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Klappir Grænar Lausnir hf. Annual Report 2023
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Annual Report
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Klappir
The smart way to sustainability
Klappir Green Solutions hf
Consolidated Financial Statement
January 1st. to December 31st. 2023
Klappir Green Solutions hf.
Hlíðasmára 3 | 201 Kópavogur | Iceland
Id: 630914-1080
Table of Contents
Endorsement by the Board of Directors 3-5
Independent Auditor's Report 6
Key figures 7
Income Statement 8
Balance sheet 9
Statement of Cash Flows 10
Notes 11-18
Consolidated Financial Statements of Klappir Green Solutions hf. | page 2
Amounts in ISK
Endorsement and Statement by the Board of Directors and the CEO
Klappir Green Solutions hf ('Klappir') is a leading global sustainability software company, founded in 2014 and headquartered in Iceland. Klappir stands out due to its comprehensive approach to operations, trusted experience, groundbreaking product portfolio, and strategic expansion into new markets. In a world increasingly focused on sustainability, Klappir is not only driving its own growth but also spearheading a transformative shift in how businesses align with the complex challenges of sustainability.
Klappir has emerged as the foremost provider of sustainability software, offering an advanced platform thoroughly crafted to empower effective sustainability management across various sectors such as businesses, municipalities, and governments. The core of Klappir's offering lies in its ability to seamlessly facilitate engagement with sustainability data, enabling enhanced performance and well-informed decision-making.
As a global leader in sustainability software solutions, Klappir holistic approach to operations, innovative product offerings, and strategic market expansion pave the way for businesses to thrive in an increasingly sustainability-driven world. Klappir's visionary journey promises not only growth but also a transformative impact on how companies navigate and embrace the complexities of sustainability accounting and reporting.
Recent business highlights
An important outcome of Klappir's product-led strategy is the remarkable year-over-year growth of 35% in subscription revenue. The newly introduced ESRS premium subscription plan and the annual statement subscription have positively contributed to this growth, along with an increased number of new Nordic customers. The growing interest and responsibility of customers to lead by example and adhere to sustainability standards have inspired other companies in their value chain to embark on their own sustainability journey, often utilizing Klappir software. This network effect is expected to further motivate companies to initiate their sustainability journey, especially considering Klappir Platform's flexible product and service subscription model, tailored to individual needs. A higher proportion of subscription revenue in the total revenue signifies a robust and healthy operation. Subscription revenue has increased from 53% to 57% of total revenue. Similarly, EBITDA has improved, reaching 97.2M kr or 16.9% in 2023 compared to the previous 31.5M kr or 7% in 2022.
Klappir's recent expansion into the Danish market has confirmed the strength of its product offering compared to alternatives solutions in the market. This success has encouraged Klappir to further expand into the Nordic and European markets. While Klappir's platform is well-prepared for upcoming EU legislation, the company has never invested more in product innovation to solidify its position as a leading Sustainability platform. A key element in Klappir's growth strategy is transitioning into a PLG (Product-Led Growth) company and building a network of solution partners who sell, consult, implement, and provide value-added solutions and services to the platform. Implementation of this strategy has already begun, with over 13 partners and a team of more than 60 consultants working with Klappir to develop business across Europe in just 6 months. We believe this growth strategy is the right path for Klappir to scale and expand into European countries, setting us apart from the competition.
The year 2024 marks the first year that large, listed companies are subject to report according to the EU's Corporate Sustainability Reporting Directive. EU and EEA member states need to transpose the Directive into their own laws by July 2024. These large, listed companies were already subject to
Consolidated Financial Statements of Klappir Green Solutions hf. | page 3
Amounts in ISK
Endorsement and Statement by the Board of Directors and the CEO
submitting sustainability-related information with their annual reports according to current legislation but the new directive expands the reporting obligations and ensures better conformity and comparability. Klappir's product team has worked hard to keep up with these developments and adapt our solutions to this new reality in order to assist Klappir's customers through this transition. In the coming years, large unlisted companies (reporting in 2026 on 2025 data) and listed SMEs (reporting in 2027 on 2026 data) will follow suit.
