EXMAR NV

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Financial report CONTENTS 5.1 ANNUAL REPORT OF THE BOARD OF DIRECTORS TO SHAREHOLDERS 5.2 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME CONSOLIDATED STATEMENT OF CASH FLOWS CONSOLIDATED STATEMENT OF CHANGES IN EQUITY NOTE 1 - ACCOUNTING POLICIES NOTE 2 - SEGMENT REPORTING NOTE 3 - RECONCILIATION SEGMENT REPORTING NOTE 4 – DIVESTITURES NOTE 5 – BUSINESS COMBINATIONS AND OTHER SHARE DEALS NOTE 6 – REVENUE NOTE 7 – GAIN ON DISPOSAL NOTE 8 - VESSEL EXPENSES NOTE 9 – PURCHASE OF GOODS NOTE 10 - GENERAL AND ADMINISTRATIVE EXPENSES NOTE 11 - PERSONNEL EXPENSES NOTE 12 - FINANCE INCOME / EXPENSES NOTE 13 - INCOME TAXES NOTE 14 - VESSELS AND BARGES NOTE 15 - OTHER PROPERTY, PLANT AND EQUIPMENT NOTE 16 - RIGHT-OF-USE ASSETS NOTE 17 – INVESTMENTS IN EQUITY ACCOUNTED INVESTEES NOTE 18 - FINANCIAL INFORMATION EQUITY ACCOUNTED INVESTEES NOTE 19 - BORROWINGS TO EQUITY ACCOUNTED INVESTEES NOTE 20 - TAX ASSETS AND LIABILITIES NOTE 21 - ASSETS HELD FOR SALE NOTE 22 - OTHER INVESTMENTS NOTE 23 - INVENTORIES NOTE 24 - TRADE AND OTHER RECEIVABLES NOTE 25 - RESTRICTED CASH AND CASH AND CASH EQUIVALENTS NOTE 26 - SHARE CAPITAL AND RESERVES NOTE 27 - EARNINGS PER SHARE NOTE 28 – BORROWINGS NOTE 29 - SHARE BASED PAYMENTS NOTE 30 - EMPLOYEE BENEFITS NOTE 31 - TRADE AND OTHER PAYABLES NOTE 32 - FINANCIAL RISKS AND FINANCIAL INSTRUMENTS NOTE 33 – LEASES NOTE 34 - CAPITAL COMMITMENTS NOTE 35 – CONTINGENCIES NOTE 36 - RELATED PARTIES NOTE 37 - GROUP ENTITIES NOTE 38 - FEES STATUTORY AUDITOR NOTE 39 - SUBSEQUENT EVENTS SIGNIFICANT JUDGEMENTS AND ESTIMATES STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FAIR OVERVIEW OF THE MANAGEMENT REPORT STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING OF EXMAR NV FOR THE YEAR ENDED 31 DECEMBER 2022 – CONSOLIDATED FINANCIAL STATEMENTS 5.3 STATUTORY FINANCIAL STATEMENTS 5.1 ANNUAL REPORT OF THE BOARD OF DIRECTORS TO THE SHAREHOLDERS The Board of Directors hereby submits the combined annual report on the individual and consolidated annual accounts of EXMAR NV (the “Company”) dated December 31, 2022 in accordance with articles 3:6 and 3:32 of the Belgian Code of Companies and Associations (“BCCA”). The Company must publish its annual accounts in ac- cordance with the stipulations of the Royal Decree dated November 14, 2007 concerning the obligations of issuers of financial instruments who are entitled to trade on the Belgian regulated market. Any elements that are applicable to the Company in accordance with the BCCA and the above-mentioned Royal Decree shall be covered in this report and in the Corporate Governance Statement. This annual report should consequently be read in conjunction with EX- MAR’s 2022 report. The war in Ukraine causes uncertainty to 2022 not only from a human aspect, but also in terms of the stability of global energy markets. In this context, EXMAR remains committed to play its role in the energy value chain with its floating solutions for the export and import of gas. The potential impact on its activities is being monitored on a daily basis. For completeness, we can confirm that none of our vessels are active in risk areas or under contract with parties subject to international sanctions related to this conflict. Furthermore, utmost effort is done to man- age the logistical challenges in a humane way, both on shore and on board. COMMENTS ON THE CONSOLIDATED ANNUAL ACCOUNTS The consolidated annual accounts were prepared in ac - cordance with International Financial Reporting Stand- ards (IFRS). Below comments are based on the consolidated annual accounts prepared in accordance with IFRS, whereby the joint ventures are accounted for under the equity method. In 2022, the EXMAR Group achieved a consolidated profit of USD 320.3 million (USD 11.6 million in 2021). Revenue increased in 2022 by USD 7.4 million up to USD 155.6 million due to (i) the full year operation of the two newbuilds FLANDERS INNOVATION and FLANDERS PI- ONEER, (ii) the employment of the FSRU EEMSHAVEN LNG, previously called FSRU S188, since August 2022, (iii) higher licence and engineering revenue from differ- ent projects, (iv) inclusion of the EXCALIBUR as from the fourth quarter 2022, (v) Bexco NV entering into scope since November 2022, partially offset by (vi) the early ter- mination fee on the cancellation of the FSRU S188 charter agreement by Gunvor in April 2021 (USD 56.8 million). Gain on disposal amounted to USD 319.6 million in 2022 and primarily resulted from the sale of 100% of the shares of Export LNG Ltd., the owning company of the TANGO FLNG, in August 2022 (USD 315.7 million) and from the derecognition of Bexco NV as joint-venture upon obtain- ing full control (USD 3.5 million). As a consequence of the full year employment of the two VLGC newbuilds of 2021, the change from lay-up to start-up of the EEMSHAVEN LNG, higher engineering activities and the inclusion of Bexco NV since November 2022, operating expenses increased, although in part compensated by lower impairment losses. 2021 included an impairment loss of USD 19.0 million on the FSRU S188 (now EEMSHAVEN LNG) following its unemployment, which was reversed during 2022. Net financial expenses increased from USD 10.6 mil- lion in 2021 to USD 23.4 million in 2022 and can be ex- plained as follows: • Higher interest expenses of USD 6.4 million due to the financing of the new VLGC’s since mid 2021, the effective interest rate correction on the pressurized fleet following the early buy-out, partially offset by lower interests due to the (early) repayment of the NOK bond and the Bank of China loan facility for the TANGO FLNG; • USD 7.8 million net exchange losses resulting from a USD 5.6 million loss on the settlement of EUR-USD short-term swaps and lower NOK exchange gains (the NOK bond was repaid in May 2022); • USD 6.2 million higher amortization and banking fees due to the accelerated recognition of the capitalized financing fees of the Bank of China and Sequoia cred- it facilities upon their early termination and related cancellation fees; • USD 5.2 million interest income resulting from the higher cash position of EXMAR after the proceeds of the sale of the owner of TANGO FLNG; • USD 2.5 million premium refund resulting from the early repayment of the Bank of China facility. 1095. Financial report The share of equity accounted investees increased from USD 21.8 million in 2021 to USD 32.0 million in 2022 main- ly as a result of higher net result at the LPG joint venture. Vessels and barges amounted to USD 438.0 million at year-end 2022, a decrease of USD 210.5 million, which is the combined effect of the sale of TANGO FLNG, through the sale of 100% of the shares in the owning company Export LNG Ltd. (USD 256.2 million), the depreciation charge of the year (USD 31.6 million), the acquisition of the EXCALIBUR (USD 39.9 million), capitalized dry-dock expenses (USD 19.9 million) and USD 18.3 million impair- ment reversal of the FSRU S188 (now EEMSHAVEN LNG). Other property, plant and equipment increased by USD 13.3 million primarily as a result of the inclusion of Bexco NV. Investments in equity accounted investees increased by USD 20.3 million up to USD 107.1 million end 2022, primarily as a result of our share in the net result of these joint ventures and associated companies (USD 32.0 mil- lion), offset by Bexco NV and Solaia Shipping LLC which are no longer joint ventures (impact of USD 11.6 million) and dividends received (USD 2.1 million). The borrowings to equity accounted investees (both non-current and current) amounted to USD 7.0 million end 2022 and comprise the shareholder loan to our asso- ciated company Electra Offshore Ltd which was reduced to its expected recoverable amount. During 2022, EX- MAR LPG repaid its outstanding loans (USD 32.3 million at year-end 2021). At year-end 2021, the assets held for sale contained the aircraft, which was sold early 2022. As a result of the acquisition of Bexco NV in 2022, the Group had inventories of USD 9.2 million at year-end 2022. Excluding the final YPF settlement fees of USD 24.4 mil- lion received in 2022, current trade and other receiv- ables increased by USD 36.3 million due to Bexco NV entering into scope, new receivables from the charter and/or service agreements for the EEMSHAVEN LNG, TANGO FLNG and EXCALIBUR and higher advances paid to suppliers. In 2021, the restricted cash of USD 76.1 million related to the credit facility of Bank of China for the TANGO FLNG. This balance was released in 2022 upon the early repayment of the loan. The cash position on December 31, 2022 amounted to USD 519.6 million and increased by USD 448.4 million mainly thanks to the receipt of the net proceeds of the sale of Export LNG Ltd. to Eni. Equity amounted to USD 798.7 million end 2022, or a strengthening of USD 262.2 million primarily as a result of USD 320.3 million profit of the year, offset by the pay- ment of USD 59.8 million dividends. End 2022, borrowings (non-current and current) amount- ed to USD 218.3 million (2021: USD 424.8 million). The decrease of USD 206.5 million is in essence explained by the (early) repayment of the TANGO FLNG (USD 129.3 million) and NOK bond facilities (USD 71.3 million). Other non-current payables comprise a contingent con- sideration liability of USD 78.0 million at year-end 2022 related to a price adjustment clause in the sales agree - ment with Eni. Trade and other payables increased by USD 38.3 million to USD 75.5 million end 2022 due to Bexco NV and Solaia Shipping LLC entering into the consolidation scope and higher Infrastructure activities related to the EEMSHAV- EN LNG and TANGO FLNG. COMMENTS ON THE STATUTORY FINANCIAL STATEMENTS The statutory accounts were prepared in accordance with Belgian GAAP and accounting principles were consist- ently applied. These accounts will be presented for ap- proval to the General Meeting of Shareholders on May 16, 2023. The below comments cover the main items of the statu- tory annual accounts: The operational result amounted to USD -10.8 million in 2022 (2021: USD -4.5 million). Financial result improved from USD -23.9 million in 2021 (loss) to USD 247.1 million in 2022 primarily due to divi- dends received (USD 241.4 million) from group compa- nies and lower impairment losses on intercompany loans. The statutory result for the financial year amounts to a profit of USD 236.0 million compared to a loss of USD -28.6 million in 2021. At the end of 2022, the total assets amounted to USD 857.1 million, including USD 280.6 million financial fixed asset and USD 495.8 million investments (mainly term deposits) and cash. During 2022, intra-group receiva- bles were repaid for USD 262.0 million and the cash po- sition increased significantly by USD 441.4 million due to an upstream of cash resulting from the sale of 100% of the shares of Export LNG Ltd., the owner of the TAN- GO FLNG. Equity amounted to USD 744.2 million at the end of 2022 (2021: USD 564.2 million) and increased by the profit of the year of USD 236.0 million and decreased by the intermediary dividend distribution of USD 56.0 million. On November 2, 2022, the General Meeting of Share- holders approved a gross intermediary dividend of EUR 0.95 per share or a gross dividend of EUR 56.5 million or USD 56.0 million. The provisions decreased by USD 9.0 million as a fi - nancial guarantee given to intra-Group companies was settled. 110 5. Financial report Liabilities amounted to USD 112.1 million end 2022 com- pared to USD 101.0 million in 2021. At the General Meeting of Shareholders on May 16, 2023, the Board of Directors will propose to distribute a gross dividend of EUR 1,00 per share and to allocate the result of the year as follows: Profit carried forward: USD 183,668,811.64 Profit of the financial year: USD 235,991,843.69 Transfer to reserves: USD -8,144,999.03 Intermediary dividend USD -56,038,885.00 RESULT TO APPROPRIATE: USD 355,476,771.30 Dividend payable: USD 63,462,700.00 Result to carry forward: USD 292,014,071.30 RISK FACTORS As described in the Corporate Governance Statement. NON-FINANCIAL INFORMATION As described in chapter 3.1 ESG of the EXMAR 2022 report. SUPPLEMENTARY INFORMATION Research and Development As described in chapter 3.1 ESG of the EXMAR 2022 report. Employees On December 31, 2022 EXMAR’s global staff comprised 1,926 employees, including 1,508 crew at sea (2021: 1,849, including 1,615 crew at sea). Many of the crew at sea are employed on assets owned or operated by our equity accounted investees; the cor - responding expenses are not included in EXMAR’s con- solidated personnel or crew expenses. Acquisition or sale of treasury shares There were no such transactions in 2022. We refer to the Corporate Governance Statement. On December 31, 2022 EXMAR owned 2,273,263 own shares, representing 3.82% of the total number of shares issued. Justification of the Accounting Principles The accounting principles applied during the closure of the statutory annual accounts do not differ from the ac- counting principles applied during the previous financial year. A summary of the accounting principles of valua- tion is attached to the statutory annual accounts. For the consolidated financial statements please refer to the section on valuation principles for the consolidated an- nual accounts. Defensive Mechanisms Described in the Corporate Governance Statement. Branch offices EXMAR NV has no branch offices. Stock Option Plan So far, the Board of Directors has decided on ten occa- sions (10 plans) to offer a number of employees of the EXMAR Group options on existing shares. As of December 31, 2022 only one plan is still open (we also refer to Note 29 Share based payments of the con- solidated annual report): Plan 10 Date of offer: December 4, 2015 Number of outstanding options: 321,250 Exercise period: January 1, 2019 until December 3, 2023 Exercise price in EUR: 9.62 Additional activities carried out by the Statutory Auditor During the past financial year, the Statutory Auditor or companies or persons related to the Statutory Auditor, have been involved in audit related matters and has pro- vided limited tax services for the Group. The non-audit fees did not exceed the Group audit fees. Financial instruments The long-term vision, that is typical of EXMAR’s activities, is accompanied by long-term financing and therefore EXMAR’s activities are also exposed to floating inter- est rates. EXMAR actively manages this exposure and if deemed appropriate could cover itself for rising in- terest rates for a part of its debt portfolio by means of various instruments. The Group’s currency risk is histori- cally mainly affected by the EUR/USD ratio for manning its fleet, paying salaries and all other personnel related expenses. As per December 31, 2022, the Company had no financial instruments in place to cover the EUR/USD. At year-end 2022, EXMAR had purchased EUR 75.6 mil- lion daily swaps for USD 80.6 million. Application of article 7:96 of the Belgian Code of Companies and Associations Per Article 7:96 of the Belgian Code of Companies and Associations (BCCA) directors who have a conflict of in- terest with respect to a decision to be taken by the Board have to inform the other directors of this before the de- cision is taken and may not participate in the discussion and decision making. Such declaration and the nature of the conflict of interest have to be set out in the minutes, which also have to describe the nature of the Board’s de- cision, its financial consequences for the Company and its justification. This part of the minutes is to be included in the annual financial report, and goes as follows. The Nomination and Remuneration Committee discussed the 2022 bonus proposal for the group, a total amount of EUR 7,3 million, to be paid by the Company. The pro- posal is submitted to the Board for approval. 1115. Financial report Prior to the Board discussion the directors Nicolas Sav- erys, as director and shareholder of Saverex NV, Steph- anie Saverys, as director and shareholder of Saverex NV, FMO BV (represented by Francis Mottrie) and Carl-An- toine Saverys, as director and shareholder of Saverex NV and in own name, inform the other directors that they have a pecuniary interest that conflicts with that of the Company, as they are, indirectly or directly, benefi- ciaries of proposed bonuses. They will not participate in the discussion or take part in the decision-making on the recommendation of the Committee and leave the meeting during the discussion and decision-making on the proposal. The following bonuses are proposed: - EUR 2,000,000 to Saverex NV - EUR 500,000 to FMO BV - EUR 125,000 to Carl-Antoine Saverys - EUR 573,760 to the other members of the Executive Committee (allocated as per the recommendation of the Committee) - The balance of the amount to members of the Exmar group personnel As per the recommendation of the Audit and Risk Com- mittee, the Board is of the opinion that the procedure laid out in Article 7:97 BCCA is not to be applied with respect to the bonus to Saverex NV, as the value (including all transactions with respect to Saverex NV during the last 12 months) is less than 1% of the net assets of the Com- pany on consolidated basis. The Nomination and Remuneration Committee recom- mends to the Board to approve the proposal. The Board, having duly considered the financial impact for the Com- pany of the 2022 bonus proposal as set forth above, is of the opinion that the proposal is justified because of extraordinary achievements in 2022 by the beneficiaries and for retention purposes. The Board decides to ap- prove the recommendation from the Committee, and that it will submit the bonus proposal for Saverex NV to the General Meeting of Shareholders, for approval. The Committee also discussed the proposal to increase the remuneration of certain members of the Executive Committee and personnel, and the fee under the con- sultancy agreement with Saverex. The proposal is sub- mitted to the Board for approval. Prior to the Board discussion the directors Nicolas Sav- erys, as director and shareholder of Saverex NV, Steph- anie Saverys, as director and shareholder of Saverex NV, and Carl-Antoine Saverys, as director and shareholder of Saverex NV and in own name, inform the other Board members that they have a pecuniary interest that con- flicts with that of the Company, as they are, indirectly or directly, beneficiaries of the increase of remuneration. They will not participate in the discussion or take part in the decision-making on the recommendation of the Committee and leave the meeting during the discussion and decision-making on the proposal. An increase of the yearly fee under the consultan - cy agreement with Saverex NV is proposed to EUR 1,200,000, from 2023 onwards. For Carl-Antoine Sav- erys an increase is proposed to EUR 250,000 per year from 2023 onwards. The Committee recommends to the Board to approve both proposals. The Board, having duly considered the financial impact for the Company of the salary adjust- ment proposal as set forth above, is of the opinion that the proposal is justified because of extraordinary work delivered in 2022 and also for retention purposes, and in accordance with the Company’s remuneration policy. The Board decides to approve the recommendation from the Committee. Significant events after balance sheet We refer to Note 39 Subsequent events of the consoli- dated annual report. OUTLOOK Shipping: Very Large Gas Carriers (VLGC) EXMAR’s LPG fuelled 88,000 m³ VLGC 2021 newbuilds, FLANDERS INNOVATION and FLANDERS PIONEER are serving a long-term time-charter agreement with Equinor ASA (Norway). With the large capacity and the dual fuel LPG engine, these vessels represent the best technolo- gy available today with respect to reducing greenhouse gas emissions. The VLGC BW TOKYO performed well in the course of 2022 in the BW VLGC pool and we expect similar per- formance in 2023. Midsize Gas Carriers (MGC) During 2022, 40% of EXMAR’s Midsize fleet was dedicat- ed to transporting ammonia and 60% to LPG. For 2023 the ammonia share is expected to increase up to 50%. EXMAR, which has a 50 / 50 joint venture with SEAPEAK for the Midsize fleet, continues to build on its existing loy- al customer base with extensions of existing time charter contracts at profitable levels. At the beginning of 2023, 80% of EXMAR’s Midsize fleet has already been commit- ted to these clients for 2023. Pressurized EXMAR’s pressurized fleet of 10 ships remained dedicat- ed to well-established industrial and long- term partners, both in North-West Europe and in Asia. Begin 2023, the time charter coverage for 2023 stands at 86%. Liquefied Natural Gas (LNG) EXMAR acquired the 50% share from the joint venture partner SEAPEAK of the LNG carrier EXCALIBUR in Sep- tember 2022. The LNG carrier EXCALIBUR primarily served for transporting LNG worldwide under a long- term charter party. As this charter came to an end in December 2021, new opportunities were explored and the EXCALIBUR is now under a 10-year charter for the Eni Marine XII infrastructure project in Congo, to serve as floating storage unit alongside the floating liquefac- tion plant TANGO FLNG. 112 5. Financial report Infrastructure: Floating LNG barges TANGO FLNG is a floating LNG terminal which liquefies natural gas into LNG, which is then offloaded into LNG carriers laying alongside for export to LNG-importing countries. On August 5, 2022 EXMAR entered into a share purchase agreement to sell the shares of Export LNG Ltd, the owning company of the TANGO FLNG, to Eni. The barge will be used by Eni in the Republic of Congo, as part of the activities of the natural gas devel- opment project in the Marine XII block, in line with Eni’s strategy to leverage gas equity resources. For FSRU S188, renamed EEMSHAVEN LNG, EXMAR and GASUNIE announced in March 2022 an agreement for a five-year charter for the employment of the regasification barge, and as such they joined forces in enhancing Euro - pean energy security. GASUNIE will use the regasifica- tion barge as floating LNG import terminal at Eemshaven in Groningen, the Netherlands. The EEMSHAVEN LNG arrived at its employment location in September 2022, and has subsequently been commissioned and started commercial LNG operations. Accommodation barges The employment of the accommodation and work barge NUNCE has confirmed its reputation of high standard services to its customer offshore Angola, and its contract was extended until May 2023. The accommodation and work barge WARIBOKO, is avail- able for new services, with potential destinations being developed for a short- to mid-term employment. Supporting Services: Ship Management 2022 has been a very busy year especially for the Infra- structure business unit of EXMAR Ship Management, following the agreements with Eni for the employment of the TANGO FLNG and EXCALIBUR and the deploy- ment of EEMSHAVEN LNG, which will continue in 2023. BEXCO The outlook for 2023 is positive with strong demand ex- pected for Bexco’s tailor-made rope solutions for off- shore wind as well as for its deep-water mooring ropes. TRAVEL PLUS After the unprecedented drop in foreign travel due to the pandemic during 2020 and 2021, international tour- ism experienced a gradual recovery in 2022. Travel Plus returned to full operational strength from March 2022, and while results have not reached the same heights as the pre-pandemic period in 2019, the company is well on its way. Approval and discharge of the annual accounts We hereby request the General Meeting of Shareholders to approve this report for the year ending December 31, 2022 in its entirety and to appropriate the results as pro- vided in this report. We also request the shareholders to grant discharge to the directors and Statutory Auditor for the performance of their mandate during the above-men- tioned financial year. Appointments The following mandates will expire at the General Meet- ing of Shareholders: • Philippe VLERICK, non-executive director • Deloitte Bedrijfsrevisoren / Réviseurs d’Entreprises BV/SRL, statutory auditor The Board of Directors, March 28, 2023 1135. Financial report 104 5. Financial report 5. Financial report 105 5.2 CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED STATEMENT OF FINANCIAL POSITION (In thousands of USD) Note 2022 2021 Non-current assets 571,810 767,312 Vessels and barges 14 437,966 648,436 Other property, plant and equipment 15 14,556 1,274 Intangible assets 225 82 Right-of-use assets 16 10,910 6,000 Investments in equity accounted investees 17 107,082 86,760 Borrowings to equity accounted investees 19 0 24,760 Deferred tax assets 20 1,071 0 Current assets 606,465 234,083 Assets held for sale 21 0 12,500 Derivative ﬁnancial assets 573 920 Other investments 22 1,849 1,849 Inventories 23 9,217 0 Trade and other receivables 24 67,089 55,154 Borrowings to equity accounted investees 19 7,000 15,407 Current tax assets 20 1,185 1,003 Restricted cash 25 0 76,121 Cash and cash equivalents 25 519,553 71,130 Total assets 1,178,276 1,001,395 Equity 798,691 536,503 Equity attributable to owners of the Company 798,511 536,231 Share capital 26 88,812 88,812 Share premium 26 209,902 209,902 Reserves 179,480 225,918 Result for the period 320,317 11,600 Non-controlling interest 180 272 Non-current liabilities 250,370 315,347 Borrowings 28 167,548 313,816 Other payables 4 78,000 0 Employee beneﬁt obligations 30 1,040 730 Provisions 800 800 Deferred tax liabilities 20 2,982 0 Current liabilities 129,215 149,546 Borrowings 28 50,800 110,995 Trade and other payables 31 75,542 37,241 Current tax liability 20 2,873 1,309 Total liabilities 379,585 464,892 Total equity and liabilities 1,178,276 1,001,395 106 5. Financial report CONSOLIDATED STATEMENT OF PROFIT AND LOSS AND OTHER COMPREHENSIVE INCOME (In thousands of USD) CONSOLIDATED STATEMENT OF PROFIT OR LOSS Note 2022 2021 Revenue 6 155,604 148,229 Gain on disposal 7 319,643 52 Other operating income 1,601 990 Operating income 476,848 149,272 Vessel expenses 8 -60,121 -45,068 Raw materials and consumables used 9 -3,447 0 General and administrative expenses 10 -39,293 -24,536 Personnel expenses 11 -32,333 -27,349 Depreciations and amortisations 14/15/16 -33,624 -31,364 Impairment losses and reversals 14/19/24 4,768 -17,585 Loss on disposal 0 -100 Other operating expenses -25 -888 Result from operating activities 312,773 2,382 Interest income 12 7,125 1,537 Interest expenses 12 -21,954 -15,526 Other ﬁnance income 12 9,525 10,198 Other ﬁnance expenses 12 -18,055 -6,785 Net ﬁnance result -23,359 -10,577 Result before income tax and share of result of equity accounted investees 289,414 -8,195 Share of result of equity accounted investees (net of income tax) 17 32,007 21,769 Result before income tax 321,420 13,574 Income tax expense 13 -1,072 -1,939 Result for the period 320,348 11,635 Attributable to: Non-controlling interest 30 35 Owners of the Company 320,317 11,600 Result for the period 320,348 11,635 Basic earnings per share (in USD) 5.60 0.20 Diluted earnings per share (in USD) 5.60 0.20 CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME Result for the period 320,348 11,635 Items that are or may be reclassiﬁed subsequently to proﬁt or loss: Equity accounted investees - share in other comprehensive income 17 1,944 618 Foreign currency translation differences 577 -1,521 Other -202 Items that will never be reclassiﬁed to proﬁt and loss: Employee beneﬁts - remeasurements of deﬁned beneﬁt liability/assets 30 -706 647 Total other comprehensive income for the period (net of tax) 1,613 -256 Total comprehensive income for the period 321,961 11,378 Attributable to: Non-controlling interest 37 15 Owners of the Company 321,924 11,364 5. Financial report 107 CONSOLIDATED STATEMENT OF CASH FLOWS (In thousands of USD) Note 2022 2021 Result for the period 320,348 11,635 Share of result of equity accounted investees (net of income tax) 17 -32,007 -21,769 Depreciations & amortisations 14/15/16 33,624 31,364 Impairment losses and reversals 14/19/24 -4,768 17,585 Net ﬁnance result 12 23,359 10,577 Income tax expense/ (income) 13 1,072 1,939 Net (gain)/ loss on sale of assets 7 -319,643 48 Other non-cash items 28 -1,193 0 Realized foreign currency gains (losses) 12 -3,357 1,310 Gross cash ﬂow from operating activities 17,436 52,689 Increase/(decrease) of inventories 2,268 0 (Increase)/decrease of trade and other receivables -6,488 75,394 Increase/(decrease) of trade and other payables 27,512 1,752 Increase/(decrease) in provisions and employee beneﬁts -361 552 Cash generated from operating activities 40,368 130,387 Interest paid -18,483 -16,412 Interest received 5,411 351 Income