Wholesale & Retail trade

FABRICA DE MUNICIONES DE GRANADA S.L.

Executive Company

Large

Defence

Federal Cartridge Company

Executive Company

Large

Defence

Fiocchi Munizioni S.p.A.

Executive Company

Large

Defence

Fiocchi of America Inc.

Executive Company

Large

Defence

JOB AIR Technic a.s.

Executive Company

Large

Aerospace

JWL DAKO-CZ (INDIA) PRIVATE LIMITED

Executive Company

Small

Rolling Stock

KARBOX s.r.o.

Executive Company

Small

Defence

KARMONIKA AERO a.s.

SPV Active

Small

Transportation

Lyalvale Express Limited

Executive Company

Medium

Defence

MEDHA DAKO-CZ PRIVATE LIMITED

Executive Company

Small

Rolling Stock

Milconn, a.s.

Executive Company

Small

Wholesale & Retail Trade

MSM EXPORT, s.r.o.

Executive Company

Large

Wholesale & Retail Trade

MSM LAND SYSTEMS s.r.o.

Executive Company

Large

Defence

MSM Services, s.r.o.

Executive Company

Medium

Professional & Commercial Services

Perazzi USA, Inc.

Executive Company

Small

Defence

POCKET VIRTUALITY a.s.

Executive Company

Small

Software

Prague Fertility Centre s.r.o.

Executive Company

Medium

Health Care

REAL TRADE PRAHA a.s.

Executive Company

Large

Professional & Commercial Services

ReDat Recording, a.s.

Executive Company

Small

Software

RETIA, a.s.

Executive Company

Large

Aerospace

SBS ZVS, s.r.o.

Executive Company

Small

Professional & Commercial Services

TATRA DEFENCE SLOVAKIA s.r.o.

SPV Active

Small

Wholesale & Retail Trade

TATRA DEFENCE SYSTEMS s.r.o.

Executive Company

Small

Defence

TATRA DEFENCE VEHICLE a.s.

Executive Company

Large

Defence

TATRA EXPORT s.r.o.

Executive Company

Large

Wholesale & Retail Trade

TATRA METALURGIE a.s.

Executive Company

Large

Metal Processing

TATRA TRUCKS a.s.

Executive Company

Large

Automotive

The Kinetic Group Operations LLC

Executive Company

Large

Professional & Commercial Services

TRUCK MACHINERY GROUP a.s.

Executive Company

Medium

Rolling Stock

TRUCK SERVICE GROUP s.r.o.

Executive Company

Small

Automotive

UpVision s.r.o.

Executive Company

Small

Software

Czechoslovak Group

Annual Report 2024

Vista Outdoor Sales LLC

Executive Company

Large

Wholesale & Retail trade

VOP Nováky, a.s.

Executive Company

Large

Defence

VÝVOJ Martin, a.s.

Executive Company

Medium

Defence

ZVS holding, a.s.

Executive Company

Large

Defence

ZVS IMPEX, akciová spoločnosť

Executive Company

Medium

Defence

Sector- and Size-based Overview of the Companies Consolidated in this Consolidated Sustainability

Statement (Table ID 2)

Extent to Which Consolidated Sustainability Statement Covers Upstream and

Downstream Value Chain

As a preparatory step for non-financial reporting, CSG conducted a comprehensive value-chain analysis,

examining both upstream and downstream actors and activities. This assessment covered supplier

interactions, procurement processes, and logistics on the upstream side, while downstream activities included

product distribution and customer use.

Despite having made reasonable efforts, CSG was not able to collect all required information about its

upstream and downstream value chain. In these instances, CSG has estimated the necessary information

using reasonable and supportable data to ensure as accurate a representation as possible of its value chain

impacts. For example, GHG emissions accounting incorporates such estimations in the value-chain stages,

covering inbound logistics upstream and outbound logistics downstream.

3 3

1 1

Small Medium Large

Czechoslovak Group

Annual Report 2024

Omission of Information Related to Intellectual Property, Know-How, or

Innovation Results

CSG has not exercised the option to omit any specific information related to intellectual property, know-how,

or results of innovation in this Consolidated Sustainability Statement. All relevant disclosures have been

provided in full compliance with applicable reporting requirements.

Omission of Disclosure on Impending Developments or Ongoing Negotiations

CSG has not exercised the option to omit disclosures regarding impending developments or matters

connected with ongoing negotiations. All relevant information has been disclosed in accordance with

applicable reporting requirements.

ESRS2.BP-2

1.1.2. Disclosures in Relation to Specific

Circumstances

This chapter includes information on any specific circumstances that have influenced the preparation of this

Consolidated Sustainability Statement and provides clarification on the scope, methodology, and any

limitations in the reporting process.

Time Horizons

Definition of short-, medium- and long-term for the purposes of this Consolidated Sustainability Statement:

Short-term horizon: 1 year

Medium-term horizon: 2–5 years

Long-term horizon: 5+ years

These timeframes align with the strategic planning and operational cycles used across the entire Group,

ensuring consistency between sustainability reporting and business decision-making.

Value Chain Estimation

Value chain estimations were used for Scope 3 greenhouse gas (GHG) emissions in certain activities, both

upstream and downstream, for which direct supplier or customer data is unavailable. These estimations rely

on modeled assumptions to assess emissions related to procurement and transportation.

In accordance with reporting requirements, the information provided in this Consolidated Sustainability

Statement is extended to include any material impacts, risks, and opportunities that are connected to the

Group through its direct and business relationships within the upstream and downstream value chain. These

considerations are incorporated following the outcome of CSG’s due diligence process and materiality

assessment, ensuring that all significant value chain-related sustainability impacts are appropriately identified

and addressed.

The estimation process used follows recognized methodologies, including e.g. the GHG Protocol, with its

assumptions validated against internal operational data and industry benchmarks.

Although estimations ensure a comprehensive assessment, CSG acknowledges that some uncertainties exist

due to regional and supplier-specific variations.

Future efforts will focus on enhancing direct data collection to improve reporting accuracy.

Czechoslovak Group

Annual Report 2024

Sources of Estimation and Outcome Uncertainty

Certain quantitative metrics and monetary amounts disclosed in this Consolidated Sustainability Statement are

subject to a high level of measurement uncertainty, particularly where value chain estimations have been

used (see the Value Chain Estimation section above).

The primary sources of measurement uncertainty in this Consolidated Sustainability Statement arise from data

gaps and data inaccuracy. In some areas, adequate data sources and standardized metrics have not yet been

fully established, requiring the use of estimates and assumptions. Additionally, in certain cases, the available

data may lack the necessary accuracy or completeness, leading to potential variations in the reported figures.

Data limitations, assumptions, and approximations are applied in certain areas of sustainability reporting to

ensure a complete and reasonable representation of impacts.

Workforce and Environmental Data Methodology and Considerations

The workforce-related figures presented in this Consolidated Sustainability Statement, including total

employee counts and workforce composition, represent the best estimates available at the time of reporting.

While CSG provided standardized methodology, definitions, and instructions to reporting entities, variations

in application due to regional differences and human error have resulted in inconsistencies across these

figures. In some cases, data on various workforce categories does not align as expected. Despite additional

guidance and verification efforts, these numbers could not be verified fully.

Similarly, the data disclosed in the chapter 2. (Environmental Information) are based on limited inputs and

partial reporting across group companies. Due to differences in national regulatory frameworks, classification

systems, and data availability, CSG relied on estimations where precise data could not be retrieved.

Consequently, all figures in the chapters 2. (Environmental Information) and 3.1. (Own Workforce) should be

interpreted as estimates. CSG is committed to enhancing its data collection processes, internal guidance, and

training for future reporting cycles to improve the consistency, accuracy, and completeness of both workforce

and environmental data.

Changes in the Preparation or Presentation of Sustainability Information

In contrast with our 2023 sustainability report—which followed the GRI standards—this year’s disclosure has

been prepared in alignment with the European Sustainability Reporting Standards (ESRS) instead. This

transition is driven by the evolving regulatory landscape, particularly the Corporate Sustainability Reporting

Directive (CSRD), which mandates broader and more detailed disclosures on environmental, social, and

governance matters. By adopting the ESRS, we are ensuring compliance, enhancing comparability, and

providing stakeholders with a more transparent and comprehensive view of our sustainability performance.

CSG has not included revised comparative figures in this Consolidated Sustainability Statement, as it would

not be feasible to prepare comparative information for prior periods. This is due to the transition to ESRS-

compliant reporting in 2024, which has introduced new disclosure requirements and methodologies that were

not previously applied.

CSG has not provided revised comparative figures in this Consolidated Sustainability Statement, as no prior-

period figures have been adjusted.

Czechoslovak Group

Annual Report 2024

Reporting Errors in Prior Periods

A material error has been identified in the disclosed EU Taxonomy

data from the prior reporting period. This

error resulted from the application of an incorrect methodology for alignment assessment. CSG has since

corrected its methodology for assessing alignment and implemented unified processes to improve accuracy

and ensure compliance with the EU Taxonomy framework in future disclosures.

The corrected data for 2023 is incorporated in chapter 2.1. (EU Taxonomy Disclosures) of this Consolidated

Sustainability Statement, reflecting adjustments made to the previously disclosed EU Taxonomy data.

Disclosures Stemming from Other Legislation or Generally Accepted

Sustainability Reporting Pronouncements

This sustainability statement incorporates mandatory disclosures pursuant to Article 8 of Regulation (EU)

2020/852 (the EU Taxonomy), which outlines criteria for determining the environmental sustainability of

economic activities.

The partial application of other reporting standards or frameworks (e.g. the GHG Protocol) is referenced along

with the respective reported data throughout this Consolidated Sustainability Statement, ensuring

transparency and alignment with the applicable disclosure requirements.

Incorporation by Reference

This Consolidated Sustainability Statement incorporates Data Points S1-6_17 and SBM-1_07 by reference.

Use of Phase-in Provisions

CSG exceeds the threshold of an average of 750 employees on the balance-sheet date for the 2024 reporting

period and is therefore required to disclose information in accordance with the ESRS requirements. However,

based on the outcome of CSG’s double materiality assessment, ESRS E4 (Biodiversity and Ecosystems) and

ESRS S2 (Workers in the Value Chain) have not been assessed as material for the Group at this time.

Biodiversity-related impacts (ESRS E4) were not deemed material due to CSG’s limited operational interaction

with biodiversity-sensitive areas. Similarly, ESRS S2 was assessed as non-material. Broader value chain

considerations may be addressed in future cycles as internal systems and processes continue to evolve. List

of Phase-in ESRS Data points to be found in Annex 1 of this Consolidated Sustainability Statement.

Regulation (EU) 2020/852 of the European Parliament and of the Council of 18 June 2020 on the establishment of a

framework to facilitate sustainable investment, and amending Regulation (EU) 2019/2088 (OJ L 198, 22.6.2020, p. 13)

In accordance with Appendix C of ESRS 1

Czechoslovak Group

Annual Report 2024

1.2. Governance

ESRS2.GOV-1

1.2.1. Role of Administrative,

Management, and Supervisory Bodies

This chapter provides an overview of the composition, roles, and responsibilities of CSG’s administrative,

management, and supervisory bodies

in relation to sustainability matters. It outlines their structure, diversity,

and oversight functions in managing material impacts, risks, and opportunities. Additionally, it details the

expertise and skills that these bodies possess or have access to, ensuring informed decision-making and

effective governance for sustainability-related issues.

Information about Composition of Members of Administrative, Management, and

Supervisory Bodies

As of the reporting date, CSG’s administrative, management, and supervisory bodies comprise 161 executive

members and 81 non-executive members.

Number of executive and non-executive members in administrative, management, and supervisory bodies

per sector (Table ID 3)

Sector

Number of Executive

Members

Number of Non-Executive

Members

Aerospace (3)

Automotive (3)

Defence (19)

CZECHOSLOVAK GROUP a.s.

Health Care (1)

Metal Processing (1)

Professional & Commercial Services (7)

Real Estate & Services (1)

Rolling Stock (5)

Software (5)

Textiles, Apparels, Footwear & Accessories (1)

Transportation (3)

Wholesale & Retail Trade (8)

Total for Czechoslovak Group (57)

161

Numbers in brackets indicate the number of CSG companies in the respective sector.

CSG ensures employee representation through its established mechanisms that facilitate dialogue between

workers and management. Its employee representatives participate in discussions on key workplace matters.

In accordance with the applicable labor laws and internal governance structures, worker representation is

integrated into decision-making processes to promote transparency, inclusivity, and fair treatment.

Administrative, management, and supervisory body: herein should be understood as the bodies of governance defined

by entities’ statutes—their board of directors, supervisory board, etc.

Czechoslovak Group

Annual Report 2024

Additionally, CSG maintains regular engagement with employee representatives to address concerns and

enhance workplace policies, fostering a collaborative and supportive work environment.

CSG’s administrative, management, and supervisory bodies comprise members with extensive experience

across the sectors in which the Group operates. Their expertise spans key business functions such as

strategic leadership, financial management, operations, compliance, and sustainability. Additionally, members

have a strong understanding of the geographic regions where CSG conducts business, enabling effective

oversight of region-specific regulatory requirements, market dynamics, and operational challenges. This

professionally and geographically diverse experience ensures informed decision-making aligned with CSG’s

strategic objectives.

Information about Diversity of Administrative, Management, and Supervisory

Bodies

As of the reporting period, 85% of the members of CSG’s administrative, management, and supervisory

bodies are male, while 15% are female. While the current composition reflects the industry’s traditional

structure, CSG acknowledges the importance of greater gender balance in leadership and governance.

The gender diversity ratio of CSG’s boards, calculated as the average ratio of male to female board members,

stands at 8.47:1 (for each 1 female board member there are 8.47 male board members).

The percentage of independent board members within CSG’s administrative, management, and supervisory

bodies stands at 2%. Looking at the individual sectors, it is a notable 6% in Defence. These figures reflect

CSG’s governance structure and the level of independent oversight across key business areas.

Information about Roles and Responsibilities of Administrative, Management, and

Supervisory Bodies

CSG’s oversight of sustainability-related impacts, risks, and opportunities is primarily managed by the Board

of Directors of CZECHOSLOVAK GROUP a.s. (the “Board of Directors”), with a dedicated board member being

responsible for sustainability-related topics. To support informed decision-making in this area, the Board of

Directors is advised by the Sustainability Committee, which is led by the Chief Sustainability Officer (CSO) and

consists of key individuals within the management body of CZECHOSLOVAK GROUP a.s.

These responsibilities are formally embedded in:

 Board Mandates: These clearly define the Board of Directors’ role in sustainability governance, including

oversight of its ESG strategy, risk management, and compliance.

 Sustainability Committee Responsibilities: These outline its advisory role in monitoring sustainability risks

and opportunities, ensuring alignment with corporate strategy.

 Policies: These integrate sustainability governance within CSG’s broader management structure, ensuring

transparency and accountability.

The management’s role in the governance of sustainability-related impacts, risks, and opportunities is clearly

structured so as to ensure effective monitoring, management, and oversight.

Delegation and oversight:

 The CSO holds the primary responsibility for sustainability matters and reports directly to the Board of

Directors.

 The Sustainability Committee, chaired by the CSO, includes key members of the management team and is

responsible for coordinating sustainability initiatives, assessing ESG risks, and ensuring regulatory

compliance.

 Oversight of the Sustainability Committee’s activities is exercised by the Board of Directors—most directly

through a designated board member responsible for sustainability.

Governance processes, controls, and procedures:

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Annual Report 2024

 The CSO provides periodic reports to the Board of Directors on material sustainability risks and

opportunities, progress on ESG initiatives, and compliance with regulatory frameworks.

 Management oversees the execution of sustainability policies and frameworks, ensuring adherence at both

the operational and strategic levels.

Reporting lines to the administrative, management, and supervisory bodies are structured as follows:

 The CSO is responsible for leading sustainability-related initiatives and for ESG management.

 The CSO reports directly to the Board of Directors, ensuring strategic alignment between sustainability

priorities and business objectives.

 The Sustainability Committee, chaired by the CSO and composed of key management representatives,

provides periodic updates to the Board of Directors, covering sustainability risks, performance, and

regulatory compliance.

 The Board of Directors, and most notably the designated board member responsible for sustainability,

evaluates sustainability performance and oversees key decisions related to ESG matters.

Sustainability-related controls and procedures are effectively integrated into the company’s broader

governance and operational frameworks to ensure a cohesive approach to managing material impacts, risks,

and opportunities. Key mechanisms include:

 Cross-Departmental Engagement – The Sustainability Committee collaborates with key departments

such as Finance, Legal, Operations, and HR to align sustainability goals with corporate strategy.

 Data Collection and Reporting Systems – These are centralized reporting mechanisms that integrate

sustainability-related data collection within business intelligence platforms, ensuring consistency and

accuracy in reporting.

 Collaboration with Internal Audits & Compliance – This mechanism reviews sustainability-related

compliance, ensuring that CSG adheres to regulations and aligns controls with existing financial and

operational auditing processes.

 Sustainability in CSG’s Group Policy Framework – ESG considerations will be incorporated in the

upcoming group-wide policies framework, including procurement, human resources, and business

ethics, ensuring sustainability principles are reflected across all business functions.

While no sustainability-related targets were set for the 2024 reporting period, CSG has established a

governance framework outlining how such targets will be determined, overseen, and monitored in future

reporting cycles. Within this framework, the Board of Directors and senior executive management are

designated to play a central role in setting targets and ensuring accountability for material impacts, risks, and

opportunities. The target-setting process is designed to include:

 The Board of Directors, with a designated member responsible for sustainability, provides strategic

oversight and approves sustainability-related targets and commitments aligned with CSG’s business

priorities and regulatory requirements.

 The Sustainability Committee identifies key sustainability metrics, proposes targets, and ensures

alignment with CSG’s overall business strategy.

 Targets are developed through a data-driven approach, leveraging materiality assessments, risk

evaluations, and stakeholder engagement.

Progress monitoring and reporting:

 The Sustainability Committee regularly reviews progress on targets, assesses performance against key

sustainability indicators, and presents updates to the Board of Directors.

 The CSO and sustainability team collect data, track performance, and ensure compliance with ESRS and

CSRD requirements.

 The Board of Directors evaluates reports, ensures alignment with regulatory expectations, and

discusses corrective actions if necessary.

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Administrative, Management, and Supervisory Bodies’ Available Skills and

Expertise

CZECHOSLOVAK GROUP a.s. ensures its administrative, management, and supervisory bodies have the

necessary sustainability expertise through a combination of internal knowledge, external advisory support,

and training. Key sustainability knowledge channels are:

 Consulting external ESG specialists and consulting firms so as to align with regulations and best practices.

 Providing training to board members and senior executives through internal knowledge-sharing sessions

on sustainability topics, ESG compliance, and corporate responsibility.

CSG’s sustainability expertise supports it in the management of climate, social, and governance risks.

Knowledge regarding GHG emissions, labor rights, and compliance ensures effective decision-making, risk

mitigation, and regulatory alignment. Its expertise is strengthened through internal training and external

advisory support.

ESRS2.GOV-2

1.2.2. Sustainability Matters Addressed

by CSG Administrative, Management,

and Supervisory Bodies

This chapter outlines how CSG’s administrative, management, and supervisory bodies are informed about

sustainability matters and how these topics were addressed during the reporting period. It provides insight

into the flow of information, key discussions, and decisions made, confirming that these bodies are

adequately informed and able to effectively oversee sustainability-related impacts, risks, and opportunities.

Disclosure of How Administrative, Management, and Supervisory Bodies are

Informed about Sustainability Matters and How These Matters Were

Addressed

Board of Directors is provided information about sustainability matters, e.g. material impacts, risks, and

opportunities, on a monthly basis. These updates are provided by the Sustainability Committee, led by the

CSO, and include insights from key internal functions responsible for ESG topics. Additionally, sustainability

matters are integrated into annual strategic reviews, ensuring continuous oversight and alignment with the

Group’s broader business objectives.

Board of Directors considers sustainability-related impacts, risks, and opportunities as part of its strategic

oversight and decision-making on major transactions. The Sustainability Committee provides regular

assessments to the Board of Directors, ensuring that ESG factors are integrated into the business strategy and

investment decisions. Sustainability considerations are embedded in the due diligence for major transactions,

aligning with the Group’s long-term objectives and regulatory requirements.

During the reporting period, Board of Directors and Sustainability Committee addressed key material impacts,

risks, and opportunities related to sustainability, including:

 Preparation for CSRD Reporting – Implementation of data collection processes, materiality assessments,

and governance structures to ensure compliance with European Sustainability Reporting Standards

(ESRS) and enhance transparency.

 Climate and Environmental topics – Assessment of carbon footprint and energy efficiency.

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 Business Ethics and Compliance – Oversight of anti-corruption measures, whistleblower protection, and

ethical business conduct.

 Workforce and Social Responsibility – Review of employee well-being, diversity, health & safety, and

training programs.

These matters were integrated into decision-making, risk management frameworks, and corporate policies to

strengthen CSG’s sustainability performance, regulatory alignment, and strategic development.

ESRS2.GOV-3

1.2.3. Integration of Sustainability-

Related Performance in Incentive

Schemes

This chapter provides an overview of how sustainability-related performance is integrated into incentive

schemes for members of the administrative, management, and supervisory bodies. It outlines whether and

how remuneration, bonuses, or other incentives are tied to sustainability objectives.

Disclosure of Integration of Sustainability-related Performance in Incentive

Schemes

There were no incentive schemes linked to sustainability matters for board members of CSG’s companies

during the 2024 reporting period. However, in 2025, CSG will introduce a sustainability remuneration policy

as part of the CSG Policy Framework. This policy will introduce performance-based incentives for individuals

and teams directly involved in sustainability reporting, ensuring that sustainability objectives are integrated

into compensation structures. The incentives will be linked to measurable sustainability metrics, such as the

results of non-financial audits and similar assessments, reinforcing accountability and commitment to ESG

goals.

There are currently no sustainability-related targets or impacts used to assess the performance of members

of the administrative, management, and supervisory bodies within CSG. As 2024 marks the first year of

collecting comprehensive sustainability data, the company is focused on establishing a robust data foundation

before setting performance-based targets. Before implementing these targets, CSG aims to analyze all

available data, gain a deep understanding of material impacts, and ensure that any future targets align with

the Group’s strategic direction. Once CSG sets such targets for members of its administrative, management,

and supervisory bodies, it will integrate sustainability-related performance metrics into its remuneration

policies.

The planned sustainability remuneration policy for 2025 does not allocate a percentage of variable

remuneration based on sustainability-related targets or impacts. Instead, it utilizes a fixed amount designated

for individuals and teams that are directly involved in sustainability reporting and performance. All

sustainability-related remuneration is approved and updated at CSG’s Group level. The policy will be governed

by the Board of Directors, with input from the Sustainability Committee. Regular reviews will ensure alignment

with the Group’s strategic sustainability objectives and regulatory requirements.

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ESRS2.GOV-4

1.2.4. Statement on Due Diligence

This chapter provides an overview of the undertaking’s due diligence process in relation to sustainability

matters. It outlines how due diligence is conducted, including the identification, assessment, and management

of sustainability-related risks, impacts, and opportunities.

Mapping of Information Provided about the Due Diligence Process

The Consolidated Sustainability Statement includes information on how material sustainability impacts, risks,

and opportunities are identified, assessed, and managed. Relevant disclosures on due diligence are integrated

across various chapters, including those for governance, risk management, and value chain assessments.

This mapping ensures transparency in how CSG aligns its due diligence efforts with regulatory requirements

and internal risk management frameworks.

ESRS2.GOV-5

1.2.5. Risk Management and Internal

Controls over Sustainability Reporting

This chapter outlines the key features of CSG’s risk management and internal control systems as they relate

to sustainability reporting. It provides insight into the processes established to identify, assess, and manage

sustainability-related risks, ensuring accuracy, reliability, and compliance in reporting.

Disclosure of Risk Management and Internal Controls over Sustainability

Reporting

CSG’s risk management and internal control processes for sustainability reporting cover the identification,

assessment, and management of sustainability-related risks and controls. This system applies to all business

units and subsidiaries within CSG’s consolidation scope. The Board of Directors, supported by the

Sustainability Committee, oversees sustainability-related risk management. Internal reviews are integrated

into the reporting process, including verification by the Sustainability Committee and coordination with the

relevant business units to ensure compliance with evolving regulations. Additionally, engagement with internal

and external stakeholders plays a key role in shaping risk identification, reporting accuracy, and alignment

with best practices, ensuring that CSG’s sustainability reporting remains transparent.

During the 2024 reporting cycle, CSG encountered gaps in data collection and accuracy, primarily due to the

diversity of its operations across multiple sectors, countries, and company sizes, each with distinct regulatory

requirements and reporting standards. These variations posed challenges in consolidating sustainability-

related data consistently across the organization. The most significant data gaps were identified in the

environmental section of this Consolidated Sustainability Statement, where differences in local regulatory

frameworks and data availability led to inconsistencies. Where such inconsistencies were encountered,

estimations were used to ensure completeness of reporting while maintaining a reasonable level of accuracy.

To address these challenges, CSG is prioritizing improvements in data standardization, internal guidance, and

cross-functional collaboration.

Risks are identified mainly through internal risk mapping, covering areas such as climate, human rights, the

supply chain, and regulatory and reputational risks, as well as stakeholder consultations. Each risk is evaluated

based on its severity, likelihood, and potential financial or operational impact, using a scoring system. Where

data limitations exist, qualitative indicators supplement the evaluation. High-priority risks are addressed

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Annual Report 2024

through preventive measures, risk transfer, and adaptation strategies, ensuring alignment with CSG’s

business objectives.

CSG has identified several key sustainability-related risks, including climate risks, regulatory-compliance

risks, supply chain disruptions, human rights concerns, and reputational risks. Climate risks encompass both

physical risks, such as extreme weather events affecting operations, and transition risks related to evolving

regulations and market shifts. To mitigate these, CSG is collating relevant data needed for setting its

sustainability strategy. Regulatory-compliance risks stem from stricter ESG regulations, such as the CSRD and

EU Taxonomy. To address these, CSG is in the process of implementing a “CSG Group Policy” framework to

ensure reporting is aligned with evolving requirements. Reputational risks, linked to ESG performance and

stakeholder expectations, are mitigated through proactive communication, transparent reporting, and

continuous improvements in sustainability practices.

CSG is currently in the process of establishing and integrating sustainability risk assessment frameworks and

internal controls into its core business functions to enhance future governance, compliance, and decision-

making. As part of the Group’s transition toward full alignment with evolving ESG regulations—including the

CSRD and EU Taxonomy—foundational processes are being developed and gradually embedded within both

sustainability and finance teams at the Group level. The Sustainability Committee, alongside internal audit

functions, is expected to play a key oversight role as these processes mature. Sustainability criteria, such as

human rights adherence and environmental impact, are factored into vendor selection and contract

management. From a governance perspective, sustainability risks and control measures are integrated into

financial planning and risk management processes. The Board of Directors, in collaboration with the

Sustainability Committee, evaluates sustainability-related risks as part of overall enterprise risk management,

ensuring that sustainability considerations are embedded in corporate strategy. Training and internal

awareness initiatives further embed sustainability risk management within CSG’s functions. Targeted training

programs for the finance, compliance, and operational teams ensure employees understand sustainability

risks and their role in mitigating them.

CSG ensures periodic reporting of sustainability risk assessment findings and internal controls to the Board of

Directors, the Sustainability Committee, and senior management. The Sustainability Committee conducts

yearly reviews of ESG risks and quarterly regulatory developments. Key findings are compiled into risk-

monitoring reports and presented to the Board of Directors for oversight.

1.3. Strategy

ESRS2.SBM-1

1.3.1. Strategy, Business Model, and Value

Chain

This chapter outlines how CSG’s strategy, business model, and value chain relate to sustainability matters,

highlighting key strategic elements that influence or are influenced by sustainability. It provides insight into

impacts, risks, and opportunities, enhancing transparency for stakeholders.

Disclosure of Elements of Strategy That Relate to or Impact Sustainability

Matters, Business Model and Value Chain

CSG’s key product and service offerings include (i) defence products and services, such as the production,

servicing, and repairing of military machinery, small arms ammunition, and radar equipment; (ii) automotive

products and services, including the production of brake systems and the servicing and repairing of vehicles

and their accessories; (iii) rolling-stock-related products and services, including the manufacturing,

maintenance, and repairing of brake systems; (iv) aerospace industry services, such as airplane and

helicopter maintenance, repairs, and specialized accessories; and (v) metal fabrication and processing,

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Annual Report 2024

including other engineering production and the supplying of processed metal products. Additionally, CSG

provides transportation and logistics services and engages in the sale of goods across its business segments.

During this reporting period, CSG expanded its Defence-sector portfolio through the acquisition of The Kinetic

Group, a leading supplier of small-caliber ammunition, reinforcing its market presence and capabilities in the

defence industry.

A diverse range of markets and customer groups are served by CSG, including defence and security agencies,

aerospace manufacturers, and railway operators. The company has a strong presence on European, North

American, and Asian markets, supplying mainly government entities, but private sector clients as well. During

the reporting period, CSG has continued to grow its presence on the North American and NATO markets,

aligning with global security demands and regulatory developments.

As of the reporting period, CSG’s total workforce is distributed across key geographical regions as follows:

Europe—9,025 employees, North America—3,776 employees, and Asia—54 employees.

There are no products or services produced or provided by CSG that are banned in certain markets. All

operations comply with applicable legal and regulatory requirements, ensuring adherence to international

trade laws, industry standards, and ethical business practices in all regions of operation.

CSG reports its revenue on the basis of business segments as outlined in IFRS 8. While ESRS sector-specific

standards are not yet published, we have aligned our revenue breakdown with CSG’s key products and

services. This revenue segmentation aligns with our financial-statement disclosures and will be adjusted in

the future based on final ESRS sector classifications. Information on revenue breakdown with CSG’s key

products is incorporated by reference to section 8 (Revenues) of the consolidated financial statement.

CSG’s business activities have been assessed with the result of no additional significant ESRS sectors beyond

those already reflected in its primary sectors of operation. The company’s materiality assessment and

reporting focus on its core sectors, including Aerospace, Automotive, Defence, Health Care, Metal

Processing, Professional & Commercial Services, Real Estate & Services, Rolling Stock, Software, Textiles,

Apparels, Footwear & Accessories, Transportation, and Wholesale & Retail Trade. These sectors

comprehensively cover CSG’s key revenue-generating activities and material sustainability impacts, with no

additional significant activities requiring separate sector classification.

CSG does not engage in activities related to the fossil fuel sector, chemical production, controversial weapons,

or the cultivation and production of tobacco. The company’s business operations and strategic focus remain

within its core sectors, ensuring alignment with its sustainability commitments and regulatory requirements.

No specific sustainability-related goals have been set for products and services, customer categories,

geographical areas, or stakeholder relationships, as 2024 marks the first year of CSRD-compliant

sustainability reporting. The company is currently focused on establishing a comprehensive baseline through

data collection and materiality assessment. Future sustainability targets will be defined based on these insights

and assessed based on CSG’s significant products/services, as well as markets and customer groups.

The strategic approach to sustainability (as defined by CSRD) is in its early stages for CSG, with the first-year

sustainability reporting serving as a foundation for identifying key challenges and opportunities. The company

recognizes climate impact and regulatory compliance as critical areas requiring long-term strategic alignment.

Description of Business Model and Value Chain

CSG’s operations are supported by a range of strategic inputs that enable its activities across various

industries. These include not only materials and components but also technological expertise and skilled

human capital. The company applies a structured approach to procurement and operational planning,

emphasizing compliance, quality standards, and long-term business continuity.

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The main product groups CSG delivers are, among others, defence products, automotive components, rolling

stock solutions, metal processing services, and aerospace maintenance, ensuring high-quality, reliable

solutions for its customers. Investors benefit from strategic growth and market expansion, while employees,

suppliers, and communities gain from economic contributions and responsible business practices. CSG

continues to enhance sustainability, efficiency, and stakeholder engagement to maximize positive impacts.

CSG’s value chain spans across upstream activities, its own operations, and downstream activities. Upstream

activities include component manufacturing, raw material sourcing, research & development, and inbound

logistics, involving suppliers, regulators, and certification bodies. CSG’s own operations encompass

production, servicing, quality assurance, compliance, asset management, and marketing, directly engaging

employees, customers, and financial institutions. Downstream activities, such as outbound logistics, product

lifecycle management, and policy compliance, involve distributors, end-users, and regulatory bodies. The

mapping of these activities is integrated into CSG’s sustainability assessments, ensuring alignment with its

strategic goals and stakeholder expectations.

ESRS2.SBM-2

1.3.2. Interests and Views of Stakeholders

This chapter outlines how CSG accounts for the interests and views of its stakeholders when shaping its

strategy and business model. It details the approach used to identify key stakeholders, engage with them, and

incorporate their expectations into decision-making processes.

Disclosure of How Stakeholders’ Interests and Views Are Taken into Account

by CSG’s Strategy and Business Model

CSG identifies its key stakeholders based on its value chain mapping process, aligning with the Power-Interest

Model that was used in 2023 to assess stakeholder influence and importance. The main categorization of

stakeholders divides them into internal stakeholders and external stakeholders. The internal stakeholders

include members of CSG’s sustainability committee and the top management members of the companies

within the scope of this Consolidated Sustainability Statement. The primary stakeholder groups among

external stakeholders include suppliers, customers, regulatory bodies, employees, investors, and industry

associations. Stakeholders are categorized based on their level of influence on the value chain. Direct actors

are those who take ownership and possession of the product, such as banks, suppliers, and employees.

Indirect actors influence the value chain without direct ownership; they include human rights defenders,

government entities, and academia. External influences—such as environmental groups and trade

associations—impact the value chain through broader economic, environmental, and socio-cultural forces.

Both internal and external stakeholders are actively engaged to ensure comprehensive participation in the

Group’s sustainability reporting and strategic decision-making processes.

Internal Stakeholder Engagement

Engagement within the Group’s companies is conducted through personal and online meetings with key

management representatives, including CEOs, CFOs, and other top executives of companies falling within the

consolidation scope of this Consolidated Sustainability Statement. The purpose of these meetings is to

educate internal stakeholders on the implications of the Corporate Sustainability Reporting Directive (CSRD),

align expectations, and guide companies through the preparatory steps for the Double Materiality

Assessment. Discussions cover company clustering for reporting, value chain mapping, shortlisting

sustainability matters, and assessing double materiality. The outcome of these meetings is the approval or

amendment of the discussed topics.

External Stakeholder Engagement

Externally, CSG engages with the key stakeholders actively consulted in its sustainability strategy, such as

investors, banks, and media, as identified in the Power-Interest Model outlined in the CSG Sustainability Report

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Annual Report 2024

for 2023. The purpose of these engagements is to explain CSG’s approach to CSRD-aligned reporting, collect

external perspectives, and ensure stakeholder concerns and expectations are addressed in sustainability

disclosures. One-on-one interviews with sustainability teams are planned in order to discuss CSG’s reporting

strategy, ensuring that stakeholder feedback is relevant and actionable. The outcome of these meetings is

confirmation of or commentary on the approach and results of the Double Materiality Assessment.

Stakeholder insights are integrated into CSG’s strategy and business model through structured engagements.

The internal stakeholders emphasize regulatory compliance, risk management, and operational sustainability,

shaping reporting processes and governance. External stakeholders—investors, banks, and media—prioritize

transparency and responsible business practices, influencing disclosure and risk management. By aligning

with stakeholder expectations, CSG ensures it has a responsive and impactful sustainability strategy.

CSG’s strategy and business model are continuously refined to align them with stakeholder expectations, and

this has brought benefits. Based on internal stakeholder feedback, governance structures and sustainability

reporting processes have been strengthened to enhance compliance management. External stakeholders’

priorities, such as increased transparency and responsible business practices, have led to improved

disclosure practices and engagement efforts. Moving forward, CSG will further integrate stakeholder insights

into its strategic planning, operational improvements, and sustainability initiatives to ensure long-term value

creation.

The scope of external stakeholders’ engagement is planned to be broadened to a greater variety of

stakeholder groups as their familiarity with CSRD and sustainability topics deepens. The aim of this planned

expansion is to ensure more qualitative and informed engagement, incorporating insights from a wider range

of stakeholders, including regulatory bodies, industry associations, and civil society groups. Additionally, CSG

will continue to enhance its internal capacity to facilitate meaningful discussions, align strategic priorities with

stakeholder expectations, and strengthen its sustainability commitments.

Administrative, management, and supervisory bodies are informed about the views and interests of affected

stakeholders through regular internal briefings from the sustainability committee. Additionally, findings from

materiality assessments are presented to relevant governance bodies to ensure alignment between CSG’s

business strategy and stakeholder expectations.

ESRS2.SBM-3

1.3.3. Material Impacts, Risks and

Opportunities and Their Interaction with

Strategy and Business Model

This chapter provides an overview of CSG’s material impacts, risks, and opportunities identified through its

materiality assessment and of their connection to the company’s strategy and business model. It outlines how

these factors influence decision-making, resource allocation, and strategic adaptation.

Disclosure of Material Impacts, Risks and Opportunities and How They

Interact with Strategy and Business Model

Based on the double materiality assessment, key material impacts, risks, and opportunities (IROs) have been

identified across CSG’s own operations, business model, and value chain. These IROs span the governance,

social, and environmental domains. Governance-related impacts include corporate culture, ethics, anti-

corruption measures, and legal compliance, with key risks involving reputational damage and regulatory

scrutiny, while opportunities arise from strengthened ethical policies and investor confidence. Social factors

such as diversity, inclusion, employee training, and workforce management present both risks (e.g. employee

turnover and non-compliance) and opportunities (e.g. workforce retention and productivity gains).

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Annual Report 2024

Environmental considerations, particularly climate change mitigation, emissions, pollution management, and

circular economy practices, are critical; they have potential risks tied to regulatory shifts, operational

disruptions, and resource scarcity, while offering opportunities such as cost savings, enhanced brand

reputation, and competitive advantages. The concentration of these material IROs varies across CSG’s

business model and value chain. Within CSG’s own operations, the most critical risks stem from regulatory

compliance, workforce policies, and environmental sustainability. In the upstream supply chain, sustainability

concerns focus on sustainable sourcing, ethical labor practices, and supplier compliance with environmental

and human rights standards. Meanwhile, in the downstream value chain, CSG faces material IROs related to

two areas: community engagement and emissions reductions in product lifecycle management.

Material impacts, risks, and opportunities (IROs) have both current and anticipated effects on CSG’s business

model, value chain, and strategic decision-making. In the short term, regulatory compliance pressures,

particularly from the CSRD, EU Taxonomy, and supply chain due diligence requirements, are driving the need

for both sustainability reporting and robust risk management processes. Climate-related risks, including

emissions reduction targets and circular-economy adoption, are influencing operational practices and

supplier engagement. Social factors such as workforce training and diversity are reshaping CSG’s talent

management strategies, procurement policies, and stakeholder engagement approaches. To respond to these

impacts and risks, CSG has initiated the development of a structured Group Policy Framework to align with

sustainability-related requirements. Additionally, enhanced stakeholder engagement mechanisms are being

implemented to address community and consumer concerns, ensuring greater transparency and

accountability.

The Group’s material impacts have direct and indirect effects on people and the environment across its value

chain. On the negative side of this balance, GHG emissions, and waste generation contribute to environmental

degradation and climate change, while workforce-related issues such as training gaps and diversity

challenges affect employee well-being and inclusivity. Investments into workforce training, diversity, and

ethical business conduct strengthen employee engagement, governance, and transparency, while community

engagement programs enhance stakeholder trust.

The material impacts identified are directly linked to and influenced by the company’s strategy and business

model, shaping both risks and opportunities across its operations and value chain. Environmental impacts,

such as GHG emissions, and waste generation, arise from industrial production, manufacturing processes,

and energy consumption, which are integral to CSG’s core business activities. Social impacts, including

workforce management, human rights concerns, and community relations, stem from the company’s

employment policies, supply chain dependencies, and stakeholder engagement. Governance impacts

primarily relate to ethical business conduct, legal compliance, and corporate culture. Areas such as anti-

corruption, whistleblowing, and business conduct training influence stakeholder trust, legal exposure, and

organizational integrity. At the same time, CSG’s strategic focus on sustainability and operational efficiency

presents opportunities for mitigating these impacts, such as implementing circular economy practices and

enhancing workforce training. In short: by integrating sustainability into decision-making and business

processes.

The reasonably expected time horizons for the identified impacts vary depending on their nature and urgency:

• Short-term (1 year): Impacts related to corporate governance, ethics, compliance, and workforce policies

are expected to materialize quickly. These include whistleblowing mechanisms, diversity and inclusion

efforts, workforce training, and grievance resolution.

• Mid-term (2–5 years): Impacts from climate change transition risks, pollution mitigation, water

management, and consumer rights policies will unfold over a medium timeframe. Regulatory shifts, such

as EU sustainability legislation and emissions targets, will require adaptation.

• Long-term (5+ years): Climate-related physical risks (e.g., extreme weather events and infrastructure

disruptions) will have lasting effects on business operations and supply chains. Additionally, the

transition to a circular economy and renewable energy adoption will continue to evolve, with long-term

financial and strategic planning necessary to mitigate risks and capitalize on sustainability opportunities.

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Annual Report 2024

Material impacts are primarily driven by CSG’s own activities as well as the business relationships within its

value chain. CSG’s key environmental impacts, such as climate change management and pollution mitigation,

arise from its operations, including manufacturing, energy consumption, and emissions control. These

impacts are managed directly through mitigation strategies, operational adjustments, and investments in

sustainable technologies. Additionally, certain impacts originate from upstream and downstream business

relationships. Grievance mechanisms and ethical business conduct impact downstream stakeholders,

including customers and end-users, emphasizing the importance of robust compliance, transparency, and

stakeholder engagement. In some areas, such as human rights, non-discrimination, workforce management,

and ethical business conduct, material impacts stem from both internal operations and external partnerships.

CSG does not currently quantify the financial effects (or anticipated financial effects) of its material risks and

opportunities on its financial position, performance, or cash flows, as the Impact, Risk, and Opportunity (IRO)

assessment has been conducted at the sector level. As a result, no significant risk of material adjustments to

the carrying amounts of assets and liabilities has been identified for the next annual reporting period. To

enhance financial integration, CSG recognizes the need to implement more robust risk assessment

procedures in the future, enabling a more precise evaluation of sustainability-related financial impacts.

The Group’s strategy and business model are designed to be resilient in addressing material impacts and risks

while leveraging material opportunities. Sustainability considerations are integrated into its strategic planning,

with a focus on risk mitigation, regulatory compliance, and innovation. However, the first-year materiality

assessment has highlighted the need for further integration of sustainability risks into financial planning and

operational decision-making.

As 2024 is the first year of double materiality assessment, no comparison to previous periods is available.

Future reporting will allow for comparative analysis as the methodology used evolves.

All disclosed impacts, risks, and opportunities are covered by ESRS Disclosure Requirements, with no

additional entity-specific disclosures included.

1.4. Impact, Risk, and Opportunity

Management

ESRS2.IRO-1

1.4.1. Process to Identify and Assess

Material Impacts, Risks and

Opportunities

This chapter outlines the process through which CSG identifies its impacts, risks, and opportunities (IROs)

and assesses their materiality. Understanding materiality is crucial for determining the disclosures included in

this Consolidated Sustainability Statement. The assessments follow the principle of double materiality,

considering both the financial implications of sustainability factors on the company and the company’s own

impact on the environment and society.

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Disclosure of Process to Identify Impacts, Risks, and Opportunities and to

Assess Which Ones are Material

CSG applies a structured Double Materiality Assessment (DMA) methodology to identify and evaluate

sustainability-related impacts, risks, and opportunities (IROs) in alignment with the Corporate Sustainability

Reporting Directive (CSRD) and European Sustainability Reporting Standards (ESRS). This methodology

ensures a comprehensive evaluation of both financial materiality (how sustainability matters impact CSG) and

impact materiality (how CSG impacts environmental, social, and governance (ESG) factors).

Methodology Applied

1) Identification of Sustainability Matters – A systematic definition of sustainability topics was conducted

using internal and external references, including the sustainability matters that are to be included in the

materiality assessment as defined in the ESRS 1 AR 16, industry benchmarks, and stakeholder

expectations. Sustainability matters were categorized based on their relevance.

2) Materiality Assessment Process

a. Impact Materiality – Defined impacts were scored based on attributes such as scale, scope,

irremediability, and likelihood for both positive and negative impacts.

b. Financial Materiality – Risks and opportunities were assessed based on severity (potential financial

impact) and probability (likelihood of occurrence).

3) Scoring and Thresholds – A 1–5 scale was applied to assess each impact, risk, and opportunity. A

materiality threshold was set at 2.33. The materiality threshold was established at a level that reflects a

balanced intersection of relevance and potential impact, ensuring that matters with meaningful strategic,

operational, or stakeholder significance are prioritised for disclosure. If multiple impacts or risks were

identified under the same sustainability matter, their average score was used for the determination of

materiality.

4) Validation and Consolidation – A two-stage validation process was conducted:

a) Internal validation – In-person discussions with company representatives.

b) External validation – Consultations with key external stakeholders such as banks, regulators,

policymakers, and media to ensure the relevance and accuracy of the assessment.

Once validated, the sustainability topics identified as being material were integrated into CSG’s

reporting.

Assumptions Applied

1) The assessment follows ESRS guidance, ensuring that both impact and financial materiality are

considered independently.

2) The threshold of 2.33 ensures that only relevant and significant impacts, risks, and opportunities are

included in sustainability disclosures.

3) Because IROs were assessed at the sector level, each sector defined within CSG has a tailored materiality

assessment.

4) The DMA process is dynamic, with periodic reassessments planned to reflect evolving regulatory,

market, and operational conditions.

CSG follows a structured due diligence process to identify, assess, prioritize, and monitor potential and actual

impacts on people and the environment. Key processes include mapping of sustainability matters,

assessment of impacts, and risks, assignment of a materiality threshold, and validation (all described in detail

above).

CSG’s impact assessment process is designed to focus on high-risk areas by analyzing the specific activities,

business relationships, and geographies where adverse impacts are more likely to occur.

Czechoslovak Group

Annual Report 2024

• Activities & Operations – This process evaluates core business activities such as manufacturing and

resource use, identifying areas with potential environmental and social risks (e.g., carbon emissions,

labor conditions).

 Sector-Specific Risks – Sectors such as Defence, Automotive, and Heavy manufacturing are given

additional focus due to their higher exposure to regulatory, ethical, and environmental challenges.

• Geographical Focus – Higher scrutiny is applied to regions with weaker regulatory frameworks, high

environmental sensitivity, or significant social risks, ensuring proactive risk mitigation.

The impact assessment process evaluated both direct impacts from CSG’s own operations and indirect

impacts arising through business relationships across the value chain. Within CSG’s own operations, the

process assesses how its manufacturing, logistics, and corporate activities influence environmental and social

factors, including GHG emissions, resource consumption, labor conditions, and workplace safety. In business

relationships, the process assesses impacts linked to suppliers, subcontractors, and other partners, focusing

on areas such as human rights, fair labor practices, and environmental responsibility.

The impact assessment process incorporates consultations with affected stakeholders and external experts

to ensure a comprehensive evaluation of sustainability risks and opportunities. In stakeholder engagement,

CSG actively engages the main stakeholder groups, i.e. the Investors and Banks groups, through one-to-one

interviews to gather insights on how its operations and value chain affect them. This feedback informs the

materiality assessment and the prioritization of sustainability topics. The external expertise provided by

sustainability consultants offers sector-specific insights, emerging risk analyses, and compliance guidance to

align our sustainability approach with best practices and evolving regulations.

CSG prioritizes negative impacts based on the results of the double materiality assessment. For the negative

impact assessment, the process considers the severity of harm to people or the environment, the likelihood

of occurrence, and whether the impact can be effectively mitigated or reversed. More severe, likely, and

irreversible impacts are given higher priority. For positive impacts, the potential benefits, such as enhancing

environmental sustainability or improving social well-being, are assessed based on their scale (extent of

benefit), scope (who benefits), and likelihood (probability of occurrence). A complete list of sustainability

topics that are material for this Consolidated Sustainability Statement is incorporated by reference to chapter

1.4.2. (Disclosure Requirements in ESRS Covered by Consolidated Sustainability Statement) of this

Consolidated Sustainability Statement t and is presented in a table of relevant sectors for which these topics

are material (Table ID 4).

CSG employs a structured risk and opportunity assessment process to identify, evaluate, prioritize, and

monitor sustainability-related financial risks and opportunities. Double materiality assessment integrates the

interconnections between sustainability impacts, dependencies, and financial risks and opportunities to

ensure a comprehensive evaluation of material issues. CSG examines how operations and value chain depend

on environmental and social resources, such as natural capital (energy and water) or human capital (skilled

labor, community relations). Simultaneously, it assesses how business activities impact these resources,

creating potential risks or opportunities. Identified dependencies are analyzed for potential business

disruptions, such as supply chain vulnerabilities due to climate risks or resource scarcity, while positive

impacts are linked to growth opportunities. The financial impact of risks and opportunities arising from these

dependencies is assessed, ensuring they are integrated into business strategy and risk management. For

example, carbon pricing regulations are considered in relation to GHG emissions.

CSG assesses the severity and likelihood of identified risks and opportunities through a structured

methodology, integrating insights from its Double Materiality Assessment (DMA) process. Severity scores how

large is the potential effect on financial performance, reputation, or operations. This considers financial costs,

regulatory consequences, stakeholder reactions, and long-term business implications. Probability scores

what is the likelihood of the risk or opportunity materializing. This assessment uses external market trends to

estimate the probability of occurrence. High-impact and high-likelihood sustainability risks, such as regulatory

compliance (e.g., CSRD) and climate-related risks are prioritized for mitigation and strategic response.

CSG’s decision-making process for impact, risk, and opportunity (IRO) materiality assessment follows a

structured, multi-step approach ensuring alignment with sustainability priorities and regulatory requirements.

Czechoslovak Group

Annual Report 2024

This process is led by the Sustainability Team followed by the Sustainability Committee, which collaborates

with the relevant business units to identify and assess IROs based on double materiality principles.

Decision-Making Process

1. Data Collection & Analysis – Internal data, stakeholder input, and industry benchmarks are gathered to

assess potential and actual sustainability impacts.

2. Scoring & Prioritization – IROs are evaluated based on their severity and probability for risks and

opportunities, and scale, scope, and likelihood for sustainability impacts.

3. Validation & Review – The results undergo internal validation with key management representatives and

sustainability consultants.

4. Final Decision & Approval – The Board of Directors and Sustainability Committee finalize the materiality

assessment and integrate findings into sustainability reporting.

Internal Control Procedures

• Standardized Methodology – A defined materiality assessment framework ensures consistency.

• Governance Oversight – The Sustainability Committee provides independent review and

recommendations.

• Stakeholder Review – Key stakeholders are engaged to validate impact significance.

CSG integrates the identification, assessment, and management of sustainability-related impacts, risks, and

opportunities into its overall sustainability management framework to ensure a comprehensive evaluation of

the company’s risk profile. Findings from the IRO materiality assessment are incorporated into enterprise

sustainability management processes, ensuring that sustainability risks inform decision-making, mitigation

strategies, and reporting.

CSG’s process for identifying, assessing, and managing material impacts, risks, and opportunities integrates

multiple input parameters to ensure a structured and objective evaluation. Stakeholder perspectives play a

critical role; CSG also aligns its methodology with established frameworks such as SASB (Sustainability

Accounting Standards Board) for industry-specific risk identification and the EFRAG Implementation Guidance

on Materiality Assessment, ensuring compliance with CSRD and ESRS requirements. These inputs collectively

support a comprehensive materiality assessment, strengthening sustainability management and strategic

decision-making.

For the 2024 reporting period, CSG conducted its first double materiality assessment, expanding out from

previous assessments, which focused on impact materiality alone. This shift aligns with CSRD and ESRS

requirements, integrating both impact and financial perspectives. As a result, comparisons with prior years

are unfortunately not feasible; however, the updated approach provides a more comprehensive view of

sustainability risks and opportunities.

ESRS2.IRO-2

1.4.2. Disclosure Requirements in ESRS

Covered by Consolidated Sustainability

Statement

This chapter outlines the Disclosure Requirements (DRs) included in this Consolidated Sustainability

Statement and provides transparency on the topics assessed as not being material based on the materiality

assessment. By detailing which DRs have been complied with and which have been omitted, this disclosure

ensures clarity on CSG’s reporting scope, focus areas, and rationale for exclusions, aligning with ESRS

requirements.

Czechoslovak Group

Annual Report 2024

Disclosure of ESRS Disclosure Requirements Complied in this Consolidated

Sustainability Statement

The following table provides a list of data points derived from other EU legislation, indicating the relevant

sustainability matters, the sectors for which they are material, and the corresponding page numbers in this

Consolidated Sustainability Statement.

List of sustainability topics that are material for this Consolidated Sustainability Statement (Table ID 4)

ESRS Codification / Sustainability

Matter

Material for Which Sectors

Disclosure Requirements

Chapter Number

Disclosures pursuant to Article 8 of

Regulation (EU) 2020/852 (Taxonomy

Regulation)

All sectors

2.1. EU Taxonomy

Disclosures

Environment

ESRS E1 – Climate Change

2.2. Climate Change

E1_SM_01 – Climate Change

Management

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

E1.GOV-3: Integration of sustainability-

related performance in incentive

schemes

E1.IRO-1: Description of the processes

to identify and assess material climate-

related impacts, risks, and

opportunities

E1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

strategy and business model

E1-1: Transition plan for climate change

mitigation

E1-2: Policies related to climate change

mitigation and adaptation

E1-3: Actions and resources in relation

to climate change policies

E1-4: Targets related to climate change

mitigation and adaptation

E1-5: Energy consumption and mix

E1-8: Internal carbon pricing

E1-9: Anticipated financial effects from

material physical and transition risks

and potential climate-related

opportunities

E1_SM_02 – Climate Change Mitigation

Plans

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

E1-1: Transition plan for climate change

mitigation

E1-2: Policies related to climate change

mitigation and adaptation

E1-3: Actions and resources in relation

to climate change policies

E1-4: Targets related to climate change

mitigation and adaptation

E1_SM_03 – GHG Emissions and

Targets

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Real Estate & Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Transportation

Wholesale & Retail Trade

E1-1: Transition plan for climate change

mitigation

E1-2: Policies related to climate change

mitigation and adaptation

E1-3: Actions and resources in relation

to climate change policies

E1-4: Targets related to climate change

mitigation and adaptation

E1-6: Gross Scopes 1, 2, 3, and Total

GHG emissions

E1-7: GHG removals and GHG

mitigation projects financed through

carbon credits

E1-8: Internal carbon pricing

ESRS E2 – Pollution

2.3. Pollution

E2_SM_04 – Pollution Mitigation and

Policy

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E2.IRO-1: Description of the processes

to identify and assess material

pollution-related impacts, risks and

opportunities

E2-1: Policies related to pollution

E2-2: Actions and resources related to

pollution

E2-3: Targets related to pollution

E2-4: Pollution of air, water and soil

E2-6: Anticipated financial effects from

pollution-related impacts, risks and

opportunities

Czechoslovak Group

Annual Report 2024

ESRS Codification / Sustainability

Matter

Material for Which Sectors

Disclosure Requirements

Chapter Number

E2_SM_05 – Pollution Incident and

Emergency Preparedness

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E2-1: Policies related to pollution

E2-2: Actions and resources related to

pollution

E2-3: Targets related to pollution

E2-6: Anticipated financial effects from

pollution-related impacts, risks and

opportunities

E2_SM_06 – Substance Management

Aerospace

Automotive

Defence

Health Care

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E2-1: Policies related to pollution

E2-2: Actions and resources related to

pollution

E2-3: Targets related to pollution

E2-5: Substances of concern and

substances of very high concern

E2-6: Anticipated financial effects from

pollution-related impacts, risks and

opportunities

E2_SM_42: Air Pollution

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E2-4: Pollution of air, water and soil

ESRS E3 – Water and Marine

Resources

2.4. Water and Marine

Resources

E3_SM_07 – Water Management and

Policy

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E3-1: Policies related to water and

marine resources

E3-2: Actions and resources related to

water and marine resources

E3-3: Targets related to water and

marine resources

E3_SM_08 – Water Treatment and

Pollution Prevention

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E3-1: Policies related to water and

marine resources

E3-2: Actions and resources related to

water and marine resources

E3-3: Targets related to water and

marine resources

E3_SM_09 – Water Sourcing and

Usage

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E3-1: Policies related to water and

marine resources

E3-2: Actions and resources related to

water and marine resources

E3-3: Targets related to water and

marine resources

E3-4: Water consumption

E3_SM_10 – Water-related Sustainable

Practices and Ecological Impact

Metal Processing

Textiles, Apparels, Footwear, &

Accessories

E3.IRO-1: Description of the processes

to identify and assess material water

and marine resources-related impacts,

risks, and opportunities

E3-1: Policies related to water and

marine resources

E3-2: Actions and resources related to

water and marine resources

E3-3: Targets related to water and

marine resources

E3-5: Anticipated financial effects from

water and marine resources-related

risks and opportunities

ESRS E5 – Resource Use and Circular

Economy

2.5. Resource Use and

Circular Economy

E5_SM_14 – Waste Management and

Reduction Strategies

Aerospace

Automotive

Defence

Health Care

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E5-1: Policies related to resource use

and circular economy

E5-2: Actions and resources related to

resource use and circular economy

E5-3: Targets related to resource use

and circular economy

E5-5: Resource outflows

E5_SM_17 – Circular Economy

Practices

Aerospace

Automotive

Defence

Metal Processing

Rolling Stock

Textiles, Apparels, Footwear, &

Accessories

E5.IRO-1: Description of the processes

to identify and assess material

resource use and circular economy-

related impacts, risks, and

opportunities

E5-1: Policies related to resource use

and circular economy

E5-2: Actions and resources related to

resource use and circular economy

Czechoslovak Group

Annual Report 2024

ESRS Codification / Sustainability

Matter

Material for Which Sectors

Disclosure Requirements

Chapter Number

E5-3: Targets related to resource use

and circular economy

E5-5: Resource outflows

E5-6: Anticipated financial effects from

resource use and circular economy-

related risks and opportunities

Social

ESRS S1 – Own Workforce

3.1. Own Workforce

S1_SM_18 – Diversity and Inclusion

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

own workforce strategy and business

model

S1-1: Policies related to own workforce

S1-12: Percentage of employees with

disabilities

S1-16: Remuneration metrics (pay gap

and total remuneration)

S1-4: Taking action on material impacts

on own workforce

S1-5: Targets related to managing

material impacts on own workforce

S1-6: Characteristics of the

undertaking’s employees

S1-9: Diversity metrics

S1_SM_19 – Employee Training and

Development

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

own workforce strategy and business

model

S1-1: Policies related to own workforce

S1-13: Training and skills development

metrics

S1-4: Taking action on material impacts

on own workforce

S1-5: Targets related to managing

material impacts on own workforce

S1_SM_20 – Grievance and Compliance

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

own workforce strategy and business

model

S1-1: Policies related to own workforce

S1-17: Incidents, complaints and severe

human rights impacts

S1-3: Processes to remediate negative

impacts and channels for own

workforce to raise concerns

S1-4: Taking action on material impacts

on own workforce

S1-5: Targets related to managing

material impacts on own workforce

S1_SM_21 – Health and Safety

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

own workforce strategy and business

model

S1-1: Policies related to own workforce

S1-11: Social protection

S1-14: Health and safety metrics

S1-4: Taking action on material impacts

on own workforce

S1-5: Targets related to managing

material impacts on own workforce

S1_SM_22 – Human Rights and Non-

Discrimination

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

own workforce strategy and business

model

S1-1: Policies related to own workforce

S1-17: Incidents, complaints and severe

human rights impacts

S1-2: Processes for engaging with own

workforce and workers'

representatives about impacts

S1-4: Taking action on material impacts

on own workforce

S1-5: Targets related to managing

material impacts on own workforce

S1_SM_23 – Workforce Management

and Policy

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

S1.SBM-3: Material impacts, risks, and

opportunities and their interaction with

own workforce strategy and business

model

S1-1: Policies related to own workforce

S1-10: Adequate wages

Czechoslovak Group

Annual Report 2024

ESRS Codification / Sustainability

Matter

Material for Which Sectors

Disclosure Requirements

Chapter Number

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S1-15: Work-life balance metrics

S1-16: Remuneration metrics (pay gap

and total remuneration)

S1-2: Processes for engaging with own

workforce and workers'

representatives about impacts

S1-4: Taking action on material impacts

on own workforce

S1-5: Targets related to managing

material impacts on own workforce

S1-6: Characteristics of the

undertaking’s employees

S1-7: Characteristics of non-employee

workers in the undertaking’s own

workforce

S1-8: Collective bargaining coverage

and social dialogue

S1-9: Diversity metrics

ESRS S3 – Affected Communities

3.2. Affected

Communities

S3_SM_29 – Community Engagement

Automotive

Metal Processing

S3.SBM-3: Material impacts, risks, and

opportunities and their interaction with

affected communities strategy and

business model

S3-1: Policies related to affected

communities

S3-2: Processes for engaging with

affected communities about impacts

S3-3: Processes to remediate negative

impacts and channels for affected

communities to raise concerns

S3-4: Taking action on material

impacts on affected communities and

approaches to managing material risks

and opportunities

S3-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

S3_SM_30 – Community Grievance and

Compliance

Metal Processing

S3.SBM-3: Material impacts, risks, and

opportunities and their interaction with

affected communities strategy and

business model

S3-1: Policies related to affected

communities

S3-3: Processes to remediate negative

impacts and channels for affected

communities to raise concerns

S3-4: Taking action on material

impacts on affected communities and

approaches to managing material risks

and opportunities

S3-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

S3_SM_31 – Community Management

and Policy

Metal Processing

S3.SBM-3: Material impacts, risks, and

opportunities and their interaction with

affected communities strategy and

business model

S3-1: Policies related to affected

communities

S3-4: Taking action on material

impacts on affected communities and

approaches to managing material risks

and opportunities

S3-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

ESRS S4 – Consumers and End-users

3.3. Consumers and

End-users

S4_SM_32 – Consumer Rights and

Human Rights

Aerospace

Automotive

Defence

Health Care

Metal Processing

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S4.SBM-3: Material impacts, risks, and

opportunities and their interaction with

consumers and end-users strategy and

business model

S4-1: Policies related to consumers and

end-users

S4-4: Taking action on material

impacts on consumers and end-users,

and approaches to managing material

Czechoslovak Group

Annual Report 2024

100

ESRS Codification / Sustainability

Matter

Material for Which Sectors

Disclosure Requirements

Chapter Number

risks and pursuing material

opportunities

S4-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

S4_SM_33 – Consumer Engagement

Health Care

Metal Processing

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S4.SBM-3: Material impacts, risks, and

opportunities and their interaction with

consumers and end-users strategy and

business model

S4-1: Policies related to consumers and

end-users

S4-2: Processes for engaging with

consumers and end-users about

impacts

S4-3: Processes to remediate negative

impacts and channels for consumers

and end-users to raise concerns

S4-4: Taking action on material

impacts on consumers and end-users,

and approaches to managing material

risks and pursuing material

opportunities

S4-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

S4_SM_34 – Consumer Grievance and

Compliance

Aerospace

Automotive

Defence

Health Care

Metal Processing

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S4.SBM-3: Material impacts, risks, and

opportunities and their interaction with

consumers and end-users strategy and

business model

S4-1: Policies related to consumers and

end-users

S4-3: Processes to remediate negative

impacts and channels for consumers

and end-users to raise concerns

S4-4: Taking action on material

impacts on consumers and end-users,

and approaches to managing material

risks and pursuing material

opportunities

S4-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

S4_SM_35 – Consumer Management

and Policy

Aerospace

Automotive

Defence

Health Care

Metal Processing

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

S4.SBM-3: Material impacts, risks, and

opportunities and their interaction with

consumers and end-users strategy and

business model

S4-1: Policies related to consumers and

end-users

S4-4: Taking action on material

impacts on consumers and end-users,

and approaches to managing material

risks and pursuing material

opportunities

S4-5: Targets related to managing

material negative impacts, advancing

positive impacts, and managing

material risks and opportunities

Governance

ESRS G1 – Business Conduct

4. Business Conduct

G1_SM_36 – Corporate Culture and

Ethics

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Real Estate & Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

G1.GOV-1: Governance structure and

composition related to business

conduct

G1-1: Business conduct policies and

corporate culture

G1-2: Management of relationships

with suppliers

G1-4: Confirmed incidents of

corruption or bribery

G1-5: Political influence and lobbying

activities

G1_SM_37 – Anti-Corruption and Anti-

Bribery

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

G1-1: Business conduct policies and

corporate culture

G1-3: Prevention and detection of

corruption and bribery

G1-4: Confirmed incidents of

corruption or bribery

Czechoslovak Group

Annual Report 2024

101

ESRS Codification / Sustainability

Matter

Material for Which Sectors

Disclosure Requirements

Chapter Number

Real Estate & Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

G1_SM_38 – Whistleblowing and

Reporting

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Real Estate & Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

G1-1: Business conduct policies and

corporate culture

G1-4: Confirmed incidents of

corruption or bribery

G1_SM_39 – Business Conduct Training

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Real Estate & Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Wholesale & Retail Trade

G1-1: Business conduct policies and

corporate culture

G1-3: Prevention and detection of

corruption and bribery

G1-4: Confirmed incidents of

corruption or bribery

G1_SM_40 – Legal Compliance and

Investigations

Aerospace

Automotive

Defence

Health Care

Metal Processing

Professional & Commercial Services

Real Estate & Services

Rolling Stock

Software

Textiles, Apparels, Footwear, &

Accessories

Transportation

Wholesale & Retail Trade

G1-1: Business conduct policies and

corporate culture

G1-3: Prevention and detection of

corruption and bribery

G1-4: Confirmed incidents of

corruption or bribery

CSG has assessed the following topics as being non-material for the reporting period:

• ESRS E4 Biodiversity and Ecosystems –Although biodiversity remains a crucial environmental

concern, biodiversity-related practices are currently less critical for CSG, as the group operates in

sectors with limited direct interaction with ecosystems or biodiversity-sensitive areas. CSG’s current

sustainability priorities are therefore focused on climate change mitigation and adaptation, where the

environmental impact is more immediate and significant. Establishing internal processes, data

collection frameworks, and governance structures for climate-related topics is a priority before

considering the expansion of efforts to biodiversity and ecosystem impacts in the future.

• ESRS S2 Workers in the Value Chain – Even though the well-being of workers in the value chain is

clearly important, the double materiality assessment conducted at CSG has determined that this topic

is currently non-material for CSG’s activities. CSG’s current focus is on its own workforce, ensuring

they can enjoy robust internal policies, fair working conditions, and employee development

programs. Strengthening internal workforce management and compliance processes is a priority

before expanding efforts to assess and address impacts within the broader value chain.