The sustainability ecosystem is dynamically evolving, boasting a noteworthy milestone of engaging companies that rely on our software for solid sustainability accounting, comprehensive reporting, and seamless data sharing. Undoubtedly, the Klappir ecosystem holds paramount importance in aiding companies to monitor, calculate, and transparently communicate their sustainability performance, thereby facilitating their purposeful sustainability journey.
Shareholders
Klappir Green Solution total share capital of ISK 139.043.700 is divided into an A share capital of nominally ISK 50,000,000 and a B share capital of nominally ISK 89.043.700. The company's A shares are not listed and are held by Kvistar holding ehf., a Icelandic limited liability company, wholly owned by the four founders and Sýn hf. For further information see note 9.
At the end of 2023, shareholders in Klappir Green Solutions numbered 321, compared to 316 at the end of the year 2022. The largest shareholders were as followed at the end of year 2023:
| Total shares | B-Shares | A-Shares | |
|---|---|---|---|
| Kvistar holding ehf. | 67,049,325 | 17,631,175 | 49,418,150 |
| Sindrandi ehf. | 32,545,834 | 32,545,834 | - |
| Pund ehf. | 5,000,000 | 5,000,000 | - |
| Nýsköpunarsjóður atvinnulífsins. | 3,619,579 | 3,619,579 | - |
| Stey ehf. | 3,000,000 | 3,000,000 | - |
| Kjalvegur ehf. | 3,000,000 | 3,000,000 | - |
| Eyktasalir ehf. | 2,645,350 | 2,645,350 | - |
| Dexter fjárfestingar ehf. | 2,600,000 | 2,600,000 | - |
| Klappir ehf. | 2,236,469 | 2,236,469 | - |
| Bjarni Þór Björnsson. | 2,175,474 | 2,175,474 | - |
| Haru Holding ehf. | 2,000,000 | 2,000,000 | - |
| Other shareholders. | 13,171,669 | 12,589,819 | 581,850 |
| Total. | 139,043,700 | 89,043,700 | 50,000,000 |
Compliance
The Board of Directors of Klappir Green Solutions hf. emphasizes maintaining good corporate governance and following guidelines on corporate governance issued by the Iceland Chamber of Commerce, NasdaqOMX Iceland hf. and the Confederation of Icelandic Employers. The Board of Directors has established rules of procedure where its area of authority is defined as well as the area of responsibility towards the CEO. The rules also include rules on meeting procedures, rules on the qualifications of board members, rules on confidentiality, the disclosure of information by the CEO to the board and more. The gender diversity of the board are two women (40%) and three men (60%). The consolidated financial statements of Klappir Green Solutions hf. for the 1.1.-31.12.2023 are prepared in accordance with the Icelandic Financial Statements Act no. 3/2006.
Consolidated Financial Statements of Klappir Green Solutions hf. | page 4
Amounts in ISK
Endorsement and Statement by the Board of Directors and the CEO
Non financial reporting
The non-financial information is disclosed in a separate Sustainability Statements.
Statement of the Board of Directors and the CEO
It is the opinion of the Board of Directors and the CEO of Klappir Green Solutions hf. that these financial statements present all the information necessary to show the position of the company at 31.12.2023, the operating results for the year and the financial developments during 01.01.2023-31.12.2023. The Board of Directors and the CEO of Klappir Green Solutions hf. hereby confirm the consolidated financial statements for the year 2023 with their signatures.
Kópavogi, 18. April 2024
Board of Directors
- Agust Einarsson
- Hildur Jonsdottir
- Gunnar Sigurðsson
- Sigurður Þórarinsson
- Vilborg Einarsdottir
CEO
Jon Agust Thorsteinsson
Consolidated Financial Statements of Klappir Green Solutions hf. | page 5
Amounts in ISK
Independent Auditor's Report
To the Shareholders and the Board of Directors of Klappir Grænar Lausnir hf.
