Annual Report (ESEF) • Mar 24, 2022
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Download Source File254900PS6TE65C9V4D712021-01-012021-12-31254900PS6TE65C9V4D712020-01-01254900PS6TE65C9V4D712020-01-012020-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712020-01-012020-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712020-12-31ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712020-12-31ifrs-full:SharePremiumMember254900PS6TE65C9V4D712020-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712020-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712021-01-01ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712021-01-01ifrs-full:SharePremiumMember254900PS6TE65C9V4D712021-01-01ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712020-01-012020-12-31254900PS6TE65C9V4D712021-01-01ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712021-01-01254900PS6TE65C9V4D712021-01-012021-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712021-01-012021-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712021-12-31ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712021-12-31ifrs-full:SharePremiumMember254900PS6TE65C9V4D712021-12-31ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712021-12-31ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMember254900PS6TE65C9V4D712021-12-31254900PS6TE65C9V4D712020-12-31254900PS6TE65C9V4D712019-12-31254900PS6TE65C9V4D712020-01-01ifrs-full:IssuedCapitalMember254900PS6TE65C9V4D712020-01-01ifrs-full:SharePremiumMember254900PS6TE65C9V4D712020-01-01ifrs-full:OtherEquityInterestMember254900PS6TE65C9V4D712020-01-01ifrs-full:ReserveOfChangeInValueOfForeignCurrencyBasisSpreadsMemberiso4217:NOKiso4217:NOKxbrli:shares Annual Report 2021 Page 2 / Annual Report 2021 Content Letter from the CEO 3 Komplett's business areas 5 Board of directors and management 6 Board of directors' report 7 Important milestones and continued progress Overview of the business Financial review Segment Information Risk factors and risk management Directors’ & ocers’ insurance Research and development People and organisation Activities on gender equality and non-discrimination Environmental, social and governance Corporate governance Events after 31 December 2021 Going concern Parent Company results and allocation of net prot Outlook Statement from the board of directors Corporate governance 17 Statement of policy on corporate governance Activities Equity and dividends Equal treatment of shareholders Freely transferable shares General meetings The nomination committee The board of directors, composition and independence The work of the board of directors Risk management and internal control Remuneration of the board of directors Remuneration of the executive management group Information and communications Takeovers Auditor Corporate responsibility 23 Share information 26 Financial statements and notes - Komplett Group 27 Financial statements and notes - Komplett ASA 64 Alternative Performance Measures (APM's) 75 Auditor’s report 77 Page 3 / Annual Report 2021 Letter from the CEO Back to the core - and headed for more 2021 was an eventful year. Komplett was reintroduced on the stock exchange, we celebrated our 25th anniversary as an online retailer and, most importantly, we contin- ued to strengthen our position as a leading e-commerce player in the Nordics. After year-end we entered a trans- formational agreement to join forces with NetOnNet with a joint ambition to build an even stronger online-rst electronics platform in the Nordics. Since Komplett.no was established 25 years ago, we have seen a transformational shift in consumer preferences to e-commerce as a sales channel. In 2018, we launched our “back to core” strategy and went back to our roots as an online-rst retailer of electronic goods and services. Since then, we have been the fastest-growing player in the Nordics. We have outperformed the market by con- sistently growing our market shares, while at the same time utilising our scalable business model to achieve a cost leadership position. Making the electronic retail business more sustainable Last year we identied sustainability as one of the pillars in our 2025 business strategy, and in 2021 we started im- plementing the actions dened by our sustainability plan. Entering 2022, we continue to discover potential improve- ments when it comes to incorporating sustainability into our daily operations. In our sustainability report, we share more insight into our ambitions to lead the way in making the electronic retail business more sustainable. Outperforming the market The migration to online shopping continues to be a posi- tive driver for our business, and we continue to expand our market share. Despite softer market demand for consum- er electronics towards the end of the year, we reported solid revenue growth in 2021, primarily driven by strong progress across the B2B and Distribution segments. The B2C segment also succeeded in growing its revenues on top of record-high demand in 2020, despite headwind from supply chain challenges and components shortages, especially in the gaming and components categories. We continued to strengthen our cost leadership position throughout 2021, supported by the Group’s highly scalable business model and increased business eciency. Milestone transactions As mentioned, this year also marks the Group’s listing on the Oslo Stock Exchange, which took place in June 2021. Since then, we successfully acquired 65 per cent of the shares in Ironstone Holding AS, a leading supplier of cloud-based IT solutions and services. This strategic move is already benetting customers and has reinforced our offering in the growing service segment. After year-end, we proudly announced the agreement to combine our business with NetOnNet. In my view, this is a perfect match between two attractively positioned compa- nies with complementary strengths. Our joint ambition is to enable an even more attractive offering and the best shop- ping experience to our consumer- and business customers. As a combined unit, our companies will become even better positioned to leverage their strong consumer brands and proven scalable business models to continue delivering attractive protable growth. In addition, increased scale will contribute to material value creation through realising signicant cost synergies related to sourcing. We expect to complete the transaction during the rst half of April 2022. Page 4 / Annual Report 2021 2021 has truly been an exciting and eventful year for the Group, and I would like to thank all employees, customers, suppliers and partners for their hard work and support. I would also like to use this opportunity to wish NetOnNet a warm welcome to Komplett – I can’t wait to see what we can achieve together. Headed for more In recent weeks, we have all been saddened by the acts of war taking place in the Ukraine. While the human suffering is clearly our main concern, we must also acknowledge that economic uncertainty may have an adverse impact on consumer spending and demand in our markets. Looking ahead, we anticipate the online migration to con- tinue, and we are well positioned to continue to increase our share of the market. While the underlying drivers of our business remain strong, we expect the ongoing supply chain constraints to continue in 2022, especially within gaming and components. Supported by our highly competitive, scalable and cost-ecient business model, we will continue to capital- ise on our position as a leading Nordic online-rst retailer. Both NetOnNet and Komplett are recognised by a winning culture that puts customers rst and both organisations demonstrate excellent commercial skills. Together, we will be even stronger and better positioned to continue to deliver protable growth and value creation to our share- holders. Yours sincerely, Lars Olav Olaussen, CEO Page 5 / Annual Report 2021 The Group's business activity The Group, headquartered in Sandefjord, Norway, is an e-commerce player operating in Scandinavia, offering one of the market's broadest selections of consumer electronics and business solutions. The Group continu- ously strives to be the obvious choice for its customers, its suppliers and its employees, and aims to do so by po- sitioning itself as the direct link between manufacturers and end-customers, by offering ecient operations and highly competitive prices. The Group believes it has an ecient, scalable business model supporting clear cost leadership. The Group operates within three reporting segments: (i) B2C, (ii) B2B and (iii) Distribution, and serves its customers through its eight webshops and 18 retail stores. B2C The Group's operations in the B2C segment covers sales to private consumers across Norway, Sweden and Denmark, serving the consumer market for electronics and technology products and consumer goods under two brands with four webshops and 18 stores. The Group serves the B2C market through the "Komplett" brand, on the platforms "Komplett.no", "Komplett.se" and "Kom- plett.dk" (collectively referred to as "Komplett B2C"), and through the "Webhallen" brand on the platform "Webhal- len.com". "Komplett.no" also operates two pick-up points, one in Oslo and one at the warehouse in Sandefjord. Web- hallen is an omnichannel provider within consumer elec- tronics, with a core focus on gaming products, offering customers the choice of either online or in-store sales. Webhallen has 18 stores and pick-up points in Sweden, located strategically around Stockholm and bigger cities in Sweden. B2B The Group serves the commercial B2B market through the platforms "Komplett Bedrift" and "Komplett Företag" (collectively referred to as "Komplett B2B") in Norway and Sweden. Komplett B2B is a B2B online player operating in the SME segment in Norway and in Sweden. Distribution The distribution segment covers the Group's sales to resellers, a customer group which the Group serves under the brand "Itegra". Itegra is an online focused wholesales business, distributing IT and consumer electronics, with presence across Norway and Sweden, with the web portals "itegra.no" and "itegra.se." ("Itegra"). Komplett's business areas Page 6 / Annual Report 2021 Board of directors Nils Kloumann Selte Chair Jennifer Geun Koss Director Lars Bjørn Thoresen Director Jo Olav Lunder Director Sarah Willand Director Carl Erik Hagen Deputy director Nora Elin Eldås Worker director Anders Odden Worker director See https://www.komplettgroup.com /about/board-and-managem en t for more information on background and competence Lars Olav Olaussen Chief Executive Ocer Krister A. Pedersen Chief Financial Ocer Senior management Page 7 / Annual Report 2021 The Komplett Group continued its strong and prota- ble growth in 2021, driven by positive momentum in the e-commerce market and solid operational performance. Important milestones were reached, with a successful listing on Oslo Børs and the acquisition of IT-service provider Ironstone Holding. Signicant shareholder value was created, and the board proposes a dividend of NOK 2.90 per share in line with the dividend policy. Enter- ing 2022, the Group has made a new, important step to enhance its market position and cost leadership through the proposed combination of Komplett and NetOnNet. Important milestones and continued progress The strong momentum in the e-commerce market con- tinued in 2021 with consumers’ shopping habits shifting more rapidly than ever from physical trade to e-com- merce. Growth was somewhat dampened by supply chain constraints and components shortages in the wake of Covid-19. Komplett Group continued to deliver protable growth in line with its successful strategy, focusing on its role as a pure play online retailer of electronic goods and services in the Nordic market. Group revenues grew by 11.9 per cent and came to NOK 11.0 billion, while operating results increased 34 per cent to NOK 369 million. The growth was primarily driven by strong progress across the B2B and Distribution segments. The B2C segment continued to grow, but with lower growth rates on the back of a boosted 2020 with record-high demand. Both the B2B and the Distribution business segments passed signicant milestones in yearly revenues, with B2B surpassing NOK 1.5 billion and Distribution surpassing NOK 3.1 billion. Komplett Group continued to strengthen its cost leader- ship position throughout 2021. The Group’s highly scal- able business model and increased business eciency resulted in operating costs of 9.9 per cent of revenues for 2021, corresponding to an improvement of 0.7 percentage points from 2020. Prot before tax came to NOK 347 million, up 37.3 per cent from 2020. Cash ows in 2021 reect solid operational performance, renancing in connection with the initial public offering and the acquisition of Ironstone AS. Net interest-bearing debt at year end was NOK 566 million, compared to a cash positive of NOK 6 million as per 31 December 2020. Solid operations and cash ow combined with a robust nancial position form the basis for the board of directors’ dividend proposal of NOK 2.90 per share for 2021, in line with the dividend policy. The Parent Company Komplett ASA was successfully list- ed on Oslo Børs in June 2021. In July, Komplett announced the acquisition of 65.1 per cent of the shares in Ironstone Holding AS, a leading supplier of cloud-based IT solutions and services. The acquisition was completed in the third quarter and represents an attractive add-on for Komplett to meet the growing demand from customers for services related to basic IT set-up, cloud-based applications and IT security as an add-on to Komplett’s traditional hardware offering. Komplett FLEX was successfully launched in 2021 as a unique way to buy and consume electronic products, re- duce waste and promote more sustainable consumption behaviours. FLEX is a new product subscription service offering to the B2C segment, allowing customers to buy a wide range of products at a xed monthly fee with a guaranteed residual value. Consumers can return and exchange their product after a down-payment period, while Komplett ensures that the used product is sold in the second-hand market. Komplett Group entered 2022 well positioned to further increase its market share and to benet from the scal- able business platform. The position has been further strengthened after year end. On 9 February 2022, Kom- plett ASA and NetOnNet AB announced their intention to combine the two companies with the purpose of strength- ening their position as a leading online-rst electronics platform in the Nordic area with an aggregated revenue in 2021 of NOK 18.5 billion The transaction supports Komplett’s strategic ambitions and is expected to allow for signicant economies of scale and enable cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with the full effect expected within 24 months of the completion of the transaction. Komplett will retain its strong nancial posi- tion and attractive dividend policy after the transaction, which is expected to be completed during the rst half of April 2022. Komplett anticipates the online migration to continue, Board of directors' report Page 8 / Annual Report 2021 a loyal and growing customer base, strong brands with a long heritage and high awareness, and a strong company culture driven by tech enthusiasts. Business segments The business is organised in three business segments: The "B2C" (consumer market) segment comprises the brands Komplett and Webhallen and represented 57.8 per cent of Group revenues in 2021. The "B2B" (business to business) segment operates un- der the brands Komplett Bedrift and Komplett Företag and accounted for 13.9 per cent of Group revenues in 2021. The "Distribution" segment includes the Itegra brand and accounted for 28.3 per cent of Group revenues. The Group has B2C operations in Norway, Sweden and Denmark, while the B2B and Distribution operations are mainly in Norway, although with small-scale operations in Sweden. In addition to the business segments mentioned above, the Company operates with two segments on Group level. The "Other" segment represents Group costs not allocated to the business segments. Typical cost elements under this segment include management costs and group stra- tegic initiatives. The different effects of "IFRS" (Interna- tional Financial Reporting Standards) are not part of the operational measures and are excluded from the business segments. Market presence and position The competitive landscape for e-commerce implies glob- al competition for all players. Komplett focuses on local customers in Norway, Sweden and Denmark. Business in Norway accounts for 64.5 per cent of Group revenues, Sweden 32.2 per cent and Denmark 3.3 per cent. The Group’s market share varies between the different segments and markets, with a particularly strong position in the B2C segment (Komplett and Webhallen). Komplett is also well positioned in the B2B segment (Komplett Bedrift and Komplett Foretag) and in long term and large-scale distribution contracts through the Itegra brand. The Group has a signicant competitive edge through superior customer satisfaction, a very ecient logistics operation shared between all three segments and lower costs than most business peers. The Group has a track record of gaining market share across all business segments and geographies during recent years. Komplett is well-positioned to continue benetting from and the Group is well positioned to continue to increase its share of the market. While the underlying drivers of the business remain strong, the Group expects the ongoing supply chain constraints to continue to impact market dynamics also in 2022, especially within gaming and com- ponents. Overview of the business The board of directors’ report for Komplett Group (“Kom- plett” or “the Group”) embraces Komplett ASA (“the Parent Company” or “the Company”) with subsidiaries in Norway and Sweden. Business concept and location Komplett ASA is a public limited liability company organ- ised and existing under the laws of Norway pursuant to the Norwegian Public Limited Companies Act, following the resolution made in the annual general meeting on 12 May 2021 to convert the Company from a private limited liability company to a public limited liability company, effective 3 June 2021. At the same time the Company's name changed from Komplett AS to Komplett ASA. An initial public offering was completed in the rst half of 2021. The shares of Komplett ASA were listed on Oslo Børs in June with the stock ticker KOMPL. Canica AS remained the main shareholder after the IPO with 59.96 per cent shareholding as of 31 December 2021. Komplett is the leading online-rst player in the e-com- merce segment for electronics and IT products in the Nordic region. The Group is headquartered in Sandefjord, Norway, and has oces in Stockholm and Gothenburg to serve the Swedish and Danish markets. Komplett offers a broad range of products and services within categories such as components, gaming, brown goods, peripherals, white goods & home, handheld & ac- cessories and PC for consumers, the business market and the public sector. The online-rst concept implies that products are sold mainly through online channels supplemented with phys- ical retail stores. Eight different webshops constitute the main sales channel together with 18 physical retail stores in Sweden under the Webhallen brand. The business mod- el is ecient and scalable, supporting cost leadership and enabling a competitive product offering. The vision of Komplett is to be the «the obvious choice» for its customers, suppliers, employees and investors through competitive prices, great customer service, ecient supply chain and being the sole link between the producers and the end customers. The Group has industry-leading customer satisfaction, Page 9 / Annual Report 2021 a large structurally growing electronics and IT-products market with an ever-growing share of online shopping. Structural market growth is driven among other by contin- ued technology development and product innovation. The consumer market is experiencing rapid online migration on the back of an increasing preference for online shop- ping and introduction of exible and convenient delivery solutions. Strategy In 2018, Komplett launched its back to core strategy and went back to the roots as an online-rst retailer of elec- tronic goods and services. As an online-rst player, the Group has been able to optimise its e-commerce platform without balancing resources and compromising against a physical retail offering and strategy. As a result, Kom- plett is attractively positioned in the large and structurally growing Nordic electronics and IT-products market and benets from the growth impact of accelerating online migration. Komplett operates an ecient and scalable business model which has given rise to its costs leadership posi- tion and enables an attractive and competitively priced product offering. Komplett is deeply committed to delivering best in class customer experience supported by competitive prices, attractive delivery options and payment solutions, and sustainable business consepts. Komplett’s strategy is built on ve pillars: 1 Maintain a good cost position Komplett has a good cost position and considers the ability to continuously improve this position as a key lever for future success. Strategic initiatives for further improvements include the development of a new central warehouse in Sweden and a common IT/Tech platform for the Group, which will reduce storage cost and logistics operating expenses per unit sold. One common supply chain across all brands will allow for inventory optimisa- tion, improved response time and improved availability of goods, improving the customer value proposition. 2 Next-generation supply chain and IT as a growth ena- bler The Group's warehouse in Norway is designed to absorb up to approximately twice its current volume. The ware- house in Stockholm is near full utilisation and also has the potential to improve operations from increased automa- tion. Eciency is expected to improve on Group level by im- plementing common IT systems. This can be done by rst upgrading the IT platform utilised for operations under the Webhallen brand and later migrate the operations under the Komplett and Itegra brands onto the new system platform. It is therefore a priority to expand the Stockholm ware- house and install state-of-the-art automation solutions, similar to the warehouse in Norway, with the opportunity to later migrate Komplett and Itegra operations onto the same IT platform and gather relevant inventory, for all Swedish operations in the new warehouse in Sweden. This is expected to facilitate long-term growth and improved operational eciency. 3 Sustainability in everything we do Sustainability is becoming increasingly important among all key stakeholders and is therefore seen as instrumental to support a long-term viable business model. Komplett is focused on three key topics: circularity, inclusiveness and environmental footprint. Circularity: Komplett aims to give customers access to the latest technology, meeting their needs in a sustainable manner. As an example, Komplett launched the subscrip- tion service FLEX in 2021, as a way of promoting more sustainable consumption behaviours. Inclusion: All business areas engage in activities support- ing inclusiveness and equal opportunity in the society. Komplett also seeks to be a diverse workplace with high tolerance. Environmental footprint: Komplett seeks to help custom- ers make environmentally friendly choices and aims to reach zero emissions from their own operations, including outbound transportation, by 2025. To succeed, the Group will need to have traction from consumers with its new services to gain sucient scale to make its subscription initiatives protable. Another success factor is the ability to inuence partners to develop more environmentally friendly solutions within delivery and packaging. 4 Brand improvements and innovations Komplett aims to continuously improve its customer experience, product offering and go-to-market strategy, to secure further growth and strengthening of its market position. Strategic priorities include launching new services, expansion of the private label and Komplett PC offer- ing, improvement of the core gaming offering as well as launching new product groups and product categories. Initiatives to increase customer retention, customer life-time value and to reduce customer acquisition costs, include campaigns, digital marketing and personalisation to create an even better customer experience, putting customers at the centre of the daily operations. Page 10 / Annual Report 2021 wise been able to run its business more or less as normal, without any signicant increase in sickness leave or other Covid-19 related operational challenges. The board of directors is satised with Komplett’s ability to handle the pandemic crisis well and at the same time achieve signicant operational improvements under challenging circumstances. Income statement Total Group revenues amounted to NOK 11 043 million (NOK 9 866 million), an increase of 11.9 per cent from 2020. This growth was primarily driven by strong progress across the B2B and Distribution segments. In the B2C seg- ment, revenues continued to increase in 2021 following a record-high growth in 2020. This segment, specically the gaming and components categories, has been largerly hit by supply chain challenges on the back of Covid-19. Gross margin (total revenue – cost of goods) decreased from 13.4 per cent in 2020 to 13.2 per cent in 2021. The decrease of 0.2 percentage points was mainly driven by negative mix effects from the Distribution segment, with signicant sales growth at lower margins. The gross margin increased with 1.0 per cent in the B2B segment and with 0.3 per cent in the B2C segment. Employee benet expenses amounted to NOK 511 million (NOK 465 million). The increase of 9.9 per cent was largely explained by revenue growth of 11.9 per cent and yearly wage ination. Operating expenses excluding cost of goods and person- nel expenses increased from NOK 577 million in 2020 to NOK 582 million in 2021, an increase of 0.8 per cent driven by higher marketing spend combined with increased IT and rent cost. Total Group revenue increased propor- tionally more, by 11.9 per cent, which proves signicant improved eciency and great economy of scale. Operating prot (EBIT) increased by 33.5 per cent to NOK 369 million (NOK 276 million). EBIT margin increased to 3.3 per cent from 2.8 per cent in 2020. Prot before tax amounted to NOK 347 million (NOK 253 million). The prot is driven by revenue growth and increased business e- ciency. Komplett sees potential to improve protability from focus on pricing excellence. The go-to-market model will be further improved by strengthening the omni-channel offering in Sweden, which is expected to increase the value proposition for end-users. 