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BOARD OF DIRECTORS' REPORT
Operations and locations
The construction segment consists of two subsidiaries, Metacon and Alento, both turnkey contractors,
operating mainly on the east and west side of the Oslo fjord, respectively. As turnkey contractors
Metacon and Alento designs, engineers and construct commercial buildings to private and public
customers as well as building residential homes for property developers. The majority of the
construction work is carried out through sub-contractors, though Metacon has a long tradition of
designing, manufacturing and installing steel constructions in-house with its own employees.
Within the other business segment, the group develops residential properties for the end customers,
also, primarily in Viken County. The operation in the segment is conducted through the wholly owned
subsidiary Frigaard Bolig and includes all phases from the acquisition of land plots, design and building
by engaging turnkey contractors. The project portfolio is focused on the urban areas of the "inter city
triangle" in south east Norway.
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The Group includes, in addition to Frigaard Property Group AS, the following subsidiaries:
Metacon AS
Alento AS
Frigaard Bolig AS
Høgliveien 30 AS
Høgli Eiendom AS
Fagerliveien Utvikling AS
Ryggeveien 33 AS
Solbyen Utvikling AS
Dronningensgate Atrium AS
Aspelundveien 5 AS, Moenskogen Utvikling AS and Rugdeveien 2 AS were merged with Frigaard Bolig
during 2021.
Comments related to the financial statements
The Group’s revenues increased from MNOK 1 266.7 last year to MNOK 1 583.3 in 2021. The level of
activity in Frigaard Property Group has been high during 2021. New orders signed, revenue, sale of
residential properties and order back-log have all risen to all-time high levels. Unfortunately,
unforeseen events and exceptional costs in one specific project within the Construction segment in
Q4, hampered the year end operating profit. This project is fully handed over in February 2022, and
the loss related to the project in 2021 was MNOK 41.
During 2021 80 development properties were sold, compared to 19 units last year. At year end 31
development properties are under construction.
Total cash flow from operating activities was MNOK 118.5 in 2021, and the operating profit is MNOK
13.2. The difference between cash flow and operating profit mainly concerns timing differences in the
payment plan in the construction projects compared to 2021, and handover of Tribunen 1. The
Group’s cash flow from investments during 2021 amounted to MNOK 21. This is mainly to the
financing of a combined logistic and office building in Tranås, and net cash effect from purchase of
shares in Dronningens gate Atrium AS and Høgli Eiendom AS.
The Group’s liquidity reserve as of 31.12.2021 amounted to MNOK 209.2.
The Group’s short-term debt as of 31.12.2021 constituted 52 % of the Group’s total debt, compared
to 76 % as of 31.12.2020. This decrease is mainly attributable to a MNOK 300 bond, which was
refinanced in February 2021. The Group’s financial position is sound and adequate.
Total assets at year-end amounted to MNOK 1 105, compared to MNOK 1 122 last year. The equity
ratio was 22.3 % as of 31.12.2021, compared to 28.7 % the year before.
Market outlook
The order intake of the Construction segment has been very strong during 2021 and has continued to
be so in the first months of 2022. Consequently the order backlog is high, and a large part of work for
2022 is already secured. At the same time we have had record high sales of residential properties
which secures progress of construction and finally handover at a later stage. These elements provides
a sound basis for a profitable group going forward.
Our market view is in general positive, both to construction overall, as well as for the housing market.
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Still, the turmoil currently created indirectly and directly by the war in Ukraine may have
consequences for the logistic routes and access and prices on goods. We are monitoring the situation
and are adapting our risk assessments on and ongoing basis.
Financial risk
Overall view on objectives and strategy
The company is exposed to financial risk in different areas, especially changes in interest rate and
economic conditions that affect investment in real estate. The goal is to reduce the financial risk as
much as possible. The Group has minor exposure to changes in exchange rates as only a small part of
purchase is done in foreign currency. There is no current strategy to include the use of financial
instruments.
