13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 1 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 2 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 3 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 4 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 1 13255377 2022-01-01 2022-12-31 13255377 2023-01-01 2023-12-31 13255377 2022-01-01 2022-12-31 cmn:ConsolidatedMember 13255377 2022-12-31 13255377 2023-12-31 13255377 2023-12-31 cmn:ConsolidatedMember 13255377 2022-12-31 cmn:ConsolidatedMember 13255377 2022-12-31 fsa:ContributedCapitalMember 13255377 2022-12-31 fsa:RevaluationReserveMember 13255377 2022-12-31 fsa:SharePremiumMember 13255377 2022-12-31 fsa:RetainedEarningsMember 13255377 2023-01-01 2023-12-31 fsa:ContributedCapitalMember 13255377 2023-01-01 2023-12-31 fsa:RevaluationReserveMember 13255377 2023-01-01 2023-12-31 fsa:SharePremiumMember 13255377 2023-01-01 2023-12-31 fsa:RetainedEarningsMember 13255377 2023-12-31 fsa:ContributedCapitalMember 13255377 2023-12-31 fsa:RevaluationReserveMember 13255377 2023-12-31 fsa:SharePremiumMember 13255377 2023-12-31 fsa:RetainedEarningsMember 13255377 2022-12-31 cmn:ConsolidatedMember fsa:ContributedCapitalMember 13255377 2022-12-31 cmn:ConsolidatedMember fsa:RevaluationReserveMember 13255377 2022-12-31 cmn:ConsolidatedMember fsa:SharePremiumMember 13255377 2022-12-31 cmn:ConsolidatedMember fsa:RetainedEarningsMember 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember fsa:ContributedCapitalMember 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember fsa:RevaluationReserveMember 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember fsa:SharePremiumMember 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember fsa:RetainedEarningsMember 13255377 2023-12-31 cmn:ConsolidatedMember fsa:ContributedCapitalMember 13255377 2023-12-31 cmn:ConsolidatedMember fsa:RevaluationReserveMember 13255377 2023-12-31 cmn:ConsolidatedMember fsa:SharePremiumMember 13255377 2023-12-31 cmn:ConsolidatedMember fsa:RetainedEarningsMember 13255377 2022-01-01 2022-12-31 cmn:ConsolidatedMember 1 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 1 13255377 2022-01-01 2022-12-31 cmn:ConsolidatedMember 2 13255377 2023-01-01 2023-12-31 cmn:ConsolidatedMember 2 13255377 2021-12-31 cmn:ConsolidatedMember iso4217:DKK xbrli:pure Today, the Executive Management and Board of Directors have discussed and adopted the Annual Report for 2023 of Mesco Denmark A/S. The Annual Report has been prepared in accordance with the Danish Financial Statements Act. In our opinion, the Financial Statements give a true and fair view of the Group’s and Company’s assets, liabilities and financial position at 31 December 2023, as well as of the results of the Group’s and the Company’s operations and the Group’s consolidated cash flows for the financial year ended 31 December 2023. In addition, it is our opinion that the Management Report gives a true and fair view of the development in the Group’s and the Company’s operations and economic conditions, the year’s result and of the Group’s and the Company’s financial position. It is recommended that the Annual Report be approved at the Annual General Meeting. Allerød, Artur Bugsgang Managing Director Toshihiko Uchida Michael Hedegaard Lyng Artur Bugsgang Chairman To the Shareholder of Mesco Denmark A/S We have audited the consolidated Financial Statements and the Parent Company Financial Statements of Mesco Denmark A/S for the financial year 1 January – 31 December 2023 comprising income statement, balance sheet, statement of changes in equity and notes, including accounting policies, for the Group as well as for the Parent Company and a cash flow statement for the Group. The consolidated Financial Statements and 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 Group's and the Parent Company's assets, liabilities and financial position at 31 December 2023 and of the results of the Group's and the Parent Company's operations and consolidated cash flows for the financial year 1 January – 31 December 2023 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" section of our report. We are independent of the Group in accordance with the International Ethics Standards Board for Accountants' Code of Ethics for Professional Accountants (IESBA Code) and the additional requirements applicable in Denmark, and we have fulfilled our other ethical responsibilities in accordance with these rules and requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. 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 that Management determines is necessary to enable the preparation of consolidated Financial Statements and Parent Company Financial Statements that are free from material misstatement, whether due to fraud or error. In preparing the consolidated Financial Statements and the Parent Company 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 consolidated Financial statements and the Parent Company Financial Statements unless Management either intends to liquidate the Group or the 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 consolidated Financial Statements and the Parent Company 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 in Denmark will always detect a material misstatement when it exists. Misstatements may 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 Financial Statement users made on the basis of these consolidated Financial Statements and Parent Company 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 skepticism throughout the audit. We also — identify and assess the risks of material misstatement of the consolidated Financial Statements and the Parent Company 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 consolidated Financial Statements and the Parent Company 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 consolidated Financial Statements and the Parent Company 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 Company to cease to continue as a going concern. — evaluate the overall presentation, structure and contents of the consolidated Financial Statements and the Parent Company Financial Statements, including the disclosures, and whether the consolidated Financial Statements and the Parent Company 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 consolidated Financial Statements and the Parent Company 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 consolidated Financial Statements and the Parent Company 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 