These integrated services offerings position us well to capture the vast decommissioning Plug & Abandonment ("P&A") market. We are building a strong P&A organisation, and our P&A offerings signify a commitment to responsible decommissioning and environmental stewardship. 

The energy transition creates a dynamic and evolving industry where adaptability and innovation are key to navigating challenges and opportunities. As well as a focus on our own activities, we can support client’s ambitions to perform operations in a more sustainable and efficient manner using our tools and technology. Ensuring a reliable energy supply for future generations requires a balance of traditional energy sources and renewables. During the year, Odfjell Oceanwind, which Odfjell Technology holds a share of, announced Mitsui O.S.K. Lines Ltd as an important shareholder and strategic partner following a private placement. This transaction strengthens Odfjell Oceanwind’s position as a global leader in floating offshore wind technologies. 

 During the year and into 2024, we have worked systematically to understand the ever-evolving landscape of sustainability reporting, educating and supporting the business to satisfy requirements, and ensure transparency. We have a strong emphasis on responsible and sustainable practices in our operations including adherence to stringent environmental regulations and industry standards.  

I am also very pleased with the work that has been done with our Odfjell Technology Women’s Network. Throughout the year, they have held workshops around the world providing a platform for women to connect, discuss professional development, and promote diversity and equal opportunities

Our ambitions to grow centre around targeting a bigger international footprint with Well Services, entering new countries and markets where we can establish long term business, as evidenced by our entry into Namibia and Canada. They also include increasing Operations volume, including the jack-up market, through an unwavering commitment to excellent operations and strong client relationships. In addition, we are building competence and capacity in Projects & Engineering with motivated experts, which will allow us to capitalise on growth opportunities and support the energy transition.

Being able to adapt and embrace new opportunities, applying good risk management controls, is key to our long-term strategy. We aim to grow through innovation, global expansion, and operational excellence, with Mergers & Acquisitions ("M&A") being a potential route to increasing service offerings and technologies. 

Key to all of this is the recruitment, retention and development of a skilled workforce. Dedication from the whole organisation will ensure we meet or exceed client needs and deliver shareholder value, all underpinned by our culture and core values. 

Finally, I would like to say thank you to all our shareholders, clients, employees and vendors who have supported Odfjell Technology as it has embarked on its journey as a separate Group. The success of the Group is something I am very proud of and none of it would be possible without your support.

Simen Lieungh,

CEO Odfjell Technology AS

Odfjell Technology is a highly integrated technology and engineering group delivering specialist services, technology and competence across the global energy value chain. Combining our three Business Areas of Well Services, Operations and Projects & Engineering ("P&E"), we provide a unique integrated services offering, focused on delivering safe, sustainable, cost-effective solutions to our clients across the globe. Collaboration is a core aspect of our operational philosophy and is crucial for leveraging performance improvement opportunities and showcasing our creativity in problem-solving.

P&A is an important part of our strategy to grow the business, utilising all of our Business Areas. This is an area we already have experience in, having worked on the P&A of assets in the UK North Sea for many years. There will be a significant amount of work in this field with over 400,000 wells worldwide being decommissioned and abandoned in the next few years and well abandonment itself can represent as much as 48% of total decommissioning cost. The continual development of Odfjell Technology products, such as our rigless unit concepts, challenge the traditional processes and are key to ensuring our clients maximise efficiency and minimise environmental impact, supporting the energy transition. In November, we attended the Annual Offshore Energies UK Decommissioning conference in St Andrews, Scotland, with a collaboration across our Business Areas from Norway and the UK showcasing our approach to decommissioning. Growing our portfolio of technical solutions is important and M&A is one route being considered for this.

Green Technology’s ("GT") Combined Energy & Efficiency Management ("CEM") screening has been a door opener for several new, external customers. The screening maps client's current energy consumption and suggests a range of measures to improve the efficiency and reduce emissions. These are just some of the activities to support the energy transition.

Rig count and activity was high throughout 2023, with a 30% increase in revenue from the previous year.

The strategic focus is to grow internationally while maintaining our position in traditional markets. 2023 saw us operating in new countries such as Namibia, Canada and Indonesia, and we expect to see growth in a number of areas in 2024. During the year we extended our base in Kenaman, Malaysia and see an upturn in contract wins there. Dedication and hard work from our team in Malaysia has brought us far in a short space of time, and we are ready to expand further.

With such an international footprint, it is important that there is a strong and inclusive Group culture that unites employees across the different regions. Executive Vice President ("EVP"), Elisabeth Haram travelled to several of our locations during 2023, talking about what ties us all together as one Odfjell Technology – our core values. These guide us in how we do business and through these, we foster a culture of collaboration and creativity.

In terms of products, there is a high focus on remotely operated technologies and on providing innovative products that improve efficiency and safety and which in turn reduce the environmental impact of operations.

As part of using our heritage for the energy transition, Odfjell Technology and our partners successfully completed a geothermal pilot project onshore Norway, in the city of Tromsø. This involved piloting a heat storage concept, storing heat from the summertime to heat water when needed in the winter. To do this, we utilised one of our proven rigless intervention units, which to date have been deployed over 200 times in Continental Europe, and this operation represented their first use in Norway for this type of work.

The rigless unit is just one of many products offered in our portfolio of complimentary, efficient and time saving technologies for P&A and other activities. We can offer a range of delivery models for clients, using partnerships to ensure we get the right solution for our client’s specific challenges.

2023 saw an increase in revenue with continued support to 16 fixed installations across Norway and the UK. We also completed the first full year of our management contract for the jack-up Linus. Jack-up management is a strategic target for us and our track record of implementing integrated services shows the power of collaboration in delivering outstanding results. We were delighted to announce in 2024 a new 5 year contract with Repsol for drilling services on Yme Inspirer.

Safety continues to be our priority and as well as internal campaigns, safety recognition awards and coaching, we have shared learnings not only across our own asset portfolio but also across the industry. Congratulations to our crew on Tern Alpha which won the Chair Award early 2023 for the Best Safety Performance – Platform, at the International Association of Drilling Contractors North Sea Chapter safety awards. As always though, there is room for improvement and dropped objects will be a focus for 2024.

During the year we were awarded a two-year contract extension with Serica Energy UK Ltd for the provision of storage, preservation, maintenance and platform drilling services on the Bruce platform in the UK North Sea. On the Mariner platform in the UK, Equinor exercised a one-year option for integrated services. Our order backlog shows security of contracts, some as far as 2031 including options. Our ambition is to grow the number of contracts and provide pull through opportunities for Well Services and P&E.

We strive for excellence in our operations and not just meet, but exceed client expectations, particularly in efficiently managing complex operations and setting new industry standards.

Our rig inspection service line has seen fantastic development throughout the year, and we see this as being a key contributor in our vision to support the energy transition.

We are fundamentally a people business and investing in the future of our workforce is crucial. Since 1999 our apprenticeship programmes have provided the business with innovative thinking and an important part of our workforce. This year we were delighted to take on another cohort of apprentices, including those working offshore.

