NX Filtration N.V.

Annual Report

2024

Contents

2024 at a glance 4

About NX Filtration 6

Report of the Management Board 8

Business review 10

Sustainability report 16

2024 month by month 34

Financial Performance 40

Risks and Uncertainties 44

Corporate governance 70

Report of the Supervisory Board 84

Financial statements 102

Consolidated financial statements 104

Company financial statements 140

Other information 150

Provision in the Articles of Association relating

to profit appropriation

152

Independent auditor’s report 154

3NX Filtration - Annual Report2 Contents

2024

at a glance

€11.1 million

total income

61%

gross margin

457 billion

liters of clean

water enabled

Revenue growth of 38% versus 2023 -

driven by the global industrial slowdown,

and longer lead times in Europe and

North America, this was lower

than originally expected

Positive momentum around water

scarcity and water quality as key

drivers for our technology in the

years to come

Growing traction with OEM customer base

and a very good visibility on future projects

Excellent technology position, underscored

by a sustained high gross margin

Successful start-up of our new

large-scale factory

Strong leadership additions

for next stages of growth

Raised new capital providing sufficient headroom

to fund our growth ambitions well into the future

B Corp certified, joining a global movement that

pursues a sustainable purpose alongside profit

5NX Filtration - Annual Report4 2024 at a glance

About NX Filtration

NX Filtration is a provider of membrane technology

for producing pure and affordable water to improve

quality of life. Its hollow fiber nanofiltration (HFNF)

technology removes micropollutants (including

pharmaceuticals, medicines, PFAS and insecticides),

color and selective salts, but also bacteria, viruses

and nanoplastics, from water whilst offering

strong sustainability benefits. NX Filtration sells

its filtration membrane modules in its two business

lines: Clean Municipal Water and Sustainable

Industrial Water.

Business lines

Clean Municipal Water

In its Clean Municipal Water business line, NX

Filtration’s membrane technology enables its

customers to produce high quality water from

surface water, or from municipal waste water,

by removing, amongst others, micropollutants,

nanoplastics and medicine residues, to treat

municipal wastewater streams to prevent

discharge of polluting substances in the envi-

ronment, and to reuse treated wastewater for

purposes that also include the production of

drinking water.

Sustainable Industrial Water

In its Sustainable Industrial Water business line,

NX Filtration’s membrane technology enables

its customers to treat surface or well water to

optimize quality and characteristics for process

water, prevent discharge of polluting waste-

water and reuse wastewater for industrial

processes and recover, and recycle valuable raw

materials from wastewater streams, such as

indigo in the textile industry or cleaning chemi-

cals in beer breweries.

Commercialisation strategy

NX Filtration’s scalable commercial model is based on establishing relationships with original equip-

ment manufacturers (OEMs), who are responsible for the design and delivery of the overall filtration

system at the end-users facilities. To facilitate this process, from technology adoption to project

realization, NX Filtration supports these OEMs with various tools, amongst which a large fleet of pilot

systems (mobile units that are typically deployed at customers’ sites to test water treatment perfor-

mance, or to establish optimal process parameters and conditions for a full-scale plant). Once these

OEM customers have worked with NX Filtration’s membrane technology, they become an important

element in the further commercial rollout of NX Filtration’s products, leading to repeat orders from

existing clients, and periodic module replacements at existing plants.

Equivalent to direct nanofiltration (dNF)

7NX Filtration - Annual Report6 About NX Filtration

Report of the

Management

Board

9NX Filtration - Annual Report8 Report of the Management Board

Business review

by 2030 if no action is taken. To combat water

scarcity, the European Parliament voted in April

2024 to introduce new EU rules for wider reuse

of treated urban wastewater. The new rules

for, among other things, removing micro-pollut

ants underline the need for new technologies.

Also outside Europe, we observe strong trends

around freshwater conservation and innova

tive wastewater reuse solutions, particularly in

regions confronted with droughts and growing

water consumption. The trend of wastewater

reuse is reflected in NX Filtration’s customer

base, for instance with the sale of our hollow

fiber nanofiltration membranes for indirect

potable water reuse in Mexico.

Water reuse is not only at the top of the

agenda of water treatment companies, water

scarcity is also forcing industrial companies,

particularly those in water-intensive industries,

like the beverage and high-tech sectors, to set

up strategies that reduce the risk of water sup-

ply issues and to become more self-sufficient.

But contingency is not the only driver, a growing

number of companies are demonstrating true

water stewardship. This is driving the need for

sustainable practices that offer opportunities

for hollow fiber nanofiltration to make existing

water treatment methods more sustainable.

In the field of water quality, governments

around the world are adapting legislation to

ensure water quality. With globally increasing

concerns about PFAS levels in water, we expect

stricter regulations for drinking water and

wastewater discharge around the globe in the

coming years.

Commercial roll-out

In 2024 we delivered our HFNF modules for

14 full-scale projects, of which 7 were repeat

orders from customers who had already worked

with NX Filtration before. In 2024, NX Filtration

received an additional 6 replacement orders for

projects we delivered a first set of membrane

modules in the past years.

One of our medium-term objectives at the time

of our IPO related to growing to approximately

200 pilots per year, which we already achieved

in 2023. As we further mature, and our OEMs

become increasingly familiar with our technol

ogy, we expect this number to stabilize going

forward. During 2024, NX Filtration initiated

207 pilot projects, approximately equal to the

number of pilot projects initiated in 2023 (209).

Also our fleet of pilot systems remained con

stant at 190 systems as per 31 December 2024.

We see increasing activity of OEMs and partners

to deploy their own pilots, therewith shifting our

focus from expanding our pilot fleet towards

optimal deployment for near, medium and long-

term commercial opportunities.

As our pilot program further matures, we are

also becoming more confident about the success

rate of our pilots. Since 2020, we have initiated

697 pilot projects. Of these, 92 have already

converted in a demo or full-scale project. The

vast majority of the initiated pilot projects are

either still running, have been extended into a

more extensive larger pilot project, or have been

concluded successfully but are still in the pro

cess of decision making, financing, permitting or

engineering. We estimate that less than 25% of

In 2024 we continued to work on our

mission ‘clean and affordable water for

all’, whilst offering strong sustainability

benefits to our customers and providing

an inspiring working environment for

our employees. During 2024, we put sev

eral important building blocks in place

that facilitate and enable the growth

journey ahead of us:

• We completed the construction of our new

large scale factory in Hengelo, the Nether-

lands, making our operations ready to scale

and enabling further efficiencies in our

operations, amongst others by integrating

our previous production locations into this

new facility;

• We gained increasing commercial traction

with our OEM customers and benefit from

a pipeline of future projects that grows in

size and maturity, providing increased visi-

bility both for the short and longer term;

• We strengthened our leadership team with

a new CEO and CFO, supporting the next

stage of growth for NX Filtration; and

• We raised new capital providing sufficient

headroom to fund our growth ambitions

well into the future.

2024 total revenues were €11.1 million, repre-

senting a growth of 38% compared to 2023.

This was lower than originally expected, reflect-

ing the evolving timelines associated with con-

verting pilot projects into full scale projects and

customers’ project realization schedules. These

were particularly impacted by the global indus-

trial slowdown, and longer lead times in Europe

and North America. At the same time, the

underlying drivers for our business are stron-

ger than ever and NX Filtration’s longer term

outlook is unchanged: the market is developing

very favorably, our pipeline continues to grow,

and we experience great traction with major

global water companies that are clearly enter-

ing the next stage of roll-out of our technology.

Our strong technology position is underscored

by a sustained high gross margin and a continu-

ation of repeat orders from existing partners.

Market developments

Water scarcity and water quality remain key

drivers for positive market development for

hollow fiber nanofiltration in the years to come.

According to the United Nations, global de

mand for freshwater will exceed supply by 40%

Floris Jan Cuypers

CEO

Jan Feie Zwiers

CFO

Michiel Staatsen

COO

Erik Roesink

Founder and CTO

11NX Filtration - Annual Report10 Business review

As communicated before, we are moving our

entire operations into this new facility, in order

to enable further efficiencies and optimizations

in our operations. In July 2024 we already com-

pleted the transfer of our former module pro-

duction operations from our previous location

at the Josink Esweg in Enschede, the

Netherlands. Preparations for the transfer of

our former membrane production location at

the Institutenweg in Enschede are well under

way. This transfer is expected to be fully final-

ized during the first quarter of 2025.

Outlook

In recent years we have put strong building

blocks in place for the growth journey ahead of

us, amongst others related to our solid technol

ogy, expanded production capacity, strong ESG

framework, our global sales organization, and

our growing pipeline of commercial opportuni

ties. Based on these building blocks, we have set

clear priorities for 2025 that we will drive with

full dedication.

First and foremost, we will continue our existing

approach in developing OEM relationships and

converting project opportunities in orders, and

build on existing OEM relationships for repeat

orders. Based on the learnings from prior years

we are further pursuing our commercial focus

towards high-yielding product-market combina

tions.

In the context of the delayed roll-out of our

business plan we have taken cost control mea

sures without impacting our longer term growth

ambitions, that are unchanged. We are proac

tively aligning our cost levels to the timing of

realizing our growth, therewith controlling our

path towards break-even operations. We expect

our current cash position (€53.4 million at the

end of 2024), to be sufficient to fund our growth

ambitions well into the future.

For 2025 we target a growth of total revenues

in the range of 50% to 70%. We are reiterating

our longer-term objectives on revenue growth

and profitability. In the Capital Markets Day on

8 April 2025, we will provide further background

to, amongst others, market developments, our

commercial strategy, the strong progress we

are making in developing our pipeline of OEM

customers, our continued growth prospects

for the medium- and longer term, and our path

towards break-even operations.

Management Board

Floris Jan Jan Feie Michiel Erik

Cuypers Zwiers Staatsen Roesink

CEO CFO COO CTO

the commercial pilot projects we initiated are no

longer associated with a potential future proj

ect. This predominantly relates to pilot projects

with our smaller Mexplorer pilot systems, and

is in most cases caused by the project no longer

being pursued by the customer (for example

because of budget reasons), and in a limited

number of cases by our technology not being se

lected as preferred option for the related project

opportunity (for example because of risk averse

ness to work with a new technology or because

of very specific treatment requirements outside

the direct scope of our products).

Over the years we have obtained valuable

insights from the deployment of our fleet of

pilot systems, such as sweetspot product-mar-

ket combinations for our technology. We are

increasingly using these insights to optimize the

way we channel OEMs through various phases

towards the realization of a full-scale project.

In the Capital Markets Day that we will host on

8 April 2025, we will provide further insights in

our growing pipeline of OEM partners, and how

we work with them from early stages towards

project realization.

Sustainability and ESG impact

Sustainability and a clear Environmental, Social

and Governance (ESG) agenda are at the heart

of NX Filtration’s business. We passionately

believe we have a responsibility to contribute

positively to society and the environment. We

have externally certified science-based CO

reduction targets, we are part of the United

Nations Global Compact initiative, and have a

formal ESG Committee comprised of the two

independent Supervisory Board members to

formalize governance and oversight responsibili

ties with regard to sustainability, environmental,

social, corporate governance and human capital

matters. We are truly honored that NX Filtra

tion joined the global B Corp community in 2024

alongside other companies aiming to transform

business into a force for good.

We have developed a targeted ESG framework

in which we address and monitor our impact

along three pillars:

1. Clean water for all: Our 2024 membrane

sales can enable the production of 457

billion liters of clean water

, enabling access

to clean water across 38 countries.

2. Avoiding emissions at our customers:

With our membrane module sales in 2024,

we enabled 4,300 ton CO

e savings during

the deployment lifetime of our modules, by

avoiding the use of 8.0 million kg of chem-

icals and saving 98 GWh energy compared

to conventional technologies.

3. Our internal initiatives: We have imple-

mented various sustainability measures

and initiatives around ESG related themes

in our own operations, for our employees

and our partners.

In our Sustainability Report, that forms part

of this Annual Report, we further elaborate on

these and other ESG related aspects.

New factory

We are proud that in 2024 we have successfully

started-up our new largescale factory for the

production of our membrane modules accord-

ing to schedule and within the anticipated

Capex budget. ESG is strongly embedded in

the design of this factory, with more than 1,350

solar panels for electricity generation, a unique

peer-to-peer heat exchange system with neigh-

boring datacenter Previder, an extensive heat

energy management and reuse system, and an

inhouse water treatment facility.

Based on NX Filtration’s sales of approximately 3,800 membrane modules (HFNF and UF only), multiplied by the expected capacity

and lifetime of such modules. See Sustainability Report for details, assumptions and methodologies

13NX Filtration - Annual Report12 Business review

We successfully started-up our

new large-scale factory, paving

the way for future growth

Business review 15NX Filtration - Annual Report14

Sustainability

report

Introduction

Sustainability and ESG are at the heart of NX

Filtration’s business. Our vision is to be a leading

global provider of breakthrough nanofiltration

technology that enables customers to, amongst

others, produce pure and affordable water,

treat wastewater, reduce their water footprint

and achieve strong sustainability benefits.

Water scarcity and water quality are major

global and structural issues and key drivers of

the water market. For example, it is estimated

that 1.1 billion people worldwide lack access

to water, and a total of 2.7 billion people find

water scarce for at least one month of the

year. By the end of 2025, approximately two-

thirds of the world’s population may face

water shortages. In addition, the discharge of

wastewater increasingly poses challenges for

the environment (for example the presence

of antibiotic resistant bacteria resulting in

potential health issues) and for the production

of drinking water (for example increased

requirements on the removal of micropollutants).

NX Filtration’s direct nanofiltration technology

can play a central role in addressing these

issues. Our technology is designed to remove

micropollutants (including pharmaceuticals,

medicines, PFAS and insecticides), colour and

selective salts from water in one single step and

also removes bacteria, viruses and nanoplastics

from polluted fresh water sources. The direct

nanofiltration technology avoids the use of

pretreatment chemicals in the water treatment

process and substantially reduces energy

consumption, so that a competitive operational

costs can be offered to our clients.

At NX Filtration, we believe

we have a responsibility to

contribute positively to society

and the environment. Since

March 2024, we are officially

B Corp certified and joined

a global movement of over

8,400 B Corps that pursue a

sustainable purpose alongside profit. We believe

we have a responsibility to contribute positively

to society and the environment. A B Corp must

meet high, verified standards in terms of social

and environmental impact, accountability and

transparency and the certification is granted

by B Lab. B Lab is the nonprofit network

transforming the global economy to benefit

all people, communities, and the planet. The B

Corp certification addresses the entirety of a

business’ operations and covers five key impact

areas of Governance, Workers, Community,

Environment and Customers. Every three years,

B Corps must recertify to uphold certification.

Becoming a B Corp marks another significant

milestone in advancing our ESG agenda and

demonstrates our commitment to a sustainable

and socially responsible organization. Together

with the global B Corp community we take

collective action to address society’s most

critical challenges.

Additionally, we remain very well on track to

meet our externally certified science-based

reduction targets and we continued

to participate in the United Nations Global

Compact initiative by actively submitting our

Communication of Progress 2024. Our formal

ESG Committee continued with overseeing

matters with regard to sustainability,

environmental, social, corporate governance

and human capital matters. Further reference

is made to the Risks and Uncertainties

paragraph of our Management Board Report

in which we describe our efforts in 2024

on various topics such as code of conduct

compliance, business ethics and human rights.

As used throughout this Annual Report, “ESG”

means Environmental, Social and Governance.

Environmental factors for example include the

contribution NX Filtration makes to climate

change through (the reduction of) greenhouse

gas emissions, along with waste management

and energy efficiency by the use of its products.

Social factors for example include human rights,

labor standards throughout the supply chain,

and more routine issues such as adherence

to workplace health and safety and gender

equality. Governance refers to a set of rules or

principles defining rights, responsibilities and

expectations between different stakeholders in

NX Filtration’s governance.

Alignment with UN Sustainable

Development Goals

To obtain input on material topics on

environmental, social and economic

parameters, NX Filtration performed a broad

stakeholder survey amongst employees,

customers, suppliers, communities and

partners. These material topics formed the

basis for the development of a materiality

matrix and the mapping to the UN SDGs.

Importance for NX Filtration

Importance for stakeholders

Moderate

Carbon

neutrality

Community

involvement

Data security & privacy

Sustainable and responsible supply chain

Energy efficiency of operations

Diversity & equal opportunities

Risk management Hazardous

substances

Partnerships

Resource scarcity

Sustainability of end products

Training & development

Customer

satisfaction

Management of

customer relationship

Employee engagement

Climate change and

water challenges

People & process safety

Business ethics

& integrity

Sustainable innovation

and technology

Product

circularity

High Very high

Moderate High Very high

Environmental

material topics

Social material

topics

Economical

material topics

17NX Filtration - Annual Report16 Sustainability report

The SDGs are guiding NX Filtration’s ESG

agenda, by way of which NX Filtration supports

society. NX Filtration has selected five SDGs

that today form an integral part of NX

Filtration’s strategic framework. The SDGs

that NX Filtration seeks to contribute to are

SDG 6 – Clean water and sanitation, SDG 8

– Decent work and economic growth, SDG 9 –

Industry, innovation and infrastructure, SDG

12 – Responsible consumption and production

and SDG 17 – Partnership for the goals. NX

Filtration has set key performance indicators

(KPIs) for each SDG and is monitoring these

KPIs and initiating improvement actions. These

KPIs are described in the paragraph

NX Filtration’s integrated ESG framework.

ESG Committee

At NX Filtration we have a clear vision to be

among the best-in-class performing ESG

companies, not only in what we do, but also

in how we do it. We have therefore installed

a formal ESG Committee. The purpose of

the ESG Committee is to assist and support

the Management Board and the Supervisory

Board in carrying out its governance and

oversight responsibilities with regard to

sustainability, environmental, social, corporate

governance and other human capital matters.

The members of the ESG Committee are NX

Filtration’s independent Supervisory Board

members Ms C. (Carolina) Wielinga en Mr

B.A.M. (Benno) van Dongen. The installment

of a formal ESG Committee has further

shaped NX Filtration’s ESG agenda and the

broad duties and responsibilities include,

amongst others: (i) monitor, evaluate and

provide guidance on our policies, procedures

and practices with respect to ESG matters;

(ii) review and monitor the development and

implementation of targets, standards, metrics

or methodologies that NX Filtration may

establish from time to time, (iii) oversee our

public disclosure on ESG matters, (iv) review

and monitor initiatives to manage and mitigate

its environmental impact (greenhouse gas

(GHG)- and non-GHG reduction); (v) review and

monitor any significant examination or audit by

external auditors, regulators or key ESG rating

agencies on ESG matters (such as CICERO,

Sustainalytics and B Corporation); (vi) review

and monitor, as appropriate, human capital

initiatives, for example diversity and inclusion

initiatives, employee wellbeing or engagement

initiatives (such as UN Global Compact);

and (vii) review and monitor, as appropriate,

social initiatives and commitments, including,

among others, initiatives related to the field of

education.

The Science Based Targets

initiative (SBTi)

NX Filtration’s CO

reduction targets for Scope

1 and Scope 2 emissions have been officially

validated by the SBTi. By committing to the

SBTi, NX Filtration commits to a 42% decrease

in absolute Scope 1 and 2 emissions by 2030. To

achieve this target, NX Filtration will procure

green electricity, continues to switch to electric

vehicles, and further electrify its operations.

The SBTi defines and promotes best-practices

in setting emission reduction targets and is

considered the most ambitious and reputable

carbon target setting standard globally.

Science-based targets are emissions reduction

targets which are in line with scenarios deemed

necessary by climate scientists to meet the

goals of the Paris Agreement of limiting global

warming to a maximum of 1.5 °C.

Vision

To be a leading global provider of technology for producing pure

and affordable water to improve our quality of life.

Mission

Inspired by our team's passion for membranes we develop and produce

innovative products and solutions, enabling our partners to excel in

membrane filtration applications.

Company values

19NX Filtration - Annual Report18 Sustainability report

EU Taxonomy Objective 1

NX Filtration focuses on the technical screening

criteria for activity 3.6 ‘Manufacture of other

low carbon technologies’: the economic activity

manufactures technologies that are aimed

at and demonstrate substantial life-cycle

GHG emission savings compared to the best

performing alternative.

EU Taxonomy

Introduction

Regulation (EU) 2020/852 (Taxonomy), as

amended, on the establishment of a framework

to facilitate sustainable investment (the

EU Taxonomy Regulation) has introduced

a classification system for environmentally

sustainable economic activities. NX Filtration

is expected to report alignment with the EU

Taxonomy Regulation at the earliest in 2027

over the financial year 2026.

The EU Taxonomy Regulation sets out the four

conditions that an economic activity must

meet in order to qualify as environmentally

sustainable. A qualifying activity must: (i)

contribute substantially to one or more of the

six EU taxonomy environmental objectives,

(ii) not significantly harm any of the other

environmental objectives; (iii) be carried out in

compliance with minimum (social) safeguards

laid down in various principles, and (iv) comply

with technical screening criteria established by

the European Commission.

The environmental objective that NX Filtration

seeks alignment to is climate change

mitigation.

EU Taxonomy Objective 1 - climate change mitigation

Taxonomy requirement:

An economic activity shall qualify as contributing substantially to climate change mitigation

where that activity contributes substantially to the stabilization of greenhouse gas concentra-

tions in the atmosphere at a level consistent with the long-term temperature goal of the Paris

Agreement through the avoidance or reduction of greenhouse gas emissions or the increase of

greenhouse gas removals, including through process innovations or product innovations.

Technical screening and DNSH (do no significant harm) criteria available

NX Filtration’s activities:

The operation of water treatment systems based on NX Filtration’s HFNF membranes require

less energy and therefore realise a significant CO2 footprint reduction compared to water treat-

ment systems based on conventional technologies such as filtration with reverse osmosis (RO),

adsorption (activated carbon) and oxidation. In research by the Energie en Grondstoffenfabriek,

energy consumption of various technologies for producing drinking water in the Netherlands have

been compared. In this research, it can be seen that the gross energy requirements for a system

based on direct nanofiltration are approximately 0.5 kWh/m

, as compared to approximately

1.7 kWh/m

for a combination of ultrafiltration and reverse osmosis.

In addition, NX Filtration’s HFNF solution avoids or significantly reduces the use of chemicals

in operations, as it prevents the use of flocculants and coagulants in pre-treatment (which is

required for traditional filtration processes) and requires a very low cleaning frequency. From

external research by Stockholm university (Rahul Aggarwal, “Strategic Assesment of Drinking

Water Production Systems Environmental impacts from a Life Cycle perspective”, KTH Royal

Institute of Technology, school of architecture and the built environment, Stockholm, Sweden

2020), it can be derived that each HFNF module can avoid approximately 4 tons of chemicals

during a five-year lifetime, that would be required for conventional technologies such as the com-

bination of ultrafiltration and reverse osmosis.

21NX Filtration - Annual Report20 Sustainability report

As part of NX Filtration’s assessment on

the DNSH-criteria, we can report that: (i)

we have assessed that our eligible activities

as such cannot be materially impacted by

physical climate risks, (ii) we are currently not

obliged to identify and address environmental

degradation risks in accordance with Directive

2000/60/EC (as implemented under Dutch

law), (iii) our eligible activities do not lead to

the manufacture, placing on the market or

use of certain substances that would possibly

harm the environment, whether on their own

or in mixtures, and (iv) our sites/operations

are not located in or near biodiversity-sensitive

areas (including the Natura 2000 network of

protected areas, UNESCO World Heritage sites

and Key Biodiversity Areas, as well as other

protected areas). Each of these conclusions

should be monitored over time and in 2024 and

onwards, NX Filtration will particularly focus on

alignment with the DNSH-criteria that requires

it to seek reuse of its secondary raw materials

and components in products manufactured and

requires recycling over disposal and the DNSH-

criterion to conduct an environmental impact

assessment (EIA), to the extent required.

EU Taxonomy Objective 3

NX Filtration’s potential contribution to

objective 3 of the EU Taxonomy Regulation

(the sustainable use and protection of water

and marine resources) can be found in various

(pilot) projects in which its HFNF technology

enables companies to treat and reuse their

wastewater and, as such, reduce their water

consumption, for example through extracting

(and depleting) groundwater sources. An

example of such application is the use of HFNF

technology for NX Filtration’s Recolab project

in Sweden. Recolab is the largest source-

separated sanitation plant in the world using

circular treatment. Key highlights of the project

are the energy-efficiency of the plant and the

circular processes that recycles wastewater to

drinking water quality.

This objective clearly aligns with the business purpose of NX Filtration. Based on the current techni-

cal screening criteria and according to our internal assessment, it however seems that we will not be

eligible to report alignment therewith. As part of our preparations for our public reporting obligations,

including discussions with external advisers, we will investigate this further in 2025 and onwards.

EU Taxonomy Objective 3 – the sustainable use and protection of water and marine resources

Taxonomy requirement:

An economic activity shall qualify as contributing substantially to the sustainable use and pro-

tection of water and marine resources where that activity either contributes substantially to

achieving the good status of bodies of water, including bodies of surface water and groundwater

or to preventing the deterioration of bodies of water that already have good status, or contrib-

utes substantially to achieving the good environmental status of marine waters or to preventing

the deterioration of marine waters that are already in good environmental status, by, inter alia:

(a) protecting the environment from the adverse effects of urban and industrial waste water dis-

charges, including from contaminants of emerging concern such as pharmaceuticals and micro-

plastics, for example by ensuring the adequate collection, treatment and discharge of urban and

industrial waste waters; (b) protecting human health from the adverse impact of any contami-

nation of water intended for human consumption by ensuring that it is free from any micro-or-

ganisms, parasites and substances that constitute a potential danger to human health as well as

increasing people’s access to clean drinking water; or (c) enabling any of these activities.

Technical screening and DNSH (do no significant harm) criteria available

NX Filtration’s activities:

NX Filtration’s membrane technology enables its customers to produce drinking water from

surface water by retaining, amongst others, bacteria, viruses, micropollutants (including phar-

maceuticals, medicines, PFAS and insecticides), nanoplastics and selective salts. In addition,

with NX Filtration’s products, customers can treat wastewater streams to prevent discharge of

polluting substances in the environment, and to reuse wastewater for purposes that also include

the production of drinking water.

With Dutch drinking water utility Vitens, we have performed tests on both synthetic feed waters

and on real waters containing a large range of PFAS compounds. Very high removal rates were

obtained for our HFNF products. KWR, an independent water research institute researched our

HFNF membranes with a full scale pilot installation under real live circumstances both on waste-

water and surface water and found comparable, high removal rates for e.g. PFOA, which is a per-

fluorinated carboxylic acid produced and used worldwide as an industrial surfactant in chemical

processes and as a material feedstock, and is a product of health concern and one of many PFAS

compounds).

23Sustainability report

NX Filtration’s integrated ESG

framework

NX Filtration has established an ESG

framework to embed ESG in its way of working.

This ESG framework consists of three layers.

The first layer constitutes the impact NX

Filtration is aiming to make with its technology

in addressing the global challenges around

water scarcity and water quality, contributing

to SDG 6 relating to clean water and

sanitation. NX Filtration seeks to be a leading

and global provider of breakthrough technology

for producing pure and affordable water to

improve quality of life.

Key KPIs in this respect mainly relate to SDG 6

(clean water and sanitation) and include i) the

amount of clean water production enabled by

NX Filtration membrane module sales and ii)

the number of countries in which NX Filtration

supplied its membrane modules.

The second layer constitutes the impact NX

Filtration is aiming to make on its customers’

operations and on its partners. The energy

efficient and chemicals free operation of NX

Filtration’s membranes requires less energy

compared to conventional technologies

(environmental impact) and NX Filtration’s

solution avoids the use of flocculants and

coagulants in pre-treatment (that is required

for traditional filtration processes) and requires

a low cleaning frequency (environmental and

social impact). NX Filtration has a strong

academic network; it partners and cooperates

with multiple universities and research

institutes around the world, including the

University of Twente, Saxion University of

Applied Sciences and the Universität Hamburg

(governance impact).

Key KPIs in this respect mainly relate to SDG

12 (responsible consumption and production)

and include i) GHG emissions scope 1 and 2 and

3 (upstream) and ii) avoided GHG emissions

during the use of NX Filtration’s membrane

modules.

The third layer constitutes NX Filtration’s own

organisation, in which it has implemented

various sustainability measures and is deploying

various initiatives around ESG related themes.

For example, NX Filtration’s coating process for

its HFNF membranes is based on water-based

chemistry (green chemistry), in contrast to

conventional solvent-based coating processes

and NX Filtration has developed an energy

efficient membrane spinning process based on

a unique in-line polymer mixing concept. NX

Filtration is valuing a diverse workforce. For

example, its 169 FTEs at 31 December 2024

represented 19 nationalities.

Key KPIs in this respect mainly relate to SDG 8

(decent work and economic growth) including i)

growth in the number of employees and ii) lost

time injury rate, SDG 9 (Industry, innovation

and infrastructure) including i) the number of

patents filed and granted and ii) the number of

scientific publications authored or supervised

by NX employees and SDG 17 (partnerships

for the goals) including i) progress on the

implementation of the supplier code of conduct

and ii) NX Filtration’s network of research

partners.

On the following pages, various examples and

KPIs have been included on these three layers.

11186209

Pilots Demo plants Full-scale plants Of which repeat orders

of projects in 2023:#

Environmental Social Governance

US Sustainable Development Goal 6 - Pure and affordable water for all

Energy efficient operation

Green chemistry

Production energy savings

Safety

Training and development

Diversified employee base

Sustainable supply chain

Knowledge sharing

Avoiding chemicals in pre-treatment

Clean water

for all

Avoiding

emissions

at our

customers

Our internal

initiatives

Gross income (€ ‘000)

815

8,053

4,625

2,613

20232022

-4%

Other

income

Sustainable

Industrial Water

Clean Municipal

Water

808

8,354

4,977

2,569

Recurring

replacements

Repeat

orders

ReplacementsFull-scaleDemo plantsPilots

25NX Filtration - Annual Report24 Sustainability report

Clean water for all

Our impact in 2024*

2024 membrane sales could

enable the production of:

457 billion liters

of clean water

Based on NX Filtration’s sales of approximately

3782 membrane modules (HFNF and UF),

multiplied by the expected capacity and

lifetime of such modules.

2024 revenue of sale

of goods by region

Rest of the World

Europe

North America

Asia

20%

47%

23%

10%

* Please note the statements and information provided in this section are unaudited.

In 2024

Europe

enabled clean water across 38 countries worldwide

27NX Filtration - Annual Report26 Sustainability report

Avoiding emissions

Our impact in 2024*

* Please note the statements and information provided in this section are unaudited.

NX Filtration’s GHG

footprint in 2024

amounted to:

939

ton CO

versus:

4,300 ton

e savings

enabled during the deployment

of NX Filtration’s

membrane modules

avoidance of 8.025 million kg of chemicals

98 GWh energy savings

Downstream CO

e savings of

NX Filtration’s products

The downstream CO

e savings that NX

Filtration enables through offering its

HFNF

membrane modules as an alternative to

conventional water treatment technologies,

such as activated carbon or a combination of

ultrafiltration and reverse osmosis, add up to

approximately 3,578 kilo CO

e saved over the

typical lifetime of a module.

In this analysis, the chemicals and energy

footprint of NX Filtration’s technology has

been compared with a broad set of alternative

technologies based on sources including

Aggarwal (Rahul Aggarwal, “Strategic

Assesment of Drinking Water Production

Systems Environmental impacts from a

Life Cycle perspective”, KTH Royal Institute

of Technology, school of architecture and

the built environment, Stockholm, Sweden

2020) and The Water Factory (Energie en

Grondstoffenfabriek). CO

e savings of NX

Filtration’s other products have not been taken

into account in this analysis of downstream

savings, despite the fact that the production

and related activities (such as business travel)

of such products has been included in the GHG

footprint analysis of NX Filtration.

e emission and energy consumption

reduction programs at NX Filtration

Albeit emissions in upstream and business

related activities represent a relatively small

portion compared to downstream emissions,

NX Filtration is implementing various programs

to further reduce its energy consumption

and CO

e emissions per membrane module.

Programs focus on those areas where most

improvement can be made, most notable in

reducing waste in the production process. It is

expected that, after the start-up of the new

megafactory and the integration of our existing

operations into this facility, we will be able to

realize reductions of waste in production. Other

ongoing programs to reduce our CO

footprint

include the recovery of materials used in the

production process and further production

efficiencies. ESG is strongly embedded in the

design of our new megafactory, with more than

400 solar panels for electricity generation, a

unique peer-to-peer heat exchange contract

with a neighboring datacenter, an extensive

heat energy management and reuse system,

and an inhouse water treatment facility.

Methodology: GHG Protocol

The Greenhouse Gas Protocol (GHG Protocol)

defines three emission scopes.

• Scope 1 emissions refer to all direct

greenhouse gas emissions from sources

that are owned or controlled by the

organization itself.

•

Scope 2 emissions are all indirect greenhouse

gas emissions stemming from the

consumption of purchased electricity, steam,

or other sources generated upstream.

• Scope 3 emissions are all other indirect

greenhouse gas emissions resulting from

an entity’s operations. This includes both

upstream and downstream supply chains,

such as the extraction and production

of purchased materials and fuels, flight

emissions, waste disposal, investments, etc.

Please note the statements and information

provided in this section are unaudited.

Organizational boundaries

NX Filtration’s organisational boundary has

been determined according to the principles

laid down in the GHG protocol. NX Filtration

reports the emissions from its operations over

which it has financial or operational control.

Using this approach, this section includes

emissions from its subsidiaries, NX Filtration

B.V., NX Filtration International B.V., NX

Filtration Real Estate B.V. (each incorporated

in the Netherlands), NX Filtration (Beijing)

Membrane Technology Co. (incorporated under

Chinese law), Ltd., NX Filtration India Private

Limited (incorporated under Indian law), and

NX Filtration Americas, LLC (incorporated

under United States law) so the reported GHG-

data is on a fully consolidated basis.

Base year

NX Filtration has set the base year at 2020

as this is the first year that NX Filtration has

verifiable emission data available on essentially

all scopes.

GHG footprint of NX Filtration

The reported GHG footprint of NX Filtration

includes all emissions of Scope 1, Scope 2, and

business travel of Scope 3, in line with the GHG

protocol.

NX Filtration’s total emissions in 2024

amounted to 939 ton CO

e (CO

equivalent).

Scope 1 CO

e emissions amounted to 554.4 ton,

of which 7% related to lease cars and 93% to

natural gas combustion). The natural gas usage

(201,464 cubic Nm3) was CO

compensated

through NX Filtration’s energy supplier by

investments in Verified Emission Reduction

units. Scope 2 CO

e emissions amounted to

47.0 ton under the well to wheel approach. If we

include CO

e emissions due to the construction

and demolition of wind turbines (under an LCA

approach) we add approximately 0.014 grams

of CO

e per kWh meaning 27 ton CO

e emission

for electricity (based on 1,963 MWh). These

Scope 2 emissions were all off-set as 100%

of the purchased electricity (1,963 MWh) was

sourced from European wind projects. Reported

Scope 3 CO

e emissions related to business

travel (currently the only Scope 3 emissions

that are monitored) amounted to 337.0 ton

e in 2024.

29NX Filtration - Annual Report28 Sustainability report

Our internal initiatives

Employees

the number of employees

Our employee base grew from 166 FTE at the end of 2023 to 169 FTE at the end of 2024, representing

19 nationalities. In addition to the Netherlands, NX Filtration has sales representation in Belgium, China,

Egypt, France, Germany, India, Indonesia, Japan, Singapore, Spain, UAE, United States and Vietnam, and

works with commercial and technical partners in various other parts of the world.

NX Filtration is placing strong emphasis on training and development with a focus on innovation, not only

for NX Filtration’s employees, but also for customers, partners and graduates. We are facilitating

internships, joint research programs and partnerships with universities and research institutes.

Our impact in 2024*

* Please note the statements and information provided in this section are unaudited.

169

Safety

lost time injuries and

fatalities in 2024

NX Filtration harnesses a culture of safety, where

health and safety risks are minimized with a

methodology based on the safety awareness

model. The management of NX Filtration is highly

committed to improving health and safety

conditions. This commitment is shown, amongst

others, by a clear communication to all employ-

ees. Upon joining NX Filtration, each employee

receives an introduction safety training and each

department meeting starts with a health and

safety topic. A proactive hazard reporting system

has been introduced, wherein every employee is

motivated to report hazards, to secure a safe

workplace for all by improving and securing

processes by learning from hazards/near misses

and preventing it will not happen in future. Our

QSHE manager is responsible for managing and

improving our health and safety agenda.

NX Filtration had 0 lost time injuries and 0

fatalities in 2020, 2021, 2022, 2023 and 2024.

NX Filtration has a safety policy, conducted

safety trainings and is pro-actively sharing

alerts and performance.

NX Filtration actively engages with its suppliers

about its Supplier Code of Conduct.

Compliance therewith is included in legally

binding agreements with our material suppliers

and contractors for our new megafactory. We

also conducted and continue to conduct various

audits with existing and new suppliers. At NX

Filtration, we are very much committed to

strengthen the value chain by actively engaging

with our suppliers, not only from a pure

business perspective but also to pursue certain

standards and values. We value a reliable and

sustainable business relationship, a better

environment, a safe workplace, high quality

standards and the highest integrity. The

principles we value most and are regarded as a

minimum standard for us to cooperate based

upon, are laid down in our Supplier Code of

Conduct, which we apply to all of our suppliers.

