DSI Holding GmbH

München

Befreiender Konzernabschluss zum Geschäftsjahr vom 01.01.2020 bis zum 31.12.2020

Tension II AcquiCo S.à r.l.

Luxemburg

Consolidated Financial Statements & Management Report of the DSI Group for the year ended 31 December 2020

(with the Independent Auditors' Report thereon)

RCS Luxembourg: B 151883

Contents

Group Management Report for the year ended 31 December 2020

Audit Report

Consolidated Statement of Financial Position as at 31 December 2020

Consolidated Statement of Comprehensive Income for the year ended 31 December 2020

Consolidated Statement of Cash Flows

Consolidated Statement of Changes in Equity

Notes to the Consolidated Financial Statements

I. Nature of Operations and Basis of Preparation

II. New Accounting Pronouncements

III. Significant Accounting Policies

IV. Use of Estimates and Judgement

V. Risk Management

VI. Changes to the Consolidated Group

VII. Investments held by the Group at 31 December 2020

VIII. Notes to the Consolidated Statement of Financial Position

IX. Notes to the Consolidated Statement of Comprehensive Income

X. Notes to the Consolidated Statement of Cash Flows

XI. Disposal Group Held for Sale and Discontinued Operations

XII. Other Information

XIII. Subsequent Events

Group Management Report for the year ended 31 December 2020

Situation and Environment

1.1. Business Activity

The DSI Group is a global market leader in the supply of safety-critical systems and products for the construction industry in post-tensioning and geotechnics, as well as for underground operations, primarily in mining and tunneling. In addition, DSI is a major player in the concrete accessories markets in France and Germany.

Post-tensioning is predominantly used in the construction of bridges, wind towers, and high-rise buildings, while geotechnical products are used to stabilize excavated slopes as well as concrete structures and to transfer external forces (e.g. wind) into the ground. Such activities are closely linked to the construction market, mainly in areas of infrastructure or large industrial projects. Additionally, the Group offers a unique combination of services for infrastructure repairs, maintenance, and monitoring through its Lifespan business unit. The customers of DSI in these areas are general building contractors (post-tensioning) or relevant sub-contractors (geotechnical products).

Present in all key mining territories including Asia Pacific, Europe, CIS Region, North America, and Latin America, the Group's products are used extensively in both soft-and hard-rock mining projects worldwide. The mining or strata control products are safety- critical consumables that are used in underground mines to prevent walls and roofs from collapsing. Customers are medium or large-sized mining firms.

The tunneling products and systems cover both excavation and ground support systems including injection resins and self-drilling products, which provide support for a wide range of tunnels including tunnels for cars, rail/subways, water and sewage. 80% of all tunnel activities take place in urban areas, which are often characterized by decreasing space availability above and below ground. Key customers are tunnel-building construction companies.

Concrete accessories are consumables that are required for the handling and processing of concrete during the construction process. The product range is very diverse and ranges from mechanical products to chemical additives. The business is mainly serving the infrastructure and commercial construction and to a lesser extent the residential construction markets.

Given the above core markets of the DSI Group, industrial or infrastructural building activities as well as mining activities are the main drivers of such markets. The concrete accessories market also depends on the volume of residential constructions.

1.2. Group Structure

Tension II AcquiCo S.à r.l. ("the Company"), headquartered in Luxembourg, is 100% owned by Tension II Luxco 4 S.à r.l., which is indirectly owned by funds managed by Triton Managers III Limited as general partner of Triton Fund III General Partner L.P. Tension II AcquiCo S.à r.l. acquired the DYWIDAG Systems International Group (hereafter called DSI Group) on 15 June 2011.

DSI's competitive position varies between market segments and geographical regions; however, the Group has secured market leading positions in most key markets and regions. Historically, the DSI Group's growth has been both internal and through acquisitions.

The DSI Group is divided into two core business areas (also referred to as divisions), each with their own executive and global management team. For analytical purposes and to manage the business, the Construction business (DYWIDAG Group) is divided into four core business areas and the Underground business (DSI Underground Group) is divided into four geographical regions.

The following illustration shows the 2020 Group structure:

After engaging separate executive teams in 2017, the two divisions decided to fully split the global headquarters team to enable them to better anticipate opportunities in each division. This split, effective from 01 January 2019, allows each division to focus more fully on strategic initiatives, the pursuit of global growth opportunities, and the integration of new businesses.

On 21 October 2020, exclusive negotiations were entered into with a potential buyer regarding the sale of the DSI Underground Group. Following these negotiations, Tension II AcquiCo S.à r.l. and Emmerick Pty. Ltd. have entered into an agreement on 24 December 2020 with Sandvik Aktiebolag regarding the sale of their entire participation in DSI Underground Holdings S.à r.l. The completion of the sale is subject to clearance from merger control and foreign investment authorities of various countries. The sale is expected to be completed in the second half of 2021. Therefore, this division has been categorized as a disposal group held for sale in the 2020 consolidated financial statements.

1.3. Business Environment and Outlook

In March 2020, the World Health Organization declared a pandemic related to a new virus (COVID-19). Government policies and actions enacted to combat the virus resulted in a worldwide disruption of economic activity. The severity of the restrictions varied over the course of the year and, although DSI Underground experienced only a moderately negative financial downturn during the year, the impact of the virus was felt in all areas of the Group as extensive measures were taken to minimize the risk of infection for all employees and at all locations.

Global economic growth took a hit in 2020 and most major economies important to the DSI Group, such as the European countries with -6.65% overall, Australia with -2.4%, USA with -3.5% and Canada with -5.4%, recorded a decline in their GDP growth rate for the year 2020 ¹. The general state of the economy, but more importantly the corresponding building and mining activities, are key drivers for the construction and underground industries. Since the DSI Group generally holds significant market shares in its niche markets, market dynamics have a substantial influence on its performance.

Despite the disruption to the global economy, order patterns for most customers remained close to historical levels and only limited production disruptions were experienced. During the course of the year, the GT and DY.CO (concrete accessories) business segments experienced stronger effects, while the project business (PT, tunneling) and mining business remained relatively steady, although in some cases at a slightly reduced pace. In the Underground division, the Group benefited from synergies with recent acquisitions in Australia and Canada and was able to secure a number of new projects. That said, many planned growth initiatives or new investments were delayed in order to maximize liquidity due to the economic uncertainty.

In the first weeks of 2021, the business had a mixed start lagging a bit behind the prior year and budgeted results. This also relates to the lingering impact of the COVID-19 measures. However, the overall economic growth outlook and underlying business developments are expected to be favorable for the upcoming year with a recovery in sales volumes and further synergy improvements. The Group demonstrated its flexibility and resilience by monitoring economic developments and taking swift action where needed, including but not limited to deferring non-critical spending, leveraging short time work or comparable programs, and reducing headcount. As the relevant markets recover, the Group is positioned to benefit.

1.4. Research and Development (R&D)

As a provider of innovative and top-quality products and systems, DSI assigns high importance to its R&D activities and utilizes its resources to retain and extend its market position. During 2020, the DSI Group continued to strengthen its technological leadership in the marketplace and has filed 9 new patent applications (2019: 18). 7 of those new patent applications relate to the Group's continuing business.

Beginning in 2020, the R&D function for the continuing business has been carved out from the business units and centralised as a global function to accelerate the development of smart solutions of post-tensioning, geotechnics, and inspection and fault detection robots and cloud based infrastructure- and geo-monitoring services.

¹ Source: www.conference-board.org/data/globaloutlook.cfm

These activities secure and expand DS/'s competitive advantage by providing a range of expertise which exceeds competitors' capabilities.

1.5. Comments to the Consolidated Financial Statements

In the full calendar year 2020, the DSI Group generated sales of € 868.7 million (2019: € 896.2 million) and Earnings before Interest, Taxes, Depreciation and Amortization (EBITDA, based on management reporting) of € 114.5 million (2019: € 107.3 million). The EBITDA margin was 13.0% (2019: 12.0%). The net result for the year ended 31 December 2020 was € -3.3 million (2019: € 7.7 million).

The following table shows a split up of the sales performance in the financial year 2020 compared to 2019:

	Sales 2020	Sales 2019	Variation to prior year
DSI Group Segments	in m€	in m€	in m€	in %
Continuing operations
Geotechnics	118.7	136.5	-17.8	-13.0%
Post-Tensioning	129.5	119.3	10.2	8.5%
Lifespan Management	31.3	31.3	0.0	0.0%
DY.CO Concrete Accessories	79.3	84.6	-5.3	-6.3%
DYWIDAG Central / Consolidation	1.9	0.0	1.9	n/a
Division CONSTRUCTION	360.6	371.7	-11.1	-3.0%
Disposal group held for sale
Underground Asia-Pacific	256.5	270.1	-13.6	-5.0%
Underground Europe	110.2	122.3	-12.1	-9.9%
Underground Latin America	59.7	63.0	-3.3	-5.2%
Underground North America	100.7	89.5	11.2	12.5%
Underground Consolidation	89.6	-9.6	9.7	12.1%
Division UNDERGROUND	516.0	535.3	-19.3	-3.6%
Group Consolidation	-7.9	-10.8	2.9	-26.9%
Total Sales	868.7	896.2	-27.5	-3.1%

Source: DSI Management Reporting

Please note that sales within each segment are excluded in the respective sub-totals. Comparative information from prior year statements have been adjusted to reflect the current management reporting structure.

The DSI Group experienced a 3.1 % sales decrease vs. 2019 largely due to the economic impact of COVID-19 and to exchange rate movements. At prior year exchange rates, sales would have been slightly up versus the prior year and this development was reflected in the Group's overall performance in 2020. The DSI Group's gross profit per management reporting (excluding depreciation and non-recurring items) at € 208.4 million decreased by 3.5% compared to the prior year (2019: € 216.0 m), largely volume driven due to decreased business levels, but partially due to customer mix impacts. Gross margin per management reporting decreased by 0.1 ppts (from 24.1% in 2019 to 24.0% in 2020).

Looking at year-end rates, the US dollar, the Canadian dollar, and the Australian dollar exchange rates all weakened in the course of 2020 compared to the Euro, which had a moderately negative impact on the net result of the Group. Based on figures published by the German Central Bank (Devisenkursstatistik, Deutsche Bundesbank) for 2020, the value of the Euro to the US, Canadian and Australian dollar changed by an annual average of +2.0%, +3.0% and +2.7% ² respectively compared to 2019. Across all currencies, the overall FX impact on DSI's sales for the year 2020 was approximately € -29.8 million (-3.4%) compared to 2019 average rates and € -4.3 million (-3.8%) on Group EBITDA.

The goodwill and most of the intangible assets held by the DSI Group arose through business acquisitions. Many assets were revalued in conjunction with the June 2011 acquisition, but the 2018/2019 acquisitions generated a significant increase in these values. All are reviewed annually. In the current year, the remaining value attributed to the "ACI" brand, utilized by DSI Tunneling LLC (USA) has been fully impaired resulting in a write-off of € 2.5m. Although still in limited use, this trademark is no longer actively marketed.

Although there were no further indications of impairment at year end, the DSI Group conducted a full impairment testing exercise in compliance with IFRS to compare the carrying amounts of all goodwill and intangible assets held by the Group with their recoverable amounts. The recoverable amount has been identified as being the value in use, determined by the discounted cash flow method on the basis of the DSI Group Business Plan, using a weighted average pre-tax cost of capital (WACC) of 10.80% (2019: 10.60%). Based on this exercise, no further impairments were identified.

2. Risk Report

The DSI Group is a leading international manufacturer and supplier of post-tensioning, geotechnical and mining products and is, therefore, exposed to both company and sector-specific risks. Our continuously updated management systems and review activities enable us to identify both risks and opportunities at an early stage and to act accordingly. This proven risk strategy allows us to take advantage of favorable business opportunities and to limit adverse effects that can arise. The risks are considered appropriate and acceptable in relation to the value created.

Major price risks to which the DSI Group is exposed are exchange rate fluctuations between the Euro and other currencies, interest rate fluctuations in international money and capital markets and price fluctuations in the metal/steel commodity market. These market risks may adversely affect the group's financial position, cash flows and profitability. The DSI Group manages and controls its exposure to market risks primarily through the group's regular operating and financing activities, but also uses derivative financial instruments (in particular interest and FX Swaps, FX Futures, FX Forwards) when deemed appropriate. Market risks are evaluated by monitoring changes in key economic indicators and market information on an ongoing basis.

² Source: http://www.bundesbank.de/Navigation/DE/Statistiken/Aussenwirtschaft/Devisen_Euro_Referenzkurse_Goldpreise/Tabellen/tabellen.html

Hedging policies for limiting these risks are laid down by the Executive Board and documented by internal Group guidelines (treasury policy and authority limit report). It also provides for the use of financial derivatives. Derivative financial instruments are used exclusively for hedging underlying transactions. The main aim of interest and currency hedging is to reduce earnings and spending volatility.

As highlighted above, other than the group currency Euro, key currencies for the DSI Group are the US dollar, Canadian dollar and Australian dollar. The FX risk, to which the DSI Group is exposed, however, is limited in that the financial debt of the DSI Group reflects to a considerable degree the currency mix of the cash flows. In relation to currency risks, the DSI Group is mainly covered by natural hedges, which means that most companies operate within their respective FX region. Business conducted outside their own FX region (e.g., UK purchases in EUR and USD, Poland business contracted in EUR) and intercompany transfers in a foreign currency are either translated via direct FX trades or FX swaps.

Aside from certain inter-Group financing arrangements, DSI Group companies hold only minimal balances in currencies other than their functional currency. These pose only an insignificant risk from exchange rate fluctuations at year end. The specific risks associated with the holding by Group subsidiaries of assets and liabilities denominated in a currency other than their applicable functional currency are outlined in the risk section of the financial statements (Section V).

The DSI Group's exposure to interest rate fluctuations arises from the current finance structure, which was set up following the acquisition in June 2011 and modified most recently in November 2019. Interest charges on long-term borrowings are based on the applicable floating base rate (e.g., EURIBOR or USD LIBOR) for each 1-month period plus a fixed margin.

The DSI Group's niche market position bears a certain risk of unfavourable movements in metal/steel commodity prices; not only due to raw material development, but also due to supplier market power. At the same time, price increases can usually be passed on to customers as their range of potential suppliers is also limited. To reduce the supplier risk, alternative suppliers for key products are identified and global sourcing initiatives have been put into place to leverage price differences across the globe. The Group also makes an effort to set prices for a longer term where favorable or necessary, as well as to negotiate contracts that compensate for sudden raw material price movements.

The overall business risk exposure for the DSI Group is similar to that of most companies in the global environment. Particularly in the current macro-economic situation (see also section 1.3: "Business Environment and Outlook") it must be noted that severe losses of revenue and margin can occur in a relatively short period of time.

In times of economic instability, such as was experienced in 2020 due to the COVID-19 pandemic, the Group intensifies its monitoring of operational and financial KPIs including the status of its supply chain and its customers with a view to ensuring business continuity and damage limitation. Management has demonstrated that they can implement extensive short-term measures including cash preservation efforts to ensure the Group can react quickly to future developments.

Since the DSI Group is a portfolio company with substantial financial liabilities, the main areas of concern are serving interest payments while securing a sufficient level of liquidity for the Group operations and for Covenant Compliance. Both of these areas are monitored on a regular basis: liquidity weekly and covenant compliance monthly. Results of such analyses are communicated to the Executive function after completion where risk relevant considerations are taken. Particular attention is usually paid to enhancing profitability as well as the efficient management of the Group's net working capital. The Group headquarters permanently monitors target realization levels and initiates countermeasures where necessary.

3. Going Concern

After the acquisition of the DSI Group through funds managed by Triton Managers III Limited, the senior debt of the Group was spread across various Group entities (see Notes for details). Subsequently, additional debt has been drawn in connection with acquisitions. A revolving line of credit facility of € 31.3 million is available for the Group in case it is needed to meet temporary liquidity needs. At 31 December 2020, € 4.0 million thereof was drawn, € 4.0 million thereof was reserved to cover letters of credit and bank guarantees leaving € 23.3 million unutilized at year end. Of the undrawn amount, € 7.3m relates to the continuing operations.

In September 2018, the DSI Group renegotiated its external financing to create separate debt facilities for the Construction and Underground divisions. The debt is managed by two Syndicated Facilities Agreements (SFAs), which include, amongst other requirements, financial ratios as Covenants. The Going Concern consideration for the Group is dependent on complying with these Covenants, since otherwise (in case of Covenant breach) the lenders could accelerate maturity of the loans.

The applicable Covenants are as follows:

- Interest Cover	(EBITDA to Net Cash Interest Expense)
- Debt Cover	(Total Net Debt to EBITDA)
- Capex Levels	(Maximum capital expenditure level excluding permitted acquisitions)

The Covenants must be tested for each division on a quarterly basis against various target ratios. All the Covenants have been tested for Q04, 2020, resulting in the issuance of favorable draft Covenant Certificates to the lenders. These Covenant Certificates have been confirmed through an audit of the certificates and the underlying assumptions and final versions will be resubmitted to the lenders within 120 days after the end of the financial year as required. The company is comfortable that all further requirements will be complied to.

Based on the Group Business Plan, the ability of the DSI Group to meet all scheduled debt service payments up to the maturity of the loans is secured. The DSI Group has sufficient liquidity at all times and is consistently able to comply with all financial covenants set in the SFA. Therefore, the 2020 consolidated accounts have been prepared for Tension II AcquiCo S.à r.l. as a going concern.

However, the full extent of the impact of COVID-19 on the DSI Group's operational and financial performance will still depend on the success of prevention and containment efforts and management continues to closely monitor developments in this area.

No interim dividends were paid during the year and no final dividend is expected to be paid in relation to the year ended 31 December 2020.

Luxembourg, 04 May 2021

Tension II AcquiCo S.à r.l.

The following table shows the assets of the Consolidated Statement of Financial Position of the DSI Group as at 31 December 2020 and 2019:

ASSETS	Notes	31 Dec 2020	31 Dec 2019 (restated)
		€ 000	€ 000
Non-current non-financial assets
Goodwill	(1)	13,622	124,191
Other intangible assets	(1)	67,332	165,743
Property, plant, and equipment	(1)	50,719	167,579
Investments carried at equity	(1)	1,218	33,636
Deferred tax assets	(2)	4,337	10,419
		137,228	501,568
Non-current financial assets
Other investments	(3)	130	711
Other financial assets	(3)	486	1,700
		616	2,411
Total Non-current assets		137,844	503,979
Current non-financial assets
Inventories	(4)	38,175	134,115
Income tax receivables	(2)	2,131	5,302
Other tax receivables	(2)	6,065	19,426
		46,371	158,843
Current financial assets
Trade and other receivables, net	(5)	59,487	146,145
Cash and cash equivalents	(6)	33,229	56,642
Derivatives	(13)	0	11
Other current financial assets	(5)	7,534	17,066
		100,250	219,864
Assets of disposal group held for sale	(28)	559,242	0
Total Current assets		705,863	378,707
Total Assets		843,707	882,686

The Notes on pages 16 to 79 form an integral part of these consolidated Financial Statements.

See Section VIII note 1 for details regarding the restatement.

