Annual Report (ESEF) • Mar 29, 2023
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Download Source FileUntitled INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION INTRODUCTION 3 Message from the CEO 3 Key gures 5 Ebusco - Made to move 6 Strategy 12 Shareholder Information 16 MANAGEMENT BOARD REPORT 19 Composition of the Management Board 20 Operational review 22 Financial review 30 Outlook 37 Our responsibility 39 The EU Taxonomy regulation 57 Risk Management and Internal Control 63 Management Statement 78 GOVERNANCE 81 Corporate governance 82 Composition of the Supervisory Board 91 Report of the Supervisory Board 92 Remuneration report 98 The chapters marked with a * are part of the report of the Management Board as dened in article 2 391 of the Dutch Civil Code FINANCIAL STATEMENTS 106 Consolidated statement of prot or loss and other comprehensive income 107 Consolidated statement of nancial position 108 Consolidated statement of changes in equity 109 Consolidated statement of cash ows 110 Notes to the consolidated nancial statements 111 COMPANY FINANCIAL STATEMENTS 147 Company statement of prot or loss 148 Company statement of nancial position 149 Notes to the company nancial statements 150 OTHER INFORMATION 156 Provisions of the Articles of Association relating to prot appropriation 157 Independent auditor’s report 158 Five year overview 165 Non-IFRS measures 166 Organisation Ebusco 170 CONTENT 2 ANNUAL REPORT EBUSCO 2022 3 3 PETER BIJVELDS FOUNDER CEO MESSAGE FROM THE CEO 2022 was a special year, not for the least because it marked Ebusco's 10-year anniversary. A decade ago, we could not have imagined where we are today. As of 2022, Ebusco buses are on the road in seven countries, with as many as 70 million zero emission kilometers on the counter and over 64 million kilograms of CO 2 saved. Back in the day, the world was still sceptical about electric buses. Mean- while, zero emission is now a key priority to reach climate goals on a global level. F ounded a decade ago as the rst European manufacturer to obtain EU approval for elec- tric buses, we have proven zero emission is a choice. The Ebusco 2.2 is already driving all around Europe and the results on the road are pro- mising: in Berlin we see the 2.2 buses can remain operational for over 30 hours on just one charge. Meanwhile, the Ebusco 3.0 is exceeding expectati- ons, as real-road data shows the total energy con- sumption of the Ebusco 3.0 is approximately 35% lower compared to the 2.2. Thanks to the popularity of both the Ebusco 2.2 and 3.0, we sold more buses in 2022 than in the previous nine years altogether. The fact that we ended 2022 with a record order book of 1,474 1 buses, is proof that Ebusco is rapidly gaining market share. As a result, our revenue increased by nearly 360% compared to 2021. Noteworthy is our framework contract with Deutsche Bahn for 800 buses and our contract with Metropole Rouen Normandy in France for 80 buses in total. Furthermore, we won our rst orders in Spain and Sweden, bringing the number of countries where Ebusco will operate to nine. Much of our growth can be explained by our people. Not hindered by the legacy that competitors have to deal with, we already learned early on that we have to be more ef cient, smarter and different to out- weigh the competition. Innovation is in the DNA of our people. Evidence of this includes the launch of the Ebusco 3.0 18-meter only a year after the rst 3.0 was delivered, already resulting in 184 buses in order. It is a clear example of the non-hierarchical and decisive culture we have been able to foster – even after our IPO in 2021. While the release of the 18-meter bus in 2022 may be the most telling example, the entrepreneurial cul- ture is deeply rooted in our company. 10 years of ex- perience allow us to make daily decisions based on real-road data, ensuring our solutions are well alig- ned with reality. Thanks to Ebusco Live, we collect 10 gigabytes of monthly data per bus, allowing our engineers to drill down to a level where we analyse energy consumption and measure our impact per second or meter. Data that will support the green transition in ways we cannot even imagine today. The green transition doesn’t stop with buses. We be- lieve Ebusco is at the heart of the entire EV ecosys- tem from start to nish, including Energy Storage Systems, charging infrastructure, depots, service and maintenance and local energy supply and grid align- ment. To drive our ambitions in terms of emission-free transport and underline our vision of a complete eco- “ Thanks to the success and recognition of both the Ebusco 2.2 and 3.0, we sold more buses in 2022 than in the previous nine years altogether. ” 1 The order book can be divided into three categories: xed (565), call of contracts (251), additional options within won contract (658). Not all call of contracts and options will transition to a xed contract, and as a consequence, revenues. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 4 ate strong shareholder value. Examples include buil- ding safety stock to keep production running for both the 2.2 and 3.0, as well as preparations to open a new production facility in Rouen, France to ramp up pro- duction and the opening of our new facility in Venray, The Netherlands in January 2023. This facility is used for Pre-delivery Inspection and warehousing. We are only on the verge of the transition to ze- ro-emission public transport, as the European Com- mission recently proposed new CO 2 emission targets for heavy-duty vehicles from 2030 onwards. There is still a long way to go, but I am sure that we are doing the right things each day to contribute to a more sus- tainable future and deliver on our international ex- pansion strategy. I would like to thank the entire Ebusco family, our clients, partners, shareholders and Supervisory Board for their ongoing support to achieve our vision ‘to dri- ve the transition to sustainable transport.’ Not only in 2022, but throughout a decade of Ebusco! system, in 2022, we have taken a 48.57% stake in Zero Emission Services B.V. (ZES). ZES is a provider of all- in concepts for emission-free inland shipping. As the solutions are highly complementary, together Ebusco and ZES can signi cantly increase their joint impact in the transport industry. Building on our experience with heavy-duty batteries and battery management sys- tems, our participation in ZES was a logical next step. None of this would have been possible without our team. I’m very proud we were able to almost double our workforce despite the tight labour market, gro- wing from 309 in 2021 to 607 FTE at the end of 2022. The fact that a large share of new hires come in via re- ferrals is proof to me that we have managed to retain the family spirit throughout our tremendous growth. A lot has changed in 10 years, but what has remained is our team’s consistent drive for innovation. While this is not always easy, with the launch of the Ebusco Aca- demy we are ensuring the quality of our production and supporting the growth of our people. Although we can be proud of many milestones, it’s equally true we are facing ongoing geopolitical un- certainty and global supply chain constraints, im- pacting the number of buses assembled, shipped and delivered. High transport prices have a pressing effect on our negative EBITDA of €34.8 million and due to the resurgence of COVID-19 in China, we had to move part of our shipments from 2022 to 2023. Next, attracting skilled personnel is a challenge. Nevertheless, I have a lot of con dence in our team who are dealing with the situation day by day to cre- “ The fact that we ended 2022 with a record order book of 1,474 buses, is proof that Ebusco is rapidly gaining market share. ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 5 KEY FIGURES 1 This gure represents the number of FTE per 31 December 2022 and includes temporary staff 2 For further information and calculation of EBITDA, reference is made to the non-IFRS measures on page 168. 5 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 6 • OPERATING IN 7 COUNTRIES • BUSES SUPPLIED OVER 420 • KILOMETERS DRIVEN 70 MILLION • KILOGRAMS OF CO 2 SAVED 64 MILLION 1 Energy Storage Systems are for main land usage and Mobile Energy Containers for maritime usage 6 FACTS EBUSCO – MADE TO MOVE Ebusco is a developer, manufacturer, and maintainer of zero emission buses and charging systems as well as a supplier of ancillary products and services to the electric vehicle ecosystem such as Energy Storage Systems (ESS) and Mobile Energy Containers (MEC) 1 . As an innovative frontrunner in the development of electric buses, Ebusco contributes to a better living environment by driving the transition to zero emission transportation. AN INDUSTRY PIONEER Founded a decade ago on the strong belief that electric transport is the future, Ebusco is an indus- try pioneer with a distinct rst mover advantage proven through extensive real-road experience. Not hindered by the legacy that competitors have to deal with, we were the rst European company to receive a European WVTA certi cate for a 100% electric bus. Bringing ground-breaking aerospace technology to the public transport market, we are determined to stay one step ahead of the market. The success of the Ebusco 3.0, a ground-breaking electric bus with a full composite body, is proof our ap- proach is working. In 2022, our order book ended with 1,474 buses compared to 325 at the year end 2021. Ebusco buses are already on the road in the Nether- lands, Belgium, France, Germany, Norway, Switzerland and Denmark. With signed contracts in 2022 for Spain and Sweden the number of countries where Ebusco is present, rises to nine. The company intends to expand its presence in both its existing markets and beyond, including European countries, Australia and North America. VISION Driving the transition to sustainable transport. MISSION To contribute to a better environment by enabling safe, sustainable, emission-free and affordable ecosystems. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 7 The company is headquartered in Deurne, the Nether- lands and has, next to its production facilities in Deur- ne, a Pre Delivery Inspection (PDI) and warehousing facility in Venray and third-party facilities in China. In 2022 Ebusco announced to set up an additional pro- duction facility in Rouen, France, which should be ope- rational in the rst half of 2024. On 31 December 2022, the company had a workforce of 607 FTE’s. The shares of the Company are listed and traded on Eu- ronext Amsterdam (AMS:EBUS) since 22 October 2021. TIMELINE ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 8 8 ON A SINGLE CHARGE WEIGHT REDUCTION 27% LIGHTER EXTENDED LIFESPAN 25 YEARS FEWER MOVING PARTS REDUCED MAINTENANCE PROPRIETARY AEROSPACE TECHNOLOGY SPACIOUS DESIGN BATTERY TECHNOLOGY COBALT FREE, RECYCLABILITY AND REUSABILITY ALL BATTERIES IN FULLY FLAT FLOOR UP TO 575/700 KM EBUSCO 3.0 The Ebusco 3.0 is a revolutionary model in the in- dustry and a testament to Ebusco’s ability to inno- vate. It has a lightweight composite body based on aerospace technology. This composite material is signi cantly lighter and stronger, giving the bus a substantially longer, single-charge, range of up to 575 kilometers and a longer estimated average life span. With the launch of the Ebusco 3.0 18-meter in December 2022 Ebusco expanded its range to up to 700 kilometers. Furthermore, in 2022 the 3.0 was awarded a Red Dot design award underlining its in- novative character. EBUSCO 3.0 - GAME CHANGER IN THE INDUSTRY ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 9 EBUSCO AT THE HEART OF TURNKEY EV - ECOSYSTEM CHARGING Charger Installation Infrastructure GRID ALIGNMENT Smart charging Bi-directional charging (V2G) Peak balancing Energy control STORAGE Energy Storage Solutions (ESS) Off-the-grid Local energy AFTERSALES Fleet management Maintenance contract Supply chain DELIVERING COMPLETE ECOSYSTEMS Ebusco leads the electri cation of transport with inno- vative zero-emission buses by overcoming major obsta- cles to electri cation. We believe Ebusco is at the heart of the entire EV ecosystem from start to nish. Therefo- re, Ebusco’s future offering comprises everything from zero emission buses to Energy Storage Systems, char- ging infrastructure, depots, service and maintenance and local energy supply and grid alignment. Building on its experience with heavy-duty batteries and battery management systems, Ebusco has taken a 48.57% stake in ZES to contribute to the broad en- ergy transition. ZES provides interchangeable energy containers for new and existing barges, complement- ing Ebusco’s ambitions in terms of emission-free transport. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 10 “Replacing a high voltage cable or the drivers seat, every day is different at Ebusco. Thijs Production Mechanic ” 10 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 11 11 CELEBRATING 10 YEARS OF INNOVATION A memorable moment for Ebusco. 2022 marked its 10-year anniversary. The ambition and vision that CEO Peter Bijvelds and team had from the very beginning, has led from the Ebusco 1.0 to currently the Ebusco 2.2 and Ebusco 3.0, an ecosystem with chargers, energy storage, Ebusco Live and much more. While a lot has changed in 10 years, the team’s consistent drive for in- novation has remained the same. Rooted in the conviction that people are key to Ebusco’s success, the company strongly promotes a family culture. Featuring a series of events, together the Ebusco team celebra- ted the 10-year anniversary throughout various activities – ranging from the 18-meter reveal party to a complete family day. Special days that fostered the team’s spirit and contributed to a feeling of togetherness. With multiple events in 2022, the 10-year celebrations are not over yet and will continue in 2023. On to another decade of Ebusco! ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 12 12 STRATEGY The Ebusco vision is to drive the transition to sustainable transport. From deve- loping the fi rst electric bus made from composite, to improving the charging struc- ture for Public Transport Operators (PTOs) and creating Energy Storage Systems for grid balancing. Ebusco believes in complete ecosystems from start to fi nish. I n addition to its electric bus proposition, Ebusco is focused on perfecting and expanding its offerings across the electric vehicle ecosystem in which its zero emission buses operate, including Energy Sto- rage Systems, charging infrastructure, depots, ser- vice and maintenance and local energy supply and grid alignment. Currently Ebusco’s offering of zero emission buses comprises the Ebusco 2.2 and the revolutionary Ebusco 3.0 model. To achieve our goal of making sustainable, emissi- on-free transport the norm rather than the excepti- on, we have a clear strategy in place. GLOBAL EXPANSION ROADMAP IN PLACE TO CAPTURE OPPORTUNITIES ACROSS GEOGRAPHIES Ebusco’s comprehensive international roll-out plan underpins its international expansion strategy. This strategy includes a well-de ned sales and marketing strategy, tailored for each target market, and capital ef cient upscaling and geographic diversi cation of the company's manufacturing capacity. Furthermo- re, it provides for standardisation of processes to war- rant reliability, and the required internal systems and human resources needed for successful execution. This international roll-out plan is key to the company’s ability to rapidly capture market share in its target mar- kets. In addition to the European market, the compa- ny’s future target markets include North America (the United States and Canada) and APAC countries Austra- lia, New Zealand, Japan, Singapore as well as the Gulf Cooperation Council (GCC) regions, initially without local manufacturing facilities. The record number of orders of no less than 1,474 buses by the end of 2022, is proof that Ebusco is rapidly gaining market share in- ternationally. Furthermore, the launch of the rst right- hand drive in Australia in September 2022 underlines the company’s international ambitions. WELL-DEFINED SALES AND MARKETING STRATEGY TAILORED FOR EACH TARGET MARKET The company's sales and marketing strategy aims to build solid relationships with Public Transport Autho- rities (PTAs) and PTOs. Ebusco engages with PTAs and PTOs by participating in tender bids, providing custo- mised turnkey solutions and transferring knowledge to key institutions and decision-makers to establish itself as a stakeholder in the local public transit sys- tem and accelerate the transition to electric buses in each target market. Ebusco's turnkey solutions minimise operational risk for the customer while maximising reliability, and helping governments and other public transit stakeholders achieve their sustainability targets. Ebusco’s framework contract with Deutsche Bahn for 800 buses, the contract with Metropole Rouen Normandy in France and the rst orders in Spain and Sweden are just a few examples of Ebusco’s interna- tional success in 2022. CAPITAL EFFICIENT UPSCALING AND GEO- GRAPHIC DIVERSIFICATION OF ENHANCED MANUFACTURING CAPACITY To meet the high demand for the Ebusco 3.0, the company is continuously increasing its production capacity. The international roll-out plan includes a production framework, consisting of three types of manufacturing and/or assembly facilities. To manu- facture the Ebusco 3.0, the company aims to set up at least one Original Equipment Manufacturer (OEM) Plant on each continent in which it plans to sell buses, supported by C omplete Knock-Down (CKD) plants geographically spread over relevant regions Electrical buses Industry leading EV buses with real-road experien- ce and game changing new model. Charging Complete package with small-sized chargers. Design and installation of charging infrastructure. Storage Energy storage solutions (ESS) and Mobile Energy Containers (MEC). Local storage of energy to reduce grid connection. Grid alignment Smart charging infrastructure, energy storage and grid balancing solutions to organise the energy ecosystem of the future. After sales Digital, real-time eet management system. Full-service or exible maintenance contracts and ef cient spare parts supply chain. OUR OFFERING ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 13 13 where needed. Ebusco will set up PDI facilities in se- lected countries to establish the local presence nee- ded to ful ll local content requirements and to tailor Ebusco's services to local customer requirements. Currently, the Ebusco 3.0 is manufactured and as- sembled exclusively at the company’s facility in Deurne, which serves as a blueprint for scale across multiple geographies. In 2022 the rst steps towards geographical diversi cation were taken. In July, the company signed a Letter of Intent for a manufactu- ring and assembly location in Rouen, France. This facility consists of circa 21,000 m2 which will ena- ble the production and assembly of an initial 500 buses by the time the facility will be fully equipped and staffed which is expected early 2024. The in- vestment that is expected to be required to achieve this production capacity is €15 million spread over 2023 and 2024. Moreover, to make room to increase the production capacity in Deurne, the groundwork was laid for the company’s rst separate PDI facility in Venray, the Netherlands. The new facility is operational since the rst quarter of 2023. RELIABLE PROCESSES, PROCEDURES, IT SYSTEMS AND HUMAN RESOURCES TO FACILITATE INTERNATIONAL ROLL-OUT PLAN Ebusco’s centre of excellence, coordinated from its head of ce in Deurne, is a systematic initiative to develop reliable processes and procedures that can be replicated to ensure processes and proce- dures are standardised and effective. It is crucial to the company’s growth as it increased its headcount from 309 FTE in 2021 to 607 FTE at the end of 2022. To ensure a harmonized future-proof organization to support the company’s continuous growth, the com- pany has started with the implementation of a new ERP system in 2022. The implementation is expec- ted to be carried out throughout the full year of 2023 and will help the company to execute on its growth ambitions. In addition, the implementation of a new Product Lifecycle Management (PLM) system has started and is expected to be implemented in 2023. EXPANSION INTO ADJACENT MARKETS SERVING THE ELECTRIC VEHICLE ECOSYSTEM In addition to bus production, sales and after-sales support services, Ebusco focuses on expanding its offerings across the electric vehicle ecosystem in which its buses operate, including Energy Storage Systems (ESS), charging infrastructure, after sales and local energy supply and grid alignment. As part of the company’s vision of a complete EV eco- system from start to nish, Ebusco has developed both ESS and Mobile Energy Containers (MEC). Whe- reas the ESS systems can be used for grid alignment, the MEC containers can be used in hybrid electric bar- ges. In 2022, Ebusco announced the rst commercial success of its in house developed ESS system with the rst contract to Emmett Green. Delivery and reve- nue of these systems is expected for 2023. Further- more, the company acquired a 48.57% of the share capital of ZES. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 14 14 Acquiring a stake in ZES perfectly ts Ebusco’s stra- tegy and mission to contribute to a better environ- ment by enabling safe, sustainable, emission-free, and affordable transportation ecosystems. ZES is a provider of all-in concepts for emission-free inland shipping, including Modular Energy Concept solu- tions. As the solutions are highly complementary, together Ebusco and ZES can signi cantly increase their joint impact in the transport industry. Conse- quently, Ebusco has signed an agreement with ZES to manufacture, deliver and commission twenty MEC containers, expected to be delivered in 2023 and 2024. Ebusco aims to accelerate the development and commercialisation of new solutions and strengthen customer relationships to diversify revenue oppor- tunities from smart charging infrastructure, energy storage and grid balancing solutions and heavy-du- ty batteries (for use in shipping vehicles). The com- pany believes that these initiatives could also be used in the longer term to position Ebusco to lever- age existing technology to seize new opportunities in adjacent sectors such as bus rapid transport and autonomous driving. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 15 “A highly educational internship in which I can contribute to the energy transition, that’s what energizes me! Ron Former Sales Intern, Now Sales Associate 15 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 16 16 16 SHAREHOLDER INFORMATION SHARE INFORMATION Ebusco Holding N.V. is listed on the offi cial stock market of Euronext Amsterdam (EBUS.AS) since 22 October 2021. On 31 December 2022, the number of issued ordinary Ebusco Holding N.V. shares amounted to 59,039,380 with a nominal value of €0.01. Each share in the capital of Ebusco Holding N.V. gives entitle- ment to cast one vote. SHARE PERFORMANCE REVIEW The performance of Ebusco’s ordinary shares on Euronext Amsterdam: 2022 2021 Closing ordinary share price at calendar year-end (in EUR) 13.17 27.00 Average closing ordinary share price (in EUR) 20.06 25.53 Highest closing ordinary share price (in EUR) 27.00 30.00 Lowest closing ordinary share price (in EUR) 13.06 21.85 Average daily trading volume (in shares) 71,833 91,740 Highest daily trading volume (in shares) 451,732 916,387 Market capitalisation (EUR million) 778 1,594 MAJOR SHAREHOLDERS In line with the Dutch Financial Supervision Act, holders of shares of Ebusco Holding N.V. are required to update information on their holdings when they reach, exceed, or fall below the thresholds of 3%, 5%, 10%, 15%, 20%, 25%, 30%, 40%, 50%, 60%, 75% and 95% reach. As far as Ebusco is aware and on the basis of the AFM register of substantial holdings, the following investors held a holding of 3% or more in Ebusco on 31 December 2022 and the date of this report. Shareholders Participation in % Date of last report P.H.A.M. Bijvelds 35.37 October 2021 VDVI B.V. 21.79 December 2022 ING Groep N.V. 20.95 October 2021 Teslin Participaties Coöperatief U.A. 5.11 October 2021 * The shares are held by Peter Bijvelds Holding Erp B.V., which shares are held by Stichting Administratiekantoor Peter Bijvelds Holding Erp B.V., for the bene t and account of P.H.A.M. Bijvelds. ONE-YEAR PRICE DEVELOPMENT OF EBUSCO ORDINARY SHARES On 31 December 2022, the closing price of an Ebusco ordinary share on Euronext Amsterdam was €13.17, a 51.1% decrease compared to €27.00 on 31 December 2021. During the same period, the ASCX index decreased by 15.3%. During 2022, Ebusco shares traded on Euronext Amsterdam at an average closing price of €20.06 and an average daily trading volume of 71.8 thou- sand shares. Ebusco’s market capitalization was €778 million at year-end 2022. The highest closing price for Ebusco’s shares on Euronext Amsterdam was €27.00 on 5 January 2022, and the lowest was €13.06 on 28 December 2022. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 17 EBUSCO’S SHARE PRICE 2022 EBUSCO SHARE PRICE (EUR) EBUSCO’S DAILY TRADING VOLUME TRADING 25 25 20 20 15 15 10 10 5 5 0 0 30 400,000 350,000 300,000 250,000 200,000 150,000 100,000 50,000 0 450,000 500,000 30 35 Price 0 20% -20% -40% -60% 17 DIVIDEND POLICY Ebusco does not intend to declare or pay dividends for the nancial year ending 31 December 2022 or in the medium term. The company anticipates that for the foreseeable future it will retain all its future earnings for use in the development of its business, its international expansion strategy and for general corporate purposes. INVESTOR RELATIONS Ebusco is committed to maintaining an open and constructive dialogue with its current and potential shareholders (jointly the Investors) and analysts. Conversations with investors and analysts, both in (annual or extraordinary) general meetings and on a bilateral basis outside of such general meetings (e.g. investor calls, road shows, broker conferences etc.), form an integral part of this dialogue. Ebusco aims to keep the investors and analysts updated by informing them equally, simultaneously, clearly and accurately about Ebusco’s strategy, perfor- mance and other matters and developments that could be relevant to Investors’ decisions either via meetings, presentations, conference calls etc. as referred to in best practice provision 4.2.3 of the Dutch Corporate Governance Code or otherwise. The company website www.ebusco.com provides relevant information (press releases, nancial data) for investors. Ebusco observes a closed period during which no discussions are held with investors and analysts. This pertains to a period of 45 calendar days prior to the publication of the yearly results and 30 calendar days prior to the publication of half yearly results. Furthermore, the closed period is 10 calendar days prior to the publication of pre-scheduled trading updates. PREVENTION MISUSE OF INSIDER INFORMATION Ebusco has rules governing the reporting of trans- actions involving Ebusco Holding N.V. securities by its Supervisory Board, Management Board and other appointed persons, including staff, the management and a number of permanent advisors. The Insider Trading Policy is published on the corporate website investors.ebusco.com. Ebusco has also appointed the corporate secretary as compliance of cer. The compliance of cer is responsible for supervising compliance with the rules and regulations, and communication with the AFM. FINANCIAL CALENDAR 2023 Annual General Meeting 17 May 2023 Half year results 2023 9 August 2023 Q3 trading update 11 October 2023 Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Jan Dec Nov Oct Sep Aug Jul Jun May Apr Mar Feb Highest closing Lowest closing Year-end closing 2022 2021 Ebusco holding AScX© ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 18 “ I love to see how all the individual parts we hand over to production end up forming a complete bus. Maarten Warehouse employee 18 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 19 MANAGEMENT BOARD REPORT CONTENT Composition of the Management Board 20 Operational review 22 Financial review 30 Outlook 37 Our responsibility 39 The EU Taxonomy regulation 57 Risk Management and Internal Control 63 Management Statement 78 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 20 20 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 21 21 TAKING A STAKE IN ZERO EMISSION SERVICES B.V. As a pioneer in zero-emission solutions, Ebusco goes beyond buses. Being a leader in the electri cation of transportation, the company believes in a complete EV ecosys- tem from start to nish, including Energy Storage Systems, charging infrastructure, depots, service and maintenance and local energy supply and grid alignment. Building on its experience with heavy-duty batteries and battery management sys- tems, Ebusco has developed both Energy Storage Systems (ESS) and Mobile Energy Containers (MEC) to fuel its vision of a complete ecosystem. In 2022 the company an- nounced the rst commercial success of its in house developed ESS system with the rst sale to Emmett Green. To signi cantly drive its impact in the electri cation of transport, in 2022 Ebusco also acquired 48.57% of the share capital of Zero Emission Services B.V. (ZES). ZES is a provider of all-in concepts for emission-free inland shipping, including Modular Energy Concept solutions. The stake brings Ebusco one step closer to a full EV ecosystem. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 22 OPERATIONAL REVIEW INTRODUCTION 2022 was a year of many contrasts: while Ebusco experienced tremendous growth on the one hand, it also faced major challenges. During its 10-year anni- versary, the company closed the year with a record-high order book and almost doubled its workforce. Simultaneously, these highs were coupled with some lows: due to supply chain constraints, part of the revenue had to be shifted from 2022 to 2023 due to longer-than-expected assembly times. Meanwhile, the company is working hard to ramp up its production capacity, amongst others by entering into an agreement for a new production facility in France. DELIVERY AND SHIPMENTS In 2022 Ebusco produced and shipped more buses compared to 2021, resulting in a signi cant incre- ase of revenues in the year ending on 31 December 2022. In total, Ebusco was able to deliver 75 buses to its customers, all 2.2 buses. Moreover, the company shipped 200 2.2 buses from its partner assembly plants in China to its manufacturing location in Deur- ne, The Netherlands. From these shipments, approxi- mately 130 buses are scheduled to be delivered to the customer during the rst half of 2023. Furthermore, the company had 57 3.0 buses in production by the end of December 2022, scheduled to be delivered to the customer during the rst half of 2023. Nevertheless, supply chain constraints during the year combined with the resurgence of COVID-19 in China during December 2022 resulted in longer than expected assembly times in Deurne, Xiamen and Yangzhou. As a result, the shipment of 21 of 18m Ebusco 2.2 buses shifted from 2022 into 2023. Furthermore, the supply chain constraints also re- sulted in higher than expected transport costs as a number of parts had to be transported by air instead of by sea freight. These constraints have also led to signi cant rework, resulting in inef ciencies in our manufacturing process. Lastly, attracting skilled per- sonnel remains a challenge. ORDERBOOK DEVELOPMENT Ebusco ended 2022 with a record order book of 1,474 buses compared to 325 at the year end 2021. In total, Ebusco received orders ( xed contracts, call-off and options) for 1,225 buses in 2022 (2021: 240 buses), of which 336 3.0 buses. Customers are especially attracted to the low-weight design of the Ebusco 3.0 resulting in low energy con- sumption. In times of elevated electricity prices and growing awareness of the importance of energy ef- ciency, this is an important differentiating factor. The fact that this consumption data is backed by real-road data from our buses in Munich as well as independent e-Sort tests has further strengthened our position. The order book by the end of 2022 can be summari- zed as follows: Fixed contracts Call-off Option Total Ebusco 2.2 190 251 645 1,086 Ebusco 3.0 375 0 13 388 Total 565 251 658 1,474 22 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 23 Orderbook by region and type at 31 December 2022 Orders received in 2022 by region The call-off option relates to the framework contract with Deutsche Bahn. Ebusco is the exclusive supplier of electric buses to Deutsche Bahn. These call-off op- tions could lead to xed contracts but might also be lost in the end. The options are an add-on to a xed contract. More speci cally, the customer is entitled to order under the same terms and conditions as the xed contract. However, the customer might not exer- cise the option. The majority of orders come from Germany, a his- torically strategically important market for Ebusco. The biggest order in the German market in 2022 was a framework contract with Deutsche Bahn with a maximum order volume of 800 buses for the period 2023-2026. Moreover, the company signi cantly ex- panded its footprint in the Nordics with in total 219 new orders. In Sweden, Ebusco closed its rst order in June, already leading to a follow-up order in Novem- ber 2022. Next to this, Ebusco won multiple conces- sions in Norway. Other noteworthy orders include the order for 76 3.0 buses from Metropole Rouen as well as 21 buses for the City of Barcelona, Spain. The latter brings the to- tal number of countries where Ebusco will operate to nine. The table below shows a summary of large orders received in 2022. Month Customer Type # of buses January Stadtwerke Munich 3.0-18 meter 14 January Regensburg Germany 2.2-18 meter 22 January Sudwestdeutsche Landesverkehrs-AG (SWEG) 2.2-12 meter 10 February Metrolpole Rouen Normandie 2.2-18 meter 3.0-18 meter 4 76 April Deutsche Bahn Various 800 June Svealandstra ken Sweden 3.0-18 meter 23 July Nobina Denmark 3.0-12 meter 19 July Area Metropolitana de Barcelona 2.2-12 meter 21 September Nobina Oslo 3.0-12 meter 3.0-18 meter 22 54 September Connect Bus Sweden 3.0-12 meter 3.0-18 meter 29 18 November Svealandstra ken Sweden 3.0-18 meter 13 November EBS Netherlands 3.0-13.5 meter 31 December NIAG Germany 3.0-12 meter 12 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 24 TENDER ACTIVITY As the company’s order book increases, Ebusco sees a signi cant tender increase in 2022 compared to 2021. At the end of 2022, Ebusco has identi ed ten- ders 1 for 4,744 buses which are expected to be awar- ded over the next 12-24 months. The strong tender activity is proof that the electri ca- tion of public transport, as part of the broader sustai- nability drive, continues to be high on the agenda of (local) governments and transport operators despite the macroeconomic backdrop. PRODUCTION RAMP UP To meet the high demand for its buses, Ebusco conti- nued to ramp up manufacturing capacity in Deurne in 2022. At the end of the rst quarter of 2023, the com- pany aims to achieve the milestone of manufacturing one bus per day in Deurne despite of the continuing material shortages. The capacity will be ramped up to two buses per day during the rst half of 2023. Re- aching this capacity requires recruiting an additional 100-110 FTE and relocation of the existing Ebusco 2.2 Pre-Delivery Inspection (PDI) activities to a new loca- tion in Venray, The Netherlands. To further scale its production, in 2022 Ebusco signed a Letter of Intent for the lease of a new production fa- cility in Rouen, France, which was formalized in Febru- ary 2023. The project is moving forward as planned. Orders for production equipment with a long lead time have been placed and a dedicated project team has been formed. This team works together with a project team of the facility owner to enable Ebusco to move into the facility during the third quarter of 2023 and be fully equipped and operational early 2024 for casco manufacturing and bus assembly. Once fully operational the Rouen facility will have a manufacturing capacity of 500 buses per annum. Gi- ven this location's size, Ebusco can scale up capacity further in future years. The initial capital expenditure for the Rouen project is estimated at € 15 million. SUPPLY CHAIN DEVELOPMENTS The supply chain situation continued to normalise over 2022 but remains erratic at times. Although the parts availability has improved, Ebusco continues to experience late deliveries which sometimes leads to higher transport costs and inef ciencies during as- sembly. To withstand supply chain shocks Ebusco continues to hold signi cant safety stock enabling the continu- ation of production, albeit at the expense of working capital ef ciency. Next to supporting the current pro- duction schedule, the safety stock also allows to take in new orders for shipment in 2023 well into 2024. Furthermore, in 2023 there will be a strong focus on identifying dual source suppliers to lower risks and using scale advantages to lower the cost of goods sold. 1 Included in tender pipeline: Awarded, Best and nal offer (BAFO), Prequali- cation, Proposal submitted, Request for information (RFI) and Request for quotation (RFQ). ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 25 “ The best part of my job is that I get to wish all employees, customers and deliverers a good morning each and every day. Monique Back Offi ce Assistant 25 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION INFORMATION TECHNOLOGY To ensure a harmonized future-proof organizati- on to support the company’s continuous growth, the company has selected a new ERP system. This ERP system will replace the current, active legacy systems. The ERP system is expected to go-live in 2024. Next to this, the company selected a new PLM system, which is expected to go-live by the end of 2023. STAFFING In 2022 Ebusco almost doubled its workforce, starting the year 2022 with 309 full-time employees, increasing to 607 full-time employees, including temporary em- ployees per 31 December 2022. The company welco- med 503 new starters, including temporary employees, during 2022 and was able to maintain a very strong re- tention rate of 93%. These indicators show that Ebusco is an attractive employer. 26 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 27 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 28 “I love working on the electrical techniques of the bus, as they contribute to a bright future. Zvezdelin Production Mechanic 28 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 29 * For further information and calculation of these Alternative Performance Measures (APMs), reference is made to the non-IFRS measures on page 168-171. ** Including temporary staff ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 30 30 RESULTS OF OPERATIONS The following table summarises the Group's nancial performance for the years ended 31 December 2021 and 2022. Year ended 31 December (€ thousands) 2022 2021 Revenue 111,617 24,265 Cost of materials (95,984) (23,045) Gross profi t 15,633 1,220 Employee bene t expenses (35,525) (23,106) Amortisation and depreciation expenses (5,627) (5,331) Other operating expenses (14,916) (12,354) Operating expenses, excluding cost of materials (56,068) (40,791) Operating result (EBIT) (40,435) (39,571) Finance expenses, net (1,060) (4,240) Share of result of an associate (432) 7,427 Result before tax (41,927) (36,384) Income tax credit/(expense) 9,734 9,587 Result for the year (32,193) (26,797) Operating result (EBIT) (40,435) (39,571) Non-recurring items - 13,694 Underlying EBIT (40,435) (25,877) Amortisation and depreciation expenses 5,627 5,331 Underlying EBITDA (34,808) (20,546) * This is a non-IFRS measure. For further information about non-IFRS measures, and the response why we believe they are important for an understanding of the performance of our company, please refer to our commentary on non-IFRS measures as per page 168-171. FINANCIAL REVIEW INTRODUCTION In 2022 Ebusco managed to grow its revenue by approximately 360% compared to the fi nancial year 2021. At the same time, the company dealt with a disap- pointing operating result amounting to a loss of €40.4 million. This was mainly due to gross profi t pressure as a result of continuous supply chain disruptions, high transportation and distribution costs and the unfavourable FX exposure on the Chinese Yuan (versus the EUR). These items combined have led to a gross profi t margin of 14.0% (2021: 5.0%). In addition, employee benefi t expenses have increased by more than 50% to support our international roll-out plan. Moreover, cash decreased by more than €112 million in 2022, mainly driven by cash ow from operations. The decrease in cash ow from operations was caused by an increase of net working capital for €64.6 million and the reported net loss before tax of €41.9 million. The increase in net working capital was mainly caused by an increase of contract assets and liabilities for €40.8 million and an increase in inventories for €25.1 million. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION COMPARISON OF THE YEARS ENDED 31 DECEMBER 2021 AND 2022 REVENUE Driven by the strong post Covid-19 order intake in the second half of 2021 and 2022, the revenue for 2022 ar- rived at €111.6 million. A signi cant increase compared to the full year 2021, which came in at €24.3 million. Revenue was clearly higher in the second half of 2022 compared to the rst six months. Revenue recognition is typically geared towards the second half of the year as the company often makes deliveries at the start of a concession period, and these typically start at the beginning of the summer or winter. Despite this signif- icant revenue increase, supply chain constraints com- bined with the resurgence of COVID-19 in China during December resulted in longer than expected assembly times. As a result, the shipment of 21 of Ebusco 2.2 18-meter buses, which have an above-average selling price, shifted from 2022 into 2023. The following table shows revenue per region of the Group's revenue for the years ended 31 December 2021 and 2022. Revenue – Geographical breakdown (€ thousands) Year ended 31 December 2022 2021 DACH 1 59.812 9,722 Nordics 2 27,468 8,418 Benelux 16,946 6,035 Spain 7,389 - Rest of the World (RoW) 2 90 Total revenue 111,617 24,265 1 DACH is an acronym for Germany (D), Austria (A) and Switzerland (CH). 2 Nordics is an acronym for Denmark, Sweden, Norway and Finland. REVENUE The Group's revenue increased in all regions except for RoW. The increase was mainly due to the post Covid-19 order intake increase and, consequently, an increase in shipments and deliveries. With a sale of 21 Ebusco 2.2 12-meter buses to Spain, Ebusco also entered a new market in the course of 2022. These buses have been shipped but have not yet been delivered on 31 Decem- ber 2022. The revenue recognized for RoW relates to maintenance only. GROSS PROFIT Gross pro t increased by €14.4 million or 1,181%, from €1.2 million in 2021 to €15.6 million in 2022. Nor- malised for the one-off replacement of the climate control systems in the nancial year 2021, gross pro t amounted to €5.1 million. Ebusco’s cost of materials includes costs of mate- rials (including parts and other components), cost of work contracted out (relating primarily to Weichai, the Group's third-party supplier that assembles the Ebusco 2.2 at a manufacturing facility in Xiamen, China) and other external costs, including transportation costs, import duties, and spare parts. Supply chain disrup- tion led to an increase in the costs of raw materials and transportation while adverse currency movements (Chinese Yuan vs. Euro) also had an impact. The gross pro t as a percentage of revenue increased from 5.0% in 2021 to 14.0% in 2022. Normalised for the one-off replacement of the climate control systems in the nancial year 2021, the gross pro t as a percentage of sales was 21.3%. This represents a gross pro t decline of 7.3%. This decline is partly caused by a further deteri- oration of the Chinese Yuan (CNY) against the euro. The average currency exchange rate between the euro and CNY for 2022 was 7,08 and for 2021 7,63. As the Ebusco 2.2 buses are being assembled and shipped from China, the deterioration of the CNY is unfavourable to the com- pany. Next, the supply chain constraints resulted in high- er-than-expected transport costs compared to previous expectations as a number of parts had to be transported by air instead of by sea. Finally, in 2022 the company recognised a warranty provision for €0.7 million which has negatively impacted the gross margin by 60 bps. For further information and calculation of gross pro t, reference is made to the non-IFRS measures on page 168. EMPLOYEE BENEFIT EXPENSES Employee bene t expenses increased by €12.4 million or almost 54%, from € 23.1 million in 2021 to €35.5 million in 2022. This increase is mainly due to the increase in headcount. The average number of full-time employees increased by 96% from 227 FTEs (including contractors) in 2021 to 446 FTEs (including contractors) in 2022. Note that the 2021 employee bene t expenses included a non-recurring expense related to a settlement of a suc- cess fee arrangement with the CFO (€5.0 million). Employee bene t expenses almost doubled compared to 2021, adjusted for the one-time expense in 2021. The increase in the number of employees and asso- ciated costs is to prepare the Group for future growth. 31 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 32 “Ebusco is a great place to work, where I can learn a lot on a technical level besides my studies. Ellen Proto Mechanic 32 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 33 AMORTISATION AND DEPRECIATION For 2022, amortisation decreased by €0.6 million or 27% from €2.5 million in 2021 to €1.9 million in 2022. The decrease mainly relates to fully amortized intangi- ble assets in the course of 2021 and 2022. Depreciation increased by €1 million or 36% from €2.8 million in 2021 to €3.8 million in 2022. Depreciation of property, plant and equipment increased by €0.6 million to €2.3 million in 2022 mainly following invest- ments in equipment and of ce inventory in 2021 and 2022. Depreciation of right-of-use assets increased by €0.3 million to €1.4 million in 2022, mainly following from new leases and indexation of leased buildings and cars in 2021 and 2022. OTHER OPERATING EXPENSES The following table summarises the Group's other op- erating expenses for the periods indicated. Other operating expenses Year ended 31 December (€ thousands) 2022 2021 General expenses 5,416 8,176 Distribution expenses 2,687 1,449 IT expenses 2,541 1,213 Marketing expenses 1,156 552 Facility expenses 996 450 Of ce expenses 264 136 Other operating expenses 1,856 378 Total other operating expenses 14,916 12,354 O ther operating expenses increased by €2.5 million or 21%, from €12.4 million in 2021 to €14.9 million in 2022. The increase was partly due to an increase in dis- tribution expenses. The supply chain constraints re- sulted in higher than expected transport costs com- pared to previous expectations as a number of parts had to be transported by air instead of by sea. Furthermore, the group has Research & Develop- ment expenses of €0.5 million recognised as an ex- pense during the reporting periods (2021: nil). Facility and of ce expenses increased due to in- creased rented space and the number of full-time equivalents in Deurne and Venray to facilitate growth and the set-up of the in-house production of the Ebusco 3.0. Facility expenses include costs for utilities, insurance, and other non-rent related ex- penses associated with the Group’s facilities. OPERATING RESULT AND UNDERLYING EBIT The operating result decreased by €0.8 million from €39.6 million loss in 2021 to €40.4 million loss in 2022. Despite the signi cant revenue growth, the company incurred a signi cant operating loss. This operating loss was partly driven by delayed ship- ments, resulting in revenue recognition delays. In addition, limited availability of some customer-spe- ci c IT systems as well as heating and cooling sys- tems pushed the nal delivery schedule of 90 Ebus- co 2.2 buses from December 2022 into 2023. Besides revenue challenges, the bus cost prices increased signi cantly due to higher costs for raw materials and spare parts, increased transportation costs and a deterioration of the Chinese Yuan (CNY) against the euro. These elements had a negative im- pact on our gross margin. Underlying EBIT decreased by €14.5 million from €25.9 million loss in 2021 to €40.4 million loss in 2022, mainly due to gross margin deterioration as a result of higher costs for raw materials and spare parts, increased transportation costs and a deteri- oration of the Chinese Yuan (CNY) against the euro. In 2022, no non-recurring expenses were incurred. In 2021, the non-recurring expenses of €13.7 million related to the settlement of an existing success fee agreement (€5.0 million), expenses related to the re- placement of the climate control systems pursuant to a settlement agreement with a customer (€3.9 million) and expenses related to the IPO (€4.8 mil- lion). For further information and calculation of underlying EBIT, reference is made to the non-IFRS measures on page 169. FINANCE EXPENSES, NET Finance expenses, net decreased by €3.2 million, or 75%, from €4.2 million in 2021 to €1.1 million in 2022 This decrease was mainly due to loans and borrow- ings that were largely repaid subsequent to the IPO in October 2021, and the €80.0 million credit facility agreement that was terminated in December 2021. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION SHARE OF RESULT OF AN ASSOCIATE Share of result of an associate decreased by €7.9 million to negative €0.4 million in 2022 from €7.4 million in 2021. In 2021, at the acquisition date, the carrying value of the Group’s 20% interest in Pondus was nihil. Accordingly, the Group recognised a gain of €7.5 million as a result of remeasuring the carry- ing amount of its ‘Investment in associates’ at fair value. On 28 January 2022, Ebusco Energy B.V. acquired 40% of the voting shares of ZES, a provider of all-in concepts for emission-free inland shipping. The con- sideration paid amounted to one euro. On 8 November 2022, the shareholders of ZES were granted the option to subscribe to an additional share issuance. As a re- sult, the Group acquired an additional 8.57% of the vot- ing shares of ZES. The consideration paid amounts to an additional €1.5 million. The Group accounts for this as an investment in an as- sociate over which the Group has signi cant in uence. The investment in ZES is accounted for using the eq- uity method in the consolidated nancial statements. INCOME TAX In 2022, the income tax credit amounted to €9.7 million (2021: income tax credit of €9.6 million). The income tax credit largely refers to the operations of Ebusco Holding N.V. and Ebusco B.V. Ebusco Holding N.V. established a Dutch scal uni- ty as from December 1, 2021; all Dutch subsidiaries have joined the scal unity except for Pondus Oper- ations B.V. as the Group’s shareholding in this entity is only 90%. The effective tax rate decreased to 23.2% in 2022 compared to 26.3% in 2021. The lower effective tax rate is mainly the result of non-deductible expense items (2022: (0.4%); 2021: 2.0%) and the effect of unrecognised and unused tax losses. The effect of unrecognised and unused tax losses in 2022 mainly relates to scal tax losses incurred by Pondus Oper- ations B.V. The effect of previously unrecognised and unused tax losses in 2022 relates to future expected taxable pro ts of Pondus R&D B.V. RESULT FOR THE YEAR Result for the year decreased by €5.4 million, from €26.8 million loss in the year ended 31 December 2021 to €32.2 million loss in the year ended 31 De- cember 2022. This decrease was driven by gross margin detoriation. EARNINGS PER SHARE Earnings per share increased from negative €0.56 per share in 2021 to negative €0.54 per share in 2022. The average number of shares outstanding amounted to 59.0 million (2021: 47.5 million). At year end 2022 59.0 million shares were outstanding (2021: 59.0 million). LIQUIDITY AND CAPITAL RESOURCES OVERVIEW The Group's primary use of liquidity is for the day- to-day operation of its business relating to the pro- duction and assembly of buses, capital expenditures and other investments is further detailed below and on the next pages. CASH FLOWS The following table presents a summary of the Group's cash ows for the periods indicated, which have been extracted from the Financial Statements. Year ended 31 December (€ thousands) 2022 2021 Net cash ows from operating activities (99,058) (19,390) Net cash ows from investment activities (8,496) (27,284) Net cash ows from nancing activities (5,172) 227,734 (Decrease)/Increase in cash and cash equivalents (112,726) 181,060 Exchange gains/(losses) on cash and cash equivalents 15 1 Cash and cash equivalents at the start of the period 207,923 26,862 Cash and cash equivalents at the end of the period 95,212 207,923 34 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 35 35 COMPARISON OF THE YEARS ENDED 31 DECEMBER 2021 AND 2022 CASH FLOWS FROM OPERATING ACTIVITIES Net cash out ow from operating activities for 2022 was negative €99.1 million, an increase of €79.7 million or 411% from net cash out ow of €19.4 mil- lion for 2021. Pro t/(loss) before tax decreased from a net loss before tax of €36.4 million in 2021 to a net loss before tax of €41.9 million in 2022. Besides the loss before tax, the net cash out ow from operating activities was driven by movements in net working capital. Contract assets and liabili- ties increased by €40.8 million in 2022, inventories increased by €25.1 million and receivables from customers increased by €10.7. This was partly off- set by an increase in payables to our suppliers by €12.0 million. In general, the net working capital in- creased by €64.6 million in 2022. CASH FLOWS FROM INVESTING ACTIVITIES Net cash out ow from investing activities for 2022 was €8.5 million, a decrease of €18.8 million from net cash out ow of €27.3 million for 2021. This decrease in cash out ow from investing activities was due to the considerations with regards to the additional 60% acquisition of the voting rights of Pondus Holding B.V. in April 2021. CASH FLOWS FROM FINANCING ACTIVITIES Net cash out ow from nancing activities for 2022 was €5.2 million, a decrease of €232.9 million com- pared to 2021. In 2021, the company received net pro- ceeds from the issuance of share capital and listing on Euronext in October 2021 of € 316.1 million to fund future growth, international expansion and increase of manufacturing capacity. The cash in ow from the IPO proceeds was partly used for the net repayment of loans and borrowings of €64.0 million and the repay- ment of a convertible loan (€0.8 million). Payment of principal portion of lease liabilities in- creased by €0.2 million to €1.5 million in 2022 mainly due to the expansion of of ce- and production facility space rented and indexation of leased buildings and cars in 2021 and 2022. FREE CASH FLOW Free cash ow decreased by €81.9 million from minus €25.6 million in 2021 to minus €107.5 million in 2022. This decrease is mainly caused by the cash out ow from operating activities, which decreased by €99.1 million. For further information and calculation of the free cash ow, reference is made to the non-IFRS measures on page 169. NET WORKING CAPITAL The Group calculates net working capital as invento- ries, including contract assets, plus trade receivables minus trade payables and contract liabilities. As of 31 December 2022, the net working capital amounted to €106.3 million (31 December 2021: €41.3 million). The increase in net working capital of €65.0 million is largely driven by the increase in contract as- sets and liabilities of €40.8 million and inventories of €25.1. The Group recognises a contract asset for ser- vices performed for a customer to which the Group has a right to receive consideration. Contract assets represent the work-in-progress assets for the production of zero emission buses. The Group reclassi es contract assets to trade receivables when performance obligations are satis ed and the right to consideration becomes uncon- ditional. For further information and calculation of net working capital, reference is made to the non-IFRS measures on page 170. CAPITAL EXPENDITURE Year ended 31 December (€ thousands) 2022 2021 Investments in property, plant and equipment 5,847 4,164 Investment in intangible assets 3,878 796 Capital expenditure 9,725 4,960 Investments in property, plant and equipment in- creased by €1.6 million from €4.2 million in 2021 to €5.8 million in 2022, mainly including investments in equipment related to the set-up of the blueprint facil- ity in Deurne for the manufacturing of the Ebusco 3.0 and investments for development of own demo and prototype buses. Investments in intangible assets increased by €3.1 million from €0.8 million in 2021 to €3.9 million in ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 36 2022. This increase was mainly driven by the devel- opment of energy containers (€1.2 million) and the investment in a new ERP system (€1.2 million). NET (CASH)/DEBT The Group’s net cash position, excluding lease lia- bilities, per 31 December 2022 was €94.7 million, a decrease of €112.5 million or 54% compared to a net cash position of €207.2 per 31 December 2021. The decrease in the net cash position was mainly due to an increase in net working capital (€64.6 million), the net loss before tax in 2022 (€41.9 million) and an in- crease in capital expenditures (€4.5 million). The following table presents the Group's net (cash)/ debt (including and excluding lease liabilities) as per 31 December 2021 and 2022. (€ thousands) 31 December 2022 31 December 2021 Debts to credit institutions 486 215 Debts to other related parties - 463 Sub-total loans and borrowings 486 678 Lease liabilities 7,761 8,382 Cash and cash equivalents (95,212) (207,923) Net (cash)/debt including lease liabilities (86,965) (198,863) Lease liabilities (7,761) (8,382) Net (cash)/debt excluding lease liabilities (94,726) (207,245) For further information and calculation of the net (cash)/debt, reference is made to the non-IFRS measures on pages 169-170. EQUITY Total equity decreased by €30.5 million to €273.5 million as at 31 December 2022, mainly due to the net loss for the year of €32.2 million CAPITAL EMPLOYED Capital employed decreased by €31.8 million from €311.7 million as at 31 December 2021 to €279.9 million as at 31 December 2022 as a result of an in- crease of current liabilities with €19.7 million and a decrease of total assets with €12.1 million. For further information and calculation of capital employed, reference is made to the non-IFRS mea- sures on page 170. CONTRACT ASSETS AND LIABILITIES The contract assets and liabilities increased by €40.8 million from €13.3 million as at 31 December 2021 to €54.1 million as at 31 December 2022. The increase is mainly driven by BVG, Connexxion and Barcelona. BVG represents 90 buses, expected to be delivered during the rst half of 2023. This contract amounts to €28.4 million as per 31 December 2022 (31 December 2021: nil). Connexxion represents 39 buses, expect- ed to be delivered during the rst half of 2023. This contract amounts to €14.7 million as per 31 December ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 37 2022 (31 December 2021 €1.7 million). Barcelona rep- resents 21 buses, expected to be delivered during the rst half of 2023. This contract amounts to €8.6 mil- lion as per 31 December 2022 (31 December 2021 nil). DIVIDEND POLICY AND PROPOSED DISTRIBUTION Pursuant to article 31 of the articles of association of the Company, the Management Board, with the ap- proval of the Supervisory Board, may decide that prof- its or losses realised during a nancial year are fully or partially appropriated to increase and/or decrease from reserves (article 31.1). The pro ts remaining shall be put at the disposal of the General Meeting. The Man- agement Board, with the approval of the Supervisory Board, shall make a proposal for that purpose. A pro- posal to pay a dividend shall be dealt with as a sepa- rate agenda item at the General Meeting of Sharehold- ers (article 31.2). The Company does not intend to declare or pay div- idends for the nancial year ending 31 December 2022 or in the medium term. The Company antici- pates that for the foreseeable future, it will retain all its future earnings for use in the development of its business, its international expansion and growth strategy to create shareholder value, to maintain a healthy nancial structure and for general corporate purposes. The net loss for 2022 of €32.2 million (2021: net loss of €26.7 million) will be deducted from the retained earnings. OUTLOOK Based on the current order book, ongoing tender ac- tivity and anticipated manufacturing and deliveries in 2023, management expects a signi cant increase in its revenue in 2023 compared to 2022. Ebusco is however not immune to the geopolitical uncertainty as a result of the invasion of Ukraine, and the continued strain on the global supply chain which are the key external risks we need to navigate. In view of our international rollout and growth strat- egy, capital expenditures are expected to ramp up signi cantly to increase the manufacturing capac- ity of our 3.0 buses. We will start assembling the 3.0 buses in France from 2024 onward. Nevertheless, we will continue to seek and assess production fa- cilities throughout Europe to further increase our manufacturing capacity. The management team has identi ed three key stra- tegic priorities for 2023 which should support the company‘s growth going forward. 1. Production ramp up including attracting skilled personnel 2. Optimisations in the supply chain to improve parts availability and gross margin 3. Product innovation to drive commercial momentum ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 38 38 REVEALING THE EBUSCO 3.0 18-METER Constantly searching for lightweight solutions is something that never ends. Only a year after the rst delivery of the Ebusco 3.0, the 18-meter version was revealed. As the 18-meter is the rst articulated lightweight bus in the world, Ebusco is once again writing history. Build on the foundation of the ground-breaking Ebusco 3.0 12-meter, the 18-meter is the epitome of ef ciency. Thanks to the use of compo- sites, the Ebusco 3.0 18-meter with a starting weight of just 14,500 kg is ground-breaking in terms of weight. Combining the lightweight body with ef cient battery packs of 350+ and 500+ kWh, the articulated bus has a range of up to 700 kilometers on a single charge. The composite body is the ultimate foundation to drive innovation: the lightweight material allows the downsizing of other systems to save ad- ditional energy. For example using only a single tyre at the middle of the vehicle, rather than the usual double tyres. With already 184 articulated 3.0 buses in order per 31 December 2022, the 18-meter is proof Ebusco knows how to master the Total Cost of Ownership for operators. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 39 SUSTAINABILITY STRATEGY Ebusco wants to play a leading, innovative and guiding role in the energy tran- sition in public transportation all around the world. Our ambition is fully aligned with the challenges of our planet and societies. OUR RESPONSIBILITY We have started on our ESG journey, which integrates our contribution to four priority SDGs, the material top- ics identi ed in our materiality assessment and cur- rent sustainability priorities. Milestones included: • Appointing a dedicated sustainability manager • Our rst materiality assessment • Designed and set out a rst list of sustainability key performance indicators (KPIs) • Developed a roadmap for sustainability topics • Commissioned our rst carbon footprint study In the next year, we plan to formalise our sustainability strategy even further and engage with all stakehold- ers to set priorities and implementation plans. EBUSCO'S PERFORMANCE ACCOUNTABILITY FOR MATERIAL TOPICS We take accountability for our impact, and the risks and opportunities associated with the material top- ics that we identi ed for Ebusco this year. Read more about our materiality assessment on pages 40-42 and our key drivers for sustainability from page 43. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 40 40 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION People in motion Driving for a greener future Sustainable governance Customer satisfaction Climate change mitigation Talent attraction, engagement and upskilling Sustainable innovation Energy consumption Waste and circular economy Financial environment Product leadership Cyber security Regulatory compliance Business ethics Health and savety Diversity and iclusion OUR MATERIALITY ASSESSMENT We are committed to making Ebusco a truly sustainable entity and have the ambition to further integrate ESG governance, measurement and report- ing into the Ebusco DNA. Over the course of FY22 Ebusco conducted its rst materiality assessment and embarked upon a broad- er ESG reporting journey. The outcome of the assess- ment has been validated by the Ebusco management team and it provides the foundation to further develop Ebusco’s ESG reporting ambitions. The upcoming regulatory changes in Europe in the form of amongst others the Corporate Sustainability Reporting Directive (CSRD) and the EU Taxonomy, are increasingly directing stakeholder attention to sus- tainability. Now more than ever, it is critical that companies clear- ly articulate their material issues in a balanced and non-biased way, taking into account both the impact of the organization on society and the environment, and vice versa. Within the management team and the broader orga- nization there is commitment and energy to further integrate ESG governance, measurement and report- ing into the DNA of Ebusco. This enables a transparent communication on the impact Ebusco is already mak- ing through its product portfolio. 41 The materiality assessment was based on the draft ESRS-2 published in April 2022. For future years we plan to expand our engagement and assessment to- wards the draft disclosure requirements as addressed OUR MATERIALITY PROCESS The desk research based on the stakeholders listed above yielded the longlist of 21 topics. These topics and the corresponding nancial and impact materi- ality were subsequently tested with both internal and external stakeholders through surveys, interviews and internal workshops. The stakeholders indicated that this list of topics is complete. The materiality process highlighted the following: • The process allowed Ebusco to engage with stake- holders and assess their key concerns. • Outcomes in this round were largely driven by internal stakeholders, indicating the need to engage further with external stakeholders. • We recognise this is a process to embed and repeat as we grow and respond to changing stakeholder in- sights on Ebusco’s impact, risk and opportunities. by ESRS-2 published in November 2022. We will in the future assess material sustainability risk and op- portunities, including the prioritising of positive and negative impact that re ect their relative severity and likelihood. Following this assessment Ebusco will consider how initiatives can be incorporated to modify our strategy and business model in order to reduce or eliminate the risk or to bene t from the opportunity. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 42 EBUSCO’S MATERIALITY MATRIX ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION MATERIALITY AND KEY PERFORMANCE INDICATORS Based on the identi ed material topics, we launched a process to identify related key non- nancial per- formance indicators as one of the ways in which to measure progress against our strategic ambitions. We conducted interviews to establish existing data sourc- es, governance structures, owners and to match the available information with potential internal and exter- nal reporting requirements. We also looked at validation opportunities and informal controls to be formalised. These will ensure that we position data collection and reporting to be complete, accurate and aligned to future assurance requirements. In preparation for the upcoming requirements of the EU Corporate Sustainability Reporting Directive (CSRD), the key performance indicators consider the current draft standards, and boundaries have been identi ed for each. We con rmed all key performance indicators used in this report during a series of internal workshops. We have a formal plan to mature and expand these measures and controls for future reports and CSRD readiness. In the table below, we summarise our intent and ac- countability in managing Ebusco’s performance in terms of each topic. While we made signi cant progress in 2022, we acknowledge that we are in the process of maturing our sustainability-related performance mea- sures. While this report focuses on 2022, we intend to move to integrated reporting in the future. DRIVING FOR A GREENER FUTURE OUR ACCOUNTABILITY AND COMMITMENT Climate change mitigation Selected metrics related to climate change mitigation (including scope 1 and 2 greenhouse gas emissionsemissions) will be disclosed in the Ebusco 2022 sustainability report which will be published in 2023. Additional metrics will be developed in preparation for the upcoming CSRD requirements. Our goal is to limit GHG emissions throughout Ebusco's value chain by reducing the use of fossil fuels, electrifying operations and expanding supplier assessment and engagement. Energy consumption Selected metrics related to energy consumption (including total and relative renewable/non-renewable energy consumption) will be disclosed in our Ebusco 2022 sustainability report. Additional metrics will be developed in preparation for the upcoming CSRD requirements. Waste and circular economy Addressing waste and enabling the circular economy are core elements of Ebusco's strategy and business model. We describe our impact in the annual report and will be included in our 2022 sustainability report. Additional metrics will be developed in preparation for the upcoming CSRD requirements. Sustainable innovation Sustainability innovation is considered key to Ebusco's strategy and business model. Based on the outcome of the internal KPI identi cation workshops, we prioritised the disclosure of qualitative information to demonstrate progress made. We continue to identify eligible capital expenditures in accordan- ce with the EU Taxonomy. PEOPLE IN MOTION OUR ACCOUNTABILITY AND COMMITMENT Health and safety Health and safety information is of utmost importance to enable employees to work without risk to their health and safety, as well as designing products with the highest standard of customer safety in mind. A selection of health and safety KPIs will be included in the 2022 Ebusco sustainability report. Additional metrics in alignment with the CSRD will be included in the next report. Customer satisfaction We have a number of initiatives in place to better understand the levels of customer satisfaction at Ebusco. Our customers are considered a signi cant stakeholder group. In Ebusco's 2022 sustainability report, we will use qualitative descriptions to explain our customers’ key expectations of Ebusco. Human rights We have a plan in place and created capacity at Ebusco to start identifying, managing and addressing human rights impacts across our value chain. This is in addition to the existing Ebusco Code of Conduct. Our plan is aligned with the anticipated human rights-related regulations, including the EU Taxonomy. Talent attraction, engagement and upskil- ling Qualitative descriptions to indicate the importance and initiatives related to talent attraction, engagement and upskillingare included in the people in motion chapter in this report. A selected number of KPIs will be disclosed in the 2022 Ebusco sustainability report and relate to hiring and retention. Additional metrics will be developed in preparation for the upcoming CSRD requirements including for example measures relating to training and skills development. Diversity and inclusion Diversity and inclusion information will be included in the 2022 Ebusco sustainability report. Additional metrics will be developed in preparation for the upcoming CSRD requirements including for example measures relating to equal pay. SUSTAINABLE GOVERNANCE OUR ACCOUNTABILITY AND COMMITMENT Product leadership Product leadership is important in ensuring best-in-class products that do not compromise on passenger experience and are developed with sustainable practices in mind. We will use qualitative information to describe product leadership in our 2022 sustainability report. 43 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 44 Other governance topics that are considered materi- al will be described in more detail in the 2022 Ebus- co sustainability report and include: business ethics, regulatory compliance, nancial environment and cyber security. The disclosed ESG key performance indicators are company speci c. Where possible we have aligned the de nitions with (future) reporting criteria, such as the CSRD. FUTURE PRIORITIES WHAT WE INTEND TO KEEP DOING • We will continue developing our sustainability strategy and formalising Ebusco’s statements and policies on ESG. • We will maintain our investment in the safety and development of our employees to protect and strengthen the Ebusco culture and support our rapid growth and international expansion. • We plan to enhance our product leadership and safety based on lightweight design and the use of lithium ferro phosphate (LFP) batteries which have a lower impact on the environment and higher safety compared to other options. Human rights impacts of battery production in general are included in our 2023 plan. NEW INITIATIVES • Following the EU Taxonomy eligibility assessment done this year, we are in the process of doing a tech- nical alignment screening against the European Union Green Taxonomy and working on our align- ment with the European Taxonomy Regulation (EU 2020/852) during 2023. • We are working with our suppliers to further imple- ment value chain risk analyses, including moving towards compliance with minimum safeguards to protect human rights as part of the EU Taxonomy. • We are collecting data on scope 3 GHG emissions to understand potential opportunities to reduce emissions. • We initiated an independent veri cation based on ISO 14040/14044 as part of further work on the life cycle assessment of the Ebusco 3.0 bus • We are identifying and developing a broader spec- trum of key performance indicators and will be setting targets once we have established a reliable baseline. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION DRIVING FOR A GREENER FUTURE Ebusco is committed to contributing to achieving the ambitious targets set by the EU to tackle air pollution and climate change. By the very nature of our trans- port and energy solutions, we support the Paris Agreement's objective to keep global temperature rise to well below 2°C. • Ebusco’s zero-emission buses contribute to cleaner air in cities and thus reduce the public health burden caused by emissions. • Ebusco’s energy storage systems, charging infrastructure and grid-balanc- ing solutions contribute to the energy transition in public transport. • Our dedicated engineering and product development teams are continu- ously driving innovation, often geared at further improving the sustainabili- ty pro le of our offering. BY DRIVING FOR A GREENER FUTURE, WE CONTRIBUTE TO: 45 SDG 3: Ensure healthy lives and promote well-being for all at all ages SDG 7: Ensure access to af- fordable, reliable, sustainable and modern energy for all SDG 9: Build resilient infra- structure, promote inclusive and sustainable industriali- zation and foster innovation SDG 11: Make cities and human settlements inclusive, safe, resilient and sustainable As it is so closely linked to our core business, climate change and adaptation is often regarded by Ebusco as “business as usual” and did not rank among our top material topics. However, it is a core principle and commitment for the business and our stakeholders. Ebusco’s licence to operate is linked to environmental commitments and enablers. Our zero-emission buses help transport operators to reduce their impact through winning factors such as lightweight composite bodies and optimal energy use. We also enable battery reuse and support recycling. Further, the insights from our rst life cycle assessment helped us to prioritise future environmental impact improvements. We have looked beyond the development of buses and have launched our in-house developed Energy Stor- age System s in 2022. These systems are based on knowledge gained from our decade-long experience with industrial batteries in operating battery electric buses and battery management systems. These sys- tems use new batteries but are designed to also give a second life to batteries that have been used in our electric buses. Our zero-emission buses contribute to a rapid curve in reducing emissions, and we anticipate demand to increase exponentially in the next ten years. While we scale up production, we continue to innovate for even more impact, using our experience in green solutions. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 46 Our contribution to environmental impact focuses on reduced energy consump- tion, lower maintenance and longer life spans for our buses. Although most of our customers are already using green energy, we provide them with solutions to further lower their footprint. REDUCED ENERGY CONSUMPTION After leading the market in terms of energy con- sumption and range with the Ebusco 2.2, Ebusco has taken the next step through the introduction of the Ebusco 3.0. The lightweight composite body of our Ebusco 3.0 bus (33% lighter than the Ebusco 2.2) combined with a high- ly ef cient driveline and high isolation value results in industry-leading low energy consumption per kilometer driven. This leads to the Ebusco 3.0 being able to deliver a longer range compared to the competition or the same travel range with a signi cantly smaller battery pack. LOWER MAINTENANCE COST: We offer predictive maintenance based on digital, re- al-time eet management systems to monitor Ebus- co buses and gain as much information as possible to avoid buses being out of operation. As part of our service concept, we offer to take over the lifetime maintenance responsibility for customers if this adds value for them. LONGER LIFESPAN Effective integration of composite material mini- mises the use of steel. Composites do not age nearly as quickly as steel. This takes the potential lifespan of our casco to 25 years, which is more than double that of conventional buses. Bus interior and batter- ies will need to be refurbished, however, the cost and environmental impact will be signi cantly below that of assembling a new bus. Damage to the body can be repaired simply and cheaply by either the opera- tor at their own workshop or by Ebusco. Public transportation is considered a major source of pollution and emissions. With 75% of Europe’s citizens living in cities, urban mobility is responsible for 23% of the EU’s greenhouse gas emissions from transport 1 . Public bus transit has been a focus for most govern- ments as this is an area where change is easier to im- plement when compared to rail or subways. Policy and regulatory initiatives, as well as ESG investments, cre- ate a favourable environment for zero-emission buses. To comply with the Paris Agreement in limiting global warming and reducing greenhouse gas emissions, the EU adopted a 2030 climate and energy framework. The framework sets an emission reduction target of 30% be- tween 2021 and 2030 for heavy-duty vehicles. Further, in its Clean Vehicle Directive, the EU has set a target for at least 45% of newly registered city bus- es to be equipped with alternative powertrains by the end of 2025 and 50% – 65% by 2030, depending on the country. According to the proposed revised EU CO2 emission standards for heavy-duty vehicles that was released in February 2023, heavy-duty vehicles, such as trucks, city buses and long-distance buses, are re- sponsible for more than 25% of GHG emissions from road transport in the EU and account for over 6% of to- tal EU GHG emissions. New proposed targets require that emissions be cut by 45% in 2030, 65% in 2035, and 90% in 2040, demanding high shares of zero-emission vehicles. It also extends the scope of vehicles regulated from 60% to 90% of Eu- rope’s heavy-duty sales and introduces a phase-out for combustion bus sales by 2030. New city buses in the EU will all have to be zero emis- sions(100% share of zero-emission vehicles) as of 2030. Several cities are planning to go to fully zero-emission public transport well before 2030 and some EU coun- tries have already set an earlier target at national level. A group of European civil society organisations and cit- ies, including Rotterdam, have also called on the Euro- pean Commission to set a deadline of 2027 to end the sale of carbon-emitting buses. By that time, they want only zero-emission buses to be sold on the continent. The Paris Agreement is driving public policy initiatives for all signatory governments, which means that all will put measures in place to switch from internal combus- tion engines to zero-emission buses over time. For example, in the Netherlands, under the Voluntary Agreement on Zero Emission Bus Transport, all new bus- es must use 100% renewable energy or fuel from 2025 onwards. All buses must be fully emission-free from 2030. To drive the transition, EU governments have made in- centives and funding available. 1 https://www.transportenvironment.org/discover/europes-cities-falling-short-on-clean-transport-new-ranking-shows/ ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 47 THE TRANSPORT TRANSITION PROBLEMS THAT EBUSCO SOLVED Although diesel buses have been, and still are, one of the biggest polluters of inner cities, public transport authorities and operators want electric buses to be comparable with diesel counterparts on key indicators (see below) as a minimum requirement. Our challenge was for Ebusco buses to outperform conventional buses, keeping in mind that electri ca- tion should not affect existing operations such as route alignment or timetables. We solved the following: • Range and range anxiety • Number of passengers • Total cost of ownership • Time to recharge • Outside temperature impact on performance In addition, we are also working on the number of raw materials we use and how to reduce those. Governments worldwide realise that public transport is much easier, cost-effective and quicker to electri- fy than individual cars and other modes of transport. Whereas there is still much work to be done on cre- ating a functional infrastructure for cars, buses have the advantage of set routes and depots that seldom change. Ebusco offers an ef cient, safe and sustainable solution for a zero-emission future. EBUSCO’S DIRECT IMPACT ON THE ENVIRONMENT We strive continuously to minimise the impact of Ebusco’s activities on the environment through the responsible use of raw and ancillary materials and by reducing waste, water discharge and emissions. We challenge ourselves and our suppliers in this regard. We started designing and manufacturing buses in Deurne in 2019, which allowed us to avoid the burden of legacy assets and processes. This means that we have been able to set up our processes for minimum energyand water use. Our internal assembly processes do not use water. Our annual water use of 2,283 m3 at the Deurne facil- ity is procured from the municipal water supplier and relates to regular water use by employees, including sewage. Our energy use is equally low, which means that Ebusco would, for example, be able to continue with an estimated 75% of manufacturing in the case of a blackout. We use electricity from the grid at our plant in Deurne, part of which is compensated through green certi cates from our landlord. In the event of an environmental incident, our employ- ees know they must immediately report it to both their manager and the customer service department and take appropriate measures to avoid a dangerous situa- tion. In such situations, employees must always follow the instructions of the in-house or external emergen- cy response of cer. Employees complete compulsory safety trainings before starting their jobs and have ac- cess to a health and safety manual as further guidance. Should anybody (employee, contractor or supplier) become aware of or reasonably suspect a violation of environmental legislation, or an action designed to conceal such a violation, we have procedures in place under which the person can report violations anonymously if necessary. In the event of such claims being made, we have external advisors to judge and assist in proper handling. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION PEOPLE IN MOTION Our employees’ knowledge and skills are applied in developing, producing and bringing the mobility solutions of the future to market. Ebusco continues to invest to remain a future-proof organisation that is respon- sive to its stakeholders. Our DNA features the kind of energy and commitment that drives impact. SDG 3: Ensure healthy lives and promote well-being for all at all ages SDG 7: Ensure access to af- fordable, reliable, sustainable and modern energy for all SDG 9: Build resilient infra- structure, promote inclusive and sustainable industriali- zation and foster innovation SDG 11: Make cities and human settlements inclusive, safe, resilient and sustainable • We provide specialist training for electric bus drivers on road safety, includ- ing safety features such as cameras replacing mirrors which, for example, improve visibility in bad weather, at night, and help avoid blind spots. Our low- weight buses, with batteries located in the oor, have a low point of gravity, which reduces braking distance and lowers impact during collisions. • Superior design and functional elements like reduced interior noise and fully at and low ooring ensure passenger convenience, disability access and optimal ow throughout the bus. • We work with customers to optimise their entire electric vehicle ecosystem. This includes adjacent industries where we offer, for example, energy solu- tions and heavy-duty batteries for use in ferries, barges and other shipping vehicles. • We recruited key personnel from leading technology companies to perfect our existing product offering and accelerate the development and commer- cialisation of new solutions. BY KEEPING PEOPLE IN MOTION, WE CONTRIBUTE TO 48 We believe in transparent communication and col- laboration and aspire to create “social safety on the work oor”. The health and safety of our employees and the users of our products are always top of mind, followed by a commitment to ensure customers remain satis ed. OUR EMPLOYEE DEMOGRAPHICS We have 607 full-time employees in 8 countries, of which 95.9% works in the Netherlands. Our work- force represents 31 nationalities. The Netherlands Other territories Male Female Male Female Full-time employees 331 72 13 1 Full-time contractors 166 13 8 3 Total 497 85 21 4 % of total 81.9% 14.0% 3.5% 0.6% As described in Ebusco’s Code of Conduct, diversity of Ebusco’s employees is a winning feature. Ebus- co is committed to offering equal opportunities in all aspects of employment and will not tolerate any discrimination on the basis of race, skin colour, reli- gion, gender, national origin or any other protected class. Ebusco does not allow any direct or indirect employment of children with reference to ILO Con- ventions 138 (the Minimum Age Convention) and 182 (the Worst Forms of Child Labour Convention). ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 49 Ebusco offers employees a safe and pleasant work- ing environment. Employees are expected to con- tribute to a working environment without any form of undesirable behaviour or attitudes such as sexual harassment, aggression and violence, discrimination, stalking, bullying, abuse of power, insults and slander. WE EMPLOY • Best-in-class leaders, engineers and product de- velopers • Entrepreneurs and innovators who develop propri- etary intellectual property • Fast decision-makers who work best in a at or- ganisation • New-generation thinkers who are not limited by manufacturing and engineering legacy burdens • Craftsmen and women who are proud of their work every single day WE CREATE VALUE FOR EMPLOYEES • We have an informal, non-hierarchical culture with the Management Board visible, accessible and en- gaging. • Ebusco strives to re ect the diversity of society in our workforce. • Ebusco is in touch with the Employee Insurance Agency and municipalities about contributing to the reintegration of people with WAO disability bene ts or WIA (partially un t for work) status. • Employees have solid career growth prospects: 59 employees have been promoted in 2022 (2021: 26 employees). • We invest in the growth and development of our employees through the Ebusco Academy and per- sonal coaching by the managers, including Man- agement Board members. • We invest in creating a healthy working environ- ment by providing fresh fruit daily, having plants and trees throughout the of ce and production hall as well as organising events to have fun together. Employees are able to work from home if it contrib- utes to their wellbeing. • We provide transparency of information on matters such as bene ts and remuneration. • We have a de ned contribution pension scheme for employees in the Netherlands. In accordance with our Diversity Policy, gender bal- ance is one of the key areas. With this table, we dis- close the balance between male and female of our own employees (excluding contractors), spread over age groups. Age Male Female Total 15 – 19 1.6% 0.2% 1.8% 20 – 29 22.1% 6.9% 29.0% 30 – 39 20.3% 6.9% 27.2% 40 – 49 15.6% 3.4% 19.0% 50 – 59 15.4% 0.9% 16.3% 60 – 69 5.6% 0.0% 5.6% 70+ 0.9% 0.2% 1.1% Total 81.5% 18.5% 100% ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION DIVERSITY AND INCLUSION We invited employees to participate in our rst diver- sity and inclusion survey this year. 204 employees completed the survey with the results showing that most employees feel included in the workplace. Awareness levels about diversity and inclusion were high, with managers at 84% showing higher aware- ness than employees at 64%. The survey contributed to increasing levels of awareness. There was overall strong agreement that employees liked working in a diverse workplace and saw the ben- e ts of working in a company with a lot of diversity. This was supported by the fact that less than 2% feel left out. Employees con rmed that the treatment they get from managers and colleagues is seen as fair and makes them feel involved, resulting in a strong team experience. Results con rmed that colleagues take differences between team members into account and respect these differences. The onboarding of new employees also re ects a positive outcome: employees rate the speed at which they feel at home at Ebusco as 7.46 on a scale of 1 to 10, where 10 is quickly. Areas of improvement include addressing the fact that some people feel that they are not always heard in their team and do not feel that their manager and company policies always support inclusiveness. “ In the past, we have done quick employee surveys on topics such as communi- cation or onboarding. Next year we want to do something bigger, but we want to prepare and do this well. If you do a survey and you are not ready to respond with real changes, it can achieve the opposite of what you wanted. ” Judith Beurskens, Group HR Director DIVERSITY POLICY Ebusco’s Diversity Policy con rms that we value and promote diversity and recognises that differences in skills, experience, background, nationality, age, race, gender, sexual orientation, religious beliefs, physical ability and other characteristics of people are important. Diversity enables us to look at issues and solve problems differently, respond differently to challenges, and take more robust decisions. We know that diversity drives innovation and accelerates growth, enabling Ebusco to attract and maintain the best talent. 50 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION INSTRUCTIONS 51 HEALTH AND SAFETY We want to enable employees to work without risk to their health and safety while designing products according to the highest standard of customer safety. Our approach to health and safety is set out in the Ebusco Code of Conduct. All employees are jointly responsible for health, safety and the environment at the sites where they normally perform their work activities. This means being aware of their conduct and how it might impact other team members. As such, employees receive formal training and know they should suspend work in unsafe situations and report this to their managers – set out in the health and safety manual and the internal reporting process. With the start of the inhouse assembly of the Ebusco 3.0 more activities take place on our own facilities. Over the year 2022, we regrettably have seen a few of safety related incidents which had a profound impact on our employees and the organization as a whole. We have taken several steps to enhance safety aware- ness with the aim of creating a safe work place for all employees. In our operations, safety risks relate mainly to using high-voltage electricity, chemicals such as epoxy resin, working at heights and hot surfaces. Employ- ees must take special care in moving machinery and heavy parts. Because we work with composites, em- ployees are also exposed to carbon bre dust. The use of personal protective equipment (PPE) is there- fore required at certain work sites or zones to min- imise risk and is indicated in working instructions. The following internal arrangements support health and safety instructions: Employees have access to voluntary consulta- tions aimed at preventing health problems A full risk inventory and evaluation is done at least every four years or more frequently when extensive production changes are imple- mented Employees undergo preventative medical examinations carried out by the relevant health and safety authority An emergency response team consists of trained employees that are able to implement Ebusco’s emergency roadmap “ We use customer feedback to expand our quality inspection checklist. They often bring their own experts when investigating our buses, so we are also able to learn more about what is important to them. ” Geoffrey Heger, Health and Safety Of cer ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 52 SUSTAINABLE GOVERNANCE Ebusco complies with the Dutch Corporate Governance Code and is committed to ethical, sustainable business practices. Governance oversight of sustainabil- ity is fully integrated into governance structures, processes and practices. Sustainability is a standing topic on the agenda at the quarterly Supervisory Board meetings. The Board receives reports that include sustainability topics that enable them to provide the necessary oversight to ensure Ebusco’s long term sustainability. Sustainability is a standing topic at the biweekly Manage- ment Board meetings. Members of the Management Board manage sustainability aspects on a day-to-day basis and are supported by the Investor Relations and Sustainability Manager, who formally reports to the Chief Financial Of- cer (CFO). However, depending on the project discussed, there are direct lines to the chief executive of cer (CEO), CFO and chief operations of cer (COO). The Safety Board meets monthly and reports on occupation as well as technical product safetyto the Management Board. This is a material sustainability topic for Ebusco. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 53 Members of both the Supervisory and Management boards have to act in Ebusco’s interest, which extends to the interest of all stakeholders. No director may par- ticipate in deliberations or decision-making if they have a direct or indirect personal interest con icting with the interests of Ebusco. With respect to the Supervisory Board, the Act on a more balanced ratio of men and women on management and supervisory boards” (Wet evenwichtige verhouding man/ vrouw in het bestuur en de raad van commissar- issen), stipulates that any vacancy should be lled by a member of the sex not already equally represented. In the case of Ebusco that means that the rst new mem- ber of the Supervisory Board has to be female. With respect to the Management Board, it is noted that the present composition is not yet balanced in terms of men/women. Ebusco strives to improve the gender balance in the Management Board. The Nomination Committee shall take this into consideration when pro- posing a candidate member of the Management Board. The composition of all managers in Ebusco is reason- ably diverse. Supervisory Board Management Board The Supervisory Board supervises the Management Board and focuses on the effectiveness of Ebusco’s internal risk management and control systems and the integrity and quality of Ebusco’s nan- cial reporting. The Supervisory Board is responsible for the composition of the Management Board and determines the rules for the appointment of the CEO, CFO and COO. The Management Board's responsibilities include developing a view on long-term value creation, developing the strategy accordingly and managing the associated risks. The CEO is the chair of Management Board meetings. The Management Board appoints a Safety Board from among its members. The Safety Board receives safety incident reports, iden- ti es safety issues and remediates those issues. The Chief Techno- logy Of cer (CTO) is the chair of the Safety Board. MANAGING OUR SUSTAINABILITY RISKS Our approach to risk management is about fi nding the right balance between maximising business opportunities while effectively managing potential sus- tainability risks. In a highly dynamic operating context, we aim to be fl exible, responsible and keep our stakeholders' interests in mind. We have a Sustainability Manager who is the key coordi- nator and support resource for all sustainability matters. Teams within Ebusco use the Sustainability Manager to align, test and comply with sustainability-related regu- lations. 30% of the short-term incentives for the Management Board is linked to personal or non-fi nancial strategic objectives. The Management Board is responsible for the or- ganisation, implementation and functioning of the internal risk management and control systems. Sustainability risks are integrated into the process of identifying, categorising and mitigating risk. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 54 Ebusco’s sustainability risks and opportunities Read more Supply chain disruptions, supply shortages and rising raw material prices Page 69 Environmental, Social and Governance Page 69 Geopolitical environment Page 69 Competitive environment Page 69 IT & Security Page 70 Safety & Incidents Page 70 Expansion of production capacity Page 70 Staff Page 70 Ebusco aims to be a thought and product leader and has a reputation that we need to build and protect. As we develop a sustainable sourcing strategy fo- cused on local markets, we plan to further integrate social and environmental criteria in the supplier engagement process. We are a maturing organisation that wants to main- tain its innovative and entrepreneurial character. This implies that we have to balance the development and implementation of, for example, new organisational structures, new policies and KPI setting against re- maining agile and reducing the time to market. “ One of the challenges of growing so fast is that it becomes more diffi cult to control things. In the past, all our relationships were personal; now we have to set up a system and deal with more risk .” Paul van Beers, Chief Financial Of cer BUSINESS ETHICS We want to develop a governance and risk management structure to ensure that employees, contractors and suppliers comply with all laws and regulations in terms of corruption, bribery, human rights, tax and anti-competition. Ebusco's Code of Conduct sets out our intent to achieve competitive advantage through superior per- formance and never through unethical or unlawful business practices. Ebusco’s policy is to comply with all applicable legislation and regulations in terms of competition and monopolies. No Ebusco employee or service provider is allowed to offer, promise, give, provide or demand bribes or other inappropriate bene ts, directly or indirectly, to win or retain business. This includes giving civil servants or supplier employees an inappropriate monetary or oth- er advantage. Ebusco requires directors, Supervisory Board mem- bers, members of the management team and all other employees to con rm in writing that they have read and taken due note of the Code of Conduct, under- stand it and will comply with it. Non-compliance may lead to disciplinary measures being imposed by the Supervisory Board. Our suppliers’ general terms and conditions include an ethical code of conduct section. Suppliers are required to use the highest ethical business standards when conducting business. CODE OF CONDUCT The Ebusco Code of Conduct guides employees, managers and directors in Ebusco, all wholly owned Ebus- co businesses and all joint ventures under Ebusco’s control, on working in accordance with its core values and general business principles. It is a guideline to ensure integrity in Ebusco’s dealings and decisions. It gives direction on how to interact, serve customers and relate to signi cant stakeholders. The rules of conduct cover legislation, fair competition, accounting and nancial control, discrimination and bullying, health and safety, quality assurance, environment, use of company assets and politics. It also sets out enforcement steps. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 55 HOW TO SPEAK UP If an employee, client or supplier discovers an event or behaviour that is in con ict with our Code of Con- duct or any legal requirements, they have several options to report this. We encourage them to raise con- cerns. Internally, this can be done via their line manager, colleagues they trust or the company secretary. Employees can also use a special reporting website, www.ebusco.com/speak-up/, where they can log a report anonymously. The website also provides details for internal and external con dential advisers. The whistleblowing facility and speak up policy were launched this year and communicated via a video from the CEO. No whistleblowing reports were received this year. Should Ebusco receive a report, the company secretary will establish a team to investigate, depending on the nature of the report. External assistance can be sourced if needed. The Supervisory Board has to be informed of any whistleblowing reports. RELATED PARTY TRANSACTION POLICY Ebusco’s related party transaction policy implements best practices regarding transactions between Ebusco and certain stakeholders by setting out a procedure for noti cation, approval and disclosure. The insider trading policy guides employees in terms of the ownership of, and transactions in, Ebusco shares. It also requires Ebusco to keep a list of persons who, on a regular or incidental basis, may have insider information. The policy promotes compliance with the relevant obligations and restrictions under the applicable securities law and limits reputational risk that can harm Ebusco’s business integrity. INSIDER TRADING POLICY TAX POLICY The Ebusco tax policy serves as a guideline for the conduct, responsibilities and transparent interaction with external parties such as tax and customs authorities and external tax consultants. We consider tax as a contribution to the community in which we operate and are aware that the success of our business is dependent on public infrastructure, access to skilled labour and public administration. At Ebusco, tax follows the business instead of the other way around. SPEAK UP POLICY The speak up policy explains when, how and where stakeholders can raise concerns about a suspected violation of law, company policies or any unethical behaviour in con dence, with respect for their privacy and without fear of retaliation. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 56 REGULATORY COMPLIANCE We want to ensure full compliance with regulations applicable geography-wide and sector-wide. According to the EU Commission’s directorate on mobility and transport, the main objectives of Euro- pean public transport policy are to provide safe, ef - cient and high-quality passenger transport services through regulated competition. It considers social, environmental and regional development factors to guarantee transparency and performance. Ebusco’s zero-emission buses are fully aligned with the EU objectives. In addition to this, compliance with the law, both the letter and the spirit, is a basic principle for everyone who represents Ebusco. We require all employees to respect and comply with the national and international laws, regulations, and instructions of cities, states and countries where Ebusco is active. We established an international network to assist Ebusco with compliance as we implement our in- ternationalisation strategy. Once we identify a new market, we do extensive research to determine com- pliance requirements across a broad spectrum from design to environmental issues. Our compliance uni- verse is therefore becoming increasingly complex and onerous. As we plan our rst expansion out of the Nether- lands, we also invested time and effort to identify and comply with regulatory and other risks in rela- tion to France. COMPLIANCE IN OUR VALUE CHAIN According to Ebusco’s general terms and conditions, suppliers must operate in full compliance with ap- plicable legislation and generally accepted interna- tional norms and regulations. This includes goods supplied in accordance with procedures that comply with the requirements of ISO 9001 and ISO 14001. All products have to be supplied in accordance with all rules and regulations regarding safety, environmen- tal and working conditions, such as REACH, RoHS and Con ict Minerals regulations. As the supply chain of the Ebusco 3.0 matures and COVID-19 related travel restrictions have been lifted, a formal supplier audit plan, including site visits, has been drawn up. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 57 THE EU TAXONOMY REGULATION To evaluate Ebusco’s eligible activities, the complete list of activities listed in the EU taxonomy Delegated Act related to climate change mitigation (CCM) and The EU Taxonomy is set up to provide all stakeholders appropriate defi nitions for which economic activities can be considered environmentally sustainable. In this way, it should create security for investors, protect private investors from greenwashing, help companies to become more climate-friendly, mitigate mar- ket fragmentation and help shift investments where they are most needed. and operating expenses (opex) including certain qualitative information. Ebusco does not meet the criteria of Directive 2014/95/EU on the disclosure of non- nancial infor- mation during this reporting year 2022 as the compa- ny had less than 500 employees on average during 2022. However, given the expectation that the com- pany will be in scope in 2023 Ebusco initiated a work- stream on EU Taxonomy focused on assessing the el- igibility of its activities and the analysis on alignment. For an economic activity to be classed as ‘environ- mentally friendly’ under the EU Taxonomy, it must rst be determined whether it is ‘Taxonomy-eligible’ and then whether it is ‘Taxonomy-aligned’. Only ac- tivities that are described in the delegated act are ‘Taxonomy-eligible’. Next, the second step is to con- duct an analysis to establish whether or not an ac- tivity is aligned. This alignment determines whether or not the eligible activities are in fact sustainable. The Taxonomy Regulation establishes six environ- mental objectives and the EU has adopted the rst two delegated acts on climate change mitigation and adaptation. 