CSG has defined the set of material information for disclosure based on a double materiality assessment,

i.e., considering both impact materiality and financial materiality. If a sustainability matter was assessed as

being material from at least one perspective—impact or financial—it was considered material for reporting

purposes. The assessment used a scoring system from 1 to 5, with a materiality threshold set at 2.33 and

above. This ensured that only sustainability matters with a significant impact on people, the environment, or

financial performance were prioritized.

List of sustainability topics that are non-material for this Consolidated Sustainability Statement(Table ID 5)

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ESRS Codification / Sustainability

Matter

Disclosure Requirements

Data Points

Environment

ESRS E2 – Pollution

E2_SM_44 – Water and Soil Pollution

E2-4: Pollution of air, water and soil

E2-4_01

E2-4_03

E2-4_04

E2-4_05

E2-4_06

E2-4_07

ESRS E3 – Water and Marine

Resources

E3_SM_11 – Marine Resource

Preservation

E3.IRO-1: Description of the processes to identify and assess material

water and marine resources-related impacts, risks, and opportunities

E3.IRO-1_02

E3-1: Policies related to water and marine resources

E3-1_05

E3-1_09

E3-3: Targets related to water and marine resources

E3-3_02

E3_SM_45 – Water Storage

E3-4: Water consumption

E3-4_03

E3-4_04

E3-4_05

ESRS E5 – Resource Use and Circular

Economy

E5_SM_15 – Sustainable Sourcing and

Renewable Resources

E5-1: Policies related to resource use and circular economy

E5-1_02

E5-3: Targets related to resource use and circular economy

E5-3_05

E5_SM_16 - Resource Transition and

Recycling

E5-1: Policies related to resource use and circular economy

E5-1_01

E5-3: Targets related to resource use and circular economy

E5-3_04

E5-4: Resource inflows

E5-4_01

E5_SM_46 – Resource inflows

E5-4: Resource inflows

E5-4_01

E5-4_02

E5-4_03

E5-4_04

E5-4_05

E5-4_06

E5-4_08

E5_SM_47 – Products and Materials

E5-5: Resource outflows

E5-5_02

E5-5_03

E5-5_04

E5-5_05

E5-5_06

Social

ESRS S2 – Workers in the Value

Chain

S2_SM_24 – Value Chain - Employee

Training and Development

S2.SBM-3: Material impacts, risks, and opportunities and their

interaction with value chain workers strategy and business model

S2-1: Policies related to value chain workers

S2-4: Taking action on material impacts on value chain workers, and

approaches to managing material risks and pursuing material

opportunities

S2-5: Targets related to managing material negative impacts,

advancing positive impacts, and managing material risks and

opportunities

S2_SM_25 – Value Chain - Grievance

and Compliance

S2-1: Policies related to value chain workers

S2-3: Processes to remediate negative impacts and channels for

value chain workers to raise concerns

S2-4: Taking action on material impacts on value chain workers, and

approaches to managing material risks and pursuing material

opportunities

S2-5: Targets related to managing material negative impacts,

advancing positive impacts, and managing material risks and

opportunities

S2_SM_26 – Value Chain - Human

Rights and Non-Discrimination

S2.SBM-3: Material impacts, risks, and opportunities and their

interaction with value chain workers strategy and business model

S2-1: Policies related to value chain workers

S2-2: Processes for engaging with value chain workers about impacts

S2-4: Taking action on material impacts on value chain workers, and

approaches to managing material risks and pursuing material

opportunities

S2-5: Targets related to managing material negative impacts,

advancing positive impacts, and managing material risks and

opportunities

S2_SM_27 – Value Chain - Workforce

Management and Policy

S2.SBM-3: Material impacts, risks, and opportunities and their

interaction with value chain workers strategy and business model

S2-1: Policies related to value chain workers

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ESRS Codification / Sustainability

Matter

Disclosure Requirements

Data Points

S2-2: Processes for engaging with value chain workers about impacts

S2-4: Taking action on material impacts on value chain workers, and

approaches to managing material risks and pursuing material

opportunities

S2-5: Targets related to managing material negative impacts,

advancing positive impacts, and managing material risks and

opportunities

ESRS S3 – Affected Communities

S3_SM_28 – Indigenous Peoples and

Human Rights

S3.SBM-3: Material impacts, risks, and opportunities and their

interaction with affected communities strategy and business model

S3.SBM-3_07

S3.SBM-3_08

S3-1: Policies related to affected communities

S3-1_01

S3-1_02

S3-1_03

S3-2: Processes for engaging with affected communities about

impacts

S3-2_07

S3-4: Taking action on material impacts on affected communities and

approaches to managing material risks and opportunities

S3-4_11

Governance

ESRS G1 – Business Conduct

G1_SM_41 – Animal Welfare

G1-1: Business conduct policies and corporate culture

G1-1_09

G1_SM_43 – Payment practices

G1-6: Payment practices

G1-6_01

G1-6_02

2. Environmental Information

2.1. EU Taxonomy Disclosures

EU Taxonomy Framework

The EU taxonomy serves as a standardized classification system, defining economic activities considered

environmentally sustainable. It plays a central role in enabling businesses, investors, and policymakers to

make informed decisions, thereby supporting the EU’s transition to a more sustainable economy. This section

outlines its relevance to CSG’s operations and reporting approach.

Relevance to CSG:

• Reflects the CSG’s ongoing commitment to responsible and sustainable business practices.

• Demonstrates how core business activities contribute to and align with the EU’s environmental

objectives.

• Provides stakeholders with reliable, comparable, and consistent sustainability disclosures.

• Reinforces investor confidence by showcasing adherence to EU-wide sustainability standards, which

are becoming increasingly central to regulatory and market expectations.

Key Conditions for qualification:

To qualify as aligned under the EU taxonomy, an economic activity must meet four key conditions:

• Substantial Contribution: The activity must contribute substantially to at least one of the following six

environmental objectives:

o Climate change mitigation

o Climate change adaptation

o Sustainable use and protection of water and marine resources

o Transition to a circular economy

o Pollution prevention and control

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o Protection and restoration of biodiversity and ecosystems

• Do No Significant Harm (DNSH): The activity must not cause significant harm to any of the other

environmental objectives.

• Compliance with Minimum Safeguards: Activities must comply with defined social standards,

including respect for human rights, fair labor practices, and sound governance.

• Technical Screening Criteria: Activities must meet detailed technical screening criteria, which define

the performance thresholds required to ensure that contributions to environmental objectives are

measurable and verifiable.

The following sections will detail how the group’s operations are assessed against these conditions and

outline the reporting methodologies used to ensure compliance with EU taxonomy requirements.

Eligibility Assessment

The eligibility assessment process involved a structured approach to determine which economic activities

within the group align with the EU taxonomy framework. This process ensured that all potential sustainable

activities were evaluated systematically and consistently across the group. The following steps outline the

approach:

• Review of the EU Taxonomy Framework: All activities listed in the EU taxonomy framework were

reviewed. As new activities are regularly added, a comprehensive assessment was necessary to

capture the most up-to-date scope of eligible activities.

• Analysis of Activity Descriptions: Descriptions of each activity within the EU taxonomy were carefully

analyzed to understand the objectives and scope. This step focused on determining which

descriptions could be applicable to companies within the group based on their operational profiles.

• Selection of Potentially Relevant Activities: Based on the analysis, potentially relevant activities were

shortlisted. This initial selection focused on activities most likely to align with the operational realities

and sustainability goals of the group.

• Comparison with NACE Codes: The shortlisted activities were compared with existing NACE codes

associated with each company within the group. This step served as a reference point to validate the

relevance of each activity and to streamline the eligibility assessment process.

• Company Confirmation and Data Collection: Identified potentially eligible activities were confirmed

with the respective companies. A self-assessment online tool was deployed to standardize data

collection and streamline subsequent validation steps. The tool provided a consistent platform for

companies to assess their activities, ensuring that the data gathered was accurate, complete, and

aligned with the EU taxonomy criteria.

Alignment Assessment

The alignment assessment process evaluated whether the identified eligible activities met the additional

conditions required under the EU taxonomy framework. The assessment focused on three critical criteria:

Substantial Contribution, Do No Significant Harm, and Minimum Social Safeguards.

Substantial Contribution Criteria

• The first step involved extracting and understanding the respective criteria for all identified eligible

activities. This ensured that all applicable technical requirements were thoroughly reviewed.

• Data was collected from the companies to assess whether they complied with these criteria. The data

gathering process involved direct engagement with companies to confirm compliance levels.

• The online self-assessment tool was used to streamline the data collection process, ensuring data

consistency across all participating companies.

Do No Significant Harm Criteria

• For each identified eligible activity, all Do No Significant Harm (DNSH) criteria related to the specific

activity and associated environmental objectives were extracted and reviewed. Detailed reasoning

for compliance or non-compliance was provided based on the collected data.

• Data was collected from the companies to determine their compliance with the DNSH criteria,

ensuring that no activity undermined other environmental objectives.

• The online self-assessment tool ensured data consistency and streamlined the reporting process.

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Minimum Social Safeguards

• For the Minimum Social Safeguards (MSS) criteria, the group assessed compliance with OECD-

defined objectives. The assessment focused specifically on areas such as human rights, fair labor

practices, taxation compliance, anti-corruption measures, and fair competition.

• Data was collected from the companies to determine compliance with these social safeguards,

ensuring that the group maintained responsible business practices across all operations.

• The online self-assessment tool facilitated consistent data collection and ensured that responses

were aligned with the MSS criteria.

Results of Eligibility and Alignment Assessment

The results of the eligibility and alignment assessment revealed that, out of all the activities reviewed, only

five were assessed as eligible under the EU taxonomy framework.

The five eligible activities are as follows:

• CCA 8.2 Computer programming, consultancy, and related activities

• CCM 8.1 Data processing, hosting, and related activities

• CCM 6.18 Leasing of aircraft

• CCM 3.19 Manufacture of rail rolling stock constituents

• CCM 3.21 Manufacturing of aircraft

Despite these activities being assessed as eligible, none were classified as aligned. The lack of alignment is

attributed to the fact that the identified activities did not fully meet the additional alignment conditions required

under the EU taxonomy framework as described above.

The analysis showed that although eligibility was established, gaps remained in meeting the technical

screening requirements and DNSH principles necessary for alignment.

Revisions to Previously Reported Information

Following a review and update of the assessment methodology, CSG identified inconsistencies in the

approach applied in 2023. As a result, the group decided to revise the previously reported taxonomy data for

2023. The reassessment determined that none of the activities initially reported as aligned met the full

alignment criteria. Consequently, all previously reported aligned activities have been reclassified. Certain

activities were incorrectly classified as eligible in the 2023 Taxonomy due to a misinterpretation of their scope.

A review confirmed that no group companies are directly engaged in Renovation of Existing Buildings,

Construction of New Buildings, or Collection and Transport of Non-Hazardous and Hazardous Waste. To align

with the 2024 classification and accurately reflect the group's activities, these have been removed from the

2023 Taxonomy.

Introduction to KPI Reporting for 2024

The purpose of this KPI section is to present key performance indicators aligned with the EU Taxonomy

framework, focusing on turnover, capital expenditure (CapEx), and operating expenditure (OpEx) as critical

measures of sustainable economic activities. These KPIs are structured to ensure transparency,

standardization, and compliance with EU Taxonomy reporting requirements.

For the 2024 reporting period, the methodology has been refined based on inconsistencies in the 2023

Sustainability Report. For details regarding the revisions made to the 2023 taxonomy disclosures, refer to

Revisions to Previously Reported Information above, which outlines the adjustments and methodological

refinements applied in this reporting year.

The updates include enhanced data consistency and the implementation of more robust measures to prevent

double counting. Additionally, KPIs have been defined at the level of each economic activity, ensuring a

transparent and structured reporting approach.

Further information on the revenue, CapEx, and OpEx KPIs has been collected and consolidated at the level

of individual companies before aggregation at the group level. All data presented in this Consolidated

Sustainability Statement is sourced from controlling and accounting systems across subsidiaries. EU

Taxonomy KPIs were determined based on financial reporting systems to provide a complete and

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106

unambiguous reconciliation to corresponding items in the annual financial statements while preventing

duplication.

Entities that are not fully consolidated are excluded from the analysis. This approach ensures the transparency

and reliability of EU Taxonomy reporting and aligns with financial and sustainability disclosure best practices.

Year-on-Year Comparisons and Strategic Adjustments

In the 2024 reporting year, CSG has continued to experience strong overall growth, particularly in non-eligible

activities. This growth reflects strategic focus on diversifying business portfolio and expanding into new

markets that do not yet meet the criteria for EU Taxonomy eligibility. As a result, while total revenues and

activities have increased, the proportion of CSG’s business that comply with the EU Taxonomy is relatively

lower compared to the previous year.

This shift is largely due to strategic investments in non-eligible sectors, which have contributed significantly

to overall growth. These activities, while not currently aligned with the Taxonomy, are critical to maintaining

competitiveness and market presence. Similarly, while CapEx in eligible activities remains robust, the

increased growth in non-eligible sectors has meant that the share of taxonomy-eligible CapEx is lower than

in 2023. The same trend is evident in operating expenses (OpEx), where a larger portion is now directed

toward non-eligible activities, further affecting the proportion of OpEx related to taxonomy-eligible projects.

To better reflect this evolving landscape, CSG has also adjusted our approach to measuring and reporting

KPIs. This year, CSG has taken a more detailed and transparent approach, disaggregating the data at a deeper

level, and to classify more relevant activities to provide greater visibility into the specific drivers of its results.

While this granular approach ensures a more accurate representation of CSG’s performance, it also makes

year-on-year comparisons more complex.

Nevertheless, CSG remains committed to transparency and aligning the growth strategy with sustainability

goals. While the proportion of eligible activities has decreased due to the growth in non-eligible areas, CSG is

confident that this strategic shift supports its long-term objectives and will position CSG well for future

progress in both financial and sustainability performance.

Taxonomy-Eligible Net Revenues

The denominator for the purposes of the EU Taxonomy is determined in line with the definition of net revenues

in the consolidated financial statements. Net revenues represent the revenue generated from the sale of

goods, products, and services, net of sales discounts, value-added tax, and other taxes directly related to

revenues. It includes revenues reported under IAS 1.82 (such as IFRS 15, and other revenue).

For the 2024 reporting year, sales relating to eligible activities identified under the EU Taxonomy are reported

in accordance with their specific classifications, ensuring traceability and alignment with financial statements.

This definition of net revenues directly connects to our total consolidated figures. In line with the taxonomy

reporting requirements, we provide a detailed breakdown of our turnover. For a comprehensive analysis of

these elements, including the quantitative breakdown and the specific factors influencing turnover, please

refer to Consolidated Financial Statements, Note 8. Revenues as section of this Consolidated Sustainability

Statement.

Taxonomy-Eligible Capital Expenditure (CapEx)

The reference figure (denominator) for taxonomy-eligible activities is determined in accordance with the EU

Taxonomy Regulation. CapEx covers:

• Additions to tangible and intangible assets before depreciation, amortization, revaluation, or

impairment—excluding changes in fair value.

• Assets acquired through business combinations.

• Goodwill is excluded from the total CapEx figure, in line with EU Taxonomy requirements.

The relevant IFRS standards include:

• IAS 16: Property, Plant, and Equipment

• IAS 38: Intangible Assets

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• IAS 41: Agriculture

• IFRS 16: Leases

Capital expenditure for eligible projects is allocated through financial controlling systems and validated

through consultations with relevant specialist units. CSG has not initiated the implementation of the CapEx

plan at this time. This definition of CapEx is aligned with our total consolidated figures, ensuring consistency

and traceability. Detailed disclosures regarding capital expenditure can be found in section Consolidated

Financial Statements, Notes 16. Intangible Assets and Goodwill and 17. Property, Plant and Equipment of this

Consolidated Sustainability Statement.

Taxonomy-Eligible Operating Expenditure (OpEx)

The reference figure (denominator) for taxonomy-eligible operating expenses is based on financial controlling

systems and further refined through interviews and analyses conducted with relevant controlling functions.

OpEx represents direct non-capitalized costs related to:

 Direct non-capitalised costs that relate to research and development

 Building renovation measures

 Short-term lease

 Maintenance and repair

 Other direct expenditures relating to the day-to-day servicing of assets of property,

plant and equipment by the undertaking or third party to whom activities are

outsourced that are necessary to ensure the continued and effective functioning

of such assets.

Where possible, operating expenses have been allocated directly to identified taxonomy-eligible activities

using data from financial systems.

Methodology for Eligible Activities and KPI Inclusion

Third-party verification has not been conducted for this reporting year. Establishing a strong internal

methodology is the priority before engaging external validation in future reporting cycles.

Each taxonomy-eligible activity is assessed in accordance with the applicable Delegated Act articles of

Regulation (EU) 2020/852. The classification of activities follows the technical screening criteria outlined in

the Delegated Acts, including but not limited to:

• Article 10 for Climate Change Mitigation

• Article 11 for Climate Change Adaptation

• Article 12 for Sustainable Use and Protection of Water and Marine Resources

• Article 13 for Transition to a Circular Economy

• Article 14 for Pollution Prevention and Control

• Article 15 for Protection and Restoration of Biodiversity and Ecosystems

For each identified taxonomy-eligible activity, a structured methodology has been defined to ensure accurate

and consistent KPI reporting. This includes:

• Establishing the scope of each activity in line with EU Taxonomy classifications

• Validating the allocation of CapEx, OpEx, and net revenues through cross-functional collaboration

and financial controls

• Ensuring the figures reflect only those activities meeting eligibility criteria, with appropriate exclusions

and adjustments

The disaggregation of Key Performance Indicators (KPIs) as outlined in Chapter 1.2.2.3 of the DDA is not

relevant to the operations of CSG.

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Czechoslovak Group

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109

KPI to turnover (Table ID 6)

Substantial contribution criteria

DNSH criteria

(‘Does Not Significantly Harm’)

Economic activities (1)

Code(s)

(2)

Absolute

turnover (3)

Proportion

turnover

(4)

Climate

Mitigation

(5)

Climate

Adaptation

(6)

Water

(7)

Circular

economy

(8)

Pollution

prevention

(9)

Biodiversity

(10)

Climate

change

mitigation

(11)

Climate

change

adaptation

(12)

Water

and

marine

resources

(13)

Circular

economy

(14)

Pollution

(15)

Biodiversity

and

ecosystems

(16)

Minimum

safeguards

(17)

Portion of

Taxonomy-

aligned

(A.1.)

or eligible

(A.2.)

turnover,

year N-1

(18)

TEUR

Y / N

A. Taxonomy-eligible activities

A.1. Environmentally sustainable activities (Taxonomy-aligned)

Turnover of environmentally sustainable activities (Taxonomy-

aligned) (A.1)

A.2 Taxonomy-Eligible but not environmentally sustainable

activities

(not Taxonomy-aligned activities)

Activity 1

[ ]

Computer programming, consultancy, and related activities

CCA 8.2

[16,423.4]

[ 0.4%]

[ ]

0.7%

Data processing, hosting, and related activities

CCM 8.1

[4,365.9]

[ 0.1%]

0.0%

Leasing of aircraft

CCM 6.18

[ 3,571.0]

[ 0.1%]

0.0%

Manufacture of rail rolling stock constituents

CCM 3.19

[ 56,723.7]

[ 1.4%]

2.5%

Manufacturing of aircraft (focused on MRO)

CCM 3.21

[38,700.0]

[ 1.0%]

2.7%

Turnover of Taxonomy-eligible but not environmentally

sustainable activities

(not Taxonomy-aligned activities) (A.2)

[119,784.1]

[ 3.0%]

6.0%

A. Turnover of Taxonomy-eligible activities (A.1 + A.2)

[119,784.1]

[ 3.0%]

6.0%

B. Taxonomy-non-eligible activities

Turnover of Taxonomy-non-eligible activities (B)

[3,888,830.1]

[97.0%]

Total (A + B)

[4,008,614.2]

[100,0 %]

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KPI to capital Expenditure (CapEx KPI) (Table ID 7)

Substantial contribution criteria

DNSH criteria

(‘Does Not Significantly Harm’)

Economic activities (1)

Code(s)

(2)

Absolute

turnover

(3)

Proportion

turnover

(4)

Climate

Mitigation

(5)

Climate

Adaptation

(6)

Water

(7)

Circular

economy

(8)

Pollution

prevention

(9)

Biodiversity

(10)

Climate

change

mitigation

(11)

Climate

change

adaptation

(12)

Water

and

marine

resources

(13)

Circular

economy

(14)

Pollution

(15)

Biodiversity

and

ecosystems

(16)

Minimum

safeguards

(17)

Portion of

Taxonomy-

aligned

(A.1.)

or eligible

(A.2.)

turnover,

year N-1

(18)

TEUR

Y / N

A. Taxonomy-eligible activities

A.1. Environmentally sustainable activities (Taxonomy-aligned)

CapEx of environmentally sustainable activities (Taxonomy-

aligned) (A.1)

A.2 Taxonomy-Eligible but not environmentally sustainable

activities

(not Taxonomy-aligned activities)

Activity 1

Computer programming, consultancy, and related activities

CCA 8.2

[ 5,925.3]

[1.3%]

1.8%

Data processing, hosting, and related activities

CCM 8.1

[ 52.1]

[0.0%]

0.0%

Leasing of aircraft

CCM

6.18

[36,309.0]

[8.2%]

0.0%

Manufacture of rail rolling stock constituents

CCM

3.19

[ 3,112.5]

[0.7%]

6.1%

Manufacturing of aircraft (focused on MRO)

CCM

3.21

[ 395.9]

[0.1%]

0.6%

CapEx of Taxonomy-eligible but not environmentally sustainable

activities

(not Taxonomy-aligned activities) (A.2)

[45,794.8]

[10.3%]

8.5%

A. CapEx of Taxonomy-eligible activities (A.1 + A.2)

[45,794.8]

[10.3%]

8.5%

B. Taxonomy-non-eligible activities

CapEx of Taxonomy-non-eligible activities (B)

[399,420.2]

[89.7%]

Total (A + B)

[445,215.0]

[100.0%]

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111

KPI to operating expenditure (OpEx KPI) (Table ID 8)

Substantial contribution criteria

DNSH criteria

(‘Does Not Significantly Harm’)

Economic activities (1)

Code(s)

(2)

Absolute

turnover

(3)

Proportion

turnover

(4)

Climate

Mitigation

(5)

Climate

Adaptation

(6)

Water

(7)

Circular

economy

(8)

Pollution

prevention

(9)

Biodiversity

(10)

Climate

change

mitigation

(11)

Climate

change

adaptation

(12)

Water

and

marine

resources

(13)

Circular

economy

(14)

Pollution

(15)

Biodiversity

and

ecosystems

(16)

Minimum

safeguards

(17)

Portion of

Taxonomy-

aligned

(A.1.)

or eligible

(A.2.)

turnover,

year N-1

(18)

TEUR

Y / N

A. Taxonomy-eligible activities

A.1. Environmentally sustainable activities

(Taxonomy-aligned)

OpEx of environmentally sustainable

activities (Taxonomy-aligned) (A.1)

A.2 Taxonomy-Eligible but not

environmentally sustainable activities

(not Taxonomy-aligned activities)

Activity 1

Computer programming, consultancy,

and related activities

CCA 8.2

[3,714.6]

[2.3%]

0.1%

Data processing, hosting, and related

activities

CCM 8.1

[659.4]

[0.4%]

0.0%

Leasing of aircraft

CCM

6.18

[654.9]

[0.4%]

0.0%

Manufacture of rail rolling stock

constituents

CCM

3.19

[18,053.7]

[11.0%]

10.9%

Manufacturing of aircraft (focused on

MRO)

CCM

3.21

[2,700.6]

[1.6%]

2.3%

OpEx of Taxonomy-eligible but not

environmentally sustainable activities

(not Taxonomy-aligned activities) (A.2)

[25,783.3]

[15.7%]

13.3%

A. OpEx of Taxonomy-eligible activities (A.1

+ A.2)

[25,783.3]

[15.7%]

13.3%

B. Taxonomy-non-eligible activities

OpEx of Taxonomy-non-eligible activities

(B)

[138,170.3]

[84.3%]

Total (A + B)

[163,953.6]

[100.0%]

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112

2.2. Climate Change

Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 2.2. Climate Change (Table ID 9)

Sustainability Matter

Main Areas of Concern (IROs)

E1_SM_01: Climate Change

Management

Climate change management raises concerns over the alignment of corporate

strategies with evolving climate regulations. Ensuring resilience of business

models and operations is key, especially as markets increasingly favor

companies demonstrating robust climate practices and resource efficiency.

E1_SM_02: Climate

Change Mitigation Plans

Climate mitigation requires addressing the risk of asset obsolescence due to

regulatory shifts. At the same time, transitioning towards renewable energy

sources enhances long-term cost efficiency and strengthens sustainability

positioning.

E1_SM_03: GHG Emissions

and Targets

Managing GHG emissions presents challenges around cost pressures, data

accuracy, and operational stability. In long term perspective setting clear,

achievable emission reduction targets and embedding strong emissions

management systems contributes to regulatory compliance and reinforces

environmental responsibility.

Climate Change Data Methodology and Considerations

The metrics disclosed in this chapter concerning energy consumption and energy mix, and greenhouse gas

(GHG) emissions have been estimated due to the early timing of this Consolidated Sustainability Statement,

which preceded the availability of complete and validated data from energy providers and internal systems.

Estimates were derived from internal energy usage records from the previous reporting period, preliminary

energy bills, and facility-level operational indicators. Where current-year breakdowns were incomplete,

historical energy source proportions were applied to estimate the overall energy mix.

For GHG emissions (Scope 1, 2, and 3), the input data used in the calculations were also based on estimates,

including energy consumption volumes, fuel types, and activity-based data across upstream and downstream

operations. These estimates rest on the assumption that emissions are proportionally linked to operational

scale and value chain activity, consistent with previous reporting years.

While this approach provides a consistent and transparent estimation framework, it is subject to limitations,

including uncertainties in the underlying assumptions and variation in energy sourcing. At the time of

reporting, these metrics have not been externally validated beyond the assurance provider.

ESRS E1

2.2.1. General Disclosures Related to

Climate Change

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Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E1_SM_01: Climate Change Management

 E1_SM_02: Climate Change Mitigation Plans

 E1_SM_03: GHG Emissions and Targets

Governance – Disclosure of Integration of Sustainability-Related Performance

in Incentive Schemes

As described in general terms in chapter 1.2.3. (Integration of Sustainability-Related Performance in Incentive

Schemes), there were no climate-related considerations factored into the remuneration of members of CSG’s

administrative, management, and supervisory bodies during the 2024 reporting period. Their performance

has not been assessed against GHG emission reduction targets, nor has any portion of their remuneration

been linked to climate-related considerations.

Strategy – Disclosure of Material Impacts, Risks and Opportunities and How

They Interact with Strategy and Business Model

The following table provides a consolidated overview of the climate-related risks identified within CSG,

categorized into physical and transition risks. These risks reflect potential disruptions to operations, supply

chains, and compliance requirements, highlighting areas where climate change may impact business

resilience and strategic planning.

Climate-Related Risks (Table ID 10)

Physical/Transition Risk

Simplified Risk Description

Physical Risk

Extreme Weather Events – Heatwaves and floods disrupt operations, supply chains, and

infrastructure (e.g., water treatment plants, waste facilities, and manufacturing sites).

Physical Risk

Water Scarcity & Resource Constraints – Droughts and changing precipitation patterns impact

water availability for industrial processes and lead to habitat degradation.

Physical Risk

Supply Chain Disruptions – Climate variability affects resource availability.

Transition Risk

Regulatory & Compliance Risks – Stricter carbon reduction laws, water management and

waste regulations create legal and financial risks.

Transition Risk

Market & Technology Shifts – In long term perspective high investment costs for new

technologies (e.g., waste management, renewable energy adoption, and water recycling) and

potential asset stranding for high-emission operations.

Transition Risk

Reputation & Consumer Expectations – Failure to meet sustainability standards may impact

contracts, government procurement eligibility, and consumer trust in defence-related

products.

Strategy – Disclosure of Information Related to Resilience Analysis

CSG recognizes climate change as a critical factor influencing its long-term business strategy and operational

resilience. CSG’s resilience analysis assesses both physical and transition risks across its operations, supply

chain, and market positioning. The analysis covers short-, mid-, and long-term horizons, evaluating exposure

to extreme weather events, resource availability, regulatory changes, carbon pricing, and evolving market

expectations. It takes into consideration CSG’s own operations, upstream suppliers, and downstream market

dynamics, with a focus on the regions most vulnerable to climate-induced disruptions or stringent

environmental regulations.

CSG’s resilience analysis was conducted as part of its sustainability assessment, aligning with the first year

of double materiality reporting, in mid-2024. The analysis incorporated internal risk evaluations, industry

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benchmarks, and regulatory trends to assess exposure to both physical and transition climate risks. While

climate scenario analysis and stress testing have not yet been implemented, the focus has been on data

collection, strengthening internal processes, and improving risk identification methodologies. The analysis is

reviewed bi-annually to reflect evolving climate risks, regulatory developments, and market shifts, ensuring

continuous adaptation of CSG’s business model and strategic planning.

The results of the resilience analysis indicate that CSG’s business is exposed to both physical and transition

climate risks, with varying impacts across its operational areas. Physical risks such as extreme weather

events, resource scarcity, and supply chain disruptions pose long-term challenges, particularly for

manufacturing and logistics operations. Transition risks, including regulatory changes, market shifts, and

compliance costs, are expected to influence investment decisions and operational adjustments in the mid-to-

long term. CSG is continuously enhancing its internal processes and data collection efforts so that it can better

understand material climate risks and opportunities and thus be able to adjust and adapt its strategy and

business model to climate change.

Impact, Risk and Opportunity Management – Disclosure of the Processes to

Identify and Assess Material Climate-related Impacts, Risks and Opportunities

CSG identifies and assesses its climate-related impacts, risks, and opportunities through a structured process

that integrates GHG emissions monitoring and stakeholder engagement. The company evaluates its direct

(Scope 1), indirect (Scope 2), and, where applicable, value-chain emissions (Scope 3) in order to understand

its overall carbon footprint. To ensure accuracy and comprehensiveness, CSG follows international standards

and industry best practices, including GHG Protocol guidelines and those from the Task Force on Climate-

related Financial Disclosures (TCFD). Additionally, emerging regulations and carbon pricing mechanisms are

tracked to anticipate transition risks and align with future sustainability goals.

Climate-Related Physical Risks

CSG assessed physical climate risks across its own operations and value chain to evaluate potential

disruptions and long-term resilience. This process includes geographically specific risk evaluations and high-

level assessments of suppliers and partners so as to identify vulnerabilities. Key physical risks identified

include chronic climate risks, such as heatwaves, droughts, and flooding, which could disrupt manufacturing

operations, supply chains, and critical infrastructure. Additionally, acute risks from extreme weather events

may impact energy supply, logistics, and compliance with operational safety regulations.

Climate-related risks were identified based on publicly available climate risk datasets, observed trends, and

industry risk assessments, rather than formal scenario analysis. To assess potential physical risks from climate

change, CSG conducted a Physical Climate Risk Assessment across its operating sites. This evaluation

focused on key climate-related hazards, including floods, wildfires, droughts, and temperature shifts, that

could impact business operations. The assessment covered the locations of CSG Group companies, with the

exception of 14. OKTOBAR d.o.o. Kruševac, as no reputable climate data was available for Serbia. The analysis

relied on publicly available climate risk datasets, tailored to regional contexts. For European locations, CSG

referred to the European Climate Risk Typology (CRT), which applies the IPCC 5th Assessment Report

framework. In the United States, the Resilience Mapping Tool from The Atlantic Council’s Adrienne Arsht

Rockefeller Foundation Resilience Center provided us with risk classifications for wildfire, drought, riverine

floods, and temperature changes. For Indian locations, the Hazard Atlas from the Indian Meteorological

Department was used, categorizing risks such as droughts, floods, and heat/cold waves.

The sensitivity of CSG’s assets was analyzed based on their location-specific risk profiles, using climate risk

data from regional sources. For example:

• Manufacturing facilities were assessed for vulnerability to flooding and heat stress, which could lead to

production downtime and increased cooling costs.

 Operational sites were reviewed for resilience to wildfires and rising temperatures, which may impact

workforce safety and energy consumption.

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Climate-related Transition Risks

Climate-related transition risks and opportunities are assessed through research into the regulatory, market,

technological, and reputational factors affecting operations and the broader value chain over the short-,

medium-, and long-term time horizons. Compliance with evolving climate policies, such as carbon pricing

and supply chain regulations, is closely monitored to anticipate any financial and operational impacts,

including the risk of stranded assets. Market shifts toward low-carbon products and green financing present

both risks and opportunities, while technological advancements require investments in energy-efficient

solutions. Reputational considerations are also key, as stakeholder expectations regarding sustainability

continue to grow.

The screening of assets and business activities for exposure to transition events was conducted at a high

level, focusing on key regulatory developments, market trends, and stakeholder expectations, rather than

formal scenario analysis. While a detailed asset-level analysis was not performed, the assessment

considered potential risks such as evolving climate policies, carbon pricing mechanisms, and supply chain

regulations that could impact operations. Key areas of exposure include regulatory compliance, potential cost

increases due to carbon pricing, and evolving market demands for lower-carbon products.

The assessment of transition risks has identified certain assets and business activities that may require

significant efforts to align with a climate-neutral economy. While no assets have been deemed entirely

incompatible, areas such as energy-intensive manufacturing processes and supply chain dependencies

upon carbon-intensive materials present challenges. Compliance with evolving regulatory requirements and

shifting market expectations may necessitate operational adjustments, investment in technologies, and

enhanced sustainability practices.

E1-1

2.2.2. Transition Plan for Climate

Change Mitigation

Transition Plan for Climate Change Mitigation

While no formal transition plan for climate change mitigation is in place for the moment, CSG recognizes the

importance of such a plan and intends to develop one within the next three years at the latest. Establishing

such a plan requires a strong foundation of reliable data, clear internal processes, and structured monitoring

mechanisms. As 2024 marks CSG’s first year of CSRD-compliant sustainability reporting, CSG is prioritizing

the development of robust data collection frameworks and internal governance structures. These preparatory

steps will help CSG to set realistic and effective transition targets aligned with regulatory developments.

E1-2

2.2.3. Policies Related to Climate

Change Mitigation and Adaptation

Including Minimal Disclosures

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

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 E1_SM_01: Climate Change Management

 E1_SM_02: Climate Change Mitigation Plans

 E1_SM_03: GHG Emissions and Targets

Disclosure of Policies Adopted to Manage Material Impacts, Risks and

Opportunities Related to Climate Change Mitigation and Adaptation (Including

Minimal Disclosure requirements)

Material impacts, risks, and opportunities related to climate change mitigation and adaptation are managed

through a structured environmental management approach. One key element of this approach is the standard

aligned with ISO 14001 certification. All CSG companies are required to implement and maintain documentation

and processes outlining their operational management practices within the framework of an Environmental

Management System (EMS). Alignment with ISO 14001 considers key stakeholder interests such as regulatory

compliance, investor expectations, and customer demands for sustainable practices. The Board of Directors

or an equivalent governing body holds ultimate responsibility for implementing such an Environmental

Management System.

ISO 14001 provides a flexible framework that supports the integration of climate change mitigation, climate

change adaptation, energy efficiency, and renewable energy deployment into CSG’s policy strategy. While

this framework ensures that environmental considerations are embedded into operational management,

further development of dedicated policies is necessary.

E1-3

2.2.4. Actions and Resources in Relation

to Climate Change Policies

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E1_SM_01: Climate Change Management

 E1_SM_02: Climate Change Mitigation Plans

 E1_SM_03: GHG Emissions and Targets

Minimum Disclosure Requirement – Actions and Resources in Relation to

Climate Change Policies

ISO 14001 Certification

In 2024, CSG successfully completed the recertification process for ISO 14001: Environmental Management

Systems, demonstrating its commitment to structured environmental management and compliance with

internationally recognized best practices. This certification remains valid for three years, with annual

surveillance audits conducted to ensure continued adherence to the standard.

Group Policy Framework

As part of the planned Group Policy Framework, CSG intends to introduce an Environmental Policy that will

specifically address the topics of climate change mitigation and climate change adaptation in a structured

manner. Additionally, a Renewable Energy Policy is planned to be implemented to approach energy efficiency

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and use of renewable energy sources. The timeline for adopting the Environmental Policy and Renewable

Energy Policy is set for 2025.

The implementation of these policies and ISO recertifications does not require significant operational (OpEx)

or capital (CapEx) expenditures.

During the reporting period, CSG did not identify any actual adverse climate change related impacts that

resulted in specific or direct harm requiring remedial action. No cases of environmental degradation or

regulatory breaches were recorded that necessitated the provision of or cooperation in a remedy.

No actions or action plans relating to material climate change-related impacts were disclosed in prior reporting

periods, as this is CSG’s first reporting period under the ESRS framework. As a result, no quantitative or

qualitative progress updates are available at this time. Future reporting periods will include such disclosures

as actions are implemented and progress is monitored in line with ESRS requirements.

Further Information on Actions and Resources in Relation to Climate Change

Policies

ISO Certification 14001

ISO 14001 recertification in 2024 does not directly include decarbonization levers or result in measurable GHG

emission reductions. While the certification provides a framework for monitoring and mitigating environmental

impacts, it does not prescribe specific climate mitigation measures. At this stage, no GHG reductions have

been achieved or are expected solely due to ISO 14001 certification.

As ISO 14001 certification is already implemented, its continuation does not depend on significant new

allocation of resources (financial, technical, or human).

Group Policy Framework

The Environmental and Renewable Energy policy will set the foundation for structured climate change

mitigation efforts, including decarbonization levers such as energy efficiency.

GHG emissions in the reporting period were not compared to the previous reporting period, as the scope of

companies as well as the scope of measured GHG emissions differ between the periods. With the above-

mentioned policies, CSG aims to establish structured decarbonization efforts. Potential future GHG emission

reductions will be targeted through improvements in energy efficiency and increased use of renewable

energy sources.

The ability to implement further climate change mitigation actions at CSG depends on the availability and

allocation of financial, technical, and human resources. The transition towards energy efficiency will require

investments in renewable energy infrastructure and energy-efficient technologies. Such investments have

not been defined, as a comprehensive strategy needs to be developed first, and at present, processes for

reliable sustainability data collection remain key challenges.

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E1-4

2.2.5. Targets Related to Climate

Change Mitigation and Adaptation

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E1_SM_01: Climate Change Management

 E1_SM_02: Climate Change Mitigation Plans

 E1_SM_03: GHG Emissions and Targets

Minimum Disclosure Requirement – Targets Related to Climate Change

Mitigation and Adaptation

CSG has not yet set measurable outcome-oriented targets related to climate change mitigation and adaptation.

At this stage, the focus remains on establishing a robust data foundation and enhancing internal processes

for sustainability reporting, which are essential prerequisites for defining meaningful and achievable targets.

While a specific timeline for setting such targets has not yet been determined, CSG anticipates that target-

setting efforts will be developed in alignment with the Group Policy Framework within the next three years.

Despite the absence of formalized targets, CSG monitors the effectiveness of its policies and actions as

described in chapter 2.2.4. (Actions and Resources in Relation to Climate Change Policies) of this

Consolidated Sustainability Statement. As part of the ongoing development of its sustainability strategy, CSG

aims to refine quantitative and qualitative indicators in the future to measure its environmental impact more

effectively.

Further Information on Targets in Relation to Climate Change Mitigation and

Adaptation

Since CSG has not yet established measurable outcome-oriented targets related to climate change mitigation

and adaptation, there are currently no specific targets addressing the reduction of greenhouse gas emissions,

enhancement of climate resilience, or implementation of adaptation strategies across CSG’s operations.

E1-5

2.2.6. Energy Consumption and Mix

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter E1_SM_01: Climate Change Management.

Disclosure of Energy Consumption and Mix

No comparative energy mix analysis is available for the reporting period, as the scope of companies included

in 2024 sustainability reporting is significantly broader than in previous reporting. The majority of CSG’s

operations fall within high climate impact sectors

. Specifically Manufacturing, Wholesale & Retail trade,

High climate impact sectors are those listed in NACE Sections A to H and Section L (as defined in Commission

Delegated Regulation (EU) 2022/1288)

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Transportation, and Real Estate, which covers the following sectors as defined in chapter 1.2.1. (Role of

Administrative, Management and Supervisory Bodies) of this Consolidated Sustainability Statement:

High Climate Impact Sectors

Corresponding Sectors of CSG Companies

Manufacturing

Aerospace (3)

Automotive (3)

Defence (19)

Metal Processing (1)

Rolling Stock (5)

Textiles, Apparel, Footwear & Accessories (1)

Wholesale & Retail

Wholesale & Retail trade (8)

Transportation

Transportation (3)

Real Estate

Real Estate & Services (1)

Numbers in brackets indicate number of CSG companies in the respective sector

Companies (15) operating outside of high climate impact sectors are included in the overall energy mix, as

their energy consumption is insignificant in relation to the Group’s total energy usage, as most of them (7) are

in the sector of “Professional & Commercial Services.” Therefore, any mention of “high climate impact sectors”

in this chapter, i.e., 2.2.6. (Energy Consumption and Mix), means all companies in the reporting scope of this

Consolidated Sustainability Statement.

Disclosure of Energy Consumption and Mix (Table ID 11)

Energy Consumption and Mix

2024

1. Fuel consumption from coal and coal products (MWh)

2. Fuel consumption from crude oil and petroleum products (MWh)

3. Fuel consumption from natural gas (MWh)

92,300

4. Fuel consumption from other fossil sources (MWh)

5. Consumption of purchased or acquired electricity, heat, steam, and cooling from

fossil sources (MWh)

50,344

6. Total fossil energy consumption (MWh) (calculated as the sum of lines 1 to 5)

142,644

Share of fossil sources in total energy consumption (%)

67%

7. Consumption from nuclear sources (MWh)

34,893

Share of consumption from nuclear sources in total energy consumption (%)

16%

8. Fuel consumption for renewable sources, including biomass (also comprising

industrial and municipal waste of biologic origin, biogas, renewable hydrogen,

etc.) (MWh)

9. Consumption of purchased or acquired electricity, heat, steam, and cooling from

renewable sources (MWh)

32,298

10. The consumption of self-generated non-fuel renewable energy (MWh)

1,889

11. Total renewable energy consumption (MWh) (calculated as the sum of lines 8 to

10)

34,188

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Share of renewable sources in total energy consumption (%)

16%

Total energy consumption (MWh) (calculated as the sum of lines 6, 7 and 11)

211,724

In the reporting year, renewable energy production totaled 1,889 MWh and non-renewable energy was not

produced.

Energy Intensity Based on Net Revenue

The energy intensity of CSG in the reporting period is 53 MWh per 1 million EUR associated with activities in

high climate impact sectors.

As previously disclosed, CSG does not separate companies in high climate impact sectors from the rest of

the companies in the reporting scope. Therefore, the total energy consumption corresponds to 211,724 MWh.

The net revenue amount used for calculating energy intensity was 4,008 million EUR and can be found in

Revenues part of Management Discussion & Analysis section of the Financial Review. Please note that this

figure does not include the financial results of the following companies, as they are not consolidated according

to IFRS requirements: MEDHA DAKO-CZ PRIVATE LIMITED, Milconn, a.s., TATRA EXPORT s.r.o., TATRA

METALURGIE a.s., TATRA TRUCKS a.s., and VÝVOJ Martin, a.s.

E1-6

2.2.7. Gross Scopes 1, 2, 3 and Total

GHG Emissions

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter E1_SM_03: GHG Emissions and Targets.

Disclosure of GHG Emissions

GHG Emissions by Scope (Table ID 12)

GHG Emissions

2024

Scope 1 GHG emissions

Gross Scope 1 GHG emissions (tCO2eq)

38,813

Percentage of Scope 1

GHG emissions from regulated emission trading schemes (%)

Scope 2 GHG emissions

Gross location-based Scope 2 GHG emissions (tCO2eq)

116,612

Gross market-based Scope 2 GHG emissions (tCO2eq)

116,612

Significant scope 3 GHG emissions

Total Gross indirect (Scope 3) GHG emissions (tCO2eq)

842,424

1. Purchased goods and services (tCO2eq)

583,041

Market-based Scope 2 emissions are aligned with location-based emissions as CSG does not currently procure renewable energy

through specific contracts, guarantees of origin (GOs) or renewable energy certificates (RECs) and in location-based emissions CSG relies

on the standard electricity mix available in relevant operational regions.

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2. Capital goods (tCO2eq)

32,699

3. Fuel and energy-related—Activities (not included in Scope 1 or Scope 2) (tCO2eq)

35,592

4. Upstream transportation (distribution not included) (tCO2eq)

33,369

5. Waste generated in operations (tCO2eq)

14,668

6. Business travel (tCO2eq)

5,796

7. Employee commutes (tCO2eq)

20,025

8. Upstream leased assets (tCO2eq)

Not included

9. Downstream transportation (tCO2eq)

114,322

10. Processing of sold products (tCO2eq)

Not included

11. Use of sold products (tCO2eq)

Not included

12. End-of-life treatment for sold products (tCO2eq)

Not included

13. Downstream leased assets (tCO2eq)

2,912

14. Franchises (tCO2eq)

Not included

15. Investments (tCO2eq)

Not included

Total GHG emissions

Total GHG emissions (location-based) (tCO2eq)

(Calculated as the sum of Gross Scope 1 + Gross Location-Based Scope 2 + Gross Scope 3)

997,849

Total GHG emissions (market-based) (tCO2eq)

(Calculated as the sum of Gross Scope 1 + Gross Market-Based Scope 2 + Gross Scope 3)

997,849

No comparison to the previous period is available for measured GHG Emissions, due to the significantly

broader scope of companies included in the 2024 reporting period. As a result, changes in the reporting

boundary have affected the comparability of GHG emissions data across periods.

Total GHG Emissions – Scope 1 & Scope 2

The total Scope 1 emissions for the consolidated group of companies within the scope of this Consolidated

Sustainability Statement (parent and subsidiaries) for the reporting period amounted to 38,813 tCO₂eq.

The total Scope 2 emissions for the consolidated group of companies within the scope of this Consolidated

Sustainability Statement (parent and subsidiaries) for the reporting period amounted to 116,612 tCO₂eq.

In line with the approach outlined within the “Scope of Consolidation of this Sustainability Report” section of

chapter 1.1. (General Basis for Preparation), this Consolidated Sustainability Statement includes sustainability

data for certain investees that are not under CSG’s full control. No additional sustainability-related disclosures

are provided for associates, joint ventures, or unconsolidated subsidiaries.

The Kinetic Group (TKG) was acquired on November 27, 2024. However, for the purposes of this chapter

2.2.7. (Gross Scopes 1, 2, 3 and Total GHG Emissions), data for the whole of 2024 were used for companies

within the scope of TKG - Ammunition Operations LLC, Federal Cartridge Company, The Kinetic Group

Operations LLC, and Vista Outdoor Sales LLC.

Disaggregation of GHG Emissions

CSG disaggregates total GHG emissions by country, sector, and value-chain boundary, providing a detailed

breakdown to enhance transparency and comparability. The following table presents the disaggregated data.

Disaggregation of GHG Emissions (Table ID 13)

Disaggregation

Total GHG Emissions (tCO2eq)

Country

Czech Republic (33)

329,376

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Great Britain (1)

5,847

India (3)

1,278

Italy (3)

173,814

Serbia (1)

24,018

Slovakia (11)

114,266

Spain (1)

4,012

United States of America (6)

345,240

Sector

Aerospace (3)

10,259

Automotive (3)

96,057

Defence (19)

705,702

Health Care (1)

973

Metal Processing (1)

102,495

Professional & Commercial Services (7)

21,300

Real Estate & Services (1)

Rolling Stock (5)

13,840

Software & IT Services (5)

1,449

Textiles, Apparels, Footwear & Accessories (1)

545

Transportation (3)

2,912

Wholesale & Retail trade (8)

81,266

Value chain Boundary

Upstream Value Chain

725,190

Own Operations

155,426

Downstream Value Chain

117,233

Numbers in brackets indicate the number of CSG companies in each respective category.

Disclosure of Significant Scope 3 Categories

CSG identifies and discloses significant Scope 3 GHG emission categories based on their estimated GHG

emissions and their relevance to its operations. The following categories are included in CSG’s Scope 3

reporting:

• Purchased goods and services—prioritized due to financial significance

• Capital goods—prioritized due to financial significance

• Fuel and energy-related activities (not included in Scope 1 or Scope 2)—prioritized due to expected

higher GHG emissions

• Upstream transportation and distribution—prioritized due to expected high GHG emissions

• Waste generated in operations—prioritized due to expected high GHG emissions

• Business travel—prioritized due to number of employees and data availability

• Employee commuting—prioritized due to number of employees and data availability

• Downstream transportation—prioritized due to expected high GHG emissions

• Downstream leased assets—prioritized due to financial significance

The remaining Scope 3 categories are not included. Investments are excluded due to their immateriality and

franchises are not relevant to CSG’s business operations.

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While the categories Processing of Sold Products, Use of Sold Products, and End-of-Life Treatment of Sold

Products are excluded from CSG’s Scope 3 inventory due to the complexity of the product portfolio, CSG

has undertaken additional steps to approximate their relevance and magnitude. Recognizing that these

categories may contribute significantly to downstream emissions, CSG has implemented a high-level

estimation approach to support transparency and completeness in its reporting, although it is fully aware of

the very high level of uncertainty of the presented estimations.

To address this, CSG conducted an internal review of its subsidiaries’ product lines and operational profiles

to determine whether these categories are materially relevant. This involved understanding the nature of

each company's products, their typical use phase, integration by downstream partners, and their expected

end-of-life scenarios. Where products were likely to be combusted, used as components in more complex

systems, or disposed of in ways that generate emissions, CSG applied a proportionate estimation

methodology. These estimates were informed by general benchmarks derived from upstream emissions

data, such as energy consumption, material intensity, and procurement values. The approach reflects the

different types of outputs across CSG’s industrial and defence-related manufacturing companies.

Although the estimations derived from this exercise provide useful insights into the likely order of magnitude

of these downstream impacts, it must be again emphasized that they are subject to a very high degree of

uncertainty.

CSG strongly cautions against interpreting these values as precise measurements. The estimations rely on

broad assumptions and indirect data, as there is currently no comprehensive access to product-level life-

cycle information, no consistent visibility into downstream use patterns, and no standardized emission factors

available for many of the specialized products involved. Variability in customer practices, product lifespan,

end-use environments, and disposal methods all contribute to this uncertainty. As such, the provided ranges

represent indicative values only and are intended to support qualitative understanding rather than quantitative

accuracy.

Use of Sold Products was found to potentially represent between 16% and 33% of the currently reported

total Scope 3 emissions (not including omitted categories) across the group. Processing of Sold Products

and End-of-Life Treatment of Sold Products are individually estimated to potentially represent up to 5% of

the currently reported total Scope 3 emissions (not including omitted categories) and are considered

potentially immaterial.

While these estimations have not been incorporated into the reported Scope 3 emissions ranges presented

in this Consolidated Sustainability Statement, they provide an important reference point for understanding

where material downstream emissions may be occurring.

CSG calculates its GHG emissions using the Green0meter

platform, applying the GHG Protocol methodology

to ensure consistency with internationally recognized standards for carbon accounting. Emission factors are

sourced from DEFRA, MPO (for location-based electricity emissions), and ECOInvent. These sources were

selected for their comprehensiveness, reliability, and alignment with industry best practices.

Significant Assumptions:

• Ownership and Operational Control Approach: Emissions are calculated based on activities where CSG

has operational control or ownership.

• Scope 2 Emissions: Location-based method is considered. Market-based Scope 2 emissions are aligned

with location-based emissions as CSG does not currently procure renewable energy through specific

contracts, guarantees of origin (GOs) or renewable energy certificates (RECs) and in location-based

emissionsCSG relies on the standard electricity mix available in relevant operational regions.

• Scope 3 Estimates: Where direct supplier-specific data is unavailable, sector-specific emission factors

are applied.

• Data Gaps: In cases where primary data is missing, estimations are used.

On November 27, 2024, CSG acquired The Kinetic Group, which introduced significant time pressure on data

collection due to the deadline for publishing this Consolidated Sustainability Statement. Given the constraints,

https://www.green0meter.com

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CSG has gathered the best available data within the timeframe, ensuring the most accurate representation of

its GHG emissions.

Biogenic CO₂ emissions from the combustion or biodegradation of biomass are not relevant for CSG

operations.

CSG does not purchase any renewable energy; therefore, the percentage of contractual instruments used in

our energy sourcing is 0%. As a result, no further details are provided regarding contractual instruments in

this Consolidated Sustainability Statement.

CSG’s Scope 3 GHG emissions related to value chain were solely estimated, percentage of GHG Scope 3

emissions using primary data for calculation is 0%. Obtaining primary data from suppliers and other value

chain partners remains challenging due to data availability and reporting inconsistencies. The measurement

of emissions from specific activities within the upstream and downstream value chain is limited, with

estimations applied where direct data was unavailable. To improve accuracy, CSG aims to explore ways to

enhance supplier engagement and refine its data collection processes in future reporting periods.

CSG’s Scope 3 GHG emissions are estimated based on the GHG Protocol Corporate Value Chain (Scope 3)

Accounting and Reporting Standard. Due to data-availability challenges, a mix of primary and secondary data

sources has been applied.

Breakdown of each Scope 3 category, including reporting boundaries, calculation methods, and tools used:

Purchased Goods and Services

• Reporting Boundaries: Includes all direct procurement of materials, components, and services from

suppliers. Intragroup transactions were marked by companies, and consequently emissions from those

transactions were removed at the level of CZECHOSLOVAK GROUP a.s.

• Calculation Method: Spend-based methodology utilizing financial data from procurement records

combined with industry-specific emission factors. Activity-based methodology utilizing activity data in

various units of measurement.

• Tools Used: Green0meter with emission factors from DEFRA and ECO Invent.

Capital Goods

• Reporting Boundaries: Includes capital expenditures on assets such as machinery, equipment, and

infrastructure across all CSG facilities.

• Calculation Method: Spend-based approach, wherein capital investment data is multiplied by sector-

specific emission factors from recognized databases.

• Tools Used: Green0meter with emission factors from DEFRA.

Fuel and Energy-Related Activities (Not Included in Scope 1 or Scope 2)

• Reporting Boundaries: Covers emissions associated with fuel supply chains and electricity transmission

and distribution losses.

• Calculation Method: Hybrid approach—using fuel consumption data (activity-based) and grid-specific

energy losses (factor-based).

• Tools Used: Green0meter with DEFRA and MPO emission factors.

Upstream Transportation

• Reporting Boundaries: Covers transportation of raw materials and components from tier 1 suppliers and

to tier 1 customers, wherein CSG ensures transportation of goods.

• Calculation Method: Distance-based and weight-based approach, using freight ton-kilometers (t-km)

to estimate emissions based on transport mode.

• Tools Used: Green0meter with DEFRA factors for transport emissions.

Waste Generated in Operations

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• Reporting Boundaries: Includes non-hazardous and hazardous waste volume and management from

manufacturing and administrative operations.

• Calculation Method: Waste-type-specific and waste-management-specific emission factors applied to

reported waste volumes (activity-based approach).

• Tools Used: Green0meter with DEFRA and ECO Invent factors.

Business Travel

• Reporting Boundaries: Covers emissions from employee air travel, rail, road transport, and

accommodation.

• Calculation Method: Activity-based approach, using ticketed/estimated distances for flights and fuel-

based factors for company cars.

• Tools Used: Green0meter with DEFRA factors for business travel emissions.

Employee Commuting

• Reporting Boundaries: Covers emissions from employees commuting between home and work,

including company-provided transport.

• Calculation Method: Estimated based on employee survey data regarding travel distances and

transportation modes (average emissions per mode applied).

• Tools Used: Green0meter with DEFRA factors for commuter transport.

Downstream Transportation

• Reporting Boundaries: Includes emissions from the transportation and distribution of products sold

from CSG’s facilities to distributors, or retailers.

• Calculation Method: Activity-based approach, using fuel consumption or distance traveled for each

transportation mode. Whenever primary data is unavailable, a spend-based approach is used,

multiplying transportation costs by emission factors from recognized sources.

• Tools Used: Green0meter with emission factors from DEFRA, Ecoinvent, and MPO (for location-based

electricity emissions where applicable).

Downstream Leased Assets

• Reporting Boundaries: Covers emissions from assets owned by CSG but leased to third parties, such

as vehicles, or buildings, where CSG does not have operational control.

• Calculation Method: Estimated using fuel consumption data for leased assets and applying fuel

emission factors.

• Tools Used: Green0meter with DEFRA and Ecoinvent emission factors for energy and fuel use.

GHG Intensity Based on Net Revenue

CSG’s location-based GHG emissions intensity is 186 tCO2eq per 1 million EUR of net revenue. Market-based

GHG intensity is 186 tCO2eq per 1 million EUR as it is aligned with location-based GHG emissions as CSG does

not currently procure renewable energy through specific contracts, guarantees of origin (GOs) or renewable

energy certificates (RECs) and in location-based emissions CSG relies on the standard electricity mix available

in relevant operational regions. For the purpose of the GHG intensity ratio calculation, emissions of companies

within The Kinetic Group were adjusted to reflect only the post-acquisition period, aligning with the

consolidated revenue recognition.

The net revenue amount used for the calculation of GHG emissions intensity is 4,008 million EUR and can be

found in the Revenues part of the Management Discussion & Analysis section of the Financial Review. Please

note that this figure does not include the financial results of the following companies, as they are not

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consolidated according to IFRS requirements: MEDHA DAKO-CZ PRIVATE LIMITED, Milconn, a.s., TATRA

EXPORT s.r.o., TATRA METALURGIE a.s., TATRA TRUCKS a.s., and VÝVOJ Martin, a.s.

E1-7

2.2.8. GHG Removals and GHG

Mitigation Projects Financed through

Carbon Credits

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E1_SM_02: Climate Change Mitigation Plans

 E1_SM_03: GHG Emissions and Targets

Disclosure of GHG Removals and Storage Resulting from Projects Developed

in Own Operations or Contributed to in Upstream and Downstream Value

Chain

CSG does not currently engage in GHG removal projects or initiatives involving carbon capture and storage

within its own operations or across its value chain. No projects of this kind have been developed, financed,

or contributed to during the reporting period.

Disclosure of GHG Emission Reductions or Removals from Climate Change

Mitigation Projects outside Value Chain Financed or to be Financed through

Any Purchase of Carbon Credits

CSG does not finance or intend to finance GHG emission reductions or removals through climate change

mitigation projects outside its value chain, including the purchasing of carbon credits. No initiatives of this

kind were undertaken during the reporting period.

E1-8

2.2.9. Internal Carbon Pricing

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E1_SM_01: Climate Change Management

 E1_SM_03: GHG Emissions and Targets

Disclosure of Whether Internal Carbon Pricing Schemes Have Been Applied

CSG does not currently apply internal any carbon pricing schemes. At this stage, the company is focusing on

establishing reliable sustainability data collection processes and developing climate-related policies as part

of its broader environmental strategy.

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E1-9

2.2.10. Anticipated Financial Effects

from Material Physical Risks

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter “E1_SM_01: Climate Change Management.”

Disclosure of Anticipated Financial Effects from Material Physical Risks,

Material Transition Risks, and Potential to Benefit from Material Climate-

Related Opportunities

In accordance with the phase-in provisions, data on the anticipated financial effects from material physical

risks has been omitted in this first year of the Consolidated Sustainability Statement (see Annex 1: List of

Phase-in ESRS Data Points in accordance with Appendix C to ESRS 1). CSG is working to enhance data

collection processes, and this information will be incorporated in next year’s Consolidated Sustainability

Statement.

Building upon the disclosure in chapter 1.3.3. (Material Impacts, Risks and Opportunities and Their Interaction

with Strategy and Business Model), CSG has not yet quantified the anticipated financial effects of material

physical and transition risks or potential climate-related opportunities. Future efforts will focus on enhancing

risk assessment methodologies to improve the integration of climate-related financial impacts into decision-

making and reporting.

2.3. Pollution

Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 2.3. Pollution (Table ID 14)

Sustainability Matter

Main Areas of Concern (IROs)

E2_SM_04 Pollution

Mitigation and Policy

Implementing effective pollution mitigation policies supports the reduction of

emissions, benefiting public health and ensuring regulatory compliance. Lack of

stringent policies or poor enforcement may increase pollution levels, exposing

the organization to health-related risks and reputational scrutiny.

E2_SM_05 Pollution

Incident and Emergency

Preparedness

Having robust incident and emergency preparedness plans improves the ability

to respond to pollution incidents and reduces the risk of environmental harm.

Climate-related events like floods and storms can elevate the risk of pollutant

leaks.

E2_SM_06 Substance

Management

Proper management of substances limits the use of harmful materials and

minimizes environmental and health risks. Poor handling or misuse of

substances can lead to regulatory non-compliance, reputational damage, and

interruptions in the supply chain.

E2_SM_42 Air Pollution

Air pollution from manufacturing and operational activities can negatively affect

local air quality and may impact local regulatory compliance and pose risks to

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community health. Effective monitoring and control of emissions are essential to

maintaining compliance.

Pollution Data Methodology and Considerations

The pollution metrics have been estimated based on data provided by two Group companies operating

defence sector. These entities supplied environmental data related to air pollution and substances of concern,

which we used as the foundation for revenue-based extrapolation across the broader reporting scope. This

approach reflects our view that air-pollution levels and the use of hazardous substances are closely linked to

revenue, as revenue tends to scale with production volumes and material use. The methodology assumes

that pollution intensity per unit of revenue is broadly consistent across similar operations within the Group.

Adjustments were made for scale and known operational differences. While this provides a reasonable

estimate in the absence of complete primary data, limitations remain, including variations in site-specific

emissions and local regulatory contexts. At the time of reporting, these metrics have not been externally

validated beyond the assurance provider.

E2.IRO-1

2.3.1. General Disclosures Related to

Pollution

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E2_SM_04: Pollution Mitigation and Policy

 E2_SM_05: Pollution Incident and Emergency Preparedness

 E2_SM_06: Substance Management

 E2_SM_42: Air Pollution

Processes to Identify and Assess Material Pollution-Related Impacts, Risks

and Opportunities

CSG has conducted a high-level assessment of its business activities to identify pollution-related impacts,

risks, and opportunities across its own operations. This evaluation took into consideration key environmental

aspects such as pollution of air and hazardous waste generation. No formal consultations with affected

communities were conducted as part of this assessment.

As a result, pollution has been assessed as being a material topic for the following sectors:

 Aerospace, Automotive, Defence, Metal Processing, Rolling Stock, Textiles, Apparel, Footwear &

Accessories—These sectors involve manufacturing processes that pose higher pollution risks relative to

other sectors.

 Healthcare—This sector presents additional pollution risks due to the involvement of biological waste,

medical substances, and chemical disposal.

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E2-1

2.3.2. Policies Related to Pollution

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E2_SM_04: Pollution Mitigation and Policy

 E2_SM_05: Pollution Incident and Emergency Preparedness

 E2_SM_06: Substance Management

 E2_SM_42: Air Pollution

Disclosure of Policies Adopted to Manage Material Impacts, Risks and

Opportunities Related to Pollution Prevention and Control (Including Minimal

Disclosure Requirements)

CSG is ISO 14001 certified; this provides a structured framework for environmental management, including

the prevention of pollution. While CSG does not have a dedicated group-wide pollution policy, pollution-

related risks and obligations are managed through the Group Standard for Environmental Management

Systems (EMS). This standard ensures compliance with legal requirements by continuously identifying,

managing, and mitigating environmental risks. To support this, each company within the group either assigns

internal experts or engages external specialists with the necessary qualifications to oversee pollution-related

compliance and risk management. The Board of Directors or an equivalent governing body holds ultimate

responsibility for implementing the Group Standard for EMS.

Mitigation of Negative impacts Related to Pollution

This chapter relates to sustainability matter “E2_SM_04: Pollution Mitigation and Policy.”

The approach used for mitigating negative impacts related to air, water, and soil pollution varies across CSG.

9.4% of its companies have a pollution prevention policy in place, outlining actions to reduce emissions and

implement control measures. 21.9% monitor and report pollution levels to ensure compliance with

environmental regulations and assess mitigation effectiveness. 15.6% have implemented advanced pollution

control technologies such as air filtration, water treatment, and soil remediation. Additionally, 9.4% work with

suppliers to uphold environmental standards, while 18.8% conduct regular audits and inspections to improve

pollution mitigation strategies. Engagement with local communities and environmental organizations remains

limited at 3.1%, and 75% of companies currently lack formalized pollution control policies but plan to develop

them in the future.

The sectoral differences here highlight the Group’s varying levels of engagement with pollution mitigation.

The Aerospace and Metal Processing sectors display the most comprehensive approaches, with a strong

presence of pollution prevention policies, monitoring systems, and advanced pollution control technologies.

The Defence sector has the highest share of companies conducting pollution monitoring and audits. The

Automotive sector has no significant pollution policies in place, while Healthcare and Rolling Stock show

limited engagement.

Substitution, Minimization, and Phasing Out of Substances of Concern

This chapter relates to sustainability matter “E2_SM_06: Substance Management.”

The Group’s approach toward substituting and minimizing substances of concern, as well as phasing out

substances of very high concern, remains limited at this stage. 18.2% of CSG’s companies are actively working

to replace substances of concern with safer alternatives across their operations and supply chains, particularly

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in non-essential societal uses and consumer products. 9.1% incorporate safer alternatives into product

development at the early design and manufacturing stages, ensuring compliance with global safety standards.

Collaboration with suppliers to phase out such substances throughout the supply chain is present in 6.06%

of the companies, while an equal 6.1% conduct regular assessments to identify substances of concern and

develop action plans for their substitution or minimization. However, 75.8% of the companies do not yet have

a formal policy in this area, although they do plan to develop one in the future.

Sector-specific data highlights Aerospace as the most engaged sector, with 33.3% of its companies working

on substitution, 66.7% committed to phasing out substances of very high concern, and an equal 66.7%

considering safer alternatives in product development. The Defence sector also shows some engagement,

with 21.1% of its companies substituting hazardous substances and 10.5% conducting assessments.

Avoiding Incidents and Emergency Situations

This chapter relates to sustainability matter “E2_SM_05: Pollution Incident and Emergency Preparedness.”

A small portion of CSG’s companies currently have structured policies to prevent, control, and mitigate

incidents and emergency situations. 12.5% of its companies have an incident prevention policy to identify and

mitigate potential risks, while 18.8% have emergency preparedness and response procedures in place to

ensure effective incident management. Regular risk assessments to identify and address environmental and

safety risks are conducted by 18.8% of the companies. 12.5% have dedicated emergency response teams

with clear roles and responsibilities, and 9.38% provide regular emergency response training for employees

and suppliers. However, 59.4% of the companies do not currently have formal policies in place, although they

plan to develop them in the near future.

A look at the sectoral differences highlights Aerospace, Automotive, and Defence as the sectors most

engaged in emergency response preparedness. 33.3% of the Aerospace and Automotive companies conduct

risk assessments and have emergency response teams, while 26.3% of the Defence companies have

structured emergency response procedures. The Metal Processing, Rolling Stock, and Textiles sectors

currently lack formal policies but have indicated future policy development.