Opinion
We have audited the consolidated financial statements of Klappir Green Solutions hf. for the year ended December 31, 2023 which comprise Endorsement and Statement by the Board of Director and the CEO, the consolidated Income Statement, the consolidated Balance sheet statement of financial position, the consolidated statement of cash flows for the year then ended, and the notes to the consolidated financial statements, including a summary of significant accounting policies.
In our opinion, the accompanying consolidated financial statements give a true and fair view of the financial position of Klappir Green Solutions hf. as at December 31, 2023, and its consolidated financial performance and its consolidated cash flows for the year then ended in accordance with the Icelandic Financial Statement Act.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements section of our report.
We are independent of Klappir Green Solutions hf. in accordance with the International Ethics Standards Board for Accountants’ Code of Ethics for Professional Accountants (IESBA Code) together with the ethical requirements that are relevant to our audit of the consolidated financial statements in Iceland, and we have fulfilled our other ethical responsibilities in accordance with these requirements and the IESBA Code.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Responsibilities of the Board of Directors and the CEO for the Consolidated Financial Statements
The Board of Directors and the CEO are responsible for the preparation and fair presentation of the consolidated financial statements in accordance with the Icelandic Financial Statement Act, and for such internal control as the Board of Directors and the CEO determines is necessary to enable the preparation of consolidated financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the consolidated financial statements, the Board of Directors and the CEO are responsible for assessing Klappir Green Solutions hf.’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless the Board of Directors and the CEO either intends to liquidate the company or to cease operations, or has no realistic alternative but to do so.
The board of directors shall supervise the preparation and presentation of the consolidated financial statements.
Auditor’s Responsibilities for the Audit of the Consolidated Financial Statements
Our objectives are to obtain reasonable assurance about whether the consolidated financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are
Consolidated Financial Statements of Klappir Green Solutions hf. | page 6
Amounts in ISK
Independent Auditor's Report
considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these consolidated financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional skepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the consolidated financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of Klappir Green Solutions hf.'s internal control.
- Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.
- Conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the consolidated financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company to cease to continue as a going concern.
- Evaluate the overall presentation, structure and content of the consolidated financial statements, including the disclosures, and whether the consolidated financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated and separate financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Kópavogi, 18. april 2024
Deloitte ehf.
Birna María Sigurðardóttir
State Authorized Public Accountant
Kristján Pór Ragnarsson
State Authorized Public Accountant
Consolidated Financial Statements of Klappir Green Solutions hf. | page 7
Amounts in ISK
Key figures
| 31.12.2023 | 31.12.2022 | |
|---|---|---|
| Operating revenue | 573.555.506 | 450.750.370 |
| EBITDA | 97.204.281 | 31.515.384 |
| Operational profit (loss) for the period | 46.036.539 | (36.579.298) |
| Net profit (loss) for the year | 8.754.277 | (35.526.350) |
| Return on equity | 2,3% | -9,5% |
| Return on total assets | 1,2% | -5,8% |
| 31.12.2023 | 31.12.2022 | |
| Total assets | 804.884.662 | 617.653.784 |
| Total liabilities | 427.175.214 | 244.239.702 |
| Total equity and liabilities | 804.884.662 | 617.653.784 |
| Current ratio - current assets/ current liabilities | 6,2 | 5,3 |
| Equity ratio - equity/ total capital | 46,9% | 60,5% |
| Intrinsic value of share capital - equity / share capital | 2,7 | 2,7 |
| Various figures as a percentage of revenue | ||
| 31.12.2023 | 31.12.2022 | |
| Other operating expenses | 33,3% | 38,4% |
| EBITDA % | 16,9% | 7,0% |
| Net profit / (loss) of the period | 1,5% | -7,9% |
Consolidated Financial Statements of Klappir Green Solutions hf. | page 8
