3 ABL GROUP
3 The Energy and Marine Consultants.
30 FROM THE BOARDROOM
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38 FINANCIAL STATEMENTS
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80 AUDITOR'S REPORT
83 ALTERNATIVEPERFORMANCEMEASURES(APM)
Contents
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The Energy and
Marine Consultants.
ABL GROUP
ABL Group is the leading global
independent energy and marine
consultant, working in energy and
oceans to de-risk and drive the
transition across the renewables,
maritime and oil and gas sectors,
offering our customers the deepest
pool of world-class expertise across
marine, engineering and adjusting
disciplines from more than 300
locations worldwide.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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The ABL Group
Family
ABL Group
ABL Group is a leading global independent energy and marine
consultant working in energy and oceans to de-risk and drive the
energy transition across renewables, maritime and oil and gas sectors.
www.abl-group.com
East Point Geo
Expert Geoconsulting organisation supporting all sectors; providing
efficient client-focused deliverables including data assurance,
ground models and quantitative risk assessment.
Longitude Engineering
Independent engineering, design and analysis services for the marine,
renewables, oil & gas, defence, and offshore infrastructure industries.
OWC (Offshore Wind Consultants)
Project development services, owner's engineering and
technical due diligence to the offshore renewables industry.
JLA (John LeBourhis & Associates)
Rig moving, risk control services and surveying services,
specialists in MODUs.
INNOSEA
Engineering advisory, verification, research & development,
concept development and consultancy for marine renewable energy.
ABL Yachts
Superyacht surveyors and consultants.
OSD-IMT
Est. in 1989, specialist ship design house focused on offshore
support vessels and clean shipping technology.
Through targeted acquisition and
organic growth, ABL Group have
built a comprehensive family of
specialist and niche branded energy
and marine consultancy companies,
offering services that are both
complementary and interconnected.
This allows our business lines,
branded service companies, and
expertise to focus closely on
delivering technical excellence in
engineering and consultancy, loss
prevention and loss management.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Key Financial Figures
Results 2021 2020
150,748 77,015
1
13,078 6,320
7,375 2,946
1
9,645 4,843
3,218 1,513
1
5,435 3,280
1
% 8.2% 9.6%
1
% 10.5% 6.8%
Balance sheet and cash flow
19,815 30,642
% 58.1% 55.9%
8,474
Operations
1, 3
63,205 75,992
2
954 790
2
% 75% 72%
Share data
0.03 0.02
96.92 92.55
17.7 7 8.32
1.00
10.40 9.00
0.50 0.40
1
2
3
Financial calendar 2022
Event Date
29/04/2022
01/06/2022
31/08/2022
28/10/2022
Ticker symbol
ISIN No
Share Register
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Dear fellow shareholders,
What a difference 12 months can make.
The public narrative of energy has been
largely turned upside down. The market
is not the problem for the next few years
for ABL Group (ABL). The energy market
is about to fire on all cylinders, both
renewables, and traditional energy such
as oil and gas and nuclear energy.
The combination of significant underinvestment in energy over the last 7–10
years combined with the increased focus on security of supply is changing
the narrative of energy fundamentally. Last year the focus was on green
and how to close production of energy from nuclear, and oil and gas (O&G)
as soon as possible. Last year I discussed this in my letter to shareholders
and I stated the following:
“My expectation for ABL’s markets in 2021 is a continued rapid growth for
renewables and moderate growth for the traditional business within Oil and Gas
and Marine. However, from 2022 or maybe already in second half of 2021, there
is a significant risk for another raw-material cycle in the world economy following
a combination of underinvestment in raw-materials in general over the last 7–10
years and strong world GDP growth after Covid-19 recession. In addition, we
should not forget that the renewables investments are raw material intensive
and the energy to mine, transport, refining, assembling and installing the new
renewable energy generation capacity will use traditional energy. I would argue
that medium term we will see a boost in used of traditional energy sources to
fuel the energy transition. In sum, I expect another upcycle for traditional energy
including Oil and Gas based on three key factors; underinvestment last 7–10 years,
strong economic recovery after Covid-19 and increased demand for raw materials
including energy to fuel the energy transition,”
Since I wrote the above paragraph, energy prices have increased dramatically
and the war in Ukraine has put energy security high on the agenda again. Further,
the EU has finally understood that nuclear and natural gas (with carbon capture
technology) is a key part of the transition fuel and more likely in my mind continue
to be a key source of the long-term supply of clean energy. During the last 12
months nuclear and gas have been included as part of the EU’s sustainable
finance taxonomy.
The worldwide natural depletion of oil production is about 8% p.a. and the natural
depletion of gas production is about 6% p.a.. This implies that every year, just
to keep the production flat, you must invest significant amounts in new and
existing fields of oil and gas. Over the last 13 years (from 2008 to 2020) the US
has increased oil production by 10m barrels per day. During the same period, the
world consumption of oil has also increased by about 10m barrels. Hence, in sum
for the rest of the world outside the US, the investment in new capacity and in
producing fields has only kept production flat during the last 14 years. In the US
the main source of increased production has been shale oil. Many observers
now forecast that the “easy growth” in shale production is now history and the
contribution and growth from shale will be much lower over the next few years.
Finally, the growth in consumption of traditional energy is expected to grow in the
medium term.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
Letter from the Chair
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Energy conservation and the continued increase in investments in renewables are
gradually reducing the demand for traditional energy in the OECD countries, but
the growth in developing countries more than offsets the decline in the developed
part of the world.
In my view, we are entering a “perfect storm” for energy. The market will not be
the problem – we will see big investments across all energy sources for the next
few years, renewables, transitional solutions, and traditional sources of energy.
It will be ABL’s execution of its strategy and management of the company – or lack
of it – that will determine whether we are able to take advantage of this boom in
the energy markets.
The challenge of delivering good performance to all our stakeholders in a market
characterised by such a “perfect storm” should not be overlooked. Increasing
inflation, higher salaries, lack of skilled talent, and more projects than we have
resources to source will increase the pressure on management in ABL Group and
our employees, and finally our customers. The hourly/daily rate in our oil and gas
market has in nominal terms been reduced by up to 30-40% from the peak in
2014. For the first time in 7-8 years, we now see meaningful rate increases again
and I expect we will reach previous highs (nominal) within 2-3 years. Nearly a
decade of the downturn, layoffs, and reduced compensation to the staff in our
industry has drained the oil and gas industry for talent in general. Most of the
engineers and key staff leaving the oil and gas industry have found rewarding
jobs in IT, renewables, civil engineering, or they have retired. Rate and wage/
compensation inflation will go hand in hand the next few years.
Since the start of 2019 ABL has done 5 acquisitions (including the last 29% of
INNOSEA) and increased our revenue from USD 36m to USD 151m, driven by the
companies we have acquired and organic growth. The organic growth is expected
to accelerate in 2022 and we further expect to continue to consolidate and add
new related business lines to our offering. The combination of acquisitions, strong
growth in the market, new technology, and inflation will be very demanding for the
ABL organisation in the next few years. In addition, the fact that the integration
of the acquisitions has partly been affected by various lockdowns during Covid-
19 implies that we are somewhat behind realising the planned synergies from
the combination of the acquired companies. When we announced the merger
with LOC we estimated cost synergies of USD 3.5m. Our synergies target has
now been increased to USD 4.0, where only 50% was realised at the end of 2021.
The cocktail of a “perfect storm” in the market and the extreme growth for
ABL over the last 3 years, make our effort to professionalise the management
and support functions of the company even more urgent. We achieved a lot in
2021, but we have a lot to do also during the next few years. Our internal focus
is on the following key factors: 1) continued professionalisation/specialisation
of management and support functions, 2) cost synergies, 3) capital efficiency,
4) market reach and service offering, and 5) alignment of incentives between
employees and shareholders. I will in the below discuss each of the internal key
value drivers in more detail.
Professionalisation and specialisation of management and support
functions. The key focus areas for our internal investments and upgrades
are IT, legal, recruitment, human resource, training, knowledge management,
and strengthening of the financial and commercial competence.
Cost synergies. There are significant cost synergies associated with most
acquisitions. But often overlooked is the need for investments in IT and the need
for upgrading and specialisation of the management and service functions.
The net of cost synergies and investments/new costs is the net synergies
from M&A and organic growth. When Aqualis, Braemar Technical Services
(BTS), and LOC were separate the indirect cost/overhead was in the region
of 25-30% of revenue. A realistic target when the three companies are fully
integrated as ABL, is to approach 20% of revenue as overhead/group costs
driven by a combination of direct cost savings and more scalability as revenue
increases. The focus in 2021 was on integration and investments, especially
in IT, to achieve the cost reduction; the net of this is a flat development of
overhead as a % of revenue. In 2022 we expect the overhead to gradually
reduce as the main investments and changes have been done in 2021.
Capital efficiency. ABL’s business is normally classified as a capital-
light business with a low or moderate margin. The capital invested in ABL
is mainly used for working capital and for cash held in the various offices
worldwide. During 2020 we had a positive net cash flow from a reduction
of NWC of USD 4.7m while during 2021 this positive development was
reversed, and we had an increase in NWC of USD 7.2m. This is a disappointing
development and not what we had planned for. We will continue to
professionalise the treasury function by establishing cash pooling systems
and implementing new software to handle payments from our clients. Our
ambitions for reduced use of capital in ABL have not been reduced, only
delayed. Capital efficiency is about culture in the organisation as much as
about improving systems and payment terms in our contracts. We expect
to be back on track and improve our capital efficiency during 2022.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Market reach and service offering. In 2018 the former Aqualis had 19
offices. Today, after the mergers with BTS and LOC, ABL Group has offices
in 63 locations in 39 countries and in all major shipping and offshore energy
hubs worldwide. Our business is local and global. We are sharing talent and
key competence worldwide but the interaction with customers is often local
and the projects and equipment we are assisting need often local presence
and expertise. In 2018, 80% of our business came from offshore O&G. In
2021 about 52% of ABL’s revenue is derived from offshore O&G, about 21%
from maritime, and about 27% from offshore renewables. The growth in
renewables was especially strong and our revenue grew by 56% and the
share of the revenue from renewables increased from 18% in 2020 to 27%
in 2021. ABL’s target is to have 50% of our revenue in 2025 from renewables
and energy transition activity. Based on the growth we expect in maritime
and traditional oil and gas this target is challenging, but we currently see no
reason to change this target. In 2021 we established organically new business
within energy storage, onshore wind and solar, and hydrogen. We have
already won significant new business within these areas, illustrating how good
infrastructure, reputation, and network combined with hiring experienced
engineers with niche competencies and complementary networks lead to
concrete results relatively quickly. We did 3 smaller niche acquisitions in 2021
and we have a pipeline of targets for 2022 and expect to continue to grow
with a combination of organic and inorganic growth for the next few years.
Alignment of incentives between employees and shareholders.
We value our people; our value comes from them. ABL invests in people, not in
hardware. That is our business and our focus.
ABL has established a long-term share-based incentive system (for details
see page 59 in the annual report). The employees of ABL currently own about
25% of the shares in the company (fully diluted including outstanding options)
and in addition, up to 15% of EBITA is reserved for bonuses to the employees.
Hence, employees are party to about 35% of the profit in the company and
dividends paid. In ABL we believe the incentive system is key for the stability
of the workforce, a higher acceptance for the necessary continuous change in
the company, and an aligned focus on profitability and capital efficiency in the
company from all stakeholders. A key parameter in our M&A transactions is to
incentivise the key employees in the target to not only stay on in the business
but also to continue to deliver a good return on the capital we invest in the target.
The strategic focus for ABL. The strategy is based on three main pillars, 1)
expansion and growth in renewable energy, the transition energy investment,
and other emerging offshore industries, 2) leverage our position within the
traditional markets within maritime and oil and gas, including contributing to
further consolidation in our industry, and 3) capital efficiency, take out synergies
from acquisitions and return capital to our shareholders and employees. Active
capital allocation is the tool management and the board is using to improve
our return on capital. Reduction of the use of capital (or sale) of business that
is not meeting our return on capital requirement should also be expected.
The normalised operating margin in ABL was 6.4% in 2021, a marginal improvement
from 5.8% on a Pro-forma consolidated basis in 2020. The management team is
working hard with the controllable internal value drivers such as professionalisation
of the back-office, taking out synergies, capital efficiency, and realising the
benefits of a broader business offering and our extended global network to realise
the dynamic income synergies. Our medium-term target is to get to an operating
margin of 10% (EBIT margin) and a net working capital of 75 days (of revenue) on
a sustainable basis and to reduce the cash requirements of the business. The
planned strategy of simultaneously increasing the nominator (EBIT) combined
with a reduction of the denominator (capital used) should have a meaningful
impact on ROCE and ROE. This may look simple, but it requires hard work and
focus to realise this simple math on a sustainable basis.
In 2021 we paid a dividend of NOK 0.50 per share (paid in June and
November). The board has proposed an ordinary dividend of NOK 0.30
to be paid after the AGM in 2022 and a similar dividend should be expected
in November 2022 depending on operational performance. The strategy of
the board is to gradually increase the dividend as operations improve
and the capital tied up in the operation is reduced to competitive levels.
At the end of 2021, David Wells stepped down from his position as ABL’s CEO, as
part of a long-standing succession plan. David was one of the founders of ABL
(then Aqualis) and he has been the company’s CEO since its inception in 2013. He
has led the company from zero employees to almost 1000 employees as we are
today. This growth happened despite our main market in oil and gas has been in
a recession for 80% of the time he served as CEO. Even more importantly, when
David stepped down, the new CEO Reuben Segal and the new COO Bader Diab
were both recruited internally. This demonstrates the strength of the organisation
and the culture he has led and built. The undersigned and the board of directors
are very pleased with the new executive team led by CEO Reuben Segal, COO
Bader Diab, and CFO Dean Zuzic.
ABL’s markets are booming, and I have called it a “perfect storm”. But the
management challenges while the market is changing as fast as it is at the start
of 2022 should not be underestimated. ABL managed to navigate through a
reduction in total O&G investments of about 50% from the peak in 2014 to the
bottom in 2021, and a reduction of hourly rates for our staff of up to 30-40% during
the same period. Now we must demonstrate that we can move from managing a
recession to demonstrate that we can make the most of an upturn in the market.
I am certain we can deliver in an upturn. Our management has, over the last few
years, managed a recession in O&G at the same time as the team has managed
a rapidly growing renewable market (56% growth in 2021 alone!). In other words,
the growth “skills” are already in the management’s DNA. The task is to continue
to deliver for all our stakeholders; employees, clients, banks, and our shareholders
at the same time as we continue to contribute to decarbonisation of the global
energy system and the delivery of affordable energy to the 7.9 billion people in
the world. That’s our mission for 2022 and beyond. Our focus should always be
on the next achievement or target. That goes for sports as well for business.
Glen Rødland
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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ABL Group offers expert technical
and engineering consultancy across
all renewable energy markets:
offshore wind, onshore wind, solar,
storage, wave and tidal.
ABL Group is uniquely placed in this market to support clients in the delivery
of renewable energy projects at every stage of a project or asset’s lifecycle.
We combine the group’s long-term legacy in de-risking) marine operations and
projects, with the specialised technical expertise of our four group companies
in supporting clients to deliver renewable energy projects across all generating
technologies and markets:
OWC (Offshore Wind Consultants)
Supporting offshore wind project developers with project development
services, owners’ engineering and technical due diligence.
Longitude Engineering
Supporting EPCI contractors with independent engineering, design and analysis
of marine operations and supporting infrastructure and assets and SOV design
through it’s OSD-IMT specialist ship design unit.
ABL Group
Supporting the insurer and operator with marine assurance and warranty
services and offering independent engineering for onshore wind,
solar and energy storage.
East Point Geo
Supporting offshore and onshore wind developers understand ground
engineering risks.
INNOSEA
Supporting technology providers with feasibility, advisory, analysis,
engineering & design across all marine renewable sources.
Renewables
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Independent renewable energy consulting
ABL Group has been an independent and increasingly leading technical advisor
and engineering consultant to many of the major developments in offshore wind
development over the last 20 years and we have expanded our expertise to
support other generation technologies and markets including onshore wind, solar,
energy storage and wave and tidal.
Through our global network of 63 offices worldwide, we provide cutting-edge
energy and marine technical expertise in all offshore wind energy locations
globally. Often trailblazers in this industry, our group companies have contributed
with loss prevention services and consulting and engineering on some of the very
first offshore wind projects in the world.
Committed to the acceleration of integrated renewable energy sources
decarbonising our electricity networks, our multi-disciplinary expertise supports at
every project stage to ensure your operation’s success – feasibility, development,
engineering, construction, operations and maintenance, and end of life across all
generation technologies.
Our markets
Offshore Wind
Growth in offshore wind is accelerating and bringing new risks that investors,
developers, insurers and EPCI companies all have to understand, eliminate
or mitigate. From new emerging markets to new technology such as floating
foundations and +15MW wind turbines, the ABL Group can support from early
site selection to decommissioning. We bring experience gained during more than
three decades of consulting in the energy and marine sectors.
ABL Group has been an independent and impartial partner to many of the major
developments in offshore wind development over the last two decades. We
can support all forms of early desktop study in early development to owner’s
engineering fixed or floating projects and provide technical due diligence for
some of the largest transactions in the sector. The ABL Group are also the leading
provider of MWS in the sector, delivering engineering for EPCIs, and provides
design, engineering and construction supervision for SOVs, cable lay vessels,
and jack-up installation vessels, loss adjusting, and expert witness and litigation
support.
Onshore Wind
The ABL Group delivers independent engineering (IE) services to developers,
owners, and lenders in their evaluation of technologies and projects.
Our extensive global footprint also means we are able to easily deploy to support
the development of onshore renewables projects in new emerging markets, as in
already established markets.
Services include independent engineering and technical due diligence, feasibility
studies and owner’s engineering, yield, modelling and performance assessment,
and strategic and regulatory advisory.
We also provide through a specialist group all aspects of terrain, subsurface and
soil geoscience to support ground engineering projects for onshore wind as well
as offer loss adjusting and professional witness services.
Onshore Solar
The ABL Group delivers independent engineering (IE) services to developers,
owners, and lenders in their evaluation of solar technologies and projects. Our
experts cover ground-mounted PV, roof-top PV, floating PV (also see below) and
CSP technologies.
Our extensive global footprint also means we are able to easily deploy to support
the development of onshore renewables projects in new emerging markets, as in
already established markets.
Services include independent engineering and technical due diligence, feasibility
studies and owner’s engineering, yield, modelling and performance assessment,
and strategic and regulatory advisory.
Floating Solar
ABL Group is a pioneer in the development of floating solar PV (photovoltaic)
farms, offering a comprehensive package of front-end engineering, design
and advisory services to support innovation and construction of this growing
technology.
The group has successfully evolved its service offering and inhouse capabilities
at pace with the rapidly developing floating solar PV market and is involved in
various multinational research and development (R&D) projects.
Energy Storage
Battery storage, or battery energy storage systems (BESS), are systems that
enable energy from renewables, like solar and wind, to be stored and then
released when electricity customers need power most, they are essential to
speeding up energy transition.
The ABL Group has established a recognised position as a trusted technical
consultant offering independent engineering and technical due diligence,
feasibility studies and owner’s engineering, route to market, modelling and
performance assessment, and strategic and regulatory advisory.
Wave & Tidal
Wave and tidal energy are vast untapped energy resources offshore. With
technology still in its early days, our group companies provide a comprehensive
range of technical, advisory, engineering and marine assurance services to
support developers at every project stage.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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When it comes to international maritime,
experience counts. ABL Group has a
maritime legacy spanning more than
150 years since the establishment of
the Salvage Association, and in bringing
together the trusted reputations and
expertise of AqualisBraemar and LOC,
we are the leading market provider of
loss prevention, loss management and
engineering & consulting services to the
global maritime industry.
With our entrenched legacy in providing expert support to marine casualties of
any type and size worldwide, ABL Group combines expert knowledge with strong
collaboration and insight, to deliver a fast, effective response to even the most
urgent shipping challenge.
Global Presence in all Maritime Hubs
We have offices located in all major maritime and shipping hubs around the world.
We employ a wide range of experts with backgrounds in different areas of the
shipping and maritime industry.
We have vast experience in all shipping and maritime-related matters including
marine casualties, salvage and wreck removal, hull and machinery, P&I claims,
fixed object damage, pollution, personal injury, and ports and harbours, marine
accident investigation amongst other areas. Our reputation covers work in ports &
harbours, small craft, global shipping, defence and yachts.
Shipping
Our teams of experts support international shipping with our full range of
engineering and consulting, loss prevention and loss management services.
We bring together the deepest pool of multi-disciplinary expertise to support all
areas of shipping, from early advisory and technical due diligence, navigational
planning, early engineering, vessel design and modifications, through to operations,
with surveys, inspections and audits, as well as world-class marine warranty survey,
to supporting in the minimising of losses with marine casualty management,
salvage & wreck removal, and expert witness work. ABL Group is at the forefront
of rapidly responding to marine casualties worldwide. We have worked on marine
casualties of all scales, including some of the largest and most complex incidents
in recent history. Our global network of offices enables us to provide a veritable
24/7 global emergency response service.
Global Marine Emergency Specialists
Our global maritime teams provide valuable technical support to the attending
casualty specialists, with a range of services to manage the loss, support in any
salvage and removal operations, and to conduct marine casualty investigations to
understand the cause of the accident.
Ports and Harbours
ABL Group provides a comprehensive range of services necessary for port
development, modification, and operation. Whether to develop the modern and
efficient port infrastructure needed for the latest generation of cargo ships, to
LNG and increasingly Hydrogen and other clean fuel terminals, to supporting
ports for the needs of offshore wind construction, or assisting with ports reducing
their carbon emissions, the ABL Group has the expertise and tools for our clients.
Our ports and harbours team offer marine studies, including technical due
diligence, and engineering consulting services to assist in the development of
new and existing port projects.
Maritime
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Leading on decarbonising the maritime sector
The International Maritime Organisation (IMO) has made a commitment
to cutting greenhouse gas emissions from international shipping by at
least 50% by 2050 compared to 2008 levels.
ABL Group along with group company Longitude Engineering, have
developed specialised in-house capabilities to provide comprehensive
advice and technical support to clients in their transition to more
sustainable shipping solutions. Our services cover support from early
advisory and feasibility, through to design and build, and subsequent
marine and risk assurance.
Clean shipping system design
Through expertise in electrical engineering, marine-based green
technologies including hybrid-propulsion, fuel-cell and battery
technology, combined with Longitude’s IMT-OSD unit’s long-term
vessel design and engineering expertise, and group company Innosea’s
specialist capabilities in feasibility and analysis of marine renewables, we
as a group are highly experienced in supporting with the detailed concept
design, engineering, analysis and integration of clean shipping systems.
Marine emissions tracking
We bring an in-depth understanding of industry frameworks such as: The
Poseidon Principles, The Sea Cargo Charter and Port Emissions Toolkit,
combined with long-term expertise across different segments of the
maritime industry.
We provide tailored consultancy and engineering solutions, which will aid
clients in their understanding of their carbon and pollutant footprint, and
help them in setting up a viable roadmap for future carbon-reduction and
compliance with ESG commitments and industry frameworks.
emiTr is an ABL group digital tool, an easy-to-use inventory of the
complex web of a port’s emissions, mapping their both direct and indirect
sources, developed by ABL group in collaboration with Shoreham Port
– a UK Trust Port. emiTr gives ports and harbours the power to track
emissions, calculate the cost and risk of their emissions, and facilitates
the necessary data and information to put down a roadmap to take action
against your emissions footprint.
Defence
ABL Group is a well-known and trusted provider of marine and engineering
consulting services to the maritime defence sector. Along with our group company
Longitude Engineering, we are well equipped and experienced in managing highly
confidential projects for the defence sector across the world.
Our services include naval architecture and engineering for vessel design,
conversion and upgrades, advanced analysis and simulation services, marine
systems engineering and consulting, marine operations engineering, marine
assurance and risk services, as well as support in expert witness, claims and
litigation.
Small Craft
We offer a wide range of marine and engineering consulting services to support
small craft across the maritime, oil & gas, defence and renewable sectors,
providing technical support at any stage of an asset’s life-cycle. From Small Patrol,
passenger, rescue and rigid inflatable boat design to small boat modifications,
Longitude develops design both independently, or by working alongside the
client’s design team.
Superyachts
A trusted partner to the insurance industry, yacht brokers, management
companies and owners worldwide, ABL Yachts offers clients the strength of
a large multi-disciplinary superyacht survey team with a collective experience
measured in hundreds of years, combined with the heritage and support of one
of the marine industry’s most respected brands.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Through-life marine and engineering consulting
for Oil & Gas projects
ABL Group provides services at every stage in the lifecycle of an oil and gas
project. Between our group companies, we have the knowledge and experience
to support right from the start at feasibility, early development and engineering,
right through to marine warranty survey, operations and maintenance and end of
life support with either life extension support or decommissioning.
Our clients come to us for a full range of services from surveys, inspections and
audits to marine and engineering consulting, and engineering and design. We are
the world number one provider of marine warranty survey for oil and gas projects,
and also provide a world-leading support package for rig operations on a global
scale.
World-leading in Oil & Gas MWS
Over the years we have acted as MWS on more than 1000 large energy
infrastructure projects of all types, as well as thousands of other smaller marine
operations.
