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Ocean Sun
Annual Report • Apr 6, 2022
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Annual Report
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ANNUAL REPORT 2021
Ocean Sun Annual report 2022 1
Table of Content
| Our vision | Page 3 |
|---|---|
| Ocean Sun in Brief | Page 4 |
| CEO Letter | Page 9 |
| Share info | Page 11 |
| Board | Page 12 |
| Management | Page 14 |
| Annual report | Page 16 |
| Income statement | Page 18 |
| Balance Sheet | Page 19 |
| Cash Flow | Page 21 |
| Notes | Page 22 |
| Auditor's report | Page 30 |
DocuSign Envelope ID: D374E78E-F37C-48D3-A4D8-324741874A56
Ocean Sun Annual report 2022 2
Our Vision
Ocean Sun shall become the world leading technology provider to floating Photovoltaic (PV) systems.
Ocean Sun delivers proprietary technology based on photovoltaic panels mounted on a hydro-elastic membrane that minimizes the use of materials and enables direct cooling of the PV cells, increasing production efficiency. The company is offering its customers this technology, detailed design and solutions in addition to approved vendors, both key material and the installation companies.
Our Strategies
Our key focus areas are based on five main pillars:
-
- Protect & Maintain our proprietary technology
-
- Develop & Deploy our proprietary technology
-
- Global Partnership for components and for EPC suppliers handling our FPV systems
-
- Large customers and Projects hydropower operators, energy developers and national utilities
-
- Revenue generation through license fees and services
Ocean Sun in brief
OCEAN SUN: A BOLD SOLUTION TO THE GLOBAL ENERGY NEEDS
Our history
Inspired by the Norwegian Maritime heritage, OceanSun has developed a highly competitive solution for Floating PV ("FPV").
The core innovation, a floating power system with solar panels mounted on a thin hydro elastic membrane,offers a unique solution to the world's energy needs.
Ocean Sun's proprietary technology offers renewable energy at world-beating cost levels, enabled by the low material use and the water body's cooling effect, which lowers the solar panels' operating temperature and increases their power output.
Ocean Sun owns an IPR portfolio, including patents and patent applications in all major markets. The Company does not manufacture the components but offer license agreements, whereby developers and in- dependent power producers are granted rights to de- ploy the technologyfortheirprojectsaroundtheworld.
Ocean Sun was founded in 2016, based on a patent application by CEO, Dr. Børge Bjørneklett. In 2017, the Company deployed its first pilot system in the ocean outside of Bergen, Norway. Since then, the company has refined the technology, performed basin laboratory tests, third party certifications and deployed another five pilot systems around the world. As such, Ocean Sun's technology is ready for utility scale installations.
In October 2020, Ocean Sun listed on Euronext Growth Oslo under the ticker OSUN and acquired capital to fund its further expansion. With offices in Oslo, Singapore and Shanghai, Ocean Sun is embarking on its vision to be the world's leading technology provider of floating solar. During 2021, our focus has been on project development with a geographic spread and streamlining our supply chain in order to gear up Ocean Sun's ability to move from smaller systems to utility scale. In addition, to build up our organizational capability to support the future growth of the company.
The need for floating solar
As the world is electrifying there is an increasing demand for, and dependency on electricity. The marine classification company DNV hasforecastedthattheelectricity'sshareofthetotalenergymix will more than double to 45% by 2050. Simultaneously the Paris agreement and other climate commitments stress the urgency for a transformation towardsrenewable energy sources.
Solar poweristhemost promising of allrenewable energy sources and global installed capacity hasincreased by 95 GW in just 4 years to 140 GW in 2019. Due to rapidly declining costs, solar electricity generation is expected to grow 65-fold from 1% of total electricity generation in 2016 to 40% in 2050,becoming the single largest provider of electricity in lessthan two decades.
However, traditional ground mounted solarsystemsrequire extensive areas of land. Land, which is a scarce commodity, especially in proximity to demand centres where the alternative costis high as land resources could be used for other applications such as agriculture, recreational space, for forest preservation or new establishments.
On the other hand, water covers 71% of our planet's surface and most of the densely populated land areas, the electricity demand centres, are located close to water. By utilizing such water assets, Floating PV opens a new era forlarge scale solar power generation.
Typical global application areas for floating solar include:
Reservoirs:
Reservoirs represent a significant opportunity for floating solar. NREL has identified 7.6 Terawatts of FPVmarket potential, equivalentto ~50% ofthe worldwide electricity demand in 2018, on manmade reservoirs alone. There are several benefits with co-sitting floatingsolar and hydropower as: adding FPVlowerstheoverallsystemLCOE,the existing power gridinfrastructure on-site can be used, FPVandhydropower are complementary ona seasonaland daily basis, a baseload of FPV electricity enables storing the hydropower capacity forpeak periods and floating solar can reduce water evaporation from the water reservoir.
River and lakes
Industrial and agricultural lakes can benefit from floating solar as it can cover part nearby industries' power use without occupying valuable land.
Nearshore
Nearly 2.4 billion people (~40% of the world's population) live within 100 km of thecoast, often in densely populated areas with limited land resources. In addition, Island communities often lack power connection tomain-land and therefore run on ex-pensive and polluting diesel generators. As such, FPV enables clean power productioncloser to where the electricity is consumed and thusreduce the price ofthe electricity.
Offshore
In offshore environments floating solar can enable infrastructure and industrial projectssuch as clean hydrogen, ammonia or other e-fuel production plants or desalination facilities.
Overview of the Ocean Sun system components
Application areas for Ocean Sun systems
Ocean Sun's system uses less plastic, has a lower transportation volume and is faster to install than competing FPV systems. Consequently, Ocean Sun's system offers the lowest levelized cost of energy (LCOE) on the market and is as such highly attractive for utility scale installations. Short term, Ocean Sun expects that such installations predominantly will be installed on hydro power reservoirs wherethe benefits of installing floating solar are vast. Due to the system's ability to withstand higher waves and stronger winds and currents, the solution is also well suited for nearand offshore applications as well asin areas with strong winds. With this in mind, Ocean Sun has the clear objective of becoming the World leading technology provider of floating PV systems.
