Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Bavnehøjvej 5 6700 Esbjerg 2022-01-01 2022-12-31 2021-01-01 2021-12-31 39906384 TKRV Holding ApS Sahara 4 6700 Esbjerg 2018-10-01 Esbjerg EY Godkendt Revisionspartnerselskab 30700228 Bavnehøjvej 5 6700 Esbjerg Danmark +45 73 23 30 00 2023-06-20 Tonny Klein Regnskabsklasse C, mellemstor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion true 2023-06-20 2023-06-20 CaseWare Working Papers Esbjerg Tonny Klein Rune Værndal Esbjerg Morten Østergaard Koch Mads Klausen State Authorised Public Accountant mne35420 State Authorised Public Accountant mne46588 45091000 58670000 21621000 -3658000 6933000 21038000 Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) Earnings before interest, taxes, depreciation and amortisation (EBITDA) -906000 15126000 -1228000 -636000 -449000 -1031000 826000 11015000 45449000 34698000 -5160000 -3684000 -12646000 0 13636000 12809000 5432000 25026000 -14156000 -3680000 8709000 -21231000 1002000 -83000 -15000 115000 Total cash flows Total cash flows Total cash flows Total cash flows Total cash flows 20.5 -18.6 -2.3 35.5 12.9 7.4 21 25.9 100.1 -85.8 6.2 150.9 61 54 87736000 40225000 -8000 -8000 66115000 43883000 0 0 6746000 6241000 0 0 14875000 -9899000 -8000 -8000 0 0 7668000 -5733000 1228000 636000 0 2000 13647000 -10535000 7660000 -5743000 2699000 -2337000 -2000 -2000 10948000 -8198000 7662000 -5741000 -3286000 2457000 -8198000 6954000 2648000 0 0 57000 114000 0 0 279000 651000 0 0 7290000 3413000 0 0 12064000 12151000 0 0 1023000 1036000 0 0 13087000 13187000 0 0 0 0 11443000 3775000 298000 220000 0 0 298000 220000 11443000 3775000 20675000 16820000 11443000 3775000 6470000 6548000 0 0 6470000 6548000 0 0 50483000 21025000 0 0 6593000 3907000 0 0 0 1581000 6000 4000 74000 112000 74000 112000 2706000 869000 0 0 1256000 915000 0 0 61112000 28409000 80000 116000 1019000 17000 619000 17000 68601000 34974000 699000 133000 89276000 51794000 12142000 3908000 50000 50000 50000 50000 0 0 11373000 3705000 8633000 3771000 -2742000 64000 2800000 0 2800000 0 4903000 1617000 0 0 16386000 5438000 11481000 3819000 1654000 0 0 0 1654000 0 0 0 2800000 0 0 0 460000 0 0 0 5530000 5000000 0 0 1925000 2925000 0 0 10715000 7925000 0 0 2919000 0 0 0 12716000 22215000 0 0 10534000 2084000 0 0 19581000 4405000 0 0 0 0 635000 62000 11809000 9727000 26000 27000 2962000 0 0 0 60521000 38431000 661000 89000 71236000 46356000 661000 89000 89276000 51794000 12142000 3908000 50000 3771000 0 1617000 4862000 2800000 3286000 50000 8633000 2800000 11483000 4903000 50000 3705000 64000 0 7668000 -2806000 2800000 50000 11373000 -2742000 2800000 10948000 -8198000 10428000 5393000 -6693000 -7927000 14683000 -10732000 1171000 608000 -574000 -2921000 14086000 -8419000 5363000 416000 5160000 3684000 245000 2291000 -10278000 -1809000 6942000 6061000 -9499000 4084000 171000 0 78000 0 -2806000 10145000 1002000 -83000 17000 100000 1019000 17000 60885000 40335000 0 0 4276000 2877000 0 0 954000 671000 0 0 66115000 43883000 0 0 98 67 0 0 2699000 -2337000 -2000 -2000 2699000 -2337000 -2000 -2000 13559000 1471000 1860000 5363000 0 0 450000 0 0 19372000 1471000 1860000 10911000 1357000 1209000 1507000 57000 372000 12418000 1414000 1581000 6954000 57000 279000 38667000 3503000 4855000 305000 143000 0 -450000 0 42929000 3808000 26516000 2467000 4492000 318000 143000 0 30865000 2785000 12064000 1023000 673000 220000 78000 298000 298000 70000 70000 3705000 7668000 11443000 Offshore Capital Partners ApS Esbjerg 70 SubC Partner A/S Esbjerg 70 JibFlex A/S Esbjerg 70 69319000 16486000 0 0 -1581000 -2277000 -4000 -2000 1654000 5600000 2800000 2800000 0 579000 119000 460000 0 5530000 0 5530000 0 1925000 0 1925000 0 2800000 0 7668000 -5733000 -2806000 -8000 6746000 6241000 245000 -853000 -1228000 -636000 2699000 -2337000 -78000 172000 -25872000 -10521000 -19101000 -2766000 Today, the Executive Board has discussed and approved the annual report of TKRV Holding ApS for the financial year 1 January - 31 December 2022. The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the financial position of the Group and the Company at 31 December 2022 and of the results of the Group's and the Company's operations and of the consolidated cash flows for the financial year 1 January - 31 December 2022. Further, in our opinion, the Management's review gives a fair review of the matters discussed in the Management's review. We recommend that the annual report be approved at the annual general meeting. To the shareholders of TKRV Holding ApS We have audited the consolidated financial statements and the parent company financial statements of TKRV Holding ApS for the financial year 1 January - 31 December 2022, which comprise income statement, balance sheet, statement of changes in equity and notes, including accounting policies, for the Group and the Parent Company, and a consolidated cash flow statement. The consolidated financial statements and the parent company financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the consolidated financial statements and the parent company financial