ESG Core Investments B.V.

Annual Report (ESEF) • Jan 21, 2022

Untitled 0 Annual report for the period from date of incorporation on 21 January to 31 December 2021 1 Contents Report of the Management Board Report of the Supervisory Board Consolidated Financial Statements Company Financial Statements Other Information 2 Report of the Management Board This annual report of ESG Core Investments B.V. (ESG Core Investments or the Company) for the financial year ended 31 December 2021 consists of the report of the management board of the Company (the Management Board), including the responsibility statement and other mandatory statements by the Management Board, the report of the supervisory board (the Supervisory Board), and the Consolidated Financial Statements and the accompanying notes. General ESG Core Investments B.V. is a private limited liability company incorporated under Dutch law (besloten vennootschap met beperkte aansprakelijkheid), with its statutory seat in Amsterdam, the Netherlands. ESG Core Investments was admitted to listing and trading on Euronext Amsterdam on 12 February 2021 pursuant to an initial public offering (IPO) in which it raised €250 million in gross proceeds (the Proceeds). ESG Core Investments is a Special Purpose Acquisition Company (SPAC) and aims to unlock a unique investment opportunity in Europe within industries that benefit from strong Environmental, Social and Governance (ESG) profiles. The aim is to identify and acquire a stake in a company with a clear ESG focus in the core of its business, that is preferably headquartered in North-Western Europe and is enjoying a strong competitive position within its industry, ideally based on unique technology. Since the IPO, we have been focusing on finding the right target company for our SPAC. Whilst we have reviewed, and are reviewing, multiple potential target companies, at the date of this annual report, we have not yet selected a target company that could be proposed to the BC-EGM (as defined below). We will continue our search for a business combination with a target company to be completed within the 24-month period from settlement date, being 16 February 2023 (the Business Combination Deadline) as announced in the prospectus relating to the IPO dated 11 February 2021 (the Prospectus). The resolution to effect a Business Combination shall in any event require the prior approval by a majority of at least 70% of the votes cast at the extraordinary general meeting of the Company (the BC-EGM) subject to a valid quorum consisting of at least half of the Ordinary Shares (as defined below) being represented, provided that if such quorum is not met, the Company is entitled to convene a second meeting where no quorum shall apply. ESG Core Investments suffered an after-tax loss of €3.1 million over the period from 21 January 2021 (date of incorporation of ESG Core Investments B.V.) until 31 December 2021. ESG Core Investments has not recorded any operational revenues. The result is attributable to the negative interest rate payable on the Escrow Account (see below) plus a change in the market value of the warrants and office expenses (including a portion of the IPO transaction costs). Due to this negative interest, the Proceeds held in escrow have marginally decreased to €249.5 at 31 December 2021. 3 About ESG Core Investments B.V. Capital structure At incorporation, the Company issued 5,000,000 ordinary shares, each with a nominal value of €0.01, to Infestos Sustainability B.V. (the Sponsor). Prior to settlement of the IPO these ordinary shares became founder shares and the number of founder shares has been increased to 6,250,000, each with a nominal value of €0.01. The Sponsor holds all of the founder shares. In case of a successful Business Combination, each founder share will convert into one ordinary share. Upon completion of the IPO, the Company issued 25,000,000 units for a price of €10 per unit. Each unit consists of (i) one ordinary share with a nominal value of €0.01 per share (the Ordinary Shares); and (ii) one-eighth (0.125) market warrant that has been allotted concurrently with, and for, each corresponding Ordinary Share (such market warrants, the IPO-Market Warrants) and, following completion of the Business Combination, one-eighth (0.125) market warrant shall be allotted for each Ordinary Share that is held by a holder of Ordinary Shares on the day that is two trading days after the date of completion of the Business Combination (such market warrants, the BC-Market Warrants, and together with the IPO-Market Warrants, the Market Warrants). Consequently, the Company issued 25,000,000 Ordinary Shares and 6,250,000 Market Warrants in aggregate. Each of the Market Warrants will be exercisable after completion of the Business Combination. Furthermore, the Company issued 4,166,666 founder warrants at a price of €1.50 per founder warrant (the Founder Warrants) to the Sponsor, exercisable after completion of the Business Combination. Each whole Market Warrant or Founder Warrant entitles the holder thereof to exercise such warrant into an ordinary share at an exercise price of €11.50. The Sponsor has the option to exercise the Founder Warrants on a cashless basis in which case it would receive a certain amount of Ordinary Shares based on the fair market value of the Ordinary Shares without being obliged to pay cash, as further set out in the Prospectus. . Furthermore, the Sponsor purchased 1,500,000 units (consisting of 1,500,000 Ordinary Shares, 187,500 IPO-Market Warrants and 187,500 BC-Market Warrants) at the settlement date of the IPO as a cornerstone investment for a total consideration of €15 million on the terms and conditions as set out in the Prospectus. If the Company does not complete a business combination within 24 months from the settlement date of the IPO (the Business Combination Deadline), the Company shall, within no more than three months after such 24-month period, convene a general meeting for the purpose of adopting a resolution to dissolve and liquidate the Company and to delist the Ordinary Shares and Market Warrants. In the event of a liquidation, the distribution of the Company’s assets and the allocation of the liquidation surplus shall be completed, after payment of the Company’s creditors and settlement of its liabilities, in accordance with the rights of the Founder Shares and the Ordinary Shares and in accordance with a pre-determined order of priority. There will be no distribution of proceeds or otherwise with respect to any of the Market Warrants or the Founder Warrants, and all such Market Warrants and Founder Warrants will automatically expire without value upon occurrence of such a liquidation. These conditions indicate the existence of a material uncertainty, which may cast significant doubt about the company’s ability to continue as a going concern. 4 Escrow 100% of the Proceeds are held on an escrow account as described in the Prospectus. The escrow account is subject to a negative interest rate of 0.4% in the first year and 0.5% in the second year. Costs The Sponsor has provided €6.25 million to ESG Core Investments through the purchase of Founder Warrants to cover the costs (the Costs Cover) for the IPO and as initial working capital of ESG Core Investments (i.e. costs relating to the search for a business combination and other running costs). The offering expenses and the initial working capital will be fully at risk for the Sponsor in the event no successful Business Combination is completed by the Business Combination Deadline. Management Structure The Company maintains a two-tier board structure consisting of the Management Board and the Supervisory Board. The Management Board is responsible for the Company’s day-to-day management, which includes, among other things, formulating the strategies and policies and setting and achieving the Company’s objectives. The Supervisory Board supervises and advises the Management Board. Each Managing Director and Supervisory Director has a duty to the Company to properly perform the duties assigned to each member and to act in the Company’s corporate interest. Under Dutch law, the corporate interest extends to the interests of all the Company’s stakeholders, including the Company securities holders, creditors and employees. In addition to the Management Board and the Supervisory Board, the Company has an Audit Committee, which exercises the duties as prescribed in the Decree establishment audit committee in organisations of public interest (Besluit instelling auditcommissie bij organisaties van openbaar belang). The Management Board and the Supervisory Board are jointly responsible for the governance structure of the Company. As at the date of this annual report, the provisions in Dutch law, which are commonly referred to as the "large company regime" (structuurregime), do not apply to the Company. The Company does not intend to voluntarily apply the "large company regime". The Management Board Mr Frank van Roij and Mr Hans Slootweg are the managing directors (bestuurders) of ESG Core Investments. Mr F.C.P. (Frank) van Roij (born 1982, Dutch) is a managing director since incorporation of the Company. Since 2015 Mr Frank van Roij works at Infestos Nederland B.V. (Infestos) (which is an affiliate of the Sponsor) where he currently holds the role of investment director. Mr Frank van Roij’s expertise is in supporting companies on areas including strategy, (international) business development, sales and marketing and investor communication. Mr Frank van Roij played an instrumental role in the value creation, related to, amongst others, the abovementioned areas of support, of Infestos’ portfolio companies including Alfen, Verwater and NX Filtration. Prior to joining Infestos, Mr Frank van Roij worked as strategy consultant at Booz & Company (currently Strategy&, part of the PwC network) (2007-2015). Mr Frank van Roij holds 5 a master’s degree in civil engineering from Delft University of Technology in Delft, the Netherlands and a bilingual (English and Spanish) MBA degree from IESE Business School in Barcelona, Spain. Mr J.G. (Hans) Slootweg (born 1979, Dutch) is a Managing Director of the Company since incorporation of the Company. Since 2014, Mr Hans Slootweg works at Infestos (which is an affiliate of the Sponsor), where he currently holds the role of investment director. Mr Hans Slootweg’s expertise is in supporting companies on areas including technology, R&D, finance and accounting. Mr Hans Slootweg played an instrumental role in the value creation, related to, amongst others, the abovementioned areas of support, of Infestos’ portfolio companies including Alfen, Verwater and NX Filtration. Prior to joining Infestos, Mr Hans Slootweg worked as manager at Scotch & Soda (2012-2014) and as senior manager at KPMG (2003- 2012). Mr Hans Slootweg is a certified public accountant (CPA) and holds a master’s degree in accountancy from Nyenrode University in the Netherlands. Background and Strategy The Company intends to apply the following guidelines for selecting and evaluating prospective target businesses (these guidelines together the Target Business Profile): a) the Company will seek to obtain a majority (or otherwise controlling) stake in a single target business that is preferably headquartered in (North-Western) Europe, but could have either global or European operations, by means of a (legal) merger, share exchange, share purchase, contribution in kind, asset acquisition or combination of these methods; b) the Company’s efforts in identifying a prospective target business will focus on, but will not be limited to, companies with a clear ESG focus in their core business (e.g. in their products and/or services offering), which contributes to the objectives of one or more Sustainable Development Goals, as set by the United Nations General Assembly in 2015 (the UN SDGs); c) the Company will seek to obtain a majority (or otherwise controlling) stake in a single target business (i) enjoying a strong competitive position within its industry, which is ideally based on unique technology (e.g. unparalleled technological features in products and/or services offerings), (ii) with a proven business model, (iii) with high top-line growth and (iv) for a consideration of a substantial amount of the Proceeds; d) the Company will also focus on a target business that is likely to gain from and be tangibly improved by leveraging the collective operating, strategic and technical expertise, extensive networks, insights, hands- on mentality and expertise from the Management Board and the Sponsor; e) the Company may seek to complete the Business Combination with a company or target business that may be in its early stages of development or growth and have a negative underlying EBITDA, but in such case, would, according to the Company, have an outlook of profitable growth; and f) the Company will not pursue a Business Combination with a financial institution (financiële instelling), an investment institution (beleggingsonderneming) or a company active in the weapons, tobacco, alcohol, adult entertainment, gambling, fast food or fossil fuel sectors. 