The Ocean Sun solution to floating solar offers significant benefits as no need for land, closer production to where electricity is being consumed and reduced evaporation. In addition, the innovative and patented Ocean Sun solution offers:
- Low CAPEX our floater solution and mooring & anchoring technology is less expensive than competitive systems in the market
- High efficiency with thermal contact with water the PV panels are essentially water-cooled
- Fast and easy installation our welded HDPE rings and membrane technology for sliding the panels onto the membrane allows for building a ring pr day
- Seaworthy the circular shape and horizontally placed panels offer the most robust solution
- Lean transportation most of the components can be sourced locally and the overall transportation requirement is significantly lower than alternative systems – offering a lower carbon footprint
Our project and project leads cover applications and locations such as:
Ocean Sun: Global provider of floating PV systems
Ocean Sun experiences high interest for its solution on all continents. Ocean Sun's contracting party, i.e., the customer, can be any party in the upstream value chain but is typical the developer ofthe powersystems.
To meet this demand the company has adopted a scalable business model which leverages Ocean Sun's unique expertise and patent portfolio. In this business model, Ocean Sun can be described as an architect ofthe floating solar powerplant providing the design ofthe system. In addition, Ocean Sun has built up the expertise for mooring and anchoring analysis for each individual site, using advanced modelsimulationsbased onaccurate metocean data. The company earnsitsrevenuesfromlicense fees payable as a one-time fee per Wp ( Watt Peak) installed as well as FEED services connected to the site analysis. The Ocean Sun solution uses readily available materials with the flexibilityto choose between several world-leading suppliers. Installation is carried out by third-party contractors and as the solution is easy to install, this can be performed by a broad range of contractors worldwide.
Geographical reach
The chosen business model enables rapid growth and large-scale installations worldwide. Operating as a technology provider Ocean Sun can collaborate with developers and EPC companies possessing the required skills, experience, and local knowledge needed to realize larger projects. Through its three offices, Ocean Sun currently has more than 50 ongoing discussions at different stages in the project development, amounting to more than 5 GWp of pipeline value, with potential clients all overthe world.
Our current projects and project leads: Ocean Sun is truly a Global Company
Letter from the CEO
2021 was an exciting year in Ocean Sun. Fighting our way through airports during the pandemic, we worked across borders with suppliers, and we designed, assembled, and launched our largest floater ever at the Banja Dam in the Albanian mountains. The beautiful and innovative floater is dominated by the extraordinary large and cool sundeck, measuring almost 4000 sqm. After the grand opening, by the Minister of Energy and other dignitaries, the energy flowed into the Albanian grid. Only a couple of days later a tornado struck the lake, and we received news of severe damage to the floater.
Coming back
Many lessons were learned from the salvage activity and the root cause analysis that followed. I'm very proud that the Ocean Sun team tackled the challenging time. After more than 6 months, all aspects were resolved in orderly fashion together with Statkraft. In the aftermath of the incident, Ocean Sun consulted the best meteorologists to predict the new expected 50-year return winds, leading naval architects were consulted to review design and mooring for the new adverse weather conditions that we now also can expect in Europe. Finally, we are very pleased that a well reputed class society verified the new design.
The process of bringing the project back on track has been thorough, with high focus on assembly, launch and mooring. Ocean Sun personnel and external specialists have followed every step of the processes, and we are now convinced that a similar accident will not happen again. The full-scale demonstrator plant consisting of four rings, a total of 2 MWp, is expected to be finalized in 2022.
Foundation for growth
The present floater in Albania represents a big step towards optimized design. For practical purposes, and easy distribution, the size of each membrane needs to fit in the standard 40-foot container. A special new mooring layout reducing the spacing between rings will increase the power density per surface area.
The first floater out of four is clearly visible on the right side of the road for anyone taking the scenic route along the lake towards the city of Gramsh. Looking over the lake it's not difficult to envisage multiple rings forming a massive power plant, covering only a fraction of the large water surface and with minimal infliction to the surrounding landscape. A high number of researchers and clients have reach out, asking to visit and see.
Bringing value to ideas
Having worked with R&D and inventions in corporate companies since the nineties I acknowledge the importance of patents. Patents, Design and Trademarks are instrumental for justifying large R&D spending. With the exponential growth of floating PV, several new companies are emerging with different technical solutions. In the growing FPV community we welcome all new colleagues and competitors to this promising industry sector. However, we will react if we discover technologies that we believe infringe with our patents. According to IP experts, Ocean Sun is today broadly protected in the most important markets.
A long value chain
About 15 years ago I worked in REC Solar. At the time, this company covered all steps in manufacturing, from producing solar grade silicon, casting of ingots, wafers, cells and PV modules. It even developed PV plants and signed PPAs. It was a great place to learn, and Europe played an important part in the industrialisation. As we all know, manufacturing eventually moved to Asia. Therefore, Ocean Sun is today also present in both Singapore and Shanghai. We need to work closely with high volume supply chain, but also to serve perhaps one of the most important markets for floating PV there. Lately, we also see encouraging signs of that the industry perhaps will expand more in Europe and USA. The industry generates a lot of jobs in nearly every discipline, everything from installing solar modules to research. Local production will shave cost for logistics and make solar an even more obvious choice. The tragic war in Ukraine and potential consequences for traditional fossil fuel distribution will spark policy makers to seek more safe and environmentally friendly energy sources. We know Ocean Sun can make an important contribution to this.
In China we entered a contract with Sunneng Technology and String Capital, to construct a demo system outside the city of Yantai, in Bohay bay. The deal in January 2022 with MP Quantum group in Greece was also a milestone. Another agreement was entered in March 2022 in with Sunseap in Singapore Strait for 1,2 MWp. We are very pleased that large important companies recognise the Ocean Sun technology. Further development near shore to cities will have profound impact on access to affordable and clean energy for a huge population.
With increasing activity, it is important to refine the asset light business model and standardise our product offering. Ocean Sun will focus on the FEED phase, product design as well as local requirements for mooring. In addition, we will assist EPCs and Developers in their work to acquire approved components and to construct the plants. We also assist with commissioning, planned inspections and general O&M. We are also engaged in several R&D programmes with other companies and research institutions. The latter is crucial for further optimisation and continuous improvement.
