nexans hellas s.a. · registration no 2176/06/b/86/06 – vat no el 094039860 general commercial...

Nexans Hellas / 2016 Annual Report

NEXANS HELLAS S.A. 2016 Annual Report & Corporate Social Responsibility

Nexans Hellas / 2016 Annual Report

Contents

Board of Directors - Auditors 2

Chairman’s Message 4

A word from the Managing Director 6

Presentation of our company and its activities 7

Exports of our company 12

Financial Data 13

Invitation to the Ordinary General Assembly of the Shareholders

14

Main points of Report of the Board of Directors 18

Declaration of Corporate governance 45

Financial statements 2016 50

Auditor’s Report 54

Notes to the Financial Statements 2016 55

Nexans Code of Ethics & Business conduct 56

Corporate Social Responsibility 59

Solidarity & Sponshorship 65

Nexans Hellas S.A. Registered Office Athens: 15, Messoghion Avenue, GR-11526 Athens Registration No 2176/06/B/86/06 – VAT No EL 094039860 General Commercial Registration No 000282101000 Lamia Plant: Aghia Marina, 35300 Stylida, Fthiotis Tel.: +30 211 120 7880 • Fax: +30 211 120 7899 Commercial Department: 21, Bichaki Street, 18233 Aghios Ioannis Rentis, Attica Tel.: +30 211 120 7710 • Fax: +30 211 120 7799

www.nexans.gr e-mail: [email protected]

Board of Directors : Patrick NOONAN Chairman of the BoD Stephane ILIADES Vice-Chairman of the BoD & Managing Director Kamil BEFFA Non Executive member George CHRYSSOMALLIS Independent Non Executive member Henrik DESFONTAINES Non Executive member

Ioannis TRIKARDOS Independent Non Executive member

Auditors : Dimitris Sourbis Certified Auditor, PWC

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3 - Nexans Hellas / 2016 Annual Report

2016 has been one more unpredictable and

unstable year, in terms of macroeconomic

conditions with the unending discussions

between Greece and its creditors and

continuance of the imposition of capital controls.

Operating in the above context, the company

with the support of the Nexans Group has not

only managed to deal with the situation but has

also achieved positive results that were improved

in relation to the previous year. A significant

contribution to this result was the successful

completion of the share capital increase which

resulted in doubling the equity of the company,

fully repaying the loan liabilities and significantly

reducing the financial costs. The succesfull

capital increase has strengthened the company’s

balance sheet, making it more resilient in an

uncertain macroeconomic environment.

The business activity of Nexans Hellas during

2016 was slightly increased compared to 2015.

Sales in general domestic market, excluding

sales to Public Utilities, were slightly decreased

due to the overall protracted recession in Greece

and in particular due to the lack of investments

in the private construction sector.

Company sales to the Greek Power Utility stayed

at a good level while sales to OTE were conside‐

rably higher in relation to the previous year since

the company was awarded many tenders and

increased its product range in that sector.

Company sales to other Group companies

increased significantly. In the above context, in

2016 our company managed to obtain

certification for the German market. This fact

opens up for our company a potential 30 million

euro additional sales. Indeed, Nexans company

in Germany which operates in both medium and

high voltage sector, wishes to focus more on

high voltage. This will enable us to start

supplying some customers in Germany with

cables manufactured by Nexans Hellas. Despite

some investments made in 2016 to optimise the

production capacity of the plant, this is not

enough in order to meet the needs of the large

German market which can turn out to be very

important for the company in the future. This is

why, as already decided, we are at the stage of

constructing a new medium-voltage line in our

plant. The total investment amounts to

approximately €1.5 million for the equipment

and €1.5 million for premises, transportation

and set-up expenses, etc.

Exports beyond intra-group sales were

decreased due to the prolonged political turmoil

experienced by the company’s traditional

markets in Africa.

Also a significant factor to the improved

financial performance are the specific actions

taken, originating from the company’s

participation in the transformation programme.

Chairman’s Message Patrick Noonan, Chairman of the Board of Directors

4

5 - Nexans Hellas / 2016 Annual Report

The continuous actions of the company to improve its industrial excellence have resulted in further improvement of the plant performance in all areas of the manufacturing process but also in the protection of the environment. These improvements, combined with a plant work environment which is modern and high quality in terms of health and safety conditions, led the Group to the selection of the company’s plant as a supplier to other Group companies.

The modernized plant in Lamia, the efficiency of its commercial, financial and technical services and also the continuous renewal of its human resources, are key advantages for the company in order to achieve its goals. The company has utilized and absorbed the ‘know-how’ provided by Nexans Group which has already been successfully applied in the plant. This know-how relates to introducing new more efficient production methods, reducing disposable materials and energy consumption and introduction of organizational methods that allow more efficient use of human resources.

We strongly believe that the most important factor of success is our people. Providing continuous training and development of their potential in a context of strong values, creates a combination that brings significant benefits to our customers, associates and shareholders.

I take the opportunity to share with you the vision and priorities we have defined for our company, Nexans Hellas S.A.

1. Our vision: to be the most engaged and cost competitive unit of Nexans in Europe.

This vision is supported by the following:

- "most engaged" refers to the commitment of our people, as shown in the regular employee surveys and forums we conduct within our company.

- "cost competitive" refers to our commitment on productivity, using our Greek production unit.

- "Nexans unit" refers to us being part of the Nexans Group, giving us the opportunities and advantages of being part of a global network.

- "in Europe" refers to Greece being part of Europe, giving us an edge in a world facing more and more uncertainties.

2. Our priorities, as defined by our 4 P's , that will guide our actions and strategy:

- People: provide a safe and motivating working environment for all our people.

- Plant: continuously improve the productivity and protect the cost advantage of our Greek unit.

- Partners: be totally dedicated to our customers, which are the base of our business.

- Progress: continuous improvement for our people and our results to become better in all fields.

All of us at Nexans Hellas are aligned and committed to achieve our vision and build on our priorities.

6

A word from Stephane Iliades, Managing Director

7 – Nexans Hellas / 2016 Annual Report & CSR

Presentation of our company and its activities

223 EMPLOYEES

75.98 ΜILLION EUROS IN SALES(1)

WORLDWIDE SALES PRESENCE

Both economic development and quality of life are dependent on access to energy and information, building and infrastructure safety, and the movement of goods and people.

As a global player in the cable industry, Nexans Group helps meet these vital needs thanks to equipment that transports and relays the electricity and data we need in our daily lives and our societies safely, efficiently and sustainably.

We help our customers meet the challenges they face in the fields of energy resources, energy infrastructure, transport, buildings, telecommunications and data centers. We leverage our expertise and capacity for innovation to provide solutions for the most complex cable applications in the most demanding environments.

Nexans Hellas is listed on the Athens Stock Exchange.

As a member of the United Nations Global Compact, Nexans is committed to supporting and implementing ten universally-accepted principles in the areas of human rights, labor, the environment and anti-corruption.

(1) At current metal prices.

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Businesses and markets Population growth, urbanization, industrialization in emerging markets, mobility of people and goods, the transition to cleaner energy, digital transformation and massively increasing volumes of data transmission are all generating considerable needs for energy, infrastructure, transport and buildings. These factors are driving long-term demand for energy and data cables. As a global player in the cable market, Nexans’ operations are focused on four main end-markets.

Four growth markets essential for development

ENERGY AND DATA INFRASTRUCTURE

High-, medium- and low-voltage submarine, underground and overhead electricity transmission and distribution networks

Land-based and submarine telecommunications networks, using copper and optical fiber cables

TRANSPORT

Automotive

Aeronautical and spatial

Shipbuilding

Rolling stock and railway networks

Airports, railway stations and ports

ENERGY RESOURCES

On- and off-shore wind farms, solar power

On- and off-shore oil and gas

Thermal and nuclear power plants

Mining

BUILDINGS

Industrial, logistics, tertiary and commercial buildings

Community facilities

Housing

Data centers


Corporate mission and Strategy Nexans is pursuing its transformation as part of the Nexans in Motion plan, which aims to build a stronger Group and take fuller advantage of opportunities to serve its customers in its four major markets. The plan has three strategic focuses.

Regaining competitiveness: by optimizing fixed and variable costs and working capital, and improving productivity and operating efficiency.

Strengthening our market leadership: by becoming the cable industry’s benchmark in its four end markets; improving margins through pricing policy and product mix, expanding and enhancing our product and service offerings beyond the supplying of cables, by drawing on our innovation and technology (R&D) capabilities.

Pro-actively managing our portfolio: by favoring targeted investments to accelerate growth in very profitable and high-potential businesses and transforming or selling lower-performing businesses with limited potential.

REGAINING OUR COMPETITIVENESS

Operating efficiency Nexans’ manufacturing performance program, dubbed Nexans Excellence Way, aims for continuous, long-term improvements in Nexans’ end-to-end processes, from product development and production to administrative and sales activities.

Nexans Excellence Way works on a human scale by involving all Group teams. Its key components include standardizing best practices, inventing innovative and efficient ways of working, and systematically identifying and eliminating unnecessary steps. Combined with lean management, it places strong emphasis on visual management, transparency, responsiveness and structured problem solving to eliminate root causes. The program’s objective is to achieve excellence in terms of safety, quality, delivery lead times and costs, while creating a pleasant working environment. Following successful implementation in Nexans’ plants, it is now being extended Group-wide.

Competitiveness plan

Nexans is implementing its competitiveness plan focused on eight areas covering the entire value chain: redesign- to-cost, streamlined product references, make-or-buy decisions, optimized purchasing, better payment terms, lower working capital requirement, improved supply chain flows and reduced investment costs.

Each manufacturing site draws up a specific competitiveness plan every year based on the

main areas defined at Group level and aimed at achieving efficiency gains specific to the site concerned.

In the majority of its units, redesign-to-cost projects have been put in place in order to reduce production costs. The main projects concern optimizing and standardizing the design and production processes for copper and aluminum conductors, which represent over half the cost of cables, and for rubber and PVC composites which are used for insulation.

We are also streamlining our product portfolios. By having the number of their product references and concentrating on products that are profitable and have a high turnover rate, several plants have removed bottlenecks, reduced their inventories and working capital requirement, and improved their sales, delivery lead times and results.

An effective purchasing policy is key to the Group’s technical and financial performance. Supplier deliveries of copper and aluminum and physical flows between plants are calibrated and paced in order to lighten working capital requirement. Purchasers identify the most competitive countries by product family and approve new suppliers. At the same time, further to production cost analyses that have been carried out, the manufacturing of certain insulating compounds has been brought back into plants.

In addition, in Europe a plan announced in mid-2015 to streamline the Group’s support fun-ctions and reduce capacity for medium-voltage cables was rolled out at the beginning of 2016.

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STRENGTHENING OUR MARKET LEADERSHIP

Technologies

At Nexans we pursue a pro-active innovation policy aimed at creating more value for customers, anticipating changes in industry standards, and proposing long-lasting solutions to safety, energy efficiency and environmental imperatives. We also continually work to strengthen our leadership in the technologies of the future such as superconducting cables, composite core cables, power line carrier (PLC) technology, smart grids, solutions for ultra-fast data transmission technologies, and submarine high-voltage cables.

Nexans’ research and development expenditure and resources are among the highest in the world in its industry and the number of patents we file each year and the world records we hold demonstrate the success of our R&D activities and pro-active innovation policy.

Sales excellence and customer satisfaction

Nexans serves very different customers – network operators, energy producers, mining companies, equipment manufacturers, infrastructure builders, construction companies, installers, distributors and engineering firms – which have diverse needs in a range of different countries. We constantly aim to meet all of our customers’ requirements, at all levels and in all areas, and strive to embed customer satisfaction into our underlying corporate culture.

To achieve these objectives we use a Group-wide customer relationship management system, as well as shared standards and performance indicators. Standardized satisfaction surveys are used as the basis for improvement plans and we continuously adapt our resources and organizational structures to strengthen our customer relationships and increase responsiveness. Two other customer-centric measures we have taken are decentralizing our marketing actions and aligning our supply chains with customer requirements.

Working closely with major customers, Nexans’ managers who handle international and regional key accounts seek to understand the challenges our customers face to meet their needs today and anticipate the needs they will have tomorrow. All of Nexans’ functions play a role in the overall

customer-oriented approach, which is aimed at building up long-lasting and mutually beneficial relationships.

For example, handling tenders and managing major projects for customers in the energy, mining, railway, port and airport sectors requires coordinated multi-product, multi-site offerings. They are overseen by specialized teams who can mobilize all the Group’s resources to provide the most suitable industrial and logistics solutions.

From products to solutions

Nexans has comprehensive offerings for each market segment

– including cable connection accessories – as well as a range of services aimed at facilitating the daily lives of our customers and fostering partnerships with them. These services – which we constantly enrich – include grouped and paced deliveries, inventory management, custom cable lengths, ready-to-install cable and harness sets, advanced specification models, design and engineering solutions, turnkey power lines for network operators, training, maintenance, repair and management of cable life cycles.

It provides digital solutions accessible on a computer, tablet and mobile phone, which facilitate its customers’ work and gives them access to all cataloged information on the offering and to the installation guides.

PRO-ACTIVELY MANAGING OUR PORTFOLIO

Attractive markets

The Group targets markets with a strong growth outlook and in which it can leverage its technological know-how and service offerings, namely submarine applications, renewable energies, energy infrastructure (land-based medium- and high-voltage cables) in growth countries and countries making the transition to cleaner energy, transportation networks, electric mobility and data exchange.

As part of our drive to enhance our ability to serve countries and regions with growth markets, we have developed local production capacity in those areas, including new capacity in China for (i) very high-voltage submarine cables, (ii) cables for industrial applications in the resources and transport markets in China, and (iii) automotive harnesses in China.