taxes paid -1,311 -2,405 NET CASH FROM OPERATING ACTIVITIES 25,985 111,921 Acquisition of vessels and vessels under construction 14 -19,867 -135,302 Acquisition of other property plant and equipment 15 -554 -250 Acquisition of intangible assets -51 -79 Proceeds from the sale of vessels and other property, plant and equipment 13,722 298 Dividends from equity accounted investees 17 2,079 379 Other dividends received 18 16 Proceeds from the sale of a subsidiary, net of cash disposed off 4 646,599 0 Acquisition of subsidiaries, net of cash acquired 5 -9,169 0 Acquisition of an asset through an other asset deal, net of cash acquired 5 -4,698 0 Borrowings to equity accounted investees 19 -41,085 -590 Repayments from equity accounted investees 19 52,260 10,000 NET CASH FROM INVESTING ACTIVITIES 639,253 -125,528 Dividend paid 26 -59,646 -20,601 Proceeds from new borrowings 28 50,014 144,000 Repayment of borrowings 28 -279,818 -62,532 Repayment of lease liabilities IFRS 16 (principal portion) 28 -1,476 -1,554 Payment of debt transaction costs & banking fees -2,577 -1,520 Increase in restricted cash 0 -546 Release restricted cash 25 76,121 0 NET CASH FROM FINANCING ACTIVITIES -217,383 57,248 NET INCREASE/ (DECREASE) IN CASH AND CASH EQUIVALENTS 447,856 43,641 Net cash and cash equivalents at 1 January 25 71,130 28,195 Net increase/(decrease) in cash and cash equivalents 447,856 43,641 Exchange rate ﬂuctuations on cash and cash equivalents 568 -706 NET CASH AND CASH EQUIVALENTS AT 31 DECEMBER 25 519,553 71,130 108 5. Financial report CONSOLIDATED STATEMENT OF CHANGES IN EQUITY (In thousands of USD) Note Share capital Share premium Retained earnings Reserve for treasury shares Translation reserve Hedging reserve Share-based payments reserve Total Non- controlling interest Total equity Opening equity as previously reported per January 1, 2022 88,812 209,902 282,048 -44,349 -3,028 761 2,086 536,231 271 536,503 Comprehensive result for the period Result for the period 320,317 320,317 30 320,348 Foreign currency translation differences 26 570 570 7 577 Foreign currency translation differences - share equity accounted investees 17 -305 -305 -305 Employee beneﬁts - remeasurement net deﬁned beneﬁt obligations 30 -706 -706 -706 Other -202 -202 -202 Net change in fair value of cash ﬂow hedges - share equity accounted investees 17 2,249 2,249 2,249 Total other comprehensive result 0 0 -908 0 265 2,249 0 1,606 7 1,613 Total comprehensive result for the period 0 0 319,409 0 265 2,249 0 321,924 37 321,961 Transactions with owners of the Company Dividends declared 26 -59,646 -59,646 -128 -59,775 Share-based payments 865 -865 0 0 Total transactions with owners of the Company 0 0 -58,781 0 0 0 -865 -59,646 -128 59,646-59,775 Closing equity per December 31, 2022 88,812 209,902 542,676 -44,349 -2,763 3,010 1,221 798,509 179 798,690 5. Financial report 109 (In thousands of USD) Note Share capital Share premium Retained earnings Reserve for treasury shares Translation reserve Hedging reserve Share-based payments reserve Total Non- controlling interest Total equity Opening equity as previously reported per January 1, 2021 88,812 209,902 289,079 -44,349 -1,086 -298 3,598 545,658 256 545,915 Comprehensive result for the period Result for the period 11,600 11,600 35 11,635 Foreign currency translation differences 26 -1,501 -1,501 -20 -1,521 Foreign currency translation differences - share equity accounted investees 17 -441 -441 -441 Employee beneﬁts - remeasurement net deﬁned beneﬁt obligations 30 647 647 647 Net change in fair value of cash ﬂow hedges - share equity accounted investees 17 1,059 1,059 1,059 Total other comprehensive result 0 0 647 0 -1,942 1,059 0 -236 -20 -256 Total comprehensive result for the period 0 0 12,247 0 -1,942 1,059 0 11,364 15 11,378 Transactions with owners of the Company Dividends declared 26 -20,791 -20,791 -20,791 Share-based payments 1,513 -1,513 0 0 Total transactions with owners of the Company 0 0 -19,278 0 0 0 -1,513 -20,791 0 -20,791 Closing equity per December 31, 2021 88,812 209,902 282,048 -44,349 -3,028 761 2,086 536,231 271 536,503 110 5. Financial report NOTE 1 - ACCOUNTING POLICIES A. REPORTING ENTITY EXMAR NV (“the Company”) is a company domiciled in Belgium whose shares are publicly traded (Euronext – EXM). The consolidated ﬁnancial statements of the Group comprise the Company, its subsidiaries, and the Group’s inter- est in associates and joint arrangements (referred to as the “Group”). The Group is active in the industrial shipping business. B. BASIS OF PREPARATION The consolidated ﬁnancial statements have been prepared in accordance with International Financial Reporting Stand- ards (IFRS) issued by the International Accounting Standards Board (IASB) as adopted by EU on December 31, 2022. The accounting policies adopted in preparing the 2022 consolidated ﬁnancial statements are consistent with those applied in the previous ﬁnancial year, except for the items below. New and amended standards and interpretations, effective in 2022 The Group applied for the ﬁrst time certain standards and amendments, which are effective for annual periods be- ginning on or after January 1, 2022: • Amendments to IFRS 3 Business Combinations; Connectional Framework; • Amendments to IAS 16 Property, Plant and Equipment: Proceeds before Intended Use; • Amendments to IAS 37 Contingent Liabilities and Onerous Contracts – Cost of Fulﬁlling a Contract. The Group believes that these have little or no impact on its consolidated ﬁnancial statements. The Group has not early adopted any other standard, interpretation or amendment that has been issued but is not yet effective. Standards issued but not yet effective A number of new standards, amendments to standards and interpretations are not yet effective for the year ended December 31, 2022 and have not been applied in preparing these consolidated ﬁnancial statements. The follow- ing new or amended standards or interpretations, effective January 1, 2023, are not expected to have a signiﬁcant impact on the Group’s consolidated ﬁnancial statements: • IFRS 17 Insurance Contracts; • Amendments to IAS 1 Classiﬁcation of Liabilities as Current or Non-current; • Amendments to IAS 8 Deﬁnition of Accounting Estimates; • Amendments to IAS 1 and IFRS Practice Statement 2: Disclosure of Accounting Policies; • Amendments to IAS 12 Deferred Tax related to Assets and Liabilities arising from a Single Transaction; The consolidated ﬁnancial statements were approved and were authorised for issue by the Board of Directors on March 28, 2023. C. BASIS OF MEASUREMENT AND PRESENTATION The consolidated ﬁnancial statements are presented in thousands of USD, which is also the functional currency of the parent company. The Financial Services and Markets Authority (FSMA) approved the use of the USD as report- ing currency by letter of July 2, 2003 as the majority of the Group’s shipping activities and related ﬁnancing are expressed in USD. All values are rounded to the nearest thousand. The ﬁnancial statements are prepared on the historical cost basis except for the following material assets and lia- bilities that have been measured on an alternative basis on each reporting date: derivative ﬁnancial instruments, equity securities at FVTPL and the net deﬁned beneﬁt liability. Assets held for sale are stated at the lower of carry- ing amount and fair value less cost to sell. 5. Financial report 111 D. USE OF JUDGEMENTS AND ESTIMATES The preparation of the consolidated ﬁnancial statements in accordance with IFRS requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amounts of assets and liabilities, income and expenses, the accompanying disclosures and the disclosure of con- tingent liability. The estimates and related assumptions are based on historical experience and various other fac- tors that are believed to be reasonable under the circumstances. Actual results may differ from these estimates. The estimates and the underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised if the revision only affects that period, or in the period of the revision and future periods, if the revision affects both current and future periods. Judgements In the process of applying the Group’s accounting policies, management has made the following judgements, which have a signiﬁcant impact on the amounts reported in the consolidated ﬁnancial statements: Assessment of exercising purchase options Determining whether EXMAR will exercise purchase options on ﬁnanced assets requires judgment and impacts the useful life of the related assets. All facts and circumstances relevant to the assessment are considered. Speciﬁcally, for the pressurized ﬂeet, management has made the assumption that the purchase options for the 7 vessels will be exercised before or at the end of the respective ﬁnancing agreements. Estimates and assumptions The key assumptions concerning the future and other key sources of estimation uncertainty at the reporting date, that have a signiﬁcant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next ﬁnancial year, are described below. The Group based its assumptions and estimates on parameters available when the consolidated ﬁnancial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond control of the Group. Such changes are reﬂected in the assumptions when they occur. Impairment of vessels and barges The Group reviews the carrying amount of each vessel for potential impairment at least annually or whenever events or changes in circumstances indicate that the carrying amount of a speciﬁc vessel may not be fully recoverable. The recoverable amount is the highest of the fair value less cost to sell and the value in use. The fair value less cost to sell is determined based upon independent valuation reports. The Group engages two independent valuation specialists to assess fair values at reporting date. The carrying values of the vessels may not represent the fair market value at any point in time since the market prices of second hand vessels tend to ﬂuctu- ate with changes in charter rates and the cost of new buildings. Historically, both charter rates and vessel values tend to be cyclical. The value in use is based upon future cash ﬂows discounted to their present value. In developing estimates of future cash ﬂows, management makes assumptions about expected operation date (in case of temporarily unemployed vessels), future charter rates, ship operating expenses, the estimated remaining useful lives of the ﬂeet and the WACC. These assumptions are based on historical trends as well as future expectations. Although management believes that the assumptions used to evaluate potential impairment are reasonable and appropriate, such assump- tions are highly subjective. We refer to Note 14 Vessels and barges for additional information on the assumptions applied at year-end. Climate change and sustainability related developments Climate related matters and measures such as the introduction of emission reduction legislation may have a signif- icant impact on the EXMAR business and its customers. EXMAR is closely monitoring current developments and measures related to climate change and sustainability (see also section 3.1. ESG of this annual report), and believes these currently do not result in fundamentally changed expectations regarding useful lives or recoverability of our ﬂeet. In the sensitivity analysis of the annual impairment test of vessels and barges, the age and emission rating of each particular asset was considered. 112 5. Financial report E. SIGNIFICANT ACCOUNTING POLICIES A. BASIS OF CONSOLIDATION Business combinations The Group accounts for business combinations using the acquisition method when control is transferred to the Group. In determining whether a particular set of activities and assets is a business, the Group assesses whether the set of assets and activities acquired includes, at a minimum, an input and substantive process and whether the acquired set has the ability to produce outputs. The Group has an option to apply a ‘concentration test’ that permits a simpliﬁed assessment of whether an acquired set of activities and assets is not a business. The optional concentration test is met if substantially all of the fair val- ue of the gross assets acquired is concentrated in a single identiﬁable asset or group of similar identiﬁable assets. Goodwill is initially measured at the acquisition date as the excess of the aggregate of the fair value of the consider- ation transferred, plus the recognized amount of any non-controlling interests in the acquire, plus – if the business combination is achieved in stages – the fair value of the existing equity interest in the acquire, less the net recog- nized amount (generally at fair value) of the identiﬁed assets and liabilities assumed. When the excess is negative, a bargain purchase gain is immediately recognized in proﬁt or loss. Transaction costs are expensed as incurred, except if related to the issue of debt or equity securities. The consideration transferred does not include amounts related to the settlement of pre-existing relationships. Such amounts are generally recognised in proﬁt or loss. Any contingent consideration is measured at fair value at the date of acquisition. If an obligation to pay contingent consideration that meets the deﬁnition of a ﬁnancial instrument is classiﬁed as equity, then it is not remeasured and settlement is accounted for within equity. Otherwise, other contingent consideration is remeasured at fair value at each reporting date and subsequent changes in fair value are recognised in proﬁt or loss. Subsidiaries Subsidiaries are those entities controlled by the Group. The Group controls an entity when it is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. The ﬁnancial statements of subsidiaries are included in the consolidated ﬁnancial statements from the date on which control commences until the date on which control ceases. All intra-Group balances, income and expenses, unre- alized gains and losses and dividends resulting from intra-Group transactions are eliminated in full. Loss of control Upon the loss of control, the Group derecognizes the assets and liabilities of the subsidiary, and non-controlling interests and the other components of equity related to the subsidiary. Any surplus or deﬁcit arising on the loss of control is recognized in proﬁt and loss. If the Group retains any interest in the previous subsidiary, then such inter - est is measured at fair value at the date the control is lost. Interests in equity-accounted investees The Group’s interest in equity accounted investees comprises interests in associates and joint ventures. Associates are those entities in which the Group has signiﬁcant inﬂuence, but not control or joint control, over the ﬁnancial and operating policies. Signiﬁcant inﬂuence is presumed to exist when the Group holds between 20% and 50% of the voting power. A joint venture is an arrangement in which the Group has joint control, whereby the Group has rights to the net assets of the arrangement, rather than rights to its assets and obligations for its liabilities. Investments in associates and joint ventures are accounted for using the equity method and are recognised initially at cost. The cost of the investment includes transaction costs. Subsequent to initial recognition, the consolidated ﬁnan- cial statements include the Group’s share of the proﬁt or loss and OCI of equity accounted investees, from the date that signiﬁcant inﬂuence or joint control commences until the date that signiﬁcant inﬂuence or joint control ceases. When the share of the Group in the losses exceeds its interest in an equity accounted investee, the carrying amount of that interest is reduced to zero, and the recognition of future losses is discontinued, except to the extent that the Group has an obligation or has made payments on behalf of the investee. In such case the negative investment in equity ac- counted investees is deducted from other components of the investor’s interest in the equity accounted investee (bor- rowings to equity accounted investees). If the negative investment in equity accounted investees exceeds the investor’s interest, a liability is recognized for the net amount. Unrealised gains arising from transactions with equity accounted investees are eliminated against the investment to the extent of the Group’s interest in the investee. Unrealised loss- es are eliminated in the same way as unrealised gains, but only to the extent that there is no evidence of impairment. 5. Financial report 113 B. FOREIGN CURRENCY Functional currency Each entity prepares its individual ﬁnancial statements in the currency of the primary economic environment in which the entity operates (i.e. the functional currency). Several European and Hong Kong based entities have the USD as functional currency as the majority of their cash ﬂows are expressed in USD. Transactions and balances In preparing the individual ﬁnancial statements, transactions in currencies other than the entities’ functional cur- rency are recorded at the exchange rate applicable at the date of the transaction. At the reporting date, monetary assets and liabilities denominated in foreign currencies are translated to the func- tional currency spot exchange rates at that date. The non-monetary assets and liabilities that are measured in terms of historical cost are translated to the functional currency at the exchange rate at the date of the initial transactions. Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date the fair value was determined. Foreign exchange differences arising on translation are recognised in the proﬁt or loss statement, except for (i) quali- ﬁed cash ﬂow hedges to the extent that the hedges are effective, and (ii) monetary items that are designated as part of the hedge of the Group’s net investment in a foreign operation, which are recognised in other comprehensive income. Upon disposal of the hedge and or net investment, the cumulative amount is reclassiﬁed to proﬁt or loss. Consolidation of foreign operations On consolidation, assets and liabilities of foreign operations, including goodwill and fair value adjustments aris- ing on acquisition, are translated to USD – the group reporting currency - using the closing rate at reporting date. The income and expenses of the foreign operations are converted to USD at the exchange rate at the date of the transaction (the average exchange rate during the relevant period is used in case the date of transaction approx- imates this average rate). Foreign currency translation differences are recognized directly in other comprehensive income. These foreign cur- rency differences are presented within the “Translation reserve” caption. However, if the operation is a non-wholly owned subsidiary, then the relevant proportionate share of the translation difference is allocated to the non-con- trolling interests. When a foreign operation is disposed of, the cumulative amount in the translation reserve related to that foreign operation is reclassiﬁed to proﬁt and loss as part of the gain or loss on disposal. When the Group disposes of only part of its interest in a subsidiary that includes a foreign operation while retaining control, the relevant proportion of the cumulative amount is reattributed to non-controlling interests. When the Group disposes of only part of its investment in an associate or joint venture that includes a foreign operation while retaining signiﬁcant inﬂuence or joint control, the relevant proportion of the cumulative amount is reclassiﬁed to proﬁt and loss. The main exchange rates used are: Closing rates Average rates EXCHANGE RATES December 31, 2022 December 31, 2021 2022 2021 EUR 0.9376 0.8829 0.9474 0.8407 GBP 0.8315 0.7419 0.8062 0.7258 HKD 7.7970 7.7992 7.8309 7.7704 NOK 9.8573 8.8194 9.5392 8.5788 XAF 615.0062 579.0388 621.5040 551.5720 ARS 177.1165 102.7327 126.5182 94.1620 KRW 1,259.4458 1,189.0606 1,283.6970 1,137.6564 114 5. Financial report C. FINANCIAL INSTRUMENTS Financial assets and ﬁnancial liabilities are recognised in the Group’s statement of ﬁnancial position when the Group becomes a party to the contractual provisions of the instrument. Financial assets and ﬁnancial liabilities are initially measured at fair value. Transaction costs that are directly attrib - utable to the acquisition or issue of ﬁnancial assets and ﬁnancial liabilities (other than ﬁnancial assets and ﬁnancial liabilities at fair value through proﬁt or loss) are added to or deducted from the fair value of the ﬁnancial assets or ﬁnancial liabilities, as appropriate, on initial recognition. Transaction costs directly attributable to the acquisition of ﬁnancial assets or ﬁnancial liabilities at fair value through proﬁt or loss are recognised immediately in proﬁt or loss. Financial assets All regular way purchases or sales of ﬁnancial assets are recognised and derecognised on a trade date basis. Reg- ular way purchases or sales are purchases or sales of ﬁnancial assets that require delivery of assets within the time frame established by regulation or convention in the marketplace. Debt instruments that meet the following conditions are measured subsequently at amortised cost (see (i) below): • The ﬁnancial asset is held within a business model whose objective is to hold ﬁnancial assets in order to collect contractual cash ﬂows; and • The contractual terms of the ﬁnancial asset give rise on speciﬁed dates to cash ﬂows that are solely payments of principal and interest on the principal amount outstanding. Debt instruments that meet the following conditions are measured subsequently at fair value through other com- prehensive income (FVTOCI) (see (ii) below): • The ﬁnancial asset is held within a business model whose objective is achieved by both collecting contractual cash ﬂows and selling the ﬁnancial assets; and • The contractual terms of the ﬁnancial asset give rise on speciﬁed dates to cash ﬂows that are solely payments of principal and interest on the principal amount outstanding. By default, all other ﬁnancial assets are measured subsequently at fair value through proﬁt or loss (FVTPL). Despite the foregoing, the Group may make the following irrevocable election/designation at initial recognition of a ﬁnancial asset: • The Group may irrevocably elect to present subsequent changes in fair value of an equity investment in other comprehensive income if certain criteria are met (see (iii) below); and • The Group may irrevocably designate a debt investment that meets the amortised cost or FVTOCI criteria as measured at FVTPL if doing so eliminates or signiﬁcantly reduces an accounting mismatch (see (iv) below). All recognised ﬁnancial assets are measured subsequently in their entirety at either amortised cost or fair value, depending on the classiﬁcation of the ﬁnancial assets: (I). Financial assets at amortised costs: These assets are subsequently measured at amortised costs using the effective interest method. The amortised cost is reduced by impairment losses. Interest income, foreign ex- change gains and losses and impairment are recognised in proﬁt or loss. Any gain or loss on derecognition is recognised in proﬁt or loss. (II). Debt investments at FVTOCI: These assets are subsequently measured at fair value. Interest income is cal - culated using the effective interest method, foreign exchange gains and losses and impairment are recog- nised in proﬁt or loss. Other net gains and losses are recognised in OCI. On derecognition, gains and losses accumulated in OCI are reclassiﬁed to proﬁt or loss. (III). Equity investments at FVTOCI: These assets are subsequently measured at fair value. Dividends are rec- ognised as income in proﬁt or loss unless the dividend clearly represents a recovery of part of the cost of the investment. Other net gains and losses are recognised in OCI and are never reclassiﬁed to proﬁt or loss. (IV). Financial assets at FVTPL: These assets are subsequently measured at fair value. Net gains and losses, includ- ing any interest or dividend income, are recognised in proﬁt or loss. However, see section derivative ﬁnancial instruments and hedge accounting for derivatives designated as hedging instruments. Derecognition of ﬁnancial assets The Group derecognises a ﬁnancial asset when the contractual rights to the cash ﬂows from the ﬁnancial asset expire, or it transfers the rights to receive the contractual cash ﬂows in a transaction in which substantially all risks and rewards of ownership of the ﬁnancial asset are transferred or in which the Group neither transfers nor retains substantially all of the risks and rewards of ownership and it does not retain control over the ﬁnancial asset. 5. Financial report 115 Financial liabilities Financial liabilities are classiﬁed as measured at amortised cost or FVTPL. A ﬁnancial liability is classiﬁed at FVTPL if it is classiﬁed as held-for-trading, it is a derivative or it is designated as such on initial recognition. Financial liabil- ities at FVTPL are measured at fair value and net gains and losses, including any interest expense, are recognised in proﬁt or loss. Other ﬁnancial liabilities are subsequently measured at amortised cost using the effective interest method. Interest expense and foreign exchange gains and losses are recognised in proﬁt or loss. Any gain or loss on derecognition is also recognised in proﬁt or loss. See section “Derivative ﬁnancial instruments and hedge accounting” for derivatives designated as hedging instru- ments. Derecognition of ﬁnancial liabilities The Group derecognises a ﬁnancial liability when its contractual obligations are discharged or cancelled, or expire. When an existing loan is replaced by another from the same lender on substantially different terms, or the terms of the existing loans are substantially modiﬁed, such an exchange or modiﬁcation is treated as a derecognition of the original loan and the recognition of a new loan (at fair value). The difference in the respective carrying value is recognized in the statement of proﬁt and loss. On derecognition of a ﬁnancial liability, the difference between the carrying amount extinguished and the consid- eration paid (including any non-cash assets transferred or liabilities assumed) is recognised in proﬁt or loss. Offsetting Financial assets and ﬁnancial liabilities are offset and the net amount presented in the statement of ﬁnancial posi- tion when, and only when, the Group currently has a legally enforceable right to set off the amounts and it intends either to settle them on a net basis or to realise the asset and settle the liability simultaneously. Share capital Ordinary shares are classiﬁed as equity. Incremental costs directly attributable to the issue of ordinary shares and share options are recognised as a deduction from equity, net of tax effects. When share capital recognised as eq - uity is repurchased, the amount of the consideration paid, including directly attributable costs net of tax, is recog- nised as a deduction from equity. When treasury shares are sold, the amount received is recognised as an increase in equity and the resulting surplus or deﬁcit on the transaction is presented in retained earnings. Derivative ﬁnancial instruments & hedge accounting The Group holds derivative ﬁnancial instruments to hedge its foreign currency and interest rate risk exposures. Em- bedded derivatives are separated from the host contract and accounted for separately if the host contract is not a ﬁnancial asset and certain criteria are met. Derivatives are recognised initially at fair value at the date a derivative contract is entered into. Subsequent to initial recognition, derivatives are recognized at fair value and changes therein are generally recognized in proﬁt and loss. The Group designates certain derivatives as hedging instruments to hedge the variability in cash ﬂows associated with highly probable forecast transactions arising from changes in foreign exchange rates and interest rates and certain derivatives and non-derivative ﬁnancial liabilities as hedges of foreign exchange risk of a net investment in a foreign operation. At inception of designated hedge relationships, the Group documents the risk management objective and strategy for undertaking the hedge. The Group also documents the economic relationship between the hedged item and the hedged instrument, including whether the changes in cash ﬂow of the hedged item and hedging instrument are expected to offset each other. 