Amounts in ISK
Income Statement
| | Notes | 2023
1.1.-31.12 | 2022
1.1.-31.12 |
| --- | --- | --- | --- |
| Subscription revenue | | 325.154.412 | 241.378.077 |
| Customer Success revenue | | 14.289.879 | 41.951.628 |
| Other revenue | | 234.111.215 | 167.420.665 |
| Total operating revenue | | 573.555.506 | 450.750.370 |
| Salaries and other employee expenses | 3 | (285.332.697) | (246.128.067) |
| Other operating expenses | | (191.018.528) | (173.106.919) |
| Amortization and depreciation | 5,6 | (51.167.742) | (68.094.682) |
| | | (527.518.967) | (487.329.668) |
| Operating profit (EBIT) | | 46.036.539 | (36.579.298) |
| Interest income | | 4.338.450 | 310.481 |
| Interest cost | | (35.095.045) | (3.800.037) |
| Net currency differences | | (7.521.663) | (1.573.985) |
| | 4 | (38.278.258) | (5.063.541) |
| Profit / (loss) before income tax (EBT) | | 7.758.281 | (41.642.839) |
| Income taxes | | 995.996 | 6.116.489 |
| Net profit (loss) for the year | | 8.754.277 | (35.526.350) |
Consolidated Financial Statements of Klappir Green Solutions hf, | page 9
Amounts in ISK
Balance sheet
| Notes | 31.12.2023 | 31.12.2022 | |
|---|---|---|---|
| Assets | |||
| Non-Current Assets | |||
| Intangible assets | 5 | 285.212.798 | 238.169.882 |
| Operating assets | 6 | 5.069.915 | 8.873.075 |
| Deposits | 1.418.560 | 2.258.560 | |
| Deferred tax asset | 9 | 28.388.070 | 27.437.070 |
| Total Non-Current Assets | 320.089.343 | 276.738.526 | |
| Current Assets | |||
| Trade receivables | 16.430.743 | 40.074.731 | |
| Other current receivables | 194.072.641 | 148.543.105 | |
| Cash and cash equivalents | 274.291.935 | 152.297.422 | |
| Total Current Assets | 484.795.319 | 340.915.258 | |
| Total Assets | 804.884.662 | 617.653.784 | |
| Equity and liabilities | |||
| Capital and reserves | |||
| Share capital | 139.043.700 | 139.353.700 | |
| Share premium | 478.199.200 | 482.279.200 | |
| Reserved equity | 172.957.493 | 135.371.430 | |
| Accumulated deficits | (412.546.490) | (383.714.704) | |
| Translation differences | 55.545 | 124.456 | |
| Total Equity | 7 | 377.709.448 | 373.414.082 |
| Non-current liabilities | |||
| Long term loan | 8 | 313.122.179 | 144.057.562 |
| Owed to related parties | 10 | 35.344.694 | 35.344.694 |
| Total Non-Current liabilities | 348.466.873 | 179.402.256 | |
| Current liabilities | |||
| Trade payables | 22.361.255 | 17.681.293 | |
| Other current liabilities | 56.347.086 | 47.156.153 | |
| Total Current liabilities | 78.708.341 | 64.837.446 | |
| Total Liabilities | 427.175.214 | 244.239.702 | |
| Total equity and liabilities | 804.884.662 | 617.653.784 |
Consolidated Financial Statements of Klappir Green Solutions hf. | page 10
Amounts in ISK
Statement of Cash Flows
| | Notes | 2023
1.1-31.12 | 2022
1.1.-31.12 |
| --- | --- | --- | --- |
| Operating activities | | | |
| Operating profit | | 46,036,539 | (36.579.298) |
| Depreciation and amortization | 5,6 | 51.167.742 | 68.094.682 |
| Gain on sale of assets | | (19.830.435) | 154.000 |
| Working capital from operating activities, excl finance and taxes | | 77.373.846 | 31.669.384 |
| Current receivables, (increase) / decrease | | (20.351.482) | (13.353.497) |
| Operating liabilities increase / (decrease) | | (8.393.669) | 16.848.961 |
| Cash generated to operations | | 48.628.695 | 35.164.848 |
| Interest received | | 4.338.450 | 310.481 |
| Interest paid | | (5.571.881) | (3.801.594) |
| Currency exchange rate difference received / (paid) | | (7.521.663) | 1.572.428 |
| Net cash from operating activities | | 39,873,601 | 30.101.308 |
| Investment activities | | | |
| Investments in intangible assets | 5 | (96.111.129) | (86.406.669) |
| Proceeds from sales on intangible assets | 5 | 20.000.000 | 0 |
| Purchase of own shares | | (4.390.000) | (12.720.000) |
| | | 80.501.129 | (99.126.669) |
| Financing activities | | | |
| New long- term borrowings | | 162.622.041 | 144.057.562 |
| | | 162.622.041 | 144.057.562 |
| Decrease in cash and cash equivalents | | 121.994.513 | 75.032.201 |
| Cash and cash equivalents at the beginning of year | | 152.297.422 | 77.265.221 |
| Cash and cash equivalents at the end of year | | 274.291.935 | 152.297.422 |
Consolidated Financial Statements of Klappir Green Solutions hf. | page 11
Amounts in ISK
Notes to the Financial Statements
1. General information
The Financial Statements of Klappir Grænar Lausnir hf. contains the consolidated financials of the company and its Danish subsidiary, Klappir Nordic ApS. The financial statements have been prepared in conformity with the Icelandic Financial Statement Act, are based on historical cost basis and use the same accounting methods as previous years. The financial statements are prepared in Icelandic Krona (ISK).