6 These guidelines that the Company will consider are not intended to be exhaustive. Any evaluation relating to the merits of a particular acquisition will be based, to the extent relevant, on some or all of the above factors as well as other considerations deemed relevant to the Company’s business objectives by the Management Board. For reasons of transparency, the Company elects to disclose the Target Business Profile as set out above. Such disclosure is without prejudice to the fact that the Company explicitly retains the flexibility to propose to its Ordinary Shareholders a Business Combination with a target business that does not meet one or more of the criteria, provided that the Company will not seek to invest in multiple targets at the same time in the context of the Business Combination. See also Risk Factors - Because the Company is not limited to a particular industry, sector or any specific target businesses with which to pursue the Business Combination, you will be unable to ascertain the merits or risks of any particular target business’ operations. The Company’s search for suitable target businesses is expected to result in a large pool of potentially suitable targets. Progress Throughout 2021, the Management Board has assessed a wide variety of companies in multiple sectors, mainly across EV, Energy Transition, Clean Water and Sustainable Food. The Management Board sources leads to potential target companies from e.g. their own network, the Supervisory Board, investment banks, inbounds and the broader advisory network. The Management Board keeps a ‘’long-list’’ of potential target companies and is currently in (early-stage) discussions with, or conducts preliminary due diligence on, a few of them. The focus of ESG Core remains on niches or unique technologies and it will always seek to form a Business Combination with a target company at an acceptable valuation for our shareholders. Outlook At the end of the financial year ending on 31 December 2021, the Company has not proposed a specific target company to the BC-EGM. ESG Core Investments will continue its search for a proposed Business Combination with a target company to be completed before the Business Combination Deadline. ESG Core Investments will pursue a sound investment for its shareholders. Financial developments 2021 The Company listed on Euronext Amsterdam on 12 February 2021 raising €250 million from a diversified investor base. Some of the financial highlights as at 31 December 2021 are: ◼ Escrow account plus bank account balance: € 250.6 million ◼ Trading price Ordinary Shares: € 9.63 (closing price) ◼ Trading price Market Warrants: € 0.653 (closing price) The Company did not generate any revenues in the financial year 2021. The expenses incurred by the Company in the financial year 2021 include amongst others transaction costs, audit and advisory cost, management fee, bank costs and negative interest. This has resulted in an after-tax loss of €3.1 million over the period from 21 January 2021 (date of incorporation of ESG Core Investments B.V.) until 31 7 December 2021. The result is attributable to the negative interest rate payable on the Escrow Account (see below) plus a change in the market value of the warrants and office expenses (including a portion of the IPO transaction costs). Due to the negative interest, the Proceeds held in escrow have marginally decreased to €249.5 million at 31 December 2021. Corporate Social Responsibility The Company aims to complete a Business Combination with a target business with a clear ESG focus in its core business that aims to contribute to the objectives of one or more Sustainable Development Goals, as set by the United Nations General Assembly in 2015 (the UN SDGs). Within this context, the Company sees an increased focus on sustainability and impact to achieve the UN SDGs. This focus is driving various attractive and high-growth business opportunities that can contribute to the solution of complex global challenges, e.g. transitioning to sustainable energy, access to clean water, quality health services, education and reskilling, industrial innovation, reduction of waste and fighting climate change. In identifying a prospective target business for the Company, the Management Board will amongst others use the lens of the UN SDGs, which reflect social and environmental trends that are re-shaping the world. The Management Board believes that the most successful companies of the next decade will find scalable solutions to challenges that contribute to positive outcomes and unlock lasting economic value. The Management Board believes that by investing in a more inclusive and sustainable future, a company can consistently create both long-term economic value and measurable societal impact. Research and Development Due to the nature of the Company as a SPAC it does not conduct any research and development activities. Risks and Uncertainties Below is a summary of our risks, particularly as a SPAC prior to the completion of a Business Combination, our risk appetite, the likelihood and potential impact thereof. Further reference is made to the description of risks relating to the Company included in the Prospectus, particularly risks that may be of relevance to the Company after the completion of a Business Combination and risks relating to our securities. Additional risks not known to us, or currently believed not to be material, could later turn out to have a material impact on our business, revenue, assets, liquidity, capital resources or net income. The Company’s risk management objectives and policies are consistent with those disclosed in the Prospectus. 8 Risk category Risk description Risk appetite Likelihood Potential impact Strategic The Company may face significant competition for Business Combination opportunities High High High Strategic There is no assurance that the Company will identify suitable Business Combination opportunities by the Business Combination Deadline Low Medium High Strategic The ability of the Company to negotiate a Business Combination on favorable terms could be affected by the limited time to complete the Business Combination Low Medium Medium Financial The Company will be constrained by the potential need to finance repurchases of Ordinary Shares in connection with a Business Combination Low Medium Medium Financial The Company may need to arrange third-party financing and there can be no assurance that it will be able to obtain such financing, which could compel the Company to restructure or abandon a particular Medium Medium Medium 9 proposed Business Combination Financial If the proceeds from the sale of the Founder Warrants are insufficient to allow the Company to operate for at least until the Business Combination Deadline, it could limit the amount available to fund the Company’s search for a target business and the Company may be unable to complete a Business Combination Low Low Medium Operational The Company’s success is dependent upon a small group of individuals and other key personnel High High Low Operational The Company’s search for a target business may be materially adversely affected by the coronavirus (COVID- 19) pandemic as well as other adverse global health events Medium Medium Medium Operational Harm to the reputation of the Company, the Sponsor (or any of its affiliates) or the Managing Directors may materially adversely affect the Company Low Low High 10 To the extent possible, for each risk factor described below, we set out how we believe we mitigate these risks. However, we may not be successful in deploying some or all of these mitigating actions effectively. If circumstances occur or are not sufficiently mitigated, our business, financial condition, results of operations and prospects could be material adversely affected. In addition, risks and uncertainties could cause actual results to vary from those described, which may include forward-looking statements, or could impact our ability to meet our objectives or be detrimental to our financial condition or reputation. The Company may face significant competition for Business Combination opportunities There may be significant competition in some or all of the Business Combination opportunities that the Company may explore. Such competition may for example come from strategic buyers, sovereign wealth funds, other SPACs and public and private investment funds, many of which are well established and have extensive experience in identifying and completing acquisitions and business combinations. A number of these competitors may possess greater technical, financial, human and other resources than the Company. Furthermore, these competitors may be able to facilitate a more expedited acquisition process as they, unlike the Company, may not require the approval of a shareholders’ meeting of a publicly listed company. Any of these or other factors may place the Company at a competitive disadvantage in successfully negotiating or completing an attractive Business Combination. This risk is mitigated by the fact that the Sponsor has extensive experience in investing in ESG growth companies, the Sponsor is highly regarded in the capital markets and has obtained a strong track-record, visibility and reputation in the energy transition and water markets in particular, which provide the Company with a competitive advantage in identifying acquisition opportunities to complete the Business Combination. The Management Board is furthermore supported by the efforts of an active Supervisory Board. There is no assurance that the Company will identify suitable Business Combination opportunities by the Business Combination Deadline The success of the Company’s business strategy is dependent on its ability to identify sufficient suitable Business Combination opportunities. The Company believes it is appropriately prepared to find a suitable Business Combination opportunity. However, the Company cannot estimate how long it will take to identify suitable Business Combination opportunities or whether it will be able to identify any suitable Business Combination opportunities at all by the Business Combination Deadline. If the Company fails to complete a proposed Business Combination, it may be left with substantial unrecovered transaction costs, potentially including substantial break fees, legal costs or other expenses. Furthermore, even if an agreement is reached relating to a target business, the Company may fail to complete such Business Combination for reasons beyond its control. Any such event will result in a loss to the Company of the related costs incurred, which could materially adversely affect subsequent attempts to identify and acquire a stake in another target business. Moreover, if the Company fails to complete the Business Combination by the Business Combination Deadline, it will liquidate and distribute the amounts then held in the Escrow Account, after payment of the Company’s creditors and settlement of its liabilities. In such circumstances, there can be no assurance as to the particular amount or value of the remaining assets at such future time of any such distribution either as a result of costs from an unsuccessful Business Combination or from other factors, 11 including disputes or legal claims which the Company is required to pay out, the cost of the liquidation and dissolution process, applicable tax liabilities or amounts due to third-party creditors. The Company believes that the long-standing presence, reputation, visibility, operational experience and extensive network of relationships in the ESG arena developed by (affiliates of) the Sponsor, as well as the Managing Directors and Supervisory Directors, including in themes such as energy transition, clean technology, water technology and sustainability sectors should provide the Company with an advantage in accessing Business Combination opportunities in this space and allow therefore unique access to off- market transactions (i.e. transactions that involve a target business that is not widely known in the market to be available for acquisition) prior to the Business Combination Deadline. This (financial) risk for our shareholders is largely mitigated by the fact that the Company holds € 250 million (less negative interest) in an escrow account, which can only be released upon meeting strict requirements. Furthermore, the Company has raised proceeds from the sale of the Founder Warrants amounting to €6.25 million, which is considered to be sufficient to cover working capital and other running costs and expenses. If no Business Combination is completed, the exposure of Ordinary Shareholders is generally limited to the negative interest incurred by the Company over the amounts held in the Escrow Account and, if any, costs that are not covered by the Costs Cover. The ability of the Company to negotiate a Business Combination on favorable terms could be affected by the limited time to complete the Business Combination Sellers of potential target businesses are most likely aware that the Company must complete a Business Combination by the Business Combination Deadline, or it will wind up and liquidate. Consequently, such target businesses may obtain leverage over the Company in negotiating a Business Combination, knowing that if the Company does not complete a Business Combination with that particular target business, the Company may be unable to complete a Business Combination with any target business. This risk will increase as the Company gets closer to the Business Combination Deadline. This could affect the ability of the Company to negotiate a Business Combination on favorable terms and disadvantage the Company against other potential buyers. As a consequence, the Company may be unable to complete a Business Combination. To mitigate this risk, the Company is committed to complete a Business Combination rather sooner than later, but it will not compromise on key deal terms solely because of the limited time left to complete a Business Combination. The Managing Directors view time pressure not to be a significant determining factor for their decisions in identifying and selecting a target business. The Company will be constrained by the potential need to finance repurchases of Ordinary Shares in connection with a Business Combination The Company may only proceed with a Business Combination if it can confirm that it has sufficient financial resources to pay the cash consideration required for such Business Combination plus all amounts due to the Ordinary Shareholders who voted against the Business Combination at the BC-EGM and exercise their right to sell their Ordinary Shares to the Company (the Dissenting Shareholders). Considering a Business 12 Combination only requires a majority of at least 70% of the votes cast at the BC-EGM subject to the Business Combination Quorum, such Business Combination could be approved with Dissenting Shareholders representing up to 30% of votes cast at the BC-EGM. Under such circumstances, financing the repurchase of Ordinary Shares held by Dissenting Shareholders could constrain the amount the Company is able to pay in acquiring the target business. If the Company would be able to propose a potential Business Combination to the BC-EGM, the Company will seek to mitigate this risk by