5 Accelerate growth with M&A opportunities Komplett sees a strong rationale behind driving consol- idation within B2C electronic goods in the Nordics and perceives M&A as an important part of its growth strate- gy. Acquisitions may be utilised to strengthen the market position, to allow for further realisation of synergies across brands, and to accelerate the sustainability strate- gy, particularly within circularity. Financial review (All gures in brackets refer to the corresponding period or balance date in 2020, unless otherwise specied) The following nancial review is based on the consolidat- ed nancial statements of Komplett ASA and its subsidi- aries. The statements have been prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU as well as the Norwegian accounting legislation. In the view of the board, the income statement, the statements of comprehensive income, nancial position, changes in equity and cash ow and the accompanying notes provide satisfactory information about the opera- tions, nancial results and position of the Group and the Parent Company at 31 December 2021. Covid-19 The Covid-19 pandemic continued to impact many areas of society in 2021, with variable levels of restrictions through the year. Komplett saw continued positive revenue effects dur- ing parts of the year, but consumer demand was more subdued in periods without signicant Covid-restrictions. This was a direct consequence of consumers spending less time at home and more time and money on restau- rants, concerts and other social and cultural activities, travel and physical shopping. Still, the shift in shopping behaviour from physical to online shopping continued in 2021, with continued high demand for PC, gaming and other home entertainment product categories. Reduced production capacity and distribution constraints from suppliers has negatively impacted both Komplett and the entire industry during the year, disabling the shops to meet normal delivery times. Komplett has other- Page 11 / Annual Report 2021 their spending priorities when restrictions were lifted. Operating revenues for the B2C segment was NOK 6 382 million in 2021, an increase of 3.9 per cent from 2020. The year started with strong growth in the rst quarter before normalising in the second and third quarter. The fourth quarter was impacted by softer market conditions as well as supply constraints. For the year, revenues in Norway increased by 10.0 per cent, Sweden increased by 3.4 per cent and Denmark fell by 7.0 per cent. Gross prot was NOK 983 million, an increase from NOK 924 million in 2020. Gross margin increased to 15.4 per cent in 2021 compared to 15.1 per cent in 2020. Gross margin throughout the year followed normal seasonality with higher margins in the second and third quarter before decreasing in the fourth quarter as this quarter is charac- terised by more intense campaign activity. Employee benet expenses increased by 10.0 per cent in 2021, while other operating expenses and depreciations were more or less in line with 2020. Cost eciency was maintained with total operating expenses at 11.8 per cent of revenues, against 11.9 per cent in 2020. As a result, operating prot (EBIT) increased to NOK 230 million in 2021, up from NOK 194 million in 2020, which is an increase of 18.7 per cent. EBIT margin increased to 3.6 per cent in 2021 compared to 3.2 per cent in 2020. B2B nancial review Operating revenue in 2021 amounted to NOK 1 528 million, up from NOK 1 286 million in 2020. The solid 18.8 per cent growth made 2021 a record year for the B2B segment, mainly driven by growth in core product categories such as Handhelds and PCs. Norway and Sweden delivered growth of 15.1 per cent and 34.5 per cent, respectively for 2021 as a whole. The record-high operating revenue resulted from several factors such as a strong position among SME customers and available supply to deliver. Increase in average order value per customer also contributed to the growth in 2021. During 2021 a number of improvement activities have been performed to increase the competitiveness of the Group, whereof improved gross margin is the most impor- tant going forward. Financial position Komplett has strengthened its nancial position in 2021, and liquidity is good. Total credit facilities include an over- draft of NOK 500 million and SEK 100 million, in addition to a revolving credit facility of NOK 500 million. As of 31 December 2021, NOK 207 million of the overdraft facilities and NOK 400 million of the revolving credit facility were utilised. The liquidity reserve, including available cash of NOK 41 million, was NOK 534 million at the end of 2021 compared to NOK 606 million one year earlier. Net inter- est-bearing debt was NOK 566 million equalling a leverage ratio (NIBD / LTM EBITDA) of 1.3x at the end of 2021. At year end of 2020, the Group was cash positive with no inter- est-bearing debt. The equity ratio at the end of 2021 was 23.2 per cent compared with 33.5 per cent at the end of 2020. Cash ow Cash ow from operations was NOK 65 million (NOK 472 million). The decline in cash ow from operations was primarily a result of increased net working capital, due to increased levels of inventory and trade receivables, compared to a signicant reduction in net working capital in 2020. Cash ow from nance activities was NOK 36 million, representing a cash inow, compared with a net outow of NOK 430 million in 2020 due to a down payment of the bank overdraft. Cash ow used for investing activi- ties came to NOK 114 million (NOK 39 million), including the acquisition of Ironstone Holding. Net cash ow was nega- tive NOK 12 million compared to NOK 4 million in 2020. Segment information The business is organised in three reporting segments: B2C, B2B and Distribution. Additional information about these segments can be found on page 6 of this annual report. B2C nancial review The transformation from physical to online shopping continued to create high demand in 2021. Komplett’s B2C segment grew by 3.9 per cent, following historically high demand and 25.8 per cent growth in 2020 boosted by in- creased consumer demand during Covid-19 lock-down pe- riods. The competitive advantage of the online shopping channel was not as strong in 2021, as consumers changed Page 12 / Annual Report 2021 Gross prot amounted to NOK 194 million, up 16.5 per cent from 2020. Gross margins decreased to 6.2 per cent in 2021 compared with 6.8 per cent in 2020. The new distri- bution agreements primarily include a signicant share of products at lower gross margins but are well-suited for Komplett's infrastructure with low handling costs. Employee benet expenses dropped by 2.6 per cent to NOK 65 million, while other operating expenses increased by 2.9 per cent as a consequence of higher activity level. More ecient logistics and increased economies of scale from new distribution agreements lowered the total oper- ating expenses per centage from 4.8 per cent in 2020 to 3.7 per cent in 2021. Distribution recorded operating prot (EBIT) of NOK 79 million in 2021, up from NOK 51 million in 2020, which is an increase of 54.8 per cent. EBIT margin increased to 2.5 per cent in 2021 compared with 2.1 per cent in 2020. Risk factors and risk management Financial risks Komplett is exposed to nancial risks in different areas in- cluding currency risks. The aim is to mitigate the nancial risks as much as possible. The Group’s current strategy does not imply the use of nancial instruments. The currency risk is managed on an ongoing basis to match the sales price of the products against the develop- ment in purchase price including currency changes and by buying the currency at the same time the product arrives in the warehouse. This currency risk is an industry risk, and not a specic Komplett risk. This strategy of matching and changing sales prices com- bined with a high level of product turnover has historically shown to be the best mitigation to reduce currency risk. Credit risks New suppliers and business customers are credit evaluat- ed by the Group’s own credit department. The risk on sales to end consumers is mitigated by limiting the average order size and by customer prepayment. Liquidity risks Komplett continuously strives to improve working capital focusing on inventory management, current assets and liabilities. Improved working capital and protability shall contribute to strengthening the Group’s liquidity. At the end of 2021 the short-term interest-bearing debt was NOK 166 million, which is low related to the prot generated by the year. Gross prot was NOK 276 million, representing a growth of 25.9 per cent from 2020. Gross margin increased to 18.0 per cent in 2021 compared with 17.0 per cent in 2020. Gross margin throughout the year followed normal seasonality with margins at or above 18.2 per cent in all quarters except for the third quarter, which normally has somewhat lower margins from campaign activity. Operating expenses rose by 17.1 per cent, mainly as a consequence of the increased activity level and effect of the Ironstone acquisition. Employee benet expenses increased from NOK 48 million in 2020 to NOK 63 million in 2021. Other operating expenses, including depreciations, rose by 6.3 per cent to NOK 66 million. Total operating ex- penses relative to the operating revenue decreased from 8.6 per cent in 2020 to 8.4 per cent in 2021. Operating prot (EBIT) increased to NOK 146 million in 2021, up from NOK 109 million in 2020, which is an increase of 34.7 per cent. EBIT margin increased to 9.6 per cent in 2021 compared to 8.5 per cent in 2020. In the third quarter of 2021 Komplett acquired 65.1 per cent of the shares in Ironstone Holding AS. Ironstone ac- counts for NOK 27 million of the revenues, NOK 8 million of the gross prot and a loss of NOK 2 million on EBIT. Distribution nancial review The Distribution segment saw high demand and re- cord-high revenues and prot in 2021. Total revenues reached NOK 3 124 million and grew by 28.8 per cent from NOK 2 426 million in 2020. The segment grew in particular in the rst and the second quarter with 49.9 per cent as a result of new distribution agreements. Follow-on effects from the new distribution agreements as well as organic growth contributed to continued growth in the third and the fourth quarter. Page 13 / Annual Report 2021 Market risks Komplett Group provides products to consumers, busi- nesses and the public sector in Scandinavia. The demand situation in its main markets is correlated with the general economic development of each country. The Group sees considerable uncertainties in the development of relevant markets in 2022, both in terms of post Covid-19 effects and following the crisis in Ukraine. Russia's invasion of Ukraine in February 2022 caused a dramatic increase in energy costs. There is a risk that energy prices will stay elevated on continued uncertainty, which may in turn impact costs of raw material and other input factors. Higher energy prices may inuence con- sumer preferences and have an adverse impact on con- sumer spending, which could negatively impact demand for electronics products. The board of directors emphasises that signicant uncer- tainty exists in the assessment of future development. Directors' and ocers' insurance Komplett ASA has a board liability insurance with Risk- Point AS for the Group, including the parent company and its subsidiaries. The insurance covers the board mem- bers, CEO and members of the management team. The insurance comprises personal legal liabilities, including defense- and legal costs. Research and development The Group does not perform research and development activities beyond development activities connected to technical solutions and functionality on the Group’s web- stores. People and organisation At the end of 2021 the Group had 795 employees compared with 647 at the beginning of the year. This corresponds to 565 FTEs on average in 2021. Komplett is, during certain periods, using contracted per- sonnel mainly within warehouses, logistics and customer service. Over the course of the year, the Group relied on 297 temporary workers. Many of these were students helping out during weekends and summer holidays. The working environment is considered to be healthy among the hired workers, and 15 of these temporary staff mem- bers received permanent positions in the Group during 2021. Komplett has since the end of 2019 introduced a tool to follow the working environment on a weekly basis. The tool is based on input from employees and is evaluated on an ongoing basis both by employees and managers in addition to the Executive management. Further, the tool is based on a broader system for following up on health, safety and environment. Sick leave in 2021 was 4.4 per cent compared with 4.7 per cent in 2020. During 2021 no injuries were reported resulting in long term sick leave. There has not been any material damage during the year. For further information refer to the corporate responsibil- ity section included in this annual report on page 24 and in the Sustainability Report for 2021 available on the Group website www.komplettgroup.com. Activities on gender equality and non-discrimination Komplett Group is required to provide an annual equality statement describing the company's efforts to secure equal opportunities under section 26-a in the Norwegian Equality and Anti-Discrimination Act. The annual state- ment on equality is included as part of the Sustainability Report for 2021, available on the Group website www. komplettgroup.com. Environmental, social and governance The Group’s sustainability strategy is based on three pillars: Komplett Circular, Komplett Environment, and Komplett Tolerance. Komplett Circular is the path for developing new and cir- cular business concepts, focusing on recycling, durability, and reusability. A particular emphasis is put on minerals and materials used in electronics that have signicant environmental footprints. Komplett aims to develop meth- ods for salvaging these resources so that they can be reincorporated into the lifecycle of electronic products. The Komplett Environment principle serves as a guid- ance toward decreasing the environmental impact of the Group’s operations. This commitment is focused on re- ducing GHG emissions associated with the transportation of our products. Komplett intends to offer zero-emission deliveries to all customers by 2026. The Tolerance pillar consolidates how the Komplett Group Page 14 / Annual Report 2021 is committed to creating and upholding a healthy work- space where our employees feel included and valued. Further, the Group also emphasises the need to improve documentation and secure decent work standards among its suppliers through increased due diligence. The wider societal focus of “Komplett Tolerance” includes promoting digital inclusion in all parts of society. Komplett is required to report on its corporate responsi- bility and selected related issues under §3-3a and §3-3c of the Norwegian Accounting Act. The detailed reporting on all relevant topics can be found in the corporate responsiblity section on page 24 and in the Sustainability Report for 2021 available on www.kom- plettgroup.com. Corporate governance The board of directors recognises the importance of good corporate governance. The goal to ensure the protection of all shareholders’ interests and to ensure that the com- pany complies with high ethical and social standards. Komplett ASA has established a corporate governance policy in order to ensure a clear division of roles between the board of directors, the executive management and the shareholders. The policy is based on the Norwegian Code of Practice for Corporate Governance. The corpo- rate governance policy is published on the Komplett Group website, together with other relevant policy documents such as the investor relation policy, guidelines for remu- neration of executives and instructions for handling inside information. Komplett is subject to corporate governance reporting re- quirements under section 3-3b of the Norwegian Account- ing Act and the Norwegian Code of Practice for Corporate Governance, cf. section 4-4 on the continuing obligations of stock exchange listed companies. The Accounting Act may be found (in Norwegian) at www.lovdata.no. The Nor- wegian Code of Practice for Corporate Governance, which was last revised on 14 October 2021, may be found at www. nues.no. The annual statement on corporate governance for 2021 has been approved by the board of directors and can be found in a separate section on page 18 of this annual report of 2021. Events after 31 December 2021 On 9 February 2022, Komplett ASA and NetOnNet AB announced their intention to combine the two compa- nies with the purpose of strengthening their position as a leading online-rst electronics platform in the Nordic area with an aggregated revenue in 2021 of NOK 18.5 billion. The transaction supports Komplett’s strategic ambitions. It will allow for signicant economies of scale and is expected to enable cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with expected full effect within 24 months of the com- pletion of the transaction. Komplett will retain its strong nancial position and attractive dividend policy after the transaction. The transaction is expected to be completed during the rst half of April 2022. Going concern The board of directors rmly believes that Komplett Group has the ability to continue its operations in the foresee- able future and hence conrms that the accounts have been prepared on a going concern basis and that this as- sumption is appropriate at the date for the accounts, and that the Group, after the proposed dividend, has sucient equity and liquidity to full its obligations. Parent company results and allocation of net prot The Parent Company Komplett ASA has no employees and no commercial operations. Revenues, costs and prof- its are mainly recorded in the operational subsidiaries. Komplett ASA recorded prot before taxes of NOK 219 million in 2021, up from a loss of NOK 8 million in 2020. The improvement is related to group contributions from sub- sidiaries of NOK 241 million in 2021, in order to make cash available for dividend payment. The Company’s prot after taxes in 2021 was NOK 168 mil- lion compared with a net loss of NOK 12 million in 2020. The board proposes the following allocation of the net prot of NOK 168 million for the Parent Company: Transferred from other equity NOK -41 million Dividend NOK 210 million Following an evaluation, the board has concluded that the Group will have an equity and liquidity after paying the proposed dividend, which is acceptable in relation to the risks and scope of its activities. Outlook Looking ahead, Komplett anticipates the online migration to continue, and the Group is well positioned to continue to increase its share of the market. While the underlying drivers of the business remain strong, the Group expects the ongoing supply chain constraints to continue to Page 15 / Annual Report 2021 impact market dynamics also in 2022, especially within gaming and components. Komplett’s exposure is how- ever balanced by the natural hedge of its multi-channel business model. The ongoing invasion of Ukraine has dramatic conse- quences which we do not see the full extent of at the time of writing this report. Beyond the devastating human suffering, we must also expect economic consequences in the form of reduced demand as a result of higher energy prices. For 2025, the Group (excl. NetOnNet) targets revenue to exceed NOK 15 billion, with a gross margin around 15 per cent and an EBIT margin at approximately 5 per cent. Annual revenue growth by segment will vary from year to year. The ongoing supply chain constraints and com- ponents shortages are expected to continue in 2022, primarily impacting B2C growth. Komplett Group (excl. NetOnNet) expects annual opera- tional capital expenditures at the level of NOK 50 million. Additional investments in the level of NOK 400 million are expected for the period 2022-2024 to expand supply chain capacity and upgrade the Group's IT systems. The combination of NetOnNet and Komplett is expected to be completed in the second quarter of 2022. The trans- action supports Komplett’s strategic ambitions and is expected to allow for signicant economies of scale and enable cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with expected full effect within 24 months of the completion of the transac- tion. The combination will strengthen the two companies’ position as a leading online-rst electronics platform in the Nordic area with an aggregated revenue in 2021 of NOK 18.5 billion. Komplett will retain its strong nancial position and attractive dividend policy after the trans- action. A capital markets day for the combined Group is planned to take place during the third quarter. Supported by strong commercial execution and an ecient, scalable business model, Komplett Group will continue to capitalise on its position as the leading Nordic online rst retailer. Page 16 / Annual Report 2021 Statement from the board of directors We conrm to the best of our knowledge that the consolidated nancial statements for 2021 have been prepared in accordance with IFRS as adopted by the European Union, as well as additional information requirements in accordance with the Norwegian Accounting Act, that the nancial statements for the Parent Company for 2021 have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting practice in Norway, and that the information presented in the nancial statements gives a true and fair view of the assets, liabilities, nancial position and result of Komplett ASA and the Komplett Group for the period. We also conrm to the best of our knowledge that the Board of directors' report includes a true and fair review of the development, performance and nancial position of Komplett and the Komplett Group, together with a description of the principal risks and uncertainties that they face, has been prepared in accordance with the Norwegian Accounting Act §3- 3a. Sandefjord, 23 March 2022 Board of directors, Komplett ASA Nils K. Selte Jennifer Geun Koss Las Bjørn Thoresen Jo Olav Lunder Chair Director Director Director Sarah Willand Anders Odden Nora Elin Eidås Lars Olav Olaussen Director Worker director Worker director CEO Page 17 / Annual Report 2021 Komplett considers good corporate governance to be a prerequisite for value creation, trust from shareholders and adequate access to capital. In order to secure sound and sustainable corporate governance, Komplett considers it important to ensure good and healthy business practices, reliable nancial reporting and an environment of compliance based on applicable legislation and regulations across the Group structure. 1) Statement of policy on corporate gov- ernance Komplett is required to report on corporate governance under section 3-3b of the Norwegian Accounting Act and the Norwegian Code of Practice for Corporate Govern- ance. The Accounting Act may be found (in Norwegian) at www.lovdata.no. The Norwegian Code of Practice for Corporate Governance, which was last revised on 14 Octo- ber 2021, may be found at www.nues.no. This statement of policy will be an item of business at Komplett’s annual general meeting on 12 May 2022. The company’s auditor has assessed whether the information provided in this statement with regard to section 3-3b of the Accounting Act is consistent with the information provided in the annual nancial statements. The auditor’s statement is attached to this annual report. The board of directors at Komplett actively adheres to good corporate governance standards and will at all times ensure that Komplett complies with the requirements of section 3-3b of the Accounting Act and the Norwegian Code of Practice for Corporate Governance. This is done by ensuring that the topic of good governance is an inte- gral part of the decision-making process in matters dealt with by the board. Furthermore, the board assesses and discusses the principles annually, and has also considered this statement at a board meeting. Komplett’s Corpo- rate Governance Policy is structured in the same way as the Code of Practice, covers each point of the code and describes how Komplett complies with the code require- ments. 2) Activities Komplett’s objectives, as dened in its Articles of Associ- ation, are as follows: The objective of the company is trade in computer equip- ment, electronics and other goods and participate in other companies and businesses. In accordance with its objects clause, Komplett operates in several segments and countries. The Group’s core busi- ness is electronic consumer goods across the segments B2C, B2B and Distribution. The Group primarily operates in Norway and Sweden, but also has activities in Denmark. Komplett’s vision is to be “the obvious choice” for cus- tomers, suppliers, employees and society, and Komplett’s mission is "to develop complete solutions that make life easier." Komplett’s values are fundamental to our corpo- rate culture. Our values tell us how to work, how to treat each other and, not least, how we are perceived by the world around us. Komplett's values are "Precision", "Sim- plicity" and "Enthusiasm". The board of directors and executive management ensures good corporate governance by transparent and trustful cooperation between all parties involved with the Group and its business. This includes the Company's shareholders, board of directors and executive man- agement team, employees, customers, suppliers, and other business partners, as well as public authorities and society at large. The core objectives in achieving this are transparent communication, independence between stakeholders and equal treatment and rights for all of the Company’s shareholders. Komplett’s sustainability strategy is based on the prin- ciple of delivering enjoyable product life cycles, which is based on three main paths: Tolerance, by taking care of our employees, customers and suppliers. Circular, by contributing to a circular economy and Environment by reducing our emissions. 