Klappir Grænar Lausnir hf. is a private limited company and complies with the Icelandic limited companies law nr. 2/1995. Klappir Grænar Lausnir hf. is domiciled in Iceland and its legal residence is at Hlíðasmárá 3, 201 Kópavogur. Klappir Nordic ApS is domiciled in Denmark and its legal residence is at Bryghuspladsen 8, Copenhagen.
2. Basis of preparation
In applying the Company's accounting policies, management is required to make judgements, estimates and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates. The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognised in the period in which the estimate is revised.
3. Salaries and other employee expenses
| 2023 | 2022 | |
|---|---|---|
| Salaries | 302.262.235 | 254.874.488 |
| Other Salary-related expenses and other employee expenses | 69.221.974 | 72.343.011 |
| Capitalized salaries | (80.595.000) | (81.089.432) |
| Salaries and other employee expenses | 290.889.209 | 246.128.067 |
| Average number of full time employees | 24 | 27 |
CEO's remuneration was 19,3 m.kr. (2023: 18,6 m.kr.) and BoD 1,5 m.kr (2022: 2,1 m.kr.).
Consolidated Financial Statements of Klappir Green Solutions hf. | page 12
Amounts in ISK
Notes to the Financial Statements
4. Investment revenue and finance cost
| Investment revenue is specified as follows: | 2023 | 2022 |
|---|---|---|
| Interest on bank deposits | 3.154.537 | 288.875 |
| Interest on trade receivables | 1.183.913 | 21.606 |
| 4.388.450 | 310.481 | |
| Finance cost is specified as follows: | ||
| Interest cost of short-term liabilities owed to financial institutions. | (29.523.164) | (697.361) |
| Interest cost to related parties | (4.080.720) | (2.896.889) |
| Other interest expenses | (1.491.161) | (195.397) |
| (35.095.045) | (3.800.037) | |
| Exchange rate difference and future contracts is as follows: | ||
| Exchange rate difference | (7.521.663) | (1.573.985) |
| (7.521.663) | (1.572.428) | |
| (38.278.258) | (5.063.541) |
5. Intangible assets
| Goodwill | Software | Total | |
|---|---|---|---|
| Cost | |||
| Balance at 1.1.2023 | 181.154.753 | 377.475.021 | 558.629.774 |
| Additions | 96.111.129 | 96.111.129 | |
| Sale of assets | (14.820.477) | (14.820.477) | |
| Balance at 31.12.2023 | 181.154.753 | 458.765.673 | 639.920.426 |
| Amortiation | |||
| Balance at 1.1.2023 | 109.604.769 | 210.855.123 | 320.459.892 |
| Depr. of sold assets | (14.650.912) | (14.650.912) | |
| Amortised for the year | 17.920.881 | 30.977.767 | 48.898.648 |
| Balance 31.12.2023 | 127.525.650 | 227.181.978 | 354.707.628 |
| Book value | |||
| Balance at 1.1.2023 | 71.549.984 | 166.619.898 | 238.169.882 |
| Balance 31.12.2023 | 53.629.103 | 231.583.695 | 285.212.798 |
| Amortization rates | 10% | 10% |
Consolidated Financial Statements of Klappir Green Solutions hf, | page 13
Amounts in ISK
Notes to the Financial Statements
6. Operating assets
| Tools and equipment | |
|---|---|
| Cost | |
| Balance at 1.1.2023 | 13.081.364 |
| Correction | (1.534.066) |
| Balance 31.12.2023 | 11.547.298 |
| Depreciation | |
| --- | --- |
| Balance at 1.1.2023 | 4.208.289 |
| Depreciation for the year | 2.269.094 |
| Balance 31.12.2023 | 6.477.383 |
| Book value | |
