FormerXBC Inc. — Audit Report / Information 2021

Mar 12, 2021

XEBEC ADSORPTION INC. FORM 51-102F4 BUSINESS ACQUISITION REPORT

Item 1 Identity of Company

1.1 Name and Address of Company

Xebec Adsorption Inc. (“ Xebec ” or the “ Corporation ”) 730, boulevard Industriel Blainville, Québec, Canada J7C 3V4

1.2 Executive Officer

The name and business telephone number of an executive officer of Xebec who is knowledgeable about the significant acquisitions and this Business Acquisition Report (this “ Report ”) is:

Nathalie Théberge

Vice President, Legal Affairs & Corporate Secretary

Phone: (450) 979-8700 Ext: 5828

Item 2 Details of the Acquisitions

2.1 Nature of Businesses Acquired

On December 31, 2020, Xebec and its wholly owned subsidiary Xebec Europe B.V., completed the acquisition of Green Vision Holding B.V., the parent company of HyGear Technology and Services B.V. (“ HyGear ”) pursuant to a Share Purchase Agreement dated December 8, 2020, by and among SDI Technology Ventures B.V., Ontwikkelingsmaatschappij Oost Nederland N.V. and Stichting Administratiekantoor HyGear (the “ HyGear Acquisition ”).

HyGear, a clean-tech company specializing in the on-site production and recovery of industrial gases, is an emerging developer, manufacturer, and supplier of technology and products for the production, recovery, purification, and mixing of industrial gases, such as hydrogen and nitrogen. HyGear’s technological backbone consists of 14 active patents issued both in EU countries and the United States.

For further information regarding the nature of the business of HyGear, readers are referred to the information under the headings “Description of the Acquired Business” (on pages 20 through 31), “Risk Factors – Risks Related to the Acquisition” (on pages 51 through 55) and “Risk Factors – Risks Related to the Post-Acquisition Business and Operations of Xebec and HyGear” (on pages 58 through 62) of the short form prospectus of the Corporation dated December 21, 2020 filed on SEDAR and available under Xebec’s issuer profile at www.sedar.com.

2.2 Acquisition Date

The HyGear Acquisition was completed on December 31, 2020.

2.3 Consideration

The total consideration for the HyGear Acquisition consisted of EUR 82,000,000 ($127,346,000) and has been satisfied through payment of a cash consideration of EUR 42,000,000 ($65,226,000) and the issuance of 10,301,824 Common Shares at a deemed issuance price of $6.03 per Common Share.

Dollar amounts are expressed in Canadian dollars (“ $ ”). For purposes of the conversion of Euros to Canadian dollars, and unless otherwise stated, an exchange rate of EUR 1.0000 = $1.5530 was used on the basis of the Bank of Canada closing spot rate on December 7, 2020, being the day immediately before the announcement of the HyGear Acquisition.

2.4 Effect on Financial Position

Xebec has no current plans or proposals for material changes in its business affairs or the affairs of HyGear, which may have a significant effect on the results of operations and financial position of the Corporation.

The effect of the HyGear Acquisition on Xebec’s financial position is outlined in the Unaudited Pro Forma Condensed Consolidated Financial Statements of the Corporation as at September 30, 2020 for the nine months ended September 30, 2020 and the year ended December 31, 2019 attached as Schedule “C” to this business acquisition report.

2.5 Prior Valuations

No valuation required by securities legislation or a Canadian exchange or market to support the consideration paid by Xebec pursuant to the HyGear Acquisition has been obtained within the past 12 months.

2.6 Parties to Transactions

Neither HyGear, its affiliates or the sellers in the HyGear Acquisition were informed persons (as such term is defined in section 1.1 of National Instrument 51-102 Continuous Disclosure Obligations ), associates or affiliates of Xebec prior to the HyGear Acquisition.

2.7 Date of Report

March 12, 2021

Item 3 Financial Statements and Other Information

The following financial statements form a part of this business acquisition report:

1) Audited Consolidated Financial Statements of HyGear

Attached as Schedule “A” to this business acquisition report are the consolidated financial statements of HyGear for the year ended December 31, 2019.

The consolidated financial statements comprise the consolidated statement of financial position as at December 31, 2019 and the following statements for 2019: the consolidated statement of profit or loss and other comprehensive income, the consolidated statements of changes in equity and cash flows and the notes comprising a summary of the significant accounting policies and other explanatory information.

2) Unaudited Interim Consolidated Financial Statements of HyGear

Attached as Schedule “B” to this business acquisition report are the condensed interim consolidated financial statements of HyGear for the nine-month period ended September 30, 2020.

The condensed interim consolidated financial statements comprises the condensed consolidated statement of financial position as at September 30, 2020 and the following statements for the period from January, 1 2020 to September 30, 2020 (the condensed consolidated statement of profit or loss and other comprehensive income, the

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condensed consolidated statement of changes in equity, and the condensed consolidated statement of cash flows) and the notes, comprising a summary of the significant accounting policies and other explanatory information.

3) Unaudited Pro Forma Condensed Consolidated Financial Statements of Xebec

Attached as Schedule “C” to this business acquisition report are the unaudited pro forma condensed interim consolidated statement of financial position as at September 30, 2020, the unaudited pro forma condensed interim consolidated statement of income (loss) for the nine months ended September 30, 2020 and the unaudited pro forma condensed consolidated statement of income (loss) for the year ended December 31, 2019 of the Corporation.

Forward-Looking Statements

This business acquisition report contains “forward-looking information” and “forward-looking statements” (collectively, “forwardlooking information”) within the meaning of applicable securities laws. Forward looking information may relate to our financial outlook, and anticipated events or results and may include information regarding our financial position, business strategy, growth strategies, addressable markets, budgets, operations, financial results, taxes, dividend policy, plans and objectives. Particularly, information regarding our expectations of future results, key performance indicators, market position, expected acquisition outcomes and synergies, products and features, performance, achievements, prospects or opportunities, the markets in which we operate and our, HyGear’s customers is forward-looking information.

In some cases, forward-looking information can be identified by the use of forward-looking terminology such as “plans”, “targets”, “expects” or “does not expect”, “is expected”, “an opportunity exists”, “budget”, “scheduled”, “estimates”, “outlook”, “forecasts”, “projection”, “prospects”, “strategy”, “intends”, “anticipates”, “does not anticipate”, “believes”, or variations of such words and phrases or statements that certain actions, events or results “may”, “could”, “would”, “might”, “will”, “will be taken”, “occur” or “be achieved”, the negative of these terms and similar terminology. In addition, any statements that refer to expectations, intentions, projections or other characterizations of future events or circumstances contain forward-looking information. Statements containing forward-looking information are not historical facts but instead represent management’s expectations, estimates and projections regarding future events or circumstances.

Forward-looking information is necessarily based on a number of opinions, estimates and assumptions that we considered appropriate and reasonable as of the date such statements are made, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the risk factors identified in our most recent Management’s Discussion and Analysis, under “Risk Factors- Internal”, “Risk Factors- External” and “Risks Related to our Common Shares” in our most recent Annual Information Form, and in our other filings with the Canadian Securities regulatory authorities, all of which are available under our profile on SEDAR at www.sedar.com. If any of these risks or uncertainties materialize, or if the opinions, estimates or assumptions underlying the forward-looking information prove incorrect, actual results or future events might vary materially from those anticipated in the forward-looking information.

Although we have attempted to identify important risk factors that could cause actual results to differ materially from those contained in forward-looking information, there may be other risk factors not presently known to us or that we presently believe are not material that could also cause actual results or future events to differ materially from those expressed in such forwardlooking information. There can be no assurance that such information will prove to be accurate, as actual results and future events could differ materially from those anticipated in such information. No forward-looking statement is a guarantee of future results. Accordingly, you should not place undue reliance on forward-looking information, which speaks only as of the date made. The forward-looking information contained in this business acquisition report represents our expectations as of the date hereof (or as of the date they are otherwise stated to be made), and are subject to change after such date. However, we disclaim any intention or obligation or undertaking to update or revise any forward-looking information whether as a result of new information, future events or otherwise, except as required under applicable securities laws. All of the forward-looking information contained in this business acquisition report is expressly qualified by the foregoing cautionary statements.

SCHEDULE A

Consolidated financial statements of HyGear for the year ended December 31, 2019

Green Vision Holding B.V.

Financial Statements

December 31, 2019

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Contents

Contents	Contents
Independent Auditor’s report		3
Consolidated statement of financial position		4
Consolidated statement of profit or loss and other comprehensive income		5
Consolidated statement of changes in equity		6
Consolidated statement of cash flows		7
Notes	to the Consolidated financial statements	8
1.	Nature of business	8
2.	Basis of preparation and statement of compliance	8
3.	Significant accounting policies	9
4.	Significant accounting judgements, estimates and assumptions	20
5.	Group information	21
6.	Cash and cash equivalents	22
7.	Receivables and contract assets	22
8.	Leases	23
9.	Inventories	25
10.	Income Taxes	26
11.	Property, plant and equipment	30
12.	Intangible assets	31
13.	Trade and other payables	32
14.	Long-term debt	32
15.	Post-employment benefit costs	36
16.	Share capital	40
17.	Shares-based payments	40
18.	Revenue from contracts with customers	42
19.	Other operating expenses	42
20.	Finance costs	42
21.	Earnings per shares (EPS)	43
22.	Financial instruments	43
23.	Related party transactions	47
24.	Subsequent events	48
25.	Commitments	51
26.	Segment information	52
27.	First time adoption of IFRS	53

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Meander 261 Postbus 9221 6800 KB ARNHEM telefoon (088) 236 7261 e-mail Audit@Flynth.nl

INDEPENDENT AUDITOR’S REPORT

To: The shareholders and supervisory board of Green Vision Holding B.V.

Report on the audit of the consolidated IFRS financial statements 2019

Our opinion

We have audited the consolidated financial statements 2019 in accordance with IFRS of Green Vision Holding B.V. based in Arnhem.

In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of Green Vision Holding B.V. as at 31 December 2019 and of its result and its cash flows for 2019 in accordance with International Financial Reporting Standards (IFRS).

The consolidated financial statements comprise:

1. the consolidated statement of financial position as at 31 December 2019

2. the following statements for 2019:

3. the consolidated statement of profit or loss and other comprehensive income, the consolidated statements of changes in equity and cash flows; and

4. the notes comprising a summary of the significant accounting policies and other explanatory information.

Basis for our opinion

We conducted our audit in accordance with Dutch law, including the Dutch Standards on Auditing and International Standards on Auditing. Our responsibilities under those standards are further described in the ‘Our responsibilities for the audit of the consolidated financial statements’ section of our report.

We are independent of Green Vision Holding B.V in accordance with the Wet toezicht accountantsorganisaties (Wta, Audit firms supervision act), Verordening inzake de onafhankelijkheid van accountants bij assurance-opdrachten (ViO, Code of Ethics for Professional Accountants, a regulation with respect to independence) and other relevant independence regulations in the Netherlands. Furthermore we have complied with the Verordening gedrags- en beroepsregels accountants (VGBA, Dutch Code of Ethics).

We believe the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Emphasis of matter on impact COVID-19 in Subsequent events

The Coronavirus also impacts Green Vision Holding B.V. In the ‘Subsequent events’ (note 24 to the financial statements) management describes the impact of the Corona virus and the measures to deal with the events and circumstances. Furthermore management notes that it is difficult to assess the current impact of the Corona virus on the company and the financial position of the company, and uncertainty remains. Our opinion is not modified in respect of this matter.

Description of responsibilities regarding the consolidated financial statements

Responsibilities of management and the supervisory board for the consolidated financial statements

Management is responsible for the preparation and fair presentation of the consolidated financial statements in accordance with IFRS. Furthermore, management is responsible for such internal control as management determines is necessary to enable the preparation of the consolidated financial statements that are free from material misstatement, whether due to fraud or error.

As part of the preparation of the consolidated financial statements, management is responsible for assessing the company’s ability to continue as a going concern. Based on the financial reporting framework mentioned, management should prepare the consolidated financial statements using the going concern basis of accounting unless management either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.

Management should disclose events and circumstances that may cast significant doubt on the company’s ability to continue as a going concern in the consolidated financial statements.

The supervisory board is responsible for overseeing the company's financial reporting process.

Our responsibilities for the audit of the consolidated financial statements

Our objective is to plan and perform the audit engagement in a manner that allows us to obtain sufficient and appropriate audit evidence for our opinion.

Our audit has been performed with a high, but not absolute, level of assurance, which means we may not detect all material errors and fraud during our audit.

Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements. The materiality affects the nature, timing and extent of our audit procedures and the evaluation of the effect of identified misstatements on our opinion.

We have exercised professional judgement and have maintained professional skepticism throughout the audit, in accordance with Dutch Standards on Auditing and International Standards on Auditing, ethical requirements and independence requirements. Our audit included among others:

• identifying and assessing the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, designing and performing audit procedures responsive to those risks, and obtaining 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 error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control;

• obtaining an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the entity’s internal control;

• evaluating the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management;

• concluding on the appropriateness of management’s use of the going concern basis of accounting, and based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the 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

auditor’s report. However, future events or conditions may cause a company to cease to continue as a going concern;

• evaluating the overall presentation, structure and content of the consolidated financial statements, including the disclosures; and

• evaluating whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

Because we are ultimately responsible for the opinion, we are also responsible for directing, supervising and performing the group audit. In this respect we have determined the nature and extent of the audit procedures to be carried out for group entities. Decisive were the size and/or the risk profile of the group entities or operations. On this basis, we selected group entities for which an audit or review had to be carried out on the complete set of financial information or specific items.

We communicate with the supervisory board regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant findings in internal control that we identify during our audit.

Arnhem, December 5, 2020 Flynth Audit B.V.

signed on the original

drs. J.W.M. Verhagen RA CISA

Consolidated statement of financial position

As at December 31, 2019 and 2018 and January 1, 2018 Expressed in Euro

Notes Assets Current assets Cash and cash equivalents 6 Prepayments Contract assets 7 Receivables 7 Current portion of finance lease receivables 8 Inventories 9 Other current financial assets Total current assets Non-current assets Non-current portion of finance lease receivables 8 Right-of-use assets 8 Property, plant and equipment 11 Intangible assets 12 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables 13 Contract liabilities Current portion of long-term debt 14 Current portion of lease liabilities 8 Government grants Total current liabilities Non-current liabilities Long-term debt 14 Non-current portion of lease liabilities 8 Provisions 3 Net employee defined benefit liabilities 15 Deferred tax liabilities 10 Total non-current liabilities Total liabilities Equity Share capital 16 Other components of equity Cumulative translation adjustment Retained earnings Total equity Total equity and liabilities	2019 € 3,591,677 564,117 2,611,234 2,522,887 155,645 798,742 6,894 10,251,196 3,601,206 2,302,022 13,268,853 1,704,622 20,876,703 31,127,899 1,543,769 542,893 322,118 323,016 1,494,364 4,226,160 18,347,238 2,050,995 - - 238,700 20,636,933 24,863,093 21,853 4,602,790 13,868 1,626,295 6,264,806 31,127,899	2018 € 3,201,298 865,343 355,633 2,958,038 75,463 149,243 8,874 7,613,892 1,646,857 1,950,308 10,546,385 603,713 14,747,263 22,361,155 1,353,764 969,898 179,162 218,054 1,584,632 4,305,510 10,798,050 1,780,380 - 761,636 111,834 13,451,900 17,757,410 21,853 4,313,497 3,494 264,901 4,603,745 22,361,155	As at January 1, 2018
			€ 2,007,615 205,543 77,141 2,622,531 57,378 298,409 1,497
			5,270,114
			1,722,320 2,213,857 6,807,184 9,327
			10,752,688
			16,022,802
			1,262,164 217,807 104,941 215,423 1,445,240
			3,245,575
			4,901,515 1,998,434 380,129 790,316 112,550
			8,182,944
			11,428,519
			21,853 4,648,027 - (75,597)
			4,594,283
			16,022,802

Total equity and liabilities

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Consolidated statement of profit or loss and other comprehensive income

For the years ended December 31, 2019 and 2018 Expressed in Euro

Notes Revenue from contracts with customers 18 Government grants Total income Direct material costs Subcontracting and other external costs Salaries, wages and temporary workers Social security contribution Post-employment benefit costs 15 Amortisation and depreciation Other operating expenses 19 Capitalised expense Total expenses Operating profit Finance costs 20 Finance income Profit before tax Income tax expense 10 Profit for the year attributable to equity holders Other comprehensive income Other comprehensive income that may be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations, net of tax Net other comprehensive income that may be reclassified to profit or loss in subsequent periods Other comprehensive income that will not be reclassified to profit or loss in subsequent periods: Return on plan assets (excluding interest income) Actuarial (gains) / losses Net other comprehensive income that will not be reclassified to profit or loss in subsequent periods Other comprehensive income for the year Total other comprehensive income for the year, net of tax attributable to equity holders Earnings per share 21 Basic earnings per share Diluted earnings per share	2019 € 9,018,337 2,366,694 11,385,031 5,643,989 170,087 1,611,972 608,838 (644,595) 908,940 1,309,321 (742,117) 8,866,435 2,518,596 (965,367) 65,401 1,618,630 (126,866) 1,491,764 10,374 10,374 151,855 (282,225) (130,370) (119,996) 1,371,768 €0,35 €0,35	2018
		€ 3,931,572 1,802,857
		5,734,429
		1,821,322 164,841 1,404,362 580,679 91,033 762,582 712,032 (742,473)
		4,794,378
		940,051
		(551,692) 41,829
		430,188
		(42,865)
		387,323
		3,494
		3,494
		(77,583) 30,758
		(46,825)
		(43,331)
		343,992
		€0,09 €0,09

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Consolidated statement of changes in equity

For the years ended December 31, 2019 and 2018 Expressed in Euro

Notes As at January 1, 2018 Profit for the year Other comprehensive income Total comprehensive income Stock dividend via placement of repurchased certificates of ordinary shares 16 Shares-based payments 17 Dividend distribution 2018 16 As at December 31, 2018 Notes As at December 31, 2018 Profit for the year Other comprehensive income Total comprehensive income Shares-based payments 17 Issue of warrant 14 As at December 31, 2019	Issued ordinary share Issued cumulative preferred share	Share premium ordinary	Share premium Cum Pref	Exchange difference foreign entities	Other reserves Ordinary	Retained earnings Total equity
	€ € 21,843 10 - - - -	€ 2,780,331 - -	€ 360,800 - -	€ - - 3,494	€ 1,506,896 - -	€ € (75,597) 4,594,283 387,323 387,323 (46,825) (43,331)
	- -	-	-	3,494	-	340,498 343,992
	- - - - - -	- - -	- - -	- - -	41,077 79,067 (454,674)	- 41,077 - 79,067 - (454,674)
	21,843 10	2,780,331	360,800	3,494	1,172,366	264,901 4,603,745
	Issued ordinary share Issued cumulative preferred share	Share premium ordinary	Share premium Cum Pref	Exchange difference foreign entities	Other reserves Ordinary	Retained earnings Total Equity
	€ € 21,843 10 - - - -	€ 2,780,331 - -	€ 360,800 - -	€ 3,494 - 10,374	€ 1,172,366 - -	€ € 264,901 4,603,745 1,491,764 1,491,764 (130,370) (119,996)
	- -	-	-	10,374	-	1,361,394 1,371,768
	- - - -	- -	- -	- -	22,926 266,367	- 22,926 - 266,367
	21,843 10	**2,780,331 **	360,800	13,868	1,461,659	1,626,295 6,264,806

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Consolidated statement of cash flows

For the years ended December 31, 2019 and 2018 Expressed in Euro

Notes Operating activities Profit before tax for the year Items not affecting cash Amortisation and impairment of property, plant and equipment, right-of-use assets and intangible assets 8-11-12 Capitalized interest expense 11-12 Share-based payment payments 17 Movements in provisions Movements in net employee defined benefit liabilities 15 Movements in expected credit loss provision for finance lease receivables 8 Gain on finance lease receivable 8 Gain on lease modification 8 Net foreign exchange differences Finance costs 20 Finance income Working capital adjustments Decrease/(increase) in trade receivables, contracts assets, prepayments and other current financial assets Decrease/(increase) in inventories Decrease/(increase) in trade and other payables, contract liabilities and government grants Interest received Interest paid Income tax paid Net cash flows from operating activities Investing activities Acquisition of property, plant and equipment 11 Acquisition of intangible assets 12 Proceeds from finance lease principal portion Net cash flows used in investing activities Financing activities Repayment of long-term debt Proceeds from long-term debt Dividends paid to shareholders 16 Payment of principal portion of lease liabilities Net cash flows from/(used in) financing activities Net increase in cash and cash equivalents Net foreign exchange difference Cash and cash equivalents at January 1 Cash and cash equivalents at December 31 6	2019 € 1,618,630 908,940 62,235 22,926 - (895,139) 9,827 (671,529) (27,017) 548 965,367 (65,401) (1,165,052) (603,425) (327,268) (166,358) 40,023 (1,029,700) - (1,156,035) (5,019,900) (1,002,670) 81,292 (5,941,278) (160,576) 7,938,771 - (300,877) 7,477,318 380,005 10,374 3,201,298 3,591,677	2018
		€ 430,188 762,582 - 79,067 (380,129) (95,513) - - - - 551,692 (41,829) (1,281,176) 149,166 983,083
		1,157,131 28,481 (662,968) (43,581)
		479,063
		(4,156,655) (531,333) 57,378
		(4,630,610)
		(74,238) 6,044,994 (413,597) (215,423)
		5,341,736
		1,190,189 3,494 2,007,615
		3,201,298

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Notes to the Consolidated financial statements

1. Nature of business

The operations of Green Vision Holding B.V., registered with the Chamber of Commerce under number 810587798, with its statutory seat in Arnhem and its group companies (“the Group”) located at Westervoortsedijk 73 6827 AV in Arnhem, The Netherlands, are mainly comprised of:

• Piloting for third parties; Fast cycle from development, design of modules, construction of pilot plant to commissioning and testing.

• Development and manufacturing of on-site hydrogen generators based on steam reforming technology.

• Development and manufacturing of fuel cell products.

Sales are made in both the domestic and foreign markets.

2. Basis of preparation and statement of compliance

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS). These are the Group’s first consolidated financial statements prepared in accordance with IFRSs and IFRS 1 First-time Adoption of International Financial Reporting Standards has been applied. These consolidated financial statements do not purport to be the statutory financial statements of the Group. The significant accounting policies are set out in Note 3.

For all periods up to and including the year ended December 31, 2019, the Group prepared its statutory financial statements in accordance with the statutory provisions of Part 9, Book 2, of the Dutch Civil Code and the firm pronouncements in the Guidelines for Annual Reporting in the Netherlands as issued by the Dutch Accounting Standards Board. These financial statements for the year ended December 31, 2019 are the first the Group has prepared in accordance with IFRS. Refer to Note 27 for information on how the Group adopted IFRS.

The consolidated financial statements were authorised for issue by the Board of Directors on December 5, 2020.

Basis of consolidation

These consolidated financial statements include the accounts of Green Vision Holding B.V. and its subsidiaries. Subsidiaries are entities controlled by the company. Control is achieved when the company:

• has power over the investee;

• is exposed, or has rights, to variable returns from its involvement with the investee; and

• has the ability to use its power to affect its returns.

Generally, there is a presumption that a majority of voting rights results in control. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over an investee, including:

• The contractual arrangement(s) with the other vote holders of the investee

• Rights arising from other contractual arrangements

• The Group’s voting rights and potential voting rights

The Group re-assesses whether or not it controls an investee if facts and circumstances indicate that there are changes to one or more of the three elements of control. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Assets, liabilities, income and expenses of a subsidiary acquired or disposed of during the year are included in the consolidated financial statements from the date the Group gains control until the date the Group ceases to control the subsidiary.

A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. If the Group loses control over a subsidiary, it derecognises the related assets (including

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goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognised in profit or loss. Any investment retained is recognised at fair value.

Basis of measurement

The consolidated financial statements have been prepared on a historical cost basis, except for where IFRS requires recognition at fair value. The consolidated financial statements are presented in euros and all values are rounded to the nearest EUR (€), except when otherwise indicated.

Going concern

The directors have, at the time of authorising the financial statements for issue, a reasonable expectation that the Group has adequate resources to continue in operational existence for the foreseeable future. Thus, they continue to adopt the going concern basis of accounting in preparing the financial statements. Refer to Note 24 for additional disclosure on the impact of Covid-19.

3. Significant accounting policies

Cash and cash equivalents

Cash and cash equivalents in the consolidated statement of financial position and consolidated statements of cash flows comprise cash at banks and on hand and short-term deposits held at call with maturities of 3 months or less, which are subject to an insignificant risk of changes in value. Bank overdrafts are shown within borrowings in current liabilities on the consolidated statement of financial position. Cash and cash equivalents are stated at face value.

Inventories

Inventories are stated at the lower of cost and net realizable value.

Cost for each category of inventories is determined as follows:

• Raw materials: Purchased cost on a first-in/first-out basis

• Assemble parts: cost of direct materials and labour and a proportion of manufacturing overheads based on the normal operating capacity.

Net realizable value is the estimated selling price for inventories less all estimated costs necessary to make the sale. Inventories are recorded net of any obsolescence provision.