The following table shows the equity & liabilities of the Consolidated Statement of Financial Position of the DSI Group as at 31 December 2020 and 2019:

EQUITY & LIABILITIES	Notes	31 Dec 2020	31 Dec 2019 (restated)
		€ 000	€ 000
Equity attributable to owners of the parent:
Share capital	(7)	6,661	6,661
Total reserves	(7)	72,499	80,511
Net accumulated losses	(7)	-140,964	-131,482
		-61,804	-44,310
Non-controlling interests	(8)	33,846	28,850
Total Equity		-27,958	-15,460
Non-current non-financial liabilities
Pensions	(10)	17,464	19,502
Deferred tax liabilities	(2)	23,334	53,768
Other non-current non-financial liabilities	(12)	0	196
		40,798	73,466
Non-current financial liabilities
Preferred equity certificates	(9)	286,593	265,130
Loans and borrowings	(11)	56,188	282,428
Lease liabilities	(11)	15,811	49,733
Other liabilities at fair value	(11)	0	1,722
		358,592	599,013
Total Non-current liabilities		399,390	672,479
Current non-financial liabilities
Income tax liabilities	(2)	4,294	7,732
Other tax liabilities	(2)	7,802	11,669
Other current provisions	(12)	1,954	1,969
Other current non-financial liabilities	(12)	34,659	32,626
		48,709	53,996
Current financial liabilities
Trade and other payables	(12)	36,181	119,752
Loans and borrowings	(12)	14,005	26,975
Lease liabilities	(14)	5,661	12,088
Derivatives	(13)	0	164
Other financial liabilities	(12)	3,988	12,692
		59,835	171,671
Liabilities of disposal group held for sale	(28)	363,731	0
Total Current liabilities		472,275	225,667
Total Equity & Liabilities		843,707	882,686

The Notes on pages 16 to 79 form an integral part of these consolidated Financial Statements.

See Section VIII note 1 for details regarding the restatement.

The following table shows the Consolidated Statement of Comprehensive Income of the DSI Group for the financial years 2020 and 2019, respectively:

	Notes	01 Jan 2020-31 Dec 2020	01 Jan 2019-31 Dec 2019 ^*
		€000	€000
Continuing operations
Sales	(15)	360,565	370,896
Cost of sales		-283,594	-288,541
Gross profit		76,971	82,355
Other operating income	(16)	8,279	3,498
Selling expenses		-28,706	-33,169
General administrative expenses		-38,078	-41,129
Impairment loss on trade receivables		-1,619	-1,320
Other operating expenses	(17)	-20,507	-2,268
Operating results		-3,660	7,967
Interest income	(21)	757	1,252
Interest expenses	(21)	-4,850	-5,796
Yield on preferred equity certificates	(21)	-3,614	-3,080
Revaluation of preferred equity certificates	(21)	-17,850	-20,308
Financial result		-25,557	-27,932
Result from investments
recognized under the equity method	(19)	-33	-386
Earnings before taxes		-29,250	-20,351
Expense/benefit from income taxes	(22)	-4,564	2,474
Net (loss) for the year from continuing operations		-33,814	-17,877
Net profit for the year from discontinued operations	(26)	30,545	25,589
Net (loss) / profit for the year		-3,269	7,712
thereof: attributable to owners of the parent		-9,482	2,526
thereof: attributable to non-controlling interests		6,213	5,186
Items that will not be reclassified to profit and loss:
Remeasurements of defined benefit plans		411	-2,087
Tax on remeasurements		-127	624
Items that may be reclassified subsequently to profit and loss:
Currency translation adjustment		-8,627	138
Other comprehensive income for the year	(27)	-8,343	-1,325
Total comprehensive income for the year		-11,612	6,387
thereof: attributable to owners of the parent		-16,566	1,201
from continuing operations		-39,716	-24,704
from discontinued operations		23,150	25,905
thereof: attributable to non-controlling interests		4,954	5,186

^* The prior-year comparative figures have been adjusted due to presentation of DSI Underground as discontinued operation.

The Notes on pages 16 to 79 form an integral part of these consolidated Financial Statements.

The following table shows the Consolidated Statement of Cash Flows of the DSI Group for the financial years 2020 and 2019:

	Note	01 Jan 2020 31 Dec 2020	01 Jan 2019 31 Dec 2019
		€000	€000
Net profit before taxes, interest, and income from investments from continuing operations		-3,660	7,967
Operating results from discontinued operations	(26)	46,113	43,613
Depreciation and amortisation of non-current assets	(1)	34,596	37,092
Other non-cash items expenses (income)		10,580	198
Gain from the disposal of fixed assets		-4,718	-176
Changes in operating net working capital		11,661	-10,842
Changes in other assets		5,480	-12,294
Changes in other liabilities		7,834	2,828
Interest paid		-16,708	-16,762
Taxes on income paid	(23)	-14,802	-13,747
Net cash flow from operating activities	(29)	76,376	37,877
Interest received		280	284
Dividends received		2,511	1,835
Inflow of funds from disposals of non-current assets		8,906	979
Sale of subsidiary's interests to non-controlling interest		0	1,368
Acquisition of subsidiary, net of cash acquired	(24)	0	-39,783
Outflow of funds for the purchase of intangible assets		-1,940	-1,229
Outflow of funds for property, plant, and equipment		-34,224	-24,209
Cash flow used in investing activities	(29)	-24,467	-60,755
Repayment of bank borrowings	(25)	-46,291	-35,744
Inflows of funds from bank borrowings	(25)	25,760	80,083
Changes in lease liabilities		1,702	-4,723
Change in related party financing		-9,582	-6,806
Acquisition from non-controlling interests		-1,419	0
Dividends paid to non-controlling interests		0	-2,743
Cash flow from/ (used in) financing activities	(29)	-29,830	30,067
Total cash inflows and outflows		22,079	7,189
Cash and cash equivalents at beginning of the year		56,642	49,853
Exchange gains on cash balances		-3,625	-400
Cash and cash equivalents at the end of the year		75,096	56,642

The Notes on pages 16 to 79 form an integral part of these consolidated Financial Statements.

The following table shows the Consolidated Statement of Changes in Shareholder's Equity of the DSI Group for the years ended 31 December 2020 and 2019, respectively:

	Share capital	Reserves	Other comprehensive income	Total reserves	Net Accumulated Losses	Shareholder equity	Noncontrolling interests	Total equity
Denominated in €	€ 000	€ 000	€ 000	€ 000	€ 000	€ 000	€ 000	€ 000
Balance as at 01 January 2019	6,661	84,772	-15,721	69,051	-133,842	-58,130	23,626	-34,504
Transactions with NCI without change in control	-	1,012	-	1,012	-	1,012	1,279	2,291
Capital contribution	-	13,026	-	13,026	-	13,026	-	13,026
Contribution to subsidiaries with NCI	-	-1,253	-	-1,253	-	-1,253	1,502	249
Yield on preferred shares / Dividend payments	-	-	-	-	-166	-166	-2,743	-2,909
Changes in ownership interests	-	12,785	-	12,785	-166	12,619	38	12,657
Net Income for the year	-	-	-	-	2,526	2,526	5,186	7,712
Actuarial gains and losses (net of tax)	-	-	-1,463	-1,463	-	-1,463	-	-1,463
Currency translation adjustments	-	-	138	138	-	138	-	138
Total comprehensive income	-	-	-1,325	-1,325	2,526	1,201	5,186	6,387
Balance as at 31 December 2019	6,661	97,557	-17,046	80,511	-131,482	-44,310	28,850	-15,460
Transactions with NCI without change in control	-	-928	-	-928	-	-928	42	-886
Capital contribution	-	-	-	-	-	-	-	-
Contribution to subsidiaries with NCI	-	-	-	-	-	-	-	-
Yield on preferred shares / Dividend payments	-	-	-	-	-	-	-	-
Changes in ownership interests	-	-928	-	-928	-	-928	42	-886
Net Income for the year	-	-	-	-	-9,482	-9,482	6,213	-3,269
Actuarial gains and losses (net of tax)	-	-	284	284	-	284	-	284
Currency translation adjustments	-	-	-7,368	-7,368	-	-7,368	-1,259	-8,627
Total comprehensive income	-	-	-7,084	-7,084	-9,482	-16,566	4,954	-11,612
Balance as at 31 December 2020	6,661	96,629	-24,130	72,499	-140,964	-61,804	33,846	-27,958

The Notes on pages 16 to 79 form an integral part of these consolidated Financial Statements.

(I) Nature of Operations and Basis of Preparation

(a) Reporting entity

Tension II AcquiCo S.à r.l. ("the Company"), is a company incorporated on 12 March 2010 and domiciled in Luxembourg. The Company's registered office is 2 rue Edward Steichen, L-2540 Luxembourg and the Company is registered with the Register of Commerce of Luxembourg under section B number 151.883. The Company is 100% owned by Tension II LuxCo 4 S.à r.l., which is ultimately controlled by TritonMasterluxco 3 S.à r.l.

The consolidated financial statements of the Company as at and for the year ended 31 December 2020 comprise those of the Company and its fully controlled subsidiaries (together referred to as the "DSI Group" or the "Group" and individually as "Group entities").

The DSI Group is active in the areas of construction and mining, specializing in post-tensioning systems, geotechnical products, concrete accessories, tunnelling, and mining products. In the current year, the Group generated revenues from continuing and discontinued operations of € 868,7 million with approximately 3,243 employees worldwide based on an annual average (in the prior year: revenues of € 896.2 million with approximately 3,056 employees).

Of that total, revenue of € 360,6 million and 1,570 employees worldwide relate to business areas considered continuing operations (in the prior year: revenues of € 370.9 million with approximately 1,519 employees).

(b) Basis of accounting

The consolidated financial statements of the Company have been prepared and presented in accordance with the International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB) and with the interpretations thereof issued by the International Reporting Standards Interpretations Committee (IFRIC). Accounts are presented on the basis of the Standards and Interpretations as adopted by the European Union and in accordance with the Luxembourg legal and regulatory requirements.

Current and non-current assets and liabilities are shown in the group balance sheet in accordance with IAS 1.54. The statement of profit and loss is presented in accordance with the functional cost method.

These consolidated financial statements are presented in Euro (€), which is the Company's functional currency. All financial information presented in Euro has been rounded to the nearest thousand, unless otherwise indicated.

(c) Basis of consolidation

The Company is the owner of 100% of the shares of DSI International Luxembourg S.à r.l., Luxembourg, and 80% of the shares of DSI Underground Holdings S.à r.l., Luxembourg. After internal restructuring activities, these two companies are now the relevant holding companies for the Group's Construction and Underground companies. In addition to the financial statements of Tension II AcquiCo S.à r.l., the consolidated financial statements include the accounts of all domestic and foreign subsidiaries which the Company controls, indirectly or directly, through a majority of the voting rights or other controlling rights.

The consolidated financial statements include the accounts of Tension II AcquiCo S.à r.l. as well as those of 87 fully consolidated companies (in 2019: 85). An overview of the consolidated entities is provided in Section VII.

(d) Going concern

The senior debt held across DSI Group Companies is managed under two separate debt agreements for the Construction and Underground divisions. These Syndicated Facilities Agreements (SFA) include, among other requirements, covenants specifying certain minimum/maximum acceptable financial ratios for each division. The covenant ratios measured are as follows:

- Interest Cover	(EBITDA to Net Finance Charges)
- Debt Cover	(Total Net Debt to EBITDA)
- CAPEX levels	(Maximum capital expenditure level excluding permitted acquisitions)

These covenants are tested at quarterly reporting dates and the going concern consideration for the Group is dependent on complying with these covenants, since otherwise (in case of a breach) the lenders could accelerate maturity of the loans. The official DSI Group Business Plan indicates that the DSI Group can continue to meet all scheduled debt service payments up to the maturity of the loans, has sufficient liquidity and will consistently be able to comply with all financial covenants set in the SFA. Therefore, the 2020 consolidated financial statements of Tension II AcquiCo S.à r.l. are prepared on the going concern basis.

(e) Authorisation for issue

The consolidated financial statements of Tension II AcquiCo S.à r.l. were authorised for signoff by the Board of Managers on 04 May 2021.

(II) New Accounting Pronouncements

(a) New standards and interpretations adopted by the Group

The following new and amended standards are effective for the first time for the financial year beginning on 01 January 2020. The implementation of the standards did not have a material impact on the DSI Group.

Standard	Key requirements	Effective date	Endorsed by EU?
Amendments to References to Conceptual Framework in IFRS Standards	The IASB issued a revised Conceptual Framework in March 2018. These amendments updated most references to the Framework included in IFRS standards.	Annual periods beginning on or after 01 January 2020	Yes
Amendments to IFRS 9, IAS 39 and IFRS17	Includes various amendments particularly related to hedging relationships as part of the Interest Rate Benchmark Reform.	Annual periods beginning on or after 01 January 2020	Yes
IFRS 3 (amendment)	Amends references to the Conceptual Framework in IFRS 3 Business Combinations that was not included in the earlier updates.	Annual periods beginning on or after 01 January 2020	Yes
IAS 1 and IAS 8 (amendment) Definition of Material	Clarifies the definition of 'material' and aligns the definition used in the Conceptual Framework and the standards themselves.	Annual periods beginning on or after 01 January 2020	Yes
Amendment to IFRS 16 Leases Covid-19-related rent concessions	The amendment provides the lessee relief from assessing whether Covid-19 related rent concessions are lease modifications and allows lessee to account for such concessions as if they were not lease modifications.	Annual periods beginning on or after 01 January 2020	Yes

(b) Standards, amendments, and interpretations to existing standards that are not yet effective and have not been early adopted by the DSI Group

A number of new standards, amendments to standards, and interpretations have been issued but are not effective for the financial year beginning 01 January 2020 and have not been early adopted.

Standard	Key requirements	Effective date	Endorsed by EU?
IFRS 17 Insurance Contracts	Improvements of accounting for insurance contracts.	Annual periods beginning on or after 01 January 2023	No
IAS 1 (amendment) Classification of Liabilities	Provides a more general approach to the classification of liabilities as Current or Non- current based on the contractual arrangements in place at the reporting date.	Annual periods beginning on or after 01 January 2023	No
IFRS 10 and IAS 28 (amendments)	Amendments regarding sales or contributions of assets between an investor and its associate/joint venture.	Deferred indefinitely	No
IFRS 3 (amendment)	Updates an outdated reference in IFRS 3 without significantly changing its requirements.	Annual periods beginning on or after 01 January 2022	No
IAS 16 (amendment)	Provides guidance on accounting for proceeds produced while an item of property, plant and equipment is prepared for the intended use.	Annual periods beginning on or after 01 January 2022	No
IAS 37 (amendment)	Clarifies what costs should be included for assessing whether a contract is onerous.	Annual periods beginning on or after 01 January 2022	No
Annual Improvements to IFRS 2018 to 2020 Cycle	Amendments to IFRS 1, IFRS 9, IFRS 16 and IAS 41.	Annual periods beginning on or after 01 January 2022	No
IAS 8 (amendment)	Provides clarification of accounting estimates.	Annual periods beginning on or after 01 January 2023	No

These standards are not expected to have a significant effect on the consolidated financial statements and the DSI Group does not plan to adopt these standards early.

(III) Significant Accounting Policies

The accounting policies set out below have been applied consistently by the group entities to all periods presented in the consolidated financial statements.

The financial year of all consolidated subsidiaries ends on 31 December. The sole exception are two subsidiaries in India which, due to local requirements, have a fiscal year from April 1 to March 31. For consolidation purposes, all financial data used are for the calendar year.

(a) Principles of consolidation

Business combinations

All business combinations are accounted for using the acquisition method when control is transferred to the Group. At the acquisition date, the identifiable assets acquired and liabilities assumed are measured at fair value. The excess of the consideration transferred over the fair value of the group's share of the identifiable net assets acquired is recorded as goodwill. When the excess is negative (negative goodwill), a bargain purchase gain is recognised immediately in the statement of comprehensive income.

The fair value adjustments from first-time consolidation are carried forward for purposes of subsequent consolidation and, for assets with a designated useful life, are depreciated. Acquisition-related costs, other than those associated with the issue of debt and equity securities, are expensed as incurred.

Any contingent consideration is measured at fair value at the acquisition date. If the obligation to pay contingent consideration meets the definition of a financial liability, subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

Fully consolidated subsidiaries

Subsidiaries are entities controlled by the Group. The Group controls an entity when it is exposed, or has rights, to variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date that control commences until the date that control ceases. The accounting policies of subsidiaries have been changed when necessary to align them with the policies adopted by the Group.

Non-controlling interests

In cases where the Group controls but does not have entire ownership of a subsidiary, the Group recognises any non-controlling interest in the acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest's proportionate share of the recognised amounts of the acquiree's identifiable net assets. The share in net assets and postacquisition results which belong to the holders(s) of non-controlling interests are presented separately in the balance sheet and income statement. Transactions with non-controlling interests that do not result in a loss of control are treated as transactions between equity holders. Purchases from non-controlling interests are accounted for as transactions with owners and no goodwill is recognised as a result of such transactions. Gains or losses resulting from disposals to non-controlling interests are also recorded in equity.

Interests in equity-accounted investees

Associates are those entities in which the Group has significant influence, but not control, over their financial and operating policies. Significant influence is presumed to exist when the Group holds between 20 and 50 percent of the voting rights of another entity. Joint ventures are those entities over whose activities the Group has joint control, established by contractual agreement and requiring unanimous consent for strategic financial and operating decisions. The Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities.

Interests in associates and joint ventures are accounted for using the equity method and are recognised initially at cost, including transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group's share of the income and expenses and equity movements of equity-accounted investees, until the date that significant influence or joint control ceases. The cumulative post-acquisition movements are adjusted against the carrying amount of the investment. When the Group's share of losses exceeds its interest in the associated company or joint venture, the carrying amount of that interest (including any long-term investments) is reduced to nil and the recognition of further losses is discontinued except to the extent that the Group has an obligation or has made payments on behalf of the investee.

Profits and losses resulting from upstream and downstream transactions with equity- accounted investees are recognised in the group's financial statements only to the extent of unrelated investors' interests in the associates.

Other affiliated companies

Certain Group companies are recognised at cost and are disclosed as investments in other affiliated companies since they, taken together, have no material effect on the net assets, financial position, and results of operations of the Group. Earnings on investments carried at cost are recorded upon the declaration of dividends.

Transactions eliminated on consolidation

Intra-group transactions, balances, and income and expenses arising from transactions between group companies are eliminated. Profits and losses resulting from intercompany transactions that are recognized in assets are also eliminated.

(b) Foreign currency translation

Functional and presentation currency

The consolidated financial statements are presented in Euro (EUR), which is the Company's functional and presentation currency. Each entity in the Group determines its own functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions in foreign currencies are initially recorded in the functional currency using the rate prevailing at the transaction date. Monetary assets and liabilities denominated in foreign currencies are retranslated at the exchange rate at the balance sheet date. All differences are recognised in profit or loss and are reported in other income and other expense. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rate as at the date of the initial transaction.

At the reporting date, the assets and liabilities of non-Euro subsidiaries are translated into the presentation currency of Tension II AcquiCo S.à r.l. (EUR) at the exchange rate at the balance sheet date and the income and expenses for each income statement are translated at the average exchange rates for the period. Exchange differences arising from the retranslation are recognised in a separate component of equity (OCI) except to the extent that the transaction difference is allocated to non-controlling interests. On disposal of a foreign entity, the deferred cumulative amount recognised in equity relating to that particular foreign operation shall be recognised in the income statement.

Exchange rates applied

For consolidation purposes, the average exchange rate for the year is used for items shown in the income statement. The exchange rates listed below were used in the consolidated financial statements for each Group company. The value shown is the number of units of the foreign currency equivalent to one Euro.

