Untitled

NEKKAR ESG REPORT 2022 CHAPTER TITLE

Annual report

2022

Disruptive

technologies,

Sustainable results

NEKKAR ESG REPORT 2022 CHAPTER TITLE

Key figures 4

The Board of Directors 6

The Board of Directors’ report 8

Corporate governance 21

Consolidated financial statements 28

Parent company financial statements 76

Auditors’ report 97

ESG report 104

Remuneration report 145

Statement on compliance 156

Being a sustainable company means

that we are never satisfied with the

status quo, but continuously improving.

NEKKAR ANNUAL REPORT 2022 KEY FIGURES

Based on alternative performance measures

2022 2021 2020 2019 2018

ORDERS AND RESULTS (MNOK)

Order intake 277 113 701 396 388

Order backlog 824 838 1,146 778 629

Revenue 388 480 359 267 220

EBITDA 62 140 77 36 17

EBITDA margin % 16.1% 29.1% 21.5% 13.5% 7.7%

BALANCE SHEET (MNOK)

Total assets 507 451 558 416 2,416

Total equity 351 316 203 234 514

Equity ratio % (total equity/total assets) 69.2 % 70.1 % 36.5 % 56.1 % 21.3 %

SHARE (NOK)

Share price 31 December 6.10 9.97 6.02 2.05

6.38

Basic earnings per share

0.30 1.04 -0.33 1.90 -0.33

EMPLOYEES

No. of employees 31 December 68 62 54 50 38

Sick-leave rate % 3.4% 2.2% 1.6% 0.7% 2.8%

1) As the IFRS regulations do not define order backlog/intake/ EBITDA the number should be considered as an APM

2) Basic earnings per share are based on net profit for the year attributable to ordinary equity holders of the parent company

3) Represents key figures for continued business only. Total assets includes NOK 1,916 million in assets held for sale.

4) Ex dividend payout of NOK 4.0 per share due to the Cargotec / MacGregor transaction

Key figures

NEKKAR ANNUAL REPORT 2022 KEY FIGURES

INTRODUCTION TO ALTERNATIVE PERFORMANCE

MEASURES (APMS)

Nekkar group (Nekkar) discloses alternative

performance measures in addition to those normally

required by IFRS. Nekkar is of the opinion that APMs

are providing enhanced insight into the operations

and prospects of the company. APMs are used as

an integral part of the Management and Board of

Directors’ key performance measure reporting and

controls. Furthermore, securities analysts, investors,

and other interested parties, frequently use such

performance measures.

PROFIT MEASURES

EBITDA is short for “earnings before interest, taxes’,

depreciation, amortization and impairment” in the

consolidated income statement in the annual report.

EBIT is short for “earnings before interest and taxes”.

EBIT corresponds to “operating profit/loss” in the

consolidated income statement in the annual report.

Margins such as EBITDA margin and EBIT margin are

used to compare relative profit between periods. The

margins are calculated as EBITDA or EBIT divided by

revenue.

ORDER INTAKE MEASURES

Order intake and order backlog are presented

as APMs as they are indicators of the company’s

revenue generation and operations in the future.

Order intake includes new signed contracts in the

period in addition to expansion of existing contracts

and any cancellations of contracts. For new build

contracts, the order intake is based on the signed

contract value excluding potential options and

change orders. For service contracts, the order intake

is based on the value of the service orders received.

Order backlog represents the estimated value of

remaining work for signed new build contracts and

does not include the value of service orders (included

in the order intake defined above).

WORKING CAPITAL:

Short term assets less bank deposits and cash in

hand, less current liabilities adjusted for short term

financial debt.

388

REVENUE

MNOK

507

TOTAL ASSETS

MNOK

EBITDA

MNOK

351

TOTAL EQUITY

MNOK

16.1

EBITDA MARGIN

PERCENT

69.2

EQUITY RATIO

PERCENT

NEKKAR ANNUAL REPORT 2022 THE BOARD OF DIRECTORS

The Board of Directors

Trym Skeie

Chair of the Board

Trym Skeie (b. 1968) is one of the main founders

of Skagerak Capital where he currently is a part

time partner. He holds either the Chair or Board of

Directors position in several venture and growth

companies in Norway, such as Noroff Education

and Vissim. In addition he holds his own investment

business through Skeie Alpha Invest and Skeie

Kappa Invest. He has been working as an Investment

Manager with Kistefos Venture Capital, management

consultant in Acccenture and as a structural design

engineer in Hydralift. Skeie holds a Master of Science

(M.Sc.) in Economics and Business Administration

from the Norwegian School of Economics (NHH),

and a M.Sc. in Civil Engineering from the Norwegian

University of Science and Technology (NTH).

Skeie has been Chair of the Board of Nekkar ASA

since November 2009.

As of 31 December 2022, Trym Skeie and associated

companies, hold 33 145 793 shares and zero share

options in Nekkar ASA.

Ingunn Svegården

Director of the Board

Ingunn Svegården (b. 1978) is SVP within

Renewables at Equinor ASA. She holds a master’s

degree in Chemistry and Biotechnology from the

Norwegian University of Science and Technology

(NTNU). Svegården has held several senior positions

within the Equinor group, as well as several non-

executive director roles in start-ups and funds.

Svegården has been Director of the Board of Nekkar

ASA since 2019.

Svegården holds no shares or share options in

Nekkar ASA.

NEKKAR ANNUAL REPORT 2022 THE BOARD OF DIRECTORS

Gisle Rike

Director of the Board

Gisle Rike (b. 1953) is Director of Property in

Rasmussengruppen AS, a major shareholder of the

Company. He holds an M. Sc. from the Norwegian

University of Science and Technology (NTNU). Rike

has various executive management experiences from

project management and business development from

Rasmussengruppen AS and Maritime Tentech AS.

Rike has been Director of the Board of Nekkar ASA

since 2015.

Rike holds no shares or share options in Nekkar ASA.

Marit Solberg

Director of the Board

Marit Solberg (b. 1956) is an independent board

member with extensive board experience. She has

a long career in senior management positions in

the seafood industry, including eight years as COO

Farming in Mowi ASA. Solberg has a high level of

technical and biological expertise within aquaculture

and holds a master’s degree in Marine Microbiology

from the University of Bergen (UiB).

Solberg has been Director of the Board of Nekkar

ASA since 2019.

As of 31 December 2022, Marit Solberg holds 98 809

shares and zero share options in Nekkar ASA.

NEKKAR ANNUAL REPORT 2022 THE BOARD OF DIRECTORS’ REPORT

The Board of

Directors’ report

Operational highlights 2022

• Operational EBITDA

of NOK 70 million compared

to NOK 143 million in 2021

• Order intake of NOK 277 million in 2022, a

significant increase from NOK 113 million in 2021

• Solid order backlog of NOK 824 million at year-

end 2022

• Service revenue from shiplift business increased

by close to 50 percent versus prior year

• BMS Heavy Cranes new innovation partner for the

SkyWalker wind turbine installation tool

• Viasat Inc joined Transocean and Nekkar in

the InteliWell joint venture, which secured its

breakthrough contract award in Q1 2023

• Completed successful test of a downscaled Starfish

without biomass - preparing for full-scale test with

biomass together with a major fishfarmer

• Ole Falk Hansen appointed CEO from 1 July 2022

Strategy and organisational

develoment

Nekkar is an industrial technology group offering

impact technologies combined with high-end

software and automation solutions. Nekkar combines

50 years’ heritage from the world’s number one

shiplift company, Syncrolift, with new investments

into sustainable and digitalised technologies

businesses that aim to unlock future customer-value

within large ocean-based industries such as offshore

energy, renewables and aquaculture.

The foundation of Nekkar’s business is world-class

mechanical engineering, electrification, automation

and digitalisation. Nekkar aims to apply this world-

class competence as levers to develop disruptive and

sustainable products combined with digital solutions

in selected industries such as offshore energy,

renewables and aquaculture.

Further, the unique combination of disruptive

technologies, automation sensor legacy, agile

digitalisation skills and open software platform

approach will be building blocks for future SaaS

(Software as a service) offerings from Nekkar.

BUSINESS OVERVIEW

Nekkar ASA is the holding company in the Nekkar

Group, which is headquartered in Kristiansand,

Norway. The company is listed on Oslo Stock

Exchange with the ticker code NKR. The business

operation in the Nekkar Group is organized in the

following four business areas:

• Shipyard Solutions

• Aquaculture

• Renewables

• Digital Solutions

While Shipyard Solutions, Aquaculture and

Renewables are business areas that operate

relativelyindependent of each other, the Digital

Solutions business area utilises its unique

competence to support the three other business

areas. The purpose is to enable digital business

models to capitalise on disruptive hard-tech design

to unlock additional revenue potential and drive

business value from SaaSrevenue.

Shipyard Solutions

Shipyard Solutions, i.e. Syncrolift, with its main

office in Vestby, Norway, is Nekkar’s main revenue

and cash-generating business.Syncrolift has local

presence in important markets through subsidiaries

in the US and in Singapore and a sales/service office

in Dubai.

1) EBITDA is short for “earnings before interest, taxes, depreciation, amortization and impairment”. Operational EBITDA also excludes

gains or losses from FX hedging contracts not qualifying for hedge accounting.

NEKKAR ANNUAL REPORT 2022 THE BOARD OF DIRECTORS’ REPORT

Syncrolift is the global market leader for shiplifts and

transfer systems offered to repair and newbuilding

yards. It delivers turn key and customized solutions

for shipyards and navy bases around the world.

The product range includes shiplifting systems for

launching and retrievals of vessels and transfer

systems for a fast and reliable way of moving vessels

around the yard. In addition, the company delivers

FastDocking

products for efficient operations

during docking and maintenance of vessels. As the

global market leader, Syncrolift has successfully

increased focus on the service and upgrade

capabilities related to the company’s installed base.

In 2022, Shipyard Solutions secured order intake of

NOK 277 million, a significant increase from NOK 113

million the year before. New awards included a USD

3.5 million contract to upgrade a shiplift and transfer

system that is installed at an undisclosed Egyptian

shipyard, a USD 5 million contract to upgrade an

existing shiplift for an undisclosed international

customer, plus a USD 10 million contract to upgrade

two third-party shiplift systems in Dubai Maritime

City. At year-end 2022, Shipyard Solutions’ order

backlog stood at NOK 824 million, which provides

strong visibility for the coming years. In 2022, Shipyard

Solutions received service and spare parts orders

worth NOK 95 million, up from NOK 63 million in 2021.

Aquaculture

Within the Aquaculture business area, Nekkar is

currently developing a full-scale version of its game-

changing “Starfish” closed fish cage which has high

sustainability impact potential on the aquaculture

industry.

“Starfish” is a fully automated, closed cage solution

that has double protection against escapes, avoids

problems with salmon lice due to water intake from

deep waters below the cage, and can collect up to 90

percent of biological waste. It is a solution that could

reduce OPEX levels dramatically for the fish farming

industry, while simultaneously improve fish welfare.

Ocean testing of the downscaled pilot version of

Starfish was successfully completed in 2022, with

highly promising results. Based on dialogue with

fish farmers, certain design improvements were

subsequently made to Starfish to further enhance

the go-to-market product with increased volume

and optimized operational aspects. During 2022,

Nekkar was in dialogue with fish farmers regarding

identification of appropriate sites for the first full-

scale test, but decision-making processes were

postponed because of the announced introduction

of resource rent tax on aquaculture activities. Next

step is to conduct a full scale pilot test with biomass

together with a fish farmer.

Renewables

Nekkar is within this business area developing a

disruptive wind turbine installation and service

tool that could significantly reduce the cost and

environmental footprint associated with wind turbine

installations and maintenance. The solution - called

SkyWalker - uses active heave compensation derived

from offshore lifting systems combined with digital

solutions that allows for remote-controlled and

automated solutions. Again, Nekkar’s competence

within electrification, automation and digitalisation

is being utilised to develop this potentially game-

changing technology.

In June 2022, Nekkar concluded wind tunnel testing

of a downscaled SkyWalker model, with test results

above expectations. The wind tunnel tests confirmed

that SkyWalker can operate in significantly stronger

wind speeds than the existing operating window for

today’s installation solutions. Nekkar has in recent

years worked together with Fred Olsen Renewables

and academia to develop the SkyWalker. In 2022, BMS

Heavy Cranes entered into an innovation agreement

for the development and testing of the SkyWalker.

BMS will participate, as Nekkar’s lifting and installation

partner, in testing the full-scale prototype and when

rolling out the technology to the market.

Nekkar’s original intention for SkyWalker was to

use it solely as a wind turbine installation tool, first

onshore and then for quayside assembly of offshore

wind turbines. However, requests from operators and

(OEMs) during the latter part of 2022 indicate that

they are also interested in deploying SkyWalker in

the operations and maintenance phase of an offshore

wind farm. This could expand its commercial potential

significantly.

NEKKAR ANNUAL REPORT 2022

Subsequent to year end 2022, Nekkar strengthened

its presence within both renewables and aquaculture

through taking over the employees and intellectual

property rights of Techano. A nine-person strong

engineering team with extensive industry experience

with product delivery and project executions within

renewables, aquaculture and marine industries, will

be a highly complementary addition of capability and

expertise to Nekkar’s existing team.

Digital Solutions

This business area is a competence hub that serves

the other business areas in Nekkar along with

customers outside the group. The business area

possesses unique competence within engineering,

electrification, digitalisation and automation. Intellilift

AS, where Nekkar owns a majority share (51%), is the

driving force behind the Digital Solutions business

area which develops open software platforms

for collection, monitoring and control of data for

numerous industries. Collecting data from numerous

different sensors, will improve the real time operation

as well as enable remote operation and robotization.

The business model will be threefold – project

based, perpetual upfront software licenses and SaaS

revenue, depending on customer preferences.

The resources in the Digital Solutions business

area support projects in Shipyard Solutions, and

software development for both the Starfish and

SkyWalker development projects. Late 2021, Intellilift

AS established a joint venture (JV), Inteliwell, with

a subsidiary of Transocean Inc. to accelerate the

decrease of drilling time through rig automation,

and to streamline well construction process through

developing new AI-driven processes and tools.

The JV provides software solutions that allow

operators to further improve the consistency of their

operations while reducing drilling costs through

more reliable and faster drilling operations. In 2022,

global communication company Viasat Inc. joined

the JV. Subsequent to year end Inteliwell signed its

first commercial contract. The four-year contract

is with an undisclosed major rig operator. Nekkar’s

subsidiary, Intellilift, will execute the project on behalf

of the joint venture during 2023.

THE BOARD OF DIRECTORS’ REPORT

KEY FIGURES, NEKKAR GROUP

MNOK 2022 2021

Revenue 388 480

Operational EBITDA 70 143

Reported EBITDA 62 140

EBIT 52 134

Operational EBITDA % 18.1% 29.9%

EBITDA % 16.1% 29.1%

Order intake 277 113

Order backlog 824 838

EPS (NOK) 0.30 1.04

388

Revenue

EBITDA

16.1%

EBITDA margin

1 1

NEKKAR ANNUAL REPORT 2022 THE BOARD OF DIRECTORS’ REPORT

PEOPLE AND ORGANIZATION

The different business units are managed by the

following executives:

• Shipyard Solutions: Rolf-Atle Tomassen

• Aquaculture: Mette Harv

• Renewables: Mette Harv

• Digital Solutions: Stig Trydal

Ole Falk Hansen was appointed CEO of the company

from 1 July 2022, at which point interim CEO Preben

Liltved took on a role as EVP Operations in Nekkar.

EMPLOYEES

The total number of employees in the Nekkar Group

was 68 at year-end 2022, compared to 62 in the

previous year. For Nekkar ASA similar number of

employees were 17 and 14, respectively.

Financial performance

FINANCIAL HIGHLIGHTS

• Nekkar Group’s revenue was NOK 387.5 million, a

decrease of 19.3 percent compared to 2021 (NOK

480.0 million).

• Nekkar Group’s operational EBITDA of NOK 70.3

million, equivalent to an operational EBITDA-

margin of 18.1 percent, versus NOK 142.6 million

and 29.9 percent in 2021.

• Reported EBITDA was NOK 62.2 million in 2022,

which equals an EBITDA margin of 16.1 percent,

versus NOK 139.8 million and 29.1 percent in 2021.

• Operating profit ended at NOK 51.8 million in

2022, compared to NOK 134.1 million in 2021.

• Strong order backlog of NOK 824 million (838)

per 31 December 2022.

• Solid order intake of NOK 276.8 in 2022, a

significant increase of 146.1 percent compared to

2021 (NOK 112.5 million).

PROFIT AND LOSS

Revenue for the Nekkar Group was NOK 387.5 million

in 2022, a decrease of 19.3 percent compared to 2021

(NOK 480.0 million). Reported EBITDA was NOK 62.2

million in 2022, down from NOK 139.8 million in 2021.

Operational EBITDA was NOK 70.3 million in 2022

compared to NOK 142.6 million in 2021, equivalent

to EBITDA-margins of 18.1 percent and 29.9 percent

respectively.

Pre-tax profit was NOK 42.6 million in 2022, down

from NOK 132.5 million the previous year. Profit after

tax was NOK 32.7 million and NOK 111.6 million for

2022 and 2021 respectively.

The solid 2022 results are a result of strong

operational and financial performance in Shipyard

Solutions. The reduction compared with 2021 profit is

impacted by customer driven delays in major shiplift

projects. In addition, 2021 was positively impacted

by several large shiplift projects being finalized with

successful completion.

Order intake in 2022 was NOK 277 million compared

to NOK 113 million in 2021. Nekkar’s order backlog

was still strong at NOK 824 million (838) per 31

December 2022.

Nekkar ASA

Revenue generated in Nekkar ASA in 2022 was NOK

11.5 million compared to NOK 5.3 million in 2021. The

operating profit was negative with NOK 37.8 million

compared to negative NOK 25.5 million in 2021. Profit/

(loss-) before tax for 2022 was negative NOK 38.3

million, versus NOK 167.5 million in 2021.

Shipyard Solutions

Shipyard Solutions generated revenues of NOK 383.4

million in 2022 compared to NOK 468.6 million in

2021. Reported EBITDA was NOK 88.8 million in

2022, a decrease from NOK 158.5 million in 2021. The

decrease is impacted by customer driven delays in

large projects in the newbuilding business. 2021 was

also in comparison positively impacted by successful

execution and delivery of five large projects with

related realization of project cost savings.

The 2022 reported EBITDA figures are negatively

impacted by losses on FX hedging contracts of NOK

8.1 million compared to loss of NOK 4.0 million in

2021. Shipyard Solutions has a strong order backlog

of NOK 824 million at the end of 2022 (837).

Digital Solutions

Intellilift delivered revenues of NOK 22.4 million in

2022 compared to NOK 41.8 million in 2021. A large

portion of the revenues are internally generated as

Intellilift’s products and solutions are integrated with

other segments of the group, e.g. deliveries of control

systems to Syncrolift.

NEKKAR ANNUAL REPORT 2022 CHAPTER TITLE

development of a turbine installation technology. As

of April 2023, NOK 6.5 million is received.

Gross capitalized development cost for SkyWalker

amounted to NOK 13.9 million in 2022. NOK 8.4

million in public grant from Innovation Norway and

SkatteFUNN was received during the year.

Nekkar will continue to apply for public funding to

help finance the technology development towards

innovative and sustainable solutions that are

designed to disrupt its target industry sectors.

See Note 1 for further details on the operating

segments.

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

Total assets at the end of 2022 were NOK 507.1

million, compared to NOK 451.2 million in 2021.

The net working capital (ref. definition of APMs)

was positive with NOK 85.7 million, compared to

positive with NOK 48.6 million at the end of 2021. The

group’s business practice may affect cash balances

substantially from time to time due to prepayments

(milestone payments) received from customers in

the newbuilding business of Syncrolift, which are

independent of when revenue recognition occurs.

Nekkar Group has during 2022 established an

overdraft facility and a revolving credit facility of in

total NOK 200 million with Nordea. No amounts has

been drawn under these facilities as of 31 December

2022. Additionally guarantee and currency facilities

are established with Nordea and DNB.

External revenues amounted to NOK 4.4 million in

2022 compared to NOK 10.4 million in 2021. The

reported EBITDA was NOK 4.0 million in 2022

compared to NOK 6.3 million in 2021.

Aquaculture and Renewables

Both business areas are in its development phase

and therefore has limited impact on the financial

performance. However, important progress has been

made during the year.

During 2022, ocean testing of the downscaled

protype version of Starfish, a closed cage for fish

farming was successfully completed, with highly

positive results. Certain design improvements were

made and dialogue with fish farmers regarding full-

scale test initiated.

Gross capitalized development costs related to

Starfish amounted to NOK 10.9 million in 2022 while

received public grant from Innovation Norway and

SkatteFUNN amounted to NOK 2.4 million.

In the Renewables area, the development of Nekkar’s

disruptive wind turbine installation tool, SkyWalker

has made good progress. In the first half of 2022,

the down-scaled (1:20) model of SkyWalker was

successfully tested, performing beyond expectations,

both in our facilities and in a wind tunnel laboratory.

Nekkar signed an innovation agreement with BMS

heavy industries as a potential partner for testing and

commercialization of SkyWalker.

In March 2021, Nekkar was awarded a grant of NOK 21

million from Innovation Norway to progress with the

Shipyard Solutions generated

revenues of NOK 383 million

in 2022 compared to NOK

469 million in 2021.

1 3

NEKKAR ANNUAL REPORT 2022

The reporting currency of Nekkar Group is NOK

(Norwegian krone). As substantial parts of both

income and expenses are denominated in foreign

currencies, fluctuating foreign exchange rates may

affect the group’s operating results. Nekkar Group,

therefore, works on reducing its exposure to currency

fluctuations by using hedging instruments. Nekkar

is using hedge accounting for FX contracts that

qualify for hedge accounting, while the remaining FX

contracts are measured at fair value through profit

and loss. For additional information, please refer to

the Accounting principles, section 2.9.

The consolidated accounts have been prepared in

accordance with the International Financial Reporting

Standards (IFRS) as adopted by the EU. The Board of

Directors affirms that the accounts provide a true and

fair view of the company’s financial position as of 31

December 2022. The Board of Directors is not aware

of any unreported events occurring subsequent to

the balance sheet date of 31 December 2022, which

may be material to the Nekkar Group or to the annual

accounts of 2022. See Note 23 Subsequent events,

for further information.

SHARE CAPITAL

At the end of 2022, Nekkar ASA had a share capital

of NOK 11.745.837 divided into 106.780.334 shares at

0.11 each. The company holds 6.632 own shares.

CASH FLOW

The reported cash flow on consolidated level from

operating activities was positive with NOK 38.0

million in 2022, compared to negative NOK 54.6

million in 2021. Positive operational cash flow in

2022 is driven by a solid results combined with

an increase in working capital of NOK 37 million.

Accrued non-invoiced production at the end of 2022

has to a large extent been converted to receivables

or cash in the first quarter of 2023, as projects has

reached milestones for invoicing.

Consolidated cash flow from investment activities

was NOK -22.4 million in 2022 which equals

acquisition and expenditures related to fixed and

intangible assets (capitalized development costs). In

2021, the net cash flow from investing activities was

NOK -124.6 million. The cash flow in 2021 was highly

impacted by the NOK 94 million settlement of the

Macgregor / Cargotec arbitration.

In 2022, net cash flow from financing activities on the

consolidated level was NOK -8.8 million, compared

to NOK -1.4 million in 2021. The 2022 figure includes

issuance of share capital in relation to employee

share purchase program of NOK 2.1 million compared

to NOK 1.1 million in 2021.

Nekkar had a net cash position of NOK 181.3 million

at year-end 2022, of which NOK 10 million is held as a

deposit for FX-derivative exposures in DNB. Nekkar’s net

cash position at year-end 2021 was NOK 174.5 million.

In 2022, the parent company’s net cash flow from

operating activities was negative with NOK 29.8

million (2021: MNOK -25.8), net cash flow from

investments NOK -67.4 million (2021: MNOK -45.1),

and net cash flow from financing was positive with

NOK 136.6 million (2021: MNOK -103.4).

The company or group had no net interest-bearing

debt as of 31 December 2022, but has established

credit facilities of in total NOK 200 million during 2022.

RESEARCH AND DEVELOPMENT

The research and development (“R&D”) activities of

Nekkar are closely linked to the strategy of developing

disruptive technologies that offer high sustainability

impact for ocean-based industries. R&D initiatives

have shown good progress during 2022, and in the

beginning of 2023. The highlights are:

• Successful ocean testing of Starfish, a highly

innovative closed fish cage solution that is

designed to reduce environmental impact and

operating expenditures for the fish farmers.

• Completed wind turbine testing of the downscaled

SkyWalker wind turbine installation tool.

• Within the Digital Solutions area, development

of Nekkar’s digital platform and remote-control

systems continued.

In 2022, gross capitalized development costs

amounted to NOK 32.9 million (MNOK 28.7), of which

NOK 10.9 million is related to the development of

Starfish, NOK 13.9 million on SkyWalker and NOK 8,1

million related to product development within the

Digital Solutions segment.

Received public grants from Innovation Norway and

SkatteFUNN are treated as a reduction of capitalized

THE BOARD OF DIRECTORS’ REPORT

NEKKAR ANNUAL REPORT 2022

development costs. This amounted to NOK 12.5

million in 2022, hence net capitalized development

costs were NOK 20.1 million. In 2021, net capitalized

development costs were NOK 21.2 million.

Gross capitalized development costs in Nekkar

ASA were NOK 24.8 million in 2022 and public

grants amounted to NOK 10.8 million, hence the net

capitalized amount was NOK 14.0 million. In 2021, the

net capitalized amount was NOK 15.4 million.

As per 31 December 2022, capitalized development

costs in the consolidated balance sheet amounted

to NOK 50.9 million. In Nekkar ASA, capitalized

development costs were NOK 22.7 million as of 31

December 2022.

Cost from other development activities related to

customer specific projects, may in some cases be

charged to the profit and loss as an operating expense.

ORDER BACKLOG

Nekkar’s order backlog at the end of 2022 was NOK

824 million, down from NOK 838 million at year-end

2021. This backlog is mainly related to newbuilding

projects in the Shipyard Solutions business.

GOING CONCERN

As of 31 December 2022, the equity ratio at

consolidated level was 69.2%. There was no interest-

bearing debt on neither consolidated nor Nekkar ASA

level at year-end 2022.

The financial objective of the group is to have

sufficient cash reserves or credit lines available to

finance operations and investments on an ongoing

basis. The group’s cash position combined with

established credit facilities, guarantee and currency

facilities are considered sufficient to fund the existing

business plan at least mid-term.

In accordance with Section 3-3 of the Norwegian

Accounting Act, the Board of Directors confirms

that the financial statements have been prepared

based on the going concern assumption and that the

requirements are fulfilled.

Risk factors and risk management

The Nekkar Group is exposed to various markets,

financial and operational risks and as experienced from

latter events, also political and health-oriented risks.

The Board of Directors reviews operating reports

from management on a monthly basis. In addition to

the continuous risk mitigation, the Board of Directors

and management carry out specific risk analyses in

connection with major investments and contracts.

Specific risk areas or projects are continuously

monitored and assessed. The group has furthermore

implemented thorough procedures related to

contract approvals and authorization matrixes.

Near term, the group is mainly exposed towards the

shipyard business, but as the new business areas

increase in importance and size, the group will be

exposed in other market segments as well. The

prevailing business strategy is planned to be funded

with cash flow from operations.

MARKET RISKS

There are a number of risks related to the market

development for Nekkar’s products and services.

Nekkar monitors these risks through its sales network

and by available information on relevant trends.

Shipyard Solutions is the main business of the

group. The activity in the market is depending on

the construction and upgrade of navy bases and

THE BOARD OF DIRECTORS’ REPORTTHE BOARD OF DIRECTORS’ REPORT

Nekkar’s order backlog at the end

of 2022 was NOK 824 million

1 5

NEKKAR ANNUAL REPORT 2022

shipyards, which is suitable for the Syncrolift® shiplift

systems and solutions.

Expected future demand for the current product

portfolio depends on the shipyards’ need to

implement more efficient production lines which

again depends on the general market activity.

Currently there are no signs long term that the yard

industry will reduce its focus on increased productivity.

Syncrolift AS has a solid order backlog for its 2023

new building business in addition being part of

several tender processes for new projects. It is also

positioned for accumulative success in acquiring

recurring service business. Scheduled deliveries for

the current project portfolio extend into 2025.

Renewables and aquaculture, which represents the

group’s new investments, are product development

projects. For these business areas the risk factors

mainly relate to commercialization. Digital Solutions

(Intellilift) has proven commercialized technology

and the products have been sold to both oil and gas

related business and the wind industry.

CLIMATE RISK

Nekkar develops digitalised impact technologies that

aim to unlock customer value, including reduction

of environmental footprint and CO2-emissions,

in numerous industries including renewables,

aquaculture, shipping and offshore energy. As

such, climate change represents both a risk and

an opportunity for Nekkar. Nekkar considers its

main climate risks to be associated with the global

ambition/implementation gap for the transition to

more renewable energy, as well as climate policy

and taxation changes that could limit or delay

the adoption of Nekkar’s new technologies that

are enablers to reduce the carbon footprint in the

industries the company operates. This applies to both

the renewables and aquaculture industries.

Nekkar’s exposure to the offshore energy industry

is limited today, but could grow in the coming years.

The offshore energy industry has been identified

as high risk by the Task Force on Climate-Related

Financial Disclosures, and the industry is under

pressure to reduce its emissions. Although the

Ukraine war and associated energy shortage in

Europe is likely to result in heavy investments in the

offshore energy industry in the coming years, there is

a long term risk of declining investment in upstream

oil and gas. However, the software and technologies

that Nekkar delivers are capable of significantly

reducing drilling time and amount of personnel

required offshore, thereby substantially reducing the

carbon footprint associated with this type of offshore

operations. As such, climate-related risks also

represents an opportunity for Nekkar.

The energy transition may shorten the expected

useful lives of oil and gas related assets, which has

the potential to accelerate depreciation charges.

However, Nekkar is primarily a software supplier to

the offshore energy industry, which means that the

company does not expect assessment of effect on

useful lives to have significant accounting impact.

Another climate risk is the increase in the frequency

and intensity of extreme weather events. As the large

majority of Nekkar’s operations in based in Norway,

this expectation is not assessed to lead to any effects

on expected useful economic life of property, plant and

equipment. However, extreme weather could result in

delayed project progress, for example for installation

of shiplifts in parts of the world that are more exposed

to extreme weather. This could potentially mean that

revenue and margin recognition could be delayed in

such projects. Nekkar has not experienced any delays

caused by extreme weather events during 2022.

Overall, it is Nekkar’s view that the company is

well positioned to profit from a stronger focus on

reducing emissions from the industries the company

operates within, and that there are more positive

business opportunities than negative risks associated

with stronger industry efforts on reducing emissions

and combating climate change.

Nekkar has considered the impact of climate change

on going concern. Effective assessment and analysis

of climate-related risks and opportunities is vital to

understand the potential impacts of climate-related

risks on asset valuations, revenue and investment

requirements. For 2023, Nekkar has therefore

defined an objective to conduct a detailed climate

risk analysis and set carbon footprint reduction goals

for the company.

NEKKAR ANNUAL REPORT 2022

FINANCIAL RISKS (SHORT TERM FINANCING)

The Nekkar Group is exposed to credit, liquidity and

currency-related risks, and has adopted an active

approach to managing risk in the financial markets.

The aim of the group’s financial strategy is to be

sufficiently robust to withstand adverse conditions.

The financial risks related to credit, liquidity, and

currency are described below.

Credit risks represent potential financial losses

stemming from contractual partners’ failure to fulfil

their contractual obligations. Developments in the

part of the shipyard business applicable for Syncrolift

have historically resulted in only modest losses on

payments from customers.

With the understanding that substantial credit risks

can be present, Nekkar Group has taken measures

to limit these risks through evaluating the financial

strength of its contract partners, restricting credit

and utilizing mechanisms to secure payments, such

as letters of credit and prepayments. Nekkar works

continuously to limit its exposure to credit risks.

The liquidity risk is related to a situation in which

Nekkar Group may be unable to meet short-term

financial demands and fulfil its obligations as they

fall due. In order to monitor liquidity risk, Nekkar

prepares, on regular basis, rolling cashflow forecasts

to predict liquidity requirements. The group’s overall

cash position is satisfactory and evaluated to be

sufficient to fund the prevailing business plan in

combination with the credit, guarantee and currency

facilities, established with its bank relations.

The company will in addition to the operating cash

flow normally have access to capital markets for

further funding with the option to finance activities

through either equity or debt or a combination.

In order to manage currency risks, Nekkar’ policy

is to hedge significant currency exposures within a

24-month period. The hedging is performed based on

firm contracts for sale or purchase in currencies other

than the functional currency of the Nekkar unit entering

into the hedging contract. Hedge accounting is applied

for the hedging contracts that qualify as hedging of

firm commitments in accordance with IFRS 9. Hedging

contracts not qualifying for hedge accounting are

measured at fair value through profit and loss.

OPERATIONAL RISKS

Nekkar Group’s new-build business is primarily

organized through deliveries of completed projects.

The operational risks related to the project execution

are mainly deliveries from sub-suppliers, project

management, and customer related issues.

During the tender phase, projects undergo a

thorough risk evaluation in order to identify and

mitigate potential technical and commercial risks

in addition to an assessment of other potential

risk areas, and the level of contingency required.

Measures have been implemented to ensure that

projects are being satisfactorily assessed both

prior to signing the contracts and during execution

phase. The bid review process, where major risks are

evaluated before a binding offer is sent to potential

customers is an essential part of the procedures.

Nekkar will continue to focus on improving its risk

monitoring and assessment tools, as well as its

project management tools.

GLOBAL PANDEMIC RISK

High vaccination rate in Nekkar’s home market has

limited the impact of Covid-19 in 2022. However,

there are still great disparities in vaccination rates

worldwide. As such, the Covid-19 pandemic may still

have negative influence on Nekkar’s international

operations also in 2023 and it is difficult to estimate

the effects on the operations for the full year. A

new negative development of the Covid-19 situation

or other pandemics globally or in key countries or

regions may impact Nekkar in the following manner:

• Personnel may not be able to perform their work

due to illness, quarantines, travel restrictions and

social distancing

• Manufacturing sites, service bases or office

buildings may be shut down

• Supplies from suppliers and deliveries to clients

may be delayed

• Available future market could decrease as clients

reduce CAPEX expenditure

GEOPOLITICAL RISK

The invasion of Ukraine by Russian forces has led to

increased geopolitical risk which have significantly

impacted both the energy- and raw material prices.

