Beerenberg

BEERENBERG - 2022 5967007LIEEXZXFUSW822022-01-012022-12-315967007LIEEXZXFUSW822021-01-012021-12-315967007LIEEXZXFUSW822022-12-315967007LIEEXZXFUSW822021-12-315967007LIEEXZXFUSW822020-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFUSW822020-12-31ifrs-full:SharePremiumMember5967007LIEEXZXFUSW822020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFUSW822020-12-31ifrs-full:ReserveOfCashFlowHedgesMember5967007LIEEXZXFUSW822020-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXFUSW822020-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXFUSW822020-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXFUSW822020-12-315967007LIEEXZXFUSW822021-01-012021-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXFUSW822021-01-012021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXFUSW822021-01-012021-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXFUSW822021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFUSW822021-01-012021-12-31ifrs-full:ReserveOfCashFlowHedgesMember5967007LIEEXZXFUSW822021-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFUSW822021-12-31ifrs-full:SharePremiumMember5967007LIEEXZXFUSW822021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFUSW822021-12-31ifrs-full:ReserveOfCashFlowHedgesMember5967007LIEEXZXFUSW822021-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXFUSW822021-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXFUSW822021-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXFUSW822022-01-012022-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXFUSW822022-01-012022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXFUSW822022-01-012022-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXFUSW822022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFUSW822022-01-012022-12-31ifrs-full:ReserveOfCashFlowHedgesMember5967007LIEEXZXFUSW822022-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFUSW822022-12-31ifrs-full:SharePremiumMember5967007LIEEXZXFUSW822022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFUSW822022-12-31ifrs-full:ReserveOfCashFlowHedgesMember5967007LIEEXZXFUSW822022-12-31ifrs-full:RetainedEarningsMember5967007LIEEXZXFUSW822022-12-31ifrs-full:EquityAttributableToOwnersOfParentMember5967007LIEEXZXFUSW822022-12-31ifrs-full:NoncontrollingInterestsMember5967007LIEEXZXFUSW822021-12-315967007LIEEXZXFUSW822020-12-31iso4217:NOKiso4217:NOKxbrli:shares ANNUAL REPORT 2022 2 Annual report 2022 A growing market for tunnel insulations 16 18 Acoustic insulation of pedestrian and bicycle tunnels. 04 Letter from CEO 06 About Beerenberg Passive Fire insulation of the Tingstad tunnel in Sweden. 08 Vision and values 10 Key ﬁgures 2022 12 Executive Management 14 Key highslights 2022 20 Business units 26 Environmental, Social and Governance (ESG) 31 Business ethics and human rights 24 Robotic Painting 34 Annual Report and Accounts New robot technology to resolve complex FPSO maintenance. 36 Corporate governance 39 Board of Directors Beerenberg AS 40 Annual Directors’ Report 2021 46 Beerenberg AS Group - Group Accounts 2022 86 Beerenberg AS - Annual Accounts 2022 97 Declaration by the Board of Directors and CEO 98 Auditor’s Report 104 Deﬁnition of Alternative Performance Measures 32 Increased demand for mechanical services Beerenberg provides an increasing number of mechanical services as part of the company´s onshore and offshore maintenance portfolios. The Beerenberg Group consists of several entities. Unless otherwise stated, references to company and group refers to the entire operation of these entities. Cover: Exchange of thorch at IENOS Rafnes - Photo: Bjørn Helge Rønning beerenberg.com 4 Annual report 2022 Letter from CEO Dear stakeholder, The Russian Ukraine invasion has led to an increased pressure on the global energy system, surging energy prices and conse- quences for energy security, which in turn can accelerate the green transition in Europe. However, oil and gas will continue to be a signiﬁcant part of the energy mix for many years to come. energy efﬁcient insulation solutions, we ensure sustainability in practice. closely with suppliers and partners to discover and adopt new and relevant technologies. We have also invested signiﬁcantly in professional development which includes adopting new and innovative technologies. The demand for energy-efﬁcient solutions will increase in line with electricity prices and requirements for our clients to meet the new climate targets. The latest IEA report shows that if the targets are to be reached by 2050, 35% of the cuts should be made through energy efﬁciency. As more industries discover the potential of insulating to save energy costs, the need for ISS services will grow. Like energy efﬁciency in buildings, optimized insulation of pipes and installations will contribute to far lower energy consumption and CO2 emissions than we have today. We can help our clients achieve their goals in this area, by optimizing insulation where the greatest effect can be extracted. In our experience, a lot can be done with existing technology and by doing things differently. Currently we are working on projects ranging from innovative insulationmaterials,increaseduseof3Dprinting,newtreatment and sealing solutions for pipes, valves, and ﬂanges – addition to increased use of digital solutions to improve and simplify docu- mentation and logging of ﬁeld work. Our R&D department also develops solutions that are installation-friendly and suitable for automated production, with Benarx All-in-One product – saving up to 60 percent on installation time – as one example. It is our responsibility to do what we can to contribute to a green transition. Our contribution is sustainable and energy efﬁcient maintenance solutions that reduce the carbon footprint in a concrete and measurable manner. We will continue to improve our performance to better serve our clients through investing in people, sustainable developments, and innovative technologies. The demand for maintenance and modiﬁcation services increased markedly in 2022 and seems to continue in 2023. Energy security concerns in Europe, cost of energy and the age of the installations on the Norwegian Continental Shelf (NCS) are all factors that have had a positive inﬂuence on the demand for Beerenberg’s services. Safety and security Investing in people We are not satisﬁed with the development within safety in 2022 and have taken steps to ensure that everyone that works in Beerenberg are safe. Ensuring the safety and security of everyone working at and for Beerenberg is a prerequisite for everything we do. Our skilled employees deliver high-quality work for our customers in ever-changing conditions around the world, and it is our responsibility to keep them safe. Our health, safety and environmental initiatives are embedded in a zero accidents philosophy, with HSE as an integrated element in all parts of our business. We are fortunate to have a highly skilled and engaged work- force at many platforms, onshore plants, facilities, and ofﬁces in Norway and abroad. Investing in technology Acquiring Remotion in April 2022 strengthened our position as a provider of cost-efﬁcient technological and sustainable sur- face treatment solutions. Since then, we have increased our use of robotic surface treatment to include new developments such as application of paint. Robotic maintenance is likely to grow as experience and further developments are made, and we aim to be a leading developer of new and effective solutions for complex maintenance work. We see robotics as a tool to enhance sustainability, productivity and safety while it does not reduce the need for competence and experience within the surface treatment craft. Both are required and will develop together. Toensureacontinuedsupplyofqualiﬁedemployeesinanexciting and ever-changing ISS profession, we provide professional development for the new generation ISS workers at our facilities. In 2022 we invested heavily in professional training includingsurfacetreatment,atraineeprogramandmanagement training for foremen and supervisors. Investing in professional development enables us to deliver ”Beyond expectations”, be a safe and dependable supplier for our customers and a good workplace for our employees. We will continue to deliver on our strategy and protect our customers in the harshest conditions on earth and provide sustainable and energy efﬁcient maintenance solutions – to reduce both our company and our clients’ carbon footprint. Investing in sustainability Sustainability is an integral part of how we make decisions and run our business. While we innovate to reduce waste and emission from our own operations, we also provide sustainable solutions for our customers. Through quality maintenance and Investing in new and innovative technological solutions is an important part of our journey to a more sustainable and efﬁ- cient operation. Focus is on ﬁnding solutions that can improve our performance both onshore and offshore and we are working Arild Apelthun CEO beerenberg.com 6 Annual report 2022 BEERENBERG AS NORWAY 100% Beerenberg AS Beerenberg Holding AS Beerenberg AS is a limited liability company registered in Bergen, Norway. The Beerenberg Group comprises the parent company Beerenberg AS and the subsidiaries Beerenberg Holding AS, Beerenberg Services AS, Beerenberg Industri AS, Remotion AS, Beerenberg Poland Sp. z o.o, Beerenberg UK LTD, Beerenberg Korea LTD, Beerenberg Holding (Thailand) LTD, Beerenberg (Thailand) CO., LTD and Beerenberg Singapore PTE. LTD. NORWAY 100% Beerenberg Services AS The operational activities are organized in Beerenberg Services AS and its subsidiaries. The head ofﬁce is in Bergen and the group has ofﬁces in Stavanger and Skien in Norway, in Poland, UK, South-Korea, Thailand and in Singapore. NORWAY 100% Beerenberg Industri AS Beerenberg Poland LTD Beerenberg UK LTD Beerenberg Beerenberg Singapore LTD Remotion AS Holding (Thailand) LTD NORWAY 100% NORWAY 100% POLAND 100% UK THAILAND 49% SINGAPORE 100% 100% Beerenberg Korea LTD Beerenberg (Thailand) CO., LTD KOREA THAILAND 100% 100% beerenberg.com 8 Annual report 2022 OUR VISION Beerenberg is a leading supplier of maintnance and modiﬁcations services. For more than 40 years Beerenberg has delivered cost efﬁcient solutions to a wide range of industrial enterprises. Our expertise covers the entire life cycle from ﬁeld studies and newbuilds to maintenance, modiﬁcation and lifetime extensions. We see it as a duty to challenge conven- tional thinking in the industry trough innovation and creative solutions – always focusing on improved HSE/Q, sustainability, productivity and consistency. Beyond Expectations Our vision commits the corporation and all of its employees to seek solutions that exceed the expectations of the wider world. OUR CORE VALUES Inclusive Innovative Responsible OUR EXPERTISE COVERS The company shall be inclusive towards individuals, other com- panies and society as a whole. An open and accommodating attitude shall prevail throughout the group. The company’s ability to be innovative will help safeguard our own future, improve conditions for the local environment and generally help create positive social development. A responsible attitude shall prevail at the company at all levels and in all contexts. THE ENTIRE LIFE CYCLE beerenberg.com 10 Annual report 2022 Figures in 2022 2021 2020 2019 2018 Key ORDERS AND RESULTS Estimated order backlog * MNOK 7 900 7 300 8 300 9 300 9 500 ﬁgures Revenue MNOK Percent MNOK 2 222 4.0% 180 2 136 24.0% 216 1 723 -22.0% 217 2 210 45.4% 216 1 520 -17.9% 97 Growth in revenue EBITDA Ebitda margin Percent 8.1% 10.1% 12.6% 9.8 % 6.4% Revenue EBIT MNOK MNOK Percent 98 19 153 56 146 46 142 45 48 -31 Net Proﬁt Net margin 2 222 MNOK 0.9% 2.6% 2.7% 2.1 % -2.1% CASHFLOW AND CAPEX Cash ﬂow from operating activities Capex intangbible and intangible assets MNOK MNOK 76 37 109 39 88 17 126 52 52 39 2022 2021 2020 2019 2018 2 222 2 136 BALANCE SHEET Equity MNOK Percent MNOK Percent MNOK MNOK 569 31.9% 131 546 29.9% 99 487 29.0% 75 440 23.7 % 73 394 24.2% 59 Equity ratio 1 723 Net working capital Nwc / revenue ratio Total liabilities Total assets 5.9% 1 217 1 786 4.7% 1 284 1 830 4.3% 1 189 1 676 3.3 % 1 417 1 858 3.9% 1 234 1 628 2 210 1 520 EMPLOYEES 0 500 1000 1500 2000 2500 MNOK Employees 31.12. Number Number Percent 1 432 1 913 1 247 2 221 29.5% 1 203 1 716 1 312 2 002 1 131 1 621 Man years - totally employed at end of year Change in total resources employed at end of year -13.9% -14.3% 23.5 % -17.0% Hours produced In thousands Percent 3 075 3 100 2 405 3 431 2 476 Change in hours produced -0.8% 28.9% -29.9% 38.5% -13.8% EBITDA margin Hours produced 8.1% 3.1 MILL HSE Per million Serious Incident Frequency (SIF) 1.4 2.7 9.1 1.7 3.1 7.9 2.2 0.9 2.7 1.0 0.3 3.9 0.9 0 worked hours Per million worked hours Lost time incidents Frequency (LTIF) Per million worked hours Total recordable incidents frequency (TRIF) 5.5 SIF Employees ) Estimated order backlog is based on best estimates of frame agreements. 1.4 1 432 beerenberg.com 12 Annual report 2022 Executive Management Arild Apelthun CEO Harald Haldorsen CFO Nils Halvor Berge Executive Vice President, New Build & Modiﬁcations Projects Toni Suomäki Executive Vice President – Maintenance, Modiﬁcations & Operations Arild Apelthun has been CEO since June 2018. Apelthun joined Beerenberg in 2014 and was previously the CFO of the company. Apelthun has a background as CFO from TTS Group and subsidiaries in Aker Solutions in USA and Europe. Apelthun holds a Master of Science in Business (Siviløkonom) from Bodø Graduate School of Business. Harald Haldorsen joined Beerenberg as CFO in March 2020. Haldorsen has extensive experience within ﬁnance and controlling activities. Prior to joining Beerenberg Haldorsen worked as the CFO at Strømberg Gruppen AS for more than 12 years. Prior to this, Haldorsen has had positions at Arthur Andersen & Co and Centragruppen. Haldorsen has an economics degree from the Norwegian School of Economics (NHH) in Bergen. Nils Halvor Berge has been in Beerenbergs Management Team since April 2016. Berge joined the company in 2009, and has been project manager both at Kårstø and at Nyhamna EPCm project. Prior to Beerenberg, Berge served as sports director and general manager at FK Haugesund for 12 years. Berge qualiﬁed as a teacher at Sogn og Fjordane University College. Toni Suomäki has been EVP MMO sinceJune 2018. Suomäki started in Beerenberg in 2007 and has held a number of key positions in the company, mainly related to operations and project management. Suomäki has long experience in oil service from various companies before joining Beerenberg. Suomäki holds a Bachelor in Economics and Management from BI. Kjetil Stöckel-Kvamme Executive Vice President Technology & Development Roger Kjeilen Executive Vice President, Tender Gro Hatleskog Executive Vice President, Business Support Jan Terje Lagos Bøe Executive Vice President, HSEQ & RISK Stöckel-Kvamme started in Beerenberg in 2015, and has held several management roles, including manager of Beerenberg Industri in Skien. He has previous experience as a project manager in OneSubsea, and has worked in the oil and gas industry since 2006. Stöckel-Kvamme holds a Bachelor in Chemical Process Engineering at Norwegian University of Applied Sciences. Roger Kjeilen has been EVP Tender since 2018, responsible for tender and marketing activities in the Beerenberg Group. Kjeilen joined the company in 1996 and has held several leading positions in Beerenberg. Kjeilen has a Master of Science (Sivilingeniør) from Norwegian University of Science and Technology (NTNU). Gro Hatleskog has been EVP Business Support since March 2015. Hatleskog held the same position in the company from 2009–2011. Hatleskog has extensive and wide-ranging experience as an HR and staff director at Vesta Forsikring, Sparebanken Vest and Nera Telecommunications. Hatleskog has a Master’s Degree in Administration and Organisation Theory from the University of Bergen. Jan Terje Lagos Bøe started as EVP HSEQ & Risk in Beerenberg in January 2022. Bøe has experience within several segments of the oil and gas industry. Prior to joining Beerenberg Bøe worked for a period as Quality & Risk manager at Vår Energy on Balder Future, as hired consultant from Aker. Bøe has studied at Western Norway University of Applied Sciences. beerenberg.com 14 Annual report 2022 Insulation Effective ﬁre protection in earthquake areas Beerenberg has supplied ﬁre protection at BP’sTangguh LNG facility in Indonesia. Since the facility is in an earthquake zone, the ﬁre protection must withstand earthquakes. In these areas traditional wet-applied ﬁre insulation can´t be used at the junctions, as it will crack when minor quakes occur since the beams must be able to move during an earthquake. Beerenberg´s Benarx® structural panels, however, allow the beams to move 20-30 mm in both vertical and horizontal directions during an earthquake, are mounted at 150 structural nodes. Key highlights 2022 Rope Access Techniques One of the most complex RAT missions in history When Beerenberg carried out the torch exchange at INEOS Rafnes’ facility in Porsgrunn, it was a historically complex mission. The primary job was to replace two large torches and a ﬂame trap. In addition, 200 meters of vertical steam line were replaced, and then insulated. Surface Treatment Robotic surface treatment of ammonia tanks at Herøya The torch tip´s function at the ﬂame tower is to burn up excess gas. Maintenance of the gas burner must be carried out at regular intervals where the torch tip is replaced as a unit. Such assignments require high level of competence to plan, design and execute. Beerenberg has extensive experience with climbing and lifting operations both on and offshore and solve these complex jobs through both planning and execution. Surface treatment of industrial tanks has traditionally meant extensive manual work during both preparation and implementation. Now, with new robotic solutions from the oil and gas industry, such maintenance canbedonemoreefﬁcientlyandsustainable,whilereducingchallenging and burdensome work for personnel. Digitalization - Today, only parts of the surface treatment are done with the help of robots, but this will increase along with the technological development. Future maintenance will be both more efﬁcient and sustainable, says CEO Arild Apelthun in Beerenberg. The transition will be done with help from the expertise of our professional personnel. Digitalization simpliﬁes work and ensures quality Documenting and logging ﬁeldwork has traditionally been a manual, cumbersome and time-consuming job. Now, with Beerenberg’s FieldBuddy application, our foremen and engineers have all data available when and where it’s needed. Everything can be done via the tablet, from daily ﬁeld logs, downloading job packages and uploading images, to signing job package deviations and searching for previously kept daily logs and deviations. Our customers are also satisﬁed that quality inspections can be registered, documented and signed there and then. The app is continuously being improved and made available for more areas of use in Beerenberg. The goal is to further simplify daily work and increase quality through better registration and automation in the processes. Competence Mechanical Services Investing in our employees Decommissioning and complete preparation for lifting the Gyda platform In January 2022, we started offering theory courses for all three subjects within ISS– insulation, scaffolding and surface treatment – to motivate more employees to take the theory exam, so that they could proceed to the practice test for the trade certiﬁcate. A total of 33 completed the theory exam in 2022 and continued towards trade certiﬁcates in their respective subjects. We continue this offering in 2023. To provide our experienced foreign ISS workers an opportunity to take the step towards Norwegian trade certiﬁcates, we provided both a theory course in English and Norwegian educationforouremployeesatMongstadincollaborating with AOF. 86 employees expressed an interest in this offer, which is being rolled out in April/May 2023. In connection with the shutdown of the 18 000-tonne Gyda platform, Beerenberg delivered a complex work package where the engineering phase included 3D design, calculations, rigging methods, habitat systems and project-speciﬁc solutions for cold cutting. On the platform, Beerenberg provided resources and work within several disciplines for work management, scaff- olding, access technology, rigging, habitats, UHT water blasting of surfaces and mechanical services within cold cutting, cutting burning, mobile machining, drilling and dismantling. Gyda platform: Under deck scaffolding and habitat solutions for welding of single lift connections / Own developed cold cutting tool from Beerenberg. beerenberg.com 16 Annual report 2022 BEERENBERG´S ACTIVITY OUTSIDE OIL AND GAS A growing market for tunnel insulations Acoustic insulation of pedestrian and bicycle tunnels Noise reduction panels from Beerenberg ensure comfortable travel for Bergen locals. Parallel to the new city train tunnel in Bergen, is a unique pedestrian and bicycle tunnel of 3,3 kilometers. The tunnel is one of the longest of its kind and Bybanen Utvikling has invested a lot in ensuring a pleasant environment and video surveillance so that both cyclists and pedestrians feel safe and comfortable, including sound prooﬁng. ranges, the solution is even better than the requirement for class A. The insulation and board materials exceed the minimum ﬁre class A2-s1, d0 in accordance with NS-EN 13501 Fire classiﬁcation of building products and building components. The soundprooﬁng material can also be washed and exposed to water without beeing soaked, and potentially allow for fungis and organic growth. Custom made solution Beerenberg´s acoustic solution was chosen to reduce the noise level from the 10 large fans in the tunnel. The soundprooﬁng is custom made for Bybanen Utbygging and consists of perfo- rated Stainless-steel plates with Super Mat insulation, a thin, non-combustible and hydrophobic insulation mat that has also been tested for fouling and degradation over time. In just a few weeks in December 2022 Beerenberg installed more than 440 acoustic panels in the tunnel. “The new solution proved to be very efﬁcient to assemble and we could easily adjust for minor challenges on location.” Thomas Henriksen, project manager, Bererenberg “This is a great example of how we are using our experience and solutions from the oil and gas industry and adapting them to the needs of the transport and infrastructure market.” When it opens for trafﬁc in April 2023, the tour through the tunnel will take about 7-8 minutes for cyclists and 30 minutes for pedestrians – and comes with a new station that will become a new, future trafﬁc hub with a transition to buses in all directions. CEO of Beerenberg, Arild Apelthun Met all the requirements “We look forward to the opening day and hope the bikers and pedestrians will enjoy the new acoustic environment.” The new acoustic solution satisﬁes absorption class A according to EN-ISO 11654 Acoustics - Sound absorbers for use in buildings - Assessment of sound absorption. In high frequency Thomas Henriksen, project manager, Bererenberg 18 Annual reeportt 2022 BEERENBERG´S ACTIVITY OUTSIDE OIL AND GAS A growing market for tunnel insulations Passive Fire insulation of the Tingstad tunnel in Sweden Beerenberg´s solution allowed for swift installation and reopening of the busy E6 route. The load bearing beams in the ﬁrst Tingstad tunnel are now insulated with Benarx Epoxy Panels. Chosen for its timesaving beneﬁts, and for easy inspections under the insulation, the custom-made panels allowed for efﬁcient installation, and the Swedish transport authority (Traﬁkverket) could reopen for trafﬁc only days after it closed. immersed tubes with three lanes of trafﬁc in each tube. The tunnel has a high trafﬁc load with approximately 125,000 vehicles per day. Traﬁkverket is now reconditioning the tunnel’s con- struction to increase its life span, replacing most of the technical installations and taking several measures to reduce the environmental impact as well as increase safety and reduce the consequences of accidents (source: Traﬁkverket). Beerenberg´s direct client in this project is Peab AB, a construction and civil engineering company headquartered in Förslöv, Sweden. Responsible for the project in Beerenberg, Slavik Degtyarev, says the team is already preparing for the next phase, with installation of the next batch this summer. ”This is an exciting project for us that we hope can lead to similar projects within tunnel and infrastructure markets,” says Slavik Degtyarev in Beerenberg. The Swedish Transport Administration requires access to inspect the load bearing beams every year, which is accomplished by the solution from Beerenberg. “So far, the customer is positively impressed with the results, adds Degtyarev.” The Tingstad tunnel is a highway tunnel under the river Göta, connecting Hisingen with the mainland of Gothenburg. The tunnel is part of the E6 route linking Norway with south-west Sweden and has two parallel beerenberg.com 20 Annual report 2022 SOME OF OUR CLIENTS Business AIBEL AKER BP units AKER SOLUTIONS ARCHER BMO BOMESC CAMERON CONOCOPHILLIPS COSCO SHIPPING DAEWOO EQUINOR HALLIBURTON HANWHA HYUNDAI KUMHO MITSUI LOTTE CHEMICALS MCDERMOTT MORELD AGILITY MORELD APPLY NORCEM OKEA ONESUBSEA PJOE Beerenberg´s activities are organized in two seratate units, Services and Benarx, and include innovative service solutions for the oil and gas industry, covering the entire life cycle from ﬁeld studies and newbuilds to Services Benarx® SAIPEM The Benarx® product series is Beerenbergs’ proprietary range of industrialised insulation solutions for passive ﬁre protection and thermal and acoustic insulation. Services’ main business areas have been divided into two segments: SAMSUNG • Maintenance, Modiﬁcations & Operations • New Build & Modiﬁcation Projects SBM SEMBCORP SHELL Engineering Our services • Insulation • Scaffoldin • Technical Cleaning • Surface Treatment • Technical Cleaning Benarx Engineering department in Beerenberg offers a variety of expertise and services related to insulation product deliveries. The department works with technical insulation solutions for the oil, gas, and chemical industry. Its areas of expertise include thermal insulation, acoustic insulation, and passive ﬁre protection (PFP). The department also engages in design and development of custom built or novel solution to meet client speciﬁcations. maintenance, modiﬁcations, and lifetime extensions. • Architectual Outﬁtting TECHNIPFMC WINTERSHALLDEA WOOD • Rope Access Techniques (RAT) • Habitat Solutions (Sveisolat®) • Cold Cutting WOODSIDE ENERGY WORLEYPARSONS WUCHUAN YARA beerenberg.com 22 Annual report 2022 Business units Business units Services Benarx® Services has the overall responsibility for Beerenberg’s newbuild, maintenance and modiﬁcations contracts. Alongside the ISS disciplines (insulation, scaffolding and surface treatment), the business unit