Market risk
Frigaard Property Group's earnings are sensitive to fluctuations in macroeconomic factors that affect
demand from the private market. The development and construction of turnkey homes is particularly
sensitive to cyclical fluctuations, and earnings in Property developments are closely related to new
project start-ups. To reduce the risk associated with unsold projects, Frigaard Property Group will not
as a general principle initiate new construction of turnkey homes until a sale ratio of 50 % has been
achieved.
Credit risk
Credit risk is the risk of financial losses due to the inability of a customer to fulfill their contractual
obligations. The Group’s credit risk is mainly related to the settlement of receivables, with the largest
risk linked to the Group’s trade receivables. The credit risk from trade receivables is linked to the
customer’s ability to pay, not the customer’s willingness to pay (project risk). Credit risk is managed
through the contracts with the contracting client and good credit follow-up routines.
The risk for losses on receivables is considered to be low, but can be expected to increase as a result
of the market conditions. The Group has not yet experienced significant losses on receivables.
Liquidity risk
Liquidity risk is the risk that Frigaard Property Group will not be able to fulfill its payment obligations
when they fall due. Good liquidity is essential to ensure profitability in Frigaard Property Group and
the company’s ability to invest and take risks in capital-intensive activities. Liquidity risk management
is included in the objective of financial flexibility and has high priority. Management, measurement
and control of liquidity are carried out from the project level and on through all the levels of the
organization.
The working environment and the employees
Frigaard Property Group attaches great importance to preventing absence due to sickness. Leave of
absence due to illness totaled 13 747 hours in 2021 (19 785 hours in 2020), which equals
approximately 6.0 % (8.8 % in 2020) of the total working hours in the Group. The decrease, but still
high leave of absence is closely connected to covid 19 and our steel factory. The Group continues to
focus on preventing absence related to sickness and has implemented a variety of measures. HSE and
procedures have been emphasized in the Group under the auspices of the Group's health service.
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There has been no incidence or reporting of work related accidents resulting in significant material
damage or personal injury occurred during the year, which is one the same level as last year.
The working environment is considered good, and efforts for improvements are made on an ongoing
basis.
The group practices zero tolerance for harassment and conduct which may be perceived as
threatening or degrading. The company’s ethical guidelines encourage staff to report actions which
may be contrary to laws, regulations and internal routines, and procedures have been developed for
the reporting of censurable conditions. Whistle-blowing may be made internally or externally, or
anonymously through the online link: https://www.fpg.no/om-oss/varsling. There have been no
reported incidents in 2021.
Equal opportunities and non-discrimination
The Group aims to be a workplace with equal opportunities and has included in its policies regulations
to prevent gender discrimination regarding salary, promotion and recruiting. The Group has
traditionally recruited from environments dominated by men. The Group has 116 employees, of which
eleven are women. The share of women in leading positions is low. The reason for this is that the
Group operates in an industry which has traditionally been dominated by male employees.
The Discrimination Act’s objective is to promote gender equality, ensure equal opportunities and
rights, and to prevent discrimination due to ethnicity, national origin, descent, skin color, language,
religion, and faith. The Group is working actively, determined and systematically to encourage the
act’s purpose within our business. Included in the activities are recruiting, salary and working
conditions, promotion, development opportunities and protection against harassment. The Group’s
aim is to be a workplace with no discrimination due to reduced functional ability and is working
actively to design and implement the physical conditions in such a manner that as many as possible
can utilize the various functions.
Insurance for board members and general manager.
Through the group company Frigaard AS, insurance at Chubb European Group SE (NUF) has been
entered into for the board members and the general manager for their possible liability to the
company and third parties. The insurance covers legal claims, costs related to crisis management,
communication costs and investigation costs.
Environmental report
The Group seeks to limit its impact on the external environment and is promoting sustainability in the
construction industry. Environmental considerations are integrated into all group operations.
