Annual Report

2023

Table of content 3
About IWS 4
Organisation 6
Shareholder Information 10
Letter from the CEO 12
Board of Directors' Report 16
Statement of Responsibility by the Board and the CEO of Integrated Wind Solutions ASA 26

IWS ANNUAL REPORT 2023 3

Consolidated Income Statement 30
Consolidated Statement of Comprehensive Income 30
Consolidated Statement of Financial Position 31
Consolidated Cash Flow Statement 32
Consolidated Statement of Changes in Equity 33
Notes to the Consolidated Financial Statements 34
Parent Company Income Statement 74
Parent Company Statement of Financial Position 75
Parent Company Cash Flow Statement 76
Parent Company Statement of Changes in Equity 77
Parent Company Notes to the Financial Statements 78
Auditor's Report 90
Environmental, Social and Governance (ESG) 96
Corporate Governance 102
Alternative Performance Measures 107

About IWS

Integrated Wind Solutions ASA ("IWS") is a leading offshore wind service provider that aims to integrate construction and service operation vessels (CSOVs) with engineering, product and manpower services in a windfarm's installation, commissioning, and operations phase.

The strategy of IWS is to provide a fleet of state-ofthe-art service vessels to the offshore wind-industry, combined with a range of complementary services, to reduce the levelised cost of energy ("LCOE") for the offshore wind sector.

We strive to prove that the offshore wind business is a powerful place to invest and a safe place to work.

Integrated Wind Solutions was established in July 2020 by the Awilco group and listed on Euronext Growth (Oslo) on 25 March 2021. The Awilco group offers more than 80 years' experience from projects and operations in shipping and offshore.

IWS conduct its businesses through i) IWS Fleet, ii) IWS Services, and iii) Peak Wind.

IWS FLEET

Through its wholly owned subsidiary, IWS Fleet AS, the Group has placed orders for a fleet of six CSOVs, the first of which has been delivered, and five of which are still under construction at the leading and reputable Chinese shipyard, China Merchants Industry Holdings Co., Ltd. The vessels are based on the leading UT5519DE design by Kongsberg Maritime. The first vessel, IWS Skywalker, commenced operations in late first quarter of 2024. The second, third and fourth vessels, IWS Windwalker, IWS Seawalker and IWS Starwalker, are scheduled for delivery from the yard in late Q1, and two in Q3 2024, respectively. IWS Fleet will take delivery of vessels five and six, IWS Moonwalker and IWS Sunwalker, in Q1 and Q2 2025.

IWS SERVICES

Through its subsidiary, IWS Services A/S ("IWS Services"), the Company manages a portfolio of services and solutions for the offshore wind industry. By integrating commissioning and service operation vessels with engineering, product, and manpower services in a windfarm's installation, commissioning, and operations phase, IWS Services aims to be a leading offshore wind service company.

The two main investments in IWS Services are i) the 75% ownership in ProCon Group, a Danish engineering, construction, and service solution provider specialised in electrical and technical solutions for the global renewable industry, with a focus on offshore and onshore wind, and ii) the 100% owned Green Ducklings A/S, a Danish specialised offshore wind advisory firm that provides tailored industry support to authorities, developers and supply chain companies.

PEAK WIND

IWS owns 30% of Peak Wind, the leading independent provider of operations and asset management advisory and services for global offshore wind. IWS has a fixed-price option to increase its ownership to 49% (pre-dilution from share-based option program to key employees) by September 2024. PEAK Wind is headquartered in Aarhus, Denmark and has a global footprint.

Management

Lars-Henrik Røren

Chief Executive Officer

Mr. Røren has been the CEO in Integrated Wind Solutions ASA since March 2021. He has 30 years of experience from the Investment Banking and Asset Management Industry with a particular focus on Energy Markets. He has previously held several senior positions, latest as Head of Equities in Formue AS, Head of Equity Capital Markets and Head of E&P research in SEB Markets, Investment Director in SEB Wealth Management Norway, and Chair of the Board of Nordic Aquafarms AS. He holds an MSc in Economics from Copenhagen Business School. Mr. Røren is a Norwegian citizen.

Christopher Andersen Heidenreich

Chief Operating Officer

Mr. Heidenreich has close to 20 years of experience from managing offshore and shipping assets. He was part of the founding team of Fred. Olsen Windcarrier in 2008 and was heavily involved in the development of the offshore wind segment until 2014 when he took the position as Managing Director at Awilco Technical Services. He also has experience from Knutsen OAS and V.Ships. Mr. Heidenreich holds an MSc in Naval Architecture and Marine Engineering from Norwegian University of Science and Technology (NTNU). Mr. Heidenreich is a Norwegian citizen.

Marius Magelie

Chief Financial Officer

Mr. Magelie has been the CFO in Integrated Wind Solutions since February 2022. He has 16 years of experience from ship-leasing and investment banking. He held several senior positions and most recently served as Senior Vice President Finance & Investor Relations at Ocean Yield, where he was employed since 2014. Prior to Ocean Yield, Mr. Magelie was Partner in the Nordic investment bank ABG Sundal Collier. He has a Master of Science degree in Financial Economics from the Norwegian Business School. Mr. Magelie is a Norwegian citizen.

Board of directors

Sigurd E. Thorvildsen

Chair and Non-Executive Director / Remuneration Committee

Mr. Thorvildsen is the CEO of the Awilhelmsen Group. He has more than 30 years of experience from the shipping and offshore industry. He has previously held several senior positions, among them the position as CEO of Awilco AS. Mr. Thorvildsen is the Chair of the Board of Directors of AWC AS (New Industrial Investments), Linstow AS (Real Estate), Awilco AS and Awilco Drilling PLC (shipping and offshore). He holds an MSc in Business and Economics from the Norwegian School of Management. Mr. Thorvildsen is a Norwegian citizen.

Jens-Julius R. Nygaard

Non-Executive Director / Audit Committee

Mr. Nygaard is the CEO of Awilco AS. He has close to 20 years of experience from shipping and investment companies through various positions in the Awilco group of companies and is a member of the board of Awilco LNG ASA. Mr. Nygaard has a BA Honours in Finance from Strathclyde University and an MSc in Shipping, Trade & Finance from Bayes Business School. Mr. Nygaard is a Norwegian citizen.

Cathrine Haavind

Non-Executive Director / Remuneration Committee

Mrs. Haavind is Head of Strategic Planning and Corporate Communications in the Awilhelmsen Group. She has more than 15 years' experience with strategy processes, stock exchange rules for listed companies, Board work and investor relations. Before joining the Awilhelmsen Group in 2010, she was investor relations manager of Awilco Offshore ASA and worked 10 years as a management consultant at PWC Consulting and IBM. Mrs. Haavind holds an MSc in BA from Université de Fribourg, Switzerland. Mrs. Haavind is a Norwegian citizen.

Daniel Gold

Non-Executive Director / Remuneration Committee

Mr. Gold is the founder and CEO of QVT Financial LP ("QVT"), an asset management company with offices in New York and New Delhi. QVT, through its managed funds, is an experienced global investor in the shipping and offshore industries. Mr. Gold is a board member of Awilco Drilling Plc. Mr. Gold holds an AB in Physics from Harvard College. Mr. Gold is an American citizen.

