Annual Report (ESEF) • Mar 23, 2022
Preview not available for this file type.
Download Source FileUntitled Annual report 2021 Cloudberry Clean Energy ASA Cloudberry Annual report 2021 Introduction 2 Content Cloudberry in brief 3 Letter from the CEO 4 Overview and highlights 6 Executive Management 18 Board of Directors 20 Board of Directors report 23 Sustainability report 32 Corporate Governance report 78 Consolidated financial statements Group 90 Parent company financial statements 158 Responsibility statement 176 Alternative performance measures 177 Auditor’s report 181 3Cloudberry Annual report 2021 Introduction Cloudberry in brief Cloudberry is a renewable energy company, born, bred, and operating in the Nordics and in accordance with local traditions. We own, develop, and operate hydropower plants and wind farms in Norway and Sweden. We are powering the transition to a sustainable future by providing new renewable energy today and for future generations. We believe in a fundamental long-term demand for renewable energy in Europe. With this as a cornerstone, we are building a sustainable, scalable, ecient, and profitable platform for creation of stakeholder value. Reporting Cloudberry reports consolidated IFRS and proportion- ate 1 segment reporting to provide enhanced insight to the operation, financing and future prospect of the Group. Proportionate reporting is aligned with internal management reporting, analysis and decision making. The alternative performance measures (abbreviated APMs) provided by Cloudberry are a supplement to the financial statements that are prepared in accord- ance with IFRS. Cloudberrys ESG reporting and the companys approach to sustainability, is in accordance with the World Economic Forum (WEF) Stakeholder Capitalism Metrix, organized into four pillars, Principles of Governance, Planet, People and Prosperity. For more information see the Sustainability report. 1 See Alternative Performance Measure appendix for further definitions. Cloudberrys growth strategy Our current portfolio consists of 25 hydropower and three wind power assets. We have a local and active ownership strategy and prefer 100 per cent ownership; however, in certain investments we have proportionate ownership with strong, strategic partners. The scalable Cloudberry platform is positioned for valuable growth, both in terms of energy production and our in-house development backlog and pipeline. Cloudberry’s strategy is to continue to grow both organically and inorganically in the Nordic market. We are backed by strong owners and an experienced management team and board. Our shares are traded on Oslo Oslo Børs’ Main list, ticker: CLOUD. Cloudberrys business model Our business model will from 2022 comprise three revenue generating segments and one cost-ecient corporate segment: Develop, our fully owned development company has a long history of organic, in-house developments of wind and hydropower assets in Norway and Sweden. Production, our fully owned power producing company, is an active owner and manager of producing renewable assets. Operating (from January 2022), a 60 per cent owned company with a scalable operating platform. Our strong commitment to local communities and integrated value chain ensures local presence and optimization of stakeholder alignment and value creation. Our Nordic clean renewable platform Operations Development Production Cloudberry Annual report 2021 Introduction 4 We have managed to secure financing for all our mature projects and strengthen the company with hydro- and wind power development resources. 2021 has been a very active year for Cloudberry and we are proud of building a leading Nordic Independent Power Producer (“IPP”) – being better positioned for further valuable growth than ever before. The push for more renewable energy production has further strengthened in 2021. We see call for more renewable power, faster development of infrastruc- ture and support for tougher measurements for pol- luters. The Nordics is very well positioned for solving parts of the problem with some of the worlds best resources and industry capabilities. During 2021 we have seen how important new renewable production is for reaching the ambitious climate goals that the world has agreed upon. Cloudberry is committed to do its share for a greener Europe. Our bold ambitions to develop oshore wind projects has been a game changer. We decided to set up a separate Oshore Wind team and are very happy to have an experienced team lead by Charlotte Bergqvist onboard and in operation at year end. We will hear a lot more from them over the next years with exciting projects both on inland fresh water and in the Baltic Sea. We have also focused on strengthening the Cloudberry team in 2021. We have invested into great people and technology. The up listing to Oslo Børs’ Main list in June 2021 was a new milestone for us and important for building one of the leading IPP in the Nordics. We are convinced that the investments we did in 2021 will take Cloudberry to the next level over the years to come. Despite covid related issues both on the projects side and in the company, the team managed to solve the challenges as they came and delivered according to plan. We have a responsibility to operate our business in a sustainable manner. It is a high priority for us to reduce our environmental footprint as much as possible. Cloudberry has set a goal to be net-zero by 2040, and our development projects and producing power plants shall be as green and sustainable as possible. In 2021 Cloudberry has continued to build our ESG framework and continues our focus to make ESG and sustainability a competitive advantage. We contribute to a more sustainable society by developing new renewable projects in the Nordics. Through 2021 we have focused on growing the project pipeline and moving power projects from development stage into commissioning generating long term cash flow for the company – on time and budget. We doubled the production from 2020 to 2021 and we will be doubling it again during 2022. Letter from the CEO Building a leading Nordic renewable company with an attractive portfolio Letter from the CEO 5Cloudberry Annual report 2021 Introduction Anders J. Lenborg Chief Executive Ocer Our Sustainability Report 2021 will give you a taste of Cloudberry’s ESG work in practice. The demand for more renewable power in Europe will only increase in the years to come. With the devastating Russian attack on Ukraine, the European energy market is probably changed for good. The EU has put forward plans to cut all imports of Russian gas as soon as possible and with two thirds already in 2022. This comes on top of the already ongoing energy transition in Europe and will further speed up the process. The outlook is heavily influenced by an ongoing war in Ukraine, demand for more renewable power and the ongoing energy transition leading to record high gas- and power prices in 2022 and on the front of the price curve. We are committed to be part of the solution to secure sucient energy for Europe and at the same time taking part in solving the climate crises. For Cloudberry this most likely means a more active role with further opportunities for new renewable energy projects helping Europe to become less dependent on Russian oil and gas. We are proud to have delivered on our goals and to see that our strategy work. We are more than motivated to continue the valuable growth for Cloudberry and help to power the much-needed energy transition. You will see us doing more of the same in the years to come, so please join us on our quest to a more sustainable society for future generations! Our bold ambitions to develop oshore wind projects has been a game changer. Cloudberry Annual report 2021 Introduction 6 Overview and highlights Note hydro assets:Jåstadkraft AS (1MW) is not included in the overview, classified as held for sale. Production Producing incl. under construction Hydro assets: 26 Wind assets: 3 Capacity: 150 MW Production: 504 GWh (normalized) Develop Construction permit Wind assets: 4 Capacity: 218 MW Production: 615 GWh (normalized) Backlog Projects: 14 Capacity: 388 MW Pipeline of additional >20 projects and >2 500 MW Norway HQ Oslo Karlstad Oce Gothenburg Oce Sweden Pipeline Cloudberry delivers sustainable growth. In 2021, the company has scaled its production & development portfolio and strengthened its balance sheet significantly. Cloudberry is currently ramping up the oshore platform with a new oce in Gothenburg, Sweden. Below is an overview of our projects and portfolio per reporting date. 7Cloudberry Annual report 2021 Introduction Main developments in 2021 • Production increased from 21 GWh to 117 GWh (proportionate) • Revenue increased from NOK 4 million to NOK 41 million (consolidated) • Strengthened the balance sheet from NOK 1 055 million to 2 636 million (booked equity) • Increased corporate debt facility from NOK 700 million to NOK 1 400 million • Listed on Oslo Børs’ Main list, ticker: Cloud • 100% owner of the 100 MW shallow-water project, Stenkalles • New oshore team in Gothenburg, Sweden • Increased ownership from 15% to 33.4% in Odal Vind • Started construction of Hån wind farm • Completed several hydro projects on time and budget: Åmotsfoss, Nessakraft & Bjørgelva • Purchased two new hydro projects: Selselva and Usma Subsequent events • Purchased 60% of Captiva, adding an operating segment • Secured two late-stage wind development projects: Kafjarden & Munkhyttan • Secured two new hydro projects: Øvre Kvemma & Tinnkraft Acquisition of Captiva In January 2022, Cloudberry purchased 60% of the Captiva Group. Captiva is a data- driven operator, manager and developer of renewable energy in the Nordics. Captiva adds significant value to Cloudberry’s Nordic renewable strategy: • Development. Strengthen our hydro development capabilities • Operations. Strengthen our operational capabilities. Increased competence and industrial digitalization • Project management & Construction. Expanding project management and construction capacity in order reduce risk and to run more projects in parallel Cloudberry Annual report 2021 Introduction 8 Project portfolio 1 Cloudberry’s strategy is to develop, own and operate producing assets in the Nordic region. The figures below summarise the status of our projects. 1 Per reporting date 9Cloudberry Annual report 2021 Introduction Project Technology Location Price area Total capacity (MW) Ownership Cloudberry's proporionate capacity (MW) Cloudberry's estimated production (GWh) Status Finnesetbekken Hydro Norway NO-5 1 100% 1 3 Producing Røyrmyra Wind Norway NO-2 2 100% 2 8 Producing Forte (5 plants, NO-2) Hydro Norway NO-2 26 34% 8 29 Producing Forte (4 plants, NO-3) Hydro Norway NO-3 19 34% 6 21 Producing Forte (6 plants, NO-5) Hydro Norway NO-5 33 34% 11 37 Producing Selselva Hydro Norway NO-3 5 100% 5 20 Producing Nessakraft Hydro Norway NO-5 9 100% 9 34 Producing Bjørgelva Hydro Norway NO-4 3 100% 3 7 Producing Usma Hydro Norway NO-3 9 100% 9 26 Producing Åmotfoss Hydro Norway NO-2 5 100% 5 23 Producing Tinnkraft (new, 2022) Hydro Norway NO-2 2 100% 2 6 Producing Odal Vind Wind Norway NO-1 163 33.4 % 54 176 Const/Prod. H1 2022 Skåråna (2 plants) Hydro Norway NO-2 4 100% 4 14 Const/Prod. H1 2022 Ramsliåna Hydro Norway NO-2 2 100% 2 6 Const/Prod. H1 2022 Hån Wind Sweden NO-1 21 100% 21 74 Const/Prod. H2 2022 Kvemma (new, 2022) Hydro Norway NO-5 8 100% 8 20 Const/Prod. H1 2024 Total 1 (Producing/under constr.) 311 150 504 Käfjarden (new, 2022) 1 Wind Sweden SE-3 40 100% 40 70 Constr. Permit Munkhyttan (new, 2022) Wind Sweden SE-3 18 100% 18 60 Constr. Permit Duvhalllen Wind Sweden SE-3 60 100% 60 165 Constr. Permit Stenkalles (Vanern) Oshore Sweden SE-3 100 100% 100 320 Constr. permit Total 2 (incl. constr. permit) 529 368 1 119 1 Project capacity 20 - 40 MW pending final development and turbine selection. 0 50 100 150 200 250 300 350 400 Total Stenkalles Duvhallen Munkhyttan Käfjarden Total Kvemma Hån Rams. & Skåråna Odal (33.4%) Total Tinnkraft Åmotsfoss Usma Bjørgelva Nessakraft Selselva Forte (34%) Røyrmyra Finnesetbekken Producing Under construction Construction permit 1 2 25 MW 5 9 3 9 5 2 54 61 6 21 8 150 40 18 60 100 368 Cloudberry Annual report 2021 Introduction 10 Project Status Type Location Ownership Production estimate proportionate Finnesetbekken Nesbyen, Norway 100% 1 MW 3 GWh Røyrmyra Hå, Norway 100% 2 MW 8 GWh Forte portfolio Norway 34% 25 MW 87 GWh Selselva Sunnfjord, Norway 100% 2 MW 20 GWh Nessakraft Balestrand, Norway 100% 9 MW 34 GWh Bjørgelva Sørreisa, Norway 100% 3 MW 7 GWh Current portfolio of assets in production and under construction, and projects with construction permit 11Cloudberry Annual report 2021 Introduction Project Status Type Location Ownership Production estimate proportionate Usma Selbu, Norway 100% 9 MW 26 GWh Åmotsfoss Nissedal, Norway 100% 5 MW 23 GWh Tinnkraft Tinn, Norway 100% 2 MW 6 GWh Odal Vind Innlandet, Norway 33.4% 54 MW 176 GWh Skåråna (2 plants) Lund, Norway 100% 4 MW 14 GWh Ramsliåna Flekkefjord, Norway 100% 2 MW 6 GWh STATUS In production Under construction Construction permit Cloudberry Annual report 2021 Introduction 12 STATUS In production Under construction Construction permit Project Status Type Location Ownership Production estimate proportionate Hån Årjäng, Sweden 100% 21 MW 74 GWh Kvemma Lærdal, Norway 100% 8 MW 20 GWh Käfjarden Eskilstuna, Sweden 100% 40 MW 70 GWh Munkhyttan Lindesberg, Sweden 100% 18 MW 60 GWh Duvhällen Eskilstuna, Sweden 100% 60 MW 165 GWh Stenkalles (Vänern) Karlstad, Sweden 100% 100 MW 320 GWh 13Cloudberry Annual report 2021 Introduction Cloudberry Annual report 2021 Introduction 14 15Cloudberry Annual report 2021 Introduction Key Performance Measures in 2021 Financials Consolidated FY 2021 (FY 2020) Revenue 41m (4m) EBITDA -32m (-30m) Cash, year-end 1 115m (605m) Interest bearing debt, year-end 304m (263m) Total equity, year-end 2 636m (1 055m) Proportionate FY 2021 (FY 2020) Revenue 83m (5m) EBITDA -25m (-27m) Sustainability 2021 (2020) CO 2 reduction EU-27 electricity mix 28 633 tons CO eq. (5 378 tons CO eq.) Direct and indirect emissions 203 tons CO eq. (187 tons CO eq.) Compensated -507 tons CO eq. (-187 tons CO eq.) Production Proportionate 2021 (2020) Production 117 GWh (21 GWh) In operation year-end 58 MW (27 MW) Development Proportionate 2021 (2020) Construction permits year-end 160 MW (151 MW) Backlog year-end 370 MW (370 MW) Cloudberry Annual report 2021 Introduction 16 Market and power prices In our view, the demand for clean renewable power in Europe will continue to increase. Businesses are seeking clean energy sources and shifting their strategies towards net-zero carbon emissions, while regulators are speeding up decision making with stricter penalties for emissions. During 2021, we saw an increase of corporates seeking PPAs to cover their own electrical supply. We expect a further increase in the coming years. The war in Ukraine may cause long term eects and changes to the European energy markets. During 2021, Europe, and the Nordics, saw record high power prices, primarily driven by soaring gas prices. A doubling of the CO 2 prices, little rain in Norway and less-than-normal wind across Europe drove the prices further up. For the year 2021, the Nordic System price ended at above 62 euro/MWh, the highest ever recorded price. For NO1, NO2 and NO5, the average price for 2021 ended at approximately 75 euro/MWh. However, the internal price dierence in Norway were at record levels: In Northern Norway, the average price ended at 35 euro/MWh. Similarly, prices in Southern Sweden (80 euro/MWh) were twice the average price in Northern Sweden (42,5 euro/MWh) for the year. We expect the internal price dierences to sustain, although at lower, relative levels in the medium to short term. At long term, additional grid development (such as the upgrade of the 300 kV Aurland-Sogndal line to 420 kV), will reduce the bottleneck between the Norwegian price areas NO3 and NO5. Going forward, we expect the high gas- and CO 2 -prices to keep the prices higher than normal in especially NO1, NO2 and NO5 in 2022. More- than-usual rain during the spring/summer/autumn seasons might change the outlook. During 2021, about 90% of Cloudberry’s power sale was sold at spot prices. So far in 2022, 100% of Cloudberry’s power production is exposed to spot prices. We remain positive to Nordic power prices, especially in the southern price areas in Sweden (SE3+4) and Norway (NO1+2+5). However, the Company is actively pursuing opportunities, primarily with corporate o-takers. On 24 February 2022, Russia attacked Ukraine. Russia, as the largest exporter of natural gas to Europe, has since been the subject of heavy sanc- tions. The Nord Stream 2, a gas pipeline between Russia and Germany has been abandoned, and the EU has put forward plans to cut all imports of Russian gas as soon as possible. The results have been record high gas- and power prices in the first quarter of 2022, and on the front of the price curve. The outlook is heavily influenced by the (at the time of writing) ongoing war, with high energy prices, high volatility, and uncertainty. 17Cloudberry Annual report 2021 Introduction 0 20 40 60 80 100 2010 2015 2020 2025 2030 Base Dec 2021 High Dec 2021 Low Dec 2021 80 0 10 20 30 40 50 60 70 2010 2015 2020 2025 2030 NO1 NO2 NO3 NO4 NO5 SE1 SE2 SE3 SE4 Forecasted Nordic spot price of base load power EUR/MWh (real 2021) Source: Volue Area Prices in the base scenario 2021-2030, incl. historical prices 2010-2020 EUR/MWh (real 2021) Cloudberry Annual report 2021 Introduction 18 Executive Management Anders J. Lenborg Chief Executive Ocer Anders is the founder of Cloudberry. He is responsible for manag- ing the company’s overall operations and the development and execution of the long-term strategies. Anders is an experienced lawyer within the infrastructure and renewable energy section in the Nordics. Anders was previously a partner and Head of the Energy Sector Group at DLA Piper Norway. He holds a law degree from the University of Oslo and a postgraduate diploma from King’s College in London. Christian A. Helland Chief Value Ocer As CVO, Christian is responsible for the finances of the company. Since 2008, he has been a lead investor for renewable projects in the Nordics and Germany. He has 13 years of experience in the investment and finance industries. He was previously partner and portfolio manager at Pareto Asset Management. Christian holds a Master’s degree in Systems Engineering from Cornell University, a Master’s degree in Business Economics from University of California and a Bachelor of Science degree in Mechanical Engineering from University of California. Jon Gunnar Solli Chief Operating Ocer Jon Gunnar is responsible for day-to-day operations of the Cloudberry portfolio. He is a former CFO and investment manager with more than 20 years of experience in the asset management industry. Jon Gunnar was previously a CFO/CIO at OVF, Nordea Asset Management, SpareBank 1 Livsforsikring and Storebrand. He holds a Master’s degree in Accounting & Auditing from Norwegian School of Economics (NHH) and is a state authorized public accountant. 19Cloudberry Annual report 2021 Introduction Charlotte Bergquist Chief Development Ocer Charlotte is from 2022 responsible for the Development segment with a special emphasis on Cloudberry’s shallow-water and oshore portfolio. She is a former developer for wpd Oshore, Vice Chair of the Board at the Swedish TSO, Svenska Kraftnet, Chairperson of Power Circle and the Founder of Kraftkvinnorna. Charlotte has a Master of Business Admin. from Gothenburg School of Economics and Commercial Law. Stig J. Østebrøt Chief Technology Ocer Stig has been the CEO of the Captiva Group for the last 10 years and responsible for Cloudberry’s operations segment from 2022. He is the Chairperson of Kraftanmelding, Chairperson of Fjord Energi and a former analyst from EY. Stig has an Executive MBA from Norwegian School of Economics and a Master’s degree from BI Norwegian Business School. Cloudberry Annual report 2021 Introduction 20 Board of Directors Frank J. Berg Chair of the Board Frank J. Berg has more than 30 years of experience in the energy and utility industry including having spent the last 15 years in the Nordic renewables market. He was previously a partner at Arthur Andersen, and the law firm Selmer, with a particular focus on renewables, infrastructure and sustainability. Frank serves as chairman and board member of a number of companies, including Salten Kraftsamband AS and Nordic Wind Power AS. Frank is Chair of the Board and head of the Audit Committee in Cloudberry. Frank holds a Master’s degree in Accounting & Auditing from the Norwegian School of Economics (NHH) and a PED from IMD, Lausanne. Morten Bergesen Board member Morten Bergesen has been the CEO of Havfonn and Snefonn, the Bergesen family’s investment companies since they were founded in 2003. Since inception, sustainability has been at the core of their investment strategy and a guiding star for their role as active share- holders. Morten is a member of the board of directors of Arendals Fossekompani, the chairperson of Cogen Energia, Bergehus Holding, Klynge and IFM AG. Morten is a member of the Audit Committee in Cloudberry. He holds a degree from BI Norwegian Business School. Petter W. Borg Board member Petter W. Borg has more than 35 years of experience in investment banking and asset management. He is the former CEO of Pareto Asset Management, a position he held for 18 years. Petter is the chairperson of Attivo Eiendom, and House of Maverix. In addition, he is a member of the board of directors of Ferd Holding, Grieg Investor, Fearnley Asset Management and Nordic Aquafarms. Petter is head of the Compensation Committee and member of the ESG Committee in Cloudberry. Petter holds a degree in Economics from Handelsakademiet. 21Cloudberry Annual report 2021 Introduction Benedicte H. Fossum Board member Benedicte Fossum currently chairs the board of Smartfish AS and is a board member of Alliero AS, Salmo Trace AS and family oces. As one of the founders of Pharmaq AS, she has managerial experience in R&D, M&A, and regulatory aairs from the Norwegian Medicines Agency. She maintains a special interest in sustainability, combining biological and economical perspectives. Benedicte is a member of the Audit Committee and the ESG Committee in Cloudberry. Benedicte is a veterinarian from the Norwegian University of Life Sciences. Liv Lønnum Board member Liv Lønnum is currently working as a political adviser to the Progressive Party’s parliamentary group at Stortinget. Part of her responsibility includes energy policy development, with a focus on sustainability. She has been State Secretary/Deputy Minister at the Ministry of Petroleum and Energy and has considerable experience of both business and politics in Norway. She has previously worked at Storebrand ASA, Compass Group and Hammer & Hanborg. Liv is a member of the Compensation Committee in Cloudberry. Liv holds a Bachelor’s degree in Economic and Administration from the Norwegian School of Management and York University in Toronto, Canada. Cloudberry Annual report 2021 Board of Directors report 22 23Cloudberry Annual report 2021 Board of Directors report Cloudberry has successfully built a scalable and publicly available Nordic platform for new production, development and operation of Nordic hydro and wind power. During the last year, the Company has ramped up production, scaled the oshore team and strengthened the balance sheet. After a successful listing on Oslo Børs’ main list in June, the company is well financed and positioned to execute on a portfolio close to 1 TWh per year. By locating the projects close to the interconnecting cables, Cloudberry will provide clean energy to the European market. Cloudberrys business model and strategy The Company has an integrated business model with three business segments, Development, Production and Corporate (Operations is added as a fourth segment from 2022). A sustainable and local approach is key to its strategy, together with a commitment to long-term value creation for all stakeholders. Development holds a portfolio of renewable pro- jects in Sweden and Norway and is responsible for developing the projects with external construction partners. Production is the owner of the operating assets, with power sold in the spot market (NordPool) and under fixed price Power Purchase Agreements (PPAs). Cloudberry cultivates the portfolio to ensure a diversification and balance of risk, returns, assets and geographical scope. Cloudberry considers material financial and ESG related factors when making strategic decisions. The company is building a robust business and uses competitive financing to deliver sustainable and profitable long-term growth. Cloudberry operates in a market with unique char- acteristics when it comes to renewables. The hydro and the wind resources in the Nordics are among the best in the world. The company uses its local knowledge and network to grow through greenfield developments and acquisitions. Cloudberry is well positioned for taking part in structural opportunities in the rapidly growing Nordic renewable sector. In this landscape, the company uses the listing on Oslo Børs to provide access to capital, transparency, and investment opportunities. The company finalized the uplisting from Euronext Growth to Oslo Børs’ Main List in June 2021. Cloudberry believes in being local, focused and agile. The long-term growth strategy rests upon its ability to create value for all stakeholders, uses the best possible technology available, brings down costs, and enhances sustainable operations. Board of Directors report Cloudberry Annual report 2021 Board of Directors report 24 Operating our business in a sustainable way Sustainability is at the very core of Cloudberrys business and crucial for the companys long-term achievements and value creation. The company wants to be a driver of a positive change and is committed to powering the transition to a sustaina- ble future by providing renewable energy today and for coming generations. Cloudberry creates value in the communities it works, together with and for its employees, customers, business partners, and shareholders. Developing new renewable assets is essential to reduce the global CO 2 emissions. Cloudberry believes that a systematic approach towards incorporating sustainability matters in the value chain is imperative to fulfil its purpose. The development and production of renewable energy contribute to the transition to green energy, European and national climate targets, and the UN Sustainable Development Goals. Businesses are shifting their strategies towards net-zero carbon targets and Cloudberry sees increased demand for renewable energy supply. 2021 has been a transitional year for Cloudberry and the company has grown significantly both in developing projects and in adding new assets to its portfolio. Cloudberrys sustainability management has been strengthened in 2021, and the ESG report highlights the activities from 2021 and describes plans for 2022. Governance Cloudberry adheres to good governance standards and will at all times seek to ensure that the company complies with the Norwegian Code of Practice for Corporate Governance of October 2021, issued by the Norwegian Corporate Governance Board (NUES). This includes disclosure and transparency in Cloudberrys business to provide shareholders and stakeholders with precise and accurate information concerning all aspects regarding Cloudberry. In 2021, the Board of Directors established an envi- ronmental, social and governance (ESG) committee consisting of two Board Directors and the Chief Sustainability Ocer. The committee ensures align- ment with the companys sustainability strategy and ESG concerns, evaluates, and follows up the companys ESG strategy. A due diligence guideline on evaluation of environmental, social and governance aspects was incorporated as an integral part of Cloudberrys operational and investment decisions. Cloudberry shall conduct its business in a highly ethical manner with integrity, dignity and respect towards all its surroundings. The company’s Code of Conduct is the basis for how the company acts and performs its business. All new employees are introduced to the Code as an integral part of the onboarding, and all personnel are followed up with training in the Code. The Code of Conduct is revised and audited by the Board of Directors annually. Cloudberry wants to be made aware of any irregu- larities or other concerns regarding the organization and its business, and in 2021 the company rolled out its whistleblowing policy and reporting channel. No instances or suspicion of corruption were raised in 2021. Planet Cloudberry positively impacts the energy transition when producing renewable energy. At the same time, the company impacts the planet through the construction and production of wind farms and hydropower plants. It is foremost to Cloudberry to reduce the environmental footprint as much as possible. Cloudberry made the strategic decision in 2020 to measure its greenhouse gas emissions in accordance with the guidelines of the Greenhouse Gas (GHG) Protocol. In 2021, the reported green- house gas emissions from scope 1,2, and 3 were 203 tonnes of CO 2 e. Cloudberry is a fossil-free company and has zero-emissions in Scope 1. Our climate strategy includes compensating for our emissions by purchasing carbon credits. Cloudberry has therefore been net-zero in its own operations (Scope 1 and 2) by removing CO 2 from the atmosphere through restoring mangrove forests. In addition, we take into account the emissions generated by our employees. Moving forward, Cloudberry will conduct the calcu- lation to determine a decarbonization pathway to reach net-zero in the value chain by 2040. In line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD), Cloudberry updated its risks related to its business development and expansion during 2021. Cloudberry will continuously analyse and assess its climate-re- lated risk strategy and further integrate them into its overall risk management strategy. 25Cloudberry Annual report 2021 Board of Directors report In 2021 Cloudberry assessed its eligible activities covered by the EU Taxonomy and technical screen- ing criteria and its proportion of Taxonomy-eligible and Taxonomy non-eligible economic activities in its total turnover, capital, and operational expend- iture. Assessments are carried out to evaluate Cloudberrys alignment to the technical screening criteria in the EU Taxonomy. Internal analysis of life cycle greenhouse gas (GHG) emissions from Cloudberry’s producing power assets indicates emissions significantly below the threshold set out in the EU Taxonomy (100g CO 2 e/kWh). Lifecycle GHG emissions, Do No Significant Harm (DNSH) and Minimum Safeguard principles will be assessed going forward and Cloudberry is prepared to report in accordance with the EU Taxonomy requirements on its hydro- and wind power assets. Cloudberry always considers environmental and social impacts prior to final investment decisions (FID). The Cloudberrys ESG due diligence guideline is integral for the evaluation of all its development and construction projects. The company strives to reduce its environmental impact and have deter- mined KPIs to monitor project development and related governance and management structures. People Cloudberry strongly focus on gender equality and diversity. This is not only manifested in policy guidelines but is the DNA in the company. During 2022 Cloudberry will implement adequate systems to measure and compare gender balance in the organization. Cloudberry fosters health and wellbe- ing in the workplace by providing a culture, founded on openness, respect, and care. As Cloudberry grows and the number of employees increases, it is even more important to focus on initiatives that bring new perspectives and ideas from employees and spark innovation and collaboration. The Board of Directors considers the working envi- ronment to be healthy and productive. The company did not have any material health and safety inci- dents in 2021 and absence due to illness was 1,06%. During the year 2021 no incidents causing harm to peoples health was recorded neither on construc- tion projects nor on our producing assets. Of the recordable work-related injuries none were classified as serious injuries but involved handling of tools and construction equipment. Health and safety are addressed in the Supplier Code of Conduct to safeguard a mutual commit- ment between Cloudberry and its suppliers and contractors, and training and awareness is required in our agreements with contractors. We continue to encourage employee engagement and strengthen our focus on identifying risk activities and preventive measures. The Supplier Code of Conduct is imple- mented in all our procurement phases starting from 2021. Cloudberry will assess existing human rights due diligence process against the Transparency Act (Åpenhetsloven) during 2022 to comply with the Act going forward. Prosperity Prosperity relates to Cloudberrys role in contributing to a societal value creation. Cloudberry contributes to economic growth by providing employment, local value creation, and renewable energy supply. Operating and providing renewable energy assets enables the necessary energy transition, to reach the climate goals. Cloudberrys long-term success is linked to conducting its business in a sustainable way with a long-term growth strategy that rests upon the ability to create value for stakeholders. Local value creation is important for Cloudberry in all its developing, construction and operating projects. The company seeks to identify local stakeholders’ needs and try to accommodate these in the plans. Constructing hydro and wind power plants have an impact on nature, but the production of renewable energy contributes to the necessary renewable energy transition. Cloudberry seeks to thoroughly analyse and assess the impacts to minimise foot- print where possible on environment and society. In the sustainability report Cloudberry describes which initiatives the company has implemented. Cloudberry provides details of its sustainability work in its Annual Report and specifically in the sustainability and corporate governance sections. Cloudberry’s reporting requirements under section 3-3 a and c of the Norwegian Accounting Act are as such addressed in this section. Cloudberry Annual report 2021 Board of Directors report 26 Covid-19 The market situation has been challenging with the risk and potential consequences of the global pandemic. The Covid-19 pandemic has aected more or less all businesses in some way. During 2021, Cloudberry has experienced some adverse impacts of the pandemic. The impacts are mainly related to government approvals or disruptions in our supply chain as a result of delayed deliveries from suppliers, with the addition of travel and entry restrictions, absence due to lockdowns and manda- tory quarantine. Despite restrictions due to Covid-19, the company has grown significantly and has delivered all projects without significant deviations from budget or time schedule. Cloudberry continues to assess risks related to the Covid-19 situation. The pandemic will influence the markets and give supply chain disruptions, and there is a risk that the pandemic will result in increased costs related to supply chains. Nevertheless, the company expects the pandemic to have limited overall impact on our projects. Financial Performance Financial summary In 2021 Cloudberry has grown significantly. The balance sheet, the portfolio of producing, under construction, and permit assets/projects has grown significantly. In June 2021, the Company was up listed from Euronext Growth to Oslo Børs’ Main list. At the end of the year Cloudberry entered the LOI to acquire Captiva, the transaction was closed in the beginning of January 2022. The acquisition of Captiva established a fourth business segment, operations to support, production, develop and cor- porate. Operations will be included in the segment reporting from 2022. Cloudberry Production grew the portfolio during 2021 with closing of several acquisitions, and both power production and revenue were ramped up. By year end, Production had 7 fully owned producing and revenue generating power plants and held signifi- cant interests in the Forte portfolio and Odal Vind. Cloudberry Development made a final investment decision (“FID”) on Hån in June 2021, completed the works on the Marker project according to the final report from the Norwegian directorate (“NVE”) and decided to keep 100% control of the shallow-water project, Stenkalles while working on the FID. Other early phase projects i.e., Bjørntjarnsberget has moved closer to a construction permit during the year. An important event during 2021 is the strategic deci- sion for Development to scale up within o-shore wind in Sweden. A new head of Development with focus on this area was hired in 2021. Corporate had an active year, Cloudberry Clean Energy ASA was uplisted to Oslo Børs’ Main list in June, the Company performed several capital raises and was active within merger and acquisitions. The debt facility with SR Bank was expanded in November to finance the Groups’ further growth. By year-end 2021, the total equity of Cloudberry was NOK 2 636m (NOK 1 055m at the end of 2020). The Group has a robust balance sheet with low debt, strong cash position and is fully funded for the portfolio of more than 290MW. Key figures The below information describes the operations of the consolidated Group in 2021, with the corre- sponding figures for 2020 in brackets. Figures are presented in NOK million. Profit and loss Profit before tax was NOK -64m (NOK -34m). This comprises reported net revenues of NOK 41m (NOK 4m) from sale of power, management services and insurance settlement. Operating expenses were NOK -89m (NOK -30m), share of profit from associ- ated companies was NOK 16m (NOK -4m), depreci- ations and amortization were NOK -10m (NOK -3m) and net finance items were NOK -22m (NOK -1m). EBITDA was NOK -32m (NOK -30m), and EBIT was NOK -41m (NOK -33m). Profit after tax for the year was NOK -63m (NOK -34m). Other comprehensive income consists of items that may subsequently be reclassified to profit and loss and amounts to NOK -7m (NOK -2m). This relates to movements of cash flow hedges with tax eects and foreign currency translation dierences. 27Cloudberry Annual report 2021 Board of Directors report Total comprehensive income was NOK -70m (NOK -36m), which was attributable to Cloudberry share- holders, while NOK 0m was attributable to non-con- trolling interests. The total loss of NOK -70m is suggested to be allo- cated to accumulated loss and retained earnings. Cashflow Cash flow from operating activities for the year was NOK -71m (NOK -4m). Cash flow from investing activities was NOK -829m (NOK -354m). Cash flow from financing activities amounted to NOK 1 411m (NOK 958m). For details, please see the consolidated statement of cash flows in the Group consolidated financial statements. At year-end, cash and cash equivalents were NOK 1 115m (NOK 605m). Financial position Total assets at year-end were NOK 3 118m (NOK 1 397m). The increase from last year primarily reflects acquisitions, business combinations and capital raises. Non-current assets totalled NOK 1 735m (NOK 435m) consisting of investment in producing assets and associated companies, while current assets were NOK 1 383m (NOK 962m), mainly project inventory, other current assets and cash, and cash equivalents. Total equity was NOK 2 636m (NOK 1 055m) at year end, corresponding to an equity ratio of 85% (76%). Total liabilities were NOK 482m (NOK 342m), with NOK 91m due within 12 months. Segments Cloudberry had in 2021 three business segments: Cloudberry Production (“Production”), Cloudberry Development (“Development”), as well as Cloudberry Clean Energy (“Corporate”). From 2022 Cloudberry will in addition report on Cloudberry Operations (“Operations”). Cloudberry Production Cloudberry Production owns long-term yield hydro and wind assets in Norway and Sweden. Power production is sold on a continuous basis through bilateral agreements or through the spot market, Nordpool. Producing assets are entitled to electricity certificates and guarantees of origin. Producing assets are remotely controlled from operational centres and Cloudberry has operational agreements with local partners. Cloudberry Group, consolidated 2021 2020 Operating revenues NOK million 41 4 EBITDA NOK million (32) (30) Profit for the year NOK million (63) (34) Total assets NOK million 3 118 1 397 Cash NOK million 1 115 605 Net interest bearing debt NOK million (811) (342) Total equity NOK million 2 636 1 055 Equity share % 85% 76% Producing during the year 1 GWh 117 21 Secured portfolio (Producing and under construction) MW 150 109 Secured portfolio (construction permit) MW 160 71 Secured portfolio (Backlog) MW 370 380 1 Includes proportionate share of production from associated companies. Cloudberry Annual report 2021 Board of Directors report 28 Cloudberry Production, segment 2021 2020 Total revenue NOK million 77 5 EBITDA NOK million 43 (2) Production (proportionate) GWh 117 21 Production capacity year-end MW 58 27 Secured portfolio (Producing & under construction) MW 150 109 Main activities The focus during 2021 has been on increasing production volumes and the construction of our new renewable projects · The hydropower plants Nessakraft and Bjørgelva was constructed on time and budget and deliv- ered in June. · Usma and Selselva was purchased during 2021 and in production · Åmotsfoss hydropower plant was taken over in December. The plant is producing from a large reservoir and has been in stable production since it was connected to the grid. · Odal Vind delivered first power to the grid in December. 15 of 34 Siemens turbines were installed per year end. Strong winds have slowed installa- tion, but the project team expect all turbines to be in full operation before end of June 2022. Final cost expected to be slightly higher than budgeted mainly due to Covid related delays (< 5% of capex). Expected equity IRR unchanged ~12% p.a. over the next 30 years. · Ramsliåna was connected to the grid in December and will be taken over by Cloudberry after a three- month commissioning period. · The hydropower plants in Skåråna Kraft are completed; hence the third-party grid owner has had connection delays. It is expected that the plants will generate revenue in the second quarter of 2022. Power production Cloudberry’s proportionate power production grew from 21 GWh to 117 GWh during the year. With the current projects under construction, Cloudberry expects to reach an annual production slightly above 500 GWh going forward. Cloudberry Development Cloudberry Development has a significant on- and oshore development portfolio with renewable assets in Sweden and Norway. Since inception, ten projects have been fully developed and sold to infrastructure investors and European insurance companies. Going forward Cloudberry has the option to either sell or maintain in-house projects for long-term cash flow. Larger projects may be farmed down in order to diversify risk. Cloudberry Development, segment 2021 2020 Total revenue NOK million 6 - EBITDA NOK million (30) (8) Construction permits MW 160 151 Backlog MW 370 370 In 2021, the main activities have been focused on growing the portfolio and moving existing projects in the portfolio forward. With the acquisition of Captiva in January 2022, further resources within hydro development have joined the Cloudberry team. Projects with construction permit increased from 151 to 160 MW per year end and has grown further in 2022 (218 MW per reporting date). Cloudberry has per year end an exclusive backlog of 370 MW (388 MW at the reporting date). The com- pany has ongoing dialogue with landowners, munic- ipalities and grid companies to clarify opportunities for new wind power projects. In addition to the on-shore activities, we are actively working on shallow water projects in the Baltic Sea, based on the experiences the company is gaining at Stenkalles wind farm (Vänern). It is a long-term goal to have a shallow-water project portfolio of > 2 500 MW in the Baltic Sea by 2030. From 2022 the segment has scaled up both onshore and o-shore with projects and new employees. Charlotte Bergquist will head the Development segment with an increased focus on shallow-water projects. 29Cloudberry Annual report 2021 Board of Directors report Cloudberry Corporate There was significant corporate activity in 2021. The company has during the year listed on Oslo Børs’ Main list, raised additional NOK 1 700 million in equity, increased the debt facility to NOK 1 400 million, pur- chased 60% of the Captiva Group and been active in the M&A market. Cloudberry Corporate, segment 2021 2020 Total revenue NOK million - - EBITDA NOK million (38) (16) By year end, there were four employees in the corporate segment. Cloudberry has outsourced several services in connection with Oslo Børs listing, financing and due diligence processes. The corpo- rate management aims to remain a cost-eective, agile and dynamic team. Risk Management The Group is exposed to various risks through its business’ value chain, including operational, political and financial risks. Cloudberry has extensive routines and policies in place to actively manage risks. Key risks are discussed, and policies are reviewed and approved by the Board of Directors on a regular basis. Operational and market risk All processes throughout the value chain are exposed to operational risk. A key operational risk is related to the operating performance of the produc- ing assets, but there is also risk relating to the pro- cess of transitioning development projects from the backlog and pipeline stage. Even though the Group has a solid project pipeline, finalizing the projects depends on a number of factors such as project availability, local authority approvals, environmental impact, suppliers, financing, power prices and the regulatory framework in the relevant market. Market risk is mainly related to the attractiveness of small-scale hydropower projects and wind projects in the Nordic markets, as derived from the devel- opment in power prices relative to the prices of key construction components. Cloudberry manages the risk through close follow-up and monitoring of operating assets and developing projects. Procedures and guidelines for the business are implemented and reviewed regularly. Additional information about operational and market risk is presented in the sustainability section of the Annual Report. See also further information in the Group Financial Statement, note 8 Commercial and operational risk. Political risk The Groups activities are subject to the laws and regulations applied by the governmental authorities in connection with obtaining licenses and permits, government guarantees, and other obligations regulated by law in each country. Regulatory author- ities exercise considerable discretion in matters of enforcement and interpretation of applicable laws, regulations and standards, the issuance and renewal of licenses and permits, capital transfer restrictions and in monitoring licensees’ compliance with the terms thereof. Cloudberry emphasises the uncertainty these factors have when making invest- ment decisions and continuously monitors changes in the political landscape and includes this in the relevant discussions. The power industry is a highly regulated sector, and thus subject to political risk. The high power prices observed during H2 2021 and so far in 2022 has increased political calls for further regulations of the power market in both countries the Group operates in. Political and public support for wind and hydro projects fluctuates over time and may aect the Group’s ability to obtain concessions for both technologies. In Norway, there has been an eective ban on filing for new land based wind power projects since 2019, and the new set of concession regu- lations are still not in eect by the time of writing. There is therefore unclear how the Norwegian wind power market will develop in the years to come. For further information risks related to politi- cal and regulations, please confer the Group Financial Statement, note 7 Market risks and note 8 Commercial and operational risk. Cloudberry Annual report 2021 Board of Directors report 30 Financial risk Through its business activities, Cloudberry is mainly exposed to market risks including power prices, interest rate risk, currency risk, credit risk and liquidity risk. Financial risk management is based on the objective of reducing negative cash flow eects and, to a lesser extent, negative accounting eects of these risks. Currency and interest rate risks are regulated by means of mandates and managed by using hedging instruments. Cloudberry’s interest rate exposure is related to its debt portfolio and managed based on a balance between keeping interest cost low over time and contributing to stabilise the group’s cash flows. The construction of the Group’s project will normally be financed with a combination of equity and debt. As a result, any increase of interest rates will lead to higher financing costs, which in turn reduces the Group’s profitability. Subsequently, the Group is dependent on external financing. If the Group is not able to obtain required financing on a timely basis and on attractive terms, the result could be lost business opportunities, shortened lifetime of current assets and/or that the Group is forces to realise its interest in certain projects. Fluctuations in exchange rates could aect the Group’s cash flow and financial position. The Group presents its financial statements in NOK. However, power is traded at Nord Pool, where EUR is the trading currency. The Group is also exposed to SEK through its operations in Sweden, hence the Group is exposed to currency risk through fluctuations in exchange rates between NOK, SEK and EUR. For further details, please confer the Group Financial Statement, note 9 Financial risks. Climate risk Cloudberry is exposed to climate changes related to more extreme weather, primarily driven by increasingly warmer climate, wetter and more windy weather conditions, or simply changes in normal weather conditions in local geographic areas. Such climate risk can pose a significant threat to humans, wildlife and society as a whole. For Cloudberry it can possibly aect the use and damage on producing assets, increased costs of maintenance and other costs, change performance due to change in waterfalls or other disruptions of core activities. Cloudberry has assessed its potential climate-re- lated risks and opportunities in accordance with the recommendations of the Task Force on Climate- related Financial Disclosure (TCFD). The company continuously analyses and assesses its climate-re- lated risk strategy to detect other risks and oppor- tunities, and to ensure that the company makes the right decisions and assessments on how climate risks might aect Cloudberry. The climate-related risks will be further integrated into overall risk man- agement structure in Cloudberry. The climate-re- lated risks are further described in the Sustainability Report. Covid-19 During 2021, Covid-19 continued to impact oper- ations across the Group. Travel bans, mandatory quarantine and disruptions to the supply chain have resulted in and may continue to result in delayed deliveries from the Group’s suppliers. It is currently not possible to predict the long-term consequences for the Group, but there is a risk that the ongoing pandemic will result in increased cost particularly to the Group’s development projects. See also further information in the Group Financial Statement, note 6 Covid-19. Outlook Cloudberry is financed to carry out our Nordic projects (close to 300 MW). The Company has built a strong and diversified shareholder base that makes us able to implement and finance our long-term growth strategy. In parallel to building a long-term portfolio of producing assets, the Company has succeeded in building an organization and attract- ing highly qualified employees who ensure that we can implement our plans and strategies. Through the acquisition and integration of Captiva, we ensure control over strategically important segments of our business model. We will further develop and oer many of Captiva’s services to other players in the industry. We have experienced and documented that our business model is scalable and gives the company access to significant growth opportunities in the Nordic region, within both wind and hydro power. We will continue to focus on our role as a local player, with a strong presence across the Nordics. 