Property, plant and equipment

Property, plant and equipment are stated at cost less accumulated amortisation and accumulated impairment losses. Assets under construction are not amortised.

Cost includes expenditures that are directly attributable to the acquisition or manufacturing of the asset, including borrowing costs capitalised in terms of the Group’s accounting policies. Manufacturing price is comprised of the cost of raw materials and consumables, plus expenditure directly attributable to an asset’s manufacturing and installation, including labour costs. Internal hours worked are capitalised at fixed rates that include coverage for indirect operating expenses, including premises and utilities expenses, selling and marketing expenses, transport expenses and general and administrative expenses.

Subsequent costs, such as replacement of parts or major inspections, are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when it is probable that future economic benefits associated with the item will flow to the Group and the cost can be measured reliably. The present value of the expected cost for the decommissioning of an asset after its use is included in the cost of the respective asset if the recognition criteria for a provision are met. Repairs and maintenance costs are charged to the consolidated statement of profit or loss and other comprehensive income during the year in which they are incurred.

Amortisation is recognised so as to write off the cost of assets less their residual values over their useful lives. All assets have residual values of nil. The major categories of property, plant and equipment are amortised on a straight-line basis, with amortisation recognised in profit or loss. The useful lives are as follows:

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Machinery and equipment	5 years
Lease equipment	15 years
Productive equipment	15 years
Furniture and fixtures	5 years
Transport equipment	5 to 10 years

The Group allocates the amount initially recognized in respect of an item of property, plant and equipment to its significant components and amortises each such component separately. Residual values, method of amortisation and useful lives of the assets are reviewed annually and adjusted if appropriate.

An item of property, plant or equipment is derecognised upon disposal (date that the recipient obtains control) or when no future economic benefits are expected to arise from the continued use of the asset. The carrying amount of a replaced asset is derecognized when replaced. Gains and losses on disposals of property, plant and equipment are determined as the difference between the sales proceeds and the carrying amount of the asset and are included as part of other gains and losses in the consolidated statement of profit or loss and other comprehensive income.

Lessee accounting for leases

The Group has lease contracts for two properties located in the Netherlands and Singapore. In addition, vehicles and equipment, such as trailers are also leased and used by the Group.

The Group assesses whether a contract is or contains a lease, at inception of the contract. The Group recognises a right-of-use asset and a corresponding lease liability with respect to all lease arrangements in which it is the lessee, except for short-term leases (defined as leases with a lease term of 12 months or less) and leases of low value assets. For these leases, the Group recognizes the lease payments as an operating expense on a straight-line basis over the term of the lease unless another systematic basis is more representative of the time pattern in which economic benefits from the leased assets are consumed.

The lease liability is initially measured at the present value of the lease payments that are not paid at the commencement date, discounted by using the rate implicit in the lease. If this rate cannot be readily determined, the Group uses its incremental borrowing rate.

Lease payments included in the measurement of the lease liability comprise:

• Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable;

• Variable lease payments that depend on an index or rate, initially measured using the index or rate at the commencement date;

• The amount expected to be payable by the lessee under residual value guarantees;

• The exercise price of purchase options, if the lessee is reasonably certain to exercise the options; and

• Payments of penalties for terminating the lease, if the lease term reflects the exercise of an option to terminate the lease.

The lease liability is presented as a separate line in the consolidated statement of financial position.

The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability and by reducing the carrying amount to reflect the lease payments made.

The Group remeasures the lease liability (and makes a corresponding adjustment to the related right-ofuse asset) whenever:

• The lease term has changed or there is a significant event or change in circumstances resulting in a change in the assessment of whether the Group is reasonably certain to exercise their option to extend the lease term, terminate early or purchase the leased asset. In this case, the lease liability is remeasured by discounting the revised lease payments using a revised discount rate.

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• The lease payments change due to changes in an index or rate or a change in expected payment under a guaranteed residual value, in which case the lease liability is remeasured by discounting the revised lease payments using an unchanged discount rate (unless the lease payments change is due to a change in a floating interest rate, in which case a revised discount rate is used).

• A lease contract is modified and the lease modification is not accounted for as a separate lease, in which case the lease liability is remeasured based on the lease term of the modified lease by discounting the revised lease payments using a revised discount rate at the effective date of the modification.

The right-of-use assets comprise the initial measurement of the corresponding lease liability, lease payments made at or before the commencement day, less any lease incentives received and any initial direct costs. They are subsequently measured at cost less accumulated depreciation and impairment losses and are adjusted for any remeasurements of lease liabilities.

Right-of-use assets are depreciated over the shorter period of lease term and useful life of the right-of-use asset (as categorised in the PPE accounting policy).

The right-of-use assets are presented as a separate line in the consolidated statement of financial position.

Variable lease payments that do not depend on an index or rate are not included in the measurement of the lease liability and the right-of-use asset. The related payments are recognised as an expense in the period in which the event or condition that triggers those payments occurs and are included in the line “Other operating expenses” in the statement of profit or loss.

As a practical expedient, IFRS 16 permits a lessee not to separate non-lease components, and instead account for any lease and associated non-lease components as a single arrangement. The Group has not used this practical expedient. For a contract that contains a lease component and one or more additional lease or non-lease components, the Group allocates the consideration in the contract to each lease component on the basis of the relative stand-alone price of the lease component and the aggregate standalone price of the non-lease components.

Lessor accounting for leases (Gas-as-a-Service (GaaS) revenue)

As part of its normal business activities, the Group enters into lease contracts whereby gas generation technologies are manufactured and placed at customer premises in order for the customer to have on demand gas supply. Depending on the lease contracts, the Group either classifies the leases as operating or finance leases.

To classify each lease, the Group makes an overall assessment of whether the lease transfers to the lessee substantially all of the risks and rewards of ownership 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 term is for the major part of the economic life of the assets.

If an arrangement contains lease and non-lease components, the Group applies IFRS 15 to allocate the consideration in the lease arrangement.

Income from operating lease contracts is recognised using the straight-line method over the lease term. The income from these leases is presented in the consolidated statement of profit or loss under revenue.

Amounts due from lessees under finance leases are recognised at the amount of the Group’s net investment in the leases (finance lease receivables). Finance lease income, presented within finance income, is allocated to accounting periods so as to reflect a constant periodic rate of return on the Group’s net investment outstanding in respect of the leases.

Subsequent to initial recognition, the Group reviews the estimated unguaranteed residual value and applies the expected credit loss model to recognise a provision on its finance lease receivables.

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Intangible assets and research and development costs

The Group’s intangible assets consist of capitalised development costs and software.

Research and development costs

Development costs comprise expenditure on design and production of new or substantially improved products and processes. Development costs are capitalised only if:

• Development costs 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 resulting asset.

Expenditure capitalised includes the cost of materials, direct labour, and overhead costs that are directly attributable to preparing the asset for its intended use. Capitalisation of the development costs is initially done when the above criteria are met. Expenditure that does not meet the above criteria or incurred on development activities undertaken with the prospect of gaining new scientific or technical knowledge and understanding is recognised in profit/loss as research costs as it is incurred.

Amortisation on Development Costs is calculated from the date that the developed products and processes become commercially viable and are actively marketed to the Group’s customer base. Amortisation is calculated on a straight-line basis over the period of expected future benefit as stated below.

Software

Software licenses acquired are capitalised at acquisition cost and amortised over their estimated future useful lives. Expenditures that are attributable to the production of identifiable and unique software products controlled by the Group are capitalised. When internally produced, such assets are capitalised if future economic benefits are probable to flow from the asset, and the expenditure can be reliably measured. Costs associated with maintaining computer software and research expenditure are recognised in profit or loss as it is incurred.

Amortisation

Development costs 10 to 15 years Software 5 years

The estimated useful life and amortisation method are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis.

Derecognition

Intangible assets are derecognised on disposal, or when no future economic benefits are expected from use or disposal of the assets. Gains or losses arising from derecognition are measured as the difference between the sale proceeds and the carrying amount of the asset and are recognised in profit/loss when the asset is derecognised.

Impairment of property, plant and equipment, right-of-use assets and intangible assets

At each reporting date, the Group reviews the carrying amounts of and conditions surrounding its property, plant and equipment, right-of-use assets and intangible assets to determine whether there is any indication that those assets have suffered an impairment loss. If any such indication exists, the recoverable amount of the asset is estimated to determine the extent of the impairment loss (if any). The recoverable amount is the higher of fair value less cost of disposal and value in use. Where the asset does not generate cash flows that are independent from other assets, the Group estimates the recoverable amount of the cashgenerating unit to which the asset belongs. When a reasonable and consistent basis of allocation can be identified, corporate assets are also allocated to individual cash-generating units, or otherwise they are allocated to the smallest group of cash-generating units for which a reasonable and consistent allocation basis can be identified. Refer to Note 24 for additional disclosure on the impact of Covid-19.

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Provisions

General provisions

Provisions are recognised in payables when the Group has a present obligation (legal or constructive) as a result of a past event, it is probable (more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. The expense relating to a provision is presented in the statement of profit or loss net of any reimbursement.

Provisions are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting year, considering the risks and uncertainties surrounding the obligation. If the effect of the time value of money is material, provisions are discounted using a current pre-tax rate that reflects, when appropriate, the risks specific to the liability. When discounting is used, the increase in the provision due to the passage of time is recognised as a finance cost.

Assurance-type warranties

A provision for maintenance warranties was recognised for expected warranty claims on products sold prior to January 1, 2018, based on experience of the level of repairs and returns. Assumptions used to calculate the provision for warranties were based on current sales levels and current information available about returns based on the warranty period for all products sold. All warranties covering the warranty cost for Hydrogen Generation Systems sold have expired during the year ended December 31, 2018. As a result of the fact that the warranty is expired the provision was released as at December 31, 2018.

Contract balances

Contract assets

A contract asset is initially recognised for revenue earned from installation services because the receipt of consideration is conditional on successful completion of the installation. Upon completion of the installation and acceptance by the customer, the amount recognised as contract assets is reclassified to trade receivables. Contract assets are subject to impairment assessment, refer to the accounting policy on financial instruments.

Contract liabilities

A contract liability is recognised if a payment is received or a payment is due (whichever is earlier) from a customer before the Group transfers the related goods or services. Contract liabilities are recognised as revenue when the Group performs under the contract (i.e., transfers control of the related goods or services to the customer). A net position of contract asset or contract liability is determined for each contract. The cash flows in respect of advances and progress billings, are classified as cash flows from operating activities.

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.

Classification

Financial assets, other than those designated and effective as hedging instruments, are classified into the following categories:

• Amortized cost

• Fair value through profit or loss (FVTPL)

• Fair value through other comprehensive income (FVOCI)

The classification is determined by both, the Group’s business model for managing the financial assets and the contractual cash flow characteristics of the financial asset. In the periods presented, the Group does not have any financial assets categorized as FVTPL or FVOCI.

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Financial assets are measured at amortized cost if the asset meet the following conditions and are not designated as FVTPL:

• They are held within a business model whose objective is to hold the financial assets and collect its contractual cash flows

• The contractual terms of the financial assets give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

The Group’s financial assets classified as amortized cost include cash and cash equivalents, receivables, other current financial asset, and finance lease receivables.

After initial recognition at fair value adjusted for transaction costs, they are measured at amortized costs using the effective interest method. Discounting is omitted where the effect of discounting is immaterial. All income and expenses relating to financial assets that are recognized in income or loss are presented within finance costs or finance income, except for impairment of trade receivables and finance lease receivables which is presented within other operating expenses.

Financial liabilities are initially measured at fair value and where applicable, adjusted for transaction costs unless the Group designated a financial liability at fair-value through profit or loss. Subsequently, financial liabilities are measured at amortized cost using the effective interest method. All interest-related charges and, if applicable, changes in an instrument’s fair value that are reported in income or loss are included within finance costs or finance income.

The Group’s financial liabilities classified at amortized cost include trade, other payables, long-term debt and leases liabilities.

Offsetting of financial instruments

Financial assets and financial liabilities are offset and the net amount is reported in the consolidated statement of financial position if there is a currently enforceable legal right to offset the recognized amounts and there is an intention to settle on a net basis, to realise the assets and settle the liabilities simultaneously.

Impairment of financial instruments

On initial recognition and at each reporting date, the Group estimates expected credit losses for financial assets classified at amortized cost. These expected credit losses are measured using a historical credit loss experience matrix and are adjusted to reflect receivable-specific factors, general economic conditions, and an assessment of both the current and projected direction of economic conditions at the reporting date, including the time value of money, if applicable. The net change in expected credit losses on financial assets classified at amortized cost is recognized in profit or loss.

In addition, an allowance for expected credit losses has been recognised on the finance lease receivables. The amount of expect credit loss for finance lease receivables is measured at the contract level as the probability weighted present value of all cash shortfalls over the expected life of the financial asset multiplied by the expected lifetime probability of default. The cash shortfall is the difference between all contractual cash flows that are due to the Group and all the cash flows that the group expects to receive.

Income Taxes

Income tax represents the sum of the current income tax and deferred tax.

Current income tax

The tax currently payable is based on taxable profit for the year. Taxable profit differs from profit before tax as reported in profit or loss because it excludes items of income or expense that are taxable or deductible in other years and it further excludes items that are never taxable or deductible. Current income tax assets and liabilities are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted at the reporting date in the countries where the Group operates and generates taxable income.

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Current income tax relating to items recognised directly in equity is recognised in equity and not in the statement of profit or loss. Management periodically evaluates positions taken in the tax returns with respect to situations in which applicable tax regulations are subject to interpretation and establishes provisions where appropriate.

Deferred tax

Deferred tax is the tax expected to be payable or recoverable on differences between the carrying amounts of assets and liabilities in the financial statements and the corresponding tax bases used in the computation of taxable profit.

Deferred tax is provided using the liability method on temporary differences between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes at the reporting date.

Deferred tax liabilities are recognised for all taxable temporary differences, except:

• When the deferred tax liability arises from the initial recognition of goodwill or an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• In respect of taxable temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, when the timing of the reversal of the temporary differences can be controlled and it is probable that the temporary differences will not reverse in the foreseeable future

Deferred tax assets are recognised for all deductible temporary differences, the carry forward of unused tax credits and any unused tax losses. Deferred tax assets are recognised to the extent that it is probable that taxable profit will be available against which the deductible temporary differences, and the carry forward of unused tax credits and unused tax losses can be utilised, except:

• When the deferred tax asset relating to the deductible temporary difference arises from the initial recognition of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss

• In respect of deductible temporary differences associated with investments in subsidiaries, associates and interests in joint arrangements, deferred tax assets are recognised only to the extent that it is probable that the temporary differences will reverse in the foreseeable future and taxable profit will be available against which the temporary differences can be utilised

The carrying amount of deferred tax assets is reviewed at each reporting date and reduced to the extent that it is no longer probable that sufficient taxable profit will be available to allow all or part of the deferred tax asset to be utilised. Unrecognised deferred tax assets are re-assessed at each reporting date and are recognised to the extent that it has become probable that future taxable profits will allow the deferred tax asset to be recovered.

Deferred tax assets and liabilities are measured at the tax rates that are expected to apply in the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date.

Deferred tax relating to items recognised outside profit or loss is recognised outside profit or loss. Deferred tax items are recognised in correlation to the underlying transaction either in OCI or directly in equity.

The Group offsets deferred tax assets and deferred tax liabilities if and only if it has a legally enforceable right to set off current tax assets and current tax liabilities and the deferred tax assets and deferred tax liabilities relate to income taxes levied by the same taxation authority on either the same taxable entity or different taxable entities which intend either to settle current tax liabilities and assets on a net basis, or to realise the assets and settle the liabilities simultaneously, in each future period in which significant amounts of deferred tax liabilities or assets are expected to be settled or recovered.

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Post-employment benefit costs

Defined contribution retirement benefit

Payments to defined contribution retirement benefit plans are recognised as an expense when employees have rendered service entitling them to the contributions.

Defined benefit retirement benefit plans

For defined benefit retirement benefit plans, the cost of providing benefits is determined using the Projected Unit Credit Method, with actuarial valuations being carried out at the end of each annual reporting period. For the allocation of the defined benefit obligation to service years, service years are taken into account from the start of the service of the employee with the Group. Remeasurements comprising actuarial gains and losses, the effect of the asset ceiling (if applicable) and the return on plan assets (excluding interest) are recognised immediately in the statement of financial position with a charge or credit to other comprehensive income in the period in which they occur. Remeasurements recognised in other comprehensive income are not reclassified. Past service cost is recognised in profit or loss when the plan amendment or curtailment occurs, or when the Group recognises related restructuring costs, if earlier. Gains or losses on settlement of a defined benefit plan are recognised when the settlement occurs. Net interest is calculated by applying a discount rate to the net defined benefit liability or asset. Defined benefit costs are split into three categories:

• service costs, which includes current service cost, past service cost and gains and losses on curtailments and settlements;

• net interest expense or income; and

• remeasurements.

The Group recognises service costs and net interest expense or income in profit or loss. The retirement benefit obligation recognised in the consolidated statement of financial position represents the deficit or surplus in the Group’s defined benefit plans. Any surplus resulting from this calculation is limited to the present value of any economic benefits available in the form of refunds from the plans or reductions in future contributions to the plans.

Share capital

Share capital represents the amount received on the issue of shares, less issuance costs, net of any underlying income tax benefit from these issuance costs. If shares are issued when options and warrants are exercised, the share capital account also comprises the compensation costs previously recorded as other components of equity.

Cash dividend

The Group recognises a liability to pay a dividend when the distribution is authorised and the distribution is no longer at the discretion of the Group. A distribution is authorised when it is approved by the shareholders. A corresponding amount is recognised directly in equity.

Revenue from contract with customers

The Group is in the business of providing gasses to customers, developing and manufacturing of on-site gasses generators and installation, maintenance and support services. Revenue from contract with customers is recognised when control of the goods or services are transferred to the customer at an amount that reflects the consideration to which the Group expects to be entitled in exchange for those goods or services. The following revenue streams are applicable to the normal business activities of the Group:

• Gas-as-a-Service (GaaS) revenue;

• Product revenue;

• Gasses generators and installation; and

• Service and maintenance revenue.

Gas-as-a-Service (GaaS) Revenue is addressed in lease section

Product revenue comprises of the delivery of gasses to customers via traditional road transportation. The revenue from such transactions is recognised at a point of time when control transfers from the Group to the customer. Transaction prices are determined based on agreed upon fixed prices per volume ordered by customers.

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Gasses generators and installation revenue comprises of the sale of assets which are manufactured based on customer specific needs and requirements. The Group consider these contracts as one performance obligation. The Group manufactures an asset which would have no alternative use in its completed state and the Group is entitled to receive consideration during the manufacturing period. Consideration received is not refundable to customers for as far as costs have been incurred during the manufacturing process. The Group recognises revenue over the time of the manufacturing process. Revenue is measured using the input method whereby revenue is recognised based on the pro rata cost incurred in relation to the total estimated cost to manufacture. The manufacturing process for an asset is estimated to be less than 12 months based on experience. The Group therefore applies the practical expedient in IFRS 15.63 whereby an entity does not adjust the consideration to be received for the effects of a significant financing component.

Service and maintenance revenue comprise of the after-sale maintenance and servicing of the asset which was transferred to the customer on an annual subscription contract. The service and maintenance revenue are a distinct stand ready performance obligation to provide an undefined quantity of services over the duration of the contract period. A portion of the transaction price is therefore allocated to the service and maintenance based on the stand-alone selling price of those services. Discounts are not considered as they are only given in rare circumstances and are never material. Revenue is recognised over-time over the duration of the contract period.

Government grants

Government grants are recognised where there is reasonable assurance that the grant will be received and all attached conditions will be complied with. The Group’s grants are related to expenses item, it is recognised as income on a systematic basis over the period that the related costs, for which it is intended to compensate, are expensed. Government grants as a compensation of expenses are deducted from the respective expense lines and government grants related to exploitation of R&D projects are presented as part of government grants under total income.

Share-based payments

Employees (including senior executives) of the Group receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments. The Group assesses whether share payment arrangements qualify as equity settled or cash settled. The cost of equity-settled transactions is determined by the fair value at the date when the grant is made using an appropriate valuation model, further details of which are given in Note 17. That cost is recognised in Salaries, wages and temporary workers, together with a corresponding increase in equity (other reserves ordinary), over the period in which the service and, where applicable, the performance conditions are fulfilled (the vesting period). The cumulative expense recognised for equity-settled transactions at each reporting date until the vesting date reflects the extent to which the vesting period has expired and the Group’s best estimate of the number of equity instruments that will ultimately vest. The expense or credit in the statement of profit or loss for a period represents the movement in cumulative expense recognised as at the beginning and end of that period. No expense is recognised for awards that do not ultimately vest because non-market performance and/or service conditions have not been met. The dilutive effect of outstanding options is reflected as additional share dilution in the computation of diluted earnings per share (further details are given in Note 21).

Exchange differences

The Group’s consolidated financial statements are presented in euros, which is also the parent company’s functional currency. For each entity, the Group determines the functional currency and items included in the financial statements of each entity are measured using that functional currency.

Transactions and balances

Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the transaction first qualifies for recognition.

Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Differences arising on settlement or translation of monetary items are recognised in profit or loss.

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Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions.

In determining the spot exchange rate to use on initial recognition of the related asset, expense or income (or part of it) on the derecognition of a non-monetary asset or non-monetary liability relating to advance consideration, the date of the transaction is the date on which the Group initially recognises the nonmonetary asset or non-monetary liability arising from the advance consideration. If there are multiple payments or receipts in advance, the Group determines the transaction date for each payment or receipt of advance consideration.

Group companies

On consolidation, the assets and liabilities of foreign operations are translated into euros at the rate of exchange prevailing at the reporting date and their statements of profit or loss are translated at exchange rates prevailing at the dates of the transactions. The exchange differences arising on translation for consolidation are recognised in Other Comprehensive Income (OCI). On disposal of a foreign operation, the component of OCI relating to that particular foreign operation is reclassified to profit or loss.

Borrowing costs

Borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. All other borrowing costs are expensed in the period in which they occur. Borrowing costs consist of interest and other costs that an entity incurs in connection with the borrowing of funds.

Value-added tax (VAT)

Revenues, expenses and assets are recognised net of VAT, except:

• where VAT incurred on a purchase of assets or services is not recoverable from the taxation authority, in which case, VAT is recognised as part of the cost of acquisition of the asset or as part of the expense item, as applicable;

• receivables and payables are stated with the amount of VAT included.

The net amount of VAT recoverable from, or payable to, the taxation authority is included as part of receivables or payables in the statement of financial position.

Current versus non-current classification

The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.

An asset is current when it is:

• expected to be realised or intended to be sold or consumed in the normal operating cycle;

• held primarily for the purpose of trading;

• expected to be realised within twelve months after the reporting period; or

• cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

All other assets are classified as non-current.

A liability is current when:

• it is expected to be settled in the normal operating cycle;

• it is held primarily for the purpose of trading;

• it is due to be settled within twelve months after the reporting period; or

• there is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting period.

The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current assets and liabilities.

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Future accounting changes

The following amendments to standards have been issued and are applicable to the Group for its annual periods beginning on January 1, 2020 and thereafter, with an earlier application permitted (there are other new/amended standards that are not expected to have an impact on the Group):

IAS 1 Presentation of financial statements and to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors Definition of Material

Amendments to IAS 1, Presentation of Financial statements, [“IAS 1”] and to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors [“IAS 8”] are intended to make the definition of material in IAS 1 easier to understand and is not intended to alter the underlying concept of materiality in IFRS Standards. The concept of “obscuring” material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from “could influence” to “could reasonably be expected to influence”. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. There is no anticipated impact of these amendments on its consolidated financial statements.

Covid-19-Related Rent Concessions Amendment to IFRS 16

In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID19, by introducing a practical expedient to IFRS 16. The practical expedient permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:

• a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change; b) Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and

• c) There is no substantive change to other terms and conditions of the lease.

The amendment applies to fiscal years beginning on or after January 1, 2020. There is no anticipated impact of these amendments on its consolidated financial statements.

IAS 1 Presentation of financial statements

In January 2020, the International Accounting Standards Board (“IASB”) amended IAS 1 Presentation of Financial Statements in order to establish a more general approach to the classification of liabilities based on an analysis of the existing contracts at the reporting date. The amendments apply to fiscal years beginning on or after January 1, 2023. The Group is currently assessing the estimated impact of these amendments on its consolidated financial statements.

IAS 16 Property, Plant and Equipment

In May 2020, the IASB amended IAS 16 Property, Plant and Equipment to modify the accounting treatment of the net proceeds from the sale of items produced up until the time the property, plant and equipment is in the condition necessary to be operated in the manner intended by management. These proceeds will be accounted for in accordance with the other applicable standards instead of reducing the cost of the property, plant and equipment. The amendments apply to fiscal years beginning on or after January 1, 2022. The Group is currently assessing the estimated impact of these amendments on its consolidated financial statements.

