Chip Bidco AS
Group Annual report
2021
TABLE OF CONTENTS
LETTER FROM CEO 3
BOARD OF DIRECTORS REPORT 6
GROUP ANNUAL ACCOUNTS 19
COMPANY ANNUAL ACCOUNTS 55
AUDITORS REPORT 67
Dear employees, customers, and shareholders
2021 was truly an extra-
ordinary year for Cegal.
First and foremost, we
decided to execute the
largest acquisition in
company history and join
forces with SYSCO to
build a global tech
powerhouse, specialized
in the energy sector.
At the same time, we have managed to deliver
good growth, solid profitability, low turnover and
high employee satisfaction while conducting a
large and successful merger and integration
project on time and on budget.
That is something we should be very proud of,
and something our entire team and all our
employees deserve big kudos for. Many people
have gone an extra mile beyond their daily jobs,
and strong collaboration have made this happen
at the back end of an already challenging Covid
situation.
Overall, we grew the combined Cegal and
SYSCO with 4.7% in 2022, with an adjusted
EBITDA margin of 20.8%. Today, 60% of
Cegal`s revenues are recurring, and we have a
very solid estimated order backlog of
approximately NOK 2.6 billion and a fast
growing pipeline.
Some of the highlights of the year:
• We have executed the strategy set out in
2020, to broaden our footprint in the
energy industry through an increased
focus on renewables, through the
acquisition of SYSCO
• We have won key new contracts with
Haugaland Kraft, Helse SørØst, Shell,
Aker BP, Easee and BW Energy
• We have been recertified for ISO 27001
(security) and 9001 (quality), and newly
certified on ISO 14001 (environment) and
45001 (health and safety) as promised last
year. All with great feedback from the
auditors
• We see especially strong growth in our
core Cloud and Data Operations managed
services.
• We have launched new software for
energy production and dispatch and won
breakthrough new contracts with
Wintershall DEA and Shell
• We have established a clear strategy and
game plan for the merged Cegal, ready to
be executed upon in 2022
• We have a new brand platform ready for
launch in April 2022
• The attractiveness of our company as an
employer is very strong, and we have a
great momentum in the fierce fight for
talent in tech, with 138 organic new hires
in 2021 and low attrition at 11%.
A LEADING, GLOBAL TECH COMPANY FOR THE ENERGY SECTOR,
ENABLING A MORE SUSTAINABLE FUTURE
CEO LETTER 2021 3
Chip Bidco • ANNUAL REPORT 2021
The vision for the combined Cegal going
forward is to build a next generation tech
company that is enabling a more sustainable
future.
The energy industry is transforming at a very
high pace, and we see a clear trend in
traditional oil and gas companies joining
forces with power & utilities companies to
collaborate towards more renewable and
sustainable energy. These are not different
industries anymore, but a joint Energy sector,
committed to producing secure, reliable and
more renewable energy.
The key to this green energy transformation
lies in technology, and we believe we will see
unprecedented tech investments within this
sector over the next decade. Not only on
windmills, solar panels and equipment, but
also on software, data analytics services,
integration, cloud operations, and security.
On top of this rapid transformation, customers
are struggling with increasingly complex IT,
huge amounts of data from a myriad of
systems, sensors and sources, increased
demands on turning tech investments into
business value, and increased pressure on
security and compliance.
That is why Cegal`s mission going forward is
to turn complex IT into digital success stories,
by delivering modern Industry Software that
increases efficiency and control, super skilled
Consulting services that integrate
technologies and turn data into insight, and
specialized Cloud Operations services of
mission critical IT in modern hybrid cloud
environments.
Going into 2022 we have a clear game plan in
place to realize our vision, scale for larger
customers, solve new and greater challenges,
and provide full stack deliveries to the global
energy sector. Our focus will be in three
areas where we can improve further and
become even better:
• Attracting and developing top people while
building an unstoppable culture. Cegal is
only hearts and minds, and everything
stops and starts with people that are
included, seen, heard and appreciated
• Going after the right value and growth
pockets in the market, with packaged
offerings that have crystal clear value
propositions with incredible value for our
customers. The whole IT industry has a
huge potential for improvement in this
area. So do we in Cegal
• Having a surgical go to market approach
followed by strong execution, excellence in
deliveries and world class customer
service. Meaning, not running after every
opportunity in every country, but focusing
hard on our best offerings where we drive
the highest customer value and have the
best chances of winning against
competition.
CEO LETTER 2021 4
Chip Bidco • ANNUAL REPORT 2021
We are hopefully approaching the end of the
Covid-19 pandemic. On one hand we have
seen it bring a spike in technology adoption
and increased work flexibility from home
offices. In addition, we have managed to keep
our service level towards customers fully
intact, and the resilience in our business
model has become evident as we have
delivered solid growth, despite finding it
challenging to open brand new customer
relationships. On the other hand, it has been
more difficult to integrate new employees and
build belonging and culture in the company
with “everybody on Teams”. So, we are really
looking forward to our society opening back
up and for our people to come back to vibrant
and engaging offices in a new normal.
As I am writing this, we are well into the
second quarter of 2022. I genuinely believe
we have one of the most exiting tech
companies around in the making, in an
extremely important and meaningful energy
sector.
The broader energy sector represents close
to 25% of the world’s GDP and it is currently
experiencing two connected megatrends,
renewable transition and digitalization. At the
epicenter of this sits Cegal, with incredibly
competent people and a relevant, credible
and unique differentiation: expertise in
energy, superpowers in technology and
scalable as a service delivery models.
A CEO cannot ask for more, and I am both
humble, proud, and extremely excited to have
been given the chance to be part of this team
and this journey.
I would like to thank the whole Cegal team,
our shareholders, our customers, and our
partners for all the hard work and great
collaboration throughout 2021.
Now we are buckling up to continue our
growth journey and to realize our dream of
becoming a stellar next generation tech
company, enabling a more sustainable future.
Best regards,
Dagfinn Ringås (dig. sign.)
CEO Cegal Sysco
CEO LETTER 2021 5
Chip Bidco • ANNUAL REPORT 2021
Chip Bidco, a Cegal Sysco Group company,
is a trusted global technology powerhouse
specialized in the energy sector, providing
hybrid cloud solutions, software and
consultancy within IT, business, geoscience,
and data management. The Group provides
broad and deep domain competencies across
the whole energy vertical, including
renewables. Our employees are working from
offices in Stavanger (HQ), Oslo, Trondheim,
Bergen, Hamar, Haugesund, London,
Stockholm, Copenhagen, Aberdeen, Dubai,
Houston, Calgary and Kuala Lumpur,
enabling a strong geographical presence.
In August 2021, Cegal and Sysco announced
that the two companies would join forces to
create a leading, global tech company for the
energy sector, and take a position as a
powerful contributor to the green shift.
Traditionally, Cegal has been an important
provider of technology to the international Oil
& Gas industry. The transformation of this
sector and the move towards renewables is
happening at a high speed, with technology
and diversity as important keys. Sysco has a
strong position among hydropower and grid
companies. The merger enables the Group to
scale for larger customers, to solve new and
greater challenges, and to provide full stack
deliveries to the global energy sector.
A new organization has been launched, a
new leadership team has been appointed,
and a broad set of workstreams have been
executed and completed - all while at the
same time maintaining solid growth in the
business, high employee satisfaction
numbers on both sides, high employee
retention and very positive feedback from our
customers. In addition, the Group acquired
Envision in June 2021, further strengthening
its consulting arm. As at 31 December 2021,
the Group had 739 employees compared to
388 as at 31 December 2020.
Scope of Business
Going forward, the Group’s vision is to build a
true nextgen tech company that enables a
more sustainable future.
Business units
Cloud operations
The Group’s cloud-based solutions provide
high performance IT systems and customized
software solutions to more than 15 000 end
users. We support more than 1 300
applications, and our support center offers a
single point of contact for all IT related
questions. We have customized our offering
for the energy sector, in particular with
respect to advanced geoscience applications
and critical on/offshore operations, the Group
supports all main exploration and production
applications based on best practices.
The Group is at the forefront of digitalizing the
energy industry with its “GeoCloud” value
proposition - an open integration platform
tailored to the industry. As a strategic partner
with deep domain knowledge, the Group
enables its customers to manage and
structure their data in order to perform
advanced analytics, thereby increasing
productivity and efficiency in their exploration
and production.
BOARD OF DIRECTORS’ REPORT
CHIP BIDCO AS
BOARD OF DIRECTORS’ REPORT 2021 6
Chip Bidco • ANNUAL REPORT 2021
We have a specialized offering to the energy
industry, in particular with respect to
advanced geoscience applications and critical
on/offshore operations. We support all main
exploration and production applications based
on best practices.
Our offering delivers the benefits of cloud
computing to its customers, all within one
user friendly digital workspace interface.
In 2021, Cloud operations represented 56%
of our revenues compared to 63% in 2020.
Products
The Group develops and sells software to
extend, improve and speed up workflows
within geology, geophysics, reservoir
engineering and data management as well as
providing energy products and third-party
resale.
In 2021, Products represented 17% of our
revenues compared to 14% in 2020.
Consulting & Business Services
The Group offers highly experienced on-site
consultants and expert geomodelers,
primarily to the energy industry.
We provide onsite IT infrastructure services
and support for both short-term and long-term
assignments, in addition to ad-hoc based
technical work. Several of our consultants
hold an offshore certificate and have
experience from both domestic and
international customer assignments. In
addition, we offer the development of high-
quality customized software solutions.
We have core competencies within program
& project management, change management,
process management and enterprise
architecture. We typically provide specialized
advisory roles within areas such as
information security management, information
management, test management, information
management, application management,
business intelligence and data science.
In 2021, Consulting & Business Services
represented 26% of our revenues compared
to 18% in 2020.
Other
Other non-commercial resale represented
less than 1% of our revenues in 2021
compared to 5% in 2020.
The Group spent NOK 15.5 million on
research & development activities during the
year, providing new products to the market
and improving existing products with new
functionality.
BOARD OF DIRECTORS’ REPORT 2021 7
Chip Bidco • ANNUAL REPORT 2021
Statement of income, cash flow and
balance sheet
The Group’s financial statement for 2021 has
been prepared in accordance with the IFRS
accounting principles as adopted by EU.
Operating Revenue
Actual turnover in the Group was NOK 992.4
million in 2021 compared to 788.9 million in
2020.
Operating Result (EBITDA – Alternative
Performance Measure)
The Group’s earnings before interest, tax,
depreciation and amortization (EBITDA) was
NOK 142.3 million in 2021 compared to NOK
192.1 million in 2020. The reason for the
lower EBITDA compared to 2020, is primarily
related to transaction costs due to the merger
between Cegal and Sysco.
Depreciations and amortizations
Depreciation of tangible assets and
amortization of intangible assets was NOK
193.8 million in 2021 compared to NOK 193.5
million in 2020.
Net financial items and profit before and after
tax
Net financial items amounted to NOK -91.2
million in 2021 compared to NOK -80.0 million
in 2020 and profit tax was NOK 30.5 million
resulting in a net loss for the year of NOK -
110.1 million compared to NOK -60.1 million
in 2020.
Cash flow and financial positions
Total cash flow from operations for the Group
was NOK 195.5 million compared to NOK
114.6 million in 2020.
Cash flow from investment activities was
NOK -785.0 million compared to NOK -29.6
million in 2020.
Cash flow from financing activities was NOK
646.5 compared to NOK -121.5 million in
2020.
As at 31 December 2021, the Group had
bank deposits totaling NOK 93.3 million plus
available bank overdraft facilities of NOK 25.8
million. As at 31 December 2020, the Group
had bank deposits totaling NOK 36.3 million.
The Group's current assets amounted to
11.3% of total assets per 31 December 2021.
Total assets at the end of the year was NOK
3 285.2 million and the equity ratio was
33.9%.
As at 31 December 2020, the Group’s current
assets amounted to 10.2% of total assets of
NOK 1 966.7 million and the equity ratio was
33.5%.
BOARD OF DIRECTORS’ REPORT 2021 8
Chip Bidco • ANNUAL REPORT 2021
Corporate governance in the group and Chip
Bidco AS comprises the values, goals, and
overall principles according to which the
Group is managed and controlled to secure
the interests of shareholders, customers,
employees, and other interested parties of the
company.
The Group submits in accordance with the
Accounting Act § 3-3b and The Norwegian
Code of Practice for Corporate Governance a
statement of the principles and practices of
corporate governance.
Accounting Act § 3-3b, 2nd paragraph
1. Principles and practices for corporate
governance in the group is based on
Norwegian law and the group follows The
Norwegian Code of Practice for Corporate
Governance issued by The Norwegian
Corporate Governance Boars (NCGB), as far
as it is appropriate for IT companies.
2. The recommendation for corporate
governance is available at nues.no.
3. Any deviations of compliance with The
Norwegian Code of Practice for Corporate
Governance are commented in corporate
governance below.
4. Reference is made to point 10 under The
Norwegian Code of Practice for Corporate
Governance, and corporate governance
below for a description of internal control and
risk management related to the financial
reporting process.
5. Reference is made to point 6 under The
Norwegian Code of Practice for Corporate
Governance, and to corporate governance
below for a description of compliance.
6. See points 6, 7, 8 and 9 under The
Norwegian Code of Practice for Corporate
Governance, and corporate governance
below.
7. See the explanation of section 8 of the
recommendation below.
8. See point 3 under The Norwegian Code of
Practice for Corporate Governance below
The Norwegian Code of Practice for
Corporate Governance
The description below explains how the 15
points in The Norwegian Code of Practice for
Corporate Governance of 14 October 2021
have been followed up in the Group.
