Annual report 2020
Extending the ocean potential 1
Extending the ocean potential
Annual Report 2021
Annual report 2021
Extending the ocean potential 2
Table of Contents
01 THIS IS SALMON EVOLUTION
Letter from CEO ……………………………………………………………………………… 7
Company description ………………………………………………………………………. 9
Markets ………………………………………………………………………………………… 16
Business Plan and Strategy ………………………………………………………………… 18
02 ESG IN SALMON EVOLUTION
Environment ...…………………………………………………………………………………. 23
Social ....………………………………………………………………………………………… 32
Governance .……………….…………………………………………………………………. 37
03 GROUP RESULTS
Board of Directors Report …………………………………………………………………… 38
Salmon Evolution ASA Consolidated Financial Statements ………………………….. 60
Salmon Evolution ASA Financial Statements …………………………………………….. 99
Statement of Responsibility …………………………………………………………………. 117
Auditor’s Report ……………………………………………………………………………..... 118
Sustainability Indicators & GRI index ……………………………………………………… 122
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This is Salmon Evolution
A Norwegian salmon farming company targeting a global leading position in sustainable
production of high-quality salmon from land-based facilities.
• Utilizing a hybrid flow-through (“HFS”) system with 30%-35% fresh seawater intake,
reducing complexity and biological risk and securing optimal growth at low cost
• First grow out production facility under construction at Indre Harøy in Norway, with
annual harvesting capacity of 31,500 tonnes HOG fully developed
• Joint venture with Dongwon Industries for a 16,800 tonnes HOG production facility in
South Korea – planned construction start in 2022 and first grow-out production
targeted in 2024
• Defined pipeline for ~24,000 tonnes capacity by 2024, clear roadmap for 70,000 by
2030
• Listed on Oslo Stock Exchange main list from July 2021
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Extending the ocean potential 4
Key figures
Indre Harøy drone picture January 2022
_____________________________________________________________________________
1. As per April 2022
2. Cash at hand plus committed undrawn credit facilities as per 31 December 2021
3. As per 31 December 2021
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Extending the ocean potential 5
Conservative approach in a “disruptive industry”
South Korea project illustration (Source: Dongwon)
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Extending the ocean potential 6
Roadmap to 70,000 tonnes in 2030
Salmon Evolution targets a leading position in
the production of sustainable high-quality
salmon from land-based facilities. In addition to
its 31,500 tonnes project Norway, the company
has international ambitions. Through utilisation of
technology, competence and experience from
domestic projects, Salmon Evolution aims to
develop projects in targeted growth markets in
collaboration with local partners. The Company
has a clear road map towards +70,000 tonnes
production capacity by 2030 and is already on
track for ~24,000 tonnes by 2024.
Roadmap towards +70kt HOG annual harvest
Indre Harøy fully developed
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Extending the ocean potential 7
Letter from the CEO
2021 was indeed a ground-breaking year for
Salmon Evolution. Going into the year the
organization totalled 12 employees, the
construction work at the building site had just
started to become visible and a significant
amount of financing was needed to successfully
complete phase 1 at Indre Harøy.
The contrast to today could not have been
larger. As we speak, we have about 100,000 fish
swimming in our first fish tank, being carefully fed
and monitored by our highly capable
organization now totalling 47 people for the
group. Over the coming months we will
gradually ramp up production with 4 additional
smolt releases planned throughout 2022 and
with the first salmon planned harvested in Q4
2022.
During 2021 we raised over NOK 1.2 billion in
equity and debt ensuring a fully funded platform
for our committed projects. We further initiated
our international expansion through the
formalization of a joint venture with Dongwon
Industries for a 16,800 tonnes HOG land-based
salmon farming facility in South Korea. Another
major milestone was the acquisition of Kraft Laks,
securing in-house smolt supply from a producer
with several decades of operational track
record.
Throughout 2021 we also spent a lot of resources
in building an organization to ensure that we are
well prepared and trained as we enter the
operational phase. I am very pleased to see that
Salmon Evolution is regarded as an attractive
employer in our region, demonstrated by our
ability to recruit tier 1 personnel across all areas
of our operation. In this process we have clearly
seen the benefit of being located where we are,
with solid access to a highly competent
workforce both within traditional aquaculture
industries as well as advanced processing
industries.
When now entering the operational phase, we
remain committed to our strategy of putting
biology first. This means that fish biology and fish
welfare will be the overriding principle in all we
do as we strive for operational excellence
throughout the value chain. We are confident
that this strategy will yield solid long term returns
and pave the way for a new age in the salmon
farming industry as we demonstrate proof of
concept.
Salmon Evolution remains positive to the long-
term demand for salmon and even though the
current global geopolitical situation creates
some uncertainties, we think the need for
resource efficient production of animal proteins
will only increase in the years to come. This
should ultimately benefit the salmon relative to
many other protein sources, given its low feed
conversion ratio, high nutrition content, short
production cycle and low environmental
footprint.
Additionally, there are significant challenges
growing the supply side using conventional
methods, from both a biologically, sustainability
and regulatory perspective. Thus, the
opportunity to produce salmon on land at an
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Extending the ocean potential 8
industrial scale is greater than ever and Salmon
Evolution aims to be the driving force for this
globally in the years to come.
This year we are also proud to include an
integrated ESG section in our annual report. This
is an area which is highly important to Salmon
Evolution and as we move forward and start
getting operational data, we will continuously
work to further improve and expand our ESG
reporting.
It has been a rewarding long journey since the
company first was founded back in 2017 and we
are very grateful for all the support shown by our
stakeholders. Seeing our beautiful salmon
thriving and growing at our ground-breaking
facility at Indre Harøy is truly inspiring for the
whole organization and strengthening our belief
that we are actively taking part in defining the
future of salmon farming.
Håkon André Berg
CEO, Salmon Evolution
Filling of seawater in first fish tank, Indre Harøy January 2022
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Extending the ocean potential 9
Company description
Our story
Salmon Evolution was established in 2017 to
pursue salmon farming on land. As a member of
the Norwegian aquaculture cluster, the
company has unmatched access to fresh
seawater, expertise, renewable energy, and an
established infrastructure. We emphasise
efficient and low risk operations, fish welfare and
minimal environmental impact. Using clean
water from the coast the company creates
optimal farming and environmental conditions,
better growth and shorter production time.
Treating wastewater and reusing marine
resources will help minimise our environmental
footprint.
In July 2018, Møre og Romsdal county council
awarded the company with a licence for the
planned facility at Indre Harøy. This permits a
maximum standing biomass of 13,300 tonnes of
salmon and an annual output of 31,500 tonnes
HOG, which corresponds to about 150 million
salmon meals per year.
In January 2019 the company raised and
secured NOK 50 million through a private
placement with strong local industrial
ownership. Further, in March 2020 the company
raised NOK 258 million through another private
placement where new and existing industrial
owners made a continued commitment.
The company raised a further NOK 50 million in
July 2020 through a private placement directed
towards Dongwon Industries. Another NOK 500
million in equity was raised in September 2020
ahead of the company’s listing on Euronext
Growth.
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Extending the ocean potential 10
In March 2021 Salmon Evolution entered into a
joint venture with the South Korean seafood
giant Dongwon Industries called K Smart
Farming. The joint venture company will build
and operate a 16,800 tonnes HOG land-based
salmon farming facility on the east coast of
South Korea.
Also in March 2021, the company raised another
NOK 500 million in equity and announced that it
would apply for a listing on the main list at Oslo
Stock Exchange.
In June 2021 Salmon Evolution raised further
capital through the signing of a NOK 625 million
debt financing package with Nordea,
Sparebanken Vest, Eksfin and Innovation
Norway and in July another major milestone was
reached when the Company’s shares were
listed on the Oslo Stock Exchange main list.
As part of the preparations for production start
at Indre Harøy, in August 2021 Salmon Evolution
acquired Kraft Laks AS, a family owned smolt
producer, and thereby securing inhouse supply
of smolt. The purchase price was paid partly in
cash, new shares in Salmon Evolution ASA and
via a sellers credit.
The company also entered a strategic feed
partnership with Cargill in October 2021 where
Salmon Evolution will be their global flagship
customer for land-based full grow out
production. Under the agreement, Cargill will
supply 100% of Salmon Evolution's feed volumes
for the Indre Harøy facility.
Cargill further committed to allocate significant
resources and R&D capacity with the ambition
of developing sustainable feed solutions tailored
to Salmon Evolution's operational targets,
securing high biological performance and
premium product quality.
As part of the agreement Salmon Evolution
carried out a USD 5 million private placement
towards Cargill.
Cargill Florø (Photo Cargill)
In March 2022 the company commenced
production with the release of its first smolt at the
Indre Harøy facility. Over the coming months
and quarters the company will gradually ramp
up production and first harvest is expected late
2022. Phase 1 will have a production capacity
of 7,900 tonnes HOG and fully developed, Indre
Harøy will have a production capacity of 31,500
tonnes HOG. The facility’s location ensures that
it can adopt the most suitable technology for
farming fish on land using a hybrid flow-through
system (HFS).
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Kraft Laks
On 16 August 2021 Salmon Evolution
announced that the company had entered into
an agreement to acquire Kraft Laks AS (“Kraft
Laks”), a family-owned smolt producer located
in Dalsfjorden in Volda municipality. Kraft Laks
currently has an annual production of around
1.8 million smolt p.a. but has a license to
produce 5 million smolt p.a. subject to certain
conditions.
Kraft Laks has a documented track record as a
high quality smolt producer and the facility has
been producing smolt since 1995 under the
ownership of the selling family. Over the last
years the majority of the smolt produced has
been sold to one of the major salmon farmers.
One of the main advantages with Kraft Laks is
the company’s excellent freshwater supply.
From 3 inlet stations (2 rivers) Kraft Laks has rich
access to clean freshwater from the surrounding
mountains. In addition, a royal resolution secures
minimum freshwater supply from the local hydro
power plant at all times.
The good freshwater access has enabled Kraft
Laks to utilize a production technology similar to
Salmon Evolution’s hybrid flow-through system
(HFS) with reuse of water, CO2 stripping and
oxygenation, making Kraft Laks an ideal fit for
Salmon Evolution.
The acquisition of Kraft Laks gives Salmon
Evolution full operational control over the crucial
parts of the value chain and secures in-house
supply of smolt for phase 1 at Indre Harøy. In the
evaluation leading up to the acquisition, Salmon
Evolution also identified significant expansion
opportunities for Kraft Laks which, if realized, is
expected to cover Salmon Evolution’s smolt
needs for at least phase 2 at Indre Harøy.
Kraft Laks smolt facility
Photo: Salmon Evolution
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Extending the ocean potential 12
High quality smolt is a critical foundation for any
successful salmon farming operation, and
Salmon Evolution sees a strong strategic
rationale in acquiring a well-established smolt
producer in close proximity to the site at Indre
Harøy, dedicated in providing the company
with the best possible smolt.
The acquisition of Kraft Laks was the result of a
thorough process where Salmon Evolution has
evaluated a number of alternatives for sourcing
of smolt. The company is confident that
acquiring an existing operation with
documented track record has a significant risk
mitigating effect. It also provides flexibility with
respect to the production plan at Indre Harøy
and it does so in a cost and capex effective
manner.
Kraft Laks has for many years had a stable and
strong financial performance. The purchase
price for the shares in Kraft Laks was NOK 76.5
million, based on an enterprise value of NOK 70
million on a cash and debt free basis. This equals
an EV/EBITDA multiple of 7x based on average
EBITDA for the last 3 years.
The purchase price of NOK 76.5 million was
agreed settled as follows as follows:
• NOK 16.6 million in the form of new
Salmon Evolution ASA shares at a
subscription price of NOK 7.5775 per
share which equalled the volume
weighted average price the last 20 days
prior to the transaction. As a result,
Salmon Evolution issued 2,190,694 new
shares to the previous Kraft Laks owners.
These shares are subject to a 12-month
lock-in.
• NOK 35 million was paid in cash at
closing
• NOK 24.9 million as a sellers credit with
maturity after 12-18 months
K-Smart Farming
The company has also entered a joint venture
with the South Korean seafood giant Dongwon
Industries to develop, construct and operate a
16,800 tonnes HOG land-based salmon farming
facility in South Korea using Salmon Evolution’s
technology and competence.
The joint venture will be named K Smart Farming
(“K Smart”). The project will be completed in two
phases, with each phase aiming to achieve an
annual capacity of 8,400 tonnes HOG, 16,800
tonnes combined. Total project cost for phase 1
including capex, project management,
contingencies and working capital build up, is
estimated to NOK 1.6 billion.
Under the terms of the Joint Venture agreement,
Dongwon Industries will facilitate debt financing
for K-Smart and Salmon Evolution’s total equity
contribution for 49% ownership is estimated to
about NOK 200 million on a fully funded basis.
Phase 2 of the project is planned financed
through a combination of bank debt and
retained earnings.
Salmon Evolution’s equity contribution will be
split in milestone driven tranches, reflecting the
overall progress of the project. Salmon Evolution
executed its first tranche of close to NOK 30
million in April 2021. Together with Dongwon’s
initial equity investment into K Smart, the
proceeds will be used to finance: (i) design and
engineering, (ii) site evaluation and permitting,
(iii) acquisition of an existing and operating smolt
facility in Jeongseon of which closing has
already taken place and (iv) general corporate
purposes.
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Extending the ocean potential 13
Salmon Evolution and Dongwon target
construction start during 2022, with
commencement of grow out production in
2024. The parties have identified a production
site in Yangyang on the northeast coastline of
South Korea with solid data points on water
quality and temperatures.
As part of the collaborations, the parties will
cooperate to establish branding and marketing
of premium, land-based Atlantic salmon from K-
Smart and Salmon Evolution in the Korean
market. K Smart will be responsible for all
development-costs and investments related to
the project.
The Joint Venture agreement also contains a
comprehensive set of corporate governance
principles, aimed at serving as a solid foundation
for a long-term partnership between Salmon
Evolution and Dongwon.
The two parties will further jointly consider future
opportunities for scaling similar projects in other
attractive markets in the region.
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Extending the ocean potential 14
Our Technology
Salmon Evolution is founded on the belief that
good biology equals good economy. This belief
has been essential when developing the
production methods and technology that are to
be applied in the company’s land-based
salmon farming facilities.
Salmon Evolution’s hybrid flow-through system
(HFS) technology ensures rich access of fresh
filtered seawater while at the same time
reducing energy consumption by reusing
around 65% of the water.
A reusage level of around 65% is in the
company’s view a “sweet spot” balancing cost
and operational risk. Higher reusage levels
require the introduction of more filtration and
water treatment and lead to an exponential
increase in risk. On the other hand, a lower level
of reusage will lead to significantly higher energy
costs in connection with pumping and heating
of water.
At Indre Harøy the seawater intake is based on
two intake pipes at 25 meters and 95 meters,
respectively, enabling the company to tap into
ideally tempered water and hence reducing
energy costs in connection with the heating of
seawater.
The water intake is further filtered and treated
with UV to eliminate parasites, sea lice, viruses,
and particles. This ensures a rich flow of fresh and
clean seawater into the fish tanks.
To ensure optimal biological and growth
conditions in the fish tanks, oxygen and CO2
levels are constantly monitored and adjusted.
Each of Salmon Evolution fish tanks represents
an individual biological zone, meaning that
water in one tank never mixes with water in other
tanks. This again serves as a significant risk
reducing measure in case of deceases etc.
where a potential outbreak in one tank never
can contaminate the fish swimming in the other
tanks.
As part of Salmon Evolution commitment to a
truly sustainable production and circular
economy, waste is filtered and collected,
before being transported to a recirculation
plant where it is converted into fertilizer, biogas
or similar.
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Extending the ocean potential 15
Our Vision
Extending the ocean potential
Responsible, competent and innovative
Our concept is based on preserving and reusing
marine resources and minimising our
environmental footprint.
Farming fish on land, with each tank as a
defined and isolated biological zone, gives us
full control of water parameters and the
production environment in order to eliminate
lice and other parasites as well as minimising
infection risk.
A closed system also means that there is minimal
risk of escapes.
The use of clean and fresh seawater as the
primary water treatment element, combined
with reuse of water to facilitate stable and ideal
temperatures in a highly energy efficient
manner, reduce operating risk and maximise
output from the farm. That contributes to
competitive operating costs, even compared
with conventional farming.
Our energy plant has a very high output in
relation to the energy used. It ensures an optimal
and stable temperature which contributes to
better fish health and increased growth.
Treating wastewater and reusing fish sludge to
produce for example biogas and short-travelled
fertiliser are among our contributions to a
circular economy.
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Extending the ocean potential 16
Markets
Overall description
Salmon Evolution targets to play a significant
role in the global salmon industry, and to be a
driving force in the development of land-based
salmon farming. Global production of Atlantic
salmon reached about 2.9 million tonnes LW in
2021. This represents almost a doubling over the
last decade and a yearly growth of 6.4% since
2010.
The salmon industry has for many years
benefitted from several major global macro
trends that have led to a significant demand
growth, hereunder increased global population
and a growing middle class, increased focus on
eating healthy food, and resource efficient and
climate friendly food production.
Global supply of Atlantic salmon has seen an
impressive increase over the last decades, but in
recent years the growth has come significantly
down. The reason for this is that the industry has
reached a production level where biological
constraints put limit to further growth.
Looking ahead for the next decade, a 3–7%
yearly growth in salmon demand implies a total
demand of around 3.8-5.3 million tonnes by 2030
which represents an increase of around 0.9-2.4
million tonnes LW compared to current
production.
This strong demand outlook combined with the
challenges conventional farming has had
growing the supply side, have led to the
development of new production methods such
as land-based, offshore and ocean based
closed systems. Conventional farming will play a
key role in the salmon farming industry for many
years to come, but other production methods
such as for example land-based farming will
likely be necessary to serve the steadily
increasing demand for Atlantic salmon.
Source: Pareto Securities, Salmon Evolution
0
1 000
2 000
3 000
4 000
5 000
6 000
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025 2026 2027 2028 2029 2030
World production of Atlantic Salmon (LW, '000 tonnes)
Actual supply 3% growth p.a. 5% growth p.a. 7% growth p.a.
6.4% CAGR 2010-2021
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Extending the ocean potential 17
Competitive landscape and market opportunities
Norway is by far the largest producer of Atlantic
salmon today with a market share of about 50%
followed by Chile at around 25%. Common for
both is that most of their production is exported,
with a significant portion of the volume being
sold fresh to overseas markets requiring
airfreight.
Transportation of salmon via airfreight is
expensive and the rise of land-based salmon
farming enables production in end-markets and
thereby eliminating the need for airfreight. This
creates a foundation for additional margins as
pricing for in-market produced fish will likely be
benchmarked with imported fish.
Salmon Evolution has significant international
ambitions and the joint venture with Dongwon
Industries is a strong demonstration of this.
However, Salmon Evolution acknowledges the
challenges of producing fish on land, which is
reflected in the company’s choice of
technology, hereunder our hybrid flow-through
system (HFS).
Salmon Evolution also acknowledges that
building a land-based salmon farming facility is
a complex process which is why our first facility
is being built in Norway in the middle of the
aquaculture cluster to serve as a best practice
facility when expanding abroad. Finally, when
expanding internationally, Salmon Evolution is
confident that project execution can both be
fast-tracked and significantly de-risked by
teaming up with strong local partners, such as
Dongwon Industries.
Dongwon Industries processing plant in Busan, South Korea
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Extending the ocean potential 18
Business plan and strategy
Goals and ambitions
Salmon Evolution’s goal is to become a globally
leading producer of land-based Atlantic
salmon. The company is focused on extending
the ocean’s potential by transferring the best
preconditions offered by the sea to farm fish on
land through its hybrid flow-through system (HFS)
technology. This secures a truly sustainable
production process with controlled and optimal
growth conditions and limiting operational and
biological risk.
Strategic priorities and opportunities
Salmon Evolution already has a tangible
pipeline of close to 50,000 tonnes HOG through
its projects at Indre Harøy (31,500 tonnes) and K
Smart (16,800 tonnes). Through further
expansions the company targets a production
capacity of 70,000 tonnes by 2030.
While further growth is important, the company’s
core near term focus is to secure optimal project
execution of the projects at Indre Harøy and in
Korea as well as a successful production ramp-
up at Indre Harøy. Over the past year significant
resources have been devoted to growing the
organization, establishing quality and control
systems as well as establishing a digital
infrastructure ahead of our first smolt release
which took place in March 2022. Salmon
Evolution also has strong ambitions as to the
commercial aspect of fish farming, hereunder
sale and distribution. The high degree of fresh
seawater usage in our production combined
with optimal growth conditions in our tanks are
expected to result in a healthy and tasty fish with
a firm texture which provides a solid foundation
for establishing a good reputation in the market.
The environmental aspect of our production
with a closed system production method,
collection and recirculation of waste, no sea lice
and minimal risk of escapes also have some very
attractive attributes that warrants a price
premium in the market. During 2022 Salmon
Evolution will further intensify its commercial
efforts in preparation for first harvest late 2022
Capital strategy/priorities and funding
The company will in the coming years actively
seek to optimize its capital structure and have a
balanced mix of equity and debt. Although
land-based salmon farming to a large extent
have had to mainly rely on equity financing in
the past, the company sees increasing appetite
amongst banks for more traditional bank debt
financing structures. Nevertheless, banks
appear conservative and selective which is
reflected in moderate loan to values.
Going forward and along with land-based
salmon farming facilities commencing
operations and obtaining proof of concept, the
company believes this positive trend will
continue and eventually also facilitate higher
loan to values which again will facilitate further
growth.
Salmon Evolution also sees interesting
opportunities for alternative financing structures,
for example through partnerships such as K
Smart. This and similar structures represent a
capital efficient way of growing production
while at the same time scaling and leveraging
the organization’s competence and knowhow.
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Extending the ocean potential 19
Management
General comments on experience and competence
The company have a dedicated management team with extensive experience from the
aquaculture industry, and a well-developed organisation with the necessary competence and
execution capabilities.
Roles and CV’s
Håkon André Berg, CEO
Håkon André Berg became our CEO in
the spring of 2020 after serving as CFO
from November 2019.
With a background in management of
strategy and business development, he
has extensive industrial and financial
experience and expertise from various
private-equity related companies.
That includes ~15 years of experience
in finance, including as a partner in the
private equity companies Broodstock Capital Partners and Midvestor
Management. He has been an associate at Argentum Private Equity and an
analyst at Bridgehead Corporate
Finance. In addition, he has held
board appointments at a number of
companies in the aquaculture sector.
Berg has a BSc in business economics
from the BI Norwegian Business School,
and MSc studies specialising in finance
at the Norwegian School of Economics
(NHH).
Berg owns 450,000 shares and holds
3,000,000 share options in Salmon
Evolution (directly or indirectly through
Carried Away AS).
Trond Håkon Schaug-Pettersen, CFO
Trond Håkon Schaug-Pettersen took
over as our CFO on 1 January 2021.
He brings extensive experience from
both the salmon industry and the
capital market. Prior to joining Salmon
Evolution he served over 4 years as
Senior Vice President Finance and
Business Development at Hofseth
International.
Before joining Hofseth International,
Schaug-Pettersen worked for nine
years as an investment banker at
Swedbank/First Securities advising
Norwegian and international
companies on IPOs, equity and debt
capital raisings, M&A, strategy and
restructurings.
Schaug-Pettersen has a BSc in
Economics and Business Administration
from the NHH Norwegian School of
Economics.
Schaug-Pettersen owns 400,000 shares
and holds 2,400,000 options in Salmon
Evolution.
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Extending the ocean potential 20
Ingjarl Skarvøy, COO
Ingjarl Skarvøy is one of our founders
and served as our first CEO. He has
more than 30 years of experience from
the aquaculture sector, including
regional manager for Salmar Farming,
CEO of Salmar Rauma and regional
manager for Pan Fish Norway.
Skarvøy owns 1,800,150 shares and
holds 750,000 share options in Salmon
Evolution (directly or indirectly through
Terra Mare AS).
Kamilla Mordal Holo, Chief Project Officer
Kamilla Mordal Holo has 16 years of
experience from the construction
sector, including the post of project
manager at the Norwegian Public
Roads Administration responsible for
the highway network in Møre og
Romsdal county. She has also been
project and construction manager at
engineering and consultancy
company 3S Project.
Mordal Holo has an MSc in civil and
environmental engineering from the
Norwegian University of Science and
Technology (NTNU).
Mordal Holo owns 160,060 shares and
holds 750,000 share options in Salmon
Evolution (directly or indirectly through
C10 Holding AS).
Odd Frode Roaldsnes, CCO & Head of Asia
Odd Frode Roaldsnes joined Salmon
Evolution in 2021 and brings extensive
experience from the salmon industry.
Prior to joining Salmon Evolution he held
the position as sales director and
partner at Ocean Supreme, a salmon
exporter based in Ålesund.
His background is within the areas of
management, business development
and downstream operations where he
has primarily been focusing on the
Asian markets the last 15 years.
Roaldsnes holds 750,000 share options
in Salmon Evolution.
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Extending the ocean potential 21
ESG IN SALMON EVOLUTION
Salmon Evolution is a salmon farming company
focused on transferring the best preconditions
offered by the sea to farm fish on land. Our
hybrid flow-through system (HFS) technology
secures a truly sustainable process with
controlled and optimal growth conditions while
limiting operational and biological risk.
We are committed to ensure that we are a
responsible business and that we are sustainable
in our operations and in everything we do. This is
enshrined in our vision:
“EXTENDING THE
OCEAN POTENTIAL”
We build sustainability and social responsibility
into the core of our business. Our commitment is
integrated into every part of Salmon Evolution’s
business model and implemented through our
ethical guidelines. It is our firm belief that
responsible and sustainable business behaviour
contributes to better environmental, social,
organisational, and financial results.
In our view, Salmon Evolution has a high
potential to produce what the market
demands: a fresh, healthy, and sustainable
premium product. With the use of the HFS
technology, we farm our salmon in a closed
system with minimal impact on the environment,
whilst providing the best conditions for optimal
fish welfare.
We have created a truly sustainable approach
to producing the world’s best and healthiest
protein.
ESG Reporting
This is our second annual report published and
the first annual report with explicit
Environmental, Social, and Governance (ESG)
factors included. Our report is created with
reference to the Global Reporting Initiative (GRI)
Standards. Although we are not yet operational
and therefore not able to comply fully with the
GRI, we have had great ambitions in this area
from the very beginning.
We have committed to establish plans for ESG
monitoring to allow for comprehensive ESG
reporting even before our first year of
operations. We are consistently striving to gather
and transparently present our information at the
highest level of quality possible, with principles
of:
▪ Accuracy
▪ Balance
▪ Comprehension
▪ Timing
▪ Reliability
For our 2021 report, we are not able to include
any comparative information from previous
years or reporting periods due to our limited
operations.
Going forward, we will present our information in
a manner that is comparative on a year-by-year
basis for our operations, to track our progress
and ensure accountability to our goals.
Annual report 2021
Extending the ocean potential 22
Stakeholders and Material Topics
In the second half of 2021, we conducted a
materiality assessment to map and determine
our sustainability priority areas. We began by
identifying our most important stakeholders (see
page 36) as well as their primary areas of interest
related to environmental, social, and
governance factors.
We then examined these areas to learn where
our potential impacts were. From this process,
we established benchmarks for how we should
identify and manage our sustainability risks and
opportunities. It also gave us clarity on how we
should provide our stakeholders with material
disclosures through our ESG reporting.
The materiality assessment was conducted
through discussions with internal employees who
are in regular contact with our key stakeholders.
It was carried out in accordance with GRI
Standards and the Guidelines to Issuers for ESG
Reporting by Oslo Stock Exchange (Euronext).
To ensure the necessary independence and
integrity of the process, this assessment was
conducted by a third-party organisation.