In 2023, P&E successfully delivered several exciting projects for clients in the energy sector, encompassing a wide range of activities, from managing major and complex brownfield projects to providing specialised advisory services.

The compliance services portfolio saw increased activity as we successfully managed Special Periodic Surveys, including multiple yard stays, for several of Odfjell Drilling’s rigs.

Other notable projects included the reactivation of the Hercules and Deepsea Mira assets for Odfjell Drilling, the Heidrun B modification and upgrade for OSM Thone, and the Mariner DES and ICU modifications and upgrades for Equinor. These initiatives underscore our commitment to handling complex brownfield projects for clients.

In specialised advisory services, notable projects included studies like the CEM Screening of two Seadrill operated drillships for TotalEnergies, and a P&A feasibility study for Serica Bruce. Our engineers have also played a pivotal role for Odfjell Oceanwind’s significant development throughout 2023. These projects demonstrate our expertise in providing focused and insightful advisory services – helping clients reduce fuel consumption and emissions, and also preparing for the energy transition. We have now created a dedicated vice president role for Energy Transition which will continue to drive our energy transition strategy and implement the same.

An example of collaboration and integrated services was the Energy and Emissions Reduction Screening carried out on Linus in 2023, identifying a package of emission reduction projects. This has now been evaluated, and an energy efficiency project has been approved for execution in 2024.

Our marine specialists continued to support Odfjell Drilling by conducting mooring and riser analyses, defining well-specific operating guidelines, and planning marine operations. Simultaneously, they took on responsibilities to ensure the safe operation of Linus, including planning the rig move of the jack-up. Our experts in maintenance and technical integrity played a pivotal role in assessing the known condition of our clients' assets and equipment, and implementing proactive inspection and maintenance schemes. Securing the frame agreement to provide services and maintenance to all Aker BP installations in a five-year contract marked a significant milestone for our HVAC-R department.

As activity levels for P&E continue to increase, we also need to secure and retain competent resources to increase our capacity. Over the course of 2023 our employee numbers have grown 35%, with contractor numbers also increasing. A significant move to address the resourcing challenges, is the opening of an engineering hub in Manila in November 2023. We already have a significant footprint in Manila with our Global Business Services ("GBS"). We are delighted to take on 21 engineers locally, with our P&E Manager relocating from Norway to manage this new centre and ensure seamless collaboration with colleagues in other centres. This means we now have engineering hubs in Bergen, Stavanger, Aberdeen and Manila. With a strong onboarding process, we can ensure new resources in these hubs are aligned with our vision, values and work processes.

In 2023, Odfjell Technology began preparing for the EU CSRD and the applicable European Sustainability Reporting Standards ("ESRS"), by integrating the sustainability report and the annual report, and restructured its sustainability disclosures as applicable. 

Odfjell Technology will report in compliance with the implementation schedule of the CSRD and applicable ESRS in its 2024 annual report.

The purpose of our reporting is to provide stakeholders with a fair and balanced picture of relevant aspects, engagements, practices, and results for 2023. The Sustainability Statement is prepared on the same consolidated basis as the financial statements. The basis for preparation of sustainability information that relates to business relationships in non-consolidated entities, including Odfjell Technology's upstream or downstream value chain, is clearly identified as such. The Sustainability Statement is approved by the Board of Directors (the "Board").

The Sustainability Statement has not been assured by independent third parties, but it will be subject to limited assurance for the year 2024.

Odfjell Technology is committed to behaving as a responsible global citizen, and we have identified five United Nations Sustainability Development Goals where we believe Odfjell Technology can have the most impact:

With a commitment to robust operations and governance, our organisation strategically integrates climate risks and opportunities into its overall enterprise risk management approach. In 2022, we undertook the development of climate risk assessments for the Group, aimed at reporting in compliance with both the GRI 2021 standard and the TCFD framework.

Following this analysis, we systematically prioritised the identified risks and opportunities based on their timelines for impacting our business and their implications for our organisation. This prioritisation process has allowed us to pinpoint primary risks, assess their impact on the group, and identify potential courses of action. Furthermore, we are actively engaged in the process of quantifying these risks to facilitate future reporting, in alignment with the ESRS.

The top physical and transition risks are outlined in the table below with time horizons of short-term (0-5 years), medium-term (5-10 years), and long-term (10+ years):

Odfjell Technology is a people-oriented business. We are comprised of more than 2,400 employees who are passionate about supporting the Group's vision. The assurance of employee well-being, a positive working environment, and responsible employment practices is paramount to the success of Odfjell Technology.

We strive to create a safe, healthy, diverse and inclusive working environment for all. Our approach to health and safety work is guided by our commitment to prevent harm. Positive employment practices means being compliant with labour laws and ensuring good working conditions for employees, a prerequisite for any business. As a global Group, we have a responsibility to ensure that our actual and potential impact on human rights is mitigated across our value chain.

The Group has an ambition of being "Always Safe" and maintaining the highest safety standards in all activities and services. It is one of our core values. We believe this is achieved with an organisational culture based on competence, commitment, mutual respect, empowerment, and involvement. Employee engagement and participation is essential to ensure safe operations.

Our procedures are the framework for operating our business, and are continually improved based on learnings from both successes and failures. Understanding risk in daily operations and understanding the root causes when incidents happen, helps us learn. Sharing the learnings and transferring experiences openly throughout our organisation helps us improve. Ensuring that we have a good working environment, where employees can develop and feel part of the team, are important aspects of health and well-being.

Monitoring sick leave and employee turnover keeps us informed of the overall status in the organisation's working environment, in addition to the Global Working Environment Survey. The Group has a high focus on competence assurance and leadership development, to create an organisational culture with good values, attitudes and conditions for collaboration.

Odfjell Technology is characterised by an ethical standard regarded by employees, clients and the community, as being lawful, reasonable and correct. Further, we safeguard the security of our assets, material and personnel on all our locations based on local risk assessments.

The Group recognise that the nature of onshore and offshore operations poses an inherent risk to personnel health and safety. Leadership, strong understanding of risk, and a continuous focus on daily risk management are essential components in achieving and maintaining safe operations. This will always be our number one priority.

The Group's approach to health and safety includes safeguarding employees and contractors under Odfjell Technology's control. We have overall responsibility for occupational health and safety of our employees on rigs, in workshops, in offices and all applicable locations. We have the responsibility for our own personnel and subcontractors, but the E&P Operator has the overall responsibility for facilities and health services on board installations.

The Group's annual QHSSE Programme sets the overall objectives and improvement actions for the year, and Business Areas and units develop their own specific action plans supporting the QHSSE Programme. Please see QHSSE section for further detail.

Objectives, improvement actions and KPIs are established based on safety statistic trends, past performance, risk level, industry best practice, legislative requirements and input from employees and other stakeholders. The result of the KPIs are used to monitor performance and identify areas that need special attention and follow up by management.

We are committed to be among the safest companies in the energy industry and work systematically to reduce our Total Recordable Incident Rate ("TRIR"). TRIR includes 'lost time injuries' and 'medical treatment injuries'. The scope of our TRIR reporting includes Odfjell Technology employees and supervised contractors. Please find key insights and performance evaluation in the appendix of this report.