31Cloudberry Annual report 2021 Board of Directors report Oslo, 22 March 2022 The Board of Directors of Cloudberry Clean Energy ASA Frank J. Berg Chair of the Board Morten Bergesen Board member Petter W. Borg Board member Benedicte Fossum Board member Liv Lønnum Board member Anders J. Lenborg CEO Corporate Governance The Board of Directors has a strong commitment to maintain a high standard of corporate governance. This ensures trust, and eectively and continuously improve communication between management, the Board of Directors, shareholders, and other stake- holders. Cloudberry complies with the Norwegian Code of Practice (NUES). The Annual Report includes a statement on Cloudberrys corporate governance principles and practices, including corporate audit, internal control of financial reporting and the work of the Board of Directors. Going concern According to Section 3-3 of the Norwegian Accounting Act, the Board of Directors confirms that the Financial Statements have been prepared under the assumption that the Cloudberry Group is a going concern, and that this assumption was appropriate at the date of approval of the Financial Statements. The consolidated Financial Statements for the Group include the operations of Cloudberry Clean Energy ASA, its subsidiaries fully consolidated and associ- ated companies, which are equity accounted. The Group reports its Consolidated Financial Statements in accordance with International Financial Reporting Standards (IFRS) as adopted by the European Union (EU) and the interpretations issued by the IFRS Interpretation Committee (IFRSIC) applicable to companies reporting under IFRS and also comply with IFRS as issued by the International Accounting Standards Board (IASB). The consolidated accounts are prepared with Norwegian Kroner (NOK) as the reporting currency. Cloudberry Annual report 2021 Sustainability report 32 Sustainability report 33Cloudberry Annual report 2021 Sustainability report What we do We are powering the transition to a sustainable future by providing renewable energy today and for coming generations. We create value in the communities we work, together with and for our employees, customers, business partners, and shareholders. Content Introduction 34 Principles of Governance 39 Planet 46 People 64 Prosperity 69 WEF Metrics 74 Cloudberry Annual report 2021 Sustainability report 34 Introduction As a developer, owner and operator of renewable assets, sustainability is at the core of Cloudberry’s business and seen as a necessity for the companys long-term achievements and value creation. The company provides renewable energy for future generations and our long-term success is linked to operating the business in a sustainable way. In Cloudberry a long-term approach is coloured into everything we do. We treasure partnerships and work closely with our employees, business partners, shareholders, and with the landowners and the communities in which we operate. Together, we create value and share the result of our eorts fairly. “In Cloudberry we take great pride in powering the transition to a sustainable future by providing renewable energy today and for future generations. We develop, own, and operate our hydropower plants and wind farms in a responsible manner” Cloudberrys value statement Our various stakeholders expect us to navigate our business according to the strongest environmen- tal, social and governance (ESG) principles, and we expect nothing less of ourselves and from our partners and suppliers. As a listed company on Oslo Børs, operating in a highly regulated industry, we are continuously monitored, measured, and judged by the results we achieve, and by our business practice and ethics. We thrive with this scrutiny, which inspires us to continually improve. 2021 has been a transitional year for Cloudberry and the company has grown significantly both in developing projects and in adding new assets to our portfolio. We want to be a driver for positive change and are committed to powering the transition to a sustainable future by providing renewable energy today and for coming generations. Developing new renewable assets is essential to reduce the global CO 2 emissions. We realise, however, that our growth does not come without environmental impact. Construction and production do have an impact on biodiversity, land use areas and individuals’ interests. Cloudberry is conscious of the risks and seeks to understand and evaluate all aspects. We must carry out our work in a sustainable manner, and we recog- nize the need to continuously evolve our approach to ensure sustainability remains a key aspect in all our processes. We therefore take responsibility, knowing the choices we make underway matter, and focus on conducting our business with concern for our impact on environmental, social and governmental aspects at all times, and has set a goal to be net- zero across the value chain by 2040. Our Values Supportive Commitment Continuous improvement Integrity 35Cloudberry Annual report 2021 Sustainability report Cloudberry seeks to understand and manage the companys impact on society as well as stake- holders’ expectations. In 2020 we conducted an assessment based upon input from key stake- holders. To ensure alignment with best practice, a specialist sustainability consultancy was assigned. Considerable eorts were made to identify the sus- tainability topics in our value chain that are material for Cloudberry and our key stakeholders such as authorities, suppliers, landowners and neighbours in addition to financial institutions and investors. The work involved an assessment of macro trends, as well as a benchmark against peers and leaders. Confirming alignment with the expectations of our external stakeholders is pivotal to Cloudberry. The Sustainability Report 2021 is Cloudberrys second report on environmental, social and governance concerns, and we are still in an early phase on reporting sustainability activities. Cloudberrys sus- tainability management has been strengthened in 2021, and we have focused on how to organize and strengthen our ESG-activities and how to disclose our ESG-performance. This year’s report highlights activities conducted during 2021 and describes our plans for 2022. Reporting standards Cloudberrys ESG reporting and the companys approach to sustainability, is in accordance with the World Economic Forum (WEF) Stakeholder Capitalism Metrix. At the end of this report, we have included an overview over all 21 WEF disclosures with references to pages where we disclose rele- vant information. The metrics include non-financial disclosures centred around four pillars; Principles of Governance, Planet, People and Prosperity, which are aligned among existing ESG standards and disclosures, e.g., Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate Related Financial Disclosures (TCFD), as well as essential elements of the UN Sustainability Development Goals. We describe our approach, our ambitions and goals, activities taken place in 2021 and way forward related to the identified sustainability topics for the company according to these pillars. In 2021 we have strengthened the assessment of our climate related financial risks and opportunities in line with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). Financial climate-related risks and opportunities will be fully integrated into our overall risk management in 2022. Cloudberry Annual report 2021 Sustainability report 36 In this report we have also set out a review of our environmental, social and governance (ESG) strat- egy relative to the UN Sustainable Development Goals (SDGs). Through our materiality assessment and analy- sis of the underlying targets that are relevant to Cloudberry and our stakeholders, we have looked to specific SDG sub targets in our environmental, social and governance strategy. Materiality analysis and focus areas Cloudberry believes that identifying, understanding and managing the sustainability topics in our value chain, is of uttermost importance for future long- term value creation. The focus areas and priorities are based on the materiality analysis conducted, and further strengthened during 2021 through stake- holder dialogue. The outcome of the analysis in our material aspects and stakeholder engagement are similar to 2020. Responsible supplier management is a natural part of our stakeholder engagement, and therefore not a separate material aspect in this years revised material matrix. Health and safety is still an important aspect, and has been strength- ened in the materiality analysis in 2021, based on dialogue with suppliers and contractors, and is also addressed in our Suppliers Code of Conduct. The main topics are illustrated above, and the matrix gives an overview of the findings. The topics in the right corner is of most strategic importance to Cloudberry and we focus our reporting on local value creation, renewable energy supply, climate, land Aordable and clean energy Cloudberry ensures access to aordable, reliable, sustainable, and modern renewable energy for all. This open opportunities for new economic opportunities, jobs and local value creation, and contribution to climate change. Industry, innovation and infrastructure Cloudberry contributes to extend the devel- opment of renewable energy in Norway and Sweden by securing investments and always develops a plan for decommissioning to restore areas back to their original condition as far as possible. Sustainable cities and communities Cloudberry seeks to contribute to cities and communities that are sustainable, protect and safeguard cultural and natural heritage, construct and operate powerplants with sustain- able environment friendly materials and solutions, and utilize local materials where possible. We consider re-used materials and engage local suppliers. Responsible consumption and production In Cloudberrys devel- opment projects, the company focus on environmentally sound management of chemicals and all wastes throughout the life cycle, and ecient use of natural resources. Climate action Cloudberry strengthens our resilience and adaptive capacity to climate-related hazards and assesses our climate related risks and opportunities, and we secure that our assets are climate-resilient and focuses on reducing our carbon emissions on our way to become net-zero by 2040. Life on Land Cloudberry protects, restores, and promotes sustainable use of land areas, sustainable forest and biodiversity management, and pro- tects and prevents threatened species, flora and fauna. We always integrate ecosystem and biodiversity values into planning in our development processes. NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 Supporting the UN Sustainable Development Goals The development of renewable energy capacity contributes to the energy transition necessary to reach net-zero, European and national climate targets and the UN Sustainable Development Goals (SDGs). We have reviewed our sustainability strategy towards the SDGs targets to highlight which we align with. We have strengthened our approach and updated our goals and key performance indicators in 2021 to align them with indicators defined in the UN SDGs. The following goals are considered particularly important to Cloudberrys business and how we operate: 37Cloudberry Annual report 2021 Sustainability report use and ecological sensitivity, stakeholder engage- ment and health and safety. In addition, corporate governance, sustainable finance, company culture and best technology were identified as important matters for our stakeholders and Cloudberry. Climate and renewable energy supply is at the core of our purpose. Under “Planet” in this report we have a more comprehensive description of our work on taking climate action. In the following Cloudberry describes its approach and activities in 2021, and ambitions and goals going forward related to the identified sustainability topics according to the Principles of Governance, Planet, People and Prosperity. Principles of Governance Planet People Prosperity · Strengthen sustainability into business strategy · Stakeholder engagement · Company culture · Climate risk and opportunities · Taxonomy · Land use and ecological sensitivity · Health and safety · Human and labour rights · Diversity and gender equality · Local value creation · Renewable energy supply · Sustainable financing · Best technology Contribution to SDG targets Governance Planet People Prosperity Significance of economic, environmental & social impacts Influence on stakeholder assessments & decisions Local value creation Landuse and ecological sensitivity Climate Renewable energy supply Stakeholder engagement Health and safety Sustainable finance Best technology Corporate governance Company culture NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 NO POVERTY ZERO HUNGER GOOD HEALTH AND WELL-BEING QUALITY EDUCATION GENDER EQUALITY CLEAN WATER AND SANITATION AFFORDABLE AND CLEAN ENERGY DECENT WORK AND ECONOMIC GROWTH INDUSTRY, INNOVATION AND INFRASTRUCTURE REDUCED INEQUALITIES SUSTAINABLE CITIES AND COMMUNITIES RESPONSIBLE CONSUMPTION AND PRODUCTION LIFE ON LAND PEACE, JUSTICE AND STRONG INSTITUTIONS CLIMATE ACTION LIFE BELOW WATER PARTNERSHIPS FOR THE GOALS For queries on usage, contact: [email protected] Developed in collaboration with | [email protected] | +1.212.529.1010 Cloudberry Annual report 2021 Sustainability report 38 39Cloudberry Annual report 2021 Sustainability report Principles of Governance Cloudberry adheres to good governance standards and will at all times seek to ensure that the company endorses the Norwegian Code of Practice for Corporate Governance (the “Corporate Governance Code”), last revised on 14 October 2021, which is available at the web site of the Norwegian Corporate Governance Board www.nues.no. This includes disclosure and transparency in all our business to provide shareholders and stakeholders with precise and accurate information concerning all aspects regarding Cloudberry. Performance summary Governance Not started On plan Achieved Strengthen sustainability into business strategy Identify and manage ESG risks and opportunities in company operations Establish ESG committee Review and report on ESG strategy, policies and performance ESG Due Diligence Guideline Stakeholder engagement Stakeholder dialogue – review and update Stakeholders expectations - continuously assess Code of Conduct - annually review Company culture Whistleblower Channel and Policy – established and rolled out Company Values - employee contribution Report on violations of laws and regulations in accordance with whistleblower routines More detailed information on Corporate Governance Code please read Cloudberrys “Corporate Governance Report 2021”, also available in the annual report. Our sustainability strategy Our approach and activities Cloudberry provides clean renewable energy for future generations, develops a sustainable society for the long term and creates value for its stakehold- ers. Cloudberry believes that a systematic approach towards incorporating sustainability matters in the value chain is imperative to fulfil our purpose. Cloudberry has strengthened its sustainability strategy into the overall business strategy, and it is incorporated in development projects, producing assets and in our overall operating business. As a part of the reporting structure, environmental, social and governance concerns are embedded. The management and Board of Directors review specific sustainability topics including procurement, stake- holder engagement, health and safety, security and environmental and social impacts in all our business units. At the management level, the CEO monitors the implementation of the sustainability strategy and is responsible for ensuring that climate-related risks and opportunities are integrated into the company’s long-term business strategy. The CEO oversees and reports to the Board of Directors on the manage- ment’s progress related to Cloudberry’s key strategic sustainability and climate-related objectives. At the Cloudberry Annual report 2021 Sustainability report 40 operational level, the Chief Sustainability Ocer is responsible for managing sustainability. The CEO, CVO and CSO meet twice a month to discuss and secure ESG-involvement in the daily operations, prepare matters within the ESG area for the Board of Directors and ensure progress concerning ESG initiatives and reporting. Cloudberry assessed the potential financial impact of climate-related risks and opportunities in accord- ance with the recommendations of The Task Force on Climate-related Financial Disclosure (TCFD) in 2020 and have strengthened the assessment in 2021 and updated climate-related risks and opportunities related to its business development and expansion during 2021. They are addressed in the chapter Planet. In 2021, the Board of Directors established an Environmental, Social and Governance (ESG) Committee consisting of two Board Directors and the Chief Sustainability Ocer. The committee held four meetings during 2021, where the purpose was to ensure alignment with the companys sustainability strategy and to discuss and evaluate ESG concerns relevant to Cloudberry. The committee is responsible of evaluating, following up and implementing the companys ESG strategy, and to review relevant ESG initiatives. The committee will continue holding at the minimum four ESG meetings annually and continues to review and advice on the companys sustaina- bility performance and secure the integration of Cloudberrys ESG goals throughout the value chain. A due diligence guideline on evaluation of environ- mental, social and governance aspects has been incorporated as an integral part of Cloudberrys investment decisions. The guideline takes into account a selection of ESG aspects that may have material impacts, both positive and negative, and secures mitigation plans where needed. The com- pany also reports on number of projects rejected and underlaying reason as related to environmental, social and governance issues. A Supplier Code of Conduct has also been com- pleted and implemented in procurement phases. Adherence with the Code is required of all sup- pliers, and Cloudberry expects that their policies, statements, and commitments are enforced in the operations, and throughout the value chain of suppliers and their sub-suppliers. Cloudberry will annually review its Supplier Code of Conduct to ensure incorporation of relevant developments going forward. Cloudberry wants to be made aware of any irregu- larities or other concerns regarding the organization Chief Executive Ocer Board of Directors ESG / Compliance Corporate / Chief Value Ocer ESG Committee Areas of responsibilities through the value chain: TCFD (climate-related risks and opportunities), ESG (environmental, social and governance) Development Production Business Segments Operations 41Cloudberry Annual report 2021 Sustainability report and business. Employees and stakeholders are encouraged to ask questions and report concerns if they are suspecting breach of the Code of Conduct or other relevant policies. When employees raise concern about possible misconduct, the company is given the opportunity to remedy, improve and to protect its interests, stakeholders and society at large. To notify misconduct within the Cloudberry Group, Cloudberry rolled out its whistleblowing policy and reporting channel in 2021. Way forward Cloudberry will further strengthen and continue the integration of the sustainability aspects of its activi- ties in the value chain and integrate climate related risks and opportunities in the overall company risk analysis business strategy. The company is growing and with new business units and more employees in the organisation, decisions and commitments across the company requires good business con- duct and governance. Stakeholder engagement Our approach Cloudberrys success depends on our ability to build trust amongst our stakeholders. It is important for us to maintain an open and transparent dialogue with our main stakeholders. It is essential that landowners lend their land to us, local communities have trust in us, people and partners want to work with us, and that investors and creditors value us. It is fundamen- tal to the company to engage timely and openly with our stakeholders. The below illustration provides an overview of Cloudberry’s key stakeholders. For Cloudberry it is important to have local presence to understand the society and context in which we are present. We strive to have a transparent deci- sion-making dialogue with input from main stake- holders. This provides us with valuable feedback and enables Cloudberry to continue to improve and enhance trust and reputation. When exploring an opportunity, we evaluate land- owner interest in having a power production plant on their grounds, as well as identifying the local attitude towards such an establishment. When the formal notification of a project is submitted to the authorities, public meetings are held with the local authorities to inform about the project and to identify any additional local needs that we may accommodate. Cloudberry facilitates access for individual residents to discuss any concerns they may have throughout the process. Our activities The stakeholders of Cloudberry are particularly concerned about how we handle environmental and social impact, governance, health and safety, company culture and supplier management. In the table below we describe the key activities and dialogues that have taken place in 2021 in regard to Cloudberry’s development and construction projects in Norway and Sweden. Cloudberrys business strategy is continuously evolving. In 2021, the Board of Directors and com- pany management strengthened the sustainability aspects, ensuring continuation of the integral part it plays in our overall business strategy. The work included the development of the aforementioned new governance structures and management of key strategic sustainable and climate-related objectives. Way forward In 2022 Cloudberry will further systematize our ongo- ing engagement with our stakeholders. The input we receive is valuable and will influence our sustainability framework going forward and be reflected in our strategic priorities. On every construction project Cloudberry will distribute newsletters, update the project web site, and hold meetings for authori- ties, landowners and other stakeholders involved. Cloudberry maintains close dialogue with our stake- holders to understand and address their concerns. Cloudberry’s Value Creation Landowners Suppliers Employees Financial institutions Authorities Municipalities Local residents Investors Cloudberry’s main stakeholders Cloudberry Annual report 2021 Sustainability report 42 External Stakeholders Expected of the company Areas for dialogue Actions by the company Landowners Local value creation in terms of creating job opportunities, possible financial funds for locally initiatives, utilization of their forests, continuous information during the development and construction process. Direct contact with the landowners, meetings with municipalities were local residents and landowners may attend. Information letter to stakeholders involved on progress in projects. Meetings locally starting at early phases in every development project, e.g.: At Hån wind farm meetings were held to give relevant information as the project progresses, frequently newsletters are sent out, a project web site with updated information on the project is in place. At the development project Björnetjärnsberget wind farm several stakeholder meetings were held regarding wind power understanding, legal process for environmental permit, Q&A on risks and opportunities, receiving concerns and thoughts from local hunters, local value creations and more. Used local business partners, when possible, for construction, operations and maintenance. Established a fund to support teams and associations in local areas. Local residents Preserve untouched nature, establish a fund that can be used for local initiatives, information flow helping them visualize the impact, fewer and smaller wind turbines. Meetings for residents through consultation meetings locally, neighbourhood meetings to communicate. Information letter to stakeholders on progress in projects. Several information meetings locally were held to ensure understanding regarding process, impact, risk, and opportunities, local value creation, and facilitate for Q&A sessions. At Hån and Björnetjärnsberget a project web site with updated information on the project was established At Björnetjärnsberget an open house with meetings for local stakeholders. We aim to be transparent already from the consultation phase. Using local business partners when possible, for construction, operations and maintenance. Established a fund to support teams and associations in local areas. Municipalities Energy supply locally, local value creation such as jobs on projects and infrastructure. Compensation to the local population as part of the development agreement. Open and informative dialogue with the aected population about progress in the development project. Minimize the environmental impact. Dialogue and meetings with the municipalities. The development and production of wind and hydro power is highly regulated both in Norway and Sweden, with stringent environmental regulations. The company maintains a continuous dialogue with authorities and local stakeholders and held several meetings with the municipalities of Hån and Björnetjärnsberget projects. 43Cloudberry Annual report 2021 Sustainability report External Stakeholders Expected of the company Areas for dialogue Actions by the company Authorities Expectations regarding how the company aects nature and biodiversity. Positive when the company reports annually on environmental impact and carry out its own measurements e.g., on bird populations. Recommend that the company early enters into dialogue with the local community. Initiatives to contribute to local culture and nature activities. Dialogue and meetings with the authorities. The development and production of wind and hydro power is highly regulated both in Norway and Sweden, with stringent environmental regulations. The company maintains a continuous dialogue with authorities and local stakeholders and held several meetings with the municipalities of Hån and Björnetjärnsberget projects. Suppliers Focus on safety specifically and on health, safety and environment. Report on waste management. Regular meetings with partners and suppliers. Weekly meetings during the construction of Hån wind farm with entrepreneur and other suppliers. Focus on health and safety routines and environmental and social impact. Registering incidents and mitigation plans. Regular meetings on health and safety management on site. Continue to update the companys routines with regards to health and safety. Health and safety is addressed in the Supplier Code of Conduct which was implemented in 2021 on procurement phases. Waste management on producing assets and during construction projects are reported and taken into the GHG protocol from 2021. Investors Measuring CO 2 emission, energy eciency, life- cycle assessment and environmental impact. Prioritize developing windfarms in industrial areas. Meetings (digital) with investors and analysts, company presentations. Providing renewable energy and thereby reducing climate emissions. Accessible for a broader universe of stakeholders and ESG focused investors as Cloudberry was listed on the fully regulated market Oslo Stock Exchange in 2021. Diversified and growing production portfolio with a highly ecient operating platform, a growing development backlog and pipeline both on- and oshore. Production capacity raised from 27 MW (2020) to 58 MW (2021). Reports annually on direct and indirect greenhouse gas (GHG) emissions, compensated emissions by purchasing carbon credits, assessed climate related financial risks and opportunities. Financial institutions Ensure that suppliers and partners operate in line with the company’s code of conduct. Focus on the company’s emissions and HSE routines. Meetings and presentations. Beside reporting financially, the company is integrating environmental, social and governance in its reporting to highlight the focus on sustainability management in the companys business strategy. Cloudberry Annual report 2021 Sustainability report 44 Company culture Our approach Cloudberry sets high ethical behaviour for everyone who acts on behalf of the company. We are focused on being a socially responsible and sustainable company and has included initiatives in our daily operations as described below. We aim to reduce business risk for the company and the individuals and safeguard the company’s reputation. Our activities 2021 has been a transitional year for Cloudberry, focusing on growing the platform with new development projects and producing assets. This naturally results in an increase in the number of employees and aects company culture and the working environment. Cloudberry strives to develop a value-based culture. In 2021 we held a physical workshop for all employees where the purpose was twofold; to identify and develop our values Supportive, Commitment, Continuous improve- ment, and Integrity, and to anchor them within the employees. The values are pivotal to how we act and behave internally and externally, and they are paramount in our company culture especially as we are growing further. Our Code of Conduct it sets out the key expecta- tions to all employees, the Board of Directors, and other representatives of the company and specifies the ethical requirements for everybody who works for and on behalf of Cloudberry, including suppli- ers and other business partners. The Code is the basis for how we act and perform our business, it describes Cloudberrys ethical culture and behav- iour, and provides general guidelines on issues such as anti-corruption, human and labour rights, health and safety, business ethics, legal compliance, insider trading and other relevant issues related to the company’s operations. The Code of Conduct was reviewed, revised, and finally approved by the Board of Directors in February 2022. A specific whistleblowing reporting channel was implemented in 2021. This system allows employees and stakeholders to report misconduct of any irregu- larities or other concerns regarding our organization and business. A Whistleblowing Policy sets out the framework for dealing with concerns of illegal and improper conduct. During 2021 Cloudberry has not registered any incidents of corruption nor discovered any incidents related to previous years where the company, employees or partners have been involved. The “Corporate Governance” chapter provides further information. Way forward Cloudberry aims to be an attractive place to work and amongst other criteria considers a healthy and inspiring company culture of importance. It has been a challenge to gather all employees physically during the Covid-19 pandemic. Nevertheless, we have had frequent internal digital meetings through- out the year. At Cloudberry we continue to build our company culture and we have an ambition to hold at least two physically gatherings annually with all employees. For regular updates from our business units on project development, operating assets, ESG related issues, and general development in our busi- ness, we arrange digital meetings monthly attended by employees. Cloudberry distributes its revised Code of Conduct annually to its organisation. It is mandatory for all employees to comply with the Code. During 2022 the employees of Captiva Group, acquired in January 2022, will be integrated into the Cloudberry Group and will be introduced to and expected to comply with Cloudberrys Code of Conduct. Follow up on the companys values and training in the Code is an integrated part of onboarding new employees. 45Cloudberry Annual report 2021 Sustainability report Cloudberry Annual report 2021 Sustainability report 46 Planet The planet is at the basis of everything we do. Through the production of renewable energy, we positively impact the energy transition which addresses the climate crisis. At the same time, we impact the planet through the construction and production of our wind farms and hydropower plants. It is a high priority for Cloudberry to reduce its environmental footprint as much as possible, and further prioritise this focus in the years to come. Cloudberrys goal is to be net-zero by 2040. Performance summary Planet Not started On plan Achieved Climate risk and opportunities Net-zero by 2040 TCFD - update risk assessment according to developments of the year Incorporate climate-related risks in overall risk management according to TCFD framework CO 2 emissions - report annually Scope 1, 2 and 3 Scope 3 – report on waste from construction site Value chain – improve Scope 3 reporting GHG emissions Eligible activities covered by the EU Taxonomy on Revenue, OPEX and CAPEX Alignment to the technical screening criteria with the EU Taxonomy Regulation Land use and ecological sensitivity ESG impact – assessment prior to FID Implement ESG due dilligence assessment in all investment decisions Climate risk and opportunities Our approach Cloudberry understands that although the company contributes to climate solutions with its development and production of renewable energy, the company itself has a responsibility to reduce its emissions and the negative impact the company has on climate and the environment. As a result of this Cloudberry has set an ambition to be net-zero by 2040. Cloudberry is a fossil-free company and has reached net-zero emissions in its own operations (scope 1 and 2) since 2020 by remov- ing CO 2 from the atmosphere through restoring mangrove forests. Cloudberry has further invested in restoring mangrove forests to neutralize all future emissions from its own operations and employees. The Company will complete scope 3 calculation in alignment with the GHG Protocol to determine a decarbonization pathway to reach net-zero in the value chain by 2040. Climate changes constitute a risk and opportunity for Cloudberry. They present financial risk to the global economy, and pose risks and opportunities for businesses, now and in the future. Financial markets, creditors and investors ask for clear, consistent, and comparable, high-quality information on the impacts of climate change. The Task Force on Climate- related Financial Disclosure (TCFD) developed the TCFD disclosure recommendations to improve and increase reporting of climate-related financial infor- mation and to enhance market transparency and stability. Cloudberry strives to evaluate its relevant metrics for measuring and managing climate-re- lated risks and opportunities at all times and in accordance with the recommendations of the Task Force on Climate-Related Financial Disclosures (TCFD). 47Cloudberry Annual report 2021 Sustainability report TCFD Context Index Governance Strategy Risk Management Metrics and Targets Disclose the organisation's governance around climate-related risks and opportunities. Disclose the actual and potential impacts of climate-related risks and opportunities on the organisation's business, strategy, and financial planning where such information is material. Disclose how the organisation identifies, assesses, and manages climate-related risks. Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material. Recommended disclosures a) Describe the board's oversight of climate- related risks and opportunities a) Describe the climate- related risks and opportunities the organisation has identified over the short, medium and long term. a) Describe the organisation's process for identifying and assessing climate-related risks. a) Disclose the metrics used by the organisation to assess climate-related risks and opportunities in line with its strategy and risk management process. b) Describe the management's role in assessing and managing climate-related risks and opportunities b) Describe the impact of climate-related risks and opportunities on the organisation's business, strategy, and financial planning. b) Describe the organisation's processes for managing climate- related risks. b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. c) Describe the resilience of the organisation's strategy, taking into consideration dierent climate-related scenarios, including a 2°C or lower scenario c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organisation's overall risk management. c) Describe the targets used by the organisation to manage climate-related risks and opportunities and performance against targets. Core Elements of Recommended Climate-Related Financial Disclosures Governance The organization’s governance around climate- related risks and opportunities Strategy The actual and potential impacts of climate-related risks and opportunities on the organization’s business, strategy, and financial planning Risk Management The processes used by the organization to identify, assess, and manage climate-related risks. Metrics and Targets The metrics and targets used to assess and manage relevant climate-related risks and opportunities Strategy Risk Management Metrics and targets Governance Cloudberry Annual report 2021 Sustainability report 48 Our activities In the changing world we are living in, with rising temperatures, climate-related policy changes, and emerging technologies, both risks and opportunities are becoming more prominent. Failure to limit global warming to 1.5 °C may cause severe changes in the worlds climate, with subsequent dramatic conse- quences for the planet. The eect of climate change also has consequences for our operating assets that we need to consider in our business planning. Cloudberry assessed the potential financial impact of climate-related risks and opportunities in accord- ance with the recommendations of the TCFD disclosures in 2020 and revisited and strengthened the assessment in 2021. The TCFD recommenda- tions are structured around four core elements of how companies operate: governance, strategy, risk management, and metrics and targets. 2021 has been a transitional year for Cloudberry focusing on growing the platform with new develop- ment projects and producing assets. In 2021, the risk assessment was further strengthened, and actions taken are described in the tables under Strategy. The company implemented a due diligence guideline on environmental, social and governance aspects when evaluating investment decisions, including climate-related risks and opportunities. Governance The company’s governance around climate- related risks and opportunities. Climate-related issues are of high importance for Cloudberry and are to a certain extent integrated into Cloudberrys overall business strategy. Prior to a project investment decision, relevant risks are assessed by the Management and an evaluation is presented to the Board of Directors where the climate-related risks are discussed and evaluated. The overall responsibility thus sits within the Board of Directors. In addition, Cloudberrys overall risk management and all risks perceived to the company and its businesses are subject to an annual thorough review by the Board. The climate-related risks will be assessed along with all other relevant risks. The Board of Directors and its work is also described in the corporate governance section later in this report. Board of Directors Audit Committee Compensation Committee ESG Committee 49Cloudberry Annual report 2021 Sustainability report The executive management team assesses and manages climate-related risks and opportunities, with the highest-level responsibility lying with the Chief Executive Ocer and the Chief Sustainable Ocer. The manager of the individual business segment is responsible for implementing risk miti- gating actions. The executive management team follows up on key mitigation plans and reports in yearly reports and presents this in annual Board meetings. Strategy Actual and potential impacts of climate-related risks and opportunities on the companys business, strat- egy, and financial planning where such information is material. Cloudberry has proactively identified and assessed climate-related risks and opportunities. The analysis recognized and defined three physical risks and ten transition risks, including regulatory and legal risks, technological risks, market risks, and reputational risks. All 9 risks were evaluated by the management in order to assess their likelihood of occurrence, time horizon, and potential financial impact. A preliminary internal assessment concerning the likelihood of occurrence has been performed: Time horizon Short-term Medium Long-term Years <3 3-10 >10 The likelihood assessments, as well as the definition of financial impact and time horizon, are provisional and may be subject to change in the years to come due to further development and more accurate calculations based on scenario analysis. The climate-related risks and opportunities related to Cloudberrys business development and expan- sion during 2021 has been assessed. The risks are addressed and summarised in the below tables. Cloudberry will continuously analyse and assess its climate-related risk strategy to detect other risks and opportunities. Chief Executive Ocer ESG / Compliance Corporate / Chief Value Ocer Development Production Business Segments Operations Cloudberry Annual report 2021 Sustainability report 50 TCFD Risk Like- lihood 1 Financial Impact 2 Time Horizon 3 Description Risk mitigation Opportunity Extreme Winds High Low Long Exacerbated wear-and-tear of wind turbines (i.e., increased service and maintenance/ repair costs). Higher risks/costs during construction (e.g., wind days and delayed construction). Temporary stop in production causes loss in production time, due to extreme winds. Cloudberry has emergency plans on-site on all our producing assets. A contingency plan including the climate risk topics is being established. The company uses certified and well-proven technology and aim for long service contracts with solid counterparts and makes sure that agreements with contractors have substantial buers on weather-exposed operations. Finding solutions for how future wind turbines (or upgrades of older wind turbines) can maximize production based on increased wind strength. It also opens for the opportunity to build wind parks in less sensitive areas Extreme rainfall High Low Long Damage and production loss to hydropower stations (higher insurance premiums), as well as lost revenue from flow over the dams. The technical standard and capacity of our dams and pipelines are designed to withstand flooding. Cloudberry has emergency plans on-site on all its producing assets. A contingency plan including the climate risk topics is being established. More likely to get permits for adding regulation dams to our assets for flood prevention. An opportunity to increase the company’s production capacity and be able to take full advantage and be more ecient to produce more power. Overall, increased precipitation might increase revenue for the company. Warmer, wetter and windier High Low Long Wind farms will get more hours of production due to overall higher wind speeds, while the production of hydro plants will increase all over due to increased rainfall and fewer water-frozen days. Position the company and its power plants to maximize the benefits of the increased production potential. More power production (e.g., if snow is melting to a larger degree than normal, hydropower plants that previously have been water frozen during winters might be able to produce power during the winter as well). 1 The likelihood is based on provisional internal assessments and will be further developed through scenario analyses in the years to come 2 Financial impact: Low < 10 mill, Medium 10-100 mill, High > 100 mill 3 Time horizon: Short: 0-3 years, Medium: 3-10 years, Long: more than 10 years Physical Risks and Opportunities Both acute and chronic 51Cloudberry Annual report 2021 Sustainability report TCFD Risk Like- lihood 1 Financial Impact 2 Time Horizon 3 Description Risk mitigation Opportunity Revised regulation of new water/ hydro permits Medium Low Medium Revision of existing hydropower regulation plans is considered a low risk as the concessions are perpetual. Revised regulation of new permits might be more restrictive regarding minimum water flows, reservoir level changes, etc., to better preserve natural habitats, fish spawning, etc. Cloudberrys Chief Commercial Ocer is responsible for communication and government relations. Cloudberry has established a government relations strategy and plan for staying ahead of laws and regulations in all projects as well as in regular operations by closely following political proposals and industry association’s recommendations on new or revised regulations. Stricter regulations help and force developers like Cloudberry to focus on protecting biodiversity and environmental impact under construction. Revised wind power permitting High Medium Short Cloudberry has up- scaled its oshore unit as a result of increased activity from the oshore wind portfolio in Sweden. In Norway NVE is likely to be working from a revised and more conservative framework when considering permits for new wind power production projects. Cloudberry has established a government relations strategy and a plan for being proactive and with regard to public hearings and industry association’s recommendations on coming regulations. Focus on projects with low perceived conflict, seek industrial areas for developing wind projects, as opposed to hunting for the largest and most windy sites. Build industrial value chains with local stakeholders to address local opportunities with local renewable projects. Improved production technologies Medium Low Medium Technology related to hydro and wind generators experiences rapid improvements. Cloudberry has purchased 60% of the Captiva Group, a data-driven operator, manager, and developer of renewable energy, which delivers management services within operations and maintenance, e.g., technical and commercial digital services, and operational intelligence, visualization and reporting solutions to renewable energy projects in the Nordics. Cloudberry will maintain a portfolio of projects employing relevant and ecient technology. Moreover, the company will invest in power plants of expected good technical standards and prioritize technical solutions that are well-proven and delivered by reputable suppliers. Technical improvements and lower cost on e.g., turbines will improve the profitability of Cloudberry’s development backlog. In general, with well- proven technical solutions, management, technical services, and repairs can be made within reasonable time and cost, and attractive insurance terms are accessible. 1 The likelihood is based on provisional internal assessments and will be further developed through scenario analyses in the years to come 2 Financial impact: Low < 10 mill, Medium 10-100 mill, High > 100 mill 3 Time horizon: Short: 0-3 years, Medium: 3-10 years, Long: more than 10 years Transitional Risks and Opportunities Policy and legalTechnology Cloudberry Annual report 2021 Sustainability report 52 TCFD Risk Like- lihood 1 Financial Impact 2 Time Horizon 3 Description Risk mitigation Opportunity Lower power prices Medium High Long Cloudberry cautiously follows the market fundamentals and power price forecasts in the short- and long-term. It is dicult to predict power prices in the short- term (e.g., 2020 weather conditions led to a production surplus that aected power prices, and in 2021 we experienced the opposite with all-time high power prices). Power prices may rise from increased CO 2 prices or higher electricity demand, or they might fall from an expanded renewable supply. Positioning Cloudberry’s production portfolio so that the company is not dependent on one price area nor to one production technology, as a hedge towards locked-in whether depressed prices. Cloudberry has a well- developed overall risk management strategy were including price hedging of electricity, and a small portion of the portfolio with PPA to secure some fixed income in the short- and medium-term. 40% expected increase in Nordic power consumption by 2040, largely due to the electrification of power-intensive industries, as well as data expansion, etc. Ambitious climate goals will lead to a reduction in fossil fuel consumption. Interconnectors between Norway and Northern Europe. 50% of European power production is expected to come from solar PV and wind by 2040. 1 The likelihood is based on provisional internal assessments and will be further developed through scenario analyses in the years to come 2 Financial impact: Low < 10 mill, Medium 10-100 mill, High > 100 mill 3 Time horizon: Short: 0-3 years, Medium: 3-10 years, Long: more than 10 years Transitional Risks and Opportunities Market 53Cloudberry Annual report 2021 Sustainability report TCFD Risk Like- lihood 1 Financial Impact 2 Time Horizon 3 Description Risk mitigation Opportunity Opposition to wind power High Medium Medium In Norway, Cloudberry is likely to receive opposition from anti-wind power organisations for possible new wind farms (e.g., due to visibility and impact on nature). In Sweden, municipalities have a right to accept or deny a project late in the permission process, the so called “veto” which might aect Cloudberry. Cloudberry will develop projects in areas where potential conflicts may be mitigated. The company has established an oshore wind team with ambitions to develop oshore wind in Sweden with strong focus on local stakeholders and local value creation. Furthermore, develop projects near industrial areas, or in areas where there is local support, and have strong focus on local value creation. Wind power is the best source for new clean power in the Nordics. Increased focus on corporate carbon footprints Medium Medium Medium Carbon footprint and environmental impact has a strong focus from investors and other stakeholders. As a renewable energy company, Cloudberry is an important part of the green transition. However, it is just as important to have focus on reducing direct- and indirect emissions and move towards net- zero in the whole value chain of Cloudberry, both in terms of material use and of conserving biodiversity on locations. Cloudberry will establish a plan for preserving biodiversity, reducing carbon emissions in its value chain, and by this also assisting others to reduce their carbon footprint (by providing green energy). The company has expanded its scope 3 carbon reporting and will report more emissions in scope 3 going forward. We have also invested in carbon removal projects to ensure we can be net- zero in own operations while we further calculate and minimize our scope 3 emissions to reach net-zero in the value chain by 2040. Cloudberry has implemented its Supplier Code of Conduct which expects suppliers and business partners to be committed to environmental sustainability. Environmental and social commitment in the Cloudberry business strategy and reporting structure execute climate action and increased transparency for risks and opportunities posed by climate change. The commitment shapes confidence from stakeholders and attracts the best workforce and talents who seek a purpose in their career. 1 The likelihood is based on provisional internal assessments and will be further developed through scenario analyses in the years to come 2 Financial impact: Low < 10 mill, Medium 10-100 mill, High > 100 mill 3 Time horizon: Short: 0-3 years, Medium: 3-10 years, Long: more than 10 years Transitional Risks and Opportunities Reputation Cloudberry Annual report 2021 Sustainability report 54 Risk management How the organisation identifies, assesses, and man- ages climate-related risks. Cloudberry assesses its risks and opportunities from a short-, medium-, and long-term strategic and financial perspective, and have set threshold values for financial impact. The company identifies the potential financial impact from the risks and opportunities’ and their significance for Cloudberry. The financial impact is defined as low when less than NOK 10 million, medium when between NOK 10 and 100 million, and high when higher than NOK 100 million. Moreover, Cloudberry has defined a time horizon where short is within the next three years, medium spans from three to ten years, and long is more than ten years. Financial Impact Low Medium High MNOK <10 10–100 >100 Frequency <3 years 3-10 years >10 years In 2021 the companys due diligence guideline on environmental, social and governance aspects was incorporated as an integral part of evaluation of investment decisions. Prior to a final investment decision, identification of risks is a part of all devel- opment, engineering, project finance, procurement and construction phases. The guideline sets out the climate-related risks and opportunities related to a project and are discussed and assessed by the management before they are introduced to and evaluated by the Board. As a part of integrated risk management, the Board of Directors reviews and determines how to respond to dierent climate-re- lated risks including regulatory, legal, and market risks, as well as the physical risks to our assets. The Board of Directors oversees the expected progress towards the set goals and the plans of action related to the defined climate-related risks and opportuni- ties. Cloudberrys climate-related risks will be further integrated into overall risk management structure. 