Synne Syrrist

Non-Executive Director / Audit Committee

Mrs. Syrrist has experience as an independent consultant for Norwegian companies and as financial analyst for Elcon Securities ASA and First Securities ASA. She has extensive non-executive experience from both listed and private companies and is among others currently a member of the boards of Awilco LNG ASA, Naxs AB and ABL Group ASA. Mrs. Syrrist holds an MSc from NTNU and is a Certified Financial Analyst (AFA) from NHH. Mrs. Syrrist is a Norwegian citizen.

Shareholder Information

IWS ANNUAL REPORT 2023 10

20 LARGEST SHAREHOLDERS (AS PER 27.03.2024)

Shareholder	Number of shares	Ownership in %
Awilco AS	15 430 999	39.4
Clearstream Banking S.A	10 552 267	27.0
State Street Bank and Trust Company	2 780 021	7.1
Skandinaviska Enskilda Banken AB	1 871 074	4.8
Danske Invest Norge Vekst	1 774 358	4.5
J.P. Morgan SE	1 333 672	3.4
Verdipapirfondet Nordea Norge Verdi	1 229 064	3.1
Must Invest AS	667 798	1.7
Skeie Kapital AS	535 303	1.4
Verdipapirfondet Nordea Avkastning	456 913	1.2
Wieco AS	350 060	0.9
Verdipapirfondet Nordea Norge Pluss	240 075	0.6
Verdipapirfondet Nordea Kapital	177 130	0.5
Millennium Falcon AS	156 250	0.4
J.P. Morgan SE	150 000	0.4
Emkay Invest AS	135 606	0.3
Bergen Kommunale Pensjonskasse	120 017	0.3
Skyfri Vol2	103 439	0.3
J.P. Morgan SE	101 284	0.3
Xfile AS	100 000	0.3
Sub-total	38 265 330	97.8
Other shareholders	878 928	2.2
Total	39 144 258	100.0

IWS ANNUAL REPORT 2023 11

Letter from the CEO

Integrated Wind Solutions ASA ("IWS") has developed significantly since the initial public offering in March 2021. Let me briefly summarise what we have achieved over the past three years that has transformed IWS into the company it is today.

Established our vessel offering company, IWS Fleet, and ordered six interchangeable Skywalker class CSOV (Commissioning Service Operation Vessels) newbuildings at CMIH
Established our supply-chain services business, IWS Services, with headquarter in Aarhus, Denmark
Acquired a controlling stake in the electrical and technical solutions company ProCon
Acquired the strategic consultancy and advisory firm Green Ducklings
Invested in the leading independent provider of operations and asset management advisory and services for global offshore wind firm PEAK Wind
Raised gross proceeds of NOK 1.4 billion in equity, divided into three rounds
Secured green bank loans for our first four vessels under construction, with bank financing for the last two vessels expected to be secured in 2024
Secured a firm backlog of more than 2,000 charter days for our CSOV newbuildings with Tier 1 clients like Siemens Gamesa, Dogger Bank, Asso.subsea, and TenneT
Entered into a commercial and strategic joint venture with Havfram for the technical management of the two Wind Turbine Installation Vessels (WTIVs)

TURNING OUR ATTENTION TO VESSEL OPERATIONS

Our first Skywalker class CSOV, the IWS Skywalker, was delivered in late 2023. Until then, the primary focus of IWS Fleet was to ensure good quality and timely progress for our six vessels under construction at the CMIH shipyard in China.

In 2023, the focus gradually shifted towards preparing the IWS Fleet organisation for an imminent operational phase. An excellent job has been done to staff and establish the organisation, both on land and at sea, to be fully prepared to deliver on the important charter contract obligations we have undertaken safely and effectively. By the end of 2023, we were well-placed to handle all aspects of what operating our ships will entail. We will deliver a total of four vessels into operation by the end of 2024, which will be a transformative year for IWS Fleet, with well-established plans and routines already in place.

WE HAVE TIME FOR SAFETY

Whilst 2024 will be a transformative year with the start of vessel operations and delivering our charter obligations, safety is always in focus in all our plans and decisions.

Our ships will have our own employees, the client's employees, and occasionally third parties on board. Each of these individuals trusts IWS to deliver a safe place to work. In full operation, our fleet will annually carry out thousands of walk-to-work transfers between wind turbines and our ships via the gangway system. These operations take place in a range of weather conditions, and our responsibility is to ensure that the activities are performed to the highest safety standards.

In the days before New Year's Eve, we redirected IWS Skywalker to sail south of Africa on its transit to Europe due to the escalated situation in the Red Sea, instead

of the shorter route through the Suez Canal as initially planned. In our risk assessment, we never doubted that it was best for the safety of the crew and the other people on board to reroute and accept the extra 2-3 weeks of additional transport time.

We have time for safety, which is embedded throughout our organisation. It's that simple.

GREATER THAN EVER FOCUS ON GREEN ENERGY

When you read the newspapers, watch the news, or scroll through social media, you can quickly get the impression that there are doubts about developing green energy as an industry and investment option. We, and most industrial players, do not share this perception.

On the contrary, the current fundamentals suggest the opposite. Government ambitions have never been higher, and this year will see the highest value and capacity of new awards of offshore wind areas in terms of developers' spending and the number of GWs awarded. The aim is to increase the speed of the green shift, including supporting the development of as much offshore wind as possible at the lowest possible cost per MW installed and as quickly as possible.

That said, even high ambitions and an ample supply of capital do not protect this industry from issues like supply-chain bottlenecks and some delays in regulators issuing project approvals. However, the ruling trend is that green energy is crucial to achieving a green transition. Hence, it's not a question of if, but of how soon.

The rapidly growing need for service vessels and supply-chain products, people, and tech services remains a risk to industry timelines.

IWS is prepared to service the future of the green transition by delivering on " our part every day!

SUPPLY-CHAIN RECOVERY AND GROWTH

2022 and 2023 were challenging years for offshore wind companies due to rising interest rates and inflationary pressure on key components that ruined project economics. From Q4 2023 onwards, we have, however, seen a clear change in direction. Projects that were earlier put on hold are again live and put into a project timeline with the ambition to reach the final investment decision stage within a reasonable time.

We see the same activity pick-up for our supply-chain service business under the IWS Services umbrella. After delivering an almost flat revenue development for 2023, we expect both companies under IWS Services, ProCon and Green Ducklings, to have significant revenue growth in 2024. We also expect several years of good activity development for IWS Services backed by strong signals in the industry that activity within the development of offshore wind farms is increasing. Offshore wind is now no longer a European industry, but increasingly a global one, which gives us confidence in the strength and duration of the improved industry trend.

PEAK Wind, the consultancy and asset management firm, continues to grow, and 2024 will be the seventh consecutive year with annual revenue growth above

20%. PEAK Wind currently has ten offices in eight countries and is set to open at least one new office in a new country later this year.

We are confident that IWS Services and PEAK Wind will deliver record-high revenues this year.

POSITIONED FOR SUCCESS

IWS is a growth company, and the industry we operate within has plenty of growth segments. We have invested heavily over the past three years and will continue to do so, at least through our current newbuilding program. Whilst capital expenditure continues, the ratio of capex versus operating cash flow will gradually improve over the coming years, and we forecast that 2024 will be the first year of generating a net profit for the IWS Group.