116 5. Financial report Cash ﬂow hedges When a derivative is designated as a cash ﬂow hedging instrument, the effective portion of changes in the fair val- ue of the derivative is recognized in OCI and accumulated in the hedging reserve. The effective portion of changes in the fair value of the derivative that is recognized in OCI is limited to the cumulative change in fair value of the hedged item, determined on a present value basis. Any ineffective portion of changes in the fair value of the de- rivative is recognized immediately in proﬁt or loss. The amount accumulated in the hedging reserve and the cost of the hedging reserve is reclassiﬁed to proﬁt or loss in the same period or periods during which the hedge expected future cash ﬂows affect proﬁt or loss. If the hedge no longer meets the criteria for hedge accounting or the hedging instrument is sold, expires, is termi- nated or is exercised, then hedge accounting is discontinued prospectively. When hedge accounting for cash ﬂow hedges is discontinued, any gain or loss recognised in other comprehensive income and accumulated in the cash ﬂow hedge reserve at that time remains in equity and is reclassiﬁed to proﬁt or loss when the forecasted transac- tion occurs. When a forecasted transaction is no longer expected to occur, the gain or loss accumulated in the cash ﬂow hedge reserve is immediately reclassiﬁed to proﬁt or loss. D. GOODWILL Goodwill arising upon the acquisition of subsidiaries is included in intangible assets. For the measurement of goodwill at initial recognition, we refer to the accounting policy “Business combination” under A. Basis of consolidation. Subsequently, goodwill is measured at cost less accumulated impairment losses (see accounting policy G. Impair - ment of assets). In respect of equity accounted investees, the carrying amount of goodwill is included in the carrying amount of the investment and an impairment loss on such an investment is allocated to the carrying amount of the equity ac- counted investee as a whole. E. INTANGIBLE ASSETS Research and development Expenditure on research activities, undertaken with the prospect of gaining new scientiﬁc or technical knowledge and understanding, is recognised in proﬁt or loss as incurred. Development activities involve a plan or design for the production of new or substantially new improved prod - ucts and processes. Development costs are capitalized only if the development cost can be measured reliably, the product or process is technically and commercially feasible, future economic beneﬁts are probable and the Group intends to and has sufﬁcient resources to complete development and to use or sell the asset. Otherwise, it is rec- ognised in proﬁt or loss as incurred. Capitalised development expenditure is measured at cost less accumulated amortisation and accumulated impairment losses. Other intangible assets Other intangible assets (e.g. software,…) acquired by the Group that have ﬁnite useful lives are measured at cost less accumulated amortisations and accumulated impairment losses. The amortisation is recognized in the proﬁt or loss statement, and is spread over the useful life of the relevant intangible assets following the straight-line depre- ciation method. The amortization starts from the date that they are available for use. Amortization methods, useful lives and residual values are reviewed at each ﬁnancial year-end and adjusted if appropriate. Intangible assets with an indeﬁnite useful life or that are not yet available for use, are subject to an annual impair- ment test. Subsequent expenditure Subsequent expenditure is capitalized only when it increases the future economic beneﬁts embodied in the speciﬁc assets to which it relates. All other expenditure is recognized in proﬁt or loss as incurred. 5. Financial report 117 F. PROPERTY, PLANT AND EQUIPMENT Owned assets Items of property, plant and equipment are stated at cost, which includes capitalised borrowing costs, less accu- mulated depreciation and impairment losses. Cost includes expenditure that is directly attributable to the acqui- sition of the asset and to bringing the asset to the location and condition necessary for its intended use. The cost of self-constructed assets includes the cost of materials and direct labor, any other costs directly attributable to bringing the asset to a working condition for its intended use and capitalized borrowing costs. Subsequent expenses associated with items of property, plant and equipment are capitalised only if a future eco - nomic advantage will result from this expenditure and its cost can be measured reliably. If a part of an item of prop- erty, plant and equipment is replaced, the replacement cost is capitalised and the carrying amount of the replaced part is derecognized. The costs of the day-to-day servicing of property, plant and equipment are recognised in the proﬁt or loss statement as incurred. When parts of an item of property, plant and equipment have different useful lives, they are accounted for as sep- arate items (major components) of property, plant and equipment. Depreciation is calculated over the depreciable amount, which is the cost of an asset, less its residual value and is recognized in proﬁt or loss. Vessels, barges or units in the construction process are separately classiﬁed on the balance sheet as assets under construction. These assets under construction are not depreciated, depreciation starts at the moment that the ves- sels are delivered. As from the moment of delivery, the vessels are no longer classiﬁed as under construction. The business model of the Group aims to rent or operate the constructed assets. The vessels are depreciated on a straight-line basis to their residual value over their estimated useful life (as from construction date) in the Group as follows: Gas vessel LPG pressurized (1) 20 years Gas vessel LPG 30 years Gas vessel VLGC 30 years Gas vessel LNG 35 years LNG units 30 years Accommodation platform, newbuild: - Hull machinery & deck outﬁtting 20 years - Accommodation 10 years Accommodation platform, second hand 10-12 years (1) In June 2016, EXMAR increased its share in the pressurized ﬂeet from 50% to 100% and applied IFRS 3 Business combinations to account for this. The vessels were at that date accounted for at fair value and are being depreciated over their remaining useful life, which was 30 years as from construction date, or on average a remaining term of 23 years. In 2020, management re-assessed the useful life and reduced it from 30 to 20 years (as from construction date), or an average remaining useful life of 10 years as from January 1, 2020. Vessels and barges are estimated to have a zero residual value. Dry-docking expenses are capitalised when they occur and depreciated over a period until the next dry-dock. Other property, plant and equipment are depreciated over their estimated useful life using the straight-line depre- ciation method. Land is not depreciated. The estimated useful lives of the various other types of assets are as follows: Buildings 33.3 years Leased real estate 33.3 years Plant and equipment 5 years Furniture 10 years Cars 5 years Airplane 10 years IT equipment 3 years 118 5. Financial report G. IMPAIRMENT OF ASSETS Financial assets Financial assets measured at amortised cost are assessed each reporting date to determine whether the credit risk of a ﬁnancial asset has increased signiﬁcantly since initial recognition. The Group recognises a loss allowance for expected credit losses (ECL’s) which is based on the difference between the contractual cash ﬂows due in accord- ance with the contract and all the cash ﬂows that the Group expects to receive, discounted at an approximation of the original effective interest rate. The expected cash ﬂows will include cash ﬂows from the sale of collateral held or other credit enhancements that are an integral part of the contract terms. In determining the credit risk of a ﬁnancial asset and when estimating the ECL’s, the Group considers reasonable and supportable information that is relevant and available without undue cost or effort. This includes both quan- titative and qualitative information and analysis, based on the Group’s historical experience and informed credit assessment and including forward-looking information. Equity accounted investees After application of the equity method, the entity determines whether it is necessary to recognise an impairment loss with respect to its net investment in the associate or joint venture. An impairment loss in respect of an equity accounted investee is measured by comparing the recoverable amount of the investment with its carrying amount. An impairment loss is recognised in proﬁt and loss and is reversed when there is a favourable change in the esti - mates used to determine the recoverable amount. Non-ﬁnancial assets The carrying value of non-ﬁnancial assets, other than deferred tax assets, are reviewed at each balance sheet date to determine whether there is an indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. For goodwill and intangible assets that have indeﬁnite lives or that are not yet available for use the recoverable amount is estimated on each balance sheet date. The recoverable amount of an asset or cash-generating unit (CGU) is the greater of its value in use and its fair value less costs to sell. In assessing value in use, the estimated future cash ﬂows are discounted to their present value us- ing a pre-tax discount rate that reﬂects current market assessments of the time value of money and the risks speciﬁc to the asset. For the purpose of impairment testing, assets that cannot be tested individually are grouped together into the smallest group of assets that generates cash inﬂows from continuing use that are largely independent of the cash inﬂows of other assets or CGUs. The goodwill acquired in a business combination, for the purpose of impairment testing, is allocated to cash-gen - erating units that are expected to beneﬁt from the synergies of the combination. An impairment loss is recognised if the carrying amount of an asset or its cash-generating unit exceeds its estimat- ed recoverable amount. All impairment losses are recognised in the proﬁt or loss statement. Impairment losses recognized in respect of cash-generating units are allocated ﬁrst to reduce the carrying amount of any goodwill allocated to the units and then to reduce the carrying amount of the other assets in the unit (group of units) on a pro rata basis. An impairment loss in respect of goodwill is not reversed. In respect of other assets, impairment losses in prior pe- riods are assessed at each reporting date for indications that the loss has decreased or no longer exists. An impair- ment loss is reversed if there has been a change in the estimates used to determine the recoverable amount. An impairment loss is reversed only to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been determined, net of depreciation or amortisation, if no impairment loss had been recognised. H. ASSETS HELD FOR SALE Non-current assets, or disposal groups comprising assets and liabilities, that are expected to be recovered primarily through sale rather than through continuing use, are classiﬁed as held for sale. Immediately before classiﬁcation as held for sale, the assets (or components of a disposal group) are remeasured in accordance with the Group’s accounting policies. Thereafter the assets (or disposal group) are measured at the lower of their carrying amount and fair value less cost to sell. Any impairment loss on a disposal group is allocated ﬁrst to goodwill, and then to the remaining assets and liabilities on a pro rata basis except that no loss is allocated to assets not in the measurement scope of IFRS 5, which continue to be measured in accordance with the Group’s other accounting policies. Intangible assets and property, plant and equipment once classiﬁed as held for sale or distribution are not amortised or depreciated. In addition, equity accounting of equity accounted investees ceases once classiﬁed as held for sale or distribution. 5. Financial report 119 I. INVENTORIES Inventories are valued at the lower of cost and net realisable value. Costs incurred in bringing each product to its present location and condition are accounted for, as follows: • Raw materials and good purchased for resale: purchase cost on a ﬁrst-in/ﬁrst-out basis; • Work in progress and ﬁnished goods: cost of direct material and labor and a proportion of manufacturing over- heads based on the normal operating capacity but excluding borrowing costs. Net realizable value is the estimated selling price in the ordinary course of business less the estimated costs of completion and the estimated costs of completing the sale. Write-offs on inventories are applied on slow-moving items. The calculation of the allowance is based on consist - ently applied write-off rules, which depend on both historical and future demand. J. EMPLOYEE BENEFITS Deﬁned contribution plans Obligations for contributions to deﬁned contribution pension plans are recognised as an expense in the proﬁt or loss statement as the related service is provided. Deﬁned beneﬁt plans The Group’s net obligation in respect of deﬁned beneﬁt pension plans is calculated separately for each plan by estimating the amount of future beneﬁt that employees have earned in return for their service in the current and prior periods; discounting that amount and deducting the fair value of any plan assets. The calculation is performed annually by a qualiﬁed actuary using the projected unit credit method. When the calculation results in a potential asset for the Group, the recognized asset is limited to the present value of economic beneﬁts available in the form of a any future refunds from the plan or reductions in future contributions to the plan. To calculate the present value of economic beneﬁts, consideration is given to any applicable minimum funding requirements. Remeasurements of the net deﬁned beneﬁt liability, which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognised immediately in OCI. The Group determines the net interest expense (income) on the net deﬁned beneﬁt liability (asset) for the period by applying the discount rate used to measure the deﬁned beneﬁt obligation at the beginning of the annual period to the then net deﬁned beneﬁt liability (asset), taking into account any changes in the net deﬁned beneﬁt liability (asset) during the period as a result of contributions and beneﬁt payments. Net interest expense and other expenses related to deﬁned beneﬁt plans are recognised in proﬁt or loss. When the beneﬁts of a plan are changed or when a plan is curtailed, the resulting change in beneﬁt that relates to past service or the gain or loss on curtailment is recognised immediately in proﬁt or loss. The Group recognises gains and losses on the settlement of a deﬁned beneﬁt plan when the settlement occurs. Belgian deﬁned contribution plans with return guaranteed by law Belgian deﬁned contribution plans are subject to the Law of April 28, 2003 on occupational pensions (hereafter ‘the WAP’). According to article 24 of this Law, the employer has to guarantee an average minimum return of 3.75% on employee contributions and of 3.25% on employer contributions and this for contributions paid until December 31, 2015. As from January 2016, the employer has to guarantee an average minimum return of 1.75% on both employ- er and employee contributions (as changed by the Law of December 18, 2015). This guaranteed minimum return generally exceeds the return that is normally guaranteed by the insurer. Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relating to these plans are trans- ferred to the insurance company managing the plans. Therefore, these plans do not meet the deﬁnition of a deﬁned contribution plan under IFRS and have to be classiﬁed by default as deﬁned beneﬁt plans. An actuarial calculation has been performed in accordance with IAS 19 based on the projected unit credit method. Termination beneﬁts Termination beneﬁts are recognised as an expense when the Group is demonstrably committed, without realistic possibility or withdrawal, to a formal detailed plan to either terminate employment before the normal retirement date, or to provide termination beneﬁts as a result of an offer made to encourage voluntary redundancy. Termina- tion beneﬁts for voluntary redundancies are recognised as an expense if the Group has made an offer of voluntary redundancy, it is probable that the offer will be accepted, and the number of acceptances can be estimated reliably. If beneﬁts are payable more than 12 months after the reporting date, then they are discounted to their present value. 120 5. Financial report Short-term employee beneﬁt Short-term employee beneﬁt obligations are measured on an undiscounted basis and are expensed as the related service is provided. A liability is recognised for the amount expected to be paid under short-term cash bonus or proﬁt-sharing plans if the Group has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably. Share-based payment transactions The grant date fair value of options granted to employees is recognised as an employee expense, with a corre- sponding increase in equity, over the period that the employees unconditionally become entitled to the options. The amounts recognised as an expense is adjusted to reﬂect the actual number of options for which the related service and non-market vesting conditions are expected to be met, such that the amount ultimately recognised as an expense is based on the number of awards that do meet the related service and non-market performance conditions at vesting date. k. PROVISIONS A provision is recognised in the statement of ﬁnancial position when the Group has a legal or constructive obliga- tion as result of a past event, that can be estimated reliably and it is probable that an outﬂow of beneﬁts will be required to settle the obligation. If the effect is material, provisions are determined by discounting the expected future cash ﬂows at a pre-tax rate that reﬂects current market assessments of the time value of money and, where appropriate, the risks speciﬁc to the liability. Restructuring provisions Provisions for restructuring are recognised when the Group has approved a detailed and formal restructuring plan, and the restructuring has either commenced or has been announced publicly. Future operating costs are not pro- vided for. Onerous contracts A provision for onerous contracts is recognised when the expected beneﬁts to be derived by the Group from a contract are lower than the unavoidable cost of meeting its obligations under the contract. The provision is meas- ured at the present value of the lower of the expected cost of terminating the contract and the expected net cost of continuing with the contract. Before a provision is recorded, the Group recognises any impairment loss on the assets associated with that contract. L. INCOME Charter revenue The company and/ or its joint ventures generate revenues from charterers for the use of its assets. Assets are char- tered using voyage/spot, time or bareboat charters and pool revenue: • Voyage/spot charters: Voyage revenue is recognized over time of spot charters on a load-to-discharge basis. Progress is determined on time elapsed. Voyage expenses are expensed as occurred. When our vessels cannot start or continue performing its obligation due to other factors, such as port delays, a demurrage is calculated. The applicable demurrage rate is stipulated in the contract. As demurrage is often a commercial discussion between EXMAR and the charterer, the outcome and total compensation receivable for the delay is not always certain. As such, EXMAR only recognizes the revenue which is highly probable to be received. No revenue is recognized if the collection of the consideration is not highly probable. The amount of revenue recognized is estimated based on historical data. The Group updates its estimate on an annual basis. • Time- and Bareboat charters: As a lessor, the Group leases out some of its vessels under time – and bareboat charters (see also l) Leases). For time or bareboat charters, a contract is entered into for the use of an asset for a speciﬁc period of time at a contractual agreed daily or monthly rate. Revenue from time or bareboat charters are accounted for as operating leases and are recognised over the duration as service is performed. • Pool revenue: Aggregated revenue recognized on a daily basis from vessels operating on voyage or time char- ter and contract of affreightment (“COA”) within the pool is converted into an aggregated net revenue amount by extracting aggregated voyage expenses (such as fuel consumption, port charges,..) from gross revenue. This net revenue is used to determine the pool Time Charter Equivalent revenue (“TCE”). Aggregate TCE revenue is used to allocate revenue to the pool partners in accordance with the allocated pool points earned for each vessel. Pool points are determined taking into account the following parameters: intake (= capacity of the ves- 5. Financial report 121 sel), speed, fuel consumption performance and actual on hire days. The TCE revenue earned by our vessels operated in the pool is equal to the pool point rating of each vessel multiplied by time on hire, as reported by the pool manager. Revenue from these ﬂoating time charter agreements under which vessels are employed by the pool is accounted for under IFRS 15 Revenue from contracts with customers. Revenue from services rendered Revenue from services such as ship management, engineering and technical assistance services are recognised in the proﬁt or loss statement over time as the services are provided. The customer simultaneously receives and con- sumes the beneﬁts provided by the entity’s performance as the entity performs (recurring services). Invoices and related payment terms depend on individual contractual terms. License income Revenue from the licensing of EXMAR’s intellectual property is in general recognised over time together with the underlying services rendered based on time and material spent. In case the license revenue is considered distinct and distinct within the context of the contract, this revenue will be recognized at the point in time when EXMAR satisﬁes the performance obligation and control is transferred to the customer. Gain on sale of assets Gain on the sale of assets (vessels and barges) is recognized in the proﬁt or loss statement when control of the goods underlying the particular performance obligation is transferred to the customer, which in general is at the moment of delivery of the vessel or barge to the customer. Invoices and related payment terms depend on indi- vidual contractual terms. Revenue from sale of goods Contracts with customers to sell goods have only one performance obligation. Revenue recognition occurs at a point in time when control of the asset is transferred to the customer, in general upon the delivery of goods. Manufacturing project revenue For revenue out of manufacturing projects, the percentage of completion method is used, provided that the out- come of the project can be assessed with reasonable certainty. Commissions if the Group acts in the capacity of an agent rather than as a principal in the transaction, then the revenue recog- nised is the net amount of commission realized by the Group. M. LEASES At inception of a contract, the Group assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identiﬁed asset for a period of time in exchange for consideration. As a lessee At commencement or on modiﬁcation of a contract that contains a lease component, the Group allocates the con- sideration in the contract to each lease component on the basis of its relative stand- alone prices. The Group recognises a right-of-use asset and a lease liability at the lease commencement date. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability adjusted for any lease payments made at or before the commencement date, plus any initial direct costs incurred and an estimate of costs to dismantle and remove the underlying asset or to restore the underlying asset or the site on which it is located, less any lease incentives received. The right-of-use asset is subsequently depreciated using the straight-line method from the commencement date to the end of the lease term, unless the lease transfers ownership of the underlying asset to the Group by the end of the lease term or the cost of the right-of-use asset reﬂects that the Group will exercise a purchase option. In that case the right-of-use asset will be depreciated over the useful life of the underlying asset, which is determined on the same basis as those of property and equipment. In addition, the right-of-use asset is periodically reduced by impairment losses, if any, and adjusted for certain remeasurements of the lease liability. The lease liability is initially measured at the present value of the lease payments that are not paid at the commence- 122 5. Financial report ment date, discounted using the interest rate implicit in the lease or, if that rate cannot be readily determined, the Group’s incremental borrowing rate. Generally, the Group uses its incremental borrowing rate as the discount rate. The Group determines its incremental borrowing rate by obtaining interest rates from various external ﬁnancing sources and makes certain adjustments to reﬂect the terms of the lease and type of the asset leased. Lease payments included in the measurement of the lease liability comprise the following: • Fixed payments, including in-substance ﬁxed payments; • Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date; • Amounts expected to be payable under a residual value guarantee; and • The exercise price under a purchase option that the Group is reasonably certain to exercise, lease payments in an optional renewal period if the Group is reasonably certain to exercise an extension option, and penalties for early termination of a lease unless the Group is reasonably certain not to terminate early. The lease liability is measured at amortised cost using the effective interest method. It is remeasured when there is a change in future lease payments arising from a change in an index or rate, if there is a change in the Group’s estimate of the amount expected to be payable under a residual value guarantee, if the Group changes its assess- ment of whether it will exercise a purchase, extension or termination option or if there is a revised in-substance ﬁxed lease payment. When the lease liability is remeasured in this way, a corresponding adjustment is made to the carrying amount of the right-of-use asset, or is recorded in proﬁt or loss if the carrying amount of the right-of-use asset has been re- duced to zero. The Group presents right-of-use assets separately on the face of the balance sheet and lease liabilities in “Loans and borrowings” in the statement of ﬁnancial position. Short-term leases and leases of low-value assets The Group has elected not to recognise right-of-use assets and lease liabilities for leases of low-value assets and short-term leases, including IT equipment. The Group recognises the lease payments associated with these leases as an expense on a straight-line basis over the lease term. As a lessor At inception or on modiﬁcation of a contract that contains a lease component, the Group allocates the considera- tion in the contract to each lease component on the basis of their relative stand-alone prices. When the Group acts as a lessor, it determines at lease inception whether each lease is a ﬁnance lease or an op- erating lease. To classify each lease, the Group makes an overall assessment of whether the lease transfers substantially all of the risks and rewards incidental to ownership of the underlying asset. If this is the case, then the lease is a ﬁnance lease; if not, then it is an operating lease. As part of this assessment, the Group considers certain indicators such as whether the lease is for the major part of the economic life of the asset. If an arrangement contains lease and non-lease components, then the Group applies IFRS 15 to allocate the con - sideration in the contract. The Group recognises lease payments received under operating leases as income on a straight-line basis over the lease term as part of “Revenue”. N. GOVERNMENT GRANTS Government grants are recognised initially as deferred income at fair value when there is a reasonable assurance that they will be received and the Group will comply with the conditions associated with the grant and are then recognised in proﬁt and loss as other income on a systematic basis over the useful life of the asset. Grants that compensate the Group for expenses incurred are recognised in proﬁt or loss on a systematic basis in the periods in which the expenses are recognised. O. FINANCE INCOME AND EXPENSES Finance income consists of interests received, dividend income, gains on the disposal of equity securities at FVTPL, changes in the fair value of ﬁnancial assets at fair value through proﬁt or loss, and gains on hedging instruments that are recognised in proﬁt or loss and exchange rate gains. Interest income is recognised in the proﬁt or loss statement as it accrues, taking into account the effective yield on the asset. Dividend income is recognised in the proﬁt or loss statement on the date that the dividend is declared. Finance expenses consist of interest expense on borrowings, unwinding of the discount on provisions, changes in the fair value of ﬁnancial assets at fair value through proﬁt or loss, impairment losses recognised on ﬁnancial assets, exchange rate losses and losses on hedging instruments that are recognised in proﬁt or loss. 5. Financial report 123 Borrowing costs that are not directly attributable to the acquisition, construction or production of a qualifying asset are recognised in proﬁt or loss using the effective interest method. Foreign currency gains and losses are reported on a net basis per currency as either other ﬁnance income or ﬁnance expense. P. TA XES Income tax expense consists of current and deferred taxes. Current and deferred tax is recognised in the proﬁt or loss statement, except to the extent it relates to a business combination, or when they relate to items that are rec - ognised directly in equity or in other comprehensive income. Current tax is the expected tax payable or receivable on the taxable income or loss of the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years. Current tax assets and liabilities are offset only if certain criteria are met. Deferred tax is recognised on all temporary differences between the carrying amounts of assets and liabilities for reporting purposes and the amounts used for taxation purposes. The following temporary differences are not pro- vided for: the initial recognition of goodwill, the initial recognition of assets or liabilities in a transaction that is not a business combination and that affects neither accounting, nor taxable proﬁt, and differences relating to invest- ments in subsidiaries, associates and joint arrangements to the extent that the Group is able to control the timing of reversal and it is probable that they will not reverse in the foreseeable future. Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when they re- verse, based on the laws that have been enacted or substantively enacted by the reporting date. Deferred tax as- sets are recognised for unused tax losses, 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 utilised. Deferred tax assets are reduced when it is no longer probable that the related tax beneﬁts will be realized. Unrec - ognized deferred tax assets are reassessed at each reporting date and recognised to the extent that is has become probable that future taxable proﬁts will be available against which they can be used. Deferred tax assets and liabil- ities are offset only if certain conditions are met. Tonnage tax is not accounted for as income taxes in accordance with IAS 12 and is not presented as part of income tax expense in the proﬁt or loss statement but is shown under other operating expenses. Q. SEGMENT REPORTING An operating segment is a component of the Group that engages in business activities from which it may earn reve- nues and incur expenses, including revenues and expenses that relate to transactions with any of the Group’s other components. All operating segments’ operating results are reviewed regularly by management to make decisions about resources to be allocated to the segment and assess its performance. The result for each segment includes all income and expenses generated directly by this segment, as well as part of the income and expenses that can reasonably be allocated to this segment. The assets and liabilities allocated to a segment include as a minimum the assets and liabilities which are periodically reported to the Chief operating decision maker, being the Group’s CEO and the Executive Committee. Segment capital expenditure is the total cost incurred during the period to acquire property, plant and equipment and intangible assets. R. EARNINGS PER SHARE The Group presents basic and diluted earnings per share for its ordinary shares. Basic earnings per share is calcu- lated by dividing the proﬁt or loss attributable to ordinary shareholders of the Company by the weighted average number of ordinary shares outstanding during the period, adjusted for treasury shares held. Diluted earnings per share is determined by adjusting the proﬁt and loss attributable to ordinary shareholders and the weighted average of ordinary shares outstanding, adjusted for treasury shares held and for the effects of all dilutive potential ordinary shares such as share options granted to employees. S. DISCONTINUED OPERATIONS A discontinued operation is a component of the Group’s business, the operations and cash ﬂows of which can be clearly distinguished from the rest of the Group and which represents a separate major line of business or geograph- ical area of operations that has been disposed of or is held for sale; is part of a single coordinated plan to dispose of a separate major line of business or geographic area of operations or is a subsidiary acquired exclusively with a view to re-sale. Classiﬁcation of a discontinued operation occurs upon disposal or when the operation meets the criteria to be classiﬁed as held for sale, if earlier. When an operation is classiﬁed as a discontinued operation, the comparative proﬁt or loss statement is restated as if the operation had been discontinued from the start of the comparative period. NOTE 2 - SEGMENT REPORTING In respect of joint ventures, the company continues to manage its operations based on internal management reports applying the principles of the proportionate consolidation method. The reconciliation of the segment reporting to the consolidated statement of ﬁnancial position and the consolidated statement of proﬁt or loss is presented in Note 3 Reconciliation segment reporting. All differences relate to the application of IFRS 11 Joint arrangements, no other differences exist. The Group has 3 reportable segments. The Group’s operating segments reﬂect the level at which the Group’s CEO and the Executive Committee review the business and make decisions about the allocation of resources and other operating matters. These segments offer different products and services and are managed separately. • The activities in the Shipping segment include the transportation of liqueﬁed gas products such as Liquid Nat - ural Gas (LNG), Liquid Petroleum Gas (LPG), ammonia and petrochemical gases. • The Infrastructure segment provides innovative ﬂoating infrastructure solutions to the oil & gas industry both by making use of its asset portfolio and through developing new assets for near-shore and offshore production, processing, storage or other ancillary services. • The segment Supporting services includes the specialised supporting services such as ship management ser- vices, travel services and manufacturing activities. The company’s internal and management structure does not distinguish any geographical information (non-current assets and revenue per major country) as the company’s ﬂeet is operated on a worldwide basis. The intra-segment revenue mainly relates to management, supervision and crew services provided between segments. Major shipping client Equinor (ex-Statoil) and Saudi Arabian Mining Company represented 24.55% (2021: 19.9%) and 12.37% (2021: 9.9%) of the revenue of the Shipping segment and 14.4% (2021: 14.3%) and 7.24% (2021: 7.1%) of the EXMAR Group revenue in 2022. The remaining part of the Shipping revenue is divided between 14 different cus- tomers. Hyundai Heavy Industries Korea and Gasunie represented 29.1% (2021: 5.6) and 15.8% (2021: 0.0%) of the revenue of the Infrastructure segment. Both companies represented 6.4% (2021: 5.7) and 9.27% (2021: 0.0%) of the EXMAR Group revenue in 2022. In 2021, Gunvor represented 30.6% of the revenue of the Infrastructure segment and 5.7% of the EXMAR Group revenue, versus 0% in 2022. The percentages mentioned are calculated excluding settlement fees. No other customers represented more than 10.0% of the EXMAR Group revenue in 2022. Segment reporting 2022 (In thousands of USD) CONSOLIDATED STATEMENT OF PROFIT OR LOSS For the year ended December 31, 2022 Shipping Infrastucture Supporting services Eliminations Total Revenue third party 139,882 76,099 23,026 0 239,007 Revenue intra-segment 1,530 39 7,928 -9,497 0 Royalty income 0 4,320 0 0 4,320 Total revenue 141,412 80,458 30,954 -9,497 243,328 Gain on disposal 385 315,659 3,489 0 319,533 Other operating income 3,239 1,193 264 -9 4,688 Operating income 145,036 397,311 34,706 -9,505 567,549 Operating result before depreciations, amortisations & impairment losses (EBITDA) 81,627 323,130 -3,080 0 401,676 Depreciations and amortisations -47,859 -13,256 -1,233 0 -62,347 Impairment losses and reversals 8,975 4,859 -91 0 13,743 Operating result (EBIT) 42,743 314,733 -4,404 0 353,072 Interest income (non-intra-segment) 83 2,626 3,942 0 6,651 Interest income intra-segment 453 515 12,556 -13,525 0 Interest expenses (non-intra-segment) -25,603 -6,575 -306 0 -32,484 Interest expenses intra-segment -2,105 -10,905 -515 13,525 0 Other ﬁnance income 5,040 4,613 4,150 -1,000 12,803 Other ﬁnance expenses -2,862 -9,636 -7,388 1,000 -18,885 Share of result of equity accounted investees (net of income tax) 0 0 269 0 269 Income tax expense -919 1,007 -1,167 0 -1,079 Segment result for the period 16,831 296,378 7,139 0 320,348 Attributable to: Non-controlling interest 30 Owners of the Company 320,318 124 5. Financial report (In thousands of USD) CONSOLIDATED STATEMENT OF FINANCIAL POSITION For the year ended December 31, 2022 Shipping Infrastucture Supporting services Eliminations Total Assets Vessels and barges 507,669 211,930 0 0 719,599 Other property, plant and equipment 40 400 14,116 14,556 Intangible assets 0 19 206 225 Right-of-use assets 11,696 2,442 7,812 21,949 Investments in equity accounted investees 0 0 449 449 Borrowings to equity accounted investees 0 7,000 0 7,000 Loan receivables intra-segment 76,872 58,153 416,458 -551,483 0 Inventories 0 0 9,217 9,217 Restricted cash 1,778 0 0 1,778 Cash and cash equivalents 28,872 32,600 485,965 547,437 Assets held for sale 9,988 0 0 9,988 Total segment assets 636,915 312,544 934,222 -551,483 1,332,198 Unallocated other investments 5,432 Unallocated trade and other receivables 81,375 Trade and other receivables intra-segment 7,123 10,035 36,117 -53,275 0 Other unallocated assets 2,256 Total assets -604,758 1,421,260 Liabilities Non-current borrowings 330,718 2,026 6,541 339,284 Current borrowings 92,909 10,465 1,386 104,759 Borrowings intra-segment 262,919 167,310 121,254 -551,483 0 Other payables 0 78,000 0 78,000 Non-current provisions 2,347 0 800 3,147 Total segment liabilities 688,892 257,801 129,980 -551,483 525,190 Unallocated equity 0 798,689 Unallocated trade and other payables 0 90,478 Trade and other payables intra-segment 22,243 21,035 9,996 -53,275 0 Unallocated other liabilities 0 6,903 Total equity and liabilities -604,758 1,421,260 CASH FLOW STATEMENT Cash from operating activities -20,686 -116,164 204,797 67,947 Cash from investing activities 2,578 619,892 -8,961 613,509 Cash from ﬁnancing activities 11,121 -482,042 229,261 -241,660 Exchange rate ﬂuctuations 568 Total cash ﬂow -6,988 21,685 425,098 440,364 ADDITIONAL INFORMATION Capital expenditures -21,778 -9,693 -317 -31,788 Proceeds from disposals 24,356 718 9 25,083 5. Financial report 125 Segment reporting 2021 (In thousands of USD) CONSOLIDATED STATEMENT OF PROFIT OR LOSS For the year ended December 31, 2021 Shipping Infrastucture Supporting services Eliminations Total Revenue third party 136,013 91,986 19,047 0 247,046 Revenue intra-segment 1,667 781 7,503 -9,951 0 Total revenue 137,680 92,767 26,550 -9,951 247,046 Gain on disposal 171 0 33 0 204 Other operating income 747 102 253 -113 990 Operating income 138,598 92,869 26,836 -10,064 248,239 Operating result before depreciations, amortisations & impairment losses (EBITDA) 65,054 54,420 -5,987 0 113,486 Depreciations and amortisations -43,918 -17,225 -984 0 -62,126 Impairment losses and reversals 5,700 -20,063 -23 0 -14,385 Operating result (EBIT) 26,836 17,132 -6,994 0 36,975 Interest income (non-intra-segment) -4 1,179 162 0 1,337 Interest income intra-segment 1 0 13,083 -13,084 0 Interest expenses (non-intra-segment) -16,788 -13,197 -140 0 -30,125 Interest expenses intra-segment -334 -12,749 -1 13,084 0 Other ﬁnance income 1,062 4,014 6,350 -1,000 10,426 Other ﬁnance expenses 70 -2,740 -1,812 1,000 -3,482 Share of result of equity accounted investees (net of income tax) 0 -1,638 138 0 -1,499 Income tax expense -182 -695 -1,119 0 -1,997 Segment result for the period 10,660 -8,694 9,668 0 11,635 Attributable to: Non-controlling interest 35 Attributable to owners of the Company 11,600 126 5. Financial report (In thousands of USD) CONSOLIDATED STATEMENT OF FINANCIAL POSITION For the year ended December 31, 2021 Shipping Infrastucture Supporting services Eliminations Total Assets Vessels and barges 555,353 409,128 0 0 964,481 Other property, plant and equipment 52 240 982 1,274 Intangible assets 0 14 68 82 Right-of-use assets 16,122 2,969 2,266 21,356 Equity accounted investees 0 2,969 2,400 5,369 Borrowings to equity accounted investees 0 9,848 -1,957 7,891 Loan receivables intra-segment 77,460 40,567 719,370 -837,397 0 Restricted cash 1,761 76,121 0 77,882 Cash and cash equivalents 35,843 10,869 60,362 107,074 Assets held for sale 17,709 0 0 17,709 Total segment assets 704,300 552,725 783,491 -837,397 1,203,119 Unallocated other investments 1,849 Unallocated trade and other receivables 70,462 Trade and other receivables intra-segment 737 438 43,848 -45,024 0 Other unallocated assets 2,684 Total assets -882,420 1,278,113 Liabilities Non-current borrowings 413,621 116,216 1,665 531,502 Current borrowings 56,206 88,578 661 145,445 Borrowings intra-segment 204,601 500,971 131,824 -837,397 0 Non-current provisions 2,347 0 800 3,147 Current derivative ﬁnancial instruments 0 0 0 0 Total segment liabilities 676,775 705,766 134,950 -837,397 680,094 Unallocated equity 536,502 Unallocated trade and other payables 59,474 Trade and other payables intra-segment 24,446 19,802 776 -45,024 0 Unallocated other liabilities 2,044 Total equity and liabilities -882,420 1,278,113 CASH FLOW STATEMENT Cash from operating activities 48,645 26,710 88,766 164,121 Cash from investing activities -135,473 -2,548 255 -137,765 Cash from ﬁnancing activities 94,946 -21,611 -45,645 27,691 Exchange rate ﬂuctuations -706 Total cash ﬂow 8,119 2,551 43,376 0 53,341 ADDITIONAL INFORMATION Capital expenditures -141,768 -1,958 -250 -143,976 Proceeds from disposals 6,296 0 189 6,485 5. Financial report 127 128 5. Financial report NOTE 3 - RECONCILIATION SEGMENT REPORTING The ﬁnancial information of each operating segment is reviewed by management using the proportionate consol- idation method. The below tables reconcile the ﬁnancial information as reported in the consolidated statement of ﬁnancial position and the consolidated statement of proﬁt or loss (using the equity consolidation method as re- quired under IFRS 11) with the ﬁnancial information disclosed in Note 2 Segment reporting (using the proportion- ate consolidation method). (In thousands of USD) For the year ended December 31, 2022 Proportionate consolidation Difference Equity consolidation Revenue 243,328 -87,724 155,604 Gain on disposal 319,533 109 319,643 Other operating income 4,688 -3,086 1,601 Vessel expenses -90,444 30,323 -60,121 Raw materials and consumables used (-) -3,447 0 -3,447 General and administrative expenses -39,623 330 -39,293 Personnel expenses -32,333 0 -32,333 Depreciations and amortisations -62,347 28,723 -33,624 Impairment losses and reversals 13,743 -8,975 4,768 Loss on disposal 0 0 0 Other operating expenses -25 0 -25 Result from operating activities 353,073 -40,300 312,773 Interest income 6,651 473 7,125 Interest expenses -32,484 10,530 -21,954 Other ﬁnance income 12,803 -3,278 9,525 Other ﬁnance expenses -18,886 831 -18,055 Result before income tax and share of result of equity accounted investees 321,157 -31,743 289,414 Share of result of equity accounted investees (net of income tax) 269 31,737 32,007 Income tax expense -1,079 6 -1,072 Result for the period 320,348 0 320,348 5. Financial report 129 (In thousands of USD) December 31, 2022 Proportionate consolidation Difference Equity consolidation Vessels and barges 719,599 -281,633 437,966 Other property, plant and equipment 14,556 0 14,556 Intangible assets 225 0 225 Right-of-use assets 21,949 -11,039 10,910 Investments in equity accounted investees 449 106,633 107,082 Borrowings to equity accounted investees 0 0 0 Deferred tax assets 1,071 0 1,071 Non-current assets 757,849 -186,039 571,810 Derivative ﬁnancial asset 3,583 -3,010 573 Other investments 1,849 0 1,849 Inventories 9,217 0 9,217 Trade and other receivables 81,375 -14,286 67,089 Short term borrowings to equity accounted investees 7,000 0 7,000 Current tax assets 1,185 0 1,185 Restricted cash 1,778 -1,778 0 Cash and cash equivalents 547,437 -27,884 519,553 Assets held for sale 9,988 -9,988 0 Current assets 663,411 -56,946 606,465 Total assets 1,421,260 -242,985 1,178,276 Equity 798,689 1 798,691 Borrowings 339,284 -171,736 167,548 Other payables 78,000 0 78,000 Employee beneﬁts 1,040 0 1,040 Non-current provisions 3,147 -2,347 800 Deferred tax liabilities 2,982 0 2,982 Non-current liabilities 424,453 -174,083 250,370 Borrowings 104,759 -53,960 50,800 Trade and other payables 90,478 -14,936 75,542 Current tax liability 2,881 -8 2,873 Current liabilities 198,118 -68,903 129,215 Total equity and liabilities 1,421,260 -242,985 1,178,276 130 5. Financial report (In thousands of USD) For the year ended December 31, 2021 Proportionate consolidation Difference Equity consolidation Revenue 247,046 -98,816 148,229 Gain on disposal 204 -151 52 Other operating income 990 0 990 Vessel expenses -80,634 35,565 -45,068 General and administrative expenses -25,149 613 -24,536 Personnel expenses -27,355 6 -27,349 Depreciations and amortisations -62,126 30,762 -31,364 Impairment losses and reversals -14,385 -3,200 -17,585 Loss on disposal -143 43 -100 Other operating expenses -1,473 585 -888 Result from operating activities 36,975 -34,593 2,382 Interest income 1,337 200 1,537 Interest expenses -30,125 14,599 -15,526 Other ﬁnance income 10,426 -229 10,198 Other ﬁnance expenses -3,482 -3,303 -6,785 Result before income tax and share of result of equity accounted investees 15,131 -23,326 -8,195 Share of result of equity accounted investees (net of income tax) -1,499 23,268 21,769 Income tax expense -1,997 58 -1,939 Result for the period 11,635 0 11,635 5. Financial report 131 (In thousands of USD) December 31, 2021 Proportionate consolidation Difference Equity consolidation Vessels and barges 964,481 -316,045 648,436 Other property, plant and equipment 1,274 0 1,274 Loan receivables intra-segment 82 0 82 Right-of-use assets 21,356 -15,356 6,000 Investments in equity accounted investees 5,369 81,391 86,760 Borrowings to equity accounted investees 5 24,756 24,760 Derivative ﬁnancial asset 759 -759 0 Deferred tax assets 0 0 0 Non-current assets 993,326 -226,013 767,312 Derivative ﬁnancial asset 920 0 920 Other investments 1,849 0 1,849 Trade and other receivables 70,462 -15,308 55,154 Short term borrowings to equity accounted investees 7,887 7,520 15,407 Current tax assets 1,003 0 1,003 Restricted cash 77,882 -1,761 76,121 Cash and cash equivalents 107,074 -35,945 71,130 Assets held for sale 17,709 -5,209 12,500 Current assets 284,787 -50,703 234,083 Total assets 1,278,113 -276,716 1,001,395 Equity 536,502 1 536,503 Borrowings 531,502 -217,686 313,816 Employee beneﬁts 730 0 730 Non-current provisions 3,147 -2,347 800 Non-current liabilities 535,379 -220,032 315,347 Borrowings 145,445 -34,450 110,995 Trade and other payables 59,474 -22,233 37,241 Current tax liability 1,314 -5 1,309 Current derivative ﬁnancial instruments 0 0 0 Current liabilities 206,233 -56,687 149,546 Total equity and liabilities 1,278,113 -276,719 1,001,395 132 5. Financial report NOTE 4 – DIVESTITURES Sale of 100% shares in Export LNG Ltd, owner of the TANGO FLNG Per June 30, 2022, the assets and liabilities of Export LNG Ltd, a 100% subsidiary, were presented as held for sale. On August 5, 2022, EXMAR and Eni entered into a share purchase agreement to sell all the shares of Export LNG Ltd, the owning company of the ﬂoating liquefaction unit TANGO FLNG. The balance sheet of Export LNG Ltd, at June 30, 2022 can be detailed as follows: (In thousands of USD) Balance as per 30 June 2022 Barge 256,180 Trade and other receivables 281 Restricted cash 76,182 Cash and cash equivalents 67 Total assets held for sale 332,710 Borrowings -121,640 Trade and other payables -3,943 Total liabilities held for sale -125,583 As of August 17, 2022, EXMAR repaid the outstanding borrowings towards Bank of China for the ﬁnancing of the TANGO FLNG and the related restricted cash balance was released (see Notes 28 Borrowings and 25 Restricted cash and cash and cash equivalents respectively). On August 26, 2022, the share sale with Eni was closed for a cash consideration of USD 646.7 million, still subject to a price adjustment between plus USD 44.0 million and minus USD 78.0 million, depending on the actual perfor- mance of the TANGO FLNG during the ﬁrst six months on site. In this respect, EXMAR deferred revenue of USD 78.0 million and recorded this as a contingent consideration liability, which will be evaluated in 2024. EXMAR realized a gain of USD 315.7 million on this transaction (see Note 7 Gain on disposals). The sale of the shares of Export LNG triggered a repayment and termination of the USD 50.0 million Sequoia credit - facility, which was used in its entirety at the end of June 2022. Repayment occurred on August 29, 2022 (see also Note 28 Borrowings). 5. Financial report 133 NOTE 5 - BUSINESS COMBINATIONS AND OTHER SHARE DEALS Bexco NV – business combination Bexco NV is a leading European manufacturer of precision-engineered synthetic mooring, towing and lifting ropes for offshore, marine and industrial applications, based in Belgium. The Group owned 44.91% of the shares and up till October 31, 2022 Bexco NV was included in the consolidated ﬁnancial statements as an equity accounted in- vestee. On November 1, 2022, the Group acquired the remaining 55.09% shares of Bexco NV and since included in full in the consolidated ﬁnancial statements. In accordance with IFRS 3 Business combinations, Exmar Group remeasured its previously held 44.91% interest at acquisition date fair value and a gain of USD 3.1 million was recognized in proﬁt and loss, net of a loss of USD 0.8 million from recycling the currency translation adjustment (see Note 7 Gain on disposal). The assets acquired and liabilities assumed were recognized at 100% of their fair value and determined the badwill. The fair value of the identiﬁable assets and liabilities of Bexco NV at acquisition date can be detailed as follows: (In thousands of USD) Fair value on acquisition date Assets Property, plant & equipment 13,069 Intangible assets 155 Right-of-use assets 5,609 Inventories 11,389 Trade and other receivables 8,002 Cash and cash equivalents 532 38,756 Liabilities Non-current borrowings 4,762 Deferred tax liability 2,869 Short-term borrowings 2,922 Trade and other payables 9,867 20,419 Total identiﬁable net assets at fair value 18,337 Fair value of previously held investment of 44.9% 8,245 Consideration transferred for the additional 55.09% interest acquired 9,701 Total consideration 17,945 Badwill arising on acquisition -392 The determination of the fair values of property, plant and equipment was based on external valuation reports. Inventories were fair valued based on the expected sales price minus estimated selling costs. Trade and other receivables were recorded at their nominal value as the full contractual amounts are expected to be collectible. A minor badwill of USD 0.4 million arose in the acquisition of Bexco and has been recorded directly in proﬁt in the caption “Gain on disposal” (see Note 7 Gain on disposal). From acquisition date, Bexco NV has contributed USD 7.3 million in revenue. Had this business combination been effected at January 1, 2022, the revenue of the Group would have been USD 21.3 million higher. Solaia Shipping LLC On August 30, 2022, EXMAR signed an agreement with SEAPEAK Maritime Holdco LLC, to increase its ownership share in Solaia Shipping LLC (“Solaia”) from 50% to 100%. Solaia is the owner of the EXCALIBUR LNG carrier. On September 20, 2022, the transaction was closed and after dry dock, the EXCALIBUR was converted into a FSU. As from October 2022, the EXCALIBUR is employed under a 10-year charter agreement for the Eni project. We also refer to Note 4 Divestitures for additional information on the transaction with Eni. This transaction does not meet the deﬁnition of a “business” as speciﬁed under IFRS 3 and thus no acquisition method of accounting can be applied. Instead, EXMAR acquired the underlying “asset” and consequently record- ed the additional 50% stake in the EXCALIBUR at its agreed price of USD 8.8 million, net of debt. See also Note 14 Vessels and barges. 134 5. Financial report NOTE 6 – REVENUE (In thousands of USD) 2022 2021 Shipping segment 51,936 36,414 Infrastructure segment - ordinary revenue 78,152 32,710 Infrastructure segment - settlement fees 0 56,840 Supporting services segment - ordinary revenue 25,517 21,768 Supporting services segment - settlement fees 0 497 Revenue 155,604 148,229 The increase in total revenue at the Shipping segment is mainly a result of the new charter agreements for the two new build VLGC’s, FLANDERS INNOVATION (since mid-August 2021) and FLANDERS PIONEER (since November 2021) included for a full year in 2022 and higher time-charter rates for the pressurized ﬂeet. Ordinary revenue at the Infrastructure segment increased signiﬁcantly in 2022 as a result the employment of the FRSU EEMSHAVEN LNG, previously named FSRU S188, (generating hire income as well as income from recharged variation orders and the mobilisation fees since mid August 2022), higher license and engineering revenue from different projects and the employment of the EXCALIBUR, now owned for 100%, as from the fourth quarter of 2022. In 2021, Gunvor cancelled the charter agreement of the FSRU S188 and paid an early termination fee of USD 56.8 million. The increase in revenue at the Supporting services is the combined effect of Bexco NV entering into the consol- idation scope of the Group since November 2022 (contribution of USD 7.3 million), see Note 5 business combina- tions, higher revenue at Travel Plus after the covid pandemic, offset by lower ship management revenue due to less vessels under management. Revenue which falls within the scope of IFRS 16 Leasing represented 43.0% (2021: 46.1%) of total revenue and is mainly situated in the Shipping segment. Revenue which falls within the scope of IFRS 15 Revenue from contracts with customers represented 57.0% (2021: 53.9%) of total revenue and is mainly situated in the Infrastructure and Supporting services segment. The percentages mentioned are calculated excluding settlement fees. Major shipping clients Equinor (ex-Statoil) and Nippon Gas Line Co represented 53.6% (2021: 28.2%) and 21.2% (2021: 29.0%) respectively of the revenue of the Shipping segment. Both clients contributed 17.9% (2021: 11.3%) and 7.1% (2021: 11.6%) respectively to the EXMAR Group revenue in 2022. Gasunie and Hyundai Heavy Indus- tries Korea represented 28.4% (2021: 0.0%) and 19.6% (2021: 6.1%) of the revenue of the Infrastructure segment. Both clients represented 14.2% (2021: 0.0%) and 9.8% (2021: 2.2%) of the EXMAR Group revenue in 2022. In 2021, Gunvor contributed 32.9% of the revenue of the Infrastructure segment and 11.8% of the EXMAR Group revenue, compared to 0% in 2022. The percentages mentioned are also calculated excluding settlement fees. No other cus- tomers represent more than 10.0% of the EXMAR Group revenue in 2022. (In thousands of USD) 2022 2021 Trade receivables, included in trade and other receivables (current + non-current) 39,344 43,987 Contract assets, included in trade and other receivables 7,743 2,839 Contract liabilities, included in trade and other payables 11,056 6,479 Contract balances 58,143 53,305 The decrease in trade and other receivables in 2022 is primarily the result of the receipt of the remaining YPF settle- ment fee (USD 24.4 million) in accordance with the agreed payment schedule, partially offset by Bexco NV entering into the consolidation scope and receivables related to the new (2022) charter and/or service agreements related to EEMSHAVEN LNG, TANGO FLNG and EXCALIBUR. The contract assets mainly relate to the Group’s rights to consideration for work completed but not billed at the reporting date. The contract assets are transferred to receivables when the rights become unconditional. The contract liabilities primarily relate to invoices issued in respect of vessel income (prepaid hire) and advances charged for planned services. The increase in contract assets and contract liabilities mainly results from the services delivered/to be delivered to the three assets mentioned above. 