Country	ISO Code	Exchange rate
		End rate at reporting date		Average rate
		31 Dec 2020	31 Dec 2019	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Argentina	ARS	100.9930	66.7030	80.8326	53.8205
Australia	AUD	1.5870	1.5987	1.6558	1.6105
Brazil	BRL	6.3680	4.5135	5.8903	4.4121
Canada	CAD	1.5608	1.4583	1.5298	1.4856
Chile	CLP	866.4300	833.8700	902.8086	786.9544
Colombia	COP	4,199.8354	3,678.5897	4,216.3049	3,673.2518
Czech Republic	CZK	26.2450	25.4100	26.4568	25.6642
Great Britain	GBP	0.8980	0.8491	0.8895	0.8774
Hong Kong	HKD	9,5055	8,7428	8,8530	8,7725
Indonesia	IDR	17,342.7900	15,581.9900	16,584.0734	15,839.6459
India	INR	89.4950	80.1260	84.5963	78.8173
South Korea	KRW	1.334,0000	1.296,3000	1.345,4634	1.304,9900
Mexico	MXN	24.4551	21.1594	24.5266	21.5507
Mongolia	MNT	3,213.0962	2,938.2589	2,990.2835	2,910.1428
Peru	PEN	4.4391	3.7211	3.9923	3.7359
Poland	PLN	4.6148	4.2585	4.4436	4.2968
China	RMB	8.0082	7.8193	7.8720	7.7335
Russia	RUB	90.6824	69.3406	82.6302	72.4483
Qatar	QAR	4,4228	4,0433	4,1266	4,0533
Saudi Arabia	SAR	4,5987	4,2123	4,2832	4,1997
USA	USD	1,2590	1,1228	1,1414	1,1196
South Africa	ZAR	17.9840	15.7300	18.7773	15.8205
Sweden	SEK	10.0370	10.4610	10.4898	10.5857

Source of FX rates is Sauder Pacific Exchange Rate Service or the national banks of the relevant country.

(c) Accounting and valuation policies

Intangible assets

Goodwill

Goodwill represents the excess of the cost of an acquisition over the Group's interest in the net fair value of the identifiable assets, liabilities, and contingent liabilities of the acquired subsidiary at the date of acquisition. Goodwill is not amortised, but is tested annually for impairment and is carried at cost less accumulated impairment losses. In respect of at-equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment.

The goodwill acquired in a business combination is allocated, for the purpose of impairment testing, to cash-generating units that are expected to benefit from the synergies of the combination.

Brands

Certain brands proprietary to the Group have been measured upon acquisition at fair value. The commercial advantages underlying the brands do not have a determinable life and therefore no scheduled amortisation is taken. The brands are evaluated for impairment annually and upon the occurrence of a triggering event. They are carried at their original value less accumulated impairment losses.

Other intangible assets

Other intangible assets are measured at cost (or fair value at acquisition date when acquired in a business combination) less accumulated amortisation and accumulated impairment losses. Amortisation is calculated to write-off the cost of intangible assets less their estimated residual value using the straight-line method over their estimated useful lives and is generally recognised in profit or loss. The estimated useful lives for the current and comparative years are as follows:

• technologies	2-12 years
• non-contractual customer relationships	4 -10 years
• software	3-5 years

Amortisation methods, useful lives and residual values are reviewed at each reporting date and adjusted if appropriate.

When these assets are acquired in a business combination, the fair value of intangibles is estimated using the best available information. Generally, the fair value of patents and trademarks is based initially on the discounted estimated royalty payments that have been avoided as a result of owning the patent or trademark. The fair value of customer relationships is determined using the multi-period excess earnings method, whereby the subject asset is valued after deducting a fair return on all other assets that are part of creating the related cash flows. The fair value of other intangible assets is based on the discounted cash flows expected to be derived from the use and eventual sale of the assets.

Subsequent expenditures

Subsequent expenditures relating to existing intangibles are capitalised only when they increase the future economic benefits embodied in the specific asset to which they relate. All other expenditures, including expenditures on internally generated goodwill and brands, are expensed in profit or loss as incurred.

Property, plant, and equipment

Items of property, plant, and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. When items of property, plant and equipment are acquired through a business combination, they are remeasured at fair value and the valuation adjustments are also subject to depreciation and impairment.

Cost includes expenditures that are directly attributable to the acquisition of the asset. The cost of self-constructed assets includes the cost of materials and direct labour, any other costs directly attributable to bringing the assets to a working condition for their intended use, and the costs of dismantling and removing the items and restoring the site on which they are located. Purchased software that is integral to the functionality of the related equipment is capitalised as part of that equipment.

When parts of an item of property, plant and equipment have different useful lives, they are accounted for as separate items (major components) of property, plant, and equipment.

Gains and losses on disposal of an item of property, plant and equipment are determined by comparing the proceeds from disposal with the carrying amount of the item sold and are recognised net within "other operating income" or "other operating expenses" in profit or loss.

Depreciation is recognised in profit or loss on a straight-line basis over the estimated useful lives of each part of an item of property, plant, and equipment. Leased assets are depreciated over the shorter of the lease term and their useful lives unless it is reasonably certain that the Group will obtain ownership by the end of the lease term. Land is not depreciated.

The estimated useful lives for the current and comparative years are as follows:

• buildings	20 - 50 years
• plant and equipment	8-10 years
• other plant, operating, and office equipment	3-10 years

Depreciation methods, useful lives and residual values are reviewed at each reporting date.

Impairment of non-financial assets

Assets that have an indefinite useful life or are not available for use are not subject to amortisation and are tested annually for impairment. Assets that are subject to amortisation are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount may not be recoverable. For the purposes of impairment testing, assets are grouped together into the smallest group of assets that generates cash inflow from continuing use that are largely independent of the cash inflows of other assets or cash generating units (CGUs).

The recoverable amount of an asset or cash-generating unit is the greater of its value in use and its fair value less costs of disposal. To calculate the value in use, estimated future cash flows based on current business plans are discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised for the amount by which the asset's (or CGU's) carrying amount exceeds its recoverable amount. Impairment losses are recognised in profit or loss and are allocated first to reduce the carrying amount of any goodwill allocated to the CGU and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis.

Non-financial assets other than goodwill that have been impaired are reviewed for possible reversal of the impairment at each reporting date. Any impairment loss reversal is limited to the extent that the asset's revised carrying amount does not exceed the carrying amount, net of depreciation or amortisation, that would have been determined if no impairment loss had been recognised.

Financial assets

The Group classifies its financial assets in the following categories:

a)	amortized cost (AC),
b)	fair value with changes through OCI (FVOCI), and
c)	fair value with changes through the P&L (FVtPL).

These groupings drive the measurement and subsequent applicable remeasurement of the assets and the treatment of revaluations either through the income statement or neutrally through equity. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets.

Financial assets at amortized costs

A financial asset is measured at amortised cost if it meets both of the following conditions and is not designated as FVtPL:

―	it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
―	its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Financial assets at fair value with changes through OCI

A debt investment is measured as FVOCI if it meets both of the following conditions and is not designated as FVtPL:

―	it is held within a business model whose objective is achieved by both collecting contractual cash flows and selling financial assets; and
―	its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

On initial recognition of an equity investment that is not held for trading, the Group may irrevocably elect to present subsequent changes in the investment's fair value in OCI. This election is made on an investment-by-investment basis.

Financial assets at fair value with changes through profit or loss

All financial assets not classified in one of the categories already mentioned above are measured at FVtPL. This includes all derivative financial assets. Assets in this category are initially measured at fair value and are also carried at fair value. Gains or losses arising from changes in the value are presented in the income statement. They are classified as current assets if expected to be settled within 12 months; otherwise, they are classified as non-current.

When presenting financial assets in the accompanying notes, the balances and related period effects are disclosed. Regular purchases and sales of financial assets are recognised at the settlement date.

Impairments of financial assets

The Group recognises loss allowances on financial assets measured at amortised cost, debt investments measured at FVOCI, and contract assets. The loss allowances are measured at an amount equal to lifetime expected credit losses, except for the following, which are measured at 12-month expected credit loss:

―	debt securities that are determined to have a low credit risk at the reporting date; and
―	other debt securities and bank balances for which credit risk has not increased significantly since initial recognition.

Loss allowances for trade receivables and contract assets are always measured at an amount equal to lifetime expected credit loss.

At each reporting date, the Group assesses whether financial assets carried at amortised cost and debt securities at FVOCI are credit-impaired. A financial asset is 'credit-impaired' when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

Criteria used to determine if a financial asset is credit-impaired include: customer late payments, signs of impending insolvency, or observable economic conditions correlating with defaults on these assets. Individually significant financial assets are tested for impairment on an individual basis. The remaining financial assets are assessed collectively in groups that share similar credit risk characteristics. However, no general valuation allowances are recorded.

An impairment loss is reversed if the reversal can be related objectively to an event occurring after the impairment loss was recognised. For financial assets measured at amortised cost, the reversal is recognised in profit or loss.

Derivative financial instruments

The Group uses derivative financial instruments to limit its foreign currency and interest rate risk exposure. Derivatives are recognised initially at fair value; transaction costs are recognised in profit or loss when incurred. Subsequent to initial recognition, derivatives are re-measured at fair value and the method of recognizing the resulting gain or loss depends on whether the derivative is designated as a hedging instrument and, if so, the nature of the item being hedged.

Currently, no derivative financial instruments held by the Group are designated as hedging instruments. Therefore, these instruments are classified as held for trading and all changes in fair value are recognised through profit or loss. Existing derivatives are valued using inputs that are observable for the asset or liability either directly or indirectly from the market other than quoted prices.

Inventories

Inventories are initially recorded at cost and a valuation allowance is recorded to reduce the carrying value to the lower of cost and net realisable value. The cost of inventories is determined using weighted average method and includes costs incurred in acquiring the inventories, production or conversion costs, and other costs incurred in bringing them to their existing location and condition. In the case of manufactured inventories and work in progress, the cost includes an appropriate share of production overheads based on normal operating capacity. Net realisable value is the estimated selling price in the ordinary course of business, less the estimated costs of completion and selling expenses.

Cash and cash equivalents

Cash and cash equivalents comprise cash balances, deposits held at call with banks, and short-term highly liquid investments with original maturities of three months or less. Bank overdrafts are shown within borrowings in current liabilities.

Receivables and other assets

Trade receivables are amounts due from customers for merchandise sold or services performed in the ordinary course of business. Other assets such as prepayments to suppliers which will not be converted to cash, but are settled by the delivery of goods and services, also arise in the normal course of business and are considered non-financial. Trade receivables and other assets both financial and non-financial are recognised initially at fair value and subsequently measured at amortised cost less allowance for impairment. If collection or settlement is expected in one year or less, they are classified as current assets. If not, they are presented as non-current assets.

Share capital

Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of any tax effects.

Preference share capital is classified as equity if it is non-redeemable or redeemable only at the Company's option, if any dividends are discretionary, and if it does not contain any obligations to deliver cash or other financial assets or require settlement in a variable number of the Group's equity instruments.

Financial liabilities

Financial liabilities are categorised as either:

a)	financial liabilities at fair value through profit or loss (FVtPL) or
b)	financial liabilities at amortised cost (FLAC).

These categorisations drive the measurement and subsequent applicable remeasurement of the liability and the treatment of revaluations either through the income statement or neutrally through equity. In presenting the financial liabilities in the accompanying notes, the balances and related period effects are disclosed. For the classification of each liability position, see Section VIII Note 13 - Financial Instruments.

Financial liabilities at fair value through profit or loss

Financial liabilities at fair value through profit or loss are financial liabilities designated as such upon initial recognition or those that are considered held for trading. A financial liability is classified in this category if acquired principally for the purpose of selling in the short-term. Derivatives are also categorised as held for trading unless they are designated as hedges.

Preferred equity certificates (PECs), which are mandatorily redeemable on a specific date, are classified as financial liabilities and the yield is recognised in the income statement as interest expense. Because the PEC agreement specifies a minimum and maximum yield rate, they have been recorded at fair value.

Financial liabilities at amortised cost

Financial liabilities at amortised cost include all financial liabilities excluded from the FVtPL category above. All discounts or premiums are considered in the fair value at initial recognition and subject to subsequent revaluations. Currently the Group presents its loans and borrowings (excluding PECs), other provisions, liabilities toward affiliated companies, trade liabilities and other financial liabilities in this category.

Loans and borrowings are recognised initially at fair value, net of transaction costs incurred and are subsequently carried at amortised cost; any difference between the proceeds (net of transaction costs) and the redemption value is recognised in the income statement over the period of the borrowings using the effective interest method.

Post-employment benefits

Group companies have various post-employment benefit plans: both defined benefit plans and defined contribution plans. A defined contribution plan is a pension plan under which the group pays fixed contributions into a separate entity with no legal or constructive obligations to pay further contributions. A defined benefit plan is a pension plan that is not a defined contribution plan. Typically, defined benefit plans define an amount of pension benefit that an employee will receive on retirement, usually dependent on one or more factors such as age, years of service, and compensation.

Defined benefit plans

The liability recognised in the balance sheet in respect of defined benefit pension plans is the present value of the future benefit that employees have earned in the current and prior years less the fair value of plan assets. The annual calculation of the Group's obligation is performed separately for each plan by a qualified actuary using the projected unit credit method. The discount rate applied is the yield at the reporting date on high quality corporate bonds that have maturity dates approximating the terms of the Group's obligations and that are denominated in the same currency in which the benefits are expected to be paid.

Actuarial gains and losses arising from experience adjustments and changes in actuarial assumptions are charged or credited to equity in other comprehensive income in the period in which they arise. Net interest expenses, past service costs and other expenses related to defined benefit plans are recognised immediately in profit or loss.

The funding policy of the Group for these obligations is a pay-as-you-go basis. No contributions to a dedicated pension fund or trustee are made. Therefore, when the calculation of the Group's obligation results in a benefit to the Group, the recognised change is recorded to the balance sheet obligation.

Defined contribution plans

For defined contribution plans, the Group pays contributions into publicly or privately administered defined contribution pension insurance plans on a mandatory, contractual, or voluntary basis. The Group has no further payment obligations once the contributions have been made. These contributions are recorded as an element of payroll costs when due and prepaid contributions are classified in other assets to the extent that a cash refund or a deduction in future payments is available.

Termination benefits

Termination benefits are payable when employment is terminated by the Group before the normal retirement date or whenever an employee accepts voluntary redundancy in exchange for these benefits. Termination benefits are recognised as expenses when the Group is demonstrably committed, without realistic possibility of withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date or to provide termination benefits as a result of an offer made to encourage acceptance of voluntary redundancy. In the case of voluntary redundancies, the termination benefits are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be reliably estimated.

Share-based payments

The Group has at times offered certain members of management the opportunity to purchase equity shares of a parent company of the Group. To the extent that this entitlement is a portion of the employee's compensation, the difference between the fair value of the shares granted and the purchase price is recognized as an expense in the income statement during the period with a corresponding adjustment to equity.

Other provisions

A provision is recognised if, as a result of a past event, the Group has a present legal or constructive obligation that can be estimated reliably and it is probable that an outflow of economic benefits will be required to settle the obligation. Provisions are determined by discounting the expected future cash flows using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognised as a finance cost.

Warranties

A provision for warranties is recognised when the underlying products or services are sold. The provision is based on historical warranty data and a weighting of all possible outcomes against their associated probabilities.

Restructuring

A provision for restructuring is recognised when the Group has approved a detailed and formal restructuring plan and the restructuring either has commenced or has been publicly announced. No provisions are created for future operating costs.

Onerous contracts

A provision for onerous contracts is recognised when the expected benefits to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is measured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is established, the Group recognises any impairment loss on the assets associated with that contract.

Leases

At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration.

The Group recognises a right-of-use asset and a corresponding lease liability for all lease arrangements in which it acts as a lessee, except for short-term leases and leases of low values assets.

The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received.

The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the Group expects that it will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group's incremental borrowing rate.

The Group determines its incremental borrowing rate by obtaining interest rates from various external financing sources and makes certain adjustments to reflect the terms of the lease and type of the asset leased.

The lease liability is measured at amortised cost using the effective interest method. It is increased by the interest cost on the lease liability and decreased by lease payment made. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, a change in the estimate of the amount expected to be payable under a residual value guarantee, or as appropriate, changes in the assessment of whether a purchase or extension option is reasonably certain to be exercised or a termination option is reasonably certain not to be exercised. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset or is recorded in profit or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group has applied judgement to determine the lease term for some lease contracts in which it is a lessee that include renewal options. The assessment of whether the Group is reasonably certain to exercise such options impacts the lease term, which could significantly affect the amount of lease liabilities and right-of-use assets recognised.

Short-term leases and leases of low values assets

The Group applies the exemption not to recognise right of use assets and lease liabilities for short-term leases and leases of low-value assets. The Group recognises the lease payments associated with these leases directly in profit or loss on a straight-line basis over the lease term.

Current and deferred income tax

Income tax expense comprises current and deferred tax. Income tax expense is recognised in profit or loss except to the extent that it relates to items recognised directly in equity, in which case the tax is also recognised in equity.

Current tax is the expected tax payable on the taxable income for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable with respect to previous years. Additional income taxes that arise from the distribution of dividends are recognised at the same time that the liability to pay the related dividend is recognised.

Deferred tax is recognised using the liability method based on the temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax is not recognised for the following temporary differences: 1) the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss and 2) differences relating to investments in subsidiaries and jointly controlled entities to the extent that it is probable that they will not reverse in the foreseeable future. In addition, deferred tax is not recognised for taxable temporary differences arising on the initial recognition of goodwill. Deferred tax is determined using the tax rates that are expected to be applied to temporary differences when they reverse, based on the laws that have been enacted or substantively enacted by the reporting date.

Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets and they relate to income taxes levied by the same tax authority on either the same taxable entity or different taxable entities where there is an intention to settle the balances on a net basis.

A deferred tax asset is recognised only to the extent that it is probable that future taxable profits will be available against which the temporary difference can be utilised. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that it is no longer probable that the related tax benefit will be realised.

Revenue recognition

Revenue comprises the fair value of the consideration received or receivable for the sale of goods and services in the ordinary course of the group's activities. A five-step model is used to determine when to recognize revenue, and at what amount. In general, revenues are recognised net of any reductions in proceeds, such as discounts for prompt payment, bonuses or rebates, when the customer obtains control of that good or service, provided it is probable that the consideration to which the company is entitled to in exchange for the goods or services will be collected.

Sales of goods

Revenue from the sale of goods is measured at the fair value of the consideration received or receivable, net of returns, trade discounts and volume rebates. Revenue is recognised when control of the goods has been transferred to the buyer and recovery of the consideration is probable. Generally transfer of control is deemed to have occurred when the significant risks and rewards of ownership have been transferred to the buyer, recovery of the consideration is probable, the associated costs and possible return of goods can be estimated reliably, there is no continuing management involvement with the goods, and the amount of revenue can be reliably measured.

The timing of the transfer of control may vary depending on the individual terms of the sales contract. For sales of products, usually transfer occurs when the product is received at the customer's warehouse; however, for some international shipments, transfer occurs upon loading the goods onto the relevant carrier.

Services

The Group also generates revenue from providing services, such as design or installation. Revenue from services rendered is recognised in profit or loss when performed. When the service revenue contract extends over more than one period, revenue is recognised by reference to the stage of completion of the transaction at the balance sheet date.

Commissions

When the Group acts in the capacity of an agent rather than as the principal in a transaction, the revenue recognised is the net amount of commission earned by the Group.

Construction work in progress

For construction contracts, revenue includes the initial amount agreed in the contract plus any variations in contract work, claims, and incentive payments to the extent that it is probable that they will result in revenue and can be measured reliably. As soon as the outcome of a construction contract can be estimated reliably, contract revenue and expenses are recognised in profit or loss "over time" in proportion to the stage of completion of the contract, provided one of the following criteria is met:

―	the customer simultaneously receives and consumes all the benefits provided by the entity as the entity performs;
―	the entity's performance creates or enhances an asset that the customer controls as the asset is created; or
―	the entity's performance does not create an asset with an alternative use to the entity, and the entity has an enforceable right to payment for performance completed to date.