The Norwegian Code of Practice for
Corporate Governance, published by the
Norwegian Corporate Governance Board
(NCBG), is available at www.nues.no.
BOARD OF DIRECTORS’ REPORT 2021 9
Chip Bidco • ANNUAL REPORT 2021
Statement of compliance
1. Statement of corporate governance
Chip Bidco AS and the Group follows the
Norwegian Code of Practice for Corporate
Governance and complies with its
recommendations that are relevant to a
company in the IT industry. There are no
significant deviations between the
recommendation and the implementation in
the group. The group has prepared its own
guidelines for social responsibility and wants
to use the company's overall knowledge and
resources to contribute to sustainable
development for the society we are a part of.
The group shall take financial, social, and
environmental responsibility by operating
profitably, ethically, and sustainably in a long-
term perspective.
The Group’s Code of Conduct and Ethical
Guidelines were last revised in 2021 and it
forms a framework for behavior and attitudes
in accordance with the norms, rules and laws
set by the authorities, by the society, and
between the individual employees. The
ethical guidelines apply to all employees in
the group, including temporary staff and hired
consultants. The guidelines, except for
employee-related sections, also apply to the
group's shop stewards. The group's
operations depend on trust from customers,
local communities and public authorities, and
the ethical guidelines are based on the
Group's core values
Inventive – Courageous – Passionate –
Balanced
Deviation from section 1 of the
recommendation: None
2. Business
Chip Bidco AS is a holding company and its
purpose is to invest in and own shares,
financial instruments and interests in other
companies, and other activities naturally
related to that.
Chip Bidco AS is wholly-owned (100%) by
Chip Midco AS, which is wholly owned
(100%) by Chip Topco AS. Credo Partners
AS, Norvestor SPV 1 Holding AS and
employees/management/board of the Cegal
group are indirect owners of the Company
with indirect shareholdings of 8%, 60% and
32%, respectively. The Company's board of
directors comprise of only one board member
and no employees are employed in Chip
Bidco AS. The Company Chip Bidco AS is not
an operative entity and has therefore not
established a separate management team.
The Group's operations are thereby carried
out through the Company's operating
subsidiaries. Cegal Group is a professional
digitalization partner delivering cloud
solutions, software applications and
consultancy services for the energy industry.
Chip Bidco AS is a holding company with no
employees, no management or operational
activities and with one sole Board member.
Chip Bidco AS elects its board members on
the general meeting.
Deviation from section 2 of the
recommendation: None
BOARD OF DIRECTORS’ REPORT 2021 10
Chip Bidco • ANNUAL REPORT 2021
3. Equity and dividends
Total assets at the end of the year was NOK
3 285.2 million and the equity ratio was
33.9%.
No dividend is proposed for 2021.
Deviation from section 3 of the
recommendation: None
4. Equal treatment of shareholders
The board of Chip Bidco AS emphasize that
all shareholders must be treated equally and
have the same opportunity for influence. The
Company's board of directors comprise of
only one board member and no employees
are employed in Chip Bidco AS. The board
instructions further stipulate that board
members shall, on their own initiative, state
whether any interest the individual or his or
her close relatives may have in the decision
of a question. Unless the board member
himself /herself chooses to resign during the
consideration or decision of a case, the board
shall decide whether he or she shall resign. In
the assessment, all aspects of personal,
financial, or other interests of the board
member is included, in addition to the need
for public confidence in the group's activities.
The board's assessments of impartiality
issues are recorded.
Significant transactions in 2021:
In 2021, Cegal signed the acquisition of
Sysco. Sysco was a Nordic provider of smart
applications, specialized consultancy services
and secure operation and monitoring of IT
infrastructure and databases, primarily
serving customers in the power and utilities
market. The acquisition significantly
enhanced Cegal's presence in the power and
utility market, and the combined company aim
to create a global technology powerhouse for
the energy sector. The acquisition was partly
financed with a NOK 600 million bond issue
and closed on 7 October 2021.
On January 3rd 2022 Sysco AS was merged
into Cegal AS.
Deviation from section 4 of the
recommendation: None
5. Shares and negotiability
Chip Bidco AS’s shares are not listed on a
stock exchange and the vast majority of the
Group’s subsidiaries are wholly owned. Chip
Bidco AS is wholly-owned (100%) by Chip
Midco AS, which is wholly owned (100%) by
Chip Topco AS.
BOARD OF DIRECTORS’ REPORT 2021 11
Chip Bidco • ANNUAL REPORT 2021
Credo Partners AS, Norvestor SPV 1 Holding
AS and employees/management/board of the
Cegal group are indirect owners of the
Company with indirect shareholdings of 8%,
60% and 32%, respectively.
Deviation from section 5 of the
recommendation: None
6. General meetings
The board of directors ensure that the
company’s shareholders can participate in the
general meeting. The resolutions and
supporting information distributed are
sufficiently detailed, comprehensive, and
specific to allow shareholders to form a view
on all matters to be considered at the
meeting. Deadline for shareholders to give
notice of their intention to attend the meeting
is set as close to the date of the meeting as
possible. The members of the board of
directors and the chairman of the nomination
committee attend the general meeting. The
general meeting is able to elect an
independent chairman for the general
meeting.
Deviation from section 6 of the
recommendation: None
7. Nomination committee
The Company's board of directors comprise
of only one board member and there is no
need for a nomination committee in Chip
Bidco AS.
Deviation from section 7 of the
recommendation: None
8. Board of directors: composition and
independence
The board consists of one board member
elected by the General Meeting.
Deviation from section 8 of the
recommendation: None
9. The work of the board of directors
The board of Chip Bidco AS has an annual
plan for its work with special emphasis on
goals, strategy and business plans. The
board has the overall responsibility for the
management and organization of the
company in accordance with laws,
regulations, articles of association and
resolutions passed at the general meeting.
The board receives periodic reporting of profit
development, market development,
management, personnel and organizational
development and development in the risk
picture and risk exposure for the company.
The board's responsibilities and tasks are
reviewed annually, and the board's work
follows an established work plan and
instructions.
BOARD OF DIRECTORS’ REPORT 2021 12
Chip Bidco • ANNUAL REPORT 2021
The board conducts an annual self-evaluation
of its work with a view to working methods,
case processing, meeting structure and
prioritization of tasks. The requirements for
composition and competence are met. In
2021, two ordinary board meetings were held.
The attendance percentage in 2021 was
100%. There is a board insurance in place
for Chip Topco AS which also cover all
subsidiaries including Chip Bidco AS.
Deviation from section 9 of the
recommendation: None
10. Risk management and internal control
Risk management in the group shall support
the company's strategic development and
goal achievement as well as ensure financial
stability and sound management. The
company's overall goals and strategic choices
are determined through regular strategy
processes. The board of Chip Bidco AS is
responsible for ensuring that the group has
subordinated capital that is prudent based on
adopted risk profile and regulatory
requirements. The board sets the overall
objectives such as risk profile and return
target. The board also determines the overall
framework, authorizations and guidelines for
risk management in the Group.The board of
Cegal Group AS reviews the group's
development on a quarterly basis within the
most important risk areas in relation to
adopted policies, frameworks and target
figures, and conducts an annual review of
internal control. The HSEQ department is
organized independently of the business units
and reports to the CFO.
The department is responsible for
independent risk assessment, risk reporting
and the overall risk monitoring in the group
and reports periodically to the board on
developments in the risk picture.
The company's management is responsible
for establishing and maintaining sound
internal control related to the group's financial
reporting. The internal control related to
financial reporting in the group is a process
that under the supervision of the CEO and
CFO is designed to provide reasonable
assurance for reliable financial reporting and
preparation of the group's quarterly and
annual accounts in accordance with IFRS as
adopted by the EU. The accounting principles
applied by the Group are also in accordance
with IFRS as issued by the International
Accounting Standards Boards (IASB). The
company's finance department prepares
financial reporting for the group. The
department ensures that the reporting takes
place in accordance with current legislation,
accounting standards and the Group's
accounting principles. The department has
established processes that ensure that the
accounting reporting is quality assured and
that any errors and deficiencies are followed
up and corrected on an ongoing basis. For all
financial reporting, several control measures
have been established to ensure correct,
valid, and complete reporting. In addition,
detailed reconciliation controls are performed
daily and monthly.
Deviation from section 10 of the
recommendation: None
BOARD OF DIRECTORS’ REPORT 2021 13
Chip Bidco • ANNUAL REPORT 2021
11. Remuneration of the board of directors
No remuneration has been paid to the one
member of the board in 2021
Deviation from section 11 of the
recommendation: None
12. Remuneration of executive personnel
No remuneration has been paid to senior
executives in 2021 as there are no
employees in Chip Bidco AS.
Deviation from section 12 of the
recommendation: None
13. Information and communications
Chip Bidco AS emphasis strongly on correct,
relevant and timely information about the
company's development and results to create
confidence in the investor market. Information
to the market is disseminated through
investor presentations, websites on the
Internet, press releases and financial reports.
Regular presentations are held with investors,
banks and other partners.
Deviation from section 13 of the
recommendation: None
14. Take-overs
In a bid situation, the company’s board of
directors and management have an
independent responsibility to help ensure that
shareholders are treated equally, and that the
company’s business activities are not
disrupted unnecessarily. The board has a
particular responsibility to ensure that
shareholders are given sufficient information
and time to form a view of the offer.
Deviation from section 14 of the
recommendation: None
15. Auditor
The external auditor is elected by the general
meeting. Ernst & Young was the Group’s
external auditor in 2021.
The external auditor participates in board
meetings where the annual accounts are on
the agenda, and issues the statutory
confirmation of the financial information
provided by the group. The board informs the
general meeting of the auditor's remuneration
in a meeting. The external auditor has not
performed significant consulting assignments
for the Group. Specified auditor's fees for
financial auditing and services other than
auditing are stated in the note to the annual
accounts.
Deviation from section 15 of the
recommendation: None
BOARD OF DIRECTORS’ REPORT 2021 14
Chip Bidco • ANNUAL REPORT 2021
Going concern
In accordance with the Accounting Act § 3-3a,
we confirm that the financial statements have
been prepared under the assumption of going
concern. This assumption is based on the
current cash balances, the current overdraft
facility and the Group’s long-term strategic
financial trajectory.
Although the majority of Group’s revenues
are generated in the energy sector, our
business model has proven robust even in
tough times. We see the digitalization in the
energy sector as a growth opportunity as we
offer products and services that will enable
our customers more flexibility and also to
operate more cost efficient. With Envision and
Sysco Group now onboard, we have
diversified our value proposition further with
more focus on the renewable energy industry.
Although 2021 has been influenced by Covid-
19, the Group has once again proven very
resilient to market changes. We are carefully
monitoring the global situation, and follow
advice from national and world health
organizations and, most importantly, maintain
a dynamic business continuity plan that
addresses the concerns and wellbeing of the
organization’s employees as well its physical
and financial assets including customer
relationships. Our business continuity plan is
the risk mitigating cornerstone in monitoring
these risks associated with Covid-19.
Even if the Group’s exposure to the ongoing
situation in Ukraine is considered as limited,
we have established a task force to monitor
the situation on a continuous basis,
addressing social aspects of employees as
well as potential consequences on the
financial and legal side.
Risk factors
Market risk
The Group has exposure to currency and
interest rate risk. Currency risk includes risk
from contractual purchase or sale
denominated in foreign currencies, in addition
to foreign investments and future cash flow
from these investments.
This currency risk is reduced by having parts
of the cost base in foreign currencies as well.
Cegal is on an ongoing basis considering
various risk mitigating factors including
hedging of foreign currency risks.
The Group is also exposed to changes in
interest rates.
BOARD OF DIRECTORS’ REPORT 2021 15
Chip Bidco • ANNUAL REPORT 2021
Credit risk and oil price risk
The loss on receivables has historically been
very limited for the Group, and the risk of
losses on receivables is also considered very
limited. Our core offerings has proven
resilient to changes in the oil price historically.
Liquidity risk
The Group held liquid assets of NOK 93.3
million at the end of the year compared to
NOK 36.3 million in 2020, as well as having
access to bank overdraft facilities of NOK
25.8 million. The Group considers its liquidity
as good, and its exposure to liquidity risk is
considered to being limited.
Work environment
Sick leave in the Group was approximately
2.3% in 2021 compared to 1.9% in 2020.
During the course of the year, it has not
occurred or been reported serious workplace
accidents, which resulted in significant
damage or injuries. The working environment
is good, and improvements are being
continuously evaluated and implemented.
Equality
At the end of 2021, the Group consisted of a
total of 739 employees compared to 388 in
2020, including 148 (61 in 2020) women and
591 (327 in 2020 men. The goal is to be a
workplace where there is full gender equality.
The Board and management are aware of the
societal expectations on measures to
promote gender.
Discrimination
The Anti-Discrimination Act is to promote
equality, ensure equal opportunities and
rights and prevent discrimination based on
ethnicity, national origin, ancestry, color,
language, religion and belief. The Group
works actively, purposefully and
systematically to promote the purpose within
our business. The activities include
recruitment, pay and working conditions,
promotion, development and protection
against harassment.
The Group aims to be a workplace where
there is no discrimination on grounds of
disability. The Group works actively and
purposefully to design and facilitate the
physical conditions so that the different
functions can be used by as many people as
possible. For employees or applicants with
disabilities, individual arrangements are made
with regards to workplaces and work tasks.
Environment
The operations do not affect the external
environment beyond the normal for the
company business.