| --- | --- |
| Balance at 1.1.2023 | 8.873.075 |
| Balance 31.12.2023 | 5.069.915 |
| Depreciation rates | 10% - 35% |
| --- | --- |
7. Equity
| Share capital is specified as follows: | Class A | Class B | Total |
|---|---|---|---|
| Total share capital at year-end | 50.000.000 | 89.443.700 | 139.443.700 |
| Own shares at year-end | (400.000) | (400.000) | |
| 50.000.000 | 89.043.700 | 139.043.700 |
The company's share capital is ISK 139,0 million at nominal value at year end.
The Company's share capital is divided into common class A and common class B. In class A are 50,0 million shares issued, each share in class A amounts to ISK 1 and ten votes are carried to each ISK of share capital. In class B are 90,1 million shares issued, each share in class B carries one vote, but in other respects the classes have the same rights.
Consolidated Financial Statements of Klappir Green Solutions hf. | page 14
Amounts in ISK
Notes to the Financial Statements
| Equity specifies as follows: | Share capital | Share premium | Restricted equity | Retained earnings | Total equity |
|---|---|---|---|---|---|
| Equity at 1.1.2022 | 140.153.700 | 494.199.200 | 113.010.584 | (325.827.508) | 421.535.976 |
| Adjusted from last year | (800.000) | (11.920.000) | (12.720.000) | ||
| Transf. to restr. equity | 22.360.846 | (22.360.846) | 0 | ||
| Translation difference | 124.456 | 124.456 | |||
| Loss of the year | (35.526.350) | (35.526.350) | |||
| Equity at 1.1.2023 | 139.353.700 | 482.279.200 | 135.371.430 | (383.590.258) | 373.414.082 |
| Purchase of own shares | (310.000) | (4.080.000) | (4.390.000) | ||
| Transf. to restr. equity | 37.586.063 | (37.586.063) | 0 | ||
| Translation difference | (68.911) | (68.911) | |||
| Profit for the year. | 8.754.277 | 8.754.277 | |||
| Equity at 31.12.2023 | 139.043.700 | 478.199.200 | 172.957.493 | (412.546.490) | 377.709.448 |
The Company has issued stock options to the employees with a nominal value of ISK 10.840.000. According to the agreements, the stock option is earned in equal proportions over 4 years. The agreement expires eight years from the date of issue. The Company's stock option plan and stock option agreements are subject to general rules on such agreements that are approved by the Directorate of Internal Revenue. This includes that agreements are offered to all employees and the maximum redemption is ISK 600.000 per year. Restricted equity consists of capitalized development costs according to act no. 3/2006.
8. Other non-current Liabilities
The company has entered into an agreement with NEFCO, Nordic Green Bank for a debt financing in EUR to the company. The agreement gives Klappir Grænar Lausnir access to a credit line at non-indexed interest, which will be repaid in installments starting 2025 with final maturity in 2029.
A stipulation of the loan is that NEFCO can, at its sole discretion, convert any sums owed, including any unmatured amounts, to equity. If, upon conversion, any amount remains outstanding, it will be repaid in accordance with the terms on the agreement. NEFCO has the right to request the payment to be paid before the final maturity date, on the next payment date after conversion.
