Enwa AS Deutschland

Enwa AS Deutschland

Königswinter

Befreiender Jahresabschluss zum Geschäftsjahr vom 01.01.2023 bis zum 31.12.2023

ENWA WATER TECHNOLOGY AS

Sandefjord/Norwegen

gem. §325a HGB

Director's Report

Annual Financial Statements

- Profit and Loss Account

- Balance sheet

- Cash Flow Statement

- Notes

Audit's Report

Directors Report 2023

Enwa Water Technology AS

Organisation No: 981.335.961

1. Type operations

Enwa Water Technology (WTAS) operates a water treatment business. Most of the revenue is derived from the sale of EnwaMatic®, the Company's patented water treatment system for water-borne heating and cooling, and sales of water treatment solutions to businesses in the Maritime and Aquaculture sectors, although sales of other water treatment solutions are also on the increase, to both the Maritime and Oil and Gas sectors. The Company's operations have been aimed principally at the Norwegian market, but with steadily growing sales internationally. The Company has a division in the UK and one in Germany, as well as a company in Denmark and a company in the USA, both of which handle sales in these markets, either via staff hired in from other Enwa companies or through agents.

Enwa's business activities are based in the Company's premises in Sandefjord, Norway, in Coalville in the UK, and in Hennef in Germany.

2. Prerequisite for continuing operations

In accordance with Section 3-3 of the Norwegian Accounting Act, the Board of Directors confirms that the annual accounts have been prepared on a going-concern basis.

3. Working environment and number of employees

In the Board's opinion, the working environment is good.

4. External environment

The focus of the Company's operations is water treatment and purification and energy saving on an environmentally-friendly basis. The Company's operations do not give rise to any pollution, discharge or emissions which could harm the environment.

5. Full equility and no descrimination

Of the Company's 40 employees, 9 are women. As at 31.12.2023, the company's board of directors consists of 2 people, both men. The employees have no representatives in the board. Men and women are assessed equally for new employment, based on the same criteria and the same requirements for qualifications.

6. Gender balance

WTAS is keen to ensure that there is no discrimination based on gender, religion, race, political persuasion, philosophy, or other non-occupational criteria, and will therefore select the most suitable job applicant, regardless of who they are.

Should individual groups be under-represented among the employees, this is exclusively because there have not been sufficient qualified applicants from these groups for the advertised positions.

7. Part-time and involuntary part-time

The company has 2 employees in part-time positions, 1 of whom is a woman, and 1 is a man. It appears from the survey work carried out in the form of employee appraisals that the reason for the part-time positions is based on the individual employee's wish. The company strives to meet employees wishes as regards position proportionality.

8. Wage survey

The average annual salary in the company for 2023 was:

Average annual salary broken down by position level is as follows in 2023:

Generally speaking, wage variations are due to the type of job, seniority and productivity. The company's policy is to pay the same wage for the same work, but seniority will also be rewarded, as loyalty to the company has its own intrinsic value.

In WTAS the picture is complicated further by its structure. The company has employees in the UK and Germany in addition to Norway. The proportion of women is highest in the UK, particularly in categories where the market wage in the UK is significantly lower than in Germany and Norway.

9. Activity obligation

Fair play and equal opportunities for all have always been important considerations for the company, and the board is therefore certain that there are no systemic factors that cause problems in these areas. In the annual employee appraisals, this type of problem has also been the subject of discussion, and no factors have emerged to suggest that the company should do anything other than continue with its present approach.

10. Handling of the law on transparency

The company has drawn up a procedure for the assessment of due diligence in accordance with the Transparency Act. The purpose of this is to promote basic human rights and decent working conditions. Suppliers of goods and services to the company must confirm in writing that the provisions of the Transparency Act are complied with. The company has the right to view documentation from suppliers that underpins the requirements of the Transparency Act.

A review of the due diligence assessment will be made annually, and the report will be published on the company's website by 30.06.2023.