Our materiality assessment resulted in the
following material topics being defined as
priority areas:
ENVIRONMENT AND TECHNOLOGY
• Greenhouse gas (GHG) emissions
• Energy usage
• Circular economy
• Biodiversity and nature
FISH AND WATER
• Fish health and welfare
• Sustainable food production
• Product certification and traceability*
*addressed in the Governance chapter
PEOPLE AND SOCIETY
• Employee health and safety
• Local jobs, cooperation, and value creation
• Regulatory compliance
• Responsible supply chain
Annual report 2021
Extending the ocean potential 23
Governance and ESG
Corporate responsibility is an integrated part of
Salmon Evolution’s business practices. We
strongly believe that we have a responsibility for
the people, communities, and environment
affected by our business. This is woven into our
core values as a company, which are to be
responsible, competent, and innovative.
It is the duty of the CEO to ensure that Salmon
Evolution always operates according to these
core values. The CEO must also ensure
compliance with legislation and follow up on
Salmon Evolution’s governing documents.
OUR CORE VALUES: RESPONSIBLE, COMPETENT, INNOVATIVE
The Board of Directors shall ensure that Salmon
Evolution has sound internal control and systems
for risk management. They shall also supervise
Salmon Evolution’s management and general
activities. This includes ensuring compliance to
company core values, ethical guidelines, and
guidelines for corporate social responsibility.
Our governing codes, policies, and procedures
ensure that all our employees carry out their
activities in an ethical manner, in accordance
with current legislation and Salmon Evolution
standards.
An overview of ESG topics covered by our
governance system is presented here:
• Fish health and fish welfare policy*
• Waste management policy*
• HSEQ policy
• Supplier code of conduct*
• Code of conduct
• Corporate governance policy
• Corporate social responsibility policy
• Anti-corruption compliance procedure
*work in progress
Environment
There is a growing need for sustainably farmed
salmon. The Food and Agriculture Organization
(FAO) of the UN predicts that the world
population will reach 9.7 billion by 2050. The
demand for food is set to increase by 50% and
meeting this demand will require a significant
increase in protein production.
Seafood is quickly becoming an important
contributor to meeting this demand. However, a
growing demand for seafood will increase the
Protein
production facts
1
Carbon footprint
(kg CO
2
/40g
edible meat)
0.60
0.88
1.30
5.92
Feed conversion
ratio
1.2-1.5
1.7-2.0
2.7-5.0
6.0-10.0
Edible yield
68 %
46 %
52 %
No data
Water
consumption
(litres/kg)
2,000
4,300
6,000
15,400
Annual report 2021
Extending the ocean potential 24
pressure on already over-exploited wild fish
stocks and ocean resources. To alleviate this
pressure, aquaculture, including salmon
farming, is required to efficiently manage and
maintain both wild fish stocks and the ocean’s
natural biodiversity.
Salmon are amongst the most efficient protein
sources to produce. The feed conversion ratio
(FCR) for salmon, or the amount of feed an
animal needs to gain one kilogram of body
weight, is well below other common protein
sources.
Salmon has a high harvest yield in percentage
(after inedible parts are removed) compared to
other farmed animals. This is shown in Table 1. In
the future when more data is available, Salmon
Evolution intends to measure the efficiency on
the production and believe that land-based
salmon should be competitive.
The global increase in food demand, combined
with stronger preferences for healthy and
sustainably produced proteins, has led to a high
growth in demand for salmon over the last few
decades.
This increase has mainly been met by a
continuous expansion within conventional
aquaculture. However, numerous challenges
inhibit sustainable future growth for fish farming:
▪ CLIMATE CHANGE: DUE TO THE LONG-HAUL TRANSPORT AND DISTRIBUTION OF FISH, THE CO
2
FOOTPRINT FOR SEA-
BASED SALMON FARMING IS HIGH.
OUR RESPONSE: EXPANDING OPERATIONS CLOSER TO MARKETS, STARTING WITH OUR FACILITY IN SOUTH KOREA
▪ POLLUTION AND WASTE: THE NATURE OF CONVENTIONAL SALMON NET PENS CREATES ISSUES WITH THE DISCHARGE
OF UNTREATED WASTE AND POLLUTION, AS WELL AS DISEASES AND PARASITES INTO COASTAL WATERS.
OUR RESPONSE: MINIMIZING POLLUTION AND TREATING WATER AND WASTE
▪ BIODIVERSITY AND NATURE: ESCAPES IN SEA-BASED SALMON FARMING ARE EXPENSIVE AND POTENTIALLY
DAMAGING TO LOCAL WILDLIFE.
OUR RESPONSE: ELIMINATING THE RISK OF ESCAPE AND PROTECTING OCEAN BIODIVERSITY
▪ FISH HEALTH: DISEASES, PARASITES, AND SEA LICE ARE WIDESPREAD IN CONVENTIONAL SALMON
FARMING, CAUSING CONSIDERABLE DAMAGE COMMERCIALLY. IN ADDITION, MORTALITY AND LOSSES IN
PRODUCTION ARE A CHALLENGE FOR SEA-BASED SALMON FARMERS.
OUR RESPONSE: THROUGH OUR TECHNOLOGY, WATER INTAKE IS FILTERED AND UV-TREATED, AND SEPARATED
BIOLOGICAL ZONES REDUCE OPPORTUNITY FOR CROSS-CONTAMINATION
▪ FISH WELFARE: CLIMATE VARIABILITY AND INCREASING WATER TEMPERATURES CAN CAUSE STRESS AND REDUCE FISH
HEALTH AND WELFARE.
OUR RESPONSE: BY CONTROLLING WATER TEMPERATURE AND BY CONTINUOUS MONITORING, WE ENSURE GREATER
FISH WELFARE
New methods and technologies for addressing
biological and environmental challenges are
continually being developed, including a shift to
more land-based farming practices. Land-
based farming addresses a broad range of
these industry challenges and represents a
viable solution for sustainably expanding the
ocean’s essential resources.
Annual report 2021
Extending the ocean potential 25
Research and development are thus central to
our value chain and help create efficient
operations, drive innovation, and create
improvements that ensure future sustainability.
Our research is based on co-operation with
several research communities and promotes
knowledge transfer between internal and
external stakeholders.
Our Commitment
Our vision is to become a globally leading
producer of land-based Atlantic salmon by
ensuring sustainability and extending the ocean
potential. We aim to encourage the inclusive
and prosperous development of the
aquaculture industry, within a stable and
resilient earth system.
To achieve this, we commit to promoting a
culture where sustainability and profitability
reinforce each other. We build sustainability into
our core operations and through the use of the
HFS technology, we transfer the best
preconditions offered by the sea to the farming
of fish on land.
Through our business strategy, we are
committed to the external environment and to
setting a high standard for fish health and fish
welfare. Our objective is to monitor and reduce
the environmental impact of our business, to
ensure we produce a premium salmon product
with a low environmental footprint.
We therefore place an emphasis on three key
environmental areas:
1) climate change impacts
2) circular economy, pollution, and waste
3) biodiversity and nature
By reusing water, we optimise energy
consumption related to pumping and heating,
which reduces our CO
2
footprint. By filtering and
treating wastewater, we reuse more marine
resources. Fish sludge is also collected and
recycled, contributing to a circular economy. By
having a closed farming system, we also
minimize the risk of escapes and thus the
potential harm to local biodiversity and nature.
Photo: Salmon Evolution
Our environmental efforts should never
compromise the health of our fish or our product
quality. We therefore also focus on:
1) fish health and welfare
2) sustainable inputs and outputs
3) product certification and traceability*
*addressed in the Governance chapter
By using fresh seawater from the coast, we
create optimal farming and environmental
conditions for our fish, which result in better
growth and a shorter production time. This
enables a sustainable production process, with
controlled and optimal growth conditions while
limiting operational and biological risk.
Annual report 2021
Extending the ocean potential 26
Each of our choices is weighed against
alternatives to ensure that we carry out our
operations responsibly. Sustainability and fish
welfare are at the core of our vision as well as
our actions as a firm. They are essential to the
identity of Salmon Evolution and we commit to
carry this forward as our operations grow and as
we expand globally.
Environment and Technology
Climate Change Impact
Salmon Evolution’s hybrid flow-through system
(HFS) technology ensures rich access to fresh
filtered seawater. At Indre Harøy, the seawater
intake is based on two intake pipes at 25 meters
and 95 meters, respectively, enabling us to tap
into water at ideal temperatures.
By combining supplies of clean and fresh
seawater with reuse, we minimise overall energy
consumption for pumping and heating of
seawater in the facility.
Our energy plant has a very high output in
relation to the energy used.
Estimated data for Phase 1- full run rate:
• Electricity usage (mWh): 53,000
• Electricity usage (kWh/kg biomass (LW)): 5.8
• 100 % renewable energy
The HFS technology reuses 65% of the water,
while the remaining 35% is fresh seawater. This
ratio is our “sweet spot”, balancing cost and
operational risk while ensuring maximum
production output.
Higher reusage levels require the introduction of
more filtration and water treatment that will lead
to an exponential increase in risk. On the other
hand, a lower level of reusage will lead to
significantly higher energy costs in connection
with pumping and heating of water.
In 2021, we entered into a 100% green power
supply agreement with Statkraft, Europe's
largest generator of renewable energy. Statkraft
is fully owned by the Norwegian government
and is Norway's largest supplier of electricity to
power-intensive industries.
The agreement ensures the further reduction of
environmental impact. The CEO of Salmon
Evolution, Mr. Håkon André Berg, sees this as a
very positive step forward:
“As our company now approaches
commercial operations, our customers can be
100% certain that our salmon is produced with
the lowest possible environmental footprint,
setting a new benchmark for sustainably
produced salmon.”
Through the agreement with Statkraft, Salmon
Evolution will be guaranteed 100% renewable
energy for our land-based salmon farming
facility at Indre Harøy. It secures the vast majority
of our electricity needs through 2023 at an
attractive and fixed price. Furthermore, the
electricity will be sourced nearby, from
Statkraft's hydropower plant at Grytten in
Rauma Municipality, only ~60 km from Indre
Harøy.
Annual report 2021
Extending the ocean potential 27
In addition to this agreement, we have pursued
other partnerships (see page 31) and ventures.
In particular, we have begun a joint venture in
South Korea, called K-Smart Farming. This land-
based salmon farming facility places the HFS
technology and Salmon Evolution’s unique
competence closer to markets, serving as a
lower-CO
2
alternative to long-haul transport and
distribution.
Photo: Salmon Evolution
Key Points – Climate Change Impacts
▪ Salmon is already a lower environmental
impact protein, but through the HFS
technology, we further reduce our climate
impacts.
▪ We have a high performance and high
output in relation to our energy
consumption.
▪ Through our agreement with Statkraft,
Salmon Evolution will be guaranteed 100%
renewable energy through 2023.
▪ The South Korea land-based facility places
operations much closer to the market,
allowing us to reduce our CO
2
footprint for
long-haul transport and distribution.
The energy efficient system at Indre Harøy has
also secured Salmon Evolution a grant of up to
NOK 96.8 million from Enova. Enova is owned by
the Norwegian Ministry of Climate and
Environment and functions to promote the
environmentally friendly production and
consumption of energy. This grant will allow us to
use even more resources to reduce greenhouse
gas emissions, to develop energy-saving and
climate-friendly technology, and to strengthen
the security of the Norwegian food supply.
Circular Economy, Pollution, and Waste
The HFS technology is built to take in and reuse
large quantities of clean and fresh seawater
from the ocean. We are able to create an ideal
balance, where we use water with the same
high quality as traditional Norwegian cage-
based farming, but where we also have
sufficient space and access to the necessary
resources for large-scale production on land.
This provides us the opportunity to commit to a
truly sustainable production as well as to
promote a circular economy.
We plan to achieve this through collecting,
treating, and filtering feed residue and
wastewater. These are then transported to a
recirculation plant where they are converted
into short-travelled fertilizer, biogas, or similar.
Annual report 2021
Extending the ocean potential 28
In addition to the 65% of water being reused
through the HFS technology, we also plan to
reuse fish sludge. We are currently researching
the optimal approach, and have discovered
several possible uses for the sludge, including
input for biogas or natural fertilizers.
For the handling of waste from Phase 1 at Indre
Harøy, we are currently working with Blue
Ocean Technology. Through this partnership, we
aim to continue our efforts to make the reuse of
these resources into viable alternatives.
Key Points - Circular Economy, Pollution, & Waste
▪ 65% of water is reused.
▪ Wastewater and feed residue are collected, treated, and filtered.
▪ We are continuing research and development to ensure the responsible reuse and recirculation of
wastewater, residues, and sludge.
By reusing and treating wastewater, and
reusing water and sludge, we minimise our
environmental footprint. Through our research,
we aim to contribute to a circular economy by
making these reuse solutions into feasible
practices in the future.
Biodiversity and Nature
Our core business is about preserving and
reusing marine resources and minimizing our
environmental impact. The HFS technology
operates in a land-based and enclosed system,
which means that through greater production
control, there is minimal risk of the salmon
escaping from the farm.
As we get closer to operationalisation, we are
committed to doing no harm to the local
environment. In the coming year, we therefore
commit to developing a plan for monitoring
local biodiversity and nature to ensure we
achieve this important goal.
Key Points – Biodiversity & Nature
▪ Our closed system ensures minimal escape risk.
▪ Over the next year we will develop plans for monitoring local biodiversity and nature.
Annual report 2021
Extending the ocean potential 29
Fish and Water
Fish Health and Welfare
At Salmon Evolution, we believe that biology is
key to ensure responsible practices in the
aquaculture industry and ensuring fish health
and welfare. We understand fish welfare as:
▪ freedom from hunger, thirst, and malnutrition
▪ freedom from extreme cold and heat
▪ freedom from injuries and illnesses
▪ freedom from anxiety, stress, and fear
▪ freedom to practice normal behaviour
To ensure fish welfare, we focus on the following:
▪ access to fresh seawater and good nutrition
▪ access to optimal conditions, including
space for protection and rest
▪ preventing and/or quickly diagnosing and
treating injuries and illnesses
▪ providing sufficient area and excellent
facilities aimed at recreating a living space
for fish that is similar to their natural
environment
▪ ensuring good conditions and treatment so
that fish avoid mental or physical suffering
The HFS technology and the arrangement of our
facility enable us to define each tank as an
isolated biological zone. This means that water
in one tank never mixes with water in another
tank. Such an arrangement gives us full control
of water parameters and the production
environment and allows us to ensure biosecurity.
Any potential biological outbreaks in one tank
will never impact or contaminate the fish
swimming in another tank.
To ensure excellent biosecurity in our operations,
we have implemented a quality assurance
system with dedicated personnel responsible for
compliance and the training of staff. Our
training program includes promoting general
biosecurity knowledge and awareness,
including the development of skills and the use
of measures specifically relevant for Salmon
Evolution’s facility.
To ensure optimal biological and growth
conditions in the fish tanks, oxygen and CO
2
levels are constantly monitored and adjusted.
The HFS technology engages in CO
2
stripping
and oxygenation to guarantee ideal
environmental conditions for our fish.
Estimated data for Phase 1- full run rate:
• Mortality 3-5 %
• Density as measured in kg/m3:
o Minimum: 7 kg/m3
o Maximum: 85 kg/m3
• Oxygen consumption (kg / tonnes biomass
growth (LW)): 0,55
By drawing seawater from depths of 25 and 95
meters, the HFS water intake is further filtered
and treated with ultraviolet (UV) rays to
eliminate parasites, sea lice, viruses, infection,
and additional particles. Filtering and
disinfecting intake water creates an infection-
free environment, reducing the risk of illness, and
ensuring a rich flow of fresh and clean seawater
into the tanks.
By optimizing water quality parameters with
ideal and stable temperatures, we can reduce
the time to harvesting for each generation from
approximately 16 to 11 months. This increased
growth creates the basis for greater production
efficiency and optimal utilization of our licensed
volume.
Annual report 2021
Extending the ocean potential 30
Finally, our operations reduce the handling of
fish, which create better growth conditions. It
provides better opportunities for optimal
feeding and reduces loss and stress during the
production cycle.
Key Points – Fish Health & Welfare
▪ The HFS technology allows us to create a stable climate, which is less stressful for our fish.
▪ We ensure biosecurity through separate tanks and distinct biological zones.
▪ Filtered seawater further minimises the risk of bacterial and viral pathogens; minimises risk of parasites;
and limits threats of infection.
▪ We engage in minimal handling of our fish.
Photo: Salmon Evolution
By maintaining control over the production
environment and stable water parameters, we
generate conditions for increased growth and a
shorter time to harvest. Our approach ensures
better fish health and well-being, including
reduced mortality and losses in production.
Annual report 2021
Extending the ocean potential 31
Sustainable Inputs and Outputs
At full run rate in phase 1, we estimate a harvest
volume of approximately 7,900 tonnes (HOG, or
head on gutted). Thus, as we prepare to
commence operations, we are working hard to
optimise our sustainable inputs while reducing
negative impacts for our outputs for this volume.
Our most dominating inputs consist of seawater,
power, feed, smolt, and oxygen.
In 2021, Salmon Evolution entered into a
strategic feed partnership with Cargill. Salmon
Evolution will serve as their global flagship
customer for land-based full grow out
production. Under the agreement, Cargill will
supply 100% of Salmon Evolution's feed volumes
for the Indre Harøy facility.
Cargill has further committed to allocate
significant resources and R&D capacity with the
ambition to develop sustainable feed solutions
tailored to our operational targets: securing high
biological performance and premium product
quality.
As part of the agreement Salmon Evolution
carried out a private placement towards Cargill
of USD 5 million.
When asked about the importance of the
partnership with Cargill, Mr. Håkon André Berg,
CEO of Salmon Evolution stated:
“Having the best possible feed is essential for every salmon farmer. Particularly, in our HFS system
where we create optimal and stable living conditions for the salmon, we see a strong and untapped
potential in tailoring a feed focused on maximizing biological performance and product quality.”
Estimated data for Phase 1- full run rate:
• 100 % local seawater intake
• 9,300 tonnes of feed, corresponding to
GHG emissions of 14,500 tons CO2 eq.
excluding land use change (GW_E_LUC)
and 18,100 tons CO
2
eq. including land use
change (GW_I_LUC).
• 218 tonnes of Smolt produced by Kraft
Laks AS with 100% renewable energy
Another important input is smolt. In August 2021,
Salmon Evolution acquired 100% of the shares in
Kraft Laks AS, a family-owned smolt producer
located in Dalsfjorden in Volda municipality,
Norway. Kraft Laks has a documented track
record as a high quality smolt producer and has
been producing smolt since 1995.
One of the major advantages with Kraft Laks is
its excellent freshwater supply. Kraft Laks has
access to clean freshwater from the surrounding
mountains. They are guaranteed a consistent
supply of freshwater from the local power
station.
This freshwater access enables Kraft Laks to
utilize a similar production technology as Salmon
Evolution’s hybrid flow-through system (HFS) with
reuse of water, CO
2
stripping and oxygenation-
making Kraft Laks a perfect fit for Salmon
Evolution.
The acquisition of Kraft Laks gives Salmon
Evolution full operational control over a critical
part of the value chain. It secures that Salmon
Evolution is fully supplied with smolt for Phase 1
at Indre Harøy.
In addition to feed and smolt, another essential
input is oxygen. Nippon Gases will be our main
Annual report 2021
Extending the ocean potential 32
supplier of oxygen. We share many of the same
values, making this an ideal partnership. During
our selection process, one of the most important
factors was the focus Nippon Gases has on
sustainability. Their efforts have led EcoVadis to
awarding them a Gold Medal, and they are
ranked in the top 5% for their sector.
By prioritizing responsible suppliers, we are able
to ensure that we use sustainable inputs, leading
us to create a truly healthy and sustainable final
product.
Social
Salmon Evolution is committed to responsible
business practices. We take seriously our duty to
promote human rights and ensure labour
standards, equality, and non-discrimination in
our workforce.
We are determined to be a safe and stimulating
place to work. We also aim to limit any negative
impacts our operations may have on society as
much as possible. Through our concentrated
investments, we have seen an important ripple
effect that has led to positive impacts in local
communities.
To ensure we track our efforts and impacts, and
act responsibly, we have several policies and
plans in place regarding health and safety,
working environment, stakeholder
engagement, and the respectful use of local
areas. As we move forward, we will continue to
monitor and improve these efforts in a holistic
way.
Employee Well-Being,
Health & Safety
Safe and Secure Workplaces
We strive for the highest levels of safety in
working conditions. Our suppliers and partners
must all operate according to responsible
labour standards. Going forward, we
encourage contractors and other partners with
operational activities to be certified according
to the ISO 45001, the standard for a safe and
healthy working environment.
Our main contractor, Artec Aqua, has entered
into agreements with subcontractors who are
currently working on site. As of April 2022, Salmon
Evolution had around 200 total contract workers
on site.
In 2021, there were zero lost time injuries (LTI),
zero total recordable injuries (TRI), zero
accidents, and zero fatal accidents reported
amongst Salmon Evolution employees. In total,
there were two cases of sick leave under 16
days, and zero cases over 16 days. Two male
employees took their entitled parental leave
and returned.
Amongst contract workers, there were 8 LTI, 16
TRI, and zero fatal accidents. There were zero
fatal accidents amongst third parties.
As workload has increased, the number of
workers on site has also increased. Along with
increased activity and personnel, task
complexity is also increasing. To ensure safe
working conditions and reduce the risk of
accidents, we have established a close
dialogue with contractors and workers, as well
as developed a new safety routine. We
maintain a strong focus on security and sense of
responsibility for our employees. We strive to
Annual report 2021
Extending the ocean potential 33
consistently provide a controlled and safe
project progression regardless of the complexity
or difficulty of the task.
To ensure this, we have a Health, Safety &
Environment (HSE) manager on site to train our
workers, conduct preventive HSE tasks, and to
investigate any instances of potential violations
or incidents. An introduction to HSE and training
are provided to everyone new to the workplace
and Salmon Evolution offers HSE and first aid
courses to all its employees.
In addition to the HSE manager, Salmon
Evolution has appointed a safety representative
and chief safety representative. All HSE work is
documented in our third-party system, Interaxo,
through the filing of non-conformance reports,
the documentation of investigations, and any
additional follow-ups necessary.
The quality manager prepares procedures for
work tasks that everyone is obliged to familiarize
themselves with. Procedures for operations are
assessed for risk and hazards prior to initiation.
Salmon Evolution has an Occupation Safety
Agreement with Medi3 (Kraft Laks AS) and
Astero (Salmon Evolution ASA & Salmon
Evolution Norway AS).
Salmon Evolution has an established and
detailed a Covid-19 prevention and
preparedness plan. We have operated in
compliance with all national and regional rules
and recommendations regarding the ongoing
pandemic.
Salmon Evolution is also managing the Covid-19
situation by continually assessing the situation
and taking necessary measures at all locations
to limit the impacts. Our highest priority is to
protect and safeguard the well-being of our
employees, suppliers, and partners, whilst also
ensuring uninterrupted and efficient operations.
In 2021, we established a process for our
employees to receive regular performance and
career development reviews which will extend
to all employees in 2022.
Salmon Evolution has high ambitions for
employee development in the company.
Target and development interviews will be
conducted annually in Q1 and Q4, respectively.
We have invested in a separate module in the
HRM system, which simplifies the
implementation and follow-up of the interviews.
The module is being implemented and the first
talks will be conducted in 2022.
We are in the process of taking the "pulse" of the
organisation through flexible surveys through
Simployer, our HRM system. These are user-
friendly surveys stored in Simployer which will be
used as a basis for strategic decisions in
connection with organisational change.
Salmon Evolution aims to be an excellent and
stimulating place to work, where employees are
given the opportunity to use their skills and
abilities to contribute both to the company’s
and their own progress. Employees receive
systematic training focusing on developing skills
tailored to individual needs and capabilities.
We are also committed to worker well-being
outside of working hours. That is why we have
established a corporate sports team for
promoting activities and health after hours. In
2022, we will look for new initiatives to promote
worker health and well-being both during and
after work hours.
Annual report 2021
Extending the ocean potential 34
Diversity and Equal Opportunity
Salmon Evolution shall be an inclusive working
environment. We have zero-tolerance for
harassment or discrimination, both of which are
addressed in our Code of Conduct and
Personnel Handbook.
Discrimination based on ethnic background,
nationality, language, gender, sexual identity, or
religious faith shall not occur. In 2021, there were
zero cases of discrimination or harassment
reported. We are committed to promoting
equal opportunities and fair treatment of all
employees. We have a wage gender ratio of
99%, excluding management.
The average salary in 2021 was NOK 729,000 for
our female employees compared to NOK
737,000 for our male employees. The ratio for
management was 89% and the average salary
was NOK 1,516,500.
Photo: Salmon Evolution
Annual report 2021
Extending the ocean potential 35
Our Employees
At the end of 2021, Salmon Evolution had 32
employees, all 100% employed. We had a
turnover rate of 2,7%.
We support the principles of freedom of
association and collective bargaining
agreements. All employees at Salmon Evolution
may freely join any labour union of their choice
and we strive to sustain a good relationship with
employees and unions.
In 2021, all employees of Salmon Evolution were
Norwegian. We had 12 employees over 50
years old, 19 employees between the ages of
30-49, and one employee under 30 years old. There were five women and 27 men employed in 2021.
Our Executive Management group consisted of four men and one woman.
The gender balance in Salmon Evolution as of 31.12.2021 was below the average in the Industry
Sector in Norway, which in 2021 was 79% men and 21% women according to Directorate of Fisheries.
In early 2022, we hired 18 new employees. By May 2022, we expect to grow to 50 employees. We are
continuously focusing on diversity and gender balance, and as of March 2022, our gender balance
was 76 % men and 24 % women.
Responsible Supply Chain
Our suppliers are important contributors to the
success of our business. We believe that
transparent and frequent communication with
both our customers and suppliers is vital for our
success. We work closely with our suppliers and
customers to minimise negative impact from our
supply chain and we will continue to develop
partnerships focusing on sustainability.
Suppliers that are in breach of our basic
standards for ethics and corporate social
responsibilities can be disqualified for new
tenders. However, if they do not comply with our
standards, we first aim to work with the supplier
to bring about improvements. If the supplier still
does not comply, the supplier relationship can
be terminated.
Salmon Evolution suppliers shall have standards for ethics and corporate social responsibility that
follow the UN Global Compact principles. This shall apply to all suppliers as well as partnerships and
employees.
3 %
59 %
38
%
Age
Under 30
Between 30-50
Over 50:
16 %
84 %
Gender
Women Men
Annual report 2021
Extending the ocean potential 36
Stakeholder and Local Engagement
Local Value Creation
Given that our land-based facility is located on
Indre Harøy in Hustadvika municipality, Norway,
we decided in 2019 to move our head office
from Molde municipality to Elnesvågen,
Hustadvika. The physical relocation was done
during the first two months of 2022.
For the first phase of construction, we anticipate
that our total investment on Indre Harøy will be
NOK 1.4 billion. From this, we have seen a major
ripple effect for both the Møre og Romsdal
region and Hustavika municipality, in the form of
large contracts to local suppliers. This has led to
comprehensive investments in their own
companies.
For example, food services are provided by
local companies, many of whom have seen
record growth, which has led to further
investments in the municipality. Other
investments our local suppliers have made
include office premises and associated
infrastructure, which have directly contributed
to further local contracts and increased
employment opportunities.
In total, Indre Harøy has employed around 200
workers daily through these contracts. Many of
the contractors are also temporarily housed at
local hotels while working at the construction
site. The communities we impact, from the
municipality to local inhabitants, have reacted
positively to these developments.
Stakeholder Engagement
Dialogue and engagement with our
stakeholders help us understand what is
expected of us, what is most important to our
stakeholders, how they are impacted by our
operations, and how we can work together in
solving common challenges.