3) Equity and dividends The board of directors ensures that the company has an equity capital at a level appropriate to its objectives, strategy and risk prole, and continuously monitors the Group’s capital situation. As at 31 December 2021, Group equity totaled NOK 806 million. Komplett shall, at all times, have a clear and predictable dividend policy. Komplett targets stable growing divi- dends year-on-year, and a pay out ratio of 60-80 per cent of net prot adjusted for one-off and special items. The board of directors has proposed that a dividend of NOK 2.90 per share be paid out for the 2021 nancial year. Authorisations empowering the board of directors to increase the Company’s share capital or to purchase treasury shares are limited to dened purposes and are granted for a period no longer than until the next general Corporate governance Page 18 / Annual Report 2021 meeting may only be exercised for shares that have been entered in the shareholder register on the fth business day prior to the general meeting (record date). Share- holders are given the opportunity to vote on the election of every single candidate to an oce in the nomination committee and on the board of directors. The auditor and members of the board of directors and nomination com- mittee are present at general meetings. Under Norwegian law, only shares that are registered in the name of the shareholder may be voted. Shares that are registered in a nominee account must be reregistered in the VPS in order for the shareholder to be able to vote with the shares. Further information may be found in the notice of the general meeting and on Komplett’s website. Shareholders who are unable to attend the general meet- ing may vote in advance or by proxy. Komplett will appoint the board chair or meeting chair to vote for the sharehold- ers. The proxy form is designed in such a way that voting instructions can be given for each item of business that is to be considered. Both the notice of the general meet- ing and Komplett’s website provide further information regarding use of proxies and shareholders’ right to submit items of business for consideration at general meetings. Under Article 8, the rst paragraph, of the Articles of Association, the board of directors may decide that doc- uments concerning items of business to be considered at the general meeting are not to be sent to shareholders when the documents are made available on the compa- ny’s website. This also applies to documents which by law must be included in or attached to the notice of the general meeting. A shareholder may nonetheless ask to be sent documents pertaining to items of business to be considered at the general meeting. The provision in the Articles of Association departs from the general rule in Chapter 5 of the Public Limited Liability Companies Act which prescribes that the annual nancial statements, the report of the board of directors, the auditor’s report and the board of directors’ report on remuneration of the executive management pursuant to section 6-16b must be sent to all shareholders no later than one week prior to the general meeting. The Company facilitates that the general meeting can elect an independent chair of the meeting. The nomination committee chair and members of the board of directors are present at general meetings, but normally not the entire board. No items of business at general meetings have made this necessary to date. The board chair, the general manager and the heads of the various business areas are normally present in order to reply to any questions that may be raised. meeting. The general meeting is given the opportunity to vote on every purpose covered by the authorisation. Questions concerning increases in share capital must be submitted to the general meeting for decision. 4) Equal treatment of shareholders Komplett has one class of shares. Each share in the Com- pany carries one vote, and all shares carry equal rights. Each share has a nominal value of NOK 0.40. Further in- formation on voting rights at general meetings is provided under the section for general meetings. Any decision to waive the pre-emption rights of existing shareholders to subscribe for shares in a share capital increase, shall be justied by the common interest of the Company and the shareholders, as well as applicable equal treatment regulations. Where the board of directors resolves to issue new shares and deviate from existing shareholders' pre-emptive rights pursuant to an authorization granted to the board of directors, the stock exchange announcement issued in connection with the share issue shall also include a justi- cation for the deviation. The Company's transactions in treasury shares shall be carried out through Oslo Børs' trading platform at the prevailing trading price or by making a public offer to all shareholders. If the Company's shares suffer from weak liquidity, the board of directors shall take particular care even when making purchases and sales through the stock exchange, in order to ensure equal treatment of share- holders. 5) Freely transferable shares The shares of the Company are freely transferable and there are no limitations on any party's ability to own or vote for shares in the Company. No special limitations on transactions have been laid down in Komplett’s Articles of Association. 6) General meetings Komplett seeks to ensure that as many shareholders as possible are able to exercise their rights by participating in general meetings, and that the general meeting is an effective meeting place for shareholders and the board of directors. The annual general meeting is held every year before the end of May. Notices of general meetings and related documents are made available on Komplett’s web- site no later than 21 days prior to the date of the meeting. The nal date for giving notice of attendance is no later than ve days prior to the general meeting (notice of at- tendance date). The right to attend and vote at the general Page 19 / Annual Report 2021 7) The nomination committee Under the Articles of Association, Komplett has a nomi- nation committee that is elected by the general meeting. The nomination committee consists of three members, who are elected for a term of up to two years. The majority of the nomination committee shall be independent from the Company's board of directors and executive manage- ment. The general meeting elects the chair and members of the committee and determines its remuneration. The nomination committee members are Sverre Kjær (chair), Karin Bing Orgland and Nina Camilla Hagen Sørli. The com- mittee is tasked with submitting the following reasoned recommendations: Recommendation to the general meeting • recommend candidates for the election to the board of directors and the nomination committee, and • recommend a suitable remuneration for the members of the board of directors and the nomination committee. The nomination committee's recommendation of candi- dates to the board of directors shall ensure that the board of directors is composed to comply with legal require- ments and principles of corporate governance and that they represent a broad group of the Company's sharehold- ers. The Rules of Procedure for the nomination committee contain further guidelines for the preparation and imple- mentation of elections to the nomination committee and the board of directors, as well as criteria for eligibility, general requirements regarding recommendations, the number of members in the committee and their term of service, and detailed procedural rules for the work of the nomination committee. Information regarding the composition of the nomination committee is posted on Komplett’s website under “Investor Relations”. The composition of the nomination committee is intended to ensure that the interests of all the shareholders are served, and meets the requirement of the Norwegian Code of Practice for Corporate Governance as regards independence of the company’s management and board of directors. None of the members of the nomination committee are a member of the board of directors of Komplett ASA. Neither the general manager nor other senior executives are members of the committee. 8) The board of directors, composition and independence The composition of the board of directors is intended to serve the interests of all the shareholders and meet the company’s need for competence, capacity and diversity. The board’s composition meets the requirements of the Norwegian Code of Practice for Corporate Governance as regards board members’ independence of the company’s executive management, main shareholders and material business relationships. At least two of the board mem- bers are dened as non-independent of the company’s main shareholders. All the board members are dened as independent of the company’s executive management or material business relationships. There are few instances in which board members are disqualied from considering board matters. Representatives of the executive manage- ment are not members of the company’s board of direc- tors. Under Article 5 of Komplett’s Articles of Association, the company’s board of directors shall consist of between 3 and 9 members, according to the decision of the general meeting. There are no other provisions in the Articles of Association governing the appointment and replacement of board members. Under Norwegian law and in accordance with Komplett’s current system of corporate democracy, Group employ- ees have the right to elect two members of the board of directors of Komplett ASA. The board held a total of 10 meetings in 2021 and the at- tendance rate was 98.7 per cent. A description of the com- petence and background of the individual board members can be found on https://www.komplettgroup.com/about/ board-and-management. The directors are encouraged to hold shares in the Company. 9) The work of the board of directors The tasks of the board of directors are laid down in the Rules of Procedure for the board of directors, which govern the board’s responsibilities and duties and the administrative procedures of the board, including which matters are subject to board consideration and rules for convening and holding meetings. The board’s Rules of Procedures also contain rules regarding the general man- ager’s duty to inform the board about important matters and to ensure that board decisions are implemented. There are also provisions intended to ensure that compa- ny employees and other parties involved are adequately informed of board decisions, and see to it that the guide- lines for preparing matters for board consideration are followed. Other instructions to the board and clarication of its duties, authorisations and responsibilities in respect of the general management are provided through routine communication. The Rules of Procedure further establish that a board member must not take part in the consideration of or a decision on an issue that is of such importance to himself or herself or to any related party that the member must be considered to have an obvious personal or nancial interest in the matter. It is incumbent upon each board Page 20 / Annual Report 2021 member to consider on an ongoing basis whether there are matters which, from an objective point of view, are liable to undermine the general condence in that board member’s independence and impartiality, or which could give rise to conicts of interest in connection with the board of directors’ consideration of the matter. Such matters must be taken up with the board chair. According to the Komplett’s Code of Conduct, employees must on their own initiative inform their superior if they should recuse themselves from dealing with or if they have a conict of interest in connection with a matter, and consequently should not take part in considering such matters. The board of directors adopts an annual meeting and ac- tivity plan that covers strategic planning, business issues and oversight activities. Transactions between the Company and its shareholders, a shareholder's parent company, members of the board of directors, executive management or closely associated persons to any such party that are deemed material under the Norwegian Public Limited Liability Companies Act, are subject to approval by the general meeting. Furthermore, the board of directors is required to arrange for an inde- pendent auditor valuation of the transaction. The board of directors has established two permanent board committees, which are described in further detail below. These committees do not make decisions, but su- pervise the work of the company management on behalf of the board and prepare matters for board consideration within their specialised areas. In this preparatory process, the committees have the opportunity to draw on company resources, and to seek advice and recommendations from sources outside the company. The remuneration committee The remuneration committee members are Sarah Willand, Nils Kloumann Selte and Jo Olav Lunder. The composition of the committee meets the requirements of the Nor- wegian Code of Practice for Corporate Governance as regards independence, and all the committee members are considered to be independent of executive manage- ment. The mandate of the committee is set out in the Instructions for the remuneration committee and in brief is as follows: • review the remuneration and benets strategy for the members of the executive management • review the performance of the chief executive ocer (CEO) versus the adopted objectives and recruitment policies, career planning and management development plans; and • prepare matters relating to other material employment issues in respect of the executive management. The committee will otherwise deal with special questions relating to compensation for Group employees insofar as the committee nds that these questions concern mat- ters of particular importance for the Group’s competitive position, corporate identity, recruitment ability, etc. The audit committee The audit committee members are Lars Bjørn Thoresen and Jennifer Geun Koss. The composition of the commit- tee meets the requirements of the Norwegian Code of Practice for Corporate Governance as regards independ- ence and competence. The Nomination Committee’s rec- ommendation of candidates for election to the board con- tains information as to which board members satisfy the requirements as regards independence and competence to sit on the audit committee. The committee’s mandate is set out in the Instructions for the audit committee and in brief is as follows: • inform the board of directors of the outcome of the Com- pany's statutory audit and explain how the statutory audit contributed to the integrity of nancial reporting and what the role of the audit committee was in that process • monitor the Company's nancial reporting process and submit recommendations or proposals to the board of directors to ensure its integrity • monitor the effectiveness of the Company's internal quality control and risk management systems and, where applicable, its internal audit, regarding the Company's nancial reporting, without breaching its independence • monitor the statutory audit of the Group's annual and consolidated nancial statements, in particular, its per- formance, taking into account any ndings and conclu- sions by The Norwegian Financial Supervisory Authority • review and monitor the independence of the Company's statutory auditor, and in particular the appropriateness of the provision of non-audit services to the Company • be responsible for the procedure for the selection of the Company's statutory auditor and recommend the statuto- ry auditor to be appointed. The board of directors' evaluation Each year, the board of directors carries out an evalua- tion of its own activities and competence, and discusses improvements in the organisation and implementation of its work, both at an individual level and as a group, in relation to the goals that were set for its work. The results are made available to the nomination committee. Page 21 / Annual Report 2021 10) Risk management and internal con- trol The board of directors is responsible for ensuring a sound organisation of the business and management of the Group. This is done, among other things, through the Group's structure for monitoring nancial protability and eciency in the value chain. The executive management group wants to ensure operational and nancial follow-up and effective decision-making based on openness, clear communication and understanding of roles and responsi- bilities across the organisation. Komplett Group is subject to several risk areas, including market and competition risk, nancial risk, operation- al risk and cyber security. The board and the executive management are continuously monitoring the Group’s risk exposure and the Group constantly strives to improve its internal control processes. An active approach is taken to risk management, where an annual risk assessment and mitigation is presented and discussed with the Board. Management of each business unit is responsible for risk management and internal control to ensure: • identication and exploitation of business opportunities • goal-oriented and ecient operations • compliance with applicable laws and regulations • operations in accordance with governing policies and procedures, including ethical and corporate responsibility guidelines Governing documents, clarifying the standards that apply to the Group’s businesses, are available to all employees through the internal web portals. Further, the Group has during 2021 conducted an analysis to identify areas of improvement within compliance and ways of working. This is to ensure proper follow-up in the elds of personal data protection, sustainability in the supply chain, product preparedness and risk manage- ment. A pilot project is initiated to improve the code of conduct in the private label business unit. Risk management The Group’s risk management is centralized and intends to ensure that all signicant risks, including both operation- al and strategic risk areas, are identied, analysed and effectively followed-up by business units and functions. The Group controlling function is responsible for the risk management model, including: • presenting the Group’s consolidated risk matrix to the executive management group, the audit committee, and the board of directors • maintaining guidelines and templates for risk manage- ment and reporting A key objective of the enterprise risk management process is to highlight risk areas relevant for review by the board and the audit committee, and to facilitate their discussions of risk mitigating activities with executive management. All business units update their risk assessments on a reg- ular basis, to ensure proper reporting and follow-ups of risk indicators and associated risk mitigation measures. Environment, health and safety Risk identication is also an important tool in preventive environment, health and safety efforts. The Group is certied under ISO 14001:2015. The environmental impact from the business operations is estimated to be what is expected to be normal for these kinds of businesses. Komplett Group is compliant to relevant environmental acts and regulations and through partners the Group han- dle outdated ICT products and toxic waste. The nancial reporting processes Komplett Group prepares and presents its consolidated nancial statements in accordance with current interna- tional nancial reporting standards (IFRS). The nancial statements are prepared according to uniform principles, and all subsidiaries follow the same accounting principles as the parent company. Every month, each subsidiary reports its nancials to the Group reporting function using standardized templates and a general chart of accounts. The reporting is expand- ed in the year-end reporting process to meet various re- quirements for supplementary information. Financial data are consolidated and checked at several management levels, including monthly business reviews with business units. The Group provides the board of directors with monthly nancial reports and prepares quarterly reports that are made public. The audit committee and the external audi- tor review the quarterly and annual reports before they are approved by the board. 11) Remuneration of the board of direc- tors Remuneration of directors shall be reasonable and reect the board's responsibilities, expertise, time invested and the complexity of the business. All remuneration of the board of directors is disclosed in note 7 to Komplett ASA’s nancial statements. The note shows that remuneration of the directors is not linked to the Group’s performance and that no options have been issued to board members. Page 22 / Annual Report 2021 12) Remuneration of the executive man- agement group The board of directors has adopted clear and under- standable guidelines for the remuneration of executive management team. The guidelines are approved by the general meeting. The company’s remuneration principles shall be designed to ensure responsible and sustaina- ble remuneration decisions that support the company’s business strategy, long-term interests, and sustainable business practices. The board’s remuneration committee presents a recom- mendation concerning the terms and conditions for the CEO to the board of directors and monitors the general terms and conditions for other senior executives in the Group. The board assesses the CEO and his terms and conditions once a year. A description of the remuneration of the executive management and the Group’s compen- sation and benets policy, including the scope and design of bonus and share-price-related programmes, is given in the board of directors’ statement of guidelines for the remuneration of executive management and report; see note 7 to the Group consolidated nancial statements. The board of directors’ report is also made available to shareholders in a separate document pertaining to this item of business, together with the notice of the annual general meeting. 13) Information and communications Komplett seeks to ensure that its accounting and nancial reporting inspires investor condence. Komplett’s ac- counting procedures are highly transparent. The board of directors’ audit committee monitors company reporting on behalf of the board. Komplett strives to communicate actively and openly with the market. The company’s an- nual and quarterly reports contain extensive information on the various aspects of the company’s activities. The company’s quarterly presentations are webcast directly and may be found on Komplett’s website, along with the quarterly and annual reports under “Investor Relations”. Komplett aims to hold a Capital Markets Day at regular in- tervals, on which occasion the market is given an in-depth review of the Group’s strategic direction and operational development. All shareholders and other nancial market players are treated equally as regards access to nancial informa- tion. The Group’s investor relations department maintains regular contact with company shareholders, potential investors, analysts and other nancial market stakehold- ers. The board is regularly informed of this activity. The nancial calendar for 2022 may be found on Komplett’s website. 14) Takeovers The board of directors will not seek to hinder or obstruct any takeover bid for the company’s operations or shares. In the event of such a bid as discussed in section 14 of the Norwegian Code of Practice for Corporate Governance, the board of directors will, in addition to complying with relevant legislation and regulations, seek to comply with the recommendations in the Code of Practice. This in- cludes obtaining a valuation from an independent expert. On this basis, the board will make a recommendation as to whether or not the shareholders should accept the bid. There are no other written guidelines for procedures to be followed in the event of a takeover bid. The Group has not found it appropriate to draw up any explicit basic prin- ciples for Komplett’s conduct in the event of a takeover bid, other than the actions described above. The board of directors otherwise concurs with what is stated in the Code of Practice regarding this issue. 