Our people strategy is to attract, develop, retain, and inspire the best talent in the energy industry and to be the preferred employer of choice, while fostering a global culture built on courage and belonging. After all, it is our people who will ultimately help us achieve our vision of supporting the energy transition.

Safeguarding our workforce through secure employment has positive effects on our ability to maintain high levels of competency, promote our workplace culture as a great place to work, and continuously attract new talent. Consistency in our workforce enables employees to focus on core business activities in a safe manner and dedicate time for competency development.

It is the Group aim to offer full-time secure employment as broadly as possible. This practice adds stability within the employee base which in turn grows competency development and creates new opportunities for career development. (This practice supports UN Sustainability Goal 8) However, we also accommodate requests for part-time work to meet the needs of our employees. 

Contractors and temporary personnel are used periodically to supplement the workforce resources required due to fluctuations of a temporary nature. Often contractors are people with specialised skills required for projects of a short-term nature. The number of contractors is not significant.

The assurance of inclusion, non-discrimination, and equal opportunities help us develop an attractive workplace where a variety of ideas and solutions can be promoted, positively influencing attitudes and perceptions, and contributing to a strong Group brand. The Group shall comply with all relevant regulations.

Our focus on inclusion, non-discrimination, and equality is reflected in our recruitment policies, promotion practices, development of personnel, and our operating model. The purpose of our policies and approach is to positively influence management behaviour and promote a culture of inclusion. Expectations of leadership are clarified through policies, procedures and leadership training programmes. Diversity and non-discrimination declarations are included in a wide range of procedures in our Company Management System ("CMS") and our website.

Ensuring more opportunities for women at all levels of leadership throughout the organisation, along with participation in our talent and development programmes, have been targeted activities in 2023. With a goal of 40% women in mid-level management positions by 2026, we continue to monitor our workforce planning targets, pay practices, competence development and recruitment processes.

The Odfjell Technology Women’s Network ("OTWN") is sponsored by the EMT and creates forums for women to network broadly across the organisation. In 2023, the OTWN held events in Bergen, Stavanger and Dubai. Looking ahead, the OTWN are planning to hold events in Aberdeen and Manila.

*Mid-level management level 3-5

Competence assurance is key to our operational efficiency, the health and safety of our employees, and confidence from our clients and the broader public. Our clients and employees trust that we work diligently to ensure a healthy place to work through a competent workforce. Competency compliance is a requirement across the industry.

Competence assurance is a critical part of our daily operations and employee safety. Our CMS reflects the management commitment to competency and training reflected in our Competency Policy. All employees are trained in compliance with our CMS and the requirements for each discipline area. All employees have the opportunity to participate in regular development reviews to identify development opportunities, gaps and career paths.

Offshore leaders have the widest reach of impact for our workforce as most of the Group’s personnel are offshore. The Group invested in a new Competence Assurance Management System ("CAMS") in 2022, with full offshore implementation and roll-out in 2023. This included in-depth training in the competence assurance tools to all supervisors in the offshore organisations. The successful implementation has been verified though client and authority audits.

In accordance with our People Strategy targets, the Group implemented targeted career path competency progression for engineers. Practical management training was increased, and leadership and development programmes were initiated on a broader scale. These programmes continue into 2024.

The Group monitors competency and training through documented activities in our Competency Assurance, ERP and Learning Management Systems ("LMS"). Gaps in competency are identified through monitoring of competence matrices, annual development reviews and CAMS/LMS data. Please find key insights and performance evaluation in the appendix of this report.

The Group is committed to respecting and upholding the right of freedom of association and collective bargaining. Good faith negotiations, transparent processes, and mutual respect are opportunities to maintain stable, safe, and predictable operations. We believe that the opportunity for collective bargaining aids in promoting positive working conditions and ensuring health and safety. The right to collective bargaining creates an environment of trust and predictable operations for our employees and customers alike. The Group also looks to impose the same requirements upon our business partners through our supply chain verifications and frame agreements.

Most of the Group’s workforce is in Norway and the UK where trade unions and employers’ organisations have existed for more than 100 years. Legislation, collective agreements and Group practices have developed and formed a system of comprehensive worker’s rights and privileges. 100% of our Norwegian employees onshore and offshore are covered under tariff agreements negotiated with unions, regardless of the employees’ union membership.

In other parts of our organisation where legislation and collective bargaining is not available, we have policies and procedures to ensure the best practices for employee well-being. The Group ensures standard global salary review processes each year, as well as updated health insurances and pension agreements to ensure commensurate treatment in each of our locations.

Odfjell Technology is committed to the highest ethical standards, and to operating with honesty, fairness and integrity. We recognise the importance of being transparent with our stakeholders and promoting a culture built on courage. To achieve this, our leaders lead by example - they set the right tone for all to follow, emphasising our commitment to business ethics.

Odfjell Technology has a zero tolerance approach to bribery and corruption.

Our approach to business conduct starts with the Code of Conduct ("COC"), which sets out our expectations of our employees in relation to ethics and compliance.

The COC, approved by the CEO, is supported by a comprehensive set of internal policies and procedures. The main policies within this focus area include:

▪the Ethical Principles*

▪Human Rights Policy*

▪Modern Slavery Statement*

▪the Group's Core Values*

▪Social Responsibility Principles**

▪Corporate Governance Policy**

▪the Competition Compliance Procedure**

* Approved by the Board ** Approved by the CEO

All the above-mentioned policies are anchored at corporate level in the CMS and are applicable for the entire Group in all its activities. The policies are actively used in the risk review processes related to tenders and procurement, and form an important foundation for all our operations. The policies are communicated to potential business partners, and included in training for employees.

Odfjell Technology’s Ethical Principles highlight the material elements from the other policies. All of the policies are to be followed in both spirit and letter. The CEO is responsible for the overall implementation of the policies within the Group, while all Business Area leaders and line managers are responsible for implementation within their division/line. Everyone in Odfjell Technology has a personal responsibility to work in a way that respects the policies and to encourage others to do so too.

Detailed guidance to assist with upholding the policies is included in the COC. In addition, the Compliance Officer and General Counsel may always be contacted for guidance.

Please find key insights and performance evaluation in the appendix of this report. 

The Group holds regular information and training sessions to promote compliance with applicable laws, rules and regulations. This includes applicable laws relating to insider trading and anti-corruption laws relating to bribery and corruption.

The COC is covered in an e-learning course in our HR training portal. All new personnel are required to complete the COC course as part of on-boarding. Through procedures and training tools, Odfjell Technology seeks to ensure that all personnel are aware that any suspicious activity, particularly in relation to bribery and corruption, must be reported.

The Group holds its suppliers and agents to the same standards of integrity.

Anti-corruption policies are included in the COC, and apply to all directors, employees and representatives of Odfjell Technology. The COC requires compliance with all applicable laws, as well as the OECD convention on anti-bribery and the United Nations declaration of human rights. Failure to know and follow the COC may result in disciplinary action. We expect suppliers, contractors, consultants and others who are temporarily assigned to perform work for us, to follow the Ethical Principles and COC. Failure to do so may result in termination of their contract.