E2-2

2.3.3. Actions and Resources Related to

Pollution

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E2_SM_04: Pollution Mitigation and Policy

 E2_SM_05: Pollution Incident and Emergency Preparedness

 E2_SM_06: Substance Management

 E2_SM_42: Air Pollution

Minimum Disclosure Requirement – Actions and Resources in Relation to

Pollution

ISO 14001 Certification

In 2024, CSG successfully completed the recertification process for ISO 14001, as previously described in

chapter 2.2.4. (Actions and Resources in Relation to Climate Change Policies).

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Group Policy Framework

As part of the planned Group Policy Framework, CSG intends to introduce a Hazardous Material Management

Policy, which will specifically address the safe handling, storage, transport, and use of hazardous substances

so as to minimize risks to employee health, environmental protection, and company assets. This policy will

include classification and record-keeping of hazardous materials, employee training, and compliance with

legislative and international standards. Its objective is to enhance safety measures and risk prevention when

dealing with hazardous substances within the Group’s companies. The timeline for adopting a Hazardous

Material Management Policy is set for 2025.

The implementation of the Hazardous Material Management Policy and ISO recertifications does not require

significant operational (OpEx) or capital (CapEx) expenditures.

During the reporting period, CSG did not identify any actual adverse pollution-related impacts that resulted in

specific or direct harm requiring remedial action. No cases of environmental degradation or regulatory

breaches were recorded that necessitated the provision of, or cooperation in, a remedy.

No actions or action plans relating to material pollution related impacts were disclosed in prior reporting

periods, as this is CSG’s first reporting period under the ESRS framework. As a result, no quantitative or

qualitative progress updates are available at this time. Future reporting periods will include such disclosures

as actions are implemented and progress is monitored in line with ESRS requirements.

Further Information on Actions and Resources in Relation to Pollution

CSG’s pollution-related actions are currently limited to its own operations and do not extend to upstream or

downstream value-chain engagements.

E2-3

2.3.4. Targets Related to Pollution

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E2_SM_04: Pollution Mitigation and Policy

 E2_SM_05: Pollution Incident and Emergency Preparedness

 E2_SM_06: Substance Management

 E2_SM_42: Air Pollution

Minimum Disclosure Requirement – Targets Related to Pollution

CSG has not yet set measurable outcome-oriented targets related to pollution. At this stage, the focus remains

on establishing a robust data foundation and enhancing internal processes for sustainability reporting, which

are essential prerequisites for defining meaningful and achievable targets. Although no specific timeline for

setting such targets has been set so far, CSG anticipates that target-setting efforts will be developed in

alignment with the Group Policy Framework within the next three years.

Despite the absence of formalized targets, CSG monitors the effectiveness of its policies and actions as

described in chapter 2.3.3. (Actions and Resources Related to Pollution) of this Consolidated Sustainability

Statement. As part of its ongoing sustainability strategy, CSG aims to refine quantitative and qualitative

indicators in the future to measure its environmental impact more effectively.

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Further Information on Targets in Relation to Pollution

Since CSG has not yet established measurable outcome-oriented targets related to pollution, it currently has

no specific targets addressing the prevention and control of air pollutants, emissions into water, pollution into

soil, or substances of concern or very high concern.

E2-4

2.3.5. Pollution of Air

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter E2_SM_42: Air Pollution.

Disclosure of Pollutants Emitted Through Own Operations

CSG has compiled an estimation of pollution emissions to air across its operations. CSG acknowledges the

need for enhanced data collection processes to improve pollutant-specific disclosures in alignment with

Annex II of Regulation (EC) No. 166/2006 (E-PRTR Regulation).

Volume of Air Pollutants by Sector (Table ID 15)

Sector

(Tons)

Aerospace

13.8

Automotive

47.1

Defence

126.0

Metal Processing

29.5

Rolling Stock

3.1

Total

219.4

Volume of Air Pollutants by pollutant (Table ID 16)

Air pollutant

Tons

Particulate matters (PM)

21.1

Hydrogen cyanide

3.2

Ammonia and its gaseous compounds expressed as NH₃

0.5

Sulfur dioxide (SO₂)

0.9

Nitrogen oxides (NOₓ)

8.5

Carbon monoxide (CO)

65.0

Toluene

16.7

Xylene (dimethylbenzene)

4.1

Alkyl alcohols

8.4

Butyl acetate

8.4

TOC from VOC

28.5

TOC

1.2

VOC

52.8

Total

219.4

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Further Information on Air Pollution

Comparative data on air pollution is not available, due to the broader scope of companies included in the 2024

reporting period. As CSG refines its sustainability data collection processes, future reports are expected to

enable more consistent year-over-year comparisons.

The reported data is based on estimations on pollution from previous reporting, as no data for 2024 was

available at the time of compilation of this Consolidated Sustainability Statement. The companies that track

pollution levels make use of national environmental reporting frameworks and methodologies aligned with

regulatory requirements.

In order to support pollution-related accounting and reporting, data is collected at the company level and

consolidated at the Group level. This process includes self-reported data from subsidiaries. The data sources

primarily consist of emission records and compliance reports submitted to regulatory bodies.

E2-5

2.3.6. Substances of Concern and

Substances of Very High Concern

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter “E2_SM_06: Substance Management.”

Substances of Concern

CSG has estimated the amount of substances of concern. Due to inconsistencies in reporting and the

complexity of tracking such substances across diverse operations, no comprehensive Group-wide dataset is

currently available. The total amount of substances of concern that are generated / used during production /

procured is 71,776 tons.

The breakdown of substances of concern by main hazard classes reflects the classification based on their

hazardous properties. Please note that many substances fall into multiple hazard categories. As a result, the

sum of quantities across the individual hazard classes exceeds the total amount and should not be interpreted

as an additive figure.

Substances of Concern per main hazard class

(Table ID 17)

Main Hazard Class

Generated / used during production / procured

(tons)

Environmental Hazard

12.5

Health Hazard

71,775.6

Physical Hazard

71,767.3

Substances of Concern leaving facilities (Table ID 18)

These categories are defined by Regulation (EC) No 1272/2008 of the European Parliament and of the Council of 16

December 2008 on classification, labelling and packaging of substances and mixtures, amending and repealing

Directives 67/548/EEC and 1999/45/EC, and amending Regulation (EC) No 1907/2006 (OJ L 353, 31.12.2008, p. 1)

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Substance of concern

(category)

Generated / used during production / procured

(tons)

Substances of concern that leave facilities as emissions

2.0

Substances of concern that leave facilities as products

0.0

Substances of concern that leave facilities as part of

products

71,761.6

Substances of concern that leave facilities as services

0.0

Total amount of substances of concern that leave

facilities as emissions, as products, or as part of

products or services

71,763.6

Substances of Concern leaving facilities as emissions (Table ID 19)

Main Hazard Class

Generated / used during production / procured

(tons)

Environmental Hazard

0.2

Health Hazard

2.0

Physical Hazard

2.0

Substances of Concern leaving facilities as parts of products (Table ID 20)

Main Hazard Class

Generated / used during production / procured

(tons)

Environmental Hazard

4.5

Health Hazard

71,761.6

Physical Hazard

71,757.3

Substances of Very High Concern

CSG has estimated the amount of substances of very high concern. Due to inconsistencies in reporting and

the complexity of tracking such substances across diverse operations, no comprehensive Group-wide dataset

is currently available. The total amount of substances of very high concern that are generated / used during

production / procured is 224.7 tons.

The breakdown of substances of very high concern by main hazard classes reflects the classification based

on their hazardous properties. Please note that many substances fall into multiple hazard categories. As a

result, the sum of quantities across the individual hazard classes exceeds the total amount and should not be

interpreted as an additive figure.

Substances of Very High Concern per main hazard class (Table ID 21)

Substance of concern

(category)

Generated / used during production / procured

(tons)

Environmental Hazard

224.7

Health Hazard

217.2

Physical Hazard

0.5

Substances of Very High Concern leaving facilities (Table ID 22)

Substance of very high concern

(category)

Generated / used during production / procured

(tons)

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Substances of very high concern that leave facilities as

emissions

0.0

Substances of very high concern that leave facilities as

products

0.0

Substances of very high concern that leave facilities as

part of products

224.3

Substances of very high concern that leave facilities as

services

0.0

Total amount of substances of very high concern that

leave facilities as emissions, as products, or as part

of products or services

224.3

Substances of Very High Concern leaving facilities as parts of products (Table ID 23)

Main Hazard Class

Generated / used during production / procured

(tons)

Environmental Hazard

224.3

Health Hazard

217.2

Physical Hazard

0.5

E2-6

2.3.7. Anticipated Financial Effects from

Material Pollution-related Risks and

Opportunities

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E2_SM_04: Pollution Mitigation and Policy

 E2_SM_05: Pollution Incident and Emergency Preparedness

 E2_SM_06: Substance Management

 E2_SM_42: Air Pollution

Disclosure of Anticipated Financial Effects from Material Pollution-related

Risks and Opportunities

In accordance with phase-in provisions, data on the anticipated financial effects from material pollution-

related risks and opportunities has been omitted in this first year of the Consolidated Sustainability

Statement (see Annex 1: List of Phase-in ESRS Data Points in accordance with Appendix C to ESRS 1). CSG

is working to enhance data collection processes, and this information will be incorporated in next year’s

Consolidated Sustainability Statement.

Building on the disclosure in chapter 1.3.3. (Material Impacts, Risks and Opportunities and Their Interaction

with Strategy and Business Model), CSG has not yet quantified the anticipated financial effects of material

pollution-related risks and opportunities. Future efforts will focus on enhancing risk assessment

methodologies to improve the integration of climate-related financial impacts into decision-making and

reporting.

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Percentage of Net Revenue Connected to Products and Services That Are or

That Contain Substances of Concern / Substances of Very High Concern

CSG does not currently have a reliable data source that it can use to determine the percentage of net revenue

generated from products and services that contain substances of concern / substances of very high concern.

The complexity of tracking such substances across diverse product lines and supply chains presents data-

availability challenges.

Operating Expenditures (OpEx) / Capital Expenditures (CapEx) in Conjunction

with Major Incidents and Deposits (Pollution)

CSG does not currently have a reliable data source to determine the Operating Expenditures (OpEx) or Capital

Expenditures (CapEx) associated with major pollution-related incidents and deposits. Due to the complexity

of tracking such expenditures across various operations, no structured reporting mechanism is in place.

Provisions for Environmental Protection and Remediation Costs

CSG does not currently have a reliable data source that it can use to determine the provisions for

environmental protection and remediation costs related to pollution. Due to the complexity of tracking such

provisions across various operations, no structured reporting mechanism is in place.

2.4. Water and Marine Resources

Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 2.4. Water and Marine Resources (Table ID 24)

Sustainability Matter

Main Areas of Concern (IROs)

E3_SM_07 Water

Management and Policy

Effective water management policies contribute to sustainable water use, cost

savings, and regulatory compliance.

E3_SM_08 Water

Treatment and Pollution

Prevention

Proper water treatment and pollution prevention strategies reduce pollution

levels, protect ecosystems, and help meet regulatory standards. Without these

measures, there is an increased risk of pollution incidents and operational costs

associated with treatment systems.

E3_SM_09 Water Sourcing

and Usage

Efficient water sourcing and usage minimizes resource consumption and lower

operational costs. Poor water management can lead to unsustainable water

usage, heightened vulnerability to droughts and storms.

E3_SM_10 Water-related

Sustainable Practices and

Ecological Impact

Implementing sustainable water-related practices ensures compliance with local

and international regulations and supports environmental protection. Failure to

meet these standards may result in legal penalties, financial fines, or restrictions

on business operations.

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E3.IRO-1

2.4.1. General Disclosures Related to Water

and Marine Resources

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E3_SM_07: Water Management and Policy

 E3_SM_08: Water Treatment and Pollution Prevention

 E3_SM_09: Water Sourcing and Usage

 E3_SM_10: Water-related Sustainable Practices and Ecological Impact

Processes to Identify and Assess Material Water- and Marine-Resources-

Related Impacts, Risks and Opportunities

CSG has conducted an assessment of its business activities to identify potential and actual impacts, risks, and

opportunities related to water and marine resources across its own operations. This assessment considered

key aspects such as water management policies, water sourcing and usage, pollution prevention, and

regulatory compliance. No formal consultations with affected communities were conducted as part of this

assessment.

The methodology used to assess these factors was based on:

• A review of operational processes to determine water usage, treatment, and discharge practices.

• A high-level review of regulatory requirements regarding water management standards across different

regions.

• A consideration of climate-related risks, such as physical and transition risks affecting water availability

and quality.

A detailed water risk screening has been conducted at all CSG locations and is further described in chapter

2.4.5. (Water Consumption) of this Consolidated Sustainability Statement.

E3-1

2.4.2. Policies Related to Water and

Marine Resources

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E3_SM_07: Water Management and Policy

 E3_SM_09: Water Sourcing and Usage

 E3_SM_08: Water Treatment and Pollution Prevention

 E3_SM_10: Water-related Sustainable Practices and Ecological Impact

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Disclosure of Policies Adopted to Manage Material Impacts, Risks and

Opportunities Related to Water and Marine Resources (Including Minimum

Disclosure Requirements)

CSG is certified under ISO 14001, which provides a structured framework for environmental management and

requires organizations to identify, monitor, and manage their water-related environmental impacts. CSG did

not have a dedicated group-wide water management policy in 2024, but water-related risks and obligations

are managed through the Group Standard for Environmental Management Systems (EMS). This standard

ensures compliance with legal requirements by continuously identifying, managing, and mitigating risks to the

environment. To support this, each company within the Group either assigns internal experts or engages

external specialists with the necessary qualifications to oversee environmentally related compliance and risk

management. The Board of Directors or an equivalent governing body holds the ultimate responsibility for

implementing the Group Standard for EMS.

CSG does not have specific policies addressing water management, sourcing, or treatment at the Group level.

Each of its subsidiaries is responsible for adhering to the applicable environmental laws and industry

standards related to water discharge, treatment processes, and pollution prevention. Future developments in

CSG’s water management policies may include more structured guidance regarding water management. No

policy for preventing and abating water pollution is present within 71.9% of the Group. However, some of the

companies have implemented measures to manage water pollution risks as 9.4% have a pollution prevention

policy in place, 6.3% conduct water quality monitoring, and 15.6% have advanced water treatment systems

in place. Additionally, 15.6% apply best management practices, 6.3% conduct environmental impact

assessments (EIAs), and 12.5% engage with local communities to address water pollution concerns.

CSG does not have a dedicated policy throughout the Group to address product and service design in relation

to water-related issues, nor does it have formal policies or commitments related to reducing water

consumption in areas at water risk.

No specific policies have been adopted to address water management in high-water-stress areas, including

policies for Italy and Spain. This is due to several factors. While both of these countries do face increasing

water-scarcity challenges, CSG’s operations in these regions do not currently represent high-consumption or

high-impact water activities that would necessitate dedicated policies.

None of CSG’s operations are located in coastal or marine environments. Given the nature of conducted

activities, CSG’s operations do not have a direct impact on marine ecosystems. As a result, sustainable ocean

and sea management is not considered material to the company’s environmental strategy.

E3-2

2.4.3. Actions and Resources Related to

Water and Marine Resources

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E3_SM_07: Water Management and Policy

 E3_SM_08: Water Treatment and Pollution Prevention

 E3_SM_09: Water Sourcing and Usage

 E3_SM_10: Water-related Sustainable Practices and Ecological Impact

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Minimum Disclosure Requirement – Actions and Resources in Relation to

Water and Marine Resources

ISO 14001 Certification

In 2024, CSG successfully completed the recertification process for ISO 14001, as previously described in

chapter 2.2.4. (Actions and Resources in Relation to Climate Change Policies).

Group Policy Framework

As part of the planned Group Policy Framework, CSG intends to introduce a Water Management Policy that

will specifically address efficient and responsible water resource management. The policy will aim to optimize

water consumption, minimize pollution in discharged water, and enhance compliance with the relevant

regulations. It will include measures for water management, monitoring water-discharge quality, and

mitigating risks associated with droughts and floods. The objective is to support the protection of water

resources and contribute to environmental sustainability across the Group’s companies. The timeline for

adopting the Water Management Policy is set for 2025.

The implementation of the Water Management Policy and ISO recertifications does not require significant

operational (OpEx) or capital (CapEx) expenditures.

During the reporting period, CSG did not identify any actual adverse water and marine resources related

impacts that resulted in specific or direct harm requiring remedial action. No cases of environmental

degradation or regulatory breaches were recorded that necessitated the provision of, or cooperation in, a

remedy.

No actions or action plans relating to material water and marine resources related impacts were disclosed in

prior reporting periods, as this is CSG’s first reporting period under the ESRS framework. As a result, no

quantitative or qualitative progress updates are available at this time. Future reporting periods will include

such disclosures as actions are implemented and progress is monitored in line with ESRS requirements.

Further Information on Actions and Resources in Relation to Water and Marine

Resources

CSG has not implemented specific group actions or allocated dedicated resources for managing water risks

in high-water stress areas. Nevertheless, one of CSG’s Spain-based companies is cooperating with local

authorities and communities to implement sustainable water management practices, focusing on shared water

resources, conservation, and equitable access to water, while a Serbia-based company is allocating financial

resources to implement water-saving technologies.

E3-3

2.4.4. Targets Related to Water and Marine

Resources

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E3_SM_07: Water Management and Policy

 E3_SM_08: Water Treatment and Pollution Prevention

 E3_SM_09: Water Sourcing and Usage

 E3_SM_10: Water-related Sustainable Practices and Ecological Impact

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Minimum Disclosure Requirement – Targets Related to Water and Marine

Resources

CSG has not yet set measurable outcome-oriented targets related to water and marine resources. At this

stage, the focus remains on establishing a robust data foundation and enhancing internal processes for

sustainability reporting, which are essential prerequisites for defining meaningful and achievable targets.

Although no specific timeline for setting such targets has yet been determined, CSG anticipates that target-

setting efforts will be developed in alignment with the Group Policy Framework within the next three years.

Despite the absence of formalized targets, CSG monitors the effectiveness of its policies and actions as

described in chapter 2.4.3. (Actions and Resources Related to Water and Marine Resources) of this

Consolidated Sustainability Statement. As part of its ongoing sustainability strategy, CSG aims to refine

quantitative and qualitative indicators in the future so as to measure its environmental impact more effectively.

Further Information on Targets in Relation to Water and Marine Resources

Since CSG has not yet established measurable outcome-oriented targets related to areas at water risk, there

are currently no specific targets addressing the reduction of water consumption.

E3-4

2.4.5. Water Consumption

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E3_SM_09: Water Sourcing and Usage

 E3_SM_08: Water Treatment and Pollution Prevention

Disclosure of Information About Water Consumption Performance Related to

Material Impacts, Risks, and Opportunities

CSG has assessed water risk exposure across its operations using the WRI Aqueduct Water Risk Atlas, as

recommended by the Task Force on Climate-Related Financial Disclosures (TCFD). This analysis categorized

CSG’s locations based on their respective water-risk levels. The results indicate that three CSG companies

operate in Medium-High Water Risk areas, 3 in High Water Risk areas, and 2 in Extremely High-Water Risk

areas.

For reporting purposes, CSG defines High Water Risk Areas as those classified under the High and Extremely

High WRI categories, while locations in the Medium-High WRI category are considered Water Risk Areas. This

classification helps CSG prioritize water management efforts and mitigation strategies in regions where water-

related challenges may have a large operational impact.

Based on the results of the double materiality assessment, water storage has been determined as non-material

for CSG’s activities at this time.

Companies Facing Water / High-Water Risk (Table ID 25)

Company

Water risk category

14. OKTOBAR d.o.o. Kruševac

Water Risk Area

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Armi Perazzi S.p.A.

Water Risk Area

DAKO-CZ INDIA PRIVATE LIMITED

High Water Risk Area

FABRICA DE MUNICIONES DE GRANADA S.L.

High Water Risk Area

Fiocchi of America Inc.

Water Risk Area

JWL DAKO-CZ (INDIA) PRIVATE LIMITED

High Water Risk Area

MEDHA DAKO-CZ PRIVATE LIMITED

High Water Risk Area

Perazzi USA, Inc.

High Water Risk Area

Data Related to Water Consumption

The water consumption data disclosed for the reporting period is primarily based on internal meter readings

from operational facilities, supplemented by historical consumption data from previous years to estimate

usage where direct measurements were unavailable. These estimates were adjusted for changes in

production activity and facility occupancy. While this approach provides a reasonable approximation, actual

consumption may vary once final data from utility providers is received. At the time of reporting, the metric

has not been externally validated by any third party beyond the assurance provider.

Water Consumption (Table ID 26)

Water consumption (m3)

Total water consumption

441,375

Water consumption in areas at water risk, including areas of high-water

risk

197,259

The water intensity ratio for the reporting period has been calculated at 110 cubic meters of water consumed

per 1 million EUR of net revenue. The net revenue amount used for calculating water intensity is EUR 4,008.7

million and can be found in the Revenues part of the Management Discussion & Analysis section of the

Financial Review. Please note that this figure does not include the financial results of the following companies,

as they are not consolidated according to IFRS requirements: MEDHA DAKO-CZ PRIVATE LIMITED, Milconn,

a.s., TATRA EXPORT s.r.o., TATRA METALURGIE a.s., TATRA TRUCKS a.s., and VÝVOJ Martin, a.s.

E3-5

2.4.6. Anticipated Financial Effects from

Material Water- and Marine-Resources-

Related Risks and Opportunities

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E3_SM_07: Water Management and Policy

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 E3_SM_08: Water Treatment and Pollution Prevention

 E3_SM_09: Water Sourcing and Usage

 E3_SM_10: Water-related Sustainable Practices and Ecological Impact

Disclosure of Anticipated Financial Effects from Material Water- and Marine-

Resources-Related Risks and Opportunities

In accordance with phase-in provisions, data on the anticipated financial effects from material water- and

marine- resources-related risks and opportunities has been omitted in this first year of the Consolidated

Sustainability Statement (see Annex 1: List of Phase-in ESRS Data Points in accordance with Appendix C to

ESRS 1). CSG is working to enhance data collection processes, and this information will be incorporated in

next year’s Consolidated Sustainability Statement.

Building upon the disclosure in chapter 1.3.3. (Material Impacts, Risks, and Opportunities and Their Interaction

with Strategy and Business Model), CSG has not yet quantified the anticipated financial effects of material

water and marine resources-related risks and opportunities. Future efforts will focus on enhancing risk

assessment methodologies to improve the integration of climate-related financial impacts into decision-

making and reporting.

2.5. Resource Use and Circular

Economy

Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 2.5. Resource Use and Circular Economy (Table ID

27)

Sustainability Matter

Main Areas of Concern (IROs)

E5_SM_14 Waste

Management and

Reduction Strategies

Implementing waste management and reduction strategies helps lower disposal

costs, reduce environmental impact, and enhance compliance. However,

traditional waste practices may become obsolete due to regulatory shifts, climate

impacts, and technological changes, leading to potential disruptions and

increased costs.

E5_SM_17 Circular

Economy Practices

Adopting circular economy principles enhances product lifecycle sustainability

and reduces waste. Yet, transitioning from linear models may face challenges

such as technological obsolescence, increased costs for new equipment, limited

availability of raw materials, and the need for regulatory adaptation.

While sustainable sourcing and the transition to reuse and recycling practices were not evaluated as material

for 2024, we recognise those as important aspects of environmental responsibility. However, their practical

implementation within the defence sector remains constrained. .Regulatory compliance, national security

requirements, and strict technical performance specifications often limit the feasibility of applying standard

sustainability approaches. In particular, defence-related procurement is subject to rigid supplier standards

and durability expectations, which restrict the use of alternative or recycled materials. Similarly, circular

economy practices such as reuse, or recycling are challenging to adopt for mission-critical components due

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143

to performance and security concerns. Despite these limitations, CSG acknowledges the relevance of these

topics and continues to explore feasible opportunities.

E5.IRO-1

2.5.1. General Disclosures Related to

Resource Use and the Circular Economy

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E5_SM_14: Waste Management and Reduction Strategies

 E5_SM_17: Circular Economy Practices

Processes to Identify and Assess Material Resource Use and Circular-

Economy-Related Impacts, Risks, and Opportunities

CSG has conducted a high-level assessment of its business activities to identify material impacts, risks, and

opportunities related to resource use and the circular economy. This assessment considered factors such

as waste management, sustainable sourcing, resource transition, and circular-economy practices, primarily

across its own operations and partially for its upstream value chain. No formal consultations with affected

communities were conducted as part of this assessment.

The analysis identified several key areas of concern:

• Waste Management and Reduction Strategies—CSG recognizes both the environmental and regulatory

risks associated with high waste generation and traditional disposal methods. Opportunities exist in

advanced waste reduction techniques and the implementation of circular economy models.

• Sustainable Sourcing and Renewable Resources: Potential risks include resource depletion, supply chain

disruptions, and regulatory pressures to adopt sustainable procurement. On the other hand, transitioning

towards renewable resource targets and forming partnerships with sustainable suppliers are seen as

opportunities.

• Circular Economy Practices: The shift towards a circular economy presents risks linked to regulatory

compliance and business transformation but also provides opportunities in sustainable product lifecycle

management and enhanced resource efficiency.

This initial assessment serves as a foundation for future resource optimization strategies, while ensuring

compliance with evolving environmental regulations.

E5-1

2.5.2. Policies Related to Resource Use

and the Circular Economy

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

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144

 E5_SM_14: Waste Management and Reduction Strategies

 E5_SM_17: Circular Economy Practices

Disclosure of Policies Adopted to Manage Material Impacts, Risks, and

Opportunities Related to Resource Use and Circular Economy (Including

Minimum Disclosure Requirements)

CSG is certified under ISO 14001, which provides a structured framework for environmental management,

requiring organizations to identify, monitor, and manage their impacts related to resource use and the circular

economy. Although CSG did not have a dedicated Group-wide resource use and circular economy policy in

2024, these topics are managed through the Group Standard for Environmental Management Systems (EMS).

This standard ensures compliance with legal requirements by continuously identifying, managing, and

mitigating environmental risks related to resource consumption, waste management, and material efficiency.

To support this, each company (for which the topic is relevant) within the Group either assigns internal experts

or engages external specialists with the necessary qualifications to oversee compliance and risk management

related to resource use and the circular economy. The Board of Directors or an equivalent governing body

holds the ultimate responsibility for implementing the Group Standard for EMS.

The majority of CSG’s companies do not have specific policies in place to support a transition away from the

use of virgin resources. However, one company within the Aerospace sector has engaged in a product-design

approach for recyclability, ensuring that its products can be easily disassembled and manufactured using

materials that are more readily recyclable.

The majority of CSG’s companies (95%) do not currently have formal policies addressing sustainable sourcing

or the use of renewable resources. However, one company in the Aerospace sector has implemented a

strategy to utilize renewable energy sources. Additionally, one company in the Software sector is actively

promoting circular-economy practices.

E5-2

2.5.3. Actions and Resources Related to

Resource Use and the Circular Economy

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E5_SM_14: Waste Management and Reduction Strategies

 E5_SM_17: Circular Economy Practices

Minimum Disclosure Requirement – Actions and Resources in Relation to

Resource Use and Circular Economy Actions and Resources Allocated to their

Implementation

ISO 14001 Certification

In 2024, CSG successfully completed the recertification process for ISO 14001, as previously described in

chapter 2.2.4. (Actions and Resources in Relation to Climate Change Policies).

Group Policy Framework

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As part of the planned Group Policy Framework, CSG intends to introduce a Waste Management and

Recycling Policy that will specifically address principles and procedures for efficient and environmentally

responsible waste management. This policy will focus on minimizing waste generation, promoting recycling

and material reuse, and ensuring compliance with relevant regulatory requirements. Its objective is to support

the circular economy and contribute to sustainable development across CSG’s companies. The timeline for

adopting the Waste Management and Recycling Policy is set for 2025.

The implementation of the Waste Management and Recycling Policy and ISO recertifications does not require

significant operational (OpEx) or capital (CapEx) expenditures.

During the reporting period, CSG did not identify any actual adverse Resource Use and Circular Economy-

related impacts that resulted in specific or direct harm requiring remedial action. No cases of environmental

degradation or regulatory breaches were recorded that necessitated the provision of, or cooperation in, a

remedy.

No actions or action plans relating to material Resource Use and Circular Economy related impacts were

disclosed in prior reporting periods, as this is CSG’s first reporting period under the ESRS framework. As a

result, no quantitative or qualitative progress updates are available at this time. Future reporting periods will

include such disclosures as actions are implemented and progress is monitored in line with ESRS

requirements.

E5-3

2.5.4. Targets Related to Resource Use and

the Circular Economy

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E5_SM_14: Waste Management and Reduction Strategies

 E5_SM_17: Circular Economy Practices

Minimum Disclosure Requirement – Targets Related to Resource Use and the

Circular Economy

CSG has not yet set measurable outcome-oriented targets related to resource use and the circular economy.

At this stage, the focus remains on establishing a robust data foundation and enhancing internal processes

for sustainability reporting, which are essential prerequisites for defining meaningful and achievable targets.

While no specific timeline for setting such targets has yet been determined, CSG anticipates that target-setting

efforts will be developed in alignment with the Group Policy Framework within the next three years.

Despite the absence of formalized targets, CSG monitors the effectiveness of its policies and actions as

described in chapter 2.5.3. (Actions and Resources Related to Resource Use and the Circular Economy) of

this Consolidated Sustainability Statement. As part of its ongoing sustainability strategy, CSG aims to refine

quantitative and qualitative indicators in the future to measure its environmental impact more effectively.

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Further Information on Targets in Relation to Resource Use and the Circular

Economy

Since CSG has not yet established measurable outcome-oriented targets related to resource use and the

circular economy, there are currently no specific targets in place addressing resource efficiency, waste

reduction, recycling initiatives, or the integration of circular-economy principles into CSG’s operations.

E5-5

2.5.5. Resource Outflows

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E5_SM_17: Circular Economy Practices

 E5_SM_14: Waste Management and Reduction Strategies

Products and Materials

Key products emerging from CSG’s production processes include precision-engineered components, heavy

and mid-weight machinery, specialized vehicle systems, ammunition, and defence-related equipment. These

products are designed to meet stringent industry standards and operational requirements. Additionally, the

company produces high-performance parts and fabricated structures, which are essential for transportation,

rail, and industrial applications.

Beyond finished products, CSG's production processes also generate various material by-products, including

metal scraps, industrial polymers, and specialized alloys. While efforts are made to optimize resource

efficiency, certain waste streams, such as non-recyclable composite materials and chemical residues, require

careful handling and disposal in compliance with environmental regulations.

Waste

The waste reporting here integrates data from all companies within the sustainability reporting scope,

irrespective of whether resource outflows were deemed material, because the companies for which the topic

is non-material generate minimal waste. The waste data disclosed for this reporting period has been derived

from internal tracking systems at facility level, supported by historical waste disposal records from previous

reporting years. Where direct data was not available, estimates were made based on production volume and

waste generation ratios observed in comparable periods. Adjustments account for known changes in

operations, such as shifts in output or waste management practices. At the time of reporting, these figures

have not been externally validated by any independent body beyond the assurance provider.

Waste Amounts (Table ID 28)

Category

Amount

(in tons)

Total amount of waste generated

30,939

Waste diverted from disposal

19,904

Hazardous waste

Preparation for reuse

Recycling

249

Other recovery operations

Non-hazardous waste

Preparation for reuse

5,274

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Recycling

14,341

Other recovery operations

Waste directed to disposal

11,035

Hazardous waste

Incineration

333

Landfill

148

Other disposal operations

Non-hazardous waste

Incineration

879

Landfill

9,571

Other disposal operations

104

The total amount of non-recycled waste generated by CSG within the reporting period is 11,035 tons, which

is approximately 36% of the total waste generated.

CSG’s waste composition is primarily affected by the nature of its industrial and manufacturing activities. The

relevant waste streams across its sectors include:

• Metal Waste—Generated from machining, fabrication, and assembly processes, particularly in the

Aerospace, Defence, and Metal Processing sectors.

• Hazardous Waste—Includes chemicals, lubricants, and other industrial substances requiring specialized

disposal, particularly in manufacturing and healthcare operations.

• Electronic Waste (E-Waste)—Arises from IT equipment, obsolete machinery, and electronic components

across various business activities.

• Industrial and Packaging Waste—Comprising wood, plastics, and paper from shipping and production

processes.

The materials present in CSG’s waste streams reflect the composition of its industrial and manufacturing

activities. These include:

• Metals—Generated from machining, fabrication, and assembly processes; these metals include steel,

aluminium, and other alloys.

• Plastics—Found in packaging materials, industrial components, and discarded equipment.

• Textiles—Primarily from protective workwear and industrial fabrics used in production processes.

• Biomass—Arises from wooden pallets and packaging materials.

• Hazardous materials—These include industrial lubricants, solvents, and other regulated substances

requiring specialized disposal.

The total amount of hazardous waste generated by CSG in the reporting period was 730 tons. There was

no radioactive waste.

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E5-6

2.5.6. Anticipated Financial Effects from

Material Resource Use and Circular-

Economy-Related Risks and Opportunities

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 E5_SM_14: Waste Management and Reduction Strategies

 E5_SM_17: Circular Economy Practices

Disclosure of Anticipated Financial Effects from Material Resource Use and

Circular-Economy-Related Risks and Opportunities

In accordance with phase-in provisions, data on the anticipated financial effects from material resource use

and circular-economy-related risks and opportunities has been omitted in this first year of the Consolidated

Sustainability Statement (see Annex 1: List of Phase-in ESRS Data Points in accordance with Appendix C to

ESRS 1). CSG is working to enhance data collection processes, and this information will be incorporated in

next year’s Consolidated Sustainability Statement.

Building on the disclosure in chapter 1.3.3. (Material Impacts, Risks, and Opportunities and Their Interaction

with Strategy and Business Model), CSG has not yet quantified the anticipated financial effects of material

resource use and circular-economy-related risks and opportunities. Future efforts will focus on enhancing

risk-assessment methodologies to improve the integration of climate-related financial impacts into decision-

making and reporting.

3. Social Information

3.1. Own Workforce

Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 3.1. Own Workforce (Table ID 29)

Sustainability Matter

Main Areas of Concern (IROs)

S1_SM_18: Diversity and

Inclusion

Fostering a diverse and inclusive workforce contributes to enhanced creativity,

better decision-making, and a more resilient organizational culture. However,

failing to ensure an inclusive environment may result in reputational challenges

and increased operational costs due to potential labor shortages and retention

difficulties.

S1_SM_19: Employee

Training and

Development

Investing in employee development strengthens organizational capabilities and

ensures workforce adaptability. Insufficient focus on training may lead to skills

mismatches, reduced productivity, higher turnover rates, and difficulty in filling

key roles.

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S1_SM_20: Grievance and

Compliance

Establishing clear grievance channels and compliance mechanisms helps

maintain employee trust, promotes a fair workplace, and minimizes legal

exposure. Inadequate systems can undermine morale, escalate turnover, and

expose the organization to regulatory penalties and talent shortages.

S1_SM_21: Health and

Safety

Prioritizing health and safety fosters a supportive work environment, boosting

employee well-being and operational efficiency. Conversely, weak policies can

result in frequent accidents, higher absenteeism, potential legal claims, and

reputational harm, impacting both workforce stability and financial performance.

S1_SM_22: Human Rights

and Non-Discrimination

Ensuring strong adherence to human rights and non-discrimination principles

strengthens ethical conduct and legal compliance. Failure to uphold these

principles can lead to significant reputational loss, legal liabilities, and erosion of

stakeholder trust.

S1_SM_23: Workforce

Management and Policy

Implementing effective workforce management strategies improves employee

engagement, productivity, and supports regional economic development.

Conversely, poorly designed policies may cause inefficiencies, employee

dissatisfaction, and challenges in attracting and retaining talent.

Workforce Data Methodology and Considerations

The workforce-related figures in this Consolidated Sustainability Statement, including total employee numbers

and workforce composition, are estimates based on available data. Although CSG provided standardized

methodology and definitions, variations in how entities applied these guidelines resulted in inconsistencies

across multiple workforce disclosures. Despite efforts to improve data verification, some discrepancies

remain. CSG recognizes the importance of accurate workforce data and will implement enhanced training and

oversight in future reporting cycles. At the time of reporting, these metrics have not been externally validated

beyond the assurance provider. For a full explanation of the data’s limitations, please refer to the chapter 1.1.

Basis for Preparation.

S1.SBM-3

3.1.1. Material Impacts, Risks, and

Opportunities and Their Interaction with

Strategy and Business Model

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_18: Diversity and Inclusion

 S1_SM_19: Employee Training and Development

 S1_SM_20: Grievance and Compliance

 S1_SM_21: Health and Safety

 S1_SM_22: Human Rights and Non-Discrimination

 S1_SM_23: Workforce Management and Policy

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All People in Undertaking’s Own Workforce Who Can Be Materially Impacted

by Undertaking Are Included in Scope of Disclosure Under ESRS 2

CSG has applied a general approach to assessing material impacts on its own workforce but has not yet

comprehensively included all potentially impacted employees within the scope of its disclosure under ESRS

2. The assessment considers key areas such as diversity and inclusion, employee training and development,

grievance and compliance, health and safety, human rights, and workforce management.

While CSG acknowledges that its activities influence employee well-being, engagement, and retention, as

well as legal and reputational risks associated with human rights and compliance issues, it has not yet

developed a structured framework to assess workforce-related impacts at a granular level. CSG recognizes

both positive and negative impacts: e.g., increased innovation through diverse perspectives, productivity

improvements from effective workforce policies, and enhanced safety measures, but also challenges such

as recruitment difficulties, legal risks from non-compliance, and reputational damage due to perceived lack

of inclusivity. Due to the absence of a standardized methodology for identifying all materially impacted

workforce groups, CSG cannot confirm that its current assessment fully captures the extent of workforce-

related risks and opportunities. However, CSG acknowledges the importance of this issue and is committed

to refining its workforce impact assessment process to ensure more comprehensive and structured reporting

in the future.

Description of Types of Employees and Non-employees in Its Own Workforce

Subject to Material Impacts

CSG has not yet developed a structured approach to categorizing the types of employees and non-employees

in its own workforce who are subject to material impacts. While CSG acknowledges that its workforce is

affected by various factors, including diversity and inclusion, training and development, grievance

mechanisms, health and safety, and workforce management, it has not yet conducted a detailed assessment

to differentiate among specific workforce segments.

At this stage, CSG recognizes that employees across all levels and functions may experience both positive

and negative material impacts. For example, improved diversity and inclusion initiatives can enhance

innovation and engagement, while unclear workforce policies may contribute to inefficiencies or high

employee turnover. Additionally, workers in operational roles—such as those in manufacturing or

production—may be particularly affected by health and safety risks, absenteeism, or disruptions due to

accidents, while those in administrative or managerial roles may experience impacts related to compliance,

training opportunities, and human-capital development.

CSG also acknowledges that non-employees working in outsourced functions or temporary roles could be

exposed to workforce-related risks, such as lower job security, lack of career development opportunities, or

unclear inclusion in grievance and compliance frameworks. However, as there is currently no formalized

segmentation of impacted workforce groups, CSG is unable to provide a comprehensive disclosure on how

different categories of employees and non-employees experience material impacts.

Occurrence of Material Negative Impacts (Own Workforce)

CSG has identified several material negative impacts affecting its own workforce, distinguishing between

those that have already materialized and those that remain potential risks. These impacts primarily relate to

training and development, grievance and compliance, health and safety, human rights, and workforce

management, all of which have implications for employee retention, productivity, workplace well-being, and

overall organizational stability.

Among the potential negative impacts, skill gaps and decreased productivity from insufficient training have

been identified as a workforce challenge. Without structured training programs, inefficiencies may emerge,

requiring sustained efforts to upskill employees and mitigate long-term consequences. Another potential

concern is the impact of unresolved grievances, which can lead to dissatisfaction and high employee turnover,

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affecting workforce stability and requiring significant internal adjustments if left unaddressed. Additionally,

potential risks in health and safety have been noted, particularly regarding absenteeism and lower productivity

due to deficiencies in workplace policies. Ensuring a safe and supportive work environment remains essential,

as disruptions in this area could have far-reaching implications.

In the area of human rights and non-discrimination, CSG recognizes the potential risk of violations, which

could result in legal and reputational consequences. The need for reinforced compliance mechanisms is

evident, as addressing such risks proactively is critical to safeguarding employee rights and ensuring

alignment with ethical and regulatory standards.

In contrast, one actual material impact has already been observed in workforce management policies, where

inefficiencies have led to operational challenges. The consequences of ineffective workforce planning have

thus already materialized, affecting business continuity and highlighting the necessity for improved strategic

workforce policies.

While these negative impacts are acknowledged, CSG has not yet implemented a structured, company-wide

approach to systematically managing them. Moving forward, CSG aims to refine its policies and social

frameworks to strengthen workforce resilience and enhance overall organizational effectiveness.

Description of Activities That Result in Positive Impacts and Types of

Employees and Non-Employees in Undertaking’s Own Workforce That Are

Positively Affected or Could Be Positively Affected

CSG recognizes that certain aspects of its operations contribute to positive impacts on its workforce,

particularly in areas related to diversity and inclusion, workplace well-being, and workforce management.

However, as CSG has not yet developed a formalized overview of specific activities that lead to these

outcomes, it is not in a position to provide detailed disclosures on the actions driving these positive impacts.

While acknowledging the potential benefits arising from efforts to enhance workforce engagement,

productivity, and overall working conditions, CSG does not currently have a structured approach to

systematically assessing or tracking these impacts. Consequently, CSG has decided to omit this information

for the reporting period to ensure transparency and avoid misrepresenting the extent of its progress in this

area.

Description of Material Risks and Opportunities Arising from Impacts and

Dependencies on Undertaking’s Own Workforce

CSG has identified several material risks and opportunities related to its workforce, primarily linked to diversity

and inclusion, employee training and development, grievance and compliance, health and safety, human

rights, and workforce management policies. These factors influence employee retention, engagement,

operational stability, and long-term organizational performance.

Among the material risks, challenges related to diversity and inclusion have been noted, particularly regarding

the potential reputational impact of a perceived lack of inclusivity and increased labor costs due to workforce

shortages. Similarly, in employee training and development, risks include high turnover rates caused by limited

development opportunities and increased costs associated with labor shortages.

Grievance and compliance risks present another area of concern, with potential legal and financial

repercussions if non-compliance issues are not managed effectively. Additionally, workforce-related

inefficiencies can contribute to higher operational costs and employee dissatisfaction, particularly if poor

workforce management practices lead to turnover. Health and safety risks have also been recognized,

including disruptions in manufacturing due to workplace accidents, costs related to absenteeism, and

challenges in maintaining employer attractiveness due to reputational concerns.

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At the same time, several opportunities have been identified as well. Strengthening diversity and inclusion

efforts could enhance CSG’s competitive positioning while also contributing to lower recruitment and hiring

costs through improved employee retention. Investing in training and development could similarly reduce

hiring expenses by enabling the retention of skilled workers. In grievance and compliance, improved

mechanisms and policies could enhance workforce stability and reduce legal and financial risks.

CSG also recognizes opportunities in health and safety, with comprehensive programs and preventive health

measures contributing to higher workforce well-being and productivity. Furthermore, a strong commitment to

human rights and anti-discrimination reinforces CSG’s social capital and reputation, while strategic workforce

management policies offer an opportunity to optimize talent retention and strengthen long-term workforce

stability.

While these risks and opportunities have been identified, CSG is still in the process of developing a structured

approach to systematically managing and tracking them. Moving forward, CSG aims to refine its workforce-

related social frameworks to ensure a balanced approach to mitigating risks and maximizing workforce-

related opportunities.

Description of Material Impacts on Workers That May Arise from Transition

Plans for Reducing Negative Impacts on Environment and Achieving Greener

and Climate-Neutral Operations

CSG has not yet developed a formal transition plan for reducing environmental impacts and achieving greener

and climate-neutral operations. As a result, CSG is currently unable to assess or describe any material impacts

that such a plan might have on its workforce. Without a structured transition strategy, there is no defined

framework for evaluating how shifts toward more sustainable operations may affect employment conditions,

workforce restructuring, skills development, or job security. Additionally, potential opportunities arising from

green initiatives, such as workforce reskilling, health and safety improvements, or enhanced employee

engagement in sustainability efforts, have not yet been formally assessed.

Information About Types of Operations and Countries or Geographic Areas at

Significant Risk of Incidents of Forced Labor or Compulsory Labor

CSG has not identified any specific operations, countries, or geographic areas where its business is

considered at significant risk of incidents of forced or compulsory labor. While the manufacturing sector is

widely acknowledged as an industry where such risks may arise—due to factors such as complex

subcontracting, reliance on external suppliers, and regulatory variations across jurisdictions—CSG has not

conducted a formal assessment to determine whether these risks apply to its own operations.

At this stage, there is no evidence of forced or compulsory labor occurring within CSG’s workforce, and no

operations have been flagged as high-risk in this regard. Similarly, without a structured risk evaluation, CSG

is unable to provide disclosures on specific regions that may present heightened risks.

CSG remains committed to upholding ethical labor standards and ensuring compliance with international

human rights and labor regulations. As part of its broader risk management strategy, CSG aims to enhance its

monitoring and assessment processes to gain a more comprehensive understanding of potential labor-related

risks within its operations and supply chains.

Information About Types and Countries or Geographic Areas of Operations at

Significant Risk of Incidents of Child Labor

CSG has not identified any specific operations, countries, or geographic areas where its business is

considered at significant risk of including incidents of child labor. While certain industries, including

manufacturing, are often associated with higher risks due to supply chain complexities and regulatory

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differences across jurisdictions, CSG has not conducted a formal assessment to determine whether these

risks apply to its own operations.

At present, there is no evidence of child labor occurring within CSG’s workforce, and no operations have been

classified as high-risk in this regard. Similarly, without a structured evaluation, CSG is unable to disclose

specific regions that may present heightened risks.

CSG remains committed to upholding ethical labor standards and ensuring compliance with international

human rights and labor regulations. As part of its broader risk management approach, CSG intends to

strengthen its monitoring and assessment processes to better understand and mitigate any potential risks

related to child labor within its operations and supply chains.

Disclosure of Whether and How an Understanding of People in Undertaking’s

Own Workforce with Particular Characteristics, Working in Particular

Contexts, or Engaged in Particular Activities May Be at Greater Risk of Harm

Has Been Developed

CSG has not yet developed a structured understanding of how individuals within its workforce—based on

specific characteristics, work environments, or job functions—may be at greater risk of harm. While CSG

acknowledges that certain roles, industries, or employment conditions could present varying degrees of risk,

no formal assessment has been conducted to evaluate these factors systematically.

As a result, CSG is currently unable to provide insights into whether specific workforce groups face

heightened exposure to physical, social, or economic risks. Recognizing the importance of this understanding,

CSG aims to integrate a more structured approach in the future, ensuring a comprehensive assessment of

workforce-related risks and implementing targeted measures where necessary.

Disclosure of Which of Material Risks and Opportunities Arising from Impacts

and Dependencies on People in Its Own Workforce Relate to Specific Groups

of People

At this stage, CSG has not identified any material risks or opportunities that specifically relate to distinct groups

within its workforce. While CSG acknowledges that certain risks and opportunities may affect employees

differently depending on their roles, working conditions, or employment status, no structured assessment has

been conducted to distinguish these impacts by specific workforce segments.

As a result, CSG is currently unable to provide a breakdown of workforce-related risks and opportunities in

relation to particular groups. CSG recognizes the importance of developing a more detailed understanding of

how different workforce segments may be affected and aims to refine its assessment approach in the future

to ensure a more targeted and inclusive evaluation.

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3.1.2. Policies Related to Own Workforce

Sustainability Matters Covered in the Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_18: Diversity and Inclusion.

 S1_SM_19: Employee Training and Development.

 S1_SM_20: Grievance and Compliance.

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 S1_SM_21: Health and Safety.

 S1_SM_22: Human Rights and Non-Discrimination.

 S1_SM_23: Workforce Management and Policy.

Disclosure of Policies Adopted to Manage Material Impacts, Risks, and

Opportunities Related to Own Workforce (Including Minimum Disclosure

Requirements)

Group Standards

CSG acknowledges that formalized policies are expected in this context. However, as the transition to the

CSG Policy Framework is still in progress, the Group HR Standards are currently serving as the main

framework guiding human resource management across all Group companies with employees. While not

formalized as policies, these standards establish key principles in areas such as workforce planning,

employee benefits, remuneration structures, HR processes, and internal communication. As CSG develops its

future policies, these standards will serve as a foundation for ensuring consistency across all subsidiaries.

The Group HR Standards provide structured guidance on HR-related matters, covering topics such as

recruitment, contract management, performance evaluation, training and development, workforce monitoring,

and employee well-being. These standards apply to all CSG companies with employees, ensuring a baseline

for HR management across the group. Additionally, a Workplace Code of Conduct exists at the Group level,

though its adoption is not centrally mandated. These documents ensure a degree of alignment across the

Group, though their implementation is currently left to the individual companies.

The Group’s Chief Human Resources Officer (CHRO) is responsible for overseeing and implementing the

Group HR Standards, ensuring that HR principles are communicated and maintained across CSG. While the

CHRO sets overarching HR guidelines, subsidiaries retain discretion over certain aspects of implementation.

The Group HR Standards are developed internally and do not align with third-party initiatives or external

standards. They are tailored specifically to CSG’s governance framework and operational needs.

The development of these standards did not involve a structured consultation process with external

stakeholders. Instead, they were designed internally to provide operational alignment across CSG, rather than

integrating external perspectives. The Group HR Standards are internal documents and are not publicly

available. Access is granted to relevant HR personnel and management across CSG. The Workplace Code of

Conduct follows the same principle, with individual companies determining its application.

CSG has not yet introduced formal group-wide workforce policies, as the company has historically relied on

its Group HR Standards and operational frameworks to manage workforce-related matters. This approach has

prioritized flexibility at the subsidiary level while maintaining core HR principles across the Group. As part of

its governance strategy, CSG plans to introduce formalized workforce-related policies in 2025. These policies

will build upon the existing Group HR Standards, strengthening their consistency and enforcement across all

subsidiaries.

CSG manages material impacts, risks, and opportunities related to its workforce primarily through its Group

HR Standards, which currently serve as the guiding framework during the transition to a formalized CSG Policy

Framework. These standards apply to all CSG companies with employees and cover essential human

resource management areas, including recruitment, performance evaluation, training, employee well-being,

and internal communication. However, their implementation is decentralized, granting subsidiaries flexibility

while ensuring core HR principles are maintained across the Group. Although no formal human rights policies

have been established, the Group HR Standards incorporate essential labor rights considerations. CSG

recognizes that human rights commitments are expected in this context; nonetheless, no structured

consultation with external stakeholders has been conducted in the development of these standards.

While CSG has not yet introduced specific measures to provide or enable remedies for human rights impacts,

the existing grievance mechanisms embedded in the Group HR Standards offer a foundation for addressing

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potential concerns. The Compliance Program, featuring an Ethics Line accessible to all stakeholders, further

supports the reporting and management of workforce-related issues. Despite these provisions, CSG's HR

Standards do not currently fully align with internationally recognized instruments, as they were developed

internally to address governance and operational needs. Additionally, there are no explicit policies in place

addressing human trafficking, forced labor, or child labor—though these areas are expected to be covered in

the future formalized policies.

From a health and safety perspective, although no comprehensive workplace accident prevention policy is

formally in place, the Group HR Standards encourage subsidiaries to implement health and safety programs

tailored to their operations. In terms of diversity and inclusion, the absence of centrally mandated policies

means that specific policies aimed at eliminating discrimination, along with defined grounds for discrimination,

are yet to be formalized. Nevertheless, CSG demonstrates a strong commitment to human rights and an anti-

discrimination stance through its existing standards. Opportunities for enhanced diversity have been

recognized as providing a competitive advantage, while risks such as reputational damage due to perceived

lack of inclusion have been identified as long-term concerns.

CSG acknowledges the need for policy commitments related to inclusion and positive action for groups at

particular risk of vulnerability within its workforce. Although specific procedures to prevent, mitigate, and

address discrimination, as well as to advance diversity and inclusion, are not yet formalized, the planned

introduction of group-wide workforce-related policies in 2025 will build upon existing standards to strengthen

consistency and enforcement across all subsidiaries.

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3.1.3. Processes for Engaging with Own

Workforce and Workers’ Representatives

Regarding Impacts

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_23: Workforce Management and Policy

 S1_SM_22: Human Rights and Non-Discrimination

Disclosure of Whether and How Perspectives of Own Workforce Inform

Decisions or Activities Aimed at Managing Actual and Potential Impacts

To date, CSG has not established a structured process for systematically integrating workforce perspectives

into the identification, assessment, or management of actual and potential impacts. While workforce insights

are recognized as an important factor in shaping responsible business practices, no formalized mechanisms

currently exist to incorporate employee input into decision-making on these matters.

The only engagement conducted in 2024 in relation to workforce impact identification occurred as part of the

double materiality assessment, during which the identification and assessment of actual and potential impacts

were discussed with the top management of all the companies included in the reporting scope. This process

primarily involved CEOs or their equivalent persons, ensuring a high-level strategic review of material impacts,

but it did not extend to active impact management or broader workforce involvement.

CSG recognizes the value of systematically engaging its workforce in this process and intends to develop a

more structured approach in the future to ensure that workforce perspectives are appropriately considered in

the identification and management of material risks and opportunities.

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S1-3

3.1.4. Processes to Remediate Negative

Impacts and Channels for Own Workforce

to Raise Concerns

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_20: Grievance and Compliance.

Disclosure of General Approach to and Processes for Providing or

Contributing to Remedy Where Undertaking Has Caused or Contributed to a

Material Negative Impact on People in Its Own Workforce

Although potential material negative impacts related to grievances and compliance have been identified—

such as legal and financial repercussions from non-compliance and increased costs due to labor shortages—

CSG currently does not provide or contribute to specific remedy mechanisms. This is primarily because the

workforce has not yet been involved in the formal assessment of impacts, risks, and opportunities (IROs).

While acknowledging the relevance of these identified risks, CSG considers them a low priority at this stage,

because the Group has an established, company-wide whistleblowing and ethics hotline, known as the Ethics

Line. This channel is accessible to all internal stakeholders, including employees, providing a mechanism for

raising concerns until a more comprehensive approach is developed. The opportunity to strengthen grievance

mechanisms and policies has been recognized and remains under consideration.

Disclosure of Specific Channels in Place for Its Own Workforce to Raise

Concerns or Needs Directly with Undertaking and Have Them Addressed

CSG has a comprehensive Compliance Program that outlines the Group’s approach to ethics and integrity,

including mechanisms for raising concerns. The Program details the availability of the company-wide Ethics

Line, which is accessible to all internal stakeholders, including the entire workforce. This platform ensures

employees can report concerns safely and securely.

Grievance or Complaints Handling Mechanisms Related to Employee Matters

Exist

Grievance and complaints handling mechanisms exist through the Group-wide Ethics Line. The Ethics Line

allows employees to report concerns related to compliance, labor conditions, and workplace issues.

Recognized opportunities such as strengthening grievance mechanisms have been identified and are

expected to lower recruitment and hiring costs if more employees can be retained because of them.

Disclosure of Processes Through Which Undertaking Supports or Requires

Availability of Channels

CSG ensures maximum transparency and accessibility by providing unrestricted access to its Ethics Line for

all internal stakeholders. This comprehensive reporting channel facilitates the secure and confidential

submission of complaints and concerns through multiple formats, including online platforms, telephone

communication, and email correspondence.

Disclosure of How Issues Raised and Addressed Are Tracked and Monitored

and How Effectiveness of Channels Is Ensured

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Issues raised through CSG’s Ethics Line are tracked and monitored using the same approach applied to all

concerns submitted via this channel. Each case is managed individually, as a unified approach to handling

such matters has not yet been established. For the 2024 reporting period, no instances related to own

workforce were reported. The Compliance Department monitors the effectiveness of the Compliance

Program.

Disclosure of Whether and How It Is Assessed That Its Own Workforce Is

Aware of and Trust Structures or Processes as Way to Raise Their Concerns

or Needs and Have Them Addressed

No formal assessment has been conducted to determine whether employees are aware of and trust the

existing structures or processes in place to raise concerns. However, CSG’s Ethics Line is publicly available

on internal communication platforms and accessible to all employees, providing an open and secure channel

for submitting concerns. As part of the identified opportunities, CSG is considering methods to strengthen

these grievance mechanisms further.

Policies Regarding Protection Against Retaliation for Individuals That Use

Channels to Raise Concerns or Needs Are in Place

CSG has established robust policies to protect employees from retaliation when these employees are using

available channels to raise concerns. In line with the Group’s Whistleblowing Policy, CSG maintains a zero-

tolerance approach to any form of retaliation against whistleblowers or other protected persons. Protections

extend to employees who report concerns to relevant public authorities in accordance with applicable national

laws or European Union regulations. All allegations of retaliation are treated with the utmost seriousness and

are managed consistently across the Group. Suspicions of retaliation can be reported through CSG’s internal

information system using the designated contacts provided in the Whistleblowing Policy.

S1-4

3.1.5. Taking Action on Material Impacts

on Own Workforce

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_18: Diversity and Inclusion

 S1_SM_19: Employee Training and Development

 S1_SM_20: Grievance and Compliance

 S1_SM_21: Health and Safety

 S1_SM_22: Human Rights and Non-Discrimination

 S1_SM_23: Workforce Management and Policy

Minimum Disclosure Requirement – Actions and Resources in Relation to Own

Workforce

Group Standards

CSG’s approach to managing matters related to its own workforce is currently guided by the Group HR

Standards. These standards are overseen by the Group Chief Human Resources Officer (CHRO), ensuring

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consistent communication and application across CSG. Since the implementation of these standards, no

additional periodic follow-up actions have been required, as the framework has proven sufficient for

maintaining operational alignment and addressing internal workforce-related matters. However, it is

recognized that these standards do not fully align with internationally recognized instruments and were

developed without structured consultation with external stakeholders.

Group Policy Framework

As part of the upcoming Group Policy Framework, CSG plans to replace the existing Group HR Standards

with comprehensive, formalized workforce-related policies. These new policies will enhance governance

and accountability across all subsidiaries and address critical areas currently lacking formal procedures. The

upcoming framework will include structured commitments to human rights, explicit policies addressing

human trafficking, forced labor, child labor, diversity, inclusion, and health and safety.

The formalized workforce-related policies will standardize processes for recruitment, contract management,

performance evaluation, and employee development while introducing systematic risk assessments, ethics

training, whistleblowing mechanisms, and anti-discrimination measures. This transition aims to strengthen

consistency and enforcement across all subsidiaries while enhancing stakeholder trust and corporate

responsibility. The adoption of the new policies is scheduled for 2025, with internal alignment, data collection

capabilities, and regulatory developments being key assumptions for successful implementation.

Importantly, the transition is not expected to require significant operational (OpEx) or capital (CapEx)

expenditures. Currently, no specific actions have been taken to provide remedies for those harmed by actual

material impacts.

Further Information on Actions and Resources in Relation to Own Workforce

CSG has not yet implemented a structured Group-wide approach or allocated dedicated resources for

managing workforce-related impacts beyond the existing Group HR Standards. The decentralized

implementation of these standards has provided operational flexibility at the subsidiary level while

maintaining core HR principles across the Group. However, the absence of standardized procedures

prevents CSG from providing disclosures on key aspects, including actions taken or planned to mitigate or

remediate material negative impacts, efforts to enable remedies, and initiatives aimed at delivering positive

workforce outcomes.

Furthermore, CSG is currently unable to report on the tracking and assessment of the effectiveness of its

workforce management practices, processes for identifying appropriate actions, or approaches to ensuring

access to remedies. The company also cannot disclose whether and how it ensures that its practices do not

cause or contribute to material negative impacts or severe human rights issues related to its workforce. CSG

acknowledges these gaps and remains committed to introducing the formalized Group Policy Framework in

2025, which will build upon existing standards to enhance consistency, governance, and future disclosures.

S1-5

3.1.6. Targets Related to Own Workforce

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_18: Diversity and Inclusion

 S1_SM_19: Employee Training and Development

 S1_SM_20: Grievance and Compliance

 S1_SM_21: Health and Safety

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 S1_SM_22: Human Rights and Non-Discrimination

 S1_SM_23: Workforce Management and Policy

Minimum Disclosure Requirement – Targets Related to Own Workforce

CSG has not yet set measurable outcome-oriented targets related to its own workforce. At this stage, the

primary focus remains on strengthening the internal data infrastructure and refining processes for

sustainability reporting. These foundational efforts are considered essential for defining meaningful and

achievable targets that align with CSG’s strategic objectives. Although a specific timeline for establishing these

targets has not been determined, CSG anticipates that target-setting initiatives will be developed in line with

the Group Policy Framework within the next three years.

Despite the absence of formalized targets, CSG actively monitors the effectiveness of its workforce-related

policies and actions, as outlined in chapter 3.1.5. (Taking Action on Material Impacts on Own Workforce) of

this Consolidated Sustainability Statement. These monitoring activities ensure that workforce management

practices remain consistent with CSG’s broader sustainability strategy. As part of its long-term commitment

to sustainability, CSG plans to enhance both quantitative and qualitative indicators in the future to better

measure its social impact on its workforce.

Further Information on Targets in Relation to Own Workforce

Since CSG has not yet established measurable outcome-oriented targets related to its own workforce, there

are currently no specific targets addressing areas such as employee retention, diversity and inclusion,

training and development, workplace safety, or employee satisfaction. However, as CSG continues to refine

its sustainability reporting processes, the development of these targets will become a key focus used for

supporting long-term workforce engagement and performance goals.

S1-6

3.1.7. Characteristics of CSG's employees

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_23: Workforce Management and Policy

 S1_SM_18: Diversity and Inclusion

Number of Employees

Employee Headcount by Gender (Table ID 30)

Gender

Number of employees (head count)

Male

9466

Female

3371

Other

Not reported

Total employees

12855

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Disclosure of Cross-Reference of Information Reported in Financial

Statements

The information on the number of employees reported under paragraph 50 (a) of Directive (EU) 2022/2464

of the European Parliament and of the Council corresponds to figures presented in financial statements

incorporated by reference section Consolidated Financial Statements, Note 11. Employee Benefits Costs of

this Consolidated Sustainability Statement .

The discrepancy in the overall number of employees between the financial consolidated statement and the

Consolidated Sustainability Statement arises from a difference in the scope of employee counting. While the

financial consolidation excludes companies in which there is no equity interest or which are not

consolidated, namely Milconn, a.s., TATRA EXPORT s.r.o., TATRA METALURGIE a.s., TATRA TRUCKS a.s.,

VÝVOJ Martin, a.s., and ReDat Recording, a.s., the sustainability consolidation includes employees from

these companies as well.

Average Number of Employees

The above table presents the number of employees at the end of the reporting period. CSG does not report

average employee figures—which would reflect workforce fluctuations throughout the reporting period—as

this data is not currently collected.

Number of Employees in Countries with 50 or More Employees Representing

at Least 10% of Total Number of Employees

Employee Headcount by Country (Table ID 31)

Country

Number of Employees (head count)

Czech Republic

5377

Slovakia

1605

United States of America

3772

Average Number of Employees in Countries with 50 or more Employees

representing at least 10% of total number of employees

CSG reports the total number of employees by country for those countries in which the workforce represents

more than 10% of CSG’s total workforce. However, average employee figures by country—which would

capture workforce fluctuations during the reporting period—are not provided, as CSG does not currently

collect this data.

Information on Employees by Contract Type and Gender (Table ID 32)

2024

Head count / FTE

Female

Male

Other

(*)

Not

disclosed

Number of employees

3371

9466

Number of permanent employees

2747

8088

Number of temporary employees

368

1057

Number of non-guaranteed hours employees

125

Not reported

234

196

(*) Gender as specified by the employees themselves.

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"Not reported" refers to cases where employee gender data was not provided or categorized, meaning the

individuals did not disclose their gender or the information was unavailable at the time of reporting.

Information on Employees by Region (Table ID 33)

2024

Head count / FTE

Asia

Europe

North America

Number of employees

9025

3776

Number of employees Who Have Left and Percentage of Employee Turnover

During the reporting period, a total of 1,638 employees left the undertaking. The employee turnover rate for

the group was 12.7%, calculated by dividing the total number of employees who left—whether voluntarily or

due to dismissal, retirement, or death in service—by the total number of employees at the end of the

reporting period.

Description of methodologies and assumptions used to compile data

(employees)

During the reporting period, companies within CSG used a variety of methodologies to compile employee

data. The most commonly applied method, used by 81.1% of CSG’s companies, was the analysis of internal

HR databases. Surveys conducted with employees accounted for 11.3%, while 9.4% relied on employee self-

reporting through HR portals. Observation and manual tracking by HR staff were used by 13.2% of the

companies. Data collected from exit interviews represented 1.9%. Government or regulatory reporting and

other methodologies were each used by 9.4% of the companies.

The large companies primarily relied on internal HR database analysis (95.8%), with a smaller proportion

using surveys (20.8%). Medium-sized companies also favored internal HR data (90.9%). Small companies

showed lower reliance on this method (55.6%) and a greater use of observation and manual tracking

(22.2%) than medium and large companies. The Aerospace, Automotive, and Defence sectors showed a

strong preference for internal HR database analysis, with Defence additionally utilizing surveys (15.8%) and

observation methods (26.3%).

Employee Numbers Reported using Head Count or FTE

CSG uses headcount as its foundation for compiling employee data. The headcount is defined as the total

number of individuals employed by a company at the end of the reporting period.

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3.1.8. Characteristics of Non-employees

in Undertaking’s Own Workforce

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_23: Workforce Management and Policy.

Description of Key Characteristics of Non-Employees in Own Workforce

Total Number of Non-Employees in Own workforce, at End of Period

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At the end of the reporting period, the total number of non-employees in CSG’s own workforce was 973. This

figure included all the individuals who were not directly employed by CSG but contributed to its operations,

such as temporary workers, independent contractors, and other external personnel engaged in work-related

activities.

Total Number of Non-Employees in Own Workforce Who Were Self-Employed Persons, at End of Period

At the end of the reporting period, CSG’s own workforce included 261 self-employed individuals.

Total Number of Non-Employees in Own Workforce Who Were Persons Provided by Undertakings Primarily

Engaged in Employment Activities, at End of Period

At the end of the reporting period, CSG’s own workforce included 699 individuals provided by undertakings

primarily engaged in employment activities. Although they work under the direction of CSG, these persons

are employed by external entities responsible for their employment contracts and related obligations.

Description of Methodologies and Assumptions Used to Compile Data (Non-

Employees)

Methodology for Measurement of Non-Employee Data

During the reporting period, companies within CSG applied a variety of methodologies to measure non-

employee data. The most commonly used method was cross-referencing of non-employee data with internal

HR or procurement systems, applied by 20.8% of companies. The use of external contractor or freelancer

payroll records accounted for 15.1%, while 9.4% of the companies relied on surveys or self-reporting by non-

employees. Data aggregation from third-party staffing agencies or platforms was used by 7.6% of the

companies. Tracking of hours or output via project management tools accounted for 9.4%, and methodologies

for identifying and categorizing non-employees by role or function were used by 5.7%. Other methodologies

represented 45.3% of responses.