also covers passive ﬁre protection, technical cleaning, rope access techniques, architectural outﬁtting services and the cold work concepts Sveisolat (habitats) and cold cutting /mobile machining. The Benarx® product series is Berenberg’s proprietary range of industrialized insulation solutions for passive ﬁre protection, thermal and acoustic insulation. The business segment has also highly skilled professionals to assist in the actual installation process – something which is particularly important in the case of subsea insulation. Services’ main business areas have been divided into two segments: As a supplement to the traditional ISS disciplines, Beerenberg also delivers a range of technology-driven additional services whose innovative approach helps to ensure effective, consistent and HSE/Q-friendly operation. Our prefabricated solutions save our clients time and cost on site and reduces HSEQ problems and CUI – thereby reducing the lifetime cost for the insulation. insulation solutions by digitalization, automatization and standardization where possible. Key examples include: • Maintenance, Modiﬁcations & Operations • New Build & Modiﬁcation Projects • The Ordering Portal – a web-based user interface where customers can visualize, conﬁgure, and order standardized insulation products. We achieve this by: Beerenberg’s engineering services are an integrated and extensive experience of studies, FEED, pre-engineering, fabrication engineering and as-built from a number of developments and in stallations in Norway and abroad. The company’s expertise includes design, speciﬁcations and modelling, technical drawing, working documents, documentation, plans and methods, inspections and other ﬁeld engineering, and as-built. • Making installation-friendly products The two main business areas are designed to meet future demand on the Norwegian Continental Shelf and in the petrochemical industry. As well as direct maintenance contracts on installations and plants in operation, Beerenberg is also involved in business concepts aimed at modiﬁcation projects and newbuilds in the oil and gas sector. • Developing new products by identifying and combining new and existing insulation materials • Innovation and shift towards remote services – provide digitalized surveying and site supervision to reduce travel cost, lead time, and increasing the quality and traceability of the deliveries surveyed. • Actively exploring new materials • Seeking sustainable insulation solutions • Executing thermal calculations and energy- optimalization studies • The All-in-One product series, launched in 2021, where complete multilayer thermal insulation systems (with cladding) now are available in one product, saving up to 60% installation time on site. • Extensive CUI testing • Providing tailor-made solutions for our customers • Ensuring Environmental friendlysolutions The company is working with TechnipFMC, One Subsea and other big operators in the sector. Solutions include the use of market-leading materials and installation methods developed in-house. As a result, our insulation and ﬁre protection series have a documented life span that far exceeds conventional insulation solutions. We continuously seek to improve our Scaffolding Surface treatment 583 643 m3 190 348 m2 Like energy efﬁciency in buildings, optimized insulation of pipes and installations will contribute to far lower energy consumption and CO2 emissions than we have today. Provides secure access and safe working conditions. Extends product life and increases durability. Beerenberg help companies achieve their goals in this area by optimizing insulation in the areas with greatest effect. Insulation Advanced insulation boxes 76 655 pipes 5 000 Saves energy and cuts emission. Protection of your assets – high energy efﬁciency. beerenberg.com 24 Annual report 2022 Robotic painting New robot technology to resolve complex FPSO maintenance. Remotion´s latest robot is a complete surface maintenance High efﬁciency system where all the sequences are robotic, saving valuable time and resources for FPSOs at sea. Traditionally, this is demanding maintenance work that includes both scaffolding and working above open water with strict weather conditions. Based on simulations, the client had esti- mated 3 m2 of complete system each day, with a total of 5500 m2 to be maintained. With the added need for good weather days in the North Sea, the scope was almost reconned as a Mission Impossible project. With new technology, the project is now aiming for more than 60 m2 per day. Beerenberg´s Remotion has been awarded a contract by Aker BP for robotic fabric maintenance of the hull on Alvheim FPSO. The contract marks a milestone in the development of a unique robot that can do all surface maintenance work, saving valuable time and resources. Fabric maintenance of hull surfaces can be demanding when it comes to a FPSOs at sea. The Alvheim FPSO is a ﬂoating Production Storage and Ofﬂoading vessel that produces crude oil and gas. Crude oil is stored in tanks and transported directly to the shuttle tanker, and Gas is transferred onshore through pipeline. More sustainable In addition to signiﬁcantly higher efﬁciency, the project and the technology also have several other advantages; no emissions of paint residues, contributing to the United Nations Sustainable Development Goals 12 and 14, better HSE proﬁle with robots handling noisy and dangerous tools, less personnel onboard and more precise quality of surface coating. The operation will be carried out by a carefully trained team consisting of personnel from Remotion and Beerenberg. The offshore operation will start in April 2023. Collaboration project The contract is a result of several years with research and devel- opment in collaboration with the client. During the development phase, Remotion created a complete system for robotic fabric maintenance where all the sequences are robotic. On Alvheim FPSO, the scope is 5500 m2 with vertical hull surface, where all old coating will be removed, surface proﬁle controlled, and a new three layers coating system will be applied. Maintenance robots in demand Several other technology projects are also experiencing great interest from returning and potential new clients. The pipe robot system Icarus has been awarded a contract with Equinor in Brazil for work onboard Peregrino B. Equinor has also awarded Remotion a 4-month contract for work onboard Norne FPSO, where will we continue underwater hull maintenance operations. Morten Urrang in Remotion is excited about the developments. “We are now working on establishing a solid product portfolio of technology, much is already in place, but some adaptations are being made to better meet the needs we have identiﬁed in the market.” “It is fantastic to ﬁnally see the results of many years development now that we move on to the operational phase.” CEO of Remotion, Morten Urrang CEO of Remotion, Morten Urrang The latest Remotion robot is a complete surface maintenance system, where all the sequences are robotic. beerenberg.com 26 Annual report 2022 Environmental, Social and Governance (ESG) Our commitment to ESG and sustainability is founded in our vision of exceeding expectations, creating shareholder and partner value through sustainable commercial operations. We have included “invest in Sustainability” in our corporate strategy. To further reduce our emissions, we focus on improving our operations and engaging our supply chain. We innovate to reduce emissions and waste In 2022 we reinforced our efforts to reduce emission by investing in new technological solutions that help us do so. We acquired a company to further develop robot technology, primarily in use for the surface protections programs. This technology has a proven track record of less emission and waste, and it provides better safety for our operators as it reduces risk for work in heights. Through the year we have reﬁned the process for measuring emission and waste based on sold surface protections product and services. The results of reduced emission and waste has led to increased customer focus and awareness leaning towards new surface treatment methods. Come 2023 we will continue the work by addressing products and services related to Scaffold. Our ESG strategy is centered around three sustainability pillars: Cooperation with leading Asian companies has led us in the forefront of efﬁcient insulation technologies for reduced carbon footprint. Other technologies have been tested with success outside the oil and gas industry, as tunnels both for road and light rail have had successful implementation of new insulation technologies, reducing both carbon footprint and urban noise. Procurement where selection of electriﬁed equipment was preferred was also part of last year’s investments. Innovation for reduced emissions and waste Developing people and providing safety Transparency and governance We’ve increased work with our suppliers and partners to discover and evaluate potential improvements in technology adoption, tools and work methods. Our goals are to increase our rate of technology adoption, in order to improve safety and quality while reducing emissions and waste. We also have ongoing feasibility studies for circular economy with use of innovative insulation materials. beerenberg.com 28 Annual report 2022 We develop people and create a secure work environment We are open and transparent about ESG risks and opportunities Developing people Risk based approach ESG Operation and management we decided to strengthen our ESG reporting framework, and the company has been investigating international standards for accurate and accessible reporting, improving the ability to manage ESG targets and set actions. These standards will ensure a better preparedness for the EU regulation to come moving forward. The development of managers and employees is one of BBS’s long- term strategic focus areas, set out in the “Invest in People”, one of three pillars in the corporate strategy. In 2022, we focused on surface protection, where we carried out an extensive competence program. Risk management is an integrated part of our business processes and decisions. We assess actual and potential adverse impact to human rights and decent work conditions associated with our operations. Beerenberg is an industrial service provider mainly within oil and gas industry, with employees in several countries and many suppliers around the world. Labor, safety and health are considered potential key risks in our industry. We are applying external country ratings for assessment of human rights risk and performing adequate due diligence processes to prevent such risks. The Company`s ESG work moved from a project in 2021 to a respon- sible department for Sustainability. This work is led by Business support under the professional engagement of the department now named Supply Chain and Sustainability. A cross functional team with representatives from all parts of the organization is supporting the work to coordinate respective activities. First out is the Greenhouse Gas protocol, where scope 1 and 2 will be completed in Q2 2023 also including the Companies subsidiaries in Poland, Thailand, Korean and Singapore. Likely to follow are elements to prepare us for the corporate sustainability reporting directive (ESRS), the GRI (Global reporting initiative) and the TCFD (Task Force Climate Related Financial Disclosure). During the year, Beerenberg completed its own recruitment program to develop new generations of professional operators. We further launched a set of initiatives to increase the number of operators with trade certiﬁcates. Foremen and supervisors are key resources which has been a prioritized group in the program. The overall responsibility for ESG compliance and performance lies with the Management. Our management team ensures the effective governance of ESG issues in daily operations and informs the Board at every board meeting. An ESG committee/sponsor group has been established to support the monitoring of short- and long-term sustainability activities, targets, and decisions. Safe and secure working conditions Another central element of “Invest in People” is the development of young managers and talents. An ambitious target was set where we aim to recruit 80% of operational managers from our own ranks, which was nearly on target. 2022 also included a trainee- and an annual award program. Ensuring the safety and security of everyone working for Beerenberg is a prerequisite for everything we do. Our skilled employees deliver high-quality work for our customers in ever-changing conditions around the world, and it is our responsibility to keep them safe. Our health, safety, and environmental initiatives are embedded in a zero accidents philosophy, with HSE as an integrated element in all parts of our business. Beerenberg has had a focus to incorporate ESG as part of the DNA by linking activities, work and result in a sustainable perspective. In our effort to be open and transparent, we have published a number of articles about our ESG activities and improvements. ESG Reporting framework For several years we have reported ESG as part of a digital platform to collect and structure relevant data in “Position Green.” In 2022 A management program for administrative personnel was run for managers at all levels with special focus on interaction and communication. Human right management We have performed a systematic, risk-based Human rights due diligence, including assessing the risk of human rights and corruption in the supply chain. Company is also prepared for reporting on the Norwegian Transparency act and the EU taxonomy summer 2023. HSE Beerenberg has an absolute zero tolerance towards damage to people, environment or material. Beerenberg is continuously working to better the security and well-being for the people involved in our projects. Similarly, our products and methods should be as gentle for the environment as possible. Beerenberg has performed self-assessment in the supply chain, together with carrying out regular supplier follow-up meetings and audits. We carry out continuous training to ensure a high internal ethical standard and have a goal of 90% completion rate.ꢀ Beerenberg believes that all wounds and work-related illnesses or ailments, as well as damage to materials, environment and reputation can be prevented. We therefore view our HSE work as a necessary long-term contribution to the company´s economy, reputation and future growth. This work also means an indispensable requirement to quality, and a focus which permeates everything we do. Gyda decommissioning and completion of preparation phase. beerenberg.com 30 Annual report 2022 Fokus area: Sustainable materials Sustainable methods Innovation for reduced emissions and waste Business ethics Climate action and human rights Goal 2022 Actual 2022 Actual 2021 Impact on Key KPIs UN’s SDGs Reduced release of microplastics in connection with surface treatment Reduced CO2 footprint in connection with surface treatment Number of new sustainable technology or solutions tested and adopted Proportion of suppliers with a ESG program > 25% > 10% > 3 12% 13% 2 27% NA ANSVARLIG FORBRUK OG PRODUKSJON The Beerenberg group’s ethical guidelines are designed to ensure that we are acting in compliance with the company’s values and principles, in terms of business practices and personal conduct. The guidelines are revised annually and adopted by the group’s executive bodies. Human rights are integrated in the Ethical Guidelines. We support and respect all internationally recognized human rights and shall contribute to protect those. In our Human Rights Policy we commit to be in compliance with the Ten Principles of the UN Global Compact including human rights, labour, environment and anti-corruption. line with OECD’s guidelines and UNGP Guidelines and will be found on Beerenberg.com. STOPPE 4 KLIMAENDRINGENE > 50% > 10% 32% 6.6% NA Principles on Business and Human Rights. In 2022 we aimed to have at least 50% of our suppliers with an ESG program, and 80% of our suppliers with signed declaration on ethical guidelines and human right policy. LIVET I HAVET Share of turnover in new and sustainable markets 3% Employees received training in ethics and human rights through the company’s training program also in 2022 with 84% of the employees completed standard trainings in ethics, which includes both e-learning and other tailormade activities such as courses and dilemma training. Fokus area: Safe workenvironment Responsible procurement Attractive workplace Developing people and providing safety The human rights policy is integrated in the compa- ny’s values to be responsible and inclusive. In 2022 Beerenberg focused on the implementation of Norwegian Transparency Act (Åpenhetsloven). Goal 2022 Actual 2022 Actual 2021 Impact on UN’s SDGs Key KPIs Duty to provide information TRIF < 3 6.8 7.9 8.9% 78% NA ANSVARLIG FORBRUK OG PRODUKSJON Any person has the right to information from a company regarding how the company addresses actual and poten- tial adverse impacts uncovered by its due diligence. The right to information includes both general information and information relating to a speciﬁc product or service offered by the company. In 2022 Beerenberg established systems and routines for the handling of information requests and have chosen to share this information openly on the company website. Proportion of sick leave Internal recruitment of managers < 6% 7.3% 71% 43% ANSTENDIG ARBEID OG ØKONOMISK VEKST > 80% > 80% Proportion of suppliers declaration sigend (ethical guidelines/human rights policy) Beerenberg did not receive any formal request for information according to the Norwegian Transparency Act in 2022. Fokus area: ESG gouvernance Transparency and governance ESG communication Business ethics Human Rights Due Diligence In 2022 Beerenberg introduced a new separate Human Rights Due Diligence risk matrix to allocate responsibilities, actions and follow-up plan in order to assess, monitor and report identiﬁed risks. This includes a veriﬁable assessment program in the tender process. Goal Actual Actual Impact on Key KPIs 2022 2022 2021 UN’s SDGs Report on ESG in quarterly and annual ﬁnancial reports Proportion of employees who have completed training in ethics Publish external articles in connection with our quarterly reports 5 > 90% 5 5 NA ANSTENDIG ARBEID OG ØKONOMISK VEKST 84% 10 79% NA Beerenberg also reviewed the human rights obligations in contract obligations and general terms and conditions. INDUSTRI, INNOVASJON OG INFRASTRUKTUR Beerenberg will report on Due Diligence Assessments according to the Transparency Act. This report will be in * Benchmark 2020. Scope surface treatment Offshore ** Benchmark 2020. Scope surface treatment Offshore and Onshore *** > criticality level 2 beerenberg.com 32 Annual report 2022 Increased demand for mechanical services Beerenberg provides an increasing number of mechanical services as part of the company´s onshore and offshore maintenance portfolios. Major players in the energy industry know the importance of carefully planned maintenance. While turnarounds allow for necessary maintenance and the upkeep of safe and efﬁcient operations, the time window to do so is tight. Having access to qualiﬁed personnel with turnaround experience is key to start production without unplanned production loss. tank cleaning. Mechanical services such as cutting, rig assistance, tank maintenance, grating and habitats make up a large part of the work. At Statfjord B, 160 cuts were performed with dimen- sions of up to 30 inches during a pipe replacement programme. With 30 people working in rotation, the pipes were ﬁrst cut on site before being derigged by crews from Apply and Beerenberg and then lowered onto ships. “Our multidisciplinary employees handle demanding work around the clock, in situations where successful execution requires considerable precision,” explains ﬁeld manager FLX Johan Taavo. As a provider of high-quality maintenance work, Beerenberg has invested in mechanical competence. The activity has been high. “Mechanical services have been in high demand, and we are seeing opportunities for further growth.” Since aggressive chemicals cause corrosion and leaks on these installations, regular maintenance is necessary. “Flange surfaces on interior tanks become uneven over time, due to rust. They are then resurfaced using Belzona – liquid, hardening steel – to make them completely level and thus prevent damage and leaks,” he says. VP MMO Ole Christian Thømt Complex operations Beerenberg provides a wide range of services during maintenance shutdowns, including insulation, scaf- folding, surface treatment, rope access, habitats, and beerenberg.com 34 Annual report 2022 Annual Accounts beerenberg.com 36 Annual report 2022 independent valuation. There have not been signiﬁcant transactions with close associates in 2022. 9. The work of the board of directors The board has established procedures to clarify areas of responsibility as a group and as individuals. Corporate A procedure relating to reporting of potential conﬂict of interests to the board has been established.Deviation from code of recommen- dation: Policies relating to preferential treatment of shareholders and sales of own shares have not been established. Governance The board has established an annual plan for the year and has in 2022 had eight meetings. The annual plan includes a three-year strategy plan, budget and target setting and review of the operations with focus on control and risk evaluation. Review of the principles of corporate governance according The Norwegian Code of Practice for corporate governance (NUES) 5. Freely negotiable shares No form of restriction on negotiability is included in the company’s article of association. The board has appointed an audit committee and established guidelines for its work. The members of the audit committee are: Deviation from code of recommendation: None Hilde Drønen, Chairman of the committee Morten Haakon Walde 6. Annual general meeting The company does not have a compensation committee and evaluates the need annually. The company’s shares are not listed. As a consequence, the board has not prepared separate procedures regarding annual general meeting. 1. Review of corporate governance matters relating to the environment, social issues, the working environment, equality and non-discrimination, respect for human rights, and anti-corruption and bribery. The purpose of the principles of corporate governance in Beerenberg AS is to clarify the division of roles between share- holders, the board of directors and executive management more comprehensively than is required by l legislation. There have been no changes in the Code of practice (NUES) in 2022. The board performes an annual evaluation of the work in the board. Deviation from code of recommendation: Based on current ownership structure the board has not seen it as necessary to develop addi- tional guidelines beyond what is described in the legal framework (Aksjeloven). Deviation from code of recommendation: None Deviation from code of recommendation: None 3. Equity and dividends 10. Risk management and internal control 7. Nomination committee The group’s vision is “Beyond Expectations”. The vision commits the corporation and all of its employees to seek solutions that exceed the expectation of the wider world. Total assets at 31 December 2022 was MNOK 1 786 with an equity of MNOK 569, giving an equity ratio of 32%. The board regularly reviews the performance of the company, among others through a monthly and quarterly report. These reports include ﬁnancial information regarding the company and speciﬁc information relating to the business segments in addition to other important areas like HSE. The company’s shares are not listed. As a consequence, the board has not prepared procedures regarding nomination committee. The groups solidity is evaluated based on current targets, strategy and risk proﬁle. The group has set out 3 core values: Deviation from recommendation: Based on current owner- ship structure the board has not seen it as necessary to appoint a nomination committee. Members of the board are appointed by the majority owner. • Inclusive towards individuals, other companies and society as a whole. An open and accommodating attitude shall prevail throughout the group. Beerenberg has a bond listed at the Oslo Stock Exchange. In addition, the board approves signiﬁcant tenders and investments. • Innovative will contribute to create a positive social Development, improve the environment and help safeguard a better future. Deviation from code of recommendation: Dividend policy and spe- ciﬁc capital requirement targets. The Group’s ﬁnancing restricts the company’s rights to pay dividends. Consequently, the board has not found it practical to develop a dividend policy. Furthermore, the board has not seen it as necessary to establish speciﬁc targets for leverage or equity ratio in addition the evaluations that are made continuously and speciﬁed in budgets and strategy plans. The board of directors has an annual review of risk areas and internal control systems. The board of directors also has an annual review of Corporate Governance including ethical guidelines. 8. Corporate assembly and board of directors: Composition and independence • Responsible attitude shall prevail at the company at all levels and in all contexts. The company does not have a corporate assembly. Deviation from code of recommendation: None The boards of directors have the following members: Name Position Chairman Member Member Member Period The group has established ethical guidelines that should form the basis for how Beerenberg conducts business. 11. Remuneration of the board of directors Geir M. Aarstad Sebastian Ehrnrooth Hilde Drønen 2022–2024 2022–2024 2022–2024 2022–2024 The remuneration of the board of directors is established by the annual general assembly and is based on an evaluation of the work- load. The remuneration is not dependent on the ﬁnancial performance of the group. There is no form of incentive arrangement or similar. 4. Equal treatment of shareholders and transactions with close associates Deviation from code of recommendation: None Segulah IV L.P holds 83,9% of the shares in the company. The shares are not listed. As a consequence, there is no speciﬁc policy relating to preferential treatment of existing shareholders nor is there policy relating to sales of shares. Deviation from code of recommendation: Based on current ownership structure the board has not seen it as necessary to develop additional guidelines beyond what is described in the legal framework (Aksjeloven). 