Both our construction companies have BREEAM-NOR accredited Professional (BREEAM-NOR-AP),
NGBC and have experience with projects with requirements for BREEAM certification. BREEAM-NOR is
a Norwegian adaptation of BREEAM - Norway's most widespread environmental certification for all
types of buildings. The criteria in the BREEAM-NOR manual are generally stricter than the minimum
standards in building regulations and other regulations. The criteria and performance levels represent
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good or best practice for sustainable design and procurement. Our Construction segment also delivers
fossil-free construction sites when requested from our external customer.
Our steel factory has prepared EPDs for steel production and has certificates for this. An EPD
(Environmental Product Declaration) is a concise third-party verified and registered document with
transparent and comparable information on products' environmental performance throughout the life
cycle. Both the underlying LCA (Life-Cycle Assessment) and the EPD are always based on international
standards. More than 900 EPDs from over 170 companies are now published and freely available at
EPD-Norway.
Our ambition is to be a responsible social participant within the Property development segment,
where we have an environmental ambition for all new projects. Including a project-specific
environmental plan with an indication of the minimum standard and opportunities, which are linked
to the individual project's life cycle. Especially for self-developed projects, the impact is great from the
early phase.
Waste from our operations, including waste considered harmful to the environment, is within
regulatory limitations. The Group’s operations are not regulated by licenses or impositions.
As a part of our environmental work, will our Property Development company and our Construction
companies, have a certification as Miljøfyrtårn (Environmental lighthouse) in place within 2022, and
continuously show improvement of established criteria and KPI that follow from the certification.
Corporate social responsibility (CSR) and sustainability
Frigaard Property Group will create value for the society by building good homes, and by working
actively to ensure sustainable housing. Sustainability is high on the agenda in the group's strategic
development, and the companies work continuously to restructure and improve sustainability
throughout the value chain. We strive to ensure that what we influence and carry out is in line with
the UN's sustainability goals, and that our activities are positive for present and future generations.
Through our agenda, we will create long-term and lasting values for both society and the group.
Ethical, social and environmental considerations are integrated in our day-to-day operations, and our
values of commitment and ingenuity underpin everything we do. Frigaard Property Group’s ethical
guidelines are built on principles of equal opportunities for all, concern for the environment and a
society view that emphasizes ethics, transparency, honesty, and sincerity. The long-term success of
the Group is based on trust. The company has ethical guidelines which are described at:
https://www.fpg.no/om-oss/samfunnsansvar-.
The company’s goal is to be a good and secure workplace, which requires that it and its suppliers
pursue their operations in compliance with applicable legislation and statutory regulations. Frigaard
Property Group has zero tolerance for corruption and is concentrating particularly on measures to
combat corruption and ensure compliance with laws and regulations throughout the construction and
supply chains.
Frigaard Property Group is working actively to increase the proportion of women in the company, and
to ensure women’s full and effective participation and equal opportunities for leadership at all levels
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of decision-making in Frigaard Property Group. The percentage of women working in the Group has
increased to 9.5% compared to 7.8% in 2020.
Frigaard Property Group works hard to protect labour rights and promote safe and secure working
environments for all workers, including migrant workers. Our target is zero serious injuries on our
employees, which is something we have achieved this year.
The company expanded its statement on sustainability in 2021, see page 72, to form a separate part of
its annual reporting. That work continues in 2022, and the company will establish further specific goals
and measures during 2022.
Corporate governance
Good corporate governance is a board responsibility. Frigaard Property Group reports in accordance
with the requirements in section 3-3b of the Accounting Act. A statement on the group’s corporate
governance work is provided see page 73.
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Post balance sheet events
No events with a material effect on the issued accounts have occurred after the balance sheet date.