1. Climate change mitigation (CCM) 2. Climate change adaptation (CCA) 3. The sustainable use and protection of water and marine resources 4. The transition to a circular economy 5. Pollution prevention and control 6. The protection and restoration of biodiversity and ecosystems Under the requirements of the EU Taxonomy, com- panies currently in scope of Directive 2014/95/EU on the disclosure of non- nancial information, need to disclose for reporting period 2022 the proportion of Taxonomy-aligned and non-Taxonomy aligned economic activities in their total Turnover (hereafter referred to as revenue), capital expenditures (capex) climate change adaption (CCA) have been assessed and compared to Ebusco’s core activities: Activity Description Ebusco KPI 3.3 Manufacture of low-carbon technologies for transport Manufacture, repair, maintenance, retro tting, repurposing and upgrade of low carbon transport vehicles, rolling stock and vessels. Ebusco develops and produces fully electric city and regional buses (PRODCOM code 29.10.30) and contracts for ancil- lary services and goods, which support the customer’s use of zero-emission buses (aftersales) Revenue Opex Capex 3.6 Manufacture of other low carbon technologies Manufacture of technologies aimed at substantial GHG emission reductions in other sectors of the economy, where those technologies are not covered in Sections 3.1 to 3.5 of this Annex. Ebusco offers the installation of the charging stations for clients which are manufactured to allow the operation of their zero-emis- sion buses. Furthermore, Ebusco’s Energy Storage Systems (ESS) for both land and marine useand charging products. RevenueOpex Capex 6.5 Transport by motorbikes, passenger cars and light commer- cial vehicles Purchase, nancing, renting, leasing and operation of vehicles designated as category M1, N1, both falling under the scope of Regulation (EC) No 715/2007 of the European Parliament and of the Council234, or L (2- and 3-wheel vehicles and quadricycles). Ebusco's company cars, owned or leased under IFRS 16 correspond with this category 6.5 Opex Capex 7.7 Acquisition and ownership of buildings Buying real estate and exercising ownership of that real estate. Ebusco's buildings, owned or leased under IFRS 16correspond with this category 7.7 Opex Capex ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION Ebusco considered the 3.3 related elements like the bus chargers to be 3.6. and the Energy Storage System as 3.6. as well as no clear description is available in sec- tions 3.1-3.5. We have considered the capex and opex directly related to our Taxonomy-eligible economic ac- tivities as well as the capex and opex as mentioned in category c of section 1.1.2.2 and 1.1.3.2 resp related to purchases of output from Taxonomy-eligible activities. The EU Taxonomy reporting is based on the nancial gures if 2022. The Taxonomy-eligible KPIs have been calculated as: • Taxonomy-eligible revenue KPI = eligible revenue / total revenue • Taxonomy-eligible capex KPI = eligible capex / total capex • Taxonomy-eligible opex KPI = eligible opex / total opex The denominator for the eligibility KPIs has been de- ned as • Total revenue as stated in Note 6 Revenue, cost of materials and segment reporting of the Annual Re- port. • Total capex (additions) as stated in Note 12 Property, plant and equipment, Note 13 Intangible assets and note 22 Leases of the Annual Report. • Total opex related to R&D, building renovation mea- sures, short term lease, repair and maintenance and other direct expenditures relating to the day- to-day servicing of assets of property, plant and equipment. Ebusco allocated the revenue, capital expenditures and operational expenditures to the Taxonomy-eligi- ble activities (the nominator of the Taxonomy-eligibili- ty KPIs). This allocation is based on the general ledger description of the nancial system, which also forms the basis for Ebusco’s external nancial reporting. The below table re ects the percentage of ourrevenue, capital expenditure and operational expenditures re- lated to these eligible activities: 58 (€ thousands) Revenue Capex Opex Scope of activity 111,617 10,504 7,641 of which: Eligible 100.0% 80.9% 100.0% Non Eligible 0.0% 19.1% 0.0% Total 100.0% 100.0% 100.0% The detailed outcome of the EU Taxonomy assessment 2022 is re ected in the EU Taxonomy tables on pages 60-62. In 2022, we have focused on our EU Taxono- my-eligibility assessment, and we have not yet formal- ized all our EU Taxonomy-alignment processes such as the minimum safeguards. In addition, the current “sub- stantial contribution” condition for Activity 3.6 requires that the contribution to GHG emission reductions be measured using a life-cycle GHG emission savings calculation that demonstrates the savings compared to the best-performing alternative technology, product or solution available on the market. At this stage it is unclear how to de ne the best-performing alternative on the market, for Ebusco’s energy storage system and electrical vehicle chargers. More clari cation of the technical screening criteria of 3.6 and examples is preferably needed to assess the substantial contri- bution for these speci c products. Furthermore, during 2022, we have focused on our EU Taxonomy-eligibility assessment, and we have not yet formalized all our EU Taxonomy-alignment processes such as the minimum safeguards. Therefore, we concluded that we are not yet EU Taxonomy-aligned per 2022. Ebusco will continue to assess its eligibility and the extent of EU Taxonomy alignment in 2023. The EU Tax- onomy regulation is maturing and evolving, as such reporting against the taxonomy is currently subject to interpretation. We will change and expand our report- ing according to the developments in the regulation. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 59 “ Every day I work with an amazing proto-team on innovations for the future. Theo Lead Proto Mechanic 59 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 60 Substantial contribution criteria DNSH criteria (Does Not Signi cantly Harm) Economic activites (1) Code(s) (2) Absolute turover (3) Proportion of turnover (4) Climate change mitigation (5) Climate change adaption (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaption (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion of turnover, year N (18) Taxonomy aligned proportion of turnover, year N-1 (19) Category (enabling activity or) (20) Category (transitional activity) (21) Euro % % % % % % % Y/N Y/N YN/ Y/N Y/N Y/N Y/N Percent Percent E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmental sustainable activities (Taxonomy-aligned) No taxonomy-aligned activities yet Turnover of environmental sustainable activities (Taxonomy-aligned (A.1) 0 0.0% A.2 Taxonomy-Eligible but not environmental sustai- nable activities (not Taxonomy-aligned activities) Manufacture of low-carbon technologies for transport 3.3 110,485 99.0% N Manufacture of other low carbon technologies 3.6 1,132 1.0% N Turnover of Taxonomy-eligible but not environmentally sustainable activities (not Taxo- nomy-aligned activities) (A.2) 111,617 100.0% Total (A.1 + A.2) 111,617 100.0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES Turnover of Taxonomy-non-eligible activities (B) 0 0.0% Total (A + B) 111,617 100.0% EU TAXONOMY REVENUE 60 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 61 Substantial contribution criteria DNSH criteria (Does Not Signi cantly Harm) Economic activites (1) Code(s) (2) Absolute CapEx (3) Proportion of CapEx (4) Climate change mitigation (5) Climate change adaption (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaption (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion of CapEx, year N (18) Taxonomy aligned proportion of Capex, year N-1 (19) Category (enabling activity or) (20) Category (transitional activity) (21) Euro % % % % % % % Y/N Y/N YN/ Y/N Y/N Y/N Y/N Percent Percent E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmental sustainable activities (Taxonomy-aligned) No taxonomy-aligned activities yet CapEx of environmental sustainable activities (Taxonomy-aligned (A.1) 0 0.0% A.2 Taxonomy-Eligible but not environmental sustai- nable activities (not Taxonomy-aligned activities) Manufacture of low-carbon technologies for transport 3.3 5,480 52.2% N Manufacture of other low carbon technologies 3.6 1,715 16.3% N Transport by motorbikes, passenger cars and light commercial vehicles 6.5 738 7.0% N Acquisition and ownership of buildings 7.7 566 5.4% N CapEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 8,499 80.9% Total (A.1 + A.2) 8,499 80.9% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES CapEx of Taxonomy-non-eligible activities (B) 2,005 19.1% Total (A + B) 10,504 100.0% EU TAXONOMY CAPEX 61 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 62 Substantial contribution criteria DNSH criteria (Does Not Signi cantly Harm) Economic activites (1) Code(s) (2) Absolute OpEx (3) Proportion of OpEx (4) Climate change mitigation (5) Climate change adaption (6) Water and marine resources (7) Circular economy (8) Pollution (9) Biodiversity and ecosystems (10) Climate change mitigation (11) Climate change adaption (12) Water and marine resources (13) Circular economy (14) Pollution (15) Biodiversity and ecosystems (16) Minimum safeguards (17) Taxonomy aligned proportion of OpEx, year N (18) Taxonomy aligned proportion of OpEx, year N-1 (19) Category (enabling activity or) (20) Category (transitional activity) (21) Euro % % % % % % % Y/N Y/N YN/ Y/N Y/N Y/N Y/N Percent Percent E T A. TAXONOMY-ELIGIBLE ACTIVITIES A.1 Environmental sustainable activities (Taxonomy-aligned) No taxonomy-aligned activities yet OpEx of environmental sustainable activities (Taxonomy-aligned (A.1) 0 0.0% A.2 Taxonomy-Eligible but not environmental sustai- nable activities (not Taxonomy-aligned activities) Manufacture of low-carbon technologies for transport 3.3 2,448 32.0% N Acquisition and ownership of buildings 7.7 5,193 68.0% N OpEx of Taxonomy-eligible but not environmentally sustainable activities (not Taxonomy-aligned activities) (A.2) 7,641 100.0% Total (A.1 + A.2) 7,641 100.0% B. TAXONOMY-NON-ELIGIBLE ACTIVITIES OpEx of Taxonomy-non-eligible activities (B) 0 0.0% Total (A + B) 7,641 100.0% EU TAXONOMY OPEX 62 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 63 63 RISK MANAGEMENT GOVERNANCE In conducting our business, we face many risks that may interfere with our busi- ness objectives. It is important to understand the nature, likelihood and potential impact of these risks. The company sees adequate risk management as an integral element of good business practice. The Management Board is responsible for the organization, implementation and functioning of the internal risk management and control systems that are geared to Ebusco’s business activities. The Manage- ment Board is aware that risk management and control systems cannot provide an absolute guarantee with respect to achieving the business objectives and prevent- ing signifi cant errors, losses, fraud or the violation of laws or regulations. The scope of the Supervisory Board’s supervision includes the design and operation of the internal risk management and control systems as well as the monitoring of the effectiveness of the internal control system. The Audit Committee supports the Supervisory Board in the performance of this super- vision. The Management Board and the Supervisory Board consider effective risk management to be a critical success factor achieving the company’s mid- and long-term objectives. There can be no absolute assurance that our risk management will avoid or mitigate all risks that Ebusco faces. The material risks are described in Risk Overview. RISK PROFILE Ebusco’s approach to risk management is aimed at nding the right balance between maximizing the business opportunities while at the same time man- aging the risks involved. The most important risks have been identi ed and clustered into four catego- ries: strategic risks, operational risks, nancial and reporting risks and compliance risks. RISK MANAGEMENT AND INTERNAL CONTROL ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION The company is prepared to accept risks associated with doing business in the continuously changing mar- ket environment in a responsible and well-considered way, as well as in line with the interests of its internal and external stakeholders. It is the duty of the Management Board to weigh the busi- ness opportunities against the expectations and inter- ests of employees, shareholders, nancial institutions, supervisors and other strategic stakeholders. Decisions regarding changes or ne-tuning of our business mod- els are taken by the Management Board in accordance with the risk appetite of the company. Considering stra- tegic risks, a balance is explicitly sought between ac- ceptable risk on the one hand and the entrepreneurship conducted in the context of long-term value creation on the other hand. Operational risks must be controlled as good as possible, and the company will review the effec- tiveness and ef ciency of its operational processes for this purpose. Next to this, nancial and reporting risks need to be controlled as well to avoid errors in our nan- cial reporting. The risk appetite in terms of compliance is ‘to avoid’, meaning that all laws and regulations must be adhered to. RISK MANAGEMENT SYSTEM Ebusco’s risk management policies are being developed to identify and analyse the risks faced by the company, to set appropriate risk limits and controls, to monitor risks and adherence to limits and to assess the effectiveness of the internal controls. Risk management policies and systems are reviewed to re ect changes in market con- ditions and our activities. The internal control processes support management to identify and address risks in a timely and consistent way. Our risk management ob- jective is that the risks we face are properly evaluated and mitigated, and that management is provided with the information necessary to make informed decisions in a timely manner. Ebusco’s risk management system consists of quality controls, management information systems, policies and an internal control framework. QUALITY CONTROLS The company has adopted an integrated, end-to-end approach to quality control, meaning that the company performs multiple quality inspections during both the production and the pre-delivery inspection (PDI) phase, and the company continuously provides feedback of the outcome of quality checks to its development and engineering teams to increase quality in the design and production process. The company has strategies and a dedicated team using the FRACAS system to identify and correct any defects at each stage of the design, supplier development, production, and eld perfor- mance of Ebusco’s zero emission buses. MANAGEMENT INFORMATION SYSTEMS The heart of our internal risk management and control system on our periodic performance is formed by our reporting cycle and management information systems. Our mid-term plan and objectives form the basis on which our yearly budget is made. This annual budget is a bottom-up approach and the result of a diligent process. POLICIES Ebusco has a Code of Conduct that has been determined 64 by the Management Board and approved by the Super- visory Board. The Code of Conduct applies to all Ebus- co employees, including temporary employees, and is published on the corporate website. In addition, Ebusco has a Speak Up policy that has been published on the corporate website and ensures that possible violations of existing policy and procedures can be reported with- out any negative consequences for the person reporting the violation. This policy explains when, how and where employees can raise concerns about a suspected viola- tion of law, company policies or any unethical behavior in con dence, with respect for privacy and without fear of retaliation. Our diversity policy, which has been published on our corporate website, encourages and promotes diversity in the Supervisory Board, Management Board and also in the company as a whole. EBUSCO’S INTERNAL CONTROL FRAMEWORK The Ebusco Internal Control Framework (ICF) sets the standard for Internal Control over Financial Reporting at Ebusco. The key objective of the ICF is to maintain in- tegrated management control of Ebusco’s operations to ensure the integrity of the nancial reporting, as well as compliance with laws and regulations. The company started implementing the ICF in the course of 2022. Both key processes and process ows have been determined. The processes are based on the de ned key risks. For each risk controls, including mini- mum requirements, have been determined. Finally, pro- cess narratives have been documented. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 65 “What I love most about my job? Ensuring that everything fi ts perfectly together to deliver a smile to the customer’s face. Melvin Production Mechanic 65 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 66 INTERNAL AUDIT The company has appointed an internal auditor as speci ed in best practice provision 1.3.1 of the Dutch Corporate Governance Code. The company appointed an audit rm for ful lling the internal audit function. The objective for 2023 is to fully implement the ICF and monitor the key controls periodically, as agreed upon with the Management Board and Supervisory Board. FOCUS IN 2023 AND BEYOND In order to bring the organisation to the next level of sound risk management and internal control, Ebusco will, together with external advisors, implement the ICF and assess the effectiveness of the ICF, by means of periodical review of controls documentation. RISK APPETITE Our risk appetite depends on the nature of the risk, the likelihood and the potential impact on our busi- ness. Ebusco’s risk appetite, the level of risk Ebusco is willing to accept to achieve its objectives, may vary based on speci c risks and is divided into ve levels: very low, low, medium, high and very high. Our ap- proach is geared toward mitigating the risks to the levels de ned in our risk appetite. Ebusco’s risk ap- petite is visualized in the table below. The risk cate- gories are not classi ed in order of importance. RISK OVERVIEW – OUR KEY RISKS The table on the next page is a summary of key risks that, alone or in combination with other events or cir- cumstances, could have a material adverse effect on the company’s business, nancial condition, results of operations or prospects. Although management be- lieves that the risks and uncertainties described below are the most material risks, they are not the only ones Ebusco may face. All of these risk factors and events Throughout 2022, a portion of the key controls have been implemented (and documented periodically). The remainder of the key controls is scheduled to be imple- mented in the course of 2023. are contingencies which may or may not occur. The company may face a number of these risks described below simultaneously and some risks described below may be interdependent. In making the selection, the company has considered circumstances such as the probability of the risk materialising on the basis of the current state of affairs, the potential impact which the materialisation of the risk could have on the company’s business, nancial condition, results of operations or prospects, and the attention that management would, on the basis of current expectations, have to devote to these risks if they were to materialize. The detailed overview of risks, which can be found on pages 69-73, provides a more in-depth analysis of the risks, the internal controls and the opportunities these risks could offer to Ebusco. The opportunities are relevant to strategic and operational risks only. We consider the nancial and reporting and compliance risks not as special, and as such, for these risks no opportunities have been de ned. RISK APPETITE VERY LOW LOW MEDIUM HIGH VERY HIGH Behaviour towards risk Averse Prudent Balanced Considerable Seeking Strategic Operational Financial & reporting Compliance ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 67 67 increased equal avoiding low medium RISK AREA RISK RISK DESCRIPTION RISK TREND RISK APPETITE Strategic Supply chain disruptions Supply chain disruptions or shortages and other events that may affect the Group's supply chain may materially adversely affect the Group's business and pro tability. ESG ESG and its perfromance are important to the company. Any failure to meet objectives could impact the reputation of the company and its long-term growth and pro tability. Geopolitical environment In uence of global economic and geopolitical developments on the execution of the strategy and nancial position and results of Ebusco. Competitive environment The Group faces strong competition in the transit bus market from both new and established competitors alike. If it were not able to compete successfully against them, the Group's revenue growth and market share could be materially adversely affected. Operational IT & Security Risk of breach of data availability. Safety & Incidents An accident or safety incident involving one of the Group's zero emission buses could expose the Group to signi cant liability and a public perception that its zero emission buses are unsafe or unreliable. Expansion of production capacity A slower expansion of production capacity could result in not meeting customer demand, and as a consequence, could impact the company's long-term growth and pro tability. Staff The Group's success depends on its ability to retain, attract and hire individuals for its Management Board and other highly skilled personnel. Financial and reporting Currencies Volatility of currencies which put pressure on pro t margins. In ation In iation could impact the company's long-term growth and pro tability. Reporting Risk that Ebusco's reporting contains material errors. Compliance Legal & regulatory Damage (including reputation) due to violation of legislation and regulations including export and sanctions regulations, unfair competition, fraud, corruption and bribery. Tax Damage (including reputation) due to violation of tax legislations and regulations. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 68 “Constantly coming up with new solutions keeps my job exciting, challenging and most of all diverse. Frans Production Mechanic 68 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 69 69 STRATEGIC RISKS increased equal avoiding low medium SUPPLY CHAIN DISRUPTIONS ESG GEOPOLITICAL ENVIRONMENT COMPETITIVE ENVIRONMENT Risk trend Risk trend Risk trend Risk trend Risk appetite Risk appetite Risk appetite Risk appetite Risk Risk Risk Risk Ebusco is exposed to the risk of supply disruptions and shortages, inclu- ding due to epidemics or pandemics of diseases, geopolitical factors, governmental changes, nancial distress experienced by suppliers, power outages, production dif culties of suppliers, natural or man-made disasters and restrictions, tariffs or other unforeseen circumstances. In the course of 2022, the supply chain has to a large extent recovered and parts availability and lead times are improving. However, on a small number of parts the supply chain has not fully returned to the pre COVID-19 state. This continued to impact our operations and let to longer production times, higher costs and inef ciencies. This year we treated ESG as a seperate risk, given its increasing importance to our overall strategic and operational objectives. We are committed to making Ebusco a truly sustainable entity and have the ambition to further integrate ESG governance, measurement and repor- ting into the Ebusco DNA. We believe that sound corporate governance is critical to helping us achieve our goals, including with respect to ESG. We continue to evolve a governance framework that exercises appropriate oversight of respon- sibilities at all levels throughout the company and manages its affairs consistent with high principles of business ethics. Ebusco's results of operations can be impacted by geopolitical changes and economic cycles globally and in its key markets. Unforeseen circum- stances resulting from the current con icts surrounding Ukraine, Russia, China and Taiwan, could possibly lead to sustained disruption of the global supply chain. The factors described above, or other factors which may impact conditions relevant to Ebusco’s business environment, are dif cult to predict and may have a material adverse impact on Ebusco’s business, nancial condition and operating results. They can also make it more dif cult to budget and make reliable nancial forecasts. Many of the company's current and potential competitors are traditional automobile and bus suppliers with strong brand recognition, loyal customer bases, longer operating histories with established track records of service and greater nancial, marketing and other resources than the company has and these competitors may be able to devote greater resources to the design, development, manufacturing, assembly, distribution, promotion, sale and support of their battery electric bus segment. Moreover, Ebusco's competitors that also produce diesel-hybrid and compressed natural gas vehicles may have an advantage with existing and prospective customers that are interested in exploring diesel alternatives without committing to zero emission vehicles or that wish to pursue a gradual zero emission or electri cation strategy with the same supplier. Internal controls Internal controls Internal controls Internal controls To withstand supply chain shocks, Ebusco continues to hold signi cant safety stock enabling continuation of production albeit at the expense of working capital ef ciency. Next to supporting current production schedule, the safety stock also allows the company to take in new orders for shipment in 2023 well into the next year. Ebusco continues to work on optimising its supply chain with a strong focus on identifying dual source suppliers to lower risks and using scale advantages to lower the cost of goods sold. In order to implement our ESG strategy, we have hired an ESG of cer responsible for embedding ESG in our strategy. In addition, we have de ned and implemented a sustainability governance structure. The governance oversight of sustainability is fully integrated into governance structures, processes and practices. We completed our rst double mate- riality assessment in 2022 as we formalise our strategic ESG journey. We have issued our rst sustainability report which relates to the nan- cial year from 1 January to 31 December 2022. This report re ects our commitment to being transparent and responsive to the information needs of our stakeholders while addressing the growing interest in the business's environmental, social and governance impacts. Ebusco monitors economic, political and general societal changes and, where necessary, develops response strategies to such events, inclu- ding pandemics (e.g. COVID-19). High-risk markets (i.e. exposed to high volatility) are regularly assessed for emerging risks. Ebusco is active in multiple countries and this will grow over the next years. Local presence allows us to quickly adjust to geopolitical uncertainties or changes by adapting our proposition to local market needs and activate them locally. In order to cope with the increasing competitive environment, Ebusco continuously focuses on product optimalisation (through Engineering and Research & Development). Furthermore, we not only explore new products and markets but these are being launched. Opportunities Opportunities Opportunities Opportunities Besides optimizing our safety stock, we have an agile Supply chain orga- nisation to cope with the current, global supply chain challenges. Our supply chain strategy contains a dual-source supplier base, to mitigate the risk of shortages. As a pioneer and frontrunner in the development of electric buses and charging systems, Ebusco has a competitive advantage. Ebusco wants to play a leading, innovative and guiding role in the energy transition in public transportation all around the world. Although most of our custo- mers are already using green energy, we provide them with solutions to further lower their footprint. The changing geopolitical environment is enforcing Ebusco to optimize its integrated supply chain organisation, supplier base and manufactu- ring footprint from a global perspective, and to enable agile responses to large and rapid shifts in demand and supply globally. On one hand, we see competition increasing due to international, national and local laws and regulations with respect to zero-emission policies. An example is the EU's ambition to be climate-neutral by 2050. These green initiatives also provide opportunities for Ebusco. In the Nordics, the human rights clauses have become effective, resulting in less competi- tion (e.g. Chinese manufacturers have to abandon this region). Further- more, we have entered the market for energy storage purposes which enhanced our competitive position. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 70 70 OPERATIONAL RISKS increased equal avoiding low medium IT & SECURITY SAFETY & INCIDENTS EXPANSION OF PRODUCTION CAPACITY STAFF Risk trend Risk trend Risk trend Risk trend Risk appetite Risk appetite Risk appetite Risk appetite Risk Risk Risk Risk Despite the measures that we have implemented, including those related to cybersecurity, our systems could be breached or damaged by computer viruses and systems attacks, natural or man-made incidents, disasters or unauthorized physical or electronic access. Cybersecurity threats are constantly evolving. We remain potentially vulnerable to additional known or yet unknown threats, as in some instances, we, our customers, and our suppliers may be unaware of an incident or its magnitude and effects. We also face the risk that we expose our customers to cybersecurity attacks through the systems we deliver to our custo- mers, including in the form of malware or other types of attacks as described above, which could harm our customers. Furthermore, the Covid-19 pandemic has increased the level of remote working within our organization, which incre- ases the risks of cybersecurity incidents. In our operations, safety risks relate mainly to using high-voltage electri- city, chemicals such as epoxy resin, working at heights and hot surfaces. Ensuring healthy lives and promote well-being of all of our employees is one of our sustainability priorities. The international expansion can increase our vulnerability in this domain. Increasingly speci c expertise and training capacity are required, in order to protect us against this. Ebusco plans to signi cantly increase manufacturing, production and assembly capacity in a short amount of time to meet Ebusco's expected international expansion plan and the production of its Ebusco 3.0 buses on time for the delivery dates to customers. The Group's ability to achieve its manufacturing and assembly plant expansion plans will depend upon many factors, including obtaining additional nancing to complete its international expansion strategy beyond 2023. Ebusco's international expansion strategy and production of its Ebusco 3.0 will also depend on its ability to execute its plans to assemble the Ebusco 3.0 at plants in various jurisdictions and deploy maintenance and other services for these vehicles. Ebusco's success depends, in part, on its continuing ability to identify, hire, attract, train, develop and retain other highly skilled personnel, such as composite engineers, electrical engineers, industrial engineers, auto- motive engineers, production employees, and tender and sales personnel. Since Ebusco is one of the early producers of zero emission buses within Europe, the company has a number of experienced employees who have worked on the development of Ebusco's technology for several years. Furthermore, as the demand for zero emission vehicles like Ebusco's electric buses continues to increase, the competition for experienced employees with skill sets needed for the company's business increases. Furthermore, the international expansion of production capacity requires additional staf ng. The success of this expansion depends on recruit- ment and availability of skilled staff. Internal controls Internal controls Internal controls Internal controls We invest signi cant time and resources in the security of our systems and data. We have established an internal control framework, where we frequently assess our internal controls, both internally and externally. In 2022, we made signi cant progress regarding our security roadmap. Our security roadmap is build on ve pillars Identify, Protect, Detect, Response and Recover. For each pillar we have identi ed several proj- ects, which are partly completed or in progress. Examples of completed projects are Vulnerability Scanning, Awareness programs, Phising campaigns and testing, Incident repsonse plan and Back-up and Busi- ness continuity plans. Our approach to health and safety is set out in the Ebusco Code of Conduct. All employees are jointly responsible for health, safety and the environment at the sites where they normally perform their work activi- ties. Employees receive formal training and know they should suspend work in unsafe situations and report this to their managers. In order to ensure suf cient capacity for the manufacturing of the 3.0 bus, the Deurne facility is scaling up to reach a capacity of 500 buses per annum. Next, we will open a manufacturing facility in Rouen, France in the rst half of 2024. This location is expected to be fully operational as of 2024, having a capacity of 500 buses per annum. There is a lot of interest in employers that enable the green transition candidates responded well to our invitation to visit Ebusco facilities and engage with us. We use a variety of tools in our recruitment process and, invest heavily in employer branding. We make it easy for people to apply, including reaching out via instant messaging platforms and social media. Innovation is driven by having an open mind and the ability to voice one’s thoughts, therefore diversity is a winning feature of the Ebusco teams. We offer equal opportunities in all aspects of employment, and we do not tolerate any discrimination based on race, skin colour, religion, gender, national origin or any other protected class. Opportunities Opportunities Opportunities Opportunities The need and availability of all kinds of data bear a signi cant responsi- bility, but on the other hand, provide us with a competitive advantage. The need for data enables us to make data-driven decisions and to optimize the engineering of our product portfolio. Health and safety is our rst priority enabling an attractive working environment. Not just by saying but by doing. Ensuring a healthy and safe working environment results in high retention rates and an effective recruitment and hiring process. During 2022, we continued to ramp up our manufacturing capacity at the Deurne location and remain on track with our ramp-up plans. As parts availability improved, we have taken additional leaps forward on the learning curve. In relation to the facility in France, the project is moving forward as planned. This team works together with a project team of the facility owner to enable Ebusco to move into the facility during the second quarter of 2023. Following the further refurbishment of the factory, installation of the manufacturing equipment, training and hiring of staff, the facility is expected to be operational in the rst half of 2024. Once fully operational the Rouen facility will have a manufacturing capacity of 500 buses per annum. Our growing, international organisation and enhanced product port- folio demands new skills and change of responsibilities. We have a an ever-improving mix of experienced cultural bearers and relatively new employees, who collectively balance the transformation well towards an organization that is ready to realize our international ambition, while retaining the Ebusco culture. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 71 “ Every day I enjoy working on the buses, as I can completely unleash my creativity on them Marc Lead Mechanic 71 ” ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 72 72 FINANCIAL & REPORTING increased equal avoiding low medium CURRENCIES INFLATION REPORTING Risk trend Risk trend Risk trend Risk appetite Risk appetite Risk appetite Risk Risk Risk Foreign exchange risk is the part of the market risk that arises due to exposure of the Group to foreign currencies. This exposure arises from the Group's involvement in foreign operations or trade in foreign currency (buy and sell). In ation risk is the part of the market risk that arises due to (unexpected) price increased of goods and services purchased by the Group. Ebusco is exposed to in ation for costs of goods and materials, transport and wages as a result of supply shortages which may impact our pro tabi- lity. Currently, supply chain constraints have resulted in higher-than-normal in ation. The con ict between Ukraine and Russia has signi cantly increased the risk on high in ation. Any unforeseen high in ation may have a material adverse impact on Ebusco’s business, nancial condition and operating results. Accurate reporting and disclosures provide internal and external stakeholders with signi cant information for a better understanding of Ebusco’s business. Failures in reporting and/or disclosure notes, could create market uncertainty regarding the reliability of the information (including nan- cial data) presented and could have a negative impact on the price of Ebusco shares. In addition, the reliability of revenue and expenditure data is key for steering the business and for managing top-line and bottom-line growth. The long lifecycle of bus sales, from order acceptance to accepted delivery by the customer, together with the complexity of the accounting rules for when revenue can be recognised in the accounts, presents a challenge in terms of ensuring consistent and correct application of the accounting rules. Internal controls Internal controls Internal controls The Group has risk management policies and procedures in place for managing its foreign exchange risk. The foreign currencies the Group has exposure to are the Chinese Yuan (Renminbi) (RMB), Norwegian Krone (NOK), Australian Dollar (AUD), Danish Krone (DKK) and Canadian Dollar (CAD). The group manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 24-months period for hedges of forecasted purchases and sales. The ongoing in ation is resulting in an increase in cost levels for the Group. The Group is continu- ously monitoring the development or purchase prices for goods and services required on the short, medium and long-term basis. On the other hand, the Group is also able to recharge (a part of) the increase in cost levels to its customers via increased sales prices. In order to mitigate the risk of incomplete or inaccurate reporting, Ebusco has developed and imple- mented company-speci c accounting guidelines, which set the standard for proper accounting. Key components of our guidelines are our accounting principles and checklist, both IFRS compliant. Next to the company-speci c accounting guidelines, we educate our Finance staff periodically to ensure keeping up with international accounting principles. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 73 73 LEGAL & REGULATORY TAX Risk trend Risk trend Risk appetite Risk appetite Risk Risk Non-compliance due to violation of legislation and regulations and internal guidelines can result in damage (including to reputation). In recent years, Ebusco has grown signi cantly in terms of sales, operations, employees and our business infrastructure. Consequently, the complexity of complying with rules and regulations has increased. Changes in regulations that apply to our business can increase compliance costs and the risk of non-comp- liance. Furthermore, additional regulations could impact or limit our ability to sell buses in speci c jurisdictions. Ebusco is exposed to tax risks which could result in double taxation, penalties and interest payments. The source of the risks could originate from local tax rules and regulations as well as international and EU regulatory frameworks. These include transfer pricing risks on internal cross-border deliveries of goods and services, as well as tax risks relating to changes in the transfer pricing model. The risks may have a signi cant impact on local nancial tax results, which, in turn, could adversely affect Ebusco’s nancial condition and operating results. Internal controls Internal controls The role of the Internal Audit function is to assess and test the Risk & Control framework and, next, to assess the systems of internal controls by perfor- ming independent procedures such as risk-based IT audits, operational audits and compliance audits. The Internal Audit function reports directly to the Audit Committee and Management Board. Ebusco’s tax policy, strategy and planning provides overarching governance. The corporate Tax department designs and implements this and provides tax advice, ensures tax compliance, including accounting and reporting, and deploys our tax risk management and control framework to ensure adhe- rence to up-to-date tax policies. The corporate Tax department is in charge of establishing, maintaining and overseeing the tax policies. COMPLIANCE increased equal avoiding low medium ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 74 “ Together with a driven project team and enthusiastic clients, I make the world a little greener every day. Tom Project Manager 74 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 75 SENSITIVITY ANALYSIS As the Management Board, in close cooperation with the Supervisory Board, we closely monitor the (po- tential) impact of different internal and external risk factors on our strategy and operations. The objective on our sensitivity analysis is to assess the risks in the context of the company’s current strategy to determi- ne their impact on our business and the viability of our business model, as well as on our ability to meet our nancial liabilities and other obligations. The following are four risk scenarios related to our strategy that, according to our sensitivity analysis, are considered severe but possible. Neither of the- se scenarios individually threaten the viability of the company; however, the compound impact of these four scenarios has been evaluated as the most seve- re stress scenario. 75 SCENARIO ASSOCIATED RISK DESCRIPTION Embargoes against China Geopolitical environment In the event of a full embargo against China, the company could be subject to a shortage of bus supplies, resulting in a loss of customers and impacting our corporate reputation. Moreover, it could lead to legislation (in breach of customer contract). These factors may have a material adverse effect on the company’s nancial position, results of operations and liquidity. Our ESG practices do no meet expectations ESG While our mission is to accelerate the transition to sustainable energy, if our ESG practices do not meet investor or other industry stakeholder expectations, which continue to evolve, we may incur additional costs and our brand, ability to attract and retain quali ed employees and business may be harmed. Loss of competitive advantage Competitive environment A strategic failure related to product innovation and product deve- lopment could lead to an inability to adapt to new market dynamics driven by public and/or consumer behaviors and competition and result in a loss of market share to new market entrants or existing competitors. These factors may have a material adverse effect on the company’s nancial position, results of operations and liquidity. Breach of data availability, confi dentiality and integrity (including Intellectual Property ‘IP’) IT & Security In the event of a successful data breach, the company could be subject to material monetary penalties, loss of customers and damage to our corporate reputation; it could also lead to potential litigation. A serious breach could also impact the operation of signi- cant business processes and result in non-availability of products for production or for customers and the inability to operate the day-to-day business. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 76 76 RAMPING UP PRODUCTION CAPACITY IN FRANCE On its road to international expansion, Metropole Rouen will be Ebusco’s next stop. Ebusco has elected the Renault Cléon site to set up its French production facility. In July 2022 the company has signed a letter of intent to lease 21,000m2 in the Metropole Rouen to facilitate its future growth ambitions in France and Southwest Europe. To ramp up the production capacity of the Ebusco 3.0, the new factory will enable the assembly of 500 buses per year. Currently, the Ebusco 3.0 is manufactured and assembled at the company’s facility in Deurne, which serves as a blueprint for future expansion. The new production facility in France will be the rst step towards the company’s geographical diversi cation and is expected to be operational in the rst half of 2024. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 77 “ To see my designs actually turn into reality. That’s what gives me energy. Martijn Design Engineer 77 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 78 78 The Management Board is responsible for the design and effectiveness of the in- ternal systems for risk management and control. The purpose of these systems is to identify and effectively manage signifi cant risks to which the company is ex- posed. However, they can never provide an absolute guarantee that the company will achieve its objectives and cannot entirely prevent major errors or losses, inci- dents,fraud or actions in breach of laws and regulations. The Management Board has assessed the stra- tegic, operational, nancial and reporting risks and compliance risks, as well as the design and effectiveness of the internal risk management and control systems as described in the section on ‘Risk Management’. During the year under review, the company has worked on the further development and implemen- tation of an Internal Risk & Control Framework. The Management Board is responsible for the esta- blishment and adequate functioning of a system of governance, risk management and internal controls in the company. This key responsibility has led to the development and implementation of an Internal Risk & Control Framework. By the end of 2022, the Risk & Control Framework has been de ned and approved by the Management Board. We recognise that our controls as per 2022 were not fully imple- mented or documented. While we have identi ed a further need for improvement, we will continue to roll-out the Internal Control framework. The frame- work is expected to be fully implemented at the end of 2023. Once fully implemented, controls will be tested on effectiveness periodically and the Manage- ment Board will report on internal risk management and control systems to the Supervisory Board and its Audit Committee. The Supervisory Board has reviewed and approved Ebusco’s 2022 nancial statements as prepared by the Management Board. The Audit Committee reviews and approves the audits planned for the nancial year. Furthermore, the Audit Committe monitors compliance with Euro- pean and Dutch independence rules on permitted services provided. The external auditor attends all Audit Committee meet- ings. The external auditor’s ndings are discussed at these meetings. The Audit Committee reports to the Supervisory Board on the topics discussed, including the independent auditor’s report with regards to the audit of the nancial statements as well as the content of the annual report. Furthermore, the external auditor may attend the Supervisory Board meeting in which the annual external audit report is discussed. The external auditor may also attend Supervisory Board meetings in which the monthly or quarterly nancial results are discussed. The Audit Committee is informed without delay in case irregularities are discovered in the content of the audit of the nancial reports. The role of the Internal Audit function is to assess and test the Risk & Control framework and, next, to assess the systems of internal controls by performing independent procedures such as risk-based IT audits, operational audits and compliance audits. The Internal Audit function reports directly to the Audit Committee and Management Board. Based on the nancial results for the 2022 nan- cial year, the nancial position of the company and MANAGEMENT STATEMENT ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 79 79 the prospects for the year 2023 and beyond, and considering current market conditions, the Manage- ment Board has assessed the company's assumptions of going concern. The effectiveness and functioning of the internal risk management and control systems have been discussed with the Audit Committee and the Supervi- sory Board. Taking into account the aforementioned risks and the measures designed to manage them, and in accordance with the best practice provision 1.4.3. of the Dutch Corporate Governance Code, the Manage- ment Board declares that to the best of its knowledge: • the report provides suf cient insights in the ef- fectiveness of the internal risk management and control systems and into any failings thereof; • the aforementioned systems provide reasonable assurance that the nancial reporting does not contain any material inaccuracies; • there is a reasonable expectation that Ebusco will be able to continue its operations and meet its liabi- lities for at least twelve months. Based on the cur- rent state of affairs, it is justi ed that the nancial reporting is prepared on a going concern basis; and • the section on risk management in the report states those material risks and uncertainties that are relevant to the expectation of the company’s continuity for the period of twelve months after the preparation of the report. With reference to Section 5:25c paragraph 2, sub c of the Financial Markets Supervision Act (Wet op het nancieel toezicht), the Management Board declares that to the best of its knowledge: • The nancial statements provide a fair view of the assets, liabilities, nancial position and pro t or loss of Ebusco and of the companies included in the consolidation taken as a whole. • The Management Board Report provides a fair view of the situation on 31 December 2022 and of the developments during 2022 of Ebusco and of its af liated companies whose information has been included in the consolidated nancial sta- tements; and that the Management Board Report describes the material risks and uncertainties that Ebusco faces. Deurne, the Netherlands, 29 March 2023 Management Board P.H.A.M. Bijvelds, Chief Executive Offi cer P. van Beers, Chief Financial Offi cer B.H.M.J. Fleuren, Chief Operational Offi cer 79 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 80 “ Conceiving and executing all the modifi cations on the buses is what makes me most happy! Pim Production Mechanic 80 ” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION GOVERNANCE CONTENT Corporate governance 82 Composition of the Supervisory Board 91 Report of the Supervisory Board 92 Remuneration report 98 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 81 82 82 CORPORATE GOVERNANCE INTRODUCTION Ebusco is a public limited liability company (naamloze vennootschap) under the laws of the Netherlands. The company is domiciled in the Netherlands and has its registered seat in Deurne, the Netherlands. ched and there are no restrictions on the voting rights attached to the shares in Ebusco. All ordinary shares have equal entitlement to the pro ts and general reserves attributable to the shareholders. Ebusco does not cooperate with the issuance of de- pository receipts for its shares, nor does the compa- ny apply any restrictions on the transfer of its sha- res. The company is to the best of its knowledge not aware of any agreement between shareholders of the company which could result in a possible restriction on the transfer of shares or voting rights. All resolutions of the General Meeting of Sharehol- ders are passed with an absolute majority of the vo- tes cast, unless a larger majority is required by law or pursuant to the company’s Articles of Association. The articles of association of the company do not include speci c provisions with respect to so-called protection measures in case of a take-over bid. The company has not entered into agreements pursu- ant to which a change of control would have an effect. All operational agreements have been concluded by a participating company, in most cases Ebusco B.V. The shareholders of the company prior to IPO, each having an interest of 10% or more, entered into a cooperation agreement. Pursuant to this agreement, every single shareholder having at least 10% of the outstanding shares is entitled to nominate a candida- te for the Supervisory Board which agreement is still valid. The management service agreements between Ebus- co Holding N.V. and each of the members of the board do not provide for a payment, either in cash or other- wise, in the event of the conclusion of an offer on all or part of the shares in the company or a subsidiary. ISSUANCE OR ACQUISITION OF SHARES A remuneration scheme is in place under which mem- bers of the Management Board are entitled to receive rights to acquire shares in the capital of the compa- ny. The Supervisory Board has set the material terms which must be met for the respective members of the Management Board to receive these rights. Conside- ring that most material terms are subject to certain nancial goals, the granting of these rights is subject to the approval by the General Meeting of Sharehol- ders of the annual accounts for the year under review. Currently, the company has an Employee Stock Op- tion Plan in place for a limited number of employees. These plans have been granted in February 2022 to the individuals and will vest in February 2024, pen- ding the employment of the individual at vesting date. The Members of the Management Board are entitled to shares pursuant to the Long-Term Incentive (LTI) bonus scheme. For the nancial year 2022, the Ma- nagement Board waived their right to shares or op- tions on shares pursuant to the LTI for the Company given the performance of company. The company is entitled to acquire its own fully paid- up shares with due observance of the relevant legal and statutory provisions. Acquisition of own shares is only permitted if the Ge- neral Meeting of Shareholders has authorised the Ma- nagement Board to do so. Such authorisation will be valid for a period not exceeding 18 months. This autho- risation is provided during the General Meeting of Sha- reholders in May 2022. In the resolution the General Meeting of Shareholders must determine the number Ebusco is listed on the Euronext Amsterdam, tic- ker EBUS:AS. It has a two-tier board structure, with a Management Board and a Supervisory Board. The company’s highest authority is the General Meeting of Shareholders, which is convened at least once a year. As a responsible corporate citizen, Ebusco acknow- ledges the importance of good corporate governance and open and transparent communications with all its stakeholders. CAPITAL STRUCTURE The company’s authorised share capital amounts to €2,200,000, divided into 220,000,000 ordinary sha- res with a nominal value of €0.01. The company’s is- sued share capital was €590,393.80 on 31 December 2022, consisting of 59,039,380 ordinary shares. Each ordinary share carries one vote. A shareholder may cast their vote in person, by proxy or at the Ge- neral Meeting of Shareholders. Ebusco has not issued any shares to which special rights of control are atta- ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION of shares that the Management Board may acquire for valuable consideration, the manner in which they may be acquired, and the limits within which the price must be set. In addition, the approval of the Supervisory Board is required for any such acquisition. The com- pany may, without authorisation by the General Meet- ing of Shareholders, acquire its own shares for the purpose of transferring such shares to employees of the company or of a group company under a scheme applicable to such employees. SHAREHOLDERS’ MEETINGS General Meetings of the Shareholders are convened by the Management Board or the Supervisory Board. A legal term of at least 42 calendar days applies be- tween the convocation date and the actual date of the meeting. A meeting must be convened by pos- ting the notice and relevant materials required for consideration and decisions by the shareholders on the company’s website. At least one General Meeting of Shareholders is to be held within six months following the close of the nancial year of the company. In 2022, the General Meeting of Shareholders took place on 25 May. In 2023, the General Meeting of Shareholders is sche- duled for 17 May. Other General Meetings of Shareholders will be held whenever and as often as the Management Board or the Supervisory Board deems necessary. General Meetings of Shareholders will also be held if the Ma- nagement Board or Supervisory Board is requested to that effect in writing by one or more shareholders in- dividually or jointly representing one-tenth or more of the company’s issued capital, specifying in detail the subjects to be discussed, unless such a request is un- reasonable. If neither the Management Board nor the Supervisory Board have taken the necessary steps to ensure that a General Meeting can be held within eight (8) weeks of receiving such a request, the re- questing shareholder(s) may seek authorization from a judge of the court to convene a General Meeting. Each shareholder, either in person or by written proxy, is entitled to attend, speak and vote at a Gene- ral Meeting of Shareholders. Those shareholders who individually or jointly represent at least three percent (3%) of the company’s issued share capital may re- quest items to be added to the agenda of the General Meeting of Shareholders. Such a request is granted if it is received in writing at least 60 days before the meeting, stating the reasons for said request. Each share carries one vote. The company cannot vote on shares that it holds in its own capital. The Management Board and Supervisory Board must ensure that the General Meeting of Shareholders is adequately provided with all information required for a shareholder to decide and vote on the subject matter presented. The draft minutes of the General Meeting of Share- holders must be published on the company’s web- site within three months of the date of the meeting. Shareholders are invited to submit comments to the draft minutes within this three-month period. After this period the Chairman and Secretary of the Gene- ral Meeting of Shareholders will formally adopt and subsequently sign the minutes, taking into conside- ration any comments received. MANAGEMENT BOARD RESPONSIBILITIES AND REPORTING LINE The Management Board is the executive body ent- rusted with the management of the company and responsible for ensuring its continuity under the supervision of the Supervisory Board. The Manage- ment Board's responsibilities include setting the company's management agenda, developing a view on long-term value creation, enhancing the perfor- mance of the company, developing a strategy, iden- tifying, analysing, and managing the risks associa- ted with the company's strategy and activities, and establishing and implementing internal procedures which safeguard that all relevant information is made known to the Management Board and the Su- pervisory Board in a timely manner. In ful lling their responsibilities, the members of the Management Board must act in the interest of the company and pay speci c attention to the relevant interests of the company's employees, sharehol- ders, lenders, customers, suppliers, and other sta- keholders. The Management Board reports to the Supervisory Board and the General Meeting of Shareholders. 