THE BOARD OF DIRECTORS’ REPORT

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NEKKAR ANNUAL REPORT 2022

Nekkar has no business activity in either Russia,

Ukraine, or Belarus, however the company may be

negatively affected by increased raw material prices

and uncertainties in the market if the situation will

be long-lasting. In general, the business outlook for

Nekkar is positive, but it is difficult to predict short,

medium and long-term effects on all business lines

from a potential escalation of the war. However,

Nekkar’s Shipyard Solutions business has a large

number of navy customers. Increased geopolitical

risk often means increased defence spending. As

such, this also represent a business opportunity for

Nekkar.

Corporate social responsibility

Nekkar is part of a global industry where what is

good for the globe and the people, and what is good

for business are more closely related than ever. Our

ability to create value is dependent on promoting and

maintaining high ethical standards to create a trust-

based relationship with our employees, our owners,

our business partners, our communities, and other

stakeholders.

Nekkar is dedicated to conducting our activities in

an ethical and responsible way; aiming at sustainable

development for employees, customers, investors,

and the communities in which we operate. Our

policies for corporate social responsibility encompass

QHSE, business ethics, support for human and

employee rights and anti-corruption measures.

Nekkar is committed to follow OECD’s Guidelines

for Multinational Enterprises and contributing to the

improvement of international business standards

and practices, especially with regard to corruption,

labor relations and the global environment. Nekkar

operates in a manner that respects the human rights

as set out in the UN’s Universal Declaration of Human

Rights and the core conventions of the International

Labor Organization.

Nekkar releases its forth ESG report this year. The

report is based on the Global Report Initiative (GRI)

Standard and Euronext guidance on ESG reporting.

The Nekkar ESG report also includes a section

on Nekkar’s adhering to the Transparency Act, a

Norwegian legislation, which requires companies

to promote respect for human rights and decent

working conditions. The ESG report can be found in

this annual report and on Nekkar’s website. Nekkar

will also publish a reporting on human rights in line

with the Transparency Act reporting requirements

within 30 June 2023. The report will be published on

Nekkar’s website, www.nekkar.com

Nekkar gives high priority to creating a working

environment where employees thrive and develop as

humans and professionals. We support our workers’

opportunities to exercise their employee rights and

to be organized through trade and labor unions, and

we facilitate annual meetings for global employee

representatives. Nekkar is also an advocate for

equal rights for all employees regardless of gender,

sexual orientation, disability, ethnicity, religion or

politicalorientation.

The Nekkar Code of Conduct describes Nekkar’s

ethical commitments and requirements to expected

behavior in areas such as anti-corruption and conflict

of interest. It sets expectations for personal conduct

and business practice.

The Code includes our most important ethical

principles and provides some references to more

detailed requirements for expected business and

personal conduct. The Code applies to the Nekkar

companies, board members, management and

employees, including temporary personnel and

consultants or contractors that act on Nekkar’s

behalf. Nekkar has also developed a separate policy

applying to our subcontractors.

Nekkar has zero tolerance for corruption and

encourages its employees to report suspected

infringements.

For more information, please see the ESG report at

page 104 of this document.

Quality, Health, Safety and

Environment (QHSE)

The Board of Directors believes that a proactive

QHSE policy is a precondition for the successful

development of a long-term sustainable and

profitable business to the benefit of customers,

employees, shareholders and all other stakeholders.

THE BOARD OF DIRECTORS’ REPORT

NEKKAR ANNUAL REPORT 2022

The Nekkar Group therefore never compromises on

issues of quality and safety and has committed itself

to a zero-harm-and-fault policy.

Nekkar always operates with worker safety and

environmental sensitivity at the forefront and supports

a company culture characterized by strong day-to-

day compliance with high QHSE standards. Our QHSE

ambitions are to cause no harm to people or to the

environment, to prevent accidents and damages to

property and to avoid faults and non-conformities that

may influence the quality of all deliveries.

The group comprises of companies and business

areas that differ in size, operate in different business

segments and face different legislative systems.

The Board of Directors advocates a consistent

QHSE policy at corporate level, and common QHSE

reporting procedures are applied.

The group also welcomes a general, global tendency

towards more stringent QHSE requirements from

customers, contributing to fair competition based on

quality, experience, efficiency and technology, and

with no compromise on safety.

All employees are accountable for contributing to

their own health, safety and wellbeing as well as that

of their colleagues. Managers at all levels, however,

have a special responsibility to monitor and mitigate

any safety risks and to contribute to the improvement

of management systems and Nekkar’s QHSE

performance.

The skilled and dedicated workers of Nekkar are the

group’s most important success factors, and the

Board of Directors wishes to express their gratitude

to all employees for their contribution in 2022.

Nekkar has a strong focus on risk awareness, and the

Board of Directors urges management to continue

promoting a culture of workplace injury prevention.

Reported absence due to illness was 3.4 percent in

2022 (2.2 percent in 2021). Nekkar experienced zero

workplace incidents resulting in the need for medical

treatments in 2022 (nil in 2021).

Nekkar continuously works towards ensuring a healthy

and motivating working environment for its employees.

Efforts are made to encourage joint corporate culture

based on the core values described above.

Environment

Nekkar takes care to avoid any negative impact of its

operations on the physical environment although the

group’s activities are viewed to have limited impact

on the external environment. Measures are taken to

ensure that operations are conducted in accordance

with applicable environmental standards.

The use of products delivered by Nekkar represents

limited risks of environmental pollution. The Nekkar

Group’s operations are not regulated by any licenses

or regulatory orders.

Nekkar conducts climate accounting on Scope 1, 2

and 3. For more information, please see the ESG

report at page 104 of this document.

THE BOARD OF DIRECTORS’ REPORT

Nekkar is dedicated to conducting

our activities in an ethical and

responsible way

1 9

NEKKAR ANNUAL REPORT 2022

Equal opportunities

Nekkar promotes a working environment that offers

equal rights, equal treatment and equal opportunities

to everyone regardless of gender, religion, disabilities

and ethnic background. It is an important goal that all

employees experience equal possibilities regarding

their professional and personal development.

Engineers make up the majority of Nekkar’s workforce

and represent a profession where women historically

have been underrepresented. The challenge of

attracting women to the field is reflected by the

fact that women constituted only 18 percent of the

workforce in 2022 (2021: 21 percent). Consequently,

the Board of Directors considers it important that

Nekkar complies with a recruitment policy where it is

more attractive for women to join the company.

Two out of the corporate management team’s five

members is female. The Board of Directors of Nekkar

ASA consists of two persons of each gender.

Pursuant to the law prohibiting discrimination based

on disabilities (the Norwegian Anti-Discrimination

and Accessibility Act), Nekkar has made efforts,

where applicable, to locate operations and

implement office layout in a manner that enhances

accessibility for everybody, and make reasonable

workplace accommodations to meet the needs of

employees with hearing or sight impairments.

Board of Directors

The Board of Directors consists of Trym Skeie (Chair), Marit

Solberg (Vice Chair), Gisle Rike and Ingunn Svegården.

At the Annual General Meeting held 30 May 2022,

Trym Skeie and Gisle Rike were re-elected for a

period of two years. Marit Solberg and Ingunn

Svegården were not up for re-election.

Insurance for board members and

management

Nekkar ASA has a directors’ and officers’ liability

insurance which includes the board members and

management in Nekkar ASA and subsidiaries. The

liability limit is NOK 75 million.

Auditor

KPMG is the elected auditor for Nekkar ASA.

Board statement on corporate

governance

The Nekkar Board of Directors adheres to good

corporate governance standards and uses the

Norwegian Code of Practice for Corporate

Governance as a guideline. A more detailed account

of the applicable principles for corporate governance

is provided as a separate Corporate Governance

section in the annual report. Resolutions from the

General Meetings are published on the company’s

website, www.nekkar.com.

Shareholder structure and limitation

The shares of Nekkar ASA are publicly traded at the

Oslo Stock Exchange, where the company trades

under the ticker code NKR. All shares are identified

by the owner’s name. As reflected in the company’s

Articles of Association, there are no restrictions

to voting, or to the transfer of share ownership,

nor are there any mechanisms in effect aimed at

preventing takeovers. Nekkar ASA has one class

of shares, and each share confers one vote at the

General Meeting. There is no specific representation –

neither individually nor jointly – for shares owned by

employees of Nekkar.

Capital structure

Nekkar Group’s total equity at the end of 2022 was

NOK 351.0 million, of which NOK 330.9 million was

attributable to the majority, and NOK 20.1 million was

attributable to the non-controlling interests.

The equity to total assets ratio was 69.2% at the

end of 2022, compared to 70.1% in 2021. At the end

of 2022, the equity in Nekkar ASA was NOK 312.9

million, of which NOK 5.9 million was share premium

capital, NOK 11.7 million share capital and NOK 295.2

million other equity. Comparable figures from year

end 2021 were NOK 341.1 million, NOK 3.9 million,

NOK 11.7 million and NOK 325.6 million respectively.

THE BOARD OF DIRECTORS’ REPORT

NEKKAR ANNUAL REPORT 2022

Outlook

Nekkar’s Shipyard Solutions business area entered

2023 with an order backlog of NOK 824 million, which

provides good visibility for 2023 and 2024.

Order intake in 2022 was NOK 277 million, which

was significantly higher than the previous year,

reflecting high tendering activity in the Shipyard

Solutions business area throughout the year. The

market situation for newbuild projects within Shipyard

Solutions remains promising. Investment decisions for

newbuild projects may still see some delays.

In 2019, Nekkar initiated a project to generate more

service revenues from Syncrolift’s extensive global

installed base of ship lifts and transfer systems. The

aging installed base provides a solid foundation for

both upgrades and replacements of existing systems.

This strategic effort has started to yield strong results.

In 2022, Nekkar’s order intake from aftersales and

services grew by 30 percent year-over-year, from

NOK 73 million to NOK 95 million. Service revenue

increased to NOK 68 million in 2022, up almost 50

percent from NOK 46 million in 2021. Nekkar expect

this positive development to continue in 2023.

Intellilift, which is the heart of Nekkar’s Digital

Solutions business area, continues to play an

important role in developing Syncrolift’s digital

platform. The company is also well positioned for

further growth in different sectors going forward. With

a developed digital platform based on its IP, Intellilift

offers solutions for both renewables, aquaculture and

its traditional market within the offshore oil and gas

industry. Subsequent to year-end 2022, the InteliWell

JV, which Intelillift is part of, signed its first commercial

contract. The four-year contract is with an undisclosed

major rig operator. Nekkar’s subsidiary, Intellilift, will

execute the project on behalf of the JV during 2023.

The contract consists of a fixed sum project amount

plus service fee throughout the contract period. The

successful implementation of this contract is likely to

open up further rig market opportunities that may

generate further revenue in 2023, depending on

timing of awards.

Investments in the oil and gas industry is currently

at a high level due to a high oil price level, partly

impacted by the European energy crisis caused

by Russia’s invasion of Ukraine. Investments into

development of oil and gas are expected to remain

high in the coming years. This, coupled with a demand

to reduce emissions from oil and gas developments

and production, could result in increased demand for

Intellilift’s products and technologies.

Nekkar’s Aquaculture business aims to secure

agreement with a fish farmer for full scale test of

“Starfish” with biomass. The Norwegian government’s

announced resource rent tax on aquaculture

production has postponed major planned investment

in the seafood industry. A clarification on the exact

taxation level and structure is likely to have a positive

effect on investment decisions.

Nekkar’s Renewables business area will continue its

development of the SkyWalker wind turbine installation

tool and together with developers explore opportunities

for installation and major component exchange for both

bottom-fixed and floating offshore wind.

The market outlook for the renewables industry

which Nekkar is targeting with its SkyWalker tool,

is promising with investment levels predicted to

grow substantially in the coming years and decades.

Furthermore, on March 29 2023 the Ministry of

Petroleum and Energy announced a competition

for project areas for offshore renewable energy

production in two areas on the Norwegian continental

shelf: Sørlige Nordsjø II and Utsira Nord, which

provides additional opportunities for SkyWalker and

Nekkar. Increased pressure on profitability for wind

farm developers and operators could also stimulate

interest in more cost-efficient wind turbine installation

tools such as the SkyWalker.

THE BOARD OF DIRECTORS’ REPORT

Kristiansand, 27 April 2023

Board of Directors, Nekkar ASA

Trym Skeie

Chairman

Gisle Rike

Director

Ole Falk Hansen

CEO

Ingunn Svegården

Director

Marit Solberg

Director

2 1

NEKKAR ANNUAL REPORT 2022

The Board of Directors (“the Board”) of Nekkar ASA (“Nekkar” or the “Company”

is responsible for ensuring that the Company is organised, managed and

controlled in an appropriate and satisfactory manner in full compliance with

applicable laws and regulations.

Compliance with generally accepted corporate

governance guidelines is important because it

contributes to:

• reduced risk

• enhanced values in the best interests of all

stakeholders

• fair treatment of all stakeholders

• strengthened confidence and attractivity

• desired conduct

The Board considers compliance with generally

accepted corporate governance guidelines as an

important prerequisite for long-term value creation.

The Company strives to ensure that its internal

control mechanisms, organisation and management

structures comply with good corporate governance

principles.

Nekkar seeks to comply with the Norwegian Code of

Practice for Corporate Governance (the “Corporate

Governance Code”), last revised on 14 October

2021, which is available at the Norwegian Corporate

Governance Committee’s website www.nues.no.

The principal purpose of the Corporate Governance

Code is to ensure (i) that listed companies implement

corporate governance that clarifies the respective

roles of shareholders, the board of directors and

executive management more comprehensively than

what is required by legislation and (ii) effective

management and control over activities with the aim

of securing the greatest possible value creation over

time in the best interest of companies, shareholders,

employees and other parties concerned.

The following statement explains how Nekkar

addresses the 15 governance topics covered by the

Code.

Corporate governance

CORPORATE GOVERNANCE

NEKKAR ANNUAL REPORT 2022

1. Implementation and reporting on

corporate governance

The Board is aware of its responsibility for

implementation of internal procedures and

regulations to ensure that the company and its

subsidiaries (“the Group”) complies with applicable

principles for good corporate governance in line with

Norwegian and applicable international standards.

The Board actively adheres to this.

Good corporate governance is an integral part of the

decision-making process in matters dealt with by

the Board. Governing structures and controls help

to ensure that the policy is enacted upon. The work

of the Board is based on defined division of roles

and responsibilities between the shareholders, the

Board and management. Nekkar has implemented

specific set of rules and procedures for the

Board, constituting the governance structure and

administrative procedures for their work.

According to Nekkar’s own evaluation, the company

deviates from the Corporate Governance Code on the

following points:

• Item 6: Nekkar deviates from the recommendation

to have all board members present at the general

meeting as the company deemed it satisfactory

to require the presence of the chairperson of the

Board, the chairperson nomination committee,

the auditor, and the CEO. Nekkar also deviates

from the recommendation to establish routines

for appointment of an independent person to

chair the general meeting. In case particular

items on the agenda requires such measures, the

Board will consider appointing an independent

chairperson.

• Item 9: Nekkar does not have an audit committee.

Pursuant to Nekkar’s Articles of Association, the

complete Board serves as audit committee of

the company provided that the Board at all times

satisfies the requirements in the Norwegian Public

Limited Liability Act section 6-42. Considering a

lower complexity level in the business after the

disposal of the maritime and offshore business, as

well as the reduced number of Board members,

the Board deems it sensible that all members are

equally informed about the accounting issues.

• Item 9: Nekkar does not have a remuneration

committee. Instead, the Board resolves matters

relating to compensation paid to the executive

personnel. As all Board members are independent

of the Company’s executive personnel, it is the

Board’s view that it is a suitable body to help

ensure a thorough and independent preparation

of matters relating to compensation paid to the

executive personnel.

• Item 14: Due to the unpredictable nature of a

takeover situation, the Company has decided

not to implement detailed guidelines on take-

over situations. In the event of a takeover, the

board of directors will consider the relevant

recommendations in the Corporate Governance

Code and whether a potential situation entails

that the recommendations in the Corporate

Governance Code can be complied with or not.

Corporate governance in Nekkar is subject to regular

reviews and discussions by the Board.

2. Business

Nekkar (OSE: NKR) is an industrial technology

group offering impact technologies combined with

high-end software solutions. The group combines

50 years’ heritage from the world’s number one

shiplift company, Syncrolift, with new investments

into sustainable, digitalised technology businesses

that aim to unlock growth within ocean-based

industries such as offshore energy, renewables and

aquaculture, and make them more sustainable and

productive. Nekkar’s investments in development of

the “Starfish” closed fish cage and the “SkyWalker”

wind turbine installation tool, are examples of how

this strategy is implemented.

Nekkar is a public limited liability company organized

under the laws of Norway and subject to the

provisions of the Norwegian Public Limited Liability

Companies Act.

Nekkar’s objective is currently defined in the Articles

of Association as follows:

The company’s purpose is to engage in industrial

activities and related matters such as direct and

indirect investments in companies carrying out

industrial activity, as well as active ownership of the

different companies.

CORPORATE GOVERNANCE

2 3

NEKKAR ANNUAL REPORT 2022

Nekkar’s operations are based on cross border trade,

and interaction with people from many countries

and different cultures. Nekkar embraces social

responsibility by increasing the understanding of

cultural differences, seeking to increase tolerance.

The company has approved more specific guidelines

for Corporate Social Responsibility (“CSR”) based on

the principles of the UN Global Compact about CSR

related to human rights, labour, environment and

anti-corruption.

In addition, Nekkar each year publishes a

sustainability report where it presents the main

social, societal, and environmental challenges

Nekkar faces, and how the company approaches

them. Following dialogue with the company’s key

stakeholders, Nekkar has identified three priority

areas, health and safety, ethics and anti-corruption

and the environment – that are integrated with the

company’s business strategy, and the goals are each

year defined to improve Nekkar’s performance within

these areas.

To discuss and evaluate goals, strategy and risk

profile, the Board conducts an annual two-day

strategy meeting, where the main purpose is to set

the long-term direction for the company.

A further description of the company’s operations,

goals, strategy, and risk profile is provided in

the group’s annual report, which shows how the

company’s operations and strategies are aligned with

objectives defined in the Articles of Association.

3. Equity and dividends

The company’s solidity is continuously assessed

based on the company’s goals, strategies and risk

profile. Total assets at the end of 2022 were NOK

507.1 million and the company’s equity was NOK

350.1 million, providing an equity-to-assets ratio of

69.2 percent.

Nekkar aims to give shareholders a competitive

long-term return that reflects the risk inherent in the

company’s operations. Based on Nekkar’s capital

structure and growth strategy, the shareholders’

return should be realized mainly through an increase

in the value of their shares. However, dividends and

share buybacks may also be relevant in the future,

if and when the circumstances permit it. Growth

through acquisitions will be funded through a

balanced mix of equity and debt.

The Annual General Meeting determines the annual

dividend, based on the Board’s proposal. The Board

has not proposed a dividend payment for the 2022

financial year.

The shareholders can give the Board the authority to

increase the share capital or purchase the Company’s

own shares at the Annual General Meeting. However,

such mandates should be intended for a defined

purpose.

The General Meeting has given the Board

authorisations to increase the Company’s share

capital. This may be used in order to further develop

the company and/or in connection with acquisitions of

business or assets within the same or corresponding

sector as the Company, and in connection with issuing

shares to employees and/or board members of the

Company. The General Meeting has also granted

the Board authority to buy own shares for deletion

or to use them as part of part of remuneration of

employees. All the authorisations expire at the annual

general meeting of the Company in 2023, and 30 June

2023 at the latest.

4. Equal treatment of shareholders

Equal treatment of all shareholders is a core

governance principle. Nekkar has one class of shares

and is listed on Oslo Stock Exchange under the ticker

symbol NKR. Each share carries one vote at the

General Meeting.

In situations where normal preferential rights shall be

deviated from, the Company’s Board is proposed to

prepare grounds for such a decision in accordance

with the Norwegian Code of Practice for Corporate

Governance and shall present these to the General

Meeting.

Own shares are purchased through ordinary trade

on the Oslo Stock Exchange if applicable. On 31

December 2022, the Company owned 6,632 shares.

CORPORATE GOVERNANCE

NEKKAR ANNUAL REPORT 2022

5. Share and negotiability

All Nekkar shares carry equal rights and are

freely negotiable and the Company’s articles of

association do not contain any form of restriction on

negotiability.

6. General meetings

The interest of the company’s shareholders is

exercised at the General Meetings (GM). The Annual

General Meeting is usually held end of May or

beginning of June. The meeting for 2023 is scheduled

on 30 May 2023.

The General Meetings deal with and decide on the

following matters:

• Adoption of income statement and balance sheet.

• Application of profit or coverage of deficit

pursuant to the adopted income statement and

balance sheet as well as distribution of dividends.

• Election of board of directors. The general

meeting shall elect the chairman of the board and

the vice-chairman of the board.

• Other issues that pursuant to the provisions of the

Norwegian laws and Articles of Association are to

be treated by the General Meeting.

All shareholders with known address registered in

the Norwegian Central Securities Depository (VPS)

will receive an invitation to the GM. The invitation

is sent at least three weeks prior to the meeting.

Other documents will be made available at Nekkar’s

website. A shareholder may request a print of

documents relating to matters to be dealt with at the

GM.

The deadline for shareholders to give notice of their

intention to attend the meeting is one day prior to the

meeting.

Shareholders who are unable to attend the GM may

vote by proxy. The proxy form is designed in such a

way that voting instructions may be given for each

item on the agenda.

The Company’s Board chooses whether to hold

the general meeting as a physical meeting or as an

electronic meeting.

The chairperson of the Board, the chairperson of

the nomination committee, the auditor, and the CEO

are present at the GM, in addition to other Board

members when appropriate. The chairperson of the

Board opens the GM and is normally elected to chair

the meeting.

Nekkar has not deemed it necessary to require the

presence of all members of the Board at the GM.

Nekkar also deviates from the recommendation to

establish routines for appointment of an independent

person to chair the GM. In case of particular items on

the agenda requiring such measures, the Board will

consider appointing an independent chairperson.

All shares carry an equal right to vote at General

Meetings. Resolutions at GMs are normally passed

by simple majority unless otherwise is required by

Norwegian law.

The minutes of the GM are made available on

Nekkar’s website and published to the Oslo stock

exchange.

7. Nomination committee

Pursuant to Nekkar’s Articles of Association, the

nomination committee shall consist of 2-3 members,

independent of the Board and management.

The committee nominates candidates to the Board

and proposes Board members’ remuneration. No

member of the company’s Board is a member of the

nomination committee.

As part of its nomination process, the committee

will have contact with major shareholders, the Board

and the company’s executive management to ensure

that the process takes both the Board’s and the

company’s needs into consideration.

A justification for a candidate will include information

on each candidate’s competence, capacity and

independence.

The current members of the nomination committee

are Leif Haukom and Anne-Grete Ellingsen. Both

members are independent of the major shareholders,

the Board and the executive management.

CORPORATE GOVERNANCE

2 5

NEKKAR ANNUAL REPORT 2022

The members of the nomination committee are

elected by the GM. According to the Code, the GM

shall elect the Chair of the nomination committee and

set the guidelines for the committee’s work.

Information regarding the committee members, the

procedures, as well as how input and proposals may

be submitted to the committee is published on the

company’s website.

8. Board of directors, composition and

independence

Pursuant to Nekkar’s Articles of Association, the

company’s Board shall consist of three to five

members. The current Board consists of four

members elected by the GM.

At the General Meeting on 30 May 2022, the shareholders

elected the following members to the Board:

NAME ELECTION PERIOD POSITION

Trym Skeie 2022 – 2024 Chairperson

Marit Solberg 2021 – 2023 Vice chairperson

Gisle Rike 2022 – 2024 Director

Ingunn Svegården 2021 – 2023 Director

Nekkar strive to ensure that the Board has a

composition necessary to safeguard the interest of the

shareholders. The Board consider its composition to

be diverse and competent with respect to expertise,

capacity and diversity adapted to the company’s

objectives, main challenges and the common interest

of all shareholders. The Board emphasizes the

importance of efficiency as a collegial body. The board

consists of two men and two women.

Trym Skeie is, both directly and indirectly, a major

shareholder in the company. Gisle Rike is employed

by Rasmussengruppen AS, which is a major

shareholder in the Company. Marit Solberg and

Ingunn Svegården are independent of the major

shareholders and executive management. The Board

does not include executive management and the

majority of the Board members are independent of

the Company’s executive personnel and material

business contacts.

The Directors of the Board are elected for a period

of two years. Please see the Annual Report for a

presentation of the Board members.

According to the Code, the Chairperson of the Board

should be elected by the GM. This is also stated in the

Company’s Articles of Association.

Both Trym Skeie and Marit Solberg own shares

in Nekkar. None of the Board members hold any

shareoptions.

9. The work of the board of directors

The Board has the overall responsibility to oversee

the organization, operation and management of

Nekkar, whilst the CEO is responsible for day-to-

day management. This means that the Board is

responsible for how to organize the company’s

activities and establishing systems in order to ensure

that Nekkar operates in compliance with laws and

regulations, corporate governance guidelines and the

values stated in the company’s Code of Conduct.

The Board conducts its work through established

procedures (“Rules and procedures for the Board

of Directors”) where its responsibilities for the work

and administrative procedures are outlined. The

Board has adopted an annual plan for its work to

ensure that all important issues and business areas

are covered, emphasizing objectives, strategy, and

implementation of the company’s business plan in

particular. The Rules and procedures for the Board

also state how the board of directors and executive

management shall handle agreements with related

parties, including whether an independent valuation

must be obtained. The Board should also present any

such agreements in their annual directors’ report.

Further, If the chairperson of the Board is personally

involved in matters of a material character, the

Board’s consideration of such matters will be chaired

by another member of the Board.

Pursuant to Nekkar’s Articles of Association, the

complete Board shall serve as audit committee of

the company provided that the Board at all times

satisfies the requirements in the Norwegian Public

Limited Liability Act section 6-42. Considering a

lower complexity level in the business after the

CORPORATE GOVERNANCE

NEKKAR ANNUAL REPORT 2022

disposal of the maritime and offshore business, as

well as the reduced number of Board members, the

Board deems it sensible that all members are equally

informed about the accounting issues.

The Board has considered but not established

a remuneration committee. Instead, the Board

resolves matters relating to compensation paid to

the executive personnel. As all Board members are

independent of the Company’s executive personnel,

it is the Board’s view that it is a suitable body to help

ensure a thorough and independent preparation

of matters relating to compensation paid to the

executive personnel. There are no other committees

established by the Board of Directors. The Board

assess the need for additional roles and functions for

the Board and its directors on an annual basis.

The Board evaluates its own performance and

expertise on an annual basis. The evaluation is

submitted to the nomination committee.

10. Risk management and internal

control

The Board focuses on ensuring adequate

organization and supervision of Nekkar’s internal

control and overall risk management. On an annual

basis, the Board discusses and assesses the group’s

risk exposures, systems, routines, and internal control

to mitigate these risks. Internal control procedures,

limiting authorizations, organizational changes and

increased reporting are part of the improvements.

The Board’s work with internal control and applicable

systems encompasses the company’s corporate

values, Code of Conduct and guidelines for Corporate

Social Responsibility.

Procedures and systems upholding uniform reporting

are prepared. Management prepares monthly

financial reports, which are submitted to, and

reviewed by the Board.

As part of ongoing risk management efforts, the

Board and management carry out specific risk

reviews of major investments and contracts.

As part of the annual budget and strategy process,

the Board and executive management conduct an

annual review to discuss and identify external and

internal opportunities and threats for the group.

In addition, the Board carries out a thorough review

of the company’s financial status in the annual Board

of Directors’ Report. This review also includes a

description of the main elements of our HSE efforts

with a corresponding action plan if needed.

The Nekkar Code of Conduct outlines Nekkar’s

ethical commitments and requirements to expected

behavior regarding issues as anti-corruption and

conflict of interest. It sets standards for personal

conduct and business practice.

The Code of Conduct has been communicated to all

employees and implemented in order to ensure that

the company’s ethical commitments and requirements

are reflected in all business behavior. The Code

of Conduct includes the most important ethical

principles and provides references to more detailed

requirements related to business and personal conduct.

The Code of Conduct applies to all Nekkar group

companies, Board members, management and

employees, including temporary personnel and

consultants or contractors acting on behalf of Nekkar.

11. Remuneration of the Board of

Directors

Remuneration of the Board is determined by the

GM, based on recommendation from the nomination

committee. The recommendation is normally linked

to the Board members’ responsibilities, competence

and time commitment, taking the company’s size

and complexity into consideration. It also references

the level of Board remuneration in comparable,

Norwegian stock exchange listed companies.

The remuneration is not linked to the company’s

performance. There is no share option program for

the Board of Directors but they can take part in the

company’s share purchase program.

Members of the Board, including companies with

whom they are associated, are usually not given

separate assignments by Nekkar in addition to their

function as directors. Such assignments will be based

on approval from the Board. There were no such

assignments in 2022.

CORPORATE GOVERNANCE

2 7

NEKKAR ANNUAL REPORT 2022

12. Salary and other remuneration for

executive personnel

The Board determines the principles applicable to

the group’s policy for compensation of executive

management. The Board is directly responsible for

determining the CEO’s salary and other benefits. The

CEO is, in consultation with the chairperson of the

Board, responsible for determining the salary and

other benefits for the group’s other senior executives.

The guidelines for salaries and other remuneration

are communicated yearly to the GM, where so far, the

Board has asked for the endorsement of all sections

of the declaration of the determination of salaries and

other remuneration of leading employees, except the

option program where they have asked for approval.

Executive management remuneration consists of

three main elements: salary, bonus and equity-based

instruments.

The Boards’ view on management compensation is that

it should be competitive, simple and motivating, but not

above observed market levels, and help ensure that the

executive personnel and shareholders have convergent

interests. Bonuses are determined according to specific

targets set for each year. Bonus schemes are limited

to a portion of the salary, increasing according to the

position category up to a maximum of 50% of base

annual salary unless special circumstances apply.

Guidelines and the annual remuneration report are

presented in the Annual Report.

13. Information and communication

Nekkar’s reporting and communication policy

is based on openness, taking into account the

requirement for equal treatment of all stakeholders in

the financial markets.

The company has established guidelines for reporting

of financial and other information. The purpose of

these guidelines is to ensure that timely and correct

information is made available to shareholders and

other stakeholders. A financial calendar and other

shareholder information, including the investor

relations policy, is available on the company’s website.

Any dividend proposals are presented in the meeting

call for the General Meeting.

All information distributed to the company’s

shareholders is simultaneously published on the

company’s website and Oslo stock exchange’s

website (www.newsweb.no).

14. Take-overs

The company’s Articles of Association do not include

defense mechanisms aimed towards take-over bids,

nor are any other obstacles implemented with the

objective of reducing the trade and/or transferability

of the company’s shares.

The shares are freely negotiable. Transparency and

equal treatment of the shareholders are fundamental

principles the company adheres to. No additional

principles have been established for how Nekkar will

or should act with respect to takeover bids, but the

Board intends to act in accordance with applicable

regulations as well as the general principles of

the stock market if such a situation should occur.

Furthermore, the Board will issue a statement to the

shareholders with an assessment of the bid and a

recommendation of whether to accept it or not.

15. Auditor

The external auditor is independent in relation to

Nekkar and elected by the Annual General Meeting.

The auditor’s fee is approved by the GM.

The auditor conducts a minimum of two meetings

per year with the Board, and at least in one of the

meetings a part of the meeting is held without

management present. One of the meetings is

conducted in connection with the review of the

annual accounts, while the second meeting’s purpose

is to review the company’s internal control systems

and routines. The Board reviews the yearly audit plan

with the auditor together with identified weaknesses

and suggestions for improving the company’s

internal control.

In addition, the auditor is present in the Board

meetings as and when required.

It has not been deemed necessary by the Board to

implement additional guidelines regarding the use of

the auditor for services other than auditing.

