Årsrapport 30700228 EY Godkendt Revisionspartnerselskab Værkmestergade 25 Postboks 330, 8100 Aarhus C 2023-01-01 2023-12-31 2022-01-01 2022-12-31 21662534 Kitron A/S Ane Staunings Vej 21C 8700 Horsens, Denmark 1998-12-21 Horsens 76251000 76251010 www.kitron.com PricewaterhouseCoopers Statsautoriseret Revisionspartnerselskab 33771231 Herredsvej 32 7100 Vejle 2024-06-26 Xiangyu Deng Regnskabsklasse C, stor virksomhed Revisionspåtegning Grundlag for konklusion Konklusion 2024-06-26 2024-06-26 CaseWare Working Papers Horsens Jimi Klitholm Sandgreen Mona Cathrin Nylander Chair Kristoffer Karl Arne Asklöv Deputy Chair Stian Haugen Henning Dahlen Steen Moeskjær Jensen Maibrit Lindgaard Paulsen Trekantsområdet Henrik Forthoft Lind Morten Elbæk Jensen State Authorised Public Accountant mne34169 State Authorised Public Accountant mne27737 734558000 477054000 522428000 61286000 45207000 59997000 44018000 79345000 36787000 24898000 33890000 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) 27580000 15747000 25920000 37538000 73903000 31301000 19549000 29590000 Profit before interest and tax (EBIT) Profit before interest and tax (EBIT) Profit before interest and tax (EBIT) Profit before interest and tax (EBIT) Profit before interest and tax (EBIT) 3848000 -1831000 -2773000 -149000 -1973000 41386000 72071000 28527000 19400000 27617000 Profit before tax Profit before tax Profit before tax Profit before tax Profit before tax 21950000 14635000 20481000 119443000 157072000 111810000 109009000 106632000 Fixed assets Fixed assets Fixed assets Fixed assets Fixed assets 252029000 381420000 299358000 211538000 222894000 Non-fixed assets Non-fixed assets Non-fixed assets Non-fixed assets Non-fixed assets 411168000 320547000 329526000 8564000 11789000 6965000 2525000 1415000 7634000 7634000 7634000 7634000 7634000 Share capital Share capital Share capital Share capital Share capital 128060000 105964000 91291000 5809000 5693000 45699000 59130000 73034000 Non-current liabilities other than provisions Non-current liabilities other than provisions Non-current liabilities other than provisions Non-current liabilities other than provisions Non-current liabilities other than provisions 168000000 348433000 237409000 155453000 165201000 Current liabilities other than provisions Current liabilities other than provisions Current liabilities other than provisions Current liabilities other than provisions Current liabilities other than provisions 10.3 9.7 8.3 9.5 11.5 6.3 6.7 5 5.2 6.5 EBITDA-margin EBITDA-margin EBITDA-margin EBITDA-margin EBITDA-margin 53.2 34.2 31.1 33.1 27.7 16.7 35.8 18.8 14.8 25.2 695462000 1175712000 623673000 1061212000 71789000 114500000 13673000 13317000 24526000 31048000 3948000 3767000 37538000 73902000 6360000 3776000 2512000 5607000 41386000 72071000 9494000 16214000 31892000 55857000 513000 1426000 513000 1426000 17599000 16218000 176000 166000 1982000 897000 546000 25000 20303000 17306000 96457000 96457000 0 39850000 2170000 2033000 98627000 138340000 119443000 157072000 126088000 126532000 17469000 21102000 10327000 9293000 153884000 156927000 49419000 156225000 6889000 7054000 2236000 2676000 2221000 2331000 2476000 2085000 63241000 170371000 34904000 54122000 252029000 381420000 371472000 538492000 7634000 7634000 0 595000 170029000 158137000 20000000 18000000 197663000 184366000 5809000 5693000 5809000 5693000 65433000 75022000 64433000 85553000 3539000 147551000 8537000 14837000 26058000 25470000 168000000 348433000 173809000 354126000 371472000 538492000 7634000 146000 120280000 0 0 37857000 18000000 0 -449000 0 0 7634000 595000 158137000 18000000 0 11892000 20000000 0 595000 0 0 0 18000000 7634000 0 170029000 20000000 3948000 3767000 2244000 1665000 2596000 1672000 1520000 439000 1418000 4167000 1094000 1440000 9054000 15158000 440000 1056000 20000000 18000000 11892000 37857000 13475000 1927000 11548000 12049000 913000 -1927000 11035000 513000 71979000 8260000 7363000 25000 6467000 94000 1482000 521000 9114000 3000000 1351000 0 69332000 5354000 7494000 546000 55761000 8094000 6466000 0 5086000 84000 397000 0 -9114000 -3000000 -1351000 0 51733000 5178000 5512000 0 17599000 176000 1982000 546000 96457000 39850000 2033000 0 0 137000 0 39850000 0 96457000 0 2170000 96457000 0 2170000 Kitron Electronics Manufactoring (Suzhou) Co. Ltd. China 100 178888 39832 Kitron Electromechanical (Suzhou) Co. Ltd China 100 2895 340 Kitron Holding Czech a.s. Czech Republic 100 19813 -702 Kitron Czech a.s. Czech Republic 100 103334 30844 Kitron India ApS Denmark 100 7 -32 Kitron India Services Private Ltd India 100 -1175 -726 -2676000 -3858000 -2236000 -2676000 5809000 0 5809000 4619000 83198000 80017000 6594000 5077000 1447000 1276000 91239000 86370000 91239000 86370000 172 149 Today, the Board of Directors and the Executive Board have discussed and approved the annual report of Kitron A/S for the financial year 1 January - 31 December 2023. The annual report is prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2023 and of the results of the Company's operations for the financial year 1 January - 31 December 2023. 