BOARD OF DIRECTORS’ REPORT 2021 16
Chip Bidco • ANNUAL REPORT 2021
Subsequent events
On 21 March 2022, the Group listed a senior
secured 1 500 million bond at the Oslo Stock
Exchange after having previously been listed
on Nordic ABM. The bond has a maximum
principal amount of 1 800 million and the
maturity date is 13 December 2024.
Furthermore, the Group has established a
group, designated by management, to
monitor its exposure to the ongoing situation
in Ukraine. Currently, the exposure is
considered limited, however we are
monitoring all relevant aspects of the situation
and take appropriate measures whenever
appropriate.
In addition, the Group has a non-sanctioned
subsidiary established in Russia as part of
serving two of its customers in the country.
However, the revenues from the Russian
entity is very limited, 0.7% of the total, and
the assets are only 0.1% of the Group’s total
assets. Hence, the exposure for the Group is
considered limited in terms of the Russian
entity.
Future outlook
The Group’s main markets are expected to be
growing in 2022.
As the market leader for cloud enablement on
the Norwegian Continental Shelf (“NCS”), a
strong and skilled consulting unit and a global
centre for innovation in energy sector with a
portfolio of software customers in more than
40 countries across the world, the Group is
well positioned to continue its strong and
profitable growth path, focusing on the energy
sector.
Based on the current demand from our
customers, a focused organization, new
unique products and a strong order estimated
order backlog of NOK 2.6 billion, the
company expects further growth, increased
profitability and a positive cash flow going
forward.
Net profit and allocations
For 2021, the Board proposes the following
allocation of the net income for Chip Bidco
Group:
Transferred loss to other equity: NOK -112.3
million
Total allocation: NOK -112.3
million
No dividend is proposed in respect of the
2021 financial year.
BOARD OF DIRECTORS’ REPORT 2021 17
Chip Bidco • ANNUAL REPORT 2021
Stavanger, 30 April 2022
Fredrik Gyllenhammar Raaum (dig. sign.)
Chairman
The Board of Directors and the CEO confirm that to the best of our knowledge the financial
statements as of 31 December 2021, which have been prepared in accordance with IFRS as
adopted by the European Union and generally accepted accounting practice in Norway,
provides a true and fair view on the Group’s consolidated assets, liabilities, financial position
and result.
We also confirm, to the best of our knowledge that the Board of Directors’ report includes a true
and fair overview of the development, performance and financial position of the Group, together
with a description of the principal risks and uncertainties they face.
RESPONSIBILITY STATEMENT
RESPONSIBILITY STATEMENT 2021 18
Chip Bidco • ANNUAL REPORT 2021
Stavanger, 30 April 2022
Fredrik Gyllenhammar Raaum (dig. sign.) Dagfinn Ringås (dig. sign.)
Chairman CEO
Chip Bidco AS
Group annual
accounts 2021
GROUP ANNUAL ACCOUNTS 20
Chip Bidco • ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
(NOK THOUSANDS)
NOTE 2021 2020
Revenues
Sales revenue 20 990 042 785 535
Other operating income 2 336 3 354
Total Revenues 992 378 788 889
Operating expenses
Cost of materials 288 603 213 069
Payroll expenses 13 473 514 336 500
Other operating expenses 8, 13 88 005 47 212
Total operating expenses before depreciation 850 122 596 781
Earnings before interest, tax, depreciation & amortization (EBITDA) 142 256 192 108
Depreciation and amortization 7, 8 193 818 193 514
Operating result (EBIT) -51 562 -1 406
Financial income and expenses
Interest income 1 940 4 059
Interest expenses 15 -82 672 -64 362
Financial cost -7 809 -17 308
Net foreign exchange gain/-loss -2 650 -2 354
Net financial income (loss) -91 191 -79 965
Net profit (loss) before tax -142 752 -81 371
Tax expense 14 30 502 21 296
Net profit (loss) for the year -112 250 -60 075
Non-controlling interest 592 0
Net profit (loss) - equity holders of the parent -112 842 -60 075
Earnings per share 10 -3.74 -2.00
Earnings per share diluted 10 -3.74 -2.00
(NOK thousands) 2021 2020
Profit (loss) for the year -112 250 -60 075
Other comprehensive income, items to be reclassified to profit & loss in subsequent periods
Translation differences 444 -707
Total compehensive income -111 806 -60 782
Total comprehensive income attributable to:
Equity holders of the parent company -112 398 -60 782
Non-controlling interest 592 0
Total comprehensive income -111 806 -60 782
GROUP ANNUAL ACCOUNTS 21
Chip Bidco • ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (NOK
THOUSANDS)
NOTE 2021 2020
FIXED ASSETS
Intangible assets
Goodwill 7, 19 1 805 143 976 779
Other intangible assets 7 979 103 605 919
Total intangible assets 2 784 246 1 582 698
Tangible assets
Property, plant, equipment & machineries 8 156 922 183 292
Total tangible assets 156 922 183 292
Non-current assets
Other long-term receivables 4 3 611 1 115
Total financial assets 3 611 1 115
NON- CURRENT ASSETS 2 944 779 1 767 105
CURRENT ASSETS
Receivables
Trade receivables 4, 9 240 956 136 775
Other receivables 4 23 464 15 400
Prepayments 13 942 11 198
Total receivables 278 362 163 373
Cash and cash equivalents 4, 11 62 091 36 259
Total current assets 340 453 199 632
TOTAL ASSETS 3 285 232 1 966 737
GROUP ANNUAL ACCOUNTS 22
Chip Bidco • ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF FINANCIAL POSITION (NOK
THOUSANDS)
NOTE 2021 2020
EQUITY
Paid-in capital
Share capital 18 180 60
Share premium reserve 18 1 319 366 757 136
Total paid-in capital 1 319 546 757 196
Retained earnings
Other equity -209 776 -97 378
Total retained earnings -209 776 -97 378
Equity attributable to equity holders of the parent 1 109 770 659 818
Non-controlling interests 2 572 0
Total equity 1 112 342 659 818
LIABILITIES
Provisions
Deferred tax liability 14 171 443 114 278
Total provisions 171 443 114 278
Long-term liabilities
Interest bearing loans and borrowings 4, 5, 6 1 470 268 873 960
Other long-term liabilities 3 12 347 0
Lease liabilities 3, 4, 5, 6, 15 89 029 113 196
Total other long-term liabilities 1 571 644 987 156
Current liabilities
Short-term lease liabilities 3, 4, 5, 6, 15 53 966 57 794
Short-term interest-bearing debt 3, 4, 5 24 200 0
Trade creditors 3, 4, 5 73 744 30 252
Public duties payable 3, 4, 5 79 158 36 241
Taxes payable 4, 5, 14 1 219 444
Other short-term liabilities 4, 5, 16 197 516 80 754
Total current liabilities 429 803 205 485
Total liabilities 2 172 890 1 306 919
TOTAL EQUITY AND LIABILITIES 3 285 232 1 966 737
Stavanger, 30 April 2022
Fredrik Gyllenhammar Raaum (dig. sign.) Dagfinn Ringås (dig. sign.)
Chairman CEO
GROUP ANNUAL ACCOUNTS 23
Chip Bidco • ANNUAL REPORT 2021
CONSOLIDATED STATEMENT OF CASH FLOWS (NOK
THOUSANDS)
NOTE 2021 2020
Cash flow from operating activities
Net profit (loss) before tax -142 752 -81 371
Depreciation and amortization 7, 8 193 818 193 513
Taxes paid 14 -444 -1 840
Interest income -1 940 -4 059
Financial expenses 93 131 84 023
Change in trade receivables and trade creditors 7 010 -20 128
Changes in other current balance sheet items 15 526 -55 550
Net cash flow from operating activities 164 349 114 588
Cash flow from investing activities
Acquisition of the Sysco group, net of cash acquired 21 -719 301 0
Acquisition of the Envision group, net of cash acquired 21 -20 100 0
Acquisition of tangible fixed assets 8 -19 261 -12 293
Acquisition of intangible assets 7 -28 299 -21 367
Interest received 1 940 4 059
Net cash flow from investment activities -785 021 -29 601
Cash flow from financing activities
Proceeds from new long-term debt 6 596 308 0
Increase in short-term interest-bearing debt 24 200 0
Capital contribution 174 283 0
Interest payments to financial institutions -90 481 -60 304
Installment leasing-liabilities (IFRS 16) 6 -57 794 -61 208
Net cash flow from financing activities 646 514 -121 512
Total change in cash and cash equivalents 25 842 -36 525
Currency effect on cash -10 21
Cash and cash equivalents beginning of period 36 259 72 763
Cash and cash equivalents end of period 62 091 36 259
GROUP ANNUAL ACCOUNTS 24
Chip Bidco • ANNUAL REPORT 2021
STATEMENT OF CHANGES IN
EQUITY (NOK THOUSANDS)
SHARE
CAPITAL
SHARE
PREMIUM
RESERVE
OTHER
EQUITY
NON-
CONTROLLIN
G INTERESTS
TOTAL
EQUITY
Chip Bidco AS and the headquarter is located
in Stavanger, Norway. Chip Bidco AS was
established on 18 October 2019. The Group
was established following the acquisition of
Cegal Group AS and the acquisition was
formally closed on 20 December 2019.
The consolidated financial statements of Chip
Bidco AS for the fiscal year 2021 were
approved in the board meeting on 30 April
2022.
Basis of presentation
The company’s financial statements have
been prepared in accordance with
International Financial Reporting Standards
(IFRS), and IFRS as adopted by the EU, and
are mandatory for financial year beginning on
or after 1 January 2021, and Norwegian
disclosure requirements listed in the
Norwegian Accounting Act as of 31
December 2021.
The historical cost basis have been used
when preparing the financial statements.
These policies have been applied consistently
to all periods presented. Some totals may not
equal the sum of the amounts shown due to
rounding.
The financial statements have been prepared
under the assumption of going concern. The
financial statements are presented in NOK
thousands.
NOTES TO THE CONSOLIDATED FINANCIAL
STATEMENT 2021
GENERAL INFORMATION
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 25
Chip Bidco • ANNUAL REPORT 2021
1.1 Functional currency and presentation
currency
Functional currency
The functional currency is determined in each
entity in the Group based on the currency
within the entity’s primary economic
environment. Transactions in foreign currency
are translated to functional currency using the
exchange rate at the date of the transaction.
At the end of each reporting period foreign
currency monetary items are translated using
the closing rate, non-monetary items that are
measured in terms of historical cost are
translated using the exchange rate at the date
of the transaction and non-monetary items
that are measured at fair value in a foreign
currency are translated using the exchange
rates at the date when the fair value was
measured. Changes in the exchange rate are
recognized continuously in the accounting
period.
Presentation currency
The Group’s presentation currency is NOK.
The statement of financial position figures of
entities with a different functional currency are
translated at the exchange rate prevailing at
the end of the reporting period for balance
sheet items, including goodwill, and the
exchange rate at the date of the transaction
for profit and loss items. The monthly average
exchange rates are used as an approximation
of the transaction exchange rate. Exchange
differences are recognized in other
comprehensive income (“OCI”).
When investments in foreign subsidiaries are
sold, the accumulated translation differences
relating to the subsidiary attributable to the
equity holders of the parent are recognized in
the statement of comprehensive income.
When a loss of control, significant influence or
joint control is present the accumulated
exchange differences related to investments
allocated to controlled interests is recognized
in profit and loss. When a partial disposal of a
subsidiary (not loss of control) is present the
proportionate share of the accumulated
exchange differences is allocated to non-
controlling interests.
1.2 Basis for consolidation
Subsidiaries are companies in which the
Group has a controlling interest. A company
has been assessed as being controlled by the
Group when the Group is exposed for or have
the rights to variable returns from its
involvement with the entity and has the ability
to use its power over the entity to affect the
amount of the Group’s returns. Thus, the
Group controls an entity if and only if the
Group has all the following:
• power over the entity;
• exposure, or rights, to variable returns
from its involvement with the entity; and
• the ability to use its power over the entity
to affect the amount of the Group’s
returns.
There is a presumption that if the Group has
the majority of the voting rights in an entity,
the entity is considered as a subsidiary. To
support this presumption and when the Group
has less than a majority of the voting or
similar rights of an investee, the Group
considers all relevant facts and
circumstances in assessing whether it has
power over the entity. Including ownership
interests, voting rights, ownership structure
and relative power, as well as options
controlled by the Group and shareholder’s
NOTE 1 ACCOUNTING PRINCIPLES
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 26
Chip Bidco • ANNUAL REPORT 2021
agreement or other contractual agreements.
The assessments are done for each
individual investment.
The Group re-assesses whether or not it
controls an entity if facts and circumstances
indicate that there are changes to one or
more of the three elements of control. A
controlling interest is normally achieved when
the Group owns more than 50% of the shares
in the company and is also in the position to
exercise control over the company.
Profit or loss and each component of other
comprehensive income (OCI) are attributed to
the equity holders of the parent of the Group
and to the non-controlling interests, even if
this results in the non-controlling interests
having a deficit balance. When necessary,
adjustments are made to the financial
statements of subsidiaries to bring their
accounting policies into line with the Group’s
accounting policies. All intra-group assets
and liabilities, equity, income, expenses and
cash flows relating to transactions between
members of the Group are eliminated in full
on consolidation.
Non-controlling interests are presented
separately under equity in the Group’s
balance sheet.
The consolidated financial statements are
prepared such that the group of companies
are presented as a single economic entity.
Intercompany transactions have been
eliminated in the preparation of the
consolidated financial statements. The
accounting principles for the consolidated
financial statements have been applied
consistently for all periods presented.