CORPORATE GOVERNANCE

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

NEKKAR PER 31 DECEMBER 2022

Consolidated

financial statements

Income statement 

Financial position 

Equity 

Cash flow 

Accounting principles 

NOTES

Note  Operating segments 

Note  Revenue 

Note  Inventories 

Note  Payroll expenses and employee information 

Note  Pensions 

Note  Fixed assets 

Note  Intangible assets 

Note  Subsidiaries and investments in other companies 

Note  Trade and other receivables 

Note  Assets pledged as security and guarantees 

Note  Share capital and shareholder information 

Note  Earnings per share 

Note  Tax 

Note  Other operating expenses 

Note  Related parties 

Note  Derivatives 

Note  Liabilities and accruals 

Note  Financial items and foreign currency gainslosses 

Note  Financial risk management 

Note  Business combination 

Note  Non controlling interest (NCI) 

Note  Contingent liabilities  Material disputes 

Note  Subsequent events 

2 9

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Consolidated statement of comprehensive income

For the year ended 31 December

Amounts in NOK 1000 Notes 2022 2021

CONTINUED OPERATIONS

OPERATING REVENUE

Project revenue 2 387 503 478 892

Other income - 1 091

Total revenue 387 503 479 983

OPERATING EXPENSES

Cost of goods sold 206 132 236 708

Personnel costs 4, 5 78 294 73 820

Losses on accounts receivable - 108

Other operating expenses 4, 14 32 781 25 614

Depreciation of fixed assets 6, 7 10 475 5 665

Other losses / (gains) 16 8 055 3 965

Total Operating Expenses 335 737 345 881

Operating profit / (loss) 51 766 134 103

FINANCIAL INCOME AND EXPENSES

Financial income 18 4 884 5 696

Financial expense 18 14 016 7 265

Net Finance -9 132 -1 569

Profit / (loss) before tax 42 634 132 534

Income tax expenses / (- income) 13 9 981 20 914

Profit/ (loss) from continued operations 32 654 111 621

DISCONTINUED OPERATIONS

Profit / (loss) after tax for the period from discontinued operation - -

Profit for the period 32 654 111 621

Attributable to equity holders of the company 31 839 110 224

Attributable to non-controlling interests 21 815 1 397

OTHER COMPREHENSIVE INCOME

Items that may be reclassified subseqently to profit or loss

Foreign currency differences for foreign operations - -

Other comprehensive income for the period - -

Total comprehensive income for the period 32 654 111 621

Attributable to equity holders of the company 31 839 110 224

Attributable to non-controlling interests 815 1 397

Earnings per share (NOK) 12 0.30 1.04

Diluted earnings per share (NOK) 12 0.30 1.04

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statement of financial position

For the year ended 31 December

Amounts in NOK 1000 Notes 2022 2021

ASSETS

NON-CURRENT ASSETS

Deferred tax assets 13 7 032 15 982

Goodwill 7 16 643 16 643

Other intangible assets 7 58 035 40 084

Property, plant and equipment 6 9 809 14 439

Right-of-use assets 6 4 409 5 804

Total non-current assets 95 929 92 952

CURRENT ASSETS

Inventories 3, 10 2 317 3 474

Trade receivables 2, 9, 10 106 875 134 749

Other receivables 9, 10, 16 7 126 13 906

Accrued, non-invoiced production 2, 10 113 616 20 153

Derivative financial instruments 16 - 11 505

Bank deposits, cash in hand, etc. 10 181 281 174 501

Total current assets 411 214 358 288

Total assets 507 143 451 241

3 1

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Consolidated statement of financial position

For the year ended 31 December

Amounts in NOK 1000 Notes 2022 2021

EQUITY AND LIABILTIES

EQUITY

Issued share capital 11 11 746 11 714

Treasury shares 11 -1 -1

Share premium 11 5 919 3 863

Other equity 11 313 214 281 376

Shareholders equity 330 878 296 952

Non-controlling interests 21 20 090 19 276

Total equity 350 968 316 228

NON-CURRENT LIABILITIES

Deferred tax 13 454 526

Lease liabilities 6 2 716 4 234

Total non-current liabilities 3 169 4 761

CURRENT LIABILITIES

Trade payables 45 893 20 682

Income tax payable 13 1 562 2 618

Social Security and Employee taxes 7469 6519

Prepayments from customers 2 42 418 29 456

Derivative financial instruments 16 7 198 3 971

Current lease liabilities 6 1 549 1 566

Other current liabilities 17, 22 46 917 65 439

Total current liabilities 153 006 130 253

Total liabilities 156 175 135 013

Total equity and liabilities 507 143 451 241

Kristiansand, 27 April 2023

Board of Directors, Nekkar

Trym Skeie

Chairman

Gisle Rike

Director

Ole Falk Hansen

CEO

Ingunn Svegården

Director

Marit Solberg

Director

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Consolidated statement of changes in equity

For the year ended 31 December

Amounts in NOK 1000 Note

capital

Treasury

premium

Other

equity

Share-

holders

equity

Non-

controlling

interests

Total

equity

Equity as of 1.1.2020 11 619 -1 - 205 878 217 495 16 050 233 544

Profit /(loss) for the period - - - -34 726 -34 726 1 829 -32 897

Total comprehensive income - - - -34 726 -34 726 1 829 -32 897

New Shares Issued 78 - 2 751 - 2 829 - 2 829

Equity as of 31.12.2020 11 696 -1 2 751 171 152 185 599 17 879 203 477

Equity as of 1.1.2021 11 696 -1 2 751 171 152 185 599 17 879 203 477

Profit /(loss) for the period - - - 110 224 110 224 1 397 111 621

Total comprehensive income - - - 110 224 110 224 1 397 111 621

New Shares Issued 11 18 - 1 112 - 1 130 - 1 130

Equity as of 31.12.2021 11 714 -1 3 863 281 376 296 952 19 276 316 228

Equity as of 1.1.2022 11 714 -1 3 863 281 376 296 952 19 276 316 228

Profit /(loss) for the period - - - 31 839 31 839 815 32 654

Total comprehensive income - - - 31 839 31 839 815 32 654

New Shares Issued 11 32 - 2 056 - 2 087 - 2 087

Equity as of 31.12.2022 11 746 -1 5 919 313 215 330 878 20 090 350 968

3 3

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Consolidated statement of cash flows

For the year ended 31 December

Amounts in NOK 1000 Notes 2022 2021

CASH FLOW FROM OPERATING ACTIVITIES

Profit (loss) before tax 42 634 132 534

Adjustments for:

Depreciation / impairment 6, 7 10 475 5 665

Interest expense 18 3 437 2 549

Interest income 18 -4 884 -2 521

Other Financial Items 18 10 579 1 541

Income tax paid 13 -2 625 -

Changes in:

Inventories 3 1 157 1 938

Trade receivables 9 27 874 -98 106

Trade payables 25 210 -3 934

Accrued, non-invoiced production -93 462 2 229

Other receivables and other payables 17 554 -96 489

Net cash flow from operating activities 37 950 -54 595

CASH FLOW FROM INVESTMENT ACTIVITIES

Acquisition and expenditures of fixed/intangible assets 6, 7 -22 401 -26 253

Disposal of discontinued operation - -98 337

Net cash flow from investment activities -22 401 -124 590

CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from issuance of share capital 2 088 1 130

Payment of lease liabilities -1 725 -991

Interest received 18 4 884 2 521

Interest paid 18 -3 437 -2 549

Other Financial items 18 -10 579 -1 541

Net cash flow from financing activities -8 768 -1 429

Net change in cash and cash equivalents 6 780 -180 614

Cash and cash equivalents at the start of the period 174 501 355 114

Cash and cash equivalents at the end of the period 181 281 174 501

Cash flow attributable to non-controlling interests 798 -590

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Accounting principles

1. General information

1.1 REPORTING ENTITY

Nekkar ASA (“Nekkar”) is a public company

incorporated and domiciled in Norway. The company

is listed on the Oslo Stock Exchange where the shares

are publicly traded.

The registered head office is located at Andøyfaret 15

in Kristiansand, Norway.

As per 31 December 2022 Nekkar holds subsidiaries

in Norway, USA and Singapore.

Today, Nekkar is an industrial technology group

offering impact technologies combined with high-

end software solutions. The group combines 50

years’ heritage from the world’s number one shiplift

company, Syncrolift, with new investments into

sustainable, digitalised technology businesses that

aim to unlock growth within ocean-based industries

such as offshore energy, renewables and aquaculture.

Syncrolift delivers systems, products and services to

yards and naval bases within three main areas:

• Shiplift and Transfer systems: The company

delivers complete tailored shiplift and transfer

systems. The offering includes design,

engineering, assembly, and installation.

• FastDocking: Innovative products and solutions

are designed to increase on-land productivity

within docking and ship handling.

• Service and upgrades: Systematic approach to

help clients maintain and improve the capability

and lifespan on shiplifts and transfer systems,

maintenance, spare replacements and upgrades

of small and larger components.

The Syncrolift business has a global customer base,

and its product offering addresses several core

operations on yards and naval bases around the

world. The shiplift products simplifies the docking

operations while the transfer systems secure a safe

and effective infrastructure as vessels are moved by

rails or wheels at the yard, enabling multiple use of

the shiplift, and improved yard utilization.

Further information of the principal activities of the

group is included in Note 1.

1.2 BASIS OF PREPARATION

Nekkar’s consolidated financial statements have

been prepared in accordance with International

Financial Reporting Standards (IFRS), as adopted by

the European Union. Standards and interpretations

effective for annual periods beginning on or after

1 January 2023 have not been applied in preparing

these consolidated financial statements.

The consolidated financial statements of the group

for the year ended 31 December 2022 were approved

by the Board of Directors on 27 April 2023.

The consolidated financial statements have been

prepared on the basis of uniform accounting

principles for similar transactions and events under

otherwise similar circumstances. The consolidated

financial statements are presented in NOK. Financial

information is presented and rounded to the nearest

thousands, except were stated otherwise.

3 5

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

2. Summary of key accounting

principles

The accounting principles set out below have been

applied consistently to all periods presented in the

consolidated financial statements and have been

applied consistently by group entities.

sufficient data are available to measure fair value,

maximizing the use of relevant observable inputs and

minimizing the use of unobservable inputs. All assets

and liabilities for which fair value is measured or

disclosed in the financial statements are categorized

within the fair value hierarchy, described as follows,

based on the lowest level input that is significant to

the fair value measurement as a whole:

• Level 1 — Quoted (unadjusted) market prices in

active markets for identical assets or liabilities

• Level 2 — Valuation techniques for which the

lowest level input that is significant to the fair

value measurement is directly or indirectly

observable

• Level 3 — Valuation techniques for which the

lowest level input that is significant to the fair

value measurement is unobservable

For the purpose of fair value disclosures, the group

has determined classes of assets and liabilities on

the basis of the nature, characteristics and risks of

the asset or liability and the level of the fair value

hierarchy as explained above.

2.1 BASIC PRINCIPLES

a) New accounting standards and amendments

The accounting policies adopted are consistent

with those of the previous financial year. New or

revised accounting standards and interpretations

implemented as of 1 January 2022 are among others

Onerous Contracts – Costs of Fulfilling a Contract

(Amendments to IAS 37) and Proceeds before

Intended Use (Amendments to IAS 16 Property, plant

and equipment). The new or revised accounting

standards and interpretations do not represent a

significant impact to Nekkar’s accounting policies.

b) Current versus non-current classification

The group presents assets and liabilities in the

consolidated statement of financial position as either

current or non-current. An asset is classified as

current when it is expected to be realized or intended

to be sold or consumed in the normal operating cycle,

held primarily for the purpose of trading, expected to

be realized within twelve months after the reporting

period, or is cash or cash equivalent. All other assets

are classified as non-current.

A liability is classified as current when it is expected

to be settled in normal operating cycle, it is held

primarily for the purpose of trading, it is due to be

settled within twelve months after the reporting

period, or there is no unconditional right to defer the

settlement of the liability for at least twelve months

after the reporting period. The group classifies all

other liabilities as non-current. Deferred tax assets

and liabilities are classified as non-current assets and

liabilities.

c) Fair value measurement

The group measures financial instruments, such as

derivatives, at fair value, as defined in IFRS 13, at each

balance sheet date.

The group uses valuation techniques that are

appropriate in the circumstances and for which

2.2 BASIS FOR CONSOLIDATION

a) Subsidiaries

Subsidiaries are entities which Nekkar controls.

Control is achieved when the group is exposed, or

has rights, to variable returns from its involvement

with the investee and has the ability to affect those

returns through its power over the investee.

Subsidiaries are consolidated from the date of

acquisition, being the date on which the group

obtains control, and continue to be consolidated until

the date when such control ceases.

In cases where Nekkar achieves control over an

entity, business combinations are accounted for using

the acquisition method. Non-controlling interests

is presented separately as equity in the group’s

consolidated statement of financial position.

2.3 SEGMENT INFORMATION

For management purposes, the group is organized

into segments based on its products and services

(business units). The Board of directors monitors

the operating results of its business units separately

for the purpose of making decisions about resource

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

allocation and assessing performance. Segment

performance is evaluated based on profit or loss

and is measured consistently with profit or loss in

the consolidated financial statements. However,

the group’s financing (including finance costs and

finance income) is managed at group level and is not

allocated to operating segments.

Group support functions from the parent company

along with Aquaculture and Renewables are

presented as “Other”. Refer to Note 1 for further

details.

2.5 PROPERTY, PLANT AND EQUIPMENT

Property, plant and equipment are recognized in

the financial statements at cost less accumulated

depreciation and accumulated impairment. Cost

includes the costs directly related to the acquisition

of the fixed asset.

Subsequent expenditures are capitalized when it

is likely that the group will receive future economic

benefits from the expenditure, and the expenditure

can be measured reliably. Other repair and

maintenance costs are recognized in profit or loss in

the period when the expenses are incurred.

Property, plant and equipment are depreciated based

on the straight-line method. Historical cost of the

fixed asset is depreciated to the residual value over

expected useful life, which is:

Machinery and vehicles 3-5 years

Fixtures/office equipment 5-10 years

Computer equipment 3-5 years

Indicators related to possible impairment

requirements is monitored continuously. If the

carrying value of the fixed asset is higher than the

estimated recoverable amount, the value is impaired

to recoverable amount.

Gains and losses from disposal of assets are

recognized in profit or loss and represent the

difference between the sales price and the carrying

value.

Depreciation methods, useful lives and residual

values are assessed at the reporting date and

adjusted when required.

2.4 FOREIGN CURRENCIES

a) Functional and presentation currencies

The financial statements of the individual entities in

the group are measured in the currency primarily

used in the economic area where the unit operates

(functional currency). The consolidated financial

statements are presented in Norwegian kroner

(NOK), which is the functional and presentation

currency of the parent company, and the

presentation currency of the group.

b) Transactions and balance sheet items

Transactions in foreign currencies are translated

into the functional currency using the currency spot

rates at the time of recognition. Foreign currency

gains and losses that arise from the payment of such

transactions, and the currency conversion effect from

monetary items (assets and liabilities) nominated in

foreign currencies, which are valued at the currency

spot rates at the balance sheet date, are recognized

in profit and loss. Non-monetary items measured at

historical cost in foreign currency are translated into

functional currency using the exchange rates as at

the dates of the initial transaction.

c) Group companies

On consolidation, the assets and liabilities of foreign

operations are converted into NOK at the rate of

exchange prevailing at the reporting date and

their income statements are translated at average

exchange rates. Currency effects derived from

consolidation are recognized in other comprehensive

income. On disposal of a foreign operation, the

component of other comprehensive income relating

to the specific foreign operation is reclassified to

profit or loss.

2.6 INTANGIBLE ASSETS

Intangible assets that have been acquired separately

are measured on initial recognition at cost. The

cost of intangible assets acquired through a

business combination is their fair value at the

date of acquisition. Capitalized intangible assets

are recognized at cost less any amortization and

impairment losses. Internally generated intangible

assets, excluding capitalized development costs, are

not capitalized but are expensed as incurred.

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NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Intangible assets with a definite useful life are

amortized over their economic life and tested for

impairment if there are indications of impairment.

The amortization method and -period are assessed

at least once a year. Changes to the amortization

method and/or period are presented as change in

accounting estimate.

Intangible assets with an indefinite useful life are

tested for impairment at least once a year, either

individually or as a part of a cash-generating unit.

Intangible assets with an indefinite economic life are

not amortized.

Customer relationships and customer portfolio

Customer relationships and customer portfolios

are established through contracts with customers.

Customer relationships and customer portfolio

acquired through a business combination is

recognized as an asset based on its fair value at

the acquisition date. The customer relationship and

customer portfolios have limited useful life and are

amortized using the straight-line method over their

expected useful life (15 to 20 years).

Patents and licenses

Patents and licenses have limited useful life and are

recorded at historical cost in the balance sheet less

depreciation. Patents and technology are amortized

using the straight-line method over their expected

useful life (2 to 15 years).

Government grants

Government grants are recognized when it is

reasonably certain that the company will meet the

conditions stipulated for the grants and that the

grants will be received. Tax credits related to R&D

projects are classified as government grants if they

ultimately are settled with cash, tax credits settled

only via taxes are classified as tax allowances.

Grants are recognized in the statement of profit or loss

as other operating income, over the periods necessary

to match them with the cost they are intended to

compensate. Grants relating to intangible assets

are deducted from the carrying amount of the asset

and recognized in profit or loss as a reduction of the

depreciation charge over the lifetime of the assets.

In 2022 Nekkar has received in total NOK 12.5 million

in government grants of which NOK 8.8 million is

received from Innovasjon Norge and NOK 3.7 million

from SkatteFunn. Reference is made to note 7.

2.7 BUSINESS COMBINATIONS AND GOODWILL

When acquiring a business, financial assets and liabilities

are recognized at fair value in the opening group balance.

The consideration paid in a business combination is

measured at fair value at the acquisition date.

The initial accounting for a business combination can

be changed if new information about the fair value

at the acquisition date is present. The allocation can

be amended within 12 months of the acquisition date

provided that the initial accounting at the acquisition

date was determined provisionally. The non-

controlling interest is measured at fair value.

Goodwill is initially measured at cost, being the excess

of the aggregate of the consideration transferred and

the amount recognized for non-controlling interests,

and any previous interest held, over the net identifiable

assets acquired and liabilities assumed.

After initial recognition, goodwill is measured at cost

less any accumulated impairment losses. For the

purpose of impairment testing, goodwill acquired in

a business combination is, from the acquisition date,

allocated to each of the group’s cash-generating

units that are expected to benefit from the

combination, irrespective of whether other assets or

liabilities of the acquire are assigned to those units.

Research and development

Research costs are expensed as incurred.

Development activities include design or planning of

production of new or significantly improved products

and processes. Development costs associated with

development of new products are capitalized to the

extent that they can be reliably measured, the product

or process is technically, or commercially feasible,

future financial benefits are likely, and the group

intends and has sufficient resources to complete the

development, and to sell or use the asset.

Capitalized development costs include materials, direct

labor, directly attributable overheads and capitalized

borrowing costs. Development costs are depreciated

over their expected useful life (2 to 15 years).

Public grants related to capitalized R&D projects, is

recognized as a reduction of capitalized costs.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

2.8 FINANCIAL INSTRUMENTS

A financial instrument is any contract that gives

rise to a financial asset of one entity and a financial

liability or equity instrument of another entity and

is recognized when the group becomes party to the

contractual provisions of the instrument.

Initial recognition and measurement of financial

assets

At initial recognition, a financial asset is classified

in one of three principal classification categories:

financial assets subsequently measured at amortized

cost, fair value through other comprehensive income

or as fair value through profit and loss.

With the exception of forward FX contracts (see 2.9),

all financial assets are classified as financial assets

measured at amortized cost.

Trade receivable

Accounts receivables are on initial recognition

measured at the transaction price. The group utilize

the expedient in IFRS 15 for prepayment where

the transfer of goods is expected in less than one

year. Therefore, the group don’t measure the trade

receivables at fair value even if there may be a

significant financing component. For subsequent

measurement, accounts receivable is measured

at amortized cost determined using the effective

interest method, and less provision for expected

credit loss (ECL). The group don’t recognize any

initial ECL on trade receivables due to low historical

losses. The group engage in further judgement for

trade receivables not paid when due. The group don’t

use a provision matrix as allowed under IFRS 9.

Contract assets

Contract assets, which mainly is satisfied

performance obligations not yet invoiced, is

recognized with the estimated considerations

according to IFRS 15 for the work performed.

Contract assets are subject to impairment testing in

the same manner as trade receivables.

Recognition and measurement of financial liabilities

All financial liabilities in the group are classified as

financial liabilities as subsequently measured at

amortized cost unless the financial liabilities are

derivatives or financial liabilities held for trading,

which are classified and measured at fair value

In subsequent periods, financial instruments

are measured in accordance with classifications

described above.

2.9 DERIVATIVE FINANCIAL INSTRUMENTS AND HEDGE

ACCOUNTING

The group is exposed to fluctuations in foreign

exchange rate which may affect the operating results.

The group utilizes hedging of contractual income and

cost in a foreign currency.

Fair value hedging

The group uses financial derivatives to hedge foreign

currency risk. Derivatives are recognized initially at

fair value and are subsequently re-measured at fair

value. Attributable transaction costs are recognized

in the profit or loss as they incur.

The entity applies hedge accounting to hedging

relationships that meets the qualifying criteria. The

group only uses forward currency contracts for

fair value hedging of the foreign currency risk in

unrecognized firm commitments. The group makes

an assessment, both at the inception of the hedge

relationship as well as on an ongoing basis, of

whether the hedging instruments are expected to be

highly effective in offsetting the changes in the fair

value of the respective hedged items attributable to

the hedged risk.

Changes to fair value of the hedging instrument are

recognized in profit and loss as a finance cost or

income along with the change in fair value associated

with the corresponding hedged asset or liability. The

accumulated change in fair value of the hedge item

are classified as other receivable or other short-term

liabilities.

In those instances where the hedge do not fulfill the

criteria for hedge accounting, the derivative is carried

at fair value through profit and loss. For financial

instrument initial acquired for a hedge purpose,

the fair value adjustment increase or decrease the

operational profit. This applies to derivatives where

the underlying delivery contract has been cancelled.

Derivatives at fair value through profit and loss

Derivatives that are not designated as hedging

instruments are recognized at fair value as financial

expenses and financial income.

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NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

2.10 LEASES

IFRS 16 sets out the principles for the recognition,

measurement, presentation and disclosure of leases.

At the commencement date of a lease, a lessee will

have to recognize a liability based on future lease

payments and an asset representing the right to use

the underlying asset during the lease term (“Right-

of-use assets”). Further, the lessee will be required

to separately recognize the interest expense on the

lease liability and the deprecation expense of the

right-of-use asset.

For 2022, the incremental borrowing rate is assessed

to be 6,26% which is used in the calculation of right-

of-use assets and the corresponding lease liability.

Nekkar has applied the following practical expedients

to leases previously classified as operating leases at

the date of initial application of IFRS 16:

• Exemption for short-term leases (defined as 12

months or less)

• Exemption for leases of low value assets

2.13 FINANCIAL LIABILITIES

The group classifies financial liabilities at initial

recognition into the following: non-derivative

financial liabilities, loans and borrowings, payables,

financial liabilities at fair value through profit or loss

and derivatives designated as hedging instruments.

Non-derivative financial liabilities are initially

recognized at fair value plus directly attributable

transaction costs. After initial recognition, liabilities

are measured at amortized costs using the effective

interest method.

Loans are classified as current liabilities unless there

is an unconditional right to postpone payment of

the debt by more than 12 months from the date of

the balance sheet. The following year’s payment is

classified as short-term debt.

The group derecognizes a financial liability when the

contractual obligations are satisfied or cancelled.

2.11 INVENTORIES

Inventories are valued at the lower of cost and net

realizable value. The cost is calculated by means of

the first-in, first-out principle (FIFO). For finished

goods and work in progress (for project in which

revenue recognition is “point-in-time”), the cost

consists of product design expenses, consumption

of materials, direct labor costs, other direct costs,

and indirect production costs (based on a normal

capacity level). Net realizable value is the estimated

selling price in the ordinary course of business, less

the estimated cost of completion and estimated costs

necessary to make the sale.

2.12 CASH AND CASH EQUIVALENTS

Cash and cash equivalents consist of bank deposits.

Withdrawals from the bank overdraft constitute part

of current liabilities. Deposits and overdrafts are

presented net if the bank has a legal/contractual right

to offset the deposits and liabilities.

The group has a cash pool arrangement where

Nekkar is the primary agreement holder. Cash

positions on bank accounts with different currencies

are presented net in the consolidated financial

statement.

2.14 TAXES

Tax in the profit and loss accounts comprise both

tax payable for the period and change in deferred

tax. Tax payable for the period and deferred tax

are recognized in profit or loss, with the exception

of tax on items related to business combinations or

taxes recognized directly in equity or comprehensive

income.

Deferred tax assets and deferred tax liabilities are

offset if a legally enforceable right exists to set

off current tax assets against current income tax

liabilities and the deferred taxes relate to the same

taxable entity and the same taxation authority.

Deferred tax assets are recognized when it is

convincing evidence that the company will have

a sufficient profit for tax purposes in subsequent

periods to utilize the tax asset. The group includes

the possibility of tax planning through group

contribution as part of the assessment of convincing

evidence. The group only recognized deferred tax

assets which can be utilized in five years as the

subsequent period is considered too uncertain. For

the period going forward, the disposal of former loss-

making entities in the Norwegian tax group is the

main driver for additional utilization of the deferred

tax assets going forward.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Deferred tax asset or liability is measured using tax

rates and tax laws enacted or substantially enacted

on the balance sheet date, and which presumably

may be utilized when the deferred tax advantage is

realized or when the deferred tax is settled.

2. Identification of performance obligations

Due to contract structure, there are differences

within the contracts with regards to identification of

performance obligations. The review has shown;

The deliveries in contracts are reviewed to identify

if there are distinct performance obligations.

Contracts held within continued business ordinarily

represent one performance obligation, ref section 5

below. It could be argued that there could be more

than one performance obligations in some of the

contracts, but those potential additional performance

obligations identified has been assessed immaterial.

3. Transaction price

Revenue from construction contracts includes

original contract amount and approved variation

orders. For contracts where it is identified multiple

performance obligations, a stand-alone selling price

is identified to each of the performance obligation.

Potential liquidated damages are recognized as a

reduction of the transaction price unless it is highly

probable that they will not be incurred. Beyond this

there are only immaterial variable considerations.

4. Allocation of transaction price to performance

obligation

Based on the extensive review of contracts upon the

implementation of IFRS 15, the following has been

identified;

Contracts represent one performance obligation,

hence allocation of transaction price to performance

obligation is 1:1.

5. Revenue recognition as performance obligation is

satisfied

Revenue is measured based on the consideration

specified in a contract with a customer. The group

recognizes revenue when it transfers control over a

good or service to a customer.

The following table provides information about the

nature and timing of the satisfaction of performance

obligations in contracts with customers, and the

related revenue recognition policies.

2.15 PENSION OBLIGATIONS, BONUS SCHEMES AND

OTHER COMPENSATION SCHEMES FOR EMPLOYEES

a) Pension obligations

The companies in the group have various pension

plans. The pension plans are in general financed by

payments to insurance companies or pension funds.

As of 31 December 2022, Nekkar has only defined

contribution plans.

2.16 REVENUE RECOGNITION

A five-step process is applied before revenue can be

recognized;

1. Identify the contract

2. Identify the performance obligations in the

contract

3. Determine the transaction price

4. Allocate the transaction price to performance

obligations

5. Recognized revenue as performance obligation is

satisfied

During the application process, step 2 and 5 has

been the most complex due to the contract structure

within Nekkar. Below are further details on the 5-step

model, focusing on step 2 and 5.

1. Identification of contract

The group’s revenue derives from contracts with

customers in one of the following revenue streams;

a. Long-term construction contracts

(engineer-to-order)

b. Service contracts

c. After sales

All these revenue streams are based on a contract

with the customer.

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NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Type of contract

Nature and timing of satisfaction

ofperformance obligation Revenue recognition under IFRS 15

Shipyard solutions

Construction contracts

(Engineer-to-order)

Long term construction contracts with

a typical duration of 18-48 months from

contracts are signed, to the projects are

closed. These projects are engineer-to-order

projects, which delivers highly customized

turnkey systems for shipyards around the

world. The projects are highly specialized

systems for each individual project, with

no alternative use for the company, and

where each project is considered to be one

performance obligation.

For the performance obligations identified

in the contracts, it is assessed that control

will be transferred to the customer over time

as the items are constructed.

After a thorough analysis of the criteria for

“over time” revenue recognition the main issue

relating to timing of revenue recognition was

Nekkar’s enforceable right to payment for the

performance completed to date in a situation

with termination by the customer for other

reasons than Nekkar’s failure to perform as

promised (termination by convenience).

Nekkar has assessed the right to payment to

date from a legal point of view. The result of

the contract review is that the relevant contract

either includes a termination by convenience

clause that is in favor of the group, or that

general legal basis in the relevant jurisdiction is

in favor of the group, thus Nekkar have the legal

right to require payment from the customer

for performance to date. Payment covers

approximately the expected selling price of the

goods and services transferred to date, which

equals cost plus a reasonable profit margin.

Based on this it is the company’s assessment,

that revenue recognition over time is correct for

these contracts. In addition, there is often no

alternative use.

Measure of progress is based on cost incurred

relative to the total expected cost to satisfy the

performance obligation.

Upgrade contracts

(Engineer-to-order)

Long term upgrade contracts with a typical

duration of 12-24 months from contracts are

signed, to the projects are closed. These

projects are engineer-to-order projects,

which delivers upgrades of existing shiplift

systems with highly customized turnkey

systems for shipyards around the world. The

projects are highly specialized systems for

each individual project, with no alternative

use for the company, that the customer

controls throughout the project phase and

where each project is considered to be one

performance obligation.

For the performance obligations identified

in the contracts, it is assessed that control

will be transferred to the customer over time

as the items are constructed.

The analysis of the criteria for “over time”

revenue recognition for these types of contracts

is linked to Nekkar’s performance enhancing an

asset that the customer controls as the asset is

enhanced or upgraded.

Nekkar has assessed that the customer controls

the asset throughout the upgrade. The asset

is in operation throughout most of the project

phase and all installation will happen on

customer premises. As such the customer have

physical control of the asset including control

over functional and operational structures.

Legal ownership of the work performed is also

transferred to the customer as the work is

carried out. Based on this it is the company’s

assessment, that revenue recognition over time

is correct for these contracts.

Measure of progress is based on cost incurred

relative to the total expected cost to satisfy the

performance obligation.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

2.17 CONTRACT COSTS

For revenue where performance obligations are

satisfied over time, which is the primary source of

revenue at the group, all cost are recognized as

expensed when incurred because control of the work

in progress transfers continuously to the customer as

it is produced and not at discrete intervals.

For contracts where performance obligation are satisfied

at a point in time, IAS 2, Inventory, sets the accounting.

Cost to obtain a contract are immaterial for the group

and expensed when incurred.

Balance sheet classification

For contracts recognized “over-time”, an amount

equal to completed, not invoiced, performance

obligations based on transaction price are recognized

as contract asset, while prepayments from customers

are recognized as contract liability. For contracts

where there is both a contract asset and a contract

liability, it is presented net in the consolidated

statement of financial position.

Onerous contracts

The full loss is recognized immediately if contracts

are forecast to be loss making. The full loss includes

all relevant contract costs.

2.18 IMPAIRMENT OF ASSETS

Non-financial assets

At the reporting date, the group assesses whether

there are indications that an asset may be impaired.

If any indication exists, or when annual impairment

testing for an asset is required, the group estimates

the asset’s recoverable amount. For goodwill and

intangible assets not yet available for use, or with an

indeterminable useful life, the recoverable amount

is estimated at the same time each year. An asset’s

recoverable amount is the higher of an asset’s or

cash-generating unit’s (CGU) fair value less costs of

disposal and its value in use. Recoverable amount

is determined for an individual asset, unless the

asset does not generate cash inflows that are largely

independent of those from other assets or groups

of assets. When the carrying amount of an asset

or CGU exceeds its recoverable amount, the asset

is considered impaired and is written down to its

recoverable amount.

In the assessment of value in use, the estimated

future cash flow is discounted to net present value,

with a pretax market-based discount rate. The rate

takes into consideration the time value of money

and asset-specific risk. With the purpose of testing

for impairment, assets that have not been tested

individually are grouped in the smallest identifiable

Construction contracts

(Engineer-to-order)

Long term construction contracts with

a typical duration of 18-48 months from

contracts are signed, to the projects are

closed. These projects are engineer-to-

order projects, which delivers turnkey

systems for shipyards around the world. The

projects are specialized systems for each

individual project, however there might be

an alternative use for the company.

“Point-in-time” revenue recognition where

revenue is recognized when the goods are

delivered and have been accepted by the

customer at their premises.

Service and after sales

contracts

The company delivers service-based

business, where work is done on the

customers equipment. These deliveries are

man-hour based and considered over-time

deliveries. Spare parts as part of the service

delivery are recognized upon delivery. Lead

time from order to completed customer

delivery is normally less than three months.

For after sales contracts, in which is sale of

components etc, revenue are recognized

upon delivery.

Revenue from contracts with customers for

other services is recognized over-time using a

cost progress method or is recognized over-

time as manhours and materials are delivered to

the customer.

Revenue from contracts with customers for

after sales, are recognized at point-in-time upon

delivery.

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NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

group of assets that generate incoming cash flow

which in all material aspects is independent of

incoming cash flows from other assets or group of

assets (cash generating units or CGU). Impairment is

determined for goodwill by assessing the recoverable

amount of each CGU (or group of CGUs) to which the

goodwill relates.

Impairment losses relating to goodwill cannot be

reversed in future periods. For other assets, an

assessment is made on each reporting date whether

there are indications that previously recognized

impairment losses no longer exist or have decreased.

A previously recognized impairment loss is reversed

only if there has been a change in the assumptions

used to determine the asset’s recoverable amount

since the last impairment loss was recognized. The

reversal is limited so that the carrying amount of the

asset does not exceed its recoverable amount, nor

exceed the carrying amount that would have been

determined, net of depreciation, had no impairment

loss been recognized for the asset in prior years.

in profit and loss, and impairment of financial

assets. Borrowing costs not directly attributable to

acquisition, processing or production of a qualifying

asset, are included in profit and loss using the

effective interest rate method.

Foreign currency gains and losses are reported net.

2.19 CASH FLOW STATEMENT

The cash flow statement has been prepared based on

the indirect method.

2.20 EARNINGS PER SHARE

The basic earnings per share and diluted earnings

per share are presented for ordinary shares. The

basic earnings per share is calculated by dividing

the period’s earnings attributable to owners of the

ordinary shares adjusted for the number of own

shares.

Diluted earnings per share are calculated by adjusting

the earnings and the weighted average number of

ordinary outstanding shares, adjusted for the number

of own shares, for potential dilution effects.

2.21 FINANCIAL INCOME AND COST

Financial income consists of capital gains on financial

investments and changes to fair value of financial

assets to fair value in profit and loss. Interest income

is recognized in profit and loss using the effective

interest method.

Financial costs comprise interest costs on loans, the

effect of interest in discounted accruals, changes

to the fair value of financial assets to fair value

2.22 EQUITY

Transaction costs directly related to an equity

transaction are recognized directly in equity after

deducting tax expenses.

2.23 CONTINGENT LIABILITIES AND ASSETS

Contingent liabilities are not recognized in the

financial statements. Significant contingent liabilities

are disclosed, except for contingent liabilities that are

unlikely to incur.

Liabilities are recognized unless no reliable estimate

can be made. If no reliable estimate can be made, the

group accounts for the liability as a contingent liability.

3. Financial risk management

3.1 FINANCIAL RISK FACTORS

The group’s activities entail various types of financial

risk; market risk (including currency risk and interest

rate risk), credit risk, liquidity risk and operational risk.

The Board of Directors has the primary responsibility

for establishing and supervising the group’s

framework for risk management. The principles of

risk management have been established in order to

identify and analyze the risk to which the group is

exposed. Principles and systems for risk management

are regularly reviewed to reflect any changes in

activities and market conditions.

The audit committee reviews management’s

monitoring of the group’s principles and procedures

for risk management.

The group’s main risk management plan focuses

on the unpredictability of the capital market and

attempts to minimize its potentially negative effects

on the group’s financial results. The group engages in

international operations and is especially exposed to

currency risk. The group uses hedging to reduce the

risk of currency exposure.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

The group has a decentralized structure with

operational supervision of the various business units,

where the main management of financial risk is

determined by the Board of Directors. This applies to

areas such as currency risk, interest rate risk, credit risk

and use of financial derivatives.