statements give a true and fair view of the financial position of the Group and the Parent Company at 31 December 2022, and of the results of the Group's and Parent Company's operations as well as the consolidated cash flows for the financial year 1 January - 31 December 2022 in accordance with the Danish Financial Statements Act. We conducted our audit in accordance with International Standards on Auditing (ISAs) and the additional requirements applicable in Denmark. Our responsibilities under those standards and requirements are further described in the "Auditor's responsibilities for the audit of the consolidated financial statements and the parent Company financial statements" (herinafter collectively referred to as "the financial statements") section 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 the Group in accordance with the International Ethics Standards Board for Accountants' International Code of Ethics for Professional Accountants (IESBA Code) and the additional ethical requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code. Management is responsible for the preparation of consolidated financial statements and parent company financial statements that give a true and fair view in accordance with the Danish Financial Statements Act and for such internal control as Management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, Management is responsible for assessing the Group's and the Parent Company's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting in preparing the financial statements unless Management either intends to liquidate the Group or the Parent Company or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance as to 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 level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of the financial statements. As part of an audit conducted in accordance with ISAs and the additional requirements applicable in Denmark, we exercise professional judgement and maintain professional scepticism throughout the audit. We also: Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations or the override of internal control. Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Group's and the Parent Company's internal control. Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by Management. Conclude on the appropriateness of Management's use of the going concern basis of accounting in preparing the financial statements and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Group's and the Parent 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. However, future events or conditions may cause the Group and the Parent Company to cease to continue as a going concern. Evaluate the overall presentation, structure and contents of the financial statements, including the note disclosures, and whether the financial statements represent the underlying transactions and events in a manner that gives a true and fair view. Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion. We communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. Management is responsible for the Management's review. Our opinion on the financial statements does not cover the Management's review, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the Management's review and, in doing so, consider whether the Management's review is materially inconsistent with the financial statements or our knowledge obtained during the audit, or otherwise appears to be materially misstated. Moreover, it is our responsibility to consider whether the Management's review provides the information required under the Danish Financial Statements Act. Based on the work we have performed, we conclude that the Management's review is in accordance with the financial statements and has been prepared in accordance with the requirements of the Danish Financial Statements Act. We did not identify any material misstatement of the Management's review. The financial ratios stated under "Financial highlights" have been calculated as follows: Ordinary operating profit/loss Profit/loss before financial items adjusted for other operating income and other operating expenses Return on assets Profit/loss from operating activites x 100 Average assets Equity ratio Equity excl. non-controlling interests, year-end x 100 Total equity and liabilities, year-end Return on equity Profit/loss for the year after tax ex. non-controlling interests x 100 Average equity ex. non-controlling interests TKRV Holding ApS owns shares in Offshore Capital Partners ApS, which invested in SubC Partner A/S at 3 October 2018. The SubC Partner Group is engaged in the Oil & Gas and renewables sectors. SubC is a full scope offshore contractor focusing on innovative technological approaches to the challenges of operating offshore installations. Main activities SubC Partner A/S (SubC) is engaged in the Danish Energy Sectors. SubC is a full scope Contractor focusing on innovative technological approaches to deliver efficient and sustainable services. As a full scope contractor SubC Engineer, Manufacture, Repair and