In 2021, we reviewed our stakeholders and
identified seven groups that we have the
possibility to impact or be impacted by. These
are listed below:
We are in regular contact with our employees,
the local community and municipality, our
customers, and our suppliers and service
providers as part of our daily operations.
Quarterly reports and presentations, and the
latest relevant news from our company, are
presented on our website.
Over the next year, we commit to creating
arenas for systematic and open dialogue with
these groups to understand our impacts. We are
committed to being a responsible business
through interacting with our stakeholders in both
an ethical and transparent manner.
Annual report 2021
Extending the ocean potential 37
Respectful Use of Land
The site of our land-based facility was originally
a disused quarry. After over 30 years of
operation, the quarry was emptied, and has
remained vacant since. Because the land was
left in this state, there was a very limited need for
intrusive activities in the nature to complete the
construction of our facility for farming salmon.
Converting the disused quarry has provided an
opportunity for us to engage in value-creating
activities in an area where there were limited
opportunities for this. We made great efforts to
create an optimal balance between
generating value for local people and
communities, while severely limiting land-
conversion and our impact on the environment.
Going Forward
Salmon Evolution will continue to prioritise local
suppliers for our contracts. We will develop good
relationships with local communities through
creating an open dialogue and expanding our
engagement efforts. We believe that our
operations should have as little negative impact
as possible, and as we grow, we will develop
new ways to monitor and assess our efforts.
Governance
At Salmon Evolution, we believe that the
foundation of good governance is built through
strong and transparent relationships with our
internal and external stakeholders. Our current
governing principles and procedures help
establish the basis of these relationships.
Our principles include rules of procedure for the
Board of Directors (the Board), instructions for
the chief executive officer, regulations on the
division of roles and responsibilities between the
Board and the CEO, our investor relations policy,
and manuals for the handling and disclosure of
insider information.
As a Norwegian public limited liability company
listed on Oslo Stock Exchange, Salmon Evolution
bases its corporate governance structure on
Norwegian legislation and recommended
guidelines.
Our Code of Conduct includes the main
principles for ethical business conduct at
Salmon Evolution, and detailed guidelines for
anti-corruption, conflicts of interests, and
whistleblowing routines. Our Code of Conduct
applies to all employees, contract workers,
Board members, and all other persons acting on
behalf of the company.
Our governance documents and practices are
subject to regular review by the Board to ensure
compliance and effectiveness.
Our approach to corporate governance places
a high priority on building and maintaining trust
and confidence in the company to ensure long-
term value creation in the best interest of both
our shareholders and stakeholders.
Annual report 2021
Extending the ocean potential 38
Organisation and Governing Systems
Organisation and Ownership
Salmon Evolution ASA is a Norwegian public
limited liability company and has three
subsidiaries.
Salmon Evolution Norway AS is the owner and
operator of our facility at Indre Harøy and where
most of our employees are employed. Salmon
Evolution Asia AS is the holding company for our
interests in our South Korean joint venture and K
Smart Farming is the joint venture between
Salmon Evolution and the South Korean seafood
firm Dongwon Industries. Kraft Laks AS is
producing smolt and will be the main supplier of
smolt to our facility at Indre Harøy.
Board of Directors report
Introduction/summary
The Board of Directors is responsible for the
overall management of Salmon Evolution and
may exercise all the powers on our behalf. In
accordance with Norwegian law (Norwegian
Public Limited Liability Act), the Board of
Directors is responsible for, among other things,
supervising the general and day-to-day
management of our business; ensuring proper
organisation, preparing plans and budgets for
our activities; ensuring that our activities,
accounts, and asset management are subject
to adequate controls. They also undertake
investigations necessary to ensure compliance
with these duties.
The Board of Directors may delegate such
matters to the Executive Management of
Salmon Evolution. The Executive Management is
responsible for ensuring that day-to-day
operations are in accordance with instructions
set out by the Board of Directors.
Among other responsibilities, our CEO is
responsible for keeping the accounts at Salmon
Evolution in accordance with existing
Norwegian legislation and regulations, and for
managing the Salmon Evolution’s assets in a
responsible manner.
At least once a month, our CEO must brief the
Board of Directors about Salmon Evolution’s
activities, financial position, and financial results.
This board of directors report outlines the main
framework regarding the Group’s corporate
social responsibility and corporate governance.
For further information please refer to the ESG
section of this report (page 21-38).
Salmon Evolution
ASA
Salmon Evolution
Norway AS (100%)
Salmon Evolution
Asia AS (100%)
K Smart Farming
49%
Kraft Laks AS (100%)
Annual report 2021
Extending the ocean potential 39
Board of directors – roles and CV’s
Regional and international entrenchment and industry-based expertise characterise our directors.
Their common denominator and driving force are a belief in farming salmon sustainably on land,
based on the board’s overall expertise and the choice of the right technology.
Tore Tønseth, Chairman of the board
Investment vice president at Ronja
Capital and has worked in the financial
market for more than 15 years. Earlier
appointments include share analyst in
both Sparebank 1 Markets and Pareto
Securities, with seafood, technology and
industry as special fields.
He was responsible for seafood analyses
at SpareBank 1 Markets
from 2013 to 2019. At the same time, he was in frequent demand as a speaker
in Norway on seafood, finance and sustainability. Tønseth also has a
background from various technology
start-ups, where he has been both
product manager and system
developer.
Tønseth has an MSc in economics and
administration from the Norwegian
School of Economics (NHH),
specialising in finance and
econometrics. Ronja Capital is our
largest shareholder.
Peder Stette, Board Member
Peder Stette has been in the fishing and
aquaculture industry for the last 25 years.
From 1994 he developed Peter Stette AS
to be an important supplier of technical
solutions to the industry before merging
with Optimar in 2014. Optimar was later
sold to Haniel in 2017, and Peder had the
position as CTO and later CCO in
Optimar until 2021. He is now the CEO of
Stette Holding, a family investment
company.
Peder Stette holds the position as
director of Ably Medical, Invisible
Connections, Biaton, NSP Aid and
others. For the coming years he will use
his knowledge and experience to build
values in the companies the Stette
family is invested in.
Anne Breiby, Board Member
Anne Breiby holds a Cans scient degree in
fisheries biology from the University of
Tromsø and experience as aquaculture
coordinator for the director of fisheries in
Nordland county, organisation secretary for
the Norwegian Fish Farmers Association,
political adviser in the Ministry of Fisheries
and state secretary (junior minister) in the
Ministry of Trade and Industry.
Over the past 20 years, Breiby has
been self-employed with boardroom
work as her main activity.
She has board experience from inter
alia Ulstein Group ASA, Rem Offshore
ASA, Folketrygdfondet, Norges
Sjømatråd AS and Sparebanken Møre.
She is currently chair of Tafjord Kraft As
and Åkerblå.
Annual report 2021
Extending the ocean potential 40
Ingvild Vartdal, Board Member
Ingvild Vartdal has a law degree and long
experience as a corporate lawyer, and is
currently a lawyer and partner in Adviso
Advokatfirma AS. She specializes in
corporate and international tax and has
extensive experience from these areas in
industries like fishing, shipping and finance.
She has previously worked as a lawyer and
partner in Advokatfirmaet Schjødt AS, in
KPMG Law, and as a legal consultant
at Bærum tax office. Vartdal has also
been a member of the law committee
for tax law.
Vartdal holds several directorships and
has experience from business
management in both private and
listed companies.
Glen Allan Bradley, Board Member
Glen Bradley is chair of Rofisk AS, which
owns Rostein AS. The latter is one of the
world’s leading well boat owners and ranks
among our substantial shareholders.
He has the equivalent of a BSc in
economics, strategy and international
marketing, and more than 20 years of
experience in the salmon industry. He
is currently deputy CEO of Rostein AS.
As a director and shareholder, Bradley
wants to use his experience and big
commitment to the salmon industry to
help us become an important
company, both for the region and for
our owners.
Yun Ki Yun, Board Member
Yun Ki Yun was until February 2022 CFO of
Dongwon Industries, one of Korea’s leading
seafood companies. He has more than 20
years of experience in mergers and
acquisitions (M&A) and finance,
concentrating on M&As in warehouse
logistics and aquaculture since joining the
Dongwon group in 2017.
He began his career with CJ Group,
specialising in media-related M&A. He
followed CJ Group’s media
involvement from a pure content
provider to distributing content in the
cable TV segment. He also worked
earlier on derivative sales for Colling
Stewart in Singapore.
Yun has a BSc from Yonsei University
and an MSc in finance from London
Business School.
Annual report 2021
Extending the ocean potential 41
Janne-Grethe Strand Aasnæs, Board Member
Janne-Grethe Strand Aasnæs is the CEO
and majority owner of Strand Havfiske AS,
an Ålesund based fishing vessel company
mainly engaged in whitefish and pelagic
business.
She has prior to that been engaged in the
financial industry as a financial
analyst/portfolio manager and manager of
client relations within asset
management. She holds an MBA and
is a Certified financial analyst (AFA).
Janne-Grethe holds several
directorships in both the private and
public sector and has a long
experience in managing and
developing companies.
Kristofer Reiten, Board Member
Kristofer Reiten has been CEO of Vikomar AS
since 1995. This modern fish processing
company specialises in the production,
freezing and distribution of pelagic species.
With his experience and knowledge, Reiten
wants to participate in realising a paradigm
shift in Norwegian aquaculture by farming
and creating a sustainable salmon on land
– a fish which has swum in clean
seawater from the Norwegian coast,
which has not been exposed to lice
problems and which has experienced
minimum handling during its life cycle.
Reiten is one of our original owners and
remains a significant shareholder in
Salmon Evolution.
Important events in 2021
Annual report 2021
Extending the ocean potential 42
Corporate social responsibility
Salmon Evolution is committed to responsible
business practices with respect to human rights,
labour standards, equality and non-
discrimination, social matters, the external
environment, and anti-corruption. The Group
shall comply with the UN Global Compact
principles and OECD guidelines for multinational
companies.
The Group has developed a Code of Conduct
including guidelines for ethical behaviour, anti-
corruption, integrity and conflicts of interest,
corporate responsibility and whistleblowing. The
Code of Conduct applies to all employees,
contract workers, board members and other
persons acting on behalf of the company. The
Code of Conduct is available from the
company’s website www.salmonevolution.no.
For further information about our corporate
social responsibility activities, please see the ESG
section of this report.
Environment
Salmon Evolution’s ambition and aim are an
inclusive and prosperous development of the
aquaculture industry within a stable and resilient
earth system. The company’s business strategy
and objective are to be a leader in producing
and selling salmon with lower environmental
footprint.
Salmon Evolution strives to reduce the
environmental impact of its business. By having
a closed system, the company eliminates the risk
of escapes. Further, energy consumption
relating to pumping and heating of water is
reduced through reusage of water while at the
same time not compromising on fish welfare.
Also, the wastewater is filtered, sludge collected
and recycled and hence contributing to a
circular economy.
The company’s sustainability strategy is further
described in separate section under Company
description.
Working environment
Salmon Evolution aims to be a good, stimulating
place to work, where employees are given the
opportunity to use their skills and abilities to
contribute both the company’s and their own
progress. Employees shall receive systematic
training and Salmon Evolution can contribute to
develop skills on individual basis.
All employees in Salmon Evolution shall enjoy a
high level of safety in their work. Salmon
Evolution aim for all suppliers and partners to
operate to responsible labour standards, and
the company encourage contractors and other
partners with operational activities to be
certified according to the ISO standard for the
working environment and safety. The company
continuously collaborate with suppliers to make
improvements.
There were no injuries or accidents reported or
investigated amongst Salmon Evolution
employees in 2021.
Total sick leave for the company in 2021 was
0,3%.
Annual report 2021
Extending the ocean potential 43
Covid-19 prevention and preparedness
Salmon Evolution established in 2020 a detailed
Covid-19 prevention and preparedness plan to
protect employees, business partners and the
workplace, while safeguarding uninterrupted
and efficient operations. The company has
operated in compliance with all national and
regional rules and recommendations regarding
the pandemic.
Diversity and equal opportunity
Salmon Evolution shall have an inclusive working
environment. Discrimination or harassment
based on ethnic background, nationality,
language, gender, sexual identity or religious
faith shall not occur. No cases of discrimination
or harassment were reported or investigated in
2021.
The company shall promote equal opportunities
and fair treatment of all employees.
At the end of 2021, Salmon Evolution had 32
employees, of whom 5 women. This is below the
gender balance in The Industry Sector in
Norway, which in 2021 was 79% men and 21%
women according to the Directorate of
Fisheries. The executive management group
consists of 4 men and 1 woman. Following the
election of the new board of directors on 18
March 2021, the board consists of 5 men and 3
women.
Employees of Salmon Evolution may freely join
any labour union of their choice. Salmon
Evolution shall work to sustain a good
relationship with employees and unions.
Anti-corruption and anti-bribery
Salmon Evolution’s anti-corruption policy and
anti-bribery policy are developed in
compliance with the U.S. Foreign Corrupt
Practices Act, the U.K Bribery Act and other
applicable anti-corruption laws, and states that
Salmon Evolution will not engage in, or otherwise
tolerate, any form of bribery or corruption in the
business dealings of any member of the Salmon
Evolution group. No corruption or bribery cases
were reported or investigated in 2021.
Whistleblowing
Salmon Evolution wishes to sustain open
communication about responsible and ethical
conduct at Salmon Evolution. We have set out
guidelines for giving notice of breaches of the
law, rules, ethical guidelines, and other
unacceptable circumstances. Employees are
encouraged to follow the procedures
contained in the whistle-blowing guidelines.
Product Certifications and Traceability
With stable growth conditions and high
biological input from roe to harvest-ready fish,
we meet the highest quality standards- as well
as the market’s requirements for high and
uniform harvest weight. We aim to always have
full control of the biomass. Modern monitoring
systems track the fish and their welfare indicators
at individual level, which allows us to sort and
register the fish effectively.
A land-based farm is protected from many of
the challenges faced in the sea. This is
combined with the best possible fish health,
optimal water quality, and high-quality
sustainable feed to give our customers first-class
salmon. To make sure we deliver on our
promises, we are working on being certified in
accordance with two programs.
Annual report 2021
Extending the ocean potential 44
First, the Aquaculture Stewardship Council
(ASC), an organisation that establishes strict
protocols for labelling farmed seafood through
sustainable aquaculture. Second, the Global
G.A.P., a farm assurance program ensuring
Good Agricultural Practices.
Our aim is to have;
A sustainable food chain with traceability from roe to plate
These programs set strict requirements for
responsible farming, which encourage seafood
producers to track and minimise the
environmental and social impacts of their
business. The standards addressed in these
schemes cover the production process from roe
stage to fish slaughter.
Through these two certifications, we commit
ourselves to transparency in our operations and
to safeguarding and documenting traceability
and food safety.
Corporate governance
Salmon Evolution depends upon good relations
with its stakeholders to succeed. Good
corporate governance is important to build and
maintain trust and confidence in the company
and to ensure long-term value creation in the
best interest of the Company’s shareholders.
Corporate governance principles and practices
Current principles and procedures include rules
of procedure for the board of directors,
instruction for the chief executive officer,
regulating the division of roles and
responsibilities between the board and the CEO,
investor relations policy and manuals for
handling and disclosing insider information.
The Board has also adopted a Code of Conduct
including guidelines for anti-corruption, conflicts
of interests and whistleblowing routines,
stipulating the main principles for ethical
business conduct applying to all employees,
contract workers, board members and other
persons acting on behalf of the company.
The company’s governance documents and
practices will be subject to regular review by the
Board.
Shares and Negotiability, Equal Treatment of Shareholders, and Transactions with Close
Associates
Salmon Evolution has one class of shares,
carrying equal voting rights. There are no
restrictions on owning, trading, or voting for
shares in Salmon Evolution’s Articles of
Association.
On 11 March 2021, Salmon Evolution made a
private placement where the pre-emptive rights
of shareholders were set aside. The reason for
this action was provided in the stock exchange
release in connection the placement.
Annual report 2021
Extending the ocean potential 45
In connection with the purchase of Kraft Laks,
NOK 16.6 million of the purchase price was
settled by way of issuing new shares in Salmon
Evolution. The Company also completed a
private placement towards Cargill of NOK 42.7
million in October in connection with entering a
strategic feed partnership. In both transactions
the pre-emptive rights of existing shareholders
were set aside, but the board of directors are of
the opinion that both transactions were of
interest to the company. Also, the subscription
price applied in both transactions was based on
the traded value of the Salmon Evolution share.
Any transactions in own shares will be carried
out either through Oslo Stock Exchange or
otherwise at prevailing market prices. If there is
limited liquidity in our shares, we will consider
other ways to ensure equal treatment of all
shareholders.
For major transactions between Salmon
Evolution, our shareholders, subsidiaries,
members of the board, leading employees or
other close related parties, an evaluation will be
performed by an independent third party and
treated by the general meeting.
Transactions with Related Parties
During the ordinary course of business, the
Group engages in certain transactions with
related parties. The following is a summary of
related party transactions carried out in the
period:
In 2019 the Company entered into an
agreement with Artec Aqua AS, a subsidiary of
Artec Holding AS, for the design and
construction of a land-based salmon farming
facility at the Company’s site at Indre Harøy.
Pursuant to the agreement entered into with
Artec Aqua AS, Salmon Evolution has had a
significant volume of transactions during 2021
related to the ongoing construction of the
production facilities at Indre Harøy. Artec Aqua
AS was until mid-March 2021 a 100%-owned
subsidiary of Artec Holding AS, which per
31.12.2021 held 3.6% of the total shares
outstanding in Salmon Evolution ASA.
Due to the acquisition of Artec Aqua by Endur
ASA in Q1 2021, Artec Aqua is no longer
considered to be a related party to Salmon
Evolution ASA.
The Company further has a consultancy
agreement with Peder Stette (board member)
and Frode Kjølås (chair nomination committee)
relating to assistance in certain projects on an
ad-hoc basis.
The Group has during 2021 purchased legal
services from Adviso Advokatfirma AS in the
amount of NOK 325,000 in its ordinary course of
business. Board member Ingvild Vartdal is a
partner at Adviso Advokatfirma AS but has not
had any role in the services rendered to Salmon
Evolution.
There were no other material transactions with
related parties during 2021.
For information on transaction with close
associates, see Note 22 in the annual accounts.
Board of Directors, Nominations and Committee, and Board Authorisations
On 18 March 2021, Salmon Evolution held an
extraordinary general meeting (EGM). The
purpose was to approve the conversion into a
public limited liability company, appoint new
board members, establish a nomination
committee, and grant an authorization to the
Board of Directors to issue the shares in the 11
March 2021 private placement and the
issuance of shares in connection with a
subsequent offering.
Annual report 2021
Extending the ocean potential 46
In connection with these changes, new Articles
of Association were adopted. The Articles of
Association stipulate that the Board of Directors
shall include five to nine directors. The Board of
Directors and the chair are elected by the
general meeting pursuant to the general
meeting’s further decision. On 18 March 2021,
the following directors were elected to the
Board:
Name
Role
Elected
until
Independent of
management and
material business
associates?
(yes/no)
Independent
of major
shareholder?
(yes/no)
Board
meeting
attendance
2021
Comment
Tore Tønseth
Chair
2022
Yes
Yes
19/19
Associated
with Ronja
Capital II AS
Anne Breiby
Director
2022
Yes
Yes
19/19
Glen Allan
Bradley
Director
2022
Yes
Yes
19/19
Associated
with Rofisk AS,
Salmoserve AS
and Ocean
Industries AS
Peder Stette
Director
2022
Yes
Yes
19/19
Associated
with Stette
Invest AS
Kristofer Reiten
Director
2022
No
Yes
19/19
Associated
with
Bortebakken
AS
Janne-Grethe
Strand Aasnæs*
Director
2022
Yes
Yes
15/15
Ingvild Vartal*
Director
2022
Yes
Yes
15/15
Yun Ki Yun
Director
2022
No
Yes
16/19
Associated
with Dongwon
Industries
*Elected from 18 March 2021
The composition of the Board is based on
representation of Salmon Evolution’s
shareholders, as well as the company’s need for
competence, experience, capacity, and ability
to form balanced decisions.
It was further resolved at the EGM that Salmon
Evolution shall have a nomination committee.
The Nomination Committee will be responsible
for proposing candidates to the Board and the
Nomination Committee, and remuneration to
the members of these bodies.
The Nomination Committee was elected at the
ordinary general meeting in 2021. This was also
when the Instruction for the Nomination
Committee entered into force.
The Company has entered into a board of
directors and officers liability insurance policy.
The insurance covers defence costs, legal
representation expenses and losses arising from
claims for the company’s board of directors and
officers. The insurance policy has an aggregate
limit of liability of NOK 25 million.
Compensation approach
Salmon Evolution does not currently have a
remuneration committee as this is not
considered necessary in the light of the
composition of the Board of Directors.
Annual report 2021
Extending the ocean potential 47
Remuneration of the board is decided by
Salmon Evolution’s general meeting, and
reflects the board’s responsibility, expertise, time
commitment and the complexity of Salmon
Evolution’s activities. Note 10 of the financial
statement provides details of all elements of the
remuneration and benefits for each member of
the board. The remuneration is not linked to the
Company’s performance.
Remuneration of the Executive Management is
decided by the board in accordance with the
Norwegian Public Limited Liability Companies
Act. The board has the responsibility to ensure
convergence of the financial interest of the
Executive Management and the stakeholders.
The board aims to ensure that performance-
related remuneration of the Executive
Management in the form of share options,
annual bonus programs or the like, if used, are
linked to value creation for shareholders or
Salmon Evolution’s earnings performance over
time. Note 10 of the financial statement provide
details of all elements of the remuneration and
benefits for each member of the Executive
Management.
Compliance
As a Norwegian public limited liability company
listed on Oslo Stock exchange, Salmon Evolution
bases its corporate governance structure on
Norwegian legislation and recommended
guidelines.
The Company is subject to The Norwegian
Corporate Governance Board’s (NUES)
recommendation on corporate governance.
Salmon Evolution complies with the current
Code of Practice for Corporate Governance,
published 14 October 2021, with the following
exceptions:
General Meeting:
• The general meeting is chaired by the
chairman of the board of directors or an
individual appointed by the chairman of the
board of directors. Having the chairman of
the board of directors or a person appointed
by him chairing the general meetings
simplifies the preparations for the general
meetings significantly. In the Company’s
experience, its procedures for the
chairmanship and execution of general
meetings have proven satisfactory.
• The shareholders are invited to vote on the
composition of the board of directors
proposed by the nomination committee as a
group, and not on each board member
separately, as it is important to the Group that
the board of directors of the Company works
in the best possible manner as a team and
that the background and competence of
the board members complement each
other.
• The Company encourages shareholders to
attend the general meeting. It is also the
intention to have representatives of the
board of directors and the chairman of the
nomination committee to attend the general
meeting. The Company will, however,
normally not have the entire board attend
the meeting as this is considered
unnecessary. This represents a deviation from
the Code of Practice which states that
arrangements shall be made to ensure
participation by all directors.
The work of the Board of Directors:
• The Company does not currently have a
remuneration committee as this is not
considered necessary in the light of the
composition of the board of directors. The
Company will however consider establishing
a remuneration committee going forward.
Takeovers:
Annual report 2021
Extending the ocean potential 48
• The Company does not have separate
guidelines on how to respond in the event of
a takeover bid. The Norwegian Code of
Practice recommends the adoption of such
guidelines.
In addition, the Group has focus on risk
management and internal control systems and
have implemented routines to track which risks
the organization is exposed to and what
consequences this could have.
Investor Relations Policy
Salmon Evolution’s Investor Relations Policy sets
the basic principles for our communication and
dialogue with capital markets participants,
including guidelines for contact with
shareholders outside general meetings. We are
committed to providing our shareholders with
accurate, clear, relevant, and complete
information on our performance and market
position.
Communication with stakeholders shall be
based on the principles of equal treatment and
transparency, and we aim to continually ensure
trust and stakeholder confidence. The
responsibility for Salmon Evolution’s investor
relations activities lies with our CFO. Salmon
Evolution provides quarterly reports in line with
Oslo Stock Exchange’s recommendations.
Presentations are given in connection with the
disclosure of the interim results to provide an
overview of operational and financial
developments. The presentations are open to
the public and made available through a
webcast. All information is provided in English
and distributed to our shareholders through Oslo
Stock Exchange’s news channel
www.newsweb.no and our website at:
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Annual report 2021
Extending the ocean potential 49
Shareholder Information
Salmon Evolution was successfully listed on
Merkur Market (now Euronext Growth) on 18
September 2020. Further, the Company was
listed on Oslo Stock Exchange (Oslo Børs) 9 July
2021, the last day of trading of the shares on
Euronext Growth (Oslo) was 8 July 2021.
As per 31 December 2021, Salmon Evolution ASA
had 310.8 million issued shares, divided between
8,681 shareholders.
Ronja Capital II AS is the Company’s largest
shareholder with 26,687,687 shares,
corresponding to 8.6% of the total number of
shares outstanding. The 20 largest shareholders
own 64.9% of the shares in the Company.
The closing price for the Company’s share was
NOK 8.60 per share as per 31 December 2021,
which corresponds to a market capitalization of
NOK 2.67 billion.
During the last quarter of 2021, the average
daily traded volume was about 680,000 shares
and the average daily traded value was about
NOK 5.5 million
20 largest shareholders at 31 December 2021
Shareholder # of shares % share
Ronja Capital II AS 26 687 687 8,6 %
The Bank of New York Mellon SA/NV 20 889 534 6,7 %
Farvatn Private Equity AS 17 093 878 5,5 %
Dongwon Industries Co. Ltd 16 044 572 5,2 %
Rofisk AS 13 274 174 4,3 %
Stette Invest AS 11 236 005 3,6 %
Artec Holding AS 11 139 339 3,6 %
Kjølås Stansekniver AS 10 774 405 3,5 %
Verdipapirfondet Dnb Norge 10 544 140 3,4 %
Jakob Hatteland Holding AS 8 706 006 2,8 %
Mevold Invest AS 8 141 141 2,6 %
Lyndheim Invest AS 7 891 141 2,5 %
Bortebakken AS 7 471 090 2,4 %
EWOS AS 5 541 374 1,8 %
Verdipapirfondet DNB SMB 5 529 606 1,8 %
Nordnet Livsforsikring AS 5 196 371 1,7 %
Verdipapirfondet Norge Selektiv 5 132 518 1,7 %
Salmoserve AS 3 727 366 1,2 %
Vpf Dnb Am Norske Aksjer 3 457 555 1,1 %
Danske Invest Norge Vekst 3 150 000 1,0 %
Total 20 largest shareholders 201 627 902 64,9 %
Other shareholders 109 168 587 35,1 %
Total number of shares 310 796 489 100,0 %
Operational development
Status Indre Harøy
Since the groundwork started in May 2020, the
Phase 1 project at Indre Harøy has developed
according to the overall plan.
Construction start ceremony
During 2020 the blasting work for the fish-tanks
and buildings was completed, and the masses
was transported out or crushed for reuse.
Concrete works, including foundations for
buildings and tanks, started in September 2020
and continued throughout 2021. Tunnel for
wastewater was successfully finished in
December 2020.
Wastewater pipe before putted into ground
Construction work through the first half of 2021
was mainly focused on the production facilities,
where the company started the assembly of
fish-tanks.
In the second half of 2021 the Company
successfully installed the two water inlet pipes,
one 425-meter-long pipe going down to 95
meters water depth and one 180-meter-long
pipe going down to 25 meters water depth. The
water intake station was technically ready for
operation year end 2021.
Installation of water inlet pipes (October 2021)
Installation of process equipment and pipes also
intensified during the second half of 2021,
hereunder installation of heat pumps, heat
exchangers, O2 equipment and CO2 and
nitrogen strippers.
