Green Earth Group NV — Annual Report 2021

May 30, 2022

Dutch Green Business 2021 Annual Report

Table of Contents

• DGB at a glance
• Company profile
• History
• Project pipeline
• Key figures
• Foreword
• Important highlights

About us

• Brands & Operating companies
• Activities
• Composition
• Board of Directors
• History
• Our partners and customers
• Company structure

Project pipeline

• Sierra Leone
• Cameroon Cookstoves
• Cameroon reforestation
• Kenya cookstoves
• Kenya reforestation
• Paraguay
• Tanzania Reforestation
• Uganda Reforestation

Strategic pillars, purpose and goals

• Strategy
• Carbon markets
• Risks
• Corporate Governance
• Remuneration report

Financial reporting

• Statement by the Board of Directors
• Consolidated statement of financial position
• Consolidated statement of profit or loss and other comprehensive income

Compliance

• Financial reporting

Financial statements

• 1. Reporting Entity
• 1. Basis of accounting
• 1. Going concern
• 1. Functional and presentation currency
• 1. Use of judgements and estimates
• 1. Changes in application accounting policies / fundamental error
• 1. Significant accounting policies
• 1. Operating segments
• 1. Discontinued operation and disposal group
• 1. Revenue
• 1. Net finance result
• 1. Earnings per share
• 1. Share-based payment arrangements
• 1. Income taxes
• 1. Property, plant and equipment
• 1. Intangible assets
• 1. Equity-accounted investees
• 1. Inventories
• 1. Trade and other receivables
• 1. Cash and cash equivalents
• 1. Capital and reserves
• 1. Non-current liabilities
• 1. Current liabilities
• 1. Financial instruments
• 1. Acquisition of subsidiary
• 1. Commitments
• 1. Related parties
• 1. Subsequent events

Sustainability Reporting

Outlook

Disclaimer

Terminology & Definitions

Colofon

Company Only

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About DGB

Carbon Markets

Governance

Financial reporting

DGB at a glance

Our goal to help nature flourish and prosper. DGB is a project developer of high-quality large-scale carbon and biodiversity projects accredited by third parties.

• Flourish: to be in a state of activity and production; expanding in influence, thriving, visibly doing well.
• Prosper: to achieve economic success; succeeding at what one does.

We are focused on nature conservation and helping biodiversity flourish by assisting governments and corporations in achieving net-zero. Global megatrends drive the demand for carbon credits and underpin our growth opportunities.

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Key Figures

DutchGreen’s mission is aligned with helping companies and individuals to meet the following sustainable development goals:

• 157.000+ tons of carbon offsets realised
• 20.000.000+ tons of carbon offsets in our project pipeline
• 3.4 million+ trees planted through our projects
• 240% increase in 2021 and 12% increase YTD carbon offsets
• 250.000+ hectares of sourced land
• 8 projects in our pipeline

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Foreword

CEO of Dutch Green Business

Selwyn Duijvestijn

The year 2021 was pivotal... “ ...for global emissions trading and carbon markets. The strong interest in voluntary carbon markets has been reflected in surging corporate moves to net zero, even before governments finalised the framework for Article 6 of the Paris Agreement at the UN climate talks in Glasgow in November 2021. This is all breathing life into the voluntary carbon markets of tomorrow, which underpins our future. In 2021 the carbon markets showed no signs of slowing down, and the European carbon prices led the charge. Existing markets, such as the EU and New Zealand, have begun making changes to be even more ambitious: new markets started operations, such as China’s national ETS, and others are being developed or expanded, such as Colombia and Chile. At the beginning of the year, the leading EU ETS carbon price was 32,19 euros, and it surpassed 80 euros to close at 80,90. The voluntary markets follow the trend with a rise in price from 4 euros to over 10 euros on average, with higher prices for high-quality projects. Some stakeholders see the investment opportunity post COP26, and others need the carbon markets to survive, such as the oil, gas and aviation industries. Multiple hedge funds have also begun initiate positions in carbon credits and even the crypto industry is also getting into the game. Several new cryptocurrencies backed by carbon credits are buying up sizable amounts of carbon credits and putting them on the blockchain. There is a finite source of carbon credits, and a surge in demand is visible as the world’s countries intend to realise their net-zero pledges. As a project developer of nature-based solutions and large-scale carbon projects, we are in the right sector at the right time and positioned for significant growth in the upcoming years.

The three most significant sectors operating in the carbon markets are industrials, finance and energy. Industrial and energy carbon credit users are relatively straightforward to understand as industries like steel making and fossil-fueled power plants are heavy emitters. The large number of carbon credits held by the finance industry is designed for them to retire for themselves and be utilised as investment assets. Expect the financial industry’s share of carbon credit purchases to grow even more significant. Plenty of businesses and retail investors are looking to the carbon markets for investments that are both rewarding as well as ESG-friendly. Currently, the general public has only just started to appreciate the opportunity and need of this market. With Article 6 working its final details towards the standardisation and regulation of the global voluntary carbon markets, this process will still take many months, if not years, to complete. This provides a significant opportunity for DGB, as we are well-positioned to capitalise on the opportunity. In 2021 the market surpassed the US$1 billion in transaction value and there is still tremendous amounts of room for growth... Currently, the voluntary carbon markets are still in their early stages. In 2021 the market surpassed the US$1 billion in transaction value, and there is still tremendous amounts of room for growth – as well as plenty of catalysts. The Taskforce on Scaling Voluntary Carbon Markets forecasts that to meet the climate change targets outlined in the Paris Agreement, the voluntary carbon markets will need to grow 15-fold by 2030 – and 100-fold by 2050 – from 2020 levels. Exciting times ahead. Carbon prices have been rising fast. In the wake of COP26, carbon prices skyrocketed - capping off what has already proven to be a record-setting year, with prices having more than doubled since January 2021. The carbon markets show no sign of slowing down.

• Industrials
• Finance
• Energy

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There’s already a fundamental, proven demand... Progress is seen through our project pipeline of large-scale carbon projects helping to deliver nature conservation and ecosystem restoration at scale. DGB continues to provide credible green initiatives and impactful projects and generate returns for its stakeholders. We are looking forward to building on this progress in 2022. ... for carbon credits driven by legislation backed by nearly every country globally. There is near-universal consensus from governments and private companies who agree that the market needs to expand to match global net-zero needs. DGB investors appreciate this market dynamic and the significant opportunity it presents. I am immensely proud of what DGB has achieved this year. Following increased awareness generated by COP26 of the net-zero agenda, we have seen unprecedented demand for carbon credits purchased by companies as quickly as they are being developed. With not enough nature conservation and ecosystem restoration taking place to satisfy the demand for carbon credits, its vital corporates participate in increasing the number of nature-based solutions that will help meet their net-zero targets.

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A look back at 2021: Important highlights

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Successful first large carbon credit sale

DGB announced its first large offtake agreement for verified emission reductions that generated revenues for the Group in Q1 2022 of approximately €1.1 million. On 30 December 2021, DGB signed its first large offtake agreement for up to 128,000 tonnes of VERs with a contract price of US$10 per tonne with a multinational energy company. The verification procedures have been completed, and 126,297 tonnes of carbon credits, which originated from a reforestation investment project in Sierra Leone, have been issued and delivered in 2022.

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New large-scale carbon project in Cameroon

In 2021 the team of DGB started the feasibility study and due diligence of this project. DGB has now signed with Green Zone Cameroon and has agreed to partner on two 30-year forest carbon offset projects to sequester emissions and protect critical primary forests financed through the generation of high-integrity carbon credits. The teams working on both projects have a strong track record in designing forest carbon offset projects under VCS and the CCBS. The team has a wealth of experience and consists of skilled carbon market traders, VCS-CCBS forest carbon experts, local agro engineers and other forestry professionals. The projects will engage over 20,000 farmers and create employment opportunities for thousands of people in local communities. Much of the planting will be of fruit trees which will also have a direct economic benefit to local farmers who can sell harvest.# About DGB Carbon Markets Governance Financial reporting

The projects will also see the manufacture and distribution of 150,000 energy-efficient cookstoves in communities where tree planting occurs. The cookstoves will reduce the use of charcoal and wood by more than half as the primary energy source in these local communities. The manufacturing and distribution of cookstoves will be designed as a standalone carbon offsetting project under the Gold Standard methodology "Technologies and Practices to Displace Decentralised Thermal Energy Consumption". The project will have multiple locations. However, most of the trees will be planted in three villages in the Yoko Sub Division in the Centre Region of Cameroon, spanning an area of 2,300 – 3,000 hectares. Approximately 40% of Cameroon is covered by forest. However, deforestation has had a major impact due to farming, logging, and settlement expansion in recent decades. Between 2001-and 2020, Cameroon lost 1.5 million hectares of tree cover, equivalent to a 4.9% decrease in its total forest cover and 903 million tonnes of CO2 emissions. The Centre Region of Cameroon, where most of the project sites are located, accounted for over half of the trees lost. Of the trees expected to be planted by the project, 80% will be fruit and nut trees, including avocado, mango, orange, apple, macadamia and cashew. Around 10% will be indigenous tree species, and 10% will be non-invasive plants such as Indian Bamboo. The project also aims to protect biodiversity as it is located close to Cameroon’s important Mpem et Djim National Park.

Biggest factors contributing to deforestatioon
* Logging
* Settlement expansion
* Farming

About DGB Carbon Markets Governance Financial reporting

New large-scale carbon project in Kenya

In 2021 the team of DGB started the feasibility study and due diligence of this project. DGB has now signed Cooperation Agreements with the Applied Institute of Agriculture and Technology (“AIAT”), Kenya, regarding the projects. The first trees are planted in April 2022. DGB, Green Zone Cameroon and AIAT have agreed to partner on two 30-year forest carbon offset projects to sequester emissions and protect critical primary forests financed through the generation of high-integrity carbon credits. The projects will engage over 20,000 farmers and create employment opportunities for thousands of people in local communities. Much of the planting will be of fruit trees which will also have direct economic benefit to local farmers who will be able to sell produce.

About DGB Carbon Markets Governance Financial reporting

The projects will also see the manufacture and distribution of 150,000 energy-efficient cookstoves in communities where the tree planting takes place. The cookstoves will reduce the use of charcoal and wood by more than half, as the primary energy source in these local communities. The manufacturing and distribution of cookstoves will be designed as a standalone carbon offset project under the Gold Standard methodology "Technologies and Practices to Displace Decentralised Thermal Energy Consumption". The project will have several locations in counties (see below) that span central Kenya. However, most trees will be planted in government-protected forests previously deforested during the 1980s and 1990s. In each case, the project will extend to the communities living below the forested areas, where fruit and nut trees will be planted and a small percentage interspersed with crops such as tea and coffee. This investment in a sustainable forest management process will also help conserve water in one of Kenya’s key catchment areas.

In Nyeri county, two blocks covering 3,472 hectares will be replanted with indigenous trees. Members of local villages will plant, care for and conduct monitoring activities relating to the planted trees. They will also coordinate the planting of trees in households, obtaining legal agreements to ensure the conservation of the trees throughout the project period. Trees planted in the homesteads will consist of fruit and nut trees, such as avocado and macadamia, alongside selected tree species that intercrop well with tea, coffee and horticultural activities.

In Kirinyaga County, the project covers an area inside the Mount Kenya Forest Reserve. A recent assessment (Nature Kenya, 2019) estimated Mt Kenya’s forest cover at 80,962 hectares, which has declined 21% in less than ten years. As with the project in Nyeri county, this area will primarily consist of replanting the deforested areas with indigenous trees.

The project in Murang’a and Nyandarua counties spans the Aberdare Range (a 160 km long mountain range of upland, north of Kenya’s capital Nairobi with an average elevation of 3,500 metres) will oversee the planting of indigenous tree species, including Podo and Meru Oak. Logging and deforestation activities have left large areas of the forest depleted in this area. The project will extend the planting into communities living there to involve them in meaningful economic empowerment, energy-efficient wood cookstoves and planting of woodlots that will generate carbon credits.

• Nyeri
• Kirinyaga
• Nyandarua
• Murang’a

"Save trees for yourself, your family or your business. Save trees to become carbon neutral or to make a healthy profit. Save for one tree a month or for a whole lot. We don’t mind. Because every tree we plant contributes to a greener world, isn’t that what we all want?", said Co-Founder Tamar van Heesewijk.

About DGB Carbon Markets Governance Financial reporting

50% strategic stake in Corekees

DGB invested EUR 500,000 in Green Fuel Investments B.V. to facilitate the expansion of its groundbreaking tree-focused retail investment platform, Corekees. Corekees gives sustainability an economic value by planting trees and making its state-of-the-art sustainable investment platform available for investors throughout Europe. The retail investment platform turns reforestation projects into sustainable investments by allowing the harvest proceeds to flow back to the investors, allowing them to profit from a greener world. Corekees currently manages the capital for over 800 investors with a team of eight. The growth capital is also provided for scouting new investment opportunities and the marketing efforts required for international growth in Europe.

“Sustainability and economic value should go hand in hand. That is why we founded Corekees and partner with DGB today. Together, we will develop the Corekees platform to reforest the world whilst generating a decent profit for our investors.”, said Co-Founder Nick van Heesewijk.

About DGB Carbon Markets Governance Financial reporting

Majority stake in Statix AI

In April 2021, DGB announced it would acquire a strategic controlling stake of 75% in software development company Statix Artificial Intelligence B.V. which specialises in innovative blockchain certification and disruptive advanced technology development. Statix harnesses artificial intelligence, blockchain, big data and drone technology to validate, measure and help deliver ecological projects for ecosystem restoration. Statix has operations in The Netherlands and India and will operate under the DGB Group umbrella of companies. It will focus on building the most advanced, powerful technological tools for ecosystem restoration and smart reforestation by using advanced data science, blockchain, machine learning, satellite imagery and drone technology to assist in the rehabilitation of land and restore biodiverse ecosystems at scale. This acquisition is a key part of DGB’s strategy to offer world-leading verification, certification and trading of carbon offsets – alongside an ability to offer customers a proven and highly transparent way of reforesting effectively at scale. Statix will focus on creating a marketplace for reforestation project developers to showcase their projects and as a tool to fund their projects and for B2B and B2C customers to buy trees and accumulate credits or neutralise their offsets. The software development team will work on blockchain certification standards for DGB or third parties to use for the incubation, validation and maintenance of nature-based environmental projects. Utilising encrypted blockchain,

About DGB Carbon Markets Governance Financial reporting

DGB announced the launch of its new carbon management platform CO2.expert. The platform enables retail and corporate clients to measure their carbon footprint and provides recommendations about addressing it with carbon offsets. The CO2.expert platform has been developed to provide accurate, reliable, and consistent carbon dioxide emissions analysis and a user-friendly, fast, and effective interface. CO2.expert unites the entire carbon management process in a single platform to help companies and individuals keep track of carbon emissions and allow them to take immediate action. It enables companies to measure the carbon impact of their business activities and identify the highest carbon-producing activities. Users enter information about their business activities such as transport, energy use, fuel type and materials. The platform is fully compliant with the internationally recognised standard GHG Protocol and helps companies become carbon neutral. The CO2.expert platform also contains a user-friendly checklist to help businesses complete all the steps necessary to achieve PAS 2060, the internationally recognised specification for carbon-neutral status.

DGB Group unveils new advanced carbon calculator

Setting up distribution network

To boost the number of offtake agreements and finance its project pipeline, DGB actively expanded its distribution network by partnering with key players in the sector, as well as selling directly to consumers by expanding its impact consultancy team.

Company profile: Who are we and what do we do?

About DGB Carbon Markets Governance Financial reporting

About us

DGB stands for Dutch Green Business.# DGB GROUP

DGB GROUP is a Group of companies focused on nature conservation and helping nature flourish and prosper. The scale of global ecosystem restoration that needs to be undertaken in the coming years is almost unimaginable.DGB invests, manages and develops projects to originate nature compensation in the form of biodiversity credits and carbon credits. The world’s ancient and endangered forests are being logged at an alarming rate, putting forest, animal species and communities at risk. DGB develops business solutions that protect these endangered forests through carbon and biodiversity credit projects. DGB plans to reforest the world’s land at scale and bring back nature where it cannot return unaided. DGB is the world’s first publicly-traded purpose company focused on restoring ecosystems, biodiversity, and nature conservation through carbon credits. Carbon credits offer the initiator, who causes damage to nature, the concrete possibility to pay for the efforts that another party (has) made to develop nature and in this way compensate for the damage. A carbon credit is defined as: ‘the (commercial) process by which nature and biodiversity compensation can be purchased to compensate for damage caused to nature and biodiversity; this compensation is produced before and without direct connection to the damage for which they are purchased for compensation ‘ Compensating damage to nature is how the harmful impact of an activity or intervention’s harmful impact on it can be mitigated. Carbon emissions cause harm to the environment and therefore need to be compensated.

21 About DGB

Carbon Markets

Governance

Financial reporting

DGB is operating as a habitat bank, and nature is the capital. The assets, therefore, consist of projects where nature is being protected, restored, or created. All these efforts result in flourishing and prospering nature. Compensation for damage to nature (which is not legally protected) takes place voluntarily as part of a CSR policy. In these situations, the damage is fully compensated too, but this compensation is done voluntarily. Voluntary carbon markets are growing fast as companies worldwide are committing to net-zero emissions. There are no mandatory rules (yet) for companies to become net-zero, but many voluntarily decide to do so. Therefore large corporations buy voluntary compensation to offset their carbon emissions and become net zero. There is a need to improve and scale up both mandatory and voluntary investments. DGB’s projects originate carbon and biodiversity credits which compensate individuals or companies’ damage to nature and impact on the environment by funding an equivalent elsewhere. DGB currently develops the following nature compensation: DGB has mapped opportunities and locations globally with existing plans to realise new natural habitats.

• Carbon credits
• Biodiversity credits
• Tailor-made wildlife protection credits

22 About DGB

Carbon Markets

Governance

Brands & Operating companies

Financial reporting

Corekees

DutchGreen Project Management

CO2.expert

DutchGreen Project Management is actively restoring nature worldwide through a wide range of methodologies. From Paraguay to Kenya, the projects aim to prevent deforestation and provide us with a greener, more biodiverse and more resilient world.

The CO2.expert platform has been developed to provide accurate, reliable and consistent carbon dioxide emissions analysis, combined with an easy to use, fast and effective interface. CO2.expert unites the entire carbon management process in one easy-to-use platform to help companies and individuals keep track of carbon emissions and take immediate action.

Corekees is giving sustainability an economic value by planting trees and making its state-of-the-art sustainable investment platform available for investors throughout Europe. The retail investment platform turns reforestation projects into sustainable investments by allowing the harvest proceeds to flow back to the investors, allowing them to profit from a greener world. Corekees currently manages the capital for over 800 investors with a team of eight.

project management

Statix AI

GreenTech Solutions

Statix harnesses artificial intelligence, blockchain, big data and drone technology individuals measure and helps deliver ecological projects for ecosystem restoration. Statix has operations in The Netherlands and India and will operate under the DGB Group umbrella of companies. It will focus on building the most advanced, powerful technological tools for ecosystem restoration and smart reforestation by using advanced data science, blockchain, machine learning, satellite imagery and drone technology to assist in the rehabilitation of land and restore biodiverse ecosystems at scale.

High-tech, disruptive approach to making biodiversity flourish and prosper. GreenTech Solutions translates ecosystem restoration and nature conservation into ecological assets. Utilising encrypted blockchain, GreenTech is developing a trading platform that functions as a habitat bank offering the ability to trade in biodiversity credits, providing complete transparency and accountability.

• Green Tech Solutions
• Habitat Market

Habitat Market focuses on creating a marketplace for ecosystem restoration and nature conservation project developers to showcase their projects and secure funding via biodiversity credits and tailor-made wildlife credits.

24 About DGB

Carbon Markets

Governance

History

Financial reporting

DGB Group is a public company that has been trading on Euronext Amsterdam since 1957. With a history in the paper and printing industry, over time, the group transformed into an energy conglomerate and software development firm with a strong focus on renewable energy. In the last years, the focus of its activities was shifted further towards the sustainability sector, nature-based solutions and greentech software. Before DGB was named the Dutch Green Business, the listing was named Roto Smeets. It was Matthias Hubertus Smeets (Maasbracht, 1806 - Weert, 1853) who started a shop selling stationery, annexe bookbinding and printing. In 1906-1907 a new printing house was completed on Nieuwstraat, and the company was given the designation: Hoffeverancier. Cigar bands and advertising material were printed for Philips, among other things. A branch office was opened in London in 1927 and one in Amsterdam in 1929. Sales offices were established in Belgium in 1945, the Federal Republic of Germany in 1950 and France in 1955. On January 1, 1957, all the company activities were combined into the Roto Smeets Group. The company went public on the Amsterdam Stock Exchange with the same holding structure DGB Group still holds today. In 1980 more than 950 people worked for the Group. Many things were printed, such as the official state portrait of Queen Juliana, reproductions for, among other things, Public Art Property and the editions of Life and Time for continental Europe. In 1980, on the 150th anniversary, the company acquired the designation: Royal (in Dutch, “Koninklijke”). Following the digitalisation in the 21 century, in an Extraordinary Meeting of Shareholders of Roto Smeets Group N.V. held in September 2015, it was decided, among other things, to sell its printing activities. Following the sale of the printing activities in October 2016, the company changed its name to DGB Group after having its energy activities represent the majority of the activities. DGB has been supplying both gas and electricity since 2006 with its roots in the agricultural sector. The energy subsidiary developed sustainable energy from the agricultural sector and farmers themselves. Often from the sustainable source of biomass or solar panels. In addition, wind energy or hydropower.

25 About DGB

Carbon Markets

Governance

Financial reporting

On 22 July 2020, DGB announced S.A.M. Duijvestijn to lead the company as CEO. The appointment follows his involvement in the group after a 14% stake in DGB through one of his funds bought in 2017. The goal was to bring innovation and further expand its green business activities in the sustainable sector by staying a leading high-impact investor and providing competitive real investment returns for its shareholders, combined with high social impact.

On 4 September 2020, DGB sold its (renewable) energy subsidiaries to solely specialise in nature-based solutions and the origination of carbon credits. M. Logtenberg steps down as chairman of the board and sells his 64,64% stake in the company to Prosper And Nature Foundation.

At the Annual General Meeting of Shareholders on February 4, 2021, after careful consideration of the strategic, economic and financial aspects for all stakeholders involved, S.A.M. Duijvestijn, CEO, stated the mission for the Group for the following years: “A successful outcome in reforestation of the planet requires a commercially viable company is driven by purpose with significant on-the-ground organisational capabilities. The strength of DGB lies in the fact that we can economically speed up the reforestation process. The listing allows us to finance our operations through private arrangements with individual shareholders, family offices, venture capital firms or alliances with larger corporations through loans, bonds or equity deals. We can offer securities for our shareholders in the acquisition of existing forests, lands or companies. A listing allows us to match and access the capital requirement for the job with the urgency of what is needed and the increasing demand to see reforestation occur planet-wide.”

In April 2022, after a period of continued momentum, DGB Group reported a project pipeline of over 13.6 million tons of carbon credits ready for offtake agreements, making it the largest project developer of carbon credits in The Netherlands.# About DGB

Remote sensing DGB is committed to a high-tech approach to nature restoration, harnessing the latest smart technologies to secure the best outcomes for the business, its customers, and the planet. Every stage of our nature restoration projects will benefit from this approach, from detailed analysis at the start to the use of specialised machines to mechanically speed up the planting of biodiverse species to monitoring plant growth with drones and satellite imagery. DGB is developing technologies that allow us to reforest thousands of hectares in a single planting session, including a GPS, which enables an automated-planting system to drive speed and efficiency in the field. We employ a disruptive high-tech approach to making biodiversity flourish and prosper. We translate ecosystem restoration and nature conservation into ecological assets. Every stage of our nature restoration projects will benefit from this approach from detailed analysis at the start, using specialised machines to mechanically speed up the planting of biodiverse species, and monitoring plant growth with drones and satellite imagery. Through this robust procedure, we speed progress towards the Sustainable Development Goals. We can accomplish this by lowering entry barriers, improving capacities, incentivising more engagement in the environmental markets, and developing corporate sustainability and nature development finance. By providing a smart way to track, verify, and reward regeneration at scale, we accelerate a new multi-billion dollar market that realigns economic health with ecological well being. DGB combines the data from a dense sensor network, ground drone sensors, geostationary and orbital satellites, and machine learning/neural network models trained on historical data to perform high-resolution data collection.

DGB works on remote sensing solutions for monitoring biodiversity to predict biodiversity increase and depletion. Remote viewing monitors native species of plants, insects, mammals and birds, seasonal migrations, and analyses spot critical changes over the years. showing the vegetation, species, condition and erosion characteristics of every square metre of land.

Carbon Markets

Develop the core AI algorithms that create a high-fidelity representation of the world based on geospatial data to train the neural networks to predict such representations, algorithmically create accurate and large-scale ground truth data by combining information from the remote sensors across space and time. Use state-of-the-art techniques to build robust planning and decision-making system that operates in complicated real-world situations under uncertainty. The AI can recognise and count trees and label manufactured objects and other anomalies. The AI uses machine learning to constantly improve itself for even more accurate and advanced biodiversity analysis.

Using state of the art immutable ledger technology, which provides transparent, cryptographically verifiable transaction logs and proprietary remote sensing technologies, our team is creating new tools for how humanity relates to its environment. We are using a completely new class of database which makes data’s change history immutable – it cannot be altered or deleted. Using cryptography verifies that there have been no modifications to our data. It uses an immutable transactional log, a journal, that tracks each application data change and maintains a complete and verifiable history of changes over time. We can account for all activities relating to a conservation project. We are working on blockchain certification standards for the incubation, validation and maintenance of nature-based environmental projects. We have developed a blockchain-based ecological certification approach to ensure that initiatives implementing biodiversity credits and carbon offsetting are environmentally sound, truly benefiting the restoration of the ecosystem.

Our key strategy is to offer world-leading verification, certification and trading of biodiversity credits – alongside an ability to offer customers a proven and highly transparent way of reforesting effectively at scale. We apply cutting-edge research to train deep neural networks on problems ranging from perception to control. Our per-camera networks analyse raw images to perform semantic segmentation, object detection and monocular depth estimation. Our birds-eye-view networks take video from all cameras to output the environmental layout, static ecological infrastructure and 3D objects directly in the top-down view. Our networks learn from the world’s most complicated and diverse scenarios, iteratively sourced from every square metre of land in real-time.

• Artificial Intelligence (“AI“)
• Immutable Ledger Technology
• Blockchain
• Neural networks

Utilising encrypted blockchain, we will facilitate a trading platform that functions as a habitat bank for biodiversity credits providing complete transparency and accountability. Our focus is on creating a marketplace for reforestation project developers to showcase their projects and as a tool to fund themand for B2B and B2C customers to buy trees and accumulate credits or neutralise their credits.

Build open- and closed-loop, hardware-in-the-loop evaluation tools and infrastructure at scale to accelerate the pace of innovation, track performance improvements and prevent regressions. We use modern AI and machine learning, data science, blockchain, machine learning, satellite images, and aerial drones to aid in the regeneration of land and the regeneration of biodiverse habitats at large. We aim for quality, scale, speed, and high survival rates when planting trees. We will develop technologies that allow us to reforest thousands of hectares in a single planting session, including a GPS, enabled an automated- planting system to drive speed and efficiency in the field.

Marketplace

Planting drones

Governance

Our partners and customers

The sheer scale of the global challenges ahead of us means we must collaborate with like-minded organisations that share our sustainable future vision. The private sector is hugely influential, and it’s impossible for us to address any of the big issues facing our world without business on board. We work with political leaders, government departments, regulators and advisory bodies, as well as others in business, finance and research, in order to help accelerate change in the most efficient and socially just way.

Our most important focus groups are:

• Landowners: to conserve, protect and restore their land
• Investors: for the upfront finances needed to run our business
• Clients: our customers who buy credits from us
• Local communities: play a significant role in the execution of our projects

More than 1,000 organisations in over 20 countries have made net zero pledges. DGB helps clients embark on ambitious journeys that reduce business costs, build resilience, and mitigate risks while positively impacting the environment and society. Time has proven that those corporations who do sustainability well perform better in the long term, become more resilient and gain a competitive edge when assessing a company’s quality. The pressures they face come from regulatory bodies, governments, and clients, who now more than ever require their funds to be invested responsibly. As the world evolves, investors are interested in investing in companies that can adopt or have adapted to these changes, particularly those that offer interesting and innovative solutions that help navigate the landscape. DGB´s projects do exactly that: they deliver robust returns for the investors being a purpose-driven company. All the investment is channelled into a fund directly invested in nature conservation and restoration projects. We aim to be a leader in delivering strong financial returns by allocating investment capital and through modern financial technology needed to drive the capital towards a net-zero world.