Maintain Process Modules, Structures, Process Equipment and supply complete Turnkey Solutions for the entire energy sector. SubC Partner A/S has in-house competences that covers the entire value chain from early Engineering through to installations and commissioning. Underwater activities Further to being a full scope contractor SubC also operates a highly technological subsea business. Using our proprietary know-how, we develop Subsea Robots and using them to perform Inspections and Operations on structures, pipelines and risers. For tough operations we have developed and operate a Crawling Robot as an innovative, safe, and cost-effective technology platform for operations and inspections in the hazardous splash zone environment. Service and maintenance SubC Partner A/S operates a division focusing on offshore operation and maintenance. Based on our strong project minded legacy we have solved maintenance and operation tasks on a daily basis in the Danish offshore industry. Leveraging our knowhow and workforce we solve the technical challenges to help keep Denmark energy inde-pendent. The Group has in 2022 seen a return to normal in the activities in all areas of the Group after the extended period follow the global pandemic. In October the Group was awarded a long-term maintenance contract in Denmark along with our partner Altrad. The contract was initiated on 1 October 2022 with a 3-month ramp up to operational levels. Profit after tax amounted to DKK 10,948 thousand compared to DKK -8,198 thousand last year. EBITDA in 2022 was DK 21,621 thousand. Equity at 31 December 2022 amounted to DKK 16,386 thousand compared to DKK 5,438 thousand at 31 December 2021. Management considers the activity and result for 2022 higher than expected and as satisfactory. Development of new concept/products The Group continuously reviews existing product lines and optimize the value propositions related to these. The Group is currently developing below solutions. ACOMAR: The Group is currently researching a next generation autonomous inspection robot. This research project is jointly developed with the University of Aalborg and other specialists. The aim of the project is to develop a sensing next generation inspection robot that will greatly autonomize the inspection and reduce the human workload and specialist knowledge involved today. SubC Coala Cleaning Robot: In collaboration with Shell Deepsea Robotics, we are developing a new Robot that aims to make cleaning of subsea risers a task so simple that the equipment is simply installed on every FPSO/platform without the need to involve outside assistance when cleaning. The design is grounded in the original Crawler technology. A pathfinder prototype has already been built and the next seaworthy prototype is being brought online after the summer. Initial contact has shown a great potential for this product outside Shell also. The matured product is on track for summer campaign in 2022 with a new customer. Unchanged strategy The Group expects unchanged execution of the strategy in 2022. The Group will continue to establish its strong position as a service provider delivering a long value chain from engineering to installation/operation and commissioning - A 360-degree position that continuingly is sought for in the market. The focus will be on offshore oil/gas, renewables, and other energy sectors, including "power-to-x". The level of knowledge achieved by the Group is based on competence development, supplementary education, retention of staff and an inspiring, developing, and challenging working environment, as well as ongoing employment of people with complementary expertise. The Group continuously develops the level of knowledge so that it becomes a positive part of the Group image and amplifies the market opportunities for the Group. In addition, the Group owns worldwide Intellectual Property Rights. General risks The offshore Wind and the Oil and Gas industries are characterized by a cyclical level of activity. Furthermore, the activity level is highly influenced by political discussions and legislation. The activities in the Group are spread across several business areas, reducing dependence of individual segments. It is also essential to the Group to be ahead of the technological development within all business areas. Financial risks Due to the level of Group's interest bearing debt, moderate changes in the interest rates will only have minor effect on the Groups's earnings. The ongoing operations are exposed to currency exchange risks. The Group invoices in DKK and EUR, whereas a large share of purchasing is in DKK and EUR. Currency risks are mainly hedged by purchasing and invoicing in the same currency. The Group’s vision is to provide the most innovative, flexible, and cost-effective solutions in the Energy business. With focus on high level of expertise, a strong innovative approach, and focus on highly technical solutions, the Group contribute to a reduced environmental footprint. The Group is committed to achieving the best Health, Safety & Environment