Arribatec Group ASA

Annual Report (ESEF) • Apr 27, 2023

Untitled 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Annual report 2022 ^ Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | We simplify complexity ^ We create and take care of your business opportunities by connecting people, processes and systems. Our technology and competence give you time to focus on what’s important. Arribatec Group ASA | Annual report 2022 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Contents ^ Highlights 4 Arribatec at a glance 4 Highlights of the year 5 Key figures 6 Letter from the CEO 7 Our business 9 Arribatec vision and values 9 Shareholder information 10 Code of Conduct 12 ESG report 14 Board of Directors report 26 Board of Directors 26 The Board of Directors’ Report 27 Responsibility Statement 33 Financial statements 34 The Group 35 Parent Company 85 Auditor’s report 98 Corporate Governance 103 APMs, terms and abbreviations 108 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 33 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Arribatec at a glance ^ More about usOur results Our people Recurring of total revenue 35% Employees 353 Organic growth 11.2% Nationalities 29 Number of clients 1 780 • Listed on Oslo Stock Exchange • 60+ Software and solution offerings • Key partnerships: Unit4, QualiWare, Hypergene, Rambase, Microsoft, CatalystOne, Pagero, PowerBI • 40% of business outside of Norway • 16 offices around the globe • 35% women, 65% men • Main industries: Governmental, Higher education, Research, Health, Energy and oil & Gas, Bank & Finance, Shipping, Hospitality, Engineering and construction, Non-profits Overall job satisfaction score 7.4 (out of 10) Average age 40 years Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 44 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back HighlightsHighlights | Arribatec at a glanceHighlights | Arribatec at a glance 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Highlights of the year ^ • Aligned with strategy from the past acquisitions we have professionalised the Group by integrating and coordinating the business across geography and Business Areas in the Group • We build enduring relationships with businesses based on our understanding of their needs • Business Development and sales force has been significantly developed and increased • Arribatec Cloud was ISO 27001 certified in March. This ensures deliveries with a high degree of security and quality • We have won contracts with large corporations like Backe group and Hære Isaksen, FTI Consulting Inc, Gassco, Repsol, Thon hotel chain • After having restructured the Business Area Marine during 2022, the BA sold part of its IP portfolio and will focus on the asset management software, InfoShip Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 55 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back HighlightsHighlights | Highlights of the yearHighlights | Highlights of the year 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Key figures ^ Key consolidated figures and ratios Full year 2022 Full year 2021 Revenue TNOK 504 968 413 938 Gross profit TNOK 389 934 321 079 EBITDA TNOK (34 107) (6 800) Adjusted EBITDA TNOK (25 090) (1 601) Operating profit/(loss), EBIT TNOK (90 339) (49 770) Net profit/(loss) TNOK (83 393) (48 858) Revenue growth y/y for the quarter/full year % 22.0% 168.7% Gross profit margin % 77.2% 77.6% EBITDA margin % (6.8%) (1.6%) Adjusted EBITDA margin % (5.0%) (0.4%) Earnings per share NOK (0.13) (0.10) Cash at end of period TNOK 40 449 43 758 Equity TNOK 281 927 316 506 Equity ratio % 54.7% 57.3% Price per share at end of reporting period NOK 0.369 1.180 FTEs (own employees) Number 353 374 No. of outstanding shares, beg. of period Number 584 903 064 418 583 331 New shares issued Number 105 670 153 166 319 733 No. of outstanding shares, end of period Number 690 573 217 584 903 064 Average number of shares, year to date Number 658 988 513 489 277 730 Gross profit 390 MNOK EBITDA margin (6.8%) Revenue 505 MNOK Revenue growth y/y 22.0% Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 66 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back HighlightsHighlights | Key figuresHighlights | Key figures 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Letter from the CEO | A year of building common structures ^ Reflecting on the past year in Arribatec, we are proud to share our progress, milestones and developments. In addition to an increase in organic growth, 2022 has been a transformative year for Arribatec. We have invested significant amount of time and resources on building structure, processes, policies and tools in order to better prepare the group for profitable growth in the coming years. The ongoing pressure on companies globally to automate, improve, and create value has during 2022 created significant opportunities for organic growth for Arribatec. We have been winning contracts across all our business areas with a broader selection of products and services. The holistic product offerings and our expertise we now have in our group differentiate us in the market, as we offer a unique mix of consulting, management systems and cloud services like no other provider can, and this drove a 22% revenue growth for the group for 2022. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 77 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back HighlightsHighlights | Letter from the CEOHighlights | Letter from the CEO 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Prepared for profitable growth sustainable in the long run To prepare for accelerated growth, we have spent the past year on strategic initiatives, taking action where we were subpar and adjusting our organisation. This included resizing BA Marine, selling a part of our IP, Infoship Performance; resizing and moving our software development activities from Poland to Norway and finalizing the core products for Hospitality. As a result, we are now well-equipped to grow further, and we have already experienced the synergies from great collaborations and joint processes across our business areas. This has created new opportunities that we could only seize as a group. All internal processes and systems in place Internally, we have achieved several milestones that have been critical to position ourselves for continued success. This includes implementing Business Process Management (BPM) and Enterprise Resource Planning (ERP) systems and several extensive security-, risks- and compli- ance projects. Everything was implemented by use of internal resources, and the teams involved have done a fantastic job simplifying our organisational structure, streamlining our daily operations and securing compliance. We moved in to a new group head office in Oslo in early 2022, creating an inclusive and inspiring environment that connects all our business areas to a united group. The move has brought all our teams and business areas together under one roof, allowing us to work more collaboratively and take advantage of the group’s broad expertise. Bold promise and disruption We always had a holistic and client-centric approach, putting the needs of our clients at the forefront of everything we do. 2022 was the year we made a bold promise to all our clients and partners; as problem solvers, we streamline our client’s processes and systems - making them as efficient as possible with lasting results. This has resulted in a new tagline that reflects our commitment to simplifying complexity. Our new tagline, “We simplify complexity”, represents our determination to provide simplified solutions that solve complex business challenges. Looking ahead, we are excited about the opportunities that await. New technology and advances in AI represent significant opportunities for Arribatec. I am of the firm belief that we are well positioned to take advantage of the opportunities these inevitable changes represent for the entire globe. We remain committed to simplifying complexity and providing end-to-end solutions to complex business challenges. We will continue to prioritise sustainability, social responsibility, and innovation in everything we do. Sincerely, Geir Johansen CEO of Arribatec Group Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 88 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back HighlightsHighlights | Letter from the CEOHighlights | Letter from the CEO 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Arribatec vision and values ^ “We simplify complexity”. Arribatec deliver a wide range of products and services to various industries worldwide. The vision “We simplify complexity” is the driving force behind everything we do. Every employee is dedicated to deliver effective and tailored solutions and services that help clients navigate complex challenges and achieve their goals with greater ease. Responsibility We take responsibility Our willingness to take responsi- bility sets us apart. As a group we are authentic, reliable and loyal. We keep our word and own the decisions and actions we take. This is because we understand that we are accountable for our shared impact and results. Integrity We act with integrity Integrity is part of our group DNA. We treat our customers, colleagues and partners with respect, professionality and good intentions, as we believe that this foster trust and long-lasting relationships. We stay true to our group and our shared values even when nobody is watching, as we believe it is the right thing to do. Service-minded We are service-minded We understand that we are only as successful as our external and internal customers. Hence, we listen, work hard to understand the customers’ needs and strive to deliver above their expectations. Empower We empower those around us We have the motivation and confi- dence to empower those around us. We do so by showing interest, actively sharing our knowledge and giving our customers, colleagues and partners the opportunity to develop and grow. By doing so, we lift each other up. The values are recognized as the RISE culture in Arribatec. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 99 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Our businessOur business | Arribatec vision and valuesOur business | Arribatec vision and values 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Shareholder information ^ The Group’s total capitalisation at 31 December 2022 was NOK 254 million, based on a closing share price of that day of NOK 0.37. Dividend policy Arribatec is growing fast, both organically and through M&A activities. Both these avenues for growth require liquidity and availability of sufficient funding as well as a healthy equity ratio. While the group is in an expansion phase, the Board is not planning for regular dividends to be paid to the share- holders. There has not been given, nor proposed to give, a mandate to the Board of Directors to approve a distribution of dividends. Shares and share capital 31 December 2022, Arribatec Group ASA had 690 573 217 ordinary shares outstanding with a par value of NOK 0.28 per share (see Note 25 to the financial statement). The company has one share class, with each share conferring equal dividend rights and votes. On 31 December 2022 the company had 5 483 shareholders. Listing The Company’s shares are quoted and traded in NOK at the Oslo Stock Exchange (Ticker: ARR). The shares are registered in the Norwegian Central Securities Depository (VPS), with Nordea Issuer Service Registrar. The shares carry the security number ISIN NO0012861667. Principal shareholders The 20 largest shareholders of Arribatec are predominantly Norwegian investors. A table of these shareholders is included in this chapter. Investor relations Arribatec will maintain an open dialogue with the capital market. Regular information is therefore published through the annual report, interim reports and presentations and stock exchange announcements. The company distributes all information relevant to the share price to Oslo Børs. Such information is distributed without delay and simultaneously to the capital market and media and published on the company webiste. The CEO and CFO are responsible for the company’s investor relations activities and for all communication with the capital markets. All information is communicated within the framework established by security and accounting legis- lation and rules and regulations of Oslo Børs. All information regarding Arribatec is available on the company’s website at www.arribatec.com. Annual General Meeting The annual general meeting of Arribatec is normally held in May each year. Written notice and additional relevant material are sent to all shareholders individually or to their custodian bank at least three weeks before the AGM is to take place. The notice is also made available on the company’s website. Shareholders are encouraged to participate and to vote at the AGM. To vote, the shareholder must either be physically present or be represented by a proxy. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1010 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Our businessOur business | Shareholder informationOur business | Shareholder information 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 20 largest shareholders at 22 March 2023 Holding Stake FERNCLIFF LISTED DAI AS 16 655 404 24.1% TITAN VENTURE AS 2 810 000 4.1% ARRIBA INVEST AS 2 660 000 3.9% DALLAS ASSET MANAGEMENT AS 2 467 200 3.6% JOAR AARENES 2 411 185 3.5% SRK CONSULTING AS 1 780 947 2.6% NORDNET BANK AB 1 776 113 2.6% ERIK SKAAR OPDAL 1 695 200 2.5% TORSTEIN INGVALD TVENGE 1 320 000 1.9% TRUDE HALVORSEN 1 079 789 1.6% HANEKAMB INVEST AS 1 055 347 1.5% DATUM AS 854 291 1.2% MIDDELBOE AS 701 115 1.0% NORSK REGNESENTRAL 677 074 1.0% DANSKE BANK A/S 612 711 0.9% LARS HUGO BRAADLAND OLSEN 574 850 0.8% LCS AS 551 801 0.8% JAN ARNE CHRISTENSEN 515 675 0.7% VALSET INVEST AS 450 000 0.7% MUHLBRADT EIENDOM AS 412 180 0.6% Total 20 largest shareholders 41 060 882 59.5% Other shareholders 27 996 440 40.5% Total 69 057 322 100.0% Geographic residence Shareholders as registered in VPS on 22 March 2023 Country Holding Stake Norway 64 845 025 93.9% Sweden 2 126 382 3.1% Denmark 732 304 1.1% Belgium 338 108 0.5% United Kingdom 298 557 0.4% Other 716 946 1.0% Total 69 057 322 100.0% Ownership structure by size of holding as registered in VPS on 22 March 2023 Number of shareholders Number of shares Holding Stake 11 >1 000 000 35 711 185 51.7% 73 100 001-1 000 000 18 417 662 26.7& 355 10 001-100 000 10 440 560 15.1% 234 5 001-10 000 1 777 947 2.6% 810 1 001-5 000 2 104 659 3.0% 3 925 1-1 000 601 309 0.9% 5 408 5 408 Total 69 057 322 100.0% Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1111 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Our businessOur business | Shareholder informationOur business | Shareholder information 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Code of Conduct ^ Basic Human Rights –fairness and safe work environment Arribatec ensures that employees perform as well as the company’s business conduct are being performed in a way that secures the human rights as described in UN’s universal “Declaration of Human Rights”. One of the main topics in the declaration describes the right to express one’s own convictions, opinions and concerns in good faith and without retaliation. Employee’s rights and duties Arribatec ensures that all employees have work and employment relations that comply with the current laws and regulations. Employees shall receive an Employment Agreement ahead of his/her start of the employment. In most countries in which Arribatec is operating, the Employment Agreement shall reflect a description of his/hers role and responsibilities, work location, working hours, vacation and compensation elements. Employees shall adhere to his/her Employment Agreement. Employment Agreements include reference to the employing company’s policies as well as the respective country’s laws and regulations covering working conditions. Employees have the right to be a member of a union as applicable to the country of employment. Health, Environment and Safety Arribatec ensures that the company represents a safe work- place, a good working environment as well as do the up most to secure the health and security of the employees. The employees shall contribute to the co-worker’s rights at the workplace, as well as a fair treatment by the peers. Any unacceptable event or incident will be analysed by the company, with the aim to resolve the situation within a reason- able period. Protection of Personal Data Arribatec respects and secures the employee’s privacy and personal information at all time. The company will abide by the Personal Data Protection described in the GDPR regulations. Arribatec ensures that a Data Protection Agreement with customers, partners or other relevant parties is entered when applicable. Reference is made to the GDPR guidelines for the company. GDPR regulations applies to countries within EU, and other countries adhering to EU regulations. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1212 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Our businessOur business | Code of ConductOur business | Code of Conduct 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Conflict of interest Employees within Arribatec shall not seek personal interests affecting customers’ or partners’ decisions and/or actions and resulting in financial gain or obtaining other services for the employee representing a conflict of interest. Further descrip- tion of behavior to avoid conflict of interest is described per country, if applicable. Gifts and representation Employees in Arribatec will not offer nor receive any gifts, services, or representation. Gift of symbolic value can be given and/or received from business associates when appropriate. Competition Employees in Arribatec will conduct activities in the commer- cial area in an ethical and a professional way. This behavior also applies in situations where the company experience competition. Employees shall aim to avoid contact with entities understood to operate in an unethical way. Adherence to laws and regulations regarding competition is part of the Code of Conduct within Arribatec. Handling of information Employees in Arribatec have the duty to secure confidentiality of all types of information about Arribatec’s commercial strat- egies, business plans- and activities. The same confidentiality applies to handling of customers’ and partners’ confidential information when knowledge of such information is provided to an employee of Arribatec. Notification of unacceptable situations and/or behavior Arribatec ensures that employees do not experience harass- ment and/or discrimination. Each and every employee shall show respect and integrity in all interactions in the workplace. Employees within Arribatec have the right to provide information about unacceptable situations/behavior to a representative of choice within the company. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1313 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Our businessOur business | Code of ConductOur business | Code of Conduct 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Environment, Social and Governance ^ This section provides an overview of Arribatec’s Environmental, Social, and Governance (ESG) practices over the past year and the plans for ESG. Arribatec believe that integrating ESG considerations into the business operations is crucial for creating long-term value for the stakeholders and for building a sustainable future. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1414 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Arribatec aims to provide transparency and accountability to the stakeholders, and recognize the importance of ESG prac- tices in today’s business landscape. Arribatec is committed to being a responsible and sustainable company. The ESG initiatives shall not only benefit the environment and society, but also contribute to the financial performance and long-term success. By integrating ESG practices into the decision-making processes and daily operations, Arribatec aim to minimize the environmental footprint, foster a diverse and inclusive workplace culture, and maintain high ethical standards. As a comparatively young company that has undergone several mergers and acquisitions in the last two years, the primary objective has been to harmonize and integrate the working practices with the principles of ESG and at the same time remain committed to upholding the ESG responsibilities in the ongoing operations. Authorities Owners Customers Employees SuppliersMedia Society Partners Interest groups Arribatec will continue improving our ESG practices and taking our role in creating positive social and environmental impact Geir Johansen, CEO Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1515 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 The main tasks in 2022 have been to: 1.Identify the relevant ESG topics 2.Conducting benchmark 3.Identifying material topics and conducting SWOT analysis 4.Setting the appropriate targets and ambitions 5.Establish roadmap leading to the ESG targets 6.Finalizing the ESG strategy and incorporate this in the corporate strategy 7.Establish baseline for the ESG performance Our ESG strategy statement At Arribatec we take ownership of the complete service we provide and responsibility for our own impact on the envi - ronment, the society, and the economy throughout our value chain. ESG is incorporated into our business strategy and processes and reflected in our values. We strive to manifest our values and show our commitment to ESG in everything we do. We consider ESG and our values to be mutually reinforcing. We take responsibility in reducing our environmental footprint and caring for our employees and clients. We act with integ - rity in all business practices and internal processes. We are service minded in offering our clients the best products and competence and our employees with the best development opportunities. We empower our employees, clients, and business partners to act in the best interest of the planet and society. Arribatec has identified eight priority areas within ESG that guide the operational decision making, as well as the product and service offerings. These priority areas drive how we work with the value chain. Environment • Our aim is to become carbon neutral by 2030 • We aim to ensure 100% reuse and recycling rate of elec- tronic waste by 2026 Social • We have a strong focus on ESG competence building among our employees and across the group • Our employees are our main asset. We want our employees to thrive at work and we aim to be recognized as an employer by choice, placing our people at the heart of everything we do • We aim for our employees to find meaning in what they do and to develop their skills and abilities Governance • We aim to influence and support our business partners and clients to maintain high standards of ESG • Ethical business conduct is at the highest priority in Arribatec. We have zero tolerance for corruption and unethical behaviour • We aim to ensure high-level protection of our customer and employee data Each of the eight priority areas has been given concrete objectives and actions making sure Arribatec act and deliver in accordance. ESG performance Achieving the goals and objectives is impossible without measuring the starting point and tracking the progress. In 2022, the focus has been on establishing the baseline and defining the appropriate targets. To ensure consistency and avoid fragmentation in the efforts, Arribatec has opted to use the GRI standards to report on the ESG performance. This includes implementing common processes for collecting data, reporting, monitoring performance, and taking appropriate action where needed. The following three subsections will elaborate on the work Arribatec has undertaken and the performance. Environment The ongoing effects of climate change become increas- ingly evident each year, making it one of the most pressing challenges of our era. As a multinational organisation with operations in close to 30 countries, Arribatec is dedicated to fulfilling the responsibility in addressing climate change and minimizing the emissions intensity as the group continue to grow. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1616 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Energy The operations produce the following emissions based on the GHG emission standard; scope 1 and 2. Arribatec has ESG- reporters (supervisors) located at every office with key responsibility to report annually on all metrics. Scope 1 emissions: 2 781 tonnes CO 2 e Scope 1 emissions are direct greenhouse (GHG) emissions that occur from sources that are controlled or owned by Arribatec (e.g., emissions associated with fuel combustion in boilers, furnaces, vehicles). Scope 2 emissions: 167 438 tonnes CO 2 e Scope 2 emissions are indirect GHG emissions associated with the purchase of electricity, steam, heat, or cooling. Although scope 2 emissions physically occur at the facility where they are generated, they are accounted for in Arribatec’s GHG inventory because they are a result of the organisation’s energy use. The emission for 2022 will found the baseline for future improvements. The strategy states that Arribatec shall “reduce the emission from direct activities by 30% by 2024 compared to baseline in 2023”. This work has already started. Energy consumption through own operations kWh Cooling 395 182 Heating 856 358 Electricity renewable 180 828 Electricity non-renewable 399 048 Arribatec has identified where the energy consumption comes from, helping the company identify where the need for improvement is to meet the goal of reducing the emission and ultimately become carbon neutral. Given the locations, most of the energy comes from heating. Arribatec strive to get most of the electricity from renewable energy. As a result, Arribatec has ensured that all the datacentres have green electricity certificates and that the suppliers are chosen based on their environmental performance. Circular economy As a first assignment to reuse and recycle 100% of all elec- tronic waste by 2026, Arribatec needed to create the baseline for the e-waste reduction. Equipment disposal closets was launched early in 2022 to many of our offices, making sure all equipment not possible to reuse internally are either recycled or fixed to be reused. Reused units 150 Recycled units 325 Products in process 251 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1717 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Social Arribatec strongly believe that the core strength of the group lies in the day-to-day efforts of the employees, who work tirelessly to grow the business and enable Arribatec to help clients in overcoming their challenges and seizing new oppor- tunities. In other words, the employees are the driving force behind the company, and it is therefore essential to continu- ously prioritize their needs and aspirations to ensure continued growth. The social impact goes beyond the work Arribatec do for the employees and clients. Arribatec strive to make a positive difference in the communities and the world through charitable initiatives, sponsorships and volunteer work. Corporate Social Responsibility Arribatec is committed to be a good corporate citizen and demonstrate integrity and high ethical standards in all its busi- ness dealings. Arribatec’s Board of Directors has implemented guidelines for Ethical and Corporate Social Responsibility. The purpose of these guidelines is to create a sound corporate culture and to preserve the integrity of Arribatec by helping employees to promote standards of good business practice. Arribatec’s guidelines on Ethical and Social Responsibilities applies to all employees of the Group and to anyone who holds a position of trust in the Group, including members of the boards and consultants acting on behalf of the Group. The principles and standards provided therein aim to provide guidance to Arribatec’s people for a common platform and to support Arribatec’s vision, core values and principles. These guidelines are instrumental for Arribatec’s approach to human rights, fair working environment and equal rights, health and safety, environment, business ethics and anti-corruption. The Group regularly reviews the guidelines and will continue its ongoing efforts to educate the organisation on the prevailing standards and principles. Arribatec’s Ethical and Corporate Social Responsibility Guideline is publicly available on Arribatec’s website. Human rights Arribatec shall ensure that the company’s business conduct is being performed in a way that secures human rights as described in the UN’s universal “Declaration of Human Rights”. One of the main topics in the declaration describes the right to express one’s own convictions, opinions and concerns in good faith and without retaliation. Working environment The Group has business contacts of different nationalities and cultures and has built an international mindset for years. Employees are encouraged to treat each other and business contacts with respect and act according to local laws and regulations, as well as to pay attention to local values and norms for social conduct. The Group does not tolerate derog- atory treatment of any employee. The Board of Directors and Management seeks to create a working environment that is pleasant, stimulating, safe and beneficial to all employees. The Group’s working environment complies with applicable rules and regulations and the Board of Directors has not found reason to implement any special measures in this respect. Going forward, Arribatec commits to actively continue its work for a safe and nurturing working environment in accordance with applicable rules and regulations. Equal rights Arribatec does not accept discrimination on the grounds of race, colour, gender, sexual orientation, age, disability, language, religion, legitimate political or other opinions, national or social origin, property, birth or other status. The Group’s facilities are equally well equipped for females and males. The Group complies with Norwegian legal require- ments with respect to gender representation in the Board of Directors. The Board of Directors will continue its efforts to ensure that the principle of equal treatment is carried out in accordance with the adopted policy. Both recruitment of new personnel and professional development for the Group’s existing employees will be based on qualifications, achievements and equal opportunities. Health and Safety Health and safety are indispensable components of all the Group’s activities. All hazards and risks to health and safety must be mitigated when identified. Generally, Arribatec’s business involves low risk in the day-to-day activities, without the use of chemicals, heavy machinery or equipment that can Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1818 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 cause damage or injuries. Delivery of Arribatec’s services and solutions is sometimes done in cooperation with business partners, which all shall be of good reputation and standing. Environment The Group’s operations shall always be in accordance with applicable environmental legislation. Arribatec’s guidelines on Social and Corporate Responsibility provide that the Group shall always strive for improvements that may reduce its environmental impact. Arribatec does not own or operate manufacturing facilities. Arribatec seeks to limit its resource consumption, prevent unnecessary environmental pollution, including optimising transportation of goods, and manage waste in an environment-friendly and resource-efficient manner. Business ethics and anti-corruption The Group’s operations depend on the trust of contractual parties, authorities, shareholders, employees and society in general. In order to gain trust, the Group is dependent upon professionalism, expertise and high ethical standards in all aspects of the Group’s work. This applies to the way the Group operates and the conduct of everyone associated with the Group. All employees are expected to behave with care, integ- rity and professionalism and abstain from actions that may weaken confidence in the Group. The Group’s Ethical Guidelines and Corporate Social Responsibility Guidelines contain guidelines on ethical behaviour in business relations and are applicable to all employees in the Group. These guidelines clearly state that Arribatec has a zero-tolerance policy for any form of corruption or bribery and encourages reporting of suspected misconduct. The Group’s guidelines explicitly govern conflict of interests, gifts and money laundering. No employee may receive bene- fits for themselves or for others from the Group’s business contacts if such benefits are based on the employment rela- tionship. Correspondingly, no one shall give such benefits to the Group’s business contacts. Business courtesies of modest value, conforming to normal social customs and not intended for influence, are not considered bribes. All gifts with an estimated value of more than NOK 1 000 must be reported to the Group’s CFO, who will assess whether the relevant gift can be received on a case-by-case basis. Arribatec has to date not been accused of, or involved in, any cases pertaining to any form of corruption or bribery. Arribatec encourages each employee to report on possible censurable incidents. Arribatec’s employees have an obligation to report on criminal activity and on incidents that could endanger life or health. Raising awareness of Arribatec’s existing guidelines has been the Group’s main action with regard to business ethics and anti-corruption, and the Group will continue such work going forward. Neither the Board of Directors nor management are aware of any breach of the Group’s ethical code of conduct. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 1919 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Work force highlights Work environment Arribatec run weekly pulse surveys to measure, monitor and follow-up job satisfaction. The weekly survey allows the company to build a healthy and productive culture from the ground up, by listening to the employees and actioning their feedback. Despite the challenging time in the marked and the changes Arribatec has gone through the satisfaction numbers on all nine parameters are still around industry index. One of the strategic objectives for 2023 is to score above industry index in all parameters. Diversity highlights The Group is founded based on senior high-level competence providing the marked with the most in depth expertise within its domains, which is reflected in the age distribution. The average age in Arribatec is 40. The youngest employees are apprentices, while the largest age group is between 40-49 years. Arribatec value age diversity and are committed to maintaining a broad range of ages within the workforce, as it creates a more productive and conducive work environment. To ensure preparedness for any potential organisational changes, Arribatec has performed a succession planning process for all levels within the organisation. This strategic initiative is aimed at identifying and developing potential successors for key positions, with a focus on building a strong talent pipeline that can help maintain continuity and stability even in times of change. By proactively planning Leadership Job satisfaction Meaningfulness Autonomy Work situation Participation Personal development Team spirit Commitment 7.9 7.1 7.2 7.7 7.2 7.6 6.8 8.1 7.5 7.9 Index 7.1 Index 7.6 Index 7.6 Index 6.8 Index 7.7 Index 7.2 Index 8.1 Index 7.8 Index Total 7.4 (business industry index 7.5). Score out of 10. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2020 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 for succession, Arribatec aim to mitigate potential risks and ensure that the right people are in the right roles at the right time. The voluntary turnover rate at Arribatec stands at 8.53%. While the aim is to retain the employees for the long-term, some amount of turnover can be healthy as it brings in new employees with new energy, skills and perspectives. In 2022, Arribatec hired 82 new employees, most of whom were hired as part of the growth strategy, while some were replacements. Arribatec place great importance on diversity, which is evident from the fact that the work force includes 29 different nationalities. The gender diversity The workforce currently has a higher number of men than women. This is not intentional, but rather a result of the companies that has been acquired in recent years and the limited number of women available in the industry. However, Arribatec are encouraged by the fact that the ratio is gradually improving, and are actively working towards achieving a more balanced gender ratio. Ratio of salary of women to men • Ratio of salary of women to men (Top Management): 1.01 • Ratio of salary of women to men (Mid Management): 1.22 • Ratio of salary of women to men (Non-Management employee): 0.84 The ratio of women’s salaries to men’s salaries is slightly higher for those in management positions, while it is lower for those in non-management positions. Arribatec regularly monitors this ratio to ensure that no intentional or unintentional discrim- ination exists. Upon closer examination, it is apparent that the variation in the ratio is influenced by factors such as seniority, competence and skills, educational level, and job position. Sick leave Arribatec has a low sick leave percentage of 2.05% of total workdays, which is a privilege. Arribatec recognize the importance of physical and mental health, which is why it is prioritized as a focus area throughout the year. Recently, a mental health campaign was conducted to bring attention to a topic that can be difficult for many to talk about. < 20 years 20-29 years 30-39 years 40-49 years 50-59 years > 60 years 0 5 10 15 20 25 30 Age distribution % Age distribution % Top management Per cent 18.18 Women Men 81.82 Mid management Per cent 35.90 Women Men 64.10 Employees (non-management employee) Per cent 36.17 Women Men 63.83 In total Per cent 35.44 Women Men 64.56 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2121 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Arribatec understand that achieving a work-life balance can be challenging, which is why a system to monitor the number of hours worked by each employee has been implemented to ensure that every employee maintain a healthy balance. Additionally, Arribatec keep a close eye on the results of the weekly pulse survey to identify any negative trends that may contribute to increased sick leave. Various social events take place in different parts of Arribatec to foster a positive work environment, in addition to provide training activities such as trips or gym membership sponsorships to promote physical activity among the employees. As part of the employee bene- fits program, Arribatec offer insurance and health benefits. Arribatec do a lot of environmental acts such as installing beehives, planting trees and cleaning beaches. To the right, an example from when the Spanish team planted trees outside Granada. During 2022, instead of holiday presents to the employees, Arribatec arranged a survey among the employees to decide where donations should be given. As a result, Arribatec gave donations to Children International, Doctors without Borders, Care, International Federation Red Cross and Red Crescent and UNICEF. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2222 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Governance As a professional service and IT company listed on the Oslo Stock Exchange, Oslo Børs, Arribatec aim to maintain the highest standards of governance and accountability, and to ensure that the stakeholders can have confidence in the busi- ness practices. Arribatec do not only have a responsibility to govern its own operations effectively but are also expected to deliver systems and services to the clients at the same standards. The clients and stakeholders rely on Arribatec to provide secure and reliable technology solutions, and Arribatec recognize that the success depends on maintaining their trust. Authority and governance The level of authority is stated in the Delegation of authority policy and matrix that state the mandate for each level of the organisation. This ensures decisions are made at the right level, involving the right personnel. The governance hierarchy model to the right visualizes the governance structure of Arribatec and the management system, ensuring that we do the right things right. Arribatec has built a robust management system that guides the company in the right direction and ensure that everyone know who does what, when and how. The management system ensure that risk is managed, and that the company operate safe, reliable, efficient, and effective. Commitment and compliance to the management system is a requirement. Doing the right things Doing things right The future we are working towards The principles that guide all our actions and form the foundation of our culture What we choose to focus our resources on in order to achieve our goals The intentions and high level requirements that set the frames for how we work The way we organise “how work gets done” to deliver value to our customers and stakeholders IT systems, detailed descriptions, checklists and templates that guide how to perform spesific activities Laws, regulations, standards and external requirements Opportunities and risks Vision Values Strategy Policies Work processes and procedures Supporting documents and systems Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2323 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Corporate governance Arribatec are committed to maintaining the highest standards of corporate governance and transparency. The company believe that effective corporate governance is essential for building trust and confidence among the stakeholders, including shareholders, employees, customers, suppliers, and the wider community. See chapter Corporate Governance Statement. Compliance A key aspect of the management system involves detailing how Arribatec ensure compliance. The ability to achieve the growth ambitions and maintain the market position hinges entirely on the professionalism and conduct of the employees, as well as the commitment to operating with the utmost ethical standards in accordance with laws and regulations. The Arribatec values, which is referred to as “RISE”, serve as a guiding force for the actions and form the bedrock of the compliance culture. Arribatec has built code of conducts, policies, processes and guidelines making sure the company operate in compliance with applicable laws and regulations. These includes areas such as information security, data privacy, anti-bribery and corruption, environmental sustaina- bility in addition to other areas. The focus on compliance, operating in accordance with laws and regulations, and upholding high ethical standards extends not only to the internal operations but also to the suppliers, partners and clients. The suppliers shall comply with the code of conduct, all applicable laws and regulations, contractual obligations, and the terms of the supplier code of conduct. The supplier code of conduct is making sure that every supplier fully respects human rights, do not use child labour, refrain from human trafficking, comply with employment rights in the country in which they operate, respect environmental, health and safety matters and have zero tolerance for corruption. Arribatec screen all existing and new suppliers based on these criterias. See our Supplier code of conduct at www.arribatec.com/inves- tors/supplier-code-of-conduct. Data privacy and information security As a group that handles a significant amount of sensitive data and information from multiple clients, data privacy and infor- mation security are critical considerations. Arribatec recognize the potential disastrous consequences of a data breach or mishandling of the clients’ data, not only for the clients but for the company and the stakeholders as well. That is why Arribatec has taken extensive measures to ensure that the company are fully compliant with GDPR regulations and have obtained the ISO 27001 certification. The adherence to these frameworks demonstrates the commitment to main- taining the highest standards of data privacy and information security. Each of the team members has integrated this focus into their work practices, and it is an integral part of the company culture. Arribatec understand the value of the clients’ trust and work hard to earn and maintain it. By prioritizing data privacy and information security, Arribatec can ensure that the clients’ confidential information remains safe and secure, and by that maintaining the reputation as a reliable and trustworthy cloud and service company. As part of the mandatory onboarding process, all new employees are required to undergo information security training. The employee security handbook and policies are consistently enforced and regularly reviewed in information security meetings, email and intranet reminders, and relevant gatherings. Furthermore, Arribatec undergo regular testing to ensure that the company is not susceptible to any information security breaches. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2424 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Final word In closing, Arribatec are committed to ESG practices and dedi- cated to build a sustainable future. The company have made significant progress over the past year, building the necessary strategy, processes, and systems to improve the ESG perfor- mance. With these building blocks in place, Arribatec are well-positioned to deliver on the ESG targets and ambitions in the years ahead. Looking at 2023, the biggest effort will be focused on training and developing the employees. Arribatec recognize that the employees are the greatest asset, and by investing in their knowledge and skills, Arribatec can improve the ESG prac- tices across all areas of the business. Necessary training and resources will be provided to the employees to incorporate ESG considerations into the decision-making processes and daily operations. Arribatec will encourage the employees to take an active role in shaping the ESG strategy. Arribatec remain committed to being a responsible and sustainable company and believe that the ESG practices are integral to our long-term success. Arribatec look forward to continuing the work on ESG and making a positive impact on the environment, society, and the stakeholders. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2525 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back ESG reportESG report ESG report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Board of Directors ^ Martin Nes Chairman Chairman Martin Nes has been CEO of Ferncliff TIH AS since 2010. He holds a law degree from the University of Oslo and also holds a Master of Laws degree from the University of Southampton, England. Prior to joining Ferncliff, he spent several years with the Norwegian law firm Wikborg Rein, working in both the Oslo and London offices, and with the international law firm Evensen & Co. Mr. Nes has extensive corporate expe- rience and is/has been chairman and/ or a member of the boards of several listed companies, including SD Standard ETC Plc, Dolphin Drilling AS, Saga Pure ASA, Standard Supply AS, Aqualis ASA, Nickel Mountain Group AB, Self-Storage Group ASA, NEL ASA, and Weifa ASA. He is a Norwegian citizen and resides in Norway. Martin Nes has served the Board of Arribatec Group ASA since February 2020. He is also the chairman of the Audit Committee of Arribatec. Øystein Stray Spetalen Board member Board member Øystein Stray Spetalen is the Chairman and owner of invest- ment firm Ferncliff II TIH AS. He is an independent investor. He has worked in the Kistefos Group as an investment manager, as a corporate advisor in different investment banks, and as a portfolio manager in Gjensidige Forsikring. Mr. Spetalen is a chartered petroleum engineer from NTNU. Mr. Spetalen is a Norwegian citizen and resides in Norway. Øystein Stray Spetalen has served the Board in Arribatec Group ASA since February 2020. Kristin Hellebust Board member Board member Kristin Hellebust is the CCO of Xplora Technologies AS and has previously served several years as CEO of Nordisk Film Shortout AS and as CEO of Storm Studios AS and as a lawyer at Advokatfirmaet Selmer DA. Ms. Hellebust currently serves on the board of several listed companies. She holds a Master of Laws degree from the University of Oslo, an Executive Master of Management program in Financial Strategy from BI Norwegian School of Management, and an Executive MBA from the Norwegian School of Economics. Kristin Hellebust has served the Board of Arribatec Group ASA since October 2020. She is a member of the Audit Committee of Arribatec. Henrik Lie-Nielsen Board member Board member Henrik Lie-Nielsen is an experienced entrepreneur, private investor, leader, and advisor and serves on the board of several companies in Norway and Sweden. He has founded several tech and tech-enabled companies in Norway and has spent most of his career in the intersection between business development and technology in financial services. Mr. Lie Nielsen has studied at Stanford University Graduate School of Business Executive Education and Harvard Business School Executive Education. Henrik Lie-Nielsen has served the Board of Arribatec Group ASA since October 2020. He is a member of the Audit Committee of Arribatec. Linn Katrine Høie Board member Board member Linn Katrine Høie is a specialist in twin transition and has worked with sustainability and digitalisation for more than 20 years. Throughout her career, she has led major technology projects both internationally and in Norway. Linn is an active participant in initiatives for women in tech and works actively for providing sustainability with tangible content, where trust between people is key in any initiative related to value creation. Currently, she is the program manager for the Fauna Experiment owned by Tore Gjedebo and works as an advisor for Innovation Dock in Stavanger. She holds a master’s degree in societal safety and risk management, a bachelor’s Degree in information science, as well as a specialisation in project management. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2626 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | Board of DirectorsBoard of Directors report | Board of Directors 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | The Board of Directors’ Report ^ About Arribatec Arribatec is a global provider of digital business solutions that streamline complex companies, processes and systems, making them as efficient as possible – with lasting results. With a wide range of backgrounds and expertise, Arribatec offer a unique mix of services and products for your business that you won’t find elsewhere. Arribatec has built the strategy around growth, talents, deliver- ables and customers. These elements are interdependent and supported by a comprehensive set of strategic objectives and roadmaps to guide our efforts. The objectives are formulated with the aim of achieving prof- itable and sustainable growth for the shareholders, as well as attracting, retaining, and developing talents within Arribatec. Additionally, the objectives are expected to ensure effective development, delivery, and support of all our products and services, and ultimately to increase customer engagement and satisfaction. 2022 has marked a significant milestone for Arribatec. Leaving the phase of acquisitions from 2020 and 2021 behind, 2022 was the year of business collaboration including integration of all businesses on to uniform digitalized platforms across business areas and countries. The wide range of our products and services complement each other, leading to improved outcomes both for our clients and internally. Arribatec’s unique product and service offerings are tailored to help any organisation operate safely, reliably and efficiently. The management systems provide a comprehensive view of an organisation’s operations and how things relate to each other, enabling better decision-making and optimisation of way of working. To support this, the ERP solutions act as the core engine of an organisation’s business landscape, providing an integrated platform for seamless management. The analytics systems provide insights into complex data, making it easier for organisations to monitor performance and forecast accurately. All products and services can be securely hosted and supported by the Cloud infrastructure and hosting offer- ings. This ensures that the clients can access their data and systems at all times, without any disruptions or downtime. In summary, the tailored product and service offerings are designed to help any organisation achieve their goals with ease, by providing them with the necessary tools and support to succeed. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2727 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | The Board of Directors’ ReportBoard of Directors report | The Board of Directors’ Report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 In addition, the experienced consultants offer both advice and delivery services based on clients’ unique situations and ambi- tions. The seamless integration of the enterprise architecture and business management products and services with ERP solutions, analytics, and cloud infrastructure is a testament to the commitment to providing end-to-end solutions for the clients. Although most of the group’s revenue still comes from Norway, Arribatec aims to become a more prominent player outside Norway. The group’s focus remains on generating recurring revenue in addition to revenue through consultancy services. Operation and Segments Arribatec is divided into five business areas, ref Note 5: • Enterprise Architecture and Business process management (EA&BPM) • Cloud services • Business Services (BizS) • Marine • Hospitality The three largest Business Areas (BA’s) are all industry agnostic, meaning the product and services delivered by the BA’s, can be sold to any industry, private or public. Cooperation between those three larger BAs; EA&BPM, BizS and Cloud is natural, and they meet the needs of medium- and large-sized mature organisations. They are the three largest BA’s both in terms of people and activities and they are considered as the group’s horizontals. Arribatec acquired a start-up that has been further developed and refined during the past two years and represent the Business Area Hospitality. Hospitality has concentrated its efforts on the Nordic market and simultaneously completed the development of the next generation customer experience with self-service/check-in kiosks. In addition to finalizing the product development, Hospitality has forged strategic part- nerships with some of the most prominent global players in the hospitality industry. The Arribatec Hospitality brand is gaining recognition in the market, and Hospitality receive weekly requests from companies seeking to be clients or partners. In 2022, Hospitality secured contracts with renowned hotel chains and stand-alone hotels in both Norway and Sweden, with satisfaction scores exceeding industry standards. All these accomplishments bode well for a promising 2023. Marine deliver its self-developed software delivered to the shipping industry bringing ship owners to a different level of control of their vessels with functions designed to cope with their specific market requirements. Marine underwent an extensive restructuring process during 2022, which included sales of one IP and a further redundancy process scaling down the number of employees by 32. In addition to the restruc- turing process, Marine focused on maintaining talent and client satisfaction in a market still suffering from the aftermath of the pandemic. Arribatec has completed its primary integration activities. The group has established organisational structures, processes, and systems that can handle substantially higher volumes. As a result, Arribatec is beginning to see the fruits of its integration activities from the last eight quarters. Employees are working seamlessly across locations and departments, creating new opportunities for the company. Clients are purchasing more of the group’s services and products and more talents apply to our job openings. Arribatec experience a low churn and a net client growth. Our biggest contracts ever were signed in 2022. Being a part of something larger, with a wide range of offerings, has proven to be highly valued by our clients. Financial Review Profit and Loss Full-year revenue amounted to NOK 505 million for 2022, compared to NOK 414 million in 2021. In 2022, recurring revenue amounted to NOK 184 million, while consulting revenue ended at 298 million and other revenue at NOK 22 million. Divided by region, Norway stands for NOK 305 million, Europe NOK 163 million, and NOK 37 million from America. The relative size within the regions shows a slight increase for Europe and America is stable from 2021 to 2022. Gross profit was NOK 390 million for the full-year 2022 (NOK 321 million). The margin is slightly lower, 77% against 78% last year. The decreased margin mainly relates to increased costs of goods purchased for resale. Personnel costs were up NOK 66.1 million from NOK 272.7 million in 2021 to NOK 338.8 million in 2022, relating to the growth Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2828 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | The Board of Directors’ ReportBoard of Directors report | The Board of Directors’ Report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 of number of employees in 2022. Number of full-time employees decreased from 374 as per 31.12.2021 to 353 as per 31.12.2022. The average number of FTEs was 363 in 2022 compared to 273 in 2021. The decrease mainly stems from the restructuring of the Business area Marine that was finalized in the end of 2022. Other operating costs were NOK 85.2 million (NOK 55.2 million). Depreciation and amortizations amounted to NOK 56 million (NOK 43 million) and included an impairment of NOK 5.6 million relating to own software developed, mainly from discontinued operation in Italy. The net financial result amounted to negative NOK 0.1 million (negative NOK 3.9 million). The net loss for 2022 was NOK 83.4 million compared to a net loss of NOK 48.9 million in 2021. Financial position In 2022 Arribatec issued 105.7 million new shares, of which 2 million (0.2 million) relates to the share consideration from the settlement of the acquisition Integra in 2021, while 103.6 million shares related to shares issued in April and June 2022. As of 31 December 2022, total assets were NOK 515 million, compared to 552 million as of 31 December 2021. Intangible assets accounted for NOK 281.2 million (NOK 316.4 million). The intangible assets mainly consist of goodwill, customer rela- tions, and technical software through business combinations. Other non-current assets were NOK 65.8 million (NOK 58.2 million) including right-to-use assets according to IFRS 16 of NOK 41.7 million (NOK 30.3 million), deferred tax assets of NOK 12.3 million (NOK 9.5 million) and tangible assets of NOK 6.5 million (NOK 7.4 million). Current assets amounted to NOK 168.3 million (NOK 177.8 million), including accounts receivables of NOK 88.2 million (NOK 88.7 million), contract assets of NOK 16.3 million (NOK 19.5 million) and cash and cash equivalents of NOK 40.5 million (43.8 million). Total interest-bearing debt stood at NOK 33.1 million at the end of 2022 (NOK 37.4 million). Deferred tax liabilities at the end of 2022 were NOK 10.6 million (17.1 million. At the end of the year, 2022 total current liabilities were NOK 153.6 million (NOK 148.5 million). The increase from last year mainly relates to increases in accounts payables of NOK 10.6 million and a decrease of contracts liabilities (deferred revenue) of NOK 5 million Total equity as per 31 December 2022 was NOK 281.9 million (NOK 316.5million), corresponding to equity ratio of 54.7% (57.3%). Cash Flow Arribatec’s cash flow from operating activities in 2022 was negative with NOK 26.8 million, which compares to a negative NOK 26.2 million in 2021. The main effects come from the net change in accounts receivables and payables that had a positive impact of NOK 11.1 million while the positive effect from amortization, depreciation and impairment stood for 56.2 million, together these represent the main difference between Arribatec’s operating result and cash flow from operating activities. Net cash flow from investing activities was negative with NOK 6.2 million (NOK 117.1 million). Of this, cash inflow from a sale of intangible assets was NOK 9.3 million, and capitalized purchased software and internal development costs relating to the development of own software solutions were negative by 13.8 million. Net cash flow from financing was positive by NOK 27.5 million (negative 1.6 million). This mainly relates to proceeds from borrowings shares issued by NOK 51.8 million and instalments paid on the leased assets of NOK 15.9 million in addition to 5.5 million debt repayments. Arribatec had NOK 40.5 million in cash and cash equivalents at the end of the year compared to NOK 43.8 million last year. Risk profile Arribatec’s regular business activities entail exposure to various types of risk. The group manages such risks proac- tively, and the board of directors regularly analyses its operations and potential risk factors and takes steps to reduce risk exposure. Arribatec’s results of operations could be negatively affected if the Group cannot adapt, expand or develop its services in response to changes in technology or customer demand. The market for the services offered by the Group is char- acterized by rapid technological changes, frequent new product introductions, technology enhancements, increasingly sophisticated customer requirements, and evolving industry standards. The Group’s future success depends on its ability to continue to provide high-quality consulting services and to develop, market, and implement services and solutions that are attractive, timely, and cost-efficient for its existing and new customers. If the Group fails to keep up with technological changes or to convince customers of the value of its services, intellectual assets, and solutions considering new technologies or new offerings by competitors, the Group’s business, results Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 2929 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | The Board of Directors’ ReportBoard of Directors report | The Board of Directors’ Report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 of operations, financial condition, cash flow and/or prospects could be materially and adversely affected. Arribatec’s activities involve various types of financial risks like credit risk, liquidity risk, currency risk and interest risks. The primary focus of the Group’s capital structure is to ensure sufficient free cash to meet its obligations on an ongoing basis and at the same time enable the Group to make strategic actions to grow. Credit relates to the risk that counterparty is unable to settle their obligations under a financial contract or customer contract, leading to a financial loss. As part of the Group’s earning model, certain of its customers pay for software and services under a Solution as a Service (SolaaS) arrangement, meaning that the customer is paying a monthly recurring amount for, inter alia, the software and services already provided or to be provided by the Group. As such, these customers’ monthly recurring payment obligations also include payment for licenses and software already integrated and implemented, in addition to services related to continuous maintenance and consulting. This in contrast to e.g., Software as a service (SaaS) arrangement, where the customer, in general, pays a lump sum for the initial software integration and implementation, and subsequently only pays for services related to maintenance and consulting services. Although the Group has opted for this model to ensure some predictable long-term income, the Group is dependent on its customers having the ability and/or willingness to pay for the software and services already provided or to be provided. Should a certain amount of the customers under the SolaaS arrangement for some reason be prevented from paying the whole or the remaining portion of these fixed monthly payments (e.g., as a result of bankruptcy) during the duration of the contract, the Group’s earnings, results of operations and prospects may suffer as a result as it has ultimately taken the cost related to software and services already provided. The risk on existing contracts is considered low as the customers on SolaaS contracts are mainly governmental. Arribatec conducts its business in currencies other than its functional reporting currency, making its results of operations, financial position, and future prospect vulnerable for currency fluctuations. Because part of the business is conducted in currencies other than its functional reporting currency (NOK), the Group will be exposed to volatility associated with foreign currency exchange rates. Exchange rate fluctuations may affect the Group’s financial results through translation of the profit and loss accounts and balance sheets of foreign subsid- iaries into NOK. Currency risks may also arise when Group companies enter into transactions that are denominated in other currencies other than their functional currency. A large part of the Group’s balance sheet assets consists of excess values and goodwill. The valuation of those includes Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3030 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | The Board of Directors’ ReportBoard of Directors report | The Board of Directors’ Report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 forward-looking information, hereunder estimates, targets, forecasts, plans and similar projected information. Such forward-looking information is based on various assumptions made by the Company and/or third parties. Assumptions are subject to inherent risks as they are assumptions regarding the Company in the future and may prove to be inaccurate or unachievable. Such assumptions cannot be verified. Additionally, forward-looking information is based on current information, estimates, and plans that may be changed within a short period without notice. Arribatec holds Elite Directors & Officers Liability insurance covering the Directors of the Boards in the listed company and its subsidiaries and the CEO. The insurances cover the liability from claims which may arise from the decisions and actions taken within the scope of their regular duties. The coverage includes financial protection against the consequences of wrongful acts, their personal liability, financial loss in respect of any securities claim made against the company, and certain costs and fines related herein. The policies also cover reim- bursement of the company where coverage has been made on their behalf. Coverage does not include fraudulent, criminal, or intentional non-compliant acts or cases where directors obtained illegal remuneration or acted for personal profit. The limitation of the liability is NOK 100 million. Research and development The company continuously develops its own software and solutions which can be deployed across customer segments in all industries. The development is essential to ensure that Arribatec can continue to grow its software portfolio, expand its service offering with cloud infrastructure services and gain a larger customer base. This is done to drive sales growth via cross-selling and upselling, where the intention is to improve EBITDA margins by increasing the share of our own IP in future solutions, thus improving EBITDA margin by selling more of our own software and services through SaaS subscription models. At the end of 2022, Arribatec had capitalized a total of NOK 11.7 million (NOK 19.7 million) of time and material used to develop internal systems and software. The company has no ongoing research activities. Corporate governance Arribatec’s corporate governance structure is based on Norwegian corporate law and Norwegian securities legisla- tion and stock exchange regulations. The company believes that good corporate governance builds confidence among shareholders, customers, and other stakeholders, and thereby supports maximal value creation over time. Being a listed company on the Euronext Oslo Exchange and considering that Arribatec wishes to place emphasis on sound corporate governance, the Company has a policy document on the basis of the Norwegian Code of Practice for Corporate Governance dated 14 October 2021. Read more about our work in the chapter Corporate Governance on page 99 of this annual report. Corporate social responsibilities Developing sound health, safety and environment (HSE) prin- ciples is important for the Group. Sick leave was 2.05% (2021: 3.2% in Norway and 0.9% in other countries) for the Group for the year. No serious work incidents or accidents resulting in personal injuries or damages to materials or equipment occurred in 2022. The Board and management continue to focus on equal oppor- tunities for men and women. We embrace diversity in terms of age, gender, nationality and experience within our workforce, as we believe diverse teams have the best means to uncover opportunities and ensure customer success. We continuously work towards closing the gender gap in a rather male-dom- inated industry, and we can see a clear improvement in our own workforce since 2021, where Arribatec successfully has increased the percentage of female employees by 5.4% (from 30% to 35.4%). At year-end, two of the five Board members were female. The company has during 2022 been a signatory to the UN Global Compact, supporting the UN Sustainable Development Goals. Arribatec’s values and corporate policies support these goals. The sustainability report describes Arribatec’s work on ESG, see page 18. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3131 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | The Board of Directors’ ReportBoard of Directors report | The Board of Directors’ Report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 The Norwegian Transparency act The Group has implemented formal guidelines for due dili- gence as required by the OECD Guidelines for Multinational Enterprises. Further information about this is available on the Group’s website: www.arribatec.com The statement of the Transparency Act will be published on the group’s website under the Supplier code of conduct at www.arribatec.com/investors/supplier-code-of-conduct no later than 30 June 2023. Going concern The Board confirms that the annual financial statements have been prepared under the assumption that the Group is a going concern, in accordance with §3-3a of the Norwegian Accounting Act and that such an assumption is appro- priate, based on the fact that the Group has undergone and completed a major structuring and building process to become one Group, the Group’s business strategy and established budgets. Proposed allocation of the company’s results of the year The Parent company, Arribatec Group ASA, had a net negative result after tax of NOK 41.7 million in 2022, compared to a negative NOK 16.2 million in 2021. The result available for disposal of the Annual General Meeting as follows: Covered by other paid-in capital: NOK 41 726 thousand. Outlook Arribatec has an ambitious growth agenda and sees an increasing demand for the product and services that Arribatec brings to the marketplace. With the largest part of the integra- tion work behind us, the Group is now gearing up for increased sales and expanded delivery capacity. Oslo 26 April 2023 The board of Arribatec Group ASA Signed electronically Martin Nes chairman of the board Øystein Stray Spetalen member of the board Kristin Hellebust member of the board Henrik Lie-Nielsen member of the board Linn Katrine Høie member of the board Geir Johansen Group CEO Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3232 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | The Board of Directors’ ReportBoard of Directors report | The Board of Directors’ Report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Responsibility Statement ^ We confirm that, to the best of our knowledge, the Financial Statements 2022, which have been prepared in accordance with IFRS as adopted by EU, give a true and fair view of the Company’s assets, liabilities, financial position, and results of operations, and that the management report includes a fair review of the information required under the Norwegian Accounting act. Oslo 26 April 2023 The board of Arribatec Group ASA Signed electronically Martin Nes chairman of the board Øystein Stray Spetalen member of the board Kristin Hellebust member of the board Henrik Lie-Nielsen member of the board Linn Katrine Høie member of the board Geir Johansen Group CEO Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3333 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Board of Directors reportBoard of Directors report | Responsibility StatementBoard of Directors report | Responsibility Statement 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Condensed consolidated financial statements & notes ^ The Group 35 Parent Company 85 Auditor’s report 98 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 34 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statements of profit and loss 36 Consolidated statement of other comprehensive result 37 Consolidated statement of financial position 38 Consolidated statement of changes in equity 39 Consolidated statement of cash flow 40 Notes to the financial statements 42 Note 1 Corporate information 42 Note 2 Summary of significant Accounting Policies 42 2.1 Basis for preparation 42 2.2 Basis of consolidation 42 2.3 Loss of control 42 2.4 Functional currencies and presentation currency 43 2.5 Business combinations and goodwill 43 2.6 Revenue from contracts with customers 43 2.7 Employee benefits 45 2.8 Research and Development cost 45 2.9 Taxes 45 2.10 Property, plant and equipment 45 2.11 Intangible assets 45 2.12 Financial instruments 46 2.13 Classifications 46 2.14 Right of use assets and Lease liabilities 46 2.15 Provisions 47 2.16 Changes in Accounting Policies and disclosures for 2022 calendar year or thereafter 47 Note 3 Critical accounting estimates and judgements in terms of accounting policies 47 Note 4 Financial risks 48 Note 5 Segment 50 Note 6 Materials, software and services 55 Note 7 Personnel 56 Note 8 Key management 57 Note 9 Other operating expense 59 Note 10 Property, plant and equipment 60 Note 11 Right-of-use assets and lease liabilities 62 Note 12 Intangible assets 64 Note 13 Financial items 66 Note 14 Tax 67 Note 15 Earnings per share 68 Note 16 Goodwill and impairment 69 Note 17 Business combinations 71 Note 18 Investment in subsidiaries 73 Note 19 Other non-current assets 74 Note 20 Account receivable 74 Note 21 Financial instruments 75 Note 22 Other receivables and other current assets 77 Note 23 Contract assets and liabilities 77 Note 24 Inventory 78 Note 25 Cash 79 Note 26 Shares 79 Note 27 Interest bearing loans 81 Note 28 Pensions 82 Note 29 Provisions 82 Note 30 Other current liabilities 83 Note 31 Transactions with related parties 83 Note 32 Pledged assets 84 Note 33 Subsequent events 84 Consolidated financial statements Arribatec Group ASA | Annual report 2022 35 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statements of profit and loss NOK thousand Note Full year 2022 Full year 2021 Revenue 5, 23 504 968 413 938 Materials, software and services 6 (115 035) (92 859) Gross profit 389 934 321 079 Salary and personnel costs 7, 8 (338 800) (272 679) Other operating expenses 9 (85 241) (55 201) Total operating expenses (424 041) (327 879) EBITDA (34 107) (6 800) Depreciation, amortization and impairment 10, 11, 12 (56 232) (42 970) EBIT (90 339) (49 770) Financial income 13 5 191 2 598 Financial expense 13 (5 280) (6 487) Profit/(loss) before tax (90 428) (53 660) Tax expense 14 7 035 4 802 Profit/(loss) after tax (83 393) (48 858) Attributable to: Equity holders of the parent company (83 393) (48 858) Earnings per share: basic 15 (0.13) (0.10) Earnings per share: diluted 15 (0.13) (0.10) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3636 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of other comprehensive result NOK thousand Full year 2022 Full year 2021 Profit/(loss) after tax (83 393) (48 858) Items that may be classified subsequently to profit or loss Foreign currency translation differences - foreign operations 282 390 Other comprehensive income/(loss) for the period 282 390 Total comprehensive income/(loss) for the period (83 111) (48 468) Attributable to: Equity holders of the parent company (83 111) (48 468) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3737 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of financial position NOK thousand Note 31 Dec 2022 31 Dec 2021 ASSETS Non-current assets Property, Plant and equipment 10 6 517 7 445 Right-of-use assets 11 41 719 30 266 Goodwill 12, 16 204 581 205 279 Customer relations 12, 16 34 637 46 031 Other Intangible assets 12, 16 41 934 65 047 Other non-current assets 19 5 323 10 678 Deferred tax assets 14 12 322 9 511 Total non-current assets 347 034 374 259 Current assets Accounts receivable 20, 21 88 214 88 674 Other receivables 21, 22 1 128 2 290 Contract assets 23 16 276 19 549 Inventory 24 3 777 3 179 Other current assets 22 18 484 20 320 Cash and cash equivalents 25 40 449 43 758 Total current assets 168 328 177 771 TOTAL ASSETS 515 362 552 029 NOK thousand Note 31 Dec 2022 31 Dec 2021 EQUITY AND LIABILITIES Equity Share capital 26 193 361 163 773 Other paid in capital 215 645 196 700 Exchange differences 679 398 Other equity (127 758) (44 365) Total equity 281 927 316 506 Non-current liabilities Interest bearing loans 21, 27 18 883 27 902 Non-current lease liabilities 11, 21 26 727 19 148 Other non-current financial liabilities 21 967 96 Deferred tax liabilities 14 10 590 17 084 Provisions 29 14 202 22 789 Total non-current liabilities 71 369 87 018 Current liabilities Interest bearing loans - current portion 21, 27 12 328 9 523 Current lease liabilities 11, 21 16 765 12 346 Accounts payable 21 31 879 21 227 Contract liabilities 21, 22 16 476 21 483 Current tax payable 14, 21 650 1 046 Other current liabilities 21, 30 83 969 82 880 Total current liabilities 162 066 148 505 Total liabilities 233 435 235 523 TOTAL EQUITY AND LIABILITIES 515 362 552 029 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3838 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of changes in equity Equity related to the shareholders of the parent company Restricted NOK thousand Note Share capital Other paid in capital Exchange differences Other equity Total Equity Balance on 1 January 2021 117 203 194 510 8 4 493 316 214 Result of the period (48 858) (48 858) Other comprehensive income for the period 390 390 Total comprehensive result for the period 0 0 390 (48 858) (48 468) Other equity transactions (2 870) (2 870) Share consideration relating to business combination 2020 (Facil, Microsky and Innit) (45 607) (45 607) Capital increase related to business combinations 26 11 628 74 929 86 557 Conditional share consideration relating to acquisition of Integra – shares to be issued during 2022 and 2023 26 11 281 11 281 Capital increase related to merger with subsidiary Arribatec AS 26 34 941 (34 941) 0 Share issue cost (600) (600) Closing balance 31 Dec 2021 163 773 196 700 398 (44 365) 316 506 Balance on 1 January 163 773 196 700 398 (44 365) 316 506 Result of the period (83 393) (83 393) Other comprehensive income for the period 282 282 Total comprehensive result for the period 0 0 282 (83 393) (83 111) Capital issue, April 26 28 000 22 000 50 000 Share issue, repair offer, July 26 1 015 798 1 813 Share consideration relating to acquisition of Integra (2 872) (2 872) Capital issue in relation to acq. of Integra, Nov 26 573 2 299 2 872 Share issue cost (3 280) (3 280) Closing balance 31 Dec 2022 193 361 215 645 679 (127 758) 281 927 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 3939 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Consolidated statement of cash flow NOK thousand Note Full year 2022 Full year 2021 Operating activities Profit/(Loss) before tax (90 428) (53 660) Taxes paid (1 566) (982) Adjustments for: - Finance income and expense 13 73 3 890 - (Increase)/decrease in trade receivables 460 (6 874) - (Decrease)/increase in trade payables 10 652 (13 257) - Depreciation and amortization 10, 11, 12 50 618 39 611 - Impairment losses on intangible assets 12 5 614 3 359 Change in other current accounts (2 190) 1 715 Net cash flows operating activities (26 766) (26 197) Investing activities Sale of intangible asset 9 347 0 Cash received through business combination 17 0 29 857 Cash consideration Investment in subsidiaries 17 0 (118 299) Purchase of property, plant and equipment 10 (1 964) (3 443) Purchase and developement of intangible assets 12 (13 881) (25 411) Interest received 291 212 Net cash flows investing activities (6 207) (117 085) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4040 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 NOK thousand Note Full year 2022 Full year 2021 Financing activities Proceeds from borrowings 27 0 18 445 Change in overdrafts 27 (2 432) (2 067) Repayment of debt 27 (5 464) (3 006) Interest paid (697) (2 507) Received Gov.grants (SkatteFUNN) 3 493 1 438 Instalments lease liabilities (15 932) (13 293) Proceeds from shares issued 51 813 0 Share issue cost (3 280) (600) Net cash flows financing activities 27 501 (1 590) Net change in cash and cash equivalents (5 472) (144 872) Cash and cash equivalents at beginning of period 43 758 188 270 Currency translation 2 163 361 Cash and cash equivalents at end of period, incl. restricted cash 40 449 43 758 -whereof restricted cash 13 492 11 810 Oslo 26 April 2023 The board of Arribatec Group ASA Signed electronically Martin Nes chairman of the board Øystein Stray Spetalen member of the board Kristin Hellebust member of the board Henrik Lie-Nielsen member of the board Linn Katrine Høie member of the board Geir Johansen Group CEO Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4141 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Notes to the financial statements Note 1 Corporate information The Parent Company Arribatec Group ASA (publ) (“Arribatec”), with Norwegian corporate identity number 979 867 654 is a public limited liability company, incorporated in Norway. The registered address is Lørenfaret 1B, NO-0585 Oslo. The company’s shares are traded in Norway on the Oslo Stock Exchange, Oslo Børs. The principal activities of the company and its subsidiaries (the Group) are to be a software and consulting company. With a customer centric engagement model, combined with a deep system-, integration- and domain competence, Arribatec builds long-term strategic partnership with a broad customer base. Arribatec serves more than 1 000 entities spread over 20 countries and various industries, both in the private and public sector. The activities are further described in Note 5. The Annual Report and Parent Company Report for Arribatec Group ASA (publ) were adopted by the Board of Directors on 26 April 2023 and will be submitted for approval to the Annual General Meeting 24.05.2023. Note 2 Summary of significant Accounting Policies 2.1 Basis for preparation The financial accounts for Arribatec Group ASA as “the Parent company” together with its controlled subsidiaries, together called “the Group” have been prepared in accordance with International Financial Reporting Standards as adopted by the EU (IFRS), relevant interpretations, and the Norwegian Accounting Act. The consolidated financial statements have been prepared on a historical cost basis, except where IFRS explicitly requires use of other values. As the Parent company has NOK as its functional currency, the financial accounts are presented in NOK. 2.2 Basis of consolidation The consolidated financial statements comprise the financial state- ments of the Parent Company and its subsidiaries as of 31 December 2022. Control is established when the Parent Company is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its power over the entity. Business combinations are accounted for by using the acquisition method. Consolidation of a subsidiary begins when the Group obtains control over the subsidiary and ceases when the Group loses control of the subsidiary. Where necessary, adjustments are made to the financial statements of subsidiaries to bring the accounting policies used into line with the Group’s accounting policies. There is a presumption that if the Group has the majority of the voting rights in an entity, the entity is considered as a subsidiary. To support this presumption and when the Group has less than a majority of the voting or similar rights of an investee, the Group considers all relevant facts and circumstances in assessing whether it has power over the entity. Including ownership interests, voting rights, ownership struc- ture and relative power, as well as options controlled by the Group and shareholder’s agreement or other contractual agreements. The assessments are done for each individual investment. The Group re-assesses whether it controls an entity if facts and circumstances indicate that there are changes to one or more of the three elements of control. Intercompany transactions, balances and unrealized gains on trans- actions between group companies are eliminated. Unrealized losses are also eliminated unless the transaction provides evidence of an impairment of the transferred asset. Profit or loss and each component of other comprehensive income (OCI) are attributed to the equity holders of the Parent Company. 