IXEN-AR-2020 Consolidated Audited Annual Report

Consolidated Annual Report 2020

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Translation from Estonian

CONSOLIDATED ANNUAL REPORT

beginning of financial year: 01.01.2020

end of financial year: 31.12.2020

business name: Ixellion AS

registry code: 14044225

street name, house and office number: Mõisa 4–2

city: Tallinn

county: Harju County

postal code: 13522

e-mail address: [email protected]

website: www.ixellion.eu


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Table of Contents Management Report ............................................................................................................................................................................................... 3 Financial Statements .............................................................................................................................................................................................. 5

Consolidated Balance Sheet ...................................................................................................................................................................... 5 Consolidated Income Statement ................................................................................................................................................................ 6 Consolidated Cash Flow Statement ........................................................................................................................................................... 7 Consolidated Statement of Comprehensive Income ................................................................................................................................ 8 Consolidated Statement of Changes in Equity ......................................................................................................................................... 9 Notes to Financial Statements ................................................................................................................................................................. 10

Note 1 Accounting Policies ...................................................................................................................................................... 10 Note 2 Short-term Financial Investments ............................................................................................................................... 14 Note 3 Receivables and Prepayments .................................................................................................................................... 15 Note 4 Inventories ..................................................................................................................................................................... 16 Note 5 Shares of Subsidiaries ................................................................................................................................................. 16 Note 6 Loans Payable ............................................................................................................................................................... 17 Note 7 Payables and Prepayments .......................................................................................................................................... 17 Note 8 Sales Revenue ............................................................................................................................................................... 18 Note 9 Other Operating Revenue ............................................................................................................................................. 18 Note 10 Goods, Raw Materials and Services ............................................................................................................................ 18 Note 11 Staff Costs ..................................................................................................................................................................... 18 Note 12 Profit (Loss) from Financial Investments ................................................................................................................... 19 Note 13 Other Financial Income and Expenses ....................................................................................................................... 19 Note 14 Related Parties .............................................................................................................................................................. 19 Note 15 Events after Reporting Date ......................................................................................................................................... 21 Note 16 Unconsolidated Balance Sheet .................................................................................................................................... 21 Note 17 Unconsolidated Income Statement ............................................................................................................................. 23 Note 18 Unconsolidated Cash Flow Statement ........................................................................................................................ 24 Note 19 Unconsolidated Statement of Changes in Equity ...................................................................................................... 25 Note 20 Non-monetary Transactions in Cash Flow Statement ............................................................................................... 25 Note 21 Impact of Coronavirus .................................................................................................................................................. 26

Signatures to Annual Report ....................................................................................................................................................................... 26

Sworn Auditor’s Report ............................................................................................................................................................................... 26


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Management Report Ixellion AS (www.ixellion.eu) is a holding company that forms a group along with parent company G.U.S Investments OÜ (www.gus-

investments.ee) and subsidiaries Ixellion Technologies Ltd and X Technologies Ltd. The group has been founded for the purpose of

research and development activities and innovative industrial applications in the field of science and engineering. The group primarily

focuses on the fields of aeronautics, green energy (high-efficiency engines and generators) and energy recovery and innovative

technological manufacturing methods.

In 2020 the reorganisation of the asset structure of the group continued. The objective of the group is to acquire special raw materials, know-how, technologies, industrial methods and intellectual properties to commence industrial manufacturing by applying the properties

in operating companies via acquisition thereof. The group has sufficient inventories of nickel wire with a high degree of purity, which are

necessary for industrial application of technologies acquired. The inventories of the group are audited by the German Institute for Rare

Earths and Strategic Metals (ISE). Due to the COVID-19 pandemic, travelling and organisation of meetings in different countries are

complicated and, thus, several activities, including launch of industrial projects, have been delayed.

Ixellion AS as a technological holding company is the main group company mostly because the company is a collector of major part of

the technologies of the entire group. In 2020, the separate result of parent company Ixellion AS comprised a loss of EUR 45.9 million. The

financial information about parent company Ixellion AS has been provided in the notes to the consolidated report (Notes 16–19). The

group earned a profit of EUR 840.7 million during the financial year.

In 2019 G.U.S. INVESTMENTS OÜ, the parent company, decided to list the shares of Ixellion AS by way of the Direct Listing Process on

the Munich Stock Exchange (m:Access OTC Regulated Market). The corresponding resolution was adopted in January 2020. In order to

start the listing process, the company had to be transformed into a public limited company. In 2020 Ixellion OÜ was transformed into a

public limited company. The sole objective of the transformation was to change the legal form of the company into a public limited company.

The primary purpose of raising funds from the stock exchange is to launch industrial projects. Listing on the stock exchange also enables the transfer and exchange of shares between other securities depositories, such as Clearstream and Euroclear, which renders it possible

to engage new shareholders from different countries. Upon listing shares, it is also possible to use the shares in swaps in order to acquire

strategic companies necessary for launching the industrial projects.