A look at size-specific insights shows that the medium-sized companies reported the highest reliance on

external contractor payroll records at 36.4% apart from other methodologies (45.5%). The large companies

demonstrated a balanced approach, with 16.7% using payroll records and third-party data aggregation, and

20.8% relying on cross-referencing with internal systems. Small companies showed a preference for

observation-based methodologies, with 22.2% tracking hours or output. Sector-specific insights indicate that

companies in the Aerospace sector primarily used cross-referencing with internal HR or procurement systems

(66.7%), while those in the Defence sector adopted a more diversified approach, employing surveys, internal-

system cross-referencing, and project-management tracking.

Non-Employee Numbers Reported Using Headcount or FTE

CSG uses headcount as the basis for compiling non-employee data. The headcount is defined as the total

number of individuals at the end of the reporting period.

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3.1.9. Collective Bargaining Coverage and

Social Dialogue

Sustainability matters in topical ESRS

This chapter relates to the sustainability matter S1_SM_23: Workforce Management and Policy.

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Percentage of total employees covered by collective bargaining agreements

At the end of the reporting period, 35% of the total employees within CSG were covered by collective

bargaining agreements. This percentage was calculated by dividing the number of employees covered by

collective bargaining agreements by the total number of employees.

Percentage of own employees covered by collective bargaining agreements

are within coverage rate by country with significant employment (in the EEA)

At the end of the reporting period, 41.1% of CSG's own employees in the Czech Republic and 59.2% in

Slovakia, in countries within the European Economic Area (EEA) with significant employment, were covered

by collective bargaining agreements. Significant employment is defined as having at least 50 employees by

headcount, representing at least 10% of CSG's total number of employees. The percentage represents the

overall share of employees covered by one or more collective bargaining agreements in each of these

countries.

To determine the coverage rate, the total number of employees in Slovakia and the Czech Republic was

divided by the number of those covered by collective bargaining agreements. At the end of the reporting

period, there were 5,665 employees in the Czech Republic and 1,701 in Slovakia.

Percentage of own employees covered by collective bargaining agreements

(outside EEA) by region

At the end of the reporting period, 1.0% of CSG's own employees outside the European Economic Area (EEA)

were covered by collective bargaining agreements. This percentage represents the overall share of

employees covered by such agreements across the different regions where CSG operates outside the EEA.

At the end of the reporting period, there were 38 employees in the United Kingdom, with a coverage rate of

100%.

Percentage of employees in country with significant employment (in the EEA)

covered by workers' representatives

For the current reporting period, CSG has made its best efforts to collect data on the percentage of employees

in countries with significant employment within the European Economic Area (EEA) covered by workers'

representatives. However, due to limitations in ensuring the reliability of the collected data, CSG is unable to

report this information for this reporting period.

Disclosure of existence of any agreement with employees for representation

by European Works Council (EWC), Societas Europaea (SE) Works Council, or

Societas Cooperativa Europaea (SCE) Works Council

For the current reporting period, none of the companies within CSG have agreements in place with European

Works Councils (EWC), Societas Europaea (SE) Works Councils, or Societas Cooperativa Europaea (SCE)

Works Councils.

Collective bargaining coverage and social dialogue (Table ID 34)

Coverage Rate

Employees – EEA

(for countries with >50 empl.

representing >10% total empl.)

Employees – Non-EEA

(estimate for regions with >50 empl.

representing >10% total empl.)

Workplace representation

(EEA only)

(for countries with >50 empl.

representing >10% total empl.)

0-19%

Slovakia

N/A

20-39%

N/A

40-59%

Czech Republic

N/A

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60-79%

N/A

80-100%

N/A

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3.1.10. Diversity Metrics

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_18: Diversity and Inclusion

 S1_SM_23: Workforce Management and Policy

Gender Distribution in Number of Employees (Headcount) and Percentage in

Top Management Level

Gender Distribution as Headcount and Percentage at Top Management Level (Table ID 35)

Female

Male

Headcount

254

Percentage

21%

79%

Distribution of Employees (Headcount) by Age Group (Table ID 36)

Under 30 Years Old

Between 30 and 50

Years Old

Over 50 Years Old

Not

Reported

Headcount

2,128

6,455

3,941

330

“Not reported" refers to cases where employee age group data was not provided or categorized, meaning

the individuals did not disclose their age or the information was unavailable at the time of reporting.

Disclosure of Own Definitions of Top Management Used

During the reporting period, the companies within CSG defined “top management” using a variety of criteria.

The most common definition was “senior executives and C-suite roles, such as CEO, CFO, and COO”; it was

used by 67.9% of the companies. The definition “heads of departments or divisions” accounted for 15.1%,

while 1.9% of the companies identified top management as “individuals one or two levels below administrative

and supervisory bodies.” Additionally, 20.8% of the companies defined it as “all employees with decision-

making authority at the organizational level.”

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3.1.11. Adequate Wages

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_23: Workforce Management and Policy.

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Companies within CSG have indicated that they remunerate employees in accordance with applicable wage

benchmarks in compliance with national legislation, and thus, all employees and non-employees are paid

adequate wages in line with applicable benchmarks. CSG ensures that all employees across its countries of

operation receive compensation aligned with applicable adequate-wage benchmarks, resulting in 0% of

employees earning below this standard.

S1-11

3.1.12. Social Protection

Sustainability Matters in Topical ESRS

This chapter relates to sustainability matter S1_SM_21: Health and Safety.

Social Protection Against Loss of Income Due to Sickness

At the end of the reporting period, 99.8% of the employees within CSG were covered by social protection,

either through public programs or company-offered benefits, against loss of income due to sickness. The

remaining 0.2%, representing 25 employees across the entire Group, are not covered in this regard. All

employees not covered are located outside the European Economic Area (EEA).

Social Protection Against Loss of Income Due to Unemployment

At the end of the reporting period, 77.6% of the employees within CSG were covered by social protection,

either through public programs or company-offered benefits, against loss of income due to unemployment

starting from the commencement of their employment with the undertaking. The remaining 22.4% of

employees, who are not covered, are all located outside the EEA.

Social Protection Against Loss of Income Due to Employment Injury and

Acquired Disability

At the end of the reporting period, 100% of the employees within CSG were covered by social protection

against loss of income due to employment injury and acquired disability. This protection was provided through

either public programs or benefits offered by the company.

Social Protection Against Loss of Income Due to Parental Leave

At the end of the reporting period, 72.4% of employees within CSG were covered by social protection against

loss of income due to parental leave. This protection was provided through either public programs or benefits

offered by the company. The remaining 27.6% of employees who were not covered are all located outside

the EEA.

Social Protection Against Loss of Income Due to Retirement

At the end of the reporting period, 100% of employees within CSG were covered by social protection, either

through public programs or benefits offered by the company, against loss of income due to retirement. All

companies within the group confirmed that this protection is provided.

Types of Employees Who Are Not Covered by Social Protection

While CSG is able to report percentage and region data on employees who are not covered by the various

social protections described, there is insufficient data available to disaggregate this information by type of

employee for the current reporting period. As this is the first year of the Consolidated Sustainability Statement,

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the disclosure is omitted in accordance with the phase-in provisions (see Annex 1: List of Phase-in ESRS Data

Points in accordance with Appendix C to ESRS 1). Efforts are underway to enhance data collection, and this

information will be included in the next reporting cycle.

S1-12

3.1.13. Persons with Disabilities

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_18: Diversity and Inclusion.

Percentage of Persons with Disabilities Among Employees

At the end of the reporting period, persons with disabilities represented 2.4% of the total employee workforce

within CSG.

Contextual Information Necessary to Understand Data and How Data Has

Been Compiled (for Persons with Disabilities)

The companies within CSG applied a variety of definitions and methodologies when compiling data related to

persons with disabilities. The predominant approach was to use the definitions outlined in national legislation

in each country of operation. Some entities applied the definition provided by the UN Convention on the Rights

of Persons with Disabilities (CRPD), while others used a combination of legal and functional definitions tailored

to specific operational contexts. A few companies adopted other definitions, including definitions aligned with

internal diversity and inclusion policies. In terms of data collection methodologies, most of the companies

relied on government-mandated reporting systems where applicable. Other commonly used methods

included the leveraging of external certifications or government-recognized disability registries, the use of

third-party assessments in line with country-specific definitions, and the conducting of self-identification

surveys with optional disclosure by employees. In some cases, data was not collected due to legal or cultural

restrictions in specific regions. It is a future ambition for CSG to unify the application of these definitions and

methodologies across the Group to ensure consistency and comparability in reporting.

S1-13

3.1.14. Training and Skills Development

Metrics

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_19: Employee Training and Development.

Training and Skills-Development Indicators

While CSG has access to partial data on training and skills development, the available information does not

provide sufficient clarity for the required gender breakdown. As a result, CSG is unable to disclose these

indicators for the current reporting period. In line with its commitment to accurate and consistent reporting,

CSG has chosen to withhold this disclosure until more comprehensive and reliable data has been secured. In

accordance with phase-in provisions, this data has been omitted in this first year of the Consolidated

Sustainability Statement (see Annex 1: List of Phase-in ESRS Data Points in accordance with Appendix C to

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ESRS 1). CSG is working to enhance data collection processes, and this information will be incorporated in

next year’s Consolidated Sustainability Statement.

Percentage of Employees That Participated in Regular Performance and

Career Development Reviews

While some data is available, CSG cannot provide a definitive percentage for this reporting period. This is due

to the absence of a unified definition of performance and career development reviews across the group. In

line with applicable reporting provisions, this disclosure has been omitted in this first year of the Consolidated

Sustainability Statement. Consequently, to maintain reporting accuracy and consistency, CSG has opted not

to disclose this information for the current reporting period.

Average Number of Training Hours by Gender and per Person

Although partial data exists, CSG is unable to disclose the average number of training hours by gender and

per employee for this reporting period. In accordance with phase-in provisions, data on the average number

of training hours by gender and average number of training hours per person has been omitted in this first

year of the Consolidated Sustainability Statement (see Annex 1: List of Phase-in ESRS Data Points in

accordance with Appendix C to ESRS 1). CSG is working to enhance data collection processes, and this

information will be incorporated in next year’s Consolidated Sustainability Statement.

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3.1.15. Health and Safety Metrics

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_21: Health and Safety.

Percentage of People in Own Workforce Who Are Covered by Health and

Safety Management System Based on Legal Requirements and (or)

Recognized Standards or Guidelines

CSG confirms that 100% of its own workforce is covered by a health and safety management system. These

systems are implemented in accordance with applicable legal requirements and recognized standards or

guidelines, ensuring a consistent approach to health and safety management across all group operations.

Number of Fatalities in Own Workforce as Result of Work-Related Injuries and

Work-Related Ill Health

During the reporting period, there were no fatalities in CSG’s own workforce resulting from work-related

injuries or work-related ill health.

Number of Fatalities as Result of Work-Related Injuries and Work-Related Ill

Health of Other Workers Working on Undertaking’s Sites

During the reporting period, there were no fatalities among other workers operating on CSG’s sites due to

work-related injuries or ill health.

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Number of Recordable Work-Related Accidents

During the reporting period, CSG recorded a total of 323 work-related accidents across its operations. Large

companies within the Group accounted for 281 cases, while medium and small companies reported 38 and 4

cases respectively. Sector-specific data indicates that the Defence sector reported the highest number of

cases, with 193 incidents, followed by Metal Processing with 47 cases and Rolling Stock with 35 cases. The

Aerospace and Automotive sectors recorded 19 and 25 cases respectively. The Professional & Commercial

Services and Health Care sectors each experienced 2 work-related accidents, and the other sectors, including

Software, Textiles, Wholesale & Retail Trade, and Apparels, Footwear, & Accessories, reported no work-

related accidents during this period.

Definition of Work-Related Accidents

CSG defines a work-related accident as an incident causing injury or ill health due to workplace hazards or

work-related activities, including travel and remote work when directly tied to job tasks. It excludes medical

events unrelated to work, personal commuting injuries (unless employer-organized), and health conditions

from lifestyle factors. Occupational diseases are classified as work-related ill health but not as work-related

injuries. As CSG operates across multiple jurisdictions, this definition is not based on national legislation in any

specific country, and its approach may be further refined in future reporting cycles.

Rate of Recordable Work-Related Accidents

At the end of the reporting period, CSG recorded a rate of 16.36 work-related accidents per one million hours

worked. This calculation follows the prescribed methodology, which requires the total number of hours

worked by the workforce to determine the rate.

Number of Cases of Recordable Work-Related Ill Health

During the reporting period, CSG recorded 43 cases of work-related ill health within its own workforce. These

cases were documented in line with local legal obligations to ensure consistency across all Group companies.

Definition of Work-Related Ill Health

CSG defines work-related ill health as acute, recurring, or chronic conditions caused or worsened by

workplace conditions, including musculoskeletal disorders, respiratory diseases, occupational cancers, and

mental illnesses linked to work factors. Since this definition applies internationally, it does not adhere to any

single country’s legal framework, and adjustments may be considered in future reporting cycles.

Number of Days Lost to Work-Related Injuries and Fatalities from Work-

Related Accidents, Work-Related Ill Health and Fatalities from Ill Health

A total of 7,818 days were lost across CSG’s operations due to work-related injuries, work-related ill health,

and fatalities resulting from ill health during the reporting period.

S1-15

3.1.16. Work-Life Balance Metrics

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S1_SM_23: Workforce Management and Policy.

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Percentage of Employees Entitled to Take Family-Related Leave

At the end of the reporting period, 85.7% of employees within CSG were entitled to take family-related leave

in accordance with applicable regulations and company policies.

Percentage of Entitled Employees That Took Family-Related Leave

Of the employees entitled to family-related leave, 3.3% exercised this entitlement during this reporting period.

In accordance with phase-in provisions, data on the percentage of entitled employees who took family-

related leave by gender has been omitted in this first year of the Consolidated Sustainability Statement (see

Annex 1: List of Phase-in ESRS Data Points in accordance with Appendix C to ESRS 1). CSG is working to

enhance data collection processes, and this information will be incorporated in next year’s Consolidated

Sustainability Statement.

S1-16

3.1.17. Remuneration Metrics (Pay Gap and

Total Remuneration)

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_18: Diversity and Inclusion

 S1_SM_23: Workforce Management and Policy

Gender Pay Gap

The gender pay gap within CSG for the reporting period was 24.7%. This figure was calculated using the pre-

defined methodology, which requires the inclusion of all employees’ gross hourly pay levels. The gender pay

gap is calculated by subtracting the average gross hourly pay level of female employees from that of male

employees, dividing the result by the average gross hourly pay level of male employees, and multiplying by

100.

To determine the Group-level figure, the average gross hourly pay gap was first calculated individually for

each company within CSG. Subsequently, these company-level averages were consolidated by calculating

the overall average across all of CSG’s companies, resulting in a single figure representing the gender pay

gap at the Group level.

Annual Remuneration Ratio

The annual remuneration ratio within CSG for the reporting period is 6.89:1. This ratio was calculated using

the inclusion of all employees and considers total annual remuneration, including base salary, benefits in cash,

benefits in kind, and the total fair value of long-term incentives such as stock options and performance shares.

The ratio was determined by dividing the total annual remuneration of the undertaking’s highest-paid

individual by the median annual total remuneration of all employees, excluding the highest-paid individual. To

arrive at the Group-level figure, the ratio was first calculated individually for each company within CSG.

Subsequently, these company-level ratios were consolidated by calculating the average across all

companies, resulting in a single Group-wide ratio of 6.89:1.

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Contextual Information Necessary to Understand Data, How Data Has Been

Compiled and Other Changes to Underlying Data That Are to Be Considered

During the reporting period, the companies within CSG used a range of methodologies to compile employee

data. The most frequently applied method was the use of HR records and systems; it was chosen by 79.3%

of the companies. Employee self-identification was used by 15.1% of the companies, while 9.4% relied on a

combination of methods. Additionally, 13.2% of the companies reported using other methods.

S1-17

3.1.18. Incidents, Complaints, and

Severe Human Rights Impacts

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S1_SM_20: Grievance and Compliance

 S1_SM_22: Human Rights and Non-Discrimination

Number of Incidents of Discrimination

During the reporting period, CSG recorded three incidents of discrimination within its operations, all of which

occurred in the United States.

Number of Complaints Filed Through Channels for People to Raise Concerns

A total of 64 complaints were filed through designated internal channels by employees within CSG’s workforce

during the reporting period.

Number of Complaints Filed to National Contact Points for OECD Multinational

Enterprises

Two complaints related to CSG’s operations were filed with National Contact Points for OECD Multinational

Enterprises.

Total Amount of Fines, Penalties, and Compensation for Damages as Result of

Incidents and Complaints

The total fines, penalties, and compensation for damages resulting from the reported incidents and complaints

during the reporting period amounted to EUR 41,003.57. This amount was logged in the financial statements

under a single cost centre within the respective company’s accounting records, ensuring clear financial

tracking and reconciliation.

Contextual Information Necessary to Understand Data and How Data Has

Been Compiled

CSG does not currently have sufficient contextual information available to provide a comprehensive

understanding of how data related to incidents, complaints, and severe human rights impacts has been

compiled. Efforts will be made to enhance data collection processes so as to enable more detailed reporting

in future periods.

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Number of Severe Human Rights Incidents

CSG confirms that no severe human rights incidents connected to its own workforce were recorded during

this reporting period.

Number of Severe Human Rights Incidents Connected to Own Workforce That

Are Non-respect of Un Guiding Principles on Business and Human Rights, ILO

Declaration on Fundamental Principles and Rights at Work or OECD Guidelines

for Multinational Enterprises

No incidents of non-respect related to the UN Guiding Principles on Business and Human Rights, the ILO

Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational

Enterprises were reported during the reporting period.

Total Amount of Fines, Penalties, and Compensation for Damages for Severe

Human Rights Incidents

No fines, penalties, or compensation for damages were recorded in connection with severe human rights

incidents within CSG’s own workforce.

3.2. Affected Communities

Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 3.2. Affected Communities (Table ID 37)

Sustainability Matter

Main Areas of Concern (IROs)

S3_SM_29 Community

Engagement

Maintaining continuous engagement and open dialogue with local communities

strengthens relationships, reduces the risk of social unrest, and helps align

business practices with community expectations. Lack of proper engagement

may lead to long-term reputational harm.

S3_SM_30 Community

Grievance and

Compliance

Effective grievance mechanisms and compliance practices foster improved

community relations and increase local support. Failure to address community

concerns may result in loss of trust, persistent conflicts, and potential decreases

in sales and market support.

S3_SM_31 Community

Management and Policy

Establishing clear and consistent community management policies ensures

smooth community relations and regulatory alignment. Poor policy

implementation can lead to dissatisfaction among communities, resulting in

reputational damage.

S3.SBM-3

3.2.1. General Disclosures Related to

Affected Communities

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Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S3_SM_29: Community Engagement

 S3_SM_30: Community Grievance and Compliance

 S3_SM_31: Community Management and Policy

All Affected Communities That Can Be Materially Impacted by Undertaking

Are Included in Scope of Disclosure Under ESRS 2

CSG acknowledges that while a general approach has been applied in identifying affected communities likely

to be materially impacted by its operations, value chain, products, services, and business relationships, not

all affected communities have been comprehensively included in the current scope of disclosure under ESRS

2. CSG’s assessment was conducted based on the available data, and it prioritized key areas of impact, risk,

and opportunity, focusing on engagement, grievance mechanisms, compliance risks, and policy

implementation. CSG is currently engaging in efforts to enhance the identification process and expand

coverage to ensure a more complete representation of materially affected communities in future reporting

cycles.

Description of Types of Affected Communities Subject to Material Impacts

and Types of Communities Subject to Material Impacts by Own Operations or

Through Value Chain

CSG has applied a general approach to assessing affected communities but has not identified specific

communities subject to material impacts at this stage. However, CSG acknowledges that its operations and

downstream activities influence community relations, stakeholder trust, and potential conflicts. The

assessment highlights that community engagement plays a crucial role in shaping these interactions, with

positive effects observed in strengthened relationships and trust, while potential risks include resistance to

company activities and social unrest due to a lack of engagement.

In the area of grievance and compliance, the undertaking recognizes that community conflicts may arise, with

reputational risks associated with unresolved grievances. At the same time, there are opportunities to enhance

governance and compliance by establishing transparent and accessible grievance-handling mechanisms that

support long-term stability and trust in affected areas.

The identification of specific communities remains an area for further development. Future steps may involve

refining data-collection methodologies, conducting targeted stakeholder consultations, and improving impact

mapping to enhance the precision of disclosures under this chapter.

Description of Material Risks and Opportunities Arising from Impacts and

Dependencies on Affected Communities

CSG acknowledges that its downstream activities present both material risks and opportunities arising from

its interactions with affected communities. Risks primarily stem from potential resistance to company activities,

which could lead to social unrest, legal challenges, and reputational damage. A lack of effective engagement

or policy implementation may exacerbate grievances within communities, resulting in conflicts, loss of trust,

and decreased stakeholder support. Unresolved issues could further escalate over the long term, negatively

impacting CSG’s social license to operate and contributing to operational disruptions and declining business

performance.

Conversely, opportunities exist for CSG to strengthen relationships with communities through proactive

engagement, continuous dialogue, and the establishment of transparent grievance mechanisms.

Implementing structured communication plans and governance frameworks can help mitigate risks while

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enhancing trust and cooperation. Additionally, a well-managed approach to community engagement and

compliance can lead to increased brand appreciation, long-term social acceptance, and improved business

sustainability. By fostering inclusive policies and responding effectively to community concerns, CSG can

reinforce its positive impact and secure stable, long-term relationships with stakeholders.

Disclosure of Whether and How the Undertaking Has Developed an

Understanding of How Affected Communities with Particular Characteristics,

Those Living in Particular Contexts, or Those Undertaking Particular

Activities, May Be at Greater Risk of Harm

CSG has not yet developed an understanding of how affected communities with particular characteristics,

those living in specific contexts, or those undertaking particular activities may be at greater risk of harm. At

this stage, CSG has applied a general approach to assessing community-related risks and opportunities but

has not conducted a detailed evaluation of varying levels of vulnerability among different groups. As a result,

there is currently no structured assessment in place to determine whether certain communities are more

exposed to harm due to their socio-economic conditions, geographic location, or engagement in specific

activities.

Disclosure of Which of Material Risks and Opportunities Arising from Impacts

and Dependencies on Affected Communities Are Impacts on Specific Groups

As CSG has not yet developed an understanding of how particular characteristics, contexts, or activities may

increase the risk of harm to certain community groups, there is currently no structured assessment that

distinguishes among its impacts on different segments of the population.

While CSG recognizes that its downstream activities may lead to risks such as community resistance, social

unrest, and loss of trust, as well as opportunities like enhanced stakeholder relationships and improved

grievance mechanisms, these impacts have not been disaggregated by specific community groups. Future

efforts to refine data collection and stakeholder engagement may provide greater clarity on which populations

are most affected, allowing for a more targeted and inclusive approach to managing community-related risks

and opportunities.

S3-1

3.2.2. Policies Related to Affected

Communities

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S3_SM_29: Community Engagement

 S3_SM_30: Community Grievance and Compliance

 S3_SM_31: Community Management and Policy

Disclosure of Policies Adopted to Manage Material Impacts, Risks, and

Opportunities Related to Affected Communities (including Minimum

Disclosure Requirements)

CSG’s Compliance Policy and Code of Ethics serve as the foundations of its governance framework and are

mandatory for all companies within the Group. These policies establish the principles of ethical conduct, legal

compliance, and corporate integrity, guiding the organization’s business practices and decision-making

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processes. As part of CSG’s governance structure, the Compliance Program ensures clear and accessible

channels for raising concerns, reinforcing transparency and accountability across all of CSG’s operations.

The scope of these policies is comprehensive, applying to all entities within the Group without exception.

While the Compliance Program extends to external stakeholders, including affected communities, its primary

focus is on ethical business conduct rather than a dedicated human rights policy framework. Consequently,

while engagement with affected communities is recognized within the ethics framework, it is not explicitly

structured through a human-rights-centric approach.

At the highest level of corporate oversight, the Board of Directors (or an equivalent governing body within

CSG) holds ultimate responsibility for the implementation and enforcement of the Compliance Program. This

ensures that compliance and ethical considerations remain integrated into strategic decision-making and

governance.

CSG’s Compliance Program also incorporates third-party standards to reinforce its integrity framework.

Specifically, the Group implements an anti-corruption program in cooperation with the Czech branch of

Transparency International. Additionally, the Ethics Line—a critical mechanism within CSG’s compliance

system—is operated in the framework of the Group’s anti-corruption and anti-bribery policy, ensuring

adherence to internationally recognized ethical standards.

Given CSG’s large-scale, internationally diverse operations, there is no standardized group-wide process for

direct stakeholder consultation when formulating policies. Instead, to ensure consistency and credibility,

CSG’s Compliance Program is structured around the Transparency International Framework. While this

approach does not replace direct stakeholder engagement, it has been deemed effective in addressing

relevant sustainability concerns. Given the limited material negative impacts observed in this area, CSG

currently sees no immediate need to revise the framework, as it continues to meet corporate governance and

sustainability objectives.

To ensure policy accessibility and transparency, CSG’s Code of Ethics and other governance policies are

publicly available on the company’s website. Additionally, the Ethics Line, a key component of the compliance

framework, is accessible to both internal and external stakeholders, including affected communities. This

ensures that all relevant parties have the necessary resources to report concerns, seek guidance, and engage

with CSG’s compliance mechanisms.

CSG has conducted an assessment of the sustainability matter “S1_SM_28: Indigenous Peoples and Human

Rights” and determined that it is non-material across all sectors of the Group. Consequently, the company

does not have specific policy provisions dedicated to preventing or addressing impacts on indigenous

peoples. Similarly, CSG has not established formal human rights policy commitments that are specific to

affected communities, nor does it have a defined Group-wide approach to ensuring the respect and protection

of the human rights of communities, including indigenous peoples.

Despite the absence of a unified Group strategy in this area, companies within CSG’s portfolio that have

identified this matter as material do engage in proactive collaboration with local stakeholders. These

companies work closely with educational institutions, government agencies, and community organizations to

support initiatives that foster technical training, hands-on learning opportunities, and broader community

development. Additionally, these companies contribute to local infrastructure projects and participate in

regional community events that enhance social and economic growth. While these efforts are not

consolidated into a single framework, CSG ensures consistency across its operations through company-wide

ethics and whistleblowing mechanisms, which provide a secure and transparent channel for affected

communities to voice concerns and report potential issues.

In terms of remediation measures for human-rights impacts, CSG does not currently have specific

mechanisms or formalized commitments in place to address human-rights-related grievances from affected

communities. However, the Group recognizes the evolving regulatory landscape and is committed to

evaluating and refining its approach to human rights governance. The potential development of targeted

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policies and remediation frameworks will be considered as part of CSG’s ongoing commitment to responsible

business practices.

Regarding the alignment of policies with internationally recognized human-rights instruments, CSG does not

currently maintain policies that specifically address adherence to frameworks such as the UN Guiding

Principles on Business and Human Rights, the ILO Declaration on Fundamental Principles and Rights at Work,

or the OECD Guidelines for Multinational Enterprises. The Group is continuing its efforts to assess the

relevance and applicability of these standards and will consider their integration into corporate policies where

appropriate.

At present, CSG does not systematically track or report cases of non-compliance with the aforementioned

international human rights frameworks as they relate to affected communities within its operations or value

chain. Recognizing the importance of robust monitoring and due diligence, CSG is currently reviewing its

internal processes to enhance tracking, reporting, and compliance mechanisms in alignment with emerging

regulatory expectations and industry best practices.

S3-2

3.2.3. Processes for Engaging with Affected

Communities About Impacts

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S3_SM_29: Community Engagement.

Disclosure of Whether and How Perspectives of Affected Communities Inform

Decisions or Activities Aimed at Managing Actual and Potential Impacts

To date, the perspectives of affected communities have not been incorporated into CSG’s assessment of

actual and potential impacts within the relevant sectors. Consequently, no specific decisions or activities have

been conducted in collaboration with these communities. This was primarily due to the prioritization of other

stakeholder groups during the 2024 validation process for the impacts, risks, and opportunities (IROs)

assessment. As a result, CSG will not be reporting on affected communities for this reporting period. However,

as it recognizes affected communities as a key stakeholder group identified during the stakeholder analysis,

CSG is committed to engaging them in future impact assessments and decision-making processes to ensure

a more inclusive and comprehensive approach.

S3-3

3.2.4. Processes to Remediate Negative

Impacts and Channels for Affected

Communities to Raise Concerns

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S3_SM_29: Community Engagement

 S3_SM_30: Community Grievance and Compliance

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Disclosure of General Approach to and Processes for Providing or

Contributing to Remedy When Undertaking Has Identified That It Is Connected

with a Material Negative Impact on Affected Communities

Although a material negative impact related to affected communities has been identified within one company

in the Group, CSG currently does not provide or contribute to specific remedy mechanisms. This is primarily

because the affected communities have not yet been involved in the assessment of impacts, risks, and

opportunities (IROs). While acknowledging the relevance of this identified impact, CSG considers it a low

priority at this stage, because the company has an established, company-wide whistleblowing and ethics

hotline, aptly named the Ethics Line, that is accessible to external stakeholders, including affected

communities, thus providing them with a mechanism for raising concerns until a more comprehensive

approach is developed.

Disclosure of Specific Channels in Place for Affected Communities to Raise

Concerns or Needs Directly with Undertaking and Have Them Addressed

CSG has a comprehensive compliance program in place that outlines the Group’s approach to ethics and

integrity, including mechanisms for raising concerns. This program details the availability of the company-

wide Ethics Line, which are accessible to both internal and external stakeholders, including affected

communities.

Disclosure of Processes Through Which Undertaking Supports or Requires

Availability of Channels

CSG ensures maximum transparency and accessibility by providing unrestricted access to its Ethics Line for

all stakeholders, both internal and external to the organization. This comprehensive reporting channel is

designed to facilitate the secure and confidential submission of complaints and concerns through multiple

formats, including online platforms, telephone communication, and email correspondence, thereby supporting

a robust and responsive compliance framework.

Disclosure of How Issues Raised and Addressed Are Tracked and Monitored

and How Effectiveness of Channels Is Ensured

Issues raised through CSG’s Ethics Line are tracked and monitored using the same approach applied to all

concerns submitted via this channel. Each such case is managed on an individual basis, as a unified approach

to handling such matters has not yet been established. For the 2024 reporting period, no such instances were

reported.

Disclosure of Whether and How It Is Assessed That Affected Communities

Are Aware of and Trust Structures or Processes as Way to Raise Their

Concerns or Needs and Have Them Addressed

No formal assessment has been conducted to determine whether affected communities are aware of and

trust the structures or processes in place to raise their concerns or needs. However, CSG’s Ethics Line is

publicly available online and accessible to all stakeholders, including affected communities, providing an open

channel for submitting concerns.

Policies Regarding Protection Against Retaliation for Individuals That Use

Channels to Raise Concerns or Needs Are in Place

CSG has established robust policies to protect individuals, including affected communities, from retaliation

when using available channels to raise concerns or needs. In line with the Group’s Whistleblowing Policy,

CSG maintains a zero-tolerance approach to any form of retaliation against whistleblowers or other protected

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persons. Protections extend to individuals who report concerns to relevant public authorities in accordance

with applicable national laws or European Union regulations. All allegations of retaliation are treated with the

utmost seriousness and are managed consistently across the Group. Suspicions of retaliation can be reported

through CSG’s internal information system using the designated contacts provided in the Whistleblowing

Policy.

S3-4

3.2.5. Taking Action on Material Impacts on

Affected Communities

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S3_SM_29: Community Engagement

 S3_SM_30: Community Grievance and Compliance

 S3_SM_31: Community Management and Policy

Minimum Disclosure Requirement – Actions and Resources in Relation to

Affected Communities

Compliance Program

CSG’s approach to managing matters related to affected communities is primarily guided by its established

Compliance Program. Since the implementation of the Compliance Program, no additional follow-up actions

have been required on a regular basis, as the framework has proven sufficient for addressing stakeholder

concerns. This program is managed internally by the Compliance Department, ensuring consistent oversight

and adherence to ethical standards.

Group Policy Framework

As part of the planned Group Policy Framework, CSG intends to replace its existing Compliance Program with

a comprehensive framework that will enhance governance and accountability across its operations. This

framework—the new Compliance Policy—will include dedicated provisions addressing the company’s

interactions with affected communities. Specifically, it will incorporate the Code of Ethics, Whistleblowing

Policy, and Ethics Line, which will provide structured mechanisms for community engagement, ethical

conduct, and grievance handling. The aim is to establish clear processes for identifying, managing, and

mitigating risks related to CSG’s impact on affected communities while ensuring transparency and corporate

responsibility. The timeline for adopting the Compliance Policy is set for 2025.

The implementation of the unified Compliance Policy does not require significant operational (OpEx) or capital

(CapEx) expenditures. Currently, no specific actions have been taken to provide remedies for those harmed

by actual material impacts.

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Further Information on Actions and Resources in Relation to Affected Communities

CSG has not yet implemented a structured group-wide approach or allocated dedicated resources for

managing impacts on affected communities. While one of CSG’s automotive companies in the Czech Republic

has made the most progress in this area, the lack of a standardized framework prevents CSG from providing

disclosures on key aspects, including actions taken or planned to mitigate or remediate material negative

impacts, efforts to enable remedies, and initiatives aimed at delivering positive outcomes for affected

communities.

Additionally, CSG cannot currently report on the tracking and assessment of effectiveness, processes for

identifying appropriate actions, approaches to ensuring access to remedy, or planned efforts to mitigate risks

and pursue opportunities related to affected communities. Furthermore, the company is unable to disclose

whether and how it ensures that its practices do not cause or contribute to material negative impacts, severe

human rights issues connected to affected communities, or resources allocated to managing material impacts.

However, CSG recognizes the importance of these areas and is committed to further developing a

standardized approach to enhance future disclosures.

S3-5

3.2.6. Targets Related to Affected

Communities

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S3_SM_29: Community Engagement

 S3_SM_30: Community Grievance and Compliance

 S3_SM_31: Community Management and Policy

Minimum Disclosure Requirement – Targets Related to Affected Communities

CSG has not yet set measurable outcome-oriented targets related to affected communities. At this stage, the

focus remains on establishing a robust data foundation and enhancing internal processes for sustainability

reporting, which are essential prerequisites for defining meaningful and achievable targets. While a specific

timeline for setting such targets has not yet been determined, CSG anticipates that target-setting efforts will

be developed in alignment with the Group Policy Framework within the next three years.

Despite the absence of formalized targets, CSG monitors the effectiveness of its policies and actions as

described in chapter 3.2.5. (Taking Action on Material Impacts on Affected Communities) of this Consolidated

Sustainability Statement. As part of its ongoing sustainability strategy, CSG aims to refine quantitative and

qualitative indicators in the future to measure its social impact more effectively.

Further Information on Targets in Relation to Affected Communities

Since CSG has not yet established measurable outcome-oriented targets related to affected communities,

there are currently no specific targets in place addressing the prevention and mitigation of potential negative

impacts on community well-being, engagement practices, or social development initiatives.

3.3. Consumers and End-users

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Sustainability Matters in Topical ESRS

List of sustainability topics that are material for chapter 3.3. Consumers and End-users (Table ID 38)

Sustainability Matter

Main Areas of Concern (IROs)

S4_SM_32 Consumer

Rights and Human Rights

Strong commitments to consumer and human rights strengthen consumer trust

and attract ethically conscious customers and investors. Failure to uphold these

rights may result in reputational damage and legal challenges.

S4_SM_33: Consumer

Engagement

Meaningful consumer engagement fosters community-building and loyalty.

Strategic and efficient planning of consumer engagement campaigns ensures

resources are allocated effectively.

S4_SM_34 Consumer

Grievance and

Compliance

Effective grievance mechanisms support consumer trust, enhance compliance

with legal frameworks, and streamline complaint resolution processes. Poorly

managed mechanisms risk legal penalties, operational inefficiencies, and

reduced market trust due to unresolved complaints.

S4_SM_35 Consumer

Management and Policy

Clear and proactive consumer management policies foster consumer loyalty,

brand reputation, and compliance with global standards. Unclear or mismanaged

policies may result in customer dissatisfaction, conflicts, and negative media

coverage impacting market position.

S4.SBM-3

3.3.1. General Disclosures Related to

Consumers and End-Users

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S4_SM_32: Consumer Rights and Human Rights

 S4_SM_33: Consumer Engagement

 S4_SM_34: Consumer Grievance and Compliance

 S4_SM_35: Consumer Management and Policy

All Consumers and End-Users Who Can Be Materially Impacted by

Undertaking Are Included in Scope of Disclosure Under ESRS 2

CSG has applied a general approach to assessing consumers and end-users who may be materially impacted

by its operations, but it has not yet comprehensively included all such groups in the scope of its disclosure

under ESRS 2. The assessment considers key areas related to consumer rights, engagement, grievance

mechanisms, and management policies, highlighting both actual and potential risks and opportunities.

CSG recognizes the importance of consumer trust and strong commitments to human rights in fostering long-

term relationships; however, reputational risks, such as allegations of human rights violations, remain a

concern. Additionally, consumer engagement strategies present both opportunities for brand advocacy and

risks related to operational difficulties and cost inefficiencies. The effectiveness of grievance mechanisms

plays a significant role in shaping consumer trust, but non-compliance with consumer rights regulations may

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lead to legal penalties. Consumer management policies also influence brand reputation, with potential risks

arising from unclear policies or ineffective impact management.

Due to the lack of a standardized framework, CSG is currently unable to confirm that all materially impacted

consumers and end-users are included in the disclosure scope, and it will work toward refining its assessment

process in the future.

Description of Types of Consumers and End-Users Subject to Material

Impacts and Types of Consumers and End-Users Subject to Material Impacts

by Own Operations or Through Value Chain

CSG has not yet developed a structured approach to categorizing the types of consumers and end-users

subject to material impacts from its operations or value chain. While CSG acknowledges that its activities

influence consumer rights, engagement, grievance handling, and management policies, a comprehensive

segmentation of impacted consumer groups has not been conducted.

Due to the absence of a standardized assessment framework, CSG is unable to provide a description of the

types of consumers and end-users subject to material impacts or specify whether these impacts arise from

its own operations or through its value chain. The current analysis highlights general risks and opportunities

related to consumer trust, reputation, engagement strategies, and regulatory compliance, but it does not

distinguish between different consumer segments or assess variations in exposure to material impacts.

Recognizing the importance of these disclosures, CSG aims to refine its data collection and assessment

processes so as to improve the identification of consumer groups that may be disproportionately affected.

Future efforts will focus on defining clear criteria for evaluating consumer impacts across different business

segments and value chain interactions.

Description of Material Risks and Opportunities Arising from Impacts and

Dependencies on Consumers and End-Users

CSG acknowledges that its interactions with consumers and end-users present both material risks and

opportunities, primarily arising from its impacts on consumer rights, engagement, grievance mechanisms, and

policy management. One key opportunity lies in strengthening consumer trust and brand reputation through

strong commitments to human rights, ethical business practices, and compliance with consumer protection

regulations. Ethical leadership and effective grievance mechanisms can enhance CSG’s market position,

attract ethically conscious consumers, and foster long-term brand loyalty. Additionally, smartly designed

consumer engagement strategies can improve operational efficiency, ensuring that resources are allocated

effectively while targeting the right audience.

However, significant risks remain. Allegations of human rights violations or failures in consumer rights

protection could result in reputational damage, consumer boycotts, and long-term loss of trust. The company

also faces strategic and market-related risks associated with consumer-engagement initiatives, including high

operational costs and unrealistic expectations that may lead to inefficiencies if not properly managed.

Furthermore, ineffective grievance mechanisms and non-compliance with consumer protection laws could

expose CSG to legal actions, fines, and penalties, particularly in jurisdictions with stringent regulations. While

these risks have been identified, they are considered to have a low likelihood of occurrence and did not

priority relative to other identified material impacts, risks, and opportunities (IROs).

Consumer management policies also play a critical role, as unclear or poorly communicated policies may lead

to consumer distrust and brand damage, while ineffective impact management could result in conflicts or

negative media coverage. However, aligning consumer policies with international standards presents an

opportunity to enhance brand reputation and appeal to ethically conscious customers.

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CSG recognizes the importance of addressing these material risks and opportunities and is committed to

refining its compliance frameworks, consumer engagement strategies, and grievance-handling mechanisms

to mitigate risks and maximize positive outcomes in the future.

Disclosure of Whether and How an Understanding of How Consumers and

End-Users with Particular Characteristics, Working In Particular Contexts, or

Undertaking Particular Activities May Be at Greater Risk of Harm Has Been

Developed

CSG has not yet developed an understanding of how consumers and end-users with particular characteristics,

working in specific contexts, or undertaking particular activities may be at greater risk of harm. At this stage,

the company has applied a general approach to assessing consumer-related risks and opportunities but has

not conducted a detailed evaluation of the varying levels of vulnerability among different consumer segments.

As a result, there is currently no structured assessment in place to determine whether certain consumer

groups are more exposed to harm due to their socio-economic conditions, geographic location, or their usage

of specific products or services.

Disclosure of Which of Material Risks and Opportunities Arising from Impacts

and Dependencies on Consumers and End-Users Are Impacts on Specific

Groups

CSG has not yet identified specific groups of consumers and end-users that are subject to material risks and

opportunities arising from its impacts and dependencies. Since the company has not developed an

understanding of how particular characteristics, contexts, or activities may increase the risk of harm for

different consumer segments, there is currently no structured assessment distinguishing between the effects

on specific groups.

While CSG recognizes that consumer trust, grievance mechanisms, compliance with consumer rights, and

engagement strategies present both risks and opportunities, these impacts have not been categorized by

consumer demographics or market segments. Future efforts will focus on refining data collection and

stakeholder engagement so as to improve the identification of the consumer groups most affected, allowing

for a more targeted and inclusive approach to managing consumer-related risks and opportunities.

S4-1

3.3.2. Policies Related to Consumers and

End-Users

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S4_SM_32: Consumer Rights and Human Rights

 S4_SM_33: Consumer Engagement

 S4_SM_34: Consumer Grievance and Compliance

 S4_SM_35: Consumer Management and Policy

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Disclosure of Policies Adopted to Manage Material Impacts, Risks and

Opportunities Related to Consumers and End-Users (Including Minimum

Disclosure Requirements)

CSG has not yet adopted formal policies or official documents specifically addressing the management of

material impacts, risks, and opportunities related to consumers and end-users. While principles of ethical

business conduct, compliance, and governance are embedded within the company’s broader framework,

there is currently no structured policy dedicated to consumer rights, engagement, grievance handling, or

product responsibility. This is primarily due to CSG’s strategic focus on other governance and compliance

priorities, with consumer-related considerations being managed through general regulatory and ethical

business practices rather than dedicated policies. While consumer trust, engagement, and compliance risks

are recognized as important, they have not yet been addressed through a structured policy approach.

Recognizing the growing significance of consumer-related governance, CSG aims to integrate these

considerations into its corporate framework within the next three years. The company is currently assessing

the most effective way to incorporate consumer-related policies into its existing governance structure,

ensuring alignment with regulatory requirements and best practices.

As CSG has not yet adopted formal policies specifically addressing material impacts, risks, and opportunities

related to consumers and end-users, the company is currently unable to provide detailed disclosures on

several key aspects of consumer-related governance. The absence of a structured policy framework means

that consumer-related considerations are managed within broader compliance and ethical business practices

rather than through dedicated policies, resulting in a lack of standardized governance mechanisms in this

area.

Due to this, CSG is unable to disclose policies to manage material impacts, risks, and opportunities related to

affected consumers and end-users, whether for specific consumer groups or for all consumers and end-

users. Without a formalized approach, CSG is also unable to provide a description of relevant human rights

policy commitments specific to consumers and/or end-users, as these considerations are not currently

addressed through a distinct human-rights-focused policy.

Additionally, the lack of a structured framework prevents CSG from outlining a general approach to respecting

the human rights of consumers and end-users or from providing a general approach to engagement with

consumers and/or end-users. While consumer trust and ethical business conduct are recognized as

important, there is no dedicated policy governing these interactions or establishing clear engagement

mechanisms.

Similarly, as CSG has not yet implemented structured measures related to providing or enabling remedies for

human rights impacts on consumers and end-users, the company is unable to disclose a formalized approach

in this area. Furthermore, as policies have not been developed to specifically address consumer-related

governance, CSG is unable to confirm whether and how its policies align with relevant internationally

recognized instruments, such as the UN Guiding Principles on Business and Human Rights, the ILO

Declaration on Fundamental Principles and Rights at Work, or the OECD Guidelines for Multinational

Enterprises.

Given the absence of a dedicated policy framework, CSG is also unable to report on the extent and nature of

cases involving failures to respect these international principles and guidelines in relation to consumers and/or

end-users. The company acknowledges the importance of these aspects and is committed to evaluating its

governance structures to determine how best to integrate consumer-related policies into its broader

compliance and risk management framework in the future.

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S4-2

3.3.3. Processes for Engaging with

Consumers and End-Users About Impacts

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter S4_SM_33: Consumer Engagement.

Disclosure of Whether and How Perspectives of Consumers and End-Users

Inform Decisions or Activities Aimed At Managing Actual and Potential

Impacts

To date, the perspectives of consumers and end-users have not been incorporated into the assessment of

actual and potential impacts within the relevant sectors. Consequently, no specific decisions or activities have

been conducted in collaboration with these stakeholder groups. This has primarily been due to the

prioritization of other governance and compliance initiatives, which have taken precedence over consumer-

specific policy development. As a result, CSG will not be reporting on consumer and end-user engagement

for this reporting period. However, recognizing consumers and end-users as, collectively, a key stakeholder

group identified during the stakeholder analysis, CSG is committed to integrating their perspectives into future

impact assessments and decision-making processes to ensure a more structured and consumer-focused

approach.

S4-3

3.3.4. Processes to Remediate Negative

Impacts and Channels for Consumers and

End-Users to Raise Concerns

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S4_SM_34: Consumer Grievance and Compliance

 S1_SM_20: Grievance and Compliance

Disclosure of General Approach to and Processes for Providing or

Contributing to Remedies Where Undertaking Has Identified That It Is

Connected with a Material Negative Impact on Consumers and End-Users

Although one material negative impact related to consumer trust and brand reputation has been identified,

CSG currently does not provide or contribute to specific remedy mechanisms for consumers and end-users.

This is primarily because consumer and end-user perspectives have not yet been integrated into the

assessment of impacts, risks, and opportunities (IROs). While acknowledging the relevance of this identified

impact, CSG considers it a low priority at this stage, because the company has an established, company-wide

whistleblowing and ethics hotline, known as the Ethics Line, which is accessible to external stakeholders,

including consumers and end-users. This provides them with an effective mechanism for raising concerns

until a more comprehensive approach is developed.

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At the same time, CSG recognizes the critical importance of customer and end-user safety, particularly for

products such as firearms and ammunition, where proper handling, quality assurance, and regulatory

compliance are essential. The Group places a strong emphasis on ensuring that these products meet high

safety standards.

Disclosure of Specific Channels in Place for Consumers and End-Users to

Raise Concerns or Needs Directly with Undertaking and Have Them

Addressed

CSG’s Compliance Program outlines the group’s approach to ethics and integrity, including clearly defined

mechanisms for raising concerns. Central to this framework is the Ethics Line, a company-wide reporting

channel accessible to all stakeholders, both internal and external, including consumers and end-users. This

ensures that concerns can be raised transparently and addressed appropriately across all Group entities.

Disclosure of Processes Through Which Undertaking Supports or Requires

Availability of Channels

To ensure maximum transparency and accessibility, CSG provides unrestricted access to its Ethics Line for

all stakeholders. This comprehensive reporting channel allows for secure and confidential submission of

complaints and concerns through multiple formats, including online platforms, telephone communication, and

email correspondence.

Disclosure of How Issues Raised and Addressed Are Tracked and Monitored

and How Effectiveness of Channels Is Ensured

Issues raised through CSG’s Ethics Line are tracked and monitored using the same consistent approach

applied to all concerns submitted via this channel. Each case is handled on an individual basis, as a unified

approach to managing such matters has not yet been established. For the 2024 reporting period, no instances

related to consumers and end-users were reported.

Disclosure of Whether and How It Is Assessed That Consumers and End-

Users Are Aware of and Trust Structures or Processes as Way to Raise Their

Concerns or Needs and Have Them Addressed

No formal assessment has been conducted to determine whether consumers and end-users are aware of

and trust the structures or processes in place for raising concerns. Nevertheless, CSG’s Ethics Line is publicly

accessible online, ensuring that consumers and end-users have open and secure channels to submit

concerns. This accessibility serves as a foundation for fostering trust and transparency across all operations.

Implementation of Policies Regarding Protection Against Retaliation for

Individuals That Use Channels to Raise Concerns or Needs

CSG has implemented robust policies to protect individuals, including consumers and end-users, from

retaliation when utilizing available channels to raise concerns. In line with the Group’s Whistleblowing Policy,

CSG maintains a zero-tolerance approach to any form of retaliation against whistleblowers or other protected

persons. Protections extend to individuals who report concerns to relevant public authorities under applicable

national laws or European Union regulations. All allegations of retaliation are treated with the utmost

seriousness and managed consistently across the Group. Suspicions of retaliation can be reported through

CSG’s internal information system using the designated contacts outlined in the Whistleblowing Policy.

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S4-4

3.3.5. Taking Action on Material Impacts on

Consumers and End-Users

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S4_SM_32: Consumer Rights and Human Rights

 S4_SM_33: Consumer Engagement

 S4_SM_34: Consumer Grievance and Compliance

 S4_SM_35: Consumer Management and Policy

Minimum Disclosure Requirement – Actions and Resources in Relation to

Consumers and End-Users

Compliance Program

CSG’s approach to managing matters related to consumers and end-users is primarily guided by its

established Compliance Program. Since the implementation of the Compliance Program, no additional follow-

up actions have been required on a regular basis, as the framework has proven sufficient for addressing

stakeholder concerns. The program is managed internally by the Compliance Department, ensuring consistent

oversight and adherence to ethical standards.

Group Policy Framework

As part of the planned Group Policy Framework, CSG intends to replace its existing Compliance Program with

a comprehensive framework that will enhance governance and accountability across its operations. The new

Compliance Policy will include dedicated provisions addressing the company’s interactions with consumers

and end-users. Specifically, it will incorporate the Code of Ethics, Whistleblowing Policy, and Ethics Line,

which will provide structured mechanisms for community engagement, ethical conduct, and grievance

handling. The aim is to establish clear processes for identifying, managing, and mitigating risks related to

CSG’s impact on consumers and end-users while ensuring transparency and corporate responsibility. The

timeline for adopting the Compliance Policy is set for 2025.

The implementation of the unified Compliance Policy does not require significant operational (OpEx) or capital

(CapEx) expenditures. Currently, no specific actions have been taken to provide remedies for those harmed

by actual material impacts.

Further Information on Actions and Resources in Relation to Consumers and

End-Users

CSG has not yet implemented a structured group-wide approach or allocated dedicated resources for

managing impacts on consumers and end-users. As a result, the company is currently unable to provide

disclosures on key aspects of consumer impact management. Without a formalized strategy, CSG cannot

disclose actions planned or underway to prevent, mitigate, or remediate material negative impacts on

consumers and end-users or describe whether and how action has been taken to provide or enable remedy

for actual impacts. Additionally, there are no structured initiatives focused on delivering positive consumer

impacts, nor a framework to track and assess the effectiveness of such actions.

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Moreover, CSG lacks a defined approach to identifying and responding to material negative consumer

impacts, ensuring remedy processes are available and effective, or mitigating risks arising from consumer-

related impacts and dependencies. Similarly, no systematic efforts are in place to pursue consumer-related

opportunities or to ensure that company practices do not cause or contribute to negative impacts. CSG is also

unable to disclose severe human rights issues and incidents connected to consumers and end-users or

provide details on resources allocated to managing consumer-related impacts.

Recognizing the need for a more structured approach, CSG intends to integrate consumer-related governance

into its broader compliance and risk management framework. Future developments will focus on defining

policies, establishing engagement mechanisms, and ensuring transparency in managing consumer risks and

opportunities.

S4-5

3.3.6. Targets Related to Consumers

and End-Users

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 S4_SM_32: Consumer Rights and Human Rights

 S4_SM_33: Consumer Engagement

 S4_SM_34: Consumer Grievance and Compliance

 S4_SM_35: Consumer Management and Policy

Minimum Disclosure Requirement – Targets Related to Consumers and End-

Users

CSG has not yet set measurable outcome-oriented targets related to consumers and end-users. At this stage,

the focus remains on establishing a robust data foundation and enhancing internal processes for sustainability

reporting, which are essential prerequisites for defining meaningful and achievable targets. While a specific

timeline for setting such targets has not yet been determined, CSG anticipates that target-setting efforts will

be developed in alignment with the Group Policy framework within the next three years.

Despite the absence of formalized targets, CSG monitors the effectiveness of its policies and actions as

described in chapter 3.3.5. (Taking Action on Material Impacts on Consumers and End-Users) of this

Consolidated Sustainability Statement. As part of its ongoing sustainability strategy, CSG aims to refine

quantitative and qualitative indicators in the future to measure its social impact more effectively.

Further Information on Targets in Relation to Consumers and End-Users

Since CSG has not yet established measurable outcome-oriented targets related to consumers and end-

users, there are currently no specific targets in place addressing consumer safety, product transparency,

customer satisfaction, or responsible marketing practices.

4. Governance – Business Conduct

Sustainability Matters in Topical ESRS

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List of sustainability topics that are material for chapter 4. Governance – Business Conduct (Table ID 39)

Sustainability Matter

Main Areas of Concern (IROs)

G1_SM_36 Corporate

Culture and Ethics

Promoting a strong ethical culture fosters trust, enhances reputation, and

supports long-term stakeholder relationships. Conversely, unethical behavior or

weak ethical standards may result in reputational damage, financial loss, and

regulatory scrutiny.

G1_SM_37 Anti-Corruption

and Anti-Bribery

Effective anti-corruption and anti-bribery policies strengthen organizational

integrity and improve access to capital. However, corruption risks expose the

organization to severe legal penalties, reputational damage, and exclusion from

critical contracts, along with high compliance costs.

G1_SM_38 Whistleblowing

and Reporting

Encouraging whistleblowing and ensuring proper reporting channels can protect

the organization by identifying unethical practices early. Lack of protection and

ineffective handling of whistleblower cases may suppress reporting, leading to

legal challenges and organizational mistrust.

G1_SM_39 Business

Conduct Training

Providing comprehensive business conduct training ensures that employees

understand and adhere to ethical standards and compliance requirements.

Insufficient or ineffective training programs can result in non-compliance, legal

risks, and reduced ethical awareness within the organization.

G1_SM_40 Legal

Compliance and

Investigations

Maintaining strong legal compliance frameworks minimizes exposure to legal

actions and strengthens corporate reputation. Poor compliance systems may

incur high legal costs, regulatory penalties, and loss of business opportunities,

especially in highly regulated sectors.

ESRS G1

4.1. General Disclosures Related to

Governance

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 G1_SM_36: Corporate Culture and Ethics

 G1_SM_37: Anti-Corruption and Anti-Bribery

 G1_SM_38: Whistleblowing and Reporting

 G1_SM_39: Business Conduct Training

 G1_SM_40: Legal Compliance and Investigations

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4.1.1. Role of Administrative, Management, And

Supervisory Bodies

Czechoslovak Group is committed to strong governance, with its administrative, management, and

supervisory bodies playing a vital role in promoting ethical business practices. More than half of its companies

actively shape their own business conduct policies, set ethical standards, and encourage integrity, while

others focus on oversight and corrective actions. Ensuring leadership expertise is a priority in CSG, with many

companies having leaders experienced in business conduct or seeking out external advice when needed.

However, some companies still lack formal oversight or specialized knowledge in this area, highlighting the

need for ongoing improvement. CSG remains dedicated to strengthening governance and providing its

leadership with the right tools and training to foster a culture of integrity across the group.

Information about Roles and Responsibilities of Administrative,

Management, and Supervisory Bodies

Role of Administrative, Management, and Supervisory Bodies Related to Business Conduct

The administrative, management, and supervisory bodies within CSG play a significant role in shaping and

overseeing its business conduct policies. Currently, 51.9% of the entities within CSG set clear expectations

and policies for business conduct, while 57.4% are involved in approving and updating the company's code

of conduct and other related policies. Leadership in fostering an ethical business culture is reported by 46.3%

of entities, while 35.2% provide oversight and take corrective actions on business conduct issues when

necessary. However, only 16.7% of CSG’s entities regularly review and monitor compliance with business

conduct policies. Despite these efforts, 20.4% of CSG’s entities indicate that their administrative,

management, and supervisory bodies do not play a formal role in business conduct.

Governance involvement within CSG varies across company sizes and sectors. The larger companies show

strong engagement, with 58.3% setting business conduct policies and 83.3% updating their code of conduct.

In the Defence sector, 63.2% have established conduct policies, while 57.9% have updated related policies.

Aerospace is leading here, with 66.7% of its companies setting policies and providing oversight. In Wholesale

& Retail, 62.5% set policies, while 50% actively promote ethical practices.

Expertise of Administrative, Management, and Supervisory Bodies on Business Conduct Matters

A review of the overall expertise of CSG’s administrative, management, and supervisory bodies in business

conduct matters shows that 55.6% of their members have specific expertise in business conduct, ethics, or

compliance. 38.9% have prior experience managing business conduct issues, while 25.9% receive regular

training. External experts are consulted in 42.6% of cases, ensuring additional guidance on complex issues.

However, 18.5% of these bodies do not have specific expertise in business conduct matters, indicating room

for further training and development.

Among key sectors and company sizes, large companies demonstrate the greatest expertise, with 66.7% of

members having business conduct expertise and 45.8% receiving training. In the Defence sector, 68.4% of

members have expertise. The Aerospace sector consults external experts in 100% of cases, while Automotive

shows strong reliance on external advisors at 66.7%.

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4.1.2. Processes to Identify and Assess Material

Business Conduct Related Impacts, Risks, and

Opportunities

Information on Processes to Identify and Assess Material Business Conduct Related Impacts, Risks and

Opportunities is incorporated by reference to chapter 1.4. (Impact, Risk, and Opportunity Management) of

this Consolidated Sustainability Statement.

4.1.3. Minimum Disclosure Requirements

Policies Related to Business Conduct

To prevent, mitigate, and remediate actual and potential impacts, address risks, and pursue opportunities

related to business conduct, a comprehensive Compliance Program Policy, which is consistent with the United

Nations Convention against Corruption, is in place across all of CSG’s entities. This framework integrates key

topics, including Anti-Corruption and Anti-Bribery, Whistleblower Protection, and training, ensuring a

structured approach to ethical business practices. By embedding these policies within a unified compliance

structure, business conduct risks are managed systematically, fostering a culture of integrity and

accountability among employees, business partners, and stakeholders. The Anti-Corruption and Anti-Bribery

policies, Whistleblower Protection Policies, and Business Conduct Training Policy are described in greater

detail below in Chapter 4.2. (Business Conduct Policies and Corporate Culture).

Each CSG company’s board of directors, or an equivalent governing body, holds the ultimate responsibility

for implementing business conduct policies. This ensures accountability at the highest level, with oversight of

compliance, risk management, and ethical standards across the organization. Key stakeholders, including

employees, investors, and regulatory bodies, are considered when setting business conduct policies. Their

expectations and regulatory requirements shape the policies to ensure ethical standards, compliance, and

transparency across operations. CSG’s business conduct policies are made accessible to all relevant

stakeholders through multiple channels. Employees receive these policies via the internal data management

system, internal communication channels, and dedicated training sessions. External stakeholders, including

suppliers and business partners, can access information about them through the official CSG website,

ensuring transparency and alignment with compliance expectations.

Actions and Resources Related to Business Conduct

As outlined in Chapter 5.2. (Business Conduct Policies and Corporate Culture), a comprehensive Compliance

Program, established in 2018, is already in place to prevent, mitigate, and remediate actual and potential

impacts, as well as to address risks and opportunities. In 2024, a regular review of the policy was conducted

to ensure its continued effectiveness and alignment with evolving regulatory and business requirements.

Looking ahead, a key planned action for 2025 is the implementation of the Group Policy Framework, which

will include our already existing Compliance Program and will further standardize compliance and business

conduct measures across Czechoslovak Group. The implementation of these actions will not require

significant operational (OpEx) or capital (CapEx) expenditures.

Metrics Related to Business Conduct

The effectiveness of CSG’s actions for managing material sustainability matters is tracked through a set of

metrics. CSG monitors compliance-related areas such as whistleblowing practices, participation in business

conduct and ethics training, and adherence to anti-corruption and anti-bribery policies through its internal

oversight and audit processes. CSG tracks its business conduct and compliance-related metrics using

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standardized methodologies to ensure consistency and reliability. Metrics such as whistleblowing case

resolution, training completion rates, and adherence to anti-corruption and anti-bribery policies are monitored

through internal reporting systems, employee reporting, and periodic internal audits. Key assumptions include

those regarding the completeness of reported data, the accuracy of self-reported compliance, and the

effectiveness of internal review mechanisms. The measurement of CSG’s business conduct and compliance-

related metrics is conducted internally through established reporting and audit mechanisms. These metrics

are not validated by an external body beyond the assurance provider.

Targets Related to Business Conduct

Measurable outcome-oriented targets have not yet been established. However, the effectiveness of policies

and actions related to business conduct and compliance is actively monitored using defined metrics and the

processes described earlier in this chapter, i.e., in chapter 4.1.3. (Minimum Disclosure Requirements). No

formal quantitative targets have been set at this stage, but the overarching ambition here is to maintain the

present state—zero cases of corruption and bribery.

G1-1

4.2. Business Conduct Policies and

Corporate Culture

Sustainability Matters in Topical ESRS

This chapter relates to these sustainability matters:

 G1_SM_36: Corporate Culture and Ethics

 G1_SM_37: Anti-Corruption and Anti-Bribery

 G1_SM_38: Whistleblowing and Reporting

 G1_SM_39: Business Conduct Training

 G1_SM_40: Legal Compliance and Investigations

Policies on Business Conduct and Corporate Culture

Executive Summary

Across the Group, CSG demonstrates a strong commitment to fostering a positive corporate culture by

embedding ethical practices and integrating ESG considerations into its strategic decision-making. Clear

mechanisms for reporting and investigating business conduct concerns are in place, with the compliance

department overseeing cases and ensuring Board-level oversight. While anti-corruption and anti-bribery

policies aligned with the United Nations Convention against Corruption have been fully implemented,

continuous efforts are being made to ensure their consistent application across all operations and external

markets. Whistleblower protection measures, including secure reporting channels and safeguards against

retaliation, are robust and comply with EU and Czech regulations. Comprehensive compliance training,

supported by Transparency International, reinforces ethical standards and corporate values, ensuring

alignment with evolving stakeholder expectations.

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Aspects of Corporate Culture

This chapter relates to the sustainability matter “G1_SM_36: Corporate Culture and Ethics.”

CSG establishes, develops, promotes, and evaluates its corporate culture by embedding ethical practices into

every aspect of its operations. The Group’s corporate culture is built upon a clear ethical framework that

guides decision-making, supported by comprehensive training programs, continuous communication, and

well-defined company values. Ethical considerations are integrated into business operations to foster trust

among stakeholders and enhance the Group’s reputation. CSG’s commitment to corporate responsibility is

further demonstrated through employee sponsorship programs and community engagement initiatives that

support personal development and well-being. The Group also prioritizes sustainability by integrating ESG

matters into its strategic decision-making. Regular internal discussions, education initiatives, and the

nomination of ESG-responsible members to boards of directors ensure that CSG’s corporate culture remains

dynamic and responsive to evolving industry standards and stakeholder expectations.

Mechanisms for Reporting and Investigating Unlawful or Non-Compliant

Behavior

This chapter relates to the sustainability matter “G1_SM_38: Whistleblowing and Reporting.”

Within the group, CSG has established clear mechanisms for identifying, reporting, and investigating concerns

related to unlawful behavior or actions that contradict its Code of Ethics, which is part of the Compliance

Program. Concerns can be reported through CSG’s ethics line, accessible via the Group’s website, which

provides a secure and confidential channel through which stakeholders can raise issues. The Compliance

Department oversees the intake and examination of reported cases, ensuring that all credible allegations are

thoroughly assessed and appropriately addressed. The reporting process is designed to protect the

confidentiality of the reporting party while promoting a transparent and responsive investigative procedure.

Employees are encouraged to report any actions reasonably suspected to breach legal, ethical, or safety

standards. In cases where reports involve external partners, such as dealers and suppliers, these concerns

are evaluated with the same level of scrutiny. The compliance department plays a central role in coordinating

investigations and has direct access to the Board of Directors, ensuring high-level oversight and effective

resolution of any identified concerns.

Anti-Corruption and Anti-Bribery Policies in Place

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

CSG has implemented comprehensive anti-corruption and anti-bribery policies that are consistent with the

United Nations Convention against Corruption. These policies are embedded in the Group's Compliance

Program and are governed by the Code of Ethics, which outlines clear expectations for all employees,

management, and relevant external partners. As the Code of Ethics is based on the requirements of

Transparency International’s Defence Companies Index—an index aligned with the UN Convention—CSG’s

adherence to international anti-corruption and anti-bribery standards is ensured. The policies prohibit all forms

of corrupt and bribery-related behavior, including facilitation payments, even in jurisdictions where such

payments may be legally permissible. Strict rules govern corporate hospitality, gifts, and sponsorships to

prevent inappropriate or excessively luxurious offerings. Sponsorship donations tied to business opportunities

and gifts to political parties and movements are explicitly forbidden. CSG employees, particularly those in

sales and marketing, are required to familiarize external partners with the relevant portions of the anti-

corruption and anti-bribery program. The Board of Directors holds ultimate responsibility for overseeing these

policies, while the Compliance Department ensures their ongoing application and integration into daily

operations. This structured approach ensures that all business activities conducted by CSG uphold the highest

standards of integrity, transparency, and ethical conduct across all operational markets.

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Protection of Whistleblowers

This chapter relates to the sustainability matter “G1_SM_38: Whistleblowing and Reporting.”

Within the Group, CSG has implemented robust whistleblower protection policies as part of its broader

Compliance Program. These policies ensure that employees, contractors, shareholders, and other third parties

can report suspected violations of law or ethical standards securely and anonymously. Reports are handled

in line with Directive (EU) 2019/1937 of the European Parliament and related Czech legislation, guaranteeing

whistleblowers protection of their identity and immunity from retaliation. The preferred reporting channel is a

specific secure web-based platform that is available 24/7 via web and mobile applications, supporting

anonymous submissions and secure follow-up communication. Reports are reviewed and verified by an

independent, competent person to ensure confidentiality and impartiality. Additional reporting options include

a dedicated telephone hotline, the option of reporting in person to designated personnel, and an external

notification system provided by the Ministry of Justice of the Czech Republic.