performance in the industry and promote a culture that continuously improves Health, Safety & Environment performance. To support the Group’s goals within Health, Safety, Environment and Quality, the Group is working according to a DS/EN ISO 9001:2015 certified Management system and a DS/EN ISO14001:2015 & DS/EN ISO 45001:2018 certified Environment and Occupational Health & Safety system. The Group has set out ambitious objectives in relation to Health, Safety and Environment. Amongst these are: •ZERO long-term sick (Work Related) •ZERO Lost Time Injury – LTI •ZERO impact to the environment The Group has no research activities. The development activities include new welding procedures and technical solutions within splashzone and subsea activities. From the beginning of 2023 the JibFlex business has been established as an independent company. No further events materially affecting the Group's financial position have occurred subsequent to the financial year-end. The Group enters 2023 with a strong organization, a clear strategy and a strong backlog of projects. Based on that Management expects the same or a slightly higher activity level in 2023 as in 2022. Earnings for 2023 are expected to be in line with or slightly below 2022. The share capital comprises 50,000 shares of DKK 1 each. All shares rank equally. The parent's share capital has remained unchanged DKK 50 thousand since the establishment. The annual report of TKRV Holding ApS for 2022 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to medium-sized reporting class C entities. The accounting policies used in the preparation of the financial statements are consistent with those of last year. Assets are recognised in the balance sheet when it is probable that future economic benefits will flow to the Company and the value of such assets can be reliably measured. Liabilities are recognised in the balance sheet when an outflow of economic benefits is probable and the value of such liabilities can be reliably measured. On initial recognition, assets and liabilities are measured at cost. Subsequently, assets and liabilities are measured as described below for each individual item. In recognising and measuring assets and liabilities, any gains, losses and risks occurring prior to the presentation of the annual report that evidence conditions existing at the balance sheet date are taken into account. Income is recognised in the income statement as earned. Moreover, costs incurred to generate the year's earnings are recognised, including depreciation, amortisation, impairment losses and provisions as well as reversals as a result of changes in accounting estimates of amounts that were previously recognised in the income statement. Reporting currency The financial statements are presented in Danish kroner (DKK'000). The consolidated financial statements comprise the Parent Company and subsidiaries controlled by the Parent Company. Control means a parent company’s power to direct a subsidiary’s financial and operating policy decisions. Besides the above power, the parent company should also be able to yield a return from its investment. In assessing if the parent company controls an entity, de facto control is taken into consideration as well. The existence of potential voting rights which may currently be exercised or converted into additional voting rights is considered when assessing if an entity can become empowered to direct another entity’s financial and operating decisions. On initial recognition, non-controlling interests are measured at the fair value of the non-controlling interests' equity interest. Goodwill relating to the non-controlling interests' share of the acquiree is recognised. Recently acquired or formed entities are recognised in the consolidated financial statements from the date of acquisition or formation. Entities sold or otherwise disposed of are recognised in the consolidated income statement until the date of disposal. Comparative figures are not restated in respect of recently acquired or sold entities. Gains or losses on disposal of subsidiaries and associates are made up as the difference between the sales price and the carrying amount of net assets at the date of disposal plus non-amortised goodwill and anticipated selling costs. Corporate acquisitions are accounted for using the purchase method according to which the acquired entity identifiable assets and liabilities are measured at fair value at the date of acquisition. Restructuring costs recognised in the acquired entity before the date of acquisition and not agreed as part of the acquisition are part of the acquisition balance sheet and, hence, the calculation of goodwill. Costs relating to restructuring decided by the acquiring entity must be recognised in the income statement. The tax effect of the restatement of assets and liabilities is taken into account. Any excess of the cost over the fair value of the identifiable assets and liabilities acquired (goodwill) is recognised as intangible assets and amortised on a systematic basis in the income