Lastly, I wish to thank all Ocean Sun employees for the extraordinary efforts the last year. On behalf of Ocean Sun, I extend my thanks to all partners and clients. Unfortunately, shareholders saw dwindling valuation in 2021. However, Ocean Sun is stronger now and we firmly believe better days are ahead.
About the share
Ocean Sun is since 26th of October 2020 listed on Euronext Growth Oslo under the ticker OSUN. The listing price for Ocean Sun was NOK 18.00 per share and the price as of 31 December 2021 was NOK 16.00. The Company has 44,986,200 outstanding shares.The share capital as of 31st of December 2020 amounted to NOK 449,862.
Share information
Financial calendar 2021
| Number of shares; | 44,986,200 | Event | Date |
|---|---|---|---|
| Votes: | 44,986,200 | ||
| Number of |
|||
| shareholders | 1,394 | Q1 Report | 12.05.2022 |
| Listing price | NOK 18.00 | ||
| Highest price 2021 | NOK 57.50 | AGM | 19.05.2022 |
| Lowest price 2021 | NOK 13.14 | ||
| Market cap as of |
Q2 Report/ Half year | 25.08.2022 | |
| 31.12.2021 | NOK 719 779 200 | ||
| Auditor | Ernst & Young AS | Q3 Report | 09.11.2022 |
TOP 20 shareholders
as of 25th of March 2022
| Name | Ownership | Shares |
|---|---|---|
| DR.ING. BØRGE BJØRNEKLETT AS | 20,55 % | 9 242 500 |
| KVANTIA AS | 16,15 % | 7 264 100 |
| PROGRESSI AS | 14,06 % | 6 326 100 |
| UMOE AS | 8,89 % | 4 000 000 |
| INGULSTAD HOLDING AS | 5,69 % | 2 560 500 |
| MP PENSJON PK | 4,49 % | 2 017 966 |
| SAUAR INVEST AS | 3,32 % | 1 492 784 |
| Goldman Sachs & Co. LLC | 2,35 % | 1 057 010 |
| UBS AG | 2,13 % | 959 000 |
| Morgan Stanley & Co. Int. Plc. | 1,57 % | 707 393 |
| CACEIS Bank | 1,37 % | 614 202 |
| CAABY AS | 1,19 % | 535 700 |
| Nordnet Bank AB | 1,14 % | 512 005 |
| The Northern Trust Comp, London Br | 0,93 % | 418 985 |
| Bkraft Holding AS | 0,86 % | 389 000 |
| NORDNET LIVSFORSIKRING AS | 0,77 % | 344 288 |
| Morgan Stanley & Co. LLC | 0,69 % | 309 957 |
| Saxo Bank A/S | 0,60 % | 269 330 |
| J.P. Morgan Securities LLC | 0,56 % | 251 500 |
| FORTE TRØNDER | 0,56 % | 250 000 |
BOARD
Thomas Moe Børseth
Chairman – No. shares: Representing Umoe, 4,000,000
EVP in the investment firm Umoe. Primary focus in renewables and clean tech. Prior to joining Umoe in 2013, he was a management consultant at McKinsey & Company from 2006 to 2012.
PhD in physics from the University of Oslo and Master of Science in applied physics from INSA Toulouse.
Dr. Børge Bjørneklett
Board member – No. shares: 9,444,400
Founder & CEO - Inventor of the patented solution.
20+ years of Tech management experience from automotive, solar and offshore industries, ex. VP of Technology and Innovation Aker Solutions and Technology Manager REC Solar.
Ph.D. Materials Science, NTNU.
Brian Glover
Board member – No. shares: 368,000
Specialized in sustainable investment and has a history as Project Manager for renewable power supply in hydropower, wind, and solar PV. Founded multiple successful small businesses.
Ph. D in hydraulics.
Anne Vera Skrivarhaug
Board member – No. shares: 3.183
Experienced leader with solid international experience of the energy sector from top management positions in NVE and Statkraft in addition to several board engagements.
M. Sc in Energy Management & Policy from L'Institut Francais du Pétrole (L'IFP) and University of Pennsylvania, USA. Business courses at the Wharton School in Pennsylvania.
Kristin Åbyholm
Board member – No. shares: Representing Kvantia (7,264,100) and Caaby (585,700)
15+ years of management and sales experience from ITsolution companies, in addition to board engagements in Halodi Robotics and Skitude.
M. Sc in Data Science from the Norwegian Technical University in Trondheim (NTNU) and an Executive Master from the Norwegian Business School (BI).
MANAGEMENT
Dr. Børge Bjørneklett
Founder & CEO – No. shares: 9,444,400
Inventor of the patented solution.
20+ years of Tech management experience from automotive, solar and offshoreindustries, ex. VP of Technology and Innovation Aker Solutions and Technology Manager REC Solar.
Ph.D. Materials Science, NTNU.
Karl Lawenius
CFO – No. shares: 201,900
6+ years of experience form working with M&A and Business Development related to growth companies on consulting and corporate level.
Master of Science in Industrial Engineering, Chalmers.
Kristian Tørvold
Director NE Asia – No. shares: 201,900
10+ years' experience from energy and offshore industries in NE Asia ex. as Partner in EntryPoint and Finance Manager in Modex Group.
Master of Science in Finance & Economics, Fudan University.
Alexander Telje
CCO – No. shares: 85,000
15+ years with executive experience ex. as General Manager of British American Tobacco in Norway and as Director of Memetor.
MBA Management & Organization, USC.
Are Gløersen
Director SE Asia – No. shares: 201,900
10+ years' experience from solar industry as part of REC Solar. 5+ years of executive experience in SE Asia ex as Director of Tronrud Engineering and CEO of Commlight. Master of Science in Astronautical Engineering, HiN.
Dr. Nenad Keseric COO – No. shares: 600
15+ years of operational and executive experience from the broad energy industry within major international companies like Verbund, Statkraft and Equinor (ex. Statoil) Ph.D. Energy Economics, Vienna University of Technology
Board of the directors' report
Business model and strategy
Ocean Sun has designed and developed a superior technology for floating solar power. The design principle and methodology are broadly patented. Our IP portfolio is partly registered or pending in most of the relevant markets around the world. Ocean Sun does not install, own, or operate the power plants, but is a technology provider offering an approved list of equipment. The company has also developed an efficient methodology for installation, commissioning, as well as O&M and inspections.
