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Contents
1. Board of directors report ................................................................................................................................ 2
2. Responsibility statement .................................................................................................................................. 9
3. Corporate governance report ................................................................................................................... 10
4. Consolidated financial statement ............................................................................................................ 18
Consolidated statement of comprehensive income ............................................................. 18
Consolidated statement of financial position ............................................................................ 19
Consolidated statement of change in equity ............................................................................ 21
Consolidated statement of cash flow ............................................................................................22
Notes to the consolidated financial statement ........................................................................ 23
5. Financial statement Aquila Holdings ASA ............................................................................................ 47
Statement of comprehensive income ............................................................................................ 47
Statement of financial position .......................................................................................................... 48
Statement of changes in equity ........................................................................................................ 50
Statement of cash flow ........................................................................................................................... 51
Notes to the financial statements ..................................................................................................... 52
6. Auditors report .................................................................................................................................................... 62
7. Sustainability report .......................................................................................................................................... 66
2
1. Board of directors report
Aquila Holdings ASA (“Aquila” or the “Company”) and its subsidiaries (together referred to as the
“Group”) is a seismic multi-client and investment company. The legacy seismic business manages
a seismic ocean bottom node multi-client data library. The corporate headquarters of Aquila is
Askekroken 11, 0277 Oslo, Norway. The Company is listed on Euronext Expand Oslo and traded
under the ticker AQUIL. Following the Annual General Meeting on 24 May 2023, the Company
The Company’s investment arm may invest broadly in listed companies as well as companies
expected to be listed in the near term. The Group’s investment portfolio consists of two listed
companies and one unlisted company. Aquila will selectively consider additional investments
going forward.
The Company’s legacy seismic business operates under the name Axxis Geo Solutions. The
Company manages a seismic multi-client data library with assets in Norway and Egypt.
The seismic multi-client data business model is frequently the preferred way to access seismic
data for petroleum exploration and production (E&P) companies. The seismic data is licensed by
E&P companies to assist in the discovery and development of petroleum resources. The Group’s
return on investment from its multi-client library is seen through the life span of the data; from
its early stage with revenues coming from the pre-funding by E&P companies during the
execution of the program, through subsequent late sales after the seismic images are
processed and available.
The Group’s multi-client data is targeting near-field exploration, where production infrastructure
is in place and where E&P companies need high-quality seismic data to unlock existing and new
resources. In these production fields, oil and gas can be developed with lower cost,
environmental impact and emissions.
With a sustained high oil price (in the range $75-85 per barrel of oil equivalent), it is expected that
near-field exploration will continue to be considered highly attractive for the E&P companies.
Aquila expects the investment in exploration and development in our core areas to be durable
and reinforced by the attractive long-term demand outlook.
Accounting principles
The consolidated financial statements are prepared in accordance with IFRS as adopted by the
European Union.
The Company has not adopted any standards, interpretations or amendments that have been
issued but are not yet effective.
All financial statements in this report are presented on a going concern basis in accordance with
the Norwegian Accounting Act section 3-3a, and the Board of Directors confirms that the
prerequisites for going concern assumption are present.
Financial results, financial position and capitalization
Revenues related to multi-client data are recognized at the point of delivery of completed data
to the customer, leading to relatively high volatility in results quarterly and annually. Revenues
related to reprocessing of multi-client data is recognized over time and is booked according to
percentage of completion.
3
Revenues in 2023 amounted to USD 8.2 million compared to USD 7.3 million in 2022. The
increase is driven by revenues arising from the reprocessing of the Utsira data library in 2023.
A USD 1.0 million reduction in fair value of financial assets was recognized under other gains
and losses in 2023 compared to a gain of USD 0.7 million in 2022.
Changes in the fair value of the investment portfolio in 2023 was a loss of USD 0.3 million
compared to a loss of USD 13.4 million in 2022.
Cost of sales of USD 5.8 million for 2023 compares to USD 0.4 million during the same period in
2022. The cost increase is driven by costs related to the reprocessing of the Utsira data library.
The selling, general and administrative costs in 2023 are at the same level as in 2022.
The straight-line amortization of the multi-client library was USD 6.4 million for 2023 compared
to USD 4.0 in 2022. The increase is the result of the amortization of the Gulf of Suez multi-client
library which commenced in Q4 2022.
Operating loss for 2023 was USD 7.7 million compared to operating profit of USD 0.3 million in
2022.
Net financial items amounted to USD 0.4 million in 2023 compared to USD 0.1 million in 2022.
Income tax income of USD 7 thousand compared to USD 1.7 million for 2022. The tax income in
2022 of USD 1.4 million is related to the devaluation of the Egyptian Pound (“EGP”) in addition to
refunded taxes in India amounting to USD 0.3 million.
The Company has not recognized any deferred tax assets in the balance sheet as of 31
December 2023. Tax loss carried forwards for 31 December 2023 is estimated to be USD 44.8
million.
The Group has a net loss of USD 8.1 million in 2023 compared to a net profit of USD 1.4 million
in 2022.
As of 31 December 2023, the Company had total assets of USD 43.9 million, compared to USD
52.8 million as of 31 December 2022.
