NOTICE OF ANNUAL GENERAL MEETING OF SHAREHOLDERS Notice is hereby given of the Annual General Meeting of Soiltech AS to be held on April 4, 2024 at 10 am. The meeting will be held as a virtual meeting via Teams only, with no physical attendance for shareholders. Shareholders who want to participate online must notify the Company’s CFO Tove Vestlie at Tove.vestlie@soiltech.no no later than April 3, 2024 at 4 p.m.
The general meeting will be opened by the chairman of the board.
Agenda:
1. Opening of the meeting and shareholder attendance overview
2. Election of the chair of the meeting
3. Election of one person to co-sign the minutes together with the chair
4. Approval of the notice of meeting and the agenda
5. Approval of the annual accounts for 2023 and the report of the board of directors
6. Approval of the remuneration of the directors
7. Approval of the remuneration of the auditors
8. Power of attorney to the board regarding acquisition of own shares
The annual accounts for 2023, the report of the board of directors, the board’s proposal for resolutions to item 5-8 and Proxy (with voting instructions) is attached to this notice.
The documentation is also available on www.soiltech.no.
Shareholders who wish to attend the meeting are asked to notify the Company no later than April 3, 2024 at 4 p.m. by returning the enclosed Proxy to Soiltech AS by e-mail to tove.vestlie@soiltech.no
Sandnes, March 15, 2024 for the board of directors of Soiltech AS Gunnar Winther Eliassen Chairman (Sign.)
The board proposes that the following resolutions are passed for item 5-8:
5. Approval of the annual accounts for 2023 and the report of the board of directors
«The Board’s proposal for the annual accounts for 2023, the Board’s proposal for appropriation of the net income and the report of the board of directors are approved. No dividend is paid for 2023».
6. Approval of the remuneration of the directors
«The remuneration of directors is set to NOK 100 000, which is paid to Eirik Flatebø, Olaf Skrivervik and Robert Hvide Macleod and NOK 75 000 to Gunnar Winther Eliassen. There is no remuneration of the other directors».
7. Approval of the remuneration of the auditors
«Remuneration of the auditors, consisting of remuneration of the audit services of NOK 474 000 and remuneration of other services of NOK 273 000 is approved».
8. Power of attorney to the board regarding acquisition of own shares
“The General Meeting of Soiltech AS hereby authorizes the Board of Directors to permit the company to acquire shares in Soiltech AS with a nominal value of up to NOK 74,000 divided between a maximum of 740,000 shares, provided that the company’s holding of treasury shares does not exceed 10% of shares outstanding at any given time. The amount that may be paid per share shall be no less than NOK 15 and no more than NOK 150. The Board of Directors shall have a free hand with respect to methods of acquisition and disposal of treasury shares. This authorization shall apply from 04 April 2024 until the date of the Annual General Meeting in 2025.”
Proxy (with voting instructions) This proxy form is to be used for a proxy with voting instructions. If you are unable to attend the General Meeting in person, you may use this proxy form to give voting instructions. You may grant a proxy with voting instructions to a person authorized by you, or you may send the proxy without naming the proxy holder, in which case the proxy will be deemed to have been given to the Chair of the Board of Directors or a person authorized by him. The proxy form must be received by Soiltech AS, no later than 3 April, 2024 at 4 p.m. It should be sent to: tove.vestlie@soiltech.no
The undersigned _________________________________________ [Name in Capital letters],
who has the power of attorney to vote for the following shares:
Name of shareholder(s) and/or custody/nominee account: _______________________________________
Number of shares held: _____________________
hereby grants (tick one of the two):
the Chair of the Board of Directors (or a person authorized by him), or
(Name of proxy holder in capital letters)
a proxy to attend and vote for my/our shares at the Annual General Meeting of Soiltech AS on 4 April, 2024 The votes shall be exercised in accordance with the instructions below. Please note that if any items below are not voted on (not ticked off); this will be ‘deemed to be an instruction to vote “for” the proposals in the notice. However, if any motions are made from the floor in addition to or in replacement of the proposals in the notice, the proxy holder may vote or abstain from voting at his discretion. In such case, the proxy holder will vote on the basis of his reasonable understanding of the motion. The same applies if there is any doubt as to how the instructions should be understood. Where no such reasonable interpretation is possible, the proxy holder may abstain from voting.
8 Power of attorney to the board regarding acquisition of own shares
Place: Date: Signature:
ThisisSoiltech Soiltechisaninnovativetechnologycompanyspecializingin thetreatment,recyclingandresponsiblehandlingof contaminatedwaterandsolidindustrialwastestreamsat site.OurtechnologiesenablecostsavingsandlowerCO2 emissionsthroughwastereduction,wasterecoveryand reuse.Soiltechoperatesworld-wide,withitsheadofficeat ForusinSandnes,Norway.
Soiltechisonafantasticjourney,andIamproudto bepartofit.Wedevelopandoperateinnovative technologiesneededforsustainabletreatment, handling,treatment,andrecyclingofwaste.Our solutionscontributetoreducedcarbonemissionsinaworldwithgrowingenergydemands.
Weseeanincreaseddemandacrossourfull technologyportfolio,duetothededicatedSoiltech teamandfocusondeliveringinnovativesolutions andstrongoperations.Iamverypleasedthatwe onceagaincandelivergoodsafetyresultswithno losttimeincidentsin2023.Wearegettinggreat feedbackfromourclientswhenitcomestoour operationalperformance,thankstoourcommitted personnelonlocationandonshoresupportteam. ThispositivefeedbackisimportantforSoiltechas operationalexcellenceisakeyfactorforour continuedsuccess.
Wereachedamilestonein2023withrevenues exceeding200millionkronerforthefirsttime.It tookustenyearstogettothefirst100millionand onlytwoyearstodoublethat.Duringlastyear,the numberofemployeesincreasedfrom72to125, addin
Fortunately,ourrecruitmentcampaignsattracthuge interestfromqualifiedpersonnel.Wecontinueto focusoncontinuousimprovement,withtraining,
competenceenhancement,andtechnology innovationaskeyareas.
Ourinternationaloperationsaregrowing,whilethe NorthSeamarketcontinuetobeverystrongfor Soiltech.In2023,internationaloperations accountedfor27%ofourrevenuescomparedto 16%in2022.Goingforward,Iexpectthatour internationalactivitieswillcontinuetoincrease,as weseetighteningregulationsfordischargingwater toseaandfurtherdemandsfordecarbonization.
andeffectivetechnologies,andwewillleverageoff ourstrongpositionintheNorthSeatogainmarket shareglobally.Thereareabout500mobilerigs worldwide,constitutingthemarketforSoiltech.We arecurrentlyon25oftheserigs,sothereisabig untappedpotential.
Financially,wearerunningasolidbusiness.With growinginvestmentsinequipmentandpersonnel, capitaldisciplineandagoodfinancestructureis important.Iamgladtosaythatwefeelstrong supportfromourbanksandowners,whichhave provideduswiththerequiredcapitaltofinanceour growth.AtsomepointalistingofSoiltechonOslo StockExchangewillbeanaturalstepinorderto secureadditionalequityfinancingandprovidea marketplacefortradingoftheSoiltechshare.
JanErikTveteraas,CEO
BoardofDirectorsreport2023 Natureofbusinessandlocation
Establishedin2011,Soiltechisaninnovativetechnologycompanyspecializinginthetreatment,recyclingand responsiblehandlingofcontaminatedwaterandsolidwasteatsite.Ourtechnologiesenablecostsavingsand lowerCO2emissionsthroughwastereduction,wasterecoveryandreuse.
Soiltech(theGroup)consistsoftheParentCompanySoiltechAS(theCompany)andthesubsidiariesSoiltech OffshoreServicesASandSorbwaterTechnologyAS.
In2023,theGrouphadoperationsinNorway,theUnitedKingdom,theNetherlands,Mexico,Colombia, Mauritania,Lebanon,Cyprus,DenmarkandAbuDhabi.TheGroups Norway.
Highlightsin2023 January:SoiltechASandWellExpertiseASenteredintoaframeagreementfortheprovisionofdrilling wastemanagementondrillingprojectsmanagedbyWellExpertiseAS.Thecontracthasadurationof5 years.
February:Soiltechwasawardedalong-termframecontractwithEquinorfortheprovisionofoffshore wasteservices.Thecontractwaseffectivefromend2022.Includingextensionoptionsthecontracthasa durationuntil2034
February:SoiltechwasawardeditsfirstcontractinMexicoforthetreatmentofcontaminatedwater onboardadrillingvesselforaleadingoperator
May:SoiltechwasawardeditsfirstcontracttreatingfluidfrompipecleaningonanoilrefineryinEurope. Itisanewandinterestingapplicationofourtechnologieswhichcouldhavegreatpotential.