55Cloudberry Annual report 2021 Sustainability report Metrics and targets Metrics and targets are used to assess and manage relevant climate-related risks and opportunities where such information is material. Cloudberry’s Carbon Emissions Cloudberry reports annually on its carbon emissions in accordance with the Greenhouse Gas (GHG) Protocol. Cloudberry started calculating in 2020 and calculates all three scopes. The company strives to improve its GHG accounting routines by expanding categories in Scope 3 to cover emissions in the value chain. Minimizing our environmental impact and the CO 2 emissions is at the core of our business. Cloudberrys carbon inventory is divided into the three main scopes of direct and indirect emissions, and in 2021 Cloudberry’s reported carbon emissions from Scope 1, 2 and 3 were 203 tonnes CO 2 e (tCO 2 e). Carbon Accounting Unit 2020 2021 Scope 1 Total tCO 2 e - - Scope 2 Total Location-Based tCO 2 e 1 7 Scope 3 Total tCO 2 e 186 196 Total tCO 2 e 187 203 · Scope 1 covers all direct emission sources, includ- ing all use of fossil fuels for stationary combustion (predominantly diesel generators) and transpor- tation. Cloudberry does not own company cars and there are no other direct greenhouse gas emissions to report in scope 1. · Scope 2 includes indirect emissions related to Cloudberrys purchased energy (i.e., electricity and heating/cooling). This includes purchased energy for Cloudberrys oces in Oslo, Norway and in Karlstad, Sweden, as well as the energy used at the sites. The purchased energy at our Swedish oce in Karlstad is 100% renewable energy. In 2021, Cloudberry reported a total of 226 MW and the emissions from electricity were 7 tCO 2 e in scope 2 from a location-based perspective. · Scope 3 comprises the reported indirect emissions resulting from parts of Cloudberrys value chain activities: Category 1 (purchased goods and services): Cloudberry reports 749 m 3 consumption of concrete in 2021, which accounted for 173 tCO 2 e. The concrete was used for the construction of the hydropower plants Steinbergdalen and Flatestøl (Skåråna Kraft) in Norway. The emissions from the concrete accounts for 85.4% of Cloudberry’s total GHG emis- sions (Scope 1, 2 and 3). In category 1, Cloudberry also reports the kilometers between service provid- ers’ location and the location of corresponding hydro plants and wind farms that received service. This was a total of 89 100 km and accounted for 15 tCO 2 e. Category 5 (waste management): In 2021 Cloudberry started reporting on waste management. This includes waste management from the operating powerplants, the inhouse project Hån wind farm in Sweden which is under construction, and waste from Cloudberrys oces in Oslo and Karlstad. This amounted to a total of 2 194 kilos and accounted for 0.9 tCO 2 e. Category 6 (business travel): Cloudberry reports emission from air travel, rental cars and milage allowance, which in total accounted for 4.6 tCO 2 e. Category 15 (investments): Cloudberry reports the electricity used in the hydropower plants in Forte Energy Norway AS, where the company has a 34% ownership. The total registered emissions from Scope 3 were 196 tCO 2 e. Cloudberry will continue to evaluate and include more aspects of emissions from its value chain activities in 2022, particularly from Scope 3. GHG Emissions 2020-2021 Scope Unit 2020 2021 Scope 1 tCO 2 e - - Scope 2 (Location-Based) tCO 2 e 1.4 7 Scope 2 (Market-Based) tCO 2 e 9.1 56.1 Scope 3 (Purchased Goods and Services) tCO 2 e 183.7 188.4 Scope 3 (Waste Management) tCO 2 e - 0.9 Scope 3 (Business Travel) tCO 2 e 1.6 4.6 Scope 3 (Investments) tCO 2 e - 2.1 Total GHG emissions tCO 2 e 186.7 202.9 Total Energy MWh 34.6 226 Principles on reporting emissions In-house development projects: Cloudberry reports emissions on in-house developing projects from final investment decision (FID) and starting point of the construction. Cloudberry Annual report 2021 Sustainability report 56 Projects under construction: Where Cloudberry is the initiator to the construction, the company will report emissions from construction start. On pro- jects under construction where Cloudberry is the legal owner, Cloudberry reports emissions during construction phase. On assets under construction where Cloudberry has entered into an agreement to buy the power plant, and is the legal owner after the construction is completed and commission period is approved, Cloudberry reports emissions from take-over. Producing assets: Cloudberry reports its emissions on producing assets and from take-over (additional- ity principle). Beyond Value Chain Mitigation To reach net-zero in our value chain by 2040, and in support of the Paris Climate Agreement and UN Sustainable Development Goals, Cloudberry compensates its carbon emissions. By investing in climate osets from projects that are certified and aligned with the SDGs for societal and environmental enhancement to remove emissions, it moves society in the right direction to reach a low-carbon economy. Carbon removal is the neutralization when CO 2 is removed from the atmosphere and sequestered for long periods of time. Cloudberry purchases carbon removals from the VCS project Thor Heyerdahl Climate Park in Myanmar. The project, which is plant- ing and restoring mangrove forests, has numerous positive impacts on the climate, the environment, and local socio-economic conditions. In addition to strengthening the livelihood of local communities, mangrove forests foster biodiversity and are crucial habitats for otherwise threatened and endangered animal and plant species. The trees also protect against storms and cyclones and create local jobs and income for the local population. The compen- sation includes Cloudberrys registered emissions of 203 tCO 2 e from the carbon accounting (Scope 1, 2 and 3), and emissions of 297 tCO 2 e from all employ- ees in the organisation. Scope 2 has been addition- ally neutralized from carbon credits for the 7 tCO 2 e as reported in 2021 to be net-zero from controlled sources in the company. CO 2 Reduction in the grid In 2021, Cloudberry produced 117 GWh of renewable energy, which is equivalent to reducing 29 133 tCO 2 e, relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2021). After taking into account the total greenhouse gas emissions of 203 tCO 2 e from Cloudberry’s carbon emissions accounting (Scope 1,2 and 3) and car- bon emissions from all employees in Cloudberry, the reduction of greenhouse gas emissions from Cloudberry’s operations is 28 633 tCO 2 e. Targets Cloudberry has a scalable platform and is posi- tioned for valuable growth, both in terms of energy production and in-house development backlog and pipeline. Cloudberry’s strategy is to continue its sustainable growth organically and inorganically in the Nordic market. Areas of our business will have residual carbon emissions, which we will neutralize, while minimizing our footprint as much as possible. To limit global warming to the 1.5 degree scenario, Cloudberry will further calculate the total emission in Scope 3 and determine a decarbonization pathway to do our part for society to become a low-carbon economy. Way forward On our way towards net-zero by 2040, Cloudberry will monitor national and international climate politics and their potential impact on our strategy and busi- ness. We strive to ensure that the company makes the right decisions and assessments on how climate risks might aect us. We have strengthened our risk strategy by including the topics identified in the materiality assessment where climate and renewa- ble energy are core topics. The climate-related risk The Thor Heyerdahl Climate Park projects aims to restore and plant mangrove trees in the Ayeyarwady Region of Myanmar where only 16 percent of the original mangrove forest remains (NASA, 2013). The Project Restoring Mangrove Forests Thor Heyerdahl Climate Park Restoring Mangrove Forests 57Cloudberry Annual report 2021 Sustainability report assessment will be expanded in accordance with the TCFD framework, and the identified climate-re- lated risks will be incorporated into our general risk management and reporting. Going forward Cloudberry will expand its climate accounting reporting on indirect emissions in our value chain (Scope 3) such as for aluminium and steel. This will be aligned with the reporting criteria in the EU Taxonomy, analyzing life cycle greenhouse gas (GHG) emissions from Cloudberry’s development and operating power projects and assets. The Taxonomy Activities Cloudberry is in the process of assessing the com- panys alignment with the EU Taxonomy Regulation. In accordance with the EU Taxonomy requirements for the reporting year 2021, qualitative information and information on the proportion of taxonomy eligible activities in relation to total activities set out in the Delegated Act must be disclosed. In 2021 Cloudberry assessed its eligible activities cov- ered by the EU Taxonomy and technical screening criteria and its proportion of Taxonomy-eligible and Taxonomy non-eligible economic activities in its total turnover, capital and operational expenditure. Inventory of the eligible activities covered by the Taxonomy in Cloudberrys business units: 1. Electricity generation from wind power. NACE code D35.1.1 (Production of electricity) and F42.2.2 (Construction of utility projects for electricity) 2. Electricity generation from hydro power. NACE code D35.1.1 (Production of electricity) and F42.2.2 (Construction of utility projects for electricity) Basis and principles Cloudberry is reporting on proportion of Taxonomy- eligible activities on electricity generation from wind power and electricity generation from hydro power on consolidated units (IFRS). Net-Zero Transitioning to a low-carbon society 1 Cloudberry is a fossil-free company and has reached net-zero emissions in its own operations by removing CO 2 from the atmosphere through restoring mangrove forests for Scope 2. Net-Zero 2021 Scope 1 and 2 1 Net-Zero by 2040 Scope 3 Cloudberry Annual report 2021 Sustainability report 58 Units that are power-producing at year end are classified within “producing”, while other units that are under construction, ready for construction or is in concession process, (project inventory in the consolidated balance sheet) are classified within “construction”. Corporate overheads (OPEX) are allocated to the respective activities based on the proportionate value of assets directly related to the Taxonomy-eligible activity. Eligible turnover include the sale of products gen- erated from wind or hydro electricity production or sales closely related to this activity. Closely related turnover may e.g., origin from sale of el-certificates or insurance settlement income (other income) due to a loss on a construction project of a wind farm. The denominator of the turnover KPI is “total reve- nue” (Note 12 in the Consolidated Group financial statements in the 2021 annual report). Eligible capital expenditures are investments in property plant and equipment, investment in associ- ated companies or share in subsidiaries which have activities that are EU Taxonomy eligible. The denominator of capital expenditures is the CAPEX KPI and includes total additions to Intangibles and Tangibles (including capitalised leases), includ- ing those from business combinations and invest- ments in associated companies. (Notes 5, 17 and 20 in the Consolidated Group financial statements in the 2021 annual report). Eligible operating expenses, include any of the following types of spend; cost of goods sold, salary and personnel expenses for employees working within eligible activities or within group overhead, other operating expenses directly related to the eligible activities or related to the group overhead. The denominator of the operating expenditure, OPEX KPI is “Operating expenses”, (Note 13 and 14 in the Consolidated Group financial statement s in the 2021 annual report). 100 per cent of Cloudberrys turnover, operating expenses and investments are EU Taxonomy eligible in 2021. The table shows the turnover, CAPEX and OPEX per activity and the proportionate share of the Group’s total reported figures. Consolidated units: Fully owned assets under construction and in production Economic Activities NACE Codes Turnover (NOK) Revenue proportion CAPEX (NOK) CAPEX Porportion OPEX (NOK) OPEX Porpotion A: Taxonomy eligible activities Electricity generation from wind power – Production of electricity D35.1.1 2.8 7% - - -2.9 3% Electricity generation from wind power – Construction of utility projects for electricity F42.2.2 5.8 14% -452.4 55% -48.0 54% Electricity generation from hydropower – Production of electricity D35.1.1 32.3 79% -297.9 36% -35.8 40% Electricity generation from hydropower – Construction of utility projects for electricity F42.2.2 - - -78.8 10% -2.1 2% Total A: Taxonomy eligible activities 40.9 100% -829.1 100% -88.9 100% B: Taxonomy non-eligible activities - - - - - - Total A and B 40.9 100% -829.1 100% -88.9 100% Way forward Cloudberry continues its assessment of economic activities in accordance with the EU Taxonomy. Assessments are carried out to evaluate Cloudberrys alignment to the technical screening criteria in the EU Taxonomy. Internal analysis and estimates of life cycle greenhouse gas (GHG) emissions from Cloudberry’s producing hydro power assets indicate emissions significantly below the threshold set out in the EU Taxonomy (100g CO 2 e/ kWh). Reporting on Lifecycle GHG emissions, Power Density of the Electricity Generation Facility (above 5 W/m 2 ), Do No Significant Harm (DNSH) and Minimum Safeguard principles will be assessed going forward 59Cloudberry Annual report 2021 Sustainability report and Cloudberry is prepared to report in accord- ance with the EU Taxonomy requirements on its hydro- and wind energy assets, and will strive to ensure that the activities meet the criteria. Cloudberrys goal is to have 100% alignment in the forthcoming years. It is crucial for the society, to become a low-carbon economy and reach net- zero. Cloudberry will ensure that its organization reduces emissions while the activities contribute to lower emissions in third parties. Land use and ecological sensitivity The development, construction and operations of renewable energy plants may have several envi- ronmental impacts. Wind farms have an impact on both o- and onshore land areas, and hydropower plants impact river systems. At wind power plants, among other things, there is an environmental impact both under construction and in operation. For onshore wind energy, the first and foremost environmental impact relates to visibility in the land- scape, shadows and noise. For oshore wind, the impact is similar to onshore wind although the visi- bility and noise is less if the turbines are put far from shore. There are specific environmental impacts to address when constructing an oshore wind farm to protect the wildlife at sea. Hydropower plants impact the water flow, fish and sediment load. The development and construction of power plants utilize land areas, fauna and flora, and degrade and change habitats, which may aect biodiversity. In a development project on a wind- farm in Sweden in 2021, Cloudberry decided not to proceed with the project because of the bird life in the area. Cloudberry always conducts additional mapping of bird life to gain a better understanding of how the project aects its surroundings and strives to do its utmost to get a full environmental overview with assessments and considerations. To understand and prevent deterioration, conduct- ing impact assessments is crucial, and we imple- ment mitigation measures to minimise impacts and safeguard biodiversity. Development, construction and production of wind and hydropower is highly regulated both in Norway and Sweden, with stringent environmental regula- tions. Cloudberry maintains a continuous dialogue with authorities and local stakeholders. We aim to minimize the environmental footprint in our projects and to maximize local value creation. Björnetjärnsberget At the wind development project Björnetjärnsberget in Sweden, Cloudberry has a set o a larger area for birdwatching, nature studying and culture investigation to research and get as much information and awareness as possible about the area. In this way the project collects factors that may impact negatively, and Cloudberry may address challenges related to biodiversity, nature, fauna and flora. Åmotsfoss At Åmotsfoss Kraft hydropower plant, we have built a fishing route to protect the biodiversity around the power plant. This is in accordance with the regulations, but nevertheless an important aspect for us to secure environment protection in our projects. Cloudberry Annual report 2021 Sustainability report 60 Our approach and activities Cloudberry always considers the environmental and social impacts prior to final investment decisions (FID), and this is integrated in Cloudberrys ESG due diligence guideline for all our development and construction projects. Below we describe our value chain and examples on how we assess sustainability topics within each stage of the process. ProductionConstructionDetail planning Development Backlog Identifying Pipeline The Identifying stage “Pipeline” In this stage, the opportunities for a windfarm or a hydropower plant in specific areas are explored and involves assessing the power grid capacity. Our policy is to seek locations where impact evaluations on nature have already been performed in order to limit the size of the area impacted. When identifying new areas for wind power, Cloudberry focuses on “low impact areas”, and we also prefer to find “high need areas”. In Björnetjärnsberget, both these aspects are fulfilled. The area is identified in the municipality’s plan as potentially suitable for wind power, which means that they have already conducted several pre-stud- ies in the area and concluded that it is a low impact area regarding nature, culture, and social impact. For Cloudberry, this gives a solid base to continue the environmental assessment of the development work including bird, other animals, nature, and culture studies. Close to Björnetjärnsberget, there is a local sawmill which is an important employer in the area. The sawmill suers from several power outages annually and needs a better grid connection. Together with Björnetjärnsberget, Cloudberry cooperates on the grid connection in order to find a solution that fits both. The area is therefore also identified as a high need area of power. Furthermore, we evaluate the landowner’s inter- est for having a power production plant on their grounds, as well as identifying the local political view towards such an establishment. In Sweden, municipal plans for wind power are already in place. Cloudberry seeks to minimize the visual impact and aims to build larger, but fewer turbines to reduce land use and noise level on the ground whilst seeking to balance the size of the shade area and potential ice throw during cold weather. Wind power plants and surrounding infrastructure may also impact the conditions of fauna and flora, animals and birdlife and may change their conditions of life. Further studies relating to the environment, nature and wildlife are carried out to identify potential neg- ative consequences of the project. These studies need to conclude on an acceptable risk level prior to progressing to the next step, which is negotiating and entering into an agreement, the “procurement”, with landowners and possibly other parties. The Development stage “Backlog” In the development stage, the formal notification with a description of the project is submitted to the authorities. Public meetings are held to inform stake- holders. In Norway, The Norwegian Water Resources and Energy Directorate (NVE) handles both wind and hydro power applications, whilst in Sweden, the County Administrative Board handles onshore wind power, and the Land and Environmental Court handles oshore wind power. Necessary environmental impact assessments (EIA) are carried out and describe any negative environmental consequences e.g., on biodiversity, caused by the construction and operation of the power plant. The EIAs are performed by specialist consultants. The benefits of the project must exceed the perceived negative environmental impact. If the environmental impacts are acceptable and within regulatory requirements, the final application is prepared and submitted to the authorities and the development of the project can proceed. 61Cloudberry Annual report 2021 Sustainability report For Cloudberry, it is important to be transparent and available for the local stakeholders. During the development phase at Björnetjärnsberget, we held several meetings in the area to open up for a solution-oriented and honest dialogue with local stakeholders, such as hunting groups, neighbours and the politicians of the municipality. The Detail Planning stage “Construction Permit” When a project has been approved, the detailed planning begins. This includes descriptions and drawings of the design of the wind power plant, road sections, foundations, cable trenches, crane sites, dam, and more. In the planning phase, it is imperative to consider environmental impact in the construction phase. This is also an integral part of the negotiations with the suppliers who commit to operate in accordance with the Supplier Code of Conduct. A detailed plan must be approved by the authorities before the actual construction begins. Once the permit is obtained, Cloudberry needs to fulfil several specified environmental conditions in the construction and production phase. For an onshore wind project this may be to establish a follow-up plan on environmental impact during con- struction. At Hån wind power project, the planning phase included negotiation work with the suppliers to conclude on a just-in-time installation procedure. Planning for one large component storage area instead of storage areas by each turbine, reduces the need for hardened areas, which reduces the total environmental impact. For a hydropower plant this may involve monitoring the area around the power station to identify any changes and needs for risk reducing initiatives. Cloudberry may adopt additional voluntary actions, such as reducing waterflow and installing fish ladders. At the same time, hydro dams also have positive impacts such as limiting the risk of flood- ing during extreme weather and may also reduce erosion of rivers and streams. The Construction stage “Under Construction” Cloudberry endeavour to minimise our negative impacts. We focus on maximising local benefits as much as possible and prioritise dialogue with stakeholders on our projects. Local value creation is of high importance for Cloudberry. In the construction phase, Cloudberry seeks to engage local entrepreneurs and suppli- ers. In connection with the Hån wind farm project Cloudberry will publish a database for suppliers and local business partners, an online platform for them to oer their construction and maintenance services to the Hån project. At Hån Cloudberry rents two construction oces from existing local business partners and thereby avoids having to construct an area for temporary Stenkalles Grund For the grid connection at the Stenkalles Grund project at Vänern in Sweden, it is planned for an existing land-based substation to be expanded as opposed to constructing an additional oshore substation. We will also be using an existing logistic port and storage area for most of the projects works, storage and logistics minimises the use of land area. Cloudberry Annual report 2021 Sustainability report 62 oces that would have been torn down after con- struction period. Local hiking areas are considered when building roads and tracks. At Hån we are connecting roads and cycling tracks from the Swedish side of the boarder to the Marker windfarm on the Norwegian side. During the construction phase Cloudberry leverages on existing infrastructure when possible and reuse excavated masses for roads. At Hån the project is planned with just in time transports for blades, which reduces the need for approximately 10 000 sqm area in total for the five turbine locations, instead of having blade storage at each turbine location. Transport optimization at the logistic area comes down to 3 000 sqm instead of 4 500 sqm originally planned for logistics and component preparation. After construction the landowners take over the logistics area to use as a part of their local business. The area at Hån wind farm is a former landfill. Cloudberry entered into a collaboration with Marker municipality and is collecting rubbish along the cable route while construction is ongoing. The waste is being returned to the municipality for recycling. Health, safety, and environment are of high priority for Cloudberry. We set requirements towards our suppliers and expect compliance with laws and regulations in the construction phase. Our standards and policies are communicated to our employees and suppliers, and weekly meetings are held on-site with contractors. We work towards zero injuries to personnel, material, and environment. We seek to restore the area to the original condition after the construction is completed. Areas close to birds are “no-work zone” during the breeding season. . Similarly, in our nearshore pro- ject, spawning sea- sons for certain fish types are accounted for in the planning. Furthermore, in our oshore wind project, Cloudberry may compensate fishermen for their loss of income when they are not able to fish in the area during construction. 63Cloudberry Annual report 2021 Sustainability report The Production stage “Production” Cloudberry has an operational model focusing on eciency and cost flexibility as well as compliance to meet all regulatory and environmental require- ments. The model is based on long term contracts with strategic partners. Each powerplant has three key roles with formal responsibility for respective areas: · Plant supervision and internal control including environmental matters · Dam and Penstock · High Voltage These roles are filled by persons with necessary approval and authorisations given by governmental bodies. In addition, there are agreements in place for local inspections and general follow up of the plants, normally being one of the landowners. Local inspec- tors go through special training programs. There is also an agreement in place for 24/7 surveillance of all power plants. Power sales and balancing is han- dled through a third-party service provider. Risk and contract management, bank financing and portfolio management is handled by internal resources in Cloudberry. Dismantling Dismantling is the last phase in the value chain of wind power plants. Once the turbine is out of service, the work of dismantling the turbine must be handled, including transportation from erection area to the final disposal site. Areas are required to be restored back to their original condition as far as possible, e.g., cleaning up and replanting. Recycling and depositing of components, components and recovering other material such as lubricant oil. Some of the materials has a second-hand benefit, e.g., at the Kafjärden wind project in Sweden, Cloudberry included second-hand turbines in the evaluation of choice of wind turbine suppliers. Before granting a concession, the relevant regula- tory body carries out a thorough and comprehensive evaluation process as mentioned above. Local biodiversity input from local authorities and the local public are taken into consideration. The reg- ulatory authorities will also consider the need and demand for new stable renewable energy. Normally the authorities would not grant concession if a power plant were to be located to adjacent or in a protected area, or if the power plant would have a negative eect on biodiversity. None of Cloudberry’s power plants are located in, or adjacent to, protected areas. There have been observations of rare species in the areas around our power plants and necessary actions have then been taken. Way forward Renewable energy projects and construction of power plants may cause unfortunate, and unavoid- able, environmental and social impacts. Cloudberry will establish a plan for mitigating measures and endeavour to minimise our negative impacts. Cloudberry is developing oshore wind energy pro- jects in Sweden with the fully permitted Stenkalles Grund project in the Lake of Vänern, and a portfolio of early-stage projects in the Baltic Sea. The Stenkalles Grund project is at a pre-construction phase with the aim to reach operation by 2024. The procurement process started early 2021 and will reach a financial investment decision (FID) during 2022. The detailed planning includes environmental issues and requirements as described in the permit. For example, the company consults the County Board, the Swedish Maritime Administration and the Swedish Transport Agency about necessary protec- tive measures. An example is the early start of the quality program to monitor the impact of foundation and cable works and how to perform these opera- tions in order to minimize environmental impact. For the onshore wind project Munkhyttan in Sweden, Cloudberry plans to construct a new type of low impact roads. This in order to minimise the impact on the hydrology in the area and to secure the existing butterfly habitat. For all projects, our focus will be maintained on conducting environmental mapping and analysis in the early stages of development. It is also imperative to have good cooperation with the host municipality as well as other local stakeholders to ensure trans- parency and involvement from Cloudberry. Cloudberry Annual report 2021 Sustainability report 64 People Born and bred and operating in the Nordic in accordance with local tradition, Cloudberry’s corporate culture is closely aligned with the Nordic model, and its principles of multi-level collective bargaining based on the economic foundations of social corporatism. Performance summary People Not started On plan Achieved Health and safety Zero injuries in our construction projects and operating assets Continuously improve reporting on routines and structure (SHA-plans) Provide training to employees on risk activities to follow up suppliers Health, safety and wellbeing initiatives for employees Diversity and gender eauality Diversity and foster inclusion in the workplace Employers activity duty Zero tolerance for discrimination and harassment Human and labour rights Eliminate social dumping in the construction industry Norwegian Transparency Act - alignment Principles in SCoC - follow up suppliers SCoC integrated in procurement phase Our responsibility towards our employees is our top priority, and for the impact on the societies where we operate. We take an active approach and report transparently in our annual and sustainability reports about our achievements and performance towards diversity and inclusion. Our construction and operation partners have safety policies and report on a variety of measures to safeguard the workplace during development projects and ongoing operations. These measures may be training for employees and contractors, procedures for notification of accidents, registration and reporting of nonconformities, whistleblowing etc. Cloudberry has 14 employees representing various backgrounds and competence from the renewable energy sector. Eight of our employees work out of the main oce in Oslo, Norway, and six employees work out of the Karlstad oce, Sweden. Two new employees onboarded in the beginning of 2022 in our recently opened oce in Gothenburg, and three new employ- ees will onboard during second quarter to grow our oshore wind team further. In 2021 Cloudberry employed two men and three women. The average age is 42.9 years. We are fos- tering collaboration and inspire all our colleagues to share ideas and contribute to an open and inclusive working environment. A strong focus on gender equality and diversity is a part of the companys DNA and manifested in policy documents. Ensuring knowledge and adherence to all company regulations and guidelines are integral to the onboarding process for new employees. 65Cloudberry Annual report 2021 Sustainability report Cloudberry believes that diversity contributes to new perspectives and ideas by our employees and spark innovation and further development in the company. The commitment to diversity and inclusion relates to all aspect of diversity i.e., gender, functional ability, sexual orientation, gender identity and expression, religion and belief, ethnicity, nationality, educational background, age and mindset. We are all committed to equal treatment and have zero tolerance for discrimination and harassment. Cloudberry foster health and wellbeing in the workplace by providing a culture founded by open- ness, respect, and care. As Cloudberry is growing and the number of employees is increasing, it is even more crucial for the company to focus eorts on initiatives to provide more diversity, company culture integration, development of employees and secure governance. The company has set targets going forward such as performance development goals for all employees and become even more transpar- ent about goals and results. During 2022 Cloudberry will measure and compare gender balance in the organization, fostering transparency and moti- vating actions to key aspects of gender qualities. Furthermore, in 2022 we will implement processes for integration of Captiva Group into Cloudberry. Both Cloudberry and the Captiva Group will benefit from synergies arising from the merger of the two companies, both with regards to digitalization and power plant development and operation, but also with regards to industry competency and diversity in our employee body. Following the merger with Captiva Group and an increased workforce, Cloudberry will prepare to report in accordance with the extended Norwegian “Activity and reporting duty” (Aktivitets- og redeg- jørelsesplikten). Norwegian companies are obliged to work actively, targeted and systematically to promote equality and prevent discrimination through a four-step working method. Through a risk assess- ment in 2022, Cloudberry will lay the foundation for the work to ensure equal opportunities for all employees. “The Cloudberries” onsite one of our development projects. Cloudberry Annual report 2021 Sustainability report 66 Health and Safety Care for, and the safety of people working for or on behalf of Cloudberry is of paramount importance to us. Our employees are predominantly oce-based with low health and safety risks. Our largest health and safety risks are amongst our suppliers and contractors, therefor we are reliant on our partners to have implemented solid health and safety man- agement systems. It is our responsibility to have good routines in place to follow up suppliers working on behalf of Cloudberry. Our approach We work continuously towards our goal of zero inju- ries. We expect our suppliers to follow standards that are in line with, or better, than our own. Our construc- tion and operation partners have health and safety policies in place and report on a variety of measures to safeguard the workplace during the construction phase. These measures may be training for employ- ees and contractors, procedures for notification of accidents, registration and reporting of nonconform- ities etc. We have a zero tolerance if workers onsite our projects and powerplants do not comply with the company’s safety rules and routines. Our activities The health and safety risks in Cloudberry’s construc- tion projects, operations and maintenance of our power plants will increase, as the company grows. Cloudberry has safety and health guidelines for work environment (“SHA-plans”) on every development project and is continuously improving our framework and reporting routines. On our projects, we have weekly construction meetings and health and safety management on site is part of our regular supplier dialogue to ensure that routines are followed. During 2021 no incidents causing harm to peoples health was recorded neither on construction pro- jects nor on our producing assets. Of the recordable work-related injuries none were classified as serious injuries but involved handling of tools and construc- tion equipment. 67Cloudberry Annual report 2021 Sustainability report At the Hån construction project, Cloudberry recorded some incidents: a truck with concrete slipped into a shallow ditch, during casting a small amount of concrete sprinkled into the face of a worker, during a rock blasting a protection cover was lifted and rocks hit surrounding vegetation, and during the handling of blasted masses a rock slid down and hit one machine. During blasting work, Cloudberry enhanced safety by using blasting mats to a larger extent than is required in surrounding areas, to secure health and safety, as well as limiting environmental impact. At Nessane hydropower plant, parts of the stone lining that strengthen the riverbanks were damaged in connection with heavy storms and high-water flow. The issue did not qualify as a serious material damage and was quickly rectified and repaired. In 2021 the sick leave was 1.06% amongst our 14 employees. Way forward Cloudberry aims to prevent incidents and is commit- ted to a workplace without injury or harm. In our view our largest health and safety risks are at our assets and involves both our sta and partners. The likeli- hood of injuries caused by work-related accidents increases as our company develops and expands. We take responsibility with mitigating measures to avoid personal injury and material damages. We continue to update our routines and reporting struc- tures with regards to health and safety policies, and have high priority on contractor safety, monitoring and regular risk assessments. Health and safety is also addressed in the Supplier Code of Conduct to safeguard a mutual commit- ment between Cloudberry and our suppliers and contractors, and training and awareness is required in our agreements with contractors. We continue to encourage employee engagement and strengthen our focus on risk activities and preventive measures, such as providing relevant training to build the required competence. Human and Labour Rights Our approach and activities Cloudberry complies with high ethical standards, applicable laws and regulations. In line with the new Norwegian Transparency Act (Åpenhetsloven) in Norway, Cloudberry will develop its approach to human rights due diligence in our operations in accordance with the OECD guidelines for Multinational Enterprises and the United Nations Guiding Principles for Business and Human Rights. This involves; conducting risk assessments to identify potential negative impact on people, society, and the environment and to stop, prevent and reduce such impact. Cloudberry is obliged to work with its suppliers and business partners to mitigate any possible human rights violations or negative eects on decent working conditions in our supply chain. We expect our suppliers and business partners to follow ethical standards in line with our own, and in 2021 Cloudberry developed and implemented a Supplier Code of Conduct (SCoC). When Cloudberry enters into agreements with business partners and suppliers, we consider compliance with the SCoC, and commitment to operate in accordance with responsible, ethical, and sound business manners, including governance, labour and human rights risks, health and safety, and environmental and nature management. Way forward The Norwegian Transparency Act (Åpenhetsloven) will enter into force on 1 July 2022. The purpose of the Act is to ensure that organisations comply with fundamental human rights and decent working conditions, and to grant public access to information on how the companies address identified adverse impacts in their supply chain. Cloudberry will assess existing human rights due diligence process against the Transparency Act to comply with the Act going forward. Cloudberry Annual report 2021 Sustainability report 68 69Cloudberry Annual report 2021 Sustainability report Prosperity Our purpose is to provide renewable energy for future generations and powering the transition to a sustainable future. Our long-term success is linked to operating our business in a sustainable way. Performance summary Prosperity Not started On plan Achieved Local value creation Ensure local value creation in all projects Publish examples of local value creation annually Number of local employment and suppliers on projects and assets Renewable energy supply Report MW/GWh of renewable energy produced annually per power plant Report on reduced GHG emissions from EU energy mix Sustainable financing Listing Oslo Børs – making Cloudberry accessible to more shareholders Gain access to a broader universe of investors Green bond loans – alternative funding structure Best technology BAT in development projects and producing assets We treasure partnerships and develop our projects and our business with a long-term perspective. We create value for stakeholders involved in our projects and share the result of our eorts fairly. Cloudberry is building its business with a long-term perspective in mind. Prosperity relates to Cloudberrys role in contributing to a societal value creation. We contribute to eco- nomic growth by providing employment, local value creation and secure renewable energy supply in the ongoing energy transition. We report transparently and consistently about employment, economic contribution, investments, and taxes paid in our annual reports. Local value creation Providing renewable energy enables the necessary energy transition. We seek to do this in a sustainable manner. We have a long-term growth strategy as a local business partner, that rests upon our ability to create value for stakeholders. Even through windfarms and hydro power plants contribute to the necessary renewable energy transition, every development project has an impact on nature. We take this very seriously and always conduct thorough investigations to minimise the negative impact on nature and society. It is vital for Cloudberry to conduct dialogue with all stakehold- ers locally and listen and taking into account their expectations and concerns before moving further with a project. Our approach Cloudberry aims to be seen as a good neighbour in the communities where we operate. We pay tax to local municipalities, we establish and respect bal- anced commercial arrangements with landowners, and we engage with local partners and suppliers when possible and relevant for construction, opera- tions, and maintenance of our projects and plants. For the broader society, we provide renewable energy and contribute to reduce climate emissions from fossil fuels and thereby contribute to meeting the SDGs and the Paris Agreement. When developing projects, we seek to identify local stakeholders’ needs and to accommodate these in our plans. It is also important for us to minimise our Cloudberry Annual report 2021 Sustainability report 70 environmental impact, for instance by using existing infrastructure. We seek to create financial value for our local stakeholders. The development team focus on developing projects close to our oces if possible. This provides easy access to project facility. Local presence makes it easier to cooperate with local stakeholders such as municipalities, politicians, landowners, and local industry. Our activities Local value creation is important for Cloudberry in all its developing, construction and operating projects. We seek to identify local stakeholders’ needs and try to accommodate these in our plans. Cloudberry seeks to create value for local communi- ties. Instead of using an external painting company, we engaged the local ski community, Bromma Idrettslag, to stain the power plant building as a part of the maintenance at our hydro power plant Finnesetbekken in Norway. Such initiatives and activ- ities benefit children and youth, culture, and sports, and is of high priority for us. The Norwegian Odal wind power plant has estab- lished a fund. This will contribute to growth and well-being in the local community. The fund will support local teams and associations annually. An initiative for a local ski resort on Songkjølen is already being planned in detail. The roads and infrastructure make the whole area more accessible for anyone who wants to go hiking and have access to the surrounding nature. On the boarder to Norway, Hån windfarm located in Sweden, we collaborate with the municipality in Norway to develop a cycling path across the border Sweden/Norway, on the roads which are originally intended for power cables. The road will also provide landowners with easier access to their forests which will improve their forest management. Cloudberry is in process of establishing a database for suppliers and local business partners. This is an online platform for our partners to oer their con- struction and maintenance services in connection to construction and operating Hån windfarm. At the Björnetjärnsberget wind development project in Sweden, Cloudberry has a good cooperation with the local sawmill company. We look into solu- tions of finding synergies for the grid connection. Development of wind power will ensure power supply to the sawmill and provide an opportunity to increase production with sucient access to electricity. At the same time, new roads through the forest will create easier access to extract timber. The sawmill is an important employer locally. The local communities around some of our hydro power plants, experience that the quality of the drinking water has improved, and the plants contrib- ute to a more secure water supply. Cloudberry is open to discuss the number of turbines being constructed, as well as height and location of the turbines, as we focus on cooperating with our stakeholders and to perform our business in a sustainable manner. As Cloudberry is growing further, we have increased the number of employees in our oces in Oslo and Karlstad. We have established an oce in Gothenburg where we are onboarding employees to the oshore wind team. The company has a growth strategy of new renewable and sustainable energy projects in the years to come, and we value local skilled employees with the right competence and experience. In June 2021 Cloudberry uplisted from Euronext Growth to Oslo Børs Stock Exchange. We believe the listing on a fully regulated market to be a sustaina- ble finance activity. The listing on Oslo Børs makes investing in renewable energy accessible to all people beside governmental and institutional inves- tors and increases the availability for Cloudberry to access capital from a broader universe of investors. Way forward Cloudberry treasures partnerships and develop our projects and our business with a long-term perspec- tive. We work closely with our stakeholders, landown- ers, and the communities where we operate, and they are important to us. Our goal is to create value together and share the result of our eorts fairly. In the years to come it will be important for us to both evaluate and calculate how our local value cre- ation initiatives has succeeded and are perceived by local stakeholders. By taking stakeholders opinion 1 https://sweden.se/climate/sustainability/energy-use-in-sweden 2 https://www.regjeringen.no/en/historical-archive/solbergs-government/Ministries/kld/news/2020-nyheter/norge-forsterker-klimamalet-for-2030-til- minst-50-prosent-og-opp-mot-55-prosent/id2689679/ 71Cloudberry Annual report 2021 Sustainability report and expectation into account and focusing on a transparent and open stakeholder dialogue we will succeed in delivering value that meet expectations from identified stakeholders in every project. We will make it even more accessible by providing trans- parent information to identified stakeholders around every step in our development and construction phases. At the Hån wind farm project, electricity supply from Sweden will be transferred to Norway through an underground cable. This collaboration contributes to the realization of a common infrastructure for the wind power project and for outdoor purposes. At Hån windfarm Cloudberry considers installing chargers on-site during construction, as an option for business partners and suppliers. The local community may serve the chargers after the construction period. This encourages increased use of electric transport by suppliers and eventually by locals. Charger options are considered on other development projects. At Odal windfarm the fund continues to allocate financial support annually and will create value for children, youth, culture, and other local initiatives. We continue to seek opportunities for cooperation with local stakeholders and communities to create value for them when we develop, construct, and operate our assets. Cloudberry will strive to engage politicians and other stakeholders locally through meetings and on-site visits. We believe in transpar- ency, engagement, and long-term dialogue and cooperation locally to be successful on projects. We listen and learn from every project and aim to further develop local value creation in a systematic way. To meet the renewable energy demand and to achieve competitive conditions, we need to discuss and perceive risks and opportunities in the renewable energy sector, and act. Renewable energy supply Our approach Renewable energy production contributes to conserving natural resources and reaching the ambitious climate goals the world has agreed upon. Providing renewable energy is our business, and we contribute to securing renewable energy supply for society. This supports Sweden’s 1 goal of producing 100% renewable energy by 2040 and Norway’s 2 target to reduce emissions by 55% by 2030 com- pared with 1990 levels, with a further reduction down to net-zero by 2050. Renewable energy is a priority area for Norway’s and Sweden’s enhanced climate policy eorts. Our activities During 2021, Cloudberry increased its total output of renewable energy in the Nordics from 21 GWh to 117 GWh (proportionate), which is equivalent to a CO 2 reduction of 29 133 tCO 2 e (relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2021)). Cloudberry completed sev- eral hydro projects, purchased new hydro projects, started construction of Hån windfarm, increased ownership in Odal windfarm, and established a new oshore team to develop oshore projects. Cloudberrys current portfolio consists of 26 hydro power plants and three wind power assets. Cloudberry has kicked o 2022 with two late-stage wind development projects, securing two new hydro projects and adding an operating segment through the purchase of 60% of Captiva Group. The annual production will increase considerably in 2022. With the current projects under construction, Cloudberry expects to reach an annual production slightly above 500 GWh going forward. Way forward We are powering the transition to a sustainable future by providing renewable energy today and for future generations. We will continue to develop our portfolio and ensure timely and safe completion of projects. Cloudberry sees many opportunities in the Nordic market. In line with our business strategy, we con- tinue to grow, focusing on further development and acquisitions of renewable energy projects and oper- ating power plants, contributing to the European energy transition and net-zero emission society. Sustainable Finance Our approach To ensure that we meet our ambitions, Cloudberry has built a robust, scalable platform for sustainable growth. We see increase in Nordic power consump- tion, faster development of infrastructure, electrifica- tion, and data centre expansion, and this demands Cloudberry Annual report 2021 Sustainability report 72 more renewable energy production. Businesses are shifting their strategies towards net-zero carbon emissions, and this will increase going forward. The ambitious climate goals in the Nordics and the EU will drive a transition from fossil fuels to renewable energy. Combined with expected higher power prices in the near future, this is likely to provide supportive fundamentals for value creation and long-term cash generation in the company. We seek to have an optimised capital structure, tak- ing both return and risk into consideration. We have several long-term alternatives available for financing, depending on project size, transaction type and counterparty, including existing cash and cash flow generation, green bond financing, and farm down and carry arrangements, share consideration and new equity. Our activities There was significant corporate activity in 2021. The company listed on Oslo Børs’ Main list, raised NOK 1 700 million in equity, and increased the debt facility to NOK 1 400 million. The listing makes investment in renewable energy accessible to all stakeholders and increases the availability to capital from a broader universe of investors. It also positions us for building the company to take a position as the leading inde- pendent power producer (IPP) in the Nordic. Cloudberry has a strong balance sheet with low debt, strong cash position, and is fully funded and capitalized for all its construction projects and fund- ing for further growth of more than 290 MW. Way forward Cloudberry has delivered on its targets and has carried out several transactions in 2021. The com- pany has high ambitions, and the scalable platform is positioned for valuable growth, both in terms of energy production and our in-house development backlog and pipeline. Cloudberry’s strategy is to continue to grow both organically and by merger and acquisitions in the Nordic market. Cloudberry considers the opportunities for green bonds loans to finance and refinance investments in existing and new projects going forward. This may be an alternative to further finance our ambitious growth targets and attract green investors. 