Total non-current assets of USD 39.7 million as of 31 December 2023 compared to USD 47.3
million as of 31 December 2022. The reduction is driven by amortization of the multi-client
library in 2023 and reduction of financial assets of USD 1.0 million.
Total current assets decreased from USD 5.4 million as of 31 December 2022 to USD 4.2 million
as of 31 December 2023. The decrease is driven by a reduction in accrued income compared
to 2022, partly offset by increased trade receivables. The Company’s cash balance ended at
USD 2.0 million on 31 December 2023.
The Group’s net equity was USD 38.1 million at the end of December 2023, representing a net
decrease of USD 9.5 million compared to 31 December 2022. Purchased own shares in 2023
account for USD 1.3 million of the net decrease. The equity ratio is 86.9% as of 31 December
2023 compared to 90.3% as of 31 December 2022.
Total current liabilities increased with USD 0.6 million compared to 2022, mainly dure to increase
in trade payables. The tax accrual is related to estimated income tax liabilities arising from the
operations in Egypt. A material part of other current liabilities is also related to estimated Egypt
taxes.
Cash flow from operations, investments and financing
The Group’s cash flow from operating activities in 2023 was USD 1.3 million compared to USD
1.1 million in 2022.
4
No investments have occurred in 2023. The Group’s cash flow from investment activities in
2022 was negative with USD 1.5 million due to the investment in Dolphin Drilling of USD 2.0
million and USD 0.5 million received from the sale of the node business.
The Group’s cash flow from financing activities in 2023 was mainly due to purchasing of own
shares of USD 1.4 million compared to USD 0.4 million in 2022. Also, final payment on the TGS
loan of USD 0.9 million was made in 2022.
Key financial indicators
* Revenue, cost of sales, SG&A
** Bank deposits, net trade receivable, marketable securities
*** Net asset value per share; total assets – total liabilities divided by number of shares
Risk management and internal control
Aquila’s activities are dependent on the capital spending budgets of E&P companies in the oil
and gas industry. These budgets are, in turn, largely a function of actual and/or expected shifts
in oil and gas prices. Consequently, Aquila’s activities, opportunities and profitability are linked to
fluctuations in these prices.
The multi-client library is the Group’s largest asset. The surveys in the library are subject to
commercial risk. At times, Aquila will have to impair the values of the surveys if the future
licensing potential diminishes because of market conditions, regulatory changes, lack of
exploration success in the relevant area, changes in customers’ strategic priorities, etc.
The Group is also exposed to capital markets developments resulting in fluctuations in the
market values of investments in shares and non-listed shares. There is also a risk that the
companies in the investment portfolio will need further capital to obtain profitability, and that
such capital will be subject to reduced pricing compared to the current pricing.
Liquidity risk arises from a lack of correlation between free cash and financial commitments. As
of 31 December 2023, Aquila held current assets of USD 4.2 million of which cash and cash
Profit and loss
2023
2022
Revenue
8 237
7 258
Changes in fair value of investments (loss)
(251)
(13 447)
Operating profit (loss) (EBIT) (7 686)
(264)
Cash earnings * (26)
4 442
Net profit (loss)
(8 087)
1 396
Basic earnings (loss) per weighted average shares (in USD)
(0.04)
0.01
Financial position 31.12.2023
31.12.2022
Bank deposits
2 038
2 197
Available liquid funds **
8 457
8 688
Total assets
43 882
52 777
Total equity
38 120
47 652
Ratio analysis 31.12.2023
31.12.2022
Equity ratio
86.9 %
90.3 %
Net asset value per share (NOK) ***
1.76
2.00
5
equivalents represented USD 2 million, and current liabilities were USD 5.5 million. The Board
considers the liquidity risk of the Group to be low.
Aquila is exposed to credit risk through sales and receivables and uses it best efforts to
manage this risk by monitoring receivables and implementing credit checks and other actions
as deemed appropriate in addition, excess cash is placed in either bank deposits or financial
instruments that have a minimum rating of ‘investment grade’.
The Group’s maximum exposure to credit risk at the reporting date is the carrying value of each
class of financial assets, such as account receivables, other short-term receivables, and non-
current assets. Aquila evaluates the concentration of risk with respect to trade receivables as
low due to the Group’s credit rating procedures and because our customers generally are large
energy companies considered to be financially sound. Aquila is focused on maintaining
adequate internal controls.
Aquila is exposed to financial risk such as currency, liquidity, and credit risk. The operational
exposure to currency risk is low as a significant portion of revenues earned and costs incurred
are in USD. However, as a significant part of the Group’s taxes are calculated and paid in NOK
and EGP, fluctuations between NOK/EGP and the USD result in currency exchange gain or
losses. Any potential dividends are likely to be paid in NOK and fluctuations between NOK and
USD could result in currency exchange gains or losses.
Aquila operates in a range of tax jurisdictions with complex considerations and legislation
concerning both indirect and direct taxation, especially in Egypt. Thus, uncertainties exist
related to reported tax liabilities and exposures. Recognized taxes (both direct and indirect) are
based on all known and available information and represent our best estimate as of the day of
reporting.