Personnel shall annually report and confirm compliance with the COC.

All clients, contractors, suppliers, agents and other third parties are subject to risk assessments according to Odfjell Technology requirements, including corruption risk assessments, to ensure that the risks are known, understood and acceptable. Prior to any form of commitment, entering into agreements, or placing orders (excluding minor purchases) with new unknown third parties, a series of risk assessments is conducted.

The suppliers/third parties are categorised based on type of transaction/agreement, geographical area of operation, residing jurisdiction based on Transparency International's Corruption Perception Index, and type of corporation. The risk category determines the process for evaluating a supplier/third party.

A potential high risk supplier/third party requires detailed integrity due diligence to be performed by the Compliance Officer.

The CRC is part of the Group’s tender, procurement and operational review process. CRC ensures that tenders, client contracts, and procurements exceeding a certain value and/or with a certain risk profile, are subject to a risk assessment, including integrity risk.

The purpose of the CRC process is to:

▪identify overall business exposure and opportunities

▪ensure early warning of risks

▪arrange for risk mitigation and opportunity optimisation

▪establish recommendations and actions

▪contribute to lessons learned across the Group

A CRC process is always required in countries with a score lower than 40 on Transparency International's Corruption Perception Index.

The Group had book equity of NOK 1,077 million and a book equity ratio of 29% as of 31 December 2023. The Board regards the Group’s present capital structure as appropriate.

The Company’s long-term objective is to make distributions of net income in the form of dividends, targeting an annual pay-out of 30-50% of its net profit on a consolidated basis. The payment of dividends will depend on several factors, including market outlook, contract backlog, cash flow generation, capital expenditure plans and funding requirements. It is dependent on maintaining adequate financial flexibility, as well as restrictions on dividend payments under Bermudan law and financial covenants, along with other relevant factors.

Pursuant to Bermudan law,, the Board has wide powers to issue any authorised but unissued shares of the Company on such terms and conditions as it may decide. Any shares or class of shares may be issued with preferred, deferred, or other special rights, or restrictions with regard to dividend, voting, return on capital, or otherwise, as the Company may prescribe. This is a deviation from section 3 of the Code.

However, such issuance of shares is subject to prior approval by resolution of a General Meeting. Pursuant to Bermudan law, the Board also has the power to authorise the Company's purchase of its own shares, whether for cancellation or acquiring as treasury shares, and the power to declare dividends. These powers are neither limited to specific purposes nor to a specified period as recommended in the Code.

The Company has only common shares, which are listed on the Oslo Stock Exchange. Each common share carries one vote, and all common shares carry equal rights, including the right to participate in General Meetings. All holders of common shares are treated on an equal basis.

As is common practice for Bermuda limited companies listed on the Oslo Stock Exchange, no shares in the Company carry pre-emption rights, which is a deviation from section 4 of the Code.

The Board will arrange for a valuation to be obtained from an independent third party in the event of significant transactions between the Company and its shareholders, a shareholder’s parent company, members of the Board, executive personnel, or closely related parties of any such parties. An independent valuation will also be carried out in the event of transactions between companies within the same group where any of the companies involved have minority shareholders.

Employees are required to report potential conflicts via an internal portal which is monitored and escalated to the Board if appropriate.

Any transactions the Company carries out in its own shares shall be either through the Oslo Stock Exchange or at prevailing stock exchange prices if carried out in an alternative way. If there is limited liquidity in the Company’s shares, the Company shall consider other ways to ensure equal treatment of all shareholders.

The Company's constituting documents do not impose any transfer restrictions on the Company's common shares. The shares are freely transferable in Norway, provided, that the Bye-laws include a right for the Board to decline to register a transfer of any share in the register of members, (or refuse to direct a Company appointed registrar to transfer any interest in a share) where such transfer would result in 50% or more of the Company's shares or votes being held, controlled or owned directly or indirectly by individuals or legal persons resident for tax purposes in Norway (or, alternatively, such shares or votes being effectively connected to a Norwegian business activity). The purpose of this is to avoid the Company being deemed a “Controlled Foreign Company” pursuant to Norwegian tax rules. This represents a deviation from section 5 of the Code, but the Board does not foresee that this provision will impact on the free transferability of its shares.

Shareholders may exercise their voting rights in General Meetings, with the Board ensuring that:

▪the notice, supporting documents and information on resolutions to be considered are available on the Company’s website no later than 21 days before the meeting is held

▪the resolutions and supporting documentation are sufficiently detailed, comprehensive, and specific to allow shareholders to form a view on matters that are to be considered

▪the registration deadline, if any, for shareholders to participate in the meeting is set as closely as practically possible to the meeting date and pursuant to the Bye-laws

▪shareholders can vote separately on each candidate nominated for election to the Company’s Board and Committees

▪in accordance with the Bye-laws, the Chair of the Board shall chair meetings unless otherwise agreed by a majority of those attending and entitled to vote. If the Chair of the Board is not present, then a chair shall be appointed or elected at the meeting. This is a deviation from section 6 of the Code

The members of the Board and the auditor did not attend the General Meeting, which is a deviation from sections 6 and 15 of the Code

Shareholders who cannot be present at the meeting will be given the opportunity to vote using proxies. The Company will:

▪provide information about the procedure for attending via proxy

▪nominate a person who will be available to vote on behalf of a shareholder as their proxy

▪prepare a proxy form formulated so that the shareholder can vote on each item that is to be addressed and vote for each of the candidates that are nominated for election

The Company does not have a Nomination Committee, and it is acknowledged that this represents a deviation from section 7 of the Code. Given that the Board consists of non-executive directors, with 75% considered independent, the Board considers itself able to adequately fulfil the roles and responsibilities ordinarily assigned to a Nomination Committee.

When a need arises to appoint a new or additional director, a review of potential candidates will be carried out, considering the need for a diverse mix of skills, talent, and expertise, whilst also being mindful of the importance of independence.

The Board comprised three independent non-executive directors plus the Chair, who is also the majority beneficial shareholder. All Board members are independent of the Group’s Executive Management and three are independent of the Company’s major shareholder.

The Board is comfortable that there is no conflict of interest or compromise to the independence of directors who also serve as directors on the Company's subsidiary boards. The Board has no concerns with external appointments held by the directors. The Chair of the Board is determined in accordance with the Company’s Bye-laws rather than the General Meeting, which is a deviation from the Code.

The Board of Director's section provides further details on each director’s background, skills and expertise.  As of 31 December 2023 the Board consisted of two male and two female directors, three of which are UK resident. They possess the relevant expertise, capacity and diversity as set out in the Code and are elected on an annual basis at the Annual General Meeting. The composition of the Board ensures they can attend to the common interests of all shareholders and function effectively as a collegiate body. 

The Board schedules Board meetings in advance as well as one information meeting. Interim meetings may be convened if required.

The Chair is responsible for ensuring that the Board operates effectively and carries out its duties, with assistance and support from the General Manager and Corporate Secretary.