The company's main revenue will be license fees from technology licensing agreements and service payments. Ocean Sun also offers Front End Engineering Design (FEED) to prospective customers to help them utilise Ocean Sun's technology Ocean Sun also offers a design solution and access to lists of approved equipment providers and approved installation companies. Several customers are also interested in procuring Front End Engineering Design (FEED) from Ocean Sun to contribute to an efficient decision process. As markets mature and the product becomes better known, the Board expects revenues from license holders to take on a larger and larger share of total revenues, whereas the share related to governmental funded R&D projects will decline correspondingly.
Ocean Sun comprises the parent company in Oslo, and two fully owned subsidiaries registered in Singapore and Shanghai, China.
Outlook
2021 was a year of ups and downs for Ocean Sun. The pilot at the Banja reservoir in Albania was struck by an unexpected tornado in June, resulting in damage to the floater. The incident has been thoroughly investigated both by Ocean Sun and our customer Statkraft, resulting in a number of operational, procedural and design changes have been implemented. Most important is the new meteorological data for the higher 50-year return wind speed. A new ring has been installed at Banja and will soon be operational, and we expect another 3 identical rings to be installed later during 2022.
Covid 19 and the ensuing restrictions on international travel, in particular in Southeast Asia, limited our ability to meet with prospective customers in person. We were still able to sign a ground breaking contracts in Yantai, China (1 MWp). The installation is scheduled for 2022.
Management and the Board of Directors expect that several new markets will be entered for 2022.
The board believes the successful installation and handover of the first production unit in Albania will open the door for other contracts
Moreover, the board believes that both the current global energy crisis as well as global objectives for the reduction of CO2 emissions will drive an even higher demand for renewable energy production. In many countries, we should expect a streamlining and shortening of project approval processes which until now has been a delaying factor on the growth of floating PV.
Financial results.
The 4th quarter 2021 report was the first consolidated report for the Ocean Sun Group. The 2021 full year consolidated financial statement is showing the accounts for both the parent company and the group, compared to 2020 (in brackets). The accounts have therefore been reclassified compared with previous statements.
The consolidated operating income in 2021 amounted to 6.6 mNOK (6.1 mNOK) for the group, and to 6.6 mNOK (6.1 mNOK) for the parent company. The consolidated net loss was -18.8 mNOK (-10.7 mNOK) for the group, and -19.1 mNOK (-10.5 mNOK) for the parent company. The increase in loss is mainly due to increase in R&D and sales activities.
At year-end the group cash amounted to 77 mNOK (95.1 mNOK). Total Equity for the parent company was 81.1 mNOK (100.2 mNOK)
The Ocean Sun Group is now in the demonstration phase for our technology and licence fee income is just beginning to kick in, and is expected to grow in 2022 and going forward.
In accordance with §3-3a of the Norwegian Accounting Act, the Board of Directors confirms that the going concern assumption on which the financial statements have been prepared, is appropriate.
Work Environment
In our opinion, the working environment in the company is good. The company had no work-related injuries in 2021.
Organisation and Equality
The average number of employees in the group was 10 in 2021, 9 male and 1 female. The Board consists of 5 members, 3 male and 2 female.
Environmental
The group is committed to delivering the best floating solar power solutions to meet the needs of its clients for renewable energy production. Our floater solution is considered efficient in minimal use of materials for achieving buoyancy, as well as being efficient in packing of containers.
The incident which caused a failure at Banja caused no injury and has been independently reviewed. Salvage operations are planned, and improvements made to avoid recurrence. The group does not pollute the external environment, apart from necessary travel related activities. Wide use of internet communication is practiced at all levels to minimise necessary travel.
Director and Officer liability insurance.
The company has an international insurance for its directors and executives.
Fornebu 6th of April 2022
Income Statement 2021
Ocean Sun
| Ocean Sun AS | Ocean Sun group | ||||
|---|---|---|---|---|---|
| Currency: NOK | |||||
| 2021 | 2020 Note | 2021 | 2020 | ||
| Income | |||||
| 234 308 | 1 146 349 | 2 | Revenue | 238 398 | 1 146 349 |
| 6 363 593 | 4 982 883 | 2 | Other income | 6 369 932 | 4 987 405 |
| 6 597 901 | 6 129 232 | Total operating Income | 6 608 330 | 6 133 754 | |
| Operating expenses | |||||
| -10 377 583 | -8 474 441 | 3 | Employee cost | -13 889 083 | -10 723 337 |
| -18 072 | -15 099 | Depreciation | -18 072 | -15 099 | |
| -15 307 185 | -8 335 098 | 4 | Other Operating expenses | -11 503 488 | -6 343 372 |
| -25 702 840 | -16 824 638 | Total operating expenses | -25 410 643 | -17 081 808 | |
| Financial income | |||||
| 134 597 | 72 833 | 5 | Interest income | 141 436 | 151 668 |
| 21 531 | 174 977 | 5 | Other financial income | 21 531 | 174 977 |
| 156 128 | 247 810 | Total financial income | 162 967 | 326 645 | |
| Financial expenses | |||||
| -3 803 -99 526 |
-1 453 -74 497 |
5 5 |
Interest expenses | -3 803 -117 990 |
-1 453 -82 793 |
| Other financial expenses | |||||