2. Business Morten Haakon Walde The group’s operational activity is conducted in Beerenberg Services AS and its subsidiaries. In article 3 in Beerenberg Services AS Articles of Association the purpose of the business is deﬁned: “The objects of the company are to engage in contract work, pro- duction, industrial maintenance, trading, agency and commission work, and to take interests in other enterprises engaged in similar activities by way of share subscriptions or other means”. Please see note 18 for additional information. Sebastian Ehrnrooth represent Segulah IV L.P. which holds 83,9% of the shares in Beerenberg AS. In addition, some current and previous board members and members of the management hold shares in the company. Deviation from code of recommendation: None 12. Remuneration of leading employees The boards view on the remuneration level for leading employees are that they should be on a competitive level and motivating. The board has not established guidelines relating to remuneration to leading employees. There should be no remuneration which is not subject to limitations. Please see note 18 for further information. With regards to transactions with close associates the board of directors has prepared guidelines where the basis for the transaction should be based on an independent, 3rd party valuation. However, if the matter relating to the valuation has been satisfactory handled, the board may decide to forego the Geir M. Aarstad, Hilde Drønen and Morten Haakon Walde are all independent of the company, its management and its largest shareholder. The group will conduct the business in line with established sustainability targets. The group will also provide information on Deviation from code of recommendation: None beerenberg.com 38 Annual report 2022 Deviation from code of recommendation: None 15. Auditor The auditor has minimum two yearly meetings with the audit com- mittee. In addition, the auditor participates in a board meeting in connection with the approval of the annual accounts where sections of the meeting are without participation from the management. Board 13. Information and communication The group has established policies relating to ﬁnancial information. Beerenberg’s reporting is aiming to be clear and precise and ensure that the general principle of equal treatment is fulﬁlled. of Directors The auditor presents the plan for the annual audit to the audit committee where priorities and risk evaluations including internal control are presented. The auditor prepares an audit report about the annual accounts based on the annual audit plan. Deviation from code of recommendation: None 14. Takeover There are no provisions or limitation relating to a take- over in the articles of association. There are no other limitations to limit acquisition of the company’s shares. The total fee paid to the auditor, where a distinction between the auditor fee for annual audit and other services provided are shown in note 7. The extent of other services outside the audit is reviewed by the audit committee. The audit committee evaluates the auditor’s independence. Deviation from code of recommendation: Guidelines relating to takeover has not been established. The board has, considering the current ownership structure, not seen the need to establish guidelines in case of a takeover. Deviation from code of recommendation: The board has not seen it as necessary to establish additional guidelines. Geir M. Aarstad Sebastian Ehrnrooth (1960), Chairman of the board. Aarstad has a long and broad experience from the construction industry, not least through his many years at Skanska where Aarstad was CEO from 2004 to 2009. He then took over as CEO of the Saudi company Al Rajhi Contracting. Since 2011, Aarstad has prioritized board positions. Today Aarstad is involved in a number of boards including Nordic Concrete Group, Stange- land Gruppen and Teqva Gruppen. (1963), investors representative and Senior Advisor at Segulah Advisor AB. Ehrnrooth was formerly Deputy CEO of CityMail, project manager at Bain & Company and sales manager at Motorola. Ehrnrooth holds board room positions at KP Components and AB Gurkmejan. Hilde Drønen Morten Walde (1961), holds a master degree from Business School of Management and a MBA from Norwegian School of Eco- nomics. Drønen has been the CFO of DOF ASA since 2004. Drønen held the position as CFO in Bergen Yards from 2002 to September 2004 and has before that held various senior positions in the Møgster Group. Drønen has more than 30 years of experience within the oil and gas industry and has served as director in several external companies mainly in the energy sector. Drønen is currently a board member in BWE Energy Ltd. Hilde Drønen is an independent board member. (1969), President & CEO in TS Group, has more than 25 years of experience from various operational- and strategic positions in the international oil& gas industry. Walde was formerly President & CEO in Beerenberg (2008-2018) and holds several non-executive positions in different branches today. beerenberg.com 40 Annual report 2022 The Net interest-bearing debt was NOK 593 million in 2022 compared to NOK 551 million in 2021. the oil companies’ actions and the prevailing oil and gas prices. To mitigate this, Beerenberg has diversiﬁed into various segments of the market, e.g., new-build and maintenance and modiﬁcation projects. Beerenberg is also expanding internationally, with the proprietary Benarx® product range and it is looking into related market segments, such as infrastructure for both products and services. Shareholders Annual Director’s Segulah IV L.P. owns 83,9% of the shares in Beerenberg AS. The remaining shares are held by Alpinvest Partners Co-Investment, pre- vious and current board members and the Beerenberg management. Report There is reason to believe that investment growth on the Norwegian Continental Shelf will abate in the long term. To expand its operations and customer base, the group has therefore been working to grow its international presence. Financial risk In a signiﬁcantly evolving energy landscape impacted by the tragic war in Ukraine, Beerenberg has navigated safely through 2022. The year has been affected by elevated energy prices, increased commodity prices, Covid-19, broad-based inﬂation and global supply chain constraints. The board of directors of the Beerenberg group sets out a framework and develops guidelines for risk management in the group and continuously controls and supervises the implementation of these. The group’s central ﬁnance department has overall responsibility for day-to-day management and follow-up of the group’s ﬁnancial risks and works closely with the operational units to identify, evaluate and implement necessary measures to reduce risk. Risk management covers credit risk, currency risk, interest rate risk, ﬁnancial and liquidity risk, market risk and technology risk. The current European energy situation where energy sequrity for Europe becomes even more important, might inﬂuence the level of maintenance and investments in oil and gas. Despite the unpredictability such challenges present to international businesses, Beerenberg has been successful in delivering on the company’s targets for revenue growth, proﬁtability, order intake and shareholder value creation. Technology risk The market in which Beerenberg operates will continue to seek improved solutions and products for the future. To maintain its competitive edge, the group has adopted a strategy of continued investment in engineering services, digitalization, and R&D along with an ambition to protect its assets through patents and other proprietary rights. Credit risk Business areas Capital, cash ﬂow and liquidity The Beerenberg group conducts business in an environment domi- nated by large clients with high credit ratings, and historically there have been few losses incurred on its receivables. New customers are credit-checked before entering contracts, and efforts are made during international operations to use letters of credit to safeguard receivables and payment demands wherever possible. The oil and gas market have elements of increased credit risk. To deal with these, the group has introduced additional measures to monitor credit risk within certain client segments, especially maintenance, modiﬁcations and for international clients. Beerenberg´s activities include innovative service solutions for the oil and gas industry, covering the entire life cycle from ﬁeld studies and newbuilds to maintenance, modiﬁcations, and lifetime extensions. The business area Services include Beerenberg´s core ISS disciplines Insulation, Scaffolding and Surface treatment, as well as passive ﬁre protection, technical cleaning, rope access techniques, robotic surface treatment, architectural outﬁtting services, and the cold work concepts Sveisolat (habitats) and cold cutting / mobile machining all primarily offered to clients mainly on the Norwegian Continental Shelf (NCS). Total assets at the end of 2022 amounted to NOK 1.786 million, down from NOK 1.830 million in 2021. The equity was NOK 569 million, up from NOK 546, corresponding to an equity ratio of 32% in 2022 and 30% in 2021. Cyber Risk The risks posed by cyber criminals continue to be a threat to both the business and operations. This risk is managed by the IT-Department who closely monitors new Cyber threats that continues to emerge and take actions to protect Beerenberg against these threats. Cash ﬂow from operating activities depends on several factors, including activity level, progress on and delivery of projects and changes in working capital. Cash ﬂow from operating activities was NOK 51 million, compared to NOK 109 million in 2021. Phishing emails are the most typical cyber-attacks. However, as more devices are being connected to internet there is increasing risk linked to these devices and the systems they are connected to. Measures is taken to secure email, improve capabilities to identify ongoing malicious activities, and increase employee awareness of cyber threats. Beerenberg’s net cash outﬂow for investing activities was NOK 62 million in 2022, up from NOK 39 million in 2021 due to acquzition of Remotion. Currency and interest rate risk The Benarx business area is built around the proprietary Benarx® product range, which includes high speciﬁcation insulation products (thermal, acoustic, and passive ﬁre protection) as well as insulation solutions for subsea installations. A key principle for the Beerenberg group is to keep the currency risk as low as possible by using the same currency for both income and expenditure. In its international operations the group is not always able to follow this principle and as a result client and supplier contracts involving currency exposure beyond deﬁned limits should be hedged. A limited amount of the group’s revenues, expenditure and investments are denominated in foreign currencies. The group’s interest rate risk in relation to interestbearing debt is for the most part hedged through an interest rate agreement, whereby a variable NIBOR-based interest rate plus a spread has been swapped so that exposure towards ﬂuctuations in the short-term interest rate is reduced. The existing swap has maturity November 2023. Net cash ﬂow related to ﬁnancing activities was NOK -69 million, up from NOK -16 million in 2021. The cash outﬂow in 2022 is related to amortization of the bond. Beerenberg is headquartered in Bergen, with regional ofﬁces in Skien, Poland, UK, South Korea, Thailand, and Singapore. Research and development In regard to research and development, The Beerenberg group’s focus is on product and method development in the ﬁeld of ISS. Beerenberg is working actively with research communities and institutions to develop new technology and inhouse expertise within the group’s areas of operation. Research and development are conducted in close partnership with clients to create value for the group’s customers. Total non-current assets were NOK 1059 million in 2022, up from NOK 1034 million in 2021. Current assets were NOK 726 million in 2022, down from NOK 796 million in 2021. Financial statement The operating revenue in 2022 increased by approx. 4% to NOK 2,222 million from NOK 2,136 million in 2021. Total current liabilities were NOK 1.172 million in 2022, up from NOK 601 million and total non-current liabilities were NOK 45 million down from NOK 682 million in 2021. The changes from 2021 to 2022 is mainly explained by reclassiﬁcation of the bond from long term to short term liability since the bond has less than a year to maturity. Earnings before interest, taxes, depreciation, and amortisation (EBITDA) ended at NOK 180 million, compared to NOK 216 million in 2021. The EBITDA margin was 8,1%, down from 10,1% in 2021. Financial and liquidity risk The Beerenberg group´s continuous focus on research and develop- ment has resulted in 17 registered patent families with 44 regional and national patents per 31.12.22. The group´s ﬁnancing arrangement requires it to achieve adequate cash ﬂow and revenues over time. The group continues to measure the ﬁnancial criteria in line with the terms of the agreement. Net ﬁnancial cost for the full year ended at NOK 79 million, down from NOK 82 million last year and the full year net proﬁt of 2022 was NOK 19 million versus a proﬁt of NOK 56 million in 2021. Sustainability governance The process of reﬁnancing the bond is ongoing and the company is working on different solutions to ﬁnd the best outcome for Beerenberg. The board is conﬁdent that the company will succeed with the reﬁnancing process. In accordance with Section 3-3a of the Norwegian Accounting Act, the board can conﬁrm that the requirements for the going concern assumption have been satisﬁed and that the ﬁnancial statements have been prepared on that basis. The Beerenberg group’s ﬁnancing is partly a bond loan with expiry date November 2023. In addition, the group has a revolving credit facility in a commercial bank. For Beerenberg, the attention to ESG is fundamentally about safeguarding our own future, securing sustainable conditions for the environment, and helping a positive social development. The estimated order backlog at the year-end, including frame agreements and options, was NOK 7.9 billion, up from NOK 7.3 billion in 2021 both due to order intake and a revised market adjustment of the frame agreements adding NOK 1.0 billion to the order backlog. Market risk ESG is linked to the long-term success of Beerenberg. It is our vision to go “Beyond expectations” to seek solutions that exceed the expec- tations of stakeholders, and we therefore have a responsibility to The Beerenberg group operates in the oil and gas market, which due to price ﬂuctuations can be volatile. Beerenberg is affected by beerenberg.com 42 Annual report 2022 drive necessary changes, while continually seeking out and creating more sustainable solutions. We have consistently been working on our HSEQ performance and we have worked on strengthening our approach to the wider ESG scope. In 2022 the group have reported on different KPI’s in relation to our ESG strategy. We are committed to further develop and implement our ESG strategy in line with recognized ESG frameworks and stakeholder expectations. and material assets. The effort to prevent acute damage to health and injuries is a high priority for Beerenberg. By focusing on training, health monitoring, risk management and robust working practices, Beerenberg seeks to reduce the risk of health issues and injuries amongst employees exposed to risk. Beerenberg’s health monitoring programme also applies to our subcontractors and is managed through contract meetings, reporting and audits. Climate risk therefore subject to risks and uncertainties. Climate change related risks comprises climate related physical events that may impact the integrity of our and others assets (physical risks), as well as strategic challenges arising from climate related policies, regulations and customers’ demand for zero or low-emission solutions (transition risks). Management and board liability Insurance Management and board liability Insurance has been established for the board members and management. The insurance covers any personal liability that they may incur in connection with the performance of their duties. The insurance is established on market terms in an international insurance company with a solid rating. Physical risks could result from climate related acute and/or chronic changes in rainfall patterns, shortages of water or other natural resources, variations in sea levels, storm patterns and intensities as well as temperatures. Social responsibility and ethics Good working practices, job planning, and procedures alone are not enough to prevent sickness and injury. The key issue is compliance, whereby the knowledge and motivation of individual employees are key factors. Beerenberg’s commitment to HSE includes (but is not limited to) obligatory HSE training for all employees and contractors as well as a three- day HSE course for all managers. Beerenberg’s annual report includes a separate account of the group’s approach, conduct and guidelines in relation to social responsibilities and ethics. The group´s ethical guidelines are a central part of its training programmes as training in the group’s ethical guidelines helps ensure that employees and others acting on behalf of the group exercise good judgement and behave in a manner that is consistent with the group´s ethical rules. The board’s statement on corporate governance and executive management Transition risks could result from an increased demand for lowcarbon products and solutions, higher price for greenhouse gas emissions as well as changes in market prices for oil-related products and therefore lower demand for our services. The board of directors has directed the company and the group to develop procedures and systems for compliance with the Norwegian Code of Practice for Corporate Governance. Central to Beerenberg’s preventive HSE programme are also various surveys designed to strengthen our knowledge base, identify risk and associated HSE measures. The associated statement is presented as a separate part of the annual report. Human relations, organisation and working environment Future prospects Human relations and working environment Beerenberg’s strategy plan was revised in the autumn of 2022. The plan provides a framework for the group’s development up until 2025. The Groups priorities in the period includes invest in people, invest in sustainability and invest in technology. The group is working to reduce sickness absence, both at a collective and an individual level. Sickness absence in 2022 stood at 8,2 %, in line with 8,3% in 2021. Short-term sickness absence accounted for 4.5% and long-term absence for 3.7%. The corresponding ﬁgures for 2021 were 4.0% and 4.3%, respectively. The Beerenberg group had 1,432 employees as at 31.12.22, up from 1.247 at the end of 2021. Including contractors, the number of FTEs totalled 1,912. Transparency Act Beerenberg has made a separate statement according to the “Transparency Act”. The statement could be read at Beerenberg.com. Beerenberg seeks to sustain a good working environment with enthu- siastic and motivated staff who feel that they are being well looked after. The group has staff arrangements and fora for cooperation between staff and management, as is common within the sector. We expect that the maintenance and modiﬁcations market will grow in the coming years. The group’s long-term contracts over 10 and 15 years will provide a solid base for the group going forward. Yet it is important to note that the market is shaped by external factors, especially the price of oil. Based on public reports from Rystad Energy, the ISS market is expected to remain strong in the coming years. The board’s assessment and events after the balance sheet date After the reporting date one of Beerenbergs employees was injured in a work accident at Mongstad. The employee, who was seriously injured, is in stable condition and receiving treatment at Hospital. After the accident Beerenberg has been closely following up all parties concerned. Beerenberg are carrying out a joint investigation of the accident together with client in addition to other relevant authorities’ investigations, in line with customary policies pertaining to serious accidents. In 2022, Beerenberg recorded 20 Incident involving personal injured requiring more than ﬁrst aid; Four Serious Lost Time injuries (SLT), Six lost time injuries (LTI), where Fourteen injuries required medical treatment and ﬁve of those were resolved with alternative work. Equality and discrimination Beerenberg has respect for every individual and recruitment is based on qualiﬁcations without regard for the candidate’s gender, age, disability, sexual orientation, ethnicity, religion, or cultural background. Beerenberg wishes to create an inclusive workplace culture and is working actively to ensure a good working environment. All employees shall be given salary and working conditions that are competitive and fair. Beerenberg continues its systematic and preventive approach to reducing the number of incidents. Throughout 2022, the group has taken steps to mitigate inﬂation in order to increase competitiveness and these initiatives will continue. Together with the group’s robust foundations, this means the group expects to maintain its revenues and see long term growth within the oil and gas sector as well as outside in new sectors. The natural environment In the board’s view the ﬁnancial statements and statement of ﬁnancial position with accompanying notes provide a true picture of the activities of Beerenberg AS and of the group’s position at year end. When conducting its operations, Beerenberg aims to minimize the environmental impact and the group aims to continuously improve its environmental performance. It is Beerenberg’s ambition to increase the proportion of women at all levels within the organisation by taking a systematic approach to recruitment and enabling development and growth within the organisation. Female employees, most of whom serve in adminis- trative positions, made up 7.5% of the workforce at year end. In 2022 there were one woman in the group management team and one woman on the board of directors. The board emphasis that the information included in this annual report contains certain forward-looking statements that address activities or developments that the Company anticipates will or may occur in the future. The statements are based on assumptions and estimates, and some of them are beyond the Company’s control and In accordance with Section 3-3a of the Norwegian Accounting Act, the board can conﬁrm that the requirements for the going concern assumption have been satisﬁed and that the ﬁnancial statements have been prepared on that basis. Beerenberg’s impact on the natural environment is primarily con- sidered to stem from emissions of volatile organic compounds (VOCs) because of the use of paint products and solvents. This is a natural consequence of the group’s activities, and the volume of VOC emissions will always reﬂect the volume of assignments and the type of products being ordered and delivered. Beerenberg endeavours to use alternative products and services that help reduce the environment footprint and with a lesser impact on the environment where possible (the substitution requirement). To reduce the negative environmental effects of its waste output, Beerenberg has introduced robust procedures for waste disposal and ﬁnal processing (material and energy harvesting). The work of reducing microplastics is at the top of Beerenberg´s agenda through extended use of robots to collect microplastic. Bergen 28 April 2023 Organization The group is organised as two business divisions – Services and Benarx. The group made one acquisition in 2022. In April Beerenberg acquired Remotion AS. Remotion have state of the art robotics for both surface treatment and splash zone operations. Beerenberg see the acquisition of Remotion as a valuable tool for the surface treatment of the future. Board of Directors at Beerenberg AS Geir Aarstad Sebastian Ehrnrooth Morten Walde Health, Safety and the Environment Beerenberg is certiﬁed according to NS-EN ISO 9001: 2015 Quality management, NS-EN ISO 14001: Beerenberg continuously works to prevent injury and to create a working environment that is meaningful and healthy for all employees. Beerenberg has adopted a zero-tolerance philosophy in relation to injury to people, damage to the natural environment 2015 Environmental management, and NS-ISO 45001: 2018 Occupational health and safety. Hilde Drønen Arild Apelthun beerenberg.com 44 Annual report 2022 Annual Accounts BEERENBERG AS GROUP BEERENBERG AS 46 47 48 50 51 Consolidated Income Statement 86 87 88 90 91 Income statement Consolidated Statement of Comprehensive Income Consolidated Statement of Financial Position Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows Statement of Comprehensive Income Statement of Financial Position Statement of Cash Flows Accounting principles Notes Notes 92 92 92 93 93 94 95 95 96 96 Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Long-term investments in other companies 52 52 52 56 59 61 62 63 64 65 67 69 71 75 75 75 Note 1 Note 2 Note 3 Note 4 Note 5 Note 6 Note 7 Note 8 Note 9 Note 10 Note 11 Note 12 Note 13 Note 14 Note 15 Note 16 Information about the group Basis of preparation Accounting principles Financial risk management Segment 76 77 78 78 78 79 79 80 81 82 83 84 84 Note 17 Note 18 Note 19 Note 20 Note 21 Note 22 Note 23 Note 24 Note 25 Note 26 Note 27 Note 28 Note 29 Employee beneﬁts – pensions Remuneration of key employees Warranty liabilities and provisions Other short-term liabilities Contingent outcomes Related parties Restricted funds Share capital and shareholder information Equity Non-current and current liabilities, collateral and guarantees, etc. Ta x Revenue Payroll costs, number of employees, remunerations, loans to employees ect. Speciﬁcation of ﬁnance income and ﬁnance costs Financial instruments Other operating costs Personnel costs Group entities Derivatives Finance income and ﬁnance costs Ta x Interest-bearing liabilities Secured Liabilities Events after the reporting date Property, plant and equipment Intangible assets and Goodwill Financial instruments Inventory Acquisition of Remotion AS Climate Risk Events after the reporting date Bank deposits and cash equivalents Share capital and shareholder informations beerenberg.com 46 Annual report 2022 BEERENBERG AS GROUP Consolidated Income Statement Consolidated Statement of Comprehensive Income (Amounts in NOK 1 000) (Amounts in NOK 1 000) Note 5, 6 2022 2021 Note 2022 2021 Revenue from contracts with customers Other revenue 2 221 541 337 2 128 301 7 718 Annual proﬁt/loss 19 416 56 433 Total revenue 2 221 878 2 136 019 Other revenue and expenses Materials, goods and services Personell costs 196 723 1 498 268 346 881 165 859 1 430 805 322 904 Change in value of derivatives Conversion differences 24 4 025 6 100 8,17,18 7 -1 077 -3 379 Other operating costs Total operating expenses 2 041 872 1 919 568 Total Statement of Comprehensive Income 22 364 59 153 Operating result before depreciation, amortisation and impairment losses Depreciation, amortisation and impairment losses Operating result 180 006 81 904 98 103 216 451 63 382 The comprehensive income is attributable to: Shareholders of the parent company