Our work has included the world’s leading energy insurers and underwriters,
as well as oil and gas majors. We are also experienced in providing tailored
solutions to smaller energy operators, EPCI companies, oil and gas field service
and equipment companies, vessel owners / charterers etc.
Upstream
We provide far-reaching multi-disciplinary expertise supporting rigs throughout
the lifecycle of an asset. We offer market-leading services supporting rig moves
and rig inspections for rigs of all types and sizes, both onshore and offshore, and
anywhere in the world with services including geotechnical engineering support,
engineering consulting, MOU transportation MWS etc.
The ABL Group is the market leader in marine warranty survey (‘MWS’) on
offshore T&I operations for upstream infrastructure, with a long track-record in
providing technical support to some of the world’s most high-profile and complex
production platforms and floating infrastructures.
Midstream
ABL Group’s oil and gas specialists have been at the forefront of offshore
midstream development for over 20 years. Our teams of marine and engineering
consultants include specialists in subsea pipeline engineering and SURF
technology, with project experience covering some of the world’s most high-
profile and complex subsea pipeline installation projects, including NordStream 2,
Turkstream, Trans-Anatolian (‘TANAP’) amongst others.
World-leaders in marine warranty survey for pipeline installation, we have an
in-depth practical and theoretical understanding of key challenges in pipeline
projects and provide comprehensive risk-mitigation strategy, we also offer a
range of other marine assurance and risk services, engineering and consulting,
to support pipelay work at different projects stages, including with removal
operations at decommissioning.
Our engineering and consulting experts from group company Longitude
Engineering includes expertise in marine operations engineering, metocean and
coastal engineering, advanced analysis and simulation, amongst other areas.
Natural gas is the fastest-growing fossil fuel at over 20% of the global energy
mix, with the incentives it can offer as a ‘transition’ fuel as the lowest emitter of
greenhouse gases compared to oil and coal. As a result, the demand for global
LNG is projected to continue to grow.
ABL has stayed ahead of this market growth, by supporting as MWS on a number
of the world’s most significant LNG developments, including Ichthys, Gorgon,
Yamal LNG and LNG Canada.
With energy specialists across our network of global
offices and our wider global footprint of specialist
consultants across more than 300 locations, ABL
Group has the market-leading technical expertise to
support clients regardless of the project size, type,
complexity, and anywhere in the world covering
upstream, midstream, onshore and refining and
petrochemical projects.
Oil & Gas
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Onshore
In recent years, very large construction projects are being executed with
worldwide procurement strategies requiring significant marine transportation
campaigns to bring high-value items such as modules, pre-assembled units
(PAUs), vessels, equipment and other materials from their place of fabrication/
supply to the final site location.
Such projects include multiple loadout, transportation and offloading operations
occurring simultaneously in multiple locations. With our far-reaching global
footprint and effective centralised global management systems, we have provided
seamless MWS, marine assurance and risk, and engineering and consulting
services to support onshore projects since the 1980s.
Whilst a significant number of recent projects have been for the construction of
LNG export facilities, we have also provided our services to petrochemical, mining
and power projects, and for major civil infrastructure projects such as bridges,
ports and harbour complexes.
As well as MWS, the wider ABL group offers a broad range of specialised
capabilities in engineering and consulting, and marine assurance and risk, to
provide all-round third-party support to a cargo transportation by sea or ocean,
from early planning of the operation, right through to successful, safe and
optimum delivery of the operation.
Refining & Petrochemical
ABL Group has a world-leading track record and trusted reputation amongst
the insurance and underwriting markets, as marine warranty surveyor (MWS) on
large-scale onshore projects and for project cargo. The development of refining
and petrochemical plants more often than not would require sea and ocean
transportation of critical and high-value modular assets from different global
locations. ABL is well-placed to support with MWS and marine and engineering
consulting for the de-risking of critical marine operations.
Loss Adjusting
Our loss adjusters are industry leaders in the adjustment of Upstream, Midstream
and Downstream Oil & Gas insurance claims.
With engineers in all disciplines located globally, our adjusting expertise extends
across Energy, Power, and alternative power sectors in both the onshore and
offshore environments.
Decarbonisation and Hydrogen
The energy transition is accelerating and the ABL Group are leading in a
number of areas, from exploring how offshore wind can help reduce the
carbon intensity of offshore oil and gas assets to working with clients on
proving the hydrogen value chain across all our markets.
Through our OWC unit, we have authored feasibility studies for owners
of offshore oil and gas assets in the North Sea and undertaken work in
preparation for the Scottish INTOG (Innovation and Targeted Oil and Gas)
leasing round, a round to apply for the rights to construct offshore wind
farms specifically for the purpose of providing low carbon electricity to
power oil and gas installations and help to decarbonise the sector.
We also have an active and sought-after Hydrogen team that work across
a number of areas, examples are:
• Hydrogen strategies and road maps for public, semi-public bodies, and
large corporates such as OWC’s work for the Asian Development Bank
and INNOSEA’s for the Offshore Hydrogen Analysis and Road Map for
France project
• Owner’s engineering by including engineering FEED review for Air
Product’s NEOM Green Hydrogen project in Saudi Arabia
• Design of the hydrogen fuel cell powered seagoing ferry, the HYSEAS
III project for CMAL
• The development and design of a green hydrogen production and
bunkering barge for mid-sized ports for the DFT and InnovateUK
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Members of the Board
Glen Rødland
Glen Rødland is an independent investor and is the chairperson and board
member in Prosafe SE, SES-X Marine Technologies and ATDL AS, as well as
ABL. He was a senior partner at HitecVision for four years, and for ten years
was a partner and co-investor of Direct Active Investments in Ferncliff TIH
AS. Mr Rødland has worked for 15 years with portfolio management, financial
analysis, and investment banking for DNB (Vital) and Swedbank (formerly First
Securities and Elcon Securities). In addition, Mr Rødland has also worked in the
shipping company Jebsens and as a management consultant in PWC. He has
MBA and Post Graduate studies in Finance from NHH and UCLA. Mr Rødland is a
Norwegian citizen and resides in Bærum, Norway.
Rune Eng
Rune Eng has significant experience from his many years in the energy sector.
His last position was Executive Vice President International of the TGS. He was
previously CEO and President of Spectrum Geo Limited (subsequently sold to the
TGS Group), a position he held for almost nine years. Mr. Eng has also held various
roles at PGS ASA over a period more than 13 years as well as roles in Fugro, Digital
Equipment Corporation A/S and GeoTeam Group. Mr. Eng holds a Bachelor of
Science in Geophysics from the University of Oslo and a Master of Science in
Geophysics from the University of Gothenburg. Mr Eng is a Norwegian citizen
and resides in Oslo, Norway.
Yvonne L. Sandvold
Yvonne L. Sandvold is the founder and Chief Executive Officer of YLS
Næringseiendom and the Chair of the Board of Frognerbygg AS. She has
extensive experience in the Norwegian real estate industry. Ms Sandvold
currently serves on the board of several private and public companies. She holds
a cand. psychol. degree from the University of Oslo. Ms Sandvold is a Norwegian
citizen and resides in Oslo, Norway.
Synne Syrrist
Synne Syrrist is an independent business consultant and has extensive
experience as a non-executive director of both private and public companies.
Ms Syrrist was previously a partner and financial analyst at First Securities. She
currently serves on the board of several public companies, including Awilco LNG
ASA, Awilco Drilling Ltd and Naxs AB. She holds an MSc from the Norwegian
University of Science and Technology and is qualified as an authorised financial
analyst at the Norwegian School of Economics and Business Administration. Ms
Syrrist is a Norwegian citizen and resides in Oslo, Norway.
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Executive Management
Reuben Segal
Reuben Segal has over 20 years’ experience in the offshore and shipping sectors,
covering both engineering design and ship surveying. He is a naval architect
and has extensive recent global business development experience with a focus
on design and construction of offshore oil and gas assets, including MODU
and MOPU units from FEED through to yard delivery. He has held many senior
executive roles in the industry, most recently COO of ABL Group. He holds
a Master’s degree in Engineering from the University of Newcastle. Mr Segal
resides in Dubai, UAE.
Dean Zuzic
Dean Zuzic is an experienced CFO who has more than 30 years’ finance and
management experience. He has held CFO roles at Oslo-listed seismic players
TGS-NOPEC Geophysical Company ASA and Spectrum ASA. Prior to this,
Zuzic held CFO positions at Norwegian recycling group Norsk Gjenvinning,
home textile retailer Kid Interior and Nordic retail group Plantasjen. He started
his career with McKinsey & Company and has also worked as an equity analyst.
Svein O. Staalen
Svein O. Staalen has over 20 years professional experience from law firms and
in-house legal positions, with particular experience from maritime and energy
industries. He holds a Master’s of Law degree from the University of Oslo and
a Diploma in English Commercial Law from the College of Law, London.
Mr Staalen is a Norwegian citizen and resides in Bærum, Norway.
RV Ahilan
Dr Ahilan is a Chartered Engineer with over 30 years’ of industry experience,
25 years of which has been at board level. Previously he was CEO of LOC and
has held leadership roles in DNV GL, GL Garrad Hassan and Noble Denton.
With expertise in hydrodynamics, he has led projects which have set standards
and safety factors in jack-up site assessment, mooring systems and marine
transportation. He is an Advisory Board Member of WavEC Offshore Renewables
and a Trustee of the charity Marine Technology Trust and was Non-Executive
Director a vertical axis wind turbine company. He holds a BSc (Leeds) and
MS (Caltech) in Civil Engineering, a PhD (Cantab) in Engineering Fluid Mechanics,
an MBA (Imperial) and is a Fellow of the Royal Academy of Engineering.
Bader Diab
Dr Bader Diab is one of the founding members of the ABL group and currently
holds the position of Chief Operating Officer. He has worked in the offshore
energy industry for more than 30 years including postings in the UK, Middle
East and United States. Bader has held senior management positions in several
offshore and marine consultancies including a recent position of Regional
Managing Director – Americas with the ABL Group.
Bader is a Civil / Structural engineer with experience in the global performance
of offshore structures, including transportation and installation, and the design of
MOUs. He is a registered professional engineer in the states of Texas and Alaska.
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ABL Group finishes 2021 larger again,
another doubling in size, bringing a
significant increase in opportunity, impact,
and responsibility. At ABL Group we
recognise that for our business to be
successful in the age of climate crisis and
energy transition, we must redefine what
we do in a genuine way to put sustainability
at the center of all strategy and operations.
Sustainability Report
In our 2019 Annual Report we presented a clear sustainability statement and
vision. This was a statement of intent with 5 key principles to guide and drive
our journey.
This has guided many decisions over the last 12 months:
• Continuing to increase the renewables and other energy transition share of
group revenues as we drive towards 50% by 2025
• Broadening our services to help clients decarbonise other sectors such as
maritime and oil and gas,
• Creating a Chief Energy Transition Officer role at the executive management
level to bring innovation and new services to help our clients decarbonise and
the world transition safely but as fast as possible
• Rolling out BS EN ISO 140001:2015 across our global operations
• Working to improve diversity and put a number of foundational policies in place
• Supporting the community, focusing on aligned areas, consistent with our
SDGs, with staff and company contribution and volunteering
This Sustainability Report will describe our actions to continually improve the
integration of the United Nations Global Compact and its principles into our
business strategy, culture, and daily operations. By including this in our Annual
Report to shareholders, we also show our commitment to sharing this information
with our stakeholders using our primary channels of communication as a key
document in our Environmental, Social, and Governance (“ESG”) reporting.
Reuben Segal
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Importance to Stakeholders →
Significance of Impact →
Air-flight Driven
Emissions
Innovation in service
& Operations
Human Rights
Business Ethics, Anti-corruption
& Transparency
Safe and healthy office Environment
Staff Acquisition & retention
Diversity & Equality
Sustainable Markets
Supplier Emissions
3 5 8 16
5 16
5 16
7 13 14
13
13
7 13 148
Customer Satisfaction
8
Energy Transition
and Climate
7 13 14
3 5 8 16
16
In February 2020 we became a signatory
of the United Nations Global Compact
and published our first Communication of
Progress in February 2021. AqualisBraemar
LOC re-affirms our commitment to the ten
principles of the UN Global Compact in the
areas of human rights, labor, environment
and anti-corruption. This report is shaped by
the Sustainable Development Goals (SDGs)
introduced by the United Nations in 2015.
In 2020 we performed our first materiality assessment to explore our priorities on
sustainability. We explored and evaluated the aspects of our business that have
the biggest environmental, social and governance impact.
The seven materiality topics that we considered to have most impact on
and the most importance to AqualisBraemar LOC and our stakeholders are:
• Safe and healthy attendances
• Business ethics, anti-corruption, and transparency
• Staff acquisition and retention
• Customer satisfaction
• Diversity and equality
• Sustainable markets
• Energy Transition and climate
After our initial benchmarking materiality assessment we consider these seven
SDGs have the highest importance to AqualisBraemar LOC and our stakeholders.
We further grouped the SDGs we have key focus on into two groups:
• Employee focused, so how we do business
• Business focused, so where we do business
Guiding purpose in this initiative is:
Energy and the oceans are at the centre of our business; the sustainability
of both is vital for the future of our company and the world in which we
operate and live.
Our Employee Focus
How we do business
Our Business Focus
Where we do business
The Report
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Human Rights
Over the past year, ABL Group has gone through a large amount of change. During
this transition, we have had to deal with a change in our culture and changing
work environments resulting from the pandemic. We understand the importance
of our people and how each and every one of our employees has a part in driving
the business forward. In order for that to happen successfully, we need to make
sure we are investing in them where appropriate. A safe, clean, healthy, and
sustainable environment is integral and without a healthy environment we are,
unable to fulfill our aspirations.
We remain committed to the United Nations Global Compact and its goals
surrounding Human Rights. Our Corporate Code of Conduct remains in place for
the business which advocates high standards of honesty, integrity, and ethical
behaviour in our daily business and expects all representatives of our company to
conduct their daily business in a safe, fair, honest, respectful, and ethical manner.
People are also happier and healthier when they can be their best selves which
underpins high performance.
We are also pleased to report that there have been no suspected violations of our
policies in this area.
Throughout 2021 the company signed up for the Target Gender Equality Accelerator
Course and is reviewing the areas of improvement for the group against the WEP
Tool (The Women's Empowerment Principles Gender Gap Analysis Tool). As a
company, we have a lot of the basic principles in place but have significant room
for improvement surrounding our recruitment processes and further work to be
done providing stand-alone and clearer policies on Diversity & Inclusion.
Throughout 2020 we celebrated the achievements of women engineers and we
continued this throughout 2021 to promote diversity and development across
the workplace and within our industry. A member of our staff joined the GWEC’s
development program for “Women in Wind” and has since been approached
to participate in a radio p on BBC World Service called “The Conversation”,
in which an episode is being made with women working in the green/clean/
renewable energy sector. In July 2021 we also hosted and participated in a
panel discussion for Women in Shipping on Engineering Diversity for the
future. This is an area that we would like to concentrate on looking forward
and with the help of the Target Gender Accelerator Course, we should be
able to set some specific goals. Over the past year, we have employed 157
new employees – 31% of these hires were female compared to 26% in 2020.
Although this is a small increase, we see this as an improvement for a maritime/
Oil & Gas business that has historically been a male-dominated environment.
Within the ABL Group we promote our staff internally and externally through a
number of “Meet the Team” blog posts. This helps to promote the skills set we
have across our regions and to further integrate our employees with one another.
As a joint business, we now have an enhanced global footprint with around 45
nationalities amongst our employee base. We value the diversity and inclusion
of the people with whom we work, and we are committed to equal opportunities.
For 2022 ABL intends to make sure we are upholding fair employment practices
through education, recruitment, training, and employee wellbeing. In 5 years, time
it is said that around 75% of the workforce will be made up of Millennials, however,
we do not limit people´s opportunity to contribute or advance based on age,
childcare responsibilities, disability, ethnicity, gender, gender expression, sexual
orientation, religion, pregnancy, or other protected personal characteristics.
We believe that a motivated and satisfied workforce is a key enabler of individual
and business performance. As the business grows, we will be able to provide
further career and development opportunities. It is important to engage with
our employees to drive change in a meaningful way to work collaboratively and
enhance the power to make a difference and the impact to serve our company’s
mission and vision.
2020
25.25%
Female
74.75%
Male
40%
Female
60%
Male
26%
Female
74%
Male
2021
25.19%
Female
74.81%
Male
50%
Female
50%
Male
31%
Female
69%
Male
Employee Diversity
American 3.3%
Australian 3.2%
Bahamian 0.2%
Bahraini 0.3%
Brazilian 3.2%
British 30.2%
Bulgarian 0.8%
Canadian 2.2%
Chinese 6.6%
Croatian 0.2%
Czech Republic 0.2%
Danish 0.3%
Dutch 1.5%
Egyptian 1.5%
Filipino 0.3%
Finnish 0.2%
French 6.0%
German 1.0%
Greek 1.2%
Indian 7.0%
Indonesia 4.0%
Irish 0.8%
Israeli 0.2%
Italian 1.0%
Japanese 0.3%
Korean 0.7%
Lithuanian 0.2%
Malaysian 3.3%
Mexican 3.0%
New Zealand 0.2%
Norwegian 1.0%
Pakistani 0.2%
Polish 0.8%
Portuguese 0.2%
Romania 0.2%
Russian 0.5%
Singaporean 6.1%
South African 1.5%
Spanish 1.7%
Taiwanese 0.3%
Thai 2.7%
Turkish 0.3%
Venezuelan 1.8%
Nationalities
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Following our WEP analysis, it is clear we will also need to conduct further reviews
around the gender pay gap and we are currently looking at new recruitment tools
to help us track further elements surrounding diversity. Through the new ATS
system, we will be able to clearly track and report on specific gender statistics
and take proactive steps to recruit women at all levels within the organisation.
• Gender balance in total in the company
– for 2021, 163 females and 484 males
• Employees in part-time positions
– 21 part time employees – 12 Female and 9 Males
• Average number of weeks of parental leave for women and men
– Women 24 weeks, men 4 weeks.
• Employees who work involuntary part-time
– None
There are still a number of activities to undertake which includes reviewing our
appraisal system and tying in staff and development goals with retention rates.
Throughout 2022 we have signed up to put a large number of our employees
through specific training courses relating to leadership and management.
We want to invest in our employees and provide them with the best tools that
they need to succeed, and our next generation of leaders are equipped to deal
with issues that may arise within the task force. The business is restructuring to
include a more structured shared service centre for the group and we have filled
the position of a Group Training Manager.
One of our subsidiary companies within ABL Group has been piloting a series of
training courses looking at an Introduction to Line Management with a series of
modules taking place over a 12-month period. As this has proven to be successful,
we will be looking to roll this out across other areas of the business. Such topics
include interviewing, motivation, and how to manage a flexible/hybrid team.
We updated our maternity and paternity policies throughout 2021 to make
them more family-friendly and will be putting more focus into looking at our
STEM returners (including those returning from maternity leave). We will also
be reviewing further support policies such as fertility treatment / fostering /
surrogacy / international adoption
Looking forward the company is looking to set up an ESG Committee. This will be
made up of smaller inclusion councils looking at specific areas for improvement
within the business, i.e diversity and inclusion, good well-being, etc. We believe
this will lead to better collaboration, understanding, and communication between
our employees. The idea would be for these smaller groups to meet regularly to
set plans and objectives for the coming years and monitor progress.
Due to the nature of the business, we do not have specific external audits related
to Human Rights Performance, however, this will be something that we will review
internally throughout our ESG journey.
Labour
We value the diversity and inclusion of the people with whom we work and we
are committed to equal opportunities. We prohibit discrimination, harassment,
forced, trafficked, and child labour and are committed to safe and healthy working
conditions and the dignity of the individual. Workplace Integrity means fostering
and protecting a corporate environment that is inclusive, safe, and professional.
We do not limit people´s opportunity to contribute or advance based on age,
childcare responsibilities, disability, ethnicity, gender, gender expression, sexual
orientation, religion, pregnancy, or other protected personal characteristics.
At the end of 2021 we hired a new recruit in the capacity of Group Talent and
Acquisition Manager, who is currently reviewing our recruitment policies and
investigating an Applicate Tracking System to implement across all regions.
We recently introduced a 6-month LinkedIn Recruiter pilot, which will help us
drive traffic and create greater visibility/awareness both for the ABL Group as a
company as well as in terms of recruitment activity on LinkedIn.
The pilot includes a fixed number of sponsored job postings, direct access to
LinkedIn members (helping us to target the right people/talent), recruitment
marketing, and will provide a great opportunity for pipelining of candidates as well
as management of applications within the system.
The next step will be to roll out our new standard recruitment policy/process. With
the recruitment process rolled out and the ATS is in place we will be in a way
better position to support recruitment activities across the group, therefore able
to track our retention rates and report on our diversity across the group.
The pandemic continued throughout 2021 and the company has introduced a
much more flexible approach to work in many locations, a hybrid working pattern
has become standard. We maintain that the newly adopted way of homeworking
will not hinder any employees' chances of further development and career
opportunities within the organisation.
For 2022 we will be rolling out a new ABL Privacy Notice along with guidelines
around Personal Data Processing.
We also plan to roll out an employee survey globally in order to provide us with
feedback on our policies and processes. In line with the recruitment policy, we are
also planning on re-evaluating and designing a cleaner on/off-boarding process
to improve the employee experience. We will be exploring a global HRIS system
to assist us with implementing better and cleaner processes. Throughout 2022
we need to further our efforts in putting in measures to monitor and report on the
demographics of our management and employees by diversity factors.
Currently one of our affiliated companies operates an Engineer Development
Scheme and for 2022 we will be looking to roll this out globally across all divisions/
entities to broaden our skillsets and train young engineers for the future. Along with
expanding the graduate programme we will be looking to introduce a mentorship
program. This will not only be for those graduates within the programme but for
those members of staff looking to change roles or further their career in a specific
field within the group.
Due to new ways of working, moving forwards our company aims to put more
focus on our wellbeing programs. We would like to look at the promotion of
physical fitness, promotion of healthy work life balance and stress management.
We believe this will have a positive impact towards SDG 3 – Good Health
& Wellbeing.
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Mental Health is a big topic these days. We have been actively training staff on
Mental Health First Aid which in turn will introduce a series of in-house training
to line managers to be aware of signs and symptoms should any episodes occur.
We have also been piloting training sessions related to stress at work and will be
looking to roll this out to wider areas of the company. Additional councils will be
set up to look at the areas of emotional well-being, social well-being, and physical
well-being in line with our objective for setting up an ESG Committee. There are
a number of topics that we are seeing more and more in the media these days
relating to sensitive scenarios such as Menopause Awareness. We would like to
incorporate training elements for line managers over the next 12 months in order
for them to be aware of how certain medical changes can affect the workforce
and how to deal with this.
We want ABL to be a safe place with senior leaders being visibly involved in
looking at factors that contribute to effective diversity and inclusion.
At ABL we are committed to giving back to the economy and will be looking to
roll out a number of charity-based events linked to benefit the environment. We
believe that it is important to promote Team collaboration by taking part in social
activities and challenges for charity. In 2021 the company took part in a “Race the
Thames” challenge in support of seafarers. We want to explore more of these so
our staff can engage with each other across the globe, take on new challenges
physically and mentally.
Our employees have access to an Employee Assist Programme which remains
confidential. Throughout the pandemic, it has been important to promote this
service for those that have struggled with the change in the work environment.
Environment
Under sections 3-3a and 3-3c of the Norwegian Accounting Act, ABL Group is
required to report on its corporate responsibility. ABL Group recognise that Health,
Safety, and Environmental (HSE) matters are an integral part of its business
performance and exemplary performance in the areas of HSE is essential to fulfill
our vision and meet the expectations of our stakeholders.
Our ABL2030 guiding purpose, created and re-committed to in our 2021 Annual
Report, is that energy and the oceans are at the centre of our business; the
sustainability of both is vital for the future of our company and the world in which
we operate and live. Our purpose not only makes environmental sustainability
a responsibility for us in the way we do business, but also recognises that our
business impacts the wider world and that we need to take responsibility for
that too.
Though we are a company without any operating assets, we take our environmental
responsibilities very seriously and our Integrated Management System (IMS),
which is certified by LRQA, requires that all projects are reviewed for potentially
adverse environmental risks.
ABL Group considers it to be fundamental good business and management
practice to be able to identify, understand and take appropriate action on material
environmental risks and opportunities to the business, this is pursued via a
corporate risk management program and is independently audited as part of its
BS EN ISO 140001:2015 certificate.
This process is overseen by the Corporate Risk Committee which includes our
CEO, COO, General Council, and other senior management. The robust process
encompasses the following:
• Review the corporate risk management framework
• Ensure that risks facing the organization are identified, evaluated,
and adequately addressed
• Issue the corporate risk report on a quarterly basis and collate risks reported
by regions and business lines.
• Drive and support the further improvement of the risk management process
and provide business knowledge to the discussion of risks
We identified ‘Climate change and environmental sustainability’ as a material
business risks and this has resulted in a range of strategic and operational actions
to reduce the material risk to ABL Group’s business and reduced any negative
impact to climate change drivers, but also use our business activities to make
a positive impact on UN Global Compact SDGs. A summary is presented in the
table below.