Acquired subsidiaries are accounted for on
the basis of the parent company’s acquisition
cost. The acquisition costs are attributed
based on fair values of the separable net
assets acquired. Values in excess of fair
value of the separable net assets are
presented as goodwill in the statement of
financial position.
Change in ownership interest without loss
of control
A change in the ownership interest of a
subsidiary, without a loss of control, is
accounted for as an equity transaction. The
consideration is recognized at fair value and
the difference between the consideration and
the carrying amount of the non-controlling
interests is recognized at the equity
attributable to the parent.
Loss of control
In cases where changes in the ownership
interest of a subsidiary lead to loss of control,
the consideration is measured at fair value.
Assets (including goodwill) and liabilities of
the subsidiary and non-controlling interest at
their carrying amounts are derecognized at
the date when the control is lost.
The fair value of the consideration received is
recognized and any investment retained is
recognized at fair value. Gain or loss is
recognized in profit and loss at the date when
the control is lost.
1.3 Statement of financial position
classification
The Group presents assets and liabilities in
the statement of financial position based on
their current/ non-current classification.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 27
Chip Bidco • ANNUAL REPORT 2021
An asset is current when it is:
• Expected to be realized or intended to be
sold or consumed in the normal operating
cycle or held primarily for the purpose of
trading
• Expected to be realized within twelve
months after the reporting period
• Cash or cash equivalent unless restricted
from being exchanged or used to settle a
liability for at least twelve months after the
reporting period
All other assets are classified as non-current.
A liability is current when:
• It is expected to be settled in the normal
operating cycle or it is held primarily for
the purpose of trading
• It is due to be settled within twelve months
after the reporting period
• There is no unconditional right to defer the
settlement of the liability for at least twelve
months after the reporting period
The Group classifies all other liabilities as
non-current.
Deferred tax assets and liabilities are
classified as non-current assets and liabilities.
1.4 Segments
For management reporting purposes, the
Group has one reportable segment. As the
financial statement is consistent with the
internal financial reporting, and thus is equal
to the Income Statement, Statement of
Financial Position and Cash Flow Statement,
no further disaggregation is provided.
1.5 Sales revenue
Revenue from contracts with customers is
recognized when control of the goods or
services are transferred to the customer at an
amount that reflects the consideration to
which the Group expects to be entitled in
exchange for those goods or services.
Revenue from services is recognized when
performed. Revenue from sale of goods is
recognized at transfer of risk and control.
The Group’s cloud-based solutions provide IT
systems and customized software solutions,
and are recognized over time.
Sale of licenses (right to use) that are distinct
are recognized at a point in time when the
customer is able to use and benefit from the
license. Maintenance revenue is recognized
on a straight-line basis over the maintenance
period.
Sale of licenses that are part of a bundled
contract (right to access) are not distinct and
are recognized over the contract period. Sale
of perpetual license rights are recognized
when the customer gets access to the
software.
1.6 Tangible assets
Tangible assets are capitalized and
depreciated over the estimated useful
economic life. Direct maintenance costs are
expensed as incurred, whereas
improvements and upgrading are capitalized
and depreciated together with the underlying
asset. Tangible assets are subject to
impairment assessments in accordance with
1.8 Impairment.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 28
Chip Bidco • ANNUAL REPORT 2021
1.7 Intangible assets
Intangible assets comprise software, order
backlog and customer relations, which are
identifiable and controlled by the company.
Research costs are expensed as incurred.
Development expenditures related to
software on an individual project are
recognized as an intangible asset when the
Group can demonstrate:
• The technical feasibility of completing the
intangible asset so that the asset will be
available for use
• Its intention to complete and its ability and
intention to use the asset
• How the asset will generate future
economic benefits
• The availability of resources to complete
the asset
• The ability to measure reliably the
expenditure during development
Following initial recognition of the
development expenditure as an asset, the
asset is carried at cost less any accumulated
amortization and accumulated impairment
losses. Amortization of the asset begins when
development is complete, and the asset is
available for use. It is amortized over the
period of expected future benefit. During the
period of development, the asset is tested for
impairment annually, in accordance with 1.8
Impairment below.
1.8 Impairment
Assets that are subject to depreciation are
reviewed for impairment whenever events or
changes in circumstances indicate that the
carrying amount may not be recoverable. An
impairment loss is recognized for the amount
by which the asset’s carrying amount
exceeds its recoverable amount.
The recoverable amount is the higher of an
asset’s fair value less costs to sell and value
in use. For the purposes of assessing
impairment, assets are grouped at the lowest
levels for which there are separately
identifiable cash flows (cash-generating
units). Prior year impairments of tangible fixed
assets and intangible assets are reviewed for
possible reversal at each financial reporting
date.
1.9 Trade and other receivables
Trade receivables and other current
receivables are recorded in the statement of
financial position at nominal value less
provisions for doubtful debts. Loans and
receivables are subsequently carried at
amortized cost using the effective interest
method. Financial assets and liabilities are
only offset, and net reported in the balance
sheet, when there is a legally enforceable
right to offset the recognized amounts and
there is an intention to settle on a net basis.
The Group recognizes an allowance for
expected credit losses (ECLs) for all trade
and other receivables. The Group applies a
simplified approach in calculating ECLs.
1.10 Trade payables/creditors
Trade payables are obligations to pay for
goods or services that have been acquired in
the ordinary course of business from
suppliers. Accounts payable are classified as
current liabilities if payment is due within one
year or less (or in the normal operating cycle
of the business if longer). If not, they are
presented as non- current liabilities.
Trade payables are recognized initially at fair
value and subsequently measured at
amortized cost.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 29
Chip Bidco • ANNUAL REPORT 2021
1.11 Income tax
The tax expense for the period comprises
current and deferred tax. The current income
tax charge is calculated on the basis of the
tax laws enacted or substantively enacted at
the balance sheet date in the countries where
the Group operates and generates taxable
income. Management periodically evaluates
positions taken in tax returns with respect to
situations in which applicable tax regulation is
subject to interpretation. It establishes
provisions where appropriate on the basis of
amounts expected to be paid to the tax
authorities. Deferred income tax is
recognized, using the liability method, on
temporary differences arising between the tax
bases of assets and liabilities and their
carrying amounts in the financial statements.
Deferred income tax is determined using tax
rates (and laws) that have been enacted or
substantially enacted by the balance sheet
date. Deferred income tax assets are
recognized only to the extent that it is
probable that future taxable profit will be
available against which the temporary
differences can be utilized. Deferred income
tax assets and liabilities are offset when
there is a legally enforceable right to offset
current tax assets against current tax
liabilities and when the deferred income taxes
assets and liabilities relate to income taxes
levied by the same taxation authority on
either the same taxable entity or different
taxable entities where there is an intention to
settle the balances on a net basis.
Deferred tax assets and liabilities are not
recognized if the temporary difference arises
from the initial recognition (other than in a
business combination) of other assets and
liabilities in a transaction that affects neither
the taxable profit nor the accounting profit.
1.12 Financial liabilities
Financial liabilities are classified, at initial
recognition, as loans and borrowings or
payables, as appropriate. Loans, borrowings
and payables are recognized at amortized
cost net of directly attributable transaction
costs.
Loans and long-term debt
After initial recognition, interest-bearing loans
and debt are subsequently measured at
amortized cost using the Effective Interest
Rate (EIR) method. Gains and losses are
recognized in profit or loss when the liabilities
are derecognized as well as through the EIR
amortization process.
Amortized cost is calculated by taking into
account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization
is included as finance costs in the statement
of profit or loss.
Derecognition of financial liabilities
A financial liability is derecognized when the
obligation under the liability is discharged or
cancelled or expires. When an existing
financial liability is replaced by another from
the same lender on substantially different
terms, or the terms of an existing liability are
substantially modified, such an exchange or
modification is treated as the derecognition of
the original liability and the recognition of a
new liability. The difference in the respective
carrying amounts is recognized in the
statement of profit or loss.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 30
Chip Bidco • ANNUAL REPORT 2021
1.13 Finance income and costs
Interest income comprises interest income on
bank deposits. Interest costs comprise
interest expense on borrowings. Foreign
exchange gains and losses are presented
net.
1.14 Cash and cash equivalents
In the Statement of Financial Position and the
Statement of Cash Flows, cash and cash
equivalents includes cash, bank deposits and
other short-term highly liquid investments with
original maturities of three months or less.
1.15 Equity
Transaction costs directly related to an equity
transaction are recognized directly in equity
after deducting tax expenses.
1.16 Leasing / leases
Lease contracts where the Group is a lessee
are capitalized. Upon commencement of the
lease the right-of-use asset is recognized at
cost being the present value of the lease
payment in the contract during the lease term
as defined by IFRS 16, in addition to initial
direct costs.
The lease term represents the non-
cancellable period of the lease, together with
periods covered by an option either to extend
or to terminate the lease when the Group is
reasonably certain to exercise this option.
The corresponding lease liability is
recognized in the balance sheet at present
value.
Variable lease payments that do not depend
on an index or a rate are recognized as
expenses in the period in which the event or
condition that triggers the payment occurs.
In calculating the present value of lease
payments, the Group uses its incremental
borrowing rate at the lease commencement
date because the interest rate implicit in the
lease is not readily determinable. After the
commencement date, the amount of lease
liabilities is increased to reflect the accretion
of interest and reduced for the lease
payments made. In addition, the carrying
amount of lease liabilities is remeasured if
there is a modification, a change in the lease
term, a change in the lease payments (e.g.,
changes to future payments resulting from a
change in an index or rate used to determine
such lease payments) or a change in the
assessment of an option to purchase the
underlying asset. The change in liability is
added to or deducted from the right-of-use
asset.
The Group measures the right-of use asset at
cost, less any accumulated depreciation and
impairment losses, adjusted for any
remeasurement of lease liabilities. The right-
of-use asset acquired under leases is
depreciated over the asset’s useful life or the
lease term, if shorter, if the lease does not
transfer ownership at the end of the lease
term, or there is no purchase option that is in
the money. The Group applies the
depreciation requirements in IAS 16 Property,
Plant and Equipment in depreciating the
right-of-use asset, except that the right-of-
use asset is depreciated from the
commencement date to the earlier of the
lease term and the remaining useful life of
the right-of-use asset. Right of use assets
are subject to impairment assessments in
accordance with 1.8 Impairment.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 31
Chip Bidco • ANNUAL REPORT 2021
The Group has also applied the practical
expedient to not recognize lease liabilities
and right-of-use assets for short-term leases
and low-value asset leases.
1.17 Business combinations and goodwill
Business combinations are accounted for
using the acquisition method. Acquisition-
related costs are expensed in the periods in
which the costs are incurred, and the services
are received.
The consideration paid in a business
combination is measured at fair value at the
acquisition date.
When acquiring a business all financial
assets and liabilities are assumed for
appropriate classification and designation in
accordance with contractual terms, economic
circumstances and pertinent conditions at the
acquisition date.
Goodwill is recognized as the difference
between the consideration transferred,
including an equivalent amount for any non-
controlling interest, and the net of the
acquisition-date fair values of identifiable
assets acquired and liabilities assumed.
Goodwill is not depreciated but tested for
impairment at least annually. For goodwill
impairment purposes, goodwill is allocated to
cash-generating units or groups of cash-
generating units that are expected to benefit
from synergies from the business
combination.
1.18 Cash flow statement
The cash flow statement is presented using
the indirect method. Cash and cash
equivalents include cash, bank deposits and
other short-term highly liquid investments with
original maturities of three months or less.
1.19 EBITDA (Earnings Before Interest,
Taxes, Depreciation and Amortization)
The Group has presented an additional
subtotal in the statement of comprehensive
income. This subtotal is considered relevant
to the understanding of the entity’s financial
performance.
1.20 Events after the reporting period
New information on the Group’s financial
position at the end of the reporting period
which becomes known after the reporting
period, is recorded in the annual accounts.
Events after the reporting period that do not
affect the Group’s financial position on the
end of the reporting period, but which will
affect the Group’s financial position in the
future are disclosed if significant.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 32
Chip Bidco • ANNUAL REPORT 2021
In the process of applying the Group’s
accounting policies, management has made
several judgements and estimates. All
estimates are assessed to the most probable
outcome based on the management’s best
knowledge. Changes in key assumptions may
have significant effect and may cause
material adjustments to the carrying amounts
of assets and liabilities, equity and the profit
for the year.
The Group’s most important accounting
estimates are the following:
• The fair value of assets acquired and
liabilities assumed relating to the
acquisition of the Sysco group
• Impairment testing of goodwill (Note 19)
Identification of cash generating units and
operating segments are considered as a
result of significant judgements.
Purchase price allocation relating to the
assets acquired and liabilities assumed in
the acquisition of the Sysco group
The Group is required to allocate the
purchase price of acquired companies to the
assets acquired and liabilities assumed based
on their estimated fair values. The Group
engaged an independent third-party to assist
in determining the fair values of the assets
acquired and liabilities assumed. Such
valuations require management to make
significant judgements in selecting valuation
methods, estimates and assumptions. In
order to calculate the fair values of the
tangible assets, intangible assets and
liabilities to be allocated the expected future
cash flows have been reconciled to the
purchase price.
The reconciliation requires management to
make estimates on future cash flows and
discount rates.
The intangible assets that was valued
separately include the customer relationships,
technology and the assembled workforce. For
all other assets and liabilities, net book value
was assumed to represent fair value as of the
valuation date. The estimated value of the
identifiable intangible assets, customer
relationships and the technology, was
recognized separately.
The value of the assembled workforce is
recognized as part of goodwill.