consolidated Financial Statements or the Parent Company 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 consolidated Financial Statements and the Parent Company Financial Statements and has been prepared in accordance with the requirements of the Danish Financial Statement Act. We did not identify any material misstatement of the Management's review. Copenhagen KPMG Statsautoriseret Revisionspartnerselskab 25578198 Kåre Kansonen Valtersdor State Authorised Public Accountant Mesco Denmark A/S Oslo Plads 2 DK 2100 Copenhagen Ø Denmark 13255377 Mesco Denmark A/S is the parent company in the Burmesiter & Wain Scandinavian Contractor GroupCompany Name Incorporated in OwnershipParent company in the Burmeister & Wain Scandinavian Contractor A/S GroupBurmeister & Wain Scandinavian Contractor A/S* Denmark 100%Subsidiaries in the Burmeister & Wain Scandinavian Contrator A/S Sub-GroupBurmeister & Wain Caribbean Contractors Ltd The Bahamas 100%BWSC Benin SA Benin 100%BWSC Cayman Ltd. Cayman 100%BWSC Cyprus Ltd. Cyprus 100%BWSC Foreign Investments ApS Denmark 100%BWSC Generation ApS Denmark 100%BWSC Japan Ltd. Japan 100%BWSC Lebanon Construction SARL Lebanon 100%BWSC Macau Ltd. Macau 100%BWSC Mali SARL Mali 100%BWSC (Mauritius) Ltd. Mauritius 100%BWSC Panama S.A. Panama 100%BWSC Regional Services S.A. Panama 100%BWSC Lanka (Private) Ltd. Sri Lanka 100%BWSC Sweden AB Sweden 100%BWSC Generation Services Northern Ireland Ltd. United Kingdom 100%BWSC Generation Services UK Ltd. United Kingdom 100%BWSC Belgium B.V. Belgium 100%Asia Power (Private) Ltd. Sri Lanka 55%in the Burmeister & Wain Scandinavian Contrator A/S Sub-GroupRabai Operation and Maintenance Ltd. ** Kenya 51%Western Biomass Operating Company Ltd. ** United Kingdom 51%AP Operation & Maintenance Limited ** United Kingdom 50%Rabai Power Holding Ltd. United Kingdom 26%Kent Power Corporation Ltd. United Kingdom 18%Albatros Energy Mali S.A Mali 8%* The subisidiary Burmeister & Wain Scandinavian Contractor A/S has branches in the United Kingdom, Belgium and Sweden.** Mesco Danmark A/S does not have controlling influence in these companies and therefore classified as equity investments in asscociatesCompanies and branches wihtout material activites amd assets and liabilities and dormant companies are omitted form the listKEY FIGURES 2023 2022 2021 2020 2019Income Statement (DKKm):Revenue 1.302 1,033 1,245 1,814 1,609Gross profit 73 167 305 131 99Net financials -3 -5 2 -14 2Net result 66 62 92 -232 -86Balance Sheet (DKKm):Investments in fixed assets 4 5 6 32 16Total assets 1.339 1,345 1,305 1,528 1,77Cash 147 286 365 413 504Equity 766 796 714 629 680Interest-bearing debts 115 207 106 109 213Financial RatiosGross margin 6% 16% 24% 7% 6%Profit ratio 5% 6% 10% -14% -6%Equity ratio 57% 59% 55% 41% 38%Return on equity 8% 8% 14% -36% -15%According to the custom of the sector profit ratio has been calculated as the profit before tax proportional to the revenue. The calculations of the remaining financial ratios are described in the accounting policy section of the Annual Report. Mesco Denmark A/S (the Company) is a holding company with no revenue in the parent company. Main Activities The group has two main activities: • O&M • Service Further description of the activity in the subgroup is available in the 2023 annual report of Burmeister & Wain Scandinavian Contractor A/S (hereinafter BWSC), which is accessible on the homepage of BWSC (www.bwsc.com). Development in activities and finances The Group’s financial statements and the financial statements of the Parent Company show a result for the year of DKKm 66 (2022: DKKm 62) and equity at 31 December 2023 of DKKm 766 (2022: DKKm 796). The financial result exceeds the expectations stated in the Annual Report for 2022. 2024 Outlook Revenue in 2024 is expected to decrease by 7-10% compared to 2023 due to decreasing activity on the power plants operated and maintained by BWSC. The profit before tax for 2024 is expected to be in the level of DKKm 80. This is an increase compared to 2023, which is caused by an expected increase in earnings from operational activities. Furthermore, the result in 2023 has been impacted by some nonrecurring items, with a net negative impact on 2023, as mentioned in the Financial Review section. Forward looking statements like the 2024 outlook are uncertain and depend on a number of factors. Furthermore, BWSC disclaims any liability to update or adjust statements made in the Annual Report 2023 about future or possible reasons for differences between actual and anticipated results except where required by law Events after the balance sheet date No significant events subsequent to 31 December 2023, which could materially impact the financial position, have occurred. Note 22 Events after the balance sheet dateNo significant events that could materially affect the financial position at 31 December 2023 have occurred after the balance sheet date. Knowledge sharing The group is knowledge-based. People and internal processes are key resources to solve customers’ challenges in the best and most efficient way possible. Furthermore, the group continuously focuses on maintaining and developing its employees. Knowledge key figures of the group: • 643 employees • Emphasis on further education and training of the employees Order intake and backlog The order intake for 2023 amounted to DKKm 527 compared to DKKm 819 in 2022. After the restructuring initiated in 2020 no further turnkey power plant orders have been entered into. The order intake in O&M amounted to DKKm 128 compared to DKKm 548 in 2022 and in Service DKKm 395 compared to DKKm 267 in 2022. The order backlog at the end of 2023 amounted to DKKm 6,784 (2022: DKKm 6,659. The O&M order intake have met the expectation when taking into account that there will be revenue almost immediately from the projects won as these are for already operating power plants. However Service order intake was lower than expected. The service orders are typically carried out over a time period of up to 18 months and O&M orders typically run over a longer time period of up to 20 years. EBIT Result before interest and tax (operating result or EBIT) in 2023 amounted to DKKm -50. Excluding the result from turnkey power plants activity that is under closure, EBIT amounted to mDKK 12. In 2022 EBIT amounted to DKKm 25 and excluding the result from turnkey power plants activity that is under closure, EBIT amounted to DKKm 67 Uncertainties In 2014, work on two engine-based projects in the