11. Statement regarding annual financial statements

Turnover is distributed as follows: in Norwegian Krone;

The turnover in Norway is characterised by central invoicing of projects in the Maritime, Aquaculture and Oil and Gas sector, as well as the hiring of personnel to the Swedish sister company Enwa Water Technology AB. The core activities are servicing and the sale of parts from the division in Vikedal, while the divisions in the UK and Germany sell and provide servicing on EnwaMatic, both are with good results.

The company has decided to close down its operations in Denmark, as the market can be handled from Sweden, but the USA division is under consideration. There are no employees there.

Cash flow from operating activities totalled NOK 15,4 million. The difference from the pre-tax result of NOK 6,5 million was mainly due to the changes in inventory, client receivables and supplier debt, and also other accruals.

The Profit and Loss Account and Balance Sheet with accompanying notes, provide, in the Board's opinion, a full and comprehensive view of the Company's operation and financial position in general at the end of year 2023.

The Company's turnover also leaves cash in Enwa Water Technology AB (through the production of EnwaMatic® and Reverse Osmosis (RO) systems).

12. Outlook

The division has coped well with the Covid period, and although society is not yet 'back to normal', Covid as such, is not expected to have any significant negative impact. The effect of an escalation and spillover of the conflict in the Ukraine is also unpredictable for WTAS. The year has had an excellent start for all divisions.

13. Events from the beginning of the year

There have not been any events that have significantly affected the company since year start.

14. Financial Risk

The existing risks are generally handled as follows:

Currency: For major purchases/sales in foreign currency, future contracts are used in consideration of net exposure, where the whole of the group's portfolio is evaluated.

Apart from the ongoing operations, the company has an exposure to GBP, through an equity of around NOK 72 million in the UK division as at 31.12.2023 and an exposure to EUR of around NOK 5,4 million against the division in Germany. Any fluctuations in these currencies will affect the company's equity.

Market risk: Ongoing assessments are carried out of the Company's exposure within the various segments.

Credit risk: Risk-reducing financial instruments are used in respect of major contracts, outstanding receivables are monitored regularly and ongoing deliveries are assessed, in order to reduce the risk of payment default. However, for the largest customers, the risk is more related to willingness, rather than ability, to pay and in consequence, we place our focus on compliance with contractual terms and specifications to ensure this.

Liquidity risk: The liquidity situation is monitored on a weekly basis.

15. R&D

EnwaMatic® and also other products are subjects of continuous, incremental improvement.

16. Allocation of profit

The Board proposes that the annual profit of NOK is allocated as follows:

Movements in equity are as follows:

Profit and Loss Account

Income Statement

Balance sheet as of December 31

Cash Flow Statement

Notes to the Accounts for 2023

Note - 1 Accounting Policies

The annual financial statements are prepared in accordance with the Norwegian Accounting Act and good accounting practices.

Subsidiaries and investment in associate

Subsidiaries are measured in the Company's separate financial statements according to the cost convention. The investment is measured at the cost of the shares unless it has been necessary to write down the shares. The value has been written down to net realisable value when the impairment is for reasons which cannot be assumed to be temporary and it is considered necessary according to generally accepted accounting principles. Write-downs are reversed when the basis for the write-down no longer exists.

Dividends and other pay-outs are recognised as income in the same year as provision is made for them in the subsidiary's accounts. If the dividend exceeds the share of the retained profits after the purchase, the excess portion represents a payback of invested capital, and the pay-outs have the value of the investment deducted in the balance sheet.

Sales revenue

Sales of goods are recognised as income at the date of delivery. Services are recognised as income as they are performed. The share of sales revenue connected with future service performance is recognised on the balance sheet as deferred income at the time of sale, and then recognised as income as the services are performed.

Classification and measurement of balance sheet items

Current assets and liabilities comprise items falling due within one year after the balance sheet date, and items connected with the circulation of goods. Other items are classified as fixed assets/long-term debt.