For the classification of financial assets and liabilities,

reference is made to Note 19.

downturn in the oil-gas market may impact the

market outlook for some of these products.

Further description of the group’s market risk can be

found in the Directors’ report.

a) Currency risk

The group operates on a world-wide basis and is

exposed to currency risk in foreign currencies. Exposure

to the risk in foreign exchange rates relates primarily

to the group’s operating activities (when revenue or

expense is denominated in foreign currencies).

The group manages its foreign currency risk by

hedging the net exposure in foreign currencies, which

is mainly USD and EUR. Currency cash flow forecasts

are reviewed on a regular basis and the group aims

to hedge a portion of the forecasted net currency

exposure that matures within a 24-months period.

Forward exchange contracts are used as hedging

instruments and they are designated as hedges of

firm commitments for those hedging relationships

that qualify for hedge accounting. When necessary,

forward exchange contracts are prolonged as they

mature.

For other monetary assets and obligations in foreign

currency, net exposure is monitored, and is adjusted

by purchasing and selling foreign currency when

necessary.

The group has insignificant investments in foreign

subsidiaries where net assets are exposed to

currency risk at conversion of currency.

b) Interest rate risk

Interest rate risk is the risk that the fair value or future

cash flows of a financial instrument will fluctuate

because of changes in market interest rates. As per

31 December 2022, the group does not have any

interest-bearing debt, hence no material exposure

to the risk of changes in market interest rates.

The group’s surplus liquidity is in the form of bank

deposits. Any divergence from the use of a floating

rate of interest and placement of surplus liquidity

shall be determined by the Board of Directors.

Items exposed to interest rate risk are mainly related

to bank deposits and undrawn credit facilities.

MARKET RISK

Market risk is the risk of changes to market prices, such

as foreign exchange rates interest and commodities,

affecting the income or value of financial instruments.

Management of market risk intends to monitor that

risk exposure lies within a set framework.

The companies of the group buy and sell financial

derivatives and incur financial obligations to control

market risk. Transactions are carried out within the

guidelines issued by the group. Hedge accounting

is used for FX contracts that qualify for hedge

accounting. The remaining contracts are measured at

fair value through profit and loss.

There are a number of risks related to the market

development for Nekkar’s products and services.

Nekkar monitors these risks through its sales network

and by monitoring relevant available information on

trends like shipyard utilization indicators, investment

trends and oil prices.

Within BUSYS, the order backlog is strong at over

NOK 824 million and represents a solid operational

foundation for the coming periods. Future demand

for the current product portfolio depends on

the shipyards’ need to implement more efficient

production lines. Currently, there are no signs that the

yard industry’s focus on restructuring and increased

productivity will diminish. From the volume of

identified prospects, we expect there is potential for

further growth in the segment.

Renewables and aquaculture are still product

development projects. For these business areas the

risk factors mainly relate to commercialization of the

products and solutions. Digital Solutions (Intellilift)

has a proven commercialized technology and the

products have been sold to both oil-gas related

business and wind industry. However, a potential

4 5

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

c) Price risk

The group is exposed to fluctuations in market

prices in the operational areas related to contracts,

including changes in market prices for raw materials,

equipment and development in wages. These

risks are to the extent possible managed in the

bid processes by locking in committed prices from

vendors as a basis for offers to customers, or by

striving to place purchase orders to vendors as

soon as possible after contract signing or through

escalation clauses with customers.

Furthermore, the majority of Nekkar’s long-term

service contracts with customers have built-in

clauses that ensure annual inflation adjustments that

correspond to recognized consumer price indices or

similar. Nekkar also has internal processes in place to

effectively manage price risk, including mandatory

internal controls and safeguarding processes for

tenders and contracts.

As of 31.12, the group had the following maturity

distribution on its external customers:

(NOK

1000) Total

Not

due

0-3

months

overdue

3-6

months

overdue

months

overdue

31.12.2022 106 875 28 488 56 321 -1 248 23 314

31.12.2021 134 749 85 982 42 099 4 031 2 637

For accounts receivable that are not yet due, the

assessment is, based on previous experience, that

there is no need to impair the value. Accounts

receivables relate to independent customers who

have no previous history of failing to fulfill their

obligations to the group. Invoicing is to a large extent

carried out in accordance with milestone-based

progress in each project.

The above table is presented net of bad debt

provisions. As per 31 December 2022, a provision NOK

13 million is included due to uncertainty for payment

in one project. Hence, the gross amount of accounts

receivables > 6 months overdue is NOK 36 million.

Additional information on accounts receivable is

available in Note 9.

CREDIT RISK

Credit risk is the risk that a counterparty will not

meet its obligations under a financial instrument or

customer contract, leading to a financial loss. The

group is exposed to credit risk from its operating

activities (primarily for trade receivables and contract

assets) and from its financing activities, including

deposits with bank and financial institutions, foreign

exchange transactions and other financial instruments.

Credit risk is handled at a corporate level. The credit risk

is reduced through distribution on several counterparts.

Requirements to credit ratings have been established

toward counterparts, and new customers are subject

to credit rating test. In order to minimize the risk

of losses the group applies comprehensive use of

Letters of Credit toward its customers. The group

carries out assessment of credit risk to the political

structure depending on the economic importance

of the agreements based on assessments from the

OECD and other equivalent factors.

Maximum risk exposure is represented by the extent

of financial assets recognized in the balance sheet.

Please find additional information in Note 19.

The counterparties for derivatives and bank deposits are

investment grade rated banks (Nordea and DNB), and the

credit risk related to these are considered insignificant.

LIQUIDITY RISK

Liquidity risk is the risk of the group being unable to

fulfill its financial obligations as they fall due. Liquidity

risk management implies maintaining sufficient cash

and committed credit facilities for the group to meet

obligations as they mature for payment.

As of 31 December 2022, the group’s credit facilities

include a guarantee and derivatives facility of NOK

350 million, an overdraft facility of NOK 100 million

and a revolving credit facility of NOK 100 million.

All facilities are with Nordea. As per 31 December

2022, the group had drawn NOK 201 million of the

guarantee facility. No amount has been drawn on the

overdraft and the revolving credit facility.

The group is continuously focusing on efficient

management of working capital in order to optimize

cash flow from operations. The group has established

a joint cash pool arrangement that includes Nekkar

ASA, Syncrolift AS and Nekkar SkyWalker Onshore AS.

The cash pool arrangement improves accessibility and

flexibility in the management of liquidity funds.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

The group’s liquidity development is continuously

monitored based on liquidity forecasts from the

Business units.

The group’s strategy is always to have sufficient cash

reserves or credit facilities available to be able to

finance its operations and investments.

CLIMATE RISK

Nekkar develops digitalised impact technologies that

aim to unlock customer value, including reduction

of environmental footprint and CO2-emissions,

in numerous industries including renewables,

aquaculture, shipping and offshore energy. As

such, climate change represents both a risk and

an opportunity for Nekkar. Nekkar considers its

main climate risks to be associated with the global

ambition/implementation gap for the transition to

more renewable energy, as well as climate policy

and taxation changes that could limit or delay

the adoption of Nekkar’s new technologies that

are enablers to reduce the carbon footprint in the

industries the company operates. This applies to both

the renewables and aquaculture industries.

The table below gives an overview of the structure of maturity of the group’s financial obligations:

Remaining period:

2022 < 6 months 6-12 months 1-5 years > 5 years Total

LONG-TERM FINANCIAL OBLICATIONS:

Interest-bearing non-current liabilities - - - - -

CURRENT FINANCIAL OBLIGATIONS:

First year’s installments on non-current liabilities - 1 549 - - -

FX-derivatives 3 988 - 3 210 - 7 198

Prepayments for customers 42 418 - - - 42 418

Accounts payable and other current liabilities 103 390 - - - 103 390

Total financial obligations 149 796 - 3 210 - 153 006

2021 < 6 months 6-12 months 1-5 years > 5 years Total

LONG-TERM FINANCIAL OBLICATIONS:

Interest-bearing non-current liabilities - - - - -

CURRENT FINANCIAL OBLIGATIONS:

First year’s installments on non-current liabilities - - - - -

FX-derivatives 2 567 - 1 404 - 3 971

Prepayments for customers - 29 456 - - 29 456

Accounts payable and other current liabilities 96 825 - - - 96 825

Total financial obligations 99 392 29 456 1 404 - 130 253

Nekkar’s exposure to the oil and gas industry is

limited today, but could grow in the coming years.

The offshore energy industry has been identified

as high risk by the Task Force on Climate-Related

Financial Disclosures, and the industry is under

pressure to reduce its emissions. Although the

Ukraine war and associated energy shortage in

Europe is likely to result in heavy investments in the

offshore energy industry in the coming years, there is

a long term risk of declining investment in upstream

oil and gas. However, the software and technologies

that Nekkar delivers are capable of significantly

reducing drilling time and amount of personnel

required offshore, thereby substantially reducing the

carbon footprint associated with this type of offshore

4 7

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

operations. As such, climate-related risks also

represents an opportunity for Nekkar.

The energy transition may shorten the expected

useful lives of oil and gas related assets, which has

the potential to accelerate depreciation charges.

However, Nekkar is primarily a software supplier

to the oil and gas industry, which means that the

company does not expect assessment of effect on

useful lives to have significant accounting impact.

Another climate risk is the increase in the frequency

and intensity of extreme weather events. As the

large majority of Nekkar’s operations is based in

Norway, this expectation is not assessed to lead

to any effects on expected useful economic life of

property, plant and equipment. However, extreme

weather could result in delayed project progress, for

example for installation of shiplifts in parts of the

world that are more exposed to extreme weather.

This could potentially mean that revenue and margin

recognition could be delayed in such projects. Nekkar

has not experienced any delays caused by extreme

weather events during 2022.

Overall, it is Nekkar’s view that the company is

well positioned to profit from a stronger focus on

reducing emissions from the industries the company

operates within, and that there are more positive

business opportunities than negative risks associated

with stronger industry efforts on reducing emissions

and combating climate change.

Nekkar has considered the impact of climate change

on going concern. Effective assessment and analysis

of climate-related risks and opportunities is vital to

understand the potential impacts of climate-related

risks on asset valuations, revenue and investment

requirements. For 2023, Nekkar has therefore

defined an objective to conduct a detailed climate

risk analysis and set carbon footprint reduction goals

for the company.

from laws, rules and generally accepted principles for

business conduct. Operational risk arises in all of the

group’s business areas.

The group’s deliveries are primarily organized in the

form of projects. The group continuously strives to

improve operations and projects implementation.

This further includes operational and financial

qualification of major sub-suppliers in order to reduce

completion risk in the projects.

The group handle operational risk so that a balance is

reached between avoiding economic loss or damage

to the group’s reputation, general cost effectiveness,

and to avoid control routines that limit initiative and

creativity.

The responsibility to develop and implement controls

designed to handle operational risk is allocated to

the top management within each business area. This

responsibility is supported by developing the overall

group standard for management of operational risk

in various areas.

3.2 ESTIMATION OF FAIR VALUE

Fair value of financial instruments traded in an active

market are based on the market value on the balance

sheet date. The group has non such items in the

financial statement.

Fair value of financial instruments not traded in an

active market is estimated using valuation techniques

(primarily discounted future prospective cash flows)

or other relevant information for giving a best

estimate of fair value on the balance sheet date.

Examples of this are forward contracts in foreign

currencies where fair value are calculated by using

the change in the currency on the balance sheet date.

Fair value of drawings/technology acquired in a

business combination is determined using the relief

of royalty method. The valuation is based on the

concept that if the company owns a technology,

it does not have to rent, and is then relieved from

paying a royalty.

The fair value of other intangible assets is based on

the discounted cash flows expected to be derived

from the use and eventual sale of the assets.

OPERATIONAL RISK

Operational risk is the risk of direct or indirect losses

as a result of a whole range of causes related to

the group’s processes, personnel, technology and

infrastructure, as well as external factors besides of

credit risk, market risk and liquidity risk that follow

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

b) Assumptions and estimation uncertainties

Information about assumptions and estimation

uncertainties that have a risk of resulting in a material

adjustment to the carrying amounts of assets and

liabilities within the year ending 31 December 2022 is

included below and in respective notes:

• Impairment test of intangible assets and goodwill:

key assumptions underlying recoverable amounts.

For further description of assumptions and

estimation uncertainties, please see Note 7.

• Revenue recognition of construction contracts:

Recognition of revenue from construction

contracts is done in accordance with the

percentage of completion method, ref. IFRS 15.

The assessment of project costs is based on

several estimates and assessments, each which

have an inherent uncertainty. The percentage

of completion method requires that the group

prepare reliable estimates for future costs for

each project.

• Warranty liability: The group customarily offers

a warranty period of one/ three years on its

delivered products. Management estimates

accruals for future guarantee commitments

based on information from historical guarantee

claims, together with updated information of

the quality of recent deliveries. Factors that may

affect estimated obligations include the outcome

of productivity and quality initiatives, as well as

reference prices and labor costs.

• Deferred tax assets: The group has recognized

deferred tax assets related to the Norwegian

companies. The following criteria have been used

to estimate whether it is probable that future

taxable profit will be available against which

unused tax losses can be utilized:

* The group has convincing evidence that future

taxable profit will be available against which the

unused tax losses can be utilized by the entity

* The group has sufficient temporary differences

* Tax losses is a result of specific identifiable

causes

In addition to the above, the Syncrolift business has

a strong earnings history. The group has NOK 94

million (2021: NOK 74 million) of tax losses carried

forward and recognized deferred tax assets as per 31

December 2022 is MNOK 7 (2021: MNOK 16). Further

details on taxes are disclosed in Note 13.

4. Use of judgement and estimates

The key assumptions concerning the future and

other key sources of estimation uncertainty at the

reporting date, that have a significant risk of causing

a material adjustment to the carrying amounts of

assets and liabilities within the next financial year, are

described below. The group based its assumptions

and estimates on parameters available when the

consolidated financial statements were prepared.

Existing circumstances and assumptions about future

developments, however, may change due to market

changes or circumstances arising beyond the control

of the group. Such changes are reflected in the

assumptions when they occur.

In preparing these consolidated financial statements,

management has made judgements, estimates and

assumptions that affect the reported amounts of

assets, liabilities, income and expenses. Actual results

may differ from these estimates.

Estimates and underlying assumptions are reviewed

on an ongoing basis. Revisions to estimates are

recognized prospectively.

a) Judgements

Information about judgements made in applying

accounting policies that have the most significant

effects on the amounts recognized in the

consolidated financial statements is included below

and in respective notes:

• Revenue recognition - Right to payment (IFRS 15):

For contracts with no termination for convenience

clause, the group’s enforceable right to payment is

subject to general law in the relevant jurisdiction.

In most cases with termination, the group is

responsible to mitigating the customer’s losses

by maximizing revenue from alternative sources.

Based on historic numbers and current estimates,

alternative revenue sources are considered

insignificant. Consequently, the major portion

of a contract value and company profit will be

compensated from the initial contract holder.

4 9

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 1 Operating segments

Amounts in NOK 1000

The segments structure in Nekkar are as follows:

CONTINUED BUSINESS consist of

Shipyard Solutions: The Shipyard Solutions segment includes the business related to deliveries of

shiplift and docking systems along with other products and services to shipyards

and naval bases. The business consists of three main areas:

• Shiplift and transfer systems: deliveries of complete tailored shiplifting and

transfer systems. The offering includes design, engineering, assembly and

installation

• FastDocking: new products and solutions which are designed to increase on-

land productivity within docking and ship handling

• Service and upgrades: annual inspections on shiplifts, maintenance, spare

replacements and upgrades of small and larger components

Digital Solutions: The Digital Solutions segment is the competence hub that serves both other

business areas in Nekkar along with customers outside the group. The business

segment possesses unique competence within engineering, electrification,

digitalisation and automation. Intellilift AS is the driving force of this business

segment.

Other/Eliminations Includes group functions in the parent company, the development projects within

Aquaculture and Renewables and group eliminations. In the Aquaculture business

area, Nekkar is currently developing and planning a full-scale test of game-

changing technologies with high sustainability impact on aquaculture. Nekkar’s

“Starfish” closed fish cage is a fully automated, closed cage solution that has

double protection against escapes, avoids problems with salmon lice due to water

intake from deep waters below the cage, and can collect a significant amount of

biological waste. It is a solution that could reduce OPEX levels dramatically for the

fish farming industry, while simultaneously improving fish health.

Renewables include the development of SkyWalker, a disruptive wind turbine

installation technology that could significantly reduce the cost and environmental

footprint associated with wind turbine installations. During the year, the

production of a down-scaled version (1:20) was completed and tested.

In 2022, capitalized development costs related to the development of Starfish

and SkyWalker amounted to MNOK 14.0 net of government funding of MNOK

2.4 and MNOK 8.4 in government grants respectively. Due to the current size of

these business areas, they are not yet qualified as an operating segment, hence

presented as Other.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

2022 2021

BU SYS Digital

Other/

Elim Total BU SYS Digital

Other/

Elim Total

External revenue 383 138 4 365 - 387 503 468 437 10 398 1 148 479 983

Internal revenue 285 18 018 11 539 29 842 180 31 390 4 150 35 720

Total revenue 383 423 22 384 11 539 417 346 468 617 41 788 5 298 515 703

Intergroup eliminations -285 -18 018 -11 539 -29 842 -180 -31 390 -4 150 -35 720

Consolidated revenue 383 138 4 365 - 387 503 468 437 10 398 1 148 479 983

Earnings before depreciation,

finance and tax (EBITDA) 88 840 4 012 -30 611 62 241 158 452 6 282 -24 966 139 768

Depreciation/amortisation 1 663 1 350 7 463 10 475 2 083 1 543 2 039 5 665

Operating profit/loss 87 177 2 662 -38 074 51 766 156 369 4 739 -27 005 134 103

Financial income 2 034 - 2 850 4 884 486 - 5 210 5 696

Financial cost 10 044 50 3 922 14 016 3 147 8 4 110 7 265

Segment profit/loss before tax 79 168 2 612 -39 146 42 634 153 709 4 731 -25 906 132 534

Income tax expense 17 344 740 -8 104 9 981 34 921 1 952 -15 959 20 914

Profit after tax 61 823 1 872 -31 042 32 654 118 788 2 779 -9 946 111 621

This year's capital expenditures 2 980 6 378 13 043 22 401 4 252 5 856 15 538 25 645

Information about geographical areas

The activity are primarily distributed in the following regions:

Revenue 2022 2021

South Asia 153 831 130 041

North East Asia 4 588 112 309

Europe 36 116 108 417

South East Asia 27 552 88 340

Africa 11 279 17 499

North America 136 029 16 634

South America 3 842 -155

West Asia 13 537 5 806

Australia 143 -

Other 584 1 091

Total revenue 387 503 479 983

Sales are allocated based on the customer’s country of domicile.

Since revenue is project based, historic geographical allocation will not be representative for business going

forward.

During 2022 BU SYS has two customers that each accounted for more than 10% of the segments revenue.

These customers generated revenue of MNOK 139 and MNOK 83 respectively.

5 1

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 2 Revenue

Amounts in NOK 1000

Revenue streams

Description of revenue streams are presented under “Accounting principles” in section 2.16.

2022 2021

Revenue from construction contracts recognized over time 315 350 420 275

Revenue from construction contracts recognized point in time - 4 321

Revenue from service contracts 67 788 43 856

Other operating revenue 4 365 11 531

Total revenue 387 503 479 983

Contract balances

2022 2021

Trade receivable 106 875 134 749

Contract assets 113 616 20 153

Contract liabilitites 42 418 29 456

Contracts assets are primarily related to the Group’s rights to considerations for work performed, but not

invoiced at the reporting date. This is classified as accrued, non-invoiced production in the consolidated

statement of financial position. Contracts liabilities relates to advance consideration received from customer

on work not yet completed. This is classified as prepayments from customer in the consolidated statement of

financial position. Contract assets and contract liabilities are presented net on project for project basis. Revenue

recognized in 2022 that was included in contract liabilities in the beginning of the year is MNOK 29. (MNOK 187

for 2021).

Disaggregation of revenue from contracts with customers

Revenue from contracts with customers is disaggregated by primary geographical market under segment

information in Note 1.

Transaction price allocated to the remaining performance obligation

The following table shows the remaining performance obligation on committed projects:

2022 2021

Contracted revenue projects and long-term service contracts 1 510 943 1 556 306

Accumulated Revenue recognized per 31 December 686 991 758 158

Aggregated amount of the transaction price allocated to

unsatisfied performance obligation 823 952 798 148

Production time for typical Shipyard Solutions projects are up to 48 months, hence revenue allocated to the

remaining performance obligation is expected to be recognized within the next 48 months. The above does not

include short-term service orders.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 4 Payroll expenses and employee information

Amounts in NOK 1000

Payroll expenses 2022 2021

Salaries 59 489 57 316

Employer's social security contribution 9 530 8 503

Pension cost 5 604 4 488

Other benefits 3 671 3 513

Total payroll expenses 78 294 73 820

Number of employees at the end of the year 68 62

Payroll expenses of MNOK 18.8 (2021: MNOK 16.7) has been capitalized as R&D in 2022 (Note 7).

Board remunerations

2022 2021

Trym Skeie Board member since 06.2009. 500 500

Gisle Rike

Board member since 06.2015. 315 315

Ingunn Svegården Board member since 10.2019 315 315

Marit Solberg Board member since 10.2019 315 315

Total 1 445 1 445

1) The Annual General Meeting determines the remuneration to the Board and nomination commitee from one General Meeting to

the next. For the financial year 2022, the reported remuneration is related to the remuneration paid in 2022 based on the amounts

determined by the Board at the Annual General Meeting for 2021.

2) Gisle Rike represents Rasmussengruppen and the board fee is paid to Rasmussengruppen.

The board has not received any remuneration beyond director`s fee. No loans or severance pay is given to the

directors.

Nomination Committee remuneration

Nekkar’s nomination committee comprised of the following members: Anne Grethe Ellingsen (Chairman) and

Leif Haukom. The nomination committee remuneration paid in 2022 was TNOK 67 for the chairman and TNOK

40 for the member, a total of TNOK 107.

Note 3 Inventories

Amounts in NOK 1000

2022 2021

Spare parts 1 145 2 405

Work in progress 1 172 1 069

Obsolescence - -

Total inventories 2 317 3 474

5 3

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Statement regarding the stipulation of remuneration and other benefits for the

CEO and other Executives

Regarding Group management, Nekkar ASA’s remuneration policy is based on offering competitive terms.

Remunerations should reflect that Nekkar is a listed company with an international focus.

The annual remuneration is based on Group managements part-taking in the results generated by the company

and the added value for shareholders through increased company value.Remuneration consists of two main

components; Base salary and bonus.

• Base salaries is intended to be competetive and motivating, but in line with general market terms.

• Bonus for the CEO and other executives is determined on the basis of target results and on individual

targets. Bonus targets are revised annually and is limited to 50 % of base salary for the CEO and other

executives. Bonus payment reported in 2022 is based on the evaluation of the relevant performance criteria

for the fiscal year ending 31.12.2021. Bonus payments are based on individual employment contracts. A total

bonus provision of MNOK 3.2 is included in other current liabilities per 31.12.2022 for the CEO and other

executives based on the 2022 targets. The final bonus payment is to be approved by the board.

Senior executives have six months notice, and severance pay periods of up to 6 months. Reference is made to

the remuneration report for further details.

Remuneration and other benefits for the CEO and other Senior Executives

employed during 2022

Amounts in NOK 1000

Name Position

Base

salary

Other

benefits

Bonus

paid

Pension

cost

Ole Falk Hansen CEO - from 7.2022 1 288 7 98

Preben Liltved

Interim CEO - from 9.2020. COO from 7.2022 1 931 7 - 103

Rolf-Atle Tomassen EVP Shipyard Solutions 1 955 20 691 196

Mette Harv EVP Aquaculture & Renewables 1 765 14 - 222

Marianne Voreland Ottosen Head of Finance - from 4.2022 819 111 - 138

Kristoffer Lundeland

CFO - Hire in until 8.2022 1 667 - - -

1) Hired in untill 6.2022, Of total base salary, MNOK 1.1 equals amount invoiced from Eyde Mooring Solutions AS. Preben Liltved holds

19,7% of the shares in Eyde Mooring Solutions AS.

2) Hired in, salary equals amount invoiced from Ernst & Young AS

Other benefits Board remuneration, sign-on fee, car, group life insurance, phone, newspaper, etc.

Bonus paid Bonus paid to employee in current year

Remuneration of Auditor 2022 2021

Statutory audit 1 294 1 573

Other attestation services 75 0

Tax advisory 0 0

Other non-audit service 108 271

Expenses 0 0

Total 1 477 1 844

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 5 Pensions

Amounts in NOK 1000

Nekkar companies have established pension plans in accordance with local practice and law regulations. In

general Nekkar has set up defined contribution plans for all employees. Annual contribution paid during the

year is expensed when incurred.

Reference is made to the remuneration report for further details.

2022 2021

Total pension cost Insured Uninsured Total Insured Uninsured Total

+ Defined contribution plan 5 604 - 5 604 4 488 - 4 488

= Total pension cost 5 604 - 5 604 4 488 - 4 488

- of which recognized as payroll cost 5 604 5 604 4 488 4 488

- of which recognized as finance cost - - - - - -

5 5

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 6 Fixed assets

Amounts in NOK 1000

Right-of-use

asset

Furniture, office-

equipment, etc.

Starfish

downscaled

pilot version Total

As of 31.12.2021

Acquisition cost 31.12. 8 429 36 035 5 500 49 965

Accumulated depreciation and impairments as of 31.12. -2 626 -26 408 -688 -29 721

Book value as of 31.12.2021 5 804 9 627 4 812 20 243

2022 Financial year

Book value as of 1.1. 5 804 9 627 4 812 20 243

Additions - 2 427 - 2 427

Disposals -

Depreciation, amortization and impairments -1 394 -2 245 -4 812 -8 451

Book value as of 31.12.2022 4 409 9 808 - 14 219

As of 31.12.2022

Acquisition cost 31.12. 8 429 38 463 5 500 52 392

Accumulated depreciation and impairments as of 31.12. -4 020 -28 652 -5 500 -38 171

Book value as of 31.12.2022 4 409 9 809 - 14 219

Undiscounted lease liabilities and maturity of cash outflows

Lease payments 2023 1 597

Lease payments 2024-2025 3 061

Lease payments 2025 > -

Total undiscounted lease liabilities at 31.12.2022 4 658

1) The lease liability does not included the 5 yr option period for the offices in Syncrolift. Yearly KPI adjustments are included in the rental

contract, however not included in the calculation of lease liability. When calculating the Right-of-use asset, a discount rate of 6,26% is

applied.

Nekkar finalized the production of a down-scaled pilot version of Starfish at the end of Q3 2021. Total allocated

production cost was TNOK 5 550. The down-scaled pilot served as a testing unit for new features and technology

and the testing was finalized in June 2022. The down-scaled pilot was fully depreciated at the end of 2022.

Lease expenses included in the profit and loss amounted to MNOK 2.0 and MNOK 1.3 in 2022 and 2021

respectively. The expensed leasing amount is related to short-term lease agreements and low value assets.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 7 Intangible assets

Amounts in NOK 1000

Customer

portfolio

Patents,

licences etc

Digital

Solutions

Development

costs

Technology

assets Goodwill Total

As of 31.12.2021

Acquisition cost 31.12. 9 616 534 7 241 26 736 3 300 16 643 64 070

Acc. depreciation and amortization -4 931 -412 -1 093 - -908 - -7 344

Book value as of 31.12.2021 4 685 123 6 148 26 736 2 392 16 643 56 727

2022 Financial year

Book value 1.1. 4 685 214 6 148 26 736 2 392 16 643 56 727

Additions - - - 31 898 - - 31 898

Public grant - - - -12 546 - - -12 546

Acquisitions 625 - - - - - 625

Disposals - - - - - - -

Depreciation and amortization -363 -53 -943 -334 -330 - -2 024

Book value as of 31.12.2022 4 947 160 5 205 45 753 2 062 16 643 74 678

Useful life (years) 20 years 5-10 5-7 5-10 10 years Infinite

As of 31.12.2022

Acquisition cost 31.12. 10 241 534 7 241 46 088 3 300 16 643 84 047

Acc. depreciation and amortization -5 294 -465 -2 037 -334 -1 238 - -9 368

Book value as of 31.12.2022 4 947 69 5 205 45 753 2 062 16 643 74 678

Development cost (R&D) includes capitalised

development cost of MNOK 15 related to the closed

fish cage solution Starfish, MNOK 14 to project

SkyWalker and MNOK 8.1 regarding project Inteliwell

and Robotoc driller in intellilift. Total public grants

received on these projects amounts to MNOK 12.5 in

2022.

Technology assets and goodwill relates to the

acquisitions of Intellilift AS in 2019.

Total R&D expenses in 2022 was MNOK 3.5. The

amount is included in other operating expenses in the

consolidated statement of comprehensive income.

5 7

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Allocation of goodwill and

impairment assessment

Recognized goodwill relates to the acquisition of

Intellilift and amounts to MNOK 17 as of 31 December

2022. Included in goodwill is the value of employees

with special skills and expected synergies with the

existing business of the Group. These intangible

assets do not fulfil the recognition criteria under

IAS 38 and are therefore not recognized separately.

Reference is made to note 20 Business Combinations.

In accordance with IAS 36, goodwill is not amortized,

but is tested for impairment at least annually, or

when there are indications of impairment. Nekkar

performed its annual impairment test in December

2022.

Goodwill is tested for impairment by groups of cash

generating units (CGU) and Intellilift is assessed as

one CGU. As of 31 December 2022, the recoverable

amount of the CGU has been determined based on a

value in use calculation using cash flow projections

from the 2023 budget and a total forecast period of

5 years. The pre-tax discount rate applied to the cash

flow projections is 15.7% and the cash flows beyond

the five-year period are extrapolated using a 1.5%

growth rate.

The impairment test indicated that the recoverable

amount exceeds the book value of the CGU, hence no

impairment is recognized as per 31 December 2022.

The value in use is based on several key assumptions

and is most sensitive to the following:

• Discount rate (WACC)

• Gross margins

• Growth assumptions in cash flow projections

• Terminal growth rate

If these key assumptions are developing unfavorably

it may cause a need for impairment of the recognised

goodwill. However, management believes that only a

significant change in the assumptions used will lead

to an impairment.

CGU Digital Solutions 2022 2021

Goodwill 16 643 16 643

Other intangible assets 21 117 16 341

Total 37 760 28 035

Development costs

The Group performed its impairment assessment

in January 2023. The recoverable amount has been

determined based on a value in use calculation using

5 year cash flow projections. The impairment test

indicated that the recoverable amount exceeds book

value, hence no impairment is recognized as per 31

December 2022.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 8 Subsidiaries and investments in other companies

The following subsidiaries are basis for the consolidated accounts 31.12.22:

Subsidiary of Nekkar ASA Registered office

Acquisition

year Ownership

Voting

Local

currency

Functional

currency

Share capital

in local currency

Syncrolift AS Vestby, Norway 1994 100% 100% NOK NOK 1 045 000

Nekkar AS Kristiansand, Norway 2018 100% 100% NOK NOK 60 000

Nekkar SkyWalker Onshore AS Kristiansand, Norway 2022 100% 100% NOK NOK 30 000

Subsidiary of Syncrolift AS Registered office

Acquisition

year Ownership

Voting

Local

currency

Functional

currency

Share capital

in local currency

Syncrolift Inc USA 2019 100% 100% USD USD -

Syncrolift South East Asia Singapore 2019 100% 100% SGD SGD -

Subsidiary of Nekkar AS Registered office

Acquisition

year Ownership

Voting

Local

currency

Functional

currency

Share capital

in local currency

Intellilift AS Kristiansand, Norway 2019 51% 51% NOK NOK 101 321

Subsidiary of Intellilift AS Registered office

Acquisition

year

Owner-

ship

Voting

Local

currency

Functional

currency

Share capital

in local currency

Intellirob AS Kristiansand, Norway 2019 100% 100% NOK NOK 30 000

1) Represents Intellilift AS’ share.

As per 31 December 2022 Nekkar do not hold any positions in other companies.

5 9

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 9 Trade and other receivables

Amounts in NOK 1000

Trade receivables 2022 2021

Trade receivables 119 842 147 662

Loss provisions -12 967 -12 913

Net trade receivables 106 875 134 749

Trade receivables (net) per currency: 2021 2020

EUR 14 186 43 974

USD 85 725 66 283

NOK 4 671 4 124

SGD 2 293 19 502

Other currencies - 866

Total 106 875 134 749

For additional information on accounts receivables and associated risks, see Accounting Principles and sections

2.8, 3.1 and 4 and Note 19.

Other short-term receivables 2022 2021

VAT 5 866 5 905

Prepayments 819 1 275

Fair value of firm commitment, effective hedging contracts - -

Prolonging of effective hedge relationship 137 5 255

Other receivables 302 1 470

Other short-term receivables 7 126 13 906

For accrued, not invoiced revenue, see Note 2 Revenue.

For receivables relating to derivatives and hedge accounting, see Note 16 Derivatives.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 10 Assets pledged as security and guarantees

Amounts in NOK 1000

Nekkar ASA has no interest bearing debt, however a guarantee and credit facilities with Nordea Norge ASA is

established.

Nekkar has the following credit facilities through its facilitators:

2022 2021

Limit Drawn Limit Drawn

Guarantee limit for Group (Nordea) 290 000 200 897 290 000 223 853

Overdraft facility (Nordea) 100 000 - - -

Revolving Credit facility (Nordea) 100 000 - - -

The finance agreements include pledges of plant and machinery, inventory and accounts receivables in Nekkar

ASA and Syncrolift AS.

The guarantee limit is utilized by Nekkar ASA and Syncrolift AS and cover payment guarantee, performance

bonds, advance payment bonds and tax guarantees.

Under the new credit facilities established in 2022, the financial covenants are a debt ratio based on net debt/

EBITDA and an equity ratio based on equity/total assets.

• The company’s debt ratio shall not exceed 2,5 times the EBITDA and is calculated from the consolidated total

interest bearing debt to the consolidated EBITDA.

• Equity ratio shall not be lower than 35 %, calculated from the consolidated total equity to consolidated total

assets.