The spirit thereof is professional, reliable,

down-to-earth and accountable.

Suppliers

adherence to NX Filtration’s

Supplier Code of Conduct

by all material suppliers and

contractors for our new

megafactory

100%

Our internal initiatives

Employees

the number of employees

Our employee base grew from 166 FTE at the end of 2023 to 169 FTE at the end of 2024, representing

19 nationalities. In addition to the Netherlands, NX Filtration has sales representation in Belgium, China,

Egypt, France, Germany, India, Indonesia, Japan, Singapore, Spain, UAE, United States and Vietnam, and

works with commercial and technical partners in various other parts of the world.

NX Filtration is placing strong emphasis on training and development with a focus on innovation, not only

for NX Filtration’s employees, but also for customers, partners and graduates. We are facilitating

internships, joint research programs and partnerships with universities and research institutes.

Our impact in 2024*

* Please note the statements and information provided in this section are unaudited.

169

Safety

lost time injuries and

fatalities in 2024

NX Filtration harnesses a culture of safety, where

health and safety risks are minimized with a

methodology based on the safety awareness

model. The management of NX Filtration is highly

committed to improving health and safety

conditions. This commitment is shown, amongst

others, by a clear communication to all employ-

ees. Upon joining NX Filtration, each employee

receives an introduction safety training and each

department meeting starts with a health and

safety topic. A proactive hazard reporting system

has been introduced, wherein every employee is

motivated to report hazards, to secure a safe

workplace for all by improving and securing

processes by learning from hazards/near misses

and preventing it will not happen in future. Our

QSHE manager is responsible for managing and

improving our health and safety agenda.

NX Filtration had 0 lost time injuries and 0

fatalities in 2020, 2021, 2022, 2023 and 2024.

NX Filtration has a safety policy, conducted

safety trainings and is pro-actively sharing

alerts and performance.

NX Filtration actively engages with its suppliers

about its Supplier Code of Conduct.

Compliance therewith is included in legally

binding agreements with our material suppliers

and contractors for our new megafactory. We

also conducted and continue to conduct various

audits with existing and new suppliers. At NX

Filtration, we are very much committed to

strengthen the value chain by actively engaging

with our suppliers, not only from a pure

business perspective but also to pursue certain

standards and values. We value a reliable and

sustainable business relationship, a better

environment, a safe workplace, high quality

standards and the highest integrity. The

principles we value most and are regarded as a

minimum standard for us to cooperate based

upon, are laid down in our Supplier Code of

Conduct, which we apply to all of our suppliers.

The spirit thereof is professional, reliable,

down-to-earth and accountable.

Suppliers

adherence to NX Filtration’s

Supplier Code of Conduct

by all material suppliers and

contractors for our new

megafactory

100%

Our patent portfolio included 10 patent

families (of which 1 newly added in 2024) with

in total 52 patents granted (of which 2 added

in 2024). In addition, we are working on

various programs to further improve the

sustainability of our production process, that

is already working according to a ‘green

chemistry’ process. Each of the initiatives on

NX Filtration’s research & development

roadmap is monitored against its

contribution to our sustainability objectives.

Research &

development

patents as per

31 December 2024

In total, our people authored in approximately

52 peer reviewed scientific publications since

2016. In 2024, our people authored in 5 peer

reviewed scientific publications, amongst

others, in Nature Water and Journal of

Membrane Science.

Throughout 2024 a total of 15 students and

trainees were part of the NX Filtration’s

team, e.g., as an intern for their BSc or MSc

thesis. More than 20 lectures were given by

NX Filtration’s team at various conferences

and shows.

Knowledge

sharing

scientific publications

authored by

NX Filtration employees

Academic

network

partnerships with

universities and research

institutes around the world

31NX Filtration - Annual Report30 Sustainability report

No audit and no limited assurance

The information provided in this Sustainability

Report has not been subject to an audit or

limited assurance assignment.

Looking ahead

While growing, the company remains steadfast

in its commitment to Environmental, Social,

and Governance (ESG) principles. NX Filtration

places importance on maintaining high ESG

standards, recognizing our significance for

long-term success, customer satisfaction,

environmental well-being, and societal benefits.

The ongoing substantial growth of NX Filtration

opens up numerous opportunities to integrate

ESG considerations with the right standards

right from the outset. With the construction

of our new manufacturing facility at the High

Tech Systems Park in Hengelo, we implemented

measures for advancing ESG initiatives.

In 2025, NX Filtration aims to persist in its

business expansion, concurrently increasing

the impact through the sale of membrane

products. This commitment contributes to

global access to clean and safe water while

simultaneously reducing energy and chemical

usage in water treatment processes. As our

business scales up, the goal is to further

decrease energy consumption and implement

measures to minimize greenhouse gas (GHG)

emissions. This involves initiatives such as

procuring green electricity, continuing the

transition to electric vehicles, and electrifying

operations. Other crucial factors in achieving

this objective encompass enhancing efficiency

in new production lines, adopting more energy-

efficient production methods, and moving

towards low-carbon distribution and logistics

through active engagement with suppliers.

In 2025, we will also start preparing us for the

implementation of CSRD that requires us to

report on ESG related KPIs in 2027 over the

financial year 2026.

33NX Filtration - Annual Report32 Sustainability report

20 February

NX Filtration supplies largest Chinese

coffee chain Luckin’s water treatment

plant

NX Filtration supplied its hollow fiber nano-

filtration membrane modules to the Luckin

Coffee water treatment project together with

its OEM partner Suzhou MOPU. The advanced

membrane system marks a significant mile-

stone for both companies in addressing the

unique water filtration needs of Luckin Kun-

shan’s bakery plant in Kunshan, Jiangsu Prov-

ince. One of the key factors

that contributed to the

use of NX Filtra-

tion’s technology

is the company’s

dedication to

environmental

responsibility.

5 March

NX Filtration and

TZW-DVGW

partner for

PFAS removal

from drinking

water

NX Filtration en-

tered into a stra-

tegic collaboration

with TZW-DVGW

(Technologiezentrum

Wasser, German Water

Centre) for a pioneering

project aimed at addressing

the challenge of PFAS (Per- and Polyfluoroal-

kyl Substances) removal from drinking water,

with minimal energy and chemical dosing. In

response to the escalating concerns around

PFAS, Germany implemented a new drinking

water regulation, mandating compliance with

PFAS-group limits, with specific deadlines set

for PFAS20 by January 2026 and PFAS4 by

January 2028.

7 March

Erik Roesink Honored with AMTA 2024 Hall

of Fame Award for Advancing Clean Water

Solutions

Erik Roesink, founder and Chief Technology

Officer of NX Filtration, was awarded with the

prestigious AMTA 2024 Hall of Fame Award

for his tireless dedication to enhancing clean

and affordable water access. The American

Membrane Technology Association (AMTA) is

a non-profit organization dedicated to solving

water supply and quality issues through the

widespread application of membrane technol-

ogy.

19 March

NX Filtration signs agreements in Vietnam

to advance sustainable water solutions

NX Filtration enters a partnership with the

United Nations Development Program (UNDP)

and Nam Cau Kien Industrial Park, for a fea-

sibility study for industrial wastewater recla-

mation. Additionally, NX Filtration collaborates

with CA Water JSC and Climate Fund Manag-

ers (CFM) to integrate its hollow fiber nanofil-

tration membrane technol-

ogy into the existing

water treatment

infrastructure

of the La

Giang Water

Treatment

Plant in

Duc Tho

District,

Ha Tinh

Province.

2 April

NX Filtration receives order from Delco

Water for First Nations water treatment

project in Canada

Delco Water, a Canadian leader in water treat-

ment solutions, selected NX Filtration to deliver

its hollow fiber nanofiltration membranes for

a new Water Treatment Plant in Canada. The

project seeks to upgrade and extend the water

treatment system for a

remote community,

supplying clean

and reliable

drinking water

produced

from lake

water with

high organ-

ics. This is

the second

drinking

water project

for which NX Fil-

tration delivers its

nanofiltration mem-

branes through Delco Water.

4 April

NX Filtration becomes B Corp certified

NX Filtration officially becomes B Corp

certified. NX Filtration N.V. joins a global

movement of over 8,400 B Corps that pursue a

sustainable purpose alongside profit. A B Corp

2024 month by month

35NX Filtration - Annual Report34 2024 month by month

position of Group Finance & Control Director

and Executive Board member at BDR Thermea

Group, a Global manufacturer and distributor

of sustainable smart indoor climate solutions

to building owners and users. Mr Zwiers holds

an Executive Master of Finance & Control from

the University of Amsterdam and a Master of

Science in Business Administration from Tilburg

University.

4 June

Bucher Denwel collaborate with NX Filtra-

tion for a new beer membrane filtration

solution

NX Filtration announces a collaboration with

Bucher Denwel, a subsidiary of Bucher Unipek-

tin AG, specializing in processing solutions for

the Food & Beverage industry. Bucher Denwel

will apply NX Filtration’s microfiltration mem-

branes in a new sustainable beer filtration solu-

tion it is bringing to the market. Bucher Den-

wel’s new advanced beer membrane filtration

solution is based on crossflow beer filtration

with polymeric membranes, guaranteeing clear,

yeast-free filtered beer with high flexibility for

various beer types. The filters are designed for

easy operation and seamless integration into

the brewing process, maximizing efficiency.

27 June

NX Filtration receives orders from

Thermax for various nanofiltration and

ultrafiltration water projects in India

NX Filtration announces that it has added

Thermax Ltd, an Indian multinational engineer-

ing company involved in clean air, clean energy

and clean water, to its customer base. Thermax

has placed a sizable initial order for both hollow

fiber nanofiltration and ultrafiltration mod-

ules from NX Filtration. With over 40 years of

history, Thermax is amongst the prime Indian

companies focusing on water and wastewater

treatment, with more than 20,000 water and

wastewater treatment installations across

various municipal, industrial and commercial

applications.

12 July

NX Filtration announces CEO change: Flo-

ris Jan Cuypers new CEO per 1 September

2024

NX Filtration appoints Floris Jan Cuypers as

new Chief Executive Officer (CEO) as per 1

September 2024, to lead NX Filtration through

its next stages of growth. He has a strong

track-record of executive leadership positions

focusing on commercial impact and operation

al excellence. Floris Jan Cuypers is succeeding

Jeroen Pynenburg. Floris Jan Cuypers (1978)

brings a wealth of experience in leading and

growing international organizations. He holds a

Master of Science in Applied Physics from Delft

University of Technology in the Netherlands.

11 September

Her Majesty Queen Máxima opens innova-

tive water transition factory NX Filtration

Her Majesty Queen

Máxima officially

opened the new

membrane

factory of NX

Filtration in

Hengelo.

During the

festive occa-

sion, she was

accompanied

by NX Filtra-

tion’s founder,

must meet high, verified standards in terms of

social and environmental impact, accountability

and transparency and the certification is

granted by B Lab. B Lab is the nonprofit

network transforming the global economy

to benefit all people, communities, and the

planet. The B Corp certification addresses the

entirety of a business’ operations and covers

five key impact areas of Governance, Workers,

Community, Environment and Customers.

Becoming a B Corp marks another significant

milestone in advancing our ESG agenda and

demonstrates our commitment to a sustainable

and socially responsible organization.

24 April

NX Filtration celebrates commissioning of

fourth drinking water project in Indonesia

NX Filtration announces the successful commis-

sioning of the fourth drinking water project in

Indonesia based on NX Filtration’s hollow fiber

nanofiltration (HFNF) membrane technology.

PT Bayu Surya Bakti Konstruksi (BSBK) com

missioned a new 450 m

/hour project in Medang

Kampai, marking a significant milestone in sus

tainable water management in the region. The

new water treatment plant addresses the grow

ing demand for reliable water supply in the area.

The source of the water is the Kemili river, which

has a high load of colour caused by humic acids

(plant residues). These types of waters can be

treated optimally with HFNF membranes which

require hardly any chemical dosing and operate

at low pressure, thus consuming less energy.

16 May

NX Filtration signs contract for the world’s

largest hollow fiber nanofiltration water

treatment plant in Mexico

NX Filtration announces that it will supply its

hollow fiber nanofiltration membrane mod-

ules to an indirect potable

water reuse system in

Mexico, marking

NX Filtration’s

largest project

to date. The

project was

awarded

by SAPAL

(Sistema

de Agua

Potable

y Alcan-

tarillado de

Leon), the

Mexican water

utility, and will

be delivered through

EcoAzur, distributor

of NX Filtration’s products in

Mexico. The water reuse project is an import-

ant step to address water scarcity issues in the

region. The project will be executed in 2 phases

with a capacity of 17 Million Liters per Day

(MLD) each.

30 May

NX Filtration appoints Jan Feie Zwiers as

new Chief Financial Officer

NX Filtration announces the appointment

of Jan Feie Zwiers as Chief Financial Officer

(CFO) as per 1 August 2024, succeeding Mark

Luttikhuis. Mr Zwiers has an excellent track

record of managerial experience and a broad

financial background. Since 2010, he held the

37NX Filtration - Annual Report36 2024 month by month

5 December

NX Filtration supplies advanced nanofiltra-

tion membranes to Lantania for wastewa-

ter treatment at a paper mill

NX Filtration has been selected by Lantania,

the Spanish Infrastructure, Water and Energy

Group, to supply its cutting-edge hollow fiber

nanofiltration membranes for a wastewater

treatment project at a paper mill. This project,

currently under construction, marks a signifi-

cant step towards achieving enhanced sustain-

ability and compliance with strict water quality

standards in industrial wastewater manage-

ment.

19 December

NX Filtration achieves ACS certification for

hollow fiber nanofiltration membranes

NX Filtration’s hollow fiber nanofiltration mem-

branes received the Attestation de Conformité

Sanitaire (ACS) certification. This certifica-

tion confirms that NX Filtration’s technology

complies with French regulations for materials

in contact with drinking water, ensuring the

safe and reliable use of its membranes in water

treatment processes throughout France.

Prof.dr.ir. Erik Roesink, CEO Floris Jan Cuypers,

the mayor of Hengelo, Sander Schelberg, and

the King’s Commissioner, Mr. Heidema. The

opening attracted over 300 guests from both

the Netherlands and abroad, including repre-

sentatives from the water sector, technology,

and government, emphasizing the importance

of water and innovation.

8 October

NX Filtration supplies membrane modules

to Kindasa Water Services Co water treat-

ment plant in Saudi Arabia

Kindasa Water Services Co (KWS), a leading

private potable water supply company in Saudi

Arabia. Established in 2000, KWS is renowned

for its expertise in seawater desalination

and potable water distribution, serving both

industrial and residential sectors. NX Filtration

received new orders to supply its HYDRAcap

ultrafiltration modules to KWS’ largest wa-

ter treatment plant, located in Jeddah, Saudi

Arabia. With this delivery, all of the existing

modules in this plant will have been replaced by

NX Filtration’s technology, representing more

than 800 modules and boosting capacity to 65

million liters per day (MLD).

30 October

NX Filtration supplies membrane modules

to PT. Grinviro Biotekno Indonesia for ad

vanced water treatment

NX Filtration received an order from PT. Grinvi-

ro Biotekno Indonesia, a prominent water and

wastewater management company based in

Indonesia, for hollow fiber nanofiltration mem-

brane modules for city water treatment with a

capacity of nearly 100 m

/hour. With locations

in Jakarta, Surabaya, and Makassar, Grinviro

is known for providing water treatment solu-

tions to enhance environmental protection and

deliver clean, pure water to both industrial and

residential sectors.

11 November

NX Filtration recognized with 2024 Frost &

Sullivan Global Product Leadership Award

NX Filtration has been awarded the prestigious

2024 Frost & Sullivan Global Product Leader-

ship Award. Frost & Sullivan’s Product Leader-

ship Award recognizes the company that offers

a product or solution with attributes that deliv-

er the best quality, reliability, and performance

in the industry. This recognition highlights the

company’s successful development and deploy-

ment of its hollow fiber nanofiltration technol-

ogy, which offers a chemical-free, energy-effi-

cient, and cost-effective

solution for purify-

ing water sup-

plies across

various

indus-

tries.

39NX Filtration - Annual Report38 2024 month by month

Financial Performance

NX Filtration is a provider of membrane technology for

producing pure and affordable water to improve quality

of life. Its hollow fiber nanofiltration (HFNF) technolo

gy removes micropollutants (including pharmaceuticals,

medicines, PFAS and insecticides), color and selective

salts, but also bacteria, viruses and nanoplastics, from

water whilst offering strong sustainability benefits. NX

Filtration sells its filtration membrane modules in its two

business lines: Clean Municipal Water and Sustainable

Industrial Water. As there is a strong interrelationship

between NX Filtration’s different business activities,

management reviews the profitability of the Company

on an aggregate level. All financial information can be

found in the consolidated financial statements.

Gross income

Gross income increased by 38% from € 8,053

thousand in 2023 to € 11,084 thousand in 2024.

Revenues from the sale of goods increased by

39% from € 7,238 thousand in 2023 to € 10,085

thousand in 2024. Other income, primarily

related to government grants for innovation

projects and rental income from pilot projects,

increased by 22% from € 815 thousand in 2023

to € 999 thousand in 2024.

The realized 2024 revenues came in lower

than NX Filtration’s original outlook of over

€ 16 million for the year, reflecting the evolving

timelines associated with customers’ project

realization schedules. These were particularly

impacted by global industrial slowdown,

and longer lead times in Europe and North

America. Some orders that were anticipated

to be received and delivered in 2024, have been

delayed by the respective customers, but are

still part of NX Filtration’s pipeline for delivery

in 2025.

11186209

Pilots Demo plants Full-scale plants Of which repeat orders

of projects in 2023:#

Environmental Social Governance

US Sustainable Development Goal 6 - Pure and affordable water for all

Energy efficient operation

Green chemistry

Production energy savings

Safety

Training and development

Diversified employee base

Sustainable supply chain

Knowledge sharing

Avoiding chemicals in pre-treatment

Clean water

for all

Avoiding

emissions

at our

customers

Our internal

initiatives

Gross income (€ ‘000)

11,084

6,361

3,724

815

8,053

4,625

2,613

20242023

+38%

Other

income

Sustainable

Industrial Water

Clean Municipal

Water

999

Recurring

replacements

Repeat

orders

ReplacementsFull-scaleDemo plantsPilots

41NX Filtration - Annual Report40 Financial Performance

NX Filtration added important new OEMs to

its customer base (for example Thermax in

India and Hydroflux in Australia), strengthened

relationships with its existing OEM partners

resulting in various repeat orders (for example

repeat projects for Ecoazur in Mexico and

Delco Water in Canada), and experienced

strong traction in onboarding new OEMs to its

customer base.

In our Clean Municipal Water business line,

revenues were € 3,724 thousand in 2024,

compared to € 2,613 thousand in 2023. We

experienced a strong step-up in project sizes

with, amongst others, our largest order to

date for the world’s largest hollow fiber

nanofiltration water treatment plant in Mexico

with a capacity of 17 million liters per day. In

Indonesia, we onboarded a new OEM that used

our membrane technology in a project related

to peat water treatment for decentral drinking

water production, an application with which

we have already demonstrated successful

performance over the past years. In Europe

we continue to make strong progress with

several key OEMs that are increasingly offering

NX Filtration’s products in various full-scale

projects.

In our Sustainable Industrial Water business

line, revenues were € 6,361 thousand in 2024,

compared to € 4,625 thousand in 2023. We

added Thermax, an Indian multinational

engineering company involved in clean air, clean

energy and clean water, to our customer base

and received initial large orders from them.

On the Food & Beverage side, we continued

our work with PepsiCo (now supplying them

across North America, Europe and Asia), and

collaborated with Bucher Denwel (launching a

new sustainable beer filtration solution to its

customers).

Gross margin, EBITDA and Net

result

Gross margin remained strong at 61.0%

(59.6% in 2023) and is underpinning our strong

technology position.

EBITDA loss was € 15,659 thousand in 2024

compared to a loss of € 11,936 thousand in

2023. The increase in EBITDA loss is mainly

driven by additional investments in the

organization ahead-of-the curve to facilitate

future business, as well as specific cost related

to the start-up of the new factory and the

transfer from our previous facilities to the new

factory. The loss before tax increased from

€ 14,347 thousand in 2023 to € 23,069

thousand in 2024, primarily driven by the

initiation of depreciation for the new factory

and related machinery. The net loss (after tax)

was € 23,089 thousand in 2024 compared to a

net loss of € 23,292 thousand in 2023. The 2023

net loss included an one-off derecognition of

€ 8,945 thousand related to the deferred tax

assets previously recognized for accumulated

tax losses.

Cash flows and investments

The cash position at 31 December 2024

amounted to € 53.4 million, compared to a cash

position of € 49.9 million at 31 December 2023.

The cash position was positively influenced by

NX Filtration’s newly secured combined equity

and debt (real estate financing) package of

approximately € 50 million in March 2024. We

expect our current cash position will provide us

with sufficient headroom to fund our growth

ambitions.

Operating cash flow is € 21,150 thousand

negative, compared to € 11,744 thousand

negative in 2023. Working capital

increased

to €14,535 thousand at 31 December 2024

versus € 9,046 thousand at 31 December

2023. This was driven by lower trade payables

(reflecting the impact of outstanding capex

payables at the end of 2023), higher inventory

levels to support the transfer of UF and MF

membrane production to the new factory in

Hengelo in Q1 2025 and to meet anticipated

growth in demand for 2025, partially offset by

a reduction in receivables.

Capital expenditures amounted to € 25,933

thousand in 2024 as compared to € 43,940

thousand in 2023. The capex mostly relates to

the construction of our new factory, which was

completed in 2024. Additionally, NX Filtration

capitalized € 1,061 thousand of development

costs which demonstrates the company’s

continued efforts to invest in innovations for

the future.

Total FTE slightly increased to 169 at 31

December 2024 (versus 166 at 31 December

2023). We are able to benefit from efficiencies

resulting from our larger scale operations and

we continue shaping our global organization

to position us well for the growth ahead of us.

The Company does not pay any dividend for the

year.

Working capital defined as inventories plus trade and other receivables minus trade and other payables

43NX Filtration - Annual Report42 Financial Performance

Below is a summary of our risks, our risk appetite, likelihood and potential impact. For a detailed

description of these risks and how we believe we mitigate these risks we refer to the disclosure set out

after the below table. Additional risks not known to us, or currently believed not to be material, could

later turn out to have a material impact on our business, revenue, assets, liquidity, capital resources or

net income.

Risk category Risk description

Risk appetite Likelihood Potential impact

Strategic and

Commercial

We are dependent upon acceptance

of our technology by customers and

future partners. A lack thereof will

likely impact our ability to achieve and

maintain market acceptance.

High Medium High

Unsuccessful pilot projects or

inconsistent performance of our

products could harm the customer

support for our products.

Medium Medium High

The demand for NX Filtration’s

products depends on the continuation

of market trends towards greater

sustainability, including trends to

lowering the corporate water footprint

and decarbonisation. Such trends

could change due to a number of

factors outside our control, following

which the demand for our products

could be reduced.

High Low Medium

Increased competition in the water

treatment solution market may

materially adversely affect our ability

to gain market share.

High Medium Medium

Our business and strategy depends,

in part, on significant customers and

our relationship with OEMs. If such

relationships fail to develop this could

have a materially adverse effect on our

business.

High Medium High

We do business with municipal clients

and, as a result, we face risks of delays

related to the procurement process,

budget decisions driven by statutory

and regulatory determinations

and compliance with government

contracting requirements.

High Medium Medium

General

Business

We may need additional financing in

the near future, and such financing

may not be available on favourable

terms, or at all.

Low Medium High

Risks and

Uncertainties

45NX Filtration - Annual Report44 Risks and Uncertainties

Risk category Risk description

Risk appetite Likelihood Potential impact

Operational

If our new manufacturing facility were

to become inoperable, we would be

unable to produce sufficient products

and our business would be harmed.

Low Low High

We are dependent on third-party

suppliers to deliver raw materials

and components for our products.

Supply interruptions could lead to

interruptions of our own production,

increased costs, order cancellations

and loss of market share.

Low Medium High

Significant increases in the cost of raw

materials, components and finished

goods may materially adversely affect

our business.

Medium Medium Low

We depend on the ability to hire and

retain management, key employees

and other qualified and skilled

employees and we may not be able to

attract and retain such personnel.

Medium Medium Medium

Disruptions of our information

technology systems could have

a material adverse effect on our

business.

Low Medium High

Our current operations are

international in scope, and we plan

further geographic expansion, creating

a variety of operational challenges.

High Medium Low

Risk category Risk description

Risk appetite Likelihood Potential impact

Technology

Our failure to protect intellectual

property rights may undermine our

competitive position, and litigation to

protect our intellectual property rights

may be costly, time consuming and

distracting from daily operations.

Low Low Medium

We may be unsuccessful in adequately

protecting our technological know-how

that is not covered by intellectual

property registration.

Low Low Medium

New products or technological

improvements by competitors, including

by larger players in the industry

investing in research and development

for product substitution of our HFNF

products, or improvements to our

HFNF technology could materially

adversely affect our business and our

ability to gain market share.

Medium Low Medium

Compliance

We are exposed to risks associated

with product liability, warranties, recall

claims or other lawsuits or claims that

may be brought against us.

Low Low Medium

We are subject to various laws and

regulations in multiple jurisdictions in

which we operate, and unfavorable

changes or failure by us to comply

with these regulations could have

a material adverse effect on our

business.

Low Medium Medium

We may be exposed to the risk of fraud

and other dishonest activities, which

could have a material adverse effect

on our business, financial condition or

results of operations.

Low Medium Medium

47NX Filtration - Annual Report46 Risks and Uncertainties

For information about NX Filtration’s credit

risk, liquidity and market risks as well as the

capital management structure, please refer

to the information outlined in Note 3 and 4

of the Consolidated Financial Statements.

Furthermore, risks related to external

reporting are considered limited due to the

limited number of estimates in the financial

statements, and because NX Filtration was

not faced with any indication for impairment in

financial year 2024.

For each risk factor, we set out how we

believe we mitigate these risks. However, we

may not be successful in deploying some or

all of these mitigating actions effectively. If

circumstances occur or are not sufficiently

mitigated, our business, financial condition,

results of operations and prospects could be

material adversely affected. In addition, risks

and uncertainties could cause actual results to

vary from those described, which may include

forward-looking statements, or could impact our

ability to meet our objectives or be detrimental

to our financial condition or reputation.

General Business, Strategic

and Commercial Risks and

Uncertainties

We are dependent upon acceptance of our

new technology by customers and future

partners. A lack thereof will likely impact

our ability to achieve and maintain market

acceptance.

NX Filtration’s ability to succeed is mainly

dependent upon achieving and maintaining

the acceptance by customers and future

partners of its innovative inside-out hollow

fiber HFNF membranes that are based on

patented technology and production methods.

Historically, governments, municipal and

industrial companies have fully relied on water

filtration activities using conventional water

treatment technology. In order for NX Filtration

to achieve its business objectives, it must

convince these governments and companies

that its technology and capabilities justify

the switch to its products. If NX Filtration,

together with its (OEM) partners, cannot

convince governments and companies of the

effectiveness of its HFNF membranes or if NX

Filtration is unable to obtain the necessary

approvals, it is unlikely to keep existing

customers or attract additional customers

and future partners on acceptable terms or to

develop a sustainable, profitable business.

The market for HFNF is still at a relatively

early stage of operation and customers may

not recognise the need for, or the benefits

of, the HFNF products. Therefore, the extent

to which the HFNF products will be able to

meet its customers’ requirements and achieve

significant market acceptance is uncertain.

By contrast, the markets for UF, traditional

nanofiltration and reverse osmosis treatment

technologies are large and well established,

which may make the commercialisation of new

water treatment technologies longer than

foreseen and ultimately unsuccessful, including

HFNF membrane technology or other future

technology developments.

The use of a new type of water filtration

depends on compatibility with existing

infrastructures, installations and equipment,

as well as the manner in which such technique

may be used by a manufacturer. Manufacturers

may elect not to use, distribute or install NX

Filtration’s products due to regulatory and

political considerations, including but not

limited to tax exemptions, subsidies, trade

barriers, handling and safety requirements,

and for a variety of other reasons, including

(i) product and process safety considerations;

(ii) advantages of alternative water filtration

methods; (iii) lack of cost-effectiveness; (iv)

timing of market introduction of competitive

products; (v) process economics in realising

economies of scale; (vi) incompatibility with

required product specifications; (vii) lack of

fit with existing infrastructure; and (viii) the

fact that NX Filtration is in an early stage of

operation and potential uncertainty around its

future development and ability to deliver its

products in the future.

If NX Filtration fails to achieve a broad

market acceptance for its products to replace

or compete with current UF, traditional

nanofiltration and reverse osmosis treatment

technologies or if NX Filtration is not able to

successfully commercialise the membrane

technology that it develops, NX Filtration may

not be able to generate significant revenue,

which could have a material adverse effect

on its business, financial condition, results of

operations and prospects.

To mitigate this risk, NX Filtration is actively

developing, piloting and investing in its

technology. NX Filtration benefits from a

unique team of leading membrane technology

experts with technical, operational and

commercial experience with an extensive

background in membrane technology and the

water sector. Based on the concept of its pilot-

based roll-out model, NX Filtration invests in

significantly expanding the number and size of

its pilot systems to accelerate acceptance of

its technology. Furthermore, it is expected that

this risk is reducing over time, as the market

for HFNF is expected to gradually mature and

NX Filtration’s customers are gaining more

experience with HFNF products, including

business case development, internal approval

procedures and project management.

Unsuccessful pilot projects or inconsistent

performance of our products could harm

the customer support for our products.

Currently, in relation to its new HFNF

technology, the vast majority of NX Filtration’s

projects are at a pilot system phase during

which customers test the HFNF technology

before making a decision whether to proceed

with a demo or full-scale installation

investment. Some or all of such pilot

systems may not ultimately lead to full-scale

installations, including for reasons beyond NX

Filtration’s control, such as where third parties

would not adequately integrate the products

into a pilot, demo or full-scale system. Its

products may not be functional, may be faulty

or may not meet customers’ expectations. This

may lead to requirements for NX Filtration to

repair or improve its products after sale and/

or installation, which may diminish operating

margins or lead to actual losses. In respect

of water filtration systems that are built

together with OEMs, NX Filtration may be

made responsible if such systems are faulty

or not functional. Furthermore, there could

be unwillingness by OEMs to roll-out NX

Filtration’s technology across their customer

base if its products do not display the promised

performance. Any of the above events could

materially adversely affect NX Filtration’s

business, financial condition, results of

operations and prospects.

To mitigate this risk, NX Filtration generally

offers on-site commissioning, technical support

and training by its engineers. NX Filtration

seeks to maintain a constructive dialogue with

the customer that is testing NX Filtration’s

technology through a pilot system. NX

Filtration believes the vast majority of ongoing

pilots have a clear visibility towards follow-on

demo or full-scale projects and, the amount of

customers that have not been retained after

using NX Filtration’s technology by way of a

pilot system is considered to be limited.

49NX Filtration - Annual Report48 Risks and Uncertainties

The demand for NX Filtration’s products

depends on the continuation of market

trends towards greater sustainability,

including trends to lowering the corporate

water footprint and decarbonisation. Such

trends could change due to a number of

factors outside our control, following which

the demand for our products could be

reduced.

The present and projected demand for NX

Filtration’s products is driven by the need to

address global and structural water scarcity

and water quality issues. Such issues include,

but are not limited to, people not having daily

access to clean, drinkable water, the fact that

approximately 80% of global wastewater flows

back in nature without being treated, the fact

that approximately 95% of medicine waste

reaches nature through sewerage systems,

limited reuse of treated wastewater globally,

and micro-plastics ending up in any water

environment and eventually the food- and

waterchain. Additionally, pollution is a major

concern in many emerging countries due to

the lack of adequate wastewater treatment

facilities where wastewater is discharged

untreated, directly into the sea or rivers. The

key drivers of demand for NX Filtration’s

products include climate change/droughts,

regulations, universal access to clean water,

corporate responsibility, discharge surcharges,

and health awareness.

Furthermore, water plays an integral part

in the production process of companies in a

wide variety of sectors, such as within the

agricultural, food and beverage, textile, power

generation, mining, high tech, datacenter, semi-

conductor, and pulp and paper sectors. Such

sectors heavily depend on water that is used as

an ingredient or for operational purposes such

as for cleaning, heating, cooling and transport.

Many companies are reliant on water supply

and exposed to the risk of water scarcity

through their supply chains, since they rely on

(hydropower) energy and input from water-

dependent agricultural and industrial sectors.

Companies are becoming increasingly aware

of the severity of water scarcity issues and its

eventual impact on their businesses and seek

to strategically address these by setting goals

to reduce their corporate water footprint (i.e.

the total volume of water that is used directly

or indirectly to run and support a business).

Increasingly, customers are demanding the use

of products and technologies that contribute to

decarbonisation and governments globally and

locally are enacting pro-climate environmental

standards and regulations.

These current and expected trends could

change due to a number of factors which are

outside of the NX Filtration’s control, including

the modification or elimination of economic

incentives encouraging decarbonisation, the use

of alternative forms of water treatment and

the public perception moving away from the

idea that CO

emissions negatively impact the

environment. If any of these or other changes

were to occur, demand for NX Filtration’s

products could be reduced significantly, which

could, in turn, have a material adverse effect

on its business, financial condition, results of

operations and prospects.

To mitigate this risk, NX Filtration continuously

monitors trends and initiates R&D efforts

accordingly. To verify its R&D and product

development projects, NX Filtration actively

engages with its customers, academic partners

and stakeholders that are active in the global

water market to anticipate trends and market

developments and to provide it with a deep

understanding of the (future) needs of NX

Filtration’s customers.

Increased competition in the water treatment

solution market may materially adversely

affect our ability to gain market share.

The water treatment solution market is

highly competitive, and NX Filtration faces

significant competition from large international

competitors as well as smaller regional

competitors in certain markets. NX Filtration

faces competition in countries across the globe

and the products of NX Filtration’s competitors

are typically sold globally. NX Filtration primarily

competes with organisations that offer

conventional water treatment solutions (such

as reverse osmosis, adsorption and oxidation

processes), organisations that develop products

similar to those offered by NX Filtration

and organisations that offer alternative

technologies. NX Filtration’s competitors

generally have global distribution networks, a

global sales force and have therefore already

achieved economies of scale, as opposed to NX

Filtration. In addition, industry players that

do not currently compete with NX Filtration

but may have greater financial resources, may

enter the market and disrupt the competitive

environment, which may influence NX

Filtration’s ability to grow its market share.

Such existing or new industry players may

have longer operating histories, customer

incumbency advantages, stronger relationships

with industrial companies, more access to and

influence on municipal governments and more

capital resources than NX Filtration does.

NX Filtration competes primarily on the

basis of, among other things, price, product

technology and performance, delivery times,

ease of operation, sustainability benefits,

flexibility, design and innovation, reputation,

brand recognition and customer access as well

as the scope and quality of the products and

the suitability of the products as components

in systems built by original equipment

manufacturers (OEMs). NX Filtration’s ability

to compete may be adversely affected by a

number of factors, such as the following (i)

new products or product improvements by

competitors, including product substitution

of NX Filtration’s products for new or

alternative technologies; (ii) greater financial

and technical resources available to other

competitors specialising in water treatment;

(iii) larger players in the industry investing in

research and development relating to hollow

fiber nanofiltration (HFNF), ultrafiltration

(UF) or microfiltration (MF) technology; (iv)

competitors having lower production costs (due

to geographic location, currency fluctuations

or other advantages), larger production

and assembly capacity or larger spending

budgets, more buying power with respect to

raw materials, which may enable competitors

to compete more aggressively in offering

discounts and lowering prices; (v) consolidation

among competitors in the water treatment

industry; (vi) raw material suppliers seeking

opportunities to forward integrate membrane

spinning capabilities; and (vii) competitors

temporarily offering their products and services

at significant discounts in order to enter the

market or to increase their market share,

thereby impacting profitability throughout the

sector. If NX Filtration is unable to compete

successfully for any of the above reasons,

its business, financial condition, results of

operations and prospects could be materially

adversely affected.

To mitigate this risk, NX Filtration is fully

committed to leverage on the competitive

edge of its HFNF products versus conventional

water treatment solutions. Key characteristics

of the HFNF product are lower energy usage,

avoidance of pre-treatment chemicals, simpler

system set-up with a smaller physical footprint

and reduced cleaning and maintenance cost.

As a consequence of expected future cost

savings, the price NX Filtration can charge

for its membrane modules is significantly

higher than the price of alternative membrane

modules. Furthermore, NX Filtration believes

it will experience limited price pressure as

its pricing strategy is based on total cost of

ownership (TCO) comparisons with alternative

technologies that are well-advanced on their

cost curve (i.e. these technologies have been

existing for several decades and are being

produced and delivered by large global players).

51NX Filtration - Annual Report50 Risks and Uncertainties

Furthermore, NX Filtration continuously invests in innovation,

operations and its organisation amongst other to further improve

performance of its products and to further reduce its costs. In

addition, NX Filtration is building its global sales and distribution

network along its geographical market groups. This network allows

NX Filtration to quickly roll-out its innovative product on a global

scale.

Our business and strategy depends, in part, on significant

customers and our relationship with OEMs. If such

relationships fail to develop this could have a materially

adverse effect on our business.