73Cloudberry Annual report 2021 Sustainability report Best technology Our approach Cloudberry optimises its energy production as well as utilize new technology and digitalization to drive eciency across the entire value chain whilst caus- ing minimal environmental impact. The choice of the best technologies will be done in close cooperation with our suppliers and partners and our approach will be explored and developed going forward. Our activities Technology related to wind generators is expe- riencing rapid improvements. Cloudberry seeks to maintain a portfolio with relevant and ecient technology and has this as a criteria when entering into partnerships with suppliers of turbines etc on projects to be constructed. When acquiring power plants in production, we invest in assets expected to have good technical standards and prioritize tech- nical solutions that are well-proven and delivered by reputable suppliers. For the Björnetjärnsberget wind power project in Sweden Cloudberry will apply for a permit allowing us to build turbines up to a height of 300 meters. This in order to stay ahead of potential technical developments. The technical development is rapid, and the wind turbines have steadily increased in size the last decades. Applying for higher turbines oers Cloudberry flexibility in order to maximize the production of renewable energy. Best technology solutions reduce maintenance cost and potential increased insurance cost. Components arriving from Europe (EU) instead of countries farther away, simplifies processes and it reduces risks. Cloudberry is considering prioritising European suppliers in the future, to stabilize and secure deliveries. Way forward Early in 2022 Cloudberry entered into an agree- ment for the acquisition of the Captiva Group, a data-driven operator, manager, and developer of renewable energy in the Nordics. Captiva delivers management services within operations and main- tenance, development, and construction, technical and commercial, and finance and accounting ser- vices to renewable energy projects. One of the sub- sidiaries delivers digital services to renewable energy projects with operational intelligence, visualization, compliance and reporting solutions. With this acqui- sition, Cloudberry not only strengthens its position as a leading Nordic independent power producer (IPP) but will provide technical solutions and renewable power for generations to come. The company is closely following the rapid technol- ogy improvements. To secure the company’s prof- itability and financial position, we prioritise always securing the best technology. Covid-19 The market situation has been challenging with the risk and potential consequences of the global pandemic. The Covid-19 pandemic has aected more or less all businesses in some way. During 2021, Cloudberry has seen some adverse impacts of the pandemic, such as travel and entry restrictions, absence due to lockdowns and mandatory quaran- tine. Mainly, the impacts are related to government approvals or disruptions in our supply chain as a result of delayed deliveries from suppliers. At Odal Vind, entry restrictions for key personnel and logistical challenges in the global supply chain have created some challenges and delays. By the end of January 13 of 34 Siemens turbines are fully installed and first power was delivered to the grid in December. Odal is expected to be in full operation before the end of June 2022. At Hån windfarm, it was a priority to secure precau- tionary routines and procedures together with the contractors, especially after the omicron was dis- covered in November. Nevertheless, in January 2022 there was an outbreak in one of the work teams, but it had minimal impact and the construction is progressing as planned. Cloudberry has grown significantly, and despite many restrictions during 2021 due to Covid-19, the company has delivered all projects without signifi- cant deviations from budget and time schedule. Cloudberry continues to assess risks related to the Covid-19 situation. The pandemic will influence the markets and supply chain disruptions, and there is a risk that the pandemic will result in increased costs related to supply chains. Nevertheless, the company expects the pandemic to have limited overall impact on its projects. Cloudberry Annual report 2021 Sustainability report 74 WEF Metric: Governance Theme Metric WEF Criteria GRI-indicator Reference chapter Governing Purpose Setting purpose The company’s stated purpose, as the expression of the means by which a business proposes solutions to economic, environmental and social issues. Corporate purpose should create value for all stakeholders, including shareholders. GRI: (102-26) CEO letter, Sustainability Quality of Governing Body Board composition Composition of the highest governance body and its committees by: competencies relating to economic, environmental and social topics; executive or non-executive; independence; tenure on the governance body; number of each individual's other significant positions and commitments, and the nature of the commitments; gender; membership of under-represented social groups; stakeholder representation. GRI: (102-22) (405-1a) BoD, annual report Stakeholder Engagement Impact of material issues on stakeholders A list of the topics that are material to key stakeholders and the company, how the topics were identified and how the stakeholders were engaged. GRI: (102-21) (102-43) (102-47) Materially assessment Ethical Behaviour Anti-corruption 1. Total percentage of governance body members, employees and business partners who have received training on the organisation’s anti-cor- ruption policies and procedures, broken down by region; a. Total number and nature of incidents of corruption confirmed during the current year, but related to previous years; ( b. Total number and nature of incidents of corruption confirmed during the current year, related to this year; 2. Discussion of initiatives and stakeholder engage- ment to improve the broader operating environ- ment and culture, in order to combat corruption. GRI: (205-2) (205-3) Company culture Protected ethics advice and reporting mechanism A description of internal and external mechanisms for: 1. Seeking advice about ethical and lawful behaviour and organisational integrity; 2. Reporting concerns about unethical or unlawful behaviour and lack of organisational integrity. GRI: (102-17) Company culture Risk and Opportunity Oversight Integrating risk and opportunity into business processes Company risk factor and opportunity disclosures that clearly identify the principal material risks and opportunities facing the company specifically (as opposed to generic sector risks), the company appetite in respect of these risks, how these risks and opportunities have moved over time and the response to those changes. These opportunities and risks should integrate material economic, environmental and social issues, including climate change and data stewardship. GRI: (102-15) Our sustainability strategy, climate risk WEF Metrics 75Cloudberry Annual report 2021 Sustainability report WEF Metric: Planet Theme Metric WEF Criteria GRI-indicator Reference chapter Climate Change Greenhouse Gas (GHG) emissions For all relevant greenhouse gases (e.g. carbon dioxide, methane, nitrous oxide, F-gases etc.), report in metric tons of carbon dioxide equivalent (tCO2e) GHG Protocol Scope 1 and Scope 2 emissions. Estimate and report material upstream and downstream (GHG Protocol Scope 3) emissions where appropriate. GRI: (305 1-3) Cloudberrys Carbon Emissions TCFD implementation Fully implement the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD). If necessary, disclose a timeline of at most 3 years for full implementation. Disclose whether you have set, or have committed to set, GHG emissions targets that are in line with the goals of the Paris Agreement - to limit global warming to well-below 2°C above pre-industrial levels and pursue eorts to limit warming to 1.5°C – and to achieve net-zero emissions before 2050. Climate risk Nature Loss Land use and ecological sensitivity Report the number and area (in hectares) of sites owned, leased or managed in or adjacent to protected areas and/or Key Biodiversity Areas (KBA). GRI: (304-1) Land use and ecological sensitivity Fresh water availability Water consumption and withdrawal in water- stressed areas Report for operations where material: megalitres of water withdrawn, megalitres of water consumed and the percentage of each in regions with high or extremely high baseline water stress according to WRI Aqueduct water risk atlas tool. Estimate and report the same information for the full value chain (upstream and downstream) where appropriate. Not relevant Solid waste Impact of solid waste disposal 1. Report wherever material along the value chain: estimated metric tons of single-use plastic con- sumed. Disclose the most significant applications of single-use plastic identified, the quantification approach used, and the definition of single-use plastic adopted. 2. Report wherever material along the value chain, the valued societal impact of solid waste disposal, including plastics and other waste streams. Not relevant Cloudberry Annual report 2021 Sustainability report 76 WEF Metric: People Theme Metric WEF Criteria GRI-indicator Reference chapter Dignity and Equality Diversity and inclusion (%) Percentage of employees per employee category, by age group, gender and other indicators of diversity (e.g. ethnicity). GRI: (405-1 (b)) People Pay equality (%) Ratio of the basic salary and remuneration for each employee category by significant locations of operation for priority areas of equality: women to men, minor to major ethnic groups, and other relevant equality areas. GRI: (405-2) Not relevant Wage level (%) 1. Ratios of standard entry level wage by gender compared to local minimum wage. 2. Ratio of the annual total compensation of the CEO to the median of the annual total compensation of all its employees, except the CEO. Not relevant Risk of incidents of child, forced or compulsory labour An explanation of the operations and suppliers considered to have significant risk for incidents of child labour, forced or compulsory labour. Such risks could emerge in relation to a) type of operation (such as manufacturing plant) and type of supplier or b) countries or geographic areas with operations and suppliers considered at risk. GRI: (408-1 (b)) (409-1) Health and safety Health and Well-Being Health & safety (%) 1. The number and rate of fatalities as a result of work-related injury; high-consequence work-re- lated injuries (excluding fatalities); recordable work-related injuries; main types of work-related injury; and the number of hours worked. 2. An explanation of how the organisation facilitates workers’ access to non-occupational medical and healthcare services, and the scope of access provided for employees and workers. GRI: (403-9 (a&b)) (403-6 (a)) Health and safety Skills for the Future Training provided (#,$) 1. Average hours of training per person that the organisation’s employees have undertaken during the reporting period, by gender and employee category (total number of trainings provided to employees divided by the number of employees). 2. Average training and development expenditure per full time employee (total cost of training provided to employees divided by the number of employees). Incomplete 77Cloudberry Annual report 2021 Sustainability report WEF Metric: Prosperity Theme Metric WEF Criteria GRI-indicator Reference chapter Employment and Wealth creation Absolute number and rate of employment 1. Total number and rate of new employee hires during the reporting period, by age group, gender, other indicators of diversity and region. 2. Total number and rate of employee turnover during the reporting period, by age group, gender, other indicators of diversity and region. GRI: (201-1) (201-4) People Economic contribution 1. Direct economic value generated and distributed (EVG&D) – on an accruals basis, covering the basic components for the organisation’s global operations, ideally split out by: a. revenues, b. operating costs, c. employee wages and benefits, d. payments to providers of capital, e. payments to government, and f. community investment. 2. Financial assistance received from the govern- ment: total monetary value of financial assistance received by the organisation from any government during the reporting period. GRI: (201-1) (201-4) Annual report Financial investment contribution 3. Total capital expenditures (CapEx) minus depre- ciation, supported by narrative to describe the company’s investment strategy. 4. Share buybacks plus dividend payments, supported by narrative to describe the company’s strategy for returns of capital to shareholders. Annual report Innovation of Better Products and Services Total R&D expenses ($) Total costs related to research and development. GRI: (201-1) Incomplete Community and Social Vitality Total tax paid The total global tax borne by the company, including corporate income taxes, property taxes, non- creditable VAT and other sales taxes, employer-paid payroll taxes, and other taxes that constitute costs to the company, by category of taxes. Annual report Cloudberry Annual report 2021 Corporate Governance 78 1. Implementation and reporting on corporate governance This report has been prepared by the Board of Directors of Cloudberry Clean Energy ASA (“Cloudberry” or the “Company”) and presents the corporate governance of the Company. Cloudberry is incorporated and registered in Norway and is subject to Norwegian law. The Company is listed on Oslo Børs Stock Exchange. Cloudberry considers good corporate governance to be the foundation for value creation and trustworthiness. As a public limited liability company listed on Oslo Stock Exchange, the Company must comply with the Norwegian Securities Trading Act and Regulation, the Issuer Rules for Companies Listed on Oslo Stock Exchange, the Norwegian Public Limited Liability Companies Act, and all other applicable laws and regulations. Further, Cloudberry endorses the Norwegian Code of Practice for Corporate Governance (the “Corporate Governance Code”), last revised on 14 October 2021, which is available at the web site of the Norwegian Corporate Governance Board www. nues.no. Deviations from the Corporate Governance Code must be justified and explained. In this report, deviations are discussed under the relevant sec- tions. As a general rule, the Board will only approve deviations the Board believes is in the best interest of the Company and its stakeholders. Corporate Governance report Chief Executive Ocer General Meeting Board of Directors Shareholders ESG / Compliance Corporate / Chief Value Ocer Compensation Committee ESG Committee Nominating Committee Audit Committee Development Production Business Segments Operations 79Cloudberry Annual report 2021 Corporate Governance To secure strong and sustainable corporate gov- ernance, it is essential that Cloudberry practices a transparent and healthy business with reliable financial reporting compliant with legislation and regulations. Governing structures and guidelines help the Company to ensure that the Company is in a manner that is justifiable and profitable for the employees, shareholders, partners, other stakehold- ers and the society. References to specific policies are included in this corporate governance report where relevant. Cloudberrys corporate governance is based on openness, trustful communication and cooperation between the Company and all its stake- holders, and equal treatment of shareholders. The report also outlines the Company’s policies and practices for corporate governance, in accordance with Section 3-3b of the Norwegian Accounting Act. The Company’s executive management team consists of five members: Chief Executive Ocer, Chief Value Ocer, Chief Operating Ocer, Chief Development Ocer and Chief Technology Ocer and together the team covers the value chain’s processes. The Company’s Chief Executive Ocer oversees the daily conduct of business, including the eectuation, implementation and follow-up of the objectives and strategies set by the Board of Directors. Chief Executive Ocer supervises that Cloudberrys accounts are in accordance with laws and regulations and provides the Board of Directors with the necessary information to carry out its administration and supervision tasks in a proper manner. The Company’s corporate governance structure can be illustrated as on previous page. 2. Business Cloudberry is a Nordic renewable energy company owning, developing and operating renewable energy assets such as hydropower plants and wind farms in Norway and Sweden. Cloudberry’s operations comply with the objective defined in Section 3 of the Companys articles of association (“Articles of association”) which states that “The company’s purpose as the parent com- pany of a group is to engage in investment activities in the energy sector, including developing and operating the production of renewable energy and activities naturally connected with this”. Cloudberry’s purpose is “to provide clean renew- able energy for future generations, developing a sustain-able society for the long term and creating value for stakeholders.” The Company’s corporate strategy is to deliver on this purpose, with targets to align strategy execution across the group for the long term. Cloudberry’s success factor is its continuous ability to grow and mature an in-house development portfolio and scanning for attractive acquisitive and strategic growth opportunities. The Company has a solid development track record and a large produc- tion portfolio with both hydro and wind assets. Cloudberrys integrated business model is based on a partnering model for construction, operations and maintenance to ensure risk-sharing, quality, cost and capital eciency across the value chain. A sustain-able and local approach is distinctive for our ownership, development and operations and going hand in hand with a commitment to long-term value creation for all stakeholders. Power produced and transferred to the transmission and distribution net- work equals our sales volume. Cloudberrys revenue streams are predominantly determined by power sales volume and actual power price achieved in the spot market (Nord Pool). Over time, Cloudberry seeks a balanced mix between spot pricing and long-term fixed purchase price agreements (PPAs). Cloudberry cultivates our portfolio to ensure a diversification and balance of risk, returns, asset- and geographical mix. Cloudberry considers Environmental, Social and Governance related factors relevant and important for its business when making business decisions, and the Board of Directors identifies and assesses which aspects of sustainability are relevant to the Company. Cloudberry builds robustness through a diversified and balanced portfolio and uses compet- itive financing to deliver sustainable, profitable and long-term growth. Cloudberry has defined purpose, and commitments define the Company’s way of working. In com- bi-nation with the Company’s culture, this forms the fundamental structure on which the Board and the Management believe Cloudberry should be managed. Cloudberrys value-based culture is the key premise for the behaviour of the Company and the Companys employees. The core values are: Supportive, Commitment, Continuous improvement, and Integrity. Cloudberry aims to maintain high Cloudberry Annual report 2021 Corporate Governance 80 ethical standards, and the employees must comply to its guidelines for ethics and corporate social responsibility describing the principles for business practices and personal behaviour within Cloudberry. The employees comply with Cloudberry’s principles on issues such as human and labour rights, health and safety, business ethics, legal compliance, insider trading, whistleblowing and other relevant issues related to the company’s operations and adhere to the Companys Code of Conduct. Cloudberrys ESG reporting and the companys approach to sustainability, is in accordance to the World Economic Forum (WEF) Stakeholder Capitalism Metrix. The metrics include non-financial disclosures centred around four pillars; Principles of Governance, Planet, People and Prosperity, which are aligned among existing ESG standards and disclosures, e.g., Global Reporting Initiative (GRI), Sustainability Accounting Standards Board (SASB), and Task Force on Climate Related Financial Disclosures (TCFD), as well as essential elements of the UN Sustainability Development Goals. Cloudberry has described its approach, activities taken place in 2021, ambitions and way forward related to the identified sustainability topics for the company according to these pillars. Deviations from Section 2 of the Corporate Governance Code: None 3. Equity and Dividends Capital adequacy The Company’s management and Board of Directors monitor the Company’s capital structure on a continuous basis, including equity and liquidity, to ensure that the level of equity and liquidity, are appropriate for the Company’s objectives, strategy and risk profile. As of 31 December 2021, Cloudberry’s equity amounted to NOK 2 636 million, equivalent to 85% of the company’s total assets. The debt ratio was 15%. Cash equivalents and current financial investments amounted to NOK 1 115 million Dividend Policy The Company’s dividend policy has adopted a dividend policy which mandates that the Company in the short to medium term intends to use its profit for both organic and acquisitions related growth initiatives and consequently will not make payment of dividend. The Company’s long-term objective is to pay share- holders consistent and growing cash dividends. Over time, the intention is to pay its Shareholders dividends representing 30 – 50% of free cash distrib- uted from the producing power plant companies. However, there can be no assurance that in any given year a dividend will be proposed or declared, or if proposed or declared, that the dividend will be as contemplated by the policy. Any future dividend proposed by the Board will be presented to the general meeting for approval. The Company does not hold any authorisation to resolve dividend distributions. Authorisations to the Board of Directors to purchase treasury shares and increase the share capital The Company’s extraordinary general meeting, held 17 June 2021, granted the Board of Directors the following authorisations to increase the Company’s share capital: · Authorisation to increase the company’s share capital by up to NOK 700 000.00 by issuance of up to 2 800 000.00 new shares each with a nominal value of NOK 0.25. The authorisation was reserved for the repair issue and a retail oering related to the Company’s listing on Oslo Stock Exchange and was valid until 30 September 2021. The authoriza- tion has been fully utilized. · Authorisation to increase the company’s share capital by up to NOK 100 000.00 by issuance of up to 400 000.00 new shares each with a nominal value of NOK 0.25. The authorisation is reserved for issue of shares in relation to the Company’s share purchase program for board members and is valid until the earlier of the Annual General Meeting in 2022 and 30 June 2022. The authorization has not yet been utilized. · Authorisation to increase the company’s share capital by up to NOK 11 941 583.50 by issuance of up to 47 766 334 new shares each with a nominal value of NOK 0.25. The authorisation is reserved for M&A activities and financing of strategic invest- ments and is valid until the earlier of the Annual General Meeting to be held in 2022 and 30 June 2022. NOK 11 215 837.75 of the authorisation has been utilized. 81Cloudberry Annual report 2021 Corporate Governance As the Company is in a growth phase, the Board of Directors will generally propose that the General Meeting grants the Board of Directors an authori- zation to increase the share capital with up to 20% of the share capital. Such authorisations will be reserved for use in relation to financing of strategic growth opportunities and will only be valid until the earliest of (i) the next Annual General Meeting or (ii) 30 June the next year. The Board of Directors currently holds no authorisa- tion to purchase treasury shares. Deviations from Section 3 of the Corporate Governance Code: None 4. Equal treatment of Shareholders Cloudberry has one class of shares and all shares carry equal Cloudberry has one share class and each share in the company carries one vote. All shares carry equal rights, including the right to par- ticipate in general meetings. Each share is entitled to one vote at the Company’s general meeting. The Company’s shareholders have pre- emption rights in share oerings according to the Norwegian Companies Act. Such pre-emption rights may how- ever be set aside, either by the General Meeting or by the Board of Directors if the General Meeting has granted a Board authorisation which allows for this. Any resolution proposed by the Board to set aside pre-emption rights will be objectively justifiable taking into consideration the common interests of the Company and its shareholders, and the basis for such deviation will be publicly disclosed through a stock exchange notice from the Company. Deviations from Section 4 of the Corporate Governance Code: None 5. Shares and negotiability The Companys shares are listed on Oslo Stock Exchange and are freely transferable. The Company’s Articles of Association do not place any restrictions on owning, trading or voting for shares in the Company. Deviations from Section 5 of the Corporate Governance Code: None 6. General Meetings Notices convening the Company’s General Meetings are submitted and announced in accordance with applicable law and stock exchange regulations. Comprehensive documentation relating to the items on the agenda are prepared and made available on the Company’s website no later than 21 days prior to the General Meeting. Shareholders who wish to participate in the General Meeting must notify the Company within the dead- line specified in the notice. The deadline is set at close to the date of the General Meeting as possible, but not earlier than 5 days before the date of the General Meeting. In accordance with the rules of the Public Limited Liability Companies Act, Cloudberry will facilitate for electronic participation in General Meetings, unless the Board have a justifiable cause to resolve otherwise. In accordance with the Articles of Association, the Board of Directors may resolve that shareholder may cast their votes in writing prior to the company’s General Meetings. Such votes can also be cast by use of electronic communication. The permission to cast an advance vote requires the presence of an adequate method for authenticating the sender. The Board of Directors determines whether an adequate method is present prior to each General Meeting. The Board of Directors may adopt more detailed guidelines for advance voting. It will be stated in the notice of each General Meeting whether advance voting is permitted and which guidelines, if any, are resolved for such voting. Shareholders who are unable to attend general meetings may vote by proxy. A dual language proxy form covering each individual matter on the agenda is included in the notice convening the general meeting. The Company oers shareholder who are not able to attend the general meeting the possibility of issuing a proxy to the chairman who will then represent and vote for the shareholder at the general meeting. According to the Corporate Governance Code, the Board should ensure that the general meeting may elect an independent person to chair the meeting. Cloudberry will facilitate for this for future general meetings. Cloudberry Annual report 2021 Corporate Governance 82 Cloudberry intends to have representatives of the Board of Directors present at the Company’s General Meetings. However, the Company will normally not have the entire Board of Directors participate as this is considered unnecessary. This represents a deviation from the Code of Practice which states that arrangements shall be made to ensure participation by all directors. The chairman of the nomination committee will be present at the Company’s General Meetings where matters prepared by the nomination committee will be dealt with. Cloudberry facilitates that shareholders may cast votes for each individual matter on the agenda, including each individual candidate nominated for election. Deviations from Section 6 of the Corporate Governance Code: The Corporate Governance Code recommend that all members of the Board attend the general meetings of the Company. Not all board members are present at every general meeting of the Company. 7. Nomination Committee Section 8 of the Articles of Association prescribes that the Company shall have a Nomination Committee. The Nomination Committee is elected by the General Meeting for a period of two years, unless the General Meeting resolves a shorter period. The members of the Nomination Committee may be re-elected. The current members of the Nomination Committee are: · Morten S. Bergesen (Chairman) · Kim Wahl · Henrik Lund The composition of the Nomination Committee shall reflect the interests of all shareholders and ensure independence from the Board of Directors and the executive management. Pursuant to the Corporate Governance Code adopted 14 October 2021, the Nomination Committee shall not include any execu- tive personnel or member of the Company’s Board of Directors. The current Nomination Committee was elected when the Corporate Governance Code prescribed that up to one member of the Board of Directors could be a member of the Nomination Committee if such member did not oer himself for re-election to the Board of Directors. Morten S. Bergesen, which is up for election in 2022, has informed the Company that he will not be available for re-election to the Board of Directors. The remuneration of the Nomination Committee is determined by the General Meeting. The Nomination Committee shall submit its rec- ommendations to the General Meeting regarding election of the chairperson and shareholder elected members to the Board of Directors, as well as remu- neration to the members of the Board of Directors. The Nomination Committee’s recommendations shall address how each of the recommended candidates will attend to the Company’s interests, including with respect to qualifications, capacity and independence. The objectives, responsibilities and functions of the Committee are further described in the “The Nomination Committee Policy”, which were adopted by the general meeting on 17 June 2020. The policy is available on the Company’s website. Information about the composition of the Nomination Committee and the deadline for shareholders to propose candidates for election, is communicated to the Company’s shareholders at www.cloudberry.no. Deviations from Section 7 of the Corporate Governance Code: The Corporate Governance Code recommends that the Nomination Committee should not include any member of the Company’s Board of Directors. The Corporate Governance Code recommends that the Nomination Committee should not include any member of the Company’s Board of Directors. Morten S. Bergesen’s board term expires in 2022 and he has informed the Company that he will not be put forward for re-election. Following this there will be no deviation from the Corporate Governance Code. 8. Board of directors: Composition and Independence Pursuant to Section 5 of the Articles of Association, the Company’s Board of Directors shall consist of between three and eight shareholder elected mem- bers. The current Board of Directors of Cloudberry has five members, consisting of two women and three men. 83Cloudberry Annual report 2021 Corporate Governance All members are elected for a term of two years and may be re-elected. The chairperson is elected by the General Meeting. Cloudberry encourages the Board members to hold shares of the Company and has established a separate share purchase program for this purpose. According to the program the Board members use 30% of the fixed gross remuneration (prior to tax) per year to acquire shares in the Company. The shareholdings of members of the Board as of 31 December 2021 are set out in note 13 of Cloudberry’s consolidated financial statements. Further, the composition of the Board of Directors, and information about the Board members’ back- ground and qualifications is detailed in the section “Board of Directors” of the annual report for 2021. The composition of the Board of Directors ensures that it can attend to the common interest of all shareholders and meets the Company’s need for expertise, capacity and diversity. The Board of Directors evaluates its own work on an annual basis to ensure that it functions eciently. Detailed infor- mation regarding meeting attendance, see section 9 The Work of the Board of Directors in this report. The majority of the shareholder elected members are considered independent of executive manage- ment and material business contacts and minimum two Board members are independent of the Company’s main shareholders. The annual report for 2021 states which members of the Board that are deemed to be independent. None of the members of the Board of Directors are part of Cloudberry’s executive management team, but the Chief Executive Ocer regularly attends the Board of Directorsmeetings. Deviations from Section 8 of the Corporate Governance Code: None 9. The Work of the Board of Directors The Board of Directors emphasises maintaining a high standard of corporate governance. The Board of Directors is responsible for the over-all management of the Company and supervises the Companys day-to-day management and overall activities of the Company. The Board of Directors has implemented sepa- rate “Instructions for the Board of Directors” and “Instructions for the CEO”. These instructions provide detailed and clear allocation of the responsibilities and duties of the Board of Directors and the Chief Executive Ocer. The meetings of the Board of Directors have empha- sised the Company’s activities, position, financial and operational developments, and objectives of the Company with its strategy and implementation. The Board of Directors has established an annual meeting schedule based on quarterly milestones and duties. The Board of Directors also prepares for general meetings. The Board of Directors had 18 meetings during 2021. To secure an independent val- uation without related parties on Board issues, the Chair of the Board Fank J. Berg did not participate in the meetings of the Board related to the Captiva transaction as he had indirect ownership in Capitva. The Board of Directors performance is evaluated annually, and the evaluation is made available to the Nomination Committee. Transactions with close associates The Board of Directors shall ensure that all transac- tions between the Company and close associates are approved by the Board and are in compliance with Sections 3-8 and 3-9 of the Public Limited Liability Companies Act. Any such agreements must be balanced and not give concern for potential conflicts of interests with the Company. If the Company enters into any agreement exceed- ing a fair market value of NOK 100 000 with a share- holder, a shareholder’s parent company, members of the Board of Directors, executive personnel, or any of their close associates an independent third party valuation shall be obtained. Any transactions with close associates shall be described in the director’s annual report. The Audit Committee: The Company’s Audit Committee is governed by the Norwegian Public Limited Liability Companies Act and a separate instruction adopted by the Board of Directors. The members of the Audit Committee are appointed by and among the members of the Board of Directors. The majority of the members of Cloudberry Annual report 2021 Corporate Governance 84 the Audit Committee are independent. The com- mittee performs tasks related to financial reporting, the annual accounts and internal control. The Audit Committee has contact with the Company’s auditor. It will be held minimum four Audit Committee meet- ings per year. The Compensation Committee: The Compensation Committee was appointed by and among the members of the Board of Directors in the beginning of 2021. All its members are independ- ent of the Company’s executive management. The Compensation Committee recommends, oversees, and approves compensation and remuneration of the company’s executive management, and other matters concerning the management. The Environmental, Social and Governance Committee (ESG) Committee: The Company has established an ESG Committee consisting of two Board members and the Chief Sustainability Ocer of the Company. The commit- tee’s purpose is to guide and support the Company’s work, anchor its commitment, and ensure high stand- ards on both strategic and operational levels within environmental, social and governance aspects. Code of Conduct: Cloudberry’s Code of Conduct is the basis for the Company’s ethical culture. Its purpose is to ensure that the Company’s business and investments are conducted in a highly ethical manner. The Code of Conduct is revised and audited by the Board of Directors annually. The Code of Conduct applies to all employees in the Cloudberry Group, the Board of Directors, and other representatives of the Company. Every employee of Cloudberry shall act in compliance with the Code of Conduct. The Code of Conduct shall inter alia ensure that the Board members and the executive personnel make the Company aware of any material interest they may have in matters to be considered by the Board. Cloudberry is committed to achieving a sustain- able development in our operations in all general terms. Business opportunities aimed at promoting a sustainable future shall be a part of Cloudberry’s strategic assessments, and we will leverage our competence and expertise towards contributing to developing a sustainable future. Deviations from Section 9 of the Corporate Governance Code: None 10. Risk Management and Internal Control Prior to every Board of Directors meeting and when needed the CEO reports in writing to the Board of Directors on the Company’s position and financial status and performance. The Board of Directors is responsible for the Company’s risk management and internal control systems that apply to the business activities. Through the CEO, the Board of Directors is ensuring risk and corporate man- agement and that Cloudberry complies with the Companies Act and other applicable laws and regulations in the regions Cloudberry operates, according to sound ethical principles in terms of administrative, technical, business and personnel matters. Operational and market risk All processes throughout the value chain are exposed to operational risk. A key operational risk is related to the operating performance of the produc- ing assets, but there is also risk relating to the pro- cess of transitioning development projects from the backlog and pipeline stage. Even though the Group has a solid project pipeline, finalizing the projects is dependent on a number of factors such as project availability, local authority approvals, environmental impact, suppliers, financing, power prices and the regulatory framework in the relevant market. Market risk is mainly related to the attractiveness of small-scale hydropower projects and wind projects in the Nordic markets, as derived from the devel- opment in power prices relative to the prices of key construction components. Cloudberry manages the risk through close follow-up and monitoring of operating assets and developing projects. Procedures and guidelines for the business are implemented and reviewed regularly. Political risk The Groups activities are subject to the laws and regulations applied by the governmental authorities in connection with obtaining licenses and permits, government guarantees, and other obligations regulated by law in each country. Regulatory author- ities exercise considerable discretion in matters of enforcement and interpretation of applicable laws, regulations and standards, the issuance and renewal of licenses and permits, capital transfer restrictions and in monitoring licensees’ compliance with the terms thereof. Cloudberry emphasises the uncertainty these factors have when making 85Cloudberry Annual report 2021 Corporate Governance investment decisions and continuously monitors changes in the political landscape and includes this in the relevant discussions. The power industry is a highly regulated sector, and thus subject to political risk. The high power prices observed during H2 2021 and so far in 2022 has increased political calls for further regulations of the power market in both countries the Group operates in. Political and public support for wind and hydro projects fluctuates over time, and may aect the Group’s ability to obtain concessions for both or either technologies. In Norway, there has been an eective ban on filing for new land-based wind power projects since 2019, and the new set of concession regulations are still not in eect by the time of writing. There is therefore unclear how the Norwegian wind power market will develop in the years to come. Financial risk Through its business activities, Cloudberry is mainly exposed to market risks including power prices, interest rate risk, currency risk, credit risk and liquidity risk. Financial risk management is based on the objective of reducing negative cash flow eects and, to a lesser extent, negative accounting eects of these risks. Currency and interest rate risks are regulated by means of mandates and managed by using hedging instruments. Cloudberry’s interest rate exposure is related to its debt portfolio and managed based on a balance between keeping interest cost low over time and contributing to stabilise the group’s cash flows. The construction of the Group’s project will normally be financed with a combination of equity and debt. As a result, any increase of interest rates will lead to higher financing costs, which in turn reduces the Group’s profitability. Subsequently, the Group is dependent on external financing. If the Group is not able to obtain required financing on a timely basis and on attractive terms, the result could be lost business opportunities, shortened lifetime of current assets and/or that the Group is forces to realise its interest in certain projects. Fluctuations in exchange rates could aect the Group’s cash flow and financial position. The Group presents its financial statements in NOK. However, power is traded at Nord Pool, where EUR is the trading currency. The Group is also exposed to SEK through its operations in Sweden, hence the Group is exposed to currency risk through fluctuations in exchange rates between NOK, SEK and EUR. Covid-19 During 2021, Covid-19 continued to impact operations across the Group. Travel bans, mandatory quaran- tine and disruptions to the supply chain has, and may continue to, result in delayed deliveries from the Group’s suppliers. It is currently not possible to predict the long-term consequences for the Group, but there is a risk that the ongoing pandemic will result in increased cost particularly to the Group’s development projects. For further information on the Company’s financial risk and risk management, reference is made to the Group Financial Statement note 6 Covid-19, note 7 Market related risks, note 8 Commercial and opera- tional risks and note 9 Financial risks. Deviations from Section 10 of the Corporate Governance Code: None 11. Remuneration of the Board of Directors Cloudberry has established guidelines for salary and other remuneration for executive personnel, which also covers guidelines for remuneration to the Board of Directors. The guidelines have been prepared in accordance with Section 6-16a of the Public Limited Companies The remuneration of the Board of Directors is resolved by the Company’s General Meeting and should reflect the Board of Directors’ responsibly, experience, time spent and the complexity of the Companys activities. The Board of Directors’ remu- neration is not linked to the performance and the Board of Directors hold no options in the Company. The Board of Directors members who participate in the Audit Committee, the Compensation Committee and the ESG Committee receive separate compen- sation for these appointments, which are approved separately by the Company’s General Meeting. Detailed information on the remuneration of the Board of Directors can be found in the Financial Statements, note 13. Cloudberry Annual report 2021 Corporate Governance 86 As a main rule, the members of the Board of Directors shall not have any specific assignments for the Company in addition to their appointment as members of the Board of Directors. The Chairman of the Board was however engaged on a temporary assignment related to assist the Company with development of the shallow-water project, Stenkalles Grund. This reason for engaging the chairperson for this assignment is that the chairperson has knowl- edge of the project since inception. This engage- ment has been fully disclosed and approved by the Board of Directors. The assignment was terminated April 2021. Further information about the engage- ment can be found in note 27 Transaction with related parties of the annual report for 2021. Deviations from Section 11 of the Corporate Governance Code: The Company’s chairperson, Frank J. Berg, has been engaged for a temporary assignment related to Cloudberry’s shallow-water project, Stenkalles, in addition to his engagement as chairperson. 12. Salary and other Remuneration for Executive Personnel Cloudberry has established guidelines for salary and other remuneration for executive personnel. The guidelines have been prepared in accordance with Section 6-16a of the Public Limited Companies Act, with applicable regulations on guidelines and reporting of remuneration for leading personnel. The main purpose of the guidelines is to allow sharehold- ers to influence the parameters determining salary and other kinds of remuneration to executive per- sonnel and to create a culture for remuneration that promotes the Company’s long-term interests and strategy and the Company’s financial sustainability, while at the same time ensuring the shareholders’ influence. The guidelines have been prepared by the Board of Directors and was approved at the extraordinary General Meeting held 17 June 2021. The Guidelines are applicable to remuneration accrued from 1 January 2021. By remuneration means all consid- eration received by an individual, including fixed salary, performance-based pay and other benefits. The remuneration for leading personnel is based on attracting and retaining relevant expertise to further develop the Company. The guideline sets out an absolute limit for performance-related remuneration. More detailed information about the individual remuneration of the CEO and other leading person- nel is provided in the Company’s annual report note 13. Employee benefits and share based payments and the Company’s guidelines on the salary and other remuneration for executive personnel will be published after the General Meeting.in 2022. Deviations from Section 12 of the Corporate Governance Code: None 13. Information and Communications The Board of Directors adopted an Investor Relations policy with a description of the Company’s investor information and investor relations policy. The policy clarifies roles and responsibilities related to financial reporting and contact with the shareholders and the investor market. This is to ensure transparency and equal treatment of the stakeholders. Cloudberry publishes its financial calendar annually with a list of dates for important events such as Annual General Meetings and financial reports. The Company practices a silent period of two weeks ahead of publication of financial statements. Cloudberry provides all stock exchange announce- ments, financial reports and presentations, and other IR information at the Company’s web site www. cloudberry.no. and the information is also posted at Oslo Børsocial news channel www.newsweb. oslobors.no. Cloudberry gives presentations in connection with the financial reporting, and these presentations are broadcasted digitally. Deviations from Section 13 of the Corporate Governance Code: None 14. Take-Overs The instructions of the Board of Directors of Cloudberry contain guidelines on how the Board of Directors shall act in the event of a take-over bid. In such case, the Board of Directors shall ensure that the shareholders’ interests are safeguarded and that all shareholders are treated equally, and that the Company’s activities are not unnecessarily interrupted. The Board of Directors shall further ensure that all shareholders receive sucient infor- mation and are given sucient time to assess the relevant oer. The Board of Directors is responsible 87Cloudberry Annual report 2021 Corporate Governance of ensuring that the shareholders are informed in time to assess the oer. The Board of Directors shall not prevent or oppose any takeover bids for the Company’s activities or shares but will make a recommendation as to whether the shareholders should accept the bid. Deviations from Section 14 of the Corporate Governance Code: None 15. Auditor The Company’s external auditor is Ernst & Young AS. The Board of Directors require the Company’s auditor to annually present to the Audit Committee the main features of the plan for the audit of the Company. The auditor participates in meetings of the Board of Directors and the Audit Committee that deal with the annual accounts. At these meetings the auditor report on any material changes in the Company’s accounting principles and key aspects of the audit, comment on any material estimated accounting figures and report all material matters on which there has been disagreement between the auditor and the Company’s executive management. Further, the Board of Directors has an annual review of the Company’s internal control procedures with the auditor, including identified weaknesses and proposals for improvement. The Board of Directors has established guidelines in respect of the use of the auditor by the executive management for services other than audit. The remuneration to the auditor is subject to approval by the annual General Meeting. The Board of Directors will report to the General Meeting details of fees for audit work and any fees for other assignments. Deviations from Section 15 of the Corporate Governance Code: None Cloudberry Annual report 2021 <Chapter name> 88 89Cloudberry Annual report 2021 <Chapter name> Cloudberry Annual report 2021 Financial statements 90 Consolidated financial statements Group Consolidated statement of profit or loss 92 Consolidated statement of comprehensive income 93 Consolidated statement of financial position 94 Consolidated statement of cash flows 96 Consolidated statement of changes in equity 97 Notes to the Consolidated financial statements Group 98 General 98 Note 1 General information 98 Note 2 General accounting policies and principles 98 Note 3 Key accounting estimates and judgements 107 Note 4 Business segments 108 Note 5 Business combinations and other transactions 111 Key risks and financial instruments 115 Note 6 Covid 19 115 Note 7 Market related risks 116 Note 8 Commercial and operational risks 117 Note 9 Financial risks 118 Note 10 Financial instruments 119 Note 11 Hedge accounting 121 91Cloudberry Annual report 2021 Financial statements Statement of profit or loss and comprehensive income 123 Note 12 Sales revenues and other operating income 123 Note 13 Employee benefits and share based payments 124 Note 14 Other operating expenses 128 Note 15 Financial items 129 Note 16 Income tax expense 130 Statement of financial position 132 Note 17 Property, plant and equipment 132 Note 18 Inventory 135 Note 19 Impairment 137 Note 20 Investments in associated companies 138 Note 21 Cash, cash equivalents and corporate funding 141 Note 22 Share capital and shareholder information 142 Note 23 Long term debt 143 Note 24 Provisions, guarantees and other contractual obligations 145 Note 25 Lease agreements 147 Other information 149 Note 26 Earnings per share 149 Note 27 Transactions with related parties 149 Note 28 List of subsidiaries and equity accounted companies 151 Note 29 Subsequent events 152 Cloudberry Annual report 2021 Financial statements 92 Consolidated statement of profit or loss 1 January - 31 December NOK 1 000 Note 2021 2020 Sales revenue 12 35 152 3 633 Other income 12 5 746 7 Total revenue 40 898 3 640 Cost of goods sold (5 447) (143) Salary and personnel expenses 13 (28 106) (17 419) Other operating expenses 14 (55 332) (12 343) Operating expenses (88 885) (29 905) Net income/(loss) from associated companies 20 16 373 (3 556) EBITDA (31 615) (29 821) Depreciation and amortizations 17 (9 746) (3 289) Operating profit (EBIT) (41 361) (33 111) Financial income 10, 15 6 420 984 Financial expenses 10, 15 (28 706) (2 125) Profit/(loss) before tax (63 648) (34 252) Income tax expense 16 609 387 Profit/(loss) after tax (63 038) (33 865) Profit/(loss) attributable to: Equity holders of the parent (63 038) (33 865) Non-controlling interests - - Earnings per share (NOK): Continued operation - Basic 26 (0.40) (0.87) - Diluted 26 (0.40) (0.87) 93Cloudberry Annual report 2021 Financial statements Consolidated statement of comprehensive income 1 January - 31 December NOK 1 000 Note 2021 2020 Profit for the year (63 038) (33 865) Other comprehensive income Items which will not be reclassified over profit and loss - - Items which may be reclassified over profit and loss in subsequent periods Net movement of cash flow hedges 11 2 861 1 163 Income tax eect 11 (616) (256) Exchange dierences (9 052) (2 542) Net other comprehensive income (6 807) (1 635) Total comprehensive income/(loss) for the year (69 845) (35 500) Total comprehensive income/(loss) attributable to: Equity holders of the parent company (69 845) (35 500) Non-controlling interests - - Cloudberry Annual report 2021 Financial statements 94 Consolidated statement of financial position NOK 1 000 Note 31.12.2021 31.12.2020 ASSETS Non-current assets Property, plant and equipment 17 1 009 123 58 426 Goodwill 19 38 221 36 933 Investment in associated companies 20 677 407 337 080 Financial assets and other non-current assets 10 10 425 2 358 Total non-current assets 1 735 175 434 797 Current assets Inventory 18 153 575 196 029 Accounts receivable 12 033 2 828 Other current assets 24 102 674 158 081 Cash and cash equivalents 21 1 114 934 605 126 Total current assets 1 383 215 962 064 TOTAL ASSETS 3 118 391 1 396 861 95Cloudberry Annual report 2021 Financial statements Consolidated statement of financial position NOK 1 000 Note 31.12.2021 31.12.2020 EQUITY AND LIABILITIES Equity Share capital 22 58 811 26 266 Share premium 22 2 676 075 1 061 675 Total paid in capital 2 734 886 1 087 941 Other equity (98 688) (33 230) Non-controlling interests - - Total equity 2 636 199 1 054 712 Non-current liabilities Interest-bearing loans and borrowings 23, 11 294 087 26 440 Non current lease liabilities 25 3 416 3 296 Provisions 24 10 753 15 868 Deferred tax liabilities 16 83 055 13 668 Total non-current liabilities 391 311 59 271 Current liabilities Interest-bearing short term financial liabilities 24 10 105 236 767 Current lease liabilities 25 1 167 1 105 Accounts payable and other current liabilities 24 38 289 26 161 Provisions 24 41 320 18 845 Total current liabilities 90 881 282 878 Total liabilities 482 192 342 150 TOTAL EQUITY AND LIABILITIES 3 118 391 1 396 861 Oslo, 22 March 2022 The Board of Directors of Cloudberry Clean Energy ASA Frank J. Berg Chair of the Board Morten Bergesen Board member Petter W. Borg Board member Benedicte Fossum Board member Liv Lønnum Board member Anders J. Lenborg CEO Cloudberry Annual report 2021 Financial statements 96 Consolidated statement of cash flows NOK 1 000 Note 1.1.