June:SoiltechwasawardeditsfirstcontractinLebanonwithTransoceanforprovidingsloptreatmentand cuttingshandlingservicesonboardthesemi-submersiblerigTransoceanBarents.
Inaddition,Soiltechsecuredseveralcontractextensions
Significantinvestmentsweremadethroughouttheyeartobuildcapacityformeetingtheanticipated increaseindrillingactivityanddemandforthetechnologies
Eventsafteryear-end ContractwithEquinorforcuttingshandlingservicesonOsebergSør,withestimatedstartupinQ12024.
ContractwithWellExpertisefortreatingcontaminatedwater(STT)onamobilerigintheNorthSea,with estimatedstartupinQ22024.
TheGroup Asfrom2023theGrouphaschangeditsfinancialreportingfromNGAAPtoIFRS.Thechangehasbeen implementedretrospectivelyusing01.01.2022asthedateoftransition.Theeffectsofthetransitionarelimited andarenotconsideredtohaveamaterialimpactonthefigurespresentedintheannualreport,seenote26in theconsolidatedfinancialstatement.
Theactivityhasbeenhighthroughouttheyearandthesuccesscanbeattributedtoanincreasingdemandforthe Group theircarbonemissions.Therevenuegrowthyearonyearwas28.5%.Thegrossmarginwas41%andEBITDAfrom operationswasMNOK51in2023,comparedtoMNOK45in2022.
ProfitbeforetaxwasMNOK32.Asof31.12.23,thebasisforacontingentliabilityassumedinconnectionwiththe Sorbwatertransactionwasnotfulfilled.Therefore,againofMNOK15wasrecognizedandgoodwillofMNOK5.1 wasimpaired,resultinginanetgainofMNOK9.9.ThenetprofitofMNOK27istransferredtootherequity.Total assetsatyear-endamountedtoMNOK351(MNOK270).
ThecashflowfromoperatingactivitiesreachedMNOK37,whilecashflowfrominvestingactivitieswasMNOK-64 duetoourcapacityexpansioninitiatives.FollowinganetcontributionofMNOK15fromfinancingactivities,the netcashflowforthefullyearof2023stoodatMNOK-12.ThecashpositiononDecember31,2023wasMNOK27 andtheequityratioremainedsolidat49%(53%).Inthemiddleof2023Soiltechenteredalong-termloanfacility withSandnesSparebank.The7-yearloanfacilityisMNOK73andcomesinadditiontotheexistingfacilityof MNOK75.
ParentCompany NetprofitofMNOK26istransferredtootherequity.Totalassetsatyear-endamountedtoMNOK358(MNOK 277).Theequityratioremainedsolidat48%(52%).
Operations TheGroupsawanincreaseinoperationsin2023,withhigheractivityacrossthefulltechnologyportfolio.During theyear,wehadupto25sloptreatmentoperationsandtwocuttinghandlingprojectsongoing.Inaddition,the Groupperformedcleaningandswarfremovaljobs.Internationaloperationsareincreasing.During2023,the Grouphadoperationsin10countriesandinternationalrevenuesaccountedfor27%oftotalrevenues. Therewerenooperationalorcommercialdowntimein2023.
Riskmanagementandinternalcontrol TheGroupcategorizesitsprimaryrisksintocommercial,operational,complianceandlegal,financialandIT-and cyberrelatedrisks.TheGrouphasevaluatedtheoverallclimaterisktobelow.Climaterelatedmattersarenot expectedtocriticallyeffectassets,provisions,orfuturecashflows.Furtherdetailscanalsobefoundinnote18 and19intheconsolidatedfinancialstatements.
Commercialrisksincludesuchrisksasmacroindicators,suppliers,partners,competitors,andtechnology. OperationalrisksincludetechnicalandoperationalstatusandperformanceofitsequipmentaswellasHSEQ. Complianceandlegalrisksincludethemanagementsystem,certificationsaswellascontractual,legal,and regulatoryunderstandingandcompliance.Financialriskincludesqualityincontinuousreportingandinternal controls,properfinancingandfinancingsources,forecastingandliquiditymanagementaswellasfinancialrisk managementrelatedtointerestrates,foreignexchange,creditrisksandtaxrisks.ITandcyberrisksincludethe Group
TheGroup reviews,reporting,forecastingandothermitigatingmeasures.WhiletheCompanyoperatesinacyclicalindustry, itsclientbasehoweverconsistsofsolidandcredit-worthyenergyanddrillingcompanies.Duringtheyear,the Grouphasfocusedoncontinuousimprovementintrainingandcompetencerequirements,technicaland operationalsafetyaswellasplanningandforecasting.
TheGrouphasasolidbalancesheetandhadnotradelossesin2023.Anewbankfacilitywassecuredduringthe yearandasolidcashpositionwasmaintained.
Climaterisk Climateriskisdefinedasthemeasureofvulnerabilitytoclimate-relatedimpactsthatmayhavefinancial consequences,orthatmayaffectvariousaspectsoffinancialperformance.Thoseconsequencescouldbe reducingtheuncertaintyofthatoutcomeisbusinesscritical.
Theoverallfocusregardingtheexternalenvironmentistoprovideknowledgetothemarketaboutour technologies,whichhelpthecustomerreducingtheiremissions.Overall,thiswillresultinareductionin emissionsthatbenefitsthesociety.AmainSoiltechfocusareaistoreducethenumberoftruckstolowerthe mobilizationsandloadthetruckasfullaspossible.
TheGroup iesareenergyefficienttechnologiesthatcontributetowastereduction,wasterecovery andreuse.Assuchwearecontributingtoresponsibleresourcemanagementandreducedemissionsthroughthe energytransition.Asemissionsanddischargeregulationsaretightenedglobally,theGrouptechnologiesmay playanincreasinglyimportantroleintheoil&gasindustry.
LiabilityInsurance(DirectorsandOfficers) TheCompanyhasinplaceaDirectors&OfficersliabilityinsurancethatcoversDirectorsoftheBoardand executivemanagement.ThelimitofthecoverageisMNOK50.
Research&Development TheGrouphasastrongfocusoninnovationsbutdoesnotundertakespecificresearch&developmentactivities assuch.However,theGroupiscontinuouslyfocusingonimprovingexistingtechnologiesanddevelopingnew solutions,basedonexperiencefromoperationsandmarketneeds.
HumanResources,DiversityandGovernance TheGrouphad125employeesatend2023comparedto94end2022.Theboardperceivesthattheworking environmentandthegeneralwell-beingintheworkplaceasgood.Thiswasconfirmedinthe2023organizational survey.
TheGroupdiversityisexemplifiedbythefactthatitsemployeescomefrommultiplecountries.The fieldpersonnelconsistofmen.TheGrouphasincorporatedguidelinesaimingtoensurethatthereisno discriminationbasedongenderornationality.TheGroupworkssystematicallywithrecruitment,salaryand workingconditions,andpromotionanddevelopmentopportunities.Themanagementteamconsistof3women and4men.Theboardhasfivemembers,allofwhomaremen.OneboardmemberisemployedasCOOinthe Company.TheCompanyisinprocessofmakingnecessarychangestotheboardtomeetthegenderrequirements byendof2024.
HSEQ AfitforpurposemanagementsystemandrobustHSEQperformanceisfundamentaltotheGroup.TheCompany isrecertifiedaccordingtoISO9001(Quality),ISO14001(Environment)andISO45001(WorkingEnvironment). TheGrouprequestsandreceivescontinuousfeedbackfromitsclients,inanefforttomeasurequalityand continuousimprovement.Ahighdegreeofrepeatclientsisanadditionalqualityparameterthatismonitored. TheGrouphadasickleaveof2.4%in2023.Theboardperceivestheworkingenvironmentandthegeneralwellbeingintheworkplaceasgood.
Soiltechhasazero-accidentphilosophywhenitcomestoincidentsandspillsandstrivesonacontinuousbasisto reducetheimpactofitsactivitiesontheexternalenvironment.TheHSEperformancein2023wasgood,withno losttimeincidents(LTIs).InternalcontrolinSoiltechisensuredinaccordancewithourpoliciesandprocedures, andreinforcedbasedontheorganizationalstructure,competence,andauthoritymatrixaswellassegregationof duties.