NX Filtration’s business and strategy depends, in part, on significant

customers and its relationship with OEMs, which have the potential

to roll-out the NX Filtration’s technology across their customer

base. Generally, NX Filtration would have to cooperate with a

third party to integrate its products in a system or installation.

If the OEMs are unable to adequately integrate NX Filtration’s

product into their system design such roll-out may materially

adversely affect NX Filtration’s commercialisation efforts. Although

NX Filtration seeks to penetrate a market in which a wide and

diversified number of companies could become customers, in any

particular period and most notably within the current early-stage

of NX Filtration, a substantial amount of NX Filtration’s revenue

from sale of goods currently comes from and in the coming years

could come from a relatively small number of customers and the

impact of such customer concentration is unpredictable. While NX

Filtration’s initial commercial model is based on pilot systems, which

allow prospective customers to test NX Filtration’s technology

for their application, NX Filtration has successfully converted and

aims to convert these pilot systems into full-scale installations.

NX Filtration may not be successful in converting all pilot systems

into full-scale installations or, once installed, win repeat projects

from such end-customers or may only be able to do so on less

favourable terms. If NX Filtration is unable to win, renew or extend

such contracts on favourable terms, it could have a negative impact

on NX Filtration’s revenue and profits or NX Filtration’s ability

to realise its business objectives. More generally, NX Filtration’s

inability to maintain relationships with key customers or OEMs

could have a negative impact on NX Filtration’ sales and profits.

Failure by NX Filtration to win, renew or extend larger customer

contracts could have a material adverse effect on NX Filtration’s

business, financial condition, results of operations and prospects.

53NX Filtration - Annual Report52 Risks and Uncertainties

To mitigate this risk, NX Filtration seeks

to build strong relationships with OEMs

while applying certain standards, policies

and practices under which its engineers are

expected to operate. Together with the OEMs,

NX Filtration is continuously reviewing potential

areas of improvement, and ensuring thorough

evaluations of all incidents and sharing

resulting improvements and best practices.

NX Filtration seeks to grow its relationships

with OEM customers, mainly by the efforts of

its commercial staff that targets and trains

OEM customers to use HFNF technology in

their projects. Once these OEM customers

have been trained and have worked with NX

Filtration’s products, they can become an

important element in the further commercial

roll-out of NX Filtration’s products. A key

strategic advantage of NX Filtration is that

it does not provide filtration systems and

installations itself and, as such, is regarded as

an independent supplier of membrane modules

that can work with multiple OEM companies

without creating channel conflicts. NX

Filtration develops joint business plans with key

OEMs that include customer service objectives

and NX Filtration regularly monitors progress

to improve customer performance and enhance

our customer relationships.

We do business with municipal clients

and, as a result, we face risks of delays

related to the procurement process,

budget decisions driven by statutory

and regulatory determinations and

compliance with government contracting

requirements.

Doing business with public sector customers

presents a variety of risks. The procurement

process for municipal governments and their

agencies can be highly competitive, expensive

and time-consuming, often requiring significant

upfront time and expense without any

assurance that these efforts will generate a

sale. In addition, demand for NX Filtration’s

products may be adversely impacted by public

sector budgetary cycles and funding availability

that, in any given fiscal cycle, may be reduced or

delayed or not provided at all.

Public sector customers may also have

contractual, statutory, or regulatory rights to

terminate existing contracts with NX Filtration

for convenience or due to a default, and any

such termination may adversely affect NX

Filtration’s future results of operations. If a

contract is terminated due to a default, NX

Filtration may be liable for excess costs incurred

by the customer for procuring alternative

products or services or be precluded from

doing further business with government

entities. Further, entities providing services

to governments are required to comply with

a variety of complex laws, regulations, and

contractual provisions relating to the formation,

administration or performance of government

contracts that give public sector customers

substantial rights and remedies, many of which

are not typically found in commercial contracts.

These may include rights with respect to

price protection, the accuracy of information

provided to the government, contractor

compliance with supplier diversity policies and

other terms that are particular to government

contracts, such as termination rights. NX

Filtration’s non-compliance with such terms

could result in repercussions with respect to

contractual and customer satisfaction issues.

To mitigate this risk, management and

relevant internal stakeholders including the

departments for sales, sales engineering and

operations make a thorough assessment

of the likelihood that efforts for municipal

clients will result in a sale. The general rule

is that a procurement process for municipal

clients is only commenced after a satisfactory

outcome of such an assessment. Furthermore,

NX Filtration is continuously diversifying its

customer base and the sectors it currently

operates in.

NX Filtration may need additional financing

in the near future, and such financing may

not be available on favorable terms, or at

all.

Given the slower than anticipated sales growth,

the Company may need additional financing

in the future for general corporate purposes,

and to implement its growth strategy for the

longer-term. At such time, we may be unable

to obtain desired additional financing on

favorable terms or at all, including accessing

the capital markets when it may be necessary

or beneficial to do so, which could negatively

impact our flexibility to react to changing

economic and business conditions. For example,

during periods when credit markets are

volatile, lenders may fail or refuse to provide

capital. If adequate funds are not available on

acceptable terms, we may be unable to fund

growth opportunities, successfully develop or

enhance products, or respond to competitive

pressures, any of which could negatively affect

our business, financial condition and results of

operation.

We are fully cognizant of the risks associated

with our current reliance on cash reserves and

we have implemented proactive measures

to address these concerns. To mitigate the

identified risks, we have (i) secured equity and

debt funding in excess of EUR 50 million in April

2024, (ii) developed a comprehensive revenue

generation strategy aimed at diversifying

income streams, and (iii) we have implemented

robust cost management measures to optimize

operational efficiency and ensure prudent use

of available resources.

Operational Risks and

Uncertainties

If our new manufacturing facility were to

become inoperable, we would be unable

to produce sufficient products and our

business would be harmed.

The new manufacturing facility could expose

NX Filtration to product comparability

issues meaning that the products could not

immediately have similar quality attributes

before and after the manufacturing

process changes. That may further delay

the introduction of additional capacity to

manufacture its products, as the facility and

the equipment that will be used to manufacture

its products will be costly to install and could

require substantial lead time to install and

qualify for use. The new manufacturing facility

may not provide NX Filtration with all of the

operational and financial benefits it expects to

receive. Furthermore, the costs of complying

with environmental laws and regulations

and any claims concerning noncompliance, or

liability with respect to contamination in the

future, could have a material adverse effect

on NX Filtration’s business, financial condition,

results of operations and prospects.

To mitigate this risk, NX Filtration has an

extensive expansion and implementation

roadmap in place for further increasing

production capacity going forward. The

construction plans are based on a highly

modular concept that foresee a gradual scale-

up of production capacity based on existing

blueprints of key process steps, including NX

Filtration’s spinning line for the production of

its membranes.

55NX Filtration - Annual Report54 Risks and Uncertainties

We are dependent on third-party suppliers to deliver

raw materials and components for our products. Supply

interruptions could lead to interruptions of our own

production, increased costs, order cancellations and loss of

market share.

NX Filtration’s production process depends on the availability,

quality and timely supply of raw materials, components and

finished goods from third-party suppliers. NX Filtration obtains

a significant portion of its processed raw materials from a few

key suppliers. With respect to a few raw materials and/or the

processing thereof, NX Filtration has sourced and may in the

future source from one of these suppliers or other single suppliers

from time to time due to specific quality or other requirements

or because the small volumes required may not justify the cost

of sourcing from multiple suppliers or other suppliers may not be

available to provide necessary quantities. If any of NX Filtration’s

suppliers is unable to meet its obligations under purchase orders or

supply agreements, including due to their own production capacity

limitations or otherwise limited supply of materials as a result of

their obligations to other customers, or does not deliver the quality

that is necessary to meet the raw material standards applied by NX

Filtration, NX Filtration may be forced to pay higher prices to obtain

the necessary raw materials from other suppliers, may be faced

with increased lead times, may need to change suppliers, or may not

be able to locate suitable alternatives at all. Changing suppliers can

be time-consuming and costly, as resources are required to qualify

new suppliers and ensure the quality, approval and consistency of

the raw materials. Supply interruption could lead to interruption of

NX Filtration’s own production at one or more production facilities.

Furthermore, if NX Filtration experiences significant increased

demand for its products, there can be no assurance that additional

supplies of raw materials, components and finished goods will

be available when required on terms that are acceptable to NX

Filtration, or at all, or that any supplier would allocate sufficient

supplies to NX Filtration in order to meet its requirements or fill its

orders in a timely manner.

NX Filtration may experience supply problems in the future or be

unable to extend current or enter into new supply agreements,

especially agreements for raw materials with relatively low

volume requirements, where NX Filtration’s negotiating power

is limited. If NX Filtration fails to maintain its relationships with

current suppliers, if suppliers offer pricing and other terms that

are not satisfactory, or if a supplier fails to supply raw materials

that meet NX Filtration’s quality, quantity and cost requirements,

NX Filtration may be unable to fill customers’ orders on a timely

57NX Filtration - Annual Report56 Risks and Uncertainties

and cost-effective basis or in the required

quantities, which could result in production

disruptions, damage claims, order cancellations,

decreased sales or loss of market share and

damage to NX Filtration’s reputation. These

factors could, in turn, have a material adverse

effect on NX Filtration’s business, financial

condition, results of operations and prospects.

To mitigate this risk, NX Filtration always seeks

to have multiple interchangeable suppliers

for its key purchases. For its standardised

commodity raw materials and parts suppliers,

NX Filtration has a multiple supplier strategy in

place in order to ensure continuous operations.

NX Filtration is in continuous dialogue with its

key suppliers to discuss potential supply chain

challenges and, in case of any disruptions, seeks

to jointly address these and return to normal

course of business as quickly as possible. Any

potential disruptions can further be mitigated

by, temporarily, increasing stock levels and

adjusting working procedures.

Significant increases in the cost of raw

materials, components and finished goods

may materially adversely affect our

business.

NX Filtration uses various raw materials,

components and finished goods in its

operations, including polymers such as

polyethersulfone, polyvinyl chloride (PVC)

and epoxy. The prices for these raw materials,

components and finished goods fluctuate

depending on market conditions and global

demand for these materials and could

adversely affect NX Filtration’s business

and operating results. In recent years, PVC

in particular experienced a significant price

increase, largely attributable to persistent

supply-side issues globally. NX Filtration’s

ability to achieve profitability is, and will

continue to be, dependent in part upon its

ability to reduce production costs and costs

of materials required to make these products

(including raw materials As a consequence,

sudden and significant increases in the prices of

raw materials or similar volatility with respect

to the currency exchange rates between the

euro and the currency of such goods may lead

to corresponding price increases in components

and finished goods used in the assembly of

NX Filtration’s products. NX Filtration is also

indirectly exposed to fluctuations of labour

costs, commodity prices and energy costs as

the prices of raw materials and components

it orders from third-party suppliers and

manufacturers will likely increase if the costs of

NX Filtration’s suppliers increase. NX Filtration

does not hedge the price exposure for its

raw materials. Increases in the costs of raw

materials and components and as a result in

finished goods may therefore have a material

adverse effect on NX Filtration’s business,

financial condition, results of operations and

prospects, particularly because it is generally

not able to pass on such price increases

or reduce other costs to offset the higher

commodity prices. Furthermore, the price of

commodities could become so high that there

is a decline in the demand of the products

provided by NX Filtration.

To mitigate this risk, NX Filtration always seeks

to have multiple interchangeable suppliers for

its key purchases, also from a cost perspective.

For its standardised commodity raw materials

and parts suppliers, NX Filtration has a multiple

supplier strategy in place in order to ensure

continuous operations. Furthermore, NX

Filtration’s pricing strategy is based on TCO

comparisons with alternative technologies

that are likely impacted by similar raw material

price increases as NX Filtration may be exposed

to, and developments in raw material prices

are monitored and where possible addressed

through a pro-active pricing strategy.

We depend on the ability to hire and retain

management, key employees and other

qualified and skilled employees and we

may not be able to attract and retain such

personnel.

NX Filtration’s future performance and its

ability to reach its strategic objectives depends

in significant part on the continued service

of the senior management of the Company

and other key personnel, including employees

involved in research and development,

operations, marketing and sales personnel and

employees with critical know-how and expertise.

Other than customary notice periods, none of

NX Filtration’s key employees is required to stay

for any specific term. In addition, NX Filtration

does not have “key person” life insurance

policies covering any of its officers or other key

employees. The loss of the services of one or

more members of senior management or other

key personnel, or the inability to hire (additional)

members of the senior management, could

disrupt its operations, delay the development

and introduction of NX Filtration’s products and

anticipated expansion projects, which could,

in turn, have a material adverse effect on NX

Filtration’s business, financial condition, results

of operations and prospects.

NX Filtration’s success also depends on its

continuing ability to attract, retain and develop

qualified and skilled personnel, including

financial personnel, sales personnel, scientists,

designers, technical employees and engineers

with the requisite technical background.

Competition for such personnel is intense,

in particular for technical and industrial

employees, and there is significant competition

for talented individuals with the specialised

knowledge of water filtration and membrane

technology. This is particularly relevant in the

Netherlands, as the country where NX Filtration

has its headquarters, significant business

operations and research and development

activities. NX Filtration’s efforts to retain and

motivate management and key employees

or attract and retain other highly qualified

personnel in the future may not be successful.

A failure to attract and retain key personnel

may have a material adverse effect on NX

Filtration’s business, financial condition, results

of operations and prospects.

To mitigate this risk, NX Filtration seeks

to leverage on its public profile and the

widespread interest in the growing water

technology market, with in particular the

sustainable character of NX Filtration’s

technology, in order to attract talent. Hiring,

retention and development are key focus areas

of the HR department and management. NX

Filtration continuously assesses capability

gaps for its key positions and has initiatives in

place to close any employee capability gaps and

maintains a remuneration structure aimed at

attracting and retaining talent.

Disruptions of our information technology

systems could have a material adverse

effect on our business.

NX Filtration depends on its information

technology (IT) systems to, among other

things, conduct operations, to interface with

customers, to maintain financial records and

accuracy. All of NX Filtration’s internal data

is stored at Microsoft cloud services. NX

Filtration’s production process specifically

depends on the use of custom-made

processing software based upon standardised

internationally accepted software platforms

such as Siemens S7 and others. IT systems

or such custom-made processing software

failures, including risks associated with

upgrading systems, network disruptions and

breaches of security could disrupt operations

by impeding NX Filtration’s cyber security, its

protection of customer or group information

and its financial reporting, leading to increased

costs. In addition, NX Filtration’s computer

systems, including its back-up systems,

could be damaged or interrupted by power

outages, computer and telecommunications

59NX Filtration - Annual Report58 Risks and Uncertainties

failures, viruses, ransom software, internal

or external security breaches, events such as

fires, earthquakes, floods and/or errors by NX

Filtration’s employees. Disruptions, security

breaches or failures of NX Filtration’s IT

systems could impair its ability to effectively

and timely produce and provide products,

which could damage NX Filtration’s reputation

and could have a material adverse effect on

its business, financial condition, results of

operations and prospects.

To mitigate this risk, NX Filtration uses cloud

based solutions for its own IT systems from

suppliers that offer proven and tested security

which they continuously update to protect

it from the latest threads. Furthermore, to

mitigate the risks related to privacy related

information as well as data protection in

general several actions have been taken and

NX Filtration maintains a cyber-security

insurance policy. Additionally, NX Filtration has

implemented an information security policy to

safeguard and secure remote communication

and operation of its products & services. The

mitigation of these risks starts with an IT

security policy that is in place and sufficient

resources to manage the IT related risks. As

such, NX Filtration has further strengthened its

IT focus in 2024. To further mitigate the risks

related to privacy related information as well as

data protection in general several actions have

been taken.

Our current operations are international

in scope, and we plan further geographic

expansion, creating a variety of operational

challenges.

A component of NX Filtration’s growth strategy

involves the further expansion of its operations

and customer base internationally. The

countries in which NX Filtration has launched

(pilot) projects include Canada, Hungary, India,

Indonesia, the Netherlands, Philippines, Spain,

Sweden, Switzerland, Turkey and the United

States. NX Filtration is continuing to adapt to

and develop strategies to address international

markets, but there can be no guarantee that

such efforts will have the desired effect. For

example, NX Filtration anticipates that it will

need to expand its international sales force

and establish relationships with new partners

in order to expand into the countries where NX

Filtration wants to conduct its business, and

if NX Filtration fails to identify, establish and

maintain such relationships, it may be unable

to execute its expansion plans. NX Filtration

expects that its international activities will

continue to grow in the next few years as it

continues to pursue opportunities in existing and

new international markets, which will require

significant dedication of management attention

and financial resources. NX Filtration’s current

and future international business and operations

involve a variety of risks, some of which are

outside of NX Filtration’s control, including

(i) slower than anticipated HFNF membrane

technology adoption by international businesses

and municipalities; (ii) difficulty controlling the

application of NX Filtration’s solutions and the

installation of pilot systems in distant or remote

jurisdictions; (iii) changes in a specific country’s

or region’s political, economic, or legal and

regulatory environment, including pandemics,

tariffs, trade wars or long-term environmental

risks; (iv) the need to adapt and localise NX

Filtration’s products and service offerings for

specific countries; (v) greater difficulty collecting

accounts receivable and longer payment cycles;

(vi) challenges relating to underdeveloped

infrastructure or lack of qualified management

or adequately trained customers and personnel

in certain jurisdictions; (vii) challenges inherent

in efficiently managing, and the increased

costs associated with, an increased number

of employees over large geographic distances,

including the need to implement appropriate

systems, policies, benefits, and compliance

programs that are specific to each jurisdiction;

and (viii) currency exchange rate fluctuations

and the resulting effect on NX Filtration’s

revenue and expenses, and the cost and risk

of entering into hedging transactions if NX

Filtration choses to do so in the future. If NX

Filtration invests substantial time and resources

to further expand its international operations

and is unable to do so successfully and in a

timely manner, it could have a material adverse

effect on NX Filtration’s business, financial

condition, results of operations and prospects.

To mitigate this risk, NX Filtration’s processes

are set up to quickly understand, adapt to, and

effectively apply international cultural and

legal norms for doing business. We have actual

presence of dedicated staff in some regions we

operate in. We continuously monitor economic,

political and general societal changes and, where

deemed necessary, develop response strategies

to such events, including pandemics.

Technology Risks and

Uncertainties

Our failure to protect intellectual property

rights may undermine our competitive

position, and litigation to protect our

intellectual property rights may be costly,

time consuming and distracting from daily

operations.

Intellectual property rights are vital to NX

Filtration’s business. Although NX Filtration

has taken many protective measures to protect

its technologies and know-how, including

patents, trade secrets, employee and third-

party nondisclosure agreements, trademarks,

knowledge (including on the particular set-up

of the supply-chain and production process),

password protections and other measures,

policing the unauthorised use of proprietary

technology can be difficult, time-consuming

and expensive. Also, litigation may be necessary

to enforce NX Filtration’s intellectual property

rights, protect its trade secrets or determine

the validity and scope of the proprietary rights

of others. Such litigation may result in NX

Filtration’s intellectual property rights being

challenged, limited in scope or declared invalid

or unenforceable. NX Filtration cannot be

certain that the outcome of any litigation will

be in its favor, and an adverse determination in

any such litigation could impair its intellectual

property rights and may harm NX Filtration’s

business, prospects and reputation.

NX Filtration inter alia relies on (i) multiple

patents relating to NX Filtration’s HFNF

technology, (ii) trade secrets and trademark

rights, and (iii) non-disclosure, confidentiality

and other types of contractual restrictions to

establish, maintain and enforce its intellectual

property and proprietary rights. However,

the rights of NX Filtration under these laws

and agreements may not fully protect NX

Filtration, and the actions NX Filtration

takes to establish, maintain and enforce

its intellectual property rights may not be

adequate. For example, NX Filtration’s trade

secrets and other confidential information

could be disclosed in an unauthorised manner

to third parties, NX Filtration’s owned or

licensed intellectual property rights could be

challenged, invalidated, circumvented, infringed

or misappropriated or the intellectual property

rights of NX Filtration may not be sufficient to

provide it with a competitive advantage. Any

successful challenge to any of NX Filtration’s

intellectual property rights could deprive

NX Filtration of rights necessary for the

successful commercialisation of its products

or any technology relating thereto (including

the HFNF technology). Patent prosecution

process is expensive and time consuming, and

NX Filtration may not file and prosecute all

necessary or desirable patent applications

at a reasonable cost or in a timely manner or

in all jurisdictions where protection may be

commercially advantageous. It is also possible

that NX Filtration fails to identify patentable

aspects of its research and development output

before it is too late to obtain patent protection.

In addition, the laws of some countries do not

61NX Filtration - Annual Report60 Risks and Uncertainties

protect proprietary rights as fully as Dutch law does. As a result,

NX Filtration may not be able to protect its proprietary rights

adequately abroad. Furthermore, intellectual property rights can

be limited in time. Each of NX Filtration’s current patents provide

protection against infringement of the technology patented by

such patent for 20 years after the filing date of the respective

patent application with the relevant patent office. Any of the above,

individually or in aggregate, could have a material adverse effect on

NX Filtration’s business, financial condition, results of operation or

prospects.

To mitigate this risk, NX Filtration regularly monitors the market

and takes steps, when appropriate, to ensure compliance with its

intellectual property rights which may include various intellectual

property related audits. In addition, control and governance

frameworks are in place to establish, maintain and protect NX

Filtration’s intellectual property rights and minimize the risk of

data leakage as far as possible. Furthermore, NX Filtration has

developed all its critical production processes in-house based on the

extensive industry experience of its team of experts. NX Filtration

benefits from a strong team of leading membrane technology

experts with technical, operational and commercial experience with

an extensive background in membrane development, production and

commercialisation. This team has been instrumental in developing

the HFNF technology, bringing this from lab-scale to industrial-

scale, developing the required innovative and patented production

methods and processes and reliably producing the HFNF membranes

and modules.

We may be unsuccessful in adequately protecting our

technological know-how that is not covered by intellectual

property registration.

NX Filtration relies on technology, know-how, and business and

trade secrets, some of which NX Filtration believes cannot be

adequately protected through registered intellectual property

rights. Consequently, there is a risk that third parties, in particular

competitors, may copy such technology and know-how or develop it

independently and later challenge NX Filtration’s use of it, especially

considering that technology is constantly evolving and that NX

Filtration’s competitors are engaged in significant research and

development work on products that are aimed at competing with

NX Filtration’s products. In addition, employees who, in the course

of their employment with NX Filtration, have access to important

proprietary information which may or may not be protected by

intellectual property rights may leave to go work for a competitor.

63NX Filtration - Annual Report62 Risks and Uncertainties

To mitigate this risk, NX Filtration relies on

confidentiality agreements with suppliers and

customers, noncompete clauses in contracts

with employees and technical precautions to

protect its technology, knowhow and other

proprietary information. Furthermore, we

apply compartmentation in our processes. For

different parts of our production process and

equipment we make sure that no individual

supplier or employee has a full picture of the

total manufacturing process. However, there

is no guarantee that these agreements and

precautions or NX Filtration’s ability to enforce

its contractual rights, will provide sufficient

protection in the case of any unauthorised

access or use, misappropriation or disclosure

of such information. Defending against any

unauthorised access or use, misappropriation

or disclosure of NX Filtration’s technology,

knowhow, and other proprietary information

may result in lengthy and costly litigation or

administrative proceedings and may cause

significant disruption to the business and

operations of NX Filtration. If NX Filtration

is unable to protect or effectively enforce its

proprietary technology and information, this

could have a material adverse effect on NX

Filtration’s business, financial condition, results

of operations and prospects.

New products or technological

improvements by competitors, including

by larger players in the industry investing

in research and development for product

substitution of our HFNF products, or

improvements to our HFNF technology

could materially adversely affect our

business and our ability to gain market

share.

Disruptive changes in technology and product

standards could render NX Filtration’s products

less competitive, or even obsolete. Other

companies that seek to enhance traditional

technologies have recently introduced or

are currently developing products based on

emerging and potential technologies. These

competitors are engaged in significant research

and development work on products that

may be similar to NX Filtration’s products.

New products could be introduced that are

in direct competition with, or superior to, NX

Filtration’s products. Competing technologies

that outperform NX Filtration’s technology

could be developed and successfully introduced

and, as a result, NX Filtration’s existing or

future products may not be able to compete

effectively in its current or future target

markets. If NX Filtration’s technology is not

adopted by its customers, or if its technology

does not meet industry requirements, NX

Filtration’s existing or future products may

not gain or maintain market acceptance. If NX

Filtration cannot adapt to changing market

conditions should customer behaviour change,

or if NX Filtration fails to develop, manufacture

and market products that improve upon

existing technologies, its business, financial

condition, results of operations and prospects

could be materially adversely affected.

To mitigate this risk, NX Filtration continues

to significantly invest in R&D to remain

competitive. NX Filtration monitors and

analyses competitors through various sources

such as trade associations, universities, banks,

employees and their intellectual property

filings, and it actively maintains, protects and

expands its own intellectual property portfolio.

As a result of the limited innovation that has

taken place by competitors, conventional

technologies are not always equipped to cope

with the challenges and demands of today’s

environment. NX Filtration believes its HFNF

product provides a number of advantages

over these technologies, including but not

limited to (i) superior filtration characteristics

and performance; (ii) sustainability benefits

throughout the lifetime of the product, as

it typically reduces energy consumption and

avoids the use of pre-treatment chemicals; and

(iii) reduced physical footprint, as it typically

reduces the number of treatment steps.

Furthermore, NX Filtration’s products are

developed and produced in-house, which makes

NX Filtration less vulnerable to new market

developments, resulting in short innovation

cycles, cross leverage of concepts, modularity

of modules and short time to market.

Compliance Risks and

Uncertainties

We are exposed to risks associated with

product liability, warranties, recall claims

or other lawsuits or claims that may be

brought against us.

NX Filtration is exposed to product liability

and warranty claims, as well as reputational

damage, in the normal course of business in

the event that (i) its products fail or allegedly

fail to perform as expected or otherwise do not

conform to the product’s specifications or the

expectations of its customers or (ii) the use of

NX Filtration’s products results, or is alleged to

result, in property damage.

Furthermore, NX Filtration may become subject

to other proceedings alleging violations of due

care, safety provisions and claims arising from

breaches of contract (such as delivery delays)

or fines imposed by government or regulatory

authorities in relation to its products and its

operations. Any such lawsuits, proceedings

and other claims could result in significant

increased costs, including costs to defend

against these claims and/or make payments

to compensate for damages. In addition, under

certain circumstances, any such issues could

give rise to an investigation by regulatory

authorities, which could result in the need

for remedial action such as a recall requiring

the repair or replacement of NX Filtration’s

products or even a prohibition of future sales.

Furthermore, any product liability or warranty

issues may damage NX Filtration’s reputation

as a provider of high quality, technologically

advanced and safe products and place a

significant strain on management and divert

management’s attention from other business

concerns. Any litigation or complaints and any

adverse publicity surrounding such allegations

or actions could have a material adverse effect

on NX Filtration’s business, financial condition,

results of operations and prospects.

To mitigate this risk, NX Filtration has insurance

coverage for claims arising from warranty

and product liability lawsuits, proceedings

and other claims, but the insurance coverage

could prove insufficient in individual cases.

NX Filtration aims to have back-to-back

agreements in place with its suppliers, where

possible. Furthermore, throughout the design

and production phases, there is a continuous

focus on quality with quality assurance being

an integral part of NX Filtration’s working

processes. Moreover, NX Filtration will seek

to continuously improve its products through

valuable performance information obtained

from its team of leading membrane experts

and engineers through amongst others the

increasing scale-up of pilots.

We are subject to various laws and

regulations in multiple jurisdictions in which

we operate, and unfavorable changes

or failure by us to comply with these

regulations could have a material adverse

effect on our business.

NX Filtration and its products and business

operations are subject to a broad range of

local, national and multi-national laws and

regulations in the Netherlands and other

jurisdictions in which it operates and markets its

products. For instance, extensive environmental

and product stewardship legislation applies to

NX Filtration’s products and the components

and parts used in manufacturing these

products. Such legislation includes, inter alia,

safety requirements, information requirements

and requirements relating to the hazardous

properties of substances used. NX Filtration

is particularly subject to Regulation (EC) No

65NX Filtration - Annual Report64 Risks and Uncertainties

1907/2006 of the European Parliament and of

the Council of 18 December 2006 concerning

the Registration, Evaluation, Authorisation

and Restriction of Chemicals (REACH), a

regulation of the European Union adopted

to improve the protection of human health

and the environment from the risks that can

be posed by chemicals. Under REACH, NX

Filtration has to demonstrate to the European

Chemicals Agency how the substances used by

NX Filtration can be safely used. Furthermore,

NX Filtration’s production facilities each

qualify as a facility (inrichting) under the

Dutch Environmental Management Act (Wet

milieubeheer) and need to comply with strict

environmental rules in the Activities Decree

(Activiteitenbesluit).

NX Filtration’s business operations must

therefore comply with laws and regulations

relating to, inter alia, the protection of natural

resources, the management of hazardous

substances and wastes, air emissions, water

discharges, the use, management, storage,

treatment, transportation and disposal of

waste and by-products, the protection and

restoration of plants, wildlife and natural

resources, the investigation and remediation of

contaminated property, public and workplace

health and safety (such as rules regarding the

handling of carcinogenic substances or rules

governing the use of protection equipment)

and data protection. Many new laws and

amendments, as well as amendments to existing

ones, have become more stringent, particularly

in the European Union. NX Filtration may incur

additional costs to ensure that it operates its

business and supplies products that comply with

applicable laws and regulations, and any failure

to comply with such laws and regulations may

lead to fines, penalties or claims, injunctions

which may lead to disruptions of NX Filtration’s

business, or harm its reputation, which may

have a material adverse effect on NX Filtration’s

business, financial condition, results of

operations and prospects.

To mitigate this risk, the quality of NX

Filtration’s products and compliance to the

relevant safety and quality certificates is

strictly embedded in the process control

and monitored by the QHSE-department.

Additionally, NX Filtration’s legal team

monitors or requests specialist assistance from

external counsel about laws and regulations

across multiple jurisdictions. Finally, in

order to increase the safety awareness and

accreditations of its personnel NX Filtration

uses tailormade education to train its people.

Furthermore, NX Filtration prepares, rolls

out and makes available relevant policies and

procedures which are regularly reviewed and

audited. NX Filtration implements observations

made during inspections by line management,

staff and relevant regulatory parties. NX

Filtration’s management system complies

with ISO 14001. This has resulted in improved

process technologies and people skills, as well

as formalised procedures, checklists, training

and instructions.

We may be exposed to the risk of fraud and

other dishonest activities, which could have

a material adverse effect on our business,

financial condition or results of operations.

We have implemented a set of internal control

measures and compliance policies, including

amongst others, an authorization policy,

sufficient level of segregation of duties,

approval of bank payments, reporting and

monitoring framework, which we believe is

appropriate for NX Filtration. Considering

the size and concentrated locations of NX

Filtration, the existing internal control and

reporting framework, we believe all material

events are timely known to the Management

Board and enable us to take appropriate

actions. However, the risk of fraudulent or other

dishonest activities occurring and affecting

NX Filtration cannot be excluded. Further, as

NX Filtration grows or expands in international

markets, its internal controls may need to be

adapted in order to effectively prevent and

detect fraud and other dishonest activities.

However, there can be no assurance that NX

Filtration will be able to adapt such internal

controls in a timely manner or at all or that they

will be effective. Any fraud incident or dishonest

activity affecting NX Filtration, whether as a

result of the activities of employees, partners,

suppliers or other third parties, may result in

financial losses, a loss of customer trust and

confidence, as well as litigation or financial or

other regulatory penalties being imposed, any

of which could have a material adverse effect

on NX Filtration’s business, financial condition

or results of operations.

We furthermore enforce a comprehensive code

of conduct that outlines expected behavior

and ethical standards for all employees.

We promote a culture of integrity and

transparency, making it clear that fraudulent

activities will not be tolerated. As part of

our regularly held business meetings, senior

management reviews financial statements,

reports, and key performance indicators.

This oversight helps identify anomalies or

inconsistencies that may indicate fraudulent

activities. Our financial department

continuously monitors systems to detect

unusual patterns or behaviors in financial

transactions. We started a formalization

project on fraud risks and completed the

formal fraud risk assessment in 2024. A formal

fraud risk management programme fits

our ambitions to grow to a set of defined or

managed internal control measures to mitigate

fraud risks.

Risk management and control

systems

The Management Board is responsible

for the control environment, including risk

management and internal control systems

in order to properly manage the strategic,

operational and other risks and uncertainties

that could have a material adverse effect on NX

Filtration’s business and day-to-day operations.

The applicable risks and uncertainties for NX

Filtration are evaluated on a periodic basis by

the Management Board and discussed with the

Supervisory Board.

The Management Board recognizes the

importance of a formalized approach towards

risk management for a rapidly growing

organisation like NX Filtration. In practice this

means that it is important to maintain the

right balance between formalized systems

and procedures and the informal hands-on

approach that is necessary to further boost

the growth of the company. NX Filtration’s

corporate culture supporting the values of

curiosity, honesty and collaboration is also an

important ‘soft-control’ to mitigate risks and

fraud.

During the financial year 2024, NX Filtration

continued to support its corporate culture

and other foundations of its risk management

and control systems with its Code of

Conduct, Human Rights Policy, Whistle-

blower Policy, Insider Trading Policy, safety

and quality certifications, periodic reports

and meetings, as further described below. NX

Filtration introduced a structured approach to

introducing and maintaining the understanding

of the company’s vision and mission within the

team.

In addition, further consolidation and

professionalization has been achieved in the

financial year 2024. We implemented a new

formal fraud risk framework and a new internal

control framework. These frameworks are

essential pillars in fortifying NX Filtration

against potential risks and ensuring the

integrity of its operations. In the years to come,

NX Filtration will continue to professionalize

and strengthen its organization and control

environment, further optimizing its control

matrix. NX Filtration has implemented a further

67NX Filtration - Annual Report66 Risks and Uncertainties

segregation of duties, not only to properly

divide responsibility and accountability, improve

the quality of the staff, but also to create a

system of checks and balances. To support

this further, NX Filtration optimized the data

warehouse and reporting system in which our

business processes as well as our day-to-day

working procedures are formally documented.

The Management Board, to the best of its

knowledge, is not aware of any significant

deficiencies in its control environment, including

risk management and internal control systems.

Code of Conduct

NX Filtration has a Code of Conduct that

applies to all employees. The Code of Conduct

is available in Dutch, English, German, French

and Spanish making it easily understandable

for all of our employees. The principles and

best practices established in the Code of

Conduct reflect the corporate culture that the

Management Board wants to embed in the

day-to-day routines of all employees. The core

values of NX Filtration are included in the Code

of Conduct and relate to professional conduct,

flexibility, reliability and integrity and safety.

The Code of Conduct includes topics including

acting with integrity, gifts, anti-bribery,

corporate social responsibility and health and

safety. The Code of Conduct can be found on

NX Filtration’s website. NX Filtration also has a

Supplier Code of Conduct in order to ensure our

supply chain abides by our culture and values.

Part of NX Filtration’s compliance framework

is an annual sign-off by our employees to

acknowledge compliance with our Code of

Conduct and related policies and procedures,

including a commitment to cooperate fully

with any requests for information, documents,

or assistance. No violations of the Code of

Conduct were reported in the financial year

2024.

Business Ethics Policy

NX Filtration has a Business Ethics Policy with

the objective to:

(i) outline the expectations that NX

Filtration has of its employees and their

behaviour relating to ethics & compliance and

corresponding laws and regulations;

(ii) ensure that employees understand the

importance of conducting business in an ethical

way and respecting the principles that are set

out in the Code of Conduct, the Human Rights

Policy and the Customer & Supplier Screening

Policy;

(iii) highlight the role of managers within NX

Filtration in leading ethics & compliance efforts

by creating a business environment in which

employees understand their duties and feel

safe to speak up about issues relating to ethics

& compliance without fear of retaliation; and

(iv) detail the requirements for the Ethics &

Compliance programme and the minimum

standards that apply thereto, including a

training and awareness programme for

employees focused on our corporate culture,

core values and the key ethics & compliance risk

areas that have been identified.

Human Rights

NX Filtration is committed to shape its

activities and operations within a framework

of proper standards and values, while fully

complying with all applicable laws and

regulations. It also means upholding human

rights within NX Filtration and throughout

its supply chain. NX Filtration’s commitment

is embedded in NX Filtration’s Human Rights

Policy, Code of Conduct and Supplier Code

of Conduct, which it applies vis-à-vis its

employees, stakeholders and business partners.

NX Filtration’s approach towards human

rights is based on the Universal Declaration

of Human Rights, the core conventions of

the International Labour Organization and

the UN Guiding Principles on Business and

Human Rights (UNGPs). NX Filtration’s core

Human Rights Standards focus on (i) access

to water, (ii) no child labour and/or hard

work, (iii) non-discrimination, (iv) safe work

conditions, (v) no harassment and violence,

(vi) freedom of association and the right to

collective bargaining, (vii) no forced labour, (viii)

work-life balance, (ix) recognition and reward,

and (x) respect for human rights in high risk

contexts. NX Filtration supports its employees

in converting the Human Rights Policy into

practical tools by developing relevant human

rights guidelines.