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 Kitron A/S We have audited the financial statements of Kitron A/S for the financial year 1 January - 31 December 2023, which comprise an income statement, balance sheet, statement of changes in equity and notes, including accounting policies. The financial statements are prepared in accordance with the Danish Financial Statements Act. In our opinion, the financial statements give a true and fair view of the financial position of the Company at 31 December 2023, and of the results of the Company's operations 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 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 Company 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 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 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 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 skepticism 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 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 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 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. 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 Statement 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: Operating profit/loss Profit/loss before net financials +/- Other operating income and other operating expenses Gross margin Gross profit/loss x 100 Revenue EBITDA-margin Earnings before interest, taxes and amortisations (EBITDA) x 100 Revenue Equity ratio Equity, year-end x 100 Total equity and liabilities, year-end Return on equity Profit/loss after tax x 100 Average equity Report Kitron A/S is a provider of full range Electronics Manufacturing Services (EMS) which comprise development, production and sales of electronics and EMS solutions. The company, Kitron A/S is headquartered in Horsens, Denmark, where production also takes place. Furthermore, the Group has six subsidiaries – two in China, Kitron Electronics Manufactoring (Suzhou) Co. Ltd. and Kitron Electromechanical (Suzhou) Co. Ltd., two in Czech, Kitron Holding Czech a.s. and Kitron Czech a.s., one in Denmark, Kitron India ApS, and another in India. There are production sites in Denmark, China, India and Czech. Group Chart *Acquired all shares in Kitron A/S at 10 january 2022. Financial development The total sales for 2023 was DKK 695 million, which is a decrease of 40.9% compared to 2022 (DKK 1,176 million). The decrease can be caused by a large decrease in orders from the customers. The 2023 turnover at the beginning of year was expected to 20-22% growth. During 2023, the customers initiated significant adjustments of orders and forecast primarily due to overstock in the supply chain and challenges of tied up working capitals. The de-stock activities across several market sectors were seen as extended impact on the supply chain since Covid-19 outbreak and disruption of global semi-conductor supply chain. The decline of orders is expected to continue in year 2024 and the level after adjustments would be close to that before the supply chain crisis for the customers. Profit after tax was DKK 32 million (2022:DKK 56 million). At the end of the financial year the balance sheet total was DKK 371 million compared with DKK 538 million the previous year. Equity as of 31 December 2023 amounted to DKK 198 million (2022: DKK184 million). The outlook of 2023 result was expected at the level of DKK 50-60 million. However, the profit of year 2023 resulted 43% lower than 2022 or expected result because of the declined sales from external customer demands. In the balance sheet 2023, total assets reduced 167 million including 107million lower account receivables due to lower sales and decrease of investment in subsidiary for 40 million. By end of the financial year, 144 million intercompany liability was cleared indicating improvement of cash flow from operating activities. Investments The investments in 2023 have been normal operational investments. Dividends In 2023 DKK 18 million dividends has been paid in December 2023. The proposed dividend for 2023 amount to DKK 20 millions. No recognition and measurement uncertainties have been identified in the annual report. Kitron A/S centrally manages the Group's financial risks and coordinates the Group's liquidity management, including funding and placement of surplus liquidity. Kitron A/S operates with a low risk profile, meaning that currency, interest rate and credit risks only occur based on commercial factors. The majority of customers as well as inventory are guaranteed via external credit insurance, however some large groups are not insured via external credit insurance due to their risk profile. Where deemed appropriate to reduce financial risk, financial instruments in the form of forward contracts and interest rate swaps are included. Business risks The primary business risk faced by Kitron A/S is the continued ability to deliver good service and produce quality at competitive prices. Management regularly evaluates whether Kitron A/S has an ample capital structure, and the Board regularly evaluates whether the capital basis is in keeping with the company's interests and those of its stakeholders. The overall goal is to ensure a capital structure that will support long-term financial growth. In 2023, the company maintained its focus on the competitive situation. The staff of the full-time employees is 172. To continually be able to deliver and develop competitive products and solutions, it is paramount that the Group is able to retain and develop employees so that they have the best