83 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 84 COMPOSITION, DIVISION OF DUTIES AND REMUNERATION The number of members of the Management Board is determined by the Supervisory Board in consulta- tion with the Management Board. At the time of the initial public offering, the number of members of the Management Board was set at three which is now still applicable. The members of the Management Board are ap- pointed by the General Meeting of Shareholders. The Supervisory Board will nominate one or more can- didates for a vacant position for the approval of the General Meeting of Shareholders. In turn, the Gene- ral Meeting of Shareholders may resolve to appoint someone other than the person(s) nominated by the Supervisory Board, provided an absolute majority of the votes cast representing at least one-third of the outstanding capital. If a proposal to appoint a person not nominated by the Supervisory Board is suppor- ted by an absolute majority of the votes cast, but this majority does not represent at least one-third of the outstanding capital of the company, a new meet- ing can be convened in which the resolution can be adopted by an absolute majority of the votes cast, irrespective of the percentage of the company’s is- sued capital present or represented at that meeting. Any new member of the Management Board is ap- pointed for a maximum period of four years per term. Members of the Management Board may be reap- pointed for a term of no more than four years at a time, which reappointment should be arranged in a timely fashion. The company's diversity policy, as drawn up by the Supervisory Board, will be conside- red in the event of an appointment or reappointment. Currently, no seats are taken by women on the Ma- nagement Board. During 2022, the Supervisory Board set a gender balance target for the Management Board to have at least one female and one male Management Board member in 2026. In the extended Management Board, one seat is taken by a woman and ve by men. When setting the gender balan- ce target for the Management Board and Extended Management Board, the Supervisory Board has con- sidered the technology environment Ebusco operates in, with a thinly populated engineering talent pool, making it challenging to recruit female talent. Nonet- heless, the Supervisory Board set a gender balance target for the extended Management Board to have at least one-third female in 2026. The plan to achie- ve these targets for the Management Board and ex- tended Management Board is currently not nal yet and in preparation by the Supervisory Board. The Articles of Association of the company stipu- late that a member of the Management Board may be suspended or dismissed by the General Meeting of Shareholders. A resolution of the General Meeting of Shareholders to suspend or remove a member of the Management Board other than pursuant to a pro- posal by the Supervisory Board requires an absolute majority of the votes cast representing at least one- third of the company's issued capital. If a resolution as referred to in the previous sentence is supported by an absolute majority of the votes cast, but this majority does not represent at least one-third of the company's issued capital, a new meeting can be convened in which the resolution can be adopted by an absolute majority of the votes cast, irrespective of the percentage of the Company's issued capital represented at the meeting. A member of the Management Board may be sus- pended by the Supervisory Board. A suspension by the Supervisory Board may be reversed by the Gene- ral Meeting of Shareholders. From 7 October 2021, the Management Board com- prises of the following individuals: Name Position Nationality Gender End of Term P.H.A.M. Bijvelds CEO Dutch Male 2025 AGM P. van Beers CFO Dutch Male 2023 AGM B.H.M.J. Fleuren COO Dutch Male 2024 AGM The Management Board is collectively responsible for all actions of each individual member of the Manage- ment Board. The division of duties within the Manage- ment Board as well as the Management Board’s opera- ting procedures are set out in the company’s Articles of Association and the Management Board By-laws. The Articles of Association and the Management Board By- laws are published on the company’s website. Per the 2023 AGM, the appointment term of Paul van Beers, CFO, will expire. Mr. Van Beers has informed the Supervisory Board that he is not available for ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 85 reappointment and will retire per the 2023 AGM, upon completion of his current term. In view of the upco- ming expiration of the term of Paul van Beers, the Supervisory Board engaged in multiple sessions with the CEO to determine the optimal composition of the Management Board and intends to nominate a suc- cessor at the General Meeting of Shareholders in May 2023. The Remuneration Policy and based thereon, the re- muneration and terms and conditions of the mem- bers of the Management Board have been establis- hed by the General Meeting of Shareholders prior to the company being listed. Since the date of the initial public offering, the Supervisory Board has reviewed the remuneration and other terms and conditions for each member of the Managing Board. Any remune- ration or amendment there to as established by the Supervisory Board will be in compliance with the company’s Remuneration Policy. Any amendment thereto will require a resolution of the General Meet- ing of Shareholders by an absolute majority of the votes cast. At least every four (4) years, the Remune- ration Policy will be submitted to the General Meeting of Shareholders for approval. SUPERVISORY BOARD RESPONSIBILITIES AND REPORTING LINE The Supervisory Board supervises the Management Board's management of the company, the com- pany's general course of affairs, and its af liated business. The Supervisory Board is accountable for these matters to the General Meeting of Sharehol- ders. The Supervisory Board also provides advice to the Management Board. In performing their duties, the members of the Supervisory Board are required to focus on the effectiveness of the company's in- ternal risk management and control systems as well as the integrity and quality of the company's nan- cial reporting. In the ful llment of their duties, the members of the Supervisory Board must act in the interest of the company and pay speci c attention to the relevant interests of the company's employees, shareholders, lenders, customers, suppliers, and other stakeholders. The Supervisory Board monitors the internal control structure and procedures and the assessment of the risks faced by the company and its subsidiaries. In 2022, the company enhanced its internal control systems and procedures. Several key controls have been implemented and tested on effectiveness peri- odically. The remainder of the key controls will be im- plemented in the rst half of 2023. The effectiveness of the full internal control framework will be asses- sed and documented on a monthly basis. In accordance with the Supervisory Board By-laws, the Supervisory Board is responsible for decision-ma- king in dealing with transactions (1) that constitute an existing or potential con icts of interest between an individual member of the Management Board, or an individual member of the Supervisory Board on one hand, and the company on the other hand, or (2) which are between the company and a shareholder having at least one percent (1%) of the outstanding issued capi- tal. Both types of transactions are quali ed as related party transactions pursuant to the provisions of the Dutch Financial Supervision Act (Wet op het nancieel toezicht) and EU-IFRS. Said regulations also state the requirement of market conformity of these transacti- ons.No related party transactions occurred in the cour- se of the 2022 nancial year. The Supervisory Board reports to the General Meeting of Shareholders. COMPOSITION, DIVISION OF DUTIES AND REMUNERATION In accordance with the Company’s Articles of Asso- ciation, the Supervisory Board consists of at least three natural persons who are appointed by the Ge- neral Meeting of Shareholders. The actual number of members is established by the Supervisory Board. On 26 October 2021, the date at which Ebusco became a public limited liability company, the Supervisory Board comprised ve members. As of AGM 2023, this will be six members. The Supervisory Board is composed in such a way that its members can operate independently and be critical of each other, the Management Board, and any interest group, even if a member of the Supervisory Board is nominated by an individual shareholder who is authorised to nominate a member of the Superviso- ry Board without instruction or consultation. Two members of the Supervisory Board are quali ed as independent within the meaning of best practice ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 86 provision 2.1.8. of the Dutch Corporate Governance Code. Three members of the Supervisory Board were nominated by a respective shareholder authorised to nominate a candidate for appointment by the General Meeting of Shareholders. These three mem- bers are considered to not be independent within the meaning of the Dutch Corporate Governance Code. A pre-IPO shareholder holding with at least ten percent (10%) of the outstanding issued capital has the right to nominate a candidate for the Supervisory Board. Any nomination should in itself qualify, taking into consideration the composition of the Supervisory Board and its committees, the company’s diversity policy, the pro le for a speci c position within the Supervisory Board, and any other criteria deemed re- levant by the Supervisory Board at any time. The members of the Supervisory Board are appointed by the General Meeting of Shareholders. The Super- visory Board nominates one or more candidates for each vacant position. Each nomination for appoint- ment or proposal for reappointment of a member must be supported on suf cient grounds, and in the event of a reappointment the performance and ope- ration of the member up for reappointment must also be taken into consideration. The Articles of Associa- tion and Supervisory Board By-laws stipulate that a member can be appointed for a term not exceeding four years and reappointed once for a similar term. After this period a member can be reappointed once more, albeit for a term not exceeding two years, as well as for one subsequent term not exceeding two years. A resolution of the General Meeting of Shareholders to appoint a Supervisory Board member other than in accordance with a nomination by the Supervisory Board requires a majority of the votes cast represen- ting at least one-third of the company's issued capi- tal. If a proposal to appoint a person not nominated by the Supervisory Board is supported by an absolute majority of the votes cast, but this majority does not represent at least one-third of the company's issued capital, a new meeting can be convened in which the resolution can be adopted by an absolute majority of the votes cast, irrespective of the percentage of the company's issued capital represented at the meeting. Supervisory Board members may be suspended or re- moved by the General Meeting of Shareholders at any time. A resolution of the General Meeting of Sharehol- ders to suspend or remove a Supervisory Board mem- ber other than pursuant to a proposal by the Super- visory Board requires an absolute majority of the votes cast representing at least one-third of the company's issued capital. If a resolution as referred to in the pre- vious sentence is supported by an absolute majority of the votes cast, but this majority does not represent at least one-third of the company's issued capital, a new meeting can be convened in which the resolution can be adopted by an absolute majority of the votes cast, irrespective of the percentage of the company's issued capital represented. Any suspension may be extended one or more times but may not last longer than three months in the aggregate. If at the end of that period, no decision has been taken on termination of the suspen- sion or on removal, the suspension is lifted. The Supervisory Board members will retire their mem- bership in accordance with a rotation plan drawn up by the Supervisory Board. From 26 October 2021 up to now, the Supervisory Board comprised the following individuals: Name Position Nationality Gender End of Term Derk Haank Chair Dutch male 2025 AGM Jeroen Drost Vice-chair/ Nomination Committee chair Dutch male 2024 AGM Carin Gorter Member/Audit Committee chair Dutch female 2024 AGM Ruud Spoor Member Dutch male 2025 AGM Roelf de Boer Member/ Remuneration Committee chair Dutch male 2023 AGM The current term of Roelf de Boer, Supervisory Board member, will end per the 2023 AGM. The Superviso- ry Board intends to nominate Roelf de Boer for re- appointment as member of the Supervisory Board effective from the 2023 AGM and for the duration of one year, until AGM 2024. The members of the Supervisory Board are remune- rated in accordance with the Remuneration Policy. The Remuneration Policy is approved by the General Meeting of Shareholders. It can be amended by the General Meeting of Shareholders upon a proposal ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 87 87 from the Supervisory Board. The Remuneration Poli- cy is published on the company’s website. SUPERVISORY BOARD COMMITTEES The Supervisory Board has established three com- mittees, being • the Audit Committee; • the Nomination Committee; and • the Remuneration Committee. THE AUDIT COMMITTEE The function of the Audit Committee is to assist in the decision-making of the Supervisory Board. Accor- ding to its charter, the Audit Committee undertakes preparatory work for the Supervisory Board's decisi- on-making regarding the supervision of the integrity and quality of the company's nancial reporting and the effectiveness of the Company's internal risk ma- nagement and control systems. The Audit Committee is speci cally responsible for: a monitoring the nancial reporting process and draf- ting proposals to safeguard the integrity of the pro- cess; b monitoring the effectiveness of the internal control system, the internal audit system (if applicable), and the risk management system in relation to the company’s nancial reporting; c monitoring the statutory audit of the nancial state- ments; d reviewing and monitoring the independence of the external auditor or audit rm, in particular, the pro- vision of additional services to the company; e adopting a procedure for the selection of the exter- nal auditor and the nomination for appointment of the external auditor with respect to the statutory audit of the nancial statements; f and performing preparatory work for the Super- visory Board's decision-making regarding the su- pervision of the integrity and quality of the com- pany's nancial reporting and the effectiveness of the company's internal risk management and control systems. Since 26 October 2021, the Audit Committee consists of Carin Gorter (chair) and Ruud Spoor (member). THE NOMINATION COMMITTEE The purpose of this committee is to assist in the de- cision-making of the Supervisory Board. According to its charter, the Nomination Committee undertakes preparatory work for the Supervisory Board's decisi- on-making regarding the selection and appointment of members of the Management Board and Super- visory Board. The Nomination Committee is speci cally responsi- ble for: a drafting selection criteria and appointment proce- dures for members of the Management Board and Supervisory Board; b assessing at least once a year the size and compo- sition of the Management Board and Supervisory Board; c making proposals for the Supervisory Board pro le; d assessing at least once a year the functioning of each individual member of the Management Board and Supervisory Board, and reporting their ndings to the Supervisory Board; e drafting a plan for the succession of members of the Management Board and Supervisory Board aimed at retaining a balance in the requisite expertise, experi- ence, and diversity; f making proposals for the appointment (and reap- pointment) of members of the Management Board and Supervisory Board; g supervising the policy of the Management Board on the selection criteria and appointment procedures for senior management; h and performing preparatory work for the Supervisory Board's decision-making regarding (i) the acceptan- ce by a member of the Management Board of mem- bership to the Supervisory Board or to the position of non-executive director of a listed company and (ii) with regard to any con ict of interest that may arise from Supervisory Board members accepting ancillary positions. Since 26 October 2021, the Nomination Commit- tee consists of Jeroen Drost (chair) and Derk Haank (member). THE REMUNERATION COMMITTEE The purpose of this committee is to assist in the decisi- on-making of the Supervisory Board. According to the Remuneration Committee’s charter, the Remuneration Committee undertakes preparatory work for the Super- visory Board's decision-making regarding the remune- ration policy. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 88 The Remuneration Committee is speci cally respon- sible for: a submitting a clear and understandable proposal to the Supervisory Board for the remuneration policy to be pursued for the members of the Management Board; b making proposals concerning the remuneration of the individual members of the Management Board in accordance with the remuneration policy; c preparing the company’s remuneration report, and d making proposals to the Supervisory Board for the remuneration of the individual members of the Supervisory Board. Since 26 October 2021, the Remuneration Commit- tee consists of Roelf de Boer (chair) and Derk Haank (member). The Supervisory Board intends to nomi- nate Roelf de Boer for reappointment as Chairman of the Remuneration Committee effective from the 2023 AGM and for the duration of one year, until AGM 2024. CORPORATE GOVERNANCE With respect to the 2022 nancial year, Ebusco is reporting on compliance with the Governance Code. Ebusco fully endorses the core principles of the Go- vernance Code and is committed to fully complying with the Governance Code’s best practices where possible within the organisation. However, in consi- deration of the company’s own interests and the in- terests of its stakeholders, we deviate from a limited number of best practice provisions, as speci ed and explained below. Best Practice Provision Non-compliance Measures to address non-compliance 1.6.3: assignment of external auditor by Supervisory Board The external auditor was appointed by the share- holders prior to the establishment of the Supervi- sory Board on 26 October 2021. With respect to the audit of the 2024 scal year, the Company will act in accordance with best practice provision 1.6.3. The Audit Committee has initiated and nalised an audit tender for the nancial years 2024-2026. The nomination and appointment of the external auditor for the nancial years 2024- 2026 will be put to vote at the General Meeting of Shareholders in May 2023. 2.1.6: composition of Supervisory Board in compliance with the “Act on a more balanced ratio of men and women on management and super- visory boards” (Wet even- wichtige verhouding man/ vrouw in bestuur en raad van commissarissen) The present composition of the Supervisory Board is not in compliance with the Act on a more balanced ratio of men and women on management and supervisory board, effective from 1 January 2022. Whilst composing the Supervisory Board, the need to attract members with a strong professional background and t was deemed of paramount importance above achieving a balanced ratio of men to women The nomination committee shall take the Act on balanced ratio men/women in the Supervisory Board in consideration in order to comply with the growth criterium of said Act in the medium-term future. With the nomination of Saskia Schatteman, we will be compliant from 2023 onwards. 2.1.7ii: majority of Supervisory Board is independent The composition of the Supervisory Board is not in compliance with best practice provision 2.1.7 (ii) which requires that more than half of the Supervi- sory Board members are independent as de ned in the Governance Code. Under the existing Relation- ship Agreement, each of the current shareholders holding ten percent (10%) or more in the total outstanding issued capital has the right to nomi- nate a candidate for the Supervisory Board. Three shareholders qualify, each of whom has made use of the right to nominate, meaning that three of the ve members of the Supervisory Board are not inde- pendent within the context of the Governance Code. The nomination right of a shareholder having at least 10% of the outstanding capital will cease once the shareholder’s interest falls below that threshold. This is, however, outside the compa- ny’s control. Considering the nomination of Saskia Schatteman, as an independent member of the Supervisory Board, 50% of the Supervisory Board members are independent. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 89 DIVERSITY POLICY Ebusco has a Diversity Policy in place, the purpose of which is to ensure that the composition of the Superviso- ry Board and Management Board is diverse within the me- aning of the policy. The purpose of the Diversity Policy is to achieve that the composition of the Supervisory Board, Management Board, and the employees of the company as a whole is as diverse as possible, taking into conside- ration a variety of non-discriminatory factors. The Diversity Policy is aimed not only at achieving a ba- lance in terms of gender but also in a more general sense in terms of skills, experience, background, nationality, age, ethnicity, sexual orientation, religious beliefs, physi- cal ability, and other characteristics. With respect to the Supervisory Board, the Act on a more balanced ratio of men and women on management and supervisory boards” (Wet evenwichtige verhouding man/ vrouw in het bestuur en de raad van commissarissen), stipulates that any vacancy should be lled by a member of the sex not already equally represented. In the case of Ebusco that means that the rst new member of the Su- pervisory Board has to be female. EXTERNAL AUDITOR For the 2022 nancial year, Ernst & Young Accoun- tants LLP has been appointed as the company’s ex- ternal auditor by the General Meeting of Shareholders prior to the listing of the company and consequently the installation of the audit committee. The appoint- ment of the auditor was done without a tender and se- lection process as is appropriate for listed companies. Therefore, the company has executed and nalised a ten- der and subsequent selection of an auditor for the nanci- al years 2024 – 2026. The recommendation is to continue the engagement with Ernst & Young Accountants LLP. The recommended selection of the auditor will be put to vote at the General Meeting of Shareholders in May 2023. The external auditor may be questioned by shareholders and people representing a shareholder at the General Meet- ing of Shareholders on matters regarding its independent auditor’s report. The external auditor is therefore obliged to attend, and allowed to address, the General Meeting of Shareholders. CORPORATE GOVERNANCE STATEMENT The Governance Code requires companies to publish a statement concerning their approach to corporate governance and compliance with the Dutch Corporate Governance Code. This is referred to in Article 2a of the Decree on additional requirements for board reports (‘Besluit inhoud bestuursverslag’), as last amended on 29 August 2017. The information required to be included in this Corporate Governance Statement as described in articles 3, 3a, 3b and 3d of the Decree can be found in this annual report under the Corporate Governanceand Shareholder Information chapters. Deurne, the Netherlands, 29 March 2023 P.H.A.M. Bijvelds, Chief Executive Offi cer P. van Beers, Chief Financial Offi cer B.H.M.J. Fleuren, Chief Operational Offi cer ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 90 90 LAUNCHING THE FIRST RIGHT-HAND DRIVE On its route to zero-emission public transport, Ebusco has taken its next step. In September 2022 the company laun- ched its rst right-hand-drive Ebusco 2.2 in Australia. With this model, Ebusco is offering a new way of zero-emission traveling in Australia with a spacious design and a quiet and smooth operation that is synonymous with electric buses. After initially developing the Ebusco 2.2 in 2017, the lau- nch of the extreme right-hand drive is proof of the compa- ny’s continuous commitment to innovation. With a range of up to 450 kilometers on a single charge, the extremely ef cient Ebusco 2.2 is well- tted for a broad range of cli- mate and weather conditions. The demo right-hand drive will stay on the road for the next 12-18 months to drive commercial momentum in Australia. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 91 91 DERK HAANK Chair, member of the Nomination Committee, member of the Remuneration Committee Derk Haank was CEO of Springer Nature, a worldwide publishing rm of scienti c journals. Prior to that, he was CEO of academic publishing company Elsevier and a board member of Reed Elsevier (both predeces- sors of publicly listed RELX Group), and CEO of publis- hing company Misset. He currently is the chair of the supervisory board of navigation technology developer TomTom and a non-executive board member at online gaming and advertising company Azerion. Derk Haank holds a bachelor’s degree in Economi- cs and a master’s degree in Business Administra- tion, both from the University of Amsterdam in the Netherlands. JEROEN DROST Vice-chair, chair of the Nomination Committee Jeroen Drost is the CEO of Dutch trading company SHV Holdings, in which role he also sits on several boards of SHV-related companies. He started his career at ABN AMRO where he held various positions in the Netherlands and internationally. Subsequently he was CEO of Dutch commercial bank NIBC and CEO of in- vestment rm NPM Capital. He currently is a member of the general management of VNO-NCW, the largest employers’ organisation in the Netherlands. Jeroen Drost holds a bachelor’s degree in Economics and a master’s degree in Business Economics, both from the Erasmus University in Rotterdam in the Netherlands. CARIN GORTER Member, chair of the Audit Committee Carin Gorter started her career at a predecessor of ac- countancy rm EY Nederland. Subsequently, she held various management positions at Rabobank and ABN AMRO. She currently holds various supervisory board positions including, technology rm TKH Group, gym chain Basic-Fit (both Dutch listed companies), legal and nancial services provider DAS Holding and Dutch insurance company TVM Verzekeringen. Carin Gorter holds a master’s degree in Business Eco- nomics and a postgraduate degree in Accountancy, both from the University of Groningen in the Nether- lands. Furthermore, she is external Audit Committee member of the Ministry of Justice and Security and Supervisory Board member of Nederlandse Trans- plantatie Stichting. RUUD SPOOR Member, member of the Audit Committee Ruud Spoor is CEO of Trackwise Investment Manage- ment, a Dutch investment management, and consul- tancy rm. His 40 years of experience in banking and nance include ten years in private equity. He started his career at ABN AMRO and subsequently held positi- ons at various investment and consultancy rms. Ruud Spoor holds a Bachelor of Commerce degree from the HES Rotterdam in the Netherlands. ROELF DE BOER Member, chair of the Remuneration Committee Roelf de Boer started his career as an of cer in the Royal Netherlands Marine Reserve Corps, and subse- quently held various positions in the port and trans- port industry, amongst others at Royal Nedlloyd Group. Furthermore, he held various public and semi-public positions including as minister of Transport, Public Works and Water Management of the Netherlands and president of the Rotterdam Chamber of Commerce. Roelf de Boer is currently chair of the Supervisory Board of logistics services provider Verbrugge Inter- national. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 92 REPORT OF THE SUPERVISORY BOARD DERK HAANK CHAIR INTRODUCTION “ I’m very proud of what the entire Ebusco team has accomplished in 2022 ” L ooking back at my rst full year as chair of the Su- pervisory Board, I’m proud of what all associates of Ebusco have accomplished and what opportuni- ties lie ahead of us. The listing end of the nancial year 2021 was a major milestone, enabling our international expansion plan. A highlight of this year was the signing of the Letter of Intention for an assembly location in Rouen, France. This facility will contribute to expanding our production capacity in Europe. Another important milestone is the contract Ebusco signed for the delivery of nine Mobile Energy Containers, with the option for an- other eleven. This contract proves that Ebusco’s exper- tise and know-how are not limited to buses but can be utilized throughout the complete transportation sector. Lastly, I would like to address the reveal of the Ebusco 18-meters 3.0 bus. This took a lot of effort, but we are proud of what the entire Ebusco team has accomplished and are con dent that this bus will be a success. We are pleased to announce that we will nominate Saskia Schatteman for appointment at the Annual General Meeting of Shareholders in May 2023 to fur- ther strengthen the Supervisory Board for a period of four years (AGM 2027). At the same time, Roelf de Boer will be nominated for re-appointment for one year (AGM 2024). Looking ahead to 2023, and beyond, supply chain dis- ruptions and in ation will continue to be a challenge. However, I strongly believe that the entire Ebusco team will overcome these challenges and will enter the next phase in accomplishing our international expansion plan. The opening of our new production facility in France will signi cantly improve our assembly footprint in Europe. I would like to thank the Management Board, but above all the Ebusco associates, who work very hard in achieving our long-term strategy. Without these skilled and motivated associates, Ebusco would not be on track with its international expansion plan. I look very much forward to continue to work with the Management Board and the Ebusco associates. On behalf of the Supervisory Board, Derk Haank MESSAGE FROM CHAIR OF THE SUPERVISORY BOARD GENERAL This report provides an overview of the approach and activities undertaken by the Supervisory Board in the year under review. In addition to supervising the general course of affairs, an important part of the Supervisory Board’s activi- ties was focused on ensuring Ebusco’s successful listing and an appropriate governance structure. In carrying out its duties, the Supervisory Board is guided by the Dutch Civil Code, the Dutch Corporate Governance Code, the company’s Articles of Associa- tion, the Management Board By-laws, insofar speci c tasks and duties are designated to the Supervisory Board, the Supervisory Board By-laws, the charters of the respective committees of the Supervisory Board, the various company policies and the overall interests of the entire Ebusco group, the enterprises associat- ed with it and its various stakeholders. COMPOSITION, INDEPENDENCE AND EDUCATION The Supervisory Board consists of knowledgeable individuals with outstanding reputations and experi- ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 93 ence in supervisory roles who actively support the Management Board, providing it with guidance and advice. The Supervisory Board pro le is aligned with the pro- le and strategy of Ebusco, with a balanced distribu- tion of speci c expertise in relation to its business activities, strategy and long-term goals. Ebusco aims to have a balanced Supervisory Board. Effective 2022, Dutch law provides a mandatory gender quota, requiring that at least one-third of the Supervisory Board members are women and at least one-third are men (for calculation purposes, a total number of board members that cannot be divided by three, must be rounded up to the next number that can be divided by three). The quota is applicable to (i) the appointment of new Supervisory Board mem- bers, and (ii) the re-appointment of acting board members after eight years following their initial ap- pointment. Ebusco realizes that it currently does not meet the gender diversity quota for the Supervisory Board. Diversity, including in terms of gender, is an important consideration in the selection process for the appointment and reappointment of members of the Supervisory Board. The quota is that at least one third (1/3) of the total number of members of the Supervisory Board is woman. At present this is one- fth (1/5th), however considering the nomination of Saskia Schatteman the ratio increases to 1/3 and subsequently, if and when another vacancy arises in the coming years, the Supervisory Board will take into account the Supervisory Board pro le, Dutch law and the Governance Code in order to ensure the Supervisory Board is brought in line with the diversity requirements of the Governance Code. The members of the Supervisory Board attended induction sessions aimed at informing them about SUPERVISORY BOARD COMPOSITION Name Nationality Gender Financial expertise Number of supervisory board positions held Derk Haank (1953) Dutch Male 2 Jeroen Drost (1961) Dutch Male yes 3 Carin Gorter (1963) Dutch Female yes 5 Ruud Spoor (1958) Dutch Male yes 1 Roelf de Boer (1949) Dutch Male 2 * Number of current supervisory board positions at listed and large entities, including Ebusco. Name First appointment Term expiration Ebusco Supervisory Board Committee Derk Haank 26 October 2021 AGM 2025 Nomination Committee, Remuneration Committee Jeroen Drost 26 October 2021 AGM 2024 Nomination Committee (chair) Carin Gorter 26 October 2021 AGM 2024 Audit Committee (chair) Ruud Spoor 26 October 2021 AGM 2025 Audit Committee Roelf de Boer 26 October 2021 AGM 2023 Remuneration Committee (chair) Supervisory Board members Carin Gorter and Derk Haank are considered independent members of the Supervisory Board, as de ned in best practice provi- sion 2.1.8 of the Dutch Corporate Governance Code. Pursuant to the existing Relationship Agreement en- tered into on the date of listing of Ebusco, all share- holders having ten percent (10%) or more of the total outstanding shares in the company have the right to nominate a candidate for the Supervisory Board. Consequently, three (3) shareholders nominated a member of the Supervisory Board, thus the majority of the Supervisory Board is not quali ed as indepen- dent as de ned in best practise provision 2.1.8 of the Dutch Governance Code. Hence Ebusco does not comply with best practice provision 2.1.7 ii. The Supervisory Board strongly believes the overriding principle for its composition is that its members make a valuable contribution in terms of experience and knowledge. In the opinion of the Supervisory Board, its size and composition meet the speci cations laid down in the Supervisory Board pro le, notwithstand- ing the above factors. The Supervisory Board pro le forms an integral part of the Supervisory Board by- laws. None of the Supervisory Board members were grant- ed, nor do they own, any Ebusco shares or options on shares since their respective dates of appointment up to and including 31 December 2022. Ebusco’s strategy, nancial reporting, risk and audit, HR, marketing, legal and governance-related affairs. All members of the Supervisory Board visited the op- erational site in Deurne to gain a deeper knowledge and understanding of the company’s operations, op- portunities and challenges. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 94 EVALUATION The Supervisory Board conducted a self-assess- ment in December 2022 to evaluate its own perfor- mance as well as the performance of its committees and individual members, including the interaction with the Management Board. The overall outcome from the evaluation was positive. The composition of the Supervisory Board provided for a wealth of expertise and experience. The Super- visory Board was also positive about its relationship with management. All members of the Supervisory Board expressed the wish for site visits to learn more insights and get more familiar with the assembly pro- cess. Furthermore, the Supervisory Board expressed the wish to be updated on all relevant compliance laws and regulations. Finally, it was concluded that the diversity of the Supervisory Board and of the Com- pany’s leadership teams, in a broader sense, must re- main a focus point in the coming years. SUPERVISORY BOARD ENGAGEMENT 2022 The Supervisory Board met of cially seven times in 2022. Except for a limited number of occasions, and for valid reasons, Supervisory Board members attended all Supervisory Board meetings in 2022. The entire Management Board was present during these meetings. Four meetings were held in Deurne, The Netherlands, whereas three meetings were held online. In addition, the chairman of the Superviso- ry Board was in regular and informal contact with the CEO and the chairman of the Audit Committee stayed in regular, informal, contact with the CFO. The meetings addressed routine commercial, nan- cial and operational matters, and focused on the im- plementation of the strategy. The Supervisory Board paid particular attention to the Related Party Trans- actions. The Supervisory Board approved all policies of the company which became applicable concur- rent with the listing, including regulations governing the Management Board and Supervisory Board. ACTIVITIES OF THE SUPERVISORY BOARD COMMITTEES There are three committees that support the Super- visory Board: the Audit Committee, the Nomination Committee and the Remuneration Committee. Each committee addresses relevant topics and the chair- man of the committee reports to the Supervisory Board on the discussions held within the committee and its main recommendations to the Supervisory Board as a whole. AUDIT COMMITTEE The Audit Committee consists of two members, Carin Gorter (chair) and Ruud Spoor. The Audit Com- mittee has the appropriate level of knowledge and experience in terms of nancial administration and accounting for listed companies. The committee’s main role is to assist the Supervisory Board in mon- itoring the systems of internal control, the quality and integrity of the nancial reporting process, and the content of the nancial statements and reports; as well as in assessing and mitigating the compa- ny’s business and nancial risks. Month Topics Attendance rate March Formalisation Budget 2022 Draft Annual Report 2021 Speak-up policy Legal and compliance update Related party transactions 5 of 5 April Approval Annual Report 2021 Approval press release 5 of 5 - online June Evaluation General Meeting of Shareholders 2022 Bussiness update Speak-up policy IT and Cybersecurity ERP implementation Tax update Treasury Management ESG strategy and reporting Insurance Related party transactions Replacement Corporate Secretary 5 of 5 August Approval Q2-2022 interim results Approval press release Approval minutes of the General Meeting of Shareholders 2022 Business update 5 of 5 - online October Approval Q3-2022 press release Financing strategy and developments Business update 5 of 5 December Self-assessment and capability matrix (own performance) Succession planning Supervisory Board Education and training Supervisory Board members Budget 2023 (no approval) Annual strategy session Annual evaluation of Code of Conduct Approval Internal Audit plan 2023 ESG reporting and developments Ramp-up plan Management letter 2022 4 of 5 December Audit tender process and proposal 4 of 5 - online SUPERVISORY BOARD MEETINGS ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 95 The charter of the Audit Committee is available on the company’s corporate website. The Audit Committee met nine times in 2022. The Audit Committee members attended all Audit Com- mittee meetings in 2022. All nine meetings were held in Deurne, The Netherlands. All these meetings were attended by the external auditor. In addition framework and has been actively involved in the creation of the outsourced internal audit function. The Audit Committee established that the auditor is independent. As it is appropriate for listed companies, the Audit Committee started and nalised a tender process regarding the nomination for the (re)appoint- ment of the external auditor for the nancial years Month Topics Attendance rate January Budget 2022 IT and cybersecurity Legal and compliance Tax Speak-up policy ESG 2 of 2 February Status Annual Report 2021, including Financial Statements 2021 Budget 2022 IT and cybersecurity Legal and compliance Tax Speak-up policy ESG 2 of 2 - 1 additional Supervisory Board guest March Status Annual Report 2021, including Financial Statements 2021 Budget 2022 Internal audit External audit IT and cybersecurity Legal and compliance ESG Tax 2 of 2 May Agenda General Meeting of Shareholders Preparation Q2-2022 interim report Press release Evaluation audit 2021, including audit fees 2 of 2 to the of cial meetings, both members of the Audit Committee have regular contact with the CFO and the Internal CFO, mainly in order to prepare for the Audit Committee meeting. The Supervisory Board oversees management’s monitoring of compliance using the company’s risk management policies and procedures and reviews the adequacy of the risk management framework in terms of risks faced by the company. The further strengthening and development of the internal risk framework is a key point on the agenda of the Audit Committee. As part of these discussions, the audit committee obtained a clear picture of steps that have been taken to strengthen the IT security. The Audit Committee has been informed by the Management Board about the internal control June Q2-2022 interim report, including speci c IFRS accounting positions Implementation ERP system Speak-up policy Internal risk management ESG Finance update Insurance Audit plan 2022, including audit fees Legal and compliance Tax 2 of 2 - 1 additional Supervisory Board guest August Q2-2022 interim report, including speci c IFRS accounting positions Implementation ERP system ESG reporting 2 of 2 - 1 additional Supervisory Board guest September Audit tender process 2 of 2 - 1 additional Supervisory Board guest October Lost Time Injury Frequency (LTIF) Early warning audit topics 2 of 2 - 1 additional Supervisory Board guest November Planning Annual Report 2022 Management letter external auditor Medium- and long-term nancing plan Forecast 2022 Evaluation Internal Auditor Internal audit plan 2022 Internal control framework Tax framework Related party transactions 2022 2 of 2 Month Topics Attendance rate AUDIT COMMITTEE MEETINGS ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 96 96 2024-2026, in the third quarter of 2022. The selection of the recommended external auditor will be put to vote on the General Meeting of Shareholders on 17 May 2023. NOMINATION COMMITTEE The Nomination Committeeconsists of two members: Jeroen Drost (chairman), and Derk Haank. The main responsibility of the committee is to assist the Super- visory Board and Management Board with the selec- tion and appointment (and reappointment) proce- dures for members of the Supervisory Board and the Management Board. The charter of the Nomination Committee is available on the company’s corporate website. Per the 2023 AGM, the appointment term of Paul van Beers, CFO, will expire. Mr. Van Beers has informed the Supervisory Board that he is not available for reappointment and will retire per the 2023 AGM, upon completion of his current term. The Supervisory Board extends its thanks to Mr. Van Beers for his valuable contribution over the past 18 months, during which the Supervisory Board has greatly bene ted from his knowledge and experience. In view of the upcoming expiration of the term of Paul van Beers, the Committee engaged in multiple sessions with the CEO to determine the optimal composition of the Management Board. The committee intends to appoint Bjorn Krook, currently Investor Relations Manager, as ad interim CFO. The current term of Roelf de Boer, Supervisory Board member, will end per the 2023 AGM. The Supervisory Board intends to nominate Roelf de Boer for reappoint- ment as member of the Supervisory Board effective from the 2023 AGM and for the duration of one year, until AGM 2024. He was rst appointed in 2021 and has been a highly valued member of the Supervisory Board. Roelf de Boer also is the Chairman of the Remuneration Committee. In addition, the Supervisory Board intends to nominate Saskia Schatteman as a new member of the Supervi- sory Board, effective from the 2023 AGM. The Super- visory Board expects that Saskia Schatteman will be a valuable contributor to the Supervisory Board, given her background and experience. The Supervisory Board reviewed its relationship with the Management Board and it concluded that the relationship allows for open, in-depth discussions. The Supervisory Board emphasized the importance of obtaining the required information in a timely manner and the Management Board acknowledged this. The Nomination Committee met twice in 2022. The Nomination Committee members attended both meet- ings in 2022. One meeting was held in Deurne, The Netherlands and the other meeting was online. REMUNERATION COMMITTEE The Remuneration Committeeconsists of two members: Roelf de Boer (chairman) and Derk Haank. The main responsibility of the committee is to assist the Supervi- sory Board and Management Board in the establishment of an appropriate remuneration scheme for members of the Supervisory Board, members of the Management Board and, if so desired by the Management Board, members of the Management Team or other key gures within the organisation. The charter of the Remuneration Committee is avail- able on the company’s corporate website. The Remuneration Committeemet ve times in 2022. The Remuneration Committee members attended all meetings in 2022. All meetings were held in Deurne, The Netherlands. For one Remuneration Committee meeting, the other members of the Supervisory Board participated. Month Topics Attendance rate September Recruitment for new Supervisory Board member Policy review for selection and appointment of senior management 2 of 2 December Self-assessment Supervisory Board, including capability matrix Succsion planning Supervisory Board Training requirements Supervisory Board members Evaluation of composition, performance and succession planning of Management Board 2 of 2 NOMINATION COMMITTEE Month Topics Attendance rate January Review of Remunration report 2021 Management Board remuneration 2022 2 of 2 February Approval of Remuneration report 2021 2 of 2 March Speak-up policy Whistleblower policy Remuneration Management Board 2022 2 of 2 October Evaluation of shortand long term incentives (performance) 2 of 2 - 3 additional Supervisory Board guests December Evaluation remuneration Supervisory Board Draft Remuneration report 2022 2 of 2 REMUNERATION COMMITTEE ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION ATTENDANCE 2022 Except for a limited number of occasions, and for valid reasons, Supervisory Board members attended all Supervisory Board meetings in 2022. In all cases, the Supervisory Board members who were not able to attend made sure they were represented. All Supervisory Board members made adequate time available to give suf - cient attention to matters concerning the Company. For all committee meetings, the supervisory Board members, not being members of the committee, received a standing invitation. For some occasions, supervisory board members made use of the invitation to participate as guests in these committee meetings. INDEPENDENCE The Supervisory Board con rms that, during 2022, as well as on the date of publication of this report, two Supervisory Board members were independent and three Supervisory Board members were considered not to be independent referring to best practice provi- sion 2.1.8 vi of the Dutch Corporate Governance Code. Board attendance Supervisory Board Audit Committee Remuneration Committee Nomination Committee Number of meetings Held Attended Held Attended Held Attended Held Attended Derk Haank 7 7 5 5 2 2 Jeroen Drost 7 6 9 2 5 1 2 2 Carin Gorter 7 7 9 9 5 1 Roelf de Boer 7 6 9 3 5 5 Ruud Spoor 7 7 9 9 5 1 Ruud Spoor has been nominated by the current CEO, as pre-IPO shareholder. Jeroen Drost has been nominated by ING, as pre-IPO shareholder. Roelf de Boer has been nominated by VDVI, as pre-IPO shareholder. The Supervisory Board is under the opinion that the Board complies with the following articles of the best practice provisions of the Corporate Governance Code: - 2.1.7 except for 2.1.7 ii - 2.1.9 2022 FINANCIAL STATEMENTS The Audit Committee reviewed and discussed the Management Board report and nancial statements for the 2022 nancial year. The nancial statements for 2022 were audited and provided with an unquali edinde- pendent auditor's report by Ernst & Young Accountants LLP (see the independent auditor’s report in other infor- mation pursuant to 2:392 Dutch Civil Code) and were extensively discussed by the Audit Committee in the presence of theManagement Boardand the independent auditor in March 2023. Following this discussion, the entire Supervisory Board discussed the nancial state- 97 ments with the Management Board in the presence of the auditors. The Supervisory Board is of the opinion that the 2022 nancial statements meet all requirements for correctness and transparency. The 2022 nancial statements are endorsed by all Management Board and Supervisory Board members and are included in this Annual Report. The Supervisory Board recommends that the General Meeting of Shareholders, to be held on 17 May 2023, adopt the 2022 nancial statements. In addition, it recommends that the members of the Management Board and Supervisory Board be discharged from liability for their respective management and supervisory activi- ties performed in 2022. GRATITUDE The past year was yet another exceptional year, where the company demonstrated progress on the interna- tional expansion plan to meet its long-term objectives. We are grateful to Ebusco’s shareholders for their continued trust in and support of the Company, its strategy and its management. Most of all, the Supervi- sory Board would like to express its gratitude to associ- ates and management for their passion and dedication in delivering on Ebusco’s promises to customers and all its other stakeholders. Deurne, the Netherlands, 29 March 2023 Derk Haank on behalf of the Supervisory Board ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 98 REMUNERATION REPORT “ On behalf of the Remuneration Committee, I am pleased to present the 2022 Remuneration Report. ” ROELF DE BOER CHAIR OF THE REMUNERATION COMMITTEE 98 INTRODUCTION SUMMARY OF 2022 PERFORMANCE L ooking back on 2022, we are incredibly pleased to see that Ebusco experienced a strong revenue growth in a very dynamic environment. In addi- tion, the order book increased signi cantly, and the order pipeline indicates further continuous growth. To meet current and future demand, Ebusco is actively adding and improving capacity. A good example is the new factory in Rouen, France. This factory is expected to be operational in the rst half of 2024. The supply chain situation continued to be a disrup- tion, however its impact normalized over the third and fourth quarters. Nevertheless, Ebusco continues to experience late deliveries which sometimes leads to higher transport costs and inef ciencies during assembly. The Supervisory Board is very supportive of Ebusco’s long-term strategy and proud of what the Management Board and the entire organisation have achieved. LOOKING AHEAD TO 2023 Ebusco strongly believes that sustainability is our license to operate. Sustainability will take an even more signi cant role by accelerating our environ- mental, social and governance targets for 2023. In the period ahead, the Remuneration Committee will be closely monitoring developments in Sustain- MESSAGE FROM THE CHAIR OF THE REMUNERATION COMMITTEE ability reporting and Corporate Governance. The new Dutch Corporate Governance Code, effective as of 2023 and the development and growth of the Company, could have an impact on the remuneration policies of the Man- agement Board and Supervisory Board to be operated going forward. The geopolitical uncertainty coupled with supply chain shortages and the COVID-19 exposure will continue to disrupt the organization and its performance in 2023 but the Supervisory Board is very supportive of the mitigat- ing actions taken by the Management Board. I would like to thank our shareholders and other stake- holders for their engagement and for sharing their views on executive remuneration. We welcome feedback from our shareholders on this 2022 Remuneration Report. We hope the Remuneration Report provides a transpar- ent view of executive remuneration as operated during 2022. Dear Stakeholder, “ On behalf of the Remuneration Committee, I am pleased to present the 2022 Re- muneration Report, providing a summary of the application of the remuneration policy for the Management Board and the Supervisory Board in 2022 .” ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 99 This report describes how the Remuneration Policies of the Management Board and Supervisory Board were implemented in 2022. This report was prepared by the Management Board and the Remuneration Committee of the Supervisory Board. The Remuneration Committee makes recom- mendations to the Supervisory Board regarding the remuneration policy, as adopted by the General Meeting, for the Management Board and how to apply this policy to the remuneration of the indi- vidual Management Board members. This remuneration report combines the requirements that the Remuneration Committee must adhere to when preparing a remuneration report in line with the best practice provisions of the Dutch Corporate Governance Code (the ‘Code’) with the requirements as contained in article 2:135b of the Dutch Civil Code. This remuneration report is published on the company’s corporate website as part of the annual report and will be submitted to the Annual General Meeting of Shareholders (AGM) on 17 May 2023 for an advisory vote. This remuneration report is based on the current remuneration policy that was approved by and became effective following the General Meeting on 17 October 2021, prior to the company’s public listing on Euronext. Any subsequent changes to the remu- neration policy are subject to the approval of the General Meeting of Shareholders. During the 2021 AGM, the advisory vote on the 2021 Remuneration Report received 98.62% of the votes cast in favor. Given the short listing history on Euronext Amsterdam and considering this advisory vote result received, the Supervisory Board considered that no material changes are required at this stage with respect to the current remuneration policy. Consistent with the best practice principles of the Code, the rst part of this remuneration report describes the remuneration policy for the members of the Management Board, while the second part sets out how the remuneration policy was implemented in 2022. The report concludes with the details of the remuneration policy of the Supervisory Board and how this remuneration policy was implemented in 2022. REMUNERATION POLICY The remuneration policy aims to attract, retain and reward highly quali ed executives with the required background, skills, and experience needed for a company the size and complexity of Ebusco. The policy is transparent and aligns with the interests of the company’s shareholders and other stakeholders. Pursuant to the remuneration policy, the remunera- tion packages of the members of the Management Board consist of xed and variable components. The variable remuneration is linked to predetermined, assessable, and in uenceable targets, which are predominantly of a long-term nature. The remuner- ation policy is in keeping with the entrepreneurial culture of Ebusco and aims to achieve a good balance between xed and variable income, whereby the base compensation is relatively low and the vari- able compensation, provided that targets have been achieved, relatively high. The rationale behind this balance is that the company is focused on achieving growth, which should be compensated fairly. In this context, the members of the Board are incentivized and motivated to focus on and achieve the projected growth of the company. The remuneration of the Management Board consists of ve elements: • Fixed compensation - annual base salary • Short-term incentive - annual cash bonus plan • Long-term incentive – annual performance share plan • Pension allowance and other bene ts (e.g. ex- pense reimbursements) • Severance payments PEER GROUP In 2021, in anticipation of the listing, the company commissioned an independent remuneration consulting 99 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION rm to provide advice on the remuneration of the Management Board and Supervisory Board within the framework of the proposed remuneration policy. Based on this external advice Ebusco decided to set a base salary level around the median gure of the base salaries of the companies comprising the AScX Index whilst the annual cash bonus (STI) and performance share bonus (LTI) would be based upon the upper 25 percentile of the AScX Index companies. These compensation levels were consistent with the characteristics of Ebusco as well as in line with Ebusco’s growth perspective. FIXED REMUNERATION The annual base salary of the Management Board members is a xed compensation set by the Supervi- sory Board that considers a variety of factors. Based on the peer group benchmark, the xed compensa- tion of the members of the Management Board was adjusted on 17 October 2021. As a result, the annual base salary was set at €387,000 for the CEO and at €275,000 for both the CFO and COO, in line with the remuneration policy. For the nancial year 2022, these annual base salaries remained unchanged. VARIABLE REMUNERATION SHORT-TERM INCENTIVE (STI) The STI is an annual cash bonus. The objective is to incentivize strong nancial and personal perfor- mance, in line with Ebusco’s strategy and annually de ned targets. The bonus for the members of the Management Board may vary from 0% to 50% of the annual xed base salary, with 30% being applicable when targets are achieved, for both nancial and non- nancial personal targets. The payout at the threshold level is 0%, and 50% in the event of outperformance, to be determined for each separate target. These bonus percentages are at the high end of the upper 25 percentile of the AScX companies. The underlying rationale is to reward the growth of Ebusco. Targets are set annually by the Supervisory Board based on the budget and with a view to the compa- ny’s strategic ambitions. Financial targets are linked to the Ebusco 3.0 international roll-out plan and comprise 70% of the bonus, while non- nancial or individual targets make up the remaining 30%. These individual targets are related to the de ni- tion and implementation of new strategic projects or products within the company, with a focus on sustainable long-term growth. A performance zone is set for each of the nancial targets, with no bonus below the threshold level and the maximum bonus when the performance exceeds the upper end of the performance zone, in accor- dance with the following parameters: Financial target Payout % of base salary Threshold 60% achievement of Roll-Out Plan target 15% At Target 70% achievement of Roll-Out Plan target 30% Out performance 100% achievement of Roll-Out Plan target 50% The Supervisory Board may change the percentages and targets from time to time. LONG TERM INCENTIVE (LTI) The purpose of the long-term incentive plan is to align the interests of the company, shareholders and the Management Board for the medium and long term, to foster and reward sustainable perfor- mance and to provide an incentive for long-term commitment, thus promoting Management Board retention. Under the company’s long-term incentive plan members of the Management Board may be awarded conditional performance share units from the 2022 nancial year onwards. For all members of the Management Board the at-target value of the award may amount to 100% of their annual xed base salary in the respective year. Awards of performance share units will vest at the end of a three-year performance period subject to (i) the achievement of predetermined revenue growth targets consistent with the creation of long-term company value; and (ii) the continued service as a Management Board member with the company. 100 ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION When considered appropriate, the Remuneration Committee may apply at its discretion a performance incentive zone between 0% and 150% of the at-target value of the award depending on the long-term and sustainable performance achieved during the performance period. Furthermore, the Remuneration Committee has the discretion to introduce a non- - nancial target as an underpin to ensure sustained long-term performance (e.g. relating to ESG). Where required to ensure an appropriate re ection of performance, the Supervisory Board may at its discretion amend the level of vesting of performance share units, with the understanding that the award may not be increased in excess of the performance incentive zone. Any such discretionary amendment which would result in an increase in pay-out of more than 25% is subject to prior approval by the General Meeting of Shareholders. Performance conditions measured over the 3 year performance period PSU Vesting percentage Threshold: <80% achievement of the company goals 0% Between 80 - 100% achievement of the company goals Between 1% and 100% on a straight-line basis At target: 100% achievement of the company goals related to the Roll-Out Plan 100% Between 100 -120 achievement of the company goals Between 100% and 150% on a straight-line basis Out performance: 120% achievement of the company goals related to the Roll-Out Plan 150% During the nancial year 2022 the Remuneration Committee decided to increase the threshold from 60 to 80% based on a benchmark study. PENSION ALLOWANCE AND OTHER BENEFITS The members of the board have been granted a pension allowance of an amount that is equal to approximately 16% of their base salary, excluding any allowances and bonus payments. Other bene ts include 25 days of paid vacation per calendar year. Furthermore, the members of the Management Board receive a car allowance or company car in accordance with the company’s car policy. Apart from these bene ts, no other bene ts are granted. 101 ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 102 SEVERANCE PAYMENT The service agreements with the Management Board stipulate a notice period of six months and include a severance payment of six months of xed base salary in the event of involuntary termination. No severance payment will be made in the event of serious imputable or negligent behaviour. This is compliant with the best practice provision of the Dutch Corporate Governance Code on severance pay. CLAW-BACK AND ULTIMUM REMEDIUM Variable remuneration may be adjusted or recovered from a member of the Management Board, in accor- dance with the relevant provisions in the Dutch Civil Code, as amended from time to time. MANAGEMENT BOARD REMUNERATION 2022 The total remuneration of each individual member of the Management Board recognized and paid by the company in 2022 is as follows: Fixed Base Salary Pension Allowance STI LTI Other TOTAL Fixed compensation as % of Total Variable compensation As % of Total CEO €387,000 €63,000 €0 €0 €9,996 €459,996 100.00% 0.0% CFO €275,000 €45,000 €0 €0 €18,000 €338,000 100.00% 0.0% COO €275,000 €45,000 €0 €0 €16,260 €336,260 100.00% 0.0% TOTAL €937,000 €153,000 €0 €0 €44,256 €1,134,256 100.00% 0.0% The total remuneration of each individual member of the Management Board recognized and paid by the company in 2021 is as follows: Fixed Base Salary Pension Allow- ance Extraordinary Compensation STI LTI Other TOTAL Fixed Compensation as % of Total Variable Compensation As % of Total CEO €267,914 €12,024 €0 €0 €0 €6,663 €286,601 100.00% 0.0% CFO €295,880 €8,588 €5,000,000 €0 €0 €11,028 €5,315,496 100.00% 0.0% COO €182,516 €18,069 €0 €0 €0 €11,961 €212,546 100.00% 0.0% TOTAL €746,310 €38,681 €5,000,000 €0 €0 €29,652 €5,814,643 100.00% 0.0% The pre-IPO shareholders have entered into a settle- ment agreement with PBE Support, in the context of the pre-IPO restructuring. PBE Support is wholly owned by Ebusco’s CFO, Paul van Beers. A payment is due to PBE Support by the respective pre-IPO shareholder if a change in ownership of the shares held by the pre-IPO shareholders occurs. In 2022 one of the pre-IPO shareholders sold shares, which triggered a payment of €1.5 million by that respec- tive shareholder. This transaction has no impact on Ebusco’s balance sheet, income statement or cash- ows. Therefore, this transaction is not included in the CFO’s remuneration as summarized above for both 2021 and 2022. F IXED COMPENSATION Prior to Ebusco’s listing, the service agreements in place at the time with each of the respective Management Board members were terminated and new service agreements were concluded and came into effect. Therefore, all three members of the Management Board are included in the payroll administration of the company as from 22 October 2021. The xed base salary for 2021 consists of both payments under the terminated service agreements and payments under the new service agreements. When drawing up the remuneration policy and deter- mining the remuneration of the members of the Management Board, the Supervisory Board consid- ered possible outcomes of the variable remuneration elements and how they may affect the remuneration of the members of the Management Board. These scenario analyses were considered when de ning the structure of the policy. The Remuneration Committee also reviewed whether the remuneration policy is still suitable for the level and size of the company, and more speci cally, if the remuneration level is in line with the market. In 2022, the Remuneration Committee concluded that the remuneration of the members of the Manage- ment Board was in line with market practices and within the boundaries of the remuneration policy. ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 103 The Supervisory Board does not expect any signi - cant modi cations to the remuneration policy during the rst three years after the company’s listing. In determining the remuneration of the Management Board, the Supervisory Board also considers the impact of the overall remuneration of the Manage- ment Board on the pay differential within Ebusco. In line with the Code Ebusco considered the internal pay ratios within the organization when formulating the remuneration policy and when determining the remu- neration of individual members of the Management Board. The Supervisory Board can make discretionary adjustments to the outcome of variable remunera- tion, if the outcome is deemed unfair. In that case, the Supervisory Board can deviate from the policies set out above, when the members of the Supervi- sory Board consider this necessary or desirable in speci c individual cases. SHORT-TERM INCENTIVE (STI) The STI is an annual cash bonus. The objective is to incentivize strong nancial and personal perfor- mances, in line with Ebusco’s strategy and annually de ned targets. Financial targets are linked to the Ebusco 3.0 international roll-out plan and comprise 70% of the bonus, while non- nancial or individual targets make up the remaining 30%. These individual targets are related to the de nition and implementation of new strategic projects or products within the company, with a focus on sustainable long-term growth. Financial target Payout (% of base salary) Threshold 60% achievement of Roll-Out Plan target 15% At Target 70% achievement of Roll-Out Plan target 30% Out performance 100% achievement of Roll-Out Plan target 50% The nancial targets relate to: • Orderbook (# of buses): The orderbook is de ned as all orders for which a signed contract is in place, an option for another order within an existing contract and call-off contracts. • Deliveries (# of buses): Deliveries are de ned as delivery to and acceptance by the customer. • Revenue: Revenue is de ned as total revenues as per the nancial statements The non- nancial personal targets relate to: • Execution of the roll-out plan (non- nancial): This is de ned as the set-up for a green eld/brown eld and decision for the Netherlands to support growth ambitions. • Continuous cost price reduction: This is de ned as a 20% cost reduction versus the base line (as per the end of a speci c year). • People, processes and procedures – Successfully execute the “Best in class project” and contribute to the achievement of ISO 9001; – ESG (Environmental, Social, Governance): Set op sustainability plan before end 2022; – Employee satisfaction: Retention rate not low- er than year-end 2021 (87%) and set up survey 2023; – Set up Health and safety targets for 2023. • Individual target For 2022, no STI was granted due to the perfor- mance of company. LONG-TERM INCENTIVE: PERFORMANCE SHARE PLAN PSU As part of the remuneration policy, Ebusco has introduced a performance share unit plan (PSU) for the Management Board. The purpose of the PSU is to align the interests of the company, shareholders and Management Board over the long term. A PSU is a long-term incentive and consists of an annual grant of conditional performance shares. Vesting is subject to continued employment and performance testing after three years. The number of conditionally granted shares is set for three years. Any award for performance shares will in principle vest at the end of a three-year perfor- mance period. A performance zone is set for each of the company goals, with a threshold of 80% related to the achieve- ment of the company goals, as shown below. ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 104 Performance conditions measured over the 3 year performance period PSU Vesting percentage Threshold: <80% achievement of the company goals 0% Between 80 - 100% achievement of the company goals Between 1% and 100% on a straight-line basis At target: 100% achievement of the company goals related to the Roll-Out Plan 100% Between 100 -120 achievement of the company goals Between 100% and 150% on a straight-line basis Out performance: 120% achievement of the company goals related to the Roll-Out Plan 150% 104 Similar to the STI, no PSU was granted due to the impact of COVID-19 and the performance of the company. The company goals relate to: • Revenues: Revenues are de ned as total reve- nues as per the nancial statements • EBITDA margin • Development and implementation of ESG strategy The overall PSU vesting is subject to meeting the ESG target. In case the ESG target will not be met, no PSU’s will vest irrespective of nancial performance. Similar to the STI, no performance share plan was granted due to the performance of the company. REPAID REMUNERATION The Supervisory Board had no reasons to believe that any compensation paid over the year 2022 should be repaid in whole or in part based upon the grounds as stipulated in article 2:383 Dutch Civil Code. PAY RATIO With a view to transparency and clarity, Ebusco calculated the internal pay ratios based on the remuneration included in the consolidated nancial statements. Ebusco’s CEO pay ratio is calculated as the total CEO remuneration divided by the average remuneration of all employees, excluding the remu- neration of Management Board members. The same calculation has been used for the pay ratio of the CFO and COO. For the purposes of this calculation, all remuneration elements are included in the total remuneration for the CEO based on the information provided in note 7.1 - Remuneration Key Manage- ment. Average employee remuneration is based on total employee bene t expenses excluding tempo- rary employees and excluding bene t expenses of the Management Board and Supervisory Board as disclosed in note 7 - Employee bene ts expense, and the total average number of employees in FTEs as also disclosed in note 7, Employee bene ts expense. HISTORIC PERSPECTIVE The following table summarises the remuneration of the members of the Management Board and accom- panying pay ratios in previous years and the change from 2021 to 2022 (in absolute numbers and in percentages): The change in the CFO’s remuneration from 2021 to 2022 relates to a success fee upon completion of the IPO in October 2021 for an amount of €5.0 million. Ebusco’s calculated CEO pay ratio in 2022 was 7.2 (2021: 4.7). These internal pay ratios are closely monitored by the Remuneration Committee. Apart from the absence of STIs and LTIs in 2022, an important observation is that the company has a relatively young workforce, resulting in a relatively low median employee remuneration level. The increase in the pay ratio of the CEO from 4.7 in 2021 to 7.2 in 2022 is due to a new service agreement, effective as of 17 October 2021. This service agree- ment includes a xed base salary of €387,000. The prior service agreement included a management fee of €20,000 per month. Change YoY 2022 2021 in EUR in % 2020 2019 Remuneration Management Board (in EUR) Total remuneration CEO 459,996 286,602 173,394 60.5% 281,689 240,000 Total remuneration CFO 338,000 5,315,497 (4,977,497) (93.6%) 316,477 215,000 Total remuneration COO 336,260 212,546 123,714 58.2% 0 0 Ebusco performance (all in EUR millions) Revenue 111.6 24.3 87.3 359.3% 100.0 48.9 Underlying EBITDA (34.8) (20.5) (14.3) (69.8%) 27.1 8.8 Free Cash Flow (107.5) (25.6) (84.9) (331.6%) (15.9) (5.5) Pay ratio Pay ratio CEO 7.2 4.7 2.5 53.2% 4.6 3.9 Average total remuneration Ebusco employees 63,720 60,452 2,609 4.3% 60,868 61,072 ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION REMUNERATION MANAGEMENT BOARD IN 2023 The base salary remuneration of the members of the Management Board will be increased by 6% for the 2023 nancial year, which is in line with the salary development within the company. With regard to the variable remuneration components, targets will be set for the STI as well as the LTI which may be granted in 2023 pending performance. SUPERVISORY BOARD REMUNERATION 2022 The remuneration of Supervisory Board members consists of xed annual fees for their role as Super- visory Board members. In addition, the chair and members of the Nomination Committee, Audit Committee and Remuneration Committee receive a xed annual fee for these roles. Ebusco does not grant variable remuneration, shares or options to members of the Supervisory Board. Ebusco pays company-related travel and accommodation expenses related to meetings. The remuneration policy of Supervisory Board members is considered market conform. ANNUAL FEES PER FUNCTION IN THE SUPERVISORY BOARD Function Remuneration Chair €50,000 Member €40,000 ANNUAL FEES PER FUNCTION IN SUPERVISORY BOARD COMMITTEES Function Remuneration Audit Committee - Chair €10,000 Audit Committee - Member €7,000 Nomination Committee - Chair €7,000 Nomination Committee - Member €4,000 Remuneration Committee – Chair €7,000 Remuneration Committee - Member €4,000 FEES OF SUPERVISORY BOARD MEMBERS AS RECOGNIZED BY THE COMPANY Function 2022 2021 Derk Haank €58,000 €14,500 Carin Gorter €50,000 €12,500 Jeroen Drost €47,000 €11,750 Roelf de Boer €47,000 €11,750 Ruud Spoor €47,000 €11,750 TOTAL €249,000 €62,250 * Comparable gures in absence of a Supervisory Board prior to listing on Euronext. The fee quoted excludes reimbursement of costs. Remuneration in the nancial year 2021 is limited to the fourth quarter. OTHER INFORMATION TOTAL REMUNERATION The total annual remuneration for the members of the Management Board and Supervisory Board as recognized by the company during 2022 amounts to €1,383,056 (2021: €5,876,894). OTHER ARRANGEMENTS No remuneration has been granted and allocated by subsidiaries or other companies whose nancials are consolidated by Ebusco, since all members of the Management Board and Supervisory Board are paid directly by Ebusco Holding N.V. No (personal) loans have been granted to the members of the Management Board and the Super- visory Board and no advance payments or guaran- tees have been provided to any of the members of the Management Board and Supervisory Board. No severance payments were granted to members of the Management Board and the Supervisory Board in 2022 and no variable remuneration has been clawed-back. 105 ANNUAL REPORT EBUSCO 2021 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 106 FINANCIAL STATEMENTS CONTENT Consolidated statement of profit or loss and other comprehensive income 107 Consolidated statement of financial position 108 Consolidated statement of changes in equity 109 Consolidated statement of cash flows 110 Notes to the consolidated financial statements 111 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 107 CONSOLIDATED STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME In thousands of euro, unless stated otherwise Notes 2022 2021 Revenue 6.1 111,617 24,265 Cost of materials 6.2 (95,984) (23,045) Employee benefit expenses 7 (35,525) (23,106) Amortisation and depreciation expenses 12, 13, 22 (5,627) (5,331) Other operating expenses 8 (14,916) (12,354) Operating expenses (152,052) (63,836) Operating result (40,435) (39,571) Finance expenses, net 9 (1,060) (4,240) Share of result of an associate 14 (432) 7,427 Result before tax (41,927) (36,384) Income tax credit/(expense) 10 9,734 9,587 Result for the year (32,193) (26,797) Result for the year attributable to: Equity holders of the Group (31,717) (26,388) Non-controlling interests (476) (409) Result for the year (32,193) (26,797) Other comprehensive income Other comprehensive income that may be reclassified to profit or loss in subsequent periods Exchange differences on translation of foreign operations 20 (6) Net gain/(loss) on cash flow hedges 1,158 1,444 Tax effect of changes in cash flow hedges (299) (361) Net change in costs of hedging - 40 Tax effect of changes in cost of hedging - (10) Other comprehensive income/(loss) 879 1,107 Total comprehensive income/(loss) for the year (31,314) (25,690) Total comprehensive income/(loss) for the year attributable to: Equity holders of the Group (30,838) (25,281) Non-controlling interests (476) (409) Basic earnings per share (in euros) for result attributable to shareholders of the Group 11 (0.54) (0.56) Diluted earnings per share (in euros) for result attributable to shareholders of the Group 11 (0.54) (0.56) Notes 2022 2021 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 108 CONSOLIDATED STATEMENT OF FINANCIAL POSITION In thousands of euro Notes As at 31 December 2022 As at 31 December 2021 Assets Non-current assets Property, plant and equipment 12 10,454 6,978 Right-of-use assets 22 7,255 8,046 Intangible assets 13 47,595 46,199 Deferred tax assets 10 16,365 7,139 Investments in associates 5, 14 1,068 - Non-current financial assets 15 9 205 82,746 68,567 Current assets Inventories 16 47,442 22,330 Trade receivables 17 25,913 16,598 Receivables from related parties 25 - 24 Contract assets 6 62,971 13,450 Other current assets 18 6,332 3,823 Cash and cash equivalents 19 95,212 207,923 237,870 264,148 Total assets 320,616 332,715 Equity Share capital 590 590 Share premium 315,324 314,767 Reserves 16,334 9,207 Retained earnings (58,251) (20,553) Equity attributable to equity holders of the Group 20.1 273,997 304,011 Non-controlling interests 20.2 (539) (63) Total Equity 20 273,458 303,948 Liabilities Non-current liabilities Loans and borrowings 21 - 463 Provisions 23 147 - Non-current lease liabilities 22 6,298 7,250 6,445 7,713 Current liabilities Loans and borrowings 21 486 215 Provisions 23 777 1,130 Trade payables 24 21,115 10,883 Payables to related parties 25 - 534 Contract liabilities 6 8,912 174 Other current liabilities 24 7,955 6,977 Current lease liabilities 22 1,463 1,132 Income tax payable 10 5 9 40,713 21,054 Total liabilities 47,158 28,767 Total equity and liabilities 320,616 332,715 Notes As at 31 December 2022 As at 31 December 2021 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 109 CONSOLIDATED STATEMENT OF CHANGES IN EQUITY In thousands of euro Equity attributable to Equity holders of the Group Non-controlling interests Total Equity Notes Share capital Share premium Translation reserve Cash flow hedge reserve Cost of hedging reserve Other reserve Retained Earnings Total Equity attributable to Equity holders of the Group Balance as at 1 January 2021 24 12,630 - (430) (24) 3,358 12,484 28,042 - 28,042 Result for the year - - - - - - (26,388) (26,388) (409) (26,797) Other comprehensive income 10, 28 - - (6) 1,083 30 - - 1,107 - 1,107 Total comprehensive income for the year - - (6) 1,083 30 - (26,388) (25,281) (409) (25,690) Shares issued 20 566 322,365 - - - - - 322,931 - 322,931 Share issuance expenses 20 - (7,422) - - - - - (7,422) - (7,422) Repayment convertible loan 20 - - - - - - (800) (800) - (800) Transfer to/from legal reserve 20 - - - - - 5,849 (5,849) - - - Transfer of cash flow hedge reserve 28 - - - (653) - - - (653) - (653) Acquisition of 60% share in associate 5 - - - - - - - - 7,536 7,536 Acquisition of 20% non-controlling interest 5 - (12,806) - - - - - (12,806) (7,190) (19,996) Balance as at 31 December 2021 590 314,767 (6) - 6 9,207 (20,553) 304,011 (63) 303,948 Balance as at 1 January 2022 590 314,767 (6) - 6 9,207 (20,553) 304,011 (63) 303,948 Result for the year - - - - - - (31,717) (31,717) (476) (32,193) Other comprehensive income 20 - - 20 859 - - - 879 - 879 Total comprehensive income for the year 20 - - 20 859 - - (31,717) (30,838) (476) (31,314) Share issuance expenses 20 - 557 - - - - - 557 - 557 Share based payment expenses 7 - - - - - 166 - 166 - 166 Transfer to/from legal reserve 20 - - - - - 5,981 (5,981) - - - Transfer of cash flow hedge reserve 28 - - - 107 (6) - - 101 - 101 Balance as at 31 December 2022 590 315,324 14 966 - 15,354 (58,251) 273,997 (539) 273,458 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 110 CONSOLIDATED STATEMENT OF CASH FLOWS Cash flows from investment activities Investments in property, plant and equipment 12 (5,513) (4,137) Proceeds from sale of property, plant and equipment 12 - 1 Investments in intangible assets 13 (1,483) (795) Investments in financial assets 15 - (9) Investments in subsidiaries 5 - (22,344) Investment in associates 14 (1,500) - Net cash flows from investment activities (8,496) (27,284) Cash flows from financing activities Acquisition of non-controlling interest 5 - (19,996) Net proceeds from issuance of share capital 20 (2,136) 316,118 Repayment of convertible loan 21 - (800) Repayments of borrowings 21 (748) (105,517) Proceeds from borrowings 21 - 41,500 Payment of principal portion of lease liabilities 22 (1,472) (1,244) Interest received 9 241 - Interest paid 9 (1,057) (2,327) Net cash flows from financing activities (5,172) 227,734 (Decrease)/Increase in cash and cash equivalents (112,726) 181,060 Exchange losses/gains on cash, cash equivalents and bank overdrafts 9 15 1 Cash and cash equivalents at 1 January 19 207,923 26,862 Cash and cash equivalents at 31 December 19 95,212 207,923 * The cash outflow in 2022 relates to the expenses paid in 2022 in relation to the issuance of share capital in 2021. In thousands of euro Notes 2022 2021 Notes 2022 2021 Cash flows from operating activities Profit/(Loss) before tax (41,927) (36,384) Non-cash adjustments: Depreciation of property, plant and equipment and right-of-use assets 12, 22 3,770 2,787 Amortisation of intangible assets 13 1,857 2,544 Share based payment expenses 7 166 - Net loss on derivative instruments at fair value through profit or loss 28 394 - Gain/(Loss) on disposal of property, plant and equipment 12 - (1) Additions to/(release from) provisions 23 697 3,935 Finance expenses, net 9 1,060 4,240 Share of results of an associate 14 432 (7,427) Movements in working capital: Inventories 16 (25,112) (18,690) Receivables and other financial assets 15, 17, 18 (10,695) (17,595) Contract assets/liabilities 6 (40,783) 46,809 Payables and other current liabilities 24 12,014 3,796 Cash generated from operations (98,127) (15,986) Payment from provisions 23 (903) (2,946) Income tax paid 10 (28) (458) Net cash flows from operating activities (99,058) (19,390) ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 111 NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS 1. CORPORATE INFORMATION Ebusco Holding N.V. is a public limited Company under Dutch law, incorporated and domiciled in the Netherlands and registered at the Chamber of Commerce in the Netherlands under number 75407922. Ebusco Holding N.V. is the ultimate parent company of the group of legal entities (together, “the Group”) and is listed on Euronext Amsterdam. The Group is a developer, manufacturer and distributor of zero emission buses and charging systems, as well as a supplier of ancillary services to the electric vehicle ecosystem and manufacturer and supplier of Energy Storage Systems (ESS) and Mobile Energy Containers (MEC). The Group has its headquarters and registered office located at Vuurijzer 23, 5753 SV Deurne, The Netherlands. 2. DEVELOPMENTS DURING THE YEAR IMPACTING THE GROUP WAR IN UKRAINE The geopolitical situation in Eastern Europe intensified on 24 February 2022, with Russia’s invasion of Ukraine. The war between the two countries continues to evolve as military activity proceeds and additional sanctions are imposed. In addition to the human toll and impact of the events on entities that have operations in Russia, Ukraine, or neighboring countries (e.g., Belarus) or that conduct business with their counterparties, the war is increasingly affecting economic and global financial markets and exacerbating ongoing economic challenges, including issues such as rising inflation and global supply-chain disruption. The impact for the Group is limited to the ongoing global economic challenges, as there are no activities in Eastern Europe. The Group is not immune to the geopolitical uncertainty and the continued strain on the glob- al supply chain. Uncertainty in the supply chain continues and the Group have to cope with delayed deliveries and higher costs. The Group is closely following these developments and taking actions where required. COVID-19 IMPACT ON BUSINESS The Covid-19 pandemic has impacted economic, government and social activity across the world since early 2020. In response to the pandemic, government regulations aimed at shifting social behaviours to limit or close non-essential transportation, business activities, government functions and person-to-person interac- tions, resulting in employees working from home. In some instances where these restrictions have been eased, governments followed with actual or contemplated returns to stringent restrictions on gatherings or commerce or with reduced forms of restrictions that limited transportation, business activities and other person-to-per- son interactions. These trends resulted in limited demand for public transport, which in turn resulted in a reduced amount of income generated by Public Transport Authorities (PTAs) and Public Transport Operators (PTOs) who responded by offering fewer requests for tenders, bids or quotations for new buses in 2020 and the first half of 2021. The effect had been compounded by further supply chain disruptions that reflected reduced production capacity at certain suppliers of the Group which scaled back production in response to Covid-19. As a result, the Group experienced further delays in bus production and shipments in 2021 and compared to 2020, revenue was down by approximately 76% in 2021. From the second half of 2021, the order book has strengthened and the Group has seen a sharp increase in order intake, tender activity and shipments and deliveries in 2022. As a result, revenue showed a strong recovery to €111.6 million, an increase of 360%, in 2022. The Group has in the past and continues to experience supply chain disruptions and supply shortages as a result of the prolonged Covid-19 pandemic, in combination with the war in Ukraine. The Company is taking pro-active steps to manage the risk of further impact from the supply chain disruptions by building its safety stock, shipping components by air rather than sea (where this is an option and cost effective), designing alter- native replacement parts, installing certain components at its headquarters in Deurne instead of its third-party assembly partner in China and by using exchange parts. The Group has also invested significant time and effort in further optimising the supply chain with a strong focus on identifying dual suppliers to lower risks and scale advantages to lower cost of goods sold. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 112 The Group continues to closely monitor the development of the Covid-19 outbreak by analyzing the risks which the effects of the pandemic imposes for its financial results, position and cash flows and implementing miti- gating actions promptly. 3. SIGNIFICANT ACCOUNTING POLICIES 3.1 BASIS OF CONSOLIDATION The consolidated financial statements comprise the financial statements of the Parent and its subsidiaries (or ‘group companies’) as at 31 December 2022 with comparative information for the year ended 31 December 2021. Subsidiaries are fully consolidated from the date the Group acquires control and ceases when the Group loses control of the subsidiary. The Group controls an investee if, and only if, the Group has: • Power over the investee (i.e., existing rights that give it the current ability to direct the relevant activities of the investee); • Exposure, or rights, to variable returns from its involvement with the investee; • The ability to use its power over the investee to affect its returns. The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. All intra-group assets and liabilities, equity, income and expenses and cash flows relating to transactions between members of the Group are eliminated in full on consolidation. When the Group loses control over a subsidiary, it derecognises the related assets (including goodwill), liabilities, and other components of equity, while any resulting gain or loss is recognised in profit or loss. The following table provides an overview of the consolidated subsidiaries which the Parent controls as at 31 December: Entity Registered office Date of incorporation Ownership interest (%) 31 December 2022 Ownership interest (%) 31 December 2021 Ebusco B.V. Deurne, Netherlands 3 September 2012 100% 100% Ebusco Energy B.V. Deurne, Netherlands 18 July 2019 100% 100% Ebusco Manufacturing B.V. Deurne, Netherlands 15 July 2020 100% 100% Pondus Holding B.V. 1 Deurne, Netherlands 16 March 2017 - 100% Pondus Operations B.V. Deurne, Netherlands 16 March 2017 90% 90% Pondus R&D B.V. 2 Deurne, Netherlands 16 March 2017 - 100% Ebusco Deutschland GmbH Emmerich am Rhein, Germany 13 June 2016 100% 100% Ebusco Norway A/S Dal, Norway 2 February 2017 100% 100% Ebusco Australia Pty Ltd Tasmania, Australia 18 July 2019 100% 100% Ebusco France SAS Paris, France 9 November 2020 100% 100% Ebusco North America LLC Delaware, United States 19 August 2021 100% 100% Ebusco New Energy (Xiamen) Co Ltd Xiamen, China 17 September 2021 100% 100% Gr8 Technologies B.V. 3 Amsterdam, Netherlands 1 December 2017 - 100% Ebusco Canada Inc. Toronto, Canada February 9, 2022 100% - Ebusco Sweden AB Göteborg, Sweden March 8, 2022 100% - Ebusco Denmark ApS Kopenhagen, Denmark April 7, 2022 100% - Ebusco Italy S.r.l. Turin, Italy June 20, 2022 100% - Ebusco Spain SL Barcelona, Spain August 18, 2022 100% - 1 Pondus Holding B.V. (disappearing entity) merged with Ebusco B.V. per 28 December 2022 2 Pondus R&D B.V. (disappearing entity) merged with Pondus Holding B.V. per 27 December 2022 3 Gr8 Technologies B.V. is liquidated per 6 July 2022 3.2. BASIS OF PREPARATION The consolidated financial statements of the Group have been prepared in accordance with International Fi- nancial Reporting Standards (IFRS) as issued by the International Accounting Standards Board (IASB) and en- dorsed by the European Union (EU) and with the statutory provisions of Part 9, Book 2 of the Dutch Civil Code. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 113 The financial statements were signed and authorised for issuance by the Supervisory Board and Management Board on 29 March 2023 and will be submitted for adoption to the General Meeting of Shareholders on 17 May 2023. The consolidated financial statements have been prepared on a historical cost basis, except when otherwise indicated. All amounts are stated in thousands of EUR, unless otherwise stated. The consolidated financial statements are prepared on a going concern basis. 3.3 SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES FUNCTIONAL AND PRESENTATION CURRENCY The Group’s consolidated financial statements are presented in euros, which is also the Parent’s functional currency. The financial statements of entities that have a functional currency different from that of the Parent (“foreign operations”) are translated into euros as follows: Group companies: • Foreign currency differences resulting from translation of subsidiaries are recognised in other comprehen- sive income. Transactions and balances: • Assets, equity and liabilities - at the closing rate at the date of the statement of financial position. • Income and expenses - at the average rate of the period (as this is considered a reasonable approximation of the actual rates prevailing at the transaction dates). CURRENT VERSUS NON-CURRENT CLASSIFICATION The Group presents assets and liabilities in the statement of financial position based on current/non-current classification. An asset is current when it is: • Expected to be realised or intended to be sold or consumed in the normal operating cycle • Held primarily for the purpose of trading • Expected to be realised within twelve months after the reporting period Or • Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period A liability is current when: • It is expected to be settled in the normal operating cycle • It is held primarily for the purpose of trading • It is due to be settled within twelve months after the reporting period Or • There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period Deferred tax assets and liabilities are classified as non-current assets and liabilities. FINANCIAL INSTRUMENTS AND FAIR VALUE This section relates to all financial assets and financial liabilities of the Group, including financial instruments associated with the Group’s hedge accounting. FAIR VALUE Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly trans- action between market participants at the measurement date. The fair value measurement is based on the presumption that the transaction to sell the asset or transfer the liability takes place either in the principal market for the asset or liability or, in the absence of a principal market, in the most advantageous market for the asset or liability. The principal or the most advantageous market must be accessible by the Group. The fair value of an asset or a liability is measured using the assumptions that market participants would use when pricing the asset or liability, assuming that market participants act in their economic best interest. A fair value measurement of a non-financial asset takes into account a market participant’s ability to generate ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 114 economic benefits by using the asset in its highest and best use or by selling it to another market participant that would use the asset in its highest and best use. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value, maximising the use of relevant observable inputs and minimising the use of unobservable inputs. All assets and liabilities for which fair value is measured or disclosed in the financial statements are catego- rised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: • Level 1 - Quoted (unadjusted) market prices in active markets for identical assets or liabilities; • Level 2 - Valuation techniques for which the lowest level input that is significant to the fair value measure- ment is directly or indirectly observable; • Level 3 - Valuation techniques for which the lowest level input that is significant to the fair value measure- ment is unobservable. For assets and liabilities that are recognised in the financial statements at fair value on a recurring basis, the Group determines whether transfers have occurred between levels in the hierarchy by re-assessing categori- sation (based on the lowest level input that is significant to the fair value measurement as a whole) at the end of each reporting period. FINANCIAL INSTRUMENTS A financial instrument is any contract that gives rise to a financial asset of one entity and a financial liability or equity instrument of another entity. Derivatives held by the Group are classified and recorded at fair value. All other financial instruments on the balance sheet are classified and recorded at (amortised) cost. Other financial assets are initially measured at fair value plus transaction costs and subsequently at amortised cost less impairments based on the expected credit loss (“ECL”) approach. Fair value of trade receivables and cash and cash equivalents approximates the carrying amount due to the short duration. Other financial liabilities are initially measured at fair value less transaction costs and subsequently at amortised cost. Fair value of current financial liabilities approximates the carrying amount due to the short duration. CLASSIFICATION The Group classifies its financial instruments either at: • Fair value through profit or loss (“FVPL”); or • Amortised cost. The classification of financial assets is dependent on the business model of the contractual terms of the cash flows and the terms and conditions of the financial assets. Gains and losses on financial assets classified and subsequently measured at FVPL shall be recorded in the profit or loss. MEASUREMENT The Group measures financial assets at initial recognition at fair value plus transaction costs. The transaction costs of financial assets classified at FVPL are expensed in profit or loss at initial recognition. DEBT INSTRUMENTS Subsequent measurement of debt instruments depends on the classification of the debt instruments by the Group. The Group measures its debt instruments as follows: • Amortised cost: Interest income from these financial assets is included in finance income using the effec- tive interest rate method. • FVPL: A gain or loss is subsequently measured at FVPL and gains or losses are recognised in profit or loss and presented net within other gains and losses for the period in which it arises. FINANCIAL LIABILITIES – NOT DERIVATIVES The Group measures its financial liabilities at amortised cost. IMPAIRMENT The Group assesses on a forward-looking basis the ECL associated with its debt instruments carried at amor- tised cost. The Group implements one ECL approach for financial assets (the simplified ECL approach). The Group applies the simplified ECL approach to qualifying trade receivables, IFRS 15 contract assets and lease receivables. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 115 The Group determines its expected credit losses on trade receivables based on the historical weighted aver- age credit losses on trade receivables that the Group holds, while incorporating any known information which could affect credit losses in the future. These weights are based on the duration of the trade receivables (current number of days outstanding). The Group will use the historical default information of trade debtors in order to attempt to have an unbiased probability weighted amount of the expected credit losses. Expected credit losses are calculated by multiplying the probability of default based on historical data, loss given de- fault and the current lifetime of the trade receivable. This leads to a weighted ECL based on debtors with an outstanding receivable of: • 1-30 days • 31-60 days • 61-90 days • Longer than 90 days This practical application of the lifetime ECL on trade receivables is labeled as the provision matrix by the Group. The provision matrix is used to form the provision for bad debtors and thus impair trade receivables. OFFSETTING OF FINANCIAL INSTRUMENTS Financial assets and financial liabilities are offset and the net amount is reported in the consolidated state- ment of financial position if there is a currently enforceable legal right to offset the recognised amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously. REVENUE REVENUE FROM CONTRACTS WITH CUSTOMERS In determination of its recognition of revenue, the Group applies the 5-step model in line with IFRS 15. Revenue is recognised if the Group has entered into a contract with a customer in which the performance obligations can be identified, the terms of the transaction are clear, and it is probable that the customer will pay. Revenue is recognised for each contract. If a contract involves several performance obligations, revenue is separately attributed to the performance obligations based on relative stand-alone selling prices. Revenue is recognised over time if the customer simultaneously receives and consumes the benefit of the Group’s performance or if the Group produces an asset without alternative use which it is contractually obligated to deliver to the customer and for which the Group has an enforceable right to payment. Revenue is recognised at a point in time if it does not meet the criteria to be satisfied over time. The Group does not have any contracts with material variable consideration. If a contract contains a significant financing component, the Group adjusts the revenue accordingly. This is not done if the time between the fulfilment of the performance obligation and the payment of the consider- ation is less than one year. If the results from a contract cannot be determined reliably, contract revenue is only recognised to the extent of costs incurred. Expected contract losses are recognised immediately in the statement of profit or loss. In measuring the amount of provisions for losses, the Group proceeds on the basis of the economic benefits expected to be received compared with the attributable costs of the contract. The Group has two main types of revenue from contracts: 1. Contracts for the sale of zero emission buses: the Group sells zero emission buses and related charging systems customized for each customer. The Group negotiates with each customer according to the needs of the customer and charges a transaction price based on the type and number of buses ordered. Con- tracts are fulfilled, on average, within six to twelve months. Revenue for sales of zero emission buses is recognised over time as the Group produces a bus without an alternate use which the Group is contractually obligated to deliver and for which the Group has an enforceable right to payment. The revenue relating to work in progress is recognised in the statement of profit or loss based on percentage of completion of the project. The stage of completion is assessed by reference to the proportion of costs recorded in relation to the total expected costs to the extent that the costs incurred are representative of the progress made in the transfer of goods/services to the client. Inefficiencies are disregarded in determining the stage of completion. In-progress contracts are recorded as contract assets. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 116 2. Contracts for charging systems and ancillary services and goods: the Group also sells items and services in addition to its zero emission buses. These goods and services consist of additional parts for the Group’s buses or represent services, including repair and maintenance services, and service type warranty, which support the customer’s use of zero emission buses sold by the Group. Revenue is recognised either at a point in time or over time based on the nature of the good or service in accordance with the Group’s revenue recognition policy. Typically, spare parts and charging systems are recognised at a point in time whilst services are recognised over time. If applicable, service-type warranties are accounted for as separate per- formance obligations in accordance with IFRS 15 and are recorded as contract liabilities (as appropriate) and recognised as the Group performs its obligation. The accounting policies regarding trade receivables, contract assets, and contract liabilities are set out in the corresponding notes (refer to Note 15 for trade receivables and below for contract assets and liabilities). TRANSACTION PRICE AND STAND-ALONE SELLING PRICES Transaction prices are determined per individual contract, based on goods and services ordered by each customer. Payment terms vary per contract. The performance obligation that significantly affects the de- termination of the transaction price is the supply of zero-emission buses. Progress is measured using an input method. The Group measures the progress for the projects based on the input costs consisting of the cost of materials and other costs. The Group assessed that the input method used based on costs incurred to measure its progress towards completion reflects proportionately the Group’s progress in satisfying the performance obligation and is a fair reflection of the Group’s performance. CONTRACT ASSETS AND CONTRACT LIABILITIES The Group recognises a contract asset for services or goods transferred to a customer to which the Group has a right to receive consideration. The Group reclassifies contract assets to trade receivables when perfor- mance obligations are satisfied and the right to consideration becomes unconditional. The Group recognises a contract liability when a payment is received from a customer or is due before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs its obligations. Contract assets and receivables generally have a term of less than 12 months. SEGMENT REPORTING An operating segment is a component of an entity that engages in business activities from which it may earn revenues and incur expenses. The operating results of each segment are regularly reviewed by the entity’s Chief Operating Decision Maker (“CODM”) in order to make decisions about resources to be allocated to the segment and assess its performance and for which discrete financial information is available. The Group re- ports separate information about an operating segment if the reported revenue, profit or loss or assets exceed 10 per cent of the total of the Group, or if the Management Board believes that information about the segment would be useful to the users of the financial statements. EMPLOYEE BENEFIT EXPENSES Employee benefits are all forms of consideration given by the Group in exchange for services rendered by employees or for the termination of employment. Short-term employee benefits are employee benefits (other than termination benefits) that are expected to be settled wholly before twelve months after the end of the annual reporting period in which the employees rendered the related service. Post-employment benefits are employee benefits (other than termination benefits and short-term employee benefits) that are payable after the completion of employment. GOVERNMENT GRANTS Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. When the grant relates to an expense item, it is recognised as income on a systematic basis over the periods that the related costs, for which it is intended to compensate, are expensed. SHARE-BASED PAYMENTS Equity-settled share-based payments to employees are measured at the fair value of the equity instruments at the grant date. The fair value is included in employee benefit expenses in the vesting period during which the expected employee services are received. The same amount is credited to shareholders’ equity. The cu- mulative expenses recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 117 Ebusco has opted to recognise the increase in equity as a result of the equity-settled share-based payment transactions in other capital reserves. Service conditions are not taken into account when determining the grant date fair value of awards, but the likelihood of the conditions being met is assessed as part of the Group’s best estimate of the number of eq- uity instruments that will ultimately vest. No expenses are recognised for awards that ultimately do not vest because service conditions have not been met. PENSIONS The Group has a defined contribution plan (which is capped at an annual pensionable salary of €115). For the defined contribution plan, the group pays contributions to a public or privately administered pension in- surance plan on a mandatory or contractual basis. The Group has no legal or constructive obligations to pay additional contribution if the fund does not hold sufficient assets to pay all employees the benefits relating to the employee service in the current and prior periods. The contribution is recognised as employee benefit expense when it is due. Prepaid contribution is recognised as an asset to the extent that a cash refund or a reduction in the future payments is available and can be contractually enforced. OTHER OPERATING EXPENSES Other operating expenses are recorded on a historical basis and allocated to the reporting period when they occur. FINANCE (INCOME)/EXPENSE The costs are determined on a historical basis and allocated to the reporting period when they occur. INCOME TAX CURRENT INCOME TAX Current tax is the expected tax payable/receivable on the taxable income or loss for the year, using applica- ble tax rates at the end of the reporting period, and any adjustment to tax payable/receivable in respect of previous years. DEFERRED INCOME TAX Deferred tax is recognised in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of tax- able temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans for individual subsidiaries in the Group. 