Combining the IWS Fleet CSOV business and our supply-chain services business through IWS Services makes IWS unique. We will continue to build and protect our business going forward, and 2024 will be another step towards our vision to become a leading integrated offshore wind service company. We are well underway to achieve that position in the CSOV space, and through PEAK Wind and ProCon, we have powerful global positions within their respective business areas.

The Green Ducklings team is somewhat more concentrated geographically for now, although we will see them establish a presence outside of Europe in the coming year.

The business environment within the offshore wind industry is favourable. We will strive to deliver on the trust that our clients, banking partners, and investors have given us. IWS is focused on improving our clients' probability of success in the offshore wind industry by providing CSOVs, electrical works, offshore wind and renewables consultancy, advisory, and operations & asset management services.

Our great employees and partners will work hard to deliver on this mindset in 2024, as they did in 2023. IWS is prepared to service the future of the green transition by delivering on our part every day!

Best regards,

Lars-Henrik Røren Chief Executive Officer

Board of Directors' Report

IWS ANNUAL REPORT 2023 16

IWS ANNUAL REPORT 2023 17

Board of Directors' Report

BUSINESS SUMMARY

Offshore wind

Europe continues to lead the way towards greater renewable energy adoption. High political ambitions combined with improved market conditions are currently driving the strong growth of the offshore wind industry. According to our estimates (Green Ducklings), European offshore wind will obtain a total of 107 GW installed capacity by 2030, implying a CAGR of 19%. APAC (excluding China) is expected to become the secondlargest region, with a target of 18 GW by 2030, followed by the Americas with 13 GW.

2023 concluded as a record year in terms of new offshore wind projects going into operation, with a 40% increase from 2022. In Europe, 4.2 GW of new capacity was commissioned, notably driven by efforts in The Netherlands, France, and the UK. A key project, the Hollandse Kust Zuid in the Netherlands was central to this development and is currently recognised as the world's largest offshore wind farm. 2023 also saw a record level of final investment decision ("FIDs"), with over 12 GW of projects reaching financial close globally (excluding China). Notably, Europe contributed 9 GW to this total, highlighting the region's active participation in the sector's expansion.

The surge in FID activity has yielded beneficial outcomes, especially by stimulating investments in supply chain development. This enhancement in the supply chain is expected to enable further growth by relieving existing constraints and facilitating smoother operations.

Another significant outcome of the strong FID activity has been a buildup of firm orders for offshore wind turbines. This trend is steering major Original Equipment Manufacturers (OEMs) towards profitability. For instance, Vestas closed 2023 with a modest profit, while Siemens further reduced its losses. Furthermore, the increasing number of offshore turbines is expected to drive demand for installation and commissioning vessels, along with the need for operations and maintenance (O&M) services.

While several recent trends indicate a positive trajectory, the industry continues to grapple with factors such as high interest rates, supply chain bottlenecks, and wavering political commitments. To navigate these hurdles, European developers are seen temporarily adjusting their strategic scopes, specifically by shifting their focus towards core markets. Despite these shifts, the overall outlook for offshore wind in Europe remains largely unaffected, according to Green Ducklings.

Considering the industry's development, marked by a rise in both the complexity and quantity of projects, supply chain companies and service providers are

favourably positioned. Within this segment, IWS stands out with its comprehensive service offering, including a fleet of state-of-the art CSOVs, the extensive expertise of IWS Services, as well as the advisory and asset management services provided by PEAK Wind.

Operations

For IWS Fleet, IWS Skywalker was successfully delivered on 12 December 2023 and commenced operations in late March 2023. IWS Windwalker was delivered in the first quarter of 2024.At the year-end 2023, IWS Windwalker was, along with the remaining four CSOV newbuildings, IWS Seawalker, IWS Starwalker, IWS Moonwalker, and IWS Sunwalker under construction at CMIH. The IWS Seawalker and IWS Starwalker were launched on 30 October 2023 and are scheduled for delivery later in 2024. The first steel cut for IWS Moonwalker and IWS Sunwalker was completed on 10 December 2023. IWS has a full site-team in place to ensure quality control and satisfactory progress.

IWS Services is meeting expectations and performing well after the acquisitions in 2021 of the two Danish offshore wind service/consulting companies ProCon Group AS and Green Ducklings A/S. IWS Services strengthened its order back log in the second half of the year and is wellpositioned for solid growth in 2024.

PEAK Wind, in which the Company has a 30% ownership stake, is growing strongly. PEAK Wind is a leading independent provider of operatorship and asset management advisory and consultancy services for offshore wind globally and supplements IWS' strategy of offering a broad range of services to the offshore wind industry.

CONSOLIDATED FINANCIAL STATEMENTS

Corporate information

Integrated Wind Solutions ASA (the "Company" or the "Parent Company") was incorporated 23 July 2020 and has its registered office at Støperigata 2, 0250 Oslo, Norway. The Parent Company and its subsidiaries makes up Integrated Wind Solutions Group (collectively "IWS" or the "Group").

Operating revenue, operating expenses, and depreciation charges

Total revenue for the Group in 2023 was EUR 23.0 million (EUR 21.7 million in 2022), of which IWS Services contributed EUR 22.3 million (EUR 21.3 million in 2022) and IWS' share of net profit in PEAK Wind contributed EUR 0.4 million (EUR 0.4 million in 2022).

Operating expenses for 2023 totalled EUR 25.6 million (2022: EUR 23.6 million), giving EBITDA for the year EUR -2.6 million (EUR -1.8 million in 2022).

Depreciation and amortisation of EUR 0.6 million in 2023 (EUR 0.6 million in 2022) includes depreciation of rightof-use assets and amortisation of acquisition-related intangible assets.

Financial items

Full-year net financial income for 2023 was EUR 2.2 million (EUR 0.2 million in 2022) and includes interest income of EUR 1.0 million (2022: EUR 0.2 million), a fair value gain of EUR 1.2 million on the option to acquire additional shares in PEAK Wind (2022: nil), and finance expenses of EUR 0.2 million (2022: 0.4 million) primarily in IWS Services. The net foreign currency exchange gains are caused by bank deposits, accounts receivable and accounts payable denominated currencies other than the functional currency.

Net gain on foreign currency hedges is reported under Other comprehensive income and totals EUR 1.6 million net of tax effects for 2023 (EUR 2.2 million in 2022).

Tax expense, net result and earnings per share

Total tax expense for the year was EUR -0.2 million (EUR -0.1 million in 2022) and relates to the Group's activities in Denmark. No deferred tax assets are recognised for the activities in Norway.

Net loss for the full year was EUR 1.2 million (EUR 2.5 million in 2022).

Earnings per share is presented in Note 17 to the consolidated accounts.

Financial position

The carrying value of the Group's six vessels under construction amounts to EUR 95.7 million as of 31 December 2023 (EUR 50.7 million for the first four vessels as of 31 December 2022) and includes yard instalments and accumulated directly attributable project costs and borrowing costs during the construction period. Details on the payment structure of the newbuilding contracts are found in Note 10 of the financial statements.

Other fixed assets of EUR 1.7 million include office and vehicle leases (2022: EUR 0.3 million). Intangible assets of EUR 6.2 million recognised in the balance sheet at year-end include goodwill and other acquisition-related intangible assets (EUR 6.4 million at the previous year-end).

Other non-current assets of EUR 0.9 million (EUR 0.7 million in 2022) relate to borrowing costs, paid on the Green Senior Secured Credit Facility, that are amortised over the term of the facility and capitalised as borrowing costs during the period of construction of the vessels.