The stage of completion is assessed by reference to the cost-to-cost method. When the outcome of a construction contract cannot be estimated reliably, contract revenue is recognised only to the extent of contract costs incurred that are likely to be recoverable. An expected loss on a contract is recognised immediately in profit or loss.

Construction work in progress balances ("contract assets") are ultimately financial assets and represent the gross unbilled amount expected to be collected from customers for contract work performed to date and consequently converted to cash. Classified as loans or receivables, the contract assets are initially measured at cost plus profit recognised to date less progress billings and recognised losses. Cost includes all expenditures related directly to specific projects and an allocation of fixed and variable overheads incurred in the Group's contract activities based on normal operating capacity.

Contract assets are presented as part of trade and other receivables in the balance sheet. If payments received from customers exceed the income recognised, then the difference is presented as a "contract liability" with other liabilities in the balance sheet.

Research and development costs

Research costs are recorded immediately to the statement of comprehensive income.

Development expenditure are capitalised only if the expenditure can be measured reliably, the product or process is technically and commercially feasible, future economic benefits are probable, and the Group intends to and has sufficient resources to complete development and to use or sell the asset. Otherwise, it is recognised in profit or loss as incurred. Subsequent to initial recognition, development expenditure is measured at cost less accumulated amortisation and any accumulated impairment losses.

Finance income and expenses

Finance income comprises interest income on funds invested, dividend income, changes in the fair value of financial assets at fair value through profit or loss, and gains on derivative instruments that are recognised in profit or loss. Interest income is recognised as it accrues in profit or loss, using the effective interest method. Dividend income is recognised in profit or loss on the date that the Group's right to receive payment is established, which in the case of quoted securities is the ex-dividend date.

Finance expenses comprise interest expense on borrowings, unwinding of the discount on provisions, dividends on preference shares classified as liabilities, changes in the fair value of financial assets at fair value through profit or loss, impairment losses recognised on financial assets, and losses on revaluation or termination of derivative instruments that are recognised in profit or loss. All borrowing costs are recognised in profit or loss using the effective interest method. Realised foreign transaction currency gains and losses are reported in other income or expense as appropriate.

Disposals groups held for sale and discontinued operations

The Group classifies disposal groups as held for sale if their carrying amount will be recovered principally through a sale transaction rather than continuing use and the sale is considered highly probable. Such disposal groups are measured at the lower of their carrying amount and fair value less cost to sell. An impairment loss is recognised if the fair value less cost to sell is lower than the carrying amount. The impairment loss is allocated first to goodwill and then to the remaining assets and liabilities, except for inventories, financial assets, deferred tax assets and employee benefit assets, which are specifically exempt from this requirement and continue to be accounted and measured in accordance with the Group's respective accounting policies. Once classified as held for sale, intangible assets and property, plant and equipment that are part of the disposal group are no longer amortised or depreciated.

The assets and liabilities of a disposal group classified as held for sale are presented separately from the other assets and other liabilities in the balance sheet under the position assets held for sale, respectively liabilities held for sale.

A discontinued operation is a component of the Group that has been disposed of or is classified as held for sale and which:

―	represents a separate major line of business or geographical area of operations;
―	is part of a single co-ordinated plan to dispose of such business line or area of operations;
―	is a subsidiary acquired exclusively with a view to resale.

The classification as a discontinued operation occurs at the earlier of disposal or when the operation meets the criteria to be classified as held for sale. Income and expenses of discontinued operation, as well as gains or losses arising from the measurement to fair value or resulting from disposal are presented separately in the statement of comprehensive income under the position net profit for the year from discontinued operations. The prior-year comparative figures of statement of comprehensive income are adjusted accordingly, as if the operation has been discontinued from the start of the comparative year.

(IV) Use of Estimates and Judgement

The preparation of financial statements in conformity with IFRS as adopted by the European Union requires management to make judgements, estimates, and assumptions that affect the application of accounting policies and the items reported in the consolidated statement of financial position, the consolidated statement of comprehensive income, and the disclosure of contingent assets and liabilities. Actual results may differ from those estimates.

Estimates and underlying assumptions are continually evaluated and are based on historical experience and other factors, including expectations of future events. In the event of any deviation from the original estimate used as the basis for recognition, the carrying amounts of such items are adjusted in the period in which the estimate is revised.

The estimates and assumptions that have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are addressed below.

(a) Estimated impairment of goodwill and other intangibles

The Group tests annually whether the recorded intangibles have suffered any impairment in accordance with the accounting policy stated in Section III. The recoverable amounts of cash generating units (CGUs) have been determined based on value-in-use calculations. These calculations require the use of estimates such as cost of capital and anticipated growth rates. Changes in projections and assumptions could result in material adjustments.

(b) Estimates in income taxes

Current income taxes are calculated based on the respective local taxable income and local tax rules for the period. In addition, current income taxes presented for the period include adjustments for uncertain tax payments or tax refunds for periods not yet finally assessed, however, excluding interest expenses and interest refunds and penalties on the underpayment of taxes. For the case it is probable that amounts declared as expenses in the tax returns might not be recognized (uncertain tax positions), a liability for income taxes is recognized.

The amount is based on the best estimate of the expected tax payment (expected value or most likely amount). Tax refund claims from uncertain tax positions are recognized when it is probable that they can be realized. Only in the case of tax loss carryforwards or unused tax credits, no liability for taxes or tax claim is recognized for these uncertain tax positions. Instead, the deferred tax assets for the unused tax loss carryforwards or tax credits are to be adjusted. [Section VIII - Note 2 and Section IX- Note 22]

(c) Valuation of inventories and receivables

Inventories and receivables are initially recorded at historical cost. Valuation allowances are estimated at each reporting date such that the carrying costs do not exceed net realisable values.

(d) Fair value of financial instruments

When measuring the fair value of an asset or liability, the Group uses market observable data as far as possible. Fair values are categorised into different levels in a fair value hierarchy based on the level of judgment used in the valuation method.

The different levels have been defined as follows:

Level 1:	quoted prices (unadjusted) in active markets for identical assets or liabilities;
Level 2:	inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e., as prices) or indirectly (i.e., derived from prices); and
Level 3:	inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value of financial instruments that are not traded in an active market (for example, preferred equity certificates or over-the-counter derivatives) is determined by using valuation techniques. The Group also carries various available-for-sale financial assets that are carried at cost because the market value and the future cash flows cannot be reliably estimated. For more information about the financial instruments held by the group and the level of judgement use for determining the fair values, see Section VIII - Note 13.

(e) Post-employment benefit obligations

The present value of the post-employment benefit obligations depends on a number of factors that are determined on an actuarial basis and any changes in the assumptions used will impact the carrying amount of pension obligations. The assumptions used in determining the net cost (income) include the discount rate. The Group determines the appropriate discount rate at the end of each year. This is the interest rate that should be used to estimate the present value of expected future cash outflows required to settle the obligations. In determining the appropriate discount rate, the Group considers the interest rates of high quality corporate bonds that are denominated in the currency in which the benefits will be paid and that have terms to maturity approximating the terms of the related liability. Other key assumptions for post-employment benefit obligations are based in part on current market conditions. Additional information is disclosed in Section VIII - Note 10.

(f) Other provisions

Other provisions have been recorded in accordance with IAS 37 and are described in Section VIII- Note 12.

(g) Estimates in stage of completion revenue recognition

The Group uses the stage of completion (PoC) method in accounting for its fixed-price contracts for certain customer-specific products. Use of the stage of completion method requires the Group to estimate the costs incurred to date as a proportion of the total estimated cost to complete the contract.

(h) Lease term in case of extension options

Some property lease contracts either renew automatically if not cancelled by either party or have no fixed end date, but a cancellation period after an initial minimum term. In these cases, economic disincentives to ending the lease are considered when determining the lease term.

(V) Risk Management

The DSI Group is a leading international manufacturer and supplier of post-tensioning, geotechnical, and mining products and is, therefore, exposed to both company and sectorspecific risks. The primary financial risks for the DSI Group relate to liquidity requirements, currency risk from exchange rate fluctuations between the Euro and other currencies, interest rate risk due to rate fluctuations, price risk from fluctuations in the metal/steel commodity markets, and credit risk. Any negative impact from these risks on the Group's results of operations, financial position, net assets, and cash flows is minimised via targeted financial management.

Management has implemented systems and review activities designed to enable management to identify risks and opportunities at an early stage and to act accordingly. Policies for limiting these risks, including through the use of financial derivatives, are provided by the Executive Board and documented by internal Group guidelines (treasury policy and authority limit report).

(a) Liquidity risk

Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they become due. Since the DSI Group is a portfolio company with substantial financial liabilities, the main areas of concern are serving interest payments while securing a sufficient level of liquidity for the Group and for compliance with covenants made with Senior Lenders. Using both short-term cash forecasts and longer-term financial plans, Group treasury monitors operational liquidity, covenant compliance, and internal targets. Results of these analyses are communicated to the Executive function where risk relevant considerations are taken.

Cash flow forecasting is performed in the operating entities of the group and aggregated by group finance on a weekly basis. In this way, the Group monitors the level of expected cash inflows together with expected cash outflows. At 31 December 2020, the expected cash inflows for the subsequent three months were € 241,941 thousand (thereof € 145,609 thousand from the DSI Underground Group) and expected cash outflows for the same period were € 266,424 thousand (thereof € 149,191 thousand from the DSI Underground Group). Net cash outflows in Q1 and net cash inflows in Q2 to Q4 is consistent with the normal Group cash flow trend. At no point in the forecast period were cash levels expected to drop below € 36.4 million (thereof € 30.4 million attributable to the DSI Underground Group), showing that the Group will have sufficient liquidity to meet its liabilities when they are due.

The liquidity runoff shown in the following tables provide insight into how the liquidity situation of the Group is affected by the cash flows from financial liabilities at 31 December 2020. It comprises a runoff of the undiscounted principal of the financing liabilities, as well as the cash outflows for interest on the senior debt, for the respective time period.

Projected cash outflows from financial liabilities at 31 December 2020

31. December 2020				Timing
in '000 EUR	Category	Carrvina Value 2019	Total projected outflows	2021	2022	2023 to 2025	2026 to 2030	Beyond 2030
Preferred equity certificates	FVtPL	286,593	309,979	309,979
Bank loans and borrowings (excluding SHL) ¹⁾	FLAC	59,190	62,504	7,420	53,814	1,270
Shareholder loan (SHL)	FLAC	11,003	11,003	8,786	2,217
Lease liabilities	n.a.	21,472	21,472	5,661	3,779	9,645	2,387
Accounts payable	FLAC	36,181	36,181	36,181
Other financial liabilities	FVtPL	3,988	3,988	3,988
Total		418,427	445,127	372,015	59,810	10,915	2,387	0

¹⁾ Loans at different interest rates from LIBOR/EURIBOR + 2.5% p.a. to LIBOR/EURIBOR + 45% p.a.; terms range up to 30 June 2022.

Projected cash outflows from financial liabilities at 31 December 2019

31. December 2019				Timing
in '000 EUR	Category	Carrvina Value 2019	Total projected outflows	2020	2021	2022 to 2024	2025 to 2029	Beyond 2028
Preferred equity certificates	FVtPL	265,130	310,164		310,164
Bank loans and borrowings (excluding SHL) ¹⁾	FLAC	298,930	342,739	50,963	20,724	271,052
Shareholder loan (SHL)	FLAC	10,472	10,472	8,089	166	2,271
Lease liabilities	n.a.	61,821	72,547	14,244	12,261	24,324	21,718
Accounts payable	FLAC	119,752	119,752	119,752
Derivatives	FVtPL	164	164	164
Other financial liabilities	FVtPL	14,414	14,963	13,182	1,781
Total		770,683	870,801	206,394	345,096	297,593	21,718	0

¹⁾ Loans at different interest rates from LIBOR/EURIBOR + 2.5% p.a. to LIBOR/EURIBOR + 4.5% p.a.; terms range up to 30 June 2022.

The projected cash outflows as at 31 December 2019 include financial liabilities attributable to the DSI Underground Group which is presented in the current year as a disposal group held for sale.

In addition to close monitoring of projected cash inflows and outflows, the DSI Group has a revolving line of credit facility of € 31.3 million (thereof € 20 million attributable to DSI Underground Group) that can be accessed to meet temporary liquidity needs. The DSI Group has drawn € 4.0 million on this facility at 31 December 2020. Of the remaining available credit line, € 4.0 million was blocked to cover letters of credit and bank guarantees leaving a total of € 23.3 million unutilized at year-end.

(b) Exchange rate risk

The Group operates internationally and is exposed to foreign exchange (FX) risks arising from various currency exposures, primarily with respect to the US dollar, the Australian dollar, and the Canadian dollar. Together with the Euro, these are the primary functional currencies of group companies. The DSI Group manages and controls currency risks primarily through the Group's regular operating and financing activities, but also uses derivative financial instruments (in particular FX swaps, FX futures, and FX forwards) when deemed appropriate. The foreign exchange risk to which the DSI Group is exposed is limited by the fact that the financial debt held reflects to a considerable degree the currency mix of the cash flows generated by the underlying operations of the Group.

Some group companies are exposed to the risk of foreign exchange losses due to balances held in currencies other than their functional currency. At 31 December 2020, a 10% increase/decrease in the US dollar compared to the Euro with all other variables held constant would result in an estimated positive/negative impact to pre-tax profit of continuing and discontinued operations of € 519 thousand due to foreign exchange gains/losses (in 2019: negative/positive € 724 thousand). This risk relates primarily to accounts receivables held in Mexico and inter-Group payables held in Luxembourg and Germany. A 10% increase/decrease in Euro would result in an estimated positive/negative impact to pre-tax profit of continuing and discontinued operations of € 2,404 thousand (in 2019: positive/negative € 648 thousand). This risk primarily relates to a Euro denominated bank loan and intergroup payables held by various subsidiaries. Aside from these borrowing and inter-Group financing arrangements, DSI Group companies typically hold only minimal balances in currencies other than their functional currency and the risk from exchange rate fluctuations at year end is insignificant.

In relation to currency risks, the DSI Group is mainly covered by natural hedges, meaning that most companies are operating within their respective currency region. Businesses also operating outside their own FX region (e.g. UK purchases in U.S. dollars, Poland business conducted in Euro) and intercompany transfers in a currency other than the functional currency are either addressed via direct FX trades or FX swaps.

When significant projects are won with cash flows in foreign currencies, FX forward contracts may be arranged to limit the risk due to currency fluctuations. The following FX forwards were outstanding at the reporting date.

FX Futures	Settlement Date	Amount to pay	Amount to receive	M-T-M Value
		'000	'000	'000 EUR
DSI Underground (Luxembourg)	various 2021	8,262 AUD	6,000 USD	-319

(c) Interest rate risks

The current finance structure of the DSI Group was set up in conjunction with the acquisition in June 2011 and the subsequent refinancing exercises in 2017 and 2018. Interest charges on long-term borrowings are based on the applicable floating base rate (e.g., EURIBOR or USD LIBOR) for each 1-month period plus a fixed margin. Therefore, the interest rate risk is primarily related to the base rates applicable to these loan balances.

Outstanding risk

Interest expense for the year ending 31 December 2020 is reported at € 17.9 million (thereof € 13.0 million presented in discontinued operations) and € 16.7 million was paid out in cash for interest. In 2019, interest was reported at € 20.0 million (thereof € 14.2 million presented in discontinued operations) of which € 16.8 million were cash items. The yield on preferred equity certificates for other periods is entirely non-cash.

A 1.0 percentage point movement in the underlying base rates would result in additional annual cash interest costs of € 2,470 thousand (thereof € 2,011 thousand attributable to discontinued operations) for the outstanding bank loans.

(d) Price risk

DSI Group's niche market position bears a certain risk of unfavourable movements in metal/steel commodity prices; not only due to raw material development, but also due to supplier market power. At the same time, possible price increases can usually be passed on to customers as their range of potential suppliers is also limited. To reduce the supplier risk, alternative suppliers for key products are identified and global sourcing initiatives have been put into place to leverage price differences across the globe. The Group also aims to set prices for a longer term where favourable or necessary, as well as to negotiate contracts that compensate for sudden raw material price movements. Market risks are evaluated by monitoring changes in key economic indicators and market information on an ongoing basis.

(e) Credit risk

Credit risk is the risk of economic loss arising from a counterparty's failure to repay or service debt according to the contractual terms. Credit risk encompasses both the direct risk of default and the risk of a deterioration of creditworthiness as well as concentration risks.

Cash and cash equivalents

In connection with cash and cash equivalent balances € 75.1 million (thereof € 41.9 million presented with assets of disposal group held for sale) at 31 December 2020 and € 56.6 million at 31 December 2019, the Group is exposed to credit-related losses to the extent that banks fail to fulfil their obligations. In line with the Group's risk policy, the Group will only establish and maintain bank relationships with banks that have a rating for its long-term unsecured and non credit-enhanced debt obligations of BBB or higher by Standard & Poor's Rating Services (S&P) or have a similar rating from a comparable rating agency. Liquid assets are held only in low risk-rated countries and operating businesses to the extent deemed necessary for operational purposes.

Trade and other receivables

The Group is subject to credit risks for its outstanding receivables up to a maximum of the carrying amounts of the receivables (see balances in Section VIII - Note 5). The risk is not concentrated into only a few significant companies but spread over a wide customer base. The nature of the risk is influenced mainly by the individual characteristics of each customer. The Group provides credit in the normal course of business and performs ongoing credit evaluations on certain financial conditions of its customers, but does not generally require collateral to support its receivables. In the case of doubtful receivables, write-downs are recorded according to the risk of default for certain customers based on historical experience in collecting receivables as well as other available information. In order to keep credit risk at a minimum, the Group limits itself to partners with good credit worthiness mainly based on the evaluations of national and international product credit information services and it maintains consistent risk limits as indicated by the product credit insurance institutes. No general allowances are recorded for credit risk.

(f) Capital risk management

The DSI Group's capital management is performed using a leverage ratio, i.e., the ratio of consolidated total net debt to consolidated EBITDA. This ratio is included in the covenants for the Group's Senior Facility Agreements (SFA), originally adopted on 10 June 2011 and split in September 2018, and represents the primary target for the capital structure. Compliance for both divisions is tested quarterly against the applicable target ratio for the period. Necessarily, adjustments to the capital structure and its maintenance are managed by the Group through investments and working capital management, in accordance with the SFA.

Management EBITDA is the consolidated profits from ordinary activities as defined in the SFA before interest, taxes, depreciation, and amortisation. At 31 December 2020, the DSI Underground Group reported Management EBITDA for the full year of € 88.6 million and consolidated total net debt of € 169.9 million. After adjustments for EBITDA attributable to COVID-19 of € +1.4 m and non-controlling interests € +0.0 million, this resulted in a leverage ratio for the period of 1.89:1 times. The maximum acceptable ratio was 2.55:1.

At 31 December 2020, the DYWIDAG Group (Construction) reported Management EBITDA for the full year of € 26.3 million and consolidated total net debt of € 49.1 million, both numbers are after excluding the impact of IFRS 16. After adjustments for EBITDA attributable to noncontrolling interests € -0.0 million, this resulted in a leverage ratio for the period of 1.43:1 times. The maximum acceptable ratio was 2.75:1.

The maximum acceptable ratio declines over the term of the senior loans, but based on current business plans management believes the Group will continue to comply with these requirements. The next test date is 31 March 2021 and the maximum leverage ratio will be 2.55:1 for DSI Underground and 2.75:1 for DYWIDAG.