Meetings are chaired by the Board Chair unless otherwise agreed by a majority of attending directors. If the Chair is not present, the directors shall elect among themselves a Chair. If the Chair has a material interest or involvement in a particular matter to be resolved by the Board, the Board will consider asking another Board member to chair those discussions.

A Board charter is in place which defines matters reserved for decision by the Board, and is equivalent to written instructions on the work of the Board. Delegations by the Board are recorded in Board minutes, resolutions, powers of attorney or service agreements. Subsidiaries and their branches operate within decision-making guidelines, involving the Board in matters of strategic importance to the Group.

The Board is responsible for the Group's value creation and sets the Group's objectives, strategy, and budgets and monitors financial performance and control of assets as wells as risk management. In addition, the Board also monitors and approves internal controls and authorises decisions in matters of an unusual nature or of importance to the Company and the Group.

The Board has appointed a General Manager to undertake day to day management of the Company, overseen and supervised by the Board. Group operational activities are delegated to Odfjell Technology AS with duties and responsibilities defined in a service agreement.

The General Manager, Odfjell Technology AS CEO and CFO are regular attendees at Company Board meetings. The Board maintains oversight of operational activities through a review of reports such as operational and strategic updates, monthly financial reports, QHSSE status reports, tenders and opportunities updates and quarterly and full-year results. Updates on risk and ESG are given throughout the year.

The Board has established an Audit Committee, whose duties include supervising and reviewing the Group’s annual and interim financial reporting. This Committee consists of two Board members, one is considered independent.

The Company has not established a Remuneration Committee, which is a deviation from section 9 of the Code, but it should be noted that no member of Executive Management is represented at the Board. Accordingly, the Board does not consider such committee as necessary as decisions regarding compensation of Executive Management can be decided by the whole Board without executive involvement at Board meetings.

The Board undertook a self-evaluation in December 2023, reviewing results January 2024.

An annual review of directors’ interests is undertaken, and directors are reminded to declare potential conflicts at the start of Board meetings. A register of directors’ interests is maintained.

The Board recognises its responsibility to secure appropriate risk management systems and internal controls.

The Company has comprehensive corporate manuals and procedures for all aspects of managing the operational business. These are continuously revised to incorporate best practice derived from experience or regulatory requirements and changes.

Routines are in place to provide frequent, relevant management reporting on operational matters. The Board is continuously updated on both capital and liquidity and the performance of the business. This ensures adequate information is available for decision-making and allows the Board to respond quickly to changing conditions and requirements.

The Group has established clear and safe communication channels between employees and management to ensure effective reporting of any illegal or unethical activities in the Group, via a whistleblower reporting portal. More information is in the Sustainability Statement.

These measures ensure that considerations related to the Group's various stakeholders are an integrated part of the Group's decision-making processes and value-creation.

The Board also recognises its responsibilities for the Group’s values and guidelines for ethics and corporate responsibilities. Core values reflect the Group’s focus on commitment, safety conscious­ness, creativity, competency, and result orientation. Guidelines for the behaviour of Group representatives are outlined in Odfjell Technology’s Ethical Principles and described in detail in the COC. The core values and COC are available on www.odfjelltechnology.com.

Further information on risk can be read within the Sustainability Statement.

The remuneration of the Board is decided by the shareholders at the AGM. The compensation to the Board reflects the responsibility, expertise, and level of activity in the Board and any Committees. Remuneration is not linked to Group performance and no share options are granted to Board members. More detailed information can be found in the Executive Remuneration Report.

None of the members of the Board and/or companies with whom the Board members are associated, have taken on assignments in 2023 for the Group, in addition to their appointments.

Pursuant to Bermudan law for Bermuda incorporated companies listed on the Oslo Stock Exchange, the Board determines the remuneration of Executive Management. Details for 2023 can be found in the Executive Remuneration Report.

Guidelines for the remuneration of Executive Management can be found in the Executive Remuneration Policy which is available on our website www.odfjelltechnology.com. This has yet to be approved at a General Meeting, which represents a deviation from section 12 of the Code. The policy uses performance related remuneration by way of a variable bonus capped at 100% of salary, and share option schemes for certain executives. The Remuneration Policy is set to attract and retain Executive Management of sufficient calibre. It also aims to align with shareholder’s interests and the Group’s strategy, long term interests and financial viability.

Currently, the determination of variable bonuses is made by the Board at a holistic level, rather than by analysing detailed components with weightings, criteria, targets and performance achieved ratings and therefore deviates from Section 12 of the Code.

The Company has established guidelines for reporting to the market and is committed to providing timely, precise information to its shareholders, Oslo Stock Exchange and the financial markets in general, through the Oslo Stock Exchange information system. Information is given in the form of annual and quarterly reports, press releases, notices to the stock exchange and investor presentations.

In these communications, the Company aims to clarify its long-term potential, including strategies, value drivers and risk factors. The Company maintains an open and proactive approach for investor relations with detailed investor relations information, and contact information available on the Company website.

An annual financial calendar is published with dates of important events such as the AGM, publishing of interim reports and financial stock market presentations. 

The Company discloses all inside information as legally required, unless exceptions apply and are invoked. Information will be provided about certain events, e.g. dividends, amalgamations, mergers/demergers, changes to the share capital, issuing of subscription rights, convertible loans and all agreements of major importance that are entered into by the Company and related parties.

The Company has considered communication with shareholders to ensure relevant information is shared with them in compliance with applicable laws and regulations. Shareholders can communicate with the Company through Q&A sessions on quarterly calls.

Information to the Company’s shareholders is posted on the Company’s website as well as published through Oslo Stock Exchange.

The Company will follow key principles from the Code for how to act in the event of a take-over offer. In such an event, the Board will ensure that the Company’s shareholders are treated equally and that the Company’s activities are not unnecessarily interrupted.

The Board will also ensure that shareholders have sufficient information and time to assess the offer. The Board shall:

▪ensure that the offer is made to all shareholders, and on the same terms

▪not undertake actions intended to give shareholders or others an unreasonable advantage at the expense of other shareholders or the Company

▪strive to be transparent about the take-over

▪not institute measures which have the intention of protecting the personal interests of its members at the expense of interests of the shareholders

▪be aware of the particular duty the Board carries for ensuring that the values and interests of the shareholders are safeguarded

The main underlying principles shall be that the Company’s common shares shall be kept freely transferable and that the Board and the Company shall not establish any mechanisms which can prevent or deter take-over offers unless this has been decided by the General Meeting in accordance with applicable law. This includes only entering into agreements with a bidder to limit the Company’s ability to arrange other bids, if it is in the interests of the Company and its shareholders. Payment of financial compensation to a bidder if the bid does not go ahead should be limited to costs incurred by the bidder.

If an offer is made for the Company’s common shares, the Board shall issue a statement evaluating the offer and making a recommendation as to whether the shareholders should accept. If the Board finds itself unable to give a recommendation, it should explain the reasons for this, being clear whether the views expressed are unanimous, and if this is not the case, explain why specific members of the Board do not concur.