Sustainability(ESG) TheGroupwilllistentostakeholdersandcontinuetoshapeourbusinessinasustainabledirection.We withintheGrouptofurtherdevelopourtechnologies,towardsagreenerfuture.Wewillconductourbusinessin asociallyresponsiblemannerconsistentwiththeUNGuidingPrinciplesonBusinessandHumanRightsandthe TenPrinciplesoftheUNGlobalCompact.
Werespectallinternationallyrecognizedhumanrights,includingthoseembeddedintheUniversalDeclarationof HumanRights,theUNConventiononEconomic,SocialandCulturalRights,theUNConventiononCiviland PoliticalRightsandtheILODeclarationonFundamentalPrinciplesandRightsatWork.Theserightsinclude,but arenotlimitedto,thefreedomofassociationandtherighttobargain,andtherighttofreedomfromforced labor,childlaborordiscriminationinworkinglife.WealsorespectcurrentstandardsinInternational HumanitarianLawincludingtheTransparencyActwhichaimstoreducetheriskofhumanrightsviolations,avoid modernslavery,andensuredecentworkingconditions.StatementofTransparencyactcanbefoundon www.soiltech.no.
Outlook Theoutlookispositive.Soiltech'smarket-leadingtechnologiesforwastereduction,recovery,andreusecontinue togainmomentumandmarketshare.Thetotalmarketforwastetreatmentisgrowing,asenvironmental restrictionsfordischargingcontaminatedwatertightenworld-wide.Goinginto2024,Q1typicallyhasalower activityduetothewinterseason.For2024asawhole,weforeseeacontinuedstrengtheninginthemarket, whichisalsoexpectedfor2025.
TheBoardemphasizesthatanyforward-lookingstatementscontainedinthisreportcoulddependonfactors beyonditscontrolandaresubjecttorisksanduncertainties.Accordingly,actualresultsmaydiffermaterially.
Goingconcernassumption havebeenpreparedonthebasisofgoingconcernassumptionref.IAS1.
Shareholdersandsharecapital Attheendof2023Soiltechhad87shareholders.The10largestshareholdersowned75.5%ofthecompany. Foreignownershipwas32.4%.Asatend2023,SoiltechhadanissuedsharecapitalofNOK740543and7405430 outstandingshares,eachwithanominalvalueofNOK0.10andcarryingequalvotingrights.
Dividend SoiltechhasnotpaidanydividendtodateandtheBoarddoesnotproposetopaydividendfor2023.Soiltechisa growthcompany,andweareaimingatacontinuedgrowth,basedonasolidfinancialposition.Ourplanistotake advantageofmarketopportunitiesandreinvestthegeneratedcashinprofitableprojectsandenhancedservice capacity.Anyfuturedividendwillbeevaluatedonthisbasis.
Eventsafteryear-end AsfarastheBoardisaware,therehavebeennosignificanteventssinceyear-endwhichwouldimpactthe financialpositionandprofitsoftheGroupotherthanthosementionedunderEventsafteryear-endabove.
Sandnes,March15,2024
TheboardofdirectorsofSoiltechAS
GunnarWintherEliassen
ChairmanoftheBoard
CarstenBrückner MemberoftheBoard
OlafSkrivervik MemberoftheBoard
GlennÅsland MemberoftheBoard
EirikFlatebø MemberoftheBoard
JanErikTveteraas ChiefExecutiveOfficer
GunnarWintherEliassen Chairmanogtheboard
EirikFlatebø Boardmember
DennisAlberding Deputyboardmember
OlafSkrivervik Boardmember
GlennÅsland Boardmember
Dr.CarstenBrückner Boardmember
GunnarWintherEliassen ChairmanoftheBoard
CarstenBrückner MemberoftheBoard
Sandnes,March15,2024
TheboardofdirectorsofSoiltechAS
OlafSkrivervik MemberoftheBoard
GlennÅsland MemberoftheBoard
EirikFlatebø MemberoftheBoard
JanErikTveteraas ChiefExecutiveOfficer
Note1Generalinformation SoiltechAS(the'Company')isalimitedcompanydomiciledinNorway.TheregisteredofficeoftheCompanyis Koppholen25,4313,Sandnes,Norway.
TheCompanyisaninnovativetechnologycompanyspecializinginthetreatment,recyclingandresponsible handlingofcontaminatedwaterandsolidindustrialwastestreamsonsite.TheCompanyislistedontheNOTCin Oslowithtickercode'SOIL'.Theconsolidatedfinancialstatementscomprisethefinancialstatementsofthe Companyanditssubsidiaries(togetherreferredtoasthe'Group').
Theconsolidatedfinancialstatementsfortheyearended31December2023wereapprovedandauthorizedfor issueinaccordancewitharesolutionoftheboardofdirectorson19thofMarch2024.
TheGrouppresentsconsolidatedfinancialstatementsinaccordancewithIFRS®AccountingStandard*forthe firsttime.Inpreviousyears,theconsolidatedfinancialstatementswerepreparedinaccordancewithNorwegian GenerallyAcceptedAccountingPrinciples(NGAAP).DateoftransitiontoIFRSis1January2022andall comparativefigureshavebeenrestatedaccordingly.Referenceismadetonote26fordetailsontheeffectsofthe transition.
Note2Summaryofgeneralaccountingpolicies Thegeneralaccountingpoliciesappliedinthepreparationoftheseconsolidatedfinancialstatementsaresetout below.Specificaccountingpoliciesrelatedtotheindividualareasinthefinancialstatementsaredescribedinthe relevantnotes.
Basisforpreparation TheconsolidatedfinancialstatementshavebeenpreparedinaccordancewiththeIFRSasadoptedbythe(EU) andadditionaldisclosurerequirementsintheNorwegianAccountingActaseffectiveof31December2023.The consolidatedfinancialstatementsarepresentedinNorwegianKroner(NOK)andhavebeenroundedtothe nearestthousandunlessotherwisestated.Asaresultofroundingadjustments,amountsandpercentagesmay notadduptothetotal.Thefinancialstatementsarepreparedonagoingconcernbasis.
Accountingestimatesandjudgements Itemsinthefinancialstatementsaretoavaryingdegreeaffectedbyestimatesandassumptionsmadeby management,referenceismadetotherelevantnotesfortheaffecteditems.Estimateswithamaterialimpacton thefinancialstatements,combinedwithasignificantestimationuncertainty,comprisethefollowing: -Recognitionofdeferredtaxasset(note8).
Segmentinformation GiventheuniformnatureoftheGroup'sservicesandthecentralizedmanagementfromitsheadofficeinNorway, theentireGroupisconsideredasasingleoperatingsegmentforinternalreportingpurposes.
Foreigncurrencytranslation ThecompanieswithintheGroupprimarilyuseNOKastheirfunctionalcurrency.Forconsolidationpurposes,the translatedusingtheclosingrateatthebalancesheetdate.Incomeandexpensesforeachincomestatementare translatedusingtheyearlyaverageexchangerate.
NewandamendedIFRSstandardsnotyetadopted Ofnewstandardsandinterpretationsthatarenotmandatoryforthecurrentreportingperiod,noneareexpected tohaveamaterialimpactontheentityinthecurrentorfuturereportingperiodsandonforeseeablefuture transactions.
Note3Revenues
Overalldescriptionofcontractswithcustomers TheGroup'srevenuemainlyderivesfromthesaleofservicesrelatedtotreatmentofcontaminatedwater(i.e. slop),cuttingshandling,cleaningservicesandotherrelatedservices,forcustomerswithintheoil&gasindustry. Thekeyelementoftheservicedeliveriesisthedeploymentandsupervisionoftreatmentandhandling equipmentatthecustomer'ssite,tomeetthespecificpurificationtargetsdefinedinthecontracts
Thecontractconsiderationiscomposedmainlyofagreeddailyratesforequipmentandpersonnel,respectively, andreimbursementofcostsplusamarkup.Ratesvarydependingonwhethertheequipmentisinactiveuse duringongoingoperationsorinstandby,forexamplewhentheequipmentisonlocationbutnotinOperation. Typically,thecontractdeliveriesfollowtheoperationontherig.However,allcontractscanbeterminatedbythe customerwithoutcauseonashortnotice,withonlycompletionofexistingworkorder.
Costsofmobilizationanddemobilizationofequipmentandpersonnelarenormallyrecoveredthroughtheagreed dailyrates,exceptforsomecontracts,wheretheyarereimbursedseparately.Suchreimbursementis,however, generallynotmaterialinrelationtothetotalcontractconsideration.Considerationisnormallyinvoicedmonthly, basedonactualdeliveries.
