SFC Energy : Remuneration report 2023

Independent auditor's report

SFC Energy AG

Brunnthal

Remuneration report pursuant to Section 162 AktG for the financial year from January 1 to December 31, 2023

Revised convenience translation of the German original

Table of Contents	Page
Independent auditor's report on the audit of the remuneration report in accordance with
section 162 (3) AktG	1
Remuneration report in accordance with section 162 AktG for the financial year from
January 1 to December 31, 2023	1

Convenience translation of the German original

1

Independent auditor's report on the audit of the remuneration report in accordance with section 162 (3) AktG

To SFC Energy AG, Brunnthal

Audit opinion

We have formally audited the remuneration report of SFC Energy AG, Brunnthal, for the financial year from January 1 to December 31, 2023, to determine whether the disclosures pursuant to section 162 (1) and (2) AktG have been made in the remuneration report. In accordance with section 162 (3) AktG, we have not audited the content of the remuneration report.

In our opinion, the accompanying remuneration report complies, in all material respects, with the disclosures required under section 162 (1) and (2) AktG. Our audit opinion does not cover the content of the remuneration report.

Basis of our audit opinion

We have conducted our audit of the remuneration report in accordance with section 162 (3) AktG and the IDW Auditing Standard: The Audit of the Remuneration Report in Accordance with Section 162 (3) of the German Stock Corporation Act (AktG) (IDW PS 870 (09.2023)) Our responsibility under that provision and standard is further described in the "Auditor's responsibility" section of our report. As an auditing practice, we have applied the requirements of the IDW Quality Assurance Standard: Requirements for Quality Management in Auditing Practice (IDW QMS 1 (09.2022)). We have complied with the professional duties pursuant to the German Public Accountant Act (WPO) and the professional statutes for auditors / chartered accountants, including the requirements for independence.

Responsibility of the legal representatives and the Supervisory Board

The legal representatives and the Supervisory Board are responsible for the preparation of the remuneration report, including the related disclosures, that is to comply with the requirements of section 162 AktG. They are also responsible for such internal controls as they consider necessary to enable the preparation of a remuneration report, including the related disclosures, that is free from material misstatements due to fraudulent activities (i.e. accounting fraud or misappropriation of assets) or mistakes.

Auditor's responsibility

Our objective is to obtain reasonable assurance about whether the disclosures pursuant to section 162 (1) and (2) AktG have been made in all material respects in the remuneration report and to express an opinion thereon in an audit report.

We have planned and performed our audit such that we can ascertain the formal completeness of the remuneration report by comparing the disclosures made in the remuneration report with the disclosures required by section 162 (1) and (2) AktG. In accordance with section 162 (3) AktG, we have not audited the accuracy or the completeness of the content of the individual disclosures, or the fair presentation of the remuneration report.

Munich, April 2, 2024
PricewaterhouseCoopers GmbH
Wirtschaftsprüfungsgesellschaft
Holger Lutz	Alexander Fiedler
Auditor	Auditor

Revised convenience translation of the German original

REMUNERATION REPORT

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REMUNERATION REPORT OF THE MANAGEMENT BOARD AND THE SUPERVISORY BOARD OF SFC ENERGY AG

In accordance with section 162 of the German Stock Corporation Act (AktG), this Remuneration Report prepared by the Supervisory and Management Boards presents and explains the remuneration of the current and former members of the Management Board and the members of the Supervisory Board of SFC Energy AG in financial year 2023.

The Remuneration Report is to be formally audited by the auditor of SFC Energy AG, PricewaterhouseCoopers GmbH Wirtschaftsprüfungsgesellschaft, in accordance with section 162 (3) AktG. The report issued by the auditor on the basis of this audit will be attached to the Remuneration Report as part of the public disclosure on the Company's website in accordance with section 162 (4) AktG.