12

2016 Exports of our Company

Europe : United Kingdom, Germany, Switzerland, Cyprus, France, Poland, Italy, Sweden, F.Y.R.O.M., Spain, Romania, Malta, Netherlands, Belgium, Croatia

Middle East, Russia, Africa : Libya, Turkey, South Africa, United Arab Emirates, Tanzania, Israel, Bahrain, Kenya, Morocco, Iraq

Asia-Pacific : Marshal islands

Financial activity of our company in numbers:

The amounts are in thousand EUR

Financial Activity for 2016

Turnover 75,982

Net profit after taxes 1,376

Number of employees 223

Investments 1,338

Taxes, contributions to social security funds 7,935

Fees and benefits to employees 4,968

Expenses to local suppliers 1,826

Financial Data SALES / RESULTS (EUR Million) SALES (EUR Million)

COMPANY BALANCE SHEET (EUR Million)

4138 39

34 33

37

2014 2015 2016

Domestic sales Exports Result before taxes

2016 2015

Sales 76.0 71.8

Profit / (Loss) from Operations 2.2 0.3

Net Income / (Loss) before tax 1.7 (0.9)% sales 2.2% (1.3%)

Net Income / (Loss) after tax 1.4 (0.7)% sales 1.8% (1.0%)

2016 2015

Assets

Fixed Assets (Gross) 51.9 49.6Depreciation (34.3) (33.0)

Fixed Assets (Net) 18.6 17.8Current Assets 36.5 34.3

Total Assets 55.1 52.1

Liabilities

Share Capital 28.7 7.7Reserves 15.9 16.5Retained earnings (3.0) (3.7)

Total Equity 41.6 20.5Provisions 2.9 2.0Current Liabilities 10.5 29.6

Total Equity & Liabilities 55.1 52.1


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NEXANS HELLAS S.A. Registration No. 2176/06/B/86/06

Following the decisions of the Board of Directors, dated 18.5.2017 and 31.5.2017, and in accor‐dance with the company’s Articles of Association and the Codified Law 2190/1920 as currently in force, the shareholders of “NEXANS HELLAS Industrial Société Anonyme” are invited to the Ordinary General Assembly which will take place on Thursday, June 15, 2017, at 10:00 a.m. at the Hotel «Holiday Inn Athens», 40,2 km of Attica Avenue, Peania Attica, for discussing and taking decisions on the following items (out of which the one numbered 9 was added following request of a minority shareholder, representing more than the 1/20 of the company’s paid-up share capital, in accordance with article 39 of L. 2190/1920)):

Agenda of the meeting

1. Submission and hearing of the reports of the Board of Directors and of the Auditor concerning the Annual Financial Report of the period 01.01.2016 to 31.12.2016.

2. Approval of the Annual Financial Report of the period 01.01.2016 to 31.12.2016 and of the Auditor’s report.

3. Release of the members of the Board of Directors and of the Auditor from any liability for compensation in connection with the Annual Financial Report and the administration and management in general of the period 01.01.2016 to 31.12.2016.

4. Election of Auditors (regular/alternate) for the period 01.01.2017 to 31.12.2017 and fixing of their fee.

5. Approval of the remuneration and expenses paid to members of the Board of Directors and fixing of the relevant future remuneration and expenses.

6. Approval, in accordance with article 23α of L. 2190/1920 of a contract to be executed between the company and affiliated company.

7. Approval of the election of a new Member of the Board of Directors in replacement of a resigned one.

8. Election of new members of the BoD and of the Audit Committee.

9. Discussion on the letter submitted by the minority shareholder HMG Globetrotter to the Hellenic Capital Market Commission, dated February 24, 2017, regarding the interests paid by Nexans Hellas to Nexans Services - Reading of such letter

As provided for by the Codified Law 2190/1920 as currently in force, the Board of Directors informs the Company shareholders of the following:


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A. PARTICIPATION AND VOTING RIGHT IN THE GENERAL MEETING

Any person appearing as company shareholder in the records of the Dematerialized Securities System (DSS) managed by "Hellenic Exchanges S.A.” (HELEX) on 10 June 2017 (Record Date), namely at the beginning of the 5th day prior to the date of the General Meeting, shall be entitled to take part and vote in the General Meeting to be held on 15 June 2017. The shareholder’s capacity as such on the specific Record Date will be proven by furnishing the relevant written attestation of the above body (HELEX) or, alternatively, through the Company’s direct online connection to the latter’s records. In order that the shareholders are entitled to take part and vote in the General Meeting, the relevant written attestation of HELEX or the electronic certification regarding such shareholder’s capacity should arrive at the Company no later than the 12th of June 2017, namely until the third day before the General Meeting. Those shareholders who are legal entities should submit the relevant identification documents as provided for in the Law, within the same deadline. Only those persons having the capacity of shareholder on the relevant Record Date are entitled to participate and vote in the General Meeting. If such shareholder has not complied with the provisions of Article 28a of C.L. 2190/20, (s)he will participate in the General Meeting only following the latter’s permission. To exercise the relevant rights does not presuppose that the beneficiary’s shares are blocked or that any other similar procedure applies, which restricts the capacity to sell and transfer them during the period from the Record Date to the General Meeting. Each share entitles to one vote.

B. PROCEDURE FOR THE EXERCISE OF VOTING RIGHTS VIA REPRESENTATIVES

Shareholders participate in the General Meeting and vote either in person or via representatives. Each shareholder may appoint up to three (3) representatives and legal entities – shareholders may appoint up to three (3) natural persons as their representatives. If a shareholder has company shares listed in more than one securities account, such shareholder may appoint different representatives for the shares listed in each securities account. Any representative acting on behalf of more than one shareholders may cast a different vote for each shareholder. The company’s articles of association do not provide for the capacity of shareholders to participate in the General Meeting via electronic means without being physically present at the place it is held or any option of remote voting through electronic means or correspondence or any option to appoint and revoke representatives through electronic means. Authorization forms for the appointment of representatives and forms for revocation of such authorization will be made available to shareholders: a) in printed format at the company's offices (15, Messoghion Avenue, 3rd floor, 115 26, Athens, tel.: 211 120 7770 & fax 211 120 7739) and b) in electronic format on the company’s website (www.nexans.gr). After being filled out and signed, the above forms should be deposited at the aforementioned address (point a) or faxed to 211 120 7739 no later than 12 June 2017, i.e. three (3) days prior to the date of the General Meeting. Beneficiaries should take steps to confirm that the forms of authorization and revocation of authorization have been successfully sent and received by the company by calling the above number 211 120 7770. The representative shall be obliged to notify to the company prior to the beginning of the General Meeting, every specific incident that may be useful for the shareholders to evaluate the risk of having the representative serve of the interests than those



of the represented shareholder. A conflict of interests may arise especially when the representative: a) is a share-holder exercising control over the company or is another legal person or entity controlled by such shareholder; b) is a member on the Board of Directors or generally Company Management or a shareholder exercising control over the company or other legal person or entity controlled by a shareholder exercising control over the company; c) is an employee or chartered auditor of the company or of a shareholder exercising control over the company or other legal person or entity controlled by a share -holder exercising control over the company; d) is spouse or first-degree kin with any of the natural persons set out in cases a-c.

C. MINORITY INTERESTS OF SHAREHOLDERS

(1) Shareholders representing 1/20 of the company’s paid-up share capital may request: a) to have other items added to the agenda of the General Meeting by way of application that must be received by the Board at least fifteen (15) days prior to the General Meeting and should be accompanied by the relevant justification or a draft decision to be approved by the General Meeting; b) to provide shareholders at least six (6) days before the General Meeting with draft decisions regarding items included in the initial or any revised agenda by way of application that must be received by the Board at least seven (7) days before the General Meeting.

(2) On the request of shareholders representing 1/20 of the paid-up share capital, the Board of Directors shall be obliged to inform the General Meeting - if it is ordinary - about the amounts paid over the last two years to each member of the BoD or Company Managers and all benefits given to those persons on

any ground or under any contract between them and the Company.

(3) Shareholders representing 1/5 of the company’s paid-up share capital may request, by way of application submitted to the company at least five (5) full days before the General Meeting that the Board provides the General Meeting with information on the company’s affairs and financial standing.

(4) Any shareholder may request, by way of application submitted to the company at least five (5) full days before the General Meeting, that the Board provides the General Meeting with specific information on corporate affairs to the extent this is useful for the actual assessment of the items on the agenda.

In all the above cases, the applicant shareholders must prove that they are shareholders and the number of shares they hold when exercising their right. The attestation furnished from HELEX or the certification of shareholder’s capacity through the Company’s direct online connection to the records of HELEX shall constitute such proof.

D. AVAILABLE DOCUMENTS AND INFORMATION

This notice, the documents that will be submitted to the General Meeting, draft decisions on the items on the agenda, the forms regarding voting via representatives and their revocation as well as all other information set out in Article 27(3) of C.L. 2190/20 will be available on the company’s website (www.nexans.gr). In addition, all the above documents will be available in printed format at the company’s principal establishment (15, Messoghion Avenue, 3rd floor, 115 26, Athens, tel.: 211 120 7770 & fax 211 120 7739), where shareholders can obtain copies.

Athens, May 31, 2017 THE BOARD OF DIRECTORS

Main points of Report to the Board of Directors

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Main points of the report of the Board of Directors to the Ordinary General Meeting of the Shareholders on the financial statements for the period ended December 31st, 2016

Dec-16% of sales Dec-15

% of sales Change %

Domestic 38,871 51.2% 38,475 53.6% 1.0%

Foreign 37,111 48.8% 33,293 46.4% 11.5%

Total 75,982 100% 71,768 100% 5.9%

Dec-16% of sales Dec-15

% of sales Change %

Domestic 28,209 49.8% 26,992 52.3% 4.5%

Foreign 28,456 50.2% 24,639 47.7% 15.5%

Total 56,665 100% 51,631 100% 9.7%

Turnover at current metal pr ices (amounts in thousand Euros)

Turnover at standard metal pr ices (amounts in thousand Euros)


A) Business activity and financials in 2016

Our company’s business activity during 2016 was slightly increased compared to 2015.

Despite the stagnation in domestic construction activity, the company has managed to record a positive result, considerably improved compared to 2015.

At current metal prices, the sales of the year

amounted to €76 million thus being increased by 5.9% compared to 2015, while if we consider sales at standard metal prices, the increase in sales volume reached 9.7% compared to 2015. In order to smooth out the effect of fluctuations in metal purchase price and present the actual development of sales, especially during periods marked by strong volatility in metal prices, the company adjusts the level of sales by using a fixed price for basic metals, i.e. copper and aluminium.

During 2016, the company delivered a number of orders, the most important of which were the following:

Domestic General Market – electric installation and fiber-optic cables

To Hellenic Electricity Distribution Network Operator S.A. (HEDNO S.A.) – low and medium voltage power cables

To O.T.E. (Greek Telecom) - copper and fiber-optic cables

Foreign markets: European Union, Middle East and Africa.

Sales in general domestic market, excluding sales to Public Utilities, were slightly decreased due to the general protracted recession in Greece and in particular due to the lack of investments in the private construction sector.

Company sales to HEDNO reached high figures while sales to OTE were considerably higher in relation to 2015 since the company was the lowest bidder in many tenders.


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Company sales to other Group companies increased significantly.

Exports beyond intra-group sales were decreased due to the prolonged political turmoil experienced by the company’s traditional markets in Africa.

The prices of raw materials and mainly of basic metals - copper and aluminium - during the year remained at relatively higher levels in relation to 2015.

However, the approach taken by the company to cover the risks arising from the fluctuations in market metal prices, i.e. copper and aluminium, by directly linking the purchase price of these metals with the selling price to customers, ensured to a large extent both the smooth development of corporate sales and the stabilization of profit margins at the target level.

Given the above circumstances, the company managed to record positive results, after taking specific actions originating from its participation in the transformation programme.

Company Management continued to focus its strategic priorities on three pillars:

1. to improve the competitiveness of its products by applying new methods and procedures to production and overall operations,

2. to maintain its share in the markets where it operates, and to manage efficiently its operations,

3. as well as increasing exports in an effort to counterbalance the results in the domestic market.

During 2016, the machinery and building premises of our plant in Lamia (Aghia Marina) performed satisfactorily. The company’s branches in Athens (Aghios Ioannis Rentis) and Thessaloniki, as well as the distribution centre in Crete (Iraklio) maintained their high level of customer service.

OPERATIONS

The sales of the company in 2016 at current metal prices amounted to €76 million compared to €72 million in 2015.

Earnings before taxes for the financial year 2016 amounted to €1.7 million compared to losses of €940,000 in 2015.

To be noted that Nexans Group uses the index of "operating margin" in order to evaluate the business performance of each company, this index being equal to net profit before interest and taxes and expressed as a percentage of sales at standard metal prices. The company’s operating margin in 2016 was positive and amounted to €2.2 million, this being equal to 3.9% of the turnover (at standard metal prices) versus profits of €292,000 in 2015.

As mentioned in detail in the chapter "Price Fluctuation Risk", the company takes the necessary steps in order to hedge the potential risks from the fluctuation in the prices of raw materials (copper and aluminium). Based on the rules of the International Financial Reporting Standards, the company is also obliged to carry out an accounting assessment of all open contracts traded on the metal exchange.

Amounts in thousands Euros

FINANCIAL FIGURES Dec-16 Dec-15Change

%Sales at current metal prices 75,982 71,768 5.9%Sales at standard metal prices 56,665 51,631 9.7%Net earnings before interest, taxes and depreciation 3,556 1,529Percentages of sales at standard metal prices 6.3% 3.0% 111.9%Operating margin (net earnings before interest & taxes) 2,218 292Percentages of sales at standard metal prices 3.9% 0.6% 592.1%Net earnings before taxes 1,721 -940Percentages of sales at current metal prices 2.3% -1.3% -272,9%Percentages of sales at standard metal prices 3.0% -1.8% -266,8%



FINANCIAL RATIOS

The company's current assets were increased by €2.1 million, mainly due to an increase in cash.

Trade receivables were considerably decreased due to the effective steps taken by the company to collect in good time customers' open balances.

Like every year, the company focused its efforts on coordinating efficiently all the units concerned, towards achieving the minimum

time between the order itself, the completion of the production process and delivery to the customer.

The share capital increase completed at the end of February 2016 resulted in a dramatic drop in short-term liabilities by €19 million and a significant increase in the company's equity by €21 million.

The main ratios expressing the financial condition of the company are as follows:

RATIOS Dec-16 Dec-15Liquidity (Current assets/ Short-term liabilities)

3.22 1.13

Capital Structure (Debt/ Equity)

0.33 1.55

Inventory turnover in days (Inventory/ Sales) x 365 days

52 54

Equity return (Net profits/Equity)

3.3% -3.5%

Receivables turnover in days (Receivables/Sales)x365 days

82 108


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SOCIAL RESPONSIBILITY – ENVIRONMENT – HEALTH & SAFETY

One of the main duties of all units of Nexans Group is to develop a high sense of responsibility to the society of which they are part. Professional conduct, integrity and impartiality are those elements that allow us to gain and keep the trust of our customers, shareholders, employees, associates and society in general.