Accountingpolicies Thecontractsareconsideredtoconsistofonlyoneperformanceobligation,whichissatisfiedovertime.Progress ismeasuredonthebasisofthetimetheSloptreatmentunit(STT)isavailabletoservicethecustomer.Inpractice, revenuebasedondailyratesarethusrecognizedwiththeamountthattheCompanyhasarighttoinvoice.Asa practicalsimplificationbasedonmateriality,anyfeesassociatedwithmobilizationanddemobilizationare recognizedlinearlyovertheperiodoftherelatedcontract.
Costofmobilizationisconsideredtobecosttofulfilacontractandarerecognizedasanassetwhenincurred.The assetissubsequentlyamortizedoverthecontractperiod,ascostofmaterialsandpersonnelexpenses.
Revenuesbyproductcategory
*Otherrevenueisrevenuefromcuttingshandling,cleaningservices,swarfhandlingandassociatedservices.
Revenuesbygeography
*InternationalrevenuecomesmainlyfromUK,Netherlands,AbuDhabiandothercountries.
Coststofulfilthecustomercontracts
Note4Personnelexpenses
Accountingpolicies
Personnelcostsareexpensedastheemployeesearntherighttothepaymentofwagesforhoursworked. Paymentstodefinedcontributionpensionplanareexpensedovertheperiodinwhichtheemployeesearnthe righttothedeposit.
Pensions
TheGroup followthestipulationsintheNorwegianMandatoryOccupationalPensionsAct.TheGroup'spensionscheme adherestotherequirements,assetintheAct.
Specificationofpersonnelexpenses
*Otherpersonnelexpensesincludeexpensesrelatingshare-basedpaymenttransactions.Refertonote24for furtherdetails.
Numberofemployees
Note5Depreciationandamortisation
Specificationofdepreciationandamortisation
Note6Otheroperatingexpenses
Specificationofotheroperatingexpenses
Note7Financialitems
Note8Incometax
Accountingpolicies
TheGroupconsistsofcompaniessubjecttoordinarycorporatetaxationinNorway,andwithinthesametax groupwithrespecttooffsettingofdeferredtax.Incometaxisthereforerecognizedonthebasisofageneral applicationofIAS12withouttheneedforfurtherjudgmentsorpoliciesofsignificance.
Basisforrecognitionofdeferredtaxassets DeferredtaxassetsarerecognizedwhenitisprobablethattheGroupwillhaveasufficientprofitfortaxpurposes insubsequentperiodstoutilizethetaxasset.TheGrouprecognizepreviouslyunrecognizeddeferredtaxassetsto theextentithasbecomeprobablethattheGroupcanutilizethedeferredtaxasset.Similarly,theGroupwill reduceadeferredtaxassettotheextentthattheGroupnolongerregardsitasprobablethatitcanutilizethe deferredtaxasset.Deferredtaxanddeferredtaxassetsaremeasuredbasedontheexpectedfuturetaxrates applicabletothecompaniesintheGroupwheretemporarydifferenceshavearisenbasedontaxrates(andtax laws)thathavebeenenactedorsubstantivelyenactedbytheendofthereportingperiod.Deferredtaxand deferredtaxassetsarerecognizedattheirnominalvalueandclassifiedasnon-currentasset(non-current liabilities)intheconsolidatedstatementoffinancialposition.
Specificationofincometaxexpense
Reconciliationoftaxexpensewithtaxcalculatedatnominalrate
PermanentdifferencescomemainlyfromreversalofcontingentliabilityMNOK15andimpairmentofgoodwill MNOK-5,withanetimpactMNOK10andataximpactofMNOK2.2.Forfurtherinformationseenote9.
Specificationofdeferredtaxliabilitiesandassets2023
Reclassbetweendeferredtax liabilitiesandassets
Reclassbetweendeferredtax liabilitiesandassets
TaxlossescarriedforwardarefromoperationsinNorwayandcanbecarriedforwardindefinitely.Seenote22for furtherdetailsonthebusinesscombinationwithSorbwater.
Note9Intangibleassets Accountingpolicies
Intangibleassetsmainlycomprisegoodwilloriginatingfrompreviousacquisitions.Goodwillisnotdepreciatedbut isinsteadsubjecttoannualimpairmenttesting.Otherintangibleassetsincludepatentsandsoftwarewhichare recognisedinaccordancewiththecostmethodanddepreciatedovertheirexpectedeconomiclifetime.
Specificationofintangibleassets Impairmenttesting AgoodwillofMNOK5.0wasrecognizedinconnectionwiththeacquisitionofSorbwaterin2022.Seenote22for furtherdetails.However,theexpectedsynergiesfromtheSorbwaterpatentedbiodegradablechemicalsare delayedandthebusinessplanhasthereforebeenrevised.Sincethetimingoftherealizationofsuchsynergiesis uncertain,thegoodwillhasbeenimpairedinfull.Thedelayinsynergiesalsoresultedincertainthresholdsunder theSPAareuncertaintobemet.Consequently,thecontingentconsiderationofMNOK15thatwasrecognizedas partoftheconsiderationhasbeenreversedandrecognizedasothergainin2023.
Note10Property,plant&equipment Accountingpolicies
Property,plant&equipmentconsistsofsloptreatmentunits,equipmentforcuttingshandling,cleaningservices andswarfremoval,skipsandvariousotherequipment.Property,plant&equipmentarerecognizedin accordancewiththecostmethodanddepreciatedovertheirexpectedeconomiclifetime.
Note11Leases Accountingpolicies
TheGroupisprimarilyinvolvedinleaseagreementsasalessee.Allleaseagreementsarerecognizedin accordancewithIFRS16,withtheexceptionof: -Leaseagreementswithashorterdurationthan12months
-LeasesofassetswithacostpricebelowNOK50000
Paymentsrelatingtosuchleasesarerecognizedasoperatingexpenseswhendue.TheGroupdoeshowevernot havemanysuchagreementsandtheannualexpenseisthereforeimmaterial.
Right-of-useassetsarerecognizedinaccordancewiththecostmethodanddepreciatedovertheleaseterm,or expectedeconomiclifetime,dependingonwhetherapurchaseoptionisexpectedtobeexercised.
OveralldescriptionoftheleasesoftheGroup
TheGroupprimarilyleasespremisesandsloptreatmentunits(STT).Forpremises,theleasetermisusually between3and10years,whileforsloptreatmentunitsbetween4and7years.ForSTTunitsitisexpectedthat thepurchaseoptionisexercisedandassuchtheassetisdepreciatedovertheexpectedeconomiclifetime.
Assumptionsandjudgmentsapplicabletonewleases
In2023,theGroupenteredintoanewleaseagreementforitsheadofficeinSandnes.Theleaseperiodis5years with5yearsoptiontoextend.Theleaseliabilityiscalculatedbasedontheleasetermincludingtheoptionperiod. AnewleaseagreementwasalsoenteredintofortheGrouppremisesinBergen,withaleaseperiodof3years. Thediscountrateusedinthenewleasecalculationis7,24%.
TheGrouphasleasedadditionalSTTunitstobedeliveredinQ22024.Thepresentvalueoftheleaseliabilitywill berecognisedoncommencementofthelease.
Specificationofright-of-useassets
Specificationofleaseliabilities
Note12Otherassetsandliabilities
Othernon-currentassets
Othercurrentassets
Othercurrentliabilities
Note13Tradereceivables
Accountingpolicies
Tradereceivablesarerecognizedatanamountequaltothetransactionprice,lessprovisionsforexpectedcredit losses.TheGroupappliesthesimplifiedapproachtomeasuringexpectedcreditlosseswhichusesalifetime expectedlossallowanceforalltradereceivables.
Specificationoftradereceivables
Specificationofcreditlossrecognizedinprofitorloss
Note14Cashandcashequivalents
Accountingpolicies
Cashandcashequivalentscomprisemostlyordinarybankdeposits.Thestatementofcashflowsispreparedusing theindirectmethod.Interestincomeandexpensesarepresentedasinvestingandfinancingactivities, respectively.
Restrictedcash
Note15Borrowings
Accountingpolicies
Borrowingsareinitiallyrecognizedatfairvalue,includingtransactioncostsdirectlyattributabletothe transaction,andaresubsequentlymeasuredatamortizedcost.Therehasnotbeenanymaterialtransactioncost duringtheyear.
