NUROSOFT : 2022 Annual Financial Report (en)

ANNUAL

FINANCIAL REPORT

For the year

ended 31 December 2022

NEUROSOFT S.A. Annual Financial Report for the year ended 31 December 2022

CONTENTS OF ANNUAL FINANCIAL REPORT

STATEMENTS OF MEMBERS OF THE BOARD OF DIRECTORS	................................ 3
ANNUAL REPORT OF THE BOARD OF DIRECTORS	4
INDEPENDENT AUDITOR'S REPORT	32
ANNUAL CONSOLIDATED FINANCIAL STATEMENTS	37

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NEUROSOFT S.A.

Statements of Members of the Board of Directors

STATEMENTS OF MEMBERS OF THE BOARD OF DIRECTORS

The following statements are given by the following Members of the Board of Directors of the Company:

1. Anastasia Verra, Chairman of the BoD
2. Epameinondas Paschalidis, CEO

The undersigned, in our above-mentioned capacity, as specifically appointed by the Board of Directors of the societe anonyme company under the name "Neurosoft Software Production Societe Anonyme" (hereinafter referred to as the "Company" or as "Neurosoft"), we state, and we assert that to the best of our knowledge:

1. The annual financial statements (Consolidated and Separate) of the company under the name "Neurosoft Software Production Societe Anonyme" for the year from 1 January 2022 to 31 December 2022, which have been prepared in accordance with the applicable International Financial Reporting Standards, as adopted by the European Union, provide a true and fair view of the assets and liabilities, the owners' equity and the results of the Company and the Group; and
2. The enclosed annual Report of the Board of Directors of the Company provides a true and fair view of the evolution, performance and the financial position of the Company and the Group, including a description of the main risks and uncertainties they face and relevant information.

Iraklio, 11 April 2023

Anastasia Verra

Epameinondas Paschalidis

Chairman of the BOD

CEO of the Company

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NEUROSOFT S.A. Annual Report of the Board of Directors for the year from January 1, 2022 to December 31, 2022 (Amounts in Euro, unless stated otherwise)

ANNUAL REPORT OF THE BOARD OF DIRECTORS

of «Neurosoft S.A.»

On the Consolidated and Separate Financial Statements

for the financial year from 1 January 2022 to 31 December 2022

This Annual Report of the Board of Directors (hereinafter referred for brevity as the "Report"), refers to the fiscal year 2022 (01.01.2022-31.12.2022). It has been prepared in accordance with the provisions of Articles 150-154 of Law 4548/2018 and article 4 of Law 3556/2007 and contains in a concise but meaningful, substantive and comprehensive manner all relevant information required by law to provide substantial and detailed information about the activity, during this period, of the company under the name «NEUROSOFT SOFTWARE PRODUCTION SOCIETE ANONYME» (hereafter referred to as the "Company" or «NEUROSOFT») and the NEUROSOFT Group of companies (hereinafter referred to as the "Group"), which apart from the Company include the following affiliated companies:

1. «Neurosoft Cyprus Ltd.», headquartered in Cyprus, in which the Company holds a stake of 100% of its share capital;
2. «Neurosoft Romania Srl headquartered in Romania, in which the Company holds a stake of 95% indirectly through its subsidiary Neurosoft Cyprus Ltd and in which Mr. Paschalidis holds the remaining 5%;

The sections of this Report and the contents thereof, are as follows:

SECTION A

Significant events that occurred during the year 2022

The significant events that occurred during the year 2022 (01.01.2022-31.12.2022), as well as any impact on the annual financial statements are summarized as follows:

1. Post - Covid Era

The highly improved performance observed in 2022, in terms of Revenue and Profit before interest, tax, depreciation and amortization (EBITDA) is attributed to the lifting of the restrictive measures against the coronavirus (COVID-19), the normalization of the retail business and the increased demand in solutions and services that promote the digital transformation. The technological and operational excellence of the Group in its field of expertise allowed Neurosoft Group to pivot fast and to respond to the crisis and laid already the groundwork for FY 2023.

2. OPAP ARENA Project

In January 2022 the Group has been awarded with a contract for the supply, installation, commissioning and maintenance of main operational EMC systems of the OPAP Arena Football Stadium. The contract value was approximately € 3 million and the Group was pleased to be part of the most emblematic construction sports project of the last decade. The new stadium was delivered in September 2022 and the project was fully completed during FY 2022.

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NEUROSOFT S.A. Annual Report of the Board of Directors for the year from January 1, 2022 to December 31, 2022 (Amounts in Euro, unless stated otherwise)

3. Enterprise Link Projects

The clientele basis of Enterprise Link ("EL", the Business Connectivity Service based on the SD-WAN paradigm that assists enterprises in their Digital Transformation journey) significantly increased throughout this year. The managed customer devices doubled, reaching 3.500 unique devices in total. The EL organic business growth facilitated Group's strategic business plan for the managed services and conduced critically to a revenue boost.

4. Increased cyber security incidents

The ever-evolving cyber threat landscape creates new and unexpected challenges for everyone, from ransomware and DDoS attacks to cybercriminals buying attack kits on the dark web. Neurosoft stayed on top of the latest cyber threats means by establishing a solid security foundation based on commonly advocated security practices. The introduction of new services in the areas of Vulnerability Management and Security Architecture, the re-design of the vCISO service and the investments in managed service automation tools lead to increased levels of revenues and profitability.

5. ID project

On 20 December 2019, the Greek Government had issued an RFP for the procurement, delivery and operation of an integrated online system for the issuance of secured documents (ID, Passport, driving license and Resident Permit). On 2 September 2020 Neurosoft participated in a consortium with the multinational Group Idemia and submitted its offer in the € 515 million tender following a demanding process.

On 2 September 2022, the Ministry of Citizen Protection, announced the cancelation of the bidding process because of a significant descoping that results to a € 56.5 million reduction in benefit of the Greek State. A new tender is expected to be issued soon.

6. Offering Development

Neurosoft during 2022 performed an operational restructuring of its offering pillars and developed essential strategies to achieve business and operational improvements and efficiencies. The former System Engineering vertical was segmented into "Field Services Operations" and "Infrastructure & Cloud Operations". This modification will allow the Group to focus on each specific area and to better concentrate on its business growth.

The Company's vision is to become the most-innovative,value-adding Managed Infrastructure Service Provider (MISP) in Greece & Cyprus. Working towards this direction Neurosoft enhances and improves competency in new technologies and sales experience via high quality and innovative services over our field of expertise.

The Group develops the approach of the Offering Pyramid, which depicts the importance and emphasis given to the various aspects of the offering pillars:

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