Interest rate benchmark reform

In August 2020, as part of the interest rate benchmark reform project, the IASB amended the following standards: IFRS 9 Financial Instruments , IAS 39 Financial Instruments: Recognition and Measurement and IFRS 7 Financial Instruments: Disclosures , IFRS 4 Insurance Contracts and IFRS 16 Leases . These amendments concern the impacts of the transition to new benchmark rates. They include simplification measures and additional disclosures. The amendments apply to fiscal years beginning on or after January

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1, 2021. The Group is currently assessing the estimated impact of these amendments on its consolidated financial statements.

4. Significant accounting judgements, 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 at the end of the period. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising that are beyond the control of the Group. Such changes are reflected in the assumptions when they occur.

Percentage of completion on construction-type contracts

Revenues recognized on construction-type contracts reflect management’s best assessment by taking into consideration all information available at the reporting date and the result on each ongoing contract and its estimated costs. The management assesses the profitability of the contract by applying important judgments regarding milestones marked, actual work performed and estimated costs to complete. Actual results could differ because of these unforeseen changes in the ongoing contracts’ models.

Share-based payments

Estimating fair value for share-based payment transactions requires determination of the most appropriate valuation model, which depends on the terms and conditions of the grant. This estimate also requires determination of the most appropriate inputs to the valuation model including the expected life of the share option or appreciation right, volatility and dividend yield and making assumptions about them. For the measurement of the fair value of equity settled transactions with employees at the grant date, the Group uses Black Scholes. The assumptions and models used for estimating fair value for share-based payment transactions are disclosed in Note 17. In addition, some share-based payment transactions vest on the occurrence of a liquidity event, the likelihood of occurrence of such event is reviewed periodically and was assumed not probable as at December 31, 2019.

Leases – Estimating the incremental borrowing rate

The Group cannot readily determine the interest rate implicit in the lease, therefore, it uses its incremental borrowing rate (IBR) to measure lease liabilities. The IBR is the rate of interest that the Group would have to pay to borrow over a similar term, and with a similar security, the funds necessary to obtain an asset of a similar value to the right-of-use asset in a similar economic environment. The IBR therefore reflects what the Group ‘would have to pay’, which requires estimation when no observable rates are available (such as for subsidiaries that do not enter into financing transactions) or when they need to be adjusted to reflect the terms and conditions of the lease. The Group estimates the IBR using observable inputs (such as market interest rates) when available and is required to make certain entity-specific estimates.

Leases – Lease term

In determining the lease term, the Group considers all facts and circumstances that create an economic incentive to exercise an extension option, or not to exercise a termination option. The assessment is reviewed if a significant event or a significant change in circumstances occurs within the Group’s control.

Leases as lessor – Classification and measurement

At the commencement date of a lease arrangements where the Group acts as a lessor, the Group classifies each lease as an operating lease or a finance lease. A lease is classified as a finance lease if it transfers substantially all the risks and rewards incidental to ownership of an underlying asset. Otherwise a lease is classified as an operating lease. Such classification requires management to make assumptions related to the economic life and the fair value of the leased asset. In addition, at the commencement date of finance leases, the measurement of selling profit requires assumptions, such as the determination of the unguaranteed residual value, the fair value of the leased asset and the rate implicit in the lease. Those assumptions are based on management’s best estimate by considering all information available at the reporting date, including profit margins by reference to transactions involving assets of a similar nature, market funding rates, economic life of assets of a similar nature and the expected value of the asset at the end of the lease term.

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Inventories

The Group records a write-down to reflect management’s best estimate of the net realizable value of inventory, which includes assumptions and estimates for future sell-through of units, selling prices as well as disposal costs, where appropriate, based on historical experience. Management continually reviews the carrying value of its inventory, to assess whether the write-down is adequate, based on current economic conditions and an assessment of sales trends.

Discount rate used to determine the carrying amount of Net employee defined benefit liabilities The determination of the Group’s defined benefit obligation and fair value of plan assets depends on certain assumptions, which include selection of the discount rate. The discount rate is set by reference to market yields at the end of the reporting period on high quality corporate bonds. Significant assumptions are required to be made when setting the criteria for bonds to be included in the population from which the yield curve is derived. The most significant criteria considered for the selection of bonds include the issue size of the corporate bonds, quality of the bonds and the identification of outliers which are excluded. These assumptions are a key source of estimation uncertainty as relatively small changes in the assumptions used may have a significant effect on the Group’s financial statements within the next year. Further information on the carrying amounts of the Group’s defined benefit obligation and the sensitivity of those amounts to changes in discount rate are provided in Note 15.

5. Group information

The consolidated financial statements of the Group include:

Name Principal activities Country of incorporation	% equity interest
	December 31, 2019 December 31, 2018 January 1, 2018
Green Vision Holding B.V. Holding company (parent company) Netherlands HyGear Technology & Services B.V. On-site gasses generators Netherlands HyGear Fuel Cell Systems B.V. Development and manufacturing of fuel cell products Netherlands HyGear B.V. On-site gasses generators Netherlands HyGear Operations B.V. On-site gasses generators Netherlands HyGear Hydrogen Plant B.V. Production and distribution of industrial gasses Netherlands HyGear Asia PTE LTD On-site gasses generators Singapore Buse HyGear PTE LTD Production and distribution of industrial gasses United Kingdom	100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 100% 0% 100% 100% 100% 50% 0% 0%

Green Vision Holding B.V. is our holding company in which patents and financial resources are managed. HyGear Technology and services is an intermediary company for administrative services, some product specific R&D and other services towards the operational units

HyGear Operations B.V. is the entity that supplies our installations and maintenance and installation services. HyGear B.V. manages our supply contract (GaaS) and currently still a number of turnkey supply contracts as well as some product specific Engineering and product improvement. HyGear Fuel Cell Systems B.V. focuses on R&D. HyGear Hydrogen Plant B.V. is responsible for the operation of our hydrogen plant in The Netherlands as well as the trailer supply from that plant. HyGear Asia Pte Ltd is our office in Singapore responsible for sales, maintenance and installation and product development, all specific to the Asia-Pacific region. Finally, Buse-HyGear is our joint venture company established in 2019

21

in the UK to operate a Decentralised Production Hub for hydrogen near Birmingham that is currently under construction. The expectation is that this hub is operational by the end of 2020. During 2019 no activities had taken place within this joint venture.

6. Cash and cash equivalents

Cash and cash equivalents Cash in banks and cash on hands Short-term deposits	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 3,549,020 2,744,767 1,769,399 42,657 456,531 238,216
	3,591,677 3,201,298 2,007,615

A credit facility is available at the Rabobank for an amount of € 1,500,000. For this credit facility guarantees are issued in the form of a pledge of all present and future equipment, inventories, receivables on third parties and transport equipment. Rabobank has issued bank guarantees for an amount of € 5,125 against this facility. The remaining facility is not used by the Group per year end. The facility was also not used as at December 31, 2018 and January 1, 2018. A credit facility of € 3,000,000 is available to the Group pursuant to the subordinated loan issued by Oost NL on 25 October 2019. The terms and conditions of the subordinated loan is further detailed in Note 14.

7. Receivables and contract assets

Receivables

eceivables
Trade receivables Taxes and social security contributions Government grants	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 1,625,232 1,928,683 1,838,043 405,608 644,723 231,778 492,047 384,632 552,710
	2,522,887 2,958,038 2,622,531

Trade receivables are non-interest bearing and are generally on terms of 30 to 90 days. As at December 31, 2019 the trade receivables are net of an allowance for expected credit losses of €5,272 (December 31, 2018: €9,168, January 1, 2018: €8,657).

Contract assets

As at December 31, 2019, the Group has contract assets of €2,611,234 (2018: €355,633, January 1, 2018: €77,141) which is net of an allowance for expected credit losses of €6,937 (2018: €945, January 1, 2018: €205). Contract assets relate to revenue earned from ongoing manufacturing of gasses generator. As such, the balance of this account vary and depend on the number of ongoing manufacturing services at the end of the year. As at December 31, 2019, the remaining transaction price allocated to the remaining performance obligations partially unsatisfied is €3,662,347 (December 31, 2018: €1,130,629 and January 1, 2018: €261,158) and is expected to be recognised within one year.

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Set out below is the movement in the allowance for expected credit losses of trade receivables and contract assets:

As at January 1 Provision for expected credit losses As at December 31	December 31, 2019 December 31, 2018
	€ € 10,113 8,862 2,096 1,251
	12,209 10,113

8. Leases

The Group has lease contracts for two properties located in the Netherlands and Singapore. In addition, vehicles and equipment, such as trailers are also leased and used by the Group. The lease terms for the properties range between 2 and 10 years and there are renewal options available for periods varying between 2 and 5 years. For the vehicles and equipment, the lease terms range between 4 and 8 years and some have renewal options available for a fixed number of years, but most are to be negotiated at the end of the current term.

Set out below are the carrying amounts of the right-of-use assets recognised and the movements during the period:

At 1 January 2018 Amortisation expense At December 31, 2018 Additions Amortisation expense At December 31, 2019	Properties Vehicles and equipment Total
	1,983,999 229,858 2,213,857 207,026 56,523 263,549
	1,776,973 173,335 1,950,308
	189,744 513,179 702,923 249,969 101,240 351,209
	1,716,748 585,274 2,302,022

Maturity analysis – contractual undiscounted cash flows:

	December 31,	December 31,	December 31,	January	1, 2018
	2019		2018
	€		€	€
Less than one year	464,549		320,548		320,548
One to five years	1,526,650		1,176,608	1,236,243
More than five years	799,826		934,942	1,195,856
Total undiscounted lease liabilities as	2,791,025		2,432,098	2,752,647
at December 31
he lease liabilities current and non-current	balances are as follows:
Current lease liabilities	323,016		218,054		215,423
Non-current lease liabilities	2,050,995		1,780,380	1,998,434

The lease liabilities current and non-current balances are as follows:

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The following are the amounts recognised in profit or loss related to lessee leases:

Amortisation expense of right-of-use assets Interest expense on lease liabilities (Gain) / Loss on lease modification Expenses relating to short-term leases Expenses relating to leases of low-value assets Total amount recognised in profit or loss	2019 2018
	€ € 351,209 263,549 113,134 105,125 (27,017) - 37,620 37,620 5,258 5,083
	480,204 411,377

Total cash outflow for leases was €414,011 in 2019 (€320,548 in 2018).

The Group has several lease contracts that include extension and termination options. These options are negotiated by management to provide flexibility in managing the leased-asset portfolio and align with the Group’s business needs. Management exercises significant judgement in determining whether these extension and termination options are reasonably certain to be exercised. Generally, extension and termination options have not been included in the lease term for purposes of measuring the lease liabilities and related right-of-use assets.

Group as a lessor

Operating leases

The Group has entered into operating leases on GaaS contracts consisting of gas generating systems. These leases have terms of between five and 10 years.

Future minimum rentals receivable under non-cancellable operating leases are as follows:

Within one year Between 1-2 years Between 2-3 years Between 3-4 years Between 4-5 years More than 5 years	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 204,036 92,820 92,820 165,361 92,820 92,820 111,216 54,145 92,820 111,216 - 54,145 92,680 - - - - -
	684,509 239,785 332,605

The following are the amounts recognised in profit or loss related to operating lessor leases:

Income from operating leases	2019 2018
	€ € 123,380 120,646

Finance leases

The Group has entered into finance leases on GaaS contracts consisting of gas generating systems. These leases have terms of 15 years, which represents substantially all of portion the economic life of the systems.

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Future minimum rentals receivable under non-cancellable finance leases are as follows:

Within one year Between 1-2 years Between 2-3 years Between 3-4 years Between 4-5 years More than 5 years Unguaranteed residual value (discounted) Unearned finance income Finance lease receivables	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 276,513 102,825 85,844 276,513 102,825 102,825 276,513 102,825 102,825 276,513 102,825 102,825 276,513 102,825 102,825 2,525,419 908,288 1,011,113
	3,907,984 1,422,413 1,508,257 700,045 457,281 457,281
	4,608,029 1,879,694 1,965,538 (823,670) (139,693) (168,159)
	3,784,359 1,740,001 1,797,379

This is the composition of the finance lease receivable balance including the expected credit loss:	This is the composition of the finance lease receivable balance including the expected credit loss:	This is the composition of the finance lease receivable balance including the expected credit loss:
Current finance lease receivable	155,645	75,463	57,378
Non-current finance lease receivable	3,601,206	1,646,857	1,722,320

Set out below is the movement in the allowance for expected credit losses of finance lease receivable:

As at January 1 Provision for expected credit losses Write-off As at December 31	December 31, 2019 December 31, 2018
	€ € 17,681 17,681 9,827 - - -
	27,508 **17,681 **

The following are the amounts recognised in profit or loss related to finance lessor leases:

Income from variable payments on finance leases not based on an index or a rate Interest income on finance lease receivables Total amount recognised in profit or loss	2019 2018
	€ € 1,512 - 35,418 28,466
	36,930 28,466

9. Inventories

Raw materials Assemble parts	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 257,084 149,243 298,409 541,658 - -
	798,742 149,243 298,409

During 2019, €143,843 (2018: €298,409) of inventories was recognised as an expense in direct material costs in the statement of profit or loss and €nil (2018: €nil) was recognised as an expense for inventories carried at net realisable value, in direct material costs in profit or loss.

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10. Income Taxes

At the reporting date, the Group has unused tax losses of €1,749,163 (December 31, 2018: €1,904,766 and January 1, 2018: € 1,457,562) available for offset against future profits. No deferred tax asset has been recognized on the unused tax losses in 2019 and 2018 as it is not considered probable that there will be future taxable profits available.

No deferred tax liability is recognised on temporary differences of €391,632 (December 31, 2018: €175,036 and January 1, 2018: € 61,570) relating to the unremitted earnings of overseas subsidiaries as the Group is able to control the timings of the reversal of these temporary differences and it is probable that they will not reverse in the foreseeable future. Temporary differences arising in connection with interests in joint ventures are insignificant.

Uncertain tax treatments

The Group is currently in discussion with Dutch tax authorities, which could impact on the unrecognized loss carryforwards. The outcome of these discussions cannot be determined at this stage.

Classification of current and deferred tax result

	2019 2018
Current tax expense for The year Adjustments for previous years	€ € - - - 43,581
Total current tax expense	- 43,581
Deferred tax expense for
Origination and reversal of temporary differences and tax losses (De)recognition of deferred tax assets Changes in tax rates	444,163 (65,856) (268,216) 58,024 (49,081) 7,116
Total deferred tax expense	126,866 (716)
Total	126,866 42,865

The standard rate of corporation tax applied to reported profit is 25% (2018: 25%). Effective tax rate

Effective tax rate
	2019 2018
	% € %	€
Profit before tax	1 618,630	430,188
Corporate tax rate of Group's domestic tax rate	25.0% 404,658 25.0%	107,548
Effect oftax ratesinothercountries	0.0% - 0.0%	-
Weighted average statutory income tax rate	25.0% 404,658 25.0%	**107,548 **
Non-taxable foreign profits	0.5% 7,343 (8.8%)	(37,914)
Benefit from tax incentives	0.0% - (34.0%)	(146,409)
Non-deductible expenses	0.2% 3,296 0.7%	2,859
(De)recognition of deferred tax assets	(16.6%) (268,216) 13.5%	58,024
Tax rate change	(3.0%) (49,081) 1.7%	7,116
Under / over provided prior years	0.0% - 10.2%	43,581
Other	1.8% 28,866 1.9%	8,061
Effective tax rate	7.8% 126,866 10.0%	**42,865 **

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The effective tax rate differs from the applicable tax rate, mainly as a result of the application of the Innovation box and the Energy Investment Allowance (EIA) for the calculation of domestic income tax. Foreign taxable profits relate to the Singapore based subsidiary that is exempt from income taxes during a three-year period after establishment of the company, provided that certain thresholds are not exceeded, which they have not been.

Unrecognized deferred tax assets

		December 31, 2019 December 31, 2018 January 1, 2018
		€ € €
Tax losses and tax credits		1,749,164 1,904,766 1,457,562
Deductible temporary differences		(72,293) 995,491 707,668
Total		1,676,871 2,900,257 2,165,230
Expiration year of loss carry forwards (January 1, 2018)
	2018 2019 2020 2021 2022 Later Unlimited Total
Total loss carryforwards Loss carryforwards not recognized in deferred tax assets	€ € € € € € € €
	- - - - - 1,457,562 - 1,457,562
	- - - - - (1,457,562) - --- (1,457,562)
Total	- - - - - 0 - 0

Expiration year of loss carryforwards (December 31, 2018)

	2019 2020 2021 2022 2023 Later Unlimited Total € € € € € € € € - - - - 282,917 1,621,849 - 1,904,766 - - - - (282,917) (1,621,849) - (1,904,766) - - - - - - - -
Total loss carryforwards
Loss carryforwards not recognized in deferred tax assets
Total

Expiration year of loss carryforwards (December 31, 2019)

	2020 2021 2022 2023 2024 Later Unlimited Total € € € € € € € € - - - 282,917 703,193 763,053 - 1,749,163 - - - (282,917) (703,193) (763,053) - (1,749,163) - - - - - - - -
Total loss carryforwards
Loss carryforwards not recognized in deferred tax assets
Total

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Deferred tax assets and liabilities per balance sheet item

	December 31,	2019	December 31,			2018		January 1, 2018
	Net		Net					Net
balance Assets		Liabilities	balance	Assets		Liabilities		balance		Assets	Liabilities
	€ €	€	€		€		€	€		€	€
Intangible assets Property, plant and equipment	(39,390) - 605,062 642,751	(39,390) (37,689)	(14,152) 253,223	- 268,812			(14,152) (15,589)	- 268,061		- 268,061	- -
Right of use assets Operating lease liability	(512,696) - 524,678 524,678	(512,696) -	(416,915) 423,832	- 423,832		(416,915) -		(487,279) 483,153		- 483,153	(487,279) -
Finance lease
receivables	(830,299) -	(830,299)	(364,771)		-	(364,771)		(383,121)		-	(383,121)
Other items and
tax credits	13,945 15,036	(1,091)	6,949		6,949		-	6,636		6,636	-
Tax loss
carryforwards	- -	-	-		-		-		-	-	-
Deferred tax
assets not
recognized	- -	-	-		-		-		-	-	-
Tax
assets/liabilities	(238,700) 1,182,465	(1,421,165)	(111,834)	699,593		(811,427)		(112,550)		757,850	(870,400)
Movement in deferred tax balances during the year / Deferred tax assets and liabilities
								2019			2018
								€			€
Deferred tax assets							699,593				757,850
Deferred tax liabilities							(811,427)				(870,400)
Balance at January 1							(111,834)				(112,550)
Movement in deferred tax:
Recognized in income							(126,866)				716
Recognized in Equity/Other comprehensive income											-
Other								-			-
Balance at December 31							(238,700)				(111,834)
Deferred tax assets							1,182,465				699,593
Deferred tax liabilities							(1,421,165)				(811,427)

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Movement in deferred tax	balances during the year
	Balance January 1,		Balance December
	2018	Recognized in income	31, 2018
Intangible assets	-	(14,152)	(14,152)
Property, plant and
equipment	268,061	(14,838)	253,223
Right of use assets	(487,279)	70,364	(416,915)
Operating lease liability	483,153	(59,321)	423,832
Finance lease receivables	(383,121)	18,350	(364,771)
Other items and tax credits	6,636	313	6,949
Net deferred tax asset /
(liability)	(112,550)	716	(111,834)

Movement in deferred tax balances during the year

	Balance January 1, 2019 Recognized in income Balance December 31, 2019
Intangible assets	(14,152) (25,238) (39,390)
Property, plant and equipment	253,223 351,839 605,062
Right of use assets	(416,915) (95,781) (512,696)
Operating lease liability	423,832 100,846 524,678
Finance lease receivables	(364,771) (465,528) (830,299)
Other items and tax credits	6,949 6,996 13,945
Net deferred tax asset / (liability)	(111,834) (126,866) (238,700)

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11. Property, plant and equipment

Cost At January 1, 2018 Additions Transfers At December 31, 2018 Additions Transfers Disposals Exchange differences At December 31, 2019 Amortisation & impairment At January 1, 2018 Additions At December 31, 2018 Additions At December 31, 2019 Net book value January 1, 2018 December 31, 2018 December 31, 2019	Machinery & Equipment Lease equipment	Production equipment	Furniture & fixtures	Transport equipment	Assets under construction Total
	1,123,024 1,654,355 - - - -	1,654,700 - 619,025	346,822 145,543 468,803	113,681 57,661 -	3,147,028 8,039,610 4,029,051 4,232,255 (1,087,828) -
	1,123,024 1,654,355 - - - 1,484,176 - - - -	2,273,725 - 2,441,712 - -	961,168 100,431 - - 618	171,342 489,880 - - 1,588	6,088,251 12,271,865 4,520,790 5,111,101 (4,319,127) (393,239) (1,454,120) (1,454,120) - 2,206
	1,123,024 3,138,531	4,715,437	1,062,217	662,810	4,835,794 15,537,813
	778,891 125,696 139,983 109,820	18,367 147,994	263,673 70,826	45,799 24,431	- 1,232,426 - 493,054
	918,874 235,516 121,301 56,301	166,361 209,112	334,499 94,083	70,230 62,683	- 1,725,480 - 543,480
	1,040,175 291,817	375,473	428,582	132,913	- 2,268,960
	344,133 1,528,659	1,636,333	83,149	67,882	3,147,028 6,807,184
	204,150 1,418,839	2,107,364	626,669	101,112	6,088,251 10,546,385
	82,849 2,846,714	4,339,964	633,635	529,897	4,835,794 13,268,853

Assets under construction

Included in assets under construction at December 31, 2019 was an amount of €4,520,790 (2018: € 4,029,051) relating to expenditure for production equipment in the course of construction.

Capitalised borrowing costs - Lease Equipment

The Group constructs hydrogen solutions for clients as part of its "Gas-as-a-service" offering. Depending on the complexity of the asset, the time required to complete the construction ranges between 12 - 32 months. The carrying amount of lease equipment under construction as at December 31, 2019 was € 4,429,947 (2018: €3,317,942, January 1, 2018: € Nil). The construction of the hydrogen solutions is financed from a pool of general third-party borrowings. The amount of borrowing costs capitalised during the year ended December 31, 2019 was €168,402 (2018: €75,600). The borrowing costs eligible for capitalisation were determined by applying a capitalization rate of 6.85% during the year ended December 31, 2019 (2018: 6.16%) to the expenditures on these assets.

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12. Intangible assets

At January 1, 2018 Additions At December 31, 2018 Additions At December 31, 2019 Amortisation & impairment At January 1, 2018 Additions At December 31, 2018 Additions At December 31, 2019 Net book value January 1, 2018 December 31, 2018 December 31, 2019	Development costs Software Total € € €
	- 51,537 51,537 562,831 37,534 600,365
	562,831 89,071 651,902 1,087,918 27,242 1,115,160
	1,650,749 116,313 1,767,062
	- 42,210 42,210 - 5,979 5,979
	- 48,189 48,189 - 14,251 14,251
	- 62,440 62,440
	- 9,327 9,327 562,831 40,882 603,713 1,650,749 53,873 1,704,622

Research and development costs

The Group’s research and development concentrates on the development of gasses generator. Research and development costs that are not eligible for capitalisation have been expensed in the period incurred (in 2019, this was € 311,652 (2018: € 403,980)), and they are recognized in other operating expenses.

Capitalised borrowing costs - Development Costs

The Group engages in research and development activities to improve and develop designs and processes for hydrogen solutions. The time required for a developed process and/or design to be completed and available for its intended use as intended by management, ranges between 24 - 36 months. The Group commenced with the aforementioned research and development activities in 2018 and as at December 31, 2019, no developed processes and/or designs were finalised. The first developed process and/or design is expected to be completed and available for its intended use as intended by management during 2021. The carrying amount of capitalised development costs as at December 31, 2019 was €1,650,749 (2018: €562,831, January 1, 2018: € Nil). The research and development expenditures are financed from a combination of specifically borrowed funds as well a pool of general third party borrowings. The amount of borrowing costs capitalised during the year ended December 31, 2019 was €112,490 (2018: €69,032). The borrowing costs eligible for capitalisation for expenditures financed from the pool of general borrowings, were determined by applying a capitalisation rate of 6.85% during the year ended December 31, 2019 (2018: 6.16%) to the expenditures on these assets. The effective interest rate of borrowing costs capitalised from specifically borrowed funds, were 7% during the year ended December 31, 2019 (2018: 7%).

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13. Trade and other payables

Payable to shareholders Trade payables Payroll tax Accruals	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 17,560 17,560 517,558 1,131,437 897,202 416,257 55,661 96,826 37,036 339,111 342,176 291,313
	1,543,769 1,353,764 **1,262,164 **

Terms and conditions of the above financial liabilities:

• Trade payables are non-interest bearing and are normally settled on 60-day terms

• Payroll tax is normally settled on 30-day terms

• For terms and conditions with shareholders refer to Note 23.

• For explanation on the Group’s liquidity risk management processes, refer to Note 22.