Covenants
TheloanfacilitywithSandnesSparebankenteredin2023hasthefollowingcovenants: -NIBD/EBITDA<4 -Bookequity>30% -Approvalfrombankifdividend/groupcontribution
Thecompanyisnotinbreachwithanyofthecovenantsabove.
Specificationofborrowings31.12.2023
Specificationofborrowings31.12.2022
Contractualpaymentsonborrowings31.12.2023
Contractualpaymentsonborrowings31.12.2022
Forloanswithfloatinginterestrates,theamountsabovearecalculatedusingthecurrentinterestrateperthe relevantyearend.
Carryingamountofassetspledgedassecurity
Note16Financialderivatives
Accountingpolicies
Financialderivativesconsistofcurrencyforwardcontracts.Althoughthecontractsareheldforhedgingpurposes, theGroupdoesnotapplyhedgeaccounting.Theforwardcontractsaremeasuredatfairvaluethroughprofitor loss.Gainsandlossesarepresentedasfinancialincomeorexpense,respectively.Currencyforwardcontractsare measuredatlevel2inthefairvaluehierarchy,asthepresentvalueoffuturecashflowsisbasedontheforward exchangeratesatthebalancesheetdate.
Currencyforwardcontracts
AcurrencyforwardcontractofMUSD0.74wasenteredintoinrelationtothesaleofcertainequipmenttoKuwait in2014,intheGroup subjecttosignificantuncertainty.Theforwardcontracthasbeenrolledforwardmultipletimespendingafinal outcome,andthecurrentcontractmaturesat04.03.2024.AtyearendtheliabilitywasMNOK3.7.Thisisincluded inthestatementoffinancialpositionunderOthercurrentliabilities.
Note17Financialinstruments
CurrentFinancialassetspercategory
Financialliabilitiespercategory
Fairvalue Foritemsmeasuredatamortizedcost,carryingamountisconsideredtobeareasonableapproximationtofair value.
Note18Financialriskandcapitalmanagement
Thepoliciesformanagementofcapitalandfinancialriskaimtosupportthecurrentstrategyandtarget ofmaintainingahighrateofgrowthanddevelopingprospectivebusinessopportunities.TheGroup structureshallberobustenoughtomaintainthedesiredfreedomofactionandutilizegrowthopportunities, basedonstrictassessmentsrelatingtotheallocationofcapital.TheGroupdebtfinancingconsistofbankand leasingfinancing.TheloancovenantstowhichtheGroupissubjectplayakeyroleinhowcapitalismanagedand allocated,tomaintainalowfinancingriskandfinancialflexibility.Seenote15borrowingsforfurtherdetailson
Marketrisk
TheGroup'sexposuretofinancialmarketriskismainlyrelatedtointerestratesonexternalfinancingandvarious formsofcurrencyrisks.TheGrouphasadiversifiedclientlistandevaluateschangesinpricingstructurecontract bycontract,aspartofitsmitigationprocesstocoverforincreasedinterestcost.TheGrouphasnotenteredinto anyinterestswapagreements.
Currencyrisk
TheGrouphasNorwegiankroner(NOK)asitsbasecurrency.However,throughitsoperationsoutsideNorway, theGroupisexposedtofluctuationsincertainexchangerates,mainlyEuro(EUR),BritishPound(GBP)and
Americandollar(USD).TheGroupalsohascurrencyriskslinkedtobothbalancesheetmonetaryitemsand investmentsinforeigncountries.Thetablesbelowshowend.AstheGroupdoesnotapplyhedgeaccounting,theimpactonprofit/lossandequitywillbethesame regardlessofthedirectionoftheexchangeratechange.
Currencyexposure31.12.2023
Currencyexposure31.12.2022
Interestraterisk TheCompanyloanandleasingagreementshavefloatinginterestratesbasedonNIBORaccordingtothefinancial strategy,seeNote15borrowings,andistherebyinfluencedbychangesintheinterestmarket.Achangeof increaseof1percentagepointinNIBORmeansachangeinyearlynetinterestexpensesofapproximatelyMNOK 1.5.
Creditrisk Assetsthatmaygiverisetocreditriskcomprisemainlytradereceivablesandbankdeposits.Forthelatter,the counterpartiesaremainlybanksestablishedintheNordiccountries,whichindicatesthatthecreditriskshouldbe regardedasnegligible.Tradereceivablesarecharacterizedbyaconcentrationinthecustomerbase,intermsof countryandindustry.Thecustomers,however,areprimarilylargecompanieswithhighcreditratings,andthe agreedpaymenttermsinthecontractstypicallyensurethatanyoverdueamountsarekeptatlowlevel.Thus, creditlosseshavehistoricallybeeninsignificant.
Liquidityrisk Asatyear-end,theGroup'sportfolioofloansandloanfacilitiesiswelldiversifiedbothwithregardstomaturity profileandlenders.InJune2023theCompanyentereda7-yearloanfacilityofMNOK73withSandnes Sparebank.TogetherwithanexistingloanfacilityofMNOK75withSandnesSparebank,thefacilitiestotalMNOK 148.TheunusedportionofthecreditfacilitieswasMNOK55.3asat31.12.2023.
Summaryofcontractualmaturities31.12.2023
Note19Climaterisk TheGrouphasevaluatedtheoverallclimaterisktobelow.Climaterelatedmattersarenotexpectedtocritically effectassets,provisions,orfuturecashflows.TheanalysisisbasedontheTaskForceonClimate-relatedFinancial Disclosures(TCFD)framework.TheGrouphasevaluatedthephysicalrisk,theriskassociatedwithtransitionintoa lowcarboncommunityandtheliabilityrisktowardstheGroup.Theopportunitiesareconsideredtoexceedthe risksidentifiedfortheGroup.
Soiltechs Note20Sharecapitalandshareholderinformation
Sharecapitalandownershipstructure
Thesharecapitaloftheparentcompany,SoiltechAS,amountstoNOK740543asof31December2023,and consistsofatotalof7,405,430ordinaryshares,eachwithanominalvalueofNOK0.1.
IncludedinOthershareholdersare5000sharesownedbyboardmemberOlafSkrivervik. Foreignownershipwas32,4%atyear-end2023(2022:32,4%)
Note21Earningspershare
*Moreinformationonoptionsinnote24
Note22Groupcompositionandsubsidiaries Accountingpolicies Theconsolidatedfinancialstatementscompriseofallsubsidiariescontrolledbytheparententity.Subsidiariesare fullyconsolidatedfromthedateonwhichcontrolistransferredtotheGroup.Likewise,theyaredeconsolidated fromthedatethatcontrolceases.
ChangesinthecompositionoftheGroup ThesubsidiarySorbwaterTechnologyASwasacquiredbySoiltechASon2September2022,andwere consolidatedfromthisdateforward(ref.furtherdetailsbelow).ThecompositionoftheGroupisotherwise unchangedintheperiodspresentedinthesefinancialstatements.
Subsidiariesasof31.12.2023
AcquisitionofSorbwaterTechnologyASin2022
On2ndofSeptember2022theGroupacquired100%ofthesharesinSorbwaterTechnologyAS.Sorbwaterhas industryleadingexpertisewithinbio-degradablechemistry.Thedeferredtaxassetisrecognizedinfullasitis probablethattheGroupwillhavesufficientfuturetaxableprofitstorealizecarryforwardunusedtaxlosses, throughgroupcontributionsbetweentheGroupcompanies.ApartoftheconsiderationforSorbwater, amountingtoMNOK15,wascontingentonmeetingcertainsalestargetsinthefuture.Atthetimeofacquisition, theCompanyassessedmeetingthesesalestargetsashighlyprobable.Theentirecontingentconsiderationwas thereforerecognizedasaliabilityandpresentedasothernon-currentliabilitiesinthestatementoffinancial position.Withreferencetonote9,theexpectedsynergiesfromtheSorbwaterpatented,biodegradable chemicalsaredelayed,andthebusinessplanhasthereforebeenrevised.Consequently,thecontingentpartof theconsiderationhasbeenrecognizedasothergainin2023.
Detailsofthefairvalueofidentifiableassetsandliabilitiesacquiredpurchaseconsiderationandgoodwillareas follows:
Note23RemunerationtoseniorexecutivesandBoardofDirectors
ThepreviousCEOStigH.ChristiansenresignedfromhispositioninApril2023.Noseverancepaymentwasmade. Atthesametime,JanErikTveteraaswasappointedasnewCEO.IftheCompanyterminatestheCEO employment,theExecutiveshallbeentitledtoseverancepayforaperiodof12monthsaftertheexpiryofthe agreednoticeperiod.