2.3 Loss of control If the Group loses control over a subsidiary, it derecognizes the related assets (including goodwill), liabilities, non-controlling interest and other components of equity, while any resultant gain or loss is recognized in profit or loss. Any investment retained is recognized at Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4242 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 fair value. A change in the ownership interest of a subsidiary, without a loss of control, is accounted for as an equity transaction. 2.4 Functional currencies and presentation currency The financial statements are presented in NOK, which is the functional currency of the Parent company, as well as being the presentation currency for the Group. For the purpose of presenting this consolidated financial statement, the assets and liabilities of the Group’s non-NOK operations are translated into NOK using exchange rates prevailing at the end of the reporting period. Income and expense items are translated at the average exchange rates for the year. All group transactions and group unsettled matters, and profit and losses for transactions between group companies that are put into effect, are eliminated at the consolidation. 2.5 Business combinations and goodwill Business combinations are accounted for using the acquisition accounting method. Acquisition costs incurred are expensed and included in operating expenses. When the Group acquires a business, it assesses the identifiable assets acquired and liabilities assumed for appropriate classification and designation in accordance with the contractual terms, economic circumstances and relevant conditions as at the acquisition date. The acquirer’s identifiable assets, liabilities and contingent liabilities that meet the conditions for recognition are recognized at their fair values at the acquisition date, except for non-current assets that are classified as held for sale and recognized at fair value less cost to sell, and deferred tax assets and liabilities which are recognized at nominal value. Goodwill arising on acquisition is recognized as an asset measured at the excess of the sum of the consideration transferred, the fair value of any previously held equity interests and the amount of any non-controlling interests in the acquire over the net amounts of the identifiable assets acquired and the liabilities assumed. If, after reas- sessment, the Group’s interest in the net fair value of the acquirer’s identifiable assets, liabilities and contingent liabilities exceeds the total consideration of the business combination, the excess is recog- nized in the income statement immediately. Any contingent consideration to be transferred by the acquirer will be recognized at fair value at the acquisition date. Subsequent changes to the fair value of the contingent consideration which is deemed to be an asset or liability will be recognized in the income statement as financial income or expense. If the contingent consideration is classified as equity, it will not be premeasured, and subsequent settlement will be accounted for within equity. If the business combination is achieved in stages, the fair value of the Group’s previously held equity interest in the acquire is remeas- ured to fair value at the acquisition date through the income statement. For the purpose of impairment testing, goodwill acquired in a business combination is, from the acquisition date, allocated to each of the group’s cash-generating units that are expected to benefit from the combination, irrespective of whether other assets or liabilities of the acquired entity are assigned to those units. The Group assesses each cash generating unit annually to determine whether any indication of impairment exists. Where an indicator of impairment exists, a formal estimate of the recoverable amount is made, which is considered to be the higher of fair value less costs to sell and value in use. If there is an indication that an asset is impaired, the recoverable amount of the asset is calculated in accordance with IAS 36 Impairment of assets. For goodwill, other intangible assets with indefinite useful lives and intangible assets not yet ready for use, the recoverable amount is assessed annually. 2.6 Revenue from contracts with customers Revenue is measured based on the consideration to which the Group expects to be entitled in a contract with a customer. The Group recognizes revenue when it transfers control of a good or service to a customer. Intercompany sales are eliminated. Consulting services Arribatec provides implementation and integration services under consulting contracts with customers. Most contracts have a pricing structure where Arribatec agrees to implement and integrate software for a fixed hourly rate agreed upon in the contract, but where the number of hours to be delivered is not specified in the contract. Arribatec’s performance obligation is satisfied over time because the consulting services does not create an asset that Arribatec could use for an alternative purpose and Arribatec has an enforceable right to payment for the hours worked. Revenue is recognized over time, normally according to the invoiced hours for the period. A contract asset is recognized when invoicing is deferred compared to revenue recognition. A contract liability is recognized when invoicing is done in advance compared to revenue recognition. From time-to-time Arribatec has fixed price consulting contract. In the same manner as for the contract with variable hours, the asset created does not have an alternative use for Arribatec and Arribatec has an enforceable right to payment in line with progress in the project. Arribatec recognizes revenue over time, in line with progress in the project. Progress is estimated as hours spent at the balance sheet date divided with estimated total hours in the project. This requires estimating the remaining hours to complete. Recurring revenue Sale of licenses A license establishes the customer’s rights related to a company’s intellectual property (IP) and the obligations of the company to provide those rights. IFRS 15 distinguishes between whether the license provides a “right to use” or a “right to access” IP. This impacts the timing of revenue recognition. In most cases sale of licenses is part of SaaS and Solaas contracts. Arribatec in some instances has contracts that includes sale of licenses only. Arribatec has analysed its (partner) licensing contracts and concluded that they control the license before it is transferred to Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4343 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 the customer since Arribatec has legal ownership, physical posses- sion and the risk and reward of ownership. Arribatec is therefore the principal in the customer contract. When Arribatec licenses distinct on-premise licenses, these fall under the category “right-to use” since the license grants the right to the IP “as is” when delivered. The distinct on-premise licenses pricing model is a one-time fixed fee. Revenue is recognized at the point in time when the customer is provided with the ability to use the software. The fee is recognized as a revenue at the point of time when the customer has received legal title and physical possession and the customer has accepted the license. Generally, this is at the beginning of the license period. When Arribatec license cloud-based subscription licenses (“right to access”), the license is not considered distinct from the online/hosting service. Revenue is recognized over time, over the license/contract period, as the customer is receiving and consuming the benefits of access to the cloud-based license on an ongoing basis. The cloud- based subscription licenses are sold for a fixed annual or monthly fee. Revenue is recognized linearly over the subscription time. Software as a service (SaaS) Software is provided over time to an end customer from a Data Center managed or contracted by Arribatec. The obligations in the SaaS contract are to offer cloud-based access to the license (owned by Arribatec), maintenance of the utility of the software, including rights to updates and future releases, and in some contracts, provide support. The customer will purchase and obtain control of the software as-a-service on a subscription or consumption basis. Revenue is therefore recognized periodically over the life of the SaaS contract. In some cases, Arribatec has a separate installation and implementation contract regarding the same customer projects. When these contracts are negotiated close in time from each other, Arribatec considers whether the two contracts have been negotiated as a package with a single commercial objective, or not. If this is the case the two contracts are combined. If not, they are accounted for separately. The implementation and installation services are capable of being distinct and distinct within the context of these contracts. This is concluded based on an analysis of the different deliveries and the performance obligations in the contract. Arribatec has therefore concluded that there are generally two distinct performance obliga- tions in the two combined contracts. When there are two combined contracts, the transaction price is allocated between the two perfor- mance obligations based on relative stand-alone prices that are estimated based on the pricing of each element in the contract like hours, contract length, and options to extend the contract. Arribatec’s performance obligation under the installation and integra- tion contract is satisfied over time because the consulting services does not create an asset that Arribatec could use for an alternative purpose and Arribatec has an enforceable right to payment for the hours worked. Revenue is accordingly recognized over time as the installation and integration is performed based on the hours worked. Solution as a service (SolaaS) As for SaaS, the main obligations in the SolaaS contract are to offer a cloud- based, “right to access” type of license, maintenance of the utility of the software, including updates and future releases, and provide support. In the SolaaS contracts an additional part of the value chain, the implementation and integration services, is added to the contract. In Solaas contracts the customer pays a fixed annual or monthly fee that also includes payment for the implementation and integration services” As for the SaaS, contracts with a separate (combined) implementation and integration service contract, generally in the SolaaS contracts, there are two distinct POs. However, this is assessed on a contract to contract basis, where all facts and circumstances are considered. When Solaas contracts is considered two (or more) performance obligations revenue is allocated between the performance obligations based on relative stand-alone selling prices and recognized as follows: – Consulting service. Revenue is recognized over time when the consulting service is delivered. – SaaS (license, online service and maintenance and support): The customer receives and consumes the benefits from the SaaS delivery as Arribatec performs under the contract. Therefore, the performance obligation is satisfied over time and revenue is recognized over the period the service is available for use by the customer. Managed services Under the managed services contracts Arribatec helps customers operate their IT environments, either on premise or from the cloud. Managed services contracts are delivered on a fixed price and a minimum commitment to the customers, on a long-term contract. Additional work above the agreed level is considered normal consulting services. Arribatec delivers an integrated set of services as defined in the managed service agreement. The customer receives and consumes the benefits from the Managed services as Arribatec performs under the contract. Therefore, the performance obligation is satisfied over time and revenue is recognized over time. One-time revenue from third party hardware In some contracts Arribatec delivers both physical hardware and installation of software on the hardware, e.g. for self-service/ Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4444 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 check-in kiosks. In such cases the hardware product is considered as a separate contract obligation that is recognized as revenue when it is installed. Other revenue Revenue from other services Arribatec to a limited extent provides maintenance services, support services and application management services under separate contracts, for a fixed fee. The performance obligations under these contracts are satisfied over time and revenue is recognized accord- ingly. Government grants Government grants are recognized when there is reasonable assur- ance that the grant will be received, and all associated conditions will be complied with. When the grant relates to an asset, it reduces the carrying amount of the asset. The grant is then recognized in profit or loss over the useful life of the depreciable asset by way of a reduced depreciation charge. 2.7 Employee benefits Pension obligations The Group’s pension obligations vary between countries depending on the local legislation and different pension systems, please see Note 28 for further description. The group only has defined contribu- tion retirement plans. Defined contribution retirement plans are retirement plans where the company’s payment obligations are limited to the fixed contributions and where the fees already have been undertaken. The retirement benefits for the individual employee are dependent on the contributions paid to the retirement plan or an insurance company by the employer, and the return of capital invested in the retirement fund. Consequently, it is the employee that holds the risk of return (that the return will be lower than expected) and the risk of the investment (the risk that the invested pension provision will not be sufficient to cover expected retirement compensation in the future). The obligations of the Company related to payments of defined contribution retirement plans are expensed in the income statement as they are earned by the employee for services conducted on behalf of the employer during the period. 2.8 Research and Development cost Development expenditures are capitalized only when the criterion for recognition is met, i.e., it is probable that the expected future economic benefits that are attributable to the asset will flow to the entity, management has committed itself to complete the asset, the technical feasibility of completing the asset has been demonstrated and the cost can be measured reliably. Research costs are expensed in full. The assets are amortized over their expected useful life once the assets are available for use. During the period of development, the asset is tested for impairment annually. Development costs that do not meet the criteria for capitalization are expensed as incurred. 2.9 Taxes Income taxes consists of current tax and deferred tax. Current income tax assets and liabilities for the current and prior periods are measured at the amount expected to be recovered from or paid to the taxation authorities. The tax rates and tax laws used to compute the amount are those that are enacted or substantively enacted by the balance sheet date. Deferred income tax is provided using the liability method on temporary differences at the balance sheet date between the tax bases of assets and liabilities and their carrying amounts for financial reporting purposes. Deferred income tax liabilities are recognized for all taxable temporary differences except where the deferred income tax liability arises from the initial recognition of goodwill or of an asset or liability in a transaction that is not a business combination and, at the time of the transaction, affects neither the accounting profit nor taxable profit or loss. A deferred tax asset is recognized to the extent that is probable that future taxable profit will be available against for which unused tax losses and unused tax credits can be utilized. A deferred tax asset arising from unused tax losses or tax credit is only recognized to the extent that the entity has sufficient taxable temporary differences or that there is convincing other evidence supporting the utilization of the tax losses and tax credits, including the impact of time restriction by local tax authorities. The carrying amount of deferred tax asset is reviewed at the end of each reporting period. Unrecognized deferred tax assets are reassessed at each balance sheet date. Deferred income tax assets and deferred income tax liabilities are offset, when a legally enforceable right exists to set off tax assets against income tax liabilities and the deferred income taxes relate to the same taxable entity or taxation authority. 2.10 Property, plant and equipment Property, plant and equipment are measured at cost in the balance sheet, with a deduction for accumulated depreciation and any impair- ment. Depreciation is made on a straight-line basis over the asset’s estimated useful life, which is assessed on an individual basis, ranging from five to ten years. 2.11 Intangible assets Goodwill Goodwill represents the excess of cost of an acquisition over the fair value of the net identifiable assets of the acquired subsidiary at the date of acquisition. Goodwill on the acquisition of subsidiaries is included within intangible assets. Goodwill that arises on the acqui- sition of subsidiaries is allocated to cash generating units (CGUs). Goodwill is measured at cost (residual) less accumulated impairment losses. Goodwill is tested for impairment at least annually, or when there are indications of impairment. Impairment is determined for goodwill by assessing the recoverable amount of each CGU to which the goodwill relates. When the recoverable amount of the CGU is less than it’s carrying amount, an impairment loss is recognized. Impairment Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4545 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 losses relating to goodwill cannot be reversed in future periods. When the group disposes of an operation within a CGU or group of CGUs to which goodwill has been allocated, a portion of the goodwill is included in the carrying amount of the operation when determining the gain of loss on disposal. The portion of the goodwill allocated is measured based on the relative values of the operation disposed of and the portion of the CGU retained at the date of the partial disposal, unless it can be demonstrated that another method better reflects the goodwill associated with the operation disposed of. The same principle is used for allocation of goodwill when the group reorganises its businesses. Customer relationships and technical assets The assets acquired in a business combination are recognized at fair value on the acquisition date. Customer relationships and databases have a finite useful life and are carried at cost less accumulated amortization. Amortization is calculated using the straight-line method to allocate the cost over their useful lives of three to five years. 2.12 Financial instruments All financial assets and liabilities are initially recognized at fair value, and subsequently classified either as financial assets at amortized cost or financial assets through profit or loss. Accounts and other receivable Accounts receivable and other receivables are initially recognized at the transaction price and are subsequently carried at amortized cost less provision for expected credit losses. Trade and other payables Trade and other payables are initially recognized at fair value, and subsequently measured at amortized cost. Trade and other payables are measures at their nominal amount when the effect of discounting is not material. Cash and Cash equivalent Cash and cash equivalents include cash at banks and on hand and other short term highly liquid investments with original maturities of three months or less. In the consolidated balance sheet, any bank overdrafts are shown within borrowings in current liabilities. Interest bearing loans and other financial liabilities The Group’s debt and other financial liabilities are initially recognized at fair value, including transaction costs directly attributable to the transaction, and are subsequently measured at amortized cost. 2.13 Classifications Fixed assets and long-term liabilities consist of items expected to be settled more than twelve months after the balance sheet date. Current assets and current liabilities consist of amounts that are expected to be settled within twelve months after the balance sheet date. 2.14 Right of use assets and Lease liabilities At the inception of a contract, the group assesses whether the contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time, in exchange for consideration. For contracts that constitute, or contain a lease, the Group separates lease components if it benefits from the use of each underlying asset either on its own or together with other resources that are readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with, the other underlying assets in the contract. The Group then accounts for each lease component within the contract as a lease separately from non-lease components of the contract. At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-use asset for all lease agreements in which it is the lessee, except for the following exemptions applied: • Short-term leases (defined as twelve months or less) • Low value assets For these leases, the Group recognizes the lease payments as other operating expenses in the statement of profit or loss when they incur. The lease liability is recognized at the commencement date of the lease. The Group measures the lease liability at the present value of the lease payments for the right to use the underlying asset during the lease term that are not paid at the commencement date. The lease term represents the non-cancellable period of the lease, together with periods covered by an option either to extend or to terminate the lease when the Group is reasonably certain to exercise this option. The lease liability is subsequently measured by increasing the carrying amount to reflect interest on the lease liability, reducing the carrying amount to reflect the lease payments made and remeas- uring the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in lease payments due to an adjustment in an index or rate. The Group does not include variable lease payments in the lease liability. Instead, the Group recognizes these variable lease expenses in profit or loss. The Group presents its lease liabilities as separate line items in the statement of financial position. The Group measures the right-of use asset at cost, less any accu- mulated depreciation and impairment losses, adjusted for any remeasurement of lease liabilities. The Group applies the depreciation requirements IAS 16 ‘Property, Plant and Equipment’ in depreciating the right-of-use asset, except that the right-of-use asset is depreciated from the commencement Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4646 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 date to the earlier of the lease term and the remaining useful life of the right-of-use asset. The Group applies IAS 36 ‘Impairment of Assets’ to determine whether the right-of-use asset is impaired and to account for any impairment loss identified. 