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; such reductions are re- versed when the probability of future taxable profits improves. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they reverse, using tax rates enacted or substantively enacted at the reporting date, and reflects uncertainty re- lated to income taxes, if any. The measurement of deferred tax reflects the tax consequences that would follow from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered. EARNINGS PER SHARE The Group presents basic and diluted earnings per share (EPS) data for its ordinary shares. The calculation for the earnings per share is as follows: • Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 118 • Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares. PROPERTY, PLANT AND EQUIPMENT All items of property, plant and equipment (“PPE”) are stated at historical cost less accumulated depreciation and any accumulated impairment losses. Items of PPE are depreciated over their useful life on a straight-line basis. Any change in the useful life and depreciation period shall be accounted for as a change in accounting estimates. PPE is tested for impairment whenever events or changes in circumstances occur indicating that the carrying amount may not be recoverable. PPE includes equipment and office inventory, transportation and assets under construction. The estimated use - ful life of the aforementioned PPE is between 3 and 5 years. Assets under construction refer to assets which are not available for use yet and therefore not depreciated. For right-of-use assets reference is made to the accounting policy of Leases. INTANGIBLE ASSETS The intangible assets for the Group consist of goodwill, development assets, software and assets under con- struction. BUSINESS COMBINATIONS AND GOODWILL Goodwill represents amounts arising on acquisition of subsidiaries. All business combinations are accounted for by applying the acquisition method as at the acquisition date. Goodwill is measured as the difference between: • the aggregate of the (a) the value of the consideration transferred (generally at fair value), (b) the amount of any non-controlling interest (at fair value) and (c) in a business combination achieved in stages, the acquisition-date fair value of the acquirer’s previously held equity interest in the acquiree, and • the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Goodwill is stated at cost less any accumulated impairment losses. Goodwill is allocated to cash-generating units and is not amortised but tested annually for impairment. DEVELOPMENT ASSETS Development assets are internally generated intangible assets. The costs capitalised consist of salaries, ma- terials and services directly attributable to the development activities. Development expenditures on an individual project are recognised as an intangible asset when the Group can demonstrate: • The technical feasibility of completing the intangible asset so that the asset will be available for use or sale • Its intention to complete and its ability and intention to use or sell the asset • How the asset will generate future economic benefits • The availability of resources to complete the asset • The ability to measure reliably the expenditure during development Following initial recognition of the development expenditure as an asset, the asset is carried at cost less any accumulated amortisation and accumulated impairment losses. Amortisation of the asset begins when development is complete and the asset is available for use. It is amortised over the period of expected future benefit. During the period of development, the asset is tested for impairment annually. Impairment assess- ments have been performed and no indications of impairment have been identified. Research costs are expensed as incurred. AMORTISATION AND IMPAIRMENT TESTING Goodwill is subject to annual impairment testing, irrespective of whether indications of impairment exist. Goodwill allocated to a cash-generating unit (“CGU) is impaired when its carrying amount of the cash-gener- ating unit exceeds the recoverable amount. The recoverable amount is, in turn, defined as the higher of the fair value less cost of disposal and the value in use; where the value in use is the present value of the future cash flows. In the value in use modelestimates of future cash flows shall only include projections of cash inflows from the continuing use of the asset. The fair value less cost of disposal shall be determined in accor- dance with the fair value accounting policy. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 119 Intangible assets with finite lives are amortised over the useful economic life on a straight-line basis and as- sessed for impairment whenever there is an indication that the intangible asset may be impaired. The amorti- sation period and the amortisation method for an intangible asset with a finite useful life are reviewed at least at the end of each reporting period. The intangible assets are amortised over a period of 3-5 years. Changes in the expected useful life or the expected pattern of consumption of future economic benefits embodied in the asset are considered to modify the amortisation period or method, as appropriate, and are treated as changes in accounting estimates. The amortisation expense on intangible assets with finite lives is recognised in the statement of profit or loss. INVESTMENT IN ASSOCIATES ASSOCIATES Associates are all entities over which the group has significant influence but not control or joint control. This is generally the case where the group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of accounting (see below), after initially being recognised at cost. On acquisition of the investment, any difference between the cost of the investment and the entity’s share of the net fair value of the investee’s identifiable assets and liabilities is accounted for as follows: (a) Goodwill relating to an associate or a joint venture is included in the carrying amount of the investment. (b) Any excess of the entity’s share of the net fair value of the investee’s identifiable assets and liabilities over the cost of the investment is included as income in the determination of the entity’s share of the associate or joint venture’s profit or loss in the period in which the investment is acquired. EQUITY METHOD Under the equity method of accounting, the investments are initially recognised at cost and adjusted there- after to recognise the group’s share of the post-acquisition profits or losses of the investee in profit or loss, and the group’s share of movements in other comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates and joint ventures are recognised as a reduction in the carrying amount of the investment. Where the group’s share of losses in an equity-accounted investment equals or exceeds its interest in the en- tity, including any other unsecured long-term receivables, the group does not recognise further losses, unless it has incurred obligations or made payments on behalf of the other entity. Unrealised gains on transactions between the group and its associates and joint ventures are eliminated to the extent of the group’s interest in these entities. Unrealised losses are also eliminated unless the transac- tion provides evidence of an impairment of the asset transferred. Accounting policies of equity-accounted investees have been changed where necessary to ensure consistency with the policies adopted by the group. The carrying amount of equity-accounted investments is subject to impairment testing. After application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associate or joint venture. At each reporting date, the Group determines whether there is objective evidence that the investment in the associate or joint venture is impaired. If there is such evidence, the Group calculates the amount of impairment as the difference between the recoverable amount of the associate or joint venture and its carrying value, and then recognises the loss within ‘Share of profit of an associate and a joint venture’ in the statement of profit or loss. NON-CURRENT FINANCIAL ASSETS Financial assets are initially recognised at fair value and subsequently measured at amortised cost less im- pairments based on the general expected credit loss approach. The Group’s financial assets consist of long- term deposits. INVENTORIES Inventories are the assets sold in the ordinary course of business. Inventories are measured at the lower of cost and net realisable value. The cost price of the inventory is determined based on the weighted average purchase price method. Net realisable value is the estimated selling price in the ordinary course of business, less estimated costs of completion and the estimated costs necessary to make the sale. TRADE RECEIVABLES Trade receivables are classified at amortised cost, initially recognised at transaction price and subsequently measured at amortised cost less impairments based on the simplified expected credit loss (ECL) approach for trade receivables that do not contain a significant financing component. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 120 Customer credit risk is managed by each business unit subject to the Group’s established policy, procedures and control relating to customer credit risk management. Credit quality of a customer is assessed based on individual credit limits which are defined in accordance with this assessment. Outstanding customer receiv- ables and contract assets are regularly reviewed. At 31 December 2022, the Group had 3 customers (2021: 6) that owed more than €500,000 each and which accounted for approximately 92% (2021: 94%) of all the receivables outstanding. There were 2 customers (2021: 3 customers) with balances greater than €1 million accounting for just over 88% (2021: 78%) of the total amounts of trade receivable. The Group applies the simplified expected credit loss approach using a provision matrix based on historic inputs to determine the expected losses. This approach takes into account forward looking information that might have an impact on the way the trade receivables will be settled in the future. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic condi- tions. Generally, trade receivables are written-off if past due for more than one year and which are not subject to enforcement activity. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Group evaluates the concentration of risk with respect to trade receivables and contract assets as low, given its customers profile. OTHER CURRENT FINANCIAL ASSETS Other receivables and accrued assets are initially recognised at fair value and subsequently measured at amortised cost less impairments based on the simplified expected credit loss approach. CASH AND CASH EQUIVALENTS The Group considers cash and cash equivalents the cash at bank and in hand, bank balances and deposits with terms of less than three months. Cash is classified at amortised cost, initially recognised at fair value and subsequently measured at amor- tised cost less impairments based on the general ECL approach. IMPAIRMENT OF NON-FINANCIAL ASSETS Further disclosures relating to impairment of non-financial assets are also provided in the following accounting policies: • Property, plant and equipment • Intangible assets, including goodwill • Right-of-use-assets • Significant accounting judgements, estimates and assumptions (note 4) The Group assesses, at each reporting date, whether there is an indication that an asset may be impaired. If any indication exists, or when annual impairment testing for an asset is required, the Group estimates the asset’s recoverable amount. An asset’s recoverable amount is the higher of an asset’s or CGU’s fair value less costs of disposal and its value in use. The recoverable amount is determined for an individual asset, unless the asset does not generate cash inflows that are largely independent of those from other assets or groups of assets. When the carrying amount of an asset or CGU exceeds its recoverable amount, the asset is considered impaired and is written down to its recoverable amount. In assessing value in use, the estimated future cash flows 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. In determining fair value less costs of disposal, recent market transactions are taken into ac- count. If no such transactions can be identified, an appropriate valuation model is used. These calculations are corroborated by valuation multiples, quoted share prices for publicly traded companies or other available fair value indicators. The Group bases its impairment calculation on most recent budgets and forecast calculations, which are pre- pared separately for each of the Group’s CGUs to which the individual assets are allocated. These budgets and forecast calculations generally cover a period of five years. A long-term growth rate is calculated and applied to project future cash flows after the fifth year. For assets excluding goodwill, an assessment is made at each reporting date to determine whether there is an indication that previously recognised impairment losses no longer exist or have decreased. If such indication exists, the Group estimates the asset’s or CGU’s recoverable amount. A previously recognised impairment ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 121 loss is reversed only if there has been a change in the assumptions used to determine the asset’s recoverable amount since the last impairment loss was recognised. The reversal is limited so that the carrying amount of the asset does not exceed its recoverable amount, nor exceed the carrying amount that would have been determined, net of depreciation, had no impairment loss been recognised for the asset in prior years. Such reversal is recognised in the statement of profit or loss unless the asset is carried at a revalued amount, in which case, the reversal is treated as a revaluation increase. The Group assesses where climate risks could have a significant impact, such as the introduction of emis- sion-reduction legislation that may increase manufacturing costs. Although the introduction of such legis- lation would also result in a higher demand for the Group, these risks in relation to climate-related matters would be included as key assumptions where they materially impact the measure of recoverable amount. These assumptions have been included in the cash flow forecasts in assessing value-in-use amounts. EQUITY Ordinary shares are classified as equity. Incremental costs directly attributable to the issuance of the ordinary shares are netted, net of tax, from the proceeds. The Group evaluates its equity instruments, including its preferred shares. Certain instruments contain as- pects which would require their classification as either liabilities or compound instruments which would con- tain both equity and liability components, including whether or not the Group has a contractual obligation to deliver cash or financial asset to another party. Equity classification is only appropriate if the Group has an unconditional right to avoid delivering cash or other financial instruments. NON-CURRENT FINANCIAL LIABILITIES (NON-DERIVATIVES) Financial liabilities (non-derivatives) are initially measured at fair value less transaction costs and subse- quently measured at amortised cost. LEASES (THE GROUP AS A LESSEE) The Group assesses whether a contract is or contains a lease at the inception of the contract to determine whether an asset is identifiable, and the lessee has control to direct its use, and receives all economic bene- fits related to the asset. The Group recognises a right-of-use asset (“ROU asset”) and a corresponding lease liability with respect to all lease arrangements in which it is a lessee. The lease liability is initially measured by calculating the present value of all future lease payments, discounted by the incremental borrowing rate. All future lease payments are fixed in nature with exception of yearly indexations. The interest on the lease liability for each period from the discount rate is recognised in the profit or loss statement for the year. At initial recognition, the ROU asset amounts to the initial lease liability adjusted for any initial direct costs or the expected costs for dismantling. In case of changes in the lease term or other conditions, the Group will reassess the discount rate and the remaining lease payments. The Group shall remeasure the carrying amount of the lease liability to reflect a reassessment or lease modification, using a revised discount rate, if any. ROU assets are depreciated on a straight-line basis over the shorter of the lease term and useful life and tested for impairment whenever events or changes in circumstances indicates that the carrying amount may not be recoverable. The main lease concerns a contract for office and manufacturing space in Deurne, the Netherlands with a lease term of 5 years ending 30 September 2023. This leas contains an extension period of 5 additional years which the Group has exercised. The Group also has lease contracts which consist of cars for company personnel with a lease term between 4 and 5 years. Interest on lease liability is recognised as an expense in the statement of profit or loss. PROVISIONS Provisions are recognised when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement. By nature, provisions include uncertainty and if the actual outcome differs froprovm the assumptions, the estimated provision will be revised, and this could have an effect on the financial position and results of the Group. PROVISION FOR WARRANTIES Provisions for warranties are recognised when: (a) the Group has a present legal or constructive obligation as a result of past events; (b) it is probable that an outflow of resources will be required to settle the obligation; and (c) the amount can be reliably estimated. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 122 Assurance-type warranties are not distinct within customer contracts. Service-type warranties are account- ed for as separate performance obligations in accordance with IFRS 15 and are recorded as contract liabilities (as appropriate) and recognised as the Group performs its obligation. Provisions related to assurance-type warranties are measured at the present value of the expenditures ex- pected to be required to settle the obligation using a pre-tax rate that reflects current market assessments of the time value of money and the risks specific to the obligation. CURRENT FINANCIAL LIABILITIES (NON-DERIVATIVES) The financial liabilities (non-derivatives) are initially measured at fair value and subsequently at amortised cost. The fair value of the current financial liabilities approximates the book value due to its short-term nature. RELATED PARTY TRANSACTIONS A related party is a person or an entity that is related to the reporting entity: • A person or a close member of that person’s family is related to the Group if that person has control, joint control, or significant influence over the Group or is a member of its key management personnel. • An entity is related to the Group if, among other circumstances, it is a parent, subsidiary, fellow subsidiary, associate, or joint venture of the Group, or it is controlled, jointly controlled, or significantly influenced or managed by a person who is a related party. A related party transaction is a transfer of resources, services or obligations between a reporting entity and a related party, regardless of whether a price is charged. The Group discloses the nature of the related party relationship as well as information about the transactions and outstanding balances necessary for understanding of the potential effect of the relationship on the fi- nancial statements. These disclosures are made separately for each category of related parties. Key management personnel are those persons having authority and responsibility for planning, directing, and controlling the activities of the Group, directly or indirectly, including any directors (whether executive or otherwise) of the Group. COMMITMENTS, CONTINGENT ASSETS AND LIABILITIES Contingent liabilities and assets do not meet the recognition criteria. The Group discloses a contingent liability if there is a possible obligation that arises from past evens and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events that are not wholly within the control of the Group. The liability is not recognized because it is not probable that a outflow of resources will take place to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability. When the possibility of an outflow of resources is remote, no contingent liability is disclosed. The Group discloses a contingent asset if there a possible asset that arises from past events and whose exis- tence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the Group. The asset is only disclosed when the possibility of an inflow of resources is probably. 3.4 NEW AND AMENDED IFRS ACCOUNTING STANDARDS THAT ARE EFFECTIVE FOR THE CURRENT YEAR In the current year, the Group has applied a number of amendments to existing IFRS standards that are man- datorily effective for an accounting period that begins on or after 1 January 2022. Their adoption has not had any material impact on the disclosures or on the amounts reported in these financial statements. • Amendments to IFRS 3 Reference to the Conceptual Framework; • Amendments to IAS 37 Onerous Contracts – Cost of Fulfilling a Contract; • Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use. The Group concluded that the amendments to the following existing IFRS standards do not have an impact: • Amendments to IFRS 1 First time adoption • Amendments to IFRS 9; Fees in 10 % test for derecognition • Amendments to IAS 41 Agriculture – Taxation in fair value measurements ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 123 3.5 NEW AND REVISED IFRS ACCOUNTING STANDARDS IN ISSUE BUT NOT YET EFFECTIVE The Group has not applied the following new and revised IFRS’s that have been issued, but are not yet effec- tive: • Amendments to IAS 1 Presentation of Financial Statements: Classification of Liabilities as Current or Non-current and Classification of Liabilities as Current or Non-current - Deferral of Effective Date (applica- ble for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU); • Amendments to IAS 8 Accounting policies, Changes in Accounting Estimates and Errors: Definition of Ac- counting Estimates (applicable for annual periods beginning on or after 1 January 2023, but not yet endor- sed in the EU); • Disclosure of Accounting Policies - Amendments to IAS 1 and IFRS Practice Statement 2: Making Materiality Judgements (applicable for annual periods beginning on or after 1 January 2023); • Amendments to IAS 12 Income Taxes: Deferred Tax related to Assets and Liabilities arising from a Single Transaction (applicable for annual periods beginning on or after 1 January 2023, but not yet endorsed in the EU); • The IFRS 17 Insurance Contracts standard (applicable for annual periods beginning on or after 1 January 2023), is not relevant to the Group and therefore will not be detailed further in these financial statements. The impact of the adoption of the above new standards is still being determined, but not expected to be ma- terial on the consolidated financial statements. The Group plans to adopt these standards on their respective dates. 4. SIGNIFICANT ACCOUNTING JUDGEMENTS, ESTIMATES AND ASSUMPTIONS Below is a summary of the Group’s significant accounting judgements, estimates, and assumptions. PERCENTAGE OF COMPLETION OF CUSTOMER CONTRACTS In determining the stage of completion, the Group makes a critical estimate of the remaining cost. This esti- mation requires a consistent judgment (forecast) of the final outcome of the project, including costs to come and variance analyses of divergences compared with earlier assessment dates. Estimates are an inherent part of this assessment and actual future outcome may deviate from the estimated outcome. Historical ex- perience has also shown that estimates are, on the whole, sufficiently reliable. Estimates and judgements are made relating to a number of factors when assessing contracts. These primarily include the program of work throughout the contract period and an assessment of future costs after considering any changes in the scope of work. The Group reviews its estimates for its contracts with customers for buses, which are recorded under the percentage of completion method and, based on the data available to the Group, may record adjustments to its calculations as appropriate. Reference is made to Note 6.1 for further details. VALUATION DEFERRED TAX ASSET Deferred tax assets are recognised for unused tax losses to the extent that it is probable that taxable profit will be available against which the losses can be utilised. Significant management judgement is required to determine the amount of deferred tax assets that can be recognised, based upon the likely timing and the level of future taxable profits, together with future tax planning strategies. Further details on taxes are dis- closed in Note 10. IMPAIRMENT OF GOODWILL Goodwill is tested for impairment annually and when circumstances indicate that the carrying value may be impaired. Impairment is determined for goodwill by assessing the recoverable amount of each CGU (or group of CGUs) to which the goodwill relates. When the recoverable amount of the CGU is less than its carry- ing amount, an impairment loss is recognised. Impairment losses relating to goodwill cannot be reversed in future periods. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based on the fair value hierarchy that categorises the inputs of valuation techniques used to measure fair value into three levels. Level 3 input is a Discounted Cash Flow (“DCF”) model in which the cash flows are derived from the forecast for the next five years and includes the cash flows of the future investments that will enhance the performance of the assets of the CGU being tested. As the Group continues to invest significantly in the future growth of the Company, the fair value less costs of disposal model is consi- dered the most reliable estimate of the price at which an orderly transaction to sell the asset would take place between market participants at the measurement date under current market conditions. The recoverable amount is sensitive to the discount rate used for the DCF model as well as the expected future cash-inflows ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 124 and the growth rate used for extrapolation purposes. These estimates are most relevant to goodwill and other intangibles with indefinite useful lives recognised by the Group. The key assumptions used to determine the recoverable amount, including a sensitivity analysis, are disclosed and further explained in Note 13. ESTIMATION USEFUL LIFE OF INTANGIBLE ASSETS The Group has made a significant estimate of the useful life of Development assets and Software. Uncertain- ty about this estimate could result in significant changes in the reported amount of amortisation expenses and, subsequently, in result for the year. The estimated useful life of intangible assets is between 3 - 5 years. Reference is made to Note 13. PROVISION FOR WARRANTIES Typically, the Group provides a 2 year assurance-type warranty on the buses that it sells to customers. The Group generally bears the risk that products/components will bear any manufacturing defect and/or defect in material. Back-to-back warranty from suppliers apply as additional assurance in case the Group can, for whatever reason, not fulfil their liabilities of the battery warranty to the customer. In addition, the Company generally has back-to-back guarantees in place for key spare parts. The production of zero emission buses is based on new technology for a relatively small customer base for which relatively limited historical information regarding warranty expenses is available, whether from the Group’s experience or based on similar publicly available information from industry peers. A warranty pro- vision is recognized for the products sold to which the warranty period has not yet expired. The Group in- cluded the best estimate of the projected costs to repair or replace items under warranties and recalls if identified. These estimates are based on actual historical warranty claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given the relatively short history of sales and the limited historical data for the full warranty period and for all products. Changes to the historical or projected warranty experience may cause material changes to the warranty reserve in the future. Further details are disclosed in Note 23. 5. ACQUISITIONS AND MERGERS ACQUISITION IN 2021 OF 60% OF THE VOTING SHARES OF PONDUS HOLDING B.V. On 19 April 2021, the Group acquired 60% of the voting shares of its associate Pondus Holding B.V. (Pondus), raising its total shareholding of Pondus Holding to 80% and upon the acquisition date the Group gained con- trol of Pondus. Pondus Holding B.V. is the parent company of Pondus Operations B.V. (90% ownership) and Pondus R&D B.V. (100% ownership). Pondus is involved in the research and production of lightweight composite materials suitable for use in constructing electric zero emission buses. Pondus’ principal place of business is the Netherlands. The Group acquired Pondus for the purpose of using proprietary technology to develop and manufacture lightweight carrying structures and parts for use in the Group’s buses. The considerations included the following: • €16.6 million (the initial purchase price) paid by the Purchaser on completion of the acquisition; • €5.0 million (the deferred purchase price) of contingent consideration paid by the Purchaser upon the ini- tial public offering (“IPO”) in October 2021; • €0.75 million (earn out) of contingent consideration also paid upon the IPO in October 2021. At the acquisition date, the fair value of the contingent consideration was estimated to be €5.8 million. The Group considered the IPO to be a probable event within the next three months; the IPO actually occurred on 22 October 2021. Considering the short period of time, the discounting was negligible. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 125 The purchase price allocation is as follows: Fair value of identifiable net assets Non-current assets Property, plant and equipment 1,563 Intangible assets 4,246 Non-current financial assets 53 Total non-current assets 5,862 Net working capital Receivables from related parties 1,605 Other current assets 26 Trade payables (110) Payables to related parties (1,051) Other current liabilities (351) Total net working capital 119 Non-controlling interest (10% in Pondus Operations) (86) Loans and borrowings (7,909) Cash and cash equivalents 6 Subtotal: Identifiable net assets acquired at fair value (2,008) Fair value of non-controlling interest 7,450 Fair value of previously held equity interest 7,450 Fair value of consideration transferred - Cash 16,600 - Contingent consideration 5,750 Subtotal: Consideration transferred 37,250 Goodwill arising on acquisition 39,258 Goodwill is attributable to the assembled workforce of Pondus, expected synergies, and expected future sales and customers. The goodwill is not deductible for income tax purposes. At the acquisition date, the carrying value of the Group’s 20% interest in Pondus was nihil. Accordingly, the Group recognised a gain of €7.5 million as a result of remeasuring the carrying amount of its ‘Investment in associates’ at fair value. The Group has elected to measure the non-controlling interest in Pondus at fair value; the non-controlling interest is determined based on Pondus’ full amount of goodwill. As a result, the value of the non-controlling interest is €7.5 million. ACQUISITION IN 2021 OF REMAINING 20% OF THE VOTING SHARES OF PONDUS HOLDING B.V. On 18 October 2021, the Group acquired the remaining 20% of the shares in Pondus through the acquisition of 100% of the shares of Gr8 Technologies B.V., owning the remaining 20% of the voting shares of Pondus Holding B.V. The Group acquired the shares of Gr8 Technologies B.V. from its previous shareholders, being two persons (participating for 50% each) affiliated to VDVI B.V., one of the existing shareholders of Ebusco Holding N.V. Holding the shares in Pondus Holding B.V. was the only activity of Gr8 Technologies B.V.; Gr8 Technologies B.V. is expected to be liquidated in the first half of 2022. The net cash outflow amounted to €19,996 (being €20,000 less cash acquired). Following the acquisition, the carrying value of the non-controlling interest of €7,190 has been reclassified to the equity of Ebusco Holding N.V., and the difference between the fair value of the consideration paid and the carrying value of the non-controlling interest being €12,806 has been charged against the Company’s share premium. Accordingly, the total cash outflow from investments in group companies (net of cash acquired) amounted to €22,344 and cash outflow from acquisition of non-controlling interest amounted to €19,996. In 2021, Pondus did not contribute to the Group’s consolidated revenue and contributed a loss of €1,713 to the Group’s consolidated operating result. If the acquisition had occurred on 1 January 2021, the acquired business would not have contributed to consolidated revenue and would have contributed a loss of €2,381 to consolidated operating result. Total transaction costs incurred amount to €85 thousand for both acquisitions. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 126 MERGER OF PONDUS GROUP ENTITIES IN 2022 In December 2022, the following mergers took place: • Pondus Holding B.V. (acquiring entity) merged with Pondus R&D B.V. (disappearing entity); • Ebusco B.V. (acquiring entity) merged with Pondus Holding B.V. (disappearing entity). As this merger is under common control it has been accounted for in line with the ‘pooling of interest’-method, meaning the mergers are recognised as if these entities had always been combined. After the merger Ebusco B.V. directly holds the 90% interest in Pondus Operations B.V. ACQUISITION IN 2022 OF 48.57% OF THE VOTING SHARES OF ZERO EMISSION SERVICES (ZES) B.V. On 28 January 2022, Ebusco Energy B.V. acquired 40% of the voting shares of Zero Emission Services B.V. (ZES), a provider of all-in concepts for emission-free inland shipping in the Netherlands. The consideration paid amounts to one euro. ZES and Ebusco share their commitment to zero-emission transportation. As their solutions are highly complementary, together Ebusco and ZES can significantly increase their joint impact in the maritime sector. ZES was founded in May 2020 and offers a complete range of products and services, based on interchange- able battery containers charged with renewable power, charging stations, technical support and an innova- tive pay per use concept for ship owners. In September 2021 the first emission-free inland shipping vessel, with energy containers from ZES, commenced operation. ZES was founded by ING bank, energy and technical service provider ENGIE, maritime technology company Wärtsilä and the Port of Rotterdam Authority. Ebusco took over its 40% stake from ENGIE, one of the founding shareholders of ZES. All shareholders provide equity, expertise and staff to support ZES in its development. On 8 November 2022 the shareholders of ZES were granted the option to subscribe to an additional share issuance. As a result the Group acquired an additional 8.57% of the voting shares of ZES. The consideration paid amounts to an additional €1,500. The Group accounts for this as an investment in an associate over which the Group has significant influence. The investment in ZES is accounted for using the equity method in the consolidated financial statements. At acquisition date, the investment of 40% is accounted for at costs, which is equal to the fair value of the Group’s investment in ZES (euro 1). Reference is made to Note 14 for subsequent measurement. 6. REVENUE, COST OF MATERIALS AND SEGMENT REPORTING The activities of the Group primarily consist of the sale of zero emission buses and ancillary services and goods, including charging systems, related to the electric vehicle ecosystem. 6.1 REVENUE REVENUE FROM CONTRACTS WITH CUSTOMERS The Group earns the majority of its revenue from its single performance obligation of the sale and supply of zero emission buses. The other primary performance obligations include a sale and supply of zero emission bus chargers, a guarantee to provide a complete change of batteries, repair and maintenance services and extended warranty. Performance obligations for other services and goods, including supply of bus charging systems, are ancillary and supportive of the performance obligation of the sale and supply of zero emission buses. The breakdown of the revenue based on type is presented below: Revenue type 2022 2021 Revenue from zero emission buses 105,026 20,736 Revenue from charging systems and ancillary services and goods 6,591 3,529 Total 111,617 24,265 Revenue recognised over time relates to contracts regarding the sale of zero emission buses and support ser- vices. Revenue recognised at a point in time relates to contracts for the sale of charging systems and parts. Transfer of control occurs when the Group has transferred physical possession of the asset and revenue is recognised at that point of time. Revenue recognition 2022 2021 Revenue recognised over time 107,814 19,266 Revenue recognised at point in time 3,803 4,999 Total 111,617 24,265 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 127 As at 31 December 2022 the remaining performance obligations amount to €42.0 million (31 December 2021: €34.9 million). The Group estimates 70% (31 December 2021: 81%) of these anticipated revenues are expect- ed to be recognised during the next 12 months. This revenue relates primarily to customer contracts for zero emission buses. For multiple sales contracts, the company is exposed to penalty clauses for late delivery of the buses. These penalties are capped at a percentage of the contractual selling price. Due to continuing material shortages and delay in the increase in production capacity, the company could face penalty charges for late delivery. At 31 December 2022, the Group concluded that it is highly probable that a significant reversal in the amount of cumulative revenue recognised will not occur. Reference is made to Note 23 for further details of the provision recorded for assurance-type warranties under customer contracts. CONTRACT ASSETS AND CONTRACT LIABILITIES Contract assets / (liabilities) – 31 December 2022 2021 Contract assets (positive balance of work in progress) 62,971 13,450 Contract liabilities (negative balance of work in progress) (8,912) (174) Balance of contract assets and liabilities 54,059 13,276 The contract assets balance as per 31 December 2022 is €63.0 million (2021: €13.5 million). Contract assets are measured taking account of expected credit losses in a way similar to the method used for trade and other receivables; no material expected credit losses haves been recorded for contract assets for the periods pre - sented. The significant increase in contract assets in 2022 is primarily explained by the increased demand after covid. During 2021 the Group experienced lower demand and orders for its zero emission buses. In 2021 contract assets were related exclusively to work in progress assets for zero-emission buses and the decrease in orders combined with invoicing resulted in a correspondingly lower amount of contract assets. Revenue received in advance (contract liability) as per 31 December 2022 amounts to €8,912 (2021: €174). The increase in the contract liabilities in 2022 is explained by the upfront payment of two customers. 6.2 COST OF MATERIALS Cost of materials are recognised and presented in the statement of profit or loss. These costs include amounts paid to the supplier for zero emission bus contracts, costs for parts included in zero emission bus contracts, transportation costs, import duties and warranty expenses. 6.3 SEGMENT REPORTING The Group has identified the Management Board, which consists of the CEO, CFO and COO, as the chief operat- ing decision makers (CODM). The operating results and performance of the total Group are regularly reviewed by the entity’s CODM in order to make decisions about resources to be allocated to the Group. Discrete finan- cial information is available for the total Group. The total business of selling zero emission buses and ancillary revenue streams from these buses has been identified as a single operating segment. The following table summarizes the Group’s geographical breakdown of its revenue, based on the location of the external customers for the periods indicated: Revenue – Geographical breakdown 2022 2021 DACH 1 59,812 9,722 Nordics 2 27,468 8,418 Benelux 16,946 6,035 Spain 7,389 - Rest of the World (RoW) 2 90 Total 111,617 24,265 1 DACH is an acronym for Germany (D), Austria (A) and Switzerland (CH). 2 Nordics is an acronym for Denmark, Sweden, Norway and Finland. In 2022, the revenues from external customers attributed to the entity’s country of domicile (the Netherlands) amounted to €16.5 million (2021: €4.9 million). At 31 December 2022 €82.5 million of the non-current assets were in the Netherlands (the country of domicile for the Group) (31 December 2021: €68.5 million). LARGE CUSTOMERS In 2022, one customer generated 40% of total revenue. In 2021, one customer (a different one) generated 31% of total revenue. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 128 7. EMPLOYEE BENEFIT EXPENSES AND REMUNERATION KEY MANAGEMENT EMPLOYEE BENEFIT EXPENSES AND PENSIONS The table below gives a breakdown of the employee benefit expenses recognised in respect of short-term employee benefits and post-employment benefits: Employee benefit expenses 2022 2021 Wages and salaries 17,742 8,974 Temporary staff 11,162 5,491 Social security charges 2,892 1,481 Other staff expenses 2,253 1,066 Pension costs 961 422 Car expenses 349 229 Share based payments expenses 166 - Other compensation - 5,000 Management fee - 443 Total 35,525 23,106 1 Reference to Note 7.1: Remuneration key management Wages and salaries include the remuneration of the members of the Management Board (including the CEO and CFO as from 17 October 2021) and the Supervisory Board. Wages and salaries includes a research and development grant for the 3.0 bus for an amount of €337 (2021: €267) and various other grants of €239. The increase in wages and salaries is mainly driven by the increase in average number of full-time employees (see table below). Car expenses relate to short-term rental expenses, fuel, insurance and repairs costs. Long-term car lease contracts for employees are included in Note 22 – Leases. The management fee of 2021 includes management fees charged by the CEO and CFO based on service contracts up to 17 October 2021. Other staff expenses include employee costs that are not directly related to salaries and social security charges, including travel and related expenses. The average number of full-time employees for the period active within, respectively outside the Netherlands is as follows: Full-time employees 2022 2021 Active within the Netherlands 310 167 Active outside the Netherlands 11 4 Total 321 171 SHARE BASED PAYMENTS The Group initiated one share-based compensation plan that will be settled in ordinary shares: a ‘One-off Appreciation and Retention Plan’. Under the One-off Appreciation and Retention Plan, certain senior employees have been granted Restricted Share Units (RSU’s) on 11 February 2022, which will vest on 11 February 2024 only when the employees are still employed by the Group on that date. The fair value of these share-based compensations, calculated on grant date, is based on Ebusco’s share price (observable input). Details of the share-based compensation plan during the year are as follows: Restricted Share Units (RSU’s) 2022 2021 Number of shares Fair value Number of shares Fair value Outstanding at the beginning of the year - - - - Granted during the year 17,000 22,10 - - Outstanding at the end of the year 17,000 22,10 - - ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 129 The expected realisation of the service conditions is set at 100%. Dividends declared on the underlying shares while the RSU is unvested are expected to be nil, subsequently no amount is deducted from the grant-date price of the company’s share in estimating the fair value. 7.1 REMUNERATION KEY MANAGEMENT The Group’s key management consists of the CEO, CFO, COO, CTO, CPO and HR Director per 31 December 2022. Total remuneration for the Group’s key management amounted to €1,654 for 2022 (2021: €6,183). Key management are those persons having authority and responsibility for planning, directing and controlling the activities of the entity (directly or indirectly) including any directors. The table below provides the remuneration of the Management Board for the years ended 31 December 2022 and 2021. 2022 2021 Base salary Pension costs Other com - pensa- tion Other Total Base salary Pension costs Other com - pensa- tion Other Total Peter Bijvelds (CEO) 387 63 - 10 460 268 12 - 7 287 Paul van Beers (CFO) 275 45 - 18 338 295 9 5,000 11 5,315 Bob Fleuren (COO) 1 275 45 - 16 336 183 18 - 12 213 Total 937 153 - 44 1,134 746 39 5,000 30 5,815 1 Appointed as COO and member of the Management Board as from 1 April 2021 BASE SALARY All three members of the Management Board are included in the payroll administration of the Company as from 17 October 2021. PENSIONS The members of the Management Board have been granted a pension allowance equal to an amount of ap- proximately 16% of their fixed base salary, excluding any allowances and bonus payments. Other benefits include 25 days of paid vacation leave per calendar year. Furthermore, the members of the Management Board receive a car allowance or company car in accordance with the company’s car policy. No other benefits are granted. OTHER COMPENSATION As a result of the IPO in October 2021, the CFO received a settlement fee of €5.0 million, with the requirement to re-invest the net proceeds of the settlement in shares of the Company. 7.2 SUPERVISORY BOARD REMUNERATION EXPENSES In euro Fixed Other compensation Total 2022 2021 2022 2021 2022 2021 Derk Haank 1 58,000 14,500 450 150 58,450 14,650 Carin Gorter 2 50,000 12,500 1,350 300 51,350 12,800 Jeroen Drost 3 47,000 11,750 600 150 47,600 11,900 Ruud Spoor 4 47,000 11,750 1,200 - 48,200 11,750 Roelf de Boer 5 47,000 11,750 750 150 47,750 11,900 Total 249,000 62,250 4,350 750 253,350 63,000 1 Derk Haank has been appointed as Chair of the Supervisory Board and member of the Nomination and Remuneration Committee 2 Carin Gorter has been appointed as Chair of the Audit Committee and member of the Supervisory Board 3 Jeroen Drost has been appointed as Chair of the Remuneration Committee and member of the Supervisory Board 4 Ruud Spoor has been appointed as member of the Audit Committee and member of the Supervisory Board 5 Roelf de Boer has been appointed as Chair of the Nomination Committee and member of the Supervisory Board With regards to the comparative figures, the fixed compensation relates to the fourth quarter of 2021. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 130 8. OTHER OPERATING EXPENSES Other operating expenses comprise general, distribution, marketing and other expenses. Other operating expenses 2022 2021 General expenses 5,416 8,176 Distribution expenses 2,687 1,449 IT expenses 2,541 1,213 Marketing expenses 1,156 552 Facility expenses 996 450 Office expenses 264 136 Other expenses 1,856 378 Total other operating expenses 14,916 12,354 General expenses mainly include audit, advisory and insurance fees. In addition, general expenses include changes to the provision for doubtful debts. Marketing expenses are costs which include marketing and pro- motional costs and costs associated with making products available for delivery to customers. Facility ex- penses include costs for utilities, insurance, and other non-rent related expenses associated with the Group’s facilities. Office expenses include telecom expenses, office supplies, and subscriptions. IT expenses include software maintenance costs and license costs, as well as other IT services. Other expenses consist of various expenses that are incurred as part of the Group’s daily operations. The Group has R&D expenditures of €456 recognised as an expense during the reporting periods (2021: nil). 9. FINANCE EXPENSES, NET Finance costs 2022 2021 Foreign currency exchange rate results, including (gains)/losses on derivatives 127 470 Interest and similar expenses on loans and borrowings 989 3,642 Interest income (241) - Interest on lease liabilities 185 128 Total 1,060 4,240 10. INCOME TAX The major components of income tax expense for the years ended 31 December 2022 and 31 December 2021 are presented below. Income tax expense 2022 2021 Current tax (expense)/benefit: Relating to current year (20) 4,837 Adjustment prior year - 837 (20) 5,674 Deferred tax (expense)/benefit: Relating to changes in tax rates - 224 Relating to origination and reversal of temporary differences 100 211 Relating to tax losses 9,725 4,143 Relating to limitation interest deduction (94) 146 Adjustment prior year and others 23 (811) 9,754 3,913 Income tax (expense)/benefit reported in the statement of profit or loss 9,734 9,587 Deferred tax (expense)/benefit related to items recognised in OCI during the year 2022 2021 Derivatives (299) (371) Deferred tax charged to OCI (299) (371) The operations of the Group are subject to income taxes in the Netherlands and in the other countries where the Group is conducting a business. Ebusco Holding N.V. is the head of the Dutch fiscal unity for both income tax and VAT; all Dutch subsidiaries are part of the fiscal unity except for Pondus Operations B.V. as the Group’s shareholding in this entity is only 90% and ZES (48.57%). ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 131 A reconciliation of the statutory income tax rate of the Netherlands to the effective income tax rate is as follows: Effective tax rate 2022 2021 Accounting profit before tax (41,927) (36,384) Domestic income tax rate 25.8% 25.0% Theoretical income tax (expense)/benefit 10,817 9,096 Tax effect of: Deviating rates (4) (3) Change in tax rates - 224 Share of results of an associate (111) - Non-deductible expenses, tax exempt income and other permanent differences (59) 721 Benefit from previously unrecognised and unused tax losses 295 3 Effect of unrecognised and unused tax losses (1,223) (467) Other effects including adjustments prior year 19 13 Total income tax (expense)/benefit 9,734 9,587 Effective tax rate 23.2% 26.3% The enacted income tax rate in the Netherlands is set at 25.8% in 2022 (2021: 25.0%). Non-deductible expenses, tax exempt income and other permanent differences in 2022 mainly include the tax effect of tax exempt income from associates, non-deductible employee benefit expenses related share based payments and non-deductible advisory fees related to the acquisition of Zero Emission Services B.V. The effect of unrecognised and unused tax losses in 2022 mainly relates to fiscal tax losses incurred by Pondus Operations B.V.. The effect of previously unrecognised and unused tax losses in 2022 relates to future expected taxable profits of Pondus R&D B.V. Pondus R&D is merged into Pondus Holding B.V. per 27 December 2022. Pondus Holding B.V. is merged into Ebusco B.V. per 28 December 2022. Prior year adjustments mainly include differences between initial and final tax assessments and the impact of timing differences materialising in a different year as assumed. The balances and movements for current tax and deferred tax for the years ended 31 December 2022 and 31 December 2021 are presented below: Current income tax liabilities As at 31 December 2022 As at 31 December 2021 Income tax payable 5 9 The (net) deferred tax asset position of the Group as per 31 December 2022 and 31 December 2021 mainly relates to tax losses carried forward, limitation of interest deduction, right-of-use asset and lease liability positions resulting from the application of IFRS 16, the depreciation pattern of property, plant and equipment and derivative positions resulting from the application of hedge accounting. Deferred tax assets As at 31 December 2022 As at 31 December 2021 Intangible assets - - Property, plant and equipment 112 147 Right-of-use assets (1,871) (2,058) Derivatives (313) (89) Lease liabilities 2,002 2,164 Tax losses carried forward 16,262 6,824 Limitation of interest deduction 173 151 Total net deferred tax asset 16,365 7,139 Changes in deferred tax assets and (liabilities), net 2022 2021 Carrying amount as at 1 January 7,139 909 Changes: Recognised in income statement 9,754 3,913 Recognised in other comprehensive income (299) (371) Recognised against share premium (194) 2,474 Other (35) 214 Balance as at 31 December 16,365 7,139 The changes in deferred tax positions reflected in other comprehensive income are linked to the deriva- tive balances resulting from the application of hedge accounting, whilst the one recognised in the income statement mainly refer to the recognition of tax losses carried forward and (the reversal of (net) deferred tax positions related to) the depreciation pattern of tangible assets. The change in the deferred tax position ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 132 recognised against share premium relates to share issuance expenses directly charged against equity (refer- ence is made to Note 20: Equity). Tax losses carried forward available as at 31 December 2022 amount to €71.1 million (31 December 2021: €30.0 million) of which €63.0 million (31 December 2021: €26.3) has been recognised resulting in a deferred tax asset of €16.3 million (31 December 2021: €6.8). The remaining balance of €8.1 million (31 December 2021: €3.7) mainly relates to unrecognised tax carried forward losses of Pondus Operations B.V., which can be carried forward indefinitely. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the busi- ness plans for individual subsidiaries in the Group. 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; such reductions are reversed when the probability of future taxable profits improves. 11. EARNINGS PER SHARE The Group’s equity structure as per 31 December consists of 59,039,380 ordinary shares with a nominal value of €0.01. Earnings per share can be specified as follows: Share information 2022 2021 Net profit attributable to ordinary shareholders (in euro thousands) (31,717) (26,388) Weighted average number of ordinary shares for the period 59,039,380 47,502,302 Dilutive number of shares - - Total number of dilutive ordinary shares 59,039,380 47,502,302 Basic earnings per share (in euro’s) (0.54) (0.56) Dilutive earnings per share (in euro’s) (0.54) (0.56) Under the One-off Appreciation and Retention Plan (Note 7), certain senior employees have been granted 17,000 Restricted Share Units (RSU’s), which will vest on 11 February 2024 when the employees are still employed by Ebusco on that date. The expected realisation of the service conditions for both plans is set at 100% and the effect of the expected exercise of stock and the increasing number of 17,000 outstanding shares on vesting date has not been included in the dilutive earnings per share, as the earning per share are loss-making. 