We are seeing a real uptick in institutional markets, asset managers, and pension funds, and we are going to use their power of sustainability funding to help and accelerate their transition to net zero. DGB provides exposure to the global market, where we forge strong relationships and brokerage platforms. We pride ourselves on being strong influencers in this market whilst operating under strict regulations as a publicly-traded company. By signing up for our projects or offtake agreements (carbon credits). DGB engages its clients and partners in our tangible projects, which our team of experts in the field are uniquely managed and delivered. Given the co-benefits embedded in specific carbon projects, buyers of carbon credits not only offset emissions but also create significant ESS impacts and meet SDGs.

Company structure

Company Name	Ownership
DutchGreen Project Management B.V.	100%
Habitat BioBank B.V.	100%
GreenTech Solutions B.V.	100%
N.V. Intelligence B.V.	50%
Transeact Financial Solutions B.V.	75%
Corekees	50%
Stichting Green Fuel Investments B.V.	100%

Board

Share structure

The authorised capital of DGB amounts to EUR 750,000 and is divided into 18,750,000 ordinary shares, 18,749,900 preference shares and 100 priority shares, each with a nominal value of EUR 0.02. The issued capital is 11,400,349 ordinary shares and 100 priority shares. 4.052.175 of the ordinary shares are listed on Euronext with ticker code AEX: DGB and ISIN-code NL0009169515.

We intend to pay an annual dividend representing sustainable long-term value for our shareholders. Per the existing dividend policy, a substantial payout is maintained. The dividend payment depends on the financial results and the equity of DGB.

Financial reportingIn the event of disappointing results or investments, it is possible not to distribute a dividend for that year. If a loss has been incurred in any year, no dividend will be paid for that year. In a dividend proposal, various factors will be considered, such as the financial and operating result, the capital position, legislation and regulations and whether the available resources are required for repayment or investments.

About DGB Carbon Markets

Governance

Financial reporting

Shareholding structure

Shareholding structure as per April 30th, 2022.

Project pipeline

About DGB Carbon Markets Governance DGB works to protect ancient and endangered habitats worldwide and actively restores flourishing ecosystems. We work collaboratively with local partners to implement the best projects. The loss of critical habits puts species, communities and our environment at risk. DGB secures large-scale forest conservation and transforms unsustainable forest product supply chains by engaging business executives as champions for conservation and sustainability. DGB catalyses the development of real alternatives and is a key player behind some of the world’s most innovative conservation initiatives. DGB’s work is global – through both the ecosystems in which we work to protect and the companies we engage with to achieve these conservation goals. Our projects are innovative, collaborative and based on scientific evidence. And we think big. We run many Global initiatives focussing on the regions and challenges where we can make the biggest difference - from South America to Africa. We have developed a solid project pipeline.

Financial reporting

Sierra Leone

In 2021, DGB signed a letter of agreement with South Pole, a leading advisor and provider of global climate services, to invest in the Miro Sustainable Plantation project in northern Sierra Leone. DGB secured an expected 128,000 tonnes of verified sequestered carbon credits with the possibility of future supply as more land is forested. The investment will help accelerate reforestation in Sierra Leone and make the project and the local communities more sustainable. DGB’s participation and use of carbon offsetting ensure the long-term viability of the project thanks to its ability to grow trees over a longer time frame using a much wider diversity of planting. DGB chose to invest in the Miro project due to its capacity to create new forests that sequester carbon and the fact that it contributes to the UN’s Sustainable Development Goals. The project is audited and verified by Verified Carbon Standard (VCS), the leading carbon standard.The Miro project repurposes degraded land by planting carefully selected trees creating a sustainable plantation spanning 12,000 hectares, and it will sequester 55,000 tonnes of CO2 on average each year. DGB’s investment in Sierra Leone highlights to all stakeholders the opportunity and need for a supply of high-quality, certified reforestation projects within the voluntary carbon market. This helps accelerate reforestation, encourages the creation of and trading in carbon credits, improves air quality, creates oxygen and cuts air pollution. On a local level, the project promotes sustainable farming, which will deliver increased food production and the sustainable cultivation of trees. The project also focuses on swamps and transforming them into areas of increased rice cultivation and controlled agroforestry that will keep the land full of nutrients for long-term efficiency. As a subsequent event on March 2nd, 2022 the Group completed an offtake agreement for verified emission reductions and no longer holds carbon credits in this project. The sale generated revenues for the Group in Q1 2022 of approximately EUR 1.1 million. The Group confirms that the verification procedures have been completed and that 126,297 tonnes of VERs, which originated from the reforestation project in Sierra Leone, have now been issued and delivered to the buyer.

Paraguay

DGB made a carbon finance investment in Reducing Emissions from Deforestation and forest Degradation project Corazón Verde del Chaco in Puerto Casado, Presidente Hayes, Paraguay (the “REDD+ project”). Carbon offsetting secures long-term viability of the project. A quarter of all emissions worldwide are caused by deforestation, forest degradation and land use changes. Large-scale deforestation results in increased emissions and major loss of biodiversity. Investing in REDD+ projects with the ability to scale is crucial and has been established as a key factor in the large scale conservation of forest habitat while simultaneously producing these benefits:

• Lessening the production of air pollution through the process which converts agricultural land;
• Improving water quality (locally and on a wider scale) by preventing the flow of nutrients and sediments into nearby waterways, which typically occurs due to the conversion of forest ecosystems to land for agriculture.
• Preserving rapidly decreasing river, wetland and forest ecosystems;
• Developing projects with, and working alongside, local communities;
• Conserving biodiversity through the protection of native flora and fauna.

DGB holds the rights to 28,572 carbon credits from this project. The REDD+ project will simultaneously preserve endangered species and a wide range of ecosystem services, provide an economical alternative to local communities, and mitigate the release of an estimated 2 million metric tonnes of carbon dioxide emissions over the first ten years of the REDD+ Project. DGB also signed a land sourcing agreement with Quadriz to scout new opportunities for REDD+ projects.

Kenya

Reforestation

Planting of at least 3 million trees The significant increase in the biodiversity of native species and working with local partners and communities to enact environmental and developmental change on a large scale. Increasing the habitat surrounding Mount Kenya for the region’s elephant populations and other species. Improving water retention rate in these critical water catchment areas, helping to secure the future availability of water resources for the Nairobi area. The project will produce many carbon credits through sequestration by mass tree planting. Still, an emphasis on biodiversity and community benefit will remain a guiding force. Highlights of the project include: DGB has partnered with local partners, AIAT, to commence a wide-scale reforestation project in the central region of Kenya. The project seeks to plant various trees across large areas of degraded land surrounding Mount Kenya and the Aberdares. This reforestation project will provide significant benefits for the environment (through both carbon sequestration and increased biodiversity levels) as well as the community (through the provision of employment and fruit - as a source of revenue) and represents a significant investment in the area in terms of environmental restoration and community development. The initial project will see more than 3 million trees planted. However, plans to scale up to more than 20 million trees are under discussion due to an increased offer in terms of land size. The DGB Hongera Afforestation Project, for which DGB has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 7 million credits over its 30-year project lifetime (approximately 225,000 carbon credits per annum).

Cookstoves

Our Kenya Cookstove project seeks to manufacture and distribute energy-efficient, locally and sustainably-made cookstoves to individuals and communities across the region. These cookstoves will reduce the amount of firewood burned, having a positive impact on:

a) the environment and
b) the communities.

This positive impact will be realised through the following:

• Reduction in the number trees removed from forest for fuel
• Reduction in the amount of carbon dioxide released during the cooking process
• Improved quality of air
• Reduced amount of time spent collecting firewood each day (particularly important for children in communities who often spend up to three hours each day undertaking this task).

Like all of DGB’s projects, there is a focus on the environment, biodiversity and the communities that live in and around the project area. Producing positive change that benefits everyone is an important part of creating a successful and sustainable, long term project. The Hongera Energy Efficient Cookstove Project, for which DGB has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 1.8 million credits over its 6-year project lifetime (approximately 300,000 carbon credits per annum).

Cameroon

Reforestation

Located to the north of the Cameroonian capital, Yaounde, this large-scale reforestation project seeks to plant various native species and fruit trees across degraded land. Whilst providing a significant boost to levels of biodiversity and sequestering large quantities of carbon dioxide, the Cameroon Project has a powerful, positive impact on the local communities who will benefit from employment opportunities, an improved local environment, and the production of large quantities of fruit. This project area is in the centre region of the country, a region with high rainfall and humidity and fairly steady temperatures throughout the year - a conducive environment for growing trees! This reforestation project will plant more than three million trees (although the baseline is 3 million, land has been secured with the potential for significant scaling-up).# Financial Reporting

Cameroon Cookstoves

Our Cameroon Cookstove project seeks to manufacture and distribute energy-efficient, locally and sustainably-made cookstoves to individuals and communities around the central region of Cameroon. These cookstoves will reduce the amount of firewood burned, positively impacting: a) the environment and b) the communities. This positive impact will be realised through the following:

• Reduction in the number trees removed from forest for fuel
• Reduction in the amount of carbon dioxide released during the cooking process
• Improved quality of air
• Reduced amount of time spent collecting firewood each day (particularly important for children in communities who often spend up to three hours each day undertaking this task).

Like all of DGB’s projects, there is a focus on the environment, biodiversity and the communities that live in and around the project area. Producing positive change that benefits everyone is important in creating a successful and sustainable, long-term project. The Sawa Cookstove Project, for which DGB has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 1.8 million credits over its 6-year project lifetime (approximately 300,000 carbon credits per annum).

Uganda Reforestation

The Uganda Reforestation project seeks to restore rapidly deforested and degraded Chimpanzee habitat in western Uganda. The planting is already underway and has been for several years, but DGB wants to provide a significant financial and technical boost to the project. By scaling up planting over the coming years, this project can ensure that there will be a home for this endangered population of chimpanzees in the coming years. In addition to providing habitat for the Chimpanzees, the project will also see a great many trees planted with a focus on benefit for the local community. Cash Crop trees (such as coffee) will be given to local farmers, as will fast-growing species to provide firewood (thus reducing the need to enter into Chimpanzee habitat to collect this resource). This is further mitigated with the introduction of more efficient stoves, much like our Kenya and Cameroon Projects. This project, for which DGB has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is undergoing an extensive feasibility study and due diligence process, after which DGB will know how many carbon credits will be originated over the project lifetime.

Tanzania Reforestation

Restoring the ecosystem and traditional grazing areas. The restoration of balance between nature and Maasai people on the high plateaus of Tanzania. Simanjiro Plains of Tanzania are an important wet season grazing area for wildlife between Tarangire National Park and Mount Kilimanjaro. This area consists of a combination of savanna and acacia woodland. The Simanjiro Plains provide a home for many of Africa’s animal species, this area also includes the traditional grazing areas for the Maasai and their cows. Simanjiro Plains is a semi-arid ecosystem. From the early 1970s, this area was used for large-scale arable farming, which has led to large areas being deforested. In addition, the area is overgrazed by the large number of herds of cows, sheep and goats. There is also a lot of illegal logging for charcoal production. This has resulted in the desertification of this area rapidly, making it increasingly difficult for the game and population to survive in this area. The starting point of the project is to restore the ecosystem by planting local tree species and giving the Maasai access to their traditional grazing areas. To ensure that the eco-restoration work is also sustainable, economic activities will be developed in the area. Creating sources of income and employment for the local Maasai population. This project, for which DGB has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is undergoing an extensive feasibility study and due diligence process, after which DGB will know how many carbon credits will be originated over the project lifetime.

Strategic Pillars, Purpose and Goals

Purpose

DGB envisages a healthy and vibrant world where our natural ecosystems support a flourishing diversity of life on Earth. Resilient habitats with high biodiversity will enable us to live healthy and fruitful lives soon.

Goal

Our goal is to help nature flourish and prosper. Our purpose is to make millions hectares of nature flourish and prosper. Our societies are just and diverse. Our economies operate within the bounds of our planet’s natural capital. Leaders of industry and government appreciate the inherent value of nature and account for biological diversity as naturally as any other economic and social health factor. We’re striving to safeguard the natural world, helping people live more sustainably and take action against deforestation and desertification. We achieve our purpose via nature conservation, ecosystem restoration and habitat development.

• Flourish: to be in a state of activity and production; expanding in influence, thriving, visibly doing well.
• Prosper: to achieve economic success; succeeding at what one does.

Values

• Restless Leadership – We are driven to secure changes proportional to the ecological crises we collectively face. We understand that this will require us to stretch, take risks, and redefine what is possible. We are focused on our mission yet scan the horizon, constantly searching for more effective ways to achieve our goals. When confronted with obstacles, we stay optimistic, curious and solution-focused in our efforts to protect and celebrate our planet’s natural systems.
• Tenacious Ambition – We match the urgency of the biodiversity/climate crises with the scale of our ambition, the strength of our determination, and our love for the planet. We seek transformative change throughout industry and society. Our solutions are big, bold, and innovative, and we seek powerful partners who are equally motivated to use their influence to make these solutions the new norm.
• Integrity – We hold ourselves to a high standard of moral integrity and quality of work. We care deeply and challenge ourselves directly for environmental change. We are known for producing creative and compelling work grounded in science and rigorous research. We are radically candid and fair, trustworthy and respectful in our interactions with each other and external partners. We focus on generating value in all our relationships because we consider it a privilege to be able to work for the health of our forests and planet.
• Creative Collaboration – Given that saving the planet is not for the faint-hearted, we resolve to bring joy and a spirit of playfulness to the struggle. Today’s realities call upon us to muster our wildest dreams, our powers of imagination and creative solutions to resolve them. We recognise that our work is built upon relationships, focusing on securing behavioural change and a shift in the way our society’s values interact with our natural world. We bring unique flair, spark, creativity, and a spirit of play to inspire and energise our work and those with whom we work. We share the Earth with many other life forms that have intrinsic value and warrant our respect, whether or not they are of benefit to us. The values that underpin our engagement with the world and with each other are clear, compelling and compassionate, yet uncompromising. The sense of urgency we feel is prompted by the recognition that nature needs us to set our sights even higher, to rise in meeting the challenges of our time – the dual crises of biodiversity loss and runaway deforestation and desertification.

Vision and Principles

We operate based on the following principles:

• Nature is best conserved by protecting existing natural habitats.
• Natural ecosystems are dynamic but have a finite capacity to recover from external threats, impacts, and pressures.
• Building resilience recognises the critical links between ecological and social systems.
• All humans benefit from nature; all humans can and should therefore contribute to its well being.

DGB envisions a connected world where collaboration among leading businesses and organisations can help conserve our precious planet and wildlife. Our efforts to conserve nature must acknowledge and respect the culture, values, innovations, practices and knowledge of local communities. Effective conservation of nature operates across public and private tenures. We aim to realise our goal to prevent the surface temperature from rising to roasting hot and have all living things die. We believe nature-based solutions are needed to prevent our world from deteriorating to a point where it would no longer support life.# About DGB

Carbon Markets

Governance

Financial reporting

A well-designed free market is one of the most effective policy instruments for attributing economic value to nature and can effectively encourage investment in nature conservation. To achieve our purpose, billions of euros are needed and therefore, we strive for a free-market solution based on an economic business model. DGB utilises Carbon Credits and Biodiversity Credits to achieve our purpose, as these credits provide a way to give value to nature and make investments into nature-based solutions possible. There is a need for a high-tech approach to nature restoration, harnessing the latest smart technologies to secure the best outcomes for the business, its customers, and the planet. As a public purpose company we grow larger and accelerate to achieve planetary goals faster, as our main market listing helps accelerate economic growth and provides absolute transparency. DGB is by the public, for the public: the shareholders benefit from a healthy green world on a large scale without delay. Therefore the incentive of the public is benefiting from the results of our operations, as well as financial gain. Knowing that our knowledge is limited, we should apply the precautionary principle while employing adaptive management approaches using new science and practical experience. The precautionary principle is that the lack of full scientific certainty should not be used as a reason for postponing a measure to prevent degradation of the environment where there are threats of serious or irreversible environmental damage.

Strategy

Accelerate economic growth -

With the virtually constant need for money to fuel economic growth and planetary health, individual shareholders are able to participate in our activities.

Investors from around the world -

The universe of investors is very broad, enabling the public markets to attract truly massive flows of capital.

Absolute transparency and strict regulations -

As a public company, there is an incremental transparency, greater level of disclosure, clarity, and accuracy into communications with stakeholders.

By the public, for the public -

The shareholders benefit from a healthy green world on a large scale without delay. Therefore the incentive of the public is benefiting from the results of our operations, as well as financial gain.

High valuation and leveraged effect -

Public assets have historically commanded higher average valuations for a number of reasons, including the fact that investors are willing to pay a premium for more liquidity and transparency.

Creates liquidity to an illiquid market -

The listing creates a market for the shares that gives our shareholders the ability to easily sell their holdings or buy more.

Global publicity -

As a publicly traded purpose company we reach a worldwide audience.

The priorities for action section identifies three priorities for action to help stop the downward trend in nature The three priorities for action in DGB´s strategy: Engaging all humans; Building ecosystem resilience in a changing environment; and Getting valuable measurable results. Each priority for action has three sub priorities. Together, the nine sub priorities reflect the critical components of change needed in the way that humans view, understand and approach nature and biodiversity issues. They identify the key areas on which we must focus effort if we are to maintain the functioning of ecosystems and the many ecosystem services provided by our environment. Although driven by purpose, these priorities also form the basis of DGB´s business model and route to further revenue growth for the coming years. DGB has a clear strategy. This strategy applies across all sectors— government, business and the communities. It sets out priorities which will direct our efforts to achieve flourishing and prospering nature and provide us with a basis for living sustainably. As a public purpose company we grow larger and accelerate to achieve planetary goals faster, as our main market listing helps accelerate economic growth and provides absolute transparency. These are the main benefits of our Euronext Amsterdam market listing:

1. Engaging all humans

Nature is essential for our own existence and that of the other species with which we share our continent. Our actions impact nature every day. All humans, public, businesses, Indigenous people, private landholders, non-government organisations and all levels of government— must take responsibility for biodiversity conservation. Engaging all humans is fundamental if we want to succeed in helping nature flourish and prosper. Mainstreaming nature conservation means integrating nature into decision making so that it becomes everyone’s business and is part of every relevant transaction, cost and decision. Demonstrating the benefits of nature is fundamental to engaging all humans in nature conservation.

Outcomes for mainstreaming nature conservation:

• An increase in public awareness of nature and biodiversity
• An increase in public participation in conservation activities
• An increase in participation by the private and primary industries sector in nature conservation
• An increase in the cross-sectoral integration of nature conservation in public and private sector planning and management

1.1 Mainstreaming nature conservation

1.2 Increasing Indigenous engagement

Indigenous people play a significant role in nature conservation. Increasing engagement through employment, partnership and participation and through the two-way transfer of knowledge will not only lead to improved opportunities for Indigenous people but also to improved outcomes for biodiversity. Indigenous people hold title over a large and increasing proportion of the world’s lands and waters. Currently, 20% of the land area of is under Indigenous management,

Outcomes for increasing Indigenous engagement:

• An increase in the employment and participation of Indigenous people in biodiversity conservation activities
• An increase in the use of Indigenous knowledge in biodiversity conservation decision making
• An increase in the extent of land managed by Indigenous people for biodiversity conservation.

1.3 Enhancing strategic investments and partnerships

Cooperation between different parts of the community is essential to increase effective engagement in nature conservation. Increased private funding for nature conservation and partnerships between sectors are necessary for successful outcomes. Society as a whole benefits, and future generations will also benefit, from protecting biodiversity. Markets provide a way to value nature so that it can be considered alongside economic and social factors. Although putting a price on the value of nature and ecosystem services is difficult, well-designed markets are one of the most effective policy instruments for attributing economic value to biodiversity and can be very effective in encouraging investment in biodiversity conservation. Market-based credit schemes are developed as a mechanism by which nature conservation can be integrated into public and private land use decisions. It is also important that we encourage increasing private investment in nature conservation so that both the costs and the benefits of nature use are distributed across relevant sectors.

Outcomes for enhancing strategic investments and partnerships:

• An increase in the use of markets and other incentives for managing biodiversity and ecosystem services
• An increase in private funding on nature conservation
• An increase in public–private partnerships for nature conservation.

2. Building ecosystem resilience in a changing environment

Building resilience in our ecosystems means enhancing their capacity to adapt to, survive and recover from changes and disturbances. Nature worldwide is at risk from many threatening processes. Building resilience will help nature globally to persist under existing threats and as the environment changes. Protecting biodiversity means making sure that representatives of terrestrial, aquatic and marine ecosystems and their component species and genes are conserved into the future. Protecting the diversity of ecosystems, species and genes provides a core focus for our conservation efforts. Protection of this diversity can occur through a number of mechanisms and approaches including: maintaining the extent of habitat creating nature reserves or conservation management agreements on public and private land organising complementary land and sea management practises implementing targeted species-specific conservation.

2.1 Protecting biodiversity

Outcomes for protecting biodiversity:

• An increase in the extent of private land managed for biodiversity conservation
• A net national increase in the extent and condition of native habitat across tenures

2.2 Maintaining and re-establishing ecosystem functions

Biodiversity is critical to ecosystem functions that provide supporting, provisioning, regulating and cultural services, for example oxygen production, soil formation and retention, water and nutrient cycling, and carbon storage. We need to focus on maintaining and re-establishing ecosystem functions, acknowledging that ecosystem structure is likely to change as species move in response to changing habitats and other pressures.

2.3 Reducing threats to biodiversity

3. Getting valuable measurable results# About DGB Carbon Markets

Governance

Financial reporting

3. Getting valuable measurable results

3.1 Improving and sharing knowledge

3.2 Delivering conservation initiatives efficiently

Well-functioning ecosystems help form the basis of ecological resilience. Maintaining and re-establishing ecosystem functions is part of a whole-of-ecosystem approach to biodiversity conservation. Threat management and reduction strategies will complement holistic ecosystem approaches to building resilience. Despite our efforts to date, most of the drivers of biodiversity decline have yet to be adequately addressed. Managing and reducing threats will require us to be conscious of the interaction between social, economic and ecological systems.

Outcomes for maintaining and re-establishing ecosystem functions:
* An increase in nature conservation projects
* An increase in the connectivity of fragmented landscapes and seascapes
* An improvement in the provision of environmental water allocations

Outcomes for reducing threats to biodiversity:
* A reduction in the impacts of priority threatening processes, including habitat loss, deforestation and desertification
* A reduction in the impacts of significant invasive species on biodiversity
* An increase in the use of strategic and early interventions to manage threats to biodiversity

There are significant gaps in our current knowledge of nature and biodiversity and incomplete data coverage for many parts of the world. For example, we have relatively little information on marine biodiversity and on the many invertebrate species and micro-organisms that live in terrestrial and aquatic habitats. Improved information access can also contribute to ensuring that policy implementation produces measurable results and better prioritisation of investment in biodiversity conservation.

Delivering conservation initiatives efficiently is vital to ensure that our efforts and investments produce the greatest long-term benefits for nature. To achieve that, we need to align relevant activities across the world with this strategy. This will allow us to ensure that all such activities are consistently prioritised, targeted and will deliver measurable results.

Outcomes for improving and sharing knowledge:
* An increase in the accessibility of science and knowledge for nature conservation
* An improvement in the alignment of research with nature conservation priorities
* An increase in the application of knowledge of nature conservation by all sectors and communities

Outcomes for delivering conservation initiatives efficiently:
* An improvement in the alignment of sectoral, regional and jurisdictional nature conservation approaches
* An improvement in the effectiveness and efficiency of carbon programs and investments

Resources available for nature conservation efforts—human and financial, government and non-government—are still limited. It is therefore essential that we measure, evaluate and understand the effectiveness of our nature conservation efforts. Now that the sector is growing rapidly, it is our duty to provide valuable and measurable results. This knowledge will help to ensure that our efforts are correctly prioritised and targeted, so that we are investing in efficient actions that will produce the greatest long-term benefits for nature. In order to get measurable results, we need to improve and share our knowledge of nature. This involves improving the accessibility, communication and application of knowledge as well as ensuring our priorities are evidence-based. To achieve that, we need to implement robust national monitoring, reporting and evaluation measures, so that we can identify what is working—and not working—and why, and adjust our efforts accordingly.

3.3 Implementing robust national monitoring, reporting and evaluation

Implementing robust monitoring, reporting and evaluation of the state of natural habitats and the success of conservation actions is crucial to ensure that we are delivering conservation initiatives efficiently. We need to be sure that our efforts are really making a difference to outcomes across the world. We must regularly reprioritise our resources towards actions that evidence tells us are delivering the best possible long-term outcomes, most efficiently. Monitoring how nature changes over time will also help us to understand what is driving that change, and decide whether and how to intervene to influence that change.

Outcomes for implementing robust national monitoring, reporting and evaluation:
* An increased use of monitoring and reporting in the evaluation and improvement of nature conservation projects and programs
* An increase in the use of information from both the private and public sector in the adaptive management of nature conservation

Carbon Markets

Markets & Trends

Carbon markets maturing

Global megatrends underpin our business strategy. Worldwide megatrends drive the demand for carbon credits and underpin our growth opportunities. Here you find examples of the long-term opportunities these trends create for DGB.

The Taskforce on Scaling Voluntary Carbon Markets was launched in September 2020 to take stock of existing voluntary offsetting schemes and identify key challenges to scaling them up while ensuring credibility and avoiding issues like double-counting. Spearheaded by former Bank of England Governor Mark Carney, and backed by a host of private corporations, the Taskforce noted that the current market for offsets will need to grow by at least 15- fold by 2030 if the private sector is to align with the Paris Agreement’s 1.5C trajectory. By 2050, he warned, it may need to be up to 160 times bigger than in 2020, should corporations rely on offsetting rather than emissions reductions.

Aside from helping businesses to meet their own commitments and to align with legally binding climate targets in the markets where they operate, it is hoped that the Taskforce will play a role in boosting carbon prices. McKinsey estimates that annual global demand for carbon offsets could reach up to 1.5-2.0 billion tonnes of carbon dioxide by 2030 and up to 7-13 billion tonnes by 2050. In 2020 around EUR 1 billion-worth of carbon offsets changed hands a day, as well as lots of options and futures contracts. There are now clear signs that the market is joining the financial mainstream, with hundreds of investment firms trading in it. However, even greater levels of growth are on the horizon due to the impending net-zero commitments from both the US and China. Analysts and traders believe this record-breaking rally still has plenty of room to run.

It might seem counterintuitive that in a year when emissions dropped significantly due to the pandemic, carbon prices and global market value hit new records. Major carbon markets saw prices and volumes rise on expected tightening of emission caps due to more ambitious climate goals in the future. An emissions trading system is the main tool for reducing greenhouse gas emissions and carbon offsets are the cornerstone of climate and energy policy.

Carbon prices on the rise

People worldwide are waking up to the potential of nature based solutions such as reforestation and other ecological restoration to capture carbon and bring back nature where it cannot return unaided. Prices for allowances in cap-and-trade programmes worldwide are going up. The most significant example of this trend is in the EU ETS, the North American carbon markets (Western Climate Initiative or WCI, which includes the state of California, and the northeast’s Regional Greenhouse Gas Initiative known as RGGI) are also seeing ever higher carbon prices, as is the New Zealand ETS

Commodity Price	% in 1 year	Price % in 3 years
Gold	8.03%	48.84%
Silver	-10.87%	54.63%
Oil	64.66%	63.81%
LNG	147.15%	181.32%
Wheat	10.57%	131.63%
Coffee	59.02%	142.30%
CO2-offsets	110.31%	273.09%

Net zero pledges increases

Nations, cities and individual companies and organisations globally, are committing to meet goals of net zero. Investors need to show similar leadership - however, for several reasons, many investors feel uncertain when it comes to the means by which these goals can be realistically achieved. DGB is committed to turning these risks into opportunities and sees nature as an asset not a liability.