2.15 Provisions Provisions and contingent liabilities Provisions are recognized when the Group has a present legal or constructive obligation as a result of past events, it is more likely than not that an outflow of resources will be required to settle the obliga- tion and the amount can be reliably estimated. Restructuring provisions are recognized only when the recognition criteria for provisions are fulfilled. The Group has a constructive obli- gation when a detailed formal plan identifies the activities concerned, the location and number of employees affected, a detailed estimate of the associated costs, and an appropriate timeline. Furthermore, the employees affected have been notified of the plan’s main features. 2.16 Changes in Accounting Policies and disclosures for 2022 calendar year or thereafter The Group does not expect any standards issued by the IASB, but not yet effective, to have material impact on the Group. Note 3 Critical accounting estimates and judgements in terms of accounting policies The preparation of the consolidated financial statements in conformity with IFRS requires the use of certain critical accounting estimates and assumptions that affect the reported amounts of revenue, expenses, assets and liabilities, and the accompanying disclosures, and the disclosures of contingent liabilities. It also requires management to exercise its judgement in the process of applying the group’s accounting policies. Uncertainty about these assumptions and estimates could result in outcomes that require a material adjustment to the carrying amount of assets or liabilities affected in future periods. Estimates and judgements are continually evaluated and are based on historical experience and other factors, including expectations of future events that are believed to be reasonable under the circumstances. Critical accounting estimates and assumptions The group makes estimates and assumptions concerning the future. The resulting accounting estimates will, by definition, seldom equal the related actual results. The Group based its assumptions and estimates on parameters available when the financial statements were prepared. Existing circumstances and assumptions about future developments, however, may change due to market changes or circumstances arising beyond the control of the Group. Such changes are reflected in the assumptions when they occur. The estimates and assumptions that have significant risk of causing a material adjust- ment to the carrying amounts of assets and liabilities within the next financial year are addressed below. Goodwill In accordance with the stated accounting policy, the group annu- ally tests whether goodwill has suffered any impairment or more frequently if impairment indicators are identified. The recoverable number of cash-generating units has been determined based on value-in-use calculations. These calculations require the use of esti- mates. The value-in-use calculation is based on a discounted cash flow model. The cash flows are derived from the budgets and fore- casts for the next five years, as approved by the Company’s Board of Directors, and do not include significant investments that will enhance the performance of the CGU being tested. The recoverable amount is most sensitive to the discount rate used for the discounted cash flow model, as well as the expected future cash-inflows (sensitive to estimates of sales and cost levels) and the growth rate used for extrapolation purposes. Further details regarding goodwill and impair- ment reviews are included in Note 16. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4747 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 4 Financial risks Arribatec defines risk as all factors which could have a negative impact on the ability of the Group to achieve its business objectives. All economic activities are associated with risk. In order to manage risk in a balanced way, it must first be identified and assessed. Arribatec conducts risk management at both a Group and company level, where risks are evaluated in a systematic manner. The following summary is by no means comprehensive but offers an overview of all material financial risk factors which are considered important for Arribatec’s future development. Risks associated with changes in economic conditions are managed through regular checks on developments in each country. Currency risk Currency risk refers to the risk that the value of liquid and financial instruments may shift as a result of changes in exchange rates. Transactions in foreign currency (other than the unit’s functional currency, which is NOK) are converted at the exchange rate on the transaction date. Monetary items in foreign currency are converted to NOK using the exchange rate at the balance sheet date. Non-monetary items measured at the historical rate expressed in a foreign currency are converted into NOK using the exchange rate on the transaction date. The currency risk is limited in Arribatec as few balance items are posted in foreign currency per 31.12.2022. Credit risk Credit risks are the risks that counterparty will not meet its obligations under a financial contract or customer contract, leading to a financial loss. The Group is exposed to credit risk from its operating activities, primarily related to cash and cash equivalents, trade receivables and contract assets from contracts with the customers and other receiv- ables. As part of the Group’s earnings model, certain of its customers pays for software and services under a solutions as-a-software (SolaaS) arrangement, meaning that the customer is paying a monthly recurring sum for, inter alia, the software and services already provided or to be provided by the Group. As such, these customers’ monthly recurring payment obligations also include payment for licenses and software already integrated and implemented, in addition to services related to continuous maintenance and consulting. This in contrast to e.g. software-as-a-service (SaaS) arrangements, where the customer in general pays a lump sum for the initial software integration and implementation, and subsequently only pays for services related to maintenance and consulting services. Although the Group has opted for this model to ensure some predictable long-term income, the Group is dependent on its customers having the ability and/or willing- ness to pay for the software and services already provided or to be provided. Customer credit risk is managed subject to established policies, procedures and controls relating to customer credit risk management. The maximum exposure to credit risk at the reporting date is the carrying value of each class of financial assets. The Company manage the credit risk by working closely with the customers. Additional cooperation and agreements are made with Partners like collection companies and credit check suppliers. Interest rate risks Interest risk is related to the risk the Group is exposed to from changes in the market’s interest rate which can affect the net profit. The Group’s main interest rate risk arises from long-term borrowings with variable rates, which amounted to NOK 31.2m on 31 December 2022 (2021: NOK 37.4m). The loan carries a variable interest rate based on the interbank rate in each currency with a margin. Any annualized increase or decrease by 100 basis point would increase/ decrease the Groups profit before tax by appr. NOK 0.3m (NOK 0.4m). Liquidity risk Liquidity risk is the potential loss arising from the Group’s inability to meet its contractual obligations when due. The Group monitors its risk of a shortage of funds using cash flow forecasts. The Group had cash and cash equivalents of NOK 40.4m at 31 December 2022 (2021: NOK 43.8m). The following table detail the Group’s remaining contractual maturity for its non-derivative financial liabilities with agreed repayment periods. The tables have been drawn based on the undiscounted cash flows of financial liabilities based on the most likely date on which the Group can be required to pay. The table include both interest and principal cash flows. To the extent that interest flows are floating rate, the undiscounted amount is derived from the interest rate curves at the end of the reporting period. The contractual maturity is based on the most likely date on which the Group may be required to pay, ref Note 10. The amounts presented are subject to change If changes in variable interest rates differ to those estimates of interest rates determined at the end of the reporting period. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4848 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 NOK thousand -6 months 6 months - 1 year 1-2 years 2-4 years 4+ years Total Interest bearing loans 9 525 3 812 7 725 11 880 2 768 35 710 Accounts payable 31 879 0 0 0 0 31 879 Other current liabilities 40 056 43 912 0 0 0 83 968 Total 81 460 47 725 7 725 11 880 2 768 151 558 The Group closely monitor and follow the cash situation. During 2022, Arribatec carried out a private placement and a subsequent repair offer that brought in 51.8 million. The Group’s cash situation, including proceeds from this capital increase, were minus 3.3 million. Furthermore, 2022 was a year bringing the different acquired units into one Group on common policies, structure and systems, with the intention to realize the synergizes and secure being cash positive. Financing risk To support the Group’s growth ambitions, the Group continuously work on securing necessary committed financing and alternative funding sources. Securing non-current financing at competitive terms is a major part of the Group’s long-term liquidity planning. Capital management The primary objective of the Group’s capital management is to ensure the Group maintains a solid capital structure enabling it to develop and build its business to maximize shareholder value. The Group’s objective is to maintain a balance of financial assets that reflects the cash requirement of its operations and investments for the next twelve months. No change was made in the objectives, policies, or process for managing capital during the year ended 31 December 2022. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 4949 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 5 Segment The market for Arribatec’s Software and services are global. The chief decision maker will therefore follow up revenue and profitability on a global basis, segmented into the Business Areas. This is consistent with the internal reporting submitted to the chief operating decision maker, defined as the Management Group. The Management Group is responsible for allocating resources and assessing performance as well as making strategic decisions. Principles of revenue recognition are stated in accounting principles Note 2.6. Segment The management of the Group follows up the revenue by Business Area and geography. During 2022, segment reporting was imple- mented and for comparable 2021 figures, estimates have been applied, ref table below. Business services is focusing on ERP, BI & Analytics, DevOps, integra- tions and software solutions for research institutes. Arribatec Business services provide simplicity by implementing, customizing, maintaining and supporting the entire business landscape, with ERP as the core engine. We integrate it with other marked leading systems that provide better operational support and insight than a single ERP system does. EA & BPM provides Enterprise Architecture and Business Process Management. Arribatec EA&BPM delivers solutions and long-term services within the spaces of business process management, enter- prise architecture and corporate governance to major Norwegian and Nordic customers, both in the private and public sector. Cloud provides cloud services such as hosting IT infrastructure within f ex hybrid, Azure, Splunk and GDPR. Arribatec Cloud provides consulting, outsourcing and cloud services to private and public enterprises. In addition to offering market leading cloud services from Microsoft and Google, Arribatec Cloud also operates its own public cloud offering based on Norwegian data centers to accommodate special use cases for our customers. Hospitality delivers solutions for self-check-in/check-out and payments for the hospitality industry. Marine is the Business Area of Arribatec Group focusing on the Maritime sector. Arribatec Marine competences are the development, implementation, and consulting of the owned asset management system solutions: Infoship. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5050 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2022 NOK thousand Business services EA & BPM Cloud Hospitality Marine Corporate/ Other Eliminations Total Revenue 291 362 89 789 113 726 3 642 47 066 1 166 (41 781) 504 968 Materials, software and services (64 177) (19 812) (48 862) 1 948 (6 365) (17 561) 39 794 (115 035) Gross margin 227 185 69 977 64 864 5 590 40 701 (16 395) (1 988) 389 934 Salary and personnel costs (177 970) (52 108) (41 291) (10 192) (39 066) (18 172) 0 (338 800) Other operating expenses (21 768) (5 437) (22 031) (3 678) (11 702) (22 613) 1 988 (85 241) Total operating expenses (199 739) (57 545) (63 322) (13 870) (50 768) (40 785) 1 988 (424 041) EBITDA 27 446 12 432 1 542 (8 280) (10 067) (57 180) 0 (34 107) Depreciation, amortization and impairment (15 110) (5 707) (7 116) (2 762) (14 696) (10 842) 0 (56 232) EBIT 12 336 6 725 (5 573) (11 042) (24 764) (68 022) 0 (90 339) Net financial items (331) (9) (357) (223) 74 757 0 (89) Profit/(loss) before tax 12 005 6 717 (5 931) (11 265) (24 690) (67 265) 0 (90 428) Gross margin % 78.0% 77.9% 57.0% 153.5% 86.5% na na 77.2% EBITDA % 9.4% 13.8% 1.4% (227.4%) (21.4%) na na (6.8%) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5151 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 NOK thousand Business services EA & BPM Cloud Hospitality Marine Corporate/ Other Eliminations Total Revenue 223 390 72 967 87 673 1 097 49 540 0 (20 729) 413 938 Materials, software and services (44 260) (13 597) (42 505) (1 003) (5 550) 0 14 055 (92 859) Gross margin 179 130 59 371 45 168 94 43 990 0 (6 673) 321 079 Salary and personnel costs (154 807) (43 288) (27 264) (7 050) (39 594) (1 846) 1 170 (272 679) Other operating expenses (11 036) (4 621) (7 165) (3 273) (11 024) (23 585) 5 503 (55 201) Total operating expenses (165 842) (47 909) (34 429) (10 323) (50 618) (25 431) 6 673 (327 879) EBITDA 13 288 11 462 10 739 (10 229) (6 628) (25 431) 0 (6 800) Depreciation, amortization and impairment (4 247) (1 324) (6 310) (1 432) (8 747) (20 910) 0 (42 970) EBIT 9 041 10 138 4 429 (11 661) (15 374) (46 341) 0 (49 770) Net financial items (8 765) 100 (516) (235) (2 478) 8 004 0 (3 890) Profit/(loss) before tax 276 10 238 3 913 (11 896) (17 853) (38 337) 0 (53 660) Gross margin % 80.2% 81.4% 51.5% 8.6% 88.8% na na 77.6% EBITDA % 5.9% 15.7% 12.2% (932.4%) (13.4%) na na (1.6%) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5252 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Disaggregation of revenue In the following table, revenue is disaggregated by primary service line, geography and recurrence. In presenting the geographic information, revenue has been based on the geographic location of legal entity. 2022 NOK thousand Consulting services Recurring Revenue One-time revenue Total Norway 140 157 149 666 15 472 305 295 Europe 129 395 27 911 5 819 163 126 Americas 28 902 6 917 728 36 548 Total revenue 298 454 184 495 22 019 504 969 2021 NOK thousand Consulting services Recurring Revenue One-time revenue Total Norway 131 872 126 924 14 877 273 672 Europe 92 742 14 345 4 211 111 297 Americas 23 355 4 313 1 301 28 968 Total revenue 247 969 145 581 20 388 413 938 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5353 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2022 NOK thousand Consulting services Recurring Revenue One-time revenue Total Business services 196 857 66 727 1 917 265 501 EA & BPM 59 512 23 995 5 402 88 909 Cloud 13 966 78 095 8 170 100 230 Hospitality 1 253 1 286 1 023 3 562 Marine 26 866 14 401 5 506 46 773 Corporate/Other 0 (8) 0 (8) Total revenue 298 454 184 495 22 019 504 968 2021 NOK thousand Consulting services Recurring Revenue One-time revenue Total Business services 156 481 50 613 2 569 209 663 EA & BPM 51 073 15 219 4 942 71 234 Cloud 10 376 64 393 7 887 82 656 Hospitality 0 192 905 1 097 Marine 30 039 15 164 4 086 49 289 Total revenue 247 969 145 581 20 388 413 938 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5454 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 6 Materials, software and services NOK thousand 2022 2021 Hired consultans (48 851) (29 889) Hardware for resale (7 738) (8 382) Software for resale (58 212) (45 539) Other (234) (9 049) Total materials, software and services (115 035) (92 859) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5555 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 7 Personnel NOK thousand 2022 2021 Salaries (256 568) (205 315) Social security tax (38 407) (40 413) Bonuses (6 878) (8 110) Pension costs defined contribution (Note 27) (19 337) (14 268) Other personnel cost (17 609) (4 573) Total salaries and personnel expense (338 800) (272 679) Average number of FTEs 2022 2021 Number os FTEs, start of year 374 171 Number os FTEs, end of year 353 374 Average number of FTEs 363 273 Gender split, end of year Male 233 262 Female 120 112 Number of FTEs, end of year, per country 2022 2021 Belgium 1 1 Cyprus 3 3 Denmark 1 1 France 2 1 Germany 3 5 Italy 35 65 Norway 204 200 Netherlands 1 0 Poland 7 13 Singapore 2 1 Spain 26 17 Sweden 22 22 United Kingdom 31 30 USA 15 15 Total number of FTEs 353 374 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5656 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 8 Key management The Group Management consists of the Group Directors. Group Directors are the CEO, COO, CFO, CP&OO director and CCO that are all employed by the parent company. The IT Director is employed by one of the subsidiaries. Compensation to the management during the year is detailed in the table to the right. Amounts presented are part of the remuneration for the Group management role. The Group CEO has a three-month notice period and is entitled to a severance pay for twelve months in case of termination initiated by the company. None of the Board members or the CEO have executive loans or guarantees in the company. Management remuneration 2022 NOK thousand Board remuneration Audit committee remuneration Salary Bonus Benefits in kind Pension cost Total remuneration Management Geir Johansen - CEO 0 0 2 700 0 11 90 2 800 Ole Jakob Kjølvik - COO 0 0 1 500 0 16 90 1 606 Bente Brocks - CFO (interim) 0 0 1 680 0 11 90 1 781 Erik Sundet - Group IT director (50% mgmt) 0 0 993 48 21 69 1 132 Pål Stueflotten - CCO (from May-22) 0 0 800 0 74 56 930 Solfrid Buø - Chief People & Organisation Officer (from Nov-22) 0 0 217 0 3 15 235 Grete Thomassen - HR director (to Apr-22) 0 0 400 0 4 28 432 Espen Karsrud - Group EVP Business Development (to Apr-22) 0 0 500 0 4 35 539 Management total 0 0 8 790 48 144 473 9 455 Members of the Board Martin Nes (Chairman) 279 20 0 0 0 0 300 Øystein S. Spetalen (Member) 217 0 0 0 0 0 217 Kristin Hellebust (Member) 217 18 0 0 0 0 234 Henrik Lie-Nielsen (Member) 217 18 0 0 0 0 234 Linn Katrine Høie (Member) (from May-22) 117 0 0 0 0 0 117 Yvonne Litsheim Sandvold (Member) (to May-22) 100 0 0 0 0 0 100 Members of the Board total 1 146 55 0 0 0 0 1 201 Total salaries and personnel expense 1 146 55 8 790 48 144 473 10 656 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5757 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Management remuneration 2021 NOK thousand Board remuneration Audit committee remuneration Salary Bonus Benefits in kind Pension cost Total remuneration Management Per Ronny Stav - CEO 0 0 3 235 0 13 89 3 338 Jhonny Sharma - COO 0 0 2 439 0 11 89 2 539 Geir Johansen - CFO 0 0 2 243 0 9 89 2 341 Grete Thomassen - HR director (from May 2021) 0 0 846 0 12 84 942 Ole Jakob Kjølvik - Strategy Director (from December 2021) 0 0 125 0 1 0 126 Espen Karsrud - Group EVP Business Development (from November 2021) 0 0 300 0 3 0 303 Else Thoresen - HR director (until March 2021) 0 0 438 0 3 22 463 Management total 0 0 9 627 0 51 374 10 052 Members of the Board Martin Nes (Chairman) 267 0 0 0 0 0 267 Øystein S. Spetalen (Member) 200 0 0 0 0 0 200 Kristin Hellebust (Member) 150 0 0 0 0 0 150 Henrik Lie-Nielsen (Member) 150 0 0 0 0 0 150 Yvonne Listheim Sandvold (Member) 200 0 0 0 0 0 200 Members of the Board total 967 0 0 0 0 0 967 Total salaries and personnel expense 967 0 9 627 0 51 374 11 019 The following remuneration has been made to the members of the nomination committee during the year: NOK thousand 2022 2021 Nomination committee Espen Lundaas (head) 40 0 Øystein Tvenge (member) 0 0 Total 40 0 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5858 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 9 Other operating expense NOK thousand 2022 2021 Marketing cost (4 385) (5 534) Rental and leasing cost 1 (8 750) (5 971) Travel cost (7 929) (5 223) Fees for external services (29 261) (21 537) IT and communication cost (19 829) (13 237) Loss on sale of intangible fixed assets (4 241) 0 Other operating cost 2 (10 846) (3 697) Total operating expenses (85 241) (55 201) 1 Includes common cost related to premises, such as electricity, cleaning, moving cost and contracts not material to IFRS16 2 Includes coursing, respresentation cost, mobile useage for emplyees, insurance premiums and other office expense NOK thousand 2022 2021 Specification of auditor’s fee Statutory audit (2 988) (1 107) Other assurance services (62) (749) Other non-assurance services (306) 0 Total (3 355) (1 857) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 5959 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 10 Property, plant and equipment 2022 NOK thousand Office equipment Fixtures and fittings Other Total Cost at 1 Jan 2022 18 819 3 572 1 239 23 631 Additions 788 1 147 29 1 964 Reclassifications (2 468) 267 757 (1 444) Sale (370) (14) (160) (545) Disposals (426) 0 (117) (543) Translation difference 442 56 89 587 Cost, end of period 16 785 5 028 1 837 23 650 Accumulated depreciation at 1 January 2022 (13 943) (1 463) (779) (16 185) Depreciation during the year (1 634) (701) (170) (2 505) Reclassifications 1 511 (143) (145) 1 224 Sale 294 5 132 431 Disposals 335 (0) 45 381 Translation difference (405) (30) (43) (478) Accumulated depreciation, end of period (13 842) (2 331) (959) (17 133) Carrying amount at 31 Dec 2022 2 942 2 697 877 6 517 Useful life 5-10 yrs 5 yrs 5 yrs Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6060 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 NOK thousand Office equipment Fixtures and fittings Other Total Cost at 1 January 2021 9 367 748 0 10 114 Additions 2 760 626 58 3 443 From business combinations 1 8 399 1 175 1 792 11 366 Reclassifications (1 573) 1 286 287 0 Disposals (331) (352) (905) (1 588) Translation difference 198 89 8 295 Cost, end of period 18 819 3 572 1 239 23 631 Accumulated depreciation at 1 January 2021 (6 707) (150) 0 (6 857) From business combinations 1 (7 086) (252) (1 253) (8 591) Depreciation during the year (1 510) (523) (186) (2 219) Reclassifications 953 (861) (92) 0 Disposals 302 352 768 1 422 Translation difference 105 (30) (15) 59 Accumulated depreciation, end of period (13 943) (1 463) (779) (16 185) Carrying amount at 31 Dec 2021 4 876 2 109 460 7 445 Useful life 5-10 yrs 5 yrs 5 yrs 1 Ref Note 18, Business combinations Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6161 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 11 Right-of-use assets and lease liabilities Right-of-use assets NOK thousand Buildings Vehicles Hardware Other Total Right-of-use assets per 1 Jan 2021 15 867 143 0 4 757 20 768 Addition of right-of-use assets 9 446 678 4 560 7 817 22 501 Depreciation in the period (6 833) (233) (1 421) (4 170) (12 656) Reclassification 0 (143) 0 143 0 Translation difference (331) (16) 0 0 (347) Right-of-use assets per 1 Jan 2022 18 149 430 3 139 8 548 30 266 Addition of right-of-use assets 18 336 0 37 9 836 28 209 Depreciation in the period (10 791) (345) (1 561) (4 518) (17 215) Reclassification between categories 6 631 1 191 (6 822) 0 Translation difference 447 3 9 0 459 Carrying amount of right-of-use assets, end of period 32 773 89 1 814 7 043 41 719 Remaining lease term 1-5 years 1-4 years 1-3 years 1-3 years Depreciation method Linear Linear Linear Linear Contracts not material to IFRS 16 are expensed in P&L as they occur. See Note 2.14 for more information of contracts classified as leasing contracts. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6262 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Lease liabilities NOK thousand 31 Dec 2022 Undiscounted lease liabilities and maturity of cash outflow < 1 year 17 782 1-2 years 12 435 2-3 years 8 306 3-4 years 4 811 4-5 years 1 566 > 5 years 621 Total undiscounted lease liabilities, end of period 45 521 Discount element (2 028) Total discounted lease liabilities, end of period 43 492 NOK thousand 2022 2021 Total lease liabilities, end of period 43 492 31 494 The interest rate used for discounting the lease liability is based on the same as according to the terms of interest rate from the Group’s external financing. See Note 13 for interest expense related to leasing contracts. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6363 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 12 Intangible assets 2022 NOK thousand Goodwill Customer relations Other intangible assets; Custom software Other intangible assets; Technical software Other intangible assets; Licenses Total Cost at 1 Jan 2022 205 279 57 526 29 975 54 353 4 979 352 112 Additions 0 0 887 0 1 240 2 127 Additions - internally developed 0 0 11 755 0 0 11 755 Less government grants 0 0 (1 006) 0 0 (1 006) Reclassifications 1 0 (691) 44 003 (32 619) 1 551 12 244 Sale of asset (910) 0 0 (9 202) 0 (10 113) Disposals 0 0 (35 302) 0 0 (35 302) Translation difference 213 (36) 1 570 1 122 (17) 2 852 Cost, end of period 204 581 56 799 51 883 13 654 7 752 334 669 Accumulated amortizations at 1 Jan 2022 0 (11 495) (10 093) (13 523) (643) (35 755) Amortization 0 (11 360) (13 962) (3 887) (1 689) (30 898) Impairment 0 0 (5 606) 0 0 (5 606) Reclassifications 1 0 691 (19 283) 7 614 (1 054) (12 032) Sale of asset 0 0 0 3 527 0 3 527 Disposals 0 0 28 408 0 0 28 408 Translation difference 0 2 (754) (416) 6 (1 163) Accumulated amortization and impairment, end of period 0 (22 162) (21 290) (6 684) (3 381) (53 517) Carrying amount at 31 Dec 2022 204 581 34 637 30 593 6 969 4 372 281 152 Useful life Infinite 5 yrs 5–10 yrs 5 yrs 3–10 yrs 1 Reclassifications made between categories Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6464 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 The development expenditures that do not meet the criteria for capitalization are recognized as salary and personnel expenses and other operating expenses in profit and loss. The Group has received government grants related to development of software of NOK 1.0m (NOK 1.4m). The grants have been subtracted from the carrying amount of internally generated software. Impairment of custom software of NOK 5.6m and relates to: Restructuring of different IP in Marine Italy of 3.4m, impairment of excessed value in connection with the closing of business in Germany of NOK 0.9m, Closing of product lines like Certify in Hospitality NOK 0.8m and other add-on products of NOK 0.5m. In December, BA Marine divested certain software IP and associated assets together with twelve employees. The effect from the sale and the de-recognition of the assets ended with a loss from sale of NOK 4m and positive cash flow of NOK 9.3m. The effect is presented in Other operating cost in statement of Profit and Loss. Referring to PPA (Purchase Price Allocation) from business combina- tion Note 17. For Impairment testing on Goodwill, see Note 16. 