Consolidated Financial Statements of Klappir Green Solutions hf. | page 15
Amounts in ISK
Notes to the Financial Statements
9. Deferred tax assets
| Asset | ||
|---|---|---|
| 2023 | 2022 | |
| Balance at the beginning of the year | 27.437.070 | 21.320.520 |
| Balance at the end of year | 28.388.070 | 27.437.070 |
The company does not transfer its deferred tax assets in full due to uncertainty about utilization. Deferred tax assets is specified as follows by individual items at year-end:
| 31.12.2023 | 31.12.2022 | |
|---|---|---|
| Operating assets and intangible assets | 5.100.533 | 7.189.254 |
| Other items | 3.042.838 | 922.479 |
| Effects of tax losses carried forward | 215.979.210 | 182.312.277 |
| Reduct. due to uncertainty about utilization of tax loss carried forward | (195.734.511) | (162.986.940) |
| 28.388.070 | 27.437.070 |
Taxable losses carried forward can be used against future profits as specified below:
| 31.12.2023 | |
|---|---|
| Year 2024 | 55.108.662 |
| Year 2025 | 80.817.277 |
| Year 2026 | 83.025.148 |
| Year 2027 | 79.443.777 |
| Year 2028 | 38.818.849 |
| Year 2029 | 158.512.542 |
| Year 2030 | 119.314.129 |
| Year 2031 | 86.439.447 |
| Year 2032 | 194.321.465 |
| Year 2033 | 182.689.030 |
| 1.078.490.3268 |
Consolidated Financial Statements of Klappir Green Solutions hf. | page 16
Amounts in ISK
Notes to the Financial Statements
10. Related parties
Related parties are those parties which have considerable influence over the Company, directly or indirectly, including parent company, owners or their families, large investors, key employees and their families and parties that are controlled or dependent on the Company, i.e. affiliates and joint ventures. Business with related parties has been done on a similar basis as business with unrelated parties.
The Company has granted stock options to key management personnel, see further in note 10.
Transactions with related parties are as follows:
There were no significant transactions with related parties in the years 2023 og 2022.
| Transactions with related entities 2023: | Receivables | Payables |
|---|---|---|
| Klappir ehf. (related party to one shareholder) | 0 | 35.344.694 |
| 0 | 35.344.694 | |
| Transactions with related entities 2022: | ||
| Klappir ehf. (related party to one shareholder) | 0 | 35.344.694 |
| 0 | 35.344.694 |
Related party transactions were made on terms equivalent to those that prevail in arm's length transactions.
11. Other matters
In the years 2014-2023, the Company has been working on software development. The majority of the project, which consists mostly of salary related expenses, has been expensed in the income statement. In 2023, the Company received confirmation from the Icelandic Centre for Research (RANNÍS) that the development project had been approved on the basis of Act no. 152/2009. With the confirmation, the Company acquired the right to a special reimbursement based on the direct cost of the project. The Company will apply for reimbursement in connection with the Company's tax returns for the year 2023 like in the year 2022. The estimated reimbursement of costs for the projects in the year 2023 amounts to ISK 188,3 million which will be reimbursed in November 2024.
12. Accounting policies
Foreign currencies Foreign currency transactions are entered at the prevailing exchange rate on the day of the transaction. Monetary assets and liabilities in foreign currencies are recognised at the exchange rate at the end of the reporting date. The resulting exchange rate difference is recognised in the income statement within financial income and expense.
Revenue recognition
Company has transferred the significant risks and rewards of ownership of the goods to the buyer, which is generally when the goods are delivered. Service revenue is recognised as appropriate when the service has been provided or in parallel with the service being provided. Sales are shown in the income statement net of discounts. Revenue collected during the fiscal year but relating to subsequent fiscal years is recognised in the balance sheet as deferred income. Revenue relating to the fiscal year but collected after the end of it is recognised in the balance sheet as an asset.
Consolidated Financial Statements of Klappir Green Solutions hf. | page 17
Amounts in ISK
Notes to the Financial Statements
Expense recognition
Expenses incurred to earn revenue during the period are recognised as operating expenses. Expenses incurred during the fiscal year but relating to subsequent fiscal years are recognised in the balance sheet as prepaid expenses. Expenses relating to the fiscal year but payable later are recognised as liabilities as accrued expenses in the balance sheet.