Middle East was suspended due to the client not paying the milestone payments on time. These outstanding milestone payments were paid at the end of 2014, and the suspension was lifted at the beginning of 2015. BWSC has claimed the customer for direct costs, overhead and profit. A part of the costs related to the claims have been included in the project accounts/ work in progress over the years. At the end of 2016, the taking-over-certificates (TOC) were signed by the customer. Since 2017, focus has been on reaching an agreement on the claims with the Client and the Client’s representative. Since it has not been possible to reach an agreement, BWSC decided in 2018 to file for arbitration through ICC, France. After a stay period, where the arbitration case was on hold, due to settlement negotiations with the Client and the Client’s Representative, the arbitration case at ICC re-started in January 2021 since no amicable agreement had been reached through negotiation, and BWSC submitted the Statement of Claim to ICC in the spring of 2021. A material part of the amount BWSC is claiming has not been recognised as income due to the claim negotiations not being finalised. It is the assessment that a finalisation of the case, either via a settlement or via the ICC case will result in an outcome for BWSC amounting to at least the amount recognised as income Investments Financial assets comprise of investments in equity interests, mainly power plants in which BWSC has a substantial but not controlling shareholding. Financial assets amounted to DKKm 135 at the end of 2023, unchanged from 2022. Risk Management Risk management is a fundamental part of the Group’s business. The groups’ business includes large construction and service projects in various jurisdictions and related contracts with sub-suppliers and consortium partners, which expose the group to a number of risks. The group holds comprehensive experience within engineering, procurement, construction and servicing, which has been accumulated during construction of 184 power plants in more than 54 countries and a large number of service projects. The experience contributes to reducing potential risks. Risk will always be a significant factor in large construction and service projects, and each project is carefully evaluated in the planning and execution phases. Beside the operational risks, the group is also exposed to currency, interest, counterpart, investment and credit risks which are mitigated and considered less material. For additional information please see the Annual Report for the subsidiary Burmeister & Wain Scandinavian Contractor A/S on their homepage (www.bwsc.com). Corporate social responsibility The Company is merely a holding company and relies on the Sub-Group’s policies for corporate social responsibility. This includes all 6 main focus areas of CSR: • Environment and climate • Human & labour rights • Business integrity • Social and staff matters • Community engagement and social impact • Data ethics (§99d) The Company’s Sub-Group has a separate CSR statement which is incorporated in their financial statement and available on their homepage (www.bwsc.com/sustainability). Equal opportunities for all employees is important to the group and accordingly we do not differentiate based on gender, race or religion when people are employed, or when training programs are offered to employees or when employees are promoted. The Company has implemented a policy regarding gender parity. Mesco Denmark A/S has set the target that one general assembly elected member of the Board of Directors must be a woman by 2026. The policy reflects the fact that the Company is a holding company with only one employee and a BoD of three members with an expected long term of service and anticipated little rotation. It has been a firm decision that the chairman of the BWSC A/S BoD is also an ordinary member of the BoD of Mesco Denmark A/S. After the chairman of seized his position in 2022 the deputy chairman was elected as chairman of the BoD of BWSC A/S also became an ordinary member of BoD for Mesco Denmark A/S. The search for a female member of the BoD by 2026 are still ongoing. 0 0 1302013000 1033280000 0 0 -1229476000 -866280000 0 0 72537000 167000000 0 0 22978000 15253000 998000 862000 113852000 142776000 0 0 14234000 16493000 -998000 -862000 -50059000 25464000 62884000 66262000 0 0 0 0 16042000 42543000 0 0 96444000 2000000 0 93000 13668000 14351000 62000 0 16827000 18999000 61824000 65493000 59268000 65359000 268000 -169000 -6491000 3044000 61556000 65662000 65759000 62315000 -97000 -759000 65662000 61556000 0 0 2270000 3902000 0 0 2270000 3902000 0 0 4399000 5288000 0 0 4399000 5288000 783356000 753446000 0 0 0 0 135184000 134644000 783356000 753446000 135184000 134644000 783356000 753446000 141854000 143834000 0 0 2651000 660000 0 0 2651000 660000 0 0 86963000 78792000 0 0 761542000 716320000 0 0 1333000 1747000 0 169000 86876000 44659000 0 0 108668000 70458000 0 0 2253000 3332000 0 169000 1047634000 915308000 14291000 7494000 147171000 285560000 14291000 7663000 1197456000 1201528000 797647000 761109000 1339310000 1345362000 62000000 62000000 62000000 62000000 613356000 668676000 72875000 29064000 0 0 -11716000 -340000 608000000 608000000 0 0 -495673000 -581502000 634015000 696959000 787683000 757174000 757174000 787683000 0 0 8347000 8802000 787683000 757174000 765521000 796485000 0 0 369000 380000 0 0 27408000 31039000 0 0 116741000 45127000 0 0 144518000 76546000 0 0 115336000 107666000 0 0 23926000 23569000 0 0 139262000 131235000 0 0 0 100000000 0 0 108656000 59092000 0 0 94800000 73439000 9866000 3282000 3569000 15473000 0 0 7248000 7486000 98000 652000 75736000 85606000 9964000 3935000 290009000 341096000 9964000 3935000 429271000 472331000 797647000 761109000 1339310000 1345362000 62000000 613356000 608000000 -495673000 787683000 0 66262000 0 -600000 65662000 0 -14584000 0 0 -14584000 0 -3208000 0 0 -3208000 0 0 0 -84159000 -84159000 0 -434000 0 1070000 636000 62000000 668676000 608000000 -581502000 757174000 62000000 29064000 -340000 696959000 787683000 0 43377000 0 22285000 65662000 0 0 -14584000 0 -14584000 0 0 -3208000 0 -3208000 0 0 0 -84159000 -84159000 0 -434000 0 1070000 636000 62000000 72875000 -11716000 634015000 757174000 8347000 8347000 62000000 72875000 -11716000 642362000 765521000 -50059000 25464000 62202000 -44909000 -152944000 -209083000 -140801000 -228528000 13668000 1153000 9793000 2604000 -136926000 -229979000 9377000 -84000 -146303000 -229895000 1429000 1818000 2520000 3484000 7104000 26137000 Sale of land and buildings Sale of land and buildings 0 35010000 2441000 5275000 Disposals of equity investments in associates Disposals of equity investments in associates 101962000 0 107558000 61120000 -100000000 100000000 6242000 -357000 4580000 -99643000 89178000 285560000 365157000 -138389000 -79597000 147171000 285560000 General The Annual Report of Mesco Denmark A/S has been presented in accordance with the provisions of the Danish Financial Statements Act for large reporting Class C companies. Accounting estimates and Judgements In preparing the financial statements, MESCO Denmark A/S has made a number of estimates and judgements that form the basis for recognition and measurement of assets, liabilities and items in the income statement. The most significant accounting estimates and judgements are stated below. Determining the carrying amount of certain assets and liabilities requires judgements, estimates and assumptions relating to future events and is therefore by nature subject to uncertainty. Particular risks referred to in the Risk management section of the Management review may have a substantial influence on the accounting risks. In the financial statements, attention is particularly drawn to the following assumptions and uncertainties as these substantially influence the assets and liabilities recognised in the statements and may be adjusted in subsequent accounting years if the assumed course of events is not realised as anticipated: • Construction contracts are measured at contract work performed, less prepayments received from the customers and anticipated losses. The percentage of completion is determined from an assessment. The contract value is measured based on the total expected income of the individual contracts – claim income is further mentioned below. The total expected expenses are partly based on estimates and contingency are included for unforeseen cost deviations to plan cost due to project risks, disputes etc. • The Group has a material claim related to engine-based projects in the Middle East. Currently, the claim negotiations have not been finalised, and a material part of claim income cannot be recognised as income. The settlement is uncertain and could have a materially positive impact on the result when the claim has been final settled. It is considered less likely that the settlement would have a negative impact on the result • Provisions are based on the best estimate of the amount at which the obligation is expected to be discharged. Provisions consist mainly of warranty provisions and other provisions. • Equity investments in associates are recognised at the proportionate share of the net assets of the Companies (the equity method). An impairment test is performed when an indicator of impairment exists. The impairment test is based on cash flow estimates of future income and cost. Uncertainty about the future development in the power sales price and fuel cost are the key uncertainties in the impairment test. The impairment loss relates to investments in equity interests in the UK operating a number of power plants. The impairment is caused by underlying lower than expected earnings of the companies as well as lower than expected long term outlook for the companies. The impairment is based on a discounted cash flow model calculation and budgets for the power plants throughout the expected life of the plants. Accounting judgements In applying the accounting policies, the company makes judgements concerning recognition principles to use. Especially related to when income and expenditure relating to third-party contracts must be treated in accordance with the percentage of completion method (construction contracts) compared to sale of goods. BWSC has for each group of transactions assessed, whether projects contain a sufficiently high degree of individual adjustment to qualify for recognition as a construction contract under the percentage of completion method. If this is not the case, the projects are recognised as revenue on sale of finished projects. Defining materiality The Annual Report is based on the concept of materiality to ensure that the content is material and relevant to the reader. This objective is pursued, amongst other things, by providing relevant rather than generic descriptions. The consolidated financial statements consist of a large number of transactions. These transactions are aggregated into classes according to their nature or function and presented in classes of similar items in the financial statements and in the notes as required by the Danish Financial Statements Act. If items are individually immaterial, they are aggregated with other items of similar nature in the statements or in the notes. Going concern The company is required to decide whether the financial statements can be presented on a “going concern” basis. Based on budgets, forecast and expectations of future cash flow etc., the company is of the opinion that there are no factors giving reason to doubt whether the company can continue operating for at least 12 months from the balance sheet date. Recognition and measurement in general Assets are recognised in the balance sheet when it is probable that future economic benefits associated with the assets will flow to the Group, and the cost of the assets can be measured reliably. Liabilities are recognised in the balance sheet when it is probable that future economic benefits associated with the liabilities will flow from the Group, and the cost of the liabilities can be measured reliably. At initial recognition, assets and liabilities are measured at cost. Assets and liabilities are afterwards measured as described below for each balance sheet item. Consolidation The consolidated financial statements are prepared on the basis of financial statements of the Parent Company and each subsidiary by aggregating items of a similar nature and by eliminating intra-group transactions. The project financial statements of international contracting activities are translated into DKK as follows: The items in the income statement and the balance sheet are translated according to weighted project rates, corresponding to the exchange rates according to forward exchange contracts entered into. As the exchange rates applied are the same during the entire project period, generally no exchange rate adjustments arise on large projects. The financial statements of foreign subsidiaries that