The key assumptions in the valuation of the
customer relationships are the expected
remaining lifetime for the relationship, the
expected EBITDA margin on the sales, an
estimated contributory asset charge (CAC)
and determining an appropriate discount rate.
The valuation of the technology is based on
cost savings from owing the technology
estimated by using a royalty rate based on
comparable licensors. The value of the order
backlog was found material and is valued
separately from customer relationships. The
key assumptions in the valuation include the
expected revenue and EBITDA and CAC on
the contracts.
The remaining consideration is allocated to
goodwill. The amount allocated to goodwill is
significant and using different estimates in the
valuation of the identifiable intangible assets
could result in a material impact on the
recognized amount of goodwill.
Management’s estimates of fair value and
useful lives are based upon assumptions
believed to be reasonable, but which are
inherently uncertain and unpredictable and,
as a result, actual results may differ from
estimates.
NOTE 2 ESTIMATION UNCERTAINTY & SIGNIFICANT JUDGEMENT
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 33
Chip Bidco • ANNUAL REPORT 2021
Impairment testing of goodwill
For impairment testing, goodwill acquired
through business combinations is allocated to
the Group’s CGU. The Group performs its
annual impairment test in September 2021
and considers the relationship between its
market capitalization and its book value,
among other factors, when reviewing for
indicators of impairment.
The acquisition of the Sysco Group was
made in October 2021. The goodwill related
to the Sysco-acquisition in 2021 is based on
the Purchase Price Allocation (PPA)
performed around year-end 2021. The PPA is
based on estimated EBITDA for 2021 and
industry standard multiples. It has been
evaluated that it has not occurred indicators
of impairment after the acquisition, ref. note
19 for further description.
Identification of cash generating units
(CGU’s) and operating segments
From the acquisition date, acquired goodwill
is to be allocated to each of the acquirer’s
CGUs, or to a group of CGUs, that are
expected to benefit from the synergies of the
combination. Each CGU or group of CGUs to
which the goodwill is so allocated must
represent the lowest level within the entity at
which the goodwill is monitored for internal
management purposes; and not be larger
than an operating segment determined in
accordance with IFRS 8 – Operating
Segments.
The different revenue streams in the Group,
such as software, cloud and business
consulting are often sold together and based
on a separate assessment management
concluded that the different revenue streams
are not largely independent and are therefore
seen together as one CGU.
Further, management assessed if there is
more than one operating segment in the
Group. Even though revenues from the
different revenue streams are reported
separately, operating results are viewed on a
total basis by the Group Management, hence
it was concluded that there is only one
operating segment.
Please also see note 19 Impairment testing of
goodwill and note 21 Acquisition for further
information about the CGU.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 34
Chip Bidco • ANNUAL REPORT 2021
The Group’s principal financial liabilities,
comprise interest-bearing liabilities, trade and
other payables. The main purpose of these
financial liabilities is to finance the Group’s
operations. The Group’s principal financial
assets include trade receivables, cash and
cash equivalents that derive directly from its
operations. Additional or alternative financing
shall be secured in line with objectives and
guidelines set forth by the Board of Directors
and with due consideration to financing costs,
repayment terms and the ability to satisfy
lender covenant requirements.
Overriding principles
The Company’s Board of Directors is
responsible for defining the Company’s risk
profile and for ensuring that appropriate risk
management and governance is exercised by
the Company. As a guiding principle, the
Company’s strategy is to meet its stated
objectives without exposing itself to material
financial risk. Furthermore, the Company will
not seek to increase profitability through
actively seeking to increase its financial risk
exposure, but will instead seek to ensure that
financial risks are managed to within
acceptable thresholds.
The Group is exposed to market risk, credit
risk and liquidity risk. The Group’s
management oversees the management of
these risks.
Market risk: Interest rate risk
Market risk is the risk that the future cash
flows or fair value of a financial instrument will
fluctuate because of changes in market
prices. Market risk includes interest risk and
currency risk. Financial instruments affected
by market risk include liabilities to financial
institutions, deposits and debt.
Interest rate risk is the risk that the future
cash flows of a financial instrument will
fluctuate because of changes in market
interest rates. The Group is exposed to
significant interest rate risk, primarily as a
consequence of its third-party bond debt that
is offered on floating rate terms.
Interest rate sensitivity
The following table demonstrates the
sensitivity to a reasonably possible change in
interest rates on loans and borrowings
affected. The Group’s profit before tax is
affected through the impact on floating rate
borrowings, as follows (in NOK thousand):
2020: +/- 100 basis points +/- 9 000
2021: +/- 100 basis points +/- 15 000
A change in the interest rate would not have a
significant effect on equity in 2020 or 2021.
Market risk: Foreign currency risk
Foreign currency risk is the risk that the future
cash flows of an exposure will fluctuate
because of changes in foreign exchange
rates. Currency risk includes risk from
contractual purchase or sale denominated in
foreign currencies, in addition to foreign
investments and future cash flow from these
investments. This currency risk is reduced by
having parts of the cost base in foreign
currencies. The risk related to foreign
currency is not considered to be a material
risk.
NOTE 3 FINANCIAL RISKS AND RISK MANAGEMENT
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 35
Chip Bidco • ANNUAL REPORT 2021
Credit risk
Credit risk is the risk that a counterparty will
not meet its obligations under a financial
instrument or customer contract, leading to
a financial loss. The Group is exposed to
credit risk from its operating activities
(primarily trade receivables) and from its
financing activities, including deposits with
banks and financial institutions, debt
instruments and account receivables. The
loss on receivables has historically been
low, and the risk of losses on receivables is
considered limited.
Liquidity risk
Liquidity risk is the risk that the Group will not
be able to fulfill its financial obligation as they
fall due. The Group’s approach to managing
liquidity is to ensure, as far as possible, that it
will always have sufficient liquidity to meet its
liabilities when due, under both normal and
stressed conditions, without incurring
unacceptable losses or risking damage to the
Group’s reputation.
The amounts disclosed in the table below are
the financial liability contractual undiscounted
cash flows at 31 December 2021:
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 36
Chip Bidco • ANNUAL REPORT 2021
NOK thousands
LESS THAN 1
YEARS
1-2 YEARS 2-3 YEARS 3-4 YEARS
MORE THAN
4 YEARS
TOTAL
Interest bearing loans and
borrow ings
1 500 000 1 500 000
Interest bearing loans and
borrow ings - interests
88 422 88 422 88 422 265 265
Lease liabilities 62 838 42 436 31 161 18 185 14 530 169 150
Trade and other payables 73 744 73 744
Public duties payable 79 158 79 158
Other short-term liabilities 197 516 197 516
Total at 31 December 2021 501 678 130 858 1 619 583 18 185 14 530 2 284 833
NOK thousands
LESS THAN 1
YEARS
1-2 YEARS 2-3 YEARS 3-4 YEARS
MORE THAN
4 YEARS
TOTAL
Interest bearing loans and
borrow ings
900 000 900 000
Interest bearing loans and
borrow ings - interests
53 053 53 053 53 053 53 053 212 212
Lease liabilities 57 794 41 995 21 753 14 797 34 651 170 991
Trade and other payables 30 252 30 252
Public duties payable 36 241 36 241
Other short-term liabilities 80 752 80 752
Total at 31 December 2020 258 092 95 048 74 806 967 850 34 651 1 430 448
Capital management
With respect to the Group’s capital
management, capital includes issued
capital, share premium and all other equity
reserves attributable to the equity holders of
the parent company where the primary
objective is to maximize the shareholder
value.
To manage the capital structure, the Group
may adjust the dividend payment to the
shareholder.
No financial covenants are related to capital
management.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 37
Chip Bidco • ANNUAL REPORT 2021
Climate risk
The Group is a trusted global technology
powerhouse specialized in the energy
sector, providing hybrid cloud solutions,
software and consultancy within IT,
business, geoscience, and data
management. The Group provides broad
and deep domain competencies across the
whole energy vertical, including renewables.
The solutions provided do not pollute the
environment, but the Group is focused on
contributing to use environmentally friendly
power sources.
Climate risk is among other considered when
evaluating the going concern assumption,
value in use estimations and impairment
evaluations.
Capital management
2021 2020
Interest bearing loans and borrowings 1 470 268 873 960
Long-term lease liabilities 89 029 113 196
Short-term lease liabilities 53 966 57 794
Short-term interest-bearing debt 24 200 0
Trade creditors 73 744 30 252
Less: Cash and cash equivalents -62 091 -36 259
Net debt 1 649 116 1 038 945
Total equity 1 112 342 659 818
Capital and net debt 2 761 459 1 698 763
Gearing ratio 59.7 % 61.2 %
For unquoted financial assets the fair value
has been estimated using a valuation
technique based on assumptions that are not
supported by observable market prices.
The following of the Group’s financial
instruments are not measured at fair value:
cash and cash equivalents, trade
receivables, other receivables, interest
bearing loans and borrowings, lease
liabilities, trade creditors and other payables.
The carrying amount of cash and cash
equivalents is approximately equal to fair
value since these instruments have a short
term to maturity.
NOTE 4 FINANCIAL INSTRUMENTS FAIR VALUE HIERARCHY
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 38
Chip Bidco • ANNUAL REPORT 2021
Similarly, the carrying amount of trade
receivables and other receivables and
payables is approximately equal to fair
value since they are short term and entered
into on “normal” terms and conditions.
The fair value of financial assets and
liabilities recognized at their carrying
amount is calculated as the present value
of estimated cash flows discounted by the
interest rate that applies to corresponding
liabilities and assets at the end of the
reporting period.
Set out below is a comparison by category
of carrying amounts and fair values of all of
the Group's financial instruments:
Fair value estimation
The Group uses the following hierarchy for
determining and disclosing the fair value of
financial instruments by valuation technique:
Level 1: Quoted (unadjusted) prices in
active markets for identical assets or
liabilities.
Level 2: Other techniques for which all inputs
which have a significant effect on the
recorded fair value are observable, either
directly or indirectly.
Level 3: Techniques which use inputs which
have a significant effect on the recorded fair
value that are not based on observable
market data. The Group only has financial
instruments in level 2.
Fair value
measurement
Financial assets (in NOK thousands) hierarchy
Book value Fair value Book value Fair value
Other long-term receivables Level 2
3 611 3 611 1 115 1 115
Trade receivables Level 2 240 956 240 956 136 775 136 775
Other current receivables Level 2 23 464 23 464 15 400 15 400
Cash and cash equivalents Level 2 62 091 62 091 36 259 36 259
Total financial assets 330 122 330 122 189 549 189 549
Financial liabilities
Interest bearing loans and borrowings Level 2 1 470 268 1 470 268 873 960 873 960
Other long-term liabilities Level 2 12 347 12 347 0 0
Short-term interest-bearing debt Level 2 24 200 24 200 0 0
Trade creditors Level 2 73 744 73 744 30 252 30 252
Other short-term liabilities Level 2 3 341 3 341 80 752 80 752
Total financial liabilities 1 583 900 1 583 900 1 155 954 1 155 954
2021
2020
The table below shows a maturity analysis for the Group’s current liabilities:
NOTE 5 MATURITY ANALYSIS CURRENT LIABILITIES
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 39
NOTE 6 RECONCILIATION OF LIABILITIES ARISING FROM
FINANCING ACTIVITIES
Reconciliation of changes in liabilities arising from financing activities is shown in the tables
below:
Chip Bidco • ANNUAL REPORT 2021
Per 31.12.2021 (In NOK thousands)
within 3
months
within 3-6
months
within 6-12
months
Total
Short-term lease liabilities 13 492 13 492 26 983 53 966
Short-term interest-bearing debt 24 200 0 0 24 200
Trade creditors 73 744
0 0
73 744
Public duties payable 79 158
0 0
79 158
Taxes payable 0
0 1 219
1 219
Other short-term liabilities 116 090
81 426 0
197 516
Total current liabilities 306 684 94 918 28 203 429 805
Per 31.12.2020 (In NOK thousands)
within 3
months
within 3-6
months
within 6-12
months
Total
Short-term lease liabilities 14 449 14 449 28 897 57 794
Trade creditors 30 252
0 0
30 252
Public duties payable 36 241
0 0
36 241
Taxes payable 0
0 444
444
Other short-term liabilities 45 139
35 613 0
80 752
Total current liabilities 126 081 50 062 29 341 205 483
(NOK thousands)
01.01.2020 Cash flows
Foreign
exchange
movement
Fair values
changes
New
leases
Other 31.12.2020
Interest bearing loans and borrowings
867 451 0 0 0 0 6 509 873 960
Long-term lease liabilities 145 008 -7 023 0 0 33 005 -57 794 113 196
Current lease liabilities 61 208 -61 208 0 0 0 57 794 57 794
Total liabilities from financing activities
1 073 667 -68 231 0 0 33 005 6 509 1 044 950
(NOK thousands)
01.01.2021 Cash flows
Foreign
exchange
movement
Fair values
changes
New
leases
Other 31.12.2021
Interest bearing loans and borrowings
873 960 596 308 0 0 0 0 1 470 268
Long-term lease liabilities 113 196 0 0 0 100 644 -53 966 159 874
Current lease liabilities 57 794 -57 794 0 0 0 53 966 53 966
Total liabilities from financing activities
1 044 950 538 514 0 0 100 644 0 1 684 108
Non-cash changes
Non-cash changes
NOTE 7 INTANGIBLE ASSETS
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 40
Chip Bidco • ANNUAL REPORT 2021
Acquisition cost per 01.01 is in its entirety related to the acquisition of Cegal Group at the end
of 2019. The additions in 2020 related to Software are in-house developed.