Non controlling interests 22 793 -429 60 481 -1 327 59 153 11, 12 Total Statement of Comprehensive Income 22 364 153 069 Other revenue and expenses is after tax and will be reversed in the income statement. The accompanying notes 1-29 are an integral part of these ﬁnancial statements. Financial revenue 9 6 688 2 153 Financial expenditure 9, 25 85 393 84 368 Result before tax Tax 19 398 -19 70 854 14 421 56 433 10 Annual proﬁt/loss 19 416 The annual proﬁt/loss is attributable to: Shareholders of the parent company Non controlling interests 19 846 -429 57 760 -1 327 56 433 Annual proﬁt/loss 19 416 Basic earnings per share for 1.000.000 A-shares 16 0,019 0.056 Diluted earnings per share are identical as there is no dilutive effect. The accompanying notes 1-29 are an integral part of these ﬁnancial statements. beerenberg.com 48 Annual report 2022 Consolidated Statement of Financial Position (Amounts in NOK 1 000) Note 2022 2021 (Amounts in NOK 1 000) Note 2022 2021 Assets Equity and Liabilities Noncurrent assets Equity Intangible assets 12 12 52 079 782 762 210 040 14 276 19 246 782 762 208 340 20 221 Share capital 26 700 240 310 302 324 -542 26 700 240 310 279 531 -113 Goodwill Share premium Other equity Property, plants and equipment Financial ﬁxed assets Deferred tax assets Total Noncurrent assets 11, 26 17, 24 10 Non controlling interests Total equity 19 3 010 16 568 792 546 428 1 059 176 1 033 579 Liabilities Current Assets Pension liabilities 17 19 331 26 095 45 426 17 322 665 173 682 495 Inventory 14, 26 6, 13, 26 6, 13, 21 13, 24 93 889 261 679 215 854 41 939 77 790 306 387 195 220 23 701 Interest bearing long-term liabilities Total long-term liabilities 13, 25, 26 Accounts receivable from customers Earned, not invoiced accounts receivables Other receivables Interest bearing short-term liabilities Supplier liabilities 13, 25, 26 10 679 968 133 876 9 364 78 861 188 014 18 520 Cash at bank 13, 15 113 289 726 651 1 785 827 193 345 796 443 1 830 022 Total current assets Total Assets Tax payable Social security, VAT and other taxes Other short-term liabililities Warranty liabilities 83 486 90 967 20, 21 19 242 688 22 227 203 210 21 527 Total short-term liabilities Total liabilities 1 171 609 1 217 035 1 785 827 601 099 1 283 594 1 830 022 Total equity and liabilities The accompanying notes 1-29 are an integral part of these ﬁnancial statements. Bergen 28 April 2023 Board of Directors at Beerenberg AS Geir Aarstad Sebastian Ehrnrooth Morten Walde Hilde Drønen Arild Apelthun beerenberg.com 50 Annual report 2022 Consolidated Statement of Changes in Equity Consolidated Statement of Cash Flows (Amounts in NOK 1 000) Note 2022 2 021 Non controlling interests Share capital Share Conversion Hedging reserve Retained earnings (Amounts in NOK 1 000) premium reserve Total Total Cash ﬂows from operating activities Result for the period before tax 19 398 -19 765 -141 70 854 -15 565 -2 935 63 382 -11 541 -56 777 52 728 1 497 Equity as per 31.12.2020 26 700 240 310 240 310 240 310 2 329 -875 217 596 486 060 811 486 871 Tax paid for the period Gains/losses from sales of ﬁxed assets Depreciation, write-down and amortisation Changes to inventory Annual result for the period Other Comprehensive income 57 760 57 760 2 721 -1 327 56 433 2 721 11, 12 14 81 904 -16 099 44 708 -54 138 1 257 -3 379 6 100 Changes to accounts receivable from customers Changes to supplier liabilities 13 Transactions with shareholders Difference between expensed and paid-in/out pension premium Changes to other time restricted items Changes in non-controlling interests 404 -113 -429 404 546 428 19 416 2 947 -6 192 7 729 Equity as per 31.12.2021 Annual result for the period Other Comprehensive income 26 700 -1 050 5 225 275 356 546 541 19 846 2 947 Net cash ﬂow from operating activities 50 931 109 372 19 846 Cash ﬂows from investment activities Incoming payments from the sale of tangible and intangible ﬁxed assets Outgoing payments from acquisition of tangible and intangible ﬁxed assets Net cash effect from acquistion of subsidiary 11 11, 12 27 664 -37 217 -25 183 3 186 -42 663 0 -1 077 4 025 Transactions with shareholders Changes in non-controlling interests 0 Net cash ﬂow from investment activities -61 736 -39 477 Equity as per 31.12.2022 26 700 -2 127 9 249 295 201 569 334 -542 568 792 Cash ﬂows from ﬁnancing activities Outgoing payments on lease liabilities Incoming payments on long-term loans Outgoing payment on long-term loans Payments from entry of non-controlling interests 13, 25 13, 25 13, 25 -15 690 -15 866 50 000 -50 822 404 The accompanying notes 1-29 are an integral part of these ﬁnancial statements 0 -53 561 0 Net cash ﬂow from ﬁnancing activities -69 251 -80 056 193 345 113 289 -16 284 53 612 Net changes to cash and cash equivalents Cash and cash equivalents per 01.01 139 733 193 345 Cash and cash equivalents per 31.12 15 The accompanying notes 1-29 are an integral part of these ﬁnancial statements beerenberg.com 52 Annual report 2022 to ﬁnancial instruments as trade receivables, other receivables and bank deposits. Trade receivables Trade receivables are amounts due from customers for goods sold or services per- formed in the ordinary course of business. They are generally due for settlement within 30-45 days and are therefore all classiﬁed as current. Trade receivables are recognised initially at the amount of consideration that is unconditional, unless they contain signiﬁcant ﬁnancing components, when they are recog- nised at fair value. The group holds the trade receivables with the objective of collecting the contractual cash ﬂows and therefore measures them subsequently at amortised cost using the effective interest method. Details about the group’s impairment policies and the calculation of the loss allowance are provided in note 13. useful lives, they are accounted for as separate components. Gains and losses on disposal are included in the operating proﬁt or loss. BEERENBERG AS GROUP - NOTES Financial liabilities are recognized at fair value and are measured, as a main rule, in subsequent periods at amortized cost. Financial liabilities like trade payables, leasing, bond, and other liabilities are classiﬁed as amortized cost. Functional currency and presentation currency The consolidated ﬁnancial statements are presented in NOK, which are both the func- tional currency of the parent company and the presentation currency of the group. The accounts of individual entities within the group are measured in the currency used where the entity predominantly operates (functional currency). The group have subsidiaries in Poland, UK, Thailand, Singapore and Korea where the functional currency is PLN, GBP, THB, SGD and KRW respectively. However, of the groups consolidated revenue more than 90% is in NOK, thus changes in currencies have limited impacts on the consolidated ﬁgures consideration paid, the excess is immediately recognized as income. The allocation of the purchase price upon consolidation is amended if new information appears about the fair value applicable on the date control was obtained, no later than 12 months after the acquisition took place. Intragroup transactions, balances and unre- alised gains are eliminated. Unrealised losses are also eliminated but are considered to be an indicator of impairment, which would require an assessment to be made as to whether the transferred asset should be written down. Goodwill The group measures Goodwill as the fair value of the consideration transferred, less the net amount (normally fair value) of the identiﬁable assets acquired and liabilities assumed, all measured as at the acquisition date. Goodwill is distributed to cash-generating units and is not subject to an amortisation schedule but is tested for impairment annually and when there is an indication that a write-down is necessary. Goodwill write-downs are not reversed. For the purpose of testing Goodwill for impairment, Goodwill is allocated to the cash-generating units that are expected to beneﬁt from the acquisition. Note 1 Information about the group If an impairment in the fair value of a ﬁnancial asset has been taken directly to other income and expenses, and if there is objective evidence that the asset has been the subject of an impairment, the accumulated loss that has been recognized directly in other income and expenses in proﬁt or loss will be recognized. This applies even if the ﬁnancial asset has not been realised. The loss recognized in proﬁt or loss is the difference between the acquisition cost at the time of acquisition and the current fair value, less any impairment of the ﬁnancial asset previously recognized in proﬁt or loss. Beerenberg AS is a limited liability company registered in Bergen, Norway. The Beerenberg Group comprises the parent company Beerenberg AS and the subsidiaries Beerenberg Holding AS, Beerenberg Services AS, Beerenberg Industri AS, Remotion AS, Beerenberg Solutions Poland Sp. z o.o, Beerenberg Korea Ltd, Beerenberg Singapore Ltd, Beerenberg UK Ltd, Beerenberg Holding (Thailand) Co. LTD and Beerenberg Thailand Ltd. The head ofﬁce is in Bergen and the group has ofﬁces in Stavanger and Skien in Norway, in Singapore, in Gościcino in Poland, Busan in South-Korea and in Chonburi in Thailand. The group delivers expertise and technology as well as engineering and inspection services in the ﬁelds of surface treatment, passive ﬁre protection, insulation, architecture/interiors, scaffolding, Rope access techniques, and habitats as well as mobile machining, cutting and decommissioning. The consolidated ﬁnancial statements comprise the parent company and subsidiary companies, referred to collectively as “the group” and individually as “group entities”. Refer to note 16 for ownership structure. The annual ﬁnancial statements were author- ised for issue by the board of directors on 28 April 2023. Trade payables and other short-term payables Trade payables are measured at fair value when initially recognized and at amortised cost in subsequent periods. Due to their short residual maturity, the nominal value of the payables is deemedtoreﬂecttheirfairvalue/amortisedcost. Group entities The statements of financial position and comprehensive income of group entities with a functional currency that differs from the presentation currency are translated as follows: a) The statement of ﬁnancial position is trans- lated using the exchange rate at the end of the reporting period b) The statement of comprehensive income is translated using the average exchange rate (if the average exchange rate does not give a reasonable overall estimate for the transaction exchange rate, then the transaction exchange rate is used) c) Translation differences are taken to other revenues and costs and are speciﬁed as a separate item. Basis of calculations The consolidated ﬁnancial statements have been prepared using historical cost principles, with the exception of - Derivatives, which are assesed at fair value. Withtheexceptionofinventories(seeInventories) and deferred tax assets (see Income tax), the carrying amount of the group’s ﬁnancial assets is continually assessed to determine whether there is any indication of impairment. If any such indication exists, the asset’s recoverable amount is estimated. Intangible assets Research and development Expenditure on research activities, undertaken with the prospect of gaining new scientiﬁc or technical knowledge, is recognized in proﬁt or loss as incurred. Development activities include designs or plans for the production of new or substantially improved products and processes. Development expenditure is capitalized only if it can be reliably measured, if the product or process is technically or commercially viable, if future economic beneﬁts are probable, and if the group intends to and has sufﬁcient resources to complete the development and to sell or use the asset. The expenditure capitalized includes materials, direct labour, directly attributable overhead costs and borrowing costs. Other development expenditure is recognized in proﬁt or loss as incurred. Capitalized development expenditure is meas- ured at cost less accumulated amortisation and accumulated impairment losses. Cash and cash equivalents Cash and cash equivalents comprise cash and bank deposits. Note 3 Accounting principles Share capital Ordinary shares are classed as equity. Costs directly attributable to the issue of ordinary shares are recognized as a deduction from equity (share premium) net of any tax effects. Fair value through other comprehensive income The group has entered into an interest swap in order to reduce the risk of variable interest rate on Bond. This interest swap is designated as a hedge instrument in hedge accounting in accordance with IFRS 9, and changes in fair value of this interest swap is recognized through other comprehensive income. Details of this interest swap is further described in note 24. The accounting principles described below have been consistently applied to all companies in the group in all periods. Tangible non-current assets The group’s tangible non-current assets comprise production equipment, workshops and improvements to buildings and other operating equipment. Tangible non-current assets are recognized in the statement of ﬁnancial position at cost less accumulated depreciation and write-downs. The cost price of tangible non-current assets is the purchase price including expenses directly attributable to the purchase of the asset. The cost of self-constructed assets includes the cost of materials, direct labour costs, borrowing costs and other costs directly attributable to bringing the assets to a working condition for their intended use, the cost of dismantling and removing the items, and restoring the site on which they are used. Expenses incurred after the non-current asset has been put into use, such as ongoing daily maintenance, are recognized in proﬁt or loss in the period in which they were incurred, except for other expenses expected to generate future economic beneﬁts that are recognized as a part of the non-current asset. If substantial, individual components of an item of property, plant and equipment have different Consolidation principles Subsidiary companies The subsidiary companies include all entities where the group has a deciding inﬂuence on the entity’s ﬁnancial and operational strategy, normally through the ownership of more than 50% of the voting capital, and where the entity constitutes an enterprise. Subsidiaries are consolidated from the date when control was transferred to the group. Consolidation ceases on the date when the group no longer has control. Acquired subsidiaries are accounted for in the consolidated ﬁnancial statements based on the parent company’s acquisition cost. When acquiring a subsidiary company, the purchase price of the acquired undertaking must be distributed so that the opening balance of the group reﬂects the estimated fair value of the assets and liabilities that have been acquired. In order to establish the fair value of an acquisition, alternative methods must be used for assets for which there is no active market. Excess value beyond that which can be attributed to identiﬁable assets and liabilities is recognized as Goodwill. If the fair value of the equity in an acquired company exceeds the Conversion reserve This fund is a part of the statement of equity and includes all foreign exchange differences related to the conversion of ﬁnancial state- ments from foreign subsidiaries. Fair value through proﬁt or loss By default, other ﬁnancial instruments that are not classiﬁed as amortized cost or designated as a hedge instrument and recognized as fair value through other comprehensive income is recognized as fair value through proﬁt or loss. Derivatives are classed as ﬁnancial assets at fair value through proﬁt or loss, unless they are part of a hedge relationship. The only derivative the group have in 2022 is designated as a hedge instrument, thus there are now no ﬁnancial instruments recognized through proﬁt or loss Note 2 Basis of preparation Financial instruments The group initially recognizes ﬁnancial instru- ments on the date the group becomes a party to the contractual provisions of the instrument. Conﬁrmation of ﬁnancial framework The consolidated ﬁnancial statements have been prepared in accordance with EU-approved IFRS standards and associated interpreta- tions as required as at 31 December 2022 and in accordance with additional Norwegian disclosure requirements under the provisions of the Norwegian Accounting Act as at 31 December 2022. There have been no changes in accounting principles from 2021 to 2022. The proposed consolidated ﬁnancial state- ments were authorised by the board and CEO on the date stated in the signed statement of ﬁnancial position. The consolidated ﬁnancial statements shall be reviewed by an ordinary general meeting for ﬁnal approval. Depreciation Property, plant and equipment are depreciated on a straight-line basis over their estimated useful life. Depreciation is calculated on the basis of the cost of the asset or other amount substituted for cost, less its residual value. The economic useful life of scaffolding is assessed, and its period of use has been set at 15 years. The period of use is the period in which the group expects to use the scaffolding and may thus be shorter than its economic useful life. The period of use and the residual value are assessed at the end of each reporting period and adjusted if necessary. Scaffolding is depreciated over a period of 15 years. Classiﬁcation and measurement The group classiﬁes its ﬁnancial assets in the categories (1) amortized cost (2) ﬁnancial assets at fair value through other compre- hensive income (3) ﬁnancial assets at fair value through proﬁt or loss. Classiﬁcation is dependent on the objective of the ﬁnancial instrument and the groups business model. Amortized cost Financial instruments that the group holds in order to receive contractual cash ﬂows is recog- nized at fair value and is in subsequent periods measured at amortized cost. This mainly relates Derecognition of ﬁnancial instruments The group derecognizes a ﬁnancial asset when the contractual rights to the cash ﬂows from the asset expire, or when the group transfers the rights to receive the contractual cash ﬂows on the ﬁnancial asset in a transaction in which substantially all the risks and rewards of ownership of the ﬁnancial asset are transferred. beerenberg.com 54 Annual report 2022 Containers and workshops are depreciated over a period of 10 years, while other production equipment and other assets are depreciated over a period of 3-7 years. Intangible assets are amortised on a straight- line basis over their estimated useful life from the time they are available for use, since this most closely reﬂects the consumption of the future economic beneﬁts embodied in the asset. The estimated useful lives for the current period and comparative periods are as follows: • Customer relationships 3-10 years • Technology 5-10 years Amortisation method, useful life and residual value are reviewed annually and adjusted if necessary. Lease agreements IFRS 16 requires all contracts that contain a lease to be recognized on the balance sheet as a right-of-use asset and a corresponding lease liability. The lease liability represents the net present value of the lease payments to be made over the remaining lease period. The right-of-use asset is depreciated over the lease term. For Beerenberg this mainly applies to ofﬁce buildings and other facilities. Short-term and low value lease agreements are exempted from IFRS 16 and accounted for as operating expenses. Provisions Provisions are accounted for when the group has an obligation (legal or self-imposed) result- ing from a previous event if it is likely (more likely than not) that a ﬁnancial settlement will take place as a result of this obligation and the size of the amount can be reliably calculated. If the effect is signiﬁcant, the provision is calculated by discounting expected future cash ﬂows with a discount rate before tax that reﬂects the market’s valuation of the time value of money and, if relevant, risks speciﬁcally linked to this obligation. in accordance with measured progress and equipment rental is recognized as income in the period the equipment is hired out. As a general rule, these contracts are agreed with a ﬁxed price per unit (unit price contracts) or a ﬁxed price per hour, and variations thereof. What constitutes a unit varies from contract to contract, but as an example it may be a square metre of surface treatment. At the end of each billing period, the group reports to the customer the number of hours and/or number of units completed in the period. The former is based on the recorded and approved number of hours, while the latter is based on physical progress. The customer reviews the supporting documentation and issues a payment certiﬁcate to the group. On the basis of the payment certiﬁcate, the group recognizes the revenue for the period as income and bills the customer. By having the customer review the documentation of work completed and issue a payment certiﬁcate, the revenue has the prior approval of the customer. On smaller projects, the work carried out in the period is billed and recognized as income based on work completed or, as a general rule, based on approved timesheets, but without the customer issuing a payment certiﬁcate in advance. Some smaller projects are also billed and recognized as income upon completion of the project. These types of projects will rarely stretch over multiple reporting periods. If the outcome of a contract cannot be measured reliably, the contract revenues are recognized only to the extent that the incurred contract expenses are expected to be met by the customer. An expected loss on a contract is recognized in proﬁt or loss as incurred. scaffolding and other equipment is invoiced and recognized as income in the period it has been let. differences are not taken into account: • Goodwill that is not tax deductible • Initial recognition of assets or liabilities that affects neither accounting nor taxable proﬁt or loss • Differences relating to investments in subsidiaries that are not likely to reverse in the near future Deferred tax is calculated using tax rates and tax legislation that have been enacted, or substantially enacted, at the end of the reporting period. Deferred tax assets are recognized to the extent that it is probable that future taxable income will be generated against which the deductible temporary differences can be realised. Deferred tax assets and deferred tax liabilities are offset if there is a legally enforceable right to offset them. Accrued, not invoiced contract revenues Accrued, not invoiced contract revenues rep- resent the value of completed contract work less payment from the customer. The value of completed contract work is measured at cost plus accrued net proﬁt to date. Payment from customers is offset in the statement of ﬁnancial position against contract work in progress. Received customer advances in excess of value of work performed are classiﬁed as current liabilities. Inventories Inventories are measured at an amount equal to the lower of acquisition cost and net real- isable value. The net realisable value is the estimated selling price in the ordinary course of business less the estimated cost of completion and selling expenses. The acquisition cost of manufactured inventories includes the direct cost of materials, direct labour and a share of indirect production overheads, while the acquisition cost of purchased inventories is the cost price based on the ﬁrst-in-ﬁrst-out principle and includes the cost incurred in acquiring the inventories, production or con- version overheads and other costs incurred in bringing them to their existing location and condition. In accordance with IAS 2.28, the value of inventories is written down to the net realisable value if the inventories have been damaged or have become wholly or partially obsolete or if the selling price has fallen. Warranties A provision for warranties is recognized when the underlying products or services are deliv- ered. The warranty period is normally 2-5 years. At the end of a project, a provision is made to meet any warranty claims and complaints. The provision is based on historical information about warranties weighted by the probability that a warranty expense will be incurred. It is normal for such provisions to be a ﬁxed proportion of the contract value, but a larger or smaller provision may be made depending on the speciﬁc assessment of individual projects. Experience from previous projects provides the best basis for making both general and speciﬁc warranty provisions. Factors that may affect the size of the provision include the group’s quality measures and project implementation model. Government grants The group receives various types of government grants in relation to its research and develop- ment activities. These may be funding through the SkatteFUNN scheme or other grants. Such grants, whereby the group is compensated for expenses incurred, are systematically recognized in proﬁt or loss over the period that the expenses are recognized. Grants that compensate the group for the cost of an asset are recognized in proﬁt or loss over the useful life of the asset. The group also applies for other government support schemes where the group is qualiﬁed. Such grants are recognized as other revenue in the period received Impairment losses of non-ﬁnancial assets When the carrying amount of a non-current asset is higher than the estimated recovera- ble amount, the value is written down to the recoverable amount. The recoverable amount is the greatest of fair value less cost to sell and its value in use. The scope for reversing any previous write-downs (except Goodwill) is assessed on each reporting date. Goodwill and intangible assets with indeﬁnite useful lives are tested for impairment annually. An impairment loss is recognized when the carrying amount of an asset or cash-gener- ating unit exceeds the recoverable amount. Impairment losses are recognized through proﬁt or loss. Impairments estimated for cash-generating units are allocated so that the carrying amount of any Goodwill in the cash-generating units is reduced ﬁrst. Next, the remaining impairment losses on the other assets in the unit are allo- cated pro rata based on the carrying amount. Statement of cash ﬂows The group’s consolidated statement of cash ﬂows shows the group’s total cash ﬂows spread over operating, investing and ﬁnancing activ- ities. The statement shows the effect of each activity on the group’s liquid assets. The cash ﬂow statement is prepared using the indirect method. Cash and cash equivalents include cash, bank deposits and other short- term highly liquid investments with insigniﬁcant risk convertible into known amounts of cash with maturities less than three months from acquisition date. Cash ﬂows from operating activities is based on result before tax, and adjusted for change in working capital and depreciation. Thus, interest paid are presented