The jurisdictions in which Aquila operates are also subject to changing tax regulations, which
may impact assessments, for instance concerning the recoverability of credits. Furthermore, tax
authorities may challenge the calculation of both taxes and credits from prior periods. Such
processes and proceedings may result in changes to previously reported and calculated tax
positions, which in turn may lead to Aquila having to recognize operating of financial expenses
in the period of change.
The Group's multi-client business relies on a period of exclusivity in controlling the distribution
of the acquired data through licenses to customers. The exclusivity period granted by local
authorities can typically be 10 years. Any change in the duration of such exclusivity may have a
negative impact on the Company's revenues and may cause impairment of remaining book
values.
Aquila is exposed to different types of climate-related risks, which are addressed by the Board
of Directors’ sustainability strategy. Please refer to the sustainability report for more details.
The Group is exposed to risk associated with cybersecurity. Please refer to the sustainability
report for more details.
Reference is made to Note 12 of the consolidated financial statements and to the more
detailed information on risk management and Internal control in the corporate governance
section of the annual report.
Organization, working environment and equal opportunity
At the end of 2023, Aquila employees 2.7 man-years compared to 3.5 in 2022.
The Board considers the working environment to be good. Please refer to the sustainability
report for more details about the workforce.
6
Health, safety and environmental
Aquila is fully committed to safeguarding and maintaining the environment in which we operate
and live, while also providing a safe and healthy workplace for our employees, contractors,
vendors, and customers. Aquila manages and monitors these activities through corporate
policies, procedures and guidelines.
More detailed information on Aquila’s health, safety and environmental initiatives may be found
in the sustainability report, included in a separate section of the annual report.
Sustainability and corporate social responsibility
Ensuring that Aquila’s business operates in a sustainable way and provides sustainable solutions
for our customers is high on the Board of Directors agenda.
Aquila is committed to minimizing and mitigating the potential disruption to the marine and
onshore environment and climate that may be caused by its operations. Proper project planning
and management as well as coordination with our vendors, partners and local communities play
a significant role in ensuring that our operations do not have a detrimental impact on the
environment.
For more information, including information on the Norwegian Transparency Act, please refer to
the sustainability report, included in a separate section of this annual report.
Board structure and corporate governance
The Board of Directors consists of three directors serving until the annual general meeting in
2025. All the directors are independent. The audit committee consists of two members.
Aquila has an independent nomination committee consisting of two members elected by the
shareholders.
No material transactions other than the remuneration disclosed in Note 18 of the consolidated
financial statements have occurred in 2023 between Aquila and its management, directors and
its shareholders.
Aquila emphasizes independence and integrity in all matters relating to the Board of Directors,
management and its shareholders.
The Group conducts a compliance program designed to continually inform and educate
employees on ethical and legal issues.
Aquila bases its corporate governance policies and practices on the Norwegian Code of
Practice for Corporate Governance issued on 14 October 2021 (the “Code of Practice”). The
Board of Directors believes that Aquila complies in all areas with the Code of Practice and will
address compliance with any subsequent amendments. A more detailed description on how
Aquila complies with the Code of Practice and the Norwegian Accounting Act’s requirements
for reporting on corporate governance is included in the report on corporate governance
included in this annual report.
Salary and compensation
Aquila compensates its employees according to market conditions that are reviewed on an
annual basis including base salary, insurance and retirement benefits programs. For further
details, please refer to note 18 of the report on consolidated financial statements.
The members of the Board of Directors do not participate in any bonus plan, profit-sharing plan
or stock incentive plan. The directors’ compensation is based on a fixed fee. The remuneration
is not related to the Group’s financial results.
The Group has international liability insurance for the Board of Directors and management. The
insurance coverage is up to NOK 50 million per year for total revenue of NOK 612 million.
7
Annual result for the parent company and allocation of result
In 2023, the Group’s parent company Aquila Holdings ASA did not have any revenues compared
to USD 153 thousand in 2022.
In 2023, Aquila reported a loss after tax of USD 2.8 million compared to a profit after tax of USD
3.8 million in 2022. The reported loss was caused by personnel and other expenses, in addition
to a change in fair value of financial assets. Last year’s profit was significantly impacted by the
reversal of intercompany receivables net of USD 11.7 million, partly offset by the write-down of
shares in subsidiaries with 5.1 million.
At year-end 2023, Aquila had total assets of USD 48.1 million compared to USD 48.9 million at
the end of 2022. Investment in shares in subsidiaries increased with of USD 2.2 due to capital
increases, financial asset reduced with USD 1.0 million due to the change in fair value of
financial assets described above and reduction of intercompany receivables with USD 2.4
million. The bank balance at year end was USD 1.5 million, an increase of USD 0.6 million
compared to last year.
As of 31 December 2023, Aquila has a net equity of USD 38.4 million, compared to USD 42.6
million at the end of 2022. The equity ratio 31 December 2023 was 81.8 % compared to 87.2%
at the end of 2022. Total current liabilities have increased with USD 3.5 million compared to last
year.
The Board of Directors has proposed the loss for the Company of USD 2.8 million to be
allocated to accumulated earnings.