Additionally, solid progress was made on the
administrative part of the facility including the
control room centre. Towards the end of the
year significant focus was also allocated to
electrical and IT and OT infrastructure works.
All 12 fish tanks in phase 1 are now assembled
and the first two fish tanks together connecting
technical rooms as well as the water intake
station and other linked parts of the facility was
taken over by Salmon Evolution in March 2022
upon which the first smolt was released into the
facility in late March 2022.
First fish tank filled with fresh seawater (January 2022)
Throughout the second half of 2021 around 200
workers have been working on site. The high
activity also means high work-complexity. To
reduce risk for accidents, Salmon Evolution aims
for a close dialogue with contractors and
workers to secure controlled and safe project
progression.
As per 31 December 2021, accumulated capex from project initiation in 2019 amounts to NOK
920.0 million excluding internal capitalized G&A.
Accumulated CAPEX 2021 (NOK million)
50
869
51
26
36
103
149
220
334
506
745
970
IB '20 Q1 20 Q2 20 Q3 20 Q4 20 Q1 21 Q2 21 Q3 21 Q4 21
Capitalized internal G&A
Investments (Indre Harøya)
Land
Annual report 2021
Extending the ocean potential 52
Status Korea
Following the establishment of the joint venture
in March 2021, Salmon Evolution and Dongwon
have continued to develop the project which
includes a smolt facility in Jeongseon where K
Smart has acquired an existing smolt farm.
Additionally, a full grow out facility is planned in
Yangyang on the northeast coast of South
Korea with a planned production capacity of
16,800 tonnes HOG.
Jeongseon smolt site
During the fourth quarter of 2021 the company
completed a feasibility study after which time
has been spent on tuning facility layouts and
production plans. Focus over the coming
months will be on early engineering works and
optimization of facility layouts.
K Smart has further established a project
organization consisting of dedicated members
from both Salmon Evolution and Dongwon
Industries in addition to hired in specialist
resources.
Yangyang grow out site
Good progress have also been made on the
permitting process. The discussions with the
respective authorities are going well and K
Smart remains confident about receiving
approvals needed to carry out the project. K
Smart targets construction start during 2022.
Events after balance sheet date
Heads of Terms with Artec Aqua for the Phase 2 build-out
On 7 February 2022 Salmon Evolution
announced that it had entered into a Heads of
Terms with Artec Aqua for the phase 2 build-out
at Indre Harøy. Phase 2 is expected to in
principle be identical to phase 1 and add a
further 7,900 tonnes HOG of annual production,
bringing the total planned production volume
to 15,800 tonnes HOG per annum.
The purpose of the Heads of Terms is to enable
Salmon Evolution to be in a position to swiftly
commence construction of phase 2 following
the completion of phase 1. Such timeline
requires significant preparatory activities,
including but not limited to, planning, concept
and detailed engineering and structuring of
subcontractor tender processes.
The Heads of Terms further sets out the main
commercial terms to be reflected in a final
design and construction agreement between
the parties.
Annual report 2021
Extending the ocean potential 53
The final design and construction agreement is
expected to be effectuated during first half of
2022 and will include financing reservations
providing Salmon Evolution with the necessary
flexibility to align the phase 2 build out with the
Company’s overall financing plan
Successful Private Placement
On 5 April 2022 the Company completed a
private placement raising gross proceeds of
approximately NOK 300 million in new equity at
a subscription price of NOK 9.00 per share. The
private placement attracted strong interest
from Norwegian, Nordic and international high-
quality investors and was significantly
oversubscribed.
The net proceeds from the private placement
will be used to (i) to partly fund the second
phase of the salmon farming facility at Indre
Harøy; (ii) to expand the capacity at the smolt
facility Kraft Laks AS; and (iii) for general
corporate purposes. The offer shares were
allocated in two tranches as follows: one
tranche with 22,574,374 offer shares (“Tranche
1”) and a second tranche with 10,758,959 offer
shares (“Tranche 2”). Both Tranche 1 and
Tranche 2 were settled with existing and
unencumbered shares in the Company, that
are already listed on Oslo Børs, pursuant to a
share lending agreement (the “Share Loan”)
between the Company, the managers, Stette
Invest AS, Rofisk AS and Ronja Capital II AS.
The board has accordingly resolved to increase
the Company’s share capital by NOK
1,128,718.70, by issuing 22,574,374 new shares
pertaining to the Offer Shares allocated in
Tranche 1, pursuant to the authorisation (the
“Board Authorisation”) granted to the board by
the Company’s annual general meeting held
on 19 May 2021. The issue of new shares
pertaining to the offer shares allocated in
Tranche 2 is subject to approval of the
Company’s extraordinary general meeting
expected to be held on or about 2 May 2022
(the “EGM”).
If the EGM does not approve the issuance of the
offer shares in Tranche 2, the Company will not
receive any proceeds from the sale of offer
shares in Tranche 2. The effective reduction in
proceeds to the Company will in such event be
allocated both to the Indre Harøy phase 2
funding and the Kraft Laks expansion. For the
latter, the Company will seek to portion out the
smolt build-out and potentially partly rely upon
external sourcing of smolt for a period of time. It
is emphasised that no decision for commencing
the Phase 2 project has been made, and
reference is made to the Company
announcement dated 7 February 2022 and 10
February 2022 for further information.
Annual report 2021
Extending the ocean potential 54
Financial performance
Going concern
The consolidated financial statement is prepared in accordance with International Financial
Reporting Standards (IFRS). The Board confirms that it is appropriate to prepare the Annual Report
based on a going concern assumption. The Group believes it is adequately funded and has access
to additional capital if required.
Income statement
Full year 2021 sales amounted to NOK 12.3
million.
Personnel expenses summed up to NOK 21.1
million. For the whole year approximately 46% of
the total personnel expenses where capitalized.
Other operating expenses totalled NOK 25.9
million. The increases from last year reflect the
higher activity level in the Company and the
continued progress at Indre Harøy and South
Korea and incorporation of newly added Kraft
Laks into the accounts. The operating loss was
NOK 37.8 million.
Total depreciations were NOK 2.2 million and net
financials was positive at NOK 4.9 million,
resulting in a loss before tax of NOK 33.0 million.
Assets under construction is not depreciated.
Cash flow
Net cash flow from operations ended at NOK -
67,4 million in 2021 compared to NOK -10.0
million in 2020. The negative increase is directly
related to increased activity level in the
Company, both in terms of a bigger
organisation, continued progress at Indre Harøy
and in South Korea and incorporation of Kraft
Laks.
Net cash flow from investment activities
amounted to NOK -754.5 million, compared to
NOK -166.0 million in 2020. The change in cash
flow from investments are directly related to
investments at Indre Harøy and gives a good
picture of the increased activity level. During
2021 the Company also purchased Kraft Laks
AS.
In terms of financial activities, 2021 was an
eventful year for Salmon Evolution. Following the
raising of NOK 500 million in March, the
company further raised NOK 16.6 million in new
equity in August as part consideration for the
acquisition of Kraft Laks. Finally, in October the
Company also carried out a private placement
of USD 5 million (NOK ~43 million) towards Cargill
which brings the total raised equity to date to
over NOK 1.4 billion.
On 29 June 2021, the Company announced the
signing of legally binding loan documentation
for a senior secured debt financing package of
up to NOK 625 million related to the Phase 1
build out at Indre Harøy. As per 31 December
2021 the Company had bank debt of NOK 200
million which relates to this debt financing
package.
Net cash flow from financing activities ended at
NOK 679,7 million.
Cash and cash equivalents decreased by NOK
142.3 million during the year, and available cash
totalled NOK 505.5 million with a total available
liquidity of NOK 983 million including committed
undrawn credit facilities as of 31 December
2021.
Annual report 2021
Extending the ocean potential 55
Financial position
The carrying amount of Salmon Evolution’s total
fixed assets as of 31 December 2021 was NOK
1,078.7 million, compared to NOK 222.4 million 31
December 2020. Fixed assets are mainly related
to the construction work at Indre Harøy,
comprising capitalized costs related to both
personnel expenses and construction cost, land
acquisition as well as Kraft Laks and other smaller
items.
Total equity amounted to NOK 1,297.5 million.
With total assets of NOK 1,705.9 million, this
corresponds to an equity ratio of 76%.
Consolidated interest-bearing liabilities totalled
NOK 235.5 million.
In October 2020, Salmon Evolution was granted
NOK 14 million in funding from the Norwegian
tax incentive scheme Skattefunn. The tax
incentive scheme will be distributed over a
three-year period and is designed to stimulate
research and development (R&D).
Balance sheet as per 31.12.2021 (NOK million)
Source: Company data
Furthermore, in November 2020 the Company
was granted NOK 96.8 million in a funding
commitment from ENOVA. The commitment is a
cash grant, and the funding will not require any
material additional investment needs from
Salmon Evolution. The proceeds from this grant
is expected paid out in tranches over the course
of Indre Harøy Phase 1 development.
Both grants are recognized in the financial
accounts as a reduction of fixed assets. As of 31
December 2021 the Company has recognized
NOK 9.5 million in Skattefunn grants and NOK 60
million in Enova grants of which NOK 4.8 million
and NOK 16.9 million have been received by 31
December 2021, respectively.
As per 31 December 2021 the Company had
bank debt of NOK 200 million which relates to
the Construction Facility for Indre Harøy.
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
Assets Equity and Liabilities
Cash
Current liabilities
Equity
Non-current
assets
Current assets
Non-current
liabilities
Annual report 2021
Extending the ocean potential 56
Inside fish tank (March 2022)
Photo: Salmon Evolution
Risk exposure and risk management
Interest Rate
The Group's interest rate risk relates primarily to
borrowings from financial institutions with
variable interest rates. As of 31 December 2021,
outstanding loans from credit institutions
amounted to NOK 200,000,000 and is subject to
an interest rate of NIBOR 3M plus an agreed
margin of 3.75%, thus the Group is exposed to
changes in the interest rate. In order to reduce
the exposure to fluctuations in the interest rate,
the Group has entered into interest rate swap
contracts. For further information see note 14.
Foreign Currency
The Group's foreign currency risk relates to the
Group's operating, investing, and financing
activities denominated in a foreign currency.
This includes the Group's revenues, expenses,
and capital expenditures. As of 31 December
2021, the Group held approx. 2.7 MEUR in cash
balance. The Group's presentation currency is
Norwegian Kroner ("NOK").
Annual report 2021
Extending the ocean potential 57
Credit risk
With respect to credit risk arising from the
financial assets of the Group, which comprise
cash and cash equivalents, and other
receivables, the Group's exposure to credit risk
arises from default of the relevant counterparty,
with a maximum exposure equal to the carrying
amount of these instruments. This risk is not
considered to be material.
Liquidity risk
Management monitors rolling forecasts of the
Group's liquidity reserve (comprising cash and
cash equivalents) based on expected cash
flows. The Group's business plan and growth
strategy is capital intensive, and the Group may
be dependent upon future equity issues and/or
debt financing in order to finance its current
long-term plans.
Covid-19
Salmon Evolution is managing the COVID-19
situation with its highest priority to safeguard its
employees, suppliers, and partners.
The Group has taken necessary measures in all
sites and locations to be able to limit the spread
of the virus. Management has identified the
following risk factors that may impact the Group
going-forward:
- Currency exchange risks which may impact
the construction costs of the land-based salmon
facility, measured in NOK.
- Long-term effects on salmon prices which may
impact the financial results when the Group
starts to generate revenue from the sale of
salmon
- Delays in the construction of the Group's land-
based farming facility as a result of any impacts
on the Company's subcontractors
Annual report 2021
Extending the ocean potential 58
Summary and outlook
2021 included a number of major milestones
and the year can be summarized as a year
with high activity level on all fronts; project
execution, business development, financing
and capital markets and organizational
development.
During the first quarter Salmon Evolution
entered into a joint venture agreement with
Korean seafood giant Dongwon Industries for
the construction of a 16,800 tons HOG land-
based salmon farming facility in South Korea,
marking the start of Salmon Evolution’s
international growth ambitions. Additionally,
the Company raised NOK 500 million in equity
through a significantly oversubscribed private
placement.
In the second quarter the Company entered
into a NOK 625 million debt financing package
with Nordea, Sparebanken Vest, Eksfin and
Innovation Norway, establishing a solid
financial platform for the completion of our
building project.
The third quarter was kicked off with the listing
of the Company’s shares on the Oslo Børs main
list, delivering on the commitment from the
2020 Euronext Growth IPO. In August Salmon
Evolution also acquired Kraft Laks, a well
renowned family owned smolt producer with
decades of sound operating and financial
track record. Through this acquisition Salmon
Evolution secured in-house control of smolt, a
critical input factor in any successful salmon
farming operation.
Further, in the fourth quarter the Company
entered into a strategic feed partnership
agreement with Cargill where Cargill
simultaneously invested USD 5 million in Salmon
Evolution. In December Salmon Evolution also
entered into a green power purchase
agreement with Statkraft, Europe’s leading
renewable energy producer, covering the
vast majority of the Salmon Evolution’s energy
needs through 2023.
Throughout the year there was significant
progress at the construction site and
Company started the commissioning phase
during December and in January the first tank
was filled with water from 95 meters water
depth, a major milestone confirming that the
company has now taken the ocean onshore.
The next major milestone came late March
2022 when the first sections of the facility were
completed and taken over by Salmon
Evolution after which the company released
smolt into the first fish tank and commenced
farming operations at Indre Harøy. The board
is very pleased with the fact that the company
has been able to maintain progress
throughout a challenging pandemic period,
Annual report 2021
Extending the ocean potential 59
delivering on the timeline previously
communicated.
Simultaneously with the high activity and
progress at the building site, Salmon Evolution
has during 2021 recruited a large number of
highly skilled employees to ensure that the
company is ready when entering the
operational phase. A lot of resources are
being put into training of the work force and
the Company has established “Salmon
Evolution Academy” with the purpose of
establishing a framework for developing a
strive for a “best practice” culture across the
group.
Over the coming months the company will
gradually ramp up production. The first smolt
release consisted of around 100,000 fish and
the company plans to reach steady state
smolt release volumes of 280,000 smolts in Q4
2022, around the same time that the first
salmon is expected to be harvested.
The salmon market has been exceptional
strong so far in 2022 and although the
geopolitical situation creates some
uncertainty, the board expects to see a
continued strong salmon market going
forward. This is driven by continued demand
growth and limited global supply growth.
The board also note the ongoing inflation
pressure across several sectors and raw
materials. This may impact both operating
costs and capital expenditures for the industry
over the coming years. However, salmon with
its highly efficient feed conversion ratio and
attractiveness as a protein carrier, should
perform well relative to other proteins.
2022 will be an eventful and very important
year for Salmon Evolution as the company
both will gain valuable experience from the
first production batches and complete phase
1 at Indre Harøy, setting the stage for
significant growth in the years to come. This in
turn will enable Salmon Evolution to take a
global frontrunner position in the future
development of land-based salmon farming.
The Board of Directors of Salmon Evolution ASA
Molde/Ålesund 8 April 2022
Tore Tønseth
Chair
Kristofer Reiten
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Yun Ki Yun
Director
Ingvild Vartdal
Director
Janne-Grethe Strand Aasnæs
Director
Håkon André Berg
CEO
Annual report 2021
Extending the ocean potential 60
Statement from the Board of Directors and the CEO
Today, the Board of Directors and the Chief Executive Officer reviewed and approved the Board of
Director’s report and the consolidated financial statements for Salmon Evolution ASA, for the year
ended 31 December 2021.
The financial statements have been prepared in accordance with IFRSs and IFRICs as adopted by
the EU and applicable additional disclosure requirements in the Norwegian Accounting Act.
To the best of our knowledge:
1. The annual financial statements for 2021 have been prepared in accordance with
applicable financial reporting standards
2. The annual financial statements give a true and fair view of the assets, liabilities, financial
position and profit as a whole as of 31 December 2021 for the Group
3. The Board of Directors’ report for the Group includes a fair review of:
a. the development and performance of the business and the position of the Group,
and
b. the principal risks and uncertainties the Group face
The Board of Directors of Salmon Evolution ASA
Molde/Ålesund 8 April 2022
Tore Tønseth
Chair
Kristofer Reiten
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Yun Ki Yun
Director
Ingvild Vartdal
Director
Janne-Grethe Strand Aasnæs
Director
Håkon André Berg
CEO
Annual report 2021
Extending the ocean potential 61
Group consolidated financial statements (IFRS)
Consolidated statement of income
(NOK thousands) Note
2021
Consolidated
2020
Consolidated
Revenue from contracts w ith customers 9 12 047 -
Other income 9, 22 209 704
Total operating income 12 257 704
Cost of sold goods 13 (908 )
Personnel expenses 10,23 (21 067 ) (8 877 )
Depreciation, amortisation and impairment loss 5,2 (2 229 ) (550 )
Other operating expenses 10,11 (25 894 ) (8 954 )
Operating profit (EBIT) -37 841 (17 676 )
Financial income 12,14 12 852 1 114
Financial expenses 12 (7 335 ) (263 )
Share of net income from associated companies 12,24 (634 ) 0
Net financials 4 884 850
Profit/(loss) before tax (32 957 ) (16 826 )
Income tax expense 6 (1 026 ) -
Change in deferred tax 6 7 539 -
Profit/(loss) for the period (26 444 ) (16 826 )
Basic earnings per share (NOK) 7 (0.11 ) (0.13 )
Diluted earnings per share (NOK) 7 (0.11 ) (0.13 )
Consolidated statement of comprehensive income
NOK thousands Note
2021
Consolidated
2020
Consolidated
Profit/(loss) for the period (26 444 ) (16 826 )
Items that are or may be reclassified to profit or loss:
Currency translation differences 24 (560 )
Total comprehensive income for the period, net of tax (27 004 ) (16 826 )
Annual report 2021
Extending the ocean potential 62
Consolidated statement of financial position
(NOK thousands) Note
31 Dec 2021
Consolidated
31 Dec 2020
Consolidated
Assets
Intangible assets 5,21 62 586 432
Deferred tax asset 6 1 026 0
Assets under construction 5,8 971 122 219 926
Property, plant & equipment 5 15 601 331
Right-of-use assets 20 2 112 1 678
Investments in associated companies 24 26 219 0
Total non-current assets 1 078 664 222 367
Inventory 13 15 050
Other current receivables 8,14,16 106 644 22 638
Cash and cash equivalents 4,15 505 545 647 806
Total current assets 627 239 670 444
Total assets 1 705 903 892 810
Equity and liabilities
Share capital 18 15 540 10 987
Share premium 18 1 334 283 804 369
Other reserves 5 118 2 974
Other equity 0 520
Uncovered losses (57 411 ) (30 407 )
Total equity 1 297 530 788 442
Deferred tax 6 0 0
Long-term interest bearing debt 3,4,19 212 352 0
Lease liabilities - long term 3,4,19,20 892 933
Other long term liabilites 4 7 976 0
Total non-current liabilities 221 221 933
Short-term interest bearing debt 3,4 13 086 40 000
Trade payables 3,4,16,22 162 071 60 104
Social security and other taxes 4,17 4 946 1 144
Lease liabilities - short term 3,4,19,20 1 236 696
Other current liabilities 4,17 5 812 1 491
Total current liabilities 187 152 103 435
Total liabilities 408 373 104 368
Total equity and liabilities 1 705 903 892 810
Annual report 2021
Extending the ocean potential 63
The Board of Directors of Salmon Evolution ASA
Molde/Ålesund 8 April 2022
Tore Tønseth
Chair
Kristofer Reiten
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Yun Ki Yun
Director
Ingvild Vartdal
Director
Janne-Grethe Strand Aasnæs
Director
Håkon André Berg
CEO
Annual report 2021
Extending the ocean potential 64
Consolidated statement of cash flow
(NOK thousands) Note
2021
Consolidated
2020
Consolidated
Cash flows from operating activities
Profit/(loss) for the period (32 957 ) (16 826 )
Adjustments for:
Depreciation, amortisation and impairment loss 5 2 229 550
Net financials 12 (4 884 ) (850 )
Share based payment expenses 23 1 624 2 714
Gain on lease modification 20 66 (7 )
Changes in working capital:
Change in trade receivables (382 )
Change in other current recievables (29 217 ) (20 )
Change in inventory (1 702 )
Change in trade payables (684 ) 2 695
Change in social security and other taxes (4 387 ) 345
Change in other current liabilities 3 584 528
Cash (outflow ) from operating activities -66 710 -10 871
Financial expenses paid (11 980 ) (263 )
Financial income received 11 315 1 114
Income taxes paid
Net cash (outflow ) from operating activities -67 376 -10 021
Cash flow from investment activities
Payments for fixed assets net of government grants 5,8 (797 959 ) (165 529 )
Payments for intangible assets 5 (881 ) (432 )
Acquisition of Kraft Laks 21 (27 249 )
Change in trade payables investments 98 315 0
Investment in associated companies 24 (26 779 ) 0
Net cash (outflow ) from investment activities -754 553 -165 961
Cash flow from financing activities
Proceeds from issue of equity, net of paid transaction costs 517 868 764 355
Proceeds from new borrow ings 4,19 202 600 40 000
Repayment of borrow ings 4,19 (40 800 ) (1 500 )
Repayment of lease liabilities 20 0 (191 )
Net cash (outflow ) from financing activities 679 668 802 664
Net change in cash and cash equivalents (142 261 ) 626 682
Cash and cash equivalents at the beginning of the period 15 647 806 21 124
Cash and cash equivalents at the end of the period 15 505 545 647 806
Annual report 2021
Extending the ocean potential 65
Consolidated statement of changes in equity
Note
Balance at 1 January 2020 18 1 500 49 500 780 0 (13 581 ) 38 198
Profit/loss for the period 0 0 0 0 (16 826 ) (16 826 )
Other comprehensive income 0 0 0 0 0 0
Total comprehensive income 0 0 0 0 (16 826 ) (16 826 )
Capital increase, net of transaction costs 9 457 752 901 0 0 0 762 357
Share options issued 0 0 2 714 0 0 2 714
Share options exercised 30 1 968 (520 ) 520 0 1 998
Transactions w ith ow ners 9 487 754 869 2 194 520 0 767 069
Balance at 31 December 2020 18 10 987 804 369 2 974 520 (30 407 ) 788 442
Balance at 1 January 2021 18 10 987 804 369 2 974 520 (30 407 ) 788 442
Profit/loss for the period 0 0 0 0 (26 444 ) (26 444 )
Other comprehensive income 0 0 0 0 (560 ) (560 )
Total comprehensive income 0 0 0 0 (27 004 ) (27 004 )
Capital increase 18 March 2021 4 167 495 833 0 0 0 500 000
Capital increase 18 March 2021, transaction costs 0 (24 850 ) 0 0 0 (24 850 )
Company registration expenses 0 (6 ) 0 0 0 (6 )
Private placement, 18 August 2021 110 16 490 0 0 0 16 600
Private placement, 22 October 2021 277 42 447 0 0 0 42 724
Share options issued 0 0 1 624 0 0 1 624
Share options exercised 0 0 520 (520 ) 0 0
Transactions w ith ow ners 18 4 553 529 914 2 144 (520 ) 0 536 092
Balance at 31 December 2021 18 15 540 1 334 283 5 118 (0 ) (57 411 ) 1 297 530
Total equity
(NOK thousands)
Share
capital
Share
premium
Other
reserves
Uncovered
losses
Other
equity
Annual report 2021
Extending the ocean potential 66
Notes to the Consolidated Financial Statements
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES…………………………….…… 67
NOTE 2 - CRITICAL ESTIMATES AND JUDGMENTS ………………………………………………. 74
NOTE 3 - FINANCIAL RISK AND CAPITAL MANAGEMENT …………………………….………… 75
NOTE 4 - FINANCIAL ASSETS AND FINANCIAL LIABILITIES…………………………………….….. 77
NOTE 5 - PROPERTY, PLANT AND EQUIPMENT AND INTANGIBLE ASSETS…………………….…… 78
NOTE 6 – TAX ………………………………………………………………………….………80
NOTE 7 - EARNINGS PER SHARE ………………….…………………………………………… 81
NOTE 8 - GOVERNMENT GRANT ……………………………………………………………… 82
NOTE 9 - OPERATING INCOME ……………………………………………………………….. 83
NOTE 10 - PERSONNEL EXPENSES, REMUNERATION TO THE BOARD AND AUDITOR'S FEE ….…….. 83
NOTE 11 - OTHER OPERATING EXPENSES ……………………………………………………… 85
NOTE 12 - FINANCIAL INCOME AND EXPENSES ……………………………………………….. 85
NOTE 13 - INVENTORY …………………………………………………………………………86
NOTE 14 - DERIVATIVE FINANCIAL INSTRUMENTS ……………………………………………… 86
NOTE 15 - CASH AND RESTRICTED CASH ……………………………………………………… 87
NOTE 16 - OTHER CURRENT RECEIVABLES …………………………………………………….. 87
NOTE 17 - TRADE AND OTHER CURRENT LIABILITIES ……………………………………………. 88
NOTE 18 – SHARE CAPITAL …………………………………………………………………… 88
NOTE 19 - INTEREST-BEARING DEBT …………………………………………………………… 90
NOTE 20 - LEASES ……………………………………………………………………………. 92
NOTE 21 - ACQUISITION OF KRAFT LAKS …………………………………………………….. 93
NOTE 22 - RELATED PARTY BALANCES AND TRANSACTIONS …………………………………... 94
NOTE 23 - SHARE BASED PAYMENTS ………………………………………………………….. 95
NOTE 24 - INVESTMENTS IN ASSOCIATED COMPANIES ………………………………………… 97
NOTE 25 - EVENTS AFTER THE REPORTING DATE ………………………………………………. 98
Annual report 2021
Extending the ocean potential 67
Note 1 Summary of significant accounting principles
General information
Salmon Evolution ASA (the “Company”) and its subsidiaries, Salmon Evolution Norway AS,
Salmon Evolution Asia AS and Kraft Laks AS, (together Salmon Evolution, "SE" or the “Group") is
a Norwegian business headquartered in Hustadvika municipality in Møre og Romsdal. SE is in
the process of constructing a land-based salmon farming facility with a planned annual
harvesting capacity of 31,500 tonnes HOG fully developed. The build-out is expected to be in
three phases, of which phase 1 which is currently under construction has a planned annual
production of 7,900 tons HOG. Phase 1 consists of 12 large grow out tanks with corresponding
infrastructure and is expected to be completed during Q4 2022. Initial production started in
March 2022 and first harvest is expected in Q4 2022. SE will operate a hybrid flowthrough system
("HFS"), replacing the water every four hours with clear and fresh water from the Norwegian
coast. Phase II is expected to consist of an additional 12 grow out tanks which is expected to
generate an additional 7,900 tons HOG of production. The last construction phase, phase 3,
consists of an additional 24 grow out tanks bringing the total expected production volume to
31,500 tons HOG per annum.
Consolidation
Salmon Evolution ASA was incorporated on 23 July 2020 prior to the planned listing on Euronext
Growth (previously Merkur Market) which was completed on 18 September 2020. In March 2021
the company completed a conversion to being a public limited liability company, and further
in July 2021 the company shares were listed at Oslo Stock Exchange. These consolidated
statements for the period ended 31 December 2021 include Salmon Evolution ASA together
with its subsidiaries Salmon Evolution Norway AS, Salmon Evolution Asia AS and Kraft Laks AS.
Please note that the comparable financial statement periods (i.e. for the period ended 31
December 2020) only reflects Salmon Evolution Norway AS.