The Board shall consider whether to arrange a valuation from an independent expert. If the bidder is a member of the Board, close associate of a member, has recently been a member of the Board or has a particular personal interest in the bid, the Board shall arrange an independent valuation. This shall also apply if the bidder is a major shareholder. Any such valuation should be enclosed with the Board’s statement or reproduced or referred to in the statement.

The Group have appointed KPMG as the Company auditor, with approval of their reappointment given at the 2023 AGM.

The auditor participates in a meeting of the Board when the annual accounts are presented, during which, the executive personnel leave to allow the Board time with the auditor alone.

Highlights of the audit plan are presented by the auditors to the Audit Committee as well as a review of the Group’s internal control procedures, including identified weaknesses and proposed improvements.

Processes are in place to ensure that the Group does not utilise the services of the appointed auditor for advice beyond certain thresholds determined by the Board and in law. 

At the AGM, shareholders authorise the Board to determine the remuneration of the auditors. Details of fees paid to the auditor for auditing work and for other specific assignments can be found in Note 32 Remuneration to the Board of Directors, key executive management and auditor

Odfjell Technology has five core values that define and instruct our business:

The Group had book equity of NOK 1,077 million and a book equity ratio of 29% as at 31 December 2023.

The Company has only one class of share. Each common share carries one vote, and all common shares carry equal rights, including the right to participate in General Meetings and all shareholders are treated on an equal basis.

The shares and negotiability section of the Corporate Governance Report details the transferability of common shares. The number of ordinary shares issued in Odfjell Technology Ltd. as at 31 December 2023 is 39,463,867

On 27 June 2022, the Company implemented a long term incentive share option plan. A total of 1,995,000 options have been awarded to certain employees at strike prices from NOK 22.31 to NOK 24.13 per share.

The Company is not aware of any shareholder or any other agreements which limit trading of the Company’s ordinary shares or voting rights as at 31 December 2023.

The Company is governed from and tax resident in the UK. Three out of four Company directors are UK residents. The Company has published its tax strategy on its website in compliance with the UK Finance Act 2016 Schedule 19.

The aim of the tax strategy is to support the business by maintaining a sustainable tax rate, while mitigating tax risks and complying with rules and regulations in the jurisdictions in which Odfjell Technology operates.

The Group maintains internal policies and procedures to support its tax control framework and provides training to its personnel to manage tax risks.

The tax strategy aligns to the Group's wider risk and control framework with key tax risks and issues escalated to and considered by the Audit Committee and the Board regularly.

The Group operates in approximately 26 countries and is exposed to a variety of tax risks such as compliance and reporting, transactional and reputational.

Where appropriate, the Group looks to engage with tax authorities to disclose, discuss and resolve issues, risks, and uncertain tax positions. The subjective nature of global tax legislation means it is often not possible to mitigate all known tax risks. As a result, the Group may be exposed to financial and reputational risks arising from its tax affairs.

The Group acknowledges its responsibility to pay the level of tax required by the laws of the jurisdictions in which it operates and also its responsibility to its shareholders to structure its affairs in an efficient manner.

The Group seeks to comply with its tax filing, reporting and payment obligations globally and to foster good relationships with tax authorities.

During 2023, Odfjell Technology has continued to focus on building a strong foundation for the Group in its first full year. The Group is positioning itself for growth internationally with Well Services, securing contracts with Operations and growing the competency and capacity of Projects & Engineering. Entering new regions such as Canada, Namibia and Indonesia has been achieved during the year. There has also been a strong focus on cash generation and this has allowed us to commence regular cash disbursements to shareholders via dividends.

We are positioned for growth in a strong market. An increase in investments and activity is vital to bridge the increasing energy demand, as new energy sources take time to implement. There is an increased appetite for field development and production spending across the regions we operate in.

We have established a strong presence in the North Sea with efficient operations and strong client relationships, which provides opportunities for the provision of Well Services and Projects & Engineering deliverables. We see opportunities to grow in the decommissioning P&A area, particularly in the UK.

The engineering market is improving both in existing deliverables and in green initiatives, and we are well positioned to grow in both areas.

We continue to target strategic new market entries where clients or contracts support establishing business in new geographies.

With the move to sustainable energy sources, we continue to review opportunities to diversify into renewables or other emerging energy markets. Our skills and experience lend themselves to certain areas, and already we have a commitment to offshore wind through our investment in and support given to Odfjell Oceanwind, including providing engineering design services.

The Group is developing a Sustainability strategy and reporting framework, with a focus on creating clear sustainability ownership in Business Areas and functions.

Our Human Rights Statement can be found on our website - Human rights - Odfjell Technology, as well as our Modern Slavery Statement.

Gender pay gap reporting for Norway and the UK, can also be found at Gender pay gap - Odfjell Technology. For details on Executive remuneration, please refer to our Executive Remuneration Report.

More detail on these matters can also be read in our Sustainability Statement.

Odfjell Technology reports in accordance with the EU Taxonomy Regulation (2020/852), including the supplementing Disclosures Delegated Regulation (2021/2178). The CFO function is responsible for the taxonomy report and underlying assessments.

Odfjell Technology had no taxonomy eligible economic activities in 2023. The assessment of eligibility was conducted based on the described activities in the Climate Delegated Regulation (2021/2139). The basis of the assessment was the total revenue, capital expenses and operating expenses for Odfjell Technology in 2023. The assessment was done by members of the corporate management, finance function and internal and external stakeholders and subject matter experts on our sector. Assessment of alignment with the taxonomy was not relevant for 2023 reporting.

The Group closely follows developments within the taxonomy reporting requirements. In 2024 the main focus will be to expand the assessment of eligible activities to the Environmental Delegated Regulation (2023/2486). The Group will continue doing assessments to identify eligible activities, especially in relation to new operations and investments.

Well Services provides the most up to date technology available for hands-free tubular running operations, high specification drilling tubulars and market-leading downhole tools. In addition, we have a vast inventory of equipment and our in-house engineering is highly specialised in the development of new technology.

Our business has a global presence with 15 offices and operating bases servicing contracts in around 26 countries, positioning Well Services as a leading provider in our industry. With approximately 290 clients worldwide, we service a range of sectors, mainly oil and gas, but also including hydrogen and geothermal.

2023 has seen growth in the business with entry into new geographical markets such as Canada, Namibia and Indonesia.

Operations secured further firm backlog in 2023 with contract extensions and the exercising of options. Collaboration across all Odfjell Technology Business Areas is key to delivering value to clients, and we work in a number of alliances. We continue to provide integrated drilling services including onshore support, production drilling and completion, well maintenance, facility maintenance planning and plugging and abandonment which is a service we will see growing in the near term.

Projects & Engineering continue to build their competency to offer a range of services including feasibility and concept studies, Front End Engineering Design ("FEED"), pre-FEED, subsea services and integrity and inspection. Our differentiator is our close link to operations which means we bring an operational perspective to the process, defining scope, designing the engineering solution and managing the project execution and installation. Our Energy Efficiency service assists asset owners to map energy consumption and carbon emissions and provides advice on how to reduce these through changes in processes, technology etc.