2021 NOK thousand Goodwill Customer relations Other intangible assets; Custom software Other intangible assets; Technical software Other intangible assets; Licenses Total Cost at 1 Jan 2021 93 827 15 529 12 568 1 000 10 018 132 942 Adjustment of opening balance 0 700 (700) 0 0 0 Additions 0 0 826 153 4 876 5 855 Additions - internally developed 0 0 10 316 9 390 0 19 706 From business combinations 1 111 282 40 972 1 116 42 167 0 195 537 Reclassifications 0 0 6 613 3 773 (10 386) 0 Less government grants 0 0 (725) (713) 0 (1 438) Translation difference 170 325 (39) (1 416) 470 (489) Cost, end of period 205 279 57 526 29 975 54 353 4 979 352 112 Accumulated amortizations at 1 Jan 2021 0 (3 084) (1 807) (667) (2 102) (7 660) Amortization 0 (8 411) (3 091) (11 335) (1 898) (24 735) Reclassifications 0 0 (1 836) (1 521) 3 357 0 Impairment 0 0 (3 359) 0 0 (3 359) Accumulated amortization and impairment, end of period 0 (11 495) (10 093) (13 523) (643) (35 755) Carrying amount at 31 Dec 2021 205 279 46 031 19 882 40 830 4 336 316 358 Useful life Infinite 5 yrs 5–10 yrs 5 yrs 3–10 yrs 1 Ref Note 8, Business combinations Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6565 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 13 Financial items Finance income NOK thousand 2022 2021 Interest income 291 259 Realized foreign exchange gains 2 153 2 193 Net unrealized foreign exchange gains 1 522 0 Other financial income 1 225 146 Total financial income 5 191 2 598 Finance expenses NOK thousand 2022 2021 Interest on debts and borrowings (697) (1 872) Interest expense on lease liabilities (1 236) (1 079) Realized foreign exchange losses (1 998) (1 821) Net unrealized foreign exchange losses 0 (979) Other financial expenses (1 350) (736) Total financial expenses (5 280) (6 487) Net financial items (89) (3 890) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6666 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 14 Tax Income tax expense NOK thousand 2022 2021 Current tax Current Income Tax - Norway 889 1 741 Current Income Tax - Other countries 1 539 398 Correction previous year - other countries 968 0 Deferred tax Change in deferred taxes - Norway (7 653) (6 963) Change in deferred taxes - Other countries (2 778) 23 Tax expense (+) / income (-) (7 035) (4 802) A reconciliation of the effective tax rate Profit/(loss) before tax (90 428) (53 660) Adjustment of current income tax of previous years (50) 61 Changes in unrecognized deferred tax asset (if applicable) 66 974 41 875 Temporary differences 690 2 417 Non deductible expenses 37 375 (2 906) Non-taxable income (916) 4 279 Tax base 13 643 (7 933) Income taxes calculated at the Conpany's domestic tax rate (22%) 3 002 (1 745) Tax previous year 968 19 Changes in recognized deferred taxes (10 431) (6 940) Different tax rates applied in foreign jurisdictions (573) 3 865 Tax expense (+) / income (-) at effective tax rate (7 035) (4 802) NOK thousand 2022 2021 Effective tax rate 7.8% 8.9% Tax rate Norway 22.0% 22.0% Deferred taxes Property, plant and equipment 4 544 2 689 Receivable 91 (35) Tax losses carried forward 9 256 5 824 Other provisions 0 (2 675) Leases 110 0 Intangible assets (11 413) 0 Deferred tax on intangible assets from business combinations (857) (13 375) Deferred taxes, net 1 732 (7 572) Deferred taxes, capitalized 1 732 (7 572) Deferred taxes, not capitalized 30 260 19 755 Reconciliation to balance sheet Deferred tax assets 12 322 9 511 Deferred tax liabilities (10 590) (17 084) Net Deferred tax assets (liabilities) 1 732 (7 572) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6767 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 15 Earnings per share Basic earnings per share (EPS) are calculated by dividing the profit attributable to equity holders of the Company by the weighted average number of ordinary shares in Issue during the year according to the following number of outstanding shares. Issued shares and share capital Number of shares Share Capital (NOK) 1 January 2022 584 903 064 163 772 858 Capital issue, April 100 000 000 28 000 000 Share issue, repair offer, July 3 625 153 1 015 043 Capital issue in relation to acq. of Integra, Nov 2 045 000 572 600 31 December 2022 690 573 217 193 360 501 Diluted EPS amounts are calculated by dividing the profit attributable to ordinary equity holders of the Company by weighted average number of ordinary shares outstanding during the year plus the weighted average number of ordinary shares that would be Issued on conversion of all the dilutive potential ordinary shares into ordinary shares. The following reflects the Income and share data used in the basic and diluted EPS calculations: NOK 2022 2021 Net profit/(loss) to equity holders (83 393 192) (48 857 904) Total (83 393 192) (48 857 904) Number of shares (in thousands) Weighted average number of ordinary shares 658 988 513 489 277 730 Effects of dilution, weighted average 5 663 984 91 776 213 Weighted average number of shares, adjusted for effects of dilution 664 652 497 581 053 943 Basic earnings per share (0.13) (0.10) Diluted earnings per share 1 (0.13) (0.10) 1 If Net loss, EPS per Basic and Diliuted share will be equal In 2021, the remaining obligation for share consideration for Qualisoft AS and Maksit was issued, only the weighted dilution persisted. These are all settled at end of 2022. In 2022, only parts of the original share consideration is included as dilution. Parts of the share consideration for Integra is still outstanding. This is to be settled during 2023. Effects of dilution NOK 2022 2021 Redemption shares to minority shareholdes of Arribatec AS 0 85 130 804 Share consideration outstanding Qualisoft 0 2 876 712 Share consideration outstanding Maksit 0 2 465 753 Share consideration outstanding Integra 5 663 984 1 302 943 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6868 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 16 Goodwill and impairment Goodwill and intangible assets stated in the consolidated financial position are mainly derived from excess value following the acqui- sitions of Instidata AS in 2019, Facil AS, Microsky AS and Innit AS in 2020 and Maksit AS, Qualisoft AS, IB Group and Integra Ass. Ltd in 2021. Recognized goodwill amounts to NOK 204.6m as of 31 December 2022 (NOK 205.3m). Other intangible assets related to excess values in the Group accounts are customer relations and soft- ware, with a carrying amount of NOK 45.3 million as per 31 December 2022 (NOK 62.3m). Only goodwill has an indefinite lifetime, all other intangible assets are amortized, ref Note 12. Goodwill is tested for impairment for each cash generating unit (CGU) prior to preparation of the annual accounts. The test is performed annually, and when there are indications of impairment. There were no impairment indications in the impairment test 2022 where recoverable amounts exceeded the balance sheet amounts, thus no impairment has been done in 2022. The recoverable amount for each CGU has been determined esti- mating their Value in Use (VIU) and comparing that to the carrying amount of the specific CGU. The calculation of VIU has been based on mstimate, reflecting the Grou’’s financial planning process. The discount rates are derived as the weighted average cost of capital (WACC) for a similar business in the same business environment. Goodwill has been allocated for impairment testing purposes to the CGUs below. NOK thousand Cloud BizS Marine Hospitality EA&BPM Total Norway 56 622 35 585 0 24 416 66 361 182 984 UK 0 17 398 0 0 0 17 398 Italy 0 0 4 199 0 0 4 199 Total 56 622 52 983 4 199 24 416 66 361 204 581 Cash flow projections and assumptions A five-year forecast of discounted cash flows plus a 2.0% terminal value growth rate was used to determine net present value of the CGU. Discounted cash flows were calculated after tax and applying a WACC after tax. Estimated cash flow covering the period 2023-2027 consists of estimates for 2023 and beyond. Key assumptions for the value in use calculations The basis for the projection of the future cash flows estimated is based on the financial budget of one year, approved by the Board of Directors. The budget in combination with the forecasts represent management’s best estimate of the range of economic conditions that will exist over the remaining useful life of the asset. The remaining four years of the forecast period are estimated based on budget and projected performance. The calculation of VIU for the CGU is most of all sensitive when it comes to the following assumptions: Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 6969 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Discount rate The input data for the WACC is gathered from external sources. 2022 2021 Norway UK Italy All Risk free interest rate 3.1% 3.3% 4.2% 3% Debt risk premium 6.6% 6.6% 6.6% 3% Equity risk premium 5.9% 5.9% 5.9% 4% Equity Beta 1.37 1.37 1.37 1.61 Cost of equity 11.2% 11.2% 11.2% 9.4% Tax rate 22% 19% 29% 22% After tax cost debt 7.6% 7.7% 8.0% 4.7% Equity weight 90% 90% 90% 90% WACC (pre tax) 13.8% 14.0% 16.6% 9.0% The average growth rate and EBITDA margin assumptions are based on historical experience and performance as well as market analysis used for budget 2023 and estimates from 2024-2026 and a terminal growth rate of 2%. The average growth rates in the period for each CGU is: Cloud BizS Marine 1 Hospitality 2 EA&BPM Average revenue growth 16% 9% 0% 196% 16% Average EBITDA margin 7% 15% 18% 41% 19% 1 The restructuring and sales of IP in the Marine CGU from 2022 to 2023 effect the average growth rates 2 CGU Hospitality will until Q2 2023 go from a start up to become a mature profit making unit, thus impact on the growth rates seems unnatural Sensitivity At December 31, 2022, the Group’s value in use for each CGU was significantly higher than the carrying amount of tested goodwill and intangible assets with indefinite useful lives. The calculation is most sensitive to changes in EBITDA and gross profit (GP) margins. No reasonably likely change in the key assumptions listed above would cause the carrying value to materially exceed the recoverable amount for any of the CGUs. The headroom varies between 22% and 500% in the different CGUs. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7070 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 17 Business combinations During 2022, Arribatec did not acquire any shares in companies. During 2021, Arribatec acquired shares in the companies mentioned below and consequently controls the subsidiaries from the date of acquisition. In the purchase price allocations (PPA), the assets and liabilities of the companies have been measured at the estimated fair value on the acquisition date. The purchase price allocation identified fair value adjustments on Intangible assets like customer relations and software and deferred tax liabilities/assets. The residual value of the purchase price alloca- tion is allocated to goodwill. Arribatec acquired five companies during 2021 within IT and operation technology. The acquisitions are carried out in line with Arribatec’s strategy. The labor force and “going concern’’ elements are the main part of the acquired excess value and has been allocated to goodwill in accord- ance with IFRS 3. Goodwill in relation to the acquisition is related to different CGU’s as according to Note 16. The final PPAs (Purchase price allocation) are shown below. 2021 NOK thousand Maksit Qualisoft IB Group Infoship Integra Date of acquisition 18 Feb 2021 23 Feb 2021 20 Jan 2021 01 Apr 2021 11 Oct 2021 Acquired part of Company 100% 100% 100% 100% 100% Purchase price 35 987 85 605 20 830 258 36 268 whereof Cash consideration 25 787 54 855 20 830 258 16 569 whereof Share consideration 10 200 30 750 0 0 2 863 An earn-out component is included in the purchase price amounting to: 0 0 0 0 16 836 Fair value of assets and liabilities on acquisition ASSETS Non-current assets Property, plant and equipment 101 457 1 114 142 940 Goodwill 22 541 66 361 5 025 9 17 091 Customer Relationship 9 234 15 128 0 0 16 610 Software 0 0 43 282 143 0 Other intangible fixed assets 0 0 22 034 0 0 Deferred tax assets 0 0 71 0 0 Other long term assets 0 0 0 0 0 Total non-current assets 31 876 81 946 71 527 294 34 640 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7171 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 NOK thousand Maksit Qualisoft IB Group Infoship Integra Current assets Trade receivables 3 675 21 856 3 060 240 7 648 Other current assets 263 7 218 1 202 31 462 Contract assets (earned, not invoiced) 0 656 748 0 930 Cash & cash equivalents 7 331 10 937 2 446 1 253 7 890 Total current assets 11 269 40 667 7 457 1 524 16 930 Total Assets 43 145 122 613 78 985 1 817 51 570 Non-current liabilities Long term interest bearing debt 0 0 16 227 0 0 Deferred tax liabilities 2 032 3 328 7 127 0 3 126 Other long-term liabilities & provisions 0 0 14 472 1 549 1 101 Total non-current liabilities 2 032 3 328 37 825 1 549 4 228 Current liabilities Trade payables 613 1 871 6 287 0 1 747 Tax liabilities 520 0 0 0 (443) Current Contract liabilities (deferred revenue) 0 10 942 737 0 0 Other short term liabilities 3 621 20 867 13 306 10 9 771 Accrued expenses and prepaid income 372 0 0 0 0 Total current liabilities 5 126 33 680 20 330 10 11 075 Total Net assets 35 987 85 605 20 830 258 36 268 Info Net Sales full year Merged 78 309 45 167 2 280 46 556 Profit /Loss full year Merged 7 964 (17 838) (2 147) (2 870) Net Sales full year (Arribatec ownership period) Merged 72 967 45 167 2 280 13 053 Profit /Loss full year (Arribatec ownership period) Merged 7 309 (17 838) (2 147) (133) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7272 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 18 Investment in subsidiaries NOK thousand Subsidiary Ownership Year of acquisition/ foundation Profit after tax 2022 Total Equity 31.12.2022 Profit after tax 2021 Total Equity 31.12.2021 Arribatec Group ASA 100% 2015 (43 009) 338 909 (16 200) 331 154 Arribatec Norge AS 1 100% 2017 (611) 6 696 823 8 628 Arribatec Hospitality AS 100% 2019 (10 130) 5 498 (7 724) 8 156 Arribatec Cloud AS 2 100% 2020 3 839 9 686 940 5 954 Innit Utvikling AS 1 100% 2020 na na 1 298 2 253 Microsky AS 2 100% 2020 na na 613 1 850 Arribatec EA & BPM AS 100% 2021 1 889 2 292 7 309 5 776 Arribatec Sverige AB 100% 2016 (1 948) 480 (4 453) 669 Arribatec Denmark ApS 100% 2015 415 1 781 447 1 301 Arribatec Innovation Sp. z o.o. 100% 2018 672 1 108 636 439 Arribatec Belgium NV 100% 2018 769 2 444 547 1 535 Arribatec Italy S.r.l. 100% 2018 (637) 14 867 (406) 15 476 Arribatec Iberia SL 100% 2017 (874) 4 115 2 289 4 374 Arribatec Americas Inc 100% 2018 2 732 10 552 2 899 7 015 Arribatec Hospitality LLC 100% 2018 (1 037) (2 214) (922) (1 024) IB S.r.l. 100% 2021 (20 602) (28 639) (18 876) (4 774) IB Digital Ship S.r.l. 3 100% 2021 na na 23 241 IB Cyprus LTD 100% 2021 59 4 350 160 4 057 IB USA Inc 100% 2021 1 239 270 855 (1 060) Arribatec Solutions UK LTD 100% 2018 (712) (2 593) (1 757) (1 893) Integra Associates Ltd. 100% 2021 (590) 5 848 (134) 6 619 Infoship GmbH 100% 2021 (1 928) (3 966) (2 147) (1 870) Arribatec France Sarl 100% 2021 (7) (0) (188) (87) Arribatec Solutions Trading Ltd 100% 2021 (1 956) (2 869) (358) (363) All entities listed are included in the consolidated financial statements of Arribatec Group ASA. During 2022, Innit Utvikling AS was merged into Arribatec Norge AS, Microsky AS was merged into Arribatec Cloud AS and IB Digital Ship S.r.l. was merged into IB S.r.l. Arribatec Group ASA are holding direct ownership of most entities. Arribatec Americas INC and Arribatec Americas LLC are both subsid- iaries of Arribatec Denmark Aps. The IB Group is owned by Arribatec Italy S.r.l. 1 Innit Utvikliing AS was merged into Arribatec Norge AS in 2022 2 Microsky AS was merged into Arribatec Cloud AS in 2022 3 IB Digital Ship S.r.l. was merged into IB S.r.l in 2022 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7373 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 19 Other non-current assets NOK thousand 2022 2021 Investment in shares 60 60 Bond notes in Italy 0 9 836 Deposits 5 263 664 Other 0 118 Total other non-current assets 5 323 10 678 Note 20 Account receivable NOK thousand Current 0-30 days 31-60 days 61-90 days 90+days Total whereof estimated credit losses Ageing, Accounts receivable 2022 60 600 17 022 5 200 2 984 2 409 88 214 (2 994) 2021 49 285 23 200 5 819 7 004 3 366 88 674 (570) Provision for Expected Credit Losses (ECL) are included with NOK 3.0m (NOK 570k). The provision is based on a valuation per subsidiary at year end based on general assumptions as well as agreements with customers and payments made in next year. Accounts receivables are non-interest bearing. See Note 2 for a description of allowance for expected credit losses. Note 3 provides a description of the Group’s credit risk management. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7474 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 21 Financial instruments Set out below is a comparison by class of carrying amounts and fair values of all financial instruments that are carried in the financial statements. The financial assets principally consist of cash and cash equivalents obtained through the operating business. The financial liabilities principally consist of trade and other payables arising directly from its operations. The fair value of the financial assets and liabilities are included at the amount at which the instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. The Group uses the following hierarchy for determining and disclosing the fair value of financial instruments by valuation technique: Level 1: The fair value of financial instruments traded in active markets is based on quoted market prices Level 2: The fair value of financial instruments that are not traded in an active market is determined using valuation techniques which maximize the use of observable market price and rely as little as possible on entity-specific estimates. If all significant Inputs require to fair value an Instrument are observable. Level 3: techniques that use inputs that have a significant effect on the recorded fair value that are not based on observable market data. Carrying amount Fair value NOK thousand Amortized cost Fair value through profit and loss Total Level 1 Level 2 Level 3 Total 31 Dec 2022 Financial assets Investment in shares 1 0 60 60 0 0 60 60 Accounts receivable 88 214 0 88 214 0 0 88 214 88 214 Deposits related to premises 5 263 0 5 263 5 263 5 263 Other receivables 1 128 0 1 128 0 0 1 128 1 128 Total financial assets 94 605 60 94 665 0 0 94 665 94 665 Financial liabilities Non-current lease liabilities 26 727 0 26 727 0 0 26 727 26 727 Other non-current financial liabilities 967 0 967 0 0 967 967 Current lease liabilities 16 765 0 16 765 0 0 16 765 16 765 Accounts payable 31 879 0 31 879 0 0 31 879 31 879 Contract liabilities 16 476 0 16 476 0 0 16 476 16 476 Current tax payable 650 0 650 0 0 650 650 Other current liabilities 83 969 0 83 969 0 0 83 969 83 969 Interest bearing loan 31 211 0 31 211 0 0 31 211 31 211 Total financial liabilities 192 167 0 192 167 0 0 192 167 192 167 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7575 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Carrying amount Fair value NOK thousand Amortized cost Fair value through profit and loss Total Level 1 Level 2 Level 3 Total 31 Dec 2021 Financial assets Investment in shares 1 0 60 60 0 0 60 60 Accounts receivable and other receivables 90 964 0 90 964 0 0 90 964 90 964 Total financial assets 90 964 60 91 024 0 0 91 024 91 024 Financial liabilities Accounts payable and other payables 2 166 643 0 166 643 0 0 166 643 166 643 Interest bearing loan 37 425 0 37 425 0 0 37 425 37 425 Total financial liabilities 204 067 0 204 067 0 0 204 067 204 067 1 Investment in shares is classified as Other non-current assets 2 Consists of lease liabilites, other non-current financial liabilities, accounts payable, contract liabilities, current tax payable and other current liabilities Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7676 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 22 Other receivables and other current assets NOK thousand 2022 2021 Government receivables 4 317 4 189 Prepaid cost 13 648 9 689 Other current assets 1 647 8 732 Total other non-current assets 19 612 22 610 Note 23 Contract assets and liabilities Contract assets Contract assets are recognized for performance obligations satisfied over time, mainly from installation services and projects where progress is measured over time. When the consideration becomes uncondi- tional the contract assets are reclassified to accounts receivables, which attributes the main changes to the contract assets in the periods. Contract assets will typical insure in Solassa/Saas project were the customer pays a fixed annual or monthly fee over 3-5 years and this also includes payment for the implementation and integration services. In such cases revenue are recognized at the time were performance obligations are meet and registered as a contract assets. A reclassification is done when the customer is invoiced, ref Note 2.6. NOK thousand 2022 2021 As of 1 January 19 549 12 387 Performance obligations met 36 572 20 676 Reclassified to receivables (40 272) (16 006) From business combinations 0 2 335 Translation difference 427 157 Total contract assets 16 276 19 549 It is expected that 72% of the above contract assets will be reversed in 2023, 20% in 2024 followed by 6% in 2025 and the remaining 2% in 2026. The expected credit losses on Contracts assets are considered immaterial as the contracts are mainly with governmental parties and therefore secured. Contracts are subject to valuation of credit losses in same way as Accounts receivable. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7777 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Contract liabilities Contract liabilities relates to consideration received in advance of performance under revenue contracts with customers. Revenue is recognized as (or when) the Group fulfils its performance obligation(s) under the contracts. Contract liabilities are presented in the table below: NOK thousand 2022 2021 As of 1 January 21 483 1 283 Deferred revenue 68 627 38 779 Recognized as revenue in P&L (73 811) (30 256) From business combinations 0 11 679 Translation difference 177 (2) Total contract liabilities 16 476 21 483 Contract liabilities are mainly invoiced to customers in advance and relating to 2023. All liabilities per 1 January was recognized as revenue in P&L during the year. Note 24 Inventory NOK thousand 2022 2021 Hardware for resale 900 324 Licenses for resale 2 877 2 855 Total other non-current assets 3 777 3 179 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7878 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 25 Cash NOK thousand 2022 2021 Cash, free 26 956 31 948 Cash, restricted 13 492 11 810 Total cash and cash equivalents 40 449 43 758 Note 26 Shares Issued shares and share capital Number of shares Share Capital (NOK) 1 January 2020 16 077 403 16 077 403 Capital issue, Jan 7 164 688 7 164 688 Capital issue, Mar 41 666 666 41 666 666 Capital issue, Mar 25 000 000 25 000 000 Capital decrease, Nov (64 734 305) New shares, Oct 235 819 574 66 029 481 Share issue, repair offer, Nov 32 855 000 9 199 400 Share issue, employee offer, Nov 10 000 000 2 800 000 Share issue, private placement, Dec 50 000 000 14 000 000 1 January 2021 418 583 331 117 203 333 Capital issue in relation to acq. of Facil, Jan 12 423 200 3 478 496 Capital issue in relation to acq. of Microsky, Feb 3 499 998 979 999 Capital issue in relation to acq. of Innit, Mar 5 606 400 1 569 792 Capital issue in relation to acq. of Qualisoft, May 15 000 000 4 200 000 Capital issue in relation to acq. of Maksit, Aug 5 000 000 1 400 000 Capital issue in relation to merger with Arribatec AS, Sep 124 790 135 34 941 238 31 December 2021 584 903 064 163 772 858 Capital issue, April 100 000 000 28 000 000 Share issue, repair offer, July 3 625 153 1 015 043 Capital issue in relation to acq. of Integra, Nov 2 045 000 572 600 31 December 2022 690 573 217 193 360 501 Each share has the same rights and has a par value of NOK 0.28. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 7979 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 20 largest shareholders at 31 Dec 2022 Holding Stake FERNCLIFF LISTED DAI AS 166 554 032 24.1% ARRIBA INVEST AS 53 200 000 7.7% DALLAS ASSET MANAGEMENT AS 24 598 694 3.6% JOAR AARENES 24 111 850 3.5% TORSTEIN INGVALD TVENGE 21 000 000 3.0% NORDNET BANK AB 18 656 529 2.7% SRK CONSULTING AS 17 809 464 2.6% ERIK SKAAR OPDAL 16 952 000 2.5% TRUDE HALVORSEN 10 797 884 1.6% HANEKAMB INVEST AS 10 553 463 1.5% DATUM AS 8 542 908 1.2% MIDDELBOE AS 7 011 150 1.0% NORSK REGNESENTRAL 6 770 735 1.0% DANSKE BANK A/S 6 128 767 0.9% LARS HUGO BRAADLAND OLSEN 5 748 500 0.8% LCS AS 5 518 001 0.8% JAN ARNE CHRISTENSEN 5 156 750 0.7% NORDNET LIVSFORSIKRING AS 5 152 005 0.7% VALSET INVEST AS 4 500 000 0.7% FAISAL BAIG 4 207 000 0.6% Total 20 largest shareholders 422 969 732 61.2% Other shareholders 267 603 485 38.8% Total 690 573 217 100.0% Shares held by related parties Holding Stake FERNCLIFF LISTED DAI AS 166 554 032 24.1% Related to Øystein S. Spetalen, Member of the Board in Arribatec Group ASA HANEKAMB INVEST AS 10 553 463 1.5% Related to Martin Nes, Chairman of the Board in Arribatec Group ASA FINANCE RESOURCES GJ AS 3 606 084 0.5% Related to Geir Johansen, CEO of Arribatec Group ASA REAKTOR RETURNS AS 1 738 830 0.3% Related to Henrik Lie-Nielsen, Member of the Board in Arribatec Group ASA KJØLVIK INVEST AS 583 334 0.1% Related to Ole-Jakob Kjølvik, COO of Arribatec Group ASA SICUBI AS 240 712 0.0% Related to Bente Brocks, CFO (interim) of Arribatec Group ASA HELLEBUST, KRISTIN 227 272 0.0% Related to Kristin Hellebust, Member of the Board in Arribatec Group ASA Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8080 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 27 Interest bearing loans NOK thousand Debt financial institutions Type Currency Facility limit Interest rate Year of maturity 31 Dec 2022 31 Dec 2021 Danske Bank Revolving credit facility NOK 20 000 NIBOR+2.75% 2023 6 750 0 DNB Revolving credit facility NOK 7 000 6.15% 2022 0 5 710 DNB Unsecured bank loan NOK 4.65% 2023 0 185 DLL Leasing & finance company NOK 4.5% 2024 244 493 The Norwegian Research Council Governmental NOK 3.35% 2022 0 188 Bank Intesa, Italy Unsecured bank facilities EUR EURIBOR+1.95%-2.40% 2027 8 411 9 824 Bank Progetto, Italy Unsecured bank loan EUR EURIBOR+5% 2025 5 759 7 236 Bank Carige, Italy Unsecured bank loan EUR 1.3% 2027 6 863 7 478 Bank Passadore, Italy Unsecured bank loan EUR EURIBOR+1.5% 2028 3 154 2 991 Italian banks, ref above Revolving credit facility EUR 1.0-4.75% 2023 29 3 320 Total 31 211 37 425 Credit facilities Other borrowings Total Balance at 1 Jan 2022 9 030 28 394 37 425 Proceeds from loans and borrowings 4 067 0 4 067 Repayment of loans and borrowings (6 499) (5 464) (11 963) Total changes in financial cashflow (2 432) (5 464) (7 896) Translation difference 181 1 501 1 682 Total Borrowings at end of period 6 779 24 431 31 211 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8181 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 28 Pensions Arribatec group meets the different local mandatory occupational pension requirement. Arribatec operates defined contribution retirement benefit plans for all qualifying employees of its subsidiaries in Norway, Sweden and Denmark. The only obligation of the group with respect to retirement benefit plan is to make the specified contributions. The employees of other subsidiaries are member of a state managed retirement benefit plan operated by the government. The subsidiaries are required to contribute a specified percentage of payroll costs to the retirement benefit scheme to fund the benefits. Note 29 Provisions NOK thousand 2022 2021 Severance indemnity funds in Italy 10 364 9 586 Non-current part of Integra earn-out estimate 0 9 541 Other provisions 3 838 3 661 Total provision 14 202 22 789 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8282 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 30 Other current liabilities NOK thousand 2022 2021 Employer tax and employee withholding tax 22 700 16 172 Accrued holiday payments and bonuses 31 987 31 337 VAT liabilities 10 121 6 748 Severance payments 0 3 069 Remaining part of acq.price, Integra 8 569 10 786 Other short term liabilities 10 591 14 768 Total other current liabilities 83 969 82 880 Note 31 Transactions with related parties No transactions with related parties during 2022. During 2021, the following transactions were approved by the General meeting in Arribatec Group ASA 20 November in 2020. Ferncliff is a related party to Tycoon Industrier AS, related to Øystein S. Spetalen, Member of the Board in Arribatec Group ASA. NOK thousand 2022 2021 Transactions with related parties Ferncliff AS - Fee for CEO and CFO for hire 0 562 Total Related parties transactions 0 562 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8383 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 32 Pledged assets The Group have no pledged assets. Note 33 Subsequent events Subsequent to 31 December 2022, the following highlights has occurred: 1 February, Arribatec announced a proposal of a reverse share split of the Company’s shares in the ratio of 10:1 to meet Oslo Børs’ requirements of a minimum share value of NOK 1 per share. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8484 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | The GroupFinancial statements | The Group 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Parent company financial statements Income statement of Arribatec Group ASA 86 Balance sheet of Arribatec Group ASA 87 Balance sheet of Arribatec Group ASA 88 Statement of cash flow of Arribatec Group ASA 89 Notes to the financial statement 90 Note 1 Accounting principles 90 1.1 Basis for preparation of the company accounts 90 1.2 Currency 90 1.3 Revenue 90 1.4 Expenses 90 1.5 Defined contribution pension schemes 90 1.6 Classification of assets and liabilities 90 1.7 Tangible fixed assets 90 1.8 Other intangible assets 90 1.9 Shares in subsidiaries 90 1.10 Receivables 91 1.11 Taxes 91 1.12 Leasing agreements 91 1.13 Use of estimates 91 1.14 Contingencies and events after the Balance Sheet date 91 1.15 Cash Flow Statement 91 Note 2 Employee compensation 92 Note 3 Other operating expenses 92 Note 4 Other financial income 93 Note 5 Other financial expence 93 Note 6 Tax 94 Note 7 Property, plant and equipment 94 Note 8 Other intangible assets 95 Note 9 Shares in subsidiaries 95 Note 10 Cash and short-term deposits 96 Note 11 Share capital and shareholder information 96 Note 12 Equity 97 Note 13 Events after the balance sheet date 97 Arribatec Group ASA | Annual report 2022 85 Go back Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Financial statementsFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Income statement of Arribatec Group ASA NOK thousand Note 2022 2021 Operating income and operating expenses Sales revenue 0 9 115 Other income 4 360 (2 022) Total income 4 360 7 093 Raw materials and consumables used (21 154) (14 031) Employee benefits expense 2 (16 567) (1 490) Depreciations, amortization and impairment of tangible and intanglible fixed assets 7, 8 (5 253) (12 472) Other expenses 3 (3 449) (15 522) Total expenses (46 424) (43 516) Operating profit/loss (42 063) (36 423) Financial income and expenses Other interest income 1 416 942 Other financial income 4 1 687 15 848 Other interest expenses (1 197) (178) Other financial expenses 5 (2 335) (2 428) Net financial items (430) 14 186 Result before tax (42 493) (22 237) Tax expense 6 767 6 037 Result for the year 12 (41 726) (16 200) Allocation of result for the year Other equity (41 726) (16 200) Total brought forward (41 726) (16 200) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8686 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Balance sheet of Arribatec Group ASA NOK thousand Note 2022 2021 ASSETS Non-current assets Intangible assets Licences, patents etc. 8 6 005 15 006 Deferred tax assets 6 9 272 8 505 Total intangible assets 15 277 23 511 Property, plant and equipment Equipment, fixtures and fittings and other movables 1 010 1 773 Total property, plant and equipment 7 1 010 1 773 Non-current financial assets Investments in other group companies 9 309 969 303 817 Loan to group companies 9 30 413 27 322 Other long-term receivables 9 3 386 0 Total non-current financial assets 343 767 331 139 Total non-current assets 360 055 356 423 NOK thousand Note 2022 2021 Current assets Inventories Inventories 2 877 0 Total Inventories 2 877 0 Receivables Accounts receivables 70 127 Accounts receivables from group companies 36 670 24 365 Other short-term receivables 1 422 4 601 Receivables from group companies 12 349 26 987 Total receivables 50 511 56 079 Bank deposits, cash and cash equivalents Bank deposits, cash and cash equivalents 10 3 469 6 391 Total bank deposits, cash and cash equivalents 3 469 6 391 Total current assets 56 856 62 470 Total assets 416 911 418 893 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8787 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Balance sheet of Arribatec Group ASA NOK thousand Note 2022 2021 EQUITY AND LIABILITIES Equity Paid in equity Share capital 11 193 361 163 773 Other paid in capital 215 645 582 605 Total paid-in equity 409 005 746 378 Retained earnings Other equity (68 173) (415 224) Total retained earnings (68 173) (415 224) Total equity 12 340 832 331 155 NOK thousand Note 2022 2021 Liabilities Other non-current liabilities Liabilities to group companies 16 669 18 425 Total non-current liabilities 16 669 18 425 Current liabilities Liabilities to financial institutions 32 314 0 Trade payables 6 127 43 488 Public duties payable 1 722 (4 102) Liabilities to group companies 2 2 325 Other current liabilities 19 245 27 603 Total current liabilities 59 410 69 314 Total liabilities 76 079 87 739 Total equity and liabilities 416 911 418 893 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8888 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Statement of cash flow of Arribatec Group ASA For the year ended 31 December NOK thousand Note 2022 2021 Operating activities Profit/(Loss) before tax (42 493) (22 237) Adjustments for: - (Increase)/decrease in accounts receivable 5 569 (3 768) - (Decrease)/Increase in accounts payable (37 361) (12 632) - Depreciation, amortization and impairment 5 253 12 472 Change in other current assets/ liabilities (17 475) (168 356) Net cash flows operating activities (86 507) (194 521) Investing activities Cash received through business combination 0 1 339 Cash consideration investment in subsidiaries 0 153 065 Capitalized tangible and intangible assets 2 738 (7 917) Net cash flows investing activities 2 738 146 487 Financing activities Proceeds from borrowings 0 21 850 Change in overdraft 32 314 0 Other changes in equity 51 813 (221 630) Proceeds from shares issued 0 86 557 Share issue costs (3 280) (600) Net cash flows financing activities 80 847 (113 823) Net change in cash and cash equivalents (2 922) (161 857) Cash and cash equivalents at beginning of period 6 391 168 248 Cash and cash equivalents at end of period 3 469 6 391 Oslo 26 April 2023 The board of Arribatec Group ASA Signed electronically Martin Nes chairman of the board Øystein Stray Spetalen member of the board Kristin Hellebust member of the board Henrik Lie-Nielsen member of the board Linn Katrine Høie member of the board Geir Johansen Group CEO Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 8989 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Arribatec Group ASA Notes to the financial statement Note 1 Accounting principles 1.1 Basis for preparation of the company accounts The annual accounts are set up in accordance with the Accounting Act of 1998, Norwegian accounting principles (NGAAP) and generally accepted Norwegian accounting best practice (NGRS). The annual accounts consist of the income statement, balance sheet, cash flow statement and notes. The annual accounts constitute a whole. The most important accounting principles that are used in the prepa- ration of the annual accounts are as follows: 1.2 Currency Monetary items in foreign currencies are valued at the year-end exchange rate. Other assets and liabilities in foreign currency are valued according to general valuation regulations. 1.3 Revenue Revenues mainly consist of sales of services to other companies in the group. The company recognizes revenue when it transfers control of a good or service to a customer. Dividends and group contributions from subsidiaries are recognized in the same year in which they are earned in the underlying companies, and when such distributions are expected to be resolved and are included in the underlying compa- nies’ annual accounts. Interest income is entered as it is earned. 1.4 Expenses Expenses are included with and expensed simultaneously with the income that the expenses are attributable to. Costs that cannot be directly attributed to income are expensed when incurred. Interest and fees are entered as these are earned as income or incurred as costs. 1.5 Defined contribution pension schemes The obligations of the Company related to payments of defined contribution retirement plans are expensed in the income statement as they are earned by the employee for services conducted on behalf of the employer during the period. 1.6 Classification of assets and liabilities Fixed assets and non-current liabilities consist of items expected to be settled more than twelve months after the balance sheet date. Current assets and current liabilities consist of amounts that are expected to be settled within twelve months after the balance sheet date. Fixed assets are valued at historical cost but written down to actual value when the reduction in value is not expected to be temporary. Fixed assets with a limited economic lifetime are depreciated in accordance with a depreciation plan. Non-current loans are recorded at the nominal received value at the time of establishment. Current assets are valued at the lowest of the cost value and actual value. Non-current liabilities are recorded at the nominal received value at the time of establishment. 1.7 Tangible fixed assets Tangible fixed assets are recognized at historical cost in the balance sheet, with a deduction for accumulated depreciation and any impair- ment. The write down is reversed when the basis for the write down no longer exists. Depreciation is made on a straight-line basis over the asset’s estimated useful life, which is assessed on an individual basis, ranging from three to five years. 1.8 Other intangible assets Intangible fixed assets are recognized at cost in the balance sheet, with a deduction for accumulated depreciation and any impairment. Amortization is calculated using the straight-line method to allocate the cost over their useful lives of three to five years. 1.9 Shares in subsidiaries In Arribatec Group ASA’s company accounts, shares in subsidiaries are valued in accordance with the cost method. Group contributions are entered in the parent company’s accounts as income in invest- ment in subsidiaries under financial items, in the extent to which the distribution relates to the earnings accrued in the holding period. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9090 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Other received group contributions are entered as a reduction of cost price of the shares. Provided group contributions net after tax are entered as increased investment in subsidiaries. 1.10 Receivables Receivables are recorded at nominal value less provisions for expected losses. Provisions for losses are made based on an indi- vidual analysis of the individual receivables. 1.11 Taxes Tax expenses consist of tax payable and the change in deferred tax. Deferred tax are calculated on all differences between accounting and tax values of assets and liabilities. Deferred tax is calculated at 22% based on the temporary differences that exist between the accounting and tax values, and tax loss carried forward at the end of the financial year. Net deferred tax assets are recognized to the extent that it is likely that they could be utilized. Tax expenses and deferred tax are entered in the accounts directly against equity so far as the tax items relate to items recognized directly against equity. 1.12 Leasing agreements Leases where the most significant risks and returns associated with ownership of the asset are not acquired by the company are classi- fied as operating lease agreements. Lease payments are classified as an operating expense and are recognized linearly over the contract period. 1.13 Use of estimates Management has used estimates and assumptions that affect the income statement and the valuation of assets and liabilities, as well as contingent assets and liabilities on the balance sheet date during the preparation of the annual accounts in accordance with generally accepted accounting principles. 1.14 Contingencies and events after the Balance Sheet date Contingent losses that are probable and quantifiable are expensed. See Note 13 for events after the balance sheet date. . 1.15 Cash Flow Statement The cash flow statement is prepared according to the indirect method. Cash and cash equivalents include cash, bank deposits and other short-term liquid investments. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9191 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 2 Employee compensation NOK thousand 2022 2021 Salaries (11 791) (1 187) Employment tax (1 720) (159) Pension costs (389) 0 Other benefits (2 667) (144) Total employee compensation (16 567) (1 490) 1 including Social security paid to board members Note 3 Other operating expenses NOK thousand 2022 2021 Consultants, etc 0 (3 024) Legal costs (5 301) (3 566) R&D related costs 0 (170) Computer and software costs (2 822) (2 805) Leasing (3 205) (1 461) Audit and accounting fees (1 957) (2 516) Stock fees/Listing of shares (219) (860) Other 10 054 (1 119) Total other operating expenses (3 449) (15 522) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9292 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 4 Other financial income NOK thousand 2022 2021 IC Group contribution received 0 7 649 IC Accrued dividend received 0 6 789 Net unrealized foreign exchange losses 1 687 1 411 Total other financial income 1 687 15 848 Note 5 Other financial expence NOK thousand 2022 2021 Write off intercompany loan (1 530) 0 Other (805) (2 428) Total other financial expence (2 335) (2 428) Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9393 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 6 Tax NOK thousand 2022 2021 Earnings before tax (42 493) (22 237) Permanent differences 1 606 0 Change in temporary differences 3 527 6 037 Total taxable income / loss (-) (37 360) (16 200) Payable tax on this year's result 0 0 Deferred tax 9 272 8 505 Note 7 Property, plant and equipment NOK thousand Office equipment Fixture and fittings Other Total Cost at 1 January 2022 4 037 546 745 5 328 Additions 0 319 0 319 Disposals / transferred (895) 0 0 (895) Cost at 31 December 2022 3 142 865 745 4 752 Accumulated depreciation at 1 January 2022 (3 111) (445) 0 (3 555) Depreciation during the year (31) (53) (102) (186) Accumulated depreciation at 31 December 2022 (3 142) (498) (102) (3 742) Carrying amount at 31 December 2022 0 367 643 1 010 Useful life 5-10 yrs 5 yrs 5 yrs Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9494 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 8 Other intangible assets NOK thousand Custom software Licenses Other Total Cost at 1 January 2022 30 732 1 544 101 32 377 Additions 2 419 0 0 2 419 Disposals / transferred (24 949) 0 0 (24 949) Cost at 31 December 2022 8 202 1 544 101 9 847 Accumulated amortization at 1 January 2022 (16 987) (352) (31) (17 371) Disposals / transferred 18 596 0 0 18 596 Amortization during the year (4 227) (309) (10) (4 545) Impairment during the year (522) 0 0 (522) Accumulated amortization at 31 December 2022 (3 139) (661) (41) (3 841) Carrying amount at 31 December 2022 5 063 883 60 6 005 Useful life 5-10 yrs 5 yrs 5 yrs Note 9 Shares in subsidiaries NOK thousand Ownership Book value of shares Equity in subsidiaries Arribatec Norge AS 100% 44 250 8 640 Arribatec Hopitality AS 100% 36 544 5 121 Arribatec Cloud AS 100% 80 091 12 029 Arribatec EA & BPM AS 100% 85 605 7 152 Arribatec Belgium NV 100% 586 2 444 Arribatec Denmark ApS 100% 56 1 781 Integra Associates Ltd 100% 36 268 5 848 Arribatec France Sarl 100% 102 0 Arribatec Solutions Trading Ltd 100% 0 (2 869) Arribatec Iberia SL 100% 28 4 115 Arribatec Sverige AB 100% 9 199 480 Arribatec Italy S.r.l. 100% 17 024 14 867 Arribatec Innovation Sp. z o.o. 100% 218 1 108 Total 309 969 27 774 Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9595 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 10 Cash and short-term deposits As of 31 December 2022 the company had a cash balance of NOK 762 770 thousand as restricted cash. Note 11 Share capital and shareholder information The Company is listed on the Oslo Stock Exchange under the ticker ARR. Share capital in the company per 31 December 2022 consisted of 690 573 217 shares, each with a nominal value of NOK 0.28. Total share capital was NOK 193 360 501. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9696 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Note 12 Equity NOK thousand Share capital Other paid-in capital Other equity Total equity Equity 31 December 2021 163 773 582 605 (415 224) 331 154 Result of the year (41 726) (41 726) Other paid in capital 29 588 25 097 54 685 Share issue cost (3 281) (3 281) Reclassificaion within equity (388 776) 388 776 0 Equity 31 December 2022 193 360 215 645 (68 173) 340 832 Note 13 Events after the balance sheet date 1 February 2023, Arribatec announced a proposal of a reverse share split of the Company’s shares in the ratio of 10:1 to meet the Oslo Børs’ requirements of a minimum share value of NOK 1 per share. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9797 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Parent CompanyFinancial statements | Parent Company 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BDO AS Munkedamsveien 45 PO Box 1704 Vika 0121 Oslo Norway BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT. Page 1 of 5 Independent Auditor's Report To the Annual Shareholders meeting of Arribatec Group ASA Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Arribatec Group ASA. The financial statements comprise: • The financial statements of the parent company, which comprise the balance sheet as at 31 December 2022, 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 2022, 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 2022, and its financial performance and its cash flows for the year then ended in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway. • The accompanying financial statements give a true and fair view of the financial position of the group as at 31 December 2022, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Penneo Dokumentnøkkel: HLVE5-S4QT6-27B1W-H5PP4-KVQLN-181PG Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9898 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Auditor’s reportFinancial statements | Auditor’s report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT. Page 2 of 5 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 relevant laws and regulations in Norway and the International Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants (including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion. To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit Regulation (537/2014) Article 5.1 have been provided. We have been the auditor of Arribatec Group ASA for 2 years from the election by the general meeting of the shareholders on 12 May 2021 for the accounting year 2021. 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. Description of the key audit matter How the key audit matter was addressed in the audit Goodwill and intangible assets Under IFRS, the Group is required to perform an annual impairment test of goodwill and intangible assets with an indefinite useful life. Impairment testing of goodwill and intangible assets is a key aspect of our audit due to the complexity of the assessments and the significance of assumptions related to future market and/or economic conditions that support the assessment. Our audit procedures have included a detailed review of management’s impairment test for each business unit to which goodwill and intangible assets are allocated. We have also assessed management’s assumptions supporting the valuation and taken into consideration management’s historical accuracy in determining the estimates. Internal specialists have assisted us in this process. We have also considered the assumptions described in note 16 and assessed the adequacy of the information provided in the notes against the requirements of IAS 36. Penneo Dokumentnøkkel: HLVE5-S4QT6-27B1W-H5PP4-KVQLN-181PG Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 9999 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Auditor’s reportFinancial statements | Auditor’s report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT. Page 3 of 5 Description of the key audit matter How the key audit matter was addressed in the audit Investments in subsidiaries The company has significant investments in subsidiaries that are measured at cost. Investments in subsidiaries are tested for impairment if impairment indicators are present. An impairment loss is recognized if the carrying amount exceeds the recoverable amount. The significant amounts involved, and the complexity of the valuation of the assets, lead us to classify the valuation of investments in subsidiaries as a key audit matter. Our audit procedures included a detailed review, testing, and assessment of management's impairment tests, including the calculation of recoverable amounts. We have also assessed management's assumptions supporting the valuation and taken into consideration the historical accuracy in determining the estimates. Internal specialists have assisted us in this process. We have also considered the assumptions described in note 16. Other information The Board of Directors and the Managing Director (management) are 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. 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. Penneo Dokumentnøkkel: HLVE5-S4QT6-27B1W-H5PP4-KVQLN-181PG Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 100100 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Auditor’s reportFinancial statements | Auditor’s report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT. Page 4 of 5 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 statutory 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 Management is responsible for the preparation of financial statements that give a true and fair view in accordance with the Norwegian Accounting Act and accounting standards and practices generally accepted in Norway, and for the preparation and fair presentation of the financial statements of the group in accordance with International Financial Reporting Standards as adopted by the EU, and for such internal control as management determines is necessary to enable the preparation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern. The financial statements of the Company use the going concern basis of accounting insofar as it is not likely that the enterprise will cease operations. The financial statements of the Group use the going concern basis of accounting unless management either intends to liquidate the Group or to cease operations, or has no realistic alternative but to do so. 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 Penneo Dokumentnøkkel: HLVE5-S4QT6-27B1W-H5PP4-KVQLN-181PG Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 101101 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Auditor’s reportFinancial statements | Auditor’s report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 BDO AS, a Norwegian limited liability company, is a member of BDO International Limited, a UK company limited by guarantee, and forms part of the international BDO network of independent member firms. The Register of Business Enterprises: NO 993 606 650 VAT. Page 5 of 5 Report on compliance with Regulation on European Single Electronic Format (ESEF) Opinion As part of the audit of the financial statements of Arribatec Group ASA we have performed an assurance engagement to obtain reasonable assurance about whether the financial statements included in the annual report, with the file name Arribatec-Group-ASA-2022-12-31-en.zip have been prepared, in all material respects, in compliance with the requirements of the Commission Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the preparation of the annual report in XHTML format and iXBRL tagging of the consolidated financial statements. In our opinion, the financial statements, included in the annual report, have been prepared, in all material respects, in compliance with the ESEF Regulation. Management’s Responsibilities Management is responsible for the preparation of the annual report in compliance with the ESEF Regulation. This responsibility comprises an adequate process and such internal control as management determines is necessary. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger BDO AS Yngve Gjethammer State Authorised Public Accountant (This document is signed electronically) Penneo Dokumentnøkkel: HLVE5-S4QT6-27B1W-H5PP4-KVQLN-181PG This document is digitally signed using Penneo.com. The digital signature data within the document is secured and validated by the computed hash value of the original document. The document is locked and timestamped with a certificate from a trusted third party. All cryptographic evidence is embedded within this PDF, for future validation if necessary. How to verify the originality of this document This document is protected by an Adobe CDS certificate. When you open the document in Adobe Reader, you should see, that the document is certified by Penneo e-signature service penneo@penneo.com. This guarantees that the contents of the document have not been changed. You can verify the cryptographic evidence within this document using the Penneo validator, which can be found at https://penneo.com/validator The signatures in this document are legally binding. The document is signed using Penneo™ secure digital signature. The identity of the signers has been recorded, and are listed below. “By my signature I confirm all dates and content in this document.” Y Y n n g g v v e e G G j j e e t t h h a a m m m m e e r r P P a a r r t t n n e e r r On behalf of: BDO AS Serial number: 9578-5998-4-785509 IP: 188.95.xxx.xxx 2023-04-26 15:40:54 UTC Penneo document key: HLVE5-S4QT6-27B1W-H5PP4-KVQLN-181PG Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 102102 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Financial statementsFinancial statements | Auditor’s reportFinancial statements | Auditor’s report 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | Statement of Corporate Governance ^ This chapter describes Arribatec Group ASA’s (“Arribatec” or “the Company”) compliance with the Norwegian code of practice for corporate governance. The Company’s Board of Directors embraces the principles of good corporate governance and is vigilant about the Company’s adherence to these principles. This report includes the information required to comply with §3-3b in the Norwegian Accounting Act. Corporate governance As a security provider, understanding and adhering to rules and regulations is of the utmost importance to Arribatec. Good corporate governance benefits the Company’s reputation and thus value, and vice versa. The Company adheres to the following set of principles with regard to corporate governance: Transparency The communication between the Company and its stakeholders shall be based on transparency about matters that are relevant to evaluate the operations of the Company. Independence The Board of Directors shall act independently of the Company’s executive management to ensure that decisions are made on fair and neutral grounds. Equality All shareholders shall be treated equally. Control and governance Good internal control and governance principles shall contribute to predictability and risk mitigation for owners and other stakeholders. 1. Corporate Governance at Arribatec Group ASA The Company always seeks to comply with the most recent appli- cable legal framework for companies listed on the Norwegian stock exchange. The Company endorses the “Norwegian Code of practice for Corporate Governance” (“NUES”) in its most recent revision (October 2021), which is available on www.nues.no. The Company conducts annual corporate governance reviews to ensure continued compliance. Considering the size and maturity of the Company, there may be deviations from the code. Arribatec will adhere to the principle “declare or explain” regarding any non-compliance with respect to the code. The Company’s policies, instructions and internal processes are continuously developed. 2. Operations and corporate social responsibility The Board of Directors prepares annual business plans that include the goals, key strategies and risk profile for the Company, which shall be reviewed on an annual basis. The Company has implemented ethical and corporate social responsibility guidelines in accordance with its basic corporate values, which describe how the Company shall integrate its social considerations in its business. The guide- lines are published on Arribatec’s website, www.arribatec.com. A Corporate Social Responsibility Report is found in this annual report. 3. Equity and Dividend Equity: The Company strives to maintain a healthy relation between the Company’s equity and other forms of financing, given the Company’s strategy and risk profile. The Board of Directors takes immediate and appropriate action should the equity or liquidity situa- tion of the Company prove to be below an acceptable level. Dividend policy Arribatec is growing fast, both organically and through M&A activities. Both these avenues for growth require liquidity and availability of sufficient funding as well as a healthy equity ratio. While the company is in an expansion phase, the Board is not planning for regular divi- dends to be paid to the shareholders. There has not been given, nor proposed to give, a mandate to the Board of Directors to approve a distribution of dividends. Board authorizations Authorisations to the Board of Directors to approve share capital increases shall be confined to defined purposes and should not be given for longer periods of time than until the next Ordinary General Meeting. If an authorization encompasses several purposes, each purpose should be treated as a separate issue at the General Meeting. This also applies to authorizations permitting the repurchase of shares. The ordinary General Meeting held on the 30 May 2022 gave the Board of Directors authorization to increase the Company’s Share Capital by up to NOK 95 886 400. The authorizations are valid until the next ordinary general assembly, and no later than 30 August 2023. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 103103 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Corporate GovernanceCorporate Governance Corporate Governance 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 4. Equal treatment of shareholders and transaction with related parties Class of shares: The Company has one class of shares, without any form of voting restriction imposed. Each share represents one vote at the Company’s General Meeting. The par value per share is NOK 2.80. Pre-emption rights of existing shareholders The Company’s existing shareholders have pre-emption rights to subscribe for shares in the event of share capital increase, unless special circumstances necessitate a deviation from this principle. Any decision to deviate from the pre-emption rights of existing share- holders shall be justified and in accordance with the authorization given to the Board of Directors from the General Meeting. The justifi- cation shall be publicly disclosed in a stock exchange announcement issued in connection with the increase in share capital. Transactions with related parties The Company’s board members, management and significant share- holders are considered related parties. Any transactions with related parties are carried out on an arm’s length basis. If the value of such a transaction is significant, the Board of Directors is responsible for assigning an independent third party to perform a valuation. Alternatively, the transaction in question can be treated as an issue at the General Meeting, in accordance with the Norwegian Public Limited Liability Companies Act. 5. Shares and negotiability The shares in the Company are freely transferable, and there are no constraints in the Articles of Association preventing or contradicting this. 6. General meetings The General Meeting is the main governing body of the Company. The Board shall facilitate so that all shareholders are given the opportunity to participate in General Meetings, and that the General Meetings are an effective forum for the views of shareholders and the Board of Directors. Notification: No later than 21 days prior to the Annual General Meeting (“AGM”), an invitation will be made available on the Company’s website, www.arribatec.com. Supporting information on resolutions to be considered, as well as the recommendations of the Nomination Committee will be presented in due time before the AGM. The Board of Directors seeks to ensure that all shareholders are provided with sufficient information to form qualified views on the matters discussed at the General Meeting. The Company’s Articles of Association provide that the Company does not have to send docu- ments relating to matters to be considered by the General Meeting by mail to shareholders when these documents are made available on the Company’s website. Any such documents shall, however, be sent free of charge upon request from individual shareholders. Further, the right to participate and vote at the Company´s General Meeting can only be exercised for shares when the purchase of shares is listed in the shareholder register no later than five workdays prior to the General Meeting. Other than aforementioned, there are no provisions in the Articles of Association regarding General Meetings in the Company that deviates from the provisions of the Norwegian Public Limited Companies Act. The AGM will be held no later than 30 June each year. The AGM will be held in Oslo, unless otherwise is clearly specified. Participation by shareholders in absentia: Shareholders that are unable to attend the General Meeting in person, are encouraged to vote by proxy. In connection with any General Meeting, the Company provides information on proxy voting, designates a person who will be available to vote on behalf of the shareholders in question and prepare a form for the appointment of a proxy. Attendance, agenda and execution: Board members, the Nomination Committee and the auditor are encouraged to attend the General Meeting in person. The Company will make arrangements to ensure that an independent chairman for the General Meeting can be elected. The company will conduct General Meetings by way of web meetings if the situation requires it. 7. Nomination Committee Requirements for the Company’s Nomination Committee are outlined in the Articles of Association, §6. According to the Company’s Articles of Association, the Company shall have a Nomination Committee consisting of 2-5 members by the further decision of the General Meeting. Pursuant to the guidelines for the Nomination Committee, the Nomination Committee shall, inter alia, assess the need for change in the Board of Directors, propose candidates for election to the Board of Directors, and propose remuneration to be paid to such members. The Nomination Committee is responsible for assessing the need for change in the Board of Directors, proposing, in consultation with relevant shareholders, candidates for election to the Board of Directors, and proposing the remuneration to be paid to such members. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 104104 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Corporate GovernanceCorporate Governance Corporate Governance 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 8. The Board of Directors – composition and independence According to the Articles of Association, the Board of Directors should consist of three to seven members, chosen by the General Meeting. The Chairman of the Board is elected by the General Meeting. The composition of the Board shall ensure that the Board can attend to the common interests of all shareholders and meet the Company’s need for expertise, capacity, and diversity. It is of great importance to the Company that the board members have the relevant competen- cies to independently evaluate the cases presented to them by the executive management, as well as to monitor the daily operations of the Company. The term of office for members of the Board of Directors shall not be longer than two years at the time. Members of the Board of Directors may be re-elected. The Company’s Board of Directors shall normally not include members of the executive management team. The Company strives to apply NUES’ criteria to evaluate whether a director can be considered independent. The Board should have a composition that enables it to attend to the common interests of all shareholders and operate independently of special interests. Any deviation from the independence principle will be properly explained by the Company. Any director experiencing a change in his or her ability to act independently is obligated to notify the Chairman of the Board. At least two of the shareholder-elected board members shall be independent of the Company’s main shareholders. The Board of Directors held eleven meetings in 2022. 9. The Board of Directors – work and instructions The formal responsibilities of the Board of Directors are mandated by Norwegian law. The fundamental responsibility of the directors is to oversee day-to-day management and evaluate strategy, to exercise their business judgment acting in what they reasonably believe to be the best interests of the Company and its shareholders. The Board of Directors is also to oversee such matters as are required by statutory law, the Company’s Articles of Association, policies, instructions and procedures as well as resolutions or the resolutions of the General Meeting. It is the duty of the Board of Directors to monitor management’s performance to ensure that the Company operates in an effective and ethical manner, focused on creating value for the Company’s shareholders. The Board of Directors also evaluates the Company’s overall strategy and evaluates performance against the management’s operating plan. The Board of Directors is responsible for supervising strategic, financial and execution risks, as well as exposures associated with the Company’s business strategy, products- and services innovation and sales road map, policy matters, significant litigation and regulatory exposures, and other current matters that may present a material risk to the Company’s financial performance, operations, infrastructure, plans, prospects or reputation, acquisitions, and divestitures. Furthermore, the Board of Directors shall control the ongoing activities of the Company in a satisfactory manner. Instructions for the Board of Directors: The Board of Directors shall issue instructions for its own work as well as for the executive personnel with emphasis on clear internal allocation of responsibilities and duties. In order to ensure a more independent consideration of matters of a material character in which the Chairman of the Board is, or has been, personally involved, the Board’s consideration of such matters shall be chaired by some other members of the Board. Audit Committee: The audit committee’s main responsibilities are to ensure the integrity of the Group’s financial reporting, to supervise the Group’s internal control and risk management system, to ensure the auditor’s independence, to inform the Board of the results of the stat- utory audit, and to ensure that the annual accounts give a fair picture of the Group’s financial results and financial condition in accordance with generally accepted accounting principles. The audit committee works as the Board’s risk committee, reviews the procedures for risk management, and assesses the risks and financial controls related to the Group’s business activities. The audit committee ensures that the company has a sufficient focus on ESG to contribute to sustain- able development and appropriate risk management to minimize the negative impact of the operations. The audit committee also receives reports on the work of the external auditor and the results of the audits. As of 31 December 2022, the audit committee consisted of the following members: • Martin Nes (Chair) • Henrik Lie-Nielsen • Kristin Hellebust The audit committee held five meetings in 2022. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 105105 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Corporate GovernanceCorporate Governance Corporate Governance 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Instructions for the CEO: Executive management and Board of Directors’ responsibilities are clearly segregated. The CEO shall follow the guidelines and instructions issued by the Board of Directors. The CEO is responsible for the day-to-day management of the Company pursuant to section 6-14 of the Norwegian Public Limited Companies Act. The CEO represents the Company externally in matters that form part of day-to-day management. The day-to-day management does not cover matters of extraordinary nature or of major importance. However, the CEO is authorized to decide on matters of extraordinary nature or of major importance in cases where the decisions of the Board of Directors cannot be awaited without serious detriment to the Company. The Board of Directors shall be notified of the decision as soon as possible. Financial reporting: The Board of Directors is responsible for ensuring the integrity of financial information. The Board evaluates the integ- rity of the Company’s accounting and financial reporting systems, including the audit of the Company’s annual financial statements by the independent auditor, and that there are appropriate systems of internal control in place. The main purpose of risk management and internal control is to provide reasonable assurance that the group will achieve: • Compliance with legislation and regulations, as well as internal guidelines • Quality and efficiency within internal operations • Reliable internal and external reporting quarterly and annual financial reports are reviewed and approved at board meetings and form the basis for external financial reporting. Upon the presentation of year-end financial statements, the CEO and the CFO declare that the accounts have been prepared in accordance with generally accepted accounting principles, and that to the best of their knowledge, all information is accurate, and no material information has been omitted. The Company uses an external accounting agency for all Group companies. Disqualification: The CEO or a member of the board may not partici- pate in the discussion on Board issues that are of special financial or personal interest to the individual in question. 10. Risk management and internal control The Board of Directors performs an annual audit of the main risks and internal control routines of the Company. The audit shall encompass the issues that have been brought to the Board of Directors’ attention throughout the year. The routines for internal control shall encompass the Company’s adherence to its values, and its guidelines on ethics and corporate social responsibility. 11. Remuneration of the Board of Directors The Ordinary General Meeting approves the remuneration paid to the Board of Directors. The Nomination Committee is responsible for issuing a proposal on the remuneration terms to the AGM. 12. Remuneration of executive management In accordance with the Norwegian Public Limited Liability Companies Act, the Board of Directors establishes guidelines for the remu- neration of the executive management team. These guidelines are presented to the General Meeting through a statement on remuner- ation for executive management. The statement is presented for an advisory vote, which is subject to the General Meeting’s approval. The Company’s general principle for management remuneration is to offer competitive terms, to attract and retain the competence it needs. 13. Information and communication Regular information to the Company’s shareholders and the market is provided through the annual report, quarterly reports, and open presentations. All reports and notices are issued and distributed according to the rules and regulations of the Oslo Stock Exchange. Insider information is treated in accordance with Norwegian law. Shareholder information, including the financial calendar, is available on www.arribatec.com. The Company’s CEO and CFO is responsible for investor relations. The Company has established procedures for discussions with shareholders other than at Ordinary General Meetings. All information distributed to the Company’s shareholders is published on the Company’s website at the same time as it is sent to shareholders. 14. Take-overs There are no defense mechanisms against take-over bids in the Company’s Articles of Association or in any underlying governance document. In corporate takeovers or restructuring situations, the Board shall exercise due and proper care so that all shareholder values and interests are preserved. The Board of Directors will ensure that the shareholders are given enough information and time to form a view of the offer in a bid situation. The Board of Directors will handle take-over bids in accordance with Norwegian laws and regu- lations. Furthermore, the Board of Directors will seek to comply with the recommendations set out in the NUES, including arranging for a valuation from an independent expert and making a recommendation as to whether the shareholders should accept the bid. Other than the guidelines described above, the Board of Directors has not found it appropriate to establish any other written explicit principles for how it will act in the event of a take-over bid. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 106106 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Corporate GovernanceCorporate Governance Corporate Governance 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 15. Auditor The external auditor is elected by the General Meeting. The auditor is fully independent of the Company. BDO is the Company’s auditor. Each year the auditor presents the Board of Directors with a plan for the implementation of the audit, and a written confirmation that the auditor satisfies established requirements pertaining to independence and objectivity. The auditor participates in the Audit Committee’s meetings. The auditor provides the Audit Committee and the Board with its perspectives on the annual statement and informs them of any disagreements between the auditor and the executive manage- ment. The Board of Directors also has contact with the auditor when required outside the situations mentioned above. At least once a year, the auditor attends a meeting with the Board of Directors in which no representatives from the Company’s executive management will be present. During 2022, the auditor attended 1 board meeting and 5 Audit Committee meetings. The auditor is present at the General Meeting, where the Board of Directors also informs about the compensation for the auditory work required by law and remu- neration associated with other assignments. Information on the fees paid to the auditor in 2022, including a breakdown between statutory auditing and other assistance/service is presented in notes to the consolidated financial statements. In connection with the auditor’s presentation to the Board of Directors of the annual work plan, the Board of Directors considers if the auditor to a satisfactory degree also carries out a control function. Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 107107 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back Corporate GovernanceCorporate Governance Corporate Governance 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 | APMs, terms and abbreviations ^ NOK thousand 2022 2021 EBITDA (34 107) (6 800) M&A cost 0 1 959 Restructuring cost 3 779 3 240 Bad debt in relation to discont. product 1 048 0 Sale of intangible asset (IP) 4 190 0 Adjusted EBITDA (25 090) (1 601) Revenue 504 968 413 938 EBITDA (34 107) (6 800) EBITDA margin (6.8%) (1.6%) Adjusted EBITDA (25 090) (1 601) Adjusted EBITDA margin (5.0%) (0.4%) 1 Accrual for ECL Russia, reversed in September APM cost is considered as one-time and not part of the ongoing business and are therefore adjusted to show an EBITDA mirroring the underlying business. M&A cost are related to acquisition of subsidiaries, restructuring cost is related to the restructuring of BA Marine, bad debt in relation to discontinued product in BA Business Services and Sale of intangible asset is related to loss on sale of IP in BA Marine. KPI/APM definition KPI/APM Definition Gross profit Operating revenue less materials, software and services EBITDA Earnings before Interest, Tax, Depreciation and Amortization EBITDA margin EBITDA as a percentage of Total income Equity ratio Equity as a percentage of total assets Equity ratio Equity as a percentage of total assets Adjusted EBITDA EBITDA, adjusted for calculated reverse take-over cost, restructuring cost, direct M&A cost and other one-time effects Adjusted EBITDA margin EBITDA margin, adjusted for calculated reverse take-over cost, restructuring cost, direct M&A cost and other one-time effects Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 108108 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back APMs, terms and abbreviationsAPMs, terms and abbreviations APMs, terms and abbreviations 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 Terms and abbreviations APAC Asia/Pacific BA Business Area BizS BA Business Services BoD Board of Directors CGU Cash Generating Unit Cloud BA Cloud DKK Danish Krone EA-BPM BA Enterprise Architecture & Business Process Management EBIT Operating profit, Earning before Interest and Tax EBITDA Earnings Before Interest, Tax, Depreciation and Amortization ECL Estimated Credit Losses EPS Earnings Per Share EUR Euro FTE Full Time Equivalent Hspt BA Hospitality IFRS International Financial Reporting Standards Marine BA Marine M&A Mergers and Acquisitions NOK Norwegian Krone Opex Operating expenses RR Recurring revenue, derived from sale of services and solutions through subscription models this reporting period RTO Reverse take over SEK Swedish Krone Saas Software as a service Solaas Solution as a service USD US dollar VIU Value in Use WACC Weighted Average Cost of Capital WAEP Weighted Average Exercise Price Arribatec Group ASA | Annual report 2022Arribatec Group ASA | Annual report 2022 109109 Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations Go back APMs, terms and abbreviationsAPMs, terms and abbreviations APMs, terms and abbreviations 2021 Artbox Report Template All rights reserved © Artbox AS 2021 2021 Artbox Report Template All rights reserved © Artbox AS 2021 artbox.no Arribatec is a global supplier of digital business solutions that help our customers achieve competitive advantage through innovative use of IT. +47 4000 3355 info@arribatec.com Arribatec Group ASA Lørenfaret 1D N-0585 Oslo Highlights Our business ESG report Board of Directors report Financial statements Corporate Governance APMs, terms and abbreviations 5967007LIEEXZXFK00402022-01-012022-12-315967007LIEEXZXFK00402021-01-012021-12-315967007LIEEXZXFK00402022-12-315967007LIEEXZXFK00402021-12-315967007LIEEXZXFK00402020-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFK00402021-01-012021-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFK00402021-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFK00402020-12-31ifrs-full:AdditionalPaidinCapitalMember5967007LIEEXZXFK00402021-01-012021-12-31ifrs-full:AdditionalPaidinCapitalMember5967007LIEEXZXFK00402021-12-31ifrs-full:AdditionalPaidinCapitalMember5967007LIEEXZXFK00402020-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFK00402021-01-012021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFK00402021-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFK00402020-12-31ARR:RetainedEarningsAndMiscellaneousOtherReservesMember5967007LIEEXZXFK00402021-01-012021-12-31ARR:RetainedEarningsAndMiscellaneousOtherReservesMember5967007LIEEXZXFK00402021-12-31ARR:RetainedEarningsAndMiscellaneousOtherReservesMember5967007LIEEXZXFK00402020-12-315967007LIEEXZXFK00402022-01-012022-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFK00402022-12-31ifrs-full:IssuedCapitalMember5967007LIEEXZXFK00402022-01-012022-12-31ifrs-full:AdditionalPaidinCapitalMember5967007LIEEXZXFK00402022-12-31ifrs-full:AdditionalPaidinCapitalMember5967007LIEEXZXFK00402022-01-012022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFK00402022-12-31ifrs-full:ReserveOfExchangeDifferencesOnTranslationMember5967007LIEEXZXFK00402022-01-012022-12-31ARR:RetainedEarningsAndMiscellaneousOtherReservesMember5967007LIEEXZXFK00402022-12-31ARR:RetainedEarningsAndMiscellaneousOtherReservesMemberiso4217:NOKiso4217:NOKxbrli:shares