However, it should be noted that the accounts reflect project estimates based on a normal situation of
full operation and ordinary project staffing levels. The progress of current projects may be affected by
the ongoing war in Ukraine, and the effects of the war will depend on its scope and duration. For the
construction segment we see that the situation with turbulent markets for raw material, alternative
solutions must be considered to balance the risk between subcontractors, turnkey contractors, and
the client. This can be interaction agreements or sharing of risk both with the client and with the
subcontractor.
There have been no further developments related to the war which have materially affected the year-
end assessments.
No other events have occurred after the balance sheet date which have had a material effect on the
issued accounts.
The parent company Frigaard Property Group AS
The primary task of the parent company Frigaard Property Group AS is to exercise ownership over the
operative entities in the Group. There are three employees in the parent company in 2021. Frigaard
Property Group AS accounts are prepared in compliance with NGAAP (Norwegian accounting rules).
Allocation of the net profit
The parent company Frigaard Property Group AS, made a net profit of MNOK 10.9 (MNOK 5.8). The
parent company’s equity amounted to MNOK 139.8 (198.7) at 31 of December.
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 profit forecasts for the
year 2020 and the Group’s long-term strategic forecasts. The Group’s economic and financial position
is sound.
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INCOME STATEMENT FRIGAARD PROPERTY GROUP
STATEMENT OF COMPREHENSIVE INCOME
Revenue from contracts with customers 3.4 1 582 319 1 219 078
Other operating revenue 4,10 952 47 599
Total operating revenue 1 583 271 1 266 677
Materials, subcontractors and consumables 1 400 545 1 020 327
Salaries and personnel expense 5 133 558 129 789
Other operating expense 6,9,20 27 923 24 459
Operating profit (loss) before depreciation, amortisation and impairment
losses (EBITDA) 21 245 92 102
Depreciation and amortisation expense 7,8,9 8 022 7 507
Operating profit (EBIT) 13 223 84 595
Interest income 3 524 998
Interest expense 22 079 20 970
Net financial costs 18 555 19 972
Profit before income tax -5 332 64 623
Income taxes 15 -197 6 346
Net profit (loss) for the period -5 135 58 277
2 021 2 020
Other comprehensive income
Items which may be reclassified to profit and loss in subsequent periods
Exchange differences on translation of foreign subsidairies - 5
Total comprehensive income for the year -5 135 58 282
Profit for the year attributable to:
Equity holders of the parent company -5 135 58 277
-5 135 58 277
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STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP
ASSETS Note 31.12.2021 31.12.2020
All amounts in NOK thousand
Non-current assets
Other intangible assets 7 127 333
Goodwill 7 284 019 284 019
Buildings and land 8 3 798 4 342
Machinery and equipment 8 4 439 4 057
Right-of-use assets 9 12 576 16 687
Other long term receivables 10 - 9 324
TOTAL NON-CURRENT ASSETS 304 959 318 762
Current assets
Inventories and development properties 11 334 759 327 694
Trade receivables 12,18 113 538 117 042
Contract assets 12,18 63 781 66 007
Other short-term receivables 10 79 320 33 965
Cash and cash equivalents 13,18 209 168 258 756
TOTAL CURRENT ASSETS 800 566 803 464
TOTAL ASSETS 1 105 525 1 122 226
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STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP
EQUITY AND LIABILITIES Note 31.12.2021 31.12.2020
All amounts in NOK thousand
Equity
Share capital 14 467 543
Share premium reserve 167 396 216 389
Total paid-in capital 167 863 216 932
Retained earnings 79 187 105 081
Total retained earnings 79 187 105 081
TOTAL EQUITY 247 050 322 013
Non-current liabilities
Deferred tax 15 22 336 22 493
Bond loan 16,18 296 256 -
Liabilitites to financial institutions 16,18 38 944 25 059
Construction loan 16 4 889 62 857
Leasing liabilities 9 6 985 10 360