operate as independent entities are translated into DKK as follows: The items in the income statement are translated at average rates that do not differ materially from the exchange rates at the date of transaction. Balance sheet items are translated at closing exchange rates. Exchange rate adjustments are recognised directly in equity. The financial statements of international subsidiaries that operate as integrated entities are translated into DKK as follows: The items in the income statement are translated at average rates that do not differ materially from the exchange rates at the date of transaction. Current assets and liabilities are translated at closing exchange rates, whereas fixed assets and long-term liabilities are translated at historical rates. Exchange rate adjustments are recognised in the income statement. The items from the subsidiaries are consolidated into the consolidated financial statements 100% line by line. The minority interests’ proportional share of the net result and equity of the subsidiaries are included as separate items under the consolidated result for the year and equity. Companies in which the Group holds between 20% and 50% of the voting rights or in some other way holds significant influence, but not control, are regarded as equity interests as described under the item “Financial fixed assets”. Foreign currency translation Transactions in foreign currency are translated at the exchange rate at the transaction date. Exchange rate adjustments arising between the exchange rate at the transaction date and the payment date are recognised in the income statement. Receivables, payables and other monetary items in foreign currency, which are not paid at the balance sheet date, are translated at the exchange rate at the balance sheet date. The difference between the exchange rate at the balance sheet date and the exchange rate at the time when the receivable or payable is incurred is recognised in the income statement. Financial instruments Financial instruments are initially recognised in the balance sheet at cost and subsequently measured according to fair value. The fair value of financial instruments is included in other debtors (positive fair value) or other creditors (negative fair value) as the case may be. Changes in the fair value of financial instruments that hedge the fair value of already recognised assets or liabilities are recognised in the income statement under financial income or financial costs together with changes in the value of the assets and liabilities hedged. Financial instruments used to hedge expected future transactions regarding specific projects or interest payments are measured at fair value on the balance sheet date, and value adjustments are recognised directly in equity until the hedged item is realised. When the hedged item is realised, the changes in value are recognised in the same accounting entry as the hedged item as stated above by transferring the changes in value from equity to the income statement. Financial instruments which are not held for hedging purposes regarding specific projects or interest payments are recognised in the balance sheet at fair value on the balance sheet date. Value adjustments are recognised in the income statement under financial income or costs. INCOME STATEMENT Revenue The Group’s revenue is derived from contract activities, service contracts, etc. Contract work and operational contracts are recognised according to the percentage-of-completion method. Profits on contracts are recognised by reference to actual stage of completion. In connection with consortiums, only the Group’s share is taken into account. Stage of completion is determined on the basis of an assessment of the work carried out for construction and service projects, evaluated on the basis of costs incurred on the project, compared to the total estimated costs and for operation and maintenance projects based on lenght and duration of the projects. Realised profits on completed contracts are recognised net of provisions for warranties. Income from spare part contracts and the sale of electricity is recognised when delivered. Production costs Production costs comprise expenses, including wages and salaries, raw materials and consumables, and depreciation made for purposes of generating the year’s revenue, including indirect costs related to wages and salaries, rent and leases and depreciation. Research costs and development costs that do not qualify for capitalisation and depreciation of capitalised development costs are recognised as production costs. Write-downs in connection with expected losses on contract activities are recognised as production costs. Sales costs Costs related to offers and orders, including expenses related to sales personnel, marketing and internal development projects, are recognised as sales costs. Administrative costs Costs related to management and group administration, including costs related to administrative officers, management, office premises, office expenses, depreciation etc., are recognised as administrative costs. The administrative costs that are included in production overheads are transferred to production overheads. Financial items Financial income and costs include interest income and costs, realised and unrealised capital gains and losses, changes of financial instruments not designated as hedging arrangement, amortisation of financial assets and liabilities and surcharges and allowances under the advance-payment-of-tax scheme, etc. Financial income and costs are recognised at the amounts relating to the reporting period. Tax The estimated tax charge for the year is recognised in the income statement and is recorded as a current liability in the balance sheet. Non-refunded dividend tax concerning dividends from foreign subsidiaries is expensed in the year in which the dividend is declared. The Company and its Parent Company are jointly taxed. The tax of the joint taxation income is fully allocated by payment of joint taxation contributions. Deferred tax resulting from timing differences between income and expenses in the financial statements and the statement of taxable income and from tax loss carry-forwards is provided for in the balance sheet. Changes in the deferred tax charge for the year are taken to the income statement. Actual and deferred tax related to equity movements is recognised directly in equity. BALANCE SHEET Intangible and tangible fixed assets Intangible and tangible fixed assets are