The additions of goodwill and customer relationships in 2021 are mainly related to the
acquisition of the Sysco group.
NOK 103.8 million of the additions of software are related to the acquisition of the Sysco
group, while the rest of the additions of software are mainly in-house developed.
(NOK thousands)
GOODWILL
CUSTOMER
RELATIONSHIPS
SOFTWARE
ORDER
BACKLOG
TOTAL
OTHER
INTANGIBLE
ASSETS
Aquisition cost 01.01 976 779 208 868 231 033 247 535 687 436
Additions 0 0 21 367 0 21 367
Disposals 0 0 0 0 0
Aquisition cost 31.12
976 779 208 868 252 400 247 535 708 803
Accumulated impairments at 31.12 0 0 0 0 0
Accumulated amortizations at 31.12
0 20 332 41 297 41 256 102 884
Carrying amount 31.12
976 779 188 536 211 103 206 279 605 919
Impairment charges in 2020 0 0 0 0 0
Amortization for 2020 0 20 332 41 297 41 256 102 884
Useful economic life Indefinite 4-11 years 3-10 years 6 years
Amortization plan Linear Linear Linear
(NOK thousands)
GOODWILL
CUSTOMER
RELATIONSHIPS
SOFTWARE
ORDER
BACKLOG
TOTAL
OTHER
INTANGIBLE
ASSETS
Aquisition cost 01.01 976 779 208 868 252 400 247 535 708 803
Additions 828 364 350 900 132 494 0 483 394
Disposals 0 0 0 0
Aquisition cost 31.12
1 805 143 559 768 384 894 247 535 1 192 197
Accumulated impairments at 31.12 0 0 0 0 0
Accumulated amortizations at 31.12
0 49 436 81 146 82 512 213 094
Carrying amount 31.12.2021
1 805 143 510 332 303 748 165 023 979 103
Impairment charges in 2021 0 0 0 0 0
Amortization for 2021 0 29 104 39 850 41 256 110 210
Useful economic life Indefinite 4-11 years 3-10 years 6 years
Amortization plan Linear Linear Linear
2020
2021
NOTE 8 TANGIBLE ASSETS
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 41
Chip Bidco • ANNUAL REPORT 2021
Acquisition cost per 01.01 is in its entirety related to the acquisition of Cegal Group at the end
of 2019.
Interest expense related to IFRS 16 lease liabilities was NOK 8.9 million in 2020 and NOK 7.8
million in 2021.
No research & development expenditures were expensed in 2020 or 2021.
Please refer to disclosure 3, 4, 5 and 6 for information about the related leasing liabilities.
(NOK thousands)
RIGHT-OF-USE
ASSET IT-
EQUIPMENT
RIGHT-OF-USE
ASSET OFFICE
LEASES
TANGIBLE
ASSETS
TOTAL
Aquisition cost 01.01 86 688 109 090 32 846 228 624
Additions 27 026 5 979 12 395 45 400
Disposals 0 0 -102 -102
Aquisition cost 31.12
113 714 115 069 45 139 273 922
Accumulated impairments at 31.12 0 0 0 0
Accumulated depreciations at 31.12
49 741 22 350 18 539 90 630
Carrying amount 31.12
63 973 92 719 26 600 183 292
Impairment charges in 2020 0 0 0 0
Depreciation for 2020 49 741 22 350 18 539 90 630
Useful economic life 2-5 years 2-5 years 2-5 years
Amortization plan Linear Linear Linear
(NOK thousands)
RIGHT-OF-USE
ASSET IT-
EQUIPTMENT
RIGHT-OF-USE
ASSET OFFICE
LEASES
TANGIBLE
ASSETS
TOTAL
Aquisition cost 01.01 113 714 115 069 45 139 273 922
Additions 16 860 21 118 19 261 57 238
Disposals 0 0 0 0
Aquisition cost 31.12
130 574 136 187 64 400 331 160
Accumulated impairments at 31.12 0 0 0 0
Accumulated depreciations at 31.12
91 187 47 397 35 655 174 239
Carrying amount 31.12.2021
39 387 88 790 28 745 156 922
Impairment charges in 2021 0 0 0 0
Depreciations for 2021 41 446 25 047 17 116 83 608
Useful economic life 2-5 years 2-5 years 2-5 years
Amortization plan Linear Linear Linear
2020
2021
As at 31 December, the aging analysis of trade receivables is as follows:
The Group has a history of limited incurred losses, and as such no provision are recorded as per
31.12.20 and 31.12.21.
NOTE 9 TRADE RECEIVABLES
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 42
NOTE 10 EARNINGS PER SHARE
Chip Bidco • ANNUAL REPORT 2021
The basic earnings per share are calculated as
the ratio of the profit for the year that is due to
the shareholders of the parent divided by the
weighted average number of ordinary shares
outstanding.
When calculating the diluted earnings per
share, the profit that is attributable to the
ordinary shareholders of the parent and the
weighted average number of ordinary shares
outstanding are adjusted for all the dilution
effects relating to convertible bonds and
share options.
Lease expenses recognized in other
operating expenses
The Group leases personal computers, IT
equipment and machinery with contract terms
of 1 to 3 years. The Group has decided to
apply the practical expedient of low value
assets for some of these leases and does not
recognize lease liabilities or right-of-use
assets.
The leases are instead expensed when they
incur. Leasing cost related to short-term
leases amounts to NOK 1.6 million in 2020
and NOK 2.1 million in 2021. Leasing
payment for long-term leases amounted to
NOK 78.1 million in 2020 and 74.0 million in
2021.
Interest expense related to leases amounts to
NOK 7.8 million in 2021.
(In NOK thousands)
Neither past
due nor
impaired
<30
days
30-60
days
61-90
days
>91
days Total
2021 210 008 21 836 4 290 575 4 247 240 956
2020 118 643 8 518 3 187 2 020 4 407 136 775
Days past due
2021 2020
Net profit (loss) in NOK thousands
-112 250 -60 075
Weighted average numbers of ordinary shares during the year
30 000 30 000
Effect of dilution
0 0
Weighted average number of outstanding diluted shares
30 000 30 000
Earnings (loss) per share in NOK -3 741.67 -2 002.50
Earnings (loss) per share diluted in NOK -3 741.67 -2 002.50
The cash and deposits for the Group include
no restricted funds as of 31 December 2020.
Restricted cash related to employee tax
amounts to NOK 7.8 million as per 31
December 2021. Further, a bank guarantee
for employee tax of NOK 14 million has
established, increased to NOK 36 million as
from 1 January 2022.
The Group has bank guarantees of
NOK 12 million for property lease agreements
as per 31.12.20 and NOK 13 million as per
31.12.21.
NOTE 11 BANK DEPOSITS
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 43
NOTE 12 LIST OF SUBSIDIARIES
The consolidated financial statements comprise the following entites:
Chip Bidco • ANNUAL REPORT 2021
ENTITIES
COUNTRY OF
INCORPORATION
MAIN
OPERATIONS
OWNERSHIP
INTEREST 2021
VOTING POWER
2021
Chip Bidco AS
Norway Holding company 100 % 100 %
Cegal Group AS
Norway IT and SW sales 100 % 100 %
Cegal AS
Norway IT and SW sales 100 % 100 %
Cegal Ltd
UK IT and SW sales 100 % 100 %
Cegal LLC
USA IT and SW sales 100 % 100 %
Cegal Geoscience Inc.
Canada IT and SW sales 100 % 100 %
Cegal FZ - LLC
UAE IT and SW sales 100 % 100 %
Cegal Russia LLC
Russia IT and SW sales 100 % 100 %
Cegal Malaysia Sdn. Bhd.
Malaysia IT and SW sales 100 % 100 %
SYSCO AS
Norway IT and SW sales 100 % 100 %
SYSCO FINANS AS
Norway IT and SW sales 100 % 100 %
Sysco EnergyX AS
Norway IT and SW sales 51 % 51 %
Sysco Danmark AS
Denmark IT and SW sales 100 % 55 %
Sysco Holding ApS
Denmark IT and SW sales 100 % 100 %
SQL Service Nordic AB
Sweden IT and SW sales 100 % 100 %
SyscoSE AB
Sweden IT and SW sales 100 % 100 %
SyscoSE Stockholm AB
Sweden IT and SW sales 100 % 100 %
SyscoSE Uppsala AB
Sweden IT and SW sales 100 % 82 %
NOTE 13 PAYROLL EXPENSE, NUMBER OF EMPLOYEES,
REMUNERATION, LOANS TO EMPLOYEES AND AUDITOR’S
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 44
Chip Bidco • ANNUAL REPORT 2021
PAYROLL EXPENSE (NOK thousands) 2021 2020
Salaries 399 583 296 626
Payroll tax 59 880 41 786
Pension costs 14 323 10 034
Other payments 14 930 9 578
Capitalized development cost -15 202 -21 525
Total payroll an related expenses 473 514 336 500
2021 2020
The average number of employees 482 337
MANAGEMENT REMUNERATION
GEN.MAN. GEN.MAN. BOARD OF
1.1-30.08 30.08-31.12 DIRECTORS
Salary 1 030 170 814 143
Pension expenses 2 720 1 422
Other remuneration 3 336 2 478 981 125 000
Total 1 036 226 3 294 546 125 000
Auditor's fee for fiscal 2020 and 2021
(NOK thousands) 2021 2020
Audit fee 1 745 899
Assurance services 84 464
Other assistance 0 0
Total 1 829 1 363
The Group did not have any issued loans to members of the Board of Directors or the management as per
31 December 2020 and 2021. Total loans to employees related to purchase of shares amounted to NOK
444 thousand as per 31 December 2020 and NOK 2 523 as per 31 December 2021.
The Group is required to have an occupational pension scheme in accordance with the Norwegian law on
required occupational pension (“lov om obligatorisk tjenestepensjon”). The Group’s pension scheme meets
the requirements of that law. The Group has a defined contribution plan.
The following table shows remuneration related to professional services rendered by the Company’s
principal auditor, Ernst & Young AS, for fiscal year. The amounts shown are exclusive of value added tax.
Chip Bidco Group does not have its own General Manager. However, the General Manager of Cegal Group is
also the acting General Manager in Chip Bidco Group. Sven Torgersen served as a General Manager until
30.08.2022, wherefrom Dagfinn Ringås replaced Sven as General Manager.
NOTE 14 TAX
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 45
Chip Bidco • ANNUAL REPORT 2021
INCOME TAX EXPENSE (NOK thousand)
2021 2020
Total payable tax 1 219 444
Changes in deffered taxes -31 722 -21 740
Tax from previous years 0 0
Tax expense -30 502 -21 296
SPECIFICATION OF BASE FOR PAYABLE TAXES (NOK thousand)
2021 2020
Net profit (loss) before tax -142 752 -81 371
Permanent differences 5 335 1 902
Changes in temporary differences 77 174 77 325
Use of tax loss carried forward -3 951 0
Base for payable tax -64 194 -2 144
Taxes payable acquired in business combination 3 500 0
Summary of temporary differences: 2021 2020
Fixed assets 887 984 552 043
Leasing -14 818 -14 298
Trade receivable -4 490 0
Allocations and other itmes -10 566 -12 953
Loss carried forward -77 649 -5 344
Temporary differences 780 461 519 448
Loss carry forward not recognized * -1 168 0
Basis for deferred tax 779 293 519 448
Deferred tax/-deferred tax assets 171 443 114 278
Deferred tax/-deferred tax assets in Norway 171 443 114 278
Deferred tax/-deferred tax assets abroad 0 0
* Loss carry forward not recognized relates to Cegal FZ LCC, Cegal Canada and the Sysco group.
Effective tax rate 2021 2020
Expected income taxes, tax rate 22 % (Norway)
-31 406 -17 902
Permanent differences and other
1 174 418
Adjustments
598 -1 349
Changes in deferred tax asset not recog. and other
-869 -2 463
Total tax expense -30 502 -21 296
Effective tax rate
21 % 26 %
The acquisition of the Sysco group was partly
financed through a combination of equity and
external bond financing. The bond of NOK
900 million was extended with NOK 600
million. The maximum issue amount is NOK
1 800 million.
Settlement from the investment was 15
September 2021 and net issue proceeds from
the investment was used in part to finance the
merger between Cegal AS and Sysco AS.
The new bonds are issued under separate
ISIN 'NO0011087561' and were merged with
the bonds issued under the original ISIN 'NO
0010869761'.
Interest bearing loans and borrowings -
Bond
The Group, through Chip Bidco AS, has
resolved to issue a series of bonds in the
maximum amount of NOK 1 800 million in
December 2021.
The bonds may be issued on different issue
dates and the initial bond issue was in the
amount of NOK 900 million and extended by
NOK 600 million in 2021. Additional bonds
may be issued subject to certain conditions.
The Company is required to report a
compliance certificate quarterly basis stating
that there has been no material adverse
change to the financial condition since the
date of the last financial reports. The bond
terms hold certain requirements to interest
cover ratio and leverage ratio for distributions
to be allowed and additional bonds to be
issued.
In the current bond agreement Cegal has only
incurrence based covenants, meaning the
that there is only testing once new debt is
incurred. Cegal has no running maintenance
covenants that needs to be compliant at the
end of each testing date, only at the time of
incurrence of new debt. Since we have not
raised any new debt since Q3’21, there has
not been any relevant testing of incurrence
covenant. Cegal is in full compliant with the
loan agreements.
The bond was initially listed at Frankfurt Open
Market Stock Exchange 13 December 2019,
the Nordic ABM in June 2020 and at Oslo
Børs on 21 March 2022.
The bond has been recognized at amortized
cost by using the effective interest rate
method.