Our ABL2030 ESG strategy includes two guiding principles that put environmental
sustainability at the core of our business:
• Principle 4. Work towards a company-wide net zero carbon target to stay
ahead of our markets & contribute to a net-zero world
• Principle 5. Continue to grow, innovate & develop new services to both
accelerate & de-risk the energy transition & create business value
In support to Principle 4, in 2021, we have completed the implementation and
accreditation of a group-wide environmental management system according to
Climate
Change Risk
• Climate change and environmental
sustainability
• Reducing offshore oil and gas market over
the medium to long-term due to the energy
transition driven by Paris Climate Agreement
• Overexposure to clients with negative
ESG profiles such as oil and gas
• Market pressure to measure and
improve our own ESG performance
• Loss of investor confidence and so
reduced share performance
• Reduction of oil and gas opportunities
over medium to long-term as market
shrinks, with additional competitive
pressures impacting pricing
• Reduce attractiveness as a place to work
for younger more value driven staff
• Establishment our ABL2030 ESG strategy
• Diversification into more sustainable market
segments such as offshore wind, onshore
renewables and maritime sectors such
as insurance, adjusting, shipping, expert
witness, Yachts, and Ports and Harbours
• Targeting 50% of our group revenues from
renewables and other energy transition or
sustainability-driven revenues by 2025
• Accreditation of our operations
to BS EN ISO 140001:2015
• The creation of the position of Chief Energy
Transition Officer on our executive team
Climate Change Risk Excerpt from Corporate Risk Register
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BS EN ISO 140001:2015. Our environmental management system is designed
and specifically structured to cover environmental aspects that ABL Group can
control and directly manage, and those it does not control or directly manage but
on which it can be expected to have an influence.
The aspects of ABL Group business that interact with the environment are
identified and evaluated. Appropriate processes are established to minimise
waste, use resources efficiently, encourage recycling and work towards a
companywide net zero carbon target.
In terms of supporting Principal 5 and so generating more revenues from
renewables and sustainability-driven services we achieved:
• Achieved 53% revenue growth in renewables bringing renewables share to
27% of group revenues
• Worked on 99 offshore wind farms with a total capacity of 68GW and carried
out over 100 MWS assi on renewable energy projects
• Formed and launched a new business unit serving the onshore wind, solar, and
energy storage and started work on a range of assignments including battery
storage feasibility studies
• Partnered on 20% of all capacity awarded in the 25GW ScotWind offshore
wind leasing process
• Opened renewables serving hubs in Ireland, France, and Brazil
• Established a climate change resilience capability and led a global industry-
wide survey of the impact of climate change on offshore wind
• Significantly expanded our green hydrogen capability and services with key
expert hires and project awards such as:
• Concept design of the HySeas III hydrogen fuel cell ferry for CMAL
• Design of hydrogen production barge for port bunkering
Following the merger in April 2021, AqualisBreamar & LOC Group aligned and
integrated their legacy QHSE management systems, Technical governance, IT
& HR systems, Branding, Legal, Commercial and Financial systems to eliminate
complexity and to standardise and harmonise across the group.
ABL Group provides broad consultancy services to the Energy and Maritime
sectors. In the capacity of a consultancy firm, ABL Group members may provide
advice and recommendations to the Client or the Site representatives about
the technical environmental aspects or issue and /or the site-specific HSE
implementation, however, the Client Management is responsible for directly
managing and maintain the workplace. Our Environmental Manual describes
roles and responsibilities that ABL places on all employees and subcontractors
in order to minimise the impact and to ensure the best available practices are
established and adopted. All new hires are given induction training that describes
the environmental issues and risks applicable to their role, this is then reviewed
annually and communicated to the staff via QHSE consultation and participation
methods such as QHSE Committee, Staff Briefings, Team Meetings, Internal
Bulletins, and Flashes and Internal SharePoint Site.
In 2021 we began measuring our environmental impact in the offices – the phased
return of the employees to the premises as well as bringing together management
systems from legacy companies allowed us to review and evaluate the practices
and implement standardised system across all offices.
ABL Group conducts its business in a manner that prevents harm to people, the
environment, or assets. We are committed to creating a work culture where the
prevention of harm is a priority for everyone.
In April 2021, we established a company-wide Integrated Quality, Health, Safety,
and Environmental management system ensuring consistent processes and
systems within the ABL group. Our Integrated Management System Manual is a
comprehensive document establishing processes and policies required to fulfill
our legal requirements, client expectations, and most importantly to ensure the
health and wellbeing of our employees. Further, Rigorous procedures have been
established to identify and manage HSSE risks, Business, Contractual and Legal
risks and capitalise on opportunities.
Our Management System was subject to a Global external certification audit by
LRQA in November 2021. The outcome was quite positive and ABL has been
certified to ISO 9001: 2015, ISO 14001: 2015, and ISO 45001: 2018.
ABL Group Combined Health, Safety and Environmental Statistics for 2020 can be
seen in the graphic on the right.
Overall, ABL Group reported 2 lost time injuries in 2021 and the lost time
injury frequency rate per million person-hours is at 1.14.
1
These incidents were
investigated and lessons learned have been disseminated. Our aim in 2022 is to
reduce the number of recordable injury cases through improved processes and
internal training.
As part of improving the HSE culture, ABL launched HELP (Hazard Elimination
and Learning Program), a behavioural-based safety observation program in May
2021. This program facilitates to capturing all near-misses and HSEQ observations
at client sites and ABL Group premises and addresses safety issues with all
stakeholders involved. A total of 167 HELP cards were initiated by ABL employees
in 2021.
ABL Group
Combined Statistics
FY 2021
3 0
1,756,640 0
1.14 0
3 2
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Furthermore, in 2021, we focused on increasing environmental awareness and
implemented various green initiatives within ABL Group operations.
Competence development is critical for ABL Group to achieve HSE objectives
and build a culture of effective HSE practices. In addition to the mandatory HSE
training, an e-learning program focusing on the HSEQ management system and
internal processes was rolled out to all staff in 2021.
1
Anti-corruption
The Board of Directors has approved and implemented corporate governance
principles endorsing and complying with the Norwegian Accounting Act (§ 3-3b)
and the Norwegian Code of Practice for Corporate Governance (Code of Practice)
issued by the Norwegian Corporate Governance Board.
ABL Group is committed to conducting its business in a manner that adheres to
the highest industry standards and strictly in accordance with applicable laws
and regulations in the regions and countries where were operate.
The Group advocates high standards of honesty, integrity, and ethical behaviour
in its daily business and expects all representatives of ABL Group to conduct their
daily business in a safe, fair, honest, respectful, and ethical manner.
ABL Group has a corporate compliance officer, employees are provided
training on compliance and are instructed to report suspected violations of the
Group’s code.
All staff must complete e-learning modules that support our policies. Our goal
is continuous improvement, and we are focusing on improving anti-corruption
monitoring and reporting.
In 2021, new training on Cyber security and refresher training on Anti Bribery
and Corruption compliance were rolled out. Over 80% of staff have completed
the Anti Bribery and Corruption refresher training and 50% have completed the
Cyber Security training. A total of 1550 users were registered on the Ethics
and Compliance training platform and each employee spent an average of 1.3
training hours.
In line with the ABL Group Training Matrix, all new starters are signed up for Anti
Bribery & Corruption Compliance and Cyber Security training with immediate
effect following the appointment, and refreshers are conducted every 3 years.
The ABL Way of Doing Business - Corporate Code of Ethics and Business Conduct
sets out the basic rules and standards of behaviour expected on matters that
are important to our company and to conduct our business in an ethical and
compliant manner in accordance with our values. This handbook is also shared
with our freelancers via the freelancer QHSE Package. Both staff and contractors
must acknowledge the reading and understanding of the requirements. The Code
of Conduct gives general instructions on employees’ responsibilities in preventing
bribery and corruption in business dealings, including reporting suspected
Violations. The Code of Conduct is further supported by our internal SOP18 on
Regulatory Compliance. This focuses further on our compliance requirements
with international laws, including sanction laws described in SOP15.
Our Code of Conduct states that our staff has the option to report to their Line
Manager, our General Counsel or Group Operations Director. We have recently
created and published a Whistleblowing Policy that supports all grievances
or suspected wrongdoing instances. This includes bribery, fraud or other
criminal activity, miscarriages of justice, health and safety risks, damage to the
environment, issues in the workplace, and/or any breach of legal or professional
obligations. This policy covers all employees, officers, consultants, freelancers,
contractors, work experience or internship workers, volunteers, casual workers,
and agency workers of ABL Group. We stress confidentiality will be protected
where appropriate and that we will not penalise or discriminate against anyone
who provides information to the company relating to what they believe is corrupt
or unethical practices.
Regarding taxation, our policy is one of full compliance with all relevant domestic
and international laws, rules, and regulations. Management of our tax affairs is
also consistent with our ethics policy and code of business conduct, which are
built around fairness, openness, and honesty. As a listed company we must also
demonstrate full compliance in these areas.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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SDG
ABL Key
Topics
Year
Started
Action Status & Progress Completion
3
GOOD HEALTH
AND WELL-BEING
Health & Safety
in office/
attendance
2021 Review Mental Health coverage and training Medical Coverage in each region was explored and
some small training programmes rolled out for mental
Health and working from home in some locations. Goal
to be explored further in 2022 with specific training
topics rolled out and in some regions employees looking
at mental health first aiders (50%)
2021 Review Substance abuse Policy and health schemes reviewed (100%)
2021 Post pandemic a more flexible working
pattern will be established
Implemented (100%)
2021/
2022
Encouraging all staff to take a health check
assessment
Done ahead of most lock downs but needs to be
readdressed in 2022 following the pandemic and
introduction of hybrid working so will return to the
beginning (0%)
2021/
2022
Develop Mentoring programme across the
business stream
For 2021 no progress – will be a push in 2022.
This also will go hand in hand with expanding the
Graduate Scheme for all divisions globally. (0%)
2022 Expand the Graduate Training Scheme
globally
Process underway for September 2022 intake (10%)
2022 Mental Health Intiatives & Training 15%
5
GENDER
EQUALITY
Diversity
and Equality
Human Rights
2021 Review and amend our non-discrimination
policy
Completed (100%)
2021 Review and assess topics around gender
pay gap
Reviewed in Target Gender Eqality Accelerator course
but not yet actioned (25%)
2021 Review and suggest improvement of
recruitment policies
Revisited with the hire of Group Talent & Acquisition
Manager. Draft in progress and will be implemented
along with a new ATS System (75%)
2021 Review our internal appraisal system and
assess possible line management training
need
Pushed to 2022 and in line with exploring a complete
HRIS system (0%)
2022 Management Training Programme for Ashridge Training School rolled out for
2022 training (50%)
2022 Programme for STEM Returners
2022 Review additional Family Friendly Policies
2022 Review and implement a separate D&I Policy
2022 Implement a more comprehensive ABL
Privacy Notice along with guidelines around
Personal Data Processing.
Process started (75%)
2022 Roll out an Employee Engagement Survey
2022 Research and start to implement a global
HRIS System
Process beginning (5%)
3
AFFORDABLE AND
CLEAN ENERGY
Energy
Transition
& Climate
2021 Launch 2 new services in either renewables
or sustainability sectors
Recruited and launched a Wind & Site service and an
Onshore Wind, Solar & Energy Storage business unit
within 2021 (100%)
2021 Grow renewables business by 40% Grew renewables by 53% in 2021 (100%)
2022 Launch 2 new services in either renewables
or sustainability sectors
SDG
ABL Key
Topics
Year
Started
Action Status & Progress Completion
Energy
Transition
& Climate
2022 Grow renewables business by 25%
8
DECENT WORK
AND ECONOMIC
GROWTH
Human Rights
Health & Safety
in office/
attendance
Diversity
and Equality
2021 Develop a Formal Human Rights Policy Completed (100%)
Ongoing Zero lost-time injuries, medical treatment
cases or restricted work cases in the office
or attendance environment
ABL Group reported 2 lost time injuries in 2021
(0 in 2020) and the lost time injury frequency rate per
million person-hours is at 1.14 (1.00) in 2020).
Full stats in Report.
13
CLIMATE
ACTION
Sustainable
Business
Model
Innovation
Air Flight Driven
Emissions
Suppliers
Emissions
2021 Audit the whole group to determine a
baseline CO2 emission for the group and
put in place a carbon accounting system
Integration between AqualisBraemar and LOC Group
slowed down progress, however, we now have BS EN
ISO 140001:2015 across all operations. We plan to have
a baseline audited within 2022 (20%)
2021 Roll out ISO 14001: 2015 across all offices in
by the end of 2021
Completed (100%)
2021 Develop our clean shipping service line Integrated our Group-wide capability to market
capability, won first contracts and acquired OSD-IMT a
vessel design company to bolster our capability in this
segment. (100%)
2022 Review Travel Agents globally and review
our carbon footprint
2022 Implement a new electric car benefit
scheme in UK
Started (10%)
14
LIFE
BELOW WATER
Diversity
and Equality
Human Rights
2021 Launch 2 new services in either renewables
or sustainability sectors
Recruited and launched a Wind & Site service and an
Onshore Wind, Solar & Energy Storage business unit
within 2021 (100%)
2022 Launch 2 new services in either renewables
or sustainability sectors
16
PEACE, JUSTICE
AND STRONG
INSTITUTIONS
Business
Ethics &
Anti-Corruption
2021 Roll out relevant 3 year Ethics and
Compliance re-training to staff
All new starters are signed up for Anti Bribery &
Corruption Compliance and Cyber Security training with
immediate effect following the appointment,
and refreshers are conducted every 3 years.
2021 Review the need to incorporate additional
training to staff in countries that score low
on Corruption Perceptions Indexes
Not started in 2022, planning started and will be rolled
out in 2022. (5%)
17
PARTNERSHIPS
FOR THE GOALS
All SDGs will
contribute
to Number 17
in some way
2021 Align our ongoing sustainability reporting
metrics to the SDGs
Continuous Progress
2021 Set specific improvement goals Continuous Progress
2021 Conduct internal trainings across our
organization to educate our employees
about ESG
Due to merger between AqualisBraemar and LOC
Group this action has been slow, we will progress in
2022 (10%)
2021 Supporting initiatives to promote
transparency and anti-corruption, e.g., UN
Global Compact
Continuing to commit to UNGC goals
2021 Support initiatives to promote human
rights in our business areas, e.g., Neptune
Declaration
Signed up to Neptune Declaration and continue
to promote awareness. Will continue to explore
opportunities.
2022 Setting up an ESG Committee including
separate inclusion councils
Structure agreed, will be set up in H1 (15%)
Progress and 2022 goals
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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In recognition that our guiding purpose
is that the sustainability of the world in
which we operate and live is vital for the
future of the company, we report here in
the continued development of our group-
wide CRS programme. This programme
encourages colleagues to take time out of
their working day to engage in charitable
and social initiatives.
Last year we selected initiatives, which each touched on a number of topics driven
by the UNGC and that intertwine with the SDGs, namely human rights, health and
safety on attendance, and energy transition & climate goals. Furthermore, they
promoted our SDGs among individuals in the company and created a space
for colleagues to engage in a positive way with the communities and sectors in
which we work and live. The activities also brought teams closer together in a
non-work environment, encouraging a positive and meaningful culture.
Here is a summary of some of our activity:
ABL Group becomes a signatory of the Neptune Declaration
ABL Group was proud to join more than 850 organisations as a signatory of the
Global Maritime Forum’s Neptune Declaration on Seafarer Wellbeing.
The initiative was set up in response to the pandemic’s adverse impacts on
seafarer safety and wellbeing, namely the crew change crisis and challenges
in vaccinating seafarers. It calls for signatories to promote 4x main actions, as
communicated in our graphic.
Recognising that many of our own staff come from seafaring backgrounds, as
well as the risk to both human and operational safety at sea, posed by the crew
change crisis, we felt compelled to become a signatory in April 2021.
Since then…
• We continue to promote the Neptune Declaration and our support for this
initiative, at all relevant maritime events incl. monthly maritime market briefings
• We report intermittent news as we receive it on the declaration, on our
corporate Linkedin page
We hope that our vocal support for this initiative, has encouraged others in the
industry to become signatories as well.
Support for The Mission to Seafarers
In connection to the above, we announced our group-wide support for the
important work of the Mission to Seafarers (MtS) in May 2021.
The Mission to Seafarers is a global charity, which provides practical, emotional
and pastoral support to seafarers and their families via a network of over 200
ports worldwide.
In promoting our support for MtS, Group CEO at the time, David Wells commented:
“This is a charity which resonates with
us given a large portion of our staff
come from seafaring backgrounds
themselves. We recognise the vital
role MtS plays in providing practical,
emotional and pastoral care to
men and women working at sea –
particularly in these times following
the vast impact of the pandemic on
shipping communities.”
Many of our colleagues across the group support MtS in their own ways as
ambassadors, or in delivering supplies to ports, as well as engaging in various
charitable functions across the regions (ref. picture above to MtS’ annual Golf
Tournament, Dubai).
Development of CSR initiatives (Corporate Social Responsibility)
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Race the Thames Challenge
In spring 2021 we arranged a team challenge for ABL Group UK offices,
to compete in Race the Thames, raising money for MtS and for London Youth
Rowing (LYR).
60 members of staff from ABL, OWC and Longitude, from all levels, took part in
the challenge racing in teams of 8 to complete or exceed 72k in 8 days.
We raised a total of £5,323.73, to be split between our two chosen charities.
OWC engages with Business Volunteers
OWC engaged with a professional partner in sourcing and managing CSR
volunteer days, called Business Volunteers.
Through this partnership, Business Volunteers paired the OWC London office up
with two activity days over the course of last year, both of which were relevant
to OWC’s commitment to driving a more sustainable and cleaner environment:
• In spring 2021, OWC’s London team spent a day building a children’s nature
garden in southwest London. The day included the team working together to
build accessible raised beds for children to learn about growing food and
eating healthily
• In October 2021, the same team went canoeing in East London’s Regents’
Canal to clear up discarded rubbish. Clearing plastic, wood and general waste,
not only improves the local environment, but also makes it more attractive to
nature and people alike.
Some comments from colleagues who took part:
“It was a brilliant day, getting outdoors, seeing colleagues again and helping
make improvements to the local area,”
—Will Philbedge
“It was great to meet people I’d only seen from behind a screen for the last
couple of month,”
—Iain Dallas
CSR in 2022
Moving into 2022, we continue to take active steps to encourage a frequent and
diverse CSR programme, which both supports ABL Group in fulfilling its SDGs,
and encourages a healthy, happy and positive work culture amongst our teams.
Through CSR we are committed to becoming a truly sustainable company not
only in our business world, but also for the communities and countries in which
we work and live.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 30
Corporate Governance
Corporate Governance regulates the relationship
between the Group’s management, its Board
of Directors and the shareholders of the
AqualisBraemar LOC ASA (the Company).
The Company believes that good corporate
governance is an important component of sustainable
business conduct and long-term value creation.
1. Implementation and reporting of Corporate Governance
In accordance with the Norwegian Code of Practice for Corporate Governance
(NCPCG), the Board of Directors of the Company has prepared a Corporate
Governance policy document. AqualisBraemar LOC ASA aspires to follow the
NCPCG as closely as possible. Through its board and management, the Company
conducts a review and evaluation of its principles for corporate governance on an
annual basis.
The Company’s compliance with the Code is detailed in this report and section
numbers refer to the Code’s articles. The Company’s Corporate Governance
guidelines are published in full at the Company’s website. Adherence to the code
is based on the “comply or explain” principle, which means that a company must
comply with the recommendations of the code or explain why it has chosen an
alternative approach to specific recommendations.
The Company is in compliance with the recommendations of the NCPCG.
2. Business
The Company is a Norwegian public company that offers adjusting, marine,
offshore, and renewables consultancy services to the energy, shipping, and
insurance industries.
The Group’s strategy is to offer its specialist consultancy services through a
growing network of global offices.
The scope of the Company’s business is defined in its Articles of Association,
published on the Company’s website. The Company’s objectives and strategies
are presented in the Directors’ report.
3. Equity and dividends
Equity
The Company’s consolidated shareholders’ equity at 31 December 2021 was USD
66.8 million, representing an equity ratio of 58%. The Board aims to maintain an
equity ratio that remains satisfactory in light of the Company's goals, strategy
and risk profile.
Shares and share capital
At the end of 2021 the Company had 96,922,583 ordinary shares outstanding
with a par value of NOK 0.10 per share (see note 16 to the Financial Statements).
The Company has one share class, and each share carries one vote. At 31
December 2021, the Company had 2,090 shareholders, and foreign registered
shareholders held 16.16% of the shares of the Company.
Increases in share capital
The Board will only propose increases in the share capital when this is beneficial
over the long term for the shareholders of the Company.
The Board has authorisation to increase the share capital in the Company as
approved by the shareholders and publicly registered in the Norwegian Register
of Business Enterprises (Brønnøysund), both a general authorization and an
authorization to be utilized in connection with the employee incentive program.
The Company has further issued warrants as also registered in the Norwegian
Register of Business Enterprises (Brønnøysund). The Board has authorisation
to purchase the Company’s own shares, limited to 10% of the total shares
outstanding.
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Dividend policy
The Company’s intention is to pay a semi-annual dividend in support of its
objective to maximise capital efficiency. The majority of the Company’s free cash
flow is intended to be distributed, subject to maintaining a robust cash buffer to
satisfy commitments and support working capital requirements, planned capital
expenditure, growth opportunities and uncertain future market prospects.
In addition to paying a cash dividend, the Company may buy back its own shares
as part of its plan to distribute capital to shareholders.
4. Equal treatment of shareholders and transactions with
close associates
The Company has only one class of shares and there are no voting restrictions.
Any potential purchase of own shares shall be carried out via a stock exchange
at market prices.
Where the Board resolves to carry out an increase in share capital on the basis
of an authority given to the Board, and waive the pre-emption rights of existing
shareholders, the justification will be publicly disclosed in connection with the
increase in share capital.
Transactions with related parties shall be at arm’s length and at fair value
which, in the absence of any other pertinent factors, shall be at market
value. All material transactions with related parties shall be valued by an
independent third party, unless assessed and resolved upon by the General
Meeting. Transactions with related parties are described in note 21 to the
AqualisBraemar LOC group consolidated financial statements.
5. Freely negotiable shares
There are no limitations on trading of shares and voting rights in the Company
and each share gives the right to one vote at the Company's General Meeting.
6. General Meeting
Annual General Meeting
The General Meeting is the Company’s supreme body and elects the members
of the Board.
The call for the General Meeting
The Company observes the minimum notice period set out in the Norwegian
Public Limited Companies Act, i.e. providing 21 days’ notice. The call for the
General Meeting is issued in writing via mail, or electronically through VPS, to
all shareholders with registered addresses. Transmitted with the summons
are documents, which have sufficient detail for the shareholders to take a
position on all the cases to be considered. However, documents relating to
matters which shall be considered at a general meeting need not be sent to the
shareholders if the documents have been made available to the shareholders on
the Company's website. The summons also addresses the shareholder’s right to
propose resolutions to the matters to be resolved upon at the General Meeting,
and gives information regarding the required steps necessary to exercise the
shareholder’s rights. The summons and the said documents are made available
on the Company’s website at least 21 days prior to the relevant General Meeting.
Voting at the General Meeting
Any shareholder is entitled to vote at the General Meeting, and to cast a vote,
a shareholder must attend or give a proxy to someone who is attending. The
proxy form will be distributed with the summons to the General Meeting. A proxy
will only be accepted if submitted by mail, fax, or e-mail (provided the proxy is
a scanned document with signature), or registered directly through VPS. For
shareholders who cannot attend the General Meeting, the Board will nominate
the Chair and/or the CEO to vote on behalf of shareholders as their proxy. To the
extent possible, the Company uses a form for the appointment of a proxy, which
allows separate voting instructions to be given for each matter to be considered
by the meeting and for each of the candidates nominated for election.
The attendance at the General Meeting
The Board and the management of the Company seek to facilitate the largest
possible attendance at the General Meeting. The Chair of the Board and the
Company’s Auditor will always attend the General Meeting. Other members of the
Board and the Election Committee will also attend whenever practical.
Chair of the meeting and minutes
The Chair of the Board, or another person nominated by the Board, will declare the
General Meeting open. Considering the Company’s organisation and shareholder
structure the Company considers it unnecessary to appoint an independent Chair
for the General Meeting, and this task will for practical purposes normally be
performed by the Chair of the Board.
7. Election Committee
The Election Committee is elected by the General Meeting, including its Chair.
The members of the Election Committee should be selected to ensure there is a
broad representation of shareholders’ interests.
The Election Committee’s task is to propose candidates for election to the Board
of Directors and to suggest remuneration for the Board. The recommendations
shall be justified. The Election Committee currently consists of two members,
who shall be shareholders or representatives of the shareholders, and no more
than one member of the Election Committee shall be a member of the Board.
Further information on the duties of the Election Committee can be found in the
Instructions to the Election Committee, which has been approved by the General
Meeting and made available on the Company’s website.
The Company is not aware of the existence of any agreements or business
partnerships between the Company and any third parties in which members of
its Election Committee have direct or indirect interests. The Election Committee’s
composition is designed to maintain its independence from the Company’s
administration.
The Election Committee currently consists of the following members:
• Bjørn Stray, Chair (up for election in 2022)
• Lars Løken (up for election in 2022)
Further information on the membership is available on the Company’s webpage.