On 28 June 2021, the European Union introduced climate change laws that legally obliged all of the member states to reduce greenhouse gas emissions by more than half by the year 2030 and to become net-zero emissions economies by 2050. The real impact of government regulation may take a few more years to be felt fully but, until this is the case, companies will be pushed towards net zero targets by the demands of clients and customers and a desire for the company to gain a more favourable market position.

Voluntary credits and carbon tax

CORSIA

Aviation emissions from international flights have not been included in the international climate regime administered by the United Nations Framework Convention on Climate Change (UNFCCC), as these fall outside of the scope of nationally-determined climate action. Instead, these emissions have been dealt with by the International Civil Aviation Organization (ICAO). In October 2016, the member states of the International Civil Aviation Organization made the historic decision to adopt a global market-based measure for aviation emissions. This scheme, the Carbon Offsetting and Reduction Scheme for International Aviation – more commonly known as CORSIA – is the culmination of many years of work at ICAO, with the support of the industry. As the name suggests, CORSIA is a global offsetting scheme, whereby airlines and other aircraft operators will offset any growth in CO2 emissions above 2020 levels.This means that aviation’s net CO2 emissions will be stabilised, while other emissions reduction measures, such as technology, sustainable aviation fuel, operations and infrastructure options, are pursued. A price on carbon helps shift the burden for the damage from GHG emissions back to those who are responsible for it and who can avoid it. Instead of dictating who should reduce emissions where and how, a carbon price provides an economic signal to emitters, and allows them to decide to either transform their activities and lower their emissions, or continue emitting and paying for their emissions. In this way, the overall environmental goal is achieved in the most exible and least-cost way to society. Placing an adequate price on GHG emissions is of fundamental relevance to internalise the external cost of climate change in the broadest possible range of economic decision making and in setting economic incentives for clean development. It can help to mobilise the nancial investments required to stimulate clean technology and market innovation, fueling new, low- carbon drivers of economic growth. There is a growing consensus among both governments and businesses on the fundamental role of carbon pricing in the transition to a decarbonized economy. For governments, carbon pricing is one of the instruments of the climate policy package needed to reduce emissions. Carbon pricing and/or carbon tax, is a major driver of the prices in the carbon markets. It is anticipated that CORSIA will mitigate around 2.5 billion tonnes of CO2 between 2021 and 2035, which is an annual average of 164 million tonnes of CO2. This is equivalent to the total annual CO2 emissions from the Netherlands across all sectors.CORSIA helps aviation towards its mid-term goal of carbon-neutral growth.

About DGB

Carbon Markets Governance

Biodiversity extinction

Conserving biodiversity is an essential part of safeguarding the biological life support systems on Earth. All living creatures, including humans, depend on these systems for the necessities of life. Many scientists consider that the Earth has now entered a global biodiversity extinction crisis (UNEP 2007). That is, they believe that many of the species alive today are under threat of rapid extinction. In response to this crisis, we need to transform our management of biodiversity, by placing the conservation and sustainable use of biodiversity at the centre of our thoughts and actions. A commitment to ecological sustainability is long entrenched in international and national policy and has been articulated extensively through the development of most natural resource plans and legislation. Governments worldwide have adopted climate change initiatives. In urgent response to these crises, many countries have made carbon reduction a central pillar of domestic policy. Japan has pledged to be carbon neutral by 2050 and China by 2060, while the European Union’s 2030 Climate Target Plan aims to reduce greenhouse gas emissions to 55% below their 1990 levels, with full carbon neutrality expected by 2050. Although the US controversially left the Paris agreement in 2017, the country’s newly elected administration aims to spend $2.0 trillion over four years to escalate the use of clean energy, with a goal to also reach net-zero emissions by 2050.

Financial reporting

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About DGB Carbon Markets Governance

Sustainability among young people

Financial reporting

GreenTech & ClimateTech

The climate tech sector has gained signicant momentum in the past decade, with global urgency and technological breakthroughs suggesting that now may be the time for investors to condently commit to the climate investments that will shape the future. Although the COVID-19 pandemic has temporarily redirected resources toward nding a vaccine and weathering economic shutdowns, it has also reminded nations about the value of international collaboration in solving problems of such immense magnitude and complexity. In the past six months, a number of governments have committed to act on climate change. The Prime Minister of Japan vowed to be carbon neutral by 2050, President Xi Jinping pledged to make China carbon neutral by 2060, and the newly elected Biden administration plan to invest trillions of dollars in the US into a clean-energy transition targeting net-zero emissions by 2050. Climate tech represents a vast and sprawling opportunity that currently amounts to a $2.5 trillion market encompassing energy, transportation, agriculture, buildings, industry, climate adaptation, and materials & resources. In terms of startup investment, the energy sector leads the way with $7.2 billion of capital invested YTD. Developments in this sector are powering innovation across the ecosystem, as participants in the transportation, industrial, and agriculture sectors develop electried products and processes that are helping decarbonize the planet. This report delves into innovation and disruption across each of these sectors and provides a visual exploration of the key emerging technologies that will enable countries and corporations to meet their net-zero targets. Younger consumers are more mindful of sustainability, driving corporations to develop carbon-neutral products and practices. For Generation Z and millennials, climate awareness and advocacy are key issues that dene their policy perspectives and politics. The climate activism of Greta Thunberg has been embraced by her peers around the world, and her organisation Fridays for Future supports climate strikes, typically led by youth, as a way to pressure governments into policy action. Her inuence resulted in a global climate strike in September of 2019, before which Amnesty International wrote to 30,000 schools to encourage them to allow their students to take part in the demonstrations without penalty. According to the Yale Program on Climate Change Communication, 62% of individuals in the US who are millennials or younger strongly or at least somewhat supported climate activism in 2019.5 A 2018 Gallup survey found that 70% of Americans aged 18 to 35 worried a great deal or a fair amount about climate change. All this amounts to companies considering climate change in their marketing and product development. This has been of particular note in Big Tech, where companies such as Apple, Microsoft, Google, Amazon, and Facebook have all promised carbon neutrality from their operations by 2030.

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About DGB Carbon Markets Governance

Financial industry

In order to meet the Goals, carbon markets must grow up to 15 times by 2030. There is an important role in allocating capital into green investments, because that is how we ultimately make high-carbon energy disappear by having alternatives and osetting the emissions for the unavoidable damage to nature. Financial community plays a critical role in channelling funds into sustainability for a more resilient economy, so it is everyone’s responsibility but also opportunity. There is still a lot of countervailing pressure to stay in the status quo and for some, the journey to decarbonization feels full of risk. Unfortunately, if we don’t risk, there is going to be more risk that could result in stranded assets. Therefore, embedding these risks into the nancial decision-making process is crucial for the nancial industry. Africa’s remaining forests and wildlife are under increasing pressure today, further emphasising why there is no time to sideline forest carbon markets. Carbon markets oer the best tool in a generation to restore and protect forests. An increase in oset pricing is needed to oset the opportunity costs likely to increase dramatically alongside the human population growth. It is well known that habitat restoration at scale costs money; carbon osetting oers a pragmatic way to close the conservation funding gap and lift millions of people out of poverty. We need both carbon osetting and deep decarbonization at source, not either/or. Private investors have a unique and noteworthy role to play and carbon osetting remains crucial - where organisations compensate for emissions by buying carbon credits from certied emissions reduction projects. Nature based solutions are central to carbon osetting. Here at DGB we understand that while the long term horizon required to invest in private markets may not suit all investors, the longer investment period provides a more feasible horizon for the relevant solution to be met. This strengthens the robustness of the target return for the nancial industry and its players. Our business model is designed and fully equipped with modern nancial technology to help you go farther and faster towards fullling the net zero pledge.

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Risk factors

72

About DGB Carbon Markets Governance

Financial reporting

73

About DGB Carbon Markets Governance

Financial reporting

DGB recognizes that risks are associated with achieving its strategy and business objectives. DGB aims to be risk aware without being unduly risk averse. DGB therefore actively manages its risks to protect and grow the company, it has adopted a uniform and systematic approach for managing risks. DGB has established a risk governance that is consistent with the size of the organization and the risk prole of the company. DGB´s governance identies, establishes and reinforces the importance of oversight responsibilities for risk management. In compliance with principle 1.4 of the Dutch Corporate Governance Code, the Board of Directors has updated its company- wide risk assessment in 2021. This section describes the principal risks that could potentially aect DGB, with further detail on nancial risks provided in the nancial statements. While DGB believes that the risks described below are the material risks concerning DGB´s business, they are not the only risks relevant to DGB.# Other risks, facts, or circumstances not presently known to DGB or that DGB currently deems to be immaterial, could individually or cumulatively prove to be significant and could have a material adverse effect on DGB´s business, results of operations, financial condition, and prospects.

DGB accepts strategic and business risk knowing that in order to achieve its strategic objectives it will consume capital when investing in new assets, people, and processes. In pursuance of its strategic objectives DGB values a solid financial and capital outlook. Key to DGB Group’s strategy is to utilise the CO2 credit markets as instruments to economise its nature based solutions. A collapse of these markets is seen as a risk. It is our perception that the risk of a market collapse of the CO2 credit markets is minimal, considering increasing regulations across a wide range of national and international bodies on measurement, reporting, and decreasing carbon footprints on consumer, organisational, and national levels. We consider the events of a decreasing price realisation of the CO2 credits, but also witness the continuing upward trend of the price realisation in the market. The impact of negative changes to the market size could be significant for DGB for sales that are not captured within long-term offtake agreements. Conversely, the impact of above expectation development of the market could also be significant for sales that are not captured within long-term offtake agreements, which is why DGB aims to have a balanced mix of long-term binding agreements combined with market price following revenues.

Strategic and business risk

CO2 market

With the market growth, we observe an increase in the number of participants in the CO2 market offering a wide range of services to the market. We feel confident that the strategy of being a project developer provides a position with a competitive advantage over a large number of participants that are not able to develop projects. However, the acceleration of the competitiveness of the environment through new entrants or through movements of existing market participants remains a realistic risk. With the market growth, we also perceive the risk of decreasing project funding appetite to be relatively low as demand growth and price realisation increases provide healthy investment grounds for project funding. There is a risk that with an increase in market competitiveness, the competition for project funding will also increase. It is DGB’s funding strategy to continue to develop and maintain a diversified global network of project funders, as well as a combination of long-term and project-based funding partners.

The CO2 credit markets and CO2 credit market participants are subject to continuous validations, verifications, and investigations regarding their transparency, integrity, and operations. DGB Group supports the industry’s actions that will help further increase the transparency and integrity of the CO2 credit markets, and is firmly committed to delivering high quality and high integrity credits in a transparent way. DGB also acknowledges that within the industry, differences in perspective exist on how to effectively reach the objectives of nature preservation, nature protection, and habitat restoration, which could lead to reputational risks for the organisation if projects & project methodologies, partners, and investors are not carefully reviewed as part of the due diligence processes. Reputational risks can negatively affect the ability to attract and retain customers and investors. We believe that the recent agreements by the COP26 participants around setting up transparent international registries and oversight bodies will contribute strongly to the transparency of the CO2 credit markets.

Competition

During the recent meetings of the COP26, agreements have been made between the participants for the development of new international regulatory frameworks related to the registration and oversight of CO2 credit markets. DGB Group firmly believes that this will increase the transparency of the CO2 credit markets and sees any delays or prolongations of negotiations as a risk to the overall market transparency. DGB Group perceives the risk of any such prolongations as being minimal to its ongoing operations or financials. A different risk which may materialise is the adherence to the international regulatory frameworks that are being set up as a result of the agreements by the COP26 participants. Our current insight is that the overseeing body that will be set up, is intended to take corrective action versus any non-compliance to the new international regulatory frameworks, thereby mitigating a lot of measures otherwise needed to be taken by companies themselves.

With the growth of the market demand, trending increases in price realisation of CO2 credits, and new entrants to the industry and markets, DGB Group also witnesses increased interest and participation from nation states and their relevant governing bodies. It also witnesses the development or updating of regulatory frameworks by states and their relevant bodies to accommodate for these relatively new markets and products. Given the long-term project operations of certain types of projects that DGB Group undertakes, such as reforestation projects, there is a risk of changing regulatory frameworks negatively impacting financials. A change in local tax regime can negatively impact margins. Measures to lower these risk levels are clear agreements with landowners and local governmental bodies, the due diligence process on existing regulatory frameworks combined with a continued stakeholder engagement related to developing and expected changes in regulatory frameworks, and a diversified project portfolio - diversified geographically, type, and in duration/cycle time of projects executed - to minimise the impact on Group level in case such event materialises and negatively affects the Group.

Verification

Vendors and supply chain dependencies could negatively impact DGB’s operations and security of data, systems, and services. DGB has a low appetite for dependency on third-parties in its critical processes. DGB strives to minimize outsourcing of activities directly related to its core processes or platform to avoid dependency on suppliers. DGB believes that not being limited by third-party software in its core operations is a key factor in its ability to rapidly increase the number of transactions that the platform can process. DGB has established a Third Parties Policy, which defines a framework, including clear ownership, for assessing third-party risk. DGB is monitoring third-party risk on a continuous basis with support of a third party risk management tool. In 2021, DGB carried out a periodic review on its most important third parties to update their risk profile and monitor compliance with the policy. The review was completed on all in-scope vendors, resulting in reclassifications, updates of third-party risk profiles or off-boarding advice due to inactivity.

Regulatory Framework

DGB has low appetite for reputational risk and aims to avoid actions that trigger negative international media attention and/or significant reputational damage. Any negative publicity about DGB, the quality and reliability of its products and services, changes to its products and services, its ability to effectively manage and resolve complaints, its privacy and security practices, litigation, regulatory activity, and the experience of merchants and shoppers with its products or services, could adversely affect its reputation and the confidence in and use of its products and services. Harm to DGB’s brand can arise from many sources, including failure by DGB or its partners to satisfy expectations of service and quality, inadequate protection of sensitive information, compliance failures and claims, litigation and other claims, employee misconduct, rumors or false stories, and misconduct by its partners, service providers, or other counterparties. DGB wants to build an ethical and sustainable business and therefore actively mitigates risks that could negatively affect the DGB reputation or brand. Failure to meet carbon-reducing policy goals, for example, could cause reputational damage, affecting the share price. DGB prides its commitment to goals that improve the business, social and environmental footprint.

Reputational risk

The success of DGB Group is partly dependent on acquisitions and restructuring. DGB Group carries out acquisitions as part of its business strategy. DGB Group is also considering making acquisitions in the future in order to expand, supplement or diversify its activities. Such acquisitions may expose DGB Group to operational challenges and risks including integration and collaboration challenges, the ability to profitably manage the acquired businesses and retain key personnel. If DGB Group fails to carry out acquisitions or to successfully integrate or operate the acquired company, this may negatively affect DGB Group.

Acquisitions

DGB recognizes that operational risks are associated with achieving its business objectives. Operational risk concerns the risk of losses resulting from inadequate or failed internal processes, people, and systems or from external events, including legal risk. DGB has a moderate appetite for operational losses. During 2021, DGB remained well within its risk limits that were set as a reflection of its risk appetite for operational risks.

Operational risk

DGB continues to see a difficult market for finding and attracting talent, with a strong competition for talented professionals at all levels of seniority. This is a continued risk for operations.# About DGB

Carbon Markets

Governance

Financial reporting

Financial risks relate to the failure to generate revenue due to the entry of new competitors, together with the introduction of new products, brands and sales models. The positioning, product range, pricing and service level of the various retail brands in their own markets are continually refined on the basis of frequent, extensive and thorough customer research, market information, and competition analysis. DGB´s projects are financed with external capital. It is a financial risk for DGB that a project that is sourced and prepared by DGB´s team, cannot be executed because of lack of working capital. It is key for DGB´s operations to be able to secure project financing in time and against favourable conditions. When project financing is provided and the projects are started, there is also the risk of repayment of the project financing. In a project financing, the primary, and typically sole, source of income for the repayment of the debt provided by the lenders is the revenue generated by the project. The result is that, until the project is constructed and, at least partly, operational, the project company will likely not be able to repay the lenders. Ensuring the proper and timely construction of the project is therefore an absolutely fundamental consideration for all of the parties. The FX risk is perceived to be medium as most of the generated credits are sold in EUR or USD, whereby any fluctuation in EUR- USD exchange will have an impact. Risk is minimised through the addition of the produced credits to the balance sheets in EUR, without a currency conversion from local project development nation’s currency to EUR. All major procurement contracts for project operations are currently in EUR. DGB operates in developing countries and the Group has a complex organizational structure, while performing in a new industry. Due to this nature, it is a risk for the company to establish and maintain relationships with professional financial service providers, such as banks, accountants, investment brokers, and other third parties.

Financial risks

Project financing

FX rate

Service provider risks

Governance risks

Non-executive board members

Both the Corporate Governance Code and practicality support the proposition that the Board of Directors consists of non-executive directors who cannot and should not be involved in actual day-to-day risk management. The non- executive directors should instead, through their risk oversight role, satisfy themselves that the risk management policies and procedures designed and implemented by the company’s senior executives are consistent with the company’s strategy and risk appetite. DGB has taken the necessary steps to foster an enterprise- wide culture that supports appropriate risk awareness, behaviours and judgments about risk and recognizes and appropriately escalates and addresses risk-taking beyond the company’s determined risk appetite. Nevertheless, at the moment the Board of Directors does not have any non- executive board members and therefore lacks the desired supervisory function in its senior management.

External auditor

DGB is listed on the official market of Euronext Amsterdam and must therefore comply with the applicable laws and regulations. There are only six audit firms in the Netherlands that can issue an auditor’s report to listed companies. Given the relatively small size of DGB, it is difficult to find an audit firm that is willing to perform the statutory audit. There is a risk that Euronext Amsterdam will terminate its listing if DGB has not found a PIE accountant before 13 April 2023. This can lead to complications. Although a stock exchange listing offers great advantages, it can involve costs such that profitability is reduced as attracting a PIE account entails additional costs. Compliance with laws and regulations is continuously monitored. Proactive internal compliance checks are performed. There is a strong involvement of the legal department and external legal advisers. Business processes are efficiently organized so that the audit can be optimally supported.

Corporate Governance

Board structure

A solid, transparent, and seamless corporate governance structure is key to DGB. DGB is a public limited liability company incorporated under Dutch law and listed on Euronext Amsterdam in the Netherlands. The corporate governance structure is based on the articles of association, the Dutch Civil Code requirements, the revised 2016 Dutch Corporate Governance Code (the Code), applicable securities laws, and the rules and regulations of Euronext Amsterdam. The Group monitors and assesses the corporate governance structure to ensure compliance with the Code, applicable laws and regulations, and relevant developments. If a substantial change to the corporate governance structure occurs that affects compliance with the Code, shareholders will be informed at a General Meeting. The Company has a one-tier board structure, consisting of executive directors and non-executive directors, each of which have specific responsibilities and both accountable to the General Meeting for the performance of their duties. The Board of Directors is collectively responsible for the overall management, which includes, among others, developing and executing DGB’s strategy and risk management policy, and setting and achieving DGB’s objectives. The non-executive directors oversee and advise the executive directors, and can give guidance to its general development. Each director is accountable to the General Meeting for the performance of its duties.

The Board

Per December 31, 2021, DGB’s Board is composed of... S.A.M. Duijvestijn as Chief Executive Director. Each Director has duties related to their specific area of responsibilities and expertise. In performing their duties, the Directors are required to be guided by the best interests of the Company and the business connected thereto, taking into consideration the interests of the Company’s stakeholders. In performing their duties, the Directors are required to be guided by the interests of DGB which includes the interests of the business connected with it, taking into consideration the interests of the Company’s stakeholders. These interests are driven by DGB’s focus on long-term value creation and its implementation in DGB’s strategy and culture. The Board also has due regard for corporate social responsibility issues that are relevant to the Company. The Board By-Laws set out rules regarding the composition, responsibilities and objectives of the Board of Directors. According to the Dutch Corporate Governance Code principle 1.3 DGB appointed an internal audit function to assess the design and the operation of the internal risk management and control systems. In anticipation and preparation of new non-executive board members, the Board of Directors has appointed two permanent committees: a ‘Nomination and Remuneration Committee’ and an ‘Audit Committee’ (the Committees). Each of these Committees has a preparatory and/or advisory role to the Board of Directors. The Committees report their findings to the Board of Directors, which is ultimately responsible for all decision making. Terms of Reference apply for each Committee, found at www.dgb.earth.

Nomination and Remuneration Committee

The Board of Directors has assigned certain tasks to the Nomination and Remuneration Committee. This Committee drafts proposals for DGB’s remuneration policy, and it proposes the remuneration of the individual Directors. It analyses developments of the Code and other applicable laws and regulations, and prepares proposals for the Board of Directors on these subjects. It further advises the Board of Directors on its duties regarding the selection and appointment of Directors. The Committee is also responsible for carrying out annual assessments of the individual Directors. Where necessary, the Nomination and Remuneration Committee prepares proposals for (re)appointments and drafts the selection criteria for the (re)appointment of Directors.

Audit Committee

The Board of Directors has assigned certain tasks to the Audit Committee. This Committee prepares proposals for DGB’s remuneration policy, and it proposes the remuneration of the individual Directors. It analyses developments of the Code and other applicable laws and regulations, and prepares proposals for the Board of Directors on these subjects. It further advises the Board of Directors on its duties regarding the selection and appointment of Directors. The Committee is also responsible for carrying out annual assessments of the individual Directors. Where necessary, the Audit Committee prepares proposals for (re)appointments and drafts the selection criteria for the (re)appointment of Directors.# About DGB

Carbon Markets

Governance

Financial reporting

Compliance with the Dutch Corporate Governance Code

DGB acknowledges the importance of good corporate governance. The Group agrees with the general approach and with the majority of the provisions of the Code. In 2021 there were no non-executive board members and there was no external auditor appointed, As such, DGB complies with the Code with the exception of:

• 1.1.2: The Board of Directors was not able to engage with the supervisory board early on in formulating the strategy for realising long-term value creation, as there were no non-executive board members in 2021.
• 1.1.3: The Board of Directors was not able to discuss with the supervisory board on the strategy, the implementation of the strategy and the principal risks associated with it, as there were no non-executive board members in 2021.
• 1.4.1: The Board of Directors did render account on the effectiveness of the design and operation of the internal risk management and control systems referred to in best practice provisions 1.2.1 to 1.2.3, as there were no non-executive board members in 2021.
• 1.5, 1.5.2 and 1.5.4: As there were no non-executive board members and there was no external auditor appointed for 2021 there were no meetings as described in these principles.
• 1.6.1 t/m 1.6.4 and 1.7.1 t/m 1.7.6: There was no external auditor appointed for 2021.
• 2.1.1 t/m 2.1.10, 2.2.1 t/m 2.2.8, 2.3.4 t/m 2.3.11 and 2.6.4: There were no non-executive board members in 2021.
• 3.1.1 t/m 3.1.3, 3.2.1 t/m 3.2.3 and 3.3.1 t/m 3.3.3: There were no non-executive board members in 2021 to propose a remuneration policy with the management board remuneration and its own appropriate remuneration at the general meeting.
• 4.1.1: There were no non-executive board members in 2021 to oversee the supervision of relations with shareholders.
• 4.1.9: There was no external auditor appointed in 2021 to be questioned by the general meeting in relation to his report on the fairness of the financial statements.
• 5.1.1 t/m 5.1.5: The composition and functioning of the management board was not composed of both executive and non-executive directors so that the supervision by non-executive directors is properly carried out and independent supervision could be assured, as there were no non-executive board members in 2021.

Remuneration report

Key considerations
Despite overall company results being negatively impacted by the lockdowns, management moved quickly to reduce costs, preserve cash, and manage the liquidity, which strengthened our capacity to work through the uncertainties triggered by the pandemic. DGB proved to be resilient as a result of formulating effective responses to the COVID-19 crisis, with the efforts of DGB´s dedicated employees, supported in their work by committed suppliers, earning the continued loyalty of existing customers and attracting many new customers. Throughout the pandemic, the Management Board has shown decisive and proactive leadership by taking actions across the Group to maintain continuity, manage risks and proactively mitigate the adverse financial impacts of COVID-19. While market conditions during 2021 were challenging, the Group articulated an ambitious new company strategy, and developed a new sustainability strategy.

During 2021, the Management Board’s remuneration was implemented in accordance with the remuneration policy. To ensure that remuneration is linked to performance, a proportion of the remuneration package is variable and dependent on the short-term and long-term performance of the individual member of the Management Board and the Group. This report provides an overview of the remuneration policy approved by the Annual General Meeting of DGB in 2021 (remuneration policy). It explains how this policy has been put into practice over the past financial year. This remuneration report is intended to reflect the reporting requirements stated in article 2:135b of the Dutch Civil Code (DCC), which came into effect on 1 December 2019. It implements the EU Shareholder Rights Directive II (SRDII), which took effect on 3 April 2017. One of the key objectives of SRD II is to provide greater transparency for company stakeholders, which DGB fully supports and strives to achieve. This section describes the key considerations that the Remuneration Committee takes into account when designing pay programmes and making compensation decisions. 2021 was another extraordinary year for all organizations worldwide.

Primary remuneration elements for 2021

Our previous Remuneration Policy was approved by shareholders at our 2015 AGM. In 2021, with support from our external advisers, we reviewed our remuneration arrangements in order to provide a simpler structure. As such, we are proposing minor changes to simplify the current Remuneration Policy. The current Remuneration Policy provided good alignment between executive remuneration and shareholders’ long-term interests. However, our new proposed Remuneration Policy further cements the alignment and adopts some new features to reflect developing best practices in corporate governance and grant share options to both executive and non-executive members of the Board of Directors following the implemented DGB Share Option Scheme 2021.

The remuneration policy is aimed at attracting, motivating and retaining qualified members of the Board of Directors. The aim of the proposed remuneration policy is to offer the members of the Board of Directors a balanced and competitive remuneration in order to achieve the strategic and operational objectives of the DGB. The Nomination & Remuneration Committee oversees the Remuneration Policy, remuneration plans and practices of DGB and recommends changes when appropriate. The Committee is ideally composed of a majority of Non-Executive Directors from the DGB Board of Directors but momentarily consists of the Board of Directors itself. Our review of the Remuneration Policy took into account various factors including the strategic opportunities and challenges DGB may face in the next few years, the external corporate governance environment, the views of our employees and commentary from shareholders and advisory bodies. As a result of our company-wide review of remuneration arrangements, it was decided to implement the DGB Share Option Scheme 2021. The changes affected the short-term and long-term incentive of the Executive and Non-Executive Board Members.

Objectives

The Remuneration Policy of DGB is simple and transparent and supports the interests and sustainability of the Company in the medium and long-term; and encourages a “pay for performance culture”. The Committee may deviate from the Remuneration Policy below only in exceptional circumstances.

Scope

The objective of DGB’s Remuneration Policy is to attract, motivate and retain the qualified individuals needed in order to achieve its strategic and operational objectives. The Committee has taken the following areas into account in establishing the Remuneration Policy:

• International and Dutch competitive market trends;
• The relevant provisions of statutory requirements;
• The intent to be mindful of corporate governance best practices as expressed by institutional investors and the interests of DGB’s shareholders;
• Trends in sustainability;
• The social context around remuneration;
• The views of the Board, senior leadership and employees; and
• The views and interests of our stakeholders.

Salary, benefits and pension

Summary of Management Board’s remuneration
Performance measures
agenda and supporting environmentally sound solutions. Targets are developed around a mix of financial and non-financial measures. The non-financial measures are predominantly strategic goals focusing on the long-term and the company’s sustainability. Each year these targets are based on specific projects and priorities for the forthcoming year. At the beginning of each year, the Committee establishes the performance measures and targets based on DGB’s business priorities for the year. These are reviewed after the end of the year and the Committee approves awards based on the performance achieved. The Committee applies judgement where necessary to ensure approved pay-out levels are reflective of actual, overall company performance.

Target annual bonus opportunity of 100% of gross annual base salary for the CEO and 50% of gross annual base salary for the other Executive Directors. Maximum opportunity will be 200% of target. Performance is assessed over one financial year and is based on a mixture of corporate financial and operational, strategic and personal objectives. Measures will normally be weighted 60% financial and 40% non-financial. The Committee could determine a different ratio between financial and non-financial measures.