Contract assets and trade receivables of EUR 4.4 million and EUR 5.1 million, respectively (EUR 2.9 million and EUR 7.5 million for 2022), consist mainly of work in progress and trade receivables related to construction contracts in IWS Services. Fluctuations are primarily the result of the timing of invoicing.

Total cash and cash equivalents amounted to EUR 31.0 million at year-end, up from EUR 25.6 million at the previous year-end. The net increase is, in addition to the loss for the year and changes in working capital, explained primarily by investments in vessels under construction of EUR 49.1 million financed in part by gross proceeds of EUR 32.1 million from the private placement in January 2023, and partly by the drawdown of debt to finance the delivery of the Group's first vessel. The Group has also received government grants of EUR 0.5 million (EUR 0.8 million in 2022).

IWS signed a EUR 118.7 million Green Senior Secured Credit Facility with SEB, SR-Bank, and Eksfin in the second quarter of 2023. The proceeds of the facility will be used for long-term post-delivery financing of the Group's first two CSOVs. The debt financing corresponds to a leverage ratio of 65% of the contracted yard price for the vessels. The leverage ratio is reduced towards 54% if the vessel's contracted backlog is below a specified level upon delivery from the yard. The drawdown of the facility will be made at delivery from the yard of the respective vessel. The loan has been classified as green by the lenders. The Group has in 2023 drawn down the first tranche of its Green Senior Secured Credit Facility, EUR 28.1 million, as detailed in Note 16 of the financial statements.

Other current liabilities include liability for government grants received but not recognised as a reduction in the cost price of vessels, contract liabilities, and fair value of forward contracts designated as hedging instruments.

After the balance sheet date, the Group has received an indicative term sheet for an expanded facility that also covers the long-term post-delivery financing of the fifth and sixth CSOVs.

Book equity on 31 December 2023 was EUR 123.1 million, and total assets were EUR 160.2 million, giving an equity ratio of 77% at year-end (EUR 97.8 million, EUR 105.4 million and 93%, respectively, as of 31 December 2022).

Cash flow and liquidity

The Group had a negative cash flow from operating activities of EUR 0.7 million in 2023 (EUR 6.2 million in 2022) mainly due to the net loss for the period in combination with a decrease in trade receivables related to ongoing construction projects and increase in trade and other payables.

Net cash used in investing activities was EUR 49.0 million (EUR 43.5 million in 2022). Cash outflow related to CSOVs under construction was EUR 49.1 million (EUR 43.8 million in 2022).

Net cash from financing activities was EUR 57.2 million (2022: 33.8 million). In January 2023, the Group raised gross proceeds of EUR 32.1 million in a private placement. In December 2023, the Group made the first drawdown of its Green Senior Secured Credit Facility, refer to Note 16

At year-end 2023, total cash and cash equivalents amounted to EUR 31.0 million (EUR 23.6 million on 31 December 2022), excluding overdrafts.

PARENT COMPANY FINANCIAL STATEMENTS

The Parent Company's operating income for 2023 was NOK 14.6 million (NOK 8.9 million in 2022) and operating expenses for the year was NOK 43.4 million (NOK 29.3 million in 2022).

Net finance income amounted to NOK 67.0 million (NOK 36.9 million in 2022) out of which currency gains constituted NOK 34.1 million (NOK 27.1 million in 2022) and interest income from group companies constituted NOK 21.6 million (NOK 5.1 million in 2022).

Profit for the year was NOK 36.4 million (NOK 16.8 million loss in 2022).

The Board of Directors proposes that the Parent Company's profit for the period of NOK 36.4 million is transferred to retained earnings and that group contributions of NOK 7.6 million are made to subsidiaries.

Dividends

The Board will propose to the General Meeting scheduled for 7 May 2024 that there will be no dividend distributed for the fiscal year 2023.

PRESENTATION OF ANNUAL ACCOUNTS

The Group's consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS), as adopted by the European Union and the additional requirements of the Norwegian Accounting Act as of 31 December 2023, and are presented in EUR, which has been considered to provide more relevant information about the Group's transactions going forward (2022 consolidated financial statements presented in NOK). The financial statements of the Parent Company have been prepared and presented in accordance with the Norwegian Accounting Act, and are presented in NOK.

GOING CONCERN ASSUMPTION

It is in the opinion of the Board of Directors that the consolidated financial statements for IWS provide a true and fair view of the Group's financial performance for 2023 and 2022 and its financial position on 31 December 2023 and 2022.

The Board of Directors consider the Group to require additional liquidity in 2024, and is assessing alternatives to finance the Group's commitments in the most costefficient way. This includes, but is not limited to, bank financing, lease financing, bond financing, and equity financing.

According to section 3–3 of the Norwegian Accounting Act, the Board of Directors confirms that the financial statements of the Parent Company and the Group have been prepared based on the going concern assumption, and that it is appropriate to make that assumption.

RISK FACTORS

IWS operates as a service provider to the offshore wind industry. For the industry to continue growing, authorities must allow the development of offshore wind farms. For the CSOVs, the charter market has historically been cyclical, and as a consequence, the financial results will vary significantly on a yearly basis.

The key risk factors can be divided into the following three components: market risk, operational risk, and financial risk.

Market risk

Supply and demand risk

The demand for offshore wind services could be affected by delays in offshore wind farm development activity and oversupply of tonnage. Periods of low demand and excess supply intensify the competition which means that the vessels could earn lower day rates.

Developers of offshore wind farms are also experiencing cost inflation, which can impact the overall economics and appetite for developing new wind farms in the medium to long term.

Climate risk

Climate change may impact the Group's business through changes in the operating environment, changes in demand for services, or regulatory changes.

The vessels under construction are equipped to handle harsh weather conditions. However, increased frequency of extreme weather conditions may increase the risk of personal injury or damage to property.

Regulatory changes may include taxation of CO2 emissions or other requirements that would increase the operating costs of the Group or impact the offshore wind market by favouring other green energy sources.

Operational risk

Newbuilding risk

The Group's newbuildings that are under construction at the China Merchants Industry Holdings Co., Ltd. Shipyard in China can be subject to risk that may cause delays at the yard or sub-suppliers, and lead to increased costs. Political conflicts can impact the supply chain for raw materials and components required in the construction of the vessels, or the availability of safe shipping routes, and thereby cause delays.

Charter contract risk

The Group's ability to obtain charter contracts depends on the prevailing market conditions in the industry. If the Group is unable to employ its vessels, revenue will be substantially reduced.

Construction contract risk

The Group's construction activities are dependent on maintaining an adequate order book, which depends on prevailing market conditions in the industry. If the Group is unable to continue to secure additional contracts with customers, revenue will be substantially reduced.

Employees

With the expected strong growth in the offshore wind industry and the global fleet during this decade, there is a risk that IWS will not be able to attract qualified personnel to its operations.

Laws and regulations

The operations and vessels are subject to international laws and regulations, which have become stricter. Changes to laws and regulations may expose the Company to new risks.

War, piracy, and cyber risk

Risk of war, piracy attacks or various forms of cyberattacks could affect the trading and earnings generated by the vessels or income generated by other forms of services.