Management Board Remuneration System pursuant to section 87a (1) AktG

For the first time in the 2021 financial year, the Supervisory Board adopted a remuneration system for the Management Board in accordance with the requirements of section 87a (1) AktG and submitted this to the Annual General Meeting on May 19, 2021, for approval (hereinafter referred to as the "Management Board Remuneration System 2021"). The Management Board Remuneration System 2021 was approved by the Annual General Meeting as presented with an approval rate of 80%. The Management Board Remuneration System 2021 for the Management Board and Supervisory Board approved by the Annual General Meeting in 2021 can be found at: www.sfc.com/en/investors-sfc-energy-ag/corporate-governance/.

In the 2023 financial year, the Supervisory Board decided to adjust the existing remuneration system due to changes in the Company's economic parameters and accordingly adopted an amended remuneration system for the Management Board in accordance with the provisions of section 87a (1) AktG. This was submitted to the Annual General Meeting on June 5, 2023, for approval (hereinafter referred to as the "Management Board Remuneration System 2023"). The Management Board Remuneration System 2023 was approved by the Annual General Meeting as presented with an approval rate of 85.66%.

Most notably, the amended Management Board Remuneration System 2023 contains the following new provisions:

• For remuneration periods beginning with the new/re-appointment of a member to

SFC ENERGY 2023 ANNUAL REPORT

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the Management Board from January 1, 2024, onwards, a new maximum remuneration pursuant to section 87a (1) sentence 2 no. 1 AktG of EUR 4 million for the CEO and EUR 2 million for each of the ordinary Management Board members for each financial year is set. In the case of special benefits that do not serve as direct consideration for the services of the Management Board member but may be granted by the Supervisory Board in individual cases in special situations (e.g. relocation expenses, compensation payments for bonus losses at the previous employer), the Supervisory Board may increase the applicable maximum remuneration for the relevant financial year by a maximum of 20%. In addition, in the event of a change of control, the Supervisory Board may increase the applicable maximum remuneration for the year of the change of control by a maximum of 20%.

• For remuneration periods beginning with the new/re-appointment of a member to the Management Board from January 1, 2024 onwards, new ranges (in each case approximate values) are set for the remuneration components - in relation to the target total remuneration which is based on 100% target achievement: Basic remuneration: approx. 18-25%, fringe benefits: approx. 0.5-3%, pension contributions/pension substitute: approx. 0.5-5%,short-term variable remuneration (bonus): approx. 10-20%,long-termshare-based variable remuneration (LTI): approx. 60-70%.
• For remuneration periods beginning with the new/re-appointment of a member to the Management Board from January 1, 2024, onwards, only a pension substitute instead of contributions to a company pension scheme will be granted. Only in one individual case, for reasons of protection of existing rights, a defined contribution benefit granted via a reinsured provident fund will be continued in the event of re- appointment from January 1, 2024, onwards.
• For remuneration periods beginning with the new/re-appointment of a member to the Management Board from January 1, 2024, onwards, the long-term variable remuneration (LTI) is based on a rolling performance share plan (PSP) and more closely defined performance criteria, with settlement occurring in cash (or shares at the free option of the Company) (LTI 2024). The malus / clawback rules already provided for under the Management Board Remuneration System 2021 will also

apply to the LTI 2024.

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• For remuneration periods prior to those beginning with the appointment or re- appointment of a member to the Management Board from January 1, 2024, onwards, the long-term variable remuneration is granted on the basis of stock options (in accordance with the Management Board Remuneration System 2021) with a four-year performance period (LTI Model 2021) Changed caps apply on the basis of the Remuneration System 2023: A cap of EUR 2.75 million applies for the CEO, EUR 1.5 million for the CFO and EUR 1 million for the COO. The total amount of the caps (originally a uniform EUR 1.75 million per Management Board member) is therefore not being changed (given the current composition of the Management Board). The relevant cap does not apply in the event of a change of control and exercise of the Special Termination Right. Long-term variable compensation commitments still in effect from the period prior to the submission of this amended Management Board Remuneration System 2023 to the Annual General Meeting may be adjusted to the aforementioned amended cap rules in accordance with the Management Board Remuneration System 2023, provided the relevant waiting period under the program has not yet expired in each case.
• In the event of a new appointment or reappointment to the Management Board that takes place on or after January 1, 2024, the members of the Management Board are obligated to make a personal investment in SFC shares (Share Investment Obligation). The amount to be invested (Investment Amount) corresponds to an amount equal to 150% of the annual Fixed Remuneration (gross) (for the CEO) or 100% of the annual Fixed Remuneration (gross) (for the CFO and COO). The shareholding is to be built up over a period of four years from the initial appointment or, in the case of a reappointment (and the first time the Share Investment Obligation takes effect), over a period of two years (Build-Up Phase) until the Investment Amount - taking into account existing shareholdings - is reached. The shares acquired are to be held for the duration of the Management Board member's term of office and for a further year after termination of the Management Board member's term of office (Share Retention Obligation). The obligations of the
  Management Board members to invest in and to retain shares of the Company will further align the interests of the Management Board with those of the shareholders and also incentivize the long-term successful development of the Company. The