In many countries, Group companies contribute to local society by forging strong ties with the communities in which they operate, by offering financial and human resources, reinforcing non-profit organizations with volunteer work and establishing synergies with schools. Specifically, through its companies, the Group participates in local projects of economic and industrial development, in agencies taking steps aiming at environmental optimization, in well-being programs for its employees and their families, in synergies with universities and technical schools for student training and in children training programs.

The Nexans Group has already joined and signed the United Nations Global Compact (www.unglobalcompact.org), which is a set of rules that companies join voluntarily. It consists of four sections (Human Rights, Labour Standards, Environment and Anti-corruption) and includes ten Principles.

The Group has issued and implements a Code of Ethics and Business Conduct which imposes the business conduct adopting the highest standards of Corporate Social Responsibility, and was revised in 2016. It is based on the UN Global Compact Ten Principles, the Universal Declaration of Human Rights and international labour standards. All Group companies and, naturally, Nexans Hellas have adhered to the Code.

During 2016, the performance of Nexans Hellas with respect to the various sections of the Code was satisfactory and was briefly as follows:

Human Rights: The company does not allow

any type of discrimination with respect to nationality, race, sex, religion, age, sexual orientation, marital status, disability, political or philosophical beliefs and trade unionism.

Labour Standards: The first priority of Nexans Hellas is to ensure a working environment with the highest specifications of Health and Safety. The plant employs a Safety Engineer and an Occupational Physician, while the “Labour Health and Safety Committee” consisting of employee representatives performs its duties regularly. The company made significant investments aimed at improving safety and health in the work place, while employees participate in training programmes on health and safety matters. The company is certified for health and safety management according to OHSAS 18001.

The company condemns all forms of forced or child labour and requires from its suppliers and subcontractors to behave accordingly.

The company organizes ongoing training courses for its employees in the context of the Continuous Improvement Programme, while employees are evaluated and promoted on the basis of their merits, solely and exclusively according to their skills and performance.

Management of the company strives to maintain good relations with the plant's trade union, to which about half the company’s personnel is affiliated, and accurately implements the applicable labour laws.

Environment: Several years ago, the company, being fully aware of its responsibility for environmental protection and sustainable development, developed and applies consistently an environmental management system that is monitored by the central services of Nexans Group in cooperation with external specialized advisers, for which the company has been awarded the EHP (Environment Highly Protected) label. In the context of this system, Nexans Hellas takes all necessary measures and makes adequate investments to ensure the quality and safety of its manufactured products and production processes applied, so as to eliminate any pollution risk against the



environment. The company takes all expedient steps to reduce the consumption of raw materials and energy while all material and packaging waste that arises from production processes is delivered to specialized companies and is forwarded to recycling. For this reason, the company has entered into an agreement with the Hellenic Recovery Recycling Corporation (He.R.R.Co) and has also joined the implementation of EU REACH Regulation which concerns protection from chemical toxic substances and EU RoHS Directive which refers to the content of heavy metals in the company's products. In addition, the company is a founding member of the Board for Sustainable Development falling under the Hellenic Federation of Enterprises and has obtained an Environmental Management Certificate as per ISO 14001.

Programme of Industrial Excellence: The company participates in the programme for industrial excellence, Nexans Excellence Way (NEW), which is applied to other plants of the Group. The scope of this programme is to improve industrial operations, so as to render the company more competitive, more flexible and more responsive to the customers. The programme Nexans Excellence Way is based on personnel guidance, enhancement of performance, improvement of production processes and the introduction of the 5S methodology, so that the plants are cleaner, well settled and more secure, and mainly to improve safety and productivity in the workplace. In 2016, the plant in Lamia broke new ground and participated in the Nexans Excellence Way II industrial excellence programme, which aims at further optimizing industrial processes on a daily basis in production and equipment maintenance areas, and maintaining its outstanding performance thanks to which, in 2011, Lamia plant was bestowed “The plant of the year 2010” award, among 120 plants of the Group. The implementation of the programme continued smoothly in 2016 too.

Other measures: Nexans Hellas adopts and is committed to rules of ethics and business

conduct so as to promote free competition and avoid any involvement in situations of unfair competition or abuse of competition. The company takes all steps to avoid money laundering and takes active part in the fight against corruption in all sectors of economic and social activity. Thus, employees are prohibited from receiving and offering gifts, gratuities and any type of service related to the company’s financial dealings.

The company treats all parties with whom it transacts, such as customers, suppliers, agents and other associates with respect, integrity, transparency and confidentiality. The company manages responsibly all personal data entrusted to the same by its employees and associates in compliance with applicable laws. Finally, Nexans Hellas guarantees equal treatment for all its shareholders, as well as fairness and accuracy of all published financial and business information, and explicitly prohibits the use of inside information by any party.

RISK MANAGEMENT

The international financial environment and ongoing developments necessitate not only the monitoring of ordinary business activities but also monitoring of the risks resulting from adverse developments.

Nexans Group applies procedures for identifying and managing such risks in order to minimize them. Nexans Hellas follows faithfully the Group practice for risk management and provides continuous training to its executives in this field. In detail:

The Board of Directors stresses that if any of the events or uncertainties described below arises, they may entail substantial adverse effects on the company, its financial position and operating results. In addition, it is possible that the company may also face other risks and uncertainties than those described above. Additional risks and uncertainties which at the moment are not known may have an adverse effect on the company’s business activities, financial position, operating results and


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prospects. Finally, the order in which risk factors are listed does not indicate any variation in terms of importance or the likelihood of any of these risks.

Risks associated with macroeconomic conditions

Any adverse developments in the overall economic conditions in Greece and the uncertainty arising from the Greek financial crisis and political instability have negatively affected the company and may eventually continue to have an adverse impact on the company’s business activities, economic results and outlook.

The development of business activity, the economic situation and prospects of the company depends on the macroeconomic and political conditions prevailing in Greece. Over the last seven years, the Greek State faced major fiscal constraints and undertook to take substantial structural measures aimed at restoring competitiveness and at promoting economic growth in Greece under the adjustment programmes which were initially agreed with the International Monetary Fund ("IMF"), the European Commission (“EC”) and the European Central Bank (“ECB”) (jointly referred to as “Institutions”) and, subsequently, in August 2015 with the Institutions and the European Stability Mechanism (“ESM”) (“Economic Adjustment Programmes”).

The Economic Adjustment Programmes include fiscal adjustment policies and structural reforms aiming to boost growth, including regulations in the labour market, in various product and services markets in order to help the Greek economy open up to investments and competition, modernization and depoliticization of the public sector.

The Economic Adjustment Programmes were initially due to expire at the end of 2014. However, due to the prematurely proclaimed elections in Greece on 8 December 2014, for January 2015, the Council of the Finance Ministers of the Eurozone (“Eurogroup”) initially agreed, at the request of the Greek

Government, on a two-month “technical extension” of the Economic Adjustment Programmes until the end of February 2015. On 20 February 2015, the Eurogroup agreed to a further extension to enable the successful completion of the last pending review, as a prerequisite of any further disbursement under the Economic Adjustment Programmes, and also in order to provide ample time for the negotiations and final agreement on a new bailout programme.

However, the uncertainty as to the overall completion of the Economic Adjustment Programmes and Greece’s prospects in the Eurozone as well as the prolonged negotiations between the Greek State and the Institutions for a new financing programme in the first half of 2015 had a direct effect on the liquidity of the financial system in Greece.

At the end of June 2015 and as a result of a further deterioration of the economic situation in Greece and the lack of liquidity in the Greek banking system brought about by the expiry of the Economic Adjustment Programmes and the default of the Greek State in relation to the IMF funding and the failure to reach an agreement with the EU and the Institutions on a new bailout programme, a bank holiday was announced in Greece for a period of three weeks and rigorous restrictions were imposed on free capital flows.

Following further negotiations, on 8 July 2015, the Greek Government submitted to the ESM a 3-year funding request under a new Economic Adjustment Programme. On 12 July 2015, the Euro Summit issued a statement according to which the Greek Government should legislate a set of measures as a prerequisite for the launch of negotiations in order to draft a new Econo-mic Adjustment Programme under the ESM.

On 15 and 23 July the Greek Parliament approved part of the prerequisites identified by the aforementioned Summit and, on 14 August and after extensive negotiations, the Eurogroup announced that the Greek Government had initially reached an agreement with the Institutions and the ESM on a new Economic



Adjustment Programme of approximately €86 billion under the ESM.

According to the Eurogroup statement, under the ESM Economic Adjustment Programme, Greece targets a medium-term primary surplus of 3.5% of GDP, namely it targets balances of -0.25% in 2015, 0.5% in 2016, 1.75% in 2017 and 3.5% in 2018 to be achieved notably through fiscal reforms supported by measures to strengthen tax compliance and fight tax evasion. In addition, Greece is required to implement a number of structural reforms in the area of social security, labour market and various product and services markets in order to boost the competitiveness and modernization of the economy and to depoliticize the public sector.

As a result of the positive effects of the finalization of the new ESM Economic Adjustment Programme on the Greek economy, the capital controls that were initially imposed in June 2015 were relatively eased in mid July and thereafter on many occasions, such as on 31 July 2015, 17 August and 25 September 2015. However, presently there is no specific expectation as to when such capital controls will be fully lifted or eased.

Greece has faced and still faces major fiscal challenges and structural deficiencies in its economy which caused concerns about an eventual Grexit. The likely extent and scope of the effects of Grexit is uncertain but such an exit or the threat of exit could have a substantial adverse effect on the company's activities and liquidity.

Moreover, risks arise from the economic environment established from the above facts, the most important of which concern the liquidity of the financial system and business entities, the collectability of their receivables, servicing of their existing loan liabilities and/or the fulfillment of terms and the respective financial ratios, the recoverability of deferred tax assets, valuation of financial instruments, adequacy of provisions and capability to ensure the smooth operation of business entities.

Any failure to implement the ESM Economic

Adjustment Programme and/or overall failure of this Programme to achieve a considerable improvement of the Greek economy or in case of another credit event with respect to the Greek sovereign debt or its further restructuring or any Grexit, may have a negative impact on the company's results and financial position in a manner which at the moment cannot be accurately predicted.

The company’s sales, results and prospects of growth depend to a large extent on the robustness of the individual operating segments; as a result, if these specific segments show a downturn, the company’s sales and results could be negatively affected.

Many customers of the company use the produced cables as parts of their products or in projects undertaken for their customers. The company’s ability to sell its products depends on the overall economic conditions, including the users’ final expenditure with respect to electricity transmission and distribution infrastructures, industrial production assets, new constructions, the building sector, information technology and the maintenance or overhaul of communication networks. During periods of recession of the above segments, the company is likely to face a drop in its sales and results.

Price fluctuation risk

The volatility of the price of copper, aluminium and other raw materials, as well as of fuels and energy could have a negative impact on the company’s sales and results.

The cost of copper and aluminium, i.e. the most important raw materials used by the company to manufacture its products, is subject to significant changes caused by the conditions of supply and demand in metal exchanges, weather conditions, political and economic variables, as well as other unknown and unforeseeable variables. Further, the fuels and energy required for the operation of the company’s plant are also subject to significant volatility.

The core raw materials in the cables sector


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(copper and aluminium) concern products whose prices are quoted on the London Metal Exchange. Therefore, purchases and sales are affected by international price fluctuations. To hedge the risk from changes in metal prices, Management of the company purchases the contained metal under the same terms applicable to sales to customers. Sales are divided into 2 categories:

A) sales based on confirmed customer orders;

B) sales based on provisions for the domestic market which amounted to 25% of total sales in 2016.

The risk arising from the volatility of the copper and aluminium price is generated only from those sales based on forecasts for the domestic market as if the forecasts are not confirmed, the

company’s open position in metal stock may be considerable and, if combined with an eventual significant change (drop) in metal prices, it may result in significant losses.

To reduce the risk arising from the volatility of raw materials cost, the company monitors constantly its open position in metal stock and enters into futures and forward contracts (derivatives) whenever necessary, to hedge this risk and limit the extent of its exposure to price fluctuations.

These contracts have different maturity dates, depending on the date of the expected purchase of such metals. The valuation of the company’s open positions on 31 December 2016 and 31 December 2015 is as follows (amounts in thousand €):

31 December 2016

MetalBuy/ Sale

Quantity (tons)

Forward buy/

(Forward sale) price

Current price

Valuation profit/ (loss)

Aluminium Sale (300) (487) (480) 7(487) (480) 7

Lead Sale (150) (234) (285) (51)Aluminium Sale (150) (230) (241) (11)

(464) (526) (62)

Total (951) (1,006) (55)

31 December 2015

MetalBuy/ Sale

Quantity (tons)

Forward buy/

(Forward sale) price

Current price

Valuation profit/ (loss)

Copper Buy 225 970 973 3970 973 3

Copper Sale 0 0 (11) (11)Aluminium Sale 0 0 (9) (9)Lead Sale (25) (36) (41) (5)

(36) (61) (25)

Total 934 912 (22)

The above valuation profits/(losses) as well as the realized profits of closing metal futures are posted to the cost of goods sold given that the purchase cost of raw materials, in respect of which metal derivatives are concluded, is also posted to the cost of goods sold.

The volatility of the price of copper, aluminium and other raw materials, as well as of fuels and energy could have a negative impact on the company’s sales and results. In addition, if the aforementioned derivatives strategy implement-ted by the company to hedge the risk and



contain its exposure to the fluctuations of raw material prices turns out to be ineffective, the impact on the company’s results could be unfavourable.

The markets for the company’s products are quite competitive and if the company does not make successful investments in the development of new products, the improvement of productivity, customer service and support, the sales of its products could be negatively affected.

The copper, aluminium and fiber-optic cables market is extremely competitive and calls for major investments in research and technology and some competitors may enjoy comparative advantages. Many products of the company are manufactured according to common specifica-tions and, therefore, may be easily replaced by competitive products. Consequently, the company is subject to competition on many markets based on the price, quality, range of product family, available stocks, timely delivery, customer service, the environmental effects of the products, as well as the company's capacity to respond promptly to its customers’ needs.

The company estimates that its competitors will keep on improving the design and performance of their products and launch new products at competitive prices and features. Therefore, the company should constantly make investments in product development, enhancement of productivity, and customer service and support to remain competitive. Moreover, any increase in competitive product imports could have a negative effect on the company's sales in any market.

Due to its export orientation, the company is exposed to economic, political and other risks in third countries.