measured at cost plus subsequent additions and revaluation and less accumulated amortisation/depreciation and impairments. The useful life and residual value are reassessed annually. Changes are treated as accounting estimates, and the effect on depreciation is recognised prospectively. Amortisation/depreciation in the year is provided on a straight-line basis over the estimated useful lives of the individual assets, using the following periods: Goodwill 3 years Contract rights 2 years IT software 3-7 years IT hardware 3 years Development costs 3 years Office building 100 years Warehouse 25 years Installations 10 years Cars 5 years Plant and equipment 5 years Fixtures, fittings and tools 3-10 years Land is not depreciated Development costs comprise costs, wages, salaries and amortisation directly and 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 evidenced, and where the Company intends to use the project, are recognised as intangible assets provided that the cost can be measured reliably and future earnings exceeding the capitalised costs. Other development costs are recognised in the income statement as incurred. Financial fixed assets and business combinations Equity investments in group entities and associates are recognised at the Parent Company’s proportionate share of the net assets of the companies, calculated by reference to the accounting policies applied by the Parent Company, adjusted for proportionate share of unrealised intra-group profits and losses (the equity method). Equity investments in group entities and associates whose net asset value is negative are recognised at DKK 0, and any receivables from these companies are written down by the Parent Company’s share of the negative net asset value. If the net asset value exceeds the receivables, the residual amount is recognised under provisions provided that the Parent Company has a legal or actual obligation to cover the subsidiaries’ deficits. For equity investments in associates where the eliminated intercompany profit exceeds the value of the investments either due to impairments or based on the proportional share of equity the remaining part of the eliminated intercompany profit is not recognised. Net revaluation of equity investments in group entities and associates is taken to equity as a net revaluation reserve according to the equity method. Newly acquired or newly established companies are recognised in the financial statements from the time of acquisition. Companies sold or otherwise disposed of are recognised until the time of sale. Profits or losses on the sale of equity investments in group entities and associates are stated as the difference between the selling price and the carrying amount of the net assets at the time of sale and expected costs related to the sale and/or disposal and recognised in the income statement under other income. The takeover method is applied to newly acquired equity investments in group entities and associates. Thus, the assets and liabilities of such companies are measured at fair value at the time of acquisition. The takeover method is also applied when an equity interest in an associate becomes a subsidiary, through step acquisition of more shares in the associated company, whereby control of the company is obtained at such time. A positive difference between the fair value of assets and liabilities acquired and the purchase consideration is treated as goodwill, which is subsequently amortised over the useful life; and a negative difference is treated as negative goodwill, which is recognised as other operating income at the time of acquisition or the time of obtaining control. Inventories Inventories, including prepayments for goods, are measured at cost according to the FIFO principle. However, inventories are written down to the lower of cost or net realisable value. Trade receivables Debtors, etc. are measured at amortised cost, which usually equals the nominal value. Impairment for bad debts is based on individual assessments if there is an objective indication that a debtor is impaired. Contract work in progress Contract work in progress is measured by reference to the stage of completion. Reference is made to the Revenue section. The sales value is based on the stage of completion at the balance sheet date and the total expected income on the individual work in progress. The individual work in progress is recognised in the balance sheet under debtors or liabilities other than provisions, dependent on the net value of the selling price less payments on account and prepayments. Costs related to sales work and contracts are recognised in the income statement as incurred. Prepayments Payments, made or received concerning costs or income in subsequent years are recognised as prepayments under receivables or current liabilities. Warranty provisions Warranty provisions comprise commitments to repair work within the guarantee period. Provisions are measured and recognised based on previous experience with guarantee work. Other provisions Other provisions comprise expected remaining costs relating to delivered contracts. When it is probable that the total costs will exceed the total income on contract work in progress, a provision is made for the total loss expected to be incurred on the work. The provision is recognised as costs under production costs. Financial liabilities Financial liabilities are recognised from the raising of the loan at the proceeds received net of transaction costs incurred. The financial liability is subsequently measured at amortised cost, equalling the capitalised value, using the effective interest rate method. The difference between the proceeds and the nominal value is thus recognised in the Income Statement over the loan term. Other financial liabilities, which comprise trade creditors, payables to related and equity interests and other creditors, are measured at amortised cost, which usually corresponds to the nominal value. CASH FLOW STATEMENT The cash flow statement shows the Group’s net cash flows for the year, broken down by operating, investing and financing activities, changes in cash and the Group’s cash at the beginning and at the end of the year. A cash flow statement for the parent company has not been prepared in accordance with §86.4 of the Danish Financial Statements Act. Cash flows from operating activities Cash flows from operating activities are made up as the operating result, adjusted for non-cash operating and financial items, changes in working