(VI) Changes to the Consolidated Group

The changes in the consolidated Group for 2020 are presented below:

1. Formation of DSI Underground Ventilation Systems S.p.A.

On 01 September 2020, DSI Underground Chile S.p.A. entered into an agreement with ABC Ventilation LATAM Ltd. to form a new company in Chile, DSI Underground Ventilation Systems S.p.A. The new company will provide manufacturing, designing, engineering, and maintenance services of ventilation, ducting, and environmental systems. DSI Underground is the controlling shareholder with 51 % ownership.

2. Formation of DSI Underground SMART S.à r.l.

On 27 October 2020, a new company, DSI Underground SMART S.à r.l., was incorporated in Luxembourg, with capital contributed from its direct parent company DSI Underground Holdings S.à r.l. The object of new company is to develop a portfolio of intelligent, digital solutions and services through acquisitions or organic growth.

3. Internal Restructuring

Effective 17 November 2020, DSI International Luxembourg S.à r.l. acquired 100% of the share capital of DSI Consulting (Shanghai) Co. Ltd, a company headquartered in China, from DSI Underground Holdings S.à r.l. This transaction is an intra-Group transaction, part of the Underground and Construction business reorganization. Therefore, no adjustments have been made to the book value of the assets and liabilities that were transferred.

The consulting services provided by DSI Consulting (Shanghai) Co. Ltd to DSI Underground Group will continue to be performed in the future by a new purchasing office, which is being formed in Shanghai.

4. Formation of new subsidiaries in India and China

During the current financial year, the DSI Underground formed two new companies in India and China, respectively DSI Underground India Private Limited and DSI Underground Consulting (Shanghai) Co. Ltd. The companies are expected to start operations at the beginning of 2021.

5. Sale of Interspan Joint Venture

Effective 8 May 2020, DSI Construction Holdings Luxembourg S.à r.l. sold its 50% ownership in DYWIDAG Interspan Holdings B. V. for a consideration of €69.5 thousand to Interspan Europe Limited, recognising a loss on disposal of €33 thousand.

6. Internal Restructuring within DYWIDAG Group (Construction)

During the year ending 2020, DYWIDAG Group has completed restructuring projects in France. As a result of these, some fully consolidated subsidiaries of the Group were merged in order to simplify business operations.

(VII) Investments held by the Group at 31 December 2020

The following table shows consolidated subsidiaries, joint ventures, and other nonconsolidated legal entities of Tension II Acquico S.à r.l., Luxembourg being the ultimate parent of the DSI Group at 31 December 2020:

Name and registered office of company	Percentage ownership	Equity as at 31 Dec 2020	Earnings 2020
	%	€ 000	€ 000
Tension II AcquiCo S.à r.l. Luxembourg	Parent	-55,510	-17,717
Fully consolidated subsidiaries - Continuing operations
DYWIDAG-Systems Intl. Construction Pty Ltd. (Australia), New South Wales, Australia	100	1,429	29
DYWIDAG SYSTEMS INTERNATIONAL N.V. Leuven, Belgium	100	1,339	-41
DYWIDAG ENGENHARIA E PARTICIPAÇÕES LTDA. Sao Paulo, Brazil	100	-2,507	-1,113
PROTENDIDOS DYWIDAG LTDA Sao Paulo, Brazil	100	-2,549	-770
Prepron - Sistema de Protensão Ltda. Sao Paulo, Brazil	100	719	-416
Rally - Indústria, Comércio e Usinagem de Metais Ltda. Sao Paulo, Brazil	100	13	-
Prepron Industrial Ltda., Sao Paulo, Brazil	100	106	-
DSI Latin America Participacoes Ltda, Sao Paulo, Brazil	100	-1,705	-4
DSI Canada Civil LTD Gormley, Canada	100	9,344	2,520
DSI - DYWIDAG-Systems Construcción SPA Santiago, Chile	100	-179	-366
DYWIDAG (Shanghai) Engineering Technology Co. LTD. Shanghai, China	45	-191	-483
DSI Consulting (Shanghai) Co. Ltd Shanghai, China	100	-29	-10
DYWIDAG S.A.S. (formerly DSI Colombia S.A.S.) Medellin, Colombia	100	1,234	117
TAM Groupe S.A.S. (formerly TECHNIQUE BETON S.A.S.) Moissy Cramayel, France	100	10,184	-700
DSI HOLDING FRANCE S.A.S. Gonesse, France	100	9,493	-5,254
SCI Gonesse S.A.S. Gonesse, France	100	620	557
DSI FRANCE S.A.S. Dagneux, France	100	333	26
DSI Holding GmbH München, Germany	100	14,748	-5,428 ^a)
DYWIDAG-SYSTEMS International GmbH München, Germany	100	31,818	-180 ^a)
DYWIDAG SYSTEMS INTERNATIONAL LIMITED Southam, Warwickshire, Great Britain / England	100	5,823	1,050
DSI Construction Holdings UK Ltd. Southam, Warwickshire, Great Britain / England	100	-2,734	-1,444
Dywidag Ltd (formerly Datum Monitoring Services Limited) Bury, Lancashire, Great Britain / England	100	1,930	-1,006
Atlas Pile Testing Limited Bury, Lancashire, Great Britain / England	100	-4	25
DYWIDAG SYSTEMS INTERNATIONAL FAR EAST LIMITED Wanchai, Hong Kong	100	1,591	104
DYWIDAG-SYSTEMS INTERNATIONAL SPP - ASIA LIMITED North Point, Hong Kong	75	-136	213
DSI Bridgecon India Pvt. Limited New Delhi, India	51	4,156	1,197 ^c)
DYWIDAG Systems International India Pvt. Ltd. New Delhi, India	99.999	16	-6 ^c)
DYWIDAG SYSTEMS S.R.L Milan, Italy	100	4,873	766
DYWIDAG SYSTEMS KOREA CO., LTD. Seoul, Korea	100	585	-185
DSI International Luxembourg S.à r.l. Luxembourg	100	31,477	-1,851
DSI Construction Holdings Luxembourg S.à r.l. Luxembourg	100	-5,679	-1,050
Jupiter Luxco 1 S.à r.l. Luxembourg	100	-79	-9
Dyhoc Services B.V. Zaltbommel, the Netherlands	100	3,931	19
DYWIDAG Systems International B.V. Zaltbommel, Netherlands	100	5,626	234
DSI-DYWIDAG Construcción Peru SAC Lima, Peru	100	-524	-233
DYWIDAG sp. z o.o. (formerly DYWIDAG-Systems International sp. z o.o.) Ruda Slaska, Poland	100	56	-711
Partec System sp. z o.o. Wroclaw, Poland	100	1,206	251
DSI Middle East W.L.L. Doha, Qatar	49	92	-695 ^b)
DYWIDAG-Systems International Saudi Arabia, LLC Riyahd, Saudi Arabia	100	-748	-290
DYWIDAG SISTEMAS CONSTRUCTIVOS SA Fuenlabrada, Spain	100	7,818	1,911
DSI Holding USA, Inc. Bolingbrook, Illinois USA	100	59,800	2,390
DSI USA, LLC Bolingbrook, Illinois USA	100	10,751	-1,021
DYWIDAG SYSTEMS INTERNATIONAL USA, Inc. Bolingbrook, Illinois USA	100	58,148	-1,394
Fully consolidated subsidiaries - Disposal Group
DSI Underground Argentina S.A. Buenos Aires, Argentina	80	203	-607
DYWIDAG Systems International Pty. Ltd. Bennets Green, Australia	80	148,580	14,040
DSI Australia (Holdings) Pty. Ltd. Bennets Green, Australia	80	-1,225	-435
DSI HOLDINGS 1 AUSTRALIA PTY LTD Bennets Green, Australia	80	55,344	-109
DSI HOLDINGS 2 AUSTRALIA PTY LTD Bennets Green, Australia	80	3,029	-2,706
Stratabolt Resins Australia Pty Ltd. Bennets Green, Australia	80	4,358	906
Heintzmann Australia Pty. Ltd. Wyong, Australia	80	114	-4
Fero Group Pty Ltd Perth, Australia	80	16,355	1,588
Fero Group (Queensland) Pty Ltd Perth, Australia	80	8,234	2,570
Fero Reinforcing Pty Ltd Perth, Australia	80	10,268	733
Fero Strata Systems Pty Ltd Perth, Australia	80	7,758	3,478
DSI Underground Austria GmbH Pasching, Austria	80	10,645	-2,694
DSI Underground Systems Brasil Indústria e Comércio Ltda Nova Lima, Brazil	80	345	178
DSI Underground Canada, Ltd. Saskatoon, Canada	80	107,828	-237
11740750 CANADA LIMITED Saskatoon, Canada	80	2,062	-98
DSI Underground Chile SpA Quilicura - Santiago, Chile	80	7,758	97
DSI Underground Ventilation Systems SpA Quilicura - Santiago, Chile	40.8	1,366	-48
DSI Underground Consulting (Shanghai) Co. Ltd Shanghai, China	80	0	0 ^d)
DSI Underground Colombia S.A.S. Medellin, Colombia	80	352	123
DSI Underground Multitex s.r.o. Frýdek-Místek, Czechia	80	732	410
Schaum-Chemie Beteiligungen 1 GmbH München, Germany	80	4	-1
DSI Underground GmbH München, Germany	80	1,217	887
DSI Underground UK LIMITED Southam, Warwickshire, Great Britain / England	80	771	80
DYWIDAG SYSTEMS HOLDINGS UK LIMITED Southam, Warwickshire, Great Britain / England	80	1,631	-252
DSI Underground India Private Limited Delhi, India	80	0	0 ^d)
DSI UNDERGROUND, PT Jakarta, Indonesia	80	11,071	771
DSI UNDERGROUND, PT Jakarta, Indonesia	80	14,478	3,492
DSI Underground IP Holdings Luxembourg S.à r.l. Luxembourg	80	-525	-212
Jupiter Luxco 2 S.à r.l. Luxembourg	80	-395	-102
DSI Underground Holdings S.à r.l. Luxembourg	80	198,462	2143
DSI Underground SMART S.á r.l. Luxembourg	80	2	-10
DSI Underground MEXICO, S.A. DE C.V. Jalisco, Mexico	80	6,580	2,723
Mansour Mining Technologies De Mexico S.A. DE C.V Chihuahua, Mexico	80	604	50
Mansour Mining Technologies De Mexico Servicios Chihuahua, Mexico	80	34	28
DSI Underground Peru SAC Lima, Peru	80	1,228	25
DSI Schaum-Chemie Sp. z.o.o. Mikolow, Poland	80	11,967	2,282
DSI Underground Merol Sp. z.o.o. Stalowa Wola, Poland	80	12,310	1,916
DSI Underground Poland Sp. z.o.o. Krakow, Poland	80	247	83
DSI Underground Chemicals Sp. z.o.o. Mikolow, Poland	80	752	217
OOO DSI Techno Kemerovo, Russia	80	2,295	851
DSI Underground Spain SAU Los Campos, Spain	80	5,174	490
DSI UNDERGROUND NORDICS AB Skelleftea, Sweden	80	877	329
DSI Tunneling LLC Salt Lake City, Utah USA	80	5,074	-195
Entities consolidated at equity
Rocbolt Resins Pty. Ltd. Smeaton Grange, Australia	40	4,136	1,688
Liuzhou OVM-DSI Technology Co., Ltd. Liuzhou City, China	49.9	2,129	42
Rocbolt Technologies Holdings Mongolia S.à r.l. Luxembourg	40	73	-53 ^e)
Rocbolt of Mauritius Ltd. Port Louis, Mauritius	40	28,002	7,083 ^{c) e)}
OOO DSI-PSK Moscow, Russia	50	293	-32
Rocbolt Technologies Holdings Pty. Ltd. Alberton, South Africa	40	6,744	546 ^e)
Non-consolidated entities
DYWIDAG Verwaltungsgesellschaft mbH, Munich, Germany	50		^f)

^a) After impact of transfer-of-profit agreement

^b) Economic interest differs from shareholding percentage. See Note 8.

^c) Based on results of management reporting from 01 January to 31 December; the company's financial year differs from the calendar year.

^d) Newly formed entities that are not yet active.

^e) These are holding vehicles for joint ventures. Consolidated financial statements for these companies are not available. Results of their operating subsidiaries are shown here and included in Section (XI)

^f) Annual financial statements not available.

(VIII) Notes to the Consolidated Statement of Financial Position

Security

At 31 December 2020 and at 31 December 2019 basically all assets of the DSI Group are pledged to secure the bank loans according to the SFA.

To limit the credit risk, the financing agreements for the bank loans also include some restrictions regarding the granting of loans within the Group or between the two divisions as well as the payment of dividends.

Note (1) Intangible assets, property, plant and equipment and investments carried at-equity.

The carrying amounts for intangible assets and property, plant and equipment are as follows:

€ 000	31 Dec 2020	31 Dec 2019 (restated)
Goodwill	13,622	124,191
Brands, technologies, customer relationships, and software	67,332	165,743
Total intangibles assets	80,954	289,934
Land and buildings	12,404	30,706
Plant, machinery, and transport equipment	10,859	57,096
Other plant, operating, and office equipment	1,935	8,442
Assets under construction	4,469	10,368
Right of use assets	21,052	60,967
Total property, plant, and equipment	50,719	167,579

In the current year, intangible assets and property, plant, and equipment of DSI Underground has been reclassified to assets of disposal group held for sale. For more information see Section (XI) Disposal Group Held for Sale and Discontinued Operations.

Fluctuations due to exchange rate changes

Goodwill and fair value acquisition accounting adjustments related to a foreign operation are expressed in the functional currency of the foreign operation and are translated at the exchange rate at the reporting date like other assets and liabilities.

Change in estimates

There are no changes in estimates of any amortisation period during the financial year from 01 January to 31 December 2020.

Useful lives

Except in the case of goodwill and brands, useful lives can be determined for all intangible assets and property, plant, and equipment.

Capitalisation of interest and internal software costs

Capitalisation of interest on capital investments in progress as well as of internal software costs has not been recorded as such entries would not have a material impact on the financial statements.

Adjustments of past business combinations

In the current year, the acquisition entries related to the October 2019 acquisition of the Mansour Group and the May 2019 acquisition of Partec Sp. Z o.o. have been updated. Initially the excess consideration over the book value of the net assets acquired was shown fully in goodwill. Following the completion of a purchase price allocation exercise, the difference between the purchase price and the acquisition date book values of the net assets have been allocated as follows:

Valuation adjustments (in 000 EUR):	Mansour Group	Partec Sp. Z o.o
Inventory	1,073	46
Customer relationships	8,072	810
Trademark	0	347
Property, plant, and equipment	334	52
Deferred tax liabilities	-2,582	-238
Goodwill (remainder)	22,594	1,943
Total	29,491	2,960

The balance sheet values at 31.12.2019 have been restated to reflect these adjustments in accordance with IFRS 3.49. No other changes to the initial values have been recorded for past business combinations.

Statement of Changes in Non-Current Assets

The following tables show the Statement of Changes in Non-Current Assets for the financial years 2020:

in '000 EUR	Intangibles		Property, Plant and Equipment
	Goodwill	Brands, technologies, customer relationships,	Land and buildings	Plant, machinery and transport equipment	Other plant, operating and office equipment	Assets under construction	Right of use assets
Cost
31 Dec 2019	124,191	234.487	58.603	168.084	23,254	10.368	75.839
Additions	0	1,940	1,498	6.625	617	9,767	15,717
Changes in consolidation	777	-37	0	1	-3	0	0
Disposals	0	-558	-7,171	-4.549	-2,143	-526	-2,155
Reclassifications	0	442	3,543	-5.629	-489	-4,557	-29
FX Translation effect	-3,126	-5,748	-1,815	-5,867	-557	-669	-2,378
Reclassification as held for sale	-108,220	-134,213	-25,561	-93,527	-12,940	-9,914	-54,025
31 Dec 2020	13,622	96,313	29,097	65,138	7,739	4,469	32,969
Accumulated amortisation/depreciation
31 Dec 2019	0	68,744	27,897	110,988	14,812	0	14,872
Additions	0	10,002	1,909	9,477	1,311	0	11,897
Changes in consolidation	0	46	0	-2	-1	0	0
Disposals	0	-397	-4,831	-4,138	-2,018	0	-1,530
Reclassifications	0	2	13	-6,520	-177	0	-24
FX Translation effect	0	-1,951	-727	-3,708	-342	0	-587
Reclassification as held for sale	0	-47,466	-7,568	-51,818	-7,782	0	-12,711
31 Dec 2020	0	28,981	16,693	54,279	5,804	0	11,917
Carrying Amount	13,622	67,332	12,404	10,859	1,935	4,469	21,052

Due to classification of the DSI Underground Group as a disposal group/discontinued operation in accordance with IFRS 5, the associated amortisation and depreciation additions stated in the Statement of Changes in Non-Current Assets are presented in the net profit for the year from discontinued operations line.

The following tables show the Statement of Changes in Non-Current Assets for the financial year 2019:

in '000 EUR	Intangibles		Property, Plant and Equipment
	Goodwill	Brands, technologies, customer relationships.	Land and buildings	Plant, machinery and transport equipment	Other plant, operating and office equipment	Assets under construction	Right of use assets
Cost
31 Dec 2018	120.810	204.560	56,203	149,290	20,909	4.685	6,517
Transition IFRS 16							63,205
Additions	96	1,229	1,133	6.209	3,141	8,201	5,525
Changes in consolidation	18,058	11.970	10	8,231	149	0	52
Disposals	0	-388	-32	-2,012	-1,650	-30	-431
Reclassifications	-16,848	14,420	560	4,410	340	-2.662	669
FX Translation effect	2,075	2,696	729	1,956	365	174	302
31 Dec 2019	124,191	234,487	58,603	168.084	23,254	10.368	75,839
Accumulated amortisation/
31 Dec 2018	0	57.112	26,451	101,148	13,695	0	2,905
Additions	0	11,037	1,956	9.629	2,189	0	12,281
Changes in consolidation	0	8	2	211	49	0	0
Disposals	0	-361	-10	-1,303	-1,218	0	-376
Reclassifications	0	6	-788	116	-102	0	0
FX Translation effect	0	942	286	1,187	199	0	62
31 Dec 2019	0	68,744	27,897	110,988	14,812	0	14,872
Carrying Amount	124,191	165,743	30,706	57,096	8,442	10,368	60,967

Intangible assets include the following items:

a) Goodwill by cash generating unit

The following table shows the goodwill for the cash generating units as defined and managed by the DSI Group:

€ 000	31 Dec 2020	31 Dec 2019 (restated)
Underground Asia Pacific		75,403
Underground North America	Assets related to disposal group	26,701
Underground South America		1,036
Underground Europe		5,992
Construction Europe	6,308	6,578
Concrete Accessories	3,240	3,459
Construction North America	1,453	1,578
Construction South America	2,621	3,444
Total	13,622	124,191

The goodwill recorded by the DSI Group is recognised at cost less any accumulated impairment losses. It resulted primarily from a purchase price allocation prepared in conjunction with the acquisition of the DSI Group by the Company on 15 June 2011, but also from subsequent acquisition activity.