In the year ended 31 December 2016, 48.8% of sales and 37.2% of receivables of the company were channeled into exports. Some countries such as Libya run a greater risk in terms of eventual social and political destabilization, international conflicts, government interventions, changes in regulatory requirements,

unfavourable treatment of foreign companies, terrorist attacks, natural disasters and eventual pandemics for which they lack the necessary resources to deal with emergencies.

The economic developments in the countries where the company exports products, including future economic changes or crises (such as high inflation, considerable currency devaluation, voting of exchange control measures or capital controls), could also have adverse effects on the company’s financial position and results.

The company relies on independent distributors and retailers for the non-exclusive sale of its products, who may, at their discretion, cease to buy the company’s products.

Distributors and retailers account for a considerable part of the company’s sales (2016: 21.6%). Such distributors and retailers are under no contractual obligation to distribute the company’s products on an exclusive basis or for a specific period of time. Therefore, said distributors and retailers may decide to purchase competitive products or cease to promote the company's products at any time. Any simultaneous loss of major distributors or retailers could have significant adverse effects on the company’s capacity to approach end users and may also impact negatively its business results. Moreover, any eventual liquidity problems of one or more major distributors or retailers could have a negative effect on the company’s sales and also generate a significant credit risk.

The company relies on major customers who are able to amend the terms of cooperation and/or discontinue the purchase of company products.

In 2016, there were customers of significant size who absorbed a considerable part of the company’s turnover [Nexans Logistics Ltd: 21.5%, companies of Public Power Corporation (PPC) Group: 14.5%, OTE: 10.2%, companies in Libya: 8.7%]. Α portion of the company’s significant exports to the UK could be at risk if


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the UK implements tariff barriers to imports from the European Union as a result of Brexit. Any substantial change in the terms and conditions of cooperation with the most important customers and/or any discontinuation of collaboration may have an effect, at least on a short-term basis, on the development of the company’s operations and results.

Any changes to tax and corporate law are likely to have a material adverse effect on the company's business activity, financial position and results.

Greece has a complex tax system which has gone through radical changes over the last few years and, consequently, the fact that the Greek State may decide to introduce regulations of a tax or corporate nature in the future, in order to tackle any negative circumstances which are related to the Greek sovereign debt crisis and could impact the company cannot be excluded. Such regulations may have a substantial adverse effect on the company's business activity, financial position and results or on its ability to achieve its strategic goals.

Changes in industrial standards and regulatory requirements may have a negative impact on the company's operation.

The cables sector worldwide complies with the requirements of international and national regulatory authorities, as well as with principles of establishing industrial standards. Any changes in the standards and requirements imposed by these authorities may adversely affect the company. In case the company is not able to respond swiftly to these new or amended specifications, the effect on its sales may be unfavourable.

Moreover, changes in the legislative framework could affect the development and other parameters of the key markets serviced by the company. The development of the cables industry has been considerably affected by the

laws on energy generation and marketing, including alternative and renewable energy sources, by public utilities investments and public expenditure for infrastructure. Although the legislative initiatives had overall a positive effect on the cables sector and the company’s financial results, no assurance can be provided that such positive effect will last. Moreover, the effect that any new changes in the laws or standards of the sector could have on the company’s future financial results, cash flows and financial situation cannot be predicted.

The company’s majority shareholder exercises significant influence over the company and the shareholder’s interests may vary from the interests of other shareholders.

The company’s majority shareholder, Nexans Participations, holds 88.57% of the company’s share capital and voting rights.

Consequently, the above shareholder de facto has the ability to influence the decisions of the company’s Shareholders’ Meeting including, among others, the decisions on election of BoD members, dividend distribution, share capital increase, mergers, acquisitions and other relevant corporate acts. While exercising its voting rights, the majority shareholder may have legitimate interests different from those of the other shareholders.

The company has entered into the agreements of 01.01.2001 and 22.05.2015 with Nexans France regarding the licensing of intellectual property rights, patents, software and access to research and technology, as well as for the provision of administrative and commercial services. Any rescission or otherwise termination of these agreements may have a substantial adverse effect on the company’s results.

The company is part of the companies group of Nexans S.A., with whom it has entered into an agreement as of 1 January 2001, which had an initial 10-year term and could be



subsequently extended for two-year periods. In the context of the agreement, in exchange for remuneration, Nexans S.A. entitles the company to use intellectual property rights, patents and software, while also providing the company with access to research and technology.

The effective term of this agreement has already been extended four (4) times and shall be extended again, unless either contracting party (Nexans S.A. or the company) declares by a written notice that they do not wish to further extend this agreement. In addition, this agreement provides each contracting party with rights of termination which, as the case may be, enable its termination either subject to a deadline for remedy in case of substantial breach of terms by the counterparty or without any deadline in case proceedings for collective satisfaction of creditors are brought against either contracting party or, finally, if the company automatically ceases to be a subsidiary of Nexans S.A.

In addition, the services agreement dated 22.05.2015 concluded by the company with Nexans S.A. and Nexans France (further to the agreement dated 1 January 2001 concluded between the company and Nexans France) provides for the provision of various admi-nistrative, commercial and consulting services which pertain to the operation and activities of the company (including but not limited to the achievement of optimum market conditions through the volumes of purchases and the global contracts of Nexans France, services and consulting relating to the company’s industrial organization, human resources and other optimum management practices, strategic planning, advertising and generally communication, financial analysis, preparation of financial statements and legal matters).

The said services agreement has an initial effective term of 4 years (with retroactive effect as of 01.01.2015) and may be further renewed for successive periods of 2 years. Such renewal shall be automatically put into effect unless either contracting party states that

it no longer wishes any further extension of such term by a 6-month written notice prior to the expiry of the (initial or subsequent) term. The services agreement includes the same termination rights with the above agreement dated 01.01.2001.

Given the extremely competitive environment where the company operates, it must have access to leading-edge technology and know-how to maintain its competitiveness. Therefore, the above agreements are extremely important for the company’s operation.

Termination of the agreements in any manner as per the foregoing may have a material adverse effect on the company’s business, operating results, financial situation and prospects.

In addition, Management of the company estimates that despite the completion of the share capital increase, any financing from Greek credit institutions in the future may be made available only if Nexans Group provides banks with a (non-binding) letter of comfort to support the company.

Finally, an important percentage of the company’s sales (around 32% in 2016 and 24% in 2015) is channeled outside Greece, into companies of Nexans Group. Therefore, if Nexans Group ceases to support the company in any of the above sectors, this may have substantial negative repercussions on the company’s results, financial situation and prospects.

Failure of the company to carry out properly orders for major customers and turn-key projects may have an unfavourable effect on its capacity to be awarded similar contracts in the future and under extreme circumstances the company may be forced to pay significant indemnities and fines.

The last few years the company has assumed the implementation of major turn-key projects for specific customers. These projects are very challenging and are associated with the


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implementation of major long-term contracts which stipulate significant financial sanctions in case the company fails to comply with them. Company Management aims to take steps to increase its market share by carrying out successfully contracts for medium and high voltage cable projects, as well as for land and submarine fiber-optic cables. In addition, the purchases of terrestrial and submarine power transmission cables which are financed by the major investments in the interconnections of the power transmission network as well as the market of renewable energy sources such as solar energy are an attractive long-term opportunity for the company. The successful implementation of major turn-key projects is also crucial for the company’s long-term success in this market.

Any eventual unexpected discontinuation of the provision of raw materials and especially copper and aluminium from main suppliers may affect the results of the company’s activities and financial performance.

If the main suppliers suddenly discontinue to provide the necessary raw materials, due for instance to deficiencies, financial distress, strikes, accidents, fires, typhoons, earthquakes, floods or terrorist attacks, this could disrupt production or affect the company’s capacity to increase or maintain both production and sales. Most suppliers of copper and aluminium rods employed by the company are foreigners, with the company’s greatest supplier of copper rods being a company of Nexans Group, i.e. Nexans France, which accounted for 90% of the company’s total purchases of the said raw material during the period 01.01-31.12.2016 (namely, an amount in excess of €27.3 million). Further, during the same period 01.01-31.12.2016 the greatest supplier of aluminium rods accounted for approximately 77% (i.e. around €4.7 million) of the company’s total aluminium purchases.

Any unforeseen problems encountered with

suppliers of copper or aluminium rods could entail significant adverse effects on the company. In addition, the company’s policy consists in employing a limited number of suppliers for the majority of the other raw materials. The company does not keep long-term agreements of raw materials supply or any strategic agreements with most of its suppliers and, thus, the company may have limited options for its alternative supply on a short-term basis, if such suppliers fail to continue the supply of materials or accessories for any reason whatsoever. Furthermore, the search, selection and access to alternative sources of supplies may increase their cost in a short-term horizon.

The premises, machinery of the plant and the stocks of the facilities are insured with respect to their entire construction cost. Any total destruction or material damages to them in excess of the insurance indemnity or the insurance coverage is likely to have a negative effect on the company’s financial results and financial position.

The company’s properties may suffer material damage due to natural disasters (such as fires, earthquakes and floods) and terrorist attacks and other forms of violence (such as arson) resulting in damage (including the loss of profits) which may not be covered, in whole or in part, by the insurance policies taken out by the company. In line with the standard market practice, the company’s properties are insured for their entire construction cost rather than their book or commercial value. Any total destruction or material damages to them in excess of the insurance indemnity or the insurance coverage is likely to have a material negative effect on the company’s financial results and financial position. In addition, no coverage or limited coverage is available on the insurance market as regards certain types of risk (such as risk of war and earthquake during technical works). Moreover, the cost of such insurance may be prohibitive in comparison with the particular risk. Further, the



coverage of certain risks against which the company is insured, in whole or in part, may no longer be available in the future. If any risk arises to a company property for which there is no insurance coverage or the loss exceeds the insurance limit, the company may lose a part of the capital invested in the affected property and the future benefits expected to obtain from the use of such particular property. Finally, the company may be forced to restore damages arising from non-insured risks or to pay indemnity to third parties in case of civil liability that is not covered by insurance policies.

The company cannot ensure that no substantial damages in excess of the insurance indemnity will arise in the future.

Failure or shut-down of the IT systems could have a negative impact on the company’s smooth operation.

The company relies on its information systems and on third-party systems to monitor and schedule the production process, process customer orders, dispatch products, invoice customers, monitor inventories, support accounting functions, compile the financial statements, pay salaries to its employees and, generally, to run the company regularly and smoothly. Any disruption to key information systems from hackers or other sources could have a significant negative effect on the company’s operation.

Also, its information systems may require upgrading on a periodic basis to provide additional capabilities and features. The launch of new information systems and the upgrade of existing ones often disrupt the company’s ongoing activities. By way of example, any disruption affecting the capacity of the Financial Division to compile accurate reports on the company’s financial performance in due time could have an adverse effect on the Management’s capacity to make sound business decisions. If the company is not able to implement successfully any potential future improvements to the information systems, its

financial situation, results and cash flows could be negatively affected.

Any increased threats against the security of IT systems and more advanced means of cybercrime, including advanced electronic viruses, are a potential risk against the security of the company’s IT systems and networks, and also against data confidentiality, availability and integrity. If the IT systems, electronic networks or service providers on which these are based fail to function properly or if the company suffers loss or leakage of business or financial information for any reason whatsoever including disasters, power failure and breach of security, and if any back-up business continuity systems do not deal with the core causes in an effective and timely manner, the company Management may face difficulties in managing its operating needs and business matters, which could have an unfavourable effect on the company’s financial results and/or financial position.

Environmental obligations could eventually have adverse effects on the company’s operation and results.

The company is subject to European and Greek laws and regulations on the protection of the environment, which govern its operation and the use, handling, disposal and restoration of environmental pollution. The environmental liability risk is linked with the company’s production activities. Under certain conditions, in accordance with environmental laws, the company could be held jointly and severally liable for the restoration of any pollution from toxic substances and heavy metals in the company's facilities and in third-party sites with whom the company collaborates regarding waste disposal. The company could be also held liable for any consequences arising from human exposure to these substances or other environmental disasters.

The company makes adequate investments to minimize the environmental pollution risk arising from its production process. The


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company has adopted the REACH regulation of the European Union with respect to protection from chemical toxic substances, and the RoHS Directive of the European Union on the content of heavy metals in its products.

Nevertheless, there can be no assurance that the cost of compliance with environmental laws, EU regulations, laws and requirements on health and safety will not generate additional future expenses which could have a substantial adverse effect on the company's financial results, cash flows and financial position.

Dependence on management executives and specialized personnel

The company management and functions rely on a team of experienced executives and specialized personnel. Any disruption of the relationship between the company and its executives and specialized personnel, which causes them to leave for any reason, or any loss of them, could have an unfavourable effect on its smooth operation, at least on a short-term scale until the company replaces them.

The loss of any member of the management team or any specialized and experienced employee leads to the loss of vital knowledge, experience and know-how, deterioration of customer service, thus leading to increased recruitment and training cost since it renders the company’s successful operation and implementation of business strategy more difficult.

The company may not be in a position to recruit instantly specialized workforce who will replace the withdrawing persons and the integration of the eventual substitutes may disrupt the company’s smooth operation. Moreover, the loss of key executives and employees thoroughly knowledgeable about the production process could lead to increased competition in case the said employees are recruited by a competitor and are able to recreate the company's production process.

Also, the company’s future success depends in part on its capacity to attract and retain highly skilled personnel in great demand in the labour market.

As part of its compliance with borrowing terms, the company may be obliged in the future to abide by specific financial ratios and other covenants which affect considerably its operating activity.

In the future, the company may be obliged to observe specific financial ratios and other covenants with respect to the maximum possible borrowing, and the capacity to distribute dividend and implement investments. Once these covenants are stipulated, the company's ability to decide freely on its business strategy and the implementation of initiatives/ transactions which the company would otherwise deem advantageous may be restrained.

In order to eventually draw funds from credit institutions, the company may be forced to provide collateral on its assets, thus increasing the number of company creditors having acquired collateralized receivables with special and general privileges, and reducing the likelihood of distributing any amount to shareholders in case of dissolution or collective satisfaction of creditors against the company.

In case the company seeks to obtain bank loans, this may entail imposition of collateral on the company's assets in favour of lending banks. The provision of collateral entails the creation of a special privilege in favour of the banks to satisfy their claims in case of enforcement order or collective satisfaction of creditors against the company (such as bankruptcy, special liquidation, etc). Therefore, the bank loans provided to the company may increase the number of its creditors, whose claims are secured by special or general privileges, thus reducing the likelihood of distributing any amount to shareholders in case of dissolution or collective satisfaction of creditors against the company.