NOTE 15 LONG-TERM LIABILITIES
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 46
Chip Bidco • ANNUAL REPORT 2021
2021 CURRENCY TYPE
NOMINAL
AMOUNT
NET BOOK
VALUE
LIMIT MATURITY
Interest bearing loans and
borrow ing
NOK Bond 1 500 000 1 470 268 1 800 000
13 Dec. 2024
Leases NOK
Lease
agreements
89 029 89 029 *
Total 1 589 029 1 559 297 1 800 000
2020 CURRENCY TYPE
NOMINAL
AMOUNT
NET BOOK
VALUE
LIMIT MATURITY
Interest bearing loans and
borrow ing
NOK Bond 900 000 873 960 1 250 000
13 Dec. 2024
Leases NOK
Lease
agreements
113 196 113 196 *
Total 1 127 475 1 101 435 1 250 000
Maturity
The outstanding bonds will mature in full on
the 13 December 2024 and shall be
redeemed by Chip Bidco AS on the maturity
date at a price equal to 100 per cent. of the
nominal amount. The bonds may be
redeemed at an earlier date subject to certain
conditions as set out in the agreement.
Interest rate
The interest rate for the bonds is NIBOR plus
a margin of 5.5 per cent pa. Interests are paid
on a quarterly basis and the first interest
payment date was 12 March 2020.
Pledged as security
The shares in Chip Bidco AS, and its shares
in Cegal AS, Cegal Group AS, SQL Services
Nordic AB, SYSCOse Stockholm AB and
SYSCOseAB have been pledged as security
for the bonds. In addition, the bonds hold a
negative pledge in all of the Group’s assets.
The Group has an overdraft facility of 50
MNOK, in which NOK 0 were used as of 31
December 2020 and NOK 24.2 million in
2021. Further, the bank has a discretionary
leasing facility available for hardware/
software leasing. Accounts receivable, bank
accounts and shares are pledged as security
for the bank overdraft facility in material group
companies as defined in the bond terms.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 47
NOTE 16 OTHER SHORT-TERM LIABILITIES
Chip Bidco • ANNUAL REPORT 2021
NOK thousands
2021 2020
Contract liabilities
37 819 42 019
Salaries
81 426 35 613
Other short-term debt
74 930 1 115
Interest expenses
3 341 2 005
Total 197 516 80 752
NOTE 17 COVID-19 EFFECTS
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 48
NOTE 18 SHARE CAPITAL AND SHAREHOLDER INFORMATION
Chip Bidco • ANNUAL REPORT 2021
SHARE CAPITAL
NUMBER OF
SHARES
FACE VALUE
(NOK)
NOMINAL VALUE
(NOK)
SHARE PREMIUM
(NOK '000)
Total at 31 December 2020
30 000
2.0
60 000
757 135
Share capital increase
–
Cash contribution
0
2.0
60 000
174 221
Share capital increase
–
contribution in kind
0
2.0
60 000
388 009
Total at 31 December 2021
30 000
6.0
180 000
1 319 366
Main
shareholders per 31.12:
NUMBER OF
SHARES
VOTING
RIGHTS
OWNERSHIP
SHARES
Chip
Midco AS
30 000
100 %
100 %
To finance the acquisition of the Sysco group
the shareholder Chip Midco AS made a
capital injection with an increase in share
capital and share premium reserves.
Share capital injection were carried out by
way of contribution in by settlement through
set-off of receivables Chip Midco AS acquired
against the company.
The receivables were acquired by share
subscribers in Chip Topco AS (shareholder of
Chip Midco AS) in connection with the sale of
shares in Sysco AS to Chip Bidco AS.
The share capital was increased by
increasing the nominal value of each existing
share.
COVID-19 is affecting the global economy
and the industries in which the Group
operates. Through careful monitoring of the
global situation, we have followed the advice
given by both national and world health
organizations and, most importantly,
maintain a dynamic business continuity plan
that addresses the concerns and wellbeing of
the organization’s employees as well its
physical and financial assets, including
customer relationships. Necessary measures
have been implemented, and we are
continuously monitoring the development of
the situation.
The Group is delivering business critical data
and applications. Hence, we are a key vendor
for our clients through the pandemic. Keeping
our employees healthy and maintaining our
operation have been our primary focus over the
last years and will still be as important for us in
the time to come. Although there are
uncertainties and risks that are difficult to
manage and project, the board and top
management are comfortable that sufficient
mitigating factors and plans are in place to
handle these risks.
The Group has one cash generating unit
(CGU), which is also the Group’s only
operating and reportable segment. For
impairment testing goodwill acquired through
business combinations is allocated to the
CGU.
Recognized goodwill in the Group amounts to
NOK 977 million as of 31.12.2020, and NOK
1 805 million as of 31.12.2021, and relates
mainly to the acquisition of Cegal Group AS
in 2019 and the Sysco group in 2021 (see
note 21).
The Group performed its annual impairment
test in September 2020 and in September
2021 for goodwill identified and recognized in
previous periods.
The impairment assessment is based on
value in use calculations using cash flows
based on approved business plans for the
period 2022-2025 followed by a terminal
value calculation.
The impairment test was prepared using the
following key assumptions: Revenue growth,
margins, the growth rate in the terminal value
and the discount rate and the impairment test
is also most sensitive to changes in these
assumptions.
Sensitivity analyses
A discount rate of 11,1% has been used in
the calculations. An increase in the discount
rate up to 14.5 % would not result in an
impairment. Further, a terminal growth rate of
2,5% has been used in the impairment test. A
decrease in the terminal growth rate to zero,
would not result in an impairment.
The impairment test shows that there is a
considerable headroom and analysis
prepared by management show that a
reasonable possible change in any key
assumption will not result in an impairment
charge.
Goodwill recognized in 2021
The goodwill related to the Sysco-acquisition
was allocated to the CGU after the date of the
annual impairment test that was performed in
September 2021. Goodwill from the Sysco
acquisition was allocated as part of the
preliminary purchase price allocation during
the fourth quarter of 2021. The Company
assessed that no impairment indicators were
identified at the balance sheet date, hence no
impairment test was prepared.
NOTE 19 IMPAIRMENT TESTING OF GOODWILL
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 49
Chip Bidco • ANNUAL REPORT 2021
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 50
NOTE 20 REVENUE
Chip Bidco • ANNUAL REPORT 2021
We refer to note 1.5 for a description of the
various type of revenues. Contract liabilities
revenue in the balance sheet (ref. note 16) is
due to revenues from sale of licenses and
maintenance (software products) that are
recognized over the contract period (over
time). All contract liabilities in the balance
sheet at the beginning of the year, are
recognized as sales revenue in the current
year.
Revenue is either paid in advance (software
products) or by credit. The payment terms for
credit sale is normally 30 days, except for one
By activity, region and timing
customer who has 60 days of credit (6 % of
total revenue).
Revenues from large customers
The 10 largest customers amount to 56 %
of total revenue in 2020, and to 51 % in
2021.
The largest customer accounts for 19 % of
total revenue, while top 5 customers
accounts for 34 % in 2021.
ACTIVITY DISTRIBUTION BY
REGION
(NOK thousands)
2021 2020
ACTIVITY DISTRIBUTION BY
BUSINESS UNIT
(NOK thousands)
2021 2020
Norway & Continental Europe 836 170 667 586 Cloud operations 556 556 495 129
UK & Africa 116 493 79 992 Consulting & Business Services 260 379 144 346
North & South America 24 462 26 662 Products 173 108 109 645
Middle East & Asia Pacific 15 253 11 295 Other 2 336 36 415
Total per region 992 378 785 535 Total per business unit 992 378 785 535
TIMING OF REVENUE
RECOGNITION
(NOK thousands)
2021 2020
ASSETS BY REGION
(NOK thousands)
2021 2020
Products and services Norway & Continental Europe 3 192 324 1 890 478
transferred at a point in time 351 714 183 261 UK & Africa 60 641 54 102
Products and services North & South America 19 752 13 989
transferred over time 640 664 602 274 Middle East & Asia Pacific 12 515 8 168
Total per 992 378 785 535 Total per 3 285 232 1 966 737
Acquisition of the Sysco Group
On 7 October 2021 Chip Bidco AS entered
into an agreement to acquire 100% of the
shares and voting rights of the Sysco group
(Sysco) for NOK 1 068.4 million. Sysco is a
Nordic provider of smart applications,
specialized consultancy services and secure
operation and monitoring of IT infrastructure
and databases, primarily serving customers in
the power and utilities market.
The acquisition was financed through a
combination of equity and external bond
financing.
Net proceeds of the bond tap issue was NOK
588.2 million, whereas NOK 388.1 million was
re-invested by previous owners and
employees of Sysco. The remainder of the
transaction was financed by equity
contribution.
The shares were acquired on 7 October
2021, which was the day the Group obtained
control of the subsidiary. The transaction date
for accounting purposes is set to 1 October
2021.
NOTE 21 ACQUISITIONS
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 51
Chip Bidco • ANNUAL REPORT 2021
The fair-values of the identifiable assets and liabilities of Sysco as at 1 October 2021:
FAIR VALUE RECOGNIZED
(in NOK million)
ON ACQUISITION
Assets
Technology
103.8
Customer
relations
347.0
Other
long-term assets
3.1
Deferred tax asset
2.7
Fixed assets
5.8
Trade receivables
87.4
Other receivables
12.0
Cash and cash equivalents
107.2
Total fair values of assets acquired
668.9
The acquisition has been accounted for and
treated as a business combination. The Chip
Bidco group constitutes of one CGU, whereto
tangible and intangible assets, liabilities and
goodwill have been allocated. As of 1 October
2021, Chip Bidco AS recognized, separately
from goodwill, the identifiable assets
acquired, the liabilities assumed measured at
their fair value and as of that date.
Goodwill represents the excess purchase
price after all the identifiable assets are
recognized. Total goodwill is estimated to
NOK 788.1 million including assembled
workforce and technical goodwill resulting
from the deferred tax on fair value
adjustments. Goodwill relates to the expected
growth and the value of the Sysco group’s
workforce which cannot be separately
recognized as an intangible asset. The
goodwill is not deductible for tax purpose.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 52
Chip Bidco • ANNUAL REPORT 2021
FAIR VALUE RECOGNIZED
ON ACQUISITION
Liabilities
Total
allowance for liabilities
2.1
Acquisition
debt (due after 12 months)
98.1
Other
long-term liabilities
35.3
Accounts
payable
25.1
Income
taxes payable
8.9
Public duties payable
33.8
Other short
-term liabilities
185.3
Total fair values of liabilities assumed
388.6
Total identifiable net assets at fair value
280.3
Goodwill
788.1
Purchase
consideration
1 068.4
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 53
Chip Bidco • ANNUAL REPORT 2021
Purchase consideration
Cash paid at acquisition date
680.4
Re
-investment vendor loan
388.1
Total consideration
1 068.4
Analysis of cash flows on acquisition:
Transaction costs of the acquisition (included in cash flows from operating activities)
29.3
Cash consideration
680.4
Settlement of existing acquisition debt in Sysco
146.1
Net cash acquired with the subsidiary (included in cash flows from investing activities)
-
107.2
Net cash flow on acquisition (included in investing activities)
719.3
Transaction costs of NOK 29.3 million were expensed and are included in other operating
expenses.
Sysco’s
contribution to the Group results
The Sysco group contributed with NOK 161
million in revenue for the period 1 October to
31 December 2021, and with a net profit before
tax of 1 million.
Had the acquisition occurred on 1 January
2021, the Group's revenue for the period to 31
December 2021 would have been NOK
1 242 million and the group's loss before tax for
the period would have been NOK 125 million.
These amounts have been determined by
applying the Group's accounting policies and
adjusting the results to reflect additional
depreciation and amortization that would have
been charged assuming the fair value
adjustments to intangible assets had been
applied from 1 January 2021. Further, interest
expenses have been adjusted, reflecting the
interest expense for the year on the Group's
financing structure post transaction.
Acquisition of the Envision Group
On 20 May 2021 the Group acquired all the
shares in Envision AS for a total
consideration of NOK 27.6 million (NOK 20.1
million net of cash acquired). NOK 14.9
million was allocated to goodwill and NOK 3.9
was allocated to other intangible assets.
The acquisition did not have a material effect
on the Group.
These purchase price allocations are not
final.
NOTES TO THE GROUP FINANCIAL STATEMENT 2021 54
Chip Bidco • ANNUAL REPORT 2021
The Group has bought consulting services from Orkan Konsult AS for NOK 558 thousand in
2020 and NOK 551 thousand in 2021. Orkan Konsult AS owns 0.24 % of the shares through
Chip Topco AS.
NOTE 22 RELATED PARTY TRANSACTIONS
On 21 March 2022, the Group listed a senior secured 1 500 million bond at the Oslo Stock
Exchange after having previously been listed on Nordic ABM. The bond has a maximum
principal amount of 1 800 million and the maturity date is 13 December 2024.
In addition, the Group has a non-sanctioned subsidiary established in Russia as part of serving
two of its customers in the country. However, the revenues from the Russian entity is very
limited, 0.7% of the total, and the assets are only 0.1% of the Group’s total assets. Hence, the
exposure for the Group is considered limited in terms of the Russian entity.
The Group has also established a group, designated by management, to monitor the Group’s
exposure to the ongoing situation in Ukraine. Currently the exposure is considered limited,
however we are monitoring all relevant aspects of the situation and take appropriate measures
whenever appropriate.