The 2020 decrease in the goodwill for the Underground CGUs results from the reclassification to assets held for sale of DSI Underground Group assets, in accordance with the requirements of IFRS 5.

b) Brands, technologies, and customer relationships

The following table shows the book values of the brands, technologies, and customer relationships:

	Remaining Useful Lives	31 Dec 2020	31 Dec 2019 (restated)
	(Yrs)	€ 000	€ 000
Umbrella brand "DSI"	indefinite	39,692	96,958
Corporate brand "ALWAG"	held for sale	0	5,124
Corporate brand "Technique Beton"	indefinite	7,532	7,532
Corporate brand "Mandelli Setra"	indefinite	4,378	4,378
Corporate brand "Arteon"	indefinite	4,327	4,327
Corporate brand "Contec"	indefinite	2,680	2,680
Corporate brand "Fasloc"	held for sale	0	1,911
Corporate brand "ACI"	held for sale	0	2,512
Core post-tensioning technology	3.5	1,922	2,773
Core geotechnics technology	3.5	2,614	3,753
Core tunnelling technology	held for sale	0	1,020
Core mining technology	held for sale	0	5,901
Customer relationships - Underground North America	held for sale	0	8,558
Customer relationships - Construction North America	1.5	172	556
Customer relationships - Underground Asia Pacific	held for sale	0	10,938
Customer relationships - EMEA	various	854	1,354
Customer relationships - DY.CO	8.5	661	810
Prepron intangibles	various	503	751
Other intangibles	various	1,997	3,907
Total		67,332	165,743

The brands, technology assets, and customer relationships shown were identified and valued as part of purchase price allocations starting with the acquisition of the DSI Group in June 2011 and a number of subsequent acquisitions since that date.

The other intangibles line includes software, license agreements, non-compete agreements, as well as various other intangibles acquired after June 2011, but not listed separately.

The brands, technologies, and customer relationships of the DSI Underground Group were reclassified in the current year to assets of disposal group held for sale.

Amortisation and any impairment of the intangibles are included in General administrative expenses. However, due to classification of DSI Underground Group as a disposal group/discontinued operation in accordance with IFRS 5, the amortisation of DSI Underground Group intangibles is presented in the net profit for the year from discontinued operations line.

c) Impairments

For purposes of the annual impairment testing, the goodwill of the DSI Group is allocated to cash generating units (CGUs). These cash generating units represent the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or groups of assets.

The recoverable amount of each CGU has been determined based on value-in-use calculations. An impairment loss is recorded to the extent that the carrying value exceeded the recoverable amount. These calculations use pre-tax cash flow projections based on financial budgets approved by management covering a six-year period. The calculations for 2020 include a 2% terminal growth rate after the fifth planning year for all CGUs. The projected cash flows are discounted using a pre-tax discount rate.

The key assumptions used in the estimation of the recoverable amount are set out below.

	Construction
Assumptions ¹	2020	2019
Discount rate (pre-tax)	10.7%	10.8%
Terminal value growth rate	2%	2%
Budgeted EBITDA growth rate (avg. of next 4 years) ²	16.7%	15.9%

^1. In 2020, DSI Underground have been classified as a discontinued operation according to IFRS 5.
^2. The budgeted growth rate is calculated after a pro-forma adjustment to 2020 for new acquisitions.

For the other major categories of intangible assets, the carrying value is compared against the discounted projected cash flows allocable to that asset. An asset is considered to be impaired if the recoverable amount is lower than the carrying amount. No impairment adjustments for 2020 were identified.

d) Right-of-use (lease) assets

The DSI Group leases property in many locations worldwide as well as production equipment and vehicles under a number of lease agreements. Some leases provide the Group with the option to purchase the equipment at a beneficial price.

The following table shows the net carrying amount of right-of-use assets from lease contracts:

€ 000	31 Dec 2020	31 Dec 2019
Warehouse, manufacturing, or office facilities	18,316	49,598
Plant, machinery, vehicles and other	2,736	11,369
Total	21,052	60,967

The 2019 net carrying amount include € 34,684 thousand for warehouse, manufacturing, or office facilities and € 8,245 thousand for machinery/equipment and vehicles attributable to DSI Underground.

During 2020, the DSI Group acquired € 15,717 thousand (of which € 5,542 thousand is attributable to DSI Underground) of right-of-use assets due to new lease contracts or lease renewals (in 2019: € 5,525 thousand, of which € 1,989 thousand is attributable to DSI Underground).

e) Interest in associates

The DSI Group has an interest in one associate, OOO DSI-PSK (Russia). OOO DSI-PSK is operating in the construction industry and mainly sources products from DSI Group subsidiaries for resale to customers in Russia. The Group owns 50% of the equity interests and is considered to have significant influence, but it does not control the strategic financial and operating decisions of the company. The investment was carried at equity at all balance sheet dates. The table to the right shows financial information of OOO DSI-PSK at the balance sheet dates, not adjusted for the percentage ownership held by the DSI Group.

Summary Financial Information - OOO DSI-PSK (Russia)
€ 000	2020	2019
Non-current assets	6	14
Current assets	318	408
Total assets	324	422
Non-current liabilities	-	-
Current liabilities	31	-
Total liabilities	31	-
Revenues	70	169
Expenses	-102	-378
Profit	-32	-209

OOO DSI-PSK is recognised at equity and has a carrying value of € 156 thousand (at 31 December 2019: € 223 thousand). The following table gives an overview of the change in carrying value in 2020:

€ 000	2020	2019
Beginning balance	223	289
Share of profit/loss from OOO DSI-PSK, Russia	-16	-105
Effect of foreign exchange rate differences	-48	39
Ending balance	156	223

f) Joint ventures

Underground

The DSI Underground Group participates in four joint arrangements by holding ownership interests in Australia based Rocbolt Resins Pty. Ltd. (in short: "Rocbolt Australia"), South Africa based Rocbolt Technologies Holdings Pty. Ltd. (in short: "Rocbolt South Africa"), Mauritius based Rocbolt of Mauritius Ltd. (in short: "Rocbolt China" in reference to its subsidiary), as well as Luxembourg based Rocbolt Technologies Holdings Mongolia S.à r.l. (in short: "Rocbolt Mongolia".

In 2020, due to the classification of DSI Underground Group as a disposal group/discontinued operation, the investments in the four joint arrangements have been reclassified to assets of disposal group held for sale.

Details about the financial statements of the joint ventures for the years ending 2020 and 2019 respectively, are summarised in Section (XI) Disposal Group Held for Sale and Discontinued Operations.

DYWIDAG

The DYWIDAG Group participates in a joint arrangement by holding 49.9 % of the interests in China based Liuzhou OVM-DSI Technology Co., Ltd. During the year ending 31 December 2020 the Group made capital commitments to the amount of € 314 thousand. As at 31 December 2020 the Group has an outstanding current liability of € 314 thousand in relation to amounts due for the capital contribution.

The following table summarise the financial statements of the Liuzhou OVM-DSI for the years ending 2020 and 2019 respectively:

	Liuzhou OVM-DSI
€ 000	2020	2019
Non-current assets	404	532
Current assets	1,661	1,509
Total assets	2,065	2,041
Non-current liabilities	-	-
Current liabilities	560	542
Total liabilities	560	542
Revenues	2,562	666
Expenses	-2,520	-1,090
Profit	42	-424
Share attributable to DSI	21	-212
Profit impact from value adjustments	-	-
DSI share of profits	21	-212

The interest in the joint arrangement Dywidag Interspan Holdings B. V. has been sold during the current year.

The investments in joint ventures recognized at equity have a carrying value of € 1,062 thousand in total (at 31 December 2019: € 33,413 thousand, of which € 32,523 thousand is attributable to DSI Underground). The following table shows the movements of the total book values of all joint ventures in 2020 and 2019:

€ 000	2020	2019
Beginning Balance	33,413	29,231
Capital Contribution	314	1,038
Share of profit/loss	4,750	4,100
Dividends received	0	-1,835
Effect of foreign exchange rate differences	-1,566	879
Disposals	-102	0
Reclassification as held for sale	-33,235	0
Ending Balance	1,062	33,413

The current year share of profit/loss include € 4,761 thousand (2019: € 4,388 thousand) attributable to DSI Underground Group.

The change to OCI in 2020 attributable to the joint ventures was € 1,566 thousand due to the depreciation of the Euro (in 2019: € 879 thousand).

Note (2) Taxes

The following table shows the deferred tax assets and liabilities by balance sheet position as of 31 December 2020 and 2019, respectively:

	31 Dec 2020		31 Dec 2019 (restated)
€ 000	DTA	DTL	DTA	DTL
Assets
Intangible assets and property, plant and equipment	235	27,686	269	64,669
Financial assets	9	0	130	55
Inventories	669	288	1,052	407
Receivables and other assets	2,185	791	514	2,468
Liabilities
Provisions	2,025	385	4,410	502
Other liabilities	5,059	2,983	14,072	1,478
Tax loss carry forwards	2,954	--	5,783	--
Total before netting	13,136	32,133	26,230	69,579
Netting adjustment	-8,799	-8,799	-15,811	-15,811
Total	4,337	23,334	10,419	53,768
Portion with non-current basis	723	19,145	4,054	49,036
Portion with current basis	3,614	4,189	6,365	4,732

The 2020 decrease in the deferred tax assets and deferred tax liabilities results principally from reclassification of DSI Underground Group balances to assets held for sale and liabilities held for sale, respectively.

Deferred tax liabilities on intangible assets and property, plant and equipment includes € 22,873 thousand (at 31 December 2019: € 48,154 thousand) for deferred taxes resulting from acquired and identified brands, technology and customer relationship whereby the value for the DSI brand gives rise to the biggest portion of the deferred tax liabilities (please also see Note 1). Deferred tax assets of € 13,183 thousand related to temporary differences between the carrying amounts of assets or liabilities and their tax bases have not been recorded by DSI Group subsidiaries (at 31 December 2019: € 19,422 thousand). No deferred tax liabilities were recognised for temporary differences relating to undistributed profits from investments where the group is able to control the timing of the reversal of the difference and it is probable that the reversal will not occur in the foreseeable future.

Tax receivables and liabilities

Tax payables and receivables are calculated in accordance with relevant local tax regulations. Other tax receivables and liabilities are related to taxes other than income taxes, primarily value added tax or similar forms of consumption tax. Current tax assets and liabilities are expected to be paid/ received within twelve months of the balance sheet date.

Note (3) Non-current financial assets

The following table shows the non-current financial assets of the DSI Group as of 31 December 2020 and 2019 respectively:

€ 000	Category	31 Dec 2020	31 Dec 2019
Investments - bonds - securities	AC	117	226
Other affiliated companies	AC	13	485
Other non-current investments		130	711
Other non-current financial assets	AC	486	1,700
Non-current financial assets		616	2,411

During the year ending 31 December 2020 the Group consolidated SCI Gonesse, an entity previously held as an investment.

In addition, the current year decrease of non-current financial assets relates also to the classification of DSI Underground Group as a disposal group in accordance with IFRS 5 and the consequent presentation of such assets with the assets of disposal group held for sale. The prior year include non-current financial assets of € 1,194 thousand from DSI Underground.

All balances are considered fully realisable at all balance sheet dates and hence no impairments have been recorded.

Note (4) Current non-financial assets

Inventories

The following table shows a breakdown of the inventories at 31 December 2020 and 2019 respectively:

€ 000	31 Dec 2020	31 Dec 2019 (restated)
Raw materials, supplies and consumables	7,922	27,898
Unfinished goods	299	1,855
Finished goods and merchandise	29,954	104,362
Total	38,175	134,115

The significant decrease in inventories relates primarily to DSI Underground which has been classified in 2020 as held for sale. The prior year include inventories of € 92,845 thousand attributable to DSI Underground.

The cost of inventories recognised as an expense and included in cost of sales amounted to € 225,402 thousand (2019: € 215,188 thousand). The current and prior year cost of inventories of DSI Underground are included in the net profit for the year from discontinued operations.

The following table shows the movements of valuation allowances on inventories over the financial years ending 31 December 2020 and 2019 respectively:

€ 000	2020	2019
Beginning balance	12,749	10,565
Additions	3,514	3,931
Allowances utilised	-941	-681
Allowances released to income	-1,882	-1,716
Changes due to acquisitions	0	499
Currency translation adjustment	-357	151
Reclassification as held for sale	-5,451	0
Ending balance	7,632	12,749

The current year additions of € 1,626 thousand (2019: € 1,933 thousand) and allowances released to income of € 553 thousand (2019: € 961 thousand) attributable to DSI Underground are presented under net profit for the year from discontinued operations.

Note (5) Current financial assets

Trade and other receivables

The following tables shows a breakdown of the Other current financial assets as of 31 December 2020 and 2019, respectively:

€ 000	Category	31 Dec 2020	31 Dec 2019
Trade and other receivables	AC	59,487	146,145
Derivatives	FVtPL	0	11
Receivables from affiliated companies	AC	361	705
Due from associated companies	AC	338	368
Other financial assets	AC	6,835	15,993
Other current financial assets		7,534	17,066

The decrease in trade and other receivable and other financial assets results mainly from the classification of the DSI Underground Group as a disposal group during the financial year ending 31 December 2020. Trade and other receivables of € 89,024 thousand and other financial assets of € 6,491 thousand attributable to DSI Underground are included in the prior year values.

Trade and other receivables include contract assets arising from open construction contracts amounting to € 9,385 thousand at the balance sheet date (2019: € 4,744 thousand). At 31 December 2020, trade receivables also included retentions of € 787 thousand (2019: € 760 thousand) related to construction contracts.

During the year ending 31 December 2020, the Group entered into factoring arrangements in various countries, thereby regularly selling a pre-determined portfolio of its trade receivables. The arrangement is structured such that the main risks associated with the assets are transferred to the factor. The factoring transaction therefore results in derecognition. During the year receivables to the amount of € 90,769 thousand were sold through factoring arrangements (2019: € 63,086 thousand).

The following table shows the movements of valuation allowances on trade and other receivables over the financial years ending 31 December 2020 and 2019, respectively:

€ 000	2020	2019
Beginning balance	7,437	6,970
Additions	2,060	2,052
Allowances utilised	-1,399	-852
Allowances released to income	-1,276	-810
Currency translation adjustment	-602	77
Reclassification as held for sale	-1,529	0
Ending balance	4,691	7,437

The current year additions of € 663 thousand (2019: € 748 thousand) and allowances released to income of € 650 thousand (2019: € 494 thousand) attributable to DSI Underground are presented under net profit for the year from discontinued operations in the income statement.

No valuation allowances were deemed necessary for other current financial assets at the balance sheet dates.

The following table shows the carrying values, aging, and impairment amounts for trade and other receivables:

		Not Due	Days past due, not impaired
€ 000	Carrying Value	Portion Current and not impaired	1-30	31-60	61-90	91-120	>120
31 Dec 2020	59,487	44,763	8,404	4,170	2,232	1,740	2,869
31 Dec 2019	146,145	86,809	36,122	12,047	4,058	4,136	10,410

The long overdue receivables (>120 days) are mostly covered by the valuation allowance. The receivables past due but not impaired relate to customers with which the DSI Group has experienced no necessity for allowances in the past and furthermore, no current information about any need of impairment has come to its attention. The DSI Group's exposure to credit and currency risks and impairment losses related to trade and other receivables (excluding construction work in progress) are discussed in Section V. The base amounts of the balances impaired were reserved completely.

Note (6) Cash and cash equivalents

Cash and cash equivalents include cash in hand, amounts on-call deposited with banks, shortterm highly liquid investments with original maturities of three months or less. The following table shows a breakdown of Cash and cash equivalents as of 31 December 2020 and 2019, respectively:

€ 000	31 Dec 2020	31 Dec 2019
Cash at banks	33,096	56,567
Cash equivalents	16	38
Short-term deposits	117	37
Total	33,229	56,642

The decrease in cash and cash equivalents relates primarily to reclassification of DSI Underground balances to assets of disposal group held for sale. Cash and cash equivalents of € 35,331 thousand attributable to DSI Underground are included in the prior year value.

Note (7) Shareholder's equity

The share capital of Tension II AcquiCo S.à r.l. amounting to € 6,661 thousand is entirely held by Tension II LuxCo 4 S.à r.l., Luxembourg. On 20 December 2019, the Company issued 1,000 new class A preferred shares with a nominal value of one cent (EUR 0.01) per share.

Reserves include amounts paid by shareholders for shares in excess of their nominal value, adjustments to equity from transactions with shareholders, and legal reserves. In accordance with Luxembourg law, the Company is required to transfer a minimum of 5% of its net profit for each financial year to a legal reserve, until such reserve reaches 10% of the issued share capital. This reserve has been fully established. Distribution of the legal reserve is restricted.

Note (8) Non-controlling interests

Non-controlling interests are recorded based on the economic interests of other external shareholders. The net assets, profit, and OCI attributed to the non-controlling interests are recorded based on the economic interests of other external shareholders.

In April 2019, an additional 1.176% of the shares in DSI Underground Holdings S.à r.l. were sold to Emmerick Ltd. giving them a total 20% ownership in the DSI Underground Group.

During the year, the Group has exercised the put/call option between DSI Underground and a 10% legal owner of OOO DSI Techno for € 100 thousand and has acquired all remaining outstanding shares increasing its ownership from 80% to 100% interest, for a consideration of € 1,580 thousand. Such transactions that result in changes in ownership interests while retaining control are accounted for as transactions with equity holders. As a result, no gain or loss on this change was recognised in profit or loss. Instead, the difference between the share price and the net book value has been recognised directly in equity.

Details on changes in equity are shown in the Consolidated Statement of Changes in Equity. The following table summarises the information related to the Group's subsidiaries that have material NCI.

	31/12/2020		31/12/2019
€ 000	DSI Underground (consolidated)	Subsidiaries with individually immaterial NCI	DSI Underground (consolidated) (restated)	Subsidiaries with individually immaterial NCI
Non-current assets	300,438		305,668
Current assets	210,105		242,702
Non-current liabilities	-245,407		-277,021
Current liabilities	-107,659		-139,086
Net assets	157,477		132,263
Net assets attributable to NCI	31,231	2,615	26,373	2,476
Revenues	515,950		534,713
Profit	23,678		23,790
OCI	-5,240		-90
Profit allocated to NCI	6,035	178	4,711	475
OCI allocated to NCI	-946	-313	-23	23

The individually immaterial NCI relate to DSI Underground Ventilation Systems SpA (DSI interest 51%), DYWIDAG-Systems International SPP - Asia Ltd. (DSI interest 75%), DSI Bridgecon India Pvt. Ltd. (DSI interest 51%), DSI Middle East W.L.L. (DSI interest 56%), and Dywidag (Shanghai) Engineering Technology Co., LTD. (DSI interest 45%).

In each case, the DSI interest reflects the percentage of shares owned plus any additional rights to the economic interest in the profits and net assets, which includes the additional percentage of shares covered by a put/call option between DSI and the current legal owners that are accounted for using the anticipated acquisition method.

Note (9) Preferred Equity Certificates

The Preferred Equity Certificates (in short: "PECs") were composed of 16,705,757,604 yield bearing PECs having a nominal value of one cent (EUR 0.01) each, issued by Tension II Acquico S.à r.l., Luxembourg, being the ultimate parent of the DSI Group, on 10 June 2011 and 12 August 2011 and acquired by Tension II LuxCo 4 AcquiCo S.à r.l., Luxembourg. These PECs have a maturity date of 10 June 2060.

On 22 November 2011, an agreement was signed between the Company and its sole shareholder to amend the terms of the PECs, with retroactive effect from 10 June 2011. The fixed yield on the PECs is 0.5% and the variable yield is equal to the net eligible income of the Company (less the fixed yield) but capped at a cumulative annual return rate of 10%. The yield is payable at the end of each calendar year, but only if declared payable by the Board of Managers.

On 13 December 2019, the shareholder made a capital contribution of 854,164,000 preferred equity certificates with a fair value of € 13,026 thousand. In exchange, the Company issued 1,000 new class A preferred shares with a nominal value of one cent (EUR 0.01) per share. These shares bear a preferred return equal to a proportional share (5.119%) of the yield calculated on PECs as originally issued.

The PECs are recorded at fair value on the Consolidated Statement of Financial Position and changes to the fair value are recorded in the statement of profit or loss.