NX Filtration is committed to provide remedy

to correct negative impacts of human rights

violations across our value chain. Respect for

human rights includes preventing human rights

issues or addressing them at an early stage

or to seek adequate remedy in case human

rights are violated. NX Filtration promotes

an open feedback culture and carries out

human rights due diligence processes and has

not come across any issues in this respect in

2024. Because NX Filtration’s growth strategy

involves the further expansion of its operations

and customer base internationally, human

rights due diligence will require increased

attention.

Whistle-blower Policy

NX Filtration employees are offered the

opportunity to report irregularities or

suspicions with regards to violations of the

Code of Conduct, the law, safety policies,

the environment or any other forms of

misbehaviour without bringing their (legal)

position in jeopardy. Reporting of such

instances by NX Filtration employees can be

either by designated ‘persons of trust’ or in

complete anonymity through a prescribed

website. In 2024, NX Filtration has appointed

an internal and external confidential adviser as

anyone working within NX Filtration should feel

safe and encouraged to speak-up. As far as NX

Filtration is aware, no violations or irregularities

were reported under the Whistle-blower Policy

in the financial year 2024.

Insider trading policy

NX Filtration continues to adhere to its

implemented regulations covering securities

transactions by the members of the

Management Board and Supervisory Board

and other designated employees that have

or may have access to inside information.

The Insider trading policy is published on

NX Filtration’s website. The Insider Trading

Policy aims to promote compliance with the

relevant obligations and restrictions under

applicable securities law, including Regulation

(EU) 596/2014 and intends to limit the risk of

NX Filtration’s good reputation and business

integrity being harmed as a result of prohibited

or undesirable dealing in NX Filtration

securities. No violations or irregularities were

reported in the financial year 2024.

Safety and quality certifications

NX Filtration has been awarded with several

ISO certifications and possesses other relevant

safety and quality certificates. The quality of

NX Filtration’s products and compliance to

the relevant safety and quality certificates is

strictly monitored by the QHSE-department.

69NX Filtration - Annual Report68 Risks and Uncertainties

Corporate Governance

General

NX Filtration N.V. is a public limited

liability company (naamloze vennootschap)

incorporated under the laws of the

Netherlands, with its registered seat in

Amsterdam and, since completion of its

headquarters and manufacturing facility

mid-2024, with its registered office at

Haaksbergerstraat 95, 7554 PA, Hengelo, the

Netherlands (NX Filtration or the Company).

The Company is registered with the trade

Commerce (Kamer van Koophandel) under

number 64951030 and its Legal Entity Identifier

(LEI) is 254900YF0PQV9APMA050. For

details regarding NX Filtration’s share capital,

reference is made to Capital Structure.

Corporate governance within NX Filtration is

based on statutory requirements applicable

to public limited liability companies in the

Netherlands, the Dutch Corporate Governance

Code as well as NX Filtration’s articles of

association, which are publicly available on the

Investor Relations section of its website

www.nxfiltration.com (the Articles of

Association).

This section gives an overview of the information

concerning the Management Board, the

Supervisory Board and the General Meeting.

NX Filtration has a two-tier board structure

consisting of the Management Board and the

Supervisory Board. The Management Board

together with one senior manager of the

Company forms the senior management of

the Company (Senior Management) which is

responsible for the day-to-day management of

the Company. The Management Board and the

Supervisory Board are jointly responsible for the

governance structure of NX Filtration.

Management Board

Powers, responsibilities and functioning

The Management Board is the executive body

and is entrusted with the management of the

Company and responsible for the continuity

of the Company, under the supervision of the

Supervisory Board. The Management Board’s

responsibilities include, among other things,

setting the Company’s management agenda,

developing a view on a sustainable long-term

value creation by the Company, enhancing the

performance of the Company, developing a

strategy, identifying, analysing and managing

the risks associated with the Company’s

strategy and activities and establishing and

implementing internal procedures, which

safeguard that all relevant information is known

to the Management Board and the Supervisory

Board in a timely manner. The Management

Board takes into account the impact the

actions of the Company have on people and the

environment and to that end weighs relevant

stakeholder interests. The Management Board

may perform all acts necessary or useful for

achieving the Company’s corporate purposes,

except for those expressly attributed to the

General Meeting or the Supervisory Board as a

matter of Dutch law or pursuant to the Articles

of Association.

The Management Board has informed the

Supervisory Board of the main outlines of the

Company’s strategic policy, the general and

financial risks, and the risk management and

control systems. Each Managing Director,

together with one other Managing Director, is

jointly authorised to represent the Company.

Pursuant to the Articles of Association, the

Management Board may grant one or more

persons, whether or not employed by the

Company, a power of attorney or other form of

continuing authority to represent the Company

or to grant one or more persons such titles as it

sees fit. No such powers of attorney have been

granted.

The General Meeting appoints the Managing

Directors. The Supervisory Board will nominate

one or more candidates for each vacant seat.

A resolution of the General Meeting to appoint

a Managing Director other than in accordance

with a nomination by the Supervisory Board

can be adopted by a majority of the votes

cast representing at least one third of the

Company’s issued capital. If such quorum is

not met, the Company is entitled to convene a

second meeting where no quorum shall apply.

The Articles of Association provide that a

Managing Director may be suspended or

dismissed by the General Meeting at any time.

A resolution of the General Meeting to suspend

or dismiss a Managing Director other than

pursuant to a proposal by the Supervisory

Board can be adopted by a majority of the

votes cast, representing at least one third of

the Company’s issued capital. If such quorum is

not met, the Company is entitled to convene a

second meeting where no quorum shall apply.

The Articles of Association provide that the

number of Managing Directors is determined by

the Supervisory Board after consultation with

the Management Board, but there will be at

least two Managing Directors. The Supervisory

Board has appointed one of the Managing

Directors as CEO.

Members of the Management Board

The Management Board is composed of the

following members:

Member End of

Name Age Position since current term

Mr F.J. 46 CEO

6 September

(Floris Jan) 2024 2028

Cuypers

Mr M.A. 53 COO 2019 AGM of 2025

(Michiel)

(nominated

Staatsen

for reappoint-

ment)

Mr H.D.W. 72 CTO 2016 AGM of

(Erik) Roesink 2025

Mr J.F. 52 CFO

6 September

(Jan Feie) 2024 2028

Zwiers

Mr F.J. Cuypers (born 1978, Dutch) is NX

Filtration’s CEO since 1 September 2024. Prior

to joining NX Filtration, Mr Cuypers has been

COO and CCO at SHV Energy since 2023,

providing decentralized, low-carbon and clean

energy solutions to business and residential

customers around the world. He served as

Chief Operating Officer (COO) and Chief

Commercial Officer (CCO) at ERIKS between

2018 and 2023, an industrial service provider,

offering technical products and services to

all sections of industry. He holds a Master of

Science in Applied Physics from Delft University

of Technology, the Netherlands.

71NX Filtration - Annual Report70 Corporate Governance

Mr M.A. (Michiel) Staatsen (born 1971, Dutch)

is NX Filtration’s COO. Between May 2019 and

June 2023, he held the position of both CEO

and COO of NX Filtration. Prior to joining NX

Filtration, he held various positions related

to the food and water markets. He held the

position of chief operating officer at Pré Pain, a

leading manufacturer of frozen bake off bread

in North-West Europe. Michiel Staatsen was

the chief operating officer and chief financial

officer of Grand Duet B.V., an industrial bake-

off bread bakery. He holds a master’s degree

in civil engineering from Delft University of

Technology in Delft, the Netherlands.

Mr H.D.W. (Erik) Roesink (born 1952, Dutch)

founded NX Filtration in 2016 and held the

position of CEO between 2016 and 2019. Since

2019 he focuses on business and technology

development and currently holds the role of

CTO. He is also a Emeritus Professor advanced

membranes for aqueous applications in

the research cluster membrane science &

technology at the University of Twente in

Enschede, the Netherlands since 2013. Prior

to joining NX Filtration, Erik Roesink worked

in various director roles in research and

development, strategic innovation and business

development at Pentair and Norit X-Flow.

Mr J.F. (Jan Feie) Zwiers (born 1972, Dutch) is

NX Filtration’s CFO since 1 August 2024. Prior

to joining NX Filtration, he held the position

of Group Finance & Control Director and

Executive Board member at BDR Thermea

Group, a Global manufacturer and distributor

of sustainable smart indoor climate solutions

to building owners and users. Mr Zwiers holds

an Executive Master of Finance & Control from

the University of Amsterdam and a Master of

Science in Business Administration from Tilburg

University, both in the Netherlands.

Senior Management

The members of the Management Board

comprise the Senior Management of the

Company together with the following non-

statutory member:

Member

Name Age Position since

Mr A.M. 48 Chief 2021

(Alejandro) Commercial

Roman Fernandez Officer

Mr A.M. (Alejandro) Roman Fernandez

(born 1977, Spain) is NX Filtration’s Chief

Commercial Officer. Prior to joining NX

Filtration, Alejandro was a Vice President and

Global Commercial Head at Organica Water

where he was responsible for all sales activities

globally, managing the regional sales teams

and expanding the global partner network.

Prior to that, Alejandro held various roles

at Pentair (Netherlands), Xylem (Spain and

United Kingdom) and Thames Water (United

Kingdom). Alejandro holds a degree in Chemical

Engineering from the University of Cadiz (Spain)

and a degree in Environmental Science from

Kingston University in London (United Kingdom).

The business address of the Senior

Management of the Company is

Haaksbergerstraat 95, 7554 PA, Hengelo

the Netherlands.

Supervisory Board

Powers, responsibilities and functioning

The Supervisory Board supervises the

Management Board and the general course of

affairs of the Company, its subsidiaries and the

business affiliated therewith. The Supervisory

Board is accountable for these matters to the

General Meeting. The Supervisory Board also

provides advice to the Management Board.

In performing its duties, the Supervisory

Board focuses on the effectiveness of the

NX Filtration’s internal risk management and

control systems and the integrity and quality of

the financial reporting. The Supervisory Board

assists the Management Board with advice

on general policies related to the activities of

NX Filtration. In the fulfilment of its duty, the

Supervisory Board focusses on the interests of

the Company and its related business.

Members of the Supervisory Board

The Supervisory Board is composed of the

following members:

End of

Name Age Position current term

Ms C. 54 Member AGM of 2025

(Carolina) Wielinga (chair)

(nominated

for reappoint-

ment)

Mr B.A.M. 60 Member AGM of 2025

(Benno) van Dongen

(nominated

for reappoint-

ment)

Mr J.G. 45 Member AGM of 2027

(Hans) Slootweg

The business address of the Supervisory Board

of the Company is Haaksbergerstraat 95,

7554 PA, Hengelo, the Netherlands. Reference

is made to the Supervisory Board Report in this

annual report for their professional bio’s.

Remuneration

The updated remuneration policy applicable to

the Management Board was approved by the

General Meeting on 6 September 2024, and

applies as of 1 August 2024, with the exception

of the increase in the on target opportunity

level for STI, that came into effect on 1

January 2025. Any subsequent amendments

to the Company’s remuneration policy are

subject to adoption by the General Meeting,

which resolution can only be adopted by a

majority of the votes cast. The Supervisory

Board shall make a proposal to this effect. The

remuneration of, and other agreements with,

the Managing Directors are required to be

determined by the Supervisory Board, with due

observance of the remuneration policy.

The Company’s remuneration policy aims

to attract, motivate and retain qualified

individuals and reward them with a market

competitive remuneration package that

focuses on achieving sustainable financial

results aligned with the sustainable long-term

business strategy of the Company and fosters

alignment of interests of Managing Directors

with shareholders.

Based on the remuneration policy, the

remuneration of the Managing Directors

consists of the following components:

• annual base fee;

• pension and other benefits, except for

the current COO and CTO, which are not

entitled to pension benefits;

• STI, except for the current CTO;

• LTI, except for the current CTO; and

• a sign-on bonus upon appointment. For the

avoidance of doubt, the current COO and

CTO were not entitled to a sign-on bonus.

A summary of the paid or accrued remuneration

of the Management Board and an explanation

of these remuneration components is set out

in the Remuneration Report of the Supervisory

Board in this annual report.

Short-term incentive (STI)

The STI is a variable cash bonus incentive of

which achievement is tied to specific financial

and non-financial targets derived from the

Company’s (annual) strategic plan, allowing to

apply focus on short-term business critical goals

and drive behaviour. The Supervisory Board

may, but is not obliged to, determine that a

Managing Director becomes entitled to an STI.

The financial and non-financial performance

conditions for the STI will be set taking into

account the strategy of the Company and

the five year business plan of the Company,

73NX Filtration - Annual Report72 Corporate Governance

reflecting the Company’s long term interests.

As such, these conditions are closely linked to

enhancing the sustainable performance of the

Company and long-term value creation.

Long-Term incentive (LTI)

The LTI is a variable equity incentive of which

achievement is tied to targets reflecting long-

term stakeholder value creation, enhancing the

pay-for-performance narrative and aligning

recipients with the shareholder experience. The

Supervisory Board may, but is not obliged to,

determine that a Managing Director becomes

entitled to an LTI. The LTI allows Managing

Directors to receive annual conditional awards

of Performance Shares under the Company’s

Long Term Incentive Plan for Managing Directors

as amended from time to time, subject to the

approval of the Supervisory Board in accordance

with the Remuneration Policy. The LTI is designed

to incentivize and reward sound long-term

decision making and align the interests of the

Managing Directors with those of shareholders

and other stakeholders. The vesting of an award

is subject to the achievement of predetermined

financial and non-financial (including ESG)

performance conditions set by the Supervisory

Board on a yearly basis. In case the Performance

Shares are unconditionally granted to the

Managing Directors, the Managing Directors will

be required to hold such granted Performance

Shares for an additional period of two years

following the grant of Performance Shares

becoming unconditional, subject to any sales

required in order to meet tax liabilities, if

required.

Related Party Transactions

All legal entities that can be controlled, jointly

controlled or significantly influenced are

considered to be a related party. Also, entities

which can control, jointly control or significantly

influence the Company are considered a related

party. In addition, statutory and supervisory

directors and close relatives are regarded as

related parties. The following transactions were

carried out with related parties:

• Key management compensation (including

sign-on bonuses)

• Management fee to Infestos Holding E B.V.

• Consultancy Agreement with Infestos

Holding E B.V.

•

Issuance of shares to Infestos Holding E B.V.

as part of the Company’s public equity

raise in April 2024.

• The agreement with Polymer Filtration

Solutions GmbH for the supply of

sulfonated poly(ether sulfone).

All these transactions were and are made on

terms equivalent to those that prevail in arm’s

length transactions.

General Meeting

According to the Articles of Association,

General Meetings can be held in Amsterdam,

in the Netherlands, or any other place in the

Netherlands, at the choice of those who call the

meeting.

The annual General Meeting must be held at

least once a year, within six months after the

close of each financial year. An extraordinary

General Meeting may be convened, whenever

the Company’s interests so require, by the

Supervisory Board or the Management Board.

In addition, shareholders or others with meeting

rights under Dutch law representing jointly at

least one-tenth of the issued and outstanding

share capital may, pursuant to the Dutch

Civil Code, request that a General Meeting be

convened. If no General Meeting has been held

within eight weeks of the shareholders making

such request, the shareholders making such

request may, upon their request, be authorised

by the competent Dutch court in preliminary

relief proceedings to convene a General

Meeting.

The convocation of the General Meeting must

be published through an announcement by

electronic means. Notice of a General Meeting

must be given by at least such number of days

prior to the day of the meeting as required

by Dutch law, which, at the date of this

annual report, is 42 calendar days. The notice

convening any General Meeting must include,

among other items, the agenda stating the

items to be discussed, the venue and time

of the General Meeting, the requirements

for admittance to the General Meeting, the

address of the Company’s website, and such

other information as may be required by

Dutch law. The agenda for the annual General

Meeting must contain specific subjects,

including, among other things, the adoption

of the annual accounts, the discussion of any

substantial change in the corporate governance

structure of the Company and the allocation

of the profits, insofar as these are at the

disposal of the General Meeting. In addition,

the agenda must include such items as have

been included in it by the Management Board,

the Supervisory Board or the shareholders and

others with meeting rights under Dutch law

(with due observance of Dutch law as described

below). If the agenda of the General Meeting

contains the item of granting discharge to

the Managing Directors and the Supervisory

Directors concerning the performance of their

duties in the financial year in question, the

discharge must be mentioned on the agenda as

separate items for the Management Board and

the Supervisory Board, respectively.

Shareholders and others with meeting rights

under Dutch law representing jointly at least

3% of the Company’s issued and outstanding

share capital may request, by a motivated

request, that an item is added to the agenda.

Such requests must be made in writing, must

either be substantiated or include a proposal

for a resolution, and must be received by the

Company at least 60 days before the day

of the General Meeting. No resolutions may

be adopted on items other than those that

have been included in the agenda (unless the

resolution would be adopted unanimously

during a meeting where the entire issued capital

of the Company is present or represented).

Shareholders who, individually or with other

shareholders, hold Ordinary Shares that

represent at least 1% of the issued and

outstanding share capital or a market value of

at least €250,000 may request the Company

to disseminate information that is prepared by

them in connection with an agenda item for a

General Meeting, provided that the Company

has done a so-called “identification round” in

accordance with the provisions of the Dutch

Securities Transactions Act. The Company can

only refuse disseminating such information,

if received less than seven business days prior

to the day of the General Meeting, if the

information gives or could give an incorrect or

misleading signal or if, in light of the nature

of the information, the Company cannot

reasonably be required to disseminate it.

More information about the authority of the

General Meeting and the articles of association

can be found on NX Filtration’s website.

Special provisions relating to

shares and Management Board’s

powers

Unless indicated otherwise, there are no

restrictions on the transfer of shares, the

exercise of voting rights or the term for

exercising those rights, and there are no special

controlling rights attached to shares. Pursuant

to a resolution adopted by the General Meeting,

the Management Board has been authorised, for

a period of three years following 9 April 2024 (i.e.

until and including 9 April 2027), subject to the

approval of the Supervisory Board, to resolve

to issue Ordinary Shares (either in the form of

stock dividend or otherwise) and/or grant rights

75NX Filtration - Annual Report74 Corporate Governance

to acquire Ordinary Shares up to a maximum of

20% of the number of Ordinary Shares issued

immediately following 9 April 2024, and to

exclude pre-emptive rights in relation thereto.

In addition, the Management Board has been,

pursuant to a resolution of the General Meeting,

authorised for a period of 18 months following

9 April 2024 (i.e. until and including 9 October

2025), subject to the approval of the Supervisory

Board, to acquire its own Ordinary Shares

(including Ordinary Shares issued as stock

dividend), up to a maximum of 10% of the issued

capital at the date of acquisition, provided that

Company will hold no more Ordinary Shares

in stock than a maximum of 50% of the issued

capital, either through purchase on a stock

exchange or otherwise, at a price, excluding

expenses, not lower than the nominal value of

the Ordinary Shares and not higher than the

opening price on Euronext Amsterdam on the

day of the repurchase plus 10%.

Dutch Corporate Governance

Code

The Dutch Corporate Governance Code, as

amended in 2022, finds its statutory basis

in Book 2 of the Dutch Civil Code (the Dutch

Corporate Governance Code). The Dutch

Corporate Governance Code applies to the

Company as the Company has its statutory

seat in the Netherlands and its Ordinary Shares

are admitted to listing and trading on Euronext

Amsterdam.

The Dutch Corporate Governance Code is based

on a ‘comply or explain’ principle. Accordingly,

companies are required to disclose in their

management report whether or not they

are complying with the various best practice

principles of the Dutch Corporate Governance

Code that are addressed to the management

board or, if applicable, the supervisory board

of the company. If a company deviates from a

best practice principle in the Dutch Corporate

Governance Code, the reason for such deviation

must be properly explained in its management

report.

Deviations from the Best Practice

Principles of the Dutch Corporate

Governance Code

The Company acknowledges the importance

of good corporate governance. The Company

agrees with the general approach and is

committed to adhering to the best practices of

the Dutch Corporate Governance Code as much

as possible. The Company fully complies with the

Dutch Corporate Governance Code, except for

best practice provisions set out below.

- The Company is not fully compliant with best

practice provisions 2.1.5-2.1.6 that requires

that the D&I policy of the Company should

in any case set specific, appropriate and

ambitious targets in order to achieve a good

balance in gender diversity and the other

D&I aspects of relevance to the Company

with regard to the composition of the

Management Board, the Supervisory Board

and sub-top management.

Started in 2023 and further deployed

throughout 2024, we have made significant

improvements as regards D&I following the

introduction of the Company’s D&I Policy and

the signed CEO statement. In the following

paragraph of this annual report we elaborate

extensively on our D&I efforts and report

on gender data for the Management Board,

Supervisory Board and sub-top management.

However, given the early-stage nature of

the Company, we had also other challenges

and priorities to deal with, but we expect to

comply with these best practice provisions in

respect of the financial year 2025.

- The Company is not in compliance with

best practice provisions in principle 1.3 that

requires an internal auditor. The current

size of the Company does not justify the

appointment of an internal auditor. In 2024

the Supervisory Board has reassessed

the need for an internal auditor. Based

on this review, the Supervisory Board has

recommended the Management Board that

the current size of the Company still does

not justify the appointment of an internal

auditor.

Diversity Policy Supervisory

Board

The diversity policy of NX Filtration has been

in effect since its adoption by the Supervisory

Board on 11 June 2021 (the Policy).

The Supervisory Board values and promotes

diversity in the Management Board and

the Supervisory Board, and also in the

Company as a whole. The Supervisory Board

recognises that differences in skills, experience,

background, nationality, age, race, gender,

sexual orientation, religious beliefs, physical

ability and other characteristics of people are

important and enable both the Management

Board and the Supervisory Board as well as

the Company as a whole to look at issues

and to solve problems in a different way, to

respond differently to challenges and to take

more robust decisions. All these different skills

and backgrounds reflect the diverse nature of

the environment in which the Company and

its stakeholders operate, and improve the

effectiveness through diversity of approach

and thought. Diversity furthermore drives

innovation, and accelerates growth. It enables

the Company to attract and maintain the best

talented people.

The Management Board and the Supervisory

Board collectively are considered diverse and

balanced from an educational background

and work experience. The Management Board

and the Supervisory Board consist of people

with a good mix of sector knowledge, financial

expertise and management capabilities.

Annually, the Supervisory Board assesses the

composition of the Supervisory Board and

of the Management Board, and agrees to

measurable objectives for achieving diversity on

the Boards. At the date of this annual report,

the Supervisory Board meets the quota as

prescribed by law.

Diversity & Inclusion (D&I) within

NX Filtration

In this paragraph we explain our D&I policy and

the way in which it is implemented in practice,

(i) the goals of the D&I policy; (ii) the plan to

achieve the goals of the D&I policy; (iii) the

results of the D&I policy in the past financial

year and – where relevant and applicable

– insight into the inflow, progression and

retention of employees; and (iv) the gender

composition of the Management Board, the

Supervisory Board, and senior management at

the end of 2024.

NX Filtration recognizes that for the success

of the company, a culture of diversity, equity

and inclusion is essential and therefore NX

Filtration fosters such a culture. As we continue

to grow rapidly, we truly want to keep building

our diverse and inclusive workplace. Our human

capital is the most valuable asset we have. The

collective sum of the individual differences,

life experiences, knowledge, inventiveness,

innovation, self-expression, unique capabilities

and talent that our employees invest in

their work represents a significant part of

not only our culture, but our reputation and

company’s achievement as well. We embrace

and encourage our employees’ differences

in age, color, disability, ethnicity, family or

marital status, gender identity or expression,

language, national origin, physical and mental

77NX Filtration - Annual Report76 Corporate Governance

ability, political affiliation, race, religion, sexual

orientation, socio-economic status, and other

characteristics that make our employees

unique.

Please also refer to the Diversity and Inclusion

Policy Statement signed by our CEO.

Creating Awareness and Training

We strongly believe that in any organization,

addressing bias is an ongoing journey that

needs structural changes to policies and

operations. Increasing awareness within

NX Filtration is vital, but training people to

manage their biases, change their behaviors

and monitor how they are doing business takes

it to the next level. Therefore we offer various

trainings on topics such as:

• Cultural Diversity: how to deal with cultural

differences in the workplace.

• Social Intelligence: open communication to

create a trusting work environment that

will enable that Personnel can be their true

self.

• Giving and asking for feedback: helps

personnel to better formulate their

arguments and therefore be able to subtly

put an (unbiased) opinion on the table.

Recruitment

Bias in the workplace limits diversity,

recruitment, promotion and retention. It can

shape a company’s culture and standards if

left to languish. NX Filtration seeks to break

biases to become more diverse, equitable, and

inclusive. Identifying how bias shows in talent

management, training and development,

performance management and talent

acquisition plays a major role. All our recruiters

go through interactive bias-at-work training

to help them identify their own biases and

how to reduce the risk of bias in recruitment.

The training helps our recruiters support

their managers in minimizing bias during the

hiring process. Other practices that we make

use of to reduce bias include, to the extent

appropriate, anonymized C.V. screenings, round

table discussions, assessing competency rather

than specific experience and diverse interview

panels.

An international workforce

We are committed to fostering an international

work environment where every employee

can thrive. We promote diversity by offering

opportunities for international mobility as well

as intercultural training and cross-cultural work

teams, which are major factors of individual

and career development.

Equal opportunity globally

At NX Filtration, equality across the board is

key. We strongly believe that diversity is vital to

our business and we are committed to creating

an atmosphere where everyone can feel like

they belong. We nurture an environment

comprising of a group of people who are not

only diverse in skillset, but also in (cultural)

backgrounds, perspectives and experience,

disability status, ethnicity, age, gender identity

and sexual orientation among others, in all

countries we operate.

Gender balance

We empower the women in our organisation

and are committed to promoting equal

opportunities. We seek to increase the share

of women in senior management positions. As

we reflect on the achievements and progress

made throughout the previous year, we find it

important to transparently address a challenge

that has been prevalent in our industry. At the

end of the year, our gender balance stands at

18% women and 82% men, compared to 15%

women and 85% men at the end of 2023. This

ratio is not unique to our organization; it is a

broader concern within the industry. It is crucial

to recognize that we continue to focus on

initiatives towards achieving a more balanced

and sustainable gender balance.

Disability and accessibility

We have made good progress over the years

towards better accessibility for disabled people.

In our production facilities we take into account

the diverse nature of disability (including hidden

or invisible impairments) and how to support

different needs.

Zero tolerance for harassment, bullying

and racism

Our Code of Conduct, Business Ethics Policy,

and Human Rights Policy describe values and

principles that every employee of NX Filtration

must observe in the course of their work. These

rules of conduct guide our behaviour when

acting within or on behalf of NX Filtration.

In particular, we are committed to fostering

respect for human dignity and for employees’

work, and to a zero tolerance policy for

harassment, bullying and racism. In doing

this, we stand against racism, discrimination,

and bias of any kind, striving to ensure that

everyone feels equally welcome and embraced.

Wet ingroeiquotum en

streefcijfers (Dutch Diversity Act)

NX Filtration is bound by the obligations laid

down in the Wet ingroeiquotum en streefcijfers

(Dutch Diversity Act), which came into force on

1 January 2022.

Supervisory Board

Our Supervisory Board consists of 1 woman

and 2 men. NX Filtration thereby meets the

diversity quota of at least one-third female and

one-third male on the Supervisory Board and

will continue to do so.

Management Board

NX Filtration’s Management Board consists of

4 men. NX Filtration thereby does not meet the

diversity quota of at least one-third female and

one-third male on the Management Board.

Sub-top management

This sub-top management group consisted

of 13 employees as of 1 January 2024, and

reached a total number of 14 employees per

31 December 2024.

# # % %

Date Women Men Women Men

1 January 2024 4 9 31% 69%

31 December 2024 4 10 29% 71%

Sub-top objective

For the purpose of the Dutch Diversity Act,

NX Filtration has defined the sub-top as

those executives who report directly to the

management board. This includes all entities

within NX Filtration, therefore also including all

countries in which NX Filtration is based.

Plans to promote a proportionate split

between women and men

In order to ensure a proportionate split, i.e. a

larger share of women, we mainly focus on the

new employees. For increasing the number of

women in our organisation we will focus for the

coming years on the following pillars:

1. Inflow and internal promotions;

2. Cooperation with educational institutions;

and

3. External appearance.

Re 1. Inflow and internal promotions

Given NX Filtration’s growth, many employees

are recruited every year. Both by our internal

recruitment team and with the help of external

parties. The value of diversity is explicitly

discussed within the recruitment team and

with external parties and targets are set for

the supply of female candidates. For internal

promotion, the possibility of promoting women

to management positions is explicitly discussed

and stimulated.

79NX Filtration - Annual Report78 Corporate Governance

Re 2. Cooperation with educational institutions

We strongly believe that, in order to show

the attractiveness of technology in general,

one needs to focus on the employees of the

future. Therefore it is essential that we provide

children with the guidance and resources

they need to make informed decisions about

their future (education). We will intensify

the cooperation with schools (ranging from

vocational education to universities) to offer

interesting insights in our organisation as well

as technology in general. This includes offering

internships as well as graduation assignments.

Doing so, we will specifically focus on attracting

female students for our organisation.

Re 3. External appearance

We will focus on increasing the visibility of

women in our company in recruitment activities

and social media activities, among others.

Female speakers at conferences and events

will also contribute to the desired image of our

Company.

Gender balance targets

During 2024, the Management Board set a

gender balance target for the Management

Board to have at least one female in 2030.

When setting the gender balance target for

the Management Board, the Supervisory Board

has considered the technology environment NX

Filtration operates in, with a thinly populated

global STEM (science, technology, engineering

and math) talent pool, making it challenging

to recruit female talent. Furthermore, during

2023, and reassessed in 2024, a gender balance

target was set to reach a representation of

women at sub-top level of 40% by 2028, the

current level being 29%.

Takeover Directive (Article 10)

In the context of the EU Takeover Directive

(Article 10) Decree, the following notifications

must be given insofar as they are not included

in this Annual Report.

Capital Structure

As at 31 December 2024, the issued

share capital of the Company amounts to

€580,540.70 divided into 58,054,070 Ordinary

Shares, each with a nominal value of €0.01.

Each Ordinary Share confers the right to cast

one vote.

Limitations on the transfer of shares

NX Filtration has not imposed any limitations on

the transfer of its shares and therefore there are

no outstanding or potential protection measures

against a takeover of control of the company.

Substantial holdings

On the date hereof, NX Filtration has

58,054,070 Ordinary Shares outstanding in

the market. Pursuant to the Dutch Financial

Supervision Act (Wet op het financieel toezicht),

interests in the issued capital of NX Filtration

of 3% or more are required to be disclosed to

the Netherlands Authority for the Financial

Markets (AFM). At year-end 2024, the following

shareholders were known to hold interests of

at least 3% directly in the Company (as per

AFM disclosure on 31 December 2024, actual

substantial holdings may differ):

Number of Percentage of the

Ordinary issued share capital

Shareholder Shares of the Company

B.H.F. 29,402,463 58.80%

ten Doeschot

(1)

B.V. 5,030,020 10.06%

Beleggingsfonds

Hoogh Blarick

Teslin 2,932,954 5.87%

Participaties

Coöperatief U.A.

ASR

Nederland N.V. 1,890,659 3.27%

Notes:

(1)

Through Infestos Holding E B.V. and Stichting

Administratiekantoor NX Filtration Holding.

These entities are ultimately controlled by

Mr B.H.F. ten Doeschot.

Material Subsidiaries

NX Filtration B.V., NX Filtration International

B.V., NX Filtration Real Estate B.V. (each

incorporated in the Netherlands), NX

Filtration (Beijing) Membrane Technology Co.

(incorporated under Chinese law), Ltd., NX

Filtration India Private Limited (incorporated

under Indian law), and NX Filtration Americas,

LLC (incorporated under United States law) are

the only (material) subsidiaries of the Company.

The Company holds, either directly or indirectly,

100% of the ownership interest therein.

Special controlling rights

No special controlling rights are attached to the

shares in the Company.

Employee equity plans

See above under Long-Term Incentive (LTI) and

Short-term incentive (STI).

Limitations on voting rights

Each share confers the right to cast one vote.

The voting rights attached to the shares in the

Company are not restricted, and neither are the

terms in which voting rights may be exercised

restricted.

Agreements on limitations on the transfer

of shares

The Senior Management and certain other key

employees of the Company hold depository

receipts in Stichting Administratiekantoor

NX Filtration Holding (DRs) as they have been

given the opportunity to indirectly participate

in the capital of the Company. These DRs are

not freely tradeable. The transfer of DRs is

subject to a resolution of the management

board of Stichting Administratiekantoor

NX Filtration Holding.

Appointment and dismissal of

Management Board members and

Supervisory Directors and amendment of

the Articles of Association

The General Meeting appoints the Managing

Directors. The Supervisory Board will nominate

one or more candidates for each vacant seat.

A resolution of the General Meeting to appoint

a Managing Director other than in accordance

with a nomination by the Supervisory Board

can be adopted by a majority of the votes

cast representing at least one third of the

Company’s issued capital. If such quorum is

not met, the Company is entitled to convene a

second meeting where no quorum shall apply.

The Articles of Association provide that a

Managing Director may be suspended or

dismissed by the General Meeting at any time.

A resolution of the General Meeting to suspend

or dismiss a Managing Director other than

pursuant to a proposal by the Supervisory

Board can be adopted by a majority of the

votes cast, representing at least one third of

the Company’s issued capital. If such quorum is

not met, the Company is entitled to convene a

second meeting where no quorum shall apply.

The Articles of Association provide that the

number of Managing Directors is determined by

the Supervisory Board after consultation with

the Management Board, but there will be at

least two Managing Directors. The Supervisory

Board has appointed one of the Managing

81NX Filtration - Annual Report80 Corporate Governance

Directors as CEO. In addition, the Supervisory

Board has appointed one of the Managing

Directors as CFO (chief financial officer) to

specifically oversee the Company’s financial

affairs.

The Supervisory Board Rules provide that the

Supervisory Board must consist of a minimum

of three members. The exact number of

Supervisory Directors shall be determined by

the Supervisory Board. The Supervisory Board

will consists of three members. Only natural

persons may be appointed as Supervisory

Directors.

In accordance with the Articles of Association,

the Supervisory Board has prepared a profile

(profielschets) for its size and composition,

taking account of the nature and activities

of the business, the desired expertise and

background of the Supervisory Directors, the

desired mixed composition and the size of the

Supervisory Board and the independence of the

Supervisory Directors. The Company’s diversity

policy is also taken into account.

The General Meeting appoints the Supervisory

Directors. The Supervisory Board will nominate

one or more candidates for each vacant seat. A

resolution of the General Meeting to appoint a

Supervisory Director other than in accordance

with a nomination by the Supervisory Board

can be adopted by a majority of the votes

cast representing at least one third of the

Company’s issued capital. If such quorum is

not met, the Company is entitled to convene a

second meeting where no quorum shall apply.

The Articles of Association provide that a

Supervisory Director may be suspended or

dismissed by the General Meeting at any time.

A resolution of the General Meeting to suspend

or dismiss a Supervisory Director other than

pursuant to a proposal by the Supervisory

Board can be adopted by a majority of the

votes cast, representing at least one third of

the Company’s issued capital. If such quorum is

not met, the Company is entitled to convene a

second meeting where no quorum shall apply.

The General Meeting may pass a resolution

to amend the Articles of Association with an

absolute majority of the votes validly cast in

the General Meeting, but only (i) on a proposal

of the Management Board that has been

approved by the Supervisory Board or (ii) in the

absence of such a proposal, with the explicit

approval of the Management Board and the

Supervisory Board or (iii) on the proposal of

a Shareholder, or shareholders acting jointly

provided that they belong to the same group,

for as long as they solely or jointly represent at

least 30% of the issued capital of the Company.

Any such proposal must be stated in the notice

of the General Meeting.

In the event of a proposal to the General

Meeting to amend the Articles of Association,

a copy of such proposal containing the

verbatim text of the proposed amendment

will be deposited at the Company’s office,

for inspection by shareholders and other

persons holding meeting rights, until the end

of the meeting. Furthermore, a copy of the

proposal will be made available free of charge

to shareholders and other persons holding

meeting rights from the day it was deposited

until the day of the meeting. A resolution by

the General Meeting to amend the Articles of

Association requires an absolute majority of the

votes cast. A resolution of the General Meeting

to amend the Articles of Association that has

the effect of reducing the rights attributable to

holders of share of a particular class, is subject

to approval of the meeting of holders of shares

of that class.

Significant agreements and changes in the

control of the company

NX Filtration does not have any such

agreements.

Redundancy agreements in the event of a

public takeover bid

NX Filtration has not concluded any agreements

with a Management Board member or employee

that provides for any severance pay in the case

of a termination of employment in connection

with a public bid within the meaning of Article

5:70 of the Dutch Financial Supervision Act.

Shareholders

See Substantial Holdings.

Dividend Policy

The dividend policy is to reserve all profits (if

any) until the policy is revised. NX Filtration

does not pay dividends to its shareholders at

this moment in time.