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8. The Board of Directors – composition and independence
The Chair and the other members of the Board are elected for a period of two
years at a time and currently comprises four members. All members of the Board
may be re-elected for periods of up to two years at a time.
The Chair of the Board, Glen Rødland, owns approx. 15.4% of shares in the
Company, through Gross Management AS which is owned 50% and controlled
100% by Mr Rødland.
In electing members to the Board, it is emphasised that the Board has the required
competence to independently evaluate the cases presented by the Executive
Management as well as the Company's operations. It is considered important that
the Board functions well as a body of colleagues.
The female representation among Board members is 50%.
The current composition of the Board, including Board members’ shareholding in
the Company per 31 December 2021 is detailed below.
9. The work of the Board
The Board’s work follows an annual plan and it conducts an annual self-evaluation
of its performance and expertise, which is made available to the Election
Committee. The annual plan is devised after each Annual General Meeting, and
includes the number of meetings to be held and specific tasks to be handled at
the meetings. Typical tasks that are handled by the Board during the year include
an annual strategic review, review and approval of the following year’s budget,
evaluation of management and competence required, and continuous financial
and risk reviews based on budget or prognosis. In addition to ad hoc email
correspondence, the Board has held 10 meetings and calls during the period
between 1 January 2021 and 31 December 2021.
Audit Committee
The Audit Committee’s responsibilities follow from section 6-43 of the Norwegian
Public Limited Liability Companies Act. The Committee performs a qualitative
review of the quarterly and annual reports of the Company and participates in
the quality assurance of guidelines, policies, and other governing instruments
pertaining to the Company. The Audit Committee consists of Members of
the Board and is elected by the Board. The Committee supports the Board
in safeguarding that the Company has sound risk management and internal
controls over financial reporting. The Audit Committee monitors compliance
with the company’s Code of Conduct as well as anti-corruption and third-party
representative policies.
The Audit Committee currently consists of the following members:
• Synne Syrrist, Chair
• Glen Rødland
Remuneration Committee
The Remuneration Committee, appointed by the Board, makes proposals to the
Board on the employment terms and conditions and total remuneration of the
CEO, and other members of the Executive Management, as well as the details
of the employee share scheme. These proposals are also relevant for other
management entitled to variable salary payments. Currently, the Company’s full
Board constitutes the Remuneration Committee.
10. Risk management and internal control
The Board and the Executive Management shall at all times see to it that the
Company has adequate systems and internal control routines to handle any risks
relevant to the Company and its business, including that the Company’s ethical
guidelines, corporate values, and guidelines for corporate social responsibility are
maintained and safeguarded.
The Board carries out an annual detailed review of the Company’s most important
areas of exposure to risk and its internal control systems. The risk areas, changes
in risk levels, and how the risk is being managed, are on the agenda at each
regular Board meeting.
The Company offers adjusting, marine, offshore, and renewables consultancy
services to the energy, shipping, and insurance industries. These services are
provided in compliance with relevant international and local laws and regulations
governing this industry. The Company has adopted a Corporate Code of Conduct
and a QHSE system governing daily business practices.
11. Remuneration of the Board of Directors
Remuneration of Board members shall be reasonable and based on the Board's
responsibilities, work, time invested, and the complexity of the business. The
remuneration needs to be sufficient to attract both Norwegian and foreign Board
members with the right expertise and competence. The compensation shall be
a fixed annual amount and shall be determined by the Annual General Meeting
based on a proposal from the Election Committee.
For more information on the remuneration of the Board see note 21 to the
Financial Statements.
12. Remuneration of the Executive Management
The Board decides the salary and other compensation of the CEO, pursuant to
relevant laws and regulations, having references to the main principles for the
compensation policy of the Company as well as market norms and performance
of the individual.
For more information on the remuneration of the CEO and other members of
Executive Management, see note 21 to the Financial Statements, as well as the
guidelines and report related to remuneration to Executive Management attached
to the notice to the AGM.
Name Position in the Board Member since (year) Up for election (year) Committee membership Shareholding in AqualisBraemar LOC ASA*
2014 2022 14,890,351
1
2013 2023
2013 2023
2021 2023 198,407
2
* At 31st of December 2021
1
2
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 33
13. Information and communication
The Company is strongly committed to maintaining an open dialogue with its
shareholders, potential investors, analysts, investment banks and the financial
markets in general. Our goal is for the share price to reflect the underlying value
of the Company by providing all price-relevant information to the market on a
timely basis.
The Board of Directors and the Executive Management of the Company assign
considerable importance to giving the shareholders and the financial market
in general timely, relevant and current information about the Company and its
activities, while maintaining sound commercial judgement in respect of any
information, which, if revealed to competitors, could adversely influence the value
of the Company.
The CEO and CFO are responsible for the Company’s investor relations activities
and all communication with the capital markets, and all information is provided in
accordance with the laws and regulations imposed by the Norwegian Securities
Trading Act and the Oslo Stock Exchange
Regular information is published in the form of Annual Reports and interim reports
and presentations. The Company distributes all information relevant to the share
price to the Oslo Stock Exchange in accordance with applicable regulations. Such
information is distributed without delay and simultaneously to the capital market,
the media and on the Company website.
The Company publishes all information concerning the General Meetings,
quarterly reports and presentations and other presentations on the Company
website, as soon as they are made publically available.
The Executive Management holds regular meetings with shareholders and other
investors, and presents at domestic and international investor conferences.
14. Take-overs
The Board shall not without specific reasons attempt to hinder or exacerbate
any attempt to submit a takeover bid for the Company's activities or shares,
hereunder make use of any proxy for the issue of new shares in the Company.
In situations of takeover or restructuring, it is the Board's particular responsibility
to ascertain that all shareholders' values and interests are protected. If a take-
over offer is made, the Board will issue a statement making a recommendation
as to whether shareholders should or should not accept the offer. The Board will
arrange a valuation from an independent expert that shall be made public no later
than the disclosure of the Board’s recommendation.
15. Auditor
PricewaterhouseCoopers AS was appointed as the Company’s Auditor on 15 May
2017. The Auditor each year presents a plan for the implementation of the audit
work, and following the annual statutory audit presents a review of the Company’s
internal control procedures, including identified weaknesses and proposals for
improvement.
The Auditor participates in the Board meeting that approves the annual financial
statements, and otherwise when required. The Auditor meets with the Board,
without the Company’s Executive Management being present, at least once a
year.
Remuneration to the Auditor is disclosed in note 6 to the Financial Statements.
The full Corporate Governance Policy is published on the Company’s home page:
www.abl-group.com
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 34
Board of Directors’ Report
Strategy And Objectives
ABL Group focuses on the provision of high end consultancy to the
global energy, shipping and insurance industries. The services can be
categorised across three market sectors:
• Renewables – Independent engineering and consultancy services
to offshore wind industry
• Oil & Gas – Engineering and consultancy services to the offshore oil
and gas industry
• Maritime – Worldwide emergency incident response and surveys to
marine insurance industry
The Group’s strategy is to offer its specialist marine and engineering
consultancy services through a network of global offices. The Group
has established a presence in most major marine and offshore energy
centres. This global presence allows the business to provide local
expertise and swift response times to client demands.
Following on from 2019’s acquisition of Braemar Technical Services,
the acquisition of LOC in December 2020 roughly doubled the size
of the company in terms of employees and revenues for the second
time in two years. Through 2021, a key focus of the organisation has
been to integrate these businesses. These transactions were part of
the Company’s long-term plan to consolidate the offshore energy and
marine consulting space. The combined group of the former Aqualis,
BTS and LOC can provide a significantly broader and deeper suite
of services to our clients across an increased geographical footprint.
Importantly, the LOC acquisition also increased the Group’s renewables
footprint and reaffirmed our commitment to the energy transition.
The Group’s strategic target is for 50% of revenues to come from
renewables and sustainability-oriented services in 2025. This share
has increased from approximately 6% in 2017 to 27% in 2021, and we
are committed to continuing that trajectory.
To ensure flexibility to adapt more quickly to market changes, ABL
Group uses a significant number of subcontractors, particularly in the
Oil & Gas and Renewables markets. The Group aims to further increase
the subcontractor share going forward.
ABL Group will continue to be active in the consolidation/restructuring
of our industry. The acquisitions of BTS and LOC were significant
steps, but our industry is still fragmented and highly competitive. ABL
Group remains focused on value creation for all our stakeholders;
customers, employees, and shareholders, not on increasing the size
of the company as such. All M&A and other investments need to be
value accretive.
Organisation
The business is operated primarily through a regional structure, giving
shorter reporting lines, improved local presence towards clients, and
improved utilisation through flexible use of technical staff across
business streams. OWC (comprising the activities of OWC, Innosea
and East Point Geo entities) and Longitude are managed and reported
as separate segments, as projects are more global in nature. Our
six reporting segments during 2021 were: Europe, Middle East, Asia
Pacific, Americas, OWC and Longitude.
The business is secondarily organised across three market sectors,
Renewables, Maritime and Oil & Gas – each with separate global
managing directors ensuring consistency of delivery and access to
global competency.
During 2021, the Group opened offices in Cork, Marseille, Melbourne
and Genoa. The Group will continue to grow its global office network in
strategically placed locations to serve growth markets.
Financial Review
Financial statements
The consolidated financial statements of ABL Group are prepared
in accordance with International Financial Reporting Standards as
adapted by the European Union. A financial review of the Group for
2021 is provided below.
Profit and loss
Total operating revenues increased by 96% to USD 150.7 million
compared to USD 77.0 million in 2020. The increase is mainly
attributable to the full year effect of the acquisition of LOC. Completion
of the LOC Group acquisition took place on 21 December 2020 and
was consolidated from the date of acquisition.
Staff costs and other operating expenses increased by 92% to USD
139.6 million compared to USD 72.6 million in 2020. The increase is in
line with the increase in revenue.
EBIT amounted to a profit of USD 7.4 million compared to USD 2.9
million in 2020. Adjusted EBIT was USD 9.6 million in 2021 vs USD 4.8
million in 2020.
Background
Aqualis Offshore Holding ASA was incorporated and listed on Oslo Stock Exchange in 2014,
and subsequently changed its name to Aqualis ASA (ticker “AQUA”). Aqualis ASA completed
the acquisition of three business lines (collectively “Braemar Technical Services” or “BTS”) from
Braemar Shipping Services Ltd in 2019 and subsequently changed the name to AqualisBraemar
ASA. AqualisBraemar ASA completed the acquisition of LOC Group on 21 December 2020 and
subsequently changed the name to AqualisBraemar LOC ASA.
AqualisBraemar LOC ASA and its subsidiaries are herein together referred to as “AqualisBraemar
LOC”, “AqualisBraemar LOC Group”, “ABL”, “ABL Group”, “Company” or the “Group”.
Key figures and events in 2021
• Revenues of USD 150.7 million in 2021 vs USD 77.0 million in 2020
• Operating profit (EBIT) of USD 7.4 million in 2021 vs USD 2.9 million in 2020
• Adjusted EBIT
1
of USD 9.6 million in 2021 vs USD 4.8 million in 2020
• Profit after taxes of USD 3.2 million in 2021 vs USD 1.5 million in 2020
• Adjusted profit after taxes1 of USD 5.4 million in 2021 vs USD 3.3 million in 2020
• Total dividend of NOK 0.5 per share paid during 2021, corresponding to USD 5.5 million
• Completed integration of LOC Group and multiple strategic add-on acquisitions:
East Point Geo, OSD-IMT and the remaining 29% stake in Innosea
• Solid financial position with cash balance of USD 19.8 million at 31 December 2021
• 954 full-time equivalent employees
2
at 31 December 2021
1
2
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 35
Revenue in all segments increased substantially in 2021, due to the full year
effect of the consolidation of LOC, as well as strong organic growth in our
renewables sector.
Profit after taxes amounted to USD 3.2 million in 2021 compared to USD 1.5
million in 2020. Adjusted profit after taxes was USD 5.4 million in 2021 vs USD
3.3 million in 2020.
Cash flow, liquidity and financial position
Net cash outflow from operating activities was USD 0.2 million in 2021. This
was mainly due to an increase in working capital and effects related to net
exchange differences. Net cash outflow for investing activities was USD 1.0
million in 2021 and was primarily related to the acquisition of LOC. Net cash
outflow from financing activities was USD 9.2 million in 2021, primarily caused
by payment of dividends and amortisation of the bank debt raised in connection
with the LOC acquisition. A total dividend of USD 5.5 million representing NOK
0.50 per share was paid to the shareholders in 2021. At 31 December 2021, cash
balance amounted to USD 19.8 million compared with USD 30.6 million at 31
December 2020.
At 31 December 2021, total assets amounted to USD 115.1 million compared with
USD 119.0 million as of 31 December 2020. The shareholders’ equity was USD
66.8 million at 31 December 2021, corresponding to an equity ratio of 58%. The
shareholders’ equity was USD 64.6 million at 31 December 2020, corresponding
to an equity ratio of 54%. ABL Group had USD 11.6 million of interest bearing bank
debt as of 31 December 2021.
The Board of Directors proposes a dividend equal to 0.3 NOK per share to be
paid during the first half of 2022, and for dividends to remain on a semi-annual
schedule.
AqualisBraemar LOC ASA
AqualisBraemar LOC ASA prepares its financial statements in accordance with
the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway. AqualisBraemar LOC ASA is the ultimate holding company
for the Group’s operations.
AqualisBraemar LOC ASA reported profit after taxes in 2021 of NOK 25.7 million
compared with loss after taxes of NOK 0.1 million in 2020. Total assets as of 31
December 2021 were NOK 594.7 million compared with NOK 621.6 million in 2020.
The company’s cash balance at 31 December 2021 was NOK 5.9 million vs NOK
31.2 million at 31 December 2020. Net cash flow from operating activities was
NOK 3.2 million in 2021. Net cash flow used in investing activities was NOK 26.6
million in 2021 and primarily related to loans given to group companies. Net cash
outflow from financing activities was NOK 55.2 million mainly driven by repayment
of bank debt and payment of dividend. For tax purposes, the distribution of
dividend was considered repayment of paid in capital.
AqualisBraemar LOC ASA is exposed to credit risk related to loans to subsidiaries.
The loans to subsidiaries do not have a specific due date.
The total shareholder’s equity at 31 December 2021 was NOK 480.9 million with a
corresponding equity ratio of 80.9%. The Board proposes that the profit after tax
of NOK 25.7 million is allocated to retained earnings.
AqualisBraemar LOC ASA has its headquarter in Oslo, Norway with five permanent
employees at the end of 2021.
Going Concern
Based on ABL Group’s cash position at 31 December 2021, and the estimated
net cash flow for 2022, AqualisBraemar LOC has the necessary funds to meet its
obligations for the next 12 months.
In accordance with the Norwegian accounting act § 3-3a, the Board of Directors
confirms that the Financial Statements have been prepared under the assumption
of going concern and that this assumption is valid
Risk Factors
Risk exposure and Risk management
ABL Group’s regular business activities routinely encounter and address various
types of risks some of which may cause our future results to be different than
we presently anticipate. A disciplined approach to risk is important and the Group
proactively manages such risks.
ABL Group’s Board is committed to effective risk management in pursuit of the
Group’s strategic objectives with the aim of growing shareholder value. Further, the
Board realises that proactive risk management is both an essential element of good
corporate governance and an enabler in realising opportunities.
The Executive Management is responsible for the governance of risk with
support from members of the management team. They review and monitors the
effectiveness of the risk management processes within the Group in accordance
with corporate risk governance requirements.
Risk registers are tabled at Company and Board meetings under the categories
of economic, financial, political, operational, strategic, legal and human resources
risks. Action plans are monitored and discussed to reduce the risks to acceptable
levels.
Operational risk
Operational Risk typically involves the risk of loss resulting from inadequate
internal processes, people and systems or from external events, including political
and legal risks. The Executive Management regularly analyses its operations and
potential risk factors with a focus on the most significant risks facing the Group
and takes appropriate measures to reduce risk exposure.
ABL Group places a strong emphasis on Quality, Health & Safety Assurance and
has management systems implemented, in line with the requirements for its
business operations
Credit risk
Credit risk is primarily related to trade receivables. In trade receivables, credit
risk include geographic, industry and customer concentration and risks related
to collection. ABL Group is tightly managing its receivables as the oil & gas
industry is still facing challenging market conditions. Market and customer specific
developments affect credit risk.
Interest rate risk
With gross interest bearing bank debt of USD 11.6 million at 31 December 2021, the
Group is exposed to interest rate risk. The interest on the Group’s bank debt is based
on floating interest rates with a fixed margin on top.
Liquidity risk
The Group’s policy is to maintain satisfactory liquidity at the corporate level.
The Group has a solid cash position which exceeds the interesting-bearing debt at
year-end. The Group had cash and cash equivalents of USD 19.8 million, and 11.6
million of interest bearing bank debt, at 31 December 2021. Based on the year-end
cash balance, available liquidity resources and the current structure and terms of
the Group’s liabilities, it is the Board’s opinion that the Group has adequate funding
and liquidity to support its operations and investment program.
Foreign currency risk
ABL Group operates internationally and is exposed to currency risk primarily to
fluctuations in USD, NOK, SGD, GBP and AED, arising from commercial transactions
and assets and liabilities in currencies other than the entity’s functional currency,
ABL Group’s net investments in foreign subsidiaries and its foreign currency
denominated cash deposits. During the year 2021, the Group had a net foreign
exchange loss of USD 0.6 million.
Further details on financial risk can be found in note [23] to the consolidated
financial statements.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 36
Corporate Governance
The statement of Corporate Governance is included as a separate document in
the Annual Report. Corporate Governance is important to ensure that our business
is operated in a way that protects the long-term interest of all stakeholders. The
Board of Directors has approved and implemented
corporate governance principles endorsing and complying with the Norwegian
Accounting Act (§ 3-3b) and the Norwegian Code of Practice for Corporate
Governance (Code of Practice) issued by the Norwegian Corporate Governance
Board. ABL Group’s compliance with the Code of Practice is described in detail in
the report on Corporate Governance which is included in the Annual Report on
page [31].
Social and Environmental Responsibility
In Q1 2020 we initiated a comprehensive process to establish best practice
Environmental, Social and Governance (“ESG”) reporting and to instil sustainability
into the culture and forward strategy of the Group. We have called this project
ABL2030, recognising that though the journey may be long, we must build the
foundations this decade. This report also outlines how ABL Group assesses and
mitigates climate risk to its business, markets and its impacts on the wider world.
For an update on our social and environmental responsibility please see our
Sustainability Report on page [25].
Insurance covering Board of Directors and Executive Management
team
AqualisBraemar LOC ASA holds a Directors and Officers Liability Insurance (D&O)
covering the Board Members´, CEO’s and the executive management’s potential
liabilities towards the company and third parties.
Markets and Outlook
Outlooks are inherently uncertain and are subject to inter alia changes in market
conditions and operational performance.
ABL Group’s financial performance in 2022 will be driven by a combination of
four key factors;
First, after acquiring BTS in 2019 and LOC in 2020, the size of the company has
quadrupled in from a revenue of USD 36m in 2018 to USD 150m in 2021. All three
companies had offices in the major shipping and O&G hubs worldwide. We are
gradually taking out the synergies from these acquisitions.
Oslo, 29 April 2022
Reuben Segal
CEO
Glen Rødland
Chair of the Board
Yvonne L. Sandvold
Board member
Synne Syrrist
Board member
Rune Eng
Board member
During 2021 ABL has consolidated offices in 18 locations worldwide and
implemented one ERP system across the group. The estimated cost synergies
derived from the LOC combination are still expected to amount to USD 4.0
million, up from an initial estimate of USD 3.5 million. Approximately USD 1.9
million of this has been realised to date on a run rate basis, and we expect the
remainder to be realized through 2022. The full year effects of the synergies
realised to date, and the gradual phasing in of the remaining synergies, should
contribute to margin improvement in the coming year.
Second, we plan to continue to improve and professionalize our support
functions including HR, recruitment, graduate program, leadership education, IT
(data management/automation of processes) and finance function both centrally
and regionally. This is expected to improve capital efficiency (working capital
reduction and cash management) and improve performance of our business.
Third, the market situation is expected to contribute to topline growth in 2022.
The war in Ukraine has placed energy security high on the political agenda,
which we believe will result in increased investments and activity across a
numbers of energy sources including oil and gas and renewables. During 2021
most of the strong growth in our renewable business was offset by an oil and gas
market that remained cautious and focused on short cycle barrels, plus travel
restrictions and general slowdown in connection with the Covid-19 pandemic.
With the current geopolitical situation, oil price sitting above USD 100/bbl and
oil companies signaling a return to capex growth, we expect 2022 and 2023
to represent marked improvements in the oil and gas markets. Rig activity,
particularly in the jack-up segment, is expected to continue the gradual recovery
witnessed in 2021, and we expect a step change in offshore E&P capex over the
next two years.
Finally, as our work in the Renewables sector grows its relative size of our revenue
(27% of pro-forma combined revenue in the last 12 months) the continued strong
growth in this segment will be more important for our overall development.
Our stated ambition is for renewables and sustainability oriented services to
represent 50% of our business mix by 2025.
During 2021 we saw continued progress towards opening new global markets to
offshore wind, and with an increasing number of developers, new investors and
new geographies, the consultancy market is expected to grow significantly in the
short and long term. While we continue to invest in organic renewables growth,
we also see some signs of weakening profitability in parts of the renewables
industry, driving us to sharpen our focus on profitability and capital efficiency
within the sector.
Activity levels in the marine casualty and energy adjusting markets are expected
to be slowly improving as Covid-19 impacts lessen and supply side bottlenecks
subside. Short term development remains largely event driven and difficult to
forecast.
ABL Group’s current strategy remains unchanged being focused on widening
and strengthening its global client portfolio and enhancing client loyalty to take
increased market share. The company aims to increase the subcontractor share
to have flexibility to adapt more quickly to market changes.
ABL Group will continue to be active in the consolidation/restructuring of our
industry. The combination of Aqualis, BTS and LOC are significant steps, but
our industry is still fragmented and highly competitive. ABL Group remains
focused on value creation for all our stakeholders; customers, employees and
shareholder, and not on increasing the size of the company as such. All M&A and
other investments need to be value accretive.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 37
We confirm that, to the best of our knowledge, the 2021
consolidated financial statements have been prepared in
accordance with IFRS as adopted by EU, gives a true and fair view
of the Company’s assets, liabilities, financial position and results
of operations, and that the management report includes a fair
review of the information required under the Norwegian Securities
Trading Act section 5-5.
Responsibility Statement
Oslo, 29 April 2022
Reuben Segal
CEO
Glen Rødland
Chair of the Board
Yvonne L. Sandvold
Board member
Synne Syrrist
Board member
Rune Eng
Board member
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 38
Consolidated Financial Statements
FINANCIAL STATEMENTS
39
39
40
41
42
43
43
49
51
51
51
52
53
54
55
55
56
57
58
58
59
60
60
60
61
61
62
63
64
65
66
68
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 39
Consolidated statement of income
Amounts in USD thousands Notes 2021 2020
4 150,748 77,015
Total revenue 150,748 77,015
5 (81,978 ) (41,495 )
6 (57,605 ) (31,096 )
11, 12 (3,790 ) (1,477 )
Operating profit (loss) (EBIT) 7,375 2,946
7 54 -
8 112 399
8 (765 ) (271 )
8 (592 ) (568 )
Profit (loss) before income tax 6,184 2,507
9 (2,965 ) (993 )
Profit (loss) after tax 3,218 1,513
Consolidated statement of other comprehensive income
Amounts in USD thousands Notes 2021 2020
Profit (loss) after tax 3,218 1,513
Other comprehensive income
Items that may be reclassified to profit or loss
(475 ) 1,626
9 (343 ) 30
Other comprehensive income for the period, net of tax (818 ) 1,657
Total comprehensive income for the period 2,400 3,170
Total comprehensive income for the period is attributable to:
2,325 3,170
75 -
Earnings per share (USD): basic 10 0.034 0.021
Earnings per share (USD): diluted 10 0.028 0.018
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 40
Consolidated balance sheet
Amounts in USD thousands Notes 31 December 2021 31 December 2020
ASSETS
Non-current assets
11 1,137 1,213
12 3,629 4,707
13 27,465 26,665
9 1,708 1,395
Total non-current assets 33,939 33,980
Current assets
14 43,235 41,498
4 18,101 12,916
15 19,815 30,642
Total current assets 81,151 85,056
Total assets 115,090 119,036
EQUITY AND LIABILITIES
Equity
16 1,323 1,276
16 (0 ) (41 )
16 64,913 67,080
7 1,890 1,459
16 2,373 897
8,557 5,413
(12,306 ) (11,487 )
Total 66,751 64,597
Non-controlling interests 114 721
Total equity 66,865 65,319
Non-current liabilities
9 1,259 682
17 3,328 6,414
12 2,481 2,340
18 2,714 3,214
2,947 1,933
Total non-current liabilities 12,729 14,584
Amounts in USD thousands Notes 31 December 2021 31 December 2020
Current liabilities
19 24,467 25,207
4 949 757
17 8,333 8,669
12 1,349 2,552
9 398 907
18 - 1,042
Total current liabilities 35,496 39,134
Total liabilities 48,225 53,718
Total equity and liabilities 115,090 119,036
Oslo, 29 April 2022
Reuben Segal
CEO
Glen Rødland
Chair of the Board
Yvonne L. Sandvold
Board member
Synne Syrrist
Board member
Rune Eng
Board member
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 41
Consolidated statement of changes in equity
Amounts in USD thousands Notes Share capital Treasury shares Share premium
Consideration
shares
Share-based
compensation
reserve
Retained
earnings
Foreign currency
translation
reserve Total
Non- controlling
interests Total equity
At 1 January 2020 1,018 (41 ) 55,051 - 580 3,900 (13,144 ) 47,364 - 47,364
- - - - - 1,513 1,657 3,170 - 3,170
258 - 15,058 - - - - 15,317 - 15,317
16 - - - 1,459 - - - 1,459 - 1,459
- - (3,030 ) - - - - (3,030 ) - (3,030 )
16 - - - - 317 - - 317 - 317
- - - - - - - - 721 721
At 31 December 2020 1,276 (41 ) 67,080 1,459 897 5,413 (11,487 ) 64,598 721 65,319
At 1 January 2021 1,276 (41 ) 67,080 1,459 897 5,413 (11,487 ) 64,598 721 65,319
- - - - - 3,144 (818 ) 2,325 75 2,400
16 41 - 2,260 - - - - 2,301 - 2,301
7 - - - 431 - - - 431 - 431
6 - 1,048 1,054 1,054
- (609 ) (609 )
16 - - (5,476 ) - - - - (5,476 ) (73 ) (5,548 )
16 - - - - 1,475 - - 1,475 - 1,475
7 - 41 - - - - - 41 41
At 31 December 2021 1,323 - 64,912 1,890 2,372 8,557 (12,306 ) 66,751 114 66,865
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 42
Consolidated statement of cash flows
Amounts in USD thousands Notes 2021 2020
Cash flow from operating activities
6,184 2,507
16 1,475 317
11,12 3,790 1,477
8 (130 )
(54 ) -
(6,923 ) 2,201
(252 ) 2,499
488 (18 )
(3,194 ) (1,190 )
(1,700 ) 811
Cash flow from (used in) operating activities (187 ) 8,474
Cash flow from investing activities
(534 ) (150 )
54 18
(554 ) (14,619 )
Cash flow from (used in) investing activities (1,035 ) (14,751 )
Cash flow from financing activities
16 (5,476 ) (3,030 )
(2,601 ) (1,096 )
- 14,621
(3,422 )
16 2,301 15,317
- -
Cash flow from (used in) financing activities (9,198 ) 25,811
Net change in cash and cash equivalents (10,419 ) 19,534
30,642 10,930
(407 ) 177
Cash and cash equivalents at the end of the period 19,815 30,642
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 43
Note 1. Corporate information
with its registered office at Fridtjof Nansens plass 8, 0160 Oslo. The Company is listed on Oslo Stock Exchange.