The covenants also include a condition requiring Nekkar to maintain its 100 % ownership in Syncrolift AS. The

covenants are monitored on a regular basis to ensure compliance with the credit agreements which are tested

and reported on a quarterly basis. Nekkar was in compliance with its covenants as of December 31, 2022.

For the above mentioned facilities the following assets have been pledged as collateral to Nordea:

Assets pledged as collateral for secured debt: 2022 2021

Account/Group receivables 125 947 153 326

Inventory/Work in progress, including non-invoiced production 125 035 23 604

Property, plant and equipment 8 995 14 196

Assets pledged as collateral * 259 976 191 126

* Assets pledged as collateral only includes Nekkar ASA and Syncrolift AS. The pledged assets are presented in the balance sheet under

the differenct categories. In addition, investments in subsidiaries and intercompany balances and loans are eliminated in the group

accounts.

A MNOK 10 bank deposit in DnB is in addition restricted and serves as collateral for derivative facilities with DnB.

6 1

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 11 Share capital and shareholder information

Amounts in NOK

Date Number of shares Nominal value Share capital

31/12/2022 106 780 334 0.11 11 745 837

31/12/2021 106 493 000 0.11 11 714 230

In 2022 there was an increase in share capital of NOK 31 607 and an increase in share premium of NOK 2 055 893.

The capital increase was related to a share purchase program where 287 334 shares were issued.

Dividends paid and proposed: 2022 2021

Dividend declared and paid during the year: per share - -

Dividend proposed: per share - -

Repayment of issued equity: NOK per share - -

Treasury shares: Number of shares

Share capital

(NOK 1 000)

Treasury shares as of 31.12.2021 6 632 1

Sale of treasury shares 2021 -

Treasury shares as of 31.12.2021 6 632 1

Purchase/(sale) of treasury shares 2022 - -

Treasury shares as of 31.12.2022 6 632 1

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Principal shareholders of Nekkar ASA as of 31.12.2022: Number of shares Ownership Voting share

Shareholder

SKEIE TECHNOLOGY AS

1,3)

31 475 823 29.5% 29.5%

RASMUSSENGRUPPEN AS 11 512 506 10.8% 10.8%

MP PENSJON PK 5 698 803 5.3% 5.3%

TIGERSTADEN AS 5 557 501 5.2% 5.2%

AVANZA BANK AB 4 764 545 4.5% 4.5%

DNB BANK ASA 4 053 000 3.8% 3.8%

NORDNET BANK AB 3 673 523 3.4% 3.4%

VINTERSTUA AS 3 157 682 3.0% 3.0%

SKEIE CONSULTANTS AS

1 507 243 1.4% 1.4%

ITLUTION AS 1 475 261 1.4% 1.4%

HATLE AS 1 447 833 1.4% 1.4%

SKEIE KAPPA INVEST AS

1 204 828 1.1% 1.1%

ALUNDO INVEST AS 1 000 000 0.9% 0.9%

PIROL AS 1 000 000 0.9% 0.9%

SEDAL 800 000 0.7% 0.7%

GUTTIS AS 800 000 0.7% 0.7%

MERRILL LYNCH PROF. CLEARING CORP. 791 886 0.7% 0.7%

BROWN BROTHERS HARRIMAN & CO 770 000 0.7% 0.7%

AVANT AS 744 034 0.7% 0.7%

NORDNET LIVSFORSIKRING AS 618 852 0.6% 0.6%

Total, 20 largest shareholders 82 053 320 76.8% 76.8%

own shares 6 632 0.0% 0.0%

Total other 24 720 382 23.2% 23.2%

Total 106 780 334 100.0% 100.0%

1) Shares owned or controlled by the Skeie family, and companies directly or indirectly controlled by them, holds 34 653 036 shares

representing 32,5% of total shares.

2) Shares owned or controlled by Bjarne Skeie, and companies directly or indirectly controlled by him, holds 1 507 243 shares representing

1,4% of total shares.

3) Trym Skeie holds 465 142 shares in person and 1 204 828 through Skeie Kappa Invest AS. Total shares owned or controlled by Trym

Skeie, and companies directly or indirectly controlled by him, is 1 669 970, representing 1,6% of total shares .

4) Voting portion are calculated after eliminating shares held by Nekkar ASA

6 3

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Shares, share options and convertion rights owned or controlled by Board members, Group executives and

their relatives:

31.12.2022 31.12.2021 31.12.2020

Board

Trym Skeie

1 669 970 1 632 939 1 482 939

Marit Solberg 96 809 73 479 73 479

Group Executives

Ole Falk Hansen

200 311

Preben Liltved 101 561 83 786 74 979

Rolf-Atle Tomassen 3 303 3 303 150 000

Mette Harv 198 765 198 765 189 958

1) Trym Skeie holds 465 142 shares in person and 1 204 828 through Skeie Kappa Invest AS. Total shares owned or controlled by Trym

Skeie, and companies directly or indirectly controlled by him, is 1 669 970, representning 1,6% of total shares.

2) Ole Falk Hansen holds 200 311 shares through OFH Invest AS.

30 May 2022, the Annual General Meeting adopted

a resolution to give the Board general authority to

issue a maximum of 10 678 034 shares against cash

or non-monetary redemption, including merger

related activities to acquisitions of business or assets

within the same or corresponding business sector

as the company. This authorization is valid until the

next Annual General Meeting and latest on 30 June

2023. No shares have been issued on the basis of this

authorization in 2022.

30 May 2022, the Annual General Meeting adopted

a resolution to give the Board authority to issue

a maximum of 2 820 058 shares against cash

redemption for the benefit of the company’s

executive management and board members. This

authorization is valid until the next Annual General

Meeting and latest on 30 June 2023. After 30 May

2022, no shares have been issued in relation to a

share purchase program, hence the remaining share

issue authority as per 31 December 2022 is 2 820 058

shares. As per 31 December 2022, there are no share

options in place in the company.

30 May 2022, the Annual General Meeting adopted

a resolution to give the Board authority to buy a

maximum of 7 356 674 shares in Nekkar ASA within

a price range of NOK 1 to NOK 25. The authority can

be used to buy own shares for deletion, or to use the

shares as part of remuneration of leading employees

or in the company’s share purchase program. The

authority is valid until the next Annual General

Meeting or latest 30 June 2023. No shares have been

bought on the basis of this authorization as of 30

April 2023.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 12 Earnings per share

Amounts in NOK 1000

Basic earnings per share

Basic earnings per share are calculated by dividing net profit for the year attributable to ordinary equity holders

of the parent by the weighted average number of ordinary shares outstanding during the year.

2022 2021

Net profit attributable to ordinary equity holders of the parent from continuing operations 31 839 110 224

Net profit attributable to ordinary equity holders of the parent from discontinued operations - -

Net profit attributable to ordinary equity holders of the parent from total 31 839 110 224

Weighted average of issued shares excluding own shares 106 327 106 327

Earnings per share - continuing operation (NOK per share) 0.30 1.04

Earnings per share - discontinued operation (NOK per share) - -

Earnings per share - total (NOK per share) 0.30 1.04

Diluted earnings per share:

In determining whether potential ordinary shares are dilutive or antidilutive, each issue or series of potential

ordinary shares is considered separately rather than in aggregate.

6 5

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

2022 2021

Profit used to calculate diluted earnings per share - continuing operation 31 839 110 224

Profit (loss) attributable to ordinary shareholders (diluted) 31 839 110 224

Profit used to calculate diluted earnings per share - discontinued operation - -

Profit (loss) attributable to ordinary shareholders (diluted) - -

Profit used to calculate diluted earnings per share - total 31 839 110 224

Profit (loss) attributable to ordinary shareholders (diluted) 31 839 110 224

Average of issued shares excluding own shares 106 327 106 327

Average number of ordinary shares for calculation of diluted earnings per share 106 327 106 327

Diluted earnings per share - continuing operation (NOK per share) 0.30 1.04

Diluted earnings per share - discontinued operation (NOK per share) - -

Diluted earnings per share - total (NOK per share) 0.30 1.04

Share structure 2022 2021

Issued number of shares 106 780 334 106 493 000

Own shares 6 632 6 632

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 13 Tax

Amounts in NOK 1000

Deferred tax assets related to losses which can be

carried forward for tax purposes, are reported if the

management believes it is likely that the company

can use these against expected taxable income for

the upcoming five years. Tax asset of MNOK 7.0

(2021: MNOK 16.0) have been recognized as per 31

December 2022.

Intellilift AS, which is held by 51% by Nekkar ASA, is

not part of the Norwegian tax group.

The following criteria have been applied to assess the

likelihood of taxable income against which unused

tax losses may be utilized:

• the Group has sufficient temporary differences

• the entities is expected to have taxable profits.

Tax losses carried forward do not expire within

the Norwegian tax system.

• tax losses are induced by specific identifiable

causes

• the Group do not carry any uncertainty

overincome tax treatments

Deferred tax liabilities and deferred tax assets are

netted if the Group has a legal right to offset deferred

tax assets against deferred taxes in the balance

sheet, and if the deferred taxes are owed to the same

tax authorities.

Income tax expense: 2022 2021

Payable tax on profit 1 568 2 618

Payable withholding taxes, taxes outside Norway - 0

Not allocated tax losses - -

Change in deferred tax*

)

8 413 24 317

Changes in unrecognized deferred tax asset - -6 022

Tax expense on continued operations 9 981 20 914

*) Includes TNOK -73 related to deferred tax on excess values from the acquisition of Intellilift in 2019.

Reconciliation of the effective tax rate 2022 2021

Profit before tax 42 634 132 534

Expected income tax according to income tax rate in Norway (22 %) 9 380 29 157

Permanent differences 351 -

This year's losses, and change in prior year's losses, not recognised - -8 244

Adjustment in tax in prior years 250

Tax expense in the profit and loss statement 9 981 20 914

Payable tax including witholding taxes - -

Effective tax rate 23.4 % 15.8 %

6 7

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Origin of tax expense: 2022 2021

Norway 9 981 20 914

Total tax expense 9 981 20 914

Tax payable in the balance sheet 2022 2021

Tax payable, (including withholding taxes) 1 571 2 618

Prepaid tax - -

Total tax payable in balance sheet at year end 1 571 2 618

Deferred tax assets: 2022 2021

Fixed assets 626 301

Projects under construction -19 967 -

Current assets 2 853 2 841

Other temporary differences / provisions 3 325 3 851

Tax losses to be carried forward 20 723 8 990

Gross deferred tax asset 7 560 15 982

- Unrecognized tax losses -527 -

Net recognized deferred tax assets

7 032 15 982

- Deferred tax assets to be recovered after 12 months - -

- Deferred tax assets to be recovered within 12 months 7 032 15 982

Net recognized deferred tax assets 7 032 15 982

1) Deferred tax asset relating to tax losses carried forward have been recognized as deferred tax asset to the extent that it is probable that

future profits will be available.

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 14 Other operating expenses

Amounts in NOK 1000

2022 2021

Premises and office expenses 2 488 2 104

IT costs 4 384 3 811

Marketing and travel expenses 8 319 4 866

Consultancy and external services 11 640 9 635

Other expenses 5 951 5 198

Total other operating expenses 32 781 25 614

Note 15 Related parties

Nekkar ASA is the ultimate parent based and listed in

Norway.

The subsidiaries (Note 8), members of the Board

(Note 4) and members of the Senior Executive

Group (Note 4) are considered as related parties.

Transactions between subsidiaries have been

eliminated in the consolidation financial statements.

The Group has carried out various transactions with

subsidiaries in 2022. All the transactions have been

carried out as part of the ordinary business and on an

arm’s length basis. For the year ended 31 December

2022, the Group has not recorded any impairment

of receivables relating to the amounts owed by

related parties (2021: MNOK 0). The former CEO, now

COO, Preben Liltved was hired from Eyde Mooring

Solutions AS untill 30 June, 2022. Total expensed

amount in 2022 from Eyde Mooring Solutions AS is

MNOK 1.8.

Nekkar has entered into a lease agreement for

headquarter offices effective from April 2023 with

Lumber Teknopark AS, which is ultimately owned

51 % by Skeiegruppen AS. The contract term is 5

year and 6 months starting from April 2023, with an

additonal five-year option.

Impairment assessment is part of the annual

evaluation with regard to the financial position of the

related party, and the market in which the related

party operates.

Information on Board and Senior Executive Group’s

shares are included in Note 11.

6 9

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 16 Derivatives

Amounts in NOK 1000

2022 2021

Forward currency contracts - Market values Assets Liabilities

Net

market

value Assets Liabilities

Net

market

value

Forward currency contracts - effective hedging contracts - -27 -27 1 014 -261 752

Forward currency contracts - ineffective hedging

contracts - included in other liabilities/assets

61 -7 232 -7 171 10 491 -3 710 6 781

Forward currency contracts - market value 60 -7 260 -7 198 11 504 -3 971 7 534

Maturity distribution of currency contracts and MTM:

Total

MTM

values

Total

MTM

values

Within 3 months -1 907 9 585

> 3 months, < 6 months -2 080 -660

> 6 months, < 9 months -3 065 12

> 9 months, < 12 months -135 0

> 12 months, < 24 months -11 -1 404

> 24 Months 0 0

Total -7 198 7 534

1) FX contracts designed for hedging, but do not qualify for hedge accounting.

Nominal value currency contracts, original currency 2022 2021

Amounts in CUR 1000 Sold Bought Sold Bought

NOK 34 725 312 892 - 253 348

USD 31 606 - 20 937 -

EUR 1 107 3 300 4 194 -

SGD - - 2 842 -

Other balance sheets effects 2022 2021

FV of firm commitment, classified as other receivable 27 261

FV of firm commitment, classified as other short term debt - 1 014

Capitalized cost relating to prolonging of effective hedge relationship, classified as other receivables 137 5 255

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Forward currency contracts

Derivatives are recognized at fair value on the

contract date. The value is adjusted to fair value at

the end of each balance sheet date. The value is set

to observable market price, Note 19.

The Group enters into hedging contracts that

qualifies as fair value hedges. In addition to these,

the Group have hedging contracts that do not meet

the criteria for hedge accounting either because

the underlying delivery contract has been cancelled

or because the relationship between the hedge

instruments and the hedge objects for other reasons

are considered ineffective. These are recognized at

fair value in the financial statement.

Changes to fair value that meet the criteria of an

effective fair value hedge is recognized in the

financial statement with a corresponding change in

fair value of the assets or liabilities that are being

hedged or the FV of the firm commitment.

The ineffective portion of the recognized hedge

relationships is recognized in P&L together with the

changes in value of derivatives. In 2022, a loss of

MNOK 8 is recognized under Other losses / (gains)

in the consolidated statement of comprehensive

income related to FX contracts not qualifying for

hedge accounting. In 2021, this amounted to a loss

ofMNOK4.

The asset or liability being hedged is contractual

income or cost related to production cost. Hedged

assets or liabilities are recognized in the balance

sheet at actual value. The hedged asset or liability

represents, among other things, the part of the

contractual income or cost that has not been invoiced

on the balance sheet date, or where invoices have not

been received from the supplier. The asset or liability

is included in Other current assets or Other current

liabilities respectively. Additionally the hedged asset

or liability for each contract is represented through

bank, client or supplier.

For additional information on foreign currency

and appurtenant risks, please refer to Accounting

principles, and see section 2.8 and 3.1.

7 1

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 17 Provisions and other accruals

Amounts in NOK 1000

2022 2021

Accrued wages and salaries 8 632 4 325

Accrued holiday pay 5 957 5 227

Provision for warranty 7 929 26 577

Deferred income - 17 062

Contract liabilities 21 217 5 159

Other accrued expenses 3 181 7 088

Total provisions and other accruals 46 917 65 439

DEVELOPMENT OF SIGNIFICANT PROVISIONS Provision for warranty

Balance as of December 31, 2021 26 577

New provision 2 644

Provision utilized -4 080

Provision reversed -17 213

Balance as of December 31, 2022 7 929

A warranty provision is recognized for expected claims on installations delivered during the year. A total warranty

provision of MNOK 7.9 have been recognized as per 31 December 2022.

There is an inherent uncertainty related to the amount of future warranty claims - however based on

management’s judgments of possible outcomes, a general warranty provision in the region of 2% of the contract

value on delivered new building projects have been applied. It is expected that these costs will be incurred during

the guarantee period for the respective deliveries, which normally vary from 12-36 months.

Risk related to the estimates that form the basis for the book values are further described in Accounting

principles, under sections 2.16 and 4.

Note 18 Financial items and foreign currency gains/losses

Amounts in NOK 1000

2021 2020

Interest income 4 884 2 522

Agio - -

Other financial income - 3 175

Financial income 4 884 5 696

Interest expenses 3 437 2 550

Disagio 9 957 2 904

Other financial expenses 622 1 811

Financial expenses 14 016 7 265

Net finance -9 132 -1 569

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 19 Financial risk management

Amounts in NOK 1000

The following table shows the carrying amount and fair values of financial assets and financial liabilities,

including their levels in the fair value hierarchy. It does not include fair value information for financial assets and

financial liabilities not measured at fair value if the carrying amount is a reasonable approximation of fair value.

Financial assets and liabilities are described in Accounting Principles, under sections 2.8, 2.9, 2.10, 2.12, 2.13 and

2.14. Risks associated with the underlying estimates of the recognized values and financial risk management is

described in Accounting Principles, ref section 3.

Classification of financial assets

Financial derivative contracts

not designated for hedging /

ineffective hedges

Financial derivative

contracts designated

for hedging

Loans,

cash and

receivables Total

2022

Non current financial assets:

Shares available for sale - - - -

Other receivables - - - -

Financial current assets:

Trade receivables - - 106 875 106 875

Other current receivables - - 7 126 7 126

Accrued, non-invoiced production - - 113 616 113 616

Derivatives

- - -

Prepayment to suppliers - - - -

Cash and cash equivalents - - 181 281 181 281

Total financial assets - - 408 898 408 898

2021

Non current financial assets:

Shares available for sale - - - -

Other receivables - - - -

Financial current assets:

Trade receivables - - 134 749 134 749

Other current receivables - - 13 906 13 906

Acquired, non-invoiced production - - 20 153 20 153

Derivatives

10 491 1 014 11 505

Prepayment to suppliers - - - -

Cash and cash equivalents - - 174 501 174 501

Total financial assets 10 491 1 014 343 309 354 814

1) Fair value of financial liabilities: The Group’s derivatives consist of forward currency contracts. Fair value of forward currency contracts

is determined by utilizing market-to-market rate on the balance-sheet date as stated by the Group’s bank. Fair value relating to non-

current debt is considered approximately equal to carrying value, as loans are given at market terms and with a floating rate.

7 3

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Classification of financial liabilities:

Financial derivative

contracts not designated for

hedging / ineffective hedges

Financial derivative

contracts designated

for hedging

Loans and

receivables Total

2022

Non-current financial liabilities

Interest-bearing non-current debt - - - -

Current financial liabilities

First year instalment of non-current debt - - - -

Interest-bearing current liabilities - - - -

Prepayments from customers - - 42 418 42 418

Derivatives

7 171 27 - 7 198

Accounts payable and other short-term liabilities - - 101 840 101 840

Total financial liabilities 7 171 27 144 259 151 457

2021

Non-current financial liabilities

Interest-bearing non-current debt - - - -

Current financial liabilities

First year instalment of non-current debt - - - -

Interest-bearing current liabilities - - - -

Prepayments from customers - - 29 456 29 456

Derivatives

3 710 261 - 3 971

Accounts payable and other short-term liabilities - - 95 259 95 259

Total financial liabilities 3 710 261 124 715 128 687

1) Fair value of financial liabilities: The Group’s derivatives consist of forward currency contracts. Fair value of forward currency contracts

is determined by utilizing market-to-market rate on the balance-sheet date as stated by the Group’s bank. Fair value relating to non-

current debt is considered approximately equal to carrying value, as loans are given at market terms and with a floating rate.

The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by

valuation technique:

• Level 1: Quoted (unadjusted) prices in active markets for identical assets or liabilities

• Level 2: Other techniques for which all inputs which have a significant effect on the recorded fair value are

observable, either directly or indirectly

• Level 3: Techniques which use inputs which have a significant effect on the recorded fair value that are not

based on observable market data.

2022 2021

Overall Level 1 Level 2 Level 3 Overall Level 1 Level 2 Level 3

Assets measured at fair value

Foreign exchange contracts - hedging - - - - 1 014 - 1 014 -

Foreign exchange contracts - non-hedging - - - - 10 491 - 10 491 -

Liabilities measured at fair value

Foreign exchange contracts - hedging 27 - 27 - 27 - 27 -

Foreign exchange contracts - non-hedging 7 171 - 7 171 - 7 171 - 7 171 -

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS

Note 20 Business combination

Amounts in NOK 1000

Acquisition and divestments in 2022

There have been no acquisitions or divestments in 2022.

NEKKAR SKYWALKER ONSHORE AS

Nekkar SkyWalker Onshore AS was incorporated by Nekkar ASA in May 2022. The company will own and

further develop the technology related to Skywalker.

Acquisition and divestments in 2021

There have been no acquisitions or divestments in 2021.

Note 21 Non controlling interest (NCI)

Amounts in NOK 1000

The following table summarizes the information relating to Nekkar ASA’s subsidiaries that has material non

controlling interest, before intra group eliminations. Non-current assets includes goodwill and technology

assets arising from the PPA, totalt amount of MNOK 18.7.

2021 2022

Number presented on 100% basis Intellilift AS Total Intellilift AS Total

Non current assets 33 172 33 172 37 871 37 871

Current assets, excluding cash 12 875 12 875 8 422 8 422

Cash and cash equivalents 4 964 4 964 6 593 6 593

Non current liabilities -1 024 -1 024 -951 -951

Current liabilities -10 649 -10 649 -10 933 -10 933

Net assets 39 338 39 338 41 001 41 001

Revenue 41 788 41 788 22 634 22 634

Profit after tax 2 851 2 851 1 663 1 663

Other comprehensive income (OCI) - - - -

Total comprehensive income 2 851 2 851 1 663 1 663

NCI percentage 49% 49% 49% 49%

Net assets attributable to NCI 19 276 19 276 20 090 20 090

Profit after tax allocated to NCI 1 397 1 397 815 815

OCI allocated to NCI - - - -

7 5

NEKKAR ANNUAL REPORT 2022 CONSOLIDATED FINANCIAL STATEMENTS | NEKKAR

Note 22 Contingent liabilities / Material disputes

Regular claims

Regular claims are made against the Group as a

result of its ordinary operations. These claims are

part of ordinary business and are generally covered

by provisions for guarantee costs and contingencies

in ongoing projects. Nekkar is of the opinion that

recognized provisions will cover regular claims arising

as part of ordinary business.

Syncrolift project claim

Syncrolift has finalized and delivered a shiplift and

transfer system to a shipyard in South America in

June 2022. The final 10 % milestone invoice (MNOK

13.5) has not been paid by the customer, as the

customer claim a project delay. Syncrolift has made

no provision in relation to this claim as no contractual

right to hold back the payment has been found, and

the payment is still expected to be received.

Note 23 Subsequent events

Events regarding Nekkar are as follows:

On 23 March 2023, Nekkar announced a

strengthening of its presence within renewables and

aquaculture through onboarding a 9 person strong

engineering team from Techano. This was done

through participation in a share issue securing Nekkar

a 90,1 % ownership in Nekkar Offshore Technologies

AS. The add-on business will combine Nekkar’s

unique in-house automation, electrification, and

software competence, with personnel from Techano

who are specialists in load handling and lifting

equipment for the renewable, aquaculture, offshore

and marine industries.

Inteliwell, the joint venture between Nekkar’s

subsidiary, Intellilift AS and Transocean and Viasat

secured its first rig services contract on 16 February

2023. An undisclosed major rig operator, has

contracted the JV to equip and utilize its propriertary

InteliWell software on a drilling rig. The rig will be

equipped with the InteliAutomate-solution, which

automates and optimizes stand building and tripping

sequences, in order to reduce drilling time and

costs.. Entering the first rig is a major milestone and

validation of Inteliwell and is expected to open new

doors in the global rig market.

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

NEKKAR ASA PER 31 DECEMBER 2022

Parent company

financial statements

Profit and loss 

Balance sheet 

Balance sheet 

Equity 

Cash flow 

Accounting principles 

NOTES

Note  Related parties 

Note  Personnel costs number of employees remunerations loans to employees etc 

Note  Pensions 

Note  Tangible and intangible assets 

Note  Other operating costs 

Note  Financial items and exchange rate gainslosses 

Note  Tax 

Note  Subsidiaries and joint ventures 

Note  Trade and other receivables 

Note  Other current liabilities 

Note  Assets pledged as security and guarantees 

Note  Cash and cash equivalents 

Note  Share capital and shareholder information 

Note  Subsequent events 

7 7

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Profit and loss

For the year ended 31 December

Amounts in NOK 1000 Notes NGAAP 2022 NGAAP 2021

OPERATING INCOME

Intra-Group operating income 7 389 -

Operating income - 1 148

Group service fee from subsidiaries 1 4 150 4 150

Total operating income 11 539 5 298

OPERATING COSTS

Cost of goods sold 7 228 -

Personnel cost 2, 3 19 518 14 135

Depreciation on tangible fixed assets 4 5 739 1 463

Other operating costs 2, 5 16 870 15 213

Total operating costs 49 356 30 811

Operating profit -37 817 -25 512

FINANCIAL INCOME AND EXPENSES

Income from investments in subsidiaries 1, 6 - 191 432

Income from investments in equity accounted investments - -

Interest received from group companies - 796

Other interest income 2 835 2 035

Interest income 6 2 835 2 831

Other financial income 6 405 3 815

Interest expenses 3 201 2 357

Other financial expenses 6 567 2 697

Net financial items -528 193 024

Profit before tax -38 345 167 512

Tax 7 -8 031 25 528

Profit for the year -30 313 141 984

Transferred to other equity -30 313 141 984

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Balance sheet

For the year ended 31 December

Amounts in NOK 1000 Notes NGAAP 2022 NGAAP 2021

ASSETS

NON-CURRENT ASSETS

INTANGIBLE ASSETS

Deferred tax assets 7 16 503 8 472

Intangible assets 4 23 254 19 456

Total intangible assets 39 757 27 928

FIXED ASSETS

Furniture, office and computer equipment 4 4 128 4 832

Other fixed assets 4 - 4 813

Total fixed assets 4 128 9 644

FINANCIAL FIXED ASSETS

Shares in subsidiaries 8 246 275 165 233

Loans to companies in the Group 1, 9 - 17 631

Total financial fixed assets 246 275 182 865

Total non-current assets 290 160 220 436

CURRENT ASSETS

CURRENT RECEIVABLES

Trade receivables 9 13 20

Intra-group accounts receivable 1, 9 7 740 1 094

Other receivables 9 3 431 2 832

Other intra-group receivables 1, 9 - 191 432

Total current receivables 11 184 195 378

Bank deposits 12 172 168 132 839

Total current assets 183 353 328 217

Total assets 473 512 548 653

7 9

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Balance sheet

For the year ended 31 December

Amounts in NOK 1000 Notes NGAAP 2022 NGAAP 2021

EQUITY AND LIABILITIES

EQUITY

PAID UP EQUITY

Share capital 13 11 746 11 714

Treasury shares 13 -1 -1

Share premium 13 5 919 3 863

Total paid up equity 17 664 15 576

RETAINED EARNINGS

Other equity 295 240 325 554

Total retained earnings 295 240 325 554

Total equity 312 904 341 131

LIABILITIES

OTHER NON-CURRENT LIABILITIES

Liabilities to financial institutions - -

Total other non-current liabilities - -

CURRENT LIABILITIES

Trade payables 4 659 2 226

Intra-group trade payables 1 5 775 505

Social security and employees` tax deduction 1 752 1 022

Income tax payable 7 - -

Other intra-group liabilities 1, 12 141 210 197 784

Other current liabilities 2, 6, 10 7 211 5 985

Total current liabilities 160 608 207 524

Total liabilities 160 608 207 524

Total equity and liabilities 473 512 548 653

Kristiansand, 27 April 2023

Board of Directors, Nekkar ASA

Trym Skeie

Chairman of the board

Gisle Rike

Director

Ole Falk Hansen

CEO

Ingunn Svegården

Director

Marit Solberg

Director

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Equity

For the year ended 31 December

Amounts in NOK 1000 Share capital Treasury shares Share premium Other equity Total

Equity as of 1.1.2020 11 618 -1 0 237 740 249 358

New share issued 78 2 751 2 829

Net profit for the year -54 159 -54 159

Equity as of 31.12.2020 11 696 -1 2 752 183 570 198 017

Equity as of 1.1.2021 11 696 -1 2 752 183 570 198 017

New share issued 18 1 112 1 130

Net profit for the year 141 984 141 984

Equity as of 31.12.2021 11 714 -1 3 863 325 554 341 131

Equity as of 1.1.2022 11 714 -1 3 863 325 554 341 131

New share issued 32 2 056 2 088

Net profit for the year -30 313 -30 313

Equity as of 31.12.2022 11 746 -1 5 919 295 240 312 904

8 1

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Cash flow

For the year ended 31 December

Amounts in NOK 1000 Notes 2022 2021

CASH FLOW FROM OPERATING ACTIVITIES

Net profit before tax -38 345 167 512

Dividend from investments in subsidiaries - -191 432

Depreciation 5 739 1 463

Net interest income 366 -474

Change in current receivables and current liabilities 2 419 -2 879

Net cash flow from operating activities -29 822 -25 810

CASHFLOW FROM INVESTMENTS

Additional equity into subsidiaries -67 542 -

Proceeds from sale shares in subsidiaries 14 - -98 337

Net contribution received from subsidiaries - 70 160

Expenditures of tangible and intangible assets 3 -17 520 -16 121

Proceeds to and repayment from intra-group loans 17 631 -796

Net cashflow from investments -67 431 -45 095

CASHFLOW FROM FINANCING

Proceeds from group contribution 151 432

Proceeds from issuance of share capital 7 2 088 1 130

Net change overdraft facility / cash pool -16 574 -105 039

Net interest income -366 474

Net cashflow from financing 136 580 -103 435

EFFECTS OF EXCHANGE-RATE FLUCTUATIONS ON CASH AND CASH EQUIVALENTS

Net change in cash and cash equivalents 39 328 -174 339

Cash and cash equivalents (opening balance) 132 839 307 178

Cash and cash equivalents (closing balance) 172 168 132 839

This consists of:

Bank and cash pool deposits 172 168 132 839

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

The financial statements have been prepared in

accordance with The Norwegian Accounting Act and

generally accepted accounting principles in Norway.

Subsidiaries, associated companies

Subsidiaries and associates are valuated at cost,

less any impairment losses. Impairment losses

are reversed if the reason for the impairment

loss disappears in a later period. Dividends,

group contributions and other distributions from

subsidiaries are recognized as financial income

in the same year as they are recognized in the

financial statement of the provider. If dividends /

group contribution exceed withheld profits after

the acquisition date, the excess amount represents

repayment of invested capital, and the distribution

will be deducted from the recorded value of the

acquisition in the balance sheet for the parent

company.

Operating income

Operating income includes income on delivered

products and services granted over the year. The

income is recognized once the delivery of services

has taken place and most of the risk and return has

been transferred.

Classification and valuation of balance sheet items

Current assets and short-term liabilities include items

which fall due within one year, and items related to

the operating cycle. Other balance sheet items are

classified as fixed assets / long term liabilities.

Current assets are valued at the lower of cost and fair

value. Short term liabilities are posted in the balance

sheet at the nominal value at the time of initial

establishment.

Fixed assets are valued at cost, less depreciation and

impairment losses. Long term liabilities are posted in

the balance sheet at the nominal value at the time of

the initial establishment.

Accounts receivables and other receivables

Accounts receivable and other current receivables

are recorded in the balance sheet at their nominal

value less impairment provision on unsecured claims.

Provisions on unsecured claims are made on basis of

an individual assessment of the different receivables.

A general loss provision on other receivables is

estimated based on expected loss.

Short term investments

Short term investments are valued at the lower

of acquisition cost and fair value at the balance

sheet date. Dividends and other distributions are

recognized as other financial income.

Property, plant and equipment

Property, plant and equipment is capitalized and

depreciated linearly over the asset’s estimated useful

life. Costs for maintenance are expensed as incurred,

whereas costs for improving and upgrading property,

plant and equipment are added to the acquisition

cost and depreciated with the related asset. If

carrying value of non-current asset exceeds the

estimated recoverable amount, the asset is impaired

to the recoverable amount. The recoverable amount

is greater of the net value and value in use. When

assessing value in use a DCF-model on the cash flow

from the asset are applied.

Pensions

Nekkar ASA has established a defined contribution

plan for its employees.

Within the defined contribution plan the company

pays a fixed contributions to a separate legal entity.

The company has no legal or other obligation to

pay further contributions if the insurance company

does not have sufficient assets to pay all employee

benefits relating to employee service in current and

prior periods. Contributions are recorded as payroll

expense in the financial statements.

The Group recognizes the service cost of the pension

plan as a payroll expense in the statement of profit

and loss.

Accounting principles

Nekkar ASA

8 3

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Taxes

The tax expense in the profit and loss accounts

consists of the current tax payable and changes to

deferred tax. Deferred tax/tax assets are calculated

on all differences between the book value and

tax value of assets and liabilities. Deferred tax is

calculated as 22 % of temporary differences and

the tax effect of tax losses carried forward. Tax-

increasing and tax-reducing temporary differences

which are reversed, or could be reversed, during

the same period are offset against each other and

recorded as a net sum. Temporary changes are only

assessed for the Norwegian companies. Deferred tax

assets are recorded in the balance sheet when it is

more likely than not that tax assets will be utilized.

Taxes payable and deferred taxes are recognized

directly in equity to the extent that they relate to

equity transactions.

Foreign currency

Transactions in foreign currency are translated at the

rate applicable on the transaction date. Monetary

items in a foreign currency are translated into NOK

using the exchange rate applicable on the balance

sheet date.

Non-monetary items that are measured at their

historical price expressed in foreign currency

are translated into NOK using the exchange rate

applicable on the transaction date. Non-monetary

items that are measured at their fair value expressed

in a foreign currency are translated at the exchange

rate applicable on the balance sheet date.

Changes to exchange rates are recognized in

the income statements as they occur during the

accounting period.