GunnarWintherEliassenwaselectedasnewChairmanoftheboardinDecember2023.Thepreviousexecutive chairmanJanErikTveteraasresignedfromtheboardinDecember2023,continuinginhisroleasCEO.Robert HvideMacLeodresignedfromtheboardinDecember2023.Noremunerationhasbeenpaidtothegeneral manageranddirectorsinsubsidiaries.TheCompanyhasnotprovidedloansorcollateraltoexecutivesor membersoftheboard.
GrantedoptionstoseniorexecutivesandBoardofDirectors *RobertHvideMacLeodresignedfromtheboardinDecember2023.
Note24Share-basedpaymenttransactions
Accountingpolicies
TheGrouphasalong-termshare-basedincentiveplanforkeypersonnelandboardmembers.Thetermofthe planimpliesthatitisrecognisedasanequity-settledshare-basedpaymenttransactioninaccordancewithIFRS2. Associatedobligationstopaysocialsecuritytaxarerecognisedascash-settledshare-basedpaymenttransactions.
Long-termshare-basedincentiveplan
Thestrikepriceoftheoptionsissetatthemarketpriceatgrantdate.Grantedoptionsaredistributedoverthree equaltrancheswithvestingperiodof1-3years.Alloutstandingoptionsmustbeexercisedwithin5yearsfromthe grantdate.Grantedoptionsaremeasuredatfairvalueatthegrantdate,whichisdeterminedusingtheBlackScholesoptionpricingmodel.Companyusesathird-partycompanyforthiscalculation.
Summaryofgrantedoptionsintheperiod
Riskfreeinterestrate
Historicalvolatility
Expectedlifetimeoftheoption(years)
Shareprice
Averageoptionvalue(NOK)
Movementinoutstandingshareoptions
Asat1January
Grantedduringtheyear
Exercisedduringtheyear
Forfeitedduringtheyear
Expiredduringtheyear
Asat31December
Vestedandexercisableat31December
Note25Eventsafterthereportingperiod
Therearenoeventsotherthanbusinessactivitiesintheordinarycourseofbusinessafterthebalancesheetdate ofanadjustingornon-adjustingnature.
Note26TransitionfromNGAAPtoIFRS
InconnectionwiththetransitiontoIFRS,themanagementhascarriedoutathoroughreviewoftheGroup's businessanditsaccountingpoliciescurrentlyappliedunderNGAAP.Althoughthetransitionrequireschangesin thetreatmentofoperatingleasesandgoodwill,theoverallconclusionhasbeenthatthetransitionhasalimited impactonthefinancialreportingoftheGroup.Furtherdetailsofthemostsignificantchangespertransitiondate andyear-end2022areexplainedinnotestothereconciliationsbelow.
Effectoftransitiononstatementofcomprehensiveincomefor2022
(amountsinNOK1000)
Itemsthatmaybereclassifiedtoprofitorloss Currencytranslationdifferences
Note26A-D
Note26ATradereceivablesandtradepayables
Inordertoachieveamorecorrectclassificationinthebalancesheet,theGrouphasdecidedtoreclassify receivablesrelatingtoearned,notinvoicedrevenuefromothercurrentassetstotradereceivables. Correspondingly,theprovisionfortradepayablesforwhichnoinvoicehasbeenreceivedhasalsobeen reclassifiedfromothercurrentliabilitiestotradepayables.
Note26BLeasing Foroperatingleases,theleasepaymentshavebeenexpensedcontinuouslyunderNGAAP.AsIFRSdoesnot distinguishbetweenoperatingandfinancialleases,allleasesarerecognizedinthebalancesheetasright-of-use assetsandleaseliabilities.Thetransitionadjustmentsrelateexclusivelytotherentalofofficepremises.Forthese leases,theGrouphasdecidedtorecognizetheright-of-useassetswithacarryingamountasifIFRS16hadbeen appliedsincecommencementdate.Adiscountrateof4,6%hasbeenappliedwhencalculatingtheliabilityforthe officeleases.
Summaryofadjustmentsforofficeleases Note26CReclassificationsrelatingtofinanceleases InpreviousreportingunderNGAAP,theGroup'sliabilitiesrelatingtofinancialleaseshavebeenpresented togetherwithordinarybankloansinthebalancesheet.StartingfromthetransitiontoIFRS,thesearepresented separatelyasleaseliabilitiesinthebalancesheet.
Asofend2022,theGrouphadenteredintoseveralleaseagreementsfortheleaseofSTTunitsunder construction,butnotyethandedovertotheGroup.PreviousbalancesheetspreparedunderNGAAP,included assetsandliabilitiescorrespondingtotheaccruedpaymentsfromthebanktothemanufacturerofthe equipment.AnadjustmentofMNOK12,4isthereforemadetobothright-of-useassetsandleaseliabilitiessince IFRSdoesnotpermitrecognitionoftheseitemsuntilthedateofcommencementofthelease.
Note26DAcquisitionofSorbwaterTechnologyASin2022 InSeptember2022,theCompanyacquiredSorbwaterTechnologyAS.Priortothis;theCompanyhasnotbeen involvedinanybusinesscombinationsthatcouldbeeligibleforaretrospectiveapplicationofIFRS3.When accountingfortheacquisitionofSorbwaterTechnologyASunderNGAAP,allassessmentsandassumptionswere madeinlightofapossiblefuturetransitiontoIFRS.Asaresult,thedifferenceswerelimitedtothoseareaswhere NGAAPprohibitstheuseofIFRSsolutions.TheseareascompriseamortizationofgoodwillunderNGAAP,aswell asthetreatmentoftransactioncosts.WhiletransactioncostsarealwaysrecognizedasexpensesunderIFRS,they aretreatedaspartoftheconsiderationunderNGAAP,whichinpracticeleadstoincreasedgoodwill.
Summaryofadjustmentforgoodwill
GunnarWintherEliassen ChairmanoftheBoard
CarstenBrückner MemberoftheBoard
Sandnes,March15,2024
TheboardofdirectorsofSoiltechAS
OlafSkrivervik MemberoftheBoard
GlennÅsland MemberoftheBoard
EirikFlatebø MemberoftheBoard
JanErikTveteraas ChiefExecutiveOfficer
NOTESTOTHEFINANCIALSTATEMENTS Note1Generalinformation
SoiltechAS(the'Company')isalimitedcompanydomiciledinNorway.TheregisteredofficeoftheCompanyis Koppholen25,4313,Sandnes,Norway.TheCompanyisaninnovativetechnologycompanyspecializinginthe treatment,recyclingandresponsiblehandlingofcontaminatedwaterandsolidindustrialwastestreamsatsite. TheCompanyislistedontheNOTCinOslowithtickercode'SOIL'.Thefinancialstatementsfortheyearended31 December2023wereapprovedandauthorizedforissueinaccordancewitharesolutionoftheboardofdirectors on19thofMarch2024.
Note2Summaryofgeneralaccountingpolicies
Thegeneralaccountingpoliciesappliedinthepreparationofthefinancialstatementsaresetoutbelow.Specific accountingpoliciesrelatedtotheindividualareasinthefinancialstatementsaredescribedintherelevantnotes.
Basisforpreparation
ThefinancialstatementhasbeenpreparedinaccordancewithNorwegianAccountingActandassociated regulations,aswellasGenerallyAcceptedAccountingPrinciples(GAAP)inNorway.Thefinancialstatementis presentedinNorwegianKroner(NOK)andhavebeenroundedtothenearestthousandunlessotherwisestated. Asaresultofroundingadjustments,amountsandpercentagesmaynotadduptothetotal.
Thefinancialstatementsarepreparedonagoingconcernbasis.
Currency Transactionsinforeigncurrenciesaretranslatedattherateapplicableonthetransactiondate.Monetaryitemsin aforeigncurrencyaretranslatedintoNOKusingtheclosingrateatthebalancesheetdate.
Thecashflowanalysis
Thecashflowanalysishasbeenpreparedaccordingtotheindirectmethod.