15) Auditor The board of directors has determined that the external auditor shall regularly report to the board. Every year, the external auditor presents to the board his assessment of risk, internal control and the quality of nancial reporting at Komplett, at the same time presenting his audit plan for the following year. The external auditor also takes part in the board’s discussions on the annual nancial state- ments. The board of directors ensures that relevant mat- ters may be discussed with the external auditor without the presence of the management. The external auditor is invited to all meetings of the board’s audit committee. Komplett has established guidelines for the right of the general management to use the external auditor for ser- vices other than auditing. Responsibility for monitoring such use in detail has been delegated to the audit com- mittee. Details of the company’s use and remuneration of the external auditor are disclosed in note 7 to the Group consolidated nancial statements. The general meeting is informed about the Group’s overall remuneration of the auditor, broken down in accordance with statutory requirements into remuneration for statutory auditing and remuneration for other services. In connection with the auditor’s participation in the audit committee and the board of directors’ consideration of the annual nancial statements, the auditor also conrms his independence. Page 23 / Annual Report 2021 As the Komplett Group continues to grow and develop, we strive to make sure that our business is aligned with the carrying capacity of both the environment and people. We aim to lead the way in making the electronic retail business more sustainable and adapt our operations to comply with new regulations and increased expectations from our stakeholders. A summary of the Group’s corporate responsibility and sustainability work is presented below, in reference to the Norwegian Accounting Act (§3-3a and §3-3c). Detailed in- formation about our sustainability work, results and plans, can be found in the Sustainability Report for 2021 on our website (www.komplettgroup.com). Corporate responsibility The Company has established delegation of authority guidelines, ethical and harassment guidelines, a General Data Protection Regulation (GDPR) policy, and more, in ad- dition to the employee handbook (including country-spe- cic versions). Komplett Group operates within well-known standards for quality and environmental management, and we are certied according to ISO 9001 and ISO 14001. In 2021 we started the work of reviewing and updating our code of conduct, to match our increased sustainability standards and commitment to environmental protection, as well as new regulations concerning human rights due diligence and transparency. Importantly, the updated code of conduct states clearer standards and expectations on activities affecting the natural environment, including GHG emissions, land use, and waste management. The improved code of conduct will also put more emphasis on expectations for business integrity and anti-corruption measures, as well as the importance of managing and monitoring suppliers. The Komplett Group is committed to complying with anti-corruption laws and regulations and to conducting our business activities openly and transparently, thus supporting efforts to ght corruption worldwide. Corrup- tion undermines legitimate business activities, distorts competition, jeopardises reputations, and exposes com- panies and individuals to great risk. We include guidance on anti-corruption in our ethical guidelines for employees, and any violations of these can lead to termination of employment. Development of new manuals and training programs for anti-corruption began in 2020. Further, plans to update our anti-trust and anti-corruption manual have been established. Employees are encouraged to report any possible vio- lations of laws and regulations, or possible violations of Komplett’s corporate social responsibility policy, in accordance with established whistle-blower routines. Violations can be reported anonymously, and alerts are protected from retaliation. In 2021 there were no reported cases of breaches of business conduct or corruption. Sustainability Our sustainability strategy is based on three pillars: Komplett Circular is our path for developing new and circular business concepts, focusing on recycling, durabil- ity, and reusability. A special emphasis is put on minerals and materials used in electronics, that have signicant environmental footprints. We aim to develop methods for salvaging these resources so that they can be reincorpo- rated into the lifecycle of electronic products. The Komplett Environment principle aims to guide us toward decreasing the environmental impact of our operations. This commitment is focused on reducing GHG emissions associated with the transportation of our products. We intend to offer zero-emission deliveries to all customers by 2026. The Komplett Tolerance pillar consolidates how the Komplett Group is committed to creating and upholding a healthy workspace where our employees feel included and valued. Further, we also emphasise the need to improve documentation and secure decent work standards among our suppliers through increased due diligence. In a wider societal perspective, “Komplett Tolerance” includes pro- moting digital inclusion in all parts of society. Komplett Circular As a leading online player in electronic retail, we want to contribute to solving relevant sustainability challenges in the industry. For us, it is important to take responsibility for the lifespan and disposal of our products. We do this by offering circular services, such as “buy-back” and leasing services and focus on simplifying the return of e-waste. We have clear ambitions to create a return concept that solves challenges in the return ow, specically around online shopping. Through our collaboration with Norsirk, we gain valuable insights into our waste management performance, and ideas for measures to further reduce waste. Norsirk works to develop new methods of reclaiming more electronics to Corporate responsibility Page 24 / Annual Report 2021 recycle a larger portion of materials. In 2021, we recycled 90.0 per cent of our waste, a 0.2 per cent decrease from 2020. We will work to improve this share in 2022. In 2021, our largest waste fractions were paper and card- board, wood, and general waste. All fractions are recycled, except for general waste, which is used for energy recov- ery. Komplett’s total waste amount for 2021 was approx- imately 1 254 tonnes; an increase of 151 tonnes, from 1 103 tonnes, in 2020. This year we also managed to collect better data on Komplett’s own electronic waste, resulting in a large increase from 2020, but a clearer view of the ex- tent. This is handled by Revac AS at their new facility, with a recycling rate of approximately 97 per cent. In May 2021, Komplett launched FLEX, a service that ena- bles customers to subscribe for a product for a period of two years, and then return it after use. This gives Kom- plett more control over the product life cycle and makes it simpler for the consumer to dispose of their products. It, therefore, supports our mission to develop complete solutions that make life easier. Today, FLEX represents approximately 10 per cent of sales in Norway and Swe- den. The aim is to grow Flex to 50 per cent of Komplett’s revenue. Webhallen launched the new buy-back program Revive in Sweden, in December 2021. The service enables a customer to bring their old mobile phone to Webhallen in exchange for a new one. Based on criteria set by Corpo- rate Mobile Recycling (CMR), Webhallen estimates the buy-back value of the phone. This value can be used for new purchases. The rst launch was primarily for mobile phones, but the service will open for other products, such as computers, in 2022. Komplett Environment Our most signicant climate impact stems from our scope 3 (indirect) emissions occurring within our value chain, with the most notable categories being transportation and purchased packaging materials. Use of fuel, for gener- ators and a few owned vehicles, are the sources for our scope 1 (direct) emissions, while electricity and heating to oces, warehouses, and stores are our main emission sources within scope 2 (indirect from generation of pur- chased energy). Our total emissions gure for 2021 was 4 539 tonnes CO2 equivalents (tCO2e), compared to 2 890 tonnes in 2020. The results from our carbon account conrm that transportation of goods remains our largest impact and challenge, representing approximately 70 per cent of our total emissions. In addition to increased business activity, we have in 2021 also been able to collect a lot more data with the help of our suppliers. The result is a signicant increase in reported emissions, especially from transpor- tation. These ndings indicate that we must continue to expand our work on mapping our emissions, as a means of reducing GHG emissions from transportation, in line with our stated ambitions. Our ambition to reduce emissions, established in our strategy and in our sustainability principle, Komplett Environment, requires us to make signicant adaptations to our operations. As an e-commerce actor, transport logistics is an extensive part of our business. Throughout 2021, we worked actively to pack service vehicles more effectively, as a means of reducing airspace in our cargo shipments. Our systems now lter by volume data to se- lect boxes with a maximum degree of lling when creating picking lists. Carton suggestions, in our digital packaging tool, have helped our staff complete this task. Recently, new minimum-sized boxes were also introduced for all parcel ows. By reducing airspace, we streamline the use of transportation, reducing our overall climate footprint. As we have established these new routines and tools with- in our logistics departments gradually throughout 2021, we will rst see the full effects of these initiatives in our carbon account for 2022. Komplett Tolerance In 2021, our company consisted of a total of 795 em- ployees compared with 647 at the beginning of the year. Fourteen nationalities are represented in the organisa- tion. Throughout 2021, Komplett Group welcomed 135 new employees, 87 men and 48 women. The turnover rate de- creased slightly in 2021, from 18.0 per cent to 17.8 per cent. Although it is a small decrease, we are very encouraged by this development. In reference to the Norwegian Equality and Discrimination Act, the gender distribution in Komplett in 2021 were 26.6 per cent female and 73.4 per cent men. In comparison to 2020, this is an 8.0 percentage points increase of female employees. The gender imbalance is due to the fact that several departments, e.g. warehouse and logistics, are currently more heavily male dominated. However, the imbalance varies between departments; in some areas of our operations, particularly among administrative posi- tions, women and men are equally represented. Providing an open, inclusive, safe, and respectful work- place, where diversity is valued, is fundamental within the strategic principle Komplett Tolerance agenda. Any discrimination and harassment on the grounds of gender, national origin, ethnicity, language, sexual orientation, age, and religious and political philosophy is not tolerated in our organisation. Zero incidents of discrimination were reported in 2021. Our warehouse routines and mitigation efforts are regularly assessed to secure the safety and welfare of Page 25 / Annual Report 2021 employees. Non-conformities are reported and managed, and measures are taken to prevent similar incidents in the future. During 2021, no injuries were reported. This is a reduction from 12 injuries in 2020, which is a very positive development that we aim to uphold. Sick leave for the organisation was 4.4 per cent in 2021, down from 4.7 per in 2020. We are very satised with the improvement in Komplett in Norway and Sweden. Web- hallen experienced an increase in sick leave, from 5.3 per cent in 2020 to 7.0 per cent in 2021, due to the challenges of manning physical stores during the Covid-19 pandemic. The work to limit sick leave will continue in 2022, and we hope that the effects of the pandemic on our employees and operations will diminish. Page 26 / Annual Report 2021 Komplett aims to be an attractive investment for shareholders, delivering a competetive return through sustained protable growth and a consistent dividend policy. Komplett ASA (KOMPL) is a public limited liability company organised and existing under the laws of Norway pursu- ant to the Norwegian Public Limited Companies Act. The Company was listed on the Oslo Stock Exchange on 21 June 2021. Komplett has only one class of shares, and in accordance with the Norwegian Public Limited Companies Act, all shares will provide equal rights in the Company. Each of the Company's shares carries one vote. Komplett's market capitalisation was NOK 4.9 billion at 31 December 2021. Share price The graph below shows Komplett's share price compared to the Oslo Stock Exchange Benchmark Index. Komplett listed on the 21 June 2021 at a share price of NOK 60 per share. The share closed at NOK 67.90 on 31 December 2021. The highest closing price was NOK 70.10 and the low- est closing price was NOK 53.78 1 050 1 070 1 090 1 110 1 130 1 150 1 170 1 190 1 210 1 230 1 250 50 55 60 65 70 75 Jun-21 Jul-21 Aug-21 Sep-21 Oct-21 Nov-21 Dec-21 KOMPLETT OSEBX GR Share information Dividend policy Komplett is targeting stable growing dividends year-on- year, and a dividend payout ratio of 60 to 80 per cent of net prot adjusted for non-recurring or special items. Shareholders At 31 December 2021 Komplett had 2 726 shareholders. Canica Invest AS was the majority shareholder with 60 per cent of the shares. The top 20 shareholders own 89 per cent of the shares. # Shareholder # of shares Percentage 1 Canica Invest AS 43 325 517 59,96 2 Folketrygdfondet 2 941 273 4,07 3 The Northern Trust Comp, London Br 2 800 000 3,88 4 Morgan Stanley & Co. Int. Plc. 1 734 708 2,40 5 The Ba nk of New York Mellon SA/NV 1 613 297 2,23 6 BNP Paribas Securities Services 1 338 034 1,85 7 UBS AG 1 309 852 1,81 8 Verdipapirfondet Holberg Norge 1 250 000 1,73 8 Verdipapirfondet Holberg Norden 1 250 000 1,73 10 Citibank, N.A. 1 070 285 1,48 11 UBS Europe SE 912 041 1,26 12 Verdipapirfondet Storebrand Norge 702 885 0,97 13 Skandinaviska Enskilda Banken AB 700 000 0,97 14 Citibank, N.A. 695 157 0,96 15 Sole Active AS 652 439 0,90 16 R og L Invest AS 499 215 0,69 17 Mustad Industrier AS 489 206 0,68 18 Verdipapirfondet Pareto Investment 475 000 0,66 19 The Bank of New York Mellon SA/NV 433 000 0,60 20 Nia n AS 420 473 0,58 Total 20 largest shareholders 64 612 382 89,42 Page 27 / Annual Report 2021 Financial statements and notes - Komplett Group Financial statements and notes - Komplett Group Consolidated statement of prot and loss 28 Consolidated statement of nancial position - Assets 29 Consolidated statement of nancial position - Equity and Liabilities 30 Consolidated statement of cash ows 31 Consolidated statement of changes in equity 32 Notes disclosure to the consolidated nancial statements 2021 33 Financial statements and notes - Komplett ASA Statement of prot or loss 64 Statement of nancial position - Assets 65 Statement of nancial position - Equity and Liabilities 66 Statement of cash ows 67 Notes disclosure to the nancial statements 2021 68 Page 28 / Annual Report 2021 Consolidated statement of profit and loss For the year ended 31 December 2021 Amounts in NOK million Note 2021 2020 Operating revenues Revenues from sale of goods 10 903 9 765 Other operating income 140 101 Total Operating income 6 11 043 9 866 Operating expenses Cost of goods sold 3,15 -9 581 -8 547 Employee benet expenses 7 -511 -465 Depreciation and amortisation expense 3,11,12,19 -129 -137 Other operating expenses 3,7,19,21 -453 -440 Total operating expenses -10 674 -9 589 OPERATING PROFIT 369 276 Finance income and expenses Share of post-prots from equity accounted investments 13 3 2 Finance income 8 3 6 Finance expenses 3,8,19 -28 -31 Net nance income and expenses -22 -24 PROFIT BEFORE TAX 5 347 253 Tax expense 9 -48 -32 PROFIT FOR THE YEAR 300 221 Other comprehensive income Items that will or may be reclassied to prot or loss: Exchange gains arising on translation of foreign operations -14 9 TOTAL COMPREHENSIVE INCOME 286 230 Prot for the year attributable to: Non-controlling interests - - Owners of the parent 300 221 300 221 Total comprehensive income attributable to: Non-controlling interests - - Owners of the parent 286 230 286 230 Earnings per share (basic an diluted) - in NOK 10 -33,14 5,20 * adjusted for the 1 to 5 split retrospectiverly (se note 11) Page 29 / Annual Report 2021 Consolidated statement of financial position - Assets For the year ended 31 December 2021 Amounts in NOK million Note 31/12/2021 31/12/2020 NON-CURRENT ASSETS Non-current nancial assets Goodwill 11 433 358 Software 11 113 113 Other intangible assets 11 73 58 Total intangible assets 620 529 Property, plant and equipment Right-of-Use assets 2,3,19 253 255 Leasehold improvements 12 3 3 Machinery and xtures 12 25 34 Total property, plant and equipment 281 291 Other non-current assets Deferred tax asset 9 25 32 Investments in equity-accounted associates 13 11 9 Other receivables 4,14,19 34 44 Total other non-current assets 70 85 TOTAL NON-CURRENT ASSETS 971 905 CURRENT ASSETS Inventories Inventories 15 1 305 880 Total inventories 1 305 880 Current receivables Trade receivables - regular 4,14 676 491 Trade receivable from deferred payment arrangements 4,14 130 152 Other current receivables 4,14,19 315 230 Prepaid expenses 31 28 Total current receivables 1 152 900 Cash and cash equivalents Cash and cash equivalents 4,16 41 54 Total Cash and cash equivalents 41 54 TOTAL CURRENT ASSETS 2 498 1 834 TOTAL ASSETS 3 469 2 739 Page 30 / Annual Report 2021 Amounts in NOK million Note 31/12/2021 31/12/2020 EQUITY Share capital 17 29 29 Share premium 17 1 075 1 075 Other equity -298 -187 TOTAL EQUITY 806 917 LIABILITIES Non-current liabilities Provisions and other liabilities 49 - Long-term loans 4,20 400 - Non-current lease liabilities 3,19,20 230 236 Total non-current liabilities 679 236 Current liabilities Short-term loans 4,16,22,23 207 48 Trade payables 4 1 124 934 Public duties payable 4 293 247 Current income tax 9 68 41 Current lease liabilities 3,19 80 82 Other current liabilities 4,20,21 212 233 Total Current liabilities 1 984 1 586 TOTAL LIABILITIES 2 663 1 821 TOTAL EQUITY AND LIABILITIES 3 469 2 739 Sandefjord, 23 March 2022 Board of directors, Komplett ASA Nils K. Selte Jennifer Geun Koss Lars Bjørn Thoresen Jo Olav Lunder Chair Director Director Director Sarah Willand Anders Odden Nora Elin Eldås Lars Olav Olaussen Director Worker director Worker director CEO Consolidated statement of financial position - Equity and Liabilities For the year ended 31 December 2021 Page 31 / Annual Report 2021 Consolidated statement of cash flows For the year ended 31 December 2021 Amounts in NOK million Note 2021 2020 Cash ows from operating activities Prot before income tax 347 253 Depreciation and amortisation expense 11,12 129 137 Long-term incentive program 5 - Payment received on nance lease receivable 19 10 9 Interest on nance lease receivable 8,19 2 2 Share of post-tax prots from equity accounted investments 13 -3 -2 Net nance items 8 25 21 Changes in deferred payment arrangements receivables 14 22 11 Changes in inventories, trade payables and trade receivables 15 -423 -36 Currency effects -9 2 Other changes in accruals -39 75 Net cash ows from operating activities 65 472 Investing activities Investments in property, plant and equipment 11,12 -56 -39 Acquisition of subsidiary, net of cash acquired 3 -59 - Dividend from associated company 1 - Net cash used in investing activities -114 -39 Financing activities Proceeds from loans and borrowings 20,22 400 - Changes in bank overdrafts 22 155 -324 Principal paid on lease liabilities 19 -72 -72 Interest paid on lease liabilities 8,19 -14 -14 Net Interest paid on loans and overdrafts 8 -13 -10 Distributions to owners -420 -10 Net cash (used in)/from nancing activities 36 -430 Net increase in cash and cash equivalents -12 4 Cash and cash equivalents at beginning of year 16 54 50 Cash and cash equivalents at end of year 16 41 54 Page 32 / Annual Report 2021 Consolidated statement of changes in equity For the year ended 31 December 2021 Other equity Amounts in NOK million Share capital Share premium Other equity Foreign currency changes Total equity At 1 January 2020 29 1 075 -409 -7 688 Prot for the year 221 221 Other comprehensive Income 9 9 Total comprehensive Income for the year - - 221 9 230 Other changes -0 -0 Contributions by and distributions to owners -0 - -0 At 31 December 2020 29 1 075 -189 2 917 At 1 January 2021 29 1 075 -189 2 917 Prot for the year 300 300 Other comprehensive Income -14 -14 Total comprehensive Income for the year - - 300 -14 286 Long-term incentive program 2 2 Dividend/Group contribution -400 -400 Contributions by and distributions to owners - - -398 - -398 At 31 December 2021 29 1 075 -287 -11 806 Page 33 / Annual Report 2021 Notes disclosure to the consolidated financial statements 2021 Note 1 General information and basis for preparation Note 2 Critical accounting estimates and judgements Note 3 Accounting policies Note 4 Financial instruments - risk management Note 5 Segment information Note 6 Revenues from contracts with customers Note 7 Employee benet expenses and audit fees Note 8 Finance income and expenses Note 9 Income tax Note 10 Earnings per share Note 11 Intangible assets Note 12 Property, plant and equipment Note 13 Investments in associates Note 14 Trade and other receivables Note 15 Inventories Note 16 Cash and cash equivalents Note 17 Share capital and share holders Note 18 Share option plan Note 19 Leases Note 20 Loans and borrowings Note 21 Provision for service and guarantee obligations Note 22 Notes supporting the cash ows Note 23 Pledges and guarantees Note 24 Related party transactions Note 25 Consolidated companies Note 26 Business combinations Note 27 Events after the reporting date Page 34 / Annual Report 2021 NOTE 1 General information and basis for preparation Komplett ASA is a public company, registered in Norway, listed on the Oslo Stock Exchange and head quartered at Østre Kullerød 4, 3241 Sandefjord, Norway. Komplett, with its 8 web-shops, is a leading player in e-commerce in the Nordic region The bulk of products offered are in the ehe field of electronics. The width of the number of product groups varies slightly in the different stores. The risk prolofile is relatively similar, but the return proofile varies depending on the main focus of the indi- vidual store. The Group has established distribution networks based on deliveries to the various markets from warehouses in Norway and Sweden. The following describes the main accounting policies used in the preparation of the consolidated nancial statements. These policies are applied in the same way in all periods presented, unless otherwise stated in the description. These nancial statements were approved by the board of direc- tors on 24.03.2022, and it will be submitted for nal approval of the general meeting on 25.03.2022. Basis for preparations The consolidated nancial statements have been prepared in accordance with applicable international standards for nancial reporting (IFRS) and interpretations from the IFRS Interpretation Committee (IFRIC), as approved by the EU. The consolidated nancial statements are based on a modied historical cost principle. The exceptions from historical cost relates to nancial assets and liabilities at fair value through prot or loss. The accounting principles used are consistent with last year. These consolidated nancial statements have been prepared on the as- sumption of going concern. NOTE 2 Critical accounting esti- mates and judgements The preparation of nancial statements in accordance with IFRS requires management to make some assessments, calculate esti- mates and set assumptions that affect the amounts reported in the nancial statements and in the corresponding notes. Management bases its estimates and assessments on historical experience, as well as a number of other factors considered relevant in the situa- tion. This in turn forms the basis for the assessments made related to the carrying amount of assets and liabilities where this is not obviously available from other sources. The main areas of assess- ment and estimation with uncertainty on the balance sheet date, which have a signicant risk of creating signicant change in the carrying amount of assets and receivables during the next nancial year, apply to: Impairment of intangible assets including goodwill The Group's management assesses whether there is an impairment of an intangible asset when indicators indicate that the book value cannot be recovered. The determination of recoverable amounts of intangible assets is based in part on management's assessment, including estimates of future performance, the asset's revenue generating capacity, as well as assumptions about future market conditions. Changes in the situation, as well as in management's assessment and assumptions, can cause losses as a result of im- pairments during the relevant periods. The Group as a minimum performs an annual impairment test of goodwill and other intangible assets that are not depreciated. The test is bases on calculations of the value in use of the cash-gener- ating units that have goodwill associated with them. To estimate the value of use, the Group must estimate expected future cash ow from the cash ow-generating units, as well as select a suitable discount rate for the current value calculation of cash ow. Software Cost of acquiring software including expenses to get the applica- tions operational are capitalised as an intangible asset according to the accounting principles discussed below. Whether the cost of buying and developing software shall be capitalised as an intangible asset is based on managements assumptions about future cash ow related to the acquisition, discount rate and useful life. The Group's assessment is that the economic life of the software is from 3 - 7 years, and the carrying amount is depreciated accordingly. Other intangible assets Other intangible assets mainly relates to brand names and customer relationships. These asset has been acquired in business combi- nations. Customer relationships are amortised over the expected economic life. Brand names are considered to have an indenite economic life and are not amortised, but are instead tested annually for impairment. Provision for service and warranty obligation The cost of service and warranty repairs for self-produced PCs depends on several parameters, such as time spent per repair, the share of products sold returned and how the return rate develops through the service and warranty period. These parameters are based on historical experience and are constantly reassessed. There may be estimate uncertainty because the parameters change over time. Provision for obsolescence The group makes provision for obsolescence. These provisions are based on a detailed assessment of the age distribution of inventory items and whether the goods are part of an active or expired product range. Write-down for obsolescence is made when the cost of the goods is higher than the expected net sales value. These provisions are estimate-based and require in-depth knowledge about goods and markets Page 35 / Annual Report 2021 Recoverable amount for trade receivables including for receiva- bles deferred payment The recoverable amount for trade receivables and receivables for deferred payment is based on assumptions about the development in the debtor’s ability to pay. In the calculation, historical experience is used as an estimate for these parameters. To the extent that his- torical data is missing, the assumptions has been based on industry experience. NOTE 3 Accounting policies NOTE 3.1 Accounting policies Consolidation policies Subsidiaries are all entities (including structured entities) that the Group has control over. Control over an entity occurs when the Group is exposed to variability in the return from the entity and has the ability to inuence that return through its power over the entity. Subsidiaries are consolidated from the day control is obtained and de consolidate when control ceases. The consolidated nancial statements are prepared according to uniform principles. Intercompany transactions and balances, including internal prots and unrealised gains and losses, have been eliminated. The subsidiaries follow the same accounting policies as the parent company. Associated companies are entities where the Group has signi- cant inuence, but not control (normally at a stake of between 20 per cent and 50 per cent). Associates are accounted for according to the equity method in the consolidated nancial statements. The groups share of prot or loss is included in the consolidated nancial statements from the time of acquisition and is classied as nancial income. The share of prot or loss is added to (or subtract- ed) the carrying amount of the investments in shares in associated companies. Business combinations and goodwill When acquiring a business, the acquisition method is used. The consideration that is provided is measured at the