Consolidation principles
Subsidiaries are all entities over which the Group has control. The Group considers control over
an entity to exist when the Group is exposed to, or has the right to, variable returns from its
involvement with the entity and can affect those returns through its ability to direct the
operations of the entity. Consolidation of a subsidiary begins when the Group obtains control
over the subsidiary and ceases when the Group loses control of the subsidiary. The
accompanying consolidated financial statements include the accounts of the subsidiaries
mentioned above. When necessary, adjustments are made to the local financial statements
of the Group subsidiaries to conform with the consolidated Group’s accounting policies
presented under IFRS. All intercompany balances, transactions, and unrealized gains from
intercompany transactions are eliminated upon consolidation. Unrealized losses from
intercompany transactions are also eliminated upon consolidation unless the transaction
provides evidence of an impairment of the transferred asset. The assets, liabilities, income, and
expenses of a subsidiary acquired or disposed of during the year are included in the
consolidated financial statements from the date in which the Group gains control until the date
in which the Group ceases to control the subsidiary.
Annual report 2021
Extending the ocean potential 68
Basis of preparation
The consolidated financial statements of the Group for the year ended 31 December 2021
comply with IFRS as endorsed by EU. The consolidated financial statements ended 31
December 2021 comprise the income statement, statement of comprehensive income,
statement of financial position, statement of cash flow, statement of changes in equity and
note disclosures.
Going concern
The Group has adopted the going concern basis in preparing its consolidated financial
statements. When assessing this assumption, management has assessed all available
information about the future. This comprises information about net cash flows from existing
customer contracts and other service contracts, debt service and obligations. After making
such assessments, management has a reasonable expectation that the Group has adequate
resources to continue its operational existence for the foreseeable future.
Basis of measurement
The financial statements have been prepared under the historical cost convention.
Use of estimates
Critical accounting judgments and estimates are disclosed in note 2.
Functional and presentation currency
Items included in the financial statements are presented in the currency of the primary
economic environment in which the entity operates (‘the functional currency’). The financial
statements are presented in Norwegian kroner (NOK), which is the Groups' functional and
presentation currency.
Transactions and balances
Transactions in currencies other than the entity's functional currency (foreign currency) are
translated into the functional currency using the exchange rates at the dates of the
transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from
the translation of monetary assets and liabilities denominated in foreign currencies at year end
exchange rates are generally recognized in profit or loss. Foreign exchange gains and losses
that relate to borrowings are presented in the statement of profit or loss, within finance costs.
All other foreign exchange gains and losses are presented in the statement of profit or loss on
a net basis within other financial items.
Non-monetary items that are measured at fair value in a foreign currency are converted to
NOK using the exchange rates at the date when the fair value was determined. Translation
differences on assets and liabilities carried at fair value are reported as part of the fair value
gain or loss. Non-monetary items that are measured in terms of historical cost in a foreign
currency are not subsequently revaluated.
Annual report 2021
Extending the ocean potential 69
Revenue
Revenue from contracts with customers as defined in IFRS 15 is recognised when control of the
goods are transferred to the customer at an amount that reflects the consideration to which
the group expects to be entitled in exchange for those goods.
Revenue for the Group derives mainly from the sale of smolt from contract with customer. The
Group recognizes revenue from the sale of goods at the point in time when control of the
goods is transferred to the customer.
Government grants
Government grants are recognized when there is reasonable assurance that the grant will be
received and when the Company is compliant with all conditions attached. When the grant
relates to an expense item, it is recognized as income over the period that the costs it is
intended to compensate are expensed. When the grant relates to an asset, it is deducted from
the carrying amount of the asset - the grant is then recognized in profit or loss over the useful
life of a depreciable asset by way of a reduced depreciation charge. Government grants are
presented in the accompanying statements of profit and loss as other income.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and
accumulating sick leave that are expected to be settled wholly within 12 months after the end
of the period in which the employees render the related service are recognised in respect of
employees’ services up to the end of the reporting period and are measured at the amounts
expected to be paid when the liabilities are settled. The liabilities are presented as current
employee benefit obligations in the balance sheet.
Information relating to the Company's employee option scheme is set out in note 23. The fair
value of options granted under the scheme is recognised as an employee benefits expense
with a corresponding increase in equity. The total amount to be expensed is determined by
reference to the fair value of the options granted:
- including any market performance conditions (e.g. the entity’s share price)
- excluding the impact of any service and non-market performance vesting conditions (eg
profitability, sales growth targets and remaining an employee of the entity over a specified
time period), and
- including the impact of any non-vesting conditions (e.g. the requirement for employees to
save or holdings shares for a specific period of time).
The total expense is recognised over the vesting period, which is the period over which all of
the specified vesting conditions are to be satisfied.
Taxes
Income Tax
The tax expense represents the sum of the tax currently payable and deferred tax.
Annual report 2021
Extending the ocean potential 70
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net
profit as reported in the income statement because it excludes items of income or expense
that are taxable or deductible in other years and it further excludes items that are never
taxable or deductible. The Company’s liability for current tax is calculated using tax rates that
have been enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the
carrying amounts of assets and liabilities in the financial statements and the corresponding tax
bases used in the computation of taxable profit and is accounted for using the balance sheet
liability method. Deferred tax liabilities are generally recognized for all taxable temporary
differences and deferred tax assets are recognized to the extent that it is probable that taxable
profits will be available against which deductible temporary differences can be utilized. Such
assets and liabilities are not recognized if the temporary difference arises from the initial
recognition of goodwill or from the initial recognition (other than in a business combination) of
other assets and liabilities in a transaction that affects neither the taxable profit nor the
accounting profit. Deferred tax liabilities are recognized for taxable temporary differences
arising on investments in subsidiaries and associates, and interests in joint ventures, except
where the Group is able to control the reversal of the temporary difference and it is probable
that the temporary difference will not reverse in the foreseeable future. Deferred tax assets
arising from deductible temporary differences associated with such investments and interests
are only recognized to the extent that it is probable that there will be sufficient taxable profits
against which to utilize the benefits of the temporary differences and they are expected to
reverse in the foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and
reduced to the extent that it is no longer probable that sufficient taxable profits will be available
to allow all or part of the asset to be recovered. Deferred tax is calculated at the tax rates that
are expected to apply in the period when the liability is settled, or the asset is realized based
on tax laws and rates that have been enacted or substantively enacted at the balance sheet
date. Deferred tax is charged or credited in the income statement, except when it relates to
items charged or credited in other comprehensive income, in which case the deferred tax is
also dealt with in other comprehensive income. The measurement of deferred tax liabilities and
assets reflects the tax consequences that would follow from the manner in which the Group
expects, at the end of the reporting period, to recover or settle the carrying amount of its assets
and liabilities. Deferred tax assets and liabilities are offset when there is a legally enforceable
right to set off current tax assets against current tax liabilities and when they relate to income
taxes levied by the same taxation authority and the Group intends to settle its current tax assets
and liabilities on a net basis.
Current tax and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that
are recognized in other comprehensive income or directly in equity, in which case, the current
and deferred tax are also recognized in other comprehensive income or directly in equity
respectively.
Annual report 2021
Extending the ocean potential 71
Deferred tax benefit has historically not been recognized in the balance sheet as the Company
is in its start-up phase and does not have any historical results to refer to when assessing whether
future taxable profits will be sufficient to utilize the tax benefit. As of 31.12.2021 there is a basis
for payable tax in the subsidiary Kraft Laks AS. This will be offset with a group contribution from
Salmon Evolution ASA. The tax effect of the group contribution is recognized as a deferred tax
asset.
Leases
All leasing agreements with a duration exceeding 12 months are capitalized as financial leases.
The Group assesses whether a legally enforceable contract is or contains a lease at the
inception date of the contract. The assessment includes several criteria to be determined
based on judgment that includes whether there is an identifiable asset in connection to the
lease, whether the Group has the right to control the use of the identifiable asset, and whether
the Group can obtain substantially all economic benefits from the identifiable asset.
The Group recognizes a right-of-use (“ROU”) asset and a lease liability at the lease
commencement date. The lease liability is calculated based on the present value of the
contractual minimum lease payments using the implicit interest rate of the lease. The Group
uses the incremental borrowing rate in the case the implicit rate cannot be readily determined
from the lease contract. The contractual minimum lease payments consist of fixed or variable
payments, including those resulting from options in which management is reasonably certain it
will exercise during the lease term. The lease liability is subsequently measured at amortized
cost under the effective interest rate during the lease term and may also be adjusted to
management’s reassessment of future lease payments based on options exercised,
renegotiations, or changes of an index rate.
The ROU asset is calculated based on the lease liability, plus initial direct costs towards the
lease, and less any incentives granted by the lessor. The ROU asset is subsequently amortized
under the straight-line method under the shorter of the lease term or the useful life of the
underlying asset and is included as part of depreciation and amortization in the
accompanying statements of other comprehensive income.
Leases that fall under the IFRS 16 short-term exception are recognized on a straight-line method
over the lease term.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents
includes cash on hand, deposits held at call with financial institutions, other short-term, highly
liquid investments with original maturities of three months or less that are readily convertible to
known amounts of cash and which are subject to an insignificant risk of changes in value.
Trade receivables, loans and other receivables
Trade receivables, loans and other receivables are recognized initially at fair value and
subsequently measured at amortized cost using the effective interest method, less provision for
impairment. See note 4 and 16 for further information about the Group’s accounting for trade
receivables, loans, other receivables and credit risk.
Annual report 2021
Extending the ocean potential 72
Property, plant & equipment
Property, plant, and equipment is capitalized at acquisition cost, which includes capitalized
borrowing costs, less accumulated depreciation and costs include expenditures that are
directly attributable to the acquisition and placement of fixed assets in service. Costs of major
replacements and renewals that substantially extend the economic life and functionality of
fixed asset are capitalized. Costs associated with normal maintenance and repairs are
expensed as incurred.
Assets are normally considered property, plant, and equipment if the useful economic life
exceeds one year. Straight-line depreciation is applied over the useful life of property, plant,
and equipment based on the asset’s historical cost and estimated residual value at disposal. If
a substantial part of an asset has an individual and different useful life, that portion is
depreciated separately. The asset’s residual value and useful life are evaluated annually. Gains
or losses arising from the disposal or retirement of an asset are determined as the difference
between the sales proceeds and the carrying amount of the asset and recognized as part of
other income in the accompanying statements of other comprehensive income.
Depreciation is charged to expense when the property, plant or equipment is ready for use or
placed in service. As such, assets under construction are not depreciated.
Intangible assets
Expenses related to research activities are expensed as incurred. Expenses related to
development activities are capitalized if the product or process is technically and
commercially feasible, and the Group has adequate resources to complete the development.
Patents are capitalized and measured at cost less accumulated amortization and any
accumulated impairment losses, if any.
Impairment
Management reviews long-lived assets for impairment annually, or more frequently, whenever
events or changes in circumstances indicate that the carrying value may not be recoverable.
The recoverable amount is the higher of an asset’s fair value less costs of disposal and value in
use.
If an evaluation is required, the estimated future undiscounted cash flows associated with the
asset are compared to the asset’s carrying value to determine if an adjustment for impairment
to such asset is necessary. The effect of any impairment would be to expense the difference
between the fair value of such asset and it’s carrying value. Non-financial assets that suffered
an impairment are reviewed for possible reversal of the impairment at the end of each
reporting period. As of 31 December 2021, and 2020, management did not consider an
allowance for impairment necessary for long-lived assets.
Classification of current and non-current items
Assets are classified as current when it expected to be realized or sold, or to be used in the
Group's normal operating cycle or falls due or is expected to be realized within 12 months after
the end of the reporting date. Assets that do not fall under this definition is classified as non-
current. Liabilities are classified as current when they are expected to be settled in the normal
operating cycle of the Group or are expected to be settled within 12 months after the reporting
date, or if the Group does not have an unconditional right to postpone settlement for at least
Annual report 2021
Extending the ocean potential 73
12 months after the reporting date. Liabilities that do not fall under this definition are classified
as non-current.
Acquisitions
In the relevant period The Group have had activities related to acquisition activities.
In accordance with IFRS, goodwill is allocated to each of the acquirer’s cash generating units,
or group of cash generating units, that are expected to benefit from the business combination.
This can include existing CGU’s of the acquirer irrespective of whether other assets or liabilities
of the acquiree are assigned to those units.
In identifying a CGU, an entity considers cash flows from the parties outside of the entity. If an
active market exists for the output produced by an asset or group of assets, these assets or
group of assets shall be identified as a CGU, even if some or all of the output is used internally.
In identifying whether cash inflows from an asset (or groups of assets) is largely independent of
the cash inflows from other assets (or groups of assets). An entity considers various factors
including:
- How management monitors the entity’s operations (such as by product lines, businesses,
individual locations, districts, or regional areas); or
- How management makes the decisions about continuing or disposing of the entity’s assets
and operations
According to IFRS 3 transactions costs are not recognized in the balance sheet but taken to
profit and loss.
Trade and Other Receivables
Trade receivables are initially recognized at amortized cost, less a provision for expected credit
losses. Credit loss provisions are based on individual customer assessments over each reporting
period and not on a 12-month period.
Borrowings
Borrowings are initially recognized at fair value, net of transaction costs incurred. Borrowings
are subsequently measured at amortized cost. Any difference between the proceeds (net of
transaction costs) and the redemption amount is recognized in profit or loss over the period of
the borrowings using the effective interest method.
Borrowings are derecognized when the obligation specified in the contract is discharged,
cancelled or expired. The difference between the carrying amount of a financial liability that
has been extinguished or transferred to another party and the consideration paid, including
any non-cash assets transferred or liabilities assumed, is recognized in consolidated statement
of profit or loss within the line other financial items, net.
Borrowings are classified as current liabilities unless the Group has an unconditional right to
defer settlement of the liability for at least 12 months after the reporting period.
The Group has entered into loan agreements during 2021, of which the following principles
related to borrowing costs have been applied, in accordance with IAS 23:
Annual report 2021
Extending the ocean potential 74
General and specific borrowing costs that are directly attributable to the acquisition,
construction or production of a qualifying asset are capitalized during the period of time that
is required to complete and prepare the asset for its intended use or sale. Qualifying assets are
assets that necessarily take a substantial period of time to get ready for their intended use or
sale.
Other borrowing costs are expensed in the period in which they are incurred.
Trade and Other Payables
Trade and other payables represent unpaid liabilities for goods and services provided to the
Group prior to the end of the financial year and are presented as current liabilities unless
payment is not due within 12-months after the reporting period. Trade and other payables are
recognized initially at their fair value and are subsequently measured at amortized cost using
the effective interest method.
Pensions
The Group offers a defined contribution plan to its employees and pays contributions to publicly
or privately administered pension insurance plans on a mandatory, contractual, or voluntary
basis. The Group has no further payment obligations once the contributions have been paid.
Contributions are recognized as employee benefit expense when they are due and are
included as part of salary and personnel costs in the statement of profit and loss. Prepaid
contributions are recognized as an asset to the extent in which a cash refund or a reduction in
the future payments is available.
Statement of cash flows
The accompanying statements of cash flows are prepared in accordance with the indirect
method.
Note 2 Critical estimates and judgments
The preparation of financial statements requires the use of accounting estimates which, by
definition, will seldom equal the actual results. Management also needs to exercise judgement
in applying the Group’s accounting policies.
In the process of applying the Group's accounting policies, management has made the
following judgements, which have the most significant effect on the amounts recognised in the
Group's financial statements:
1) Capitalized costs as assets under construction
As part of the construction of the Group's production facilities, the Group has capitalized
certain costs (such as personnel expenses, rent of premises and equipment and other project
related costs), as "assets under construction" in accordance with IAS 16 based on an allocation
key. The allocation key is employee-based and has been calculated based on the employees
that are directly involved in the assets under construction's share of the total salary in the Group.
Reference is made to note 5 for details of additions to "assets under construction".
Annual report 2021
Extending the ocean potential 75
Note 3 Financial risk and capital management
The Group's financial assets and liabilities include trade and other receivables, trade and other
payables, cash, and borrowings necessary for its operations. The Group's risk management is
carried out by the Group's finance department. The Group is exposed to market risk, credit risk,
and liquidity risk.
Market risk
Interest Rate
The Group's interest rate risk relates primarily to borrowings from financial institutions with
variable interest rates. As of 31 December 2021, outstanding loans from credit institutions
amounted to NOK 200,000,000 (Construction Facility) and is subject to an interest rate of NIBOR
3M plus an agreed margin of 3.75%, thus the Group is exposed to changes in the interest rate.
In order to reduce exposure to fluctuations in the interest rate the Group has entered into
interest rate swap contracts with Nordea and Sparebanken Vest, of NOK 150 million and NOK
50 million, respectively. For further information see note 14.
This loan is part of a financing package consisting of the following:
Facility A: NOK 525 million senior secured credit facility with Nordea and Sparebanken Vest
which will be used to finance construction capex for Indre Harøy Phase 1 (the “Construction
Facility”)
Facility B: NOK 525 million in long-term debt which will refinance the Construction Facility upon
completion of Indre Harøy Phase 1 and consisting of the following:
- NOK 385 million senior secured term loan facility with Nordea and Sparebanken Vest (the
“Term Loan Facility”)
- NOK 140 million in a separate long-term loan facility with Innovation Norway (the “IN Facility”)
NOK 100 million senior secured overdraft facility with Nordea (the “Overdraft Facility”) which
will be used for working capital purposes, hereunder financing of biomass and receivables
The Construction Facility and the Term Loan Facility are partly guaranteed by Eksfin.
Foreign Currency
The Group's foreign currency risk relates to the Group's operating, investing, and financing
activities denominated in a foreign currency. This includes the Group's revenues, expenses, and
capital expenditures. As of 31 December 2021, the Group held approx. 2.7 MEUR in cash
balance. The Group's presentation currency is Norwegian Kroner ("NOK").
Interest rate sensitivity
(NOK tho usands)
2021 2020
Interest expense effect of a 1% increase on floating interest rate 2 000 111
Annual report 2021
Extending the ocean potential 76
Credit risk
With respect to credit risk arising from the financial assets of the Group, which comprise cash
and cash equivalents, and other receivables, the Group's exposure to credit risk arises from
default of the counterparty, with a maximum exposure equal to the carrying amount of these
instruments. This risk is not considered to be material.
Liquidity risk
Management monitors rolling forecasts of the Group's liquidity reserve (comprising cash and
cash equivalents) on the basis of expected cash flows. The Group's business plan and growth
strategy is capital intensive, and the Group may be dependent upon future equity issues
and/or debt financing in order to finance its current long-term plans.
The table below presents the maturities on the Group's financial liabilities. The amounts
disclosed in the table are the contractual undiscounted cash flows.
Covid-19
Salmon Evolution is managing the COVID-19 situation with its highest priority to safeguard its
employees, suppliers, and partners.
The company has taken necessary measures in all sites and locations to be able to limit the
spread of the virus. At the same time, the company works to ensure that the construction work
progress on time and budget.
Management has identified the following risk factors that may impact the Group going-
forward:
- Currency exchange risks which may impact the construction costs of the land-based salmon
facility, measured in NOK.
- Long-term effects on salmon prices which may impact the financial results when the Group
starts to generate revenue from the sale of salmon
- Delays in the construction of the Group's land-based farming facility as a result of any impacts
on the Group's subcontractors
31 December 2021
(NOK tho usands)
Borrowings 200 12 886 212 352
Lease liabilities 252 1 975 6 660
Trade payables 162 071 0 0
Total financial liabilities 162 523 14 861 219 012
31 December 2020
(NOK tho usands)
Borrowings 0 40 000 0
Lease liabilities 171 526 933
Trade payables 60 104 0 0
Total financial liabilities 60 275 40 526 933
Less than 3
months
3-12 months
1-5 years
Less than 3
months
3-12 months
1-5 years
Annual report 2021
Extending the ocean potential 77
Note 4 Financial assets and financial liabilities
Financial assets and financial liabilities are recognized at amortised cost with the exception of
derivative instruments, hereunder interest rate swaps and currency exposure under power
hedging contracts.
Interest rate swaps are valued at marked value which as per 31 December 2021 was NOK 1
263 thousands. Changes in market value is registered as unrealized profit under financial
income and allocated to other current receivables in the balance sheet.
The Group has entered into a fixed price power purchase contract in EUR. The net present
value effect resulting from changes in EURNOK forward rates per 31 December 2021 compared
to the transaction date is registered as unrealized profit under financial income and allocated
to other current receivables in the balance sheet. As per 31 December 2021 NOK 274
thousands were recognized.
Financial assets
(NOK thousands)
31 dec 2021 31 Dec 2020
Financial assets at amortised cost:
Cash and cash equivalents 505 545 647 806
Other current receivables 106 644 22 638
Inventory 15 050 0
Total financial assets 627 239 670 444
Financial liabilities
(NOK thousands)
31 Dec 2021 31 Dec 2020
Financial liabilities at amortised cost:
Long-term interets bearing debt 212 352 0
Short-term interest bearing debt 13 086 40 000
Lease liabilities 2 129 1 630
Trade payables 162 071 60 104
Social security and other taxes 4 946 1 144
Other long term liabilites 7 976 0
Other current liabilities 5 812 1 491
Total financial liabilities 408 373 104 368
Interest bearing debt
NOK thousands
31 Dec 2021 31 Dec 2020
Long-term interes bearing debt 212 352 0
Short-term interest bearing debt 13 086 40 000
Lease liabilities 2 129 1 630
Other long term liabilites 7 976 0
Total interest bearing debt 235 543 41 630
Current portion 14 322 40 696
Non-current portion 213 245 933
Total interest bearing debt 227 567 41 630
Annual report 2021
Extending the ocean potential 78
Note 5 Property, plant and equipment and intangible assets
Straight-line depreciation is applied over the useful life of property, plant, and equipment
based on the asset’s historical cost and estimated residual value at disposal. Depreciation is
charged to expense when the property, plant or equipment is ready for use or placed in
service. As such, assets under construction are not depreciated. Assets under construction as
of 31 December 2021 consisted mainly of capitalized costs related to the turnkey project with
Artec Aqua for building a land-based salmon farming facility at Indre Harøy, Møre.
On August 16 2021, the Group entered into a share purchase agreement to purchase 100% of
the shares in Kraft Laks AS. In relation to this acquisition excess values were allocated to both
tangible and intangible assets. The tangible assets that were used was property, buildings,
facility, and machinery & equipment. The identified intangible assets are split into two
categories, value of license and assembled workforce of the acquired company. The value of
the license is calculated using both market value for smolt production licenses and available
financial statements for the acquired company, resulting in a value of NOK 13.5 million. In
addition to this it was allocated NOK 44.2 million in goodwill in this transaction. The main factor
that leads to this recognition is synergies that gives the company the ability to be self-supplied
with smolt for Phase 1, and potentially Phase 2, at Indre Harøy. In addition, there is a technical
goodwill created by deferred tax.
Because of the short period of time since the acquisition of Kraft Laks AS, goodwill is still not
tested for impairment. Such testing will be done at least yearly, or when there are indications
that impairment evaluation is needed.
The main factor that leads to this recognition is synergies that gives the company the ability to
be self-supplied with smolt for Phase 1, and potentially Phase 2, at Indre Harøy. In addition,
there is a technical goodwill created by deferred tax.
(NOK thousands)
Goodwill
Intangible
assets
Assets under
construction
Property, plant &
equipment
Total
Cost 1 January 2021 0 432 219 926 739 221 097
Additions 44 235 17 919 751 196 15 834 829 184
Disposals 0 0 0 0 0
Cost 31 December 2021 44 235 18 351 971 122 16 573 1 050 281
Accumulated depreciation 1 January 2021 0 0 0 (409) (409)
Depreciation for the period 0 0 0 (563) (563)
Net book value 31 December 2021 44 235 18 351 971 122 15 601 1 049 309
(NOK thousands)
Intangible
assets
Assets under
construction
Fixtures and
fittings
Total
Cost 1 January 2020 0 25 546 450 25 997
Additions 432 194 379 289 195 100
Disposals 0 0 0 0
Cost 31 December 2020 432 219 926 739 221 097
Accumulated depreciation 1 January 2020 0 0 (99) (99)
Depreciation for the period 0 0 (310) (310)
Net book value 31 December 2020 432 219 926 331 220 688
Annual report 2021
Extending the ocean potential 79
As part of additions of intangible assets, NOK 3.1 million is calculated as water rights, and
buildings and land are calculated with a value of NOK 4.7 million. Both are based on agreed
payments from Kraft Laks AS to landowners.
Capitalization of costs as asset under construction:
Costs incurred recognized as part of "Other operating expenses" in the "Consolidated
Statement of Profit or Loss" during 2021 has been capitalized as of 31 December 2021 as these
costs are deemed to be part of the ongoing assets under construction and qualify for
capitalization in accordance with IAS 16. As a result, the reported "Other operating expenses"
in 2021 reflects the incurred costs during this period, net of such capitalized costs related to the
entire 12-months period ending 31 December 2021 which amounted to approximately NOK
21.0 million, including salaries. Capitalized interest amounts to NOK 6.1 million.
Contractual and financial commitments
Construction of phase 1 of the Group’s land-based salmon farming facility at Indre Harøy is
planned completed during the fourth quarter of 2021. As per 31 December 2021 the remaining
capital expenditure is estimated to NOK 480 million and split as follows:
Capitalized internal cost 01.01.2021 Additions 31.12.2021
Salary 14 446 18 185 32 631
Rental/equipment 1 630 2 825 4 454
Interest 447 6 079 6 526
Total 16 522 27 089 43 611
(NOK thousands) 31 Dec 2021
Engineering and project management
71 000
Buildings 124 000
Equipment and process installation
261 000
Other 24 000
Total financial comittments 480 000
Annual report 2021
Extending the ocean potential 80
Note 6 Tax
Calculation of deferred tax/deferred tax benefit
(NOK tho usands) 2021 2020
Intangible assets 13 487 0
Fixed assets (1 297) (4 757)
Inventories 14 939
Right-of-use assets 9 913 1 678
Lease liabilities (10 105) (1 755)
Other current liabilities 18 0
Net temporary differences 26 954 (4 833)
Tax losses carried forward (143 703) (74 895)
Change due to unrealized financial instruments 1 538
Basis for deferred tax (115 211) (79 728)
Deferred tax (22%) (25 346) (17 540)
Deferred tax benefit not recognized in the balance sheet* 24 320 17 540
Deferred tax in the balance sheet (1 026) 0
Basis for income tax expense, changes in deferred tax and tax payable
(NOK tho usands)
2021 2020
Result before taxes (32 957) (16 826)
Permanent differences in relation to equity transactions (24 622) (45 728)
Permanent differences in relation to skattefunn (4 750) (4 750)
Other permanent differences 831 2 730
Basis for the tax expense in the current year (61 498) (64 574)
Change in temporary differences (31 788) 4 594
Change in temporary differences due to acquisition 27 697
Result Kraft Laks AS to payable tax (5 306)
Result Kraft Laks AS before acquisition 2 087
Change in tax losses carried forward (68 808) (59 980)
Basis for payable taxes in the income statement 4 663 0
Components of the tax expense
(NOK tho usands)
2021 2020
Payable tax on this year's result 1 026 -
Total payable tax 1 026 -
Change in deferred tax (7 806) (14 206)
Deferred tax in relaton to aquisition of Kraft Laks AS (6 513)
Change in deferred tax not shown in the balance sheet 6 780 14 206
Tax expense (6 513) 0
*Deferred tax benefit has historically not been recognized in the balance sheet as the Company is in its start-up phase and does not
have any historical results to refer to when assessing whether future taxable profits will be sufficient to utilize the tax benefit. As of
31.12.2021 there is a basis for payable tax in the subsidiary Kraft Laks AS. This will be offset with a group contribution from Salmon
Evolution ASA. The tax effect of the group contribution is recognized as a deferred tax asset.
Annual report 2021
Extending the ocean potential 81
Note 7 EPS
Basic earnings per share calculations are based on the weighted average number of common
shares outstanding during the period.
Diluted earnings per share calculations are performed using the weighted average number of
common shares and dilutive common shares equivalents outstanding during each period.