14. Long-term debt

Bridge loan DRL Resource Bridge loan Oost NL Dividend loan DRL Resource Dividend loan Oost NL Dividend loan DRL Resource Dividend loan Oost NL Loan FHBG HHP Loan DLL H2 Car Loan DBS Car Loan H2 Trailers Loan Heftruck Loan A Rabobank Loan B Rabobank Loan C Rabobank Innovation loan HYREC Loan Oost NL NPEX Bonds 2017-2023 NPEX Bonds 2018-2024 NPEX Bonds 2019-2025 Long-term debt Current portion Long-term debt	December 31, 2019 December 31, 2018 January 1, 2018
	€ € € 285,765 285,765 285,765 250,000 250,000 250,000 182,837 182,837 182,837 159,940 159,940 159,940 214,340 214,340 - 187,332 187,332 - 764,888 287,174 - 12,009 20,501 28,575 34,657 38,578 - 426,908 - - 38,194 - - 151,095 206,043 238,096 472,431 568,135 626,771 95,238 95,238 95,238 1,461,380 1,175,957 713,403 1,916,995 - 2,450,614 2,439,993 2,425,831 4,889,674 4,865,379 - 4,675,059 - -
	18,669,356 10,977,212 5,006,456
	(322,118) (179,162) (104,941)
	18,347,238 10,798,050 4,901,515

Non-current liabilities falling due after 5 years amount to € 7,246,386 The remaining part of € 10,778,734 must be repaid between 1 and 5 years.

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Subordinated loans shareholders

On May 19, 2017 subordinated bridge loans were issued by DRL Resource Management B.V. and Oost NL for an amount of € 285,765 and € 250,000. These loans bear 7% interest on an annual basis. Interest is paid quarterly. The loans are repayable per June 2023. The loans are subordinated to the NPEX bonds 2017-2023.

On June 19, 2017 subordinated dividend loans were issued by DRL Resource Management B.V. and Oost NL for an amount of € 159,940 and € 182,837. These loans bear 7% interest on an annual basis. Interest is paid quarterly. The loans are repayable six months after redemption of the 2017-2023 NPEX bonds. The loan is subordinated to the NPEX bonds 2017-2023.

On July 1, 2018 subordinated dividend loans were issued by DRL Resource Management B.V. and Oost NL for an amount of € 214,340 and 187,332. The DRL loan bears 7.5% interest on an annual basis and the Oost NL loan bears 7.8% interest on an annual basis. Interest is paid quarterly. The loans are repayable per July 2024. The loan is subordinated on the NPEX bonds 2018-2024.

Loan FHBG HPP

On August 2, 2018 a subordinated loan was issued by Fonds Herstructurering Bedrijventerreinen Gelderland (FHBG), part of Oost NL, for a total amount of € 800,000. This loan is specifically provided to HyGear Hydrogen Plant B.V. The loan was issued in three tranches. The first tranche, amounting to € 300,000, was received in 2018. The second and third tranche, totaling € 500,000, were received in 2019. Under the terms of the loan

• The loan is subordinated to all current and future trade payables to creditors of Hygear Hydrogen Plant BV. Hygear Technology and Services BV and Green Vision Holding BV are jointly and severally liable for all loan obligations of Hygear Hydrogen Plant B.V.

• Payables to SDI Technology Ventures BV and Oost NL NV are subordinated to this loan.

• Hygear Hydrogen Plant BV can’t make capital disbursements and shares in the Group can’t be transferred by its shareholders without approval of the lender during the term of the loan.

This loan bears 6.32% interest on an annual basis, fixed for a period of five years. Interest is paid quarterly. The loan is repayable in 32 quarterly instalments, with the first instalment due in December 2019 and the last instalment due in September 2027.

Loan DLL H2 Car

The loan issued by DLL on May 2, 2017 for an amount of €33,878 for a H2 car is repayable over 5 years via monthly instalments.

Loan DBS Car

The loan issued by DBS on September 21, 2018 for an amount of SGD 62,930 for a car is repayable over 7 years via monthly instalments.

Loan Rabobank H2 Trailers

The loan issued by Rabobank on May 2, 2019 for an amount of €450,750 for two H2 trailers is repayable over 10 years via monthly instalments. In the agreements the trailers are included as collateral for the lease issued by Rabobank.

Loan Toyota forklift truck

The loan issued by Toyota on November 1, 2019 for an amount of €39,130 for a forklift truck is repayable over 7 years via monthly instalments.

Loan A Rabobank

Loan A was issued by the Rabobank on November 16, 2017 for an amount of €238,096. The loan carries a fixed 4.5% interest rate and is redeemable via monthly instalments of €4,579, starting in May 2018 and ending in February 2023. Early redemption is possible. This loan is secured by the Group as per general terms and conditions of Rabobank Nederland.

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Loan B Rabobank

Loan B was issued by the Rabobank on November 16, 2017 for a nominal amount of €666,666. The loan carries a fixed 2.4% interest rate and is redeemable via monthly instalments of €9,259, starting in May 2018 and ending in November 2024. Early redemption is possible. This loan is secured by the Group as per general terms and conditions of Rabobank Nederland.

Loan C Rabobank

Loan C was issued by the Rabobank on November 16, 2017 for an amount of €95,238. The loan carries a fixed 4.65% interest rate and is redeemable via a 100% instalment of €95,238, in November 2024. Early redemption is possible. This loan is secured by the Group as per general terms and conditions of Rabobank Nederland.

Subordinated loan Oost NL

On October 25, 2019 a subordinated loan was issued by shareholder Oost NL for a maximum amount of € 5,000,000. A first instalment of €2,000,000 was received on the issue date. The loan bears 8% interest on an annual basis. Interest is paid quarterly. The Group pays a 2% fee over the non-utilised loan amount. The loan is repayable per October 2025. Early redemption is possible after three years. All Green Vision Holding B.V. group companies (see group structure in Note 5) are jointly and severally liable for interest payments and redemptions. As part of the loan agreement the Group agreed to grant Oost NL up to 199,960 detachable warrants with an exercise price of €19.50 per share certificate and an expiration date 2 years from the date of issuance. Each tranche of €25,005 of loan has 1 detachable warrant that gives the holder the right to acquire 1 ordinary share from Green Vision holding B.V. per warrant at an exercise price of €19.50 per share certificate. In total, the Group issued 79,984 warrants to the holder. The proceed of the emission have been allocated between both instruments (loan and warrants). These warrants are classified as equity instruments in other reserve ordinary of the statement of change in equity. The initial fair value of the warrants was €1.06 per unit. The fair value of the warrants is estimated at the grant date using a Black Scholes model, considering the terms and conditions on which the warrants were granted and a liquidity discount. The principal inputs to the model are the expected volatility, the risk-free interest rate and the liquidity discount. Nil have been exercised as at December 31, 2019.

The loan is subordinated to all loans with the exception of loans which are issued by indirect or direct shareholders of the Group.

Innovation loan HYREC (Innovatiekrediet)

This loan was issued by RVO on December 16, 2016 for a maximum amount of €1,777,410. The loan can only be used to fund the development of a HY.REC. The loan can be broken down as follows:

	€
Advance payments plus accrued interest per December 31, 2018	1,175,957
Advance payment received February 25, 2019	96,602
Advance payment received April 15, 2019	48,301
Advance payment received July 17, 2019	48,301
Accrued interest over 2019	92,219
Advance payments plus accrued interest per December 31, 2019	1,461,380

The repayment of the loan is due in the period 2020 – 2023. RVO issued the loan against security of all assets produced under this development project. This loan bears 7% interest on an annual basis.

NPEX Bonds 2017-2023

On March 1, 2017 HyGear Technology & Services BV concluded a nominal €2,499,000 public bond placement via NPEX. The bonds are included at amortised cost, being the amount received taking account of any premium or discount, less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised as interest in the income statement over the period of the bonds using the effective interest method.

The bonds, having a nominal value of €1.000 each, carry a 7% annualised interest rate and a six year duration. Interest is paid monthly and the bonds are redeemable on February 28, 2023. Early redemption is

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possible after three years. All Green Vision Holding B.V. group companies (refer to Note 5) are jointly and severally liable for interest payments and redemptions.

Under the terms of the bond placement the shareholders of Green Vision Holding BV have signed a nonwithdrawal statement. This stipulates that shareholders will refrain from dividend payments, capital repayments or any other cash pay-outs for the whole bond duration that would result in Green Vision Holding BV’s solvency ratio declining below 35%.

NPEX Bonds 2018-2024

On July1, 2018 HyGear Technology & Services BV concluded a nominal €4,999,000 public bond placement via NPEX. The bonds are included at amortised cost, being the amount received taking account of any premium or discount, less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised as interest in the income statement over the period of the bonds using the effective interest method.

The bonds, having a nominal value of €1.000 each, carry a 7.5% annualised interest rate and a six-year duration. Interest is paid monthly, and the bonds are redeemable on June 16, 2024. Early redemption is possible after three years. All Green Vision Holding B.V. group companies (refer to Note 5) are jointly and severally liable for interest payments and redemptions.

Under the terms of the bond placement the shareholders of Green Vision Holding BV have signed a nonwithdrawal statement. This stipulates that shareholders will refrain from dividend payments, capital repayments or any other cash pay-outs for the whole bond duration that would result in Green Vision Holding BV’s solvency ratio declining below 35%. The bonds are subordinated to the loans from the Coöperatieve Rabobank U.A., a loan from the Ministry of Economic Affairs and future bank loans.

NPEX Bonds cum Warrants 2019-2025

On June 24, 2019 HyGear Technology & Services BV concluded a nominal €4,999,000 public bond placement via NPEX. The bonds are included at amortised cost, being the amount received taking account of any premium or discount, less transaction costs. Any difference between the proceeds (net of transaction costs) and the redemption value is recognised as interest in the income statement over the period of the bonds using the effective interest method.

The bonds, having a nominal value of €1,000 each, carry a 8% annualised interest rate and a six year duration. Interest is paid monthly and the bonds are redeemable on June 24, 2025. Early redemption is possible after three years. All Green Vision Holding B.V. group companies (refer to Note 5) are jointly and severally liable for interest payments and redemptions. The bonds are subordinated to the loans from the Coöperatieve Rabobank U.A., a loan from the Ministry of Economic Affairs, a loan from De Lage Landen Financial Services B.V., a loan from the DBS bank and future loans.

Each bond has 40 detachable warrants that give the bondholder the right until December 1, 2021 to acquire 1 share certificate of Stak Hygear per warrant at an exercise price of €19.50 per share certificate. In total, the Group issued 199,960 warrants to the bond investors. The proceed of the emission have been allocated between both instruments (loan and warrants). These warrants are classified as equity instruments in other reserve ordinary of the statement of change in equity. The initial fair value of the warrants was €0.91 per unit. The fair value of the warrants is estimated at the grant date using a Black Scholes model, taking into account the terms and conditions on which the warrants were granted and a liquidity discount. The principal inputs to the model are the expected volatility, the risk-free interest rate and the liquidity discount. Nil have been exercised as at December 31, 2019. Nil have been exercised as at December 31, 2019.

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15. Post-employment benefit costs

Defined contribution retirement benefit

Payments to defined contribution retirement benefit plans for the year is €386,580 (2018: €250,544).

Defined benefit retirement benefit plans

The Group sponsored as of January 1, 2017 a defined benefit plan for qualifying employees of its subsidiaries in the Netherlands. The defined benefit plan has during 2019 retroactively been replaced by a defined contribution plan as of January 1, 2019. The defined benefit plan is administered by and insured at Delta Lloyd Levensverzekering N.V. (‘Delta Lloyd’) that is legally separated from the entity. The defined benefit plan is an average pay pension plan with an accrual rate of 1% of the pensionable base per annum for old-age pension. The pensionable base equals the pensionable salary with a maximum of €105,075 minus the social security offset of €13,344. The standard retirement age is 68 years.

The defined benefit plan requires contributions from employees. Contributions are based on a fixed percentage of the total premiums paid. The plan typically exposes the entity to actuarial risks such as: interest rate risk, longevity risk and salary risk. The risk relating to benefits to be paid to the dependents of plan members is reinsured by the external insurance company.

Interest risk	A decrease in the high-quality corporate bond interest rate will increase the plan liability but this will be partially offset by an increase on the plan assets.
Longevity risk	The present value of the defined benefit plan liability is calculated by reference to the best estimate of the expected future mortality rates of plan participants both during and after their employment. An increase in the life expectancy of the plan participants will increase the plan’s liability.
Salary risk	The present value of the defined benefit plan liability is calculated by reference to the future salaries of plan participants. As such, an increase in the salary of the plan participants will increase the plan’s liability.

No other post-retirement benefits are provided to these employees.

The most recent actuarial valuations of the plan assets and the present value of the defined benefit liability were carried out at December 31, 2019. The present value of the defined benefit liability, and the related current service cost and past service cost, were measured using the projected unit credit method. The replacement of the pension plan retroactively during 2019 is treated as a plan amendment as at March 31, 2019 and accounted for as a past service credit of €895,139.

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The principal assumptions used for the purposes of the actuarial valuations were as follows:

		December 31,	December 31,	January 1,
		2019	2018	2018
Financial assumptions
Discount rate		0.90%	1.90%	2.00%
Discount rate as at 31-3-2019		1.40%	-	-
Wage inflation		2.00%	2.00%	2.00%
Price inflation		2.00%	2.00%	2.00%
Individual salary increase rate	18-34 yrs	3.00%	3.00%	3.00%
	35-39 yrs	2.00%	2.00%	2.00%
	40-49 yrs	2.00%	2.00%	2.00%
	50-64 yrs	1.00%	1.00%	1.00%
	65-66 yrs	0.00%	0.00%	0.00%
Demographic assumptions
		Male/female	Male/female	Male/female
Individual turnover rates	18-29 yrs	10.00%	10.00%	10.00%
	30-39 yrs	8.00%	8.00%	8.00%
	40-49 yrs	6.00%	6.00%	6.00%
	50-54 yrs	4.00%	4.00%	4.00%
	55-59 yrs	2.00%	2.00%	2.00%
	60-66 yrs	0.00%	0.00%	0.00%
		Male/female	Male/female	Male/female
Disability rates	18-24 yrs	0.06%	0.06%	0.06%
(recovery chances are not	25-29 yrs	0.12%	0.12%	0.12%
taken into account)	30-34 yrs	0.17%	0.17%	0.17%
	35-39 yrs	0.22%	0.22%	0.22%
	40-44 yrs	0.28%	0.28%	0.28%
	45-49 yrs	0.35%	0.35%	0.35%
	50-54 yrs	0.45%	0.45%	0.45%
	55-59 yrs	0.57%	0.57%	0.57%
	60-64 yrs	0.72%	0.72%	0.72%
	65-66 yrs	0.72%	0.72%	0.72%
Other (actuarial) assumptions	Mortality table	AG 2018	AG 2018	AG 2016
	Age corrections
		-1 before / -1	-1 before / -1	-1 before / -1
	- men
		after	after	after
		-1 before / -1	-1 before / -1	-1 before / -1
	- women
		after	after	after
	Age difference	+ 3	+ 3	+ 3
	M/F
Expected retirement age		Following state pension	Following state pension	Following state pension

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Amounts recognised in profit or loss in respect of the defined benefit plan are as follows:

Defined benefit cost for current fiscal year Net Service cost Current service cost Past service cost Contributions by plan participants Net interest on the net defined benefit liability / (asset) Interest income Interest expense Administration costs Defined benefit cost recorded in profit or loss for current fiscal year Remeasurements of the net defined benefit liability / (asset) Return on plan assets (excluding interest income) Actuarial (gains) / losses Defined benefit cost recorded in OCI for current fiscal year Total defined benefit cost for current fiscal year	2019 2018 € € - 194,408 (895,139) - - (121,269)
	(895,139) 73,139
	(6,801) (3,674) 9,934 23,682
	3,133 20,008
	- 15,691
	(892,006) 108,838
	(151,855) 77,583 282,225 (30,758)
	130,370 46,825
	(761,636) 155,663

The expense (gain) for the year, (€892,006) (2018: €108,838) is included in profit or loss. The remeasurement of the net defined benefit liability for the year, €130,370 (2018: €46,825) is included in other comprehensive income. The amount included in the consolidated statement of financial position arising from the Group’s obligations in respect of its defined benefit retirement benefit plan is as follows:

Changes in the balance sheet Net defined benefit liability / (asset) as at beginning of year Defined benefit cost for current fiscal year Defined benefit cost recorded in profit or loss Defined benefit cost recorded in OCI Contributions by the employer in current fiscal year Net defined benefit liability / (asset) as at end of year	2019 2018 € € 761,636 790,316 (761,636) 155,663 (892,006) 108,838 130,370 46,825 - (184,343)
	- 761,636

Movements in the present value of defined benefit obligations in the year were as follows:

Change in present value of the defined benefit obligation Present value of the defined benefit obligation as at beginning of year Service cost Current service cost Past service cost Interest expense Remeasurement (gains) / losses Present value of the defined benefit obligation as at end of year	2019 2018 € € 1,177,032 989,700 - 194,408 (895,139) - 9,934 23,682 282,225 (30,758)
	574,052 1,177,032

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Movements in the fair value of plan assets in the year were as follows:

Movements in the fair value of plan assets in the year were as follows:
Change in fair value of plan assets Fair value of plan assets as at beginning of year Interest income Remeasurement gains / (losses) Contributions by the employer Contributions by plan participants Benefits paid Administration costs Fair value of plan assets as at end of year	2019 2018 € € 415,396 199,384 6,801 3,674 151,855 (77,583) - 184,344 - 121,269 - - - (15,692)
	574,052 415,396

The pension plan assets are administrated by the insurer Delta Lloyd. No separate investment account is held for the Group at the insurer. Therefore, the plan assets are determined based on the present value of the accrued pension rights using actuarial rates. As a consequence, the category of the plan assets is qualified insurance policies.

Significant actuarial assumptions for the determination of the defined benefit obligation are discount rate, expected salary increases and mortality rates. The sensitivity analysis below is determined based on reasonably possible changes of the respective assumptions occurring at the end of the reporting period, while holding all other assumptions constant.

If the discount rate is 50 basis points higher, the defined benefit obligation would decrease to €490,999 (2018: €1,007,703).

If the discount rate is 50 basis points lower, the defined benefit obligation would increase to €674,571 (2018: €1,380,898).

If the expected salary growth increases by 0.5 per cent, the defined benefit obligation would increase to €574,052 (2018: €1,232,512).

If the expected salary growth decreases by 0.5 per cent, the defined benefit obligation would decrease to €574,052 (2018: €1,124,860).

If the life expectancy increases by one year for both men and women, the defined benefit obligation would increase to €600,761 (2018: €1,228,086).

If the life expectancy decreases by one year for both men and women, the defined benefit obligation would decrease to €547,363 (2018: €1,125,588).

The sensitivity analysis presented above may not be representative of the actual change in the defined benefit obligation as it is unlikely that the changes in assumptions would occur in isolation of one another as some of the assumptions may be correlated.

In presenting the above sensitivity analysis, the present value of the defined benefit obligation has been calculated using the projected unit credit method at the end of the reporting period, which is the same as that applied in calculating the defined benefit obligation liability recognised in the statement of financial position.

The Group’s subsidiaries funded the cost of the entitlements accrued on a yearly basis. Employees paid a fixed percentage of the total premium. Apart from paying the costs of the entitlements the Group is not liable to pay additional contributions in case the plan does not hold sufficient assets. The Group is liable to make additional payments in case of an individual legal value transfer by former employees. The average duration of the benefit obligation at the end of the reporting period is 31.7 years (December 31, 2018: 31.44 years and January 1, 2018: 32.18 years).

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16. Share capital

Ordinary share

The authorised ordinary share capital of Green Vision Holding B.V. amounts to € 21,843, divided into 4,368,600 ordinary shares of € 0.005 each. All ordinary shares are issued and as at December 31, 2019 66,881 (December 31, 2018: 70,059 and January 1, 2018: 74,850) share certificates where held by the Group. For the year ended December 31, 2019, no dividends where distributed. For the year ended December 31, 2018 a dividend of € 454,674 was distributed of which € 413,597 was paid in cash and €41,077 was paid in share certificates.

Cumulative preferred share

The authorized cumulative preferred share capital of Green Vision Holding B.V. amounts to € 10, divided into 10 cumulative preferred shares of € 1 each that were issued on June 21, 2017 to Oost NL raising total proceeds of € 360,810 for the Group. The cumulative preference shares carry a cumulative dividend of 5% per annum. For the year ended December 31, 2019 and 2018, no dividends where distributed. The cumulative preference shares dividend ad at December 31, 2019 is € 36,080 (December 31, 2018: € 18,040 and January 1, 2018: € nil).

17. Shares-based payments

Share-based employment benefit plan

The Group has an equity settled share-based employment benefit plan that is intended to provide an additional incentive to full-time directors, managers and selected persons employed by and/or working for the Group to remain in the Group or to pursue their contribution and increase their efforts with a view to the Group’s success. Each share-based option either gives a right to purchase or a right to convert into a depositary receipts for ordinary shares in the Group own capital. The Group has (or will) acquire depositary receipts for ordinary shares in its own capital that are (or will be) issued by Stichting Administratiekantoor Green Vision Holding (referred to as “STAK HyGear”) and are registered with Stichting NPEX Bewaarbedrijf (referred to as “NPEX”). Under no circumstances the Group is required to settle the option in cash.

The number of options granted is calculated in accordance with the performance-based formula and is subject to approval by the remuneration committee. Options are granted at different exercise prices, may be exercised at any time from the date of vesting and require continuous employment until date of vesting from the date of grant in order to vest.

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The table below presents the other vesting conditions for each options series.

Options series 1	Options will vest at the first of the two following events: A. Sale of 80% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.; or B. 6 (six) months after publicly listing (IPO) of more than 50% of the outstanding shares of the Group on a platform other than NPEX (unless the lock-up period for existing shareholders is longer than 6 (six) months, in that case the options will vest at the ending of the existing shareholders lock-up period).
Options series 2	Options will vest at the first of the two following events: A. Sale of 100% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.; or B. 6 (six) months after publicly listing (IPO) more than 50% of the outstanding shares of the company on a platform other than NPEX.
Options series 3, 4, 9 and10	Options will vest over 3 (three) years, 25% immediately on grant date and 25% at the end of the following 3 (three) years.
Options series 5 and 6	Options will vest over 4 (four) years, 25% after one year of grant date and 25% at the end of the following 3 (three) years.
Options series 7	Options will vest at the first of the two following events: A. Sale of 100% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.; or B. 6 (six) months after publicly listing (IPO) more than 50% of the outstanding shares of the company on a platform other than NPEX (unless the lock-up period for existing shareholders is longer than 6 (six) months, in that case the options will vest at the ending of the existing shareholders lock-up period).
Options series 8	Options will vest at the first of the two following events: A. Sale of 80% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.;or B. 6 (six) months after publicly listing (IPO) of more than 50% of the outstanding shares of the Group on a platform other than NPEX (provided that such events does not impose conditions preventing options to vest).

The following share-based option were issued and outstanding during the current and prior year:

	Grant date	Number	Exercise price	Fair value at grant date
			€	€
Options series 1	2017-12-22	30,000	5.75	2.51
Options series 2	2017-12-22	5,000	5.75	2.51
Options series 3	2017-12-31	4,614	0.00	6.68
Options series 4	2018-12-31	2,999	0.00	14.08
Options series 5	2019-05-14	1,500	14.08	5.31
Options series 6	2019-09-01	1,500	14.08	5.88
Options series 7	2019-11-01	5,000	10.50	7.56
Options series 8	2019-11-01	7,500	10.50	7.56
Options series 9	2019-12-31	2,873	16.56	5.58
Options series 10	2019-12-31	981	0.00	16.91
Share-based option activity for the year ended December 31, is presented below: 2019				2018
Number of options Weighted average exercise price € Number of options				Weighted average exercise price €
Outstanding – Beginning of the year 49,276 4.08 50,000 4.03 Granted 19,683 11.23 6,240 0.00 Exercised (6,478) 0.00 (585) 0.00 Cancelled (514) 0.00 (6,379) 0.00
Outstanding– End ofyear 61,967 6.82 49,276 4.08
Exercisable–End of year 718 -

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Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous 3 years. The expected life used in the determination of the fair value has been adjusted, based on management’s best estimate, for the effects of non-transferability and exercise restrictions.

Input to the model

Input to the model
										2019	2018
Options series	10		9		8		7		6	5	4
Grant date	2019-12-31	2019-12-31		2019-11-01		2019-11-01		2019-09-01		2019-05-14	2018-12-31
Grant date share price (€)	16.91	16.91		16.46		16.46		16.28		15.20	14.08
Exercise price (€)	0.00	16.56		10.50		10.50		14.08		14.08	0.00
Expected volatility	41.95%	41.95%		41.95%		41.95%		41.95%		41.95%	41.95%
Option life (years)	5	5		5		5		5		5	5
Dividend yield	0.00%	1.09%		1.09%		1.09%		1.09%		1.09%	0.00%
Risk-free interest rate	-0.11%	-0.11%		-0.25%		-0.25%		-0.53%		0.07%	0.20%

18. Revenue from contracts with customers

18. Revenue from contracts with customers
Gas-as-a-Service (GaaS) Revenue – operating lease Gas-as-a-Service (GaaS) Revenue – finance lease Product Revenue Gasses generators and installation Service and maintenance revenue Total Revenue from contracts with customers	2019 2018
	€ € 123,382 120,645 1,939,206 47,914 40,218 90,151 6,494,686 3,516,608 420,845 156,254
	9,018,337 3,931,572

The service and maintenance revenue consist of approximately 48% (2018: 66%) of revenues recognized at a point in time.