Outlook
Solid industry fundamentals will support historically high oil prices and continued investment in
the E&P sector. Despite a robust sector outlook, the timing of multi-client late sales is
unpredictable and dependent on licensing rounds as well as internal oil company scheduling.
We should expect sales to be lumpy and this does not speak to the long-term underlying multi-
client values and future sales potential. The uncertainties in Egypt will impact sales there in the
near term.
With the company’s revised strategic focus, we will evaluate new multi-client investment
opportunities. We will also review potential strategic transactions.
Distributions to shareholders or share repurchases will continue to be considered to the extent
this is believed to be the best allocation of capital.
Events after the reporting period
As of 31 December, the Company held a total of 19 148 168 own shares. In accordance with
the Company’s announced share buyback program of up to NOK 5 million, an additional 1 184
139 shares were purchased after year end 2023 and the Company currently holds 8.5% of its
share capital. As of 6 February 2024, the Company completed its share buyback program.
On 22 February 2024, the Group announced USD 1.1 million in revenues relating to Utsira multi-
client transfer fees.
On 29 February it was announced that the Group entered into a settlement agreement with
TGS ASA, whereby TGS receives an ownership interest in the previously announced Utsira
reprocessing project. In return, the Company receives an ownership interest in TGS’ artificial
intelligence geological interpretation project over Utsira, which is developed in collaboration
with Earth Science Analytics. The settlement does not have an impact on the Company’s book
value or its net asset value per share.
8
Oslo, 18 April 2024
The Board of Directors and CEO of Aquila Holdings ASA
Nina Skage Ketil Skorstad Torstein Sanness
Chair Director Director
Nils Haugestad
Interim CEO
9
2. Responsibility statement
Confirmation from the Board of Directors and general manager
The Board of Directors and the chief executive officer of Aquila Holdings ASA have today
considered and approved the annual report and financial statements for the 2023 calendar year
ended on 31 December 2023.
We confirm, to the best of our knowledge, that:
The 2023 financial statements for the Group and the Company have been prepared
in accordance with all applicable accounting standards.
The information provided gives a true and fair view of the Group’s and the Company’s
assets, liabilities, financial position and results.
The Board of Directors report provides a true and fair overview of the development,
performance and financial position of the Group and the Company, together with a
description of the principal risks and uncertainties that they face.
Oslo, 18 April 2024
The Board of Directors and CEO of Aquila Holdings ASA
Nina Skage Ketil Skorstad Torstein Sanness
Chair Director Director
Nils Haugestad
Interim CEO
10
3. Corporate governance report
Implementation and reporting on corporate governance
The Company has established a corporate culture to build confidence and trust among its
stakeholders. Key elements are open and honest communication, a system of internal controls
and policies and a compliance program.
The Company's corporate governance is based on the following main objectives:
a. Open, reliable, and relevant communication with the outside world regarding the
Company's business and matters related to corporate governance.
b. Equal treatment of the Company's shareholders.
c. Independence between the board, the management and the shareholders to avoid
conflicts of interests.
d. A clear division of work between the board, management and shareholders.
e. Good control and corporate governance mechanisms to achieve predictability and
reduce the level of risks for shareholders and stakeholders.
The Company endorses and complies with the Norwegian Code of Practice of Corporate
Governance (the “Code of Practice”) dated 14 October 2021 found at www.nues.no. The Code
of Practice is based on a "comply or explain" principle, which means that listed companies must
comply with the Code of Practice or explain why an alternative approach has been chosen. The
Company will comply with the Code of Practice and any deviations will be listed below.
Business conduct
Policies for ethics and corporate social responsibility have been established.
It is important for the Company to be aware of potential problems as early as possible and
procedures have been put in place to require employees to report any known or suspected
ethical irregularities. The Company has in place appropriate whistleblower procedures for
individuals to report concerns of non-compliance. A more detailed descriptions of our
compliance program is included in our sustainability report which is included in our annual
report.
The Group is committed to ensuring a safe and respectful working environment for its
employees. The health and wellbeing of our people is the key to the Company’s success.
Equality applies to all practices and guidelines relating to the recruitment process and hiring of
all workers. We respect and protect the fundamental human and workers’ rights in a manner
consistent with laws and regulations.
The Group promotes a healthy workplace by prohibiting discrimination due to gender, race, age,
ethnicity, disability, sexual orientation or religion and provides fair compensation for employees’
work. Respect for the individual is a cornerstone of the Group’s operation.
A summary of the strategic direction and a risk review is included in the board of directors
report for 2023, which is part of the annual report 2023 and available on the company website.
Corporate social responsibility
The Company believes that sustainable business practices can fully support successful business
development. A more detailed description of the Company’s sustainability practices is included
in the sustainability report which is included in the annual report.
11
Business
Aquila is an investment company. The Company comprises an ocean bottom node multi-client
company and an investment arm. The Company may invest broadly in listed companies as well
as companies expected to be listed in the near term.
The Company’s objectives and strategies are to create value for shareholders. When carrying
out this work, the Company shall consider financial, social and environmental issues. The
Company have policies for how it integrates the interests of the society at large into the value
creation.