Options are dilutive when they result in the issue of ordinary shares for less than the average
market price of ordinary shares during the period. The difference between the number of
ordinary shares issued and the number of ordinary shares that would have been issued at the
average market price in the period is treated as an issue of ordinary shares for no consideration.
1) 2021: The Company issued 83,333,333 new shares in a capital raise in March 2021. Further on
16 August the company carried out a private placement in connection with the acquisition of
Kraft Laks AS where the company as part of the settlement issued 2,190,694 new shares. In
addition, in October the company carried out a new private placement with Cargill where it
was issued 5,541,374 new shares. As such, the weighted average number of shares outstanding
in 2021 has been calculated by applying a weight of 2/12 of the number of shares before the
capital raise in March (219,731,088), 6/12 of the number of shares after the capital raise
(303,064,421), 1/12 share after the acquisition of Kraft Laks (305,255,115), and 3/12 after the
private placement with Cargill of the total number after the final adjustment in October 2021
(310,796,489).
2020: Salmon Evolution AS issued 77,503,182 new shares in a capital raise in March 2020. On July
3rd 2020, Salmon Evolution Holding AS was incorporated by issuing 600,000 shares. Further, the
Company carried out a private placement including contribution in kind issuing 119,131,088
Reconciliation of the tax expense with the nominal tax rate
(NOK tho usands)
2021 2020
Result before taxes (32 957) (16 826)
Calculated tax (22%) (7 251) (3 702)
Tax expense (6 513) -
Difference 738 3 702
The difference consists of:
Tax on permanent differences (6 043) (10 505)
Change in deferred tax not shown in the balance sheet 6 780 14 206
Sum explained differences 738 3 702
(NOK tho usands)
2021
Consolidated
2020
Consolidated
Loss atributable to the equity owners of the Parent company (32 957) (16 826)
Loss for calculation of diluted earnings per share (32 957) (16 826)
Weighted average number of shares outstanding 291 291 107 126 555 681
Dilutive options - -
Average number of shares and options used in calculation for diluted EPS 291 291 107 126 555 681
Basic earnings per share (NOK) (0,11) (0,13)
Diluted earnings per share (NOK) (0,11) (0,13)
Annual report 2021
Extending the ocean potential 82
new shares on 23. July 2020. Lastly, the Company issued 100,000,000 new shares in connection
with the initial public offering of its shares in connection with the listing on Merkur Market. The
weighted average number of shares outstanding as of 31 December 2020 has been calculated
by applying a weight of 3/12 to the number of shares before the capital raise in March 2020
(30,000,000 shares), 4/12 to the total number of shares after the capital raise (107,503,182
shares), 1/12 to the the total number of shares after the private placement (119,731,088 shares)
and 4/12 to the total number of shares after the initial public offering (219,731,088 shares)
Note 8 Government grants
The Group has received a commitment from The Norwegian Research Council (Norsk
Forskningsråd) for three projects. The total grant is NOK 14,250,000 over three years (2020-2022)
and is related to the tax incentive scheme "SkatteFUNN" which is a government program
designed to stimulate research and development (R&D) in Norwegian trade and industry. The
receivable is accounted for as a short-term receivable from the tax authorities. In the financial
accounts, the receivable related to the grant is netted against the related asset's acquisition
cost. Grants for 2021 amounted to NOK 4,750,000, the same as for 2020.
Further, the Group has received a commitment from Enova SF, an entity owned by the Ministry
of Climate and Environment which contributes to reduced greenhouse gas emissions,
development of energy and climate technology and a strengthened security of energy supply.
The total commitment from Enova is up to NOK 96.8 million and the grant is given over a period
of three years. The receivable is accounted for as a short-term receivable from the tax
authorities. In the financial accounts, the receivable related to the grant is netted against the
related asset's acquisition cost. Grants for 2021 amounted to NOK 59.9 million.
(NOK thousands) 2021 2020
Systems for water treatment in large-scale land based salmon farming 11 825 13 542
Logistics systems in large-scale land-based salmon farming 6 392 8 775
Washing and disinfection in land-based salmon farming 7 827 9 576
Total "SkatteFUNN" project costs 26 044 31 893
(NOK thousands)
2021 2020
Energy-efficient land-based food fish plant for salmon 119 860 876
Total "Enova" project costs 119 860 876
Annual report 2021
Extending the ocean potential 83
Note 9 Operating income
Operating income in 2021 was mainly related to sale of smolt from Kraft Laks AS to another
Norwegian salmon producer. Other income in 2021 was related to sale of some equipment to
K Smart Farming Co., Ltd. in South Korea.
Other income in 2020 was mainly related to the following two transactions. NOK 667 thousand
related to the sale of surplus material from the development area, while NOK 30 thousand
related to sale of consulting hours. The remaining part of other income related to gains resulting
from leasing modification, further described in note 20.
Note 10 Personnel expenses, remuneration to the board and
auditor's fee
During the ordinary course of business, the Group capitalizes portions of total salary and
personnel costs towards assets under construction.
Norwegian entities are obligated to establish a mandatory company pension. This obligation is
fulfilled under the current pension plan. No loans or guarantees have been given to the
members of the board of directors or executive management.
(NOK tho usands) 2021 2020
Revenue from contracts with customers 12 047 0
Other income 209 704
Total other operating expenses 12 257 704
(NOK tho usands)
2021 2020
Salaries 31 879 8 479
Social security 5 409 1 312
Pensions 1 029 500
Other benefits 2 018 797
Share-based payments 2 714
Gross personnel expenses 40 335 13 802
- Capitalized costs (19 269) (4 925)
Total personnel expenses recognized in P&L 21 067 8 877
Number of full-time employment equivalents 19 8
Remuneration and compensation to members of the board
(NOK tho usands)
2021 2020
Tore Tønseth (Chairman of the Board) 500 80
Kristofer Reiten (Member of the Board) 250 240
Glen Bradley (Member of the Board) 250 140
Peder Stette (Member of the Board) 250 140
Anne Breiby (Member of the Board) 250 0
Yun Ki Yun (Member of the board) - From september 2020 208 0
Annual report 2021
Extending the ocean potential 84
Ingjarl Skarvøy (COO), Håkon Andrè Berg (CEO) and Trond Håkon Schaug-Pettersen (CFO)
have all non-compete clauses in their employment agreements which entitle them to a
compensation corresponding to 6 months' severance pay.
See note 23 for share based payments
Janne-Grethe A. Strand (Member of the board) - From March 2021 42 0
Ingvild Vartdal (Member of the Board) - from March 2021 42 0
Frode Kjølås (Member of the Board) - Until March 2021 208 140
Ingjarl Skarvøy (Member of the Board) – Until March 2020 0 100
Per Olav Mevold (Member of the Board) – Until March 2020 0 100
Anders Sandøy (Member of the Board) – Until March 2020 0 100
Frank Småge (Member of the Board) – Until March 2020 0 100
Jonny Småge (Member of the Board) – Until March 2020 0 na.
Total board of Directors 2 000 1 140
Remuneration and compensation to executive management 2021
(NOK tho usands)
Salary Bonus Pension Other Total
Håkon Andrè Berg (CEO) 2 329 2 200 56 13 4 598
Trond Håkon Schaug-Pettersen (CFO) 2 114 800 56 285 3 255
Ingjarl Skarvøy (COO) 1 674 250 57 165 2 146
Kamilla Holo Mordal (Project Director) 1 207 250 52 23 1 533
Trond Valderhaug (CCO until sept-21) 1 328 - 56 26 1 410
Odd Frode Roaldsnes (CCO from sept -21) 513 - 18 5 535
Total executive management 9 164 3 500 296 518 13 477
Remuneration and compensation to executive management 2020
(NOK tho usands)
Salary Bonus Pension Other Total
Håkon Andrè Berg (CEO/CFO) 1 819 - 60 22 1 901
Ingjarl Skarvøy (COO) 1 366 - 63 155 1 584
Trond Valderhaug (CCO from Oct 2020) 381 - 18 400
Kamilla Holo Mordal (Project Director) 1 008 - 48 11 1 066
Odd Tore Finnøy (CEO) 1 553 - - 7 1 560
Total executive management 6 127 - 189 195 6 511
Auditor's remuneration
(NOK tho usands)
2021 2020
Statutory audit 536 205
Interim audit 97 0
Other services 199 117
Total 832 322
Annual report 2021
Extending the ocean potential 85
Note 11 Other opex
Note 12 Financial income and expenses
Interest income is mainly related to interest on cash deposits held with Norwegian financial
institutions. Other financial income- and expense are mainly related to hedging activities in
relation to underlying EUR exposure for the Company's construction contract at Indre Harøy.
Incurred interest expenses and establishing fees are capitalized as part of assets under
construction in accordance with IAS 23.
The negative impact from share of net income from associated companies are related to the
joint venture in South Korea, K Smart Farming.
(NOK tho usands)
2021 2020
Cost of premises 419 156
Hired equipment 86 23
Other operating and administrative expenses 10 131 2 110
Insurance 398 173
Consultancy fees 14 859 6 493
Total other operating expenses 25 894 8 954
(NOK tho usands)
2021 2020
Interest income 5 594 1 114
Other financial income 7 258 0
Financial income 12 852 1 114
Interest expense (910) (29)
Interest expense lease liability (97) (28)
Other financial expenses (6 328) (206)
Financial expense (7 335) (263)
Share of net income from associated companies (634) 0
Net financial income (expense) 4 884 851
Annual report 2021
Extending the ocean potential 86
Note 13 Inventory
Inventory comprises feed, roe, fry and smolt, and are recognized at cost price.
The general industry rule is that live fish are to be accounted for in accordance with IFRS 13
and that such assets are measured at fair value less sales cost to sale. Roe, fry and smolt (up to
1 kg) are valued at historic cost where historical cost is deemed to be the best estimate of fair
value for these assets, as there are limited alternative use of the assets prior to the smolt being
ready for full grow out production. The use of acquisition cost as a valuation method for
biomass below 1 kg is chosen since this is deemed the most reliable way to measure fair value.
Total biomass at 31.12.21 was 2,276,666 smolt with an average weight of 79.9 grams
Note 14 Derivative
The derivative financial assets relate to hedging contracts for the Company’s interest rate
exposure and consist of an interest rate swap contract of NOK 50 million in Sparebanken Vest
and a similar contract of NOK 150 million in Nordea. Both contracts are due January 2028 and
has a fixed interest of 1.79 %. Changes in market value of these contracts is registered as
unrealized profit under financial income and allocated to other current receivables in the
balance sheet.
The power hedging contract with Statkraft relates to a fixed price power purchase contract in
EUR. The net present value effect resulting from changes in EURNOK forward rates per 31.
December 2021 compared to the transaction date is registered as unrealized profit under
financial income and allocated to other current receivables in the balance sheet.
(NOK thousands)
2021 2020
Inventory feed 112 -
Inventory smolt 14 939 -
Sum 15 050 -
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Derivative financial assets
Derivatives not designated as hedging instruments
Interest rate swaps 1 263 -
Forward foreign exchange contracts - -
1 263 -
Derivatives designated as hedging instruments
Power hedging contract 274 -
Total derivatives not designated as hedging instruments 274 -
Total derivative financial assets 1 537 -
Annual report 2021
Extending the ocean potential 87
Note 15 Cash and restricted cash
Restricted cash are related to tax withholdings for employees (NOK 1,785 million).
Note 16 Other current receivables
As of 31 December 2021, and 2020, the Group’s other current receivables were due within one
year and considered fully collectible. Accordingly, the fair value of the Group’s other current
receivables was equal to nominal value, no bad debt was recognized for the years then
ended, and management did not consider a provision for uncollectible accounts necessary.
Receivables denominated in foreign currencies are valued at the daily rate. Due to the short-
term nature of current receivables, their carrying amount is considered equal to their fair value.
As of 31 December 2021, and 2020, the Group's other current receivables, specified by
currencies, consisted of the following:
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Cash in bank 503 759 647 009
Restricted bank deposits 1 785 796
Total cash and cash equivalents 505 545 647 806
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Prepaid expenses 6 630 58
VAT receivable 49 829 16 860
Other receivables 1 939 539
Government grant ("Enova") 43 497 431
Tax incentive scheme ("Skattefunn") 4 750 4 750
Total other current receivables 106 644 22 638
(NOK tho usands)
31 Dec 2021 31 Dec 2020
NOK 106 644 22 638
Other 0 0
Total other current receivables 106 644 22 638
Annual report 2021
Extending the ocean potential 88
Note 17 Trade and other current liabilities
Note 18 Share capital
The number of shares issued in the company on 31 December 2021 was 310,796,489 with a
nominal value of NOK 0.05 each. All shares carry equal voting rights.
The Company issued 83,333,333 new shares in a capital raise in March 2021. Further on 16
August the company carried out a private placement in connection with the acquisition of
Kraft Laks AS where the company as part of the settlement issued 2,190,694 new shares. In
addition, in October the company carried out a new private placement with Cargill where it
was issued 5,541,374 new shares. As such, the weighted average number of shares outstanding
in 2021 has been calculated by applying a weight of 2/12 of the number of shares before the
capital raise in March (219,731,088), 6/12 of the number of shares after the capital raise
(303,064,421), 1/12 share after the acquisition of Kraft Laks (305,255,115), and 3/12 after the
private placement with Cargill of the total number after the final adjustment in October 2021
(310,796,489).
(NOK tho usands) 31 Dec 2021 31 Dec 2020
Trade payables 162 071 60 104
Total trade payables 162 071 60 104
(NOK tho usands) 31 Dec 2021 31 Dec 2020
Payroll withholding tax 1 785 796
Employer's national insurance contributions 2 135 347
Total social security and other taxes 3 920 1 144
(NOK tho usands) 31 Dec 2021 31 Dec 2020
Accrued employer's social security contribution 0 121
Accrued salaries, holiday pay and bonus provisions 4 821 1 024
Severance pay accrual 0 0
Accrued interest expense 991 277
Other current liabilities 0 69
Total other current liabilities 5 812 1 491
Nominal value
31 Dec 2021 31 Dec 2020
Ordinary shares 0,05 310 796 489 219 731 088
Average number of shares 0,05 291 291 107 125 605 681
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Share capital 15 540 10 987
Share premium 1 334 283 804 369
Total 1 349 823 815 355
Annual report 2021
Extending the ocean potential 89
As of 31 December 2021, shares directly or indirectly owned by members of the Board of
Directors, Chief Executive officer, and Executive Management were as follows:
20 largest shareholders as of 31.12.21 No of shares Percentage share
Ronja Capital II AS 26 687 687 8,6 %
The Bank of New York Mellon SA/NV 20 889 534 6,7 %
Farvatn Private Equity AS 17 093 878 5,5 %
Dongwon Industries Co. Ltd 16 044 572 5,2 %
Rofisk AS 13 274 174 4,3 %
Stette Invest AS 11 236 005 3,6 %
Artec Holding AS 11 139 339 3,6 %
Kjølås Stansekniver AS 10 774 405 3,5 %
Verdipapirfondet DNB SMB 10 544 140 3,4 %
Jakob Hatteland Holding AS 8 706 006 2,8 %
Mevold Invest AS 8 141 141 2,6 %
Lyngheim Invest AS 7 891 141 2,5 %
Bortebakken AS 7 471 090 2,4 %
Ewos AS 5 541 374 1,8 %
Verdipapirfondet DNB SMB 5 529 606 1,8 %
Nordnet Livsforsikring AS 5 196 371 1,7 %
VPF Norge Selektiv 5 132 518 1,7 %
Salmoserve AS 3 727 366 1,2 %
VPF DNB AM Norske Akjser 3 457 555 1,1 %
Danske Invest Norge Vekst 3 150 000 1,0 %
Total 20 largest shareholders 201 627 902 64,9 %
Other shareholders 109 168 587 35,1 %
Total number of shares 310 796 489 100,0 %
No of shares Percentage share
Peder Stette, Member of the board - Stette Invest AS 11 236 005 3,6 %
Kristoffer Reiten, Member of the Board - Bortebakken AS 7 471 090 2,4 %
Glen Allan Bradley, Member of the Board * 5 297 366 1,7 %
Ingjarl Skarvøy, COO - Terra Mare AS 1 800 150 0,6 %
Trond Håkon Schaug-Pettersen, CFO 190 000 0,1 %
Hakon Andre Berg, CEO - Carried Away AS 185 000 0,1 %
Anne Breiby, Member of the board 89 000 0,0 %
Kamilla Mordal Holo, Project Director - C10 Holding AS 60 060 0,0 %
Total 26 328 671 8,5 %
*1,500,000 shares ow ned through Ocean Industries AS and 70,000 shares ow ned privately. Also, including 3,727,366 shares
ow ned through Salmoserve AS w here Glen Allan Bradley has an ow nership of 25%.
Annual report 2021
Extending the ocean potential 90
Note 19 Interest-bearing debt
The Group has entered into a senior secured NOK 625 million debt financing relating to its phase
one build out at Indre Harøy with Nordea, Sparebanken Vest and Innovation Norway. The
facility consist of;
• a NOK 525 million senior secured credit facility to finance the construction CAPEX of
which NOK 200 million was utilized as per 31 December 2021
• two long term facilities in the aggregate amount of NOK 525 million which shall be used
to refinance the construction facility
o a NOK 385 million senior secured long-term facility with Nordea and
Sparebanken Vest as Lender and
o a 140 NOK million senior secured long-term facility with Innovation Norway as
Lender.
• a NOK 100 million senior secured overdraft facility with Nordea as Lender.
In addition, the Group has also entered into binding agreements with Nordea for bank debt
financing of up to NOK 52 million in relation to the newly acquired smolt producer Kraft Laks AS.
The loans are floating interest rate loans denominated in NOK with an interest charge based
on NIBOR 3M plus an agreed margin. Incurred interest expenses and establishing fees are
capitalized as part of assets under construction in accordance with IAS 23.
In addition, the Group has a sellers credit of NOK 24.7 million relating to the acquisition of Kraft
Laks, where 50% of this is classified as long-term debt and 50% are classified as short-term debt.
Other current liabilities of 7,976 NOK thousand is related to valuation of ground lease and water
rights in relation to Kraft Laks.
Long-term interest bearing debt
(NOK thousand) 2021 2020
Debt to credit institutions 200 000 0
Other long-term interest bearing debt 12 352 0
Other long-term liabilites 7 976 0
Leasing liabilities 892 933
Total long-term interest-bearing debt 31.12 221 221 933
Short-term interest bearing debt
(NOK thousand) 2021 2020
Debt to credit institutions 733 40 000
Other short-term interest bearing debt 12 352 -
Leasing liabilitites 1 236 696
Total short-term interest-bearing debt 31.12 14 322 40 696
Total interest-bearing debt 235 543 41 630
Cash & cash equivalents 505 545 647 806
Net interest-bearing debt -270 001 -606 176
Annual report 2021
Extending the ocean potential 91
Financial covenants
The most important financial covenants for the long-term financing of the Group are,
respectively, a solvency requirement that the borrower’s (Salmon Evolution Norway AS) equity
ratio (including intra-group loans) shall exceed 50%. Further, there is a profitability requirement
linked to minimum EBITDA shall be greater than NOK 100 million on a last 12 month basis from
Q2 2024. Quarterly EBITDA figures shall be measured from Q3 2023 with set minimum EBITDA
levels reflecting the company’s gradual ramp up of production volumes and profitability.
Finally, there is a minimum cash requirement that stipulates that the cash balance shall be
greater than NOK 100 million during construction, and greater than NOK 50 million after
completion of the construction work.
Security
The Group’s bank debt facilities are fully guaranteed by Salmon Evolution ASA. The respective
borrowers also have a pledge over 100% of the shares in the Group’s two operating subsidiaries,
Salmon Evolution Norway AS and Kraft Laks AS. Further, the respective borrowers have a pledge
over all material operating assets of the Group, hereunder inter alia, land, plant and machinery,
operating licenses, inventory and receivables.
Short term Long term
Balance at January 1, 2021 40 696 933
Repayment of loans and borrowings -40 000 -
Proceeds from new bank loan 733 200 000
Seller credit Kraft Laks 12 352 12 352
Obligations due to land and water rigths - 7 976
Change in obligations under leases 540 -41
Balance at December 21, 2021 14 322 221 221
Transaction cost related to loans and borrowings 5 380
Capitalised borrowing cost 6 079
Interest expense 1 007
Interest paid -11 477
Total liability-related other changes 989
Interest bearing debt
Cash movements in financing activites (NOK thousand)
Short term Long term
Balance at January 1, 2020 1 500 -
Repayment of loans and borrowings -1 500 -
Proceeds from new bank loan 40 000 -
Obligations under leases 696 933
Transaction cost related to loans and borrowings - -
Balance at December 31, 2020 40 696 933
Capitalised borrowing cost 447
Interest expense 29
Interest paid -198
Total liability-related other changes 277
Interest bearing debt
Cash movements in financing activites (NOK thousand)
Annual report 2021
Extending the ocean potential 92
Note 20 Leases
Additions to right-of-use assets in 2021 were NOK 0.6 million and related to new office supply
and a new car.
The total cash outflow for leases in 2021 was NOK 1.6 million.
Assets and liabilities arising from a lease are initially measured on a present value basis. The
lease payments are discounted using the interest rate implicit in the lease. If that rate cannot
be readily determined, which is generally the case for leases in the Group, the lessee’s
incremental borrowing rate is used, being the rate that the individual lessee would have to pay
to borrow the funds necessary to obtain an asset of similar value to the right-of-use asset in a
similar economic environment with similar terms, security, and conditions.
To determine the incremental borrowing rate, the Group:
• where possible, uses recent third-party financing received by the individual lessee as a
starting point, adjusted to reflect changes in financing conditions since third party financing
was received
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for
leases held by the Company, which does not have recent third-party financing, and
• makes adjustments specific to the lease, e.g term, country, currency and security.
The Group is exposed to potential future increases in variable lease payments based on an
index or rate, which are not included in the lease liability until they take effect. When
Amounts recognised in the balance sheet
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Right-of-use assets
Rent of premises 748 919
Car 600 205
Office supply 763 554
Total right-of-use assets 2 112 1 678
Lease liabilities
Current 1 236 696
Non-current 892 933
Total lease liabilities 2 129 1 630
Amounts recognised in the statement of profit or loss
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Depreciation right-of-use assets
Rent of premises 716 145
Car 361 145
Office supply 287 50
Gross depreciation 1 364 340
- Capitalized as assets under construction 0 (100)
Net depreciation 1 364 240
Interest expense lease liability 97 28
Annual report 2021
Extending the ocean potential 93
adjustments to lease payments based on an index or rate take effect, the lease liability is
reassessed and adjusted against the right-of-use asset. Lease payments are allocated
between principal and finance cost. The finance cost is charged to profit or loss over the lease
period in order to produce a constant periodic rate of interest on the remaining balance of
the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentive
received
• any initial direct costs, and - restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the
lease term on a straight-line basis. If the Group is reasonably certain to exercise a purchase
option, the right-of-use asset is depreciated over the underlying asset’s useful life.
The Group has entered into several lease agreements that are considered to qualify as short-
term and/or low value in accordance with IFRS 16. Payments associated with such short-term
and low-value leases are recognized on a straight-line basis as an expense in the profit and loss
statement. Short-term leases are leases with a lease term of 12 months or less. Low-value assets
comprise IT-equipment and small items of office furniture.
Note 21 Acquisition of Kraft Laks
Salmon Evolution ASA announced the acquisition of 100% of the shares in Kraft Laks AS on the
16th of August 2021 for a consideration of NOK 76.5 million on an equity value basis. The
purchase price implies an enterprise value of NOK 69.6. million. The payment was structured as
cash payment of NOK 35 million, a seller credit of NOK 24.9 million, and an amount of NOK 16.6
million which the sellers committed to re-invest through a capital raise in Salmon Evolution.
Kraft Laks is a smolt producer located in Dalsfjorden, Volda, with an annual production of
around 1.8 million smolt. The company holds licenses to produce up to 5 million smolt per year
subject to certain conditions. The acquisition gives Salmon Evolution operational control over
critical parts of the value chain and ensures that the company is self-supplied with smolt for
Phase 1 at Indre Harøy, and potentially for Phase 2 if an expansion of Kraft Laks is undertaken.
Annual report 2021
Extending the ocean potential 94
The main factors leading to the recognition of goodwill are:
- The value of the license for an additional 3 million smolt produced per year
- The presence of certain intangible assets, such as assembled workforce of the acquired
company
- Technical goodwill created by deferred tax.
- Synergies, which includes the ability for Salmon Evolution to be self-supplied with smolt for
Phase 1, and potentially Phase 2, at Indre Harøy.
Since the acquisition date, Kraft Laks has contributed NOK 12 million to group revenues and
NOK 5.5 million to group profit. If the acquisition had occurred on 1 January 2021, group
revenue would have been NOK 25.6 million and group profit for the period would have been
NOK 7.4 million.
Note 22 Related party balances and transactions
During the ordinary course of business, the Group engages in certain transactions with related
parties. The following is a summary of related party transactions carried out in the period:
In 2019 the Company entered into an agreement with Artec Aqua AS, a subsidiary of Artec
Holding AS, for the design and construction of a land-based salmon farming facility at the
Company’s site at Indre Harøy.
Pursuant to the agreement entered into with Artec Aqua AS, Salmon Evolution has had a
significant volume of transactions during 2021 related to the ongoing construction of the
Acquired balance sheet (NOK thousands)
Book Value
31.07.2021
Fair Value
31.07.2021
Fair Value
adjustment
Classification
Goodwill
- 44.7 44.7 FA
Identified intangible assets
- 13.5 13.5 FA
Buildings and land
7.7 7.7 - FA
Machinery and equipment
1.6 1.6 - FA
Equipment, fixtures and fittings
0.1 0.1 - FA
Other investments
0.1 0.1 - FA
Inventory
13.3 13.3 - NWC
Other current receivables
0.1 0.1 - NWC
Cash and cash equivalents
8.0 8.0 - ND
Total assets 30.9 89.1 58.2
Total shareholders' equity
21.3 76.5 55.2 EQ
Deferred tax
3.1 3.1 - NWC
Deferred tax created by value adjustments
- 3.0 3.0 NWC
Debt to credit institutions
1.1 1.1 - ND
Tax payable
0.4 0.4 - NWC
Accounts payable
4.3 4.3 - NWC
Public duties payable
0.5 0.5 - NWC
Other current liabilities
0.2 0.2 - NWC
Total shareholders' equity and liabilities 30.9 89.1 58.2
Annual report 2021
Extending the ocean potential 95
production facilities at Indre Harøy. Artec Aqua AS was until mid-March 2021 a 100%-owned
subsidiary of Artec Holding AS, which per 31.12.2021 held 3.6% of the total shares outstanding
in Salmon Evolution ASA.
Due to the acquisition of Artec Aqua by Endur ASA in Q1 2021, Artec Aqua is no longer
considered to be a related party to Salmon Evolution ASA.
The Group further has a consultancy agreement with Peder Stette (board member) and Frode
Kjølås (chair nomination committee) relating to assistance in certain projects on an ad-hoc
basis.
The Group has during 2021 purchased legal services from Adviso Advokatfirma AS in the
amount of NOK 325,000 in its ordinary course of business. Board member Ingvild Vartdal is a
partner at Adviso Advokatfirma AS but has not had any role in the services rendered to Salmon
Evolution.
*Due to the acquisition of Artec Aqua AS by Endur ASA in Q1 2021, Artec Aqua is no longer considered a related party
to Salmon Evolution ASA.