| -103 329 | -75 950 | Total financial expenses | -121 793 | -84 246 | |
| 52 799 | 171 860 | Net financial items | 41 173 | 242 398 | |
| -19 052 141 | -10 523 546 | Result before taxes | -18 761 140 | -10 705 656 | |
| 6 | Taxes | -3 697 | |||
| -19 052 141 | -10 523 546 | Result after taxes | -18 764 837 | -10 705 656 | |
| -19 052 141 | -10 523 546 | Trasferred to accumulated losses | -18 764 837 | -10 705 656 | |
| -19 052 141 | -10 523 546 | Total transfers and allocations | -18 764 837 | -10 705 656 |
Balance Sheet December 31.2021
Ocean Sun
| Ocean | Sun AS |
Ocean | Sun group |
||
|---|---|---|---|---|---|
| Currency: NOK |
|||||
| 31.12.2021 | 31.12.2020 | Notes | 31.12.2021 | 31.12.2020 | |
| Assets | |||||
| Non-current assets | |||||
| Tangible non-current assets | |||||
| 37 559 | 55 631 | Office equipment | 37 559 | 55 631 | |
| 37 559 | 55 631 | Total- non current assets | 37 559 | 55 631 | |
| Other non-current assets | |||||
| 280 001 | 280 001 | 7 | Investments in Subsidiaries | 0 | 0 |
| 280 001 | 280 001 | Total other non-current assets | |||
| 317 560 | 335 632 | Total non-current assets | 37 559 | 55 631 | |
| Current assets | |||||
| Receivables | |||||
| 0 10 679 457 |
7 326 124 | 10 | Accounts receivables Other receivables |
0 10 761 313 |
0 7 377 667 |
| 10 679 457 | 7 326 124 | 8,9,10 | Total receivables | 10 761 312 | 7 377 668 |
| Cash and equivalents | |||||
| 76 529 588 | 94 950 744 | 11 | Cash and cash equivalents | 76 991 267 | 95 095 959 |
| 76 529 588 | 94 950 744 | Total cash and equivalents | 76 991 267 | 95 095 959 | |
| 87 209 045 | 102 276 868 | Total current assets | 87 752 580 102 473 626 | ||
Balance Sheet December 31.2021
Ocean Sun
| Ocean | Sun AS |
Ocean Sun |
group | ||
|---|---|---|---|---|---|
| Currency: NOK |
|||||
| 31.12.2021 | 31.12.2020 Notes | 31.12.2021 | 31.12.2020 | ||
| Equity and liabilities |
|||||
| Equity | |||||
| Paid in capital | |||||
| 449 862 | 449 862 | 13,14 | Share capital | 449 862 | 449 862 |
| -300 | 0 | 13,14 Treasury shares | -300 | 0 | |
| 128 022 849 | 128 022 849 | 13,14 | Share premium | 128 022 849 | 128 022 849 |
| 128 472 411 | 128 472 711 | Total paid in capital | 128 472 411 | 128 472 711 | |
| Retained earnings | |||||
| 0 | 0 | 13,14 | Translation reserves | 50 645 | -16 146 |
| -47 414 953 | -28 307 012 | 13,14 | Accumulated loss | -47 305 531 | -28 541 868 |
| -47 414 953 | -28 307 012 | Total retained earnings | -47 254 886 | -28 558 014 | |
| 81 057 458 | 100 165 699 | Total Equity | 81 217 525 | 99 914 698 | |
| Liabilities | |||||
| Non-current liabilities | |||||
| 0 | 0 | Other | 0 | 22 049 | |
| 0 | 0 | 0 | 22 049 | ||
| Total long-term liabilities | |||||
| Current liabilities | |||||
| 2 577 992 | 638 849 | Accounts payables | 2 454 949 | 645 598 | |
| 672 695 | 590 159 | Taxes and public duties | 672 695 | 590 159 | |
| 3 218 459 | 1 217 792 16 | Other payables | 3 444 969 | 1 356 755 | |
| 6 469 147 | 2 446 800 | Total current liabilities | 6 572 614 | 2 592 511 | |
| 6 469 147 | 2 446 800 | Total liabilities | 6 572 614 | 2 614 560 | |
| 87 526 605 | 102 612 500 | Total Equity and liabilities | 87 790 139 | 102 529 257 |
Fornebu 6th of April 2022
Cash flow statement Ocean Sun
| Ocean Sun AS | Ocean Sun Group | |||
|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2020 | |
| Operating activities | ||||
| -19 052 141 | -10 523 531 | Result before tax | -18 764 837 | -10 705 656 |
| 18 072 | 15 084 | Depreciations | 18 072 | 15 099 |
| 0 | 10 508 | Change in accounts receivables | -129 845 | 10 508 |
| -3 353 337 | 0 | Change in other current assets | -3 383 645 | 0 |
| 1 939 143 | -118 639 | Change in accounts payable | 1 939 194 | -118 639 |
| 2 083 204 | -4 349 472 | Change in other current liabilities | 2 272 466 | -4 349 472 |
| -18 365 060 | -14 966 050 | Cash flow from operating activities | -18 048 595 | -15 148 160 |
| Investments | ||||
| 0 | -250 001 | Investments in subsidiaries | 0 | 0 |
| 0 | -34 275 | Other investments | 0 | 0 |
| 0 | -284 276 | Cash flow from investment activities | 0 | 0 |
| Finance | ||||
| 0 | 102 016 795 | Proceeds from issuance of share capital | 0 | 102 016 795 |
| 0 | -6 325 506 | Costs associated with share capital increase | 0 | -6 325 498 |
| -56 096 | 0 | Change in other financing activities | -56 096 | 0 |
| -56 096 | 95 691 289 | Cash flow from financing activities | -56 096 | 95 691 297 |
| -18 421 156 | 80 440 963 | Net cash flow in the period | -18 104 692 | 80 543 137 |
| Cash and cash equivalents at the | ||||
| 94 950 744 | 14 509 781 | beginning of the period | 95 095 959 | 14 552 822 |
| Cash and cash equivalents at the end | ||||
| 76 529 588 | 94 950 744 | of the period | 76 991 267 | 95 095 959 |
Note 1 ACCOUNTING PRINCIPLES
Basis for preparations
The annual accounts have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles. This is the first time the company has prepared consolidated accounts. This is done because the company now have 2 fully operational subsidiaries, one in Shanghai, China and one in Singapore. Due to the consolidation the accounts for both 2020 and 2021 are not fully comparable with prior year report. All intercompany transactions have been eliminated for both years.
Sales revenue
The company's main revenue will be license fees from technology licensing agreements and also service revenues related to design, analysis and training. Revenue from license fees is recognized on signing. Services are recognized as revenue as they are provided based. In the case of any sales of goods takes the revenue is recognized at the time of delivery.
Raw materials and consumables
The business model does not include procurement of goods for re-sale. Occasionally the company will buy material for specific projects, based on agreements with customers.