Financial calendar

Date Event

10 February 2025 Publication full year results 2024

8 April 2025 Annual General Meeting

8 April 2025 Capital Markets Day

27 August 2025 Publication half-year results 2025

NX Filtration applied the following closed

periods for transactions directly or indirectly,

relating, to shares and other financial

instruments in NX Filtration:

• 1 May 2024 until 30 August 2024

• 1 November 2024 until 10 February 2025

In accordance with best practice provision

1.4.3. of the Dutch Corporate Governance

Code, the Management Board states to the

best of its knowledge that:

• the report of the Management Board

provides sufficient insight into any

shortcomings in the effectiveness of the

internal risk management and control

systems;

• those systems provide reasonable

assurance that the financial report does

not contain any material misstatements;

• in the current situation, it is appropriate

for the financial report to be prepared on a

going concern basis; and

• the report states those material risks

and uncertainties that are relevant to the

expectation of the company’s continuity

for the period of twelve months after the

preparation of the report.

As required by the relevant statutory provisions,

the Management Board hereby declares that to

the best of its knowledge:

• the report of the Management Board

provides a true and fair view of the position

of NX Filtration and its subsidiaries

included in the consolidation on the

reporting date and of the course of their

affairs during the financial year. The

report of the Management Board provides

information on any material risks to which

NX Filtration is exposed;

• The Consolidated Financial Statements

as at and for the year ended 31 December

2024, give a true and fair view of the

assets, liabilities, financial position and

result of the financial year of NX Filtration

and its subsidiaries included in the

consolidation as a whole.

Hengelo, 10 February 2025

Management Board

Floris Jan Jan Feie Michiel Erik

Cuypers Zwiers Staatsen Roesink

CEO CFO COO CTO

83NX Filtration - Annual Report82 Corporate Governance

Report of the

Supervisory

Board

85NX Filtration - Annual Report84 Report of the Supervisory Board

Hans SlootwegBenno van DongenCarolina Wielinga

Chair

Report of the

Supervisory Board

The Supervisory Board’s main responsibility

is to supervise and advise the Management

Board, in particular regarding the strategy for

realising sustainable long-term value and the

manner in which the strategy is implemented.

The Supervisory Board supervises the

Management Board on actions that have

an impact on people and the environment

and to that end it weighs the interests of all

relevant stakeholders involved. The Supervisory

Board also focuses on the effectiveness of

the Company’s internal risk management and

control systems and the integrity and quality

of the financial reporting. Throughout 2024, we

continued to see NX Filtration’s commitment

to enhanced corporate governance and risk

management on the basis of its internal

control framework. We were closely involved

in discussions with the external auditor with

the aim to increase risk management, and

safeguard the integrity of operations and the

quality of financial reporting.

Activities and priorities 2024

As we reflect on the events of 2024, the

Supervisory Board acknowledges the challenges

faced by NX Filtration that influenced its

financial and operational environment. While

NX Filtration adjusted its revenue outlook as

a result of evolving timelines associated with

converting pilot projects into full scale projects

and customers’ project realization schedules,

it still recorded substantial revenue growth

compared to 2023, and we continue to see

major steps being made towards realizing the

Company’s longer term business objectives.

We continue with our collaborative approach

towards the Management Board to foster

transparency and accountability throughout

the Company.

We were particularly pleased that NX Filtration

was able to strengthen its balance sheet by

an equity raise and new financing agreement,

providing the Company with additional

flexibility to respond to market developments,

accelerate specific growth initiatives and fund

the path to profitability.

NX Filtration’s key commercial success in 2024

was a partnership for the world’s largest hollow

fiber nanofiltration (NF) water treatment

plant in Mexico. The Company was also

able to reach major milestones for its other

product categories. Together with a reputable

partner it developed a new sustainable beer

filtration solution (MF) that has been brought

to market. Also, a reputable OEM-er placed a

sizeable initial order for ultrafiltration modules

(UF). NX Filtration continued to advance

with key OEMs for full-scale projects. We

still see NX Filtration’s strong technological

position underscored by a sustained high gross

margin and a continuation of repeat orders

from existing partners. We stressed to the

Management Board that it should closely

monitor the Americas and Asia in particular so

that it can respond to local developments and

opportunities in a timely manner.

The opening of the new manufacturing facility

and headquarters by Her Majesty Queen

Máxima was a major milestone. We have

noticed a smooth transfer from the Company’s

former production locations to this new facility.

In 2024, a smooth transition to a new

Management Board, was another priority for

us. We were very pleased to welcome Floris Jan

Cuypers (CEO) and Jan Feie Zwiers (CFO) as

new members to the Management Board. Their

leadership experience, and strong background

in both commercial and operational executive

roles, and financial roles, respectively, strongly

positions them to lead NX Filtration.

87NX Filtration - Annual Report86 Report of the Supervisory Board

The formulation and execution of an effective

strategy are paramount in sustaining long-

term growth. The Supervisory Board has

closely monitored the development and

implementation of NX Filtration’s strategy,

offering constructive input to enhance its

effectiveness. We believe that this strategy will

position NX Filtration for continued success in

a competitive but strong growing market. In

this context, the effectiveness of NX Filtration’s

sales organization is particular important. The

Supervisory Board acknowledges the diligent

efforts undertaken by the Management Board

to further optimize the sales structure to

enhance effective leadership in the regions

where NX Filtration is active. One other key

point of attention was cost control to balance

the companies spend in line with its growth

projections.

We determined that NX Filtration has

sound processes in place of achieving

sustainable long-term value for its customers

and shareholders, its people and society.

Furthermore, we continued to work in our

ESG Committee regarding sustainability,

environmental, social, corporate governance

and human capital matters. We are truly

honored that NX Filtration joined the global

B Corp community in 2024 alongside other

companies aiming to transform business into a

force for good. The Supervisory Board stresses

timely preparation on the implementation of

CSRD requirements, which is due in 2027 over

the financial year 2026.

Strategy and sustainable

long-term value creation

The Supervisory Board fully supports

NX Filtration’s strategy. During 2024, the

Supervisory Board devoted a considerable

amount of time discussing strategic topics.

We performed the recurring annual review

of NX Filtration’s corporate strategy and the

long-term financial budget. Some of the main

challenges concern realizing NX Filtration’s top

line growth and timing thereof, and ensure that

costs remain under control.

With increasing demand for NX Filtration’s

products in combination with its focus on

execution of its strategic priorities, the

Supervisory Board has confidence in NX

Filtration’s long-term growth opportunities

and the continued delivery of value to its

stakeholders. As part of several deep dive

strategy reviews, we focused on long-term

water market developments and external

global forces, including geopolitics and ESG

topics.

Composition and diversity

Ms C. (Carolina) Wielinga (born 1970, Dutch) is

a supervisory board member and chair of the

audit committee at Gasunie and has been a

supervisory board member of Darlin N.V. (part

of Teslin) (2010-2017). Since November 2024,

she is a supervisory board member of Royal

A-ware Food Group. Ms Carolina Wielinga is

an all-round finance business executive with

over 25 years of experience. Most recently, she

was CFO of BDR Thermea Group. Ms Carolina

Wielinga had several functions at Rabobank

and its subsidiaries, as head of financial

restructuring and recovery at Rabobank Group

(2016-2018), chief financial risk officer/chief

operating officer at FGH Bank (2015-2016) and

chief financial risk officer at Rabo Real Estate

Group (2013-2015). In the period 2011-2013,

she was senior director finance at Vion Food

Group, an international supplier of meat, meat

products and plant-based alternatives. Ms

Carolina Wielinga started her career at Arthur

Andersen (1993-2002), followed by roles as

director business advisory services at KPMG

(2002-2005) and country market leader and

managing director of Protivi in the Netherlands

(2005-2010). Ms Carolina Wielinga holds a

master’s degree in business administration

from University of Groningen in Groningen,

the Netherlands and is also a chartered

accountant.

Mr B.A.M. (Benno) van Dongen (born 1964,

Dutch) is a senior partner at Roland Berger,

for which he co founded the Amsterdam office

in 2002. At Roland Berger, Mr Benno van

Dongen is focusing on technology intensive

industries and life sciences, public private

partnerships and academia. He supports

these groups in innovation management,

growth strategy, business model development

and creating business plans. Prior to joining

Roland Berger, Mr Benno van Dongen was an

associate director at Arthur D. Little, where

he focused on, amongst others, advising

companies in the water markets as head of

the engineering, manufacturing and resources

practice. Mr Benno van Dongen studied

chemical engineering and materials science

at Delft University of Technology in Delft,

the Netherlands and has an MBA degree

from INSEAD in Fontainebleau, France. He

is a member of the Supervisory Board of

InnovationQuarter, the regional economic

development agency for South Holland, a

selected Fellow of the NAE (Netherlands

Academy of Engineering), and a director

of academic society Royal Holland Society

of Sciences and Humanities (Koninklijke

Hollandsche Maatschappij der Wetenschappen).

The Supervisory Board consists of the following

three members:

Name Gender Age Position Initial appointment End of current term

Ms C. (Carolina) Wielinga Female 54 Member and Chair 11 June 2021 AGM 2025

(nominated for

reappointment)

Mr B.A.M. (Benno) van Dongen Male 60 Member 11 June 2021 AGM 2025

(nominated for

reappointment)

Mr J.G. (Hans) Slootweg Male 45 Member 6 April 2023 AGM 2027

NX Filtration - Annual Report88 Report of the Supervisory Board

Mr J.G. (Hans) Slootweg (born 1979, Dutch)

works at Infestos Nederland B.V., where he

currently holds the role of investment director.

Mr Hans Slootweg’s expertise is in supporting

companies on areas including technology, R&D,

finance and accounting. This expertise will be

of added value to the Supervisory Board of the

Company. Prior to joining Infestos, Mr Hans

Slootweg worked as manager at Scotch & Soda

(2012-2014) and as senior manager at KPMG

(2003-2012). He holds a master’s degree in

accountancy from Nyenrode University in the

Netherlands.

The business address of the Supervisory Board

is Haaksbergerstraat 95, 7554 PA, Hengelo, the

Netherlands.

The Supervisory Board operates independently

of the Management Board, any other

participating interests and each other. Each

of the Supervisory Board members has

the necessary expertise, experience and

background to perform his or her tasks and

responsibilities. Two of the three members

of the Supervisory Board are independent

within the meaning of the Dutch Corporate

Governance Code as, in the opinion of the

Supervisory Board, the requirements referred

to in best practice provisions 2.1.7 to 2.1.9

inclusive of the Dutch Corporate Governance

Code have been fulfilled.

One of the Supervisory Board members is not

independent within the meaning of the Dutch

Corporate Governance Code. Pursuant to

the relationship agreement between Infestos

Holding E B.V., Stichting Administratiekantoor

NX Filtration Holding and NX Filtration dated

8 June 2021, Infestos Holding E B.V. has the

right to designate for nomination, and propose

replacements for, two Supervisory Directors

on the Supervisory Board. One out of three

Supervisory Directors is a representative of

Infestos: Mr Hans Slootweg.

The Management Board and the Supervisory

Board collectively are considered diverse and

balanced from an educational background

and work experience. The Management Board

and the Supervisory Board consist of people

with a good mix of sector knowledge, financial

expertise and management capabilities.

Annually, the Supervisory Board assesses the

composition of the Supervisory Board and of the

Management Board, and agrees to measurable

objectives for achieving diversity on the Boards.

At the date of this annual report, the

Supervisory Board meets the diversity quota as

prescribed by law.

Where searches for appointment to any of

the Boards or to senior management are

conducted by NX Filtration or by search firms,

they will identify and present a long list of

candidates who are considered to meet the

essential criteria for the relevant vacancy,

including qualified females and people of colour.

The Boards will consider suitably qualified

candidates for positions from as wide a pool as

appropriate, including candidates with little or

no previous listed company board experience

but whose skills and experience will add value to

the relevant Board.

Meetings and attendance

The Supervisory Board held seven meetings

in 2024, five of which were regular scheduled

meetings, one related specifically to the

appointment of the CEO, and one related

specifically to the appointment of the CFO. The

regular scheduled meetings were attended by

the members of the Management Board. The

specifically scheduled meetings and the meeting

where the Supervisory Board discussed its own

functioning were held without the members of

the Management Board. All members of the

Supervisory Board attended all the meetings, as

such the absenteeism rate is zero.

Other than the Audit Committee and the

ESG Committee, the Supervisory Board has

not installed any standing committees as

this is not required under Dutch law or the

Dutch Corporate Governance Code based on

the current composition of the Supervisory

Board. If the Supervisory Board would in the

future consist of more than four members,

it should, in addition to the existing Audit

Committee, appoint from among its members

a remuneration committee and a selection and

appointment committee to remain in compliance

with the Dutch Corporate Governance Code.

The Chair speaks with the CEO regularly, and

at least on a monthly basis. Next to the key

priorities mentioned earlier the Supervisory

Board agenda contained the financials, risk

management, audit plan of the external auditor,

financing structure, Long Term Incentive Plan for

key management, HR overviews, development

and diversity, and budget 2025.

Audit Committee

NX Filtration has an Audit Committee,

consisting of Mr Benno van Dongen and Ms

Carolina Wielinga, the independent members

of the Supervisory Board. The Audit Committee

held two meetings in 2024. The duties of the

Audit Committee include:

• informing the Supervisory Board of

the results of the statutory audit and

explaining how the statutory audit has

contributed to the integrity of the financial

reporting and how the Audit Committee

has fulfilled this process;

• monitoring the financial and sustainability

reporting process and making proposals to

safeguard the integrity of the process;

• monitoring the effectiveness of the internal

control systems, the internal audit system

and the risk management system with

respect to financial and sustainability

reporting;

• monitoring the statutory audit of the

annual accounts, and in particular the

process of such audit

• monitoring the independence of the

external auditor; and

• adopting procedures with respect to the

selection of the external auditor.

ESG Committee

NX Filtration has an ESG Committee,

consisting of Mr Benno van Dongen and Ms

Carolina Wielinga, the independent members of

the Supervisory Board. See for disclosure on NX

Filtration’s ESG Committee, the Sustainability

report included in this annual report.

Remuneration report

The remuneration of, and other agreements

with, the Managing Directors are required

to be determined by the Supervisory Board

in any given year, with due observance of

the remuneration policy of the Company

(the Remuneration Policy). The updated

Remuneration Policy applicable to the

Management Board was approved by the

General Meeting on 6 September 2024, and

applies as of 1 August 2024, with the exception

of the increase in the on target opportunity

level for STI, that came into effect on 1 January

2025. Any subsequent amendments to the

Remuneration Policy are subject to adoption by

the General Meeting. The Supervisory Board

carries out scenario analyses of the potential

outcomes of variable remuneration components

and the consequences thereof for the Managing

Board’s remuneration when drawing up any

amendments to the Remuneration Policy and

before determining the Managing Board’s

remuneration.

The Remuneration Policy is designed taking

into account the Company’s vision (“pure

91NX Filtration - Annual Report90 Report of the Supervisory Board

and affordable water across the globe’’),

mission (“to be a leading global provider of

breakthrough nano-filtration technology

that enables customers to, amongst others,

produce pure and affordable water, treat

wastewater and reduce their water footprint,

and achieve strong sustainability benefits’’)

and values (“Sustainable, Adaptive, Reliable,

Knowledgeable”) through performance targets

related to for example growth, innovation

and sustainability. The Remuneration Policy

contributes to long-term value creation because

variable remuneration is higher when targets

are exceeded and no variable remuneration is

payable if threshold targets are not met. This

helps to ensure the alignment of the Managing

Directors’ interests with that of the Company’s

stakeholders and create a true pay-for-

performance culture. The Remuneration Policy

fosters alignment of interests of the Managing

Directors with its shareholders and other

stakeholders. Furthermore, the Remuneration

Policy is designed in a way that Managing

Directors and Supervisory Directors are not

encouraged to take or stimulate inappropriate

risks.

The Remuneration Policy aims to attract,

motivate and retain qualified individuals

and reward them with a market competitive

remuneration package that focuses on

achieving sustainable financial results aligned

with the long-term strategy of NX Filtration

and fosters alignment of interests of Managing

Directors with shareholders. Based on the

Remuneration Policy, the remuneration of the

Managing Directors consists of the following

components:

• annual base fee;

• pension and other benefits, except for

the current COO and CTO, which are not

entitled to pension benefits;

• STI, except for the current CTO;

• LTI, except for the current CTO; and

• a sign-on bonus upon appointment. For the

avoidance of doubt, the current COO and

CTO were not entitled to a sign-on bonus.

Annual base fee

The annual base fee is a fixed cash payment

(with a possible yearly indexation) intended to

attract and retain executives of the highest

caliber and to reflect their experience and scope

of responsibilities.

Managing Directors, appointed after the date

of the Remuneration Policy, may be entitled to

a maximum annual base fee around the amount

of the CFO as determined by the Supervisory

Board in accordance with the peer group

analysis.

Annually, the Supervisory Board may evaluate

the base fee of the Managing Directors and

decide on an increase thereof if warranted by

relevant circumstances. Base fee levels will be

reviewed, taking into account developments in

the labour market and other factors (including

potential changes in job sizes), whereby the

peer group as referred to above will be used

as reference. The annual base fee paid to the

Managing Directors will be disclosed in the

Company’s annual remuneration report.

Pension and other benefits

Managing Directors are generally eligible to

participate in a pension plan at the level of NX

Filtration B.V., a wholly-owned subsidiary of

NX Filtration, but they may waive their pension

rights. The Managing Directors contribute

to the pension plan (eigen bijdrage) if they

participate in the pension plan.

Managing Directors are generally eligible for a

range of other emoluments, such as the use of

a company car (except for Mr M.A. Staatsen

and Mr H.D.W. Roesink), an expense allowance

reflective of the position of the Managing

Director, and a collective health insurance. NX

Filtration has arranged and paid for a directors

and officers liability insurance for the members

of the Management Board.

STI

The STI is a variable cash bonus incentive of

which achievement is tied to specific financial

and non-financial targets derived from the

Company’s (annual) strategic plan, allowing

to apply focus on short-term business critical

goals and drive behaviour. The Supervisory

Board may, but is not obliged to, determine

that a Managing Director becomes entitled to

an STI.

LTI

The LTI is a variable equity incentive of which

achievement is tied to targets reflecting long-

term stakeholder value creation, enhancing the

pay-for-performance narrative and aligning

recipients with the shareholder experience. The

Supervisory Board may, but is not obliged to,

determine that a Managing Director becomes

entitled to an LTI. The LTI allows Managing

Directors to receive annual conditional awards

of Performance Shares under the Company’s

Long Term Incentive Plan for Managing

Directors as amended from time to time,

subject to the approval of the Supervisory

Board in accordance with the Remuneration

Policy.

Sign-on bonus

The Supervisory Board retains the flexibility

to provide one-off compensation upon

appointment of a Managing Director, such as a

sign-on bonus, for example to replace variable

remuneration awards that the appointee

forfeits from previous employment and/or

other loss of income as a direct result of joining

the Company. Depending on the circumstances

at the time, the Supervisory Board may

determine the type of award, in cash or shares

and the payout or vesting conditions that apply.

The appointment of a new member of the

Management Board requires approval of the

General Meeting. Attached to the proposal

for appointment are the main terms of

the management agreement. Any sign-

on arrangement will be submitted to the

General Meeting for approval in conjunction

with the proposal for appointment. If any

sign-on arrangements are applied, these

will be disclosed in the Company’s annual

remuneration report.

Notice period

The management agreements for the

Managing Directors are entered into for an

indefinite term. The notice period for the

Managing Directors is three months and for NX

Filtration six months.

Severance current Management Board

The service agreement of each of Mr Floris Jan

Cuypers, Mr Jan Feie Zwiers, and Mr Michiel

Staatsen contains severance provisions which

provide for compensation for the loss of income

resulting from a termination of employment

at the initiative of the Company of six months’

base compensation, subject to certain

conditions such as that the termination is not

based on seriously culpable acts or negligence

of the Managing Director. The contractual

severance amount will replace or be subtracted

from any statutory or other severance

payments.

The service agreement of Mr Erik Roesink

does not contain any provisions providing for

benefits upon termination of employment.

None of the Supervisory Directors does enjoy

contractual severance provisions.

Variable remuneration

Mr Michiel Staatsen and Mr Erik Roesink were

not entitled to any variable remuneration

in 2024. Each of Mr Floris Jan Cuypers and

Mr Jan Feie Zwiers was entitled to variable

remuneration, as set out on the next page.

93NX Filtration - Annual Report92 Report of the Supervisory Board

Management Board Fringe Termination Share-based Total

remuneration Salaries benefits benefit Bonus Pension payments 2024

Mr Michiel Staatsen 191,035 - - - - - 191,035

Mr Erik Roesink 174,770 - - - - - 174,770

Mr Marc Luttikhuis 124,247 6,426 - 6,250 3,607 9,055 149,585

Mr Jeroen Pynenburg 165,305 23,154 198,750 -2,083 6,012 71,901 463,039

Mr Jan Feie Zwiers 129,183 6,605 - 10,688 4,009 86,175 236,660

Mr Floris Jan Cuypers 126,571 7,258 - 9,750 3,207 80,191 226,977

Total 911,111 43,443 198,750 24,605 16,835 247,322 1,442,066

Management Board remuneration over 2023

The total amount of remuneration of the

Managing Directors for the financial year 2023

comprised €1,108,058.

Management Board remuneration over 2024

The total amount of remuneration of the

Managing Directors for the financial year 2024

comprised €1,442,066.

Settlement former members of the

Management Board

Mr Marc Luttikhuis stepped down as CFO and

member of the Management Board as per 30

June 2024. Mr Marc Luttikhuis was not entitled

to any severance pay. He was also not entitled

to any STI or LTI over the financial year 2024.

A total number of 9,017 ordinary shares as

part of the equity sign-on incentive dated 17

November 2021 were released from the lock-up

and served as a final settlement for the equity

sign-on incentive.

Mr Jeroen Pynenburg stepped down as CEO

and member of the Management Board as per

31 July 2024. Mr Jeroen Pynenburg was entitled

to a severance pay of a six months gross base

salary (in total €132,500). His STI and LTI

were settled against a one-time payment of

€20,000. His equity sign-on incentive dated

2 May 2023 was settled by a redelivery of part

of the awarded shares under his sign-on equity

incentive as those were not yet released from

their lock-up restrictions. In respect hereof, the

Company paid a settlement price of € 87,833.

Additional disclosure STI And

LTI of the current Management

Board for the financial year 2024

Short-term incentive (STI)

Floris Jan Cuypers (CEO) and Jan Feie

Zwiers (CFO) are each entitled to a short-

term incentive, which consists of cash only.

In setting the performance targets of this

short-term incentive, the Supervisory Board

took into account NX Filtration’s strategy and

objectives. The at target gross amount of the

STI is 15% of the gross annual base fee with a

bandwidth of a 5% performance level (if the

minimum threshold performance is met) up

to and including 25% performance level (if the

maximum performance is met), whereby the

performance conditions, weighting, percentage

of performance and bonus percentages for the

financial year 2024 are set out below. A one

year performance period applies.

STI performance KPIs for the CEO – Floris Jan Cuypers

The revenues and other income in 2024 amount

to €11.1 million. The minimum target level

was set at €14.0 million. The at target level

was set on €16.0 million and the maximum

target level was set on €18.0 million thus,

given a performance level of 0%, resulting in a

weighted bonus of 0%. Gross margin (excluding

other income) amounted to 61%. The at target

level was set on 60% and the maximum target

level was set on 62% thus, given a performance

level of 20%, resulting in a weighted bonus of

5.0%. The Supervisory Board has determined

that Mr Cuypers is entitled to a maximum

bonus for the non-financial performance

conditions.

Based on the aggregate realised STI bonus

percentage of 13.8%, multiplied by the

fixed remuneration, the cash bonus for 2024

amounted to €14,896 gross.

Performance

Type KPI Weight level Bonus

Financial performance Revenues and other income in 2024

conditions > 55% growth compared to 2023 40.0% 0% -

Gross margin

(excluding other income) 25.0% 20% 5.0%

Non-financial performance Employer branding &

conditions recruitment 10.0% 25% 2.5%

Maximize the usage of the pilot

equipment fleet 5.0% 25% 1.3%

Stable operations, minimize waste

& interruptions, start-up of

new production location 10.0% 25% 2.5%

Deploy integrated program

management, focused

technology roadmaps 10.0% 25% 2.5%

STI 2024 100.0% 13.8%

Management Board Fringe Termination Share-based Total

remuneration Salaries benefits benefit Bonus Pension payments 2023

Mr Michiel Staatsen 198,980 - - - - - 198,980

Mr Erik Roesink 175,225 - - - - - 175,225

Mr Marc Luttikhuis 259,972 15,768 - 31,250 8,751 88,672 404,413

Mr Jeroen Pynenburg 175,118 23,172 - 22,083 4,801 104,266 329,440

Total 809,295 38,940 - 53,333 13,552 192,938 1,108,058

NX Filtration - Annual Report94 Report of the Supervisory Board

STI performance KPIs for the CFO – Jan Feie Zwiers

The revenues and other income in 2024 amount

to €11.1 million. The minimum target level

was set at €14.0 million. The at target level

was set on €16.0 million and the maximum

target level was set on €18.0 million thus,

given a performance level of 0%, resulting in a

weighted bonus of 0%. Gross margin (excluding

other income) amounted to 61%. The at target

level was set on 60% and the maximum target

level was set on 62% thus, given a performance

level of 20%, resulting in a weighted bonus of

5.0%.Working capital was well under control as

such the Supervisory Board decided to allocate

the maximum amount of bonus possible for

this KPI thus, given a performance level of

25%, resulting in a weighted bonus of 2.5%.

In 2024, significant improvements were made

to IT security and the fraud risk assessment.

All internal control cycles have been fully

implemented and the controls were found

effective in design and operations, as such

the Supervisory Board decided to allocate the

maximum amount of bonus possible for this

KPI thus, given a performance level of 25%,

resulting in a weighted bonus of 3.8%.

Based on the aggregate realised STI bonus

percentage of 13.8%, multiplied by the

fixed remuneration, the cash bonus for 2024

amounted to €16,328 gross.

Long-term incentive (LTI)

Floris Jan Cuypers (CEO) and Jan Feie Zwiers

(CFO) are each entitled to a conditional

award of ordinary shares in NX Filtration

(Ordinary Shares) under the LTI-plan, at the

sole discretion of the Supervisory Board.

The vesting of an award is subject to the

achievement of predetermined financial and

non-financial (including ESG) performance

conditions set by the Supervisory Board over

a 3 year vesting period. Following the vesting

of an award the relevant Ordinary Shares are

subject to a holding period of two years as of

the date of vesting (or any different holding

period as the Supervisory Board may determine

at the time of grant) subject to continued

engagement to NX Filtration. The value of the

‘at target’ number of Ordinary Shares is 40%

of the gross annual base fee (at the start of the

performance period) with a bandwidth of 30%

up to and including 50% taking into account the

value of a price for the Ordinary Shares based

on the average closing share price of the last

trading day of the preceding year, at the start

of the performance period.

LTI performance KPIs for the CEO –

Floris Jan Cuypers

The grant under this plan to Mr Cuypers was

made on 12 December 2024 and relates to

10,317 awards. This grant is subject to the

following selection of performance conditions

as determined by the Supervisory Board.

Type KPI Weight

Financial performance Revenues and

conditions other income 40.0%

Gross margin 25.0%

Non-financial performance Number of

conditions pilots started 15.0%

QHSE 5.0%

ESG 15.0%

LTI 10 0.0%

The total realization of the LTI grant of 2024

will be based on the outcome of financial

years 2024, 2025 and 2026 and thus cannot

be determined yet. Note that NX Filtration

recognized an expense of € 9,286 in the

statement of profit and loss 2024 in respect of

this LTI plan based on the application of IFRS 2

accounting regulations.

LTI performance KPIs for the CEO –

Jan Feie Zwiers

The grant under this plan to Mr Zwiers was

made on 12 December 2024 and relates to

11,310 awards. This grant is subject to the

following selection of performance conditions

as determined by the Supervisory Board.

Type KPI Weight

Financial performance Revenues and

conditions other income 40.0%

Gross margin 25.0%

Non-financial performance Number of

conditions pilots started 15.0%

QHSE 5.0%

ESG 15.0%

LTI 10 0.0%

The total realization of the LTI grant of 2024

will be based on the outcome of financial

years 2024, 2025 and 2026 and thus cannot

be determined yet. Note that NX Filtration

recognized an expense of € 9,828 in the

statement of profit and loss 2024 in respect of

this LTI plan based on the application of IFRS 2

accounting regulations.

During 2024, other than Mr Cuypers and

Mr Zwiers, none of the other members of the

Management Board was entitled to any of the

STI and LTI.

Performance

Type KPI Weight level Bonus

Financial performance Revenues and other income in 2024

conditions > 55% growth compared to 2023 40.0% 0% -

Gross margin

(excluding other income) 25.0% 20% 5.0%

Non-financial performance Employer branding &

conditions recruitment 10.0% 25% 2.5%

Working capital & cash management

(including inventory levels) 10.0% 25% 2.5%

Internal control environment Formalized fraud risk

and governance assessment, IT security 15.0% 25% 3.8%

STI 2024 100.0% 13.8%

NX Filtration - Annual Report96 Report of the Supervisory Board

Shareholdings of Mr Michiel Staatsen and

Mr Erik Roesink

Mr Michiel Staatsen and Mr Erik Roesink

participate directly and indirectly in the

share capital of the Company. Their direct

investments are the result of their participation

in the Company’s equity offering in April

2024, in which Michiel Staatsen acquired

76,804 Ordinary Shares, and Erik Roesink

acquired 30,721 Ordinary Shares. The indirect

investments are held through the STAK, which

has issued depositary receipts of shares

(certificaten van aandelen) in the capital of the

Company for Ordinary Shares (the DRs) to

them. Erik Roesink indirectly holds 1,611,750

DRs for Ordinary Shares and Michiel Staatsen

indirectly holds 967,050 DRs for Ordinary

Shares in the capital of the Company. As such,

on the date hereof Michiel Staatsen holds

1,043,854 Ordinary Shares (1.80%) and Erik

Roesink 1,642,471 Ordinary Shares (2.83%) in

the capital of the Company.

Shareholdings of Mr Floris Jan Cuypers and

Mr Jan Feie Zwiers

On the date hereof, Floris Jan Cuypers

indirectly holds 105,829 Ordinary Shares

(0.18%) in the capital of the Company and Jan

Feie Zwiers indirectly holds 90,710 Ordinary

Shares (0.16%) in the capital of the Company.

Sign-on bonus in shares Mr Floris Jan

Cuypers

The Company agreed to a sign-on equity

incentive with Mr Cuypers. The Company issued

105,829 ordinary shares of the Company to a

designated securities account at ABN AMRO

held by the Company for the benefit of Mr

Cuypers, but which he will not have access to

because the ordinary shares are subject to

customary lock-up provisions, that have been

agreed between the Company and Mr Cuypers.

Furthermore, the Company and Mr Cuypers

agreed on certain other key terms of the

sign-on equity incentive, such as the method

of delivery, pricing, and leaver provisions.

An important part of the agreement on the

establishment of the sign-on equity incentive

between Mr Cuypers and the Company is the

fact that he was requested to commit to an

investment in the Company’s ordinary shares

in the amount of EUR 171,500. The lock-up of

the ordinary shares under the sign-on equity

incentive is three years from 10 September

2024 where 1/3 of the ordinary shares will be

released each year and the leaver provisions

provide for a re-delivery of the ordinary shares

if he is a bad-leaver. If Mr Cuypers is a good-

leaver he will be entitled to a pro-rata portion

of the shares subject to the lock-up.

Sign-on bonus in shares Mr Jan Feie Zwiers

The Company agreed to a sign-on equity

incentive with Mr Zwiers. The Company issued

90,710 ordinary shares of the Company to a

designated securities account at ABN AMRO

held by the Company for the benefit of Mr

Zwiers, but which he will not have access to

because the ordinary shares are subject to

customary lock-up provisions, that have been

agreed between the Company and Mr Zwiers.

Furthermore, the Company and Mr Zwiers

agreed on certain other key terms of the

sign-on equity incentive, such as the method

of delivery, pricing, and leaver provisions.

An important part of the agreement on the

establishment of the sign-on equity incentive

between Mr Zwiers and the Company is the

fact that he was requested to commit to an

investment in the Company’s ordinary shares

in the amount of EUR 148,500. The lock-up of

the ordinary shares under the sign-on equity

incentive is three years from 10 September

2024 where 1/3 of the ordinary shares will be

released each year and the leaver provisions

provide for a re-delivery of the ordinary shares

if he is a bad-leaver. If Mr Zwiers is a good-

leaver he will be entitled to a pro-rata portion

of the shares subject to the lock-up.

Remuneration information for the

Supervisory Board

The General Meeting determines the

remuneration of the Supervisory Directors. The

Supervisory Board submits from time to time

proposals to the General Meeting in respect of

the remuneration of the Supervisory Directors.

The remuneration of the Supervisory Board

may not be made dependent on the Company’s

results. Supervisory Directors will not receive

Ordinary Shares and/or rights to Ordinary

Shares as remuneration. The compensation

for the chair of the Supervisory Board has

been set at €50,000 (€55,000 after the 2025

annual general meeting of the Company) per

year and the compensation for Mr Benno van

Dongen has been set at €30,000 (€35,000

after the 2025 annual general meeting of

the Company) per year. Mr Hans Slootweg is

employed by Infestos Nederland and does not

receive compensation for his Supervisory Board

activities. NX Filtration has arranged and paid

for a directors and officers liability insurance

for the members of the Supervisory Board.

Internal pay ratio

Management Board

Compensation 2024 2023 2022

Salaries and

wages 1,068,760 775,911 564,795

Short-term

incentive plan 24,605 53,333 36,550

Social security

distributions 41,102 33,384 24,130

Pension

contributions (DC) 16,836 13,552 4,867

Share-based

payments 247,322 192,938 18,939

Fringe benefits 43,443 38,940 -

Total 1,442,066 1,108,058 649,281

Average number

of FTE’s 4.1 3.6 3.0

Average

compensation 353,448 304,412 216,427

Employee

compensation 2024 2023 2022

Salaries and

wages 10,639,706 7,631,639 4,948,344

Short-term

incentive plan 135,952 120,426 -

Social security

distributions 1,847,393 1,352,131 803,148

Pension

contributions (DC) 548,535 345,309 216,688

Share-based

payments 66,075 12,931 17,752

Fringe benefits 346,984 225,753 -

Total 13,584,645 9,688,190 5,985,932

Average number

of FTE’s 163 156 107

Average

compensation 83,316 62,243 55,891

Internal Pay Ratio

Management Board 4.2 4.9 3.9

Internal Pay Ratio CEO* 8.2 8.5 3.4

*the internal pay ratio CEO for 2024 is calculated using the

annualized renumeration of Mr Floris Jan Cuypers, and for 2023

using the annualized renumeration of Mr Jeroen Pynenburg.

The Remuneration Policy takes into account

the pay ratio within the organisation. The

NX Filtration internal pay ratio is calculated

by dividing the average total Management

Board compensation by the average employee

compensation. The average employee

compensation is based on the total personnel

cost (defined as salaries and wages, social

security contributions, pension contributions

and share-based payment costs) and the

average number of FTEs excluding the

Management Board (see also the relevant notes

to the Consolidated Financial Statements.

Advisory vote General Meeting

It is proposed to the General Meeting to approve

this remuneration report (advisory vote) in

the annual general meeting of 8 April 2025.

The Supervisory Board is pleased that the

2023 Remuneration Report received a positive

advisory vote in the annual general meeting of 9

April 2024, with 95% of the votes in favour of the

report.

99NX Filtration - Annual Report98 Report of the Supervisory Board

Internal audit function

NX Filtration does not have an internal audit

function. The need for an internal audit function

is assessed on a yearly basis by the Supervisory

Board. The Supervisory Board concluded that

the size of the Company and the combination

of a finance and control department with

accounting and audit knowledge, are presently

covering the requirements sufficiently.

External auditor

The Management Board and the Supervisory

Board have evaluated the activities performed

for the Company by PricewaterhouseCoopers

Accountants N.V. It is apparent that

PricewaterhouseCoopers Accountants N.V. is

capable of forming an independent judgment

concerning all matters that fall within the scope

of its auditing task; there is a good balance

between the effectiveness and efficiency of

their actions, for example in relation to auditing

costs, risk management and reliability.

Functioning of the Supervisory

Board and the Management

Board (evaluation accountability)

The Supervisory Board discussed, in the

absence of the Management Board, its own

functioning. The evaluation was performed

by the Chair of the Supervisory Board, by

means of a structured questionnaire, which

was subsequently discussed with the rest

of the Supervisory Board. The Supervisory

Board also filled in a questionnaire and

addressed items such as: team effectiveness,

interaction, transparency, composition and

profile, competences, effectiveness of individual

members, quality of information and the

relationship with the Management Board

and others, which is meant to also include the

relationship with key managers. The outcome

of the evaluation is positive. It was found that

the Supervisory Board organizes itself in an

effective and efficient manner and considers

the contributions of each Supervisory Board

member to be complementary in nature. There

is a good level of transparency amongst both

the Management Board and Supervisory Board.

The Supervisory Board evaluation delivered

areas for improvement and key topics for 2025:

(i) the Supervisory Board intends to intensify

discussions with the Management Board on

the effectiveness of NX Filtration’s sustainable

strategy, (ii) cost control measures and

possibilities to increase NX Filtration’s financial

flexibility, and (iii) the development of the sales

funnel.

The Supervisory Board has conducted an

annual review to identify any aspects with

regard to which the Supervisory Board

members require further training or education

during their term of office. For all members in

the Supervisory Board this continues to relate

to business dynamics, competitive arena, and

innovations in the water filtration industry.