Note3Revenues
Revenuerecognition Overalldescriptionofcontractswithcustomers TheGroup'srevenuemainlyderivefromthesaleofservicesrelatedtotreatmentofcontaminatedwater(i.e. slop),cuttingshandling,cleaningservicesandotherrelatedservices,forcustomerswithintheoil&gasindustry. Thekeyelementoftheservicedeliveriesisthedeploymentandsupervisionoftreatmentandhandling equipmentatthecustomer'ssite.Thecontractconsiderationiscomposedmainlyofagreeddailyratesfor equipmentandpersonnel,respectively,andreimbursementofcostsplusamarkup.Ratesvarydependingon whethertheequipmentisinactiveuseduringongoingoperationsorinstandby,forexamplewhenthe equipmentisonlocationbutnotinoperation.Costsofmobilizationanddemobilizationofequipmentand personnelarenormallyrecoveredthroughtheagreeddailyrates,exceptforsomecontracts,wheretheyare reimbursedseparately.Suchreimbursementare,however,generallynotmaterialinrelationtothetotalcontract consideration.Considerationisnormallyinvoicedmonthly,basedonactualdeliveries.
Accountingpolicies Thecontractsareconsideredtoconsistofonlyoneperformanceobligation,whichissatisfiedovertime.Progress ismeasuredonthebasisofthetimetheSTTunitisavailabletoservicethecustomer.Inpractice,revenuebased ondailyratesarethusrecognizedwiththeamountthattheCompanyhasarighttoinvoice.Asapractical simplificationbasedonmateriality,anyfeesassociatedwithmobilizationanddemobilizationarerecognized linearlyovertheperiodofthecontracttheyrelateto.Costofmobilizationisconsideredtobecosttofulfila contractandarerecognizedasanassetwhenincurred.Theassetissubsequentlyamortizedoverthecontract period,ascostofmaterialsandpersonnelexpenses.
Revenuesbygeography
Revenuesfrommajorcustomers
Coststofulfilthecustomercontracts
Note4Personnelexpense&remunerationtoseniorexecutivesandboardofdirectors
Accountingpolicies
Personnelcostsareexpensedastheemployeesearntherighttothepaymentofwagesforhoursworked. Paymentstodefinedcontributionpensionareexpensedovertheperiodinwhichtheemployeesearntherightto thedeposit.
Pensions
followthestipulationsintheNorwegianMandatoryOccupationalPensionsAct.TheGroup'spensionscheme adherestotherequirements,assetintheAct.
Specificationofpersonnelexpenses
*Otherpersonnelexpensesincludeexpensesrelatedtoshare-basedpaymenttransactions.Pleaserefertonotes forConsolidationfinancialstatementforfurtherdetails.
Numberofemployees
Remunerationtoseniorexecutivesandboardofdirectors
ThepreviousCEOStigH.ChristiansenresignedfromhispositionApril2023.Noseverancepaymentwasmade. ThenewCEOJanErikTveteraasstartedinApril2023.
GunnarWintherEliassenwaselectedasnewChairmanoftheboardinDecember2023.ThepreviousChairmanof theboardJanErikTveteraascontinuesasCEO.DirectorRobertHvideMacLeodresignedfromboardinDecember 2023.
Note5Depreciationandamortisation
Specificationofdepreciationandamortisation
Note6Otheroperatingexpenses
Specificationofotheroperatingexpenses
Specificationofauditorsremuneration
Note7Relatedparties
Accountingpolicies
IntheParentcompany,thesubsidiariesandinvestmentsinanyassociatedcompanyarevaluedatcost.The investmentisvaluedatthecostoftheshares,lessanyimpairmentlosses.Animpairmentlossisrecognizedifthe impairmentisnotconsideredtemporary,inaccordancewithgenerallyacceptedaccountingprinciples. Impairmentlossesarereversedifthereasonfortheimpairmentlossisrectifiedinalaterperiod.
Dividends,Groupcontributionsandotherdistributionsfromsubsidiariesarerecognizedinthesameyearasthey arerecognizedinthefinancialstatementoftheprovider.Ifdividends/groupcontributionexceedswithheld profitsaftertheacquisitiondate,theexcessamountrepresentsrepaymentofinvestedcapital,andthe distributionwillbedeductedfromtherecordedvalueoftheacquisitioninthebalancesheetfortheparent company.
Subsidiaries TheexpectedsynergiesfromtheSorbwaterpatentedbiodegradablechemicalsaredelayedandthebusinessplan hasthereforebeenrevised.ThedelayinsynergieshasresultedincertainthresholdsundertheSPAareuncertain tobemet.Consequently,thecontingentconsiderationofMNOK15thatwasrecognizedaspartofthe considerationhasbeenreversedandrecognizedasothergainin2023.Asaconsequenceofthis,awritedownof theinvestmentinSorbwaterTechnologyASofMNOK9.2hasbeenmade.Thiswritedownisreflectedunder financialexpenses.
Outstandingbalanceswithgroupcompanies
Note8Financialitems
Note9Incometax
Accountingpolicies
Thetaxexpenseconsistsofthetaxpayableandchangestodeferredtax.Deferredtax/taxassetsarecalculatedon alldifferencesbetweenthebookvalueandtaxvalueofassetsandliabilities,withtheexceptionof:temporary differenceslinkedtogoodwillthatarenottaxdeductible.Temporarydifferences,bothpositiveandnegative, whichwillorarelikelytoreverseinthesameperiod,arerecordedasanetamount.
Deferredtaxassetsarerecognisedwhenitisprobablethatthecompanywillhaveasufficientprofitfortax purposesinsubsequentperiodstoutilizethetaxasset.Thecompaniesrecognizepreviouslyunrecognized deferredtaxassetstotheextentithasbecomeprobablethatthecompanycanutilizethedeferredtaxasset. Similarly,thecompanywillreduceadeferredtaxassettotheextentthatthecompanynolongerregardsitas probablethatitcanutilizethedeferredtaxasset.Deferredtaxanddeferredtaxassetsaremeasuredonthebasis oftheexpectedfuturetaxratesapplicabletothecompaniesintheGroupwheretemporarydifferenceshave arisenbasedontaxrates(andtaxlaws)thathavebeenenactedorsubstantivelyenactedbytheendofthe reportingperiod.Deferredtaxanddeferredtaxassetsarerecognizedattheirnominalvalueandclassifiedasnoncurrentassetinvestments(non-currentliabilities)inthebalancesheet.
Temporarydifferencesrelatedto:
AgroupcontributionisgiventosubsidiarycompanySorbwaterTechnologyASthatwillutilizethisagainstitsloss carryforward.
Note10Intangibleassets Accountingpolicies
Intangibleassetsmainlycomprisegoodwilloriginatingfrompreviousacquisitions.Goodwillisnotdepreciatedbut isinsteadsubjecttoannualimpairmenttesting.Otherintangibleassetsincludepatentsandsoftwarewhichare recognisedinaccordancewiththecostmethodanddepreciatedovertheirexpectedeconomiclifetime.
Note11Property,plant&equipment
Accountingpolicies
Property,plant&equipmentconsistsofsloptreatmentunits,equipmentforcuttingshandlingandswarfremoval, skipsandvariousotherequipment.Property,plant&equipmentarerecognizedinaccordancewiththecost methodanddepreciatedovertheirexpectedeconomiclifetime.
Note12Leases Accountingpolicies TheCompanyleasescertainoperatingequipmentwhichinturnisleasedtoourcustomers.TheCompanyhas substantiallyalltherisksandrewardsofownershipandtheleasesareclassifiedasfinancialleases.Financial leasesarecapitalizedattheinceptionoftheleaseatthelowerofthefairvalueoftheleasedassetorthepresent valueofthefutureminimumleasepayments.Eachleasepaymentisallocatedbetweenthecorresponding financialleaseliabilityandfinancechargestoachieveaconstantrateontheliabilityoutstanding.
theStatementofProfitandLoss.Thedepreciationpolicyforassetsheldunderfinancialleasesisconsistentwith thatforownedassetsandisdepreciatedoverestimatedeconomiclife.
Overalldescriptionoftheleasesoftheparentcompany
Theparentcompanyprimarilyleasessloptreatmentunits(STT).Forsloptreatmentunits(STT),theleasetermis usuallybetween4and7years.
Specificationofright-of-useassets
Specificationofleaseliabilities
Contractualpaymentsonleases
Note13Otherassetsandliabilities
Accountingpolicies
Non-currentassetsareassetsintendedforlong-termownershiporuse.Allotherassetsarecurrentassets. Receivablesthatfalldueforpaymentwithinoneyearshallnotbeclassifiedasnon-currentassets.Similarcriteria applytoliabilities. Othercurrentassetsarerecordedinthebalancesheetatnominalvaluelessprovisionsforexpectedcreditlosses.