Current assets are measured at the lower of cost and net realisable value. Current debt is recognised on the balance sheet at a nominal amount at the date of establishment.

Fixed assets are measured at cost, but written down to net realisable value if the impairment is not expected to be temporary. Fixed assets with a limited economic life are depreciated according to a depreciation schedule. Long-term debt is recognised on the balance sheet at a nominal amount at the date of establishment.

Debtors

Trade debtors and other debtors are recognised on the balance sheet at nominal value less provision for anticipated losses. The provision is made on the basis of individual measurement of each debtor. In addition, an unspecified provision is made for any losses anticipated for the remaining trade debtors.

Stocks

Stocks of purchased goods are measured individually at the lower of purchase cost on a FIFO basis and net realisable value. Where necessary, obsolete stocks are written down.

Construction projects

Work in progress connected with contracts for the purchase of goods made to the buyer's specifications is measured using the percentage-of-completion method with profit. The extent of project completion is calculated as the ratio between accrued project costs and estimated total costs of the project. Total estimated costs are reassessed during the current period. In the case of projects which it is assumed will run at a loss, the entire calculated loss is charged to expense immediately.

Currency / Translation of foreign branches

Monetary items in foreign currency are measured at the rate of exchange ruling at the end of the financial year. Unrealised gains or losses on futures contracts are recognised on the profit and loss account.

For the purpose of translating the Company's foreign branches, the profit and loss account is translated according to annual exchange rates (approximated to the transaction rate), while the balance sheet figures are translated at the rate of exchange ruling at year end for monetary items. Other assets and liabilities that are not to be considered as monetary items are translated at historical cost. All translation differences are recognised directly in 'Other reserves'.

Tangible fixed assets

Tangible fixed assets are recognised on the balance sheet and written off over the expected economic life of the asset concerned. Direct maintenance of tangible fixed assets is taken to expense immediately under operating expenses, while costs or improvements are added to the cost price of the asset and written off over the asset's remaining economic life. If the recoverable amount of the asset falls below its carrying value on the balance sheet, the carrying value is written down to the recoverable amount. The recoverable amount is the greater of the net selling price and value-in-use. Value-in-use is the present value of the future cash flows expected to be derived from the asset.

Leases / leasing

Leases where the significant portion of the risk and return associated with ownership of the asset is not transferred, are classified as operating leases. Lease payments are classified as operating expense and are recognised in the profit and loss account linearly over the period of the lease. The Company has no significant finance leases.

Pensions

The Company operates a defined contribution pension scheme. The premiums carried to expense for the year are included under payroll expenses.

Taxes

The tax charge comprises both tax payable for the period and change in deferred tax. Deferred tax/tax asset is calculated for all differences between the carrying amount and the tax base of the asset or liability. Deferred tax is calculated at a rate of 22% on the basis of the temporary differences between the carrying amount and the tax base of the asset, and on any tax loss carry-forwards at the balance sheet closing date. Net deferred tax assets are recognised on the balance sheet if it is likely that the Company can make use of them. Tax payable and deferred tax are recognised directly in equity to the extent that the tax items relate to equity transactions.

Cash Flow Statement

The Cash Flow Statement is prepared using the indirect method. Cash and cash equivalents consist of cash, bank deposits and other current, liquid investments.

Use of estimates

In preparing the annual financial statements and in accordance with generally accepted accounting principles, the management have used estimates and assumptions which have affected the profit and loss account and the measurement of assets and liabilities, as well as uncertain assets and liabilities on the balance sheet date.

Group cash pooling system

Deposits into and debts on bank accounts that are part of the group cash pooling system are classified as current receivables from/debt to the parent company, Enwa AS.

Note 2 - Construction contracts

Engineering and construction contract revenues are recognised using the percentage of completion method.

The completion rate is calculated as a percentage of the accrued project costs and estimated total costs for the project.