fair value of trans- ferred assets, liabilities incurred and issued equity instruments. Included in the consideration is also the fair value any contingent consideration agreement. Identied assets, liabilities and contin- gent liabilities are recognised at fair value at the transaction date. Non-controlling interests in the acquired entity are measured from a business combination to business combination either at fair value or to their share of the fair value of acquired entity's net assets. Transaction cost related to acquisitions are expensed when they are incurred. If business combinations take place in several stages, ownership from previous purchases shall be revalued at fair value when control is obtained with any changes in fair value recognised in prot or loss. Contingent consideration is measured at fair value at the transac- tion date. Subsequent changes in the fair value of the contingent consideration is recognised through prot or loss. For contingent consideration classied at equity is recognised in equity and are not subsequently remeasured. If the consideration (including any non-controlling interests and fair value of previous holdings) exceeds the fair value of identiable assets and liabilities in the acquisition, the excess amount is recog- nised as goodwill. If the consideration (including any non-controlling interests and fair value of previous holdings) constitutes less than the fair value of net assets in the subsidiary as a result of a purchase on favourable terms, the difference is recognised as a gain in the income statement. Transactions with non-controlling owners in subsidiaries that do not result in loss of control are treated as equity transactions. In the event of further purchases, the difference between the consider- ation and the shares' proportional share of the carrying amount of net assets in the subsidiary is recognised against the equity of the parent company's owners. Gains or losses on sale to non-controlling owners are recognised accordingly in equity. Goodwill and other intangible assets with undefended economic life are tested annually or more frequently if events or changes in cir- cumstances indicate a potential for impairments. In connection with this, the intangible assets are allocated to cash ow-generating units or groups of cash ow-generating entities that are expected to benet from the synergies of the business association. Each unit or group of units where goodwill has been allocated represents the lowest level of the enterprise where goodwill is followed up for internal management purposes. Goodwill is followed up by operating segment. Functional currency and presentation currency The Group's presentation currency is NOK. This is also the parent company's functional currency. Subsidiaries with other functional currencies are converted into the balance sheet date's exchange rate for balance sheet items, and prot and loss items are convert- ed into transaction prices. As an approach to transaction courses, monthly average rates are used. Translation differences are recog- nised in equity. Foreign currency Transactions in foreign currency are converted at the exchange rate at the time of the transaction. Monetary items in foreign currency are converted into NOK using the balance sheet date's exchange rate. Non-monetary items measured at historical exchange rates expressed in foreign currency are converted into NOK using the exchange rate at the time of the transaction. Gains and losses from exchange rate changes are recognised in the income statement on an ongoing basis during the accounting period. Page 36 / Annual Report 2021 Currency gains and losses related to purchase of inventory are clas- sied as cost of goods. This consists mainly of accounts payable in foreign currency. Assets and liabilities in foreign operations are converted into NOK using the balance sheet date's currency rate. Revenues and expens- es in foreign operations converted into NOK using average prices. The translation difference because of the conversion of foreign operations are recognise in other comprehensive income. Accumu- lated translation differences in equity are re circled into prot and loss upon divestment of foreign operations. Revenues from contracts with customer Revenue from sale of goods is recognised in the income statement when the product is delivered to the customer. Revenues are recog- nised net of discounts and vat. The group's policy regarding the right of return when selling to end users varies from store to store and from country to country depending on the markets where they operate. Number of days changes periodically throughout the year and the different seasons and varies from 14 to 60 days. Estimated returns are treated as a reduction of revenues. Provisions for estimated returns is based on past experiences and recognised at the time of sale. Payment on sales to private individuals is most often made using credit cards, credit sales handled by third parties or the application of the Group's nancing solution. Credit card fees are recognised in the income statement as other operating expenses. Payment on sales to corporate customers may also be made after ordinary invoice credit based on the company's credit rating. Webhallen offers deferred payment to customers. The income from this includes forward fees, establishment fees and interest income. The income is accrued based on effective interest rates and clas- sied as operating income. In addition, Komplett offers nancing solution via partner Komplett Bank which generates commission income. Komplett also offers the opportunity buy insurance through a partner when purchasing specic products. From which Komplett receives a commission based on insurance policies sold. Classication of balance sheet items Current assets and current liabilities include items due for payment within a year after the balance sheet date, as well as items that relate to the operating cycle. Other items are classied as xed asset/long-term liabilities. Receivables from deferred payment are considered as being part of the operating cycle, and consequently classied as a current asset. Financial assets The Group classies its nancial assets into one of the categories discussed below, depending on the purpose for which the asset was acquired. Other than nancial assets in a qualifying hedging relationship, the Group's accounting policy for each category is as follows: Fair value through prot or loss This category comprises in-the-money derivatives and out-of-mon- ey derivatives where the time value offsets the negative intrinsic value (see "Financial liabilities" section for out-of-money derivatives classied as liabilities). They are carried in the statement of nan- cial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income in the nance income or expense line. Other than derivative nancial instruments which are not designated as hedging instruments, the Group does not have any assets held for trading nor does it voluntarily classify any nancial assets as being at fair value through prot or loss. Amortised cost These assets arise principally from the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of nancial assets where the objective is to hold these assets in order to collect contractual cash ows and the contrac- tual cash ows are solely payments of principal and interest. They are initially recognised at fair value plus transaction costs that are directly attributable to their acquisition or issue, and are subse- quently carried at amortised cost using the effective interest rate method, less provision for impairment. Impairment provisions for current and non-current trade receiva- bles are recognised based on the simplied approach within IFRS 9 using a provision matrix in the determination of the lifetime expect- ed credit losses. During this process the probability of the non-pay- ment of the trade receivables is assessed. This probability is then multiplied by the amount of the expected loss arising from default to determine the lifetime expected credit loss for the trade receiva- bles. For trade receivables, which are reported net, such provisions are recorded in a separate provision account with the loss being recognised in prot or loss. On conrmation that the trade receiv- able will not be collectable, the gross carrying value of the asset is written off against the associated provision. The Group's nancial assets measured at amortised cost comprise trade and other receivables and cash and cash equivalents in the consolidated statement of nancial position. Cash and cash equivalents includes cash in hand, deposits held at call with banks, and – for the purpose of the statement of cash ows bank overdrafts. Bank overdrafts are shown within loans and borrowings in current liabilities on the consolidated statement of nancial position. Part of the bank deposits have limitations on disposition rights, see note 16. Financial liabilities The Group classies its nancial liabilities into one of two catego- ries, depending on the purpose for which the liability was acquired. Page 37 / Annual Report 2021 Other than nancial liabilities in a qualifying hedging relationship (see below), the Group's accounting policy for each category is as follows: Fair value through prot or loss This category comprises out-of-the-money derivatives where the time value does not offset the negative intrinsic value (see "Financial assets" for in-the-money derivatives and out-of-mon- ey derivatives where the time value offsets the negative intrinsic value. They are carried in the consolidated statement of nancial position at fair value with changes in fair value recognised in the consolidated statement of comprehensive income. The Group does not hold or issue derivative instruments for speculative purpose but for hedging purposes. Other than these derivative nancial instruments, the Group does not have any liabilities held for trading nor has it designated any nancial liabilities as being at fair value through prot or loss. Other nancial liabilities Other nancial liabilities include the following items: Bank borrowings and the Group's redeemable preference shares are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of - nancial position. For the purposes of each nancial liability, interest expense includes initial transaction costs and any premium payable on redemption, as well as any interest or coupon payable while the liability is outstanding. - Liability components of convertible loan notes are measured as described further below. - Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at amortised cost using the effective interest method. Inventories Inventory is reported at the lower of cost and net realisable value. The costs comprise all costs of purchase and include expenditures directly linked to getting the goods to the warehouses. Net realisa- ble value is the estimated sales price (future selling price) less the estimated transaction costs. The portion of the Group's inventory that is valued at net realisable value is mainly related to products that have been returned from customers. The estimated sales price of these products is assessed and calculated on the basis of historical experience, as well as the condition (quality state) of the products and which discount that needs to be given to be able to re-sell the relevant products. The discount is set based on the past experience with similar products and quality following the return. In addition, estimated transaction costs, as explained below, are deducted. When assessing realisable the value of inventory, the Group con- siders its estimated expenses to sale of goods, which primarily comprise estimated transaction costs, such as payment fees (for debit and credit card payment processing, etc.), marketing costs and distribution costs. Other (unsold) products are valued at costs after deduction of pro- visions for obsolescence. Foreseeable obsolescence is assessed continuously. See note 2 section "Provision for obsolescence" The group’s inventories consist solely of goods purchased for resale. Property, plant and equipment Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributa- ble costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The corresponding liability is recognised within provisions. Depreciation on assets under con- struction does not commence until they are complete and available for use. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their expected useful economic lives. It is provided at the following rates: - Freehold buildings - 2% per annum straight line - Plant and machinery - 15%-25% per annum straight line - Fixtures and ttings - 20% per annum straight line - Computer equipment - 33% per annum straight line - Motor vehicles - 33% per annum straight line Externally acquired intangible assets Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful economic lives. Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques. The signicant intangibles recognised by the Group and their useful economic lives are as follows: - Trade names indenite - Non-contractual customer relationships 5 years Goodwill Goodwill represents the excess of the cost of a business combina- tion over the Group's interest in the fair value of identiable assets, liabilities and contingent liabilities acquired. Cost comprises the fair value of assets given, liabilities assumed and equity instruments is- sued, plus the amount of any non-controlling interests in the acquire plus, if the business combination is achieved in stages, the fair value of the existing equity interest in the acquire. Contingent consider- ation is included in cost at its acquisition date fair value and, in the case of contingent consideration classied as a nancial liability, remeasured subsequently through prot or loss. For business combinations completed on or after 1 January 2010, direct costs of acquisition are recognised immediately as an expense. Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of comprehen- Page 38 / Annual Report 2021 sive income. Where the fair value of identiable assets, liabilities and contingent liabilities exceed the fair value of consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date. Impairment of non-nancial assets (excluding inventories, invest- ment properties and deferred tax assets) Impairment tests on goodwill and other intangible assets with indef- inite useful economic lives are undertaken annually at the nancial year end. Other non-nancial assets are subject to impairment tests whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down accordingly. Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest group of assets to which it belongs for which there are separately identiable cash ows; its cash generating units (' Good- will is allocated on initial recognition to each of the Group's CGUs that are expected to benet from a business combination that gives rise to the goodwill. Impairment charges are included in prot or loss, except to the extent they reverse gains previously recognised in other comprehensive income. An impairment loss recognised for goodwill is not reversed. Provision for service and warranty obligation Provision for service and warranty obligations covers future war- ranty obligations and other statutory obligations in connection with sold goods. The provision represents the best estimate, based on historical data and future expectations. Equity Share capital Share capital means Komplett ASA's fully paid share capital at face value. Share Premium Amount subscribed for share capital in excess of nominal value. Less transaction cost related to share issues. Other equity Includes other paid-in equity, retained earnings and accumulated translation reserves. Cost of equity transactions Transaction costs related to equity transactions are recognised directly in equity, reducing the share premium paid. Dividends and group contributions Dividends and group contributions are rst classied as liabilities when adopted by the general meeting. Taxes The tax expense in the income statement includes both current tax payable and changes in deferred tax/deferred tax assets. Current tax constitutes the expected tax payable on the year's tax- able result at the applicable tax rates on the balance sheet date and any corrections of tax payable for previous years. Tax payable and deferred tax/deferred tax assets are calculated at the tax rate based on the in the countries that Komplett is liable to pay tax. Deferred tax/deferred tax assets are calculated on the basis of the temporary differences that exist between accounting and tax bases of assets and liabilities, as well as tax losses carried forward at year end. Net deferred tax assets are recognised to the extent that there is convincing evidence that there will be taxable income available to utilise the deferred tax asset. Cash ow statement The cash ow statement has been prepared according to the indi- rect method. Segment reporting The Group's segments are based on the Group's internal manage- ment reporting. The company's top decision-maker, responsible for allocating resources to and assessing earnings in the operating segments, is dened as group management. Leases All leases are accounted for by recognising a right-of-use asset and a lease liability except for: - Leases of low value assets; and - Leases with a duration of 12 months or less. Lease liabilities are measured at the present value of the contractu- al payments due to the lessor over the lease term, with the discount rate determined by reference to the rate inherent in the lease unless (as is typically the case) this is not readily determinable, in which case the group’s incremental borrowing rate on commencement of the lease is used. Variable lease payments are only included in the measurement of the lease liability if they depend on an index or rate. In such cases, the initial measurement of the lease liability assumes the variable element will remain unchanged throughout the lease term. Other variable lease payments are expensed in the period to which they relate. On initial recognition, the carrying value of the lease liability also includes: - amounts expected to be payable under any residual value guar- antee - the exercise price of any purchase option granted in favour of the group if it is reasonably certain to assess that option - any penalties payable for terminating the lease, if the term of the lease has been estimated on the basis of termination option being exercised. Right of use assets are initially measured at the amount of the lease liability, reduced for any lease incentives received, and increased for: Page 39 / Annual Report 2021 - lease payments made at or before commencement of the lease - initial direct costs incurred - the amount of any provision recognised where the group is con- tractually required to dismantle, remove or restore the leased asset (typically leasehold dilapidations – see note 19). Subsequent to initial measurement lease liabilities increase as a re- sult of interest charged at a constant rate on the balance outstand- ing and are reduced for lease payments made. Right-of-use assets are amortised on a straight-line basis over the remaining term of the lease or over the remaining economic life of the asset if, rarely, this is judged to be shorter than the lease term. When the group revises its estimate of the term of any lease (because, for example, it re-assesses the probability of a lessee extension or termination option being exercised), it adjusts the car- rying amount of the lease liability to reect the payments to make over the revised term, which are discounted using a revised discount rate. The carrying value of lease liabilities is similarly revised when the variable element of future lease payments dependent on a rate or index is revised, except the discount rate remains unchanged. In both cases an equivalent adjustment is made to the carrying value of the right-of-use asset, with the revised carrying amount being amortised over the remaining (revised) lease term. If the carrying amount of the right-of-use asset is adjusted to zero, any further reduction is recognised in prot or loss. Pension Dened contribution schemes Contributions to dened contribution pension schemes are charged to the consolidated statement of comprehensive income in the year to which they relate. Dened benet schemes Dened benet scheme surpluses and decits are measured at: - The fair value of plan assets at the reporting date; less - Plan liabilities calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate bonds that have maturity dates approximating to the terms of the liabilities and are denominated in the same currency as the post-employment benet obligations; less - The effect of minimum funding requirements agreed with scheme trustees. Re measurements of the net dened obligation are recognised directly within equity. The re measurements include: - Actuarial gains and losses - Return on plan assets (interest exclusive) - Any asset ceiling effects (interest exclusive). Service costs are recognised in prot or loss and include current and past service costs as well as gains and losses on curtailments. Net interest expense (income) is recognised in prot or loss, and is calculated by applying the discount rate used to measure the dened benet obligation (asset) at the beginning of the annual period to the balance of the net dened benet obligation (asset), considering the effects of contributions and benet payments during the period. Gains or losses arising from changes to scheme benets or scheme curtailment are recognised immediately in prot or loss. Settlements of dened benet schemes are recognised in the peri- od in which the settlement occurs. Participation in multi-employer scheme In Norway some of the employees are included in a multi-employer pension arrangement. The arrangement provides a lifelong addition to the ordinary pension. Employees can choose to take out the pen- sion from the age of 62, also next to being in work, and it provides further earnings when working until the age of 67. The scheme is a dened benet pension scheme and is funded through premiums that are determined as a percentage of salary. Currently, there is no reliable measurement and allocation of commitment and funds in the scheme. In accounting, the scheme is treated as a dened contribution pen- sion scheme, where premium payments are expensed on an ongoing basis, and no provisions are made in the accounts. The current premiums are set at 2.5% of total salaries between 1G and 7.1G. As the scheme has set up as a pay as you go arrangement the premiums are expected to increase in the years ahead. Events after the balance sheet date New information about the company's position on the balance sheet date is included in the nancial statements. Events that occur after the balance sheet date that do not affect the company's position on the balance sheet date, but which affect the company's future position are reported if it is of signicance. NOTE 3.2 Changes in accounting poli- cies New standards, interpretations and amendments adopted from 1 January 2021 None of the new standards adopted in 2021 impacting the nancial statements of the Group for the year ended 31 December 2021. New standards, interpretations and amendments not yet effective There are a number of standards, amendments to standards, and in- terpretations which have been issued by the IASB that are effective in future accounting periods that the group has decided not to adopt early. None of these are expected to have signicant effect on the nancial statements of the Group. Page 40 / Annual Report 2021 NOTE 4 Financial instruments - risk management General objectives, policies and processes The Group is exposed to nancial risk in various areas, including cur- rency risk. The objective is to reduce the nancial risk from nancial instruments to the greatest extent possible. The company's current strategy does not include the use of nancial instruments, but this is subject to ongoing review. In 2021, the currency risk is primarily sought reduced by continuously matching the selling price of the products against developments in purchase for goods measured in NOK, as well as buying currency at the same time placed for goods in a foreign currency. The currency is then used to pay suppliers. Many of Komplett's products are purchased and sold in a market where prices can change up to several times per day. The best hedging of currency uctuations has therefore historically been shown to be close follow-up and change of selling price, combined with high turnover rate of goods exposed to currency risk. Capital management No group companies are subject to external capital requirements. The Group assess it capital based on the desire equity ratio based on the risk assessments in the individual companies. The objective of capital management is that the Group shall have an adequate capital base for the ongoing operations and potentials new projects. The capital base is mainly governed in dialogue with the main owner in relation to how much of the current results are distributed in dividends. Currency Risk The Group is exposed to currency exchange risk arising from the im- port of goods for sale. These transactions are mainly settled in USD and EUR. As part of the company's revenues are in foreign currency, the Group is also exposed to changes in exchange rates, especially SEK and DKK. The Company has not entered into forward contracts or other agreements to reduce the company's foreign exchange risk and thereby reduce the operating market risk. This for the same reason as mentioned above. The Group's earnings and equity are affected by the conversion of results and equity for foreign subsidiaries. A decrease in the aver- age price SEK by 5% would result in a reduced prot in the Group by NOK 1,812.4 million. Reduction from 97.45 to 92.45 in closing price would reduce equity by NOK 10,500.3 million Interest rate risk The Group has a net overdraft facility at the end of 2021 of NOK 161.9 million,they have a loan linked to the deferred payment portfolio in Webhallen which is drawn with NOK 45,4 million and a long-term loan at the end of 2021 of NOK 400 million, and has an agreement on oat- ing interest for both bank deposits and overdrafts. If interest rates change by 1 per cent, net interest expense changes by approx. NOK 0.4 million. The Group has income from credit via partial payment and deferred payment and changes in interest rates will affect these. A change in interest rates by 1 per cent will result in a change in revenues of NOK 1.3 million per an annual year. Credit risk The risk of selling to private end customers is limited by the