19. Other operating expenses

19. Other operating expenses
Personnel expenses Premises and utilities expenses Transport expenses Selling and marketing expenses Assurance-type warranties General and administrative expenses Total other operating expenses	2019 2018
	€ € 162,932 131,046 189,021 188,690 29,805 28,884 494,193 331,120 - (380,129) 433,370 412,421
	1,309,321 712,032

20. Finance costs

Interest on bank loans Interest on other long-term debt Interest on lease liabilities Net interest on the net defined liability Total finance costs	2019 2018
	€ € 59,576 36,895 789,524 389,664 113,134 105,125 3,133 20,008
	965,367 551,692

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21. Earnings per shares (EPS)

Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The following table reflects the income and share data used in the basic and diluted EPS calculations:

he following table reflects the income and share data used in	the basic and diluted EPS calculations:
Weighted average number of ordinary shares for basic EPS Effects of dilution from: Share-based payment Weighted average number of ordinary shares adjusted for the effect of dilution	2019 2018
	4,300,130 4,296,146 14,419 15,000 4,314,549 4,311,146

22. Financial instruments

a. Measurement categories and fair values, including valuation methods and assumptions The following table shows the carrying values and fair values of the long-term debt as of:

Financial liabilities Long-term debt	December 31, 2019 December 31, 2018 January 1, 2018
	Amortized cost Amortized cost Amortized cost
	Carrying amount € Fair value € Carrying amount € Fair value € Carrying amount € Fair value €
	18,669,356 19,402,975 10,977,212 11,377,290 5,006,456 5,157,094

The carrying values of cash and cash equivalents, receivables, other current financial asset, finance lease receivable, trade and other payables, approximate their fair value due to their short-term maturities. The methods and assumptions used in estimating the fair values of other financial assets and financial liabilities are as follows:

• Long-term debt (classified in level 2 of the fair value hierarchy): The Group’s long-term debt carry fixed interest rates. The fair value of the Group’s debt obligations has been calculated by discounting the future cash flows of the long-term debt at the interest rate of similar debt instruments.

• Cash and cash equivalent, receivables, finance lease receivables, trade and other payables (classified in level 2 of the fair value hierarchy): The fair values are approximately equal to their carrying values due to their short-term maturities;

• The Group’s financial instruments that are measured subsequent to initial recognition at fair value and financial instruments measured at amortized cost for which the fair value is disclosed are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

• Level 1 — Fair value measurements are those derived from quoted prices (unadjusted) in active markets for identical assets or liabilities.

• Level 2 — Fair value measurements are those derived from inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

Level 3 — Fair value measurements are those derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

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b. Credit risk

Credit risk refers to the risk that a counterparty will default on its contractual obligations resulting in financial loss to the Group. The exposure to credit risk is monitored on an ongoing basis at local entity and at group level. In order to minimise credit risk, the Group has adopted a policy of only dealing with creditworthy counterparties. As part of risk control, the credit quality of each counterparty is assessed, taking into account its financial position, past experience and other factors.

Trade receivables consist of a small number of large industrial companies. For trade receivables and contract assets, the Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. The Group determines the expected credit losses on trade receivables and contract assets by using a provision matrix, estimated based on historical credit loss experience and the profile of payments within the trade receivables (based on invoice date), adjusted as appropriate to reflect current conditions and estimates of future economic conditions. Additionally, at reporting date the receivables and contacts assets are reviewed for collectability on an individual basis. Notes 7 include further details on the loss allowance for the trade receivables and contract assets.

In addition, the Group is exposed to credit risk in relation to finance lease receivables. The Group has applied the simplified approach in IFRS 9 to measure the loss allowance at lifetime ECL. Note 8 include further details on the loss allowance for financial lease receivables.

The credit risk on cash and cash equivalents is limited because the counterparties are financial institutions with high credit-ratings, of at least A, assigned by international credit-rating agencies.

Details of trade receivable, contracts assets, finance lease receivables and expected credit loss were as follows:

December 31, 2019 Expected credit loss rate Estimated total gross carrying amount at default Expected credit loss December 31, 2018 Expected credit loss rate Estimated total gross carrying amount at default Expected credit loss	Finance lease receivables Contract assets	Trade receivable
		1-30 days 31-60 days 61-90 days Over 91 days Total
	€ € 0.724% 0.265% 3,800,117 2,618,171 27,508 6,937 Finance lease receivables Contract assets	€ € € € € 0.265% 0.265% 0.455% 0.709% 1,170,719 26,121 114,603 319,061 1,630,504 3,102 69 521 2,263 5,955 Trade receivable
		1-30 days 31-60 days 61-90 days Over 91 days Total
	€ € 1.021% 0.265% 1,748,561 356,578 17,861 945	€ € € € € 0.265% 0.265% 0.455% 0.709% 1,027,612 16,598 2,354 891,286 1,937,850 2,723 44 11 6,322 9,100

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January 1, 2018 Expected credit loss rate Estimated total gross carrying amount at default Expected credit loss	Finance lease receivables Contract assets	Trade receivable
		1-30 days 31-60 days 61-90 days Over 91 days Total
	€ € 0.993% 0.265% 1,798,608 77,346 17,861 205	€ € € € € 0.265% 0.265% 0.455% 0.709% 766,377 228,529 6,969 844,825 1,846,700 2,031 606 32 5,993 8,662

The aging of the receivables as presented in the table above is based on the invoice date. The payment terms for invoices are either 30 days or 60 days, depending on the contract type of the customer. The average credit period of sales is 68 days. No interest is charged on outstanding trade receivables. From the invoicing date, a 90 days overdue payment for trade debtors does not per definition demonstrate that a default occurs, which is supported by the historical low credit losses. Therefore, the definition of default that the Group considers includes both quantitative and qualitative indicators.

The Group writes off a trade receivable when there is information indicating that the debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g. when the debtor has been placed under liquidation or has entered into bankruptcy proceedings, or when the trade receivables are over two years past due, whichever occurs earlier. None of the trade receivables that have been written off is subject to enforcement activities. The table details the risk profile of trade receivables based on the Group’s provision matrix. As the Group’s historical credit loss experience does not show significantly different loss patterns for different customer segments, the provision for loss allowance based on past due status is not further distinguished between the Group’s different customer segments.

c. Market risk

i. Currency risk

The Group bears no currency risk as all contracts are negotiated in EURO. The entity in Singapore does some purchases within SGD. This currency risk is mitigated by the fact that they have their own SGD accounts. Besides this the risk is limited because this are only the expenses which are made within HyGear Asia.

ii. Interest rate risk

The Group incurs interest rate risk on interest-bearing receivables and on interest-bearing non-current and current liabilities (including borrowings).

In addition, the Group incurs low risks on fixed-interest loans payables and receivables with respect to the fair value due to changes in the market rate of interest. No financial derivatives for interest rate risk are contracted regarding the receivables.

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d. Liquidity risk

The Group is responsible for the liabilities towards credit providers such as banks and holders of bonds. The liabilities are extinguished through repayment of the principal amount included the accrued interest. The repayments are financed from cash flow generated during the operations of the Group. The same cash flows are utilised to finance the day to day activities of the Group. Management consistently monitors the cash flow in order to ensure that the Group has sufficiently levels of cash to meet obligations.

January 1, 2018 Long-term debt Trade and other payables Other liabilities December 31, 2018 Long-term debt Trade and other payables Other liabilities December 31, 2019 Long-term debt Trade and other payables Other liabilities	Carrying amount Less than 3 months 3 to 12 months 1 to 5 years More than 5 years Total
	€ € € € € 5,006,456 13,160 112,120 1,896,816 3,097,424 5,119,520 416,257 416,257 - - - 416,257 808,871 808,871 - - - 808,871 Carrying amount Less than 3 months 3 to 12 months 1 to 5 years More than 5 years Total
	€ € € € € 10,977,212 58,049 174,147 5,437,023 5,547,165 11,216,384 897,202 897,202 - - - 897,202 359,736 359,736 - - - 359,736 Carrying amount Less than 3 months 3 to 12 months 1 to 5 years More than 5 years Total
	€ € € € € 18,669,356 100,133 299,558 9,736,825 9,125,224 19,261,740 1,131,437 1,131,437 - - - 1,131,437 356,671 356,671 - - - 356,671

e. Capital management

For the purpose of the Group’s capital management, capital includes issued capital, preference shares, share premium and all other equity reserves attributable to the equity holders of the parent.

The Group manages its capital structure and makes adjustments in light of changes in economic conditions. To maintain or adjust the capital structure, the Group may adjust the dividend payment to shareholders, return capital to shareholders or issue new shares. The policy is designed to maintain a strong equity position, enabling the Group to grow the business and to assure the trust of investors, creditors and the markets and fulfil requirements ensuing from the loans. The management monitors the solvency ratio’s during the year due the fact that in the NPEX bonds a solvency ratio of at least 35% is included.

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f. Changes in liabilities arising from financing activities

Long term debt Current and Non- current portion of lease liabilities Total liabilities from financing activities Long term debt Current and Non- current portion of lease liabilities Total liabilities from financing activities	As at January 1, 2018 Cash flows New leases Foreign exchange movement Other As at December 31, 2018
	€ € € € € € 5,006,456 5,970,756 - - - 10,977,212 2,213,857 (215,423) - - - 1,998,434
	7,220,313 5,755,333 - - - 12,975,646 As at December 31, 2018 Cash flows New leases Foreign exchange movement Other As at December 31, 2019
	€ € € € € € 10,977,212 7,778,195 - - (86,051) 18,669,356 1,998,434 (300,877) 675,906 548 - 2,374,011
	12,975,646 7,477,318 675,906 548 (86,051) 21,043,367

The ‘Other’ column includes the effect of capitalization of borrowings costs.

23. Related party transactions

Note 5 provides information about the Group’s structure, including details of the subsidiaries and the holding company. The following table provides the total amount of transactions that have been entered into with related parties for the relevant financial year.

arties for the relevant financial year.
Entity with significant influence over the Group Oost NL December 31, 2019 December 31, 2018 January 1, 2018 DRL Resource Management BV (including SDI) December 31, 2019 December 31, 2018 Key management personnel of the Group: Other director’s interests December 31, 2019 December 31, 2018	Purchases from related parties Amounts owed to related parties*
	€ € - 93,132 - 33,070 - 524,732 251,247 - 189,586 - 178,890 - 116,217 -

*The amounts are classified as Trade payables, respectively.

The amount which are included in the overview above relates to the following transactions: Oost NL

These amount owed to Oost NL relates to a dividend payable and the payables to shareholders regarding the purchase of certificates of ordinary shares.

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DRL:

These amounts consist of management fees which are paid.

Loan from related parties* Oost NL December 31, 2019 December 31, 2018 January 1, 2018 DRL Resource Management BV (including SDI) December 31, 2019 December 31, 2018 January 1, 2018	Interest paid Amounts owed to related parties
	€ € 70,419 2,597,272 48,878 597,252 409,940 48,878 682,942 42,704 682,942 468,602

*Refer to Note 14 for loan details

Term and conditions of transactions with related parties

The sales to and purchases from related parties are made on terms equivalent to those that prevail in arm’s length transactions. Amounts owed classified as trade payables are normally settled on 30-days terms. Outstanding balances at the year-end are unsecured and interest free and settlement occurs in cash. There have been no guarantees provided or received for any related party receivables or payables.

Compensation of key management personnel

ompensation of key management personnel
Wages Post-employment pension and medical benefits Reimbursement of expenses Share-based payment Total compensation of key management personnel	2019 2018
	€ € 266,522 314,124 17,093 11,755 43,021 10,228 15,995 12,750
	342,631 348,857

24. Subsequent events

Impact of the Corona virus

In March 2020, the global outbreak of the Corona virus (Covid-19) started to impact many businesses worldwide. As the Covid-19 outbreak became apparent after 31 December 2019 this should be seen as a event after balance sheet date. At HyGear, different parts of our business are affected as well in 2020 and this paragraph describes the major aspects and our analysis of business continuity in that respect.

Immediate effects; government policies on travel restrictions

Travel restrictions influence three parts of our business negatively.

• The first is that we can’t commission newly delivered installations in countries with travel restrictions. This currently mainly concerns new installations in Bangladesh, as European travel is still allowed. In the specific case in Bangladesh, our customer faces the same issues of delay as our equipment is part of a larger plant and we don’t expect too much long term effects, assuming that the situation improves towards years end. This situation is still ongoing although we see travel restrictions being lifted for many countries and we managed to establish procedures including regular testing to mitigate these restrictions.

• Secondly, we have ongoing maintenance contracts with existing customers. Until now we have not been restricted to perform these maintenance activities because of special permits, for example in Spain and Belgium. In locations where travel is more difficult, we have been able to perform these activities remotely. We expect this not to cause too much problems, assuming the situation improves towards years end.

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• Thirdly, our sales force has not been able to follow up on leads as effectively because site visits, conferences and trade shows have proven to be strong instruments to identify new customers and build relations. Until now we have seen the sales funnel grow, but the actual number of booked orders stays behind target. As all negotiations that were started pre-Covid are still ongoing, we currently see this as a temporary slowdown, waiting for customers to take purchase decisions again. And since our order book was filled appropriately in the beginning of the year, we do not expect long term negative effects. We also observed that the world is learning to live with Covid and believe that sales levels will return to normal or increase in 2021.

Impact on revenue

As we have percentage of completion accounting applicable, sending off temporary staff will lead to delays in product delivery. We have initially calculated that if the Covid situation remains for the rest of the year. This could lead to a reduction of revenues of between 40 and 60% depending on the distribution of activities for Gas as a Service projects and turn-key and provided we can keep all GaaS projects operational, which is the case until now.

As we were planning for growth in 2020, we anticipated this to be the most negative scenario. After analysis of our progress in the 2020, we were glad to conclude that the actual impact is less than initially anticipated. Until Q3 2020 we have calculated the impact to be a reduction of 30% against our original plan. We also expect Q4 to be relatively busy, near the original levels which would allow us to believe we can further reduce this loss of revenue over the entire year 2020.

Impact on results

Although our revenue is under pressure for the year 2020, there will be two positive effects to offset the deficit in related.

• The Dutch government issued measures to compensate companies for loss in revenue. We have applied for and been granted subsidy under the NOW1 and NOW2 programs and applied for the NOW 3 program as well (not granted yet)

• The assembly works that we continue to perform with our own staff is less expensive than the works performed by third party staff and will increase our expected margins (on projects basis)

At this time it is difficult to gauge the impact exactly but with the busy quarter ahead we believe a significant part of the gross margin losses will be offset by these effects. Still, in our analysis over the first three quarters of 2020 we see a negative overall result, worse than our first three quarters results over 2019. This is partially due to a shift in activities for GaaS contracts, as these activities don’t yield immediate margins, and partially due to the above mentioned effects. We also concluded that the loss in revenue in the second quarter was worse than the revenue loss in the third quarter, which leads us to believe that the situation is improving. Based on our current order portfolio, we believe this trend to continue into the fourth quarter and possibly contribute to a slightly better result at years end.

Impacts on financing and cash flow

In 2020, we secured € 5M additional financing from one of our shareholders. We are confident that we will be able to attract further financing if needed.

Meanwhile, we have approached a set of investors, ranging from private equity, family offices, strategic investors, institutional investors, banks and infrastructure financiers. The responses we received were very positive and we have entered discussions with some of them.

As the opportunities were many, we decided to engage Investment Banks to assist us in this process. Early October, we narrowed the selection down to two Banks that both pitched their offering to our Supervisory Board and shareholders. At the same time, one strategic investor expressed interest in the possible integration of our Group into their business. As this would potentially be a fast track to further growth, we have decided to postpone the engagement of the Investment Bank until early January.

Impacts on employee wellbeing and morale

At the start of the outbreak in The Netherlands, we followed government advice to work from home if possible. This means all people with administrative, scientific or engineering jobs worked remotely, to create space for

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people who needed to work at the Group’s premises. So far this works well. In fact, surprisingly, we noticed some tasks were performed more efficiently than usual.

We also noticed a potentially negative effect that people don’t use their holidays as much as they normally would in the first six months. In order to make sure we don’t get confronted with people going on holiday all at the same time when Covid cleared, we agreed with our Workers Counsel that people have to use 14 mandatory holidays before mid-July and 7 days around Christmas.

Overall, morale is still good. In fact there is a general feeling to get through this difficult period together and speed up again as soon as the situation improves.

Other business drivers related to tangible and intangible assets

We operate several GaaS assets in long term contracts at customers sites. In all cases, we have calculated that the carrying amounts of these assets on our balance sheet is less than the fair value of the underlying contracts, with the exception of the contracts with a potential termination before the technical end of life of the assets. For these we assume that we can redeploy these assets for their full technical rest of life, if such contract would be terminated. We feel this is a fair and true statement concerning GaaS assets as they are characterised by a high level of standardization and operating these GaaS assets is our core business.

Related to Covid, it could happen that our customers will not be able to sustain their business (at the current level) and therefore the need for Hydrogen could reduce. As these are usually large companies, and our contracts have termination clauses that would trigger indemnifications, we consider these risks to be very low. As we assume that Covid will disappear at some point in the foreseeable future, we don’t think any impairments are necessary.

We also studied our intangible assets, HyDEV and HyREC. As the expected business volume in the near future (HyREC) and the current business volume (HyDEV) is such, that the return these intangible assets is already relatively short, and we expect Covid to disappear somewhere in the near future, we also see no reason for impairments.

Uncertainty remains

It must be emphasized that a lot of uncertainty remains in relation to the duration of the Corona crisis and the government measures taken. It is uncertain what the long term impact on the global economy, our client base and therefore our Group will be. We need capital, both debt and equity, if we want to maintain our current growth model. Given the envisioned development of a hydrogen economy, there is still a lot of interest in our Group and our technological capabilities. We are confident that we have enough liquidity, consisting of cash and committed facilities, for the 12 months following the date of these financial statements. Thereafter we will need capital inflow, or otherwise we will need to dramatically change our business model and possibly miss the growing opportunity that is emerging in hydrogen as energy carrier.

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25. Commitments

Leases

The Group has a lease contract that has not yet commenced as at December 31, 2019. The future lease payments for the non-cancellable lease contract are €27,313 within one year and €63,729 within five years.

Bank guarantees

The following bank guarantees are issued:

December 31, 2019 December 1, 2018 January 1, 2018 € € € Service guarantee LHPU unit 5,125 5,125 5,125

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26. Segment information

Information reported to the Group’s Chief Executive Officer (the Chief Operating Decision Maker (CODM)) for the purposes of resource allocation and assessment of segment performance is focused on the overall operations of HyGear which is the development and production of hydrogen technology solutions. As such, the Group has one reportable segment under IFRS 8.

Reportable segment Products and services Development and production of hydrogen “Turnkey” solutions, Gas-as-a-service (“GAAS”) technology solutions solutions, service and maintenance on the installed base of Turnkey solutions and hydrogen sales.

Revenues from major products and services

The Group’s revenues from its major products and services are disclosed in Note 18.

Geographical information

The Group’s revenue from external customers and information about its segment assets (non-current assets excluding financial instruments, deferred tax assets and other financial assets) by geographical location are detailed below:

Netherlands Singapore China France UK Belgium Spain Bangladesh Other Total

December 31, 2019 December 31, 2018 January 1, 2018 Revenue from external customers Non-current assets Revenue from external customers Non-current assets Non-current assets € € € € € 1,546,862 17,252,205 941,037 13,077,020 9,007,594 - 23,292 897,782 23,386 13,447 1,021,661 - 587,145 - - 933,830 - 510,491 - - 998,161 - - - - 1,764,196 2,013,357 - - - - 1,587,849 - 1,646,857 1,731,647 1,629,732 - 947,217 - - 1,123,895 - 47,900 - -

9,018,337 20,876,703 3,931,572 14,747,263 10,752,688

Information about major customers

Included in revenues arising from the development and production of hydrogen technology solutions are revenues of approximately € (1,397,276) (2018: € (1,367,596) which arose from sales to the Group’s largest customer. No other single customers contributed 10 per cent or more to the Group’s revenue in either 2019 or 2018.

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27. First time adoption of IFRS

The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting Standards (IFRS). These are the Group’s first consolidated financial statements prepared in accordance with IFRSs and IFRS 1 First-time Adoption of International Financial Reporting Standards has been applied. These consolidated financial statements do not purport to be the statutory financial statements of the Group.

Accordingly, the Group has prepared financial statements that comply with IFRS applicable as at December 31, 2019, together with the comparative period data for the year ended December 31, 2018. In preparing the financial statements, the Group’s opening statement of financial position was prepared as at January 1, 2018, the Group’s date of transition to IFRS.

This section explains the principal adjustments made by the Group in restating its Dutch GAAP financial statements, including the statement of financial position as at January 1, 2018 and the financial statements for the year ended December 31, 2018.

Exemptions applied

IFRS 1 allows first-time adopters certain exemptions from the retrospective application of certain requirements under IFRS.

The Group has applied the following exemptions:

Share-based payments

IFRS 2 Share-based Payment has not been applied to equity instruments in share-based payment transactions that were granted on or before 7 November 2002, nor has it been applied to equity instruments granted after 7 November 2002 that vested before 1 January 2018. For cash-settled share-based payment transactions, the Group has not applied IFRS 2 to liabilities that were settled before 1 January 2018.

Leases

The Group assessed all contracts existing at 1 January 2018 to determine whether a contract contains a lease based upon the conditions in place as at 1 January 2018.

Lease liabilities were measured at the present value of the remaining lease payments, discounted using the lessee’s incremental borrowing rate at 1 January 2018. Right-of-use assets were measured at the amount equal to the lease liabilities, adjusted by the amount of any prepaid or accrued lease payments relating to that lease recognised in the statement of financial position immediately before 1 January 2018 and apply IAS 36 to rightof-use assets at the date of transition to IFRSs.

The lease payments associated with leases for which the lease term ends within 12 months of the date of transition to IFRS and leases for which the underlying asset is of low value have been recognised as an expense on either a straight-line basis over the lease term or another systematic basis.The Group also used hindsight in determining the lease term if contracts contain option to extend or terminate.

Borrowing cost

The Group has applied the transitional provisions in IAS 23 Borrowing Costs and capitalizes borrowing costs relating to all qualifying assets after the date of transition. Similarly, the Group has not restated for borrowing costs capitalised under Local GAAP on qualifying assets prior to the date of transition to IFRS.

Revenue

The Group has applied the transitional provisions in IFRS 15 Revenue from Contracts with Customers:

• No restating contracts that were completed before January 1, 2018.

• No retrospective adjustments were made for contract modifications which occurred prior to January 1, 2018.

• The Group did not disclose the amount of the transaction price allocated to the remaining performance obligations and did not disclose an explanation of when the entity expects to recognise

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that amount as revenue for all reporting periods presented before January 1, 2018 which is the date of the first IFRS reporting period.

Cumulative translation differences

The Group has elected to use the cumulative translation differences exemption. Hence, the cumulative translation differences for all foreign operations are deemed to be zero at the date of transition to IFRS and the gain or loss on a subsequent disposal of any foreign operation shall exclude translation differences that arose before the date of transition to IFRS’s and shall include later translation differences.

Estimates

The estimates at January 1, 2018 and at December 31, 2018 and 2019 are consistent with those made for the same dates in accordance with Dutch GAAP (after adjustments to reflect any differences in accounting policies) apart from the following items where application of Dutch GAAP did not require estimation:

• share-based payments;

• expected credit loss

• leases.

The estimates used by the Group to present these amounts in accordance with IFRS reflect conditions at January 1, 2018, the date of transition to IFRS and as at December 31, 2018 and 2019.