There are no on-going projects as 31.12.23.

Note 3 - Sales revenue

Note 4 - Related party disclosures

Related parties are companies in the Enwa Water Treatment group. Inter-company transactions are ordinary sale and purchase transactions, hire of labour and sundry cost allocations. The transactions are based on ordinary market prices.

Sales of goods directed at group undertakings in 2023 totalled NOK 39.322.247 and purchases of goods from group companies totalled NOK 66.926.476. The company is re-invoiced for rent, accounting services and other services from group undertakings. This has given rise to expenditure of NOK 1.623.699 in 2023 which is reported as 'Other operating expenses'.

Note 5 - Payroll expenses, number of employees, loans to employees and auditor's fees

In the financial year, the company employed a total of 40 full-time staff.

The Company has a statutory obligation to operate an occupational pension scheme under the Act on Mandatory Occupational Pensions. The company's pension schemes satisfy the requirements of this Act.

Remuneration and benefits to senior executives

All auditors' fees are exclusive of VAT.

^*) The amount for auditing services includes auditing of the branches in the UK and Germany, as well as compiling the accounts and notes, comprising a total amount of NOK 284.046.

Note 6 - Tangible fixed assets

Note 7 - Intangible assets

Enwa Water Technology AS has started a project to further develop EnwaMatic ^®. The development is partially funded via Innovasjon Norge's tax credit scheme. The project will be discontinued in 2022 and there will be no future benefits or gains.

Note 8 - Lease Agreements

Note 9 - Foreign exchange gains and losses

In 2023 the Company recognised NOK 2.191,702 in foreign exchange gains and NOK 3.576,332 in foreign exchange losses under financial items.

Foreign exchange gains relate to the purchase and sale of services in EUR, GBP, USD and SEK, as well as loans and debts to group undertakings in EUR and GBP.

The currency effect arising from translation of foreign branches is carried directly in 'Other reserves'. See note 11.

Note 10 - Tax

Explanation of why the tax cost for the year does not constitute 22 % of the result before tax

^*) Tax cost in relation to result before tax

Note 11 - Equity

Note 12 - Pledges and guarantees

Recorded provision for warranty liability NOK 0 as at 31.12.2023.

Collateral in group account scheme:

The company's accounts receivable, inventory and operating accessories are pledged as security for other companies in the group. The security is limited to a maximum of NOK 105,000,000 for each of receivables, inventory and operating accessories, a total of NOK 315,000,000 in Danske Bank. The security is limited to a maximum of NOK 150,000,000 for each of receivables, inventory and operating accessories, a total of NOK 450,000,000 in SpareBank1.

Note 13 - Stocks

Note 14 - Combined items in the accounts

Note 15 - Intercompany balances with group undertakings and associates

Enwa Water Technology AS holds operating accounts that are included in the Enwa Water Treatment group's group cash pooling system which is administered and at the disposal of the parent company, Enwa Water Treatment AS. This means that, formally speaking, bank deposits are receivables from the parent company and drawings on credit connected with the group cash pooling account are, formally speaking, debt to the parent company. All group undertakings belonging to the group cash pooling system are jointly and severally liable for the drawings the Enwa Water Treatment group has made, to a maximum of NOK 105,000,000 for each of the debtors, stocks and operating equipment, in total NOK 315,000,000 in Danske Bank. The security is limited to a maximum of NOK 150,000,000 for each receivables, inventory and operating accessories, a total of NOK 450,000,000 in SpareBank1.

Note 16 - Bank deposits

Enwa Water Technology AS has a bank guarantee for tax deductions due, up to NOK 550,000. Otherwise, the company has no tied-up capital.

Note 17 - Share capital and shareholder information

The share capital consists of:

The Company's shareholders at 31.12.:

The Company is a subsidiary of Enwa Water Treatment AS. Consolidated financial statements are prepared for Skion Water International GmbH, the parent company of Enwa AS.