working with multiple scenarios in its discussions with potential target companies and will generally seek Ordinary Shareholders’ concessions, under strict wall-crossing procedures, prior to formally proposing a potential Business Combination to the BC-EGM. The Company may need to arrange third-party financing and there can be no assurance that it will be able to obtain such financing, which could compel the Company to restructure or abandon a particular proposed Business Combination Although the Company has not yet identified any specific prospective target business and cannot currently predict the amount of additional capital that may be required, the €250 million and the proceeds from the sale of the Founder Warrants in combination with its possible repurchase obligations vis-à-vis Dissenting Shareholders, may not be sufficient to complete the Business Combination. If the Company has insufficient funds available, the Company may be required to seek additional financing by issuing new equity or debt securities or securing debt financing. The Company may not receive sufficient support from its existing shareholders to raise additional equity, and lenders may be unwilling to extend debt financing to the Company on attractive terms, or at all. To the extent additional financing is necessary to complete a Business Combination and such financing remains unavailable or only available on terms that are unacceptable to the Company, the Company may be required to either restructure or abandon the proposed Business Combination, or proceed with the Business Combination on less favorable terms, which may reduce the Company’s return on investment. If the Company would be able to propose a potential Business Combination to the BC-EGM, the Company will seek to mitigate this risk by generally seeking Ordinary Shareholders’ concessions, under strict wall- crossing procedures, prior to formally proposing a potential Business Combination to the BC-EGM. Generally, the Company aims to complete a Business Combination that does not require additional financing, but if it does, it would conduct a comprehensive analysis in close consultation with investment banks on the feasibility of an equity raise or debt financing prior to proposing the Business Combination opportunity to the BC-EGM. If the proceeds from the sale of the Founder Warrants are insufficient to allow the Company to operate for at least until the Business Combination Deadline, it could limit the amount available to fund the Company’s search for a target business and the Company may be unable to complete a Business Combination, in which case the Ordinary Shareholders may receive €10.00 per Ordinary Share, or less than such amount, and the Market Warrants will expire worthless 13 The Company believes that the remaining proceeds from the sale of the Founder Warrants will be sufficient to allow the Company to operate for at least until the Business Combination Deadline. However, the Company cannot assure any investor in the Company that its estimate is accurate. Of the funds available to it, the Company could use a portion to pay fees to investment banks, consultants and lawyers to assist the Company with its search for a target business. If the Company would enter into a letter of intent where the Company will pay for the right to receive exclusivity from a target business and were subsequently required to forfeit such funds, the Company might not have sufficient funds to continue searching for, or conduct due diligence with respect to, a target business. If the Company is required to seek additional capital in such a case, the Company would need to borrow funds from the Sponsor or any of its affiliates as the Company does not believe other third parties will be willing to loan such funds and provide a waiver against any and all rights to seek access to funds in the Escrow Account. None of the Sponsor or any of its affiliates is under any obligation to advance funds to the Company and the Company may not be able to raise additional financing from unaffiliated parties necessary to fund the Company’s costs and expenses. If the Company is unable to complete a Business Combination because the Company does not have sufficient funds available to it, the Company will be forced to cease operations and liquidate. Consequently, the Ordinary Shareholders may receive €10.00 per Ordinary Share minus the Negative Interest per Ordinary Share, or less in certain circumstances, upon the liquidation and the Market Warrants will expire worthless. The Company’s success is dependent upon a small group of individuals and other key personnel The Company’s success depends, in part, on the performance of a small group of individuals, including in particular the Managing Directors Mr Frank van Roij and Mr Hans Slootweg. They each possess significant experience in targeting potential business opportunities. They are of key importance for the identification of potential Business Combination opportunities and to complete the Business Combination. However, the Company does not have an employment agreement with, or key-man insurance on the lives of, any of the Managing Directors. The loss of any of these individuals could materially adversely impact the Company’s business, its business relationships, its reputation and its ability to complete a Business Combination. This risk is mitigated by the fact that the Company has a pro-active Supervisory Board. The members thereof, Mr Erwin Riefel (Chairman), Ms Anja Vijselaar, Mr Hugo Peek and Mr Richard Govers (Vice- chairman) are very well placed to supervise the Company and its affairs, and the completion of a Business Combination in particular. The Company is furthermore supported by the Sponsor and its managers under a consultancy agreement under which they provide advisory and consulting services, including those related to financial and organisational matters. The Company’s search for a target business may be materially adversely affected by the coronavirus (COVID-19) pandemic as well as other adverse global health events The COVID-19 pandemic has resulted, and other adverse global health events could result, in widespread health crises that could adversely affect the economies and financial markets worldwide (including (North- Western) Europe), and the Company’s search for a target business. The COVID-19 pandemic has resulted in governments globally implementing numerous measures in an attempt to contain the spread of the 14 COVID-19 pandemic, such as travel bans and restrictions, curfews, quarantines, lock downs and the mandatory closure of certain businesses. Prior to the Business Combination, as part of the fair determination of the consideration for a target business, and as part of evaluating the risks associated with such a target business, the Company will endeavor to take into account (as much as possible) the financial and operational performance, and overall resilience of the target business in light of the ongoing spread of COVID-19. However, past performance of a target business is not a guarantee of future success and the Company cannot offer any assurance that a target business that has previously performed well compared to businesses that have been materially and adversely affected by the consequences of COVID-19, would not be materially and adversely affected by the continued outbreak of COVID-19 or other adverse global health events. Furthermore, the Company may be unable to complete a Business Combination if continued concerns relating to COVID-19 restrict travel, or limit the ability to have meetings or conduct due diligence, with potential business targets, if vendors and services providers are unavailable to negotiate and complete a transaction in a timely manner, or if COVID-19 causes a prolonged economic downturn. The extent to which COVID-19 impacts the search for a Business Combination will depend on future developments, which are highly uncertain and cannot be predicted, including new information which may emerge concerning the severity of the COVID-19 pandemic, the emergence of variants of concern, the speed of the roll-out of vaccinations and the actions to contain the COVID-19 pandemic or treat its impact, among others. If the disruptions caused by the outbreak of COVID-19 or other adverse global health events continue or become worse within the period from the date of this annual report until the Business Combination Deadline, the Company’s ability to complete a Business Combination, or the operations of a target business with which the Company ultimately completes a Business Combination, may be materially adversely affected. Harm to the reputation of the Company, the Sponsor (or any of its affiliates) or the Managing Directors may materially adversely affect the Company The ability of the Company to complete a Business Combination and to perform its operations is in part dependent on the reputation of the Sponsor (and any of its affiliates) and the Managing Directors. The Sponsor and the Managing Directors cannot offer any assurance that they will not be exposed to reputational risks resulting from events, including but not limited to, litigation, allegations of misconduct or other negative publicity or press speculation, which, whether or not accurate, may harm their reputation and, ultimately, the reputation of the Company and its competitiveness compared to other SPACs and may have a material adverse effect completing a Business Combination. Risk management and control systems The Management Board is responsible for the control environment, including risk management and internal control systems in order to properly manage the strategic, operational and other risks and uncertainties that could have a material adverse effect on the Company’s business and day-to-day operations. The applicable risks and uncertainties for the Company are evaluated on a periodic basis by the Management Board and discussed with the Supervisory Board. 15 The Company considers the risk of fraud and other dishonest activities within the Company to be limited inter alia because it does not have any employees that may enrich themselves by misappropriating resources and the Company does not engage with customers. Moreover, the proceeds from the IPO are held on an escrow account and may only be released under very strict conditions amongst which the approval of an independent civil law notary. The Company has a set of internal control measures and compliance policies, including amongst others, an authorization policy, sufficient level of segregation of duties, approval of bank payments, and a reporting and monitoring framework. In accordance with best practice 1.4.3 of the Dutch Corporate Governance Code, the Management Board is of the opinion that, to the best of its knowledge: ◼ the report of the Management Board provides sufficient insights into any deficiencies in the effectiveness of the internal risk and control systems, and no deficiencies in the effectiveness of the internal risk and control systems have been identified; ◼ the internal risk management and control systems of the Company provide reasonable assurance that the financial reporting as included in the financial statements do not contain any material inaccuracies; ◼ there is a reasonable expectation that the Company will be able to continue its operations and meet its liabilities for at least twelve months, therefore, it is appropriate to adopt the going concern basis in preparing the financial reporting; and ◼ there are no material risks or uncertainties that could reasonably be expected to have a material adverse effect on the continuity of the Company’s operations in the coming twelve months. 16 Dutch Corporate Governance Code The Company is subject to the Dutch Corporate Governance Code. The Dutch Corporate Governance Code is based on a "comply or explain" principle. The deviations from the Dutch Corporate Governace Code are: Best practice provision 2.1.6: diversity The Supervisory Board presently does not meet the prescribed ratio between male and female members. When the members of the Supervisory Board were selected, the Company could only find one female that met the requirements for a position on the Supervisory Board. The Company fully recognises the benefits of having a diverse Supervisory Board, but it is of the opinion that the current composition of the Supervisory Board does not impact its functioning. Best practice provision 2.1.8: independence of Supervisory Directors One Supervisory Director, Mr Erwin Riefel, is not considered independent pursuant to best practice provision 2.1.8, more specifically sub (iii) and sub (vii) thereof. He had an important business relationship with companies associated with the Company in the year prior to his appointment. Mr Erwin Riefel is a representative of the Sponsor as he holds a management position at Infestos, which holds more than 10% of the issued and outstanding share capital of the Company. He has extensive deal sourcing experience with a deep network of senior level contacts and has a strong understanding of key ESG markets. As such, the Company considers it to be important that Mr Erwin Riefel is part of the Supervisory Board. Best practice provision 2.1.9: independence of the chairman of the Supervisory Board Although Mr Erwin Riefel is not considered independent within the meaning of best practice provision 2.1.8, Mr Erwin Riefel was appointed chairman of the Supervisory Board, as he turned out to be best equipped to fulfil this role. Best practice provision 2.3.10: Secretary to the Supervisory Board Until a Business Combination is concluded, the Supervisory Board has no need for a Secretary to the Supervisory Board. Best practice provision 3.3.3: Shares held by a Supervisory Director in the company on whose supervisory board they serve should be long-term investments The securities of the Company indirectly held by Supervisory Director Mr Erwin Riefel, are not necessarily held on behalf of him as long-term investments as his investment horizon shall be determined following completion of the Business Combination. This is partly inherent to the fact that it is uncertain that Mr Erwin Riefel will remain a Supervisory Director of the Company after