Classification and assessment of balance sheet items
Current assets and current liabilities comprise items related to the ongoing business and development projects. For items other than accounts receivable, items that fall due within one year of the transaction date are included. Fixed assets are assetsintended for permanent ownership and use.
Current assets are valued at the lower of cost and fair value. Short-term debt is recognized in the balance sheet at the nominal amount at the time of establishment.
Fixed assets are valued at cost. Fixed assets are depreciated according to a reasonable depreciation plan. Fixed assets are written down to fair value in the event of impairment that is not expected to be temporary.
Receivables
Accounts receivable and other receivables are stated in the balance sheet at nominal value less provisions for expected losses. Provisions for losses are made on the basis of individual assessments of the individual receivables.
Fixed assets
Tangible fixed assets are capitalized and depreciated over the useful life of the fixed assets if they have assumed a useful life of more than 3 years and have a cost price exceeding NOK 15,000. Direct maintenance of fixed assetsis expensed under operating costs on an ongoing basis, while costs or improvements are added to the cost ofthe fixed asset and depreciated in line with the fixed asset.
Shares in subsidiaries
Shares in subsidiaries are recognised at face value in the parent company and fully eliminated in the Group accounts.
Cash flow statement
The cash flow statement has been prepared according to the indirect method. Cash and cash equivalents include cash, bank deposits and othershort-term, liquid investments.
Government grants
Government grants are accounted for when there is reasonable assurance that the company will meet the conditions associated with the grants, and the grants will be received. For the operating grant, the grant is recognized in the income statement at the same time as, and is classified as, the income it is to increase. The company spends significant resources on R&D activities related with developing its novel technology. For such activities, the company partly rely on grants, which is why such grants are recognized on a gross basis. Government grants recognition is based on the principle Percentage of Completion (PoC) on estimated cost to complete.
In addition,the following accounting principles have been applied:
Depositsinforeigncurrencyarevaluedattheexchangerateattheendofthefinancialyearandthecostmethod is
used forinvestmentsin subsidiaries.
Share-based payments
Some employees of the Company receive remuneration in the form of share-based payments, whereby employees render services as consideration for equity instruments. This program is measured at fair value at the date of the grant. The fair value at the grant date is expensed over the vesting period, based on the Company's estimate of the shares that will eventually vest, adjusted for the effect of non-market based vesting conditions. The fair value share-based program is measured using the Black-Scholes pricing model expensed to employee costs over the vesting period. The expected life used in the model has been adjusted based on management's best estimate for the effects of non-transferability, exercise restrictions and behavioural considerations.
Tax
The tax expense in the income statement includes both the tax payable for the period and the change in deferred tax. Deferred tax is calculated at 22% on the basis of the temporary differences that exist between accounting and tax values, as well astax losses carried forward at the end of the financial year. Tax-increasing and tax-reducing temporary differences that reverse or can reverse in the same period are offset and the tax effectis calculated on the net basis.
Notes to financial statement Ocean Sun
Ocean Sun AS All figures in NOK Ocean Sun group
Note 2: License revenue and other income
| Ocean Sun AS | Ocean Sun group | |||
|---|---|---|---|---|
| 2021 | 2020 | Type of revenue | 2021 | 2020 |
| 234 308 | 1 146 349 | License revenue | 238 398 | 1 146 349 |
| 984 335 | 617 000 | Skattefunn | 984 335 | 617 000 |
| 3 536 115 | 0 | Grants from EU, BOOST Project | 3 536 115 | 0 |
| 1 843 143 | 4 365 883 | Grants from Innovation Norway | 1 843 143 | 4 365 883 |
| 0 | 0 | Other | 6 339 | 4 522 |
| 6 597 901 | 6 129 232 | Total revenue and other income | 6 608 330 | 6 133 754 |
Geographical license revenue
| Ocean Sun AS | Ocean Sun group | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | Type of revenue | 2021 | 2020 | |
| 1 146 349 | Phillippines | 1 146 349 | |||
| 25 000 | 0 | Norway | 25 000 | 0 | |
| 209 307 | 0 | China | 213 398 | 0 | |
| 234 308 | 1 146 349 | Total licens revenue | 238 398 | 1 146 349 |
| Ocean Sun AS | Ocean Sun group | ||||
|---|---|---|---|---|---|
| 2021 | 2020 | Salary and personnel cost | 2021 | 2020 | |
| 8 521 312 | 7 493 631 | Salary | 12 032 812 | 9 742 527 | |
| 1 256 217 | 1 027 665 | AGA (Public charges) | 1 256 217 | 1 027 665 | |
| 430 042 | 152 831 | Pension cost | 430 042 | 152 831 | |
| 170 012 | -199 686 | Other | 170 012 | -199 686 | |
| 10 377 583 | 8 474 441 | Total Salary and personnel cost | 13 889 083 | 10 723 337 |
Note 3: Remuneration
Ocean Sun AS pension scheme is 4 % of annual salary up to 7,1 G (G was NOK 106 399 for 2021) and 10 % of salary between 7,1 G and 12 G
| Renumeration 2021 for CEO and Board members | Salary | Pension | Other |
|---|---|---|---|
| CEO Børge Bjørneklett | 1 599 565 | 29 800 | 28 601 |
| Chairperson, Thomas Børseth | 65 000 | ||
| Board member, Brian Glover | 52 083 | ||
| Total renumeration board members | 117 083 | ||
| Auditor's fee, Ocean Sun AS | 2021 | 2020 | |
| Audit | 215 000 | 38 200 | |
| Other services | 92 398 | 120 502 | |
| Services related to share capital increase | 0 | 93 970 | |
| Total auditor's fee Ocean Sun AS | 307 398 | 252 672 | |
| Number of full-time equivalents | 2021 | 2020 | |
| Ocean Sun AS | 7 | 6 | |
| Subsidiaries | 3 | 1 | |
| Total | 10 | 7 |
Note 4 Other operating expenses
| Ocean Sun AS | Ocean Sun group | |||