Eventual non-compliance of the company with covenants and other provisions laid down in existing or future financing agreements could lead to the cross-default of certain financing agreements, which could jeopardize the company's capacity to meet its liabilities.

Various risks, uncertainties, or even events beyond the company's reasonable control could have an impact on its capacity to comply with the covenants and financial ratios incorporated in the terms of financing agreements. Moreover, certain financing agreements may include special terms of prepayment or acceleration of loan repayment at the discretion of lenders when the company does not abide by the covenants. Further, the loan agreements may provide for the prohibition or preliminary approval regarding the change in the control over the company, or the right to terminate the loan when major unfavourable changes have taken place.

Any non-compliance with any covenant included in existing or future financing agreements could lead to default and suspension of financing from its lenders or even to termination of the company's loan agreements, with lenders seeking prompt refund of all loans granted to the company by liquidating any collateral provided by the company. The above may limit the company's capacity to meet its liabilities to suppliers, finance investments and other payments, pay dividends, make freely payments to other

companies of Nexans Group and, naturally, may prohibit the company from financing acquisitions, mergers and/or transferring or selling assets. Under these circumstances, the company may not have adequate funds or other resources to meet all its liabilities to third parties at the same time, which could have a substantial unfavourable effect on its financial position.

The company's capacity to pay dividends will depend on its capacity to generate profits available for distribution.

All dividends and other distributions are paid by the company at the discretion of its shareholders general meeting and depend on the availability of profits and reserves for distribution (once all relevant terms of the Greek corporate law are met), and on the adequacy of cash. The generation of profits and other reserves for distribution depends on a number of factors including the successful management of the company's investments, the yield from its operations, the taxes and profits relating to its operations, regulatory framework, macroeconomic conditions under which the company operates, liquidity needs as well as tax and other legal factors.

Credit risk

The company is exposed to the credit risk of customers and commercial partners and to their financial capacity to pay timely their liabilities.

Trade receivables are broken down as follows:

31.12.2016 31.12.2015Domestic customers 8,779 12,413Foreign customers 1,652 3,762Receivables from affiliated parties 3,860 4,191Cheques receivable (post-dated) 1,849 630

16,140 20,996Less: provisions for doubtful debts (1,524) (1,500)Total 14,616 19,496


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On 31 December 2016, promptly serviced trade receivables amounted to €14,142 (€18,385 for 2015). As for the receivables remaining open beyond credit limits over 30 days, a statistic provision for doubtful debts is set up depending on the age of the receivable. On 31 December 2016, the amount of the said receivables came to €1,998 (€2,611 for 2015) and the respective provision to €1,524 (€1,500 for 2015). The total amount of

receivables also includes those that are past due, but are not considered as doubtful. Nexans Hellas, faithfully applying the rules of IFRS, performs reliable provisions for doubtful debts, taking into account the relevant estimations of associate lawyers for specific cases and raising additional statistical provisions for the rest, depending on their allocation per age.

These receivables are broken down per age as follows:

31.12.2016 31.12.201530-60 days 178 25860-90 days 46 990 + days 1,621 2,190Sub total 1,845 2,457

Cheques receivable (post dated) 153 154Total 1,998 2,611

The provisions for doubtful debts for the period ended on 31 December 2016 are broken down as follows:

The additional provision for the year is included in the Administrative and Selling expenses.

The company’s policy is to enter into contracts with counterparties meeting top credit rating criteria while in the case of credit risk the company seeks more collateral. Moreover, in an attempt to restrain losses from eventual default of its customers, the company collaborates with a credit insurance company of Nexans Group through which it insures a part of its receivables from foreign and domestic customers. The amount of insurance depends on the credit rating of each customer, as evaluated by the insurance company.

Nevertheless, any negative financial results of customers and commercial partners or their negative assessments about their future income may result in them not paying in good time, paying in part or not paying at all their liabilities in order to seek a renegotiation of the contractual terms, or even withdraw from the company’s commercial network, all of which could lead to an eventual drop in the company’s income and impact adversely its financial results.

Interest rate fluctuation risk: During the first two months of 2016 and till completion of the share capital increase, the company had been receiving on an almost exclusive basis short-term financing from the affiliated company Nexans Services, in order to meet its current needs for working capital.

The said short-term financing from the affiliated company Nexans Services was provided at a borrowing rate established on the basis of a mix of ratios and factors including the interest rate of the Greek 10-year Treasury Bond and Euribor rate so as to be adapted to the country risk applying in different periods. Such interest rate was

1 January 2015 2,078Use of provision (1,112)Additional Provision 53431 December 2015 1,500

Additional Provisions of period 2431 December 2016 1,524



specified for each withdrawal throughout this borrowing (7 days).

In addition to the above, the share capital increase and, therefore, the repayment of the entire interest bearing loan has had a positive effect to help avoid possible risks arising from the fluctuation of interest rates.

Exchange rate risk: The vast majority of transactions, contracts and orders of the company are executed in Euros. For the trade receivables and liabilities made in foreign exchange, Management constantly monitors the fluctuations in exchange rates and assesses whether the respective positions must be adopted so as to hedge the resultant risks. In this context, Management enters into futures and forward contracts (derivatives) so as to limit the extent of its exposure to fluctuations of exchange rates.

Liquidity risk: Liquidity risk is dealt with by ensuring adequate cash and cash equivalents, availability of sufficient financing and by the capacity to close open positions. Due to the dynamic nature of the activities, the cash management department aims at flexible financing through authorized credit lines. The contractual maturity dates of trade and other receivables and loans refer to a period less than one year. It is estimated that the successful completion of the share capital increase will help minimize the liquidity risk.

Fair value: The amounts presented in the financial statements with respect to cash, trade receivables, liabilities and loans approach their respective fair values due to their characteristics and their short-term maturity.

Fair values of derivatives are based on market valuation.

Capital risk management: As regards capital management, the company aims to ensure problem-free operation in the future so as to provide satisfactory yields to shareholders and benefits to other contracting parties as well as to ensure the ideal capital allocation at the lowest

capital cost. To this effect, the company monitors consistently the working capital so as to keep external financing at the lowest possible levels. It is noted that the share capital increase will have a positive effect on dealing with the capital management risk.

Amounts in thousands Euro 31/12/2016 31/12/2015

Total loans 0 15,694Less: Cash (10,095) (3,971)Net debt (10,095) 11,723Total equity 41,595 20,416Total capital 31,500 32,139Leverage ratio -32% 36%

MACROECONOMIC ENVIRONMENT

The extremely adverse macroeconomic developments in 2015 which culminated in the imposition of capital controls marked 2016 too. Like the previous year, 2017 faces extremely high risks concerning the liquidity of the financial system and business entities, the collectability of their receivables, servicing of existing loan liabilities and/or the fulfillment of terms and financial ratios, the recoverability of deferred tax assets, the valuation of financial instruments, the adequacy of provisions and business continuity. Operating in the above context, the company has not only managed to deal with the situation but has also achieved positive results that were considerably improved in relation to the previous year.

STRATEGY – OUTLOOK

It is estimated that in 2017 the financial environment in Greece will remain unstable generating overall difficulties but also opportunities.

More specifically, it is estimated that the drop already registered by the domestic construction activity and any eventual delay in the implement-tation of infrastructure projects by public utilities (PPC, HTO) will have a negative effect on the company’s operations. Nevertheless, Nexans Hellas will make its best efforts to take advanta-ge of any opportunities that may emerge and to deal with current difficulties. In light of the


36

above, Management of the company believes that the transformation programme will contribute to the achievement of these goals.

In the above context, in 2016 our company managed to obtain certification for the German market. This fact opens up for our company the potential to sell into a market of 30 million Euros and which we can now include in our client base. On the other hand, Nexans company in Germany which operates in both medium and high voltage sector wishes to focus more on high voltage. The above fact will enable us to start supplying some customers in Germany with cables manufactured by Nexans Hellas. Despite some investments made in 2016 to optimize the production capacity of the plant, this is not enough to meet the needs of the large German market which can turn out to be very important for the company in the future. This is why, as already decided, we are at the stage of constructing a new medium-voltage line in our plant. The total investment amounts to approximately €1.5 million for the equipment and €1.5 million for premises, transportation and set-up expenses, etc.

Our goal is to have a fully operational new line by the end of 2017 and be able to produce cables for the entire German market as of 2018. This does not concern only Germany but it will enable our company to target other new markets. It is also stressed that as regards sales within Nexans Group, these will depend on the demand and prices of the markets targeted by the Group units reselling products of Nexans Hellas.

This will ultimately generate new dynamics that will also create new jobs, which is extremely important for the company, the environment in which we operate and generally Greece.

As regards international markets and especially those in Middle East and Africa, efforts are still made to enter into new partnerships, the development of which will depend, among others, on the preservation of political stability in these areas. The persistent capital controls call

for actions that will increase the company’s exports so as to counterbalance the recession that has already struck the domestic market. Note that due to the high copper prices maintained in metal exchanges for a very long period of time, the demand for aluminium cables has been increased.

Notwithstanding the above adverse macroeconomic environment in Greece, the company has secured important contracts from Greek public corporations and foreign customers for the current year, and is expected to take part in more tenders launched by public utilities in 2017.

The modernized plant at Lamia (Aghia Marina), the organized and functioning commercial, financial and technical services and also the continuous renewal of its human resources, are key advantages for the company in order to achieve all the above. The company has utilized and absorbed the ‘know-how’ provided by Nexans Group services which has already been successfully applied in the plant. This know-how relates to introducing new more efficient production methods, reducing disposable materials and energy consumption and introduction of organizational methods that allow more efficient use of human resources. The promotion of new special types of cables such as cables resistant to particular conditions (fire, high temperature) and also fiber-optic micro-cables is a significant improvement of the services provided to our customers. Additionally, significant investments of advanced technology are made to protect the environment and enhance safety and health conditions in the plant’s workplace.

All the above doubled by the successful share capital increase and the resultant optimization of the company's financial figures lay the foundation for the company's further growth.



ORDERS

Orders backlog as at the end of 2016 amounted to €15.5 million compared to €22 million at 2015 year-end. It is stressed that this backlog amount does not take into account the sales which are made over the counter.

INVESTMENTS

The value of the company’s investments in fixed assets in 2016 amounted to €2,329 thousand compared to €1,363 thousand in 2015. In 2016 the depreciation amounted to €1,338 thousand.

Our investments are mainly directed to new products in order to satisfy market and customers requirements, while some investments were intended for the upgrade and/or replacement of existing production lines. A significant part of our investments concerns safety, environmental protection, material recycling and reduction in energy consumption.

It is noted that the company adapting to the current unfavourable market conditions focused its options on few high-efficiency investments and focuses on innovative products and services.

EXPENSES FOR RESEARCH, DEVELOPMENT, SALES PROMOTION AND OTHER SERVICES

Our company participates constantly in Nexans Group’s Research & Development programmes. R&D are related to the promotion of new products and to the improvement of existing products in terms of both quality and technical capabilities. R&D concern also new techniques and production methods to increase productivity and introduce the use of new environment friendly materials.

In addition, the Group has elaborated major cutting-edge programmes that concern investments in environmental protection and improvement of health and safety at plants. Nexans Hellas takes part in these programmes and makes full use of the know-how provided.

The contribution for the participation of Nexans

Hellas in these global R&D activities and the expenses for product promotion and services for 2016 amounted to €1,156 thousand.

There are 4 Nexans Group Research & Development Centers entrusted with carrying out upstream research activities, in conjunction with external partners such as universities and external research centers and organizations. They work for all of Nexans' business units and are therefore fully financed by the Group. These Centers are based in France (Lyon and Lens), in Nuremberg in Germany and in Jincheon County in South Korea.

Furthermore, our above contribution to this international programme also covers the marketing and sales network established in certain countries, which leads to a better co-ordination of Group companies in these markets and will reinforce our sales.

PERSONNEL

The company’s total workforce on 31 December 2016 was 225 compared to 212 employees at the end of 2015. As a whole, there were 17 departures and 28 new employees were hired during the financial year. Particularly note the positive balance in the employment of Nexans Hellas, at a time of sharp rise of unemployment throughout Greece.

PROPERTIES

The land and buildings belonging to the company remained invariable during the year.

IMPORTANT EVENTS

A. Share capital increase

The Ordinary General Meeting of the company’s shareholders held on 29 May 2015, which was postponed and resumed its operations on 26 June 2015, decided to increase the company’s share capital by twenty-one million eighty thousand four hundred sixty-eight Euros and seventy-five cents (€21,080,468.75) through the issue of up to sixteen million eight hundred sixty-four


38

thousand three hundred seventy-five (16,864,375) new ordinary registered shares with voting rights and a nominal value of €1.25 each through payment in cash and a pre-emption right in favour of old shareholders at a ratio of eleven (11) new ordinary registered shares to four (4) old ones. Such increase was fully subscribed and the Board of Directors attested the payment of the relevant amounts.

Following the above share capital increase, the company’s share capital amounts to twenty-eight million seven hundred forty-six thousand ninety-three Euros and seventy-five cents (€28,746,093.75) divided into twenty-two million nine hundred ninety-six thousand eight hundred seventy-five (22,996,875) ordinary registered shares with voting rights and a nominal value of €1.25 each.

All the above company shares are listed for trading on the Main Market of the Athens Stock Exchange. The rights and obligations of the company’s shareholders, as well as those of minority interest, are those stipulated in the Law and the company's articles of association. The liability of the company’s shareholders is limited to the nominal value of the shares they hold.

Following the above Increase, the shareholders (natural or legal persons) directly or indirectly holding more than 5% of the total number of the company’s shares are set forth in the table below:

Shareholder Percentage

1. Nexans Participations (France)

88.57

2. HMG Globetrotter (France) 5.31

B. Change in the composition of the Board of Directors

By its decision dated 30.6.2016 (Minutes No. 896), the Board of Directors elected Mr. Ioannis Trikardos as independent non-executive member of the Board in the stead of its resigned independent non-executive member Mr. Demetrios Politis and was re-established by the

same decision as follows (see changes described in the section below on “Subsequent Events”):

1) Christof Josef Barklage, son of Josef, Chairman of the Board & Chief Executive Officer

2) Stephane Iliades, son of Panagiotis, Vice-Chairman of the BoD & General Manager

3) Henrik Desfontaines, son of Léon, non-executive member of the BoD

4) George Chryssomallis, son of Konstantinos, non-executive, independent member of the BoD

5) Ioannis Trikardos, son of Vassilios, non-executive independent member of the BoD and

6) Patrick Noonan, son of James, non-executive member of the BoD.