5. Financial report 135 NOTE 7 – GAIN ON DISPOSAL At year-end 2022, Exmar realized a non-recurring gain on disposals of USD 319.6 million which can be detailed as follows: (In thousands of USD) 2022 2021 Gain on sale of shares of Export LNG 315,654 0 Gain on derecognition Bexco NV 3,474 0 Other 515 52 Gain on disposal 319,643 52 As a result of the sale of the 100% shares of Export LNG Ltd., the owning company of the TANGO FLNG, in August 2022, EXMAR realized a non-recurring gain of USD 315.7 million. We refer to Note 4 Divestitures for additional in- formation. On November 1, 2022, EXMAR acquired the remaining 55.09% shares of Bexco NV for a consideration of USD 9.7 million. Until that date, Bexco NV was accounted for as an equity accounted investee and the derecognition thereof resulted in a net gain of USD 3.1 million, i.e. after recycling a USD 0.8 million currency translation loss. Since obtain- ing control from November 2022 onwards, Bexco is included in full in the Group’s consolidated ﬁnancials and the assets acquired and assumed liabilities were recorded at fair value, resulting in a badwill of USD 0.4 million. This badwill was directly recorded in proﬁt and included within the caption Gain on disposal. See also Note 5 Business combinations and other share deals. NOTE 8 - VESSEL EXPENSES (In thousands of USD) 2022 2021 Vessel expenses crew -28,287 -23,850 Vessel expenses maintenance -23,931 -14,136 Vessel expenses insurance -2,759 -2,693 Vessel expenses other -5,144 -4,389 Vessel expenses -60,121 -45,068 Vessel expenses are expenses made to operate a vessel and include primarily crew, maintenance, insurance and other related expenses. The signiﬁcant increase in the vessel expenses is mainly a result of the change from lay-up status to start-up and commercial operations of the EEMSHAVEN LNG since the summer of 2022 and the full year employment in 2022 of the two new VLGC’s: FLANDERS INNOVATION and FLANDERS PIONEER. NOTE 9 – PURCHASE OF GOODS As from November 1, 2022, EXMAR reports purchases of goods which results from the business activities of Bexco NV that became a subsidiary of the Group as from that date (see Note 5 Business combinations). 136 5. Financial report NOTE 10 - GENERAL AND ADMINISTRATIVE EXPENSES (In thousands of USD) 2022 2021 Administrative expenses -33,393 -22,637 Ofﬁce expenses -1,386 -2,438 Travel expenses -2,488 -2,085 IT & communication expenses -2,409 -2,073 Fees -15,739 -7,730 Other fees -10,579 -7,693 Insurance -793 -619 Freight charges -1,740 0 Non-income based taxes -2,844 -1,256 Other expenses -1,316 -643 General and administrative expenses -39,293 -24,536 During 2022, fees increased as a result of speciﬁc project work for Eni in relation to the operability of the TANGO FLNG and higher engineering fees, primarily in connection with the Shenandoah project. Other fees, mainly director and management consultancy services, increased in 2022 due to larger and supple- mentary consultancy projects. Freight charges are related to the Bexco activities since their inclusion in the consolidation scope (see Note 5 Busi- ness combinations and other share deals). In 2022, non-income based taxes include non-deductible withholding taxes of USD 1.2 million related to the Eni project in Congo. NOTE 11 - PERSONNEL EXPENSES (In thousands of USD) 2022 2021 Salaries and wages -27,492 -22,568 Social security charges -4,263 -3,991 Employee beneﬁt, deﬁned beneﬁt and deﬁned contribution plan -577 -789 Personnel expenses -32,333 -27,349 At year-end 2022 2021 Seagoing 1,508 1,615 Staff 418 234 Number of personnel members 1,926 1,849 Salaries and wages increased primarily because of higher number of engineers and technical employees for amongst others the Shenandoah project and the inclusion of Bexco since November 2022 in the consolidation scope (re- spectively within the Infrastructure and Services segments). The number of personnel members represents the effective number of personnel members in service per period end (including the seagoing employees of our equity accounted investees). A signiﬁcant part of EXMAR’s seagoing personnel is employed on the assets held or operated by EXMAR’s equity ac- counted investees, the related expense is not included in the personnel expenses or crew expenses disclosed above. 5. Financial report 137 NOTE 12 - FINANCE INCOME / EXPENSES (In thousands of USD) 2022 2021 Interest income on borrowings to equity accounted investees 1,929 1,508 Interest income on cash and cash equivalents 5,196 29 Interest income 7,125 1,537 Interest expenses on borrowings -21,954 -15,526 Interest expenses -21,954 -15,526 The interest income on borrowings to equity accounted investees relates to interests charged to the equity ac- counted investees on the borrowings provided by EXMAR and increased as a result of higher average outstanding balances. We refer in this respect also to Note 19 Borrowings to equity accounted investees. Interest income on cash and cash equivalents increased signiﬁcantly thanks to the higher cash position of EXMAR after the proceeds of the sale of the shares of Export LNG Ltd, owner of TANGO FLNG (see Note 4 Divestitures). Interest expenses relate to EXMAR’s borrowings as disclosed in Note 28 Borrowings and the increase of USD 6.4 million is mainly the combined effect of (i) the ﬁnancing of the two new VLGC’s since mid 2021 (USD 5.3 million), (ii) the effective interest correction on the pressurized ﬂeet following the exercise of the early buy-out option (USD 5.5 million, of which USD 3.3 million is an adjustment of the historic interest expense of prior ﬁnancial years 1 ) (both Shipping segment), offset by (iii) lower interests in the Infrastructure segment due to the repayment of the NOK bond (USD 3.3 million) at maturity end May 2022 and lower margins and early repayment of the Bank Of China loan facility in August 2022 upon the sale of the shares of Export LNG Ltd, owner of TANGO FLNG (USD 1.8 million). (In thousands of USD) 2022 2021 Realised exchange gains 2,967 2,237 Unrealised exchange gains 2,418 6,270 Dividend income from non-consolidated companies 18 16 Equity securities measured at FVTPL 280 662 Fair value gain on ﬁnancial instruments 934 920 Premium refund 2,497 0 Other 410 92 Other ﬁnance income 9,525 10,198 Realised exchange losses -6,324 -928 Unrealised exchange losses -1,236 -1,933 Amortisation transaction costs -7,504 -2,674 Banking fees -2,280 -922 Other -711 -328 Other ﬁnance expenses -18,055 -6,785 The realized exchange gains, net of the settlement loss of related derivative assets, primarily relate to the NOK bond repayment in May 2022. The unrealized exchange gains decreased as 2021 included USD 2.4 million gains on the translation of the NOK bond into USD. As a result of the early repayment of the Bank of China loan, the Group obtained a refund of USD 2.5 million on previously paid credit insurance premiums. The realized exchange losses of 2022 include USD 5.6 million loss on the settlement of EUR-USD short-term swaps. The amortisation of the transaction costs increased due to the accelerated recognition of the capitalized ﬁnancing fees on the Bank of China loan and Sequoia credit facility upon the early termination of these loan agreements (see also Note 28 Borrowings). Related to this, EXMAR paid a cancellation fee to Sequoia of USD 1.0 million, which pri- marily explains the increase in “Banking fees”. 1 The USD 3.3 million interest expense adjustment relates to the correction of an error regarding the accounting for sale & lease back transactions dat- ing back to 2019 for four pressurized vessels. These sale and lease back transactions were accounted for in accordance with IAS 17 whereas IFRS 16 became applicable in 2019. The impact was considered as not material and therefore included as a current year adjustment. 138 5. Financial report Finance income and expense directly recognized in equity (In thousands of USD) 2022 2021 Equity accounted investees - share of other comprehensive income 1,944 618 Foreign currency translation differences 577 -1,521 Finance income/expense recognised directly in equity 2,521 -903 Recognised in: Translation reserve 265 -1,942 Hedging reserve 2,249 1,059 Non-controlling interest 7 -20 2,521 -904 The movement of the translation reserve is mainly the consequence of the evolution of the USD/EUR exchange rate. In certain of our equity accounted investees, interest rate swaps (IRS) contracts were signed to cover their exposure on variable interest rates. NOTE 13 - INCOME TAXES (In thousands of USD) 2022 2021 Taxes current period -1,717 -1,945 Prior year adjustments -314 6 Income taxes -2,030 -1,939 Deferred income taxes 958 0 Income taxes -1,072 -1,939 RECONCILIATION Result before income tax 321,420 13,574 Tax at domestic tax rate -25.00% -80,355 -25.00% -3,393 Tax impact on share of proﬁt of equity accounted investees 8,001 5,442 Increase/decrease resulting from: Effects of tax rates in foreign jurisdictions -3,807 -4,621 Non-deductible expenses -2,316 -244 Other taxes -79 -803 Current year tax losses/ credits for which no deferred tax asset has been recognised -112 -10,225 Use of tax credits, tax losses carried forward,... for which no DTA was recognised before 389 15,706 Unused tax losses under the Belgian tonnage tax regime -1,472 -3,429 Tax exempt income 78,993 -149 Adjustments in respect of prior years -316 -223 Reconciliation of the effective tax rate -0.3% -1,072 -14.29% -1,939 The tax exempt income related primarily to the gain on disposal of 100% of the shares of Export LNG (see note 4 Divestitures). 5. Financial report 139 NOTE 14 - VESSELS AND BARGES (In thousands of USD) Cost Shipping Infrastructure Under construction - advance payments Total Balance as per January 1, 2021 122,350 487,173 33,163 642,684 Changes during the ﬁnancial year Acquisitions 4,188 1,516 128,878 134,582 Borrowing costs 0 0 720 720 Reclassiﬁcation 1,909 0 0 1,909 Transfers 162,761 0 -162,761 0 Balance as per December 31, 2021 291,208 488,688 0 779,896 Balance as per January 1, 2022 291,208 488,688 0 779,896 Changes during the ﬁnancial year Acquisitions 5,656 14,212 0 19,867 Increase through share deal 0 39,860 0 39,860 Disposals 0 -300,053 0 -300,053 Reclassiﬁcation 34 -713 0 -679 Balance as per December 31, 2022 296,898 241,993 0 538,891 Depreciations and impairment losses Balance as per January 1, 2021 29,723 51,539 0 81,261 Changes during the ﬁnancial year Depreciations 13,691 15,600 0 29,291 Disposals 1,908 0 0 1,908 Balance as per December 31, 2021 45,322 86,139 0 131,461 Balance as per January 1, 2022 45,322 86,139 0 131,461 Changes during the ﬁnancial year Depreciations 19,837 11,801 0 31,638 Impairments 0 -18,300 0 -18,300 Disposals 0 -43,874 0 -43,874 Balance as per December 31, 2022 65,159 35,766 0 100,925 Net book value Net book value as per December 31, 2021 245,887 402,549 0 648,436 Net book value as per December 31, 2022 231,739 206,227 0 437,966 140 5. Financial report In 2022, the acquistions relate to capitalized dry dock expenses for vessels in the Shipping and Infrastructure seg- ments. EXMAR, Infrastructure segment, acquired the EXCALIBUR vessel on September 20, 2022 following the acquisition of the remaining 50% shares of Solaia Shipping LLC. and valued the vessel at USD 40.0 million. We refer to Note 5 Business combinations and other share deals. On August 26, 2022 the ﬂoating liquefaction unit TANGO FLNG with a net book value of USD 256.2 million was transferred to Eni following the closing of the share purchase agreement signed between the parties (see Note 4 Divestitures for a description of the transaction). The acquisitions in 2021 mainly relate to the VLGC’s, FLANDERS INNOVATION and FLANDERS PIONEER for which advances of USD 33.2 million were paid in previous years. These vessels were delivered end June 2021 and September 2021 respectively and at that moment transferred to the Shipping segment (total acquisition cost including first outfitting costs and capitalized dry-dock expenses of USD 167.0 million). The vessels are pledged as a security for the related underlying liabilities. We refer to Note 28 Borrowings for more information in respect of these underlying liabilities. Impairment For the wholly-owned ﬂeet, internal and external triggers are evaluated which indicate that the carrying value of the ﬂeet should be tested for impairment. The carrying amount of the ﬂeet is compared to the recoverable amount, which is the higher of the fair value less cost to sell and the value in use. The fair value less costs to sell is based upon the average fair market value as determined by two independent ship brokers or recent market transactions of comparable assets. This market value is corrected with an average broker- age commission to be paid when a vessel is sold. The value in use is based upon the estimated future cash ﬂows discounted to their present value and reﬂecting current market assessments relating to freight rate estimates, em- ployment and operating expenses. The value in use model also includes assumptions taken amongst others with respect to future hire paid, contract duration and number of months’ interval between two contracts. The operat- ing cash ﬂows are based on internal information and a sensitivity analysis is performed on each assumption. The discounted cash ﬂow model used by management includes estimated cash ﬂows for the remaining lifetime of the wholly-owned ﬂeet. Three-year cash ﬂow forecasts are estimated by management based upon the past experience as well as current market expectations regarding volumes and freight rates going forward. Freight rates as well as operating expenses subsequent to this three-year period are expected to change in line with estimated inﬂation afterwards. The discount rate used is a weighted average cost of capital of 7.6% for the Shipping LPG segment (2021: 5.5%), 9.5% for the Shipping LNG segment (2021: 6.0%) and 11.0% for the Infrastructure segment 9.2%). In 2021, the early termination of the charter agreement of the FSRU S188 triggered an impairment charge of USD 19.0 million, which was based on the fair value less cost to sell at that time. Since March 2022, the Russia-Ukraine conﬂict has resulted in signiﬁcantly higher energy prices and higher demand of LNG units. A ﬁve-year charter agree- ment for the FSRU S188 (thereafter renamed to “EEMSHAVEN LNG”) was signed with GASUNIE LNG Holdings BV, with hire income starting as from mid-August 2022. Consequently, and based on the fair value as determined by two independent brokers of the EEMSHAVEN LNG, an impairment charge of USD 18.3 million was reversed as of June 30, 2022. For vessels under joint venture ownership, impairment triggers are evaluated in the same way as for the wholly-owned ﬂeet. We refer to Note 17 Investments in equity accounted investees in this respect. 5. Financial report 141 NOTE 15 - OTHER PROPERTY, PLANT AND EQUIPMENT (In thousands of USD) Cost Land and buildings Machinery and equipment Furniture and movables Total Balance as per January 1, 2021 4,314 1,411 4,319 10,044 Changes during the ﬁnancial year Acquisitions 0 43 207 250 Disposals 0 -509 -937 -1,446 Exchange differences -332 14 -125 -443 Balance as per December 31, 2021 3,981 959 3,464 8,404 Balance as per January 1, 2022 3,981 959 3,464 8,404 Changes during the ﬁnancial year Acquisitions 49 184 321 554 Increase through business combinations 7,206 5,815 48 13,069 Disposals 0 12 -369 -357 Exchange differences -156 50 -98 -203 Balance as per December 31, 2022 11,081 7,020 3,366 21,467 Depreciations and impairment losses Balance as per January 1, 2021 3,576 1,321 3,466 8,363 Changes during the ﬁnancial year Depreciations 32 68 238 338 Disposals 0 -509 -687 -1,196 Exchange differences -277 12 -109 -375 Balance as per December 31, 2021 3,331 892 2,908 7,130 Balance as per January 1, 2022 3,331 892 2,908 7,130 Changes during the ﬁnancial year Depreciations 64 170 214 448 Disposals 0 -14 -356 -370 Exchange differences -194 -20 -84 -298 Balance as per December 31, 2022 3,202 1,027 2,681 6,910 Net book value Net book value as per December 31, 2021 651 67 556 1,274 Net book value as per December 31, 2022 7,879 5,993 684 14,557 The increase in net book value during 2022 of USD 13.3 million mainly relates to the acquisition of Bexco NV as a 100% subsidiary, i.e. USD 7.2 million land and buildings and USD 5.8 million manufacturing machinery and equip- ment (see note 5 Business combinations and other share deals for the details of the transaction). 142 5. Financial report NOTE 16 - RIGHT -OF- USE ASSETS The Group has initially applied IFRS 16 from January 1, 2019. IFRS 16 introduced a single, on-balance sheet account- ing model for lessees. As a result, the Group, as a lessee, has recognised right-of-use assets representing its rights to use the underlying assets and lease liabilities representing its obligation to make lease payments (we refer to Note 28 Borrowings in respect of right-of-use lease liabilities). (In thousands of USD) COST Property IT equipment Total Balance as per January 1, 2021 6,586 625 7,211 Changes during the ﬁnancial year Additions 2,897 92 2,990 Terminations -2,085 -267 -2,352 Exchange differences -64 -3 -67 Contract re-measurement/contract modiﬁcation 1,340 0 1,340 Balance as per December 31, 2021 8,675 446 9,121 Balance as per January 1, 2022 8,675 446 9,121 Changes during the ﬁnancial year Additions -25 791 766 Increase through business combinations 5,609 0 5,609 Terminations -241 -71 -312 Exchange differences -178 -15 -194 Contract re-measurement/contract modiﬁcation 162 -1 161 Balance as per December 31, 2022 14,002 1,151 15,153 DEPRECIATIONS AND IMPAIRMENT LOSSES Balance as per January 1, 2021 3,386 364 3,750 Changes during the ﬁnancial year Depreciations 1,487 181 1,668 Terminations -2,083 -267 -2,351 Exchange differences 59 -5 54 Balance as per December 31, 2021 2,848 273 3,121 Balance as per January 1, 2022 2,848 273 3,121 Changes during the ﬁnancial year Depreciations 1,294 194 1,488 Terminations -241 -71 -312 Exchange differences -42 -13 -55 Balance as per December 31, 2022 3,859 384 4,242 NET BOOK VALUE Net book value as per December 31, 2021 5,827 173 6,000 Net book value as per December 31, 2022 10,143 767 10,910 The increase in the net book value of the right-of-use assets by USD 4.9 million in 2022 is primarily a result of the Bexco business combination (see also note 5). 1535. Financial report NOTE 17 – INVESTMENTS IN EQUITY ACCOUNTED INVESTEES The change in investments in equity accounted investees can be detailed as follows: (In thousands of USD) 2022 2021 Balance as per January 1 86,760 64,324 Changes during the period: Share in profit/(loss) 32,007 21,769 Decrease through business combinations and other share deals -11,552 0 Dividends -2,079 -379 Change in allocated negative net assets (1) 0 335 Exchange differences -305 -441 Changes in other comprehensive income equity accounted investees 2,249 1,059 Other 2 93 Balance as per December 31 107,082 86,760 (1) The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor’s interest in the equity accounted investee (i.e. primarily deducted from receivables) if such components exists. In case the negative net asset exceeds the investor’s interest, a corresponding liability is recognized only to the extent that the Group has a legal or constructive obligation. In total, an amount of USD 2.0 million was netted in respect of negative net assets at year-end 2021. The share in the profit of equity accounted investees increased from USD 21.8 million to USD 32.0 million primarily due to the contribution of the SEAPEAK LPG joint ventures, that benefited from higher time charter rates, lower operating expenses and higher other finance income. During 2022, EXMAR acquired the remaining shares of Bexco NV and Solaia Shipping LLC of respectively 55.1% and 50.0% (see Note 5 Business combinations and other share deals for additional information). Consequently, these entities are no longer equity accounted investees and are fully consolidated since the date of obtaining control. The part of EXMAR in the results of 2022 until the date of control is still included in the profit and loss statement “Share of result in equity accounted investees (net of income tax)”. EXMAR has provided guarantees to financial institutions that granted credit facilities to her equity accounted inves- tees. As of December 31, 2022 an amount of USD 541.6 million (2021: USD 473.8 million) was outstanding under such loan agreements, of which EXMAR has guaranteed USD 270.8 million (2021: USD 236.9 million). We refer in this respect also to Note 32 Financial risks and financial instruments. EXMAR did not incur material contingent liabilities versus its equity accounted investees. No other commitments than the earlier mentioned guarantees are provided by EXMAR to its equity accounted investees. Following regulatory requirements or borrowing arrangements, our joint ventures or associates may be restricted to make cash distributions such as dividend payments or repayments of shareholder loans. Under the borrowing arrangements our joint ventures or associates may only make a distribution if no event of default or no breach of any covenant would result from such distribution. Under corporate law, dividend distributions are restricted if the net assets would be less than the amount of paid up capital plus any reserves that cannot be distributed. For the fleet under joint-venture ownership, impairment triggers are evaluated in the same way as for the wholly-owned fleet. We refer to Note 14 Vessels and barges for more information in this respect. In 2022, EXMAR accounted for a share in the profit of the equity accounted investees (USD 32.0 million), which is positively impacted by the reversal of impairment charges on 3 vessels (representing USD 9.0 million for EXMAR’s share in profit). During 2021, impair- ment charges were reversed for three vessels sold and one vessel classified as held for sale at year-end (positive impact of USD 3.2 million on EXMAR’s share in profit). 144 5. Financial report NOTE 18 - FINANCIAL INFORMATION EQUITY ACCOUNTED INVESTEES EXMAR has no liabilities towards its equity accounted investees and has the following assets: (In thousands of USD) 2022 2021 Investments in equity accounted investees: Joint ventures 106,625 81,390 Associates 457 5,370 Borrowings to equity accounted investees: Long-term 0 24,760 Short-term (or current portion of long-term) 7,000 15,407 Trade and other receivables (see also Note 36 Related parties) Gross balance 10,977 6,373 Impairment -6,903 0 Total 118,157 133,300 Its investments at year-end 2022 can be detailed as follows: Joint ventures Segment JV partner Description activities Estrela Ltd Infrastructure ASS Owner of the accommodation barge NUNCE EXMAR Gas Shipping Ltd Shipping SEAPEAK Previously owner of the midsize vessel TOURAINE EXMAR LPG BV Shipping SEAPEAK Holding company for EXMAR-Seapeak activities EXMAR Shipping BV Shipping SEAPEAK Owner of 18 midsize carriers, of which two carriers under ﬁnance lease and one held for sale Good Investment Ltd Shipping SEAPEAK Time-charter agreement of the VLGC BW TOKYO Monteriggioni Inc Shipping MOL Owner of the LNG carrier EXCEL which was sold during 2017 - dormant since Associates Segment Ownership% Description activities Marpos NV Supporting services 45.00% Provides waste solutions for maritime industry Electra Offshore Ltd Infrastructure 40.00% Owner of the accommodation barge WARIBOKO Exview Hong Kong Ltd Infrastructure 40.00% Bareboat owner of the accommodation barge WARIBOKO Springmarine Nigeria Ltd Infrastructure 40.00% Time-charter agreement for the accommodation barge WARIBOKO 1555. Financial report (In thousands of USD) Joint ventures Associates JV partner Seapeak MOL Seapeak ASS Anglo- Eastern Ownership percentage 50% 50% 50% 50% 50% 45% 45% 40% Entity Total Seapeak Monte- riggioni Solaia Shipping Estrela Ltd AEX BEXCO Marpos Total Wariboko companies TOTAL Non current assets 613,933 0 0 11,410 0 0 404 2,675 628,422 Current assets 48,672 4,725 0 4,962 0 0 1,207 14,852 74,418 of which cash and cash equivalents 37,665 4,725 0 4,932 0 0 657 57 48,036 Non current liabilities 355,773 4,693 0 0 0 0 0 8,445 368,911 of which bank borrowings 340,515 0 0 0 0 0 0 0 340,515 of which finance leases 2,958 0 0 0 0 0 0 0 2,958 of which other borrowings 0 0 0 0 0 0 0 2,225 2,225 Current liabilities 161,607 56 0 609 0 0 595 28,794 191,661 of which bank borrowings 4,033 0 0 0 0 0 0 0 4,033 of which finance leases 103,249 0 0 0 0 0 0 0 103,249 of which other borrowings 0 0 0 0 0 0 0 14,190 14,190 0 0 Revenue 172,129 0 0 10,220 0 17,471 2,254 0 202,074 Depreciation and amortization 52,754 0 2,941 1,751 0 661 71 1,933 60,111 Impairment (reversal) -7,950 0 -10,000 0 0 17 0 482 -17,451 Interest income 1,034 34 19 0 0 0 0 0 1,087 Interest expense 22,515 0 581 0 0 100 7 1,198 24,401 Income tax expense 12 0 0 0 0 2 145 0 159 Profit or (loss) from continuing operations 62,978 -4 -1,126 1,626 0 187 413 -9,853 54,221 Other comprehensive income 4,498 0 0 0 0 0 0 4,498 Total comprehensive income 67,476 -4 -1,126 1,626 0 187 413 -9,853 58,719 0 Net assets (100%) 197,525 -24 0 15,763 0 0 1,016 -13,492 200,788 EXMAR share in net assets 98,763 -12 0 7,882 0 0 457 -5,397 101,692 Share in net assets of equity accounted investees on January 1, 2022 65,025 -10 7,736 8,650 0 4,930 439 -1,961 84,809 Share in total comprehensive income 33,738 -2 -563 813 0 84 186 0 34,256 Decrease through business combinations 0 0 -7,173 0 0 -4,379 0 0 -11,552 Dividends 0 0 0 -1,581 0 -337 -161 0 -2,079 Foreign currency translation differences 0 0 0 0 0 -298 -7 0 -305 Other 0 4 0 0 0 0 0 4 Share in net assets of equity accounted investees on December 31, 2022 98,763 -8 0 7,882 0 0 457 -1,961 105,133 Netting negative equity and impairment 0 0 0 0 0 0- 0 1,961 1,961 Share in net assets of equity accounted investees on December 31, 2022, after netting negative equity 98,751 -8 0 7,882 0 0 457 0 107,082 146 5. Financial report Joint ventures Associates (In thousands of USD) JV partner Seapeak MOL Seapeak ASS Anglo- Eastern Ownership percentage 50% 50% 50% 50% 50% 45% 45% 40% Entity Total Seapeak Monte- riggioni Solaia Shipping Estrela Ltd AEX BEXCO Marpos Total Wariboko companies TOTAL Non current assets 621,033 0 30,127 13,161 0 6,664 355 7,630 678,970 Current assets 86,195 4,693 4,475 5,659 0 18,958 1,297 7,507 128,784 of which cash and cash equivalents 54,474 4,693 4,263 5,626 0 228 942 218 70,444 Non current liabilities 507,258 4,693 7,500 0 0 3,478 0 1,015 523,944 of which bank borrowings 253,137 0 7,500 0 0 3,063 0 0 263,700 of which ﬁnance leases 174,734 0 0 0 0 0 0 0 174,734 of which other borrowings 49,531 0 0 0 0 0 0 0 49,531 Current liabilities 99,777 20 11,630 1,520 0 11,167 676 21,057 145,847 of which bank borrowings 26,233 0 10,000 0 0 894 0 0 37,127 of which ﬁnance leases 32,071 0 0 0 0 0 0 0 32,071 of which other borrowings 15,000 0 0 0 0 0 0 9,848 24,848 0 0 Revenue 173,777 0 21,687 10,401 0 48,424 2,128 5,075 261,492 Depreciation and amortization 56,144 0 3,705 1,750 0 889 72 2,293 64,853 Impairment (reversal) -6,400 0 0 0 0 -72 0 1,925 -4,547 Interest income 439 0 -7 0 0 0 0 0 432 Interest expense 21,263 0 1,204 0 0 155 10 1,177 23,809 Income tax expense 115 0 0 0 0 547 112 0 774 Proﬁt or (loss) from continuing operations 34,434 -1,247 11,460 1,708 182 2,233 307 -6,603 42,474 Other comprehensive income 1,521 0 596 0 0 0 0 0 2,117 Total comprehensive income 35,955 -1,247 12,056 1,708 182 2,233 307 -6,603 44,591 0 Net assets (100%) 130,049 -20 15,472 17,300 0 10,977 976 -5,920 168,834 EXMAR share in net assets 65,025 -10 7,736 8,650 0 4,930 439 -2,368 84,401 Share in net assets of equity accounted investees on January 1, 2021 47,086 614 1,708 7,796 -224 4,605 444 680 62,709 Share in total comprehensive income 17,978 -624 6,028 854 91 1,003 138 -2,641 22,827 Dividends 0 0 0 0 0 -277 -103 0 -379 Foreign currency translation differences 0 0 0 0 0 -401 -40 0 -441 Other -39 0 0 0 133 0 0 0 94 Share in net assets of equity accounted investees on December 31, 2021 65,024 -10 7,736 8,650 0 4,930 439 -1,961 84,809 Netting negative equity 0 0 0 0 0 0 0 1,961 1,961 Share in net assets of equity accounted investees on December 31, 2021, after netting negative equity 65,014 -10 7,736 8,650 0 4,930 439 0 86,760 5. Financial report 147 NOTE 19 - BORROWINGS TO EQUITY ACCOUNTED INVESTEES (In thousands of USD) Shipping Infrastructure Supporting services Total As per January 1, 2021 42,259 7,876 152 50,287 New loans and borrowings 0 590 0 590 Repayments -10,000 0 0 -10,000 Write-off 0 0 -376 -376 Change in allocated negative net assets (1) 0 -559 224 -335 As per December 31, 2021 32,260 7,907 0 40,167 More than 1 year 24,760 0 0 24,760 Less than 1 year 7,500 7,907 0 15,407 As per January 1, 2022 32,260 7,907 0 40,167 New loans and borrowings 20,000 21,085 0 41,085 Elimination after share deal (2) 0 -20,195 0 -20,195 Accrued interest 0 2,491 0 2,491 Repayments -52,260 0 0 -52,260 Impairment 0 -4,288 0 -4,288 Change in allocated negative net assets (1) 0 0 0 0 As per December 31, 2022 0 7,000 0 7,000 More than 1 year 0 0 0 0 Less than 1 year 0 7,000 0 7,000 (1) The equity accounted investees for whom the share in the net assets is negative, are allocated to other components of the investor’s interest in the equity accounted investee (i.e. primarily deducted from receivables) if such components exists. In case the negative net asset exceeds the investor’s interest, a corresponding liability is recognized only to the extent that the Group has a legal or constructive obligation. In total, an amount of USD 2.0 million was netted in respect of negative net assets at year-end 2021. (2) During 2022, EXMAR granted a new loan to Solaia Shipping LLC, which at that time was still an equity accounted investee. Upon obtaining 100% of the shares and control of this entity (see Note 5 Other share deals), this intra group loan is eliminated. The activities and assets of certain of our equity accounted investees are ﬁnanced through shareholder borrowings made by the Company to the respective equity accounted investees. Such long term borrowings granted are in substance part of the net investment in an associate or joint venture and any expected credit losses are accounted for before allocating negative net assets. During 2022, EXMAR recorded an impairment charge of USD 4.3 million (2021: none) and did not allocate any negative net assets, while in 2021 USD 0.6 million was deducted from the bor- rowings given to equity accounted investees. The balances mentioned below represent the outstanding balances including netting of negative net assets. EXMAR LPG (Shipping segment) USD 0 million (2021: USD 32.3 million) Both shareholders have granted shareholder loans to EXMAR LPG in 2013. Full repayment occurred in 2022. The applicable interest rate on these loans amounted to three-month LIBOR plus 0.5%. Electra Offshore Ltd (Infrastructure segment) USD 7.0 million (2021: USD 7.9 million) EXMAR Netherlands BV has granted a loan to Electra Offshore Ltd in 2016. The loan is repaid based on availability of cash and accumulates interest. The interest rate applicable on the loan is a ﬁxed percentage of 12.0%. During 2022, the accrued interests were added to the outstanding loan balance and collectability was re-assessed. The balance has been reduced to its expected recoverable amount, which is the fair value of the pledge on the under- lying asset. We also refer to Note 32 Financial risks and ﬁnancial instruments. 