-31.12.2021 1.1.-31.12.2020 Cash flow from operating activities Profit/(loss) before tax (63 648) (34 252) Depreciations and amortizations 17 9 746 3 289 Write down, project inventory 18 3 010 - Net income from associated companies 20 (16 373) 3 556 Share based payment - non cash to equity 4 388 1 251 Net interest paid/received 8 531 1 656 Unrealised foreign exchange (gain)/loss - (1 514) Change in inventories due to capitalized salaries and other expenses (9 245) (6 100) Change in accounts payable 12 369 6 128 Change in accounts receivabe (8 791) 5 477 Change in other short term assets and liabilities (10 710) 16 195 Net cash flow from operating activities (70 722) (4 314) Cash flow from investing activities Interest received 15 653 984 Investments in property, plant and equipment 17 (179 501) (2 842) Acquisition of shares in subsidiaries, net liquidity outflow 5 (318 262) (11 690) Investments in associated companies 20 (331 806) (340 637) Net cash flow from (used in) investing activities (828 916) (354 184) Cash flow from financing activities Payment to escrow account 24 (84 828) (152 422) Transfer from escrow account 24 152 422 - Proceeds from new term loans 23 226 348 - Repayment of term loan 23 (282 646) (28 621) Repayment of short-term interest-bearing liabilities 24 (236 767) 236 767 Interest paid other than lease 15 (9 029) (2 394) Payment on lease liabilities - interest 25 (155) (153) Repayment on lease liabilities 25 (974) (750) Share capital increase 1 646 945 905 928 Net cash flow from financing activities 1 411 316 958 355 Total change in cash and cash equivalents 511 679 599 856 Eect of exchange rate changes on cash and cash equivalents (1 872) 47 Cash and cash equivalents at start of period 605 126 5 223 Cash and cash equivalents at end of period 1 114 934 605 126 SIGNIFICANT ACCOUNTING POLICIES The cash flow statement has been prepared using the indirect method. Operating activities Changes in working capital comprise of inventory, short-term interest-free receivables and short-term interest-free liabilities. Eects related to capital expenditures, unrealised changes or reclassifications are not included in changes in working capital. Investing activities Acquisition/divestment of shares includes cash and cash equivalents in the investee that are recognised/ divested at the transaction date. Hence, this is presented net together with the cash consideration paid or received. Financing activities Interest payments from interest rate derivatives, which are used to manage the Group’s debt port- folio, are presented as a part of interest paid. Following the implementation of IFRS 16, both the principal portion and the interest portion of payments of lease liabilities are included in financing activities as repayment of debt and interest paid respectively. 97Cloudberry Annual report 2021 Financial statements Consolidated statement of changes in equity Attributable to parent company equity holders Paid in capital Other Equity Note Share capital Share premium Share based payment Cash flow hedge reserves Foreign currency translation reserve Retained earnings Total other equity Total Non- controlling interests Total equity Equity as at 01.01 2020: 950 7 800 - - - (3 921) (3 921) 4 829 - 4 829 Sharecapital increase 25 316 1 053 875 - - - - - 1 079 191 4 939 1 084 130 Share based payments in the year - - 1 251 - - - 1 251 1 251 - 1 251 Loss for the period - - - - - (33 865) (33 865) (33 865) - (33 865) Other comprehensive income - - - 907 (2 542) - (1 635) (1 635) - (1 635) Total comprehensive income - - - 907 (2 542) (33 865) (35 500) (35 500) - (35 500) Transaction with non- controlling intrest - - - - - 4 041 4 041 4 041 (4 041) - Transfer to other equity - - - - - 898 898 898 (898) - Equity as at 31.12 2020 26 266 1 061 675 1 251 907 (2 542) (32 847) (33 230) 1 054 712 - 1 054 712 Equity as at 01.01 2021: 26 266 1 061 675 1 251 907 (2 542) (32 847) (33 230) 1 054 712 - 1 054 712 22 Sharecapital increase 32 545 1 614 400 - - - - - 1 646 945 - 1 646 945 13 Share based payments in the year - - 4 388 - - - 4 388 4 388 - 4 388 Loss for the period - - - - - (63 038) (63 038) (63 038) - (63 038) Other comprehensive income - - - 2 245 (9 052) - (6 807) (6 807) - (6 807) Total comprehensive income - - - 2 245 (9 052) (63 038) (69 845) (69 845) - (69 845) Transaction with non- controlling intrest - - - - - - - - - - Transfer to other equity - - - - - - - - - - Equity as at 31.12 2021 58 811 2 676 075 5 639 3 152 (11 594) (95 885) (98 688) 2 636 199 - 2 636 199 Nature and purpose of reserves included in total equity Share premium Share premium includes net share premium paid as part of capital increases. Other equity Other equity includes share-based payment transaction reserve used to recognise the value of equity-settled and share- based payment transactions provided to employees, including key management personnel, as part of their remuneration. It also includes hedging reserves charged to other comprehensive income and currency translation dierences, together with retained earnings. Foreign currency translation reserve The foreign currency translation reserve comprises all foreign currency dierences arising from the translation of the financial statements of foreign operations. Hedging reserve The hedging reserve includes mark-to-market revaluation reserve after tax on derivatives used in the Group’s cash flow hedging. Cloudberry Annual report 2021 Financial statements 98 Notes to the Consolidated financial statements Group General Note 1 General information Corporate information Cloudberry Clean Energy ASA (“Cloudberry”), its sub- sidiaries and investments in associated companies (“the Group”) is a Nordic renewable power producer and developer. The Company has an integrated business model across the life cycle of hydro- and wind power plants including project development, financing, construction (normally outsourced), ownership, management and operations. Cloudberry Clean Energy ASA is incorporated and domiciled in Norway. The address of its registered oce is Frøyas gate 15, NO-0273 Oslo, Norway. Cloudberry Clean Energy ASA was established on 10 November 2017. The Company is listed on Oslo Stock Exchange main list (ticker: CLOUD). The consolidated financial statements for 2021 was approved by the Board of Directors on 22 March 2022. Note 2 General accounting policies and principles Basis for preparation Cloudberry’s consolidated financial statements have been prepared in accordance with International Financial Reporting Standards (IFRS) and inter- pretations from International Financial Reporting Interpretations Committee (IFRIC) as adopted by the EU. The statement of profit or loss, statement of com- prehensive income, statement of financial position, statement of cash flow, statement of equity and notes provide comparable information in respect of the previous period. The Group was formed through the business combination that took place as of 15 February 2020. Presentation and classification of items in the financial statements is consistent for the periods presented. Application of the accounting policies by the subsidiaries has been changed where neces- sary to ensure consistency with Group accounting policies. The functional currency of the companies in the Cloudberry Group is determined based on the nature of the primary economic environment in which the company operates. This is the Norwegian krone (NOK), the Swedish krone (SEK) and the Euro (EURO). The functional currency of the parent com- pany Cloudberry Clean Energy ASA and the pres- entation currency of the Group is Norwegian kroner (NOK). Cloudberry is granted an exception from the Norwegian tax authorities from the requirement to report in Norwegian and will present the annual report in English. The Groups consolidated financial statement is prepared on a going concern basis. When assessing this assumption, management has assessed all available information about the future. This com- prises information about net cash flows from existing operations, debt service and obligations. After mak- ing this assessment, management has a reasonable expectation that the Group has adequate resources to continue its operational existence for the foresee- able future. 99Cloudberry Annual report 2021 Financial statements Basis for measurement The consolidated financial statements have been prepared on a historical cost basis, except for derivative financial instruments, financial assets and financial liabilities that are recognised at fair value. Historical cost is generally based on the fair value of the consideration given when acquiring assets and services. The preparation of financial statements in conform- ity with IFRS requires the use of certain accounting estimates. It also requires management to exercise its judgement in the process of applying the Group’s accounting policies and reported amounts of assets and liabilities, income and expenses. Classification as current/non-current The Group presents assets and liabilities in the state- ment of financial position based on current/non-cur- rent classification. An asset is current when it is: · Held primarily for the purpose of trading · Expected to be realised 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 normal operating cycle · It is held primarily for trading · It is due to be settled within twelve months after the reporting period, or · There is no unconditional right to defer the settle- ment of the liability for at least twelve months after the reporting period The Group classifies all other liabilities as non-current. Deferred tax assets and liabilities are classified as non-current. Basis and principles for Consolidation The consolidated financial statements comprise the financial statements of the parent company Cloudberry Clean Energy ASA and its subsidiaries, see note 28. Subsidiaries Subsidiaries are all entities (including structured entities) over which Cloudberry Group has control. Cloudberry Group controls an entity when the group is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to aect those returns through its power to direct the activities of the entity. Subsidiaries are consolidated from the date on which control is transferred to the group. Subsidiaries are no longer consolidated from the date when control ceases. Profits and losses resulting from intercompany trans- actions have been eliminated, as well as unrealised gains on transactions between group companies. Unrealised losses are eliminated unless the trans- action provides evidence of an impairment of the transferred assets. Investments in associated companies Associated companies are companies where the Group has significant influence. Significant influence is the power to participate in the financial and oper- ating policy decisions of the investee, but not control or joint control over those policies. Investments in associated companies are recognised in the con- solidated accounts using the equity method and presented as non-current assets. Equity method Under the equity method of accounting, the invest- ments are initially recognised at cost and adjusted thereafter to recognise the Group’s share of the post-acquisition profit or loss. Dividends received or receivable from associated companies, are recog- nised as a reduction of the carrying amount of the investment. Unrealised gains or transactions between the Group and the associated companies are eliminated to the extent of the Groups interest in the entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the assets transferred. Accounting policies of equity accounted investees have been changed were necessary to ensure consistency with the policies adopted by the Group. Cloudberry Annual report 2021 Financial statements 100 Equity accounted investments are reviewed each period to determine whether there is any objective evidence that the net investment is impaired. Goodwill relating to the associated company is included in the carrying amount of the investment and is not tested for impairment separately. Transactions with non-controlling interests Transactions with non-controlling interests, without loss of control, are accounted for as equity transac- tions. When acquiring shares from a non-controlling interest the dierence between the consideration and the shares proportionate value of recognized net assets in the subsidiary as correction of equity in the parent company owners. Business combinations In order to consider an acquisition as a business combination, the acquired asset or group of assets must constitute a business, an integrated set of operations and assets conducted and managed for the purpose of providing a return to the investors. Acquired businesses are included in the financial statements from the transaction date. The trans- action date is defined as the date of which the company achieves control over the financial and operating assets. Comparable figures are not adjusted for acquired, sold, or liquidated businesses. The acquisition method is used to account for all business combinations. The consideration is meas- ured at the fair value of any transferred assets, liabil- ities or issued equity instruments. 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 recognises 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. If the consideration transferred (including any non-controlling interests and the fair value of pre- vious assets) exceeds the fair value of identifiable net assets acquired, this is recognised as goodwill. If those amounts are less than the fair value of the net identifiable assets of the business acquired, the dierence is recognised directly in profit or loss as a bargain purchase gain. If the business combination is achieved in stages, the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is remeasured to fair value at the acquisition date. Any gains or losses arising from such remeasurement are recognised in profit or loss. Goodwill is not depreciated but tested at least annu- ally for impairment. In connection with this, goodwill is allocated to the cash-generating units (CGUs) or groups of CGUs that are expected to benefit from the synergy eect of the acquisition. In accordance with IFRS 3, the estimation of fair value and goodwill may be adjusted up to 12 months after the takeover date if new information has emerged about the facts and circumstances that existed at the time of takeover. The Group makes use of the opportunity to adjust the initial purchase price allocation if necessary. Acquisition-related costs, except costs related to issue of debt or equity securities, are expensed as incurred. Segment Business segments are reported in a manner consistent with how the Group internally follows up the business. The Group’s segment financials are reported on a proportionate basis. The key dier- ences between the proportionate and the consoli- dated IFRS financials are that associated companies are included in the financial accounting lines, the profit or loss statement and share of assets and net debt, with the respective proportionate ownership share, while in the consolidated financials associ- ated companies are consolidated with the equity method. This is how the internal financial reporting to the Group’s chief operating decision maker, defined as the Executive Management team, is prepared. The business segments are determined based on the dierences in the nature of their operations. Cloudberry manages its operations in three seg- ments, production, development and corporate. After the acquisition of Captiva in January 2022, a fourth business segment, operations (representing the Captiva business ) will be established and reported on from 2022. Foreign currency translation Functional and presentation currency The Group’s consolidated financial statements are presented in NOK, which is also the parent Company’s functional currency. For each entity, the Group determines the functional currency, and items 101Cloudberry Annual report 2021 Financial statements included in the financial statements of each entity are measured using that functional currency. The functional currency of the subsidiaries is the same as their local currency. Transactions in foreign currencies are initially recorded by the Group’s entities at their respective functional currency spot rates at the date the trans- action first qualifies for recognition. Monetary assets and liabilities denominated in foreign currencies are translated at the functional currency spot rates of exchange at the reporting date. Dierences arising on settlement or translation of monetary items are recognised in profit or loss. Non-monetary items that are measured in terms of historical cost in a foreign currency are translated using the exchange rates at the dates of the initial transactions. On consolidation, assets and liabilities of foreign entities with functional currencies other than NOK, are translated into NOK at the rate of exchange prevailing at the reporting date and their income statements are translated at annual average exchange rates. The exchange dierences arising on translation for consolidation are recognised in other comprehensive income. On disposal of a foreign operation, the component of other comprehensive income relating to that particular foreign operation is recognised in profit or loss. Revenue recognition The Group accounts for revenue in accordance with IFRS 15 Revenue from Contracts with Customers and applies the five-step method to all revenue streams. The Group’s sales revenues are divided into two categories 1. Sale of hydro and wind generated electricity delivered to the grid, el-certificates and guaran- tees of origin (GoO). 2. Sale of management services within project development or management of producing power assets. The revenues from sale of power (electricity gen- erated from hydro and wind, and related products such as el-certificates and GoO) bear the character- istic of delivering power at a certain price to the grid. The performance obligation is to deliver a series of distinct goods (power or related products) and the transaction price is the consideration Cloudberry expects to receive, at either spot price, regulated price or contract price. The performance obligation is satisfied over time which entails that revenue should be recognised for each unit delivered at the transaction price. Cloudberry applies a practical expedient under IFRS 15 whereby the revenue from power for most of the contracts is recognised at the amount of which the entity has a right to invoice. The right to invoice power arises when power is produced and delivered, and the right to invoice the consideration will normally correspond directly with the value to the customer. The right to invoice for el-certificates and guarantees of origin arise when the certificates are delivered. Revenue from management services is recognized when the service is preformed, and the Group has an unconditional right to the consideration settle- ment. When the performance obligation is fulfilled and there is an unconditional right to the consid- eration, this is presented separately in the balance sheet as a receivable. When determining the transaction price for each element in the contract, it is adjusted for the time value of money if the timing of payment agreed to by the parties provides the customer with a significant benefit of financing. The Group applies a practical approach, and the consideration is not adjusted for a financing component if the period between the transfer for the goods or service and the payment is less than a year. Other income Income in the Develop segment is mainly related to the sale of ready-to-build develop projects and is accounted net of inventory costs and presented as other income in accordance with IFRS 10. The pro- jects are often organised in single-purpose-vehicles (SPV) and the net gain and net loss is recognised when control of the project SPV is transferred to the acquirer. Net gain or loss from sale of fixed assets is classified and presented as other income. Government grants Government grants are conditional to own gen- eration of power from certain technologies. This includes el-certificates and guarantees of origin (GoO). The right to receive the grants are obtained at the time of generation. When the el-certificates Cloudberry Annual report 2021 Financial statements 102 and GoO are granted, they are measured at cost and classified as other income and inventory. Cost of government grants is zero. Upon subsequent sales, the sales price is recognised within sales revenues. Share-based compensation Cloudberry has an equity incentive plan for top management and key employees. The programme includes the issue of warrants for shares in the company. The warrants-scheme is accounted for and reported in accordance with IFRS 2. The renumeration is share-based. The fair value of the warrants is measured at grant date using an appro- priate valuation model. In Cloudberry the Black and Scholes model is applied based on the market price to determine the fair value at the grant date. The grant date is determined by the Board of Directors. The fair value of the warrants is recognised as a personnel expense over the duration period, at the same time a corresponding increase in paid in equity is recognised. On each balance date, the Group revises its estimates of the number of warrants that are expected to be exercisable. Any adjustments will be recognised in the income statement and corresponding adjustment to equity. Employer tax is recognised in the profit and loss statement and a provision is recognised in the balance sheet. Inventory Cloudberry inventories consist of development projects and government grants of el-certificates and guarantees of origin (GoO). Inventories are accounted for in accordance with IAS 2 Inventories. According to IAS 2 inventories are measured at the lower of cost and net realisable value. Government grants of el-certificates and GoO are at granting measured and recognised at cost to inventory. Cost of government grants is zero. The develop projects are part of the Develop business segment and are mainly held for trading. In some cases, when a project is ready to build, Cloudberry decides to keep the project to build and own a producing power plant. When Cloudberry makes the final investment decision (FID), the project will be reclassified from inventory to property plant and equipment and power plant under construction. From the point of FID until the project constructed and is a finished and operating power plant it is evaluated when the timing is right for the project to be acquired by the Production segment. Producing power plants are owned and managed in the Production business area. Property, plant and equipment (PPE) Property, plant, and equipment is measured at historical cost less accumulated depreciation and accumulated impairment losses. Land is not depreciated. The initial cost of a PPE asset comprises its pur- chase price or construction cost, any costs directly attributable to bringing the asset into operation, the initial estimate of asset retirement obligation if any, and for qualifying assets, borrowing costs incurred in the construction period. Subsequent costs are included in the asset’s carrying amount or recog- nised as a separate asset, as appropriate, only when it is probable that future economic benefits associ- ated with the item will flow to the group and the cost of the item can be measured reliably. All repairs and maintenance are charged to profit or loss during the reporting period in which they are incurred. If a separate component is damaged and replaced, the component is derecognised and the carrying amount is charged to the profit and loss statement as an impairment loss in the period. The replacement component is capitalized as a new item of PPE. Each component of an item of property plant and equipment with a cost that is significantly in relation to the total cost of the item is depreciated sepa- rately. Depreciation is calculated using the straight- line method to allocate costs over their estimated useful lives. Depreciation of hydro and wind power plants commences when the plant is ready for managements intended use, normally at the date of the grid connection and commissioning. The depreciation period is adapted to the duration of the landowner contract period. The assets’ residual values and useful lives are reviewed annually and adjusted if appropriate. Gains and losses on disposals are determined by compar- ing actual proceeds with the carrying amount. Gains and losses on disposal are included in profit or loss. Capitalisation of borrowing costs Capitalisation of borrowing costs commence when the activities to prepare the asset for its intended use are undertaken and continue to be capitalized until the date in which the development of the relevant asset is complete. All other borrowing costs are recognised in the profit and loss statement in the period which they incur. 103Cloudberry Annual report 2021 Financial statements Asset retirement obligation (ARO) When Cloudberry is obligated to remove an item of property, plant and equipment as well as to restore the site at the date when the operation ceases, an estimate of the asset retirement obligation (ARO, decommissioning obligation) is recognized. The obligation is best estimate of the net present value of the costs that will occur at the closing date. When a provision for ARO is recognised, a corresponding amount is recognised and capitalized as part of the carrying value of the power plant and depreciated over the useful life. The Group have recognised Asset retirement obliga- tion for wind power assets. Asset retirement obliga- tions have not been made for the Group’s current hydro plants. The concessions for the hydro power plants do not have an expiry date, and the useful life of the equipment is estimated to be longer than the lease periods. It is currently assessed that because the power plants would continue to be revenue generating power producing plants, after the end of the lease periods, it is assumed that either the landowners (if the exercise their option to acquire the equipment), or the Company (which have the right to prolong the lease period if option to acquire the equipment is not exercised) will continue the use of the plants and therefore not decommission the equipment. The lease expiry dates are between 40-60 years and the assessment will be updated over the useful life of the power plants and may change so that an asset retirement obligation will be made later, when material. Intangible assets Intangible assets acquired separately are carried at cost less accumulated amortisation and accumu- lated impairment losses. Costs relating to intangible assets, including goodwill, are recognised in the statement of financial position when it is probable that the asset will generate future economic bene- fits and the costs can be measured reliably. Intangible assets with an indefinite useful life, such as goodwill and water rights owned are not amor- tised but are instead tested annually for impairment. Goodwill Goodwill represents the excess of the cost of an acquisition over the fair value of the Group’s share of the net identifiable assets of the acquired business at the date of acquisition. Goodwill is carried at cost less accumulated impairment losses. Goodwill is allocated to cash-generating units for the purpose of the impairment testing. The allocation is made to those cash-generating units or groups of cash-gen- erating units that are expected to benefit from the business combination in which the goodwill arose. Impairment Property, plant and equipment and intangible assets with a definite useful life are tested for impairment to the extent that indicators of impairment exist. Factors that trigger impairment testing include but is not limited to changes in long power price estimates, political changes, underperforming power plants in terms of production or macroeconomic fluctuations. When there are indicators that future earnings cannot justify the carrying value, the recoverable amount is calculated to consider whether an allow- ance for impairment must be made. The recoverable amount is the higher of the asset’s fair value less costs of disposal and its value in use. Previously impaired non-financial assets, except goodwill, are reviewed for possible reversal of the impairment at each reporting date. For the purposes of assessing impairment losses, assets are grouped at the lowest level for which there are separately identifiable cash flows (cash-generating units (CGUs)). CGUs in Cloudberry are identified as follows: Property plant and equipment (Power producing assets) · Hydropower: Power plants sharing the same water flow and/or being subject to the same infrastruc- ture limitation are managed together to optimise power generation. · Wind farms: The individual wind farm. Inventory of projects · The individual project with concession · Groups of similar projects that are connected in progress Equity accounted companies · The individual associated company Goodwill and intangible assets with an indefinite useful life are not depreciated but are considered for impairment once every year and when there are Cloudberry Annual report 2021 Financial statements 104 circumstances or indicators implying an impairment test should be performed. Impairment is determined for goodwill by assessing the recoverable amount for each cash-generating unit (CGU) to which the good- will relates. Impairment losses relating to goodwill cannot be reversed in future periods. Leases At the lease commencement date, the Group rec- ognises a lease liability and corresponding right of use asset for all lease agreements in which it is the lessee, except for the following exemptions applied: · Short-term leases (defined as 12 months or less) · Low value assets For these leases, the Group recognises the lease payments as other operating expenses in the state- ment of profit or loss when they incur. Lease liabilities The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option. In calculating the present value of lease payments, the Group uses the incremental borrowing rate at the lease commencement date if the interest rate implicit in the lease is not readily determinable The lease payments included in the measurement comprise of: · Fixed lease payments (including in-substance fixed payments), less any lease incentives receivable · Variable lease payments that depend on an index or a rate, initially measured using the index or rate as at the commencement date · Payments of penalties for terminating the lease, if the lease term reflects the Group exercising an option to terminate the lease. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate. The Group does not include variable lease payments in the lease liability arising from future events, such as lease payments which depend on production vol- ume. Instead, the Group recognises these variable lease expenses in profit or loss, se under description of water right lease agreement. Right-of-use assets The Group recognises right-of-use assets at the commencement date of the lease, i.e. the date the underlying asset is available for use. Right-of-use assets are measured at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease liabilities. The recognised right-of-use assets are depreciated on a straight-line basis over the shorter of its estimated useful life and the lease term. Water right lease agreements Cloudberry enters into water-right lease agree- ments with owners of water rights, which entitles the company to utilise the water in the rivers. The agreements typically have a period varying from 40 to 100 years, starting when the power plant is put into commercial operation. The agreement with the owners of the water rights has a variable payment depending on the gross revenue of the power plant and is typically around 10% of the gross revenue. In certain agreements the variable payment depends on the net profit of the power plant (not the gross revenue). In these cases, Cloudberry is secured a minimum return on the investment (typically 4 – 7% p.a.) before owners of the water rights are compensated. Excess return above this minimum return is then split between the owners of the water rights and Cloudberry. When Cloudberry has a commitment to pay rent to the owners of the water rights, we account for this as a regular cost as the commitment arises. Upon expiration of the agreement the owners have the right to purchase the power plant with all rights and technical installations at a price based on certain specific conditions. Land lease agreements for construction of wind farms Cloudberry enters into lease agreements with land- owners, which entitles the company to utilise the land for construction of wind farms. The agreement typically has a period varying from 25 to 35 years dependent on the concession period, 105Cloudberry Annual report 2021 Financial statements starting when the power plant is put into commercial operation. The typical agreement with the landowners has a variable payment depending on the gross revenue of the power plant (around 4%). When Cloudberry has a commitment to pay rent to the landowners, we account for this as a regular cost as the commit- ment arises. Fixed amount- agreement: In certain cases, Cloudberry can be obligated to pay landowner a fixed annual amount, in such cases it may be accounted according to IFRS 16 lease agreement. Upon expiration of the agreement the landowner has the right to purchase the powerplant with all rights and technical installations at a price based on book value at the end of the lease agreement. Financial instruments Financial instruments are recognised in the finan- cial statements when the Group becomes party to contractual conditions relating to the financial instrument. Financial assets and financial liabilities are classified based on the type and purpose for holding the instruments at fair value, amortised cost or as a designated hedge accounting instrument (e.g. derivatives used for hedging financial risks). Financial assets The group classifies its financial assets in the follow- ing measurement categories: · those to be measured at amortised cost The classification depends on the entity’s business model for managing the financial assets and the contractual terms of the cash flows. For financial assets measured at fair value, gains and losses will either be recorded in profit or loss or other compre- hensive income. For investments in equity instru- ments that are not held for trading, this will depend on whether the Group has made an irrevocable election at the time of initial recognition to account for the equity investment at fair value through other comprehensive income. Financial assets recognised at fair value through profit or loss are initially recognised at fair value, and transaction costs are expensed in the income statement. Gains or losses arising from changes in the fair value of the financial instruments at fair value through profit or loss, including interest and dividends, are recognised in the income statement as other gain/losses. Derivatives are always meas- ured at fair value through profit or loss, unless des- ignated as a hedging instrument. When designated as a cash flow hedging instrument measurement is change in fair value are recognised in other compre- hensive income. Financial assets that are held for collection of contractual cash flows where those cash flows represent solely payments of principal and interest are measured at amortised cost. Interest income from these financial assets is included in finance income using the eective interest rate method. Any gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains/ (losses) together with foreign exchange gains and losses. Impairment losses are presented as separate line item in the statement of profit or loss. Regular purchases and sales of financial assets are recognised on trade-date, the date on which the Group commits to purchase or sell the asset. Financial assets are derecognised when the rights to receive cash flows from the financial assets have expired or have been transferred and the Group has transferred substantially all the risks and rewards of ownership. Financial liabilities The group classifies its financial liabilities at initial recognition in the following categories · Loans and borrowings including bank overdrafts · Payables · Derivatives designated as hedging instruments in an eective hedge All financial liabilities are recognised initially at fair value and, in the case of loans and borrowings and payables, net of directly attributable transaction costs. A financial liability is derecognised when the obli- gation under the liability is discharged or cancelled or expires. When an existing financial liability is replaced by another from the same lender on sub- stantially dierent terms, or the terms of an existing liability are substantially modified, such an exchange or modification is treated as the derecognition of the original liability and the recognition of a new liability. The dierence in the respective carrying amounts is recognised in the statement of profit or loss. Cloudberry Annual report 2021 Financial statements 106 Borrowing costs Borrowings are classified as current liabilities unless the group has an unconditional right to defer settle- ment of the liability for at least 12 months after the reporting period. Borrowing costs that are directly attributable to the acquisition, construction or production of a qualify- ing asset is includes as a part of cost. Other borrow- ing costs are recognised as an expense. Fair value measurement Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. All assets and liabilities for which fair value is meas- ured or disclosed in the financial statements are categorised within the fair value hierarchy, described as follows, based on the lowest level input that is significant to the fair value measurement as a whole: · Level 1 — Quoted (unadjusted) market prices in active markets for identical assets or liabilities · Level 2 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is observable, directly or indirectly, in a non-active market · Level 3 — Valuation techniques for which the lowest level input that is significant to the fair value measurement is unobservable and make use of best estimate Cash and cash equivalents Cash and cash equivalents include deposits held at call with financial institutions, commercial papers and other short term interest-bearing securities or highly liquid investments (money market funds) that are readily convertible to known amounts of cash and are subject to an insignificant risk of changes in value. Placements in money market funds are made to diversify risk and at the same time secure high liquidity of the placements to be able to meet short term cash commitments. The funds are larger funds with established have low interest rate risk and low credit risk. Placements in money market funds are classified as cash equivalents as the placements are short term placements and can be redeemed at any time with- out restrictions or cost (2-3 days settlement). The placements have insignificant risk of change in value as they are placements with the lowest risk profiles. Taxes Income tax is calculated in accordance with ordi- nary tax rules and by applying the adopted tax rate. The tax expense in the statement of comprehensive income comprises taxes payable and changes in deferred tax liabilities and deferred tax assets. Taxes payable are calculated on the basis of the taxable income for the year. Deferred tax liabilities and deferred tax assets are calculated on the basis of temporary dierences between the accounting and tax values and the tax eect of losses carried forward. Deferred tax assets and liabilities are oset when there is a legally enforceable right to oset current tax assets and liabilities and when the deferred tax balances relate to the same taxation authority. Deferred tax assets are recognised to the extent that it is probable that they will be utilised. Tax related to items recognised in other comprehensive income is also recognised in other comprehensive income, while tax related to equity transactions is recognised in equity. 107Cloudberry Annual report 2021 Financial statements Note 3 Key accounting estimates and judgements The use of reasonable estimates and judgements is a critical element in preparing the financial state- ment of the Group. Due to the level of uncertainties inherent in Cloudberry’s business activities, manage- ment must make certain estimates and judgement that aect the reported values of assets, liabilities, revenues, expenses, and related disclosures. Management bases its estimates on historical expe- rience, current trends and other various assumptions that the company’s management believes to be relevant at the time the consolidated financial statements are prepared. Long term price forecast for power One of the critical assumptions used by manage- ment in making business decisions is the long-term price forecast for power and the related market developments. The assumption is also critical input for management related to financial statement processes such as: · Allocation of fair value in business combination note 5 · Impairment testing note 19 Management use Volue (former Wattsight), and their base case for long term power price forecasts. Volue is an external source of information which ensures an unbiased estimate. Management review and update the forecast continuously, based on market development. Fair value measurement Significant judgement is applied in the valuation of the Group’s contracts categorised within level 2 in the fair value hierarchy levels. Where fair value measurement cannot be derived from publicly available information, they are estimated using models and other valuations methods. To the extent possible, the assumptions and inputs used take into account externally verifiable inputs. However, such information is by nature subject to uncertainty, par- ticularly where comparable market-based transac- tions often do not exist. In such cases management is required to make market-based assumptions to find the best estimates. Assessments in Business Combinations Significant management judgement is required in the assessment of a business combination. This includes determining if an acquisition is a business combination or an asset acquisition, determining an acquiring part and determining the allocation of fair value ta assets and liabilities acquired. To determine if the acquisition is a business combi- nation or an asset acquisition, management has to analyse and assesses whether the acquired entity meets the criteria of a business. Management’s judgement is required to assess if the inputs and related processes in place for the acquired have the ability to create outputs from the acquired unit. For each acquisition it is be made a specific assess- ment weather it is a business combination or an asset acquisition. If regarded as a business combi- nation IFRS 3 Business Combinations will be applied, while if an asset it will be either IAS 2 inventory or IAS 16 Property plant and equipment that will be applied. The latter relates to the type of assets being acquired. For acquisitions that consist of a single development project, single power plant ready to construct or assets that do not have any clearly defined input or output, the acquisition will often be accounted for as an asset acquisition. Acquisitions that consist of pro- ducing assets, projects organized with key employ- ees, business processes in place and defined inputs and outputs from the processes, the acquisition will often be accounted for as business combination. However, the specific assessment will be needed to conclude on the treatment for each acquisition. Allocation of fair value, the purchase price allocation, for the assets and liabilities acquired is based on a specific assessment of the dierent components of the acquisition. Significant management judgement is required in combination with valuation methods, assessments made in the acquisition process in combination with a specific evaluation of the acquired assets and liabilities. Cloudberry Annual report 2021 Financial statements 108 Deferred tax assets Significant management judgement is required when determining the amount of deferred tax asset to be recognised. Deferred tax asset is to be recog- nised for unused tax losses to the extent that it is probable that taxable profit will be available within reasonable time against which the losses can be utilised. Uncertain tax positions and potential tax exposures are analysed individually and the best estimate of the probable amount for liabilities to be paid and assets to be received are recognised within current tax or deferred tax as appropriate. See note 16. Lease When calculating lease liability, the discount factor is a significant estimate. In the absence of an identifia- ble discount rate, implicit in the lease agreement, the discount rate used is the Groups incremental bor- rowing rate. Judgement is also used to assess the lease period and the assessment if a lease option will be used and included in the estimated lease period to calculate the lease liability and right to use asset. For the lease contracts with options, these options are related to very long lease contracts on fixed land lease and the judgement is not material for the valuations of the lease liability. See note 25 Lease agreements. Share based payment The fair value of management warrant programme makes use of an estimation model, Black-Scholes for calculation the call option value at grant date and at the balance sheet day. This model makes use of management estimates for expected life option, volatility, and expected dividend yield. See note 13 Employee benefits and share based payments. Asset retirement obligation The calculation of the decommissioning obligation makes use of several estimates, the future cost of decommissioning, the timing of decommissioning, the probability of a landowner call option to pur- chase the power plant at the end of the lease period and the valuation of net present value with the appropriate discount rate. Management seeks to at least annually evaluate and update with the acces- sible information all estimates in the calculation. Application of accounting policy Due to Cloudberry’s business activities, manage- ment must apply judgement in determining the appropriate accounting policies in areas where application of the Groups accounting may have a material impact on the accounting treatment in the financial statements. Such areas include: · Classification of power purchase agreements note 10 · Classification of energy and other revenues note 12 · Classification of developing projects note 17 and 18 · Classification of investments made together with third parties note 20 Note 4 Business segments The Group reports its operations in three business segments; Production, an active owner of renewable power assets in the Nordics; Development, a green- field development both on and o-shore with a long history of organic, in-house developments of wind and hydropower assets in Norway and Sweden; and a cost ecient Corporate segment ensure manage- ment tasks for the Group like financing, marketing, reporting and other corporate activities. From 2022, after the acquisition of Captiva (see note 29 subse- quent events), a fourth business segment, Operations will be established, comprising this business. The Group reports on proportionate financials (APM) for each business segment. Management provides this because these measures are used internally for key performance measures (KPIs). These meas- ures represent the most important KPI’s to support decision making for achieving the Group’s strategic goals. Proportionate financials are further defined and described below under Proportionate financials and in the APM section of this report. 