C. Capital controls

The capital controls imposed on 28 June 2015 are still in effect, thus prolonging the uncertain economic situation in Greece. The instability of the Greek bank sector and the resultant imposition of capital controls implies the downturn of Greece again and the anticipated further drop in the disposable income of consumers may affect the company's opera-tions. Note also that the measures have gradually eased since the launch of capital controls while enterprises have also adapted to the new economic and bank reality. Nevertheless, malfunctions are also registered in the sectors below:

1. A considerable number of raw material suppliers and especially foreign suppliers still require payments on extremely difficult terms (advance payment, minimum days of credit) as the credit insurance companies do not provide enough credit coverage even for major solvent Greek entities.

2. Although the payment procedure involving foreign suppliers through collaborating banks has been considerably improved, it is still a factor causing delays in cases of



urgent payments since approvals by the competent committees are required.

3. Bank account opening in case of collaboration with a new credit institution.

Notwithstanding the major difficulties the company faced when capital controls were first imposed, at the present stage it continues to operate without any significant difficulty other than the above. The share capital increase which was successfully completed has played an important role in securing the company’s smooth operation as the company is no longer dependent on raising high interest-bearing borrowing.

Amid this uncertain economic environment, Management assesses continuously the situation and the eventual future effects in order to take all necessary steps and actions to minimize the impact on the Group's operations.

SUBSEQUENT EVENTS

Following the resignation of the BoD member Mr. Christof Josef Barklage, on 31.03.2017 the company's BoD elected Mr. Kamil Beffa as BoD member and substitute of Mr. Christof Josef Barklage, in accordance with article 13(1) of the company's Articles of Association and Article 18(7) of Law 2190/1920.

Thereafter, the Board of Directors was re-established as follows:

1. Patrick Noonan, son of James Harold, Chairman of the Board of Directors [non-executive member]

2. Stephane Iliades, son of Panagiotis, Vice-chairman of the Board of Directors & Chief Executive Officer [executive member]

3. Henrik Desfontaines, son of Léon, Director [non-executive member]

4. George Chryssomallis, son of Konstantinos, Director [non-executive member]

5. Ioannis Trikardos, son of Vassilios, Director [non-executive member]

6. Kamil Beffa, son of Richard Zuber, Director [non-executive member]

Note that Messieurs Ioannis Trikardos and George Chryssomallis are independent members of the Board of Directors.

The newly-elected member's term of office shall expire at the same time with the current Board's term, namely once a new Board of Directors is elected by the Ordinary General Meeting of shareholders which will be convened within the first half of 2017.

No other important events took place after the 31st of December 2016 which could substantially affect the results of the company for the year ended on such date.

MARKET VALUE OF THE COMPANY

Greek Market Value – Indicators concerning our company’s share on 31 December 2016:

Number of ordinary registered shares on 31 December 2016 22,996,875 on 31 December 2015 6,132,500

Share price EUR on 31 December 2016 1.04 on 31 December 2015 0.80

Market value in million Euro on 31 December 2016 23.92 on 31 December 2015 4.91

Note that Nexans Hellas, as per its standard policy, does not make any portfolio investments and is not engaged in trading on the stock market.


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SIGNIFICANT TRANSACTIONS WITH RELATED PARTIES

In addition to the subsidiaries and associated companies, Management members and executives are considered to be related parties within the meaning of IAS 24. The transactions, income and expenses with related parties for the period 01.01.2016 to 31.12.2016 as well as the balances of their receivables and liabilities on 31.12.2016 are broken down in the table below.

Amounts in thousands Euro – Sales and Purchases in actual metal prices

Income (sales of goods) 01/01-

31/12/2016

Other affiliated parties 27,591

Total 27,591

Income (Sales of services)

Other affiliated parties 46

Total 46

Expenses (purchases of goods)


Total 33,094

Expenses (purchases of services)


Total 1,731

Financial expenses

Other affiliated parties 244

Total 244

Benefits to the Management

Fees for BoD members 226

Total 226

Closing balances that arise from sales-purchases of goods, services, loans.

Amounts in thousands Euro

Receivables from affiliated parties 31/12/2016


Payables to affiliated parties Other affiliated parties 2,722



INFORMATION UNDER ARTICLE 4(7) OF LAW 3556/2007

Detailed information on the issues under Article 4(7) of Law 3556/2007 is given below and includes, where necessary, the stipulated explanations to the Ordinary General Meeting of shareholders pursuant to paragraph 8 of the above article.

I. Structure of the company’s share capital

Prior to the aforementioned increase, the share capital of the company amounted to seven million six hundred sixty-five thousand six hundred twenty-five Euros (€7,665,625), was divided into six million one hundred thirty-two thousand five hundred (6,132,500) ordinary registered shares with voting rights and a nominal value of one Euro and twenty-five cents (€1.25) each.

Following the above increase which was completed on 24.02.2016, the company’s share capital amounts to twenty-eight million seven hundred forty-six thousand ninety-three Euros and seventy-five cents (€28,746,093.75) divided into twenty-two million nine hundred ninety-six thousand eight hundred seventy-five (22,996,875) ordinary registered shares with voting rights and a nominal value of €1.25 each.

All the above company shares are listed for trading on the Main Market of the Athens Stock Exchange. The rights and obligations of the company’s shareholders, as well as those of minority interest, are those stipulated in the Law and the company's articles of association. The liability of the company’s shareholders is limited to the nominal value of the shares they hold.

II. Restrictions on the transfer of company shares

The shares of the company are transferred as stipulated by Law on dematerialized shares listed on Athens Stock Exchange while the Articles of Association do not lay down any restrictions or obligations on their transfer.

III. Significant direct or indirect holdings within the meaning of Articles 9-11 of Law 3556/2007


Shareholder Percentage 1. Nexans Participations (France) 71.75 2. Joint Investment Account "DRAKAKIS SPYROS - AKTYPI ARGYRO - DRAKAKIS KONSTANTINOS - STEFANAKI MARIA"

7.16

3. HMG Globetrotter (France) 5.31


Shareholder Percentage 1. Nexans Participations (France) 88.57 2. HMG Globetrotter (France) 5.31

IV. Shares providing special audit rights

There are no shares of the company providing their holders with special audit rights.

V. Restrictions on voting right

The company's Articles of Association do not lay down any restrictions on the voting rights of its shareholders.

VI. Agreements of the company’s shareholders

The company has not been notified of any agree-ments between its shareholders that may entail restrictions on the transfer of its shares or on the exercise of the voting rights arising from its shares.

VII. Rules applying to the appointment and replacement of BoD members and amendment of the Articles of Association

The rules stipulated by the company’s Articles of Association as regards the appointment and replacement of members of the Board of Directors and the amendment thereof do not differ from the stipulations of Codified Law 2190/1920 as in force.


42

VIII. Competence of the BoD to issue new shares or purchase treasury stock

i. The competence of the Board of Directors to issue new shares is stipulated in Article 5 of the company’s Articles of Association and is identified with the stipulations of Article 13 of Codified Law 2190/20 as in force. No relevant competence is stipulated for certain members of the BoD only.

ii. The competence of the Board of Directors or certain members to purchase treasury stock is not provided for by the company's Articles of Association and therefore the relevant provisions of Article 16 et seq. of Codified Law 2190/20, as in force, apply thereto.

IX. Major agreement in case of change of the company's control following public offer

There is no important agreement that the company has concluded and may be put into effect, amended or expiring in case the control of the company changes following public offer.

X. Agreements with members of the Board of Directors or personnel of the company

There are no agreements concluded between the company and members of its Board of Directors or its personnel that stipulate the payment of indemnity especially in the case of resignation or dismissal without any well-founded reasons or termination of their tenure or employment due to public offer.

RESULTS - CONCLUSIONS

Ladies and Gentlemen shareholders,

We present to you the Financial Statements of Nexans Hellas S.A. for the financial year 2016. These Financial Statements have been drawn up in accordance with the International Financial Reporting Standards, as adopted by the European Union, pursuant to Regulation (EC) 1606/2002 of the European Parliament and the Council of the European Union as at 19 July 2002, which was published in the Official Journal of the European Communities (L 243) and the Regulations issued by the European Commission, as authorized by articles 3 and 6 of the said Regulation. In drawing up the Financial Statements, all the accrued income and expenses related to the business year have been taken into account.

The results of NEXANS HELLAS S.A. for the period ended on 31.12.2016 are as follows:

Finally, we wish to express our thanks to all our personnel for their outstanding cooperation. We also wish to thank our shareholders and our customers for their full and continued confidence in our company during these challenging times.

Athens, 24 April 2017 The Board of Directors NEXANS HELLAS S.A.

EUR Million 2016

* Sales 76

* Pre-tax profit 1.72

* Net profit 1.37



RAISED FUNDS APPROPRIATION REPORT NEXANS HELLAS Societe Anonyme

Companies General Commercial Registry No.: 000282101000 Registered office: 107, 15, Messoghion Avenue, Athens

APPROPRIATION OF FUNDS RAISED FROM THE COMPANY'S SHARE CAPITAL INCREASE THROUGH THE ISSUANCE OF NEW ORDINARY REGISTERED SHARES WITH VOTING RIGHTS AND PAYMENT OF CASH IN FAVOUR OF THE OLD SHAREHOLDERS BASED ON DECISION DATED 29.5.2015 OF THE ORDINARY GENERAL MEETING OF THE COMPANY'S SHAREHOLDERS WHICH WAS ADJOURNED AND FURTHER COMPLETED ITS OPERATIONS ON 26.6.2015.

It is notified that pursuant to article 4.1.2 of the ATHEX Rulebook and decisions No. 25/17.7.2008 of the ATHEX BoD and 7/448/11.10.2007 of the Hellenic Capital Market Commission’s Board of Directors, the company’s share capital was increased through the issue of 16,864,375 new dematerialized ordinary registered shares with voting rights and total funds of €21,080,468.75 were raised. Issuance expenses amounted to €572,412.78 and were fully subscribed by the funds raised from the above increase. Therefore, following deduction of the issuance expenses, the total amount raised amounted to €20,508,055.97. The share capital increase was certified by the company’s Board of Directors on 24.2.2016. The ATHEX Board of Directors approved the listing of these 16,864,375 new shares on ATHEX on 2.3.2016. Trading of the new shares on the ATHEX was launched on 4.3.2016.

APPROPRIATION OF FUNDS RAISED FROM THE COMPANY'S SHARE CAPITAL INCREASE (Amounts in €)

Description of use of funds raised Amounts in €

Total amount of share capital increase 21,080,468.75

Repayment of interest-bearing loans from affiliated company "Nexans Services" (principal plus interest) (14,220,477.98)

Repayment of interest-bearing loans from domestic bank (principal plus interest) (4,533,698.01)

Issuance expenses (572,412.78)

Working capital requirements (1,698,832.83)

Funds appropriated until 31.12.2016 (21,025,421.60)

Balance of funds to be appropriated on 31.12.2016 55,047.15

Following the foregoing, on 4.5.2016 the Board of Directors decided, in accordance with article 4.1.3.9 of the ATHEX Rulebook and Decision No. 25/17.7.2008 of the ATHEX Board of Directors to change the usage of the balance of the funds raised from the share capital increase which balance had remained non-distributed as per the foregoing, so as to be used as working capital. The above decision of the Board of Directors was approved by the Ordinary General Meeting of the company's shareholders which was held on 10 June 2016.

Athens, 25.04.2017

The Vice Chairman of the BoD and Managing Director

The Chief Financial Officer

STEPHANE ILIADES ATHANASIOS GAVRIIL

ID No. Σ 135415/1999, Police Precinct of VOULIAGMENI

ID No. ΑΚ 488502/12, Police Precinct of LAMIA

44

INDEPENDENT AUDITOR’S REPORT TO THE BOARD OF DIRECTORS OF “NEXANS HELLAS SA”

Report of actual findings in connection with the “TABLE OF USE OF FUNDS RAISED”

In accordance with the mandate we received from the Board of Directors of "NEXANS HELLAS SA" (hereinafter the "company"), we performed the agreed-upon procedures described below in the context of the provisions of the regulatory framework of the Athens Stock Exchange and the relevant legislative framework of the Hellenic Capital Markets Commission, related to the "TABLE OF USE OF FUNDS RAISED FROM THE INCREASE OF SHARE CAPITAL OF NEXANS HELLAS SA" conducted in 2016. The company's Management is responsible for the preparation of the said table. We undertook this engage-ment in accordance with the “International Standard on Related Services 4400 – Engage-ments to Perform Agreed-Upon Procedures Regarding Financial Information”. Our responsibility is to perform the following agreed-upon procedures and report our findings.

Procedures:

1. We compared the amounts referred to as funds used in the accompanying “TABLE OF USE OF FUNDS RAISED FROM THE INCREASE IN SHARE CAPITAL OF NEXANS HELLAS SA” with the relevant amounts recorded in the company’s books and records in the respective timeframe.

2. We examined the content of the Table and its consistency with what is referred to in the relevant Prospectus issued by the company for this purpose and the relevant decisions and announcements by those charged with governance.

Findings:

a) The amounts which appear, as funds used per category, in the accompanied “TABLE OF USE OF FUNDS RAISED” are derived from the company’s books and records in the relevant timeframe.

b) The content of the Table includes the information which is at minimum required for this purpose from the regulatory framework of

the Athens Stock Exchange and the relevant legal framework of the Hellenic Capital Markets Commission and is consistent with what is referred to in the respective Prospectus and the relevant decisions and announcements of those charged with governance. Because the above procedures do not constitute either an audit or a review made in accordance with International Standards on Auditing or International Standards on Review Engageme-nts, we do not express any assurance on the report beyond what we have referred to above. Had we performed additional procedures or had we performed an audit or review, other matters might have come to our attention that would have been reported to you, in addition to those reported above. Our report is solely intended for the purpose set forth herein and is addressed exclusively to the Board of Directors of the company, in order to fulfill its responsibilities in accordance with the legal framework of the Athens Stock Exchange and the relevant regulatory framework of the Hellenic Capital Markets Commission. This report is not to be used for any other purpose, since it is limited to what is referred to above and does not extend to the financial statements prepared by the company for the period from 01.01.2016 to 31.12.2016, for which we have issued a separate audit report, dated 25 April 2017.