The main activities in 2020 were related to the arrangement of the group asset structure and preparations for listing. In 2021, the group will continue, through the acquisition of existing organisations, to advance technologies and use patented technologies of Ixellion AS in

selected fields of activity.

As the transactions of the group are concluded in various currencies and the functional currency of some of the group companies is the

British pound, the group is exposed to a significant risk arising from changes in exchange rates.

2020 2019

Current ratio (in times)

27.56

2.50

Cash ratio 0.55 0.06

Quick ratio 1.53 0.06

Solidity 0.96 0.61

Debt-to-assets ratio (%) 4 39

ROA (%) 39 –

ROE (%) 40 –

Current ratio = current assets / current liabilities

Cash ratio = cash / current liabilities


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Quick ratio = (current assets – inventories) / current liabilities

Solidity = equity / (total liabilities + equity)

Debt-to-assets ratio = total liabilities / assets x 100%

ROA = net profit / total assets x 100%

ROE = net profit / equity x 100%


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Financial Statements

Consolidated Balance Sheet (EUR)

31.12.2020 31.12.2019 Note no.

Assets Current assets

Cash 43,147,726 43,147,302 Financial investments 0 42,910 2

Receivables and prepayments 75,606,953 1,114,244 3

Inventories 2,027,144,179 1,767,548,909 4

Total current assets 2,145,898,858 1,811,853,365 Non-current assets

Receivables and prepayments 26,874,214 26,840,193 3

Property, plant and equipment 9,026 12,844 Intangible assets 6,639,143 6,979,872 Total non-current assets 33,522,383 33,832,909

Total assets 2,179,421,241 1,845,686,274 Liabilities and equity

Liabilities Current liabilities

Loans payable 150,317 0 6

Payables and prepayments 77,711,334 725,052,307 7

Total current liabilities 77,861,651 725,052,307 Long-term liabilities

Loans payable 0 353,344 6

Total long-term liabilities 0 353,344 Total liabilities 77,861,651 725,405,651

Equity Equity held by shareholders of parent company

Share capital at nominal value 903,490,500 903,490,500 Unregistered share capital 119,872,221 0 Issue premium 5,196,045 5,196,045 Unrealised exchange rate differences -89,451,864 70,106,138 Retained earnings (loss) 257,587,302 59,843,259 Profit (loss) for financial year 840,605,723 -82,892 Total equity held by shareholders of parent company

2,037,299,927 1,038,553,050 Minority interest 64,259,663 81,727,573 Total equity 2,101,559,590 1,120,280,623

Total liabilities and equity 2,179,421,241 1,845,686,274


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Consolidated Income Statement (EUR)

2020 2019 Note no.

Sales revenue 127,569,491 0 Other operating revenue 838,722,364 1,709 9

Goods, raw materials and services -72,865,281 0 10

Other operating expenses -803,497 -271,464 Staff costs -2,731,175 -173,007 11

Depreciation and impairment of non-current assets -11,493 -39,841 Substantial write-downs of current assets -54,692,637 -4,277,992 Other operating charges -3,284 -3,232,986 Operating profit (loss) 835,184,488 -7,993,581 Profit (loss) from financial investments 163 5,852,956 12

Interest income 155,770 1,886 Interest expenses -4,546 -4,414 Other financial income and expenses 5,407,212 2,054,746 13

Profit (loss) before income tax 840,743,087 -88,407 Profit (loss) for financial year 840,743,087 -88,407

Share of profit (loss) attributable to shareholder of parent

company

840,605,723 -82,892 Share of profit (loss) attributable to minority interest 137,364 -5,515


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Consolidated Cash Flow Statement (EUR)

2020 2019 Note no.

Cash flow from operating activities Operating profit (loss) 835,184,488 -7,993,581 Adjustments

Depreciation and impairment of non-current assets 11,493 39,841 Profit (loss) from sales of non-current assets -34,000 0 Other adjustments 140,876,633 861,116,245 19

Total adjustments 140,854,126 861,156,086 Change in receivables and prepayments related to

operating activities

-74,618,239 -26,756,106 Change in inventories -259,595,270 -857,799,624 Change in payables and prepayments related to operating

activities

-647,231,893 33,481,800 Total cash flow from operating activities -5,406,788 2,088,575

Cash flow from investing activities Loans granted 0 -29,500 Repayments of loans granted 0 20,000 Total cash flow from investing activities 0 -9,500

Cash flow from financing activities Loans raised 0 108,200 Total cash flow from financing activities 0 108,200

Total cash flow -5,406,788 2,187,275 Cash and cash equivalents at beginning of period 43,147,302 43,178,231 Change in cash and cash equivalents -5,406,788 2,187,275 Effect of changes in exchange rates 5,407,212 -2,218,204 Cash and cash equivalents at end of period 43,147,726 43,147,302


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Consolidated Statement of Comprehensive Income (EUR)

2020 2019

Profit (loss) for financial year 840,743,087 -88,407

Other comprehensive income (loss): Unrealised exchange rate differences -89,451,864 70,106,138