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Group reconciliation of equity

Notes Assets Current assets Cash and cash equivalents P Prepayments A Contract assets B,C Construction contracts B,D Receivables A,C,D Current portion of finance lease receivables E Inventories A, G Other current financial assets E Total current assets Non-current assets Non-current portion of finance lease receivables C,E Right-of-use assets F Property, plant and equipment E,G Intangible assets G Total non-current assets Total assets Liabilities Current liabilities Trade and other payables H Contract liabilities B Current portion of long-term debt H Current portion of lease liabilities F Government grants H Total current liabilities H Non-current liabilities Long-term debt I, J Non-current portion of lease liabilities F Provision I Net employee defined benefit liabilities Q Deferred tax liabilities S Total non-current liabilities I Total liabilities Equity Share capital Other component of equity J, K, O Cumulative translation adjustment N Retained earnings E, K, N, O, Q Total equity Total equity and liabilities	December 31, 2019 Dutch GAAP Reclassifications and Remeasurements	IFRS	Dutch GAAP	December 31, 2018 Reclassifications and Remeasurements	IFRS	Dutch GAAP	January 1, 2018 Reclassifications and Remeasurements IFRS
	€ € 3,591,677 - - 564,117 - 2,611,234 3,110,218 (3,110,218) 2,069,282 453,605 - 155,645 1,324,660 (525,918) - 6,894	€ 3,591,677 564,117 2,611,234 - 2,522,887 155,645 798,742 6,894	€ 3,201,298 - - 741,210 2,661,731 - 935,429 -	€ - 865,343 355,633 (741,210) 296,307 75,463 (786,186) 8,874	€ 3,201,298 865,343 355,633 - 2,958,038 75,463 149,243 8,874	€ 2,007,615 - - 630,056 2,163,150 - 419,280 -	€ € - 2,007,615 205,543 205,543 77,141 77,141 (630,056) - 459,381 2,622,531 57,378 57,378 (120,871) 298,409 1,497 1,497
	10,095,837 155,359	10,251,196	7,539,668	74,224	7,613,892	5,220,101	50,013 5,270,114
	- 3,601,206 - 2,302,022 15,960,581 (2,691,728) 1,523,100 181,522	3,601,206 2,302,022 13,268,853 1,704,622	- - 11,986,641 534,681	1,646,857 1,950,308 (1,440,256) 69,032	1,646,857 1,950,308 10,546,385 603,713	- - 8,432,887 9,327	1,722,320 1,722,320 2,213,857 2,213,857 (1,625,703) 6,807,184 - 9,327
	17,483,681 3,393,022	20,876,703	12,521,322	2,225,941	14,747,263	8,442,214	2,310,474 10,752,688
	27,579,518 3,548,381	31,127,899	20,060,990	2,300,165	22,361,155	13,662,315	2,360,487 16,022,802
	- 1,543,769 - 542,893 - 322,118 - 323,016 - 1,494,364	1,543,769 542,893 322,118 323,016 1,494,364	- - - - -	1,353,764 969,898 179,162 218,054 1,584,632	1,353,764 969,898 179,162 218,054 1,584,632	- - - - -	1,262,164 1,262,164 217,807 217,807 104,941 104,941 215,423 215,423 1,445,240 1,445,240
	3,903,144 323,016	4,226,160	4,087,456	**218,054 **	4,305,510	**3,030,152 **	215,423 3,245,575
	- 18,347,238 - 2,050,995 - - - - - 238,700	18,347,238 2,050,995 - - 238,700	- - - - -	10,798,050 1,780,380 - 761,636 111,834	10,798,050 1,780,380 - 761,636 111,834	- - - - -	4,901,515 4,901,515 1,998,434 1,998,434 380,129 380,129 790,316 790,316 112,550 112,550
	18,593,179 **2,043,754 **	20,636,933	10,798,050	2,653,850	13,451,900	5,281,644	2,901,300 8,182,944
	22,496,323 2,366,770	24,863,093	14,885,506	2,871,904	17,757,410	8,311,796	3,116,723 11,428,519
	- 21,853 - 4,602,790 - 13,868 - 1626,295	21,853 4,602,790 13,868 1,626,295	- - - -	21,853 4,313,497 3,494 264,901	21,853 4,313,497 3,494 264,901	- - - -	21,853 21,853 4,648,027 4,648,027 - - (75,597) (75,597)
	5,083,195 1,181,611	6,264,806	**5,175,484 **	(571,739)	4,603,745	5,350,519	(756,236) 4,594,283
	27,579,518 **3,548,381 **	31127899	20,060,990	2,300,165	22,361,155	13,662,315	2,360,487 **16,022,802 **

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Group reconciliation of total comprehensive income

Notes Revenue from contracts with customers E, I Government grants L Total income Direct material costs E Subcontracting and other external costs Salaries, wages and temporary workers K Social security contribution Post employment benefit costs Q Amortisation and depreciation E,F Other operating expenses C,F,Q Capitalised expenses R Total expenses Operating profit Finance costs F,G,M,Q Finance income E,M Finance income and costs M Profit before tax Income tax expense S Profit for the year attributable to equity holder Other comprehensive income Other comprehensive income that may be reclassified to profit or loss in subsequent periods: Exchange differences on translation of foreign operations, net of tax Net other comprehensive income that may be reclassified to profit or loss in subsequent periods Other comprehensive income that will not be reclassified to profit or loss in subsequent periods: Return on plan assets (excluding interest income) Q Actuarial (gains) / losses Q Net other comprehensive income that will not be reclassified to profit or loss in subsequent periods	December 31, 2019 December 31, 2018
	Dutch GAAP Reclassifications and Remeasurements IFRS Dutch GAAP Reclassifications and Remeasurements IFRS
	€ € € € € € - 9,018,337 9,018,337 - 3,931,572 3,931,572 - 2,366,694 2,366,694 - 1,802,857 1,802,857
	9,620,835 1,764,196 11,385,031 5,812,896 (78,467) 5,734,429
	4,370,397 1,273,592 5,643,989 1,821,322 - 1,821,322 170,087 - 170,087 164,841 - 164,841 1,690,957 (78,985) 1,611,972 1,325,295 79,067 1,404,362 608,838 - 608,838 580,679 - 580,679 250,544 (895,139) (644,595) 202,237 (111,204) 91,033 666,972 241,968 908,940 608,880 153,702 762,582 995,761 313,560 1,309,321 273,165 438,867 712,032 - (742,117) (742,117) - (742,473) (742,473)
	8,753,556 112,879 8,866,435 4,976,419 (182,041) 4794,378
	867,279 1,651,317 2,518,596 836,477 103,574 940,051
	- (965,367) (965,367) - (551,692) (551,692) - 65,401 65,401 - 41,829 41,829 (1,071,853) 1,071,853 - (557,828) 557,828 -
	(204,574) 1,823,204 1,618,630 278,649 151,539 430,188
	- (126,866) (126,866) (43,581) 716 (42,865)
	(204,574) 1,696,338 1,491,764 235,068 152,255 387,323
	- 10,374 10,374 - 3,494 3,494
	- 10,374 10,374 - 3,494 3,494 - 151,855 151,855 - (77,583) (77,583) - (282,225) (282,225) - 30,758 30,758
	- (130,370) (130,370) - (46,825) (46,825)

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Explanatory notes

The effects of the transition to IFRS on the line items in the preceding tables can be classified into two categories: those that have a recognition, measurement, presentation and/or disclosure effects for the Group, or those that only have presentation and/or disclosure effects for the Group.

Notes Topic Recognition, measurement	Presentation and/or disclosure Comments
A Prepayments	X Amounts related to prepayments were previously included under Inventories and Receivables. As at January 1, 2018, €120,871 reduced Inventories, €84,672 reduced Receivables and €205,543 increased Prepayments. As at December 31, 2018, €786,186 reduced Inventories, €79,157 reduced Receivables and €865,343 increased Prepayments. As at December 31, 2019, €530,947 reduced Inventories, €33,170 reduced Receivables and €564,117 increased Prepayments.
B Revenue	X Under Dutch GAAP, the Group recognised Construction contracts, even if the receipt of the total consideration was conditional on successful completion of installation services. Under IFRS, any earned consideration that is conditional should be recognised as a contract asset rather than a Construction contract. Therefore, the Group reclassified €77,141 on January 1, 2018, €355,578 on December 31, 2018 and €2,618,171 on December 31, 2019 from construction contracts to contract assets. Under Dutch GAAP, the Group recognised current liability for an obligation to transfer goods or services to a customer for which the entity has received consideration or the amount is due from the customer. Under IFRS, the obligation should be recognised as a contract liability rather than a current liability. Therefore, the Group reclassified €217,807 on January 1, 2018, €969,898 on December 31, 2018 and € 542,893 on December 31, 2019 from current liabilities to contract liabilities.
C IFRS 9 – expected credit loss X	X The adoption of IFRS has fundamentally changed the Group’s accounting for impairment losses for financial assets by replacing incurred loss approach under Dutch GAAP with a forward-looking expected credit loss (ECL) approach. IFRS requires the Group to recognise an allowance for ECLs for all financial instruments not held at fair value through profit or loss and contract assets. At the date of transition to IFRS, the Group recognised additional impairment on its Contract assets, Receivables and Finance lease receivable of €205, €8,657 and €17,681 respectively as of January 1, 2018, €740, €511 and €nil respectively as of December 31, 2018 and €5,992, €(3,896) and €9,827 respectively as of December 31,2019,which resulted in an increase in Other operatingexpenses bythe same amounts.
D Construction contracts	X Amounts related to Receivables were previously included under Construction contracts. As at January 1, 2018, €552,710 reduced Construction contracts and increased Receivables. As at December 31, 2018, €384,632 reduced Construction contracts and increased Receivables. As a December 31,2019,€492,047 reduced Construction contracts and increased Receivables.
E Leases where the Group is a lessor X	X The application of IFRS 16 to leases where the Group is a lessor resulted in the reclassification of certain GaaS contracts from operating to finance leases. As such, this resulted in the recognition of finance lease receivables, the de-recognition of the property plant and equipment previously capitalized for these GaaS contracts on the balance sheet as well as its related amortisation expense and interest income on the finance lease receivables, direct material costs, and a revenue on the upfront recognition of the lease income. Previously recognized GaaS revenue associated these reclassified finance leases

57

	and where the lease payments are fixed and relate to the lease component in the contract were reversed in the income statement. Payments related to service components of the GaaS contracts recognized as finance were also recognized on a straight-line basis over the term of the lease, which resulted in a variation in rental income and increase in deferred rent income due to the timing difference between revenue recognition and cash receipts. As at January 1, 2018, this resulted in a Finance lease receivable of 1,797,379, a Deferred revenue of €1,497, a decrease of Property, plant and equipment of €1,625,703, and an increase in Retained earnings of €173,173. As at December 31, 2018, this resulted in a Finance lease receivable of 1,740,001, a Deferred revenue of €8,874, a decrease of Property, plant and equipment of €1,515,856, and an increase in Retained earnings of €233,019. As at December 31, 2019, this resulted in a Finance lease receivable of 8,784,359, a Deferred revenue of €6,894, a decrease of Property, plant and equipment of €2,860,130, and an increase in Retained earnings of €931,123. For the 12-month period ended December 31, 2018, this resulted in a decrease in Amortisation expense of €109,847, a decrease in Revenue of €78,467 and an increase in interest income of €28,466. For the 12-month period ended December 31, 2019, this resulted in a decrease in Amortisation expense of €109,847, an increase in Revenue of €1,764,196, an increase in Direct material cost of €1,211,357 and an interest income of €35,418.
F Leases where the Group is a lessee X	X The application of IFRS 16 to leases where the Group is a lessee and previously classified as operating leases (other than short-term or low value leases) under Dutch GAAP resulted in the recognition of right-of-use assets and lease liabilities on the balance sheet and the corresponding amortization expense and interest expense in the income statement. Previously recognized rental expense associated with these leases where the lease payments are fixed and relate to the lease component in the contract were reversed in the income statement. As at January 1, 2018, this resulted in a recognition of a Right-of-use asset and a Lease liability of €2,213,857. As at December 31, 2018, this resulted in a Right-of-use asset of €1,950,308, a lease liability of €1,998,434, interest expense of €105,125, amortisation expense of €263,549 and a reduction in Other operating expenses of €320,548. As at December 31, 2019, this resulted in a Right-of-use asset of €2,302,022, a lease liability of €2,374,011, interest expense of €113,134, amortisation expense of €351,209 and a reduction in Other operatingexpenses of €440,480.
G Capitalization of borrowing cost X	X Under IFRS, borrowing costs directly attributable to the acquisition, construction or production of an asset that necessarily takes a substantial period of time to get ready for its intended use or sale are capitalised as part of the cost of the asset. At the date of transition to IFRS, the Group increased inventory, property plant and equipment and intangible assets by €5,029, €92,802 and €112,490 respectively (December 31, 2018: €nil, €75,600 and €69,032 respectively), decreased interest expenses by €273,162 (December 31, 2018: €144,632), increased direct material costs by €62,235 (2018: €nil) and increased amortisation and depreciation of €606(2018:€nil)
H Current liabilities	X Amounts related to the different categories of current liabilities have been reclassified to the right line items under IFRS.

58

	As at January 1, 2018, €2,812,345 reduced current liabilities and €1,262,164, €104,941 and €1,445,240 increased Trade and other payables, Current portion of long-term debt and Government grants respectively As at December 31, 2018, €3,117,558 reduced current liabilities and €1,353,764, €179,162 and €1,584,632 increased Trade and other payables, Current portion of long-term debt and Government grants respectively. As at December 31, 2019, €3,360,251 reduced current liabilities and €1,543,769, €322,188 and €1,494,264 increased Trade and other payables, Current portion of long-term debt and Government grants respectively.
I Non-Current liabilities	X Amounts related to the different categories of non-current liabilities have been reclassified to the right line items under IFRS. As at January 1, 2018, €5,281,644 reduced the Non-current liabilities and €4,901,515 and €380,129 increased Long-term debt and Provisions respectively. As at December 31, 2018, €10,798,050 reduced the Non-current liabilities and increased the Long-term debt. As at December 31, 2019, €18,593,179 reduced the Non-current liabilities and increased the Long-term debt
J Equity instrument X	X Under IFRS, the Group has initially recorded the equity instrument at fair value in the equity. As at December 31, 2019, the €266,367 difference between the IFRS and Dutch GAAP carrying amount has been recognised as Other reserves Ordinary in equity and reduce the debt. This remeasurement also increased the interest expense for the year ended December 31, 2019 on the long-term debt calculated with the effective interest method of €20,426.
K Share-based payments X	X Under IFRS, the share-based compensation cannot be recognized on a straight-line basis over the vesting period. Accordingly, the share-based compensation has been adjusted to reflect the recognition over the vesting period to treat each instalment as a separate share option grant because each instalment has a different vesting period (graded vesting). As at January 1, 2018, €15,608 reduced the retained earnings and increased the Other reserves Ordinary in equity. As at December 31, 2018, €15,608 reduce the retained earnings, €79,067 increased the Salaries, wages and temporary workers expense and €94,675 increased the Other reserves Ordinary in equity. As at December 31, 2019, €94,675 reduce the retained earnings, €78,895 decreased the Salaries, wages and temporaryworkers expense and €15,690 increased the Other reserves Ordinaryin equity.
L Government grant	X As at December 31, 2019, €2,366,694 of government grants were previously presented within Revenue under Dutch GAAP and have been reclassified to Government grants under IFRS (December 31, 2018: €1,802,857)
M Finance income and costs	X As at December 31, 2019, €1,071,853 of finance income and cost were presented within one line item under Dutch GAAP and have been reclassified to Finance income for an amount of €29,983 and Finance expense for an amount of €1,101,836. For 2018, €557,828 of Finance income and costs was reclassified to Finance income and Finance expense for €13,363 and €571,191 respectively.
N Exchange difference foreign entity X	Refer to exemptions applied on transition date. As at January 1, 2018, an amount of €3,276 reduced the opening retained earnings to eliminate the openingamount of exchange difference foreign entity.
O Legal reserves ordinary	X Under IFRS, there is no legal reserves ordinary, this arise from a Dutch GAAP law regulation. Therefore, as at December 31,2019,€975,428 was reclassified to other reserves ordinary (December 31,2018: €493,799).
P Statement of cash flows X	Under Dutch GAAP, a lessee lease is classified as a finance lease or an operating lease. Cash flows arising from operatingleasepayments are classified as operatingactivities. Under IFRS,a lesseegenerallyapplies a

59

	single recognition and measurement approach for all leases and recognises lease liabilities. Cash flows arising from payments of principal portion of lease liabilities are classified as financing activities. Therefore, cash outflows from operating activities decreased by €141,202 (€443,833 in 2018) and cash outflows from financing activities increased by the same amount. Under Dutch GAAP, all lessor leases were classified as operating leases and the cash flow related to those leases were classified as operating activities. Under IFRS, some of these leases are now classified as Finance and therefore, the cash outflows from operating activities increased by €81,292 (€57,378 in 2018) and the cash outflows from investing activities increased by the same amount
Q Net employee defined benefit liabilities X	Under Dutch GAAP, the Group recognised costs related to its pension plan on a cash basis. Under IFRS, defined benefit plan obligations are recognised and are measured using the projected unit credit method. The pension liability has been recognised in full against retained earnings. As at January 1, 2018, an amount of €790,316 increased the Net defined benefit liability and decreased the retained earnings by the same amount. As at December 31, 2018, an amount of €nil (2018: €761,636) increased the Net defined benefit liability and decreased the retained earnings by the same amount. An amount of €895,139 (2018: €111,204) decreased the post-employment benefit costs, €nil (2018: €15,691) decreased the Other operating expenses, €3,133 (2018: 20,008) increased the finance costs, €151,855 (2018: €77,783) increased the return on plan assets and €282,225(2018: €30,758)decreased the Actuarial(gains)/ losses.
R Capitalised expenses	X Under Dutch GAAP, the capitalised expenses were included in the Other operating expenses. Under IFRS, the capitalised expenses have been separated. An amount of €742,117 (2018: €742,473) have been put in Capitalised expenses and is increasing the other operating expenses
S Deferred tax liabilities X	X The various transitional adjustments resulted in various temporary differences. According to the accounting policies, the Group has to recognise the tax effects of such differences. Deferred tax adjustments of €112,550 are recognised in retained earnings as at January 1, 2018 with the same amount increasing the Deferred tax liabilities. The deferred tax liabilities decreased by €716 in 2018, with the same amount affecting the related period's income taxes. The deferred tax liabilities increased by €126,866 in 2019, with the same amount affecting the related period's income taxes.

60

SCHEDULE B

Condensed interim consolidated financial statements of HyGear for the nine-month period ended September 30,

2020

Green Vision Holding B.V.

Condensed Interim Consolidated Financial Statements For the nine-month period ended September 30, 2020

(unaudited)

INDEPENDENT AUDITOR’S REVIEW REPORT

To: The shareholders and supervisory board of Green Vision Holding B.V.

Report on the review of the condensed interim consolidated financial statements for the ninemonth period ended 30 September 2020

Introduction

We have reviewed the accompanying condensed interim consolidated financial statements for the ninemonth period ended 30 September 2020 of Green Vision Holding B.V. based in Arnhem.

The condensed interim consolidated financial statements comprises:

1. the condensed consolidated statement of financial position as at 30 September 2020;

2. the following statements for the period from 1 January 2020 to 30 September 2020: the condensed consolidated statement of profit or loss and other comprehensive income, the condensed consolidated statement of changes in equity, and the condensed consolidated statement of cash flows; and

3. the notes, comprising a summary of the significant accounting policies and other explanatory information.

Management is responsible for the preparation and presentation of this interim financial information in accordance with IAS 34, 'Interim Financial Reporting'. Our responsibility is to express a conclusion on this condensed interim consolidated financial information based on our review.

Scope

We conducted our review in accordance with Dutch law including ISRE 2410 ‘Review of interim financial information performed by the independent auditor of the entity’. A review of interim financial information consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with Dutch Standards on Auditing and consequently does not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.

Emphasis of matter on impact COVID-19

The Coronavirus also impacts Green Vision Holding B.V. In the ‘Impact of COVID-19’ (note 5 to the condensed interim consolidated financial statements) management describes the impact of the Corona virus and the measures to deal with the events and circumstances. Furthermore management notes that it is difficult to assess the current impact of the Corona virus on the company and the financial position of the company, and uncertainty remains. Our opinion is not modified in respect of this matter.

Conclusion

Based on our review, nothing has come to our attention that causes us to believe that the condensed interim consolidated financial information for the period from 1 January 2020 to 30 September 2020, is not prepared, in all material respects, in accordance with IAS 34, 'Interim Financial Reporting’.

Arnhem, December 5, 2020 Flynth Audit B.V.

signed on the original

drs. J.W.M. Verhagen RA CISA

Contents

Contents	Contents
Condensed Interim Consolidated statement of financial position		3
Condensed Interim Consolidated statement of profit or loss and other comprehensive income		4
Condensed interim Consolidated statement of changes in equity		5
Condensed Interim Consolidated statement of cash flows		6
Notes	to the Condensed Interim Consolidated financial statements	7
1.	Nature of business	7
2.	Statement of compliance	7
3.	Adoption of new standards	7
4.	Change in accounting estimates	8
5.	Impact of COVID-19	8
6.	Cash and cash equivalents	11
7.	Contract assets	11
8.	Intangible assets	12
9.	Share capital	12
10.	Share-based payments	12
11.	Revenue from contracts with customers	14
12.	Other operating expenses	15
13.	Finance costs	15
14.	Earnings per shares	15
15.	Financial instruments	16
16.	Commitments	16
17.	Segment information	17
18.	Subsequent evens	17

Condensed Interim Consolidated statement of financial position

(unaudited)

As at September 30, 2020 and December 31, 2019 Expressed in Euro

Notes Assets Current assets Cash and cash equivalents 6 Prepayments Contract assets 7 Receivables Current portion of finance lease receivables Inventories Other current financial assets Total current assets Non-current assets Non-current portion of finance lease receivables Right-of-use assets Property, plant and equipment Intangible assets 8 Total non-current assets Total assets Liabilities Current liabilities Trade and other payables Contract liabilities Current portion of long-term debt Current portion of lease liabilities Government grants Total current liabilities Non-current liabilities Long-term debt Non-current portion of lease liabilities Deferred tax liabilities Total non-current liabilities Total liabilities Equity Share capital 9 Other components of equity Cumulative translation adjustment Retained earnings Total equity Total equity and liabilities	September 30, 2020 € 1,251,926 496,004 858,811 2,094,146 159,334 1,535,165 6,422 6,401,808 3,503,068 2,096,418 15,618,547 2,409,146 23,627,179 30,028,987 1,297,511 537,557 394,660 372,418 1,443,357 4,045,503 18,770,045 1,793,321 231,898 20,795,264 24,840,767 21,853 4,623,035 13,868 529,464 5,188,220 **30,028,987 **	December 31, 2019
		€ 3,591,677 564,117 2,611,234 2,522,887 155,645 798,742 6,894
		10,251,196
		3,601,206 2,302,022 13,268,853 1,704,622
		20,876,703
		31,127,899
		1,543,769 542,893 322,118 323,016 1,494,364
		4,226,160
		18,347,238 2,050,995 238,700
		20,636,933
		24,863,093
		21,853 4,602,790 13,868 1,626,295
		6,264,806
		31,127,899

Condensed Interim Consolidated statement of profit or loss and other comprehensive income

(unaudited)

For the nine-month periods ended September 30, 2020 and 2019 Expressed in Euro

Notes Revenue from contracts with customers 11 Government grants Total income Direct material costs Subcontracting and other external costs Salaries, wages and temporary workers Social security contribution Post-employment benefit costs Amortisation and depreciation Other operating expenses 12 Capitalised expense Total expenses Operating profit Finance costs 13 Finance income Profit before tax Income tax expense Profit for the period attributable to equity holders Other comprehensive income Other comprehensive income that will not be reclassified to profit or loss in subsequent periods: Return on plan assets (excluding interest income) Actuarial (gains) / losses Other comprehensive income/(loss) for the period, net of tax Total other comprehensive income for the period, net of tax attributable to equity holders Earnings per share 14 Basic earnings per share Diluted earnings per share	2020 € 2,345,525 1,917,621 4,263,146 1,358,467 171,726 695,584 545,428 194,831 960,954 934,267 (651,667) 4,209,590 53,556 (1,248,296) 91,107 (1,103,633) 6,802 (1,096,831) - - - (1,096,831) (€0,25) (€0,25)	2019
		€ 6,339,573 1,736,041
		8,075,614
		4,200,674 118,060 1,566,670 448,561 (691,627) 667,414 651,276 (587,686)
		6,373,342
		1,702,272
		(724,797) 49,356
		1,026,831
		(221,204)
		805,627
		151,855 (282,225)
		(130,370)
		675,257
		€0,19 €0,19

Condensed interim Consolidated statement of changes in equity

(unaudited)

As at September 30, 2020 and as at December 31, 2019 Expressed in Euro

As at January 1, 2019 Profit for the period Other comprehensive income Total comprehensive income Share-based payments Issue of warrant As at September 30, 2019 As at December 31, 2019 Profit for the period Other comprehensive income Total comprehensive income Share-based payments As at September 30, 2020	Issued ordinary share Issued cumulative preferred share	Share premium ordinary	Share premium Cum Pref	Exchange difference foreign entities	Other reserves Ordinary	Retained earnings Total equity
	€ €	€	€	€		€ €
	21,843 10	2,780,331	360,800	3,494	1,172,366	264,901 4,603,745
	- - - -	- -	- -	- -	- -	805,627 805,627 (130,370) (130,370)
	- -	-	-	-	-	675,257 675,257
	- - - -	- -	- -	- -	17,195 181,359	- 17,195 - 181,359
	21,843 10	2,780,331	360,800	3,494	1,370,920	940,158 5,477,556
	Issued ordinary share Issued cumulative preferred share	Share premium ordinary	Share premium Cum Pref	Exchange difference foreign entities	Other reserves Ordinary	Retained earnings Total equity
	€ €	€	€	€		€ €
	21,843 10	**2,780,331 **	360,800	13,868	1,461,659	1,626,295 6,264,806
	- - - -	- -	- -	- -	- -	(1,096,831) (1,096,831) - -
	- -	-	-	-	-	(1,096,831) (1,096,831)
	- -	-	-	-	20,245	- 20,245
	21,843 10	2,780,331	360,800	13,868	1,481,904	529,464 5,188,220

Condensed Interim Consolidated statement of cash flows

(unaudited)

For the nine-month periods ended September 30, 2020 and 2019 Expressed in Euro

Notes Operating activities Profit before tax for the period Items not affecting cash Amortisation and impairment of property, plant and equipment, right-of-use assets and intangible assets Share-based payment 10 Movements in net employee defined benefit liabilities Gain on lease modification Net foreign exchange differences Finance costs 13 Finance income Working capital adjustments Interest received Interest paid Net cash flows from operating activities Investing activities Acquisition of property, plant and equipment Acquisition of intangible assets 12 Proceeds from finance lease principal portion Net cash flows used in investing activities Financing activities Repayment of long-term debt Proceeds from long-term debt Purchase of certificates of ordinary shares Stock dividend via placement of repurchased certificates of ordinary shares Payment of principal portion of lease liabilities Net cash flows from/(used in) financing activities Net increase in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at September 30	2020 € (1,103,633) 960,950 39,728 - - 5,750 1,248,296 (91,107) 1,205,696 2,265,680 91,107 (1,214,486) 1,142,301 (2,932,562) (622,111) 94,449	2019
		€ 1,026,831 667,414 17,195 (895,139) (27,017) 810 724,797 (49,356) (2,028,090)
		(562,555)
		49,356 (875,823)
		(1,389,022))
		(3,375,305) (361,422) 56,483
	(3,460,224) (24,564) 345,390 (19,483) - (323,171) (21,828) (2,339,751) 3,591,677 1,251,926	(3,680,244)
		(109,559) 6,033,839 - 41,388 (225,041)
		5,740,627
		671,361 3,201,298
		3,872,659

Notes to the Condensed Interim Consolidated financial statements

1. Nature of business

The operations of Green Vision Holding B.V., registered with the Chamber of Commerce under number 810587798, with its statutory seat in Arnhem and its group companies (“the Group”) located at Westervoortsedijk 73 6827 AV in Arnhem, The Netherlands, are mainly comprised of:

• Piloting for third parties; Fast cycle from development, design of modules, construction of pilot plant to commissioning and testing.