completion of the Business Combination. Furthermore, the Company considers the fact that Mr Erwin Riefel’s indirectly held securies do not have a strict long-term investment horizon to be in line with market practice for SPACs. Best practice provision 4.3.3: cancelling the binding nature of a nomination or dismissal 17 The general meeting may pass a resolution to suspend or remove a Managing Director or a Supervisory Director other than pursuant to a proposal by the Supervisory Board by two-thirds of the votes cast representing at least half of the Company's issued capital. This quorum condition exceeds the threshold of one-third of the Company’s issued capital, as set out in the Dutch Corporate Governance Code, but is allowed under the Dutch Civil Code. Furthermore, if such quorum is not met, the Company is not entitled to convene a second meeting where no quorum shall apply. The Company believes it is of key importance to apply the maximum allowed threshold in this regard, in accordance with the Dutch Civil Code, to ensure that the composition of the Management Board and Supervisory Board remains intact as much as possible given the nature of the SPAC, at least until the Business Combination Deadline. Takeover Directive (Article 10) In the context of the EU Takeover Directive (Article 10) Decree, the following notifications must be given insofar as they are not included in this annual report. Limitations on the transfer of shares The Company has not imposed any limitations on the transfer of its shares and therefore there are no outstanding or potential protection measures against a takeover of control of the Company. The Sponsor is bound by a contractual lock-up undertaking with respect to the Founder Shares, Founder Warrants, the Ordinary Shares obtained by it as a result of converting Founder Shares and exercising Founder Warrants, and the Ordinary Shares and Market Warrants, which undertakings are set out in the Prospectus. Substantial holdings The Company and its shareholders are not subject to the substantial shareholdings and voting rights notification obligations under the Dutch Financial Supervision Act (Wet op het financieel toezicht). Material Subsidiaries The Company does not have any subsidiary. For purposes of the consolidated financial statements, the Company consolidates Stichting ESG Core Investments Escrow, as further explained in the consolidated financial statements. Special controlling rights No special controlling rights are attached to the shares in the Company. System of control for equity incentive plans The Company does not have any equity incentive plans. Limitations on voting rights Each share confers the right to cast one vote. The voting rights attached to the shares in the Company are not restricted, and neither are the terms in which voting rights may be exercised restricted. The Sponsor 18 will be entitled to cast a vote on any of its Ordinary Shares at the BC-EGM, including on a resolution to effect a Business Combination. The Sponsor entered into a relationship agreement with the Company dated 11 February 2021, pursuant to which the Sponsor has undertaken it will not cast a vote on any of its Founder Shares at the BC-EGM on a resolution to effect a Business Combination. Appointment and dismissal of Management Board members and Supervisory Directors and amendment of the Articles of Association The general meeting appoints the Managing Directors. A resolution of the general meeting to appoint a Managing Director can be adopted by two-thirds of the votes cast representing at least half of the Company's issued capital. If such quorum is not met, the Company is not entitled to convene a second meeting where no quorum shall apply. The Articles of Association provide that a Managing Director may be suspended or dismissed by the general meeting at any time. A resolution of the general meeting to suspend or dismiss a Managing Director can be adopted by two-thirds of the votes cast representing at least half of the Company's issued capital. If such quorum is not met, the Company is not entitled to convene a second meeting where no quorum shall apply. A Managing Director may also be suspended by the Supervisory Board. A suspension by the Supervisory Board may, at any time, be discontinued by the general meeting. The Articles of Association provide that the number of Managing Directors is determined by the Supervisory Board after consultation with the Management Board, but there will be at least two Managing Directors. The Supervisory Board Rules provide that the Supervisory Board must consist of a minimum of three and a maximum of five members. The exact number of Supervisory Directors shall be determined by the Supervisory Board. As of the date of this annual report, the Supervisory Board consists of four members. Only natural persons may be appointed as Supervisory Directors. According to the Articles of Association, the Supervisory Board must prepare a profile (profielschets) for its size and composition, taking account of the nature and activities of the business, the desired expertise and background of the Supervisory Directors, the desired mixed composition and the size of the Supervisory Board and the independence of the Supervisory Directors. The Company’s diversity policy should also be taken into account. The general meeting appoints the Supervisory Directors. A resolution of the general meeting to appoint a Supervisory Director can be adopted by two-thirds of the votes cast representing at least half of the Company's issued capital. If such quorum is not met, the Company is not entitled to convene a second meeting where no quorum shall apply. A Supervisory Director may be suspended or dismissed by the general meeting at any time. The general meeting may pass a resolution to amend the Articles of Association or to dissolve the Company with an absolute majority of the votes cast but only on a proposal of the Management Board that has been approved by the Supervisory Board. In the absence of such proposal, the resolution requires the explicit approval of the Management Board and the Supervisory Board. Any such proposal must be stated in the 19 notice of the general meeting. In the event of a proposal to the general meeting to amend the Articles of Association, a copy of such proposal containing the verbatim text of the proposed amendment will be deposited at the Company’s office for inspection by shareholders and other persons holding meeting rights until the end of the meeting. Furthermore, a copy of the proposal will be made available free of charge to shareholders and other persons holding meeting rights from the day it was deposited until the day of the meeting. A resolution of the general meeting to amend the Articles of Association that has the effect of reducing the rights attributable to holders of shares of a particular class is subject to approval of the meeting of holders of shares of that class. The Management Board’s powers especially to issue shares Pursuant to the Articles of Association that will be in force as of Settlement, the Management Board has the authority to resolve to issue shares (either in the form of a stock dividend or otherwise) and/or grant rights to acquire shares immediately following Settlement. The resolution to issue shares requires the approval of the Supervisory Board. A resolution by the Management Board to issue Founder Shares is subject to the prior approval by the meeting of holders of Founder Shares. The foregoing also applies to the granting of rights to subscribe for shares, such as options, but does not apply to the issue of shares to a person exercising a previously acquired right to subscribe for shares. Significant agreements and changes in the control of the Company The Company does not have any such agreements. Redundancy agreements in the event of a public takeover bid The Company has not concluded any agreements with a Managing Director or employee that provides for any severance pay in the case of a termination of employment in connection with a public bid within the meaning of Article 5:70 of the Dutch Financial Supervision Act. Statement of Managing Directors’ responsibilities The Managing Directors are responsible for preparing this annual report in accordance with applicable laws and regulations. This annual report comprises the Management Board Report, the Supervisory Board Report, the Consolidated Financial Statements and some other information. The Managing Directors have prepared the annual report in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the relevant provisions of the Dutch Civil Code. In preparing the annual report, the Managing Directors are required to: ◼ select suitable accounting policies and then apply them consistently; ◼ make judgements and accounting estimates that are reasonable and prudent; ◼ state whether applicable IFRS as adopted by the European Union and the relevant provisions of the Dutch Civil Code have been followed, subject to any material deviations disclosed and explained in the annual report; and 20 ◼ prepare the annual report on a going concern basis, unless it is inappropriate to presume that the Company will continue in business. The Managing Directors are responsible for keeping adequate accounting records that are sufficient to show and explain the Company’s transactions and disclose, with reasonable accuracy at any time, the financial position of the Company and enable them to ensure that the annual report complies with applicable law. The Managing Directors have assessed whether the risk assessment executed showed any material failings in the effectiveness of the Company’s internal risk management and control systems. Though such systems are designed to manage and control risks, they can provide reasonable, but not absolute, assurance against material misstatements. Based on this assessment, to the best of our knowledge and belief, no material failings of the effectiveness of the Company’s internal risk management and control systems occurred and the internal risk and control systems provide reasonable assurance that the Consolidated Financial Statements do not contain any errors of material importance. With reference to section 5:25c of the Dutch Financial Supervision Act, each of the Managing Directors, confirms that, to the best of its knowledge: ◼ the Company’s financial statements and the consolidated financial statements, which have been prepared in accordance with IFRS as adopted by the European Union and the relevant provisions of the Dutch Civil Code, give a true and fair view of the assets, liabilities, financial position and profit or loss of the Company; ◼ the report of the Management Board gives a true and fair view on the situation on the balance sheet date, the development and performance of the business and the position of the Company of which the financial information is included in the report of the Management Board and includes a description of the principal risks and uncertainties that the Company faces; ◼ and having taken all matters considered by the Management Board and brought to the attention of the Management Board during the financial year into account, the Managing Directors consider that the annual report, taken as a whole is fair, balanced and understandable. The Managing Directors believe that the disclosures set out in this annual report provide the information necessary for shareholders to assess the Company’s position, performance, business model and strategy. After conducting a review of management analysis, the Managing Directors have reasonable expectation that the Company has adequate resources to continue in operational existence for the foreseeable future. For this reason, the Managing Directors consider it appropriate to adopt the going-concern basis in preparing the annual report. 21 On behalf of the Management Board F.C.P van Roij J.G. Slootweg Managing Director Managing Director ESG Core Investments B.V. ESG Core Investments B.V. 22 Report of the Supervisory Board The Supervisory Board’s main responsibility is to supervise and advise the Management Board in its search for a Business Combination and the manner in which its strategy is implemented. The Supervisory Board also focuses on the effectiveness of the Company’s internal risk management and control systems and the integrity and quality of the financial reporting. Composition The Supervisory Board consists of the following four members: Mr D.W.E. (Erwin) Riefel, Chairman (born 1966, Dutch) has more than 30 years of experience in the financial sector, of which more than 15 years in M&A. He has extensive deal sourcing experience with a deep network of senior level contacts and has a strong understanding of key ESG markets. Since 2008, Mr Erwin Riefel is an investment director at Infestos (which is an affiliate of the Sponsor). Mr Erwin Riefel played an instrumental role in the value creation related to Infestos’ portfolio companies including Alfen, Verwater and NX Filtration. Prior to joining Infestos, Mr Erwin Riefel worked as senior relationship manager for corporate clients at Rabobank (formerly known as Rabobank Nederland). Mr Erwin Riefel holds a master’s degree in finance small and medium sized enterprises from TIAS Business School in Tilburg, the Netherlands. Ms A.D. (Anja) Vijselaar (born 1964, Dutch) is well-connected in the North-Western European energy and technology sector, for example through her roles at Dutch Power. Currently, Ms Anja Vijselaar is a director in the Business Unit Energy at WSP, one of the world’s leading professional services firms and from its Energy department supporting clients in solutions for high voltage and the energy transition. Prior thereto, Ms Anja Vijselaar worked at Joulz, a provider of energy infrastructure solutions, where she held various positions including the position of CEO of Joulz Energy Solutions. Before joining Joulz, Ms Anja Vijselaar held several management positions at Dura Vermeer. Ms Anja Vijselaar is founder of the WSP Women 66 Network and the Energy Safety Festival. Ms Anja Vijselaar holds a master’s degree in Civil Engineering and a master’s degree in Change Management from SIOO in Utrecht, the Netherlands. Mr H. (Hugo) Peek (born 1969, Dutch) has