Total other comprehensive income (loss) -89,451,864 70,106,138

Comprehensive income (loss) for financial year 751,291,223 70,017,731

incl. share of comprehensive income (loss) attributable to shareholder of parent

company 751,153,859 70,023,246

incl. share of comprehensive income (loss) attributable to minority interest 137,364 -5,515


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Consolidated Statement of Changes in Equity

(EUR)

Total

Equity held by shareholders of parent company Minority interest

Share capital

at nominal

value

Unregistered

share capital

Issue premium Unrealised

exchange rate

differences

Retained

earnings (loss)

31.12.2018 903,490,500 0 5,196,045 3,330,229 128,587,585 36,973,387 1,077,577,746

Profit (loss) for financial

year -82,892 -5,515 -88,407

Other changes in equity 66,775,909 -68,744,326 44,759,701 42,791,284

31.12.2019 903,490,500 0 5,196,045 70,106,138 59,760,367 81,727,573 1,120,280,623


year 840,605,723 137,364 840,743,087

Changes from other

contributions by owners 119,872,221 119,872,221

Other changes in equity -159,558,002 197,826,935 -17,605,274 20,663,659

31.12.2020 903,490,500 119,872,221 5,196,045 -89,451,864 1,098,193,025 64,259,663 2,101,559,590


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Notes to Financial Statements

Note 1 Accounting Policies

General information The consolidated financial statements of Ixellion AS (hereinafter the parent company) for 2020 have been prepared in compliance with the Estonian financial reporting standard. The Estonian financial reporting standard is a body of financial reporting requirements directed at the public and based on the internationally accepted accounting and reporting principles, the principal requirements of which are established by law and which are supplemented by the guidelines issued by the Estonian Accounting Standards Board. The consolidated statements cover the financial indicators of Ixellion AS and subsidiaries thereof, i.e. Ixellion Technologies Ltd and X Technologies Ltd (hereinafter jointly the group). For information about subsidiaries, see Note 5. The financial statements have been prepared in euros.

Preparation of consolidated statements In consolidated statements, all subsidiaries have been consolidated on a line-by-line basis. All the intra-group receivables and liabilities, transactions between group companies and the unrealised profits and losses that have arisen as a result of this have been eliminated. The share of minority shareholders in the results and in the equity of the subsidiaries has been indicated in the consolidated income statement as a separate entry and recognised in the consolidated balance sheet under equity separately from the equity held by the owners of the parent company. The notes to the consolidated financial statements disclose the separate unconsolidated main statements of the consolidating entity (parent company). The main statements of the parent company are prepared following the same accounting policies as applied upon the preparation of the consolidated financial statements with the exception of investments in subsidiaries and associates, which are reported in unconsolidated statements using the acquisition cost method, less write-downs, if any.

Cash Cash in hand and at bank are recognised as cash and cash equivalents in the balance sheet and cash flow statement.

Foreign currency transactions and financial assets and liabilities denominated in foreign currencies Foreign currency transactions are recognised using the official exchange rates quoted by the European Central Bank on the date of the transaction. Monetary assets and liabilities denominated in foreign currencies are revalued in the functional currency on the reporting date on the basis of the exchange rates quoted by the European Central Bank on the reporting date. Exchange gains and losses arising from revaluation are recognised in the income statement of the reporting period. Non-monetary assets and liabilities denominated in foreign currencies, which are measured at fair value, are revalued in the functional currency on the basis of the exchange rates quoted by the European Central Bank on the day when the fair value was determined. Non-monetary assets and liabilities denominated in foreign currencies, which are not recognised using the fair value method (e.g. prepayments, inventories recognised using the acquisition cost method, property, plant and equipment, and intangible assets), are not restated on the reporting date, but continuously recognised on the basis of the exchange rate quoted by the Central Bank on the transaction date.

Financial investments Short-term and long-term financial investments in shares and other equity instruments (excl. holdings in subsidiaries) are recognised at fair value if this can be reliably measured. Changes in the fair value are recognised in the income statement. Shares and other equity instruments that are not publicly traded and the fair value of which cannot be reliably measured are recognised using the acquisition cost method (i.e. acquisition cost less write-downs, if any). Impairment of financial assets

Financial assets or groups of financial assets recognised using the acquisition cost or adjusted acquisition cost method are checked for signs of impairment on every reporting date. If there are such signs, the financial assets recognised at adjusted acquisition cost are


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written down to the present value of the expected future payments to be received from the financial assets (as discounted using the effective interest rate fixed upon the first recognition of the financial asset), and financial assets recognised at acquisition cost are written down to the amount reasonably receivable if the financial asset were to be sold as of the reporting date. Write-downs arising from the impairment are recognised in the income statement as expenses.

Shares of subsidiaries and associates A subsidiary is deemed to be any company that is under the dominant influence of another company (parent company). Dominant influence is presumed if the parent company holds, either directly or through subsidiaries, more than 50% of the voting rights of the subsidiary, except for the exceptional cases where it is possible to clearly prove that the voting rights do not entail dominant influence. Dominant influence also exists if the parent company holds 50% or less of the voting rights in the subsidiary.