Procedures for Independent Business Conduct Investigations

This chapter relates to the sustainability matter “G1_SM_40: Legal Compliance and Investigations”

CSG is fully committed to investigating all business-conduct incidents promptly, independently, and

objectively. Its Compliance Program incorporates a dedicated reaction component that ensures

comprehensive internal investigations whenever potential compliance violations are identified. Investigations

are triggered through findings from regular monitoring activities, audits, management reviews, or reports

received via the Ethics Hotline. All investigations are conducted with impartiality and confidentiality by

independent, competent personnel, ensuring that their outcomes are based on objective assessments. The

structured approach used also includes taking corrective actions to address identified issues and

implementing measures to prevent recurrence, thereby upholding the Group’s commitment to ethical business

conduct.

Animal Welfare Policies in Place

The sustainability matter “G1_SM_41: Animal Welfare”, was assessed as non-material across all CSG sectors.

Business Conduct Training Policy

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training.”

CSG prioritizes a comprehensive compliance education program for all employees and members of its elected

bodies, with a strong emphasis on business conduct. Training sessions are systematically organized to ensure

that all employees receive thorough instruction on compliance standards, company values, and corporate

culture from the outset of their employment. Refresher courses are conducted at least once every three years

to maintain awareness of evolving compliance requirements. Attendance and the contents of training sessions

are documented in accordance with internal regulations to ensure accountability and enable effective

compliance monitoring. CSG also collaborates with Transparency International to enhance the effectiveness

and relevance of its training programs. Additionally, specialized training is provided for security personnel,

emphasizing the protection of human rights and safety within Group activities. While these practices and

training sessions are well-established, they do not currently constitute a formalized policy, but they may be

considered for inclusion in the upcoming Policy Framework.

High-Risk Functions for Corruption and Bribery

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

Within CSG, the functions identified as most at-risk in relation to corruption and bribery are the Board of

Directors, Management, and Sales. The Compliance Program mandates that employees in these high-risk

functions adhere to stringent anti-corruption policies, including the communication of these policies to

external partners such as dealers and suppliers. The Compliance Department plays a central role in evaluating

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business opportunities and transactions involving these functions, focusing on corruption risk factors such as

sector involvement, country-specific Transparency International rankings, and procurement methods.

G1-2

4.3. Management of Relationships with

Suppliers

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter G1_SM_36: Corporate Culture and Ethics.

Executive Summary

CSG prioritizes strong supplier relationships by enhancing procurement capabilities, managing supply chain

risks, and engaging stakeholders on sustainability issues such as transparency, environmental impacts, and

labor rights. The “Know your Partner” process supports these efforts by assessing financial, security, and

reputational risks, while CSG’s supplier selection process emphasizes practices that promote sustainability,

social welfare, and responsible operations. CSG does not have a formal policy addressing late payments to

SMEs, relying instead on robust legal frameworks like the EU Late Payment Directive (2011/7/EU) in its core

markets of the Czech Republic, Slovakia, and the European Union. However, recent international expansion

into regions with differing regulations has led the Group to consider developing internal guidelines to ensure

consistency and fairness in supplier-payment practices.

Policy to Prevent Late Payments to SMEs

CSG does not have a formal policy specifically addressing late payments, particularly to SMEs, as the Group

has historically operated primarily within the Czech Republic, Slovakia, and the European Union, where

stringent regulations—such as the EU Late Payment Directive (2011/7/EU)—govern payment terms and

practices. These regulations ensure that late payments are addressed through robust legal frameworks,

reducing the need for additional internal policies. However, with CSG’s growing international presence over

the past year and expansion into territories where legal requirements regarding payment practices differ, the

Group recognizes that variations in local regulations may necessitate further internal considerations. As part

of its evolving approach to sustainable procurement, the Sustainability Committee may, in the future, evaluate

the potential development of additional guidelines related to supplier payment practices to ensure consistency

and fairness across all operational markets.

Approach to Supplier Relationships

CSG’s approach to supplier relationships focuses on enhancing procurement capabilities, engaging

stakeholders, and managing risks within the supply chain. The Group emphasizes the training of procurement

teams to address sustainability challenges and selectively engages with stakeholders to discuss key topics,

including transparency, traceability, environmental impacts, and labor rights. Its “Know your Partner” process

supports the management of supplier relationships by monitoring for potential financial, security, and

reputational risks, ensuring alignment with sustainability considerations throughout the supply chain.

Supplier Selection Based on Social and Environmental Criteria

CSG recognizes the importance of integrating social and environmental criteria into the selection of supply-

side contractual partners. Current approaches involve monitoring suppliers through the “Know your Partner”

process, which helps assess financial stability, reputational considerations, and operational integrity. While

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formalized criteria for selecting sustainable suppliers are not explicitly outlined, the Group emphasizes

supplier practices that support sustainability, social welfare, and responsible operations across its supply

chain.

G1-3

4.4. Prevention and Detection of

Corruption and Bribery

Executive Summary

CSG’s comprehensive strategy for addressing corruption and bribery is centered on its Compliance Program,

which is overseen by its Compliance Department. This program incorporates clear policies, risk assessments,

and due diligence processes such as the “Know Your Partner” initiative. Independent investigations,

supported by an ethics hotline and internal controls, ensure objectivity and transparency, with outcomes

reported to relevant governing bodies. Policies are communicated through C-level executives by way of

workshops, seminars, intranet, and handbooks. Comprehensive training, including specialized sessions for

high-risk functions, reinforces compliance standards, with collaboration from Transparency International

enhancing effectiveness. Although some training-data specifics are unavailable, CSG’s commitment to ethical

business conduct remains clear through its structured practices and continuous improvement efforts.

System to Prevent, Detect, and Respond to Corruption and Bribery

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

CSG has a comprehensive Compliance Program that integrates robust procedures to prevent, detect, and

address corruption and bribery. Its Compliance Department holds primary responsibility for overseeing these

procedures and ensuring their effective implementation. CSG’s prevention measures include clear anti-

corruption and anti-bribery policies embedded within its Code of Ethics, which applies to all employees,

management, and external partners. The program also emphasizes risk assessment processes, in particular

the “Know Your Partner” initiative, which ensures due diligence in supplier relationships to reduce risks related

to financial integrity and reputation. Detection processes rely on internal controls, regular audits, and a

dedicated ethics line for reporting concerns. All allegations are subject to thorough investigation by competent

personnel, ensuring that appropriate corrective actions are taken to address violations and prevent

recurrence.

Independent Investigators for Corruption and Bribery

This chapter relates to the sustainability matter “G1_SM_40: Legal Compliance and Investigations.”

CSG ensures that investigations related to allegations of corruption and bribery are conducted promptly,

independently, and objectively. The Compliance Program includes a dedicated reaction component that

guarantees internal investigations are handled by independent, competent personnel who are separate from

the management chain responsible for prevention and detection activities. Investigations are initiated through

regular monitoring, audits, management reviews, or reports received via the Ethics Hotline. The investigative

process is conducted with impartiality and confidentiality, ensuring that outcomes are based on objective

assessments. This separation of investigative functions from management roles maintains high standards of

integrity, accountability, and ethical business conduct across the Group.

Anti-Corruption and Bribery Prevention Training

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

CSG’s Compliance Program includes anti-bribery and anti-corruption measures but does not currently define

standardized training requirements such as topics, frequency, or duration. While its subsidiaries have

implemented various training programs, the absence of a unified framework makes it difficult to consolidate

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this data at the group level. Training records vary in format, scope, and tracking methodologies, making

aggregation complicated and limiting the ability to quantify total training hours, session frequency, or content

themes.

As a result, while insight can be provided into the overall state of anti-corruption and anti-bribery training, the

lack of standardization prevents a comprehensive assessment of training coverage and effectiveness across

subsidiaries. Differences in reporting practices also hinder comparability, as subsidiaries operate within

distinct regulatory environments and industry-specific compliance structures. A single consolidated figure

would not accurately reflect the effectiveness or scope of training across the Group.

As CSG refines its governance framework, a review of the 2024 reporting cycle may help identify

opportunities to improve data standardization, enhance reporting consistency, and support the development

of a more aligned approach to training across subsidiaries.

Reporting Process to Management and Supervisory Bodies

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

The Compliance Department plays a central role in overseeing investigations and maintains direct access to

the Board of Directors. The outcomes of all investigations are communicated to administrative, management,

and supervisory bodies through structured reporting channels. This process ensures transparency and

accountability while allowing leadership to make informed decisions regarding corrective measures and future

preventive strategies.

Procedures for Preventing and Addressing Corruption and Bribery

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

CSG already has an existing system to prevent, detect, and investigate allegations or incidents of corruption

and bribery, which includes training for employees. This is the company-wide Compliance Program, which

includes mandatory guidance on anti-corruption and anti-bribery training. However, resource constraints as

well as regional differences still lead to variance between companies. CSG is committed to developing a

comprehensive plan to achieve better adherence to group policies on corruption and bribery across all its

regions, using the baseline data gathered during this reporting year to inform targeted actions and set

measurable targets starting next year.

Communication of Policies

This chapter relates to the sustainability matter “G1_SM_37: Anti-Corruption and Anti-Bribery.”

Policies related to the prevention and detection of corruption and bribery are communicated from the CSG

level to the C-level executives within the Group’s individual companies. It is the responsibility of these

executives to disseminate relevant information to employees using various methods tailored to their

operational contexts. These methods include workshops, seminars, intranet portals, employee handbooks,

and other communication tools.

Training

Details of Anti-Corruption and Anti-Bribery Training

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training & G1_SM_37: Anti-Corruption and

Anti-Bribery.”

CSG offers comprehensive anti-corruption and anti-bribery training as a critical component of its compliance

education program. This training covers essential topics such as compliance standards, company values, and

corporate culture. It includes refresher sessions at least once every three years and specialized training

tailored to high-risk functions such as those in sales, management, and the Board of Directors. The training is

further strengthened by collaboration with Transparency International, enhancing the curriculum’s depth and

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relevance. Additionally, specialized training sessions are conducted for security personnel to ensure their

alignment with human rights and safety standards.

Training Coverage of At-Risk Functions

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training.”

CSG has comprehensive training programs targeting high-risk functions, including those in the Board of

Directors, Management, and Sales, and the exact percentage of at-risk functions covered by these training

programs is 100%.

Training Coverage for Management and Supervisory Bodies

This chapter relates to the sustainability matter “G1_SM_39: Business Conduct Training.”

Members of the Board of Directors, management, and other relevant administrative bodies undergo anti-

corruption and anti-bribery training as part of CSG’s compliance education program. This ensures that key

decision-makers possess the knowledge and skills necessary to oversee and implement anti-corruption

measures effectively, aligning their responsibilities with CSG’s broader commitment to ethical business

conduct.

G1-4

4.5. Incidents of Corruption or Bribery

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter G1_SM_37: Anti-Corruption and Anti-Bribery.

Convictions for Violations of Anti-Corruption and Anti-Bribery Laws

No convictions for violations of anti-corruption or anti-bribery laws were reported during the reporting

period. Compliance measures are maintained across CSG’s subsidiaries so as to mitigate legal and ethical

risks. While no incidents of corruption or bribery occurred in 2024, a development occurred in a legacy

case regarding MSM Martin, s.r.o. originating in 2020; further details are disclosed in Note 37 of the Notes

to the Consolidated Financial Statements.

Fines for Violations of Anti-Corruption and Anti-Bribery Laws

As no violations were recorded, no fines were imposed. CSG’s Compliance Program and oversight

structures continue to support adherence to anti-corruption and anti-bribery regulations.

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G1-5

4.6. Political Influence and Lobbying

Activities

Sustainability Matters in Topical ESRS

This chapter relates to the sustainability matter G1_SM_36: Corporate Culture and Ethics.

Executive Summary

This chapter outlines CSG’s approach to political influence and political contributions, in line with Group

policies. At the Group level, the Board of Directors is responsible for overseeing activities in this area, while

at the company level, the Chief Executive Officer maintains this responsibility. Companies within the Group

never provide any material or non-material support to political parties or movements. Although some Group

companies are members of national Chambers of Commerce due to their prominence and role as key

employers, these memberships are solely for informational purposes related to industry legislation and do not

serve political objectives. Consequently, estimating the monetary value of such fees is not applicable. As no

financial or in-kind political contributions have been made, a breakdown by country cannot be provided.

Information about Representatives Responsible in Administrative,

Management and Supervisory Bodies for Oversight of Activities Related to

Political Influence and Lobbying

At the Group level, the responsibility for overseeing activities related to material impacts, risks, and

opportunities lies with the Board of Directors. However, in line with the Group policies, companies do not

provide any material or non-material support to political parties or movements. At the individual company

level, there is typically no specifically designated person covering this responsibility. In most cases, the Chief

Executive Officer assumes accountability for overseeing relevant activities within their respective entities,

should such activities arise.

Information about Financial or In-Kind Political Contributions

Companies do not provide any material or non-material support to political parties or movements, in

accordance with CSG’s Group policies.

Total Financial Political Contributions Made

The Group’s companies do not provide any material or non-material support to political parties or movements,

in accordance with CSG’s Group policies. For the purposes of this disclosure, financial political contributions

refer to any form of monetary support provided directly to political parties, their elected representatives, or

individuals seeking political office. Such contributions may include donations, loans, sponsorships, advance

payments for services, or the purchasing of tickets for fundraising events and other similar practices.

Total In-Kind Political Contributions Made

Within the Group, companies do not provide any material or non-material support to political parties or

movements. However, certain CSG entities are members of the Chambers of Commerce of countries where

they maintain a significant presence, either due to their size or their role as key employers in certain regions.

Membership in these institutions is considered part of their responsibility to engage with the broader business

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community. The associated fees paid for such memberships are strictly administrative and are not intended

for political purposes. While exact figures related to these administrative fees are not available, CSG confirms

that these payments do not constitute in-kind political contributions under the scope of this disclosure.

Disclosure of How Monetary Value of In-Kind Contributions Is Estimated

Since the companies within CSG do not provide any material or non-material support to political parties or

movements, estimation of the monetary value of direct or in-kind political contributions is not applicable.

Disclosure of Main Topics Covered by Lobbying Activities and Undertaking’s

Main Positions on These Topics

As previously noted, CSG’s companies do not provide any material or non-material support to political parties

or movements. Their involvement in national Chambers of Commerce is solely due to their significant

presence in certain regions and their positions as leaders within their respective industries. Their participation

in these institutions does not aim to advance political objectives or promote favorable policies.

Undertaking is Registered in EU Transparency Register or in Equivalent

Transparency Register in Member State

None of the companies within the Group are members of any transparency registers.

Information about Appointment of Members of Administrative, Management

and Supervisory Bodies Who Held Positions in Public Administration in the

Last Two Years

Across the Group, only a single company has a member of its administrative, management, or supervisory

bodies appointed in 2024 who has previously held a position in public administration within the two years

preceding their appointment. In this specific instance, CSG does not consider this appointment to be contrary

to Group policies, as the company in question is co-owned by the national government of the respective

country. The individual thus serves as a representative of the shareholder’s interests.

Financial and In-Kind Political Contributions Made by Country

Since CSG’s companies do not provide any material or non-material support to political parties or movements,

in accordance with CSG’s Group policies, no such contributions have been made across the Group, and

therefore, it is not possible to provide a table breaking down financial or in-kind political contributions by

country.

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Annex 1: List of Phase-in ESRS Data Points

in accordance with Appendix C to ESRS 1

Phase-In Data Points (Table ID 40)

Chapter

Data Point

2.2.10. Anticipated Financial Effects from Material Physical Risks

E1-9_01 – E1-9_44

2.3.7. Anticipated Financial Effects from Material Pollution-related Risks and

Opportunities

E2-6_01 – E2-6_11

2.4.6. Anticipated Financial Effects from Material Water- and Marine-Resources-

Related Risks and Opportunities

E3-5_01 – E3_5_06

2.5.6. Anticipated Financial Effects from Material Resource Use and Circular-

Economy-Related Risks and Opportunities

E5-6_01 – E5-6_06

3.1.12. Social protection

S1-11_06 – S1-11_11

3.1.14. Training and skills development metrics

S1-13_01 – S1-13_04

3.1.16. Work-life balance metrics

S1-15_02 - S1-15_04

Czechoslovak Group

Annual Report 2024

200

CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED

DECEMBER 31, 2024

Company Name: CZECHOSLOVAK GROUP a.s.

Registered Office: U Rustonky 714/1, Karlín, 186 00 Prague 8,

Czech Republic

Legal Status: Joint Stock Company

Corporate ID: 034 72 302

Components of the Financial Statements:

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to Financial Statements

These financial statements were prepared on April 2, 2025.

Statutory body of the reporting entity:

Signature

David Chour

Vice-Chairman of the Board of Directors

Zdeněk Jurák

Member of the Board of Directors

Czechoslovak Group

Annual Report 2024

201

CZECHOSLOVAK GROUP a.s.

Consolidated Financial Statements for the Year Ended

December 31, 2024

Prepared under International Financial Reporting

Standards (IFRS)

as Adopted by the EU

Czechoslovak Group

Annual Report 2024

202

Table of contents

 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 204

CONSOLIDATED STATEMENT OF FINANCIAL POSITION 205

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY 207

CONSOLIDATED STATEMENT OF CASH FLOWS 209

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS 1

 1.DESCRIPTION OF THE GROUP 211

 2.STATEMENT OF COMPLIANCE 212

 3.BASIS OF MEASUREMENT 212

 4.ADOPTION OF NEW AND REVISED IFRS ACCOUNTING STANDARDS 213

 5.BASIS OF PREPARATION OF THE CONSOLIDATED FINANCIAL STATEMENTS 215

 6.FAIR VALUE MEASUREMENT 232

 7.CHANGES IN THE GROUP’S STRUCTURE 234

 8.REVENUES 240

 9.RAW MATERIAL AND CONSUMABLES 245

 10.EXTERNAL COSTS 245

 11.EMPLOYEE BENEFITS COSTS 245

 12.OTHER OPERATING INCOME 246

 13.OTHER OPERATING EXPENSES 246

 14.FINANCIAL INCOME AND EXPENSES 246

 15.INCOME TAX 246

 16.INTANGIBLE ASSETS AND GOODWILL 247

 17.PROPERTY. PLANT AND EQUIPMENT 253

 18.LEASES 254

 19.INVESTMENTS IN ASSOCIATES AND JOINT VENTURES 255

 20.FINANCIAL INSTRUMENTS 260

 21.TRADE AND OTHER RECEIVABLES AND OTHER ASSETS 264

 22.DEFERRED TAX ASSETS AND LIABILITIES 265

 23.INVENTORY 267

 24.TAX RECEIVABLES 267

 25.CASH AND CASH EQUIVALENTS 267

 26.EQUITY 267

 27.NON-CONTROLLING INTERESTS 269

 28.TRADE AND OTHER PAYABLES 273

 29.PROVISIONS 273

 30.TAX PAYABLES 274

 31.FINANCIAL GUARANTEES AND CONTINGENT LIABILITIES 274

 32.RISK MANAGEMENT METHODS 274

 33.CHANGES IN LIABILITIES ARISING FROM FINANCING ACTIVITIES 289

 34.OPERATING SEGMENTS 290

 35.RELATED PARTIES 296

 36.GROUP ENTITIES 297

 37.LEGAL DISPUTES 301

 38.SUBSEQUENT EVENTS 302

Czechoslovak Group

Annual Report 2024

203

Czechoslovak Group

Annual Report 2024

204

CONSOLIDATED STATEMENT OF PROFIT OR LOSS

AND OTHER COMPREHENSIVE INCOME

For the year ended December 31, 2024

In EUR thousand (EUR ‘000)

Note

For the year ended

December 31, 2024

For the year ended

December 31, 2023

Revenues

4,008,614

1,734,430

Raw material and consumables

(2,157,664)

(840,848)

External costs

(442,284)

(245,255)

Employee benefits expense

(286,212)

(222,385)

Depreciation and amortisation expenses

16,17

(66,291)

(60,654)

Other operating income

61,028

46,486

Other operating expense

(104,318)

(33,647)

Profit from operating activities

1,012,873

378,127

Financial income

165,850

23,154

Financial expense

(378,336)

(104,107)

Profit /(loss) from other financial instruments

43,526

(20,659)

Profit from financing activities

(168,960)

(101,612)

Share of profit/(loss) from associates & JVs, net

(300)

647

Profit (loss) from the sale of equity interests

2,225

1,766

Profit before tax

845,838

278,928

Income tax

(212,451)

(68,717)

Net profit from continuing operations

633,387

210,211

Total profit

633,387

210,211

Other comprehensive income

Items not reclassified to profit/loss

FX differences from presentation currency

5,491

(2,046)

Items that are or may be subsequently reclassified to

profit or loss

FX differences on foreign operations, net

(1,477)

(2,908)

Fair value gain/(loss) on hedging instruments

1,474

1,196

Share of OCI of associates & JV, net of tax

—

(501)

Other comprehensive income, net

5,488

(4,259)

Total comprehensive income

638,875

205,952

Profit attributable to:

Shareholders of the Company

526,074

174,055

Non-controlling interest

107,313

36,156

Profit for the year

633,387

210,211

Total comprehensive income attributable to:

Shareholders of the Company

531,562

169,796

Non-controlling interest

107,313

36,156

Total comprehensive income for the year

638,875

205,952

Czechoslovak Group

Annual Report 2024

205

CONSOLIDATED STATEMENT OF FINANCIAL

POSITION

As of December 31, 2024

In EUR thousand (EUR ‘000)	Note	December 31,	December 31,
		2024	2023
Assets
Non – current assets
Intangible assets	16	289,636	217,482
Goodwill	16	2,021,760	416,910
Property, plant and equipment	17,18	653,588	373,073
Investment property		5,848	2,572
Investments in associates and joint ventures	19	83,923	103,499
Loans and other financial assets	20	77,206	171,518
Trade and other receivables	21	24,666	2,392
Prepayments made and deferred expenses and accrued	21	154,534	15,046
income
Deferred tax asset	22	26,773	11,640
Contract costs	8	60,437	41,185
Total non-current assets		3,398,371	1,355,317
Current assets
Inventory	23	2,160,141	860,245
Trade and other receivables	21	520,233	218,044
Loans and other financial assets	20	69,474	102,091
Prepayments made and deferred expenses and accrued	21	584,886	208,786
income
Tax receivables	24	21,381	19,331
Current income tax receivable		7,401	7,458
Cash and cash equivalents	25	1,248,487	563,865
Assets classified as held for sale		—	1,979
Contract Assets	8	18,913	15,211
Total current assets		4,630,916	1,997,010
Total assets		8,029,287	3,352,327
Equity
Share capital	26	78,427	78,427
Other reserves	26	65,931	(139,845)
Translation reserve	26	38,150	34,136
Retained earnings of past years including profit or loss for the current accounting period		998,070	487,720
Equity attributable to the Company’s shareholders		1,180,578	460,438
Non-controlling interests	27	313,307	226,478
Total equity		1,493,885	686,916
Liabilities
Non-current liabilities
Liability from put option	20	5,260	176,451
Loans and borrowings	20	1,140,402	456,940
Other financial instruments	20	94,542	40,436
Trade and other payables	28	149,297	11,026
Provisions	29	12,792	10,180
Deferred tax liability	22	79,616	65,672
Bonds	20	1,000,830	278,073

Czechoslovak Group

Annual Report 2024

206

In EUR thousand (EUR ‘000)	Note	December 31,	December 31,
		2024	2023
Contract liabilities	8	352,229	103,553
Total non-current liabilities		2,834,968	1,142,331
Current liability
Liability from put option	20	143,517	—
Loans and borrowings	20	772,094	300,459
Other financial instruments	20	57,622	9,109
Trade and other payables	28	1,956,951	345,759
Provisions	29	18,314	3,233
Tax liabilities	30	45,050	15,264
Current income tax payable	30	174,185	52,913
Contract liabilities	8	527,836	736,971
Bonds	20	4,865	59,372
Total current liabilities		3,700,434	1,523,080
Total liabilities		6,535,402	2,665,411
Total equity and liabilities		8,029,287	3,352,327

Czechoslovak Group

Annual Report 2024

207

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

For the year ended December 31, 2024

Attributable to the shareholders of the Company

				Foreign			Non-
In EUR thousand (EUR ‘000)		Share capital	Other	exchange	Retained	Total	controlling	Total equity
			reserves	translation	earnings		interests
				reserve
Balance at January 1, 2024 (A)	26	78,427	(139,845)	34,136	487,720	460,438	226,478	686,916
Total comprehensive income for the year:
Profit for the year (B)		—	—	—	526,074	526,074	107,313	633,387
Other comprehensive income:
Foreign exchange differences on translation of foreign		—	—	(1,477)	—	(1,477)	—	(1,477)
operations recycled
Foreign exchange differences on translation of foreign		—	—	5,491	—	5,491	—	5,491
operations non-recycled
Fair value gain/(loss) arising on hedging instruments during the period		—	1,474	—	—	1,474	—	1,474
Total other comprehensive income (C)		—	1,474	4,014	—	5,488	—	5,488
Total comprehensive income for the year (D) = (B + C)		—	1,474	4,014	526,074	531,562	107,313	638,875
Additions and disposals:
Changes in non-controlling interests without a change of control	27	—	858	—	(9,164)	(8,306)	(5,594)	(13,900)
Effects of acquisitions in the form of business combinations	7	—	—	—	—	—	1,064	1,064
Change in present value of put option liability		—	27,674	—	—	27,674	—	27,674
Capital contribution		—	169,210	—	—	169,210	—	169,210
Dividends	26	—	—	—	—	—	(15,954)	(15,954)
Total additions and disposals (E)		—	197,742	—	(9,164)	188,578	(20,484)	168,094
Transfer in equity		—	6,560	—	(6,560)	—	—	—
Total transfers in equity (F)		—	6,560	—	(6,560)	—	—	—
Balance at December 31, 2024 (H) = (A + D + E + F)		78,427	65,931	38,150	998,070	1,180,578	313,307	1,493,885

Czechoslovak Group

Annual Report 2024

208

For the year ended December 31, 2023

Attributable to the shareholders of the Company

				Foreign			Non-
In EUR thousand (EUR ‘000)		Share capital	Other	exchange	Retained	Total	controlling	Total equity
			reserves	translation	earnings		interests
				reserve
Balance at January 1, 2023 (A)	26	78,427	(131,960)	39,090	331,024	316,581	177,451	494,032
Total comprehensive income for the year:
Profit for the year (B)		—	—	—	174,055	174,055	36,156	210,211
Other comprehensive income:
Foreign exchange differences on translation of foreign operations		—	—	(2,908)	—	(2,908)	—	(2,908)
recycled
Foreign exchange differences on translation of foreign operations		—	—	(2,046)	—	(2,046)	—	(2,046)
non-recycled
Share of the other comprehensive income of equity accounted		—	—	—	(501)	(501)	—	(501)
investees, net of tax
Fair value gain/(loss) arising on hedging instruments during the period		—	1,196	—	—	1,196	—	1,196
Total other comprehensive income (C)		—	1,196	(4,954)	(501)	(4,259)	—	(4,259)
Total comprehensive income for the year (D) = (B + C)		—	1,196	(4,954)	173,554	169,796	36,156	205,952
Additions and disposals:
Changes in non-controlling interests without a change of control	27	—	3,409	—	(14,889)	(11,480)	15,988	4,508
Effects of acquisitions in the form of business combinations	7	—	616	—	—	616	3,390	4,006
Effects of subsidiaries sold		—	(14)	—	226	212	(212)	—
Conditional commitment to acquire non-controlling share		—	(4,800)	—	—	(4,800)	—	(4,800)
Change in present value of put option liability		—	(10,487)	—	—	(10,487)	—	(10,487)
Dividends	26	—	—	—	—	—	(6,295)	(6,295)
Total additions and disposals (E)		—	(11,276)	—	(14,663)	(25,939)	12,871	(13,068)
Transfer in equity		—	2,195	—	(2,195)	—	—	—
Total transfers in equity (F)		—	2,195	—	(2,195)	—	—	—
Balance at December 31, 2023 (H) = (A + D + E + F)		78,427	(139,845)	34,136	487,720	460,438	226,478	686,916

209

CONSOLIDATED STATEMENT OF CASH FLOWS

For the year ended December 31, 2024

In EUR thousand (EUR ‘000)	Note	For the year ended	For the year ended
CASH FLOWS FROM OPERATING ACTIVITIES		December 31, 2024	December 31, 2023
Profit for the period		633,387	210,211
Adjustments for:
Amortisation/depreciation of fixed assets	16,17	66,291	60,654
Impairment of inventory		4,757	(696)
Impairment of property, plant and equipment		1,551	(40)
Impairment of financial assets		(8,272)	(1,462)
Gain (-) /loss (+) from the sale of property, plant
and equipment, investment property and intangible assets	12,13	44	(13,688)
Gain (-) / loss (+) from the sale of inventory	12,13	11,100	818
Gain (-) / loss (+) from financial instruments		(22,999)	12,336
Gain (-) / loss (+) from the disposal of subsidiaries		(2,225)	(1,766)
Net interest income (-) / expense (+)	14	93,381	68,236
Recognition (+) / release (-) of allowances for trade		30,896	16,458
and other receivables, write-offs
Recognition (+) / release (-) of provisions	13	13,190	638
Income tax	15	212,451	68,717
Unrealised foreign exchange rate (gains)/losses, net		(39,926)	2,129
Share of profit (-) /loss (+) of associates and joint	19	300	(647)
ventures
Other		(1,594)	107
Operating cash flows before movements in working capital		992,332	422,005
Increase (-) / decrease (+) in trade receivables and other assets*		(655,669)	(218,828)
Increase (-) / decrease (+) in inventory (including		(969,047)	(318,332)
income from sale)
Increase (+) / decrease (-) in trade and other payables**		1,573,793	366,906
Cash generated by operations		941,409	251,751
Income taxes paid		(85,353)	(52,622)
Net cash from operating activities		856,056	199,129
CASH FLOWS FROM INVESTING ACTIVITIES
Proceeds on disposal of property, plant and equipment, investment property and intangible assets		5,190	4,589
Proceeds on disposal of subsidiaries		6,997	19,002
Repayment of provided loans		122,224	83,095
Interest received		39,804	10,245
Acquisition of property, plant and equipment, investment property and intangible assets	16,17	(116,804)	(74,246)
Acquisition of investments in subsidiaries, net of cash	7	(2,104,399)	(47,714)
acquired
Loans provided		(35,615)	(65,429)
Net cash (used in)/from investing activities		(2,082,603)	(70,458)
CASH FLOWS FROM FINANCING ACTIVITIES
Proceeds from borrowings		1,405,515	252,331
Proceeds on bond placements		770,746	181,317
Repayments of borrowings		(246,514)	(121,306)
Costs related to bond placements		(58,436)	(2,327)
Payments of bonds		(51,663)	(30,399)

Czechoslovak Group

Annual Report 2024

In EUR thousand (EUR ‘000)	Note	For the year ended	For the year ended
		December 31, 2024	December 31, 2023
Dividends paid		(15,954)	(6,295)
Payments of obligations under leases		(8,828)	(7,955)
Interest paid		(79,299)	(79,164)
Other equity contribution		214,244	—
Effect of changes in non-controlling interests		(10,750)	4,507
Net cash (used in)/from financing activities		1,919,06 1	190,709
Net increase/decrease in cash and cash equivalents		692,514	319,380
Cash and cash equivalents at beginning of year		563,865	241,650
Foreign exchange rate gains (+) / losses (-) from the translation of cash and cash equivalents		(7,892)	2,835
Cash and cash equivalents at end of period		1,248,487	563,865

* Increase (-) /decrease (+) in receivables and other assets includes trade and other receivables, prepayments made,

deferred expenses and accrued income, and tax receivables, with the exception of the income tax receivable.

** Increase (+) /decrease (-) in trade and other payables includes trade and other payables, financial instruments and

financial liabilities, deferred income, and tax payables, with the exception of the income tax payable.

210

Czechoslovak Group

Annual Report 2024

211

Notes to Consolidated Financial Statements

1. Description of The Group

CZECHOSLOVAK GROUP a.s. (the “Parent Company” or the “Company” or “CSG”) is a joint stock company

formed in compliance with the legal regulations of the Czech Republic on October 13, 2014. Its registered

office is located at U Rustonky 714/1, Karlín, 186 00 Prague 8, Czech Republic.

The Company’s consolidated financial statements covering the year ended December 31, 2024, encompass

the financial statements of the Parent Company, its subsidiaries, and associates or joint ventures (jointly

referred to as the “Group” or the “CSG Group”). The entities included in the Czechoslovak Group are

disclosed in Note 36—Group Entities, and primarily include entities operating in the Czech Republic,

Slovakia, Italy and USA.

CZECHOSLOVAK GROUP’s strategy involves long-term operations and expansion into segments of

traditional Czech and Slovak industries with strong export potential. The vast majority of these activities are

focused on the B2B or B2G segments. Business activities focusing on end consumers are marginal. The

Group’s activities are primarily focused on the arms, engineering, automotive, aircraft and rail transport

industries.

The Parent Company gradually acquired the subsidiaries as part of joint arrangements and via third parties

(refer to Note 7 for details on the acquisitions made in 2024 and 2023).

The Group’s formation and subsequent adjustments to its operational and managerial framework have been

implemented to leverage synergies. The Group has also combined and unified its financing structure.

As of December 31, 2024, the Company’s sole shareholder was CSG FIN a.s., which, as the sole

shareholder, acted as the Company’s ultimate authority.

As of December 31, 2024, the Company’s sole shareholder was as follows:

	Shares Ownership percentage		Voting rights
December 31, 2024
	EUR ‘000	%	%
CSG FIN a.s., Corporate ID:	78,427	100	100
141 41 442
Total shares	78,427	100 As of December 31, 2024, the Group’s ultimate owner was Michal Strnad.	100

Composition of the Board of Directors as of December 31, 2024:
— Michal Strnad	(Chairman of the Board of Directors)
— David Chour	(Vice-Chairman of the Board of Directors)
— Ladislav Štorek	(Vice-Chairman of the Board of Directors)
— Petr Formánek	(Member of the Board of Directors)
— David Štěpán	(Member of the Board of Directors)
— Zdeněk Jurák	(Member of the Board of Directors)
— Lukáš Andrýsek	(Member of the Board of Directors)

Czechoslovak Group

Annual Report 2024

212

Composition of the Supervisory Board as of December 31, 2024:
Michaela Katolická ...........	(Chairman of the Supervisory Board)
Aleš Klepek .......................	(Member of the Supervisory Board)
Rudolf Bureš ..................... The consolidated financial statements were authorised for issue by the Board of Directors on April 2, 2025. The financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS Accounting Standards) adopted by the European Union. Furthermore, the consolidated financial statements have been drawn up on a going concern basis and using the conventional historical cost basis, except for in the event the measurement of financial assets and liabilities that required the application of the of fair value criterion. The consolidated financial statements are presented in euro (“EUR”), which has been the presentation currency set by the CSG Group since January 1, 2021. The Company’s functional currency is the Czech crown (“CZK”). Each entity included to the consolidated financial statements determine the functional currency in accordance with the requirements of IAS 21. All amounts included in this document are presented in thousands of euros, unless otherwise indicated. The reason for the presentation currency is that EUR suits the needs of the primary users of the financial statements better than CZK. The consolidated financial statements are prepared using consistent accounting policies over the whole period covered by the financial statements (i.e. both the current and comparative periods). These accounting policies are in line with the IFRS applicable at the end of the reporting period i.e., December 31, 2024. The detailed application of consolidation methods is described further in Note 5. The consolidated financial statements have been prepared on a historical cost basis, except for the following assets and liabilities stated at their fair value: financial instruments at fair value through profit & loss (“FVTPL”) (incl. Those designated upon initial recognition as at FVTPL). Financial assets and liabilities as well as non-financial assets and liabilities measured at historical cost are stated at amortised cost (“AC”) using the effective interest method or historical cost, as appropriate, net of any relevant impairment and The Group accounts for business combinations using the acquisition method when control is transferred to the Group (refer to note 7). In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes at a minimum an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has the option to apply a ‘concentration test’ that permits a simplified assessment of whether an acquired set of activities and assets meets the definition of a business. The optional concentration test is met if substantially all fair value of the gross assets acquired is concentrated in a single identifiable asset or group of similar The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on bargain purchase is recognized in profit or loss immediately (refer to note 7). Transaction costs are expensed as incurred, expect if related to the issue of debt or equity securities.	(Member of the Supervisory Board) 2. Statement of Compliance 3. Basis of Measurement cumulative depreciation or cumulative amortisation. identifiable assets.

Czechoslovak Group

Annual Report 2024

213

The consideration transferred does not include amounts related to the settlement of pre-existing

relationships. Such amounts are generally recognized in profit or loss.

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay a

contingent consideration that meets the definition of a financial instrument is classified as equity, then it is

not re-measured and settlement is accounted for within equity. Otherwise, other contingent considerations

are re-measured at fair value at each reporting date and subsequent changes in the fair value of the

contingent considerations are recognized in profit or loss.

4. Adoption of new and Revised IFRS Accounting Standards

A. Change in accounting policy

Recognition of written put options over non-controlling interest

Furthermore, the Group has adopted its policy related to written put options following recent guidance of

IFRS. Where the Group writes a put option, which if exercised triggers the purchase of non-controlling

interests as part of its business acquisition, the put option is recognized as a financial liability at the

acquisition date. Where risks and rewards remain with the non-controlling interests, a corresponding

amount is deducted from equity. Any subsequent changes to the carrying amount of the put option liability

are also recognized within equity.

Measurement period adjustments

During 2024, the Group has finalized the acquisition accounting of Armi Perazzi S.p.A. that was acquired in

December 2023. The comparative balance sheet as of December 31, 2023 has been revised to include the

impact to the provisional amounts recognized.

Recognition of own work capitalized

In 2023, the Group changed the recognition of Own Work Capitalized, which was previously reported under

“Other Operating Income” and reclassified under “Employee Benefits Cost”.

However, in 2024, the Group decided to revert to the original methodology, once again recognizing Own

Assets Capitalized under “Other Operating Income” to better reflect the nature of these transactions in the

financial statements.

	Corrected Value	Originally
(EUR ‘000)	as of Dec 31, 2023	recognised value	Difference
		as of Dec 31, 2023
Payroll costs	159,649	131,239	(28,410)
Own assets capitalised	28,410	—	(28,410)

B. New and amended IFRS Accounting Standards that are effective for the

current year

In the current year, the group has applied a number of new and amended IFRS Accounting Standards issued

by the International Accounting Standards Board (IASB) and adopted by the EU that are mandatorily

effective in the EU for an accounting period that begins on or after January 1, 2024. Their adoption has not

had any material impact on the disclosures or on the amounts reported in these financial statements.

Amendments to IAS 1 Presentation of Financial Statements – Classification of Liabilities as Current or Non-

Current

Czechoslovak Group

Annual Report 2024

214

The Group has adopted the amendments to IAS 1 for the first time in 2024. The amendments provide a more

general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in

place at the reporting date. Amendments to IAS 1 issued by IASB on 15 July 2020 defer the effective date by

one year to annual periods beginning on or after 1 January 2023.

Amendments to IFRS 16 Leases – Lease Liability in a Sale and Leaseback

The Group has adopted the amendments to IAS 1 for the first time in 2024. The amendments to IFRS 16

require a seller-lessee to subsequently measure lease liabilities arising from a leaseback in a way that it

does not recognise any amount of the gain or loss that relates to the right of use it retains. The new

requirements do not prevent a seller-lessee from recognising in profit or loss any gain or loss relating to the

partial or full termination of a lease.

Amendments to IAS 1 Presentation of Financial Statements – Non-current Liabilities with Covenants

The Group has adopted the amendments to IAS 1 for the first time in 2024. The amendments clarify how

conditions with which an entity must comply within twelve months after the reporting period affect the

classification of a liability.

Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures – Supplier

Finance Arrangements

The Group has adopted the amendments to IAS 1 for the first time in 2024. The amendments add disclosure

requirements, and ‘signposts’ within existing disclosure requirements to provide qualitative and quantitative

information about supplier finance arrangements.

C. New and revised IFRS Accounting Standards adopted by the EU in issue but

not yet effective

At the date of authorisation of these financial statements, the group has not applied the following revised

IFRS Accounting Standards that have been issued and adopted by the EU but are not yet effective in the EU:

Amendments to IAS 21

Lack of Exchangeability

Effective from January 1, 2025

The directors do not expect that the adoption of the amendments to the existing Standards listed above will

have a material impact on the consolidated financial statements of the group in future periods, except if

indicated below.

D. New and revised IFRS Accounting Standards issued by the IASB but not yet

adopted by the EU

The following amendments to the existing IFRS Accounting standards have not been endorsed for use in the

EU yet and could not therefore be adopted by the group:

(The effective dates stated below are for IFRS as issued by IASB. EU is expected to approve the

amendments with the same effective dates.)

IFRS 18	Presentation and Disclosures in Financial	Effective from January 1, 2027
	Statements

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	Subsidiaries without Public Accountability:
IFRS 19	Disclosure (Voluntary use for eligible	Effective from January 1, 2027
	subsidiaries)
Amendments to IFRS 1, IFRS 7, IFRS 9,	Annual Improvements to IFRS Accounting	Effective from January 1, 2026
IFRS 10 and IAS 7	Standards - Volume 11
Amendments to IFRS 9 and IFRS 7	Amendments to the Classification and	Effective from January 1, 2026
	Measurement of Financial Instruments
Amendments to IFRS 9 and IFRS 7	Contracts Referencing Nature-dependent	Effective from January 1, 2026
	Electricity
	Sale or Contribution of Assets between an	effective date deferred by IASB
Amendments to IFRS 10	Investor and its Associate or Joint Venture	indefinitely but earlier application
	and further amendments	permitted

The impact on the Company’s financial statements of new standards, amendments to the standards and

interpretations endorsed by EU which are not yet effective and have not been early adopted are being

analysed as of the date of the issuance of these financial statements and the final impact is unknown yet.

5. Basis of Preparation of the Consolidated Financial Statements

A. Going concern

The directors have, at the time of approving the financial statements, a reasonable expectation that the

group have adequate resources to continue in operational existence for the foreseeable future. Thus, they

continue to adopt the going concern basis of accounting in preparing the financial statements.

B. Basis of consolidation

The consolidated financial statements incorporate the financial statements of the parent company and

entities controlled by the parent company (its subsidiaries) made up to December 31, each year. Control is

achieved when the parent company:

— Has the power over the investee

— Is exposed, or has rights, to variable returns from its involvement with the investee

— Has the ability to use its power to affect its returns

The parent company reassesses whether or not it controls an investee if facts and circumstances indicate

that there are changes to one or more of the three elements of control listed above.

Consolidation of a subsidiary begins when the parent company obtains control over the subsidiary and

ceases when the parent company loses control of the subsidiary. Specifically, the results of subsidiaries

acquired or disposed of during the year are included in profit or loss from the date the parent company

gains control until the date when the parent company ceases to control the subsidiary.

Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting

policies used into line with the group’s accounting policies

All intragroup assets and liabilities, equity, income, expenses and cash flows relating to transactions

between the members of the group are eliminated on consolidation.

Non-controlling interests in subsidiaries are identified separately from the group’s equity therein. Those

interests of non-controlling shareholders that are present ownership interests entitling their holders to a

proportionate share of net assets upon liquidation may initially be measured at fair value or at the non-

controlling interests’ proportionate share of the fair value of the acquiree’s identifiable net assets. The

choice of measurement is made on an acquisition-by-acquisition basis. Other non-controlling interests are

initially measured at fair value.

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After acquisition, the carrying amount of non-controlling interests is the amount of those interests at initial

recognition plus the non-controlling interests’ share of subsequent changes in equity .

Profit or loss and each component of other comprehensive income are attributed to the owners of the

parent company and to the non-controlling interests. Total comprehensive income of the subsidiaries is

attributed to the owners of the parent company and to the non-controlling interests.

Changes in the group’s interests in subsidiaries that do not result in a loss of control are accounted for as

equity transactions. The carrying amount of the group’s interests and the non-controlling interests are

adjusted to reflect the changes in their relative interests in the subsidiaries. Any difference between the

amount by which the non-controlling interests are adjusted and the fair value of the consideration paid or

received is recognized directly in equity and attributed to the owners of the parent company.

When the group loses control of a subsidiary, the gain or loss on disposal recognized in profit or loss is

calculated as the difference between (i) the aggregate of the fair value of the consideration received and the

fair value of any retained interest and (ii) the previous carrying amount of the assets (including goodwill),

less liabilities of the subsidiary and non-controlling interests. All amounts previously recognized in other

comprehensive income in relation to that subsidiary are accounted for as if the group had directly disposed

of the related assets or liabilities of the subsidiary (i.e. reclassified to profit or loss or transferred to another

category of equity as required/permitted by applicable IFRS Accounting Standards). The fair value of any

investment retained in the former subsidiary at the date when control is lost is regarded as the fair value on

initial recognition for subsequent accounting under IFRS 9 Financial Instruments when applicable, or the

cost on initial recognition of an investment in an associate or a joint venture.

C. Business combinations

Acquisitions of businesses are accounted for using the acquisition method. The consideration transferred in

a business combination is measured at fair value, which is calculated as the sum of the acquisition-date fair

values of assets transferred by the group, liabilities incurred by the group to the former owners of the

acquiree and the equity interest issued by the group in exchange for control of the acquiree. Acquisition-

related costs are recognized in profit or loss as incurred.

At the acquisition date, the identifiable assets acquired and the liabilities assumed are recognized at their fair

value at the acquisition date, except that:

— Deferred tax assets or liabilities and assets or liabilities related to employee benefit arrangements are

recognized and measured in accordance with IAS 12 Income Taxes and IAS 19 Employee Benefits

respectively;

— Liabilities or equity instruments related to share-based payment arrangements of the acquiree or share-

based payment arrangements of the group entered into to replace share-based payment arrangements

of the acquiree are measured in accordance with IFRS 2 Share-Based Payments at the acquisition date

(see below); or

— Assets (or disposal groups) that are classified as held for sale in accordance with IFRS 5

— Non-current Assets Held for Sale and Discontinued Operations are measured in accordance with that

Standard

Goodwill is measured as the excess of the sum of the consideration transferred, the amount of any non-

controlling interests in the acquiree, and the fair value of the acquirer’s previously held equity interest in the

acquiree (if any) over the net of the acquisition-date amounts of the identifiable assets acquired and the

liabilities assumed. If, after reassessment, the net of the acquisition-date amounts of the identifiable assets

acquired and liabilities assumed exceeds the sum of the consideration transferred, the amount of any non-

controlling interests in the acquiree and the fair value of the acquirer’s previously held interest in the

acquiree (if any), the excess is recognized immediately in profit or loss as a bargain purchase gain.

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When the consideration transferred by the group in a business combination includes a contingent

consideration arrangement, the contingent consideration is measured at its acquisition-date fair value and

included as part of the consideration transferred in a business combination. Changes in fair value of the

contingent consideration that qualify as measurement period adjustments are adjusted retrospectively, with

corresponding adjustments against goodwill. Measurement period adjustments are adjustments that arise

from additional information obtained during the ‘measurement period’ (which cannot exceed one year from

the acquisition date) about facts and circumstances that existed at the acquisition date.

The subsequent accounting for changes in the fair value of the contingent consideration that do not qualify

as measurement period adjustments depends on how the contingent consideration is classified. Contingent

consideration that is classified as equity is not remeasured at subsequent reporting dates and its

subsequent settlement is accounted for within equity. Other contingent consideration is remeasured to fair

value at subsequent reporting dates with changes in fair value recognized in profit or loss.

When a business combination is achieved in stages, the group’s previously held interests (including joint

operations) in the acquired entity are remeasured to its acquisition-date fair value and the resulting gain or

loss, if any, is recognized in profit or loss. Amounts arising from interests in the acquiree prior to the

acquisition date that have previously been recognized in other comprehensive income are reclassified to

profit or loss, where such treatment would be appropriate if that interest were disposed of.

If the initial accounting for a business combination is incomplete by the end of the reporting period in which

the combination occurs, the group reports provisional amounts for the items for which the accounting is

incomplete. Those provisional amounts are adjusted during the measurement period (see above), or

additional assets or liabilities are recognized, to reflect new information obtained about facts and

circumstances that existed as of the acquisition date that, if known, would have affected the amounts

recognized as of that date.

D. Goodwill

Goodwill is initially recognized and measured as set out above.

Goodwill is not amortised but is reviewed for impairment at least annually. For the purpose of impairment

testing, goodwill is allocated to each of the group’s cash-generating units (or groups of cash-generating

units) expected to benefit from the synergies of the combination. Cash-generating units to which goodwill

has been allocated are tested for impairment annually, or more frequently when there is an indication that

the unit may be impaired. If the recoverable amount of the cash-generating unit is less than the carrying

amount of the unit, the impairment loss is allocated first to reduce the carrying amount of any goodwill

allocated to the unit and then to the other assets of the unit pro-rata on the basis of the carrying amount of

each asset in the unit. An impairment loss recognized for goodwill is not reversed in a subsequent period.

On disposal of a cash-generating unit, the attributable amount of goodwill is included in the determination of

the profit or loss on disposal.

The group’s policy for goodwill arising on the acquisition of an associate is described below

E. Investments in associates and joint ventures

An associate is an entity over which the group has significant influence and that is neither a subsidiary nor

an interest in a joint venture. Significant influence is the power to participate in the financial and operating

policy decisions of the investee but is not control or joint control over those policies.

A joint venture is a joint arrangement whereby the parties that have joint control of the arrangement have

rights to the net assets of the joint arrangement. Joint control is the contractually agreed sharing of control

of an arrangement, which exists only when decisions about the relevant activities require unanimous

consent of the parties sharing control.

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The results and assets and liabilities of associates or joint ventures are incorporated in these financial

statements using the equity method of accounting, except when the investment is classified as held for sale,

in which case it is accounted for in accordance with IFRS 5.

Under the equity method, an investment in an associate or a joint venture is recognized initially in the

consolidated statement of financial position at cost and adjusted thereafter to recognise the group’s share of

the profit or loss and other comprehensive income of the associate or joint venture. When the group’s share

of losses of an associate or a joint venture exceeds the group’s interest in that associate or joint venture

(which includes any long-term interests that, in substance, form part of the group’s net investment in the

associate or joint venture), the group discontinues recognising its share of further losses. Additional losses

are recognized only to the extent that the group has incurred legal or constructive obligations or made

payments on behalf of the associate or joint venture.

An investment in an associate or a joint venture is accounted for using the equity method from the date on

which the investee becomes an associate or a joint venture. On acquisition of the investment in an associate

or a joint venture, any excess of the cost of the investment over the group’s share of the net fair value of the

identifiable assets and liabilities of the investee is recognized as goodwill, which is included within the

carrying amount of the investment. Any excess of the group’s share of the net fair value of the identifiable

assets and liabilities over the cost of the investment, after reassessment, is recognized immediately in profit

or loss in the period in which the investment is acquired.

If there is objective evidence that the group’s net investment in an associate or joint venture is impaired, the

requirements of IAS 36 Impairment of Assets are applied to determine whether it is necessary to recognise

any impairment loss with respect to the group’s investment. When necessary, the entire carrying amount of

the investment (including goodwill) is tested for impairment in accordance with IAS 36 as a single asset by

comparing its recoverable amount (higher of value in use and fair value less costs of disposal) with its

carrying amount. Any impairment loss recognized is not allocated to any asset, including goodwill that forms

part of the carrying amount of the investment. Any reversal of that impairment loss is recognized in

accordance with IAS 36 to the extent that the recoverable amount of the investment subsequently

increases.

The group discontinues the use of the equity method from the date when the investment ceases to be an

associate or a joint venture. When the group retains an interest in the former associate or a joint venture and

the retained interest is a financial asset, the group measures the retained interest at fair value at that date

and the fair value is regarded as it’s fair value on initial recognition in accordance with IFRS 9. The

difference between the carrying amount of the associate or a joint venture at the date the equity method

was discontinued, and the fair value of any retained interest and any proceeds from disposing of a part

interest in the associate or a joint venture is included in the determination of the gain or loss on disposal of

the associate or joint venture. In addition, the group accounts for all amounts previously recognized in other

comprehensive income in relation to that associate on the same basis as would be required if that associate

had directly disposed of the related assets or liabilities. Therefore, if a gain or loss previously recognized in

other comprehensive income by that associate or joint venture would be reclassified to profit or loss on the

disposal of the related assets or liabilities, the group reclassifies the gain or loss from equity to profit or loss

(as a reclassification adjustment) when the associate or joint venture is disposed of.

When the group reduces its ownership interest in an associate or a joint venture but the group continues to

use the equity method, the group reclassifies to profit or loss the proportion of the gain or loss that had

previously been recognized in other comprehensive income relating to that reduction in ownership interest

if that gain or loss would be reclassified to profit or loss on the disposal of the related assets or liabilities.

When a group entity transacts with an associate or a joint venture of the group, profits and losses resulting

from the transactions with the associate or joint venture are recognized in the group’s consolidated financial

statements only to the extent of interests in the associate or joint venture that are not related to the group.

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The group applies IFRS 9, including the impairment requirements, to long-term interests in an associate or

joint venture to which the equity method is not applied and which form part of the net investment in the

investee. Furthermore, in applying IFRS 9 to long-term interests, the group does not take into account

adjustments to their carrying amount required by IAS 28 Investments in Associates and Joint Ventures (i.e.

adjustments to the carrying amount of long-term interests arising from the allocation of losses of the

investee or assessment of impairment in accordance with IAS 28).

F. Revenue recognition

Revenue from contracts with customers

The Group applies a five-step model to determine when and to what extent revenue should be recognized.

Revenue is recognized when the Group transfers control of the goods and services to its customers and in

the amount of the expected consideration. Following the fulfilment of specific requirements, revenue is

reported either over time or at a point in time when control of goods or services is transferred. The Group

enters into contracts with customers for different supplies and under different conditions, which is why it

proceeded to assess the contracts individually.

Information on the method of accounting of revenues under IFRS 15 for individual types of transactions is

provided in Note 8 Revenues. The main areas considered by the Group in applying IFRS 15 are the

following:

1) Identification of the contract, identification of the performance obligations

The Group assesses performance obligations for all contracts in detail. The Group’s contracts often involve

several performance obligations. If the Group provides customers with a service of significant integration of

these performance obligations, it considers these partial performance obligations to be part of one main

performance obligation.

2) Significant financing component

For prepayments, the Group recognises interest expense on received prepayments, which are reflected in

the reported contract price if these prepayments are considered a significant financing component in

accordance with IFRS 15.

The Group used a practical expedient and does not account for the financing component if the expected

time between the delivery and payment at the time of origination of the contractual relationship is less than

12 months.

3) Revenue recognition period

In the case of contracts with customers, where the Group has a legally enforceable right to payment, the

Group recognises revenues from these contracts over time. For these contracts, sales and expenses are

recognized taking into account the progress of the contractual activity at the balance sheet date using the

percentage of completion method. The percentage of completion is usually calculated as the ratio of the

costs incurred under the contract to the total estimated costs.

Management believes that this input method is an appropriate indicator of progress towards fully meeting

these performance obligations. Only in exceptional cases is the percentage of completion measured by the

output method. If it is probable that total costs will exceed total revenues, the loss is recognized immediately

in the financial statements.

For contracts where none of the requirements for revenue recognition over time are met, the Group

recognises revenue at a point in time when control is transferred. Until the transfer of control, the Group

recognises contract costs as work in progress.

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Contract assets and contract liabilities

Contract assets are recognized in connection with contracts with customers if, in the case of contract

manufacturing, the cumulative sales recognized over time exceed the sum of the advance payments

received and progress billings. As of the end of the reporting period, this asset item is tested for impairment,

and, if necessary, an impairment is recognized on the basis of expected losses. If the recognized sales are

lower than the sum of the advance payments received and progress billings, a contract liability is

recognized. A contract liability is also recognized if advance payments are received, and consideration has

not yet been provided. Provisions for loss-making contracts are reported under Provisions.

Contract costs

Contracts with customers concluded by the Group may lead to the recognition of incremental costs incurred

to obtain, or to perform, the contracts. In this situation, the Group will only recognise the item costs to obtain

or perform a contract if the costs are incremental and relate directly to the obtaining and performing of the

contract with a customer. The Group uses the possibility of expedient, i.e. the costs are only capitalised in

the statement of financial position if their allocation is expected over a period exceeding 12 months, i.e. it is

a non-current asset. When an asset is recognized, its current and non-current portions are distinguished.

The costs capitalised are subsequently allocated to expenses concurrently with the progress of complete

satisfaction of the performance obligation. The costs capitalised are allocated to profit or loss to the relevant

nature of cost, e.g. the costs to obtain a contract in the form of a brokerage fee are subsequently allocated

to Services.

G. Leases

The group as lessee

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group

recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in

which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less)

and leases of low value assets (such as tablets and personal computers, small items of office furniture and

telephones). For these leases, the Group recognises the lease payments as an operating expense on a

straight-line basis over the term of the lease unless another systematic basis is more representative of the

time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the

commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily

determined, the Group uses its incremental borrowing rate.

The incremental borrowing rate depends on the term, currency and start date of the lease and is determined

based on a series of inputs including: the risk-free rate based on government bond rates; a country-specific

risk adjustment; a credit risk adjustment based on bond yields; and an entity-specific adjustment when the

risk profile of the entity that enters into the lease is different to that of the group and the lease does not

benefit from a guarantee from the group.

Lease payments included in the measurement of the lease liability comprise:

— Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable

— Variable lease payments that depend on an index or rate, initially measured using the index or rate at the

commencement date

— The amount expected to be payable by the lessee under residual value guarantees

— The exercise price of purchase options, if the lessee is reasonably certain to exercise the options

— Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to

terminate the lease

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The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the

lease liability (using the effective interest method) and by reducing the carrying amount to reflect the lease

payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-of-use

asset) whenever:

— The lease term has changed or there is a significant event or change in circumstances resulting in a

change in the assessment of exercise of a purchase option, in which case the lease liability is

remeasured by discounting the revised lease payments using a revised discount rate

— The lease payments change due to changes in an index or rate or a change in expected payment under

a guaranteed residual value, in which cases the lease liability is remeasured by discounting the revised

lease payments using an unchanged discount rate (unless the lease payments change is due to a

change in a floating interest rate, in which case a revised discount rate is used)

— A lease contract is modified, and the lease modification is not accounted for as a separate lease, in

which case the lease liability is remeasured based on the lease term of the modified lease by discounting

the revised lease payments using a revised discount rate at the effective date of the modification

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease

payments made at or before the commencement day, less any lease incentives received and any initial

direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses.

Whenever the Group incurs an obligation for costs to dismantle and remove a leased asset, restore the site

on which it is located or restore the underlying asset to the condition required by the terms and conditions of

the lease, a provision is recognized and measured under IAS 37. To the extent that the costs relate to a

right-of-use asset, the costs are included in the related right-of-use asset, unless those costs are incurred

to produce inventories.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use

asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset reflects that

the group expects to exercise a purchase option, the related right-of-use asset is depreciated over the

useful life of the underlying asset. The depreciation starts at the commencement date of the lease.

The group applies IAS 36 to determine whether a right-of-use asset is impaired and accounts for any

identified impairment loss as described in the ‘Property, Plant and Equipment’ policy.

Variable rents that do not depend on an index or rate are not included in the measurement the lease liability

and the right-of-use asset. The related payments are recognized as an expense in the period in which the

event or condition that triggers those payments occurs and are included in the line “Other expenses” in

profit or loss (see note 30).

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead

account for any lease and associated non-lease components as a single arrangement.

H. Foreign currencies

In preparing the financial statements of the Group entities, transactions in currencies other than the entity’s

functional currency (foreign currencies) are recognized at the rates of exchange prevailing on the dates of

the transactions. At each reporting date, monetary assets and liabilities that are denominated in foreign

currencies are retranslated at the rates prevailing at that date. Non-monetary items carried at fair value that

are denominated in foreign currencies are translated at the rates prevailing at the date when the fair value

was determined. Non-monetary items that are measured in terms of historical cost in a foreign currency are

not retranslated.

Exchange differences are recognized in profit or loss in the period in which they arise except for:

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— Exchange differences on foreign currency borrowings relating to assets under construction for future

productive use, which are included in the cost of those assets when they are regarded as an adjustment

to interest costs on those foreign currency borrowings;

— Exchange differences on transactions entered into to hedge certain foreign currency risks (see below

under financial instruments/hedge accounting); and

— Exchange differences on monetary items receivable from or payable to a foreign operation for which

settlement is neither planned nor likely to occur in the foreseeable future (therefore forming part of the

net investment in the foreign operation), which are recognized initially in other comprehensive income

and reclassified from equity to profit or loss on disposal or partial disposal of the net investment.

For the purpose of presenting consolidated financial statements, the assets and liabilities of the Group’s

foreign operations are translated at exchange rates prevailing on the reporting date. Income and expense

items are translated at the average exchange rates for the period, unless exchange rates fluctuate

significantly during that period, in which case the exchange rates at the date of transactions are used.

Exchange differences arising, if any, are recognized in other comprehensive income and accumulated in a

foreign exchange translation reserve (attributed to non-controlling interests as appropriate).

On the disposal of a foreign operation (i.e. a disposal of the group’s entire interest in a foreign operation, or

a disposal involving loss of control over a subsidiary that includes a foreign operation or a partial disposal of

an interest in a joint arrangement or an associate that includes a foreign operation of which the retained

interest becomes a financial asset), all of the exchange differences accumulated in a foreign exchange

translation reserve in respect of that operation attributable to the owners of the parent company are

reclassified to profit or loss.

In addition, in relation to a partial disposal of a subsidiary that includes a foreign operation that does not

result in the Group losing control over the subsidiary, the proportionate share of accumulated exchange

differences is re-attributed to non-controlling interests and are not recognized in profit or loss. For all other

partial disposals (i.e. partial disposals of associates or joint arrangements that do not result in the group

losing significant influence or joint control), the proportionate share of the accumulated exchange

differences is reclassified to profit or loss.

Goodwill and fair value adjustments arising on the acquisition of a foreign entity are treated as assets and

liabilities of the foreign entity and translated at the closing rate. Exchange differences arising are recognized

in other comprehensive income.

I. Government grants

Government grants are not recognized until there is reasonable assurance that the Group will comply with

the conditions attaching to them and that the grants will be received.

Government grants are recognized in profit or loss on a systematic basis over the periods in which the

group recognises as expenses the related costs for which the grants are intended to compensate.

Specifically, government grants whose primary condition is that the group should purchase, construct or

otherwise acquire non-current assets (including property, plant and equipment) are recognized as deferred

income in the consolidated statement of financial position and transferred to profit or loss on a systematic

and rational basis over the useful lives of the related assets.

Government grants that are receivable as compensation for expenses or losses already incurred or for the

purpose of giving immediate financial support to the group with no future related costs are recognized in

profit or loss in the period in which they become receivable.

The benefit of a government loan at a below-market rate of interest is treated as a government grant,

measured as the difference between proceeds received and the fair value of the loan based on prevailing

market interest rates.

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J. Taxation

The income tax expense represents the sum of current and deferred income tax expense.

1) Current tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit as

reported in profit or loss because it excludes items of income or expense that are taxable or deductible in

other years and it further excludes items that are never taxable or deductible. The group’s liability for current

tax is calculated using tax rates that have been enacted or substantively enacted by the end of the reporting

period.

In cases where the tax determination is uncertain but it is considered probable that there will be a future

outflow of funds to a tax authority, uncertain tax liabilities are presented as current tax liabilities and are

measured at the best estimate of the amount expected to become payable. The assessment is based on the

judgement of tax professionals within the parent company supported by previous experience with similar

transactions and their tax impact and in certain cases based on specialist independent tax advice.

2) Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts

of assets and liabilities in the financial statements and the corresponding tax bases used in the computation

of taxable profit and is accounted for using the liability method. Deferred tax liabilities are generally

recognized for all taxable temporary differences and deferred tax assets are recognized to the extent that it

is probable that taxable profits will be available against which deductible temporary differences can be

utilised. Such assets and liabilities are not recognized if the temporary difference arises from the initial

recognition (other than in a business combination) of other assets and liabilities in a transaction that affects

neither the taxable profit nor the accounting profit. In addition, a deferred tax liability is not recognized if the

temporary difference arises from the initial recognition of goodwill.

Deferred tax liabilities are recognized for taxable temporary differences arising on investments in

subsidiaries and associates, and interests in joint ventures, except where the group is able to control the

reversal of the temporary difference, and it is probable that the temporary difference will not reverse in the

foreseeable future. Deferred tax assets arising from deductible temporary differences associated with such

investments and interests are only recognized to the extent that it is probable that there will be sufficient

taxable profits against which to utilise the benefits of the temporary differences, and they are expected to

reverse in the foreseeable future.

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent

that it is no longer probable that sufficient taxable profits will be available to allow all or part of the asset to

be recovered.

Deferred tax is calculated at the tax rates that are expected to apply in the period when the liability is settled,

or the asset is realised based on tax laws and rates that have been enacted or substantively enacted at the

reporting date. The measurement of deferred tax liabilities and assets reflects the tax consequences that

would follow from the manner in which the group expects, at the end of the reporting period, to recover or

settle the carrying amount of its assets and liabilities.

Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current tax

assets against current tax liabilities and when they relate to income taxes levied by the same taxation

authority and the Group intends to settle its current tax assets and liabilities on a net basis.

3) Current tax and deferred tax for the year

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Current and deferred tax are recognized in profit or loss, except when they relate to items that are

recognized in other comprehensive income or directly in equity, in which case the current and deferred tax

are also recognized in other comprehensive income or directly in equity respectively. Where current tax or

deferred tax arises from the initial accounting for a business combination, the tax effect is included in the

accounting for the business combination.

K. Property, plant, and equipment

Properties in the course of construction for production, supply or administrative purposes, or for purposes

not yet determined, are carried at cost, less any recognized impairment loss. Cost includes professional

fees and, for qualifying assets, borrowing costs capitalised in accordance with the Group’s accounting

policy. Depreciation of these assets, determined on the same basis as other property assets, commences

when the assets are ready for their intended use.

Freehold land is not depreciated.

Plant, machinery, fixtures and fittings are stated at cost less accumulated depreciation and accumulated

impairment loss.

Depreciation is recognized so as to write off the cost or valuation of assets (other than freehold land and

properties under construction) less their residual values over their useful lives, using the straight-line

method, on the following bases:

Buildings	1.6 per cent – 5.0 per cent per annum
Plant and machinery	5.0 per cent – 33.3 per cent per annum
Fixtures and fittings	5.0 per cent – 33.3 per cent per annum

The estimated useful lives, residual values and depreciation method are reviewed at the end of each

reporting period, with the effect of any changes in estimate accounted for on a prospective basis.

Right-of-use assets are depreciated over the shorter period of the lease term and the useful life of the

underlying asset. If a lease transfers ownership of the underlying asset or the cost of the right-of-use asset

reflects that the group expects to exercise a purchase option, the related right-of-use asset is depreciated

over the useful life of the underlying asset.