Equity and dividends
As of 31 December 2023, equity amounted to USD 38.1 million (including a share capital of
USD 28.7 million). This corresponds to an equity ratio of 81.8%, which the Board of Directors
(“Board”) considers to be satisfactory. The adequacy of the Company’s capital is monitored
closely with respect to the Company’s objectives, strategy and risk profile.
The Board proposes any distribution of dividends to the annual general meeting. The annual
general meeting determines any distribution of dividends in accordance with Section 8-1 and
Section 8-2 of the Norwegian Public Limited Companies Act. The grounds for any proposal to
authorize the Board to approve the distribution of dividends shall be explained. The Board also
considers share repurchases if this is deemed more attractive for our shareholders.
The annual general meeting in May 2023 approved repurchase of own shares up to 10% of
nominal value. The Board has not proposed any dividends to be paid for the financial year 2023.
Any proposed authorizations to the Board to increase the Company's share capital shall be
restricted to defined purposes and shall be dealt with as separate agenda items at the general
meeting.
The Board authorizations shall be limited in time to the date of the next annual general meeting,
but in no event later than 30 June the same year. This also applies to any authorization to the
Board for the Company to purchase its own shares.
Equal treatment of shareholders and transactions with close associates
The Company has only one class of shares. All shares have one vote each and otherwise equal
rights in all respects.
All shareholders shall be treated on an equal basis unless there is a just cause for treating them
differently in accordance with applicable laws and regulations. In the event of an increase in the
share capital of the Company through issuance of new shares, a decision to waive the existing
shareholders' pre-emptive rights to subscribe for shares shall be justified. If the Board resolves
to issue new shares and waive the pre-emptive rights of existing shareholders pursuant to a
Board authorization granted by the general meeting, the justification shall be publicly disclosed
in a stock exchange announcement issued in connection with the shares issue. The reasons for
any deviation from equal treatment of all shareholders in capital transactions will be included in
the stock exchange announcement made in connection with the transaction.
Any transactions carried out by the Company in the Company's own shares shall be carried out
on Euronext Expand Oslo and in any case at prevailing stock exchange prices. If there is limited
liquidity in the Company's shares, the Company shall consider other ways to ensure equal
treatment from shareholders. Any transactions in own shares will be evaluated in relation to the
rules on the duty of disclosure, as well as in relation to the prohibition against illegal insider
trading and market manipulation, the requirement for equal treatment of all shareholders and
the prohibition of unreasonable business methods.
12
Transactions with close associates
Any transactions, agreements or arrangements between the Company and shareholders; a
shareholder's parent company; members of the management or close associates of any such
parties, may only be entered into as part of the ordinary course of business and on arm's length
market terms. All such transactions shall where relevantly comply with the procedures set out in
the (NPLLCA). The Board shall obtain an independent third-party evaluation, unless the
transaction, agreement or arrangement in question is immaterial or covered by the provisions of
section 3-16 of the NPLLCA.
Freely negotiable shares
There shall be no limitation with respect to any party's ability to own, trade or vote for the
Company's shares. The articles of association contain no restrictions on negotiability of the
shares.
General meetings
The annual general meeting is the ultimate corporate body. The Board and the chief executive
officer are typically present at the annual general meeting, as well as the company’s auditor.
The minutes from the annual general meeting and any extraordinary general meeting are made
available on the Company’s website shortly after the date of any such general meeting and are
also available for inspection at the Company’s corporate office in Oslo.
The annual general meeting for 2024 will be held on 23 May 2024. The notices for the annual
general meeting and any extraordinary meeting and all supporting documents are made
available on the Company’s website no later than three weeks in advance of the meeting. The
notice is also mailed (post or email) to registered shareholders.
The last annual general meeting was on 24 May 2023, the minutes from which are available on
the Company’s website.
Exercise of rights
The Board shall ensure that the Company's shareholders can participate at general meetings.
This shall be facilitated by the following:
The Board shall ensure that the Company's shareholders can participate in the general
meeting.
The proposed resolutions and any supporting documents shall be sufficiently detailed,
comprehensive, and specific, allowing shareholders to understand and form a view on
all matters to be considered.
The deadline for shareholders to give notice of their attendance at the general
meeting shall be no later than two business days prior to the date of the general
meeting in accordance with the articles of association.
Shareholders who cannot attend the meeting in person will be given the opportunity
to vote. The Company will design the form for the appointment of a proxy to make
voting on each individual matter possible and should nominate a person who can act
as a proxy for shareholders.
The Board and the chair of the general meeting shall ensure that the shareholders are
able to vote separately on each individual matter, including on each individual
candidate nominated for election to the Board and other corporate bodies (if
applicable).
The chair of the Board shall be present at general meetings. The auditor shall be
present at general meetings where matters of relevance for the auditor is on the
agenda. The Board shall ensure that the chair of the general meeting is independent.
13
Participation without being present
Shareholders who are unable to attend the general meeting shall according to the Company's
articles of association be given the opportunity to vote in writing and/or vote electronically in a
period before the general meeting in accordance with the NPLCA Section 5-8. Furthermore,
shareholders who are unable to attend the general meeting in person shall be given the
opportunity to vote by proxy. In this respect, the Company shall:
Provide information in the notice to the general meeting on the procedure for
attending by proxy.