as part of the operating cashﬂow. Restructuring A provision for restructuring is recognized once the group has approved a detailed and formal restructuring plan and the restructuring has either commenced or been communicated to the affected parties. Finance income and ﬁnance costs Finance income comprises interest income on funds invested during the year. Finance costs comprise interest costs incurred during the year. Foreign currency gains and losses are reported on a net basis. Pension costs and pension obligations Pension costs and pension obligations are treated in accordance with IAS 19R. Pensions are described in Note 17. The net pension costs for the period are classed as salary and personnel costs. The group operates a pension scheme ﬁnanced by contributions paid into a separate legal entity (insurance company) in the form of a deﬁned contribution plan. A deﬁned contribution plan is a pension scheme under which the group pays ﬁxed contributions to the insurance company. The group has no further payment obligations once the contributions have been paid. The contributions are recognized in proﬁt or loss as salary costs as incurred. Prepaid contributions are recognized as assets to the extent that they can be refunded or reduce future contributions. The group is also participant in the AFP scheme which is a pension-scheme that pays a lifelong supplement to ordinary pension beneﬁts. The group has in addition to the ordinary pen- sion scheme also a supplementary pension plan for executive management and key employees. Onerous contracts A provision for onerous contracts is recognized when the group’s expected revenue from a contract is lower than the unavoidable cost of meeting its contractual obligations. The estimated provision is the present value of the lower of the expected cost of terminating the contract and the expected net cost of fulﬁlling the contract. Before a provision is made, all impairment losses on assets associated with the contract are recognized. Revenues from sale of goods Revenue from the sale of goods is recognized when persuasive evidence exists that control of the goods have been transferred to the buyer. For sales of the group’s products, transfer normally occurs once the product is received at the customer’s warehouse or installation. In some contracts, the delivery of materials is incorporated in the ﬁxed hourly price or the ﬁxed unit price. In other cases, the delivery of materials is billed separately. The delivery of materials is recognized as income when the materials have been put into use on a project or transferred to the customer in some other way. Income tax and deferred tax Income tax expenses comprise current and deferred tax. Tax is recognized in proﬁt or loss, except when it relates to items taken to other income and expenses or directly to equity or are linked to business combinations. If this is the case, the tax is also taken to other income and expenses or directly to equity. Tax payable for the period is calculated in accordance with tax laws and rules that have been enacted, or substantially enacted, by the tax authorities at the end of the reporting period. Taxable income is calculated on the basis of the legislation in the countries in which the group’s subsidiaries operate and generate taxable income. Using the liability method, deferred tax is calcu- lated on all temporary differences between the tax value and consolidated accounting value of assets and liabilities. The following temporary Calculating the recoverable amount The recoverable amount of an asset is the greater of the net selling price (less cost to sell) and value in use. The value in use is estimated by discounting expected future cash ﬂows to their present value using a market-based risk-adjusted discount rate. For assets that do not generally generate independent cash ﬂows, the recoverable amount is determined for the smallest cash-generating unit to which the asset belongs. Earnings per share Basic earnings per share and diluted earnings per share are presented for ordinary shares. Basic earnings per share are calculated by dividing the proﬁt or loss for the period attrib- utable to ordinary shareholders of the group by the weighted average number of ordinary shares outstanding during the period, adjusted for own shares held. Diluted earnings per share are determined by adjusting the proﬁt or loss and the weighted average number of ordinary shares outstanding, adjusted for own shares held, for dilutive potential. Revenue recognition Revenues from sale of services Most of the group’s revenue is associated with long-term maintenance contracts. Revenues are recognized in accordance with IFRS 15 Revenue from contracts with customers. The groups primarily customers are within onshore/ offshore oil service. The contracts are invoiced and recognized as income on basis of hours incurred multiplied by a deﬁned hourly rate associated with the services provided, unit price contracts are recognized as income Reversing impairment losses Impairment losses on Goodwill are not reversed. In respect of other assets, impairment losses are reversed if there is any change to the estimates used to calculate the recoverable amount. Revenues from hiring of equipment Normally revenue from hiring of equipment is considered as revenue from sale of service as the letting of scaffolding is part of the same performance obligation. The group also have some letting of scaffolding without connection to revenue from sale of service. Such letting of Determination of fair values The group’s accounting principles and note information require the determination of fair value for both ﬁnancial and non-ﬁnancial assets beerenberg.com 56 Annual report 2022 and liabilities. Fair values are determined for measurement and/or disclosure purposes based on the methods described below. If rele- vant, further information about the assumptions made is disclosed in the notes relating to the respective assets and liabilities. results may deviate from estimated amounts. Estimates and their associated assumptions are based on historical data and other factors that are deemed to be relevant and represent - ative. These calculations form the basis for assessing the amounts recognized in respect of assets and liabilities that cannot be determined on the basis of other sources. Estimates and underlying assumptions are reviewed continually. Changes to accounting estimates are recognized in the period in which they occur if they only apply to that period. If the changes also pertain to future periods, the effect is distributed over the current and future periods. Estimates and judgements are reviewed on an ongoing basis and are based on historical information and other factors, including assumptions and future events that are deemed likely under the current circumstances. circumstances that may have an effect on time use. Revenue recognition of contracts with mobi- lisation and demobilisation costs requires assumptions to be made about the duration of the contract, including potential extension options, in order to allocate expenses and revenues from the mobilisation/demobilisation period over the delivery period. Changes in the delivery period may result in adjustments being made to the accrued amount. ii) Goodwill – In accordance with the accounting principles, the group performs tests annually, or more frequently if necessary, to determine whether Goodwill recognized in the statement of ﬁnancial position should be written down. The estimated recoverable amount is calculated on the basis of the present value of budgeted cash ﬂows for the cash-generating unit. The calcula- tions require the use of estimates and that they are consistent with the market valuation of the group. Speciﬁc information about Goodwill and the testing of carrying amounts is provided in Note 12 Intangible assets. for shareholders, to be of beneﬁt to other interested parties, and to maintain an optimal capital structure in order to reduce the cost of capital. Risk management for the group is undertaken centrally in accordance with guidelines approved by the board of directors. The group identiﬁes, measures, manages and reports ﬁnancial risks in collaboration with the various operating units. Managing the capital structure involves actively monitoring and adjusting the composition in accordance with changes in ﬁnancial and economic circumstances and in the risk linked to underlying assets. In order to maintain the desired capital structure, the group may reﬁnance debts, buy or issue new shares or debt instruments, or it may sell assets. The group continuously monitors counterpar- ties in order to reduce risk relating to ﬁnancing, investing excess liquidity, bank balances from operations and derivatives. The group’s guidelines impose limitations on exposure to individual counterparties and contain procedures for identifying risk factors when they occur. The board produces principles for the risk management policy and issues guidelines for speciﬁc areas such as exchange rate risk, interest rate risk, credit risk, the use of ﬁnancial derivatives and other ﬁnancial instruments and for investing excess liquidity. exchange rates, the effects have now been calculated at +/- 30%. existing contracts, alternative ﬁnancing and hedging. The groups calculation of interest on contracts is entirely linked to liabilities. If effective interest rates had been 1% (per- centage point) higher/lower on loans in NOK in 2022 and all other variables were constant, this would have resulted in a reduction/increase in proﬁt/loss after tax of NOK 5,3 million in 2022 (2021: 5,5 million) Equity would have been similarly affected. This is due to higher/lower interest costs on variable rate loans. The group’s interest-bearing assets comprise as of 31.12 of bank deposits of NOK 113.3 million. Changes in market interest rates would affect operating cash ﬂows related to these interest-bearing assets, but to a relatively modest degree. Market risk The Beerenberg group operates in the oil and gas market, which due to price ﬂuctuations can be volatile. Beerenberg is affected by the oil companies’ actions and the prevailing oil and gas prices. To mitigate this, Beerenberg has diversiﬁed into various segments of the market, e.g. new-build and maintenance and modiﬁ- cation projects. Beerenberg is also expanding internationally, with the proprietary Benarx® product range and it is looking into related market segments, such as infrastructure for both products and services. There is reason to believe that investment growth on the Norwegian Continental Shelf will abate in the long term, which in turn will impact investment. In order to expand its operations and customer base, the group has therefore been working to grow its international presence. Tangible non-current assets The fair value of property, plant and equipment is recognized at fair value if part of a business combination. The fair value of plant, equipment, ﬁxtures and ﬁttings is based on the market approach and cost approaches using quoted market prices for similar items when available and replacement cost when appropriate. Intangible assets The fair value of customer relationships acquired in a business combination is deter- mined using the multi-period excess earnings method. The value is established residually by deducting a fair return on all other assets that together with customer relationships generate the cash ﬂows used in the calculation. The fair value of other intangible assets is based on the discounted expected cash ﬂows derived from the use and subsequent sale of the assets. Financial derivative instruments The group holds a limited number of ﬁnancial derivative instruments to hedge its foreign currency and interest rate risk exposures. The management strategy is, at present, to use hedging instruments in order to mitigate the effect of changes in variable interest rates. The long-term ﬁnancing of the group is based on variable interest rates (3 mnth Nibor) which is subject to ﬂuctuations. The strategy is to minimize this risk by entering into interest swaps agreements to swap variable interest rates to ﬁxed rates at a proportion of around 70 % of total outstanding loans. Derivatives are recognized initially at fair value. Changes in fair value are recognized in proﬁt or loss, except for hedging instruments that meet the criteria for hedge accounting. The group follows IFRS 9 criteria’s for clas- sifying a derivative instrument as a hedging instrument. These are as follows: Estimates/assumptions The group produces estimates and makes judgements/assumptions about the future. The resulting accounting estimates will rarely correspond fully to the ﬁnal outcome. Estimates and assumptions that entail a risk of substantial changes in the carrying amounts of assets and liabilities during the next accounting year are: i) Revenue recognition - As described in the section revenue recognition, often a meas- urement of physical progress in the service delivery is applied, which in some cases lead to use of estimates. The most signiﬁcant source of uncertainty in respect of revenues from contracts with customers relates to the estimation of sup- plementary work, additional requirements and bonus payments that are recognized as income to the extent that the group ﬁnds it highly probable that a signiﬁcant reverse of revenue will not occur. For many projects, there may be substantial changes to the agreed scope of work that may lead to a number of variations in contract work. It is normal for contracts to contain provisions for how such changes should be handled. At any given time there will be unapproved variations in contract work and requirements included in the contract revenues. Although the management has extensive experience in assessing the outcome of such negotiations, there will always be an element of uncertainty. The cost of completion depends on both productivity factors and salary levels. Factors that may substantially affect cost estimates, requirements and variations in contract work include weather conditions, access to work sites, the price of raw materials and other Technology risk The market in which Beerenberg operates will continue to seek improved solutions and products for the future. To maintain its compet- itive edge, the group has adopted a strategy of continued investment in engineering services, digitalization, and R&D along with an ambition to protect its assets through patents and other proprietary rights. New and amended standards adopted by the group The group has applied the following amend- ments for the first time for their annual reporting period commencing 1 January 2022: • Property, Plant and Equipment: Proceeds before Intended Use – Amendments to IAS 16 • Onerous Contracts – Cost of Fulﬁlling a Contract – Amendments to IAS 37 • Annual Improvements to IFRS Standards 2018-2020, and • Reference to the Conceptual Framework – Amendments to IFRS 3. The amendments listed above did not have any impact on the amounts recognised in prior periods and are not expected to signiﬁcantly affect the current or future periods. Inventories The fair value of inventories acquired in a business combination is the estimated selling price in the ordinary course of business less the cost of completion and sale, to include a proﬁt margin based on the effort required to complete and sell the inventories. Cyber Risk The risks posed by cyber criminals continue to be a threat to both the business and operations. This risk is managed by the IT-Department who closely monitors new Cyber threats that continues to emerge and take actions to protect Beerenberg against these threats. Phishing emails are the most typical cyber-at- tacks. However, as more devices are being connected to internet there is increasing risk linked to these devices and the systems they are connected to. Measures is taken to secure email, improve capabilities to identify ongoing malicious activities, and increase employee awareness of cyber threats. Trade receivables and other receivables The fair value of trade and other receivables is estimated as the present value of future cash ﬂows, discounted at the market rate of interest at the end of the reporting period (the reporting date). Exchange rate risk The group predominantly operates in Norway, but some of its activities are international and thus exposed to exchange rate risks in several currencies. Exchange rate risks emerge from current and future assignments and from recognized assets. The group is exposed to exchange rate ﬂuctuations because a limited portion of the group’s revenue and cost is in other currencies. According to group policy, customer- and supplier contracts with exchange rate risk exceeding deﬁned limits shall be hedged. The parent company uses NOK as its functional currency. An assessment is made annually as to what is the actual functional currency of each entity in the group. The group has relatively insigniﬁcant invest - ments in overseas subsidiaries where net assets are exposed to exchange rate risks upon translation. Sensitivity analyzes related to exchange rate ﬂuctuations is described in note 13. Normally these sensitivities are calculated at +/- 10 % change, but due to increased volatility in Accounts payable and other liabilities Trade payables are obligations to pay for goods and services from suppliers to the ordinary operations and are measured at fair value (historical cost) Loans are recognized initially at fair value when the loan is paid, net of transaction costs. In subsequent periods, loans are measured at amortized cost using effective interest rate. Other liabilities are measured at fair value. a. the hedging relationship consists only of eligible hedging instruments and eligible hedged items. b. at the inception of the hedging relationship there is formal designation and documen- tation of the hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge. c. the hedging relationship meets all of the following hedge effectiveness requirements: i. there between the hedged item and the hedging instrument ii. the the value changes that result from that economic relationship and iii. the hedge ratio of the hedging relationship Note 4 Financial risk management Cash ﬂows and fair value interest rate risk Variable rate loans pose an interest rate risk to the group’s cash ﬂows. The group is exposed to interest rate risks relating to debts, including ﬁnancial leasing. Interest bearing debt as at 31.12.22 is a Bond issue and ﬁnancial leasing, refer to note 25. The weighted average effective rate of interest in relation to debt, was 10,4% in 2022 (2021: 9,9%). Interest rate risks are continually reviewed by looking at potential reﬁnancing, renewal of As a global supplier of oil services, the group is exposed to market risks, exchange rate risk and interest rate risk, credit risk, inﬂation risk and liquidity risk. The group has established procedures and guidelines for setting appropriate risk levels for its main risks and for monitoring its risk exposure. The group’s objectives for capital management are to sustain the group’s position as a going concern in order to generate a return Estimates and judgements Preparing the ﬁnancial accounts in accordance with IFRS requires the management to make assessments, estimates and assumptions that affect the application of the accounting principles. The carrying amounts of assets and liabilities, as well as revenues and costs, are affected by these assessments. Actual is an economic relationship effect of credit risk does not dominate beerenberg.com 58 Annual report 2022 is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. Hedging instruments classed as cash ﬂow hedges offset variations in cash ﬂows caused by changes in exchange rates, interest rates and market values. For cash ﬂow hedges that meet the criteria for hedge accounting, all gains and losses on the effective part of the contract are recognized in comprehensive income and as hedging reserve in the statement of equity, while those on the ineffective part are recog- nized in the income statement under ﬁnance. Derivative ﬁnancial instruments with positive fair value are classiﬁed as current assets if the remaining maturity of the hedged item is less than a year into the future, and as ﬁxed assets when the remaining maturity of the hedged item is more than a year ahead. Financial derivatives with negative fair value are classiﬁed as a current liability if the remaining maturity of the hedged item is less than a year into the future, and as a long-term liability when the remaining maturity is more than a year ahead. Refer to note 24 for a speciﬁcation of the group’s current derivative instruments The group handles its exposure to credit risk by carrying out continual credit checks of customers and make provisions for losses on doubtful accounts. Routines are incorporated to ensure that sales are only made to customers with satisfactory credit worthiness. If an independent credit rating of a customer is available, it will be used when determining a credit limit. If no independent assessment of the customer’s credit worthiness is available, an assessment is carried out on the basis of the customer’s ﬁnancial position, history and other factors as appropriate. Individual limits for risk exposure are set on the basis of internal and external assessments of credit worthiness and of guide- lines provided by the board of directors. The major customers are predominantly large inter- national oil companies or government-owned oil companies. Such companies generally have very good credit ratings. The group have not provided any warranties that pose a signiﬁcant risk. The group continuously seeks new opportu- nities for example in new build projects and increased presence in projects abroad. To enter new market segments, could imply changes to credit risk. This is a factor that the group has high focus on evaluating when considering such opportunities. the group’s liquidity requirements are monitored centrally to ensure that the group has sufﬁcient cash equivalents to meet operating-related liabilities at all times. Such forecasts take into account the group’s planned loans, compliance with borrowing terms and compliance with internal targets for reporting ﬁgures. On the reporting date, the group had bank deposits of NOK 113.3 million plus an unused overdraft of NOK 121 million, designed to meet the liquidity risk. Note 13 shows the group’s interest-bearing financial liabilities classed according to maturity structure. Classiﬁcation is carried out according to the due date stated in the contract. The amounts in the table are undis- counted contractual cash ﬂows. Interest-bearing long-term debt consists of a Bond with the principal amount of NOK 650 million. This Bond matures in November 2023. Risk relating to capital management The group’s objectives for capital management are to sustain the group’s position as a going concern in order to generate a return for its owners and to maintain an optimal capital structure in order to reduce the cost of capital. In order to improve its capital structure, the group can adjust the level of dividends paid to shareholders, issue new shares, or sell assets to repay loans. The gearing in the group for 31.12.22 and for 31.12.21 is shown in table below. Note 5 Segment Operating segments are reported consistent with internal reporting provided to Chief Operating decision maker. Chief Operating decision maker, who is responsible for allocating resources and assessing performance of the operating segments, is deﬁned as the there are two reporting segments in the group, “Services” and “Benarx”. Services includes business related to the traditional ISS activity of the company which is mainly related to major framework contracts. Benarx includes business involving production of insulation materials and related subsea insulation business. Board of Directors. As at 31.12 Services Benarx Eliminations Consolidated (Amounts in NOK 1 000) 2022 2021 2022 2021 2022 2021 2022 2021 Operating revenue external 2 058 369 1 898 140 163 510 237 879 2 221 878 2 136 019 Operating revenue internal 5 376 4 822 55 766 70 328 -61 142 -75 151 0 0 Total Operating revenue 2 063 745 1 902 962 219 276 308 208 -61 142 -75 151 2 221 878 2 136 019 Direct cost 1 752 299 1 591 004 155 423 234 340 -55 766 -70 328 1 851 956 1 755 016 Gross proﬁt 311 445 311 958 63 853 73 868 -5 376 -4 822 369 922 381 003 Admin & overhead 152 401 136 422 42 891 32 953 -5 376 -4 822 189 916 164 552 EBITDA * 159 044 175 537 20 962 40 915 0 0 180 006 216 451 Depreciation, and impairment 44 936 39 858 11 744 9 232 56 680 49 090 losses of tangible assets EBITA ** 114 108 135 679 9 218 31 683 0 0 123 326 167 362 Amortisation and impairment 24 416 14 155 808 149 25 225 14 303 losses of intangible assets EBIT *** 89 692 121 524 8 410 31 534 0 0 98 103 153 058 * Operating result before depreciation, amortisation and impairment losses ** Operating result before amortisation and impairment losses of intangible assets *** Operating result Credit risk Credit risks are assessed at group level. The group’s ﬁnancial assets that are exposed to credit risks are predominantly trade receivables related to work performed not yet invoiced. These receivables mostly concern multinational oil companies and independent oil and gas companies, including companies that are wholly or partially owned by foreign governments. Liquidity risk The group is exposed to liquidity risks relating to the repayment of debts and payments to suppliers. Cash ﬂow forecasts are created for each operating unit within the group and aggregated at group level. Rolling forecasts for 2022 2021 Total interest bearing debt 706 063 744 034 Less cash and cash equivalents -113 289 -193 345 Net interest bearing debt 592 774 550 689 Total Equity 568 792 546 428 Total Capital (adjusted) 1 161 566 1 097 117 Debt Ratio 51% 50% Gearing 1.0 1.0 beerenberg.com 60 Annual report 2022 Assets Services Benarx Not Allocated Eliminations Consolidated (Amounts in NOK 1 000) 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Intangible assets 51 425 15 452 654 3 793 52 079 19 246 Goodwill 582 762 582 762 200 000 200 000 782 762 782 762 Property, plants and equipment 185 797 177 887 24 243 30 453 210 039 208 340 Financial ﬁxed assets 14 276 20 221 14 276 20 221 Deferred tax assets 19 3010 19 3 010 Total Noncurrent assets 834 260 796 322 224 897 234 247 19 3 010 0 0 1 059 176 1 033 579 Inventory 52 607 45 067 41 282 32 723 93 889 77 790 Accounts receivable from 242 932 284 949 36 391 61 039 -17 643 -39 600 261 680 306 387 customers Other receivables 38 852 21 061 3 086 2 639 41 939 23 701 Earned, not invoiced 209 228 184 271 6 626 10 950 215 855 195 220 contract revenues Cash at bank, cash in hand 113 289 193 345 113 289 193 345 and similar Total current assets 543 620 535 348 87 385 107 351 113 289 193 345 -17 643 -39 600 726 651 796 443 Total Assets 1 377 879 1 331 670 312 282 341 597 113 308 196 355 -17 643 -39 600 1 785 827 1 830 022 Note 6 Revenue Beerenberg’s main contracts with customers are servicing and maintenance contracts. Main deliveries in