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Investments in subsidiaries are recognised pursuant to the acquisition cost method.

An investment is initially recognised at its acquisition cost, which is the fair value of the consideration payable and expenses directly attributable to acquisition. Pursuant to the acquisition cost method, the initial acquisition cost is adjusted in subsequent periods with the write-downs arising from the impairment of the investment, if necessary. Assessments are performed on every balance sheet date to ascertain whether there are any indications that the recoverable amount of an investment may have fallen to below its book value.

Receivables and prepayments All the receivables, incl. trade receivables, accrued income, loans receivable, deposits and other short-term and long-term receivables are recognised at the adjusted acquisition cost. The adjusted acquisition cost of short-term receivables is generally equal to their nominal value (less any possible write-downs), due to which short-term receivables are recognised in the balance sheet in the amounts that are likely to be received.

Inventories Inventories are initially recognised at their acquisition cost, which consists of purchase costs, production costs and other costs incurred in bringing the inventories to their present location and condition. Inventories are expensed using the FIFO method.

Inventories are recognised in the balance sheet at the lower of their acquisition cost or net realisable value. Net realisable value is the estimated selling price of a product in the course of ordinary business activities less the estimated costs incurred in preparing the product for sales and completing the sales.

Property, plant and equipment and intangible assets Property, plant and equipment are initially registered at their acquisition cost, which consists of the purchase price and expenses directly attributable to acquisition incurred in bringing the assets to their operating condition and location. Property, plant and equipment are recognised in the balance sheet at their acquisition cost less accumulated depreciation and write-downs resulting from impairment, if any. Depreciation is calculated using the straight-line method. Depreciation rates are established separately for each item of non-current assets on the basis of their useful lives.

Intangible assets are initially registered at their acquisition cost, which consists of the purchase price and expenses directly attributable to acquisition. Intangible assets are recognised in the balance sheet at their acquisition cost less accumulated depreciation and write-downs resulting from impairment, if any. Depreciation is calculated using the unit of production method. Depreciation rates are established separately for each item of intangible assets on the basis of its useful life. If the useful life of the intangible assets cannot be reliably determined, it is presumed that the useful life is 10 years. Threshold for recognition of non-current assets EUR 1,000

Useful life by non-current asset groups (in years)

Name of group of non-current assets Useful life

Means of transport 3 years

Computers and computer systems 2 years

Other property, plant and equipment 2 years

Financial liabilities

All financial liabilities (trade creditors, loans raised, accrued expenses, bonds issued and other current and long-term payables, except for derivatives) are recognised at the adjusted acquisition cost. The adjusted acquisition cost of short-term financial liabilities is generally equal to their nominal value, due to which short-term financial liabilities are recognised in the balance sheet in the amounts subject to payment. In order to calculate the adjusted acquisition cost of long-term financial liabilities, they are initially recognised at the fair value of the amounts received (less any transaction costs), considering the interest expenses to be incurred on the liabilities in future periods, using the effective interest method. A financial liability is classified as short-term if its term of payment is within twelve months of the reporting date, or if the company does not have the unconditional right to defer the payment by more than twelve months after the reporting date, or if the lender had the right to recall the financial liability as of the reporting date due to violation of the conditions provided in the loan agreement.


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Revenue Revenue is recognised at the fair value of the amounts received or to be received, considering the discounts prescribed in an agreement.

Revenue from sales of goods is recognised when all the essential risks relating to the ownership have passed from the seller to the purchaser, the sales revenue and the expenses relating to the transaction can be reliably established and the proceeds arising from the transaction are likely to be collected.


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Taxation

In accordance with the Income Tax Act in force in Estonia, corporate earnings are not subject to tax in Estonia. Income tax is paid on dividends, fringe benefits, gifts, donations, reception costs, disbursements not attributable to business and adjustments of transfer prices. The tax rate applied to profit distributed as dividends from 1 January 2015 is 20/80 of the net amount to be paid out. In accordance with subsection 4 (5) and section 501 of the Income Tax Act, from 1 January 2019 regularly payable dividends are subject to a lower tax rate of 14%, i.e. 14/86 of the net amount of dividends. Therefore, upon paying income tax on dividends, a resident company can apply a lower tax rate of 14/86 and the standard rate of 20/80. Companies located in Great Britain and foreign companies with a branch or permanent establishment in the UK must pay corporate income tax on taxable income. Taxable income comprises profit from principal activity, investments and sales of assets. A UK limited liability company (i.e. Limited Company, Limited or Ltd, and, in the event of publicly listed shares, public limited company or PLC) pays corporate income tax on profit in the UK and abroad. A foreign company that has a permanent establishment or branch in the UK pays corporate income tax on its activities carried out in the UK.