An item of property, plant and equipment is derecognized upon disposal or when no future economic

benefits are expected to arise from the continued use of the asset. The gain or loss arising on the disposal

or retirement of an asset is determined as the difference between the sales proceeds and the carrying

amount of the asset and is recognized in profit or loss.

L. Intangible assets acquired separately

Intangible assets with finite useful lives that are acquired separately are carried at cost less accumulated

amortisation and accumulated impairment losses. Amortisation is recognized on a straight-line basis over

their estimated useful lives which are disclosed in note 16. The estimated useful life and amortisation

method are reviewed at the end of each reporting period, with the effect of any changes in estimate being

accounted for on a prospective basis. Intangible assets with indefinite useful lives that are acquired

separately are carried at cost less accumulated impairment losses.

M. Internally-generated intangible assets – research and development

expenditure

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Expenditure on research activities is recognized as an expense in the period in which it is incurred.

An internally-generated intangible asset arising from development (or from the development phase of an

internal project) is recognized if, and only if, all of the following conditions have been demonstrated:

The technical feasibility of completing the intangible asset so that it will be available for use or sale

— The intention to complete the intangible asset and use or sell it

— The ability to use or sell the intangible asset

— How the intangible asset will generate probable future economic benefits

— The availability of adequate technical, financial and other resources to complete the development and to

use or sell the intangible asset

— The ability to measure reliably the expenditure attributable to the intangible asset during its development

The amount initially recognized for internally-generated intangible assets is the sum of the expenditure

incurred from the date when the intangible asset first meets the recognition criteria listed above. Where no

internally- intangible asset can be recognized, development expenditure is recognized in profit or loss in the

period in which it is incurred.

Subsequent to initial recognition, internally-generated intangible assets are reported at cost less

accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets that

are acquired separately.

N. Intangible assets acquired in a business combination

Intangible assets acquired in a business combination and recognized separately from goodwill are

recognized initially at their fair value at the acquisition date (which is regarded as their cost).

Subsequent to initial recognition, intangible assets acquired in a business combination are reported at cost

less accumulated amortisation and accumulated impairment losses, on the same basis as intangible assets

that are acquired separately.

O. Trademarks

Trademarks are measured initially at purchase cost and are amortised on a straight-line basis over their

estimated useful lives. In case of indefinite useful life, trademarks are tested for impairment at least annually

or whenever there is any indication that impairment occurred.

P. Impairment of property, plant and equipment and intangible assets

At each reporting date, the Group reviews the carrying amounts of its property, plant and equipment and

intangible assets to determine whether there is any indication that those assets have suffered an impairment

loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent

of the impairment loss (if any). Where the asset does not generate cash flows that are independent from

other assets, the group estimates the recoverable amount of the cash-generating unit to which the asset

belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also

allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-

generating units for which a reasonable and consistent allocation basis can be identified.

Intangible assets with an indefinite useful life are tested for impairment at least annually and whenever there

is an indication at the end of a reporting period that the asset may be impaired.

Recoverable amount is the higher of fair value less costs of disposal and value in use. In assessing value in

use, the estimated future cash flows are discounted to their present value using a pre-tax discount rate that

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reflects current market assessments of the time value of money and the risks specific to the asset for which

the estimates of future cash flows have not been adjusted.

If the recoverable amount of an asset (or cash-generating unit) is estimated to be less than its carrying

amount, the carrying amount of the asset (or cash-generating unit) is reduced to its recoverable amount. An

impairment loss is recognized immediately in profit or loss, unless the relevant asset is carried at a revalued

amount, in which case the impairment loss is treated as a revaluation decrease and to the extent that the

impairment loss is greater than the related revaluation surplus, the excess impairment loss is recognized in

profit or loss.

Where an impairment loss subsequently reverses, the carrying amount of the asset (or cash-generating

unit) is increased to the revised estimate of its recoverable amount, but so that the increased carrying

amount does not exceed the carrying amount that would have been determined had no impairment loss

been recognized for the asset (or cash-generating unit) in prior years. A reversal of an impairment loss is

recognized immediately in profit or loss to the extent that it eliminates the impairment loss which has been

recognized for the asset in prior years. Any increase in excess of this amount is treated as a revaluation

increase.excluding goodwill.

Q. Inventories

Inventories are stated at the lower of cost and net realisable value. Cost comprises direct materials and,

where applicable, direct labour costs and those overheads that have been incurred in bringing the

inventories to their present location and condition. Cost is calculated using the weighted average cost

method. Net realisable value represents the estimated selling price less all estimated costs of completion

and costs to be incurred in marketing, selling and distribution.

R. Cash and cash equivalents

In the statement of financial position, cash and bank balances comprise cash (i.e. cash on hand and demand

deposits) and cash equivalents. Cash equivalents are current (generally with original maturity of three

months or less), highly liquid investments that are readily convertible to a known amount of cash and which

are subject to an insignificant risk of changes in value. Cash equivalents are held for the purpose of meeting

short-term cash commitments rather for investment or other purposes.

Bank balances for which use by the group is subject to third party contractual restrictions are included as

part of cash unless the restrictions result in a bank balance no longer meeting the definition of cash. If the

contractual restrictions to use the cash extend beyond 12 months after the end of the reporting period, the

related amounts are classified as non-current in the statement of financial position.

For the purposes of the statement of cash flows, cash and cash equivalents consist of cash and cash

equivalents as defined above, net of outstanding bank overdrafts which are repayable on demand and form

an integral part of the group’s cash management. Such overdrafts are presented as current borrowings in

the statement of financial position.

S. Financial instruments

Financial assets and financial liabilities are recognized in the Group’s statement of financial position when

the group becomes a party to the contractual provisions of the instrument.

Financial assets and financial liabilities are initially measured at fair value, except for trade receivables that

do not have a significant financing component which are measured at transaction price. Transaction costs

that are directly attributable to the acquisition or issue of financial assets and financial liabilities (other than

financial assets and financial liabilities at fair value through profit or loss) are added to or deducted from the

fair value of the financial assets or financial liabilities, as appropriate, on initial recognition. Transaction costs

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directly attributable to the acquisition of financial assets or financial liabilities at fair value through profit or

loss are recognized immediately in profit or loss.

1) Financial assets

All regular way purchases or sales of financial assets are recognized and derecognized on a trade date

basis. Regular way purchases or sales are purchases or sales of financial assets that require delivery of

assets within the time frame established by regulation or convention in the marketplace.

All recognized financial assets are measured subsequently in their entirety at either amortised cost or fair

value, depending on the classification of the financial assets.

i. Classification of financial assets

Debt instruments that meet the following conditions are measured subsequently at amortised cost:

— The financial asset is held within a business model whose objective is to hold financial assets in order to

collect contractual cash flows

— The contractual terms of the financial asset give rise on specified dates to cash flows that are solely

payments of principal and interest on the principal amount outstanding

If these criteria are not met, all other financial assets are measured subsequently at fair value through profit

or loss (FVTPL).

Despite the foregoing, the group may make the following irrevocable election / designation at initial

recognition of a financial asset:

— The group may irrevocably elect to present subsequent changes in fair value of an equity investment in

other comprehensive income if certain criteria are met (see (iii) below)

— The group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria

as measured at FVTPL if doing so eliminates or significantly reduces an accounting mismatch (see (iv)

below)

ii. Amortised cost and effective interest method

The effective interest method is a method of calculating the amortised cost of a debt instrument and of

allocating interest income over the relevant period.

For financial assets other than purchased or originated credit-impaired financial assets (i.e. assets that are

credit-impaired on initial recognition), the effective interest rate is the rate that exactly discounts estimated

future cash receipts (including all fees and points paid or received that form an integral part of the effective

interest rate, transaction costs and other premiums or discounts) excluding expected credit losses, through

the expected life of the debt instrument, or, where appropriate, a shorter period, to the gross carrying

amount of the debt instrument on initial recognition. For purchased or originated credit-impaired financial

assets, a credit-adjusted effective interest rate is calculated by discounting the estimated future cash flows,

including expected credit losses, to the amortised cost of the debt instrument on initial recognition.

The amortised cost of a financial asset is the amount at which the financial asset is measured at initial

recognition minus the principal repayments, plus the cumulative amortisation using the effective interest

method of any difference between that initial amount and the maturity amount, adjusted for any loss

allowance. The gross carrying amount of a financial asset is the amortised cost of a financial asset before

adjusting for any loss allowance.

For purchased or originated credit-impaired financial assets, the Group recognises interest income by

applying the credit-adjusted effective interest rate to the amortised cost of the financial asset from initial

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recognition. The calculation does not revert to the gross basis even if the credit risk of the financial asset

subsequently improves so that the financial asset is no longer credit impaired.

Interest income is recognized in profit or loss and is included in the "interest income" line item (Note 14).

A financial asset is held for trading if:

— It has been acquired principally for the purpose of selling it in the near term

— On initial recognition it is part of a portfolio of identified financial instruments that the group manages

together and has evidence of a recent actual pattern of short-term profit-taking

— It is a derivative (except for a derivative that is a financial guarantee contract or a designated and

effective hedging instrument)

iii. Financial assets at FVTPL

Financial assets that do not meet the criteria for being measured at amortised cost or FVTOCI are measured

at FVTPL. Specifically:

— Investments in equity instruments are classified as at FVTPL, unless the group designates an equity

investment that is neither held for trading nor a contingent consideration arising from a business

combination as at FVTOCI on initial recognition (see (iii) above)

— Debt instruments that do not meet the amortised cost criteria or the FVTOCI criteria (see (i) and (ii)

above) are classified as at FVTPL. In addition, debt instruments that meet either the amortised cost

criteria or the FVTOCI criteria may be designated as at FVTPL upon initial recognition if such designation

eliminates or significantly reduces a measurement or recognition inconsistency (so called ‘accounting

mismatch’) that would arise from measuring assets or liabilities or recognising the gains and losses on

them on different bases. The group has not designated any debt instruments as at FVTPL

Financial assets at FVTPL are measured at fair value at the end of each reporting period, with any fair value

gains or losses recognized in profit or loss to the extent they are not part of a designated hedging

relationship (see hedge accounting policy). The net gain or loss recognized in profit or loss includes any

dividend or interest earned on the financial asset and is included in the ‘other gains and losses’ line item

(Note 14). Fair value is determined in the manner described in note 32.

iv. Impairment of financial assets

The group recognises a loss allowance for expected credit losses on trade receivables and contract assets,

as well as on financial guarantee contracts. The amount of expected credit losses is updated at each

reporting date to reflect changes in credit risk since initial recognition of the respective financial instrument.

The group always recognises lifetime expected credit losses (ECL) for trade receivables and contract

assets. The expected credit losses on these financial assets are estimated using a provision matrix based on

the group’s historical credit loss experience, adjusted for factors that are specific to the debtors, general

economic conditions and an assessment of both the current as well as the forecast direction of conditions at

the reporting date, including time value of money where appropriate.

v. Significant increase in credit risk

In assessing whether the credit risk on a financial instrument has increased significantly since initial

recognition, the Group compares the risk of a default occurring on the financial instrument at the reporting

date with the risk of a default occurring on the financial instrument at the date of initial recognition. In making

this assessment, the Group considers both quantitative and qualitative information that is reasonable and

supportable, including historical experience and forward-looking information that is available without undue

cost or effort.

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In particular, the following information is taken into account when assessing whether credit risk has

increased significantly since initial recognition:

— an actual or expected significant deterioration in the financial instrument’s external (if available) or

internal credit rating;

— significant deterioration in external market indicators of credit risk for a particular financial instrument,

e.g. a significant increase in the credit spread, the credit default swap prices for the debtor, or the extent

to which the fair value of a financial asset has been less than its amortised cost;

Irrespective of the outcome of the above assessment, the Group presumes that the credit risk on a financial

asset has increased significantly since initial recognition when contractual payments are more than 90 days

past due, unless the Group has reasonable and supportable information that demonstrates otherwise.

The Group regularly monitors the effectiveness of the criteria used to identify whether there has been a

significant increase in credit risk and revises them as appropriate to ensure that the criteria are capable of

identifying a significant increase in credit risk before the amount becomes past due.

vi. Definition of default

The Group considers the following as constituting an event of default for internal credit risk management

purposes as historical experience indicates that financial assets that meet either of the following criteria are

generally not recoverable:

— when there is a breach of financial covenants by the debtor; or

— information developed internally or obtained from external sources indicates that the debtor is unlikely to

pay its creditors, including the Group, in full (without taking into account any collateral held by the

Group).

Irrespective of the above analysis, the Group considers that default has occurred when a financial asset is

more than 90 days past due.

vii. Credit-impaired financial assets

A financial asset is credit-impaired when one or more events that have a detrimental impact on the

estimated future cash flows of that financial asset have occurred. Evidence that a financial asset is credit-

impaired includes observable data about the following events:

— a significant financial difficulty of the issuer or the borrower;

— a breach of contract, such as a default or past due event (see (ii) above);

— the lender(s) of the borrower, for economic or contractual reasons relating to the borrower’s financial

difficulty, having granted to the borrower a concession(s) that the lender(s) would not otherwise

consider;

— it is becoming probable that the borrower will enter bankruptcy or other financial reorganisation; or

— the disappearance of an active market for that financial asset because of financial difficulties.

2) Financial liabilities and equity

i. Classification as debt or equity

Debt and equity instruments are classified as either financial liabilities or as equity in accordance with the

substance of the contractual arrangements and the definitions of a financial liability and an equity

instrument.

ii. Equity instruments

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An equity instrument is any contract that evidences a residual interest in the assets of an entity after

deducting all of its liabilities. Equity instruments issued by the Group are recognized at the proceeds

received, net of direct issue costs.

iii. Financial liabilities

All financial liabilities are measured subsequently at amortised cost using the effective interest method or at

FVTPL.

However, financial liabilities that arise when a transfer of a financial asset does not qualify for derecognition

or when the continuing involvement approach applies, and financial guarantee contracts issued by the

group, are measured in accordance with the specific accounting policies set out below.

3) Financial liabilities at FVTPL

Financial liabilities are classified as at FVTPL when the financial liability is (i) contingent consideration of an

acquirer in a business combination, (ii) held for trading or (iii) it is designated as at FVTPL.

A financial liability is classified as held for trading if either:

— It has been acquired principally for the purpose of repurchasing it in the near term

— On initial recognition it is part of a portfolio of identified financial instruments that the Group manages

together and has a recent actual pattern of short-term profit-taking

— It is a derivative, except for a derivative that is a financial guarantee contract or a designated and

effective hedging instrument

A financial liability other than a financial liability held for trading or contingent consideration of an acquirer in

a business combination may be designated as at FVTPL upon initial recognition if either:

— Such designation eliminates or significantly reduces a measurement or recognition inconsistency that

would otherwise arise

— The financial liability forms part of a group of financial assets or financial liabilities or both, which is

managed and its performance is evaluated on a fair value basis, in accordance with the group’s

documented risk management or investment strategy, and information about the grouping is provided

internally on that basis

— It forms part of a contract containing one or more embedded derivatives, and IFRS 9 permits the entire

combined contract to be designated as at FVTPL

4) Derivative financial instruments

The Group enters into a variety of derivative financial instruments to manage its exposure to interest rate

and foreign exchange rate risks, including foreign exchange forward contracts, options and interest rate

swaps. Further details of derivative financial instruments are disclosed in notes 32.

Derivatives are recognized initially at fair value at the date a derivative contract is entered into and are

subsequently remeasured to their fair value at each reporting date. The resulting gain or loss is recognized

in profit or loss immediately unless the derivative is designated and effective as a hedging instrument, in

which event the timing of the recognition in profit or loss depends on the nature of the hedge relationship.

A derivative with a positive fair value is recognized as a financial asset whereas a derivative with a negative

fair value is recognized as a financial liability. Derivatives are not offset in the financial statements unless the

group has both a legally enforceable right and intention to offset. The impact of the master netting

agreements on the group’s financial position is disclosed in note 32. A derivative is presented as a non-

current asset or a non-current liability if the remaining maturity of the instrument is more than 12 months and

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i t is not due to be realised or settled within 12 months. Other derivatives are presented as current assets or

current liabilities.

5) Hedging derivatives

The Group designates certain derivatives as hedging instruments in relation to currency risk and interest

rate risk and classifies them as cash flow hedges. Hedges of foreign currency risk on binding commitments

are accounted for as cash flow hedges.

The Group considers derivatives to be hedging derivatives if the hedge accounting model is applied on

them and if the following conditions are met:

— There is an economic relationship between the hedged item and the hedging instrument

— The effect of credit risk does not dominate the value changes that result from that economic relationship

— The hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged

item that the group actually hedges and the quantity of the hedging instrument that the Group actually

uses to hedge that quantity of hedged item

Derivatives that do not meet the above conditions for hedging derivatives are classified by the Group as

derivatives held for trading (speculative).

When a hedging relationship is established, the relationship between the hedging instrument and the

hedged item, risk management objectives and strategies in executing the various hedging transactions are

documented. On an ongoing basis, the hedging instrument is assessed for its effectiveness in offsetting

changes in the fair value or cash flows of the hedged item that result from changes in the hedged risk.

If the derivative is used to hedge the risk of changes in cash flows arising from assets, liabilities or legally

enforceable contractual relationships or forecast transactions, the change in the fair value of the hedging

derivative corresponding to the effective portion of the hedge is recognized in other comprehensive income

as a Revaluation Reserve. The ineffective portion of the change in the fair value of the derivatives is

included in profit or loss.

Financial derivatives are carried at cost at the time of acquisition and subsequently remeasured to fair value

at the date of the consolidated financial statements.

The Group uses financial derivatives only to hedge future cash flows. Changes in the fair value of financial

derivatives are recognized in other comprehensive income.

The cumulative amount in equity remains in other comprehensive income and is reclassified to profit or loss

in the same period(s) during which the hedged item affects profit or loss.

The Group shall discontinue hedge accounting only when the hedging relationship (or part of it) no longer

meets the qualifying criteria. For example, the hedging instrument expires or the hedging instrument is sold,

terminated or the contract is exercised. Termination of hedge accounting is accounted for prospectively.

Any gains or losses recognized in other comprehensive income and accumulated in the cash flow hedge

fund at that point in time remain in equity and are reclassified to profit or loss when the expected transaction

is realised. If the expected transaction is no longer expected to occur, the gains or losses accumulated in

the cash flow hedge fund are immediately reclassified to profit or loss.

T. Provisions

Provisions are recognized when the Group has a present obligation (legal or constructive) as a result of a

past event, it is probable that the group will be required to settle that obligation and a reliable estimate can

be made of the amount of the obligation.

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The amount recognized as a provision is the best estimate of the consideration required to settle the present

obligation at the reporting date, taking into account the risks and uncertainties surrounding the obligation.

Where a provision is measured using the cash flows estimated to settle the present obligation, its carrying

amount is the present value of those cash flows (when the effect of the time value of money is material).

When some or all of the economic benefits required to settle a provision are expected to be recovered from

a third party, a receivable is recognized as an asset if it is virtually certain that reimbursement will be

received and the amount of the receivable can be measured reliably.

U. Critical accounting judgements and key sources of estimation uncertainty

In applying the group’s accounting policies, which are described in Note 3, the directors are required to

make judgements (other than those involving estimations) that have a significant impact on the amounts

recognized and to make estimates and assumptions about the carrying amounts of assets and liabilities that

are not readily apparent from other sources. The estimates and associated assumptions are based on

historical experience and other factors that are considered to be relevant. Actual results may differ from

these estimates.

The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting

estimates are recognized in the period in which the estimate is revised if the revision affects only that

period, or in the period of the revision and future periods if the revision affects both current and future

periods.

V. Critical judgements in applying the group’s accounting policies

The following are the critical judgements, apart from those involving estimations (which are presented

separately below), that the directors have made in the process of applying the group’s accounting policies

and that have the most significant effect on the amounts recognized in financial statements.

— Note 8 – Revenue recognition

— Note 29 – Provisions

— Note 20 – Measurement of financial instruments

— Note 8 – Contract assets and liabilities

— Note 37 – Legal disputes

W. Key sources of estimation uncertainty

The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting

period that may have a significant risk of causing a material adjustment to the carrying amounts of assets

and liabilities within the next financial year, are discussed below.

X. Impairment testing

Following the assessment of the recoverable amount of goodwill allocated to groups subsidiaries to which

goodwill of EUR 2,022 million is allocated, the directors consider the recoverable amount of goodwill to be

most sensitive to the achievement of the 2025 – 2029 financial plan. Financial plan comprise forecasts of

revenue, employee benefit expense and overheads based on current and anticipated market conditions that

have been considered and approved by the board. Whilst the group is able to manage most costs, the

revenue projections are inherently uncertain due to the future market conditions. Revenue of the CGU is

most sensitive to changes in the sectors demand for sales in defence and aerospace sector.

The sensitivity analysis in respect of the recoverable amount of goodwill is presented in note 16.

6. Fair Value Measurement

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A. Non-Derivative Financial Assets

The fair value is based on their quoted market price as of the balance sheet date with no deduction of

transaction costs. If no quoted market price is available, the directors estimate the fair value of the given

instrument using price models or techniques based on discounted cash flows.

If techniques based on discounted cash flows are applied, the estimated future cash flows are based on

best estimates made by the directors, and a market-based rate as of the balance sheet date for an

instrument with similar conditions is used as the discount rate. If price models are used, inputs are based on

market rates as of the balance sheet date.

The fair value of trade receivables and other receivables, except for contract assets but including

receivables from services provided based on a concession, is estimated as the present value of future cash

flows discounted using the interest rate as of the balance sheet date.

The fair value of trade receivables, other receivables and investments reported at amortised cost is only

determined solely for the disclosure purposes.

B. Non-Derivative Financial Liabilities

The fair value determined in order to be disclosed is based on the present value of future cash flows from

principals and interest discounted by a default interest rate as of the balance sheet date. For leases, the

default interest rate is determined as the rate stated by the lessor in the contractual documentation. If this

rate is not available, the lessee’s incremental borrowing rate is used.

The incremental rate for the Group is derived from PRIBOR + margin 2.59 % for contracts concluded in CZK

and EURIBOR + margin 2.80 % for contract concluded in EUR, entered into in 2024.

Put option liabilities are recognized at the present value of the exercise price of each option. The exercise

price of the option is generally based on fair value. The methodology the Group uses to estimate the fair

values assumes the greater of net book value or a multiple of earnings, based on historical earnings and

other factors. From time to time the Group engages external valuation firms for the valuation firms to assess

the value of the put options. The external valuation estimates the fair values using a combination of

discounted cash flows and a multiple of earnings and/or revenue. The put option liabilities are discounted at

a pre-tax discount rate that reflects current market assessments of the time value of money and the risks

specific to the liability. The estimated fair values of these put options can also fluctuate, and the discounted

cash flows as well as the implicit multiple of earnings and/or revenue at which these obligations may

ultimately be settled could vary significantly from the Group’s current estimates depending upon market

conditions.

C. Derivatives

Financial derivatives are measured at fair value classified under Level 2.

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7. Changes in The Group’s Structure

A. The Group’s New Acquisitions

2024

a. Newly established subsidiaries

Company name	Acquisition type	Establishment date	Effective ownership in %
CSG Engineering, a.s.	Established	10/30/2024	84.55
MSM GREECE Ltd.	Established	06/22/2024	80.20
MSM SPV I, s. r. o.	Established	06/17/2024	80.20
MSM SPV II, s. r. o	Established	06/17/2024	80.20
MSM SPV III, s. r. o.	Established	10/01/2024	80.20
MSM SPV IV, s. r. o.	Established	10/01/2024	80.20
MSM SPV V, s. r. o.	Established	10/01/2024	80.20

b. Acquired subsidiaries – IFRS 3 Business Combinations

1) Vista Group / The Kinetic Group

In November 2024, the Group acquired 100% of Vista Outdoor Inc. and its segment, The Kinetic Group,

which is based in the United States and consists of the following companies: Vista Outdoor Sales LLC, Vista

Commercial Ammunition Company Inc., The Kinetic Group Operations LLC, Remington Licensing

Corporation, Federal Cartridge Company, and Ammunition Operations LLC. The Kinetic Group focuses on

designing, developing, distributing, and manufacturing ammunition, primers, and components for hunters,

recreational shooters, law enforcement, and the military, with a focus on centerfire pistol ammunition for

handguns used in training, target shooting, and personal protection, as well as centerfire rifle ammunition for

rifles used in hunting, target shooting, training, and personal protection.

As this extensive acquisition occurred before the end of 2024, the Group’s assets and liabilities were not

measured at fair value as of the date of preparation of the consolidated financial statements. The assets and

liabilities of the acquired company are measured at provisional value, based on the accounting records of

the acquired company. Consequently, the acquisition accounting process was not completed in 2024, and

the remeasurement to fair value will occur within one year from the acquisition date.

2) Vývoj Martin a.s.

In December 2024, the Group acquired 80.2%, and the company became fully consolidated again. The

company specializes in the production of specialized military containers, modular and mobile air traffic

control towers, as well as the development and production of prototypes, customer-specific solutions, and

servicing of military equipment.

3) CS Bross s.r.o.

In September 2024, the Group acquired 100% of CS Bross s.r.o., making it a subsidiary of RADIATIK a.s.

4) Platinum Defence a.s.

In November 2024, the Group acquired an 89% stake in Platinum Defence a.s., making it a subsidiary of

CSG Land Systems CZ a.s.

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2023

c. Newly established subsidiaries

Company name	Acquisition type	Establishment date	Effective ownership in %
LBP 80 S.r.l.	Established	11/20/2023	80.0
MANDURIA TRADE a.s.	Established	10/03/2023	100.0
STALUNA TRADE a.s.	Established	10/03/2023	100.0
DAKO-CZ EN, a.s.	Established	05/02/2023	100.0
DAKO-CZ INDIA PRIVATE LIMITED	Established	03/27/2023	99.9
MEDHA DAKO-CZ PRIVATE LIMITED	Established	07/17/2023	50.0

d. Acquired subsidiaries – IFRS 3 Business Combinations

1) Armi Perazzi S.p.A.

In December 2023 the Group acquired 80 % of the company Armi Perazzi S.p.A., the manufacturer of high-

quality shotguns for sport shooters and elite hunters. Olympic medallists and successful competitive

shooters belong among owners of these premium firearms, of which Perazzi produces approximately 1,500

units per year. One of them is the Czech Olympic gold medal winner in trap from the 2008 Beijing Olympics,

David Kostelecký.

As this extensive acquisition occurred before the end of 2023, the Group’s assets and liabilities were not

measured at fair value as of the date of preparation of the consolidated financial statements. The assets and

liabilities of the acquired company are measured at provisional value, based on the accounting records of

the acquired company. Consequently, the acquisition accounting process was not completed in 2023, and

the remeasurement to fair value will occur within one year from the acquisition date, including the

measurement of the non-controlling interest.

During 2024, the Group has finalised acquisition accounting process that had not been completed before

issuing 2023 consolidated financial statements. Consequently, the Group has retrospectively adjusted

values of assets and liabilities of Armi Perazzi S.p.A. provisional used in 2023 consolidated financial

statements.

Adjustment to assets and liabilities arising from the closing of acquisition accounting were reflected in the

financial statements for 2023 of participating company with retrospective effect as follows:

	Corrected Value		Originally
Armi Perazzi S.p.A.	as of Dec 31, 2023		recognised value		Difference
Goodwill		—	as of Dec 31, 2023	22,568	(22,568)
Net assets		33,932		15,540	(18,392)
NCI		—		3,108	(3,108)
Investment		33,932		35,000	(1,068)

2) JWL DAKO-CZ (INDIA) LIMITED RN through DAKO-CZ a.s.

In May 2023 the Group acquired 50 % of the company JWL DAKO-CZ (INDIA) LIMITED RN through DAKO-

CZ a.s., a manufacturer of braking systems and components for rolling stock. DAKO-CZ wants to improve its

position on the Indian market.

3) Pocket Virtuality

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In June 2023 the Group acquired the company Pocket Virtuality which develops distinctive solutions

utilizing augmented and virtual reality. These solutions can be employed for purposes such as remote

technical assistance, design of industrial systems, residential projects, and exhibitions.

4) ABIENNALE s.r.o

The company ABIENNALE s.r.o acquired in September 2023 is a service organization which provides the

services in air transport for the companies in the Group.

B. Impact of Acquisitions – IFRS 3 Business Combinations

a. 2024

	Vista Group /		VÝVOJ Martin,		PLATINUM
(“EUR ‘000”)	The Kinetic	a.s.	Cs BROSS, s.r.o.	DEFENCE	Total
	Group			a.s.
Month of acquisition	November 2024 December 2024		September 2024	February 2024
Assets
Intangible assets and Goodwill	55,160	1,659	—	—	56,819
Property, plant and equipment	130,908	6,665	389	—	137,962
Trade and other non-current	1,341	—	—	—	1,341
receivables
Inventory	352,153	1,453	—	11,506	365,112
Trade and other current receivables	168,178	4,159	9	—	172,346
Currnet prepayments and accruals	—	3,381	—	—	3,381
Tax assets	—	49	—	—	49
Cash and cash equivalents	69,628	6,543	3	634	76,808
Total acquired identifiable assets	777,368	23,909	401	12,140	813,818
Liabilities
Non-current loans and borrowings	—	—	4	—	4
Non-current provisions	4,783	—	—	—	4,783
Trade and other non-current	33,702	1,580	—	—	35,282
payables
Current loans and borrowings	—	8,334	—	—	8,334
Trade and other current payables	150,183	5,172	3	91	155,499
Current provisions	—	1,089	—	—	1,089
Current contract liabilities	—	2,190	—	12,058	14,248
Tax liabilities	—	125	—	—	125
Total identifiable assumed liabilities	188,668	18,490	7	12,149	219,314
Acquired identifiable assets and assumed liabilities (D)	588,700	5,419	394	(9)	588,700
Payment for the acquired company	2,172,518	24,397	1,390	—	2,198,305
effective (A)
Deferred payment effective (G)	—	—	—	—	—
Investment value as of the control	—	—	—	—	—
acquisition (I)
Paid (H)	2,172,518	24,397	1,390	—	2,198,305
Acquired non-controlling interests	—	1,073	—	(9)	1,064
EUR
Goodwill or bargain purchase	1,583,818	20,051	996	0	1,604,865
(F) = (G + A + I – (D – E)
Less: Acquired cash (B)	69,628	6,542	3	634	76,807
Net cash income (+)/ expense (-) of the transactions (C) = (B – H)	(2,102,890)	(17,855)	(1,387)	634	(2,121,498)
Aggregate profit or loss
Revenues	108,760	—	—	—	108,760

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Profit (+) / loss (-) from operating		23,036	—	—	(15)	23,021
activities
Profit (+) / loss (-) before taxation		23,012	—	—	(12)	23,000
Income tax		(5,217)	—	—	—	(5,217)
Profit or loss for the period		17,795	—	—	(12)	17,783
- attributable to shareholders	of which profit (+) / loss (-)	17,795	—	—	(12)	17,783
Other comprehensive income		—	—	—	—	—
Total comprehensive income		17,795	—	—	(12)	17,783
Share of the Group in total		17,795	—	—	(12)	17,783
comprehensive income

b. 2023

	Armi Perazzi	JWL DAKO-CZ POCKET		ABIENNALE
(“EUR ‘000”)	S.p.A	(INDIA)	VIRTUALITY	s.r.o.	Total
		LIMITED RN	a.s.
Month of acquisition	December	May 2023	June 2023	September
	2023			2023
Assets
Intangible assets and Goodwill	129	—	404	—	533
Property, plant and equipment	10,557	2,141	172	9,616	22,486
Loans and other non-current	3	256	—	—	259
financial assets
Trade and other non-current	1,787	—	(2)	—	1,785
receivables
Deferred tax asset	49	—	—	—	49
Inventory	9,628	3,022	3	—	12,653
Trade and other current receivables	7	728	—	203	938
Tax assets	—	—	—	86	86
Cash and cash equivalents	1,178	11	31	62	1,282
Total acquired identifiable assets	23,338	6,158	608	9,967	40,071
Liabilities
Non-current loans and borrowings	850	4,518	—	—	5,368
Non-current financial instruments	481	—	58	6,059	6,598
and liabilities
Non-current provisions	10	—	—	—	10
Trade and other non-current	240	—	—	—	240
payables
Deferred tax liability	90	—	—	—	90
Current financial instruments and liabilities	134	—	—	—	134
Current loans and borrowings	707	1,319	82	5,255	7,363
Trade and other current payables	2,934	—	64	20	3,018
Deferred income	390	—	—	—	390
Current contract liabilities	663	—	—	—	663
Tax liabilities	1,299	—	—	—	1,299
Total identifiable assumed liabilities	7,798	5,837	204	11,334	25,173
Acquired identifiable assets and assumed liabilities (D)	15,540	321	404	(1,367)	14,898
Payment for the acquired company	35,000	470	283	—	35,753
effective (A)
Deferred payment effective (G)	—	—	—	1,084	1,084
Investment value as of the control	—	—	—	—	—
acquisition (I)
Paid (H)	35,000	470	283	—	35,753

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		Armi Perazzi	JWL DAKO-CZ POCKET		ABIENNALE
(“EUR ‘000”)		S.p.A	(INDIA)	VIRTUALITY	s.r.o.	Total
			LIMITED RN	a.s.
Month of acquisition		December	May 2023	June 2023	September
		2023			2023
Acquired non-controlling interests		3,108	160	121	—	3,389
EUR
Goodwill or bargain purchase		22,568	310	—	2,450	25,328
(F) = (G + A + I – (D – E))
Less: Acquired cash (B)		1,178	11	31	62	1,282
Net cash income (+)/ expense (-) of the transactions (C) = (B – H)		(33,822)	(459)	(252)	62	(34,471)
Aggregate profit or loss
(restated to 12 months by extrapolation from the period in which the company was part of the consolidation group)
Revenues		13,937	142	69	2,901	17,049
Profit (+) / loss (-) from operating		1,808	(628)	(678)	(1,611)	(1,109)
activities
Profit (+) / loss (-) before taxation		692	(471)	(589)	(1,861)	(2,229)
Income tax		(166)	—	—	—	(166)
Profit or loss for the period		526	(471)	(589)	(1,861)	(2,395)
- attributable to shareholders	of which profit (+) / loss (-)	421	(236)	(413)	(1,861)	(2,089)
Other comprehensive income		—	—	—	—	—
Total comprehensive income		526	(471)	(589)	(1,861)	(2,395)
Share of the Group in total		421	(236)	(413)	(1,861)	(2,089)
comprehensive income

c. Substantiation of acquisitions

There are several strategic reasons for the purchases, including the following:

— Areas of operation of subsidiaries complete the CSG Group’s portfolio;

— Potential for a synergic effect;

— Subsidiaries have technical excellence and production capacities supporting the Group’s operational

growth.

One of the Group’s strategic goals is further expansion of activities in the relevant sectors in the countries

where the Group operates. The Group’s current goal is to strengthen its position and become a significant

market participant.

d. Substantiation of the existence of goodwill

In connection with the acquisition of the Vista Outdoor Inc. / The Kinetic Group, the Czechoslovak Group

recognized goodwill in the amount of EUR 1,583,818thousand. As mentioned above, in 2025 the assets and

liabilities acquired will be measured at fair value and the amount of goodwill recognized will be adjusted.

With respect to the acquisition of VÝVOJ Martin, a.s. the Czechoslovak Group reported goodwill in the

amount of EUR 20,051 thousand. As mentioned above, in 2024, the assets and liabilities acquired will be

measured at fair value and the amount of goodwill recognized will be adjusted.

e. Disposals of subsidiaries outside the Group

Given the significance of the sales performed this year, fair values of payments for companies sold and the

identifiable assets and liabilities sold as of the date of the sale are provided below.

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239

2024

(“EUR ‘000”)		RELAZA SPV a.s.
Month of disposal	February 2024
Assets
Property, plant and equipment		4,413
Trade and other current receivables		217
Cash and cash equivalents		4
Total assets sold (A)		4,634
Liabilities
Trade and other current payables		195
Total liabilities sold (B)		195
Assets and liabilities sold (C = A – B)		4,439
		—
Non-controlling interest (D)		—
Goodwill (E)		—
Selling price (F)		6,659
Proceeds from the sale of subsidiaries = (F - C + D - E)		2,225
Cash sold		4
Net cash income from the transaction		6,655

2023

	Česká		EUROPEAN		Slovak
	letecká	EHC	AIR	HELI	Training	GAMA
(“EUR ‘000”)	servisní	Service,	SERVICES	COMPANY	Academy,	OCEL,	Total
	a.s.	s.r.o.	SLOVAKIA	s.r.o.	s.r.o.	spol. s r.o.
			s. r. o.
Month of disposal	December	November	November	November	November	November
	2023	2023	2023	2023	2023	2023
Assets
Intangible assets and Goodwill	—	—	—	—	3	—	3
Property, plant and equipment	497	—	—	118	16,978	1,507	19,100
Rights of use	—	—	—	—	23	—	23
Deferred tax asset	—	—	—	—	300	—	300
Inventory	1,504	—	—	2,481	23	2,881	6,889
Trade and other current	3,253	—	8	90	234	1,555	5,140
receivables
Loans and other non-current	—	—	—	—	1,692	417	2,109
financial assets
Current prepayments and accruals	1,583	—	—	23	1,034	12	2,652
Tax assets	212	—	—	190	37	—	439
Cash and cash equivalents	144	—	48	275	113	196	776
Current contract assets	11,244	—	—	—	—	—	11,244
Total assets sold (A)	18,437	—	56	3,177	20,437	6,568	48,675
Liabilities
Non-current financial	—	—	—	—	24	—	24
instruments
Deferred tax liability	30	1	—	—	—	1	32
Current loans and borrowings	—	—	—	—	12,313	570	12,883
Non-current loans and borrowings	—	—	—	—	—	3,439	3,439
Trade and other current	2,693	10	100	2,000	1,516	844	7,163
payables
Current provisions	146	—	—	—	—	30	176

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Deferred income	—	—	—	—	—	9	9
Tax liabilities	223	—	16	44	17	262	562
Non-current contract liabilities	10,756	—	—	—	—	—	10,756
Current contract liabilities	349	—	—	—	—	—	349
Total liabilities sold (B)	14,196	11	116	2,044	13,870	5,155	35,392
Assets and liabilities sold (C =	4,241	(11)	(60)	1,133	6,567	1,414	13,284
A – B)
Non-controlling interest (D)	212	—	—	—	—	—	212
Goodwill (E)	24	48	—	243	—	2,064	2,379
Selling price (F)	4,044	—	4,607	—	4,607	3,904	17,162
Proceeds from the sale of subsidiaries = (F - C + D - E)	(8)	(38)	4,807	(1,417)	(2,018)	440	1,766
Cash sold	144	—	48	275	113	196	776
Net cash income from the transaction	3,900	—	4,559	(275)	4,494	3,708	16,386

8. Revenues

For the year ended December 31, 2024

For the year ended December 31, 2024	Defence	Mechanical	Services for	Other	Total
(“EUR ‘000”)	industry	engineering	aircraft	continued	continued
Revenues by geographic location			industry	activities	activities
Czech Republic	457,497	40,309	16,467	30,948	545,221
Slovakia	126,159	7,326	1,836	392	135,713
Italy	3,824	1,413	3	54,963	60,203
European Union (all other countries in EU)	842,101	17,347	36,337	107,589	1,003,374
United States of America	6,624	—	1,680	260,543	268,847
Nigeria	291	—	—	—	291
India	101	1,912	12,705	5,115	19,833
Indonesia	102,316	—	—	—	102,316
Serbia	5,072	10	6	494	5,582
Ukraine	1,713,290	—	47	1,172	1,714,509
Other	94,288	4,876	2,218	51,343	152,725
Total revenues	3,351,563	73,193	71,299	512,559	4,008,614
Revenues of the key products and services
Production and repair of military machinery	314,483	—	—	—	314,483
Servicing and repair of military machinery	173,749	—	—	—	173,749
Production of trucks	—	3,138	—	—	3,138
Servicing of vehicles and their accessories	—	435	—	—	435
Production of brake systems	—	13,490	—	—	13,490
Servicing and repair of brake systems	—	37,184	—	—	37,184
Energy supply	—	1	—	—	1
Other engineering production	—	6,167	—	—	6,167
Airplane/helicopter maintenance and repair	—	—	38,516	—	38,516
Aircraft industry services	30,231	—	10,232	—	40,463
Production of radar equipment	—	—	21,915	—	21,915
Transportation services/logistics	6,592	—	—	—	6,592
Small arms ammunitions	4	—	—	171,177	171,181
Sale of goods	2,648,180	—	636	299,096	2,947,912
Other	178,324	12,778	—	42,286	233,388
Total revenues	3,351,563	73,193	71,299	512,559	4,008,614
Revenues by revenue reporting period
Products and services transferred as of a certain date	3,169,121	73,193	43,425	512,559	3,798,298
Products and services transferred during a period	182,442	—	27,874	—	210,316

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241

Total revenues

3,351,563

73,193

71,299

512,559

4,008,614

For the year ended December 31, 2023

	Defence	Mechanical	Services for	Other	Total
(“EUR ‘000”)	industry	engineering	aircraft	continued	continued
Revenues by geographic location			industry	activities	activities
Czech Republic	163,328	35,344	24,813	23,723	247,208
Slovakia	53,086	16,245	1,301	4,460	75,092
Italy	400	1,158	1	45,499	47,058
European Union (all other countries in EU)	398,419	11,589	33,859	69,431	513,298
United States of America	26,149	22	10,650	194,017	230,838
Nigeria	12,355	—	—	—	12,355
India	—	7,548	2,160	43	9,751
Indonesia	57,050	—	—	52	57,102
Serbia	5,404	114	—	1,142	6,660
Ukraine	398,218	30	—	1,184	399,432
Other	62,598	6,734	9,179	57,125	135,636
Total sales	1,177,007	78,784	81,963	396,676	1,734,430
Sales of the key products and services
Production and repair of military	555,442	—	—	27	555,469
machinery
Servicing and repair of military machinery	89,036	—	—	532	89,568
Servicing of vehicles and their accessories	—	533	—	—	533
Production of brake systems	—	44,922	—	—	44,922
Servicing and repair of brake systems	—	17,643	—	—	17,643
Other engineering production	—	4,919	—	—	4,919
Airplane/helicopter maintenance and repair	—	—	2,164	—	2,164
Specialized airplane/helicopter	—	—	6,946	—	6,946
accessories
Aircraft industry services	—	—	60,598	—	60,598
Production of radar equipment	—	—	12,038	—	12,038
Transportation services/logistics	3,435	—	—	—	3,435
Small arms ammunitions	—	—	—	368,420	368,420
Sale of goods	487,868	10,508	217	5,729	504,322
Other	41,225	259	—	21,968	63,452
Total sales	1,177,007	78,784	81,963	396,676	1,734,430
Sales by revenue reporting period
Products and services transferred as of a certain date	884,186	78,784	64,139	381,175	1,408,284
Products and services transferred during a period	292,821	—	15,130	11,902	319,853
Other income	—	—	2,694	3,599	6,293
Total sales	1,177,007	78,784	81,963	396,676	1,734,430

The Group assumes that in the following years it will recognize revenues from already concluded contracts

with customers in the amount of approximately EUR 2.3 billion relating to performance obligations that are

outstanding as of December 31, 2024. The performance will be implemented according to the current

assumptions, in particular in the next three years, in 2025 in the amount of approximately EUR 1 billion, in

2026 – 2027 in the amount of EUR 1.1 billion and in the following years in the amount of EUR 0.2 billion. The

stated revenues include revenues from separate contracts for different supplies with individual customers,

mainly in the defence industry segment.

A. Contractual Balances

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242

The following tables provide information on receivables, contract assets and contract liabilities from

contracts with customers in compliance with IFRS 15:

(“EUR ‘000”)	December 31, 2024	December 31, 2023
Contract assets	18,913	15,211
Trade receivables and other receivables	544,899	220,436
Contract liabilities	880,066	840,524

The table below shows significant changes in contractual balances in the period ended December 31, 2024.

Changes in contract assets (“EUR ‘000”)	2024	2023
Contract asset as of January 1	15,211	30,125
Invoicing of contract assets reported as of 1 January	(7,803)	(11,208)
Increase in contract assets based on an ongoing revenue	11,792	7,526
recognition
Change in the amount of contract assets due to impairment	(11)	—
Divestment disposals	—	(11,244)
Other changes (such as exchange rate impact)	(276)	12
Contract asset as of December 31	18,913	15,211

Changes in contract liabilities (“EUR ‘000”)	2024	2023
Contract liabilities as of January 1	840,524	623,840
Revenue arising from contract liabilities recognised as of 1 January	1,351,921	(448,242)
Partial invoicing and prepayments received for which no revenue	(1,334,279)	770,389
was recognised
Divestment disposals		(11,105)
Other changes (such as exchange rate impact)	21,899	(94,358)
Contract liabilities as of December 31	880,065	840,524

The amount of EUR 840,524thousand (2023: EUR 623,840 thousand) reported as a contract liability as of

January 1, 2024 was reported as part of revenue for the year ended December 31, 2024.

B. Performance Obligations and Revenue Reporting Policies

Revenue is measured based on the consideration to which the Group expects to be entitled in a contract

with a customer and excludes amounts collected on behalf of third parties. The Group recognises revenue

when it transfers controls of a product or service to a customer.

243

The table below provides additional information on the nature, method and time usual for the performance of performance obligations arising from contracts

with customers, including significant payment terms and income recognition under IFRS 15.

Type of Income	Performance Nature and Time of Performance Obligations	Revenue Reporting Under IFRS 15
	The Group generates a significant portion of revenues through the sale of products and	Sales are reported over time with respect to the progress
	services that are subject to long-term contracts, namely in security services, mechanical	of contractual activities as of the date of the financial
		statements using the percentage of completion method.
	engineering and aircraft industry services (maintenance and repair of airplanes and airplane	The percentage of completion is predominantly
	equipment, production of radar equipment, etc.). Most engagements in this segment relate to	determined using the method of inputs, specifically the
	specific production or services according to the requirements of customers who have control	proportion of the costs incurred under the contract and
	over the relevant asset or service or gradually consume benefits resulting from performance	the total estimated costs. The Group has to assess and
		identify separable goods and services and report them as
	as the Group delivers the performance. At the same time, the engagements usually grant the	a separate contractual obligation representing a separate
	Group the right to receive payments for work completed including an appropriate margin if a	performance obligation. If a contract grants a customer a
	customer unilaterally terminates a contract. With respect to the above facts, the Group reports	financing benefit, the benefits should be separated from
Non-current	income over the period in line with IFRS 15.	the benefits resulting from the provision of products,
production and		goods and services if the financial component is
service agreements These projects are mostly financed by non-current or current prepayments that are gradually		significant and a financial component should be
		recognized. If the financial component is significant
Sales from	redeemed. A contract asset or a contract liability are reported depending on the amount	the interest income/interest expense should be separated
construction	of prepayments, in most cases, 5 – 70% of the total amount of the contract and invoicing. Most	from sales of assets and should be reported separately in
contracts with	contracts usually include multiple performance obligations, such as the delivery of products,	the Statement of Comprehensive Income.
customers	training, installation, etc. In accordance with IFRS 15, these contract liabilities are assessed
	based on the separability or degree of integration, where in case of a high degree of
	integration, they are considered performances of one main contract liability. Furthermore, in
	the case of the supply of a series of identical products, these performances are regarded as a
	single contract liability in line with IFRS 15.
	The usual payment terms combine the use of prepayments made, guarantees and invoicing
	according to certain milestones, which take into account the degree of completion of the
	production, the state of delivery to the destination, assembly and final tests.
	Project implementation is connected to a standard work quality guarantee, i.e. it is not reported
	as a separate contractual obligation.
	The Group generates the most significant portion of revenues through the sale of own	Sales of products are reported at the moment when a
Sale of products	products, which namely includes income from the defence industry (military vehicles, weapon	customer assumes control over a product. The Group has
	systems and ammunition) and mechanical engineering (the foundry industry, production of	to assess and identify separable goods and services and
Sales of own	trucks and brake systems). The Group recognises sales as of a certain date as the conditions	report them as a separate performance obligation.
products	to report income over time are not met under IFRS 15, i.e. a product becomes under a
	customer’s control after being delivered, customers consume the benefits after contractual
	obligations are met rather than as part of the production and the Group has no right for

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244

Type of Income	Performance Nature and Time of Performance Obligations	Revenue Reporting Under IFRS 15
	compensation of contractual costs including an appropriate margin if a contract is terminated
	(for reasons other than the Group’s failure).
	Sales of goods namely include income from the sale of armaments goods, radar equipment	Sales of goods are reported when a customer assumes
	and accessories for airplanes and helicopters. The Group reports the sales at the point in time	control over the goods. The Group has to assess and
	as the conditions to report income over time under IFRS 15 are not met, i.e. the goods become	identify separable goods and services and report them as
	under a customer’s control after being delivered, a customer consumes benefits after a	a separate performance obligation.
Sales of goods	contractual obligation is met and the Group is not entitled to receive any compensation of
	contractual costs including an appropriate margin if a contract is terminated (for reasons other
	than the Group’s failure). If the Group acts as an agent (intermediary) in the sale of goods or
	services, then it accounts for the revenue from these contracts only as a commission for
	mediation (on a net basis).
	Sales of services namely include servicing and repairs of military machinery, airplanes and	Sales of services are reported when control over the
	helicopters and services in the aircraft industry, which are provided for less than 30 days. The	benefit from the service provided is transferred to a
	Group reports the sales at a point in time even if the conditions to report income over time	customer. The Group has to assess and identify
Sales of services	under IFRS 15 are met.	separable goods and services and report them as a
		separate performance obligation.

245

C. Contract Costs

The price in the contracts with customers is mostly determined as a fixed cost for an object or a set of

products, goods and services. In case of multiple separate performances within a single contract, the Group

identifies separable goods and services to be delivered and subsequently allocates the expected

transaction cost to the separate contractual obligations in line with the methodology specified in IFRS 15.

(“EUR ‘000”)	2024	2023
Cost to obtain	32,263	28,119
Cost to fulfil a contract	28,174	13,066
Total	60,437	41,185
Non-Current	60,437	41,185
Total	60,437	41,185

9. Raw Material and Consumables

		For the period ended
(EUR ‘000)	December 31, 2024	December 31, 2023
Consumed material	524,314	506,937
Movements in stock of products and work in progress	(145,437)	6,465
Purchase costs of sold goods	1,774,030	326,399
Change in allowance for inventory	4,757	1,047
Total costs	2,157,664	840,848

10. External Costs

	For the period ended
(EUR ‘000)	December 31, 2024	December 31, 2023
Administrative costs and other external costs	217,343	121,844
Services and supplies relating to production	174,035	62,594
Transport and travel expenses	12,339	33,492
Cost of energy	18,677	16,707
Rental	4,110	2,231
Repairs and maintenance	15,780	8,387
Total external costs	442,284	245,255

11. Employee Benefits Costs

	2024
(EUR ‘000)	Total staff costs	Of which key management costs
Payroll costs	205,821	15,026
Social security and health insurance	61,551	3,824
Other employee benefits costs	18,840	801
Total employee benefits costs	286,212	19,651

2023

(EUR ‘000)	Total employee benefit costs	Of which key management costs
Payroll costs	159,649	10,947
Social security and health insurance	53,653	3,056
Other staff costs	9,083	541
Total employee benefits costs	222,385	14,544

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Annual Report 2024

246

As of December 31, 2024 the Group had 10,137 employees (2023: 5,724 employees) and 215 key

managers (2023: 193).

12. Other Operating Income

(EUR ‘000)	2024	2023
Gain from the sale of tangible and intangible assets	—	13,688
Gain from the ceased receivables	937	2,462
Proceeds from insurance claims	1,691	1,609
Own assets capitalized	33,100	(28,410)
Other operating income	25,300	317
Total other operating income	61,028	5,237

13. Other Operating Expenses

(EUR ‘000)	2024	2023
Loss from the sale of material	11,100	818
Change in provisions	13,190	4,180
Taxes and fees	5,779	2,458
Insurance costs	7,478	4,336
Other	33,984	4,111
Charge/release of asset and inventory allowances	1,891	1,286
Impairment losses and gains (including reversals of impairment losses) on financial assets and contract	30,896	16,458
assets
Total other operating expenses	104,318	33,647

14. Financial Income and Expenses

(EUR ‘000)	2024	2023
Interest income	21,460	21,799
Foreign exchange gain	139,797	—
Other financial income	4,593	1,355
Financial income	165,850	23,154
Interest expense	111,072	88,675
Foreign exchange loss	147,001	5,061
Interest expense from lease liabilities	3,769	1,360
Other financial expenses	116,494	9,011
Financial expenses	378,336	104,107
Charge/(release) of allowances	8,272	(11,108)
Other financial gain/(loss)	12,255	2,215
Gains /(losses) from remeasurement of derivatives	22,999	(11,766)
Profit/(loss) from other financial instruments	43,526	(20,659)
Net financial income/(expenses)	(168,960)	(101,612)

Other financial gain/loss predominantly includes loss on the sale of financial investments with the Group’s

share of less than 20%. The increase of interest expense in 2024 is following the increase of secured bank

loans primarily for the Fiocchi group acquisition. Charge / (release) of allowances predominantly includes

impairment of financial investments where the Group’s share is less than 20% .

15. Income Tax

A. Income tax reported in profit or loss

(EUR ‘000)	2024	2023
Current tax	230,130	78,874

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Annual Report 2024

247

Deferred tax	(17,679)	(10,157)
Total income tax	212,451	68,717

Deferred tax is calculated using the currently applicable tax rates that are assumed to be effective in the

period when the asset will be recovered or the liability will be settled.

The corporate income tax rate for the fiscal year ended December 31, 2024 is 21% in the Czech Republic

(2023: 19%), 21% in Slovakia (2023: 21%), 15% in Serbia (2023: 15%), 25% in Spain (2023: 25%), 24 %

(2023: 24%) in Italy, 21 % in USA (2023: 21%), 24 %, in Greece, 25 % in India, 19% in Poland.

B. Reconciliation of the Effective Tax Rate

(EUR ‘000)	%	2024	%	2023
Profit before tax on continued		845,838		278,928
operations
Tax calculated using the local
corporate income tax rate of the Company	22.13%	187,213	19.56%	54,449
Change in the opening balance of deferred tax due to a change in the tax rate		(3,667)		1,856
Tax effect:
Non-deductible expenses		129,236		22,165
Tax-exempt income		(101,793)		(10,942)
Loss for the current year with no deferred tax receivable identified		4,788		4,020
Tax bonuses		(35)		2
Declaration of the tax effect of non-allowable tax losses of prior		(124)		(1,805)
periods
Changes in estimates relating to prior periods		(3,167)		(1,028)
Income tax reported in the statement	25.12%	212,451	24.68%	68,717
of comprehensive income

The average rate of the Group companies weighted by profit before tax was applied for the reconciliation of

the effective tax.

The group has applied the temporary exception issued by the IASB in May 2023 from the accounting

requirements for deferred taxes in IAS 12. Accordingly, the Group neither recognises nor discloses

information about deferred tax assets and liabilities related to Pillar Two income taxes.

Based on the conducted analysis, The Group has met the conditions for the safe harbors and was therefore

not required to recognize a provision for top-up tax as of the balance sheet date. The Group continuously

monitors legislative developments and the methodology for applying the top-up tax and will take appropriate

measures in the event of any changes affecting its tax obligations.

In accordance with accounting regulations and the principles of a true and fair presentation of its financial

position, the Group has not recognized a provision for top-up tax in the 2024 financial statements, as, based

on the available information, its application is not expected.

16. Intangible Assets and Goodwill

		Concessions, Internally		Intangible	Other
(EUR ‘000)	Goodwill	licences,	generated	assets	intangible Total
		rights and	intangible	under	assets
		software	assets	construction
Net book value

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Annual Report 2024

248

Balance as at January	416,910	182,933	18,465	835	15,249	634,392
1, 2024
Acquisitions through business	1,604,865	52,115	2,344	699	1,661	1,661,684
combinations
Additions	—	14,145	1,001	7,296	13,582	36,024
Amortisation for the period	—	(15,375)	(1,490)	—	(2,560)	(19,425)
Allowance	—	—	(593)	(670)	—	(1,263)
Disposals	(22,568)	(1,593)	—	(1,166)	—	(25,327)
Reclassification	—	3,810	(4,277)	2,533	(1,447)	619
Impact of exchange	22,553	2,828	(79)	(138)	(472)	24,692
rate changes
Balance as at December 31, 2024	2,021,760	238,863	15,371	9,389	26,013	2,311,396

		Concessions,	Internally	Intangible	Other
(EUR ‘000)	Goodwill	licences,	generated	assets	intangible	Total
		rights and	intangible	under	assets
Net book value		software	assets	construction
Balance as at January 1, 2023	403,813	193,976	16,156	611	16,070	630,626
Acquisitions through business	26,156	24	341	—	110	26,631
combinations
Additions	—	9,236	3,337	1,305	832	14,710
Amortisation for the period	—	(15,905)	(890)	—	(1,220)	(18,015)
Disposals	—	(49)	—	—	(112)	(161)
Divestment disposals	(2,441)	(3)	—	—	—	(2,444)
Reclassification	—	1,082	—	(1,038)	(54)	(10)
Impact of exchange rate changes	(10,618)	(5,428)	(479)	(43)	(377)	(16,945)
Balance as at December 31, 2023	416,910	182,933	18,465	835	15,249	634,392

Amortisation of intangible assets is recognised in the line Amortisation/depreciation of fixed assets in the

consolidated statement of comprehensive income. Licences predominantly include a licence valid for 25

years for the exclusive production and distribution of PANDURs (infantry fighting vehicles) with the cost of

EUR 3 million (2023: EUR 5 million). Identified trademarks include ELDIS Pardubice s.r.o. in the total amount

of EUR 7 million and are included in other intangible assets. The Group does not expect to use the

trademarks over a certain period of time and as such it applies an indefinite useful life to them. Trademarks

with indefinite useful lives are tested for impairment annually, refer to below. Amortization of the newly built

main office of CSGM a.s. amounted to EUR 2.6 million.

The most significant additions to concessions, licenses and rights and software in 2024 include internally

generated intangible assets is represented by development work on radars in ELDIS Pardubice, s.r.o. of EUR

2 million predominantly licenses for the information system of DAKO-CZ, a.s. of EUR 1.1 million.

As of December 31, 2024, the most significant goodwill amounts to EUR 348,353 thousand for FIOCCHI

MUNIZIONI S.P.A. (2023: EUR 348,353 thousand), EUR 25,522 thousand for ELDIS Pardubice, s.r.o. (2023:

EUR 25,522 thousand), and EUR 7,500 thousand for Prague Fertility Centre s.r.o. (2023: EUR 7,500

thousand). The remaining goodwill for other companies amounts to EUR 19,254 thousand (2023: EUR

42,036 thousand).

Goodwill is subject to annual impairment testing, see below.

Impairment testing

A. General information

Czechoslovak Group

Annual Report 2024

249

The Group performs annual impairment testing of goodwill, trademarks and other intangible assets with

indefinite useful lives.

The Group management decided to apply the value-in-use method to impairment testing.

As management is not aware of any comparable market transactions the calculation of the value in use for

trademarks and goodwill is based on estimated projections of discounted cash flows in financial plans

approved and prepared by the Group’s management throughout the period until 2025 – 2029. It concerns

the goodwill of Fiocchi Munizioni Group, ELDIS Pardubice s.r.o., CS Soft a.s., Prague Fertility Center s.r.o.,

VÝVOJ Martin, a.s. and Vista Group / The Kinetic Group predominantly.

Significant assumptions used by management in the calculation include the predicted amount of sales,

predicted profit or loss before interest, tax, depreciation and amortization (EBITDA).

B. Impairment testing of goodwill and trademarks of individual companies

The recoverable amount for individual cash-generating units was estimated as mentioned above using the

discounted cash flow method. As the recoverable amount exceeds the carrying amount of individual cash-

generating units, no related impairment of goodwill, trademarks and other intangible assets was recognized.

C. The key assumptions used to calculate the value in use and sensitivity to

changes of assumed input

The calculation of the value in use of individual cash-generating units is most sensitive to the following input

considered:

— Budget sales and profit before interest and tax

— Discount rate

— Continuing value growth rate

The budget sales and profit before interest and tax: projections of sales and profit before interest and tax

are updated on a regular basis and approved by senior management for a five-year period.

Discount rate before tax: a discount rate is the measurement of the current market risk; in cash flow

estimates it takes into consideration the time value of money and individual risks of underlying assets that

were not included in estimates of future cash flows. The discount rate is based on specific circumstances of

the Group and segments in which it operates. It is derived from its weighted average cost of capital (WACC).

WACC considers both liabilities and equity. The value of equity represents the expected return on

investments by the Group’s investors while liabilities are derived from the Group’s interest-bearing loans.

The calculation includes a specific industry risk using beta factors. The discount rate before tax is calculated

using the adjustment of the resulting discount rate after tax for future cash flows.

Growth rate of intrinsic value: The growth rate of intrinsic value is used for the extrapolation of cash flows

after a planned period.

The following values were used for 2024:

Discount rate	6.89 % - 12.19 % (2023: 7.39 % - 11.61 %)
Growth rate of intrinsic value:	3% (2023: 3%)

D. Trademark and goodwill relating to Fiocchi Munizioni Group

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Annual Report 2024

250

Based on a calculation, the estimated recoverable amount exceeds the carrying amount and as such, as of

December 31, 2024, no trademark or goodwill impairment was identified for Fiocchi Munizioni Group, a.s.

The calculation was based on budgets for 2025 – 2029.

Based trademark and goodwill impairment testing of Fiocchi Munizioni Group performed in 2024, two key

inputs were identified that would have to change significantly for the carrying amount to exceed the

recoverable amount. The following table shows the value by which the input would have to change for the

estimated recoverable amount to equal the carrying amount:

Change needed for the carrying amount to equal the recoverable amount

In %	December 31, 2024	December 31, 2023
Discount rate before tax	2.77 p. p	10.06 p. p
Growth rate of intrinsic value:	(4.79) p. p.	(32.93) p. p.

E. Trademark and goodwill relating to ELDIS Pardubice, s.r.o.

Based on a calculation, the estimated recoverable amount exceeds the carrying amount and as such as of

December 31, 2024, no trademark or goodwill impairment was identified for ELDIS Pardubice, s.r.o. The

calculation was based on budgets for 2025 – 2029.

Based on trademark and goodwill impairment testing of ELDIS Pardubice, s.r.o. performed in 2023, two key

inputs were identified that would have to change significantly for the carrying amount to exceed the

recoverable amount. The following table shows the value by which the input would have to change for the

estimated recoverable amount to equal the carrying amount:

Change needed for the carrying amount to equal the recoverable amount

In %	December 31, 2024	December 31, 2023
Discount rate before tax	7.53 p. p	21.72 p. p.
Growth rate of intrinsic value:	(16.27) p. p.	NA

F. Goodwill relating to CS SOFT a.s

Based on a calculation, the estimated recoverable amount exceeds the carrying amount and as such as of

December 31, 2024, no goodwill impairment was identified for CS SOFT a.s. The calculation was based on

budgets for 2025 – 2029.

Based on goodwill impairment testing of CS SOFT a.s. performed in 2024, two key inputs were identified

that would have to change significantly for the carrying amount to exceed the recoverable amount. The

following table shows the value by which the input would have to change for the estimated recoverable

amount to equal the carrying amount:

Change needed for the carrying amount to equal the recoverable amount

In %

December 31, 2024

December 31, 2023

Czechoslovak Group

Annual Report 2024

251

Discount rate before tax	1.90 p. p	12.96 p. p.
Growth rate of intrinsic value:	(3.22) p. p.	(17.75) p. p.

G. Goodwill relating to Prague Fertility Center s.r.o

Based on a calculation, the estimated recoverable amount exceeds the carrying amount and as such as of

December 31, 2024, no goodwill impairment was identified for Prague Fertility Center s.r.o. The calculation

was based on budgets for 2025 – 2029.

Based on goodwill impairment testing of Prague Fertility Center s.r.o. performed in 2024, two key inputs

were identified that would have to change significantly for the carrying amount to exceed the recoverable

amount. The following table shows the value by which the input would have to change for the estimated

recoverable amount to equal the carrying amount:

Change needed for the carrying amount to equal the recoverable amount

In %	December 31, 2024	December 31, 2023
Discount rate before tax	4.91 p. p	4.49 p. p.
Growth rate of intrinsic value:	(8.05) p. p.	(7.24) p. p.

H. Goodwill relating to Vista Group /The Kinetic Group

Based on a calculation, the estimated recoverable amount exceeds the carrying amount and as such as of

December 31, 2024, no goodwill impairment was identified for The Kinetic Group. The calculation was

based on budgets for 2025 – 2029.

Based on goodwill impairment testing of The Kinetic Group performed in 2024, two key inputs were

identified that would have to change significantly for the carrying amount to exceed the recoverable

amount. The following table shows the value by which the input would have to change for the estimated

recoverable amount to equal the carrying amount:

Change needed for the carrying amount to equal the recoverable amount

In %	December 31, 2024	December 31, 2023
Discount rate before tax	3.40 p. p	N/A
Growth rate of intrinsic value:	(5.95) p. p.	N/A

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Annual Report 2024

252

I. Trademark relating to Armi Perazzi Group

Based on a calculation, the estimated recoverable amount exceeds the carrying amount and as such as of

December 31, 2024, no trademark impairment was identified for Armi Perazzi Group. The calculation was

based on budgets for 2025 – 2029.