these contracts involves enhancing assets that the customer controls while the asset is enhanced. This means that Beerenberg’s customer contracts involving sales of services are recognized over time when services are delivered. Revenue from Beerenberg’s contracts with customers involving sale of goods are recognized at a point in time which the company transfers control of the goods to the customer. The company’s revenue also arises from hiring out different types of equipment, mainly scaffolding. Contracts involving letting of equipment are normally integrated in contracts for perforing services. Revenues from letting of equipment are recognized over time as the customer has control of the equipment which is hired. Other revenue in 2021 is mainly related to gains from sale of assets and government business compensation scheme related to Covid-19 in Poland and in Norway. In 2022 other revenue comprises of gains from sales of assets as well as some revenue related to grants from the norwegian research council. (Amounts in NOK 1 000) 2 022 2 021 Revenues from contracts with customers Revenues from sale of services 1 733 373 1 733 713 Revenues from sale of goods 295 248 242 022 Revenues from hiring of equipment 192 921 152 566 Total revenue from contracts with customers 2 221 541 2 128 301 Other revenue Gains from sale of assets 141 2 935 Government business compensation scheme 0 4 783 Other revenue 196 0 Total other revenue 337 7 718 Total revenue 2 221 878 2 136 019 Geographic Revenue is also measured according to whether it is earned in Norway/on the Norwegian Continental Shelf (Domestic) or abroad (International). Domestic International Consolidated 2022 2021 2022 2021 2022 2021 Total Operating revenue 2 135 564 1 984 157 86 314 151 862 2 221 878 2 136 019 Reconciliation of EBITDA to proﬁt/loss before tax: 2022 2021 EBITDA 180 006 216 451 Depreciation, amortisation and impairment losses 81 904 63 382 Net ﬁnance costs 78 705 82 215 Result before tax 19 398 70 854 Revenue from customers who make up more than 10% of total revenue Revenue from 2 customers make up more than 10 % of total revenue in 2022 or 2021. Revenues from customer 1 amounted to 1.420.840 which was 64 % of total revenue (2021: 1.089.615, 51% of total revenue). Revenues from customer 2 amounted to 155.034 which was 7% of total revenue (2021: 313.468, 15 % of total revenue). Accounts receivables 2 022 2 021 Trade receivables at face value 264 918 309 840 Provision for losses on claims (3 238) (3 452) Total trade receivables 261 679 306 388 Total accounts receivables Accounts receivables from customers 264 918 309 840 Earned, not invoiced accounts receivables 215 854 195 220 Total accounts receivables 480 772 505 060 Earned, not invoiced accounts receivables relates to consideration for work performed, but not yet invoiced at the reporting date. This mainly pertains to work performed in December 2022, invoiced in January 2023. Earned, not invoiced accounts receivables is transferred to accounts receivables when the company has issued invoice to the customer. beerenberg.com 62 Annual report 2022 Note 7 Other operating costs Note 8 Personnel costs Beerenberg’s other operating costs totals 346 881. (322 904 for 2021) 70-80 % of these costs are project costs. Other costs are costs relating to consulancy fees, premises and associated costs, IT, insurance premiums, contingents, marketing and patent costs. (Amounts in NOK 1 000) 2 022 2 021 Travel expenses 124 410 114 025 Rental of equipment 62 296 40 668 Other project costs 86 874 96 105 Consultancy fees 24 896 20 283 Facilities 17 284 19 990 IT 17 812 21 050 Other 13 310 10 783 Total other operating costs 346 881 322 904 (Amounts in NOK 1 000) 2 022 2 021 Salaries incl. holiday pay 866 882 753 676 National Insurance contributions 129 472 112 556 Pensions 32 798 27 280 Contract personnel 453 629 518 866 Other employee beneﬁts 15 486 18 427 Total Personnel costs 1 498 268 1 430 805 Number of Full-time equivalent at the end of the year (FTE) 1 913 2 221 * Both salaries and FTEs includes hired in personell. Auditor’s fee 2 022 2 021 Statutory audit 1 449 1 365 Other assurance services 72 52 Tax advisory fee (incl. technical assistance with tax return) 161 226 Other assistance 347 34 Total 2 029 1 678 The sums stated are exclusive of VAT. beerenberg.com 64 Annual report 2022 Note 9 Finance income and ﬁnance costs Note 10 Ta x (Amounts in NOK 1 000) 2 022 2 021 Gains from purchase and sales of own bonds 0 1 571 Interest income from bank and other sources 1 568 582 Net foreign exchange gains, realised -97 0 Net foreign exchange gains, unrealised 5 217 0 Finance income 6 688 2 153 Interest cost bank 1 922 837 Interest cost bond 73 508 68 020 Interest cost interest swap -3 111 1 422 Amortization of reﬁnancing fee 9 134 9 113 Interest cost leasing 2 628 2 857 Interests from vendors and other interest costs 1 313 1 492 Net foreign exchange losses, realised 0 1 130 Net foreign exchange losses, unrealised 0 -503 Finance costs 85 393 84 368 Net ﬁnance costs recognised in income statement -78 705 -82 215 (Amounts in NOK 1 000) 2022 2021 Tax payable has been calculated as follows Ordinary result before tax 19 398 70 854 Proﬁt/loss in foreign subsidiaries, not included in basis for tax payable -6 460 -9 802 Permanent differences 1 849 -225 Change in differences included in the basis for deferred tax assets/liabilitites 27 778 23 354 Basis for tax payable 42 565 84 181 Tax payable on the result for the year 9 364 18 520 Tax cost is calculated as follows: Tax payable on the result of the year 9 364 18 520 Corrections to previous years -11 239 970 Gross changes deferred tax 1 856 -5 069 Total tax cost for the year -19 14 421 Tax payable on the balance sheet has been calculated as follows Tax payable on the result of the year 9 364 18 520 Total tax payable 9 364 18 520 beerenberg.com 66 Annual report 2022 Note 11 Property, plant and equipment (Amounts in NOK 1 000) 2022 2021 Speciﬁcation of deferred tax/deferred tax concessions changes over proﬁt and loss Additions through business combinations 9 713 2 676 Fixed assets 6 528 7 566 Current assets 895 2 837 Liabilities -13 673 -11 179 Precluded interest deduction to be carried forward -4 860 -4 860 Other deferred tax -1 230 -1 524 Net temporary differences -2 627 -4 484 Tax losses carried forward 0 0 Deferred tax before OCI -2 627 -4 484 Speciﬁcation of deferred tax/deferred tax over OCI 2022 2021 Derivatives 2 609 1 473 Deferred tax OCI 2 609 1 473 Deferred tax assets (-) obligations (+) -19 -3 010 Explanation as to why the tax for the year does not amount to 22 % of the result before tax 22% of the result before tax 4 268 15 588 Permanent differences (22%) 407 -50 Adjustments/corrections -3 272 970 Proﬁt/loss in foreign subsidiaries, not included in basis for tax payable -1 421 -2 088 Calculated tax -19 14 421 Buildings, Production Telecoms barracks Right of Total (Amounts in NOK 1 000) Vehicles equipment & IT and halls use assets 31.12.2022 Acquisition cost 01.01 37 286 524 610 19 207 58 217 84 262 723 583 Acquisitions of non-current assets 1 007 29 106 861 1 205 6 240 38 418 Acquisitionsthrough business combinations 0 19 229 9 74 0 19 312 Disposals 0 -523 0 0 0 -523 Exchange rate effects 0 800 0 38 334 1 172 Acquisition cost 31.12 38 293 573 223 20 077 59 533 90 836 781 962 Accumulated depreciation 01.01 29 738 368 501 16 406 52 654 47 944 466 164 Depreciation for the year 3 294 34 166 1 158 2 545 14 482 55 645 Write-downs for the year 16 1 018 0 0 0 1 034 Disposals – accumulated depreciation - Accumulated depreciation 31.12 33 049 403 685 17 564 55 199 62 426 571 923 Capitalized value 31.12 5 245 169 538 2 513 4 334 28 410 210 040 Economic useful life 5-7 years 5-10-15 years 3 years 10 years 2 - 10 years Depreciation schedule Straight-line Straight-line Straight-line Straight-line Straight-line The category Production equipment contains some assets that are leased. The book value of leased material as of 31.12.2022 is 1 875 and relates to a truck in the subsidiary Beerenberg Industri AS. For reference the book value of leased material as of 31.12.2021 was 10 785. Following implementation of IFRS 16 from January 1st 2019 long term rental agreements of property is booked as Right of use assets. The book value of such right of use assets is as of 31.12.2022, 28 410 (2021: 36 317) and represents the value of rental agreements for ofﬁce buildings, factories or similar premises. The value of right of use is calculated by the sum off all future rent obligations discounted to the implementation date by applying a discount rate of 5 %. The right of use assets are depreciated by straight line over the period for the rent. Refer to note 9 for interest cost of leasing, and note 13 for maturity overview of leasing. In addition to leasing agreements that are booked as right of use asset, the group also rents equipment, and some times also premises, on short term contracts or of low value. Cost related to such rental agreements are booked as other operating costs, refer to note 7. beerenberg.com 68 Annual report 2022 Note 12 Intangible assets and Goodwill Buildings, Production Telecoms barracks Right of Total (Amounts in NOK 1 000) Vehicles equipment & IT and halls use assets 31.12.2021 Acquisition cost 01.01 33 253 489 744 16 476 57 916 82 338 679 728 Acquisitions of non-current assets 4 033 35 497 2 743 347 2 056 44 677 Disposals 0 -251 0 -251 Exchange rate effects -380 -12 -47 -132 -571 Acquisition cost 31.12 37 286 524 610 19 207 58 217 84 262 723 583 Accumulated depreciation 01.01 26 116 339 920 16 140 48 999 34 989 466 164 Depreciation for the year 3 617 27 639 265 3 655 12 955 48 132 Write-downs for the year 5 941 947 Disposals – accumulated depreciation - Accumulated depreciation 31.12 29 738 368 501 16 406 52 654 47 944 515 243 Capitalized value 31.12 7 548 156 110 2 802 5 563 36 318 208 340 Economic useful life 5-7 years 5-10-15 years 3 years 10 years 2 - 10 years Depreciation schedule Straight-line Straight-line Straight-line Straight-line Straight-line Patents and development Customer Total (Amounts in NOK 1 000) projects Software relationships Goodwill 31.12.2022 Acquisition cost 01.01 94 016 30 780 267 324 887 872 1 279 991 Acquisitions in-house R&D 5 038 5 038 Acquisitions through business combinations 53 013 53 013 Exchange rate effects 6 6 Acquisition cost 31.12 152 067 30 786 267 324 887 872 1 338 049 Accumulated amortisation 01.01 83 943 30 249 209 975 - 324 167 Accumulated write-downs 01.01 3 520 - 45 187 105 110 153 817 Amortisation for the year 14 415 385 10 425 25 225 Accumulated amortisation 31.12 98 358 30 634 220 399 - 349 391 Accumulated write-downs 31.12 3 520 - 45 187 105 110 153 817 Capitalized value 31.12 50 189 152 1 737 782 762 834 841 Economic useful life 5 years 5 years 10 years Depreciation schedule Straight-line Straight-line Straight-line At the start of 2022 the Beerenberg AS Group had recorded Goodwill to the amount of 782 762. This goodwill is primarily allocated to the employees, corporate culture, know-how and synergies that can be realised in connection with the acquisition of subsidiaries. Stable operative management is achieved through the active ownership of key personnel in acquired companies. In 2013 Beerenberg Holding AS was aquired by Beerenberg AS, generating a Goodwill of 883 860. Following a non renewal of a large contract and subsequent impairment testing, this Goodwill was written down by the amount of 105 110 in 2016. In 2017 Beerenberg Industri AS was acquired by Beerenberg Services AS generating a Goodwill of 7 489. The Goodwill generated from the purchase of Beerenberg Industri was in 2018 adjusted downwards by the amount of 3 477 following an update of the Purchase Price Allocation analyzis. There were no changes to Goodwill in 2022, leaving the Goodwill as at 31.12.2022 to 782 762. In 2022 the Group acquired the company Remotion generating excess value of MNOK 53 013 related to the technology behind the Robotic development project in the company. Refer to note 27 for further information about the acquistion of Remotion. Intangible assets are measured on the basis that the asset will give future economic beneﬁts, that the acquisition cost is identiﬁable, and that it has a lasting useful life. A test for impairment has been performed in accordance with IAS 36. According to IAS 36 the company shall estimate recoverable amount, and compare this to book values including Goodwill. The group reports two operating segments which operates as separate cashgenerating units, the “Benarx” segment and the “Services” segment. The “Benarx” segment consists of business related to the production of insulation materials and subsea related insulation business, and the “Services” segment consists of the traditional ISS activity of the company mainly related to larger framework contracts. Goodwill is allocated with 200 000 to the Benarx segment, and 582 762 to the Services segment. Goodwill was therefore tested for impairment by comparing capital employed in the two segments against the present value of expected cash ﬂows of the segments. Budget and forecasts approved by the Board of Directors for the next 3 years was the basis for the test of impairment. During this period, the EBIT margin is estimated to 7-10 %. Key assumptions for estimated future cash ﬂows are: - Oil-price levels around average for the last two to three years, with a corresponding activity level on the Norwegian Continental Shelf. Especially, this is important related to maintenance and modiﬁcation in the Services segment. - The group maintaining a reasonable market share in the insulation material business, through amongst other deliveries to new build projects, initiated on Norwegian Continental Shelf. beerenberg.com 70 Annual report 2022 Note 13 Financial instruments Furthermore, a required rate of return of 9.8 % is applied. The required rate of return is built up using the WACC method (weighted average cost of capital). The result of the impairmenttest was higher value of present value of expected cash ﬂows than net capital employed in both segments. Sensitivity analyses have been performed, and the table below set out changes in assumptions that results in an impairment situation: Exposure to credit risk Maximum exposure to credit risks on the reporting date was: Capitalized value (Amounts in NOK 1 000) 2022 2 021 Trade receivables 261 679 306 387 Other receivables 41 939 23 701 Earned, not invoiced 215 854 195 220 Cash and cash equivalents 113 289 193 345 Total 632 761 718 653 Segment BENARX SERVICES Change in assumption Required rate of return* +8,6% +8,7% Revenue ** -41% -44% Operating Result -47% -53% * The group has applied a nominal WACC after tax of 9,8%. The ﬁgure shows that if WACC was set to 18,4% for Benarx and 18,5% for Services it will result in an impairment situation. ** Margins as before change of assumption. Impairment losses The age distribution of trade receivables as at 31.12 was as follows: 2022 2021 Gross Trade Allowance Gross Trade Allowance (Amounts in NOK 1 000) receivables for bad debt receivables for bad debt Not overdue 170 351 1 697 237 546 2 366 0–30 days overdue 13 186 659 61 222 326 31–90 days overdue 10 517 526 6 504 325 More than 90 days overdue 70 863 356 4 567 434 Total 264 918 3 238 309 840 3 452 The group believes that no reasonable changes in the assumptions that have been used for testing impairment, could result in a lower value of future cash ﬂows than the net capital employed. Furthermore, the group has a good order portfolio that will help the group develop vertically and horizontally throughout the value chain. By exploiting existing synergies, the group will be able to make use of the market opportunities they offer through improved access to expert personnel. On that basis, and on the basis of estimated future revenues and described sensitivities, the group can justify that Goodwill will have a value in excess of the book value in both segments. Patents and Customer Total (Amounts in NOK 1 000) development projects Software relationships Goodwill 31.12.2021 Acquisition cost 01.01 91 967 30 337 267 324 887 872 1 277 499 Acquisitions in-house R&D 2 049 449 2 497 Acquisitions of non-current assets - Exchange rate effects -5 -5 Acquisition cost 31.12 94 016 30 780 267 324 887 872 1 279 991 Accumulated amortisation 01.01 80 972 29 916 198 975 - 309 863 Accumulated write-downs 01.01 3 520 - 45 187 105 110 153 817 Amortisation for the year 2 971 333 11 000 14 303 Accumulated amortisation 31.12 83 943 30 249 209 975 - 324 167 Accumulated write-downs 31.12 3 520 - 45 187 105 110 153 817 Capitalized value 31.12 6 553 531 12 162 782 762 802 008 Economic useful life 5 years 5 years 10 years Depreciation schedule Straight-line Straight-line Straight-line Change in provision account for impairment of trade receivables: (Amounts in NOK 1 000) 2022 2 021 Opening balance 3 452 4 510 Loss on trade receivables -192 -185 Change in provision for bad debt -22 -873 Closing balance 3 238 3 452 The group utilizes a model for considering potential loss of accounts receivables where a proportion of total outstanding amounts is treated as uncertain even if no objective evidence of uncertainty exists. This proportion increases with days the receivables are overdue. On top of the mathematical approach for considering provision for potential loss, items in the accounts receivables where objective evidence of increased risk of potential loss exists is also considered when setting the total provision for bad debt. beerenberg.com 72 Annual report 2022 Liquidity risk Contractual payments due in relation to ﬁnancial commitments, including rent payments, are: Capitalized Contractua 6 months 6–12 More than As at 31.12.22 value cash ﬂows or earlier months 1–2 years 2–5 years 5 years Interest bearing long term lease liabilities * 18 642 18 642 0 0 10 014 8 627 Interest-bearing long-term liabilities ** 7 454 7 454 1 170 1 170 2 340 2 774 Interest bearing short-term liabilities ** 679 968 759 784 93 033 666 751 Trade payables 133 876 133 876 133 876 Other current liabilities 242 688 242 688 242 688 Total 1 082 626 1 162 443 470 767 667 921 12 354 11 401 0 * Lease liabilities includes rental of premises of 31 901 according to IFRS 16. These liabilities are discounted by applying a rate of 5 %. Lease liabilities that matures next year are classiﬁed as short term liabilities. ** Interest-bearing debt consists of a bond with the principal amount 650 000. Capitalized value includes deduction for transaction costs that are expensed as interest during the course of the loan (8 379). Interest rate on the loan is 3 month NIBOR plus margin of 8.0%. The bond has every 6-month amortization of 25 000 until maturity. The loan matures in full 13. November 2023, the Bond is therefore fully classiﬁed as a current liability. It is not expected that the cash ﬂows in the maturity analysis will occur at earlier dates, or with substantially different amounts. Exchange rate risk All amounts are in the currency stated in table 31.12.2022 (All amounts are in the currency stated in table) THB EUR USD PLN SGD KRW GBP Cash and cash equivalents 9 771 232 2 331 3 104 110 1 843 783 32 Trade receivables - 95 1 064 292 62 2 390 21 Trade payables -1 234 -149 464 -1 531 6 959 -3 Net exposure 8 537 178 3 859 1 865 179 1 847 132 49 31.12.2021 (All amounts are in the currency stated in table) THB EUR USD PLN SGD KRW GBP Cash and cash equivalents 21 693 367 1 656 1 658 113 2 723 250 448 Trade receivables 4 546 173 1 438 576 770 856 762 293 Trade payables -2 973 -194 -81 -1 688 52 -8 526 1 Net exposure 23 266 346 3 013 545 934 3 571 486 743 Signiﬁcant exchange rates during the year: Average exchange rate Spot exchange rate 2022 2021 2022 2021 THB 0,274 0,269 0,285 0,264 EUR 10,107 10,163 10,513 9,981 USD 9,631 8,598 9,867 8,811 PLN 2,157 2,226 2,242 2,170 SGD 6,977 6,396 7,353 6,512 KRW 0,007 0,008 0,008 0,007 GBP 11,846 11,825 11,871 11,866 A decrease in NOK against the following currencies at the end of the year would have increased/(reduced) equity and proﬁt by the amounts given below. The analysis is based on changes in the exchange rate within a reasonably possible range. The possible range is deﬁned by the management at the end of the accounting year. The analysis assumes that other variables, particularly interest rates, remain constant. The analysis was carried out on the same basis as in 2021. Capitalized Contractua 6 months 6–12 More than As at 31.12.21 value cash ﬂows or earlier months 1–2 years 2–5 years 5 years Interest bearing long term lease liabilities * 29 586 29 586 0 0 13 624 13 793 2 168 Interest-bearing long-term liabilities ** 635 586 789 675 30 766 28 689 53 658 676 563 Interest bearing short-term liabilities ** 78 861 78 861 47 163 31 699 Trade payables 188 014 188 014 188 014 Other current liabilities 203 210 203 210 203 210 Total 1 135 257 1 289 346 469 153 60 387 67 282 690 356 2 168 * Lease liabilities includes rental of premises of 40 503 according to IFRS 16. These liabilities are discounted by applying a rate of 5 %. Lease liabilities that matures next year are classiﬁed as short term liabilities. ** Interest-bearing debt consists of a bond with the principal amount 700 000. Capitalized value includes deduction for transaction costs that are expensed as interest during the course of the loan (17 513). Interest rate on the loan is 3 month NIBOR plus margin of 8.0%. The bond has every 6-month amortization of 25 000 until maturity, in total 125 000. The loan matures 13. November 2023. It is not expected that the cash ﬂows in the maturity analysis will occur at earlier dates, or with substantially different amounts. Next year installments of 50 000 are classiﬁed as interest bearing short - term liabilities. Effect for 2022 Effect for 2021 Currency Change Proﬁt/loss Proﬁt/loss THB 30 % 548 1 463 EUR 30 % 422 824 USD 30 % 8 697 6 062 PLN 30 % 941 284 SGD 30 % 292 1 398 KRW 30 % 3 215 6 274 GBP 30 % 137 2 055 14 253 18 359 An increase in NOK against the above-mentioned currencies as at 31 December would have given the same ﬁgures, but with the opposite effect, once again assuming that other variables remain constant. Of the cash in foreign currency the majority of USD is placed in KEB Hana Bank in Korea and OCBC bank in Singapore, KRW is placed in KEB Hana Bank in Korea, PLN is placed in Danske Bank in Poland, SGD is placed in OCBC bank in Singapore and THB is placed in Kasikorn bank in Thailand. beerenberg.com 74 Annual report 2022 Fair value and capitalized value The fair value and capitalized value of ﬁnancial assets and liabilities: 2022 2021 Capitalized Fair Capitalized Fair (Amounts in NOK 1 000) value value value value Assets carried at amortised cost Trade receivables 261 679 261 679 306 387 306 387 Cash and cash equivalents 113 289 113 289 193 345 193 345 Total 374 968 374 968 499 732 499 732 Liabilities carried at amortised cost Loan 650 254 679 758 685 586 725 849 Leasing and accrued interests 55 808 55 808 58 448 58 448 Trade payables 133 876 133 876 188 014 188 014 Total 839 939 869 443 932 048 972 311 The methods used to measure the fair value of ﬁnancial instruments are described in the note on the group's accounting principles. Note 14 Inventory Exposure to credit risk Maximum exposure to credit risks on the reporting date was: Capitalized value (Amounts in NOK 1 000) 2022 2 021 Raw materials 54 156 49 266 Work in progress 879 1 150 Finished goods 40 325 29 590 Provision for obselete inventory -1 471 -2 216 Total Inventory 93 889 77 790 Note 15 Bank deposits and cash equivalents (Amounts in NOK 1 000) 2022 2 021 Bank deposits 113 289 193 345 Total deposits 113 289 193 345 Overdraft limit The group has a combined overdraft and guarantee limit of 150 000. Deductions on overdraft as at 31.12.2022 amounted to 0 for the group as a total. Utilization of the guarantee limit amounted to 28 708, refer to note 19 for details of guarantees. Net debt reconciliation This section sets out an analysis of net debt and the movements in net debt for each of the periods presented. Liabilities from ﬁnancing activities (Amounts in NOK 1 000) Borrowings Leases Total Net debt as at 31 December 2020 684 565 54 576 739 140 Cash ﬂow changes Proceeds from borrowings 50 000 0 50 000 Repayment of borrowings -50 822 0 -50 822 Payment of lease obligations 0 -15 866 -15 866 Non cash changes 17 070 0 17 070 Leasing related adjustments 0 4 511 4 511 Net debt as at 31 December 2021 700 813 43 221 744 034 Cash ﬂow changes Proceeds from borrowings 0 0 0 Repayment of borrowings -53 561 0 -53 561 Payment of lease obligations 0 -15 690 -15 690 Non cash changes 25 040 0 25 040 Leasing related adjustments 0 6 240 6 240 Net debt as at 31 December 2022 672 292 33 770 706 063 Note 16 Share capital and shareholder information Share capital and shareholder information: The Company’s share capital is 26 700 distributed on 267.000.000 shares, whereof 1.000.000 A-shares, and 266.000.000 B-shares. Nominal value per share is 0,0001. The A-shares have all rights. The B-shares have voting rights by 1 vote per 10 share and no rights to dividends. In the event of a liquidation of the company, the owner of B share shall be entitled to repayment of paid-in capital at the time when the share was subscribed (nominal and any share premium), but no excess amount. The B shareholders right at thispoint has a preferential right over the A shareholders right to liquidation dividends. Otherwise, the share classes are equal. List of the major shareholders at 31.12.22: Shareholder A-Shares % B-Shares % Total Shares % Controlled by Segulah IV L.P. 820 875 82.1% 223 247 653 83.9% 224 068 528 83.9% AlpInvest Partners 2012 I B.V. 92 121 9.2% 24 931 110 9.4% 25 023 231 9.4% AlpInvest Partners 2012 II B.V. 23 319 2.3% 6 310 883 2.4% 6 334 202 2.4% GRAA AS 11 792 1.2% - 0.0% 11 792 0.0% Board Leader Mowin AS 5 325 0.5% 1 267 350 0.5% 1 272 675 0.5% Board member Other 46 568 4.7% 10 243 004 3.9% 10 289 572 3.9% Total 1 000 000 100.0% 266 000 000 100.0% 267 000 000 100.0% Basic earnings per A-share is 0,019 for 2022 compared to 0,056 for 2021. Basic earnings per share are based on the proﬁt/loss attributable to A-shares and on the weighted average number of ordinary shares outstanding. Diluted earnings per share are identical as there is no dilutive effect. beerenberg.com 76 Annual report 2022 Note 17 Employee beneﬁts – pensions Note 18 Remuneration of key employees Mandatory occupational pension The company is obliged to operate an occupational pension scheme in accordance with the Norwegian act on mandatory occupational pensions. The company’s pension schemes satisfy the provisions of this act. Extended pension scheme CEO and other deﬁned other key personell have an additional pension scheme agreement which amounts. Directors’ fees (Amounts in NOK 1 000) 2 022 Chairman Geir Aarstad 400 Hilde Drønen 205 Morten Walde 195 Sebastian Ehrnrooth 175 Total for board members elected by shareholders 975 Finn Kydland 60 Andre Simonsen 60 Tore Kjell Jørgensen (deputy member) 5 Christian Jørgensen (deputy member) 9 Ann Kristin Midttun (deputy member) Rune Kårbø (observer) 9 Ståle Andreas