Related parties A related party is a person or a company that is related to the group to such an extent that the transactions between them might not be concluded under market conditions. A person or a close family member of such a person (i.e. a family member in the event of whom significant influence may be assumed, e.g. spouse, cohabiting partner or child) is related to the group if the person: (a) is a member of the management board of the group or of its parent company (i.e. a person who is authorised to plan and manage the activities of the company and who is responsible for this); or (b) exercises dominant or partial influence over the group. The group is related to another company if one or several of the following conditions applies/apply: (a) the other company and the group are under joint dominant influence (i.e. they are either members of the same group or controlled by the same person (or a close family member of the person)); (b) one company is under the dominant influence of a company of a third party (that may be both a company or an individual) and the other company is under the significant influence of this third party (or the individual or their close family member if the third party is an individual); (c) the other company has dominant or significant influence over the group; (d) the other company is under the dominant or significant influence of the group; (e) other companies that are under the dominant or significant influence of a member of the management of the group’s parent company (or their close family members); (f) other companies whose management includes persons (or their close family members) who have dominant or significant influence over the group.

Note 2 Short-term Financial Investments (EUR)

Total

Bonds Other

31.12.2018 624,781,841 183,780,646 808,562,487

Profit (loss) from sales

and revaluation 0 4,108 4,108

Other -624,781,841 -183,741,844 -808,523,685

31.12.2019 0 42,910 42,910

Recognised at fair value 0 42,910 42,910

Sales at selling price or

redemption 0 -43,073 -43,073

Profit (loss) from sales

and revaluation 0 163 163

31.12.2020 0 0 0

In 2019, item “Other” comprises the acquisition cost of bonds and other financial investments sold in an amount of EUR 808,523,685.


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Other short-term financial investments include gold coins and a wrist watch acquired by the company, which have been sold in 2020.

Note 3 Receivables and Prepayments (EUR)

31.12.2020 Division by remaining terms

Within 12 months Within 1–5 years

Trade receivables 72,937,252 72,937,252

Accounts receivable 127,609,891 127,609,891

Doubtful receivables -54,672,639 -54,672,639

Receivables from related

parties 29,345,694 2,627,671 26,718,023

Prepaid and deferred

taxes 9,368 9,368

Other receivables 166,382 10,191 156,191

Loans receivable 10,000 10,000 0

Interest receivable 156,382 191 156,191

Other receivables 189,823 189,823

Doubtful receivables -167,352 -167,352

Total receivables and prepayments

102,481,167 75,606,953 26,874,214

31.12.2019 Division by remaining terms

Within 12 months Within 1–5 years

Receivables from related

parties 27,836,641 1,118,618 26,718,023

Prepaid and deferred

taxes 4,074 4,074

Other receivables 132,311 10,141 122,170

Loans receivable 129,200 10,000 119,200

Interest receivable 3,111 141 2,970

Other receivables 886,360,920 886,360,920 Doubtful receivables -886,379,509 -886,379,509

Total receivables and prepayments

27,954,437 1,114,244 26,840,193

Loans in the amount of EUR 10,000 have been granted to a related party with a repayment term until 15 December 2020 and an

interest rate of 0.5%. Interest is paid with the loan at the end of the loan period.

Receivables from related parties include a receivable from a related party arising from the sales of shares of subsidiary Ixellion

Technologies OÜ, which has been recognised as a long-term receivable. The shares of Ixellion Technologies OÜ were sold at a selling

price in the amount of EUR 30,980,000. The receivable has been secured by a pledge and, in addition, the shares buy-back option and


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personal liability agreement in an amount of EUR 30,980,000 has been entered into with the related party. The pledged object consists

of all the shares of Ixellion Technologies OÜ held by the related party after the sales transaction. A receivable from the related party has

been written down in the balance sheet in the write-down amount of the value of the pledged object of EUR 4,261,977. The receivable

from the related party has been recognised in the balance sheet in the amount of EUR 26,719,314. The deadline of the receivable is

28 June 2022 and the interest rate is 0.5% a year.

Pledge terms:

- the pledge is valid until the full receipt of the receivable;

- Ixellion AS has the right to receive dividends paid by Ixellion Technologies OÜ. The receivable is reduced by the amount of dividends paid;

- Ixellion AS has the right to recover the shares of Ixellion Technologies OÜ if the receivable is not received.

Note 4 Inventories (EUR)

31.12.2020 31.12.2019

Goods for resale 2,027,144,179 1,767,548,909

Total inventories 2,027,144,179 1,767,548,909

Goods for resale consist of nickel wire with a purity of 99.82% and average constant diameter of 0.025 mm.