We shared our reflections with the

Management Board members and had an

individual discussion with each to discuss last

year’s performance, area of improvement and/

or development and key priorities for 2025.

Financial statements and

auditor’s opinion

The financial statements 2024 included in this

annual report have been audited and PWC

has issued an unqualified opinion on them. The

financial statements were extensively discussed

with the Supervisory Board, in the presence

of the external auditor, and the Management

Board. The Supervisory Board is of the

opinion that the financial statements meet all

requirements for transparency and correctness.

Therefore, the Supervisory Board recommends

that the General Meeting of Shareholders to

be held on 8 April 2025 adopts the financial

statements and the appropriation of the result.

Result appropriation

NX Filtration realised a loss of

€ 23.1 million.

The proposal to the General Meeting is to

recognise this loss in retained earnings. The

members of the Supervisory Board have signed

the financial statements to comply with their

statutory obligation pursuant to article 2:101,

paragraph 2, of the Dutch Civil Code.

Gratitude & looking forward

We are grateful with NX Filtration’s partners,

customers and shareholders for their continued

support, confidence and loyalty, and our

employees for their continued involvement and

dedication. 2024 was a challenging year for NX

Filtration yet it made also major steps forward

with a new CEO and CFO, and the opening of

its new facility, and putting in place building

blocks facilitating further growth in the years

to come.

The Supervisory Board remains committed to

steer the Management Board towards a future

of continued success.

Hengelo, 10 February 2025

The Supervisory Board

Carolina Wielinga (Chair)

Benno van Dongen

Hans Slootweg

101NX Filtration - Annual Report100 Report of the Supervisory Board

Financial

statements

103NX Filtration - Annual Report102 Financial statements

Consolidated

financial statements

for the year ended

31 December 2024

Consolidated statement of comprehensive income

In EUR ‘000 Notes 2024 2023

Revenue from sale of goods 7 10,085 7,238

Other income 8 999 815

Gross income 11,084 8,053

Operating expenses

Costs of raw materials and consumables (3,933) (2,926)

Changes in inventories of finished goods

and work in progress 1,731 3,669

Personnel expenses 9 (14,111) (12,868)

Amortization on intangible assets 18 (705) (679)

Depreciation on property, plant and equipment

and right-of-use assets 19,20,10 (7,399) (3,671)

Operating costs 11 (9,644) (7,268)

External research & development costs 12 (786) (596)

Operating expenses (34,847) (24,339)

Operating Loss (23,763) (16,286)

Finance income (expenses) 14 694 1,939

Loss before income tax (23,069) (14,347)

Income tax benefit (expense) 15 (20) (8,945)

Net loss for the period (23,089) (23,292)

Other comprehensive result for the period - -

Total comprehensive loss for the period (23,089) (23,292)

(attributable to the owners of the Company)

Earnings per share

Basic earnings per share (EUR) 16 (0.41) (0.47)

Diluted earnings per share (EUR) 16 (0.41) (0.47)

105

NX Filtration - Annual Report104 Consolidated financial statements

Consolidated statement of financial position Consolidated statements of changes in equity

In EUR ‘000 Notes 31 December 2024 31 December 2023

Assets

Non-current assets

Intangible assets 18 3,741 2,637

Property, plant and equipment 19 75,052 57,890

Right-of-use assets 20 501 1,448

Deferred tax assets 21 1 16

Total non-current assets 79,295 61,991

Current assets

Inventories 22 18,145 15,063

Trade and other receivables 23 5,490 9,057

Cash and cash equivalents 24 53,375 49,928

Total current assets 77,010 74,048

Total assets 156,305 136,039

Group equity

Share capital 25 581 500

Share premium 25 195,477 170,450

Retained earnings (74,364) (51,498)

Total equity 121,694 119,452

Liabilities

Non-current liabilities

Borrowings 26 25,000 -

Lease liabilities 26 328 951

Total non-current liabilities 25,328 951

Current liabilities

Trade and other payables 27 9,100 15,074

Lease liabilities 26 183 562

Total current liabilities 9,283 15,636

Total liabilities 34,611 16,587

Total equity and liabilities 156,305 136,039

In EUR ‘000 Notes Attributable to equity owners of NX Filtration N.V.

Share Share Retained Total

capital premium earnings equity

Balance - 1 January 2023 500 170,450 (28,412) 142,538

Loss for the period - - (23,292) (23,292)

Other comprehensive result - - - -

Total comprehensive loss for the period - - (23,292) (23,292)

Transactions with owners in their capacity as owners

Issuance of ordinary shares - - - -

Share-based payment transactions 13 - - 206 206

Dividend - - - -

Balance - 31 December 2023 500 170,450 (51,498) 119,452

Balance - 1 January 2024 500 170,450 (51,498) 119,452

Loss for the period - - (23,089) (23,089)

Other comprehensive income (loss) - - - -

Total comprehensive loss for the period - - (23,089) (23,089)

Transactions with owners in their capacity as owners

Issuance of ordinary shares 25 79 25,027 - 25,106

Share-based payment transactions 13 2 - 223 225

Dividend - - - -

Balance - 31 December 2024 581 195,477 (74,364) 121,694

107

NX Filtration - Annual Report106 Consolidated financial statements

Consolidated statement of cash flows

General information

NX Filtration N.V. (NX Filtration or the

Company) is a public company with limited

liability (naamloze vennootschap), incorporated

under Dutch law, and the leading provider

of nanofiltration membrane technology for

producing pure and affordable water to

improve quality of life. NX Filtration obtained

its listing on Euronext Amsterdam in June 2021

through an IPO raising €165 million to enable

the Company’s commercial roll-out, capacity

expansion program and innovation agenda.

NX Filtration is the holding company of

the Group, which consists of NX Filtration

and, as at 31 December 2024, the following

subsidiaries:

Subsidiary Domicile Participation and country NX Filtration B.V. Hengelo, 100% the Netherlands NX Filtration Hengelo, 100% Real Estate B.V. the Netherlands NX Filtration Hengelo, 100% International B.V. the Netherlands- NX Filtration Delaware, 100% Americas LLC United States of America- NX Filtration Bangalore, 100% India Private Ltd Republic of India - NX Filtration Beijing, 100% (Beijing) People’s Republic Membrane of China Technology Co Ltd.

NX Filtration is registered with the Chamber

of Commerce under number 64951030 and has

its registered office at Haaksbergerstraat 95,

7554 PA, Hengelo, the Netherlands. Both NX

Filtration Real Estate B.V. and NX Filtration

International B.V. are incorporated and part of

the Group per 22 June 2022. The subsidiaries in

the United States of America, India and China

have been incorporated in the course of 2023.

The Company’s financial year covers the first

day of January and ends on the last day of

December of each year.

On 10 February 2025, the management

board of NX Filtration (Management Board)

authorized the financial statements for

publication. The financial statements as

presented in this report are subject to adoption

by the Annual General Meeting of shareholders

to be held on 8 April 2025.

Summary of significant

accounting policies

The principal accounting policies applied in the

preparation of these consolidated financial

statements are set out below. These policies

have been consistently applied to all the years

presented, unless otherwise stated.

Basis of preparation

These consolidated financial statements have

been prepared in accordance, and comply with

IFRS Accounting Standards as adopted in the

European Union (“IFRS Accounting Standards”),

where effective, for financial years beginning

In EUR ‘000 Notes 2024 2023

Cash flows from operating activities

Operating loss (23,763) (16,286)

Adjustments to reconcile profit before taxation to net cash flows:

Depreciation, amortisation and impairment expenses 10,18,19 8,104 4,350

Non cash items in operating loss - -

Income taxes (paid)/received (6) -

Share-based payment expenses 13 223 206

(Increase)/Decrease in working capital:

- Decrease (Increase) inventories (2,982) (8,263)

- Decrease (Increase) trade and other receivables 3,569 (1,903)

- Increase (decrease) trade and other payables (6,295) 10,152

Net cash inflow/(outflow) from operating activities (21,150) (11,744)

Cash flows from investing activities

Payment for property, plant and equipment 19 (24,123) (42,977)

Payment for intangible assets 18 (1,810) (963)

Net cash inflow/(outflow) from investing activities (25,933) (43,940)

Cash flows from financing activities

Proceeds from share premium contribution and issuance of shares 25 25,106 -

Proceeds from borrowings 26 25,000 -

Principal elements of lease payments 20 (591) (600)

Interest received 1,631 1,975

Interest paid (616) (37)

Net cash inflow (outflow) from financing activities 50,530 1,338

Net increase (decrease) in cash and cash equivalents 3,447 (54,346)

Cash and cash equivalents at the beginning of the financial year 49,928 104,274

Effects of exchange rate changes on cash and cash equivalents - -

Cash and cash equivalents at the end of the financial year 53,375 49,928

Notes

109NX Filtration - Annual Report108 Consolidated financial statements

1 January 2024 and also comply with the

financial reporting requirements included in

Part 9 of Book 2 of the Dutch Civil Code.

The preparation of these consolidated financial

statements in conformity with IFRS requires

the use of certain critical accounting estimates.

It also requires management to exercise

its judgment in the process of applying the

Company’s accounting policies. The areas

involving a higher degree of judgement or

complexity, or areas where assumptions and

estimates are significant to the financial

statements are disclosed in note 6 ‘Critical

accounting estimates and judgements’.

These consolidated financial statements have

been prepared on a going concern basis. In June

2021, NX Filtration became a publicly traded

company when it listed its ordinary shares on

Euronext Amsterdam, raising €165 million for

inter alia the acceleration of its business plan

including a medium-term objective to realize

a positive EBITDA margin by reaching a larger

scale of operations and realizing purchasing

benefits based on increasing volumes and

optimizing product designs.

Going Concern assessment

In recent years, the Company has been

incurring losses mainly due to ahead of the

curve investments to roll out our commercial

strategy, create global sales presence, further

develop the disruptive

HFNF

technology and

extend the production capacity to facilitate the

expected growth in revenue.

In 2024 the Company incurred net losses of

€ 23.1 million (2023: € 23.3 million) and

negative operating cash flows of € 21.2 million

(2023: € 11.7 million). Per 31 December 2024,

the cash balance amounts € 53.4 million

(31 December 2023: € 49.9 million).

The Company’s ability to continue as a going

concern is contingent upon its ability to execute

on the successful roll out of its business

strategy and to remain flexible in order to

mitigate unforeseen circumstances that will

impact the profitability of the Company. The

Company has a clear plan to become cash-flow

positive in the medium term.

The Company secured € 25.0 million of debt

financing in April 2024 (see note 26) and placed

new ordinary shares on 28 March 2024 raising

gross proceeds of approximately € 25.5 million.

The Company expects that this combined

financing package will fund the Company’s

operations and provide it with sufficient

headroom to fund its growth ambitions.

Therefore the accounting policies used in

the financial statements are based on the

expectation that The Company will be able to

continue as a going concern.

Basis of measurement

These consolidated financial statements have

been prepared on a historical cost basis, unless

stated otherwise. These consolidated financial

statements are presented in euro, which is the

Company’s functional currency. All amounts

have been rounded to the nearest thousand,

unless otherwise indicated.

Changes in accounting policies and

disclosures

A number of amended standards became

applicable for the current reporting period. The

Company did not have to change its accounting

policies or make retrospective adjustments as a

result of adopting these amended standards.

New and revised IFRSs effective in 2024

The following amendments and revisions to

existing standards became effective for the

Company consolidated financial statements as

of 1 January 2024:

Amendments to IAS 1, “Classifications of

Liabilities as Current or Non-current” and

“Non-current Liabilities with Covenants”

Amendments to IFRS 16, “Lease Liability in a

Sale and Leaseback”

Amendments to IAS 7 and IFRS 7, “Supplier

Finance Arrangement”

None of these standards which became

effective had a material impact on the

Company’s condensed financial statements.

This is also not expected on future reporting

periods or on foreseeable future transactions.

New accounting policies not yet effective

for 2024

Certain new accounting standards and

amendments to standards have been published

that are not mandatory for reporting periods

starting on or after 1 January 2024 and have

not been early adopted by the Company.

For none of these standards that are not

yet effective it is expected that they have a

material impact on the Company in the current

or future reporting periods and on foreseeable

future transactions.

Critical accounting policies

Consolidation

Subsidiaries are all entities over which the

Company has control. The Company controls an

entity where the Company is exposed to, or has

rights to, variable returns from its involvement

with the entity and has the ability to affect

those returns through its power to direct the

activities of the entity. Subsidiaries are fully

consolidated from the date on which control

is transferred to the Company. Subsidiaries

are deconsolidated from the date that control

ceases.

Inter-company transactions, balances and

unrealized gains on transactions between group

companies are eliminated. Unrealized losses are

also eliminated unless the transaction provides

evidence of an impairment of the transferred

asset. Accounting policies of subsidiaries have

been changed where necessary to ensure

consistency with the policies adopted by the

Group.

Foreign currency transactions and

translations

Foreign currency transactions are translated

into the functional currency of the Company

using the exchange rates at the dates of the

transactions. Foreign exchange gains and

losses resulting from the settlement of such

transactions, and from the translation of

monetary assets and liabilities denominated in

foreign currencies at year-end exchange rates,

are generally recognized in profit or loss.

The assets and liabilities of foreign operations

are translated into euro at the exchange

rates on the reporting date. The income and

expenses of foreign operations are translated

into euro at the exchange rates on the date of

transactions. The functional currencies of our

foreign operations are Chinese Yuan (CNY), US

dollar (USD) and Indian Rupees (INR).

Revenue

The Company manufactures and sells a range

of water filtration solutions to companies

serving the industrial and municipal sectors.

Sales are recognized when control of the

products has transferred, being when the

products are delivered or risks are transferred

to the customers, the customer has full

discretion over the use of the products, and

there is no unfulfilled obligation that could

affect the customer’s acceptance of the

products. Delivery occurs when the products

have been shipped to the specific location,

the risks of obsolescence and loss have been

transferred to the customer, and either

111NX Filtration - Annual Report110 Consolidated financial statements

the customer has accepted the products

in accordance with the sales contract, the

acceptance provisions have lapsed, or the

Company has objective evidence that all criteria

for acceptance have been satisfied.

Revenue is measured based on the

consideration specified in a contract with

a customer. The Company has no specific

obligations for returns, refund clauses nor

any other similar obligations specified in the

contract with customers. However, standard

product compliance warranty is provided to

customers, which is not considered a separate

performance obligation.

Government grants

Grants from the government are recognized

at their fair value where there is a reasonable

assurance that the grant will be received, and

the Company will comply with all attached

conditions. Government grants relating to costs

are deferred and recognized in the statement

of comprehensive income over the period

necessary to match them with the costs they

are intended to compensate.

Employee benefits

Short-term obligations

Liabilities for wages and salaries, including

non-monetary benefits, annual leave and

accumulating sick leave that are expected

to be settled fully within 12 months after

the end of the period in which the employees

render the related service are recognized in

respect of employees’ services up to the end

of the reporting period and are measured

at the amounts expected to be paid when

the liabilities are settled. The liabilities are

presented as current employee benefit

obligations in the balance sheet.

Salaries, wages and social security

contributions are charged to the consolidated

statement of comprehensive income based on

the terms of employment, when they are due to

employees and the tax authorities respectively.

Pension obligations

For defined contribution plans, the Company

pays contributions to publicly or privately

administered pension insurance plans on a

mandatory, contractual or voluntary basis. The

Company has no further payment obligations

once the contributions have been paid. The

contributions are recognized as employee

benefit expense when they are due. Prepaid

contributions are recognized as an asset to the

extent that a cash refund or a reduction in the

future payments is available.

Termination benefits are expensed at the earlier

of when the Company can no longer withdraw

the offer of those benefits and when the

Company recognizes costs for a restructuring.

Shared-based payments

The grant-date fair value of equity-settled

share-based payment awards granted to

employees is recognized as an expense, with

a corresponding increase in equity, over the

vesting period of the awards.

The amount recognized as an expense is

adjusted to reflect the number of awards for

which the related service and non-market

performance conditions are expected to

be met, such that the amount ultimately

recognized is based on the number of awards

that meet the related service and non-market

performance conditions at the vesting date.

The Company has no share-based payment

awards with non-vesting conditions nor with

market performance conditions.

Expenses

Expenses arising from the Company’s business

operations are accounted for in the year incurred.

Finance income & expenses

Finance income comprises interest income on

funds invested and from financial assets held to

maturity. Interest income is recognized in profit

or loss as it accrues, using the effective interest

method.

Finance expense comprises interest expense

on borrowings, bank and commitment fees,

Realized and unrealized foreign currency gains

and losses on monetary assets and liabilities,

are reported on a net basis.

Finance income or expenses are recognized as

they accrue, using the effective interest method.

Corporate income tax

The income tax expense or credit for the period

is the tax payable on the current period’s taxable

income, based on the applicable income tax rate

for each jurisdiction, adjusted by changes in

deferred tax assets and liabilities attributable to

temporary differences and to unused tax losses.

The current income tax charge (if applicable) is

calculated on the basis of the tax laws enacted

or substantively enacted at the end of the

reporting period in the countries where the group

companies operate and generate taxable income.

Management periodically evaluates positions

taken in tax returns with respect to situations

in which applicable tax regulation is subject

to interpretation and considers whether it is

probable that a taxation authority will accept an

uncertain tax treatment. The Company measures

its tax balances either based on the most likely

amount or the expected value, depending on

which method provides a better prediction of the

resolution of the uncertainty.

Deferred income tax is provided in full, using

the liability method, on temporary differences

arising between the tax bases of assets and

liabilities and their carrying amounts in the

consolidated financial statements. Deferred

income tax is determined using tax rates (and

laws) that have been enacted or substantively

enacted by the end of the reporting period and

are expected to apply when the related deferred

income tax asset is realized, or the deferred

income tax liability is settled. Deferred tax assets

are recognized only if it is probable that future

taxable amounts will be available to utilize those

temporary differences and losses.

Current and deferred tax is recognized in profit

or loss, except to the extent that it relates to

items recognized in other comprehensive income

or directly in equity. In this case, the tax is also

recognized in other comprehensive income or

directly in equity, respectively.

Intangible assets

Research and development

Development costs that are directly

attributable to the design and testing of

identifiable and unique products controlled

by the Company are recognized as intangible

assets where the following criteria are met:

• it is technically feasible to complete

the product or system so that it will be

available for use;

• management intends to complete the

product or system and use or sell it;

• there is an ability to use or sell the product

or system;

• it can be demonstrated how the product

or system will generate probable future

economic benefits;

• adequate technical, financial and other

resources to complete the development

and to use or sell the product or system are

available; and

• the expenditure attributable to the product

or system during its development can be

reliably measured.

Directly attributable costs that are capitalized

as part of the product include amongst

others payroll costs and other costs related

to creating or improving the existing product

portfolio in the development phase.

Capitalized development costs are recorded

as intangible assets and amortized in 5 years

from the point at which the asset is ready for

use. Other development expenditures that

do not meet these criteria are recognized as

an expense as incurred. Development costs

previously recognized as an expense are not

113NX Filtration - Annual Report112 Consolidated financial statements

recognized as an asset in a subsequent period.

Expenditure on research activities is recognized

as expense in the period in which it is incurred.

Concessions, licenses and rights to intellectual

property

Concessions, licenses and rights to intellectual

property are capitalized at historical cost. They

have a finite useful life and are subsequently

carried at cost less accumulated amortization

and impairment losses. These assets are

amortized over a period of 10 years.

Software

Software are capitalized at historical cost and

amortized on a straight-line basis over the

estimated useful life of the assets, typically

3 years. Cost associated with maintaining

software programs are recognized as an

expense as incurred.

Property, plant and equipment

All property, plant and equipment is stated

at historical cost less depreciation. Historical

cost includes expenditure that is directly

attributable to the acquisition of the items.

Subsequent costs 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 Company and the

cost of the item can be measured reliably. The

carrying amount of any component accounted

for as a separate asset is derecognized when

replaced. All other repairs and maintenance are

charged to profit or loss during the reporting

period in which they are incurred.

Depreciation on assets is calculated by

recognizing the difference between historical

cost and the estimated residual values using

the straight-line method over their estimated

useful life in profit or loss.

The estimated useful lives of property, plant

and equipment for current and comparable

periods are as follows:

Buildings 10 - 30 yearsMachinery and equipment 5 - 15 years Right-of-use assets 1 - 9 years Pilot equipment 5 years

The assets’ residual values and useful lives

are reviewed, and adjusted if appropriate, at

the end of each reporting period. The costs of

future replacement are capitalized based on

the component approach. Under this approach

the total costs are allocated to the ‘component

assets’. Government grants on investments,

if applicable, are deducted from the purchase

price or manufacturing price of the assets to

which the government grants relate.

An asset’s carrying amount is written down

immediately to its recoverable amount if the

asset’s carrying amount is greater than its

estimated recoverable amount.

Gains and losses on disposals are determined

by comparing proceeds with the carrying

amount and are recognized within the

consolidated statement of comprehensive

income.

Leases

As a lessee

At the inception of an agreement, the Company

assesses whether a contract is, or contains, a

lease. A contract is, or contains, a lease if the

contract conveys the right to control the use

of an identified asset for a period of time in

exchange for consideration. To assess whether

a contract conveys the right to control the use

of an identified asset, the Company uses the

definition of a lease in IFRS 16.

The Company, as a lessee, recognizes a

right-of-use asset representing its right to

use the underlying asset and a lease liability

representing its obligation to make lease

payments at the lease commencement date.

The Company elected to apply the recognition

exemption for both short-term and low value

leases – e.g. office equipment. As such, the

Company recognizes lease payments associated

with these leases as an expense on a straight-

line basis over the lease term.

The right-of-use asset is initially measured at

cost, which comprises the initial amount of the

lease liability adjusted for any lease payments

made at or before the commencement date,

plus any initial direct costs incurred and an

estimate of costs to dismantle and remove the

underlying asset or to restore the underlying

asset or the site on which it is located, less any

lease incentives received.

The right-of-use asset is subsequently

depreciated using the straight-line method from

the commencement date to the end of the lease

term, unless the lease transfers ownership of

the underlying asset to the Company by the end

of the lease term or the cost of the right-of-use

asset reflects that the Company will exercise a

purchase option. In that case the right-of-use

asset will be depreciated over the useful life of

the underlying asset, which is determined on

the same basis as those of property, plant and

equipment. In addition, the right-of- use asset

is periodically reduced by impairment losses, if

any, and adjusted for certain remeasurements

of the lease liability.

The lease liability is initially measured at the

present value of the lease payments that

are not paid at the commencement date,

discounted using the interest rate implicit

in the lease or, if that rate cannot be readily

determined, the Company’s incremental

borrowing rate. Subsequently, the lease liability

is increased by the interest costs on the lease

liability and decreased by lease payments made.

Lease payments included in the measurement

of the lease liability comprise the following:

• fixed payments, including in-substance

fixed payments;

• variable lease payments that depend on

an index or a rate, initially measured using

the index or rate as at the commencement

date;

• amounts expected to be payable under a

residual value guarantee; and

• the exercise price under a purchase

option that the Company is reasonably

certain to exercise, lease payments in an

optional renewal period if the Company

is reasonably certain to exercise an

extension option, and penalties for early

termination of a lease unless the Company

is reasonably certain not to terminate early.

The lease liability is measured at amortized

cost using the effective interest method.

The lease liability is remeasured when there

is a change in future lease payments arising

from a change in index or rate, a change in

the estimate of the amount expected to be

payable under a residual value guarantee, or

as appropriate, changes in the assessment

whether a purchase or renewal option is

reasonably certain to be exercised or a

termination option is reasonably certain not to

be exercised.

When the lease liability is remeasured as

abovementioned, a corresponding adjustment

is made to the carrying amount of the right-of-

use asset or is recorded in profit or loss if the

carrying amount of the right-of-use asset has

been reduced to zero.

The Company’s right-of-use assets and lease

liabilities are presented under Property,

plant and equipment and Lease liabilities,

respectively.

115NX Filtration - Annual Report114 Consolidated financial statements

As a lessor

Leases in which the Company does not transfer

substantially all the risks and rewards incidental

to ownership of an asset are classified as

operating leases. The Company has rental

income from the lease of pilot equipment.

This rental income is accounted for on a

straight-line basis over the lease terms and

is included in gross income in the statement

of comprehensive income. Initial direct costs

incurred in negotiating and arranging an

operating lease are added to the carrying

amount of the leased asset and recognized

over the lease term on the same basis as rental

income. Contingent rents are recognized as

gross income in the period in which they are

earned.

Impairment of non-financial assets

Non-financial assets with a definite useful life

are tested for impairment whenever events

or changes in circumstances indicate that the

carrying amount may not be recoverable. An

impairment loss is recognized for the amount

by which the asset’s carrying amount exceeds

its recoverable amount. The recoverable

amount is the higher of an asset’s fair value

less costs of disposal and value in use. For the

purposes of assessing impairment, assets are

grouped at the lowest levels for which there

are separately identifiable cash inflows which

are largely independent of the cash inflows

from other assets or groups of assets (cash-

generating units). Non-financial assets that

suffered an impairment are reviewed for

possible reversal of the impairment at the end

of each reporting period.

Inventories

Inventories mainly relate to raw materials, semi-

finished goods, work in progress and finished

goods and are valued at the lower of cost and

net realizable value. Cost comprises direct

materials, direct labour and an appropriate

proportion of variable and fixed overhead

expenditure, the latter being allocated on the

basis of normal operating capacity. Costs of

purchased inventory are determined after

deducting rebates and discounts. Costs are

determined using the first in first out method.

Net realizable value is the estimated selling

price in the ordinary course of business less

the estimated costs of completion and the

estimated costs necessary to make the sale.

Financial instruments

Financial assets – Classification and

measurement

The Company classifies its financial assets in

the following measurement categories:

• those to be measured subsequently at fair

value (either through other comprehensive

Income (OCI) or through profit or loss), and

• those to be measured at amortized cost.

The classification depends on the entity’s

business model for managing the financial

assets and the contractual terms of the cash

flows.

Financial assets – Recognition and derecognition

Regular purchases and sales of financial assets

are recognized on the trade-date, the date on

which the Company commits to purchase or sell

the asset. Financial assets are derecognized

when the rights to receive cash flows from

the financial assets have expired or have been

transferred and the Company has transferred

substantially all the risks and rewards of

ownership.

Financial assets – Initial recognition

At initial recognition the Company measures

a financial asset at its fair value. Except

for cash and cash equivalents, the initial

measurement of a financial asset is adjusted

for directly attributable transaction cost.

Transaction costs of financial assets carried at

fair value through profit or loss (cash and cash

equivalents) are expensed in profit or loss.

Financial assets – Subsequent Measurements

Subsequent measurement depends on the

Company’s business model for managing

the asset and the cash flow characteristics

of the asset. There are three measurement

categories into which the Company classifies its

debt instruments: (i) Amortized cost, (ii) Fair

value through profit or loss; and (iii) Fair value

through other comprehensive income.

The Company makes no use of derivative

financial instruments. Besides cash and

cash equivalents that are measured at fair

value through profit or loss, the Company’s

receivables are measured at amortized costs.

Interest income (if any) from these financial

assets is included in finance income using the

effective interest rate method. Any gain or loss

arising on derecognition is recognized directly in

profit or loss.

Financial assets – Impairment

The Company assesses on a forward-looking

basis the expected credit losses associated

with its financial instruments carried at

amortized cost. The impairment methodology

applied depends on whether there has been a

significant increase in credit risk. The Company

has no trade receivables nor amounts due

from customers for contract work including a

significant finance component and is therefore

allowed to apply the simplified approach under

IFRS 9, in which the credit losses are measured

using a lifetime expected loss allowance for all

trade receivables.

Financial liabilities - Recognition and

measurement

Financial liabilities are recognized when the

Company becomes a party to the contractual

provisions of the financial instrument. The

Company only has financial liabilities at

amortized cost and makes no use of derivative

financial instruments.

Financial liabilities at amortized costs

Financial liabilities at amortized cost include

trade, other payables and borrowings. Financial

liabilities are initially recognized at fair value

equaling the amount required to be paid,

less, when material, a discount to reduce the

payables to fair value. Subsequently financial

liabilities are measured at amortized cost using

the effective interest method. Interest expense

and foreign exchange gains and losses are

recognized in profit or loss.

Financial liabilities – Derecognition

The Company derecognizes a financial liability

when its contractual obligations are discharged

or cancelled or expire. On derecognition of

a financial liability, the difference between

the carrying amount extinguished and the

consideration paid (including any non-cash

assets transferred or liabilities assumed) is

recognized in the consolidated statement of

comprehensive income.

The Company also derecognizes a financial

liability when its terms are modified and

the cash flows of the modified liability are

substantially different, in which case a new

financial liability based on the modified terms

is recognized at fair value. However, when

the cash flows of the modified liability are

not substantially different, the Company (i)

recalculates the amortized cost of the modified

financial liability by discounting the modified

contractual cash flows using the original

effective interest rate and (ii) recognizes any

adjustment in the consolidated statement of

comprehensive income.

Offsetting financial instruments

Financial assets and liabilities are offset and

the net amount reported in the balance sheet

when there is a legally enforceable right to

offset the recognized amounts and there is an

intention to settle on a net basis or realize the

asset and settle the liability simultaneously. The

Company does not have any legally enforceable

117NX Filtration - Annual Report116 Consolidated financial statements

right to offset the recognized amounts in the

balance sheet.

Trade and other receivables

Trade and other receivables are amounts due

from customers for products delivered and

services performed in the ordinary course of

business. If collection is expected in one year or

less, they are classified as current assets. If not,

they are presented as non-current assets. Trade

receivables are generally due for settlement

immediately and therefore all classified as

current assets.

Trade receivables are recognized initially

at their transaction price, the amount of

consideration that is unconditional, unless

they contain significant financing components

when they are recognized at fair value. They

are subsequently measured at amortized cost

using the effective interest method, less loss

allowance.

Cash and cash equivalents

For the purpose of presentation in the

statement of cash flows, cash and cash

equivalents includes cash on hand, deposits held

at call with financial institutions, other short-

term, highly liquid investments with original

maturities of three months or less that are

readily convertible to known amounts of cash

and which are subject to an insignificant risk of

changes in value. Cash and cash equivalents are

measured at fair value.

Share capital – Ordinary shares

An ordinary share entitles its owner to a voting

right and, only to extent so ultimately decided

by the general meeting of the Company (the

General Meeting), to dividends.

Trade and other payables

These amounts represent liabilities provided to

the Company prior to the end of the financial

year which are unpaid. Trade and other

payables are presented as current liabilities

unless payment is not due within 12 months

after the reporting period. They are recognized

initially at their fair value. And subsequent

measurement at amortized cost using the

effective interest method.

Cash flow statement

The cash flow statement has been prepared

using the indirect method, whereby profit or

loss is adjusted for the effects of transactions

of a non-cash nature, any deferrals or accruals

of past or future operating cash receipts or

payments, and items of income or expense

associated with investing or financing cash flows.

Segment reporting

The Company is engaged in the business of

developing, producing and selling hollow fiber

membrane modules. NX Filtration sells its

filtration membranes in the form of modules in

its two business lines: Clean Municipal Water

and Sustainable Industrial Water. As there is a

strong interrelationship between NX Filtration’s

different business activities and these business

lines, management reviews the profitability and

monitors the performance of the two business

lines, despite the split in revenue, solely on an

aggregated basis for resource allocation and

overall performance measurement. All financial

segment information can therefore be found in

the consolidated financial statements.

Financial instruments and

risk management

Financial Instrument classification

As result of regular business practices, the

Company holds positions in a variety of

financial instruments. The financial instruments

are presented in the balance sheet and consists

of cash and cash equivalents, trade receivables

and other receivables, trade payables and other

payables.

The Company does not use foreign exchange

contracts and/or foreign exchange options and

does not deal with such financial derivatives.

On each balance date, financial instruments

are reviewed to see whether or not an objective

indication exists for the impairment of a

financial asset or a group of financial assets.

If an objective indication for impairment

exists, the Company determines the amount of

impairment losses and charges this amount to

the consolidated statement of comprehensive

income. As a result of the use of financial

instruments, the Company incurs credit risks,

liquidity risks and market risks.

Risk management

The Management Board has the overall

responsibility for the establishment and

oversight of the Group’s risk management

framework. The Group’s risk management

policies are established to identify and analyze

the risks faced by the Group, to set appropriate

risk limits and controls and to monitor risks and

adherence to limits. Risk management policies

and systems are reviewed regularly to reflect

changes in market conditions.

Credit risk

Credit risk is the risk of a financial loss in case a

customer does not comply with the contractual

obligations. Credit risks are mainly incurred

from receivables from customers. The Company

executes a strict policy to minimize credit risks.

To control these risks, the Company makes use

of information from licensed credit agencies.

If necessary, credit risks will be mitigated by

the use of credit insurances, bank guarantees,

prepayments and other insurances.

Cash- and cash equivalents are placed by a

number of banks. The Company determines the

credit risk of cash- and cash equivalents that

are placed with these banks, by solely doing

business with highly respectable banks.

The Company evaluates the concentration risk

with respect to trade receivables as medium.

For the financial year 2024, one customer

accounted for approximately 14% (2023: 12%)

of the revenue of the sale of goods.

Expected credit losses

The Company has the following types of

financial assets that are subject to the

expected credit loss model:

The Company assesses on a forward-looking

basis the expected credit losses associated

with its financial instruments carried at

amortized cost. The impairment methodology

applied depends on whether there has been a

significant increase in credit risk.

The Company applies the IFRS 9 simplified

approach for the calculation of expected credit

losses by recognizing a loss allowance based on

lifetime expected credit losses for all trade and

other receivables at each reporting date.

Individually significant trade receivables are

tested for impairment on an individual basis.

The remaining trade receivables are assessed

collectively in groups that share similar credit

risk characteristics and the days past due.

The Company has established a provision

matrix that is based on its historical credit

loss experience, adjusted for forward-looking

factors specific to the debtors and the

economic environment. The Company retrieves

the latter from externally available information

from credit rating agencies. Credit insured

amounts are excluded from the determination

of the loss allowance.

119NX Filtration - Annual Report118 Consolidated financial statements

The tables below analyses the Company’s

financial liabilities on their contractual

maturities for all non- derivative financial

liabilities for which the contractual maturities

are essential for an understanding of the timing

of the cash flows.

Market risk

Foreign exchange risk

The Company does predominately business in

the euro currency. Therefore, the currency risk

is limited and largely concerns positions and

(future) transactions in euros. Management has

determined, based on a risk assessment, that

these currency risks do not need to be hedged.

The Company’s exposure to other foreign

exchange movements is not significant and

therefore no sensitivity analysis is included. The

concentration risk is therefore considered low.

Price risk

The Company incurs price risks on the purchase

of (raw) materials for the difference between

the market price at the time of the purchase

and during the actual performance. Price risk is

currently managed by agreeing on (long term)

framework agreements with its suppliers. With

the expected growing volume of purchase, the

Company expects to be able to negotiate lower

prices for raw materials.

In case the costs of raw materials and

consumables increase with 2%, the impact on

profit before tax is € 0.1 million.

Interest risk

The Company is exposed to interest rate risk

and cash flow risk on its current accounts. If

interest rates on its cash and cash equivalent

balances would increase by 0.5%, the impact on

profit before tax is € 0.1 million.

On that basis, the loss allowance as of

31 December 2024 and 31 December 2023 was

determined as follows for both trade and other

receivables:

During 2024 a couple of individual customers

with long overdue balances were fully provided

for. This is the main reason for the increase of

our loss allowance towards € 500 thousand end

of 2024 (2023: € 42 thousand).

Trade and other receivables are written off

when there is no reasonable expectation of

recovery. Indicators that there is no reasonable

expectation of recovery include, amongst

others, the failure of a debtor to engage in a

repayment plan with the Company and a failure

to make contractual payments.

Impairment losses on trade and other

receivables are recognized as selling costs

and are part of the operating costs in the

consolidated statement of comprehensive

income. Subsequent recoveries of amounts

previously written off are credited against the

same line item.

Liquidity risk

Liquidity risk is the risk that the Company will

not be able to meet its financial obligations.

The Company’s approach to managing liquidity

is to ensure that, as far as possible, it will

always have sufficient liquidity to meet its

obligations when they become due, avoiding

unacceptable losses or damages to the

Company’s reputation. The Company monitors

its liquidity risk on an ongoing basis.

In June 2021, NX Filtration became a publicly

traded company when it listed its ordinary

shares on Euronext Amsterdam, raising €165

million for inter alia the acceleration of its

business plan. This provided the necessary

funds for amongst others investing in

pilot systems, expanding the organization,

expanding the production capacity and

supporting its innovation agenda. As per

31 December 2024, the Company has € 53.4

million cash available.