Based on trademark impairment testing of Armi Perazzi Group performed in 2024, two key inputs were

identified that would have to change significantly for the carrying amount to exceed the recoverable

amount. The following table shows the value by which the input would have to change for the estimated

recoverable amount to equal the carrying amount:

Change needed for the carrying amount to equal the recoverable amount

In %	December 31, 2024	December 31, 2023
Discount rate before tax	14.06 p. p	N/A
Growth rate of intrinsic value:	(82.02) p. p.	N/A

253

17. Property, Plant and Equipment

			Building and	Right-of-use	Right-of-use	Tangible assets
(EUR ‘000)	Property and	Machinery and	structure	assets –	assets –	under	Total
	plant	equipment	equipment	property and	machinery and	construction
				plant	equipment
Balance as at January 1, 2024	176,019	90,222	7,057	25,142	24,002	50,631	373,073
Acquisitions through business combinations	60,514	59,938	958	4,603	4,352	7,597	137,962
Additions	21,836	45,549	5,000	28,807	40,830	72,388	214,410
Depreciation for the period	(8,397)	(25,091)	(2,578)	(6,016)	(4,784)	—	(46,866)
Allowance	—	(37)	1	—	(34)	(218)	(288)
Disposals	1,391	(2,594)	(33)	(3,769)	171	(20,745)	(25,579)
Divestment disposals	(4,413)	—	—	—	—	—	(4,413)
Reclassification	4,646	7,072	(272)	(455)	(372)	(7,696)	2,923
Impact of 253exchange rate changes	5,808	500	138	(57)	(4,701)	678	2,366
Balance as at December 31, 2024	257,404	175,559	10,271	48,255	59,464	102,635	653,588

			Building and	Right-of-use	Right-of-use	Tangible assets
(EUR ‘000)	Property and	Machinery and	structure	assets –	assets –	under	Total
	plant	equipment	equipment	property and	machinery and	construction
				plant	equipment
Balance as at January 1, 2023	179,767	101,709	5,547	27,703	18,406	28,531	361,663
Acquisitions through business combinations	7,292	2,225	733	742	10,006	2,205	23,203
Additions	8,252	29,263	2,440	2,008	2,579	31,602	76,144
Depreciation for the period	(7,423)	(22,206)	(1,515)	(4,978)	(6,424)	(93)	(42,639)
Allowance	—	40	—	—	—	—	40
Disposals	(6,078)	(4,621)	23	(38)	(61)	(6,115)	(16,890)
Divestment disposals	(2,847)	(16,624)	(29)	(24)	—	(170)	(19,694)
Reclassification	(100)	2,545	(4)	—	—	(4,516)	(2,075)
Impacts of exchange rate changes	(2,844)	(2,109)	(138)	(271)	(504)	(813)	(6,679)
Balance as at December 31, 2023	176,019	90,222	7,057	25,142	24,002	50,631	373,073

254

The most significant addition to machinery and equipment includes new machines related to the

construction of the EXCALIBUR ARMY spol. S r.o. hall, amounting to EUR 8.75 million, as well as machines

for ammunition production at ZVS Holding, a.s., amounting to EUR 7.85 million. The most significant

additions to tangible assets under construction include the modernization of ammunition equipment at ZVS

Holding, a.s., amounting to EUR 21.68 million, and the modernization of equipment at FIOCCHI MUNIZIONI

S.P.A., amounting to EUR 6.77 million.

Pledged assets

As of December 31, 2024, no property, plant, or equipment was pledged as collateral for bank loans (2023:

EUR 71,335 thousand). However, as of December 31, 2024 the Group has pledged shares amounting to EUR

863,928 thousand, along with certain intercompany receivables (2023: EUR 52,793 thousand).

18. Leases

Group as the lessee

A. Right-of-use

(EUR ‘000)	Right-of-use assets – property	Right-of-use assets –	Total
	and plant	machinery and equipment
Balance as at January 1, 2024	25,142	24,002	49,144
Acquisitions through business	4,603	4,352	8,955
combinations
Additions	28,807	40,830	69,637
Depreciation for the period	(6,016)	(4,784)	(10,800)
Allowance	—	(34)	(34)
Disposals	(3,769)	171	(3,598)
Divestment disposals	—	(4,283)	(4,283)
Reclassification	(455)	(372)	(827)
Impacts of 254exchange rate changes	(57)	(418)	(475)
Balance as at December 31, 2024	48,255	59,464	107,719

(EUR ‘000)	Right-of-use assets – property	Right-of-use assets –	Total
	and plant	machinery and equipment
Balance as at January 1, 2023	27,703	18,406	46,109
Acquisitions through business	742	10,006	10,748
combinations
Additions	2,008	2,579	4,587
Depreciation for the period	(4,978)	(6,424)	(11,402)
Disposals	(38)	(61)	(99)
Divestment disposals	(24)	—	(24)
Impacts of exchange rate changes	(271)	(504)	(775)
Balance as at December 31, 2023	25,142	24,002	49,144

The incremental rate for the Group is derived from PRIBOR + margin 2.59 % for contracts concluded in CZK

and EURIBOR + margin 2.80 % for contract concluded in EUR, entered into in 2024.

The incremental rate for the Group is derived from PRIBOR + margin 4.92% for contracts concluded in CZK

and EURIBOR + margin 4.53 % for contract concluded in EUR, entered into in 2023.

The Group uses mainly administrative buildings, land, production halls and cars for leasing. The average

lease term of real estate is 6 years, the average lease term of cars and machines is 3 years. In relation to

certain cars, the Group has the right to purchase leased assets at the end of the lease term.

Czechoslovak Group

Annual Report 2024

255

In 2023, the most significant additions to the right-of-use of aircraft due to acquisition of the company

ABIENNALE s.r.o. (see Note 7).

Other additions to the right-of-use machinery and equipment primarily include aircraft leased by RELAZA

SPV a.s. in the amount of EUR 6 million.

B. Amounts reported in the statement of comprehensive income

(EUR ‘000)	2024	2023
Right-of-use assets amortisation	(10,800)	(11,402)
Interest expense from lease liabilities	(3,769)	(1,360)
Costs related to current leases	(207)	(257)
Costs related to leases of low-value assets	(190)	(293)
Costs related to variable lease payments not included in lease	(708)	(406)
liabilities
Total	(15,674)	(13,718)

The Group does not report any lease contracts with an early termination or extension option which are

highly likely to be utilised.

C. Lease liabilities

As of December 31, 2024, the Group reported the following lease liabilities:

(EUR ‘000)	December 31, 2024	December 31, 2023
Non-current lease liabilities	84,905	36,200
Current lease liabilities	14,116	6,323
Total lease liabilities	99,021	42,523

As of December 31, 2024 the lease liability in the amount of EUR 60,981 thousands were classified as

operating lease and the lease liability in the amount of EUR 38,040 thousands were classified as financial

leases.

In relation to lease liabilities, the Group is not exposed to significant liquidity risk, which is managed by the

Treasury department. Lease liabilities are the part of the rows “Other financial instruments” (current and

non-current) in the statement of financial position.

19. Investments in Associates and Joint Ventures

The Group has investments in the following associates and joint ventures:

		Direct	Investment	Direct	Investment
		ownership	carrying	ownership	carrying
		percentage	amount	percentage	amount
(EUR ‚000)		December	December	December	December
		31, 2024	31, 2024	31, 2023	31, 2023
Associates	State	%		%
ZVS technology, s.r.o.	Slovakia	27.54	1	27.54	2
Target Products 1978 Ltd	New Zealand	20.00	1,475	20.00	1,476
C.F.L. S.a.s.	Italy	14.00	—	14.00	43
Joint ventures
CSG CENTRAL ASIA a.s.	Czech Republic	30.00	—	30.00	—
FALCON CSG a.s.	Czech Republic	30.00	28	30.00	22
HARVO Reality s.r.o.	Czech Republic	44.55	589	50.00	—
Milconn a.s.	Czech Republic	50.00	711	50.00	493

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256

		Direct	Investment	Direct	Investment
		ownership	carrying	ownership	carrying
		percentage	amount	percentage	amount
(EUR ‚000)		December	December	December	December
		31, 2024	31, 2024	31, 2023	31, 2023
TATRA group*	Czech Republic	65.00	81,119	65.00	83,417
VÝVOJ Martin, a.s.	Slovakia		—	61.56	18,047
Total			83,923		103,499

* TATRA group includes TATRA TRUCKS a.s., TATRA METALURGIE a.s. and TATRA EXPORT s.r.o.

The Group holds a 65% equity interest in TATRA TRUCKS a.s. (TATRA group). The Articles of Association of

TATRA a.s. require the agreement of 75% of shareholders for some essential decisions of the General

Meeting, therefore the Group does not control TATRA TRUCKS a.s. independently and considers it a joint

venture. The Group has not concluded any agreements with the other shareholder of TATRA TRUCKS a.s.

regarding the control of the company.

In December 2024 the Group acquired 80.2% of VÝVOJ Martin , and the company became fully

consolidated again.

A. 2024

In 2024 there wasn’t any new acquisition to Associate or JV.

B. 2023

In 2023 there wasn’t any new acquisition to Associate or JV.

The CSG Group’s share in the total comprehensive income of the TATRA group is disclosed in the table

below:

		TATRA Group	TATRA Group
Effective ownership percentage		Joint venture	Joint venture
		65%	65%
(EUR ‚000)		December 31, 2024	December 31, 2023
Summary balance sheet
Non-current assets		124,969	122,252
Current assets (including cash and cash equivalents)		270,343	279,054
Non-current liabilities		27,143	17,682
Current liabilities		250,456	262,537
Net assets (100%)		117,713	121,087
The Group’s share in the profit (+) / loss (-) of the associate		(1,545)	134
Summary income statement after the acquisition date
Income		388,882	575,460
Profit (+) / loss (-) from operating activities		6,751	7,913
Profit (+) / loss (-) before tax		(3,848)	1,955
Income tax		1,471	(1,749)
Profit (+) / loss (-) for the year/reporting period		(2,377)	206
of which profit (+)/loss (-) attributable to owners		(1,541)	134
Other comprehensive income		(1,541)	(499)
Total comprehensive income		—	206
The Group’s share in the total comprehensive income		—	134
Total comprehensive income after considering the impact of IFRS 9		—	—
Group‘s share in the total comprehensive income after considering the impact of IFRS 9		—	—
Other changes in equity		—	(821)
-	of which dividends paid	(767)	—
-	of which derivatives remeasured	—	(487)

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Annual Report 2024

257

	TATRA Group	TATRA Group
Effective ownership percentage	Joint venture	Joint venture
	65%	65%
(EUR ‚000)	December 31, 2024	December 31, 2023
The Group’s share in other changes in equity	—	(47)
Adjustment for retained earnings at the intercompany sale of inventory	(196)	(265)
The Group’s share in retained earnings	(128)	(172)
The Group’s adjusted share in the total comprehensive income and other changes in equity	(1,672)	(87)

258

The Group only reports its share in the loss from associates if the carrying amount of the equity investment in as associate is not lower than zero. The Group

does not account for any payables as it is not obliged to fund operations of an investee.

The CSG Group’s investments in associates and joint ventures are disclosed in the table below:

		CSG CENTRAL ASIA	FALCON CSG a.s.	Milconn a.s.	HARVO Reality s.r.o.	VÝVOJ Martin, a.s. *
		a.s.
		Joint venture	Joint venture	Joint venture	Joint venture	Joint venture
		30.00%	30.00%	50.00%	44.55%	61.56%
(EUR ‚000)		December 31, 2024	December 31, 2024	December 31, 2024	December 31, 2024	December 31, 2024
Summary balance sheet
Non-current assets		77	79	—	816	7,065
Current assets (including cash and cash		6	—	1,797	772	15,565
equivalents)
Non-current liabilities		—	—	—	—	458
Current liabilities		3	14	361	363	16,729
Net assets (100%)		80	65	1,436	1,225	5,443
The Group’s share in the profit (+) / loss (-) of an associate		—	(1)	234	387	667
Summary income statement
Income		—	—	6,636	1,554	19,107
Profit (+) / loss (-) from operating activities		(4)	(1)	(95)	(442)	(10,230)
Profit (+) / loss (-) before tax		2	(2)	469	1,103	1,134
Income tax		—	—	—	(232)	(51)
Profit (+) / loss (-) for the year/reporting period		2	(2)	469	871	1,083
- owners	Of which profit (+) / loss (-) attributable to	—	(1)	234	388	667
Total comprehensive income		1	(2)	469	871	1,083
The Group’s share in total comprehensive income		—	(1)	234	388	667

* VÝVOJ Martin, a.s. in December 2024 became fully consolidated company

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259

		CSG CENTRAL ASIA	FALCON CSG a.s.	Milconn a.s.	HARVO SPV s.r.o.*	VÝVOJ Martin, a.s.
		a.s.
		Joint venture	Joint venture	Joint venture	Joint venture	Joint venture
		30.00%	30.00%	50.00%	45.00%	61.56%
(EUR ‘000)		December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023	December 31, 2023
Summary balance sheet
Non-current assets		—	81	—	807	7,690
Current assets (including cash and cash		81	—	1,216	189	7,286
equivalents)
Non-current liabilities		—	—	—	—	522
Current liabilities		—	12	229	1,043	9,869
Net assets (100%)		81	69	987	(47)	4,585
The Group’s share in the profit (+) / loss (-) of an associate		1	(1)	171	—	315
Summary income statement
Income		—	—	5,767	1	10,620
Profit (+) / loss (-) from operating activities		(4)	(3)	451	(13)	707
Profit (+) / loss (-) before tax		3	(4)	421	(36)	515
Income tax		—	—	(80)	—	(3)
Profit (+) / loss (-) for the year/reporting period		3	(4)	341	(36)	512
- owners	Of which profit (+) / loss (-) attributable to	1	(1)	171	—	315
Total comprehensive income		3	(4)	341	(36)	512
The Group’s share in total comprehensive income		1	(1)	171	—	315

260

20. Financial Instruments

A. Loans and Other Financial Assets

(EUR ‚000)	December 31, 2024	December 31, 2023
Assets at amortised cost
Granted loans	45,723	166,559
Other financial assets	36,108	82,633
Total assets at amortised cost	81,831	249,192
Assets at fair value
Derivative instruments	6,983	18,433
Other financial assets	57,866	5,984
Total assets at fair value	64,849	24,417
Non-current	77,206	171,518
Current	69,474	102,091
Total loans and other financial assets	146,680	273,609

Granted loans in 2024 primarily consist of a loan of EUR 17 million provided to a third party, which

represents the largest loan in this category, along with other loans, including EUR 5 million.

Granted loans in 2023 primarily consisted of a loan provided to a third party and an individual.

The weighted average interest rate relating to loans other than to lending institutions was 7.09 % in 2024

(2023: 8.62 %).

Trade and other receivables are disclosed in Note 21, Trade and other payables are disclosed in Note 28.

Exposure of the Group to credit and currency risks and impairment losses relating to loans and other

financial assets are disclosed in Note 32 – Risk Management Methods and Disclosures.

Other financial assets primarily comprise deposits in bank accounts with limited access (2024: EUR 14

million, 2023: EUR 37 million) and advances on financial assets and other investments (2024: EUR 53

million, 2023: EUR 38 million).

Granted loans primarily represent loans provided to external business partners. These loans are issued

under standard commercial terms and conditions

B. Loans, borrowings and other financial liabilities

(EUR ‚000)	December 31, 2024	December 31, 2023
Overdraft	449,589	76,282
Secured bank loans	1,414,816	587,865
Unsecured bank loans	44,077	53,907
Loans from the shareholder and other related parties	1,216	38,288
Loans from third parties (other loans)	2,798	1,057
Total loans and borrowings at amortised cost	1,912,496	757,399
Liability from put option	148,777	176,451
Derivative instruments	13,017	6,984
Total financial liabilities at fair value	161,794	183,435

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Annual Report 2024

261

(EUR ‚000)	December 31, 2024	December 31, 2023
Other financial liabilities	40,126	38
Financial liabilities from leases	99,021	42,523
Total loans, borrowings, derivatives and other financial instruments	2,213,437	983,395
Non-current loans and borrowings	1,140,402	456,940
Current loans and borrowings	772,094	300,459
Total loans and borrowings	1,912,496	757,399
Non-current financial instruments	99,802	216,887
Current financial instruments	201,139	9,109
Financial instruments and lease liabilities	300,941	225,996
Non-current loans, borrowings and other financial instruments	1,240,204	673,827
Current loans, borrowings and other financial instruments	973,233	309,568
Total loans, borrowings and other financial instruments	2,213,437	983,395

Financial liabilities from leases are reported in Note 18 Leases.

Liability from put option in 2024 and 2023 mostly represents option to acquire remaining 30% share in

Fiocchi Group at fair value.

In 2024, the weighted average interest rate of loans amounted to 8.58 % (2023: 6.41 %).

C. Terms and Summary of Loan Maturities

The following terms applied to outstanding loans and borrowings as of December 31, 2024:

			Balance			Due in
(EUR ‚000)	Currency	Nominal	as at	Due in 1 year	Due in 1 to 5 years	subsequen
		interest rate*	December			t years
			31, 2024
Bank overdraft	CZK	Fixed	265	265	—	—
Bank overdraft	CZK	Variable	(5)	(5)	—	—
Bank overdraft	EUR	Fixed	1,543	1,521	22	—
Bank overdraft	EUR	Variable	447,290	447,290	—	—
Bank overdraft	EUR	Interest free	495	495	—	—
Collateralised	CZK	Fixed	179	—	179	—
bank loan
Collateralised	CZK	Variable	1,146,234	190	1,146,040	4
bank loan
Collateralised	CZK	Interest free	283	—	283	—
bank loan
Collateralised	EUR	Fixed	2,087	249	1,838	—
bank loan
Collateralised	EUR	Variable	295,651	283,651	12,000	—
bank loan
Collateralised	EUR	Interest free	(29,679)	(6,037)	(23,642)	—
bank loan
Collateralised	USD	Interest free	65	65	—	—
bank loan
Loans from related parties	CZK	Variable	732	6	726	—
Loans from related parties	CZK	Interest free	421	421	—	—
Loans from related parties	EUR	Variable	77	—	77	—
Loans from related parties	EUR	Interest free	(14)	(14)	—	—
Other loans	CZK	Fixed	953	465	4	484

Czechoslovak Group

Annual Report 2024

262

			Balance			Due in
(EUR ‚000)	Currency	Nominal	as at	Due in 1 year	Due in 1 to 5 years	subsequen
		interest rate*	December			t years
			31, 2024
Other loans	CZK	Variable	383	244	139	—
Other loans	CZK	Interest free	150	150	—	—
Other loans	EUR	Fixed	1,312	245	513	554
Other loans	EUR	Interest free	—	—	—	—
Uncollateralised	CZK	Fixed	274	46	228	—
bank loans
Uncollateralised	CZK	Variable	709	—	709	—
bank loans
Uncollateralised	CZK	Interest free	(421)	(421)	—	—
bank loans
Uncollateralised	EUR	Fixed	22,158	21,928	230	—
bank loans
Uncollateralised	EUR	Variable	21,357	21,341	16	—
bank loans
TOTAL			1,912,496	772,094	1,139,361	1,041

* The variable interest rate is derived from the PRIBOR, EURIBOR or LIBOR rate plus a mark-up. All interest rates

correspond with arm’s length conditions.

Negative amount in EUR and CZK interest free bank loans represents amortised costs of financing.

The following terms applied to outstanding loans and borrowings as of December 31, 2023:

		Nominal	Balance as at		Due in 1 to 5	Due in
(EUR ‘000)	Currency	interest	December	Due in 1 year	years	subsequent
		rate*	31, 2023			years
Bank overdraft	CZK	Fixed	310	40	269	—
Bank overdraft	CZK	Variable	61,302	59,351	1,950	—
Bank overdraft	EUR	Fixed	—	—	—	—
Bank overdraft	EUR	Variable	13,656	13,668	(12)	—
Bank overdraft	RSD	Fixed	1,015	999	16	—
Other loans	CZK	Fixed	37	37	—	—
Other loans	CZK	Variable	195	195	—	—
Other loans	EUR	Variable	712	375	337	—
Other loans	GBP	Fixed	78	78	—	—
Other loans	USD	Fixed	35	35	—	—
Loans from related	CZK	Fixed	20,801	1,894	18,907	—
parties
Loans from related	CZK	Variable	2,058	2,058	—	—
parties
Loans from related	EUR	Variable	6,295	355	5,940	—
parties
Loans from related	USD	Fixed	9,050	—	9,050	—
parties
Loans from related	USD	Variable	84	84	—	—
parties
Collateralised bank	CZK	Fixed	14,955	3,700	10,986	270
loan
Collateralised bank	CZK	Variable	10,624	4,983	4,913	728
loan
Collateralised bank	EUR	Fixed	35,029	11,622	11,114	12,294
loan
Collateralised bank	EUR	Variable	524,735	149,622	355,809	19,303
loan
Collateralised bank	USD	Fixed	2,522	—	—	2,522
loan
Uncollateralised	CZK	Variable	30,216	28,229	1,987	—
bank loans

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263

Uncollateralised	EUR	Fixed	20,797	20,769	28	—
bank loans
Uncollateralised	EUR	Variable	2,894	2,365	529	—
bank loans
TOTAL			757,399	300,459	421,823	35,117

* The variable interest rate is derived from the PRIBOR, EURIBOR or LIBOR rate plus a mark-up. All interest rates

correspond with arm’s length conditions.

A majority of the Group’s covenants are tied to the financial performance of a specific Group company.

Major indicators in the agreed covenants include:

— Equity to total assets;

— Minimum amount of equity; and

— Net debt to EBITDA.

D. Bonds

On July 1, 2021, the Company issued CSG VAR/26 bonds (ISIN CZ0003532681) with a floating interest

income in the total nominal value of placement of CZK 2,000 million (approx.EUR 81 million) with maturity in

2026. The bonds were issued as securities in the book-entry form with a nominal value of CZK 10 thousand

(EUR 0.4 thousand) per bond. As of December 31, 2023, the Company recognised a payable from these

issues in the amount of EUR 79,392 thousand. As of December 31, 2023, the Company recognised a

payable from these issues in the amount of EUR 80,890 thousand.

The CSG VAR/24 bonds bear a floating interest rate consisting of 6M PRIBOR + a 3.25% margin per annum

(p.a.), with interest falling due biannually as of November 1 and May 1 each year.

On September 17, 2021, the Company issued CSG VAR/26 bonds (ISIN CZ0003534174) with a fixed (step-

up) interest income in the estimated total nominal value of placement of EUR 25 million with maturity in

2026. The bonds were issued as securities in the book-entry form with a nominal value of EUR 100

thousand per bond. As of December 31, 2024, the Company recognises a payable from these issues in the

amount of EUR 15 million. As of December 31, 2023, the Company recognised a payable from these issues

in the amount of EUR 15 million.

The CSG/VAR 26 bonds bear interest at a fixed (step-up) rate, which increases gradually from 3.5% per

annum (p.a.), to 4.35% p.a. according to a predetermined procedure specified in the bond prospectus.

Interest is payable quarterly on January 17, March 17, June 17 and September 17 of each year.

On December 21, 2022, the Company issued CSG VAR/2027 (ISIN CZ003546780) floating rate bonds with

an expected total nominal value of the issue of up to EUR 15 million, maturing in 2027. The bonds were

issued as book-entry securities with a nominal value of EUR 100 thousand each. As of December 31, 2024,

the Company recognises a payable of EUR 11.1 million for these issues. As of December 31, 2023, the

Company recognised a payable of EUR 11.1 million.

CSG/VAR 27 bonds bear interest at a floating rate consisting of 6M EURIBOR + 3.5% per annum (p.a.)

margin, with a minimum interest rate of 4.25%. Interest is payable semi-annually on June 21 and December

21 each year.

On July 4, 2023, the Company issued CSG 8.00/2028 bonds (ISIN CZ0003550808) with a fixed interest

income in the estimated total nominal value of placement up to CZK 3,000 million (approx. EUR 121 million)

and possible increase up to CZK 5,000 million (approx. EUR 202 million). Maturity of the bonds is in 2028.

The bonds were issued as securities in the book-entry form with a nominal value of CZK 10 thousand

approx EUR 0.4 thousand) per bond. As of December 31,2024, the Company recognises a payable from

these issues in the amount of EUR 198,402 thousand. As of December 31, 2023, the Company recognises a

payable from these issues in the amount of EUR 173,053 thousand.

Czechoslovak Group

Annual Report 2024

264

CSG 8.00/2028 bonds bear fixed interest 8.00% p.a. interest is payable semi-annually on January 4 and

July 4 of each year.

On November 21, 2024, the Company issued USD 734,400,400 Senior Secured Floating Rate (CSG USD)

notes due 2030 (ISIN USX1761DAJ10) with floating interest calculated as compounded 6M SOFR + 7%. Total

nominal value of placement is 734,400,400 USD. Maturity of the bonds is in 2030. Due to higher demand

the Company issued on December 19,2024 additional USD 40,600,000 Senior Secured Floating Rate Notes

due 2030. Total value of placement was USD 775,000,000. As of December 31,2024, the Company

recognises a payable from these issues in the amount of EUR 745,825 thousand.

(EUR ‚000)	December 31, 2024	December 31, 2023
Issued bonds	1,049,719	332,508
Outstanding interest	15,297	7,761
Subtotal	1,065,016	340,269
Transaction costs	(59,321)	(2,824)
Total bonds	1,005,695	337,445
Non-current	1,000,830	278,073
Current	4,865	59,372
Total bonds	1,005,695	337,445

Bonds as of December 31, 2024 and 2023 were subject to the following conditions:

					Balance			Due in
(EUR ‚000)	Currency	Nominal	Due in		as at	Due in 1	Due in 1 to	subsequent
		interest rate			December year		5 years	years
					31, 2024
CSG VAR/26	CZK	variable	2021-2026		79,392	—	79,392	—
CSG VAR/26	EUR	fixed (step-up)	2021-2026		15,025	25	15,000	—
CSG VAR/27	EUR	variable	2022-2027		11,121	21	11,100	—
CSG 8,00/2028	CZK	fixed	2023-2028		206,177	7,775	198,402	—
CSG USD	USD	variable	2024-2030		753,301	7,476	—	745,825
TOTAL					1,065,016	15,297	303,894	745,825
		Nominal interest			Balance as at		Due in 1	Due in 1 to 5
(EUR ‘000)	Currency	rate		Due in	December 31,		year	years
CSG VAR/24	CZK	variable	2019-20	24	2023	53,367	53,367	—
CSG VAR/26	CZK	variable		2021-2026		80,890	—	80,890
CSG VAR/26	EUR	fixed (step-up)		2021-2026		15,024	24	15,000
CSG VAR/27	EUR	variable		2022-2027		11,125	25	11,100
CSG 8,00/2028	CZK	fixed		2023-2028		179,863	6,810	173,053
TOTAL						340,269	60,226	280,043

The sensitivity analysis relating to fair values of financial instruments is disclosed in Note 32 – Risk

Management Methods and Disclosures.

21. Trade and Other Receivables and Other Assets

(EUR ‚000)	December 31, 2024	December 31, 2023
Receivables from retentions	240	—
Trade receivables	425,034	160,799
Receivables from sale of shares and associates	13,495	10,387
Receivables from assignment	63,123	1,805
Other receivables	38,914	38,140

Czechoslovak Group

Annual Report 2024

265

Estimated receivables	3,814	5,002
Accrued income	278	4,303
Trade and other receivables	544,899	220,436
Deferred expenses	49,883	48,429
Prepayments made	689,538	175,403
Prepayments made and deferred expenses and accrued income	739,420	223,832
Trade and other receivables and total other assets	1,284,319	444,268
Non-current	179,200	17,438
Current	1,105,119	426,830
Trade and other receivables and total other assets	1,284,319	444,268

The Group’s exposure to credit and currency risks and impairment losses in relation to trade and other

receivables is disclosed in Note 32 – Risk Management Methods.

As of December 31, 2024, trade and other receivables amounted to EUR 0 thousand (2023: EUR 99,661

thousand) and were provided as collateral to bank loans.

Contract Assets

(EUR ‚000)	December 31, 2024	December 31, 2023
Income recognised in the current period	196,949	265,297
Total expenses incurred to date	568,523	402,767
Total recognised profit (minus reported losses) to date*	195,907	141,742
Total income from contracts to date	764,430	544,509
Gradual billing*	859,279	536,135
Total	(94,849)	8,374
Of which:
- Gross amount due from customers for contractual work	26,400	72,276
- Gross amount payable to customers for contractual work	(121,249)	(63,903)
Total	(94,849)	8,373
Gross amount due from customers for contractual work	26,400	72,276
Prepayments received offset against gross amounts due from customers	(7,554)	(57,077)
Net amount due from customers for contractual work	18,846	15,199
Prepayments received from customers for contractual work	156,130	200,827

22. Deferred Tax Assets and Liabilities

A. Reported Deferred Tax Assets and Liabilities

The following deferred tax assets (liabilities) were reported:

(EUR ‚000)	December 31, 2024			December 31, 2023
	Assets	Liabilities	Net	Assets	Liabilities	Net
Intangible fixed assets	3,902	(72,136)	(68,234)	141	(48,983)	(48,842)
Property, plant and equipment	6,212	(45,562)	(39,350)	2,284	(19,965)	(17,681)
Investment property	—	(793)	(793)	192	(210)	(18)
Other investments	29,802	(32,874)	(3,072)	176	—	176
Provided loans	19	(258)	(239)	19	—	19
Receivables	18,118	(1,266)	16,852	3,995	(298)	3,697
Other assets	533	(84)	449	33	(336)	(303)
Inventories	36,011	(314)	35,697	4,419	(2,245)	2,174
Provisions	9,656	(36)	9,620	3,326	—	3,326
Loan interest	—	(4,602)	(4,602)	1	(18)	(17)

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266

Payables	17,007	(4,713)	12,294	394	(48)	346
Other payables	8,757	(6,543)	2,214	2,021	—	2,021
Tax losses of prior years	174	—	174	164	—	164
Other temporary	2,529	(16,382)	(13,853)	1,818	(912)	906
differences
Total	132,720	(185,563)	(52,843)	18,983	(73,015)	(54,032)
Tax offsetting	(105,947)	105,947	—	(7,343)	7,343	—
Net deferred tax asset	26,773	(79,616)	(52,843)	11,640	(65,672)	(54,032)
(tax liability)

A deferred tax asset arising from unutilised tax losses of prior years is only recognised if it is likely that a

future taxable profit will be generated in respect of which it will be possible to utilise unutilised tax losses.

The moment when the possibility of utilising tax losses expires is presented in the table below:

(EUR ‚000)	2024	2025	2026	2027	2028	2028	Total
						onwords
Total tax losses	385	248	571	387	147	323	2,061
Tax losses – utilized	—	—	53	53	68	—	174
Tax losses – unutilized	385	248	518	334	79	323	1,887

B. Movements in Temporary Differences During the Year

(EUR ‚000)	Balance	Reported				Effect of	Balance
	as at	through	Reported			changes	as at
Temporary difference in	January 1,	comprehensive	through	Acquired	Sold	in foreign	December
relation to the below items:	2024	income	equity			exchange	31, 2024
						rates
Intangible fixed assets	(48,842)	4,268	(799)	(23,589)	—	728	(68,234)
Property, plant and equipment	(17,681)	(18,259)	8,593	(12,202)	11	188	(39,350)
Investment property	(18)	(589)	(191)	—	—	5	(793)
Other investments	176	(3,095)	(138)	—	—	(15)	(3,072)
Loans provided	19	(592)	334	—	—	—	(239)
Receivables	3,697	4,370	6,329	2,543	—	(87)	16,852
Other assets	(303)	13,809	(21,502)	8,390	—	55	449
Inventories	2,174	17,436	15,652	522	—	(87)	35,697
Provisions	3,326	17	6,338	—	—	(61)	9,620
Loan interest	(17)	15,466	(20,928)	905	—	(28)	(4,602)
Payables	346	(1,753)	6,513	7,095	—	93	12,294
Other liabilities	2,021	(82)	191	122	—	(38)	2,214
Tax losses of prior years	164	(1,004)	1,016	—	—	(2)	174
Other temporary differences	906	(12,313)	(1,516)	(950)	—	20	(13,853)
Total	(54,032)	17,679	(108)	(17,164)	11	771	(52,843)

(EUR ‘000)	Balance	Reported				Effect of	Balance
	as at	through	Reported			changes	as at
Temporary difference in	January 1,	comprehensive	through	Acquired	Sold	in foreign	December
relation to the below items:	2023	income	equity			exchange	31, 2023
						rates
Intangible fixed assets	(52,955)	2,047	1,960	—	—	105	(48,843)
Property, plant and equipment	(17,304)	(739)	124	1	(16)	253	(17,681)
Investment property	107	(125)	—	—	—	1	(17)
Other investments	131	49	—	—	—	(4)	176
Loans provided	5	15	—	—	—	(1)	19

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267

Receivables	3,955	140	(657)	—	312	(54)	3,696
Other assets	(234)	(82)	1	—	—	12	(303)
Inventories	414	3,018	(1,070)	(36)	(58)	(93)	2,175
Provisions	2,102	1,321	(45)	—	31	(83)	3,326
Loan interest	—	(17)	—	—	—	—	(17)
Payables	143	202	8	—	—	(7)	346
Other liabilities	(618)	2,716	19	—	—	(96)	2,021
Tax losses of prior years	181	(14)	(3)	—	—	—	164
Other temporary differences	(1,033)	1,628	345	(5)	—	(29)	906
Total	(65,106)	10,159	682	(40)	269	4	(54,032)

23. Inventory

(EUR ‚000)	December 31, 2024	December 31, 2023
Material	543,353	346,836
Finished products	295,807	78,217
Goods	211,065	132,744
Work in progress	170,088	82,749
Prepayments to suppliers	939,828	219,699
Total inventory	2,160,141	860,245

As of December 31, 2024, the allowance for inventory was EUR 8,715 thousand (2023: EUR 8,015

thousand).

As of December 31, 2024, no inventory was provided as collateral to secure bank loans (2023: EUR 187,975

thousand).

24. Tax Receivables

(EUR ‚000)	December 31, 2024	December 31, 2023
Value added tax	18,328	16,973
Other taxes	3,053	2,358
Total tax receivables	21,381	19,331

25. Cash and Cash Equivalents

(EUR ‚000)	December 31, 2024	December 31, 2023
Current accounts with banks	1,160,661	398,276
Term deposits	31,979	105,066
Cash on hand	19,256	839
Other cash equivalents	36,591	59,684
Cash and cash equivalents in the cash flow statement	1,248,487	563,865

26. Equity

A. Share Capital

As of December 31, 2022, authorised, issued and fully paid-in share capital consisted of twenty ordinary

registered shares in the book entry form in the nominal value of CZK 100,000,000. As of December 31, 2021,

Czechoslovak Group

Annual Report 2024

268

share capital consisted of twenty ordinary registered shares in the book entry form in the nominal value of

CZK 100,000,000.

In 2021, the sole shareholder decided to increase the share capital of CZECHOSLOVAK GROUP a.s. The

share capital was increased by CZK 1,998,000,000 (EUR 78,353,000) from CZK 2,000,000 (EUR 74,000) to

CZK 2,000,000,000 (EUR 78,427,000) from the Company’s own resources, i.e. from other reserves – other

capital reserves. The increase in the share capital was carried out by increasing the nominal value of the

existing shares held by the sole shareholder of the Company by increasing the nominal value of each share

by CZK 99,900,000, i.e. to CZK 100,000,000, for the existing twenty registered book-entry shares with a

nominal value of CZK 100,000 per share.

The shareholder is entitled to a payment of dividends and is entitled to vote at the General Meetings of the

Company’s shareholders with one vote attributable to a share of CZK 100,000 thousand. In 202, t4he

Company paid no dividends (2023: EUR 0 thousand).

	Number of		Shares Ownership percentage		Voting
December 31, 2024	shares				rights
	Pieces		EUR ‘000	%	%
CSG FIN a.s., Corporate ID: 141 41 442		20	78,427	100	100
Total shares		20	78,427	100	100

Funds reported in equity include the following items:

(EUR ‘000)	December 31, 2024	December 31, 2023
Other capital reserves	65,931	(139,845)
Foreign currency translation reserve	38,150	34,136
Total	104,081	(105,709)

B. Other Capital Reserves

These reserves include contributions outside the share capital provided by the Company’s sole shareholder,

which amounted to EUR 202,472 thousand as of December 31, 2024 (2023: EUR 33,262 thousand) and

conditional commitment to acquire non-controlling share which amounted to EUR 148,777 thousand as of

December 31, 2024 (2023 EUR 176,451 thousand). The conditional commitment to acquire non-controlling

interest is disclosed as Put option liability at the same value.

C. Reserve from foreign currency translation

The reserve includes changes in the equity of companies with a functional currency other than the Czech

crown due to exchange rate changes over time.

269

27. Non-Controlling Interests

Summarised financial information in respect of each of the Group’s subsidiaries that has material non-controlling interests (NCI) is set out below.

			Fiocchi						FABRICA DE
December 31,	Fiocchi	EXCALIBUR	of	VOP	ZVS	MSM	NIKA	Armi	MUNICIONES	Lyalvale	Excalibur	Other	Consolidation
2024	Munizioni	ARMY spol.	America	Nováky,	Holding,	EXPORT,	Development	Perazzi	DE	Express	International	immaterial	elimination	Total
	S.p.A	s r.o.	Inc.	a.s.	a.s.	s.r.o.	a.s.	S.p.A.	GRANADA	Limited		subsidiaries*
		Czech		Slovak	Slovak	Slovak	Czech		S.L.	United	Czech
(EUR ‚000)	Italy	Republic	USA	Republic	Republic	Republic	Republic	Italy	Spain	Kingdom	Republic
Non- controlling	30.00%	10.90%	30.00%	19.80%	59.50%	19.80%	10.10%	20.00%	19.80%	33.15%	11.00%
interest
percentage
Non-current	613,000	47,734	32,498	28,431	55,833	3,912	72,795	29,555	7,582	8,877	60,485
assets
Current assets	143,418	2,247,993	106,732	272,338	200,914	872,875	222	14,088	185,293	13,051	530,128
Non-current	198,653	67,723	3,274	2,802	12,864	296	—	7,098	6,136	816	9
liabilities
Current	168,259	1,786,371	39,267	181,400	216,395	792,627	12	3,982	153,169	4,830	549,953
liabilities
Net assets	389,506	441,633	96,688	116,567	27,487	83,864	73,004	32,563	33,570	16,282	40,651
Carrying
amount of the non-controlling	108,073	50,517	26,897	22,523	16,765	16,020	9,399	6,513	6,426	4,542	4,153	35,058	6,421	313,307
interest
Revenue	253,867	2,599,709	168,382	259,849	119,368	645,244	—	15,277	162,812	23,746	437,337
Profit (+)/loss (- )	23,095	440,325	8,477	93,911	11,595	82,506	144	728	22,171	1,498	34,257
Other comprehensive income (OCI)	—	(278)
Total
comprehensive income	23,095	440,046	8,477	93,911	11,595	82,506	144	728	22,171	1,498	34,257
Profit (+)/loss (- ) attributable to the NCI	6,929	47,995	2,543	17,843	6,899	15,676	15	146	4,213	496	3,768	790	—	107,313
OCI attributable to the NCI		(30)										30	—
Net increase
(+)/decrease (- ) in cash and cash	(24,647)	452,665	(21,774)	(15,450)	28,244	56,292	(0)	579	1,119	1,134	22,136
equivalents

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Dividends paid	—	—	—	—	2,483	—	—	—	—	—	981	12,490	15,954
to the NCI

—

271

Material changes in the non-controlling interest during the year primarily include the following changes to

the effective ownership interest:

In the year ended December 31, 2024:

— NIKA Development a.s. from 16.4 % to 10.1 % (effective interest) as of August 28, 2024;

— MSM Group s.r.o (including all its subsidiaries) from 19 % to 19.8 % (effective interest) as of July 11,

2024;

For effects of changes in non-controlling interests reported through equity, refer to the consolidated

statement of changes in equity.

272

	Fiocchi	EXCALIBUR	ZVS	NIKA	VOP	Fiocchi	Lyalvale	Baschieri	MSM	Armi	Tatra
December 31, 2023	Munizioni	ARMY spol.	holding,	Development	Nováky,	of	Express	&	EXPORT,	Perazzi	Defence	Other
	S.p.A	S r.o.	a.s.	a.s.	a.s.	America	Limited	Pellagri	s.r.o.	S.p.A.	Vehicle	immaterial	Consolidation	Total
						Inc.		S.p.A			a.s.	subsidiaries*	elimination
(EUR ‘000)	Italy	Czech	Slovak	Czech	Slovak	USA	United	Italy	Slovak	Italy	Czech
		Republic	Republic	Republic	Republic		Kingdom		Republic		Republic
Non-controlling interest	30.00%	10.90%	60.00%	16.40%	19.00%	30.00%	33.00%	30.00%	19.00%	20.00%	20.00%
percentage
Non-current assets	626,866	36,510	73,403	11,982	33,994	31,553	8,990	14,141	2,512	10,436	22,048
Current assets	126,592	715,730	3,058	144,982	118,872	60,594	6,370	28,328	268,745	10,568	77,300
Non-current liabilities	242,761	16,822	—	3,484	4,644	13,192	861	6,383	15,701	1,721	2,141
Current liabilities	134,241	524,400	26	64,023	39,843	57,343	1,917	25,080	239,737	5,450	84,295
Net assets	376,456	211,018	76,435	89,457	108,379	21,612	12,582	11,006	15,819	13,833	12,912
Carrying amount of the non-controlling interest	100,822	22,333	14,137	16,490	31,570	12,486	4,049	3,206	2,947	2,682	2,484	16,182	(2,910)	226,478
Revenue	204,829	783,189	—	130,924	193,095	80,088	9,270	66,103	221,833	—	134,109
Profit (+)/loss (-)	(5,336)	149,172	213	51,460	17,402	6,045	536	3,243	14,763	—	5,364
Other comprehensive income (OCI)	—	623	—	—	—	—	—	—	—	—	—
Total comprehensive income	(5,336)	149,795	213	51,460	17,402	6,045	536	3,243	14,763	—	5,364
Profit (+)/loss (-) attributable to the NCI	(1,601)	16,258	35	9,777	5,221	3,597	178	973	2,805	—	1,063	(2,150)	—	36,156
OCI attributable to the NCI	—	68	—	—	—	—	—	—	—	—	—	(68)
Net increase (+)/decrease
(-) in cash and cash	8,082	90,257	1	25,394	353	8,891	—	793	(6,825)	742	(2,592)
equivalents
Dividends paid to the NCI	—	—	—	—	—	—	—	—	—	—	—	6,295		6,295

273

Material changes in the non-controlling interest during the year primarily include the following changes to

the effective ownership interest:

In the year ended December 31, 2023:

— • RETIA a.s. from 5 % to 10 % (effective interest) as of March 29, 2023;

— • CSG Land Systems CZ a.s. from 10 % to 10.9 % (effective interest) as of May 31, 2023;

— • CS SOFT a.s. from 22 % to 7.5 % (effective interest) as of October 5, 2023;

— • KONVERTIAL SPV a.s. from 0 % to 45 % (effective interest) as of July 17, 2023;

— • NIKA Development a.s. from 8.03 % to 16.37 % (effective interest) as of August 22, 2023;

— • TRADITION CS a.s. from 2.5 % to 7.5 % (effective interest) as of October 5, 2023.

For effects of changes in non-controlling interests reported through equity, refer to the consolidated

statement of changes in equity.

28. Trade and Other Payables

(EUR ‚000)	December 31, 2024	December 31, 2023
Prepayments received	1,431,917	4,673
Trade payables	342,340	218,365
Other payables	134,681	31,959
Payables to employees	56,169	17,425
Payables arising from outstanding vacation	9,349	2,611
days
Government grants	14,334	681
Trade and other payables – subtotal	1,988,790	275,714
Unbilled supplies	105,762	78,696
Accrued expenses	11,696	2,375
Estimated payables – subtotal	117,458	81,071
Trade and other payables – total	2,106,248	356,785
Non-current	149,297	11,026
Current	1,956,951	345,759
Trade and other payables – total	2,106,248	356,785

Prepayments received mostly consist of prepayments from EXCALIBUR ARMY spol. s r.o. in the amount of

EUR 1.213 billion.

29. Provisions

(EUR ‚000)	Provision for	Provision for	Other	Total
	complaints	legal claims	provisions
Balance as at January 1, 2024	7,452	3,386	2,575	13,413
On acquisition of subsidiary	—	4,854	1,089	5,943
Additions provision in the year	7,881		12,022	19,903
Creation/(release) of provisions through balance	—	—	6	6
sheet
Utilisation of provision	(23)	(160)	—	(183)
Release – provisions released in the given year	(2,621)	(3,117)	(792)	(6,530)
Effects of changes in 273exchange rates	(146)	(49)	(1,251)	(1,446)
Balance as at December 31, 2024	12,543	4,914	13,649	31,106
Non-current	6,895	4,914	983	12,792
Current	5,648	—	12,666	18,314
Total provisions	12,543	4,914	13,649	31,106

(EUR ‘000)	Provision for	Provision for	Other	Total
	complaints	legal claims	provisions
Balance as at January 1, 2023	5,532	2,859	4,815		13,206

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274

(EUR ‘000)	Provision for	Provision for	Other	Total
	complaints	legal claims	provisions
Acquisitions through business combinations	—	—	10	10
Additions – provisions created in the given year	2,918	1,238	1,277	5,433
Creation (+) and release (-) of provisions through balance sheet	—	(202)	(3,345)	(3,547)
Use – provisions used in the given year	(498)	—	—	(498)
Release – provisions released in the given year	(307)	(430)	(13)	(750)
Sales outside the Group	—	—	(181)	(181)
Effects of changes in exchange rates	(193)	(79)	12	(260)
Balance as at December 31, 2023	7,452	3,386	2,575	13,413
Non-current	5,636	3,386	1,158	10,180
Current	1,816	—	1,417	3,233
Total provisions	7,452	3,386	2,575	13,413

The expected timeframe for the use of non-current warranty provisions is two years, for the other

provisions it is 5-10 years. Significant legal disputes are described in the Note 37.

30. Tax Payables

(EUR ‚000)	December 31, 2024	December 31, 2023
Value added tax	4,624	1,439
Social security and health insurance	7,256	5,531
Other taxes	33,170	8,294
Total tax payables	45,050	15,264

Other taxes in 2024 primarily represent excise tax in Vista Outdoor Inc/ The Kinetic Group.

31. Financial Guarantees and Contingent Liabilities

(EUR ‘000)	December 31, 2024	December 31, 2023
Provided guarantees	93,286	69,323
Total financial guarantees	93,286	69,323

The total value of guarantees provided as of December 31, 2024 predominantly included guarantees

provided by EXCALIBUR INTERNATIONAL a.s.. (EUR 41,527 thousand), FABRICA DE MUNICIONES DE

GRANADA S.L. (EUR 38,081 thousand), ELDIS Pardubice s.r.o. (EUR 8,449 thousand), CZECHOSLOVAK

GROUP a.s. (EUR 5,071 thousand), DAKO-CZ, a.s. (EUR 149 thousand).

The total value of guarantees provided as of December 31, 2023 predominantly included guarantees

provided by CZECHOSLOVAK GROUP a.s. (EUR 46,314 thousand), MSM GROUP s.r.o. (EUR 37,042

thousand), Prague Fertility Centre s.r.o. (EUR 9,342 thousand), CS SOFT a.s. (EUR 8,842 thousand),

EXCALIBUR ARMY spol. S.r.o. (EUR 4,216 thousand), ELDIS Pardubice s.r.o. (EUR 4,023 thousand), VOP

Nováky, a.s. (EUR 1,021 thousand), DAKO-CZ, a.s. (EUR 407 thousand).

Bank guarantees issued by the above entities are connected with guarantees to customers for the delivery

of products without defects .

32. Risk Management Methods

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275

This Note provides a detailed description of the financial and operating risks to which the Group is exposed

and the methods used in managing them. The major financial risks to which the Group is exposed include

credit risk, liquidity risk, interest rate risk and currency risk.

The following table contains information about:

— Classes of financial instruments;

— Amortised cost of financial instruments;

— Fair values of financial instruments (with the exception of financial instruments whose net book value

approximates their fair value); and

— The hierarchy levels of the fair values of financial assets and financial liabilities for which fair value has

been disclosed.

276

December 31, 2024		Mandatorily at	Financial
	Note	fair value	assets at	Other financial	Total	Level 1	Level 2	Level 3	Total
(EUR ‚000)		FVTPL – other	amortised	payables
Financial assets reported at fair value			costs
Derivatives	20	6,983	—	—	6,983	—	6,983	—	6,983
Other financial assets	20	57,866	—	—	57,866	—	57,866	—	57,866
Total		64,849	—	—	64,849	—	64,849	—	64,849
Financial assets notreported at fair value						—		—
Trade and other receivables	21	—	544,899	—	544,899	—	—	—	—
Prepayments made and accruals and deferrals	21	—	739,420	—	739,420	—	—	—	—
Provided loans	20	—	45,723	—	45,723	—	45,723	—	45,723
Other financial assets	20	—	36,108	—	36,108	—	36,108	—	36,108
Cash and cash equivalents	25	—	1,248,487	—	1,248,487	—	—	—	—
Contract costs		—	60,437	—	60,437	—	—	—	—
Contract assets		—	18,913	—	18,913	—	—	—	—
Total		—	2,693,987	—	2,693,987	—	81,831	—	81,831
Financial liabilities reported at fair value
Liability from put option	20	148,777	—	—	148,777	—	—	148,777	148,777
Derivatives	20	13,017	—	—	13,017	—	13,017	—	13,017
Total		161,794	—	—	161,794	—	13,017	148,777	161,794
Financial liabilities not reported at fair value
Overdraft	20	—	—	449,589	449,589	—	449,589	—	449,589
Secured bank loans	20	—	—	1,414,816	1,414,816	—	1,414,816	—	1,414,816
Unsecured bank loans	20	—	—	44,077	44,077	—	44,077	—	44,077
Owner loans and loans from other related parties	20	—	—	1,216	1,216	—	1,216	—	1,216
Loans from third parties (other loans)	20	—	—	2,798	2,798	—	2,798	—	2,798
Trade and other payables	28	—	—	2,106,248	2,106,248	—	2,106,248	—	2,106,248
Issued bonds including outstanding	20	—	—	1,065,016	1,065,016	—	1,065,016	—	1,065,016
interest
Current and non-current contractual		—	—	880,066	880,066	—	880,066	—	880,066
payables
Total		—	—	5,963,826	5,963,826	—	5,963,826	—	5,963,826

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277

December 31, 2023		Mandatorily	Financial assets
	Note	at fair value	at amortised	Other financial	Total	Level 1	Level 2	Level 3	Total
(EUR '000)		FVTPL -	costs	payables
Financial assets at fair value		other
Derivatives	20	18,433	—	—	18,433	—	18,433	—	18,433
Other financial assets	20	5,984	—	—	5,984		5,984	—	5,984
Total		24,417	—	—	24,417	—	24,417	—	24,417
Financial assets not reported at fair value
Trade and other receivables	21	—	220,436	—	220,436	—	—	—	—
Prepayments made and accruals and deferrals	21	—	223,832	—	223,832	—	—	—	—
Provided loans	20	—	166,559	—	166,559	—	166,559	—	166,559
Other financial assets	20	—	82,633	—	82,633	—	82,633	—	82,633
Cash and cash equivalents	25	—	563,865	—	563,865	—	—	—	—
Contract costs		—	41,185	—	41,185	—	—	—	—
Contract assets		—	15,211	—	15,211	—	—	—	—
Total			1,313,721		1,313,721		249,192		249,192
Financial liabilities reported at fair value
Liability from put option		(176,451)	(176,451)					(176,451)	(176,451)
Derivatives	20	(6,984)	—	—	(6,984)	—	(6,984)		(6,984)
Total		(183,435)	(176,451)	—	(6,984)	—	(6,984)	(176,451)	(183,435)
Financial liabilities not reported at fair value
Overdraft	20	—	—	(76,282)	(76,282)	—	(76,282)	—	(76,282)
Secured bank loans	20	—	—	(587,865)	(587,865)	—	(587,865)	—	(587,865)
Unsecured bank loans	20	—	—	(53,907)	(53,907)	—	(53,907)	—	(53,907)
Owner loans and loans from other related parties	20	—	—	(38,288)	(38,288)	—	(38,288)	—	(38,288)
Loans from third parties (other loans)	20	—	—	(1,057)	(1,057)	—	(1,057)	—	(1,057)
Trade and other payables	28	—	—	(444,268)	(444,268)	—	—	—	—
Issued bonds including outstanding	20	—	—	(340,269)	(340,269)	—	(340,269)	—	(340,269)
interest
Current and non-current contractual		—	—	(840,524)	(840,524)	—	—	—	—
payables
Total				(2,382,460)	(2,382,460)		(1,097,668)		(1,097,668)

A. Credit Risk

a. Credit Risk Exposure

Credit risk is a risk of the Company incurring a financial loss if the customer or counterparty fails to meet its

contractual obligations in transactions with financial instruments. The risk primarily arises in respect of the

Group’s amounts due from customers and in respect of loans and borrowings. Credit risk is limited in

respect of highly liquid assets (cash product on bank accounts) given that counterparties are entities with

high credit ratings.

1) Credit Risk Management in Respect of Trade and Other Receivables

The Group reviews the financial positions of its existing customers and regularly assesses their

creditworthiness. In respect of new customers requesting goods and services above a certain limit

(determined on the basis of the size and nature of the specific business), the customer is firstly subject to an

individual analysis of creditworthiness and only then are standard payment and supply terms proposed to it.

The Group assesses the credit quality of customers by reference to their financial position, historical

experience and other factors. Individual limits for managing this risk are determined based on internal or

external ratings in compliance with the limits stipulated by the Group’s internal guidelines. The Group’s

management regularly assesses the level of credit risk and the size of its exposure and, at least on a

monthly basis, monitors the balance of overdue trade receivables. The Group also requires that its

customers provide it with appropriate forms of guarantees or collateral.

2) Impairment Loss and Write-Off of Receivables

The Group recognises allowances for impairment based on an estimate of future expected losses that may

be incurred in respect of trade receivables, other receivables and provided loans. Expected future losses

are estimated in compliance with the methodology applied by the Group.

To measure expected credit losses, trade receivables, loans and other receivables were assessed based on

the customer’s individual rating and days past due (referred to as the “individual approach”). The Group set

the individual assessment of receivables in relation to the rating of the debtor’s country, the reason being

that a majority of the Group’s business transactions are concluded with entities directly or closely related to

state and public institutions.

Receivables are classified by country of origin of the business from which the receivable is recorded. These

countries were assigned rating based on an assessment by Standard and Poors. Using this rating,

receivables are classified into three groups based on the risk of potential failure to recover the receivables:

The first low-risk group includes receivables from entities based in countries with a rating of AAA to A-,

which are considered to be stable with a low risk of default. A probability of default of 0.08% has been

assigned to this group of receivables. This probability corresponds with a one year probability of default of a

corporate client included in the investment grade (refer to Standard and Poors 2022 Annual Global

Corporate Default, Table No. 24.)

The highest-risk group includes private businesses from countries with a rating of BBB+ and worse, which

has been assigned the highest probability of default at 3.52 % as of December 31, 2024 (3.52 % as of

December 31, 2023). This probability corresponds with a one-year probability of default of a corporate client

included in the speculative grade (refer to Standard and Poors 2022 Annual Global Corporate Default, Table

No. 24).

The middle-risk group includes public entities from countries with a rating of BBB+ and worse. This group

has been assigned the probability of default at 1.8%. This value has been selected as the arithmetic average

of the low-risk and high-risk values .

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Furthermore, the Group has identified a group of critical receivables which includes receivables to bankrupt

or insolvent entities, with a 100% probability of default. In this respect, the Group reports provisions at the

level of lifetime loss in respect of all types of receivables (including provided loans).

The Group anticipates loss given default (LGD) at 100 %, if no guarantee or collateral was stipulated.

The Group always reports lifetime expected credit loss in respect of trade receivables, contract assets and

receivables arising from leases.

The allowance amount measured in line with the above-described rating-based system additionally includes

factors specific to the given debtors, if such information is available to the Group.

In respect of other financial instruments, the Group reports lifetime expected credit loss for their duration,

provided a significant increase in credit risk has occurred since initial recognition. However, if credit risk has

not significantly increased since initial recognition in respect of the financial instrument, the Group will

calculate the allowance for the loss arising from this financial instrument in the amount of expected credit

losses over 12 months.

3) Write-off of Receivables

The Group assesses default receivables. If the receivable is assessed not to be recoverable by any means

and the statute of limitations has expired – i.e. a period greater than 3 years from the due date – the Group’s

management will decide to write it off.

b. Impairment losses

The aging analysis and impairment losses in respect of financial assets with the exception of cash and cash

equivalents as of the balance sheet date are as follows.

1) Trade and other receivables and contract assets

As at December 31, 2024

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Group*
1	417,695	(16,819)	(3.29)%	No
2	77,528	(10,159)	(12.52)%	No
3	110,887	(15,320)	(13.82)%	No
Total	606,110	(42,298)

* Low risk (Group 1), Middle risk (Group 2), High risk (Group 3), Critical (Group 4)

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Maturity
Covered portion of financial assets	20,231	—	—	No
Before due date	443,454	(9,360)	(1.75)%	No
1-90 days past due	72,593	(1,954)	(2.69)%	No
91-180 days past due	31,930	(1,132)	(3.55)%	No
181-360 days past	12,303	(4,253)	(34.57)%	Yes
due
More than 360 days	25,599	(25,599)	(100.00)%	Yes
past due
Total	606,110	(42,298)

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As at December 31, 2023

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Group*
1	172,692	(5,324)	(3.08)%	No
2	49,293	(3,930)	(7.97)%	No
3	43,019	(20,103)	(46.73)%	No
4	—	—	—
Total	265,004	(29,357)

* Low risk (Group 1), Middle risk (Group 2), High risk (Group 3), Critical (Group 4)

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Maturity
Covered portion of financial assets	40,167	—	—	No
Before due date	130,874	(36)	(0.03)%	No
1-90 days past due	50,827	(137)	(0.27)%	No
91-180 days past due	8,717	(266)	(3.05)%	No
181-360 days past	10,362	(4,861)	(46.91)%	Yes
due
More than 360 days	24,057	(24,057)	(100.00)%	Yes
past due
Total	265,004	(29,357)

2) Provided loans and other financial assets

The stated gross amounts and allowances include current and non-current loans and other financial assets,

excluding derivatives and bank accounts with limited access.

As at December 31, 2024

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Group*
1	42,187	(17)	(0.03)%	No
2	3,626	(2)	(0.06)%	No
Total	45,813	(19)

* Low risk (Group 1), Middle risk (Group 2), High risk (Group 3), Critical (Group 4)

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Maturity
Covered portion of financial assets	3,313	—	—	No
Before due date	42,500	(19)	(0.03)%	No
1-90 days past due	—	—	—	No
91-180 days past due	—	—	—	No
181-360 days past	—	—	—	Yes
due
More than 360 days	—	—	—	Yes
past due
Total	45,813	(19)

As at December 31, 2023

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Group*

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281

1	205,970	(4,607)	(2.24)%	No
2	13,260	(123)	(0.93)%	No
3	14,645	(10,677)	(72.91)%	No
Total	233,875	(15,407)

* Low risk (Group 1), Middle risk (Group 2), High risk (Group 3), Critical (Group 4)

(EUR '000)	Gross	Allowance	Average credit loss	Credit impaired
Maturity
Covered portion of financial assets	38,723	—	—	No
Before due date	190,736	(12,284)	(6.44)%	No
1-90 days past due	1,315	(24)	(1.80)%	No
91-180 days past due	1	—	(4.17)%	No
181-360 days past	2	(1)	(48.78)%	No
due
More than 360 days	3,098	(3,098)	(100.00)%	Yes
past due
Total	233,875	(15,407)

The movements reported in allowances against financial assets are as follows:

(EUR '000)		Allowance as of
	2024	2023
Balance as at January 1, 2024		44,766	25,878
Impairment losses reported during the period		23,678	29,289
Cancellation of the impairment loss reported during the period		(15,116)	(5,605)
Acquisitions through business combinations		3,033	55
Sale of equity investment with loss of control		—	(2,152)
Impact of changes in FX rates		(1,044)	(2,699)
Balance as at December 31, 2024		55,317	44,766

As of the balance sheet date, the maximum exposure to credit risk is classified by counterparty and

geographical location as presented in the tables below.

3) Credit Risk by Counterparty

As at December 31, 2024

	Legal entities	State,	Financial
(EUR '000)	(non-financial			Individuals	Other	Total
Assets	institutions)	government	institutions
Loans and other financial	122,993	—	17,163	6,503	21	146,680
assets
Trade and other receivables	438,303	81,286	11,615	12,318	1,377	544,899
Contract	18,913	—	—	—	—	18,913
assets
Tax	665	23,591	3,590	—	936	28,782
receivables
Cash and cash	44,423	547	1,136,187	65,839	1,491	1,248,487
equivalents
Total	625,297	105,424	1,168,555	84,660	3,825	1,987,761

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282

As at December 31, 2023

	Legal entities	State,	Financial
(EUR '000)	(non-financial			Individuals	Other	Total
Assets	institutions)	government	institutions
Loans and other financial	171,546	2	40,173	61,888	—	273,609
assets
Trade and other receivables	179,357	13,662	12,935	4,168	10,314	220,436
Contract	13,434	1,777	—	—	—	15,211
assets
Tax	1,365	24,441	983	—	—	26,789
receivables
Cash and cash	—	4,955	558,910	—	—	563,865
equivalents
Total	365,702	44,837	613,001	66,056	10,314	1,099,910

4) Credit Risk by Territory

As at December 31, 2024

(EUR '000)	Czech Republic	Slovakia	Other*	Total
Assets
Loans and other financial	109,272	289	37,119	146,680
assets
Trade receivables and other assets	132,738	38,192	373,969	544,899
Contract assets	2,480	2,500	13,933	18,913
Tax receivables	5,885	11,971	10,926	28,782
Cash and cash	935,645	158,278	154,564	1,248,487
equivalents
Total	1,186,020	211,230	590,511	1,987,761

* The category of “Other” primarily includes receivables from other European Union countries, such as Hungary, Bulgaria,

and Italy, and from other than European Union countries, such as Ukraine, USA, UAE, Pakistan, and Vietnam

As at December 31, 2023

(EUR '000)	Czech Republic	Slovakia	Other*	Total
Assets
Loans and other financial	233,871	3,131	36,607	273,609
assets
Trade receivables and other assets	56,894	19,434	144,108	220,436
Contract assets	1,339	—	13,872	15,211
Tax receivables	8,804	8,613	9,372	26,789
Cash and cash	303,226	72,864	187,775	563,865
equivalents
Total	604,134	104,042	391,734	1,099,910

* The category of “Other” primarily includes receivables from other European Union countries, such as Hungary, Bulgaria,

and Italy, and from other than European Union countries, such as Ukraine, USA, UAE, Pakistan, and Vietnam

B. Liquidity Risk

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283

Liquidity risk is a risk of the Group running into difficulties in meeting its commitments in relation to financial

liabilities that are settled through cash or other financial assets. Individual Group entities use different

methods to manage liquidity risk.

The Group’s management focuses on the methods used by financial institutions, i.e. diversifying the

sources of funds. Thanks to the diversification, the Group is more flexible and its dependency, if any, on a

single source of funding, is limited. Liquidity risk is primarily assessed by monitoring the changes in the

structure of funding and by comparing the changes with the Group’s liquidity risk management strategy.

The below-stated table presents a breakdown of the Group’s contractual cash flows classified by their due

dates, specifically by the period remaining from the balance sheet date until the contractual maturity date. In

situations when options and payment schedules make earlier repayment possible, the Group applies

maximum caution in assessing the due dates. Therefore, the due dates of liabilities are presented at the

earliest possible dates. Liabilities without contractually stipulated due dates are classified under the

“unspecified due date” category.

As at December 31, 2024

As at

December 31,

2024

(EUR '000)	Carrying	Contractual	Fewer than	3 months	1 year to	More than	Unspecified due
Liabilities	amount	cash flows	3 months	to 1 year	5 years	5 years	date
Loans and borrowings	1,912,496	2,437,399	416,069	464,967	1,522,574	9,067	24,722
Bonds	1,005,695	1,634,239	34,332	87,194	689,534	823,179	—
Trade and other payables	2,106,248	2,106,248	382,889	215,519	134,906	373	1,372,561
Lease liabilities	99,021	99,021	3,458	10,659	56,622	28,282	—
Put Option	148,777	148,777	143,517	—	5,260	—	—
Total	5,272,237	6,425,684	980,265	778,339	2,408,896	860,901	1,397,283

As at December 31, 2023

	Carrying	Contractual cash	Fewer	3		More	Unspecified
(EUR '000)	amount	flows	than 3	months	1 year to 5 years	than 5	due date
Liabilities			months	to 1 year		years
Loans and borrowings	806,944	887,367	62,020	232,479	495,476	46,096	51,297
Bonds	337,445	428,462	7,178	80,440	340,844	—	—
Trade and other payables	251,005	251,005	173,902	54,737	9,020	—	13,345
Lease liabilities	42,523	42,548	1,733	4,615	22,554	13,646	—
Put Option	176,451	176,451	—	—	176,451	—	—
Total	1,614,368	1,785,833	244,833	372,271	1,044,345	59,742	64,642

The value of loans under “unspecified due date” represents loans that have no set contractual maturity, but

they are payable upon the creditor’s request.

The contractual cash flows are higher than the carrying amount due to the inclusion of unrecognised future

interest.

The Group does not expect that the cash flows included in the analysis of due dates would fall due earlier or

in much larger volumes.

Among others, financial liabilities were also used to fund non-current assets and inventories.

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284

C. Interest Rate Risk

During its activities, the Group is exposed to the risk of interest rate fluctuations, the reason being that the

interest-bearing assets (including investments) and interest-bearing liabilities have various due dates or

interest rate refixing dates. The period during which a specific financial instrument has a fixed interest rate

shows to what extent the financial instrument is exposed to interest rate risk.

The Group manages interest rate risk through interest rate swaps. As of December 31, 2024,

CZECHOSLOVAK GROUP a.s. had interest rate swaps in place for the CZK bonds to hedge the floating 6M

Pribor interest rates at fixed rates from 1.90 % to 5.39 % in the total volume of CZK 2,100,000 thousand

(EUR 83,382 thousand) during the period from 2025 to 2026. For a credit facility in EUR, the company

hedged floating 1M-6M Euribor interest rates at fixed rates from 1.23% to 5.39% in the total volume of EUR

82,268 thousand during the period from 2025 to 2028. Additionally, the company had concluded two

currency interest rate swaps CZK/EUR. The first one in the volume of CZK 467,480 thousand / EUR 19,050

thousand with a fixed rate of 16.65% for the CZK portion and 6M Euribor + 11% for the EUR portion and the

second one in the volume of CZK 1,683,500 thousands / EUR 70,000 with a fixed rate of 8% for the CZK

portion and with a fixed rate 7.18% for the EUR portion.

The Group manages interest rate risk through interest rate swaps. As of December 31, 2023,

CZECHOSLOVAK GROUP a.s. had interest rate swaps in place for the CZK bonds to hedge the floating 6M

Pribor interest rates at fixed rates from 1.22 % to 5.39 % in the total volume of CZK 2,900,000 thousand

(EUR 120,257 thousand) during the period from 2024 to 2026. For a credit facility in EUR, the company

hedged floating 1M-6M Euribor interest rates at fixed rates from 0.49% to 3.74% in the total volume of EUR

120,290 thousand during the period from 2024 to 2028. Additionally, the company had concluded two

currency interest rate swaps CZK/EUR. The first one in the volume of CZK 467,480 thousand / EUR 19,050

thousand with a fixed rate of 16.65% for the CZK portion and 6M Euribor + 11% for the EUR portion and the

second one in the volume of CZK 1,683,500 thousands / EUR 70,000 with a fixed rate of 8% for the CZK

portion and with a fixed rate 7.18% for the EUR portion.

As of December 31, 2023, JOB AIR TECHNIC a.s. had concluded interest rate swaps at fixed rates ranging

from 1.21% to 3.25% to hedge the floating interest rates of loans amounting to EUR 2,987,218 and USD

685,662.

As of December 31, 2023, DAKO-CZ a.s. had concluded interest rate swaps at fixed rates ranging from 1.4%

to 1.55% to hedge the floating interest rates of loans amounting to EUR 30,240,000.