Financial risk

Financing risk and liquidity risk

IWS is exposed to financing and liquidity risk to finance its commitments. The Group is continuously exploring alternatives to finance its commitments in the most costefficient way. This includes, but is not limited to, bank financing, lease financing, bond financing, and equity financing. The Group will raise external debt on a regular basis for a portion of its investments in vessels, either in the bank market or the bond market. The Group is exposed to the risk of not being able to access external financing.

In June 2023 IWS signed a Green Senior Secured Credit Facility of up to EUR 118.7 million for the financing of the Group's four first CSOVs. The loan agreement contains financial covenants relating to minimum liquidity, working capital, equity ratio and loan to value. After the balance sheet date, the Group has received an indicative term sheet for an expanded facility that also covers the long-term post-delivery financing of the fifth and sixth CSOVs.

IWS monitors monthly liquidity forecasts based on expected cash flows and aims to ensure it has sufficient liquidity and undrawn committed credit facilities at all times to meet its short- and medium-term obligations.

Additional liquidity is needed in 2024, and the Group is exploring the most cost-efficient way to address the requirement. This includes, but is not limited to, bank financing, lease financing, bond financing, and equity financing.

Currency risk

The main companies in the Group have EUR or DKK as the functional currency. Currency risks arise in connection with transactions denominated in currencies other than functional currencies.

The Group may use financial derivatives to reduce the currency risk and has, at year-end 2023, hedged the currency risk on certain construction contracts in IWS Services denominated in USD.

Interest rate risk

The Group has raised financing from debt, and will continue to raise additional debt financing that will increase the Group's exposure to interest rate fluctuations. The Group's Green Senior Secured Credit Facility consists of a commercial facility with variable interest rate, and an Eksfin facility with a fixed rate option. The Group has exercised its fixed-rate option on Eksfin portion of the first tranche of the facility and is exposed to variable interest rates on the commercial portion of the facility.

Counterparty- / credit risk

IWS has inherent credit risk as counterparties may not be able to meet their obligations under construction contracts and long-term charter contracts. To mitigate this risk, the Group assesses the creditworthiness of all significant counterparties and will charter out the vessels and sign material construction contracts with internationally recognised companies.

The Group's cash funds are only deposited with internationally recognised financial institutions which have a high credit rating.

HEALTH, SAFETY AND ENVIRONMENT

Based on the goal of environmental excellence, IWS will continuously strive to minimise the environmental impact of its rendered services and vessel operations. The Group has zero tolerance for environmental spills, emissions of ozone-depleting substances, or unauthorised disposal of any type of garbage or waste in the marine environment.

There is currently no female representation among management in IWS. The Group is aware of this imbalance and aims to improve this ratio in the future. The Company's Board of Directors has two female directors, representing 40% of the Board.

Absence due to illness for employees in the Parent Company was 3% in 2023 (2% in 2022).

Please see the ESG section later in this report for further information about the Company's policies concerning health, safety, and the environment.

BOARD LIABILITY INSURANCE

The Group has a directors and officers (D&O) liability insurance for its non-executive directors and CEO signed with a reputable insurance company.

CORPORATE GOVERNANCE

IWS strives to protect and enhance shareholder equity through openness, integrity, and equal shareholder treatment. Sound corporate governance is a key element in the Group's strategy.

The corporate governance principles of the Company are adopted by the Board of Directors.

Reference is also made to the ESG section later in this report.

OUTLOOK

The outlook for the offshore wind industry has returned to being positive after a turbulent year with increased interest rate levels and supply-chain issues in 2023.

The IWS group of companies is well positioned to take part of this growth within its relevant segments providing CSOVs (IWS Fleet), electrical works and above-waterline services (ProCon), offshore wind market intelligence and supply-chain consultancy (Green Ducklings) and the consultancy & advisory and operations & asset management services of wind farms provided by the PEAK Wind Group.

Our first vessel, IWS Skywalker commenced its first out of three Dogger Bank Wind Farm (UK) contracts in late March 2024. IWS Windwalker will start the charter contract with TenneT after arriving in Europe late in May. Deliveries of IWS Seawalker and IWS Starwalker will follow in Q3 2024, and IWS Moonwalker and IWS Sunwalker are scheduled to be ready for operations in Q2 and Q3 2025, respectively.

The construction and engineering subsidiary of IWS Services (ProCon) mainly works on long-lead contracts, secured 3-12 months in advance. IWS Services strengthened its order backlog in the second half of the year and is well-positioned to achieve revenue growth of more than 20% in 2024.

We expect PEAK Wind Group to continue its strong growth and expand its geographical scope and offerings. PEAK Wind has doubled in size (revenues and staff) over the last two years and foresees continued strong revenue growth of more than 20% in 2024.

IWS Fleet will continue to ramp up operations, with the delivery of three additional vessels in 2024. IWS Fleet will contribute positively towards the Group's net profit from the second half of the year.

Statement of Responsibility by the Board and the CEO of Integrated Wind Solutions ASA

IWS ANNUAL REPORT 2023 26

The Board of Directors and the CEO have today considered and approved the Parent Company's and the Group's financial statements for 2023.

The consolidated financial statements have been prepared in accordance with IFRS as adopted by the EU and additional information requirements as per the Norwegian Accounting Act. The Parent Company's financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway.

We confirm to the best of our knowledge that:

The 2023 financial statements for the Parent Company and the Group have been prepared in accordance with applicable accounting standards.
The information in the financial statements gives a true and fair view of the Parent Company's and the Group's assets, liabilities, financial position and result as of 31 December 2023.
The information in Board of Directors' Report includes a true and fair review of the development and performance of the business and the position of the Parent Company and the Group, together with a description of the principal risks and uncertainties that they face.

Oslo, 18 April 2024

Sigurd E. Thorvildsen Chairman of the Board Jens-Julius Ramdahl Nygaard Board member

Synne Syrrist Board member

Cathrine Haavind Board member

Daniel Gold Board member Lars-Henrik Røren CEO

Consolidated Financial Statements and Notes

IWS ANNUAL REPORT 2023 28

IWS ANNUAL REPORT 2023 29

CONSOLIDATED INCOME STATEMENT

In EUR thousand	Note	2023	2022
Operating revenue	5	22 600	21 344
Share of net profit of associates	12	370	367
Total revenue		22 970	21 711

Cost of materials and other project costs	6	-11 952	-14 046
Payroll and remuneration	7	-10 938	-7 166
Other operating expenses	8	-2 728	-2 345
Earnings before interest, taxes and depreciation (EBITDA)		-2 648	-1 846
Depreciation and amortisation	10/11	-557	-594
Earnings before interest and taxes (EBIT)		-3 205	-2 440

Finance income	9	2 239	156
Finance expenses		-229	-356
Net foreign currency exchange gains		174	260
Net finance income	9	2 184	60
Profit/(loss) before taxes		-1 021	-2 380
Income tax expense	13	-159	-78
Profit/(loss) for the period		-1 180	-2 458
Attributable to shareholders of the Company		-1 299	-2 649
Attributable to non-controlling interests		119	191
Basic and diluted earnings per share (EUR)	17	-0.03	-0.10

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

In EUR thousand	Note	2023	2022
Profit/(loss) for the period		-1 180	-2 458
Other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Cash flow hedge, net of tax effect	20	1 643	2 172
Exchange differences on translation		-5 593	-5 648
Total other comprehensive income/(expense)		-3 950	-3 476
Total comprehensive income/(loss)		-5 130	-5 934
Attributable to shareholders of the Company		-5 330	-6 118
Attributable to non-controlling interests		200	184
		-5 130	-5 934