Salary is fixed cash compensation which enables the recruitment and retention of individuals of the caliber required to drive business performance and execute DGB group’s strategy.# About DGB Carbon Markets Governance

The current Remuneration Policy

Salaries are set in line with individual performance and contribution to company goals with reference to external market data. There is no defined maximum salary or level of benefits. The Committee’s usual approach for salary increases is to consider the range awarded to other employees. However, any increases will be subject to strong individual performance. During 2021, the Management Board was composed of S.A.M. Duijvestijn, CEO. Key element of our “pay for performance” culture is linked to pre-determined measurable targets set and assessed by the Committee. Our performance measures evolve over time but always support the long-term interests of the company by ensuring we reward individuals appropriately for driving the strategic The non-financial measures vary from year to year but generally relate to HSE, strategy, financial and people. Payment under the bonus arrangement may be reduced by up to 20% if health, safety and environment (“HSE”) performance is judged unsatisfactory by the Committee, taking into account feedback from the HSE Committee.

The DGB Share Option Scheme 2021

The DGB Share Option Scheme 2021 aims to incentivize the creation of shareholder value above that comparable organisations achieve. Executive Directors will be granted options which will vest after two years subject to the achievement of prespecified performance targets. The Committee will determine how the performance measures have been met. Performance targets may be adjusted in the event that the Committee determines this to be appropriate; these will be at least as challenging as those originally set. In line with the Dutch Corporate Governance code vested shares (net of tax) are required to be held for a further two years by the Board of Directors. Executive Directors are expected to build up share ownership over a period of five years (the later of the date of implementation of the share ownership guidelines or appointment) and maintain holdings of at least 300% of base salary for the CEO and 150% of base salary for the other Executive Directors. Until this requirement has been met.

Option Scheme

Role	2021 Annual fixed salary	2021 Target Bonus	2021 Target Share Option award
Chief Executive Officer (S.A.M. Duijvestijn)	€ 120.000	€ 120.000	240.000
Non-executive board members	€ 0	€ 0	0

Outlook 2022

In principle, the remuneration level is validated by a benchmark comparison once every three years, and reviewed annually. This helps to determine the overall competitiveness of the Board of Directors’s remuneration. The benchmark comparison of DGB´s remuneration with that of a peer group of other Dutch small-cap companies. Peer group The salaries of members of the Board of Directors were assessed against the market environment and the adjustments for other employees, and will be adjusted by 4.32% in line with the two-year market movement for employees in the Netherlands. For the Target Bonus opportunity in 2022, the Board believes that the following four quantitative KPIs are appropriate: revenue growth and gross margin, weighted at 40% and free cash flow, weighted at 20%.

Financial reporting

Statement by the Management Board

The Board of Directors of DGB is responsible for establishing and maintaining an adequate system for risk management and internal control. This system is designed to manage risks effectively and efficiently, to provide reasonable assurance that objectives can be met, that financial and non-financial reporting is reliable and that laws and regulations are complied with. Internal control over financial reporting is an integral part of the risk management and control systems of DGB. Internal control over financial reporting is a process to provide reasonable assurance regarding the reliability of our financial reporting for external purposes following IFRS and IFRIC interpretations as endorsed by the European Union and following sub-article 8 of article 362, Book 2 of the Dutch Civil Code. Internal control over financial reporting includes: Maintaining records that, in reasonable detail, accurately, and fairly reflect our transactions Providing reasonable assurance that transactions are recorded as necessary for preparation of our financial statements The Board of Directors has performed a company-wide risk assessment and described the principal risks facing the Company concerning its risk appetite in this Annual Report’s section ‘Risk factors’. Due to its inherent limitations, internal control over financial reporting is not intended to provide absolute assurance that a misstatement of our financial statements would be prevented or detected. Also, projections of any evaluation of the effectiveness of internal control over financial reporting in future periods are subject to the risk that the controls may become inadequate because of changes in conditions or that the degree of compliance with the policies or procedures may deteriorate. However, the risk management and internal control systems cannot guarantee that missing objectives, misstatements, fraud or non-compliance with laws and regulations will not occur. This Annual Report provides sufficient insights into any failings in the effectiveness of the internal risk management and control systems (see section ‘Risk management’); The systems mentioned above provide reasonable assurance that the financial reporting does not contain any material inaccuracies (see section ‘Risk management’); Based on the current state of affairs, it is justified that the financial reporting is prepared on a going concern basis (see ‘Financial statements’); and This Annual Report states those material risks and uncertainties that are relevant to the expectation of the Company’s continuity for twelve months after the preparation of this report (see section ‘Risk Factors’ and ‘Financial statements’). The Board of Directors has assessed the effectiveness of the design and operation of the risk management and control systems as of December 31, 2021. The results were prepared for the Audit Committee and the Board of Directors and prepared to discuss with an independent external auditor, which is to be appointed.

Based on the assessment and with reference to best practice provision 1.4.3 of the Dutch Corporate Governance Code, the Board of Directors confirms that to the best of its knowledge and belief: The financial statements of 2021 give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; and The Annual Report 2021 gives a true and fair view of the position as at December 31, 2021, the development and performance during 2021 of DGB, together with a description of the principal risks that DGB faces. In accordance with Article 5:25c of the Financial Supervision Act, the Board of Directors confirms that to the best of its knowledge and belief:

Rotterdam, the Netherlands, 24th of May, 2022
S.A.M. Duijvestijn, CEO

Consolidated statement of financial position

Financial reporting

	Notes	2021	2020
In thousands of euros
Assets
Property, plant and equipment	15	167	138
Intangible assets and goodwill	16	70	-
Equity-accounted investees	17	432	-
Non-current assets		669	138
Inventories	18	164	-
Trade and other receivables	19	6,145	5,673
Cash and cash equivalents	85	85	251
Current assets		6,394	5,924
Total assets		7,063	6,062

Consolidated statement of profit or loss and other comprehensive income

Financial reporting

	Notes	2021	2020
For the year ended 31 December
In thousands of euro
Restated
Continuing operations
Revenue	10	-	-
Cost of sales		-	-
Gross profit		-	-
Other income	19	-	-
Selling and distribution expenses		(409)	-
Administrative expenses		(802)	(462)
Operating profit		(1,192)	(462)
Finance income		172	64
Finance costs		(39)	(159)
Net finance costs	11	133	(95)
Share of profit of equity-accounted investees, net of tax	17	(46)	-
Profit before tax		(1,105)	(557)

Financial reporting

	Notes	2021	2020
Profit before tax (carried over from previous page)		(1,105)	(557)
Income tax expense	14	-	(154)
Profit from continuing operations		(1,105)	(711)
Discontinued operation
Profit (loss) from discontinued operation, net of tax		-	699
Profit for the period		(1,105)	(12)
Profit attributable to:
Owners of the Company		(1,104)	(12)
Non-controlling interests		(1)	-
		(1,105)	(12)
Earnings per share Basic earnings per share (euro)	12	(0.12)	(0.00)
Diluted earnings per share (euro)	12	(0.12)	(0.00)
Earnings per share – Continuing operations Basic earnings per share (euro)	12	(0.12)	(0.08)
Diluted earnings per share (euro)	12	(0.12)	(0.08)

Financial reporting

	Notes	2021	2020
For the year ended 31 December
In thousands of euro
Restated
Profit for the period		(1,105)	(12)
Other comprehensive income
Items that will not be reclassified to profit or loss		-	-
Items thay are or may be reclassified subsequently to profit or loss		-	-
Other comprehensive income for the period, net of tax		-	-
Total comprehensive income for the period		(1,105)	(12)
Total comprehensive income attributable to:
Owners of the Company		(1,104)	(12)

Equity

Share capital	Share premium	Legal Reserves	Other Reserves	Convertible loans	Retained earnings	Equity attributable to owners of the Company	Non-controlling interest	Total
In thousands of euro
Balance at 1 January 2020	228	11,152	3	(2,328)	-	(3,391)	5,664	950
Disposal of NCI	-	-	-	-	-	-	-	(950)
Allocation results	-	-	-	(3,391)	-	3,391	-	-
Profit for the period	-	-	-	-	-	(12)	(12)	-
Other movement	-	-	(3)	3	-	-	-	-
Balance at 1 December 2020	228	11,152	-	(5,716)	-	(12)	5,652	-
Balance at 1 January 2021	228	11,152	-	(5,716)	-	(12)	5,652	-
Allocation results	-	-	-	(12)	-	12	-	-
Profit for the period	-	-	-	-	-	(1,104)	(1,104)	(1)
Sale of treasury shares	-	-	-	1,000	-	-	1,000	-
Bond mandatory convertible into shares	-	-	-	-	441	-	441	-
Acquisition of non-controlling interest	-	-	-	-	-	-	-	(9)
Balance at 1 December 2021	228	11,152	-	(4,728)	441	(1,104)	5,989	(10)

Financial reporting

Cash flow from operating activities

	Notes	2021	2020
In thousands of euro
	Restated
Profit for the period		(1,105)	(711)
Adjustments for:
– Amortisation and depreciation	15	21	58
– Net finance costs / (income)	11	(133)	95
– Share of profit of equity-accounted investees, net of tax	17	46	-
– (Loss) / Gain on sale of property, plant and equipment	-	-
– (Loss) / Gain on sale of discontinued operation, net of tax	-	699
– Tax expense	-	154	(1,171)
		295
Changes in:
– Inventories	18	(164)	-
– Trade and other receivables	19	(472)	-
– Trade and other payables	22	852	409
Interest (paid) / received		(31)	(95)
Income taxes (paid) / received		-	-
Net cash from operating activities		(986)	609

Cash flow from investing activities

	Notes	2021	2020
In thousands of euro
	Restated
Disposal of discontinued operation, net of cash disposed of	-	(191)
Acquisition of subsidiary, net of cash acquired	25	13	-
Acquisition of equity-accounted investees	17	(188)	-
Acquisition of property, plant and equipment	15	-	(61)
Development expenditure	16	(4)	-
Net cash used in investing activities		(179)	(252)

Cash flow from financing activities

	Notes	2021	2020
In thousands of euro
	Restated
Proceeds from issue of convertible notes	22	55	-
Proceeds from loans and borrowings	22	-	900
Proceeds from sale of treasury shares	21	1,000	-
Repurchase of treasury shares	21	-	(1,005)
Repayment of borrowings	22	(40)	-
Payment of lease liabilities	22	(16)	(5)
Net cash from financing activities		999	(110)
Net decrease in cash and cash equivalents		(166)	247
Cash and cash equivalents at 1 January	20	251	4
Effect of movements in exchange rates on cash held
Cash and cash equivalents at 31 December	20	85	251

About DGB Carbon Markets Governance Financial reporting

1. Reporting Entity

DGB Group NV (the Group) is domiciled in the Netherlands. The Company’s registered office is at Westplein 12, 3016 BM Rotterdam, the Netherlands, under Trade Register number 32017953. These consolidated financial statements comprise the Company and its subsidiaries (together referred to as the ‘Group’). The Group is primarily involved in developing of high quality large-scale carbon and biodiversity projects accredited by third-parties. The Group is focused on nature conservation and helping biodiversity flourish by helping governments and corporations achieve net zero.

2. Basis of accounting

The consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with Title 9 of Book 2 of the Dutch Civil Code. The basis for preparation of the financial statements is historical cost, unless specified otherwise below. They were authorised for issue by the Company’s board of directors on 24 May 2022.

There are only six audit firms in the Netherlands that can issue an auditor’s report to listed companies. Given the relatively small size of DGB, it is difficult to find an audit firm that is willing to perform the statutory audit. The Group has therefore prepared its Annual Report without an external auditor. Details of the Group’s accounting policies, including changes thereto, are included in Note 6 and Note 7.

3. Going concern

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market confidence and to sustain future development of the business. In 2021 the world faced uncertainty caused by COVID-19 having an impact on every facet of life. The Group´s sector was no exception resulting in less focus on environmental matters. Nevertheless, DGB was able to increase the amount of offtake agreements, while limiting the impact on the Group’s core processes and supply chain due to continuous proactive collaboration with our strategic suppliers. This translated into a solid carbon credit project pipeline, increasing amount of offtake agreements and new investment capital raised while maintaining a solvency above 80%. The year 2021 has been pivotal with a strong focus on the development of the Groups project pipeline. The activities of the Company depend on the appetite of investors. Investments can be financed through either equity and/or borrowings. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security afforded by a sound capital position. In 2021, several private placement facilities were entered into as well as the raise of capital trough green impact bonds. For more information on the main conditions and the securities related to the credit facilities at year-end see the section of the financial report. The Board of Directors has evaluated a range of scenarios to stress-test the Group’s liquidity position through the end of 2022 and a substantial part of 2023.

The Board of Directors proved in 2021 that capital can be raised in either loans or shares and with the repayment of the loan to the Foundation, the Board of Directors feels comfortable finding the funding to finance the commitments made in Africa. The financial statements have therefore been prepared on a going concern basis. Based on the current knowledge and experience with respect to the business operations, financial results and financial position and on the global supply chain and world economy; DGB expects to meet the financial obligations for the next twelve months, while maintaining headroom under the existing cash position. The going concern is largely dependent on:
• meeting budgets and cash flow forecasts,
• the extent to which conditions can be met to secure additional financing for the project pipeline.

Notwithstanding the specified uncertainties as described above, The Board of Directors is of the opinion that the application of the going concern assumption for the 2021 financial statements is appropriate, based on the following facts and circumstances:
• The appetite in the market has been proven;
• Based on the current negotiations with regard to funding agreements with potential investors, the Group expects to be able to attract sufficient financing to meet its obligations and develop its project pipeline.

In a scenario where future performance and cash flow developments are less favourable than current business forecasts, the Board of Directors believes the Company has the option to attract other external financing to address such adverse circumstances. As this option is subject to external factors, it is uncertain if this can be implemented timely.

4. Functional and presentation currency

These consolidated financial statements are presented in euro, which is the Group’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated.

5. Use of judgements and estimates

In preparing these consolidated financial statements, management has made judgements and estimates that affect the application of the Group’s accounting policies and the reported amounts of assets, liabilities, income and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to estimates are recognised prospectively.

Information about judgements made in applying accounting policies that have the most significant effects on the amounts recognised in the financial statements is included in the following notes:
* Note 6: consolidation: whether the Group has to prepare financial statement or not; and
* Note 18: classification of forward purchase contracts with regard to carbon credits.

Assumptions and estimation uncertainties

Measurement of fair values

Information about assumptions and estimation uncertainties at the reporting date that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year is included in the following notes: A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both financial and non-financial assets and liabilities. The Group has an established control framework with respect to the measurement of fair values. The valuation framework is regularly reviewed on significant unobservable inputs and valuation adjustments. If third party information, such as broker quotes or pricing services, is used to measure fair values, then the valuation is assessed and evidence is obtained from the third parties to support the conclusion that these valuations meet the requirements of the Standards, including the level in the fair value hierarchy in which the valuations should be classified. Significant valuation issues are reported to the Group’s board.# About DGB

Carbon Markets

Governance

Financial reporting

7. Significant accounting policies

Business combinations

The Group accounts for business combinations using the acquisition method when the acquired set of activities and assets meets the definition of a business and control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The consideration transferred in the acquisition is generally measured at fair value, as are the identifiable net assets acquired. Any goodwill that arises is tested annually for impairment. Any gain on a bargain purchase is recognised in profit or loss immediately. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in profit or loss.

Furthermore the Company has a history of preparing consolidated financial statements in the situation that it has no subsidiaries. Not presenting consolidated financial statements is therefore not consistent with past practices. As per 31 December 2021 the company has subsidiaries and therefore the 2021 financial statements consist of consolidated and company only financial statements. As comparative information for 2020 with regard to the consolidated financial statements, recognition, measurement, presentation and disclosures are provided. The preparation of the consolidated comparative information with regard to 2020 did not had an impact on the Company only financial statements presented for 2020. The consolidated financial position as per 31 December 2020 for the consolidated and company only are equal and did not change compared to the information provided in the 2020 financial statements. The comparative information in the consolidated financial statements with regard to the financial performance and cash flows is different compared the financial only information provided in 2020. The reason is the presentation of the discontinued operations. Although the board of the Company considers the application of option 3 as an error, the error does not result in changes in the profit for the period and equity as a result of preparing consolidated information for the year 2020. . The information provided in the consolidated financial statements with regard to 2020 is therefore indicated with “restated” .

Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the definition of a financial instrument is classified as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in the fair value of the contingent consideration are recognised in profit or loss.

Subsidiaries

Subsidiaries are entities controlled by the Group. The Group ‘controls’ an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The financial statements of subsidiaries are included in the consolidated financial statements from the date on which control commences until the date on which control ceases.

Non-controlling interests

NCI are measured initially at their proportionate share of the acquirer’s identifiable net assets at the date of acquisition. Changes in the Group’s interest in a subsidiary that do not result in a loss of control are accounted for as equity transactions.

Interests in equity-accounted investees

The Group’s interests in equity-accounted investees comprise interests in associates and joint ventures. Associates are those entities in which the Group has significant influence, but not control or joint control, over the financial and operating policies. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Interests in associates and the joint venture are accounted for using the equity method. They are initially recognised at cost, which includes transaction costs. Subsequent to initial recognition, the consolidated financial statements include the Group’s share of the profit or loss and OCI of equity-accounted investees, until the date on which significant influence or joint control ceases.

Transactions eliminated on consolidation

Intra-group balances and transactions, and any unrealised income and expenses (except for foreign currency transaction gains or losses) arising from intra-group transactions, are eliminated. Unrealised gains arising from transactions with equity-accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised losses are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment.

Foreign currency transactions

Transactions in foreign currencies are translated into the respective functional currencies of Group companies at the exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies are translated into the functional currency at the exchange rate at the reporting date.

6. Changes in application accounting policies / fundamental error

Note 13 share-based payment arrangements; Note 24: financial instruments; and Note 25: acquisition of subsidiary

On 4 September 2020 the Group sold its (renewable) energy, software activities, leasing subsidiaries and real estate activities to solely specialise in nature-based solutions and the origination of carbon credits (hereafter: asset / liability transaction). This transaction was announced on 30 June 2020. As a result the consolidated interim financial statements as per 30 June 2020 were presented taking into account the requirements of IFRS 5 Non-current assets held for sale and discontinued operations. The impact of the transaction was visible in these interim financial statements. As a result of the asset / liability transaction the Company had no subsidiaries as per 31 December 2020. According to the definition of consolidated financial statements under IFRS, no consolidated financial statements are required to be prepared due to fact that the Company has no subsidiaries. The Company therefore decided to present Company only financial statements as per 31 December 2020 because in their opinion this reflects better the true and fair view. The 2020 Company only financial statements of DGB Group N.V. have been prepared in accordance with the provisions of Part 9 of Book 2 of the Dutch Civil Code. In preparing these financial statements, the company availed itself of the facility (known as “option 3”) offered by Section 362(8), Book 2 of the Dutch Civil Code to use the same accounting policies (including those for the presentation of financial instruments as equity or loan capital) for the company and the consolidated financial statements. Inherent to the application of “option 3” is that consolidated financial statements are provided. As the company has not prepared consolidated financial statements for 2020, the application of “option 3” was therefore not possible.

The Group has consistently applied the following accounting policies to all periods presented in these consolidated financial statements, except if mentioned otherwise (see also Note 6). Certain comparative amounts in the statement of financial position and the statement of profit or loss have been restated, reclassified or re-presented, as a result of a correction of a prior-period error (see Note 6).

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

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

If the inputs used to measure the fair value of an asset or a liability fall into different levels of the fair value hierarchy, then the fair value measurement is categorised in its entirety in the same level of the fair value hierarchy as the lowest level input that is significant to the entire measurement. The Group recognises transfers between levels of the fair value hierarchy at the end of the reporting period during which the change has occurred. Further information about the assumptions made in measuring fair values is included in the following notes:

• Note 14: recognition of deferred tax assets: availability of future taxable profit against which deductible temporary differences and tax losses carried forward can be utilised;
• Note 16: impairment test of intangible assets and goodwill: key assumptions underlying recoverable amounts, including the recoverability of development costs;
• Notes 25: acquisition of subsidiary: fair value of the consideration transferred (including contingent consideration) and fair value of the assets acquired and liabilities assumed, measured on a provisional basis.# Non-monetary assets and liabilities that are measured at fair value in a foreign currency are translated into the functional currency at the exchange rate when the fair value is determined. Non-monetary items that are measured based on historical cost in a foreign currency are translated at the exchange rate at the date of the transaction. Foreign currency differences are generally recognised in profit or loss and presented within finance costs.

110 About DGB Carbon Markets Governance Financial reporting

Discontinued operation

A discontinued operation is a component of the Group’s business, the operations and cash flows of which can be clearly distinguished from the rest of the Group and which:

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

Classification as a discontinued operation occurs at the earliest of disposal or when the operation meets the criteria to be classified as held-for-sale. When an operation is classified as a discontinued operation, the comparative statement of profit or loss and OCI is re-presented as if the operation had been discontinued from the start of the comparative year.

Revenue

Revenue is measured based on the consideration specified in a contract with a customer. The Group recognises revenue when it transfers control over a good or service to a customer. Below information is provided about the nature and timing of the satisfaction of performance obligations in contracts with customers, including significant payment terms, and the related revenue recognition policies.

Revenue from sales of sustainable solutions and other products is recognised at the transaction price to which the Group expects to be entitled, after deducting sales taxes, excise duties and similar levies. For contracts that contain separate performance obligations, the transaction price is allocated to those separate performance obligations by reference to their relative stand-alone selling prices. Revenue is recognised when control of the products has been transferred to the customer. This is either at the point of delivery or the point of receipt, depending on contractual conditions. Invoicing to customers does not necessarily have the same timing as the satisfaction of the performance obligations. In the case payments made by the customer exceeds the revenue to be recognised, the balance is recorded as contract liability. In the case payments made by the customer are below the revenue to be recognised, the balance is recorded as contract asset.

The Group recognises revenue from Software over time, given that the performance obligation is met during the term of the contract, subject to the condition that it is reasonably possible to make a sufficiently reliable estimate of the progress of the activities. The activities should also result in an asset that is controlled by the client during the activities, and/or the activities should result in an asset for which there is no alternative use. In addition, the Group has an enforceable right to remuneration for the services already provided. In the case of fixed-rate projects, The Group recognises revenue on the basis of the ratio of the costs already incurred to the total amount of costs it expects to incur.

The Group recognises revenue from the sale of hardware and/or software at a point in time, given that the performance obligation has been met at the moment the hardware and/or software is delivered.

111 About DGB Carbon Markets Governance Financial reporting

Employee benefits

Short-term employee benefits

Short-term employee benefits are expensed as the related service is provided. A liability is recognised for the amount expected to be paid if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee and the obligation can be estimated reliably

Long-term employee benefits

The Group’s net obligation in respect of long-term employee benefits is the amount of future benefit that employees have earned in return for their service in the current and prior periods. That benefit is discounted to determine its present value. Remeasurements are recognised in profit or loss in the period in which they arise.

Share-based payment arrangements

The grant-date fair value of equity-settled share-based payment arrangements granted to employees is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. The amount recognised as an expense is adjusted to reflect the number of awards for which the related service and non-market performance conditions are expected to be met, such that the amount ultimately recognised is based on the number of awards that meet the related service and non-market performance conditions at the vesting date. For share-based payment awards with non-vesting conditions, the grant-date fair value of the share-based payment is measured to reflect such conditions and there is no true-up for differences between expected and actual outcomes.

Defined contribution plans

Obligations for contributions to defined contribution plans are expensed as the related service is provided. Prepaid contri- butions are recognised as an asset to the extent that a cash refund or a reduction in future payments is available.

Finance income and finance costs

Interest income or expense is recognised using the effective interest method. The ‘effective interest rate’ is the rate that exactly discounts estimated future cash payments or receipts through the expect- ed life of the financial instrument to:

• the gross carrying amount of the financial asset; or
• the amortised cost of the financial liabili- ty.

In calculating interest income and ex- pense, the effective interest rate is applied to the gross carrying amount of the asset (when the asset is not credit-impaired) or to the amortised cost of the liability. How- ever, for financial assets that have become credit-impaired subsequent to initial rec- ognition, interest income is calculated by applying the effective interest rate to the amortised cost of the financial asset.

If the asset is no longer credit-impaired, then the calculation of interest income reverts to the gross basis.

The Group’s finance income and finance costs include:

• interest income;
• interest expense;
• the foreign currency gain or loss on financial assets and financial liabilities;
• the gain on the remeasurement to fair value of any pre-existing interest in an acquiree in a business combination;

112 About DGB Carbon Markets Governance Financial reporting

Income tax

Income tax expense comprises current and deferred tax. It is recognised in profit or loss except to the extent that it relates to a business combination, or items rec- ognised directly in equity or in OCI. The Group has determined that interest and penalties related to income taxes, including uncertain tax treatments, do not meet the definition of income taxes, and therefore accounted for them under IAS 37 Provisions, Contingent Liabilities and Contingent Assets.

Current tax

Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any ad- justment to the tax payable or receivable in respect of previous years. The amount of current tax payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects uncer- tainty related to income taxes, if any. It is measured using tax rates enacted or sub- stantively enacted at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and liabilities are offset only if certain criteria are met.

Deferred 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. De- ferred tax is not recognised for:

• temporary differences on the initial recog- nition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting nor taxable profit or loss;
• temporary differences related to invest- ments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of the rever- sal of the temporary differences and it is probable that they will not reverse in the foreseeable future; and
• taxable temporary differences arising on the initial recognition of goodwill.

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 de- termined 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 tempo- rary differences, are considered, based on the business plans for individual subsid- iaries 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.

The measurement of deferred tax reflects the tax consequences that would fol- low from the manner in which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets and liabilities. Deferred tax assets and liabilities are offset only if certain criteria are met.

113 About DGB Carbon Markets Governance Financial reporting

Inventories

Inventories are measured at the lower of cost and net realisable value. The cost of inventories is based on the irst-in, irst-out allocation method.# Financial reporting

Property, Plant and Equipment

Items of property, plant and equipment are measured at cost, which includes capitalised borrowing costs, less accumulated depreciation and any accumulated impairment losses. If significant parts of an item of property, plant and equipment have different useful lives, then they are accounted for as separate items (major components) of property, plant and equipment. Any gain or loss on disposal of an item of property, plant and equipment is recognised in profit or loss. Subsequent expenditure is capitalised only if it is probable that the future economic benefits associated with the expenditure will flow to the Group.

Depreciation

Depreciation is calculated to write off the cost of items of property, plant and equipment less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss. The estimated useful lives of property, plant and equipment for current and comparative periods are as follows:

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

Intangible Assets and Goodwill

Goodwill

Goodwill arising on the acquisition of subsidiaries is measured at cost less accumulated impairment losses.

Research and Development

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

Inventories

Prepayments made on inventory are included in inventories as far as the Group has the economic risk over the inventory.

Other Intangible Assets

Other intangible assets, including customer relationships, that are acquired by the Group and have finite useful lives are measured at cost less accumulated amortisation and any accumulated impairment losses. Subsequent expenditure is capitalised only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognised in profit or loss as incurred.

Amortisation

Amortisation is calculated to write off the cost of intangible assets less their estimated residual values using the straight-line method over their estimated useful lives, and is generally recognised in profit or loss. Goodwill is not amortised. The estimated useful lives for current and comparative periods are as follows:

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

Impairment

At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories, contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment. For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of the combination. The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs of disposal. Value in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate that reflects current market assessments of the time value of money and the risks specific to the asset or CGU. An impairment loss is recognised if the carrying amount of an asset or CGU exceeds its recoverable amount. Impairment losses are recognised in profit or loss. They are allocated first to reduce the carrying amount of any goodwill allocated to the CGU, and then to reduce the carrying amounts of the other assets in the CGU on a pro rata basis. An impairment loss in respect of goodwill is not reversed. For other assets, an impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised.

Property Plant and Equipment	Intangible assets and goodwill
buildings: 10 years	development costs: 5-8 years
right to use assets: 5 years	customer relationships: 7 years
Other: 3-5 years.

Non-financial assets

Non-current assets, or disposal groups comprising assets and liabilities, are classified as held-for-sale if it is highly probable that they will be recovered primarily through sale rather than through continuing use.

Assets held for sale

Such assets, or disposal groups, are generally measured at the lower of their carrying amount and fair value less costs to sell. Any impairment loss on a disposal group is allocated first to goodwill, and then to the remaining assets and liabilities on a pro rata basis, except that no loss is allocated to inventories, financial assets, deferred tax assets, which continue to be measured in accordance with the Group’s other accounting policies. Impairment losses on initial classification as held-for-sale or held-for-distribution and subsequent gains and losses on remeasurement are recognised in profit or loss. Once classified as held-for-sale, intangible assets and property, plant and equipment are no longer amortised or depreciated, and any equity-accounted investee is no longer equity accounted.