Financial income and expenses
Interest income is recognised for the period in accordance with the relevant principal and interest rate.
Financial expenses are recognised in the income statement during the period in which they accrue. Borrowing costs are capitalized and amortized on a straight-line basis over the duration of the loan.
Transactions in currencies other than ISK are converted to ISK at the exchange rate on the day of the transaction. Exchange rate differences arising from the payment of debts and the collection of receivables are entered in the income statement. Monetary assets and liabilities in foreign currency are converted based on the exchange rate at the end of the year and the accrued exchange rate difference are entered in the income statement within financial income and expenses.
Taxation
Income tax is calculated and recognised in the financial statements. The calculation is based on earnings before taxes, adjusted for the permanent difference between taxable results and results according to the income statement. The income tax rate is 20%.
Income tax payable is an income tax that is estimated to be paid next year due to taxable profits for the year as well as adjustments to income tax payable for previous years.
Deferred tax is due to the difference between the carrying amounts of balance sheet items in the tax settlement and the financial statements. The difference is because the income tax base for company is based on other assumptions than their financial statements.
Deferred tax assets are evaluated on the reporting date and only recognised to the extent that it is probable that taxable profits will be available against which deductible temporary differences can be utilized.
Property, plant and equipment
Assets are recognised as property, plant and equipment when it is probable that the future economic benefits associated with the asset will flow to the Company and the cost of the assets can be measured reliably. Property, plant and equipment are initially measured at cost. The cost of property, plant and equipment consists of the purchase price and all direct costs of bringing the property into a revenue-generating state.
Property, plant and equipment are amortized on a straight-line basis over their estimated useful lives, taking into account their expected residual value.
Assets that are subject to ownership by others under a financing lease agreement are depreciated over their estimated useful lives on the same basis as assets with full ownership rights.
Consolidated Financial Statements of Klappir Green Solutions hf. | page 18
Amounts in ISK
Notes to the Financial Statements
Gains or losses on the sale of property, plant and equipment is the difference between the sales price and the carrying amount of the asset on the date of the sale, and is recognised in the income statement on sale.
Goodwill
Goodwill arises because of a merger of companies or the acquisition of operations and is the difference between the purchase price and the fair value of net assets. Goodwill is amortized on a straight-line basis over a 10 year period.
Intangible assets
Intangible assets are recognised when it is probable that the future economic benefits associated with the asset will flow to the entity and the cost of the asset can be measured reliably. Intangible assets include trade agreement, patents, software and development cost. The assets are amortized on a systematic basis over the estimated useful lives of the respective assets and amortization for each period is recognised in the income statement. The choice of depreciation method is based on the use of the relevant asset during its useful life. However, if these assets do not have a specific useful life, they may be assessed annually in accordance with established accounting principles and are subject to impairment testing annually, or more frequently if evidence of impairment has been identified. Development costs are amortized over 10 years if their useful life cannot be readily determined.
Investments in Subsidiaries
Subsidiaries are entities in which the parent company holds a controlling interest. Control is based on whether the investor; has decision-making power over the investee, is exposed or has the right to variable returns from his involvement in the investee, and has the ability to use his power to affect his returns. Investments in subsidiaries are accounted for using the equity method and therefore recognised at cost, taking into account their share in the operations, other changes in equity and impairment of individual investments. Loss of subsidiaries in excess of the original investment is only recognised if the Company provided a guarantee or incurred obligations on the subsidiary's behalf.
Trade receivables
Trade receivables are recognised at nominal value, taking into account an allowance for doubtful accounts. The allowance is not a final write-off, but only a reserve for estimated future losses.
Cash and cash equivalents
The Company's cash and cash equivalent consist of cash and on-demand bank balances.
Provisions
Provisions are recognised when the Company has a present obligation as a result of a past event, payment is probable and the amount can be estimated reliably.
Trade payable
Trade payables are recognised at nominal value, taking into account any accrued costs.
Consolidated Financial Statements of Klappir Green Solutions hf. | page 19
Amounts in ISK