Nominate a person who can act as a proxy for shareholders.
Prepare a proxy form, which shall, insofar as possible, be set up so that it is possible
to vote on each individual item on the agenda and candidates that are nominated for
election.
Nomination committee
The articles of association of the Company require it to have a nomination committee that is
responsible for the nomination of directors to the Board and recommend remuneration payable
to the directors.
The nomination committee shall consist of up to 3 members elected by a general meeting for a
period of up to two years unless the general meeting decides a shorter period. The nomination
committee shall make recommendations and prepare proposals to the general meeting for:
Election of members to the Board and remuneration of the directors of the Board and
any Board committees.
Election of the nomination committee and remuneration of the nomination
committee.
The proposals shall be made available no later than 21 days prior to the general meeting.
The nomination committee shall meet at least annually with the Board. The committee shall also
consult with selected shareholders to ensure that the nomination committee has their support.
Board composition and independency
The Board shall be composed in a way that it can (i) attend to the common interests of all
shareholders and meet the Company's need for expertise, capacity and diversity and (ii) act
independently of special interests. The majority of the shareholder-elected Board members shall
be independent of the management and significant business contacts. At least two of the
members of the Board shall be independent of the Company's major shareholder(s).
For the purposes of these policies, a major shareholder
shall mean a shareholder who owns or
controls more than 10% of the Company's shares or votes, and independence shall entail that
there are no circumstances or relations that may be expected to be able to influence an
independent assessment of the person in question. The Board shall not include members of
the management.
The chair of the Board is elected by annual general meeting. The term of office for members of
the Board shall not be longer than two years at a time. Members of the Board may be re-
elected.
The Company's annual report shall provide information regarding the expertise of the members
of the Board, as well as information on their history of attendance at board meetings. Further,
the annual report shall identify the members of the Board that are independent. Members of
the Board are encouraged to own shares in the Company.
The Board consists of three members all of whom are deemed independent of Aquila’s
management, major shareholders, and material business contacts.
14
The work of the board of directors
The Board is responsible for the overall management and supervision of the Company. The
Board has implemented instructions for the Board and the management, focusing on
determining a clear allocation of internal responsibilities and duties. The respective objectives,
responsibilities and functions of the Board and the chief executive officer shall follow rules and
standards applicable to the Company and are described in the Company's "
Instructions for the
Board
" and "
Instructions for the CEO
".
The Board shall ensure that the members of the Board and the members of the management
make the Board aware of any material interests that they may have in matters to be considered
by the Board.
The Board's consideration of matters of a material character in which the chair of the Board is,
or has been, personally involved, shall be chaired by another member of the Board to ensure a
more independent consideration of the matter in question.
In 2023, there were 8 Board meetings where the following were participating.
Nina Skage 7 of 8 meetings
Torstein Sanness 6 of 8 meetings
Ketil Skorstad 6 of 8 meetings (personal deputy was attending the 2 missing meetings)
In 2023, there were 4 audit committee meetings where the following were participating.
Nina Skage 4 of 4 meetings
Torstein Sanness 4 of 4 meetings
Board committees
The Board has established an audit committee but has not appointed a remuneration
committee. A remuneration committee has not been deemed to be of importance by the
Board. The Board has decided to maintain a simple and cost-effective governance structure.
The Board will determine the remuneration and compensation scheme of the Company in
accordance with applicable law.
Audit committee
The Board has established an audit committee, which is a working committee for the Board,
preparing matters and acting in an advisory capacity. The duties, tasks and composition of the
audit committee shall follow the NCPLLA. In particular, the audit committee shall act as a
preparatory body and support the Board in the exercise of its responsibility relating to financial
reporting, auditing, internal controls, compliance with ethical policy such as environmental,
social and governance.
The members of the audit committee are elected amongst the members of the Board for a
term of up to two years. The entire Board shall not act as the Company's audit committee. At
least one member of the audit committee should be competent in respect of finance and
audit, and a majority of the members should be independent of the Company. The mandate of
the audit committee is subject to annual revision.
The Board shall provide details in the annual report of the audit committee and any other board
committees, if appointed.
Risk management and internal control
The Board monitors Aquila’s risk exposure and oversees the Company’s internal control systems
for risk management to ensure they are appropriate for the Company’s activities in relation to
the extent and nature of the Group's business activities.
15
The Board carries out an annual review of the Group's most important areas of exposure to risk
and its internal control measures. The review pays particular attention to:
Changes relative to previous years' reports in respect of the nature and extent of
material risks and the Company's ability to cope with changes in its business and
external changes.
The extent and quality of the management's routine monitoring of risks and the
internal control system and, where relevant, the work of the internal control function
The extent and frequency of the management’s reporting to the Board on the results
of such monitoring, and whether this reporting makes it possible for the Board to
carry out an overall evaluation of the internal control situation in the Group and how
risks are being managed.
Events of material shortcomings or weaknesses in internal control that come to light
during the year which have, could have, or may have had a significant effect on the
Group’s financial results or financial standing.