average order size, and by the fact that in the vast majority of cases the customer pays the goods credit card. Private individuals are nor- mally not granted credit. New retailers and business customers are credit-rated by a dedicated credit department. Careful credit limits are set and customers are manually assessed as soon as the credit limit is reached or they have overdue payments. Komplett issues only one debt collection notice prior to submission to an external debt collector. All major customers are assessed manually at each quarter-end closing. Upon review, specic provisions are made based on as- sessments made by the head of the credit department. This review assesses the customer's payment history, a new credit rating of the customer is obtained where new credit information is collected from our partner Bisnode. Provisions are made for all ongoing debt collection cases based on expected collection, derived from the experience of the debt collector. Currently, this amounts to 50 per- cent. All cases that are added to surveillance are continuously lost. At the end of the year, the receivables from deferred payment amounted to NOK 129.6 million. All customers applying for deferred payment go through the Group's automatic credit rating score- card system. The scorecard systems are built together with debt collection partner and credit reference agencies. Provisions are made based on the share for debt collection, and the debt collection company's expectations for the rate of collection. Liquidity risk At the end of 2021, the Group has net unused overdraft rights of NOK 492.6 million. Net working capital is positive with NOK 513.9 million. The Group has large seasonal uctuations in relation to turnover. Page 41 / Annual Report 2021 The table below shows the maturity structure of the Group's nancial liabilities Total 0-6 months 6-12 months 1-2 years 2-4 years After 5 years Amounts in NOK million 31.12.2021 Long-term loans 400 - - - 400 - Short-term loans 207 207 - - - - Trade payables 1 124 1 124 - - - - Public duties 293 293 - - - - Other short term liabilities 212 212 - - - - Total 2 236 1 836 - - 400 - 31.12.2020 Short-term loans 48 48 - - - - Trade payables 934 934 - - - - Public duties 247 247 - - - - Other short term liabilities 233 233 - - - - Total 1 462 1 462 - - - - On 31 May 2021, Komplett ASA entered into a NOK 500 million unsecured revolving credit facility agreement with Skandinaviska Enskilda Bank- en AB (publ), with a three years' duration and 1 + 1 year renewal option. As of 31 December 2021, NOK 400 million were utilised. Financial instruments based on category Financial assets at fair value Financial assets at amortised cost Financial liabilities at fair value Financial liabilities at amortised cost Amounts in NOK million 31.12.2021 Assets Non-current receivables - 34 - - Trade receivables - 806 - - Other current nancial asset - 346 - - Cash - 41 - - Liabilities Long-term loans - - - 400 Short-term loans - - - 207 Trade payable, public duties payable and other current liabilities - - - 1 629 31.12.2020 Assets Non-current receivables - 44 - - Trade receivables - 642 - - Other current nancial asset - 258 - - Cash - 54 - - Liabilities Short-term loans - - - 48 Trade payable, public duties payable and other current liabilities - - - 1 414 Page 42 / Annual Report 2021 NOTE 5 Segment Information The different companies in Komplett Group offers a product assortment with consumer and business electronics in Norway, Sweden and Denmark, and cloud-based IT solutions in Norway and Sweden. The sales of consumer electronics is organised in eight different web-shops based on geography and if the customer is a consumer, a private company or a public entity. Webhallen in Sweden has in addition to ~18 physical stores/pick-up points and is primary selling to consumers. For management purposes the segments is divided in whether the customer is a consumer (B2C), a private company or a public entity. Further, the sale to private company is divided into sale to resellers (Distribution) and sale to companies where the company is the end user (B2B). The segmentation is independent of the legal structure of Komplett Group and doesn't necessarily reect the legal company in the different country. The main reason for the segmentation is the characterization of the consum- er, how to drive sales, different gross margins and different cost structure. Komplett Group has a signicant infrastructure serving all three segments. The cost related to the infrastructure is allocated to the different segments in a proportion of the usage. Webhallen has a separate infrastructure and does not receive this allocation in the same extent. B2C Business to Consumer (B2C) is sales to private consumers in Norway, Sweden and Denmark and has in total 2 brands with 4 web-shops. Three of the stores are branded as Komplett and is in all three countries as komplett.no, komplett.se and komplett.dk. Webhallen is the other brand and is located in Sweden with one web-shop webhallen.com and ~18 physical stores / pick-up points. B2B Business to Business (B2B) is sales to companies and public entities/institutions where the customer is the end customer of the products and services. B2B is located in Norway and Sweden with the web-shops komplettbedrift.no and komplettforetag.se. Through the company Iron- stone, the group also offers cloud-based IT solutions and services to companies located in Norway and Sweden. Distribution Distribution is sale to resellers and other big entities not covered by B2B and is located in Norway and Sweden with the web-portals itegra.no and itegra.se. Other The Segment Other, is cost which is not allocated to the different segments mentioned above. This is where the cost is dicult to give a fair allocation and to have the segments as comparable as possible over time. Typical cost under this segment is management cost and Group strategic initiatives. IFRS The different effects of IFRS, specially IFRS 16 is not a part of the operational measures and is kept outside the segments above. The segmentation above is according to the internal reporting on both on daily and monthly basis. Further, the segments has separate manage- ment and employees to run their business. Every month the segments needs to report to the executive management team. Transactions between the segments and the legal companies in the Group is on arms-length terms. In all internal and external reporting these transactions are eliminated. Page 43 / Annual Report 2021 Information about the Group's segments is presented below Prot or loss - 2021 B2C B2B Distribution Other IFRS 16 Total Amounts in NOK million Operating income Revenues from contract with customers 6 298 1 495 3 110 - - 10 903 Other operating revenues 84 33 14 21 -12 140 Total operating income 6 382 1 528 3 124 21 -12 11 043 Operating expenses Cost of goods sold -5 399 -1 252 -2 931 1 - -9 581 Employee benet expenses -331 -63 -65 -52 - -511 Depreciation, amortization and impairments -48 -9 -6 -1 -65 -129 Other operating expenses -375 -57 -44 -62 85 -453 Total operating expenses -6 153 -1 382 -3 046 -114 20 -10 674 OPERATING RESULT 229 146 79 -93 9 369 Financial income and nancial expenses Share of prot or loss from associates - - - 3 - 3 Financial income - - - 1 2 3 Financial expenses - - - -15 -14 -28 Net nancial items - - - -10 -12 -22 PROFIT OR LOSS BEFORE TAXES 229 146 79 -104 -3 347 Prot or loss - 2020 B2C B2B Distribution Other IFRS 16 Total Amounts in NOK million Operating income Revenues from contract with customers 6 058 1 281 2 426 - - 9 765 Other operating revenues 84 5 - 23 -11 101 Total operating income 6 142 1 286 2 426 23 -11 9 866 Operating expenses Cost of goods sold -5 217 -1 067 -2 260 -3 - -8 547 Employee benet expenses -301 -48 -67 -49 - -465 Depreciation, amortization and impairments -54 -9 -5 -2 -67 -137 Other operating expenses -376 -53 -43 -54 86 -440 Total operating expenses -5 948 -1 177 -2 375 -108 19 -9 589 OPERATING RESULT 194 109 51 -85 8 276 Financial income and nancial expenses Share of prot or loss from associates - - - 2 - 2 Financial income - - - 4 2 6 Financial expenses - - - -18 -14 -31 Net nancial items - - - -12 -12 -24 PROFIT OR LOSS BEFORE TAXES 194 109 51 -97 -3 253 Page 44 / Annual Report 2021 NOTE 6 Revenues from contracts with customers Disaggregation of Revenue The Group has disaggregated revenue into various categories in the following table which is intended to: - depict how the nature, amount, timing and uncertainty of revenue and cash ows are affected by economic date; and - enable users to understand the relationship with revenue segment information provided in note 5 Disaggregation based on type of customers 2021 2020 Amounts in NOK million Sale to consumers (B2C) 6 382 6 142 Sale to corporates (B2B) 1 528 1 286 Sale to resellers (B2B) 3 124 2 426 Other 9 12 Total 11 043 9 866 Revenues based on geographic location of customers 2021 2020 Amounts in NOK million Norway 7 126 5 996 Sweden 3 553 3 459 Denmark 364 410 Total 11 043 9 866 Revenues by product or service 2021 2020 Amounts in NOK million Sale of goods 10 903 9 765 Commission from deferred payment and sale of insurance 140 101 Total 11 043 9 866 Critical judgements The Group used the following assessments which have a signicant impact on the amount and time of recognition of income from contracts with customers: Sale of goods Liabilities and assets related to sales to the consumer with open purchase. In the event of ordinary sales to customers, the Group allows the customer to return the item for a full refund within 60 days (open purchase). Based on this, a refund liability is recognised (included in the line "Sales revenue of goods") and a right to returned goods (included in the line "cost of goods sold"). Historical data is used to estimate the extent of returns at the time of sale. Since the proportion of returns has been stable over it is certain that a signicant reversal of income will not occur because of changes in the return grade. The estimates of returns are reassessed on each balance sheet day. The Group's liabilities for repair and/or exchange of defective products under ordinary guarantees are recognised as a liability included in the line "Other current liabilities" in the nancial statements. Customer loyalty programs In January 2019, the Group introduced a customer loyalty program related to sales to consumers where the customer accumulates points based on completed purchases. Points can be used to earn a discount on future purchases. Commissions The Group receives commissions for the distribution of nancing via partner Komplett Bank. The consideration consists of a xed part based on volume and a variable part based on the funding period. Since the nances are not timed, the income recognition of the part variable part is postponed until the Group is entitled to the consideration. Contract balances for contracts with customers 2021 2020 Amounts in NOK million Refund liabilities 5 6 Provision for warranties 17 15 Page 45 / Annual Report 2021 NOTE 7 Employee benet expenses and audit fees 2021 2020 Amounts in NOK million Salaries 298 265 Social security expenses 67 61 Contribution to pension schemes 20 15 Fees for external staff 87 81 Share option plan (see note 18) 2 - Bonuses 28 35 Other expenses 9 8 Total 511 465 Number of employees at year end 795 647 Average full -time employees during the nancial year: 565 550 Key management compensation in 2021 Salary Bonuses earned Pension Other benets Value of options granted Total Amounts in NOK million Lars Olav Olaussen, CEO 3,85 2,81 0,02 0,26 0,92 8,66 Krister Pedersen, CFO 2,24 1,78 0,02 0,01 0,58 5,11 Trine L Jensen, Chief Information & Operating Ocer 2,17 1,58 0,02 0,22 0,52 4,92 Kristin H Torgersen, HR Director (interim) (May-Dec) 1,09 0,99 0,02 0,20 - 1,30 Kjetil Wisløff, Category and Buying Direkctor (Mar-Dec) 1,96 1,62 0,02 0,11 0,64 2,73 Henri Blomqvist, Managing Director Webhallen 2,52 1,47 0,73 0,30 0,58 5,61 Kristin Hovland, Head of Commincation an Advisor to CEO 0,71 0,55 0,01 0,01 0,18 1,21 Hanne Elisabeth Hagen, HR Director 1,50 - 0,02 0,13 0,36 3,36 Per Skøien, Head of Category and Procurement 1,52 0,99 0,02 0,21 0,36 3,17 Stian Gabrielsen, Director B2B & Itegra (Jan-Aug) 2,08 - 0,02 0,01 0,50 4,57 Kristoffer G. Langballe (Jan-Apr) 0,73 0,40 0,01 0,05 - 2,16 Mats Hansen, Category and Buying Director (Jan-Apr) 0,52 0,38 0,01 0,00 - 1,75 Jan Erik Svendsen, Director B2B & Itegra (interim) (Sep-Dec) 0,38 0,40 0,01 0,01 0,22 0,75 • The bonus scheme for group management consists of the following elements: 1) Budgeted EBIT 2) Budgeted sale 3) Discretionary share • Group management is included in Group's ordinary dened contribution pension schemes. • The company provides severance pay that is regulated by the employment contract and which is considered to be fair and reasonable for the position in question and the scope of responsibility the position holds. In special situations, the nal consideration can be increased if the reason for the termination of the employment implies it. Pension Komplett is obliged to have occupational pension pursuer of the Mandatory Occupational Pension Act and in 2006 established a scheme with a dened contribution pension for employees in Norway. The scheme complies with the requirements of this Act. Employees in the Norway also have a contractual pension scheme (AFP). Due to the employee's age composition, obligations related to this are not actuated and no obligation has been made relating to this. This year's recognised expenses for dened contribution plans (including multi employer plans) amount to NOK 7.4 million. Page 46 / Annual Report 2021 Key management compensation in 2020 Salary Bonuses earned Pension Other benets Value of options granted Total Amounts in NOK million Lars Olav Olaussen, CEO 3,87 3,61 0,03 0,25 - 7,95 Krister Pedersen, CFO 0,20 2,25 0,00 0,00 - 0,21 Trine L Jensen, Chief Information & Operating Ocer 2,10 2,00 0,03 0,20 - 2,78 Henri Blomqvist, Managing Director Webhallen (Oct-Dec) 1,61 - 0,48 - - 2,09 Thomas Sparrmo, Managing Director Webhallen (Jan-Oct) 0,53 0,10 0,10 - - 0,73 Hanne Elisabeth Hagen, HR Director 1,34 1,34 0,03 0,13 - 2,16 Per Skøien, Head of Category and Procurement 1,40 1,05 0,03 0,20 - 2,75 Stian Gabrielsen, Director B2B & Itegra 1,96 1,96 0,04 0,00 - 3,80 Kristoffer G. Langballe 1,50 1,38 0,03 0,13 - 3,16 Mats Hansen, Category and Buying Director 1,28 1,22 0,03 0,00 - 2,28 Karin Berg, Director B2C (Jan) 0,18 - 0,00 0,01 - 0,19 Maria Aas-Eng, Director B2C (Aug-Dec) 0,83 - 0,03 0,04 - 0,91 • The bonus scheme for group management consists of the following elements: 1) Budgeted EBIT 2) Budgeted sale 3) Budgeted working capital applied • Group management is included in Group's ordinary dened contribution pension schemes. • The company provides severance pay that is regulated by the employment contract and which is considered to be fair and reasonable for the position in question and the scope of responsibility the position holds. In special situations, the nal consideration can be increased if the reason for the termination of the employment implies it. Compensation to the board of directors 2021 2020 Amounts in NOK million Nils Selte, Chair 0,37 - Jo Lunder, Director 0,22 0,23 Lars B Thoresen, Director 0,27 0,23 Sarah Willand, Director 0,25 - Jennifer Geun Koss, Director 0,38 - Anders Odden, Worker director 0,14 0,11 Nora Eldås, Worker director (Apr-Dec) 0,10 - Camilla Johansen, Worker director (Jan-Mar) 0,03 0,11 The Group Management and 24 other employees have during the year been granted share options. The share option plan is further presented in note 18. Below is an overview of management share options: Key management - share option Opening balance Granted Forfeited Exer- cised Average exercise price (A) Ending balance Average exercise price (B) Average maturity Lars Olav Olaussen, CEO - 58 127 - - - 58 127 64,43 4,48 Krister Pedersen, CFO - 36 711 - - - 36 711 64,43 4,48 Trine L Jensen, Chief Information & Operating Ocer - 32 668 - - - 32 668 64,43 4,48 Kjetil Wisløff, Category and Buying Direkctor - 40 566 - - - 40 566 64,43 4,48 Henri Blomqvist, Managing Director Webhallen - 36 714 - - - 36 714 64,43 4,48 Kristin Hovland, Head of Commincation an Advisor to CEO - 11 166 - - - 11 166 64,43 4,48 Hanne Elisabeth Hagen, HR Director - 22 944 - - - 22 944 64,43 4,48 Per Skøien, Head of Category and Procurement - 22 944 - - - 22 944 64,43 4,48 Jan Erik Svendsen, Director B2B & Itegra (interim) - 13 575 - - - 13 575 64,43 4,48 Total - 275 415 - - 275 415 (A) - average exercise price for options exercised during the year (B) - Average exercise price for options at the end of the year The options will vest gradually over three years after grant, whereas 20% of the options will vests after one year, 20% will vests after two years, and the remaining 60% will vests after three years. All options will expire ve years after the date of grant. Page 47 / Annual Report 2021 Audit fees to the auditors in the group entities is as follows (excluding VAT) Number of shares Lars Olav Olaussen, CEO 499 215 Krister Pedersen, CFO 106 887 Trine L Jensen, Chief Information Ocer and Chief Operating Ocer 89 031 Kristin H Torgersen, HR Director (interim) (May-Dec) 1 666 Kjetil Wisløff, Category and Buying Direkctor (Mar-Dec) 185 167 Kristin Hovland, Head of Commincation an Advisor to CEO 77 517 Per Skøien, Head of Category and Procurement 62 791 Jan Erik Svendsen, Director B2B & Itegra (interim) 47 192 Jon Martin Klafstad, Director B2C 16 666 Nils Selte, Chair 420 473 Jo Lunder, Director 245 332 Lars B Thoresen, Director 232 201 Jennifer Geun Koss, Director 4 166 Anders Odden, Worker director 8 333 Total 1 996 637 The table below shows BDO’s total charges for auditing and other services. All amounts are exclusive of VAT. Audit fees to the auditors in the group entities is as follows (excluding VAT) 2021 2020 Amounts in NOK million Statutory audit 2,80 2,06 Other assurance services 0,31 0,31 Other non-assurance services 0,85 1,04 Total 3,96 3,41 NOTE 8 Finance income and expenses Finance income 2021 2020 Amounts in NOK million Interest income 1,03 2,75 Interest from leases 1,90 2,18 Other nance income 0,23 0,81 Total nancial income 3,16 5,74 Finance expenses 2021 2020 Amounts in NOK million Interest on debts and borrowings 14,46 12,56 Interest on leases 13,70 13,84 Foreign exchange losses -0,21 4,82 Other nance expenses 0,42 0,19 Total nance expenses 28,37 31,42 Page 48 / Annual Report 2021 NOTE 9 Income tax Taxable income 2021 2020 Amounts in NOK million Result from continued operations 347 253 Non taxable items (1) -8 36 Correction of previous years -96 - Use of tax loss carried forward -34 -85 Changes in temporary differences -22 -25 Taxable income 202 179 Income tax expense: Current income tax 66 41 Correction of previous years current income taxes (2) -21 - Changes in deferred tax 2 -9 Total income tax expense 48 32 Income tax expense Norwegian operations 53 47 Income tax expense foreign operations -5 -15 Total income tax expense 48 32 Temporary differences and tax positions 2021 2020 Amounts in NOK million Intangible assets 89 66 Property plant and equipment -84 -77 Inventories -19 -17 Receivables -3 -11 Provisions -26 -43 Tax losses carried forward (3) -282 -448 Total temporary differences and tax positions -324 -531 Temporary differences and tax positions not included in the basis for deferred tax 208 385 Basis for deferred tax -116 -146 Net deferred tax -25 -32 Specication in the statement of nancial position: Deferred tax asset -25 32 Net deferred tax -25 32 Tax payable in the statement of nancial position: Current income tax payable (4) 66 41 Prepaid tax 2 -0 Net tax payable 68 41 (1) Includes non-deductible costs such as representation, gifts and non-taxable income such as capital gains and dividends from associated companies. (2) NOK 22 million is a result of a positive outcome in a tax case that applies to the years 2012 to 2016 and which has not previously been included in the basis for capitalized deferred tax assets (3) The tax loss carried forward has occurred in the period 2002 - 2019. When calculating the Group's deferred tax assets, tax loss carried forward is only included to the extent that there is convincing evidences that tax losses can be utilised. It is the company's assessment that the activated tax benet can be exploited. Under current tax rules, there is no expiration date related to the tax-reducing temporary differences. (4) The main part of this tax claim lapses in the event of a positive outcome in an unresolved tax case Page 49 / Annual Report 2021 Reconciliation of effective tax rate 2021 2020 Amounts in NOK million Prot before tax 347 253 Income tax based on applicable tax rate (22%) 76 56 Effect from foreign currency and different tax rates -0 -1 Changes in not recognised tax loss carried forward 3 - Effect of income from associated company after tax -0 0 Correction of previous years current income taxes -21 - Not deductible expenses 2 8 Effect of used not capitalised deferred tax asset -1 -19 Effect of recognition of deferred tax asset -11 -12 Income tax expense 48 32 Effective tax rate 13,7 % 12,7 % NOTE 10 Earnings per share The basic earnings per share are calculated as the ratio of the prot for the period that is due to the shareholders of the parent divided by the weighted average number of ordinary shares outstanding. On the 28th of May the shareholders meeting resolved to merge the two separate classes of shares , by changing all shares to ordinary shares. For the calculation of earning per share this is treated as a settlement of the pref- erence shares by issuing ordinary shares. The difference between the fair value the ordinary shares "issued" and the carrying amount of the preference shares settled is charged against the result allocated to the holders of ordinary shares. Dividends paid or payable to the holders of preference shares is also charged against the result allocated the holders of ordinary shares. Earnings per share 2021 2020 Amounts in NOK million Result allocated to the holders of ordinary shares Result for the year 300 221 Dividend payable to preference share holders -48 -108 Additional dividend paid to holders of preference shares -173 - Difference between fair value and carrying amount on conversion -1 775 - Result allocated to the holders of ordinary shares -1 696 113 Average number of shares Shares at the beginning of the period 4 335 4 335 Effect of merging the two classes of shares 5 901 - Average number of shares 10 236 4 335 Effect of 1 to 5 split 51 181 21 677 EARNINGS PER SHARE (BASIC AND DILUTED) - IN NOK -33,14 5,20 * Canica hold 100% of the preference shares and close to 100% of the ordinary shares. The theoretical loss/charge towards the result allocated to the holders of ordinary shares is an off market transaction, and the charge included above holds little meaning and is just theoretical. ** In May the shareholders meeting resolved a 1 to 5 split of the shares in the company. For the calculation of earnings per share the split is adjusted for retrospectively. As earnings per share reects a theoretical market transaction we believe that it gives more meaning to calculate earnings per share by ignor- ing the different classes of shares from the beginning. By dividing the result for the period on the total number of shares adjusted for the 1 to 5 split (72 255 155). This would give the following adjusted earnings per share: Adjusted earnings per share 2021 2020 Adjusted earnings per share - in NOK 4,15 3,06 Diluted earnings per share. The group has an option program (see note 18), but since earnings per share are negative, this has no dilutive effect. There are also no other instruments that will have a dilutive effect on earnings per share as of 31.12.2021. Page 50 / Annual Report 2021 NOTE 11 Intangible assets Goodwill Software Other intangible assets Total Amounts in NOK million Cost as of 31.12.20 477 496 228 1 201 Additions 78 50 19 148 Disposals - -0 - -0 Foreign currency effects -2 -2 -5 -9 Cost as of 31.12.21 553 544 243 1 340 Acc. amortisation and impairments as of 31.12.20 -119 -383 -170 -673 Amortisation charge - -49 -1 -50 Disposals - 0 - 0 Foreign currency effects - 1 1 2 Acc. amortisation and impairments as of 31.12.21 -119 -431 -170 -720 Carrying amount as of 31.12.20 358 113 58 529 Carrying amount as of 31.12.21 433 113 73 620 Carrying amount of assets with indenite life 433 - 60 494 Amortisation rate 15 - 25 % 20 % The Group amortises all intangible asset based on the linear method Useful economic lift 2021 2020 Customer relations 5 year 5 - 7 year Software 3 - 7 year 3 - 7 year Other intangible assets relate to the purchase of brand names, customer relationships and added value on leases. Brand names are considered to have an indenite lifetime and are therefore not depreciated but are subject to annual impairment testing. The depreciation period for cus- tomer relationships is based on the best estimate for economic life for the assets. Goodwill acquired through acquisitions is allocated to four individual cash-generating units for the impairment test. Intangible assets by segment or CGU as of 31.12.21 Goodwill Trade names Customer- relations Total Amounts in NOK million CGU/Segment Komplett B2C 167 - - 167 Komplett B2B 100 - - 100 Itegra 55 5 - 60 Webhallen Sweden AB 33 50 - 83 Ironstone 78 5 13 97 Total as of 31.12.21 433 60 13 507 Impairment test of goodwill and intangible assets Goodwill is allocated to the Group's cash ow generating units as shown above. The recoverable amount of the cash-generating units is calculated based on the value of the asset for the business (value of use). The impairment tests are based budgets for next year with a projection based on long-term strategic plans. Management has set budgeted gures for 2022 based on previous performance and expectations for market developments. Growth rates for the period 2022 - 2026 are in accordance with management's long-term plan and are used as projections of budgeted gures for 2022. After 2026, 2% perpetual growth is based on cash ows in the year 2026. The discount rate used is after tax and reects specic risks to the relevant operating segment/CGU. Page 51 / Annual Report 2021 Impairment test of the cash-generating unit Komplett B2C The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. In the calculation, is based on a model with budgeted/projected cash ows for a period of ve years with residual value after year ve. The cash ows estimate includes estimated annual growth of 3.5 - 13.2% in revenues in the rst ve-year period, which is reduced to a 2.0% perpetual growth from year 6. The EBIT margin is assumed to be in the