capital, financial items and paid income taxes. Cash flows from investing activities Cash flows from investing activities comprise payments related to additions and disposals of companies and additions and disposals of intangible and tangible assets. Cash flows from financing activities Cash flows from financing activities comprise changes in the size or composition of the Company’s share capital and related costs, raising of loans and repayments of interest-bearing debt and dividends distributed to shreholders. Financial Ratio Analysis of the financial ratios included in the group financial highlights: Gross margin Gross profit x 100 Revenue Profit ratio Profit before tax x 100 Revenue Solidity ratio Equity at year-end x 100 Total equity and liabilities at year-end Return on equity Profit after tax x 100 Average equity true Note 2 RevenueParent CompanyThe Group2022 2023 2023 20220 0 Final invoicing 1.891.705 672.4840 0 Changes in contract work in progress -589.692 360.8060 0 1.302.013 1.033.2900 0 South and Central America 105.441 624.0080 0 Southeast Asia 48.962 163.9050 0 Africa and Middle East 164.686 172.0600 0 Europe 982.924 73.3070 0 1.302.013 1.033.280With reference to paragraph 96 of the Danish Financial Statements Act, the distribution of revenue on business activities has for competitive reasons been omitted from the annual report. Note 3 Tax on profit for the year0 0 Income tax payable/receivable 12.307 9.6190 -169 Deferred tax -18.674 -6.741268 0 Concerning previous years -449 1660 0 Paid dividend tax abroad 325 0268 -169 -6.491 3.044 Note 4 Intangible assetsThe GroupContract Development rightsSoftware GoodwillcostsTotalCost at 1 January 2023 18.014 107.352 1.889 0 127.255Currency adjustment at 1 January 2023 0 -15 0 0 -15Additions in the year 0 2.520 0 0 2.520Disposals in the year -18.014 -155 -1.889 0 -20.058Cost at 31 December 2023 0 109.703 0 0 109.703Depreciation at 1 January 2023 18.014 103.450 1.889 0 123.353Currency adjustment at 1 January 2023 0 0 0 0 0Depreciation for the year 0 3.982 0 0 3.982Disposals in the year -18.014 0 -1.889 0 -19.903Depreciation at 31 December 2023 0 107.432 0 0 107.432Book value at 31 December 2023 0 2.270 0 0 2.270Book value at 31 December 2022 0 3.902 0 0 3.902Depreciation for the year DKKt 3.982 is included in administrative costs in 2023 Note 5 Tangible fixed assetsThe GroupFixture andfittings, toolsand equipmentCost at 1 January 2023 58.008Currency adjustment at 1 January 2023 -48Additions in the year 1.429Disposals in the year -1.326Cost at 31 December 2023 58.063Depreciation at 1 January 2023 52.720Currency adjustment at 1 January 2023 44Depreciation for the year 1.936Depreciations of disposals -1.036Depreciation at 31 December 2023 53.664Book value at 31 December 2023 4.399Book value at 31 December 2022 5.288Depreciation for the year is included in:2023Cost of production 1.911Administrative costs 2642.175 Note 6 Financial fixed assetsParent CompanyThe GroupInvestmentsEquity investments Equity investments in in group entitiesassociates170.000 Cost at 1 January 2023 105.5800 Disposals in the year -43.271170.000 Cost at 31 December 2023 62.309613.356 Revaluations/write-downs at 1 January 2023 29.0640 Disposals in the year 35.376-17.895 Profit share 16.0433.205 Other changes -2.698-14.584 Changes in financial instruments 0-636 Foreign exchange adjustments etc. 434Distribution of dividend to parent company -7.104Elimination intercompany profit 1.760583.446 Revaluations/write-downs at 31 December 2023 72.875753.446 Book value at 31 December 2023 135.184783.356 Book value at 31 December 2022 134.644As per 31 December 2023, the accumulated elimination of the proportionate share of the intercompany profit of DKKm 44 (2022: DKKm 48) before tax has been deducted from the equity investments in associated companies. Note 7 Contract work in progressParent CompanyThe Group2021 2022 2023 20220 0 Sales value of production in progress 4.443.355 5.033.2870 0 Invoiced on account -3.790.470 -4.376.0590 0 Contract work in progress, net 652.885 657.228Classified as follows:0 0 Receivables 761.542 716.3200 0 Prepayments received from customers -108.656 -59.0920 0 652.885 657.228 Note 8 Deferred taxParent CompanyThe Group2022 2023 2023 20220 0 Deferred tax at 1 January 44.279 43.9230 0 Adjustment concerning previous years 23.549 -1.2610 169 Changes in deferred tax 18.679 1.6170 169 86.507 44.279Deferred tax can be specified as follows:0 0 Tangible fixed assets 4.392 2.8420 0 Financial fixed assets 660 9.7890 0 Intangible fixes assets 8.999 6600 0 Contract work in progress etc. -58.056 -42.9140 0 Provisions 33.379 9.2870 169 Tax loss carried forward 97.134 64.6150 169 86.507 44.279Deferred tax distributed on0 169 Tax assets 86.876 44.6590 0 Tax liabilities -369 -3800 169 86.507 44.279 Note 9 Warranty and Other ProvisionsWarranty provisions amounts to DKKm 27 (2022: DKKm 31) where DKKm 17 has been added, DKKm 19 has been used, and DKKm 2 has been released during 2023.Approximately DKKm 15 of the warranty provision is expected to be settled within the next 12 months and DKKm 3 is expected to be settled within 1-5 years.Other provisions amounts to DKKm 117 (2022: DKKm 45) where DKKm 81 has been added, DKKm 58 has been used, and DKKm 3 has been released during 2023.Approximately DKKm 116 of the other provision is expected to be settled within the next 12 months and DKKm 1 is expected to be settled within 1-5 years. Note 10 Other long-term liabilitiesLong-term debts maturing after 5 years from the end of the fiscal year amount to DKKm 0 (2022: DKKm 0).The other long-term liabilities DKKm 24 (2022: DKKm 24) are non-interest bearing. Note 11 Other creditorsParent CompanyThe Group2022 2023 2023 20220 553 Payable payroll related costs 32.114 25.5560 0 Financial instruments 24.485 26.1820 0 Payable VAT 2.460 50098 98 Other accrued expenses, etc. 16.677 33.36898 651 75.736 85.606Note 18. Guarantees At 31 December 2023 guarantees given by banks and credit insurance institutions on behalf of the subsidiary BWSC for contract work, etc. amounted to DKKm 406 (2022: DKKm 594). The guarantees are typically provided in the form of performance and down payment guarantees to cover project-related risks, such as performance, payment, quality and delay for projects and supplies towards our customers. Note 12 Audit feesParent CompanyThe Group2022 2023 2023 202273 73 Audit fee 958 9260 0 Other declaration assignments 23 00 0 Tax advisory fee 16 80 0 Other fees 119 11973 73 1.116 1.053 Note 13 Staff costs etc.Parent CompanyThe Group2022 2023 2023 2022794 600 Wages and salaries 341.407 321.8780 0 Pension contribution 16.797 10.5173 0 Social security costs 22.290 18.351797 600 380.494 350.746Including remuneration for:797 600 Board of Directors of Parent Company 600 797For the Parent Company Staff costs of DKKm 0,6 are allocated to Administrative costs. For the Group staff costs of 19.7 are allocated to Sales costs, DKKm 42.2 are allocated to Administrative costs and 111,1 are allocated to Production costs. 