|---|---|---|---|---|
| 2021 | 2020 | 2021 | 2021 | |
| 1 004 339 | 602 444 | Facility cost, IT, etc | 1 117 027 | 649 944 |
| 2 206 326 | 825 154 | Legal, auditors, accounting, etc | 2 351 327 | 958 806 |
| 5 057 482 | 2 058 716 | Consultants, testing and patents | 5 057 482 | 2 058 716 |
| 4 508 014 | 2 175 039 | Subsidiaries | 0 | 0 |
| 1 415 089 | 1 405 428 | Materials for development and testing | 1 460 089 | 1 405 428 |
| 1 115 935 | 1 268 317 | Other | 1 517 563 | 1 270 478 |
| 15 307 185 | 8 335 098 | Other operating expenses | 11 503 488 | 6 343 372 |
Note 5 Financial items
| Ocean Sun AS | Ocean Sun group | |||
|---|---|---|---|---|
| 2021 | 2020 | Finance income | 2021 | 2020 |
| 134 597 | 72 833 | Interest income | 141 436 | 151 668 |
| 21 530 | 174 977 | Agio | 21 531 | 174 977 |
| 156 127 | 247 810 | Total Finance income | 162 967 | 326 645 |
| 2021 | 2020 | Finance expenses | 2021 | 2020 |
| -3 803 | -1 453 | Interest Expenses | -3 803 | -1 453 |
| -99 526 | -74 497 | Diagio | -117 990 | -82 793 |
| -103 329 | -75 950 | Total finance expenses | -121 793 | -84 246 |
| Note 6 Taxes |
| Ocean Sun AS | 2021 | 2020 | |
|---|---|---|---|
| This year's loss | -19 052 141 | -10 523 546 | |
| +/- Permanent differences | 2 429 | -6 947 570 | |
| +/- This years change in temporary differences | -27 904 | -4 607 | |
| Tax base of the year | -19 077 616 | -17 475 723 | |
| Tax expenses in the income statement | 0 | 0 | |
| Tax payable in the balance Sheet | 0 | 0 | |
| Ocean Sun Group | 2021 | 2020 | |
| Ocean Sun China Comp. Ltd., Tax expenses in the income statement | -3 697 | 0 | |
| Temporary differences | 31.12.2021 | 31.12.2020 | Change |
| Fixed assets | 37 559 | 9 655 | -27 904 |
| Loss carried forward | -57 875 220 | -37 813 269 | 20 061 951 |
| Net temporary variances | -57 837 662 | -37 803 614 | 20 034 047 |
| Loss carried forward not recognized as DTA | 57 837 662 | 37 803 614 | -20 034 047 |
| Total temporary differences | 0 | 0 | 0 |
| Deferred tax assets 31.12.2021 based on 22 % tax rate | 0 | 0 | 0 |
The Company has NOK 57 875 220 (2020: NOK 37 813 269) of tax losses carried forward. These losses relate to a history of losses, do not expire, and may not be used to offset taxable income elsewhere in the Company. The subsidiaries neither have any taxable temporary difference nor any tax planning opportunities available that could partly support the recognition of these losses as deferred tax assets. On this basis, the Company has determined that it cannot recognise deferred tax assets on the tax losses carried forward.
Note 7 subsidiaries
| Company name | Office | Share | Equity | Net profit |
|---|---|---|---|---|
| Ocean Sun Systems AS | Norway | 100 % | 11 547 | 23 145 |
| Ocean Sun China Co. Ltd | China | 100 % | 336 575 | 298 854 |
| Ocean Sun Pte. Ltd | Singapore | 100 % | 91 000 | 77 037 |
| Ocean Sun Pte. Ltd is owned 100 % by Ocean Sun Systems AS |
Note 8 Intercompany balances
| Ocean Sun AS, debt to: | Balance 31.12.2021 |
|---|---|
| Ocean Sun Pte Ltd | NOK 129 871 |
Note 9 intercompany transactions
Invoices to Ocean Sun AS, from:
The subsidiaries in China and Singapore operates on a cost-plus basis.
| Amount | Net profit | |
|---|---|---|
| Ocean Sun Systems AS | 43 506 | 23 145 |
| Ocean Sun China Co. Ltd | 2 701 342 | 294 854 |
| Ocean Sun Pte. Ltd | 1 870 898 | 77 037 |
Note 10 Accounts receivables and other receivables 2021
| Ocean Sun AS | Ocean Sun Group | |
|---|---|---|
| 7 517 803 | Statkraft* | 7 517 803 |
| 0 | Accounts receivables | 129 843 |
| 1 758 885 | Innovation Norway | 1 758 885 |
| 666 989 | VAT | 666 989 |
| 735 780 | Other | 817 635 |
| 10 679 457 | Total | 10 891 155 |
All receivables are due within a 12-month period
*This is related to the project in Albania
| Ocean Sun AS | Ocean Sun group | ||||
|---|---|---|---|---|---|
| 31.12.2021 | 31.12.2020 | 31.12.2021 | 31.12.2020 | ||
| 604 899 | 500 099 | Restricted cash* | 604 899 | 500 099 | |
| 221 760 | 233 082 | Bank Guarantee ** | 221 760 | 233 082 | |
| 75 702 929 | 94 217 563 | Cash | 76 164 608 | 94 362 778 | |
| 76 529 588 | 94 950 744 | Cash and bank deposits | 76 991 267 | 95 095 959 |
Note 11 Cash and Bank deposits
*Restricted cash is reserved withholding tax related to employees
**Albania project, Euro 22 201
Note 12 Patents and Trademarks
The parent company has registered the technology patents in 30 courtiers and with 44 pending applications
Ocean Sun has also filed Design registration and Trademark Registration in selected countries
Note 13 Share capital and shareholders information
| Number of shares | ||||
|---|---|---|---|---|
| Ocean Sun AS | Share capital | 44 986 200 | ||
| Ocean Sun AS stock of treasury shares pr. 31.12.2021 | 30 000 | |||
| Nominal value per share | 0,01 | |||
| Shareholders pr 31.12.2021 | Total | Ownership interest |
Voting rights |
| Total | 44 986 200 | 100 % | 100 % |
|---|---|---|---|
| Other | 8 825 436 | 19,62 % | 19,62 % |
| UBS AG | 759 000 | 1,69 % | 1,69 % |
| CACEIS Bank | 895 204 | 1,99 % | 1,99 % |
| Sauar Invest AS | 1 507 534 | 3,35 % | 3,35 % |
| Goldman Sachs & Co. LLC | 1 587 860 | 3,53 % | 3,53 % |
| MP Pensjon PK | 2 017 966 | 4,49 % | 4,49 % |
| Ingulstad Holding AS | 2 560 500 | 5,69 % | 5,69 % |
| UMOE AS | 4 000 000 | 8,89 % | 8,89 % |
| Progressi AS | 6 326 100 | 14,06 % | 14,06 % |
| Kvatia AS | 7 264 100 | 16,15 % | 16,15 % |
| Dr.Ing. Børge Bjørneklett AS | 9 242 500 | 20,55 % | 20,55 % |
Note 14 Equity
| Ocean Sun AS | Share Share capital premium |
Accumulated | ||
|---|---|---|---|---|
| loss | Total equity | |||
| Equity 01.01.2021 | 449 862 | 128 022 849 | -28 307 012 | 100 165 699 |
| Result after tax | -19 052 141 | -19 052 141 | ||
| Change in treasury shares | -300 | -55 800 | -56 100 | |
| Equity 31.12.2021 | 449 562 | 128 022 849 | -47 414 953 | 81 057 458 |
| Share | Accumulated | |||
|---|---|---|---|---|
| Ocean Sun Group | Share capital | premium | loss | Total equity |
| Balance as of 01.01.2021 | 449 862 | 128 022 849 | -28 558 014 | 99 914 698 |
| Change in treasury shares | -300 | -55 800 | -56 100 | |
| Currency translation difference | 123 764 | 123 764 | ||