How well the Company’s external reporting process functions.
Based on the instructions by the Board, the chief executive officer implements internal control
measures and proposes the same to the Board.
The chief executive officer effectuates internal control measures based on the instructions by
the Board and reports the results to the Board annually in accordance with the Board’s annual
plan. The report to the Board provides a balanced presentation of all material risks and how
such risks are handled through the internal control measures of the Company.
The main areas of internal control related to financial reporting are described and included in
the corporate governance report and in the annual report. This account includes sufficient and
properly structured information to make it possible for shareholders to understand how the
Company's internal control system is organized. The account addresses the main areas of
internal control related to financial reporting. This includes the control of environment, risk
evaluation, control activities, information and communication and follow-ups.
Renumeration of the board of directors
The remuneration of the Board is designed to attract and retain an optimal Board structure in a
competitive environment. The directors’ compensation is recommended by the nomination
committee and determined by the shareholders at the annual general meeting each year. The
Board's remuneration shall reflect the Board's responsibility, expertise, use of time and the
complexity of the Company's business activities. Remuneration shall not be dependent on or
linked to the Company's performance.
If any Board member has received remuneration above the standard Board member fee, this
shall be specified in the annual report.
Deviation from the Code of Practice: the Company has granted options to the Board in 2021.
Executives renumeration
The Company has prepared a policy for determining remuneration to the chief executive officer
and other executive members in accordance with Section 6-16a of the NPLLCA, which is clear
and easily understandable. The policy shall always support the prevailing strategy, long-term
interests, financial sustainability and values of the Company.
The total remuneration to the chief executive officer and other executive members consists of
basic salary (main element), benefits in kind, variable salary, pension and insurance schemes.
16
Performance-related remuneration to the executive members in the form of share options,
bonus programs or similar shall be linked to value creation for shareholders or the Company's
profit over time. Such arrangements, including warrants and share option arrangements, shall
incentivize performance, and be based on quantifiable factors that the executive member in
question may influence. Such performance-related remuneration will ordinarily be subject to an
absolute limit.
The Board prepares a policy for the remuneration of executive members. This policy includes
the main principles for the Company's remuneration policy and contributes to aligning the
interests of the shareholders and the executive members. These policies are communicated to
the annual general meeting, and it is clearly stated which aspects of the policies are advisory
and which, if any, are binding. The general meeting shall vote separately on each of these
aspects of the policy.
Information and communication
Aquila’s investor relations policy is designed to inform the stock market and stakeholders of the
Company’s activities and status in a timely and accurate manner in compliance with applicable
listing rules. The Company submits quarterly and annual financial reports to Euronext Expand
Oslo. In addition, any interim information significant for assessing the Company’s value is
distributed as stock exchange announcements through Newsweb. This information is also
available on the Company’s website.
The Company uses the Code of Practice for reporting of investor relations issued by Oslo Stock
Exchange and the Norwegian Investor Relations Association as guideline for reporting.
Announcements are published in English only, and the Company has been granted exemption
from the Norwegian Tax Authority to publish its annual report in English only.
The Company’s quarterly earnings presentations are made available on the Company’s website.
The financial calendar setting out the dates for the coming year’s interim reports and annual
general meeting for shareholders is posted on the Aquila website.
Takeovers
Although it is recommended by the Code of Practice, the Board has not established separate
policy on how to respond in the event of a take-over bid, but will comply with the following
principles should such event occur:
In the event of a takeover bid, the Board will ensure that.
a. Shareholders in the Company are treated equally.
b. Shareholders are given sufficient information and time to form a view of the offer.
c. The Group's business activities are not disrupted unnecessarily.
d. The bid is not hindered or obstructed by the Board unless there are reasons to do that.
e. In case the bid is made for the Company's shares, no authorizations or resolutions are
exercised or made by the Board with the intention to obstruct the take-over bid unless
this is approved by the general meeting after the announcement of the bid.
With respect to any agreements entered by the Company and a bidder, the following principles
shall apply:
a. An agreement limiting the Company's ability to arrange other bids for the Company's
shares shall only be entered into if it is self-evident that such an agreement is in the
Company and the shareholders' common interest. This shall also apply to any agreement
on financial compensation to the bidder if the bid does not proceed.
b. An agreement that is material to the market's evaluation of the bid shall be disclosed no
later than at the same time as the announcement that the bid will be made is published.
17
c. Any transaction that
de facto
is a disposal of the Company's activities shall be decided
by the general meeting.
If an offer is made for the Company's shares, the Board shall issue a statement recommending
its shareholders to accept or decline the offer. The Board's statement shall make it clear
whether the views expressed are unanimous, and if such is not the case, explain the basis on
which specific members of the Board have excluded themselves from the statement. The
Board shall ensure that an explained valuation of the offer is prepared by an independent
expert, which shall be disclosed no later than at the time of the disclosure of the Board’s
statement.
Auditor
The Board has determined the procedure for the external auditor’s regular reporting to the
Board. The auditor attends at least one meeting each year with the Board in executive session
where the Company’s management is not represented. In addition, the auditor participates in
the meetings of the audit committee relating to the preliminary annual financial statements. If
there are any significant changes from the preliminary accounts, the auditor may also
participate in the meeting that approves the annual financial statements.