109Cloudberry Annual report 2021 Financial statements Cloudberry Production (“Production”) Cloudberry Production owns long-term yield hydro and wind assets in Norway and Sweden. Revenues come mostly from power production sold on a continuous basis through bilateral agreements or through the spot market, Nordpool. Producing assets are entitled to electricity certificates and guarantees of origin. Producing assets are remotely controlled from operational centres and Cloudberry has opera- tional agreements with local partners. Production is also the local manager and delivers management services to the Forte portfolio. The focus during 2021 has been on increasing production volumes and the construction of our new renewable projects. By year end Production had a producing portfolio of 58 MW and a secured portfolio of total 150 MW. In total, Cloudberry’s proportionate production ended at 117 GWh (21 GWh) for the year. Annual production will increase in 2022, following acquisi- tions made during 2021, as well as the completion of power plants which are currently under construction. Cloudberry Develop (“Develop”) Cloudberry Development has a significant on- and oshore development portfolio with renewable assets in Sweden and Norway. Since inception, ten projects have been fully developed and sold to infrastructure investors and European insurance companies. Develop is responsible for development of hydro and wind power assets from early stage until the projects receive construction permits. Going forward Cloudberry has the option to either sell or maintain in-house projects for long-term cash flow. Larger projects may be farmed down in order to diversify risk. In 2021, the main activities have been focused on growing the portfolio and moving existing projects in the portfolio forward. With the acquisition of Captiva in January 2022, further resources within hydro development have joined the Cloudberry team. Projects with construction permit increased from 151 to 160 MW per year end and has grown further in 2022 (218 MW per reporting date). Cloudberry has per year end an exclusive backlog of 370 MW (388 MW at the reporting date). The com- pany has ongoing dialogue with landowners, munic- ipalities and grid companies to clarify opportunities for new wind power projects. Cloudberry Clean Energy (“Corporate”) Corporate consists of the activities of corporate services, management, and group finance. There was significant corporate activity in 2021. The company has during the year listed on Oslo Børs’ main list, raised additional NOK 1 700 million in equity, increased the debt facility to NOK 1 400 million, pur- chased 60% of the Captiva Group and been active in the M&A market. Corporate consists mainly of Cloudberry Clean Energy ASA, the parent company accounts. Costs which are by nature related to the segments are allocated to the respective business segment. Allocated costs are mostly salaries for employ- ees related to Production and Develop that are employed in Cloudberry Clean Energy ASA. By year end, there were five employees in the corporate segment. Cloudberry has outsourced several services in connection with Oslo Børs listing, financing and due diligence processes. The corpo- rate management aims to remain a cost-eective, agile and dynamic team. Proportionate financials (APM) The main adjustments compared with the consol- idated IFRS reported figures are that associated companies are included in the financial accounting lines, the profit or loss statement and share of assets and net debt, with the respective proportionate ownership share, while in the consolidated financials, associated companies are consolidated with the equity method. Another dierence is that internal gains are eliminated in the consolidated financials but are retained in the proportionate financials. Please refer to the section Alternative Performance Measure for definitions and further reconciliations to the Group IFRS reported figures. Cloudberry Annual report 2021 Financial statements 110 The table shows the segment reporting for 2021 (with reconciliation to reported Group consolidated IFRS) and with comparable figures for 2020 in lower table (Cloudberry did not report on proportionate in the 2020 annual report): FY 2021 NOK 1 000 Production Development Corporate Total proportionate Group eliminations Residual ownership interst Group consolidated financials Total revenue 76 711 5 803 - 82 513 - (41 615) 40 898 Operating expenses ex depreciations and amortisations (34 124) (35 340) (37 841) (107 304) - 18 419 (88 885) Net income/(loss) from associated companies - - - - - 16 373 16 373 EBITDA 42 587 (29 537) (37 841) (24 791) - (6 823) (31 615) Depreciation and amortisation (18 035) (235) (1 138) (19 408) - 9 662 (9 746) Operating profit (EBIT) 24 552 (29 773) (38 979) (44 200) - 2 839 (41 361) Net financial items (7 952) (3 411) (2 603) (13 966) - (8 321) (22 287) Profit/(loss) before tax 16 600 (33 183) (41 582) (58 165) - (5 482) (63 647) Total assets 2 064 939 307 594 1 442 790 3 815 323 (110 289) (586 642) 3 118 392 Interest bearing debt 826 294 - - 826 294 - (522 102) 304 192 Cash 10 571 (58 603) 1 330 084 1 282 053 - (167 119) 1 114 934 NIBD 815 723 58 603 (1 330 084) (455 759) - (354 983) (810 741) All revenue in the Production segment were in Norway and in NOK in 2021. Trade of electricity relates products are made on Noor Pool at spot, or at a fixed price through a purchase price agreement (PPA) with a PPA o taker customer. During 2021 no PPA have represented more than 10% of total revenue. From 2022 Production does not have any PPA for its power generation and sales. In Development, revenue comprised of other income and was mainly related to insurance settlement at related to Marker of NOK 5m, the remaining was income from Downing related to termination of SPA agree- ment regarding Stenkalles. FY 2020 NOK 1 000 Production Development Corporate Total proportionate Group eliminations Residual ownership interst Group consolidated financials Total revenue 5 122 93 118 5 333 (200) (1 493) 3 640 Operating expenses ex depreciations and amortisations (7 084) (8 395) (16 355) (31 834) - 1 930 (29 904) Net income/(loss) from associated companies - - - - - (3 556) (3 556) EBITDA (1 962) (8 302) (16 237) (26 501) (200) (3 119) (29 822) Depreciation and amortisation (4 066) (203) (870) (5 139) - 1 850 (3 289) Operating profit (EBIT) (6 028) (8 505) (17 107) (31 640) (200) (1 270) (33 110) Net financial items (1 826) (294) (152) (2 272) (139) 1 270 (1 141) Profit/(loss) before tax (7 854) (8 799) (17 259) (33 912) (339) 1 (34 253) Total assets 850 781 208 347 593 940 1 653 069 46 (256 254) 1 396 861 Interest bearing debt 498 950 - - 498 950 - (235 742) 263 207 Cash 92 608 4 850 551 239 648 697 - (43 572) 605 126 NIBD 406 342 (4 850) (551 239) (149 747) - (192 170) (341 918) Please refer to the section Alternative Performance Measure for definitions and further details about recon- ciliations between the Group IFRS reported figures and proportionate segment reporting. 111Cloudberry Annual report 2021 Financial statements Note 5 Business combinations and other transactions Cloudberry acquired Selselva Kraft AS On 13 January 2021, Cloudberry Production AS acquired 100% of the shares of Selselva Kraft AS, “Selselva”. Selselva is a producing hydropower plant located in Sunnfjord municipality in Vestland county with an expected annual production (normalized) of 20 GWh. The total purchase price of NOK 65.0m was paid in cash and was equity financed. Selselva was consolidated in the Group accounts from 13 January 2021. Cloudberry acquired Nessakraft AS On 30 June 2021, Cloudberry Production AS com- pleted the acquisition of 100% of the shares of Nessakraft AS, “Nessakraft”. The transaction also included the acquisition of Bjørgelva Kraft AS, see information below. Nessakraft is now a producing hydropower plant which has completed the commis- sioning period (construction completion in December 2020). The hydropower plant is located in Balestrand, Vestland county with an expected annual production (normalized) of 34 GWh. The total purchase price of NOK 73.4m was paid in cash and was equity financed. Nessakraft was consolidated in the Group accounts from 30 June 2021. Cloudberry acquired Bjørgelva Kraft AS On 30 June 2021, Cloudberry Production AS com- pleted the acquisition of 100% of the shares of Bjørgelva Kraft AS “Bjørgelva”. The transaction also included the acquisition of Nessakraft AS, see information above. Bjørgelva is now a producing hydropower plant which has completed the commis- sioning period (construction completion in December 2020). The hydropower plant is located in Sørreisa, Troms og Finnmark county with an expected annual production (normalized) of 7 GWh. The total purchase price of NOK 10.0m was paid in cash and was equity financed. Bjørgelva Kraft AS was consolidated in the Group accounts from 30 June 2021. Cloudberry acquired Usma Kraft AS On 20 August Cloudberry Production completed the acquisition of 100% of the shares of Usma Kraft AS, a hydropower company in Norway. Usma Kraft hydropower plant is located in Selbu municipality in Trøndelag county and produces from the water in lake Usme and Gardåa river. The expected annual production is 25.5 GWh. The total purchase price of NOK 82.9m was paid in cash and was equity financed. Usma Kraft AS was consolidated in the Group accounts from 20 August 2021. Cloudberry Annual report 2021 Financial statements 112 The table below shows the preliminary purchase price allocation for the acquisitions in 2021: NOK 1 000 Selselva Kraft AS Nessakraft AS Bjørgelva Kraft AS Usma Kraft AS Total Acquisition date 13.01.2021 30.06.2021 30.06.2021 20.08.2020 Voting rights/shareholding acquired through the acquisition 100% 100% 100% 100% Total voting rights after the acqusition 100% 100% 100% 100% Non controlling interests - - - - Consideration Cash 65 011 73 433 10 035 82 877 231 357 Shares - - - - - Total acquisition cost 65 011 73 433 10 035 82 877 231 357 Book value of net assets (se table below) 6 274 30 646 7 739 20 890 65 548 Identification of excess value. attributable to: Inventory - - - - - Property, plant and equipment 75 932 54 856 2 944 79 471 213 203 Other (2 280) - - - (2 280) Gross excess value 73 652 54 856 2 944 79 471 210 923 Deferred tax on excess value (16 204) (12 068) (648) (17 484) (46 403) Net excess value 57 449 42 787 2 296 61 988 164 520 Fair value of net acquired assets excluding goodwill 63 723 73 434 10 035 82 877 230 069 Of which Non controlling interest - - - - - Controlling interests 63 723 73 434 10 035 82 877 230 069 Total acquisition cost 65 011 73 433 10 035 82 877 231 357 Fair value of net aquired assets ex goodwill (controlling interests) 63 723 73 434 10 035 82 877 230 069 Goodwill 1 289 - - - 1 288 Goodwill of NOK 1.3m related to Selselva Kraft AS is not tax deductible. 113Cloudberry Annual report 2021 Financial statements The net assets acquired during 2021 is as follows: NOK 1 000 Selselva Kraft AS Nessakraft AS Bjørgelva Kraft AS Usma Kraft AS Total Property, plants and equipment 52 089 111 795 30 487 106 009 300 380 Other non-current assets 207 - 137 8 418 8 762 Financial non-current assets - - - - Inventory - - - - Other current assets 1 759 84 27 1 871 Cash and cash equivalents 5 288 17 916 1 566 1 231 26 001 Acquired assets 59 344 129 795 32 217 115 659 337 014 Interest bearing debt, long term 49 282 87 000 24 347 94 167 254 796 Current liabilities 2 397 12 149 131 276 14 952 Deferred tax liability 1 392 - - 1 392 Other - - - 326 326 Net asset value aquired assets 6 274 30 646 7 739 20 890 65 548 Total acquisition cost 65 011 73 433 10 035 82 877 231 357 Non cash consideration - - - - - Cash consideration 65 011 73 433 10 035 82 877 231 357 Cash in acquired company (5 288) (17 916) (1 566) (1 231) (26 001) Net cash outflow at acquisition 59 723 55 518 8 469 81 646 205 356 Pro forma financial figures The acquired subsidiaries are consolidated in the Group accounts from the acquisition date. The table below show the profit and loss statements in the company accounts in 2021 for the period before the acquisition, which are not included in the Cloudberry consolidated accounts. NOK 1 000 Selselva Kraft AS Nessakraft AS Bjørgelva Kraft AS Usma Kraft AS Total Acquisition date 13.01.2021 30.06.2021 30.06.2021 20.08.2020 Gross revenue from 1.1.2021 untill takeover 121 3 541 351 5 470 9 483 Salaries from 1.1.2021 untill takeover - - - - - Other operating expenses from 1.1.2021 untill takeover (57) (1 215) (464) (2 636) (4 371) Depreciotions from 1.1.2021 untill takeover - (396) (153) (2 030) (2 578) Net finance from 1.1.2021 untill takeover - (854) (314) (1 448) (2 616) Tax expenses from 1.1.2021 until takeover - (237) 127 - (109) Net income before acquisition not recognized in the Group accounts 64 840 (452) (644) (192) Cloudberry Annual report 2021 Financial statements 114 The table below show the pro forma gross Profit or loss statement before tax if the acquired companies had been consolidated from 1 January 2021. NOK 1 000 Cloudberry Group reported Not included from company accounts Pro-forma Group figures Total revenues 40 898 9 483 50 381 Cost of goods sold (5 447) - (5 447) Salary and personnel expenses (28 106) - (28 106) Other operating expenses (55 332) (4 371) (59 703) Share of income from associated companies 16 373 - 16 373 Depreciations and amortisations (9 746) (2 578) (12 325) Net finance (22 287) (2 616) (24 902) Profit before tax (63 648) (82) (63 730) Other acquisitions Skåråna Kraft AS On 24 February 2021 Cloudberry Production AS acquired 100% of the shares in Skåråna Kraft AS “Skåråna”. Skåråna is the owner of two hydropower plants under construction and the acquisition is classified as an asset acquisition in the consolidated accounts. The two hydropower plants are located in Lund, Rogaland county. They are expected to commence production during the first quarter of 2022 and are expected to have an annual production at a normal- ized level of 14 GWh. The total purchase price was originally NOK 23.7m, of NOK 17m was settled cash, while NOK 6m was held back because the purchase price is subject to adjustments in case of cost overruns related to the construction projects. As per end of December 2021 there has been cost overruns estimated to NOK 6m, and hence there will not be no final settle- ment with the seller. For Cloudberry the total cost is unchanged. Skåråna is estimated to be in full production during first half of 2022. Cloudberry acquired Åmotsfoss Kraft AS On 1 December 2021 Cloudberry Production acquired 100% of the shares of Åmotsfoss Kraft AS “Åmotsfoss”. Åmotsfoss is a finished, constructed and commissioned, hydro power plant located in Arendalsvassdraget, built by BN Vannkraft together with local contractors. Cloudberry has been invested in the project prior to construction start and contrib- uted to the set up to fit the Cloudberry operational platform. The acquisition is classified as an asset acquisition in the consolidated accounts. The expected normalised annual production is 22.7 GWh (4.5 MW). The total purchase price of NOK 91.4m was paid in cash and was equity financed. 115Cloudberry Annual report 2021 Financial statements Key risks and financial instruments Through its business activities, Cloudberry is exposed to various risks, and has engaged in various financial instruments. The Group focuses on the following risk categories: Market and operational, Financial and ESG risks. The Group overall risk management programme seek to minimize the potential for adverse eects on the Groups performance. Market risks, including political and regulations risks, and price risks, see note 7, commercial and opera- tional risks, see note 8, and financial risks, see note 9. Guidelines for risk management and strategy for handling and using financial instruments as a part of the business activities and handling risks have been approved by the Board of Directors. See note 10 Financial instruments and 11 Hedge accounting. Note 6 Covid 19 The risk and potential consequences of a global pandemic has been illustrated for the past two years. The Covid-19 pandemic has aected all busi- nesses, more or less, in some way, and in general the market situation has been challenging. During the year, Cloudberry has seen some adverse impacts of the pandemic, mainly related to our supply chain and government approvals. At Odal Vind, entry restrictions for key personnel and logistical challenges in the global supply chain have created some challenges and delays. By year end, 13 of 34 SiemensGamesa turbines are fully installed and first power was delivered to the grid in December. Odal is expected to be in full operation before the end of June 2022. At Hån windfarm, it was a priority to secure precau- tionary routines and procedures together with the contractors, especially after the omicron was discov- ered in November. Nevertheless, in January 2022 there was an outbreak in one of the work teams, but it had minimal impact and the construction is progressing as planned. Cloudberry has grown significantly and despite many restrictions during 2021 due to Covid-19 the company has delivered more or less all projects on budget and time schedule. Cloudberry has not applied for, or received, any governmental economic support related to the pandemic. The economic consequences in 2021 is mostly related to indirect costs of delays on projects and related increased capital expenditures. Cloudberry continues to assess risks related to the Covid-19 situation. The pandemic will continue to influence the markets and potentially cause sup- ply chain disruptions, nevertheless the company expects the pandemic to have limited overall impact on its projects. Cloudberry Annual report 2021 Financial statements 116 Note 7 Market related risks Political and regulations risk The power industry is a highly regulated sector and thus subject to political risk The power industry is publicly regulated, and regu- lations may change over time. Thus, there is political risk of investments in the renewable and infrastruc- ture industries in the Nordic countries. The electricity certificate scheme is subject to political risk The electricity certification scheme is an aid scheme with intention of increasing the renewable power generation in Norway and Sweden. New renewable power generation in Norway and Sweden, which commenced within the end of 2021, will receive electricity certificates. The electricity certification scheme will be discontinued in 2035. The investment decision related to several of the assets of the Company has been made based on inclusion of electricity certificate revenues. Electricity certificates are traded in a market where the price is determined by the market cross between supply and demand. Demand is based on a quota system determined by political objectives. Revenue from the sale of electricity certificates is consequently subject to political risk. The guarantee of origin scheme is subject to political risk In accordance with EU legislation, power plants in the EEA may get approval for guarantees of origin for five years at a time. Energy suppliers may buy such guarantees of origin from the power producer in order to guarantee its customers that the deliv- ered energy is produced from renewable sources. The relevance of the latest revision of the current European Renewable Energy Directive is currently being assessed by the EEA/EFTA. The revision seems to extend the guarantee of origin scheme, although no decision has been made. The future of the scheme is thus subject to political risk. The renewable sector is still under development Unexpected success in other areas of renewable energy may reduce the pressure on the author- ities to allow for development of wind parks and hydro power plants. This may aect the Group’s future investment opportunities and reduce the second-hand value of its power plants. The same may also hold true for non-renewable or currently unknown energy technologies. Price risk Sale of electricity, electricity certificates and guarantees of origin constitute a material share of the Group’s revenues. The profitability of the Group’s producing power plants depends on the volume and prices of the electricity produced, the electricity certificates and the guarantees of origin. Although some of the sale will be based on fixed price purchase agreements, the majority of the Group’s sale will be exposed to price risk related to electricity sold at spot rates, the market price for electricity certificates and the market price for guarantees of origin. The Groups fixed price contracts expired at year end, and from 2022 all production is exposed to fluctuations in the market prices for electricity, electricity certificates and guarantees of origin. New fixed term agree- ments may be entered into for parts of the produc- tion volumes. Electricity prices are inter alia dependent on substi- tute or adjacent commodity prices such as e.g. oil, gas and coal prices, but also dependent on metro- logical conditions, CO 2 pricing and other supply and demand factors going into the clearing of the market price of electricity. 117Cloudberry Annual report 2021 Financial statements Note 8 Commercial and operational risks Risks related to changes in laws and regulations Laws and regulations may aect the Group’s operations, increase the Group’s operating costs, and reduce demand for its services. Changes in laws and regulations applicable to the Group could increase compliance costs, mandate significant and costly changes to the way the Group implements its services and solutions and threaten the Group’s ability to continue to serve certain markets. For some small-scale power plants and large-scale power plants, license fees and concessionary power must be paid or transferred to the municipality, county or state. Often, such power plants must deliver 10-15% of their power production as conces- sionary power. The power plant must in such cases sell the concession power at the expected “cost price”. Such changes in regulations would aect the Group’s profitability. Changes in tax laws of any jurisdiction in which the Group operates, or any failure to comply with applicable tax legislation, may have a material adverse eect for the Group. The Group is subject to prevailing tax legislation, treaties and regulations in the jurisdictions in which it is operating, and the interpretation and enforcement thereof. The Group’s income tax expenses are based upon its interpre- tation of the tax laws in eect at the time that the expense is incurred. If applicable laws, treaties or regulations change, or if the Group’s interpretation of the tax laws is at variance with the interpretation of the same tax laws by tax authorities, this could have a material adverse eect on the Group’s business, results of operations or financial condition. In Norway, it is expected that the taxes on revenues from wind power will increase but there are not any concrete proposals decided yet. Operational risks Power plants are highly technical Investments in power generation and energy-related infrastructure involve technical and operational risks. The Group will seek to invest in power plants of expected good technical standard to reduce the technical risk of the investment. The Group will prioritize technical solutions that are well-proven and delivered by reputable suppliers, so that any repairs can be made within reasonable timeframes and at reasonable cost, and that it is possible with attractive insurance terms. Despite the aim of choosing sound solutions, technical problems may occur meaning possible stops in production or costly reinvestments that reduce the Group’s profitability and/or financial position. Revenues dependent on metrological conditions The metrological conditions (rain and wind) at par- ticular sites at which the Group’s power plants are located can vary materially from season to season and from year to year. If a site proves to have lower resources than anticipated in the Group’s business model or suers a sustained decline in metrological conditions, such power plants are likely to generate lower electricity volumes and lower revenue than anticipated, which could have a material adverse eect on the Group’s business. Risks related to costs of transmission and distribution Increases in charges relating to the connection to and use of the electricity transmission and distribu- tion networks and relating to balancing of electricity supply and demand, and/or restrictions on the capacity in such networks available for use by the Group’s power plants, may result in higher operating costs, lower revenues and fewer opportunities for growth. Risks related to development projects For the development projects, there are project related risks with regards to reaching final invest- ment decision. The Group must inter alia negotiate and conclude agreements related to construction, maintenance and operations of the plants, obtain financing and secure the necessary grid capacity and permits. If the Group fails to realize all or some of the development projects, the Group may have to write o the investments made into the project(s). Risks related to construction projects For projects under construction, both current and future, the construction phase is linked to risk of overruns and delays. The construction of power plants diers from project to project, and several aspects may cause delays or budget overruns. During construction of wind farms, challenges related to foundations or roads may lead to delays, or heavy winds may delay the installations of the turbines. Distress in the global supply chain may Cloudberry Annual report 2021 Financial statements 118 delay certain components and increase cost. Drilling of waterways for hydro power plants may cause delays if the bedrock proves more challenging than expected, and delay of critical components may cause delays to the project, and subsequently cost overruns. Note 9 Financial risks Interest rate risk Interest rate risk is the risk that the future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Group’s underlying assets will normally be loan-financed with long term debt obligations with floating rates, which is exposed to the risk of changes in market interest rates. An increase in interest rates will lead to higher inancingg costs, which reduces the Group’s profitability. Management seeks to minimize the interest rate risk together with borrowing costs. The Group manages the borrowing cost and interest risk by either using long-term financing at fixed rates or using floating to fixed interest swaps. See details under note 10 and 11, financial instruments and hedge accounting. Currency risk The Company presents its financial statements in NOK. However, all trades on NordPool, which is the market for trading of power in Norway and Sweden, are settled in Euro, exposing the Group to currency risk (electricity certificates are traded in SEK). Any fluctuations in exchange rates between NOK, SEK and Euro could materially and adversely aect the Group’s business, results of operations, cash flows, financial condition and/or prospects. Additionally, the Group has employees and oper- ations in Sweden, which also exposes the Group to currency risk. Any fluctuations in exchange rates between NOK and SEK could materially and adversely aect the Group’s business, results of operations, cash flows, financial condition and/or prospects. The Group may want to do business in other countries in the future, exposing the Group to additional currency risk. Should it choose to do so, any fluctuations in exchange rates between NOK and the relevant foreign currency could materially and adversely aect the Group’s business, results of operations, cash flows, financial condition and/or prospects. The Group does not currently have any currency hedging arrangements in place to limit the exposure to exchange rate fluctuations. However, the Group holds deposits in local currency (NOK, SEK and EUR) in order to match future obligations. The Group does not have any financial instruments or derivatives in other currencies which could be sensitive to exchange rate fluctuations. Liquidity risk Liquidity risk is the risk that Cloudberry will not be able to meet its financial obligations when due. The Group manages liquidity risk through on a regular basis to review of future commitments and the liquidity reserves which consist of cash (see note 21) and borrowing facilities (see note 23). Management prepares minimum quarterly cash flow forecasts that look a minimum of twelve months ahead to han- dle the liquidity risk. When taking business decisions and entering into contracts Cloudberry evaluates the liquidity needs and makes sure the liquidity needed is in place before entering into contracts. As of 31 December 2021, the Group has a total of NOK 226 million in contractual commitments, in addi- tion to the current payables which are recognised in the Groups balance sheet. See note 17 Property, plant and equipment and note 24 Provisions, guaran- tees and other contractual obligations. Credit risk Credit risk is the risk that the Group’s customers or counterparties will cause financial loss by failing to honour their obligations. The Group is exposed to third party credit risk in several instances including 119Cloudberry Annual report 2021 Financial statements o-take partners who have committed to buy electricity produced by or on behalf of the Group, banks providing financing and guarantees of the obligations of other parties, insurance companies providing coverage against various risks applicable to the Group’s assets, and other third parties who may have obligations towards the Group. The Group’s main credit risks arise from credit exposures with deposits with financial institutions and other short-term receivables. Counterparties in derivative contracts and financial deposits are limited to financial institutions with high creditworthiness. Note 10 Financial instruments This note provides an overview of all financial instruments held by the Group. The table below shows the Groups financial instruments with their carrying amounts recognised in the con- solidated financial position on 31 December 2021. The carrying amount for assets and liabilities at amortised cost is believed to be close to fair value. 31 December 2021 NOK 1 000 Fianancial assts at amortised cost Liabilities at amortised cost Derivative financial instruments - hedge accounting Total Derivative financial instrument - - 6 579 6 579 Other non-current asset 3 846 - - 3 846 Total non-current financial assets 3 846 - 6 579 10 425 Trade and other current receivables 84 828 - - 84 828 Cash and cash equivalents 1 114 934 - - 1 114 934 Total current finacial assets 1 199 762 - - 1 199 762 Lease liability short term - (1 167) - (1 167) Current borrowings - (10 105) - (10 105) Total current financial liabilities - (11 272) - (11 272) Lease liability long term - (3 416) - (3 416) Financial liability for PPA termination - (4 600) - (4 600) Long term borrowings - (291 472) - (291 472) Derivatives - - (2 615) (2 615) Total non current financial liabilities - (299 489) (2 615) (302 104) Net financial assets (liabilities) 1 203 608 (310 761) 3 964 896 811 Cloudberry Annual report 2021 Financial statements 120 31 December 2020 NOK 1 000 Fianancial assts at amortised cost Liabilities at amortised cost Derivative financial instruments - hedge accounting Total Derivative financial instrument - - 1 322 1 322 Other non-current asset 1 035 - - 1 035 Total non-current financial assets 1 035 - 1 322 2 357 Cash and cash equivalents 605 126 - - 605 126 Total current finacial assets 605 126 - - 605 126 Lease liability short term - (1 105) - (1 105) Current borrowings - (236 767) - (236 767) Total current financial liabilities - (237 872) - (237 872) Lease liability long term - (3 296) - (3 296) Financial liability for PPA termination - (4 641) - (4 641) Long term borrowings - (26 266) - (26 266) Derivatives - - (173) (173) Total non current financial liabilities - (34 203) (173) (34 376) Net financial assets (liabilities) 606 161 (272 075) 1 149 335 235 The fair value of the interest rate swaps derivatives is calculated as the present value of the estimated future cash flows based on observable yield curves (level 2). Changes in fair value relate to daily changes in market prices of the derivative contracts and the volume of contracts. The fair value of the Groups derivative finan- cial instruments has been determined by external banks. The table below summarizes the fair value for each class of financial instrument recognised the fair value hierarchy. December 2021 NOK 1 000 Non-current financial investments Derivative financial instrument (asset) Derivative financial instrument (liability) Total fair value Fair value based on quoted prices in an active market (Level 1) - - - - Fair value based on price inputs other that quoted prices (Level 2) - 6 579 (2 615) 3 964 Fair value based on unobservable inputs (Level 3) - - - - Total fair value at 31 December 2021 - 6 579 (2 615) 3 964 December 2020 NOK 1 000 Non-current financial investments Derivative financial instrument (asset) Derivative financial instrument (liability) Total fair value Fair value based on quoted prices in an active market (Level 1) - - - - Fair value based on price inputs other that quoted prices (Level 2) - 1 322 (173) 1 149 Fair value based on unobservable inputs (Level 3) - - - - Total fair value at 31 December 2020 - 1 322 (173) 1 149 121Cloudberry Annual report 2021 Financial statements The contracts at level 2 as of 31 December are the Groups interest rate derivatives. The fair value of interest rate swaps is determined by discount- ing expected future cash flows to present value through the use of observed market interest rates. Cloudberry’s interest rate derivatives are held for hedging purposes, reference to note 11 Hedge accounting. Purchase Price Agreements (PPA) Cloudberry has in some cases entered into PPA for the sale of electric power and el certificates at a fixed price. A characteristic to these agreements is that they can be accounted for as a financial instru- ment or as a contract with customer, depending on the terms and conditions. “Own use” contracts: Energy contracts that are entered into and continue to be held for the purpose of the receipt or delivery of the power in accordance with Cloudberry’s expected purchase, sale or usage requirements are accounted for as own use con- tracts. These contracts do not qualify for recognition in the statement of financial position in accordance with IFRS 9 but are accounted for as contracts with customers after IFRS 15 and energy purchase. “Own use” contracts will typically have a stable customer base e.g. bilateral industry contracts, and are settled by physical delivery. The PPA at Røyrmyra was in 2019 agreed terminated from 31 December 2021. A financial liability of NOK 4.6 million is recognised in the balance sheet and will be due in February 2022. See note 24 Provisions, guaran- tees and other contractual obligations. From 31 December Cloudberry currently does not have any PPA for sale of electric power. Note 11 Hedge accounting Financial instruments that are designated as hedging instruments or hedged items in hedge accounting are identified based on the intention with entering into a financial instrument. The ineectiveness from the hedges is recognised in profit and loss. Cloudberrys strategy is to hedge more than 50% of interest risk on producing assets. The objective for the interest rate management is to reduce risk (reduce volatility of future interest payments) and to lock future interest costs at attractive levels. The secured debt and the interest rate swap agreement has equal terms, and the hedge eectiveness is fully covered. All interest rate swaps are designated as hedging instruments. All interest rate swaps are recognised at fair value. As per December 2021 Cloudberry has entered into interest rate swaps, swapping from floating to fixed interest rate, for all long term debt related to power plants, see note 23 Long term debt, the interest swap derivatives are accounted with hedge accounting. The table below shows how the interest rate swap has been accounted for in the statement of compre- hensive income. The amounts recognised in OCI is presented net of tax eect. FY 2021 NOK 1 000 Total hedging gain/loss recognised in OCI Amount reclassified fro OCI to profit and loss Line item in the statement of profit and loss Interest swap for long term debt 2 245 (1 648) Financial expense Cloudberry Annual report 2021 Financial statements 122 FY 2020 NOK 1 000 Total hedging gain/loss recognised in OCI Amount reclassified fro OCI to profit and loss Line item in the statement of profit and loss Interest swap for long term debt 908 (142) Financial expense The following table demonstrates the sensitivity to a reasonably possible change in interest rates on that portion of financial assets and liabilities aected, after the impact of hedge accounting. With all other vari- ables held constant, the Group’s profit and equity before tax is aected through the impact on floating rate borrowings, as follows FY 2021 NOK 1 000 Increase in %-points Eect on profit before tax Eect on OCI Interest swap for long term debt drawn when acquring Nessakraft 1% - 12 119 FY 2020 NOK 1 000 Increase in %-points Eect on profit before tax Eect on OCI Interest swap for long term debt drawn when acquring Nessakraft 1% - 4 049 The following table shows the maturity for nominal cash outflow for the hedged bank loans and the interest rate swaps December 2021 NOK 1 000 Less than a year 1-2 years 2-3 years 3-4 years More than 5 years Total Bank loan (19 649) (20 367) (20 530) (20 353) (315 126) (396 025) Interest swaps (852) 227 741 914 12 580 13 610 Total (20 501) (20 140) (19 789) (19 439) (302 546) (382 416) December 2020 NOK 1 000 Less than a year 1-2 years 2-3 years 3-4 years More than 5 years Total Bank loan (2 139) (2 158) (2 152) (3 137) (25 369) (34 955) Interest swaps (315) (531) (308) (140) 2 474 1 180 Total (2 454) (2 689) (2 460) (3 277) (22 895) (33 775) Please note that the maturity analysis is bases on the Groups assumptions for floating interest rate develop- ment on long term. All items in the statement of financial position classified as current liabilities are due within next 12 months. For maturity analysis for non-current provisions and contractual obligations, please see note 24 Provisions, guarantees and other contractual obligations. 123Cloudberry Annual report 2021 Financial statements Statement of profit or loss and comprehensive income Note 12 Sales revenues and other operating income The consolidated revenues are presented in the table below. NOK 1 000 2021 2020 Revenue from electricety generation 29 379 2 580 El certificates and guarantees of origin 3 140 743 Management services 2 634 310 Sales revenues 35 152 3 633 Sale of power plant project - - Public grants - El certificates and guarantees of origin - 8 Other 5 746 (1) Other income 5 746 7 Total revenue 40 898 3 640 For information about the revenue split between business segments, see note 4. Sales revenue The Group has implemented the 5-step model for revenue recognition in accordance with IFRS 15 Revenue from contracts with customers. See accounting principles in note 2. For Cloudberry there will be mainly two types of rev- enue generating customer contracts. This is revenue from sale of power, including sale of el certificates and guarantees of origin from a producing power plant and revenue from management services. For Cloudberry’s power producing assets the customer contract is when connected to the grid, the production for spot sale to the grid or a purchase price agreement (PPA) with a contract customer. The performance obligation is to deliver power, and the consideration is the transaction price which can be spot or a predefined price. The performance obligation is delivered over time, and therefore the consideration will be accounted for when each unit is delivered, a practical approach is the considera- tion that Cloudberry has the right to invoice at the transaction date. The right to invoice is when the power is produced and delivered to the grid. In the cases that the power is sold at Nord pool, this is defined as the customer. In other cases, the cus- tomer is a specific partner. For a PPA, the customer contract is the contract to sell the production to a specific price to the contract party. From 2022 Cloudberry does not have any PPAs for its power generation and sales. Cloudberry Production has a contract for manage- ment services for the Forte portfolio of producing power plants. This is accounted for as revenue when the service is provided, and Cloudberry have a contractual right to the consideration. Cloudberry Develop can also in some cases have revenue from management services (project development services), in these cases it must be made an assessment of the timing of when the performance obligation is fulfilled. This will be determined from the nature of the assignment in each contract. Cloudberry Develop has not had any management service revenues in 2021. When the payment profile for the consideration deviates significantly from the transfer of the ser- vices, it is assessed if it is necessary to separate the finance element in the transaction consideration. Cloudberry Annual report 2021 Financial statements 124 Payment terms for power related products are normally within 30 days. Management services are assessed for each service agreement. For revenue from sale of power and management services the recognition in most cases coin- cides with the right to invoice the consideration. Unsatisfied performance obligation will be recog- nized if any. Other income In 2021 Cloudberry Develop received an insurance settlement of NOK 4.8m related to Marker Vind farm, this is presented as other income when the settlement is paid. The remining other income is cost compensation from agreed cost split with Downing after the termination of the SPA agreement for Stenkalles in October 2021. When Cloudberry develops projects in-house or acquire project rights and sell these assets; income from the transfer of the concession to a ready-to- build project or development rights to a project, is recognized upon the transfer of the concession rights or project rights. The income is presented net of the inventory cost related to the project. In 2021 there was no sale of develop projects. When there are conditions precedent to the contract the income is accounted when all material conditions precedent is settled. Net gain or loss from disposal of fixed assets are presented as other income, there has not been any sale of fixed assets during the year. Income from government grants is measured at cost. Government grants does not have any costs and the Group has not recognized any income from grants in 2021. Note 13 Employee benefits and share based payments Employee benefits are accrued in the period in which the associated services are rendered by the employ- ees of the Company. The table below shows the employee benefits accrued in the period and the capitalized costs relate to development projects. NOK 1 000 2021 2020 Salaries 22 022 15 141 Payroll tax 4 766 2 069 Pension costs 1 110 614 Share based payment 4 388 1 251 Other benefits 349 365 Gross personnel expenses 32 635 19 439 - Capitalized development costs (project inventory) (4 530) (2 021) Total personnel expenses 28 105 17 419 Average number of full-time equivalents (FTEs) 12 8 Number of full-time equivalents as 31.12 (FTEs) 14 10 Included in salaries are renumeration to board members. Pension The Group has an established pension scheme that is classified as a defined contribution plan. The pension scheme is in line with the requirements of the law. Contributions to the defined contribution schemes are rec- ognised in the consolidated statement of profit and loss in the period in which the contribution amounts are earned by the employees. The defined contribution plan does not commit Cloudberry beyond the amounts contributed. 125Cloudberry Annual report 2021 Financial statements Renumeration of Executive Group management The renumeration of the Executive Group Management is based on a fixed salary, including personal benefits such as free telephone and health insurance, a variable group performance bonus scheme, pension bene- fits, and a long-term share-based incentive program. The table below shows the renumeration in 2021 NOK 1 000 Anders Lenborg (CEO) Christian Helland (CVO) Suna Alkan (CSO) Jon Gunnar Solli (COO) Tor Arne Pedersen (CDO) Total Salary 2 700 2 100 1 640 1 850 1 850 10 140 Bonus 1 350 700 400 600 150 3 200 Pension costs 83 77 87 - 87 334 Share based payment 1 729 1 259 355 586 401 4 330 Total reportable benefits paid 2021 5 862 4 136 2 482 3 036 2 488 18 004 The table below shows the renumeration in 2020 NOK 1 000 Anders Lenborg (CEO) Christian Helland (CVO) Suna Alkan (CSO) Jon Gunnar Solli (COO) Tor Arne Pedersen (CDO) Total Salary 1 864 1 448 1 306 1 490 1 330 7 437 Bonus 1 150 600 500 600 600 3 450 Pension costs 66 62 69 63 68 328 Share based payment 426 269 120 160 149 1 124 Total reportable benefits paid 2020 3 506 2 378 1 995 2 314 2 147 12 340 Tor Arne Pedersen was part of executive management group from March 2020. Charlotte Bergquist and Stig J. Østebrøt will be part of the executive group management from January 2022. In 2021 the Group has established a compensation committee which have targeted Key Performance Indicators (KPIs) and achieved bonus levels for the Group management. Cloudberry Annual report 2021 Financial statements 126 Total renumeration, warrants and shares for top management in 2021: Executive group management FY 2021 NOK 1 000 Holding Company Shares pr 31.12.21 Total renum- aration 2021 Warrants grantet 2021 Warrants pr 01.01.21 Warrants grantet total pr 31.12.21 Warrants exirciced Anders Lenborg (CEO) Lenco AS 1 323 546 5 862 1 900 000 795 000 2 695 000 - Christian Helland (CVO) Amandus Invest AS 452 758 4 136 1 500 000 500 000 2 000 000 - Suna Alkan (CSO) Cappadocia Invest AS 233 448 2 482 300 000 225 000 525 000 - Jon Gunnar Solli (COO) Lotmar Invest AS 600 498 3 036 600 000 300 000 900 000 - Tor Arne Pedersen (CDO) Viva North AS 139 128 2 488 300 000 300 000 600 000 - 18 004 4 600 000 2 120 000 6 720 000 - FY 2020 NOK 1 000 Holding Company Shares pr 31.12.20 Total renum- aration 2020 Warrants grantet 2020 Warrants pr 01.01.20 Warrants grantet total pr 31.12.20 Warrants exirciced Anders Lenborg (CEO) Lenco AS 1 283 546 3 506 795 000 - 795 000 - Christian Helland (CVO) Amandus Invest AS 444 758 2 378 500 000 - 500 000 - Suna Alkan (CSO) Cappadocia Invest AS 214 000 1 995 225 000 - 225 000 - Jon Gunnar Solli (COO) Lotmar Invest AS 553 602 2 314 300 000 - 300 000 - Tor Arne Pedersen (CDO) Viva North AS 49 027 2 147 300 000 - 300 000 - 12 340 2 120 000 - 2 120 000 - Board of Directors FY 2021 NOK 1 000 Function Served since Term expires Renum- eration in 2021 Warrants pr 31.12.21 Shares pr 31.12.21 Holding Company Frank J Berg Chairman of the Board 2020 2022 550 000 - 3 202 040 CCPartner AS Petter W. Borg Board Member 2019 2022 275 000 - 1 995 738 Caddie Invest AS & Kewa AS Morten S. Bergesen Board Member 2019 2022 275 000 - 33 868 506 Havfonn AS & Snefonn AS Benedicte H. Fossum Board Member 2020 2022 275 000 - 67 845 Mittas AS Liv E. Lønnum Board Member 2020 2022 275 000 - 1 650 000 - 39 134 129 FY 2020 NOK 1 000 Function Served since Term expires Renum- eration in 2020 Warrants pr 31.12.20 Shares pr 31.12.20 Holding Company Frank J Berg Chairman of the Board 2020 2022 - - 2 696 957 CCPartner AS Petter W. Borg Board Member 2019 2022 - - 1 885 638 Caddie Invest AS & Kewa AS Morten S. Bergesen Board Member 2019 2022 - - 1 701 869 Havfonn AS & Snefonn AS Benedicte H. Fossum Board Member 2020 2022 - - 38 095 Mittas AS Liv E. Lønnum Board Member 2020 2022 - - - - - 6 322 559 127Cloudberry Annual report 2021 Financial statements In 2021 the renumeration to the Board of Directors was paid amounting to a total of NOK 1.7m. The nomination committee will propose the renumeration for the board members for 2022 at the Company general meeting in April 2022. Chairman of the board, Frank J Berg had a consultant agreement for the first three months in 2021. This agreement was terminated in April 2021. Please see note 27 transactions with related parties. Share based payments and long-term incentive program In accordance with the terms adopted by the General Meeting of the Company on 21 March 2020, the Board of Directors has established a share incentive scheme for the executive managers and key employees of the Group. The key conditions are as follows: The equity incentive plan may cover up to 5% of the issued shares in the Company from time to time. Allocations are proposed by the Board and subject to shareholder approval. The exercise price for the war- rants is determined by the Board in its reasonable discretion based on fair market value of the Shares on the date of the Board of Directors proposed allocation of warrants under the program. The determined exercise price is subject to approval by the general meeting in relation with issuance of warrants. The duration of the warrants from grant date is 5 years. The vesting period is 1-3 years from the grant date. The value of the warrants in the accounts are calculated at the grant date given a fair value using the Black and Scholes model. The key assumptions applied is 40% volatility (based on listed peer with 3 years historical data), 1.6% interest rate and approx. 