a background in general management, corporate finance, capital markets and lending and he has been a highly prominent M&A banker in the Dutch market for many years. He has an outstanding track record in the financial sector with over 25 years of experience and a deep network of senior level contacts. Mr Hugo Peek has spent most of his career at ABN AMRO, where his last role was Head of Corporate & Institutional Banking EMEA. Within ABN AMRO Corporate & Institutional Banking, Mr Hugo Peek held responsibility for all sustainability efforts. Before that, Mr Hugo Peek led the global Corporate & Institutional Clients and the Corporate Finance & Capital Markets businesses and has been global head of Energy Advisory at ABN AMRO. Currently, Mr Hugo Peek is a partner with DIF Capital Partners, a €8.5 billion alternative fund manager based in Amsterdam, where he is in charge of the private debt strategy. Mr Hugo Peek also worked as managing director at Kempen & Co (2008-2011). Mr Hugo Peek holds a master’s degree in Financial Economics from Erasmus University in Rotterdam, and followed executive education programmes at Cambridge University, London Business 23 School and Columbia University. He currently holds non-executive directorships at ParkBee B.V. (chair) and Bethmann Bank AG. Mr R. (Richard) Govers, Vice-chairman (born 1975, Dutch) has been a highly prominent M&A banker in the Dutch and North-Western European market for many years. Mr Richard Govers has spent most of his career at Goldman Sachs Investment Banking Division (1998-2020), where his last role was head of the Netherlands region in addition to senior coverage responsibilities within the Global Industrials Group and the Nordics region. Currently, Mr Richard Govers is a partner in the Strategic Advisory Group at PJT Partners in London, delivering advisory and capital raising solutions. Mr. Richard Govers has extensive experience in clean energy and renewables working on various high-profile transactions. Mr Richard Govers holds a master’s degree in Mechanical Engineering from Delft University of Technology, Netherlands. The Supervisory Board operates independently of the Management Board, any other participating interests and each other. Each of the Supervisory Board members has the necessary expertise, experience and background to perform his or her tasks and responsibilities. Three of the four members of the Supervisory Board are independent within the meaning of the Dutch Corporate Governance Code as, in the opinion of the Supervisory Board, the requirements referred to in best practice provisions 2.1.7 to 2.1.9 inclusive of the Dutch Corporate Governance Code have been fulfilled. Meetings and attendance The Supervisory Board held seven regular meetings in 2021. All such meetings were attended by the members of the Management Board. In addition, a few meetings were held without the members of the Management Board, such as the meeting where the Supervisory Board discussed its own functioning. All members of the Supervisory Board attended all the meetings, as such the absenteeism rate is zero. Other than the Audit Committee, the Supervisory Board has not installed any standing committees as this is not required under Dutch law or the Dutch Corporate Governance Code based on the current composition of the Supervisory Board. If the Supervisory Board would in the future consist of more than four members, it should, in addition to the existing Audit Committee, appoint from among its members a remuneration committee and a selection and appointment committee to remain in compliance with the Dutch Corporate Governance Code. Audit Committee The Company has an Audit Committee, consisting of Ms Anja Vijselaar and Mr Hugo Peek. The duties of the Audit Committee include: ◼ informing the Supervisory Board of the results of the statutory audit and explaining how the statutory audit has contributed to the integrity of the financial reporting and how the Audit Committee has fulfilled this process; ◼ monitoring the financial reporting process and making proposals to safeguard the integrity of the process; 24 ◼ monitoring the effectiveness of the internal control systems, the internal audit system and the risk management system with respect to financial reporting; ◼ monitoring the statutory audit of the annual accounts, and in particular the process of such audit ◼ monitoring the independence of the external auditor; and ◼ adopting procedures with respect to the selection of the external auditor. Internal audit function The Company does not have an internal audit function. The need for an internal audit function is assessed on a yearly basis by the Supervisory Board. The Supervisory Board concluded that an internal audit function is not necessary due to the nature of the Company as a SPAC. External auditor The Management Board and the Supervisory Board have evaluated the activities performed for the Company by PricewaterhouseCoopers Accountants N.V. It is apparent that PricewaterhouseCoopers Accountants N.V. is capable of forming an independent judgment concerning all matters that fall within the scope of its auditing task; there is a good balance between the effectiveness and efficiency of their actions, for example in relation to auditing costs, risk management and reliability. Functioning of the Supervisory Board and the Management Board (evaluation accountability) The Supervisory Board discussed, in the absence of the Management Board, its own functioning. The evaluation was performed by the Chairman of the Supervisory Board, by means of a structured questionnaire, which was subsequently discussed with the rest of the Supervisory Board. The Management Board also filled in a questionnaire and addressed items such as: team effectiveness, interaction, transparency, composition and profile, competences, effectiveness of individual members, quality of information and the relationship with the Management Board. The outcome of the evaluation is positive. Despite its relatively new composition, it was found that the Supervisory Board has rapidly organized itself in an effective and efficient manner and considers the contributions of each Supervisory Board member to be complementary in nature. There is a good level of transparency amongst both the Management Board and the Supervisory Board. The Supervisory Board evaluation delivered areas for improvement and key topics for 2022, of which the most material relate to spending more time on discussing the strategy to find the right target to form a Business Combination with and further strengthening the relationship amongst its members, and with the Management Board. The Supervisory Board has conducted an annual review to identify any aspects with regard to which the Supervisory Board members require further training or education during their term of office. Given the nature of the Company as a SPAC and the various backgrounds and expertises from the members of the Supervisory Board, each member has an own responsibility to train and educate itself on such topics as may be required. We shared our reflections with the Management Board members and had an individual discussion with each to discuss last year’s performance, area of improvement and/or development and key priorities for 2022. 25 Remuneration The Managing Directors and Mr D.W.E. Riefel as Supervisory Director are not entitled to any cash remuneration or compensation prior to completion of a Business Combination. The independent Supervisory Directors are entitled to a cash compensation prior to completion of a Business Combination of each €30,000 per year. The remuneration of the Managing Directors and Supervisory Directors following a Business Combination, if any, shall be disclosed in the shareholder circular published in connection with the BC-EGM and is expected to be in line with market practice for small to medium sized companies. The Managing Directors and Supervisory Directors have not entered into any type of employment or service agreement with the Company. As such, there are no severance arrangements between the Managing Directors and Supervisory Directors. Since the majority of the Managing Directors and Supervisory Directors will not be remunerated, there is no remuneration committee. Shareholdings of Managing Directors and Supervisory Directors Mr van Roij, Mr Slootweg and Mr Riefel indirectly hold financial instruments in the Company. Mr F.C.P. Van Roij holds, indirectly through the Sponsor, 37,500 Ordinary Shares, 9,375 Market Warrants, 156,250 Founder Shares and 104,166 Founder Warrants; Mr J.G. Slootweg holds, indirectly through the Sponsor, 37,500 Ordinary Shares, 9,375 Market Warrants, 156,250 Founder Shares and 104,166 Founder Warrants; Mr D.W.E. Riefel holds, indirectly through the Sponsor, 37,500 Ordinary Shares, 9,375 Market Warrants, 156,250 Founder Shares and 104,166 Founder Warrants. The Sponsor is controlled by Infestos and Stichting Administratiekantoor Infestos Sustainability (the STAK). Mr Van Roij, Mr Slootweg and Mr Riefel participate and each hold 2.5% in the Sponsor through the STAK. The number of shares and warrants are calculated with reference to the ordinary shares of the STAK in the Sponsor. Financial statements and auditor’s opinion The Consolidated Financial Statements included in this annual report have been audited and PWC has issued an unqualified opinion on them. The Consolidated Financial Statements were extensively discussed with the Supervisory Board, in the presence of the external auditor, and the Management Board. The Supervisory Board is of the opinion that the Consolidated Financial Statements meet all requirements for transparency and correctness. Therefore, the Supervisory Board recommends that the General Meeting of Shareholders to be held on 10 March 2022 adopts the Consolidated Financial Statements and the appropriation of the result. 26 Result appropriation ESG Core Investments realised a loss of €3.1 million. The proposal to the General Meeting of Shareholders is to recognise this loss in other reserves. The members of the Supervisory Board have signed the financial statements to comply with their statutory obligation pursuant to article 2:101, paragraph 2, of the Dutch Civil Code. Looking ahead The members of the Supervisory Board wish to thank the Management Board for their continued dedication and commitment in aiming to realize a Business Combination prior to the Business Combination Deadline. The Supervisory Board continues to advise and support the Management Board in its search for a Business Combination and the manner in which its strategy is implemented. Amsterdam, 21 January 2022 The Supervisory Board Erwin Riefel (Chairman) Hugo Peek Anja Vijselaar Richard Govers 27 Consolidated financial statements for the period 21 January to 31 December 2021 28 Consolidated statement of comprehensive income In EUR ‘000 Notes 2021 Other expenses 4 (612) Operating expenses (612) Operating Loss (612) Fair value adjustment of Market Warrant 15 2,229 Effective interest on ordinary shares subject to redemption 5 (3,789) Interest expenses 6 (884) Finance income and expenses (2,444) Net loss before income tax (3,056) Income tax 7 - Net loss for the period (3,056) Other comprehensive result for the period - Total comprehensive loss for the period (3,056) Earnings per share Basic earnings per share (EUR) (0.12) Diluted earnings per share (EUR) (0.12) 29 Consolidated statement of financial position (Before profit appropriation) In EUR ‘000 Notes 31 December 2021 21 January 2021 Assets Current assets Other receivables 12 69 50 Cash and cash equivalents 13 250,623 - Total current assets 250,692 50 Total assets 250,692 50 Group equity Issued share capital 14 63 50 Share premium - - Other reserves 14 6,250 Result for the year (3,056) - Total equity 3,257 50 Liabilities Non-current liabilities Redeemable ordinary shares 15 242,926 - Market warrants 15 4,083 - Total non-current liabilities 247,009 - Current liabilities Interest payable 378 - Other payables 16 48 - Total current liabilities 426 - Total liabilities 247,435 - Total equity and liabilities 250,692 50 30 Consolidated statements of changes in equity In EUR Notes Share capital Share premium Other reserves Result for the year Total equity Closing Balance - 21 January 2021 50 - - - 50 Profit (loss) for the period - - - (3,056) (3,056) Other comprehensive income (loss) - - - - - Total comprehensive income (loss) for the period - - - (3,056) (3,056) Transactions with shareholders Issuance of founder shares 13 - - - 13 Issuance of founder warrants - - 6,250 - 6,250 Allocation of profit (loss) - - - - - Closing Balance - 31 December 2021 63 - 6,250 (3,056) 3,257 Attributable to equity owners of ESG Core Investments B.V. 31 Consolidated statement of cash flows In EUR ‘000 Notes 2021 Cash flows from operating activities Operating Loss (612) Interest paid (507) Adjustments to reconcile profit before taxation to net cash flows: Share-based payment expenses - (Increase)/Decrease in working capital: - Increase other receivables (69) - Increase other payables 48 Net cash outflow from operating activities (1,140) Cash flows from financing activities Proceeds from issuance of founder shares 14 63 Proceeds from issuance of ordinary shares 15 250,000 Transaction cost related to the issuance of ordinary shares 15 (4,550) Proceeds from issuance of founder warrants 14 6,250 Net cash inflow from financing activities 251,763 Net increase in cash and cash equivalents 250,623 Cash and cash equivalents at the beginning of the financial year - Effects of exchange rate changes on cash and cash equivalents Cash and cash equivalents at the end of the financial period 250,623 32 Notes to the Consolidated Financial Statements General information ESG Core Investments is a limited liability company incorporated under Dutch law (besloten vennootschap met beperkte aansprakelijkheid), with its statutory seat in Amsterdam, the Netherlands (ESG Core Investments or the Company). ESG Core Investments was admitted to listing and trading on Euronext Amsterdam on 12 February 2021 pursuant to an initial public offering (IPO) in which it raised € 250 million in gross proceeds in accordance with the terms and conditions set out in the Company’s