Athens, 25 April 2017

The Certified Auditor Dimitris Sourbis

Reg. No. SOEL 16891 PricewaterhouseCoopers SA

Certified Auditors - Accountants 268 Kifissias Avenue, 152 32 Halandri

SOEL Reg. No 113


Declaration of Corporate governance

46

I. PRINCIPLES OF CORPORATE GOVERNANCE

With the present declaration, the company, in accordance with article 43a §3 case d of Codified Law 2190/20 announces that it complies with the Corporate Governance Code for the listed companies of the Hellenic Federation of Enterprises (SEV) as available on SEV’s web page www.sev.org.gr.

Practices of Corporate Governance which are stipulated in the Code of Corporate Governance of SEV, on top of the provisions of the Law, as well as potential deviations from the same code, are described here below and are accordingly explained.

ΙΙ. MAIN CHARACTERISTICS OF INTERNAL CONTROL AND RISK MANAGEMENT SYSTEMS

The company has established processes and policy, as described in the internal regulation of the company uploaded on its website www.nexans.gr, which aim at the application of internal checks, in order to ensure the correct presentation of financial position and performance via the annual report and the interim financial reports, as regards:

Identification and evaluation of the existing risks relating to the reliability of the financial statements.

Planning and follow-up of the financial figures.

Fraud prevention and revelation.

Procedures of payments, collections, insurance of company’s assets etc.

Procedures of financial closing and compilation of financial statements.

Preservation of integrity and accuracy of the financial data supplied by the company’s information systems.

Especially for the risk management, a detailed report is included in Section 5 (Risk Manage-ment) in this report of the Board of Directors.

A system of double (joint) signature for the legal delegation of the company has been establi-shed by the company in most cases, to secure the safety of the internal control process and the prevention of potential irregularities.

ΙΙΙ. OPERATION AND BASIC POWERS OF THE GENERAL MEETING OF SHAREHOLDERS AND RIGHTS OF THE COMPANY’S SHAREHOLDERS

A. Operation and basic powers of the General Meeting of shareholders

The operation of the shareholders’ General Meeting, its related powers, the shareholders rights and the way they practice it, are described in detail in articles 21 to 31 (inclusive) of the company’s articles of association, as shown on its web page www.nexans.gr.


47– Nexans Hellas / 2016 Annual Report & CSR

Β. Shareholders’ rights

The rights of the shareholders are also mentioned in article 9 of the above Articles of Association and especially the minority shareholders rights are detailed in article 33 of the above Articles of Association.

ΙV. COMPOSITION AND OPERATION OF THE BOARD OF DIRECTORS AND OTHER MANAGERIAL, ADMINISTRATIVE OR SUPERVISORY BODIES OR COMMITTEES

Α. Composition and operation of the Board of Directors

The composition and the way the company’s Board of Directors operates are described in detail in articles 10 to 20 of its Articles of Association as well as in the internal regulation of the company, which are available on its web page www.nexans.gr

During the Extraordinary General Meeting of the company’s shareholders that took place on 06.10.2015 a 6-member Board of Directors was elected for a two-year term of office, namely until a new Board of Directors is elected by the Ordinary General Meeting of shareholders which will be convened during the first half of 2017. This Board consists of the following members in the capacities below:

1) Christof Josef Barklage, non-independent member.

2) Stephane Iliades, non-independent member of the BoD

3) Henrik Desfontaines, non-independent member of the BoD

4) George Chryssomallis, independent member of the BoD

5) Demetrios Politis, independent member of the BoD and

6) Patrick Noonan, non-independent member of the BoD

By way of decision of the Board of Directors taken on the same day (06.10.2015), the Board of Directors was officially established as follows:

1) Christof Josef Barklage, executive member, Chairman of the Board of Directors & Chief Executive Officer

2) Stephane Iliades, executive member of the BoD

3) Henrik Desfontaines, non-executive member of the BoD & Vice-chairman of the BoD

4) George Chryssomallis, independent, non-executive member of the BoD

5) Demetrios Politis, independent, non-executive member of the BoD and

6) Patrick Noonan, non-executive member of the BoD.

Thereafter and specifically on 30.6.2016, Mr. Demetrios Politis submitted his resignation from the BoD and thus on the same day (Minutes No. 896/30.6.2016) the BoD elected Mr. Ioannis Trikardos as independent, non-executive member of the BoD as Mr. Politis' replacement for the remaining term of office in accordance with article 13(1) of the Articles of Association and article 18(7) of Law 2190/ 1920. By way of the same decision, the Board of Directors was re-established as follows:

1) Christof Josef Barklage, executive member, Chairman of the BoD & Chief Executive Officer

2) Stephane Iliades, executive member, Vice-Chairman of the BoD

3) Henrik Desfontaines, non-executive member of the BoD



48

5) Ioannis Trikardos, independent, non-executive member of the BoD and

6) Patrick Noonan, non-executive member of the BoD.

Thereafter, following resignation of Mr. Christof Josef Barklage with effect as of 31.3.2017, the BoD elected (Minutes No. 904/31.3.2017) Mr. Kamil Beffa as non-executive member of the BoD as Mr. Barklage's replacement for the remaining term of office in accordance with article 13(1) of the Articles of Association and article 18(7) of Law 2190/1920. By way of the same decision, the Board of Directors was re-established as follows:

1) Patrick Noonan, non-executive member, Chairman of the BoD

2) Stephane Iliades, executive member, Vice-Chairman of the BoD & Chief Executive Officer

3) Henrik Desfontaines, non-executive member of the BoD


5) Ioannis Trikardos, independent, non-executive member of the BoD and

6) Kamil Beffa, non-executive member of the BoD.

B. Independence of the members of the Board of Directors

The two independent members of the Board of Directors meet all the requirements of the Code relating to independence. One of the independent members has served the Board of Directors for more than 12 years, but given the integrity and the professionalism of this particular person, the company considers that there is no type of dependence.

C. Meetings of the Board of Directors

During the period 01.01–31.12.2016, the Board of Directors convened in 16 meetings, in 12 of which all the above members of the BoD participated either in person or legally represented, while 1 or 2 members were absent from the other 4 meetings.

D. Committees of the Board of Directors

During the Ordinary General Meeting of the company’s shareholders on 29 May 2015 which was adjourned and resumed its operations on 26 June 2015, Messieurs Henrik Desfontaines, George Chryssomallis and Demetrios Politis were elected as members of the Audit Committee following voting. This line-up was also kept after the Extraordinary General Meeting that took place on 06.10.2015.

During the Ordinary General Meeting of the company’s shareholders on 10.06.2015, Messieurs Henrik Desfontaines, George Chryssomallis and Patrick Noonan were elected as members of the Audit Committee following voting.

Throughout 2016, an Audit Committee operated within the company in accordance with the internal regulation and consisted of the aforementioned members.

During the period 01.01 – 31.12.2016, the Audit Committee convened in ordinary meetings, in which all the above members participated in person and worked on the following subjects: i) follow-up of the processing of financial reporting on fiscal year 2016; ii) follow-up of the smooth operation of the internal audit and risk management systems, as well as follow-up of the proper operation of the company’s internal auditor, iii) follow-up of the



progress of mandatory control of the relevant financial statements by the Statutory Auditor Demetrios Sourbis (RN SOEL 16891) and deputy auditor Despina Marinou (RN SOEL 17681); and iv) review and follow-up of items relevant to the existence and retention of the objectivity and independence of the above Statutory Auditor and of the auditing firm PRICEWATERHOUSECOOPERS SA, particularly in relation to other services provided by them to the company.

In addition, the proposal of the company’s BoD to the General Meeting for the appointment of the Auditors and the relevant Auditing Firm was made following a relevant proposal by the Audit Committee.

E. Evaluation and fees of the members of the Board of Directors

During 2016, the following members of the Board of Directors received remuneration: St. Iliades received remuneration for his services as Chief Executive Officer and Mr. George Chryssomallis, non-executive member of the BoD, received remuneration for his services as a member of the BoD. The evaluation of the members of the Board of Directors and the determination of the Chief Executive Officer's remuneration is effected by the relevant competent committees of Nexans Group.

Furthermore the nominations for the members of the Board of Directors are made to the Ordinary General Meeting of the company’s shareholders by the corresponding committee of Nexans Group, in the capacity of Nexans Participations SA as the company’s majority shareholder.

F. Behaviour of the members of the Management and of company executives

All the company’s management members and executives must strictly adhere to the Nexans Code of Ethics and Business Conduct, as shown on its web page www.nexans.gr.

This Code provides the company’s personnel with the right procedure to express, with discretion, any concerns over eventual irregularities relating to financial information or other subjects relating to the company’s operation.

The company implemented an Action Plan of the Compliance Programme for 2016, which included among others the following actions:

All newly-hired employees until November 2016, i.e. 26 persons, received Nexans Code of Ethics and Business Conduct, attended an hourly training course regarding the code and signed the compliance certificate.

All executives, i.e. 31 persons, signed the annual compliance certificate.

30 persons enrolled and completed training in late November, namely 100%.

In November 2016, 2 new employees of the Commercial Department, i.e. 100%, had enrolled and completed the relevant training.

50

Financial Statements

2016 Financial Statements

NEXANS HELLAS S.A.

S.A. REGISTER No: 2176/06/B/86/06 Registered offices: 15, Messoghion Avenue, 11526 Athens

DATA AND INFORMATION ON THE YEAR from 1 January to 31 December 2016 (published pursuant to Article 135 of Law 2190/1920 on entities preparing individual and

consolidated annual financial statements as per IAS) (The amounts below are expressed in thousand EUR)


31.12.2016 31.12.2015ASSETSSelf-used tangible assets 17,593 16,578Intangible assets 1 25Other non-current assets 80 164Deferred income taxes 960 1,035Stocks 10,531 9,228Receivables from customers 14,616 19,496Other current assets 11,349 5,602

TOTAL ASSETS 55,130 52,128

LIABILITIESShare Capital 28,746 7,666Other equity items of Company´s shareholders 12,850 12,750

Net worth of Company´s shareholders (c) 41,596 20,416

Provisions/Other long-terms liabilities 2,186 1,246Short-term liabilities 0 15,694Other short-term liabilities 11,348 14,772

Total liabilities (d) 13,534 31,712

TOTAL NET WORTH & LIABILITIES (c)+(d) 55,130 52,128

1.01- 31.12.2016 1.01- 31.12.2015Turnover 75,982 71,768Gross Profit / (Loss) 7,060 5,427

Profit / (Loss) before tax, financial and intvestment results 2,218 292

Pre-tax Profits / (Loss) 1,721 (940)Profit / (Loss) after taxes (A) 1,376 (715)Other costs after taxes (B) (703) (127)Total costs after taxes (A)+(B) 673 (842)

Basic post-tax earnings per share (in €) 0.0599 (0.1166)

Profit / (Loss) before tax, financial, investment results and depreciation 3,556 1,529

31.12.2016 31.12.2015Equity at the beginning of period (01.01.2016 and 01.01.2015 respectively) 20,416 21,258Profit / (Loss) of period, after taxes 673 (842)Share capital increase / (decrease) 20,507 0

Equity at the end of period (31.12.2016 and 31.12.2015 respectively) 41,596 20,416

BALANCE SHEET

INCOME STATEMENT

STATEMENT OF CHANGES IN EQUITY

52

1.01- 31.12.2016 1.01- 31.12.2015Operating activitiesPre-tax Profits / Loss 1,721 (940)Plus / Less adjustments for:Depreciation 1,338 1,237Provisions 45 801Foreign exchange differences 33 (1)Interest charges and related expenses 370 1,144(Profit)/Loss from derivatives valuation 116 (132)

Plus/ less adjustments for changes in working capital accounts or accounts relating to operating activities:Reduction / (Increase) in stocks (1,239) 998Reduction / (Increase) in receivables 5,302 1,897Reduction / (Increase) in liabilities (save banks) (3,443) (420)

Less:

Interest charges and paid-up related expenses (370) (1,169)Indemnities paid (203) (218)

Total input/(output) from operating activities (a) 3,670 3,197

Investment activitiesPurchase of tangible and intangible fixed assets (2,329) (1,362)Total input/(output) from investment activities (b) (2,329) (1,362)

Financial activitiesProceeds from Share capital increase 20,507 0Loan repayment (16,694) (2,710)Dividends paid 0 (3)

Total input / (output) from financial activities ( c ) 4,813 (2,713)

Net increase / (reduction) in cash on hand and cash equivalents for period (a)+(b)+( c )

6,154 (878)

Cash foreign exchange differences (30) 39

Cash on hand and cash equivalents at beginning of period 3,971 4,810

Cash on hand and cash equivalents at expiry of period 10,095 3,971

CASH FLOW STATEMENT

Full analysis on the company’s 2016 Financial Statements is shown on the Annual Financial Report of the period January 1st until December 31st 2016



Additional Information

1. The tax audit of the company for the fiscal years 2008-10 was completed in March 2017. The company has paid € 195, whereas a provision was raised equal to € 220 in order to meet any eventual additional tax liabilities.

2. On 31.12.2016 the company's personnel numbered 223 persons (212 persons on 31.12.2015).

3. Cumulative income and expenses from beginning of the accounting period and balances of receivables and payables of the company at the end of the current period, which have arisen from its transactions with affiliated parties as per IAS 24, are as follows:

(Amounts in thousands €)

4. i) The company is involved (in the capacity of both defendant and plaintiff) in various court cases and arbitration proceedings in the course of its ordinary operation. The Management and the legal advisors estimate that the contingent liabilities from pending cases will amount to € 100 for which the relevant provision has been raised.

ii) The provisions on 31.12.2016 are as follows: (Amounts in thousands €)

5. The Financial Statements of the company are consolidated by applying the full consolidation method in the consolidated Financial Statements of Nexans S.A. Group, which holds 88.57% of the company's Share Capital, via Nexans Participations SA. Nexans S.A. has its registered office in Paris, France.