statement based on an individual assessment of the useful life of the asset. Negative differences (negative goodwill) are recognised in the income statement at the date of acquisition. Goodwill and negative goodwill from acquired entities may be adjusted until the end of the year of acquisition. On initial recognition, transactions denominated in foreign currencies are translated at the exchange rate at the transaction date. Foreign exchange differences arising between the exchange rates at the transaction date and the date of payment are recognised in the income statement as financial income or financial expenses. Receivables and payables and other monetary items denominated in foreign currencies are translated at the exchange rate at the balance sheet date. The difference between the exchange rates at the balance sheet date and the date at which the receivable or payable arose or was recognised in the most recent financial statements is recognised in the income statement as financial income or financial expenses. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Income from the sale of goods for resale and finished goods is recognised in revenue when the most significant rewards and risks have been transferred to the buyer and provided the income can be measured reliably and payment is expected to be received. The date of the transfer of the most significant rewards and risks is based on standardised terms of delivery based on Incoterms® 2020. Income from construction contracts involving a high degree of customisation is recognised as revenue by reference to the stage of completion. Accordingly, revenue corresponds to the market value of the contract work performed during the year (percentage-of-completion method). This method is used where the total income and expenses and the degree of completion of the contract can be measured reliably. Revenue is measured at the fair value of the agreed consideration excluding VAT and taxes charged on behalf of third parties. All discounts and rebates granted are recognised in revenue. The items revenue, cost of sales, other operating income and external expenses have been aggregated into one item in the income statement called gross profit/loss in accordance with section 32 of the Danish Financial Statements Act. Other operating income comprise items of a secondary nature relative to the Company's core activities, including gains on the sale of fixed assets, grants and governmental grants. Cost of sales includes the cost of goods used in generating the year's revenue. Other external expenses include the year's expenses relating to the Company's core activities, including expenses relating to distribution, sale, advertising, administration, premises, bad debts, payments under operating leases, etc. Staff costs include wages and salaries, including compensated absence and pension to the Company's employees, as well as other social security contributions, etc. The item is net of refunds from public authorities. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. The cost net of the expected residual value for completed development projects and acquired IP rights is amortised over the expected useful life. Acquired IP rights include patents, rights and licences. Goodwill is amortised over the expected economic life of the asset, measured by reference to Management’s experience in the individual business segments. Goodwill is amortised on a straight-line basis over the amortisation period, which is 5 years. The amortisation period is based on expected return on investment. The basis of amortisation/depreciation, which is calculated as cost less any residual value, is amortised/depreciated on a straight line basis over the expected useful life. The expected useful lives of the assets are as follows: Completed development projects 5-7 years Acquired intangible assets 5-7 years Goodwill 5 years Fixtures and fittings, other plant and equipment 2-10 years Leasehold improvements 5 years The income statement includes the proportional share of the underlying companies' profit or loss after elimination of internal profit/loss and after tax. In subsidiaries, the full elimination of internal profit and loss is carried out without regard to ownership shares., only proportional elimination of profit and loss is carried out, taking into account ownership shares. Financial income and expenses are recognised in the income statement at the amounts that relate to the financial reporting period. The items comprise interest income and expenses, e.g. from group entities and associates, declared dividends from other securities and investments, financial expenses relating to finance leases, realised and unrealised capital gains and losses relating to other securities and investments, exchange gains and losses and amortisation of financial assets and liabilities. The parent company is covered by the Danish rules on mandatory joint taxation of the Group's Danish subsidiaries. Subsidiaries are included in the joint taxation arrangement from the date at which they are included in the