More detail regarding the activities of each business segment can be found in the Our Business section.

We are well positioned for growth in a strong market in 2024. Our ambition is to increase our global footprint with Well Services, entering new geographies as we have in 2023, and focussing on high margin product lines.

The solid backlog in Operations gives us predictability and the opportunity to increase our integrated services provision to current clients.

Projects & Engineering activity on Special Periodic Survey ("SPS") will continue in 2024 with support being given to a number of assets as they go through their five yearly recertification. This is an area we have extensive expertise in.

The energy transition is key to the future of all, but there is a gap between the supply of renewable energy and demand. Oil and gas is therefore expected to remain a vital part of the energy mix in the foreseeable future, with the key word being "transition". Odfjell Technology will focus on using our expertise to contribute to the move towards renewable energy. We continue our close association with and investment in Odfjell Oceanwind to develop mobile offshore wind.

Across all our Business Areas, we see growth potential in the UK decommissioning market, as infrastructure comes to the end of its operational life. More than 2,000 wells in the UK are likely to be permanently abandoned over the next decade and P&A represents a significant proportion of decommissioning spend. Our culture of being adaptable, innovative and focussed on continual improvement will stand us in good stead in the transitioning energy market.

(Comparable figures in brackets)

Odfjell Technology generated operating revenue of NOK 5,021 million (NOK 3,885 million), an increase of NOK 1,136 million. There is increased revenue in all the segments from 2022 to 2023, mainly related to new contracts and higher activity.

Earnings before interest, tax, depreciation and amortisation ("EBITDA") was NOK 840 million (NOK 673 million), an increase of NOK 167 million. The main contributors to the increase are Well Services and Projects & Engineering.

The operating profit ("EBIT") amounted to NOK 492 million (NOK 384 million), an increase of NOK 108 million. The main contributors to the increase are Well Services and Projects & Engineering. The increased EBIT in the segments are partly offset by increased overhead costs.

Net financial expenses amounted to NOK 136 million (NOK 138 million).

The income tax expense was NOK 17 million. In 2022 the income tax expense was positive NOK 27 million mainly due to utilisation of unrecognised tax losses in relation to group contribution received from the Odfjell Drilling Group in Q1 2022.

Net profit for the Group was NOK 344 million (NOK 253 million). Total comprehensive income was NOK 392million (NOK 403 million).

Consolidated total assets as at 31 December 2023 amounted to NOK 3,695 million (NOK 3,115 million), an increase of NOK 580 million, affected by the non-current tax asset, refer to Note 8 Income taxes for further information.

Total non-current assets amounted to NOK 1,834 million (NOK 1,466 million). Current assets amounted to NOK 1,860 million (NOK 1,648 million), of which NOK 659 million was cash and cash equivalents (NOK 560 million).

Total equity amounted to NOK 1,077 million (NOK 779 million) and the equity ratio was 29% (25%).

Total liabilities amounted to NOK 2,618 million (NOK 2,336 million), an increase of NOK 282 million mainly due to the liability to repay Odfjell Drilling Ltd in relation to the tax case in Norway, refer to Note 8 Income taxes.

Net interest bearing debt amounted to NOK 440 million (NOK 780 million), a decrease of NOK 340 million due to the repayment of the Rolling Credit Facility ("RCF") and increased cash and cash equivalents.

Cash flow from operating activities amounted to NOK 698 million (NOK 568 million). The variance of NOK 206 million from EBIT in 2023 is mainly explained by depreciation, amortisation and impairment, offset by net interest paid.

Net cash outflow used in investing activities amounted to NOK 222 million (NOK 2,705 million). The 2023 cash outflow was mainly due to purchase of Well Services equipment and a mandatory convertible loan of NOK 18 million paid to Odfjell Oceanwind AS.

Net cashflow from financing activities amounted to an outflow of NOK 395 million (inflow of NOK 2,200 million). The 2023 outflow relates to repayment of the USD 25 million RCF, payment of dividends of NOK 100 million and repayment of lease liabilities.

The Group makes estimates and assumptions concerning the future. These are based on the underlying business, its current and forecast profitability over time, expectations about external factors such as interest rates, foreign exchange rates and other factors outside the Group’s control.

There is estimation uncertainties in the Group's revenue recognition, determination of expected economic life and in the assessment of impairment loss in the trade receivables. There is use of significant judgement in the Group's recognition of deferred tax asset for carried forward tax losses, considerations related to contingent liabilities, and determination of lease terms.

Please refer to note 3 - Critical accounting estimates and judgements in the Consolidated Financial Statements for further information.

Operating revenue was NOK 1,779 million(NOK 1,365 million), an increase of NOK 414 million. Growth in the year has come from entering new markets (Namibia and Canada), delivering on contracts secured in 2022 and recovery in our traditional markets, most notably western mainland Europe.

EBITDA was NOK 625 million (NOK 485 million), an increase of NOK 140 million. EBITDA margin for the Well Service segment was 35% (36%). Although the driver for the growth is from our product lines that carry a lower margin, this has been partly offset by continued growth in higher margin product lines and a focus on cost efficiencies.

EBIT for the segment was NOK 322 million (NOK 226 million).

Operating revenue was NOK 2,382 million (NOK 1,972 million), an increase of NOK 410 million. This is mainly explained by increase in activity, compared to 2022, related to management of the jack-up rig Linus for SFL Corporation Ltd and volume increase for Rig Inspection Services.

EBITDA for the Operations segment was NOK 176 million (NOK 185 million), a decrease of NOK 9 million. The EBITDA margin was 7% (9%).

EBIT for the segment equals EBITDA.

Operating revenue was NOK 607 million (NOK 357 million), an increase of NOK 250 million. Activity has been high for the entire year. Q1 and Q2 was mainly driven by yard stay activities on the Deepsea Mira and Hercules, and the modification work on the FSU Heidrun B has had high activity for the whole year. After the yard stays the activity on Odfjell Drilling’s SPS portfolio has picked up.

EBITDA for the segment was NOK 94 million (NOK 44 million), an increase of NOK 50 million. The EBITDA margin was 16% (12%). The increase is mainly explained by higher activity, resulting in increased volume, utilisation and margins compared to last year.

EBIT for the segment equals EBITDA.

The business of the Parent Company, Odfjell Technology Ltd., is as a holding company for investments in subsidiaries.

The Parent Company reported an operating loss (EBIT) of NOK 18 million (NOK 23 million). The improvement from 2022 is mainly due to reduced legal fees and financial assistance.

The Parent Company reported a share of profit from joint venture Odfjell Oceanwind of NOK 5 million (share of loss of NOK 19 million).

Net financial expenses were NOK 148 million (NOK 134 million). There was an increase in interest expenses of NOK 43 million, partly offset by NOK 20 million in reduced currency losses and increased interest income of NOK 9 million.

A net loss of NOK 161 million (NOK 176 million), was reported.

Total assets in the Parent Company amounted to NOK 3,043 million (NOK 2,691 million) as at 31 December 2023, an increase of NOK 352 million, mainly related to current receivables and cash and cash equivalents.