Note 5 Shares of Subsidiaries (EUR)

Shares of subsidiaries, general information

Registry code of subsidiary

Name of subsidiary Country of incorporation

Principal activity Holding (%)

31.12.2019 31.12.2020

9322496 Ixellion Technologies Ltd Great Britain Manufacture of electrical

and electronic equipment 93.76 93.76

10709759 X Technologies Ltd Great Britain Manufacture of electrical

and electronic equipment 100 100

Shares of subsidiaries, detailed information

Name of subsidiary 31.12.2019 Other changes 31.12.2020

Ixellion Technologies Ltd 906,603,197 -43,180,897 863,422,300

X Technologies Ltd 741,733,250 -30,125,790 711,607,460

Total shares of subsidiaries, at the end of last period 1,648,336,447 -73,306,687 1,575,029,760


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Note 6 Loans Payable

(EUR)

31.12.2020 Division by remaining terms Interest rate Underlying currency

Maturity

Within 12 months

Within 1–5 years

Over 5 years

Long-term loans G.U.S. INVESTMENTS

OÜ 150,317 150,317 0 1.5% EUR 31.12.2021

Total long-term loans 150,317 150,317 0

Total loans payable 150,317 150,317 0 31.12.2019 Division by remaining terms Interest rate Underlying

currency

Maturity

Within 12 months

Within 1–5 years

Over 5 years

Long-term loans G.U.S. INVESTMENTS

OÜ 353,344 0 353,344 1.50% EUR 31.12.2021

Total long-term loans 353,344 0 353,344

Total loans payable 353,344 0 353,344

Note 7 Payables and Prepayments (EUR)

31.12.2020 Within 12 months

Trade creditors 115,831 115,831

Employee-related liabilities 195,784 195,784

Taxes payable 17,473 17,473

Other payables 9,395 9,395

Interest payable 9,395 9,395

Payables to related parties 75,413,117 75,413,117

Other payables 1,959,734 1,959,734

Total payables and prepayments 77,711,334 77,711,334

31.12.2019 Within 12 months

Trade creditors 16,386 16,386

Employee-related liabilities 39,145 39,145

Taxes payable 1,767,970 1,767,970


Interest payable 4,848 4,848

Payables to related parties 722,985,824 722,985,824


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Total payables and prepayments 725,052,307 725,052,307

Note 8 Sales Revenue (EUR)

2020

Sales revenue by geographical region Sales to European Union Member States

Germany 127,569,491

Total sales to European Union Member States 127,569,491

Total sales revenue 127,569,491

Sales revenue by field of activity Sales of nickel wire 127,569,491

Total sales revenue 127,569,491

Note 9 Other Operating Revenue (EUR)

2020 2019

Profit from sales of property, plant and equipment 34,000 0

Other 838,688,364 1,709

Total other operating revenue 838,722,364 1,709

Item "Other" includes receipt of a receivable of a subsidiary, which was deemed as a doubtful receivable in 2018.

Note 10 Goods, Raw Materials and Services (EUR)

2020

Goods for resale 72,865,281

Total goods, raw materials and services 72,865,281

Note 11 Staff Costs (EUR)

2020 2019

Wages and salaries 557,029 142,152

Social tax 174,146 30,855

Additional remuneration and bonuses 2,000,000 0

Total staff costs 2,731,175 173,007


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Average number of employees in full-time equivalent units 5 3

Average number of employees by types of labour Member of managing or controlling body of legal person 5

3

Note 12 Profit (Loss) from Financial Investments (EUR)

2020 2019

Profit on sales of financial investment 163 0

Valuation of long-term financial investments 0 4,352,956

Profit from sales of long-term financial investment 0 1,500,000

Total profit (loss) from financial investments 163 5,852,956

Note 13 Other Financial Income and Expenses (EUR)

2020 2019

Profit (loss) from exchange rate movements 5,407,212 -2,207,231

Profit from sales of subsidiary 0 4,261,977

Total other financial income and expenses 5,407,212 2,054,746

Note 14 Related Parties (EUR)

Name of accounting entity’s parent company G.U.S. INVESTMENTS OÜ

Country where accounting entity’s parent company has been

registered

Estonia

Balances with related parties by group

31.12.2020 31.12.2019

Receivables Liabilities Receivables Liabilities

Parent company 675,977 18,394,195

Executive and senior management

and major shareholders being

private individuals and companies

under their dominant or significant

influence

32,308,926 73,393,326 32,230,929 703,449,821

Loans

2020 Repayments of loans granted

Interest received

Repayments of loans raised

Interest rate Underlying currency

Maturity


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Parent company G.U.S. INVESTMENTS OÜ 203,027 1.5% EUR 31.12.2021

Executive and senior management and

major shareholders being private

individuals and companies under their

dominant or significant influence

Cristhal Consulting OÜ 19,200 349 0.5% EUR 15.03.2022

Cristhal Consulting OÜ 100,000 1,778 0.5% EUR 15.12.2021

2019 Loans raised Interest rate Underlying currency

Maturity

Parent company G.U.S. INVESTMENTS OÜ 108,200 1.5% EUR 31.12.2021

Purchases and sales of goods and services

2020 2019

Purchases of goods and services

Sales of goods and services

Purchases of goods and services

Sales of goods and services

Parent company 4,546 43,073 4,414 Executive and senior management

and major shareholders being

private individuals and companies

under their dominant or significant

influence

72,896,852 155,398 646

Purchases and sales of non-current assets

2020

Non-current assets sold

Executive and senior

management and major

shareholders being private

individuals and companies

under their dominant or

significant influence

32,000

Remuneration and other significant benefits for executive and senior management

2020 2019

Remuneration calculated 731,175 173,007

Bonus 2,000,000 0

The remuneration calculated for the management has been indicated with social tax.