consolidated financial statements and up to the date when they are no longer consolidated. The parent company acts as management company for the joint taxation arrangement and consequently settles all corporate income tax payments with the tax authorities. On payment of joint taxation contributions, the Danish corporate income tax charge is allocated between the jointly taxed entities in proportion to their taxable income. Entities with tax losses receive joint taxation contributions from entities that have been able to use the tax losses to reduce their own taxable income. Tax for the year, which comprises the current income tax charge, joint taxation contributions and deferred tax adjustments, including adjustments arising from changes in tax rates, is recognised in the income statement as regards the portion that relates to the profit/loss for the year and directly in equity as regards the portion that relates to entries directly in equity. Goodwill is amortised over the expected economic life of the asset, measured by reference to Management’s experience in the individual business segments. Goodwill is amortised on a straight-line basis over the amortisation period, which is 5 years. Other intangible assets include development projects and other acquired intangible rights, including software licences, distribution rights and development projects. Other intangible assets are measured at cost less accumulated amortisation and impairment losses. Development costs comprise expenses, salaries and amortisation directly or indirectly attributable to development activities. Development projects that are clearly defined and identifiable, where the technical feasibility, sufficient resources and a potential future market or development opportunities are identifiable and where the Company intends to produce, market or use the project, are recognised as intangible assets provided that the cost can be measured reliably and that there is sufficient assurance that future earnings can cover production costs, selling costs and administrative expenses and development costs. Other development costs are recognised in the income statement as incurred. Development costs that are recognised in the balance sheet are measured at cost less accumulated amortisation and impairment losses. On completion of a development project, development costs are amortised on a straight-line basis over the estimated useful life. The amortisation period is 5-7 years. Property, plant and equipment Items of property, plant and equipment are measured at cost less accumulated depreciation and impairment losses. Cost includes the acquisition price and costs directly related to the acquisition until the time at which the asset is ready for use. The cost of self constructed assets includes the cost of direct materials and labour, etc. directly used in the production process and a portion of the relating production overheads. Gains or losses are calculated as the difference between the selling price less selling costs and the carrying amount at the date of disposal. Gains and losses from the disposal of property, plant and equipment are recognised in the income statement as other operating income or other operating expenses. The Company has chosen IAS 17 as interpretation for classification and recognition of leases. On initial recognition, leases for assets that transfer substantially all the risks and rewards incident to the ownership to the Company (finance leases) are measured in the balance sheet at the lower of fair value and the present value of the future lease payments. In calculating the net present value, the interest rate implicit in the lease or the incremental borrowing rate is used as the discount factor. Assets held under finance leases are subsequently accounted for in the same way as the Company's other assets. The capitalised residual lease liability is recognised in the balance sheet as a liability, and the interest element of the lease payment is recognised in the income statement over the term of the lease. Leases that do not transfer substantially all the risks and rewards incident to the ownership to the Company are classified as operating leases. Payments relating to operating leases and any other rent agreements are recognised in the income statement over the term of the lease. The Company's aggregate liabilities relating to operating leases and other rent agreements are disclosed under "Contingent liabilities". Deposits are recognised at cost. On initial recognition, investments in subsidiaries is measured at cost and subsequently at the proportionate share of the entities’ net asset values calculated in accordance with the parent company’s accounting policies minus or plus any residual value of positive or negative goodwill calculated in accordance with the purchase method of accounting. Net revaluations of investments in subsidiaries are transferred to the net revaluation reserve according to the equity method where the carrying amount exceeds the acquisition cost. Dividend received is deduced from the carrying