The principal activity of the Company and its subsidiaries (collectively the "AqualisBraemar LOC Group" or the "Group") is to
offer adjusting, marine, offshore and renewables consultancy services to the energy, shipping and insurance industries globally.
The group employs specialist engineers, naval architects, master mariners, loss adjusters and technical consultants in 51 offices
located across 5 continents in 33 countries.
For all periods up to and including the year ended 31 December 2021, the consolidated financial statements of the Group are a
continuation of the group values transferred from Weifa ASA in the spin-off of the marine and offshore business wherein all the
shares in subsidiaries were transferred to Aqualis ASA on 24 July 2014. The ownership of the subsidiaries and the related excess
values from the acquisitions are consequently continued in the consolidated financial statements of the Group.
Note 2. Summary of significant accounting policies
This note provides a list of the significant accounting policies adopted in the preparation of these consolidated financial
statements to the extent they have not already been disclosed in the other notes above. These policies have been
consistently applied to all the years presented, unless otherwise stated. The financial statements are for the Group consisting
of AqualisBraemar LOC ASA and its subsidiaries.
2.1 Basis of preparation
(i) Compliance with IFRS
The consolidated financial statements of the Group have been prepared in accordance with International Financial Reporting
Standards (IFRS) as approved by the European Union, interpretations issued by the IFRS Interpretations Committee (IFRS
IC) applicable to companies reporting under IFRS and the additional requirements of the Norwegian Accounting Act as of
31 December 2021. The financial statements comply with IFRS as issued by the International Accounting Standards Board
(IASB).
These consolidated financial statements are presented in US Dollars (USD). All amounts disclosed in the financial statements
and notes have been rounded off to the nearest thousand currency units unless otherwise stated.
(ii) Historical cost convention
The consolidated financial statements have been prepared on a historical cost basis except as disclosed in the accounting
policies below.
Notes to the Consolidated Financial Statements
(iii) New and amended standards adopted by the Group
The following amended standards applied by the Group for the reporting period commencing 1 January 2021 are not
expected to have a material impact on the Groups consolidated financial statements:
• Interest Rate Benchmark Reform- amendments to IFRS 9 and IFRS 7- Phase 2
(iv) New standards and interpretations not yet adopted by the group
Certain new accounting standards, amendments and interpretations have been published that are not mandatory for 31
December 2021 reporting periods and have not been early adopted by the group. These standards are not expected to have
a material impact on the entity in the current or future reporting periods and on foreseeable future transactions.
• Amendments to IFRS 16 Leases- COVID-19 related rent concessions
• Amendments to IFRS 3 Business Combinations
• IAS 1- Presentation of financial statements on classification of liabilities
2.2 Principles of consolidation
(i) Subsidiaries
Subsidiaries are all entities over which the group has control. The group controls an entity where the group is exposed to, or
has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power
to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
group. They are deconsolidated from the date that control ceases.
Inter-company transactions, balances and unrealized gains on transactions between group companies are eliminated.
Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset.
Accounting policies of subsidiaries have been changed where necessary to ensure consistency with the policies adopted
by the group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the consolidated statement of
profit or loss, statement of comprehensive income, statement of changes in equity and balance sheet respectively.
(ii) Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with
equity owners of the group. A change in ownership interest results in an adjustment between the carrying amounts of
the controlling and non-controlling interests to reflect their relative interests in the subsidiary. Any difference between the
amount of the adjustment to non-controlling interests and any consideration paid or received is recognized in a separate
reserve within equity attributable to owners of AqualisBraemar LOC ASA.
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When the group ceases to consolidate or equity account for an investment because of a loss of control, joint control or
significant influence, any retained interest in the entity is remeasured to its fair value, with the change in carrying amount
recognized in profit or loss. This fair value becomes the initial carrying amount for the purposes of subsequently accounting
for the retained interest as an associate, joint venture or financial asset. In addition, any amounts previously recognized in
other comprehensive income in respect of that entity are accounted for as if the group had directly disposed of the related
assets or liabilities. This may mean that amounts previously recognized in other comprehensive income are reclassified to
profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only
a proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss
where appropriate.
2.3 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the chief operating decision
maker.
The Group’s operating segments are established on the basis of those components that are evaluated regularly by the Board
of Directors, considered to be the Group’s Chief Operating Decision Maker. The Chief Operating Decision Maker monitors
the operating results of the Group’s operating segments separately for the purpose of making decisions about resource
allocation and performance assessment. Segment performance is evaluated based on revenues, gross profit and a broad
range of key performance indicators in addition to segment profitability.
2.4 Foreign currency translation
(i) Functional and presentation currency
Items included in the consolidated financial statements of each of the group's entities are measured using the currency
of the primary economic environment in which the entity operates ('the functional currency'). The consolidated financial
statements are presented in US Dollars (USD). The functional currency of the parent company is Norwegian Krone (NOK).
The parent company financial statements are presented in NOK.
(ii) Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the
transactions. Foreign exchange gains and losses resulting from the settlement of such transactions, and from the translation
of monetary assets and liabilities denominated in foreign currencies at year end exchange rates, are generally recognized in
profit or loss. They are deferred in equity if they relate to qualifying cash flow hedges and qualifying net investment hedges
or are attributable to part of the net investment in a foreign operation.
Foreign exchange gains and losses are presented in the consolidated statement of income on a net basis.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the
date when the fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as
part of the fair value gain or loss. For example, translation differences on non-monetary assets and liabilities such as equities
held at fair value through profit or loss are recognized in profit or loss as part of the fair value gain or loss, and translation
differences on non-monetary assets such as equities classified as at fair value through other comprehensive income are
recognized in other comprehensive income.
(iii) Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that
have a functional currency different from the presentation currency are translated into the presentation currency as follows:
• assets and liabilities for each balance sheet presented are translated at the closing rate at the date of that balance sheet
• income and expenses for each statement of profit or loss and statement of comprehensive income are translated at
average exchange rates (unless this is not a reasonable approximation of the cumulative effect of the rates prevailing on
the transaction dates, in which case income and expenses are translated at the dates of the transactions), and
• all resulting exchange differences are recognized in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities, and of
borrowings are recognized in other comprehensive income. When a foreign operation is sold or any borrowings forming part
of the net investment are repaid, the associated exchange differences are reclassified to profit or loss, as part of the gain
or loss on sale.
Goodwill and fair value adjustments arising on the acquisition of a foreign operation are treated as assets and liabilities of the
foreign operation and translated at the closing rate at the reporting date.
2.5 Business combinations
The acquisition method of accounting is used to account for all business combinations, regardless of whether equity
instruments or other assets are acquired. The consideration transferred for the acquisition of a subsidiary comprises the:
• fair values of the assets transferred
• liabilities incurred to the former owners of the acquired business
• equity interests issued by the group
• fair value of any asset or liability resulting from a contingent consideration arrangement, and
• fair value of any pre-existing equity interest in the subsidiary.
Identifiable assets acquired and liabilities and contingent liabilities assumed in a business combination are, with limited
exceptions, measured initially at their fair values at the acquisition date. The group recognizes any non-controlling interest in
the acquired entity on an acquisition-by-acquisition basis either at fair value or at the non-controlling interest’s proportionate
share of the acquired entity’s net identifiable assets.
Acquisition-related costs are expensed as incurred.
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The excess of the:
• consideration transferred,
• amount of any non-controlling interest in the acquired entity, and
• acquisition-date fair value of any previous equity interest in the acquired entity
over the fair value of the net identifiable assets acquired is recorded as goodwill. If those amounts are less than the fair value of
the net identifiable assets of the business acquired, the difference is recognized directly in profit or loss as a bargain purchase.
Where settlement of any part of cash consideration is deferred, the amounts payable in the future are discounted to their
present value as at the date of exchange. The discount rate used is the entity’s incremental borrowing rate, being the rate at
which a similar borrowing could be obtained from an independent financier under comparable terms and conditions.
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability is
subsequently remeasured to fair value, with changes in fair value recognized in profit or loss.
If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity
interest in the acquire is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement
are recognized in profit or loss.
If the initial accounting for a business combination is incomplete by the end of the reporting period in which the combination
occurs, the Group reports provisional amounts for the items for which the accounting is incomplete. Those provisional amounts
are adjusted during the measurement period, or additional assets or liabilities are recognized, to reflect new information
obtained about facts and circumstances that existed at the acquisition date that, if known, would have affected the amounts
recognized as of that date.
The measurement period ends as soon as the Group receives the necessary information about the facts and circumstances
that existed as of the acquisition date or learns that the information is not obtainable. However, the measurement period
cannot exceed one year from the acquisition date.
2.6 Revenue recognition
(i) Rendering of services
The Group offers adjusting, marine, offshore and renewables consultancy services to the energy, shipping and insurance
industries under variable and fixed-price contracts. Revenue from providing services is recognized in the accounting period
in which the services are rendered.
Revenue from such services are recognized as a performance obligation satisfied over time when services are performed
and delivered and measured based on the consideration specified in a contract with customers. Payment for services is
not due from the customers until the services are complete and therefore contract asset is recognized over the period in
which the services are performed representing the Group’s right to consideration for the services performed to date. If the
payments exceed the services rendered, a contract liability is recognized.
Revenue from contracts priced on a variable basis is recognized at the contractual rates as labor hours and direct expenses
are incurred.
For fixed-price contracts, revenue is recognized based on the actual service provided to the end of the reporting period as
a proportion of the total services to be provided, because the customer receives and uses the benefits simultaneously. This
is determined based on the actual labor hours spent relative to the total estimated labor hours.
Estimates of revenues, costs or extent of progress toward completion are revised if circumstances change. Any resulting
increases or decreases in estimated revenues or costs are reflected in profit or loss in the period in which the circumstances
that give rise to the revision become known by management.
(ii) Interest income
Interest income is recognized using the effective interest rate method.
2.7 Income tax
The income tax expense or credit for the period is the tax payable on the current period's taxable income, based on the
applicable income tax rate for each jurisdiction, adjusted by changes in deferred tax assets and liabilities attributable to
temporary differences and to unused tax losses.
The current income tax charge is calculated based on the tax laws enacted or substantively enacted at the end of the
reporting period in the countries where the company and its subsidiaries and associates operate and generate taxable
income. Management periodically evaluates positions taken in tax returns with respect to situations in which applicable tax
regulation is subject to interpretation. It establishes provisions, where appropriate, based on amounts expected to be paid
to the tax authorities.
Deferred income tax is provided in full, using the liability method, on temporary differences arising between the tax bases
of assets and liabilities and their carrying amounts in the consolidated financial statements. However, deferred tax liabilities
are not recognized if they arise from the initial recognition of goodwill. Deferred income tax is also not accounted for if it
arises from initial recognition of an asset or liability in a transaction other than a business combination that, at the time of
the transaction, affects neither accounting nor taxable profit or loss. Deferred income tax is determined using tax rates (and
laws) that have been enacted or substantially enacted by the end of the reporting period and are expected to apply when
the related deferred income tax asset is realized or the deferred income tax liability is settled.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to utilize those
temporary differences and losses.
Deferred tax liabilities and assets are not recognized for temporary differences between the carrying amount and tax
bases of investments in foreign operations where the company is able to control the timing of the reversal of the temporary
differences and it is probable that the differences will not reverse in the foreseeable future.
Deferred tax assets and liabilities are offset where there is a legally enforceable right to offset current tax assets and liabilities
and where the deferred tax balances relate to the same taxation authority. Current tax assets and tax liabilities are offset
where the entity has a legally enforceable right to offset and intends either to settle on a net basis, or to realize the asset
and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items recognized in other
comprehensive income or directly in equity. In this case, the tax is also recognized in other comprehensive income or directly
in equity, respectively.
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(i) Investment allowances and similar tax incentives
Companies within the group may be entitled to claim special tax deductions for investments in qualifying assets or in
relation to qualifying expenditure (e.g. the Research and Development Tax Incentive regime or other investment allowances).
The group accounts for such allowances as tax credits, which means that the allowance reduces income tax payable and
current tax expense. A deferred tax asset is recognized for unclaimed tax credits that are carried forward as deferred tax
assets.
2.8 Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only when
it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be
measured reliably. All other repairs and maintenance expenses are charged to the consolidated income statement in the
period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate the assets’ cost to their residual values over their
estimated useful lives as follows:
• Fixtures and office equipment: 2 – 5 years
• Vehicles: 5 years
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any
changes in estimate accounted for on a prospective basis.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
An item of property, plant and equipment is derecognized upon disposal (i.e., at the date the recipient obtains control) or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included in
the consolidated income statement when the asset is derecognized.
2.9 Leases
The group leases various offices, equipment and vehicles. Rental contracts are typically made for fixed periods of 6 months to
5 years but may have extension options.
Contracts may contain both lease and non-lease components. The group allocates the consideration in the contract to the
lease and non-lease components based on their relative stand-alone prices. However, for leases of real estate for which the
group is a lessee, it has elected not to separate lease and non-lease components and instead accounts for these as a single
lease component. Lease terms are negotiated on an individual basis and contain a wide range of different terms and conditions.
The lease agreements do not impose any covenants other than the security interests in the leased assets that are held by the
lessor. Leased assets may not be used as security for borrowing purposes.
Assets and liabilities arising from a lease are initially measured on a present value basis. Lease liabilities include the net present
value of the following lease payments:
• fixed payments (including in-substance fixed payments), less any lease incentives receivable
• variable lease payment that are based on an index or a rate, initially measured using the index or rate as at the
commencement date
• amounts expected to be payable by the group under residual value guarantees
• the exercise price of a purchase option if the group is reasonably certain to exercise that option, and
• payments of penalties for terminating the lease, if the lease term reflects the group exercising that option.
Lease payments to be made under reasonably certain extension options are also included in the measurement of the liability.
The lease payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily determined, which
is generally the case for leases in the group, the lessee’s incremental borrowing rate is used, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a similar
economic environment with similar terms, security and conditions.
To determine the incremental borrowing rate, the group:
• where possible, uses recent third-party financing received by the individual lessee as a starting point, adjusted to reflect
changes in financing conditions since third party financing was received
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases held by the Group,
which does not have recent third-party financing, and
• makes adjustments specific to the lease, e.g., term, country, currency and security.
The group is exposed to potential future increases in variable lease payments based on an index or rate, which are not included
in the lease liability until they take effect. When adjustments to lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and finance cost. The finance cost is charged to profit or loss over the lease
period to produce a constant periodic rate of interest on the remaining balance of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentives received
• any initial direct costs, and
• restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset's useful life and the lease term on a straight-line
basis. If the group is reasonably certain to exercise a purchase option, the right-of-use asset is depreciated over the underlying
asset’s useful life.
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Payments associated with short-term leases of equipment and vehicles and all leases of low-value assets are recognized on a
straight-line basis as an expense in profit or loss. Short-term leases are leases with a lease term of 12 months or less. Low-value
assets comprise IT equipment and small items of office furniture.
2.10 Intangible assets
(i) Goodwill
Goodwill is measured as described in note 2.5. Goodwill on acquisitions of subsidiaries is included in intangible assets.
Goodwill is not amortized but it is tested for impairment annually, or more frequently if events or changes in circumstances
indicate that it might be impaired, and is carried at cost less accumulated impairment losses. Gains and losses on the
disposal of an entity include the carrying amount of goodwill relating to the entity sold.
Goodwill is allocated to cash-generating units for the purpose of impairment testing. The allocation is made to those cash-
generating units or groups of cash-generating units that are expected to benefit from the business combination in which
the goodwill arose. The units or groups of units are identified at the lowest level at which goodwill is monitored for internal
management purposes (note 13).
(ii) Customer relations
The customer contracts were acquired as part of a business combination. They are recognized at their fair value at the date
of acquisition and are subsequently amortized on a straight-line based on the timing of projected cash flows of the contracts
over their estimated useful lives of 10 years.
2.11 Impairment of assets
Goodwill and intangible assets that have an indefinite useful life are not subject to amortization and are tested annually for
impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Other assets
are tested for impairment whenever events or changes in circumstances indicate that the carrying amount may not be
recoverable. An impairment loss is recognized for the amount by which the asset’s carrying amount exceeds its recoverable
amount. The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in use. For the
purposes of assessing impairment, assets are grouped at the lowest levels for which there are separately identifiable cash
inflows which are largely independent of the cash inflows from other assets or groups of assets (cash-generating units).
Non-financial assets other than goodwill that suffered an impairment are reviewed for possible reversal of the impairment at
the end of each reporting period.
2.12 Financial assets
The Group classifies its financial assets at amortized cost or fair value on the basis of the entity’s business model for
managing the financial assets and the contractual cash flow characteristics of the financial assets. The Group applies the
IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for all trade
receivables and contract assets.
2.13 Trade receivables
Trade receivables are amounts receivable from customers for billing in the ordinary course of business. Trade receivables
are recognized initially at fair value and subsequently measured at amortized cost using the effective interest method, less
provision for impairment losses. The Group measures the loss allowance for trade receivables based on the expected credit
loss model using a provision matrix by reference to past default experience of the debtor and an analysis of the debtor’s
current financial position, adjusted for factors that are specific to the debtors and general economic conditions of the
industry in which the debtors operate. The Group writes off a trade receivable when there is information indicating that the
debtor is in severe financial difficulty and there is no realistic prospect of recovery, e.g., when the debtor has been placed
under liquidation or has entered bankruptcy proceedings. The amount of the provision is the difference between the asset’s
carrying amount and the present value of estimated future cash flows, discounted at the effective interest rate.
The carrying amount of the asset is reduced using an allowance account and the amount of the loss is recognized in the
consolidated income statement within other operating expenses. When a trade receivable is uncollectible, it is written off
against the allowance account for trade receivables. Subsequent recoveries of amounts previously written off are credited
against other operating expenses in the consolidated income statement.
2.14 Cash and cash equivalents
For the purpose of consolidated statement of cash flows, cash and cash equivalents comprise cash at banks and on hand
and short-term deposits with original maturity of three months or less, which are subject to an insignificant risk of changes
in value.
2.15 Balance sheet classification
The Group presents assets and liabilities in the statement of financial position based on current/non-current classification.
An asset is current when it is:
• Expected to be realized or intended to be sold or consumed in the normal operating cycle.
• Held primarily for the purpose of trading.
• Expected to be realized within twelve months after the reporting period; or
• Cash or cash equivalent unless restricted from being exchanged or used to settle a liability for at least twelve months
after the reporting period.
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the normal operating cycle.
• It is held primarily for the purpose of trading.
• It is due to be settled within twelve months after the reporting period; or
• There is no unconditional right to defer the settlement of the liability for at least twelve months after the reporting
period.
The Group classifies all other liabilities as non-current.
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2.16 Trade and other payables
These amounts represent liabilities for goods and services provided to the group prior to the end of the financial year which
are unpaid. The amounts are unsecured and are usually paid within 30 days of recognition. Trade and other payables are
presented as current liabilities unless payment is not due within 12 months after the reporting period. They are recognized
initially at their fair value and subsequently measured at amortized cost using the effective interest method.
2.17 Provisions
Provisions for legal claims, service warranties and make good obligations are recognized when the group has a present legal
or constructive obligation as a result of past events, it is probable that an outflow of resources will be required to settle the
obligation, and the amount can be reliably estimated. Provisions are not recognized for future operating losses.
Where there are several similar obligations, the likelihood that an outflow will be required in settlement is determined by
considering the class of obligations. A provision is recognized even if the likelihood of an outflow with respect to any one item
included in the same class of obligations may be small.
Provisions are measured at the present value of management’s best estimate of the expenditure required to settle the
present obligation at the end of the reporting period. The discount rate used to determine the present value is a pre-tax rate
that reflects current market assessments of the time value of money and the risks specific to the liability. The increase in the
provision due to the passage of time is recognized as interest expense.
2.18 Employee benefits
(i) Pension obligations
The Group currently has defined contribution plans only. For defined contribution plans, the group pays contributions to
publicly or privately administered pension insurance plans on a mandatory, contractual or voluntary basis. The group has no
further payment obligations once the contributions have been paid. The contributions are recognized as employee benefit
expense when they are due. Prepaid contributions are recognized as an asset to the extent that a cash refund or a reduction
in the future payments is available.
(ii) Other employees’ benefit obligations
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating sick leave that are
expected to be settled wholly within 12 months after the end of the period in which the employees render the related service
are recognized in respect of employees’ services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. These liabilities are presented as a current liability and included in trade
and other payables.
In some countries, the group also has liabilities for end of service benefits that are not expected to be settled wholly within
12 months after the end of the period in which the employees render the related service. These obligations are therefore
measured as the present value of expected future payments to be made in respect of services provided by employees up
to the end of the reporting period, using the projected unit credit method. Consideration is given to expected future wage
and salary levels, experience of employee departures and periods of service. Expected future payments are discounted
using market yields at the end of the reporting period of high-quality corporate bonds with terms and currencies that match,
as closely as possible, the estimated future cash outflows. Remeasurements as a result of experience adjustments and
changes in actuarial assumptions are recognized in profit or loss. The provision relating to end of service benefits is disclosed
as a non-current liability.
(iii) Bonus plans
The group recognizes a liability and an expense for bonuses based on a formula that takes into consideration the profit
attributable to the company’s shareholders after certain adjustments. The group recognizes a provision where contractually
obliged or where there is a past practice that has created a constructive obligation.
(iv) Share-based payments
Share-based compensation benefits are provided to employees via the employee option plan. Information relating to these
schemes is set out in note 16.
Employee options
The fair value of options granted under the employee option plan is recognized as an employee benefits expense, with a
corresponding increase in equity. The total amount to be expensed is determined by reference to the fair value of the options
granted:
• including any market performance conditions (e.g., the entity’s share price)
• excluding the impact of any service and non-market performance vesting conditions (e.g.
• profitability, sales growth targets and remaining an employee of the entity over a specified
• time period), and
• including the impact of any non-vesting conditions (e.g., the requirement for employees to save
• or hold shares for a specific period).
The total expense is recognized over the vesting period, which is the period over which all the specified vesting conditions
are to be satisfied. At the end of each period, the entity revises its estimates of the number of options that are expected to
vest based on the non -market vesting and service conditions. It recognizes the impact of the revision to original estimates,
if any, in profit or loss, with a corresponding adjustment to equity.
2.19 Equity
Ordinary shares are classified as equity. Incremental costs directly attributable to the issue of new shares or options are
shown in equity as a deduction, net of tax, from the proceeds.