The company has purchased goods for EUR 72,896,852 and financial services for EUR 4,546 from related parties.

Goods for EUR 43,073, financial services for EUR 155,398 and non-current assets for EUR 32,000 have been sold to related parties

during the financial year.


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In addition, the company has received inventories in the value of EUR 101,000,000 (nickel wire with a purity of 99.82% and average

constant diameter of 0.025 mm) from the parent company by way of a non-monetary contribution. The total non-monetary contribution of

the parent company amounts to EUR 119,872,221.

Note 15 Events after Reporting Date A claim in an amount of EUR 55,652.37 was filed against the subsidiary of Ixellion AS on 9 January 2020. According to the confirmation

of the legal adviser, the next court session is scheduled for 29 June 2021 in an Italian court.

A claim in an amount of EUR 96,573.93 was filed against the subsidiary of Ixellion AS on 13 January 2020. According to the

confirmation of the legal adviser, the parties have made an agreement on 10 March 2021, on the basis of which the subsidiary of Ixellion

AS will pay EUR 50,000, and thereby the claim will be satisfied.

Note 16 Unconsolidated Balance Sheet (EUR)

31.12.2020 31.12.2019

Assets Current assets

Cash 12,826 12,402

Financial investments 0 42,910

Receivables and prepayments 75,704,532 2,703,928

Inventories 369,599,993 283,827,247

Total current assets 445,317,351 286,586,487

Non-current assets Investments in subsidiaries and associates 1,575,029,760 1,648,336,448

Receivables and prepayments 26,932,892 26,901,316

Property, plant and equipment 8,682 12,361

Intangible assets 628,532 628,532

Total non-current assets 1,602,599,866 1,675,878,657

Total assets 2,047,917,217 1,962,465,144

Liabilities and equity Liabilities

Current liabilities Loans payable 150,317 0

Payables and prepayments 75,711,241 64,027,107

Total current liabilities 75,861,558 64,027,107

Long-term liabilities Loans payable 0 353,344

Total long-term liabilities 0 353,344

Total liabilities 75,861,558 64,380,451

Equity Share capital at nominal value 903,490,500 903,490,500

Unregistered share capital 119,872,221 0

Issue premium 5,196,045 5,196,045


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Retained earnings (loss) 989,398,148 921,462,268

Profit (loss) for financial year -45,901,255 67,935,880

Total equity 1,972,055,659 1,898,084,693

Total liabilities and equity 2,047,917,217 1,962,465,144


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Note 17 Unconsolidated Income Statement (EUR)

2020 2019

Sales revenue 127,569,491 0

Other operating revenue 30,589,893 1,709

Goods, raw materials and services -72,865,281 0

Other operating expenses -617,372 -172,305

Staff costs -2,713,360 -124,355

Depreciation and impairment of non-current assets -11,379 -39,680

Substantial write-downs of current assets -54,692,637 -4,277,992

Other operating charges -2,867 -3,229,819

Total operating profit (loss) 27,256,488 -7,842,442

Profit (loss) from subsidiaries -73,306,688 74,276,034

Profit (loss) from financial investments 163 1,500,000

Interest income 156,609 2,595

Interest expenses -4,546 -4,414

Other financial income and expenses -3,281 4,107

Profit (loss) before income tax -45,901,255 67,935,880

Profit (loss) for financial year -45,901,255 67,935,880


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Note 18 Unconsolidated Cash Flow Statement (EUR)

2020 2019

Cash flow from operating activities Operating profit (loss) 27,256,488 -7,842,442

Adjustments Depreciation and impairment of non-current assets 11,379 39,680

Profit (loss) from sales of non-current assets -34,000 0

Other adjustments 119,872,221 -282,036,552

Total adjustments 119,849,600 -281,996,872

Change in receivables and prepayments related to

operating activities

-73,126,132 243,616,924

Change in inventories -85,772,746 0

Change in payables and prepayments related to operating

activities

11,793,214 46,099,277

Total cash flow from operating activities 424 -123,113

Cash flow from investing activities Loans granted 0 -29,500

Repayments of loans granted 0 20,000

Total cash flow from investing activities 0 -9,500

Cash flow from financing activities Loans raised 0 108,200

Total cash flow from financing activities 0 108,200

Total cash flow 424 -24,413

Cash and cash equivalents at beginning of period 12,402 36,815

Change in cash and cash equivalents 424 -24,413

Cash and cash equivalents at end of period 12,826 12,402


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Note 19 Unconsolidated Statement of Changes in Equity (EUR)

Total

Share capital at

nominal value

Unregistered share

capital

Issue premium Retained earnings

(loss)