amount. The carrying amount of intangible assets, property, plant and equipment and investments in subsidiaries is assessed for impairment on an annual basis. Impairment tests are conducted on assets or groups of assets when there is evidence of impairment. The carrying amount of impaired assets is reduced to the higher of the net selling price and the value in use (recoverable amount). The recoverable amount is the higher of the net selling price of an asset and its value in use. The value in use is calculated as the present value of the expected net cash flows from the use of the asset or the group of assets and the expected net cash flows from the disposal of the asset or the group of assets after the end of the useful life. Previously recognised impairment losses are reversed when the reason for recognition no longer exists. Impairment losses on goodwill are not reversed. Inventories are measured at cost in accordance with the FIFO method. Where the net realisable value is lower than cost, inventories are written down to this lower value. The net realisable value of inventories is calculated as the sales amount less costs of completion and expenses required to effect the sale and is determined taking into account marketability, obsolescence and development in the expected selling price. The cost of raw materials and consumables comprises the cost of acquisition plus delivery costs. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost. An impairment loss is recognised if there is objective evidence that a receivable or a group of receivables is impaired. If there is objective evidence that an individual receivable has been impaired, an impairment loss is recognised on an individual basis. Impairment losses are calculated as the difference between the carrying amount of the receivables and the present value of the expected cash flows, including the realisable value of any collateral received. The effective interest rate for the individual receivable or portfolio is used as discount rate. Contract work in progress for third parties are measured at the market value of the work performed less progress billings. The market value is calculated based on the stage of completion at the balance sheet date and the total expected income from the relevant contract. The stage of completion is calculated based on the expenses incurred relative to the expected total expenses relating to the relevant contract. Where the outcome of contract work in progress cannot be estimated reliably, the market value is measured at the lower of expenses incurred and the net realisable value. Where the total expenses relating to the work in progress are expected to exceed the total market value, the expected loss is recognised as a loss-making agreement under "Provisions" and is expensed in the income statement. The value of work in progress less progress billings is classified as assets when the selling price exceeds progress billings and as liabilities when progress billings exceed the market value. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Cash comprise cash. Reserve for net revaluation according to the equity method The net revaluation reserve according to the equity method includes net revaluations of investments in subsidiaries relative to cost. The reserve can be eliminated in case of losses, realisation of investments or a change in accounting estimates. The reserve cannot be recognised at a negative amount. Proposed dividends Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year are presented as a separate item under "Equity". Dividend proposed for the year is recognised as a liability once adopted at the annual general meeting (declaration date). Dividends expected to be distributed for the financial year are presented as a separate item under "Equity". Current tax payables and receivables are recognised in the balance sheet as the estimated income tax charge for the year, adjusted for prior-year taxes and tax paid on account. Deferred tax is measured according to the liability method on all temporary differences between the carrying amount and the tax base of assets and liabilities. Where alternative tax rules can be applied to determine the tax base, deferred tax is measured based on Management's intended use of the asset or settlement of the liability, respectively. Deferred tax is measured according to the tax rules and at the tax rates applicable at the balance sheet date when the deferred tax is expected to crystallise as current tax. Deferred tax assets are recognised at the expected value of their utilisation; either as a set-off against tax on future income or as a set-off against deferred tax liabilities in the same legal tax entity. Changes in deferred tax due to changes in the tax rate are recognised in the income statement. As management company for all the entities in the joint taxation arrangement, the parent company is liable for payment of the subsidiaries' income taxes vis à vis the tax authorities as the subsidiaries pay their joint taxation contributions. Joint taxation