Where any group company purchases the company’s equity instruments (treasury shares), for example as the result of a
share buy-back or a share-based payment plan, the consideration paid, including any directly attributable incremental costs
(net of income taxes), is deducted from equity attributable to the owners of the Company as treasury shares until the shares
are cancelled or reissued. Where such ordinary shares are subsequently reissued, any consideration received, net of any
directly attributable incremental transaction costs and the related income tax effects, is included in equity attributable to the
owners of the Company.
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2.20 Dividends
Provision is made for any dividend declared, being appropriately authorized and no longer at the discretion of the entity,
on or before the end of the reporting period but not distributed at the end of the reporting period.
2.21 Earnings per share
(i) Basic earnings per share
Basic earnings per share is calculated by dividing:
• the profit attributable to owners of the company, excluding any costs of servicing equity other than ordinary shares
• by the weighted average number of ordinary shares outstanding during the financial year, adjusted for bonus elements in
ordinary shares issued during the year and excluding treasury shares
2.22 Events after the balance sheet date
New information on the Group's positions at the balance sheet date is considered in the annual financial statements. Events
after the balance sheet date that do not affect the Group's position at the balance sheet date, but which will affect the Group's
position in the future, are stated if significant.
2.23 Prior-year information
The presentation of certain prior year information has been reclassified to conform to the current year presentation.
Note 3. Significant accounting estimates and judgements
In applying the Group’s accounting policies, which are described in note 2, management is required to make judgments,
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 relevant.
Actual results may differ from these estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are
recognized in the period in which the estimate is revised if the revision affects only that period or in the period of the revision
and future periods if the revision affects both current and future periods.
3.1 Critical judgements in applying the Group’s accounting policies
The following are the critical judgments, apart from those involving estimations (which are presented below separately),
that management have made in the process of applying the Group’s accounting policies and that have the most significant
effect on the amounts recognized in the consolidated financial statements.
(i) Control over subsidiaries
Note 26 describes that certain subsidiaries in UAE, Qatar and Malaysia are subsidiary of the Group even though the Group
has only 49% ownership interest. The remaining ownership interests are held by local sponsors in accordance with statutory
regulations of those countries.
The directors of the Company assessed whether the Group has control over those subsidiaries based on whether the
Group has the practical ability to direct the relevant activities of subsidiaries unilaterally. In making their judgement,
the directors considered the Group’s absolute size of holding in those subsidiaries and the relative size of and dispersion of
the shareholdings owned by the other shareholders.
Through trust agreements with the respective local sponsors, the Group controls 100% of the financial and ownership rights
of those entities. The Group has ownership over all the assets of both entities, with all dividends, proceeds of sale etc.
belonging solely to the Group.
After assessment, the directors concluded that the Group has full power of the investee, is fully exposed to variable returns
from its involvement with the investee and could use its power over the investee to affect the amount of the investor's
returns, those entities have been fully consolidated in the consolidated financial statements of the Group, and the 51%
owned by the local sponsors have not been treated as a non-controlling interest.
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3.2 Key sources of estimation uncertainty
The key assumptions concerning the future, and other key sources of estimation uncertainty at the reporting date, that have
a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial
year, are discussed below.
(ii) Income taxes
The Group is subject to income tax in several jurisdictions and significant judgement is required in determining the provision
for income taxes. During the ordinary course of business, there are transactions and calculations for which the ultimate tax
determination is uncertain. As a result, the Group recognizes tax liabilities based on estimates of whether additional taxes
and interest will be due. The company believes that its accruals for tax liabilities are adequate for all open audit years based
on its assessment of many factors including experience and interpretations of tax law. This assessment relies on estimates
and assumptions and may involve a series of complex judgments about future events. To the extent that the final tax
outcome of these matters is different than the amounts recorded, such differences will impact income tax expense in the
period in which such determination is made.
Deferred tax assets are recognized for all unused tax losses to the extent that it is probable that taxable profit will be available
against which the losses can be utilized. Significant management judgement is required to determine the amount of deferred
tax assets that can be recognized, based upon the likely timing and level of future taxable profits together with future tax
planning strategies.
(iii) Impairment of non-financial assets
An impairment exists when the carrying value of an asset or cash generating unit exceeds its recoverable amount, which is
the higher of its fair value less costs of disposal and its value in use. The fair value less costs of disposal calculation is based
on available data from binding sales transactions in an arm’s length transaction of similar assets or observable market prices
less incremental costs for disposing the asset. The value in use for calculation is based on a discounted cash flow model.
The cash flows are derived from the forecast for the next five years and do not include restructuring activities that the Group
is not yet committed to or significant future investments that will enhance the asset’s performance of the cash-generating
unit being tested.
The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model as well as the
expected future cash inflows and the growth rate used for extrapolation purposes.
Further details of the key assumptions applied in the impairment assessment of goodwill are given in Note 13 to the
consolidated financial statements.
(iv) Employee compensation plans
The Group measures the cost of equity-settled transactions with employees by reference to the fair value of the equity
instruments at the date at which they are granted. Estimating fair value for share-based payment transactions requires
determining the most appropriate valuation model, which is dependent on the terms and conditions of the grant.
This estimate also requires determining the most appropriate inputs to the valuation model including the expected life of
the share option, volatility and dividend yield and making assumptions about them. The assumptions and models used for
estimating fair value for share-based payment transactions are disclosed in Note 16 to the consolidated financial statements.
(v) Impairment of financial assets
The Group assesses at each reporting date whether there is any objective evidence that a financial asset or a group of
financial assets is impaired. A financial asset or a group of financial assets is deemed to be impaired if, and only if, there is
objective evidence of impairment.
Evidence of impairment may include indications that the debtor or a group of debtors is experiencing significant financial
difficulty, default or delinquency in interest or principal payments; the probability that they will enter bankruptcy or other
financial reorganization, and observable data indicating that there is a measurable decrease in the estimated future cash
flows, such as changes in arrears or general changes in the economic conditions that correlate with defaults.
The Group measures the loss allowance on amounts due from customer at an amount equal to lifetime expected credit
losses (ECL). When measuring ECL, the group uses reasonable and supportable forward-looking information, which is
based on assumptions for the future movement of different economic drivers and how these drivers will affect each other.
Further details of the key assumptions applied in the impairment assessment are given in Note 23 to the consolidated
financial statements.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Note 4. Revenue from contracts with customers
The group derives revenue from contracts with customers for the consultancy services over time provided to the energy,
shipping and insurance industries and includes reimbursement of expenses and related services. This is consistent with the
revenue information that is disclosed for each reportable segment under IFRS 8 (note 25). It excludes dividends, interest
income and intra-group transactions.
Amounts in USD thousands 2021 2020
145,190 74,930
5,290 1,828
267 256
Total 150,748 77,015
Assets and liabilities related to contracts with customers
The Group has recognised the following assets and liabilities related to contracts with customers.
Amounts in USD thousands 31 December 2021 31 December 2020
Contract assets
18,240 13,062
Total 18,101 12,916
Contract liabilities
949 757
The contract assets primarily relate to the Group’s rights to consideration for work completed but not billed at the reporting
date. The group also recognised a loss allowance for contract assets in accordance with IFRS 9, refer note 23 for further
information. The contract assets are transferred to trade receivables when the rights become unconditional. This usually
occurs when the Group issues an invoice to the customer.
The contract liabilities primarily relate to the advance consideration received from customers, for which revenue is
recognised over time.
The vast majority of the Group’s consulting service contracts are billed based on the time incurred. As permitted under IFRS
15, the transaction price allocated to unsatisfied contracts is not disclosed, for which the practical expedient applies.
Whilst the Group incurs costs that are necessary to facilitate a sale, those costs would have been incurred even if the
customer decided not to execute the contract and therefore have not been capitalised.
Note 5. Staff costs
Amounts in USD thousands 2021 2020
60,996 34,831
7,210 2,856
2,117 887
1,475 317
10,180 2,604
Total 81,978 41,495
Average number of employees 704 352
The Group currently has defined contribution plans only.The Group's obligations are limited to annual
contributions. AqualisBraemar LOC meets the Norwegian requirements for mandatory occupational pension
("obligatorisk tjenestepensjon").
Note 6. Other operating expenses
Amounts in USD thousands 2021 2020
35,372 19,090
2,385 1,270
2,688 1,018
3,823 1,857
76 1,393
13,261 6,468
Total 57,605 31,096
Remuneration to auditors
1
796 411
61 7
164
Total 857 582
1
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Note 7. Business combination
Acquisition of East Point Ltd (“EPG”)
On 18 February 2021, the Company acquired 100% of the voting shares in East Point Geo Ltd (“EPG”), a company incorporated
in United Kingdom. For AqualisBraemar LOC, the acquisition enhances our service offerings in the renewable market.
Details of the purchase consideration, the net assets acquired, and excess value allocation are as follows:
The following table summarizes fair value of purchase consideration:
Amounts in USD thousands
Purchase Consideration
669
232
431
Total purchase consideration 1,322
The purchase price consideration consists of a combination of cash consideration and consideration shares in the Company
as follows:
(i) At Closing GBP 477,031, cash
(ii) The date falling 1 year after Closing GBP 82,500, cash
(iii) The date falling 2 years after Closing GBP 82500, cash
(iv) The date falling 3 years after Closing 221,361 Consideration Shares
(v) The date falling 5 years after Closing 221,361 Consideration Shares
(vi) The date falling 7 years after Closing 221,361 Consideration Shares
The Sellers shall acquire or subscribe for the Consideration shares at a cost of NOK 0.1 per share (nominal value). The Parties
may also mutually agree on settlement of the Consideration Shares through a cash payment equal to the positive difference,
if any, between the nominal value of the Consideration Shares and the VWAP on the date falling 3, 5 or 7 years (as relevant)
after Closing. For the purpose of settlement of the Consideration Shares, “VWAP” shall mean the average volume weighted
share price during the ten (10) trading days preceding the date falling 3,5 or 7 years (as relevant) after Closing.
The total fair value of the Consideration Shares of USD 431 thousand was estimated using the Black & Scholes option pricing
model at the date of the acquisition. The fair value of the Consideration Shares was based on the share price of the Company
on 19 February 2021 of NOK 8.00 per share, which was the closing share price on the completion day of the acquisition.
The assets and liabilities recognized as a result of the acquisition are as follows:
Amounts in USD thousands
Fair value of net assets acquired
17
223
47
670
Net identifiable assets acquired 697
There were no other separately identifiable intangible assets or fair value adjustments recognized on the acquisition. The
book value of acquired assets and liabilities has been considered the fair value.
Excess value
Amounts in USD thousands
Excess value
697
Excess value 635
Amounts in USD thousands
Excess value allocated to:
635
Total 635
The goodwill is attributable to the workforce, high profitability of the acquired business and expected synergies with the
existing business of the Company. It will not be deductible for tax purposes.
If new information obtained within one year of the date of acquisition about facts and circumstances that existed at the
date of acquisition identifies adjustments to the above amounts, or any additional provisions that existed at the date of
acquisition, then the accounting for the acquisition will be revised.
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Net cash flow on acquisition of subsidaries
Amounts in USD thousands
Net cash flow on acquisition of subsidiaries
670
Net cash outflow - investing activities (1)
Impact of acquisitions on the results of the group
East Point Geo Ltd was consolidated as of 19th February 2021. The Group incurred acquisition-related costs of USD 8
thousands on legal fees and due diligence. These costs have been included in other operating expenses in the consolidated
income statement.
If the acquisition had occurred on 1 January 2021, consolidated pro-forma revenue and net profit after tax for the year ended
31 December 2021 would have been USD 151.1 million and USD 3.2 million respectively
Note 8. Financial items
Amounts in USD thousands 2021 2020
Finance income
1 18
328
111 54
Total 112 399
Finance expenses
225 89
540 182
Total 765 271
Net foreign exchange gain (loss)
Total (592) (568)
Net foreign exchange gain includes unrealised foreign currency gain related to bank accounts in the company and its
subsidiaries, which have bank accounts in different currencies than their functional currencies.
Long term loans to subsidiaries have been assessed to be a part of the net investments in the subsidiaries. In compliance
with IAS 21, the unrealised currency effects related to these loans have been recognised in foreign currency translation
reserve in the consolidated statement of other comprehensive income.
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Note 9. Taxes
Amounts in USD thousands 2021 2020
Income tax expenses recognised in profit or loss
1,404 693
1,280 562
281
Total 2,965 993
30
Total (343) 30
Deferred tax assets
1,708 1,395
Total deferred tax assets 1,708 1,395
Movement in the deferred tax assets
1,395 447
313 23
918
8
At 31 December 1,708 1,395
Deferred tax liabilities
1,259 682
Total deferred tax liabilities 1,259 682
Movement in the deferred tax liabilities
682 409
971
550
2
At 31 December 1,259 682
Amounts in USD thousands 2021 2020
Reconciliation of the effective tax rate:
Profit before income tax 6,184 2,507
Income tax using the Group's domestic tax rate of 22% (2019 - 22%) 1,360 551
924 258
274 390
1,280 562
136 402
Income tax expense recognised in profit or loss 2,965 994
The Group has recognized deferred tax assets in respect of carry forward losses of its various subsidiaries as at 31 December
2021 and 2020. Management’s projections of future taxable income and tax optimization strategies support the assumption
that it is probable that sufficient taxable income will be available to utilise these deferred tax assets.
Deferred tax assets on the tax losses relating to certain subsidiaries have not been recognized by the Group, due to
uncertainty of its recoverability. The use of these tax losses is subject to the certain provisions of the tax legislation of the
respective countries in which the companies operate. The deferred tax assets not recognised of USD thousands 274 stated
above is mainly related to tax losses carry forward.
Deferred taxes on unrealised foreign exchange gain or loss relating to long terms loans considered as net investment in
subsidiaries are recognised in other comprehensive income and presented within equity in the foreign currency translation
reserve. Other than these, the change in deferred tax assets and liabilities is primarily recorded in the consolidated income
statement.
Deferred tax asset and deferred tax liabilities are presented separately due to different tax regimes.
Goodwill is not deductible for tax purposes.
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Note 10. Earnings per share
Basic earnings per share are calculated by dividing the profit attributable to equity shareholders by the weighted average
number of ordinary shares outstanding during the year, based on the following data:
Amounts in USD thousands 2021 2020
3,218 1,513
0.034 0.02
0.028 0.02
95,075 71,323
The following instruments that could potentially dilute basic earnings per share in the future, have been included in the
calculation of diluted earnings per share.
Number of instruments (in thousands) 2021 2020
17,765 8,315
1,000
2,000 2,000
Total number of options and warrants 19,765 11,315
Note 11. Property, plant and equipment
Amounts in USD thousands Fixtures and office equipment Vehicle Total
Cost
At 1 January 2020 1,927 56 1,983
146 4 150
749 22 771
5
At 31 December 2020 2,291 88 2,379
534 534
192 192
120 120
At 31 December 2021 2,830 88 2,918
Accumulated depreciation
At 1 January 2020 1,405 19 1,424
274 12 286
3
At 31 December 2020 1,133 34 1,166
708 21 729
220 220
At 31 December 2021 1,728 54 1,781
Net book value at 31 December 2021 1,103 34 1,137
Net book value at 31 December 2020 1,159 54 1,213
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Note 12. Leases
The balance sheet shows the following amounts relating to leases:
Amounts in USD thousands 31 December 2021 31 December 2020
Right-of-use assets
3,608 4,685
21 22
3,629 4,707
Lease liabilities
1,349 2,552
2,481 2,340
3,830 4,892
Additions to the right-of-use assets during the 2021 financial year were USD 1.3 million.
The statement of profit or loss shows the following amounts relating to leases:
Amounts in USD thousands 2021 2020
Depreciation charge of right-of-use assets
2,703 1,182
1 9
2,704 1,191
Interest expense (included in finance expenses) 225 89
Expense relating to short-term leases (included in other operating expenses) 1,729 1,147
Movement in the Right-of-use assets
Amounts in USD thousands Buildings Office equipment Total
2,345 31 2,376
3,472 3,472
50 50
At 31 December 2020 4,685 22 4,707
1,277 1,277
349 349
At 31 December 2021 3,608 21 3,629
Operating lease commitments
The future aggregate minimum lease payments under non-cancellable short-term and low value operating leases are as
follows:
Amounts in USD thousands 31 December 2021 31 December 2020
Lease commitments
2,187 240
3,069 48
Future minimum lease payments 5,255 288
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Note 13. Goodwill and intangible assets
Amounts in USD thousands Goodwill Customer relations
Total
Cost
18,681 18,681
10,006 3,561 13,567
148 148
At 31 December 2020 28,835 3,561 32,396
28,835 3,561 32,396
635 635
689 689
At 31 December 2021 29,806 3,561 33,367
Amortisation and impairment
5,707 - 5,707
24 - 24
At 31 December 2020 5,731 - 5,731
At 1 January 2021 5,731 - 5,731
356 356
(185) -
At 31 December 2021 5,546 356 5,902
Net book value at 31 December 2021 24,260 3,205 27,465
Net book value at 31 December 2020 23,104 3,561 26,665
All goodwill is allocated to cash-generating units. These cash-generating units represent the lowest level within the Group
at which goodwill is monitored for internal management purposes. Goodwill denominated in foreign currencies is revalued at
the balance sheet date. The allocation of goodwill to cash-generating units is as follows:
Amounts in USD thousands 31 December 2021 31 December 2020
Cash Generating Units (CGUs)
6,544 5,729
8,662 5,896
4,544 32
1,711 149
2,798 1,324
9,974
Total 24,260 23,104
Goodwill arising from the acquisitions is attributable to workforce of the acquired businesses (refer note 7). The goodwill
amounts have been measured on a provisional basis. If new information obtained within one year of the date of acquisition
about facts and circumstances that existed at the date of acquisition identifies adjustments to the above amounts, or any
additional provisions that existed at the date of acquisition, then the accounting for the acquisition will be revised.
Goodwill is tested for impairment at least annually, or when there are indications of impairment. Determining whether
goodwill is impaired requires an estimation of the value in use of the cash-generating units to which goodwill has been
allocated. The value in use calculations requires the directors to estimate the future cash flows expected to arise from the
cash-generating unit and a suitable discount rate in order to calculated present value. Where the actual future cash flows are
less than expected, a material impairment loss may arise.
The company has completed an assessment of impairment indicators and performed an impairment test for those assets
and cash generating units (CGUs) where impairment indicators have been identified. The following assumptions were used:
Cash flow projections and assumptions
A 3 year forecast of discounted cash flows plus a terminal value (Gordon's growth model) was used to determine net present
value of each CGU. Discounted cash flows were calculated before tax.
Estimated future cash flows for the different CGUs are estimated based on budgets and long-term estimates. The estimated
cash flows for year 2022 is based on budget. The estimated cash flows in the years 2023-2024 are based on current 3-year
forecasts for each CGUs. The projected cash flows are based on the expected development in the total overall market, the
CGUs performance and that ABL Group over time will reach a margin level in line with what other businesses within the
industry historically have achieved.
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Cash flows have been used over a period of three years as management believes this reflects a reasonable time horizon for
management to monitor the trends in the business. After three years a terminal growth rate has been set to 1.5% for the Oil
& Gas and Maritime businesses and 1.7% for the Renewable businesses. The estimated terminal long-term growth is mainly
dependent on overall market growth for demand for our services and the CGUs ability to recruit the right personnel and its
ability to create revenue growth through then proper utilization of human resources.
Discount rate
The discount rate used is the WACC (Weighted average cost of capital) using CAPM (capital asset pricing model).
The discount rate for each CGU is derived as the weighted average cost of capital (WACC) for a similar business in the
same business environment. The input data is gathered from representative sources and this is used for management's best
estimate of WACCs. All parameters were set to reflect the long term period of the assets and time horizon of the forecast
period of the cash flows.
Key inputs in determining the WACC:
• Risk free rate: 10year government yield
• Asset beta: Based on selected peer group consisting of companies with statistical data for the last 5 years (1.04)
• Capital structure: Equity ratio of 80%
The cash flows were discounted using WACC of 10.9%.
Impairment test results and conclusion:
Overall the test performed indicated the value in use exceeds the carrying amounts for all CGUs. As a result of the above, no
impairment has been recorded during the year.
Sensitivity to impairment
Sensitivity calculations are done for all CGUs that are tested for impairment. To test the sensitivity of the results of the
impairment review, the calculations have been re-performed using the following assumptions:
• An increase of discount rate of 2.0% points (after tax)
• A reduction in the EBITDA margin of 3.0% points in the terminal year
• A reduction of terminal growth rate to 0.5% point (to 1.0% growth).
The results indicated that a combined change in all the three assumptions in the sensitivity analysis would result in a value
in use exceeds the carrying amounts for all CGUs.
Note 14. Trade and other receivables
Amounts in USD thousands 31 December 2021 31 December 2020
34,738 33,787
33,631 32,855
3,652 2,878
1,172 481
4,781 5,283
Total 43,235 41,498
Trade receivables are amounts due from customers for services performed in the ordinary course of business. They are generally
due for settlement within 30 to 90 days and are therefore all classified as current, terms associated with the settlement vary
across the Group. Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they
contain significant financing components, when they are recognised at fair value. The group holds the trade receivables with
the objective of collecting the contractual cash flows and therefore measures them subsequently at amortised cost using the
effective interest method. Details about the group’s impairment policies and the calculation of the loss allowance are provided in
note 23.
Deposits includes USD 0.2 million (2020: USD 0.2 million) which are under lien marked as margin money deposits.
Note 15. Cash and cash equivalents
Amounts in USD thousands 31 December 2021 31 December 2020
19,815 30,642
Total 19,815 30,642
Cash at banks earns interest at floating rates based on daily bank deposit rates.
Cash and cash equivalents largely comprise bank balances denominated in US Dollars, Norwegian Krone, British Pound, and
other currencies for the purpose of settling current liabilities.
The Group has restricted cash at banks of USD 283 thousands at 31 December 2021 (2020: USD 2.3 million) held in the bank
accounts of certain entities where there is requirement to hold a certain amount of cash to cover future obligations and are
therefore not available for general use by the other entities within the group.
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Note 16. Equity
Amounts in USD thousands
Number of shares
(thousands) Share capital Share premium Total
At 1 January 2020 70,416 1,018 55,051 56,069
22,131 258 15,058 15,316
At 31 December 2020 92,548 1,276 67,080 68,355
4,375 41 2,260 2,301
6 1,048 1,054
At 31 December 2021 96,923 1,323 64,912 66,235
Each ordinary shares have a par value of NOK 0.10 per share. They entitle the holder to participate in dividends, and to share
in the proceeds of winding up the company in proportion to the number of and amounts paid on the shares held. On a show
of hands every holder of ordinary shares present at a meeting, in person or by proxy, is entitled to one vote, and on a poll
each share is entitled to one vote.
The company does not have a limited amount of authorized capital.
In May and August 2021, 3,375,000 and 1,000,000 ordinary shares (December 2020: 22,131,148 ordinary shares) were
issued. The Company incurred USD 0.3 million (2020: USD 0.4 million) towards transaction costs that were directly
attributable to the issuance of shares.
Share-based compensation reserve
The share-based compensation reserve arises on the grant of share options to employees under the employee share option
plans. Further information about share-based payments to employees is set out below.
Employee share option plan
Under the 2019 Long Term Incentive Plan (“LTIP”), the Company had granted a total of 8,505,000 share options to selected
employees, where each option will give the holder the right to acquire one share in AqualisBraemar LOC ASA. The options
were granted without consideration. The grant of options was based on the authorization granted by the annual general
meeting on 11 June 2019 to issue new shares in connection with the Company’s employee incentive program.
Subject to certain conditions, the option holders are obligated to reinvest 25 percent of the pre-tax net gain on the options
in AqualisBraemar LOC shares, and to hold these shares for up to three years following exercise. One third of these shares
will be released from this obligation for every year following exercise.
The Board of Directors may choose to settle the options by way of cash settlement in lieu of issuing new shares. Exercise
terms may be reasonably adjusted by the Board of Directors in the event of dividend payments, share splits or certain other
events relating to the equity share capital of the Company.
Set out below are summaries of options granted under the plan:
In thousands of options
2021 2020
Number of share
options
Weighted average
exercise price NOK
Number of share
options
Weighted average
exercise price NOK
8,315 4.02 8,755 4.02
11,255 5.80
3.57 5.34
70 5.79
4.82
4.79 3.76
At 31 December 17,765 4.80 8,315 4.02
Share options outstanding at the end of the year have the following expiry dates and exercise prices:
Grant date Expiry date Exercise price NOK 31 December 2019 31 December 2018
01/07/19 29/5/21 4.82 125
20/12/19 11/3/23 3.57 7,335 8,190
04/05/21 14/9/24 5.79 10,430
17,765 8,315
1.95 3.15
These fair values for share options granted during the year were calculated using The Black-Scholes-Merton option pricing
model. The inputs into the model were as follows:
Amounts in NOK 2021 2020
8.32
6.10
58.37%
3.36
0.73%
0%
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The expected price volatility is based on the historic volatility (based on the remaining life of the options), adjusted for any
expected changes to future volatility due to publicly available information.
The Group recognised total expenses of USD 1,5 millions and USD 317 thousands arising from share-based payment in 2021
and 2020 respectively.