| Result after tax | -18 764 837 | -18 764 837 | ||
| Equity 31.12.2021 | 449 562 | 128 022 849 | -47 254 887 | 81 217 525 |
Note 15 Share-based payments
On 15 December 2021 the board of directors granted a total of 118,956 share options to employees. Each share option gives the right to subscribe for and be allotted one share in Ocean Sun AS. The strike price of the options is set to NOK 15.2 per share, which was a 10% premium over the volume weighted average share price over the five last trading days preceding the grant date. The options will lapse if not exercised by 15 December 2026. The option grant is divided into two tranches whereby 40% vests after two years and 60% vests after three years. Further, the options are capped at three times the strike price. The terms of the options granted are in accordance with the terms presented for Ocean Sun's extraordinary general meeting held on the 11th of October 2021. Following the grant, the number of outstanding options amounts to 0.26% of the total amount of outstanding shares in Ocean Sun AS.
| Employee Options | Number of shares |
Grant date | Vested dated |
|---|---|---|---|
| 3 employees have been granted share options, strike price NOK 15,2 | |||
| Last date to exercise the option (1st tranche) | 47 582 | 15.12.2021 | 15.12.2023 |
| Last date to exercise the option (2nd tranche) | 71 374 | 15.12.2021 | 15.12.2024 |
| Total options | 118 956 |
Calculation of the value of the option:
The basis for the valuation model consists of several factors which affects the calculated fair value of granted options.
The assumptions* used in the calculation are:
| Ocean Sun AS | 2021 |
|---|---|
| Price at grant date | 13,62 |
| Exercise price | 15,2 |
| Option life | 3,6 |
| Risk-free interest rate | 1,33 % |
| Volatility | 48 % |
| Dividend | 0 |
The weighted average remaining contractual life for the share options outstanding as at 31
*Weighted average parameters at grant of instrument
Note 16 Other payables
| Ocean Sun AS | Ocean Sun group | |
|---|---|---|
| 31.12.2021 | 31.12.2021 | |
| 1 819 603 | Prepayment. Government grants from EU BOOST Project | 1 819 603 |
| 690 386 | Holiday allowance | 690 386 |
| 359 402 | Employee bonuses | 359 402 |
| 292 382 | AGA (Public charges) | 292 382 |
| 56 686 | Other | 283 196 |
| 3 218 459 | Other payables | 3 444 969 |
Statsautoriserte revisorer Ernst & Young AS
Dronning Eufemias gate 6a, 0191 Oslo Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA Tlf: +47 24 00 24 00
www.ey.no Medlemmer av Den norske Revisorforening
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of Ocean Sun AS
Opinion
We have audited the financial statements of Ocean Sun AS (the Company), which comprise the financial statements of the Company and the consolidated financial statements of the Company and its subsidiaries (the Group). The financial statements of the Company and the Group comprise the balance sheet as at 31 December 2021, the income statement and cash flows statement for the year then ended, and notes to the financial statements, including a summary of significant accounting policies.
In our opinion the financial statements comply with applicable legal requirements and give a true and fair view of the financial position of the Company and the Group as at 31 December 2021 and their financial performance and cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor's responsibilities for the audit of the financial statements section of our report. We are independent of the Company and the Group in accordance with the requirements of the 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.
Other information
Other information consists of the information included in the annual report other than the financial statements and our auditor's report thereon. Management (the board of directors and the CEO) is responsible for the other information. Our opinion on the financial statements does not cover the other information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information, and, in doing so, consider whether the board of directors' report contains the information required by legal requirements and whether the other information is materially inconsistent with the financial statements or our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the work we have performed, we conclude that there is a material misstatement of this other information or that the information required by legal requirements is not included, we are required to report that fact.
We have nothing to report in this regard, and in our opinion, the board of directors' report is consistent with the financial statements and contains the information required by applicable legal requirements.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company's and the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or the Group, or to cease operations, or has no realistic alternative but to do so.
Auditor's responsibilities for the audit of the financial statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor's report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain professional scepticism throughout the audit. We also:
- Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.
- Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an 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.
- 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.
- Evaluate the overall presentation, structure and content of the financial statements, including the disclosures, and whether the financial statements represent the underlying transactions and events in a manner that achieves fair presentation.
- Obtain sufficient appropriate audit evidence regarding the financial information of the entities or business activities within the Group to express an opinion on the consolidated financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.
We communicate with the board of directors regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identify during our audit.
Oslo, 6 April 2022 ERNST & YOUNG AS
The auditor's report is signed electronically
Thomas Embretsen State Authorised Public Accountant (Norway)