The Company’s external auditor presents to the audit committee the primary features of the
plan for the execution of the audit, and reports on the key accounting principles and estimates
and the results of the audit to the audit committee and the Board. The auditor also presents
any internal control weaknesses and improvement opportunities to the audit committee and
the Board.
The Board reports the remuneration paid to the auditor at the annual general meeting, including
details of the fees paid for audit work and any fees paid for other assignments. The audit fee is
determined by the annual general meeting.
The auditor is required to attend a general meeting if the business to be transacted is of such
nature that his or her attendance must be considered necessary. In addition, the auditor is in
any case entitled to participate in the general meeting.
In accordance with applicable accounting regulations, the Company is required to tender its
audit services each ten years. The Company is required to rotate its auditor after twenty years
with the same audit firm.
18
4. Consolidated financial statement
Consolidated statement of comprehensive income
USD thousands Note
2023
2022
Revenue 3,4 8 237
Changes in fair value of investments (loss) 3,11
(251 )
(13 447 )
Other gains (losses) 3,4 (1 000 )
Cost of sales 5
(5 791 )
(399 )
Selling, general and administrative expenses 3,18
(2 472 )
(2 417 )
Amortization multi-client 10
(6 409 )
(3 983 )
Write-up multi-client (reversal of impairment) 10
Depreciation & impairment
(559 )
Operating profit (loss) (EBIT) (7 686 )
(264 )
Financial income 6
Financial expenses 6
(394 )
(81 )
Currency exchange gain (loss) 6
(39 )
(69 )
Profit (loss) before tax (8 093 )
(362 )
Income tax (expense) 7
Profit (loss) for the period (8 087 )
Currency translation adjustments
-
Other comprehensive income (loss) for the period
Total comprehensive income (loss) for the period (8 087 )
Earnings (loss) per share
Basic earnings per average share
(0.04 )
Diluted earnings per average share
(0.04 )
19
Consolidated statement of financial position
USD thousands Note
31.12.2023
31.12.2022
Assets
Non-current assets
Multi-client library 10 31 082
Investments 11 6 570
Financial assets 12 2 029
Total non-current assets 39 682
Current assets
Trade receivables
Other current assets 9 1 265
Bank deposits, cash in hand 8 2 038
Total current assets 4 200
Total assets 43 882
USD thousands Note
31.12.2023
31.12.2022
Equity and Liabilities
Equity
Share capital and other paid in capital 16 79 909
Own shares 16 (1 799 )
(489 )
Other reserves 16 (39 991 )
(31 769 )
Total equity 38 120
Current liabilities
Trade payables 13 545
Taxes payables
Other current liabilities 15 2 935
Total current liabilities 5 762
Total liabilities 5 762
Total equity and liabilities 43 882
20
Oslo, 18 April 2024
The Board of Directors and CEO of Aquila Holdings ASA
Nina Skage Ketil Skorstad Torstein Sanness
Chair Director Director
Nils Haugestad
Interim CEO
21
Consolidated statement of change in equity
USD thousands
Share
capital
Additional
paid-in
capital
Own
shares
Accumulated
earnings
Other
equity/
Share
based
program
Total
equity
Balance as of 01.01.2023 28 739
(489 )
(32 191 )
Profit (loss) for the period
(8 087 )
(8 087 )
Other comprehensive income
(loss)
Purchase own shares
(1 310 )
(138 )
(1 448 )
Share based payment
Balance as of 31.12.2023 28 739
(1 799 )
(40 415 )
USD thousands
Share
capital
Additional
paid-in
capital
Own
shares
Accumulated
earnings
Other
equity/
Share
based
program
Total
equity
Balance as of 01.01.2022 28 739
(33 611 )
Profit (loss) for the period
Other comprehensive income
(loss)
Purchase own shares
(489 )
(464 )
Share based payment
Balance as of 31.12.2022 28 739
(489 )
(32 191 )
22
Consolidated statement of cash flow
USD thousands Note
2023
2022
Cash flow from operating activities
Profit (loss) before tax
(8 093 )
(362 )
Taxes refund (paid)
Depreciation, amortization and net impairment 10
(8 076 )
Changes in fair value of investments 11
Changes in other gains (losses) 4
(666 )
Other working capital changes
(3 496 )
Net cash from operating activities 1 302
Cash flow from investing activities
Disposal of property, plant and equipment
Cash received/paid from investments
(2 000 )
Net cash flow from investment activities -
(1 500 )
Cash flow from financing activities
Repayment of interest bearing debt
(896 )
Investment in own shares 16
(1 448 )
(464 )
Interest paid
(13 )
(59 )
Net cash flow from financial activities (1 461 )
(1 419 )
Net change in cash and cash equivalents (159 )
(1 807 )
Cash and cash equivalents balance 01.10/01.01
Cash and cash equivalents balance 31.12 8
23
Notes to the consolidated financial statement
24
the amounts recognized in the consolidated financial statements have been discussed in the
individual notes of the related financial statement line items.
25
26
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