Note 17. Bank borrowings
Amounts in USD thousands
31 December 2021 31 December 20120
Current Non-current Current Non-current
8,333 3,328 8,207 6,414
462
Total 8,333 3,328 8,669 6,414
To finance the acquisition of the LOC Group, in December 2020, the Company entered into a USD 15 million senior secured
term loan facilities agreement with Nordea Bank Abp, filial i Norge. The loan facilities consists of two parts, (i) a term loan of
USD 10 million, and (ii) a revolving credit facility of USD 5 million to be renewed annually, both with a maturity of three years
and with the following financial covenants:
• Minimum EBITDA of USD 7 million on a rolling 12-month basis; and
• NIBD (Net Interest Bearing Debt) < 0 at all times.
Financial covenants were measured first time with respect to the financial quarter ending 30 June 2021, and thereafter on
the last day of each financial quarter.
The interest on both loans is the relevant LIBOR (1, 3 or 6 months at the borrower’s discretion) plus a margin of 320 basis
points. The term loan is to be repaid through 12 equal instalments on the last day of each financial quarter, the first time on 31
March 2021. For the majority of the borrowings, the fair values are not materially different from their carrying amounts, since
the interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature.
The arrangement fees for loan facilities of USD 0.38 million have been netted against the loan proceeds.
The Group’s obligations under the Nordea Facility Agreement are guaranteed by the Company and certain material group
companies.
Note 18. Provisions
Amounts in USD thousands
31 December 2021 31 December 2020
Current Non-current Current Non-current
2,714 2,224
1,042
- - - 990
Total - 2,714 1,042 3,214
Provision for employees’ end of service benefits
In accordance with the provisions of IAS 19, management has carried out an exercise to assess the present value of its
obligations at 31 December 2021 and 2020, using the projected unit credit method, in respect of employees’ end of service
benefits payable under the Labour Laws of the countries in which the Group operates. Under this method, an assessment
has been made of an employee’s expected service life with the Group and the expected basic salary at the date of leaving
the service. The obligation for end of service benefits is not funded.
Note 19. Trade and other payables
Amounts in USD thousands 31 December 2021 31 December 2020
7,689 7,331
4,826 4,137
3,829 5,139
8,124 8,600
Total 24,467 25,207
Trade payables have an average term of three to six months. These amounts are non-interest bearing.
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Note 20. Fair values of financial assets and financial liabilities
Carrying amount Fair value
Amounts in USD thousands Measurement category 31 December 2021 31 December 2020 31 December 2021 31 December 2020
Financial assets
43,235 41,498 43,235 41,498
18,101 12,916 18,101 12,916
19,815 30,642 19,815 30,642
Total 81,152 85,055 81,152 85,055
Financial liabilities
24,467 25,207 24,467 25,207
949 757 949 757
11,661 15,083 11,661 15,083
Total 37,077 41,047 37,077 41,047
The financial assets principally consist of cash and cash equivalents and trade and other receivables arising directly from
operations. The financial liabilities principally consist of a trade and other payables and bank borrowings arising directly from
operations.
The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged
in a current transaction between willing parties, other than in a forced or liquidation sale. The following methods and
assumptions were used to estimate the fair values:
Cash and bank deposits, trade and other current receivables, trade and other current payables and bank borrowings
approximate their carrying amounts due to the short-terms maturities of these instruments.
Note 21. Related Party
Related party relationships are those involving control, joint control or significant influence. Related parties are in a position
to enter into transactions with the company that would not be undertaken between unrelated parties. All transactions within
the group have been based on arm's length principle. There has been no significant transactions with related parties in 2021.
Compensation to Board of Directors
Amounts in USD thousands 2021 2020
43 37
21 19
24 19
21 14
3
Total 109 92
Compensation to Executive Management
2021
Amounts in USD thousands Salary Bonus Pension Other Total
295 7 57 62 422
280 25 1 306
238 7 130 374
239 10 47 296
224 6 23 3 256
Total 1,276 30 106 243 1,654
2020
Amounts in USD thousands Salary Bonus Pension Other Total
275 5 53 58 390
89 6 1 95
162 3 19 2 185
238 4 124 367
199 18 3 220
Total 961 12 95 188 1,257
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 62
According to the Norwegian Public Limited Companies Act (the “Act) section 6-16a, the Board of Directors have prepared
a statement on the establishment of wages and other remuneration for the Managing Director and other senior employees
(note 22).
At 31 December 2021 there are no loan or prepayments to Board of Directors, Executive Management or any other related
parties.
There are no additional options issued, except for the options mentioned in note 16.
Shares and options owned by members of the Board of Directors and Executive Management at 31 December 2021
Name Number of options Number of shares
Board of Directors
14,890,351
1
198,407
4
Executive Management
135,000
1,126,998
3
135,000
135,000
1,798,003
2
260,000 737,705
135,000 202,864
Total 800,000 18,954,328
1
2
3
4
Note 22. Statement regarding the determination of salary and other
remuneration to executive management
In this statement, executive management means CEO, CFO and other executives who are employed at the same level in
the organisation.
The Company’s salary policy for executive management – main principles for 2021
Due to the international scope of its business, AqualisBraemar LOC ASA has to compete on the international market when
it comes to salaries for executive management. In order to reach the ambition of becoming one of the leading participants
within its line of consultancy business, AqualisBraemar LOC ASA is dependent on offering salaries making the Company able
to recruit and keep skilled managers. In order to ensure the best possible leadership the Company must offer a satisfactory
salary, which is internationally competitive.
Salaries and other remuneration
It is the Company’s policy that management remuneration primarily shall take the form of a fixed monthly salary, reflecting
the level of the position and experience of the person concerned. In principle pension plans, where offered, shall be on the
same for management as is generally agreed for other employees. The Company has a bonus plan in place for its employees.
In 2019 the Company implemented a long-term incentive plan (the “LTIP”) aimed to align the interests of the participating
employees with those of the Company's shareholders. Under the LTIP, the Company has granted share options to selected
employees, where each option will give the holder the right to acquire one share in AqualisBraemar LOC ASA. The options
are granted without consideration. The grant of options is subject to authorization as granted by the shareholders to issue
new shares in connection with the Company’s employee incentive program.
Specific conditions and limits with regards to the bonus and share purchase plan are regulated by the overall allocation
parameters approved by the Board.
Termination payment agreements, where provided, will be seen in connection with confidentiality clauses and non-compete
clauses in the employment contract of each employee, in such a way that they basically compensate for limitations in the
employee’s opportunities to seek new employment. When agreements extend beyond such limitations, other income shall
normally be deducted from payments made under termination payment agreements.
Deviations from the above described principles may be done under special circumstances, i.e. in relation to employment in
international competition.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 63
Note 23. Financial instruments
The Group’s activities expose it to a variety of financial risks: market risk (including foreign exchange and interest rate risk),
liquidity risk and credit risk. These risks are evaluated by management on an ongoing basis to assess and manage critical
exposures. The Group’s liquidity and market risks are managed as part of the Group’s treasury activities. Treasury operations
are conducted within a framework of established policies and procedures.
Market risk – foreign exchange risk
Foreign currency risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of
changes in foreign currency rates. The Group's exposure to the risk of changes in foreign exchange rates relates primarily the
Group's operating activities (when revenue or expense is denominated in a different currency from the Group's presentation
currency), the Group's net investments in foreign subsidiaries, and the Group's foreign currency denominated cash deposits.
The operating revenue, and thus the trade receivables, of the Group is primarily denominated in USD, while operating
expenses are generally denominated in the functional currency of the Group's entities.
The bank accounts in currencies other than the functional currencies will expose the group to foreign currency risk. The
major part of foreign bank accounts is in AqualisBraemar LOC ASA. Changes in the USD exchange rate will have following
effect on the profit and loss of the group:
Changes in currency exchange rates
Amount in USD thousands +5% changes in rates -5% changes in rates
31 December 2021
157
31 December 2020
372
Interest rate risk
The Group’s exposure to the risk of changes market interest rates relates primarily to the Group’s cash and cash equivalents
and the bank borrowings. Both risks are considered to have limited effect on the Group’s financial statements.
Liquidity risk
Liquidity risk is the potential loss arising from the Group's inability to meet its contractual obligations when due. Prudent
liquidity risk management implies maintaining sufficient cash and the availability of funding through an adequate amount
of committed credit facilities. The Group monitors its risk to a shortage of funds using cash flow forecasts. The Group is in
a build-up phase and currently the strategy is to fund the growth of the business through existing cash reserves and from
shareholder’s equity. The Group had cash and cash equivalents of USD 19.8 million at 31 December 2021 (2020: USD 30.6
million). Based on the current cash position, the Group assesses the liquidity risk to be low.
The table below summarises the maturity profile of the Group’s financial liabilities based on contractual undiscounted
payments:
Amounts in USD thousands Carrying amount Contractual cash flow Less than 1 year Between 1 to 5 years
31 December 2021
24,467 24,467 24,467
11,661 11,661 8,330 3,330
3,830 4,117 1,480 2,638
31 December 2020
25,207 25,207 25,207
15,083 15,462 8,796 6,667
4,892 5,171 2,729 2,442
Credit risk
Credit risk is the risk that a counterparty will not meet its obligations under a financial instrument or customer contract,
leading to a financial loss. The Group is exposed to credit risk from its operating activities (primarily trade receivables and
contract assets) and from its financing activities, including deposits with banks. Credit risk is managed on a Group basis.
Credit risk with respect to trade receivables and contract assets is limited by the large base and geographic diversity of the
customer base. Customer credit risk is managed by each subsidiary in the Group, subject to established policy, procedures
and control relating to customer credit risk management. Credit quality of a customer is assessed on an individual
basis, considering its financial position, trading history with the group and existence of previous financial difficulties and
outstanding customer receivables are regularly monitored.
The requirement for an impairment is analyzed at each reporting date on an individual basis for major customers. The group
applies the IFRS 9 simplified approach to measuring expected credit losses which uses a lifetime expected loss allowance for
all trade receivables and contract assets. To measure the expected credit losses, trade receivables and contract assets have
been grouped based on shared credit risk characteristics and the days past due with reference to past default experience
of the debtor, an analysis of the debtor’s current financial position and general current and forecast economic conditions
of the industry in which the debtors operate. The contract assets relate to unbilled work in progress and have substantially
the same risk characteristics as the trade receivables for the same types of contracts. The group has therefore concluded
that the expected loss rates for trade receivables are a reasonable approximation of the loss rates for the contract assets.
An impairment analyses is performed at each reporting date using a provision matrix to measure expected credit losses.
The expected loss rates are based on the days past due for grouping of various customer segments and the corresponding
historical credit losses experienced. The historical loss rates are adjusted to reflect current and forward looking information
including the default risk associated with the industry and country in which customers operate affecting the ability of the
customers to settle the receivables.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 64
Specific debts are provided for where recovery is deemed uncertain, which will be assessed on a case-by-case basis
whenever debts are older than the due date, but always when debts are older than usual for the industry in which each
business in the Group operates.
The ageing profile of trade receivables and contract assets balance as at 31 December 2021 is as follows:
Amounts in USD thousands 31 December 2021 31 December 2020
Trade receivables
25,246 22,644
3,368 4,327
3,718 4,406
1,300 2,410
Total 33,632 33,787
18,101 13,062
Total 51,733 46,849
As at 31 December 2021 the lifetime expected loss provision for trade receivables and contract assets is as follows:
Amounts in
USD thousands
Up to 3
months
3 to 6
months
6 to 12
months
Over 12
months
Total trade
receivables
Contract
assets Total
31 December 2021
24,517 3,955 3,576 1,584 33,632 18,101 51,733
0.6% 1.6% 2.6% 33.8% 0.8% 2.4%
138 66 95 808 1,107 139 1,246
31 December 2020
22,644 4,327 4,406 2,410 33,787 13,062 46,849
0.5% 1.1% 2.2% 22.0% 1.1% 2.2%
107 46 99 679 931 146 1,077
Trade receivables and contract assets are written off when there is information indicating that the debtor is in severe
financial difficulty and there is no reasonable expectation of recovery. Impairment losses on trade receivables and contract
assets are presented as net impairment losses within operating profit. Subsequent recoveries of amounts previously written
off are credited against the same line item.
The movement in the loss allowance in respect of trade receivables and contract assets during the year was as follows:
Amounts in USD thousands
Trade receivables Contract assets
2021 2020 2021 2020
931 859 146 171
249 318 9
At 31 December 1,107 931 139 146
The credit risk on deposits with banks is limited because the counterparties are banks with high credit-ratings assigned by
international credit-rating agencies. At the end of the reporting period, there were no significant concentrations of credit
risk. The maximum exposure to credit risk at the reporting date is the carrying value cash deposits with bank of USD 19.8
million (2020: USD 30.6 million).
Capital management
The group’s objectives when managing capital are to:
• safeguard their ability to continue as a going concern, so that they can continue to provide returns for shareholders and
benefits for other stakeholders, and
• maintain an optimal capital structure to reduce the cost of capital.
The Group manages its capital structure so as to maintain investor and market confidence and to provide returns to
shareholders that will support the future development of the business. In order to maintain or adjust the capital structure if
required in response to changes in economic conditions, the group may adjust the amount of dividends paid to shareholders,
return capital to shareholders, issue new shares or sell assets to reduce debt. The Group considers its capital as consisting
of ordinary shares and retained earnings.
The Board monitors underlying business performance to determine the ongoing use of capital, namely executive and staff
incentive schemes (and whether to fund this through cash or share incentives), acquisition appraisals ahead of potential
business combinations, investment in property, plant and equipment, and the level of dividends.
Note 24. Contingencies
Bank guarantees
As at 31 December 2021, performance and financial bank guarantees amounting to USD 1.5 million (2020: USD 1.5 million)
were issued by the Group’s bankers in the ordinary course of business.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 65
Note 25. Segment information
The Group’s businesses are managed by four geographical regions aside from Offshore Wind Consultants (“OWC”) and
Longitude, performance of which is monitored separately. This is the basis for the five reportable segment of the Group.
The internal management reports provided by management to the Group's Board of Directors, which is the groups decision
maker, is in accordance with this structure. These segments comprise of entities within the geographical regions and OWC
and Longitude forms the basis for the segment reporting presented below.
The following is summary of revenues and operating profit (loss) (EBIT) for entities in four geographical regions and OWC and
Longitude. Eliminations reflects the eliminations of intra-group revenue to the extent that these arise within the regions and
OWC and Longitude.
Amounts in USD thousands 2021 2020
Revenue
28,473 22,365
39,275 22,249
40,586 14,269
26,320 13,183
24,110 14,162
8,882
Total 150,748 77,015
Operating profit (loss) (EBIT)
2,387 1,707
3,248 1,907
1,727 829
1,518 225
1,216 1,365
617
Total 7,375 2,946
The following segment assets information provided to the Board of Directors for reportable segment consist primarily of
trade receivables, contract assets and cash and cash equivalents for entities in different geographical areas and OWC and
Longitude.
Amounts in USD thousands
31 December 2021 31 December 2020
Trade receivables Contract assets Trade receivables Contract assets
6,363 1,449 6,408 1,991
7,611 6,196 8,400 4,401
8,274 3,990 9,961 2,411
6,494 2,945 7,606 2,803
3,004 2,490 481 1,309
1,884 1,033
Total 33,631 18,101 32,856 12,916
Cash and cash equivalents 31 December 2021 31 December 2020
2,402 2,183
4,707 7,269
3,398 7,334
2,781 4,863
3,356 2,193
1,139
2,032 6,800
Total 19,815 30,642
Information about other segment assets and liabilities is not reported to or used by the Board of Directors and, accordingly,
no measures of other segment assets and liabilities are reported.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 66
Note 26. List of subsidiaries
The Group’s principal subsidiaries at 31 December 2021 are set out below. Unless otherwise indicated, all shareholdings
owned directly or indirectly by the Company represent 100% of the issued share capital of the subsidiary and the share
capital is comprised of ordinary shares. All entities primarily operate in their country of incorporation.
Name of entity
Place of business
/ country of
incorporation Principal activities
Ownership
interest
2021
Ownership
interest
2020
Voting
power
2021
Voting
power
2020
ABL (Australasia) Pty Ltd Australia
Adjusting, marine,
offshore and
renewables
consultancy
services to the
energy, shipping and
insurance industries
100% 100% 100% 100%
ABL Energy & Marine Consultants Pte Ltd Singapore 100% 100% 100%% 100%
ABL Group Korea Ltd Republic of Korea 100% 100% 100% 100%
ABL Shanghai CO Ltd China 100% 100% 100% 100%
ABL USA Inc United States 100% 100% 100% 100%
Aqualis Offshore Serviços Ltda Brazil 100% 100% 100% 100%
AqualisBraemar LOC (Canada) Ltd. Canada 100% 100% 100% 100%
AqualisBraemar Holding Limited
1
United Kingdom 100% 100% 100% 100%
Aqualis Offshore Malaysia Sdn Bhd
2
Malaysia 49% 49% 100% 100%
AqualisBraemar Marine Services LLC
2
Qatar 49% 49% 100% 100%
Aqualis Braemar Marine Services LLC
(Dubai)
2
United Arab
Emirates 49% 49% 100% 100%
Aqualis Braemar Marine Services LLC
(Abu Dhabi)
2
United Arab
Emirates 49%% 49% 100% 100%
Aqualis Offshore UK Ltd United Kingdom 100% 100% 100% 100%
Braemar Technical Services LLC
2
United Arab
Emirates 49% 49% 100% 100%
PT AqualisBraemar Adjusting Indonesia Indonesia 80% 80% 80% 80%
Braemar Technical Services (Adjusting)
Pte Limited Singapore 100% 100% 100% 100%
AqualisBraemar Technical Services
(Adjusting) Ltd. United Kingdom 100% 100% 100% 100%
AqualisBraemar LLC Russia 100% 100% 100% 100%
AqualisBraemar (Pty) Ltd. South Africa 100% 100% 100% 100%
Braemar Teknik Servis Denizcilik Limited
Sirketi Turkey 100% 100% 100% 100%
AqualisBraemar Technical Services
Limited United Kingdom 100% 100% 100% 100%
AqualisBraemar Pty Ltd Australia 100% 100% 100% 100%
AqualisBraemar India Private Limited India 100% 100% 100% 100%
PT AqualisBraemar Offshore Indonesia Indonesia 100% 100% 100% 100%
Name of entity
Place of business
/ country of
incorporation Principal activities
Ownership
interest
2021
Ownership
interest
2020
Voting
power
2021
Voting
power
2020
AqualisBraemar Sdn Bhd Malaysia 100% 100% 100% 100%
AqualisBraemar Technical Services
Pte Ltd. Nevis 100% 100% 100% 100%
AqualisBraemar (Thailand) Limited Thailand 100% 100% 100% 100%
AqualisBraemar Vietnam Company Ltd. Vietnam 100% 100% 100% 100%
AqualisBraemar Technical Services
Holdings Limited
1
United Kingdom 100% 100% 100% 100%
OWC (Aqualis) GmbH Germany 100% 100% 100% 100%
Offshore Wind Consultants Ireland Limited Ireland 100% 0% 100% 0%
Offshore Wind Consultants Taiwan Co.
Limited Taiwan 100% 100% 100% 100%
Offshore Wind Consultants Limited
1
United Kingdom 100% 100% 100% 100%
OWC Japan Ltd. Japan 100% 100% 100% 100%
Offshore Wind Consultants sp. z o.o Poland 100% 100% 100% 100%
Innosea Limited United Kingdom 100% 71% 100% 71%
Innosea SAS France 100% 71% 100% 71%
East Point Geo Ltd. (UK)
2
United Kingdom 100% 0% 100% 0%
LOC (Egypt) for Consultancy Service
SAE
2
Egypt 60% 60% 60% 60%
LOC (Germany) GmBH Germany 100% 100% 100% 100%
LOC (Guernsey) Limited Guernsey 100% 100% 100% 100%
LOC (Kazakhstan) LLP Kazakhstan 100% 100% 100% 100%
LOC (Netherlands) BV Netherlands 100% 100% 100% 100%
LOC Senegal Senegal 100%% 0%% 100%% 0%
LOC (Tianjin) Co. Ltd. China 100% 100% 100% 100%
LOC (Tianjin) Risk Technology Service
Co. Ltd. China 100% 100% 100% 100%
LOC Group Limited United Kingdom 100% 100% 100% 100%
LOC (Laem Chabang) Co. Ltd. Thailand 100% 100% 100% 100%
London Offshore Consultants (Aberdeen)
Limited United Kingdom 100% 100% 100% 100%
London Offshore Consultants (France)
SARL France 100% 100% 100% 100%
London Offshore Consultants (Guernsey)
Limited Guernsey 99% 99% 99% 99%
London Offshore Consultants Holdings
Ltd. United Kingdom 100% 100% 100% 100%
Adjusting, marine,
offshore and
renewables
consultancy
services to the
energy, shipping and
insurance industries
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 67
Name of entity
Place of business
/ country of
incorporation Principal activities
Ownership
interest
2021
Ownership
interest
2020
Voting
power
2021
Voting
power
2020
London Offshore Consultants (India)
Private Limited India 100% 100% 100% 100%
London Offshore Consultants (Malaysia)
SDN BHD
2
Malaysia 49% 49% 49% 49%
London Offshore Consultants (Nigeria)
Limited Nigeria 100% 100% 100% 100%
London Offshore Consultants (Qatar)
LLC
2
Qatar 49% 49% 49% 49%
London Offshore Consultants (Korea)
Ltd. Republic of Korea 100% 100% 100% 100%
London Offshore Consultants Limited United Kingdom 100% 100% 100% 100%
London Offshore Consultants (Mexico)
SA de CV Mexico 100% 100% 100% 100%
London Offshore Consultants Norge AS Norway 100% 100% 100% 100%
London Offshore Consultants Pte
Limited Singapore 100% 100% 100% 100%
London Offshore Consultants WLL
2
United Arab
Emirates 49% 49% 49% 49%
Longitude Consultancy Holdings Limited United Kingdom 100% 100% 100% 100%
Longitude Consultants Inc. United States 100% 100% 100% 100%
Longitude Consulting Engineers Limited United Kingdom 100% 100% 100% 100%
Longitude Engineering de Mexico SA
de CV Mexico 100% 100% 100% 100%
Longitude Engineers PTE Limited Singapore 100% 100% 100% 100%
Neptune Bidco Limited United Kingdom 100% 100% 100% 100%
Neptune Midco 1 Limited
1
United Kingdom 100% 100% 100% 100%
Neptune Midco 2 Limited United Kingdom 100% 100% 100% 100%
London Offshore Consultants Brasil
Ltda. Brazil 100% 100% 100% 100%
London Offshore Consultants (Hong
Kong) Ltd. Hong Kong 100% 100% 100% 100%
LOC JLA Inc. United States 100% 100% 100% 100%
John LeBourhis & Associates United States 100% 100% 100% 100%
Neptune Midco 2 Limited United Kingdom 100% 0% 100% 0%
London Offshore Consultants Brasil
Ltda. Brazil 100% 0% 100% 0%
London Offshore Consultants (Hong
Kong) Ltd. Hong Kong 100% 0% 100% 0%
Name of entity
Place of business
/ country of
incorporation Principal activities
Ownership
interest
2021
Ownership
interest
2020
Voting
power
2021
Voting
power
2020
London Offshore Consultants (Canada)
Ltd. Canada
Adjusting, marine,
offshore and
renewables
consultancy
services to the
energy, shipping and
insurance industries
100% 0% 100% 0%
London Offshore Consultants (Australia)
Pty Ltd. Australia 100% 0% 100% 0%
LOC JLA Inc. United States 100% 0% 100% 0%
John LeBourhis & Associates United States 100% 0% 100% 0%
1
2
Adjusting, marine,
offshore and
renewables
consultancy
services to the
energy, shipping and
insurance industries
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 68
Note 27. Shareholder information
The list of top 20 shareholders below is based on the shareholder register as per 31 December 2021. Actual shareholding
may deviate due to the use of nominee accounts.
Name of shareholder No. of shares % ownership
14,890,351 15.4 %
9,650,000 10.0 %
6,017,743 6.2 %
4,611,016 4.8 %
3,500,000 3.6 %
2,830,334 2.9 %
2,488,623 2.6 %
2,348,818 2.4 %
2,081,128 2.1 %
2,020,000 2.1 %
1,798,003 1.9 %
1,751,422 1.8 %
1,600,339 1.7 %
1,555,339 1.6 %
1,517,695 1.6 %
1,428,480 1.5 %
1,261,662 1.3 %
1,126,998 1.2 %
1,077,256 1.1 %
981,062 1.0 %
Total 64,536,269 66.6 %
At 31 December 2021, the Company had 2090 shareholders (2020: 2,127), and 16,1% (2020: 37,2%) of the shares of the
Company were held by foreign registered shareholders.