NOTE 23 SUBSEQUENT EVENTS
Chip Bidco AS
Company annual
accounts 2021
COMPANY ANNUAL ACCOUNTS 56
Chip Bidco • ANNUAL REPORT 2021
INCOME STATEMENT (NOK thousands)
NOTE 2021 2020
Operating expenses
Other operating expenses 2 1 892 2 412
Total operating expenses 1 892 2 412
Operating result -1 892 -2 412
Financial income and expenses
Income from subsidiaries 4 543 67 198
Other interest income 3 225
Interest expense to group companies 9 3 207 980
Other interest expenses 7 74 296 65 050
Net financial income (loss) -72 957 1 394
Net profit (loss) before tax -74 849 -1 018
Tax expense 8 -16 467 -416
Net profit (loss) for the year -58 382 -602
Allocation of result for the year
Allocated to other equity -58 382 -602
Total allocation -58 382 -602
Chip Bidco • ANNUAL REPORT 2021
COMPANY ANNUAL ACCOUNTS 57
BALANCE SHEET AS OF DECEMBER 31 (NOK thousands)
NOTE 2021 2020
NON-CURRENT ASSETS
Intangible assets
Deferred tax assets 8 16 883 416
Total intangible assets 16 883 416
Financial assets
Receivables from group companies 9 75 114 70 784
Investments in subsidiaries 6 2 765 462 1 614 915
Total financial assets 2 840 576 1 614 915
NON- CURRENT ASSETS 2 857 459 1 615 332
CURRENT ASSETS
Receivables
Other receivables 561 315
Total receivables 561 71 099
Cash and cash equivalents 3 327 201
Total current assets 888 71 301
TOTAL ASSETS 2 858 347 1 686 632
Chip Bidco • ANNUAL REPORT 2021
COMPANY ANNUAL ACCOUNTS 58
BALANCE SHEET AS OF DECEMBER 31 (NOK thousands)
NOTE 2021 2020
EQUITY
Paid-in capital
Share capital 4, 5 180 60
Share premium reserve 5 1 319 365 757 136
Total paid-in capital 1 319 545 757 196
Retained earnings
Other equity 5 -62 371 -3 989
Total retained earnings -62 371 -3 989
Total equity 1 257 174 753 207
LIABILITIES
Long-term liabilities
Bonds 7 1 470 268 873 960
Liabilities to group companies 9 126 040 57 133
Total other long-term liabilities 1 596 308 873 960
Current liabilities
Trade creditors 1 524 327
Other current debt 3 341 2 006
Total current liabilities 4 865 59 465
Total liabilities 1 601 173 933 425
TOTAL EQUITY AND LIABILITIES 2 858 347 1 686 632
Stavanger, 30 April 2022
Fredrik Gyllenhammar Raaum (dig. sign.) Dagfinn Ringås (dig. sign.)
Chairman CEO
Chip Bidco • ANNUAL REPORT 2021
COMPANY ANNUAL ACCOUNTS 59
STATEMENT OF CASH FLOWS (NOK thousands)
NOTE 2021 2020
Cash flow from operating activities
Profit (loss) before tax -74 849 -1 018
Change in account payable 1 197 327
Changes in other current balance sheet items -67 818 -68 937
Net cash flow from operating activities -141 469 -69 628
Cash flow from investing activities
Investment in subsidiary -762 478 0
Change in non-current receivables from group companies -4 330 -1 073
Net cash flow from investment activities -766 808 -1 073
Cash flow from financing activities
Proceeds from new long-term debt 596 308 6 510
Change in non-current liabilities to group companies 68 907 57 133
Capital contribution 174 281 0
Net cash flow from financing activities 908 403 63 642
Total change in cash and cash equivalents 126 -7 059
Cash and cash equivalents beginning of period 201 7 260
Cash and cash equivalents end of period 327 201
The annual accounts have been prepared in
accordance with the Norwegian Accounting
Act and generally accepted accounting
principles.
Use of estimates
The preparation of accounts in accordance
with the Accounting Act requires the use of
estimates. It also requires Group
management to exercise judgment in
applying the Group's accounting policies. The
areas where significant judgments and
estimates have been made in preparing the
financial statements and their effect are
disclosed in the notes.
Investments in subsidiaries and
associated companies
Subsidiaries and investment in associated
companies are valued by the cost method in
the company accounts. The investment is
valued as cost of acquiring shares in the
subsidiary, providing that write-down is not
required. Write-down to fair value will be
carried out if the reduction in value is caused
by circumstances which may not be regarded
as incidental and deemed necessary by
generally accepted accounting principles.
Write-downs are reversed when the cause of
the initial write-down is no longer present.
Dividends and other distributions are
recognized in the same year as appropriated
in the subsidiary accounts. If dividends
exceed withheld profits after acquisition, the
exceeding amount represents reimbursement
of invested capital, and the distribution will be
subtracted from the value of the acquisition in
the balance sheet.
Long-term liabilities
Interest bearing loans and borrowings are
recognized at amortized cost net of directly
attributable transaction costs.
After initial recognition loans and borrowings
are subsequently measured at amortized cost
using the effective interest rate method (EIR).
Amortized cost is calculated by taking into
account any discount or premium on
acquisition and fees or costs that are an
integral part of the EIR. The EIR amortization
is included as finance costs in the statement
of profit or loss.
Receivables
Trade receivables and other receivables are
recorded in the balance sheet at face value
after deduction of provisions for expected
loss. Provisions for losses are made on the
basis of individual assessments of the
individual receivables. Additionally, for trade
receivables, an unspecified provision is made
to cover expected losses.
NOTES TO THE FINANCIAL STATEMENT
2021
NOTE 1 ACCOUNTING PRINCIPLES
NOTES TO THE FINANCIAL STATEMENT 2021 60
Chip Bidco • ANNUAL REPORT 2021
Tax
The tax charge in the income statement
includes both payable taxes for the period
and changes in deferred tax. Deferred tax is
calculated at 22 % on the basis of the
temporary differences that exist between
accounting and tax values, as well as any
possible taxable loss carried forwards at the
end of the accounting year. Tax enhancing or
tax reducing temporary differences, which are
reversed or may be reversed in the same
period, have been offset and netted. The
disclosure of deferred tax benefits on net tax
reducing differences which have not been
eliminated, and tax losses varied forward
losses, is based on estimated future earnings.
Deferred tax and tax benefits which may be
shown in the balance sheet are presented
net. To what extent group contribution is not
registered in the profit and loss, the tax effect
of group contribution is posted directly against
the investment in the balance.
Cash Flow statement
The cash flow statement has been prepared
according to the indirect method. Cash and
cash equivalents include cash, bank deposits,
and other short-term investments which
immediately and with minimal exchange risk
can be converted into known cash amounts,
with due date less than three months from
purchase date.
Chip Bidco • ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENT 2021 61
No remuneration has been paid to senior
executives or members of the board in 2021.
No loans/securities has been granted to the
general manager, the Board chairman or
other related parties.
Chip Bidco Group does not have its own
General Manager. However, the General
Manager of Cegal Group is also the acting
General Manager in Chip Bidco Group.
OTP (Statutory occupational pension)
The company does not have employees,
consequently it has not been necessary to
establish a statutory occupational pension
scheme in accordance with the Norwegian
law on required occupational pension ("lov
om obligatorisk tjenestepensjon").
NOTE 2 WAGE COSTS, NUMBER OF EMPLOYEES,
REMUNERATION, LOANS TO EMPLOYEES AND AUDITOR’S
NOTE 3 BANK DEPOSITS
Chip Bidco • ANNUAL REPORT 2021
The company has no restricted cash deposits as of 31.12.2020 and 31.12.2021.
NOTE 4 SHARE CAPITAL AND SHAREHOLDER INFORMATION
NOTES TO THE FINANCIAL STATEMENT 2021 62
Expenses paid to the auditor for 2021 amounts to NOK 321 300,- eksl.vat.
Statutory audit fee 321 300
Other services 0
Total audit fee 321 300
SHARE CAPITAL (NOK thousands)
NUMBER OF
SHARES
FACE VALUE
(NOK)
NOMINAL VALUE
(TNOK)
SHARE PREMIUM
(TNOK)
Shares
30 000 6.0 180 1 319 365
Total per 31 December 30 000 6.0 180 1 319 365
Main shareholders per 31.12:
SHARES VOTING RIGHTS
OWNERSHIP
SHARES
Chip Midco AS
30 000 100.00 % 100.00 %
Total 30 000 100.00 % 100.00 %
The acquisition of Cegal Group AS with its
subsidiaries was partly financed through a
combination of equity (Note 13) and external
bond financing. The bond was issued at the
amount of NOK 900 million, adjusted for
transaction costs amounting to approximately
NOK 33 million.
As part of the acquisition of Cegal Group AS,
external bank financing towards Sparebank 1
SR-Bank ASA was assumed. Shortly after the
closing of the transaction, the loan was repaid
in full by Chip Bidco AS on behalf of Cegal
Group AS, and the loan was settled at the
balance sheet date. The total repayment
amounted to NOK 333 million.
Interest bearing loans and borrowings -
Bond
The Group, through Chip Bidco AS, has
resolved to issue a series of bonds in the
maximum amount of NOK 1 800 million in
December 2021.
NOTE 5 EQUITY
Chip Bidco • ANNUAL REPORT 2021
NOTE 6 INVESTMENT IN SUBSIDIARIES
NOTE 7 LONG-TERM LIABILITIES
NOTES TO THE FINANCIAL STATEMENT 2021 63
COMPANY
(NOK thousands)
ACQUISITION
DATE
LOCATION
SHARE
OWNERS
VOTING
RIGHTS
NET
PROFIT
2021
EQUITY
31.12.
BOOK
VALUE
31.12.
Cegal Group AS 20.12.2019 Norway 100 % 100 % 2 032 1 580 988 2 765 462
LONG-TERM LIABILITIES DUE IN 5 YEARS (NOK thousands)
2021 2020
Interest bearing loans and borrowings -1 470 268 -873 960
Accrued interest expense 66 186 58 540
(NOK thousands)
SHARE
CAPITAL
SHARE
PREMIUM
RESERVE
RETAINED
EARNINGS
TOTAL CAPITAL
Equity 01.01
60 757 136 -3 989 753 207
Shareholder's contribution - cash
60
174 281 0 174 341
Shareholder's contribution - in kind
60
388 069 0 388 129
Net profit (loss) for the year
-58 382 -58 382
Total 180 1 319 486 -62 372 1 257 294
The bonds may be issued on different issue
dates and the initial bond issue was in the
amount of NOK 900 million and extended by
NOK 600 million in 2021. Additional bonds
may be issued subject to certain conditions.
The Company is required to report a
compliance certificate quarterly basis stating
that there has been no material adverse
change to the financial condition since the
date of the last financial reports. The bond
terms hold certain requirements to interest
cover ratio and leverage ratio for distributions
to be allowed and additional bonds to be
issued. The bond was initially listed at
Frankfurt Open Market Stock Exchange
13 December 2019, the Nordic ABM in June
2020 and at Oslo Børs on 21 March 2022.
Maturity
The outstanding bonds will mature in full on
the 13 December 2024 and shall be
redeemed by Chip Bidco AS on the maturity
date at a price equal to 100 per cent. of the
nominal amount. The bonds may be
redeemed at an earlier date subject to certain
conditions as set out in the agreement.
Interest rate
The interest rate for the bonds is NIBOR plus
a margin of 5.5 per cent. pa. Interests are
paid on a quarterly basis and the first interest
payment date was 12 March 2020.
Pledged as security
The shares in Chip Bidco AS has been
pledged as security for the bonds. In addition,
the bonds hold a negative pledge in all of the
Group’s assets.
Chip Bidco • ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENT 2021 64
NOTE 8 TAX
Chip Bidco • ANNUAL REPORT 2021
NOTES TO THE FINANCIAL STATEMENT 2021 65
INCOME TAX EXPENSE (NOK thousand)
2021 2020
Total payable tax 0 0
Changes in deffered taxes -16 467 -416
Tax expense -16 467 -416
SPECIFICATION OF BASE FOR PAYABLE TAXES (NOK thousand)
2021 2020
Net profit (loss) before tax -74 849 -1 018
Permanent differences 0 0
Base for payable tax -74 849 -1 018
PAYABLE TAX IN THE BALANCE (NOK thousand) 2021 2020
Payable tax on this year's result -999 -14 784
Payable tax on received Group contribution 999 14 784
Total payable tax in the balance 0 0
Summary of temporary differences: 2021 2020
Loss carried forward -76 741 -1 892
Temporary differences -76 741 -1 892
Loss carry forward not recognized 0 0
Basis for deffered tax -76 741 -1 892
Deferred tax/-deferred tax assets -16 883 -416
Effective tax rate
2021 2020
Expected income taxes, statutory rate 22 %
-16 467 -224
Changes in deferred tax asset not recog. and other
0 -192
Total tax cost -16 467 -416
Effective tax rate
22 % 41 %
Please refer to the subsequent events disclosure for the Group, ref. note 23.
NOTE 9 INTERCOMPANY BALANCES
Chip Bidco • ANNUAL REPORT 2021
Calculated interest in intra-company loan in 2020 is NOK 979 655 and in 2021 NOK 3 207 003.
NOTE 10 SUBSEQUENT EVENTS
NOTES TO THE FINANCIAL STATEMENT 2021 66
RECEIVABLES (NOK thousands)
2021 2020
Group contribution 4 543 67 198
Other receivables 70 571 3586
Total 75 114 70 784
LIABILITIES (NOK thousands)
2020 2020
Liabilities to group companies - 57 133
Total - 57 133
Chip Bidco AS
Org. nr. 923 807 888
www.cegal.com
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