Financial instruments

Recognition and initial measurement

Trade receivables and debt securities issued are initially recognised when they are originated. All other financial assets and financial liabilities are initially recognised when the Group becomes a party to the contractual provisions of the instrument. A financial asset (unless it is a trade receivable without a significant financing component) or financial liability is initially measured at fair value plus or minus transaction costs that are directly attributable to its acquisition or issue. A trade receivable without a significant financing component is initially measured at the transaction price.

Classification and subsequent measurement – Financial assets

On initial recognition, a financial asset is classified as measured at: amortised cost; FVOCI – debt investment; FVOCI – equity investment; or FVTPL. Financial assets are not reclassified subsequent to their initial recognition unless the Group changes its business model for managing financial assets, in which case all affected financial assets are reclassified on the first day of the first reporting period following the change in the business model.

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

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

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

All financial assets not classified as measured at amortised cost or FVOCI as described above are measured at FVTPL. This includes all derivative financials.

On initial recognition, the Group may irrevocably designate a financial asset that otherwise meets the requirements to be measured at amortised cost or at FVOCI as at FVTPL if doing so eliminates or significantly reduces an accounting mismatch that would otherwise arise. Currently the group only holds financial assets at amortised cost.

Financial assets at amortised cost are subsequently measured at amortised cost using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign exchange gains and losses and impairment are recognised in profit or loss. Any gain or loss on derecognition is recognised in profit or loss.

Impairment

The Group recognises loss allowances for ECLs on:

The Group measures loss allowances at an amount equal to lifetime ECLs. Loss allowances for trade receivables (including lease receivables) and contract assets are always measured at an amount equal to lifetime ECLs.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition and when estimating ECLs, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quantitative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment, that includes forward-looking information. The Group assumes that the credit risk on a financial asset has increased significantly if it is more than 30 days past due.

The Group considers a financial asset to be in default when:

Lifetime ECLs are the ECLs that result from all possible default events over the expected life of a financial instrument. The maximum period considered when estimating ECLs is the maximum contractual period over which the Group is exposed to credit risk.# About DGB Carbon Markets

Governance

Financial reporting

ECLs are a probability-weighted estimate of credit losses. Credit losses are measured as the present value of all cash shortfalls (i.e. the difference between the cash flows due to the entity in accordance with the contract and the cash flows that the Group expects to receive). ECLs are discounted at the effective interest rate of the financial asset. At each reporting date, the Group assesses whether financial assets carried at amortised cost are credit-impaired. A financial asset is ‘credit-impaired’ when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred. Evidence that a financial asset is credit-impaired includes the following:

Loss allowances for financial assets measured at amortised cost are deducted from the gross carrying amount of the assets. The gross carrying amount of a financial asset is written off when the Group has no the debtor is unlikely to pay its credit obligations to the Group in full, without recourse by the Group to actions such as realising security (if any is held); or the financial asset is more than 90 days past due.

• Financial assets measured at amortised cost;
• Contract assets.
• Significant financial difficulty of the debtor;
• A breach of contract such as a default or being more than 90 days past due;
• The restructuring of a loan or advance by the Group on terms that the Group would not consider otherwise;
• It is probable that the debtor will enter bankruptcy or other financial reorganisation; or
• The disappearance of an active market for security because of financial difficulties.

Financial asset in its entirety or a portion thereof. However, financial assets that are written off could still be subject to enforcement activities in order to comply with the Group’s procedures for recovery of amounts due.

Classication and subsequent measure- ment – Financial liabilities

Financial liabilities are classified as measured at amortised cost or FVTPL. A financial liability is classified as at FVTPL if it is classified as held-for-trading, it is a derivative or it is designated as such on initial recognition. Currently the group only holds financial liabilities at amortised cost.

Financial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss.

Derecognition

The Group derecognises a financial asset when:

• The contractual rights to the cash flows from the financial asset expire; or
• It transfers the rights to receive the cash flows in a transaction in which either:
  • Substantially all of the risks and rewards of ownership of the financial asset are transferred; or
  • The Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control of the financial asset.

The Group enters into transactions whereby it transfers assets recognised in its statement of financial position, but retains either all or substantially all of the risks and rewards of the transferred assets. In these cases, the transferred assets are not derecognised.

The Group derecognises a financial liability when its contractual obligations are discharged or cancelled, or expire. The Group also derecognises a financial liability when its terms are modified and the cash flows of the modified liability are substantially different, in which case a new financial liability based on the modified terms is recognised at fair value.

On derecognition of a financial liability, the difference between the carrying amount extinguished and the consideration paid (including any non-cash assets transferred or liabilities assumed) is recognised in profit or loss.

Ordinary shares

Incremental costs directly attributable to the sale of ordinary shares are recognised as a deduction from equity. Income tax relating to transaction costs of an equity transaction is accounted for in accordance with IAS 12.

Repurchase and sale of ordinary shares (treasury shares)

When shares recognised as equity are repurchased, the amount of the consideration paid, which includes directly attributable costs, is recognised as a deduction from equity. Repurchased shares are classified as treasury shares and are presented in other reserves. When treasury shares are sold subsequently, the amount received is recognised as an increase in equity and the resulting surplus or deficit on the transaction is presented within other reserves.

Share capital

Compound nancial instruments issued by the Group comprise convertible notes denominated in euro that are mandatory converted to ordinary shares at maturity. The liability component of compound nancial instruments is initially recognised at the fair value of a similar liability that does not have an equity conversion option. The equity component is initially recognised as the difference between the fair value of the compound nancial instrument as a whole and the fair value of the liability component. Any directly attributable transaction costs are allocated to the liability and equity components in proportion to their initial carrying amounts. Subsequent to initial recognition, the liability component of a compound nancial instrument is measured at amortised cost using the ffective interest method. The equity component of a compound nancial instrument is not remeasured. Interest related to the nancial liability is recognised in prot or loss.

Leases

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

At commencement or on modication of a contract that contains a lease component, the Group allocates the consideration in the contract to each lease component on the basis of its relative stand-alone prices. However, for the leases of property the Group has elected not to separate non-lease components and account for the lease and non-lease components as a single lease component.

The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. The lease liability is measured at amortised cost using the ffective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assessment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance xed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in prot or loss if the carrying amount of the right-of-use asset has been reduced to zero.

The Group has elected not to recognise the right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term.

Fair value

‘Fair value’ is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date in the principal or, in its absence, the most advantageous market to which the Group has access at that date. The fair value of a liability reects its non-performance risk.

A number of the Group’s accounting policies and disclosures require the measurement of fair values, for both nancial and non-nancial assets and liabilities. When one is available, the Group measures the fair value of an instrument using the quoted price in an active market for that instrument. A market is regarded as ‘active’ if transactions for the asset or liability take place with sucient frequency and volume to provide pricing information on an ongoing basis. If there is no quoted price in an active market, then the Group uses valuation techniques that maximise the use of relevant observable inputs and minimise the use of unobservable inputs.The chosen valuation technique incorporates all of the factors that market participants would take into account in pricing a transaction.

Application of new standards

In the year under review, where applicable, the Group applied new and amended IFRS standards and IFRIC interpretations relevant to the Group. The new standards and amendments to existing standards in 2021 have no material impact on the Group’s capital and results, nor on the notes to the financial statements.

Published standards which have not yet come into effect

At year-end 2021, various new and amended standards and interpretations had been published but were not yet in effect at the time of publication of these financial statements. The Group will apply these new and amended standards and interpretations, insofar as applicable, as soon as they come into effect. Any published, new and amended IFRS standards and interpretations that are not yet applicable to reporting periods commencing on 1 January 2021 have not been applied early. We do not expect new standards that become applicable after 2021 to have a material impact on the Group’s capital and results, nor on the notes to the financial statements.

Fair value measurement

Standards issued but not yet effective

120 About DGB Carbon Markets Governance Financial reporting

The Group’s composition has been changed as a result of the disposal of the energy and software activities during 2020. The presentation of discontinued operations is governed by IFRS 5. The requirements of other standards do not apply to discontinued operations, unless they specify disclosures applicable to them. Since IFRS 8 does not refer to discontinued operations, the Group is not required to include them in their segment disclosures.

As from 4th quarter 2021 the Group has started to set up its new reporting segments structure. To monitor the operating segments the board of the Group is reviewing the available financial information on a regular basis. As the activities of the operating segments are individually insignificant compared to the holding company no operating segments are reported (less than 3% of combined assets, liabilities and operational result). The operating segments are:

• Project Management
• Habitat banking
• Greentech Solutions

For a description of the core activities of these operating segments we refer to the financial report.

8. Operating segments

121 About DGB Carbon Markets Governance Financial reporting

In September 2020, the Group sold its (renewable) energy, software activities, leasing subsidiaries and real estate to solely specialise in nature-based solutions and the origination of carbon credits. M. Logtenberg stepped down as chairman of the board and sold his 64,64% stake in the company to Stichting Prosper And Nature (hereafter: PAN Foundation, formerly known as Stichting Dutch Green Foundation). Management committed to a plan to sell by the end of June 2020, following a strategic decision to place greater focus on the Group’s key competencies by making an impact through sustainable activities. Management committed to a plan to sell by the end of June 2020, following a strategic decision to place greater focus on the Group’s key competencies by making an impact through sustainable activities.

The impact of the discontinued on the consolidated statement of profit and loss was as follows:

9. Discontinued operation and disposal group

Results of discontinued operation

In thousands of euro
Revenue	25,634
Elimination of inter-segment revenue	(4,082)
External revenue	21,552
COGS	15,900
Elimination of inter-segment COGS	(99)
External COGS	15,801
Expenses	8,843
Elimination of expenses related to inter-segment sales	(3,983)
External expenses	4,860
Results from operating activities	891
Income tax	(192)
Results from operating activities, net of tax	699
Gain on sale of discontinued operation	-
Income tax on gain on sale of discontinued operation	-
Profit (loss) from discontinued operations, net of tax	699
Basic earnings (loss) per share (euro)	0,08

122 About DGB Carbon Markets Governance Financial reporting

At 4 September 2020 the following assets and liabilities have been sold:

In thousands of euro	Discontinued operations	Disposal Group of the Company	Total
Assets
Property, plant and equipment	1,215	2,045	3,260
Intangible assets and goodwill	7,346	6,133	13,479
Other investments	8	-	8
Deferred tax assets	121	-	121
Non-current assets	8,690	8,178	16,868
Inventories	309	-	309
Contract assets	11,408	-	11,408
Current tax assets	18	-	18
Trade and other receivables	1,473	-	1,473
Cash and cash equivalents	191	3	194
Current assets	13,399	3	13,402
Total assets	22,089	8,181	30,270

123 About DGB Carbon Markets Governance Financial reporting

In thousands of euro	Discontinued operations	Disposal Group of the Company	Total
Liabilities
Loans and borrowings	196	5,100	5,296
Deferred tax liabilities	1,038	90	1,128
Non-current liabilities	1,234	5,190	6,424
Current tax liabilities	227	150	377
Loans and borrowings	3,000	-	3,000
Trade and other payables	13,418	353	13,771
Current liabilities	16,645	503	17,148
Total liabilities	17,879	5,693	23,572
Net asset value	4,210	2,488	6,698

There are no cumulative income or expenses included in OCI relating to the disposal group.

Cumulative income or expenses included in OCI

124 About DGB Carbon Markets Governance Financial reporting

Fair value hierarchy

The non-recurring fair value measurement for the discontinued operations and disposal group has been categorised as a Level 3 fair value based on the inputs to the valuation technique used. The value has been based on the fairness opinion issued together with the transaction details of asset / liability transaction. The impairment loss which resulted from the asset / liability transaction has been recognised in 2019 and amounted to EUR 2,900K.

Set out below is a list of material subsidiaries of the Group. The following companies have been consolidated until 4 September 2020. All the companies were fully owned unless indicated otherwise:

• DGB Lease B.V., Hardenberg 100%
• Energy B.V., Hardenberg 100%
• DGB Energie B.V., Hardenberg 100%
• De Groene Belangenbehartiger B.V., Hardenberg 100%
• DGBase B.V., Hardenberg 100%
• Argus B.V., Hardenberg 100%
• Producert B.V., Hardenberg 100%
• Renewables B.V., Hardenberg 100%
• Agri Solar B.V., Hardenberg 100%
• Energie Service Nederland B.V., Hardenberg 100%
• VIVA Veterinary B.V., Houten 100%
• CV België BVBA, Kruibeke, België 100%
• DeGroSolutions B.V., Hardenberg 51%

The following companies have been consolidated from the fourth quarter 2021. All the companies were fully owned unless indicated otherwise:

• DutchGreen Project Management B.V., Rotterdam 100%
• GreenTech Solutions BV, Rotterdam 100%
• Habitat BioBank B.V., Rotterdam 100%
• Statix Corporation B.V., Amsterdam-Duivendrecht 75%

Furthermore the Group acquired per 1 May 2021 50% of the shares of Green Fuel Investment B.V., Rotterdam. This company is an equity-accounted investee.

Measurement of fair values

125 About DGB Carbon Markets Governance Financial reporting

The Group generates revenue primarily from the sale of sustainable and software solutions to customers. In 2020 revenue of sustainable solutions consisted of energy sales. In 2021 the revenue from sustainable solutions consisted of revenue from the sales of carbon credits. The software activities in 2021 were in a research and development phase and did not result in revenue in 2021. Revenue above contains the consolidated revenue. As a result the continuing revenue for 2020 is zero because the revenue made by DGB Group NV relates to rental charges and management fees which are charged to subsidiaries. Revenue from sustainable solutions relates to revenue from renewable energy, advisory and implementation of sustainable solutions and supply of carbon credits. Revenue from software relates to licence fee and support with regard to software used in agriculture such as veterinary and forestry. Revenue for both years is realised within the EU.

10. Revenue

Notes	Continuing operations	Discontinuing operations	Total
In thousands of euro	2021	2020 Restated	2021
Sustainable solutions	-	-	N/A
Software	-	-	N/A
Total revenue	-	-	N/A

126 About DGB Carbon Markets Governance Financial reporting

The interest income relates mainly to the interest income on the loan note due by major shareholder the PAN Foundation. In 2021 interest cost from related parties relates to the interest cost allocated to the amounts payable in connection with the acquisition of GFI. The interest cost in 2020 to related parties relates to the loan notes with Majka Investment B.V., Ama Invest B.V. and Madre Invest B.V. The loan notes have been redeemed in the asset / liability transaction. The interest cost in connection with the convertible loan notes consist of the effective interest rate on the liability component of these convertible loan notes. Other interest costs mainly relate to interest on leases and bank charges.

11. Net finance result

Notes	2021	2020 Restated
In thousands of euro
Interest income under the effective interest method on:
– Interest income from participants	172	64
Total interest income arising from financial assets	172	64
Financial liabilities under the effective interest method on:
– Interest cost from related parties	(12)	(127)
– Interest cost from convertible notes	(21)	-
– Other interest and cost	(6)	(32)
Total interest cost arising from financial liabilities	(39)	(159)
Net finance result recognised in profit or loss	133	(95)

127 About DGB Carbon Markets Governance Financial reporting

The dilutive earnings per share has not been provided because of the loss in 2021, the effect would be anti-dilutive. In 2020 there no dilutive shares were applicable.

12.# Earnings per share

Diluted earnings per share

Notes	2021	2020
In thousands of euro	Continuing	Restated Discontinuing
Prot (loss) for the year, attributable to the owners of the Company:	(1,104,000)	(711,000)
Weighted-average number of shares
Basic - Issued ordinary shares at 1 January 21	11,400,349	11,400,349
Eect of treasury shares held 21	(2,249,999)	(2,249,999)
Eect of treasury shares sold 21	288,950	-
Weighted-average number of ordinary shares at 31 December	9,439,300	9,150,350
Earnings per share	(0,12)	(0,08)

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Financial reporting

On 15 September 2021, the Group established share option programmes that entitle qualifying employees and Eligible Individuals to purchase shares in the Company. Under these programmes, holders of vested options are entitled to purchase shares at the market price of the shares at grant date. The key terms and conditions related to the grants under these programmes are as follows; all options are to be settled by the physical delivery of shares.

13. Share-based payment arrangements

Share option programmes (equity-settled)

Date of issuance	15/9/2021	31/12/2021	Total
Number of options granted to:
CEO	-	240.000	240,000
Qualifying employees and Eligible Individuals	218,770	3,612	222,382
Total	281,770	243,612	462,382

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The vesting period for the granted share options is 2 year after the grant date. After vesting the share options must be exercised within 3 years. For all the options issued the exercise price amounts to EUR 1,50. The fair value of the share options has been measured using the Black-Scholes formula. The outcome of the valuation process was that the options had a value of zero at grant date, hence no impact on the equity nor the performance of the company has been recorded. The volatility used in the calculation amounted to 15%. Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period since the asset / liability transaction in September 2020. The expected term of the instruments has been based on historical experience and general option holder behaviour. The number of shares in respect of which options may be granted under the DGB Share Option Scheme on any grant date when added to (a) the number of shares comprised in outstanding options granted pursuant to the DGB Share Option Scheme and (b) the number of shares which have been issued on the exercise of options that have been granted pursuant to the DGB Share Option Scheme, shall not exceed 25% of the number of ordinary shares in issue immediately prior to such grant date. A copy of the DGB Share Option Scheme can be downloaded from the Company’s website (www.dgb.earth).

Share option Program Mr. Farage

Mr. Farage was appointed to DGB’s Advisory Board in March 2021 and has been granted 1 million options on ordinary shares in DGB. This grant was approved by the shareholder meeting on 15 September 2021. The share options have a strike price of €1.50 and are only exercisable once the DGB share price reaches €20. The share options have no expiration date. The fair value of the share options has been measured using the Black-Scholes formula. The outcome of the valuation process was that the options had a value of zero at grant date, hence no impact on the equity nor the performance of the company has been recorded. The volatility used in the calculation amounted to 15%. Expected volatility has been based on an evaluation of the historical volatility of the Company’s share price, particularly over the historical period since the asset / liability transaction in September 2020. The expected term of the instruments has been based on historical experience and general option holder behaviour.

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Amounts recognised in prot or loss

Tax expense on continuing operations’ excludes the Group’s share of the tax expense of equity- accounted investees. For 2021 on the result of the equity-accounted investee no tax has been recognised (2020: not applicable), which has been included in ‘share of prot of equity-accounted investees, net of tax’. The amount also excludes the tax income from the discontinued operation of €192 thousand in 2020. The gain on sale of the discontinued operation is tax exempt under Dutch tax law. The result on the Disposal Group of the Company in 2020 did not result in a taxable prot. The taxable loss is not recognised as deferred tax asset, see below.

14. Income taxes

	2021	2020
In thousands of euros	Restated	Restated
Current tax expense
Current year	-	(150)
Changes in estimates related to prior years	-	(4)
Deferred tax expense
Origination and reversal of temporary dierences	-	-
Reduction in tax rate	-	-
Recognition of previously unrecognised tax losses	-	-
Recognition of previously unrecognised (derecogni- tion of previously recognised) deductible temporary dierences	-	-
Tax expense on continuing operations	-	(154)

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Reconciliation of eective tax rate

	2021		2020
In thousands of euro	Restated	Restated
Prot before tax from continuing operations	(1,105)		(557)
Tax using the Company’s domestic tax rate	276	25%	139	25%
Reduction in tax rate	(111)	(10%)	(47)	(8.5%)
Tax eect of:
– Tax on taxable prot of results which are eliminated in the con- solidated nancial statements	(245)	(44.0%)	-	-
– Current-year losses for which no deferred tax asset is recognised	(166)	(15.0%)	-	-
Other	1	0.0%	(1)	(0.1%)
	-	-	(154)	(27.6%)

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Movement in Deferred tax liabilities

	1-1-2020	Recognised in prot or loss	Derecognised as result of discontinued operations	Derecognised as result of disposal group	31-12-2020	Movements 2021	31-12-2021
In thousands of euro
Land and buildings	91	(1)	-	(90)	-	-	-
Development cost	576	(63)	(513)	-	-	-	-
Customer relationships	586	(82)	(504)	-	-	-	-
Other non-current assets	25	(4)	(21)	-	-	-	-
Total	1,278	(150)	(1,038)	(90)	-	-	-

All deferred tax liabilities have been derecognised because of the asset/liability transaction in 2020.

Deferred tax assets

The Group capitalised a deferred tax asset as per 31 December 2019 amounting to EUR 121K. This deferred tax asset has been disposed of as a result of the asset / liability transaction. As per 31 December 2021 the Group had signicant carried forward losses. The Deferred tax assets have not been recognised because it is not probable that future taxable prot will be available against which the Group can use the benets therefrom in the foreseeable future.

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Financial reporting

15. Property, plant and equipment

	Buildings	Right to use assets	Other assets	Total
In thousands of euro
Cost
Balance at 1 January 2020	1,950	45	1,740	3,735
Additions	61	-	501	562
Disposals	-	-	-	-
Reclassication to assets held for Sale	(1,950)	(45)	(2,159)	(4,154)
Balance at 31 December 2020	61	-	82	143
Acquisitions through business combinations	-	-	1	1
Additions	-	-	49	49
Balance at 31 December 2021	61	-	132	193

Additions in 2021 consist of a company car.

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Financial reporting

	Buildings	Right to use assets	Other assets	Total
In thousands of euro
Accumulated depreciation and impairment losses
Balance at 1 January 2020	194	15	527	736
Depreciation	36	7	120	163
Disposals	-	-	-	-
Reclassication to assets held for sale	(229)	(22)	(643)	(894)
Balance at 31 December 2020	1	-	4	5
Acquisitions through business combinations	-	-	-	-
Additions	6	-	15	21
Balance at 31 December 2021	7	1	19	26

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	Buildings	Right to use assets	Other assets	Total
In thousands of euro
Carrying amounts
at 1 January 2020	1,756	30	1,213	2,999
at 31 December 2020	60	-	78	138
at 31 December 2021	54	-	113	167

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16. Intangible assets

In November the Company acquired Statix. As a result of the purchase price allocation an amount of EUR 36K has been recognised as goodwill. With the acquisition of Statix an amount of EUR 30K relating to development cost has been acquired. Since acquisition another EUR 4K has been capitalised.

	Goodwill	Internal developed software	Customer relationships	Total
In thousands of euro
Cost
Balance at 1 January 2020	9,033	6,606	3,750	19,389
Additions	-	814	-	814
Disposals	-	-	-	-
Reclassication to assets held for sale	(9,033)	(7,420)	(3,750)	(20,203)
Balance at 31 December 2020	-	-	-	-
Acquisitions through business combinations	36	30	-	-
Additions	4	-	-	-
Balance at 31 December 2021	36	34	-	70

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	Goodwill	Internal developed software	Customer relationships	Total
In thousands of euro
Accumulated depreciation and impairment
Balance at 1 January 2020	2,900	1,898	1,150	5,948
Amortisation	-	451	325	776
Disposals	-	-	-	-
Impairments	-	-	-	-
Reclassication to assets held for Sale	(2,900)	(2,349)	(1,475)	(6,724)
Balance at 31 December 2020	-	-	-	-
Acquisitions through business combinations	-	-	-	-
Additions	-	-	-	-
Balance at 31 December 2021	-	-	-	-

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Financial reporting

The development cost relates to the development of satellite imagery and drone technology. As this is not in use yet, there is no amortisation on these development costs.

	Goodwill	Internal developed software	Customer relationships	Total
In thousands of euro
Carrying amounts
at 1 January 2020	6,133	4,708	2,600	13,441
at 31 December 2020	-	-	-	-
at 31 December 2021	36	34	-	70

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17. Equity-accounted investees

In May 2021, 50% of the shares in Green Fuel Investments B.V. (GFI) have been acquired.The consideration paid amounts to EUR 480K being the net present value of 8 payments of EUR 62.5K over a period of 2 years. As per balance sheet date, 5 payments are outstanding. The net present value of the amount due is included in the liabilities.

Note 2021 2020 In thousands of euro

Interests in associates	432
Balance at 31 December	432

About DGB Carbon Markets Governance Financial reporting

The following table summarises the nancial information of GFI as included in its own nancial statements, adjusted for fair value adjustments at acquisition and dierences in accounting policies. The table also reconciles the summarised nancial information to the carrying amount. The information for 2021 includes the results of GFI only for the period from 1 January to 31 December 2021, because the results before acquisition date were immaterial.

	2021	2020
In thousands of euro
Percentage ownership interest	50%	-
Non-current assets	31	-
Current assets	98	-
Non-current liabilities	(21)	-
Current liabilities	(9)	-
Net Assets (100%)	99	-
Group’s share of net assets	50	50
Elimination of intercompany positions	-	-
Goodwill	382	-
Carrying amount of interest in associate	432	-

About DGB Carbon Markets Governance Financial reporting

	2021	2020
In thousands of euro
Revenue	44	-
Prot from operations (100%)	(92)	-
Other comprehensive income (100%)	-	-
Total comprehensive income (100%)	(92)	-
Total comprehensive income (50%)	(46)	-
Elimination of intercompany transactions	-	-
Group’s share of total comprehensive income	(46)	-

18. Inventories

During the reporting period the Company secured for its balance sheet by entering into non-nancial forward purchase contracts with regard to voluntary carbon osets to secure these for its balance sheet. The total numbers of voluntary carbon osets under these forward contracts are estimated at 157,000 ton with a total estimated purchase value of EUR 868K. On these contracts prepayments have been made amounting to EUR 164K. The forward contracts have not been considered as derivatives as the voluntary carbon osets will be used by the Company for its own use based on expected activities. Furthermore these contracts do not include a clause with the possibility to be settled on a net basis, hence the contracts do not meet the denition of a derivative nancial instrument for accounting purposes. Upon the registration of the voluntary carbon osets on the account of the Company, the voluntary carbon osets will be recognized as inventory.

Note 2021 2020 In thousands of euro

Raw materials and consumables	-
Finished goods	-
Prepayments on inventory	164
Inventories	164

19. Trade and other receivables

The Company has a receivable on PAN Foundation. In the second half of 2021 the Company entered into negotiations with PAN Foundation and agreed to extend the loan until 30 June 2022 with an interest of 3% under certain conditions. DGB has received a signicant repayment of the loan in March, April and May 2022. In addition the Company still intends to repurchase a portion of shares held by PAN Foundation. The Board of Directors may at any time repurchase DGB shares from the PAN Foundation at a discount of 10% on the average share price of the last 30 days with a minimum price of EUR 1, as soon as the Company has obtained a purchase authorization from shareholders at the AGM after publication and adoption of the annual results for 2021. Other receivables relate on one hand to payments made to an escrow account (EUR 85K) to secure the purchase on Property, plant and equipment. There is no obligation to purchase the assets to which the prepayments concern. If the assets are not acquired the prepayments should be repaid from the escrow account. On the other hand the Group has a receivable on the selling shareholder of Statix (nominal value EUR 170K with a fair value of EUR 150K). With regard to this receivable the Group received securities that covers the complete amount.

	2021	2020
In thousands of euro
Receivable on Related parties
Receivables due from related parties	5,900	5,673
Other trade receivables	245	-
	6,145	5,673
Other receivables

20. Cash and cash equivalents

	2021	2020
In thousands of euro
Bank balances	85	251
Call deposits	-	-
Cash and cash equivalents in the statement of nancial position	85	251

Cash and cash equivalents are at free disposal of the Group.

21. Capital and reserves

All ordinary shares rank equally with regard to the Company’s residual assets.

Share capital and share premium	In shares	Position at 1 January 2020	Purchased shares in 2020	Position at 31 December 2020	Sold treasury shares under facility agreement	Position at 31 December 2021
Ordinary shares issued		11,400,349	-	11,400,349	-	11,400,349
Treasury shares held		(2,249,999)	-	(2,249,999)	950,157	(1,299,842)
Ordinary shares outstanding		9,150,350	-	9,150,350	950,157	10,100,507

Ordinary shares

Holders of these shares are entitled to dividends if declared from time to time and are entitled to one vote per share at general meetings of the Company. All rights attached to the Company’s shares held by the Group are suspended until those shares are sold. In 2021 950,157 shares have been sold in connection with a facility agreement (see below). The proceeds have been added to other reserves.