31.12.2018 903,490,500 0 5,196,045 921,462,268 1,830,148,813


year 67,935,880 67,935,880

31.12.2019 903,490,500 0 5,196,045 989,398,148 1,898,084,693

Book value of holdings

under dominant and


-1,648,336,448 -1,648,336,448

Value of holdings under

dominant and significant

influence calculated by the

equity method

870,532,378 870,532,378

Adjusted unconsolidated equity as of 31.12.2019

903,490,500 0 5,196,045 211,594,078 1,120,280,623


year -45,901,255 -45,901,255

Changes from other

contributions by owners 119,872,221 119,872,221

31.12.2020 903,490,500 119,872,221 5,196,045 943,496,893 1,972,055,659

Book value of holdings

under dominant and


-1,575,029,760 -1,575,029,760

Value of holdings under

dominant and significant

influence calculated by the

equity method

1,704,533,691 1,704,533,691

Adjusted unconsolidated equity as of 31.12.2020

903,490,500 119,872,221 5,196,045 1,073,000,824 2,101,559,590

Note 20 Non-monetary Transactions in Cash Flow Statement The following non-monetary transactions (EUR) have been reported under other adjustments in the cash flow statement.

2020 Amount

Non-monetary contribution to share capital 119,872,221

Exchange rate differences in share capital of subsidiaries -159,558,002

Exchange rate movements 198,167,689

Minority interest -17,605,275

TOTAL 140,876,633


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2019 Amount

Sales of other financial investment 808,523,685

Sales of subsidiary 4,261,977

Adjustment of loan receivable of subsidiary sold -10,000

Exchange rate movements, incl. opening balances 42,491,735

Valuation of financial investment 4,348,848

Profit from sales of other financial investment 1,500,000

TOTAL 861,116,245

Note 21 Impact of Coronavirus We have assessed the current impact of the coronavirus (COVID-19) pandemic on the company. We have considered the impact of the

pandemic upon determining the values of assets and liabilities in the financial statements.

We have also evaluated the potential future impact thereof on the company and, where relevant, disclosed the respective information in

the financial statements that describe the effects recorded by the date of the financial statements and our estimate of the future impact

thereof on the company, including on its financial performance after the balance sheet date.

To sum up, the company’s ability to quickly adapt to the situation and provide a flexible response is of crucial importance. The company

is constantly monitoring the changing threat assessments and is engaged in the analysis of the effects of the virus on an ongoing basis.

The management of the company assesses that the economic changes arising from the virus do not have a considerable impact on the

going-concern basis of the company.


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INDEPENDENT SWORN AUDITOR’S REPORT To the shareholders of Ixellion AS

Opinion

We have audited the consolidated financial statements of Ixellion AS and its subsidiaries (the Group), which comprise the consolidated balance sheet as of 31 December 2020, and the consolidated income statement, consolidated cash flow statement and consolidated statement of changes in equity for the year then ended, and notes to the consolidated financial statements, including a summary of significant accounting policies.

In our opinion, the accompanying consolidated financial statements present fairly, in all material respects, the consolidated financial position of the Group as of 31 December 2020, and its consolidated financial performance and its consolidated cash flow for the year then ended in accordance with the Estonian financial reporting standard.

Basis for Opinion

We conducted our audit in accordance with International Standards on Auditing (Estonia). Our responsibilities under those standards are further described in the Sworn Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report. We are independent of the Group in accordance with Code of Ethics for Professional Accountants (Estonia) (including Independence Standards), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Other Information

The management is responsible for the other information. The other information comprises the management report, but does not include the consolidated financial statements and our sworn auditor’s report thereon.

Our opinion on the consolidated financial statements does not cover the other information and we do not express any form of assurance conclusion thereon.

In connection with our audit of the consolidated financial statements, our responsibility is to read the other information and, in doing so, consider whether the other information is materially inconsistent with the consolidated financial statements or our knowledge obtained in the audit or otherwise appears to be materially misstated.

If, based on the work we have performed, we conclude that there is a material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard.

Responsibilities of the Management and Those Charged with Governance for the Consolidated Financial Statements

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

In preparing the consolidated financial statements, the management is responsible for assessing the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so.

Those charged with governance are responsible for overseeing the Group’s financial reporting process.

Sworn Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements

Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue a sworn auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with International Standards on Auditing (Estonia) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.

As part of an audit in accordance with International Standards on Auditing (Estonia), we exercise professional judgment and maintain professional scepticism throughout the audit. We also:

- identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control; - obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group’s internal control; - evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by the management;


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- conclude 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 Group’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our sworn 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 sworn auditor’s report. However, future events or conditions may cause the Group to cease to continue as a going concern; - evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation; - obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

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

/digitally signed/ Krista Vainola Sworn Auditor number 444 Audiitorkontroll OÜ Audit firm’s activity licence number 274 Mõisa 4-2, Tallinn, Harju County, 13522 12 May 2021

IXEN-AR-2020 Consolidated Audited Annual Report

Documents

Transcript of IXEN-AR-2020 Consolidated Audited Annual Report