Hovdekleiv (observer) - Total for board members elected by employees * 143 * This applies to directors’ fees for board positions in subsubsidiary Beerenberg Services AS. Pension assets has the following composition (Amounts in NOK 1 000) 2022 2 021 Assets related to extended pension scheme 14 276 13 524 Total pension assets 14 276 13 524 Pension obligations has the following composition (Amounts in NOK 1 000) 2022 2 021 Liabilities related to extended pension scheme 16 585 15 375 Mandatory occupational pension liabilities 2 746 1 947 Total pension obligations 19 331 17 322 Pension cost in consolidated income statement has the following composition (Amounts in NOK 1 000) 2022 2 021 Pension cost extended pension scheme 2 535 1 969 Pension cost mandatory occupational pension 15 611 12 364 Pension cost AFP scheme 14 653 12 947 Total pension cost in consolidated pension cost 32 798 27 280 Group executive management Position Salary Other Compensations Arild Apelthun CEO 3 131 641 Harald Haldorsen CFO 2 207 343 Pensions are not included in the table above. Group executive management and CEO have an additional pension scheme agreement which amounts to 10% of salary for CEO, and 6% of salary for group executive management. The CEO has an agreement that guarantees salary payments for up to 18 months if the employer were to terminate his employment. A non-compete clause also apply to the CEO in the same period. The CEO has a performance-based bonus agreement, identical for all employees in the group executive management. Bonus may not exceed 40% of the annual salary for CEO and 30% for group executive management. No other bonuses, severance or options than described here are given to the board of directors or management. In addition to ordinary salaries, key employees beneﬁt from free telephones, broadband and mandatory contribution-based pensions. Everyone is paid a ﬁxed salary, and no overtime payments are made. The key principles for setting management salaries at Beerenberg are that the company should be able to offer competitive terms. This relates to the combination of salaries, beneﬁts in kind and pension schemes. The company operates in an international environment, a fact that is emphasised and reﬂected when setting the level of remuneration. When setting remuneration for 2023, the company will apply the same policy as in 2022. This entails being a competitive employer who attracts necessary expertise and capacity. The company also wishes to retain expertise and encourage long-term employment relationships. In respect of salary levels, the company aims to be in the high to average range in relation to comparable companies in order to attract competent personnel. beerenberg.com 78 Annual report 2022 Note 19 Warranty liabilities and provisions Note 22 Related parties The group has provided a joint bank guarantee for all the companies in the group. In some cases, the group will provide bank guarantees to customers when entering into large ﬁxed price contracts. As at 31.12.22, the guarantees totalled 25 208, compared to 32 189 as at 31.12.21. A tax withholding guarantee of 49 500 has also been provided as at 31.12.22, compared to 46 500 as at 31.12.21. The group has warranty liabilities relating to maintenance contracts. Warranty periods may last for three to ﬁve years after an annual programme has been completed. New-build and modiﬁcations contracts are generally subject to a two to three year warranty after the completion certiﬁcate has been issued. Guarantee liabilities are assessed continuously per individual project that has guarantees provided. However, as it is difﬁcult to estimate the probability that a warranty claim will arise per project and how much cost this would entail, there are also made an assessment of the overall uncertainty on group level (IAS 37.24). Change in provision for for warranty liabilities is shown in the table below. (Amounts in NOK 1 000) 2022 2 021 Opening balance 21 527 19 792 Incurred warranty cost 271 100 Expired warranty provision -3 497 -3 239 New warranty provision 3 926 4 875 Closing balance 22 227 21 527 No related parties transactions were conducted in 2022. Note 23 Group entities As at 31.12.22 the group consist of the following 11 companies; Beerenberg AS, Beerenberg Holding AS, Beerenberg Services AS, Beerenberg Industri AS, Remotion AS, Beerenberg Poland Sp. z o.o, Beerenberg Singapore LTD, Beerenberg UK LTD, Beerenberg Thailand LTD, Beerenberg Holding (Thailand) Co. LTD and Beerenberg Korea LTD. Together with STB Corporation Company Limited, a subsidiary Beerenberg Holding (Thailand) Co. LTD was established in the 4th Quarter of 2021. The investment by STB Corporation Company Limited in Beerenberg Holding (Thailand) Co. LTD represents a non-controlling interest, thus net proﬁt that is attributable to non-controlling interest is presented in the Condensed Statement of Income and in the Condensed Consolidated Statement of Change in Equity. The ownership interest is 49%, still Beerenberg Holding (Thailand) Co. LTD and its subsidiary Beerenberg Thailand LTD is consolidated in the group accounts since the majority of voting rights is secured through the shareholder structure and agreements. (Amounts in NOK 1 000) Company Parent Company Ownership interest Beerenberg Holding AS Beerenberg AS 100% Beerenberg Services AS Beerenberg Holding AS 100% Beerenberg Industri AS Beerenberg Services AS 100% Remotion AS Beerenberg Services AS 100% Beerenberg Solutions Poland Sp. z o.o Beerenberg Services AS 100% Beerenberg Singapore LTD Beerenberg Services AS 100% Beerenberg UK LTD Beerenberg Services AS 100% Beerenberg Holding (Thailand) Co. LTD Beerenberg Services AS 49% Beerenberg Thailand LTD Beerenberg Holding (Thailand) Co. Ltd 100% Beerenberg Korea LTD Beerenberg Solutions Poland Sp. z o.o 100% Beerenberg Industri AS registered ofﬁce is at Bedriftsvegen 10, Skien. Remotion AS registered ofﬁce is Forusbeen 210, Sandnes. Beerenberg Singapore LTD’s registered ofﬁce is in Singapore. Beerenberg Poland Sp. Z o.o’s registered ofﬁce is in Poland. Beerenberg Korea LTD’s registered ofﬁce is in Korea. Beerenberg Thailand LTD’s and Beerenberg Holding (Thailand) Co. Ltd registered ofﬁce is in Thailand. Beerenberg UK LTD’s registered ofﬁce is in UK. The other companies has registered ofﬁce at Kokstaddalen 33, Bergen. The voting share in the subsidiary companies is identical to the ownership share, except for Beerenberg Holding (Thailand) Co. LTD where the majority of voting rights is secured through the shareholder structure and agreements. Note 20 Other short-term liabilities (Amounts in NOK 1 000) 2022 2 021 Accrued holiday pay 90 190 79 460 Contract liabilities 3 239 10 374 Project provisions and provisions for accrued salaries 149 259 113 375 Total other short term liabilities 242 688 203 210 Note 21 Contingent outcomes Project risks and uncertainties The group’s projects are largely long-term Frame Agreements awarded as the result of a tender. According to IFRS 15 revenue is recognized based on evaluation of work performed in the period. The value of work performed during the period are based on a measurement of physical progress recorded after a detailed inspection of actual progress, or based on the number of hours of work performed, normally also approved by the customer. Therefore, in each reporting period there will be a very limited degree of use of estimates related to revenue in projects involving services rendered. Similar, in projects involving delivery of goods income is recognized upon delivery to customer, so a very limited need for estimates exists. However, circumstances and information may change in subsequent periods, and ﬁnal outcomes may be better or worse than assessments made at the time the ﬁnancial statements were prepared. In the group’s opinion, there are no projects as at 31.12.22 with uncertainties relating to estimates of revenue or cost that may be of signiﬁcant importance to the consolidated ﬁgures. Legal disputes From time to time, the group becomes involved in various disputes in its course of business. Provisions have been made to cover expected losses resulting from such disputes to the extent that negative outcomes are probable and reliable estimates can be produced. The ﬁnal outcome of such cases will always contain elements of uncertainty, and may result in liabilities exceeding the recognised provisions. beerenberg.com 80 Annual report 2022 Note 24 Derivatives Note 25 Interest-bearing liabilities The group has used hedge accounting in accordance with IFRS 9. Refer to note 1 accounting principles for a description of the group’s strategy for applying different types of derivatives to mitigate different types of risk exposures, and how these affects the ﬁnancial statement. At the end of 2021 and 2022 only one derivative instrument was present, an interest swap agreement, to mitigate the effect of change in variable interest rates. In connection with the new Bond loan, the group entered in December 2020 into an interest rate swap agreement to secure the cash ﬂows related to long- term loans, where the loan terms are 3 months Nibor + margin. The contract involve an exchange of 3-month Nibor to the ﬁxed rates set forth below for current principal in the maturity of the agreement. The fair value of interest rate swap is classiﬁed as non-current asset / liability since the remaining maturity of the hedged item (loan) is more than 12 months. Change in value of contracts are recognized in other comprehensive income. Interest rate swaps are valued according to level 2 of the valuation hierarchy (IFRS 13), ie the value derived from observable factors such as market interest rates. The fair value of the interest rate swap is at 31.12.22 positive and matures within one year and is therefore classiﬁed in the account group other receivables under current assets compared to last year when it was classiﬁed in the group ﬁnancial ﬁxed assets under non current assets. The tables provide information about the contractual terms relating to the group’s interest-bearing liabilities measured at amortised cost. For more information about the group’s interest rates, currencies and liquidity risk, please see the section on ﬁnancial risk management and exposure in the chapter on accounting principles. Summary of interest-bearing liabilities as at 31.12.2022 (Amounts in NOK 1 000) Book value Spread over NIBOR Due Terms of interest Multicurrency overdraft facility, limit 150 000 * - 3.2% 13.11.2023 NIBOR+Margin * Interest-bearing leasing liabilities 33 770 1.5% - 4.5% 2023-2028 NIBOR+Margin * The facility has a total limit of 150 000 which includes guarantees. The remaining limit after reduction for guarantees are 121 292. There is a commitment fee for unused facility of 1.4%. 2022 Counter- Market Risk Nature party/ Date of Principal Fixed Variable Classi- value as of Fair Value Category of risk Bank Agreement agreement Maturity amount interest interest ﬁcation 31.12.22 31.12.22 Cash ﬂow Changes Danske 62264732FO 17.12.2020 17.12.2020 - 450 000 0.695% 3 mnth Long term 11 858 11 858 hedge in variable Bank -BRD7L 13.11.2023 Nibor interest rate 2021 Counter- Market Risk Nature party/ Date of Principal Fixed Variable Classi- value as of Fair Value Category of risk Bank Agreement agreement Maturity amount interest interest ﬁcation 31.12.21 31.12.21 Cash ﬂow Changes Danske 62264732FO 17.12.2020 17.12.2020 - 450 000 0.695% 3 mnth Long term 6 697 6 697 hedge in variable Bank -BRD7L 13.11.2023 Nibor interest rate The group have the following loans: Spread over (Amounts in NOK 1 000) Book value NIBOR Fair Value Due Terms 3 mnth Bond (Senior Secured Callable Bond Issue 2020/2023) * 641 621 8.0% 671 125 13.11.2023 NIBOR+Margin Government Loan ** 1 180 - 1 180 25.07.2023 Interest free 10.10.2025 Other bank loans *** 7 454 - 7 454 10.01.2027 5.15% - 6.14% * A 3-year Senior Secured Bond of 750 000 was issued in November 2020. Discount on principal amount and arrangement fee, have been classiﬁed net with the Bond. The bond has every 6-month amortization of 25 000 until maturity, in total 125 000. As at 31.12.2022, 100 000 have been amortized. The maturity date of the bond is 13 November 2023. At redemption of the loan a premium of 3.25% on principal amount have to be paid, therefore Fair Value of the Bond is presented including this premium. The premium at redemption, as well as discount and arrangement fee is accrued as interest cost during the course of the loan. The table below explains the link between principal amount of the Bond, book value and fair value. ** The government loan provided to the subsidiary in Poland, Beerenberg Poland Sp Z o.o, is part of the Polish governments Covid support package. The loan is interest free. *** Other bank loans consists of two loans from Innovasjon Norge and one loan in SR Bank in the acquired subsidiary Remotion AS. of interest Principal amount 650 000 3.25% premium to be paid at redemption of Bond 21 125 Fair Value 671 125 Principal amount 650 000 Discount principal amount and arrangement fee -8 379 Book Value 641 621 Covenants In connection with the bond issue Beerenberg has signed an 150 000 super senior credit facility agreement with Danske Bank. The Facility agreement includes covenants related to quarterly Net Total Leverage ratio test (Net Debt / EBITDA). This ratio must be below 7.0 at 31.12.2022. The group has been in compliance with covenants in 2022. beerenberg.com 82 Annual report 2022 Note 26 Secured Liabilities Note 27 Acquisition of Remotion AS At the 1st of April, the purchase of 100% of the shares in the company Remotion AS organization number 915026451, by the Group Company Beerenberg Services AS was ﬁnalized. Remotion AS is a Company which main business is development, rental and operation of Robotic solutions mainly to the Oil and Gas Industry. The Company is based in Sandnes, Norway. The rationale for the acquisition is to implement Remotions Robotics solutions in Beerenbergs project execution models to further develop better, safer, and more environmental solutions. The payment for the equity was MNOK 50. Main assets in Remotion were Fixed assets of MNOK 19, mainly in-house developed Robots and accounts receivables and other receivables of MNOK 4. Main liabilities were loans of MNOK 10 and vendor debt of 4. A Purchase Price Allocation analysis in connection to the acquisition has been carried out. The conclusion is an allocation of excess value to technology linked to the development of robotic solutions of MNOK 53 and deferred tax of MNOK 11. The estimation of value of technology is based on expected revenues from the use of Robotics in Beerenbergs current contracts in addition to new business opportunities for the Group. The excess value allocated to technology is amortized over 5 years. The ﬁgures of Remotion AS has been fully consolidated in the Group ﬁgures with regards to the Consolidated Statement of Financial Position and Proﬁt and loss from 01.01.2022. The formal transfer of the shares were done at the 1st of April 2022, but the price for the shares was set out based on the balance sheet as at 31.12.2021. The economic activity in Remotion in the period from 1.1.2022 to 1.4.2022 are considered immaterial, hence the full year consolidation of Remotion in Beerenbergs Group ﬁnancial statement. The group has provided security for its arrangement with Danske Bank. The tables below provide an overview of the arrangement and the book value of the assets set up as security. The group has provided joint bank guarantee for all the companies in the group. The group’s guarantee liability pertains to contract guarantees for such guarantees and to guarantees to the authorities. As at 31.12.22, the guarantees totalled 74 708. 2022 2021 (Amounts in NOK 1 000) Security has been provided for the following debts: Guarantees, incl. tax withholding guarantee 74 708 78 673 Interest bearing short-term liabilities 679 968 78 861 Interest bearing long-term liabilities 26 095 665 173 Total for the group 780 771 822 707 Capitalized value of assets provided as security for secured debts: Fixed assets 181 630 172 022 Inventory 93 889 77 790 Trade receivables 261 679 306 387 Total 537 198 556 200 Overview of net assets acquired from purchase of Remotion (Amounts in NOK 1 000) Cash 233 Trade receivables 1 147 Other Receivables 2 319 Robotics and Robotic development projects 19 312 Intangible assets Robotic technology/development projects 53 013 Trade payables -1 482 Bank Overdraft -349 Deferred tax liability -11 663 Other long term debt -9 563 Other short term debt -2 668 Net identiﬁable assets acquired 50 299 Outﬂow of cash to acquire Remotion, net of cash acquired Cash consideration 25 299 Less: Balances acquired Cash 233 Bank overdraft -349 Net outﬂow of cash - investing activities 25 183 The agreemeent for acquisition of Remotion includeds an earn-out agreement, based on performance in Remotion until 31.12.2023. The most likely result of this agreement will be additional MNOK 25 on top of the cash consideration already paid. This amount is accrued, and included as part of the purchase price. beerenberg.com 84 Annual report 2022 Note 28 Climate Risk Beerenbergs core business is integrated solutions, products and services to a wide range of clients, predominantly in the global energy industry. When conducting its operations, Beerenberg aims to minimize the environmental impact and the group aims to continuously improve its environmental performance. Beerenberg’s direct impact on the natural environment is primarily considered to stem from emissions of volatile organic compounds (VOCs) because of the use of paint products and solvents. This is a natural consequence of the group’s activities, and the volume of VOC emissions will always reﬂect the volume of assignments and the type of products being ordered and delivered. Climate risk Climate change related risks comprises climate related physical events that may impact the integrity of our and others assets (physical risks), as well as strategic challenges arising from climate related policies, regulations and customers’ demand for zero or low-emission solutions (transition risks). Physical risks could result from climate related acute and/or chronic changes in rainfall patterns, shortages of water or other natural resources, variations in sea levels, storm patterns and intensities as well as temperatures. Transition risks could result from an increased demand for lowcarbon products and solutions, higher price for greenhouse gas emissions as well as changes in market prices for oil-related products and therefore lower demand for our services. Together with the climate risks, opportunities also follows. Beerenberg seeks to to be the prefferred partner for companies and employees that sets environment high on the agenda. Beerenberg endeavours to use alternative products and services that help reduce the environment footprint and with a lesser impact on the environment where possible (the substitution requirement). For example, to reduce the negative environmental effects of its waste output, Beerenberg has introduced robust procedures for waste disposal and ﬁnal processing (material and energy harvesting). The work of reducing microplastics is at the top of Beerenberg´s agenda through extended use of robots to collect microplastic. To mitigate the transition risk, Beerenberg continuously aims to enter new markets and ﬁnd new areas where our products and solutions can be applied. This is especially important for our high-quality insulution products which signiﬁcantly improves insulation factors, and reduces energy consumption for the clients. Beerenberg also aims to be a partner in Renewable energy projects, decarbonization solutions, decomissioning and other relevant projects that stems from the energy transition. Effects of climate risk in the Financial Statements A transition away from oil and gas could impy lesser demand for Beerenbergs tradional services and thus impact the value of the Groups assets. However, the main assets in the group are assets that are not directly linked to the oil and gas industry, like for example scaffolding that can be applied in many other industries. Therefore, Beerenberg does not expect any changes to the useful lives of property, plant and equipment. No direct signiﬁcant impacts have been identiﬁed in the assessments and estimates in the ﬁnancial report for 2022. Beerenberg has assessed the impact of climate change both in relation to the Financial Statement for 2022 and in relation to continuing operations and investment commitments. Although no immediate or short-term effects of climate change have been identiﬁed, Beerenberg is aware of the constantly changing risks and opportunities associated with climate change. Therefore, the risks and opportunities will be regularly assesed againtst the assesments and estimates that is applied when preparing the Group Accounts Note 29 Events after the reporting date After the reporting date one of Beerenberg’s employees was injured in a work accident at Mongstad. The employee, who was seriously injured, is in stable condition and receiving treatment at Hospital. After the accident Beerenberg has been closely following up all parties concerned. Beerenberg are carrying out a joint investigation of the accident together with client in addition to other relevant authorities’ investigations, in line with customary policies pertaining to serious accidents. beerenberg.com 86 Annual report 2022 BEERENBERG AS Income Statement Statement of Comprehensive Income (Amounts in NOK 1 000) (Amounts in NOK 1 000) Note 2022 2021 Note 2022 2021 Operating expenses Annual proﬁt/loss 26 059 64 496 Other operating expenses Total operating expenses 7 3 811 3 811 1 658 1 658 Other revenue and expenses Change in value of derivatives 6, 9 4 025 6 100 Operating result -3 811 -1 658 Total Statement of Comprehensive Income 30 084 70 596 Intragroup interest income Other interest income Other ﬁnance income Intragroup interest costs Other interest costs Other ﬁnance costs 2 329 4 304 3 The comprehensive income is attributable to: Shareholders 117 827 3 404 72 772 6 759 37 225 165 840 3 598 69 485 9 160 83 904 30 084 30 084 70 596 70 596 Total Statement of Comprehensive Income Other revenue and expenses is after tax and will be reversed in the income statement. The accompanying notes 1-11 are an integral part of these ﬁnancial statements. Net ﬁnancial items 8, 9 Ordinary result before tax 33 414 7 355 82 245 17 749 64 496 Tax 6 Annual proﬁt 26 059 The annual proﬁt/loss is attributable to: Other equity 4 26 059 26 059 0,026 64 496 64 496 0,064 Annual proﬁt Basic earnings per share for 1.000.000 A-shares 3 Diluted earnings per share are identical as there is no dilutive effect. The accompanying notes 1-11 are an integral part of these ﬁnancial statements beerenberg.com 88 Annual report 2022 Statement of Financial Position (Amounts in NOK 1 000) (Amounts in NOK 1 000) Note 2022 2021 Note 2022 2021 Assets Equity and liabilities Equity Non-current assets Financial non-current assets Investments in subsidiaries Derivatives Paid-in capital Share capital 1 9 1 257 646 0 1 257 646 6 697 26 700 240 310 267 010 26 700 240 310 267 010 Share premium Total paid-in capital Total ﬁnancial non-current assets Total non-current assets 1 257 646 1 257 646 1 264 344 1 264 344 Retained earnings Other equity Current assets Receivables 551 014 551 014 520 930 520 930 Total retained earnings Other current receivables Derivates 1 9 118 105 11 858 164 565 0 Total equity 3, 4 818 024 787 940 Total receivables 129 962 164 565 Liabilities Total current assets Cash at bank 129 962 102 945 164 565 80 614 Other non-current liabilities Deferred tax liabilities 6 5 -407 0 466 632 487 632 953 2 Interest bearing long-term liabilities Total other non-current liabilities -407 Total assets 1 490 554 1 509 523 Current liabilities Interest bearing short-term liabilities Tax payable 5 6 663 573 9 364 0 65 212 19 925 3 492 Other current liabilities Total current liabilities 672 937 88 630 Total liabilities 672 530 721 583 Total equity and liabilities 1 490 554 1 509 523 The accompanying notes 1-11 are an integral part of these ﬁnancial statements. Bergen 28 April 2023 Board of Directors at Beerenberg AS Geir Aarstad Sebastian Ehrnrooth Morten Walde Hilde Drønen Arild Apelthun beerenberg.com 90 Annual report 2022 Statement of Cash Flows Accounting principles (Amounts in NOK 1 000) Note 2022 2 021 The ﬁnancial statements have been prepared in accordance with the Financial derivative instruments regulation on simpliﬁed adoption of IFRS (International Financial Reporting Standards). The annual ﬁnancial statements were authorised for issue by the board of directors on 28 April 2023. The group holds a limited number of ﬁnancial derivative instruments to hedge its foreign currency and interest rate risk exposures. The management strategy is, at present, to use hedging instruments in order to mitigate the effect of changes in variable interest rates. The long-term ﬁnancing of the group is based on variable interest rates (3 mnth Nibor) which is subject to ﬂuctuations. The strategy is to minimize this risk by entering into interest swaps agreements to swap variable interest rates to ﬁxed rates at a proportion of around 70% of total outstanding loans. Cash ﬂows from operating activities Result for the period before tax Tax paid for the period 33 414 -19 925 12 400 25 889 82 245 -12 598 24 586 94 234 7 Classiﬁcation of items in the statement of ﬁnancial position Assets intended for long-term ownership or use are classiﬁed as non-current assets. Assets associated with the circulation of goods are classiﬁed as current assets. Receivables are classiﬁed as current assets if they fall due within one year. Analogue criteria are applied to liabilities. However, repayments of non-current receivables and non-current liabilities made in the ﬁrst year are not classed as current assets or current liabilities. Changes to other time restricted items Net cash ﬂow from operating activities Cash ﬂows from ﬁnancing activities Change in draw on credit facility Derivatives are recognized initially at fair value. Changes in fair value are recognized in proﬁt or loss, except for hedging instruments that meet the criteria for hedge accounting. 