Priority shares

On 20 June 2019 the Company issued 100 priority shares. On 4 February 2021, the Shareholders Meeting approved the delegation to the Board of Directors, for a period of 18 months from the date of the meeting, of the power to acquire all 100 issued and outstanding 100 priority shares of the Company for a purchase price equal to their nominal value. The Board of Directors wishes to repurchase all issued and outstanding priority shares, which following the management buyout by the previous Board of Directors no longer serve a purpose.

Legal reserve

The legal reserve as per 1 January 2020 related to subsidiaries in conformity with Dutch GAAP. The amount has been released and added to the other reserves as a result of the asset / liability transaction.

Other reserves

Other reserves comprise past retained earnings allocated to the reserves and treasury shares. In the reporting period 950,157 number of treasury shares has been sold amounting to EUR 1 million in connection with a private placement facility, resulting in an average price per share of EUR 1.05. In May 2021 the company announced an EUR 6 million investment agreement signed between the Company and a consortium of Dutch-based accredited investors. During 2021 the company made 2 drawdowns under the investment agreement of EUR 500K each. After this second drawdown the agreement has been terminated with mutual understanding. The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the Group. At 31 December 2021, the Group held 1,299,842 (2020 : 2,249,999).

Convertible notes

The reserve for convertible notes comprises the amount allocated to the equity component for the convertible notes issued by the Company in 2021 (see note 22).

Reserves

The intended repurchase of all priority shares by the Company has not been completed as certain legal formalities for the repurchase and transfer of the priority shares to the Company have not yet been nalized. The 100 priority shares are currently still held by Ms. Van der Meulen. The Company aims to nalize the repurchase of share as soon as possible.

The Group monitors capital using a ratio of ‘net debt’ to ‘equity’. Net debt is calculated as total liabilities less cash and cash equivalents. Equity comprises all components of equity. The Group’s net debt to equity ratio at 31 December 2021 was as follows.

	2021	2021
In thousands of euro
Total liabilities	1,084	410
Less: cash and cash equivalents	(85)	(251)
Net debt	999	159
Total equity	5,979	5,652
Net debt to adjusted equity ratio	17%	3%

Capital management

The Group’s policy is to maintain a strong capital base so as to maintain investor, creditor and market condence and to sustain future development of the business. The activities of the Company depend on the appetite of investors. Investments can be nanced through either equity and/or borrowings. The board of directors seeks to maintain a balance between the higher returns that might be possible with higher levels of borrowing and the advantages and security aorded by a sound capital position.

22. Non-current liabilities

	2021	2020
In thousands of euro
Non-current liabilities
Mortgage	-	-
Subordinated loan	-	40
Convertible notes	102	-
Lease liabilities	74	52
Other loans	63	-
	239	92
Current liabilites
Mortgage	-	-
Subordinated loan	-	-
Convertible notes	24	-
Lease liabilities	21	14
Other loans	243	-
	288	14

	Total	In thousands of euro	Balance at 1 January 2020	Redeemed in asset / liability transaction	Issued new liabilities	Redemption	Total amount of loans	Current part of loans	Balance at 31 December 2020
Mortgage			900	(900)	-	-	-	-	-
Subordinated loan			3,340	(4,200)	900	-	40	(14)	40
Convertible notes			-	-	-	-	-	-	-
Lease liabilities			-	-	66	-	66	(14)	52
Other loans			174	(196)	22	-	-	-	-
Total			4,414	(5,296)	988	-	106	(28)	92

	Balance at 1 January 2021	Redeemed	Issued liability part of convertible loan	Issued new loans	Issued new lease	Total amount of loans	Current part of loans	Balance at 31 December 2021
Mortgage	-	-	-	-	-	-	-	-
Subordinated loan	40	(40)	-	-	-	-	-	-
Convertible notes	-	-	130	-	-	126	(24)	102
Lease liabilities	66	(17)	-	-	46	95	(21)	74
Other loans	-	(174)	-	480	-	306	(243)	63
Total	106	(235)	130	480	46	527	(288)	239

Governance Financial reporting

The mortgage loan was established on and secured by the property whichhas been disposed of in 2020 with the asset / liability transaction in 2020. The interest on the loan amounted to 5% per annum and the redemption date was 30 June 2022. This loan has been settled under the asset / liability transaction in 2020. Mortgage 150 About DGB Carbon Markets Governance Financial reporting The interest on the subordinated loans amounts to 5% per annum. The total notional amount of these loans per 1 January 2020 amounts to EUR 3,340K. During 2020 EUR 900K has been provided by related party Majka Investments B.V.. In connection with the asset / liability transaction in 2020, EUR 4,200K of these loans have been settled. These loans were due to related parties. The remaining EUR 40K has been redeemed in 2021. The interest is due every quarter and is payable in cash. In substance this transaction contains an equity component and a liability component. The liability component has been calculated by the net present value of the interest payments at a discount rate equal to market rates. The financial liability at inception amounts to EUR 130K. The balance, amounting to EUR 441K is recorded as a separate component under equity. In 2020 lease liabilities have been incurred in connection with the purchase of a company car under Finance Lease. In 2021 a second company car was acquired under Finance Lease. As part of the asset / liability transaction in 2020 all other loans have been settled as per 4 September 2020. In May 2021, 50% of the shares in Green Fuel Investments B.V. (GFI) have been acquired. The consideration paid amounts to EUR 480K being the net present value of 8 payments of EUR 62.5K over a period of 2 years. As per balance sheet date, 5 payments are outstanding. The net present value of the amount due is included in the liabilities. The Company issued convertible loan notes for an amount of EUR 580K qualifying under the exemptions to the obligation to publish a prospectus or information document (addressed solely to qualified investors and offered to fewer than 150 natural or legal persons in the Netherlands). The loan note shall mandatory convert into The Companies shares as per 30 June 2025. The loan notes may convert early at the discretion of The Company in case the share price of The Company exceeds EUR 2.00 per share on 5 subsequent days. The loan note holders have no right to request for redemption in cash. The loan notes bear an interest rate of 6.00% - 7.25%.

Subordinated loan
Lease liabilities
Other loans
Convertible notes

151 About DGB Carbon Markets Governance Financial reporting

23. Current liabilities

Liability due to related parties amounting to EUR 185K consist of the balance of remuneration and current account balance due to the CEO (2020: EUR 27K). In 2021 the current account with the shareholder PAN Foundation changed from a payable (EUR 270K) into a receivable due to unpaid interest income on the loan provided in connection with the asset / liability transaction.

	2021	2020
In thousands of euro
Liabilities due to related parties	185	297
Trade payables third parties	230	-
Income tax payable	9	-
Accrued expenses	62	7
Other payables	71	-
Current part of non-current liabilities	288	14
Total trade and other payables	845	318

152 About DGB Carbon Markets Governance Financial reporting

24. Financial instruments – Fair values and risk management

All financial assets and liabilities are classified at amortised cost, hence no fair value valuation is applicable to these instruments except for their initial recognition. The initial fair value has been determined by discounted cash flows. The valuation model considers the present value of expected proceeds and payments, discounted using a risk-adjusted discount rate. Their carrying amount is a reasonable approximation of fair value.

The Company’s board of directors has overall responsibility for the establishment and oversight of the Group’s risk management framework. Due to absence of non-executive directors the board of directors is also responsible for monitoring the compliance with the Group’s risk management policies and procedures, and reviews the adequacy of the risk management framework in relation to the risks faced by the Group. The Group’s risk management policies are established to identify and analyse the risks faced by the Group, to set appropriate risk limits and controls and to monitor risks and adherence to limits. Risk management policies and systems are reviewed regularly to reflect changes in market conditions and the Group’s activities. The Group, through its training and management standards and procedures, aims to maintain a disciplined and constructive control environment in which all employees understand their roles and obligations. The board of directors engaged by the end of 2021 a specialised firm to assist in its oversight role by third line of defence. This firm undertakes both regular and ad hoc reviews of risk management controls and procedures, the results of which are reported to the board of directors.

The Group has exposure to the following risks arising from financial instruments:

• credit risk
• liquidity risk
• market risk

Financial risk management

Risk management framework

Accounting classifications

153 About DGB Carbon Markets Governance Financial reporting

Credit risk

Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables from customers and related parties. The carrying amounts of financial assets and contract assets represent the maximum credit exposure.

Impairment losses on financial assets and contract assets recognised in profit or loss were as follows. The board of directors analyses individually each new customer for creditworthiness before the Group’s standard payment and delivery terms and conditions are offered. The Group’s review includes external ratings, if they are available, financial statements, credit agency information, industry information and in some cases bank references. The Group limits its exposure to credit risk from trade receivables by establishing a maximum payment period for individual and corporate customers respectively. The impairment loss recognised in 2020 relates entirely to the discontinued operations. In 2021 no losses nor expected credit losses have been recorded with regard to trade receivables in connection with contracts with customers. This risk is considered not material due to its limited size and nature of the realised revenue in 2021.

154 About DGB Carbon Markets Governance Financial reporting

The Group held cash and cash equivalents of EUR 56K at 31 December 2021 (2020: EUR 251K). The cash and cash equivalents are held with Rabobank and financial institution counterparties, which are rated AA to AA+, based on most common rating agencies (e.g. Moody’s). No impairment on cash and cash equivalents has been measured on a 12-month expected loss basis and reflects the short maturities of the exposures. The Group considers that its cash and cash equivalents have low credit risk based on the external credit ratings of the counterparties.

Liquidity risk

Liquidity risk is the risk that the Group will encounter difficulty in meeting the obligations associated with its financial liabilities that are settled by delivering cash or another financial asset. The Group’s objective when managing liquidity is to ensure, as far as possible, that it will have sufficient liquidity to meet its liabilities when they are due, under both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Group’s reputation. The Group aims to maintain the level of its cash and cash equivalents at an amount in excess of expected cash outflows on financial liabilities (other than trade payables) over the next 90 days. The Group also monitors the level of expected cash inflows on trade and other receivables together with expected cash outflows on trade and other payables.

At 31 December 2021, the expected cash inflows from trade and other receivables maturing within three months were €1,100 thousand (2020: zero) and the expected cash outflows from trade and other payables due within three months were in line with trade creditors and accrued expenses.

The following are the remaining contractual maturities of financial liabilities at the reporting date. The amounts are gross and undiscounted, and include contractual interest payments and exclude the impact of netting agreements

155 About DGB Carbon Markets Governance Financial reporting

31 December 2021

Financial liability	Carrying amount	Total	3 months or less	3 - 12 months	1 - 2 years	2 - 5 years	More than 5 years
In thousands of euro
Convertible notes	126	154	9	27	36	82	-
Lease liabilities	95	110	7	21	47	35	-
Other loans	306	376	63	188	125	-	-
Liabilities due to related parties	185	185	185	-	-	-	-
Trade payable third parties	230	230	230	-	-	-	-
Accrued expenses	62	62	62	-	-	-	-
Other payables	80	80	80	-	-	-	-
Total	1,084	1,197	636	236	208	117	-

156 About DGB Carbon Markets Governance Financial reporting

31 December 2021

Financial liability	Carrying amount	Total	3 months or less	3 - 12 months	1 - 2 years	2 - 5 years	More than 5 years
In thousands of euro
Convertible notes	-	-	-	-	-	-	-
Lease liabilities	66	76	5	14	19	38	-
Other loans	40	46	-	2	2	42	-
Liabilities due to related parties	297	297	297	-	-	-	-
Trade payable third parties	-	-	-	-	-	-	-
Accrued expenses	7	7	7	-	-	-	-
Other payables	-	-	-	-	-	-	-
Total	410	426	309	16	21	80	-

157 About DGB Carbon Markets Governance Financial reporting

Market risk

Exposure to currency risk

As per 31 December the exposure regarding currency risk is as follows:

• USD 200 thousand for 2022 and 2023 regarding a commitment with Quadriz (see note 26)
• USD 1,263 thousand with regard to a forward sales contract for which the proceeds have been received and revenue is recognised in March# About DGB Carbon Markets Governance Financial reporting

Market risk is the risk that changes in market prices – e.g. foreign exchange rates, interest rates and equity prices – will affect the Group’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable parameters, while optimising the return. The Group uses no derivatives to manage market risks. Generally, the Group seeks to apply natural hedges to manage volatility in profit or loss. All interest bearing financial assets and financial liabilities are subject to fixed interest rates. Although this increases market risk, the Group accepts this risk above the risk for unpredictable cash inflows and outflows. The Group is exposed to transactional foreign currency risk to the extent that there is a mismatch between the currencies in which sales, purchases, receivables and borrowings are denominated and the respective functional currency of the Group which is Euro. The currencies in which these transactions are primarily denominated are euro and US dollars. The current exposure of the mismatch between currencies is acceptable for management. If in the future exposure will increase, management will consider to mitigate that risk accordingly on a transaction-by-transaction basis by the use of forward exchange contracts to hedge its currency risk.

25. Acquisition of subsidiary

On 29 November 2021, the Group acquired 75% of the shares and voting interests in Statix Corporation B.V. (hereafter: Statix) Included in the identifiable assets and liabilities acquired at the date of acquisition of Statix are inputs with regard to research and development processes (e.g. technology such as artificial intelligence, blockchain big data and drone technology) and an organised workforce. The Group has determined that together the acquired inputs and processes significantly contribute to the ability to create revenue. The Group has concluded that the acquired set is a business. Taking control of Statix will enable the Group to validate, measure and help deliver ecological projects for ecosystem restoration. The Group also expects to reduce costs through economies of scale by having an internal IT department. For the one month ended 31 December 2021, Statix did not material contributed revenue and profit to the Group’s results. If the acquisition had occurred on 1 January 2021, management estimates that consolidated revenue and consolidated profit for the year would not have been affected significantly. In determining these amounts, management has assumed that the fair value adjustments, determined provisionally, that arose on the date of acquisition would have been the same if the acquisition had occurred on 1 January 2021. The consideration transferred amounted to EUR 1.00 in cash. Settlement of pre-existing relationships amounted to EUR 149K Therefore the total consideration amounted to EUR 149K The acquisition costs were not material and are therefore not taken into consideration in this purchase price allocation. These costs have been included in the expenses. The following table summarises the recognised amounts of assets acquired and liabilities assumed at the date of acquisition.

Note	Amount
In thousands of euro
Property, plant and equipment	1
Intangible assets	30
Trade and other receivables	161
Cash and cash equivalents	13
Loans and borrowings	-
Trade and other payables	(92)
Total identifiable net assets acquired	113

Intangible assets include in process development cost amounting to EUR 30K. The fair value has been determined based on the external invoices received before the date of acquisition. Market comparison technique and cost technique: The valuation model considers market prices for similar items when they are available, and amortised replacement cost when appropriate. Amortised replacement cost reflects adjustments for functional and economic obsolescence. The fair value has been subject to an impairment test. Because of the limited time between the date of acquisition and reporting date it has deemed not necessary to make adjustments to the fair value at acquisition date. Trade and other receivables consist of current account loans provided to the selling shareholder. These loans are secured by robust collateral. Loans and borrowings include a pre-existing loan provided by the acquirer to the acquiree amounting to EUR 149K. This loan is being considered in the acquisition price below. Trade and other payables include trade creditors and tax related liabilities.

The fair values have been determined on a provisional basis. If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised. Goodwill in relation to the acquisition has been determined as follows:

Note	Amount
In thousands of euro
Consideration transferred	-
Fair value of preexisting interest in Statix	149
Fair value of identifiable net assets	(113)
Goodwill	36

The goodwill is attributable mainly to the skills and technical talent of Statix’s work force and the synergies expected to be achieved from integrating the company into the Group’s existing business. None of the goodwill recognised is expected to be deductible for tax purposes.

26. Commitments

During 2020, the Group engaged Quadriz to perform services as described hereafter amounting to USD 200 thousand per year for a period of 3 years. Quadriz will source, and negotiate against specific, agreed upon criteria, native forest land for DGB’s acquiring. Quadriz will further facilitate negotiations on price and all due diligence related work for the considered land for acquisition. Quadriz shall be responsible for all cost in relation to its sourcing and negotiation activities. DGB shall be responsible for all costs related to the actual land transaction and the land ownership related costs, such as, but not limited to, legal fees, notary fees and outside consulting fees where required. Quadriz may invoice DGB a yearly reimbursable retainer fee of up to a maximum of US$ 200,000. All paid retainer fees must be reimbursed to DGB from the VCU sales generated by Quadriz on the sourced properties.

As key management of the Company is considered the board of directors. The board of directors consisted in 2021 of Mr. S.A.M. Duijvestijn (CEO) only. In 2020 the board consisted of 3 persons until September. From September the board consisted of 1 person. Short-term employee benefits for the year 2021 amounted to EUR 120K as approved by the Annual General Meeting of 15 September 2021. In the 2021 amount is also included an amount of EUR 13K regarding the short-term employee benefits which have been paid additionally over 2020 since the appointment of the CEO to 31 December 2020. This has also been subject to approval of the AGM held on 15 September 2021. The remuneration package of the CEO does not include post-employee benefits The other long-term benefits amount to 100% of the annual salary of the CEO which is EUR 120K (2020: The 100% amounted to EUR 40K has been waived. In return the CEO received options EUR 0K) . In total the CEO has been awarded 240.000 options under the share option plan. 160,000 options have been rewarded over 2021 and 80,000 share options have been rewarded for the 4 month period in 2021.

Transactions with key management personnel

	2021	2020
In thousands of euro
Short-term employee benefits	133	27
Post-employment benefits	-	-
Other long-term benefits	120	-
Share based payments	-	-
Total	253	27

27. Related parties

The remuneration of the Board of Directors which have served the Group until 4 September 2020 was as Mr. R.A.J. van Riele was appointed as executive board member (CEO) and stepped back at 22 July 2020. Mr. J.P. Verheijen was appointed as non-executive board member and stepped back at 22 July 2020. Mr. M.G.J. Logtenberg was appointed as non-executive board member and stepped back at 10 September 2020. Besides the remuneration as non-executive board member, Mr. Logtenberg received also a management fee amounting to EUR 113K. Until 7 September 2020 Mr. Logtenberg had an indirect interest in the Company amounting to 64.46%.

R.A.J. van Riele	J.P. Verheijen	M.G.J. Logtenberg
2020
In thousands of euro
Short-term employee benefits	44	44
Post-employment benefits	8	8
Other long-term benefits	-	-
Share based payments	-	-
Total	52	52

Other related party transactions do not include the transactions between related parties before the asset / liability transaction in 2020. All outstanding balances with these related parties are priced on an arm’s length basis and are to be settled in cash. None of the balances are secured. No expense has been recognised in the current year or prior year for bad or doubtful debts in respect of amounts owed by related parties. With regard to further disclosure to this loan reference is made to note 19.

Other related party transactions

Transaction values for the year ended 31 December	Balance outstanding as at 31 December
In thousands of euro	2021
Loan and related interest income
PAN Foundation - Interest resp. loan	170
PAN Foundation - current account	N/A
CEO - current account	N/A

28.# Subsequent events

Completion of its first large offtake agreement

As announced on 30 December 2021, the Company signed its first large offtake agreement for up to 128,000 tonnes of VERs with a contract price of US$10 per tonne with a multinational energy company. On March 2nd, 2022 the Group completed its first large offtake agreement for verified emission reductions that generated revenues for the Group in Q1 2022 of approximately EUR 1.1 million. The Company confirms that the verification procedures have been completed and that 126,297 tonnes of VERs, which originated from a reforestation investment project in Sierra Leone, have now been issued and delivered to the buyer.

Start of two carbon projects in Kenya (8.8 million carbon credits)

On November 1, 2021 DGB announced both Kenia carbon projects have passed the feasibility studies. After the pre-roll out, operations have now commenced and the Gruop´s carbon team is in Kenya to start the nurturing of seedlings and the project certification process. On March 22nd, 2022 the Group committed to further development of the projects. The total development costs by the Group over the next 3 years are EUR 7.4 million for both projects. The DGB Hongera Afforestation Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 7.0 million credits over its 30-year project lifetime (approximately 225,000 carbon credits per annum). The Hongera Energy Efficient Cookstove Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 1.8 million credits over its 6-year project lifetime (approximately 300,000 carbon credits per annum). The Group plans to finance these projects through a) entering into long-term offtake agreements for future credits, b) reinvesting most of the carbon credit revenues from running projects into new project developments; and c) offering project-specific investment opportunities to investors, such as its green impact bonds.

166 About DGB Carbon Markets Governance Financial reporting

Start of two carbon projects in Cameroon (6.9 million carbon credits)

On November 1, 2021 the Company announced the two carbon projects in Cameroon have passed the feasibility studies. After the pre-roll out, operations have now commenced and the Greenzone team in Cameroon to start the nurturing of seedlings and the project certification process. On April 4th, 2022 DGB committed to further development of the projects. The total development costs by the Group over the next 3 years are EUR 5.6 million for both projects. The DGB Cameroon Afforestation Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 5.1 million credits over its 30-year project lifetime (approximately 175,000 carbon credits per annum). The Sawa Cookstove Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 1.8 million credits over its 6-year project lifetime (approximately 300,000 carbon credits per annum). The Group plans to finance these projects through a) entering into long-term offtake agreements for future credits, b) reinvesting most of the the carbon credit revenues from running projects into new project developments; and c) offering project-specific investment opportunities to investors, such as its green impact bonds.

Receivable Foundation

The Company has a receivable on PAN Foundation. In the second half of 2021 the Company entered into negotiations with PAN Foundation and agreed to extend the loan until 30 June 2022 with an interest of 3% under certain conditions. DGB has received a significant repayment of the loan in March, April and May 2022. In addition the Company still intends to repurchase a portion of shares held by PAN Foundation. The Board of Directors may at any time repurchase DGB shares from the PAN Foundation at a discount of 10% on the average share price of the last 30 days with a minimum price of EUR 1, as soon as the Company has obtained a purchase authorization from shareholders at the AGM after publication and adoption of the annual results for 2021.

Company Only Financial statements

168 About DGB Carbon Markets Governance Financial reporting

DGB GROUP NV

Company only financial statements

31 December 2021, Statement of financial position (before Appropriation of Result)

Notes	2021	2020
In thousands of euro
Assets
Property, plant and equipment	31	166
Intangible assets and goodwill	32	27
Financial Fixed Assets	33	575
Non-current assets		768
Inventories	34	164
Trade and other receivables	35	6,005
Cash and cash equivalents	36	56
Current assets		6,225
Total assets		6,993

169 About DGB Carbon Markets Governance Financial reporting

Notes	2021	2020
In thousands of euro
Equity
Share capital	37	228
Share premium		11,152
Convertible loans		441
Reserves		(4,728)
Retained earnings		(1,104)
Equity attributable to owners of the Company		5,989
Liabilities
Loans and borrowings	38	239
Deferred tax liabilities	43	-
Non-current liabilities		239
Current tax liabilities		-
Loans and borrowings	38	288
Trade and other payables	39	477
Current liabilities		765
Total liabilities		1,004
Total equity and liabilities		6,993

170 About DGB Carbon Markets Governance Financial reporting

Company statement of profit or loss

For the year ended 31 December

Notes	2021	2020
In thousands of euro
Continuing operations
Revenue	40	-
Cost of sales		-
Gross profit		-
Other income	19	-
Selling and distribution expenses	41	(398)
Administrative expenses	41	(796)
Operating result		(1,175)
Finance income		173
Finance costs		(40)
Net finance result	42	133
Profit before tax		(1,042)
Income tax expense	43	-
Profit after tax		(1,042)
Share of profit of equity-accounted investees, net of tax	33	(62)
Profit from continuing operations		(1.104)

171 About DGB Carbon Markets Governance Financial reporting

1. Reporting Entity

DGB Group NV (the Company) is domiciled in the Netherlands. The Company’s registered office is at Westplein 12, 3016 BM Rotterdam, the Netherlands, under Trade Register number 32017953.

1. Accounting policies

The company financial statements of DGB Group N.V. have been prepared in accordance with the provisions of Part 9 of Book 2 of the Dutch Civil Code. In preparing these financial statements, the company availed itself of the facility offered by Section 362(8), Book 2 of the Dutch Civil Code to use the same accounting policies (including those for the presentation of financial instruments as equity or loan capital) for the company and the consolidated financial statements.

The company financial statements of DGB Group N.V. are presented in euros (EUR). Amounts are in thousands of euros, unless otherwise indicated.

The accounting policies for the company financial statements are the same as for the consolidated financial statements except for the accounting policy below. If no further policies are mentioned, reference is made to the accounting policies for the consolidated financial statements.

Financial assets / investments in associates

Associates and group companies in which DGB Group N.V. exercises control or where DGB Group N.V. is responsible for central management are accounted for using the equity method. The equity method is a method of accounting whereby the net assets, liabilities and provisions of the group company are measured and profit is calculated on the basis of the accounting policies used in the consolidated financial statements. Receivables from group companies are measured on the basis of the accounting policies used in the consolidated financial statements. The expected credit losses on claims on group companies, as stated in IFRS 9, are recognised in the carrying amounts of the associated companies.

172 About DGB Carbon Markets Governance Financial reporting

1. Property, plant and equipment

In thousands of euro	Buildings	Right to use assets	Other assets	Total
Cost
Balance at 1 January 2020	1,950	-	360	2,310
Additions	61	82	10	153
Disposals	(1,950)	-	(370)	(2,320)
Balance at 31 December 2020	61	82	-	143
Additions	-	49	-	49
Balance at 31 December 2021	61	131	-	192

173 About DGB Carbon Markets Governance Financial reporting

Additions in 2021 consist of a company car. Addition in 2020 consists of an office unit and a company car. Both company cars are financed by finance lease agreements. In 2020 the office building in Hardenberg and the other fixed assets will be disposed of in the asset / liability transaction (see note 9).

In thousands of euro	Buildings	Right to use assets	Other assets	Total
Carrying amounts
at 1 January 2020	1,756	-	332	2,088
at 31 December 2020	60	78	-	138
at 31 December 2021	54	112	-	166

In thousands of euro	Buildings	Right to use assets	Other assets	Total
Accumulated depreciation and impairment losses
Balance at 1 January 2020	194	-	28	222
Depreciation	36	4	18	58
Disposals	(229)	-	(46)	(275)
at 31 December 2020	1	4	-	5
Depreciation	6	15	-	21
at 31 December 2021	7	19	-	26

174 About DGB Carbon Markets Governance Financial reporting

1. Intangible assets

In thousands of euro	Goodwill
Accumulated depreciation and impairment losses
Balance at 1 January 2020	2,900
Disposals	(2,900)
Balance at 31 December 2020	-
Additions	-
Balance at 31 December 2021	-

In thousands of euro	Goodwill
Cost
Balance at 1 January 2020	9,033
Additions	-
Disposals	(9,033)
Balance at 31 December 2020	-
Additions	27
Balance at 31 December 2021	27

175 About DGB Carbon Markets Governance Financial reporting

In November the Company acquired Statix. As a result of the purchase price allocation an amount of EUR 27K has been recognised as goodwill.(see note 24).# 33. Fixed Assets

In May 2021, 50% of the shares in Green Fuel Investments B.V. (GFI) have been acquired. The consideration paid amounts to EUR 480K being the net present value of 8 payments of EUR 62.5K over a period of 2 years. As per balance sheet date, 5 payments are outstanding. The net present value of the amount due is included in the liabilities. In September 2021 3 subsidiaries were established. The investment consisted of 100% of the share capital amounting to EUR 126.00 per company. On 29 November 2021, the Group acquired 75% of the shares and voting interests in Statix Corporation B.V. (hereafter: Statix). The consideration paid amounted to EUR 1.00. To Statix loans have been provided for which an impairment has been recorded amounting to EUR 26K.

Investments in group companies

Receivables from group companies

Total

In thousands of euro	Balance at 1 January 2020	Share of profit	Disposals	Balance at 31 December 2020	Additions	Share of profit	Impairment on receivable	Balance at 31 December 2020
Investments in group companies	5,688	(320)	(5,368)	-	480	(62)	-	418
Receivables from group companies	-	-	-	-	183	-	(26)	157
Total	5,688	(320)	(5,368)	-	663	(62)	(26)	575

34. Inventories

During the reporting period the Company secured for its balance sheet by entering into non-financial forward purchase contracts with regard to voluntary carbon offsets to secure these for its balance sheet. The total numbers of voluntary carbon offsets under these forward contracts are estimated at 157.000 ton with a total estimated purchase value of EUR 868K. On these contracts prepayments have been made amounting to EUR 164K. The forward contracts have not been considered as derivatives as the voluntary carbon offsets will be used by the Company for its own use based on expected activities. Furthermore these contracts do not include a clause with the possibility to be settled on a net basis, hence the contracts do not meet the definition of a derivative financial instrument for accounting purposes. Upon the registration of the voluntary carbon offsets on the account of the Company, the voluntary carbon offsets will be recognized as inventory.