The table presented below presents information on the level of the Group’s interest rate risk either based on

the contractual maturity periods of the Group’s financial instruments or – in respect of financial instruments

remeasured at the market interest rate before the due date – based on the date of the next interest rate

change. Assets and liabilities that do not have a contractually stipulated maturity period or do not bear

interest are classified under the “unspecified due date” category.

Financial information relating to interest-bearing and non-interest-bearing assets and liabilities and their

contractual maturity or restatement dates as of December 31, 2024, and December 31, 2023 not including

the effects of derivatives are as follows:

As at December 31, 2024	Floating interest rate			Fixed interest
	Less than 1	1 year to 5	More than	rate or	Total
(EUR '000)	year	years	5 years	unspecified
Interest-bearing financial assets
Loans and other financial assets	69,474	143	47	77,016	146,680
Total	69,474	143	47	77,016	146,680
Interest-bearing financial liabilities
Loans and borrowings	747,377	1,139,364	1,038	24,717	1,912,496
Bonds	836,317	—	—	169,378	1,005,695
Put Option	143,517	5,260	—		148,777
Total	1,727,211	1,144,624	1,038	194,095	3,066,968

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285

As at December 31, 2024	Floating interest rate			Fixed interest
	Less than 1	1 year to 5	More than	rate or	Total
(EUR '000)	year	years	5 years	unspecified
Net interest-rate risk balance	(1,657,737)	(1,144,481)	(991)	(117,079)	(2,920,288)

As at December 31, 2023	Floating interest rate			Fixed interest
			More than 5	rate or	Total
(EUR '000)	Less than 1 year	1 year to 5 years	years	unspecified
Interest-bearing financial assets
Loans and other financial assets	144,461	44,438	—	84,710	273,609
Total	144,461	44,438	—	84,710	273,609
Interest-bearing financial liabilities
Loans and borrowings	277,273	366,628	32,411	81,087	757,399
Bonds	144,455	—	—	192,990	337,445
Put Option	—	176,451	—	—	176,451
Total	421,728	543,079	32,411	274,077	1,271,295
Net interest-rate risk balance	(277,267)	(498,641)	(32,411)	(189,367)	(997,686)

Sensitivity Analysis

The Group performs stress testing using the standardised interest rate shock scenario, during which an

immediate decrease/increase in interest rates of 100 basis points is applied to the portfolio interest rate

positions in the whole length of the revenue curve.

As of the balance sheet date, the change in interest rates of 100 basis points would increase or decrease

profit by the amounts presented in the following table. The analysis assumes that all other variables, namely

foreign currency exchange rates, will remain unchanged.

(EUR '000)	For the year ended	For the year ended
	December 31, 2024	December 31, 2023
Interest rate decrease of 100 basis points	18,866		6,704
Interest rate increase of 100 basis points	(18,866)		(6,704)

Following the recognition of the above-described derivative, only a portion of EUR 752,934 thousand (2023:

EUR 27,165 thousand) of the financial liabilities from issued bonds is effectively exposed to the floating

interest rate risk.

Bonds

(EUR '000)	For the year ended	For the year ended
	December 31, 2024	December 31, 2023
Interest rate decrease of 100 basis points	7,529		272
Interest rate increase of 100 basis points	(7,529)		(272)

The fair value of CSG’s bonds (net price without accrued interest) as of December 31, 2024 is EUR 73,689

thousand for the VAR/26 issue, EUR 13,461 thousand for the FIX/26 issue issued in EUR, EUR 9,589

thousand for the VAR/27 issue issued in EUR, 173,922 thousand for the CSG 8,00/28 issued in CZK and EUR

706,829 thousand for the CSG USD issue issued in USD.

The fair value of CSG’s bonds (net price without accrued interest) as of December 31, 2023 is EUR 53,078

thousand for the VAR/24 issue, EUR 80,853 thousand for the VAR/26 issue, EUR 14,285 thousand for the

VAR/26 issue issued in EUR, EUR 10,923 thousand for the VAR/27 issue issued in EUR and 179,086

thousand for the CSG 8,00/28 issued in CZK.

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286

D. Currency Risk

The Group’s financial positions and cash flows are affected by fluctuations in the effective foreign exchange

rate.

The entities in the Group are exposed to currency risk in relation to sales, purchases and loans denominated

in currencies other than the relevant functional currencies applied by the Group. This primarily includes EUR

and USD in respect of Czech entities and CZK and USD in respect of Slovak entities. For more information

about the countries where the entities primarily operate, refer to Note 36.

The Company manages currency risk by concluding derivative transactions to hedge future cash flows

(however, this does not constitute hedge accounting) and also covers currency risk management for the

CSG Group.

The table below presents a summary of currency derivatives in nominal values for years 2024 – 2027

recorded by the Group as of December 31, 2024 (the values are presented in EUR thousand as equivalents):

		2025			2026			2027			2028
(EUR '000)	EUR	USD	Total	EUR	USD	Total	EUR	USD	Total	EUR	USD	Total
Currency derivatives for purchase
FX forward	12,022	—	12,022	—	—	—	—	—	—	—	—	—
Total currency	12,022	—	12,022	—	—	—	—	—	—	—	—	—
derivatives for purchase
Currency derivatives for sale
FX forward	171,034	6,075	177,109	111,509	4,783	116,292	52,270	—	52,270	18,981	—	18,981
FX Option	—	—	—	—	—	—	—	—	—	—	—	—
FX Swap	26,640	—	26,640	6,041	—	6,041	4,073	—	4,073	—	—	—
Total currency	197,674	6,075	203,749	117,550	4,783	122,333	56,343	—	56,343	18,981	—	18,981
derivatives for sale

		2024			2025			2026			2027
(EUR '000)	EUR	USD	Total	EUR	USD	Total	EUR	USD	Total	EUR	USD	Total
Currency
derivatives for purchase
FX forward	13,558	—	13,558	—	—	—	—	—	—	—	—	—
Total currency
derivatives for purchase	13,558	—	13,558	—	—	—	—	—	—	—	—	—
Currency
derivatives for sale
FX forward	162,119	6,767	168,886	97,038	6,188	103,226	26,403	4,872	31,275	12,591	—	12,591
FX Option	—	—	—	—	—	—	—	—	—	—	—	—
FX Swap	1,386	—	1,386	—	—	—	—	—	—	—	—	—
Total currency	163,505	6,767	170,272	97,038	6,188	103,226	26,403	4,872	31,275	12,591	—	12,591
derivatives for sale

The fair value of the open positions disclosed above amounts to EUR 64,849 thousand in the financial

assets line and EUR 13,017 thousand in the financial liabilities line, see Note 32.

The following tables present the structure of assets and liabilities as of December 31, 2024 (December 31,

2023) by currency (translated to EUR thousand) at the level of the Group:

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287

As at December 31, 2024

(EUR '000)	CZK	EUR	HUF	USD	Other	Total
Assets
Loans and other financial	23,932	86,680	—	27,035	9,033	146,680
assets
Trade and other receivables	55,959	241,904	—	242,704	4,332	544,899
Contract assets	12,974	5,881	—	—	58	18,913
Cash and cash equivalents	170,799	942,216		130,888	4,584	1,248,487
Total assets	263,664	1,276,681	—	400,627	18,007	1,958,979
Liabilities
Loans, borrowings
and other financial	63,006	1,849,430	—	66	(6)	1,912,496
instruments
Bonds	283,291	26,141	—	696,263	—	1,005,695
Trade and other payables	192,250	1,616,756		293,300	3,942	2,106,248
Libility from put option	—	148,777	—	—	—	148,777
Total liabilities	538,547	3,641,104	—	989,629	3,936	5,173,216
Net currency risk balance	(274,883)	(2,364,423)	—	(589,002)	14,071	(3,214,237)

As at December 31, 2023

(EUR '000)	CZK	EUR	HUF	USD	Other	Total
Assets
Loans and other financial	154,761	96,336	—	7,124	15,388	273,609
assets
Trade and other receivables	42,425	136,670	—	37,586	3,755	220,436
Contract assets	1,339	13,135	—	726	11	15,211
Cash and cash	53,018	436,983	—	71,643	2,221	563,865
equivalents
Total assets	251,543	683,124	—	117,079	21,375	1,073,121
Liabilities
Loans, borrowings
and other financial	40,275	750,502	—	10,857	5,310	806,944
instruments
Bonds	337,445	—	—	—	—	337,445
Trade and other payables	65,914	247,759	—	40,664	2,448	356,785
Put Option	—	176,451	—	—	—	176,451
Total liabilities	443,634	1,174,712	—	51,521	7,758	1,677,625
Net currency risk balance	(192,091)	(491,588)	—	65,558	13,617	(604,504)

The following tables present the exposure to currency risk as of December 31, 2024 (December 31, 2023)

without the recognition of financial derivatives:

As at December 31, 2024

(EUR '000)	CZK	EUR	HUF	USD	Other	Total
Assets
Loans and other financial	23,932	86,680	—	27,035	9,033	146,680
assets
Trade and other receivables	55,959	238,925	—	242,704	4,332	541,920
Contract assets	12,974	5,881	—	—	58	18,913
Cash and cash equivalents	218	781,302	—	62,218	365	844,103
Total assets	93,083	1,112,788	—	331,957	13,788	1,551,616
Liabilities

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(EUR '000)	CZK	EUR	HUF	USD	Other	Total
Loans, borrowings
and other financial	—	1,606,777	—	—	—	1,606,777
instruments
Trade and other payables	—	26,141	—	696,26	—	722,404
Put Option	—	148,777	—	—	—	148,777
Total liabilities	—	1,781,695	—	696,263	—	2,477,958
Net currency risk balance	93,083	(668,907)	—	(364,306)	13,788	(926,342)

As at December 31, 2023

(EUR '000)	CZK	EUR	HUF	USD	Other	Total
Assets
Loans and other financial assets	—	92,587	—	7,124	15,388	115,099
Trade and other receivables	170	88,694	—	23,599	3,755	116,218
Contract assets	—	13,135	—	726	11	13,872
Cash and cash	—	323,195	—	33,778	2,221	359,194
equivalents
Total assets	170	517,611	—	65,227	21,375	604,383
Liabilities						—
Loans, borrowings
and other financial	—	436,906	—	9,754	5,310	451,970
instruments
Trade and other payables	66	112,957	—	22,109	2,448	137,580
Put Option	—	176,451	—	—	—	176,451
Total liabilities	66	726,314	—	31,863	7,758	766,001
Net currency risk	104	(208,703)	—	33,364	13,617	(161,618)
balance

The following material exchange rates were applied during the year:

		December 31, 2024	December 31, 2023
		Spot exchange rate as	Spot exchange rate as of the
CZK	Average rate	of the balance sheet	Average rate
		date	balance sheet date
1 EUR	25.119	25.185	24.007	24.725
1 USD	23.208	24.237	22.210	22.376

Sensitivity Analysis

The strengthening of the Czech crown as of the balance sheet date (as presented below) compared to EUR

and USD would result in an increase/decrease of equity as presented in the table below. The analysis is

based on the departures from foreign currency exchange rates which the Group considered to be

sufficiently likely at of the balance sheet date. The sensitivity analysis anticipates that all other variables,

namely interest rates, will remain unchanged.

Effect on profit or loss in EUR thousand	December 31, 2024	December 31, 2023
EUR (10% strengthening)	190 461	129
USD (10% strengthening)	52 525	(135)

The weakening of the Czech crown as of the balance sheet date compared to the above-listed currencies

would have the same effect (albeit with the opposite sign), provided that all the other variables remained the

same.

E. Operating Risk

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Operating risk is a risk of losses arising from embezzlement, unlawful activities, errors, negligence,

inefficiency or system failure. The risk of this type arises during all of the Group’s activities and all of the

corporate entities are exposed to it. Operating risk also includes legal risk.

The Group’s objective is to manage operating risk so that balance is preserved between preventing financial

losses and damage to the Group’s good name on the one hand, and the total effectiveness of the costs

incurred on the other hand. In addition, risk management procedures should not hinder initiative and

creativity.

The primary responsibility for the implementation of control mechanisms to cope with operating risks is

borne by management of each subsidiary. The Group’s management is responsible for managing operating

risks, whereby it may set the direction of procedures and measures resulting in the mitigation of operating

risks and the adoption of decisions about:

— The acknowledgement of individual existing risks;

— The commencement of processes that will result in the mitigation of possible effects; or

— A decrease in the extent of risky activities or their full discontinuation.

F. Capital Management

The Group’s objective in managing capital is to have a sufficient amount of funds to finance additional

acquisitions and settlement of financial liabilities.

The Company is subject to external capital requirements arising from bond placement terms. Furthermore,

the Company and its subsidiaries are subject to requirements arising from contracts with banks.

As of the balance sheet date, the Group reported the following ratio of net debt to adjusted capital:

(EUR '000)	December 31, 2024	December 31, 2023
Total liabilities	6,535,403	2,665,411
Decrease for cash and cash equivalents	(1,248,487)	(563,865)
Adjusted net debt	5,286,916	2,101,546
Total equity attributable to the holders of the Company	1,180,578	460,438
Adjusted capital	1,180,578	460,438
Ratio of debt to adjusted capital	4.48	4.56

33. Changes in Liabilities Arising from Financing Activities

The table below details changes in the group’s liabilities arising from financing activities, including both cash

and non-cash changes. Liabilities arising from financing activities are those for which cash flows were, or

future cash flows will be, classified in the group’s consolidated cash flow statement as cash flows from

financing activities.

			Non-cash changes
			Equity	Acquisition	Disposal
	January	Financing	component	of	of	Fair value	New	Other	December
(“EUR ‘000”)	1, 2024	cash	of	subsidiary	subsidiary	adjustments	leases	changes 31, 2024
		flows	convertible	(note 5)	(note 5)
			notes
Bank loans	612,293	76,170	—	12,731	(16,322)	—	—	33,182	718,054
(note 20)
Loans from related parties	28,507	5,592	—	—	—	—	—	4,189	38,288
(note 20)
Loans from third
parties (Note	11,948	(10,281)	—	—	—	—	—	(610)	1,057
20)

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290

Lease liabilities	38,268	(9,316)	—	6,598	(24)	—	3,110	3,887	42,523
(note 18)
Bonds (Note 20)	190,219	130,332	—	—	—	—	—	16,894	337,445
Interest rate
swaps fair value
hedging, cash
flow hedging or economically	533	—	—	—	—	—	—	6,451	6,984
hedging financing
liabilities
Total liabilities
from financing	881,768	192,496	—	19,329	(16,346)	—	3,110	63,994	1,144,351
activities

34. Operating Segments

The Group identifies operating segments at the level of divisions which represents the main pillars of the

Group’s business. Divisions comprise of individual member companies. Each Division has its own

management, which coordinates the development, production, and business activities of the member

companies which allows them to implement complex projects and create synergies.

Information reported to the group’s Board of Directors which is also the Chief Operating Decision Maker

(“CODM”) for the purposes of resource allocation and assessment of segment performance is focused on

revenue, Operating EBITDA, EBITDA, profit after tax, and additions to tangible and intangible assets of each

division.

The Group’s reportable segments under IFRS 8 therefore are as follows:

A. CSG AEROSPACE

The following entities operate in this segment: Atrak a.s., JOB AIR Technic a.s., ELDIS Pardubice, s.r.o., and

RETIA a.s. These entities principally focus on the development and production of radar systems,

development of air traffic control systems and maintenance and repairs of aircraft and aircraft equipment.

B. CSG DEFENCE

Group entities whose principal business activity involves trade and manufacturing activities, or providing

services in the area of military material, military equipment and systems belong to the CSG DEFENCE

segment. A major portion of sales is realised with external customers outside the CSG Group, namely in the

European Union, Ukraine, Asia and Africa. This segment is dominated by Excalibur Army s.r.o., Czech leader

on the military material market offering a wide range of military vehicles, weapon systems and ammunition

for which it provides comprehensive services – spare parts, ammunition, repairs and modernisation. Some

vehicles are manufactured internally directly by Excalibur Army s.r.o. and so is a wide array of spare parts.

EXCALIBUR INTERNATIONAL a.s. is a separate entity which does not belong directly under CSG Defence

division. However, by nature of its main business, the Group decided to include it under the defense

segment for the reporting purposes. The company’s activity is mainly trading with defense material, aviation

technology and special material including related logistics and aftersale services. TATRA DEFENCE

VEHICLE focuses mainly on the development, production, overhaul and modernisation of mainly armoured

and special vehicles for domestic and foreign customers. The Slovak entity MSM Martin a.s. predominantly

focuses on the repairs of ground military equipment and modernisation of military and special vehicles

including the sale of spare parts. Furthermore, the company specialises in the production of ammunition; its

services cover the entire ammunition life cycle including technical life extensions. The Company also

develops and produces radio-navigation electronics. The Slovak entities ZVS deal with the production of

ammunition and development, production and sale of guns. The Spanish company FABRICA DE

MUNICIONES DE GRANADA S.L. predominantly manufactures ammunition.

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291

C. CSG MOBILITY

Major players in the CSG MOBILITY segment principally include TRUCK SERVICE GROUP s.r.o., NIKA

DEVELOPMENT a.s., and TATRA MANUFACTURE a.s. The company TRUCK SERVICE GROUP s.r.o. is

mainly dedicated to the purchase, overhaul and financing of TATRA vehicles.

DAKO-CZ, a.s. dominates as a manufacturer of pneumatic, electromechanical, and hydraulic braking

systems and components for rail vehicles with a 205-year tradition. Additionally, the subsidiaries of the

aforementioned manufacturer also play a significant role. Companies in this segment realise most of their

sales outside the CSG Group.

D. CSG AMMO+

In this segment, we have newly acquired Vista Group/The Kinetic Group, which has become the largest

company in the ammunition division. The Kinetic Group is the world's leading ammunition manufacturer,

based in the USA, where its largest market is also located. It engineers and manufactures the most accurate,

powerful, and reliable ammunition in the world. Other significant part of Ammo+ division is Fiocchi Group,

which is the world’s third largest small-calibre ammunition manufacturer. The Italian family-owned

company, originally founded in 1876, has production facilities not only in its country of origin, but also in the

UK and the USA. The representative of the group is Fiocchi Munizioni S.p.A., followed by its subsidiaries

Fiocchi of America Inc and Fiocchi UK Limited.

E. OTHER

The operating segment includes entities having an economic specialisation different from that of entities

included in the operating segments disclosed above. The income generated by those entities is principally

attributable to the rental of real estate and sales of consumables. Since 2021, this segment was expanded to

include Prague Fertility Centre, a clinic for assisted reproduction.

The above-specified operating segments have their individual management at the level of individual entities;

their accounting policies are identical. The Company accounts for the income and transactions between

segments as if they represented income and transaction with third parties, i.e. at the level of arm’s length

prices.

The following tables summarise the information on operating segments for the period

from January 1, 2024, to December 31, 2024, and as of December 31, 2023, for the period

from January 1, 2023, to December 31, 2023, and as of December 31, 2023:

2024

For the year ended December 31, 2024

	CSG	CSG	CSG	CSG	OTHER	Elimination of Intra-	Consolidated data
(EUR '000)	AEROSPACE	DEFENCE	AMMO+	MOBILITY		Segmental relations
Revenues	288,661	3,301,218	482,191	77,823	102,329	(243,608)	4,008,614
Raw material
and consumables	(157,953)	(1,831,594)	(237,387)	(33,518)	(7,196)	109,984	(2,157,664)
External
costs	(29,386)	(402,740)	(61,261)	(13,485)	(54,660)	119,248	(442,284)

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292

Employee
benefits
expense	(47,179)	(92,290)	(100,436)	(21,070)	(25,239)	2	(286,212)
Depreciation
and amortisation
expense	(8,536)	(14,704)	(29,904)	(4,116)	(9,078)	47	(66,291)
Other operating
income	9,486	34,220	11,573	4,175	1,977	(403)	61,028
Other operating
expense	(5,202)	(64,955)	(14,717)	(2,026)	(16,322)	(1,096)	(104,318)
Profit/(loss)
from operating
activities	49,891	929,155	50,059	7,783	(8,189)	(15,826)	1,012,873
Financial
income	6,111	81,145	2,543	10,612	110,683	(45,244)	165,850
Financial
expense	(6,363)	(103,586)	(107,024)	(15,584)	(190,226)	44,447	(378,336)
Profit/(loss)
from other financial
instruments	(2,458)	900	(335)	(424)	105,486	(59,643)	43,526
Profit/(loss)
from financing
activities	(2,710)	(21,541)	(104,816)	(5,396)	25,943	(60,440)	(168,960)
Share of profit/(loss)
of associates
and joint
ventures, net	—	1,055	(44)	(1,545)	234	—	(300)
Profit/(loss)
from the sale
of equity
interests	—	—	—	—	2,225	—	2,225
Profit/(loss)
before tax	47,181	908,669	(54,801)	842	20,213	(76,266)	845,838
Income tax	(2,192)	(201,826)	(7,902)	(2,287)	1,756	—	(212,451)
Net
profit/(loss)
from continuing operations	44,989	706,843	(62,703)	(1,445)	21,969	(76,266)	633,387

The most significant intra-segmental revenue eliminations include transactions between the CSG DEFENCE

and CSG AEROSPACE divisions amounting to EUR 89 million, as well as between the CSG AEROSPACE and

CSG DEFENCE divisions totaling EUR 70 million. Additionally, eliminations between the OTHER and CSG

DEFENCE divisions account for EUR 52 million.

The most significant intra-segmental cost of sale and external cost eliminations include transactions

between the CSG AEROSPACE and CSG DEFENCE divisions amounting to EUR 117 million, as well as

between the CSG DEFENCE and OTHER divisions totaling EUR 53 million. Additionally, eliminations between

the CSG DEFENCE and CSG AEROSPACE divisions account for EUR 28 million.

Calculation of EBITDA

For the year ended December 31, 2024

(EUR '000)

					Elimination of
CSG	CSG DEFENCE	CSG	CSG	OTHER	Intra-	Consolidate
AEROSPACE		AMMO+	MOBILITY		Segmental	d data
					relations

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293

Net profit/(loss) from
continuing operations	44,989	706,843	(62,703)	(1,445)	21,969	(76,266)	633,387
Interest income	2,740	20,522	991	4,958	26,424	(34,175)	21,460
Interest expense	(2,518)	(20,414)	(41,058)	(8,636)	(72,646)	34,200	(111,072)
Interest expense from lease liabilities	(181)	(396)	(153)	(197)	(2.842)	—	(3,769)
Net interest profit/(loss)	41	(288)	(40,220)	(3,875)	(49,063)	25	(93,380)
Income tax	(2,192)	(201,826)	(7,902)	(2,287)	1,756	—	(212,451)
EBIT	47,140	908,957	(14,581)	4,719	73,879	(76,291)	943,823
Depriciation and amortisation expense	(8,536)	(14,704)	(29,904)	(4,116)	(9,078)	47	(66,291)
EBITDA	55,676	923,661	15,323	8,834	82,958	(76,338)	1,010,114

Calculation of OPERATING EBITDA

For the year ended December 31, 2024

	CSG	CSG	CSG	CSG		Elimination of	Consolidated
(EUR '000)	AEROSPACE DEFENCE		AMMO+	MOBILITY	OTHER	intercompany	data
						relations
Net profit (loss) from continuing operations	44,989	706,843	(62,703)	(1,445)	21,969	(76,266)	633,387
Income tax	(2,192)	(201,826)	(7,902)	(2,287)	1,756	—	(212,451)
Profit (loss) before tax	47,181	908,669	(54,801)	842	20,213	(76,266)	845,838
Share of profit (loss) of associates and joint ventures	—	1,055	(44)	(1,545)	234	—	(300)
Profit (loss) from the sale of equity interests	—	—	—	—	2,225	—	2,225
Profit (loss) from financing	(2,710)	(21,541)	(104,816)	(5,396)	25,943	(60,440)	(168,960)
activities
Financial income	6,111	81,145	2,543	10,612	110,683	(45,244)	165,850
Financial expense	(6,363)	(103,586)	(107,024)	(15,584)	(190,226)	44,447	(378,336)
Profit (loss) from other financial instruments	(2,458)	900	(335)	(424)	105,486	(59,643)	43,526
Profit (loss) from operating	49,891	929,155	50,059	7,783	(8,189)	(15,826)	1,012,873
activities
Depreciation and amortisation expense	(8,536)	(14,704)	(29,904)	(4,116)	(9,078)	47	(66,291)
OPERATING EBITDA	58,427	943,859	79,963	11,899	889	(15,873)	1,079,164

	CSG	CSG	CSG	CSG		Elimination of Intra-	Consolidated
(EUR '000)	AEROSPACE	DEFENCE	MOBILITY	AMMO+	OTHER	Segmentalintercompany	data
						relations
Net profit
(loss) from continuing operations	44,989	706,843	(1,445)	(62,703)	21,969	(76,266)	633,387
Income tax	(2,192)	(201,826)	(2,287)	(7,902)	1,756	—	(212,451)
Profit (loss)	47,181	908,669	842	(54,801)	20,213	(76,266)	845,838
before tax
Share of profit (loss)
of associates	—	1,055	(1,545)	(44)	234	—	(300)
and joint
ventures
Profit (loss)
from the sale of equity	—	—	—	—	2,225	—	2,225
interests
Profit (loss)
from financing	(2,710)	(21,541)	(5,396)	(104,816)	25,943	(60,440)	(168,960)
activities

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294

Financial	6,111	81,145	10,612	2,543	110,683	(45,244)	165,850
income
Financial	(6,363)	(103,586)	(15,584)	(107,024)	(190,226)	44,447	(378,336)
expense
Profit (loss)
from other financial	(2,458)	900	(424)	(335)	105,486	(59,643)	43,526
instruments
Profit (loss)
from operating	49,891	929,155	7,783	50,059	(8,189)	(15,826)	1,012,873
activities
Depreciation
and amortisation	(8,536)	(14,704)	(4,116)	(29,904)	(9,078)	47	(66,291)
expense
OPERATING	58,427	943,859	11,899	79,963	889	(15,873)	1,079,164
EBITDA

2023

For the year ended December 31, 2023

			CSG			Elimination of
	CSG	CSG	MOBILITY	CSG	OTHER	Intra-	Consolidated
	AEROSPACE	DEFENCE		AMMO+		Segmental	data
(EUR '000)						relations
Revenues	256,007	1,167,185	67,363	375,570	39,615	(171,310)	1,734,430
Raw material and consumables	(165,469)	(596,385)	(22,316)	(194,299)	(10,355)	147,976	(840,848)
External costs	(33,302)	(151,337)	(11,452)	(43,927)	(26,512)	21,275	(245,255)
Employee benefits
expense	(41,245)	(50,612)	(17,118)	(70,305)	(14,698)	4	(193,974)
Depreciation and amortisation expense	(12,048)	(13,315)	(3,964)	(25,790)	(5,537)	—	(60,654)
Other operating
income	4,921	(3,319)	1,956	2,745	11,239	534	18,076
Other operating
expense	(3,974)	(23,664)	(4,622)	(6,280)	4,568	325	(33,647)
Profit/(loss) from operating activities	4,890	328,553	9,847	37,714	(1,680)	(1,196)	378,128
Financial income	3,015	16,124	6,384	(131)	22,029	(24,267)	23,154
Financial expense	(7,701)	(31,978)	(12,357)	(31,287)	(45,644)	24,860	(104,107)
Profit/(loss) from other financial
instruments	(1,397)	1,082	(784)	(547)	(19,024)	11	(20,659)
Profit/(loss) from financing activities	(6,083)	(14,771)	(6,757)	(31,965)	(42,640)	604	(101,612)
Share of profit/(loss)
of associates and joint ventures, net	—	—	(415)	249	484	—	648
Profit/(loss) from the sale of equity
interests	1,326	441	—	—	(1)	—	1,766
Profit/(loss) before tax	133	314,223	3,505	5,998	(43,837)	(593)	278,430
Income tax	274	(62,497)	(1,528)	(3,878)	(1,088)	—	(68,717)
Net profit/(loss) from continuing operations	406	251,726	1,976	2,121	(44,923)	(593)	210,713

Calculation of EBITDA

For the year ended December 31, 2023

Czechoslovak Group

Annual Report 2024

295

			CSG			Elimination of
	CSG	CSG	MOBILITY	CSG	OTHER	Intra-	Consolidated
	AEROSPACE	DEFENCE		AMMO+		Segmental	data
(EUR '000)						relations
Net profit/(loss) from continuing operations	406	251,726	1,976	2,121	(44,923)	(593)	210,713
Interest income	1,751	11,369	6,687	610	18,775	(17,393)	21,799
Interest expense	(5,762)	(16,538)	(9,472)	(28,389)	(46,562)	18,048	(88,675)
Interest expense from lease liabilities	(179)	(455)	(9)	(144)	(573)	—	(1,360)
Net interest profit/(loss)	(4,190)	(5,623)	(2,794)	(27,922)	(28,362)	655	(68,236)
Income tax	274	(62,497)	(1,528)	(3,878)	(1,088)	—	(68,717)
EBIT	4,322	319,846	5,797	33,920	(15,473)	(1,247)	347,165
Depriciation and amortisation expense	(12,048)	(13,315)	(3,964)	(25,790)	(5,537)	—	(60,654)
EBITDA	16,370	333,161	9,760	59,711	(9,936)	(1,247)	407,819

Calculation of OPERATING EBITDA

For the year ended December 31, 2023

			CSG			Elimination of
	CSG	CSG	MOBILITY	CSG	OTHER	Intra-	Consolidated
	AEROSPACE	DEFENCE		AMMO+		Segmental	data
(EUR '000)						relations
Net profit/(loss) from continuing operations	406	251,726	1,976	2,121	(44,923)	(593)	210,713
Interest income	1,751	11,369	6,687	610	18,775	(17,393)	21,799
Interest expense	(5,762)	(16,538)	(9,472)	(28,389)	(46,562)	18,048	(88,675)
Interest expense from lease liabilities	(179)	(455)	(9)	(144)	(573)	—	(1,360)
Net interest profit/(loss)	(4,190)	(5,623)	(2,794)	(27,922)	(28,362)	655	(68,236)
Income tax	274	(62,497)	(1,528)	(3,878)	(1,088)	—	(68,717)
EBIT	4,322	319,846	5,797	33,920	(15,473)	(1,247)	347,165
Depriciation and amortisation expense	(12,048)	(13,315)	(3,964)	(25,790)	(5,537)	—	(60,654)
OPERATING EBITDA	16,370	333,161	9,760	59,711	(9,936)	(1,247)	407,819

Total assets and liabilities by segments

For the year ended December 31, 2024

	CSG	CSG		CSG		Elimination of	Consolidated
(EUR '000)			CSG AMMO+		OTHER	Intra-Segmental
Total assets	AEROSPACE	DEFENCE		MOBILITY		relations	data
per segment	377,630	4,202,820	3,249,745	207,766	3,531,780	(3,540,453)	8,029,288
Entities
accounted for using the equity method	—	590	1,475	81,119	739	—	83,923
Additions of intangible and tangible
assets	—	590	1,475	81,119	739	—	83,923
Total liabilities
per segment	(242,222)	(3,115,935)	(2,206,861)	(96,731)	(3,146,302)	2,272,648	(6,535,403)

For the year ended December 31, 2023

Czechoslovak Group

Annual Report 2024

296

(EUR '000)

	CSG	CSG	CSG	CSG		Elimination of	Consolidated
			MOBILITY		OTHER	Intra-Segmental
	AEROSPACE	DEFENCE		AMMO+		relations	data
Total assets per	300,199	1,718,584	261,691	877,323	590,478	(395,946)	3,352,329
segment
Entities
accounted for using the equity	—	18,049	—	1,519	83,931	—	103,499
method
Additions of intangible and tangible assets	10,923	44,171	9,802	22,625	3,333	—	90,854
Total liabilities	(238,339)	(1,257,896)	(140,073)	(698,022)	(726,891)	395,808	(2,665,413)
per segment

Information by country

For the year ended December 31, 2024

	Czech							United	Total	Consolidated
(EUR '000)	Republic	India	Italy	Slovakia	USA	Serbia	Spain	Kingdom	operating	data
									segments
Property, plant	258,985	2,616	95,233	114,214	160,388	9,232	6,943	5,977	653,588	653,588
and equipment
Intangible assets	50,071	—	521,715	10,130	1,732,683	48	260	2,900	2,317,807	2,317,807
Investment	2,525	—	3,323	—	—	—	—	—	5,848	5,848
property
Total	311,581	2,616	620,271	124,344	1,893,071	9,280	7,203	8,877	2,977,243	2,977,243

For the year ended December 31, 2023

	Czech							United	Total	Consolidated
(EUR '000)	Republic	India	Italy	Slovakia USA		Serbia	Spain	Kingdom	operating	data
									segments
Property, plant and equipment	176,637	2,064	87,586	56,787	30,858	7,771	5,570	5,800	373,073	373,073
Intangible assets	48,412	—	156,081	8,184	1,440	50	367	2,948	217,482	217,482
Investment	2,572	—	—	—	—	—	—	—	2,572	2,572
property
Total	227,623	2,064	243,667	64,971	32,297	7,821	5,937	8,747	593,128	593,128

Information on income from external customers, their breakdown by product group and geographical

breakdown is included in Note 8 Revenues.

Major customers

The Group’s analysis of the customer base identified three major customers in 2024 Their total income

amounted to EUR 1,308,338 thousand, accounting for 18.86 % of the Group’s aggregate turnover. This

income was wholly generated in the CSG DEFENCE segment. In 2023, five major customers accounted for

30.52 % of the Group’s aggregate sales.

35. Related Parties

Definition of related parties

The Group’s relations with related parties include relations with shareholders and other parties as disclosed

in the table below.

Czechoslovak Group

Annual Report 2024

297

A. Summary of balances with related parties as of December 31, 2024 and

December 31, 2023:

	Receivables and	Payables and	Receivables and	Payables
	other financial	other financial	other financial	and other
	assets	liabilities	assets	financial
				liabilities
(EUR '000)	2024	2024	2023	2023
Shareholders	—	45,115	61,324	35,547
Related parties and related individuals	4,272	732	50,545	4,363
Joint ventures	31,500	16,992	23,655	21,918
Associates	267	584	253	—
Total	36,039

63,423

135,777

61,828

B. Summary of transactions with related parties for the years ended December

31, 2024 and 31 December, 2023:

	Income		Expense		Income		Expense
(EUR '000)	2024		2024		2023		2023
Shareholders		4,882		5,062		11,591		8,309
Related parties and individuals		1,304		582		12,212		2,255
Joint ventures		31,867		68,673		23,058		47,154
Associates		412		1,298		23		—
Total		38,465		75,615		46,884		57,718

Transactions with shareholders and the Group’s key management consist of relations arising from received

and provided loans. Transactions with related parties and related individuals as well as with associates and

joint ventures principally include business relations and relations arising from received and provided loans.

Remuneration of the key Group’s management is disclosed in the Note 11, Administrative, Management and

Supervisory Bodies of CSG.All transactions have been realised under arm’s length conditions.

36. Group Entities

			December 31, 2024				December 31, 2023
	Country of		Ownership	Consolidation	Effective	Ownership	Consolidation
Entity	registration	Effective ownership percentage	interest**	method*	ownership	interest**	method*
					percentage
CZECHOSLOVAK	Czech	100,00 %	parent	-	100,00 %	parent	-
GROUP a.s.	Republic		company			company
14. OKTOBAR d.o.o.	Serbia	100.00%	direct	full	100,00 %	direct	full
Kruševac
ABIENNALE s.r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
Ammunition	USA	100.00%	indirect	full
Operations LLC
ANGERONA TRADE	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
Armi Perazzi S.p.A.	Italy	80.00%	direct	full	80.00%	direct	full
ARMY TRADE a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
AsterIVF s.r.o.	Czech	59.88%	direct	full	59.88%	direct	full
	Republic
ATLAN GROUP, spol.	Slovakia	80.20%	direct	full	81.00%	direct	full
s r.o.
ATRAK a.s.	Czech	92.50%	direct	full	92.50%	direct	full
	Republic
AVIA AVIATION a.s.	Czech	50.00%	direct	not	50.00%	direct	not
	Republic			consolidated			consolidated
AVIA Motors s.r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
AVIEN, spol. s r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
C.F.L. S.a.s.	Italy	14.00%	direct	equity	14.00%	direct	equity
CLEVELOPMENT SPV	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic

Czechoslovak Group

Annual Report 2024

298

			December 31, 2024				December 31, 2023
	Country of		Ownership	Consolidation	Effective	Ownership	Consolidation
Entity	registration	Effective ownership percentage	interest**	method*	ownership	interest**	method*
Cs BROSS, s.r.o.	Czech	100.00%	direct	full	percentage
	Republic
CS SOFT a.s.	Czech	92.50%	direct	full	92.50%	direct	full
	Republic
CSG a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG AEROSPACE a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG Ammo+ a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG CENTRAL ASIA	Czech	30.00%	direct	equity	30.00%	direct	equity
a.s.	Republic
CSG DEAL a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG DEFENCE a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG Elevate I Inc.	USA	100.00%	direct	full		direct	not
							consolidated
CSG Elevate II Inc.	USA	100.00%	direct	full		direct	not
CSG Engineering, a.s.	Czech	84.55%	indirect	full			consolidated
	Republic
CSG EXPORT a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG FIN a.s.	Czech	100.00%	direct	not	100.00%	direct	not
	Republic			consolidated			consolidated
CSG HEALTH CARE	Czech	60.00%	direct	full	60.00%	direct	full
a.s.	Republic
CSG Horizons a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG INDUSTRY a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG Land System SK	Slovakia	89.00%	direct	full	89.10%	direct	full
a.s.
CSG Land Systems	Czech	89.00%	direct	full	89.10%	direct	full
CZ a.s.	Republic
CSG MOBILITY a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSG RECOVERY s.r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CSGM a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
CZECH	Czech
CAMOUFLAGE	Republic	71.20%	direct	full	71.28%	direct	full
SYSTEMS a.s.
CZECH DEFENCE	Czech	89.00%	direct	full	89.10%	direct	full
SYSTEMS a.s.	Republic
CZECHOSLOVAK	Czech	90.00%	direct	full	90.00%	direct	full
EXPORT a.s.	Republic
CZECHOSLOVAK
GROUP POLSKA SP.	Poland	90.00%	direct	full
Z O.O.
CZECHOSLOVAKIA	Slovakia	80.20%	direct	full	100.00%	direct	full
TRADE a.s.
DAKO-CZ EN, a.s.	Czech	100.00%	direct	full	95.00%	direct	full
	Republic
DAKO-CZ INDIA	India	100.00%	direct	full	100.00%	direct	full
PRIVATE LIMITED
DAKO-CZ RE, s.r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
DAKO-CZ, a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
DEFENCE SYSTEMS	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
DEFENCE TRADE	Slovakia	89.00%	direct	full	86.33%	direct	full
SLOVAKIA, s.r.o.
Development Přelouč	Czech	89.00%	direct	full	89.10%	direct	full
s.r.o.	Republic
ELDIS Pardubice India	India	100.00%	direct	not	100.00%	direct	not
Plt				consolidated			consolidated
ELDIS Pardubice,	Czech	100.00%	direct	full	100.00%	direct	full
s.r.o.	Republic
ELTON hodinářská,	Czech	73.16%	direct	full	73.16%	direct	full
a.s.	Republic
ENGINEERING SPV	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
ENVERCOTE a.s.	Czech	60.00%	direct	full	60.00%	direct	full
	Republic
EUROPEAN AIR	Czech	89.00%	direct	full	100.00%	direct	full
SERVICES s.r.o.	Republic
EXCALIBUR ARMY	Cyprus	45.00%	direct	not	45.00%	direct	not
HELLAS LTD				consolidated			consolidated

Czechoslovak Group

Annual Report 2024

299

			December 31, 2024				December 31, 2023
	Country of		Ownership	Consolidation	Effective	Ownership	Consolidation
Entity	registration	Effective ownership percentage	interest**	method*	ownership	interest**	method*
					percentage
EXCALIBUR ARMY	Czech	89.00%	direct	full	89.10%	direct	full
spol. s r.o.	Republic
EXCALIBUR				not			not
DEFENCE SYSTEMS	Cyprus	44.10%	direct	consolidated	44.10%	direct	consolidated
PRIVATE LIMITED
EXCALIBUR	Czech	89.00%	direct	full	89.00%	direct	full
INTERNATIONAL a.s.	Republic
EXCALIBUR USA a.s.	Czech	100.00%	direct	full	51.00%	direct	not
FABRICA DE	Republic						consolidated
MUNICIONES DE	Spain	80.20%	direct	full	81.00%	direct	full
GRANADA S.L.
FALCON CSG a.s.	Czech	30.00%	direct	equity	30.00%	direct	equity
	Republic
Federal Cartridge	USA	100.00%	indirect	full
Company
FIOCCHI MUNIZIONI	Italy	70.00%	direct	full	70.00%	direct	full
S.P.A.
Fiocchi of America	USA	70.00%	direct	full	70.00%	direct	full
Inc.
FIOCCHI UNITED	United	52.50%	direct	full	52.50%	direct	full
KINGDOM LIMITED	Kingdom
GAUSSIN S.A.	France	23,15%	direct	not	20.42%	direct	not
				consolidated			consolidated
GERLENAIR a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
HARVO Reality s.r.o.	Czech	44.55%	direct	equity	44.55%	direct	equity
	Republic
HTH land a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
INTEGRA CAPITAL	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
JOB AIR Technic a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
JWL DAKO-CZ	India	50.00%	direct	full	50.00%	direct	full
(INDIA) LIMITED RN
KARBOX Holding	Czech	100.00%	direct	full	100.00%	direct	full
s.r.o.	Republic
KARBOX s.r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
KARMONIKA AERO	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
KONVERTIAL SPV	Czech	100.00%	direct	full	55.00%	direct	full
a.s.	Republic
Kopřivnice Energy	Czech	27.18%	direct	not	27.18%	direct	not
s.r.o.	Republic			consolidated			consolidated
LAIRAN SPV a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
LBP 80 S.r.l.	Italy	80.00%	direct	full	80.00%	direct	full
LIAZ TRUCKS a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
LOSTR a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
Lyalvale Express	Velká	66.85%	direct	full	70.00%	direct	full
Limited	Británie
MADE CS a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
MANDURIA TRADE	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
MATIS z.a.o.	Russia	5.44%	direct	not	5.44%	direct	not
				consolidated			consolidated
MEDHA DAKO-CZ	India	49.95%	direct	full	49.95%	direct	full
PRIVATE LIMITED
MEFITIS TRADE a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
MERIT SPV a.s.	Czech	92.50%	direct	full	92.50%	direct	full
	Republic
Milconn, a.s.	Czech	50.00%	direct	full	50.00%	direct	equity
	Republic
MSM - OPTICAL	Slovakia	80.20%	direct	full	81.00%	direct	not
s.r.o.							consolidated
MSM EXPORT, s.r.o.	Slovakia	80.20%	direct	full	81.00%	direct	full
MSM GREECE Ltd.	Slovakia	80.20%	direct	full
MSM GROUP	Kazakhstan	40.50%	direct	not	40.50%	direct	not
KAZAKHSTAN LLP				consolidated			consolidated
MSM Group North	USA	80.20%	indirect	not
America Inc.				consolidated
MSM GROUP s.r.o.	Slovakia	80.20%	direct	full	81.00%	direct	full
MSM LAND	Slovakia	89.00%	direct	full	89.10%	direct	full
SYSTEMS s.r.o.
MSM Martin, s.r.o.	Slovakia	80.20%	direct	full	81.00%	direct	full

Czechoslovak Group

Annual Report 2024

300

			December 31, 2024				December 31, 2023
	Country of		Ownership	Consolidation	Effective	Ownership	Consolidation
Entity	registration	Effective ownership percentage	interest**	method*	ownership	interest**	method*
MSM North America	USA	80.20%		not	percentage
Holdings LLC			indirect	consolidated
MSM Services, s.r.o.	Slovakia	80.20%	direct	full	81.00%	direct	full
MSM SPV I, s. r. o.	Slovakia	80.20%	indirect	full
MSM SPV II, s. r. o	Slovakia	80.20%	indirect	full
MSM SPV III, s. r. o.	Slovakia	80.20%	indirect	full
MSM SPV IV, s. r. o.	Slovakia	80.20%	indirect	full
MSM SPV V, s. r. o.	Slovakia	80.20%	indirect	full
NC Bomlitz GmbH	Germany	80.20%	indirect	not
				consolidated
NIKA Development	Czech	89.90%	direct	full	83.63%	direct	full
a.s.	Republic
Perazzi USA, Inc.	USA	80.00%	direct	full	80.00%	direct	full
PLATINUM DEFENCE	Czech	89.00%	direct	full
a.s.	Republic
POCKET VIRTUALITY	Czech	69.99%	direct	full	70.00%	direct	full
a.s.	Republic
PPS VEHICLES, s.r.o.	Slovakia	72.18%	direct	full	72.90%	direct	full
Prague Fertility	Czech	59.88%	direct	full	59.88%	direct	full
Centre s.r.o.	Republic
Presto Tech Horizons	Czech	50.00%	indirect	not
a.s.	Republic			consolidated
PROGRESS SPV a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
PTH Services s.r.o.	Czech	50.00%	indirect	not
	Republic			consolidated
RADIATIK a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
Real Info d.o.o.	Serbia	100.00%	direct	full	100.00%	direct	full
Kruševac
REAL TRADE PRAHA	Czech	80.99%	direct	full	81.90%	direct	full
a.s.	Republic
REALID SPV a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
ReDat Recording, a.s.	Czech	90.00%	direct	full	90.00%	direct	not
	Republic						consolidated
Regionální muzeum v	Czech	0.00%	direct	not		direct	not
Kopřivnici, o.p.s.	Republic			consolidated			consolidated
Remington Licensing	USA	50.00%	indirect	full
Corporation
RETIA, a.s.	Czech	90.00%	direct	full	90.00%	direct	full
	Republic
SBS ZVS, s.r.o.	Slovakia	40.10%	indirect	full	40.50%	indirect	full
SHER Technologies	Czech	51.00%	direct	full	51.00%	direct	full
a.s.	Republic
Slovak Aviation	Slovakia	80.20%	direct	full	81.00%	direct	full
Factory s.r.o.
Slovak industry s.r.o.	Slovakia	80.20%	direct	full	81.00%	direct	full
Sondany s.r.o.	Czech	59.88%	direct	full	59.88%	direct	full
	Republic
Space T a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
STA TECHNOLOGY, s.r.o.	Slovakia	40.10%	direct	full	40.50%	direct	full
STALUNA TRADE a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
TABLON SPV a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
Target Products 1978	New	20.00%	direct	equity	20.00%	direct	equity
Ltd.	Zealand
TATRA a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
TATRA AVIATION a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
TATRA CLASSIC	Czech	54.36%	direct	not	54.36%	direct	not
s.r.o.	Republic			consolidated			consolidated
TATRA DEFENCE	Czech	80.10%	direct	full	80.19%	direct	full
PROJECTS s.r.o.	Republic
TATRA DEFENCE	Slovakia	74.02%	direct	full	74.73%	direct	full
SLOVAKIA s.r.o.
TATRA DEFENCE	Czech	80.10%	direct	full	80.19%	direct	full
SYSTEMS s.r.o.	Republic
TATRA DEFENCE	Czech	80.10%	direct	full	80.19%	direct	full
VEHICLE a.s.	Republic
TATRA EURASIA	Kazakhstan	19.57%	direct	not	19.57%	direct	not
t.o.o.				consolidated			consolidated
TATRA EXPORT s.r.o.	Czech	54.36%	direct	equity	54.36%	direct	equity
	Republic
TATRA MACHINERY	Czech	54.36%	direct	not	54.36%	direct	not
s.r.o.	Republic			consolidated			consolidated

Czechoslovak Group

Annual Report 2024

301

			December 31, 2024				December 31, 2023
	Country of		Ownership	Consolidation	Effective	Ownership	Consolidation
Entity	registration	Effective ownership percentage	interest**	method*	ownership	interest**	method*
					percentage
TATRA	Czech	100.00%	direct	full	100.00%	direct	full
MANUFACTURE a.s.	Republic
TATRA METALURGIE	Czech	54.36%	direct	equity	54.36%	direct	equity
a.s.	Republic
TATRA Slovensko	Slovakia	54.36%	direct	not	54.36%	direct	not
spol. s .r.o.				consolidated			consolidated
TATRA TRUCK GULF	United Arab			not			not
COMMERCIAL	Emirates	26.64%	direct	consolidated	26.64%	direct	consolidated
BROKERS L.L.C.
TATRA TRUCK INDIA	India	48.92%	direct	not	48.92%	direct	not
PRIVATE LIMITED				consolidated			consolidated
TATRA TRUCKS a.s.	Czech	54.36%	direct	equity	54.36%	direct	equity
	Republic
TATRA VOSTOK,	Russia	54.36%	direct	not	54.36%	direct	not
OOO				consolidated			consolidated
TATRABRAS LTDA	Brasil	54.36%	direct	not	54.36%	direct	not
				consolidated			consolidated
TECHNOLOGY CS	Czech	100.00%	direct	full	100.00%	direct	full
a.s.	Republic
TECHPARK	Czech	100.00%	direct	full	100.00%	direct	full
Hradubická a.s.	Republic
The Kinetic Group	USA	100.00%	indirect	full
Operations LLC
TRADITION CS a.s.	Czech	92.50%	direct	full	92.50%	direct	full
	Republic
TRUCK MACHINERY	Czech	100.00%	direct	full	100.00%	direct	full
GROUP a.s.	Republic
TRUCK SERVICE	Czech	100.00%	direct	full	100.00%	direct	full
GROUP s.r.o.	Republic
UpVision Defence	Czech	71.23%	direct	full	71.23%	direct	full
s.r.o.	Republic
UpVision s.r.o.	Czech	71.23%	direct	full	71.23%	direct	full
	Republic
VENILIA TRADE a.s.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
Virte, a. s.	Slovakia	80.20%	direct	full	81.00%	direct	full
Vista Commercial
Ammunition	USA	100.00%	indirect	full
Company Inc.
Vista Outdoor Inc.	USA	100.00%	indirect	full
Vista Outdoor Sales	USA	100.00%	indirect	full
LLC
VMT Trade s.r.o.	Slovakia	40.50%	direct	not	40.50%	direct	not
				consolidated			consolidated
VOP Nováky, a.s.	Slovakia	80.20%	direct	full	81.00%	direct	full
VORNEA SPV s.r.o.	Czech	100.00%	direct	full	100.00%	direct	full
	Republic
VÝVOJ Martin, a.s.	Slovakia	80.20%	direct	full	61.56%	direct	equity
ZVS holding, a.s.	Slovakia	40.10%	indirect	full	40.50%	indirect	full
ZVS IMPEX, akciová	Slovakia	80.20%	direct	full	81.00%	direct	full
spoločnosť
ZVS technology, s.r.o.	Slovakia	27.54%	direct	not	27.54%	direct	not
				consolidated			consolidated

*Entities that are not consolidated – these entities are immaterial in the Group’s consolidated financial statements; both on

the individual and aggregate bases.

**Indirect ownership percentage means an ownership percentage controlled by way of the management rather than by

shares. Other types of ownership percentages are referred to as direct.

The list in the table above is structured based on the ownership of entities at different levels in the Group.

37. Legal Disputes

Provisions for legal disputes are disclosed in the Note 29.

MSM Martin s.r.o. (Slovakia)

In 2020, a criminal investigation was initiated in Slovakia against MSM Martin, s.r.o. and Mr. Marián Goga (a

former shareholder and executive director of MSM Martin). Both MSM Martin and Mr. Goga were charged

with alleged criminal offenses of bribery and money laundering in connection with a public procurement

process organized by the Slovak Administration of State Material Reserves related to the purchase of

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recovery vehicles, tanks, and mobile bridges. In December 2020, the charges against MSM Martin and Mr.

Goga were dropped. However, in March 2021, the decision was reversed, and the criminal charges were

reinstated by a higher prosecutorial authority. MSM Martin and Mr. Goga continue to actively cooperate with

Slovak criminal authorities, and the proceedings (under ref. no. PPZ-99/NKA-BA3-2020, originally PPZ-

233/NKA-BA3-2020) remain ongoing. The investigation in this case was completed with the final disclosure

of the investigation file on December 6, 2024, after which the file was transmitted to the prosecutor, who

will decide whether to file an indictment or close the proceedings.

38. Subsequent Events

In the period between December 31, 2024 and the date of preparation of the consolidated annual report,

the following changes to the CSG Group structure occurred:

Changes in the Company´s Management

As of January 13, 2025, Lukáš Andrýsek was removed from the Member of the Board of Directors.

As of February 24, 2025, David Štěpán was removed from the Member of the Board of Directors.

Acquisition of Minority Stake in Fiocchi Munizioni SPA

The Group signed an agreement to acquire a 30% minority stake in Fiocchi Munizioni SPA. The transaction's

closing is subject to regulatory approvals.

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Czechoslovak Group

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SEPARATE FINANCIAL STATEMENTS FOR THE YEAR ENDED

DECEMBER 31, 2024

Company Name: CZECHOSLOVAK GROUP a.s.

Registered Office: U Rustonky 714/1, Karlín, 186 00 Prague 8,

Czech Republic

Legal Status: Joint Stock Company

Corporate ID: 034 72 302

Components of the Financial Statements:

Statement of Comprehensive Income

Statement of Financial Position

Statement of Changes in Equity

Statement of Cash Flows

Notes to Financial Statements

These financial statements were prepared on April 2, 2025.

Statutory body of the reporting entity:

Signature

David Chour

Vice-Chairman of the Board of Directors

Zdeněk Jurák

Member of the Board of Directors

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Table of contents

STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME 307

STATEMENT OF FINANCIAL POSITION 308

STATEMENT OF CHANGES IN EQUITY 309

STATEMENT OF CASH FLOWS 310

Notes to Financial Statements 311

1. Description of The Company 311

2. Basis of Preparation of the Financial Statements 313

3. SIGNIFICANT ACCOUNTING POLICIES 315

4. FAIR VALUE MEASUREMENT 315

5. Revenues, Purchases And Consumables 316

6. Employee Benefits Costs 316

7. External Costs 316

8. Other Operating Income 316

9. Other Operating Expenses 316

10. Financial Income And Expenses 317

11. Profit / Loss From The Sale Of Investments 317

12. Income Tax 318

13. Investments In Entities 319

14. Loans and Other Financial Assets 322

15. Derivatives 323

16. TRADE AND OTHER RECEIVABLES AND OTHER ASSETS 324

17. Inventory 325

18. Tax Receivables and Payables 325

19. Cash and Cash Equivalents 325

20. EQUITY 325

21. Loans and Borrowings – Received 326

22. TRADE AND OTHER PAYABLES 328

23. PROVISIONS 329

24. DEFERRED TAX ASSETS AND LIABILITIES 329

25. Fair Value of Financial Instrument 330

26. Leases 330

27. Provided Guarantees 330

28. Pledged Assets 331

29. Risk Management and Disclosure Methods 331

30. RELATED PARTIES 342

31. LEGAL DISPUTES 342

32. SUBSEQUENT EVENTS 342

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Czechoslovak Group

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307

STATEMENT OF PROFIT OR LOSS AND OTHER

COMPREHENSIVE INCOME

For the year ended December 31, 2024

In EUR thousand (EUR ‘000)

Note

Year ended Dec 31, 2024

Year ended Dec 31, 2023

Revenues

—

Raw material and consumables

—

External costs

(7,538)

(12,379)

Other operating income

250

Other operating expense

(1,741)

(3,313)

Profit (loss) from operating activities

(9,227)

(15,394)

—

Financial income

149,977

37,739

Financial expense

(136,195)

(63,642)

Profit from other financial instruments

(1,981)

7,111

Profit (loss) from financing activities

11,801

(18,792)

—

Profit (loss) before tax

2,574

(34,186)

—

Income tax

(668)

(101)

Net profit (loss) from continuing operations

1,906

(34,287)

—

Other comprehensive income

—

Remeasurement of derivatives

(964)

(3,031)

Revaluation in other comprehensive income

(89)

Foreign currency translation differences from

presentation currency

(2,893)

(3,834)

Other comprehensive income, net

(3,821)

(6,954)

Total comprehensive income (loss)

(1,915)

(41,241)

The Notes to Financial Statements form an inseparable part of these financial statements.

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308

STATEMENT OF FINANCIAL POSITION

As of December 31, 2024

In EUR thousand (EUR ‘000)

Note

December 31, 2024

December 31, 2023

Assets

Non – current assets

Investments in subsidiaries

1,251,803

378,361

Investments in associates

Loans and other financial assets

166,691

169,961

Trade and other receivables

—

812

Deferred tax asset

441

Total non-current assets

1,418,999

549,270

Current assets

Inventory

—

Trade and other receivables

93,956

38,065

Loans and other financial assets

1,707,885

129,799

Tax receivables arising from the current income

tax payable

916

1,237

Cash and cash equivalents

110,448

96,540

Total current assets

1,913,205

265,641

Total assets

3,332,204

814,911

Equity

Share capital

78,427

Other reserves

200,200

30,955

Gains or losses from the remeasurment of

derivatives

411

1,375

Retained earnings, current period profit/loss

34,355

32,449

Translation reserve

12,091

14,984

Total equity

325,484

158,190

Liabilities

Non-current liabilities

Loans and borrowings

1,128,000

105,022

Financial instruments and financial payables

9,796

4,288

Provisions

—

3,166

Bonds

21c

1,000,830

278,073

Total non-current liabilities

2,138,626

390,549

Current liability

Loans and borrowings

725,461

134,534

Financial instruments and financial payables

1,051

2,779

Trade and other payables

136,717

69,487

Tax payables arising from the current income tax

payable

—

Bonds

21c

4,865

59,372

Total current liabilities

868,094

266,172

Total liabilities

3,006,720

656,721

Total equity and liabilities

3,332,204

814,911

The Notes to Financial Statements form an inseparable part of these financial statements

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309

STATEMENT OF CHANGES IN EQUITY

For the year ended December 31, 2024

Attributable to the shareholders of the Company

In EUR thousand (EUR ‘000)

Note

Share capital

Other

reserves

Gains

or losses

from the

revaluation of

derivatives

Retained

earnings

Foreign

exchange

translation

reserve

Total

Balance at January 1, 2023

78,427

31,044

4,406

66,736

18,818

199,431

Total comprehensive income for the year:

Profit for the year

—

(34,287)

—

(34,287

Other comprehensive income:

Revaluation – other comprehensive income

—

(89)

—

(89)

Revaluation of derivatives

—

(3,031)

—

(3,031)

Foreign exchange differences on change in presentation currency

—

(3,834)

Total comprehensive income for the year

—

(89)

(3,031)

(34,287)

(3,834)

(41,241)

Transactions with shareholders and MI

—

Total transactions with shareholders

—

(89)

(3,031)

(34,287)

(3,834)

(41,241)

Balance at December 31, 2023

78,427

30,955

1,375

32,449

14,984

158,190

Total comprehensive income for the year

Profit for the year

—

1,906

—

1,906

Other comprehensive income:

—

Revaluation – other comprehensive income

—

Revaluation of derivatives

—

(964)

—

(964)

Foreign exchange differences on change in presentation currency

—

(2,893)

Total comprehensive income for the year

—

(964)

1,906

(2,893)

(1,915)

Transactions with shareholders and MI

—

169,209

—

169,209

Total transactions with shareholders

169,245

(964)

1,906

(2,893)

167,294

Balance at December 31, 2024

78,427

200,200

411

34,355

12,091

325,484

The Notes to Financial Statements form an inseparable part of these financial statements

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310

STATEMENT OF CASH FLOWS

For the year ended December 31, 2024

In EUR thousand (EUR ‘000)

Note

For the year

ended

December 31,

2024

For the year

ended December

31, 2023

CASH FLOWS FROM OPERATING ACTIVITIES

Profit for the period

1,906

(34,287)

Adjustments for:

Profit (-) /loss (+) from the sale of investments

1,981

(7,111)

Net interest income (-) / expense (+)

44,501

29,914

Recognition (+) / release (-) of allowances and provisions

162

(2,462)

Recognition (+) / release (-) of allowances for investments in

entities

21,657

10,205

Dividend income

(70,119)

(12,258)

Income tax

668

101

Exchange rate gains (-) / losses (+)

(9,936)

(412)

Other

(25)

Release of costs of bond issues and financing

2,242

704

Increase (-) / decrease (+) of receivables and payables from

derivative financial instruments

9,610

13,327

Operating cash flows before movements in working capital

2,697

(2,304)

Increase (-) / decrease (+) in trade receivables and other assets

(55,832)

(30,295)

Increase (-) / decrease (+) in inventory (including income from sale)

—

Increase (+) / decrease (-) in trade and other payables

23,492

59,612

Cash generated by operations

(29,643)

27,013

Income taxes paid

(609)

(2,298)

Net cash from operating activities

(30,252)

27,715

CASH FLOWS FROM INVESTING ACTIVITIES

Acquisition of investments in subsidiaries

(912,813)

(40,824)

Acquisition of investments in associates

—

Income from the sale of investments

6,552

13,426

Dividends received

67,016

11,935

Provided loans

(1,977,576

(359,230)

Repayment of provided loans

417,074

346,066

Interest received

30,991

6,636

Other investments

(21,435)

(32,212)

Net cash (used in)/from investing activities

(2,390,191)

(54,203)

CASH FLOWS FROM FINANCING ACTIVITIES

Proceeds from borrowings

4,250,996

905,433

Repayments of borrowings

(2,605,550)

(941,434)

Proceeds from bond placements

770,746

197,979

Costs related to bond placements and financing

(88,698)

(2,327)

Repayment of bonds

(51,663)

(30,399)

Interest paid

(55,724)

(35,611)

Other contribution to equity

214,244

—

Net cash (used in)/from financing activities

2,434,351

93,641

Net increase/decrease in cash and cash equivalents

13,908

64,153

Cash and cash equivalents at beginning of year

96,540

32,387

Cash and cash equivalents at end of period

110,448

96,540

The Notes to Financial Statements form an inseparable part of these financial statements

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311

Notes to Financial Statements

1. Description of The Company

CZECHOSLOVAK GROUP a.s. (the “Company” or “CSG”) is a joint stock company formed in compliance with

the legal regulations of the Czech Republic on October 13, 2014. Its registered office is located at U

Rustonky 714/1, Karlín, 186 00 Prague 8, Czech Republic. he Company changed its name from EXCALIBUR

GROUP a.s. to CZECHOSLOVAK GROUP a.s, and the change was adopted and recorded in the Czech

As of January 1, 2015, CZECHOSLOVAK GROUP a.s. merged with EXCALIBUR ARMY CZ a.s. and

EXCALIBUR INDUSTRY a.s., the successor company being CZECHOSLOVAK GROUP a.s.

As of January 1, 2016, CZECHOSLOVAK GROUP a.s. merged with LOGEKO a.s., the successor company

being CZECHOSLOVAK GROUP a.s.

As a result of a cross-border merger by amalgamation, the net assets of Czechoslovak Group B.V., as the

dissolving company, were transferred to CZECHOSLOVAK GROUP a.s., as the successor company. The

effective date of the cross-border merger by amalgamation is January 1, 2020. This fact was recorded in

the Register of Companies on August 31, 2020.

As of December 31, 2024, the Company’s sole shareholder was CSG FIN a.s., which, as the sole

shareholder, acted as the Company’s ultimate authority from June 28, 2022. Prior to that, Michal Strnad

acted as the ultimate authority from January 1, 2022 to June 27, 2022.

The financial statements of the Company were prepared for the years ended December 31, 2024 and

December 31, 2023. These financial statements are unconsolidated separate financial statements.

The Company’s principal activities include production, trade and services not listed in Appendices 1–3 to the

Trade Licencing Act, in the scope of the following areas:

— Mediation of trade and services;

— Wholesale and retail;

— Providing of software, information technology consulting, data processing, hosting and related activities

and web portals;

— Purchase, sale, management and maintenance of real estate;

— Rental and lending of movable property;

— Advisory and consulting services, preparation of expert studies and reports;

— Advertising, marketing, media representation;

— Administrative management services and services of an organisational and economic nature;

— Providing of technical services.

As of December 31, 2024, the Company’s sole shareholder was as follows:

December 31, 2024

Shares Ownership percentage

Voting rights

EUR ‘000

CSG FIN a.s., Corporate ID:

141 41 442

78,427

100

Total shares

78,427

100

Composition of the Board of Directors as of December 31, 2024:

— Michal Strnad (Chairman of the Board of Directors)

— David Chour (Vice-Chairman of the Board of Directors)

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312

— Ladislav Štorek (Vice-Chairman of the Board of Directors)

— Petr Formánek (Member of the Board of Directors)

— David Štěpán (Member of the Board of Directors)

— Zdeněk Jurák (Member of the Board of Directors)

— Lukáš Andrýsek (Member of the Board of Directors)

Composition of the Supervisory Board as of December 31, 2024:

— Michaela Katolická (Charmain of the Supervisory Board)

— Rudolf Bureš (Member of the Supervisory Board)

— Aleš Klepek (Member of the Supervisory Board)

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313

2. Basis of Preparation of the Financial Statements

C. Statement of Compliance

The financial statements were authorised for issue by the Board of Directors on April 2, 2025.

The financial statements have been prepared in accordance with International Financial Reporting Standards

(IFRS Accounting Standards) adopted by the European Union.

Furthermore, the financial statements have been drawn up on a going concern basis and using the

conventional historical cost basis, except for in the event the measurement of financial assets and liabilities

that required the application of the of fair value criterion.

The financial statements are presented in euro (“EUR”), which has been the presentation currency set by the

CSG Group since January 1, 2021. The Company’s functional currency is the Czech crown (“CZK”). All

amounts included in this document are presented in thousands of euros, unless otherwise indicated. The

reason for the presentation currency is that EUR suits the needs of the primary users of the financial

statements better than CZK.

The financial statements are prepared using consistent accounting policies over the whole period covered

by the financial statements (i.e. both the current and comparative periods). These accounting policies are in

line with the IFRS applicable at the end of the reporting period i.e., December 31, 2024.

D. Measurement Method

These financial statements were prepared under the going concern assumption.

These financial statements were prepared under the historical cost (amortised cost) convention, with the

exception of the following material statement of financialposition items, which are carried at fair value:

— Derivative financial instruments.

— Other securities and investments

E. Functional and Presentation Currencies

The statements are presented in euro (“EUR”). The functional currency of the Company is the Czech crown

(“CZK“). All financial information presented in EUR is rounded to the nearest thousand, unless stated

otherwise.

F. Use of Estimates and Judgement

Information on the estimates and critical judgement used in applying accounting policies that have the most

significant effect on the balances reported in the financial statements are disclosed in the following Notes:

— Note 4 (a), (b), (c) – Measurement of financial instruments

— Note 31 – Legal disputes

G. Adoption of new and revised IFRS accounting standards and change in

accounting policy

The presentation currency of EUR has been adopted to suit the needs of the primary users of the financial

statements.

H. New and amended IFRS Accounting Standards that are effective for the

current year

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