148 5. Financial report NOTE 20 - TAX ASSETS AND LIABILITIES Current tax assets and liabilities (In thousands of USD) December 31 2022 2021 Current tax assets 1,185 1,003 Current tax liabilities 2,873 1,309 Deferred tax assets and liabilities December 31, 2022 December 31, 2021 (In thousands of USD) Assets Liabilities Assets Liabilities Other tangible assets 0 2,618 0 0 Provisions 0 0 0 84 Employee beneﬁts 566 0 704 0 Financial instruments 0 143 0 230 Tax losses 1,071 0 0 0 Other 0 221 0 65 Deferred tax assets / liabilities 1,637 2,982 704 379 Set off of tax assets/ liabilities 0 0 -379 0 Tax assets not recognised -566 0 -325 0 Deferred tax assets and liabilities recognized 1,071 2,982 0 0 Deductible temporary differences 566 325 Unused tax losses and investment tax credits 62,596 65,069 Deferred tax assets/ liabilities not recognised 63,162 0 65,394 0 The recognition of deferred taxed increased in 2022 as a result of the fair value adjustments recorded in relation to the 100% acquisition of Bexco NV (see Note 5 Business combinations). Our equity accounted investees have limited temporary differences. Deferred tax assets on tax losses at our joint ventures and equity accounted investees amounted to USD 0.9 million end 2022 (2021: USD 0.7 million) for their share, but have not been recognized. Amounts have not been included in the above overview. Tax assets are not recognised if it is not probable that future taxable proﬁts will be available against which the group can use the beneﬁts therefrom or because the future taxable proﬁts cannot be measured on a reliable basis. The majority of the tax losses and investment tax credits do not expire in time. NOTE 21 - ASSETS HELD FOR SALE (In thousands of USD) Assets held for sale Balance as per January 1, 2021 10,000 Changes during the ﬁnancial year Impairment reversal 2,500 Balance as per December 31, 2021 12,500 Balance as per January 1, 2022 12,500 Changes during the ﬁnancial year Disposals -12,500 Balance as per December 31, 2022 0 End March 2022, EXMAR sold its aircraft, which was classiﬁed as held for sale. 5. Financial report 149 NOTE 22 - OTHER INVESTMENTS (In thousands of USD) 2022 2021 Unquoted shares 795 911 Quoted shares 1,054 938 Equity securities - FVTPL 1,849 1,849 The unquoted shares include 149 shares of Sibelco, acquired during 2014. The quoted shares include 116,338 shares of Frontera Energy Corporation quoted at CAD 12.27 on December 31, 2022 (December 31, 2021: CAD 10.24). NOTE 23 - INVENTORIES As a result of the acquisition of Bexco NV, a manufacturer of precision-engineered synthetic mooring, towing and lifting ropes for offshore, marine and industrial applications in 2022 (see Note 5 Business combinations and other share deals), the Group holds inventories, which can be detailed as follows: (In thousands of USD) 2022 2021 Raw materials and supplies 3,346 0 Work in progress 3,699 0 Goods purchased for resale 139 0 Advance payments 561 0 Finished goods 1,472 0 Inventories 9,217 0 NOTE 24 - TRADE AND OTHER RECEIVABLES (In thousands of USD) 2022 2021 Trade receivables (including contract assets) 47,087 46,826 Cash guarantees 175 199 Other receivables 14,539 3,047 Deferred charges and accrued income 5,289 5,081 Trade and other receivables 67,089 55,154 Of which ﬁnancial assets (Note 32) 59,778 48,534 Although EXMAR received the ﬁnal YPF settlement fees of USD 24.4 million (out of a total of USD 149.1 million) in accordance with the agreed payment schedules in 2022, trade receivables remained comparable to 2021 due to Bexco entering into scope (impact of USD 7.8 million, see also Note 5 Business combinations and other share deals) and new receivables resulting from the charter and/or service agreements with Gasunie (EEMSHAVEN LNG) and Eni (TANGO FLNG and EXCALIBUR). The increase in other receivables during 2022 can be explained by a USD 2.5 million premium refund related to the repayment of the Bank of China loan (see Note 12 Finance income/expenses) and higher advances paid to suppliers (mainly at the Infrastructure segment and related to the Eni project). The Group’s exposure to credit and currency risks and impairment losses related to trade and other receivables is disclosed in Note 32 Financial risks and ﬁnancial instruments. In addition to the impairment losses recorded on related parties (see Note 18), an impairment loss of USD 2.3 million was recorded, versus USD 1.1 million in 2021. Deferred charges comprise expenses already invoiced relating to the next accounting year, e.g. hire, insurances, commissions, bunkers, prepaid credit facility costs. Accrued income comprises un-invoiced revenue related to the current accounting period such as interests. 150 5. Financial report NOTE 25 - RESTRICTED CASH AND CASH AND CASH EQUIVALENTS (In thousands of USD) 2022 2021 Restricted cash 0 76,121 Bank 51,320 70,834 Cash in hand 17 73 Short-term deposits 468,216 222 Net cash and cash equivalents 519,553 71,130 In 2021, the restricted cash relates to the credit facility with the Bank of China for the TANGO FLNG that was re- leased in 2022 upon the early repayment of the loan (see Note 4 Divestitures). In the third quarter of 2022, the cash position increased signiﬁcantly due to the receipt of USD 646.7 million proceeds of the sale of Export LNG Ltd. to Eni (see also Note 4 Divestitures). After payment of the intermediary dividend (Note 26 Share capital and reserves), the acquisition of the shares of Bexco NV and Solaia Shipping LLC (Note 5 Business combinations and other share deals), EXMAR has placed USD 468.2 million on short-term deposit accounts. We refer to the consolidated statement of cash ﬂows for a detailed analysis of the cash movements. NOTE 26 - SHARE CAPITAL AND RESERVES Share capital and share premium Number of ordinary shares 2022 2021 Issued shares as per January 1 59,500,000 59,500,000 Issued shares as per December 31 - paid in full 59,500,000 59,500,000 The issued shares have no nominal value. The holders of ordinary shares are entitled to dividends and are entitled to one vote per share during the General Meeting of Shareholders of the Company. As authorized by the Extraordinary General Meeting held on September 11, 2020, the Board of Directors of EXMAR may, for a period of ﬁve years expiring in September 2025, within certain legal limits and conditions, increase the capital of EXMAR NV by a maximum amount of USD 12.0 million. Dividends With respect to ﬁnancial year 2022, the Board of Directors proposes a gross dividend of EUR 1.00 per share to be paid to owners of ordinary shares. This dividend is subject to approval by the General Meeting of Shareholders of May 16, 2023 and has therefore not been included as a liability in EXMAR’s consolidated ﬁnancial statements pre - pared under IFRS. The ﬁnancial year 2022 dividend, based on the number of shares issued, is EUR 59.5 million or a total gross dividend of USD 63.5 million. On November 2, 2022 a Special General Meeting of Shareholders approved a gross intermediary dividend of EUR 0.95 per share or a total gross dividend of EUR 56.5 million or USD 56.0 million. On May 2022, the General Meeting of Shareholders approved a gross dividend of EUR 0.08 per share or a total gross dividend of EUR 4.8 million or USD 5.2 million. In May 2021, the General Meeting of Shareholders approved a gross dividend of EUR 0.15 per share or a total gross dividend of EUR 17.9 million or USD 21.9 million. Treasury shares The reserve for treasury shares comprises the cost of the Company’s shares held by the Group. 2022 2021 Number of treasury shares held as of December 31 2,273,263 2,273,263 Book value of treasury shares held (in thousands USD) 44,349 44,349 Average cost price per share (in EUR) - historical value 14.1507 14.1507 5. Financial report 151 Translation reserve The translation reserve comprises all foreign exchange differences arising from the translation of the ﬁnancial state- ments of Group’s subsidiaries which have a functional currency different than the USD reporting currency and the direct recognition of the translation of the net intra group investment in a foreign operation (expressed in Argentin- ian peso) which is going forward recorded in Other comprehensive income. The balance in the translation reserve is mainly impacted by the appreciation or depreciation of the EUR to the USD. Hedging reserve The hedging reserve comprises the effective portion of the cumulative net change in the fair value of cash ﬂow hedging instruments related to the hedged transactions that have not yet occurred. In certain of our equity accounted investees, interest rate swaps (IRS) contracts have been closed to cover their exposure on variable interest rates. NOTE 27 - EARNINGS PER SHARE 2022 2021 Result for the period, attributable to owners of the Company (in USD) 320,317,483 11,599,651 Issued ordinary shares as per December 31 59,500,000 59,500,000 Effect of treasury shares -2,273,263 -2,273,263 Weighted average number of ordinary shares as per December 31 57,226,737 57,226,737 Basic earnings per share in USD 5.60 0.20 2022 2021 Result for the period, attributable to owners of the Company (in USD) 320,317,483 11,599,651 Weighted average number of ordinary shares as per December 31 57,226,737 57,226,737 Dilution effect of share based compensation 0 0 Weighted average number of ordinary shares including options 57,226,737 57,226,737 Diluted earnings per share in USD 5.60 0.20 As option plans 9 and 10 are anti-dilutive as per December 31, 2022 and 2021 they are not included in the calcu - lation of the diluted earnings per share. 152 5. Financial report NOTE 28 – BORROWINGS (In thousands of USD) Bank loans Other loans Lease liabilities ROU assets Total As of 1 January 2021 214,304 123,642 3,673 341,619 New loans and borrowings 144,000 0 2,990 146,990 Repayments -39,616 -22,916 -1,554 -64,086 Loan forgiveness 0 -29 0 -29 Amortized transaction costs 1,981 693 0 2,674 Exchange differences -114 -2,352 -344 -2,810 Accrued interest payable -831 -55 0 -886 Contract re-measurement/ contract modiﬁcation (1) 0 0 1,340 1,340 As of 31 December 2021 319,724 98,983 6,105 424,812 More than 1 year 281,413 27,659 4,745 313,816 Less than 1 year 38,311 71,324 1,360 110,995 As of 31 December 2021 319,724 98,983 6,105 424,812 Shipping segment 190,456 26,467 769 217,691 Infrastructure segment 129,265 72,517 3,013 204,795 Supporting services segment 3 0 2,323 2,326 As of 31 December 2021 319,724 98,983 6,105 424,812 As of 1 January 2022 319,724 98,983 6,105 424,812 New loans 0 50,014 766 50,780 Increase through business combinations 15,319 0 4,864 20,184 Repayments -163,700 -116,119 -1,476 -281,294 Transfers 7,551 -8,710 0 -1,160 Loan forgiveness 0 -1,193 0 -1,193 Amortized transaction costs 5,877 1,627 0 7,504 Exchange differences 8 -4,791 -157 -4,940 Accrued interest payable -1,387 -619 0 -2,006 Contract re-measurement/ contract modiﬁcation (1) 5,498 0 162 5,660 As of 31 December 2022 188,891 19,192 10,264 218,347 More than 1 year 139,522 19,177 8,849 167,548 Less than 1 year 49,369 16 1,415 50,800 As of 31 December 2022 188,891 19,192 10,264 218,347 Shipping segment 178,090 19,178 664 197,932 Infrastructure segment 10,005 0 2,486 12,491 Supporting services segment 796 15 7,114 7,925 As of 31 December 2022 188,891 19,192 10,264 218,347 (1) During 2022, the bank loans increased by USD 5.5 million, representing the effective interest rate correction on the pressurized ﬂeet following the exercise of the early buy-out-option (see also Note 12 Finance income/expense). 5. Financial report 153 Bank loans The bank loans mainly relate to: FLANDERS INNOVATION & FLANDERS PIONEER – USD 135.5 million (2021: 140.9 million) In 2021, the Group obtained USD 144.0 million ﬁnancing for the two new VLGC’s: FLANDERS INNOVATION starting in June 2021 (USD 72.0 million) and FLANDERS PIONEER starting in September 2021 (also USD 72.0 million) and maturing in ﬁfteen years. The weighted average interest rate implicit in these loans amounts to 5.62%. EXMAR NV has guaranteed the underlying obligations. LPG pressurized facilities - USD 42.6 million (2021: USD 43.9 million) In the last quarter of 2018 and in April 2019, EXMAR reﬁnanced respectively six and four of its LPG pressurized ﬂeet vessels through a JOLCO (Japanese Operating Lease with Call Option) structure. The loans are repayable in quarterly tranches and the applicable interest percentage amounts to three-month LIBOR plus 2.4%. The last repayment is foreseen in December 2025. The equity part of the JOLCO ﬁnancing was presented in “Other Loans” (see below). End 2022, Exmar has exercised the early buy-out option of 3 vessels, with payment planned in 2023 and conse- quently management has (i) updated the effective interest calculation (impact of USD 5.5 million), (ii) transferred the related outstanding equity part of these vessels to “bank loans” (USD 7.6 million) and presented the expected payable amount as short-term (USD 25.9 million). All obligations of the borrower are guaranteed by EXMAR NV (“guarantor”). TANGO FLNG facility - USD 0 million (2021: USD 129.3 million) End of June 2017, Export LNG Limited (a 100% subsidiary of EXMAR NV) signed a ﬁnancing agreement of USD 200.0 million with the Bank of China (BoC), Deutsche Bank and Sinosure for the ﬁnancing of the TANGO FLNG. The agreement with BoC provided a repayment period of twelve years and the loan had an interest at a rate of six-month LIBOR plus 3.0% (until end June 2021) and 2.2% as from July 2021 and was guaranteed by EXMAR NV (“guarantor”). On August 5, 2022 EXMAR entered into a share purchase agreement to sell the shares of Export LNG Ltd, to Eni free of debt. As of August 17, 2022, the Group repaid the borrowing towards BoC and the restricted cash balance was released (see Note 25) and on August 26, 2022 the transaction was closed. Aircraft held for sale - USD 0 million (2021: USD 5.6 million) Following the sale of the aircraft in March 2022 (see also Note 14 Assets and liabilities held for sale), the related loan was repaid. Additional loans acquired through business combinations – USD 10.8 million As a consequence of the acquisition of the 50% share of Solaia Shipping LLC from the joint venture partner SEA- PEAK (see Note 5 Business combinations and other share deals) in September 2022, EXMAR has acquired a USD 12.5 million loan. The amended syndicated bank loan dates from December 2021 and bears an interest of LIBOR plus a margin of 2.5% and is repayable in quarterly installments by end 2023. In the fourth quarter of 2022, Solaia repaid USD 2.5 million. On November 1,2022 EXMAR obtained full control over Bexco NV (see also Note 5 Business combinations and other share deals) and acquired loans of EUR 2.7 million or USD 2.8 million, of which EUR 1.9 million short term straight loans. End 2022, the company repaid USD 2.0 million and has an outstanding balance of USD 0.8 million. Other loans NOK 650.0 million bond - USD 0 million (2021: USD 71.3 million) In the ﬁrst quarter of 2022, EXMAR repurchased a nominal amount of NOK 113.0 million or USD 12.7 million of the senior unsecured bond issued by EXMAR Netherlands BV and repaid the remaining balance of NOK 513.0 million (or USD 53.4 million) upon maturity end May 2022. The bonds had a coupon of three-month NIBOR plus 8.75%. The NOK/USD exposure was covered by forward contracts: NOK 240 million forwards were purchased in 2021 and an additional amount of NOK 285.4 million (also covering interest repayment) was contracted early 2022 for a total value of USD 57.4 million. End 2021, this resulted in a fair value gain of USD 0.9 million, however in 2022 a loss of USD 2.6 million was realized on the settlement of these forwards, but was offset by the realized foreign currency gain upon repayment of the bond (see also Note 12 Finance income/expenses and Note 32 Financial risks and ﬁnancial instruments). Sequoia facility agreement – USD 0 million (2021: USD 0 million) On November 11, 2021, EXMAR signed a three-year facility agreement of up to USD 50.0 million with Sequoia Eco- nomic Infrastructure Income Fund (SEQI) with an applicable interest rate of LIBOR plus a margin between 7.0% and 8.75%, depending on net leverage. The facility was not used in 2021, but was drawn upon in May 2022 to repay the NOK 650 million bond (see above). The sale of 100% of the shares of Export LNG, owning company of TANGO FLNG (see also above); triggered a repayment and termination of this credit facility, which occurred on August 29, 2022. 164 5. Financial report Pressurized fleet - USD 19.2 million (2021: USD 26.5 million) The other loans comprise the outstanding equity part of the JOLCO (Japanese Operating Lease with Call Option) financing. As mentioned above, EXMAR has exercised the early buy-out option for three vessels and transferred the related debt portion (USD 7.6 million) to short-term bank loans. At year-end 2022, the outstanding balance amounts to USD 19.2 million. Management assumes to exercise the purchase options of the seven other vessels before or at the end of the lease, which will then result in an additional cash out of USD 9.3 million. Available credit facilities In May 2020, EXMAR obtained a revolving credit facility of EUR 18.0 million from Belgian financial institutions with maturity date February 1, 2022 at an interest rate of EURIBOR three-month plus 2.0% margin. This facility was extended until June 2024 and can be increased up to USD 30.0 million. EXMAR did not draw upon this facility per end 2021 and 2022. Other information On December 16, 2022 EXMAR Shipping BV, a major equity accounted investee, signed a senior sustainability linked facility with a consortium of banks in the amount of USD 450.0 million, comprising a revolving credit facility of USD 310.0 million and a term loan facility of USD 140.0 million. The facility served the purpose of refinancing the existing revolving facility of USD 310.0 million, maturing at the end of 2023, and to refinance the Japanese lease liabilities. The loan matures 5 years after signing date. As of December 31, 2022, EXMAR Shipping BV had drawn USD 280.0 million of the revolving credit facility and USD 70.0 million of the term loan. We also refer to Note 39 Subsequent events. In general, the borrowings held by EXMAR and its equity accounted investees are secured by a mortgage on the underlying assets owned by EXMAR and its equity accounted investees. Furthermore, different pledges and other types of guarantees exist to secure the borrowings. In addition, dividend restrictions are included as a special covenant in the terms of the bond. EXMAR shall not declare or make any dividend payment or distribution, whether in cash or in kind, that in aggregate exceed 50% of the consolidated net profit after tax (proportionate consolidation) based on the audited consolidated financial statements for the previous financial year. EXMAR has pledged financial assets as collateral for liabilities. Covenants Different debt covenants exist that require compliance with certain financial ratio’s. These ratios are calculated semi- annually based on EXMAR’s consolidated figures in which equity accounted investees are not accounted for under IFRS 11 but still on a proportionate basis (similar to accounting policies used for segment reporting purposes). We refer to the table below for an overview of the applicable covenants. APPLICABLE COVENANTS Ratio Pressurized facility Credit facilities (1) Other (2) Actual December 31, 2022 (3) Actual December 31, 2021 (3) Minimum Book equity ≥ USD 300 million ≥ USD 300 million ≥ $300m + 50% of net positive income USD 796.4 million USD 536.5 million Minimum free cash ≥ USD 25 million ≥ USD 20 million ≥ USD 40 million USD 547.4 million USD 107.1 million Equity ratio (Equity/Total assets) ≥ 25% NA NA 59.10% 45.39% Net Interest-Bearing Debt or NIBD/ equity (4) NA NA NA NA 0.97 Interest Coverage ratio (4) NA NA NA NA 4.72 Working capital min positive min positive min positive USD 570.1 million USD 146.1 million Net financial indebtedness ratio NA < 70% NA -14.04% 49.56% Outstanding loan amount (in thousands of USD) 61,752 - 10,000 (1) In 2022, relates to the EUR credit facility, while 2021 also included the Sequoia USD facility. (2) Other includes the financing of the EXCALIBUR and furthermore also loan amounts which are included in the proportionate consolidation but not in the equity consolidation for which covenants are calculated based on EXMAR Group data and consequently the outstanding balance for this covenant is not included in the outstanding loan amount above. The outstanding loan amount for this covenant in our proportionate consolidation amounts to USD 0 million in 2022 and USD 8.8 million in 2021. (3) The actual amounts presented are based on the most restrictive definitions. (4) These ratios are no longer applicable in 2022 as they related to the TANGO FNLG facility, the NOK bond and Sequoia credit facility, which were repaid/ terminated during 2022 (see above). Explanation of the major definitions applied in the covenant calculations: • Free cash: cash in hand (excluding pledged or blocked cash), time deposits and, in certain covenants, including undrawn credit facilities with minimum six months to maturity; • Interest coverage ratio: EBITDA divided by net interest expense of the financial period; 1655. Financial report • Book equity: equity excluding treasury shares and the effect of any impairment of intangible assets and the effect of fair value changes of any financial derivative; • Net interest-bearing debt: consolidated interest-bearing financial indebtness less free cash (and in one covenant also less restricted cash used as debt collateral) • Net interest expense interest cost (and including banking fees in certain covenants) of the Group’s interest- bearing debt less interest income of the Group including dividend received from financial assets held for sale; • Working capital: current assets less current liabilities. As of December 31, 2022 EXMAR was compliant with all covenants with sufficient headroom. EXMAR is continuously monitoring compliance with all applicable covenants in order to meet all covenants per June 2023 and December 2023. In case of non-compliance with these covenants, early repayment of related borrowings might be required and should therefore be accounted for as short term debt. Following steps are to be taken in accordance with applicable agreements if a breach of covenants would occur: • Each borrower shall notify the Facility Agent of any Defaults (and the steps, if any, taken to remedy it) promptly upon becoming aware of its occurrence. • Promptly, upon the request by the Facility Agent, the Borrower shall supply a certificate signed by two of its direc- tors certifying that no Default is continuing, specifying the Default and the steps, if any, being taken to remedy it. NOTE 29 - SHARE BASED PAYMENTS The Group established a share option plan program that entitles certain employees to register for a number of shares. The share options are only exercisable after a period of three years and for employees still in service after this three year period. Each share option entitles the holder of the option to one EXMAR share. The fair value of services received in return for share options granted are measured by reference to the exercise price of the granted share options. The estimated fair value of the services received is measured based on a binomial lattice model. The contractual life of the option is used as an input into this model. Grant date fair value of share option and assumptions at inception Plan 10 Number of options outstanding at year-end 321,250 Fair value at grant date (in EUR) 3.21 Share price at grant date (in EUR) 9.62 Exercise price at inception (in EUR) 9.62 Expected volatility (1) 40.70% Option life at inception 8 years Maturity date 2023 Expected dividends 0.3 eur/y Risk-free interest rate 0.53% (1) The expected volatility is based on the historical volatility (calculated based on the weighted average remaining life of the share options), adjusted for any expected changes to future volatility due to publicly available information. Plan 9 matured at the end of 2022 and the remaining 328,600 options forfeited. During 2022 and 2021 no options were exercised, nor were any new plans granted. 2022 2021 Reconciliation of outstanding share options Number of options Weighted average exercise price Number of options Weighted average exercise price Outstanding share options at 1 January 651,850 10.08 1,060,850 10.25 New options granted 0 0.00 0 0.00 Changes during the year Options exercised 0 0.00 0 0.00 Options forfeited -330,600 10.53 -409,000 10.52 Outstanding share options at 31 December 321,250 9.62 651,850 10.08 Exercisable share options at 31 December 321,250 9.62 651,850 10.08 All remaining outstanding options at the end of December 2022 will expire in 2023. All plans have been fully expensed since 2018. 