Currency rates on year end which is basis for

revaluation of balance sheet items are:

Currency rate 2022 2021

EUR 10.51 9.99

USD 9.86 8.82

Cash flow statement

The cash flow statement is presented using the

indirect method. Cash and cash equivalents include

cash, bank deposits and other short term, highly

liquid investments with maturities of three months or

less.

Cash and cash equivalents

Cash and cash equivalents consist of cash and bank

deposits. Bank deposits in foreign currencies are

translated into NOK using the exchange rate on

the balance sheet date. Withdrawals from the bank

overdraft facility constitute part of current liabilities.

Use of estimates

The management has used estimates and

assumptions that have affected assets, liabilities,

incomes, expenses and information on potential

liabilities in accordance with generally accepted

accounting principles in Norway.

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Note 1 Related parties

Amounts in NOK 1000

Subsidiaries (Note 8), members of the Board (Note 2) and members of the senior executive group are

considered as related parties. Nekkar ASA is involved in various transactions with associated companies where

all transactions are based on normal course of business and at arms length prices.

2022 2021

SALES, ROYALTIES, SALES FEES, GROUP FEE:

Subsidiaries 4 150 4 150

COST OF SALES:

Subsidiaries - -

BALANCE SHEET ITEMS RELATED TO PURCHASE AND SALE OF GOODS AND SERVICES:

Receivables

Loans to group companies - 17 631

Accounts receivables 7 740 1 094

Other short term receivables

- 191 432

Current liabilities

Accounts payable to subsidiaries 5 775 505

Other short term payables to subsidiaries

141 210 197 784

1) Other short term receivables consist of group contribution from Syncrolift AS.

2) Other short term payables to subsidiaries includes Syncrolift AS’ share of cash within the global cash pool (MNOK 141.2)

As interim CEO (untill 7.2022), Preben Liltved, was hired in from Eyde Mooring Solutions AS where he is

chairman and shareholder. From January untill June 2022, total transactions with Eyde Mooring Solutions AS

amounted to MNOK 1.6.

Chairman of the Board, Trym Skeie, is also chairman and shareholder in Stimline AS. Nekkar ASA has acquired

services from Stimeline AS of MNOK 0.4 during 2022.

The above mention transactions are based on normal course of business and are at arm’s length prices.

Information on the board and senior executive group’s shares are stated in Note 13.

8 5

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Note 2 Personnel costs, number of employees, remunerations, loans

to employees etc.

Amounts in NOK 1000

Payroll expense: 2022 2021

Salaries 13 381 9 477

Employer's social security contribution 2 682 2 049

Pension costs 1 774 909

Other benefits 1 681 1 700

Total payroll expenses

19 518 14 135

1) Payroll expenses of MNOK 11,6 has been capitalized as R&D in 2022 (Note 3) and MNOK 10,8 in public grants related to expensed R&D is

recognized as cost reduction.

Number of employees at the end of the year 19 14

Board remunerations

2022 2021

Trym Skeie Board member since 11.2009. 500 500

Gisle Rike

Board member since 06.2015. 315 315

Ingunn Svegården Board member since 10.2019 315 315

Marit Solberg Board member since 10.2019 315 315

Total 1 445 1 445

1) The Annual General Meeting determines the remuneration to the Board and nomination commitee from one General Meeting to the next.

2) Gisle Rike represents Rasmussengruppen AS and the board fee is paid to Rasmussengruppen AS.

The board has not received any remuneration beyond director`s fee. No loans or severance pay is given to the

directors.

Nomination committee remuneration

Nekkar’s nomination committee comprised of the following members: Anne Grethe Ellingsen (Chairman) and

Leif Haukom.

The nomination committee remuneration paid in 2022 was TNOK 67 for the chairman and TNOK 40 for the

member, a total of TNOK 107.

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Statement regarding the stipulation of remuneration and other benefits for the

CEO and other Executives

Regarding Group management, Nekkar ASA’s remuneration policy is based on offering competitive terms.

Remunerations should reflect that Nekkar is a listed company with an international focus.

The annual remuneration is based on Group managements part-taking in the results generated by the company

and the added value for shareholders through increased company value.

Remuneration consists of two main components; Base salary and bonus.

• Base salaries is intented to be competetive and motivating, but in line with general market terms.

• Bonus for the CEO and other executives is determined on the basis of target results and on individual

targets. Bonus targets are revised annually and is limited to 50 % of base salary for the CEO and other

executives. Bonus payments reported in 2022 is based on the evaluation of the relevant performance criteria

for the fiscal year ending 31.12.2022. Bonus payments are based on individual employment contracts. A

bonus provision of MNOK 2.5 is included in other current liabilities per 31.12.2022 for the CEO and other

executives based on the 2022 targets. The final bonus payment is to be approved by the board.

Senior executives have six months notice, and severance pay periods of up to 6 months.

Reference is made to remuneration report for further details.

Renumeration and other benefits for the CEO and other Senior Executives

Amounts in NOK 1000

Name Position

Base

salary

Other

benefits

Bonus

paid

Pension

cost

Ole Falk Hansen CEO from 7.2022 1 288 7 - 98

Preben Liltved

Interim CEO - from 9.2020. COO from

7.2022

1 931 7 - 103

Mette Harv EVP Aquaculture & Renewables 1 765 14 - 222

Marianne Voreland Ottosen Head of finance from 4.2022 819 111 - 138

Kristoffer Lundeland

CFO - Hire in untill 8.2022 1 667 - - -

1) Hired in untill June 2022. Of total salary, MNOK 1.1 equals amount invoiced from Eyde Mooring Solutions AS. Preben Liltved holds 19,7 %

of the shares in Eyde Mooring Solutions AS.

2) Hired in, salary equals amount invoiced from Ernst & Young AS

Remunerations Taxable remuneration

Other benefits Board remuneration, sign-on fee, car, group life insurance, phone, newspaper, etc.

Bonus paid Bonus paid in current year

Auditors’ fees (excl. VAT) 2022 2021

Statutory audit 890 1 158

Other attestation services 75 -

Tax advisory - -

Other assistance 108 180

Total 1 073 1 338

8 7

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Note 3 Pensions

Amounts in NOK 1000

Norwegian companies within Nekkar have established defined contribution plans for all employees. Reference is

made to the remuneration report for further details.

Net pension costs from defined contribution plan 2022 2021

Service cost 1 774 909

+ Payroll tax of net pension cost 250 128

= Net periodic pension cost 2 024 1 038

Note 4 Tangible and intangible assets

Amounts in NOK 1000

Intangible assets,

R&D

Furniture and

office equip.

Starfish

downscaled

pilot version Total

Book value as of 31.12.2020 9 545 4 897 - 14 441

2021 Fiscal year

Book value as of 1.1. 9 545 4 897 - -

Additions 9 911 710 5 500 16 121

Disposals - - - -

Depreciation, amortization and impairments

- -776 -688 -1 463

Book value as of 31.12.2021 19 456 4 832 4 813 14 659

As of 31.12.2021

Acquisition cost 31.12. 19 456 24 017 5 500 48 973

Accumulated depreciation as of 31.12. - -19 187 -688 -19 874

Book value as of 31.12.2021 19 456 4 832 4 813 29 100

2022 Fiscal year

Book value as of 1.1. 19 456 4 832 4 813 29 100

Additions 17 298 222 17 520

Disposals -13 500 - - -13 500

Depreciation, amortization and impairments

- -926 -4 813 -5 739

Book value as of 31.12.2022 23 254 4 128 - 27 383

As of 31.12.2022

Acquisition cost 31.12. 23 254 24 239 5 500 52 993

Accumulated depreciation as of 31.12. - -20 113 -5 500 -25 613

Book value as of 31.12.2022 23 254 4 128 - 27 382

Depreciation schedule None Linear Linear

Depreciation period 3-10 years 2 years

The company has no leases classified as financial lease.

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Development costs / R&D:

The book value of R&D assets, TNOK 23 254, includes development expenses incurred in connection with the

development of a closed cage for fish farming, Starfish. Government grants of TNOK 1 887 is received in 2022

and the additions is presented net of grants received. Upon establishment of Nekkar SkyWalker Onshore AS in

May 2022, Nekkar ASA made a contribution in kind consisting of the development expenses incurred to date in

connection with the development of the disruptive wind turbine installation tool, SkyWalker. This contribution in

kind equals the disposal of TNOK 13 500 in 2022. At the end of 2022, no development expenses is capitalized in

Nekkar ASA in connection with SkyWalker.

Total R&D expenditures in 2022 was MNOK 2.3. The amount is included in other operating expenses in the

consolidated statement of comprehensive income.

Nekkar finalized the production of a down-scaled pilot version of Starfish at the end of Q3 2021. Total allocated

production cost was TNOK 5 550. The down-scaled pilot served as a testing unit for new features and

technology and the testing was finalized in June 2022. The down-scaled pilot was fully depreciated at the end

of 2022.

Impairment assessment:

The company performed its impairment assessment in January 2023. The recoverable amount has been

determined based on a value in use calculation using 5 year cash flow projections. The impairment test

indicated that the recoverable amount exceeds book value, hence no impairment is recognised as per 31

December 2022.

Operating lease agreements:

Nekkar ASA has entered into a lease agreements for offices. The lease is classified as operational lease.

Total lease payment in 2022 is TNOK 438.

8 9

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Note 5 Other operating costs

Amounts in NOK 1000

2022 2021

Cost of premises 705 433

IT costs 2 575 2 407

Marketing, travel 902 468

Consultancy, hire-ins and external services 8 642 6 421

Other expenses 4 045 5 484

Total other operating costs 16 870 15 213

Note 6 Financial items and exchange rate gains/losses

Amounts in NOK 1000

2022 2021

Group contribution from subsidiaries - 191 432

Interest income from companies in same group - 796

Other financial income 2 835 5 210

Interest paid to financial institutions -3 201 -2 357

Other financial costs -567 -1 748

Net exchange rate gains (losses) 405 -308

Net financial items -528 193 024

Exchange rate gains/losses:

Currency differences booked to income and costs in the profit and loss account are as follows: 2022 2021

Currency exchange income 1 220 640

Currency exchange costs -815 -949

Total 405 -308

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Note 7 Tax

Amounts in NOK 1000

Change in deferred tax assets and deferred tax liabilities:

1.1.2021

Changes

2021 31.12.2021

Changes

2022 31.12.2022

Deferred tax

Fixed assets -424 478 54 -37 17.361

Pension fund / liabilities - - - - -

Credit deduction carried forward - - - - -

Allowance carried forward - - - - -

Convertible debt - - - - -

Tax loss carry forward -40 935 32 463 -8 472 -8 049 -16 520

Gross deferred tax (assets = - / liabilities = +) -41 358 32 941 -8 417 -8 085 -16 503

Unrecognized deferred tax assets related tax losses 6 935 -6 935 - - -

Unrecognized deferred tax assets related to other temp. differences 423 -478 -55 55 -

Net deferred tax reported (assets = - / liabilities = +) -34

000 25 528 -8 472 -8 031 -16 503

Deferred tax assets related to losses which can be carried forward for tax purposes, are reported if the

management believes it is likely that the company can use these against future taxable income. Nekkar ASA,

Syncrolift AS, Nekkar SkyWalker Onshore AS and Nekkar AS represent a Norwegian Taxable group as the

ownership is more than 90%. Based on expected taxable profit inthe taxation group for the forthcoming five-

year period, tax assetsof MNOK 16.5 have been recognized as per 31 December 2022.

Breakdown of differences between profit before tax as per the accounts and tax basis for year: 2022 2021

Result before tax -38 345 167 512

Permanent differences 1 593 29

Change to temporary profit/loss differences 167 -3 025

Reversed group contribution from subsidiaries - -191 432

Tax basis for theyear before group contribution -36 584 -26 915

Breakdown of tax costs: 2022 2021

Tax payable - -

Effect of group contribution on deferred tax - 42 115

Unrecognized change inother temp.differences 55 -478

Changes to deferred tax assets -8 085 -16 109

Tax cost -8 031 25 528

9 1

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Note 8 Subsidiaries and joint ventures

Amounts in NOK 1000

Nekkar ASA

Investments in subsidiaries valued at cost:

Subsidiary

Registered

office

Acqui-

sition

date

Owner-

ship

Voting

Cur-

rency

capital

Number

Equity

31.12.2022

Net

Result

2022 Cost

Net

book

value

2022

Net

book

value

2021

Syncrolift AS

Vestby,

Norway 1994 100% 100% NOK

1 045

000 95 000 177 076 61 489 215 078 215 078 165 203

Nekkar AS

Kristiansand,

Norway 2018 100% 100% NOK 60 000 30 000 15 304 0 17 697 17 697 30

Nekkar SkyWalker

Onshore AS

Kristiansand,

Norway 2022 100% 100% NOK 30 000 30 000 13 411 11 13 500 13 500 -

Total 192 380 61 490

246

275

246

275 165 233

During 2022 intercompany receivables against Syncrolift AS and Nekkar AS was converted to equity. This was

done through a share contribution of MNOK 49.875 in Syncrolift AS and MNOK 17.667 in Nekkar AS respectively,

which was settled by conversion of the mentioned receivables.

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Note 9 Trade and other receivables

Amounts in NOK 1000

2022 2021

Trade receivables 13 20

Intra-group accounts receivables 7 740 1 094

Group contribution - 191 432

Other receivables, including prepayments 3 431 2 832

Short-term receivables 11 184 195 378

Receivables maturing at over one year:

Other receivables - -

Loans to subsidiaries

- 17 631

Total - 17 631

1) Intercompany loan to Nekkar AS.

Receivables based on intercompany trade and group fees are settled on a regular basis.

Note 10 Other current liabilities

Amounts in NOK 1000

2022 2021

Provision for unpaid wages and salaries 1 433 200

Provision for holiday pay 1 695 1 108

Other accrued expenses 4 083 4 677

Total other current liabilities 7 211 5 985

9 3

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Note 11 Assets pledged as security and guarantees

Amounts in NOK 1000

Nekkar ASA has no interest bearing debt, however credit and guarantee facilities with Nordea are established.

Nekkar has the following credit facilities through its facilitators:

2022 2021

Limit Drawn Limit Drawn

Guarantee limit for Group (Nordea) 290 000 200 897 290 000 223 853

Overdraft facility (Nordea) 100 000 - - -

Revolving Credit facility (Nordea) 100 000 - - -

The finance agreements include pledges of plant and machinery, inventory and accounts receivables in Nekkar

ASA and Syncrolift AS. The guarantee limit is utilized by Nekkar ASA and Syncrolift AS and cover performance

guarantees and advance payment guarantees.

Under the new credit facilities established in 2022, the financial covenants are a debt ratio based on net debt/

EBITDA and an equity ratio based on equity/total assets.

• The company’s debt ratio shall not exceed 2,5 times the EBITDA and is calculated from the consolidated total

interest bearing debt to the consolidated EBITDA.

• Equity ratio shall not be lower than 35 %, calculated from the consolidated total equity to consolidated total

assets.

The covenants also include a condition related to Nekkar maintaining its 100 % ownership in Syncrolift AS. The

covenants are monitored on a regular basis to ensure compliance with the credit agreements which are tested

and reported on a quarterly basis. Nekkar was in compliance with its covenants as of December 31, 2022.

For the above mentioned facilities the following assets have been pledged as collateral to Nordea:

Assets pledged as collateral for secured debt - Group values: 2022 2021

Account/Group receivables 125 947 153 326

Inventory/Work in progress, including non-invoiced production 125 035 23 604

Property, plant and equipment 8 995 14 196

Assets pledged as collateral* 259 976 191 126

* Assets pledged as collateral only includes Nekkar ASA and Syncrolift AS. The pledged assets are presented in the balance sheet under

the differenct categories.

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Note 13 Share capital and shareholder information

Amounts in NOK 1000

Date Number of shares Nominal value Share capital

31.12.22 106 780 334 0.11 11 745 837

31.12.21 106 493 000 0.11 11 714 230

In 2022 there was an increase in share capital of NOK 31 607 and an increase in share premium of NOK 2 055 893.

The capital increase was related to a share purchase program where 287 334 shares were issued.

Dividends paid and proposed: 2022 2021

Dividend declared and paid during the year: per share - -

Dividend proposed: per share - -

Repayment of issued equity: NOK per share - -

Treasury shares: Number of shares Share capital

Treasury shares as of 31.12.2021 6 632 1

Sale of treasury shares 2021 -

Treasury shares as of 31.12.2021 6 632 1

Purchase/(sale) of treasury shares 2022 - -

Treasury shares as of 31.12.2022 6 632 1

Note 12 Cash and cash equivalents

Amounts in NOK 1000

2022 2021

Bank deposits / (withdrawal), cash etc. as per 31.12. 30 958 -24 945

Deposits (+)/withdrawals (-) from cash pool account system as at 31.12. 141 210 157 784

Total cash and cash equivalents 172 168 132 839

Restricted bank deposits per 31 December 2022 were TNOK 1 500 and is related to employee’s tax witholding.

Additional undrawn committed current bank revolving credit facilities and overdraft facilities amount to MNOK

200 million, that together with cash and cash equivalents gives a total liquidity reserve of MNOK 372 as of

December 31, 2022. See also note 11.

9 5

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS | NEKKAR ASA

Principal shareholders of Nekkar ASA as of 31.12.2022:

Shareholder Number of shares Ownership Voting share

SKEIE TECHNOLOGY AS

1,3)

31 475 823 29.5% 29.5%

RASMUSSENGRUPPEN AS 11 512 506 10.8% 10.8%

MP PENSJON PK 5 698 803 5.3% 5.3%

TIGERSTADEN AS 5 557 501 5.2% 5.2%

AVANZA BANK AB 4 764 545 4.5% 4.5%

DNB BANK ASA 4 053 000 3.8% 3.8%

NORDNET BANK AB 3 673 523 3.4% 3.4%

VINTERSTUA AS 3 157 682 3.0% 3.0%

SKEIE CONSULTANTS AS

1 507 243 1.4% 1.4%

ITLUTION AS 1 475 261 1.4% 1.4%

HATLE AS 1 447 833 1.4% 1.4%

SKEIE KAPPA INVEST AS

1 204 828 1.1% 1.1%

ALUNDO INVEST AS 1 000 000 0.9% 0.9%

PIROL AS 1 000 000 0.9% 0.9%

SEDAL 800 000 0.7% 0.7%

GUTTIS AS 800 000 0.7% 0.7%

MERRILL LYNCH PROF. CLEARING CORP. 791 886 0.7% 0.7%

BROWN BROTHERS HARRIMAN & CO 770 000 0.7% 0.7%

AVANT AS 744 034 0.7% 0.7%

NORDNET LIVSFORSIKRING AS 618 852 0.6% 0.6%

Total, 20 largest shareholders 82 053 320 76.8% 76.8%

own shares 6 632 0.0% 0.0%

Total other 24 720 382 23.2% 23.2%

Total 106 780 334 100.0% 100.0%

1) Shares owned or controlled by the Skeie family, and companies directly or indirectly controlled by them, holds 34 653 036 shares

representing 32,5% of total shares.

2) Shares owned or controlled by Bjarne Skeie, and companies directly or indirectly controlled by him, holds 1 507 243 shares representing

1,4% of total shares.

3) Trym Skeie holds 465 142 shares in person and 1 204 828 through Skeie Kappa Invest AS. Total shares owned or controlled by Trym

Skeie, and companies directly or indirectly controlled by him, is 1 669 970, representning 1,6% of total shares .

4) Voting portion are calculated after eliminating shares held by Nekkar ASA

NEKKAR ANNUAL REPORT 2022 PARENT COMPANY FINANCIAL STATEMENTS

Note 14 Subsequent events

Subsequent events regarding Nekkar ASA are listed in Note 23 in Nekkar Group.

Shares, share options and convertion rights owned or controlled by Board members, Group executives and

their relatives:

31.12.2022 31.12.2021

Board members

Trym Skeie

1 669 970 1 632 939

Marit Solberg 96 809 73 479

Group Executives

Ole Falk Hansen

200 311 -

Preben Liltved 101 561 83 786

Rolf-Atle Tomassen 3 303 3 303

Mette Harv 198 765 198 765

1) Trym Skeie holds 428 111 shares in person and 1 204 828 through Skeie Kappa Invest AS. Total shares owned or controlled by Trym

Skeie, and companies directly or indirectly controlled by him, is 1 632 939, representning 1,5% of total shares .

2) Ole Falk Hansen holds 200 311 shares through OFH Invest AS

30 May 2022, the Annual General Meeting adopted

a resolution to give the Board general authority to

issue a maximum of 10 678 034 shares against cash

or non-monetary redemption, including merger

related activities to acquisitions of business or assets

within the same or corresponding business sector

as the company. This authorization is valid until the

next Annual General Meeting and latest on 30 June

2023. No shares have been issued on the basis of this

authorization in 2022.

30 May 2022, the Annual General Meeting adopted

a resolution to give the Board authority to issue

a maximum of 2 820 058 shares against cash

redemption for the benefit of the company’s

executive management and board members. This

authorization is valid until the next Annual General

Meeting and latest on 30 June 2023. After 30 May

2022, no shares have been issued in relation to a

share purchase program, hence the remaining share

issue authority as per 31 December 2022 is 2 820 058

shares. As per 31 December 2022, there are no share

options in place in the company.

30 May 2022, the Annual General Meeting adopted

a resolution to give the Board authority to buy a

maximum of 7 356 674 shares in Nekkar ASA within

a price range of NOK 1 to NOK 25. The authority can

be used to buy own shares for deletion, or to use the

shares as part of remuneration of leading employees

or in the company’s share purchase program. The

authority is valid until the next Annual General

Meeting or latest 30 June 2023. No shares have been

bought on the basis of this authorization as of 30

April 2023.

9 7

NEKKAR ANNUAL REPORT 2022

Auditors’ report

AUDITORS’ REPORT

NEKKAR ANNUAL REPORT 2022 AUDITORS’ REPORT

9 9

NEKKAR ANNUAL REPORT 2022 AUDITORS’ REPORT

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NEKKAR ANNUAL REPORT 2022 AUDITORS’ REPORT

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NEKKAR ANNUAL REPORT 2022 AUDITORS’ REPORT

1 0 2

NEKKAR ESG REPORT 2022 CHAPTER TITLE

Sustainability report

2022

Disruptive

technologies,

Sustainable results

103

NEKKAR ESG REPORT 2022 CHAPTER TITLE

104

NEKKAR ESG REPORT 2022 CHAPTER TITLE

At Nekkar, we have chosen a business

strategy where ESG and corporate

performance are intertwined.

CEO Letter 105

About this report 107

Sustainability highlights 2022 109

About Nekkar 111

Locations 112

Corporate governance and sustainability approach 113

Governance structure and composition 114

Role and evaluation of the highest governance body 114

Remuneration policies 114

Conflicts of interest 114

Supply chain and sectors served 115

UN Sustainable Development Goals 116

ESG Day 2022 117

Stakeholders 119

Stakeholder dialogue 120

Defining Nekkar’s material topics 121

Working environment 123

Health and safety 129

Business ethics and anti-corruption 131

Environmental and climate impact 137

GRI index

105

NEKKAR ESG REPORT 2022 CEO LETTER

Disruptive technologies,

sustainable results

Environmental, social and governance (ESG) issues remain at the top of the

agenda. In 2022, the growing climate crisis manifested itself through several

hurricanes in the Americas and Caribbean, only to be eclipsed by severe floods

in Pakistan and China. World leaders gathered in Sharm el-Sheikh for COP27,

and later concluded a historic framework to cut food waste in half at the UN

Biodiversity Conference in Montreal.

In 2022, the European Parliament voted to pass the

Corporate Sustainability Reporting Directive (CSRD),

and in Norway, the Transparency Act entered

into force. The legislation will further standardize

and lift the quality of ESG-reporting, solidifying

sustainability as an integral part of annual reporting

and any viable business strategy. At Nekkar, we

work systematically with sustainability, and welcome

these developments.

Nekkar’s business strategy merges ESG and

corporate performance. In addition, we take a

proactive approach to managing ESG risks and

opportunities. Being a sustainable company means

that we are never satisfied with the status quo, but

continuously seek to improve. This is the fourth year

Nekkar has published a sustainability report. Every

year, we strive to better understand our impact on

people, climate, and society, as well as seek out

areas of improvement.

In 2022, we continued to expand our climate

accounting for direct and indirect emissions and

included more Scope 3 data than previously

obtained. Moreover, we revised our procurement

routines for employees and the management group

and started reviewing all suppliers in terms of ethical

business conduct. We continued the tradition of

organising an ESG Day for employees at our offices

in Kristiansand and Vestby, this year with a focus

on communication and collaboration. Nekkar also

became a sponsor of GameOn, the world’s first

university course in e-sport and gaming, which aims

to include more young people in active jobs which

currently are outside of the labour market.

Finally, throughout the year, we also worked

to implement a new environmental policy for

the company and its employees, and further

strengthened Nekkar’s health and safety routines.

Combined, these developments helped move our

company towards better ESG-related routines that

will strengthen our approach to sustainability.

Ole Falk Hansen

CEO of Nekkar

106

NEKKAR ESG REPORT 2022 CEO LETTER

A new, sustainable direction

Nekkar’s strategy is to leverage the group’s

superior engineering, electrification, automation,

and digitalisation heritage from “Drilling Bay” in

Kristiansand, to develop disruptive technologies

that can make high-growth industry sectors more

sustainable, productive, and profitable. In 2022, all four

business areas in Nekkar have demonstrated their ability

to implement a business strategy where sustainability

and profitability are intrinsically intertwined:

Aquaculture

Nekkar successfully completed the pilot test

of a downscaled Starfish closed fish cage, and

subsequently made certain design improvements to

further enhance the go-to-market product. Starfish

is a fully automated, closed fish cage solution that

is digitally and remotely managed. It has been

designed to reduce environmental impact and

operating expenditure to a minimum, while also

avoiding the biological challenges that traditional

open ocean-based pens face. This includes limiting

risk of escape, reducing sea lice treatments and

collection of sediments from the farming.

Renewables

SkyWalker is a disruptive installation tool that could

significantly reduce the cost, CO

emissions and

footprint on nature that are associated with wind

turbine installations. In 2022, wind tunnel testing

of a downscaled (1:20) model was completed,

delivering results that underline SkyWalker’s

unrivalled operating window. Leading international

wind turbine installation player BMS Group entered

into an innovation agreement for the development

and testing of SkyWalker.

Shipyard Solutions

In 2022 Syncrolift focused on projects for upgrades

and refurbishments of existing shipyard installations

with reuse of on-site steel structures. Exploring

alternatives, such as sustainable or recycled

materials help minimize the environmental impact

ofa Syncrolift®.

Having realized at Skarvik Shipyard our Enclosed

Decking solution for Sea-Pollution-Prevention

(eliminate release of pollutants and foreign debris

into sea), we continue to promote this solution

world wide. Our vision is to make this a industry

standard within 2027. Syncrolift and Intellilift

are also searching for smarter solutions not only

optimize operations, but minimize excessive use of

consumeables which have a harm potential.

Syncrolift performs service and inspections,

further supplying OEM spares to ensure proper

maintenance. Thereby extending the operational

safety and lifespan of installed equipment,

safeguarding workers and handling ships with

adequate built-in safety measures in place.

We are active on R&D for the next generation of

transfer systems with our Flextrolley, achieving

better results using less resources.

Digital Solutions

During the year Intellilift tested and fine-tuned the

products and services that will be used in InteliWell,

which is a joint venture established with Transocean

and Viasat to develop a disruptive rig automation

solution that allows operators to reduce drilling

costs and emission levels through more reliable and

faster drilling operations. Subsequent to year-end,

InteliWell signed its first commercial contract with

a major rig operator. The business area’s resources

were also allocated to software development for both

Aquaculture, Renewables and Shipyard Solutions.

As readers will notice, Nekkar’s sustainability

practices aim to benefit both our bottom line and

create greater impact on the wider community.

To find out more about how Nekkar utilises ESG to

generate long-term value creation for society and

shareholders, please check out the following pages.

Best regards,

Ole Falk Hansen

CEO of Nekkar

107

NEKKAR ESG REPORT 2022 ABOUT THIS REPORT

This is Nekkar ASA’s (Nekkar) fourth

sustainability report, and applies to the

reporting period 1 January to 31December

2022.

The report is prepared together with the company’s

financial reporting and covers Nekkar’s three business

areas – Shipyard Solutions (Syncrolift), Aquaculture

and Renewables – and Nekkar’s Digital Solutions

businessunit.

The report is prepared in accordance with the 2021

Global Reporting Initiative’s (GRI) framework. The

report is also inspired by the Oslo Stock Exchange (OSE)

Euronext guidelines for sustainability reporting. The

report was published on 27 April 2023. No restatements

of information have been made from previous

reportingperiods.

The 2022 sustainability report has been reviewed and

approved by Nekkar’s Board of Directors (the Board). It

has not been audited by a third party. For information

about this report and its content, please contact Nekkar’s

CEO, Ole Falk Hansen: Ole.falk.hansen@nekkar.com.

About this report

108

NEKKAR ESG REPORT 2022 ABOUT THIS REPORT

109

NEKKAR ESG REPORT 2022 SUSTAINABILITY HIGHLIGHTS 2022

Sustainability

highlights 2022

Nekkar has maintained its focus on environmental, social and governance in

2022. For example, we launched a new sustainability website and entered into

a partnership with Varodd, one of Norway’s largest employment and inclusion

companies. Other sustainability highlights include:

Governance, ethics and

anti-corruption

In 2022, Nekkar revised the company’s

procurement routines for employees and

the management group. The company also

started reviewing all suppliers in terms of

ethical business conduct, with a particular

focus on human rights.

100% of Nekkar’s employees have now

read and signed the company’s ethical

guidelines (Code of Conduct). The

company also finished the Business Partner

Code of Conduct, and both have been

made available on Nekkar’s website.

The company increased its focus on

reporting of irregularities. Information about

Nekkar’s whistleblowing channel has been

published on the website for external users

and employees have also been informed

and trained on when and how to use it.

Environmental and

climate impact

We strengthened our climate accounting

in 2022, which now includes more Scope 3

data than previous years.

In 2022, Syncrolift has focused on and

executed refurbishment and upgrade

projects and thereby contributed to

reducing the environmental impact of

docking solutions.

During the year we have also worked to

implement a new environmental policy for

the company and its employees.

110

NEKKAR ESG REPORT 2022 SUSTAINABILITY HIGHLIGHTS 2022

Health and safety

In 2022, Nekkar strengthened the

organisation’s health and safety routines.

We started the year by re-establishing the

Nekkar Emergency Response Team, and

we also appointed a safety representative

in Kristiansand in June.

Strengthening our health and safety

mindset was a particular focus for our

annual ESG Day that was arranged in

December 2022. In addition to introducing

the new Emergency Response Team, we

also used this day to inform and train

employees in the company’s Emergency

Response Plan.

Fire safety continue to be a prioritised area,

and in addition to reviewing our company’s

fire safety guidelines, Nekkar arranged a

fire drills for both locations in 2022.

Working environment

The annual ESG Day also focused on

the working environment in Nekkar,

particularly the importance of good

communication and collaboration and how

to improve this.

We conducted another employee survey

amongst employees, with an increased

participation rate of 86% (up from 81.4%

in2021).

The company has started using the Eloomi

online portal for conducting relevant

development / training programmes for

employees in 2022.

111

NEKKAR ESG REPORT 2022 ABOUT NEKKAR

About

Nekkar

Nekkar is a company that utilises

electrification, automation and

digitalisation competence as levers

to make high-growth industries more

efficient, profitable and sustainable.

KEY FIGURES 2022

388

REVENUE

MNOK

EBITDA

MNOK

EQUITY RATIO

PERCENT

↘

112

NEKKAR ESG REPORT 2022 ABOUT NEKKAR

Nekkar ASA

(holding company)

Digital solutions

Aquaculture RenewablesShipyard solutions

The company’s operations are divided into three business areas – Shipyard Solutions (Syncrolift), Aquaculture

and Renewables – that are all supported by Nekkar’s Digital Solutions business unit which applies its unique

competence within electrification, automation and digitalisation across the entire Nekkar group.

Nekkar has extensive industrial experience and a strong legacy within product development and project

execution from both the former TTS brand, which grew from a small business to a multi-billion global company,

and the internationally recognised “Drilling Bay” in Kristiansand, Norway. Our highly competent employees have

a long track record of innovation and product development.

Nekkar is a public limited company (ASA) listed on the Oslo Stock Exchange (legal name: Nekkar ASA, ticker:

NKR).

Nekkar company structure

113

NEKKAR ESG REPORT 2022

Locations

Nekkar (the holding company, as well as the Aquaculture, and Renewables and

Digital business areas) is headquartered in Kristiansand, on the South coast of

Norway. Shipyard Solutions is located in Vestby, with subsidiaries in Singapore and

the US. The company also has two sales and service representatives in Dubai.

ABOUT NEKKAR

Kristiansand

Aquaculture, Renewables

and Digital

Singapore

Shipyard Solutions

subsidiary

Shipyard Solutions

subsidiary

Dubai

Shipyard Solutions

Vestby

Shipyard Solutions

Employees

by location

114

NEKKAR ESG REPORT 2022 ABOUT NEKKAR

For Nekkar, adhering to good corporate governance standards is a prerequisite

for long-term value creation. This is a short summary of our corporate governance

statement. For more information, please refer to the full statement in the annual

report or on Nekkar’s website.

The company strives to ensure that its internal

control mechanisms, organisation and management

structures comply with good corporate governance

principles, including the Norwegian Code of Practice

for Corporate Governance (NUES). Nekkar is

committed to OECD’s Guidelines for Multinational

Enterprises and contributing to the improvement

of international business standards and practices,

especially with regards to questions of corruption,

labour relations and the global environment.

Nekkar’s governance structure shall ensure

a systematic approach to corporate social

responsibility.

The Annual General Meeting (AGM) is Nekkar’s

supreme governing body and where stakeholders

can influence how sustainability is practiced.

The Board is responsible for ensuring that the

company is organised, managed, and controlled

in an appropriate and satisfactory manner in full

compliance with applicable laws and regulations.

Corporate Executive Management bears the

ultimate responsibility for the company’s strategy,

development, and day-to-day work.

The responsibility for managing Nekkar’s impacts on

the economy, environment and people have been

delegated from the Board to Nekkar’s Corporate

Executive Management and Sustainability Manager.

The management group regularly report back to the

Board on the management of Nekkar’s impact on the

economy, environment and people.