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

In EUR thousand	Note	31.12.2023	31.12.2022	01.01.2022
ASSETS
Non-current assets
Vessels under construction	10	95 672	50 674	9 077
Other fixed assets	10	1 692	255	192
Intangible assets	11	6 158	6 336	6 817
Investments accounted for using the equity method	12	13 127	12 754	13 109
Deferred tax assets	13	201	161	333
Other non-current assets		915	682	-
Total non-current assets		117 765	70 862	29 528

Current assets
Contract assets	5	4 431	2 904	3 050
Trade receivables	14	5 127	7 504	3 772
Other current assets	14	1 852	583	404
Cash and cash equivalents	15	30 975	23 589	38 931
Total current assets		42 385	34 580	46 157

Total assets		160 150	105 442	75 685

EQUITY AND LIABILITIES
Equity
Share capital	17	7 703	5 758	3 477
Share premium reserve	17	126 809	97 497	63 964
Retained earnings		-14 551	-8 344	-1 421
Non-controlling interests		3 108	2 909	2 624
Total equity		123 069	97 820	68 644

Non-current liabilities
Non-current interest-bearing debt	16	25 658	44	1 428
Deferred tax liability	13	420	290	396
Other non-current liabilities		745	376	47
Total non-current liabilities		26 823	710	1 871
Current liabilities
Trade payables
	20	1 689	1 607	2 768
Current interest-bearing debt	16	4 240	1 621	542
Other current liabilities Total current liabilities	18	4 329	3 684	1 860
		10 258	6 912	5 170
Total equity and liabilities		160 150	105 442	75 685

CONSOLIDATED CASH FLOW STATEMENT

In EUR thousand	Note	2023	2022
Cash flow from operating activities
Profit/(loss) before tax		-1 021	-2 380
Depreciation and amortisation	10/11	557	594
Gain on disposal of property, plant and equipment		-40	-
Net profit from associates	12	-370	-367
Fair value gain on financial instruments	9	-1 200	-
Increase (-)/decrease (+) in trade and other receivables		782	-4 185
Increase (+)/decrease (-) in trade and other payables		763	176
Taxes paid		-165	-
Net cash flow from operating activities		-694	-6 162

Cash flow from investing activities
Purchase of property, plant and equipment	10	-49 059	-43 770
Proceeds from sale of property, plant and equipment		53	-
Dividends received from associate	12	-	244
Net cash flow from investing activities		-49 006	-43 526

Cash flow from financing activities
Proceeds from issue of share capital/minority shareholder	17	32 086	35 175
Equity issue costs	17	-829	-660
Proceeds from (+)/repayment of (-) borrowings and loan fees		25 656	-1 487
Government grants		516	834
Payment of lease liabilities		-274	-45
Net cash flow from financing activities		57 155	33 817
Cash and cash equivalents at the beginning of the period		23 589	38 931
Net increase/(decrease) in cash and cash equivalents		7 455	-15 871
Exchange rate effects		-69	529
Cash and cash equivalents at the end of the period	15	30 975	23 589

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

	Attributable to owners of the Company
		Share					Non
	Share	premium	Hedging	Translation	Retained		controlling	Total
In EUR thousand	capital	reserve	reserve	reserve	earnings	Total	interest	equity
Total equity at 01.01.2022	3 477	63 964	-204	542	-1 759	66 020	2 624	68 644
Profit/(loss) for the period	-	-	-	-	-2 649	-2 649	191	-2 458
Other comprehensive income	-	-	2 122	-5 592	-	-3 470	-7	-3 477
Transfer to vessels under construction 1)	-	-	-804	-	-	-804	-	-804
Transactions with non-controlling interests	-	-	-	-	-	-	101	101
Equity issue	2 281	34 215	-	-	-	36 496	-	36 496
Equity issue cost	-	-682	-	-	-	-682	-	-682
Total equity at 31.12.2022	5 758	97 497	1 114	-5 050	-4 408	94 911	2 909	97 820
Total equity at 01.01.2023	5 758	97 497	1 114	-5 050	-4 408	94 911	2 909	97 820
Profit/(loss) for the period	-	-	-	-	-1 299	-1 299	119	-1 180
Other comprehensive income	-	-	1 509	-5 539	-	-4 030	80	-3 950
Transfer to vessels under construction 1)	-	-	-878	-	-	-878	-	-878
Impact of functional currency change	-	-	-1 593	1 593	-	-	-	-
Equity issue	1 945	30 141	-	-	-	32 086	-	32 086
Equity issue costs	-	-829	-	-	-	-829	-	-829
Total equity at 31.12.2023	7 703	126 809	152	-8 996	-5 707	119 961	3 108	123 069

Hedging reserve is related to the Group's foreign currency hedges, presented net of tax of EUR 0.1 million (2022: EUR 0.0 million). A hedging gain of EUR 0.9 million (2022: EUR 0.8 million) relating to hedge accounting applied to EUR payments for vessels under construction has been transferred to vessels under construction as a basis adjustment upon payment of the hedged yard instalment. 1

Notes to the Consolidated Financial Statements

NOTE 1 CORPORATE INFORMATION

Integrated Wind Solutions ASA is a public limited liability company incorporated and domiciled in Norway. Its registered office is Støperigata 2, 0250 Oslo, Norway. The Company is listed on Euronext Growth at the Oslo Stock Exchange with the ticker IWS.

The consolidated financial statements of the Company comprise Integrated Wind Solutions ASA and its subsidiaries, together referred to as IWS or the Group.

The consolidated financial statements for the period ended 31 December 2023 were authorised for issue by the Board of Directors on 18 April 2024 and will be presented for approval at the Annual General Meeting on 7 May 2024.

NOTE 2 MATERIAL ACCOUNTING POLICIES

Basis of preparation

The consolidated financial statements of IWS have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union and the additional applicable disclosure requirements of the Norwegian accounting act. The consolidated financial statements have been prepared on a historical cost basis, except for liabilities for cashsettled share-based payments and a fixed-price option to acquire additional shares in PEAK Wind which are

measured at fair value, pensions which are measured according to IAS 19 and receivables and payables denominated in foreign currencies which are translated at period-end exchange rates.

The consolidated financial statements are presented in EUR rounded off to the nearest thousands, except as otherwise indicated. The consolidated financial statements have been prepared based on a going concern basis.

The material accounting policies applied in the preparation of these consolidated financial statements are set out below.

Basis of consolidation

The consolidated financial statements include Integrated Wind Solutions ASA and its subsidiaries. The financial statements of the subsidiaries are prepared for the same reporting period as the Parent Company, using consistent accounting policies. All intercompany transactions and balances are eliminated in the consolidation. Subsidiaries are fully consolidated from the date of acquisition, being the date on which the Group obtains control over the subsidiaries and continue to be consolidated until the date that such control ceases.

Revenue recognition

Time charter revenue

The Group's first vessel was not ready for operations before the end of 2023. No charter revenues have thus been recognised in 2023 or 2022. Upon commencement of operations, the revenue recognition will be based on the principles outlined below.

Revenue from time charter contracts is generated from leasing of vessels and provision of services within the wind farm projects, accommodation, victualling, mobilisation, and other sundry services that might be agreed in the contracts. Consequently, a time charter contract consists of a leasing component of the vessel (the bareboat element) and a service component. The service component is within the scope of IFRS 15, whilst the leasing component is within the scope of IFRS 16.