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Share Investment Obligation / Share Retention Obligation ends in connection with the completion of a change of control or - at the discretion of the Supervisory Board

• as early as upon submission of the takeover bid. The Supervisory Board may also decide to deviate from the Share Investment Obligation / Share Retention Obligation in individual cases at its reasonable discretion, taking into account the individual circumstances.

The details of the Management Board Remuneration System 2023 for the Management Board and Supervisory Board approved by the Annual General Meeting in 2023 can be found at: www.sfc.com/en/investors-sfc-energy-ag/corporate-governance/.

Remuneration received in the 2023 reporting year partly on the basis of the previous remuneration

system

The remuneration granted in the 2023 reporting year was partly based on the Management Board service agreements protected under section 26j (1) sentence 3 EGAktG from the times before the Management Board Remuneration Systems for 2021 and 2023 were each presented (hereinafter referred to as the "Existing Remuneration System"), which, however, already correspond in part to the Management Board Remuneration System 2021 and Management Board Remuneration System 2023. This Existing Remuneration System applied to the remuneration granted to the Management Board members Dr. Podesser and Mr. Saxena in the reporting year.

The remuneration granted to Mr. Pol in the reporting year was based on the Management Board Remuneration System 2021 (and partly on payments from an earlier long-term incentive program, see below on the SARs programs from the time before the introduction of the Management Board Remuneration System 2021).

In the reporting year, the early reappointment of Dr. Podesser with effect from January 1, 2024, was resolved upon and a corresponding new service agreement was concluded with Dr. Podesser with effect from January 1, 2024, on the basis of the Management Board Remuneration System 2023.

Target total remuneration for the 2023 financial year

In accordance with the relevant Management Board service contracts, the Supervisory Board determined the target total remuneration for each Management Board member for the 2023 financial year. To promote the transparency of this report, the following table shows the

SFC ENERGY 2023 ANNUAL REPORT

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individual target total remuneration per Management Board member and the relative shares of the individual remuneration elements in the target total remuneration forthe 2023 financial year. These figures are therefore not the remuneration amounts granted and owed inthe 2023 financial year, however (see below under "Management Board remuneration granted and owed"), but rather a presentation of the target total remuneration of a Management Board member for the 2023 reporting year, which is made up of the sum of all fixed and variable remuneration components for the reporting year.

TARGET TOTAL REMUNERATION FOR THE MANAGEMENT BOARD 2 3												in EUR
Management Board members in office as at 12/31/2023	PETER PODESSER		DANIEL SAXENA		HANS POL1
					2023		IN % TTR	2023		IN % TTR	2023				IN % TTR
Fixed rem.		Basic remuneration	370,000	44.3%	240,000	34.6%	249,996	45.1%
	+	Fringe benefits	14,190	1.7%	24,000	3.5%	29,064	5.2%
		Contribution to provident fund	10,000	1.2%	0	0.0%	0	0.0%
		Total	394,190	47.3%	264,000	38.1%	279,060	50.4%
Variable rem.	+	Short-term variable remuneration
(excl. special bonus)		Target bonus for the financial year	220,000	28.4%	110,000	15.0%	150,000	27.1%
	+	Long-term variable remuneration
		SARs 3		0.0%	358,831	49.0%	0	0.0%
		Stock options ("SOP") 4	160,506	20.7%	0	0.0%	124,800	22.5%
		Total	380,506	49.1%	468,831	64.0%	274,800	49.6%
Total	= Target total remuneration ("TTIP")	774,696	100.0%	732,831	100.0%	553,860	100.0%