CHAIRMAN OF THE BoD

PATRICK NOONAN

VICE-CHAIRMAN OF THE BoD & MANAGING DIRECTOR

STEPHANE ILIADES

CHIEF FINANCIAL OFFICER

ATHANASIOS GAVRIIL

i) Income: 27,637ii) Expenses: 35,069iii) Receivables from associated companies: 5,000iv) Liabilities to associated companies: 2,722

v) Fees paid to Managers as members of the BoD: 226

- Restructuring expenses: 15 - Contested disputes & disputes under arbitration: 100

625 - Other provisions:


54

Independent Auditor’s Report to the Shareholders of “Nexans Hellas SA” Report on the Audit of the Financial Statements

We have audited the accompanying financial statements of Nexans Hellas SA which comprise the statement of financial position as of 31 December 2016 and the statement of comprehensive income, statement of changes in equity and cash flow statement for the year then ended and a summary of significant accounting policies and other explanatory information.

Management’s Responsibility for the Financial Statements

Management is responsible for the preparation and fair presentation of these financial statements in accordance with International Financial Reporting Standards, as adopted by the European Union, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.

Auditor’s Responsibility

Our responsibility is to express an opinion on these financial statements based on our audit. We conducted our audit in accordance with International Standards on Auditing which have been transposed into Greek Law (GG/B’/2848/23.10.2012). Those standards require that we comply with ethical requirements and plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement.

An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor's judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the entity's preparation and fair presentation of the financial statements in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity's internal control. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates made by management, as well as evaluating the overall presentation of the financial statements.

We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.

Opinion

In our opinion, the financial statements present fairly, in all material respects, the financial position of the Nexans Hellas SA as of December 31, 2016, and their financial performance and cash flows for the year then ended in accordance with International Financial Reporting Standards, as adopted by the European Union.

Report on Other Legal and Regulatory Requirements

Taking into consideration, that management is responsible for the preparation of the Board of Directors’ report and Corporate Governance Statement that is included to this report according to provisions of paragraph 5 article 2 of Law 4336/ 2015 (part B), we note the following:

a) In the Board of Directors’ Report is included the Corporate Governance Statement that contains the information that is required by article 43bb of Codified Law 2190/1920.

b) In our opinion, the Board of Directors’ report has been prepared in accordance with the legal requirements of articles 43a and 107A and paragraph 1 (c and d) of article 43bb of the Codified Law 2190/1920 and the content of the Board of Directors’ report is consistent with the accompanying financial statements for the year ended 31 December 2016.

c) Based on the knowledge we obtained from our audit for the company “Nexans Hellas SA” and its environment, we have not identified any material misstatement to the Board of Directors report.


The Certified Auditor

Dimitris Sourbis Reg. No. SOEL 16891

PricewaterhouseCoopers SA Certified Auditors - Accountants

268 Kifissias Avenue, 152 32 Halandri SOEL Reg. No 113



Notes to the Financial Statement as at December 31, 2016

ACTIVITIES

The company is involved in the manufacturing of all types of cables and more specifically power cables of low, medium and high voltage, cables for telecommunication, paper or plastic, as well as bare copper conductors, aluminum conductors and aluminum alloys. Also produces fiber optic cables, terrestrial and submarine.

ACCOUNTING POLICIES

The accounting policies used in the preparation and presentation of the annual financial statements are in full compliance with the International Financial Reporting Standards and IFRIC interpretations of the International Financial Reporting Standards as issued by the International Accounting Standards Board (IASB) and adopted by the European Union. The Financial Statements have been posted in the company’s website, www.nexans.gr.

The accounting principles adopted in the preparation of the attached Financial Statements are described below. These policies have been consistently applied to all years presented.

1. Translation of foreign currency transactions

Foreign currency transactions are translated in Euro at the rate of exchange applicable on the transaction date. At year end, foreign currency receivables and payables are translated at the rate of Euro – Foreign Currency prevailing on that date. The resulting realized exchange differences are recorded in the profit and loss account.

2. Fixed assets

Tangible fixed assets are designated at acquisition cost less accumulated depreciation and any provisions for impairment, excluding land, which is presented at acquisition value minus any impairments.

3. Accounts receivables

Receivables are shown at their net realizable value.

4. Inventories

Inventories are measured at the lower of cost and net realizable value. The cost of raw materials and finished goods is fixed on the basis of weighted average cost formula.

5. Accrued income / accrued liabilities, prepayments, deferred income

Provision has been made for relative costs, expenses and income for the stated period.

6. Retirements and staff leaving obligations

This is calculated on the basis of amounts accruing under legal and contractual obligations.

7. Reserves and provisions

All known liabilities have been provided for on a prudent basis as required by Greek legislation and the International Accounting Standards


56

Nexans Code of Ethics and Business Conduct



The Code of Ethics and Business Conduct is distributed to all employees when they join the Group and all of the Group’s stakeholders are informed of its contents. It sets out the values, principles of behaviour and rules of conduct which Group executives and more generally all managers of the Group’s business units and subsidiaries are responsible for applying and implementing. The application of the Code is one of the issues verified in the regular reviews carried out by the Internal Audit Department. The Code establishes the principles that the Group’s employees must adhere to in their professional activities. It forms part of the Corporate Social Responsibility programme, the reinforcement of which led the Board of Directors adhere to the United Nations Global Compact on November 25, 2008. The Code has been translated into 16 languages and may be viewed on the Group’s website (www.nexans.com) or on the Group or country intranets.

The Code of Ethics and Business Conduct sets out the rules and ethical values that the Group’s employees must comply with in their professional activities. Training ensures everyone understands the issues at stake.

The purpose of the Ethics Compliance Programme is to define management actions to prevent, detect and respond to any violations of ethic based laws and rules. Each year a specific action plan is defined and deployed throughout the Group by the management (and namely entails the signing of compliance certificates,

trainings,…). Commercial personnel including purchase teams are made particularly aware of competition rules. The implementation and carrying-out by management of the annual action plan of the Ethics Compliance Programme are audited each year by the Internal Audit.

THE CODE OF ETHICS AND BUSINESS CONDUCT IS:

Presented to each employee on his or her arrival

Available in 16 languages

Accessible on the Internet and the company intranets

Promoted and explained by management

Appointment of a Group Ethics Correspondent

A NEW “ETHICS AND COMPLIANCE” INTRANET SITE

Targeting all employees, this site centralizes the Group’s codes, charters, procedures and recommendations in these areas, the answers to the questions most frequently asked by customers and stakeholders, the available training courses and the best practices that have been identified.

Key principles of our Company’s Environmental Policy:

1. Compliance with environmental laws.

We implement applicable environmental laws to our company’s operation.

2. Responsible operation.

We are aware of the effects of our activity on the environment and we take steps to eliminate such effects.

3. Cooperation with certified companies.

We see to it that the companies with which we cooperate have the relevant licences for waste management and comply with applicable laws.

4. Continuous improvement.

We constantly improve our environmental performance and minimize any environmental problems.

5. Adoption of best practices.

We develop the best practices of the Group regarding the management of the environment and the sustainable growth.

6. Transparency.

We provide all data to interested Groups and we are open to a dialogue with them.

7. Training.

We constantly train our employees in the protection of the environment aiming at raising awareness and their active participation in environmental management issues.

8. Environmental management system.

We apply an environmental management system which aims directly at ensuring that the applied production processes do not entail any pollution risk against the environment.

58


Corporate Social responsibility

Nexans brings Energy to life! In a slow-growth and difficult economic environment, our world is full of challenges and opportunities: growing demographics, fast urbanization and data exchange explosion require the safest, most reliable and adapted cabling solutions.

At Nexans, committed actor has for vocation to transport the energy and data essential to the world’s current and future development is our sense of purpose. The products and solutions we design, manufacture and deliver everyday benefit the world, people and the economy.

Nexans, integrated the CSR into its strategic thinking what is translated by a dedicated governance.

Primarily, the CSR Committee chaired by Arnaud Poupart-Lafarge, Chief Executive Officer of the Group, defines CSR policies and assesses the various CSR initiatives. Conscious of the challenges we face in our industry and based on the materiality matrix that integrates both stakeholder needs and the importance of CSR issues for our business, the CSR Committee has set 11 CSR ambitions that fall into four areas of priority: Employees, Environment, Customers and Ethics & Solidarity.

The CSR Committee, mostly made up of members of the Management Board, has two specialized committees which ensure that all CSR-related topics and ambitions are taken into account in the Group’s operations. These specialized committees, made up of various working groups which are tasked with steering and coordinating the action plans in place in the following main fields:

Governance and Social Affairs Committee: Governance, ethics and business conduct, CSR risk management, labor relations, talent management, internal opinion survey, the Nexans Foundation, CSR reporting and CSR communication.

Environment and Products Committee: Workplace safety, on-site environmental management and audits, recycling and waste management, soil and water pollution, energy efficiency, sustainable purchasing, new product innovation and development, life cycle assessment and eco-declarations, sustainable products and solutions, REACh regulations and chemical substances.

Twice a year, the Strategy and Sustainable Development Committee of the Board of Directors reviews how the Group takes into account sustainable development issues in defining its strategy.

The Group has published a CSR and sustainable development brochure which is available in English and French on the Group’s website (www.nexans.com/RSE).

Independent data verification

The presence and accuracy of the environment-tal, human resources and societal data disclosed in this report is in accordance with Article R.225-105-2 of the French Commercial Code.

60

Corporate Social Responsibility


We aim for the highest workplace safety standards.

We provide our employees with the means to develop their skills.

We encourage their commitment and recognize their contribution.

Develop and share skills

360,090 hours of training in the Group

60% of the employees followed one or more training courses

23 hours of training per employee in 2016

Think safe, Act safe, Be safe

Workplace accident frequency rate 1.8 (Cable Activity) falling by 13.2%

Deployment of the 15 « Safety golden rules »

More than 26,000 employees involved in our worldwide Safety Day in 154 Group sites

29% of training time dedicated to safety

40% of our manufacturing sites OHSAS

18001 certified

Encourage engagement

7th employee share ownership plan proposed to 17,000 employees across 23 countries

75% of participation to the internal opinion survey (13,053 employees requested in 2016 vs 3,759 in 2014)

We continuously improve to reduce our environmental footprint.

We optimize the use of natural resources in our activities and in our products.

Consolidate our rigorous environmental management

94% of our industrial sites covered, a minima, by an environmental certification (mostly ISO 14 001)

2.7 million euros worth of environment-related investments, 36% being focused on making equipment and production lines more energy efficient

Minimize our environmental impact

0 major incident reported in 2016 concerning discharges into water, soil and air

100% of our non-ferrous metal waste recycled

22,070 tons of copper waste reused in the continuous casting operations in Montreal (Canada) and Lens (France)

13,355 tons of cable waste recycled

More than 75% of the cooling water recycled in 83% of our sites

Corporate Social Responsibility

We serve our customers on four rapidly growing markets.

We rely on our capacity to innovate, as one of the cable industry’s leaders, to provide safe, reliable, economic and sustainable solutions

Being a major player in energy transition Several major contracts signed for renewable energy, such as NordLink, Scottish Power, Hywind

1 brochure focusing on “How Nexans is helping to drive the energy transition”

More economical and safer products

More than 1,000 of our products come with a PEPecopassport® (environmental profile via a life cycle analysis)

The EcoCalculator, 1 platform helping to select the most appropriate cable combining energy efficiency, reduced CO2 emissions and human safety

ALSECURE ® Premium, a range dedicated to the protection of people and goods: halogen-free, these fire-resistant cables operate up to 1,000 V at more than 1,000°C

Innovating to promote a circular economy

2 ecodesign awards for the new cable EDRMAX by NexansTM: • the ecodesign award from the [AvniR]

platform • the “Ecoproducts for sustainable

development” award from the French Ministry of Ecology and Sustainable Development and the Environment and Energy Management Agency (ADEME)

Thanks to innovation, EDRMAX by NexansTM

means: -12% of the climate change impact over its life cycle (- 254 tons of CO2) -2,312 MWh over the life of the cable thanks to reduction of energy losses

We support the United Nations Global Compact and commit to contributing to a global citizen economy and to encouraging our suppliers and partners to do likewise.

We utilize our skills and our products to improve access to energy for the underprivileged.

Ethics and business conduct

1 Code of Ethics and Business Conduct, available in 16 languages, to support employees in their professional activities

1 Compliance Program Officer for the deployment of actions to prevent, detect and deal with violations of laws and ethical rules

Each year, 2 follow-up reports of the Ethics Compliance Program sent from the operational division directors and country directors to the Group’s CEO

1 award, the ETHIC Intelligence certificate, demonstrating the quality of the anti-corruption prevention policy featuring in our Ethics Compliance Program.

Solidarity and sponsorship

Annual budget of €300,000 of the Nexans Foundation

Since 2013: • 48 projects supported in 24 countries in

partnership with 29 organizations • Nearly 600,000 beneficiaries of energy access

64


SOLIDARITY AND SPONSORSHIP

Nexans Hellas actively contributes to the local

communities where it operates either by making

donations to charities, or by donating cables for

public benefit causes to the local community.

In addition, our company contributes willingly

to cultural events, while also receives and

guides in its premises school classes of all

education levels and special classes of schools

that train young people to become electrical

professionals.

Our aim is to prepare them for the future and

help them learn about the business world.

The company contributes to cultural, sports and

other events of the local authorities.

Also important is the contribution of the

company to the community mainly when there

is an emergency to provide cable service to the

municipalities and communities so that they are

able to maintain and improve their

infrastructure.

CREDITS Photographs and computer graphics: @ Nexans - © Nexans/Dolidon - M. Labelle - J. Wachala - A. Sperber - C. James - P. Couette - R. Demaret -

K. Wailan - © Nexans/ZanArtphoto - © 2003 Thinkstock LLC - © Dunkerque LNG/Happy Day - © Getty Images/www.jethuynh.com -

© Fotolia/A. Vlassyuk - © Hyundai Heavy Industries - @ ScottishPower - @ Nexans/Ed Alcock - @ Getty images/Shingo Tamura

Hellas’s leaflet edited by : E. Chelidonopoulou

Every day, our energy and data cables make it possible for millions of people to take action, make things, get around, stay informed, communicate, have fun and stay healthy.

Our mission: to design, produce and market cables and cabling systems that transport the electricity and data we need in our daily lives and societies safely, reliably, efficiently and sustainably.

On the leading edge of our industry for over a century, we provide solutions for the most complex applications in the most demanding environments. Through our combination of technological leadership, global expertise and local presence, we can effectively partner our customers’ development projects, offering them the best conditions for achieving their objectives while respecting the highest levels of safety and taking the greatest possible care of people and the environment.

nexans hellas s.a. · registration no 2176/06/b/86/06 – vat no el 094039860 general commercial...

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