1% dividend yield. Other inputs to the model are current stock price, exercise price and expected life of option (full duration). The table shows the outstanding warrants as of 1 January and 31 December and movements in the year: FY 2021 Outstanding warrants 01.01.2021 2 200 000 Granted in 2021 5 500 000 Exercised in 2021 - Expired in 2021 - Outstanding warrants 31.12.2021 7 700 000 Exircisable 31.12.2021 2 200 000 Charged to profit and loss statement 2021 (tNOK) 5 261 Charged to equity 2021 (tNOK) 4 388 FY 2020 Outstanding warrants 01.01.2020 - Granted in 2020 2 200 000 Exercised in 2020 - Expired in 2020 - Outstanding warrants 31.12.2020 2 200 000 Exircisable 31.12.2020 - Charged to profit and loss statement 2020 (tNOK) 1 460 Charged to equity 2020 (tNOK) 1 251 Cloudberry Annual report 2021 Financial statements 128 As of the date of the annual report the following warrants have been issued: NOK 1 000 # Warrants Grant date Expiry date Remaining years Exercise price Share Price (grant date) Warrant package #1 775 000 20.03.2020 20.03.2025 3.2 11.1 11.1 Warrant package #2 1 425 000 25.09.2020 25.09.2025 3.7 12.2 13.1 Warrant package #3 5 500 000 17.06.2021 17.06.2026 4.5 12.5 14.7 7 700 000 4.6 11.8 12.4 Per 31 December 2021, the equity incentive plan covers 3.3% of the issued shares in the Company. Note 14 Other operating expenses The table shows the breakdown on other operating expenses in 2021 and 2021. NOK 1 000 2021 2020 Lease short-term and variable 6 925 591 External accounting and auditing fees 5 023 2 350 Legal and other fees 16 058 7 303 Operating and maintenance power plants 4 426 689 Project costs 22 324 - Other 576 1 410 Total other operating expenses 55 332 12 343 Other operating expenses in 2021 include: a. Costs related to up listing from Euronext growth to Oslo Børs’ Main List in June 2021 b. Significant activity within merger & acquisitions (M&A) and associated financial and legal due diligence costs to third parties c. Project costs related to finalising the Marker wind project sold from Scanergy AS (Develop) in 2019. For information about other lease expenses and lease agreements see note 25 Lease agreements. Expenses related to statutory audit and other auditor services is presented below: NOK 1 000 2021 2020 Statutory audit 2 695 1 439 Other assuranse services 245 26 Total auditor costs 2 940 1 465 129Cloudberry Annual report 2021 Financial statements Note 15 Financial items NOK 1 000 2021 2020 Interest income 653 924 Other financial income and exchange dierences 5 767 60 Total financial income 6 420 984 NOK 1 000 2021 2020 Interest expense (9 184) (2 580) Guarantees and commitment fees (6 058) - Other financial expense and exchange dierences (17 445) (1 284) Capitalized interest 3 980 1 739 Total financial expense (28 707) (2 125) Other financial income comprises of income from placements in money market funds. The cash eect of interest payments in 2021 was NOK 6m (NOK 2.4m) related to loans and borrowings. Other interest expenses are related to short term borrowings, lease liabilities and asset retirement obligation. For further information about interest payments please see note 25 Lease agreements, note 10 Financial instruments, note 11 Hedge accounting, note 21 Cash, cash equivalents and corporate funding, note 23 Long term debt, and note 24 Provisions, guarantees and other contractual obligations. Fees for guarantees and commitment is related to the supplier guarantee at Odal Vind, see note 24, and commitment fee for undrawn facility related to the term loan facility and revolving credit facility to Sparebank 1 SR Bank of NOK 700m, expanded to NOK 1 400m per end of 2021, see note 23. Other financial expenses are mostly related to fees to Oslo Børs and exchange dierences are related to internal Group loans and bank deposits. Cloudberry Annual report 2021 Financial statements 130 Note 16 Income tax expense The table below show the tax expense in the income statement NOK 1 000 2021 2020 Tax expense in the income statement Income tax payable - - Change in deferred income tax 609 387 Tax expense in the income statement 609 387 Reconsiliation of nominal tax rate and eective tax rate Profit before income tax (63 648) (34 253) Nominal tax rate 22% 22% Expected tax expense 14 002 7 536 Eect on taxes of: Permanent dierences (1 566) (96) Not regognized tas asset related to tax losses carried forward (12 436) (7 435) Changes related to deferred tax on excess values 609 107 Changes related to other deferred tax - 275 Tax expense in the income statement 609 387 The appropriate tax rate in Norway and Sweden is 22% and 21.8% respectively. The Group does not have any operations subject to ground rent tax. 131Cloudberry Annual report 2021 Financial statements The table shows the deferred tax asset in the balance sheet. NOK 1 000 2021 2020 Temporarily dierences deferred tax asset Inventory valuation - 326 Property, plant and equipment 344 2 508 Derivatives - - Other receivables - 7 207 Tax loss carried forward 322 230 177 235 Subtotal 322 574 187 277 Of which not recognised as tax asset (246 869) (86 066) Basis for deferred tax asset 75 705 101 211 Deferred tax asset 16 655 23 423 Temporarily dierences deferred tax liability Inventory valuation (47 241) (53 077) Property, plant and equipment (402 022) (112 160) Derivatives (3 964) - Other - (3 541) Basis for deferred tax liability (453 227) (168 778) Deferred tax liability (99 710) (37 091) Reconsiliation to the statement of financial position Deferred tax asset 16 655 23 423 Deferred tax liability (99 710) (37 091) Net deferred tax liabilities in the statement of financial position (83 055) (13 668) The recognised tax liability in the balance sheet is mainly related to excess value on property plant and equipment and project inventory. As per 31 December 2021 the Group has recorded a valuation allowance of NOK 247m related to tax losses carried forward, which is not included in the recognised deferred tax asset. Deferred tax asset and liabilities are oset to the extent that the deferred taxes relate to the same fiscal authority and there is a legally enforceable right to oset current tax asset against current tax liabilities. See note 2 Accounting principles and note 3 Key accounting estimates and judgement. Cloudberry Annual report 2021 Financial statements 132 Statement of financial position Note 17 Property, plant and equipment The table below shows the split of PPE into producing power plants, assets under construction, other equip- ment and right-to-use lease assets. NOK 1 000 Producing power plants Power plant under construction Equipment Right to use - lease asset Total Accumulated cost 1.1.2021 58 476 6 008 2 144 5 149 71 778 Additions from business combinations during the year 746 366 47 334 - 405 794 105 Additions during the year 1 903 176 425 1 173 751 180 252 Transfer between groups 11 996 (14 793) - - (2 798) Transfer from inventory - 43 636 - - 43 636 Cost of disposed assets - - (751) - (751) Eects of movement in foreign exchange - (3 704) (293) - (3 997) Accumulated cost at 31.12.2021 818 742 254 905 2 273 6 305 1 082 226 Accumulated depreciations and impairment losses at 1.1.2021 10 968 - 1 526 858 13 352 Accumulated depreciations acquired assets during the year 50 822 - - - 50 822 Depreciations for the year 8 358 - 344 1 044 9 746 Impairment losses - - - - - Accomulated depreciations and impairment losses disposed assets - - (736) - (736) Eects of movements in foreigs exchange - - (82) - (82) Accumulated depreciations and impairment losses at 31.12.2021 70 148 - 1 052 1 902 73 102 Carrying amount at end of period 748 594 254 905 1 221 4 403 1 009 124 Carrying amount beginning of period 47 508 6 008 618 4 291 58 426 Estimated useful life (years) 25-50 5-10 5-50 133Cloudberry Annual report 2021 Financial statements NOK 1 000 Producing power plants Power plant under construction Equipment Right to use - lease asset Total Accumulated cost 1.1.2020 - - 21 - 21 Additions from business combinations during the year 58 476 3 167 2 098 - 63 741 Additions during the year - 2 842 25 5 149 8 016 Transfer between groups - - - - - Transfer from inventory - - - - - Cost of disposed assets - - - - - Eects of movement in foreign exchange - - - - - Accumulated cost at 31.12.2020 58 476 6 008 2 144 5 149 71 778 Accumulated depreciations and impairment losses at 1.1.2020 - - 10 - 10 Accumulated depreciations acquired assets during the year 8 743 - 1 310 - 10 053 Depreciations for the year 2 225 - 206 858 3 289 Impairment losses - - - - - Accomulated depreciations and impairment losses disposed assets - - - - - Eects of movements in foreigs exchange - - - - - Accumulated depreciations and impairment losses at 31.12.2020 10 968 - 1 526 858 13 352 Carrying amount at 31.12.2020 47 508 6 008 618 4 291 58 426 Carrying amount beginning of period - - 11 - 11 Estimated useful life (years) 25-50 5-10 5 Please see note 18 Inventory for information about projects with construction permit and backlog. Right to use lease assets include oce lease and fixed amount fall lease on power plants. For further details about lease, please see note 2 and 25 Lease agreements. During 2021 The Group has acquired Selselva Kraft, Nessakraft, Bjørgelva Kraft, and Usma Kraft and Åmotsfoss Kraft, which are all producing power plants and included in the balance sheet. Other producing power plants are Røyrmyra and Finnesetbekken. The 14 producing hydro power plants included in the Forte portfolio are equity consolidated and hence not included in the table, see further information in note 20 Investment in associated companies. Power plants under construction include projects with construction permit and where final investment decision (FID) has been made. Per 31 December the carrying amount includes Skåråna Kraft, a hydro powerplant under construction acquired in 2021 and Hån wind farm, which is an inhouse development project where Cloudberry made a final investment decision in June 2021. In some cases, Cloudberry has acquired a com- pleted and commissioned power producing plant, but which is currently under construction by a third party. In those cases, the risk and control of the power plant assets is transferred to Cloudberry and included in the accounts when the power plant is ready to produce. Included in power plants under construction are Cloudberry’s costs related to the acquisitions of these plants (the acquisition price will be transferred to Cloudberry’s accounts when the plant is ready to produce). Per 31 December some minor inhouse costs related to the expected acquisi- tion of Ramsliåna in included. The investment in Odal Vind AS which is under construction is equity consolidated and hence not included in the table, see further information in note 20 Investment in associated companies. Cloudberry Annual report 2021 Financial statements 134 The total amount of contractual obligations related to the projects Hån wind farm and Skåråna, is EUR 32.5m and NOK 62m respectively, of which EUR 14m and NOK 57m is already invested and reflected in the table above. The obligation related to Ramsliåna and Tinnkraft is total investment of NOK 36m and NOK 36m respec- tively. The investments are expected to be financed with 50% debt from the existing debt facility in SpareBank 1 SR-Bank ASA. See note 24 Provisions, guarantees and contractual obligations. The carrying amount of an PPE asset comprises its purchase price or construction cost, any costs directly attributable to bringing the asset into oper- ation, initial estimate of decommissioning obligation (asset retirement costs) and, if any, borrowing costs incurred in the construction period. Each significant component of an item is depreciated separately on a straight-line basis over the estimated useful life of the component. When determining the useful life, Cloudberry considers the useful life of the assets and the commissioning period given the power plant. Asset retirement obligation capitalised Provision for asset retirement costs have been made for Røyrmyra Wind farm. The timing is expected at the end of the concession period which also coincide with the expected useful life of the wind asset. The amount is included in the initial cost and is depreciated over the expected useful life on a straight-line basis. Asset retirement obligations have not been made for Cloudberry’s current hydro plants. The conces- sions for the hydro power plants do not have an expiry date, and the useful life of the equipment is estimated to be longer than the lease periods. It is currently assessed that because the power plants would continue to be revenue generating power producing plants, after the end of the lease periods, it is assumed that either the landowners (if the exercise their option to acquire the equipment), or the Company (which have the right to prolong the lease period if option to acquire the equipment is not exercised) will continue the use of the plants and therefore not decommission the equipment. The lease expiry dates are many years ahead (40-60 years) and the assessment will be updated over the useful life of the power plants and may change so that an asset retirement obligation will be made later, when material. Power plant assets are pledged as security for long term debt, see note 23. Projects under construction Hån wind farm The construction of Hån wind farm started on 2 August 2021. The construction work is on schedule and within budget. The project is located in Årjäng municipality, Sweden, and is planned with an installed capacity of 21 MW. The wind turbine consists of five Vestas V150 4.2 MW with a total height of 200 meters. They are expected to provide an annual production of 74 GWh. The power will be delivered to the Norwegian power grid (NO1, Oslo price area) at Marker transformer station. See also: https://www.cloudberry.no/sv/project/ han-vindpark 135Cloudberry Annual report 2021 Financial statements Note 18 Inventory Inventory consists of the capitalized costs related to development projects and inventory of government grants of el-certificates and guarantees of origin. NOK 1 000 31.12.2021 31.12.2020 Projects 153 575 196 021 Government grants - 8 Total 153 575 196 029 The table below shows the split of project inventory in projects with construction permit and project backlog. The main projects with construction permit are the wind project Duvhällen and the shallow water project Stenkalles. For Hån wind farm a final investment decision was made in June and it has therefore been trans- ferred to property plant and equipment. The backlog is a significant and risked project portfolio of exclusive projects in Norway and Sweden. FY 2021 NOK 1 000 Projects - with construction permit Projects - Backlog Total Project inventory 01.01.21 162 545 33 484 196 029 Acqusitions during the year - - - Capitalization (salary, borrowing cost, other expenses) 8 724 1 975 10 699 Realized - - - Transfer to PPE (47 050) - (47 050) Write down current year (3 010) - (3 010) Eects of movements in foreigs exchange (2 992) (101) (3 093) Project inventory 31.12.21 118 217 35 358 153 575 FY 2020 NOK 1 000 Projects - with construction permit Projects - Backlog Total Project inventory 01.01.20 - - - Acqusitions during the year 154 745 32 812 187 557 Capitalization (salary, borrowing cost, other expenses) 7 800 672 8 472 Realized - - - Transfer to PPE - - - Write down current year - - - Eects of movements in foreigs exchange - - - Project inventory 31.12.20 162 545 33 484 196 029 Cloudberry Annual report 2021 Financial statements 136 Included in the carrying amount is capitalized exter- nal cost related to the project, salary to employees working with project development and borrowing costs. Capitalised costs in 2021 consist of NOK 1.5m (NOK 1.7m) in borrowing costs, NOK 2.6m (NOK 2.0m) in sal- aries and NOK 6.6m (NOK 4.8m) in external fees. The capitalisation rate applied for borrowing costs is 3.2%. Power plants under development (Development projects) Expenses related to research activities (project opportunities) are recognised in the statement of profit or loss as they incur. Expenses related to development activities (backlog) are capitalised to the extent that the project qualifies for asset rec- ognition, the Group is technically and commercially viable and has sucient resources to complete the development work. For Cloudberry asset recognition of project inventory is done when Cloudberry has the right to explore the developing project and is in the process to enter a concession application. Before asset recognition, the projects are assessed if it meets the major key success prerequisites and it must also meet the criteria for expected future economic benefits, either from a project sale or from an in-house owned power producing power plant. The development projects are part of the Develop business segment and are mainly held for trading. A project can be reclassified to held for own use if it is selected to be kept as a long-term produc- ing asset. When a project is ready to build, and Cloudberry makes the final investment decision (FID), the projects will be reclassified to property, plant and equipment and accounted according to IAS 16. Impairment For inventory impairment is preformed if net sales value is less than the carrying value of the asset. Cloudberry has implemented a quarterly routine to go through all projects to secure satisfying progress and attention. If a project does not qualify for internally prioritization, but the projects is put on hold or discontinued, the book value is impairment tested and a sales value is assessed. If the sales value, less cost of disposal is less than book value, an impair- ment loss classified as a write down is recognized over the profit or loss statement. As per 31 December Cloudberry has an impair- ments loss of NOK 3m related to some minor hydro development projects due to lack of inhouse further development and the prospects of profitability in the projects. The impairment loss is classified as cost of goods sold. Projects with construction permit Stenkalles (project Vänern) Detailed planning and procurement is underway for Stenkalles wind farm, which is located in Sweden’s largest lake, Vänern. Cloudberry’s new o-shore team is working closely with the project team from the Dutch company, Ventolines to optimize the project and further reduce risk. Final investment decision is expected during H2 2022. Ventolines recently completed a very comparable 383 MW shallow-water project in Lake Fryslan, the Netherlands (https://www. windparkfryslan.nl). Project backlog & pipeline Björnetjernsberget Cloudberry has sent a consultation document (Samrådshandling) for the Björnetjärnsberget project in Eda municipality, Sweden. This means that the formal process related to the project to the authorities and stakeholders has begun. The project is within municipal plans for wind power. The project is planned with 15-18 wind turbines with a total installed capacity of 90-140 MW. A collaboration has also been initiated with Hilmer Andersson AB, a local sawmill that over several years has had major challenges with poor power supply, both security of supply and capacity. See also: https://www.cloudberry.no/sv/project/ bjornetjarnsberget-vindpark 137Cloudberry Annual report 2021 Financial statements Note 19 Impairment Impairment testing is done for assets, grouped at the lowest level for which they generate separately identifiable cash flow, when an impairment indicator is observed. This refers to assets classified as prop- erty, plant and equipment, and equity accounted investments. Goodwill is tested at least annually without regards to observed impairment indicators. Property plant and equipment Producing power plants and projects under con- struction are tested for impairment to the extent that indicators of impairment exist. Impairment exists when the carrying value of an asset or CGU exceeds its recoverable amount, which is the higher of its fair value less costs of disposal or its value in use. Cloudberry uses a discounted cash flow model to estimate the Groups value in use for this purpose. The subject for the impairment test is each individual hydro or wind power plant. There was no impairment indicator observed for property, plants and equipment and no impairment testing were performed. Investments in associated companies With application of the equity method, the Group determines whether it is necessary to recognise an impairment loss on its investment in its associated companies. At each reporting date, the Group determines whether there is an impairment indicator observed which indicates the need for impairment testing. If so, the Group calculates the amount of impairment as the dierence between the recovera- ble amount of the associate and the carrying value, and then recognises the loss as ‘Net Income(loss) from associated companies in the statement of profit or loss. The same method as for recoverable amount and value in use is used as for producing power plants/projects under construction. There was no relevant impairment indicator observed for no impairment testing were performed. Goodwill For Goodwill, the related segment is defined as the relevant segment CGU. The table shows the allocation of the total goodwill acquired in business combinations for impairment testing purposes, including to which segment the goodwill relates and the carrying value per 31 December. NOK 1 000 2021 2020 Goodwill Production 1 289 - Goodwill Develop 36 933 36 933 Total 38 222 36 933 The goodwill related to Develop origins from the acquisition of Scanergy AS in February 2020. The goodwill was determined to be related to the large pipeline of project prospects within wind on land and shallow water, the know-how and business connec- tions (employees), the record of accomplishments over the past 10 years for the company acquired, as well as synergies. The model for impairment testing goodwill related to the Development segment is based om the same model as for impairment testing projects, which is value in use based on a discounted cash flow model. The goodwill related to Production origins from the acquisition of Selselva Kraft AS in January 2021. The goodwill was determined to be related to a potential expansion of the power plant The model for impairment testing goodwill related to the Production segment is based on the same model for value in use and a discounted cash flow model. The impairment test did not result in any impairment losses and the Groups value in use was significantly higher than the carrying amont. For information about the acquisition of Selselva Kraft see note 5 Business Combinations. Cloudberry Annual report 2021 Financial statements 138 Note 20 Investments in associated companies Investments in associated companies are accounted for using the equity method. Odal Vind use EUR as functional and reporting currency. Transactions are translated using the average rate in the respective quarter, while assets and liabilities are translated using the exchange rate at reporting date. Exchange rate dierences are recognised in the Group accounts in other comprehensive income. The table shows the summarized investments in associated companies included in the Groups balance sheet as of 31 December 2021 Name of Entity Place of business Consolidated economic interest in 2021 Segment Princippal Activities Forte Energy Norway AS with SPV's. Assosiated company Norway 34.0% Production Hydro power Odal Vind AS Assosiated company Norway 33.4% Production Wind power under construction Forte Energy Norway AS (Forte) Cloudberry acquired 34% of Forte in November 2020. Forte owns 13 producing hydro power assets and one power otake agreement in Norway, with a combined normalized annual production of 86 GWh net to Cloudberry. The hydro power assets have an average license life of minimum 50 years. Cloudberry Production is the local manager of the Forte portfolio and delivers management services. Cloudberry has secured appropriate and customary governance mechanisms and rights for its 34% minority share interest. The majority owner of Forte is Fontavis Forte HYDRO S.A R.L. Fontavis is a part of the Swiss Life group. Shareholders agreement and daily management of Forte Forte is managed through the Shareholders agree- ment (SHA) dated 7 July 2020 between Fontavis (66%) and Cloudberry (34%). The SHA’s purpose is to govern the Parties ownership responsibilities. It has the following overall principles: · The parties shall together prepare a business plan which is updated annually and is to be approved by the Board. · Cloudberry shall be the local manager of Forte and have the responsibility for day-to-day oper- ational management and supervision (services defined in “Management Agreement”). · The Board consists of 5 directors, Fontavis shall have the right to appoint three (3), including the chairman, while Cloudberry have the right to appoint two, (2). The SHA’s material substance is that both sharehold- ers must cooperate in decisions about the business activities of Forte, Cloudberry has concluded that it is not joint control, but Cloudberry has significant influence in Forte. Odal Vind AS In December 2020 Cloudberry acquired 15% of the Odal windfarm with an option to increase the owner- ship up to 33.4% which was exercised on expiration on 30 June 2021. The transaction took place on 6 July. The Odal windfarm is currently under construction in Innlandet, Norway and is expected to be in full pro- duction by the end of H1 2022. The windfarm is con- structed together with local and well-known partners KLP and Akershus Energi. Due to some covid related delays there has been some minor cost overruns, but less than 5% of CAPEX. The overall economics of the project is unchanged for Cloudberry. 139Cloudberry Annual report 2021 Financial statements The table show the summarised financial information in the Group accounts for associated companies. FY 2021 NOK 1 000 Forte Energy Norway AS Odal Vind AS Total Book value as beginning of year 233 995 103 086 337 081 Additions of invested capital - 331 806 331 806 Share of Profit/loss for the year 15 993 (3 794) 12 198 Depreciation of excess value (2 823) - (2 823) Dividend paid to the owners - - - Correction from previos years result 726 - 726 IFRS adjustment 6 272 - 6 272 Currency translation dierences - (7 853) (7 853) Items charges to equity - - - Book value at reporting date 254 162 423 245 677 407 Excess value beginning of year 141 148 7 297 148 445 Correction against booked equity (1 445) - (1 445) Excess value 31 December 2021 136 880 19 297 156 177 Book value of equity at 31 December associated company 116 417 403 948 520 365 The IFRS adjustment in Forte relates to the power o take agreement which in the Forte accounts is recog- nised at cost, while in the Group accounts according to IFRS is recognised in the balance sheet at fair value with the change in fair value recognised in the periods profit or loss statement. The correction against booked equity relates to adjustment of the purchase price and purchase price allocation. FY 2020 NOK 1 000 Forte Energy Norway AS Odal Vind AS Total Book value as beginning of year - - - Additions of invested capital 237 551 103 086 340 637 Share of Profit/loss for the year (2 966) - (2 966) Depreciation of excess value (591) - (591) Dividend paid to the owners - - - Correction from previos years result - - - IFRS adjustment - - - Currency translation dierences - - - Items charges to equity - - - Book value at reporting date 233 994 103 086 337 080 Excess value beginning of year - - - Correction against booked equity - - - Excess value 31 December 141 194 7 184 148 378 Book value of equity at 31 December associated company 92 800 95 902 188 702 Cloudberry Annual report 2021 Financial statements 140 The table shows the summarized financial information for the equity accounted companies. The figures apply to 100% of the companies’ operations. Revenue and balance total FY 2021 FY 2020 NOK 1 000 Forte Energy Norway AS Odal Vind AS Total Forte Energy Norway AS Odal Vind AS Total Revenue 122 319 81 122 400 4 555 1 900 6 455 Operating costs (48 029) (7 487) (55 515) (3 250) (6 345) (9 595) Depreciations and amortisations (19 961) (157) (20 117) (3 703) - (3 703) Operating profit 54 330 (7 562) 46 767 (4 851) (4 445) (9 296) Net interest expenses 26 802 (2 829) 23 973 (3 871) - (3 871) Tax expense (17 849) (2 422) (20 271) 2 135 1 045 3 180 Profit for the period 63 283 (12 813) 50 470 (6 588) (3 400) (9 988) Total non current assets 949 864 1 700 911 2 650 775 896 275 458 704 1 354 979 Total current assets 116 818 518 421 635 239 61 129 47 391 108 520 Total cash and cash equivalents 99 089 399 488 498 577 32 072 217 778 249 850 Long term debt 664 126 889 502 1 553 628 693 360 - 693 360 Short term debt 59 809 120 404 180 213 23 174 84 524 107 698 Equity 342 747 1 209 426 1 552 172 272 942 639 349 912 291 The table shows Cloudberry’s share of the summarized financial information on a line for line basis for the equity accounted companies. Revenue and balance based on Cloudberrys ownership FY 2021 FY 2020 NOK 1 000 Forte Energy Norway AS Odal Vind AS Total Forte Energy Norway AS Odal Vind AS Total Revenue 41 588 27 41 615 1 549 - 1 549 Operating costs (16 330) (2 090) (18 419) (1 105) - (1 105) Depreciations and amortisations (6 787) (52) (6 839) (1 259) - (1 259) Operating profit 18 472 (2 115) 16 357 (1 649) - (1 649) Net interest expenses 9 113 (792) 8 321 (1 316) - (1 316) Tax expense (6 069) (933) (7 001) - - - Profit for the period 21 516 (3 794) 17 722 (2 966) - (2 966) Total non current assets 322 954 568 851 891 805 304 733 68 806 373 539 Total current assets 39 718 39 723 79 442 20 784 7 109 27 892 Total cash and cash equivalents 33 690 133 429 167 119 10 905 32 667 43 571 Long term debt 225 803 296 299 522 102 235 742 - 235 742 Short term debt 20 335 40 215 60 550 7 879 12 679 20 558 Equity 116 534 405 490 522 024 92 800 95 902 188 703 Pro-forma figures 2021 for the investments The investment of in Odal Vind AS from 15% to 33.4% was acquired on 6 July. The pro forma eect on the Group accounts for 2021 had been a loss of NOK 0.4m for the full year. 141Cloudberry Annual report 2021 Financial statements Note 21 Cash, cash equivalents and corporate funding The Group has entered into a corporate account agreement with SpareBank 1 SR-Bank in June 2020 for the Norwegian companies. No credit facility is incorporated in this agreement, but a larger facility with SpareBank 1 SR-Bank is established, see note 23 Long term debt. NOK 1 000 2021 2020 Bank deposits 382 911 554 556 Money market funds 732 023 50 570 Total cash and cash equivalents 1 114 934 605 126 Investments in money market funds consist of investments in KLP fund and Fondsforvaltning. These place- ments are short term placements and is readily convertible to cash. Restricted cash related to the guarantee for supplier payment to Odal Vind of NOK 82m, tax withholdings of NOK 0.5m and a guarantee deposited to a restricted bank account to the municipality at Hån wind farm of SEK 3m is not included in cash and cash equivalents, this is classified as other current assets per 31 December 2021 (NOK 153m as per 31 December 2020). A deposit for oce rent of NOK 0.7m is classified as a non-current financial asset. Cloudberry Annual report 2021 Financial statements 142 Note 22 Share capital and shareholder information The table below show the share capital, share premium and number of shares as of 31 December 2021 and 31 December 2020. NOK 1 000 2021 2020 Share capital 58 811 26 266 Share premium 2 676 225 1 061 675 Share capital and premium at 31 December 2 735 036 1 087 941 Number of shares at 31 December 235 244 646 105 065 336 The shares are at par value NOK 0.25. The following capital increases has taken place in 2021: NOK 1000 Date Number of shares Share capital Number of shares 1 January 2021 105 065 336 26 266 334 Capital increase 17 Jun 86 000 000 21 500 000 Capital increase 02 Jul 2 800 000 700 000 Capital increase 08 Dec 41 379 310 10 344 828 Number of shares and share capital 31 December 2021 235 244 646 58 811 162 The table below show the 20 largest shareholders of Cloudberry as of 31 December 2021: Number of shares Share of ownership Share of voting rights Ferd AS 26 344 827 11.2% 11.2% Joh Johannson Eiendom AS 24 283 711 10.3% 10.3% Havfonn AS (Bergesen family) 19 600 264 8.3% 8.3% HSBC Deutschland (Lloyd Fonds) 18 980 281 8.1% 8.1% Snefonn AS (Bergesen family) 14 268 242 6.1% 6.1% The Northern Trust (New Zealand Superannuation Fund) 13 539 560 5.8% 5.8% State Street Bank and Trust Comp (Swedbank Robur) 11 609 356 4.9% 4.9% Caceis Bank 9 253 700 3.9% 3.9% Clearstream Banking S.A. 6 833 195 2.9% 2.9% Danske Invest Norge Vekst 5 145 485 2.2% 2.2% Skandinaviska Enskilda Banken AB 5 000 000 2.1% 2.1% Awilco AS 4 800 000 2.0% 2.0% Gjensidige Forsikring ASA 3 302 945 1.4% 1.4% CCPartner AS (Chairman, Frank J. Berg) 3 202 040 1.4% 1.4% MP Pensjon PK 3 012 360 1.3% 1.3% Klaveness Marine Finance AS 2 613 115 1.1% 1.1% Citibank Europe plc 2 600 000 1.1% 1.1% Verdipapirfondet KLP 2 426 887 1.0% 1.0% State Street Bank and Trust Comp 2 161 632 0.9% 0.9% RBC Investor services bank S.A. 1 918 000 0.8% 0.8% Other 54 349 046 23.1% 23.1% Total number of shares 235 244 646 100.0% 100.0% 143Cloudberry Annual report 2021 Financial statements Note 23 Long term debt In November 2021 the Group increased the NOK 700 million credit facility with SpareBank 1 SR-Bank ASA (established in March 2021) to NOK 1 400m, with a possibility to increase the facility with additional NOK 500m. The facility consists of a term loan facility to finance investments in producing power plants (hydro and wind) in Norway and Sweden. The facility covers current inhouse producing assets and growth opportunities both organically and in-organically. In addition to the term loan facility, the facility with SP Bank also consists of a related revolving credit facility of NOK 300m. The Group has the following long-term borrowings as per 31 December 2021: NOK 1 000 31.12.2021 31.12.2020 Total bank loan related to power plants 301 577 26 266 Reclassified principal payment to short term interest bearing loans and borrowings (10 105) - Derivative liability realted to hedge accounting 2 615 173 Total long term interest bearing loans and borrowings 294 087 26 440 The term loan facility established in SpareBank 1 SB-Bank ASA has refinanced the two existing term loans related to Røyrmyra and Finnesetbekken, amounted to NOK 26.4m per 31 December 2020. In relation to the acquisition of Selselva Kraft AS, Bjørgelva Kraft AS and Nessakraft AS, the Group has withdrawn NOK 49.3m, NOK 24.3m and NOK 87m respectively. The total amount withdrew from the term loan facility as per 31 December is NOK 225m, this also includes drawn construction financing of NOK 40m related to the construction of Skåråna hydro power plant. The remaining debt is related to Åmotsfoss Kraft AS, this will also be refinanced with the term loan facility in 2022. The table below shows a reconciliation of opening balance, movements and closing balance of the long- term debt for the year 2021: NOK 1 000 In cash flow statement Opening balance long term debt 01.01.21 26 440 Debt take over in acqusitions non-cash 331 609 Repaid existing debt in subsidiaries for refinancing cash outflow (281 062) Drawn from new facility with refinanced cash inflow 186 348 Drawn construction loan cash inflow 40 000 Downpayments cash outflow (1 584) Change in swap derivative non cash 2 442 Reclassified principal payments to short term non-cash (10 105) Closing balance long term debt 31.12.21 294 087 Of which: Drawn from new facility with refinanced 186 348 Drawn construction loan 40 000 Proceeds from new term loans 2021 226 348 Repaid existing debt in subsidiaries for refinancing (281 062) Downpayments (1 584) Total repayment of term loan 2021 (282 646) Cloudberry Annual report 2021 Financial statements 144 The interest rate on the term loan is 3 months NIBOR pluss margin less than 2% The bank loan facilities’ terms are at a market floating interest rate with a fixed interest rate swap to reduce the interest rate risk. See note 11 Hedge accounting. The following financial covenants and collateral apply to the credit facilities: 1. Group consolidated equity ratio, minimum 30% Cloudberry Production equity ratio, minimum 30% Minimum Group equity NOK 1 800m Minimum equity Cloudberry Production AS, NOK 90m 2. Liquidity reserves Group level, minimum NOK 40m 3. Minimum secured 75% share of principal pr loan of 5 years. 4. Pledge related to Cloudberry Production AS: Pledge in shares in all subsidiaries with producing assets (SPV’s). Pledge in shares in associated companies Pledge in cash, inventory and receivables. Pledge applied for subsidiaries with producing assets: Pledge in cash and bank accounts Pledge in property plant and equipment Pledge in inventory and receivables Pledge in lease agreements for land and water/fall rights. The Group was not in any breach with covenants as per 31 December 2021. 145Cloudberry Annual report 2021 Financial statements Note 24 Provisions, guarantees and other contractual obligations Long term provisions The table shows the long-term provisions on 31 December NOK 1 000 2021 2020 PPA contract termination - 4 641 Resell obligation 9 108 9 920 Asset retirement obligation 948 914 Other 745 393 Total long term provisions 10 801 15 868 Due 1-3 years 9 108 14 561 Due > 3 years 1 693 1 307 The PPA contract termination is related to the PPA contract for the power production at Røyrmyra Wind farm is due in February 2022 and has hence been reclassified to short term. The provisions for “resell obligation” are related to obligations to prior owners of projects that will be realised. The provisions are based om estimates and are not interest bearing. The amounts are in SEK and therefor subject to currency variations. The amounts are due at FID taken on the projects. No long-term provision has been payable in 2021, movements are related to reclassification, change in currency eect, provision for interest and additions from acquisitions. NOK 1 000 PPA contract termination obligation Resell obligation Asset retirement obligation Other Total Provisions at 1.1 4 641 9 920 915 393 15 869 Change in accounting policy - - - - - Provision made during the year - - - - - Additions of acquisitions - - - 352 352 Provisions reversed during the year - - - - - Change in estimates - - - - - Interest elements of provisions - - 32 - 32 Disposals / reclassified to short term provision (4 652) - - - (4 652) Eects of movement in foreign exchange 11 (812) - - (801) Total provisions 31.12 - 9 108 948 745 10 801 Asset retirement obligation Provision for asset retirement costs is recognized when the Group has an obligation to dismantle and remove a hydro or wind power plant and to restore the site where it is located after a concession period is over. As of time of writing, the Group only have wind power assets that have recognised this obligation. Asset retirement obligations have not been made for the Group’s current hydro plants, please see note 2 account- ing policies and principles. The assessment is evaluated annually. The provision for asset retirement obligation related to Røyrmyra Wind farm was established after the acquisition of the CB Nordic Renewable and Infrastructure Fund I AS (now Cloudberry Production AS), and implementation of IFRS in the consolidated group accounts. Cloudberry Annual report 2021 Financial statements 146 The estimated cost for retirement is based on expected cost at the expiry of the concession, this is based on an estimate of today’s cost and adjusted for future inflation and discounted with estimated long-term cost of capital cost. The expected settlement date is at the end of the concession period, end of 2040. Short term debt and provisions NOK 1 000 2021 2020 Short term interest-bearing liabilities 10 105 236 767 Trade creditors 37 300 24 885 Accrued salary and bonus 6 843 5 363 Provision for project costs 6 984 6 225 Public duties payable 3 448 1 990 Settlement to buy out minority shareholders - 4 070 PPA contract termination 4 652 - Accrued fall lease 5 750 591 Other 14 349 1 883 Total short term liabilities and provisions 89 432 281 773 The short-term interest-bearing debt is per 31 December of NOK 10.1m is related to reclassification of principal payments of long-term interest bearing debt, see note 23 Long term debt. Per December 2020 the short-term interest-bearing debt of NOK 236.7m was related to the acquisitions of Forte Energy Norway AS, which was given a credit facility at the acquisition. The amount was repaid in March 2021. Trade creditors is mainly related to invoices from advisors and facilitators used in the equity emission in December 2021. Guarantees and other contractual obligations The Group has the following guarantees and bank deposits with duration: NOK 1 000 Balance sheet item Maturity date 2021 2020 Guarantee Odal Vind Bank guarantee/ bank deposit restricted 1 H1 2022 317 000 152 422 Guarantee Hån wind farm Bank deposit restricted Other current asset H2 2022 3 000 - Bank guarantee to Axpo Bank guarantee O-balace February 2022 4 640 4 858 Bank guarantee Marker Vindpark Bank guarantee O-balace August 2022 7 586 7 586 Guarantees for oce rent Escrow account Non-current financial asset February 2025 651 651 Total guarantees and deposits 332 878 165 518 1 The guarantee related to Odal Vind is related to Cloudberry’s share (33.4%) of a guarantee to the turbine provider Siemens Gamesa. Cloudberry’s share of the guarantee amounts to total NOK 317m and consist of the NOK 300m revolving credit facility and a payment to a restricted account. The amount deposited to the restricted account, total NOK 82m (also includes restricted cash for use of credit facility) is presented as other current assets in the balance sheet. On 1 February the guarantee was reduced from EUR 31m to EUR 10m. The guarantee (escrow account) to Odal per end of 2020 of NOK 152.4 m was reclassified from other current assets to cash and cash equivalents in 2021. The amount paid to escrow accounts related to Odal guarantee of NOK 82m and Hån guarantee of NOK 3m, this is classified as other current assets. Total paid in 2021 is NOK 85m. 147Cloudberry Annual report 2021 Financial statements Other obligations not recognised in the balance sheet is related to financial close of secured portfolio. The Group has per 31. December 2021 signed Sale and Purchase agreement to the following power plants with financial close in 2022. The power plant is under construction and risk of the assets are not yet transferred to Cloudberry. Because the risk is not transferred and there are conditions precedent up until the takeover e.g. that the power plants shall function according to the agreement, the assets and the obligations are not recognised in the balance sheet. NOK 1 000 Expected settlement Equity financed Debt Financed Total Ramsliåna H1 2021 18 000 18 000 36 000 Total 18 000 18 000 36 000 SPA (and close for some) of Captiva, Tinnkraft, Øvre Kvemma, Munkhyttan and Kafjärden was signed in 2022, see note 29 Subsequent events. For information about Cloudberry’s share of debt in associated companies, please see note 20. Note 25 Lease agreements Cloudberry has recognised the lease agreement with lease liabilities and corresponding right to use assets for oce lease and some minor land lease agreements related to power plants with fixed lease amount. The table shows the reconciliation of lease liability in the beginning of the year and per 31 December: NOK 1 000 2021 2020 Lease liability at 1.1. 4 401 - Lease agreements entered into during the year 1 156 5 149 Lease payments during the year (1 129) (903) Interest expense on lease liability 155 154 Lease liability at 31.12. 4 583 4 401 Lease payment of which: Payment on lease liabilities - interest (155) (154) Repayment on lease liabilities (974) (750) Lease payments during the year (1 129) (904) For split of total lease liability between current and non-current in the statement of financial position, please see table below in this note. Lease liability in the beginning of the year was related to oce lease at Bergehus, during the year the Group has recognised some minor lease agree- ments related to the fixed lease amounts on land lease related to power plants. The discount rate used to calculate the present value of future lease payments is the lessees marginal loan rate, which consists of a base rate and a credit premium. The base rate is a market rate based on a combination of the lessee’s home country and the term of the lease. Credit premiums correspond to market credit premiums for compa- nies with similar credit ratings as lessees. Credit rating is determined through individual credit assess- ment of the individual lessee. Interest expenses related to the lease obligations are recognized as a separate line in the income statement. The Group presents its lease liabilities as separate line items in the statement of financial position. Cloudberry Annual report 2021 Financial statements 148 Lease in the statement of financial position NOK 1 000 2021 2020 Assets Right-to-use asset beginning of year 4 291 - Right-to-use asset reqognised in the year 1 156 5 149 Amortisation during the year 1 044 (858) Right to use asset end of year 6 492 4 291 Liabilities Non-current liabilities 3 416 3 296 Current lease liability 1 167 1 105 Total lease liability 4 583 4 401 The table show the maturity analysis with undiscounted contractual cash outflow for the lease agreements: FY 2021 NOK 1 000 Less than a year 1-2 years 2-3 years 3-4 years More than 5 years Total Cash outflow lease liability 1 167 1 187 1 210 236 2 354 6 154 Total 1 167 1 187 1 210 236 2 354 6 154 FY 2020 NOK 1 000 Less than a year 1-2 years 2-3 years 3-4 years More than 5 years Total Cash outflow lease liability 1 105 1 127 1 150 1 173 199 4 753 Total 1 105 1 127 1 150 1 173 199 4 753 Leases in the income statement NOK 1 000 2021 2020 Operating expenses Variable fall lease payment expenses (6 035) (365) Short term lease expenses (378) (133) Low value lease expenses (512) (93) Depreciation expenses Depreciation of right to use asset (oce lease) (1 044) (858) Financial expenses Interest expenses on lease liability (155) (154) Total lease expense in the income statement (7 747) (1 470) Included in variable lease is rent to landowner where the water right lease is variable. Short term and low value rent are mostly related to oce rent in Sweden which is a short-term lease agreement. See note 15 Other operating expenses. 149Cloudberry Annual report 2021 Financial statements Other information Note 26 Earnings per share Earnings per share is calculated as profit/(loss) attributable to the equity holders of the parent company divided by the number of shares outstanding. Diluted earnings per share is aected by the warrant program for equity settled share-based payments transactions, see note 13 Employee benefits and share based payments. NOK 1 000 2021 2020 Profit/(loss) attributable to the equity holders of the company (63 038) (33 865) Weighted average number of shares outstanding for the purpose of basic earnings per shaer 155 842 058 39 098 584 Earnings per share for income attributable to the equity holders of the company - basic NOK (0.40) (0.87) Eect of potential dilutive shares Weighted average number of shares outstanding for the purpose of diluted earnings per share 159 800 849 40 528 735 Earnings per share for income attributable to the equity holders of the company - diluted NOK (0.40) (0.87) For information about share capital on 31 December see note 22 Share capital and shareholder information. Note 27 Transactions with related parties The Group has during 2021 had transactions with the following related parties NOK 1 000 Related party Relation for Cloudberry Nature of transaction 2021 2020 Bergehus Holding AS Board member and indirect shareholder Oce lease 1 278 970 Captiva Financial Services AS Chairman of the Board & Indirect shareholder Accounting fee 124 328 CCPartners AS Chairman of the Board Consultant agreement 692 1 154 Captiva Energi AS Chairman of the Board & Indirect shareholder SPA for aquisition of Skåråna Kraft - 80 000 ScanVind2 AS Chairman of the Board Acquisition of Scanvind 2 AS - 34 250 Cb4 Green Invest AS Board members & Indirect shareholders Acquisition of Skogvind AS - 82 877 Forte Energy Norway AS Associated company Management fee revenue 2 600 310 Capiva Asset Management AS Chairman of the Board & Indirect shareholder Project consultancy and operational platform asset management 4 896 - Cloudberry Annual report 2021 Financial statements 150 All transactions with related parties and within group companies are made on arm’s-length basis and in a manner similar to transactions with unrelated third parties. Services delivered in 2021 from Captiva Asset Management AS is related to project management on con- struction of Skåråna, finalizing Marker and project planning on Stenkalles. From October 2021 the operational platform of the Groups producing assets were operated by Captiva and the amount also includes manage- ment fees om power plants. See note 20 Investments in associated companies for information about management fee to Forte See note 25 Lease agreements for information about the oce lease agreement The agreements with Captiva Financial Services and CCPartners AS was terminated during H1 2021. See note 13 Employee benefits short term and long-term benefits of management The Group has the following balance sheet item recognised to related parties NOK 1 000 2021 2020 Accounts receivables - 388 Other current receivables - - Accounts payable - 144 Other liabilities - - As per 31 December there were no employee or shareholder loans. Transactions within group companies relate to consultant fees (development), loans and finance agree- ments. All group transactions have been eliminated in the consolidated group accounts. Current receivables are related to claims arising from purchase and sale of services as well as accrued interest on group loans. Short term receivables are unsecured and non-interest bearing. Long term loans between group companies and the applied interest rate reflect the risk related to the loan and is at market terms. The group has not made any provisions for losses on current receivables from related parties as of 31 December 2021. Current liabilities are related to purchase of services and accrued interest on loans. 151Cloudberry Annual report 2021 Financial statements Note 28 List of subsidiaries and equity accounted companies The following companies are fully consolidated (subsidiaries) or accounted for with the equity method (associated companies) as per 31 December 2021. Name of Entity Accouned as Place of business Ownership intrest Part of Group from date Segment Cloudberry Clean Energy ASA Subsiduary Norway 100% 24.11.2017 Corporate Cloudberry Production AS Subsiduary Norway 100% 15.02.2020 Production Røyrmyra Vindpark AS Subsiduary Norway 100% 15.02.2020 Production Finnesetbekken Kraftverk AS Subsiduary Norway 100% 15.02.2020 Production Cloudberry Develop AS Subsiduary Norway 100% 15.02.2020 Development Cloudberry Oshore Wind AB Subsiduary Sweden 100% 15.02.2020 Development Duvhällen Vindpark AB Subsiduary Sweden 100% 15.02.2020 Development Hån Vindpark AB Subsiduary Sweden 100% 15.02.2020 Development Hån 22kV AS Subsiduary Norway 100% 15.02.2020 Development Cloudberry Utveckling AB Subsiduary Sweden 100% 15.02.2020 Development Cloudberry Projekt AB Subsiduary Sweden 100% 15.02.2020 Development Kånna Vindpark AB Subsiduary Sweden 100% 15.02.2020 Development Ljunga Vindpark AB Subsiduary Sweden 100% 15.02.2020 Development Cloudberry Oshore Wind AS Subsiduary Norway 100% 22.09.2020 Development Rewind Vänern AB Subsiduary Sweden 100% 22.09.2020 Development Cloudberry Wind AB Subsiduary Sweden 100% 15.02.2020 Development Skogvind AS Subsiduary Norway 100% 31.08.2020 Development Rewind Oshore AB Subsiduary Sweden 66% 15.02.2020 Development Forte Energy Norway AS Associated Company Norway 34.0% 15.11.2020 Production Odal Vind AS Associated Company Norway 33.4% 23.12.2020 Production Stenkalles Vind AB Subsiduary Sweden 100% 11.03.2021 Development Selselva Kraft AS Subsiduary Norway 100% 13.01.2021 Production Skåråna Kraft AS Subsiduary Norway 100% 24.02.2021 Production Bjørgelva Kraft AS Subsiduary Norway 100% 30.06.2021 Production Næssakraft AS Subsiduary Norway 100% 30.06.2021 Production Usma Kraft AS Subsiduary Norway 100% 20.08.2021 Production Åmotfoss AS Subsiduary Norway 100% 01.12.2021 Production Oxenstierna Vind AB Subsiduary Sweden 100% 21.12.2021 Development Cloudberry Annual report 2021 Financial statements 152 Acquired companies in 2022 Name of Entity Accouned as Place of business Ownership intrest Part of Group from date Segment Ramsliåna Subsiduary Norway 100% Q1 2022 Production Tinnkraft Subsiduary Norway 100% Q1 2022 Production Captiva Group 60% Q1 2022 Operations Captiva Digital Services AS Subsiduary Norway Captiva Asset Management AS Subsiduary Norway Caprtiva Financial Services AS Subsiduary Norway Enestor AS Associated Company Norway Proxima HydroTech AS Associated Company Norway Captiva Digital Services GmbH Subsiduary Captiva Digital Solutions AS Subsiduary Norway Kraftanmelding AS Subsiduary Norway Fjord Energi AS Subsiduary Norway Broentech Solutions AS Subsiduary Norway Captiva Energi AS Subsiduary Norway SPV 1903 AS Associated Company Norway Munkhyttan AB Subsiduary Sweden 100% Q1 2022 Development Entities which will be acquired in 2022 are included in secured portfolio and will be consolidated in 2022. Entities with acquisition close after 2022 is included in secured portfolio, but not included in the table. Note 29 Subsequent events Acquisitions and significant agreements Acquisition of 60% of Captiva Digital Services AS “the Captiva Group” On 7 January 2022 Cloudberry Clean Energy ASA entered a share purchase agreement for the acqui- sition of 60% of the shares in Captiva Digital Services AS from Captiva Capital Partner AS. Captiva Digital Services AS with subsidiaries “The Captiva Group” is a data-driven operator, manager and developer of renewable energy in the Nordics. The Group comprise of the following business areas with respective subsidiaries and associated companies: Captiva Asset Management AS with subsidiaries, delivers management services within operations and maintenance, development and construc- tion, technical and commercial, and finance and accounting services to renewable energy projects in the Nordics. Captiva Digital Solutions AS with subsidiaries, deliv- ers digital services to renewable energy projects with operational intelligence, visualization, compliance and reporting solutions. Captiva Energi AS with subsidiaries, delivers devel- opment projects within renewable hydro energy and owns a producing hydro power plant, Jåstad Kraft (3.2GWh) located in Ullensvang on the West coast of Norway. Captiva Energi has realised 11 hydro projects the past 5 years. The Captiva Group will represent a new segment for Cloudberry, “Operations”. The agreed enterprise value for the Captiva Group was NOK 160 million on a cash and debt free basis, taken into account normalized working capital (100% basis). 153Cloudberry Annual report 2021 Financial statements At completion the Company has paid a preliminary purchase price of NOK 101m. 50% of the preliminary purchase price has been settles with Cloudberry shares, this was 3.484.041 shares of par value NOK 0.25 and a fair value of NOK 14.50 per share (share capital increase with NOK 0.87m). The remaining 50% has been settled by cash payment of NOK 50.5m. The purchase price is subject to adjustments after audited completion accounts, this will be settled with cash. The purchase price is based on estimated comple- tion accounts. Estimated equity and net acquired assets in the estimated unaudited consolidated bal- ance sheet per 7 January 2022 is NOK 30m (based on 100%, including minority interests). The transac- tions will be accounted as a business combination and the purchase price allocation is in progress. The following table show the preliminary purchase price allocation: NOK 1 000 Captiva Acquisition date 07.01.2022 Voting rights/shareholding acquired through the acquisition 60% Total voting rights after the acqusition 60% Non controlling interests 40% Consideration Cash 50 519 Shares 50 519 Total acquisition cost 101 037 Book value of net assets (se table below) 40 290 Identification of excess value. attributable to: Inventory 1 282 Property, plant and equipment 66 564 Other 1 500 Gross excess value 69 346 Deferred tax on excess value (14 926) Net excess value 54 420 Fair value of net acquired assets excluding goodwill 94 710 Of which: Non controlling interest 37 884 Controlling interests 56 826 Total acquisition cost 101 037 Fair value of net aquired assets ex goodwill 56 826 Goodwill (controlling interests) 44 212 Cloudberry Annual report 2021 Financial statements 154 Book value net aquired assets NOK 1 000 Captiva Deferred tax asset - Intangible assets 27 508 Property, plants and equipment 362 Goodwill 998 Other non-current assets 5 628 Financial non-current assets 5 678 Inventory - Other current assets 41 429 Cash and cash equivalents 159 665 Acquired assets 241 267 Interest bearing debt, long term 20 264 Current liabilities - Deferred tax liability 1 960 Other liabilities 178 754 Net asset value aquired assets 40 290 Total acquisition cost 101 037 Non cash consideration 50 519 Cash consideration 50 519 Cash in acquired company (159 665) Net cash outflow at acquisition (inflow) (109 146) Cloudberry has the option to acquire the remaining 40% of the Captiva Group until 30 June 2025 at a pre-determined price. Cloudberry and Captiva Capital Partners AS (seller) has entered into a share- holder agreement which govern their rights and obligations as owners of Captiva Digital Services AS. Chairman of the Board of Directors in Cloudberry; Frank J Berg, through CCPartner AS and related party Mothe Invest AS held a minority ownership (33%) of Captiva Capital Partner AS (the seller). Tinnkraft and Øvre Kvemma On 1 February 2022 Cloudberry Production acquired 100% of the shares in Tinnkraft AS, a producing hydro power plant, and entered a share purchase agree- ment for the acquisition of the hydro power project Øvre Kvemma. Tinnkraft is located in Tinn municipality, in the attrac- tive NO 2 price area. The annual average power production is 6.3 GWh. The total purchase price was NOK 27.7m and was paid with cash settlement. The acquisition of the producing power plant will be accounted as a busi- ness combination and the purchase price allocation will be performed in first quarter 2022. Tinnkraft AS will be consolidated in the Group accounts from 1 February 2022. Øvre Kvemma, developed by NGK Utbygging AS (NGKU), is situated in Lærdal municipality, in the NO5 price area. The estimated, annual power production is 19.4 GWh. The transaction will be closed once the power plant is completed during H1 2024, and after a commissioning period. Munkhyttan On 3 February Cloudberry Develop acquired 100% of the shares in Munkhyttan Vindkraft AB. The company owns a late-stage development project, Munkhyttan, located in Lindesberg municipality, which is in SE2 price area of Sweden. Munkhyttan is a project with construction permit for 18 MW. Cloudberry has also secured an option to acquire additional 18MW project Munkhyttan II, on the same terms. This project is in concession process. The acquisition will be accounted as an asset acquisition. 