The following table shows the nominal value, accrued interests, and carrying value of the PECs as of 31 December 2020 and 2019 respectively:

	31 December 2020			31 December 2019
	Issuance (redemption)	Accrued interest	Carrying amount	Issuance (redemption)	Accrued interest	Carrying amount
Preferred Equity Certificates	158,516	36,102	286,593	158,516	32,489	265,130
Total PECs	158,516	36,102	286,593	158,516	32,489	265,130

The fixed and variable yield interest expense recorded on the PECs amounted to € 3,614 thousand for the year ended 31 December 2020 and € 3,080 thousand for the year ended 31 December 2019. Due to changes in the estimated fair value, a loss of € 17,850 thousand was recorded in the year ending 31 December 2020 (in 2019, a loss of € 20,308 thousand). It is currently expected that the full 10% cumulative yield will be paid.

The conditions of issuance provide two termination rights. The first can be exercised by the issuer anytime during the lifetime of the instrument in part or in full. The issuer's second termination right is mandatory either upon liquidation or upon maturity. Both termination rights are only effective if the company is not insolvent immediately before and after giving effect to such payment and such payment does not violate any covenant. The redemption amount corresponds to the nominal value of the PECs and all accrued but unpaid yield.

Note (10) Pensions

Provisions for post-employment benefits are established for indirect and direct obligations arising from earned benefits and current obligations arising from earned benefits and current payments to active and former employees and their beneficiaries. The obligations concern defined retirement benefits primarily for retired employees in Germany, but also for statutory severance payments in jurisdictions where required. The earned benefits of individual employees are generally based on duration of service and compensation. The projected unit credit method is used to determine the amount of provisions.

The service cost is recorded under personnel expense and the interest component of the provision under interest expense. The funding policy of the Group is a pay-as-you go basis. All actuarial gains and losses are taken directly to the other comprehensive income. The balances of and movements in the defined benefit obligation also reflect the changes to the pension provision.

The following table shows the development of the defined benefit obligations in the financial years 2020 and 2019 respectively:

€ 000	2020	2019
Defined benefit obligation, beginning balance	19,502	18,796
Additions from acquisitions	0	0
Current service cost	109	204
Interest expense	134	274
Payments of post-employment benefits	-1,213	-1,258
Return on plan assets	21	0
Reclassifications	257	13
Actuarial gains/losses	-215	1,473
Reclassification as held for sale	-1,131	0
Defined benefit obligation, ending balance	17,464	19,502

The following table shows the assumptions which were made for purposes of determining the amount of provisions for post-retirement benefits:

	2020	2019
Discount rate	0,72% p.a.	0,76% p.a.
Expected rate of salary increases	3.00% p.a.	3.00% p.a.
Expected rate of pension increases	2.00% p.a.	2.00% p.a.

^* The assumptions shown were used for obligations in Germany. Other countries used comparable assumptions based on the characteristics of their benefit obligations.

Longevity assumptions applied were those of the Heubeck 2018G table.

Post-employment benefit obligations can be broken down geographically as shown below:

€ 000	31 Dec 2020	31 Dec 2019
Pension obligations in Germany	15,344	16,576
Pension obligations in other countries	2,120	2,926
Total deficit	17,464	19,502

The following table shows the pension expense recognised in the income statement:

€ 000	2020	2019
Current service cost	109	204
Interest expense	134	274
Pension expense recognized for the year	243	478

The interest component is generally recorded in the financial result and other changes to the post-employment benefit obligations in the year are generally recorded through the administrative line in the income statement. However, due to classification of DSI Underground as a disposal group/discontinued operation, current year service cost of € 125 thousand (2019: € 168 thousand) and interest expense of € 6 thousand (2019: € 7 thousand) are presented under the net profit for the year from discontinued operations position.

At 31 December 2020, the weighted-average duration of the defined benefit obligation was 6.2 years (2019: 6.2 years). The DSI Group expects to pay out € 1,224 thousand in 2021 related to its defined benefit plans.

Sensitivity Analysis

Changes at the reporting date to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

For the year ending 31 December 2020:

31 December 2020	Impact on Defined benefit obligation ^*
€ 000	increase	decrease
Discount rate (1% movement)	-1,481	1,851
Future salary growth (1% movement)	246	-232
Future pension growth (1% movement)	1,488	-1,289

^* The sensitivity analysis shows the impact on approximately 90% of total DBO.

For the year ending 31 December 2019:

31 December 2019	Impact on Defined benefit obligation ^*
€ 000	increase	decrease
Discount rate (1 % movement)	-1,740	1,998
Future salary growth (1% movement)	553	-228
Future pension growth (1% movement)	1,474	-1,277

^* The sensitivity analysis shows the impact on approximately 90% of total DBO.

Defined Contribution Plans

DSI companies also participate in various voluntary and federally mandated defined contribution plans. Employer contributions of € 1,370 thousand (2019: € 768 thousand) were remitted to the German Federal Pension Fund in the financial year.

Note (11) Non-current financial liabilities

Non-current loans and borrowings

The following table show Non-current loans and borrowings at 31 December 2020 and 2019 respectively:

€ 000	31 Dec 2020	31 Dec 2019
Senior facility A	0	46,670
Senior facility B	24,914	89,509
Senior facility C	27,693	75,560
Senior facility D	0	50,008
Acquisition facility	0	0
Revolver	0	20,000
Other misc. borrowings	1,789	859
Shareholder loan	2,217	2,217
Preferred Equity Certificates	286,593	265,130
Non-current interest bearing loans	343,207	549,953
Non-amortised costs of borrowing	-425	-2,395
Non-current interest bearing loans, including non-amortised costs of borrowing	342,781	547,558

The decrease of non-current loan and borrowings at 31 December 2020, results mainly from the reclassification of DSI Underground Group liabilities to liabilities held for sale. The prior year include non-current loans and borrowings of € 225,221 thousand from DSI Underground.

As of 31 December 2020, the Preferred Equity Certificates include € 36,102 thousand of accrued interest (2019: € 32,489 thousand).

The following table shows the terms and carrying amount of non-current senior bank loans in nominal currency at 31 December 2020 and 2019, respectively:

				31 December 2020		31 December 2019
Bank Loans (non-current portion)	Currency	Nominal interest rate ^* LIBOR +	Year of maturity	Face value	Carrying amount	Face value	Carrying amount
Senior facility A	AUD	4.000%	2022	0	0	74,612	74,612
Senior facility B	CAD	4.000%	2022	11,289	11,289	42,867	42,867
Senior facility B	AUD	4.000%	2022	0	0	65,940	65,940
Senior facility B	USD	4.000%	2022	11,651	11,651	21,184	21,184
Senior facility B ^**	EUR	4.000%	2022	8,177	8,177	0	0
Senior facility C	CAD	4.000%	2022	0	0	9,812	9,812
Senior facility C	USD	4.000%	2022	15,841	15,841	31,463	31,463
Senior facility C	AUD	4.000%	2022	0	0	33,864	33,864
Senior facility C	EUR	4.000%	2022	14,771	14,771	19,626	19,626
Senior facility D	CAD	4.000%	2022	0	0	32,823	32,823
Senior facility D	EUR	4.000%	2022	0	0	27,500	27,500
Senior Acquisition facility	EUR	3.250%	2020	0	0	0	0
Senior Acquisition facility	AUD	3.250%	2020	0	0	0	0
Revolver	EUR	3.500%	2022	0	0	20,000	20,000
Total in EUR				52,607	52,607	281,747	281,747

^* The applicable margin is variable for each period based on target leverage ratios included in the Syndicated Facilities Agreement. These are effective beginning 6 months after the refinancing exercise.
^** During the year ended 31 December 2020 a portion of the USD B1 facility was redenominated to EUR

Lease liabilities

Non-current lease liabilities relate to non-cancellable lease payments due in 2021 or later. These were € 15,811 thousand at 31 December 2020 (at 31 December 2019: € 49,733 thousand, of which € 36,514 thousand are attributable to DSI Underground).

Other non-current liabilities at fair value

The Group's other liabilities at fair value as at 31 December 2019 are comprised of deferred consideration relating to the acquisition of Datum (€ 603 thousand), Partec (€ 849 thousand), and DSIU Argentina (€ 270 thousand). The Datum deferred consideration was settled in 2020 and the Partec deferred consideration is due in 2021.

Note (12) Other provisions and liabilities

Provisions

The following tables show the movements of Other provisions split by categories for the financial year 2020 and 2019, respectively:

€ 000	Beginning balance 01 Jan 2020	Additions to provisions	Use of provisions	Release of provisions	Currency translation adjustment	Reclass. as held for sale	Ending balance 31 Dec 2020	thereof non-current
Restructuring	293	1,412	-687	-125	-5	-41	847	--
Litigation	831	240	0	-269	-43	-486	273	--
Warranties / Rebates	808	322	0	-289	-5	-94	742	--
Other provisions	233	1,076	-161	-248	-8	-800	92	--
Totals	2,165	3,050	-848	-931	-61	-1,421	1,954	--

€ 000	Beginning balance 01 Jan 2019	Additions to provisions	Use of provisions	Release of provisions	Currency translation adjustment	Reclass. as held for sale	Ending balance 31 Dec 2019	thereof non-current
Restructuring	2,454	120	-1,092	-1,209	20	--	293	113
Litigation	857	55	-87	0	6	--	831	43
Warranties / Rebates	891	416	-493	-16	10	--	808	40
Other provisions	149	287	-143	-62	2	--	233	0
Totals	4,351	878	-1,815	-1,287	38	--	2,165	196

Restructuring charges involve the committed costs associated with financial or operational restructuring projects. Litigation provisions are for the legal fees and penalties attached to claims brought against companies of the DSI Group by customers, suppliers, and others. In managers' opinion, after taking appropriate legal advice, the outcome of these legal claims is not expected to result in any significant loss beyond the amounts provided at year end. Warranty and rebate provisions are for general product re-working risks and anticipated customer rebate payables. Other provisions include various other obligations booked at year end.

The amounts indicated as non-current are expected to be settled in 2022 or later. All other balances are expected to be utilised within one year.

The current year additions of € 1,014 thousand (2019: € 239 thousand) and releases of € 324 thousand (2019: € 20 thousand) attributable to DSI Underground are presented under net profit for the year from discontinued operations in the income statement.

Non-current non-financial liabilities

The non-current non-financial liabilities comprise the non-current portion of provisions.

Other current non-financial liabilities

The following table shows the Other current non-financial liabilities as of 31 December 2020 and 2019, respectively:

€ 000	31 Dec 2020	31 Dec 2019
Employee Entitlements	9,930	21,041
Accrued expenses	11,446	7,035
Payments received on account	13,283	4,550
Total other current non-financial liabilities	34,659	32,626

Employee entitlements are comprised primarily of accrued wages, salaries and bonuses, and the employer contribution to payroll benefits. Accrued expenses generally relate to unbilled goods or services received. The item also includes a balance of approximately € 7,798 thousand related to internal restructuring projects or to settle disputes or litigation (at 31 December 2019: € 1,434 thousand, of which € 217 thousand is attributable to DSI Underground).

The remaining current non-financial liabilities are related to prepayments from customers primarily related to projects measured according to the stage of completion.

The Group's other current non- financial liabilities as at 31 December 2019 included employee entitlements of € 10,651 thousand, accrued expenses of € 2,579 thousand and payments received on account of € 195 thousand from DSI Underground.

Current financial liabilities

The following table shows the categorized Current financial liabilities as of 31 December 2020 and 2019, respectively:

€ 000	Category	31 Dec 2020	31 Dec 2019
Trade and other payables	FLAC	36,181	119,752
Borrowings:
- Interest and misc. borrowings	FLAC	4,845	4,833
- Senior A	FLAC	0	7,759
- Acquisition Facility	FLAC	0	5,434
- Shareholder bridge loan & accrued interest	FLAC	8,786	8,256
- Other	FLAC	374	694
Lease liabilities	FLAC	5,661	12,088
Derivatives	FVtPL	0	164
Other financial liabilities	FVtPL	3,988	12,692
Total		59,835	171,671

The significant decrease in 2020 of trade and other payables results mainly from the classification of DSI Underground as a disposal group and the subsequent presentation within liabilities held for sale. The prior year included trade and other payables of € 75,852 thousand from DSI Underground Group.

The other financial liabilities are obligations resulting from restructuring transactions affecting the DSI Group companies that are expected to be paid within one year. The prior year other financial liabilities included also deferred consideration resulted from acquisition of Fero and Argentina.

Note (13) Financial instruments

Carrying amounts and fair values of financial instruments

The following table shows the carrying amounts and fair values of the DSI Group's current and non-current financial instruments as of 31 December 2020 and 2019, respectively:

		31 Dec 2020		31 Dec 2019
€ 000	Category	Carrying amount	Fair value	Carrying amount	Fair value
Financial assets
a) Financial assets recognised at amortised costs
Accounts receivable	AC	59,487	59,487	146,145	146,145
Cash and cash equivalents	AC	33,229	33,229	56,642	56,642
Other financial assets	AC	8,020	8,020	18,766	18,766
b) Financial instruments classified and recognised at fair value through profit and loss
Other non-current investments	FVtPL	13	13	485	485
Derivatives	FVtPL	0	0	11	11
Other loans and other securities	FVtPL	117	117	226	226
Total financial assets		100,866	100,866	222,275	222,275
Financial liabilities
a) Financial liabilities recognised at amortised costs
Borrowings	FLAC	70,193	70,193	309,403	309,403
Accounts payable	FLAC	36,181	36,181	119,752	119,752
b) Lease liabilities	FLAC	21,472	21,472	61,821	61,821
C) Financial liabilities, recognised at fair value through profit and loss
Preferred Equity Certificates	FVtPL	286,593	286,593	265,130	265,130
Other liabilities at fair value	FVtPL	3,998	3,998	14,414	14,414
Derivatives	FVtPL	0	0	164	164
Total financial liabilities		418,427	418,427	770,684	770,684

The fair value of a financial instrument is the price at which a party would accept the rights and/or obligations of this financial instrument from another independent party. Given the varying influencing factors, the reported fair values can only be viewed as indicators of the prices that may actually be achieved on the market.

Trade and other receivables, receivables from affiliated or associated companies

Due to the short terms of these financial instruments, the carrying amounts are assumed to be at fair value.

Financial assets at fair value through profit and loss

Financial assets recognised at fair value through profit or loss includes derivative financial instruments not accounted for as hedges. These derivatives are valued using inputs from level 2 of the fair value hierarchy: values derived from observable market data, but not quoted prices from an active market.

Other receivables and assets

―	Other financial assets carried at amortised cost: Because of the short maturities of these financial instruments, it is assumed that the discounted values closely approximate the carrying amounts.
―	Other non-current investments reported at amortised cost: As no objective market value is available, these assets are carried at cost. It is assumed that fair value does not vary materially from the carrying value.
―	Other loans and securities carried at amortised cost: It is assumed that the discounted values would not vary materially from the carrying values of these financial instruments.

Borrowings and Trade and other payables

Liabilities to banks are interest bearing at market rates and are therefore not discounted. Accounts payable include trade liabilities arising from the PoC method. Due to the short maturities of these financial instruments, it is assumed that discounted value is equal to the carrying amount.

Preferred equity certificates

The PECs issued by the DSI Group and held by the shareholder of the Company are classified at fair value through profit and loss. The fair value at the balance sheet date is calculated based on the discounted value of the expected cash flows and is estimated primarily using inputs from level 3 of the fair value hierarchy: inputs that are not based on observable market data.

Valuation technique	Unobservable inputs	Assumption used	Relationship of unobservable inputs to fair value
Discounted cash flow	Estimated eligible income for the Company	€ 115m over one year	The higher the eligible income, the higher the fair value.
	Discount rate	8%	The higher the discount rate, the lower the fair value.

At 31 December 2020, changes to the relevant assumptions, holding other inputs constant, would have affected the fair value of the PEC liability by the amounts shown below.

Analysis at 31 December 2020		€ 000		€ 000
Discount rate (1 ppt. movement)	+1 ppt.	-2,736	-1 ppt.	2,776
Annual eligible income	+ € 3 m	0	- € 3 m	-2,632

At year-end 2020, increases to the annual eligible income would not impact the value of the PEC liability because the valuation assumes that the maximum yield will be paid.

Other financial liabilities

―

Other financial liabilities in the category "recognized at fair value through profit or loss" are the derivative financial instruments and liabilities for contingent consideration related to acquisitions (i.e. earn-outs) and redemption liabilities for option on shares in DSI Group companies owned by non-controlling interests. Aside from derivatives (level 2), these are valued using level 3 inputs of the fair value hierarchy.

―

Other financial liabilities carried at amortised cost include retained purchase price amounts related to acquisitions, liabilities to associated companies and other liabilities. Due to the nature and short maturities of these financial instruments, it is assumed that the discounted values would not vary materially from the carrying values of these financial instruments.

Note (14) Leases

The DSI Group leases production and office facilities, machinery/equipment, and vehicles. These agreements usually have a term of one to five years, but in limited circumstances may be longer. Some leases provide for additional rent payments based on changes in local price indices.

For short-term leases (12 months or less) or low-value items, the Group has elected not to recognize right-of-use assets and lease liabilities.

Right-of-use assets

Right-of-use assets related to leased properties that do not meet the definition of investment property are presented as property, plant, and equipment (see Note 1).

Amounts recognized in profit or loss

€ 000	2020	2019
Interest on lease liabilities	2,842	3,155
Expenses relating to short-term/low value leases	1,964	3,271
Depreciation expense for right-of-use assets	13,432	12,280
Lease amounts recognized in profit or loss	18,238	18,706
thereof recorded in continuing operations	7,138	7,908
thereof recorded in discontinued operations	11,100	10,798

Expenses relating to short-term/low value leases are booked in profit or loss when they incur. These relate primarily to property leases that can be terminated within 12 months without any significant economic disadvantage and to production equipment that is rented as needed, for example by day or by week.

Lease liabilities

For lease liabilities, minimum lease payments are broken down according to financing expense and the reduction of the outstanding liability. The financing expense is allocated to each period of the leasing agreement to achieve a constant periodic rate of interest on the remaining balance of the liability.

The following table shows the expected nominal lease and lease interest payments as well as the present values in connection with lease liabilities as of 31 December 2020 and as of 31 December 2019, respectively:

€ 000	31 Dec 2020			31 Dec 2019
	Nominal lease payments	Interest	Present Value	Nominal lease payments	Interest	Present Value
within 1 year	6,524	-863	5,661	14,245	-2,349	11,896
between 1 - 5 years	15,237	-1,813	13,424	36,584	-4,170	32,414
greater than 5 years	2,555	-168	2,387	21,718	-4,207	17,511
Total	24,316	-2,844	21,472	72,547	-10,726	61,821

In 2020, the lease liabilities of DSI Underground have been reclassified to liabilities of disposal group held for sale. Information about the 2020 expected nominal lease and lease interest payments as well as the present values of DSI Underground lease liabilities is disclosed in Section (XI) Disposal Group Held for Sale and Discontinued Operations.

(IX) Notes to the Consolidated Statement of Comprehensive Income

Note (15) Revenues

Revenues include income from the sale of goods and services, amounts realised upon application of the percentage of completion method (cost-to-cost-method) and completed contracts.

The following table shows the consolidated revenues on an operating segment level for the financial years 2020 and 2019, respectively:

Sales by segment in '000 €	2020	2019
Construction Europe, Middle East, Asia	147,403	160,602
Construction North America	113,455	101,943
Construction South America	11,183	15,076
Construction Asia Pacific	30,433	30,551
Concrete Accessories	58,091	62,724
Total Sales from continuing operations	360,565	370,896

The revenues from Underground division are presented in Section (XI).