Othernon-currentassets
Othercurrentassets
Othernon-currentliabilities
Note14Tradereceivables
Accountingpolicies
Tradereceivablesarerecognizedatanamountequaltothetransactionprice,lessprovisionsforexpectedcredit losses.TheGroupappliesthesimplifiedapproachtomeasuringexpectedcreditlosseswhichusesalifetime expectedlossallowanceforalltradereceivables.
Note15Cashandcashequivalents
Accountingpolicies
Cashandcashequivalentscomprisemostlyordinarybankdeposits.Thestatementofcashflowsispreparedusing theindirectmethod.Interestincomeandexpensesarepresentedasinvestingandfinancingactivities, respectively.
Restrictedcash
Note16Borrowings
Accountingpolicies
Borrowingsareinitiallyrecognizedatfairvalue,includingtransactioncostsdirectlyattributabletothe transaction,andaresubsequentlymeasuredatamortizedcost.
Covenants
TheloanfacilitywithSandnesSparebankenteredin2023hasthefollowingcovenants: -NIBD/EBITDA>4 -Bookequity>30%
-Approvalfrombankifdividend/groupcontribution
Specificationofborrowings31.12.2023
Specificationofborrowings31.12.2022
Contractualpaymentsonborrowings31.12.2023
Forloanswithfloatinginterestrates,theamountsabovearecalculatedusingthecurrentinterestrateperthe relevantyearend.
Carryingamountofassetspledgedassecurity
Note17Sharecapitalandshareholderinformation
Sharecapitalandownershipstructure
Thesharecapitaloftheparentcompany,SoiltechAS,amountstoNOK740543asof31December2023,and consistsofatotalof7,405,430ordinaryshares,eachwithanominalvalueofNOK0.1.
Shareholdersasof31.12.2023
IncludedinOthershareholdersare5000sharesownedbyboardmemberOlafSkrivervik.Foreignownershipwas 32,4%atyear-end2023(2022:32,4%)
Note18Financialriskandcapitalmanagement
Seeinformationinconsolidatedfinancialstatement.
Note19Climaterisk
Seeinformationinconsolidatedfinancialstatement.
Note20RemunerationtoseniorexecutivesandBoardofDirectors
Seeinformationinconsolidatedfinancialstatement.
Note21Share-basedpaymenttransactions
Seeinformationinconsolidatedfinancialstatement.
Note22Eventsafterthereportingperiod
Therearenoeventsotherthanbusinessactivityintheordinarycourseofbusinessafterthebalancesheetdateof anadjustingornon-adjustingnature.
TotheGeneralMeetingofSoiltechAS
IndependentAuditor’sReport Opinion
WehaveauditedthefinancialstatementsofSoiltechAS,whichcomprise: thefinancialstatementsoftheparentcompanySoiltechAS(theCompany),whichcomprisethe balancesheetasat31December2023,thestatementofprofitandloss,thestatementofchanges inequityandstatementofcashflowsfortheyearthenended,andnotestothefinancial statements,includingasummaryofsignificantaccountingpolicies,and theconsolidatedfinancialstatementsofSoiltechASanditssubsidiaries(theGroup),which comprisethestatementoffinancialpositionasat31December2023,thestatementof comprehensiveincome,statementofchangesinequityandstatementofcashflowsfortheyear thenended,andnotestothefinancialstatements,includingmaterialaccountingpolicyinformation.
Inouropinion
thefinancialstatementscomplywithapplicablestatutoryrequirements, thefinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheCompanyasat31 December2023,anditsfinancialperformanceanditscashflowsfortheyearthenendedin accordancewiththeNorwegianAccountingActandaccountingstandardsandpracticesgenerally acceptedinNorway,and theconsolidatedfinancialstatementsgiveatrueandfairviewofthefinancialpositionoftheGroup asat31December2023,anditsfinancialperformanceanditscashflowsfortheyearthenended inaccordancewithIFRSAccountingStandardsasadoptedbytheEU.
BasisforOpinion
WeconductedourauditinaccordancewithInternationalStandardsonAuditing(ISAs).Ourresponsibilities underthosestandardsarefurtherdescribedintheAuditor’sResponsibilitiesfortheAuditoftheFinancial Statementssectionofourreport.WeareindependentoftheCompanyandtheGroupasrequiredby relevantlawsandregulationsinNorwayandtheInternationalEthicsStandardsBoardforAccountants’ InternationalCodeofEthicsforProfessionalAccountants(includingInternationalIndependenceStandards) (IESBACode),andwehavefulfilledourotherethicalresponsibilitiesinaccordancewiththese requirements.Webelievethattheauditevidencewehaveobtainedissufficientandappropriatetoprovide abasisforouropinion.
OtherInformation TheBoardofDirectorsandtheManagingDirector(management)areresponsiblefortheinformationinthe BoardofDirectors’reportandtheotherinformationaccompanyingthefinancialstatements.Theother informationcomprisesinformationintheannualreport,butdoesnotincludethefinancialstatementsand ourauditor’sreportthereon.Ouropiniononthefinancialstatementsdoesnotcovertheinformationinthe BoardofDirectors’reportnortheotherinformationaccompanyingthefinancialstatements.
Inconnectionwithourauditofthefinancialstatements,ourresponsibilityistoreadtheBoardofDirectors’ reportandtheotherinformationaccompanyingthefinancialstatements.Thepurposeistoconsiderifthere ismaterialinconsistencybetweentheBoardofDirectors’reportandtheotherinformationaccompanying thefinancialstatementsandthefinancialstatementsorourknowledgeobtainedintheaudit,orwhetherthe BoardofDirectors’reportandtheotherinformationaccompanyingthefinancialstatementsotherwise appeartobemateriallymisstated.WearerequiredtoreportifthereisamaterialmisstatementintheBoard
PricewaterhouseCoopersAS,Kanalsletta8,Postboks8017,NO-4068Stavanger T:02316,org.no.:987009713MVA,www.pwc.no Statsautoriserterevisorer,medlemmeravDennorskeRevisorforeningogautorisertregnskapsførerselskap
ofDirectors’reportortheotherinformationaccompanyingthefinancialstatements.Wehavenothingto reportinthisregard.
Basedonourknowledgeobtainedintheaudit,itisouropinionthattheBoardofDirectors’report isconsistentwiththefinancialstatementsand containstheinformationrequiredbyapplicablestatutoryrequirements.
ResponsibilitiesofManagementfortheFinancialStatements ManagementisresponsibleforthepreparationoffinancialstatementsoftheCompanythatgiveatrueand fairviewinaccordancewiththeNorwegianAccountingActandaccountingstandardsandpractices generallyacceptedinNorway,andforthepreparationoftheconsolidatedfinancialstatementsoftheGroup thatgiveatrueandfairviewinaccordancewithIFRSAccountingStandardsasadoptedbytheEU. Managementisresponsibleforsuchinternalcontrolasmanagementdeterminesisnecessarytoenablethe preparationoffinancialstatementsthatarefreefrommaterialmisstatement,whetherduetofraudorerror.
Inpreparingthefinancialstatements,managementisresponsibleforassessingtheCompany’sandthe Group’sabilitytocontinueasagoingconcern,disclosing,asapplicable,mattersrelatedtogoingconcern. ThefinancialstatementsoftheCompanyusethegoingconcernbasisofaccountinginsofarasitisnotlikely thattheenterprisewillceaseoperations.TheconsolidatedfinancialstatementsoftheGroupusethegoing concernbasisofaccountingunlessmanagementeitherintendstoliquidatetheGrouportocease operations,orhasnorealisticalternativebuttodoso.
Auditor’sResponsibilitiesfortheAuditoftheFinancialStatements
Ourobjectivesaretoobtainreasonableassuranceaboutwhetherthefinancialstatementsasawholeare freefrommaterialmisstatement,whetherduetofraudorerror,andtoissueanauditor’sreportthatincludes ouropinion.Reasonableassuranceisahighlevelofassurance,butisnotaguaranteethatanaudit conductedinaccordancewithISAswillalwaysdetectamaterialmisstatementwhenitexists.Misstatements canarisefromfraudorerrorandareconsideredmaterialif,individuallyorinaggregate,theycould reasonablybeexpectedtoinfluencetheeconomicdecisionsofuserstakenonthebasisofthesefinancial statements.ForfurtherdescriptionofAuditor’sResponsibilitiesfortheAuditoftheFinancialStatements referenceismadeto:https://revisorforeningen.no/revisjonsberetninger
Stavanger,15March2024
PricewaterhouseCoopersAS
RoyHenrikHeggelund StateAuthorisedPublicAccountant (Thisdocumentissignedelectronically)