155Cloudberry Annual report 2021 Financial statements Kafjärden On 4 February Cloudberry Clean Energy ASA signed the acquisition of the project Kafjärden with related assets. Kafjärden is an onshore wind power project in SE3 area in Sweden. The project has a construction permit for 18-40 MW and parts of the infrastructure is already in place, including roads, crane pads, foundation and power grid. The project is planned to be completed by end of 2023. The acquisition will be accounted as an asset acquisition. Russia invades Ukraine On 24 February 2022 Russia attacked Ukraine in a military invasion. As of the date of this report the war is ongoing. Russia, as the largest exporter of natural gas to Europe, has since been the subject of heavy sanctions and it may seem as the western countries will plan to cut all import of Russian gas as soon as possible. The result has been record-high gas and power prices in the first quarter and on the front of the price curve. The market is heavily influenced by the war, and it may cause long term eects and changes to the European energy markets. Cloudberry Annual report 2021 <Chapter name> 156 157Cloudberry Annual report 2021 <Chapter name> Parent company financial statements Statement of profit or loss 159 Statement of financial position 160 Statement of cash flows 162 Notes to the parent company financial statements 163 Note 1 General information 163 Note 2 General accounting policies and principles 163 Note 3 Sales revenues 165 Note 4 Employee benefits and share based payments 165 Note 5 Other operating expenses 169 Note 6 Financial items 169 Note 7 Income tax expense 170 Note 8 Property, plant and equipment 171 Note 9 Subsidiaries and investment in associated companies 171 Note 10 Cash, cash equivalents and corporate funding 172 Note 11 Equity capital, share capital and shareholder information 172 Note 12 Short term debt and provisions 174 Note 13 Earnings per share 174 Note 14 Intercompany items between companies in the same group 175 Note 15 Subsequent events 175 Note 16 Covid-19 175 Cloudberry Annual report 2021 Financial statements 158 159Cloudberry Annual report 2021 Financial statements Statement of profit or loss 1 January - 31 December NOK 1 000 Note 2021 2020 Revenue 3 2 100 118 Total revenue 2 100 118 Cost of goods sold - - Salary and personnel expenses 4 (27 748) (16 700) Other operating expenses 5 (17 534) (7 265) EBITDA (43 182) (23 848) Depreciation and amortizations 8 (109) (12) Operating profit (EBIT) (43 290) (23 860) Financial income 6 10 276 1 161 Financial expenses 6, 14 (12 747) (1 462) Profit/(loss) before tax (45 761) (24 162) Income tax expense 7 - - Profit/(loss) after tax (45 761) (24 162) Loss brougt forward (45 761) (24 162) Net brought forward (45 761) (24 162) Cloudberry Annual report 2021 Financial statements 160 Statement of financial position NOK 1 000 Note 31.12.2021 31.12.2020 ASSETS Non-current assets Property, plant and equipment 8 918 24 Investment in subsiduaries 9 1 261 135 283 584 Investment in associated companies 9 - 237 551 Loan to group companies 14 106 995 248 419 Total non-current assets 1 369 048 769 578 Other current assets 701 766 Receivables group companies 15 372 466 467 Cash and cash equivalents 10 958 998 552 483 Total current assets 1 332 164 553 716 TOTAL ASSETS 2 701 213 1 323 294 161Cloudberry Annual report 2021 Financial statements Statement of financial position NOK 1 000 Note 31.12.2021 31.12.2020 EQUITY AND LIABILITIES Equity Share capital 11 58 811 26 266 Sharepremium 11 2 676 075 1 061 675 Total paid in capital 2 734 886 1 087 941 Other equity 11 (68 205) (26 832) Total other equity (68 205) (26 832) Total equity 2 666 681 1 061 110 Current liabilities Interest-bearing short term liabilities 12, 14 - 236 767 Accounts payable 12, 14 23 358 18 602 Public duties payable 12 1 085 877 Other current liabilities 12 10 089 5 938 Total current liabilities 34 531 262 184 Total liabilities 34 531 262 184 TOTAL EQUITY AND LIABILITIES 2 701 213 1 323 294 Oslo, 22 March 2022 The Board of Directors of Cloudberry Clean Energy ASA Frank J. Berg Chair of the Board Morten Bergesen Board member Petter W. Borg Board member Benedicte Fossum Board member Liv Lønnum Board member Anders J. Lenborg CEO Cloudberry Annual report 2021 Financial statements 162 Statement of cash flows NOK 1 000 Note 1.1.-31.12.2021 1.1.-31.12.2020 Cash flow from operating activeties Profit/(loss) before tax (45 761) (24 162) Depreciation 8 109 12 Net interest paid/received (7 094) 769 Share based payment - non cash to equity 4 388 1 251 Change in accounts payable 12 4 757 18 544 Change in other accruals 4 423 3 516 Net cash flow from operating activities (39 180) (69) Cash flow from investing activeties Intrest received 6 9 762 694 Investments in property, plant and equipment 8 (1 003) (25) Acquisition of shares in subsidiaries, net liquidity outflow 9 (500 000) (277 551) Investments in associated companies 9 (470 575) (248 419) Group contributions/dividends received - 467 Net cash flow from (used in) investing activities (961 816) (524 834) Cash flow from financing activeties Proceeds from short term intrestbearing debt 12 - 236 767 Repayment of short-term interest-bearing liabilities (236 767) - Interest paid 6 (2 668) (1 462) Share capital increase 11 1 646 945 836 859 Net cash flow from financing activities 1 407 510 1 072 163 Total change in cash and cash equivalents 406 515 547 260 Cash and cash equivalents at start of period 10 552 483 5 223 Cash and cash equivalents at end of period 10 958 997 552 483 163Cloudberry Annual report 2021 Financial statements Notes to the parent company financial statements Note 1 General information Corporate information Cloudberry Clean Energy ASA, “the Company” is incorporated and domiciled in Norway. The address of its registered oce is Frøyas gate 15, NO-0273 Oslo, Norway. Cloudberry Clean Energy ASA was established on 10 November 2017. The Company is listed on Oslo Børs’ Main List with ticker CLOUD. Cloudberry Clean Energy ASA, its subsidiaries and investments in associated companies (“the Group”) is a Nordic renewable power producer and devel- oper. The Group has an integrated business model across the life cycle of hydro- and wind power plants including project development, financing, construc- tion (normally outsourced), ownership and lead manager of operations. The financial statement of the Company and the consolidated statements of the Group, presented earlier in this report, was approved by the Board of Directors on 22 March 2022. The statements have been prepared under the assumption that the Cloudberry Group is a going concern, and that this assumption was appropriate at the date of approval of the Financial Statements. Note 2 General accounting policies and principles Statement of compliance The financial statements of Cloudberry Clean Energy ASA are prepared in accordance with the Norwegian Accounting Act of 1998 and Norwegian Generally Accepted Accounting Principles (NGAAP). Basis for preparation The financial statements have been prepared on a historical cost basis. Accounting estimates and judgements In preparing the financial statements, assumptions and estimates that have had eect on the amounts and presentation of assets and liabilities, income and expenses and contingent liabilities must be made. Actual results could dier from these assump- tions and estimates. Foreign currency translation The functional currency and presentation cur- rency of the Company is Norwegian kroner (NOK). Transactions in foreign currency are translated at the rate applicable on the transaction date. Monetary items in a foreign currency are translated into NOK using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at their historical cost 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 using the exchange rate applicable on the balance sheet date. Employee benefits Wages, salaries, bonuses, pension and social security contributions, paid annual leave and sick leave are accrued in the period in which the asso- ciated services are rendered by employees of the Company. The Company has pension plans for employees that are classified as defined contri- bution plans. Contributions to defined contribution Cloudberry Annual report 2021 Financial statements 164 schemes are recognized in the statement of profit or loss in the period in which the contribution amounts are earned by the employees. Cloudberry has an equity incentive plan for top management and key employees. The programme includes the issue of warrants for shares in the company. Interest income and expenses Interest income and expenses are recognized in the income statement as they are accrued, based on the eective interest method. Income tax expense The tax charge in the profit or loss account consists of tax payable for the period and the change in deferred tax. Deferred tax is calculated at the tax rate at 22 % on the basis of tax-reducing and tax- increasing temporary dierences that exist between accounting and tax values, and the tax loss carried forward at the end of the accounting year. Tax- increasing and tax-reducing temporary dierences that reverse or may reverse in the same period are set o and entered net. The net deferred tax receiv- able is entered on the balance sheet to the extent that it is likely that it can be utilised. Classification and valuation of fixed assets Fixed assets consist of assets intended for long- term ownership and use. Fixed assets are valued at acquisition cost less depreciation and write-downs. Long-term liabilities are entered on the balance sheet at the nominal amount at the time of the transaction. Plant and equipment is capitalised and depreciated over the economic lifetime of the asset. Significant items of plant and equipment that consist of several material components with dierent lifetimes are broken down in order to establish dierent depreci- ation periods for the dierent components. Direct maintenance of plant and equipment is expensed on an ongoing basis under operating costs, while additions or improvements are added to the asset’s cost price and depreciated in line with the asset. Plant and equipment is written down to the recover- able amount in the event of a fall in value that is not expected to be temporary. The recoverable amount is the higher of the net sales value and the value in use. Value in use is the present value of future cash flows related to the asset. The write-down is reversed when the basis for the write-down is no longer present. Classification and valuation of current assets and liabilities Current assets and short-term liabilities consist normally of items that fall due for payment within one year of the balance sheet date, as well as items related to the stock cycle. Current assets are valued at the lower of acquisition cost and fair value. Short- term liabilities are entered on the balance sheet at the nominal amount at the time of the transaction. Subsidiaries and investment in associated companies Subsidiaries and associated companies are valued using the cost method in the company accounts. The investment is valued at acquisition cost for the shares unless a write-down has been necessary. A write- down to fair value is made when a fall in value is due to reasons that cannot be expected to be temporary and such write-down must be considered as necessary in accordance with good accounting practice. Write- downs are reversed when the basis for the write-down is no longer present. Dividends, group contributions and other distri- butions from subsidiaries are posted to income in the same year as provided for in the distributor’s accounts. To the extent that dividends/ group contri- butions exceed the share of profits earned after the date of acquisition, the excess amounts represent a repayment of invested capital, and distributions are deducted from the investment’s value in the balance sheet of the parent company Receivables Receivables from customers and other receivables are entered at par value after deducting a provision for expected losses. The provision for losses is made on the basis of an individual assessment of the respective receivables. Short term investments Short-term investments (shares and interests valued as current assets) are valued at the lower of acqui- sition cost and fair value on the balance sheet date. Dividends and other distributions received from the companies are posted to income under other financial income. 165Cloudberry Annual report 2021 Financial statements Statement of cash flow The cash flow statement has been prepared using the indirect method. Cash and cash equivalents consist of cash, bank deposits and other short-term, liquid investments. Events after the reporting period New information on the Company’s financial position on the end of the reporting period which becomes known after the reporting period, is recorded in the annual accounts. Events after the reporting period that do not aect the Company’s financial position on the end of the reporting period, but which will aect the Company’s financial position in the future, are disclosed if significant. Note 3 Sales revenues NOK 1 000 2021 2020 Fees management 2 100 118 Total revenue 2 100 118 Note 4 Employee benefits and share based payments Employee benefits are accrued in the period in which the associated services are rendered by the employees of the Company. The table below shows the employee benefits accrued in the period. NOK 1 000 2021 2020 Salaries -18 749 -12 721 Payroll tax -3 628 -1 806 Pension costs -724 -359 Share based payment -4 388 -1 251 Other benefits -259 -562 Total personell expenses -27 748 -16 700 Average number of full-time equivalents (FTEs) 7 5 Number of full-time equivalents as 31.12 (FTEs) 8 7 Included in salaries are fees to board members. Pension The Company has an established pension scheme that is classified as a defined contribution plan, the pen- sion scheme is in line with the requirements of the law. Contributions to the defined contribution schemes are recognised in the consolidated statement of profit and loss in the period in which the contribution amounts are earned by the employees. The defined contribution plan does not commit the Company beyond the amounts contributed. Cloudberry Annual report 2021 Financial statements 166 Renumeration of Executive Group management The renumeration of the Executive Group Management is based on a fixed salary, including personal benefits such as free telephone and health insurance, a variable group performance bonus scheme, pension bene- fits, and a share-based long term incentive program. The table below shows the renumeration in 2021 NOK 1 000 Anders Lenborg (CEO) Christian Helland (CVO) Suna Alkan (CSO) Jon Gunnar Solli (COO) Tor Arne Pedersen (CDO) Total Salary 2 700 2 100 1 640 1 850 1 850 10 140 Bonus 1 350 700 400 600 150 3 200 Pension costs 83 77 87 0 87 334 Share based payment 1 729 1 259 355 586 401 4 330 Total reportable benefits paid 2021 5 862 4 136 2 482 3 036 2 488 18 004 The table below shows the renumeration in 2020 NOK 1 000 Anders Lenborg (CEO) Christian Helland (CVO) Suna Alkan (CSO) Jon Gunnar Solli (COO) Tor Arne Pedersen (CDO) Total Salary 1 864 1 448 1 306 1 490 1 330 7 437 Bonus 1 150 600 500 600 600 3 450 Pension costs 66 62 69 63 68 328 Share based payment 426 269 120 160 149 1 124 Total reportable benefits paid 2020 3 506 2 378 1 995 2 314 2 147 12 340 The Board of Directors have set the target KPI for the group performance bonus scheme that was applicable for achievements in 2021. For 2022 the Group has established a compensation committee which will set the targets for 2022. 167Cloudberry Annual report 2021 Financial statements Total renumeration, warrants and shares for top management in 2021: Executive group management FY 2021 NOK 1 000 Holding Company Shares pr 31.12.21 Total renum- aration 2021 Warrants grantet 2021 Warrants pr 01.01.21 Warrants grantet total pr 31.12.21 Warrants exirciced Anders Lenborg (CEO) Lenco AS 1 323 546 5 862 1 900 000 795 000 2 695 000 - Christian Helland (CVO) Amandus Invest AS 452 758 4 136 1 500 000 500 000 2 000 000 - Suna Alkan (CSO) Cappadocia Invest AS 233 448 2 482 300 000 225 000 525 000 - Jon Gunnar Solli (COO) Lotmar Invest AS 600 498 3 036 600 000 300 000 900 000 - Tor Arne Pedersen (CDO) Viva North AS 139 128 2 488 300 000 300 000 600 000 - 18 004 4 600 000 2 120 000 6 720 000 - FY 2020 NOK 1 000 Holding Company Shares pr 31.12.20 Total renum- aration 2020 Warrants grantet 2020 Warrants pr 01.01.20 Warrants grantet total pr 31.12.20 Warrants exirciced Anders Lenborg (CEO) Lenco AS 1 283 546 3 506 795 000 - 795 000 - Christian Helland (CVO) Amandus Invest AS 444 758 2 378 500 000 - 500 000 - Suna Alkan (CSO) Cappadocia Invest AS 214 000 1 995 225 000 - 225 000 - Jon Gunnar Solli (COO) Lotmar Invest AS 553 602 2 314 300 000 - 300 000 - Tor Arne Pedersen (CDO) Viva North AS 49 027 2 147 300 000 - 300 000 - 12 340 2 120 000 - 2 120 000 - Board of Directors FY 2021 NOK 1 000 Function Served since Term expires Renum- eration in 2021 Warrants pr 31.12.21 Shares pr 31.12.21 Holding Company Frank J Berg Chairman of the Board 2020 2022 550 000 - 3 202 040 CCPartner AS Petter W. Borg Board Member 2019 2022 275 000 - 1 995 738 Caddie Invest AS & Kewa AS Morten S. Bergesen Board Member 2019 2022 275 000 - 33 868 506 Havfonn AS & Snefonn AS Benedicte H. Fossum Board Member 2020 2022 275 000 - 67 845 Mittas AS Liv E. Lønnum Board Member 2020 2022 275 000 - 1 650 000 - 39 134 129 FY 2020 NOK 1 000 Function Served since Term expires Renum- eration in 2020 Warrants pr 31.12.20 Shares pr 31.12.20 Holding Company Frank J Berg Chairman of the Board 2020 2022 - - 2 696 957 CCPartner AS Petter W. Borg Board Member 2019 2022 - - 1 885 638 Caddie Invest AS & Kewa AS Morten S. Bergesen Board Member 2019 2022 - - 1 701 869 Havfonn AS & Snefonn AS Benedicte H. Fossum Board Member 2020 2022 - - 38 095 Mittas AS Liv E. Lønnum Board Member 2020 2022 - - - - - 6 322 559 In 2021 the renumeration to the Board of Directors was paid amounting to a total of NOK 1.7m. The nomination committee will propose the renumeration for the board members for 2022 at the Company general meeting in April 2022. Cloudberry Annual report 2021 Financial statements 168 Share based payments and long-term incentive program In accordance with the terms adopted by the General Meeting of the Company on 21 March 2020, the Board of Directors has established a share incentive scheme for the executive managers and key employees. The key conditions are as follows: The equity incentive plan may cover up to 5% of the issued shares in the Company from time to time. Allocations are proposed by the Board and subject to shareholder approval. The exercise price for the war- rants is determined by the Board in its reasonable discretion based on fair market value of the Shares on the date of the Board of Directors proposed allocation of warrants under the program. The determined exercise price is subject to approval by the general meeting in relation with issuance of warrants. The duration of the warrants from grant date is 5 years. The vesting period is 1-3 years from the grant date. The value of the warrants is at the grant date given a fair value using the Black and Scholes model. The key assumptions applied is 40% volatility and 1% interest rate. The table shows the outstanding warrants as of 1 January 2021 and 31 December 2021 and movements in the year: Outstanding warrants 01.01.2021 2 200 000 Granted in 2021 5 500 000 Exercised in 2021 - Expired in 2021 - Outstanding warrants 31.12.2021 7 700 000 Exircisable 31.12.2021 2 200 000 Charged to profit and loss statement 2021 (tNOK) 5 261 Charged to equity 2021 (tNOK) 4 388 Outstanding warrants 01.01.2020 - Granted in 2020 2 200 000 Exercised in 2020 - Expired in 2020 - Outstanding warrants 31.12.2020 2 200 000 Exircisable 31.12.2020 - Charged to profit and loss statement 2020 (tNOK) 1 460 Charged to equity 2020 (tNOK) 1 251 As of the date of the annual report the following warrants have been issued: NOK 1 000 # Warrants Grant date Expiry date Remaining years Exercise price Share Price (grant date) Warrant package #1 775 000 20.03.2020 20.03.2025 3.22 11.1 11.1 Warrant package #2 1 425 000 25.09.2020 25.09.2025 3.74 12.2 13.1 Warrant package #3 5 500 000 17.06.2021 17.06.2026 4.46 12.5 14.66 7 700 000 4.55 11.8 12.4 There has been no payment of renumeration to the Board of Directors in 2020, this will be paid in May 2021. 169Cloudberry Annual report 2021 Financial statements Note 5 Other operating expenses The table shows the breakdown on other operating expenses in 2021 and 2020. NOK 1 000 2021 2020 Rental of oce and equipment (1 148) (1 033) External accounting and auditing fees (3 209) (904) Legal and other fees (9 931) (4 797) Other (3 245) (531) Total other operating expenses (17 534) (7 265) Other operating expenses in 2021 include: a. Costs related to up listing from Euronext growth to Oslo Børs’ Main List in June 2021 b. Significant activity within merger & acquisitions (M&A) and associated financial and legal due diligence costs to third parties Expenses related to statutory audit and other auditor services is presented below: NOK 1 000 2021 2020 Statutory audit (2 149) (522) Other assuranse services (245) (26) Total auditor costs (2 394) (548) Note 6 Financial items Financial income NOK 1 000 2021 2020 Income from subsidiaries 8 004 467 Intrest income 269 587 Other financial income and exchange dierences 514 3 Increase in market value of financial current assets 1 489 103 Total financial income 10 276 1 161 Financial expense NOK 1 000 2021 2020 Interest expense (2 668) (921) Other financial expense and exchange dierences (10 079) (541) Total financial expense (12 747) (1 462) Cloudberry Annual report 2021 Financial statements 170 Note 7 Income tax expense This years tax expense NOK 1 000 2021 2020 Tax expense in the income statement Entered tax on ordinary profit/loss: - - Payable tax - - Changes in deferred tax assets - - Tax expense on ordinary profit/loss - - Taxable income: Ordinary result before tax (45 761) (24 162) Permanent dierences (56 309) (27 230) Changes in temporary dierences 103 (7) Received intra-group contribution - 467 Taxable income (101 967) (50 931) Payable tax in the balance: Payable tax on this year's result - (103) Payable tax on received Group contribution - 103 Total payable tax in the balance - - The tax eect of temporary dierences and loss for to be carried forward that has formed the basis for deferred tax and deferred tax advantages, specified on type of temporary dierence. NOK 1 000 2020 2019 Dierence Deferred tax asset Property, plant and equipment (97) 6 103 Accumulated tax loss carried forward (145 923) (43 956) 101 967 Not included in the deferred tax calculation 146 020 43 950 (102 071) Basis for deferred tax asset in the balance sheet - - - Basis for calculation of deferred tax asset (146 020) (43 950) 102 071 Deferred tax asset 32 124 9 669 (22 456) Deferred tax asset is not recognised in the balance sheet. 171Cloudberry Annual report 2021 Financial statements Note 8 Property, plant and equipment NOK 1 000 Equipment Total Accumulated cost 1.1.2021 46 46 Additions during the year 1 003 1 003 Accumulated cost at 31.12.2021 1 049 1 049 Accumulated depreciations and impairment losses at 1.1.2021 23 23 Depreciations for the year 109 109 Accumulated depreciations and impairment losses at 31.12.2021 131 131 Carrying amount at 31.12.2021 918 918 Estimated useful life (years) 3-5 NOK 1 000 Equipment Total Accumulated cost 1.1.2020 21 21 Additions during the year 25 25 Accumulated cost at 31.12.2020 46 46 Accumulated depreciations and impairment losses at 1.1.2020 10 10 Depreciations for the year 12 12 Accumulated depreciations and impairment losses at 31.12.2020 23 23 Carrying amount at 31.12.2020 24 24 Estimated useful life (years) 3-5 Note 9 Subsidiaries and investment in associated companies Name of Entity Place of business Owner share Share of votes Purchase cost Equity Profit Cloudberry Production AS Subsiduary Oslo, Norway 100% 100% 1 061 072 81 061 650 Cloudberry Develop AS Subsiduary Oslo, Norway 100% 100% 200 063 97 066 (24 173) 1 261 135 178 127 (23 523) Cloudberry Annual report 2021 Financial statements 172 Note 10 Cash, cash equivalents and corporate funding NOK 1 000 2021 2020 Free cash 226 975 500 668 Money market funds 732 023 50 570 Restricted cash - 1 244 Total cash 958 997 552 483 Placement in money market fund is a short-term placement. The placement is made to receive interest and is cash equivalent. Cash deposits for tax deduction account (restricted funds) and deposit for rent are NOK 1 379 thousand and are not incudes as cash. Note 11 Equity capital, share capital and shareholder information The table below show the changes in equity in 2020 and 2021: NOK 1 000 Share capital Share premium Total paid in capital Other Equity Retained earnings Total other equity Total equity capital Equity as at 01.01 2020: 950 7 800 8 750 - (3 921) (3 921) 4 829 Sharecapital increase 25 316 1 053 875 1 079 191 - - - 1 079 191 Loss for the period - - - - (24 162) (24 162) (24 162) Share based payment - - - 1 251 - 1 251 1 251 Equity as at 31.12 2020 26 266 1 061 675 1 087 941 1 251 (28 083) (26 832) 1 061 110 - - - - - - - Equity as at 01.01 2021: 26 266 1 061 675 1 087 941 1 251 (28 083) (26 832) 1 061 110 Sharecapital increase 32 545 1 614 400 1 646 945 - - - 1 646 945 Loss for the period - - - - (45 761) (45 761) (45 761) Share based payment - - - 4 388 - 4 388 4 388 Equity as at 31.12 2021 58 811 2 676 075 2 734 886 5 639 (73 844) (68 205) 2 666 681 The table below show the share capital, share premium and number of shares as of 31 December 2021 and 31 December 2020. NOK 1 000 2021 2020 Share capital 58 811 26 266 Share premium 2 676 075 1 061 675 Share capital and premium at 31 December 2 734 886 1 087 941 Number of shares at 31 December 235 244 646 105 065 336 The shares are at par value NOK 0.25. 173Cloudberry Annual report 2021 Financial statements The following capital increases has taken place in 2021 NOK 1 000 Date Number of shares Share capital Number of shares 1 January 2021 105 065 336 26 266 334 Capital increase 17 Jun 86 000 000 21 500 000 Capital increase 02 Jul 2 800 000 700 000 Capital increase 08 Dec 41 379 310 10 344 828 Number of shares and share capital 31 December 2021 235 244 646 58 811 162 The table below show the largest shareholders of Cloudberry as of 31 December 2021 20 largest shareholders as of 31 December Number of Shares Share of ownership Share of voting rights Ferd AS 26 344 827 11.2% 11.2% Joh Johannson Eiendom AS 24 283 711 10.3% 10.3% Havfonn AS (Bergesen family) 19 600 264 8.3% 8.3% HSBC Deutschland (Lloyd Fonds) 18 980 281 8.1% 8.1% Snefonn AS (Bergesen family) 14 268 242 6.1% 6.1% The Northern Trust (New Zealand Superannuation Fund) 13 539 560 5.8% 5.8% State Street Bank and Trust Comp (Swedbank Robur) 11 609 356 4.9% 4.9% Caceis Bank 9 253 700 3.9% 3.9% Clearstream Banking S.A. 6 833 195 2.9% 2.9% Danske Invest Norge Vekst 5 145 485 2.2% 2.2% Skandinaviska Enskilda Banken AB 5 000 000 2.1% 2.1% Awilco AS 4 800 000 2.0% 2.0% Gjensidige Forsikring ASA 3 302 945 1.4% 1.4% CCPartner AS (Chairman, Frank J. Berg) 3 202 040 1.4% 1.4% MP Pensjon PK 3 012 360 1.3% 1.3% Klaveness Marine Finance AS 2 613 115 1.1% 1.1% Citibank Europe plc 2 600 000 1.1% 1.1% Verdipapirfondet KLP 2 426 887 1.0% 1.0% State Street Bank and Trust Comp 2 161 632 0.9% 0.9% RBC Investor services bank S.A. 1 918 000 0.8% 0.8% Other 54 349 046 23.1% 23.1% Total number of shares 235 244 646 100.0% 100.0% Cloudberry Annual report 2021 Financial statements 174 Note 12 Short term debt and provisions NOK 1 000 2021 2020 Short term interest-bearing debt - 236 767 Trade creditors 23 358 18 602 Accrued salary and bonus 6 020 5 363 Public duties payable 1 085 877 Other 4 069 575 Total short term debt provisions 34 531 262 184 The short-term interest-bearing debt in 2020 was related to the acquisitions of Forte Energy Norway AS, which was given a credit facility at the acquisition, with an applied interest rate of 5% p.a. The amount con- sists of the principal of NOK 236 767. The debt was repaid in the beginning of March 2021. Trade creditors is mainly related to invoices from advisors and facilitators used in the equity emission in December 2021 and the acquisition of Captiva Digital Services AS, see subsequent events note 15. Note 13 Earnings per share Earnings per share is calculated as profit/(loss) attributable to the equity holders of the Company divided by the number of shares outstanding. Diluted earnings per share is aected by the warrant program for equity settled share-based payments transactions, see note 4 Employee benefits. NOK 1 000 2021 2020 Profit/(loss) attributable to the equity holders of the company (45 761) (24 162) Wheighted average number of shares outstanding for the purpose of basic earnings per shaer 155 842 058 39 098 584 Earnings per share for income attributable to the equity holders of the company - basic NOK (0.29) (0.62) Eect of potential dilutive shares Wheighted average number of shares outstanding for the purpose of diluted earnings per share 159 800 849 40 528 735 Earnings per share for income attributable to the equity holders of the company - diluted NOK (0.29) (0.62) For information about share capital at 31 December see note 11 Equity capital, share capital and shareholder information. 175Cloudberry Annual report 2021 Responsibility statement Note 14 Intercompany items between companies in the same group The Company has the following balance sheet item recognised to group companies. NOK 1 000 2021 2020 Receivabls Loans to companies in the same group 106 995 248 419 Other short-term receivables within the group 372 466 467 Total 479 461 248 886 Liabilities Debt to suppliers within the group - 251 Total - 251 As per 31 December there were no employee or shareholder loans. Note 15 Subsequent events Acquisition of 60% of Captiva Digital Services AS “the Captiva Group” On 7 January 2022 Cloudberry Clean Energy ASA entered a share purchase agreement for the acquisition of 60% of the shares in Captiva Digital Services AS from Captiva Capital Partner AS. Captiva Digital Services AS with subsidiaries “The Captiva Group” is a data-driven operator, manager and developer of renewable energy in the Nordics. Note 16 Covid-19 Overall, the pandemic had limited impact on the company’s business in 2021. The company focus on protect- ing the employees, partners and other stakeholders whilst ensuring that we operate the business in the best possible way. Cloudberry Annual report 2021 Financial statements 176 Responsibility statement We declare to the best of our knowledge that · the Cloudberry Clean Energy ASA consolidated financial statements for 2021 have been prepared in accordance with IFRS and IFRICs as adopted by the European Union, and additional Norwegian disclo- sure requirements in the Norwegian Accounting Act, and that · the financial statements for the parent company, Cloudberry Clean Energy ASA, for 2021 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that · the information presented in the financial state- ments gives a true and fair view of the assets, liabilities, financial position and results for Cloudberry Clean Energy ASA and the Cloudberry Group for period as a whole, and that · the Board of Directors’ Report includes a true and fair review of the development, performance and financial position of Cloudberry Clean Energy ASA and the Cloudberry Group, together with a descrip- tion of the principal risks and uncertainties that they face Oslo, 22 March 2022 The Board of Directors of Cloudberry Clean Energy ASA Frank J. Berg Chair of the Board Morten Bergesen Board member Petter W. Borg Board member Benedicte Fossum Board member Liv Lønnum Board member Anders J. Lenborg CEO Cloudberry Clean Energy ASA 177Cloudberry Annual report 2021 Alternative performance measures Alternative performance measures The alternative performance measures (abbreviated APMs) that hereby are provided by Cloudberry are a supplement to the financial statements that are prepared in accordance with IFRS. This is based on the Group’s experience that APMs are frequently used by analysts, investors, and other parties for supplement information. The purpose of the APMs, both financial and non- financial, is to provide an enhanced insight to the operations, financing, and future prospect for the Group. Management also uses these measures internally for key performance measures (KPIs). They represent the most important measures to support the strategy goals. Financial APMs should not be considered as a substitute for measures of performance in accordance with IFRS. APMs are calculated consistently over time and are based on financial data presented in accordance with IFRS and other operational data as described below. The Group uses the following financial APMs: Financial APMs Measure Description Reason for including EBITDA EBITDA is net earnings before interest, tax, depreciation, amortisation & impairments. Shows performance regardless of capital structure, tax situation or eects arising from dierent depreciation methods. Management believes the measurement enables an evaluation of operating performance. EBIT incl. associated companies EBIT is net earnings before interest and tax. Shows performance regardless of capital structure and tax situation. Management believes the measurement enables an evaluation of operating performance. Net interest-bearing debt (NIBD) Net interest-bearing debt is interest- bearing debt, less cash and cash equivalents. IFRS 16 leasing liabilities are not included in the net interest-bearing debt. Shows the interest-bearing debt position of the company adjusted for the cash position. Management believes the measure provides an indicator of net indebtedness and risk. Equity ratio Equity ratio equals total equity divided by total assets Shows the equity relative to the assets. Management believes the measurement enables an evaluation the financial strength and an indicator of risk. Cloudberry Annual report 2021178 Alternative performance measures Reconcilliation of financial APMs (consolidated figures) NOK 1 000 FY 2021 FY 2020 EBITDA, incl associated companies (31 615) (29 822) EBIT, incl associated companies (41 361) (33 111) Equity ratio 84.5% 75.5% Net interest bearing debt (810 741) (341 919) NOK 1000 FY 2021 FY 2020 Long-term interest bearing debt 294 087 26 440 Short-term interest bearing debt 10 105 236 767 Cash and cash equivalent (1 114 934) (605 126) Net interest bearing debt (810 741) (341 919) NOK 1000 FY 2021 FY 2020 Operating profit (EBIT) (41 361) (33 111) Depreciations and amortizations 9 746 3 289 EBITDA (31 615) (29 822) Proportionate Financials The Group’s segment financials are reported on a proportionate basis. The Group introduces Proportionate Financials as the Group is of the opinion that this method improves transparency and earnings visibility, and also aligns with internal management reporting. The key dierences between the proportionate and the consolidated IFRS financials are that associated companies are included in the financial accounting lines, the profit or loss statement and share of assets and net debt, with the respective proportionate ownership share, while in the consolidated financials associated companies are consolidated with the equity method. The consolidated revenues and profits are mainly generated in the Production segment. Activities in the Development segment will vary between deliv- eries to 3. parties or other companies controlled by Cloudberry, where revenues and profits are eliminated in the Consolidated Financial Statements, in the pro- portionate financials, internal revenue and expenses, are retained. Proportionate interest-bearing debt and NIBD does not include shareholder loans. From the consolidated IFRS reported figures, to arrive at the proportionate figures for the respective periods the Group has: Group eliminations: A: Added back eliminated internal profit or loss items and internal debt and assets, column A. Residual ownership interest: B: Replaced the equity accounted net profit from associated companies in the period with items in column C, D and E. Replaced the investment in shares in associated companies including historical share of profit or loss (asset value) with balance sheet items in column C, D and E. C: Reclassified excess value items included in the equity method to the respective line in the Profit or loss statement, and in the balance sheet. D/E: Included the proportionate share of the line in the profit or loss statement items (respectively: revenues, operating expenses, depreciations and amortizations and net finance items) and the bal- ance sheet items (total assets, interest bearing debt and cash) for the respective associated company. 179Cloudberry Annual report 2021 Alternative performance measures The tables below reconcile the consolidated Group figures with the proportionate financial for the periods FY 2021 and FY 2020. FY 2021 Residual ownership interest A B C D E NOK 1 000 Total Consolidated Other eliminations group Equity accounted Excess value Proportionate share of line items Forte Proportionate share of line items Odal Total proportionate Total revenue 40 898 - - - 41 588 27 82 513 Operating expenses ex depreciations and amortisations (88 885) - - - (16 330) (2 090) (107 304) Net income/(loss) from associated companies 16 373 - (16 373) - - - - EBITDA (31 615) - (16 373) - 25 259 (2 063) (24 791) Depreciation and amortisation (9 746) - - (2 823) (6 787) (52) (19 408) Operating profit (EBIT) (41 361) - (16 373) (2 823) 18 472 (2 115) (44 200) Net financial items (22 287) - - 9 113 (792) (13 966) Profit/(loss) before tax (63 648) - (16 373) (2 823) 27 585 (2 907) (58 164) Total assets 3 118 391 110 289 (677 407) 160 120 362 672 741 257 3 815 322 Interest bearing debt 304 192 - - - 225 803 296 299 826 294 Cash 1 114 934 - - - 33 690 133 429 1 282 053 NIBD (810 741) - - - 192 113 162 870 (455 753) FY 2020 Residual ownership interest A B C D E NOK 1 000 Total Consolidated Other eliminations group Equity accounted Excess value Proportionate share of line items Forte Proportionate share of line items Odal Total proportionate Total revenue 3 640 200 - - 1 493 - 5 333 Operating expenses ex depreciations and amortisations (29 904) - - - (1 930) - (31 834) Net income/(loss) from associated companies (3 556) - 3 556 - - - - EBITDA (29 822) 200 3 556 - (437) - (26 501) Depreciation and amortisation (3 289) - - (591) (1 259) - (5 139) Operating profit (EBIT) (33 110) 200 3 556 (591) (1 696) - (31 640) Net financial items (1 141) 139 - - (1 270) - (2 272) Profit/(loss) before tax (34 253) 339 3 556 (591) (2 966) - (33 912) Total assets 1 396 861 (46) (337 081) 148 332 336 422 108 581 1 653 069 Interest bearing debt 263 207 - - - 235 742 - 498 949 Cash 605 126 - - - 10 905 32 667 648 698 NIBD (341 918) - - - 224 837 (32 667) (149 748) Cloudberry Annual report 2021180 Alternative performance measures Non-financial APMs Measure Description Reason for including Power Production Power delivered to the grid over the defined time period (one year). Units are measured in GWh. Example A typical 4 MW turbine produces 3 000 full-load hours during a year. 4 MW x 3 000 hours = 12 000 MWh or 12 GWh. For illustration, according to the International Energy Agency (“IEA”) the electrical power consumption per capita in Europe is approximately 6 MWh per year. For power production estimates it is used normalized annual level of power production (GWh). This may deviate from actual production within a single 12-month period but is the best estimate for annual production over a period of several years. Defined as “Normalized production”. Shows Cloudberry’s total production in GWh for the full year including the proportionate share of the production from Cloudberry’s associated companies. Production & under construction, secured At the time of measure, the estimated power output of the secured production and under construction portfolio. The measure is at year-end. Units are measured in MW. Shows Cloudberry’s total portfolio of secured projects that are either producing or under construction. Construction Permits At the time of measure, the estimated total power output to be installed in projects with construction permit. Construction Permit is at the stage when concession has been granted, but before a final investment decision has been made. The measure is at year-end. Units are measured in MW. Shows Cloudberry’s total portfolio of projects with construction permit. Backlog At the time of measure, the estimated total eect to be installed related to projects that are exclusive to the Group and in a concession application process. The measure is at year-end. Units are measured in MW Shows Cloudberry’s portfolio of project where Cloudberry has an exclusive right to the projects. The projects are still under development. Direct emissions Measure in tons of CO 2 equivalents. The use of fossil fuels for transportation or combustion in owned, leased or rented assets. It also includes emission from industrial processes. Shows Cloudberry’s direct emissions (Scope 1, GHG emissions) for the full year. Indirect emissions Measure in tons of CO 2 equivalents. Related to purchased energy; electricity and heating/cooling where the organisation has operational control. The electricity emission factors used are based on electricity production mixes from statistics made public by the IEA. Emissions from value chain activities are a result of the Group’s upstream and downstream activities, which are not controlled by the Group. Examples are consumption of products, business travel, goods transportation and waste handling. Shows Cloudberry’s indirect emissions (Scope 2 and Scope 3, GHG emissions) for the full year. CO 2 reduction Refers to the reduction of greenhouse gas emissions relative to baseline emissions from the European electricity mix (EU-27 electricity mix, IEA 2020 . Shows Cloudberry’s reduction of greenhouse gases for the full year relative to the European Electricity mix after the direct and indirect emissions from Cloudberry’s operation is subtracted https://www.iea.org/data-and-statistics/?country=WEOEUR&fuel=Energy%20consumption&indicator=ElecConsPerCapita (accessed 14 June 2021). https://www.iea.org/data-and-statistics/charts (accessed 6 May 2021). 181Cloudberry Annual report 2021 Auditor’s report Statsautoriserte revisorer Ernst & Young AS Dronning Eufemias gate 6a, 0191 Oslo Postboks 1156 Sentrum, 0107 Oslo Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00 www.ey.no Medlemmer av Den norske Revisorforening A member firm of Ernst & Young Global Limited INDEPENDENT AUDITOR'S REPORT To the Annual Shareholders' Meeting of Cloudberry Clean Energy ASA Opinion We have audited the financial statements of Cloudberry Clean Energy ASA (the Company) which comprise the financial statements of the Company and the consolidated financial statements of the Company and its subsidiaries (the Group). The financial statements of the Company comprise statement of financial position as at 31 December 2021 and statement of profit and loss, statement of cashflow for the year then ended and notes to the financial statements, including a summary of significant accounting policies. The consolidated financial statements of the Group comprise consolidated statement of financial position as at 31 December 2021, consolidated statement of profit and loss, consolidated statement of comprehensive income, consolidated statement of cash flows and consolidated statement of changes in equity 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 legal 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 cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, the consolidated 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 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 the financial statements section of our report. We are independent of the Company and the Group in accordance with the requirements of the relevant laws and regulations in Norway and the International International Code of Ethics for Professional Accountants (including International 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 2 years from the election by the general meeting of the shareholders on 18 June 2020 for the accounting year 2020. 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 for 2021. These matters were addressed in the context of our audit of the Auditor’s report Cloudberry Annual report 2021182 Auditor’s report 2 Independent auditor's report - Cloudberry Clean Energy ASA 2021 A member firm of Ernst & Young Global Limited financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. For each matter below, our description of how our audit addressed the matter is provided in that context. We have fulfilled the responsibilities described in the responsibilities for the audit of the financial statements section of our report, including in relation to these matters. Accordingly, our audit included the performance of procedures designed to respond to our assessment of the risks of material misstatement of the financial statements. The results of our audit procedures, including the procedures performed to address the matters below, provide the basis for our audit opinion on the financial statements. Business Combination and Purchase Price Allocation Basis for the key audit matter During 2021 the Company has finalized acquisition of several companies as disclosed in note 5 Business combinations and other transactions. These acquisitions are accounted for as described in note 2 in sections Basis and principles for Consolidation and Business combinations. In relation to these acquisitions the Company has assessed whether assets are acquired or a business, allocated purchase price and determined the date from when control is transferred to the Company. The purchase price allocation, the valuation and identification of net identifiable assets and liabilities and the assumptions used in the allocation of the purchase price require significant judgement by management. The business combinations and related purchase price allocations was a key audit matter due to the number of acquisitions and the significant judgments and assumptions involved in these assessments. Our audit response As part of our audit procedures, we obtained an understanding of the acquisitions, the agreements made in relation to the acquisitions, the valuation process and the valuation methods used to determine purchase price allocations, and the consideration of whether assets were acquired or a business. We further reviewed the share purchase agreement, tested assumptions and amounts in the valuations to underlying supporting documentation and assumptions determined and documented by the company. We evaluated the identification of net identifiable assets and liabilities and the principles used for recognition and allocation of the purchase price. As part of evaluation of used principles, we obtained an understanding that the principles used are in accordance with the description in note 2. We evaluated the presentation of the disclosures in note 5 Business combinations to the 2021 consolidated financial statements. In addition, we assessed the process and the competence and capability of management. Other information Other information consists of the information included in the annual report other than the financial officer) is responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon. In connection with our audit of the financial statements, our responsibility is to read the other information, and the statement on corporate social responsibility contain the information required by applicable legal requirements and whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information or that the information required by applicable legal requirements is not included, we are required to report that fact. 183Cloudberry Annual report 2021 Auditor’s report 3 Independent auditor's report - Cloudberry Clean Energy ASA 2021 A member firm of Ernst & Young Global Limited on corporate governance and the statement on corporate social responsibility are consistent with the financial statements and contain the information required by applicable legal requirements. Responsibilities of management for the financial statements Management is responsible for the preparation and fair presentation of the financial statements of the Company in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway and 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. and using the going concern basis of accounting unless management either intends to liquidate the Company or the Group, or to cease operations, or has no realistic alternative but to do so. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are 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 the 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, 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 Evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast continue as a going concern. If we conclude that a material uncertainty exists, we are required to r, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit 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 fair presentation. Cloudberry Annual report 2021184 Auditor’s report 4 Independent auditor's report - Cloudberry Clean Energy ASA 2021 A member firm of Ernst & Young Global Limited 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. 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 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 compliance with regulation on European Single Electronic Format (ESEF) Opinion As part of our audit of the financial statements of Cloudberry Clean Energy ASA we have performed an assurance engagement to obtain reasonable assurance whether the financial statements included in the annual report, with the file name Cloudberry-2021-12-31-en.zip, has been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation given with legal basis in Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements. In our opinion, the financial statements included in the annual report have been prepared, in all material respects, in compliance with the ESEF Regulation. Management is responsible for the preparation of an annual report and iXBRL tagging of the consolidated financial statements that complies with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary to enable the preparation of an annual report and iXBRL tagging of the consolidated financial statements that is compliant with the ESEF Regulation. Our responsibility is to express an opinion on whether, in all material respects, the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation based on the evidence we have obtained. We conducted our engagement in accordance with the International Standard for Assurance Engagements (ISAE) 3000 ements other than audits or obtain reasonable assurance that the financial statements included in the annual report have been prepared in accordance with the ESEF Regulation. 185Cloudberry Annual report 2021 Auditor’s report 5 Independent auditor's report - Cloudberry Clean Energy ASA 2021 A member firm of Ernst & Young Global Limited preparing its annual report in XHTML format. We evaluated the completeness and accuracy of the iXBRL tagging and assessed managem tagged data with the audited financial statements in human-readable format. We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. Oslo, 22 March 2022 E RNST & YOUNG AS ___________________ Asbjørn Ler State Authorised Public Accountant (Norway) Cloudberry Annual report 2021186 About the report Principles for reporting The enclosed Financial Statements and Board of Directors’ report, together with the accompanying notes, fulfills Cloudberry Clean Energy ASA’s Norwegian statutory requirements for annual reporting. Regarding our ESG reporting, Cloudberry Clean Energy ASA aims to provide its key stakeholders insight into its ESG management and performance, and the Company strives to be consistent and transparent in this reporting. The report is in accordance with the World Economic Forum’s 1 core set of ESG metrics. Including an updatedreport on the Companys performance in implementing the Task Force on Climate-related Financial Disclosures. 1 https://www.weforum.org/stakeholdercapitalism Design and production: Artbox AS Cloudberry Clean Energy ASA Frøyas gate 15 0273 Oslo, Norway [email protected] www.cloudberry.no [email protected] cloudberry.no 549300VUALPJQLAH7B562021-01-012021-12-31549300VUALPJQLAH7B562020-01-012020-12-31549300VUALPJQLAH7B562021-12-31549300VUALPJQLAH7B562020-12-31549300VUALPJQLAH7B562019-12-31549300VUALPJQLAH7B562019-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562020-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562019-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562020-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562019-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562020-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562019-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562020-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562019-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562019-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562020-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562019-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562020-01-012020-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562020-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562019-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562019-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562020-01-012020-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562020-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562021-12-31ifrs-full:IssuedCapitalMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562021-12-31ifrs-full:SharePremiumMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562021-12-31ifrs-full:ReserveOfSharebasedPaymentsMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562021-12-31ifrs-full:ReserveOfCashFlowHedgesMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562021-12-31ifrs-full:RetainedEarningsMember549300VUALPJQLAH7B562021-01-012021-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562021-12-31CLO:RetainedEarningsAndOtherReservesMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember549300VUALPJQLAH7B562021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember549300VUALPJQLAH7B562021-12-31ifrs-full:NoncontrollingInterestsMemberiso4217:NOKiso4217:NOKxbrli:shares
Building tools?
Free accounts include 100 API calls/year for testing.
Have a question? We'll get back to you promptly.