Nekkar’s main governing document are the

company’s Code of Conduct, the Code of Conduct

for Business Partners and the company’s Articles of

Association. These documents have been developed

by Nekkar’s Corporate Executive Management and

are approved by the Board.

Corporate governance and

sustainability approach

115

NEKKAR ESG REPORT 2022

CORPORATE GOVERNANCE AND SUSTAINABILITY APPROACH

Governance structure

and composition

Information about Nekkar’s governance structure,

including Board committees, can be found in the

annual report (corporate governance statement)

or in the corporate governance policy on the

company’s website. Here, the company also lists the

Board committees that are responsible for decision

making on and overseeing the management of

Nekkar’s impact on the economy, environment and

people.

An explanation of the nomination and selection

processes of members of the Board and the

committees, including criteria considering

shareholder’s views, diversity, independence, and

relevant competencies, are also available in the

annual report (corporate governance statement).

In accordance with NUES guidelines and the

Norwegian Public Limited Liability Companies Act,

the chair of the Board is not a senior executive in the

organisation.

Role and evaluation of

the highest governance

body

To enhance its collective knowledge, skills and

experience on sustainable development, the

Board is updated regularly for example through

the process to establish the annual sustainability

reports.

The process for evaluating the performance of the

Board in overseeing the management of Nekkar’s

impacts on the economy, environment, and people,

including the independence and frequency of these

evaluations is rendered in the corporate governance

statement of the annual report.

Remuneration policies

Remuneration policies for members of the

Board and senior executives are described in the

company’s remuneration report, which also includes

information about fixed and variable pay, sign-

on bonuses or recruitment incentive payments,

termination payments, clawbacks and retirement

benefits.

The company has not yet established remuneration

policies for the Board and senior executives relating

to objectives and performance in relation to the

management of the organisation’s impacts on the

economy, environment and people.

The process for designing Nekkar’s remuneration

policies and for determining remuneration is

also detailed in the remuneration report as well

as in the corporate governance statement in the

annual report. Remuneration consultants are not

involved in determining remuneration. The results

of votes of stakeholders (including shareholders)

on remuneration and proposals can be found in

the Annual General Meeting (AGM) Notice on the

company’s website.

Every year, the company reports the annual total

compensation for Nekkar’s highest paid individual

(the CEO) and this information can be found in the

remuneration report, together with information

about the ratio of the percentage increase in annual

total compensation. Please refer to the working

environment chapter of this report for additional

information about remuneration in Nekkar.

Conflicts of interest

As stated in Nekkar’s Code of Conduct, the Board

as well as Corporate Executive Management

are responsible for ensuring that conflicts of

interests are prevented and mitigated. Conflicts of

interests are disclosed to stakeholders, and critical

concerns are communicated to the Board. The total

number and nature of critical concerns that were

communicated to the Board during the reporting

period were zero.

116

NEKKAR ESG REPORT 2022 CORPORATE GOVERNANCE AND SUSTAINABILITY APPROACH

Supply chain and sectors served

Nekkar’s business operations are mainly related to ocean-based industries and

segments such as ports and harbours, aquaculture and renewable energy. Nekkar

has global presence with projects all over the world.

There have been no significant changes regarding sectors in which Nekkar is active, the company’s value chain,

or business partners compared to the previous reporting period.

Production

(outsourced)

Raw

materials

Intermediate

goods

Manufacturing

Sales

Design

Transport

Installation/

comissioning

Service/

end-of-life

117

NEKKAR ESG REPORT 2022 CORPORATE GOVERNANCE AND SUSTAINABILITY APPROACH

117

UN Sustainable Development Goals

Nekkar supports the UN’s Sustainable Development Goals (UN SDGs). The

company is implementing activities and initiatives relating to four of the SDGs,

where the company has the potential to make the biggest contribution:

Nekkar promotes equal opportunities for employees regardless of their gender, age,

ethnic or cultural background. Nekkar’s employees should be treated with respect and the

company shall ensure a safe and healthy working environment for everyone.

Designing and adapting our products to foster innovation and the development of

sustainable technology is a key consideration in Nekkar’s product development. An

example is the wind turbine installation tool SkyWalker. This innovation has the potential

of increasing the efficiency and decrease the environmental footprint of installing and

maintaining wind turbines.

The ocean represents a highly significant resource in terms of food, energy and value

creation and has a high priority in our efforts to ensure a sustainable future. Nekkar’s

business operations are closely linked to the sea as our products are designed for the

maritime and marine industries. Our goal is to design and produce products that can

contribute positively to the development in marine areas.

Nekkar aims to promote and maintain the highest ethical standards to create a trust-based

relationship with our stakeholders. The company shall comply with relevant laws and

regulations, act in an ethical, sustainable and socially responsible manner and otherwise

practice good corporate governance.

118

CHAPTER TITLENEKKAR ESG REPORT 2022

118

ESG Day 2022

Last year, the goal was to increase employees´

awareness of Environmental, Social and Governance

topics in general. This year, the company wanted to

dig deeper into social sustainability topics, to get to

know the “S” in “ESG” even better.

To learn more about this topic, we were happy

to welcome Tor Åge Eikerapen, a psychologist

specialised in organisational psychology, to

facilitate a workshop for our employees at Vestby

and Kristiansand. Eikerapen works with leaders

and organisations dealing with change, and hosts

Norway’s largest podcast focusing on management

and leadership.

The theme of his workshop was Communication

and Collaboration – What does it take for others to

understand what you are trying to communicate

in the same way as you do? Poor communication

can be the root of several problems, but good

communication can prevent misunderstandings and

conflicts from happening. As part of the workshop,

all participants were asked to take the VIA character

strength test. Based on the questions answered in

the test, a list of 24 different positive characteristics

was generated for every single participant.

At the ESG Day, we also focused on strengthening

our ‘health and safety’ mindset. To do so, we

introduced the new Emergency Response Team,

and informed employees about the company’s

Emergency Response Plan.

In December 2022, Nekkar arranged its annual “ESG Day” at our sites in Vestby

and Kristiansand. This year’s event focused on the Social in ESG.

119

NEKKAR ESG REPORT 2022 STAKEHOLDERS

Investors/Board of Directors (BoD)

Nekkar’s investors and owners are primary

stakeholders and directly affect the company’s

priorities and strategic direction. Ensuring value

for shareholders is one of the main priorities for the

company.

Customers

Nekkar’s customers directly affect the company

economically and the company’s ability to offer

attractive products at acceptable cost is decisive

for customer retention. Furthermore, an increased

ESG awareness among customers is part of driving

Nekkar’s sustainability priorities.

Employees

Nekkar’s employees are directly affected by the

company’s internal policies and activities. The

company is greatly dependent on its employees and

the ability to attract and retain skilled talent.

Business partners/suppliers

Suppliers are important stakeholders for Nekkar and

are directly affected economically by the company.

Also, suppliers’ responsibility is indirectly affected

by Nekkar’s focus on responsible business practices

as well as the expectations placed on them by the

company.

Government/authorities

Nekkar is directly affected by government

regulations in the countries in which it operates, and

the company’s operating conditions is directly and

indirectly affected by regulatory authorities. As a

listed company, Nekkar is also bound by the Oslo

Stock Exchange’s regulations.

Civil society

Local communities are indirectly, socially,

environmentally and economically, affected by

Nekkar’s activities in terms of job creation and tax

contribution. Civil society is also environmentally

impacted by the company’s products.

Stakeholders

NEKKAR

Customers

Government/

authorities

Investors/Board

of Directors

Civil society

Employees

Business partners/

suppliers

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NEKKAR ESG REPORT 2022

Stakeholder dialogue

Stakeholder dialogue strengthens the company’s

relationship with the society in which it operates. It

also ensures a strategic approach to sustainability

reporting, and systematic stakeholder dialogue

is a fundamental objective of the GRI Standards

Management Approach.

In December 2021, key stakeholder groups including

employees, business partners / suppliers, customers

and investors / Board members were invited to

participate in Teams interviews with representatives

from Nekkar. In the interviews, we asked about

general ESG topics as well as their perception of the

company’s approach to sustainability. Nekkar also

conducted desktop research, for example when it

comes to the ESG priorities of relevant governmental

authorities. A summary of key topics and arena of

dialogue can be found in the table below.

The findings of the stakeholder dialogue were

structured for discussion with Nekkar’s internal ESG

workforce consisting of the company’s CEO, HSEQ

manager and Head of Sustainability in January 2022.

Nekkar aims to have an ongoing dialogue with key

stakeholder groups, and the company will continute

to engage with stakeholders for future reporting

processes.

Stakeholder group Topics mentioned Arena for dialogue

Investors/BoD • Product innovation and development

• Environment and climate

• Regulations

• ESG report

• Direct communications (emails/meetings)

• BoD meetings

• Social media

Customers • Product innovation and development

• Climate and the environment

• Health and safety (HSE)

• Inclusion

• Material use

• Biodiversity

• Supply chain management

• Direct communication (emails/meetings)

• Website

Employees • Good corporate governance

• Product innovation and development

• Climate and the environment

• Product lifetime (LCA/LCM)

• Supply chain management

• Compensation/renumeration

• Diversity, equality and non-discrimination

• Health and safety (HSE)

• Working environment

• Employee surveys

• Annual report

• ESG report

• ESG Day (previously Green Day)

• All hands meeting

• Meetings

Business partners/suppliers • Fair and equal treatment of suppliers

• Supply chain management

• Health and safety (HSE)

• Anti-corruption

• Working environment

• Competence/recruitment

• Climate and the environment

• Diversity, equality and non-discrimination

• Product lifetime (LCA/LCM)

• Product innovation and development

• Annual report

• ESG report

• Newsletters

• Website

Governments/authorities • Human rights

• Global sustainability development goals

• Climate and the environment

• Labour rights

• Anti-corruption

• Consumer interests

• Good corporate governance

• Risk evaluation

• Circularity

• Pollution prevention

• Biodiversity

• Desktop research

STAKEHOLDERS

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NEKKAR ESG REPORT 2022 NEKKAR’S MATERIAL TOPICS

• Climate adaption • Supply chain control

• Diversity, equality and inclusion

• Occupational health & safety

• Human rights

• Anti-corruption

• Innovation & product

development

• Contribute to sustainable fish

farming

• Worker’s rights (incl.

Compensation/renumeration

• Recycling/circular economy

• Product lifetime

• CO

emissions

• Material use

• Working environment

• Recruitment/competence

development

Nekkar conducted a materiality assessment in January 2022. In this process we applied a double

materiality approach, looking both at inward impact (sustainability issues that could or already do affect

the company), and outward impact (how Nekkar’s operations affect the economy, environment, and

people). The materiality assessment was based on interviews and dialogues with employees, business

partners and suppliers, customers, authorities and investors and owners, and approved by the Board. A

summary can be found in the below materiality matrix:

Defining Nekkar’s

material topics

Materiality matrix

Low Moderate

Nekkar’s ability to impact

Importance to stakeholders

Low Moderate High

High

122

NEKKAR ESG REPORT 2022 NEKKAR’S MATERIAL TOPICS

These topics can be narrowed down to

the following priority areas for Nekkar:

Working

environment

(including equality

and diversity)

Health and

safety

Ethics and

anti-corruption

(including human

rights)

Environment

(including product

innovation)

There have been no change to the list of material topics compared to the previous reporting period.

Nekkar’s advancements relating to the management of each of the material topics identified are disclosed to

stakeholders through the annual sustainability reports.

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NEKKAR ESG REPORT 2022

Working environment

Attracting, developing, motivating and retaining competent employees is vital to

Nekkar’s success.

86%

Response rate

77%

Motivation indicator

Employees are a key stakeholder group being

directly affected by and having a high impact

on Nekkar’s operations and business activities.

Nekkar has an actual and potential positive impact

on employees and the working environment. By

securing worker’s rights, offering good and stable

working conditions for employees while facilitating a

good company culture where employees thrive and

succeed, Nekkar positively impacts its employees

and the working environment. Failure to do so, can

lead to an actual or potential negative impact.

The company is operating according to the

Norwegian Working Environment Act and according

to local laws and regulations in other countries

where it is present. Nekkar has also developed its

own Employee Handbook where expectations for

the working environment is outlined specifically.

Due to the company’s size, Nekkar has not

maintained a Working Environment Committee

in Norway but has appointed a Health and Safety

representative which meets with the management

group on a regular basis.

A number of the companies’ engineers are members

of NITO or Tekna, and the company is also a member

of the Confederation of Norwegian Enterprise.

The CEO as well as the HSEQ Manager bears the

overall responsibility for ensuring a good working

environment in Nekkar, and each employee is

responsible for contributing to a happy and healthy

corporate culture.

Employee surveys

The working environment should form the foundation

for a meaningful work situation and increase

employee engagement. Every year, Nekkar conducts

employee surveys to map employee satisfaction. Our

goal for 2022 was to increase the response rate from

81% to at least 85%. The 2022 employee survey had

an 86% response rate. In the survey, employees were

asked to rank 28 different statements relating to the

working environment (both physical and social) and

employee motivation on a scale from 1 (lowest) to 10

(highest).

NEKKAR’S MATERIAL TOPICS

1 2 4

NEKKAR ESG REPORT 2022

2) Numbers in headcount per 31 December 2022.

NEKKAR’S MATERIAL TOPICS

The results show that the motivation indicator among

employees is at 77% on average. This percentage

is based on a ranking of the following: tasks,

responsibilities, feedback, relationship to leaders/

management, competence/professional development,

collegial support, cooperation and mastering of tasks.

The statement which received the highest score 8.9

on average) was “I am satisfied with my job/position”.

The statement with the overall lowest score 6.7 on

average) was: I have discussed my goals and targets

with my manager

KPI 2021 2022

Employee survey response rate 81% 86%

Motivation indicator 77% 77%

Gender equality and diversity (Equality statement 2022)

Ensuring a diverse workforce is important to Nekkar and the company has the direct ability and responsibility

to impact gender equality and diversity in the workspace. Equal opportunities are offered to all employees,

regardless of their background.

Employee category

2021 2022

Organisation Men Women Total Men Women Total

Organisation total 59 (82%) 13 (18%) 72 (100%) 62 (85%) 11 (15%) 73 (100%)

Permanent employees 51 (82%) 11 (18%) 62 (85%) 57 (84%) 11 (16%) 68 (93%)

Temporarily hired employees (project based) 8 (80%) 2 (20%) 10 (14%) 5 (100%) 0 (0%) 5 (7%)

Full-time employees 50 (82%) 11 (18%) 81 (98%) 53 (83%) 11 (94%) 64 (94%)

Part-time employees 1 (100%) 0 (0%) 1 (2%) 4 (100%) 0 (0%) 4 (6%)

Involuntary part-time employees 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%) 0 (0%)

Non-guaranteed hours employees 0% 0% 0% 0% 0% 0%

Newly hired employees 9 (82%) 2 (18%) 11 (15%) 10 (91%) 1 (9%) 11 (15%)

Turnover 3 (100%) 0 (0%) 3 (4%) 9 (90%) 1 (10%) 10 (14%)

There have been no significant fluctuations in the

number of employees during the reporting period

or between reporting periods. The company hired 11

new employees in 2022, with 10 employees leaving

the company. The turnover is mainly linked to long/

inconvenient travel route.

At the end of 2022, Nekkar employed 73 persons, up

from 72 in 2021. 85% of the company’s employees

are male, while 15% are female. The company’s

low level of female employees is due to that the

majority of Nekkar’s employees are engineers. The

percentage of females pursuing an education within

engineering is currently very low in Norway (11.11% as

of March 2023), which makes it hard to recruit female

engineers. The company has the ambition to increase

the number of female employees going forward,

and will look at specific measures to improve gender

balance in 2023. A majority (93%) of Nekkar’s

employees are permanent hires, of which 16% are

women and 84% are men. The company has very few

part-time employees (6%), and no involuntary part-

time workers.

In 2022, the number of temporarily hired employees

went significantly down from previous reporting

periods (50% reduction from 2021). The reason

for this is that the company managed to fill more

permanent positions. The most common type

of workers who are not employees are personell

working on-site from different locations around the

world. There have been no significant fluctuations in

the number of workers who are not employees during

the reporting period or between reporting periods.

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NEKKAR ESG REPORT 2022

Gender diversity

2021 2022

Organisation Men Women Total Men Women Total

Permanent employees 51 (82%) 11 (18%) 62 (100%) 57 (84%) 11 (16%) 68 (100%)

Board of Directors 2 (50%) 2 (50%) 4 (100%) 2 (50%) 2 (50%) 4 (100%)

Executive level management 3 (77%) 1 (23%) 4 (100%) 3 (60%) 2 (40%) 5 (100%)

As a Norwegian Public Limited Company, Nekkar is required to have at least 40% female participation in the

Board of Directors. At the end of 2022, two (50%) Board members were men, and two (50%) Board members

were women. Nekkar’s Executive Management Team comprised of three (60%) men and two (40%) women in

the reporting period.

Age diversity

2021 2022

Organisation Below 30 30-49 Above 50 Below 30 30-49 Above 50

Permanent employees 1 (2%) 31 (50%) 30 (48%) 1 (1%) 36 (53%) 31 (46%)

Board of Directors 0 (0%) 1 (25%) 3 (75%) 0 (0%) 1 (25%) 3 (75%)

Executive level management 0 (0%) 1 (25%) 3 (75%) 0 (0%) 2 (40%) 3 (60%)

In addition to gender, age is also an important diversity indicator. To date, Nekkar has few employees under the

age of 30. Traditionally, the company has sought to recruit people with longer experience and education, but

is now aiming to increase the number of young people within the firm. For example, we are planning a visit to

the Norwegian University of Science and Technology (NTNU) in 2023 to look for candidates and to make our

company known among young people.

3 & 4) Numbers in headcount per 31 December 2022.

NEKKAR’S MATERIAL TOPICS

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NEKKAR ESG REPORT 2022

Nekkar offers equal pay for equal work. The jobs need not be identical, but they must be substantially equal.

Job content (not job titles) determines whether jobs are substantially equal.

Permanent employees by region, gender, and payroll

2021 2022

Location No. of employees Annual total

compensation

(MNOK)

No. of employees Annual total

compensation

(MNOK)

Norway 53.3* 48 103 59.7 57 (84%)

Women 11 (21%) 9 239 (19%) 11 (18%) 10 126 (17%)

Men 42.3 (79%) 40 091 (81%) 48.7 (82%) 48 922 (83%)

The number of permanent employees in this overview are excluding three long term hires that received their

salary from other companies (Advantek). For data privacy reasons, we are not disclosing salaries where there

are less than five employees in each category, hence, only salaries for employees in Norway are shown.

The annual total compensation for employees in Norway was on average NOK 989,101 in the reporting period,

up from NOK 925,535 in 2021 (7% increase). On average, male employees in Norway earned NOK 1,004,569 in

2022, up from NOK 947,793 in 2021 (6% increase), compared to female employees that earned NOK 920,620 in

2022, up from NOK 839,939 in 2021 (10% increase).

In Norway, Nekkar’s female employees earned 92% of male employees salaries in 2022. The main differences in

salaries are due to a difference in responsibility and competence.

Ratio of basic salary and remuneration of women to men

Gender balance in % % salary of women to men

Employee function Men Women Total benefits Base salary Bonus Overtime

Administration 57% 43% 33% 34% 23% 100%

Engineers / technical personell 92% 8% 7% 7% 11% 0%

5) At year-end, excluding salary/remuneration for the CEO. A full disclosure of executive management compensation can be found in the

separate remuneration report on Nekkar’s website.

6) Numbers in headcount per 31 December 2022. Significant locations of operations is Norway due to the majority of workers being

employed here.

NEKKAR’S MATERIAL TOPICS

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NEKKAR ESG REPORT 2022

Our work on diversity

To improve gender balance on all levels in the organisation, Nekkar is taking several measures. Our main focus

has been in recruitment processes, where we actively seek out female candidates for open positions.

All employees (100%) are entitled to parental leave, following the Norwegian Working Environment Act. In total,

there were three employees that took parental leave in 2022, all of them men.

2021 2022

Organisation Men Women Total Men Women Total

Number of employees on parental leave 3 0 3 3 0 3

Number of weeks on parental leave 21.7 0 21.7 18.5 0 18.5

Our work on non-discrimination

Discrimination is defined as the unfair or prejudicial treatment of people and groups based on characteristics

such as race, gender, age, or sexual orientation. Nekkar has zero tolerance for discrimination whether based on

gender, age, disabilities, political views, sexual orientation or the like. The company is operating in accordance

with the Norwegian Equality and Anti-discrimination Act, and has established its own guidelines regarding

non-discrimination which is part of the Code of Conduct. To identify cases of discrimination, Nekkar conducts

employee surveys and employee development talks, where discrimination is one of the topics we are asking

about.

Incidents of discrimination should be reported to the employee’s nearest line manager or thorugh the

company’s external and anonymous whistleblowing channel. All reports will be handled with discretion and

without repraisals for the person reporting. No incidents of discrimination were reported in 2022.

NEKKAR’S MATERIAL TOPICS

128

Preparing young people for the job market,

through gaming

Nekkar is a proud sponsor of GameOn, the world’s first university course in e-sport

and gaming, aimed at unemployed youth.

The first 30 students will start in January 2023 and

get the chance to take varied classes like gaming

history, programming, psychology, and video

production. The goal of the programme is to help

socially marginalised young people who wish to get

an education or a job, and who also are passionate

about gaming.

GameOn has been developed by Varodd, an

employment and inclusion company that works to

include more people in the labour market.

“Most universities operate with tough entry

requirements that favour those who succeed

academically. That may leave out young people who

have great potential to succeed in the job market,

and this program aims to help those students get a

relevant degree. In a time of high demand for labour

and significant rates of social marginalisation among

youth, it is of extra importance to include more young

people in these initiatives,” says project manager at

Varodd, Anders Stavnsbo.

The Norwegian Labour and Welfare Administration

(NAV) and The University of Agder help run the

project with Varodd.

GameOn is a unique study program that merges

teaching and practical tasks, with close collaboration

with businesses. Students will utilise their gaming and

IT-skills, but also get the chance to develop skills that

are important to succeed in society and the labour

market. There are numerous courses that target

this group, but GameOn is the first course to offer

ECTS credits and grant access to further academic

education.

Stavnsbo emphasises the importance of having

businesses in on the project.

“The practical experience that students get through

job placements, for instance at Nekkar, gives them

valuable hands-on knowledge that makes them

better prepared for the job market after they have

completed the course. The business partners are an

essential component in this program.

129

NEKKAR ESG REPORT 2022

Maintaining a safe and healthy working environment

is critical to Nekkar and the company’s stakeholders.

The company, its management and employees

shall at all times comply with applicable rules and

regulations in order to prevent accidents, injuries

and damage to people, assets or the environment.

The company has an actual and potential positive

impact on occupational health and safety

by establishing health and safety guidelines,

conducting risk assessments, conducting

measurments, implementing reporting procedures,

and by providing communication and training

to employees about health and safety risks. The

company can also positively impact this topic by

ensuring access to and appropriate use of health

and safety gear. If not taken seriously or handled

properly, Nekkar could have an actual or potential

negative impact on this topic.

Nekkar’s policies and guidelines regarding health

and safety are described in the company’s Health

and Safety Handbook to which all employees have

been onboarded. Shipyard Solutions has also been

certified according to ISO 45001 Occupational

Health and Safety, which is an international standard

aiming to improve employee safety, reducing

workplace risks and creating better and safer

working conditions.

The CEO as well as the HSEQ Manager have the

overall responsibility for health and safety at

Nekkar, in addition to individual health and safety

representatives for each business unit. All managers

have a particular responsibility to monitor and

mitigate any safety risks and report conditions

that may impact quality, safety, the environment

or assets. Employees have a duty to follow the

company’s health and safety guidelines, prevent

unsafe actions and otherwise promote good safety

behaviour.

In 2021, the company established a new Emergency

Response Plan, which includes information about

internal notification procedures, mobilising, 24/7

preparedness and communications. The Emergency

Response Plan also includes an Emergency

Response Team, which was re-established in 2022.

We also appointed a safety representative in

Kristiansand in June.

Risks and opportunities

Working at Nekkar could potentially involve health

and safety risks to employees and the risks differ

depending on whether employees are working in

one of the company’s office locations or onsite.

Employees receive training on work-related hazards

regularly, including fire safety, which continues

to a prioritised area. In addition to reviewing our

company’s fire safety guidelines, Nekkar arranged a

fire drill for key functions in 2022. Service personnel

undergo on the job training guided by experienced

co-workers upon hiring, and also attend specific

health and safety trainings organised by clients to

receive work permits before entering a work site.

For employees doing production follow-up from

suppliers or onsite inspections and installation

supervision, there are work hazards that require

special attention, including lifting, working at

heights, working with scaffolding, dropped objects,

trapping, entanglement, burns and other hazards

arising from equipment use. Specific project risk

assessments are regularly carried out for the work

sites, which mainly relates to Shipyard Solutions’

projects. At Nekkar’s office locations, risks are

mainly associated with sedentary work.

In 2020 the company implemented precautionary

measures relating to the Covid-19 pandemic for all

business units, following recommendations from

national and local authorities. These has been

sustained for most of 2021 and parts of 2022.

Safe operations are at the core of our values and the company continuously work to

ensure that employees return home safely every day.

Health and safety

NEKKAR’S MATERIAL TOPICS

130

NEKKAR ESG REPORT 2022

Measures include for instance more frequent

cleaning of our offices and the use of home office.

Health and safety are continuously discussed at

management level, and extra focus is put on this

during the annual ESG Day (previously Green Day),

where the company actively promote a safety

culture. To minimise health and safety risks, the

company has taken a number of precautions. The

company has invested in ergonomic desks / chairs

at the office locations and employees working in

Syncrolift have access to health services, such as

massage / physiotherapy to minimise the risk of

ergonomic health issues. At the work sites, a Safe

Job Analysis is carried out, as well as safety rounds

to identify any risk factors and ensure necessary

improvements.

Syncrolift conducts safety rounds on-site on a

regular basis. During the safety round in September,

employees were asked to undertake a survey

where they had to rank several statements relating

to health and safety. The statements included

topics such as indoor climate, ergonomics and fire

safety. Overall, the scores were good, but some

improvements can be made for fire safety, light and

noise at the offices.

All employees are required to use personal

protective equipment whenever necessary. Personal

protective equipment is site specific and determined

by the different risk factors on each site.

Suppliers, business partners and

subcontractors

Health and safety requirements for our suppliers

have until now followed the legislation and

standards in the supplier’s home country.

Today, all of Nekkar’s suppliers have to fill out

a “Supplier Evaluation Questionnaire” (SEQ). In

the questionnaire, we ask if the supplier have

implemented a Quality Management system,

an Occupational Health Management System,

an Environmental Management system, or any

OHSAS- and / or ISO-certifications. When working

for Nekkar, suppliers can register injuries and

work-related incidents through a system for non-

conformities.

To follow up on the health and safety of

subcontractors, Nekkar is working to implement

the QMS system in Kristiansand. Nekkar aims at

increasing its effort with respect to suppliers’

compliance with our health and safety policies in the

time to come.

Reporting irregularities

We continuously work towards our zero injuries

vision. It is of critical importance to have full

overview of any adverse event at Nekkar’s sites to

be able to work on prevention and ensure a healthy

and safe workplace.

Injuries are registered at site level and all employees

are encouraged to immediately report incidents or

dangerous occurrences. Injuries and incidents are

registered through the HSE web portal at Landax.

no and in a mobile app, in addition to immediate

internal notification to the CEO, HSEQ Manager

or nearest line manager. Examples of incidents to

report include:

• Near incidents/ incidents, accidents, epidemic

disease at office location, during site work,

service or travelling

• Influence of damage/hazardous conditions

• Breaches of health and safety regulations

• Missing or evacuation of personnel

• Security breaches or criminal acts towards

Nekkar and employees

• Spill/release of products which require

notification to authorities and local response

KPI 2020 2021 2022

No. of work incidents

in the reporting period

0 0 0

Absence due to illness 1.62% 1.88% 3.4%

NEKKAR’S MATERIAL TOPICS

131

NEKKAR ESG REPORT 2022

Promoting and maintaining a high ethical standard

is imperative. As a global company, Nekkar is

both directly and indirectly exposed to ethical

risks throughout its value chain, and can thus

have an actual or potential negative impact on

the environment in which the company operates.

However, by establishing clear guidelines,

communicating with employees about risks and

providing training in business ethics and anti-

corruption, the company can positively impact this

topic.

Nekkar has offices in four different countries, where

three score 69 or lower according to the Corruption

Perception Index (CPI). The CPI index scores and

ranks countries/territories based on how corrupt

its public sector is perceived to be by experts and

business executives. The CPI scores for the four

countries where Nekkar is present are shown in the

map below:

Doing business with integrity and building a culture that prevents unethical

business practices is highly important to Nekkar.

CORRUPTION

PERCEPTIONS

INDEX 2021

#cpi2021

www.transparency.org/cpi

This work from Transparency International (2021) is licensed under CC BY-ND 4.0

SCORE

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-100 No data

Very

Clean

Highly

Corrupt

The perceived levels of public sector

corruption in 180 countries/territories

around the world.

CORRUPTION

PERCEPTIONS

INDEX 2021

#cpi2021

www.transparency.org/cpi

This work from Transparency International (2021) is licensed under CC BY-ND 4.0

SCORE

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-100 No data

Very

Clean

Highly

Corrupt

The perceived levels of public sector

corruption in 180 countries/territories

around the world.

USA

Dubai

Singapore

Norway

Score

Highly

corupt

Very

clean

No data

This work from Transparency International

(2021) is licensed under CC BY-ND 4.0

CORRUPTION

PERCEPTIONS

INDEX 2021

#cpi2021

www.transparency.org/cpi

This work from Transparency International (2021) is licensed under CC BY-ND 4.0

SCORE

0-9 10-19 20-29 30-39 40-49 50-59 60-69 70-79 80-89 90-100 No data

Very

Clean

Highly

Corrupt

The perceived levels of public sector

corruption in 180 countries/territories

around the world.

Country Score

Norway 85

United Arab Emirates 69

United States of America 67

Singapore 48

Business ethics and anti-corruption

NEKKAR’S MATERIAL TOPICS

132

NEKKAR ESG REPORT 2022

Main risks are considered to be related to Shipyard

Solutions’ activities as the company delivers projects

to countries with a heightened risk of corruption,

including China and Vietnam (the Far East), the

Middle East, Africa and South America. However,

based on the risk assessment carried out by the

company, risk exposure is considered to be limited.

The rest of Nekkar’s operations takes place in

countries where the risk of corruption is considered

to be low.

Policies and guidelines

Nekkar’s business should be conducted in a manner

that respects internationally recognised human and

labour rights. The company oppose from all forms of

discrimination, human trafficking, forced labour and

illicit forms of child labour in our operations or value

chain.

Nekkar is committed to follow internationally

recognised business standards and practices

and follows OECD’s guidelines for Multinational

Enterprises. The company adheres to international

and national laws and regulations, including (but

not limited to) the Human Rights Act, the Money

Laundering Act, the Transparency Act, and the

Penal Code with related regulations. Furthermore,

the company shall comply with applicable laws and

regulations in all countries where it is present.

Our guidelines for ethics, anti-corruption and

conflict of interest are described in the company’s

Code of Conduct. The Code of Conduct addresses

important principles and sets clear rules and

expectations for ethical behaviour for all of Nekkar’s

stakeholders.

Communication and training on ethics

and anti-corruption

The company does not have an ethics committee as

of today, but the Management Group is responsible

for communication about and compliance with the

Code of Conduct. The Code of Conduct is shared

with all employees as part of the onboarding

process, and employees are expected to read,

understand and comply with this. In 2021, the

company started collecting signatures from all

employees on the Code of Conduct, and completed

this process in 2022. In 2022, 100% of Nekkar’s

employees had read and signed the company’s

Code of Conduct.

Code of Conduct workshops are regularly held at

all business locations as well as workshops focused

on raising ethical awareness. Joint information

meetings are held whenever the Code of Conduct is

updated. The latest information meeting was held in

December 2022 during the annual ESG Day.

KPI 2022

Total number and percentage of governance

body members that the organization’s anti-

corruption policies and procedures have

been communicated to

0 (0%)

Total number and percentage of employees

that the organization’s anti-corruption

policies and procedures have been

communicated to

(100%)

NEKKAR’S MATERIAL TOPICS

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NEKKAR ESG REPORT 2022 NEKKAR’S MATERIAL TOPICS

Nekkar has developed a

Business Partner Code of

Conduct , which is part of our

standard terms and conditions in

contracts with business partners.

↘

READ THE CODE OF CONDUCT HERE

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NEKKAR ESG REPORT 2022

Business Partner Code of Conduct

Nekkar has developed a Business Partner Code of

Conduct , which is part of our standard terms and

conditions in contracts with business partners.

We have also published this on Nekkar’s external

website. New business partners usually sign

contracts where our anti-corruption policies are

stated, and the company itself, or a third party on

our behalf, conducts risk assessments in relation

to financial and illicit activities for new suppliers,

customers and sales representatives. Shipyard

Solutions and Syncrolift also uses a supplier

evaluation questionnaire, which is required to be

filled in order to become an approved supplier. The

evaluation form includes questions on sustainability,

ethical standards, environmental management and

health and safety.

In 2022, Nekkar revised the company’s procurement

routines for employees and the management

group. The company has also started reviewing all

suppliers in terms of ethical business conduct, with a

particular focus on human rights.

Whistleblowing

All conditions, which give rise to ethical issues or

is considered a breach of the Code of Conduct is

expected to be reported to an employee’s closest

line manager or to the HSEQ and registered, so

that necessary follow-up can be done, and suitable

measures implemented. Examples of concerns that

may be reported include allegations such as:

• Criminal activities

• Violations of health, safety or the environment

• Infringements of Nekkar’s Code of Conduct

• Violation of generally accepted rules/standards

In 2021, the company started the process of

establishing an anonymous whistleblowing channel

through My Voice (Mitt Varsel). The whistleblowing

channel was fully implemented in 2022. Information

about the channel was published on the website

for external users and employees have also been

informed and trained on when and how to use it.

Grievance mechanism

Nekkar is committed to provide for or cooperate

in the remediation of negative impacts that the

organisation identifies it has caused or contributed

to. Grievance mechanisms are established to enable

stakeholders to raise concerns about, and seek

remedy for, the organisation’s potential and actual

negative impacts. In the reporting period, Nekkar

has so far not registered any incidents of negative

impacts, and has therefore not instituted processes

to remediate negative impacts or tracked the

effectiveness of the grievance mechanism.