12. PROPERTY, PLANT AND EQUIPMENT Property, plant and equipment Equipment and office inventory Transportation Assets under construction Total Balance as of 1 January 2022 Cost 6,578 3,968 520 11,066 Accumulated depreciation (1,471) (2,617) - (4,088) Net book value 5,107 1,351 520 6,978 Change in net book value: Additions 2,812 424 2,611 5,847 Transfer from assets under construction 458 393 (851) - Other transfer at cost - (116) - (116) Accumulated depreciation other transfer - 93 - 93 Depreciation (1,673) (674) - (2,347) Translation differences - (1) - (1) Total changes 1,597 119 1,760 3,476 Balance as of 31 December 2022 Cost 9,848 4,668 2,280 16,796 Accumulated depreciation (3,144) (3,198) - (6,342) Net book value 6,704 1,470 2,280 10,454 Balance as of 1 January 2021 Cost 1,448 3,688 560 5,696 Accumulated depreciation (434) (2,172) - (2,606) Net book value 1,014 1,516 560 3,090 Change in net book value: Acquisitions through business combinations 1,519 45 - 1,564 Additions 3,377 7 780 4,164 Transfer to contract assets - (154) - (154) Transfer from assets under construction - 820 (820) - Depreciation (803) (883) - (1,686) Total changes 4,093 (165) (40) 3,888 Balance as of 31 December 2021 Cost 6,578 3,968 520 11,066 Accumulated depreciation (1,471) (2,617) - (4,088) Net book value 5,107 1,351 520 6,978 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 133 The Group has performed an impairment assessment with regard to its property, plant and equipment assets; no indications of impairment have been identified and no impairment has been recorded. 13. INTANGIBLE ASSETS Intangible assets Goodwill Development assets Software Assets under construction Total Balance as of 1 January 2022 Cost 39,258 14,783 1,673 194 55,908 Accumulated amortisation - (9,072) (637) - ( 9 , 7 0 9 ) Net book value 39,258 5,711 1,036 194 46,199 Change in net book value: Additions - 10 122 3,746 3,878 Transfer from assets under construction - - 48 (48) - Transfer to inventory - - - (625) (625) Amortisation - (1,252) (605) - (1,857) Total changes - (1,242) (435) 3,073 1,396 Balance as of 31 December 2022 Cost 39,258 14,793 1,843 3,267 59,161 Accumulated amortisation - (10,324) (1,242) - (11,566) Net book value 39,258 4,469 601 3,267 47,595 Balance as of 1 January 2021 Cost - 10,417 1,191 - 11,608 Accumulated amortisation - (7,059) (106) - (7,165) Net book value - 3,358 1,085 - 4,443 Change in net book value: Acquisitions through business combinations 39,258 4,246 - - 43,504 Additions - 120 482 194 7 9 6 Amortisation - (2,013) (531) - (2,544) Total changes 39,258 2,353 (49) 194 41,756 Balance as of 31 December 2021 Cost 39,258 14,783 1,673 194 55,908 Accumulated amortisation - (9,072) (637) - ( 9 , 7 0 9 ) Net book value 39,258 5,711 1,036 194 46,199 13.1 GOODWILL The goodwill recognised is related to the Pondus acquisition in 2021. The Group assessed the recoverable amount of the cash-generating unit (CGU) for annual goodwill impairment testing purposes. The CGU is the Ebusco business in total, excluding future cash flows related to the sale of energy containers. Impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is the higher of its fair value less costs of disposal and its value in use. The value in use calculation is based on a Discounted Cash Flow (DCF) model that does not include significant future investments that will enhance the performance of the assets of the CGU being tested. The fair value less cost of disposal model includes the cash flows related to future investments. As the Group continues to invest significantly in the future growth of the Company, this model is considered the most reliable estimate of the price at which an orderly transaction to sell the asset would take place between market participants at the measurement date under current mar- ket conditions. For the purpose of the goodwill impairment assessment, the fair value less cost of disposal exceeds the outcome of the value in use calculation. If either of the fair value less cost of disposal and the value in use amounts exceeds the asset’s carrying amount, the asset is not impaired and it is not necessary to estimate the other value. The fair value less costs of disposal calculation is based on a fair value hierarchy that categorises the inputs of valuation techniques used to measure fair value into three levels. For the annual goodwill impairment anal- ysis of 2022, level 3 data was used to determine the recoverable amount of the CGU. Level 3 input is a DCF model in which the cash flows are derived from the forecast for the next five years. In 2021 the recoverable amount of the cash-generating unit, the Ebusco business in total, was also based on a fair value less cost of disposal basis. As Ebusco became listed on the Euronext after a successful IPO at the end of October 2021, the Group concluded that the fair value less cost of disposal was determined using a observable market price (level 1 input): the IPO offer share price of €23.00 per share and a market capitalization post listing for ap- proximately €1.3 billion. This was significantly higher than the carrying amount and no impairment had been identified in 2021. As such observable data was not directly available and observable in 2022, the Group has used the level 3 valuation technique. The recoverable amount at 31 December 2022 based on the level 3 Discounted Cash Flow model significantly exceeds the carrying amount of €270 million and no impairment loss has been recognised in 2022. The car- rying amount does not include intangible assets with indefinite useful lives. A key assumptions used in the DCF model is the pre-tax WACC (weighted average cost of capital) of 11.95%. This corresponds to a discount ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 134 rate of 9.7%. The period used for discounting cash flows is infinite. For determining the future cash flows the medium-term plans of the Group were used. The assumptions from the medium-term plans are based on past experience and external sources of information. The plan covers a period of 5 years. Cash flows after 5 years are extrapolated with an estimated future inflation of 2%. Another important estimate in the cash flow forecast is the expected turnover growth. The growth is based on the order book and the medium-term inter- national expansion objective to significantly increase manufacturing, production and assembly as defined during the IPO. 13.2 DEVELOPMENT ASSETS Development assets refer to the design, construction and testing of a chosen alternative for the new low floor bus which is 100% electrically powered. This project was taken into use in 2021. Ebusco started with the development of energy systems in 2022, whereby the first contract to sell this was signed in 2022, with expected delivery in 2023. Ebusco expects to further develop this asset in the upcoming year which would lead to Development assets from the moment relevant criteria are met. 13.3 SOFTWARE Software mainly refers to the Group’s after sales and inventory management system, acquired from and developed by third party suppliers. 13.4 ASSETS UNDER CONSTRUCTION Assets under construction relate mainly to the third-party supplier and internal staff expenses incurred to im- plement a new ERP system (€1.2 million) and to the development of energy containers (€1.2 million). The ERP system is not yet live at 31 December 2022. The development of the mobile energy containers are expected to be 100% completed and delivered to the customer in 2023. These containers can be used in hybrid electric barges, providing a fully green alternative requiring significantly less fuel and emitting significantly less CO2 than conventional diesel-powered barges. The intangible assets which are not yet in use were tested for impairment, no impairment was identified. The Group has performed an impairment assessment with regards to its intangible assets and has not identified impairment indicators. 14. INVESTMENT IN AN ASSOCIATE The Group has a 40% interest in Zero Emission Services (ZES) B.V. as per 28 January 2022 and a 48.57% interest as per 8 November 2022. Further disclosure concerning the acquisition of ZES is disclosed in Note 5. ZES offers a complete range of products and services, based on interchangeable battery containers charged with renewable power, charging stations, technical support and an innovative pay per use concept for ship owners. The Group’s interest in ZES is accounted for using the equity method in the consolidated financial statements. At acquisition date, the investment is accounted for at costs, which is equal to the fair value of the Group’s investment in ZES. The following table illustrates the summarised financial information of the Group’s invest- ment in ZES: Investment in an associate 2022 C urrent assets 15,769 Non-current assets 2,703 Current liabilities (15,111) Non-current liabilities - Equity 3,362 Group’s share in equity (48.57%) 1,633 Fair value adjustment (565) Group’s carrying amount of the investment 1,068 Revenue from contracts with customers 163 Cost of sales (309) Administrative expenses (1,069) Profit/(loss) before tax (1,215) Income tax expense - Profit/(loss) for the year (continuing operations) (1,215) Other comprehensive income/loss - Total comprehensive income for the year (continuing operations) (1,215) Group’s share of the loss (432) ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 135 On 11 November 2022, the Group approved another contribution in a proposed new share issuance of ZES. On 21 February 2023 the capital contribution was approved and paid. The Group contributed €2.35 million and as a result the interest in the associate increased to 49.39%. At 31 December 2022 the associate has a commitment to purchase energy containers (€10.4 million) from Ebusco Energy B.V. 15. NON-CURRENT FINANCIAL ASSETS Non-current financial assets As at 31 December 2022 As at 31 December 2021 Long-term deposits 9 205 Total 9 205 The Group’s non-current financial assets consist of long-term deposits. Instead of providing a bank guarantee as security for a 3-year factory warranty, the Group agreed with one customer to keep 5% of the sales invoices as a deposit instead of a bank guarantee. This deposit has a duration of 3 years. Considering the relatively low value of the deposit, the Group estimates the carrying amount is not materially different from its fair value. 16. INVENTORIES Inventories relate to (raw) materials for production, trade goods ready for sale and spare parts to service zero emission electric buses sold by the Group. Inventories As at 31 December 2022 As at 31 December 2021 Trade goods for sale and spare parts 47,976 22,853 Inventories, gross 47,976 22,853 Allowance for obsolescence (534) (523) Inventories, net 47,442 22,330 The amount of write down of inventories recognised as an expense during 2022 amount to €11 (2021: €290). 17. TRADE RECEIVABLES Trade receivables As at 31 December 2022 As at 31 December 2021 Trade receivables 26,487 17,112 Doubtful debtor provision (574) (514) Net trade debtors 25,913 16,598 In 2022, doubtful debtor provision consists of a provision for individual debtors with objective evidence of impairment (€402) and the allowance for expected credit losses (€172). In total €167 has been added to the doubtful debtor provision in 2022 and the usage to the allowance amounts to €107. Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. Due to the short duration of the receivables (average less than 3 months) the fair value approximates the carrying value. Set out below is the information about the credit risk exposure on the Group’s trade receivables and contract assets using the provision matrix: 31 December 2022 Contract assets Trade receivables - Days past due <30 days 30-60 days 60-90 days >91 days Total Expected credit loss rate 0% 0.1% 2.7% 0.4% 6.1% Estimated total gross carrying amount at default 62,971 20,512 212 3,684 2,079 26,487 Expected credit loss - 25 6 14 127 172 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 136 The majority of commercial banks where cash and cash equivalents are held have a credit rating in the A categories of Moody’s/S&P. No defaults occurred during the year and management does not expect any losses from non-perfor - mance by these counterparties. The risk of default of the counterparty is assessed to be low taking into account the credit rating. The resulting expected credit loss is estimated to be insignificant. As per 31 December 2022, Ebusco is maintaining bank guarantee credit facilities for a total of €50 million with ING Bank N.V. (€20 million), Coöperatieve Rabobank U.A. (€20 million) and ABN Amro N.V. (€10 million) which have been established during 2022. At 31 December 2022 an amount of €5,395 has been utilized by means of a rental guaran - tee, advance payment guarantee, bid bonds and a performance bond guarantee at the credit facility of ING Bank N.V., whereas €981 has been utilized at the credit facility of ABN Amro N.V. by means of a advanced payment guarantee. As per 31 December 2021, an amount of €30 million has been blocked and provided as pledge to ING Bank N.V. by Ebusco B.V. as security for the payment or repayment of everything that Ebusco B.V. and Ebusco Manufacturing B.V. may owe to ING Bank N.V. In addition, an amount of €1.8 million has been blocked and provided as pledge to Coöperatieve Rabobank U.A. as coverage for outstanding letter of credit amounts. In addition, an amount of €668 of the bank accounts has been blocked as per 31 December 2021 as coverage of outstanding bank guarantees. The outstanding bank guarantees included a bank guarantee for the rental agreement of the premises in Deurne as at 31 December 2022 of €132. 20. EQUITY 20.1 EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE GROUP CAPITAL MANAGEMENT For the purpose of the Group’s capital management, capital includes issued capital, share premium and all other equity reserves attributable to the equity holders of the parent. The primary objective of the Group’s capital management is to safeguard the ability to continue as going concern and to provide return for share- holders and benefits to other stakeholders. The Group manages its capital structure and makes adjustments in light of changes in economic conditions and the requirements of the financial covenants, if applicable. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. 31 December 2021 Contract assets Trade receivables - Days past due <30 days 30-60 days 60-90 days >91 days Total Expected credit loss rate 0% 0.5% 0.5% 6% 6% Estimated total gross carrying amount at default 13,450 4.672 4,300 830 7,310 17,112 Expected credit loss - 25 17 52 420 514 18. OTHER CURRENT ASSETS Other current assets As at 31 December 2022 As at 31 December 2021 Taxes and social securities 3,884 2,898 Derivatives 1,248 343 Other accrued assets 1,195 582 Income tax receivable 5 - Total other current financial assets 6,332 3,823 Due to the short duration of the non-derivative current financial assets the fair value approximates the car- rying value. 19. CASH AND CASH EQUIVALENTS Cash and cash equivalents As at 31 December 2022 As at 31 December 2021 Cash at hand 1 1 Cash at bank 95,211 207,922 Total cash and cash equivalents 95,212 207,923 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 137 No changes were made in the objectives, policies or processes for managing capital during the years ended 31 December 2022 and 2021. EQUITY AND CAPITAL MANAGEMENT ISSUED AND PAID IN ORDINARY SHARE CAPITAL The issued and paid in ordinary share capital amounts to €590 as at 31 December 2022 (31 December 2021: €590) and is subdivided into: 59,039,380 ordinary shares with a nominal value of €0.01 (31 December 2021: 59,039,380 ordinary shares with a nominal value of €0.01). In 2022 no changes in the issued and paid in ordinary share capital occurred. SHARE PREMIUM Following final settlement with all parties involved, €750 of the per 31 December 2021 accrued share issu- ance expenses was released in 2022. This led to a reversal of the charge against share-premium in 2021 of €557, net of tax. LEGAL RESERVES The Group has recorded cash flow reserve as a result of application of hedge accounting, linked to its foreign currency risk management policy as at 31 December 2022 of €966 (31 December 2021: €0). In 2022 the Group elected not to record a cost of hedging reserve (31 December 2021: €6). In addition, the Group has recorded a legal (non-distributable) reserve as required by Dutch law in respect of: • capitalised development assets excluding development assets acquired through business combinations (classified as Other reserve) as at 31 December 2022 of €7,738 (31 December 2021: €1,757) as required by Dutch law. • the remeasurement gain of €7,450 in 2021 as a result of remeasuring the carrying amount of its 20% in- vestment in Pondus associates’ at fair value. The share-based payment reserve of €166 (31 December 2022: €0) is used to recognise the value of equi- ty-settled share-based payments provided to employees, including key management personnel, as part of their renumeration. Refer to Note 7 for further details of these plans. 20.2 NON-CONTROLLING INTERESTS In financial year 2021 the non-controlling interests included the remaining 20% of the shares in Pondus held by Gr8 Technologies B.V.after the acquisition of 60% of Pondus in April 2021. The fair value of the non-con- trolling interest was assessed at €7,450. On 18 October 2021, the Group acquired the remaining 20% of Pondus through the acquisition of 100% of the shares of Gr8 Technologies B.V. Following the acquisition, the carrying value of the non-controlling interest of €7,190 (including loss for the period of €260) had been reclassified to the equity of Ebusco Holding N.V. No transactions with non-controlling interests occurred in financial year 2022. The non-controlling interest as at 31 December 2022 of €539 (asset) (31 December 2021: €63) includes the carrying value of 10% of Pondus Operations B.V. held by minority shareholders. 21. LOANS AND BORROWINGS (LONG-TERM AND SHORT-TERM) FINANCIAL LIABILITIES (NON-DERIVATIVES) Loans and borrowings consist of the following: Loans and borrowings As at 31 December 2022 As at 31 December 2021 Non-current Current Total Non-current Current Total Debt to credit institutions - - - - 215 215 Debt to a third party - 486 486 - - - Debts to other related parties - - - 463 - 463 Total - 486 486 463 215 678 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 138 DEBT TO CREDIT INSTITUTIONS The outstanding balance as at 31 December 2021 of €215 includes a letter of credit entered into with Rabobank. DEBTS TO OTHER RELATED PARTIES Debts to other related parties included a payable to BaBoDiDa Ltd at 31 December 2021. The long-term loan from BaBoDiDa Ltd. bears an interest rate of 5% per year. The interest is added to the loan. No security have been provided with regards to the loan. At 31 December 2022 this loan was transferred to a third party and the loan was fully repaid in January 2023. The Group used a discounted cash flow method, with reference to the borrowing rate of the issuer as at end of the reporting period in order to determine the fair value of the borrowings. However, the Group reached the conclusion that the difference between the carrying amount of the loan and their fair value was not material and therefore no fair value adjustment was recorded. The following table sets out the reconciliation from the net cash flows from financing activities with the fi- nancing positions of loans and borrowings as at 31 December 2022 and 2021. Debt to credit institutions Debt to a third party Debts to other related parties Leases Total Balance as at 1 January 2022 215 463 8,382 9,060 Changes from financing cash flows Repayment of loans & borrowings (215) - - - (215) Payment of lease liabilities - - - (1,472) (1, 472) Transfer to credit institutions - 486 (486) - - Total changes from financing cash flows (215) 486 (486) (1,472) (1,687) Other changes Additions and remeasurements - - - 816 816 Disposals (150) (150) Interest and similar expense - - 23 185 208 Total liability-related other changes - - 23 851 874 Balance as at 31 December 2022 - 486 - 7,761 8,247 Debt to credit institu- tions Mezza- nine facility RVO Loan Debt to share- holders Cumula- tive pref- erence shares Debts to other related parties Leases Total Balance as at 1 January 2021 41,788 - 5,436 - 10,400 441 1,782 59,847 Changes from financing cash flows Proceeds from loans & borrowings 9,000 32,500 - - - - - 41,500 Repayment of loans & borrowings (50,923) (33,168) (11,426) - (10,000) - - (105,517) Payment of lease liabilities - - - - - - (1,244) (1,244) Interest paid (1,262) - - - (1,065) - - (2,327) Total changes from financing cash flows (43,185) (668) (11,426) - (11,065) - (1,244) (67,588) Other changes Acquisition through business combination - - 5,696 2,213 - - - 7,909 New leases / remeasurements - - - - - - 7,716 7,716 Interest and similar expense 1,612 668 294 (85) 665 22 128 3,304 Transfer to payables to related parties - - - (2,128) - - - (2,128) Total liability-related other changes 1,612 668 5,990 - 665 22 7,844 16,801 Balance as at 31 December 2021 215 - - - - 463 8,382 9,060 22. LEASES Lease liability As at 31 December 2022 As at 31 December 2021 Lease liability (non-current) 6,298 7,250 Lease liability (current) 1,463 1,132 Total 7,761 8,382 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 139 The Group has several lease agreements in which it acts as a lessee. The main lease concerns a contract for office and manufacturing space in Deurne, the Netherlands with a lease term of 5 years ending 30 September 2023. This lease contains an extension period of 5 additional years which the Group has exercised. The Group also has lease contracts which consist of cars for company personnel. The lease term for the aforementioned lease contracts is between 4 and 5 years. No lease contracts for the personnel cars contain an extension option. New car lease contracts and remeasurements resulted in an increase of both the ROU asset and lease liabilities by €236 (2022: €233) and €273 (2022: €230) respectively. All lease contracts have fixed lease payments and are only adjusted for indexation. None of the lease agree- ments contain a termination option. Set out below are the carrying amounts of right-of-use assets recognised and the movements during the period: Right-of-use assets Land and buildings Cars Total Balance as of 1 January 2022 7,573 473 8,046 Change in net book value: Additions and remeasurements 543 236 779 Disposals - (147) (147) Depreciation (1,214) (209) (1,423) Total changes 671 (120) (791) Balance as of 31 December 2022 6,902 353 7,255 Balance as of 1 January 2021 1,041 387 1,428 Change in net book value: Additions and remeasurements 7,486 233 7,719 Depreciation (954) (147) (1,101) Total changes 6,532 86 6,618 Balance as of 31 December 2021 7,573 473 8,046 Set out below are the carrying amounts of lease liabilities (included under interest-bearing loans and borrow- ings) and the movements during the period: Lease liabilities 2022 2021 As at 1 January 8,382 1,782 Additions and remeasurements 816 7,716 Accretion of interest 185 128 Payments (1,472) (1,244) Disposal (150) - As at 31 December 7,761 8,382 The Group has elected not to recognise right-of-use assets and lease liabilities for short-term leases (less than 12 months) and low-value assets. Short-term (less than 12 months) and small value lease contracts are expensed in the statement of profit or loss and other comprehensive income on a straight-line basis over the lease term. The amount of expense incurred in 2022 is €604 in total (2021: €92). The future cash outflows relating to leases that have not yet commenced are disclosed in Note 26: Commit- ments and contingencies (if applicable). For interest expenses on leases where the Group is a lessee, we refer to Note 9: Finance expenses, net. The Group has only limited lease contracts in which it is a lessor. The lease income amounts to €9 (2021: €126). 23. PROVISIONS Details of the provisions are presented in the table below: Provisions As at 31 December 2022 As at 31 December 2021 Non-current Current Total Non-current Current Total Provision for disputes - 253 253 - 1,130 1,130 Provision for warranties 147 524 671 - - - Total 147 777 924 - 1,130 1,130 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 140 PROVISION FOR DISPUTES After complaints of a customer, the Group held the supplier of climate systems liable for the delivery of a non-conforming climate system. Following a court verdict in April 2021 the Group complaints were confirmed by the court and the supplier was determined liable for this issue. Subsequently, the supplier started a temporary injunction opposing to the execution of the verdict. The verdict in the temporary injunction was that the supplier was not dismissed from the original verdict and was ordered to comply within two months. A settlement agreement was reached on 30 July 2021 and subsequently the Group started replacing climate systems on all buses delivered. The Group recognised a provision of €3,939 in total in 2021, of which €3,686 has been used at 31 December 2022 (31 December 2021: €2,809). As per 31 December 2022 the provision amounts to €253 (31 December 2022: €1,130) to cover remaining costs to be incurred in the future as replace- ment has not been completed yet as per year-end. Although the Group has a strong legal case which is supported by court it is unclear whether and what amount the supplier has to pay towards the Group. Due to the uncertainty, no receivable as per 31 December 2022 has been recognised in the balance sheet. PROVISION FOR ASSURANCE-TYPE WARRANTIES Historically, the Group was unable to reliably estimate warranty expense related to its assurance-type war- ranties. The production of zero-emission buses is based on new technology for a relatively small customer base for which insufficient historical information regarding warranty expenses was available, whether from the Group’s experience or based on similar publicly available information from industry peers. Therefore the Group did not record a provision for warranty expense in prior year(s). In 2022 the Group was able to collect additional historical information with sufficient details regarding actual warranty claims incurred for buses of which the warranty period expired in the course of 2022. Based on this additional historical data a more reliable estimate was made. The Group included the projected costs to repair or replace items under warranties and recalls if identified. These estimates are based on actual historical warranty claims incurred to date and an estimate of the nature, frequency and costs of future claims. These estimates are inherently uncertain given the relatively short history of sales and the limited historical data for the full warranty period and for different type of buses. Changes to the historical or projected warranty experience may cause material changes to the warranty reserve in the future. The effect of the change in the accounting estimate amounts to €671 and is recorded prospectively in 2022. The main assumption is the expected warranty claims as a percentage of sales, which is based on the historical warranty claims for buses of which the warranty period has expired at 31 December 2022. A change of the claims as per- centage of revenue by 0.25% would result in a change in the provision of €105. The effect of discounting is immaterial. 24. TRADE PAYABLES AND OTHER CURRENT FINANCIAL LIABILITIES The breakdown of the trade creditors and other current liabilities is as follows: Trade payables and other current liabilities As at 31 December 2022 As at 31 December 2021 Trade payables 21,115 10,883 Pension funds liabilities - 29 Taxes and social securities 3,064 741 Derivates 37 - Other current liabilities 4,854 6,207 Total 29,070 17,860 Trade payables are non-interest bearing and are normally settled on 30-days terms. Due to the short duration of the payables, the fair value approximates the carrying value. Other current liabilities are non-interest bear- ing and have an average term of two months. The Other current liabilities balance as at 31 December 2021 included accrued IPO expenses of €3,083. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 141 25. RELATED PARTY TRANSACTIONS The Group identifies a related party as a person or entity that is related to the Group. These include both people and entities that have, or are subject to, the influence or control of the Group. Note 2 provides information about the Group’s structure, including details of the subsidiaries and the holding company. The Group engages with its shareholders in certain related party transactions disclosed in this and other notes in these financial statements. The Group holds receivables and payables from its shareholders who represent related parties. Balances and transactions between the Company and its subsidiaries, which are related parties of the Com- pany, have been eliminated on consolidation. Transactions and balances with related parties can be specified as follows: Entity / person with significant influence Year Purchases from related party Interest owed by/ (to) related party Amounts owed by related parties Amounts owed to related parties Bijvelds Car Trading B.V. 2022 2 - - - 2021 - - 24 - BaBoDiDa Ltd. 2022 - (23) - - 2021 - (22) - 463 VDVI B.V. 2022 29 - - - 2021 - - - 534 Trimados Holding B.V. 2022 - - - - 2021 22,344 - - - B. van den Nieuwenhuijzen 2022 - - - - 2021 9,998 - - - B.A. van den Nieuwenhuijzen 2022 - - - - 2021 9,998 - - - ING Bank N.V. 2022 - (390) - - 2021 - 609 - - SALES AND PURCHASES TO RELATED PARTIES Zero Emission Services B.V. became a related party on 28 January 2022 when 40% of the shares were ac- quired for a consideration of 1 euro. On 8 November 2022 an additional 8.57% of the shares were acquired in exchange for a cash contribution of €1,500. At year-end all investments were settled and no amounts were outstanding to Zero Emission Services B.V. For more background reference is made to Note 5. Tridamos Holding B.V. is owned by the COO and sold his 60% share in Pondus Holding B.V. to the Group in April 2021. Reference is made to Note 5: Acquisitions. On 18 October, 2021, the Group acquired the remaining 20% of the shares in Pondus Holding B.V. through the acquisition of 100% of the shares of Gr8 Technologies B.V., which were owned by B. and B.A. van den Nieuwenhuijzen. The acquisition price of €20.0 million was based on the further manufacturing roll-out of the composite buses and external market data. Both persons were each participating for 50% in Gr8 Technologies B.V. and are related to VDVI B.V. which is one of the existing shareholders of Ebusco Holding N.V. Other purchases from related parties are within the normal course of the business. INTEREST OWED TO RELATED PARTIES During the normal course of business, the Group engages in transactions with ING, including loan facilities and issuance of letters of credit. All transactions are carried out at arms-length. The interest incurred and paid in 2022 amounts to €390 (2021: €609). As a result of the cash generated from the IPO in October 2021, the credit facility agreement has been cancelled with approval of all banks in December 2021. Reference is made to Note 20: Loans and borrowings. RECEIVABLES AND PAYABLES FROM RELATED PARTIES As at 31 December 2021, there was an outstanding balance of €24 of receivables from related parties, being Bijvelds Car Trading B.V. As at 31 December 2022 there were no outstanding balances to related parties. As at 31 December 2021, the non-current loans and borrowings include a payable to BaBoDiDa Ltd (related party of shareholder VDVI B.V.). The long-term loan from BaBoDiDa Ltd. bears an interest rate of 5% per year. No security nor repayment terms have been provided with regards to the loan. In 2022, the loan has been transferred to another (non-related) party and it is presented in the current loans and borrowings. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 142 Payables to related parties as at 31 December 2021 includes an outstanding liability of €534 towards VDVI B.V which has been repaid in January 2022. TRANSACTIONS WITH KEY MANAGEMENT PERSONNEL For compensation of key management personnel of the Group reference is made to Note 7. The pre-IPO share- holders have entered into a settlement agreement with PBE Support, in the context of the pre-IPO restruc- turing. PBE Support is wholly owned by Ebusco’s CFO, Paul van Beers. A payment is due to PBE Support by the respective pre-IPO shareholder if a change in ownership of the shares held by the pre-IPO shareholders would occur. In 2022 one of the pre-IPO shareholders sold shares, which triggered a payment of €1.5 million by that respective shareholder. This transaction has no impact on Ebusco’s balance sheet, income statement or cash flows. Therefore, this transaction is not included in the CFO’s remuneration as summarized in Note 7 for both 2021 and 2022. 26. COMMITMENTS AND CONTINGENCIES PURCHASE COMMITMENTS The Group made commitments for the purchasing of electric buses for an amount of €3.0 million at 31 December 2022 (2021: €9.4 million). OTHER DISPUTES During December 2020, the Group delivered four buses to a customer, generating €2.0 million of revenues. After the transfer of control of the buses, the customer’s facility experienced fire damage and the buses were destroyed. The Group asserts that control and ownership of the buses was transferred before the event and the amounts receivable for the delivered buses are owed to the Group. The customer disputes the Group’s assertion and disputes the amount payable to the Group for the buses. The matter is still under dispute and the Group plans to pursue collection of the amount receivable. The outcome is neither probable nor estimable and no significant provision is recorded. CONTINGENT ASSET In 2021 the Group held a supplier of climate systems liable for the delivery of a non-conforming climate sys- tem. Due uncertainty no receivable as per 31 December 2022 is recognised in the balance sheet. Reference is made to Note 23: Provisions. CONTINGENT LIABILITY In July 2022 the Group signed a letter of intent with SNC Renault Cléon to lease 21,092m2 in the Metropole Rouen. This location will be used as a production facility and will function as the French headquarter of the Group. The site is expected to be fully operational early 2024 and will have an initial capacity of 500 buses per year with the option to expand capacity in later years. The initial investment to equip the facility and convert it to Ebusco standards is expected to be €15 million. The duration of the lease contract is for an initial period of 10 years and can be extended after this period. Impact on the right-of-use assets/liabilities is estimated at €9.2 million. As at 31 December 2022 there is no signed agreement in place. 27. RISK MANAGEMENT OBJECTIVES AND POLICIES The operations of the Group expose the Group to various financial risks, including liquidity risk, market risk, and credit risk. The risk management is the responsibility of the Management Board of the Group. The main financial risks are described below together with the approach taken to assess and mitigate the relevant financial risk. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 143 Risk type Risk description Risk assessment and mitigation Remaining risk Liquidity risk Liquidity risk is the risk that the Group is not able to pay its short-term liabilities. Immediate liquidity risks for the Group could arise from • Short-term payments on long-term liabilities • Short-term lease payables • Trade and other payables • Other current liabilities The duration of the financial liabilities of the Group is shown in the table below (as at 31 December 2022 and 31 December 2021). Approximately 86% of the liabilities of the Group are short-term (this amounts to €40.7 million, including income tax payable); the Group’s current assets (maturity shorter than 1 year) amount €237.9 million, including cash and cash equivalents of €95.2 million. Based on this, the Group considers the residual liquidity risk to be low. The remaining risk is limited. Limited Market risks Foreign exchange risk is the part of the market risk that arises due to exposure of the Group to foreign currencies. This exposure arises from the Group’s involvement in foreign operations or trade in foreign currency (buy and sell). The Group has risk management policies and procedures in place for managing its foreign exchange risk. The foreign currencies the Group has exposure to are the Chinese Yuan (Renminbi) (RMB), Norwegian Krone (NOK), Australian Dollar (AUD), Danish Krone (DKK) and Canadian Dollar (CAD) based on • Sales in NOK, RMB and DKK • Trade and other receivables denominated in NOK, RMB and DKK • Purchases in RMB, NOK, AUD, DKK and CAD • Trade and other payables denominated in RMB, NOK, AUD, DKK and CAD For its RMB and NOK transactions the Group manages its foreign currency risk by hedging transactions that are expected to occur within a maximum 12-month period for hedges of forecasted purchases. The Group’s DKK sales are immaterial. The Group accepts the limited remaining risk. Limited Inflation risk is the part of the market risk that arises due to (unexpected) price increased of goods and services purchased by the Group. The ongoing inflation is resulting in an increase in cost levels for the Group. The Group is continuously monitoring the development or purchase prices for goods and services required on the short, medium and long-term basis. Based on expected price development the Group engages in purchase contracts and/or strategic inventory purchases in order to mitigate the risk of unexpected price increases as much as possible. On the other hand, the Group is also able to recharge (a part of) the increase in cost levels to its customers via increased sales prices. Medium Interest rate risk is the part of the market risk that arises due to movements in interest rates. The Group is exposed to changes in interest rates resulting from the following • Long term liabilities • The interest rate implicit in the lease However, no long-term liabilities have variable interest rates and outstanding amounts are limited in size. The Group’s cash position, due to its short-term nature, has limited exposure to interest rate risk. The resulting residual interest rate risk is considered to be limited. Limited Credit risk Credit risk for the Group mainly consists of the de- fault of trade debtors and contract assets. The Group reflects on the credit risks of trade debtors on a forward-looking basis, based on the simplified ECL approach. Furthermore, the Group determined that the custom- ers (municipalities) of the Group, based on historic performance and entity nature, have a low default probability. The credit risk on other financial assets is considered to be low. Therefore, the Group accepts the residual remaining credit risks. Limited ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 144 The table below summarizes the maturity profile of the Group’s financial liabilities based on contractual un- discounted payments, including interest and dividend on cumulative preference shares. As at 31 December 2022 Carrying amount Total Cash flows 0 to 3 months 3 to 12 months 1 - 5 years More than 5 years Debt to a third party 486 486 486 - - - Lease liabilities 7,761 8,277 454 1,170 6,653 - Trade creditors 21,115 21,115 21,115 - - - Contract liabilities 8,912 8,912 - 8,912 - - Other current liabilities 7,918 7,918 6,176 1,663 80 - Total 46,192 46,708 28,231 11,745 6,733 - Derivatives (1,210) (1,210) 37 (1,247) - - As at 31 December 2021 Carrying amount Total Cash flows 0 to 3 months 3 to 12 months 1 - 5 years More than 5 years Debts to credit institutions 215 215 - 215 - - Loan from related parties 463 591 - - - 591 Lease liabilities 8,382 9,099 364 1,130 6,672 933 Trade creditors 10,883 10,883 10,883 - - - Payables to related parties 534 534 534 - - - Contract liabilities 174 174 174 - - - Other current liabilities 6,977 6,977 2,626 4,351 - - Total 27,628 28,473 14,581 5,696 6,672 1,524 Derivatives (343) (343) (303) (40) - - 28. FINANCIAL INSTRUMENTS - HEDGE ACCOUNTING The Group applies hedge accounting. At the moment of entering into a hedge relationship, this is documented by the Group. By means of a test, the company periodically assesses the effectiveness of the hedge relation- ship. This may be achieved by comparing the critical characteristics of the hedge instrument with those of the covered position or by comparing the change in fair value of the hedge instrument and the covered position. If applicable, the ineffective share of the value adjustment of the currency futures contracts is accounted for in the profit and loss account under financial income and expenses. USE OF DERIVATIVES The Group is exposed to financial market risk in the normal course of its business operations. The Group uses derivatives for economic hedging purposes to manage its foreign currency risk. The primary objective of the Group’s hedging activities is to manage the potential year-on-year volatility caused by foreign-currency movements on its net earnings by hedging the anticipated net exposure of foreign currencies resulting from foreign-currency purchases. The objective of economic hedging is to enter into positions with an opposite risk profile to an identified risk exposure to reduce that exposure. The single risk which is being hedged is foreign currency exchange rate risk. This risk is primarily hedged with foreign exchange forwards/swaps. The Group’s hedging activities do not have an effect on timing or amount of forecasted transactions. CASH FLOW HEDGE ACCOUNTING Derivatives that qualify for hedge accounting under IFRS are classified and accounted for in accordance with the nature of the hedged exposure and the type of IFRS hedge accounting model that is applicable. The three models applicable under IFRS are: fair value hedge accounting, cash flow hedge accounting, and hedge accounting of a net investment in a foreign operation. The Group applies cash flow hedge accounting to highly probably future cash flows, namely forecasted purchases in a currency other than the Group’s functional currency (€). The Group enters into foreign exchange forwards and swaps to protect against volatility caused by for- eign-currency movements on its net earnings by hedging the anticipated net exposure of foreign currencies resulting from foreign-currency purchases. The Group hedges the net anticipated exposures up to the date on which the forecasted transaction is expected to occur. The amounts and timing of future cash flows are projected based on contractual terms. These projected cash flows form the basis for identifying the notional amount subject to foreign currency exchange rate risk that is designated under cash flow hedge accounting. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 145 From the derivatives, the Group decides on a contract basis to either allocate the instrument its entirety or to split the spot and the forward element and only designate the spot element as a hedge instrument. The Group determines an economic relationship between the cash flows of the hedged item and the hedging instrument based on an evaluation of the qualitative characteristics of these items and the hedged risk. The Group considers whether the critical terms of the hedged item and hedging instrument closely align when assessing the presence of an economic relationship. The Group evaluates whether the cash flows of the hedged item and the hedging instrument respond similarly to the hedged risk, such as changes in the foreign exchange rates. At the moment of entering into a hedge relationship, this is documented by the Group. The Group periodically assesses the effectiveness of the hedge relationship and analysis the identified potential sources of ineffec- tiveness. The Group has identified the following potential sources of ineffectiveness: • Differences in timing of cash flows of the hedged item(s) and hedging instrument(s); • Incidental notional over-hedging; • The lack of collateralization of the derivatives, and the resulting counterparty credit risk; • Difference between hedged on-shore and hedging off-shore foreign currency exchange rate; • The Group assumes that the fair value of the hedging instrument is nil at inception of the hedge. Should the fair value of the hedging instrument not be zero at the inception of the hedge, ineffectiveness may arise. The ineffectiveness portion is accounted for in the consolidated statement of profit or loss under Finance expenses, net. The hedge ratio is the ratio between the amount of hedged item and the amount of hedging instrument. The Group has established a hedge ratio of 1:1 (100%). The Group uses the following derivative financial instruments in a cash flow hedge accounting relationship: As at 31 December 2022 As at 31 December 2021 Carrying amount hedging instruments 1,210 40 Notional amount hedging instruments 42,397 (387) As at 31 December 2022, the carrying amount of the derivatives includes no derivatives with no hedge des- ignation. In 2021 the carrying amount of the derivatives included one derivatives with no hedge designation. The fair value of this contract amounts to €303. The notional amount of the hedging instruments relate to sales contracts of €45,869 and purchase contracts of €3,472. The derivatives used for cash flow hedge accounting are included in the statement of financial position line- item Other current financial assets respectively liabilities. Derivatives 2022 2021 Other current financial assets 1,247 343 Other current financial liabilities (37) - As at 31 December 1,210 343 The average currency exchange rate used in cash flow hedge accounting is for 2022: €/RMB 7.1118 (2021: 7.5819). €/NOK 10.2475 (2021: n/a). Cash flow hedging – change in fair value of hedged items Change in value used for calculating hedge ineffectiveness for the period Of which are changes in spot rates (hedged risk) Of which are amortization of forward element Of which are changes in fair value attributable to cur- rency basis spreads As at 31 December 2022 FX - - - - As at 31 December 2021 FX 22 1 29 (8) Gains and losses on the effective portions of derivatives designated under cash flow hedge accounting are recognised in Other Comprehensive Income (hedge reserve). In 2021, the changes in fair value of the forward contract and foreign currency basis spread of a financial instrument, in relation to a transaction-related hed- ged item accumulated in the cost of hedging reserve, are reclassified to profit or loss only when the hedged ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 146 transaction affects profit or loss, or included as a basis adjustment to the non-financial hedged item. In 2022, the Group elected not to accumulate the changes in fair value of the forward contract and foreign currency basis spread of a financial instrument in the cost of hedging reserve. The following table shows the cash flow hedge accounting impact on profit or loss and comprehensive inco- me, excluding tax impact: Cash flow hedging – impact of hedging instruments on the statement of profit or loss and other comprehensive income Hedging gains (+) or losses (-) (OCI) Hedge ineffectiveness recognised in the statement of profit or loss, gain (+) / loss (-) Amount reclassified from cash flow hedge reserve As at 31 December 2022 FX 1,161 93 144 As at 31 December 2021 FX (8) - (870) The following table provides the fair value measurement hierarchy of the Group’s assets and liabilities: Fair value measurement using Fair value measurement hierarchy for assets as at 31 December 2022 and 2021 Date of valuation Total Quoted prices in active markets (Level 1) Significant observable æinputs (Level 2) Significant unobservable inputs (Level 3) Assets measured at fair value: Foreign exchange forward/ swaps contracts 31 December 2022 1,210 - 1,210 - Foreign exchange forward/ swaps contracts 31 December 2021 343 - 343 There were no transfers between Level 1 and Level 2 during 2022 and 2021. The valuation technique used in the measurement of the Level 2 securities is based on observable market data. The inputs used in the measurement represent FX and interest rate curves. 29. EVENTS AFTER THE BALANCE SHEET DATE Subsequent to 31 December 2022 the following event occurred: On 11 November 2022, the Group approved the contribution in the new issued shares of ZES. On 21 Feb- ruary 2023 the capital contribution was approved and paid. The Group contributed €2.35 million and as a result the interest in the associate increased to 49.39%. At the end of 2022, the Group signed a contract with its associate ZES for the delivery of nine Mobile Energy Containers. Ebusco has developed the Mobile Energy Containers, which are expected to be 100% completed and delivered to the customer in 2023 upon which revenue will be recognized (€10.4 million). On 23 February 2023 an addendum to the contract was signed to purchase 11 additional Mobile Energy Containers, expected to be completed and delivered in 2024. Downstream transactions of sales to the associate will be eliminated. These containers can be used in hybrid electric barges, providing a fully green alternative requiring signifi- cantly less fuel and emitting significantly less CO2 than conventional diesel-powered barges. In July 2022 the Group signed a letter of intent with SNC Renault Cléon to lease 21,092m 2 in the Metropole Rouen. On 9 January 2023 the lease agreement was signed, with the fulfilment of several conditions precedent. The conditions were fulfilled on 28 February 2023, after which the lease took effect. This lo- cation will be used as a production facility and will function as the French headquarter of the Group. The site is expected to be fully operational early 2024 and will have an initial capacity of 500 buses per year with the option to expand capacity in later years. The initial investment to equip the facility and convert it to Ebusco standards is expected to be €15 million. Reference is made to note 26 for the estimated future lease liability and right-of-use asset. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 147 COMPANY FINANCIAL STATEMENTS CONTENT Company statement of profit or loss 148 Company statement of financial position 149 Notes to the company financial statements 150 147 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 148 COMPANY STATEMENT OF PROFIT OR LOSS In thousands of euro Notes 2022 2021 Other operating income B 878 659 Total operating income 878 659 Employee benefit expenses C (1,651) (5,778) Amortisation and depreciation expenses (26) (2) Other operating expenses D (3,066) (5,933) Total operating expenses (4,743) (11,713) Operating result (3,865) (11,054) Finance income/(expenses), net E 1,063 (576) Result before income tax (2,802) (11,630) Income tax credit/(expense) F 704 2,113 Share of result of an associate G - 7,427 Result from group companies H (29,619) (24,298) Result after income tax (31,717) (26,388) ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 149 COMPANY STATEMENT OF FINANCIAL POSITION Before appropriation of profit, in thousands of euro Notes As at 31 December 2022 As at 31 December 2021 Assets Right-of-use assets 26 41 Intangible assets 47 48 Investments in group companies H 237,968 44,577 Loans to group companies associates I 4,613 23,250 Deferred tax assets F 5,072 4,587 Non-current assets 247,726 72,503 Receivables from group companies J 26,628 73,828 Receivables from related parties - 24 Other current assets K 554 1,192 Cash and cash equivalents L - 164,834 Current assets 27,182 239,878 Total assets 274,908 312,381 Notes As at 31 December 2022 As at 31 December 2021 Equity Share capital 590 590 Share premium 315,324 314,767 Legal reserves 16,168 9,207 Other reserves 166 - Retained earnings (26,534) 5,835 Net result (31,717) (26,388) Total Equity M 273,997 304,011 Provisions N - 3,976 Lease liabilities 12 28 Non-current liabilities 12 28 Trade payables 493 372 Other current liabilities P 391 3,981 Current lease liabilities 15 13 Current liabilities 899 4,366 Total liabilities 911 8,370 Total equity and liabilities 274,908 312,381 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 150 NOTES TO THE COMPANY FINANCIAL STATEMENTS A. ACCOUNTING POLICIES FOR THE COMPANY FINANCIAL STATEMENTS The Company financial statements of Ebusco Holding N.V. (hereafter ‘the Company’) have been prepared in accordance with Part 9, Book 2 of the Dutch Civil Code. In accordance with article 362 (8), Book 2 of the Dutch Civil Code, the Company’s financial statements have been prepared on the basis of the accounting principles for recognition, measurement and determination of profit, as applied in the consolidated financial statements. These principles also include the classification and presentation of financial instruments, being equity instru- ments or financial liabilities. The ordinary shares of Ebusco Holding N.V. are (partly) listed on Euronext Amsterdam. All amounts are stated in thousands of EUR, unless otherwise stated. The accounting policies used in the preparation of the Company Financial Statements are the same as those used in the preparation of the Consolidated Financial Statements (in accordance with article 362 (8), Part 9 of Book 2 of the Dutch Civil Code). See the notes to the Consolidated Financial Statements. In addition to these accounting policies, the following accounting policy applies to the Company financial state- ments: Investments in group companies are presented using the equity method. Goodwill paid upon acquisition of in- vestments in group companies is included in the net equity value of the investment and is not shown separately on the face of the balance sheet. The Company recognises a provision which makes use of the option to elimi- nate intercompany expected credit losses against the book value of loans and receivables to group companies, instead of elimination against the investments in group companies Loans provided to group companies are stated at amortized cost, less impairment. B. OTHER OPERATING INCOME Other operating income relates to the recharge of the remuneration expenses of the Management Board mem- bers to Ebusco B.V. C. EMPLOYEE BENEFIT EXPENSES Employee benefit expenses can be specified as follows: Employee benefit expenses 2022 2021 Wages and salaries 1,249 692 Pension costs 153 29 Share based payments expenses 166 - Other compensation expenses - 5,000 Temporary staff 58 46 Car expenses 21 3 Other staff expenses 4 8 Total 1,651 5,778 All three members of the Management Board are included in the payroll administration of the Company as of 17 October 2021. The remuneration of members of the Supervisory Board is included in ‘wages and salaries’. The number of persons with an employment contract at 31 December 2022 was 3 (31 December 2021: 3), includ- ing all members of the Management Board; all persons have their place of residence in the Netherlands. Further reference is made to Note 7 of the consolidated financial statements. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 151 D. OTHER OPERATING EXPENSES Other operating expenses mainly consist of insurance expenses, audit and advisory fees. E. FINANCE INCOME/(EXPENSES), NET Finance expenses, net can be specified as follows: Finance expenses, net 2022 2021 Net foreign exchange result 18 4 Intercompany interest income 1,505 1,210 Financial income 1,523 1,214 Interest expense cumulative preference shares - (665) Interest Mezzanine facility - (668) Interest expense intercompany (4) - Interest expense third party (369) (213) Interest on lease liabilities (1) - Other finance expenses (86) (244) Total (460) (1,790) Finance expenses, net 1,063 (576) F. INCOME TAX The deferred tax asset recognised at 31 December 2022 of €5,072 (31 December 2021: €4,587) relates to tax losses carried forward (€19,659 multiplied by the enacted domestic income tax rate of 25.8%). In 2022, accrued discretionary fees regarding the IPO in the amount of €557 was released in favor of share premium. In 2021, IPO expenses in the amount of €9,897 were directly charged against share premium, which resulted in the recognition of a deferred tax asset of €2,474. The remaining balance of €2,114 had been recognised against the statement of profit or loss. Income tax is allocated to individual members of the fiscal unity as if they were independently liable for cor- porate income tax. As a consequence, the tax losses carried forward amount of €19,660 are the fiscal losses attributable to Ebusco Holding N.V. G. INVESTMENTS IN ASSOCIATES The Company had a 20% interest in Pondus Holding B.V. and its subsidiaries as at 31 December 2020, and acquired an additional 60% interest in April 2021 and the remaining 20% in October 2021. Accordingly, Pondus Holding B.V. is a 100% subsidiary of the Company from 31 December 2021 onwards. Reference is made to Note 5 of the consolidated financial statements. H. INVESTMENTS IN GROUP COMPANIES Group companies are all entities (including intermediate holding companies) over which the Company has con- trol. The Company controls an entity when it is exposed, or has rights, to variable returns from its involvement with the group company and has the ability to affect those returns through its power over the group company. Group companies are recognised from the date on which control is transferred to the Company or its intermedi- ate holding entities. They are derecognised from the date that control ceases. The Company applies the acquisition method to account for the acquisition of group companies, consistent with the approach identified in the consolidated financial statements. The consideration transferred for the acquisi- tion of a group company or business comprises the fair value of assets transferred, the liabilities incurred and the equity interests issued by the Group. The consideration transferred includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Identifiable assets acquired, and liabilities and contingent liabilities assumed, in an acquisition are initially measured at their fair values at the acquisition date ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 152 and are subsumed in the net asset value of the investment in consolidated group companies. Goodwill paid upon acquisition of investments in group companies is included in the net equity value of the investment and is not shown separately on the face of the balance sheet. Acquisition-related costs are expensed as incurred. Investments in group companies are measured using the equity method. The measurement of the financial fixed assets under the equity method is based on the measurement principles of assets, provisions and liabilities, and the determination of profit as applied in the consolidated financial statements. When group companies have an equity deficit they are measured at zero under the equity method, unless the Company has given a liability undertaking or any other guarantee for the consolidated group company. In case of the later, the Company recognizes a provision in the statement of financial position equal to the negative net asset value of the group company. The Company has direct and indirect interests in the group companies listed in Note 2 of the consolidated finan- cial statements. Set out below are the carrying amounts of the investment in consolidated group companies and the movements during the period: Investments in group companies 2022 2021 As at 1 January 44,577 28,512 Foreign exchange differences 20 (4) Acquisition through business combinations - 36,989 Result of group companies (29,619) (24,298) Reclassification to/(from) provision participations in group companies (3,976) 3,718 Cash flow hedge, net of tax 966 460 Capital contribution 226,000 - Repayment of convertible loan - (800) As at 31 December 237,968 44,577 The Group performed several capital contributions during the financial year in order to settle intercompany posi- tions. These capital contributions were recognised as share premium at the respective entities. • Capital contribution of €220,000 from Ebusco Holding N.V. to Ebusco B.V.; • Capital contribution of €6,000 from Ebusco Holding N.V. to Pondus Holding B.V.; I. LOANS TO GROUP COMPANIES As at 31 December 2021 the loans to group companies include a contractual right to receive cash from Ebusco B.V. of €17,750, following the acquisition of 1 preference share issued by Ebusco B.V. on 1 July 2020 for the amount of €9,750 and a subordinated loan on 15 July 2021 for the amount of €8,000. The latter became an ordinary intercompany loan after cancellation of the credit facility agreement in December 2021. Both amounts have been repaid in 2022. Ebusco Holding N.V. is entitled to an 8% share of the investment amount, to be paid on an annual basis, based on profits available for distribution. As the contractual right is classified as a long-term receivable, an interest income accrual has been recognised against the statement of profit or loss of €472 in 2022 (2021: €780). The interest income accrual has been recorded in the current account with Ebusco B.V. In addition, a loan to Pondus Operations B.V. is included of €5,500 as at 31 December 2021 including accrued interest of €245 (interest rate: 7%). The loan to Pondus Operations B.V. has been provided in April 2021 at the time the Company acquired 60% of the voting shares in Pondus Holding B.V. to enable Pondus Operation B.V. to redeem the RVO loan received from the Dutch government. In 2022 part of the loan was repaid by Pondus Oper- ations B.V. (€1,237) and additional interest accrued of €350. Loans to group companies can be specified as follows: Loans to group companies As at 31 December 2022 As at 31 December 2021 Loan receivable from Ebusco B.V. - 17,750 Loan receivable from Pondus Operations B.V. 4,613 5,500 Total 4,613 23,250 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 153 The movement schedule of loans to group companies can be specified as follows: Loans to group companies 2022 2021 As at 1 January 23,250 9,750 Acquisition through business combination - 5,255 Repayment (18,987) - New loan receivable - 8,000 Interest 350 245 Total 4,613 23,250 J. RECEIVABLES FROM GROUP COMPANIES Receivables from group companies can be specified as follows: Receivables from group companies As at 31 December 2022 As at 31 December 2021 Current account Ebusco B.V. 23,363 72,713 Current account Ebusco Australia Pty Ltd - 261 Current account Pondus Operations B.V. 1,437 703 Current account Ebusco Manufacturing B.V. 325 150 Current account Ebusco Energy B.V. 1,503 1 Total 26,628 73,828 K. OTHER CURRENT ASSETS Other current assets as at 31 December 2022 mainly include refundable VAT of €533 (31 December 2021: €1,150) and prepaid expenses of €21 (31 December 2021: €42). L. CASH AND CASH EQUIVALENTS Cash and cash equivalents are all freely available to the Company. The cash and cash equivalents at 31 De- cember 2022 is nil as excess cash is paid to the cash pool in Ebusco B.V. M. EQUITY For a breakdown of equity attributable to equity holders, see the Consolidated Statement of Changes in Equity and related notes including Note 19 of the consolidated financial statements. LEGAL RESERVES Based on Dutch law, a legal reserve needs to be established for currency translations, cash flow hedges, and capitalised costs of development assets. The legal reserve cannot be used for dividend distribution and is therefore restricted in usage (see paragraph below). Legal reserves As at 31 December 2022 As at 31 December 2021 Foreign exchange differences 14 (6) Hedge reserves 966 6 Revaluation reserve 7,450 7,450 Development assets at subsidiaries 7,738 1,757 Total 16,168 9,207 LIMITATIONS IN THE DISTRIBUTION OF SHAREHOLDERS’EQUITY As at 31 December 2022, pursuant to Dutch law, certain limitations exist relating to the distribution of share- holders’ equity. Such limitations relate to legal reserves required by Dutch law of €16,168 (2021: €9,207). OTHER RESERVES In 2022 the Company established a share based payment reserve of €166 (2021: €0). ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 154 As the Company incurred a loss in 2022, it is proposed to the Annual General Meeting of Shareholders to charge the loss attributable to the equity holders of the Group to the retained earnings and not to pay any dividend re- lating to the financial year 2022. N. PROVISIONS Provisions have been recognised for the negative net asset value of certain subsidiaries of the Company, which can be specified as follows. Provisions As at 31 December 2022 As at 31 December 2021 Ebusco Australia Ply Ltd - 245 Ebusco Energy B.V. - 1 Pondus Holding B.V. - 3,730 Total - 3,976 O. OTHER CURRENT LIABILITIES Other current liabilities as at 31 December 2022 mainly consists of payroll taxes (€92), audit fees (€165) and other advisory costs (€63). P. REMUNERATION KEY MANAGEMENT Reference is made to Note C to the Company financial statements and Note 7 to the consolidated financial statements. Q. RELATED PARTIES In addition to Note 24 of the consolidated financial statements, all companies within the Group are also consid- ered to be related parties of Ebusco Holding N.V. R. COMMITMENTS AND CONTINGENCIES Reference is made to Note 25 to the consolidated financial statements. Pursuant to the provisions of section 403, Part 9, Book 2 of the Netherlands Civil Code, the Company has as- sumed joint and several liability for the debts arising out of legal transactions of the following group companies: • Ebusco B.V. • Ebusco Energy B.V. • Ebusco Manufacturing B.V. • Pondus Holding B.V. • Pondus Operations B.V. • Pondus R&D B.V. The joint and several liability for Pondus Holding B.V. and Pondus R&D ceased to exist at the time of the mergers as disclosed in Note 2 of the consolidated financial statements. Being the head of the Ebusco Holding N.V. tax entity, the company is liable for the income tax and VAT liability of the fiscal unity as a whole. S. DIVIDEND No dividends have been paid in both 2021 and 2022. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 155 T. AUDITORS’ FEES Audit, Other assurance and Other non-audit fees incurred related to the financial years 2022 and 2021 can be specified as follows: 2022 2021 Total fees in € ‘000 Ernst & Young Accountants LLP EY network firms in the Netherlands Total Ernst & Young Accountants LLP EY network firms in the Netherlands Total Audit services 774 - 774 50 - 50 Other assurance services - - - - - - Other non-audit services - - - - - - Total 774 - 774 50 - 50 * Incurred audit fees relate to the audit of the consolidated financial statements of 2021. In 2021, total audit expenses amounted to €1,542, which largely related to the audit services provided for the Special Purpose Financial Statements 2018-2020. These are therefore not included in the table above. U. SUBSEQUENT EVENTS For information regarding subsequent events, reference is made to Note 29 to the consolidated financial statements. OTHER NOTES As approved for publication, Deurne, 29 March 2023 Management Board Supervisory Board P.H.A.M. Bijvelds, Chief Executive Officer D.J. Haank, Chairman P. van Beers, Chief Financial Officer C.W. Gorter B.H.M.J. Fleuren, Chief Operating Officer J. Drost R. Spoor R.H. de Boer ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION OTHER INFORMATION CONTENT ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION Provisions of the Articles of Association relating to profit appropriation 157 Independent auditor’s report 158 Five year overview 165 Non-IFRS measures 166 Organisation Ebusco 170 156 PROVISIONS OF THE ARTICLES OF ASSOCIATION RELATING TO PROFIT APPROPRIATION Pursuant to article 31 of the articles of association of the Company, the Management Board, with the approval of the Supervisory Board, may decide that profits realised during a financial year are fully or partially appropriated to increase and/or from reserves (article 31.1). The profits remaining shall be put at the disposal of the General Meeting. The Management Board, with the approval of the Supervisory Board, shall make a proposal for that purpose. A proposal to pay a dividend shall be dealt with as a separate agenda item at the General Meeting of Shareholders (article 31.2). The Company does not intend to declare or pay dividends for the financial year ending 31 December 2022 or in the medium term. The Company anticipates that for the foreseeable future it will retain all its future earnings for use in the development of its business, its international expansion and growth strategy to create share- holder value, to maintain a healthy financial structure and for general corporate purposes. The net loss attributable to equity holders of the Group for 2022 of €31.7 million (2021: net loss of €26.3 million) will be deducted from retained earnings. 157 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION INDEPENDENT AUDITOR’S REPORT To: the shareholders and supervisory board of Ebusco Holding N.V. REPORT ON THE AUDIT OF THE FINANCIAL STATEMENTS 2022 INCLUDED IN THE ANNUAL REPORT OUR OPINION We have audited the nancial statements 2022 of Ebusco Holding N.V. based in Deurne (the Netherlands). The nancial statements comprise the consolidated and company nancial statements. In our opinion: • The accompanying consolidated nancial statements give a true and fair view of the nancial posi- tion of Ebusco Holding N.V. as at 31 December 2022 and of its result and its cash ows for 2022 in accordance with International Financial Reporting Standards as adopted by the European Union (EU-IFRS) and with Part 9 of Book 2 of the Dutch Civil Code • The accompanying company nancial statements give a true and fair view of the nancial position of Ebusco Holding N.V. as at 31 December 2022 and of its result for 2022 in accordance with Part 9 of Book 2 of the Dutch Civil Code The consolidated nancial statements comprise: • The consolidated statement of nancial position as at 31 December 2022 • The following statements for 2022: the consolidated statement of pro t and loss and other comprehensive income, consolidated statement of changes in equity and consolidated statement of cash ows • The notes comprising a summary of the signi cant accounting policies and other explanatory information The company nancial statements comprise: • The company statement of nancial position as at 31 December 2022 • The company statement of pro t and loss for 2022 • The notes comprising a summary of the accounting policies and other explanatory information BASIS FOR OUR OPINION We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing. Our responsibilities under those standards are further described in the Our responsibilities for the audit of the nancial statements section of our report. We are independent of Ebusco Holding N.V. (the company) in accordance with the EU Regulation on speci c requirements regarding statutory audit of public-interest entities, the “Wet toezicht accountantsorganisaties” (Wta, Audit rms supervision act), the “Verordening inzake de onafhankelijkheid van accountants bij assur- ance-opdrachten” (ViO, Code of Ethics for Professional Accountants, a regulation with respect to indepen- dence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the “Verordening gedrags- en beroepsregels accountants” (VGBA, Dutch Code of Ethics). We believe the audit evidence we have obtained is suf cient and appropriate to provide a basis for our opinion. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 158 INFORMATION IN SUPPORT OF OUR OPINION We designed our audit procedures in the context of our audit of the nancial statements as a whole and in forming our opinion thereon. The following information in support of our opinion and any ndings were addressed in this context, and we do not provide a separate opinion or conclusion on these matters. OUR UNDERSTANDING OF THE BUSINESS Ebusco Holding N.V. is publicly listed on Euronext Amsterdam. The Company is dedicated to the development, production, and bringing to market of fully electric city and regional buses and the associated ecosystem. We have paid speci c attention in our audit to a number of areas driven by the operations of the Company and our risk assessment. We determined materiality and identi ed and assessed the risks of material misstatement of the nancial statements, whether due to fraud or error in order to design audit procedures responsive to those risks and to obtain audit evidence that is suf cient and appropriate to provide a basis for our opinion. MATERIALITY Materiality €650 Benchmark applied 0.8% of a three year average of revenue over the period 2020 to 2022 Explanation Based on our professional judgment, we consider (average) revenue to be the most appropriate basis to determine materiality. We consider (average) revenue to be the most relevant measure as this is a key performance indicator for the company. As revenues have been impacted by the COVID-19 pandemic due to lower order intake and supply chain constraints, we have used the average revenues of the company for the years 2020, 2021 and 2022 as a basis. We have also taken into account misstatements and/or possible misstatements that in our opinion are mate- rial for the users of the nancial statements for qualitative reasons. We agreed with the supervisory board that misstatements in excess of €32.5, which are identi ed during the audit, would be reported to them, as well as smaller misstatements that in our view must be reported on qualitative grounds. SCOPE OF THE GROUP AUDIT Ebusco Holding N.V. is at the head of a group of entities. The nancial information of this group is included in the consolidated nancial statements. Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk pro le of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of nancial information or speci c items. Our group audit mainly focused on signi cant group entities Ebusco B.V. and Ebusco Holding N.V. We performed the audit on the complete nancial information (full scope) and the remaining entities were assigned a speci c scope, with the focus on cash and cash equivalents and certain expense accounts. The audit has been centrally performed by the audit team in the Netherlands. In total these procedures represent 97% of the group’s total assets and 100% of gross revenues. By performing the procedures mentioned above, we have been able to obtain suf cient and appropriate audit evidence about the group’s nancial information to provide an opinion on the consolidated nancial statements. TEAMING AND USE OF SPECIALISTS We ensured that the audit team has the appropriate skills and competences which are needed for the audit of a listed client in this industry. We included specialists in the areas of IT audit, forensics, income tax and valuation. OUR FOCUS ON CLIMATE-RELATED RISKS AND THE ENERGY TRANSITION Climate change and the energy transition are high on the public agenda. Against this background it is Ebusco’s vision to drive the transition to sustainable transport. The management board summarized the Company’s role in this ecosystem in the section Strategy of the management report. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 159 As part of our audit of the nancial statements, we evaluated the effects of the energy transition are taken into account in estimates and signi cant assumptions. Furthermore, we read the management report and considered whether there is any material inconsistency between the non- nancial information in the Our Responsibility section and the nancial statements. OUR FOCUS ON FRAUD AND NON-COMPLIANCE WITH LAWS AND REGULATIONS OUR RESPONSIBILITY Although we are not responsible for preventing fraud or non-compliance and we cannot be expected to detect non-compliance with all laws and regulations, it is our responsibility to obtain reasonable assurance that the nancial statements, taken as a whole, are free from material misstatement, whether caused by fraud or error. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. OUR AUDIT RESPONSE RELATED TO FRAUD RISKS We identi ed and assessed the risks of material misstatements of the nancial statements due to fraud. During our audit we obtained an understanding of Ebusco Holding N.V. and its environment and the compo- nents of the system of internal control, including the risk assessment process and the management board’s process for responding to the risks of fraud and monitoring the system of internal control and how the super- visory board exercises oversight, as well as the outcomes. We refer to section Risk management and internal control of the management board report for the manage- ment board’s (fraud) risk assessment. We evaluated the design and relevant aspects of the system of internal control and in particular the fraud risk assessment, as well as the code of conduct, whistle blower procedures and incident registration. We evaluated the design and the implementation and, where considered appropriate, tested the operating effec- tiveness, of internal controls designed to mitigate fraud risks. As part of our process of identifying fraud risks, we evaluated fraud risk factors with respect to nancial reporting fraud, misappropriation of assets and bribery and corruption in close co-operation with our forensic and legal specialists. We evaluated whether these factors indicate that a risk of material misstatement due to fraud is present. We incorporated elements of unpredictability in our audit. We also considered the outcome of our other audit procedures and evaluated whether any ndings were indicative of fraud or non-compliance. As in all of our audits, we addressed the risks related to management override of controls. For these risks we have performed procedures among others to evaluate key accounting estimates for management bias that may represent a risk of material misstatement due to fraud, in particular relating to important judg- ment areas and signi cant accounting estimates as disclosed in Note 4 to the nancial statements including percentage of completion of customer contracts. We have also used data analysis to identify and address high-risk journal entries and evaluated the business rationale (or the lack thereof) of signi cant extraordinary transactions, including those with related parties. The following fraud risks identi ed did require signi cant attention during our audit. Presumed risks of fraud in revenue recognition Fraud risk Revenue is one of the key performance indicators for Ebusco’s stakeholders, resulting in pressure on the management board to achieve certain revenue levels. We presumed that there are risks of fraud in revenue recognition. We evaluated that overstatement of revenues from the sale of zero emission buses and inaccurate valuation of contract assets specifically by inaccurate determination of percentage of completion of customer contracts in particular give rise to such risks. These revenues are disclosed in note 6.1 of the financial statements. Our audit approach We describe the audit procedures responsive to the inaccurate revenue recognition and valuation of contract assets specifically related to determining the percentage of completion for the sale of zero emission buses (including the risk of management override of controls) in the description of our audit approach for the key audit matter “Fraud risk related to revenue recognition”. We considered available information and made enquiries of relevant executives, directors (including legal, compliance and human resources) and the supervisory board. The fraud risk we identi ed, enquiries and other available information did not lead to speci c indications for fraud or suspected fraud potentially materially impacting the view of the nancial statements. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 160 OUR AUDIT RESPONSE RELATED TO RISKS OF NON-COMPLIANCE WITH LAWS AND REGULATIONS We performed appropriate audit procedures regarding compliance with the provisions of those laws and regu- lations that have a direct effect on the determination of material amounts and disclosures in the nancial statements. Furthermore, we assessed factors related to the risks of non-compliance with laws and regulations that could reasonably be expected to have a material effect on the nancial statements from our general industry expe- rience, through discussions with the management board, reading minutes, and performing substantive tests of details of classes of transactions, account balances or disclosures. We also inspected lawyers’ letters and correspondence with regulatory authorities and remained alert to any indication of (suspected) non-compliance throughout the audit. Finally we obtained written representations that all known instances of non-compliance with laws and regulations have been disclosed to us. OUR AUDIT RESPONSE RELATED TO GOING CONCERN As disclosed in Note 2 and Note 3 to the nancial statements, the nancial statements have been prepared on a going concern basis. When preparing the nancial statements, management made a speci c assess- ment of the company’s ability to continue as a going concern and to continue its operations for the foresee- able future. We discussed and evaluated the speci c assessment with the management board exercising professional judgment and maintaining professional skepticism. We considered whether the management board’s going concern assessment, based on our knowledge and understanding obtained through our audit of the nancial statements or otherwise, contains all relevant events or conditions that may cast signi cant doubt on the company’s ability to continue as a going concern. Based on our procedures performed, we did not identify material uncertainties about going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the nancial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern. OUR KEY AUDIT MATTERS Key audit matters are those matters that, in our professional judgment, were of most signi cance in our audit of the nancial statements. We have communicated the key audit matters to the supervisory board. The key audit matters are not a comprehensive re ection of all matters discussed. The key audit matter Acquisition of Pondus and valuation of the related goodwill which was included in our last year’s auditor’s report, is not considered a key audit matter for this year as it was related to a one off transaction. Fraud risk related to the occurrence of revenue recognition Risk As presented in Note 6 to the consolidated financial statements, revenue from contracts with customers resulting from the sale and supply of zero emission buses for the year ended 31 December 2022 amounted to €105.0 million. The revenue recognised is based on estimates and assumptions that require significant management judgment. At each reporting date the management board assesses the progress towards the complete satisfaction of the performance obligations taking into account all aspects in order to finalize the projects in line with contractual agreements. Inherent to the nature of estimates and assumptions is that these could be influenced by the manage- ment board and consequently we identified the risk of inappropriate revenue recognition and inaccurate valuation of the contract assets (as mentioned in the section Our audit response related to fraud risks), specifically relating to the deter- mination of the percentage of completion. Therefore we consider this a key audit matter. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 161 Fraud risk related to the occurrence of revenue recognition Our audit approach Our audit procedures included, amongst others, assessing the appropriateness of the Company’s accounting policies related to revenue recognition according to IFRS15 “Revenue from contracts with customers” and whether the accounting policies have been applied consistently or whether changes, if any, are appropriate in the circumstances. In addition, we evaluated the design and implementation of internal controls related to the completeness, accuracy and timing of the revenue recognised. In order to evaluate the significant judgements and estimates made by the management board, we read supporting contractual agreements, obtained evidence of transfer of control such as proof of delivery, tested the costs incurred, examined computation of costs progression and assessed the reasonable- ness of the estimated cost to complete included in the cost-to-cost method for performance obligation recognised over time. In addition, we have also observed the work in progress at year-end. Finally, we have performed back testing procedures over the management board’s estimate of the progress measure for the 2.2 and the 3.0 buses to assess the reasonableness of the assumptions made by the management board. We evaluated the disclosures in accordance with the requirements of EU-IFRS relevant to accounting estimates and whether significant judgments by the management board are disclosed. Key observations We concur with the estimates and assumptions made by the management board relating to revenue recognition and assessed that the related disclosures are in accordance with IFRS 15. Furthermore, we have assessed that the revenue recognised including the related direct costs and the accompanying management assumptions and estimates are within an acceptable range. REPORT ON OTHER INFORMATION INCLUDED IN THE ANNUAL REPORT The annual report contains other information in addition to the nancial statements and our auditor’s report thereon. Based on the following procedures performed, we conclude that the other information: • Is consistent with the nancial statements and does not contain material misstatements • Contains the information as required by Part 9 of Book 2 of the Dutch Civil Code for the management report and the other information as required by Part 9 of Book 2 of the Dutch Civil Code and as required by Sections 2:135b and 2:145sub-section2 of the Dutch Civil Code for the remuneration report We have read the other information. Based on our knowledge and understanding obtained through our audit of the nancial statements or otherwise, we have considered whether the other information contains mate- rial misstatements. By performing these procedures, we comply with the requirements of Part 9 of Book 2 and Section 2:135b sub-Section 7 of the Dutch Civil Code and the DutchStandard 720. The scope of the procedures performed is substantially less than the scope of those performed in our audit of the nancial statements. The management board is responsible for the preparation of the other information, including the manage- ment board report in accordance with Part 9 of Book 2 of the Dutch Civil Code and other information required by Part9 of Book 2 of the Dutch Civil Code. The management board and the supervisory board are responsible for ensuring that the remuneration report is drawn up and published in accordance with Sections2:135b and 2:145sub-section2 of the Dutch Civil Code. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 162 REPORT ON OTHER LEGAL AND REGULATORY REQUIREMENTS AND ESEF ENGAGEMENT We were engaged by the management board as auditor of Ebusco Holding N.V. on 30 October 2020, as of the audit for the year 2019 and have operated as statutory auditor ever since that date. NO PROHIBITED NON-AUDIT SERVICES We have not provided prohibited non-audit services as referred to in Article 5(1) of the EU Regulation on speci c requirements regarding statutory audit of public-interest entities. EUROPEAN SINGLE ELECTRONIC REPORTING FORMAT (ESEF) Ebusco Holding N.V. has prepared the annual report in ESEF. The requirements for this are set out in the Dele- gated Regulation (EU) 2019/815 with regard to regulatory technical standards on the speci cation of a single electronic reporting format (hereinafter: the RTS on ESEF). In our opinion the annual report prepared in the XHTML format, including the (partially) marked-up consoli- dated nancial statements as included in the reporting package by Ebusco Holding N.V., complies in all mate- rial respects with the RTS on ESEF. The management board is responsible for preparing the annual report, including the nancial statements, in accordance with the RTS on ESEF, whereby the management board combines the various components into a single reporting package. Our responsibility is to obtain reasonable assurance for our opinion whether the annual report in this reporting package complies with the RTS on ESEF. We performed our examination in accordance with Dutch law, including Dutch Standard 3950N “Assur- ance-opdrachten inzake het voldoen aan de criteria voor het opstellen van een digitaal verantwoordingsdoc- ument” (assurance engagements relating to compliance with criteria for digital reporting). Our examination included amongst others: • Obtaining an understanding of the entity’s nancial reporting process, including the preparation of the reporting package • Identifying and assessing the risks that the annual report does not comply in all material respects with the RTS on ESEF and designing and performing further assurance procedures responsive to those risks to provide a basis for our opinion, including: – Obtaining the reporting package and performing validations to determine whether the reporting package containing the Inline XBRL instance document and the XBRL extension taxonomy les, has been prepared in accordance with the technical speci cations as included in the RTS on ESEF – Examining the information related to the consolidated nancial statements in the reporting package to determine whether all required mark-ups have been applied and whether these are in accordance with the RTS on ESEF DESCRIPTION OF RESPONSIBILITIES REGARDING THE FINANCIAL STATEMENTS RESPONSIBILITIES OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD FOR THE FINANCIAL STATEMENTS The management board is responsible for the preparation and fair presentation of the nancial statements in accordance with EU-IFRS and Part 9 of Book 2 of the Dutch Civil Code. Furthermore, the management board is responsible for such internal control as the management board determines is necessary to enable the preparation of the nancial statements that are free from material misstatement, whether due to fraud or error. As part of the preparation of the nancial statements, the management board is responsible for assessing the company’s ability to continue as a going concern. Based on the nancial reporting framework mentioned, the management board should prepare the nancial statements using the going concern basis of accounting unless the management board either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so. The management board should disclose events and circumstances that may cast signi cant doubt on the company’s ability to continue as a going concern in the nancial statements. The supervisory board is responsible for overseeing the company’s nancial reporting process. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 163 OUR RESPONSIBILITIES FOR THE AUDIT OF THE FINANCIAL STATEMENTS Our objective is to plan and perform the audit engagement in a manner that allows us to obtain suf cient and appropriate audit evidence for our opinion. Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to in uence the economic decisions of users taken on the basis of these nancial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identi ed misstatements on our opinion. We have exercised professional judgment and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing, ethical requirements and independence requirements. The Information in support of our opinion section above includes an informative summary of our responsibilities and the work performed as the basis for our opinion. Our audit further included among others: • Performing audit procedures responsive to the risks identi ed, and obtaining audit evidence that is suf - cient and appropriate to provide a basis for our opinion • Obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the company’s internal control • Evaluating the appropriateness of accounting policies used and the reasonableness of accounting esti- mates and related disclosures made by the management board • Evaluating the overall presentation, structure and content of the nancial statements, including the disclosures • Evaluating whether the nancial statements represent the underlying transactions and events in a manner that achieves fair presentation COMMUNICATION We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and signi cant audit ndings, including any signi cant ndings in internal control that we identify during our audit. In this respect we also submit an additional report to the audit committee of the supervisory board in accor- dance with Article11 of the EU Regulation on speci c requirements regarding statutory audit of public-in- terest entities. The information included in this additional report is consistent with our audit opinion in this auditor’s report. We provide the supervisory board with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reason- ably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the supervisory board, we determine the key audit matters: those matters that were of most signi cance in the audit of the nancial statements. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, not communicating the matter is in the public interest. Eindhoven, 29 March 2023 Ernst & Young Accountants LLP signed by J.C.F. Lemmens ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 164 FIVE YEAR OVERVIEW 2022 2021 2020 2019 2018 Results (in thousands of euro) Revenue 111,617 24,265 99,994 48,924 21,357 Gross pro t 1/2 15,633 1,220 39,657 16,785 7,374 Result for the year (32,193) (26,797) 16,659 3,374 391 Result for the year attributable to Equity holders of the Group (31,717) (26,388) 16,659 3,374 391 EBITDA 2/3 (34,808) (34,240) 27,135 8,775 3,218 Underlying EBITDA 2/4 (34,808) (20,546) 27,135 8,775 3,218 EBIT 2/5 (40,435) (39,571) 23,776 5,463 821 Underlying EBIT 2/6 (40,435) (25,877) 23,776 5,463 821 Capital expenditure 2/7 (9,725) (4,932) (3,814) (418) (1,997) Net cash ow from operating activities (99,058) (19,390) (11,427) (4,959) 3,121 Net cash ow from investing activities (8,496) (27,284) (3,994) (194) (2,247) Net cash ow from nancing activities (5,172) 227,734 39,473 (1,337) 6,693 Free cash ow 2/8 (107,529) (25,574) (15,878) (5,457) 1,039 Balance sheet (in thousands of euro) Total Assets 320,616 332,715 104,459 35,271 31,267 Total Equity 273,458 303,948 28,042 11,937 8,748 Net debt, excluding lease liabilities 2/9 (94,726) (207,245) 31,203 13,470 6,642 Net debt, including lease liabilities 2/10 (86,965) (198,863) 32,985 15,120 8,421 Net working capital 2/11 106,299 41,321 58,540 20,297 5,873 Capital employed 2/12 279,903 311,662 42,298 18,239 14,905 Ratios Gross pro t as % of revenue 14.0% 5.0% 39.7% 34.3% 34.5% EBITDA as % of revenue (31.2%) (141.1%) 27.1% 17.9% 15.1% Underlying EBITDA as % of revenue (31.2%) (84.7%) 27.1% 17.9% 15.1% EBIT as % of revenue (36.2%) (163.1%) 23.8% 11.2% 3.8% Underlying EBIT as % of revenue (36.2%) (106.6%) 23.8% 11.2% 3.8% Non-fi nancial Orders received (# buses) 414 240 39 191 102 Buses delivered (# buses) 75 139 103 101 5 km (in millions) driven 70 39 17 Full-time employees per year-end, excluding temporary employees 418 219 124 89 44 Full-time employees yearly average, excluding temporary employees 321 171 106 59 34 Full-time employees per year-end, including temporary employees 607 309 145 105 57 Full-time employees yearly average, including temporary employees 446 227 122 76 46 Number of shares outstanding (in thousands) At year-end 13 59,039 59,039 44,999 44,999 44,999 On average 13 59,039 47,502 44,999 44,999 44,999 Per ordinary share Basic earnings per share 13 (0.54) (0.56) 0.37 0.07 0.01 Highest share price 14 27.00 31.30 - - - Lowest share price 14 13.06 21.85 - - - Share price at year-end 14 13.17 27.00 - - - Notes: 1 Gross pro t is de ned as the Group's top-line earnings, being total revenue, less cost of materials (being the direct costs of goods sold). 2 These items are non-IFRS Measures. For further information about these non-IFRS Measures, and the reasons why we believe they are important for an understanding of the perfor- mance of our company, please refer to our commentary on non-IFRS Measures as of pages 168-171. 3 EBITDA is de ned as operating result plus depreciation and amortisation expenses. 4 Underlying EBITDA is de ned as operating result plus depreciation and amortisation expenses, adjusted for one-offs, gains and losses on the sale of assets, restructuring and related charges, and other items considered not to be directly related to the underlying operating performance. 5 EBIT is de ned as operating result. 6 Underlying EBIT is de ned as operating result adjusted for impairments of non-current assets, gains and losses on the sale of assets, restructuring and related charges, and other items considered not to be directly related to the underlying operating performance. 7 Capital expenditure is de ned as the sum of "investments in property, plant and equipment" and "investments in intangible assets" from the Consolidated Statement of Cash Flows. 8 Free cash ow is de ned as the sum of net cash from operating and investing activities, excluding the acquisition and disposal of subsidiaries, associates and other equity invest- ments, and dividends from associates; including repayment of lease liabilities. 9 Net debt excluding lease liabilities is de ned as the non-current and current loans and borrowings minus cash and cash equivalents. 10 Net debt including lease liabilities is de ned as the non-current and current loans and borrowings, including lease liabilities, minus cash and cash equivalents. 11 Net working capital is de ned as inventories plus trade receivables and contract assets minus trade payables and contract liabilities. 12 Capital employed is de ned as total assets less current liabilities. 13 The number of ordinary shares outstanding in 2018, 2019 and 2020 has been adjusted for the capital restructuring in 2021 in preparation for the Initial Public Offering. 14 The share price represents the price at closing. 2022 2021 2020 2019 2018 ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 165 NON-IFRS MEASURES GENERAL Certain discussions and analyses set out in this Annual Report include measures which are not de ned by IFRS. We believe this information, along with comparable IFRS-measures, is useful to investors and other stakeholders because it provides a basis for measuring our operating performance. The Management Board also uses these measures, along with the most directly comparable IFRS-measures, in evaluating operating performance. GROSS PROFIT Gross Pro t is de ned as the Group’s top-line earnings, being total revenue, less cost of materials (being the direct costs of goods sold, excluding employee expenses). We believe this measure provides valuable additional information because it allows investors and other stakeholders to analyse the gross margin of our buses sold. In addition, Gross Pro t is a key measure used internally to evaluate (sales) performance. Gross pro t is calculated as follows (in thousands of euro): 2022 2021 Revenue 111,617 24,265 Cost of materials (95,984) (23,045) Gross profi t 15,633 1,220 EARNINGS BEFORE INTEREST, TAXES, DEPRECIATION AND AMORTISATION (EBITDA) EBITDA is Result for the year before net nance costs, the net income tax expense, depreciation and amorti- sation. Thus, EBITDA is de ned as operating result plus depreciation and amortisation expenses. We believe this measure provides valuable additional information because it allows investors and other stakeholders to analyse the pro tability between companies and industries by eliminating the effect of non-operating decisions like interest expenses, tax rates and non-cash items like depreciation and amortisation, hence facilitating focus on operating performance. In addition, EBITDA is a key measure used internally to evaluate performance. The reconciliation of Result for the year to EBITDA is as follows (in thousands of euro): 2022 2021 Result for the Year (32,193) (26,797) Amorisation & depreciation expenses 5,627 5,331 Finance expenses (net) 1,060 4,240 Share of result from associates 432 (7,427) Income taxes (9,734) (9,587) EBITDA (34,808) (34,240) UNDERLYING EBITDA Underlying EBITDA is de ned as operating result plus depreciation and amortisation expenses, adjusted for one-offs, gains and losses on the sale of assets, restructuring and related charges, and other items consid- ered not to be directly related to the underlying operating performance. The reconciliation of EBITDA to underlying EBITDA is as follows (in thousands of euro): 2022 2021 EBITDA (34,808) (34,240) Euronext listing expenses - 4,755 Extraordinary compensation - 5,000 Climate system expenses - 3,939 Underlying EBITDA (34,808) (20,546) ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 166 2021 ONE-OFFS ARE: • Euronext listing expenses recognised in the Consolidated Statement of Pro t or Loss and Other Compre- hensive Income. These expenses amounted to €4,755 in 2021; • One-off compensation related to the termination of an ongoing fee agreement with the CFO amounted to €5,000; • Expenses occurred to replace the climate system for one of our customers. All expenses have been recognised in the Consolidated Statement of Pro t or Loss and Other Comprehensive Income, whilst poten- tial income, awaiting a settlement or nal court hearing has not been recognised. This has been recognised as a Contingent Asset. Refer to Note 25. These expenses amounted to €3,939 in 2021. EARNINGS BEFORE INTEREST AND TAXES (EBIT) EBIT is Result for the year before net nance costs and the net income tax expense. Thus, EBIT is de ned as operating result. We believe this measure provides valuable additional information because it allows inves- tors and other stakeholders to analyse the pro tability between companies and industries by eliminating the effect of non-operating decisions like interest expenses and tax rates. hence facilitating focus on operating performance. The reconciliation of Result for the year to EBIT for the year is as follows (in thousands of euro): 2022 2021 Result for the Year (32,193) (26,797) Finance expenses (net) 1,060 4,240 Share of result from associates 432 (7,427) Income taxes (9,734) (9,587) EBIT (40,435) (39,571) UNDERLYING EBIT Underlying EBIT is de ned as operating result adjusted for impairments of non-current assets, gains and losses on the sale of assets, restructuring and related charges, and other items considered not to be directly related to the underlying performance. The reconciliation of EBIT to underlying EBIT is as follows (in thousands of euro): 2022 2021 EBIT (40,435) (39,571) Euronext listing expenses - 4,755 Extraordinary compensation - 5,000 Climate system expenses - 3,939 Underlying EBIT (40,435) (25,877) FREE CASH FLOW Free cash ow is de ned as the sum of the cash from operating and investing activities, excluding the acqui- sition and disposal of subsidiaries, associates and other equity investments, and dividends from associates, including repayment of lease liabilities. Free cash ow re ects an additional way of assessing our liquidity that we believe is useful to investors and other stakeholders because it represents cash ows that could be used to fund our strategic initiatives, including the scale-up of the manufacturing of the Ebusco 3.0. The reconciliation of the increase in cash and cash equivalents to free cash ow is as follows (in thousands of euro): 2022 2021 Net cash from operating activities (99,058) (19,390) Net cash from investing activities (8,496) (27,284) Payment of principal portion of lease liabilities (1,472) (1,244) Investment in subsidiaries, associates 1,500 22,344 Free cash fl ow (107,526) (25,574) NET DEBT, EXCLUDING LEASE LIABILITIES Net debt, excluding lease liabilities is de ned as the non-current and current loans and borrowings minus cash and cash equivalents. Our net debt re ects our ability to meet our debt obligations if these were due immediately. ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 167 The net debt, excluding lease liabilities is calculated as follows (in thousands of euro): 2022 2021 Loans and borrowings - non-current - 463 Loans and borrowings - current 486 215 Cash and cash equivalents (95,212) (207,923) Net debt excluding lease liabilities (94,726) (207,245) NET DEBT, INCLUDING LEASE LIABILITIES Net debt, including lease liabilities is de ned as the non-current and current loans and borrowings, including lease liabilities minus cash and cash equivalents. Our net debt re ects our ability to meet our debt obligations if these were due immediately. The net debt, including lease liabilities is calculated as follows (in thousands of euro): 2022 2021 Loans and borrowings - non-current - 463 Lease liabilities - non-current 6,298 7,250 Loans and borrowings - current 486 215 Lease liabilities - current 1,463 1,132 Cash and cash equivalents (95,212) (207,923) Net debt including lease liabilities (86,965) (198,863) NET WORKING CAPITAL Our net working capital is de ned as inventories plus trade receivables and contract assets minus trade payables and contract liabilities. We believe this measure provides valuable additional information to inves- tors and other stakeholders because it represents Ebusco’s liquidity and the short-term nancial health of the company. In addition, net working capital is a key measure used internally to evaluate (short-term) liquidity. Net working capital is calculated as follows (in thousands of euro): 2022 2021 Inventories 47,442 22,330 Trade receivables 25,913 16,598 Contract assets 62,971 13,450 Trade payables (21,115) (10,883) Contract liabilities (8,912) (174) Net working capital 106,299 41,321 CAPITAL EMPLOYED Capital employed is de ned as total assets less current liabilities. This key gure provides valuable insight into how well the company is investing its money to generate pro ts. Capital employed is calculated as follows (in thousands of euro): 2022 2021 Total assets 320,616 332,715 Current liabilities (40,713) (21,053) Capital employed 279,903 311,662 GROSS PROFIT AS % OF REVENUE Gross pro t as % of revenue is calculated as follows (gross pro t and revenue in thousands of euro): 2022 2021 Gross pro t 15,633 1,220 Revenue 111,617 24,265 Gross profi t % of revenue 14.0% 5.0% ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 168 EBITDA AS % OF REVENUE EBITDA as % of revenue is calculated as follows (EBITDA and revenue in thousands of euro): 2022 2021 EBITDA (34,808) (34,240) Revenue 111,617 24,265 EBITDA % of revenue (31.2%) (141.1%) UNDERLYING EBITDA AS % OF REVENUE Underlying EBITDA as % of revenue is calculated as follows (underlying EBITDA and revenue in thousands of euro): 2022 2021 Underlying EBITDA (34,808) (20,546) Revenue 111,617 24,265 Underlying EBITDA % of revenue (31.2%) (84.7%) EBIT AS % OF REVENUE EBIT as % of revenue is calculated as follows (EBIT and revenue in thousands of euro): 2022 2021 EBIT (40,435) (39,571) Revenue 111,617 24,265 EBIT % of revenue (36.2%) (163.1%) UNDERLYING EBIT AS % OF REVENUE Underlying EBIT as % of revenue is calculated as follows (underlying EBIT and revenue in thousands of euro): 2022 2021 Underlying EBIT (40,435) (25,877) Revenue 111,617 24,265 Underlying EBIT % of revenue (36.2%) (106.6%) ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATIONINTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 169 ORGANISATION EBUSCO ANNUAL REPORT EBUSCO 2022 INTRODUCTION MANAGEMENT BOARD REPORT GOVERNANCE FINANCIAL STATEMENTS OTHER INFORMATION 170 COLOPHON This annual report is a publication by Ebusco. Ebusco Vuurijzer 23 5753 SV Deurne The Netherlands T +31 (0)88 1100 200 E [email protected] www.ebusco.nl Editing and texts Ebusco Design and layout Monter, Amsterdam 894500WSIBBFFKHL6B322022-01-012022-12-31894500WSIBBFFKHL6B322021-01-012021-12-31894500WSIBBFFKHL6B322022-12-31894500WSIBBFFKHL6B322021-12-31894500WSIBBFFKHL6B322020-12-31ifrs-full:IssuedCapitalMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:IssuedCapitalMember894500WSIBBFFKHL6B322021-12-31ifrs-full:IssuedCapitalMember894500WSIBBFFKHL6B322020-12-31ifrs-full:SharePremiumMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:SharePremiumMember894500WSIBBFFKHL6B322021-12-31ifrs-full:SharePremiumMember894500WSIBBFFKHL6B322020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember894500WSIBBFFKHL6B322021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember894500WSIBBFFKHL6B322020-12-31ifrs-full:ReserveOfCashFlowHedgesMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:ReserveOfCashFlowHedgesMember894500WSIBBFFKHL6B322021-12-31ifrs-full:ReserveOfCashFlowHedgesMember894500WSIBBFFKHL6B322020-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember894500WSIBBFFKHL6B322021-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember894500WSIBBFFKHL6B322020-12-31ifrs-full:MiscellaneousOtherReservesMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:MiscellaneousOtherReservesMember894500WSIBBFFKHL6B322021-12-31ifrs-full:MiscellaneousOtherReservesMember894500WSIBBFFKHL6B322020-12-31ifrs-full:RetainedEarningsMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:RetainedEarningsMember894500WSIBBFFKHL6B322021-12-31ifrs-full:RetainedEarningsMember894500WSIBBFFKHL6B322020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember894500WSIBBFFKHL6B322021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember894500WSIBBFFKHL6B322020-12-31ifrs-full:NoncontrollingInterestsMember894500WSIBBFFKHL6B322021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember894500WSIBBFFKHL6B322021-12-31ifrs-full:NoncontrollingInterestsMember894500WSIBBFFKHL6B322020-12-31894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:IssuedCapitalMember894500WSIBBFFKHL6B322022-12-31ifrs-full:IssuedCapitalMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:SharePremiumMember894500WSIBBFFKHL6B322022-12-31ifrs-full:SharePremiumMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember894500WSIBBFFKHL6B322022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember894500WSIBBFFKHL6B322022-12-31ifrs-full:ReserveOfCashFlowHedgesMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember894500WSIBBFFKHL6B322022-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:MiscellaneousOtherReservesMember894500WSIBBFFKHL6B322022-12-31ifrs-full:MiscellaneousOtherReservesMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:RetainedEarningsMember894500WSIBBFFKHL6B322022-12-31ifrs-full:RetainedEarningsMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember894500WSIBBFFKHL6B322022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember894500WSIBBFFKHL6B322022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember894500WSIBBFFKHL6B322022-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:EURiso4217:EURxbrli:shares
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