range 5.2 - 6.2% in the rs ve-year period, and 4.8% in the calculation of the terminal value. A WACC of 10.2% after tax is used for the value in use calculation. Sensitivity The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. % Change in revenues growth N/A Changes in EBIT margin N/A Change in discount rate N/A Any changes in key assumption that would result in the value in use being equal to the carrying amount is consider to exceed reasonable changes. Impairment test of the cash-generating unit Komplett B2B The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. In the calculation, is based on a model with budgeted/projected cash ows for a period of ve years with residual value after year ve. The cash ows estimate includes estimated annual growth of 1.6 - 12.6% in revenues in the rst ve-year period, which is reduced to a 2.0% perpetual growth from year 6. The EBIT margin is assumed to be in the range 8.8 - 10.3% in the rs ve-year period, and 8.1% in the calculation of the terminal value. A WACC of 10.2% after tax is used for the value in use calculation. Sensitivit y: The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. % Change in revenues growth N/A Changes in EBIT margin N/A Change in discount rate N/A Any changes in key assumption that would result in the value in use being equal to the carrying amount is consider to exceed reasonable changes. Impairment test of the cash-generating unit Itegra The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. In the calculation, is based on a model with budgeted/projected cash ows for a period of ve years with residual value after year ve. The cash ows estimate includes estimated annual growth of 2.6 - 3.4% in revenues in the rst ve-year period, which is reduced to a 2.0% perpetual growth from year 6. The EBIT margin is assumed to be in the range 2.4 - 3.1% in the rs ve-year period, and 3.0% in the calculation of the terminal value. A WACC of 10.2% after tax is used for the value in use calculation. Sensitivit y: The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. % Change in revenues growth N/A Changes in EBIT margin Decreased from 3.0 to 1.6 Change in discount rate Increased from 10.2 to 14.8 Any changes in key assumption that would result in the value in use being equal to the carrying amount is consider to exceed reasonable changes. Impairment test of the cash-generating unit Webhallen Sweden AB The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. In the calculation, is based on a model with budgeted/projected cash ows for a period of ve years with residual value after year ve. The cash ows estimate Page 52 / Annual Report 2021 includes estimated annual growth of 3.0 - 19.2% in revenues in the rst ve-year period, which is reduced to a 2.0% perpetual growth from year 6. The EBIT margin is assumed to be in the range 3.1 - 5.1% in the rs ve-year period, and 4.0% in the calculation of the terminal value. A WACC of 10.2% after tax is used for the value in use calculation. Sensitivit y: The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. % Change in revenues growth N/A Changes in EBIT margin N/A Change in discount rate N/A Any changes in key assumption that would result in the value in use being equal to the carrying amount is consider to exceed reasonable changes. Impairment test of the cash-generating unit Ironstone The impairment test shows that the calculated value in use estimated usage value is higher than the carrying amount. In the calculation, is based on a model with budgeted/projected cash ows for a period of ve years with residual value after year ve. The cash ows estimate in- cludes estimated annual growth of 18.4 - 32.8% in revenues in the rst ve-year period, which is reduced to a 2.50% perpetual growth from year 6. The EBIT margin is assumed to be in the range 0.2 - 7.7% in the rs ve-year period, and 7.0% in the calculation of the terminal value. A WACC of 10.6% after tax is used for the value in use calculation. Sensitivit y: The following reasonable possible changes in key assumption would result in the value in use being equal to the carrying amount. % Change in revenues growth Decreased from 2.5 to 1.9 % Changes in EBIT margin Decreased from 7.0 to 6.5 % Change in discount rate Increased from 10.6 to 11.1 % Any changes in key assumption that would result in the value in use being equal to the carrying amount is consider to exceed reasonable changes. NOTE 12 Property, plant and equipment Leasehold improvements Machinery and equipment Total Amounts in NOK million Cost as of. 31.12.20 29 321 351 Additions from acquisition of companies 1 1 1 Additions 0 5 5 Disposals - -1 -1 Foreign currency effects - -6 -6 Cost as of 31.12.21 30 320 351 Acc. depreciation and impairments as of 31.12.20 -26 -288 -314 Additions from acquisition of companies -0 -0 -1 Depreciation -1 -13 -14 Disposals - 1 1 Foreign currency effects - 5 5 Acc. depreciation and impairments as of 31.12.21 -28 -295 -323 Carrying amount as of 31.12.20 3 34 36 Carrying amount as of 31.12.21 3 25 28 Economic life 3 - 5 years 3 - 7 years Depreciation rate 20 % 15 - 25 % Depreciation method Linear Linear Page 53 / Annual Report 2021 NOTE 13 Investments in associates The following entities have been included in the consolidated nancial statements using the equity method: Name Country Industry Proportion of ownership Fabres Sp. Z.o.o. Poland Consulting 40,0 % Based on an overall assessment where size and complexity are taken into account Fabres Sp. Z.o.o. is considered to be signicant associates. Further information regarding this company is disclosed below. Fabres Sp. Z.o.o. Book value 2021 2020 Amounts in NOK million At 1 January 8,7 6,7 Share of prot after tax 3,2 2,0 Dividend -1,1 - At 31 December 10,8 8,7 Fabres Sp. Z.o.o. is domiciled in Poland with oce is in Poznan. The company is a consulting rm providing IT an nance services. Fabres Sp. Z.o.o. Summarised nancial information 2021 2020 Amounts in PLN million Assets 14,3 11,1 Liabilities 1,9 1,4 Equity 12,4 9,7 Revenues 20,1 14,8 Total operating expenses -15,1 -12,3 Net nancial items 0,0 0,0 Prot of the year 5,0 2,6 Page 54 / Annual Report 2021 NOTE 14 Trade and other receivables Trade receivables 2021 2020 Amounts in NOK million Trade receivables at face value as of 31.12 684 496 Less: Provision for impairment of trade receivables -8 -5 Net trade receivables 676 491 2021 2020 Receivables written off during the years 8 9 Collected on receivables written of in prior periods -3 -5 Changes in provision during the year 2 2 Impairment loss during the year 8 6 The lifetime expected loss provision for trade receivables is as follows: Total Current 0-30d 30-60d 60-90d >90d As of 31.12.21 676 579 82 8 4 4 As of 31.12.20 491 401 68 9 2 10 Receivables from deferred payment arrangements 2021 2020 Gross amount receivable as of 01.01 166 179 Less provision as of 01.01 -14 -17 Carrying amount 01.01 152 163 Additions during the year 88 120 Down payments -122 -144 Interest income 25 28 Net losses during the years -22 -18 Change in loss provision 8 3 Carrying amount as of 31.12 130 152 Carrying amount= Gross receivables - loss provision Receivables due during next twelve months 51 82 Receivables due after twelve months 84 84 Less provision for losses -5 -14 Total 130 152 Other current receivables 2021 2020 Public duties receivable (VAT)/Tax - 1 Receivables from suppliers 261 210 Current lease liabilities 12 9 Prepaid payroll element on option 21 - Other receivables and prepaid expenses 21 9 Sum 315 230 Non-current receivables 2021 2020 Rent deposits 1 1 Warranty - The Swedish Customs 1 2 Non-current lease receivable 32 41 Sum 34 44 Page 55 / Annual Report 2021 NOTE 15 Inventories 2021 2020 Amounts in NOK million Goods with specic impairments 13 10 Specic impairments -4 -4 Goods carried at fair value 9 6 Inventories carried at cost 1 316 890 Provision no allocated to specic goods -20 -16 Booked value 1 305 880 2021 2020 Amounts in NOK million Net impairment included in cost of cost sold 5 4 NOTE 16 Cash and cash equivalents 2021 2020 Amounts in NOK million Cash at hand and on demand bank deposits 41 54 Restricted funds 2021 2020 Amounts in NOK million Bank deposits bound for payment of tax due 0,8 - Rent deposits - - A bank guarantee of NOK 12 million is issued to the Tax collector in Sandefjord NOTE 17 Share capital, shareholder information and dividend Number of shares 2021 2020 A-shares 10 115 722 B-shares 4 335 309 Ordinary shares 72 255 155 Total number of shares 72 255 155 14 451 031 Date/year Number of shares Nominal value Type of change Share capital Share premium reserve in NOK in NOK million in NOK million 31.12.2019 14 451 031 2,00 29 1 075 31.12.2020 14 451 031 2,00 29 1 075 May 2021 72 255 155 0,40 Split 29 1 075 31.12.2021 72 255 155 0,40 29 1 075 * In May 2021 the shareholders meeting resolved a 1 to 5 split of the shares in the company. Page 56 / Annual Report 2021 All issued shares have equal voting rights and the right to receive dividend. For computation of earning per share and diluted earning per share see note 10. The 20 largest shareholders as at 31 December 2021 Rank Shareholders Number of shares % of capital 1 CANICA INVEST AS 43 325 517 59,96 % 2 FOLKETRYGDFONDET 2 941 273 4,07 % 3 The Northern Trust Comp, London Br 2 800 000 3,88 % 4 Morgan Stanley & Co. Int. Plc. 1 734 708 2,40 % 5 The Bank of New York Mellon SA/NV 1 613 297 2,23 % 6 BNP Paribas Securities Services 1 338 034 1,85 % 7 UBS AG 1 309 852 1,81 % 8 VERDIPAPIRFONDET HOLBERG NORGE 1 250 000 1,73 % 8 VERDIPAPIRFONDET HOLBERG NORDEN 1 250 000 1,73 % 10 Citibank, N.A. 1 070 285 1,48 % 11 UBS Europe SE 912 041 1,26 % 12 VERDIPAPIRFONDET STOREBRAND NORGE 702 885 0,97 % 13 Skandinaviska Enskilda Banken AB 700 000 0,97 % 14 Citibank, N.A. 695 157 0,96 % 15 SOLE ACTIVE AS 652 439 0,90 % 16 R OG L INVEST AS 499 215 0,69 % 17 MUSTAD INDUSTRIER AS 489 206 0,68 % 18 VERDIPAPIRFONDET PARETO INVESTMENT 475 000 0,66 % 19 The Bank of New York Mellon SA/NV 433 000 0,60 % 20 NIAN AS 420 473 0,58 % Total 64 612 382 89,42 % Share held by board members and CEO Title Number of shares Nils Kloumann Selte (NIAN AS) Chair 420 473 Jennifer Geun Koss Director 4 166 Lars Bjørn Thoresen (LT INVEST AS) Director 232 201 Jo Olav Lunder (CIGALEP AS) Director 245 332 Anders Odden Worker director 8 333 Lars Olav Olaussen (R OG L INVEST AS) CEO 499 215 Dividends/group contributions The company has paid out the following dividends (group contributions) 2021 2020 Amounts in NOK million Group contributions to A-shares 10 Extraordinary dividends to A-shares 400 The board of directors proposes that an ordinary dividend of NOK 2.90 per share be paid, totalling NOK million 209 for the 2021 nancial year. Page 57 / Annual Report 2021 NOTE 18 Share option plan In connection with the Listing, a long-term incentive program for members of Management, key employees and certain identied young talents was implemented as a share option program. The program has been adopted by the board of directors of Komplett ASA (the “Company”) to reward employees by enabling them to acquire Shares of the Company. The strike price for the options granted are based on the nal Offer Price including a premium of 3% annually from grant date until the options are vested. The program is measured at fair value at the date of the grant and the value of the issued options is expensed over the vesting period which in this cases gradually over three years after grant. The Black-Scholes option-pricing model have been used to calculate the fair value. The cost of the employee share-based transaction is expensed over the average vesting period. The value of the issued options of the transac- tions that are settled with equity instruments (settled with the company’s own shares) is recognised as salary and personnel cost in prot and loss and in other equity. Social security tax on options is recorded as a liability and is recognised over the estimated vesting period. Total costs and Social Security Provisions 2021 Amounts in NOK million Total IFRS cost 2,30 Total Social security provisions 0,11 Granted instruments 2021 Option Quantity 31.12.2021 (instruments) 651 107 Quantity 31.12.2021 (shares) 651 107 Contractual life 5,00 Strike price 64,43 Share price 57,90 Expected lifetime 3,40 Volatility 42,32 % Interest rate 0,929 % Dividend - FV per instrument 15,87 Vesting conditions Weighted average parameters at grant of instrument Quantity and weighted average prices Activity Number of instruments Weighted Average Strike Price Outstanding options 1.1 - - Granted 651 107 64,43 Terminated -33 082 64,43 Outstanding options 31.12 618 025 64,43 Outstanding instruments overview Expiry date Strike price Number of instruments Weighted average remaining contractual life Weighted average strike price 2022 61,80 123 594 4,48 61,80 2023 63,65 123 594 4,48 63,65 2024 65,56 370 837 4,48 65,56 Total 618 025 Page 58 / Annual Report 2021 NOTE 19 Leases Right of use asset The Group's leased assets include oces and other real estate. The Group's right of use assets are categorised and presented in the table below: Summary of the Right-of-use assets Land and buildings Amounts in NOK million At 1 January 2021 255 Additions incl. adjustments to existing contracts 70 Amortisation -65 Foreign currency effects -6 At 31 December 2021 253 Economic life/lease term 1-9 years Amortisation method Straight line Lease liabilities Undiscounted lease payments and year of payment Amounts in NOK million Less than 1 year 80 1-2 years 71 2-3 years 58 3-4 years 45 4-5 years 26 More than 5 years 67 Total undiscounted lease payments 347 Summary of the lease liabilities Amounts in NOK million At 1 January 2021 318 Additions 70 Interest expenses 14 Lease payments -85 Foreign currency effects -6 Total lease liabilities at 31 December 2021 310 Whereof: Current lease liabilities 80 Non-current lease liabilities 230 Total cash outows for leases 85 The lease contracts do not include any restrictions with regards to the Group's dividend policy or nancing opportunities. Lease payment expensed Summary of the Right-of-use assets 2021 2020 Amounts in NOK million Expensed lease payment for short-term leases and low value leases 2,4 3,0 Variable lease payments 0,1 0,3 Page 59 / Annual Report 2021 Lease receivable from nance lease The Group subleases the facilities that were used by the subsidiary Marked Gruppen AS. The sublease is for the remaining lease period and is therefore a nance lease. Summary of the lease receivable Amounts in NOK million At 1 January 2021 51 Additions 2 Interest income 2 Lease payments received -12 Total lease receivable at 31 December 2021 43 Whereof: Current lease receivable 12 Non-current lease receivable 32 NOTE 20 Loans and borrowings Other current liabilities 2021 2020 Amounts in NOK million Provision for service and guarantee obligations 17 15 Accrued employee benet expenses 62 64 Other short term liabilities 132 154 Total other current liabilities 212 233 Long term debt 2021 2020 Amounts in NOK million Long-term loans 400 - Lease liabilities 230 236 Total long term debt 630 236 NOTE 21 Provision for service and guarantee obligations 2021 2020 Amounts in NOK million At 1 January 15 14 Charged to prot or loss -3 -2 Utilised during the year 5 3 At 31 December 17 15 Provisions for service and warranty obligations are made on an ongoing basis based on obligations from sales. The provision is based on esti- mated costs for service and warranty repairs and an expectation of returns of products sold based on historical data. Page 60 / Annual Report 2021 NOTE 22 Notes supporting the cash ows Transactions without cash ow effects from nancing activities are presented in the reconciliation of the movement in nancial liabilities in the subsequent tables. 2021 Non-current loans and borrowings Current loans and borrowings Other non-current nancial liabilities Total At 1 January 2021 - -48 - -48 Cash flows -400 -160 - -560 Non-cash flows - Fair value adjustments of issued put liability - -49 -49 At 31 December 2021 -400 -207 -49 -656 2020 Non-current loans and borrowings Current loans and borrowings Other non-current nancial liabilities Total At 1 January 2020 - -372 - -372 Cash flows - 324 - 324 At 31 December 2020 - -48 - -48 NOTE 23 Pledges and guarantees Type Classication Total facility Covenants (C) /Pledge (P) Utilised 31.12.2021 Utilised 31.12.2020 Amounts in NOK million Revolving Credit Facility Long-term loans NOK 500 million C - Leverage Ratio < 3.00 400 - Overdraft Facility Bank overdraft NOK 500 million C - Acc. receivable/Inventory > 500 162 - Credit Facility Bank overdraft SEK 100 million P - Sales agreements eligible of nancing > 0 45 48 Total 607 48 On 31 May 2021, Komplett ASA entered into a NOK 500 million unsecured revolving credit facility agreement with Skandinaviska Enskilda Banken AB (publ), with a three years' duration and 1 + 1 year renewal option. As of 31 December 2021, NOK 400 million were utilised. The group has a Cash pool with a multi-currency overdraft limit of NOK 500 million, as of 31 December 2021, NOK 162 million were utilised. Komplett Services AS is the principal in the cash pool arrangement. In addition, there is a credit facility secured by collateral in Webhallen's Swedish receivables from deferred payment arrangements. The agreement is limited up to SEK 100 million, as of 31 December 2021, SEK 47 million were utilised. Covenants are measured and reported quarterly. The group was in compliance with nancial covenants in 2021. Financial guarantees 2021 2020 Amounts in NOK million Guarantees related to leases 6 5 The tax collector 12 12 Warranty for accounts payable (parent company guarantees) 105 251 Total 123 268 Total mortgage-backed liabilities and nancial guarantees 169 316 Page 61 / Annual Report 2021 NOTE 24 Related party transactions In addition to subsidiaries and associated companies, the Group’s related parties include its majority shareholders, all members of the board of directors and key management, as well as companies in which any of these parties have either controlling interests, board appointments or are senior staff. All transactions have been entered into in accordance with the arms' length principle, meaning that prices and other main terms and conditions are deemed to be commercial. All signicant transactions with related parties that are not eliminated in the Group accounts are presented below: Parties Type of transactions 2021 2020 Amounts in NOK million Kullerød Eiendom AS Lease of oce and warehouse 25 25 F&H Asia Limited * Purchase of products 108 82 Total 133 106 * Rela ted entities owned by the Company's ultimate parent company in the greater Canica group of companies. NOTE 25 Consolidated companies The following companies are included in the consolidated nancial statement for 2021 Parent company: Komplett ASA Subsidiaries Country of incorporation Proportion of ownership Komplett Services AS Norway 100,0 % Komplett Services Sweden AB Sweden 100,0 % Komplett Distribusjon AS Norway 100,0 % Komplett Distribution Sweden AB Sweden 100,0 % Webhallen Sverige AB Sweden 100,0 % Ironstone Holding AS Norway 60,42 % Ironstone AS Norway Ironstone AB* Sweden Subsidiaries without activity: Marked Gruppen AS Norway 100,0 % InWarehouse AB Sweden ) 100% owned by Ironstone Holding AS *) 100% owned by Komplett Services Sweden AB, and merged with Komplett Services Sweden AB as of February 2022 Page 62 / Annual Report 2021 NOTE 26 Business Combinations On 26 August 2021, Komplett ASA entered into an agreement to acquired 65 per cent of the shares in Ironstone Holding AS, a leading supplier of cloud-based IT solutions and services for a cash settlement of NOK 62 million. Komplett will acquire 54.3 per cent of the shares from the current shareholders, and as part of the transaction, Komplett will inject NOK 35 million in new equity, giving Komplett a total ownership of 65.1 per cent. The capital injection will be divided into two equally sized tranches, of which the rst will be paid immediately after closing and the second will be paid in 2022. As of 31 December 2021 Komplett have a total ownership of 60,42 per cent. Komplett ASA has entered into a sales and purchase option agreement with the minority interest in Ironstone AS for the remaining 35 per cent of the shares. The purchase will thus be accounted for as an acquisition of 100 per cent of the shares in Ironstone AS. An obligation of NOK 52 million which reects the fair value of the remaining obligation was recognised at the acquisition date. Subsequent changes in the purchase obligation will be recognised in the state- ment of prot or loss. The transaction costs related to the acquisition was approximately NOK 5 million, and have been recognised as other operating expenses. This acquisition meets the growing demand from corporate customers for basic IT services to complement traditional hardware purchases. The pure cloud technology and IT service offered by Ironstone makes a strategically good t with Komplett's wide-ranging customer base. Ironstone leverages the Microsoft Cloud technology platform to provide IT services to both large corporations and small and medium-sized enterprises. The core offering comprises cutting edge innovative managed services, built on top of Microsoft technologies such as Microsoft Azure, Microsoft 365 and security, as well as consulting and migration. Its experienced team of ~20 employees generated revenues of NOK ~68 million in 2020 and a positive EBITDA contribution. Since its foundation in 2016, they have grown its customer base to count ~100 and receive excellent customer satisfaction scores. Based on the purchase price allocation the fair value of identiable assets acquired and liabilities assumed at the acquisition date are as fol- lows: Identiable assets acquired and liabilities assumed Fair value Amounts in NOK million Brand name 5 Customer relations 14 Fixed Assets 0 Other assets 13 Total assets 32 Deferred tax liabilities 4 Long-term debt 4 Short-term debt 14 Total liabilities 23 Net identiable assets 9 Goodwill 78 Prepaid payroll element on option 26 Acquisition cost 114 Hereby by cash settlement 62 Hereby by future obligations 52 Total goodwill recognised from the acquisition amount to NOK 78 million. Goodwill includes the value of expected synergies from the acquisi- tion and the competence and intellectual property from employees. The prepaid payroll element on the option part is recognised to account for that per the sales and purchase option agreement the purchase price for the remaining shares are dependent upon that minority owners that also are employees stay in the company in a lock-up period of 42 months. The prepaid payroll element will be recognised as employee benets expenses over the lock-up period. No change in the purchase obligation have been identied as of 31 December 2021. In the period between the acquisition date and 31 December 2021 Ironstone contributed with NOK 27 million to the Group's total revenue and a loss before taxes of NOK 2 million to the Group's prot before tax. If the acquisition had occurred at the beginning of 2021, revenues for 2021 and loss before taxes for 2021 for the group would have been NOK 79 million and NOK 3 million respectively. Page 63 / Annual Report 2021 NOTE 27 Events after the reporting date Komplett and NetOnNet to join forces On February 9th 2022 the Group announced that Komplett and NetOnNet have entered into an agreement to combine the companies. Bringing these companies together will strengthen their position as a leading online-rst electronics platform in the Nordic area with an aggregated rev- enue in 2021 of NOK 18.5 billion. The transaction is expected to enable realisation of cost synergies, mainly related to sourcing, of at least NOK 200 million on an annual basis with expected full effect within 24 months of the completion of the transaction. Komplett will retain its strong nancial position and attractive dividend policy after the transaction. The combination is structured as an acquisition by Komplett of all the shares in NetOnNet from its sole shareholder SIBA Invest Aktiebolag (“SIBA Invest”). As consideration for the shares in NetOnNet, SIBA Invest will receive 35,242,424 new Komplett shares and NOK 1,500 million in cash. Based on Komplett’s close of day share price on 8 February 2022 of NOK 62.60, this values NetOnNet’s share capital at NOK 3,706 million, corresponding to an enterprise value of NOK 3,797 million (equal to 13.3x EBIT (adj.) 2021) based on year-end 2021 net interest bearing debt (excluding lease liabilities). Komplett and NetOnNet are both attractively positioned in the large and structurally growing Nordic electronics and IT-products market and they benet further from the growth impact of accelerating online migration. Following completion of the transaction, the companies’ ag- gregated market share in the Nordic area is estimated to be in the level of 10 per cent, approximately double that of the respective companies’ current estimated market shares. Komplett and NetOnNet will together become the largest online-rst electronics platform in the Nordic area. Komplett and NetOnNet are both recognised for their scalable business models and cost leadership positions and share a strong track record of protable growth and market share gain. NetOnNet also contributes with an extensive portfolio of own brands enabled by a local purchasing presence in China since 2005. Building on their complementary market positions and strengths, Komplett and NetOnNet will be even better positioned together to deliver a market leading online shopping experience to their customers. The companies had illustrative unaudited aggregated revenue in 2021 of NOK 18.5 billion and EBIT (adj.) of NOK 674 million, and some 1,370 em- ployees (FTEs) combined across Norway and Sweden. Komplett will retain its robust nancial position and dividend capacity after the transaction. Proposed dividend for the nancial year 2021 is NOK 2.90 per share, which also will be payable to the consideration shares to be issued to SIBA Invest, subject to nal approval of such dividend at Komplett’s annual general meeting. On 16 March 2022, an extraordinary general meeting was held for the purposes of resolving certain matters in connection with its contemplated acquisition of NetOnNet AB. All resolutions proposed by the board of directors (in line with the nomination committee's recommendations) were approved. Komplett has also received clearance to complete the transaction from the competition authorities in Norway and Sweden, respe- ctively. The transaction is expected to be completed during the rst half of April 2022. Canica Invest AS (“Canica Invest”) will remain the largest and a long-term shareholder in Komplett