For the segment Concrete Accessories, all sales are recognized at a point in time, generally when the product is delivered to the customer.

The remaining segments in Construction have a mix of product and service sales recognized at a point in time and revenue from construction contracts that are recognized over time using the percentage-of-completion method. Revenues for 2020 arising from application of the percentage of completion-method was € 108,827 thousand (prior year: € 95,563 thousand). These projects typically have a duration of one to three years.

Of these, the revenue recognized related to projects ongoing at the balance sheet date amount to €82,920 thousand (prior year: € 54,011 thousand). Contract costs relative to these revenues amount to € 70,841 thousand (prior year: € 43,790 thousand), giving rise to profit recognition amounting to € 12,078 thousand (prior year: € 10,211 thousand) in the financial year 2020.

These open projects gave rise to contract assets of € 9,385 thousand and contract liabilities of € 11,930 thousand at 31 December 2020. (At 31 December 2019, contract assets of € 4,744 thousand and contract liabilities of € 1,840 thousand existed.)

Note (16) Other operating income

The following table shows a breakdown of Other operating income recorded in the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Gains from exchange rate fluctuations	663	1,568
Decrease in allowance for doubtful receivables	626	316
Gains on disposal of fixed assets	5,265	107
Gains on sale of non-current investments	0	453
Valuation adjustments in other provisions	561	230
Other operating income	1,164	824
Total	8,279	3,498

Note (17) Other operating expenses

The following table shows a breakdown of Other operating expenses recorded in the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Losses from exchange rate fluctuations	4,182	1,230
Loss from disposal of fixed assets	550	27
Bank fees	510	556
Restructuring expenses	10,442	0
Other operating expenses	4,823	455
Total	20,507	2,268

In the year ending 31 December 2020, various restructuring activities were carried out in order to increase profitability.

The current year other operating expenses include a one-off item in the amount of € 3,913 thousand relating to smaller scale restructuring activities, such as various local mergers.

The losses from exchange rate fluctuations derive primarily from foreign denominated loan receivables.

Note (18) Personnel and depreciation costs according to functional lines

The following table shows a breakdown of personnel and depreciation costs according to functional lines recorded in the financial years 2020 and 2019, respectively:

	Personnel Costs		Depreciation
€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Cost of sales	49,333	48,813	5,912	7,057
Selling expenses	24,077	26,236	803	640
General administrative expenses	21,943	20,472	7,310	6,278
Total	95,353	95,521	14,025	13,975

In the year ending 31 December 2020, the general administrative expenses category includes depreciation on fixed assets and software of € 3,570 thousand and amortisation of other intangibles of € 3,740 thousand (for the year ending 31 December 2019, depreciation of € 2,911 thousand and amortisation of € 3,367 thousand).

The following table shows a breakdown of the total personnel costs for the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Wages and salaries	63,042	69,384
Interim / temporary employees	12,212	5,562
Social security	8,272	10,249
Other benefits	11,827	10,326
Total	95,353	95,521

Other benefits include bonus payments and other gratifications for employees of the DYWIDAG Group.

Note (19) Operating result from investments recognised under the equity method

Operating income from investments recognised under the equity method amounted to € -33 thousand in the financial year (€ -386 thousand for the year ending 31 December 2019).

Note (20) Research and development expenses

The following table shows the breakdown of Research and development expenses for the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Personnel costs	2,461	1,941
General costs	538	766
Depreciation	50	59
Total costs related to research and development	3,049	2,764

Research and development expenses are included within the general and administrative expenses category in the consolidated Statement of comprehensive income.

Note (21) Total financial results

The following table shows a breakdown of the Total financial results for the financial years 2020 and 2019, respectively:

€ 000		01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
a) Net gains or losses of financial instruments financial assets and liabilities recognized at fair value through profit or loss
Revaluation of foreign currency derivatives	FVtPL	0	-2
Revaluation of preferred equity certificates	FVtPL	-17,850	-20,308
Revaluation of other liabilities at fair value	FVtPL	575	1,094
Yield on preferred equity certificates	FVtPL	-3,614	-3,080
Amortization of costs of borrowings	FVtPL	-89	-89
Sum attributed to FVtPL		-20,978	-22,385
b) Total financial income and total financial expense of the continued operations for financial assets or financial liabilities at amortised cost
Other interest and similar income	AC	182	160
Valuation allowances on receivables	AC	-771	-988
Sum attributed to AC		-589	-828
Other interest and similar expenses	FLAC	-4,638	-5,448
Sum attributed to FLAC		-4,638	-5,448
c) Total interest income and total interest expense of the continued operations for non-financial assets and non-financial liabilities
Interest expense arising from post-retirement benefits	n.a.	-124	-259
Sum not categorised		-124	-259
Total financial income/expense		-26,328	-28,920
thereof recorded in operating results		-771	-988
Total financial result		-25,557	-27,932

Interest income and expense are reported directly to the statement of profit and loss; valuation allowances on receivables are recorded within the operating result.

The calculation of the Interest on Preferred Equity Certificates has its basis in the net eligible income of Tension II Acquico S.à r.l. (Luxembourg), stand alone and accounted for according to Luxembourg GAAP. The yield recorded on the PECs in 2019 and 2020 is below the maximum allowed fixed and variable yield according to the contract.

Note (22) Tax on income

The following table shows the breakdown of income tax expenses for the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Current tax income / expense	-3,619	-2,669
Deferred tax due to loss carry forwards	-2,045	2,559
Deferred tax income / expense due to temporary differences	1,100	2,584
Total expense/benefit from income taxes	-4,564	2,474

Deferred taxes are determined on the basis of the various country-specific tax rates, which lay between 11% and 38% in the year 2020. Changes in tax rates already enacted as of the reporting date were taken into account in the determination of deferred taxes.

Unused tax loss carry forwards sum up to € 454,753 thousand (at 31 December 2019: € 450,568 thousand) as of the reporting date. Deferred taxes were not recognised on an amount equal to € 438,504 thousand (31 December 2019: € 437,273 thousand) of the existing loss carry forwards.

The expected income tax benefit of € 7,295 thousand differs from the actual amount of income tax expense of € 4,564 thousand for the financial year. The expected income tax benefit for the prior year of € 5,076 thousand differs from the actual amount of income tax benefit of € 2,474 thousand. These variances are due to the fact that various items are treated differently for accounting and for tax purposes, as outlined in the explanation and calculation below.

The individual company-specific reconciliations are prepared on the basis of the various country-specific tax rates which are summarised in the reconciliation below for the DSI Group including effects due to the consolidation. The tax rate applied for purposes of reconciliation reflects the applicable domestic corporation tax rate of 24.94%.

The following table shows the reconciliation from the expected income tax expenses based on the statutory income tax rate of Luxembourg to the effective DSI Group income tax rate for the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Earnings before taxes on income	-29,250	-20,351
Corporation income tax rate	24.94%	24.94%
Expected taxes on income	7,295	5,076
Effects on taxation due to:
Deviations due to differences in tax rates	967	-475
Tax-exempt income / losses	-8	524
Tax additions and deductions	-362	-2,889
Withholding taxes	-709	-81
Minimum tax & alternative income tax	-43	-87
Change in valuation allowance for deferred taxes	-9,663	-3,174
Taxation for the previous years	-1,404	3,388
Changes in tax rate	-260	-415
Other	-377	608
Taxes on income	-4,564	2,474
Effective DSI Group tax rate in %	-15,60%	12,16%

The aggregate current and deferred tax relating to items that are charged to equity amount to € 378 thousand (2019: € 313 thousand). The amount mainly stems from pensions in France & Germany.

(X) Notes to the Consolidated Statement of Cash Flows

Note (23) Income taxes paid

In 2020, the income taxes paid exceed the income tax expense by an amount of € 2,837 thousand (in 2019: € 7,911 thousand). This is mainly due to the impact of deferred taxes.

Note (24) Acquisition of subsidiaries, net of cash acquired

For the acquisitions of subsidiaries in 2019, a portion of the acquisition price was deferred. (Please also refer to Section VI. 1.) No material acquisitions took place in 2020.

Note (25) Drawings/ repayments of Non-current loans and borrowings

As specified in the Syndicated Facility Agreements, the Group made scheduled payments on its senior bank loans and voluntarily repaid a portion of the revolving credit facility. The additional bank debt that was drawn in 2019 related to acquisitions.

(XI) Disposal Group Held for Sale and Discontinued operations

On 24 December 2020, Tension II AcquiCo S.à r.l. and Emmerick Pty. Ltd. have entered into an agreement with Sandvik Aktiebolag regarding the sale of their entire participation in DSI Underground Group. The completion of the sale is subject to clearance from merger control and foreign investment authorities of various countries. The sale is expected to be completed in the second half of 2021.

The DSI Underground Group met the IFRS 5 requirements of being classified as held for sale and reported as a discontinued operation during the course of 2020 (on 21 October 2020). The DSI Underground Group was not previously classified as held for sale or as a discontinued operation.

Note (26) Net profit for the year from discontinued operations

The revenues, income and expenses, gains and losses of DSI Underground Group, together with the relevant consolidation entries are reported separately on the face of income statement in the line net profit for the year from discontinued operations. The intra-group receivables, liabilities, income, and expenses between continuing and discontinued operations have been fully eliminated. Consolidation effects for intra-group revenues that are expected to continue after disposal have been allocated entirely to the discontinued operations.

From the valuation of DSI Underground Group to fair value less cost to sell no impairment charge has resulted.

The net profit for the year from discontinued operations is composed of the following:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Revenue	508,145	525,302
Cost of sales	-392,192	-408,361
Gross profit	115,953	116,942
Operating income and expenses	-69,841	-73,328
Financial result	-12,928	-14,102
Income from investments recognised under the equity method	4,761	4,388
Earnings before taxes	37,946	33,898
Expense from income taxes	-7,401	-8,310
Net profit for the year from discontinued operations	30,545	25,589

The following table shows the consolidated revenues of discontinued operations on an operating segment level for the financial years 2020 and 2019, respectively:

Sales by segment in '000 €	2020	2019
Underground Asia-Pacific	256,476	270,057
Underground North America	100,687	89,543
Underground Latin America	59,673	63,025
Underground Europe	110,218	122,333
Underground Consolidation	-11,014	-10,246
Group Consolidation	-7,805	-9,410
Total Sales from discontinued operations	508,145	525,302

Note (27) Other comprehensive income

In the year ending 31 December 2020, other comprehensive income of € -5,831 thousand (€ 549 thousand for the year ending 31 December 2019) is attributable to discontinued operations.

Note (28) Assets and liabilities held for sale

The following table summarise the major classes of assets and liabilities attributable to the disposal group:

€ 000	31 Dec 2020
Goodwill	108,220
Other intangible assets	86,747
Property, plant, and equipment	116,088
Investments carried at equity	33,235
Deferred tax assets	6,049
Inventories	75,181
Trade and other receivables, net	74,376
Cash and cash equivalents	41,867
Other current and non-current financial assets	1,049
Other current and non-current non-financial assets	16,429
Total assets of disposal group held for sale	559,242
Loans and borrowings	212,668
Lease liabilities	40,170
Deferred tax liabilities	26,214
Trade and other payables	61,648
Pensions and other provisions	2,552
Other current and non-current financial liabilities	874
Other current and non-current non-financial liabilities	19,605
Total liabilities of disposal group held for sale	363,731

Lease liabilities of disposal group

The following table shows the expected nominal lease and lease interest payments as well as the present values in connection with lease liabilities as of 31 December 2020:

€ 000	31 Dec 2020
	Nominal lease payments	Interest	Present Value
within 1 year	7,992	-539	7,453
between 1 - 5 years	25,545	-3,614	21,931
greater than 5 years	13,765	-2,980	10,785
Total	47,302	-7,132	40,170

Investments carried at equity of disposal group

The following table summarise the financial statements of the DSI Underground joint ventures for the years ending 2020 and 2019 respectively:

	Rocbolt South Africa		Rocbolt Australia		Rocbolt China		Rocbolt Mongolia
€ 000	2020	2019	2020	2019	2020	2019	2020	2019
Non-current assets	2,261	2,812	2,691	3,142	1,745	1,614	65	64
Current assets	13,528	12,413	5,553	5,772	33,372	28,466	122	243
Total assets	15,789	15,225	8,244	8,914	35,117	30,080	187	307
Non-current liabilities	372	457	1,307	1,540	567	741	0	0
Current liabilities	8,672	7,736	2,801	3,140	6,548	4,562	113	229
Total liabilities	9,044	8,193	4,108	4,680	7,115	5,303	113	229
Revenues	39,049	43,758	17,042	19,688	43,781	36,924	617	158
Expenses	-38,504	-43,284	-15,354	-17,456	-36,697	-30,096	-670	-175
Profit	545	474	1,688	2,232	7,084	6,828	-53	-17
Share attributable to DSI	261	234	844	1,116	3,542	3,414	-27	-9
Profit impact from value adjustments	-13	-116	-8	-3	140	-227	22	-21
DSI share of profits	248	118	836	1,113	3,682	3,187	-5	-30

Rocbolt Mongolia started operations in 2019. It is expected that in the next one to three years, copper mines will be explored in the area and, through this locally based company, DSI and its joint venture partner can supply products to the Mongolian mining companies.

Note (29) Cash Flows related to discontinued operations

The net cash flows attributable to the activities of the DSI Underground Group are as follows:

€ 000	2020	2019
Net cash from operating activities	63,131	14,845
Net cash used in investing activities	-16,643	-47,229
Net cash used in / from financing activities	-37,905	35,241
Net cash flows for the year	8,583	2,857

Note (30) Contingent liabilities of disposal group

Contingent liabilities exist in the amount of € 5,464 thousand (at 31 December 2019: € 4,427 thousand) arising from guarantees. Other financial commitments include in particular € 54 thousand (at 31 December 2019: € 169 thousand) arising primarily from rental agreements and leases and € 1,146 thousand (at 31 December 2019: € 18,718 thousand) from non-cancellable orders from suppliers.

(XII) Other Information

Contingent liabilities of continuing operations

Contingent liabilities exist in the amount of € 43,508 thousand (at 31 December 2019: € 79,518 thousand) arising from guarantees. Other financial commitments include in particular € 69 thousand (at 31 December 2019: € 129 thousand) arising primarily from rental agreements and leases.

No further contingent liabilities exist.

Issuance of shares

Aside from the preferred shares issued as described in Note (9), no additional shares have been issued in the financial years presented and no expense has been recorded in the income statement for the year. The DSI Group has no legal or constructive obligation to repurchase or settle previously issued shares in cash as consideration for employee's services.

Governing corporate bodies of the Company

Board of Managers:

	Mr. Pierre-Alexandre Lechantre, Luxembourg
	Mr. Andreas Neugebauer, Luxembourg
	Mr: John Sutherland, Luxembourg
	Mr. Joakim Lindström-Formicola, Luxembourg

Related-party disclosures

a) Remuneration of Board of Managers

The fixed remuneration of members of the Board of Managers was € 38 thousand in the financial year ended 31 December 2020 and € 95 thousand for the year ended 31 December 2019. In addition to this, the board members receive an allowance for the costs and other expenses incurred in connection with the performance of their duties.

Other key management personnel of the DSI Group (active managing directors of the central Group companies) received remuneration of € 3,178 thousand (2019: € 3,031 thousand). In the prior year, short-term employee benefits of € 247 thousand as termination benefits has been granted.

b) Significant related parties and companies include:

•	members of management and their close relatives
•	Tension II LuxCo 4 S.à r.l. (Luxembourg)
•	Tension II LuxCo S.à r.l. (Luxembourg)
•	Tension Holdco S.à r.l. (Luxembourg)
•	Triton Managers III Ltd. (Jersey)
•	Triton III Holding 4 GmbH (Germany)
•	OOO DSI-PSK (Russia)
•	Dywidag-Interspan Companies (Belgium/Netherlands)
•	Rocbolt Technologies Holdings Pty. Limited (South Africa) and subsidiaries
•	Rocbolt Resins Pty. Limited (Australia)
•	Rocbolt of Mauritius (Mauritius)
•	Rocbolt Technologies China Ltd (China)
•	DSI Verwaltungs GmbH (Germany)
•	Triton Advisers S.à r.l. (Luxembourg)
•	shareholders with non-controlling interests in Group companies are considered related parties for the subsidiaries in which they hold interests.

c) The balances and transactions with related parties were:

The following table shows related party transactions and balances of continuing and discontinued operations for the financial years 2020 and 2019, respectively:

€ 000	2020	2019
Transactions with shareholders:
Interest expense (PEC)	3,614	3,080
Interest expense (SHL)	529	798
Transactions with joint ventures and other affiliated companies:
Revenues	1	314
Purchases	11,534	11,589
Other operating income	35	380
Other operating expense	0	42
Interest income	52	46
Transactions with other related parties:
Revenue	306	889
Purchases	0	3,019
Interest expense	0	485
Balances with shareholders:
Preferred equity certificates	286,593	265,130
Other shareholder loans	6,635	6,635
Other liabilities to shareholder	1,497	1,497
Balances with associated companies and joint ventures:
Accounts receivable	3,208	364
Accounts payable	212	2,327
Loan receivable from joint ventures	698	547
Balances with other related parties:
Payables to non-controlling shareholders	808	17,895
Receivables from non-controlling shareholders	361	705

The Preferred equity certificates and the payables to and receivables from shareholders are attributable to DSI Tension II LuxCo4 S.à r.l. and Triton Managers III Limited. Revenue relates to product sales and royalty revenues from the joint ventures and associated companies which are consolidated using the equity method or to the non-controlling interest owners of DYWIDAG-Systems International SPP-ASIA Limited (Hong Kong) and DSI Middle East W.LL. (Qatar). Purchases, interest income, and the loan receivable from joint ventures are primarily with Rocbolt Resins Pty. Ltd. (Australia). The receivables and payables from non-controlling interests also relate to the non-controlling shareholders of the DSI Underground Group as well as the Group's subsidiaries in Hong Kong and Qatar.

d) Average number of employees for the year

The following table shows the average number of employees of the DSI Group for the financial years 2020 and 2019, respectively:

	2020	2019
Salaried employees	1,794	1,627
Non-salaried employees	1,087	1,076
Interim / temporary employees	362	353
Total	3,243	3,056

e) Auditor's fees

The following table shows the expensed auditor fees with KPMG being the DSI Group auditor for the financial years 2020 and 2019, respectively:

€ 000	01 Jan 2020 - 31 Dec 2020	01 Jan 2019 - 31 Dec 2019
Annual audit costs	1,256	1,320
Tax advisory services	22	68
Other non-audit services	32	12
Total	1,313	1,400

(XIII) Subsequent Events

On 24 December 2020, Tension II AcquiCo S.à r.l. and Emmerick Pty. Ltd. have entered into an agreement with Sandvik Aktiebolag regarding the sale of their entire participation in DSI Underground Holdings S.à r.l. for an expected base consideration of € 720 million. The completion of the sale is subject to clearance from merger control and foreign investment authorities of various countries. The sale is expected to be completed in the second half of 2021.

On 26 February 2021, DSI Underground Group acquired 100% of the shares in the training and virtual reality specialist Edvirt AB. The company is headquartered in Gotheburg, Sweden and has offices in the U.K. and Australia.

In March 2021, the DYWIDAG Group sold its 49% shareholding in DSI Middle East W.L.L. to Al-Bandary Engineering Trading and Contracting W.L.L. for a consideration of QAR 98 thousand.

In March 2021, the DYWIDAG Group also sold its 50% shareholding in OOO Russia for a consideration of € 140 thousand.

No other significant events have occurred in the business operations since the end of the reporting period.

Luxembourg, 04 May 2021

Tension II AcquiCo S.à r.l.