remuneration

1. Remuneration details for Mr. Pol including fixed remuneration of EUR 99,996 and fringe benefits of EUR 11,724 from SFC Energy B.V.
2. The value corresponds to the variable bonus for the 2023 reporting year assuming 100% target achievement.
3. For the SARs allocated under the Daniel Saxena Program 5 (2020-2024), which also serve as long-term variable remuneration for the 2023 reporting year, the value of the SARs from this program is recognized for the purposes of the presentation of the target remuneration in this table in accordance with the fair value as of the reporting date December 31, 2023, for the corresponding tranche for the year 2023.
4. The stock options granted under the Dr. Podesser Stock Option Program 2020-2024 in 2020 and the Hans Pol Stock Option Program 2021-2025 in 2021 also serve pro rata as long-term variable remuneration for the 2023 reporting year. For the purpose of presenting the target remuneration in this table, the value of the stock options granted under these programs is recognized in accordance with their fair values as of the reporting date December 31, 2023, for the corresponding tranches for the year 2023. As a result, the relative shares of the remuneration components shown here differ somewhat from the relative shares provided for in the Management Board Remuneration System 2021, which relate to the time at which the remuneration commitment was made and, by their nature, could not anticipate their performance in detail.

Determination of Management Board remuneration by the Supervisory Board

The Supervisory Board determines the remuneration of the Management Board in accordance with AktG requirements. It pays particular attention to its appropriateness. To ensure the appropriateness of the remuneration, remuneration levels are subjected to a market comparison with comparable entities (horizontal comparison). The peer group last used by the Supervisory Board in 2023 on the occasion of the conclusion of the new contract with Dr.

SFC ENERGY 2023 ANNUAL REPORT

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Podesser regarding remuneration with effect from January 1, 2024, consisted of relevant companies with regard to size and/or sector or industry from the SDAX / TecDAX and companies from the hydrogen sector. In order to ascertain whether remuneration is in line with usual levels within the Company itself, when setting the Management Board remuneration, the Supervisory Board also takes the relationship between Management Board remuneration and the remuneration of Managing Directors and/or the top management level of the individual companies in the Group and the workforce as a whole into account, and how remuneration has developed over time.

Components of Management Board remuneration in the 2023 reporting year

In the 2023 reporting year, remuneration for Management Board members consisted of the components described below:

Basic remuneration

The members of the Management Board received a fixed annual salary, which was paid in twelve equal monthly instalments. The level of the basic remuneration is determined based on the responsibility and experience of the relevant member of the Management Board.

The members of the Management Board also received certain market-standard fringe benefits. For example, the Company provides a company car to each member of the Management Board for personal use or pays a vehicle allowance if the Management Board member does not use a company car. In addition, fringe benefits include premium allowances for personal pension, accident, and life insurance policies for the members of the Management Board as well as subsidies for health insurance.

Retirement benefits

In the 2023 reporting year, the Management Board members were able to convert the current basic remuneration of up to EUR 25,000 into a company pension by paying contributions to external pension providers. This option was not exercised.

Dr. Podesser has a contribution-based payment commitment via a provident fund. In the event of a pension claim, the provident fund will pay the agreed pension benefits to Dr. Podesser. The Company allocates the necessary funds to the provident fund. The amount of the pension benefits depends on the actuarial implementation of the pension amount resulting from the individual agreement reached with Dr. Podesser. The pension benefits are reinsured by a life insurance policy. Dr. Podesser will receive a lifelong monthly retirement

SFC ENERGY 2023 ANNUAL REPORT

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