after the combination with an approximate shareholding of 40 per cent before the intended issuance of new shares to nance the cash consideration to SIBA Invest, as further described above. Canica Invest has undertaken to attend and vote in favour for the transaction as well as the dividend proposal at the respective general meetings. Invasion of Ukraine The ongoing invasion of Ukraine has dramatic consequences which we do not see the full extent of at the time of writing this annual report. Beyond the devastating human suffering, we must also expect economic consequences in the form of reduced demand as a result of higher energy prices. Page 64 / Annual Report 2021 Statement of profit and loss For the year ended 31 December 2021 Amounts in NOK million Note 2021 2020 Operating revenues Revenues from sale of goods - - Total Operating income - - Operating expenses Employee benet expenses 9 -3 -4 Other operating expenses 9 -16 -2 Total operating expenses -19 -5 OPERATING PROFIT -19 -5 Finance income and expenses Income from investments in subsidiaries 1 Finance income 10 242 7 Finance expenses 10 -5 -9 Net Finance 238 -2 PROFIT BEFORE TAX 219 -8 Tax expense 7 -51 -4 PROFIT FOR THE YEAR 168 -12 Attributable to: Ordinary dividends 210 - Other equity 6 -41 -12 TOTAL 168 -12 Financial statements and notes - Komplett ASA Page 65 / Annual Report 2021 Statement of financial position - Assets For the year ended 31 December 2021 Amounts in NOK million Note 31/12/2021 31/12/2020 NON-CURRENT ASSETS Intangible assets Deferred tax asset 7 2 5 Total intangible assets 2 5 Non-current nancial assets Investments in subsidiaries 2,3 1 079 945 Investments in associates 3 5 5 Total other non-current assets 1 083 950 TOTAL NON-CURRENT ASSETS 1 085 955 CURRENT ASSETS Current receivables Current receivables from group companies 5 - 54 Other current receivables 5 244 0 Total current receivables 244 54 Cash and cash equivalents Cash and cash equivalents 4 - - Total Cash and cash equivalents TOTAL CURRENT ASSETS 244 54 TOTAL ASSETS 1 329 1 009 Page 66 / Annual Report 2021 Amounts in NOK million Note 31/12/2021 31/12/2020 EQUITY Paid in equity Share capital 29 29 Share premium 1 075 1 075 Other paid in equity 30 28 Total paid in equity 6 1 134 1 132 Retained earnings Other equity -577 -135 Total retained earnings 6 -577 -135 TOTAL EQUITY 6 558 997 LIABILITIES Non-current provisions Provisions 2 49 - Total non-current provision 49 - Non-current liabilities Long-term loans 8 400 - Total non-current liabilities 400 - Current liabilities Current payables to group companies 5 58 - Trade payables 0 0 Income tax payable 7 47 - Dividend 210 - Other current liabilities 5 8 12 Total Current liabilities 322 13 TOTAL LIABILITIES 771 13 TOTAL EQUITY AND LIABILITIES 1 329 1 009 Sandefjord, 23 March 2022 Board of directors, Komplett ASA Nils K. Selte Jennifer Geun Koss Lars Bjørn Thoresen Fabian Bengtsson Chair Director Director Director Sarah Willand Anders Odden Nora Elin Eldås Lars Olav Olaussen Director Worker director Worker director CEO Statement of financial position - Equity and Liabilities For the year ended 31 December 2021 Page 67 / Annual Report 2021 Statement of cash flows For the year ended 31 December 2021 Amounts in NOK million Note 2021 2020 Cash ows from operating activities Prot for the year 219 -8 Group contribution received -241 - Gain on sale of shares - -3 Changes in trade payables -0 0 Other changes in accruals -7 -21 Net cash ows from operating activities -29 -31 Investing activities Investments in subsidiaries 2,3 -82 -4 Proceeds from sale of shares 2 - 11 Proceeds received from loans to group companies 5 - 325 Net cash used in investing activities -82 332 Financing activities Proceeds from loans and borrowings 8 400 - Changes in bank overdrafts 112 -329 Group contributions received - 28 Dividend paid to equity holders of the parent -400 - Net cash (used in)/from nancing activities 112 -301 Net increase in cash and cash equivalents - - Cash and cash equivalents at beginning of year - - Cash and cash equivalents at end of year - - Page 68 / Annual Report 2021 Notes disclosure to the financial statements 2021 Note 1 Accounting policies Note 2 Corporate changes Note 3 Investments in subsidiaries and associated companies Note 4 Cash and cash equivalents Note 5 Group balances (receivables and payables) Note 6 Equity Note 7 Income tax Note 8 Pledges and guarantees Note 9 Employee benet expenses Note 10 Items that are aggregated in the nancial statement Note 11 Financial market risk Page 69 / Annual Report 2021 NOTE 1 Accounting principles The nancial statements have been prepared in accordance with the Norwegian Accounting Act and generally accepted accounting principles in Norway. The following describes the main accounting policies used in the preparation of the nancial statements of the parent company. These policies are applied in the same way in all periods presented, unless otherwise stated in the description. Subsidiaries and investment in associates Subsidiaries and investments in associates are valued at cost in the company accounts. The investment is valued as cost of the shares in the subsidiary, less any impairment losses. An impairment loss is recognised if the impairment is not considered temporary, in accordance with generally accepted accounting principles. Im- pairment losses are reversed if the reason for the impairment loss disappears in a lather period. Dividends, group contributions and other distributions from subsid- iaries are recognised in the same year as they are recognised in the nancial statement of the provider. If dividends / group contribu- tion exceed withheld prots after the acquisition date, the excess amount represents repayment of invested capital, and the distribu- tion will be deducted from the recorded value of the acquisition in the balance sheet for the parent company. Distributions The proposed dividend/group contribution for the nancial year recognised as current liabilities. Balance sheet classication Current assets and short term liabilities consist of receivables and payables due within one year, and items related to the inventory cycle. Other balance sheet items are classied as xed assets / long term liabilities. Current assets are valued at the lower of cost and fair value. Short term liabilities are recognised at nominal value. Fixed assets are valued at cost, less depreciation and impairment losses. Long term liabilities are recognised at nominal value Accounts receivable and other receivables Accounts receivable and other current receivables are recorded in the balance sheet at nominal value less provisions for doubtful ac- counts. Provisions for doubtful accounts are based on an individual assessment of the different receivables. For the remaining receiva- bles, a general provision is estimated based on expected loss. Liabilities Short-term and long-term liabilities are recognised in the balance sheet at the nominal amount at the time of establishment. Foreign currency translation Transactions in foreign currency are translated at the rate applica- ble on the transaction date. Monetary items in a foreign currency are translated into NOK using the exchange rate applicable on the balance sheet date. Non-monetary items that are measured at their historical price expressed in a foreign currency are translated into NOK using the exchange rate applicable on the transaction date. Non-monetary items that are measured at their fair value expressed in a foreign currency are translated at the exchange rate applicable on the balance sheet date. Changes to exchange rates are recog- nised in the income statement as they occur during the accounting period. Income tax The tax expense consists of the tax payable and changes to deferred tax. Period tax constitutes the expected tax payable on this year's taxa- ble result at the current tax rates on the balance sheet date and any corrections of tax payable for previous years. Deferred tax/tax assets are calculated on all differences between the book value and tax value of assets and liabilities. Deferred tax is calculated as 22 percent of temporary differences and the tax effect of tax losses carried forward. Deferred tax assets are recorded in the balance sheet when it is more likely than not that the tax assets will be utilised. Taxes payable and deferred taxes are recognised directly in equity to the extent that they relate to equity transactions. Cash ow statement The cash ow statement is presented using the indirect method. Cash and cash equivalents includes cash, bank deposits and other short term, highly liquid investments with maturities of three months or less. As of year-end cash and cash equivalents consist of cash and bank deposits. Page 70 / Annual Report 2021 NOTE 2 Corporate changes On 26 August 2021, Komplett ASA acquired 60.4 per cent of the shares in Ironstone Holding AS, a leading supplier of cloud-based IT solutions and services. See note 26 to the consolidated nancial statement for additional information. NOTE 3 Investments in subsidiaries and associated companies Subsidiary Share capital Currency Number of shares Face value Ownership= Voting rights Carrying amount Amounts in NOK million Komplett Services AS 900 NOK 900 1 000 100,0% 502 Komplett Services Sweden AB 100 SEK 1 000 100 100,0% 137 Komplett Distribusjon AS 10 000 NOK 100 100 000 100,0% 110 Komplett Distribution Sweden AB 300 SEK 3 000 100 100,0% 23 Webhallen Sverige AB 210 SEK 210 1 000 100,0% 176 Ironstone Holding AS 362 NOK 3 623 100 60,4% 131 Marked Gruppen AS 1 000 NOK 1 000 000 1 100,0% - Total 1 079 Associated company Share capital Currency Number of shares Face value Ownership= Voting rights Carrying amount Amounts in NOK million Fabres Sp. z o.o. 950 PLN 19 000 50 40,0% 5 Total 5 Information about the subsidiaries' equity and prot and loss in accordance with the latest nancial statements: Company Business Oce Equity Prot or loss before tax Amounts in NOK million Komplett Services AS Sandefjord 324 281 Komplett Distribusjon AS Sandefjord 157 53 Komplett Services Sweden AB Sweden 30 3 Komplett Distribution Sweden AB Sweden 14 0 Webhallen Sverige AB Sweden 81 28 Ironstone Holding AS Oslo 10 -2 Marked Gruppen AS Sandefjord -224 -0 NOTE 4 Cash and cash equivalents The company has no restricted bank deposits as of 31 December 2021 (or as of 31 December 2020). Page 71 / Annual Report 2021 NOTE 5 Group balances (receivables and payables) Receivables 2021 2020 Amounts in NOK million Group contribution 241,5 - Current receivables - 54,1 Other current liabilities - 0,0 Total 241,5 54,1 Liabilities 2021 2020 Amounts in NOK million Current payables to group companies 57,5 - Other current liabilities 2,4 3,7 Total 60,0 3,7 NOTE 6 Equity Receivables Share capital Share premium Other equity Total Amounts in NOK million Equity as of 31.12.20 29 1 075 -107 997 Prot for the year 168 168 Long-term incentive program 2 2 Ordinary dividends -210 -210 Extraordinary dividends -400 -400 Equity as of 31.12.21 29 1 075 -546 558 Page 72 / Annual Report 2021 NOTE 7 Income tax Basis for current income tax 2021 2020 Amounts in NOK million Prot before tax 219 -8 Non-deductible income and expenses -1 26 Changes in temporary differences -3 -26 Basis for current income tax 215 -8 Income tax expense Current income tax (22%) 47 - Tax on group contributions - - Changes in deferred tax 3 4 Income tax expense 51 4 Temporary differences and tax positions 2021 2020 Amounts in NOK million Provision -5 -8 Tax loss carried forward - -215 Interest deductions carried forward -8 -8 Total -13 -230 Differences not included in the basis for deferred tax 5 207 Basis for deferred tax -8 -23 Deferred tax asset -2 -5 Reconciliation of effective tax rate 2021 2020 Amounts in NOK million Prot before tax 219 -8 Income tax based on applicable tax rate (22%) 48 -2 Income tax expense 51 4 Deviation -2 -6 Reconciliation Non-deductible expenses 0 -6 Tax loss not included in deferred tax asset 44 - No use of tax loss carried forward -47 - Total -2 -6 Page 73 / Annual Report 2021 NOTE 8 Pledges and guarantees Type Classication Total facility Covenants (C) /Pledge (P) Utilised 31.12.2021 Utilised 31.12.2020 Amounts in NOK million Revolving Credit Facility Long-term loans NOK 500 million C - Leverage Ratio < 3.00 400 - Total 400 - On 31 May 2021, Komplett ASA entered into a NOK 500 million unsecured revolving credit facility agreement with Skandinaviska Enskilda Banken AB (publ), with a three years' duration and 1 + 1 year renewal option. As of 31 December 2021, NOK 400 were utilised. Covenants are measured and reported quarterly. The group was in compliance with nancial covenants in 2021. Financial guarantees 2021 2020 Amounts in NOK million Guarantees related to leases The tax collector 12 12 Guarantees related to other suppliers 105 251 Total 117 263 For these guarantees, Skandinaviska Enskilda Banken AB has taken a mortgage in inventories, receivables, machinery and equipment in the 100% owned subsidiary Komplett Services AS. In addition, Komplett ASA guarantees for an additional amount of NOK 1,340 million related to loans in subsidiaries. NOTE 9 Employee benet expenses Employee benet expenses 2021 2020 Amounts in NOK million Compensations to board members 1,48 0,67 Social security expenses 0,21 0,09 Total 1,69 0,76 There are no employees in the company. Group Management is employee in Komplett Services AS For additional information see note 7 to the consolidated nancial statement. Audit fees Audit fees to the auditors in the group entities is as follows (excluding VAT) 2021 2020 Amounts in NOK million Statutory audit 0,39 0,58 Other assurance services 0,12 0,03 Other non-assurance services 1,36 0,75 Total 1,87 1,36 Page 74 / Annual Report 2021 NOTE 10 Items that are aggregated in the nancial statement Finance income 2021 2020 Amounts in NOK million Interest received from group companies - 3,3 Group contribution received 241,4 - Gain on sale of shares - 3,0 Other nancial income 0,4 1,0 Total 241,8 7,3 Finance expenses 2021 2020 Amounts in NOK million Interest paid to group companies 0,1 - Other interest expenses 5,0 4,6 Other nancial expenses -0,2 4,8 Total 4,8 9,5 NOTE 11 Financial market risk Overview Komplett ASA is a holding company that has investments in subsidiaries. The company expects that future revenues will be dividends from investments in subsidiaries and associated companies. Currency Risk The company is exposed to currency risk from investments and loans to subsidiaries. For additional information see note 4 to the consolidated nancial statement. Interest rate risk Interest rate risk occurs in the short and medium term because of the company's debt having oating interest rates. The loan portfolio is linked to SEB Base rate and uctuates in relation to uctuations in this. Page 75 / Report Q4 2021 Attachment: Alternative Performance Measures (APMs) The APMs used by Komplett Group are set out below (presented in alphabetical order): EBIT adjusted: Derived from Financial Statements as operating result (EBIT) excluding one-off cost. The Group has presented this item because it considers it to be a useful measure to show Manage- ment's view on the eciency in the prot generation of the Group's operations before one-off items. Reconciliation FY'21 FY'20 Total Operating revenue 11 043 9 866 EBIT 369 276 + One-off cost 19 - = EBIT adjusted 388 276 EBIT Margin adjusted 3,5 % 2,8 % EBIT Margin: Operating result (EBIT) as a percentage of total operat- ing revenue. The Group has presented this item because it considers it to be a useful measure to show Management's view on the ecien- cy in the prot generation of the Group's operations as a percentage of total operating revenue. Reconciliation FY'21 FY'20 Total Operating revenue 11 043 9 866 EBIT 369 276 EBIT margin 3,3 % 2,8 % EBIT Margin adjusted: EBIT adjusted as a percentage of total oper- ating revenue. The Group has presented this item because it con- siders it to be a useful measure to show Management's view on the eciency in the prot generation of the Group's operations before one-off items as a percentage of total operating revenue. Reconciliation - see above under EBIT adjusted EBITDA excl. impact of IFRS-16: Derived from Financial Statements as the sum of operating result (EBIT) plus the sum of depreciation and amortisation for the segments B2C, B2B, Distribution and Other. The Group has presented this item because it considers it to be a useful measure to show Management's view on the overall picture of operational prot and cash ow generation before depreciation and amortisation in the Group's operations, excluding any impact of IFRS-16. Reconciliation FY'21 FY'20 EBIT 369 276 - EBIT - IFRS 16 -9 -8 + Dep B2C, B2B, Dist. Other 64 71 = EBITDA excl IFRS 16 424 339 Gross Margin: Gross Prot (as dened below) as a percentage of total operating revenue. The Group has presented this item because it considers it to be a useful measure to show Management's view on the eciency of gross prot generation of the Group's operations as a percentage of total operating revenue. Reconciliation - see below under Gross Prot Gross Prot: Total operating revenue less cost of goods sold. The Group has presented this item because it considers it to be a useful measure to show Management's view on the overall picture of prot generation before operating costs in the Group's operations. Reconciliation FY'21 FY'20 Total Operating revenue 11 043 9 866 - Cost of goods sold -9 581 -8 547 = Gross Prot 1 462 1 318 Gross Margin 13,2 % 13,4 % Net Interest-Bearing Debt: Interest-bearing liabilities less cash and cash equivalents. The Group has presented this item because Management considers it to be a useful indicator of the Group's indebtedness, nancial exibility and capital structure. Reconciliation FY'21 FY'20 Long-term loans 400 - + Bank overdraft 207 48 - Cash/cash equivalents -41 -54 = Net Int.-Bear. Debt 566 -6 Net Working Capital: Working capital assets, comprising inven- tories plus total current receivables less trade receivables from deferred payment arrangements less current lease receivables, less working capital liabilities, comprising total current liabilities less current lease liabilities less bank overdraft. Management considers it to be a useful indicator of the Group's capital eciency in its day- to-day operational activities. Reconciliation FY'21 FY'20 Inventories 1 305 880 + Total Curr. receivables 1 152 900 - Deferred payment -130 -152 - Curr. lease receivables -12 -9 - Total curr. liabilities -1 984 -1 586 + Curr. lease liabilities 80 82 + Bank overdraft 207 48 = Net Working Capital 619 163 Page 76 / Report Q4 2021 Operating Cost Percentage (adj.): Total operating expenses less cost of goods sold and One-off cost as a percentage of total oper- ating revenue. The Group has presented this item because Manage- ment considers it to be a useful measure of the Group's eciency in operating activities. Reconciliation FY'21 FY'20 Total Operating revenue 11 043 9 866 - - Total operating exp. 10 674 9 589 - Cost of goods sold -9 581 -8 547 - One-off cost -19 - = Total operating expenses (adj.) 1 074 1 042 Operating Costs % 9,7 % 10,6 % Operating Free Cash Flow: EBITDA excl. impact of IFRS16 less investment in property, plant and equipment, less change in Net Working Capital less change in trade receivable from deferred payment arrangements. The Group has presented this item because Management considers it to be a useful measure of the Group's operating activities' cash generation. Reconciliation FY'21 FY'20 EBITDA excl IFRS 16 424 339 - Investments -46 -39 +/- Change in Net Working Capital -455 71 +/- Change in deferred payment 22 11 = Operating Free Cash Flow -55 382 Total operating expenses (adj.): Total operating expenses less cost of goods sold and One-off cost. The Group has presented this item because Management considers it to be a useful measure of the Group's eciency in operating activities. Reconciliation - see above under Operating Cost Percentage Page 77 / Annual Report 2021 BDO AS R amdalveien 6 Postboks 269 Sentrum 3101 Tønsberg Independent auditors report Komplett ASA - 2021 Page 1 of 4 Independent Auditor’s Report To the General Meeting of Komplett ASA Report on the Audit of the Financial Statements Opinion We have audited the financial statements of Komplett ASA. The financial statements comprise: The financial statements of the parent company, which comprise the balance sheet as at 31 December 2021, income statement, and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies, and The financial statements of the group, which comprise the balance sheet as at 31 December 2021, and income statement, statement of comprehensive income, statement of changes in equity and cash flows for the year then ended, and notes to the financial statements, including a summary of significant accounting policies. In our opinion: The financial statements comply with applicable statutory requirements, The accompanying financial statements give a true and fair view of the financial position of the company as at 31 December 2021, and its financial performance and its cash flows for the year then ended in accordance with 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 2021, and its financial performance and its cash flows for the year then ended in accordance with International Financial Reporting Standards as adopted by the EU. Our opinion is consistent with our additional report to the Audit Committee. Basis for Opinion We conducted our audit in accordance with International Standards on Auditing (ISAs). Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are independent of the Company and the Group as required by laws and regulations and 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. Page 78 / Annual Report 2021 Independent auditors report Komplett ASA - 2021 Page 2 of 4 We have been the auditor of the Komplett ASA for 9 years from the election by the general meeting of the shareholders in 2013 for the accounting year 2013. 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. Inventory amounts to NOK 1 305 million in the Financial Statements of the Group. We refer to note 15 for more information on provisions for impairment on inventory. Inventory is measured at the lower of cost and net realizable value. When determining the provisions for impairment on inventory, judgements are applied to assess the items which may ultimately be sold below cost due to reduced customer demand and in estimating the net realizable value of these items. Different categories are assessed individually and are subject to specific provisions for impairment based on information of historical and statistical sales data as well as inventory days for inventory categories per 31.12.2021. These assessments are also based on management’s expectations for future sales. The complexity and judgements involved has led us to define this as a high-risk area for the audit. We have reviewed management’s policy for assessing the impairment of inventory and reviewed that management applies the impairment policies consistently year on year. Further, we have reviewed the documentation of obsolescence for inventory and tested the assumptions used for reasonableness. Our audit procedures also included observing the stocktaking in a selection of stores and the central warehouse and reviewing internal controls and procedures as well as performing re-counts. We have also tested internal controls and procedures related to stocktaking at the central warehouse, as well as procedures and controls when Komplett receive goods into the warehouse. In addition, we have tested controls related to the calculation of cost of goods sold. Other Information The Board of Directors and the Managing Director (management) is responsible for the other information. The other information comprises the Board of Directors’ report and other information in the Annual Report, but does not include the financial statements and our auditor’s report thereon. Our opinion on the financial statements does not cover the other information. 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 Page 79 / Annual Report 2021 Independent auditors report Komplett ASA - 2021 Page 3 of 4 material misstatement of this other information, we are required to report that fact. We have nothing to report in this regard. Based on our knowledge obtained in the audit, it is our opinion the Board of Directors’ report is consistent with the financial statements and contains the information required by applicable legal requirements Our opinion on the Board of Director’s report applies correspondingly for statements on Corporate Governance and Corporate Social Responsibility. Responsibilities of the Board of Directors and the Managing Director for the Financial Statements Board of Directors and the Managing Director (management) are responsible for the preparation of financial statements that give a true and fair view, for 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 Report on the compliance with Regulation on European Single Electronic Formaf (ESEF) Opinion We have performed an assurance engagement to obtain reasonable assurance that the financial statements with file name kompl-2021-12-31-en.zip have been prepared in accordance with Section 5-5 of the Norwegian Securities Trading Act (Verdipapirhandelloven) and the accompanying Regulation on European Single Electronic Format (ESEF). Page 80 / Annual Report 2021 Independent auditors report Komplett ASA - 2021 Page 4 of 4 BDO AS, a Norwegian 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. In our opinion, the financial statements have been prepared, in all material respects, in accordance with the requirements of ESEF. Management’s Responsibilities Management is responsible for preparing, tagging and publishing the financial statements in the single electronic reporting format required in ESEF. This responsibility comprises an adequate process and the internal control procedures which management determines is necessary for the preparation, tagging and publication of the financial statements. Auditor’s Responsibilities For a description of the auditor’s responsibilities when performing an assurance engagement of the ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger Tønsberg, 23 March 2022 BDO AS Trond Vidar Vettestad State Authorised Public Accountant Contact Contact person Krister Pedersen CFO Mobile: +47 95 24 50 37 E-mail: [email protected] Visiting address Østre Kullerød 4 3241 Sandefjord, Norway Mail address P.O. Box 2094 3202 Sandefjord, Norway Web www.komplettgroup.com/investor-relations/ Linkedin komplettgroup Facebook komplettgroup Instragram komplettgroup
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