156 5. Financial report NOTE 30 - EMPLOYEE BENEFITS Deﬁned beneﬁt plan and similar liabilities The Group provides pension beneﬁts for most of its employees, either directly or through a contribution to an in- dependent fund. The pension beneﬁts for management staff employed before January 1, 2008 are provided under a deﬁned beneﬁt plan. This plan is organized as a ﬁnal pay program. For the management, employed as from January 1, 2008, and employees promoted to management as from January 1, 2008 and the management staff who reached the age of 60, the pension beneﬁts are provided under a deﬁned contribution plan. Belgian deﬁned contribution plans are subject to the Law of April 28, 2003 on supplementary pensions (WAP). According to article 24 of this law, the employer has to guarantee a ﬁxed minimum return of 3.25% on employer contributions and of 3.75% on employee contributions and this for contributions paid until December 31, 2015. As from January 2016, the employer has to guarantee an average minimum return of 1.75% on both em- ployer and employee contributions (as changed by the Law of December 18, 2015). This guaranteed minimum return generally exceeds the return that is normally guaranteed by the insurer. Because the employer has to guarantee the statutory minimum return on these plans, not all actuarial and investment risks relat- ing to these plans are transferred to the insurance company managing the plans. Therefore, these plans do not meet the deﬁnition of deﬁned contribution plan under IFRS and have to be classiﬁed by default as deﬁned beneﬁt plans. An actuarial calculation has been performed in accordance with IAS 19 based on the projected unit credit method. Employee beneﬁts (In thousands of USD) 2022 2021 2020 2019 2018 2017 DEFINED BENEFIT PLANS Present value of funded obligations -7,523 -9,631 -10,969 -11,535 -11,697 -12,072 Fair value of the deﬁned plan assets 6,601 9,017 9,408 8,839 7,626 7,361 Present value of net obligations -922 -614 -1,561 -2,696 -4,072 -4,711 BELGIAN DEFINED CONTRIBUTION PLAN WITH GUARANTEED RETURN Present value of funded obligations -5,690 -8,102 -9,559 -5,340 -4,703 -3,313 Fair value of the deﬁned plan assets 5,571 7,986 9,405 6,438 4,609 3,198 Present value of net (obligations) assets -119 -116 -154 1,099 -94 -115 Total employee beneﬁts -1,041 -730 -1,715 -1,597 -4,166 -4,826 1675. Financial report Defined benefit plan (In thousands of USD) 2022 2021 CHANGES IN LIABILITIES DURING THE PERIOD (1) Liability as per 1 January 17,733 20,528 Distributions -979 -1,623 Actual employee's contributions 190 195 Interest expense 147 76 Current service cost 515 719 Actual taxes on contributions paid (excluding interest) -116 -128 Actuarial gains/losses -3,207 -513 Exchange differences -1,070 -1,521 Liability as per 31 December 13,213 17,733 CHANGES OF FAIR VALUE OF PLAN ASSETS (1) Plan assets as per 1 January 17,003 18,813 Contributions 1,124 1,232 Distributions -979 -1,623 Interest income 146 74 Actual taxes on contributions paid (excluding interest) -116 -128 Actual administration costs -61 -68 Actuarial gain/loss -3,913 134 Exchange differences -1,032 -1,431 Plan assets as per 31 December (2) 12,172 17,003 Net defined liability as per 31 December 1,041 730 (1) The changes in pension liabilities and plan assets include both the defined benefit plans as the Belgian defined contribution plans which qualify as a defined benefit plan. (2) The plan assets do not include any shares issued by EXMAR or property occupied by EXMAR. (In thousands of USD) 2022 2021 EXPENSE RECOGNISED IN THE STATEMENT OF PROFIT OR LOSS Current service expenses -515 -719 Interest expense -147 -76 Expected return on plan assets 146 74 Administration cost -61 -68 Total pension cost recognised in the income statement (see note 11) -577 -789 EXPENSE RECOGNISED IN OTHER COMPREHENSIVE INCOME Recognition of actuarial gains and losses -706 647 Total pension cost recognised in other comprehensive income -706 647 158 5. Financial report NOTE 31 - TRADE AND OTHER PAYABLES (In thousands of USD) 2022 2021 Trade payables 35,366 22,990 Other payables 29,100 7,749 Deferred income 11,076 6,501 Trade and other payables 75,542 37,241 Of which ﬁnancial liabilities (Note 32) 62,730 30,739 Trade payables increased in 2022 due to Bexco NV and Solaia Shipping LLC entering into the consolidation scope (see Note 5 Business combinations and other share deals) and higher Infrastructure activities related to the EEM- SHAVEN LNG and TANGO FLNG. Other payables mainly contain advances received, VAT and payroll payables and increased during 2022 as a result of the inclusion of Bexco and advances received in relation to the Congo project with Eni. Deferred income comprises already invoiced revenue, related to the next accounting year, e.g. freight, hire,... The expected employer contributions to be paid for the next ﬁnancial year amount to: (In thousands of USD) 2022 2021 Best estimate of contributions expected to be paid during next year 1,093 1,142 The actuarial assumptions and average duration of the plans are detailed below: (In weighted averages) 2022 2021 MOST SIGNIFICANT ASSUMPTIONS Discount rate at 31 December 3.75% 0.70% Expected return on assets at 31 December 3.75% 0.70% Inﬂation 2.20% 1.90% Duration of deﬁned beneﬁt plans (in years) 8 9 Duration of the Belgian deﬁned contribution plans (in years) 14 18 The plan assets are composed as follows: (In thousands of USD) 2022 2021 Shares 5.0% 4.0% Bonds & loans 88.0% 89.0% Property investments 7.0% 6.0% Cash 0.0% 1.0% NOTE 32 - FINANCIAL RISKS AND FINANCIAL INSTRUMENTS During the normal course of its business, EXMAR is exposed to various risks as described in more detail in the Cor- porate Governance Statement. EXMAR is exposed to credit, interest, currency and liquidity risks and in order to hedge this exposure, EXMAR uses different ﬁnancial instruments, mainly interest rate hedges situated within our equity accounted investees as well ais foreign currency forward contracts. EXMAR applies hedge accounting for all hedging relations which meet the conditions to apply hedge accounting (formal documentation and high effectiveness at inception and on an ongoing basis). Financial instruments are rec- ognised initially at fair value. Subsequent to initial recognition, the effective portion of changes in fair value of the ﬁnancial instruments qualifying for hedge accounting (i.e. cash ﬂow hedges), is recognised in other comprehensive income. Any ineffective portion of changes in fair value and changes in fair value of ﬁnancial instruments not qual- ifying for hedge accounting are recognised immediately in proﬁt or loss. 5. Financial report 159 Fair value & fair value hierarchy The following table shows ﬁnancial assets and ﬁnancial liabilities measured at fair value, including their level in the fair value hierarchy. (In thousands of USD) December 31, 2022 Level 1 Level 2 Level 3 Total Derivative ﬁnancial asset 0 573 0 573 Equity securities - FVTPL 1,054 795 0 1,849 Total ﬁnancial assets carried at fair value 1,054 1,368 0 2,422 Total ﬁnancial liabilities carried at fair value 0 0 0 0 (In thousands of USD) December 31, 2021 Level 1 Level 2 Level 3 Total Derivative ﬁnancial asset 0 920 0 920 Equity securities - FVTPL 938 911 0 1,849 Total ﬁnancial assets carried at fair value 938 1,831 0 2,769 Total ﬁnancial liabilities carried at fair value 0 0 0 0 Financial instruments other than those listed above are all measured at amortized cost. Credit risk Credit risk policy The Group is exposed to credit risk from its operating activities (primarily trade and other receivables and trans- actions with equity accounted investees) and from its ﬁnancing activities, including deposits with banks, foreign exchange transactions and other ﬁnancial instruments. Credit risk is monitored closely and by each segment on an ongoing basis by the Group and creditworthiness con- trols are carried out if deemed necessary. The borrowings to equity accounted investees consist of shareholder loans to our equity accounted investees that own or operate an LPG vessel or Offshore platform. As all vessels are operational and generate income or are pledged as a security for the underlying borrowing, we do not anticipate any recoverability issues for the outstand- ing borrowings (after impairment) to equity accounted investees. The equity accounted investees for whom the share in the net assets is negative, are allocated to other components (mainly deducted from receivables) of the investor’s interest in the equity accounted investee and if the negative net asset exceeds the investor’s interest, a corresponding liability is recognized to the extent that the Group has a legal or constructive obligation. The terms of the shareholder loans are discussed in Note 19 Borrowings to equity accounted investees of this annual report. The Group only engages with banks with a good credit rating. The Group monitors and manages exposures to banks with approved counterparty credit limits and credit risk parameters in order to mitigate the risk of default. Exposure to risk (In thousands of USD) 2022 2021 Borrowings to equity accounted investees 7,000 40,167 Derivative ﬁnancial assets 573 920 Other investments - equity instruments at FVTPL 1,849 1,849 Trade and other receivables (see Note 24) 59,778 48,534 Restricted cash 0 76,121 Cash and cash equivalents 519,553 71,130 Carrying amount of ﬁnancial assets 588,753 238,721 The carrying amounts of the ﬁnancial assets represent the maximum credit exposure. Impairment losses As past due outstanding receivable balances are immaterial, no ageing analysis is disclosed. At year-end 2022, we recorded impairment charges for borrowings to and trade receivable balances from equity accounted investees for a total amount of USD 11.2 million and USD 2.3 million impairment charges on other (non- trade) third party receivable balances. 160 5. Financial report Interest risk Interest risk policy The interest-bearing loans are mainly negotiated with variable interest rates. In order to monitor this interest risk, the Group makes use of interest hedging instruments available on the market when management is of the opin- ion that it is favorable to do so. For the moment, no interest rate swaps exist within our subsidiaries. On the other hand, different interest rate swaps exist within our equity accounted investees. The Group applies hedge account - ing when the conditions to apply hedge accounting are met. In case no hedge accounting is applied, the changes in fair value are recorded in the statement of proﬁt or loss. Exposure to risk (In thousands of USD) 2022 2021 Total borrowings (excluding lease liabilities) 208,083 418,707 with ﬁxed interest rate 154,669 173,079 with variable interest rate 53,414 245,628 Net exposure 53,414 245,628 The amount of variable interest rate borrowings decreased signiﬁcantly during 2022 as a result of the repayment of the NOK unsecured bond and the Bank of China credit facility (see Note 28 Borrowings), with outstanding balances of USD 71.3 million and USD 129.3 million respectively at year-end 2021. Sensitivity analysis In case the interest rate would increase/decrease with 50 basis points, the ﬁnancial statements would be impacted with the following amounts (assuming that all other variables remain unchanged): (In thousands of USD) 2022 2021 + 50 bp - 50 bp + 50 bp - 50 bp Variable interest rate borrowings 267 -267 1,228 -1,228 Interest rate swaps and cross-currency rate swaps 0 0 0 0 Sensitivity (net), of which 267 -267 1,228 -1,228 Impact in proﬁt and loss 267 -267 1,228 -1,228 Impact in equity 0 0 0 0 A signiﬁcant portion of EXMAR’s interest income is derived from borrowings to equity accounted investees with variable interest rates. Any increase/decrease in the interest rate would result in an increase/decrease of interest income but would mainly be offset by an increase/ decrease in the interest expense recognized by the equity ac- counted investee for a corresponding amount. Accordingly, any increase/decrease in the variable interest rate applied on the borrowings to equity accounted investees would have no impact on the net result of the Group. Therefore, borrowings to equity accounted investees have not been included in the above sensitivity analysis. 5. Financial report 161 Currency risk The Group’s currency risk is historically mainly affected by the EUR/USD ratio for manning its ﬂeet, paying salaries and all other personnel related expenses and since November 2022 also for the Bexco activities (see Note 5 Busi - ness combinations and other share transactions), which are expressed in EUR. In order to monitor the currency risk, the Group uses a range of foreign currency rate hedging instruments and forward contracts if deemed necessary. At year-end 2022, EXMAR purchased USD 13.8 million forwards, which resulted in a fair value gain of USD 1.1 million. As per December 31, 2021, no ﬁnancial instrument contracts were outstanding to cover the EUR/USD. At year-end 2022, EXMAR had also purchased EUR 75.6 million daily swaps for USD 80.6 million. In prior years and until maturity of the unsecured NOK 650.0 million in May 2022, the group also closely monitored the NOK/USD evolution and purchased forward contracts to cover the risk. End 2021, EXMAR purchased NOK 240.0 million forwards for USD 26.3 million, which resulted in a fair value gain of USD 0.9 million, however in 2022 a loss of USD 2.6 million was realized on the settlement of these forwards, but was offset by the realized foreign exchange gain upon repayment of the bond (see Note 12 Finance income/expenses and Note 28 Borrowings). Exposure to risk Exposure to currency risk, based on notional amounts in thousands of foreign currency: (In thousands of local currency) 2022 2021 EUR NOK XAF ARS EUR NOK SGD ARS Receivables 12,435 1,899 434,754 225,083 5,845 55 27 199,458 Payables -16,083 0 -12,801 -37,564 -10,453 -7,636 -106 -30,640 Interest-bearing loans 0 0 0 0 0 -625,391 0 0 Balance sheet exposure -3,648 1,899 421,953 187,519 -4,608 -632,972 -79 168,818 Forward contracts 240,000 Net exposure -3,648 1,899 421,953 187,519 -4,608 -392,972 -79 168,818 In thousands of USD -3,891 193 686 1,059 -5,219 -44,558 -59 1,643 The above overview reﬂects the exposure for the top-4 currency risks. As the XAF (Central African CFA Franc) became more important in 2022 than the SGD (Singapore Dollar) we have included the XAF for 2022 instead of the SGD. Sensitivity analysis As per December 31, 2022 an increase in the year-end EUR/USD rate of 10.0% would affect the statement of proﬁt or loss with USD -0.4 million (2021: USD -0.5 million). A 10.0% decrease of the EUR/USD rate would impact the proﬁt or loss statement with the same amount (opposite sign). As per December 31, 2022 an increase in the year-end NOK/USD rate of 10% would affect the statement of proﬁt or loss with USD -0.02 million (2021: USD -4.5 million). A 10.0% decrease of the NOK/ USD rate would impact the proﬁt or loss statement with the same amount (opposite sign). 162 5. Financial report Liquidity risk Liquidity risk policy The Group manages the liquidity risk in order to meet ﬁnancial obligations as they fall due. The risk is managed through a continuous cash ﬂow projection follow-up, monitoring balance sheet liquidity ratio’s against internal and regulatory requirements and maintaining a diverse range of funding sources with adequate back-up facilities. Different debt covenants exist that require compliance with certain ﬁnancial ratio’s. As of December 31, 2022, EX - MAR was compliant with all covenants. We also refer in this respect to Note 28 Borrowings. Maturity analysis of ﬁnancial liabilities, borrowings to equity accounted investees and ﬁnancial guarantees Our current ﬁnancial liabilities such as trade and other payables are expected to be paid within the next twelve months and are therefore not included in below tables. The contractual maturities of our ﬁnancial liabilities and our borrowings to equity accounted investees, including estimated interest payments, are detailed in the tables below. The contractual maturities of our ﬁnancial liabilities are based on the contractual amortization tables of the facilities. The undrawn parts of our credit facilities are not included in the tables below. The contractual maturities of our borrowings to equity accounted investees are based on the cash ﬂow projections for future years for the EXMAR LPG shareholder’s loan and the expected repayment of the loan for the Electra Off- shore Ltd facility (extension and terms still under negotiation), excluding netting of negative net assets (see Note 19 Borrowings to equity accounted investees). EXMAR has also provided guarantees to ﬁnancial institutions that have provided credit facilities to her equity ac- counted investees. The amount that EXMAR could have to pay if the guarantee is called on, is disclosed below under ﬁnancial guarantees. (In thousands of USD) December 31, 2022 Curr. Interest rate Matur. Carrying amount Contractual cash ﬂows Total < 1 year 1-2 years 2-5 years > 5 years Bank loans VLGC's USD 5,62% 2036 -135,492 -203,954 -13,323 -13,258 -39,210 -138,163 Bank/other loans - pressurized ﬂeet USD LIBOR+ 2.4% 2023 - 2025 -61,752 -62,831 -36,038 -16,190 -10,604 0 Bank loan - EXCALIBUR USD LIBOR+ 2.5% 2023 -10,004 -10,458 -10,458 0 0 0 Bank loans - other EUR EURIBOR + 1.7% 2028 -835 -372 -356 -16 0 0 Lease liabilities USD -2,127 -2,387 -507 -464 -1,416 0 Lease liabilities EUR -7,985 -8,516 -1,533 -1,287 -2,441 -3,255 Lease liabilities SGD -65 -66 -66 0 0 0 Lease liabilities CNY -66 -332 -20 0 0 0 Lease liabilities INR -21 -22 -22 0 0 0 -218,347 -288,939 -62,322 -31,216 -53,670 -141,419 Borrowings to equity accounted investees USD 7,000 7,840 7,840 0 0 0 Financial guarantees USD 0 -270,796 -56,458 -27,661 -186,676 0 (In thousands of USD) December 31, 2021 Curr. Interest rate Matur. Carrying amount Contractual cash ﬂows Total < 1 year 1-2 years 2-5 years > 5 years Bank/other loans - pressurized ﬂeet USD LIBOR+ 2.4% 2023 - 2025 -70,339 -74,827 -16,384 -19,334 -39,109 0 Bank loan - TANGO FLNG USD LIBOR+ 2.2% 2029 -129,265 -158,464 -21,079 -21,880 -61,334 -54,171 Bank loans VLGC's USD 5,62% 2036 -140,927 -217,650 -13,323 -13,323 -39,465 -151,540 Bank loan - aircraft USD 3,16% 2023 -5,658 -5,675 -1,864 -3,811 0 0 Bond NOK NIBOR+ 8.75% 2022 -71,324 -73,966 -73,966 0 0 0 Other loans USD 1,0% 2025 -1,194 -1,194 -1,194 0 0 0 Lease liabilities USD -2,550 -2,969 -581 -507 -1,399 -481 Lease liabilities EUR -3,422 -3,578 -858 -833 -1,667 -220 Lease liabilities SGD -66 -67 -66 -1 0 0 Lease liabilities INR -67 -72 -48 -25 0 0 Lease liabilities ROU assets CNY -424,812 -538,463 -129,364 -59,712 -142,975 -206,412 Borrowings to equity accounted investees USD 40,167 43,774 18,683 7,609 17,483 0 Financial guarantees USD 0 -236,918 -37,828 -124,860 -20,495 -53,734 5. Financial report 163 Fair values Carrying amounts versus fair values (In thousands of USD) 2022 2021 FV hierarchy Carrying amount Fair value FV hierarchy Carrying amount Fair value Borrowings to equity accounted investees 2 7,000 7,000 2 40,167 39,966 Other investments - equity instruments at FVTLP 1/2 1,849 1,849 1/2 1,849 1,849 Derivative ﬁnancial asset 2 573 573 920 920 Borrowings (excluding lease liabilities) 2 -208,083 -234,700 2 -418,707 -418,720 -198,662 -225,278 -375,771 -375,985 • The ﬁnancial assets and liabilities carried at fair value are analysed and a hierarchy in valuation method has been deﬁned: • Level 1 being quoted bid prices in active markets for identical assets or liabilities; • Level 2 being inputs in other than quoted prices included in level 1 that are observable for the related assets and liabilities, either directly (as prices) or indirectly (derived from prices); • Level 3 being inputs for the asset or liability that are not based on observable market data. The breakdown between level 1 and 2 of the equity instruments at FVTPL is shown in the beginning of this note. Basis for determining fair values: • Borrowings to equity accounted investees: present value of future cash ﬂows, discounted at the market rate of interest at reporting date or the fair value of the underlying pledged asset • Equity instruments at FVTPL: - Quoted closing bid price at reporting date for Frontera shares - Non-quoted closing ﬁxing price at reporting date through a public auction via Euronext for Sibelco shares • Forward contracts: present value of the difference between the forward price at reporting date and the for- ward price paid • Interest bearing loans: present value of future cash ﬂows, discounted at the market rate of interest at report- ing date For certain ﬁnancial assets and liabilities (trade and other receivables, cash and cash equivalents, trade and other payables and lease liabilities) not carried at fair value, no fair value is disclosed because the carrying amounts are a reasonable approximation of the fair values. 164 5. Financial report NOTE 33 – LEASES Leases as a lessee The Group leases properties, motor vehicles and IT equipment. (In thousands of USD) RIGHT-OF-USE ASSETS Property IT equipment Total Balance as per December 31, 2021 5,827 173 6,000 Balance as per December 31, 2022 10,143 767 10,910 For the full roll forward schedule in respect of the right-of-use assets including the depreciation charge for the year, we refer to Note 16 Right-of-use assets of this annual report. The Group has several lease contracts that include extension or termination options. These options are negotiated by management to provide ﬂexibility in managing its lease portfolio. Judgement is applied in determining whether these extension and options are reasonably certain to be exercised (see Note 1 Accounting policies). For the maturity analysis in respect of related lease liabilities, we refer to Note 32 Financial risks and ﬁnancial in- struments. Amounts recognised in proﬁt or loss (In thousands of USD) LEASES UNDER IFRS 16 2022 2021 Interest on lease liability 266 166 Expenses related to short-term leases and low value assets 499 522 Leases as a lessor The Group entered into long-term time charter agreements for certain assets in its ﬂeet. In respect of lease clas- siﬁcation, it was judged that substantially all risks and rewards remain with the Group. As a consequence, these agreements qualify as operating leases. Rental income recognised by the Group during 2022 was USD 65.1 million (2021: USD 41.9 million). The following table sets out a maturity analysis of lease payments, showing the undiscounted lease payments to be received after the reporting date. No variable lease payments are included. The increase in total lease payments (at the subsidiaries) compared to 2021 is mainly the result of: • The new ﬁve-year charter agreement for the EEMSHAVEN FSRU, signed in March 2022 with GASUNIE and in- cluded in the 2021 table as from the expected operability at the end of the third quarter 2022; • The new ten-year charter agreement for the EXCALIBUR FSU with Eni (see Note 4 Divestitures); The table below related to the equity accounted investees only includes EXMAR’s share in the expected operating lease payments. (In thousands of USD) 2022 2021 Less than one year 80,662 50,398 One to two years 62,765 46,078 Two to three years 62,646 44,460 Three to four years 55,187 44,396 Four to ﬁve years 32,850 36,797 More than ﬁve years 85,045 17,472 Total operating leases under IFRS 16 (Subsidiaries) 379,155 239,601 Less than one year 72,472 67,335 One to two years 28,349 21,554 Two to three years 16,101 17,415 Three to four years 5,432 12,553 Four to ﬁve years 1,806 5,425 More than ﬁve years 0 1,750 Total operating leases under IFRS 16 (equity accounted investees) 124,160 126,031 5. Financial report 165 NOTE 34 - CAPITAL COMMITMENTS At year-end 2022, the Group has capital commitments with its joint-venture partner SEAPEAK (each 50%) related to shipbuilding contracts with Hyundai Mipo Dockyard CO, Ltd. for the construction of two new midsize 46,000m 3 LPG/ammonia carriers for a total value of USD 138.0 million, of which USD 13.8 million has been prepaid in 2022. Per December 31, 2021, the Group had no material outstanding capital commitments. NOTE 35 – CONTINGENCIES Several of the Group’s companies are involved in a number of legal disputes arising from their day-to-day opera- tions. Management does not expect the outcome of these procedures to have any material effect on the Group’s ﬁnancial position. NOTE 36 - RELATED PARTIES Ultimate controlling party Saverex NV, the major Belgian shareholder of EXMAR NV prepares IFRS consolidated ﬁnancial statements which are publicly available. Saverex NV is controlled by Mr. Nicolas Saverys (Executive chairman of the Board of Direc- tors of EXMAR). Transactions with controlling shareholder and with controlling shareholder related parties Saverbel NV, controlled by Mr. Nicolas Saverys, recharged administrative expenses for KEUR 79 to the Group 2022 (same period 2021: KEUR 76). The outstanding balance at December 31, 2022 amounted to KEUR 27 (year-end 2021: KEUR 27). Saverex NV, also controlled by Mr. Nicolas Saverys, charged consulting fees for KEUR 2.900 during 2022 (same pe- riod 2021: KEUR 750), which was fully paid by December 31, 2022 (year-end 2021: KEUR 0). Furthermore, Saverex charged KEUR 0 administrative expenses in 2022 (same period 2021: KEUR 23) and KEUR 232 time-charter revenue for the yacht “Douce France” to Exmar Yachting (same period 2021: KEUR 235). The balance outstanding at year- end 2022 amounted to KEUR 0 (year-end 2021: KEUR 112). EXMAR Shipmanagement charged KEUR 61 to Saverex for shipmanagement services in respect of the yacht "Douce France" in 2022 (same period 2021: KEUR 26), for which KEUR 1 is outstanding (year-end 2021: KEUR 0). Travel PLUS invoiced a total of KEUR 33 to Saverex in respect of travel services provided during 2022 (same period 2021: KEUR 29), of which KEUR 1 is outstanding (year-end 2021: KEUR 0). Furthermore, during 2022, an amount of KEUR 108 (same period 2021: KEUR 82) was invoiced to Mr Nicolas Saverys as a recharge of private expenses. The related outstanding balance amounted to KEUR 11 (year-end 2021: KEUR 0). Transactions with related parties are at arm’s length conditions. 