possible skill set for performing in their job. Consequently, our HR department works with a strategic perspective focusing on goal-oriented work with attraction, development, and job satisfaction amongst the staff. Responsibility The Group's CSR efforts are described in a separate Corporate Social Responsibility report for 2023 prepared by Kitron A/S. The report complies with the Danish Financial Statements Act section §99a. The CSR report is available at: https://kitron.com/storage/files/Annual%20reports/Kitron%20Denmark%20Sustainability%20Report%202023.pdf Whistle blowers Employees at Kitron A/S can contact an external company anonymously if there should be events that they wish to report. There were no such contacts made under this arrangement in 2023. Kitron A/S has goals for recruitment of women for management positions. Kitron A/S wants to make the goal of more women in management quantifiable - both in terms of the process leading to the goal and in relation to the concrete results. Targets have been set for the ratio of female senior managers to comply with the Danish Financial Statements Act section §99b: The current proportion of females at the senior management level (the Board) is currently 33% i.e. an equal distribution in the board of directors according to the Danish Business Authority. The proportion of female senior managers in daily management (Executive Board) is currently 50%. The proportion of female managers among all levels in daily management is currently 29%. The action to equal opportunity is to obtain at least one of each gender to be amongst the final three candidates in the recruitment process. Top management position in Year 2023 Board of Directors Other managerial position in Year 2023 First management level includes the Executive board and persons on the same organizational management level. Second management level includes persons with staff responsibilities, who refer directly to the first management level In Year 2023, we have implemented equal gender opportunity in the recruitment process of other management position, i.e. at least one of each gender is amongst the three candidates of other management position. For our HR recruitment process, there is a guideline to functional managers and HR specialist that we recommend at least one candidate of each gender to be presented at each round of interviews for such other management positions. This recommendation covers external and internal recruitment as well as promotion to managerial roles. The executive of the company has the responsibility to ensure the company policy of equal gender opportunity fully implemented during the recruitment and internal promotion processes. Our action plan in 2024 to reach our gender equality target is to recruit and promote women leaders within Other Managerial Position. In the long term, we will also work with young generation plan to attract more women talents for future managerial positions. In 2024, based on received orders and forecast from customers. The revenue is expected in the level of DKK 436 million and the profit before tax in the level of 24 million. The Company's policy on data ethics is integrated into the IT policy and GDPR set-up. The focus and handling of data ethics is handled through the following: The IT Policy, which contains requirements for employees regarding the handling of IT systems and data in the Company. The Group's GDPR set-up, which supports the legislation's requirements for GDPR, including data collection and processing, data subjects' rights, and that there are requirements for subcontractors' use of data processing agreements. The Group continuously educates employees in data ethics by continuously updating and informing employees about the above. The Board of Directors is responsible for continuously, and at least once a year, assessing whether the policy on data ethics needs to be updated. The Executive Board is responsible for ensuring that the policy is implemented in the day-to-day operations of the Company. The annual report of Kitron A/S for 2023 has been prepared in accordance with the provisions in the Danish Financial Statements Act applying to large reporting class C entities. In accordance with section 112(1) of the Danish Financial Statements Act, the Company has not prepared consolidated financial statements. The Group financial statements are prepared by the parent company Kitron ASA. With reference to section 86(4) of the Danish Financial Statements Act, no cash flow statement is prepared for the parent company, as its cash flows are reflected in the consolidated cash flow statement. Reporting currency The financial statements are presented in Danish kroner (DKK'000). Foreign currency transactions throughout the year have been converted to the rate in force on the transaction date. Gains and losses arising between rates on transaction and payment days are recognised in the income statement under financial items. Receivables, liabilities and other monetary items in foreign currencies are converted to the rate on the reporting date. The exchange rate difference between the reporting date and transaction date is included in the income statement under financial items. On initial recognition, derivative financial instruments are recognised at cost in the balance sheet and are subsequently