prospectus dated 11 February 2021 (the Prospectus). The Company has the legal ownership of the gross cash proceeds and the Management Board has the authority and power to spend such amounts. In order to ensure that the gross proceeds are used for no other purpose than the situations as disclosed in the going concern paragraph in this annual report, the Company entered into an escrow agreement with Intertrust Escrow and Settlements B.V., a private company with corporate seat in Amsterdam, the Netherlands and having its address at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands, acting under its trade name Intertrust Escrow Services (the Escrow Agent) and Stichting ESG Core Investments Escrow with corporate seat in Amsterdam, the Netherlands and having its corporate address at Prins Bernhardplein 200, 1097 JB Amsterdam, the Netherlands (the Foundation). Following the IPO, 100% of the gross proceeds have been transferred to the escrow account. Pursuant to the escrow agreement, the amounts held in the escrow account will generally not be released unless and until the occurrence of the earlier of a Business Combination or Liquidation, as disclosed in the going concern paragraph in this annual report and as further set out in the Prospectus. The Foundation holds the escrow amount on a designated bank account. These consolidated financial statements comprise the Company and the Foundation (the Group). ESG Core Investments is a Special Purpose Acquisition Company (SPAC) and aims to unlock a unique investment opportunity in Europe within industries that benefit from strong Environmental, Social and Governance (ESG) profiles. The aim is to identify and acquire a stake in a company with a clear ESG focus in the core of its business, that is preferably headquartered in North-Western Europe and is enjoying a strong competitive position within its industry, ideally based on unique technology. The Company is registered in the Chamber of Commerce (Kamer van Koophandel) under number 81647034 with its registered office at Oldenzaalsestraat 500, 7524 AE Enschede, the Netherlands. The Company’s Ordinary Shares and Market Warrants are publicly traded on the regulated market of Euronext Amsterdam. The Company has been incorporated on 21 January 2021. The Company’s statutory financial year is the calendar year. Its first statutory financial year is for the period 21 January 2021 to 31 December 2021. 33 1. Summary of significant accounting policies The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. Basis of preparation These consolidated financial statements have been prepared in accordance and comply with International Financial Reporting Standards (IFRS) and interpretations adopted by the European Union, where effective, for financial years beginning 1 January 2021 and also comply with the financial reporting requirements included in Part 9 of Book 2 of the Dutch Civil Code. These consolidated financial statements have been prepared on a going concern basis. Following the IPO and prior to the completion of the acquisition of a target business by means of a (legal) merger, share exchange, share purchase, contribution in kind, asset acquisition or combination of these methods (a Business Combination), the Company will not engage in any operations, other than in connection with the selection, structuring and completion of a Business Combination. Following the IPO , the Company has a 24 month period to complete a Business Combination. The costs relating to the search for a target company and the completion of a Business Combination are expected to be covered by the proceeds from the issuance of the Founder Warrants. However, the Company cannot assure any investor in the Company that this expectation is accurate. Any investor in the Company should always take into account the risk factors set out in the Risk Factor section in the Prospectus. Going concern If the Company does not complete a business combination within 24 months from the settlement date of the IPO (the Business Combination Deadline), the Company shall, within no more than three months after such 24-month period, convene a general meeting for the purpose of adopting a resolution to dissolve and liquidate the Company and to delist the Ordinary Shares and Market Warrants. In the event of a liquidation, the distribution of the Company’s assets and the allocation of the liquidation surplus shall be completed, after payment of the Company’s creditors and settlement of its liabilities, in accordance with the rights of the Founder Shares and the Ordinary Shares and in accordance with a pre-determined order of priority. There will be no distribution of proceeds or otherwise with respect to any of the Market Warrants or the Founder Warrants, and all such Market Warrants and Founder Warrants will automatically expire without value upon occurrence of such a liquidation. These conditions indicate the existence of a material uncertainty, which may cast significant doubt about the company’s ability to continue as a going concern. The (financial) risk for our shareholders is largely mitigated by the fact that the Company holds € 250 million (less negative interest) in an escrow account, which can only be released upon meeting strict requirements. Furthermore, the Company has raised proceeds from the sale of the Founder Warrants amounting to €6.25 million, which is considered to be sufficient to cover working capital and other running costs and expenses. If no Business Combination is completed, the exposure of Ordinary Shareholders is generally limited to the negative interest incurred by the Company over the amounts held in the Escrow Account and, if any, costs that are not covered by the Costs Cover. 34 Functional and presentation currency These consolidated financial statements are presented in euro, which is the Company’s functional currency. All amounts have been rounded to the nearest thousand, unless otherwise indicated. Basis of measurement These consolidated financial statements have been prepared on a historical cost convention, unless stated otherwise. Use of judgements and estimates The preparation of these consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates. It also requires management to exercise its judgment in the process of applying the Group’s accounting policies. The areas involving a higher degree of judgement or complexity, or areas where assumptions and estimates are significant to the financial statements are the following: ◼ Note 10 Share based payments. The classification as share-based payments and the determination of the grant date. ◼ Note 15 Redeemable Ordinary Shares and Market Warrants. The fair value of the Market Warrants at the issue date. Fair value is defined as the price that would be received for sale of an asset or paid for transfer of a liability, in an orderly transaction between market participants at the measurement date. IFRS establishes a three tier fair value hierarchy, which prioritizes the inputs used in measuring fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). These tiers include: ◼ Level 1, defined as observable inputs such as quoted prices (unadjusted) for identical instruments in active markets; ◼ Level 2, defined as inputs other than quoted prices in active markets that are either directly or indirectly observable such as quoted prices for similar instruments in active markets or quoted prices for identical or similar instruments in markets that are not active; and ◼ Level 3, defined as unobservable inputs in which little or no market data exists, therefore requiring an entity to develop its own assumptions, such as valuations derived from valuation techniques in which one or more significant inputs or significant value drivers are unobservable. New and amended standards not adopted by the group Certain new accounting standards and interpretations have been published that are not mandatory for 31 December 2021 reporting periods and have not been early adopted by the Group. These standards are not expected to have a material impact on the Group in the current or future reporting periods and on foreseeable future transactions: ◼ Onerous contracts – Cost of Fulfilling a Contract (Amendments to IAS 37); 35 ◼ Deferred Tax related to Assets and Liabilities arising from a Single Transaction (Amendments to IAS 12); ◼ COVID-19-Related Rent Concessions beyond 30 June 2021 (Amendment to IFRS 16); ◼ Annual Improvements to IFRS Standards 2018–2020; ◼ Property, Plant and Equipment: Proceeds before Intended Use (Amendments to IAS 16); ◼ Reference to Conceptual Framework (Amendments to IFRS 3); ◼ Classification of Liabilities as Current or Non-current (Amendments to IAS 1); ◼ IFRS 17 Insurance Contracts and amendments to IFRS 17 Insurance Contracts; ◼ Disclosure of Accounting Policies (Amendments to IAS 1 and IFRS Practice Statement 2); and ◼ Definition of Accounting Estimates (Amendments to IAS 8). 2. Critical accounting policies Principles for consolidation Subsidiaries are all entities over which the Company has control. The Company controls an entity where the Company 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 to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. For purposes of the consolidated financial statements, ESG Core Investments B.V. forms a group together with Stichting ESG Core Investments Escrow, a foundation that holds the IPO proceeds in escrow on designated bank account. The IPO proceeds may only be released from escrow (i) upon receipt of (a) a joint and written instruction signed by the Company’s management board and the chairman of the supervisory board, confirming that the conditions, if any, to completing of the business combination are satisfied or waived in accordance with the transaction documentation in effect between the Company and the target business and (b) a written confirmation of a civil law notary or deputy civil law notary (notaris of kandidaat-notaris) that the general meeting has adopted a resolution to approve the business combination; (ii) upon receipt of a written confirmation of a civil law notary or deputy civil law notary (notaris of kandidaat-notaris) that (a) the deadline to complete a business combination has passed without the Company completing a business combination and (b) a written resolution by the general meeting to pursue a liquidation of the Company was adopted; (iii) on the first business day 3 years after the execution date of the escrow agreement; or (iv) upon receipt by the Intertrust Escrow Services, acting as the escrow agent, of a final (in kracht van gewijsde) judgment from a competent court or arbitral tribunal, confirmed to be enforceable in the Netherlands by a reputable law firm, requiring payment by ESG Core Investments Escrow of all or part of the amounts held in the escrow account to the Company or to any party that is designated in such judgment. As such, the Company can control the date on which the Foundation needs to pay out the cash held in escrow by proposing a Business Combination or waiting until the date the 24-months period ends and the funds need to be repaid. Therefore, the foundation is considered a group company and included in these consolidated financial statements. 36 Subsidiaries are deconsolidated from the date that control ceases. Intercompany transactions, balances and unrealized gains on transactions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted by the Group. Cash and cash equivalents For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes cash on hand, deposits held at call with financial institutions, other short-term, highly liquid investments with original maturities of three months or less that are readily convertible to known amounts of cash and which are subject to an insignificant risk of changes in value. Other receivables Other receivables are recognized initially at their transaction price, the amount of consideration that is unconditional, unless they contain significant financing components when they are recognized at fair value. They are subsequently measured at amortized cost using the effective interest method, less loss allowance (if any). Other payables These amounts represent liabilities provided to the Company prior to the end of the financial year which are unpaid. Other payables are presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized initially at their fair value. And subsequent measurement at amortized cost using the effective interest method Financial instruments Financial assets – Classification and measurement The Company classifies its financial assets in the following measurement categories: ◼ those to be measured subsequently at fair value (either through other comprehensive income (OCI) or through profit or loss), and ◼ those to be measured at amortized cost. The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. Financial assets - Recognition and derecognition Regular purchases and sales of financial assets are recognized on the trade-date, the date on which the Company commits to purchase or sell the asset. Financial assets are derecognized when the rights to receive cash flows from the financial assets have expired or have been transferred and the Company has transferred substantially all the risks and rewards of ownership. 