In thousands of euro	2021	2020
Prepayments on inventory	164	-
Inventories	164	-

35. Trade and other receivables

Note	In thousands of euro	2021	2020
	Receivables due from related parties	5,900	5,673
	Prepayments	95	-
	Current account positions with group companies	10	-
	Total	6,005	5,673

36. Cash and cash equivalents

The Company has a receivable on PAN Foundation. In the second half of 2021 the Company entered into negotiations with PAN Foundation and agreed to extend the loan until 30 June 2022 with an interest of 3% under certain conditions. DGB has received a significant repayment of the loan in March, April and May 2022. In addition the Company still intends to repurchase a portion of shares held by PAN Foundation. The Board of Directors may at any time repurchase DGB shares from the PAN Foundation at a discount of 10% on the average share price of the last 30 days with a minimum price of EUR 1, as soon as the Company has obtained a purchase authorization from shareholders at the AGM after publication and adoption of the annual results for 2021.

Prepayments relate mainly to payments made to an escrow account (EUR 85K) to secure the purchase on Property, plant and equipment. There is no obligation to purchase the assets to which the prepayments concern. If the assets are not acquired the prepayments should be repaid from the escrow account. Cash and cash equivalents are at free disposal of the company.

In thousands of euro	2021	2020
Bank balances	56	251
Call deposits	-	-
Cash and cash equivalents in the statements of financial position	56	251

37. Equity capital and reserves

Movements in equity capital and reserves were as follows:

In thousands of euro	Balance at 1 January 2020	Allocation results	Profit for the period	Other movement	Balance at 1 December 2020	Balance at 1 January 2021	Allocation results	Profit for the period	Sale of treasury shares	Bond mandatory convertible into shares	Other movement	Balance at 1 December 2021
Equity
Share capital	228	-	-	-	228	228	-	-	-	-	-	228
Share premium	11,152	-	-	-	11,152	11,152	-	-	-	-	-	11,152
Legal Reserves	3	-	-	(3)	-	-	-	-	-	-	-	-
Other Reserves	(2,328)	(3,391)	(12)	3	(5,716)	(5,716)	(12)	-	1,000	-	-	(4,728)
Convertible loans	-	-	-	-	-	-	-	-	-	441	-	441
Retained earnings	(3,391)	3,391	-	-	(12)	(12)	12	(1,104)	-	-	-	(1,104)
Equity attributable to owners of the Company	5,664	-	(12)	-	5,652	5,652	-	(1,104)	1,000	441	-	5,989

Share capital and share premium

All ordinary shares rank equally with regard to the Company’s residual assets.

	Position at 1 January 2020	Purchased shares in 2020	Position at 31 December 2020	Sold treasury shares under facility agreement	Position at 31 December 2021
Ordinary shares sold	11,400,349	-	11,400,349	-	11,400,349
Treasury shares held	(2,249,999)	-	(2,249,999)	950,157	(1,299,842)
Ordinary shares outstanding	9,150,350	-	9,150,350	950,157	10,100,507

Ordinary shares

Holders of these shares are entitled to dividends if declared from time to time and are entitled to one vote per share at general meetings of the Company. All rights attached to the Company’s shares held by the Group are suspended until those shares are sold. In 2021 950,157 shares have been sold in connection with a facility agreement (see below). The proceeds have been added to other reserves.

Priority shares

On 20 June 2019 the Company issued 100 priority shares. On 4 February 2021, the Shareholders Meeting approved the delegation to the Board of Directors, for a period of 18 months from the date of the meeting, of the power to acquire all 100 issued and outstanding 100 priority shares of the Company for a purchase price equal to their nominal value. The Board of Directors wishes to repurchase all issued and outstanding priority shares, which following the management buyout by the previous Board of Directors no longer serve a purpose. The intended repurchase of all priority shares by the Company has not been completed as certain legal formalities for the repurchase and transfer of the priority shares to the Company have not yet been finalized.

Legal reserve

The legal reserve as per 1 January 2020 related to subsidiaries in conformity with Dutch GAAP. The amount has been released and added to the other reserves as a result of the asset / liability transaction.

Other reserves

Other reserves comprise past retained earnings allocated to the reserves and treasury shares. In the reporting period 950,157 number of treasury shares has been sold amounting to EUR 1 million in connection with a private placement facility, resulting in an average price per share of EUR 1,05. In May 2021 the company announced an EUR 6 million investment agreement signed between the Company and a consortium of Dutch-based accredited investors. During 2021 the company made 2 drawdowns under the investment agreement of EUR 500K each. After this second drawdown the agreement has been terminated with mutual understanding. The reserve for the Company’s treasury shares comprises the cost of the Company’s shares held by the Group. At 31 December 2021, the Group held 1,299,842 (2020: 2,249,999).

Convertible notes

The reserve for convertible notes comprises the amount allocated to the equity component for the convertible notes issued by the Company in 2021 (see note 38).

Reserves

The 100 priority shares are currently still held by Ms. Van der Meulen. The Company aims to finalize the repurchase of share as soon as possible.

38. Non-current liabilities

Note	In thousands of euro	2021	2020
	Mortgage	-	-
	Subordinated loan	-	40
	Convertible notes	102	-
	Lease liabilities	74	52
	Other loans	63	-
	Total	239	92

Current liabilities

Note	In thousands of euro	2021	2020
	Mortgage	-	-
	Subordinated loan	-	-
	Convertible notes	24	-
	Lease liabilities	21	14
	Other loans	243	-
	Total	288	14

Movement of the long term loans is as follows:

In thousands of euro	Balance at 1 January 2020	Redeemed in asset / liability transaction	Issued new liabilities	Redemption	Total amount of loans	Current part of loans	Balance at 31 December 2020
Mortgage	900	(900)	-	-	-	(14)	-
Subordinated loan	3,340	(4,200)	900	-	40	(14)	40
Convertible notes	-	-	-	-	-	-	-
Lease liabilities	-	-	66	-	66	-	52
Other loans	-	-	-	-	-	-	-
Total	4,240	(5,100)	966	-	106	(28)	92

In thousands of euro	Balance at 1 January 2021	Redeemed	Issued liability part of convertible loan	Issued new loans	Issued new lease	Total amount of loans	Current part of loans	Balance at 31 December 2021
Mortgage	-	-	-	-	-	-	-	-
Subordinated loan	40	(40)	-	-	-	-	-	-
Convertible notes	-	(4)	130	-	-	126	(24)	102
Lease liabilities	66	(17)	-	-	46	95	(21)	74
Other loans	-	(174)	-	480	-	306	(243)	63
Total	106	(235)	130	480	46	527	(288)	239

Mortgage

The mortgage loan was established on and secured by the property which has been disposed of in 2020 with the asset / liability transaction in 2020. The interest on the loan amounted to 5% per annum and the redemption date was 30 June 2022. This loan has been settled under the asset / liability transaction in 2020.

Subordinated loan

The interest on the subordinated loans amounts to 5% per annum.The total notional amount of these loans per 1 January 2020 amounts to EUR 3,340K. During 2020 EUR 900K has been provided by related party Majka Investments B.V.. In connection with the asset / liability transaction in 2020, EUR 4,200K of these loans have been settled. These loans were due to related parties. The remaining EUR 40K has been redeemed in 2021.

Convertible notes
The Company issued convertible loan notes for an amount of EUR 580K qualifying under the exemptions to the obligation to publish a prospectus or information document (addressed solely to qualified investors and offered to fewer than 150 natural or legal persons in the Netherlands). The loan note shall mandatory convert into The Companies shares as per 30 June 2025. The loan notes may convert early at the discretion of The Company in case the share price of The Company exceeds EUR 2.00 per share on 5 subsequent days. The loan note holders have no right to request for redemption in cash. The loan notes bear an interest rate of 6.00% - 7.25%. The interest is due every quarter and is payable in cash. In substance this transaction contains an equity component and a liability component. The liability component has been calculated by the net present value of the interest payments at a discount rate equal to market rates. The financial liability at inception amounts to EUR 130K. The balance, amounting to EUR 441K is recorded as a separate component under equity.

Lease liabilities
After this date in 2020 new lease liabilities have been incurred in connection with the purchase of a company car under Finance Lease. In 2021 a second company car was acquired under Finance Lease.

Other loans
In May 2021, 50% of the shares in Green Fuel Investments B.V. (GFI) have been acquired. The consideration paid amounts to EUR 480K being the net present value of 8 payments of EUR 62.5K over a period of 2 years. As per balance sheet date, 5 payments are outstanding. The net present value of the amount due is included in the liabilities.

39. Current liabilities

Liability due to related parties amounting to EUR 185K consist of the balance of remuneration and current account balance due to the CEO (2020: EUR 27K). In 2021 the current account with the shareholder PAN Foundation changed from a payable as per 31 December 2020 (EUR 270K) into a receivable due to unpaid interest income on the loan provided in connection with the asset / liability transaction as per 31 December 2021.

Note	2021	2020
In thousands of euro
Liabilities due to related parties	185	297
Trade payables third parties	220	-
Income tax payable	-	-
Other taxes	18	-
Accrued expenses	42	7
Current account group companies	12	-
Current part of non-current liabilities	288	14
Total trade and other payables	765	318

40. Revenue

The Company generates revenue through charging management fee to its subsidiaries and rental charges for the use of the facilities. As per the asset / liability transaction in 2020, the buildings have been disposed of. Revenue in 2020 relates to charges to group companies. This revenue has been realised within the EU. For consolidation purposes this is all eliminated. As the group companies in 2021 have been established and acquired in 4th quarter no rent and/or management fee has been charged. In 2022 charges to group companies will commence.

Note	2021	2020
Total In thousands of euro
Management fee	-	1,107
Rent	-	580
Total trade and other payables	-	1,687

41. Operational cost

Operational consists of selling expenses and administrative expenses. Most of the expenses. Selling expenses can be specified as follows:

Note	2021	2020
In thousands of euro
Employee benefits employees	35	-
Marketing	274	-
Communication	71	-
Other	18	-
Total	398	-

Administrative expenses can be specified as follows:

Employee benefits of the employees can be specified as follows:

The average number of FTE during the year under review amounted to 1 FTE (2020: - FTE). All employees worked in the Netherlands. For a breakdown of the employee benefits of the board we refer to note 27 in the consolidated financial statements.

Note	2021	2020
In thousands of euro
Employee benefits of the Board	253	147
ICT	101	-
Legal and administrative advice	372	458
Travel	37	-
Depreciation	21	58
Housing	-	395
Other	12	72
Total	796	1,130

Note	2021	2020
In thousands of euro
Wages and salary	29	-
Social security cost	6	-
Other	-	-
Total	35	-

42. Net finance result

The revenue income relates to the interest income on the loan note due by major shareholder the PAN Foundation. In 2021 interest In 2021 interest cost from group companies relates to the interest cost allocated to the amounts payable in connection with the acquisition of GFI. The interest cost in 2020 to related parties relates to the loan notes with Majka Investment B.V., Ama Invest B.V. and Madre Invest B.V. The loan notes have been redeemed in the asset / liability transaction. The interest cost in connection with the convertible loan notes consist of the effective interest rate on these convertible loan notes. Other interest costs mainly relate to interest on leases and bank charges.

Notes	2021	2020
In thousands of euro
Interest income under the effective interest method on:
- Interest income from participants	173	64
Total interest income arising from financial assets	173	64
Financial liabilities under the effective interest method on:
- Interest cost from other loans to group companies	(12)	-
- Interest cost from related parties	-	(127)
- Interest cost from convertible notes	(21)	-
- Other interest and cost	(7)	(32)
Total interest cost arising from financial liabilities	(40)	(159)
Net finance result recognised in profit or loss	133	(159)

43. Income taxes

Amounts recognised in profit or loss

	2021	2020
In thousands of euro
Current tax expense
Current year	-	(245)
Changes in estimates related to prior years	-	-
Deferred tax expense
Origination and reversal of temporary differences	-	91
Reduction in tax rate	-	-
Recognition of previously unrecognised tax losses	-	-
Recognition of previously unrecognised (derecognition of previously recognised) deductible temporary differences	-	-
Tax expense on continuing operations	–	(154)

Reconciliation of effective tax rate

	2021	2021	2020	2020
In thousands of euro
Profit before tax from continuing operations	(1,042)		462
Tax using the Company’s domestic tax rate		261	25%	(116)
Reduction in tax rate		(104)	10%	17
Tax effect of:
- Not recognised taxable losses carried forward		(157)	15%	-
- Other items		-		(55)
		0.0%
	(154)	33,3%

Movement in Deferred tax liabilities
Deferred tax assets

As per 31 December 2021 the Group had significant carried forward losses. The Deferred tax assets have not been recognised because it is not probable that future taxable profit will be available against which the Group can use the benefits therefrom in the foreseeable future. All deferred tax liabilities have been derecognised because of the asset/liability transaction in 2020.

	1/1/2020	Recognised in profit or loss	31-12-2020	Movements	31-12-2021
In thousands of euro
Land and buildings	91	(91)	-	-	-
Total	91	(91)	-	-	-

44. Commitments

46. Subsequent events

During 2020, the Group engaged Quadriz to perform services as described hereafter amounting to USD 200 thousand per year for a period of 3 years. Quadriz will source, and negotiate against specific, agreed upon criteria, native forest land for DGB’s acquiring. Quadriz will further facilitate negotiations on price and all due diligence related work for the considered land for acquisition. Quadriz shall be responsible for all cost in relation to its sourcing and negotiation activities. DGB shall be responsible for all costs related to the actual land transaction and the land ownership related costs, such as, but not limited to, legal fees, notary fees and outside consulting fees where required. Quadriz may invoice DGB a yearly reimbursable retainer fee of up to a maximum of US$ 200,000. All paid retainer fees must be reimbursed to DGB from the VCU sales generated by Quadriz on the sourced properties.

Completion of its first large offtake agreement
As announced on 30 December 2021, the Company signed its first large offtake agreement for up to 128,000 tonnes of VERs with a contract price of US$10 per tonne with a multinational energy company. On March 2nd, 2022 the Group completed its first large offtake agreement for verified emission reductions that generated revenues for the Group in Q1 2022 of approximately EUR 1.1 million. The Company confirms that the verification procedures have been completed and that 126,297 tonnes of VERs, which originated from a reforestation investment project in Sierra Leone, have now been issued and delivered to the buyer.

Start of two carbon projects in Kenya (8.8 million carbon credits)
On November 1, 2021 DGB announced both Kenia carbon projects have passed the feasibility studies. After the pre-roll out, operations have now commenced and the Gruop´s carbon team is in Kenya to start the nurturing of seedlings and the project certification process. On March 22nd, 2022 the Group committed to further development of the projects. The total development costs by the Group over the next 3 years are EUR 7.4 million for both projects.The DGB Hongera Afforestation Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 7.0 million credits over its 30-year project lifetime (approximately 225,000 carbon credits per annum).

About DGB Carbon Markets Governance Financial reporting

The Hongera Energy Efficient Cookstove Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 1.8 million credits over its 6-year project lifetime (approximately 300,000 carbon credits per annum).

The Group plans to finance these projects through a) entering into long-term offtake agreements for future credits, b) reinvesting most of the carbon credit revenues from running projects into new project developments; and c) offering project-specific investment opportunities to investors, such as its green impact bonds.

Start of two carbon projects in Cameroon (6.9 million carbon credits)

On November 1, 2021 the Company announced the two carbon projects in Cameroon have passed the feasibility studies. After the pre-roll out, operations have now commenced and the Greenzone team in Cameroon to start the nurturing of seedlings and the project certification process. On April 4th, 2022 DGB committed to further development of the projects. The total development costs by the Group over the next 3 years are EUR 5.6 million for both projects.

The DGB Cameroon Afforestation Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 5.1 million credits over its 30-year project lifetime (approximately 175,000 carbon credits per annum).

The Sawa Cookstove Project, for which the Group has the right to receive 100% of the carbon credits originated and has exclusive carbon and marketing rights, is expected to create over 1.8 million credits over its 6-year project lifetime (approximately 300,000 carbon credits per annum).

The Group plans to finance these projects through a) entering into long-term offtake agreements for future credits, b) reinvesting most of the the carbon credit revenues from running projects into new project developments; and c) offering project-specific investment opportunities to investors, such as its green impact bonds.

Receivable Foundation

The Company has a receivable on PAN Foundation. In the second half of 2021 the Company entered into negotiations with PAN Foundation and agreed to extend the loan until 30 June 2022 with an interest of 3% under certain conditions. DGB has received a significant repayment of the loan in March, April and May 2022. In addition the Company still intends to repurchase a portion of shares held by PAN Foundation. The Board of Directors may at any time repurchase DGB shares from the PAN Foundation at a discount of 10% on the average share price of the last 30 days with a minimum price of EUR 1, as soon as the Company has obtained a purchase authorization from shareholders at the AGM after publication and adoption of the annual results for 2021.

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About DGB Carbon Markets Governance Financial reporting

Other Information

Articles of association provision regarding profit appropriation in accordance with Article 18

From the profit, as appearing from the adopted annual accounts, first of all, insofar as possible and with due observance of the provisions of Article 18.5, a distribution is made on the preference shares and the priority shares at the percentage referred to below of the percentage from time to time in the course of the the amount paid up on those shares in the financial year concerned. The dividend on the preference shares and the priority shares will only be paid over the number of days that such shares were actually outstanding in the relevant financial year. The percentage referred to above is equal to the average value of the Average Refinancing Interests during the financial year in which the payment is made, increased by two and a quarter percent (2.25%). Average Refinancing Interest means the average value of the Refinancing Interests applicable on each separate day of the financial year over which the payment is made. Refinancing rate is understood to mean the rate of the Main Refinancing Operation, which is regularly determined and published by the European Central Bank. No further profit distributions will be made on the preference shares and priority shares. If and insofar as preference shares are issued from the reserves of the company, the preference shares are not entitled to the profit for a period of three years after issue.

The profit remaining after application of Article 18.1 is at the disposal of the board for reservation in whole or in part.

The profit remaining after application of Article 18.2 shall be at the disposal of the general meeting, either wholly or in part, for distribution to holders of ordinary shares in proportion to their holdings of ordinary shares.

Distributions charged to the company’s distributable reserves are made pursuant to a resolution of the general meeting on the proposal of the management board.

The company may only make distributions insofar as its equity capital exceeds the amount of the paid-up part of the capital, increased by the reserves that must be maintained by virtue of the law or the articles of association.

The general meeting may resolve to make interim distributions if the requirement of Article 18.5 has been met, as evidenced by an interim statement of assets and liabilities drawn up with due observance of the provisions of Article 2:105 of the Dutch Civil Code.

The board is authorized to determine that a distribution on shares will not be made in cash but in the form of shares or to determine that holders of shares will be given the option of taking the distribution in cash and/or in the form of shares , all this from the profit and/or from a reserve and all this insofar as the board has been designated by the general meeting in accordance with the provisions of article 6. The board will determine the condition for such a choice.

Distributions on shares are payable within four (4) weeks after the resolution to distribute, unless a different time is specified in the resolution.

On shares held by the company in its capital or depositary receipts thereof, no distribution will be made for the benefit of the company. In calculating the amount of any distribution on shares, the shares in its capital held by the company are not included.

18.1
18.2
18.3
18.4
18.5
18.6
18.7
18.8
18.9
18.10

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About DGB Carbon Markets Governance Financial reporting

Absence of Auditors’ Report

There are only six audit firms in the Netherlands that can issue an auditor’s report to listed companies. Given the relatively small size of the Group, it is difficult to find an audit firm that is willing to perform the statutory audit. The Group has therefore issued its Annual Report without an auditors’ report.

Shares without voting rights

As per 31 December 2021 the company holds 1,299,842 treasury shares. Treasury shares held by the Company have no voting rights.

Rotterdam, the Netherlands, 24 May, 2022

Board of Directors

S.A.M. Duijvestijn, CEO

197
Sustainability Reporting

198
About DGB Carbon Markets Governance Financial reporting

Strategy, governance, and stakeholders

DGB wants to contribute proactively to solving customer and stakeholder sustainability issues and to deliver value, looking at how positive impacts can be accelerated. DGB recognises the need to stay within planetary boundaries. In 2021, DGB started the development of a new sustainability framework that replaced the old agenda. The new framework is well suited to driving new opportunities and future-proofing the Group’s business in a constantly changing environment – at an ever-accelerating pace. In 2021, DGB defined related principles to drive product innovation, guide our crucial business processes and work with customers and other stakeholders. The new sustainability framework builds on a solid foundation of responsible business practices and is scheduled to be implemented in 2023. DGB acknowledges the importance of the United Nations Sustainable Development Goals (SDGs) as part of a commonly agreed global ambition to end poverty, protect the planet and improve the lives and prospects of everyone, everywhere. At DGB, sustainability is owned by the Board of Directors, the President and CEO (CEO), and the Group Leadership Team (GLT). The CEO has ultimate responsibility for the successful implementation of the Group’s sustainability strategy. The Board of Directors’ Sustainability and Ethics Committee oversees the implementation of DGB’s sustainability strategy and the ethics and compliance strategy. DGB’s Sustainability Policy describes the Group’s overall approach to sustainability. In 2021, ESG reporting will be combined with DGB’s Annual Report.

199
About DGB Carbon Markets Governance Financial reporting

Stakeholder engagement

Significant stakeholder groups for DGB include:

Open dialogue with key stakeholders is crucial to identify concerns, global trends and market expectations successfully and proactively. DGB’s stakeholder engagement work is based on both structured and ad hoc interaction, as well as on regular surveys on topics such as customer and employee satisfaction and investor expectations. The company also obtains important information through formal grievance channels. Engaging with stakeholders on social media also supports us in understanding their opinions and concerns locally around DGB’s units, as well as on a divisional and Group level.

Materiality

DGB acknowledges the concept of double-materiality in its sustainability strategies and reporting. Topics that are considered to present the most significant financial risks and opportunities for DGB are highlighted: climate change, biodiversity and circularity.# About DGB

Carbon Markets

Governance

Financial reporting

Our sustainability targets and key performance indicators (KPIs)

Emissions & Energy

Contributing to a low- carbon economy

DGB’s carbon footprint

DGB’s products help customers and society at large to reduce CO2 emissions by providing carbon credits and achieve net zero. DGB has a proactive and holistic approach to decrease the use of fossil fuels and reduce direct and indirect fossil CO2 and other emissions. This can create new business opportunities and help manage the Group’s costs and risks.

In 2021, 100% of the total direct CO2 emissions from our own operations were carbon neutral, originating from our own carbon projects.

In 2021, direct emissions from operations (scope 1) accounted for 21% of DGB’s carbon footprint, while emissions related to electricity and heat purchased for use in operations (scope 2) accounted for 2% of the total carbon emissions. An estimated 77% of the emissions in the carbon footprint were generated elsewhere along the value chain. The majority of these scope 3 emissions were generated in: the sourcing and manufacturing of raw materials and services (34% of the scope 3 emissions); the further processing of products by customers (48%); and in the transportation of raw materials to the mills and of nal products to customers (18%).

To identify potential for further reducing emissions in scopes 1, 2, and 3.

Energy

Water

Detailed carbon reporting

Most of DGB’s production processes are not energy intensive. We use renewable energy where possible. DGB is currently assessing its energy use policy and energy management systems and will focus on this in its new policy to be implemented in 2023

DGB is currently assessing its water use policy and water management systems and will focus on this in its new policy to be implemented in 2023.

DGB’s carbon footprint accounting is based on guidelines provided by the Greenhouse Gas Protocol of the World Resource Institute (WRI) and the World Business Council for Sustainable Development (WBCSD).

In 2021, DGB continued to have the reporting of its direct and indirect fossil CO2e emissions (Scopes 1 and 2).

Emissions from transportation

The GHG emissions generated during the transportation of raw materials and products, which is the most signicant environmental impact associated with the Group’s logistical operations, are mainly produced by external service providers. In 2021, transportation accounted for 18% of DGB’s Scope 3 emissions.

In the transportation of our products, sea transport accounted for approximately 67% of CO2 emissions, while road and rail transportation accounted for 31% and 2% respectively.

Sustainable forestry

DGB breeds trees for future forests to improve growth and resilience while maintaining genetic diversity and other sustainability qualities. Tree breeding, in other words crossing two selected elite parent trees within a breeding population to create a new generation with improved properties, is an important way of improving forest growth. Trees can be bred for increased growth, better adapted to the environment, and more resilient to diseases, storms, drought, and pests.

We have ongoing strategic tree breeding programmes for all our nurseries and plantation units. In all breeding programmes, genetic diversity is monitored and maintained by having several and suciently large breeding populations and avoiding the crossing of related parents.

In Africa, where DGB manages approximately 5000 hectares of land, seedlings for regeneration sites are delivered from three DGB-owned nurseries in central Kenya. In the nurseries, we produce superior seedlings for next-generation forests.

DGB has ongoing research and development work in genetic engineering. As with traditional clone improvements, developing genetically engineered clones for commercial use will take many years. DGB will not carry out any tree planting considered unsafe or otherwise not permitted by the authorities.

DGB’s policies cover the entire cycle of forest and tree plantation management. The policy requires sustainable forest management through responsible sourcing and land use – to safeguard the health and ecological functions of ecosystems and help conserve biodiversity, soil and water resources. To achieve this, DGB maintains a continuous open dialogue with its stakeholders.

Materials, residuals, and waste

Reduced waste, maximum value

Environmental management and remediation

Paper for Recycling

Among the global megatrends impacting societies, markets and businesses, biodiversity extinction is the greatest challenge of our time. Consumers, legislators, companies and nancial institutions focus on raw materials, CO2 emissions, circularity and waste reduction. Moreover, governments worldwide are increasingly regulating the use of fossil-based materials such as plastics.

As a large-scale project developer of nature- based solutions, DGB operates at the heart of this sector and contributes to a circular economy. In a circular economy, more is made from less, and waste is minimised as materials are reused and recycled to maximise their value. The Group works to achieve this through circular material ows in its value chain while reducing its waste to landll process to as close to zero as legally, technically and commercially possible.

Local environmental stewardship work, supported by third-party ISO 14001-certied environmental management systems, ensures continuous improvements in the most prioritised environmental issues, including remediation.

The Group’s use of recycled paper and board has decreased over recent years following the company strategy to focus on growing business and an overall decline of the paper market.

Water

eciency, Water quality, euents and water stress

Mitigating impacts on the environment

Responsible water use

DGB’s strategic water goals aim to reduce the impact on the sites’ water sources. Water is recycled within sites when possible. To reduce the need for water intake, processed water is minimised, and it is cleaned using the best available technologies. The amount of water needed at DGB’s carbon projects is not directly related to the production volumes of carbon credits.

DGB’s approach to water stewardship is built upon assessment of local conditions at sites and in the water basins where it operates; mapping water use to identify potential for savings; setting goals according to group KPIs and local priorities; investments; measuring performance, and communicating and engaging with stakeholders. DGB’s sites set their quantied water targets based on their local context as part of their environmental management systems. DGB applies precautionary management actions to mitigate and remedy potential adverse impacts on the environment and people. The environmental work at DGB’s sites, including water management and resource eciency, is supported by certied third-party environmental management systems.

Water is relatively abundant in most of DGB’s production locations, and water stress may still impact operations locally and through the Group’s wider supply chains. Some sites are occasionally impacted by water stress regarding availability or increased surface water temperature. Another potential risk is ooding.

Water stewardship is considered of increasing importance and provides opportunities to reduce costs by using water and energy more eciently. Sustainably managed forests and plantations have a key role in maintaining natural water cycles. Forests and plantations need rainwater for growth, and active water management in plantations contributes to positive eects on the total water balance and water storage, purity and quality.

DGB mainly withdraws process and cooling water from surface waters. After use, the process water is cleaned in treatment plants before discharging it back into the local environment.

Environmental incidents

Employees

Change through people

An inclusive workplace

Leadership and performance management

DGB’s objective is to have no environmental incidents, but unexpected process events can occasionally result in temporary breaches. In 2021 no environmental incidents occurred.