• Development and manufacturing of on-site hydrogen generators based on steam reforming technology.

• Development and manufacturing of fuel cell products.

Sales are made in both the domestic and foreign markets.

2. Statement of compliance

The Group’s condensed interim consolidated financial statements have been prepared in compliance with IAS 34 Interim Financial Reporting and using the same accounting policies as those described in the Group’s annual consolidated financial statements for the year ended December 31, 2019. The Group’s annual consolidated financial statements for the year ended December 31, 2019 were prepared in compliance with International Financial Reporting Standards (“IFRS”).

These condensed interim consolidated financial statements do not include all of the information required under IFRS for complete financial statements and they should therefore be read in conjunction with the Group’s annual consolidated financial statements for the year ended December 31, 2019.

The condensed interim consolidated financial statements were authorised for issue by the Board of Directors on December 5, 2020.

3. Adoption of new standards

The following amendments to standards have been adopted by the Group for its annual periods beginning on January 1, 2020:

IAS 1 Presentation of Financial Statements and to IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors Definition of Material

Amendments to IAS 1, Presentation of Financial statements, [“IAS 1”] and to IAS 8, Accounting Policies, Changes in Accounting Estimates and Errors [“IAS 8”] is intended to make the definition of material in IAS 1 easier to understand and is not intended to alter the underlying concept of materiality in IFRS Standards. The concept of “obscuring” material information with immaterial information has been included as part of the new definition. The threshold for materiality influencing users has been changed from “could influence” to “could reasonably be expected to influence”. The definition of material in IAS 8 has been replaced by a reference to the definition of material in IAS 1. There is no anticipated impact of these amendments on its consolidated financial statements.

Covid-19-Related Rent Concessions Amendment to IFRS 16

In May 2020, the IASB issued Covid-19-Related Rent Concessions (Amendment to IFRS 16) that provides practical relief to lessees in accounting for rent concessions occurring as a direct consequence of COVID-19, by introducing a practical expedient to IFRS 16. The practical expedient

Notes to the Condensed Interim Consolidated financial statements

permits a lessee to elect not to assess whether a COVID-19-related rent concession is a lease modification. A lessee that makes this election shall account for any change in lease payments resulting from the COVID-19-related rent concession the same way it would account for the change applying IFRS 16 if the change were not a lease modification.

The practical expedient applies only to rent concessions occurring as a direct consequence of COVID-19 and only if all of the following conditions are met:

• a) The change in lease payments results in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

• b) Any reduction in lease payments affects only payments originally due on or before 30 June 2021 (a rent concession meets this condition if it results in reduced lease payments on or before 30 June 2021 and increased lease payments that extend beyond 30 June 2021); and c) There is no substantive change to other terms and conditions of the lease.

• The amendment applies to fiscal years beginning on or after January 1, 2020. There is no impact of these amendments on its consolidated financial statements.

4. Change in accounting estimates

During 2020, there was a change in estimate regarding the valuation of the inventory. Before 2020 the inventory regarding the Gas-as-a-Service (GaaS) revenue was not valued. This was caused by the fact that the number of GaaS installations was limited. Over the years the number of GaaS installations increased, including some contracts with a contract term of 15 years. Due the increased number of installations the inventory is valued per January 1, 2020. In addition to this the GaaS contracts are an important part of the business plans. The total impact of the change in estimate is € 276,594 which is corrected for an amount of € 110,638 as a deduction of the intangible assets and for € 165,956 is corrected within the cost of goods sold. This is caused by the fact that inventory has increased during the years a result of purchases for the sales of gasses generators and installations and for the GaaS installations. There are no other changes in accounting estimates during the period.

5. Impact of COVID-19

In March 2020, the global outbreak of the Corona virus started to impact many businesses worldwide. At HyGear, different parts of our business are affected as well and this paragraph describes the major aspects and our analysis of business continuity in that respect.

Immediate effects; government policies on travel restrictions

Travel restrictions influence three parts of our business negatively.

• The first is that we can’t commission newly delivered installations in countries with travel restrictions. This currently mainly concerns new installations in Bangladesh, as European travel is still allowed. In the specific case in Bangladesh, our customer faces the same issues of delay as our equipment is part of a larger plant and we don’t expect too much long term effects, assuming that the situation improves towards years end. This situation is still ongoing although we see travel restrictions being lifted for many countries and we managed to establish procedures including regular testing to mitigate these restrictions .

• Secondly, we have ongoing maintenance contracts with existing customers. Until now we have not been restricted to perform these maintenance activities because of special permits, for example in Spain and Belgium. In locations where travel is more difficult, we have been able to perform these activities remotely. We expect this not to cause too much problems, assuming the situation improves towards years end.

Notes to the Condensed Interim Consolidated financial statements

• Thirdly, our sales force has not been able to follow up on leads as effectively because site visits, conferences and trade shows have proven to be strong instruments to identify new customers and build relations. Until now we have seen the sales funnel grow, but the actual number of booked orders stays behind target. As all negotiations that were started pre-Covid are still ongoing, we currently see this as a temporary slowdown, waiting for customers to take purchase decisions again. And since our order book was filled appropriately in the beginning of the year, we do not expect long term negative effects. We also observed that

The world is learning to live with Covid and believe that sales levels will return to normal or increase in 2021.

Impact on revenue

As we have percentage of completion accounting, sending off temporary staff will lead to delays in product delivery revenue. We have initially calculated that if the Covid situation remains for the rest of the year. This could lead to a reduction of revenues of between 40 and 60% depending on the distribution of activities for Gas as a Service projects and turn-key and provided we can keep all GaaS projects operational, which is the case until now.

As we were planning for growth in 2020, we anticipated this to be the most negative scenario. After analysis of our progress in the current year, we were glad to conclude that the actual impact is less than initially anticipated. Until Q3 2020 we have calculated the impact to be a reduction of 30% against our original plan. We also expect Q4 to be relatively busy, near the original levels which would allow us to believe we can further reduce this loss of revenue over the entire year 2020.

As part of our Q3 review, we did an analysis on our sales funnel and concluded that our outlook is strong.

Impact on results

Although our revenue is under pressure for the year 2020, there will be two positive effects to offset the deficit in related.

• The Dutch government issued measures to compensate companies for loss in revenue. We have applied for and been granted subsidy under the NOW1 and NOW2 programs and applied for the NOW 3 program as well (not granted yet). For the 9 month period ended September 30, 2020 € 859,045 have been recognised as a reduction of expense in Salaries, wages and temporary workers.

• The assembly works that we continue to perform with our own staff is less expensive than the works performed by third party staff and will increase our expected margins (on projects basis)

At this time it is difficult to gauge the impact exactly but with the busy quarter ahead we believe a significant part of the gross margin losses will be offset by these effects. Still, in our analysis over the first three quarters of 2020 we see a negative overall result, worse than our first three quarters results over 2019. This is partially due to a shift in activities for GaaS contracts, as these activities don’t yield immediate margins, and partially due to the above mentioned effects. We also concluded that the loss in revenue in the second quarter was worse than the revenue loss in the third quarter, which leads us to believe that the situation is improving. Based on our current order portfolio, we believe this trend to continue into the fourth quarter and possibly contribute to a slightly better result at years end.

Impacts on financing and cash flow

In 2020, we secured € 5M additional financing from one of our shareholders. We are confident that we will be able to attract further financing if needed.

Notes to the Condensed Interim Consolidated financial statements

The slow down due to Covid had a positive effect on our cash requirements, because we invested less in GaaS projects and therefore less need for cash. As part of our Q3 review, we have modelled our cash flow 12 months into the future. Our conclusion is that (with the Oost Bond Loan), we will have sufficient cash available to continue the business at its current levels.

Meanwhile, we have approached a set of investors, ranging from private equity, family offices, strategic investors, institutional investors, banks and infrastructure financiers. The responses we received were very positive and we have entered discussions with some of them.

As the opportunities were many, we decided to engage Investment Banks to assist us in this process. Early October, we narrowed the selection down to two Banks that both pitched their offering to our Supervisory Board and shareholders. At the same time, one strategic investor expressed interest in the possible integration of our Group into their business. As this would potentially be a fast track to further growth, we have decided to postpone the engagement of the Investment Bank until early January

Other business drivers related to tangible and intangible assets

We operate several GaaS assets in long term contracts at customers sites. In all cases, we have calculated that the carrying amounts of these assets on our balance sheet is less than the fair value of the underlying contracts, with the exception of the contracts with a potential termination before the technical end of life of the assets. For these we assume that we can redeploy these assets for their full technical rest of life, if such contract would be terminated. We feel this is a fair and true statement concerning GaaS assets as they are characterised by a high level of standardization and operating these GaaS assets is our core business.

Related to Covid, it could happen that our customers will not be able to sustain their business (at the current level) and therefore the need for Hydrogen could reduce. As these are usually large companies, and our contracts have termination clauses that would trigger indemnifications, we consider these risks to be very low. As we assume that Covid will disappear at some point in the foreseeable future, we don’t think any impairments are necessary.

We also studied our intangible assets, HyDEV and HyREC. As the expected business volume in the near future (HyREC) and the current business volume (HyDEV) is such, that the return on these intangible assets is already relatively short, and we expect Covid to disappear somewhere in the near future, we also see no reason for impairments.

As part of our Q3 review we have made a full assessment of the actual income on the tangible and intangible assets. Our conclusion is that the GaaS income was more or less according to expectations. On intangible asset HyDEV we signed the largest order for HyGear with GTP and OSRAM. For HyREC we received a verbal mandate to deliver a system next year to a non-disclosed Glass Company. This supports us in our opinion that these intangible assets do not need an impairment.

Notes to the Condensed Interim Consolidated financial statements

Uncertainty remains

It must be emphasized that a lot of uncertainty remains in relation to the duration of the Corona crisis and the government measures taken. It is uncertain what the long term impact on the global economy, our client base and therefore our Group will be. We need capital, both debt and equity, if we want to maintain our current growth model. Given the envisioned development of a hydrogen economy, there is still a lot of interest in our Group and our technological capabilities. We are confident that we have enough liquidity, consisting of cash and committed facilities, for the 12 months following the publication of our annual statements.

Thereafter we will need capital inflow, or otherwise we will need to dramatically change our business model and possibly miss the growing opportunity that is emerging in hydrogen as energy carrier.

6. Cash and cash equivalents

Cash and cash equivalents Cash in banks and cash on hands Short-term deposits	September 30, 2020	December 31, 2019
	€ 1,209,997 41,929	€ 3,549,020 42,657
	1,251,926	3,591,677

A credit facility is available at the Rabobank for an amount of € 1,500,000. For this credit facility guarantees are issued in the form of a pledge of all present and future equipment, inventories, receivables and third parties and transport equipment. Rabobank has issued bank guarantees for an amount of € 5,125 against this facility. A credit facility of € 3,000,000 is available to the Group pursuant to the subordinated loan issued by Oost NL on 25 October 2019.

7. Contract assets

Contract asset	September 30, 2020 December 31, 2019
	€ €
	858,811 **2,611,234 **

The decrease in relation to the contract assets is caused by the completion of projects and due timing as a result of invoicing.

Notes to the Condensed Interim Consolidated financial statements

8. Intangible assets

At January 1, 2019 Additions At December 31, 2019 Additions At September 30, 2020 Amortisation & impairment At January 1, 2019 Additions At December 31, 2019 Additions At September 30, 2020 Net book value January 1, 2019 December 31, 2019 September 30, 2020	Development costs Software Total
	€ € € 562,831 89,071 651,902 1,087,918 27,242 1,115,160
	1,650,749 116,313 1,767,062 708,611 8,024 716,635
	2,359,360 124,337 2,483,697
	- 48,189 48,189 - 14,251 14,251
	- 62,440 62,440 - 12,111 12,111
	- 74,551 74,551
	562,831 40,882 603,713 1,650,749 53,873 1,704,622 2,359,360 49,786 2,409,146

9. Share capital

Ordinary share

The authorised ordinary share capital of Green Vision Holding B.V. amounts to € 21,843, divided into 4,368,600 ordinary shares of € 0.005 each. All ordinary shares are issued and as at September 30, 2020 63,275 (December 31, 2019: 66,881) ordinary share where held by the Group.

Cumulative preferred share

The authorized cumulative preferred share capital of Green Vision Holding B.V. amounts to € 10, divided into 10 cumulative preferred shares of € 1 each that were issued on June 21, 2017 to Oost NL raising total proceeds of € 360,810 for the Group. The cumulative preference shares carry a cumulative dividend of 5% per annum. For the 9 months period ended September 30, 2020 and the year ended December 31, 2019 no dividends where distributed. The cumulative preference shares dividend at September 30, 2020 is € 49,610 (December 31, 2019: € 36,080).

10. Share-based payments

Share-based employment benefit plan

The Group has an equity settled stock based employment benefit plan that is intended to provide an additional incentive to full-time directors, managers and selected persons employed by and/or working for the Group to remain in the Group or to pursue their contribution and increase their efforts with a view to the Group’s success. Each stock option either gives a right to purchase or a right to convert into a depositary receipts for ordinary shares in the Group own capital. The Group has (or will) acquire depositary receipts for ordinary shares in its own capital that are (or will be) issued by Stichting Administratiekantoor Green Vision Holding (referred to as “STAK HyGear”) and are registered with Stichting NPEX Bewaarbedrijf (referred to as “NPEX”). Under no circumstances the Group is required to settle the option in cash.

Notes to the Condensed Interim Consolidated financial statements

The number of options granted is calculated in accordance with the performance-based formula and is subject to approval by the remuneration committee. Options are granted at different exercise prices, may be exercised at any time from the date of vesting and require continuous employment until date of vesting from the date of grant in order to vest.

The table below presents the other vesting conditions for each options series.

Options series 1	Options will vest at the first of the two following events: A. Sale of 80% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.; or B. 6 (six) months after publicly listing (IPO) of more than 50% of the outstanding shares of the Group on a platform other than NPEX (unless the lock-up period for existing shareholders is longer than 6 (six) months, in that case the options will vest at the ending of the existing shareholders lock-up period).
Options series 2	Options will vest at the first of the two following events: A. Sale of 100% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.; or B. 6 (six) months after publicly listing (IPO) more than 50% of the outstanding shares of the company on a platform other than NPEX.
Options series 3, 4, 9 and10	Options will vest over 3 (three) years, 25% immediately on grant date and 25% at the end of the following 3 (three) years.
Options series 5, 6, 12, 14 and 15	Options will vest over 4 (four) years, 25% after one year of grant date and 25% at the end of the following 3 (three) years.
Options series 7	Options will vest at the first of the two following events: A. Sale of 100% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.; or B. 6 (six) months after publicly listing (IPO) more than 50% of the outstanding shares of the company on a platform other than NPEX (unless the lock-up period for existing shareholders is longer than 6 (six) months, in that case the options will vest at the ending of the existing shareholders lock-up period).
Options series 8 and 13	Options will vest at the first of the two following events: A. Sale of 80% of the Group's outstanding shares to a third party, not related to the existing shareholders of Green Vision Holding B.V.;or B. 6 (six) months after publicly listing (IPO) of more than 50% of the outstanding shares of the Group on a platform other than NPEX (provided that such events does not impose conditions preventing options to vest).
Options series 11	Options will vest at the fisrt of the two following events: A. Sale of 80% of the Group's outstanding shares to a third party, not related ot the existing shareholders of Green Vision Holding b.v. and after 3 (three) years of employment by the company at May 1st 2023; or B. 6 (six) months after pblicly listing (IPO) more than 50% of the outstanding shares of the company on a platform other than NPEX (provided that such events does not impose conditions preventing options to vest).

The following stock option were issued and outstanding during the current and prior year:

Options series 1 Options series 2 Options series 3 Options series 4 Options series 5 Options series 6 Options series 7 Options series 8 Options series 9 Options series 10 Options series 11 Options series 12 Options series 13 Options series 14 Options series 15

Grant date Number Exercise price Fair value at grant date

€ € 2017-12-22 30,000 5.75 2.51 2017-12-22 5,000 5.75 2.51 2017-12-31 4,614 0.00 6.68 2018-12-31 2,999 0.00 14.08 2019-05-14 1,500 14.08 5.31 2019-09-01 1,500 14.08 5.88 2019-11-01 5,000 10.50 7.56 2019-11-01 7,500 10.50 7.56 2019-12-31 2,873 16.56 5.58 2019-12-31 981 0.00 16.91 2020-05-01 500 10.50 5.71 2020-05-01 500 14.00 4.48 2020-06-01 5,000 10.50 5.51 2020-06-02 500 13.30 4.85 2020-08-01 500 15.00 4.95

Notes to the Condensed Interim Consolidated financial statements

Stock option activity for the 9 months period ending September 30, 2019 and the year ended December 31 2019, is presented below:

Outstanding – Beginning of the year Granted Exercised Cancelled Outstanding – End of year Exercisable – End of year	2020 2019
	Number of options Weighted average exercise price € Number of options Weighted average exercise price €
	61,967 6.82 49,276 4.08 7,000 11.27 19,683 11.23 - - (6,478) 0.00 (395) 0.00 (514) 0.00
	68,572 7.31 61,967 6.82
	718 718

Expected volatility was determined by calculating the historical volatility of the Group’s share price over the previous 3 years. The expected life used in the determination of the fair value has been adjusted, based on management’s best estimate, for the effects of non-transferability and exercise restrictions.

Input to the model

	For the 9 months	For the 9 months	period ending September 30,	period ending September 30,	period ending September 30,			For the year ended	For the year ended	December	31, 2019
					2020
Options	15	14	13	12	11	10	9	8	7	6	5
series
Grant	2020-08-	2020-06-	2020-06-	2020-05-	2020-05-	2019-12-	2019-12-	2019-11-	2019-11-	2019-09-	2019-05-
date	01	02	01	01	01	31	31	01	01	01	14
Grant	15.25	14.21	13.69	14.00	14.00	16.91	16.91	16.46	16.46	16.28	15.20
date
share
price (€)
Exercise	15	13.30	10.50	14.00	10.50	0.00	16.56	10.50	10.50	14.08	14.08
price (€)
Expected	41.95%	41.95%	41.95%	41.95%	41.95%	41.95%	41.95%	41.95%	41.95%	41.95%	41.95%
volatility
Option	5	5	5	5	5	5	5	5	5	5	5
life
(years)
Dividend	1.09%	1.09%	1.09%	1.09%	1.09%	0.00%	1.09%	1.09%	1.09%	1.09%	1.09%
yield
Risk-free	-0.40%	-0.27%	-0.28%	-0.34%	-0.34%	-0.11%	-0.11%	-0.25%	-0.25%	-0.53%	0.07%
interest
rate

11. Revenue from contracts with customers

Gas-as-a-Service (GaaS) Revenue – operating lease Gas-as-a-Service (GaaS) Revenue – finance lease Product Revenue Gasses generators and installation Service and maintenance revenue Total Revenue from contracts with customers	September 30, 2020 September 30, 2019
	€ € 276,155 90,016 97,999 35,935 93,338 13,592 1,694,924 5,828,394 183,109 371,636
	2,345,525 6,339,573

The service and maintenance revenue consist of approximately 56% (2019: 54%) of revenues recognized at a point in time.

Notes to the Condensed Interim Consolidated financial statements

12. Other operating expenses

Personnel expenses Premises and utilities expenses Selling and marketing expenses Transport expenses General and administrative expenses Total other operating expenses	September 30, 2020 September 30, 2019
	€ € 124,820 113,328 156,926 49,876 195,627 301,910 34,352 6,668 422,542 179,494
	934,267 651,276

13. Finance costs

Interest on bank loans Interest on other long-term debt Interest on lease liabilities Net interest on the net defined benefit liability Total finance costs	September 30, 2020 September 30, 2019
	€ € 27,045 60,433 1,115,456 572,199 105,795 89,032 - 3,133
	1,248,296 724,797

14. Earnings per shares

Basic EPS is calculated by dividing the profit for the year attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year. Diluted EPS is calculated by dividing the profit attributable to ordinary equity holders of the parent by the weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be issued on conversion of all the dilutive potential ordinary shares into ordinary shares.

The following table reflects the income and share data used in the basic and diluted EPS calculations for the 9 months period ended September 30:

he 9 months period ended September 30:
Weighted average number of ordinary shares for basic EPS Effects of dilution from: Shares based payment Weighted average number of ordinary shares adjusted for the effect of dilution	2020 2019
	4,303,522 4,301,719 9,025 14,350
	4,312,547 4,316,069

Notes to the Condensed Interim Consolidated financial statements

15. Financial instruments

Measurement categories and fair values, including valuation methods and assumptions The following table shows the carrying values and fair values of the long-term debt as of:

Financial liabilities Long-term debt	September 30, 2020 December 31, 2019
	Amortized cost Amortized cost
	Carrying amount € Fair value € Carrying amount € Fair value €
	19,164,705 19,620,087 18,669,356 19,402,975

The carrying values of cash and cash equivalents, receivables, finance lease receivable, trade and other payables, approximate their fair value due to their short-term maturities. The methods and assumptions used in estimating the fair values of other financial assets and financial liabilities are as follows:

• Long-term debt (classified in level 2 of the fair value hierarchy): The Group’s long-term debt carry fixed interest rates. The fair value of the Group’s debt obligations has been calculated by discounting the future cash flows of the long-term debt at the interest rate of similar debt instruments.

• Cash and cash equivalent, receivables, finance lease receivables, trade and other payables (classified in level 2 of the fair value hierarchy): The fair values are approximately equal to their carrying values due to their short-term maturities;

• The Group’s financial instruments that are measured subsequent to initial recognition at fair value and financial instruments measured at amortized cost for which the fair value is disclosed are grouped into Levels 1 to 3 based on the degree to which the fair value is observable:

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

16. Commitments

Bank guarantees

The following bank guarantees are issued:

Service guarantee LHPU unit

	As at September	30,	2020	As at December	31,	2019
	€			€
			5,125			5,125

Notes to the Condensed Interim Consolidated financial statements

17. Segment information

Information reported to the Group’s Chief Executive Officer (the Chief Operating Decision Maker (CODM)) for the purposes of resource allocation and assessment of segment performance is focused on the overall operations of HyGear which is the development and production of hydrogen technology solutions. As such, the Group has one reportable segment under IFRS 8.

Reportable segment	Products and services
Development and production of hydrogen technology solutions	“Turnkey” solutions, Gas-as-a-service (“GAAS”) solutions, service and maintenance on the installed base of Turnkey solutions and hydrogen sales.

Revenues from major products and services

The Group’s revenues from its major products and services are disclosed in Note 11.

Information about major customers

For the nine-month periods ended September 30, 2020 and 2019, included in revenues arising from the development and production of hydrogen technology solutions are revenues of approximately € 409,416 (2019: € 1,621,622) which arose from sales to the Group’s largest customer. No other single customers contributed 10 per cent or more to the Group’s revenue in either 2020 or 2019.

18. Subsequent evens

There are no other subsequent events than those disclosed in Note 5: ‘Impact of COVID-19’.