There were no non-current liabilities to related parties as of 31.12.21
Note 23 Share based payments
In 2020 the Group granted 1,625,000 options to employees. These options have been granted
at different points in time during the year, and key assumptions listed below are as such
averages of the different grants. Each option gives the holder the right to subscribe or purchase
shares in Salmon Evolution at an average agreed exercise price of NOK 4.80. The options were
granted on 25 August 2020 and 28 September 2020 and has an 18-month maturity. The options
Income from related parties:
(NOK tho usands)
2021 2020
Vikomar AS - 5 046
K Smart Co Ltd 264 -
Total income from related parties (incl.VAT)
264 5 046
Expenses to related parties:
(NOK tho usands)
2021 2020
Artec Aqua AS* 902 197 169 762
Carried Away AS - 15
Kjølås Stansekniver AS 464 -
Stette Eiendom AS 147
Total expenses to related parties (Incl. VAT)
902 809 169 777
Current liabilities to related parties
(NOK tho usands)
2021 2020
Artec Aqua AS* 132 453 56 293
Total current liabilities to related parties
132 453 56 293
Current receivables from related parties
(NOK tho usands)
2021 2020
K Smart Farming Co., Ltd 32 -
Total current liabilities to related parties
32 -
Annual report 2021
Extending the ocean potential 96
can be exercised at earliest, 12 months after the grant date. To account for this, an adjusted
Black & Scholes option-pricing model is used by applying a weighted expected average life
of 15 months. All options were exercised in January 2022 with the new shares being issued in
March 2022.
In addition, the Board of the directors on 26 August 2021 established a share option program
for members of the Company's executive management where total of 7,650,000 share options
have been granted. The options will be issued on an annual basis with 1/3 each year, with issue
dates being 31 August 2021 (of which 250,000 share options was issued 22 November 2021), 1
June 2022 and 1 June 2023. Issued options vest 50% after year one and 50% after year two. A
total of 2,550,000 share options were issued with a strike price of NOK 9.00 per share, and a total
of 5,100,000 options were granted at a strike price equal to the closing price of the Company's
shares on Oslo Børs on the last trading day prior to the respective future issue dates + 15%.
The share option agreements contain clauses customary for such agreement, hereunder
cancellation of unvested options in case the employee’s employment with the Company is
terminated, option for the Company to settle exercised option with shares or cash and a cap
on maximum profit from each annual allotment of options.
Further, in case of certain corporate changes, hereunder M&A situations, all granted but yet
not issued options under the program, immediately become exercisable at a strike price equal
to the strike price for the last option grant plus a premium of 15%, without any limitation as to
maximum profit under the program.
The fair value of the options is set on the grant date and is expensed over its lifetime. The fair
value of the options has been calculated using the adjusted Black & Scholes option-pricing
model, which takes into account the exercise price, the term of the option, the share price at
the grant date, expected price volatility of the underlying share, expected dividend and risk-
free rates. Given the recent listing and lack of historical price and volatility data, the expected
volatility is based on historical volatility for a selection of comparable companies listed on Oslo
Stock Exchange ("Oslo Børs"). The risk-free interest rate is set to equal the interest on Norwegian
government bonds with the same maturity as the option. Average key assumptions are listed
below.
Outstanding options (in thousands) 2021
2020
Outstanding options 1 January 1625 900
Options granted 7650 1 625
Options exercised 0 600
Options forfeited 0 300
Outstanding options at end of period 9 275 1 625
NOK thousands 2021
2020
Håkon André Berg (CEO) 609 0
Trond Håkon Schaug-Pettersen (CFO) 526 0
Ingjarl Skarvøy (COO) 224 0
Kamilla Mordal Holo (Project Director) 212 0
Odd Frode Roaldsnes (CCO) 53 0
Other/IPO 0 2714
Total
1624 2714
Charges to income statement 599 2 714
Charges to Asset under Construction 1025 0
Annual report 2021
Extending the ocean potential 97
Note 24 Investments in associated companies
Investments in subsidiaries are valued at cost in the company accounts. The investment is
valued at cost of acquiring the shares, providing they are not impaired. An impairment loss is
recognised for the amount by which the carrying amount of the subsidiary exceeds its
recoverable amount. The recoverable amount is the higher of fair value less cost to sell and
value in use. The recoverable amount of an investment in a subsidiary would normally be based
on the present value of the subsidiary's future cash flow. As of 31.12.2021 no impairment
indicators were assessed to be present for the Company’s investments.
Key assumptions 2021
2020
Average fair value (NOK) 1,36 5,25
Average exercise price (NOK) 10,35 5,25
Weighted expected average life (in years) 2,33 1,25
Estimated dividend per share (NOK) 0,00 0,00
Expected average volatility 29,2 % 71,3 %
Risk-free rate 0,86 % 0,21 %
Group management have the following holdings Holding 01.01
Awarded Exercised
Forfeitet
Holding 31.12
Håkon André Berg (CEO) 450 3 000 - - 3 450
Trond Håkon Schaug-Pettersen (CFO) 375 2 400 - - 2 775
Ingjarl Skarvøy (COO) 100 750 - - 850
Kamilla Mordal Holo (Project Director) 100 750 - - 850
Odd Frode Roaldsnes (CCO) - 750 - - 750
Total 1 025 7 650 - - 8 675
*Numbers in thousand
(NOK thousands)
Location and place of
business
Ownership/
voting right
Equity
31.12.21
(100%)
Result
2021
(100%)
Balance
sheet value
K Smart Farming Co., Ltd* Gangwangnak-ro, South Korea
49 % 48 656
(1 294) 26 219
Balance sheet value as of 31 December 2021
*K Smart Farming Co., Ltd is owned through Salmon Evolution Asia AS
Movement in investment in assosiated companies during 2021 is analysed in the following way:
(NOK tho usands)
Opening balance 01 January 2021 -
Investment K Smart Farming Co., Ltd, May 2021 27 413
Share of net income from associated companies (634)
Currency translation differences (560)
Closing balance 31 December 2021 26 219
Annual report 2021
Extending the ocean potential 98
Note 25 Events after the reporting date
Phase Two build-out - Indre Harøy
On 7 February 2022 Salmon Evolution announced that had entered into a Heads of Terms with
Artec Aqua for the phase 2 build-out at Indre Harøy. Phase 2 is expected to in principle be
identical to phase 1 and add a further 7,900 tons HOG of annual production, bringing the total
planned production volume to 15,800 tons HOG per annum.
The purpose of the Heads of Terms is to enable Salmon Evolution to be in a position to swiftly
commence construction of phase 2 following the completion of phase 1. Such timeline requires
significant preparatory activities, including but not limited to, planning, concept and detailed
engineering and structuring of subcontractor tender processes.
The Heads of Terms further sets out the main commercial terms to be reflected in a final design
and construction agreement between the parties.
The final design and construction agreement is expected to be effectuated during first half of
2022 and will include financing reservations providing Salmon Evolution with the necessary
flexibility to align the phase 2 build out with the Company’s overall financing plan.
Successful Private Placement
On 5 April 2022 the Company completed a private placement raising gross proceeds of
approximately NOK 300 million in new equity at a subscription price of NOK 9.00 per share. The
private placement attracted strong interest from Norwegian, Nordic and international high-
quality investors and was significantly oversubscribed.
The net proceeds from the private placement will be used to (i) to partly fund the second phase
of the salmon farming facility at Indre Harøy; (ii) to expand the capacity at the smolt facility
Kraft Laks AS; and (iii) for general corporate purposes. The offer shares were allocated in two
tranches as follows: one tranche with 22,574,374 offer shares (“Tranche 1”) and a second
tranche with 10,758,959 offer shares (“Tranche 2”). Both Tranche 1 and Tranche 2 were settled
with existing and unencumbered shares in the Company, that are already listed on Oslo Børs,
pursuant to a share lending agreement (the “Share Loan”) between the Company, the
managers, Stette Invest AS, Rofisk AS and Ronja Capital II AS.
The board has accordingly resolved to increase the Company’s share capital by NOK
1,128,718.70, by issuing 22,574,374 new shares pertaining to the Offer Shares allocated in
Tranche 1, pursuant to the authorisation (the “Board Authorisation”) granted to the board by
the Company’s annual general meeting held on 19 May 2021. The issue of new shares
pertaining to the offer shares allocated in Tranche 2 is subject to approval of the Company’s
extraordinary general meeting expected to be held on or about 2 May 2022 (the “EGM”).
If the EGM does not approve the issuance of the offer shares in Tranche 2, the Company will
not receive any proceeds from the sale of offer shares in Tranche 2. The effective reduction in
proceeds to the Company will in such event be allocated both to the Indre Harøy phase 2
funding and the Kraft Laks expansion. For the latter, the Company will seek to portion out the
smolt build-out and potentially partly rely upon external sourcing of smolt for a period of time.
It is emphasised that no decision for commencing the Phase 2 project has been made, and
reference is made to the Company announcement dated 7 February 2022 and 10 February
2022 for further information.
Annual report 2021
Extending the ocean potential 99
Parent company Financial Statement
Income Statement
(N OK tho usands) Note
2021 2020
Revenue from contracts w ith customers - -
Other income 3 9 874 0
Total operating income 9 874 0
Personnel expenses 5,11 (14 551) 0
Depreciation, amortisation and impairment loss 9 (13) 0
Other operating expenses 6 (10 878) (20)
Operating profit (EBIT) (15 568) (20)
Financial income 3 19 135 394
Financial expenses 9 (624) (124)
Net financials 18 511 270
Profit/(loss) before tax 2 943 251
Change in deferred tax 4 4 719 -
Profit/(loss) for the period 7 662 251
Statement of Comprehensive Income
(N OK tho usands) Note
2021 2020
Profit/(loss) for the period 7 662 251
Total comprehensive income for the period, net of tax 7 662 251
Annual report 2021
Extending the ocean potential 100
Statement of Financial Position
(N OK thousands) Note
31 Dec 2021
31 Dec 2020
Assets
Deferred tax asset 4 4 719 0
Right-of-use assets 9 216 0
Group non-current receivables 3 649 976 0
Investment in subsidiaries 2,11 356 778 279 230
Total non-current assets 1 011 689 279 230
Other current receivables 3 2 381 189
Cash and cash equivalents 10 355 403 520 245
Total current assets 357 783 520 434
Total assets 1 369 472 799 663
Equity and liabilities
Share capital 7 15 540 10 987
Share premium 7 1 313 104 783 183
Other reserves 11 4 338 2 714
Other equity 0 0
Retained earnings 7 912 251
Total equity 1 340 894 797 134
Long-term interest bearing debt 12 352 0
Lease liabilities - long term 9 144 0
Total non-current liabilities 12 496 0
Short-term interest bearing debt 12 352 0
Trade payables 8 569 599
Current liabilities to Group Companies 3 0 1 930
Lease liabilities - short term 9 73 0
Other current liabilities 8 3 087 0
Total current liabilities 16 082 2 529
Total liabilities 28 578 2 529
Total equity and liabilities 1 369 472 799 663
Annual report 2021
Extending the ocean potential 101
The Board of Directors of Salmon Evolution ASA
Molde/Ålesund 8 April 2022
Tore Tønseth
Chair
Kristofer Reiten
Director
Anne Breiby
Director
Peder Stette
Director
Glen Allan Bradley
Director
Yun Ki Yun
Director
Ingvild Vartdal
Director
Janne-Grethe Strand Aasnæs
Director
Håkon André Berg
CEO
Annual report 2021
Extending the ocean potential 102
Statement of Cash Flow
(N OK thousands) Note 2021 2020
Cash flow from operations
Profit before income taxes 2 943 251
Adjustments for:
Depreciation 0 0
Net interest 3 (18 511) (270)
Share based payment expenses 1 135 0
Gain on lease modification 1 0
0
Changes in working capital: 0
Change in trade receivables (2 304) 0
Change in other current recievables 112 (189)
Change in trade payables (30) 599
Change in current liabilities to Group companies (exl. Group contribution) 3 (1 930) 1 930
Change in other current liabilities 3 087 0
Cash generated from operations (15 497) 2 321
Interest paid (429) (124)
Interest received 3 7 033 394
Net cash flow from operations (8 892) 2 591
Cash flow from investment activities
Investment in Group Companies 2 (35 949) (276 516)
Payments for intangible assets 0 0
Payments for fixed assets and other capitalizations 0 0
Net cash flow from investment activities (35 949) (276 516)
Cash flow from financing activities
Founding capital 7 4 444 30
Proceeds from issue of equity, net of paid transaction costs 7 513 430 794 140
Change in intercompany borrow ings 3 (637 874) 0
Proceeds from new borrow ings 0 0
Change in lease liabilities 0 0
Net cash flow from financing activities (120 001) 794 170
Net change in cash and cash equivalents (164 842) 520 245
Cash and cash equivalents at the beginning of the period 520 245 0
Cash and cash equivalents at the end of the period 355 403 520 245
Annual report 2021
Extending the ocean potential 103
Statement of Changes in Equity
Balance at 1 January 2020 0 0 0 0 0
Profit/loss for the period 0 0 251 0 251
Other comprehensive income 0 0 0 0 0
Total comprehensive income 0 0 251 0 251
Incorporation, 3 July 2020 30 0 0 0 30
Capital increase, net of transaction costs 10 957 783 183 0 0 794 140
Share options issued 0 0 0 2 714 2 714
Transactions with owners 10 987 783 183 0 2 714 796 884
Balance at 31 December 2020 10 987 783 183 251 2 714 797 134
Balance at 1 January 2021 10 987 783 183 251 2 714 797 134
Profit/loss for the period 0 0 7 662 0 7 662
Other comprehensive income 0 0 0 0 0
Total comprehensive income 0 0 7 662 0 7 662
Capital increase 18 March 2021 4 167 495 833 0 0 500 000
Capital increase 18 March 2021, transaction costs 0 (24 850) 0 0 (24 850)
Private placement, 18 August 2021 110 16 490 0 0 16 600
Private placement, 22 October 2021 277 42 447 0 0 42 724
Share options issued 0 0 0 1 624 1 624
Transactions w ith ow ners 4 553 529 920 0 1 624 536 098
Profit/loss for the period
Balance at 31 December 2021 15 540 1 313 104 7 912 4 338 1 340 894
Other
Reserves
Total equity
Total equity
(N OK thousands)
Share
capital
Share
premium
Retained
Earnings
Other
Reserves
(N OK thousands)
Share
capital
Share
premium
Retained
Earnings
Annual report 2021
Extending the ocean potential 104
Note 1 Summary of significant accounting policies
General information
Salmon Evolution ASA (the “Company”) is a Norwegian business headquartered in Hustadvika
municipality in Møre og Romsdal and listed on the Oslo Børs with the ticker symbol "SALME". Salmon
Evolution ASA owns the following subsidiaries (collectively “Salmon Evolution”, the “Group" or "SE");
- Salmon Evolution Norway AS, headquartered and located in Molde, Norway (“SENAS”)
- Salmon Evolution Asia AS (“SEA”),
- Kraft Laks AS (“Kraft Laks“)
SE is in the process of constructing a land-based salmon farming facility with a planned annual
harvesting capacity of 31,500 tonnes HOG fully developed. The build-out is expected to be in three
phases, of which phase 1 which is currently under construction has a planned annual production of
7,900 tons HOG. Phase 1 consists of 12 large grow out tanks with corresponding infrastructure and is
expected to be completed during Q4 2022. Initial production started in March 2022 and first harvest
is expected in Q4 2022. SE will operate a hybrid flowthrough system ("HFS"), replacing the water every
four hours with clear and fresh water from the Norwegian coast. Phase II is expected to consist of an
additional 12 grow out tanks which is expected to generate an additional 7,900 tons HOG of
production. The last construction phase, phase 3, consists of an additional 24 grow out tanks bringing
the total expected production volume to 31,500 tons HOG per annum.
Basis of preparation and accounting principles
The financial statements of the Company have been prepared in accordance with the Norwegian
Accounting Act § 3-9 and Finance Ministry’s prescribed regulations from 21 January 2008 on simplified
IFRS. Principally this means that recognition and measurement comply with the International
Accounting Standards (IFRS) and presentation and note disclosures are in accordance with the
Norwegian Accounting Act and generally accepted accounting principles. Any exceptions from
measurement and recognition according to IFRS is disclosed below.
Accounting period
The company was incorporated on 3 July 2020. The accounting period for the financial statements
are 1 January 2021 - 31 December 2021.
Going concern
The Company has adopted the going concern basis in preparing its consolidated financial
statements. When assessing this assumption, management has assessed all available information
about the future. This comprises information about net cash flows from existing customer contracts
and other service contracts, debt service and obligations. After making such assessments,
management has a reasonable expectation that the Company has adequate resources to continue
its operational existence for the foreseeable future.
Basis of measurement
The financial statements have been prepared under the historical cost convention.
Investments in subsidiaries
Investments in subsidiaries are valued at cost in the company accounts. The investment is valued as
cost of acquiring shares, providing they are not impaired. An impairment loss is recognized for the
Annual report 2021
Extending the ocean potential 105
amount by which the carrying amount of the subsidiary exceeds its recoverable amount. The
recoverable amount is the higher of fair value less cost to sell and value in use. The recoverable
amount of an investment in a subsidiary would normally be based on the present value of the
subsidiary's future cash flow.
Dividends and group contributions
The Company has applied simplifications regarding the Directives specified by the Norwegian
Ministry of Finance on 21. of January 2008, related to accounting treatment of dividends and group
contributions: Dividends and group contributions will be treated in accordance with the Norwegian
Accounting Act and deviates from IAS 10 no. 12 and 13.
Classification of current and non-current items
Assets are classified as current when it expected to be realized or sold, or to be used in the Company's
normal operating cycle or falls due or is expected to be realized within 12 months after the end of
the reporting date. Assets that do not fall under this definition is classified as non-current. Liabilities
are classified as current when they are expected to be settled in the normal operating cycle of the
Company or are expected to be settled within 12 months after the reporting date, or if the Company
does not have an unconditional right to postpone settlement for at least 12 months after the reporting
date. Liabilities that do not fall under this definition are classified as non-current.
Employee benefits
Liabilities for wages and salaries, including non-monetary benefits, annual leave and accumulating
sick leave that are expected to be settled wholly within 12 months after the end of the period in
which the employees render the related service are recognised in respect of employees’ services up
to the end of the reporting period and are measured at the amounts expected to be paid when the
liabilities are settled. The liabilities are presented as current employee benefit obligations in the
balance sheet.
Information relating to the Company's employee option scheme is set out in note 11. The fair value
of options granted under the scheme is recognised as an employee benefits expense with a
corresponding increase in equity. The total amount to be expensed is determined by reference to
the fair value of the options granted:
- including any market performance conditions (e.g. the entity’s share price)
- excluding the impact of any service and non-market performance vesting conditions (e.g.
profitability, sales growth targets and remaining an employee of the entity over a specified time
period), and
- including the impact of any non-vesting conditions (e.g. the requirement for employees to save or
holdings shares for a specific period of time).
The total expense is recognized over the vesting period, which is the period over which all of the
specified vesting conditions are to be satisfied.
Pensions
The Company offers a defined contribution plan to its employees and pays contributions to publicly
or privately administered pension insurance plans on a mandatory, contractual, or voluntary basis.
The Company has no further payment obligations once the contributions have been paid.
Annual report 2021
Extending the ocean potential 106
Contributions are recognized as employee benefit expense when they are due and are included as
part of salary and personnel costs in the statement of profit and loss. Prepaid contributions are
recognized as an asset to the extent in which a cash refund or a reduction in the future payments is
available.
Taxes
Income Tax
The tax expense represents the sum of the tax currently payable and deferred tax.
Current tax
The tax currently payable is based on taxable profit for the year. Taxable profit differs from net profit
as reported in the income statement because it excludes items of income or expense that are
taxable or deductible in other years and it further excludes items that are never taxable or
deductible. The Company’s liability for current tax is calculated using tax rates that have been
enacted or substantively enacted by the balance sheet date.
Deferred tax
Deferred tax is the tax expected to be payable or recoverable on differences between the carrying
amounts of assets and liabilities in the financial statements and the corresponding tax bases used in
the computation of taxable profit and is accounted for using the balance sheet liability method.
Deferred tax liabilities are generally recognized for all taxable temporary differences and deferred
tax assets are recognized to the extent that it is probable that taxable profits will be available against
which deductible temporary differences can be utilized. Such assets and liabilities are not recognized
if the temporary difference arises from the initial recognition of goodwill or from the initial recognition
(other than in a business combination) of other assets and liabilities in a transaction that affects
neither the taxable profit nor the accounting profit. Deferred tax liabilities are recognized for taxable
temporary differences arising on investments in subsidiaries and associates, and interests in joint
ventures, except where the Company is able to control the reversal of the temporary difference and
it is probable that the temporary difference will not reverse in the foreseeable future. Deferred tax
assets arising from deductible temporary differences associated with such investments and interests
are only recognized to the extent that it is probable that there will be sufficient taxable profits against
which to utilize the benefits of the temporary differences and they are expected to reverse in the
foreseeable future.
The carrying amount of deferred tax assets is reviewed at each balance sheet date and reduced to
the extent that it is no longer probable that sufficient taxable profits will be available to allow all or
part of the asset to be recovered. Deferred tax is calculated at the tax rates that are expected to
apply in the period when the liability is settled, or the asset is realized based on tax laws and rates
that have been enacted or substantively enacted at the balance sheet date. Deferred tax is
charged or credited in the income statement, except when it relates to items charged or credited
in other comprehensive income, in which case the deferred tax is also dealt with in other
comprehensive income. The measurement of deferred tax liabilities and assets reflects the tax
consequences that would follow from the manner in which the Company expects, at the end of the
reporting period, to recover or settle the carrying amount of its assets and liabilities. Deferred tax
assets and liabilities are offset when there is a legally enforceable right to set off current tax assets
against current tax liabilities and when they relate to income taxes levied by the same taxation
authority and the Company intends to settle its current tax assets and liabilities on a net basis.
Annual report 2021
Extending the ocean potential 107
Current tax and deferred tax for the year
Current and deferred tax are recognized in profit or loss, except when they relate to items that are
recognized in other comprehensive income or directly in equity, in which case, the current and
deferred tax are also recognized in other comprehensive income or directly in equity respectively.
Cash and cash equivalents
For the purpose of presentation in the statement of cash flows, cash and cash equivalents includes
cash on hand, deposits held at call with financial institutions, other short-term, highly liquid
investments with original maturities of three months or less that are readily convertible to known
amounts of cash and which are subject to an insignificant risk of changes in value.
Trade and Other Receivables
Trade receivables are initially recognized at amortized cost, less a provision for expected credit losses.
Credit loss provisions are based on individual customer assessments over each reporting period and
not on a 12-month period.
Trade and Other Payables
Trade and other payables represent unpaid liabilities for goods and services provided to the
Company prior to the end of the financial year and are presented as current liabilities unless payment
is not due within 12 months after the reporting period. Trade and other payables are recognized
initially at their fair value and are subsequently measured at amortized cost using the effective
interest method.
Statement of cash flows
The accompanying statements of cash flows are prepared in accordance with the indirect method.
Annual report 2021
Extending the ocean potential 108
Note 2 Investments in subsidiaries and other related companies
Investments in subsidiaries are valued at cost in the company accounts. The investment is valued as
cost of acquiring shares, providing they are not impaired. An impairment loss is recognized for the
amount by which the carrying amount of the subsidiary exceeds its recoverable amount. The
recoverable amount is the higher of fair value less cost to sell and value in use. The recoverable
amount of an investment in a subsidiary would normally be based on the present value of the
subsidiary's future cash flow. As of 31.12.2021 no impairment indicators were assessed to be present
for the Company’s investments.
Movement in investment in subsidiaries during 2021 is analyzed in the following way:
Note 3 Intercompany balances and intercompany transactions
Investments in Salmon Evolution Norway AS and Salmon Evolution Asia AS are partly financed with
loans from Salmon Evolution ASA. The interest rate on these loans is set at a market interest rate of 4
% p.a..
(NOK tho usands)
Location and place of business
Ownership/
voting right
Equity 31.12.21
(100%)
Result 2021
(100%)
Balance sheet
value
Salmon Evolution Norway AS Molde, Norway 100 % 242 052 (28 974) 279 719
Salmon Evolution Asia AS Molde, Norway 100 % 980 (1 974) 1 000
Kraft Laks AS Folkestad, Norway 100 % 25 582 5 766 76 059
K Smart Farming Co., Ltd* Gangwangnak-ro, South Korea 49 % 48 656 (1 294)
Balance sheet value as of 31 December 2021 356 778
*K Smart Farming Co., Ltd is ow ned through Salmon Evolution Asia AS
(NOK tho usands)
Opening balance 01 January 2021 279 230
Share options issued (Salmon Evolution Norway) 489
Salmon Evolution Asia AS, established April 2021 1 000
Acquisition of Kraft Laks AS, August 2021 76 059
Closing balance 31 December 2021 356 778
(NOK tho usands)
Non-current
receivables
Current
receivables
Non-current
liabilities
Current
liabilities
Salmon Evolution Norway AS 621 204 2 165 - -
Salmon Evolution Asia AS 28 772 - - -
Kraft Laks AS - - - -
K Smart Farming Co., Ltd
- - - -
Total intercompany balances 649 976 2 165 - -
Intercompany and related party transactions:
(NOK thousands)
Revenue Interest
Salmon Evolution Norway AS 9 868 11 324
Salmon Evolution Asia AS - 778
Kraft Laks AS - -
K Smart Farming Co., Ltd - -
Total intercompany balances 9 868 12 102
Annual report 2021
Extending the ocean potential 109
Intercompany receivables to Salmon Evolution Norway AS are unsecured. The bank loans have
security in all material assets of Salmon Evolution Norway AS, including but not limited to land and
plant and machinery. Salmon Evolution ASA as parent company of the Group has also fully
guaranteed the Group’s bank loans.
Salmon Evolution ASA also requires an administration fee from Salmon Evolution Norway AS.
There were no other transactions with group companies and related parties in 2021.
Note 4 Taxes
Calculation of deffered tax/deferred tax benefit
(NOK thousands)
2021 2020
Fixed assets -
Right-of-use assets 216 -
Lease liabilities -217 -
Other current liabilities -
Net temporary differences -1 -
Tax losses carried forward 52 798 32 096
Basis for deferred tax 52 797 32 096
Deferred tax (22%) 11 615 7 061
Deferred tax benefit not recognised in the balance sheet* -6 896 -7 061
Deferred tax in the balance sheet 4 719 -
*Deferred tax benefit has not been recognised in the balance sheet as the Company is in its start-up phase and does not
have any historical results to refer to when assessing whether future taxable profits will be sufficient to utilize the tax
benefit. However, there is payable tax and deferred tax in the subisiary Kraft Laks. The group assumes to utilize tax
losses carried forward against tax positions in Kraft Laks AS.
Basis for income tax expense, changes in deferred tax and tax payable
(NOK thousands)
2021 2020
Result before taxes 2 943 251
Permanent differences* -23 646 -32 346
Basis for the tax expense in the current year -20 703 -32 096
Change in temporary differences -1 -
Basis for payable taxes in the income statement -20 704 -32 096
*The Permanent differences in 2021 mainly relates to costs in connection with the Company's listing in Oslo Børs.
Components of the tax expense
(NOK thousands)
2021 2020
Payable tax on this year's result - -
Change in deferred tax -4 554 -7 061
Change in deferred tax not shown in the balance sheet -165 7 061
Tax expence -4 719 -
Annual report 2021
Extending the ocean potential 110
Note 5 Personnel expenses, remuneration to the board and auditor's fee
Norwegian entities are obligated to establish a mandatory company pension. This obligation is
fulfilled under the current pension plan. No loans or guarantees have been given to the members of
the board of directors or executive management.