37 Financial assets – Initial recognition At initial recognition the Company measures a financial asset at its fair value plus, in the case of a financial asset not carried at fair value through profit or loss, transaction costs that are directly attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at fair value through profit or loss are expensed in profit or loss. Financial assets – Subsequent Measurements Subsequent measurement depends on the Company’s business model for managing the asset and the cash flow characteristics of the asset. There are three measurement categories into which the Company classifies its instruments: (i) Amortised cost, (ii) Fair value through profit or loss; and (iii) Fair value through other comprehensive income. The Company makes no use of derivative financial instruments. Besides cash and cash equivalents that are measured at fair value, the Company’s receivables are measured at amortised costs. Interest income from these financial assets is included in finance income using the effective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss. Financial assets – Impairment The Company assesses on a forward-looking basis the expected credit losses associated with its financial instruments carried at amortized cost. The impairment methodology applied depends on whether there has been a significant increase in credit risk. The Company has no trade receivables nor amounts due from customers for contract work including a significant finance component and is therefore allowed to apply the simplified approach under IFRS 9, in which the credit losses are measured using a lifetime expected loss allowance for all trade receivables. Financial liabilities - Recognition and measurement Financial liabilities are recognized when the Company becomes a party to the contractual provisions of the financial instrument. The Company makes no use of derivative financial instruments. Financial liabilities at amortized costs Financial liabilities at amortized cost include redeemable Ordinary Shares and other payables. These financial liabilities are initially recognized at fair value equaling the amount required to be paid, less, when material, a discount to reduce the payables to fair value. Subsequently, trade and other payables are measured at amortized cost using the effective interest method. Other payables are classified as current liabilities due to their short- term nature, except for maturities greater than 12 months after the end of the reporting period. 38 Financial liabilities at fair value through other comprehensive income Financial liabilities at fair value through other comprehensive income include the Market Warrants. These financial liabilities are initially recognised at fair value with subsequent changes in fair value being recognised in the income statement. Financial liabilities – Derecognition The Company derecognizes a financial liability when its contractual obligations are discharged or cancelled or expire. 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 recognized in the consolidated statement of comprehensive income. The Company also derecognizes 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 recognized at fair value. However, when the cash flows of the modified liability are not substantially different, the Company (i) recalculates the amortized cost of the modified financial liability by discounting the modified contractual cash flows using the original effective interest rate and (ii) recognizes any adjustment in the consolidated statement of comprehensive income. Offsetting financial instruments Financial assets and liabilities are offset and the net amount reported in the balance sheet when there is a legally enforceable right to offset the recognized amounts and there is an intention to settle on a net basis or realize the asset and settle the liability simultaneously. The Company does not have any legally enforceable right to offset the recognized amounts in the balance sheet. Founder Shares and Founder Warrants The Company has issued Founder Shares and Founder Warrants to the Sponsor. The Sponsor performs services to the Company under a consultancy agreement in relation to completing a Business Combination within the 24 month period. Management has exercised judgement in determining whether these instruments should be treated as financial instruments or share based payments (IFRS 2) and concluded that the instruments fall in scope of IFRS 2 as equity settled instruments, since there is an estimated difference in the fair value of the instruments issued and the amount paid. The grant-date fair value of equity-settled share-based payment awards granted is generally recognised as an expense, with a corresponding increase in equity, over the vesting period of the awards. Management has exercised judgement in determining the grant date and concluded that the grant date should be the Business Combination date as only at that point in time there is clarity over the value of the awarded Founder Shares and Founder Warrants. As a result, no expense is recognized in the statement of comprehensive income over the period ending 31 December 2021. 39 Ordinary Shares Since the holders of Ordinary Shares have the right to demand cash (€ 10.00 per share minus negative interest) at the earlier of i) the date of an approved Business Combination in case the shareholder votes against such Business Combination and ii) when no Business Combination materializes within 24 months from IPO, the Ordinary Shares are classified as a financial liability in accordance with IAS 32.18 until the point when this redemption feature lapses. These financial liabilities are classified as measured at amortized cost using the effective interest method. Interest expense are recognised in profit or loss. Any gain or loss on derecognition is also recognised in profit or loss. Market Warrants The Market Warrants classify as a financial liability under IFRS and are initially measured at their fair value. Subsequent to initial recognition, the Market Warrants are measured at fair value, and changes therein are recognised in profit or loss. Expenses Expenses arising from the Company’s operations are accounted for in the year incurred. Finance income and expenses Finance expenses include interest incurred on borrowings calculated using the effective interest method and interest on the Company’s cash and cash equivalent balances. Corporate income tax Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and any adjustment 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 uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted at the reporting date. Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for taxation purposes. Deferred tax assets are recognised for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be used. Future taxable profits are determined based on the reversal of relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient to recognise a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing temporary differences, are considered, based on the business plans. 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. 40 Deferred tax is determined using tax rates (and laws) that have been enacted or substantively enacted by the end of the reporting period and are expected to apply when the related deferred income tax asset is realized, or the deferred income tax liability is settled. Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent that it has become probable that future taxable profits will be available against which they can be used. Notes to the cash flow statement The cash flow statement has been prepared using the indirect method, whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows. Non-cash transactions are not included in the statement of cash flows. ESG Core Investments has chosen to present interest paid on cash and cash equivalents as operating cash flows. Operating Segments The activities of the Company are considered to be a single operating segment under IFRS 8. Hence no further segmental disclosures are included in the financial statements. 3. Financial instruments and risk management I. Accounting classification The carrying amount of the redeemable Ordinary Shares is determined based upon amortized cost calculation, using the effective interest rate method, considering the transaction cost paid to issue the instrument and the negative interest that will be deducted from the repayment in case a shareholder redeems it investment. The fair value of the redeemable Ordinary Shares is determined based on the listed market price of these shares at Euronext Amsterdam as per 31 December 2021. The Market Warrants initial value is determined based on a Level 3 valuation using a binominal tree option pricing model, that does not assume any dividend and considers credit risk to be negligible. No marketability discounts haven been applied to the fair value calculated. The fair value per 31 December 2021 is based on a Level 1 valuation using the listed market price of these Market Warrants at Euronext Amsterdam. The fair value of the other financial liabilities is determined based upon a discounted cash flow technique. The valuation model considers the present value of expected payments, discounted using a risk-adjusted discount rate. II. Risk management The Company’s management board has the overall responsibility for the establishment and oversight of the Group’s risk management framework. The Group’s risk management policies are established to identify and analyze 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. 41 Credit risk Credit risk is the risk of financial loss to the Group if a counterparty to a financial instrument fails to meet its contractual obligations, and arises principally from the Group’s receivables. The Company’s credit risk mainly relates to its cash- and cash equivalents that are placed with a number of banks. The Company determines the credit risk of cash- and cash equivalents that are placed with these banks as low, by solely doing business with highly respectable banks. 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. As at 31 December 2021, the Company has sufficient funds to pay its obligations for the next year. Market risk Market risk is the risk that changes in market prices – e.g. 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 optimizing the return. 4. Other expenses The other expenses include the IPO transaction costs that relate to the Market Warrants (see note 5), management fees and general office expenses. 5. Effective interest on Ordinary Shares subject to redemption The IPO transaction costs of €4.7 million are allocated pro rata to the Ordinary Shares and to the Market Warrants for the amounts of €4.6 million and €0.1 million respectively. The effective interest on the Ordinary Shares amounts €3.8 million in 2021 and is recognized in the profit and loss account over a period of 24 months. The IPO transaction costs charged to the Market Warrants are directly recognized in the profit and loss account as part of other expenses (see note 4). In EUR ‘000 Carrying amount Total < 1year 1-2 years > 2 years Redeemable ordinary shares 242,926 242,926 242,926 Market warrants 4,083 4,083 4,083 Interest payable 378 378 378 Other payables 48 48 48 Total 247,435 247,435 426 247,009 42 6. Interest expenses See note 13 for further explanation in respect of the escrow account. 7. Income tax The Company’s tax jurisdiction is the Netherlands. As it is uncertain if current tax losses can be utilized against future tax profits, the company did not recognise a deferred tax assets for its tax losses. The Company’s tax losses amounts to €3.1 million as per 31 December 2021. Reconciliation of the effective tax rate: 8. Earnings per share The calculation of basic and diluted EPS has been based on the following loss attributable to ordinary shareholders and weighted-average number of Ordinary Shares outstanding. As the Company is loss making, the diluted earnings per share are considered to be equal to the basis earnings per share, as the impact of incremental shares on earning per share is anti-dilutive. In EUR ‘000 2021 Interest expenses escrow account (881) Other interest expenses (3) Total interest expenses (884) In EUR ‘000 2021 Profit (loss) before income tax (3,056) Tax calculated based on Dutch tax rate 25.0% Tax effect of: Non-deductible expenses -1.0% Current year losses for which no deferred tax asset was recognised -24.0% Effective tax rate 0.0% 2021 Net income (loss) attributable to equity holders (EUR ‘000) (3,056) Outstanding number of shares for the basic earnings per share as at 21 January 25,000,000 Effect of issued ordineray shares in 2021 - Weighted-average number of shares outstanding for the prupses of basic earnings per share 25,000,000 Incremental shares for assumed conversion of market warrants, founder shares and founder 16,666,557 Weighted-average number of shares outstanding for the prupses of diluted earnings per share 41,666,557 43 9. Numbers of employees The company has no employees at 31 December 2021. 10. Share based payments As disclosed under the significant accounting policies section, as at 31 December 2021, the Group has accounted for share-based payment arrangements for Founder Shares and Founder Warrants. Upon completion a business combination the Founder Shares and Warrants will convert into Ordinary Shares. In case the Company does not complete a Business Combination within 24 months from the settlement date of the IPO the Company will be dissolved and be liquidated. The Founder Warrants will automatically expire without value upon occurrence of such a liquidation and the Founder Shares will not convert into Ordinary Shares. Only upon the Business Combination date there is clarity among all parties about the value of the awarded Founders Shares and Founder Warrants, as such, the Business combination date is considered to be the grant date of these instruments. As a result, no expense has been recognized in the comprehensive income over the period ending 31 December 2021. 11. Remuneration of the management board and supervisory board The Managing Directors and Mr Riefel as Supervisory Director are not entitled to any cash remuneration or compensation prior to completion of a Business Combination. The independent Supervisory Directors Ms Vijselaar, Mr Peek and Mr Govers are entitled to a cash compensation prior to completion of a Business Combination, which has been set at €30,000 per year. The Managing Directors and Mr Riefel indirectly participate in the Company’s shareholder structure, which can be specified as follows: ◼ Both Managing Directors indirectly through the Sponsor, hold 37,500 Ordinary Shares, 9,375 Market Warrants, 156,250 Founder Shares, 104,166 Founder Warrants. ◼ Mr Riefel, indirectly through the Sponsor, hold 37,500 Ordinary Shares, 9,375 Market Warrants, 156,250 Founder Shares, 104,166 Founder Warrants. Founder Shares Number of shares 6,250,000 Founder Warrants Number of warrants 4,166,667 44 The Sponsor is controlled by Infestos and Stichting Administratiekantoor Infestos Sustainability (STAK). The Managing Directors and Mr Riefel participate and each hold 2.5% in the Sponsor through the STAK. The number of shares and warrants are calculated with reference to the Ordinary Shares of the STAK in the Sponsor. 