In EUR ‘000 31 December 2024 Current Overdue Overdue Overdue Overdue > amount < 30 days 31 - 60 days 61 - 90 days 90 days Expected loss rate 2% 3% 0% 0% 24%Gross carrying amount - trade receivables and other receivables 3,024 635 9 - 1,822Loss allowance 47 19 - - 434 In EUR ‘000 31 December 2023 Current Overdue Overdue Overdue Overdue > amount < 30 days 31 - 60 days 61 - 90 days 90 days Expected loss rate 0% 0% 0% 0% 2%Gross carrying amount - trade receivables and other receivables 6,864 35 50 4 2,147 Loss allowance - - - - 42

In EUR ‘000 31 December 2024 Less than 3 months Between 1 Over 3 months to 1 year and 5 years 5 years TotalTrade and other payables 9,100 - - - 9,100 Borrowings - - 5,460 19,540 25,000 Lease liabilities 53 130 259 69 511 Total non-derivatives 9,153 130 5,719 19,609 34,611 In EUR ‘000 31 December 2023 Less than 3 months Between 1 Over 3 months to 1 year and 5 years 5 years TotalTrade and other payables 15,006 68 - - 15,074 Lease liabilities 140 422 951 - 1,513 Total non-derivatives 15,146 490 951 - 16,587

121

NX Filtration - Annual Report120 Consolidated financial statements

Fair value estimation

At 31 December 2024 and 31 December 2023,

the Company’s cash and cash equivalents are

measured at fair value. The carrying amounts

of trade and other receivables, trade and other

payables and borrowings approximated their

fair values.

Fair value is defined as the price that would be

received for sale of an asset or paid for transfer

of a liability, in an orderly transaction between

market participants at the measurement

date. IFRS establishes a three tier fair value

hierarchy, which prioritizes the inputs used in

measuring fair value. The hierarchy gives the

highest priority to unadjusted quoted prices in

active markets for identical assets or liabilities

(Level 1 measurements) and the lowest priority

to unobservable inputs (Level 3 measurements).

Critical accounting

estimates and judgements

The preparation of the financial statements

requires management to make judgements,

estimates and assumptions that affect the

reported amounts of assets and liabilities

and the reported amounts of revenues and

expenses during the reported periods.

The estimates and associated assumptions

are based on historical experiences and various

other factors that are believed to be reasonable

under the circumstances. Actual results may

differ from these estimates.

Development costs

The capitalized development costs are based on

management judgements taken into account:

• the technical feasibility to complete

the product or system so that it will be

available for use;

• management intends to complete the

product or system and use or sell it;

• the ability to use or sell the product or

system;

• the availability of adequate technical,

financial and other resources to complete

the development.

In determining the development costs to

be capitalized, the Company estimates the

expected future economic benefits of the

respective product or system that is the

result of a development project. Furthermore,

management estimates the useful life of such

product or system (note 2).

Property, plant and equipment

Estimates are required to determine the

(remaining) useful lives of fixed assets, useful

lives are determined based on an asset’s age,

the frequency of its use and technological

changes in production.

Periodical evaluations are performed in

order to ensure timely detection of triggers

that might indicate impairment of specific

assets. Whenever such triggers are noted, the

related assets are assessed for impairment as

appropriate.

Deferred tax assets

Deferred tax assets are recognized for the

future tax consequences attributable to

temporary differences between the financial

statement carrying amounts of existing assets

and liabilities and their respective tax bases,

unused tax losses and unused tax credits.

Deferred tax assets are recognized only to

the extent that it is probable that sufficient

taxable profit will be available against which

those unused tax losses, unused tax credits

or deductible temporary differences can be

utilised. This assessment requires significant

management judgements and assumptions and

is inherently uncertain.

Capital management

The Company’s objectives when managing

capital is to safeguard the Company’s ability

to continue as a going concern and maintain an

optimal capital structure to reduce the cost of

capital. The table below provides an analysis of

our cash and cash equivalents, liabilities and the

movements in net debt for each of the periods

presented.

New leases relates to new equipment used

for the logistics in our factory. The new loan

(borrowings) relates to the new long term

financing agreement (see note 26). Other

changes relates to the ended rental contracts

with our former locations, the yearly lease

payments and a negative non-cash movement

which relates to effective interest accounting

on lease liabilities.

Total Cash and borrowings & cash In EUR ‘000 Borrowings Lease Liabilities lease liabilities equivalents Net debtAt 1 January 2023: - 1,808 1,808 (104,274) (102,466)Cash flows - - - 54,346 54,346 New leases - 240 240 - 240 Other changes - (535) (535) - (535)Net debt - 31 December 2023 - 1,513 1,513 (49,928) (48,415)Cash flows - - - (3,447) (3,447)New loan 25,000 - 25,000 - 25,000 New leases - 334 334 - 334 Other changes - (1,336) (1,336) - (1,336)Net debt - 31 December 2024 25,000 511 25,511 (53,375) (27,864)

123NX Filtration - Annual Report122 Consolidated financial statements

Revenue from sale of goods

The Company’s revenue originates from sale

of products. The Company recognizes all its

revenue at a point in time, when control over

the goods is transferred to the customer.

Set out below is the disaggregation of the

Company’s revenue from sale of goods based

on the Company’s two business lines.

In EUR ‘000 2024 2023Type of markets Sustainable Industrial Water 6,361 4,625 Clean Municipal Water 3,724 2,613 Total revenues from sale of goods 10,085 7,238

Set out below is the disaggregation of the

Company’s revenue from sale of goods by

region based on the destination of products.

In EUR ‘000 2024 2023Geographical split The Netherlands 311 606 Europe (excluding the Netherlands) 4,434 3,711 North America 2,033 885 Asia 2,271 1,888 Rest of World 1,036 148 Total revenues from sale of goods 10,085 7,238

Other income

Set out below is the disaggregation of the

Company’s other income.

In EUR ‘000 2024 2023Government grants 172 174 Pilot income 611 641 Other 216 - Total other income 999 815

Government grants comprises of the several

government grants received for the Company’s

research & development activities in the field

of water filtration. NX Filtration has fulfilled

all conditions relating to government grants

at time of recognition. Pilot income relates

to rental income from pilot equipment. Other

includes other (rental) activities.

Personnel expenses

In EUR ‘000 2024 2023Salaries and wages 12,271 11,423 Social security contributions 1,654 1,457 Pension contributions 563 359 External personnel cost 490 497 Capitalised personnel expenses (867) (868)Total personnel expenses 14,111 12,868

Capitalised personnel expenses relate for

€ 408 thousand to development costs

(intangible assets) and € 459 thousand to

property plant & equipment (2023: intangible

€ 184 thousand, property plant & equipment

€ 684 thousand).

The number of FTEs per year-end are:

2024 2023Direct employees 70 67 Indirect employees 99 99 Total FTE 169 166

A total of 26 (2023: 24) employees are

employed outside the Netherlands. This

includes 8 employees which are hired through

an external human resource service provider

(2023: 12). The average number of FTEs during

2024 was 163 (2023: 159).

Pensions

The Company has a defined contribution

scheme for certain key employees, in which

the pension contribution is predetermined and

based on the gross salary and the age of the

individual employee. Furthermore, the Company

has a defined contribution scheme for the other

employees, in which the pension contribution is

predetermined and based on the gross salary

only. Both schemes limit the Group’s legal

obligation to the amount it agrees to contribute

during the period of employment. The assets of

the plans are held separately from those of the

Company in funds under the control of pension

insurance companies.

The average annual net premium contribution

for 2024 is 6.0% (2023: 4.0%). The pension

contributions are paid on a monthly basis to

the pension fund. The net contribution for 2024

amounts to € 563 thousand (€ 359 thousand

in 2023). The premium payable during the

financial year is charged to the consolidated

statement of comprehensive income and is

classified as costs of personnel.

Aside from premium payables, the Company

does not have any additional obligations in

respect to the pension schemes.

Depreciation and

amortization

In EUR ‘000 2024 2023Amortization on intangible assets (705) (679) Depreciation on property, plant and equipment (5,483) (3,126) Gains & losses on disposal of assets (1,378) - Depreciation on right-of-use assets (538) (545) Total depreciation and amortization (8,104) (4,350)

In the course of 2024 we have moved our office

and production equipment from our rented

locations towards our new factory in Hengelo.

As a consequence we had to dispose some of

our capitalized installations and equipment,

which resulted in a loss on disposal of assets of

€ 1.4 million.

Operating costs

The operating costs can be divided into the

following cost categories:

In EUR ‘000 2024 2023Housing expenses 2,491 1,534 Other personnel expenses 1,096 1,006 Administrative expenses 2,198 1,888 Selling expenses 2,955 1,699 Operating expenses 904 1,141 Total operating costs 9,644 7,268

The increase in housing costs relates to

additional costs for utilities and energy

consumption. The increase in selling expenses

is caused by increased costs for marketing,

events, tradeshows and also includes an

addition to our loss allowance for trade

receivables of € 0.5 million.

External research &

development costs

In EUR ‘000 2024 2023Gross external R&D Costs 1,439 1,233 Capitalized external R&D costs (653) (637)Total external research & development cost (net) 786 596

Capitalised external R&D costs relate for

€ 653 thousand to development costs

(intangible assets) (2023 also mainly relates to

development costs).

To maintain its technological leadership

position, NX Filtration continuously invests in

its research and development activities for

further improvement of existing products and

development of new products. Gross research

and development costs, including R&D salaries

in 2024 amounted to € 4.6 million (2023: € 4.2

million).

125NX Filtration - Annual Report124 Consolidated financial statements

Development costs that are directly

attributable to the design and testing of

identifiable and unique products and systems

controlled by the Company are recognized as

intangible assets and are capitalized as part of

the product. Other research and development

expenditures are recognized as an expense as

incurred.

NX Filtration currently relies on its commercially

ready and available product ranges with proven

applications. Going forward, the Company’s

strategy is to build further on this technology

and make the technology available towards

different applications and markets, which may

require additional product development costs in

future periods.

Share based payments

Depositary Receipts

Since the incorporation of the Company

in 2016, eligible and selected employees

and directors have been provided with the

opportunity to invest indirectly in ordinary

shares in the capital of the Company by

acquiring Depositary Receipts (“DRs”) issued by

a foundation that is controlled by the majority

shareholder. The DRs are not freely transferable

and, under certain circumstances, the majority

shareholder may require a participant to sell

DRs to a party designated by the majority

shareholder. If a participant voluntarily leaves

the Company prior to the end of the vesting

period, he/she is not entitled to the full fair

market value.

The share participation arrangement is

accounted for as an equity-settled share-

based arrangement since the Company and

its subsidiaries do not have an obligation to

settle or to repurchase any DRs from the

participants. Each DR issued by the foundation

represents one ordinary share in the capital of

the Company.

The number of outstanding DRs held by

employees of the Group are as follows:

2024 2023Outstanding at 1 January 3,466,468 3,792,094 Granted (purchased) during the year - - Exercised (20,000) (325,626)Outstanding shares at 31 December 3,446,468 3,466,468

As the Company’s ordinary shares were not

listed at the grant date, the fair value of

the ordinary shares has been estimated by

the Company as of each date a participant

indirectly acquired shares in the Company.

For accounting purposes, the fair value of an

award is equal to the fair market value of the

underlying ordinary shares at the grant date

less the acquisition price paid by a participant

for the DRs. Given that the participants have

paid the estimated fair market value of the

underlying shares as of each grant date, the fair

value of the share-based payment awards is nil.

Long-term incentive plan – Key employees

The Management Board recognises the

importance of its key employees to the future

success of the Company. Therefore, on 26 May

2021, a long-term incentive plan (‘LTIP Key

employees’) was introduced for a number of

designated employees within the group of the

Company.

The following grants, comprising of Ordinary

Shares in the Company, have been made under

this plan:

Number of Exercise Grant date Awards granted Price1 January 2022 6,982 Nil 1 February 2022 788 Nil 1 January 2023 4,425 Nil 1 January 2024 11,142 Nil

The conditional rights to existing Ordinary

Shares granted will vest on the day that is four

years after the grant date, on the condition

that the relevant employee continues to be

employed by the Company on this date (subject

to certain arrangements for exceptional

circumstances, such as death of the employee).

Besides the aforementioned service vesting

condition, no other vesting conditions are

applicable for the LTIP Key employees.

Long-term incentive plan – Management Board

As part of the newly introduced remuneration

policy, which has been adopted by the general

meeting of shareholders on 11 June 2021, a

long-term incentive plan for the Management

Board (‘LTIP Management Board’) was

introduced in order to increase the alignment

between shareholder’s interest and the interest

of the Management Board. The following

grants, comprising of Ordinary Shares in the

Company, have been made under this plan:

Number of ExerciseGrant date Awards granted Price20 May 2022 8,296 Nil 7 April 2023 9,091 Nil10 December 2024 21,627 Nil

The conditional rights to Ordinary Shares

granted will vest on the day that is three years

after inception of the service and performance

period, subject to continued employment as

a member of the Management Board and

certain non-market based performance vesting

conditions.

The service and performance period are

starting on the 1st of January of the applicable

financial year, in which the grant has been

made. Besides the aforementioned service and

performance vesting conditions there is one

additional condition in place, which is an two

year holding period for the Management Board

after vesting date.

The awards with grant date 10 December 2024

are in favor of the new Management Board

members Mr Floris Jan Cuypers and Mr Jan

Feie Zwiers.

Summary of changes in outstanding shares

Changes in outstanding shares for the period:

LTIP Key LTIP Management employees Board1 January 2024 10,985 17,387 Granted 11,142 21,627 Forfeited - (17,387)Vested - - 31 December 2024 22,127 21,627

None of the outstanding shares related to the

LTIP Key employees and LTIP Management

Board are vested at 31 December 2024.

Fair value measurement

The Company used the Black & Scholes model

to determine the fair value of the share-based

payments plans at grant date. The fair value

of the Company’s Ordinary Shares for the

different plans at grant date was:

Grant date Share award plan Grant date fair valueLTIP Key employees 1 January 2022 10.84 LTIP Key employees 1 February 2022 10.84 LTIP Management Board 20 May 2022 11.08 LTIP Key employees 1 January 2023 11.00LTIP Management Board 7 April 2023 11.10LTIP Key employees 1 January 2024 6.70LTIP Management Board 10 December 2024 4.20

The present value for expected dividend over

the vesting period for all plans is nil because

the Company has currently no intention to

distribute dividends in the foreseeable future

in order to be able to further invest in the

growth of the Company. Consequently and in

127NX Filtration - Annual Report126 Consolidated financial statements

conjunction with an exercise price of nil, both

the expected volatility and risk-free-rate have

no impact on the fair value determination at

the grant date. Which means that the fair value

of the conditional rights to Ordinary Shares is

equal to the share price on the grant date.

Share-based payment expenses

Share-based payment expenses recognized

as other operating costs in the statement of

comprehensive income:

In EUR ‘000 2024 2023LTIP Key employees 63 13 LTIP Management Board (5) 5 Sign-on equity incentive 253 188 Total share-based payment expenses 311 206

The LTIP of the Management Board includes

releases of accruals & settlements which

resulted in a € 5 thousand benefit in 2024. For

further information about the sign-on equity

incentive we refer to note 17.

Finance income and

expenses

In EUR ‘000 2024 2023Interest income 1,678 2,004 Interest expenses borrowings (791) - Bank fees & other interest expenses (137) - Interest expenses related to lease liabilities (56) (65) Finance (income) expenses 694 1,939

Interest expenses borrowings relates to the

new long term financing agreement (see note

26). Interest expense related to lease liabilities

is the result of application of IFRS 16. The

interest income is resulting from our cash and

cash equivalents.

Income tax benefit

(expense)

This note provides an analysis of the Company’s

income tax, showing how the tax benefit or

expense is affected by non-deductible items.

The tax on the Company’s loss before tax

differs from the statutory amount that would

arise using the tax rate applicable to losses of

the entity. The reconciliation of the effective

tax rate is as follows:

In EUR ‘000 2024 2023Current tax Current tax on profits for the year (6) - Adjustments for previous years - - Total current tax (expense) benefit (6) -

Deferred income tax Income tax (14) (8,945) Change in tax rates - - Total deferred tax benefit (expense) (14) (8,945) Total income tax benefit (expense) (20) (8,945)

In EUR ‘000 2024 2023Result from operations (23,089) (23,292)Total income tax (20) (8,945) Loss before income tax (23,069) (14,347)Tax calculated based on Dutch tax rate 25.8% 25.8%Tax effect of: Adjustments for previous years 0.0% -0.2%Non-taxable expenses -0.4% -0.3%Derecognition of deferred tax asset prior years 0.0% -62.4%Derecognition of deferred tax asset current-year 0.0% -11.8%Current-year losses for which no deferred tax asset is recognised -25.5% -13.5%Change in tax rates 0.0% 0.0%Other differences 0.0% 0.0%Effective tax rate -0.1% -62.3%

The deferred tax assets resulting from carry-

forward losses in the Netherlands have been

fully derecognized in 2023 (see note 21). In 2024

no deferred tax assets are recognized.

Earnings per share

2024 2023Net loss attributable to equity holders (in EUR ‘000) (23,089) (23,292)Outstanding number of shares for the basic earnings per share as at 1 January 50,025,190 50,000,000 Effect of issued ordinary shares 7,832,341 - Effect of shares issued as a share plan 196,539 25,190Outstanding number of shares for the basic earnings per share as at 31 December 58,054,070 50,025,190 Weighted-average number of shares outstanding for the purpose of basic earnings per share 56,053,109 50,013,010 Weighted-average number of shares outstanding for the purpose of diluted earnings per share 56,053,109 50,013,010

Earnings per share Basic earnings per share (EUR), based on ordinary shares outstanding at 31 December (0.40) (0.47)Basic earnings per share (EUR), based on weighted average (0.41) (0.47)Diluted earnings per share (EUR), based on weighted average (0.41) (0.47)

Management Board Fringe TerminationShare-based Total Total remuneration Salaries benefits benefit Bonus Pension payments 2024 2023 Mr Michiel Staatsen 191,035 - - - - - 191,035 198,980 Mr Erik Roesink 174,770 - - - - - 174,770 175,225 Mr Marc Luttikhuis 124,247 6,426 - 6,250 3,607 9,055 149,585 404,413 Mr Jeroen Pynenburg 165,305 23,154 198,750 -2,083 6,012 71,901 463,039 329,440 Mr Jan Feie Zwiers 129,183 6,605 - 10,688 4,009 86,175 236,660 - Mr Floris Jan Cuypers 126,571 7,258 - 9,750 3,207 80,191 226,977 - Totaal 911,111 43,443 198,750 24,605 16,835 247,322 1,442,066 1,108,058

The total amount of remuneration of the

Managing Directors for the financial year 2024

comprised € 1,442,066 (2023: € 1,108,058).

Remuneration of the Management Board

and the Supervisory Board

129NX Filtration - Annual Report128 Consolidated financial statements

Mr Marc Luttikhuis stepped down as CFO and

member of the Management Board as per

30 June 2024. Mr Jeroen Pynenburg stepped

down as CEO and member of the Management

Board as per 31 July 2024. As a consequence

the related STI, LTI and sign-on incentive plans

were settled. For Mr Jeroen Pynenburg this

included a termination benefit and a redelivery

of part of the awarded shares under his sign-on

equity incentive. These shares (2/3) were not

yet released from their lock-up restrictions. In

respect hereof, the Company paid a settlement

price of € 87,833.

Both new directors Mr Floris Jan Cuypers and

Mr Jan Feie Zwiers received a sign-on equity

incentive with a value for 2024 of € 350,000

respectively € 300,000 which are included

in the total amount of renumeration. The

characteristics of this incentive are described

below.

In 2024, the Company has facilitated a sign-on

equity incentive with Mr Floris Jan Cuypers and

Mr Jan Feie Zwiers and issued 196,539 ordinary

shares to Stichting Bewaarneming Aandelen

NX Filtration, with a value of € 650,000 in

aggregate. These ordinary shares have been

delivered to a designated securities account and

are subject to customary lock-up provisions.

The lock-up of the ordinary shares under the

sign-on equity incentive will be three years after

10 September 2024, where 1/3 of the ordinary

shares will be released each year and the leaver

provisions provide for a re-delivery of the

ordinary shares in case of a bad-leaver.

Mr Michiel Staatsen and Mr Erik Roesink

participate directly and indirectly in the share

capital of the Company. Their direct investments

are the result of their participation in the

Company’s equity offering in April 2024, in which

Michiel Staatsen acquired 76,804 Ordinary

Shares, and Erik Roesink acquired 30,721

Ordinary Shares. The indirect investments

are held through the STAK, which has issued

depositary receipts of shares (certificaten

van aandelen) in the capital of the Company

for Ordinary Shares (the DRs) to them. The

management board collectively holds 2,578,800

DRs (see note 13) in the share capital of the

Company, of which Mr Michiel Staatsen holds

967,050 DRs and Mr Erik Roesink 1,611,750 DRs.

The total amount of compensation of the

Supervisory Board for the financial year 2024

amounted to € 80,000 (2023: € 80,000).

The compensation for Ms Carolina Wielinga,

chair of the Supervisory Board for the financial

year 2024 amounts to € 50,000 (2023: €

50,000) and the compensation for Mr Benno

van Dongen amounts to € 30,000 (2023:

€ 30,000). Mr Hans Slootweg is employed

by Infestos Nederland and does not receive

compensation for his Supervisory Board

activities.

The Company does not provide loans, advance

payments or guarantees to members of

the Management Board or members of the

Supervisory Board.

Intangible assets

The movement in intangible assets during the

years was as follows:

Development costs

Additions to intangible fixed assets relate to

internal development projects for new products

or systems or development projects for new

features to existing products and systems.

Concessions and rights of intellectual

property

Additions for concessions and rights of

intellectual property relate to payments made

to the patent office for the filing process of the

Company’s patents and intellectual property

rights.

Software

Additions to software relate to externally

acquired programs and software for amongst

others sales, engineering and data management.

Concessions and rights ofIn EUR ‘000 Development costs intellectual property Software Total At 1 January 2023 Cost 3,078 275 164 3,517 Accumulated impairments and amortisation (1,020) (117) (27) (1,164)Net book value 2,058 158 137 2,353 Year ended 31 December 2023 Opening net book value 2,058 158 137 2,353 Additions 730 65 167 962 Acquisitions - - - - Amortisation for the year (601) (32) (45) (678)Closing net book value 2,187 191 259 2,637 At 31 December 2023 Cost 3,808 340 332 4,480 Accumulated impairments and amortization (1,621) (149) (73) (1,843)Net book value 2,187 191 259 2,637 Year ended 31 December 2024 Opening net book value 2,187 191 259 2,637 Additions 1,061 - 748 1,809 Acquisitions - - - - Amortisation for the year (580) (34) (91) (705)Closing net book value 2,668 157 916 3,741 At 31 December 2024 Cost 4,870 340 1,079 6,289 Accumulated impairments and amortization (2,202) (183) (163) (2,548)Net book value 2,668 157 916 3,741

131

NX Filtration - Annual Report130 Consolidated financial statements

Property, plant and equipment

The movement in property, plant and equipment

during the years was as follows:

The Company’s additions from under

construction towards land & buildings and

machinery & equipment mainly relates to the

new large-scale factory for the production

of our membrane modules according to plan

in the first half-year of 2024. The additions

to machinery and equipment mainly relate

to expansion of the Company’s production

capacity. We have started depreciation for the

new factory and machinery in the second half

year of 2024, although not all new machinery &

equipment have already been integrated in our

production processes.

The additions to pilot equipment mainly relate to

the expansion of its pilot fleet. The depreciation

accounting policies for PP&E are included in the

section accounting policies of the Company.

Right-of-use assets

The movement in the right-of-use assets during

the years was as follows:

In EUR ‘000 2024 2023At 1 January Cost 2,825 2,585 Accumulated depreciation (1,377) (832)Net book value 1,448 1,753 Additions 334 240 Other / remeasurement (5) - Disposals (2,116) - Depreciation of disposals 1,378 - Depreciation for the year (538) (545)Net book value at 31 December 501 1,448

Total gross right-of-use assets:

31 December 31 DecemberIn EUR ‘000 2024 2023Buildings - 1,863 Vehicles 707 922 Fork-life truck 336 40 Total gross right-of-use assets 1,043 2,825

Total depreciation charge right-of-use-assets:

In EUR ‘000 2024 2023Buildings 286 333 Vehicles 210 208 Fork-life truck 42 4 Total depreciation charge 538 545

Interest expense (included in finance cost) 56 65

The total cash outflow for leases in 2024 was

€ 591 thousand (2023: € 600 thousand).

In 2024 all our rental contract related to our

office and production location were settled

with owners and or rental companies and have

been included as disposal.

Deferred tax assets

31 December 31 DecemberIn EUR ‘000 2024 2023Deferred tax assets Timing differences 1 16 Carry forward losses - - Total 1 16 Of which: Current (<1 year) 1 16 Non-current (>1 year) - -

31 December 31 DecemberIn EUR ‘000 2024 2023Deferred tax assets At 1 January 16 8,960 Change in timing differences (15) 3 Movement in loss compensation - (8,947)At 31 December 1 16

As of December 31, 2024, the amount of tax

losses that can be offset in the future amounts

to € 70.4 million (€ 48.7 million per December

31, 2023). At 31 December 2023, the deferred

tax assets have been fully derecognized. The

remaining € 1 thousand temporary difference is

related to leases (right-of-use assets).

In line with IFRS regulations and

interpretations, management evaluated

positive and negative evidence supporting

the valuation of deferred tax assets for tax

losses. The delay in the business plan changed

the balance in this assessment resulting in the

derecognition of the deferred tax assets at the

end of 2023. Management emphasizes that

Machinery and Pilot Assets underIn EUR ‘000 Land & buildings equipment equipment construction Total At 1 January 2023 Cost 4,048 9,401 7,031 2,141 22,621 Accumulated impairments and depreciation (47) (3,011) (1,028) - (4,086)Net book value 4,001 6,390 6,003 2,141 18,535 Year ended 31 December 2023 Opening net book value 4,001 6,390 6,003 2,141 18,535 Additions - - - 42,977 42,977 Reclassification assets under construction 8 884 724 (1,616) (0)Reclassification to inventories - - (484) - (484) Disposal - (237) - - (237)Depreciation for the year (56) (1,596) (1,474) - (3,126)Depreciation of disposal (9) 234 - - 225 Closing net book value 3,944 5,675 4,769 43,502 57,890

At 31 December 2023 Cost 4,056 10,049 7,271 43,502 64,878 Accumulated impairments and depreciation (112) (4,374) (2,502) - (6,988)Net book value 3,944 5,675 4,769 43,502 57,890 Year ended 31 December 2024 Opening net book value 3,944 5,675 4,769 43,502 57,890 Additions - - - 24,123 24,123 Reclassification assets under construction 43,365 22,903 29 (66,297) - Reclassification - 210 (210) - - Disposal (518) (2,625) (64) - (3,207)Depreciation for the year (1,531) (2,598) (1,354) - (5,483)Depreciation of disposal 163 1,510 56 - 1,729 Closing net book value 45,423 25,075 3,226 1,328 75,052

At 31 December 2024 Cost 46,903 30,537 7,026 1,328 85,794 Accumulated impairments and depreciation (1,480) (5,462) (3,800) - (10,742)Net book value 45,423 25,075 3,226 1,328 75,052

133NX Filtration - Annual Report132 Consolidated financial statements

this assessment is not a change in its medium

and long term targets. This derecognition has

no cash implications and the tax losses remain

available for the Company at the moment it

starts to generate profits.

Inventories

31 December 31 DecemberIn EUR ‘000 2024 2023Raw materials 7,051 5,114 Semi finished goods 5,514 3,189 Finished goods 4,850 6,409 Work in progress 730 351 Total 18,145 15,063

During 2024 the company wrote down

€ 0.1 million to lower net realizable value

(31 December 2023: € nil).

Trade and other

receivables

31 December 31 DecemberIn EUR ‘000 2024 2023Trade receivables 4,498 4,722 Less: loss allowance (500) (42)Trade receivables - net 3,998 4,680 Prepaid expenses 466 498 Other taxes 375 3,491 Other receivables 651 388 5,490 9,057 Less non-current portion - - Current portion 5,490 9,057

The fair value of the receivables approximates

the carrying amounts. As at 31 December 2024

and 31 December 2023 mainly all receivables

are denominated in euro currency. Information

about the Company’s exposure to credit and

market risks, and impairment losses for trade

and other receivables is included in note 3

‘Financial instruments and risk management’.

Cash and cash equivalents

31 December 31 DecemberIn EUR ‘000 2024 2023Cash and cash equivalents 53,375 49,928 Total 53,375 49,928

The cash and cash equivalents are freely

disposable to the Company.

Equity

Ordinary shares

The movement of the ordinary shares in 2024

and 2023 is outlined in the tables below.

The Company’s issued capital amounted to

€ 500,251.90 at 31 December 2023, divided into

50,025,190 Ordinary Shares, The authorized

capital (maatschappelijk kapitaal) of NX

Filtration N.V. amounts to € 1,750,000 divided

into 175,000,000 ordinary shares.

On 28 March 2024, the Company issued

7,832,341 ordinary shares against an issue

price of €3.255 each with a nominal value of

€ 0.01. On 10 September 2024, the Company

issued 196.539 ordinary shares to Stichting

Bewaarneming Aandelen NX Filtration, for the

purposes of the sign-on equity incentives for

Mr Cuypers and Mr Zwiers.

This is resulting in 8,028,880 newly issued

ordinary shares in 2024. So the Company’s

current issued capital amounts to € 580,540.70

divided into 58,054,070 ordinary shares. All

ordinary shares are fully paid up.

The share premium reserve relates to

contribution on issued shares in excess of the

nominal value of the shares (above par value).

Retained earnings

The retained earnings are restricted due to

a legal reserve for capitalized development

costs of € 2.7 million (31 December 2023: € 2.2

million) which is not available for distribution.

Loss for the period

The proposal to the General Meeting is that the

2024 loss for the period will be recognized in

retained earnings.

Number of Par value Share premium Total ordinary shares EUR ‘000 EUR ‘000 EUR ‘000Opening balance 1 January 2023 50,000,000 500 170,450 170,950 Share issuance 25,190 - - - Balance 31 December 2023 50,025,190 500 170,450 170,950 Share issuance 8,028,880 81 25,027 25,108 Balance 31 December 2024 58,054,070 581 195,477 196,058

135NX Filtration - Annual Report134 Consolidated financial statements

Non-current liabilities

31 December 31 DecemberIn EUR ‘000 2024 2023Borrowing (subject to future covenants) 25,000 - Leases 328 951 Total (non-current liabilities) 25,328 951

Borrowings

On 10 April 2024, NX Filtration Real Estate B.V.,

a wholly-owned subsidiary of the Company,

entered into a financing agreement with ABN

AMRO Bank N.V. (ABN AMRO) pursuant to

which ABN AMRO has granted two loans to

NX Filtration Real Estate B.V.:

a loan with a maturity of ten (10) years in the

principal amount of € 12,500,000 with EIB

interest discount

This loan carries an annual variable interest

rate of 3-months EURIBOR + a 2.28% markup

(including the EIB interest discount). According

to the financing agreement, this loan will be

repaid in 31 installments of € 195,000 starting

1 July 2026, and one closing repayment of

€ 6,455,000 at 1 April 2034.

a loan with a maturity of ten (10) years in the

principal amount of € 12,500,000

This loan carries an annual variable interest

rate of 3-months EURIBOR + a 2.60% markup.

According to the financing agreement, this loan

will be repaid in 31 installments of € 195,000

starting 1 July 2026, and one closing repayment

of € 6,455,000 at 1 April 2034.

The fair value approximates the carrying

amount of in total € 25.0 million.

Material terms and conditions

NX Filtration Real Estate B.V. and ABN AMRO

have agreed to certain terms and conditions,

including financial covenants and security rights

in favour of ABN AMRO.

The following financial covenants apply as from

30 June 2024.

Guaranteed capital (Equity ratio)

The guaranteed capital of NX Filtration Real

Estate B.V. should be equal to or more than

35% (tested on a yearly basis, starting

31 December 2024).

The equity ratio is calculated by equity

divided by the balance sheet total. Both are

adjusted for intangible assets, deferred taxes,

subsidiaries, minority interest, any liabilities or

receivables related to shareholders or board

members and intercompany positions.

Debt service coverage ratio

The debt service coverage ratio of NX Filtration

Real Estate B.V. should be equal to or more

than 1.10 (tested on a yearly basis, starting

31 December 2024).

The debt service coverage ratio is calculated

by dividing net earnings before interest, taxes,

depreciation and amortization by repayments,

income of (minority) participations and

subsidiaries, interest costs and other financial

income and expenses.

Loan to value ratio

The loan to value ratio of NX Filtration Real

Estate B.V. may not exceed:

-55.8% in the period 30 June 2024 until

31 December 2027; and

-50.0% in the period as from 1 January 2028.

These ratios are tested on a yearly basis,

starting 31 December 2024

NX Filtration Real Estate B.V. complied with

the financial covenants on 31 December 2024.

Based on current scenario’s and forecast

NX Filtration Real Estate B.V. expects to be

compliant with sufficient headroom on the next

testing date 31 December 2025.

NX Filtration Real Estate granted the following

security rights in favor of ABN AMRO:

Mortgage Rights

- A first-ranking mortgage, amounting to

EUR 40,000,000.00, plus 40% for interest

and costs relating to the financing

agreement. This mortgage has been

granted on the registered property of

NX Filtration Real Estate B.V. in Hengelo,

Haaksbergerstraat 95, the Netherlands,

in accordance with a notarial deed of

mortgage. The mortgage covers also

certain other registered rights.

Pledges

- A first ranking pledge on receivables and

rights from existing and future rental

agreements.

- A pledge on inventories of NX Filtration

Real Estate B.V., on the basis of the general

banking terms and conditions.

In addition to the security rights granted by NX

Filtration Real Estate B.V., NX Filtration B.V.

granted a first pledge on a water treatment

plant (which is used for the Company’s own

operations).

Other Securities and Declarations

- Cash flow guarantee from NX Filtration

N.V., located in Enschede, which will be

terminated if the EBITDA of the Company

is at least EUR 16,000,000.

- Repayment of certain intercompany

receivables by means of a debt-for-equity

swap in NX Filtration Real Estate B.V.

ultimately on 30 June 2024, which has been

finalized.

137NX Filtration - Annual Report136 Consolidated financial statements

Lease liabilities

The Company leases several assets, which

can be combined into the asset classes: (i)

Buildings, (ii) Equipment and (iii) Vehicles.

These contracts are typically entered into

for a period between 3 to 8 years, but some

leases may include renewal and/or termination

options.

31 December 31 DecemberIn EUR ‘000 2024 2023Buildings - 987 Equipment 276 18 Vehicles 235 508 Total 511 1,513

The maturity of the lease liabilities can be

specified as follows:

Right-of-use assets

Right-of-use assets related to leases that

do not meet the definition of investment

property are presented as property, plant and

equipment. The Company has no right-of-use

assets that meet the definition of investment

property.

Amounts recognized in the statement of

comprehensive income and cash flows

Besides the interest expenses related to lease

liabilities and depreciation charges on right-of-

use assets as disclosed in Note 14 and Note 20,

respectively, the Company recognized in 2024

within the statement of comprehensive income

€ 40 thousand (2023: € 13 thousand) relating

to low value leases.

Extension and termination options

During 2024 the Company has ended her

contracts within the building asset class that

include renewal and termination options

or a combination of both. At 31 December

2023 the renewal options are included in

the measurement of the lease liabilities, no

termination options are included.

Trade and other payables

31 December 31 DecemberIn EUR ‘000 2024 2023Trade payables 4,340 13,039 Tax payables 346 316 Employee benefits 662 631 Payments received in advance 490 279 Other liabilities 3,262 809 Total 9,100 15,074

All current liabilities fall due in less than one

year. The fair value of the current liabilities

approximates the carrying amount due to

its short-term character. The entire amount

of payments received in advance has been

recognized as income in the subsequent period.

As at 31 December 2024 and 31 December

2023 the payables are mainly denominated in

euro currency. The increase in trade payables is

related to received invoices for our assets under

construction.

Contingencies and

commitments

Capital Expenditure Commitments

NX Filtration B.V. and NX Filtration Real

Estate B.V. have signed a number of purchase

contracts related to buildings, machinery and

equipment capital expenditures, amounting to

€ 1.1 million (2023: € 20 million).

Purchase Commitments

Outstanding commitments related to operating

activities and the purchase of raw materials are

amounting to € 1.0 million.

Related party transactions

All legal entities that can be controlled, jointly

controlled or significantly influenced are

considered to be a related party. Also, entities

which can control, jointly control or significantly

influence the Company are considered a related

party. In addition, statutory and supervisory

directors and close relatives are regarded as

related parties.

The following transactions were carried out

with related parties:

• Key management compensation, as further

disclosed in note 17 above;

• Management fee to Infestos Holding E B.V,

based on the consultancy agreement

between Infestos Holding E B.V. and NX

Filtration as entered into on the date of IPO

in the amount of € 150 thousand;

• Polymer Filtration Solutions GmbH (PFS)

is a long-term supplier of sulfonated poly

(ether sulfone) to NX Filtration. PFS is

under the (indirect) control of Infestos

Nederland B.V.

All these transactions are made on terms

equivalent to those that prevail in arm’s length

transactions.

Events after the end of the

reporting period

No such events to report.