In addition, some contracts will have regulations regarding sundry income, which comprises income for the mark-up on costs recharged to customers, e.g. specific equipment requests made by the customers. Revenue is recognised on consumption or delivery of the requested charter equipment.

Income from contract cancellation fees is based on contractual penalties triggered by the customer's cancellation of contracts and is recognised as income when such fee is certain.

Service Revenue

Engineering fees, service fees, management fees, management-on-hire fees and consulting fees are recognised as services are rendered. Revenue for these types of revenue streams is earned by satisfaction of performance obligations over time as the customer simultaneously receives and consumes the benefits provided as the Group performs.

Construction revenue

Construction revenue is earned over time as the Group's performance creates or enhances an asset that the customer controls as the asset is created or enhanced. Progress towards completion of performance obligations in construction contracts is measured using an input method. The measure of completion is calculated by comparing the cost to date with the total expected cost

to complete. Inputs that do not contribute towards transferring control of goods of services to the customer are excluded from the measure of progress towards completion.

As a practical expedient, no adjustment of the promised amount of consideration is made for the effects of a financing component when payments are made for goods or services in one year or less.

Prepayments from customers for which the service component has yet to be provided are recognised as deferred income (contract liability) and recognised as revenue over the period when services are performed.

Leasing

Right-of-use assets are recorded according to principles as outlined in IFRS 16.

The Group applies recognition exemptions in respect of short-term leases and leases of low-value items.

Foreign currency

The consolidated financial statements are presented in EUR, which is also the functional currency of the Parent Company. Transactions in foreign currencies are recorded at the rate of exchange on the date of the transaction.

Monetary assets and liabilities denominated in foreign currencies are translated at the exchange rate applicable at the reporting date. Realised and unrealised foreign currency gains or losses on monetary items are presented as finance income or finance expense. Nonmonetary items that are measured at historical cost in a foreign currency are translated using the exchange rates applicable at the dates of the initial transactions.

Classification of items in the statement of financial position

Current assets and current liabilities include items that fall due for payment within one year after the reporting date. The short-term part of long-term debt maturing within 12 months after the balance sheet date is classified as short-term debt.

Vessels, vessels under construction and other fixed assets

Tangible non-current assets such as vessels, vessels under construction and other fixed assets are carried at historical cost less accumulated depreciation and impairment losses.

Cost of acquired vessels includes expenditures that are directly attributable to the acquisition of the vessels. Costs related to vessels under construction include all directly attributable costs incurred to bringing the vessel to the location and condition necessary for it to be capable of operating in the manner intended by management. Examples of such costs include supervision costs, site team costs, yard instalments, hedging losses or gains, major spare parts, borrowing costs, legal fees and guarantee fees.

The Group hedges payments of yard instalments where appropriate. Hedging gains or losses are transferred to vessels under construction as a basis adjustment upon payment of yard instalments.

Borrowing costs consist of interest cost and other costs that are incurred in connection with the borrowing of funds specifically for the purpose of vessels and vessels under construction.

Costs of vessels under construction are capitalised, classified as vessels under construction and presented as a tangible asset. The capitalised costs are reclassified from vessels under construction to vessels when the asset is available for its intended use.

The depreciable amount of an asset is calculated as cost less residual value and impairment charges. The residual value is based on the estimated salvage value of the vessel. Depreciation is calculated on a straight-line

basis over the useful life of the assets, and depreciation commences when the asset is available for its intended use. Expected useful lives, methods of depreciation and residual values are reviewed annually and adjusted prospectively, if appropriate. The following estimated useful lives are applied to the respective components of the asset:

Vessels	30 years
Vessel dry-docking	5 years
Other fixed assets	3 – 5 years

Costs related to dry-docking are recognised in the carrying amount of the vessels if certain recognition criteria are satisfied. The recognition is made as the dry-docking is being performed, and depreciation is recognised from completion of the dry-docking until the estimated time to the next dry-docking or overhaul.

Ordinary repairs and maintenance expenses are recognised in the income statement as incurred. Upgrades and material replacement of parts and equipment are capitalised as costs of vessels and depreciated together with the respective component.

Impairment

As many assets do not generate cash flows fully independently of other assets, they are tested for impairment in groups of assets described as cashgenerating units (CGUs). A CGU is the smallest identifiable group of assets that generates inflows that are largely independent of the cash flows from other CGUs. The impairment review of a CGU covers all of its tangible assets, intangible assets and attributable goodwill.

Goodwill acquired in a business combination is allocated to the CGUs or groups of CGUs that are expected to benefit from the synergies of the business combination

Vessels, vessels under construction and other fixed assets are assessed for impairment indicators each reporting period.

If impairment indicators are identified, the recoverable amount is estimated, and if the carrying amount of an asset or CGU exceeds its recoverable amount, an impairment loss is recognised.

Inventory

Inventories are measured at the lower of cost and net realisable value. Cost is determined in accordance with the first-in-first-out principle (FIFO).

Provisions

Provisions are recognised when the Group has a present obligation (legal or constructive) because of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation. Where the Group expects some or all of a provision to be reimbursed, for example under an insurance contract, the reimbursement is recognised as a separate asset, but only when the reimbursement is virtually certain. The expense relating to any provision is recognised through profit and loss net of any reimbursement.

Fair value measurement

Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date, using assumptions that market participants would use when pricing the asset or liability. The Group uses valuation techniques that are appropriate in the circumstances and for which sufficient data are available to measure fair value. All assets and liabilities for which fair value is measured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level of input that is significant to the fair value measurement as a whole:

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

Level 2: Valuation techniques for which the lowest level input that is significant to the fair value measurement is directly or indirectly observable

Level 3: Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable

Share-based payments

For cash-settled share-based payments, a provision is recorded for the rights granted, reflecting the vested portion of the fair value of the rights at the reporting date. The provision is accrued over the period the beneficiaries are expected to perform the related service (vesting period). The cash-settled share-based payments are remeasured to fair value at each reporting date until the award is settled. Any changes in the fair value of the provision are recognised as administration expenses in the income statement. The amount of unrecognised compensation expense related to non-vested sharebased payment arrangements granted in the cashsettled plans is dependent on the final intrinsic value of the awards. Social security tax liability is recognised on the intrinsic value of the cash-settled share-based payments.

Pensions

The Group is required to provide a pension plan for its onshore employees, and the Group has implemented a defined contribution plan. The plan, which is fully funded, complies with the requirements in the Mandatory Occupational Pension act in Norway ("Lov om obligatorisk tjenestepensjon"). Contributions on salary up until 12G are funded in a life insurance company, whereas contributions on salary over 12G are pledged towards the participating employees in a separately administered scheme. G refers to the Norwegian National Insurance basic amount.

Contributions to the pension plan are recognised as an employee benefit expense in the income statement when they fall due. Prepaid contributions are recognised as an asset to the extent that a cash refund or a reduction in the future payments is expected. The Group has no further payment obligations once the contributions have been paid.

The liability arising from the >12G plan is classified as a non-current liability in the statement of financial position. Changes in the liability are recognised as employee benefit expenses in the income statement in the periods during which services are rendered by employees. The liability becomes payable to the employee upon retirement or termination, voluntary or involuntary, of employment.