1 1 643 609 Note 14 Financial instrumentsThe subsidiary BWSC manages the currency hedging as well as the Group cash management. The major part of the Group’s cash flow are in DKK, EUR, USD and GBP. The future cash flow and net positions in currencies other than EUR and DKK will be hedged initially upon contract signing and during the project execution, if changes in currency net positions occur. Subsequently, investment in subsidiaries, and associated companies in foreign currency are not hedged. Foreign exchange forwards contracts are used to hedge future cash flow and net positions. Interest rate swaps are used to hedge interest rate exposure on borrowings which is not within the treasury policy. Note 15. Derivative financial instruments (continued) The market value of foreign exchange hedging and interest rate hedging recognised in the equity amounts to DKKm 15 (2022: DKKm 0). The maturity is as follows: • Within one-year DKKm 15 (2022: DKKm0) • Between one and five years DKKm 0 (2022: DKKm 0) • Later than five years DKKm 0 (2022: DKKm 0) Note 16. Transactions between related parties Purchase of goods and services and loan from MITSUI E&S Co., Ltd., Japan and sale of goods to equity interests in group entities and associates are specified below in this note. Apart from intercompany transactions which have been eliminated in the Group accounts, purchase of services from DASH engineering, service sales to equity interests, remuneration for the Board of Directors and the Executive Management, no transactions have been made with the Board of Directors, the Executive Management, subsidiaries and equity interests or other related parties during the year Group relationships Burmeister & Wain Scandinavian Contractor A/S is 100% owned by Mesco Denmark A/S, which prepares its own consolidated financial statements. The Mesco Denmark financial statements can be obtained via BWSC or www.datacvr.virk.dk. The ultimate Parent Company is MITSUI E&S Co., Ltd., which prepares consolidated financial statements for the group in which BWSC is included. Group Financial Statements for the ultimate Parent Company can be obtained from: MITSUI E&S Co., Ltd., 6-4, Tsukiji 5-Chome, Chuo-ku, Tokyo 104-8439. Japan. Note 16. Transactions between related parties (continued) Receivables Payables Dividends Loans Interest Sales PurchasesoutstandingoutstandingreceivedreceivedpayableBWCC Ltd. 6.549 0 1.911BWSC Benin SARL 7.925 0 1.646BWSC Belgium Ltd 36.177 3.001 0BWSC Cayman Ltd. 0 0 3.583BWSC Cyprus Ltd. 0 165 0BWSC Foreign Investments ApS 0 0 69BWSC Generation ApS 0 0 412BWSC Japan Ltd. 23.852 0 827BWSC Lebanon Construction SARL 146 0 27.851BWSC Macau Ltd. 0 0 9.591BWSC Mali SARL 428 0 3.420BWSC (Mauritius) Ltd. 0 0 2.857BWSC Panama S.A. 0 0 2.876BWSC Regional Services S.A. 0 545 0BWSC Sweden AB 513 0 674BWSC Generation Services Northern Ireland Ltd. 39.965 0 9.484BWSC Generation Services UK Ltd. 523.558 0 84.906Asia Power (Private) Ltd. 0 0 0Subsidiaries total 6.549 632.563 3.711 150.107 0 0 0Rabai Operation and Maintenance Ltd. 451 0 237 0 1.778Western Biomass Operating Company Ltd. 7.056 0 20.515 0APOM Ltd. 0 297 0Rabai Power Holding Ltd. 0 0 0 5.326Kent Power Corporation Ltd. 77.814 0 24.508 0Albatros Energy Mali S.A 19.729 0 2.802 0Equity interests total 105.050 0 48.359 0 7.104 0 0MITSUI E&S Co., Ltd. 0 9.528 0 2.744 100.000 15.336Parent company total 0 9.528 0 2.744 0 100.000 15.336Dash Engineering Inc. 0 274 0 108 0 0 0Sister Companies Total0 274 0 108 0 0 0 Note 17. Contingency liabilities, security for loans, etc. The Group has not entered into any material leasing obligations. The Group is party to disputes and litigation from time to time. It is the assessment that appropriate provisions have been made for the outcome of such disputes and litigation. The Group is involved in ongoing tax disputes in Africa, of which some relate to significant amounts in dispute. It is Management’s assessment that these tax disputes are unjustified, and it is the assessment that appropriate provisions have been made for ongoing tax cases and risks. The Parent Company is jointly taxed with the other Danish entities in the Mesco Denmark Group. As management Company, the Company is jointly and severally liable, together with the other jointly taxed entities, for Danish income taxes and withholding taxes on dividends, interest and royalties within the Group of jointly taxes entities. Any subsequent adjustments of the joint taxable income or withholding taxes may result in an increase of the Company's liability. The Group has received DKKm 29 under a product delivery guarantee. The amount has been off set in work in progress, since payments to be received from the customer shall be passed on to the guarantee provider. Should it turn out that BWSC has no right to claim the amount from the customer, the amount received of DKKm 29 shall be paid back to the guarantee provider 66262000 62884000 -600000 -1328000 Note 20 Cash flow adjustmentsThe Group2023 2022Amortization, deprecation and impairment 5.918 10.144Changes in provisions 67.984 -62.895Financial instruments -14.584 22.611Elimination of intercompany profit-1.760 -3.583Other adjustments 4.644 -11.18662.202 -44.909Note 21 Changes in working capitalThe Group2023 2022Changes in inventories -1.991 963Changes in contract work in progress -102.795 -198.481Changes in trade receivables -1.587 27.636Changes in receivables from group enterprises and associates -6.584 1.556Changes in other receivables -38.210 -14.407Changes in prepayments and deferred income 1.079 2.070Changes in trade payables 21.357 14Changes in payables to group enterprises -11.905 6.469Changes in other payables -12.308 -34.903-152.944 -209.083 Annual report Auditor's report on audited financial statements ParsePort XBRL Converter 2023-01-01 2023-12-31 2022-01-01 2022-12-31 2024-04-08 Artur Bugsgang Reporting class C, large enterprise 2024-04-08 25578196 KPMG Dampfærgevej 28 2100 København Ø Opinion Basis for Opinion 2024-04-08 mne34490