12. Other receivables The fair value of the receivables approximates the carrying amounts. No breakdown of the fair values of trade and other receivables and the non-current portion of the receivables has been included as the differences between the carrying amounts and the fair values are insignificant. 13. Cash The gross proceeds of the IPO have been deposited in an escrow account held by the Foundation. These amounts will be released only in accordance with the terms of an escrow agreement between the Company, Intertrust Escrow and Settlements B.V., acting under its trade name Intertrust Escrow Services and the Foundation. As such the cash in the escrow account is restricted and not freely available to the Company. The escrow account is subject to a negative interest rate 0.4% for the first 12 months from the Settlement Date and 0.5% for the 12 months thereafter. In EUR ‘000 2021 VAT tax receivable 51 Other receivables 19 Total 69 In EUR ‘000 2021 Bank balances 1,126 Cash in escrow 249,497 Total 250,623 45 14. Group Equity Share capital at 21 January 2021 was divided into 5,000,000 ordinary shares with a par value of €0.01 each. These ordinary shares were issued and paid for the nominal value of €50,000 in aggregate. On 29 January 2021, the Company issued 1,250,000 additional ordinary shares to Infestos Sustainability B.V. at a par value of €0.01 each against payment of €12,500 in aggregate. These 6,250,000 ordinary shares were converted at IPO to Founder Shares. On 29 January 2021, the Company issued 80,000,000 Ordinary Shares at a par value of €0.01 and 3,125,000 transferable rights (warrants) to Infestos Sustainability B.V. against payment of €800,000 which on the same date have been repurchased by the Company as treasury shares and treasury warrants against payment of €800,000 in aggregate. Such treasury shares and treasury warrants are held for the purpose of allotting these shares and warrants to investors around the time of the Business Combination. At IPO the Company issued 4,166,666 Founder Warrants to the Sponsor at a price of €1.50 per Founder Warrant. Each Founder Warrant is exercisable to purchase one Ordinary Share at €11.50, but the Sponsor may elect a cashless exercise in which case it would receive a certain amount of Ordinary Shares based on the fair market value of the Ordinary Shares without being obliged to pay cash, as further set out in the Prospectus. The proceeds from the sale of the Founder Warrants amounting to €6,250,000 were deposited into a bank account of the Company. The issuance of Founder Warrants is recognised in other reserves. Under Dutch law, the Company is not required to have, and does not have, an authorised share capital (maatschappelijk kapitaal), because it is a private company with limited liability. The proposal to the General Meeting is that the 2021 loss for the period will be recognized in other reserves. 15. Redeemable Ordinary Shares and Market Warrants In EUR ‘000 2021 IPO procees based on sale of Units 250,000 Less: innitial recognition of the Market Warrants (6,313) Less: transaction cost (4,550) Carying amount at 11 Febrary 2021 239,137 Effective interest accretion 3,789 Carrying amount per 31 December 2021 242,926 Number of Founder Shares Par value EUR '000 Share premium EUR '000 Total EUR '000 Opening balance 21 January 2021 5,000,000 50 - 50 Share issuance 1,250,000 13 - 13 Balance 31 December 2021 6,250,000 63 - 63 46 At IPO, the Company issued 25,000,000 Ordinary Shares and 6,250,000 Market Warrants as part of a unit for an offer price of €10 per unit. One unit consists of 1 Ordinary Share, 0.125 Market Warrant issuable at IPO and 0.125 Market Warrant allottable after completion of the Business Combination. Each of the Market Warrants will be exercisable after completion of the Business Combination. The Company has 24 months to achieve a business combination. If the Company does not successfully complete an acquisition in this time period, the Company will be liquidated and the proceeds raised pursuant to the IPO will be refunded to the Ordinary Shareholders minus any negative interest and liquidation cost, see going concern paragraph in note 1 above. 16. Other payables All current liabilities fall due in less than one year. The fair value of the current liabilities approximates the carrying amount due to its short-term character. 17. Contingencies and commitments As disclosed in the Prospectus the underwriters are potentially entitled to a BC Underwriting Fee. This fee is only payable upon completion of the Business Combination and will not be paid out of the Costs Cover, but from the funds held in the Escrow Account. As of 31 December 2021, the BC Underwriting Fee is considered a contingent liability under IAS 37, amounting to maximum of €4.1 million. 18. Related party transactions Transactions with related parties are assumed when a relationship exists between the Company and a natural person or entity that is affiliated with the Company. This includes, amongst others, the relationship between the Company and its subsidiaries, shareholders, directors and key management personnel. Transactions are transfers of resources, services or obligations, regardless whether anything has been charged. For transactions with key management personnel refer to note 11. Instrument Number Initial value Fair value at 31 December 2021 Total value as per 31 December 2021 Market warrants 6,250,000 1.01 0.65 4,083,125 In EUR ‘000 2021 Trade payables 6 Tax payables 7 Other liabilities 35 Total 48 47 Transaction with the Sponsors ◼ the charged service fee for the services provided under the consultancy agreement as disclosed in the Prospectus, which amounts to €133 thousand. ◼ The incorporation of the Company (including the costs thereof) including the issuance of the Founder Shares; ◼ the issuance of Ordinary Shares and Market Warrants to the Sponsor as part of the cornerstone investment by the Sponsor; and ◼ the issuance of the Founder Warrants to the Sponsor. 19. Events after the balance sheet date No such events identified. 48 Company financial statements for the period 21 January to 31 December 2021 49 Company balance sheet (Before profit appropriation) In EUR ‘000 Notes 31 December 2021 Assets Current assets Other receivables 1 249,566 Cash and cash equivalents 1,126 Total current assets 250,692 Total assets 250,692 Group equity Issued share capital 2 63 Share premium - Other reserves 2 6,250 Result for the year (3,056) Total equity 3,257 Liabilities Non-current liabilities Redeemable ordinary shares 242,926 Market warrants 4,083 Total non-current liabilities 247,009 Current liabilities Interest payable 378 Other payables 48 Total current liabilities 426 Total liabilities 247,435 Total equity and liabilities 250,692 50 Company income statement Reference is made to the notes of the consolidated financial statements as there are no differences between the consolidated and company income statement In EUR ‘000 2021 Other expenses (612) Operating expenses (612) Operating Loss (612) Fair value adjustment of Market Warrant 2,229 Effective interest on ordinary shares subject to redemption (3,789) Interest expenses (884) Finance costs - net (2,444) Net loss before income tax (3,056) Income tax - Net loss for the period (3,056) 51 Notes to the Company financial statements General information The company financial statements are part of the consolidated financial statements of ESG Core Investments B.V. Basis of preparation The Company financial statements of ESG Core Investments B.V. have been prepared in accordance with Part 9, Book 2 of the Dutch Civil Code. In accordance with sub 8 of article 362, Book 2 of the Dutch Civil Code, the Company financial statements are prepared based on the accounting principles of recognition, measurement and determination of profit, as applied in the consolidated financial statements. These principles also include the classification and presentation of financial instruments, being equity instruments or financial liabilities. In case no other policies are mentioned, refer to the accounting policies as described in the accounting policies in the consolidated financial statements of this Annual report. For an appropriate interpretation, the company financial statements of ESG Core Investments B.V. should be read in conjunction with the consolidated financial statements. All amounts have been rounded to the nearest thousand, unless otherwise indicated. The balance sheet and income statement include references. These refer to the notes. The current financial year covers the period 21 January 2021 until 31 December 2021. 1. Other receivables The gross proceeds of the IPO have been deposited in an escrow account held by the Foundation. These amounts will be released only in accordance with the terms of an escrow agreement between the Company, Intertrust Escrow and Settlements B.V., acting under its trade name Intertrust Escrow Services and the Foundation. In EUR ‘000 2021 VAT tax receivable 51 Receivable Stichting ESG Core Investments Escrow 249,497 Other receivables 18 Total 249,566 52 2. Equity For further details on movements in the different components of the shareholders equity, we refer to the consolidated statement of changes in equity. Under Dutch law, the Company is not required to have, and does not have, an authorised share capital (maatschappelijk kapitaal), because it is a private company with limited liability. The proposal to the General Meeting is that the 2021 loss for the period will be recognized in other reserves. Audit fees The Company incurred the following audit expenses. Note that part of these expenses are included in the IPO transaction costs. The fees listed above relate to the services provided to the Company by accounting firms and external independent auditors as referred to in Section 1(a) of the Dutch Accounting Firms Oversight Act (Wta). Other audit procedures relate to work done in respect of the Prospectus and half year report. Authorization of the financial statements Signed for approval on 21 January 2022 F.C.P van Roij J.G. Slootweg Managing Director Managing Director ESG Core Investments B.V. ESG Core Investments B.V. In EUR ‘000 PwC Accountants N.V. Other network Total network Audit of the financial statements 40 - 40 Other audit procedures 119 - 119 Tax services - - - Other non-audit services - - - Total 159 - 159 Number of Founder Shares Par value EUR '000 Share premium EUR '000 Total EUR '000 Opening balance 21 January 2021 5,000,000 50 - 50 Share issuance 1,250,000 13 - 13 Balance 31 December 2021 6,250,000 63 - 63 53 Other Information 54 Provision in the Articles of Association relating to profit appropriation Article 34. Profits and Distributions. 34.1 The Management Board, with the approval of the Supervisory Board, may decide that the profits realised during a financial year fully or partially be appropriated to increase and/or form reserves. 34.2 Without prejudice to Article 10.3, the profits remaining after application of Article 34.1 shall be put at the disposal of the General Meeting. The Management Board, with the approval of the Supervisory Board, shall make a proposal for that purpose. A proposal to pay a dividend shall be dealt with as a separate agenda item at the General Meeting of Shareholders. 34.3 Distributions from the Company's distributable reserves are made pursuant to a resolution of the Management Board, with the approval of the Supervisory Board. 34.4 The Management Board may, with the approval of the Supervisory Board, decide that a distribution on Shares shall not take place as a cash payment but as a payment in Shares, or decide that holders of Shares shall have the option to receive a distribution as a cash payment and/or as a payment in Shares, out of the profit and/or at the expense of reserves. 34.5 The Company's policy on reserves and dividends shall be determined and can be amended by the Management Board, subject to the approval of the Supervisory Board. The adoption and thereafter each amendment of the policy on reserves and dividends shall be discussed and accounted for at the General Meeting of Shareholders under a separate agenda item. 34.6 A resolution to make a distribution will not be effective until approved by the Management Board. The Management Board may only refuse to grant such approval if it knows or reasonably should foresee that after the distribution the Company would not be able to continue to pay its debts as they fall due. Article 35. Payment of and Entitlement to Distributions. 35.1 Dividends and other distributions will be made payable pursuant to a resolution of the Management Board within four weeks after adoption, unless the Management Board sets another date for payment. 35.2 A claim of a Shareholder for payment of a distribution shall be barred after five years have elapsed after the day of payment. 35.3 For all dividends and other distributions in respect of Ordinary Shares included in the Statutory Giro System the Company will be discharged from all obligations towards the relevant Shareholders by placing those dividends or other distributions at the disposal of, or in accordance with the regulations of, Euroclear Netherlands. 55 Audit opinion 724500MV7E6E5J4MA5362021-01-212021-12-31724500MV7E6E5J4MA5362021-12-31724500MV7E6E5J4MA5362021-01-20724500MV7E6E5J4MA5362021-01-20ifrs-full:IssuedCapitalMember724500MV7E6E5J4MA5362021-01-212021-12-31ifrs-full:IssuedCapitalMember724500MV7E6E5J4MA5362021-12-31ifrs-full:IssuedCapitalMember724500MV7E6E5J4MA5362021-01-20ifrs-full:SharePremiumMember724500MV7E6E5J4MA5362021-01-212021-12-31ifrs-full:SharePremiumMember724500MV7E6E5J4MA5362021-12-31ifrs-full:SharePremiumMember724500MV7E6E5J4MA5362021-01-20ifrs-full:OtherReservesMember724500MV7E6E5J4MA5362021-01-212021-12-31ifrs-full:OtherReservesMember724500MV7E6E5J4MA5362021-12-31ifrs-full:OtherReservesMember724500MV7E6E5J4MA5362021-01-20ifrs-full:RetainedEarningsMember724500MV7E6E5J4MA5362021-01-212021-12-31ifrs-full:RetainedEarningsMember724500MV7E6E5J4MA5362021-12-31ifrs-full:RetainedEarningsMemberiso4217:EURiso4217:EURxbrli:sharesEnschede