Equity in the Parent Company amounted to NOK 675 million (NOK 931 million), corresponding to an equity ratio of 22% (35%).

Cash flow used in operating activities was NOK 148 million (NOK 109 million) The variance of NOK 131 million from EBIT is mainly explained by interest paid.

Cash flow used in investing activities was an inflow of NOK 705 million (outflow of NOK 1,030 million). The company received NOK 307 million as a prepayment from Odfjell Drilling Ltd related to the tax case in Norway. The Company also had proceeds from the current cash pool of NOK 416 million, while NOK 18 million was spent on an extension to the mandatory convertible loan to the joint venture.

Cash flow from financing activities was an outflow of NOK 369 million (inflow of NOK 1,340 million). The Company repaid borrowing of NOK 269 million and made dividend payment of a total of NOK 100 million.

The Group provides services primarily for the oil and gas industry, which historically has been cyclical in its nature. The focus on alternative energy sources and the transition to greener energy sources is expected to impact the energy market in the coming decades. However, there is an increased appetite for field development and production spending across the segments as we bridge the gap while moving to renewables.

The Group seeks to mitigate these risks by securing contracts with reputable clients, preferably long term, for its services. All offshore contracts are associated with risk and responsibilities, including technical, operational, commercial, and political risks.

Factors that, in the Group’s view, could affect its results materially, include: volatile oil and gas prices, global political changes regarding energy composition, competition within the oil and gas services industry, changes in clients’ spending budgets and developments in the financial and fiscal markets.

The Group is exposed to a range of financial risks discussed below. The financial risk management process carried out at a Group level, focuses on the unpredictability of financial markets and seeks to minimise potential adverse effects on the Group’s financial performance. To some extent, the Group uses derivative financial instruments to reduce certain risk exposures.

The Group identifies, evaluates and hedges financial risks in close co-operation with the Group's operational units. The Board has established principles for risk management of foreign exchange risk, interest rate risk and use of derivative financial instruments.

The Group's objective is to maintain a balance between continuity of funding and flexibility through the use of credit facilities, and to have sufficient cash or cash equivalents at any time to be able to finance its operations and investments in accordance with the Group's strategic plan. More details can be found in Note 21 - Liquidity Risk

Odfjell Technology held cash and cash equivalents amounting to NOK 659 million in addition to available drawing facilities of NOK 254 million at the end of 2023, which is deemed sufficient funding for the Group’s current activity levels and committed capital expenditures during 2024.

The Group's refinancing risk is low, with a bond loan maturing in February 2026 and a rolling credit facility of USD 25 available until the same quarter.

Operating in circa 26 jurisdictions, Odfjell Technology do from time to time receive enquiries from authorities about compliance related matters. Refer to Note 27 - Contingencies regarding notice of a decision received 1 October 2021 from His Majesty's Revenue and Customs in the UK which has been appealed. The Group has at 31 December 2023 not received any other formal material assessment which is not disclosed in the financial statements.

This is the risk of a change in market prices and demand, as well as changes in currency exchange rates and interest levels. The contract backlog provides a level of security for the near future and more details can be found in Note 22 - Market Risk.

The Group operates internationally and is exposed to risk arising from exposures to currency fluctuations, primarily with respect to USD and NOK. The Group seeks to minimise these risks through natural hedging by balancing the currency in and out flow and will use financial hedging instruments if required.

The Group's exposure to the risk of changes in market interest rates relates primarily to the Group's senior secured bond, based on NIBOR, and the RCF based on USD Secured Overnight Financing Rate. The Group evaluates the level of interest rate hedging based on assessment of total interest rate risk and currently has a combination of fixed and floating interest rates in order to limit exposure. The Board considers interest payment hedging of the external financing and mandates administration to execute necessary changes.

Including interest rate swaps entered into, the fixed-rate portion of the Group’s interest bearing debt as at 31 December 2023 is 35%.

The current main market for the Group’s services is the offshore oil and gas industry, and clients consist primarily of major international oil companies, independent oil and gas producers and government owned oil companies. The Group performs ongoing credit evaluations of clients and generally does not request material collateral. Credit risk is considered to be limited.

Included in the Trade receivables as at 31 December 2023 is an outstanding amount of EUR 4 million - circa NOK 45 million, from clients in Iran. An impairment loss of EUR 0.7 million -circa NOK 7.5 million, has been accrued for these trade receivables as at 31 December 2023, more details can be found in Note 23 - Credit risk.

Sustainability risks are considered in day to day operations, as well as at an enterprise risk level and in line with new legislative requirements.

There are robust processes in place to assess QHSSE risks and mitigating actions. Human rights risk registers are maintained and evaluations carried out during new country entry. Sustainability is considered in CRC reviews.

During 2023, efforts were concentrated on the upcoming CSRD and gaps in our data reporting framework.

Following an assessment of climate risks and opportunities, both physical and transitional risks in the short, medium and long term, were prioritised.

The most significant transition risks identified, along with mitigating actions were:

▪increased resources, skills and tools required to measure, track and report on climate data, leading to increased costs. In house expertise being developed, gap analysis being conducted, and software tools evaluated.

▪impact on the ability to attract and retain talent, increasing costs. Training programmes to be reviewed and increase focus on communicating our sustainable activities.

▪changes in consumer behaviours reducing the demand for oil and gas and therefore revenue. To be addressed through diversification of our client portfolio and services to support the energy transition.

▪cost of and access to capital may go up as banks move to low carbon portfolios, leading to increased interest costs. Consider green funding resources for investments and diversify to low carbon portfolio.

The most significant physical risks identified, along with mitigating actions were:

▪impact of extreme weather offshore on crew and equipment logistics could increase costs and result in downtime. Critical spares analysis and robust planning required, as well as protection in commercial contracts.

▪heat, floods and tropical storms may increase in certain geographies we operate in, damaging infrastructure and increasing costs. Business continuity plans, remote working and reviews of locations required to address risk.

▪heat stress will impact employees and equipment working outside in certain locations. Health tracking and storage of equipment to be monitored.

More detail on these risks can be found in the Sustainability Statement.

Odfjell Technology has a group insurance policy for the liability of the Company’s and its subsidiaries’ Directors and Officers. The insurance covers personal legal liabilities including legal costs for defence. The limit of liability is NOK 75 million per claim and in aggregate per year.

The financial statements have been prepared on the basis of the going concern assumption and the Directors have confirmed that this was realistic at the time the accounts were approved and is covered in Note 2 - Basis for preparing the consolidated financial statements.

When assessing the going concern assumption, the Directors and management have considered cash flow forecasts, funding requirements and order backlog. Taking all relevant risk factors into consideration, the Board has a reasonable expectation that the Group has adequate resources to continue its operational existence for the foreseeable future.

There have been no events after the balance date with material effect for the financial statements ended 31 December 2023.

Items in the statement above are disclosed net of tax. The income tax relating to each item of other comprehensive income is disclosed in Note 8 - Income Taxes.

The accompanying notes are an integral part of these financial statements.