measured at fair value. Positive and negative fair values of derivative financial instruments are presented as separate items in the balance sheet. Changes in fair value of derived financial instruments classified as and which satisfy the conditions for securing the fair value of an included asset or an included liability are recognised in the income statement together with any changes in the fair value of the secured asset or the secured liability. Changes in fair value of derivative financial instruments classified as and which satisfy the conditions for securing expected future transactions regarding purchases and sales in foreign currencies are included under other receivables or other liabilities and in equity. If the expected future transaction leads to recognition of assets or liabilities, amounts deferred under equity are transferred from equity and recognised in the cost of the asset or liability. Amounts deferred under equity are transferred to the income statement for the period in which the secured item affects the income statement. The Company has chosen IAS 11/IAS 18 as interpretation for revenue recognition. Net sales from the sale of goods and manufactured products is recognised in the income statement, provided delivery and risk transferral to the buyer has taken place before the end of the year. Net sales are recognised exclusive of value added tax, other taxes and sales-related discounts. Production costs comprise costs incurred in generating the revenue for the year. Such costs include direct and indirect costs of raw materials, consumables and production staff, rent and leases, as well as depreciation on production plant. Distribution costs comprise costs related to the distribution of goods sold in the year and to sales campaigns, etc. carried out in the year, including costs related to sales staff, advertising, exhibitions and amortisation/depreciation. Sales and marketing costs are recognised in the income statement when the Company obtains control of the sales or marketing product. Administrative expenses include expenses incurred in the year for company management and administration, including expenses relating to administrative staff, Management, office premises and expenses as well as amortisation/depreciation of assets used for administrative purposes. Other operating income comprise items of a secondary nature relative to the Company's core activities, including gains on the sale of fixed assets. The item comprises amortisation/depreciation of intangible assets and property, plant and equipment. 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: Software 5 years Plant and machinery 5-8 years Other fixtures and fittings 3-8 years Leasehold improvements 5 years Depreciation is based on the residual value of the asset and is reduced by impairment losses, if any. The depreciation period and the residual value are determined at the acquisition date and are reassessed annually. Where the residual value exceeds the carrying amount of the asset, no further depreciation charges are recognised. In the case of changes in the depreciation period or the residual value, the effect on the depreciation charges is recognised prospectively as a change in accounting estimates. 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, dividends, financial expenses relating to realised and unrealised capital gains and losses relating to exchange gains and losses and amortisation of financial assets and liabilities. The tax for the year consists of the current corporate tax and changes in deferred tax for the year due to changes in the tax rate and is recognised in the income statement as the part directly associated with the profit or loss for the year, while tax directly relating can be attributed to items recognised directly in equity. Software is calculated at cost less accumulated amortisation. Software is amortised over the estimated useful life, but not more than 5 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. 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. Investments in subsidiaries are measured at cost. Dividends received that exceed the accumulated earnings in the subsidiary during the period of ownership are treated as a reduction in the cost of acquisition. Further dividends are recognised in the profit and loss accounts. 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. Inventories are calculated at cost based on the FIFO principle. Where cost is higher than the fair value less costs to sell, the value is written down. Cost for goods, raw materials and consumables are recognised at the purchase price plus delivery costs. Cost for finished goods and goods-in-process include cost for raw materials, consumables, direct salaries and indirect production costs. Indirect production costs include indirect materials and salaries, maintenance of and depreciation on machines and equipment used in production, and factory administration and management costs. The fair value less costs to sell for inventories is calculated as the sales price excluding costs of completion and costs related to achieving sales, and is established with due consideration of merchantability, obsolescence and development in expected sales price. The Company has chosen IAS 39 as interpretation for impairment write-down of financial receivables. Receivables are measured at amortised cost and reduced by write-downs for bad debt risk of expected losses according to an individual assessment. Prepayments recognised under "Assets" comprise prepaid expenses regarding subsequent financial reporting years. Hedging reserve The hedging reserve comprises the cumulative net change in the fair value of hedging transactions that qualify for recognition as a cash flow hedge and where the hedged transaction has not yet been realised. The reserve is dissolved when the hedged transaction is realised, if the hedged cash flows are no longer expected to be realised or if the hedging relationship is no longer effective. The reserve does not represent a limitation under company law and may therefore be negative. 