Reconciliation of the tax expense with the nominal tax rate
(NOK thousands)
2021 2020
Result before taxes 2 943 251
Calculated tax (22%) 647 55
Tax expence - -
Difference -647 -55
The difference consists of:
Tax on permanent differences -5 201 -7 116
Change in tax rate - -
Change in deferred tax
4 719 -
Change in deferred tax due to change in tax rate - -
Change in deferred tax not shown in the balance sheet -165 7 061
Sum explained differences -647 -55
Personnel expenses, remuneration to executives and accrued liabilities to be paid in 2022
(NOK thousands) 2021 2020
Salaries 7 807 0
Social security 1 425 0
Pensions 83 0
Other benefits 16 0
Share-based payments 1 535 0
Director's fee (both paid in 2021 and liabilities to be paid 2022) 3 685
Gross personnel expenses 14 551 0
Number of full-time employment equivalents 2 0
Remuneration and compensation to members of the board
(NOK thousands) 2021 2020
Tore Tønseth (Chairman of the Board) 500 80
Kristofer Reiten (Member of the Board) 250 240
Glen Bradley (Member of the Board) 250 140
Peder Stette (Member of the Board) 250 140
Anne Breiby (Member of the Board) 250 0
Yun Ki Yun (Member of the board) - From september 2020 208 0
Janne-Grethe A. Strand (Member of the board) - From March 2021 42 0
Ingvild Vartdal (Member of the Board) - from March 2021
42 0
Frode Kjølås (Member of the Board) - Until March 2021 208 140
Ingjarl Skarvøy (Member of the Board) – Until March 2020 0 100
Per Olav Mevold (Member of the Board) – Until March 2020 0 100
Anders Sandøy (Member of the Board) – Until March 2020 0 100
Frank Småge (Member of the Board) – Until March 2020 0 100
Jonny Småge (Member of the Board) – Until March 2020 0 na.
Total board of Directors 2 000 1 140
The compensation paid to the board of Salmon Evolution ASA was in 2020 expensed through Salmon Evolution Norway AS
Annual report 2021
Extending the ocean potential 111
Note 6 Other operating expenses
Note 7 Share capital
The number of shares issued in the Company on 31 December 2021 was 310,796,489 with a nominal
value of NOK 0.05 each. All shares carry equal voting rights.
The Company issued 83,333,333 new shares in a capital raise in March 2021. Further on 16 August the
company carried out a private placement in connection with the acquisition of Kraft Laks AS where
the company as part of the settlement issued 2,190,694 new shares. In addition, in October the
company carried out a new private placement with Cargill where it was issued 5,541,374 new shares.
As such, the weighted average number of shares outstanding in 2021 has been calculated by
applying a weight of 2/12 of the number of shares before the capital raise in March (219,731,088),
6/12 of the number of shares after the capital raise (303,064,421), 1/12 share after the acquisition of
Kraft Laks (305,255,115), and 3/12 after the private placement with Cargill of the total number after
the final adjustment in October 2021 (310,796,489).
Remuneration and compensation to executive management 2021
(NOK thousands)
Salary Bonus Pension Other Total
Håkon Andrè Berg (CEO) 2 329 2 200 56 13 4 598
Trond Håkon Schaug-Pettersen (CFO) 2 114 800 56 285 3 255
Total executive management 4 443 3 000 112 299 7 853
Auditor's remuneration expensed in 2021
(NOK thousands) 2021 2020
Statutory audit 255 -
Interim audit 97 -
Other services 116 40
Total 468 40
NOK tho usands
2021 2020
Cost of premises 63 0
Other operating and administrative expenses 973 2
Insurance 53 0
Consultancy fees 6 927 18
Other fees (Oslo Børs, VPS) 2 863 0
Total other operating expenses 10 878 20
Nominal value Outstanding Nominal value
Ordinary shares
0,05
310 796 489 219 731 088
Average number of shares
0,05
291 291 107 125 605 681
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Share capital 15 540 10 987
Share premium 1 334 283 804 369
Total 1 349 823 815 355
Annual report 2021
Extending the ocean potential 112
As of 31 December 2021, shares directly or indirectly owned by members of the Board of Directors,
Chief Executive officer, and Executive Management were as follows:
Note 8 Trade and other current liabilities
20 largest shareholders as of 31.12.21 No of shares Percentage share
Ronja Capital II AS 26 687 687 8,6 %
The Bank of New York Mellon SA/NV 20 889 534 6,7 %
Farvatn Private Equity AS 17 093 878 5,5 %
Dongwon Industries Co. Ltd 16 044 572 5,2 %
Rofisk AS 13 274 174 4,3 %
Stette Invest AS 11 236 005 3,6 %
Artec Holding AS 11 139 339 3,6 %
Kjølås Stansekniver AS 10 774 405 3,5 %
Verdipapirfondet DNB SMB 10 544 140 3,4 %
Jakob Hatteland Holding AS 8 706 006 2,8 %
Mevold Invest AS 8 141 141 2,6 %
Lyngheim Invest AS 7 891 141 2,5 %
Bortebakken AS 7 471 090 2,4 %
Ewos AS 5 541 374 1,8 %
Verdipapirfondet DNB SMB 5 529 606 1,8 %
Nordnet Livsforsikring AS 5 196 371 1,7 %
VPF Norge Selektiv 5 132 518 1,7 %
Salmoserve AS 3 727 366 1,2 %
VPF DNB AM Norske Akjser 3 457 555 1,1 %
Danske Invest Norge Vekst 3 150 000 1,0 %
Total 20 largest shareholders 201 627 902 64,9 %
Other shareholders 109 168 587 35,1 %
Total number of shares 310 796 489 100,0 %
No of shares Percentage share
Peder Stette, Member of the board - Stette Invest AS 11 236 005 3,6 %
Kristoffer Reiten, Member of the Board - Bortebakken AS 7 471 090 2,4 %
Glen Allan Bradley, Member of the Board - Salmoserve AS 5 297 366 1,7 %
Trond Håkon Schaug-Pettersen, CFO 190 000 0,1 %
Hakon Andre Berg, CEO - Carried Away AS 185 000 0,1 %
Anne Breiby, Member of the board 89 000 0,0 %
Total 24 468 461 7,9 %
*1,500,000 shares ow ned through Ocean Industries AS and 70,000 shares ow ned privately. Also, including 3,727,366 shares ow ned
through Salmoserve AS where Glen Allan Bradley has an ow nership of 25%.
(NOK tho usands) 31 Dec 2021 31 Dec 2020
Trade payables 569 599
Total trade payables 569 599
(NOK tho usands) 31 Dec 2021 31 Dec 2020
Payroll withholding tax, VAT and other taxes 109 0
Employer's national insurance contributions 605 0
Accrued salaries, holiday pay and bonus provisions 2 373 0
Total other current liabilities 3 087 0
Annual report 2021
Extending the ocean potential 113
Note 9 Leases
The total cash outflow for leases in 2021 was NOK 0.1 million.
Assets and liabilities arising from a lease are initially measured on a present value basis. The lease
payments are discounted using the interest rate implicit in the lease. If that rate cannot be readily
determined, which is generally the case for leases in the Company, the lessee’s incremental
borrowing rate is used, being the rate that the individual lessee would have to pay to borrow the
funds necessary to obtain an asset of similar value to the right-of-use asset in a similar economic
environment with similar terms, security, and conditions.
To determine the incremental borrowing rate, the Company:
• where possible, uses recent third-party financing received by the individual lessee as a starting
point, adjusted to reflect changes in financing conditions since third party financing was received
• uses a build-up approach that starts with a risk-free interest rate adjusted for credit risk for leases
held by the Company, which does not have recent third-party financing, and
• makes adjustments specific to the lease, e.g. term, country, currency and security.
The Company is exposed to potential future increases in variable lease payments based on an index
or rate, which are not included in the lease liability until they take effect. When adjustments to lease
payments based on an index or rate take effect, the lease liability is reassessed and adjusted against
the right-of-use asset. Lease payments are allocated between principal and finance cost. The
finance cost is charged to profit or loss over
Amounts recognised in the balance sheet
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Right-of-use assets
Rent of premises 0 0
Car 216 0
Office supply 0 0
Total right-of-use assets 216 0
Lease liabilities
Current 73 0
Non-current 144 0
Total lease liabilities 217 0
Amounts recognised in the statement of profit or loss
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Depreciation right-of-use assets
Rent of premises 0 0
Car (13) 0
Office supply 0 0
Gross depreciation (13) 0
- Capitalized as assets under construction 0
Net depreciation (13) 0
Interest expense lease liability 2 0
Annual report 2021
Extending the ocean potential 114
the lease period in order to produce a constant periodic rate of interest on the remaining balance
of the liability for each period.
Right-of-use assets are measured at cost comprising the following:
• the amount of the initial measurement of lease liability
• any lease payments made at or before the commencement date less any lease incentive received
• any initial direct costs, and - restoration costs.
Right-of-use assets are generally depreciated over the shorter of the asset’s useful life and the lease
term on a straight-line basis. If the Company is reasonably certain to exercise a purchase option, the
right-of-use asset is depreciated over the underlying asset’s useful life.
The Company has entered into several lease agreements that are considered to qualify as short-
term and/or low value in accordance with IFRS 16. Payments associated with such short-term and
low-value leases are recognized on a straight-line basis as an expense in the profit and loss statement.
Short-term leases are leases with a lease term of 12 months or less. Low-value assets comprise IT-
equipment and small items of office furniture.
Note 10 - Cash and restricted cash
Restricted cash are related to tax withholding for employees (TNOK 276).
Note 11 Share based payments
In 2020 the Company granted 1,625,000 options to employees. These options have been granted at
different points in time during the year, and key assumptions listed below are as such averages of the
different grants. Each option gives the holder the right to subscribe or purchase shares in Salmon
Evolution at an average agreed exercise price of NOK 4.80. The options were granted on 25 August
2020 and 28 September 2020 and has an 18-month maturity. The options can be exercised at earliest,
12 months after the grant date. To account for this, an adjusted Black & Scholes option-pricing model
is used by applying a weighted expected average life of 15 months. All options were exercised in
January 2022 with the new shares being issued in March 2022.
In addition, the Board of the directors on 26 August 2021 established a share option program for
members of the Company's executive management where total of 7,650,000 share options have
been granted. The options will be issued on an annual basis with 1/3 each year, with issue dates
being 31 August 2021 (of which 250,000 share options was issued 22 November 2021), 1 June 2022
and 1 June 2023. Issued options vest 50% after year one and 50% after year two. A total of 2,550,000
(NOK tho usands)
31 Dec 2021 31 Dec 2020
Cash in bank 355 126 520 245
Restricted bank deposits 276 0
Total cash and cash equivalents 355 403 520 245
Annual report 2021
Extending the ocean potential 115
share options were issued with a strike price of NOK 9.00 per share, and a total of 5,100,000 options
were granted at a strike price equal to the closing price of the Company's shares on Oslo Børs on the
last trading day prior to the respective future issue dates + 15%.
The share option agreements contains clauses customary for such agreement, hereunder
cancellation of unvested options in case the employee’s employment with the Company is
terminated, option for the Company to settle exercised option with shares or cash and a cap on
maximum profit from each annual allotment of options.
Further, in case of certain corporate changes, hereunder M&A situations, all granted but yet not
issued options under the program, immediately become exercisable at a strike price equal to the
strike price for the last option grant plus a premium of 15%, without any limitation as to maximum
profit under the program.
The fair value of the options is set on the grant date and is expensed over its lifetime. The fair value
of the options has been calculated using the adjusted Black & Scholes option-pricing model, which
takes into account the exercise price, the term of the option, the share price at the grant date,
expected price volatility of the underlying share, expected dividend and risk-free rates. Given the
recent listing and lack of historical price and volatility data, the expected volatility is based on
historical volatility for a selection of comparable companies listed on Oslo Stock Exchange ("Oslo
Børs"). The risk-free interest rate is set to equal the interest on Norwegian government bonds with the
same maturity as the option. Average key assumptions are listed below.
Outstanding options (in thousands) 2021
2020
Outstanding options 1 January 1625 900
Options granted 7650 1 625
Options exercised 0 600
Options forfeited 0 300
Outstanding options at end of period 9 275 1 625
NOK thousands 2021
2020
Håkon André Berg (CEO) 609 0
Trond Håkon Schaug-Pettersen (CFO) 526 0
Total
1 135 0
Charges to income statement, Salmon Evolution ASA 1 135 2 714
Charges to the shares in Salmon Evolution Norway AS 489 0
Key assumptions 2021
2020
Average fair value (NOK) 1,36 5,25
Average exercise price (NOK) 10,35 5,25
Weighted expected average life (in years) 2,33 1,25
Estimated dividend per share (NOK) 0 0,00
Expected average volatility 29,2 % 71,3 %
Risk-free rate 0,86 % 0,21 %
Group management have the following holdings Holding 01.01 Awarded Exercised Forfeitet
Holding 31.12
Håkon André Berg (CEO) 450 3 000 - - 3 450
Trond Håkon Schaug-Pettersen (CFO) 375 2 400 - - 2 775
Ingjarl Skarvøy (COO Salmon Evolution Norway AS) 100 750 - - 850
Kamilla Mordal Holo (Project Director, Salmon Evolution Norway AS) 100 750 - - 850
Odd Frode Roaldsnes (CCO, Salmon Evolution Norway AS) - 750 - - 750
Total 1 025 7 650 - - 8 675
*Numbers in thousand
Annual report 2021
Extending the ocean potential 116
Note 12 Subsequent events
Phase Two build-out - Indre Harøy
On 7 February 2022 Salmon Evolution announced that had entered into a Heads of Terms with Artec
Aqua for the phase 2 build-out at Indre Harøy. Phase 2 is expected to in principle be identical to
phase 1 and add a further 7,900 tons HOG of annual production, bringing the total planned
production volume to 15,800 tons HOG per annum.
The purpose of the Heads of Terms is to enable Salmon Evolution to be in a position to swiftly
commence construction of phase 2 following the completion of phase 1. Such timeline requires
significant preparatory activities, including but not limited to, planning, concept and detailed
engineering and structuring of subcontractor tender processes.
The Heads of Terms further sets out the main commercial terms to be reflected in a final design and
construction agreement between the parties.
The final design and construction agreement is expected to be effectuated during first half of 2022
and will include financing reservations providing Salmon Evolution with the necessary flexibility to
align the phase 2 build out with the Company’s overall financing plan.
Successful Private Placement
On 5 April 2022 the Company completed a private placement raising gross proceeds of
approximately NOK 300 million in new equity at a subscription price of NOK 9.00 per share. The private
placement attracted strong interest from Norwegian, Nordic and international high-quality investors
and was significantly oversubscribed.
The net proceeds from the private placement will be used to (i) to partly fund the second phase of
the salmon farming facility at Indre Harøy; (ii) to expand the capacity at the smolt facility Kraft Laks
AS; and (iii) for general corporate purposes. The offer shares were allocated in two tranches as
follows: one tranche with 22,574,374 offer shares (“Tranche 1”) and a second tranche with 10,758,959
offer shares (“Tranche 2”). Both Tranche 1 and Tranche 2 were settled with existing and
unencumbered shares in the Company, that are already listed on Oslo Børs, pursuant to a share
lending agreement (the “Share Loan”) between the Company, the managers, Stette Invest AS, Rofisk
AS and Ronja Capital II AS.
The board has accordingly resolved to increase the Company’s share capital by NOK 1,128,718.70,
by issuing 22,574,374 new shares pertaining to the Offer Shares allocated in Tranche 1, pursuant to
the authorisation (the “Board Authorisation”) granted to the board by the Company’s annual
general meeting held on 19 May 2021. The issue of new shares pertaining to the offer shares allocated
in Tranche 2 is subject to approval of the Company’s extraordinary general meeting expected to be
held on or about 2 May 2022 (the “EGM”).
If the EGM does not approve the issuance of the offer shares in Tranche 2, the Company will not
receive any proceeds from the sale of offer shares in Tranche 2. The effective reduction in proceeds
to the Company will in such event be allocated both to the Indre Harøy phase 2 funding and the
Kraft Laks expansion. For the latter, the Company will seek to portion out the smolt build-out and
potentially partly rely upon external sourcing of smolt for a period of time. It is emphasised that no
decision for commencing the Phase 2 project has been made, and reference is made to the
Company announcement dated 7 February 2022 and 10 February 2022 for further information.
Annual report 2021
Extending the ocean potential 117
Directors responsibility statement
Today, the Board of Directors and the Chief Executive Officer reviewed and approved the Board of
Director’s report and the consolidated financial statements for Salmon Evolution ASA, for the year
ended 31 December 2021.
The financial statements have been prepared in accordance with IFRSs and IFRICs as adopted by
the EU and applicable additional disclosure requirements in the Norwegian Accounting Act.
To the best of our knowledge:
– The annual financial statements for 2021 have been prepared in accordance with applicable
financial reporting standards
– The annual financial statements give a true and fair view of the assets, liabilities, financial position
and profit as a whole as of 31 December 2021 for the Company.
– The Board of Directors’ report for the Company includes a fair review of:
i) the development and performance of the business and the position of the Company, and
ii) the principal risks and uncertainties the Company face.
Molde/Ålesund 8 April 2022
BDO AS
Nøisomhed
Serviceboks 15
6405 Molde
Independent Auditor's Report Salmon Evolution ASA - 2021 side 1 av 4
Independent Auditor's Report
To the General Meeting in Salmon Evolution ASA
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Salmon Evolution ASA.
The financial statements comprise:
• The financial statements of the parent
company, which comprise the balance
sheet as at 31 December 2021, income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies, and
• The financial statements of the group,
which comprise the balance sheet as at
31 December 2021, and income
statement, statement of
comprehensive income, statement of
changes in equity and cash flows for
the year then ended, and notes to the
financial statements, including a
summary of significant accounting
policies.
In our opinion:
• The financial statements comply with
applicable statutory requirements,
• The accompanying financial statements
give a true and fair view of the
financial position of the company as at
31 December 2021, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
• The accompanying financial statements
give a true and fair view of the
financial position of the group as at 31
December 2021, and its financial
performance and its cash flows for the
year then ended in accordance with
International Financial Reporting
Standards as adopted by the EU.
Our opinion is consistent with our additional
report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and
the Group as required by laws and regulations and 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.
Independent Auditor's Report Salmon Evolution ASA - 2021 side 2 av 4
We have been the auditor of Salmon Evolution ASA for 2 years from the election by the general
meeting of the shareholders on 3 July 2020 for the accounting year 2020 (with at renewed election
on the General Asembly 19 May 20221).
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.
Accounting treatment of asset under construction
Description of the key audit matter
How the key audit matter was addressed in
the audit
Capitalised expenditure on asset under
construction
Asset under construction makes up 57% og the
total assets of the group (976 MNOK). If we
exclude cash and cash equivalents, assets
under constructions makes up 81% of total
assets. Cost of 751 MNOK has been capitalized
in 2021 (194 MNOK in 2020). Phase 1 of the
construction will be finalized late 2022. Part of
the construction is taken into use in Q1 2022.
Part of the additions is related to indirect cost.
Accumulated the indirect cost to asset under
construction is 43 MNOK. The additions in 2021
equals 67% of the total indirect cost in the
subsidiary Salmon Evolution Norway. The
percentage to asset under construction is based
on time estimates for relevant employees.
The accounting treatment of expenditure in
relation to asset under construction has been
identified as a key matter in connection with
the audit of the consolidated financial
statement.
We have agreed the opening balance with prior
year. We have tested the basis for additions
through sampling. The selected direct cost
samples were verified against supporting
documentation from suppliers and assessed
that the transactions had incurred, that the
costs qualified for capitalisation and that the
transactions were recorded in the proper
period. In addition we have reconciled
accounts payable for the main supplier Artec
Aqua AS.
In relation to indirect cost to asset under
construction we have assessed the principles
used for allocation and reviewed the allocation
keys based on the working tasks for the
different employees.
Other information
The Board of Directors and the Managing Director (management) is responsible for the other
information. The other information comprises the Board of Directors’ report and other 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 other information.
Independent Auditor's Report Salmon Evolution ASA - 2021 side 3 av 4
In connection with our audit of the financial statements, our responsibility is to read the other
information and, in doing so, consider whether the other information is materially inconsistent with
the consolidated 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, we are required to report that fact. We have
nothing to report in this regard.
Opinion on the Board of Director’s report
Based on our knowledge obtained in the audit, in our opinion the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable legal requirements.
Our opinion on the Board of Director’s report applies correspondingly for the statements on
Corporate Governance and Corporate Social Responsibility.
Responsibilities of the Board of Directors and the Managing Director for the Financial Statements
Board of Directors and the Managing Director (management) are responsible for the preparation of
financial statements that give a true and fair view in accordance with International Financial
Reporting Standards as adopted by the EU, and for such internal control as management determines
is necessary to enable the preparation of financial statements that are free from material
misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group's ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Company or 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.
For further description of Auditor’s Responsibilities for the Audit of the Financial Statements
reference is made to:
https://revisorforeningen.no/revisjonsberetninger
Report on compliance with Regulation on European Single Electronic Format (ESEF)
Opinion
We have performed an assurance engagement to obtain reasonable assurance that the financial
statements with file name “549300P2OB7L255PF765-2021-12-31-en.zip” have been prepared in
accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and
the accompanying Regulation on European Single Electronic Format (ESEF).
Independent Auditor's Report Salmon Evolution ASA - 2021 side 4 av 4
In our opinion, the financial statements have been prepared, in all material respects, in accordance
with the requirements of ESEF.
Management’s Responsibilities
Management is responsible for preparing, tagging and publishing the financial statements in the
single electronic reporting format required in ESEF. This responsibility comprises an adequate
process and the internal control procedures which management determines is necessary for the
preparation, tagging and publication of the financial statements.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Molde, 8 April 2022
BDO AS
Roald Viken
State Authorised Public Accountant
Annual report 2021
Extending the ocean potential 122
Sustainability Indicators and GRI Index
Being transparent in our reporting and operation have been important factors for us from the start.
Therefore, we have chosen to report on our environmental, social, and governance factors already
from 2021, even though we will not be producing any fish before 2022. Due to the fact that we are
still growing and there is still a lot of uncertainty on actual impact, we have chosen to report with
reference to the Global Reporting Initiative (GRI) Standards (2021) in the 2021 reporting. We have
ambitions for reporting in accordance with from next year and have plans in place to extend and
enhance our reporting process going forward.
GRI DISCLOSURE
LOCATION
GRI 2: General Disclosures 2021
2-1 Organizational details
p. 9-13, 15,18
2-2 Entities included in the organization’s sustainability reporting
Salmon Evolution ASA
2-3 Reporting period, frequency and contact point
01.01.2021-31.12.2021
Annual reports from 2021
Contact point: CFO
2-4 Restatements of information
N/A – 2021 is first year of GRI reporting
2-5 External assurance
N/A – no external assurance of ESG
reporting for the 2021 report
2-6 Activities, value chain and other business relationships
p. 9-13, 31, 36
2-7 Employees
p. 32-35
2-8 Workers who are not employees
N/A – only employees or
subcontractors
2-9 Governance structure and composition
p. 38
2-10 Nomination and selection of the highest governance body
p. 45-46
2-11 Chair of the highest governance body
p. 46
2-12 Role of the highest governance body in overseeing the
management of impacts
p. 46
2-13 Delegation of responsibility for managing impacts
p. 36
2-15 Conflicts of interest
p. 35 44
2-16 Communication of critical concerns
p. 44
2-17 Collective knowledge of the highest governance body
p. 39-41
2-19 Remuneration policies
p. 46-47
2-20 Process to determine remuneration
p. 46-47
Annual report 2021
Extending the ocean potential 123
2-22 Statement on sustainable development strategy
p. 25-26
2-23 Policy commitments
p. 36
2-24 Embedding policy commitments
p. 36
2-27 Compliance with laws and regulations
p. 37
2-28 Membership associations
p. 46
2-29 Approach to stakeholder engagement
p. 36
2-30 Collective bargaining agreements
p. 32-33
GRI 3: Material Topics
3-1 Process to determine material topics
p. 22
3-2 List of material topics
p. 22
3-3 Management of material topics
p. 22
GRI 201: Economic Performance
201-1 Direct economic value generated and distributed
See financial statements and notes p.
61-98
201-2 Financial implications and other risks and opportunities due to
climate change
p. 27, 56-57
201-3 Defined benefit plan obligations and other retirement plans
See financial statements and notes p.
61-98
201-4 Financial assistance received from government
See financial statements and notes p.
61-98
GRI 205: Anti-corruption
205-2 Communication and training about anti-corruption policies and
procedures
p. 43
205-3 Confirmed incidents of corruption and actions taken
Zero (0) incidents
GRI 301: Materials
301-1 Materials used by weight or volume
p. 31
301-2 Recycled input materials used
p. 26
GRI 302: Energy
302-1 Energy consumption within the organization
pp. 26, 29
302-2 Energy consumption outside of the organization
pp. 26, 29
GRI 303: Water and Effluents
303-1 Interactions with water as a shared resource
pp. 25-30
Annual report 2021
Extending the ocean potential 124
303-2 Management of water discharge-related impacts
pp. 25-30
303-3 Water withdrawal
pp. 25-30
303-4 Water discharge
pp. 25-30
303-5 Water consumption
pp. 25-30
GRI 304: Biodiversity
304-2 Significant impacts of activities, products and services on
biodiversity
p. 28
GRI 305: Emissions
305-1 Direct (Scope 1) GHG emissions
p. 31
305-2 Energy indirect (Scope 2) GHG emissions
p. 26 – 100% renewable energy
305-5 Reduction of GHG emissions
p. 31
GRI 306: Waste
306-1 Waste generation and significant waste-related impacts
pp. 27-28
GRI 401: Employment
401-1 New employee hires and employee turnover
p. 35
401-3 Parental leave
p. 32
GRI 403: Occupational Health and Safety
403-1 Occupational health and safety management system
pp. 32-33
403-2 Hazard identification, risk assessment, and incident investigation
pp. 32-33
403-3 Occupational health services
pp. 32-33
403-4 Worker participation, consultation, and communication on
occupational health and safety
pp. 32-33
403-5 Worker training on occupational health and safety
Health and safety training for all
employees
403-6 Promotion of worker health
pp. 32-33
403-9 Work-related injuries
pp. 32-33
403-10 Work-related ill health
Zero (0) incidents
GRI 404: Training and Education
404-1 Average hours of training per year per employee
p. 33
404-2 Programs for upgrading employee skills and transition assistance
programs
p. 33
Annual report 2021
Extending the ocean potential 125
404-3 Percentage of employees receiving regular performance and
career development reviews
p. 33
GRI 405: Diversity and Equal Opportunity
405-1 Diversity of governance bodies and employees
pp. 19-20, 34, 39-41 (BoD)
405-2 Ratio of basic salary and remuneration of women to men
p. 34
GRI 406: Non-discrimination
406-1 Incidents of discrimination and corrective actions taken
Zero (0) incidents reported
GRI 413: Local Communities
413-1 Operations with local community engagement, impact
assessments, and development programs
pp. 36
Annual report 2021
Extending the ocean potential 126
Important of abbreviations used in this report
LW: Live weight
HOG: Head on gutted
HFS: Hybrid flow-through system
ESG: Environmental, Social and Governance
CAGR: Compounded Annual Growth Rate
ABOUT SALMON EVOLUTION
The Company's first production facility is under construction at Indre Harøy,
strategically located on the Norwegian west coast with unlimited access to
fresh seawater, renewable energy, established infrastructure for salmon
farming, and an educated and experienced work force. The entire project is
designed for an annual capacity of approx. 31,500 tonnes HOG.
The Company has also entered a joint venture with Dongwon Industries
where the parties will develop, construct and operate a land-based salmon
farming facility in South Korea with an annual production capacity of 16,800
tonnes HOG, using Salmon Evolution's chosen HFS technology.
Salmon Evolution ASA is listed at Oslo Børs under the ticker SALME.
OFFICE ADDRESS
PRODUCTION SITE
6430 Bud, Norway
BUSINESS REGISTRATION NUMBER
NO 925 344 877 MVA
E-mail: post@salmone.no
Web: salmonevolution.no