SCHEDULE C

Unaudited Pro Forma Condensed Consolidated Financial Statements of the Corporation

XEBEC ADSORPTION INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION AS AT SEPTEMBER 30, 2020

AS AT SEPTEMBER 30, 2020	AS AT SEPTEMBER 30, 2020	AS AT SEPTEMBER 30, 2020
UNAUDITED			Xebec	Green Vision		Pro Forma	Pro Forma
(Expressed in $CDN)			Adsorption	**Holding B.V. **	Notes	Adjustments	Consolidated
				Note 6a
Assets
Current assets
	Cash		51,642,192	1,956,886	[3a]	(65,226,000)	157,549,605
					[3d]	169,176,527
	Restricted cash		1,233,666	-			1,233,666
	Trade and other receivables		38,810,030	3,273,360			42,083,390
	Contract assets		-	1,342,407			1,342,407
	Current portion of finance lease receivable			249,055			249,055
	Inventories		13,224,748	2,399,616			15,624,364
	Investment tax credit receivable		15,943	-			15,943
	Prepaid expenses		447,842	775,304			1,223,146
	Other current financial assets		-	10,038			10,038
			105,374,421	10,006,666		103,950,527	219,331,614
Property, plant and equipment			4,457,087	27,690,262			32,147,349
Intangible assets			2,164,187	3,765,736			5,929,923
Non-current portion of finance lease receivable			-	5,475,646			5,475,646
Goodwill			11,419,510	-	[3c]	119,236,294	130,655,804
			123,415,205	46,938,310		223,186,821	393,540,336
Liabilities
Current liabilities
	Trade, other payables and accrued liabilities		15,133,558	4,284,250	[4a]	800,000	20,217,808
	Contract liabilities		3,193,306	840,255			4,033,561
	Current portion of long-term debt		4,853,743	1,199,020			6,052,763
	Current portion of government royalty program obligation		170,446	-			170,446
	Current portion of provisions		274,931	-			274,931
	Current portion of obligation arising from shares issued by a subsidiary		392,600	-			392,600
	Income taxpayable		20,878	-			20,878
			24,039,462	6,323,525		800,000	31,162,987
	Long-term debt		8,798,996	32,142,599			40,941,595
	Government royalty program obligation		223,228	-			223,228
	Obligation arising from shares issued by a subsidiary		4,240,094	-			4,240,094
	Provisions		60,807	-			60,807
	Deferred tax liabilities		179,647	362,480			542,127
			37,542,234	38,828,604		800,000	77,170,838
Shareholders' Equity
	Share Capital		110,246,019	34,158	[3b]	(34,158)	341,542,546
					[3a]	62,120,000
					[3d]	169,176,527
	Contributed surplus		7,653,601	7,226,266	[3b]	(7,226,266)	7,653,601
	Accumulated other comprehensive income		(484,463)	21,677	[3b]	(21,677)	(484,463)
	Retained Earnings/(Deficit)		(31,542,186)	827,605	[3b]	(827,605)	(32,342,186)
					[4a]	(800,000)
Total Equity			85,872,971	8,109,706		222,386,821	316,369,498
Total liabilities and equity			123,415,205	46,938,310		223,186,821	393,540,336

XEBEC ADSORPTION INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)

FOR THE YEAR ENDED DECEMBER 31, 2019

UNAUDITED (Expressed in $CDN)

FOR THE YEAR ENDED DECEMBER 31, 2019 UNAUDITED (Expressed in $CDN)
	Xebec	Green Vision			Pro Forma	Pro Forma
	Adsorption	Holding B.V.	Notes		Adjustments	Consolidated
		Note 6b
Revenue	49,317,880	16,913,602				66,231,482
Cost of goods sold	33,829,894	12,329,338				46,159,232
Gross Margin	15,487,986	4,584,264		-	-	20,072,250
Research and development expenses	71,503	462,990				534,493
Selling and administrative expenses	11,297,432	379,648	[4a]		800,000	12,477,080
Foreign exchange (gain) loss	383,693	-				383,693
Loss (gain) on conversion of shares issued by a subsidiary	(256,516)	-				(256,516)
	11,496,112	842,638			800,000	13,138,750
Operating income (loss)	3,991,874	3,741,626			(800,000)	6,933,500
Other Charges (income)
Finance income	(32,246)	(97,160)				(129,406)
Finance expenses	1,647,141	1,434,149				3,081,290
	1,614,895	1,336,989		-	-	2,951,884
Income (loss) before income taxes	2,376,979	2,404,637		-	(800,000)	3,981,616
Income taxes	356,916	188,472			-	545,388
Net income (loss) for the year	2,020,063	2,216,165		-	(800,000)	3,436,228
Earnings per share, basic
Basic net income (loss) per share	0.03					0.03
Weighted average number of outstanding common shares	64,319,442		[5]		41,336,583	105,656,025
Earnings per share, diluted
Basic net income (loss) per share	0.03					0.03
Weighted average number of outstanding common shares	68,600,371		[5]		41,336,583	109,936,954

XEBEC ADSORPTION INC.

PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF INCOME (LOSS)

FOR THE NINE-MONTH ENDED SEPTEMBER 30, 2020

UNAUDITED

(Expressed in $CDN except share amounts)

FOR THE NINE-MONTH ENDED SEPTEMBER 30, 2020 UNAUDITED (Expressed in $CDN except share amounts)
	Xebec	Green Vision		Pro Forma	Pro Forma
	Adsorption	Holding B.V.	Notes	Adjustments	Consolidated
		Note 6c
Revenue	50,170,121	6,488,508			56,658,629
Cost of goods sold	38,463,738	5,976,879			44,440,617
Gross Margin	11,706,383	511,629		-	12,218,012
Research and development expenses	94,022	182,978			277,000
Selling and administrative expenses	14,303,577	247,139			14,550,716
Foreign exchange (gain) loss	(555,747)	-			(555,747)
Loss (gain) on conversion of shares issued by a subsidiary	223,958	-			223,958
	14,065,810	430,117		-	14,495,927
Operating income (loss)	(2,359,427)	81,512		-	(2,277,915)
Other Charges (income)
Finance income	(343,427)	(138,665)			(482,092)
Finance expenses	1,691,323	1,899,907			3,591,230
	1,347,896	1,761,242		-	3,109,138
Income (loss) before income taxes	(3,707,323)	(1,679,730)		-	(5,387,053)
Income taxes	(14,110)	(10,353)			(24,463)
Net income (loss) for the year	(3,693,213)	(1,669,377)		-	(5,362,590)
Earnings per share, basic and diluted
Net income (loss) per share	(0.04)				(0.04)
Weighted average number of outstanding common shares
	92,928,420		[5]	41,336,583	134,265,003

Notes to Unaudited Pro Forma Condensed Consolidated Financial Statements

(Amounts expressed in Canadian dollars)

1. BASIS OF PRESENTATION

The unaudited pro forma condensed interim consolidated statement of financial position as at September 30, 2020, the unaudited pro forma condensed interim consolidated statement of income (loss) for the nine months ended September 30, 2020 and the unaudited pro forma condensed consolidated statement of income (loss) for the year ended December 31, 2019 of Xebec Adsorption Inc. (“Xebec”) were prepared for illustrative purposes only in compliance with National Instrument 51-102 – Continuous Disclosure Obligations .

The unaudited pro forma condensed consolidated statement of financial position and the unaudited pro forma condensed consolidated statements of income (loss) of Xebec are comprised of information derived from:

• the unaudited condensed interim consolidated statement of financial position of Xebec as at September 30, 2020; and

• the unaudited condensed interim consolidated statement of financial position of Green Vision Holding B.V. as at September 30, 2020.

• the audited consolidated statements of income (loss) of Xebec for the year ended December 31, 2019; and

• the audited consolidated statement of profit or loss of Green Vision Holding B.V. for the year ended December 31, 2019.

• the unaudited condensed interim consolidated statements of income (loss) of Xebec for the nine months ended September 30, 2020; and

• the unaudited condensed interim consolidated statement of profit or loss of Green Vision Holding B.V. for the nine months ended September 30, 2020.

The unaudited pro forma condensed consolidated financial statements have been compiled using accounting policies consistent with those adopted by Xebec in accordance with International Financial Reporting Standards (“IFRS”), but do not include all of the disclosures required by IFRS, and should be read in conjunction with the Xebec financial statements listed above.

The unaudited pro forma consolidated financial information gives effect to Xebec’s acquisition of Green Vision Holding B.V. (“Green Vision”) as if it had occurred as at September 30, 2020 for the purposes of the unaudited pro forma condensed interim consolidated statement of financial position.

The unaudited pro forma condensed consolidated statements of income (loss) have been prepared to give effect to the proposed acquisition of Green Vision for the year ended December 31, 2019 and for the nine months ended September 30, 2020, as if the transaction had occurred on January 1, 2019.

The unaudited pro forma condensed consolidated financial statements are not necessarily indicative of the results of operations that would have occurred had the acquisition of Green Vision been effected on the dates indicated, nor are the unaudited pro forma condensed consolidated financial statements indicative of the results of operation of future periods. Actual amounts recorded upon consummation of the proposed acquisition will differ from such unaudited pro forma condensed consolidated financial statements. Since the pro forma condensed consolidated financial statements have been developed to retroactively show the effect of the transaction, there are limitations inherent in the nature of such pro forma data.

Purchase Consideration

In arriving at the preliminary purchase consideration, the Green Vision shareholders are to receive for consideration €82 million (approximately $127.3 million). The shareholders will receive approximately CAD $65.2 million in cash and 10,301,824 Xebec common shares at a price of $6.03 per share. For purposes of the pro-forma financial information, it has been assumed that all Green Vision outstanding warrants and options have been cancelled prior to the closing of the acquisition.

2. DESCRIPTION OF TRANSACTION

Green Vision

Xebec has entered into an agreement to acquire all of the issued and outstanding shares of Green Vision, the parent company of HyGear Technology and Services B.V. (“HyGear”) in the Netherlands for consideration of €82.0 million (approximately $127.3 million) and the assumption of €18.4 million (approximately $28.6 million) in net debt (the “Acquisition”). HyGear shareholders will receive approximately $65.2 million in cash and 10,301,824 Xebec common shares (“Common Shares”) at a price of $6.03 per share. The cash portion of the Acquisition will be funded by way of a $125 million bought deal public

offering of subscription receipts (“Subscription Receipts”) and a concurrent private placement of $55 million for aggregate gross proceeds of approximately $180 million and aggregate net proceeds of approximately $169 million (the public offering and concurrent private placement being, collectively, the “Offering”), as further described below. More than 80% of the Common Shares received as consideration by HyGear shareholders will be subject to contractual lock-up restrictions, and all of the Common Shares received as consideration by HyGear shareholders will be subject to a statutory four-month hold period in accordance with Canadian securities law.

To finance the payment of the cash consideration of the Acquisition, Xebec has entered into an agreement with a syndicate of underwriters co-led by Desjardins Capital Markets and TD Securities Inc. acting as joint bookrunners (collectively, the “Underwriters”) to sell, on a bought deal basis, 21,552,000 Subscription Receipts at a price of $5.80 per Subscription Receipt (the “Offering Price”) for gross proceeds of approximately $125,001,600 (the “Public Offering”).

Xebec has granted the Underwriters of the Public Offering an over-allotment option to purchase up to an additional 3,232,800 Subscription Receipts to cover over-allotments, if any, for a period of 30 days following the closing of the Public Offering. If the over-allotment option is exercised in full by the Underwriters, gross proceeds from the Public Offering will be up to $143,751,840.

In addition, the Corporation has entered into a subscription agreement with CDPQ, pursuant to which Xebec and CDPQ have agreed that CDPQ will purchase on a “private placement” basis in Canada, Subscription Receipts at the Offering Price for gross proceeds to Xebec of approximately $55 million upon closing (the “Concurrent Private Placement”). Xebec has also granted CDPQ an option to purchase up to an additional 15% of Subscription Receipts in the event that the Underwriters exercise their over-allotment option under the Public Offering. If the additional subscription option is exercised in full by CDPQ, gross proceeds from the Concurrent Private Placement will be up to approximately $63.3 million. The Subscription Receipts sold pursuant to the Concurrent Private Placement (and the underlying Common Shares) will be subject to a statutory four-month hold period following the Closing of the Offering. Desjardins Capital Markets and TD Securities Inc. are acting as joint bookrunning agents on the Concurrent Private Placement.

Each Subscription Receipt will entitle the holder thereof, for no additional consideration and without further action on the part of the holder, to receive one Common Share of Xebec, upon the completion of the Acquisition. The proceeds of the Public Offering and the Concurrent Private Placement will be held in escrow pending the completion of the Acquisition. If the Acquisition is completed on or prior to February 28, 2021, the net proceeds of the Public Offering and the Concurrent Private Placement will be released and the Subscription Receipts will be exchanged on a one-for-one basis for Common Shares for no additional consideration or further action. The Acquisition is subject to, among other things, customary closing conditions, which include the approval from the TSX Venture Exchange, and the availability of the financing required to pay the applicable cash portion of the purchase price relating to the Acquisition. Closing is also subject to a condition for the benefit of the Corporation that there has been no material adverse effect on HyGear and its subsidiaries.

The net proceeds of the Offering will be used to fund the cash consideration payable pursuant to the Acquisition, to fund potential future acquisitions (including the LOI Acquisitions) and for general corporate purposes. The Acquisition is expected to close on or about December 30, 2020. The Acquisition has been unanimously approved by the Board of Directors of Xebec and is subject to regulatory approval and other customary closing conditions, including those set forth above.

3. PRO FORMA CONDENSED CONSOLIDATED STATEMENT OF FINANCIAL POSITION ASSUMPTIONS AND ADJUSTMENTS

Green Vision

The unaudited pro forma condensed interim consolidated statement of financial position of Xebec as at September 30, 2020 has been adjusted to reflect the following transactions as if the acquisition of Green Vision had been completed on September 30, 2020:

• (a) The Green Vision transaction is expected to be accounted for as a business combination under IFRS 3 Business Combinations .

The aggregate consideration for this acquisition was estimated to be $127,346,000. The consideration was comprised of:

• Cash payment of $65,226,000.

• Equity issuance of 10,301,824 common shares of Xebec at a price of $6.03 per share, approximately $62,120,000.

• (b) The elimination of Green Vision equity accounts.

• (c) The net assets acquired and considered paid for ownership in Green Vision is preliminarily allocated as follows:

Cash and cash equivalents	$	1,956,886
Prepayments		775,304
Contract assets		1,342,407
Receivables		3,273,360
Finance lease receivables		5,724,701
Inventories		2,399,616
Other current financial assets		10,038
Right-of-use assets		3,276,911
Property, plant and equipment		24,413,351
Intangible assets		3,765,736
Total Assets		$ 46,938,310
Trade and other payables		$ 2,028,139
Contract liabilities		840,255
Long-term debt		29,956,352
Lease liabilities		3,385,267
Government grants		2,256,111
Deferred tax liability		362,480
Total Liabilities		$ 38,828,604
Net Assets Acquired		$ 8,109,706
Total consideration (see 3(a) above)		$ 127,346,000
Goodwill		$ 119,236,294

The pro forma fair value adjustment of Xebec’s interest is subject to change based on finalization of valuation adjustments and completion of management’s assessment of the fair values of the assets and liabilities of Green Vision. Due to the timing of the announcement of the acquisition, Xebec has not yet obtained sufficient information to accurately determine the fair market value of Green Vision’s net assets by category and has therefore allocated the book values of the net assets acquired as a proxy of fair value as at September 30, 2020. Management has not recognized any deferred tax assets as part of the pro form fair value adjustment, however, they believe they will be able to utilize these deferred tax assets, though they have not fully assessed position at the current time. Goodwill represents the amount by which the fair value adjustment exceeds the book value, being a proxy of fair value of the assets acquired and liabilities assumed. The final calculation and allocation of the fair value adjustment will be based on the net assets purchased as of the closing date of the Green Vision transaction and other information available at that time; there may be material differences from this pro forma fair value allocation as a result of finalizing the valuation. Based on management’s preliminary estimates, goodwill may be allocated to other items such as: certain identified intangible assets, including licenses.

If a portion of the goodwill is allocated to Xebec’s intangible assets, a pro forma adjustment related to depreciation expense would be required. For every $10,000 allocated to intangible assets in excess of book value, pro forma depreciation expense would increase on an annual basis by approximately $2,000 - $3,333 based on Xebec’s straightline depreciation periods of 3 – 5 years as disclosed in Xebec’s consolidated financial statements. The actual depreciation recorded will be subject to the determination of the useful lives and the allocated fair values and could materially differ from these estimates. Additionally, there may be an income tax impact associated with these differences, however this impact is dependent on the nature of the asset class and tax depreciation classes, and the assigned fair values, which are unable to be reliably estimated at this time. Due to the uncertainty of the amounts, no pro forma adjustments have been made in the pro forma financial statements for these items.

(d) The subscription receipts offering through the bought deal equity financing and private placement offering. The net

proceeds from the offerings will approximately be $169,176,527. For purposes of the pro-forma financial information, we have assumed the over-allotment option has not been exercised and all subscription receipts are converted immediately into common shares of Xebec.

4. PRO FORMA CONSOLIDATED STATEMENT OF INCOME (LOSS) AND ADJUSTMENTS

Green Vision

The unaudited pro forma condensed interim consolidated statement of income (loss) of Xebec for the nine months ended September 30, 2020 and the unaudited pro forma condensed consolidated statement of income (loss) of Xebec year ended December 31, 2019 have been adjusted to reflect the following transactions as if the acquisition of Green Vision had been completed on January 1, 2019:

• (a) Estimated acquisition related costs of approximately $800,000 (relating to investment banker, legal, regulatory and accounting fees) have been recorded to the opening deficit of the pro forma consolidated statement of financial position of Xebec as at September 30, 2020 and reflected in the pro forma consolidated statement of operations of Xebec for the year ended December 31, 2019 on the basis that these expenses are directly incremental to the Green Vision transaction. The pro forma financial statements do not reflect a deferred tax asset that would otherwise result from tax effecting the acquisition related costs due to Xebec’s history of losses.

5. PRO FORMA NET INCOME (LOSS) PER SHARE

The basic and diluted pro forma net income (loss) per share for the nine months ended September 30, 2020 and the year ended December 31, 2019 is as follows:

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020

FOR THE NINE MONTHS ENDED SEPTEMBER 30, 2020
Pro forma net (loss)	$(5,362,590)
Weighted average shares outstanding	92,928,420
Pro forma shares issued for acquisition of Green Vision	10,301,824
Pro forma shares issued as part of subscription receipts offering	31,034,759
Pro forma weighted average shares outstanding	134,265,003
Basic and dilutedpro forma net lossper share	$(0.04)
FOR THE YEAR ENDED DECEMBER 31, 2019
Pro forma net income	$3,436,228
Weighted average shares outstanding	64,319,442
Pro forma shares issued for Green Vision acquisition	10,301,824
Pro forma shares issued as part of subscription receipts offering	31,034,759
Pro forma weighted average shares outstanding, basic	105,656,025
Basic pro forma net income per share	$0.03
Weighted average diluted shares outstanding	68,600,371
Pro forma shares issued for Green Vision acquisition	10,301,824
Pro forma shares issued as part of subscription receipts offering	31,034,759
Pro forma weight average diluted shares outstanding	109,936,954
Dilutedpro forma net incomeper share	$0.03

Note 6: Foreign exchange translation

• (a) The assets and liabilities of Green Vision, which has a EUR reporting and functional currency, are translated at the exchange rate of $1.5631 which was in effect as at September 30, 2020.

Consolidated Statement of Financial Position

(unaudited) As at September 30, 2020

			Presentation
	Green Vision	Green Vision	conforming	Green Vision
	Holding B.V.(EUR)	Holding B.V.(CAD)	adjustments	Holding B.V. Adjusted
Assets
Current assets
Cash and cash equivalents	1,251,926	1,956,886		1,956,886
Prepayments	496,004	775,304		775,304
Contract assets	858,811	1,342,407		1,342,407
Receivables	2,094,146	3,273,360		3,273,360
Current portion of finance lease receivables	159,334	249,055		249,055
Inventories	1,535,165	2,399,616		2,399,616
Other current financial assets	6,422	10,038		10,038
	6,401,808	10,006,666	-	10,006,666
Non-current portion of finance lease receivables	3,503,068	5,475,646		5,475,646
Right-of-use assets	2,096,418	3,276,911	(3,276,911)	-
Property, plant and equipment	15,618,547	24,413,351	3,276,911	27,690,262
Intangible assets	2,409,146	3,765,736		3,765,736
	30,028,987	46,938,310	-	46,938,310
Liabilities
Current liabilities
Trade and other payables	1,297,511	2,028,139	2,256,111	4,284,250
Contract liabilities	537,557	840,255		840,255
Current portion of long-term debt	394,660	616,893	582,127	1,199,020
Current portion of lease liabilities	372,418	582,127	(582,127)	-
Governmentgrants	1,443,357	2,256,111	(2,256,111)	-
	4,045,503	6,323,525	-	6,323,525
Long-term debt	18,770,045	29,339,459	2,803,140	32,142,599
Non-current portion of lease liabilities	1,793,321	2,803,140	(2,803,140)	-
Deferred tax liability	231,898	362,480		362,480
	24,840,767	38,828,604	-	38,828,604
Shareholders' Equity
Share capital	21,853	34,158		34,158
Contributed surplus	-	-	7,226,266	7,226,266
Other component of equity	4,623,035	7,226,266	(7,226,266)	-
Accumulated other comprehensive income	-	-	21,677	21,677
Cumulative translation adjustment	13,868	21,677	(21,677)	-
Retained earnings	529,464	827,605		827,605
Total Equity	5,188,220	8,109,706	-	8,109,706
Total liabilities and equity	30,028,987	46,938,310	-	46,938,310

(b) The revenues and expenses of Green Vision, which has a EUR reporting and functional currency, are translated to Canadian dollars at the average exchange rate of $1.4856 for the year ended December 31, 2019.

Consolidated Statement of Profit or Loss

(unaudited)

Year ended December 31, 2019

			Presentation
	Green Vision	Green Vision	conforming	Green Vision
	Holding B.V. (EUR)	Holding B.V. (CAD)	adjustments	Holding B.V. Adjusted
Revenue			16,913,602	16,913,602
Revenue from customers with contracts	9,018,337	13,397,641	(13,397,641)	-
Government grants	2,366,694	3,515,961	(3,515,961)	-
Cost ofgoods sold		-	12,329,338	12,329,338
Gross Margin	11,385,031	16,913,602	(12,329,338)	4,584,264
Research and development expenses		-	462,990	462,990
Selling and administrative expenses		-	379,648	379,648
Direct material costs	5,643,989	8,384,710	(8,384,710)	-
Subcontracting and other external cost	170,087	252,681	(252,681)	-
Salaries and wages temporary workers	1,611,972	2,394,746	(2,394,746)	-
Social security contributions	608,838	904,490	(904,490)	-
Post employment benefit costs	(644,595)	(957,610)	957,610	-
Amortization and depreciation	908,940	1,350,321	(1,350,321)	-
Other operating expenses	1,309,321	1,945,127	(1,945,127)	-
Capitalized expense	(742,117)	(1,102,489)	1,102,489	-
	8,866,435	13,171,976	(12,329,338)	842,638
Operating Profit	2,518,596	3,741,626	-	3,741,626
Other Charges (income)
Finance expense	965,367	1,434,149		1,434,149
Finance income	(65,401)	(97,160)		(97,160)
	899,966	1,336,989	-	1,336,989
Profit before tax	1,618,630	2,404,637	-	2,404,637
Income tax expense(recovery)	126,866	188,472		188,472
Net income(loss)	1,491,764	2,216,165	-	2,216,165

• (c) The revenues and expenses of Green Vision, which has a EUR reporting and functional currency, are translated to Canadian dollars at the average exchange rate of $1.5220 for the nine months ended September 30, 2020.

Consolidated Statement of Profit or Loss

(unaudited)

Nine month period ended September 30, 2020

			Presentation
	Green Vision	Green Vision	conforming	Green Vision
	Holding B.V. (EUR)	Holding B.V. (CAD)	adjustments	Holding B.V. Adjusted
Revenue			6,488,508	6,488,508
Revenue from customers with contracts	2,345,525	3,569,889	(3,569,889)	-
Government grants	1,917,621	2,918,619	(2,918,619)	-
Cost ofgoods sold			5,976,879	5,976,879
Gross Margin	4,263,146	6,488,508	(5,976,879)	511,629
Research and development expenses			182,978	182,978
Selling and administrative expenses			247,139	247,139
Direct material costs	1,358,467	2,067,587	(2,067,587)	-
Subcontracting and other external cost	171,726	261,367	(261,367)	-
Salaries and wages temporary workers, less WBSO wage subsidy	695,584	1,058,679	(1,058,679)	-
Social security contributions	545,428	830,141	(830,141)	-
Post employment benefit costs	194,831	296,533	(296,533)	-
Amortization and depreciation	960,954	1,462,572	(1,462,572)	-
Other operating expenses	934,267	1,421,954	(1,421,954)	-
Capitalized expense	(651,667)	(991,837)	991,837	-
	4,209,590	6,406,996	(5,976,879)	430,117
Operating income(loss)	53,556	81,512	-	81,512
Other Charges (income)
Finance expense	1,248,296	1,899,907		1,899,907
Finance income	(91,107)	(138,665)		(138,665)
	1,157,189	1,761,242	-	1,761,242
Profit before tax	(1,103,633)	(1,679,730)	-	(1,679,730)
Income tax expense(recovery)	(6,802)	(10,353)		(10,353)
Net income(loss)	(1,096,831)	(1,669,377)	-	(1,669,377)