0 0 -6 054 50 000 Incoming payments on long term loans Outgoing payment on long term loans Payment of group contribution 6 6 9 9 Ta x -50 000 164 269 -117 827 -3 558 -50 000 156 646 -164 269 -13 677 The tax liability in the income statement comprises both tax payable and changes in deferred tax for the period. Deferred tax is calculated at the prevailing tax rate on the basis of the temporary differences between book value and taxable value and on any tax loss carryforward at the end of the ﬁnancial year. Tax-increasing and tax-reducing temporary differences that are reversed or may be reversed in the same period have been offset. The group follows IFRS 9 criteria’s for classifying a derivative instrument as a hedging instrument. These are as follows: Group contribution booked as ﬁnance income Net cash ﬂow from ﬁnancing activities a. the hedging relationship consists only of eligible hedging instruments and eligible hedged items. b. at the inception of the hedging relationship there is formal designation and documentation of the hedging relationship and the entity’s risk management objective and strategy for undertaking the hedge. Net change in cash and cash equivalents 22 332 80 614 80 556 58 Investments in subsidiaries Subsidiaries are measured using the cost method in the separate ﬁnancial statements. Investments are valued at the historical cost of the shares unless depreciation has become necessary. They are depreciated to fair value when the fall in value is due to circumstances that cannot be assumed to be temporary and it is deemed necessary in accordance with generally accepted accounting practices. Write-downs are reversed when the basis for a write-down is no longer present. c. the hedging relationship meets all of the following hedge effectiveness requirements: Cash and cash equivalents per 01.01. i. there is an economic relationship between the hedged item and the hedging instrument Cash and cash equivalents 31.12. 102 945 80 614 ii. the effect of credit risk does not dominate the value changes that result from that economic relationship and The accompanying notes 1-11 are an integral part of these ﬁnancial statements. iii. the hedge ratio of the hedging relationship is the same as that resulting from the quantity of the hedged item that the entity actually hedges and the quantity of the hedging instrument that the entity actually uses to hedge that quantity of hedged item. Any dividends received are in principle recognized as income, however. Dividends that exceed retained earnings after purchase are recognized as a reduction in the original cost. Dividends / Group contributions from subsidiaries are recognized in the same year that the subsidiary makes the provision. Hedging instruments classed as cash ﬂow hedges offset variations in cash ﬂows caused by changes in exchange rates, interest rates and market values. For cash ﬂow hedges that meet the criteria for hedge accounting, all gains and losses on the effective part of the contract are recognized in comprehensive income and as hedging reserve in the statement of equity, while those on the ineffective part are recognized in the income statement under ﬁnance. Liabilities Liabilities are recognized at their fair value when the loan is paid out, less transaction costs. In subsequent periods the loan is recognized at amortised cost using the effective rate of interest. Financial instruments The Company initially recognizes loans, receivables and deposits on the date of acquisition. All other ﬁnancial assets are recognized initially on the trade date at which the Company becomes a party to the contractual provisions of the instrument. Derivative ﬁnancial instruments with positive fair value are classiﬁed as current assets if the remaining maturity of the hedged item is less than a year into the future, and as ﬁxed assets when the remaining maturity of the hedged item is more than a year ahead. Financial derivatives with negative fair value are classiﬁed as a current liability if the remaining maturity of the hedged item is less than a year into the future, and as a long-term liability when the remaining maturity is more than a year ahead. The Company derecognizes a ﬁnancial asset when the contractual rights to the cash ﬂows from the asset expire, or when the Company transfers the contractual rights in a transaction where substantially all the risks and rewards of ownership of the ﬁnancial asset are transferred. All rights and liabilities in transferred ﬁnancial assets that are created or retained as a result of the transfer are recognized separately as assets or liabilities. Refer to note 10 for a speciﬁcation of the group’s current derivative instruments. Financial assets and liabilities are offset if the Company is legally entitled to offset the amounts and intends either to settle on a net basis or to realise the asset and settle the liability simultaneously. Offset amounts are presented net in the statement of ﬁnancial position. beerenberg.com 92 Annual report 2022 Note 1 Note 4 Long-term investments in other companies Equity Subsidiary: (Amounts in NOK 1 000) Share capital Share premium Other equity Total Registered Ofﬁce Ownership interest/ voting share Equity last year Proﬁt/loss last year (Amounts in NOK 1 000) Equity as of 31.12.2021 26 700 240 310 520 930 26 059 4 025 787 940 26 059 4 025 100% 100% Proﬁt/loss for the year Beerenberg Holding AS Bergen 100% 740 910 0 Other comprehensive income for the year Equity as of 31.12.2022 26 700 240 310 551 014 818 024 IntraGroup balances etc.: Other current receivables (Amounts in NOK 1 000) 2022 2021 Beerenberg Services AS 117 827 166 147 Note 5 Total 117 827 166 147 Non-current and current liabilities, collateral and guarantees, etc. Liabilities secured by collateral etc. A 3-year Senior Secured Bond of 750 000 was issued in November 2020. Note 2 Discount on principal amount and arrangement fee, have been classiﬁed net with the Bond. The bond has every 6-month amortization of 25 000 until maturity, in total 125 000. As at 31.12.2022, 100 000 have been amortized. Restricted funds The company has no restricted funds as of 31.12.2022. The maturity date of the Bond is 13 November 2023, the Bond is therefore in full classiﬁed as a current liability in 2022. At redemption of the loan a premium of 3.25% on principal amount have to be paid, therefore Fair Value of the Bond is presented including this premium. The premium at redemption, as well as discount and arrangement fee is accrued as interest cost during the course of the loan. Note 3 Share capital and shareholder information (Amounts in NOK 1 000) 2022 2021 The Company's share capital is 26 700 distributed on 267.000.000 shares, whereof 1.000.000 A-shares, and 266.000.000 B-shares. Bond (Senior Secured Callable Bond Issue 2020/2023) 641 621 682 487 Total 641 621 682 487 Nominal value per share is 0.0001. The A-shares have all rights. The B-shares have voting rights by 1 vote per 10 share and no rights to dividends. In the event of a liquidation of the company, the owner of B share shall be entitled to repayment of paid-in capital at the time when the share was subscribed (nominal and any share premium), but no excess amount. Nominal bond issue is 650 000. The bond issue net of discount on principal amount and arrangement fee is recorded at amortised cost at 641 621. The B shareholders right at this point has a preferential right over the A shareholders right to liquidation dividends. Otherwise, the share classes are equal. List of the major shareholders at 31.12.22: The subsidiaries Beerenberg Services AS and Beerenberg Holding AS are jointly and severally liable together with the parent Company Beerenberg AS for bonds acquired by Beerenberg AS. Shareholder A-Shares % B-Shares % Total Shares % Controlled by Maturity structure of ﬁnancial liabilities The ﬁgures in the table show the maturity structure in nominal increments for the Company’s interest-bearing debts, including interest payments on recognized liabilities as at 31.12: Segulah IV L.P. 820 875 92 121 23 319 11 792 5 325 82.1% 9.2% 223 247 653 24 931 110 6 310 883 - 83.9% 9.4% 224 068 528 25 023 231 6 334 202 11 792 83.9% 9.4% AlpInvest Partners 2012 I B.V. AlpInvest Partners 2012 II B.V. 2.3% 2.4% 2.4% Book value Fair Value Under 6 months 6-12 months 1-2 years 2-5 years GRAA AS Mowin AS Other 1.2% 0.0% 0.0% Board Leader Board member Bond 641 621 671 125 62 115 659 323 0.5% 1 267 350 10 243 004 266 000 000 0.5% 1 272 675 10 289 572 267 000 000 0.5% 46 568 1 000 000 4.7% 3.9% 3.9% At redemption of the loan a premium of 3.25% on principal amount have to be paid, therefore Fair Value of the Bond is presented including this premium. The interest rate is 3 months’ NIBOR plus a 8.0 percentage point spread. Total 100.0% 100.0% 100.0% In connection with the bond issue Beerenberg has signed an 150 000 super senior credit facility agreement with Danske Bank. Basic earnings per A-share is 0.026 for 2022 compared to 0,064 for 2021. The Facility agreement includes covenants related to quarterly Net Total Leverage ratio test (below 7.0 Q4 2022). The group is in compliance with covenants as of 31st of December 2022. Basic earnings per share are based on the proﬁt/loss attributable to A-shares and on the weighted average number of ordinary shares outstanding. Diluted earnings per share are identical as there is no dilutive effect. beerenberg.com 94 Annual report 2022 (Amounts in NOK 1 000) Borrowings 683 343 Total Note 7 Payroll costs, number of employees, remunerations, loans to employees ect. Net debt as at 31 December 2020 Cash ﬂow changes 683 343 The Company had no employees in 2022 and is not obliged to operate an occupational pension scheme under the Act on Obligatory Occupational Pensions. No remuneration was paid to the CEO or members of the board of directors in 2022. Draw on credit facility -6 054 50 000 -50 000 20 410 697 700 -6 054 50 000 -50 000 20 410 697 700 Incoming payments on long term loans Outgoing payment on long term loans Non cash changes Expensed auditor’s remuneration (Amounts in NOK 1 000) 2022 2021 Net debt as at 31 December 2021 Cash ﬂow changes Statutory audit (incl. technical assistance with ﬁnancial statements) 109 38 109 38 Tax advice Outgoing payment on long term loans Non cash changes -50 000 15 874 -50 000 15 874 Other audit assurance services 144 253 0 Total 147 Net debt as at 31 December 2022 663 573 663 573 The sums stated are exclusive of VAT. Note 6 Ta x Tax payable has been calculated as follows Note 8 (Amounts in NOK 1 000) 2022 2021 Speciﬁcation of ﬁnance income and ﬁnance costs Ordinary result before tax Permanent differences Change in temporary difference Basis for tax payable 33 414 17 9 134 42 565 82 245 -1 567 9 888 Finance income (Amounts in NOK 1 000) 2022 2021 90 567 Group contribution from Beerenberg Services AS Intragroup interest income 117 827 2 329 0 164 269 304 Payable tax in the balance sheet (22%) 9 364 19 925 Calculation of deferred tax / deferred tax assets Temporary differences through proﬁt/loss Accrued borrowing costs Precluded interest deduction to be carried forward Net temporary differences Gains from purchase and sale of own bonds Other ﬁnance income 1 571 3 4 8 379 -22 089 -13 710 17 513 -22 089 -4 576 Total ﬁnance income 120 160 166 147 Finance costs Basis for deferred tax / tax assets -13 710 -4 576 (Amounts in NOK 1 000) 2022 2021 22% deferred tax / tax assets (-) through proﬁt/loss -3 016 -1 007 Intragroup interest costs 3 404 72 772 6 759 3 598 69 532 9 113 Temporary differences through Other Comprehensive Income (OCI) Derivative Basis for deferred tax / tax assets Interest costs Bond and other interest costs Accrued reﬁnancing fee 11 858 11 858 6 697 6 697 Total ﬁnance costs 82 935 82 244 22% deferred tax / tax assets (-) through OCI Deferred tax in the statement of ﬁnancial position Distribution of tax expense 2 609 1 473 -407 466 Tax payable in the statement of ﬁnancial position Total tax payable in tax expense Change in deferred tax through proﬁt/loss Tax expense through proﬁt/loss 9 364 9 364 -2 009 7 355 19 925 19 925 -2 175 17 749 Change in deferred tax/deferred tax assets through OCI 1 136 1 719 Tax expense through OCI 1 136 1 720 Payable tax in the balance sheet 9 364 19 925 beerenberg.com 96 Annual report 2022 Note 9 Financial instruments (Amounts in NOK 1 000) 2022 2021 Declaration by the Board of Directors and CEO Cash ﬂow hedge (interest rate swap) 11 858 6 697 Total fair value 11 858 6 697 We conﬁrm, to our best knowledge, that the ﬁnancial statements for the period January 01 to 31 December 2022 for the parent company Beerenberg AS and for the group has been prepared in accordance with all applicable account- ing standards. We conﬁrm that the ﬁnancial statements give a true and fair view of the group’s consolidated assets, liabilities, ﬁnancial position and result of the operations. The Board also conﬁrm that the Director’s Report provides a true and fair view of the development and performance of the business and the position of the group and the Company, including a description of the key risks and uncertainty factors that the Beerenberg AS group is facing. The Company has an interest rate swap with a nominal value of 450 000. The Company is swapping variable interest (3mnth NIBOR) for ﬁxed interest at 0,695 %. The fair value of the interest swap has been calculated by the Group’s bank. The interest rate swap runs until November 2023. The interest rate swap qualiﬁes for hedge accounting following the repayment of the old bond issue, and replacement by a new bond issue in November 2020. The interest swap effectively reduces interest rate risk, thus satisfying the criteria for hedge accounting. The interest swap is valued in accordance with Level 2 of the valuation hierarchy (IFRS 13), i.e. the value is derived from observable factors such as market interest rates. Change in fair value of the cash ﬂow hedge net after tax is recorded in Other Comprehensive Income. At 31.12 the fair value of the new interest swap is positive by 11 858, net after tax the balance of Hedging reserve is positive by 9 249. Financial instruments by category Bergen 28 April 2023 Board of Directors at Beerenberg AS Deposits, Assets at fair value Derivatives used for hedging Financial assets available for sale As at 31.12. - Assets receivables and cash through proﬁt/loss Total Derivatives used for cash ﬂow hedging Receivables 0 118 105 102 945 221 050 0 0 0 0 11 858 0 0 0 0 11 858 118 105 102 945 232 908 0 0 Cash and cash equivalents Total 11 858 Geir Aarstad Sebastian Ehrnrooth Morten Walde Financial liabilities carried at Liabilities at fair value through proﬁt/loss Derivatives used for hedging Other ﬁnancial liabilities As at 31.12. - Liabilities amortised cost Total Loans excl. statutory liabilities 641 621 0 0 0 641 621 Hilde Drønen Total 641 621 0 0 0 641 621 Arild Apelthun Note 10 Events after the reporting date After the reporting date one of Beerenberg’s employees was injured in a work accident at Mongstad. The employee, who was seriously injured, is in stable condition and receiving treatment at Hospital. After the accident Beerenberg has been closely following up all parties concerned. Beerenberg are carrying out a joint investigation of the accident together with client in addition to other relevant authorities’ investigations, in line with customary policies pertaining to serious accidents. beerenberg.com 98 Annual report 2022 We have been the auditor of the Company for 10 years from the election by the general meeting of the shareholders on 21 February 2013 for the accounting year 2013. To the General Meeting of Beerenberg AS Key Audit Matters Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the financial statements of the current period. These matters were addressed in the context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. Independent Auditor’s Report Report on the Audit of the Financial Statements The Groups business activities are largely unchanged compared to last year. Valuation of goodwill and Earned, not invoiced revenue contains the same risks and challenges as last year and our focus on these areas have continued in 2022. Opinion Key Audit Matters How our audit addressed the Key Audit Matter We have audited the financial statements of Beerenberg AS, which comprise: • the financial statements of the parent company Beerenberg AS (the Company), which comprise the statement of financial position as at 31 December 2022, the income statement, statement of comprehensive income and statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and the consolidated financial statements of Beerenberg AS and its subsidiaries (the Group), which comprise the consolidated statement of financial position as at 31 December 2022, the consolidated income statement, consolidated statement of comprehensive income, consolidated statement of changes in equity and consolidated statement of cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. Valuation of Goodwill At 31 December 2022, the Group had recognized Goodwill with a carrying value of NOK 782 762 thousand. We obtained an understanding of management’s valuation process and evaluated relevant internal control activities. We reviewed management’s identification of cash-generating units and found these to be reasonable. We reviewed management’s model and impairment assessments for the cash generating units where goodwill was allocated and tested whether the model was mathematically accurate. We found that the model was based on recognized principles and that the recoverable amount was accurately calculated. • Goodwill is allocated to groups of cash generating units identified in accordance the Group’s operating segments, Services and Benarx. The impairment assessment of goodwill showed that the recoverable amount was higher than the carrying amount for both segments. Consequently, no impairment was recognized. In our opinion • • the financial statements comply with applicable statutory requirements, the financial statements give a true and fair view of the financial position of the Company as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with simplified application of international accounting standards according to section 3-9 of the Norwegian Accounting Act, and Valuation of goodwill requires management to exercise judgement related to, among other, future cash flows and discount rate applied. We focused on this area due to the magnitude of the amounts and the inherent risks related to judgements made by management when determining the assumptions applied to support the valuation of goodwill. We refer to note 12 in the consolidated financial We compared the different elements in the discount rate calculation to our own expectations and the general expectations in the market and found that the applied discount rate was reasonable. • the consolidated financial statements give a true and fair view of the financial position of the Group as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. We evaluated management’s assumptions related to future cash flows by comparing them to the budgets adopted by the Board of Directors and the strategy plan for the Group’s various cash generating units. We performed sensitivity analyses and challenged management’s assumptions related to future cash flows. We found that the assumptions were reasonable and in line with the Group’s current market visibility and historical hit rates. The terminal growth rate in the model was compared to the market’s expectation of long- term inflation. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion statements for further information. We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ 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. 2 / 6 PricewaterhouseCoopers AS, Sandviksbodene 2A, Postboks 3984 - Sandviken, NO-5835 Bergen T: 02316, org. no.: 987 009 713 MVA, www.pwc.no Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap beerenberg.com 100 Annual report 2022 We challenged management’s historical accuracy by comparing previous years' assumptions related to actual results in the related years. We found no material deviations between the assumptions used in previous years. In connection with our audit of the financial statements, our responsibility is to read the Board of Directors’ report and the other information accompanying the financial statements. The purpose is to consider if there is material inconsistency between the Board of Directors’ report and the other information accompanying the financial statements and the financial statements or our knowledge obtained in the audit, or whether the Board of Directors’ report and the other information accompanying the financial statements otherwise appear to be materially misstated. We are required to report if there is a material misstatement in the Board of Directors’ report or the other information accompanying the financial statements. We have nothing to report in this regard. We have read note 12 and assessed the information there to be reasonable. Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report Earned, not invoiced revenue Earned, not invoiced revenue constitutes NOK We obtained an understanding of and • • is consistent with the financial statements and contains the information required by applicable statutory requirements. Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate Governance and Corporate Social Responsibility. evaluated the assumptions used in the calculation of earned, not invoiced revenue. To assess the assumptions included in the calculation of earned, not invoiced revenue, we obtained an understanding of the customer contracts as well as management’s process for developing the estimate including relevant internal control activities. 215 854 thousand. The Group’s contracts are mainly servicing and maintenance contracts that are Responsibilities of Management for the Financial Statements recognized over time. Work performed is invoiced monthly along with delivered service and maintenance. At year-end there will be work performed during the year, mainly during December that is not yet invoiced and recorded as earned, not invoiced revenue. The estimate requires that management apply judgement related to the amount of work performed. We focused on earned, not invoiced income due to the size of the amount, and the inherent risk related to management overestimating the earned, not invoiced income, which would affect the Groups results in the financial statements. Management is responsible for the preparation of financial statements that give a true and fair view in accordance with simplified application of international accounting standards according to the Norwegian Accounting Act section 3-9, and for the preparation and true and fair view of the consolidated financial statements of the Group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. We challenged the assumptions used in interviews with management. Further, we agreed the assumptions used with underlying contracts and other forms of underlying documentation and tested whether management’s calculations were In preparing the financial statements, management is responsible for assessing the Company’s and the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. mathematically accurate. We assessed management’s historical accuracy by comparing prior years’ assumptions related to earned, not invoiced income to what was invoiced in the subsequent year. We found that previous years earned, not invoiced income, in all material respects was invoiced in the subsequent years. Auditor’s Responsibilities for the Audit of the Financial Statements We refer to note 6, 13 and 21 in the consolidated financial statements for more information. Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements. We have read note 6, 13 and 21, and assessed the information there to be reasonable. As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also: Other Information • identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error. We design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. The Board of Directors and the Managing Director (management) are responsible for the information in the Board of Directors’ report and the other information accompanying the financial statements. The other information comprises information in the annual report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the information in the Board of Directors’ report nor the other information accompanying the financial statements. 3 / 6 4 / 6 beerenberg.com 102 Annual report 2022 annual report, with the file name Beerenberg-2022-12-31-en, have 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 pursuant to 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. • obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company's and the Group's internal control. • • evaluate the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF regulation. conclude on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company's and the Group's ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditor’s report to the related disclosures in the financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditor’s report. However, future events or conditions may cause the Company and the Group to cease to continue as a going concern. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger • • evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves a true and fair view. Bergen, 28 April 2023 PricewaterhouseCoopers AS 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. Marius Kaland Olsen State Authorised Public Accountant We communicate with the Board of Directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit. We also provide the Audit Committee with a statement that we have complied with relevant ethical requirements regarding independence, and to communicate with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards. From the matters communicated with the Board of Directors, we determine those matters that were of most significance in the audit of the financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication. Report on Other Legal and Regulatory Requirements Report on Compliance with Requirement on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of Beerenberg AS, we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the 5 / 6 6 / 6 beerenberg.com 104 Annual report 2022 Deﬁnition of Alternative Performance Measures In this report some terms are used that are not deﬁned in IFRS, but are terms commonly used by analysts, investors and others in the business sector. Below these terms are deﬁned. Order backlog The order backlog consists of sales value of contracts signed. As a signiﬁcant part of Beerenberg’s revenue is related to framework agreements it also includes the estimated value of expected future sales value on framework agreements. EBITDA Operating proﬁt (EBIT) + Depreciation and Impairment EBITDA margin (%) EBITDA / Revenue EBIT Operating proﬁt (before ﬁnancial items and taxes) Operating Margin Operating result / Operating Revenue Net Margin (%) Net Proﬁt / Operating Revenue Net working capital Total current assets – Cash at bank / Total short-term liabilities less tax payable Serious Incident Frequency (SIF) The number of actual and potential unintentional serious incidents per 1 million man-hours worked Lost Time Injury Frequency (LTIF) The number of fatalities and lost time injuries occurred per 1 million man-hours worked Total Recordable Injury Frequency (TRIF) Is the number of fatalities, lost time injuries, injuries with alternative work and injuries requiring medical treatment by a medical professional per million man-hours worked Photo: Beerenberg, Bertil Bargård, Bjørn Helge Rønning, Peab, Remotion Design & production: Apriil Media - apriil.no beerenberg.com BEERENBERG T +47 55 52 66 00 E [email protected] Visitors address Kokstaddalen 33 P.O.Box 273 Slåtthaug, N-5851 Bergen, Norway beerenberg.com

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