DGB promotes inclusion and diversity and is committed to ensuring healthy and safe workplaces. DGB is an equal rights and equal opportunity organization. In realising the Group’s strategy, DGB’s business success will depend on its ability to retain, develop and attract new talent for its businesses. DGB’s employees identify strongly with its purpose to solve global sustainability challenges, an asset the Group builds on when attracting new talent.

DGB continuously invests in the development of its leaders. During 2021, DGB continued to run its training programme for rst-line managers. The programme supports the managers in developing their leadership skills to drive the Group’s goals. DGB believes that a good workplace is one where everyone feels they are treated fairly and with respect, where their uniqueness is appreciated and where they feel a sense of belonging and that their opinions matter. DGB has zero tolerance for discrimination, harassment and bullying.

In 2021 DGB started to digitise its employee engagement approach. DGB aims to involve all of its employees in at least one formal performance appraisal meeting with their manager each month. Managing the performance of its employees is an important part of engaging and motivating the Group’s workforce.# DGB sets and communicates clear targets for its employees, helps them understand how they contribute to the company’s success, discusses and agrees on development needs and desires, and oers opportunities to receive and give feedback regularly.

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About DGB

Carbon Markets

Governance

Financial reporting

Support in restructuring situations

DGB plans to conduct a living wage analysis starting in 2023, using the comparison data and methodology provided by BSR, a global non-prot organisation. In 2021, as many as 95% of the Group’s employees and contractors will be located in Kenya, Cameroon, Uganda, Tanzania and India. DGB cares for all its employees and fully respects human rights throughout its operations. In organisational restructuring situations, it is important that the impacted employees understand the reasons for the change. DGB’s ambition is to support leaving employees in nding work elsewhere. Support initiatives are often developed on a country or local level to best suit the local circumstances and requirements. Every employee is treated with respect and has access to support throughout the restructuring process.

Living wages

Fair labour

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About DGB

Carbon Markets

Governance

Financial reporting

Safety

Committed to ensuring healthy workplaces

Safety during a global pandemic

Contractor safety

Occupational safety

Focus on preventive action

The health and safety of DGB’s employees are a key priority. The Group’s goal is to provide an accident-free and inclusive workplace. During Covid-19 and the government measures, DGB managed to nd a way to protect both its employees and customer interests by continuing to adhere to the national and local authorities’ recommendations and leveraging a hybrid model of working. Following ocial recommendations and careful planning has ensured the Group’s maintenance turnarounds during the year were successfully executed without any Covid-19 escalations. To ensure that DGB’s employees are well informed and to support their wellbeing, the Group has regularly communicated about the situation and its response to Covid-19 throughout the year. In addition, remote working has been recommended and supported for DGB’s employees when possible. Regarding occupational health, DGB measures illness-related absence, focusing on encouraging units to invest in proactive health management. In 2021, illness-related shortages amounted to 0.2% of the maximum theoretical working hours of the Group’s employees. DGB’s approach to safety also covers work performed on behalf of DGB. The process starts as early as the tendering phase and, after selection, enters a full safety life cycle. This involves setting and reviewing expectations and requirements for and reviewing the performance of our supply chain partners. A company-wide safety culture means that everyone is responsible for making every workday healthy and safe – starting with the Group’s top management and throughout the company. Providing a safe working environment and operational integrity is under constant review and improvement at DGB, based on international standards, but with an ambition beyond mere compliance. Safety is on the agenda at every level, from the Board of Directors down to the local units, with active collaboration between divisional and functional representatives, centralised functions in the Group’s safety steering group, safety management team, and geographical safety management networks. DGB actively engages all stakeholders for co-creation in safety by sharing learnings, good practices, training and tools, etc. This cooperation also extends to joint ventures in Africa.

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About DGB

Carbon Markets

Governance

Financial reporting

Business ethics

DGB operates globally, including in high-risk markets that oer business opportunities but may entail exposure to serious compliance risks. Measures are taken to help combat corruption, follow international trade sanctions, ensure sound business practices and preserve competitive markets. Laws and regulations place high demands on companies’ control mechanisms and help build accountability and trust among stakeholders. Compliance with laws and regulations gives a company its licence to operate. DGB aims to establish a value-driven culture where people are guided by a shared moral compass when faced with dicult decisions, act with integrity and speak up against misconduct or unethical behaviours. Risk assessments, control processes, and comprehensive monitoring are fundamental to any compliance management system. Employees and other stakeholders are encouraged to report suspected cases of misconduct or unethical behaviour. All potential non-compliance cases involving a DGB employee or a contracted third party are duly investigated by a dedicated, independent and well- governed internal organisation. Cases are reported to the Ethics and Compliance Management Committee and the Board of Directors’ Sustainability and Ethics Committee. Proven cases of non-compliance may lead to disciplinary or legal action. Reporting is done via any of DGB’s grievance channels, personal contact, e-mail, letter, phone or anonymously. No potential non-compliance cases were reported in 2021. DGB’s Ethics and Compliance function is a part of Group Legal, headed by the Director of Establishment, who reports directly to the CEO. The Ethics and Compliance Management Committee, a governance body Chaired by the General Counsel, monitors legal compliance and ethical business conduct continuously and meets quarterly.

An ethical approach beyond compliance

Identifying and monitoring compliance risks

Reporting, investigating, and addressing suspected misconduct

A governance framework meeting future ethics and compliance challenges

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About DGB

Carbon Markets

Governance

Financial reporting

Human rights

Community

Many of the human rights challenges DGB faces are deeply rooted in local communities and can only be eectively addressed through a long-term commitment to and close cooperation with global and local stakeholders. In 2021, EU regulations embedding human rights were presented for companies’ consultation or implementation, for example, the Corporate Sustainability Reporting Directive (CSRD), the EU Whistleblower Directive and the Directive on Corporate Due Diligence and Corporate Accountability. DGB supports human rights regulations that put companies in equal standing and help to ensure that people are treated with decency and respect. When DGB sources its main materials and land for its projects, it depends on local communities for its workforce and a social licence to operate. In its eorts to be a good corporate citizen, DGB supports and works with these communities to help them thrive economically, socially and environmentally. Covid-19 has demonstrated how important, although challenging, community engagement can be in times of crisis. While DGB is a signicant employer, taxpayer and business partner in many communities, the company’s operations also generate environmental and social impacts. DGB’s projects inuence land use in ways that may adversely aect the rights of local communities. The company’s actions must be managed responsibly to minimise negative socio-environmental impacts, maximise positive inuence, and maintain a constructive community dialogue that ensures a long-term licence. The form and frequency of our engagement with local communities are shaped by the local context. In some areas, community representatives do the interaction, while other communities prefer direct and inclusive contact. Many of our employees live in the communities and have a deeper understanding of the local context. DGB involves local stakeholders in the planning process of its community investments to ensure benets for communities. The company also wants to enhance the resilience and attractiveness of existing and potential employees of its communities. Community projects are managed and funded locally to ensure that the communities close to its operations are the main beneciaries.

Developments in human rights regulation

Supporting community resilience

Working with communities through local projects

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About DGB

Carbon Markets

Governance

Financial reporting

Sustainable sourcing

As a company with suppliers worldwide, DGB can help global supply chains become more sustainable. However, reaching a comprehensive understanding of a supplier’s sustainability performance, including their potential impacts on human rights, remains a challenge, even with strict sourcing processes and criteria. The Covid-19 pandemic has brought uncertainty to business and supply chains globally. DGB will continue proactively monitoring and responding to the pandemic to ensure minimal impact on our ability to purchase materials and services, serve customers and run operations. DGB runs sourcing and logistics operations in various regulatory environments. Current developments in national and EU-level legislation on supply chain due diligence, for example, may aect the way the company conducts sourcing and logistics activities in the future. In addition, DGB responds to stakeholder demands concerning supply chain transparency and renewable raw materials. Bypassing on these requirements to direct suppliers, the company can drive positive change further in supply chains.

Promoting supply chain sustainability

212

Dutch Green Outlook

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About DGB

Carbon Markets

Governance

Financial reporting

Short-term Outlook

Businesses and individuals are increasingly engaged... DGB plans to expand its carbon credits project pipeline from 13 million credits to over 20 million tonnes of carbon credits in H2 2022. DGB expects further increase in its binding otake agreements. DGB expects to launch its state-of-the-art cloud-based online habitat banking platform for biodiversity credits and tailor-made wilde life credits in H2 2022.# DGB Carbon Markets Governance Financial reporting

DGB expects to actively open up the carbon market to more investors with an offering that combines existing nature-based solutions with an easy-to-understand carbon and biodiversity trading platform. ...in improving their sustainability footprint and reduce their carbon emissions. On a local, regional and international level there is rising demand for innovative green products and a need for solutions in the areas of carbon capture, agriculture, nature conservation and biodiversity. In 2021 DGB has entered into its first binding carbon credit offtake agreements pursuant to which DGB committed to offset carbon emissions for various customers. We look forward to increasing the amount of offtake agreements and growth in revenue in 2022. DGB has a strong project pipeline and is well placed to participate in all of these relevant areas, and as such, its outlook is positive.

Long-term Targets

DGB intends to play a leading role in putting nature conservation, biodiversity, and ecosystem restoration on the agenda of decision-makers, policymakers, and elected officials worldwide while growing its business in line with the Groups strategy. The following international targets are pursued and promoted by DGB:

• By 2030, achieve a 25% increase in the number of public and private organisations who participate in nature and biodiversity conservation activities.
• By 2030, achieve a 25% increase in employment and participation of regional communities in nature and biodiversity conservation.
• By 2030, achieve a national increase of 600,000 km2 of native habitat managed primarily for nature and biodiversity conservation across terrestrial, aquatic and marine environments.
• By 2030, 1,000 km2 of fragmented landscapes and aquatic systems are being restored to improve ecological connectivity.
• By 2030, reduce by at least 10% the impacts of invasive species on threatened species and ecological communities in terrestrial, aquatic and marine environments.
• By 2030, play a leading role in internationally agreed science and knowledge priorities for nature and biodiversity conservation are guiding research activities.
• By 2030, review relevant legislation, policies and programs to maximise alignment
• By 2030, establish a national long-term biodiversity monitoring and reporting system.

Terminology & Definitions

A

• Additional Offsets - Carbon Offsets that would not have occurred if the project had not been implemented.
• Afforestation - planting new forests in habitas that previously did not have any trees.
• AFM - Dutch Authority for the Financial Markets
• AFOLU - Agriculture, Forestry and Other Land Use. AFOLU is category of carbon projects under various verification standards.
• AGM - Annual General Meeting of Shareholders.
• CAGR - Compound annual growth rate. This rate is calculated as the value at the end of the period divided by the value at the beginning of the period, compounded by the respective period.
• California Cap and Trade Scheme - The California Cap and Trade Program is administered by the Western Climate Initiative (WCI) and controlled by the California Air Resources Board. Both jurisdictions’ allowances can be used for compliance. The cap and trade scheme includes major electric power plants, large industrial plants, and gasoline distributors, among other sectors.
• Biodiversity Credit - A biodiversity credit is an innovative approach to quantifying in a transparent way the net positive impacts of an investment on 1 hectare preserved, restored, or managed through sustainable land practices.
• Blue Carbon - Blue carbon is the carbon absorbed and deposited in biomass and sediments by living organisms in coastal (e.g., mangroves, salt marshes, seagrasses) and marine environments.
• Cap and Trade - A regulatory procedure puts a cap on the amount of greenhouse gas emissions that companies can emit. Firms that come in under their limitations have the option to trade (sell) their excess emission permits to other companies that have exceeded their limit.
• Carbon Allowances - Permissions (credits) to release greenhouse gases for participants in a controlled carbon market.
• Carbon Broker - Middlemen who do not hold carbon credits but enable transactions between project developers and end-users, merchants, and retailers.
• Carbon Budget - The maximum amount of CO2 that the world can release while still having a reasonable probability of keeping warming below the 2°C goal in the Paris Agreement.
• Carbon Calculator - An online tool that calculates the carbon footprint based on energy use, driving and flying habits, food, trash, recycling, and other factors.
• Carbon Credit (Carbon Offset) - A monetary value is ascribed to reducing or offset greenhouse gas emissions; this is a general term for any tradable certificate or permits reflecting emissions reductions. Equal to the offsetting of one tonne of carbon dioxide or carbon dioxide equivalent.
• Baseline - The scenario reasonably represents the emissions by sources of GHGs that would occur in the absence of the project.
• Baseline Study - Written report of the Baseline prepared as part of the Project Design Document.

C

• Carbon Cycle - People and animals (source) use respiration to turn oxygen into carbon dioxide. Plants (sinks) absorb CO2 and release it back into the atmosphere. Over the seas, oceans both produce (source) and absorb (sink) carbon dioxide. Dead organic matter traps carbon underground in various forms, such as fossil fuels (sink), while volcanic eruptions (source) can release CO2 from carbonate rocks deep inside the Earth. This is the Carbon Cycle.
• Carbon Footprint (CO2 Footprint) - The quantity of carbon dioxide emitted into the atmosphere due to any given entity’s actions. Individuals, corporations, and even nations can have a carbon footprint.
• Carbon Market - A marketplace that treats emissions reductions as a commodity, where participating members can buy and sell carbon credits.
• Carbon Neutral - Often known as having a net-zero carbon footprint, this is achieved by either reducing carbon emissions to zero or balancing a measurable quantity of carbon emitted with an equivalent amount offset.
• Carbon Sink - A carbon sink is any natural or manufactured reservoir that collects and stores any carbon-containing chemical component indefinitely, lowering CO2 concentrations in the atmosphere. The most important carbon sink on a global scale in the ocean.
• Carbon Source - Any source of carbon dioxide or equivalent greenhouse gases. People and animals, as well as seas and volcanic eruptions, are all-natural carbon sources. Carbon emissions from human-caused sources include the use of fossil fuels, automobile exhaust, deforestation, and manufacturing, building, and mining activities.
• CCBS - Climate, Community & Biodiversity Standard. A project design, co-benefit certification standard of the voluntary carbon market.
• Certification - Certification means the official declaration according to the procedural requirements of a standard that the object of evaluation is in compliance with the requirements of such standard
• Climate Change - As defined by the UN Framework Convention on Climate Change, climate change is: “a change of climate which is attributed directly or indirectly to human activity that alters the composition of the global atmosphere and which is in addition to natural climate variability observed over comparable time periods”. In other words, in most contexts, climate change refers specifically to anthropogenic climate change, and not the Earth’s natural climate cycles. This includes both global warming as well as extreme weather events.
• CO2 - Carbon Dioxide. A heat-trapping gas composed of two parts carbon and one part oxygen.
• CO2e - The globally accepted standard measure of greenhouse gas emissions, and it permits other greenhouse gas emissions to be represented in terms of CO2 based on their proportional global warming potential (GWP).
• Compliance Carbon Market - Compliance carbon markets, also known as mandatory markets, are governed by national, regional, or provincial law and compel emission sources to meet legally mandated GHG emissions reduction targets. Because compliance program offset credits are generated and traded for regulatory compliance they typically act like, and are priced like, other commodities.
• COP (COP26, COP27) - The annual Conference of the Parties, also known as the United Nations Climate Change Conference. It’s the decision-making body of the United Nations Framework Convention on Climate Change (UNFCCC) and includes over 190 countries.

D

• CORSIA - The Carbon Offsetting and Reduction Scheme for International Aviation (CORSIA) was developed by the International Civil Aviation Organization (ICAO) and was adopted in October 2016. Its goal is to have carbon-neutral aviation growth from 2020. The scheme is voluntary and is supposed to work until 2035 at least. The total demand for those 15 years is estimated at 2,700 million tons of CO2 equivalent in offsets
• CTA - Currency translation adjustments
• DCF - Discounted cash flow
• Dividend pay-out ratio - The dividend pay-out ratio is calculated as the sum of the interim and (proposed) final dividend for the year as a percentage of the net profit for the year.
• Double Counting - Double Counting means that the same GHG Reductions generated by an activity are claimed by two separate entities for the purpose of demonstrating GHG emissions reductions.
• Due Diligence - Technical assessment related to the feasibility of implementing potential emission reduction.

E

F

G# Glossary

A

EBIT - Earnings before interest and taxes (operating income)

EBITDA - Earnings before interest, taxes, depreciation and amortisation

EPS - Earnings per share. The earnings per share are calculated as the total net profit for the period divided by the (weighted) average number of ordinary shares outstanding.

Equity per share - The equity per share reflects the Company’s equity allocated to each outstanding share of common stock and is calculated by dividing the total shareholders’ equity by the total number of ordinary shares outstanding at year-end.

EU ETS - EU Emission Trading Scheme (EU ETS). With about 45% of EU greenhouse gas emissions covered by the EU ETS, it’s the world’s largest cap and trade scheme. Emissions from heavy industry, electricity generation, and aircraft in the EU are covered by this programme implemented in 2005.

Fossil Fuels - Fuels derived from hydrocarbon deposits formed by fossils, such as coal, oil, and natural gas. The combustion of these products, for example in car engines or coal-fired power plants, produces greenhouse gases like carbon dioxide.

FTE - Full-time equivalent

FX rate - Foreign exchange rate

GAAP - Generally accepted accounting principles

GHG - Gases that trap heat in the atmosphere. Carbon dioxide, methane, nitrous oxide, and fluorinated gases are the primary greenhouse gases. See also: Carbon Dioxide Equivalent.

GHG Reduction - GHG Reduction means the avoidance, limitation, mitigation, reduction, removal or sequestration of GHGs relative to

About DGB Carbon Markets Governance Financial reporting

Gold Standard - Verified Carbon Standard (GS VER). A non-governmental emission reductions project certification scheme. It participates in the Clean Development Mechanism (CDM), the Voluntary Carbon Market, and many climate and development initiatives.

Greenwashing - The use of false or misleading promotion and marketing to exaggerate an organization’s environmental or sustainable activities.

GRI - Global Reporting Initiative

GWP - Global Warming Potential (GWP). A scientific measure that compares how harmful each greenhouse gas is to the atmosphere, in terms of how long they stay there and how much heat they trap, relative to carbon dioxide. See also: Carbon Dioxide Equivalent.

IAS - International accounting standard

IFRIC - International Financial Reporting Interpretations Committee

IFRS - International Financial Reporting Standards

Kyoto Protocol - A global accord signed in 1997 that aimed to decrease greenhouse gas emissions. The phrase carbon credit appeared for the first time in the Kyoto Protocol. The Kyoto Protocol would later be superseded by the Paris Agreement.

Leakage - When a reduction in emissions from a carbon offset project in one location produces a rise in emissions in another area. For example, when preserving a forest in one region transfers logging activities to another area of forest.

LUC - Land Use Change (LUC). Changes in how a particular area of land is used or managed. For instance, land use change is one of the primary reasons why the Amazon rainforest has gone from being one of the world’s largest natural carbon sinks to becoming a carbon source instead.

Mandatory (Compliance) Market - Mandatory (compliance) markets are governed by national, regional, or provincial law and compel emission sources to meet GHG emission reduction targets. Because compliance program offset credits are generated and traded for regulatory compliance, they typically act like other commodity pricing.

Market capitalization - Market capitalization reflects the total market value of all the Company’s outstanding shares and is calculated by multiplying the total shares issued by the share price at period-end.

Monitoring - Monitoring means the activities of collecting and recording data necessary for carrying out the Verification in accordance with the Standard and Supplementary Requirements.

Net Zero (Netzero) - A condition in which greenhouse gases emitted into the atmosphere are balanced by the amount of greenhouse gases being removed from the atmosphere. See also: Carbon Neutral.

About DGB Carbon Markets Governance Financial reporting

Paris Agreement - An international treaty on climate change that superseded the Kyoto Protocol. Signed in 2016, the agreement has been ratified by all but six countries in the world. The long-term goal of the Paris Agreement is to keep global warming below 2°C, and the treaty contains various provisions to enforce this target.

PDD - Project Design Document or PDD or PD means the description of the Project which is used as the basis for Validation, in its latest version as from time to time amended. The PDD shall be per the PDD form authorised for use by the Standard. This shall not preclude the inclusion of supplementary information into the PDD.

Project Documents - Project Documents means together or individually, the PDD, the Monitoring Report, the Validation Report, the Monitoring Reports, Verification Reports and all documents listed under Clause 13 or any other document as may be reasonably requested by the Buyer.

Project Implementer - Local partners that play a role in the realization of a Project.

Project Lifetime - The Project Lifetime has a minimum term of thirty (30) years, and with mutual consent, and with the consent of the respective national government where applicable, may be extended up to a maximum term of ninety (90) years.

Project Site - The location(s) on the relevant Project where activities associated with reforestation, reducing deforestation and degradation will take place.

REDD+ - Reduced Emissions from Deforestation and Forest Degradation (REDD+). Projects in areas where forests are in danger due to land-use change, resulting in reduced carbon storage. REDD+ projects aim to save these forests before they’re degraded or deforested, avoiding a worse-case scenario that leads to increased emissions.

Registration - The process of submitting Project Documents to an approved carbon registry and having the VERs issued on the registry.

Registry - Registry means a registry approved by the Standard, used to provide a permanent record of the compliance of projects and the VERs generated by these projects with the Standard, and to record title and transfers of title of the Contract Quantity or parts thereof under the Standard.

Regulated carbon market - Where members are legally obligated to reduce their emissions.

Renewable Energy - Energy derived from sources that can be naturally renewed in a relatively short amount of time. The five most common renewable sources are biomass (such as wood and biogas), hydropower, geothermal (heat from inside the earth), wind, and solar.

Retire - To permanently remove carbon offsets from the market in order to prevent them from being resold after they’ve been used up. Offsets are typically decommissioned by assigning them unique serial numbers and registering them in an official registry.

ROE - Return on equity is the net profit returned as a percentage of the (weighted) average shareholders’ equity.

About DGB Carbon Markets Governance Financial reporting

SDG - Sustainable Development Goals (SDG). The United Nations established 17 global development goals for all countries through a participatory process, elaborated in the 2030 Agenda for Sustainable Development. These goals include ending poverty and hunger, ensuring health and well-being, education, gender equality, clean water and energy, and decent work; and building and ensuring resilient and sustainable infrastructure, cities, and communities.

t CO2e - t CO2e means metric tonnes of Carbon Dioxide Equivalent.

TSVCM - The Taskforce on Scaling Voluntary Carbon Markets is a private sector led initiative working to scale an effective and efficient voluntary carbon market to help meet the goals of the Paris Agreement. The Task Force’s unique value proposition has been to bring all parts of the value chain to work intensively together and to provide recommended actions for the most pressing pain points facing voluntary carbon markets.

Scope 1 Emissions (S1) - The release of greenhouse gases into the atmosphere from sources such as buildings and operations directly owned or controlled by an organisation. For example, if a company owns a fleet of trucks, the greenhouse gases emitted by these trucks would count towards the company’s Scope 1 emissions.

Scope 2 Emissions (S2) - The discharge of greenhouse gases as a result of the electricity, heating, cooling, or steam generation required to power an organization’s buildings and other facilities. For example, if a company’s headquarters building draws power from a coal-fired power plant, a proportional amount of the emissions resulting from that coal plant’s electricity generation would count towards the company’s Scope 2 emissions.

Scope 3 Emissions (S3) - The release of greenhouse gases into the atmosphere generated as a result of an organization’s activities, but physically produced by another entity. For example, if you drive a fossil-fuel-powered car, the emissions it produces would count towards the car manufacturer’s Scope 3 emissions.

UNFCCC - UN Framework Convention on Climate Change (UNFCCC). Adopted in 1992 and made available for signing during the Rio de Janeiro Earth Summit in 1992. The ultimate goal of the Convention is to ‘stabilise greenhouse gas concentrations in the atmosphere at a level that would preclude hazardous anthropogenic influence with the climate system.’

Validation - Validation and Validated means the process of independent evaluation of the Project in accordance with the Standard and any Supplementary Requirements for Validation, confirming that the Project complies with the Quality Standard and is likely to generate the VERs described in the PDD.

Validation Report - A written report of the Validation process and results prepared and issued by the Independent Entity.# About DGB Carbon Markets Governance Financial reporting

For the purpose of this Agreement, the Validation Report shall comply with any Supplementary Requirements. The Validation Report shall confirm who is or are the owner/s of the VERs generated by the Project.

Additionality - The condition that greenhouse gas (GHG) emission reductions or removals must be additional to any GHG reductions or removals that would have occurred in the absence of the mitigation actions and that are quantifiable and verifiable.

Standard - A set of rules, requirements, and criteria established by an independent body that a carbon offset project must follow to be eligible for carbon credits.

Supplementary Requirements - Additional requirements that may be specified in an agreement or by a standard, which the Validation Report must also comply with.

Verication - An authorised third-party auditor conducts an impartial review of the carbon oset project design and baseline calculations prior to the start of project activity.

Verra - This is a certication standard for non- governmental emission reduction initiatives. It participates in the Clean Development Mechanism (CDM), the Voluntary Carbon Market, and many climate and development initiatives.

Vintage - The year of emissions reduction that a carbon credit belongs to. The vintage of an carbon credit may not necessarily match the year of the transaction, and the vintage year may even be in the future.

WACC - Weighted average cost of capital

Wta - Audit Firms Supervision Act

VCM - Voluntary Carbon Market (VCM). A carbon market in which members are not legally compelled to reduce their emissions but do so voluntarily. These markets enable carbon emitters to oset their emissions by acquiring carbon credits generated by third-party initiatives aimed at removing or decreasing GHG emissions from the environment. Companies can engage in the voluntary carbon market on their own or as part of an industry-wide program.

VCS - Veried Carbon Standard. VCS means the latest version of the veried carbon standard, a quality standard of VERs according to the requirements as is published on the website www.verra.org and any related guidance.

VCU - Veried Carbon Unit (VCU). A unit equating to one metric tonne of certied, reduced, and issued carbon dioxide equivalent emissions under the Veried Carbon Standard.

VER - VER or Veried Emission Reduction means an allowance, credit, entitlement, interest or right to emit (now or in the future) one metric tonne of Carbon Dioxide Equivalent gas and which arises from or in connection with the GHG Reductions by the Project, the VER representing a real, permanent, independently ex-post Veried GHG Reduction that is additional to what would have occurred in the absence of VER.

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Colofon

DGB is a project developer of high-quality, large-scale carbon and biodiversity projects accredited by third parties. Our goal is to help nature ourish and prosper.

DGB GROUP NV
Westplein 12
3016 BM Rotterdam
The Netherlands
www.dgb.earth
info@dgb.earth
+31108080126

DutchGreen Project Management BV
Westplein 12
3016 BM Rotterdam
The Netherlands
www.dgb.earth/projects
projects@dgb.earth

Habitat BioBank BV
Westplein 12
3016 BM Rotterdam
The Netherlands
www.habitatmarket.io
info@habitatmarket.io

GreenTech Solutions BV
Westplein 12
3016 BM Rotterdam
The Netherlands
www.biodiversity.space
info@biodiverity.space

Statix Articial Intelligence BV
Joop Geesinkweg 901
1114 AB Amsterdam
The Netherlands
www.statix.ai
info@statix.ai
+31208080825

Green Fuel Investments BV
Stationsplein 45
3013 AK Rotterdam
The Netherlands
www.corekees.com
info@corekees.com
+31103071677

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Disclaimer

This Annual report does not contain (an invitation to make an) oer to buy or sell or otherwise acquire or subscribe to shares in DGB and is not an advice or recommendation to take or refrain from taking any action.

This Annnual report contains statements that could be construed as forward-looking statements, including with regard to the nancial position of the DGB Group, the results it achieved and the business(es) it runs. Forward-looking statements are all statements that do not relate to historical fact. These statements are based on information currently available and on forecasts and estimates made by DGB’s management. Although DGB believes that these statements are based on reasonable assumptions, it cannot guarantee that the ultimate results will not dier materially from those statements that could be construed as forward-looking statements. Factors that may lead to, or contribute to, dierences in current expectations include, but are not limited to: developments in legislation, technology, tax, regulation, stock market price uctuations, legal proceedings, regulatory investigations, competitive relationships and general economic conditions.

These and other factors, risks and uncertainties that may aect any forward-looking statement or the actual results of DGB are discussed in the annual report. The forward-looking statements in this document speak only as of the date of this document. Subject to any legal obligation to do so, DGB assumes no obligation or responsibility to update the forward-looking statements contained in this document, whether related to new information, future events or otherwise.

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Join us!
contact@dgb.earth
Westplein 12, 3016 BM Rotterdam
+31 108 080 126

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