contributions payable or receivable are recognised in the balance sheet as income tax receivables or payables. Financial liabilities are recognised at the date of borrowing at the net proceeds received less transaction costs paid. On subsequent recognition, financial liabilities are measured at amortised cost, corresponding to the capitalised value, using the effective interest rate. Accordingly, the difference between the proceeds and the nominal value is recognised in the income statement over the term of the loan. Financial liabilities also include the capitalised residual lease liability in respect of finance leases. Other liabilities are measured at net realisable value. Liabilities that fall due later than a year from balance sheet date are classified as non-current liabilities. Lease liabilities Leases for non-current assets that transfer substantially all the risks and rewards incident to ownership to the Company (finance leases) are initially recognised in the balance sheet at cost, corresponding to the lower of fair value and the net present value of furtue lease payments. In calculating the net present value of the future lease payments, the interest rate implicit in the lease or the incremental borrowing rate is used as the discount factor. Assets held under finance leases are subsequently depreciated as the Company's other non-current assets. The capitalised residual lease obligation is recognised in the balance sheet as the liability, and the interest element of the lease payment is recognised in the income statement over the term of the lease. All other leases are considered operating leases. Payments relating to operating leases and any other leases are recognised in the income statement over the term of the lease. The Company's total obligation relating to operating leases and other leases is disclosed in contingencies, etc. Deferred income Deferred income recognised as a liability comprises payments received concerning income and grants related to subsequent financial years. The cash flow statement shows the Company's net cash flows broken down according to operating, investing and financing activities, the year's changes in cash and cash equivalents as well as the cash and cash equivalents at the beginning and the end of the year. Cash flows from operating activities are calculated as the profit/loss for the year adjusted for non cash operating items, changes in working capital and paid corporate income tax. Cash flows from investing activities comprise payments in connection with acquisitions and disposals of entities and activities and of intangible assets, property, plant and equipment and investments. Cash flows from financing activities comprise changes in the size or composition of the Company's share capital and related expenses as well as raising of loans, repayment of interest bearing debt and payment of dividends to shareholders. Cash and cash equivalents comprise cash, short term bank loans and short term securities which are readily convertible into cash and which are subject only to insignificant risks of changes in value. From the beginning of 2023 the JibFlex business has been established as an independent company. No further events materially affecting the Group's financial position have occurred subsequent to the financial year-end. By reference to section 98b(3), (ii), of the Danish Financial Statements Act, remuneration to the group Management is not disclosed. Completed development projects Completed development projects include different concepts, systems and innovative technology platforms for operations and inspections in the hazardous Splash Zone environemnt. All development projects have been completed and launched to market. Prepayments include accrual of expenses relating to subsequent financial years, including insurance, plocies, rent, staffhealthcare and subscriptions. Deferred income consists of payments received from customers and grants related to subsequent financial years. Contingent liabilities Group The Group has entered into leases with a combined lease payment of DKK 1,738 thousand. The remaining term of the leases is 3-12 months. As management company, the Company is jointly taxed with other Danish group entities. The Company is jointly and severally with other jointly taxed group entities for payment of income taxes and withholding taxes falling due for payment in the group of jointly taxed entities. The Group has provided a company charge of DKK 39,000 thousand as collateral for bank loans, etc. of DKK 18,315 thousand. The company charge comprises unsecured claims, inventories, property, plant and equipment and intangible assets with a carrying amount of DKK 83,644 thousand at 31 December 2022. The parent Company has not placed any assets or other as security for loans at 31 December 2022. Related party transactions The Company solely discloses related party transactions that have not been carried out on an arm's length basis, cf. section 98c(7) of the Danish Financial Statements Act. 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