The consolidated financial statements are available on request from Enwa AS.

Note 18 - Subsidiaries, associated companies etc.

^*) The company has limited operations and is recognised NOK 0 in the accounts.

Minutes Ordinary General Meeting Report ENWA Water Technology AS

Date: 01.03.24

Time: kl. 10.30

Place: Norde Kullerød 9, Sandefjord

Those present:

Flemming G. Wessman

Jørn Heier

Matters to be discussed were:

1. Approval of the convening

The convening was approved. 100% of the shares were represented.

2. Election of chair and 2 people to sign the minutes.

Jorn Heier was elected as the chair. Flemming G. Wessman and Jørn Heier were elected to sign the minutes.

3. Approval of the income statement and balance sheet, including discussion of the result for the year.

It was resolved that the result for the year of NOK 5,828.451 should be allocated as follows:

4. Remuneration to the Board

It was resolved not to pay the Board any remuneration.

5. Remuneration to auditor

Payment of the auditor's remuneration in accordance with the invoice was approved.

6. Election of the Board

Flemming Wessman was elected chair of the Board and Jorn Heier was elected member of the Board, both for a period of 2 years.

To the Annual General Meeting of Enwa Water Technology AS

Independent auditor's report

Conclusion

We have audited Enwa Water Technology AS's annual accounts, which show a profit of NOK 5.828.451. The annual accounts consist of the balance sheet as of 31 December 2023, the profit and loss account and a cash flow statement for the accounting year ended on this date and notes on the annual accounts.

In our opinion:

Basis for the conclusion

We conducted our audit in accordance with International Standards on Auditing (ISAs). Our tasks and accounting principles are in accordance with these standards are described below under Auditors tasks and duties in auditing the annual accounts. We are independent of the company, as required by law and regulations and the International Code of Ethics for Professional Accountants (including international independence standards) issued by the International Ethics Standards Board for Accountants (IESBA rules), and have complied with our other ethical obligations in accordance with these requirements. In our opinion, the audit evidence gathered is sufficient and appropriate to provide a basis for our audit conclusion.

Other information

The board and the general manager (management) are responsible for the information in the annual report. Our conclusion on the annual accounts above does not cover the information in the annual report.

In connection with the audit of the annual accounts, it is our task to read the annual report. The purpose is to assess whether there is a significant inconsistency between the annual report and the annual accounts and the knowledge we have acquired during the audit, or whether it contains to be materially incorrect. We have a duty to report if the annual report appears to be materially incorrect. We have nothing to report in this respect.

Based on the knowledge we have obtained from the audit, we believe that the annual report

The Management's responsibility for the annual accounts

The Management is responsible for preparing the annual accounts and for ensuring that they give a true picture pursuant to the rules of the Norwegian Accounting Act and good accounting practice in Norway. The Management is also responsible for the internal control it finds necessary to be able to prepare annual accounts that do not contain significant incorrect information, as a result of either malpractice or unintentional errors.

In preparing the annual accounts, the Management must take a view on the company's ability to continue its operations and inform of any factors of significance for continued operations. The annual accounts shall be based on the assumption of continued operations as long as the business is not likely to be wound down.

The auditor's tasks and obligations in the auditing of the annual accounts

Our aim is to achieve reasonable certainty that the annual accounts as a whole do not contain significant incorrect information, as a result of either malpractice or unintentional errors, and to submit an annual report that contains our conclusion. Resonable certainty is a high degree of certainty, but no guarantee that an audit carried out in compliance with the ISAs, will always reveal any significant incorrect information that exists. Incorrect information may arise as a result of malpractice or unintentional errors. Incorrect information is assessed as significant if it can reasonably be expected, individually or collectively, to affect the economic decisions the users make on the basis of the annual accounts.

For a further description of the auditor's tasks and obligations, refer to:

https://revisorforeningen.no/revisjonsberetninger