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 current tax receivables are recognised in the balance sheet as estimated tax on the taxable income for the year, adjusted for tax from the previous year’s taxable income and tax paid on account. Deferred tax is calculated using the balance sheet 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 assets, including the tax value of tax loss carryforwards, 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. The Company has chosen IAS 39 as interpretation for liabilities. Financial liabilities are recognised at the date of borrowing at the proceeds received less transaction costs paid. In subsequent periods, financial liabilities are recognised at amortised cost corresponding to the capitalised value using the effective interest rate. Accordingly, the difference between the proceeds received and the nominal value is recognised in the income statement throughout the loan period. Other liabilities, including payables to suppliers, group entities and other payables are calculated at amortisised cost essentially net realisable value. Sales are specified in geographic markets. Information about geographic markets is based on revenue and risk as well as internal financial management. No events materially affecting the Company's financial position have occured subsequent to the financial year-end. Breakdown of revenue by geographical segment: Denmark 488,893 752,102 Other countries 206,569 423,610 695,462 1,175,712 Audit fees are not disclosed with reference to section 96(3) of the Danish Financial Statements Act. The fee is specified in the consolidated financial statements for Kitron ASA. A significant proportion of inventories relate to customer-specific components procured in relation to agreements for which customers are liable. Prepayments consist of rent, insurance premiums, subscriptions and interest. As of 31 December 2023, equity consisted of 76,340 shares of DKK 100 each. The share capital has remained unchanged for the past 5 years. Payments due within 1 year are recognised under current liabilities. The outstanding non-current liabilities 5 years after the reporting date is DKK 4,619 thousand. Staff costs are recognised as follows in the financial statements: Production costs 70,204 60,789 Distribution costs 10,381 9,816 Administrative expenses 10,654 15,765 91,239 86,370 By reference to section 98b(3), (ii), of the Danish Financial Statements Act, remuneration to Management is not disclosed. Other contingent liabilities Kitron A/S’ insurance coverage of receivables from sales of goods and services has been provided as security to the Company's banks. A company charge security for DKK 80,000 thousand and shares in Wendell Holding a.s and Wendell Electronics a.s. has been provided as security for payables to credit institutions. The Company has agreed with the bank, that it is not allowed to pledge assets without prior approval. Kitron A/S forms a tax group as administrationcompany with the other danish companies in the group. The Company is jointly liable with the danish companies in the group for Danish corporate tax within the tax group. The Company has entered operating lease liabilities with payments in the non-cancellation period totaling DKK 445 thousand (2022: DKK 370 thousand). The leasing contracts have non-cancellation periods of up to 38months. The rental contracts are not subject to cancellation until 30 June 2025, after which it can be terminated with 12 months’ notice. The annual rent is DKK 3,277 (2022: DKK 3,123 thousand). Related party transactions Kitron A/S was engaged in the below related party transactions: DKK'000 2023 2022 Purchase of finished goods 249,025 693,334 Sales of finished goods and components 9,505 24,419 Sales of IT services 4,108 3,961 Interest income from loans 2,244 1,665 Interest expences from loans 1,418 4,167 Intercompany loans (Receivable) 6,889 7,054 Intercompany receiveables (non-current) 0 39,850 Loan from parent 0 59,358 Intercompany payable 3,539 88,193 Ownership Name Domicile Kitron ASA Plan 2 Olav Brunborgs vei 4 1396 BILLINGSTAD Norge The financial report for Kitron ASA 2023, is to be downloaded at www.Kitron.com/investors#annual-reports. 21662534 2023-01-01 2023-12-31 21662534 2023-01-01 21662534 2022-12-31 21662534 2023-12-31 21662534 2022-01-01 21662534 2023-01-01 2023-12-31 1 21662534 2023-01-01 2023-12-31 2 21662534 2023-01-01 2023-12-31 3 21662534 2023-01-01 2023-12-31 4 21662534 2023-01-01 2023-12-31 5 21662534 2023-01-01 2023-12-31 6 21662534 2023-01-01 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