Repayment Remaining term Remaining obligation in >1 year termIn EUR ‘000 31 December 2024 2025 and <5 year >5 yearsBuildings - - - - Equipment 276 39 168 69 Vehicles 235 144 91 - Total 511 183 259 69

139NX Filtration - Annual Report138 Consolidated financial statements

Company financial

statements

Company balance sheet as at 31 December 2024

Before profit allocation

In EUR ‘000 Notes 31 December 2024 31 December 2023

Assets

Non-current assets

Intangible Assets 3 2,826 2,379

Financial fixed assets 4 69,044 50,914

Total non-current assets 71,870 53,293

Current assets

Receivables 108 157

Receivable from group companies 6 - 17,964

Cash and Cash Equivalents 7 51,246 48,309

Total current assets 51,354 66,430

Total assets 123,224 119,723

Equity and liabilities

Shareholders’ equity

Issued share capital 581 500

Share premium 195,477 170,450

Legal and statutory reserves 8 2,669 2,188

Other reserves 8 (53,944) (30,394)

Result for the period (23,089) (23,292)

Total equity 121,694 119,452

Current liabilities

Trade and other payables 284 -

Payable to group companies 6 1,246 -

Other payables - 271

Total current liabilities 1,530 271

Total equity and liabilities 123,224 119,723

141NX Filtration - Annual Report140 Company financial statements

Company income statement for the year ended 31 December 2024

General information

The company financial statements are part

of the consolidated financial statements of

NX Filtration N.V. (the Company).

Basis of preparation

The Company financial statements of

NX Filtration N.V. have been prepared in

accordance with Part 9, Book 2 of the Dutch

Civil Code. In accordance with sub 8 of article

362, Book 2 of the Dutch Civil Code, the

Company financial statements are prepared

based on the accounting principles of

recognition, measurement and determination

of profit, as applied in the consolidated

financial statements. These principles also

include the classification and presentation of

financial instruments, being equity instruments

or financial liabilities.

In case no other policies are mentioned, refer

to the accounting policies as described in

the accounting policies in the consolidated

financial statements of this Annual report.

For an appropriate interpretation, the

company financial statements of NX Filtration

N.V. should be read in conjunction with the

consolidated financial statements.

All amounts are presented in euro and have

been rounded to the nearest thousand, unless

stated otherwise. The balance sheet and

income statement include references. These

refer to the notes.

The current financial year covers the period

1 January 2024 until 31 December 2024. The

previous financial year covers the period

1 January 2023 until 31 December 2023.

Critical accounting policies

Investments in subsidiaries

Subsidiaries are all entities (including

intermediate subsidiaries) over which the

Company has control. The Company controls

an entity when it is exposed, or has rights, to

variable returns from its involvement with the

subsidiary and has the ability to affect those

returns through its power over the subsidiary.

Subsidiaries are recognized from the date on

which control is transferred to the Company

or its intermediate holding entities. They

are derecognized from the date that control

ceases.

Investments in subsidiaries are measured at

net asset value. Net asset value is based on

the measurement of assets, provisions and

liabilities and determination of profit based

on the principles applied in the consolidated

financial statements. In case of a negative net

equity value of a subsidiary, the negative value

is initially deducted from loans due from the

respective subsidiary.

In EUR ‘000 Notes 2024 2023

Revenue 9 53 53

Amortization of intangible assets 3 (614) (633)

Personnel expenses (1,486) (1,136)

General expenses 11 (1,436) (972)

Operating loss (3,483) (2,688)

Finance income 12 3,771 2,421

Finance expenses 13 (53) -

Finance income (expense) 3,718 2,421

Profit (loss) before income tax 235 (267)

Income tax benefit (expense) 5 (6,040) (12,581)

Share of net loss of investments in subsidiaries 4 (17,284) (10,444)

Loss for the period after income tax (23,089) (23,292)

Notes

143NX Filtration - Annual Report142 Company financial statements

Intangible assets

The movement in intangible assets during the

year was as follows:

Amortization rates:

Development costs 20%

Concessions and rights of intellectual property 10%

Financial fixed assets

The movement in the financial fixed assets

during the years was as follows:

The receivables from group companies end of

2024 are considered as long-term financing

and are interest-bearing, based on a 3-month

Euribor plus margin, with no fixed repayment

schedule.

The reclassification relates to the negative

equity value of NX Filtration International B.V.,

which has been deducted from the receivable

from group companies end of 2023 and which

became positive again 2024.

Investment Loans / receivables

In EUR ‘000 in subsidiaries from group companies Total

At 1 January 2023 47,813 - 47,813

Investment/ changes - 13,545 13,545

Share of net loss (10,444) - (10,444)

Other movements - - -

37,369 13,545 50,914

Reclassification 298 (298) -

At 31 December 2023 37,667 13,247 50,914

At 1 January 2024 37,667 13,247 50,914

Investment/ changes 19,700 15,714 35,414

Share of net loss (17,284) - (17,284)

Other movements - - -

40,083 28,961 69,044

Reclassification (298) 298 -

At 31 December 2024 39,785 29,259 69,044

Share in issued share capital at Share in issued share capital at

31 December 2024 31 December 2023

NX Filtration B.V. 100% 100%

NX Filtration Real Estate B.V. 100% 100%

NX Filtration International B.V. 100% 100%

3 4

Concessions

and rights of

In EUR ‘000 Development costs intellectual property Total

At 1 January 2023

Cost 3,078 275 3,353

Accumulated impairments and amortisation (1,020) (117) (1,137)

Net book value 2,058 158 2,216

Year ended 31 December 2023

Opening net book value 2,058 158 2,216

Additions 731 65 796

Acquisitions - - -

Amortisation for the year (601) (32) (633)

Closing net book value 2,188 191 2,379

At 31 December 2023

Cost 3,809 340 4,149

Accumulated impairments and amortization (1,621) (149) (1,770)

Net book value 2,188 191 2,379

Year ended 31 December 2024

Opening net book value 2,188 191 2,379

Additions 1,061 - 1,061

Acquisitions - - -

Amortisation for the year (580) (34) (614)

Closing net book value 2,669 157 2,826

At 31 December 2024

Cost 4,870 340 5,210

Accumulated impairments and amortization (2,201) (183) (2,384)

Net book value 2,669 157 2,826

145

NX Filtration - Annual Report144 Company financial statements

Income taxes

The income tax expense can be specified as

follows:

31 December 31 December

In EUR ‘000 2024 2023

Tax benefit (expense)

NX Filtration N.V. (6,040) (12,581)

As of December 31, 2024, the total amount

of unrecognized tax losses amounts to € 70.4

million (€ 48.7 million as per December 31,

2023). The tax expense of 2024 relates to the

corporate income tax recharged from the

subsidiaries within the fiscal unity. The deferred

tax assets resulting from the carry-forward

losses in the Netherlands have been fully

derecognized in 2023.

Receivables & Payables

group companies

The receivables & payables group companies

are considered as short-term financing and are

interest-bearing, based on a 3-month Euribor

plus margin, with no fixed repayment schedule.

Cash and cash equivalents

31 December 31 December

In EUR ‘000 2024 2023

ABN AMRO bank 153 204

Van lanschot bank 129 130

HSBC 18,363 20,743

Goldman Sachs 20,810 7,621

Barclays 8,215 17,795

Rabobank 3,576 1,816

Total 51,246 48,309

The cash and cash equivalents are freely

disposable to the Company.

Shareholders’ equity

Reference is made to note 25 of the

consolidated financial statements for an

explanation of the equity composition of the

Company.

Legal and statutory reserves

The legal reserve relates to a reserve for

capitalized development costs.

In EUR ‘000 2024 2023

At 1 January 2,188 2,058

Movement in legal reserve 481 130

At 31 December 2,669 2,188

Other reserves

The other reserves can be specified as follows:

In EUR ‘000 2024 2023

At 1 January (30,394) (21,828)

Allocation of previous

year loss (23,292) (8,642)

Share-based payment

transactions 223 206

Movement in legal reserve (481) (130)

At 31 December (53,944) (30,394)

Revenue

In EUR ‘000 2024 2023

Charged patent rights 48 48

Management fee 5 5

Total 53 53

Average numbers of

employees

In 2024, the company had 4 employees (2023:

4 employees). None of these employees works

abroad.

General expenses

In EUR ‘000 2024 2023

Audit fees 174 150

Legal fees 169 116

Consultancy fee

Infestos Holding E B.V. 150 150

Listing costs 202 194

Other general costs 741 362

Total 1,436 972

The following audit fees were expensed in the

income statement in the reporting period.

The fees listed above relate to the services

provided to the Company by accounting firms

and external independent auditors as referred

to in Section 1(a) of the Dutch Accounting

Firms Oversight Act (Wta).

PricewaterhouseCoopers

In EUR ‘000 Accountants N.V. Other network Total network

2024 2023 2024 2023 2024 2023

Audit of the financial statements 174 150 - - 174 150

Other audit procedures - - - - - -

Tax services - - - - - -

Other non-audit services - - - - - -

Total 174 150 - - 174 150

147NX Filtration - Annual Report146 Company financial statements

Finance income

In EUR ‘000 2024 2023

Interest from cash (equivalents)

and deposits 1,678 2,000

Interest on receivables from

group companies 2,093 421

Total 3,771 2,421

Finance expense

In EUR ‘000 2024 2023

Interest on payables

group companies (53) -

Total (53) -

Contingencies and

commitments

Fiscal Unity

The Company constitutes the fiscal unity

‘NX Filtration N.V.’ with its Dutch subsidiaries

for corporate income tax purposes and value

Added Tax. The standard conditions prescribe

that each of the companies is liable for the

corporate income tax payable by all companies

belonging to the fiscal unity. The corporate

income tax (liable or receivable) positions of

the Dutch subsidiaries are offset and settled

against the current account of the parent

company NX Filtration N.V.

Events after the reporting

period

Nothing to report.

Authorisation of the financial statements

Hengelo, 10 February 2025

Management Board

Floris Jan Jan Feie Michiel Erik

Cuypers Zwiers Staatsen Roesink

CEO CFO COO CTO

149NX Filtration - Annual Report148 Company financial statements

Other

information

151NX Filtration - Annual Report150 Other information

Provision in the Articles of

Association relating to profit

appropriation

Article 31. Profits and Distributions.

31.1 The Management Board, with the

approval of the Supervisory Board, may

decide that the profits realised during

a financial year fully or partially be

appropriated to increase and/or form

reserves.

31.2 The profits remaining after application of

Article 31.1 shall be put at the disposal of

the General Meeting. The Management

Board, with the approval of the

Supervisory Board, shall make a proposal

for that purpose. A proposal to pay a

dividend shall be dealt with as a separate

agenda item at the General Meeting of

Shareholders.

31.3 Distributions from the Company’s

distributable reserves are made pursuant

to a resolution of the Management

Board, with the approval of the

Supervisory Board.

31.4 Provided it appears from an interim

statement of assets signed by

the Management Board that the

requirement mentioned in Article

31.7 concerning the position of the

Company’s assets has been fulfilled,

the Management Board may, with the

approval of the Supervisory Board, make

one or more interim distributions to the

holders of Shares.

31.5 The Management Board may, with the

approval of the Supervisory Board,

decide that a distribution on Shares

shall not take place as a cash payment

but as a payment in Shares, or decide

that holders of Shares shall have the

option to receive a distribution as a

cash payment and/or as a payment in

Shares, out of the profit and/or at the

expense of reserves, provided that the

Management Board is designated by the

General Meeting pursuant to Articles 6.2.

With the approval of the Supervisory

Board, the Management Board shall

determine the conditions applicable to

the aforementioned choices.

31.6 The Company’s policy on reserves and

dividends shall be determined and

can be amended by the Management

Board, subject to the approval of the

Supervisory Board. The adoption and

thereafter each amendment of the

policy on reserves and dividends shall

be discussed and accounted for at the

General Meeting of Shareholders under a

separate agenda item.

31.7 Distributions may be made only insofar

as the Company’s equity exceeds the

amount of the paid in and called up part

of the issued capital, increased by the

reserves which must be kept by virtue of

the law or these Articles of Association.

Article 32. Payment of and Entitlement to

Distributions.

32.1 Dividends and other distributions will be

made payable pursuant to a resolution

of the Management Board within

four weeks after adoption, unless the

Management Board sets another date

for payment.

32.2 A claim of a Shareholder for payment

of a distribution shall be barred after

five years have elapsed after the day of

payment.

32.3 For all dividends and other distributions

in respect of Shares included in the

Statutory Giro System the Company

will be discharged from all obligations

towards the relevant Shareholders

by placing those dividends or other

distributions at the disposal of, or in

accordance with the regulations of,

Euroclear Netherlands.

153NX Filtration - Annual Report152 Profit appropriation

Our opinion

In our opinion:

• the consolidated financial statements

of NX Filtration N.V. together with its

subsidiaries (‘the Group’) give a true and

fair view of the financial position of the

Group as at 31 December 2024 and of its

result and cash flows for the year then

ended in accordance with IFRS Accounting

Standards as adopted by the European

Union (‘EU’) and with Part 9 of Book 2 of

the Dutch Civil Code;

• the company financial statements of NX

Filtration N.V. (‘the Company’) give a true

and fair view of the financial position of

the Company as at 31 December 2024

and of its result for the year then ended

in accordance with Part 9 of Book 2 of the

Dutch Civil Code.

What we have audited

We have audited the accompanying financial

statements 2024 of NX Filtration N.V.,

Amsterdam. The financial statements comprise

the consolidated financial statements of the

Group and the company financial statements.

The consolidated financial statements comprise:

• the consolidated statement of financial

position as at 31 December 2024;

• the following statements for 2024: the

consolidated statements of comprehensive

income, changes in equity and cash flows;

and

• the notes to the financial statements,

including material accounting policy

information and other explanatory

information.

The company financial statements comprise:

• the company balance sheet as at

31 December 2024;

• the company income statementfor the year

then ended; and

• the notes, comprising a summary of the

accounting policies applied and other

explanatory information.

The financial reporting framework applied in

the preparation of the financial statements is

IFRS Accounting Standards as adopted by the

EU and the relevant provisions of Part 9 of Book

2 of the Dutch Civil Code for the consolidated

financial statements and Part 9 of Book 2 of

the Dutch Civil Code for the company financial

statements.

The basis for our opinion

We conducted our audit in accordance with

Dutch law, including the Dutch Standards

on Auditing. We have further described our

responsibilities under those standards in the

section ‘Our responsibilities for the audit of the

financial statements’ of our report.

We believe that the audit evidence we have

obtained is sufficient and appropriate to

provide a basis for our opinion.

Independence

We are independent of NX Filtration N.V.

in accordance with the European Union

Regulation on specific requirements regarding

statutory audit of public-interest entities, the

‘Wet toezicht accountantsorganisaties’ (Wta,

Audit firms supervision act), the ‘Verordening

Independent

auditor’s report

To: the general meeting and the supervisory board of NX Filtration N.V.

Report on the audit of the

financial statements 2024

155NX Filtration - Annual Report154 Independent auditor’s report

inzake de onafhankelijkheid van accountants

bij assuranceopdrachten’ (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).

Our audit approach

We designed our audit procedures with respect

to the key audit matters, fraud and going

concern, and the matters resulting from that,

in the context of our audit of the financial

statements as a whole and in forming our

opinion thereon. The information in support

of our opinion, such as our findings and

observations related to individual key audit

matters, the audit approach fraud risk and the

audit approach going concern was addressed

in this context, and we do not provide separate

opinions or conclusions on these matters.

Overview and context

NX Filtration N.V. is a public limited liability

company (N.V.) which is specialised in the

production of advanced hollow fibre membrane

modules for nanofiltration, ultrafiltration

and microfiltration applications. The Group

comprises several components and therefore we

considered our group audit scope and approach

as set out in the section ‘The scope of our group

audit’.

The completion of the construction of the

new large-scale factory and the delay in the

realization of the business plan of

NX Filtration N.V. impacted the financial year

2024. This affected our audit procedures as

described in the section ‘Key audit matters’.

As part of designing our audit, we determined

materiality and assessed the risks of material

misstatement in the financial statements.

In particular, we considered where the

Management Board made important

judgements, for example, in respect of

significant accounting estimates that involved

making assumptions and considering future

events that are inherently uncertain. In these

considerations, we paid attention to, amongst

others, the assumptions underlying the physical

and transition risk related to climate change. In

note 6 to the consolidated financial statements,

the Company describes the areas of judgement

in applying accounting policies and the key

sources of estimation uncertainty.

Taking into consideration the anticipated

growth in revenues we considered the risk of

fraudulent reporting due to overstating the

revenues to be a key audit matter. Additionally,

we identified the capitalisation of property,

plant and equipment as key audit matter, given

the significance of the construction project

related to the new large-scale factory and the

transaction being outside the normal course of

business.

NX Filtration N.V. assessed the possible effects

of climate change on its financial position, refer

to the ‘sustainability report’ in the Report of the

Management Board. We discussed NX Filtration

N.V.’s assessment and governance thereof

with the Management Board and evaluated

the potential impact on the financial position

including underlying assumptions and estimates.

The expected effects of climate change are not

considered a key audit matter.

We ensured that the audit team included the

appropriate skills and competences which are

needed for the audit of NX Filtration N.V.

The outline of our audit approach was as follows:

Materiality

• Overall materiality: €1,000,000.

Audit scope

• We performed a full scope audit on NX

Filtration N.V., NX Filtration B.V. and NX

Filtration Real Estate B.V.

• Audit coverage: 100% of consolidated

revenue, 99% of consolidated total assets

and 96% of consolidated profit before tax.

Key audit matters

• The risk of fraudulent reporting due to

overstating revenues; and

• Capitalisation of property, plant and

equipment.

Materiality

Audit scope

Key audit

matters

157NX Filtration - Annual Report156 Independent auditor’s report

Materiality

The scope of our audit was influenced by the

application of materiality, which is further

explained in the section ‘Our responsibilities for

the audit of the financial statements’.

Based on our professional judgement we

determined certain quantitative thresholds for

materiality, including the overall materiality for

the financial statements as a whole as set out in

the table below. These, together with qualitative

considerations, helped us to determine

the nature, timing and extent of our audit

procedures on the individual financial statement

line items and disclosures and to evaluate

the effect of identified misstatements, both

individually and in aggregate, on the financial

statements as a whole and on our opinion.

We also take misstatements and/or possible

misstatements into account that, in our

judgement, are material for qualitative reasons.

We agreed with the Supervisory Board that

we would report to them any misstatement

identified during our audit above

€100,000 (2023: €86,000) as well as

misstatements below that amount that, in

our view, warranted reporting for qualitative

reasons.

The scope of our group audit

NX Filtration N.V. is the parent company of

a group of entities. The financial information

of this group is included in the consolidated

financial statements of NX Filtration N.V.

We are responsible for the identification

and assessment of the risks of material

misstatement of the financial statements

of the group, including those with respect to

the consolidation process. Based on our risk

assessment, we tailored the scope of our audit

to ensure that we, in aggregate, performed

sufficient work on the financial statements to

enable us to provide an opinion on the financial

statements as a whole.

In setting the scope of our group audit we

determined what audit work needed to be

performed at group level or component level

and whether involvement of component

auditors was necessary.

Our audit primarily focused on the significant

components NX Filtration N.V. which holds the

cash position obtained from the listing and the

group’s tax positions, NX Filtration B.V. which

accounts for the majority of the operations of

the group and NX Filtration Real Estate B.V.

which holds the property, plant and equipment

related to the new large-scale factory and the

external financing obtained in 2024. All these

group entities have a similar internal control

environment and a centralised management

structure. Therefore, we were able to perform

all audit work for the Group at one location in

the Netherlands.

In total, in performing these procedures, we

achieved the following coverage on the financial

line items:

Revenue 100%

Total assets 99%

Profit before tax 96%

None of the remaining components represented

more than 1% of total group revenue or total

group assets. For those remaining components

we performed, among other things, analytical

procedures to corroborate our assessment

that there were no significant risks of material

misstatements within those components.

Audit approach fraud risks

We identified and assessed the risks of

material misstatements of the financial

statements due to fraud. During our audit we

obtained an understanding of NX Filtration

N.V. and its environment and the components

of the internal control system. This included

the Management Board’s risk assessment

process, the Management Board’s process for

responding to the risks of fraud and monitoring

the internal control system and how the

Supervisory Board exercised oversight, as

well as the outcomes. We refer to the section

‘risks and uncertainties’ of the report of the

Management Board for management’s fraud

risk assessment. We note that management

does consider fraud risk on a regular basis as

part of its formalised risk assessment process.

We evaluated the design and relevant aspects

of the internal control system with respect

to the risks of material misstatements due

to fraud and in particular the fraud risk

assessment, as well as the code of conduct

and whistleblower procedures. We evaluated

the design and the implementation and, where

considered appropriate, tested the operating

effectiveness of internal controls designed to

mitigate fraud risks.

We asked members of the Management

Board and the Supervisory Board whether

they are aware of any actual or suspected

fraud. This did not result in signals of actual or

suspected fraud that may lead to a material

misstatement.

As part of our process of identifying fraud risks,

we evaluated fraud risk factors with respect

to financial reporting fraud, misappropriation

of assets and bribery and corruption. We

evaluated whether these factors indicate that

a risk of material misstatement due to fraud is

present.

Independent auditor’s report

Overall group materiality €1,000,000 (2023: €861,000).

Basis for determining materiality We used our professional judgement to determine overall materiality. As a

basis for our judgement, we used 1% of the benchmark ‘Total assets minus

Cash’.

Rationale for benchmark applied We used ‘Total assets minus Cash’ as the primary benchmark, based on

our analysis of the common information needs of the users of the financial

statements. On this basis, we believe that ‘Total assets minus Cash’ is an

important metric for the financial performance of the Company, as this

shows the total asset base that can be used to generate future revenues.

Component materiality We applied one materiality to the audit of the different components in

scope. We performed the audit procedures on a consolidated level and did

not allocate materiality levels amongst the components.

159

NX Filtration - Annual Report158

We identified the following fraud risks and

performed the following specific procedures:

We incorporated an element of unpredictability

in our audit. During the audit, we remained

alert to indications of fraud. Furthermore, we

considered the outcome of our other audit

procedures and evaluated whether any findings

were indicative of fraud or non-compliance with

laws and regulations.

Audit approach going concern

The Management Board performed their

assessment of the entity’s ability to continue

as a going concern for at least 12 months

from the date of preparation of the financial

statements. Our procedures to evaluate

the Management Board’s going-concern

assessment included, amongst others:

• Considering whether the Management

Board identified events or conditions that

may cast significant doubt on the entity’s

ability to continue as a going concern

(hereafter: going concern risks);

• considering whether the Management

Board’s going concern assessment included

all relevant information of which we

were aware as a result of our audit and

inquiring with the Management Board

regarding the Management Board’s most

important assumptions underlying its going

concern assessment. Amongst others, the

Management Board took into consideration

the developments in the industry and the

budgeted expenses to be made to finance

the growth strategy of the Company;

• evaluating the Management Board’s

current budget including cash flows for

at least 12 months from the date of

preparation of the financial statements

taken into account current developments in

the industry, the cash balance as at balance

sheet date of €53.4 million, the Company’s

on-balance and off-balance sheet

obligations and all relevant information

of which we were aware as a result of our

audit;

• analysing whether the current and the

required financing has been secured to

enable the continuation of the entirety

of the entity’s operations, including

compliance with relevant covenants;

• performing inquiries of the Management

Board as to its knowledge of going concern

risks beyond the period of the Management

Board’s assessment.

Our procedures did not result in outcomes

contrary to the Management Board’s

assumptions and judgements used in the

application of the going-concern assumption.

Identified fraud risks Our audit work and observations

The risk of management override of controls

As with all our audits, we addressed the risk

of management override of controls, including

whether there was evidence of management bias

that may represent a risk of material misstate-

ment due to fraud.

In this context, we paid particular attention to

revenue recognition, significant transactions out-

side the normal course of business and account-

ing estimates.

Where relevant to our audit, we evaluated the

design of the internal control measures that are

intended to mitigate the risk of management

override of controls and assessed the

effectiveness of those measures in the processes

of generating and processing journal entries

and making estimates. We also paid specific

attention to access safeguards in the IT system

and the possibility of functional segregation as

a result and reported our observations to the

Management Board and the persons charged

with governance.

We performed data analysis on high-risk

journal entries, including unexpected account

combinations of increasing revenues or total

results and unexpected account combinations

with respect to cash.

Where we identified instances of unexpected

journal entries or other risks through our

data analysis, we performed additional audit

procedures to address each identified risk. These

procedures include, amongst others, inspection

of source documentation supporting the journal

entries.

We also performed specific audit procedures

related to important estimates of management,

including the capitalisation of development costs,

useful lives of property, plant and equipment, the

recoverability of property, plant and equipment

and the recognition of deferred tax assets. We

specifically paid attention to the inherent risk of

management bias in estimates.

Our procedures did not reveal any material

misstatement in the information provided by

management in the financial statements and the

management report compared with the financial

statements.

Our work did not reveal any specific indications

of fraud or suspicion of fraud in respect of

management override of controls.

Identified fraud risk Our audit work and observations

Risk of fraudulent reporting due to overstating the

revenues

NX Filtration N.V. aims for growth through the

commercialisation of its hollow fibre nano filtra-

tion membrane technology and to realise in-

crease in turnover and profitability in the future

in order to increase shareholder value. In general,

this may cause pressure on management to

show growth in both sales and profitability.

For our audit procedures, performed with respect

to revenue recognition, we refer to our key audit

matter ‘risk of fraudulent reporting due to

overstating the revenues’.

Our procedures did not lead to specific indications

of fraud or suspicions of fraud with respect to the

revenue recognition of NX Filtration N.V.

161NX Filtration - Annual Report160 Independent auditor’s report

Key audit matter Our audit work and observations

The risk of fraudulent reporting due to

overstating revenues

Refer to note 7 to the consolidated financial

statements

NX Filtration N.V. aims for growth through

the commercialisation of its hollow fiber nano

filtration membrane technology and to realise

increase in turnover and profitability in the future

in order to increase shareholder value. In general,

this may cause pressure on management to show

growth in both sales and profitability.

During 2024 NX Filtration N.V.’s revenues in

creased, however this the increase was below

the initial growth strategy communicated to its

shareholders. Given the delay in the realisation

of the business plan, the entity is facing pressure

to meet revenue and profit targets. Therefore,

there is an increased risk of overstating revenue.

In addition, we noted that a material part of the

revenues was realised in December 2024.

Therefore, we considered revenue recognition as

a key audit matter, with specific attention for the

existence and occurrence and the cut-off of the

revenues.

Where relevant to our audit, we evaluated the

design and effectiveness of the internal control

measures related to revenue recognition and

reported our observations to the Management

Board and the persons charged with governance.

We tested, on a sample basis, whether revenues

were recognised in the correct period and for the

correct amount, by reconciling the transactions

to contracts or orders, sales invoice, shipping

document and receipt in the bank account.

Furthermore, we performed audit procedures to

determine whether credit notes were issued after

year-end that indicate incorrectly recognised

revenue in the current financial year.

We tested, on a sample basis, for products

delivered just before year-end, whether

revenues were recognised in the correct period

by reconciling these transactions to shipping

documents and acceptance documents of the

customers.

We performed data analysis on high-risk

journal entries, including unexpected account

combinations increasing revenues. No such

transactions were identified.

Our procedures did not identify any material

misstatement in the information provided by the

Management Board in the financial statements

and the report of the Management Board

compared with the financial statements.

Our procedures did not lead to specific indications

of fraud or suspicions of fraud with respect to the

existence of the revenue accounted for.

Key audit matters

Key audit matters are those matters that,

in our professional judgement, were of most

significance in the audit of the financial

statements. We have communicated the key

audit matters to the Supervisory Board. The

key audit matters are not a comprehensive

reflection of all matters identified by our

audit and that we discussed. In this section,

we described the key audit matters and

included a summary of the audit procedures we

performed on those matters.

Compared to prior year, we no longer

considered going concern a key audit matter,

due to the improved cash position as a result

of newly secured combined equity and debt

package in March 2024. In line with prior

year, we have identified the risk of fraudulent

reporting due to overstating revenues and

capitalisation of property, plant and equipment

as key audit matters.

Key audit matter Our audit work and observations

Capitalisation of property, plant and equipment

Refer to note 10 and note 19 to the consolidated

financial statements

NX Filtration N.V. has completed the construction

of the new large-scale factory in Hengelo during

2024. The total property, plant and equipment

amounts to €75.1 million as per year-end 2024, of

which the major part relates to the new large-

scale factory. Furthermore, due to the new large-

scale factory NX Filtration N.V. closed its previous

production locations, which resulted in disposals

as disclosed in note 10 to the consolidated finan

cial statements.

Due to the significance of capital expenditures

and the transactions being outside the nor-

mal course of business, we consider the capital

expenditures related to the construction of the

new large-scale factory a key audit matter. Given

the construction project is completed, during our

audit we had specific attention for the reclas

sification of the assets under construction, the

depreciation terms and the disposals related to

the previous production locations.

Where relevant to our audit, we evaluated the

design and existence of the internal control

measures related to the construction of the new

large-scale factory in Hengelo.

We tested, on a sample basis, the additions to

the tangible fixed assets by agreeing them to the

purchase orders, contracts and invoices.

We tested the completion of construction in

progress including testing of the reclassification

of the assets under construction and the

appropriateness of depreciation terms. We

performed a recalculation of the depreciation

expenses during the year.

We tested, on a sample basis, the disposals

related to the previous production locations

by agreeing them to the underlying fixed asset

registers.

Based on the procedures set out above, we

did not note any material exceptions. Our

procedures did not lead to specific indications of

fraud or suspicions of fraud with respect to the

capitalisation of property, plant and equipment.

163NX Filtration - Annual Report162 Independent auditor’s report

Report on the other information

included in the annual report

The annual report contains other information.

This includes all information in the annual

report in addition to the financial statements

and our auditor’s report thereon.

Based on the procedures performed as set out

below, we conclude that the other information:

• is consistent with the financial

statements and does not contain material

misstatements; and

• contains all the information regarding the

directors’ report and the other information

that is required by Part 9 of Book 2 and

regarding the remuneration report required

by the sections 2:135b and 2:145 subsection

2 of the Dutch Civil Code.

We have read the other information. Based on

our knowledge and the understanding obtained

in our audit of the financial statements or

otherwise, we have considered whether

the other information contains material

misstatements.

By performing our procedures, we comply

with the requirements of Part 9 of Book 2 and

section 2:135b subsection 7 of the Dutch Civil

Code and the Dutch Standard 720. The scope

of such procedures was substantially less than

the scope of those procedures performed in our

audit of the financial statements.

The Management Board is responsible for the

preparation of the other information, including

the directors’ report and the other information

in accordance with Part 9 of Book 2 of the

Dutch Civil Code. The Management Board

and the Supervisory Board are responsible for

ensuring that the remuneration report is drawn

up and published in accordance with sections

2:135b and 2:145 subsection 2 of the Dutch

Civil Code.

Report on other legal and

regulatory requirements and

ESEF

Our appointment

We were appointed as auditors of NX Filtration

N.V. on 9 April 2024 by the Supervisory Board.

This followed the passing of a resolution by the

shareholders at the annual general meeting

held on 9 April 2024. Our appointment has

been renewed annually by shareholders and

now represents a total period of uninterrupted

engagement of five years.

European Single Electronic Format (ESEF)

NX Filtration N.V. has prepared the annual

report in ESEF. The requirements for this

are set out in the Delegated Regulation (EU)

2019/815 with regard to regulatory technical

standards on the specification of a single

electronic reporting format (hereinafter: the

RTS on ESEF).

In our opinion, the annual report prepared

in XHTML format, including the marked-up

consolidated financial statements, as included

in the reporting package by NX Filtration N.V.,

complies in all material respects with the RTS

on ESEF.

The Management Board is responsible for

preparing the annual report, including the

financial statements in accordance with the

RTS on ESEF, whereby the Management Board

combines the various components into a single

reporting package.

Our responsibility is to obtain reasonable

assurance for our opinion whether the annual

report in this reporting package complies with

the RTS on ESEF.

We performed our examination in accordance

with Dutch law, including Dutch Standard

3950N ‘Assuranceopdrachten inzake het

voldoen aan de criteria voor het opstellen

van een digitaal verantwoordingsdocument’

(assurance engagements relating to compliance

with criteria for digital reporting).

Our examination included amongst others:

• Obtaining an understanding of the entity’s

financial reporting process, including the

preparation of the reporting package.

• Identifying and assessing the risks that

the annual report does not comply in all

material respects with the RTS on ESEF

and designing and performing further

assurance procedures responsive to those

risks to provide a basis for our opinion,

including:

- obtaining the reporting package and

performing validations to determine

whether the reporting package

containing the Inline XBRL instance

document and the XBRL extension

taxonomy files have been prepared

in accordance with the technical

specifications as included in the RTS on

ESEF;

- examining the information related to the

consolidated financial statements in the

reporting package to determine whether

all required mark-ups have been applied

and whether these are in accordance

with the RTS on ESEF.

No prohibited non-audit services

To the best of our knowledge and belief, we

have not provided prohibited non-audit services

as referred to in article 5(1) of the European

Regulation on specific requirements regarding

statutory audit of public-interest entities.

Services rendered

The services, in addition to the audit, that we

have provided to the Company or its controlled

entities, for the period to which our statutory

audit relates, are disclosed in note 11 to

company the financial statements.

Responsibilities for the financial

statements and the audit

Responsibilities of the Management Board

and the Supervisory Board for the financial

statements

The Management Board is responsible for:

• the preparation and fair presentation of

the financial statements in accordance with

IFRS Accounting Standards as adopted by

the EU and Part 9 of Book 2 of the Dutch

Civil Code; and for

• such internal control as the Management

Board determines is necessary to enable

the preparation of the financial statements

that are free from material misstatement,

whether due to fraud or error.

In preparing the financial statements, the

Management Board is responsible for assessing

the Company’s ability to continue as a going

concern. Based on the financial reporting

frameworks mentioned, the Management

Board should prepare the financial statements

using the going-concern basis of accounting

unless the Management Board either intends to

liquidate the Company or to cease operations

or has no realistic alternative but to do so.

The Management Board should disclose

in the financial statements any event and

circumstances that may cast significant doubt

on the Company’s ability to continue as a going

concern.

The Supervisory Board is responsible for

overseeing the Company’s financial reporting

process.

165NX Filtration - Annual Report164 Independent auditor’s report

Our responsibilities for the audit of the

financial statements

Our responsibility is to plan and perform an

audit engagement in a manner that allows

us to obtain sufficient and appropriate audit

evidence to provide a basis for our opinion. Our

objectives are to obtain reasonable assurance

about whether the financial statements as a

whole are free from material misstatement,

whether due to fraud or error and to issue

an auditor’s report that includes our opinion.

Reasonable assurance is a high but not absolute

level of assurance, and is not a guarantee that

an audit conducted in accordance with the

Dutch Standards on Auditing will always detect

a material misstatement when it exists.

Misstatements may arise due to fraud or error.

They 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 the financial

statements.

Materiality affects the nature, timing

and extent of our audit procedures and

the evaluation of the effect of identified

misstatements on our opinion.

A more detailed description of our

responsibilities is set out in the appendix to our

report.

Zwolle, 10 February 2025

PricewaterhouseCoopers Accountants N.V.

F.S. van der Ploeg RA

Appendix to our auditor’s report

on the financial statements 2024

of NX Filtration N.V.

In addition to what is included in our auditor’s

report, we have further set out in this appendix

our responsibilities for the audit of the financial

statements and explained what an audit

involves.

The auditor’s responsibilities for the audit

of the financial statements

We have exercised professional judgement

and have maintained professional scepticism

throughout the audit in accordance with Dutch

Standards on Auditing, ethical requirements

and independence requirements. Our audit

consisted, among other things of the following:

• Identifying and assessing the risks of

material misstatement of the 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

intentional 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 Company’s internal

control.

• Evaluating the appropriateness of

accounting policies used and the

reasonableness of accounting estimates

and related disclosures made by the

Management Board.

• Concluding on the appropriateness of

the Management Board’s use of the

going-concern basis of accounting, and

based on the audit evidence obtained,

concluding whether a material uncertainty

exists related to events and/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 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 and are made in the context of our

opinion on the financial statements as a

whole. However, future events or conditions

may cause the Company to cease to

continue as a going concern.

• Evaluating the overall presentation,

structure and content of the financial

statements, including the disclosures,

and evaluating whether the financial

statements represent the underlying

transactions and events in a manner that

achieves fair presentation.

We are responsible for planning and performing

the group audit to obtain sufficient appropriate

audit evidence regarding the financial

information of the entities or business units

within the group as a basis for forming an

opinion on the financial statements. We are

also responsible for the direction, supervision

and review of the audit work performed for

purposes of the group audit. We remain solely

responsible for our audit opinion.

167NX Filtration - Annual Report166 Independent auditor’s report

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

deficiencies in internal control that we identify

during our audit. In this respect, we also issue

an additional report to the audit committee

in accordance with article 11 of the EU

Regulation on specific requirements regarding

statutory audit of public-interest entities. The

information included in this additional report

is consistent with our audit opinion in this

auditor’s report.

We provide the Supervisory Board with a

statement that we have complied with relevant

ethical requirements regarding independence,

and to communicate with them all relationships

and other matters that may reasonably be

thought to bear on our independence, and

where applicable, related actions taken to

eliminate threats or safeguards applied.

From the matters communicated with the

Supervisory Board, we determine those

matters that were of most significance in the

audit of the financial statements of the current

period and are therefore the key audit matters.

We describe these matters in our auditor’s

report unless law or regulation precludes

public disclosure about the matter or when, in

extremely rare circumstances, we determine

that a matter should not be communicated in

our report because the adverse consequences

of doing so would reasonably be expected to

outweigh the public interest benefits of such

communication.

169NX Filtration - Annual Report168 Independent auditor’s report