Cloudberry Clean Energy Annual report 2020

Cloudberry Annual report 2020 Board of Directors report 26 dependent on a number of factors such as project availability, local authority approvals, environmental impact, suppliers, financing, power prices and the regulatory framework in the relevant market. Market risk is mainly related to the attractiveness of small-scale hydropower projects and wind projects in the Nordic markets, as derived from the devel- opment in power prices relative to the prices of key construction components. Cloudberry manages the risk through close follow-up and monitoring of operating assets and developing projects. Procedures and guidelines for the business are implemented and reviewed regularly. Additional information about operational risk is presented in the sustainability section of the Annual Report. See also further information about the operational and market risk in the Group Financial Statement, note 7, and commercial and operational risk in note 8. Political risk Cloudberry operates in Sweden and Norway. The company`s activities are subject to the laws and regulations applied by the governmental authorities in connection with obtaining licenses and permits, government guarantees, and other obligations regulated by law in each country. Regulatory author- ities exercise considerable discretion in matters of enforcement and interpretation of applicable laws, regulations and standards, the issuance and renewal of licenses and permits, capital transfer restrictions and in monitoring licensees’ compliance with the terms thereof. Cloudberry emphasises the uncertainty these factors have when making invest- ment decisions and continuously monitors changes in the political landscape and includes this in the relevant discussions. For further information risks related to politi- cal and regulations, please confer the Group Financial Statement, note 7 Market risks and note 8 Commercial and operational risk. Financial risk Through its business activities, Cloudberry is mainly exposed to market risks including power prices, interest rate risk, currency risk, credit risk and liquidity risk. Financial risk management is based on the objective of reducing negative cash flow effects and, to a lesser extent, negative accounting effects of these risks. Currency and interest rate risks are regulated by means of mandates and managed by using hedging instruments. Cloudberry’s interest rate exposure is related to its debt portfolio and managed based on a balance between keeping interest cost low over time and contributing to stabilise the group’s cash flows. For further details, please confer the Group Financial Statement, note 9 Financial risk. Corporate Governance The Board of Directors has a strong commitment to maintaining a high standard of corporate gov- ernance. This ensures trust, and effectively and continuously improve communication between management, the Board of Directors, sharehold- ers, and other stakeholders. Cloudberry complies with the Norwegian Code of Practice (NUES) of 17 October 2018. The Annual Report includes a statement on Cloudberry`s corporate governance principles and practices, including corporate audit, internal control of financial reporting and the work of the Board of Directors.