166 5. Financial report Transactions with joint ventures and associated companies EXMAR provides general, accounting, corporate, site supervision and ship management services to its joint ventures and associates. For these services, fees are charged based on contractual agreements between all parties involved. Below table gives an overview of the signiﬁcant receivables, signiﬁcant payables and the related P&L amount of services provided and received. December 31, 2022 December 31, 2021 (In thousands of USD) Receivables Payables Receivables Payables Ship management services 2,923 1,591 6,373 105 General, accounting and corporate services 1,151 0 0 0 Site supervision & plan approval services 0 0 0 0 Rental services 0 0 0 0 2022 2021 (In thousands of USD) Services provided P&L Services received P&L Services provided P&L Services received P&L Ship management services 12,752 0 16,247 0 General, accounting and corporate services 999 0 817 0 Site supervision & plan approval services 0 0 0 0 Rental & other services 0 0 0 0 EXMAR also provides borrowings to its joint ventures and associates for which an interest income is recognised in the ﬁnancial statements. We refer to Note 19 Borrowings to equity accounted investees for an overview of these borrowings and to Note 12 Finance income/expenses for the total amount of interest income. Transactions with key management personnel In respect of the transactions with key management personnel, we refer to the Remuneration report of 2022 which is included in this ﬁnancial report (see Corporate Governance Statement). For information relating to conﬂicts of interests, we refer to the report Board of Directors. Key management (personnel) recharged KEUR 82 expenses (same period 2021: KEUR 27). The relating outstanding amount per December 31, 2022 in respect of these services is KEUR 0 (year-end 2021: KEUR 0). Board of Directors (In thousands of EUR) 2022 2021 Chairman 100 100 Other members (individual amount) 50 50 Total paid 500 485 The total amount paid to the members of the Board of Directors represents the total payments to all non-execu - tive and independent directors for the activities as members of the Board of Directors. The executive directors of EXMAR are only remunerated in their capacity as executive and not in their capacity as executive director/member of the Board. No loans were granted to the members of the Board in 2022 nor 2021. The outstanding amount in respect of re- charged private expenses to Mr. Nicolas Saverys was zero per December 31, 2022 and 2021. Audit and Risk Committee (In thousands of EUR) 2022 2021 Chairman 20 20 Other members (individual amount) 10 10 Total paid 50 46 5. Financial report 167 Nomination and Remuneration Committee (In thousands of EUR) 2022 2021 Members (individual amount) 10 10 Total paid 30 28 Executive Committee In line with EXMAR’s total reward principles, the form and level of the Company’s executive remuneration are aligned to company performance and individual skills and performance. The remuneration package is composed of three main elements: • The ﬁxed annual remuneration; • The short-term variable remuneration (STI – short term incentive); • The long-term variable remuneration (LTI- long term incentive). The level and structure of the compensation packages are aligned with market practices for similar functions at comparable companies. End 2022, the Executive Committee consisted of four members. Customary notice periods and severance pay are provided in the agreements with the members of the Executive Committee, taking into account factors such as the position and experience of the executive manager in question, and always within the applicable legal framework. (In thousands of EUR) EXECUTIVE COMMITTEE, excluding CEO 2022 2021 Total ﬁxed remuneration 1,270 1,355 of which for insurance and pension plan 0 32 of which value of share options 0 0 Total variable remuneration 574 0 (In thousands of EUR) Nicolas Saverys/Saverex 2022 2021 Total ﬁxed remuneration 900 907 of which for insurance and pension plan 0 43 of which value of share options 0 0 Total variable remuneration 2,000 0 (In thousands of EUR) CEO 2022 2021 Total ﬁxed remuneration 575 575 of which for insurance and pension plan 0 0 of which value of share options 0 0 Total variable remuneration 500 0 No loans were granted to the members of the executive committee in 2022 or 2021. The total number of options (plan 10) granted to key management are as follows: NUMBER OF SHARES GRANTED 2022 2021 Nicolas Saverys 60,000 120,000 60,000 120,000 A number of key management personnel, or their close family members, hold positions in other companies that result in them having control or joint control over these companies. None of these companies transacted with the Group during the year. 168 5. Financial report NOTE 37 - GROUP ENTITIES CONSOLIDATED COMPANIES Country of incorporation Consolidation method Ownership 2022 2021 Joint ventures Estrela Ltd Hong Kong Equity 50.00% 50.00% EXMAR Gas Shipping Ltd Hong Kong Equity 50.00% 50.00% EXMAR LPG BV Belgium Equity 50.00% 50.00% EXMAR Shipping BV Belgium Equity 50.00% 50.00% Good Investment Ltd Hong Kong Equity 50.00% 50.00% Monteriggioni Inc Liberia Equity 50.00% 50.00% Associates Electra Offshore Ltd Hong Kong Equity 40.00% 40.00% Exview Hong Kong Ltd Hong Kong Equity 40.00% 40.00% Marpos NV Belgium Equity 45.00% 45.00% Springmarine Nigeria Ltd Nigeria Equity 40.00% 40.00% Subsidiaries Ahlmar Germany GmbH Germany Full 100.00% 100.00% Bexco NV (1) Belgium Full 100.00% 44.91% DV Offshore SAS France Full 100.00% 100.00% ECOS SRL Italy Full 60.00% 60.00% EXMAR Argentina Argentina Full 100.00% 100.00% EXMAR Energy Hong Kong Ltd Hong Kong Full 100.00% 100.00% EXMAR Energy Netherlands BV Netherlands Full 100.00% 100.00% EXMAR Energy Services BV Netherlands Full 100.00% 100.00% EXMAR Export Netherlands Netherlands Full 100.00% 100.00% EXMAR FSRU Hong Kong Ltd Hong Kong Full 100.00% 100.00% EXMAR Holdings Ltd Liberia Full 100.00% 100.00% EXMAR Hong Kong Ltd Hong Kong Full 100.00% 100.00% EXMAR LPG Holding BV Belgium Full 100.00% 100.00% EXMAR LNG Investments Ltd Liberia Full 100.00% 100.00% EXMAR Lux SA Luxembourg Full 100.00% 100.00% EXMAR Marine NV Belgium Full 100.00% 100.00% EXMAR Netherlands BV Netherlands Full 100.00% 100.00% EXMAR NV Belgium Full 100.00% 100.00% EXMAR Offshore Company USA Full 100.00% 100.00% EXMAR Offshore Ltd Bermuda Full 100.00% 100.00% EXMAR Offshore Services SA Luxembourg Full 100.00% 100.00% EXMAR Offshore BV Belgium Full 100.00% 100.00% EXMAR Singapore Pte Ltd Singapore Full 100.00% 100.00% EXMAR Shipmanagement BV Belgium Full 100.00% 100.00% EXMAR Shipmanagement India Private Ltd India Full 100.00% 100.00% EXMAR Shipping USA Inc USA Full 100.00% 100.00% EXMAR Small Scale LPG NL BV Netherlands Full 100.00% 100.00% EXMAR Small Scale LPG HK Ltd Hong Kong Full 100.00% 100.00% EXMAR Small Scale LPG BE BV Belgium Full 100.00% 100.00% EXMAR (UK) Shipping Company Ltd Great-Britain Full 100.00% 100.00% EXMAR VLGC BV Belgium Full 100.00% 100.00% EXMAR VLGC Netherlands BV Netherlands Full 100.00% 100.00% EXMAR Yachting BV Belgium Full 100.00% 100.00% Export LNG Ltd (2) Hong Kong Full - 100.00% Franship Offshore Lux SA Luxembourg Full 100.00% 100.00% Internationaal Maritiem Agentschap NV Belgium Full 99.03% 99.03% Seavie Caribean Ltd Jamaica Jamaica Full 100.00% 100.00% Seavie Private Ltd India Full 100.00% 100.00% Solaia Shipping Llc (1) Liberia Full 100.00% 50.00% Tecto Cyprus Ltd Cyprus Full 100.00% 100.00% Tecto Luxembourg SA Luxembourg Full 100.00% 100.00% Travel Plus BV Belgium Full 100.00% 100.00% (1) Change in shareholdership – we refer to Note 5 Business combinations and share deals for additional information. (2) Sold – we refer to Note 4 Divestitures. 1795. Financial report NOTE 38 - FEES STATUTORY AUDITOR The worldwide audit and other fees in respect of services provided by the statutory auditor or companies or persons related to the auditors, can be detailed as follows: (In thousands of EUR) 2022 2021 Audit services 397 389 Audit related services 174 109 Tax services 30 31 Fees statutory auditor 601 529 For 2022 and 2021, the non-audit fees do not exceed the audit fees. NOTE 39 - SUBSEQUENT EVENTS In the first quarter of 2023, the following subsequent events occurred at our equity accounted investees: • Payment of the early buy-out option of the financing of two midsize gas carriers and refinancing through the use of USD 70.0 million term loans; • Sale of the midsize gas carrier BASTOGNE, which was classified as held for sale in the management reporting, see Note 2 Segment reporting; • Additional down payment of USD 13.8 million for the construction of two new midsize vessels (see also Note 34 Capital commitments); • Ordering of two innovative 46,000m3 midsize LPG/ammonia carriers with dual fuel propulsion with option to have them ammonia fueled for a price of USD 73.4 million per vessel. On April 3, 2023 EXMAR NV (“EXMAR”) (Euronext Brussels: EXM) has been informed by SAVEREX NV (“SAVEREX”) that SAVEREX intends to launch a voluntary and conditional public takeover bid for all shares and share options issued by EXMAR not already owned by it or persons affiliated with it (the “Bid”). The Bid would be made at a price of EUR 12.10 per share, and would be paid in cash. The price of EUR 12.10 per share represents a premium of 24.74% to the closing price of EXMAR as at 31 March 2023. This price would imply a premium of 33.19%, 44.01%, 34.12% and 46.03% respectively over the one-month, three-month, six-month and twelve-month volume weighted average prices (VWAP) of the EXMAR share on the regulated market of Euronext Brussels. If EXMAR’s annual general meeting of 16 May 2023 approves the payment of a gross dividend of EUR 1.00 per share as proposed by EXMAR’s board of directors and the ex-dividend date (22 May 2023) falls prior to the date of payment of the bid price, the bid price per share is announced to be reduced by the gross amount of such dividend (before any applicable tax deduction). SAVEREX currently owns 26,899,431 shares in EXMAR (or 45.21%). EXMAR, which is considered a person affiliated with SAVEREX, owns 2,273,263 treasury shares (or 3.82%). Nicolas Saverys, which is also considered a person affili- ated with SAVEREX, owns 7,924 shares in EXMAR (or 0.01%). The Bid would thus relate to the remaining 30,319,382 shares (or 50.96%) in EXMAR. The Bid would be made subject to a number of conditions, including an acceptance threshold of 95% and customary material adverse change protection. EXMAR understands that, if following the Bid, SAVEREX and persons acting in concert with it hold at least 95% of the shares in EXMAR and have acquired, as a result of the acceptance of the Bid, at least 90% of the shares that are subject to the Bid, SAVEREX intends to launch a simplified squeeze-out bid. SAVEREX has informed the board of directors of EXMAR about its intentions to launch the Bid. Subject to their review of the prospectus, the board of directors have unanimously resolved to support and recommend the Bid. The independent directors of EXMAR have appointed Degroof Petercam Corporate Finance SA as independent expert to draw up an independent expert report in accordance with article 23 of the Royal Decree of 27 April 2007 on public takeover bids (the “Takeover Decree”). A detailed opinion of the board of directors will be set forth in the response memorandum. SAVEREX is being assisted in respect of the Bid by KBC Securities NV and BNP Paribas Fortis SA/NV as financial advisors, by Belfius Bank SA/NV as centralizing and receiving agent and by Argo Law as legal advisor. The inde- pendent directors of EXMAR are being assisted by Allen & Overy LLP as legal advisor and have appointed Degroof Petercam Corporate Finance SA as independent expert in accordance with article 23 of the Takeover Decree. No other subsequent events occurred. 170 5. Financial report SIGNIFICANT JUDGEMENTS AND ESTIMATES The signiﬁcant judgements and estimates that might have a risk of causing a material adjustment to the carrying amount of assets and liabilities within the next ﬁnancial year relate to: Impairment Management performs at least annually an impairment analysis for its ﬂeet and this analysis did not reveal any ad- ditional impairment risks at year-end 2022. We also refer to Note 14 Vessels and barges and Note 17 Investments in equity accounted investees as disclosed in this report for additional information. Provisions The LNG EXCEL, owned by one of our joint ventures, was party to a lease arrangement in the UK whereby the Les- sor could claim depreciation on the capital expenditures it incurred to acquire the vessel (Capital Allowances). As it is typical in these leasing arrangements, tax and change of law risks are assumed by the Lessee. Our joint venture terminated this lease arrangement in August 2013. The UK tax authorities (HMRC) have made inquiries in respect of the right to receive the Capital Allowances. Based on commercial, legal and ﬁnancial considerations, our position is that the allowances were validly claimed and we have informed HMRC accordingly. However, in case of a success- ful challenge by the UK tax authorities of the tax treatment of the lease, we could be required to compensate the Lessor for any tax amount to be reimbursed to the tax authorities. The amount held on the joint venture company’s escrow account (USD 1.7 million for EXMAR’s share) had therefore been provisioned in previous years. In 2021, an additional provision was recorded for EXMAR’s share of the joint venture cash balance as well as a provision for related tax and legal fees. There has been no further update in 2022. Contingent consideration liability As mentioned in Note 4 Divestitures, EXMAR sold 100% of the shares of Export LNG Ltd, the owner of the ﬂoat- ing liquefaction unit TANGO FLNG, to Eni. The sales agreement contains a price adjustment clause between plus USD 44.0 million and minus USD 78.0 million, depending on the actual performance of the TANGO FLNG during the ﬁrst six months on site. Considering the uncertainties and challenges related to the start-up activities of the TANGO FLNG in Congo, management deferred USD 78.0 million and presented this as a non-current contingent consideration liability. Resolution going concern risk The main assumptions and uncertainties for EXMAR underpinning the going concern assessment relating to the liquidity position and the covenant compliance as disclosed in the 2021 have been resolved: Liquidity position A number of adverse non-recurring events in the last years triggered uncertainty around the liquidity position and going concern considerations of the Group. Management therefore continued to closely monitor cash ﬂows during the ﬁrst half of 2022. With the ﬁve-year charter agreement signed in March 2022 with GASUNIE for the EEMSHAV- EN LNG and the closing of the sale of 100% of the shares of Export LNG, owning company of the TANGO FLNG; end August 2022 (see also Note 4 Divestitures), the Group has prepared its consolidated ﬁnancial statements as of December 31, 2022 on a going concern basis and does not consider liquidity risk as a signiﬁcant judgment to be mentioned and evaluated going forward. Covenants As a result of the strengthened ﬁnancial position, the Company has met all its ﬁnancial covenants as at December 31, 2022 with sufﬁcient headroom (see also Note 28 Borrowings). 5. Financial report 171 STATEMENT ON THE TRUE AND FAIR VIEW OF THE CONSOLIDATED FINANCIAL STATEMENTS AND THE FAIR OVERVIEW OF THE MANAGEMENT REPORT The Board of Directors, represented by Nicolas Saverys (Chairman) and Carl-Antoine Saverys, and the Executive Committee, represented by Francis Mottrie, CEO (representing FMO BV) and Christine Verhaert, CFO (represent- ing FINMORE BV), hereby conﬁrm that, to the best of their knowledge, • the consolidated ﬁnancial statements for the year ended December 31, 2022, which have been prepared in ac - cordance with International Financial Reporting Standards (IFRS) issued by the International Accounting Stand- ards Board (IASB) as adopted by the European Union, give a true and fair view of the assets, liabilities, ﬁnancial position and proﬁt or loss of the Company and the entities included in the consolidation as a whole, and • the management report includes a fair overview of the important events that have occurred during the ﬁnancial year and of the major transactions with the related parties, and their impact on the consolidated ﬁnancial state - ments, together with a description of the principal risks and uncertainties they are exposed to. 182 5. Financial report STATUTORY AUDITOR’S REPORT TO THE SHAREHOLDERS’ MEETING OF EXMAR NV FOR THE YEAR ENDED DECEMBER 31, 2022 CONSOLIDATED FINANCIAL STATEMENTS In the context of the statutory audit of the consolidated financial statements of Exmar NV (“the company”) and its subsidiaries (jointly “the group”), we hereby submit our statutory audit report. This report includes our report on the consolidated financial statements and the other legal and regulatory requirements. These parts should be considered as integral to the report. We were appointed in our capacity as statutory auditor by the shareholders’ meeting of 19 May 2020, in accordance with the proposal of the board of directors (“bestuursorgaan” / “organe d’administration”) issued upon recommendation of the audit committee. Our mandate will expire on the date of the shareholders’ meeting deliberating on the financial statements for the year ending 31 December 2022. We have performed the statutory audit of the consolidated financial statements of Exmar NV for 6 consecutive periods. REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS Unqualified opinion We have audited the consolidated financial statements of the group, which comprise the consolidated statement of financial position as at 31 December 2022, the consolidated statement of profit or loss and consolidated statement of other comprehensive income, the consolidated statement of changes in equity and the consolidated statement of cash flows for the year then ended, as well as the summary of significant accounting policies and other explanatory notes. The consolidated statement of financial position shows total assets of 1178276(000)USD and the consolidated statement of comprehensive income shows a profit for the year then ended of 320 348(000)USD. In our opinion, the consolidated financial statements give a true and fair view of the group’s net equity and financial position as of 31 December 2022 and of its consolidated results and its consolidated cash flow for the year then ended, in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium. Basis for the unqualified opinion We conducted our audit in accordance with International Standards on Auditing (ISA), as applicable in Belgium. In addition, we have applied the International Standards on Auditing approved by the IAASB applicable to the current financial year, but not yet approved at national level. Our responsibilities under those standards are further described in the “Responsibilities of the statutory auditor for the audit of the consolidated financial statements” section of our report. We have complied with all ethical requirements relevant to the statutory audit of consolidated financial statements in Belgium, including those regarding independence. We have obtained from the board of directors and the company’s officials the explanations and information necessary for performing our audit. We believe that the audit evidence obtained is sufficient and appropriate to provide a basis for our opinion. 1835. Financial report key audit matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the consolidated financial statements of the current period. These matters were addressed in the context of our audit of the consolidated financial statements as a whole and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Key audit matters How our audit addressed the key audit matters Impairment of property, plant and equip- ment – vessels and barges • Property, plant and equipment – vessels and barges with a carrying amount of 437966(000)USD represent 37% of the consolidated balance sheet total as at 31December 2022. Management’s assessment of the valuation of property, plant and equipment is significant to our audit because this process is complex and requires significant management judgement. Reference to disclosures • We refer to the consolidated financial statements, including notes to the consolidated financial statements: note 14 – Vessels & barges. • We considered the process and the internal controls implemented by management and we carried out testing relating to the design and implementation of management’s controls to assess impairment indicators and perform impairment testing. • We validated for each cash generating unit if impairment indicators, as determined by IAS 36, were considered in the impairment assessment of management. • We obtained the appraisal reports from external brokers which are used by management to test for impairment indicators and to determine the fair value less costs to sell (“FVLCTS”) of the vessels. • Where relevant, we tested management’s assumptions used in the value in use (“VIU”) calculations especially the most critical assumptions such as the post contract charter rates and discount rates. In challenging these assumptions, we took into account actual results, negotiated contract terms, external data, independent market reports, market conditions and potential climate change related impacts. • We evaluated the adequacy of the disclosures regarding the impairments of property, plant and equipment. Responsibilities of the board of directors for the preparation of the consolidated financial statements The board of directors is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and with the legal and regulatory requirements applicable in Belgium and for such internal control as the board of directors determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated financial statements, the board of directors is responsible for assessing the group’s ability to continue as a going concern, disclosing, as applicable, matters to be considered for going concern and using the going concern basis of accounting unless the board of directors either intends to liquidate the group or to cease operations, or has no other realistic alternative but to do so. 184 5. Financial report Responsibilities of the statutory auditor for the audit of the consolidated financial statements Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a statutory auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISA will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. During the performance of our audit, we comply with the legal, regulatory and normative framework as applicable to the audit of consolidated financial statements in Belgium. The scope of the audit does not comprise any assurance regarding the future viability of the company nor regarding the efficiency or effectiveness demonstrated by the board of directors in the way that the company’s business has been conducted or will be conducted. As part of an audit in accordance with ISA, we exercise professional judgment and maintain professional skepticism throughout the audit. We also: identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from an error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the group’s internal control; evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the board of directors; conclude on the appropriateness of the use of the going concern basis of accounting by the board of directors and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our statutory auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our statutory auditor’s report. However, future events or conditions may cause the group to cease to continue as a going concern; evaluate the overall presentation, structure and content of the consolidated financial statements, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation. obtain sufficient appropriate audit evidence regarding the financial information of the entities and business activities within the group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with the audit committee regarding, amongst other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the audit committee with a statement that we have complied with relevant ethical requirements regarding independence, and we communicate with them about all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated to the audit committee, we determine those matters that were of most significance in the audit of the consolidated financial statements of the current period and are therefore the key audit matters. We describe these matters in our report unless law or regulation precludes any public disclosure about the matter. 1855. Financial report OTHER LEGAL AND REGULATORY REQUIREMENTS Responsibilities of the board of directors The board of directors is responsible for the preparation and the content of the directors’ report on the consolidated financial statements, the statement of non-financial information attached to the directors’ report on the consolidated financial statements and other matters disclosed in the annual report on the consolidated financial statements. Responsibilities of the statutory auditor As part of our mandate and in accordance with the Belgian standard complementary to the International Standards on Auditing (ISA) as applicable in Belgium, our responsibility is to verify, in all material respects, the director’s report on the consolidated financial statements, the statement of non-financial information attached to the directors’ report on the consolidated financial statements and other matters disclosed in the annual report on the consolidated financial statements, as well as to report on these matters. Aspects regarding the directors’ report on the consolidated financial statements In our opinion, after performing the specific procedures on the directors’ report on the consolidated financial statements, this report is consistent with the consolidated financial statements for that same year and has been established in accordance with the requirements of article 3:32 of the Code of companies and associations. In the context of our statutory audit of the consolidated financial statements we are also responsible to consider, in particular based on information that we became aware of during the audit, if the directors’ report on the consolidated financial statements is free of material misstatement, either by information that is incorrectly stated or otherwise misleading. In the context of the procedures performed, we are not aware of such material misstatement. The non-financial information as required by article 3:32, §2 of the Code of companies and associations, has been disclosed in the directors’ report on the consolidated financial statements. This non-financial information has been established by the company in accordance with the internationally recognised framework. In accordance with article 3:80 §1, 5° of the Code of companies and associations we do not express any opinion on the question whether this non-financial information has been established in accordance with this internationally recognised framework. Statements regarding independence Our audit firm and our network have not performed any prohibited services and our audit firm has remained independent from the group during the performance of our mandate. The fees for the additional non-audit services compatible with the statutory audit, as defined in article 3:65 of the Code of companies and associations, have been properly disclosed and disaggregated in the notes to the consolidated financial statements. Single European Electronic Format (ESEF) In accordance with the draft standard on the audit of the compliance of the financial statements with the Single European Electronic Format ("ESEF"), we have also performed the audit of the compliance of the ESEF format and of the tagging with the technical regulatory standards as defined by the European Delegated Regulation No. 2019/815 of 17 December 2018 ("Delegated Regulation"). The board of directors is responsible for the preparation, in accordance with the ESEF requirements, of the consolidated financial statements in the form of an electronic file in ESEF format (“digital consolidated financial statements”) included in the annual financial report. Our responsibility is to obtain sufficient and appropriate evidence to conclude that the format and the tagging of the digital consolidated financial statements comply, in all material respects, with the ESEF requirements as stipulated by the Delegated Regulation. Based on our work, in our opinion, the format and the tagging of information in the digital consolidated financial statements included in the annual financial report of Exmar NV as of 31 December 2022 are, in all material respects, prepared in accordance with the ESEF requirements as stipulated by the Delegated Regulation. Other statements This report is consistent with our additional report to the audit committee referred to in article 11 of Regulation (EU) No 537/2014. Signed at Zaventem. The statutory auditor Deloitte Bedrijfsrevisoren/Réviseurs d’Entreprises BV/SRL Represented by Rik Neckebroeck Ben Vandeweyer 186 5. Financial report 1875. Financial report 5.3 STATUTORY FINANCIAL STATEMENTS The statutory accounts of EXMAR NV are disclosed hereafter in a summarised version. The full version will be filed with the National Bank of Belgium. The full version is available on the Company’s website (www.exmar.be) and a copy can be obtained free of charge on request. An unqualified audit opinion has been expressed by the statutory auditor. (In thousands of USD) BALANCE SHEET 31/12/2022 31/12/2021 Fixed assets 280,675 541,853 (In-)tangible assets 71 125 Financial assets 280,604 541,728 Current assets 576,413 133,227 Amounts receivable within one year 79,651 67,246 Investments 489,052 12,907 Cash and cash equivalents 6,740 52,634 Accrued income and deferred charges 970 440 Total assets 857,088 675,080 Equity 680,704 564,214 Capital 88,812 88,812 Share premium 209,902 209,902 Reserves 89,976 81,831 Accumulated profits 292,014 183,669 Provisions and deferred taxes 800 9,840 Provisions 800 9,840 Liabilities 175,584 101,026 Amounts payable within one year 175,584 101,026 Total equity and liabilities 857,088 675,080 (In thousands of USD) STATEMENT OF PROFIT OR LOSS 01/01/2022 31/12/2022 01/01/2021 31/12/2021 Operating income 4,163 7,865 Operating expenses -15,013 -12,371 Operating result -10,850 -4,506 Financial income 268,949 15,534 Financial expenses -21,831 -39,462 Result for the year before tax 236,268 -28,434 Income tax -276 -200 Result for the year 235,992 -28,634 Appropriation of result Result to be appropriated 419,661 192,447 Transfer from/(to) capital and reserves -8,145 -3,387 Result to be carried forward -292,014 -183,669 Distribution of result -119,502 -5,391

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