Government Grants

Grants are recognised when it is reasonably certain that the Group will comply with the conditions and the grants will be received. Grants related to income are deducted in reporting the related expense. Grants related to assets are deducted in arriving at the carrying amount of the asset and recognised in profit or loss over the life of the depreciable asset as a reduced depreciation expense.

Taxes

The income tax expense consists of current income tax and changes in deferred tax.

Current income tax is the expected tax payable or receivable on the taxable income or loss for the year, using tax rates enacted or substantively enacted at the reporting date, and any adjustment to tax payable in respect of previous years.

Deferred income tax is provided using the liability method on temporary differences at the reporting date between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial statements.

Deferred tax liabilities are recognised for all taxable temporary differences. Deferred tax assets are recognised for all deductible temporary differences to the extent that it is probable that taxable profits will be available against which the deductible temporary difference can be utilised. Deferred income tax is calculated on temporary differences arising from investments in subsidiaries, except where the timing of the reversal of the temporary difference is controlled by the Group and it is probable that the temporary difference will not reverse in the foreseeable future.

Deferred income tax assets and liabilities are determined using tax rates that are expected to apply to the year when the asset is realised or the liability is settled, based on tax rates (and tax laws) that have been enacted or substantively enacted at the reporting date. Deferred tax liabilities and deferred tax assets are recognised at nominal values and classified as non-current liabilities and non-current assets in the statement of financial position. Deferred tax assets and liabilities are offset if there is a legally enforceable right to offset current tax liabilities and assets, and they relate to income taxes levied by the same tax authority on the same taxable entity, or on different tax entities, but they intend to settle current tax liabilities and assets on a net basis or their tax assets and liabilities will be realised simultaneously.

Current income tax and deferred tax are recognised in profit or loss except to the extent that it relates to items recognised directly in equity or other comprehensive income.

The Group's vessel-owning companies are subject to the Norwegian tonnage tax (NTT) regime, where incurred tonnage tax is recognised as an operating expense. Companies subject to NTT are exempt from ordinary tax on income derived from operations in international waters.

Financial instruments

Financial assets and liabilities are offset, and the net amount is presented in the statement of financial position when there is a legal right to offset the amounts and an intention either to settle on a net basis or to realise the asset and settle the liability simultaneously.

Financial assets

Initial recognition and measurement: Financial assets are classified at initial recognition and subsequently measured at either i) amortised cost or ii) fair value through profit or loss.

The classification of financial assets at initial recognition depends on the financial asset's contractual cash flow characteristics and the Group's business model for managing them. Except for trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient, the Group initially measures a financial asset at its fair value plus, in the case of a financial asset not at fair value through profit or loss, transaction costs.

Trade receivables that do not contain a significant financing component or for which the Group has applied the practical expedient are measured at the transaction price determined under IFRS 15 Revenue from Contracts with Customers.

For a financial asset to be classified and measured at amortised cost it needs to give rise to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Subsequent measurement: Financial assets are classified in two categories;

i. Financial assets at amortised cost (debt instruments) The Group measures financial assets at amortised cost if both of the following conditions are met: i) The financial asset is held within a business model with the objective to hold financial assets in order to collect contractual cash flows and ii) the contractual terms of the financial asset give rise on specified dates to cash flows that are

solely payments of principal and interest on the principal amount outstanding. Financial assets at amortised cost are subsequently measured using the effective interest method (EIR) and are subject to impairment. Gains and losses are recognised in profit or loss when the asset is derecognised, modified or impaired. The Group's financial assets at amortised cost include trade receivables.

ii. Financial assets at fair value through profit or loss The category includes financial assets held for trading, financial assets designated upon initial recognition at fair value through profit or loss, or financial assets mandatorily required to be measured at fair value. Financial assets at fair value through profit or loss are carried in the statement of financial position at fair value, with net changes in fair value recognised in the statement of profit or loss. This category includes derivative instruments and listed equity investments.

Derecognition: A financial asset is primarily derecognised (i.e. removed from the Group's consolidated statement of financial position) when either i) The rights to receive cash flows from the asset have expired or ii) the Group has transferred its rights to receive cash flows from the asset or has assumed an obligation to pay the received cash flows in full without material delay to a third party under a 'pass-through' arrangement; and either (a) the Group has transferred substantially all the risks and rewards of the asset, or (b) the Group has neither transferred nor retained substantially all the risks and rewards of the asset, but has transferred control of the asset.

For trade receivables and contract assets, the Group applies a simplified approach to calculating expected credit losses (ECLs). Therefore, the Group does not track changes in credit risk, but instead recognises a loss allowance based on lifetime ECLs at each reporting date. Receivables are reviewed and assessed on an individual level, taking into account facts and circumstances for the individual customer. A financial asset is written off when

there is no reasonable expectation of recovering the contractual cash flows.

Financial liabilities

At initial recognition, financial liabilities are classified as financial liabilities at fair value through profit or loss, financial liabilities measured at amortised cost or as derivatives designated as hedging instruments in an effective hedge, as appropriate. All financial liabilities are recognised initially at fair value and, in the case of financial liabilities measured at amortised cost, net of directly attributable transaction costs.

The subsequent measurement of financial liabilities depends on their classification, as described below:

i) Financial liabilities at fair value through profit or loss include financial liabilities held for trading and financial liabilities designated upon initial recognition as at fair value through profit or loss. Financial liabilities are classified as held for trading if they are incurred for the purpose of repurchasing in the near term. This category also includes derivative financial instruments entered into by the Group that are not designated as hedging instruments in hedge relationships as defined by IFRS 9. Separated embedded derivatives are also classified as held for trading unless they are designated as effective hedging instruments. Gains or losses on liabilities held for trading are recognised in the statement of profit or loss. Financial liabilities designated upon initial recognition at fair value through profit or loss are designated at the initial date of recognition, and only if the criteria in IFRS 9 are satisfied. The Group has not designated any financial liability as at fair value through profit or loss.
ii) Financial liabilities measured at amortised cost: After initial recognition, interest-bearing loans and borrowings are subsequently measured at amortised cost. Gains and losses are recognised in profit or

loss when the liabilities are derecognised as well as through the EIR amortisation process. Amortised cost is calculated by taking into account any discount or premium on acquisition and fees or costs that are an integral part of the EIR. The EIR amortisation is included as finance costs in the statement of profit or loss.

Derecognition: A financial liability is derecognised when the obligation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on substantially different terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The difference in the respective carrying amounts is recognised in the statement of profit or loss.

Cash flow hedges

The Group applies cash flow hedge accounting for parts of its risk management positions related to currency risk.

Gains and losses on the hedging instruments are recognised in Other comprehensive income, to the extent that the hedge is effective, and accumulated in the hedging reserve in equity and reclassified into operating revenues or cost when the corresponding forecasted sale or consumption is recognised. When a hedged transaction results in the recognition of a non-financial asset, the accumulated hedging gain or loss is transferred from hedging reserve to carrying amount of the asset.

Share capital

Ordinary shares are classified as equity. Costs directly attributable to the issue of ordinary shares are recognised as a deduction from equity, net of any tax effects. Own equity instruments that are acquired (treasury shares) are recognised at cost and deducted from equity. No gain or loss is recognised in the income statement on the purchase, sale, issue or cancellation

of the Group's own equity instruments. Voting rights relating to treasury shares are nullified and no dividends are allocated to them.