KPI 2020 2021 2022

total number of significant

instances of non-compliance

with laws and regulations

during the reporting period

0 0 0

total number of fines for

instances of noncompliance

with laws and regulations

that were paid during the

reporting period

0 0 0

confirmed incidents of

corruption in the reporting

period

0 0 0

criminal actions faced related

to corruption or illicit business

practices in the reporting

period

0 0 0

contracts with partners

were terminated or allowed

to expire due to violations

related to corruption in the

reporting period

0 0 0

No. of ongoing investigations

or legal actions pending

0 0 0

NEKKAR’S MATERIAL TOPICS

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NEKKAR ESG REPORT 2022

Human Rights (Transparency Act reporting 2022)

on fundamental human rights and decent working

conditions that the company could either have

caused or contributed towards.

In 2022, we have listed all of our suppliers and

mapped them out by country of operation, in order

to get a geographical overview. Furthermore, we

have mapped our suppliers’ ethics routines through

a Supplier Evaluation Questionnaire, and require

all of our suppliers to sign our Code of Conduct for

Business Partners.

To manage our risk, we frequently communicate our

expectations to suppliers, carry out nondisclosed

evalutations, and ask for more information where

needed. We also carry out physical audits of some

of our suppliers as part of our initial screening/

due diligence. In 2022, all new suppliers were

screened using social criteria as part of the supplier

approvement process.

In the reporting period, Nekkar has not registered

any negative impact from the related topics in

our value chain, including human rights breaches.

Nekkar aims to strengthen the company’s work

related to human rights and supplier due diligence

in 2023.

KPI 2022

% of new suppliers that were screened using

social criteria

100%

In 2022, Norway implemented the “Act relating to

enterprises’ transparency and work on fundamental

human rights and decent working conditions”, more

commonly known as the Transparency Act.

The purpose of the law is to promote respect for

fundamental human rights and decent working

conditions in connection with the production of

goods and the provision of services, and to ensure

the general public access to information regarding

how enterprises address adverse impacts on

fundamental human rights and decent working

conditions.

Nekkar opposes from all forms of discrimination,

human trafficking, forced labour and illicit forms

of child labour in our value chain, and expects

that our business partners and suppliers act in

compliance to applicable law and share our values

and acknowledgement of internationally recognised

compliance standards, as described in our Code of

Conduct for Business Partners.

Nonetheless, Nekkar is aware that we operate

in geographical areas where there could be a

potential risk of and illicit forms of child labour,

unequal pay conditions, forced labour or health

and safety deviations. To reduce this risk, Nekkar

began a due diligence process in 2022 to identify

and assess actual and potential adverse impacts

NEKKAR’S MATERIAL TOPICS

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NEKKAR ESG REPORT 2022 CHAPTER TITLE

Nekkar opposes from all forms of discrimination,

human trafficking, forced labour and illicit forms

of child labour in our value chain, and expects

that our business partners and suppliers act

in compliance to applicable law and share our

values and acknowledgement of internationally

recognised compliance standards, as described

in our Code of Conduct.

↘

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NEKKAR ESG REPORT 2022

As a manufacturing business, Nekkar’s business

activities can have both a positive and negative

impact on climate and the environment. By

delivering sustainable solutions for the marine

and maritime industries in Norway and abroad,

Nekkar mainly has a positive impact on this topic.

The company takes several measures to ensure

that operations are conducted in accordance with

applicable environmental standards, limiting or

reducing emissions as much as possible.

The majority of the company’s business activities

are related to the marine and maritime industries,

which means that we have a responsibility to ensure

sustainable use of our oceans. Nekkar recognises

the ocean as a highly important resource in terms

of biodiversity, food, energy and value creation in

general.

Sustainable product innovation

Nekkar aims to contribute to the sustainable use

and development of marine resources through its

innovative products. New business opportunities

focus on impact technology solutions combined

with high-end software solutions that will positively

contribute to increased sustainability. In our

digital solutions, the focus is technology enabling

electrification and reduced energy consumption in

general, which contributes to reduced greenhouse

gas emissions.

In 2021, Nekkar completed the development of

Starfish: a semi-closed fish cage designed to

improve fish welfare and reduce the lice and waste

problem associated with fish-farming. The fish cage

is manufactured by using light and eco-friendly

materials, where the inner canvas is recyclable

and made of materials that removes the need for

chemicals during cleaning. The goal is to collect at

least 90% of the waste and develop environmentally

friendly solutions for waste management instead of

exposing the sea water, for example using dead fish

or feed remains as a fertiliser.

Several of Shipyard Solutions innovations

contributes to reducing unwanted emissions into

the sea. The ship lifts are designed to provide

better control than a traditional dock. In 2019

the first closed system for collecting wastewater

was delivered, and in 2020 an upgraded version

where the wastewater is cleaned was delivered.

Shipyard Solutions is also investigating solutions

for regenerating energy produced during the lifting

operations into the subsequent transfer of the ship.

Climate accounting and emissions

reduction

In addition to designing and developing sustainable

and environmentally friendly products, reducing

emissions where we can is important to the

company. Nekkar has a direct and indirect impact on

the environment and emissions are mainly related

to energy consumption at our offices, transport of

products / equipment and employee business travel.

Nekkar started climate accounting in 2020 (base

year) and is in the process of setting targets for

reducing energy consumption and GHG emissions

from its business operations. The climate accounting

was updated in 2021 and 2022 using CEMAsys’

digital solution, and comprises the following

organisational units: Aquaculture, Intellilift,

Syncrolift, and Renewables. The information comes

from both external and internal sources, and is

based on the “Corporate Accounting and Reporting

Standard”, as developed by the Greenhouse

Gas Protocol Initiative (the GHG protocol). This

is the most widely used method for measuring

greenhouse gas emissions, and the ISO standard

14064-I is also based on this.

Nekkar is committed to design and deliver sustainable solutions for the marine and

maritime industries in Norway and abroad.

Environmental and climate impact

NEKKAR’S MATERIAL TOPICS

138

NEKKAR ESG REPORT 2022

Annual market based GHG Emissions

Category Unit 2020 2021

electricity total (scope 2) with market-based calculations tCO

e 0.2 74.4

Scope 2 total with market-based electricity calculations tCO

e 0.2 74.4

Scope 1+2+3 total with market-based electricity calculations tCO

e 0.7 5 247.8

Percentage change 100% 733 057.2%

Nekkar has limited emissions from sources that are

either owned or controlled by the company (Scope 1

emissions). The emissions in Nekkar’s Scope 1 stems

from company cars, amounting to 1.3 tCO

e in the

reporting period

The heating and ventilation of office buildings in

Norway and Singapore is the main source of indirect

emissions (Scope 2 emissions). Consumption

of electricity in own or rented premises and/or

buildings are measured using an operational control

approach. In 2022, Nekkar had a total electricity

consumption of 239.9 MWh, which gave total Scope

2 emissions of 2.9 tCO

e (location based). Total

market based Scope 2 GHG emissions was 97.1 tCO

in the reporting period.

In 2022, Nekkar strengthened its climate accounting

by including more Scope 3 data than previous years.

Scope 3 (indirect GHG emissions) accounts for

the majority (99.9%) of Nekkar’s total emissions.

The main source of Scope 3 emissions stems

from outsourced global production, particularly

steel manufacturing and the transportation from

suppliers to the installation sites. Purchased steel for

manufacturing amounted to 1 560.0 tCO

e in 2022,

which is a significant decrease compared to 2021.

Business travel was significantly reduced in both

2020 and 2021 due to the Covid-19 pandemic, which

impacted the company’s indirect GHG emissions

for this period. Nekkar’s emissions from Scope 3,

business travel was 19 483.2 tCO

e in 2022, and the

major increase stems from increased air travel. The

total number of kilometers driven by private cars

within working hours was 29 676, which gave an

emission of 5.1 tCO

In total, Nekkar’s emissions across Scope 1, 2, and 3

amounted to 21,141.6 tCO

e in 2022, up from 5,176

tCO

e in the previous reporting period . The big

increase must be seen in light of an improvement of

data gathering. The emissions data can be found in

the table below. For a detailed overview.

10) 2020 + 2021 total emissions: The low number is due to limited data provided.

NEKKAR’S MATERIAL TOPICS

139

NEKKAR ESG REPORT 2022

Waste management, recycling and

reuse

Although waste from our in-house operations

is relatively limited, implementing good waste

management procedures (take-back schemes,

reuse, and recycling of products and equipment) is

important to the company.

Nekkar’s products are mainly made out of steel,

electronic components, hydraulic and paint.

Although our products have a long lifetime

(approximately 25 years), the company facilitate

recycling and reducing waste for our customers

when using our products. When products are

upgraded the old steel assemblies as well as

wooden decking, old rail systems, wire ropes, and

hydraulic oil are scrapped and recycled. Motors and

wire sheaves are usually refurbished and reinstalled.

Creating awareness among

employees and business partners

If the company is to meet its environmental targets,

employees need to be engaged in the process.

Nekkar’s annual ESG Day is important in this regard.

The company has also started a project where we

aim to have a closer cooperation with our suppliers,

increasing their awareness around issues related

to emissions and waste. During 2022, we have also

worked to implement a new environmental policy

for the company and our employees, which will be

completed in 2023.

In Nekkar’s Supplier Evaluation Questionnaire,

we ask whether suppliers have a documented

Environmental Management system, environmental

certificates, environmental impact assessments, and

about the risk management of chemicals and other

substances, to track their efforts.

Environmental efforts – outlook

Nekkar acknowledges the important challenges

that the world is facing in terms of climate change

and environmental pollution. The company has

the ambition to reduce emissions and will in 2023

conduct a climate risk analysis and set carbon

footprint reduction goals. The company also pays

close attention to the development of the EU

Taxonomy and relevant Technical Screening Criteria

(TSC) for our industry, and aims to comply with

these once they enter into force.

NEKKAR’S MATERIAL TOPICS

140

NEKKAR ESG REPORT 2022

Working environment:

• Conduct a new employee survey in 2023. KPI: 100% participation rate.

• Improve gender balance on all levels in the organisation. Explore initiatives that can

help improve equality and diversity in the workplace.

Health and safety:

• Provide health and safety training for key functions, including fire drills.

Governance, ethics and anti-corruption:

• Inform all new employees on our anti-corruption guidelines.

• Provide information and training for Board members in Nekkar’s business ethics and

anti-corruption guidelines.

• Conduct due diligence of suppliers regarding business ethics and particularly human

rights.

• KPI: 100% of major suppliers having signed the Business Partner Code of Conduct.

Environment:

• Prepare for ISO 14001 certification for the entire organisation.

• Complete and publish the environmental policy on our website.

• Conduct a climate risk analysis.

• Set carbon footprint reduction goals.

• Map our activities according to the EU Taxonomy and relevant TSC.

Other sustainability goals:

• Make sure that sustainability documents and routines are adopted by all companies in

the Nekkar Group (“one firm”).

• Arrange another ESG Day, focusing on updating Nekkar’s ESG strategy

Goals and targets 2023

141

NEKKAR ESG REPORT 2022 GRI CONTENT INDEX

GRI content index

GRI 2 - General Disclosures 2021

Disclosure Disclosure description Reference Omission

2-1 Organizational details About Nekkar

Locations

2-2 Entities included in the organization’s

sustainability reporting

Note 1 Operating segments

2-3 Reporting period, frequency and

contact point

About this report

2-4 Restatements of information About this report

2-5 External assurance About this report

2. Activity and workers

2-6 Activities, value chain and other

business relationships

About Nekkar

Supply chain and sectors served

2-7 Employees Locations

Gender equality and diversity

Information not available:

The company has not

managed to report the

breakdown of different

employee groups by region

2-8 Workers who are not employees Gender equality and diversity

3. Governance

2-9 Governance structure and composition Corporate governance and sustainability approach

1. Implementation and reporting on corporate

governance (annual report)

8. Board of directors, composition and

independence (annual report)

Information not available:

The company does not

report information about

underrepresented social

groups

2-10 Nomination and selection of the

highest governance body

Corporate governance and sustainability approach

7. Nomination committee (annual report)

2-11 Chair of the highest governance body Governance structure and composition

2-12 Role of the highest governance body

in overseeing the management of

impacts

Governance structure and composition

2. Business (annual report)

9. The work of the board of directors (annual report)

10. Risk management and internal control (annual

report)

2-13 Delegation of responsibility for manag-

ing impacts

Corporate governance and sustainability approach

2-14 Role of the highest governance body

in sustainability reporting

About this report

2-15 Conflict of interest Conflicts of interest

10. Risk management and internal control (annual

report)

142

NEKKAR ESG REPORT 2022 GRI CONTENT INDEX

2-16 Communication of critical concerns Conflicts of interest

2-17 Collective knowledge of the highest

governance body

Role and evaluation of the highest governance body

2-18 Evaluation of the performance of the

highest governance body

Role and evaluation of the highest governance body

2. Business (annual report)

9. The work of the board of directors (annual report)

2-19 Remuneration policies Remuneration policies

9. The work of the board of directors (annual report)

11. Remuneration of the Board of Directors (annual

report)

12. Salary and other remuneration for executive

personnel (annual report)

2-20 Process to determine remuneration Remuneration policies

9. The work of the board of directors (annual report)

11. Remuneration of the Board of Directors (annual

report)

12. Salary and other remuneration for executive

personnel (annual report)

2-21 Annual total compensation ratio Remuneration report (website)

Gender equality and diversity

4. Strategy, policies and practices

2-22 Statement on sustainable development

strategy

CEO letter

2-23 Policy commitments UN Sustainable Development Goals

The Transparency Act

Policies and guidelines

Business partner Code of Conduct

Corporate governance and sustainability approach

Communication and training on ethics and anti-

corruption

2-24 Embedding policy commitments Communication and training on ethics and anti-

corruption

2-25 Processes to remediate negative

impacts

Whistleblowing

2-26 Mechanisms for seeking advice and

raising concerns

Whistleblowing

2-27 Compliance with laws and regulations Whistleblowing

2-28 Membership associations Working environment

5. Stakeholder engagement

2-29 Approach to stakeholder engagement Corporate governance and sustainability approach

Stakeholders

Stakeholder dialogue

2-30 Collective bargaining agreements

143

NEKKAR ESG REPORT 2022

Material topcis

GRI 3: Material topcis 2021

3-1 Process to determine material topcis Defining Nekkar’s material topics

Stakeholder dialogue

3-2 List of material topics defining Nekkar’s material topics

WORKING ENVIRONMENT

3-3 Management of material topics Working environment

Stakeholder dialogue

GRI 401: Employment

401-1 New employee hires and employee

turnover

Table 3 Employee category Information not available:

The company has not

managed to gather

information about age

group and region

Own KPI

Parental

leave

Number of employees on parental

leave

Table 6 Parental leave

Employee

survey

Employee survey participation rate Employee surveys

GRI 405: Equality and diversity

405-1 Diversity of governance bodies and

employees

Gender equality and diversity Information not available:

The company does not

track information about

minority or vulnerable

groups.

405-2 Ratio of basic salary and remuneration

of women to men

Table 2 Ratio of basic salary and remuneration of

women to men

GRI 406: Non-discrimination

406-1 Incidents of discrimination and correc-

tive actions taken

Our work on diversity and non-discrimination

HEALTH AND SAFETY

3-3 Management of material topics Health and safety

GRI 403: Occupational health and safety

403-1 Occupational health and safety

management system

Health and safety

403-2 Hazard identification, risk assessment,

and incident investigation

Risks and opportunities + Reporting irregularities

403-3 Occupational health services Health and safety

GRI CONTENT INDEX

144

NEKKAR ESG REPORT 2022

403-4 Worker participation, consultation, and

communication on occupational health

and safety

Health and safety

403-4 Worker participation, consultation, and

communication on occupational health

and safety

Health and safety

Own KPI

KPI Absence due to illness Reporting irregularities

KPI Work incidents Reporting irregularities

ETHICS AND ANTI-CORRUPTION

3-3 Management of material topics Business Ethics and anti-corruption

Stakeholder dialogue

GRI 205: Anti-corruption

205-1 Operations assessed for risks related to

corruption

Information not available:

The company has not

managed to gather

data about this in 2022

but plans to obtain the

information in 2023.

205-2 Communication and training about

anti-corruption policies and procedures

Communication and training on ethics and anti-

corruption

Business Partner Code of Conduct

Information not available:

breakdown only shown for

Norway, and not specified

per employee category.

The company has nott

trained employees or

Board members in anti-

corruption.

205-3 Confirmed incidents of corruption and

actions taken

Whistleblowing

GRI 414: Supplier social assessment

414-1 New suppliers that were screened

using social criteria

Transparency Act

ENVIRONMENT

3-3 Management of material topics Environment and climate impact

Stakeholder dialogue

GRI 305: Emissions

305-1 Direct (scope 1) GHG emissions Climate accounting and emissions reduction

Carbon accoutning report 2022 (website)

305-2 Energy indirect (scope 2) GHG

emissions

Climate accounting and emissions reduction

Carbon accoutning report 2022 (website)

305-3 Other indirect (scope 3) GHG emissions Climate accounting and emissions reduction

Carbon accoutning report 2022 (website)

GRI CONTENT INDEX

145

NEKKAR ESG REPORT 2022 CHAPTER TITLE

Remuneration report

2022

Disruptive

technologies,

Sustainable results

146

NEKKAR ESG REPORT 2022 CHAPTER TITLE

1 4 7

NEKKAR ESG REPORT 2022 CHAPTER TITLE

1 Introduction/Statements 148

2 Overview | Financial performance in 2022 148

3 Remuneration | Board of directors 150

4 Remuneration | Executive Management 152

5 Remuneration of the Board and

Executive Management | Comparative overview 155

6 Compliance with the Remuneration Policy 155

7 Audit assurance report 156

Content

148

NEKKAR REMUNERATION REPORT 2022

1 Introduction/Statements

2 Overview | Financial performance in 2022

The report on salaries and other remuneration

to leading personnel (the “Report”) provides an

overview of the total remuneration received by

each member of the board of directors (“Board”)

and of the executive management (“Executive

Management”) of Nekkar ASA (the “Company”) for

the financial year 2022 with comparative figures for

the past five financial years.

The remuneration of the Board and Executive

Management during the past financial year is based

on the guidelines for determination of salaries and

other remuneration in the Company, which were

approved by the annual general meeting on 30 May

2022. (the “Guidelines”). The overall objective of

the remuneration is to attract, motivate and retain

qualified members of the Board and the Executive

Total revenues of the Nekkar Group amounted to

NOK 388 million in 2022, a decrease of 19.1 percent

compared to 2021. Operational EBITDA

ended at

NOK 70.3 million in 2022 compared to NOK 142.6

million in 2021, equivalent to EBITDA-margins of 18.2

percent and 29.7 percent respectively.

Reported EBITDA was NOK 62.2 million in 2022,

down from NOK 139.8 million in 2021.

Management and to align the interests of the Board

and the Executive Management with the interests of

the Company and its shareholders.

The report is based on the requirements set out in

the Norwegian Public Limited Companies Act of

13 June 1997 no. 45 (the “Companies Act”) section

6-16a and 6-16b, as well as Regulation on guidelines

and report on remuneration for Senior Executives of

11 December 2021 No. 2730 (the “Regulation”)

The information included in the Report has been

derived from the audited annual reports of the

Company for the financial years 2018 – 2022

available on the Company’s website, www.nekkar.

com. All amounts are presented in NOK.

Pre-tax profit was NOK 42.6 million in 2022, down

from NOK 132.5 million the previous year. Profit after

tax (continued business) was NOK 32.6 million and

NOK 111.6 million for 2022 and 2021 respectively.

The revenue and profit are solid also in 2022, but

the decrease compared to the extraordinary results

from 2021 was to a large extent a result of customer

driven delays in major shiplift projects in Shipyard

Solutions. However the activity remains high also in

2022.

1) Operational EBITDA does not include accounting effects from FX hedging contracts not qualifiying for hedge accounting. In 2022, this

amounted to a loss of NOK 8.1 million compared to a loss of NOK 4.0 million in 2021.

1 4 9

NEKKAR REMUNERATION REPORT 2022

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NEKKAR REMUNERATION REPORT 2022

3 Remuneration | Board of directors

3.1 Fixed annual fee

Members of the Board receive a fixed annual base

fee approved by the annual general meeting. The

nomination committee assesses and presents

proposals for the remuneration of the Board. Further,

the nomination committee conducts an assessment

of the Company’s remuneration on the basis of the

Company’s size and complexity as well as the level of

director’s fees in other listed Norwegian companies.

The size of the remuneration is not affected by the

Company’s financial development.

During 2022 there has been 17 Board meetings.

This annual base fee shall be in line with market

practice of comparable listed companies taking

into account the required competencies, effort

and scope of work of the members of the Board.

The members of the Board also serves as Audit

committee and the fixed annual fee includes

committee work.

At the annual general meeting 30 May 2022, Trym

Skeie and Gisle Rike were re-elected as board

members for a period of two years while Marit Solberg

and Ingunn Svegården were not up for election.

The below table outlines the remuneration for the

Board for the financial year 2022-(2021).

Name and position

NOK

Annual

fee

Audit

Committee

fees

Other

Benefits Pension

Extra-

ordinary

items

Total

remuneration

Trym Skeie

Chairman

500 000

(500 000)

(-)

500 000

(500 000)

Marit Solberg

Deputy Chairman

315 000

(315 000)

(-)

315 000

(315 000)

Gisle Rike

Board member

315 000

(315 000)

(-)

315 000

(315 000)

Ingunn Svegården

Board member

315 000

(315 000)

(-)

315 000

(315 000)

Total 1 445 000

(1 445 000)

(-)

1 445 000

(1 445 000)

1) The remuneration is based on a 12 month period between the ordinary annual general meeting.

NOMINATION COMMITTEE REMUNERATION

In 2022, Nekkar’s nomination committee comprised of the following members: Anne Grethe Ellingsen (Chairman)

and Leif Haukom. The nomination committee remuneration in 2022 was TNOK 67 for the chairman and TNOK 40

for the member.

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NEKKAR REMUNERATION REPORT 2022

3.2 Shareholding members of the Board

As of 31 December, the Board members held shares in Nekkar ASA as follows:

Name and position

Share program

subject to lock-up Oher shares Total no of shares

Market value year-

end NOK million

Trym Skeie

2022

2021

142 002

104 971

1 527 968

1 669 970

1 632 939

10.2

16.3

Marit Solberg

2022

2021

98 809

73 479

98 809

73 479

0.6

0.7

Gisle Rike

2022

2021

Ingunn Svegården

2022

2021

1) Trym Skeie holds 465 142 shares in person and 1 204 828 shares through Skeie Kappa Invest AS. Total shares controlled by Trym Skeie is

1 669 970 as per 31 December 2022. The Skeie familiy, and companies directly or indirectly controlled by them, holds 34 653 036 shares

as per 31 December 2022, representing 32.5% of total shares outstanding.

152

NEKKAR REMUNERATION REPORT 2022

4 Remuneration | Executive Management

The remuneration policy for Executive Management

of Nekkar ASA is based on offering competitive

terms that should also reflect that Nekkar is a listed

company with an international focus. Competitive

terms are imporatant for the Company’s ability

to recruit and retain highly qualified personnel.

However, as a general principles the management

salary should not be leading compared to the

industry, in addition to avoiding that the variable

element constitutes a too large portion of the

total compensation and thus entailing unfortunate

incentives and short-term focus.

The remuneration of the members of the Executive

Management is assessed on an annual basis and is

effective from 1 August. The remuneration and the

remuneration components is approved by the Board.

Members of the Executive Management are entitled

to an annual remuneration package in accordance

with the Remuneration Policy, which may consist

of the following fixed and variable remuneration

components:

a. fixed base salary,

b. pension contribution,

c. performance-related pay arrangements

consisting of an annual cash bonus,

d. long-term incentive remuneration consisting of

participation in share purchase- or share option

programs,

e. termination and severance payments, and

f. non-monetary employee benefits.

The choice of these components create a well-

balanced remuneration package reflecting (i)

individual performance and responsibility of

the members of the Executive Management in

relation to goals and targets, both in the short and

the longer term, and (ii) the Company’s overall

performance.

Members of the Executive Management includes

the Chief Executive Officer, Head of Finance,

Chief Operating Officer along with Executive Vice

Presidents for the various business units.

4.1 Remuneration composition

4.1.1 FIXED BASE SALARY

The fixed base salary is stipulated based on the

position’s responsibility, complexity, competence

and seniority. The base salary is intended to be

competetive and motivating, but in-line with general

market terms.

4.1.2 PENSION CONTRIBUTION

The Company has established a defined contribuion

pension scheme in accordance with mandatory law.

Members of the Executive Management team does

not have special agreements which includes early

retirement plans or supplementary pension schems.

The defined contribution plan includes 7% of fixed

base salary up to 7.1G and 25.1% of fixed based

salary ranging from 7.1G to 12G.

4.1.3 PERFORMANCE-RELATED CASH BONUS

Under the Company’s bonus scheme, the maxium

bonus is limited to 6 months fixed base salary. The

measurement criteria are linked to personal goals

and financial goal achievment for the Group or

relevant business unit. The defined performance

criteria in the bonus scheme includes both sales &

operational targets along with organisational- and

financial goals.

The purpose of the annual cash bonus is to stimulate

the continous development of the Company’s

value creating, growth and results as the individual

member’s interests is aligned with the Company.

Stipulation of the cash bonus is based on an overall

assessment of the measurment criterias.

For the financial year 2022, a total cash bonus

of TNOK 691 (2021: TNOK 672) was paid to the

Executive Management.

4.1.4 LONG-TERM INCENTIVE, SHARE PURCHASE

PROGRAM

A share-based investment program is established in

the Company. All the employees of the Group and

the members of the Company’s Board are given the

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NEKKAR REMUNERATION REPORT 2022

opportunity to acquire shares in the Company at a

discounted price of 25% against a 2-3 year lock-in

period which prevents sale of the shares within the

period.

The Board determines the detailed allocations

within the limit, based on a separate authorisation

approved by the annual general meeting 30 May

2022. Distribution of shares to the Board is made

after conferring with the nomination committee.

During 2022, a total of 287 334 (2021: 165 871)

shares were issued related to the share purchase

program.

4.1.5 TERMINATION AND SEVERANCE PAYMENTS

Members of the Executive Management has a notice

period of six months. The use of severence pay is

limited, however this may in some instances serve

as a good alternative for all involved parties. The use

of severance pay is limited upwards to one annual

salary.

4.1.6 NON-MONETARY EMPLOYEE BENEFITS

Members of the Executive Management may be

granted certain non-monetary benefits such as

company car as well as other customary non-

monetary employee benefits such as, newspaper,

telephony, internet access, group life insurance and

post-qualifying education/course as approved by

the Board.

4.1.7 CLAW-BACK

The share purchase program includes a good-/bad

leaver clause which entitles the Company to acquire

a proportional, or all, shares from the employee

if he/she resigns within the lock-up period. E.g. if

an employee resigns (good leaver) one year post

participating in the share purchase program, the

Company has the right to acquire 50% of the shares

from the employee. The price shall be equal to the

employee’s subscription price per share.

If the employee is legally dismissed within the lock-

up period, the Company has the right to acquire all

shares obtained in the share purchase program at a

price per share set to the lowest of the subscription

price and share price at Oslo Børs.

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NEKKAR REMUNERATION REPORT 2022

4.2 Remuneration and shareholdings

4.2.1 REMUNERATION DEVELOPMENT 2022-2021

The development in the remuneration of the Executive Management is summarized in the table below

Name and position

NOK thousand

Fixed base

salary

Other

benefits

Cash

bonus

Pension

cost

Severance

pay

Total remu-

neration

Proportion

Fixed

Ole Falk Hansen

CEO from 07.2022

2022

2021

1 288

1 393

100%

Preben Liltved

Interim CEO from 09.2020-

06.2022, COO from 07.2022

2022

2021

1 931

2 760

103

2 041

2 760

100%

Marianne Voreland Ottosen

Head of finance from 04 2022

2022

2021

819

111

138

1 068

100%

Kristoffer Lundeland

Interim CFO from 04.2019 -

08.2022

2022

2021

1 667

3 030

1 667

3 030

100%

Rolf-Atle Tomassen

EVP Shipyards Solutions

2022

2021

1 955

1 733

691

672

196

188

2 862

2 614

76%

74%

Mette Harv

EVP Aquaculture and Renewables

2022

2021

1 765

1 692

222

181

2 001

1 886

100%

Toril Eidesvik

CEO until 09.2020

2022

2021

1 350

1) Preben Liltved was hired in from Eyde Mooring Solutions AS until 30.06.2022. Of fixed base salary MNOK 1.1 represents fee paid to Eyde Mooring Solutions AS

2) Kristoffer Lundeland was hired until 01.09.2022. Fixed base salary represents fee paid to EY.

As illustarted, the total cash bonus paid to Executive Management amounted to TNOK 691 in 2022 which corresponds to

~40% of fixed base salary for Rolf-Atle Tomassen.The bonus targets included both quantitative and qualitative and ESG

targets. These targets include; sales & operation, financial targets (budget) and organizational targets.

4.2.2 SHAREHOLDING EXECUTIVE MANAGEMENT

As of 31 December, the Executive Management held shares in Nekkar ASA as follows:

Name and position

Share program

subject to lock-up

Oher

Total no

of shares

Market value year-

end NOK million

Ole Falk Hansen

CEO from 07.2022

2022

2021

200 311

1.2

Preben Liltved

Interim CEO from 09.2020 -

06.2022, COO from 07.2022

2022

2021

101 561

83 786

101 561

83 786

0.6

0.8

Marianne Voreland Ottosen

Head of finance from 04 2022

2022

2021

Kristoffer Lundeland

Interim CFO from 04.2019 -

08.2022

2022

2021

Rolf-Atle Tomassen

EVP Shipyards Solutions

2022

2021

3 303

0.0

Mette Harv

EVP Aquaculture and Renewables

2022

2021

155 462

43 303

198 765

1.2

2.0

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NEKKAR REMUNERATION REPORT 2022

5 Remuneration of the Board and Executive

Management | Comparative overview

The development in the remuneration of the Board and Executive Management over the past five financial years is

summarized in the table below.

Name and position

NOK thousand

Act.

2022

vs.

2021

Act.

2021

2020

Act.

2020

vs.

2019

Act.

2019

vs.

2018

Act.

2018

vs.

2017

Ole Falk Hansen (CEO from 07.2022)

1 393 100% - - - - - - - -

Preben Liltved (Interim CEO from

09.2020-06.2022, COO from

07.2022)

2 041 -26% 2 760 3 744 - - - - -

Marianne Voreland Ottosen

(Head of finance from 04.2022)

1 068 100% - - - - - - - -

Rolf-Atle Tomassen (EVP)

2 862 10% 2 614 - 2 610 -4% 2 718 11% 2 442 5%

Mette Harv (EVP)

2 001 6% 1 886 1% 1 866 -4% 1 936 -20% 2 410 106%

Toril Eidesvik (former CEO

04.2016-09.2020)

- -100% 1 350 -49% 2 661 -33% 3 980 -38% 6 369 107%

Kristoffer Lundeland (Interim CFO

from 04.2019 - 08.2022)

1 667 -45% 3 030 12% 2 706 24% 2 188 - - -

Leiv Kallestad

(former CFO 08.2017-04.2020)

- - - - - -100% 1 040 -65% 2 984 184%

Henrik Solberg-Johansen

(former CFO until 08.2017)

- - - - - - - - - -100%

Chairman of the Board

500 - 500 10% 455 8% 420 - 420 5%

Board member

315 - 315 7% 294 - 294 22% 242 5%

Revenues

387 503 -19% 479 983 34% 359 467 35% 266 614 21% 220 310 4%

Operational EBITDA

70 296 -51% 143 733 101% 71 382 39% 51 282 202% 17 000 62%

Profit before tax

42 634 -68% 132 534 85% 71 717 117% 33 102 149% 13 305 215%

Company employees

68 8 62 8 54 4 50 12 38 -

Average remuneration

1 118 -6% 1 191 11% 1 073 6% 1 016 -13% 1 167 -4%

1) The remuneration for the Board equals the approved amount from the Annual General Meeting.

6 Compliance with the Remuneration Policy

The remuneration of the Board and Executive Management for the financial year 2022 is consistent with the

framework provided by the remuneration guidelines, approved by the annual general meeting 30 May 2022.

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NEKKAR REMUNERATION REPORT 2022

Auditor assurance report

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NEKKAR REMUNERATION REPORT 2022

158

NEKKAR ANNUAL REPORT 2022 STATEMENT ON COMPLIANCE

Statement on

compliance

Today, the Board of Directors and the CEO has reviewed and approved the 2022 Annual Report which includers

the Board of Directors’ report and the consolidated and separate financial statements related to Nekkar ASA as of

31 December 2022.

This statement is based on reports, information and statements from the group’s CEO, CFO and other

administration, on the results of the group’s relevant activities, and on other information which is essential to

assess the position of the group and parent company.

To the best of our knowledge we confirm that;

• the Consolidated annual financial statements for 2022 have been prepared in accordance with IFRSs and

IFRICs as adopted by the European Union, IFRSs as issued by IASB, and additional Norwegian disclosure

requirements in the Norwegian Accounting Act

• the Board of Directors report gives a true and fair view of the development, performance, financial position,

principle risks and uncertainties of the company and the group,

• the information presented in the financial statements gives fair view of the company’s and the group’s assets,

liabilities, financial position and results for the period viewed in their entirety

• the Board of Directors report for the group and the parent company is in accordance with the Norwegian

Accounting Act and relevant Norwegian Accounting Standards

• the separate financial statement for Nekkar ASA for 2022 has been prepared in accordance with the Norwegian

Accounting Act and Norwegian Accounting Standards

Kristiansand, 27 April 2023

The Board and Management of Nekkar ASA

Trym Skeie

Chairman

Gisle Rike

Director

Ole Falk Hansen

CEO

Ingunn Svegården

Director

Marit Solberg

Director

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NEKKAR ANNUAL REPORT 2022

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NEKKAR ESG REPORT 2022 CHAPTER TITLE

Contact Nekkar

Address: Andøyfaret 15

4623 Kristiansand, Norway

Email: info@nekkar.com

Web: nekkar.com