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 69
Parent Company Financial Statements and Notes
70
71
72
73
74
74
74
75
75
76
77
77
78
78
78
79
79
79
79
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 70
Income statement
Amounts in NOK thousands Notes 2021 2020
2 12,335 9,104
Total revenue 12,335 9,104
3
4
Operating profit (loss) (EBIT) (9,124) (6,653)
5 35,340 8,630
5
5 9,945
Profit (loss) before income tax 32,052 (2,328)
6 2,236
Profit (loss) after tax 25,681 (93)
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 71
Balance Sheet
Amounts in NOK thousands Notes 31 December 2021 31 December 2020
ASSETS
Non-current assets
16 22 28
7 232,402 221,293
8 329,424 358,450
Total non-current assets 561,847 579,771
Current assets
9 26,944 10,573
10 5,869 31,213
Total current assets 32,813 41,786
Total assets 594,660 621,556
EQUITY AND LIABILITIES
Equity
11, 12 9,692 9,255
12
12 12,769 12,769
12 458,433 448,950
Total equity 480,894 470,602
Non-current liabilities
6 6,803 432
15 28,593 55,506
13
Total non-current liabilities 35,396 55,939
Amounts in NOK thousands Notes 31 December 2021 31 December 2020
Current liabilities
14 6,888 16,732
15 71,482 69,383
13 8,900
12
Total current liabilities 78,370 95,015
Total liabilities 113,766 150,954
Total equity and liabilities 594,660 621,556
Oslo, 29 April 2022
Reuben Segal
CEO
Glen Rødland
Chair of the Board
Yvonne L. Sandvold
Board member
Synne Syrrist
Board member
Rune Eng
Board member
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 72
Statement of Cash Flows
Amounts in NOK thousands Notes 2021 2020
Cash flow from operating activities
32,052
13
6 4
15,142
Cash flow from (used in) operating activities 3,245 630
Cash flow from investing activities
Repayments of loans by group companies 30,554 (211,235)
Investment in subsidiary 7 (5,629) (10,706)
1,704
Cash flow from (used in) investing activities 26,629 (221,972)
Cash flow from financing activities
12 17,808 131,605
124,889
Cash flow used in from (used in) financing activities (55,218) 228,368
Net change in cash and cash equivalents (25,344) 7,026
31,213 24,187
Cash and cash equivalents at end of year 5,870 31,213
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
| 73
Note 1. Accounting principles
Exchange.
The Company is principally an in vestment holding company . Its other activities include provision of management services
to related companies.
The principal activities of the subsidiaries are disclosed in Note 26 to the AqualisBraemar LOC group’s consolidated
financial statements.
The financial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted
accounting principles in Norway.
Foreign currency translation
Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign
currency are translated into Norwegian Krone (“NOK”) using the exchange rate applicable on the balance sheet date.
Non-monetary items that are measured at their historical price expressed in a foreign currency are translated into NOK
using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value
expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to
exchange rates are recognized in the income statement as they occur during the accounting period.
Income tax
The tax expense consists of the tax payable and changes to deferred tax. Deferred tax/tax assets are calculated on all
differences between the book value and tax value of assets and liabilities. Deferred tax is calculated at applicable rate of
temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance
sheet when it is more likely than not that the tax assets will be utilized. Taxes payable and deferred taxes are recognized
directly in equity to the extent that they relate to equity transactions.
Revenue recognition
Revenue is recognized to the extent that it is probable that the economic benefits will flow to the Group and the revenue
can be reliably measured, regardless of when the payment is being made. Revenue is measured at the fair value of the
consideration received or receivable, considering contractually defined terms of payment and excluding taxes or duty.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings are subsequently measured
at amortized cost. Any difference between the proceeds (net of arrangement fees) and the redemption amount is
recognized in profit or loss over the period of the borrowings using the effective interest method.
Contingent consideration
Contingent consideration is classified either as equity or a financial liability. Amounts classified as a financial liability is
subsequently remeasured to fair value, with changes in fair value recognized in income statement.
Property, plant and equipment
Property, plant and equipment are stated at historical cost less accumulated depreciation and accumulated impairment
losses. Historical cost includes expenditure that is directly attributable to the acquisition of the asset.
Subsequent costs are included in the asset’s carrying amount or recognized as a separate asset, as appropriate, only
when it is probable that future economic benefits associated with the item will flow to the Company and the cost of the
item can be measured reliably. All other repairs and maintenance expenses are charged to the income statement in the
period in which they are incurred.
Depreciation is calculated using the straight-line method to allocate the assets’ cost to their residual values over their
estimated useful lives as follows:
• Office equipment: 5 years
The estimated useful lives, residual values and depreciation method are reviewed at each year end, with the effect of any
changes in estimate accounted for on a prospective basis.
An asset’s carrying amount is written down immediately to its recoverable amount if the asset’s carrying amount is greater
than its estimated recoverable amount.
An item of property, plant and equipment is derecognized upon disposal (i.e., at the date the recipient obtains control) or
when no future economic benefits are expected from its use or disposal. Any gain or loss arising on derecognition of the
asset (calculated as the difference between the net disposal proceeds and the carrying amount of the asset) is included
in the income statement when the asset is derecognized.
Balance sheet classification
Current assets and short term liabilities consist of receivables and payables due within one year, and items related to the
normal operating cycle. Other balance sheet items are classified as non-current.
Current assets are valued at the lower of cost and fair value. Short term liabilities are recognized at nominal value.
Notes to the Financial Statements
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Investment in subsidiaries
Investment in subsidiaries is valued at cost of the shares in the subsidiary less any impairment losses. An impairment
loss is recognized if the impairment is not considered temporary. Impairment losses are reversed if the reason for the
impairment loss disappears in a later period.
Dividends, group contributions and other distributions from subsidiaries are recognized in the same year as they are
recognized in the financial statement of the provider. If dividends / group contribution exceeds withheld profits after the
acquisition date, the excess amount represents repayment of invested capital, and the distribution will be deducted from
the carrying value of the investment.
Other receivables
Other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful accounts.
Provisions for doubtful accounts are based on an individual assessment of the receivables.
Cash flow statement
The cash flow statement is presented using the indirect method. Cash and cash equivalents include cash, bank deposits
and other short term, highly liquid investments with maturities of three months or less. Deposits held by the bank against
guarantees provided to the customers are classified and accounted for in other current assets.
Note 2. Revenues
Amounts in NOK thousands 2021 2020
12,335 9,104
Total 12,335 9,104
Note 3. Staff costs
Amounts in NOK thousands 2021 2020
8,842 9,272
2,192 1,745
88 55
Total 11,122 11,072
At 31 December 2021 the Company had 5 employees (2020: 3 employees). Salaries includes compensation to the board
members. AqualisBraemar LOC ASA meets the Norwegian requirements for mandatory occupational pension ("obligatorisk
tjenestepensjon"). Please refer to note 21 and 22 in AqualisBraemar LOC group consolidated financial statements for further
information regarding the remuneration to board members and executive management.
Note 4. Other operating expenses
Amounts in NOK thousands 2021 2020
4,486 1,980
520 552
603 192
4,721 1,958
Total other operating expenses 10,331 4,682
Remuneration to the Auditors
1
Amounts in NOK thousands 2021 2020
1,117 773
528 70
1,546
Total 1,645 2,389
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Note 5. Financial items
Amounts in NOK thousands 2021 2020
Finance income
32,107 4,120
1 47
4,464
1,704
1,528
Total 35,340 8,630
Finance expenses
4,108 175
1
Total 4,109 175
Net foreign exchange gain (loss)
9,945
Total net foreign exchange gain (loss) 9,945 (4,130)
Net foreign exchange gain includes unrealised foreign currency effect related to bank accounts other than NOK and
unrealised foreign currency on long term loans to subsidiaries in the Company.
Loans to subsidiaries have been assessed to be a part of the net investments in the subsidiaries as these are long term
in nature and settlement is neighter planned nor likely in the foreseeable future. These are eliminated upon consolidation
and exchange differences arising from the translation are recognised in other comprehensive income. Refer to note 8 in
AqualisBraemar LOC group consolidated financial statements for further information.
Note 6. Taxes
Amounts in NOK thousands 31 December 2021 31 December 2020
Income tax expense recognised in profit or loss
6,371
Total income tax expense (income) 6,371 (2,236)
Tax base calculation
32,052
Permanent differences
2,767
Total tax base 10,623 (7,395)
Temporary differences
35,189 21,446
1
Total 31,624 14,774
Base for deferred tax liability 30,924 3,451
6,803 432
Total deferred tax liabilities 6,803 432
Norway corporation tax rate for 2021 was 22% (2020: 22%). For 2022, there is no change in corporation tax rate. Deferred
tax liability as of 31 December 2021 has been calculated based on this rate.
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Reconciliation of the effective tax rate:
Amounts in NOK thousands 2021 2020
Profit (loss) before income tax 32,052 (2,328)
7,051
Income tax (income) expense recognised in profit or loss 6,044 (2,236)
Effective tax rate 18.9% 96.0%
Note 7. Investments in subsidiaries
The subsidiaries directly owned by the Company at 31 December 2021 are set out below. Unless otherwise indicated, all
shareholdings owned by the Company represent 100% of the issued share capital of the subsidiary and the share capital is
comprised of ordinary shares. Figures presented below in functional currency thousands.
Name of subsidiaries
Registered
office
Functional
currency Share capital
Equity
as of 31.12.2021
Net profit for
the year
Net carrying
value
NOK '000
5,194 118,678
0.1 1,080 1,177 8,668
9,817 70,472
43,920 49,182 23,475
1
78 11,109
Total 232,402
On 18 February 2021, the Company aquired 100% of the shares in East Point Geo Ltd ("EPG"), an independent geoscience
consultancy providing support for major offshore and onshore engineering projects, specialising in renewables and oil and
gas developments. The transaction completes AqualisBraemar LOC´s geoscience offering to clients, and provides additional
growth opportunuties particularly within renewables.For EPG, AqualisBraemar LOC´s global footprint and established brand
will enable accelerated growth. The transaction values EPG at an enterprise value of GBP 750 000 settled with a combination
of cash, sellers`credit and shares in AqualisBraemar LOC. Settlement of the consideration shares will take place 3 to 7 years
after closing of the transaction. Refer to note 7 in AqualisBraemar LOC group consolidated financial statements for further
information regarding the acquisition.
On 21 December 2020, the Company acquired 100% of the shares in Neptune Midco 1 Limited ("LOC Group"), a specialised
consultancy group out of LOC Group Holdings Limited. The acquisition is expected to increase the group’s market share and
reduce costs through economies of scale. Refer to note 7 in AqualisBraemar LOC group consolidated financial statements
for further information regarding the acquisition.
On 21 June 2019, the Company had acquired 100% of the shares in Braemar Technical Services Holdings Limited ("BTS")
(subsequently renamed to “AqualisBraemar Technical Services Holdings Limited”), a specialised consultancy group
consists of 3 business streams (Offshore, Marine and Adjusting) out of Braemar Shipping Services PLC’s “(Braemar”)
technical division. The acquisition was completed by issuing shares and performance based warrants, if certain financial
targets related to EBITDA and gross profit are met during a two-year period commencing 1 April 2019 until 31 March 2021.
Subsequent to completion of LOC Group acquisition, the Company agreed minimum one million warrants regardless of
performance criteria. The fair value of the warrants of NOK 8.9 million was estimated using the Black and Scholes formula at
31 December 2020 (note 13).
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Note 8. Related party
"For the purposes of the Company's financial statements, parties are considered to be related to the Company if the
Company has the ability, directly or indirectly, to control the party or exercise significant influence over the party in making
financial and operating decisions, or vice versa, or where the Company and the party are subject to common control or
common significant influence. Related parties may be individuals or other entities.
In addition to the related party information disclosed elsewhere in the group consolidated financial statements,
the Company's balances with the related parties included in the balance sheet are as follows:"
Amounts in NOK thousands 31 December 2021 31 December 2020
Loans to group companies
277,111 267,863
18,661 57,417
10,779 9,635
2,666 8,316
9,107 8,142
2,944 2,290
2,948 1,287
1,355 1,211
2,296 899
994 886
563 503
Total 329,424 358,450
329,424 358,450
Total 329,424 358,450
The loans to Group companies carry an annual interest rate of 10%. Loans to subsidiaries have a long term perspective and
does not have a specific repayment date.
Amounts in NOK thousands 31 December 2021 31 December 2020
Due from related parties
23,495 9,199
23,495 9,199
Due to related parties
129
- 129
Amount due from and due to group companies are unsecured, non-interest bearing and are repayable on demand and are
included in trade and other receivables (note 9) and trade and other payables respectively (note 14).
Transactions with related parties are made at terms agreed between the parties. For the year ended 31 December 2020,
transactions with related parties included in profit and loss are as follows:
Amounts in NOK thousands 2021 2020
12,335 9,104
32,107 4,120
520 552
Note 9. Trade and other receivables
Amounts in NOK thousands 31 December 2021 31 December 2020
23,495 9,199
2,911 1,374
Total 26,406 10,573
Other receivables are non-interest bearing and are generally on terms of 30 to 45 days.
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Note 10. Cash and cash equivalents
Amounts in NOK thousands 31 December 2021 31 December 2020
5,869 31,213
Total 5,869 31,213
Amounts in thousands 31 December 2021 31 December 2020
Distributed in following currencies: Currency NOK Currency NOK
219 1,935 227 18,857
3,001 3,001 351 11,233
93 933 109 1,123
Total 5,869 31,213
Note 11. Share capital
Amounts in NOK thousands Number of shares Share capital
70,416,435 7,042
22,131,148 2,213
At 31 December 2020 92,547,583 9,255
92,547,583 9,255
4,375,000 438
At 31 December 2021 96,922,583 9,692
Each share has a par value of NOK 0.10 per share.
Share-based payments
The company has established share option plan that entitle employees to purchase share in the company. Under these plan,
holders of vested options are entitled to purchase shares at the market price of the shares at grant date. Each employee
share option converts into one ordinary share of the Company on exercise. No amounts are paid or payable by the recipient
on receipt of the option. The options carry neither rights to dividends nor voting rights. Options may be exercised at any
time from the date of vesting to the date of their expiry. Refer note 16 in AqualisBraemar LOC group consolidated financial
statements for more information.
Refer to note 27 in AqualisBraemar LOC group consolidated financial statements for further information regarding the
company’s largest shareholders.
Note 12. Equity
Amounts in NOK thousands
Share
capital
Treasury
shares
Consideration
shares
Other paid-up
capital Total equity
7,042 - 333,694 340,363
2,213 - 129,392 131,605
12,769 12,769
At 31 December 2020 9,255 (372) 12,769 448,950 470,602
9,255 12,769 448,950 470,602
338 - 17,371 17,708
100 - 10,620 10,720
- 3,626 3,626
372 - 396 768
-
- 25,681 25,681
At 31 December 2021 9,692 - 12,769 458,433 480,894
The Board of Directors proposed distribution of dividend of NOK 0.25 per share. The distribution of dividend was approved
in AGM held on 2 June 2021 and paid to the shareholders on 17 June 2021. Further cash dividend of NOK 0.25 per share was
approved by the Board of Directors and distributed on 2 December 2021. In 2021, total dividend of NOK 48, 211 thousands
was paid to the shareholders. For tax purposes, the distribution of dividend was considered repayment of paid in capital.
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The Company incurred NOK 2,879 thousands (2020: NOK 3,395 thousands) towards transaction costs that were directly
attributable to the issuance of shares.
Refer to note 7,16 in AqualisBraemar LOC group consolidated financial statements for further information regarding the
issurance of new shares on acquisition and buy back of treasury shares.
Note 13. Provisions
The performance based warrants issued as part of the BTS acquisition (refer note 7) was settled in 2021 and no provision
is outstanding as of 31.12.2021.
Note 14. Trade and other payables
Amounts in NOK thousands 31 December 2021 31 December 2020
2,014 10,429
129
4,874 6,174
Total 6,888 16,732
Trade payables are non- interest bearing and are normally settled on 30 days term.
Note 15. Bank Borrowings
Amounts in NOK thousands 31 December 2021 31 December 2020
71,482 28,593 69,383 55,506
Total 71,482 28,593 69,383 55,506
To finance the acquisition of the LOC Group (refer note 7), in December 2020, the Company entered into a USD 15 million
senior secured term loan facilities agreement with Nordea Bank Abp, filial i Norge. The loan facilities consisted of two parts,
(i) a term loan of USD 10 million, and (ii) a revolving credit facility of USD 5 million to be renewed annually, both with a maturity
of three years and with the following financial covenants:
• Minimum EBITDA of USD 7 million on a rolling 12-month basis; and
• NIBD (Net Interest Bearing Debt) < 0 at all times.
Financial covenants were measured first time with respect to the financial quarter ending 30 June 2021, and thereafter on
the last day of each financial quarter.
The interest on both loans is the relevant LIBOR (1, 3 or 6 months at the borrower’s discretion) plus a margin of 320 basis
points. The term loan is to be repaid through 12 equal instalments on the last day of each financial quarter, first time on 31
March 2021. For the majority of the borrowings, the fair values are not materially different from their carrying amounts, since
the interest payable on those borrowings is either close to current market rates or the borrowings are of a short-term nature.
The Group’s obligations under the facility agreement is guaranteed by the Company and certain material group companies.
Note 16. Property, plant and equipments
2021
Amounts in NOK thousands Office equipment Total
Cost
32 32
As at 31 December 2021 32 32
Depreciation
4 4
6 6
As at 31 December 2021 10 10
Net book value at 31 December 2021 22 22
Useful life 5 years
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Independent Auditor's Report - AqualisBraemar LOC ASA
(2)
Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in
accordance with these requirements. We believe that the audit evidence we have obtained is sufficient
and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for five years from the election by the general meeting of
the shareholders on 15 May 2017 for the accounting year 2017.
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. The Group’s business operations, who continue
to evolve due to ongoing improvement projects, are largely the same as last year. Impairment
assessment of goodwill carries the same characteristics and risks this year and has consequently
been in our focus for the 2021 audit.
Key Audit Matter How our audit addressed the Key Audit Matter
Impairment assessment of goodwill
The carrying value of goodwill amounted
to USD 24,260 thousands as of 31
December 2021, which is about 20% of
total assets. Goodwill should be tested for
impairment annually, or when there are
indicators of impairment. An impairment
test of goodwill was performed at year
end 2021. The test did not result in an
impairment charge being recognized.
The impairment test involved significant
management judgement; and a potential
impairment loss may have material
impact on the carrying value of the
Group’s assets. The judgement was
mainly related to estimating future cash
flows and the discount rate. See note 13
(Intangible assets) where the impairment
model and key assumptions are
disclosed.
We evaluated and challenged management’s
impairment model. We corroborated the elements in
the model to the requirements in IFRS and found no
material inconsistencies. Further, we tested the
mathematical accuracy of the impairment model. We
challenged management’s use of assumptions in the
future cash flow estimate. We found that future cash
flow estimates were based on the budgets approved by
the Board of Directors. We tested managements’
budgeting accuracy by performing look-back analysis
of budgeted growth rate and EBITDA margin against
actuals. When we found deviations, we assessed
management’s explanations and corroborated with
other evidence available to us. To challenge the
assumptions in the impairment model, we held
discussions with management. We found that the
future cash flow estimates were sensitive to the applied
growth rate and EBITDA margin. Based on our testing
and discussions with management, we found
management’s budgeting for the purpose of this
impairment test, to be reliable.
In order to evaluate the assumptions used to build the
discount rate, we used external market data and
observable data from comparable companies. We
AUDITOR'S REPORT
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of AqualisBraemar LOC ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of AqualisBraemar LOC ASA, which comprise:
• The financial statements of the parent company AqualisBraemar LOC ASA (the Company),
which comprise the balance sheet as at 31 December 2021, the income statement and
statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting principles, and
• The consolidated financial statements of AqualisBraemar LOC ASA and its subsidiaries (the
Group), which comprise the consolidated balance sheet as at 31 December 2021, the
consolidated statement of income, consolidated statement of other comprehensive income,
consolidated statement of changes in equity and consolidated statement of cash flows for the
year then ended, and notes to the financial statements, including a summary of significant
accounting policies.
In our opinion:
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2021, and its financial performance and its cash flows for the year then ended in
accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway, and
• the financial statements give a true and fair view of the financial position of the Group as at 31
December 2021, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the Audit Committee.
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 Financial Statements section of our report. We are independent of the Company and the
Group as required by laws and regulations and the International Ethics Standards Board for
Accountants’ International Code of Ethics for Professional Accountants (including International
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Independent Auditor's Report - AqualisBraemar LOC ASA
(3)
found the assumptions to be reasonable based on our
knowledge and available evidence.
Finally, we considered disclosures in note 13 to the
consolidated financial statements and found them
appropriate.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appears to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable legal requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view of the consolidated financial
statements of the Group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Independent Auditor's Report - AqualisBraemar LOC ASA
(4)
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the 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 considered material if, individually or in
aggregate, they could reasonably be expected to influence the economic decisions of users taken on
the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We 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 the Company's or the Group'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 and the
Group'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
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 and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• 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 financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
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(5)
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.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
Report on Other Legal and Regulatory Requirements
Report on compliance with Regulation on European Single Electronic Format
(ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name 5967007LIEEXZXH86096-2021-12-31-en have been prepared in
accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the
accompanying Regulation on European Single Electronic Format (ESEF).
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the single
electronic reporting format required in ESEF. This responsibility comprises an adequate process and
the internal control procedures which management determines is necessary for the preparation,
tagging and publication of the financial statements.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 28 April 2022
PricewaterhouseCoopers AS
Anders Ellefsen
State Authorised Public Accountant (Norway)
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| 83
The European Securities and Markets Authority (ESMA) issued
guidelines on Alternative Performance Measures (“APMs”) that
came into force on 3 July 2016. Alternative performance measures
are meant to provide an enhanced insight into the operations,
financing and future prospects of the company. The Company has
defined and explained the purpose of the following APMs:
Adjusted EBITDA
Adjusted EBITDA which excludes depreciation, amortisation and impairments, share of net profit (loss) from
associates, transaction costs related to acquisitions, restructuring and integration costs is a useful measure
because it provides useful information regarding the Company’s ability to fund capital expenditures and
provides a helpful measure for comparing its operating performance with that of other companies. EBITDA
may not be comparable to other similarly titled measures from other companies. A reconciliation between
reported operating profit/(loss) and EBITDA is shown below.
Amounts in USD thousands 2021 2020
Operating profit (loss) (EBIT) 7,3 7 5 2,946
3,790 1,477
76 1,393
362 185
1,475 318
Adjusted EBITDA
13,078 6,320
Adjusted EBIT
Adjusted EBIT which excludes amortisation and impairments, share of net profit (loss) from associates,
transaction costs related to acquisitions, restructuring and integration costs is a useful measure because it
provides an indication of the profitability of the Company’s operating activities for the period without regard
to significant events and/ or decisions in the period that are expected to occur less frequently.
Alternative Performance Measures (APM)
A reconciliation between reported operating profit/(loss) and EBIT adjusted is shown below.
Amounts in USD thousands 2021 2020
Operating profit (loss) (EBIT) 7,3 7 5 2,946
356
76 1,393
362 185
1,475 318
Adjusted EBIT
9,645 4,843
Adjusted profit (loss) after taxes
Adjusted profit (loss) after taxes which excludes amortisation and impairments, share of net profit (loss)
from associates, transaction costs related to acquisitions, restructuring and integration costs and certain
finance income is a useful measure because it provides an indication of the profitability of the Company’s
operating activities for the period without regard to significant events and/or decisions in the period that
are expected to occur less frequently. A reconciliation between adjusted profit (loss) after taxes and profit
(loss) after taxes is shown below.
Amounts in USD thousands 2021 2020
Profit (loss) after taxes 3,218 1,513
356
76 1,393
362 185
1,475 318
Adjusted profit (loss) after taxes
5,435 3,280
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
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Return on equity (ROE)
ROE is calculated as the adjusted profit (loss) for the period attributable to equity holders of the parent,
divided by average total equity for the period. The adjusted profit (loss) is annualised for interim period
reporting. This measure indicates the return generated by the management of the business based on the
total equity. The calculation of ROE is shown below.
Amounts in USD thousands 2021 2020
Adjusted profit (loss) after taxes 5,435 3,280
66,092 34,240
ROE
8.2% 9.6%
Return on capital employed (ROCE)
ROCE is calculated as the adjusted EBIT for the period, divided by average capital employed for the period.
Capital employed is defined as total assets less non-interest bearing current liabilities. The adjusted EBIT is
annualised for interim period reporting. This measure indicates the return generated by the management of
the business based on the capital employed. The calculation of ROCE is shown below.
Amounts in USD thousands 2021 2020
Adjusted EBIT 9,645 4,843
115,090 119,036
89,276 90,383
Average capital employed 91,547 71,681
ROCE 10.5% 6.8%
Order backlog
Order backlog is defined as the aggregate value of future work on signed customer contracts or letters of
award. AqualisBraemar LOC’s services are shifting towards “call-out contracts” which are driven by day-to-
day operational requirements. An estimate for backlog on “call-out contracts” are only included in the order
backlog when reliable estimates are available. Management believes that the order backlog is a useful
measure in that it provides an indication of the amount of customer backlog and committed activity in the
coming periods.
Working capital and working capital ratio
Working capital is a measure of the current capital tied up in operations. The amount of working capital
will normally be dependent on the revenues earned over the past quarters. Working capital includes trade
receivables, contact assets and other current assets, trade payables, current tax payable, contract liabilities
and other current liabilities. Working capital may not be comparable to other similarly titled measures from
other companies. Working capital ratio provides an indication of the working capital tied up relative to the
average quarterly revenue over the past two quarters.
Amounts in USD thousands 31 December 2021 31 December 2020
Working capital
43,235 41,498
18,101 12,916
Net working captial
35,523 27,543
37,892 35,062
Working capital ratio
94% 79%
CONTENTS | ABL GROUP | FROM THE BOARDROOM | FINANCIAL STATEMENTS | AUDITOR’S REPORT | APM