Other non-current liabilities 11 45 955 72 719
TOTAL NON-CURRENT LIABILITIES 415 365 193 488
Current liabilities
Bond loan current 16,18 - 298 565
Lease liabilities 9 5 215 5 974
Trade account payables 18 222 243 136 989
Public duties payable 10 270 23 186
Contract liabilities 4,12,18 117 326 64 202
Other short-term liabilities 17,19 88 056 77 809
TOTAL CURRENT LIABILITIES 443 110 606 725
TOTAL LIABILITIES 858 475 800 213
TOTAL EQUITY AND LIABILITIES 1 105 525 1 122 226
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STATEMENT OF CHANGES IN EQUITY FRIGAARD PROPERTY GROUP
Total equity
Other Equity
Share
capital
Share
premium
reserve
Retained
earnings
Total other
equity
Equity as at 01.01 2020 543 216 389 46 798 46 798 263 730
Comprehensive income
Profit for the period - - 58 277 58 277 58 277
Other comprehensive income - - 5 5 5
Equity as at 31.12 2020 543 216 389 105 080 105 080 322 013
Total
equity
Other Equity
Share
capital
Share
premium
reserve
Retained
earnings
Total other
equity
Equity as at 01.01 2021 543 216 389 105 080 105 080 322 013
Transaction with owners
Capital decrease -76 -39 752 -39 828
Dividends -9 241 -20 759 -20 759 -30 000
Comprehensive income
Profit (loss) for the period - - -5 135 -5 135 -5 135
Equity as at 31.12 2021 467 167 396 79 186 79 186 247 050
Attributable to equity holders of the parent company
Attributable to equity holders of the parent company
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STATEMENT OF CASHFLOW FRIGAARD PROPERTY GROUP
All amounts in NOK thousand
Note 2021 2020
Cash flow from operations
Profit before income taxes -5 332 64 623
Taxes paid in the period 16 - -
Adjustment for gains on disposal of shares in subsidiaries 11 - -46 595
Depreciation 8, 9 8 022 7 507
Impairement of fixed assets 322 110
Change in inventory 12 16 452 -54 104
Change in trade receivables 13 72 230 17 428
Change in trade account payables 85 209 16 531
Change in other provisions -58 359 61 652
Net cash flow from operations 118 544 67 152
Cash flow from investments
Purchase of fixed assets and investment property 8,10 -2 024 -1 523
Purchase of subsidiaries (net of cash) -5 857 -
Proceeds from sale of other investments and sale of subsidiaries 11 - 25 998
Purchase of other investment -18 231 -4 487
Net cash flow from investments -26 112 19 988
Cash flow from financing
Proceeds from the issuance of bonds 16 300 000 -
Payment of bonds 16 -303 000 -
Issue costs paid -5 465 -
Repayment of long term loans 17 -115 -8 540
Proceeds from long term construction loans 17 103 523 95 170
Repayment of construction loans -161 491 -81 024
Repayment of short term loans - -5 081
Repayment of financial lease liabilities 9 -5 644 -5 319
Capital reduction -39 828 -
Payment of dividend -30 000 -
Net cash flow from financing -142 020 -4 794
Net change in cash and cash equivalents -49 588 82 346
Cash and cash equivalents at the beginning of the period 258 756 176 410
Cash and cash equivalents at the end of the period 209 168 258 756
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TABLE OF CONTENTS NOTES FRIGAARD PROPERTY GROUP
NOTE 1. ACCOUNTING POLICIES – FRIGAARD PROPERTY GROUP ......................................................... 15
NOTE 2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ................ 15
NOTE 3. SEGMENT INFORMATION ........................................................................................................ 33
NOTE 4. OPERATING AND OTHER INCOME ............................................................................................ 34
NOTE 5. PERSONNEL EXPENSES ............................................................................................................. 35
NOTE 6. OTHER OPERATING EXPENSES ................................................................................................. 36
NOTE 7. INTANGIBLE ASSETS ................................................................................................................. 37
NOTE 8. PROPERTY, PLANT AND EQUIPMENT ....................................................................................... 39
NOTE 9. LEASES, RIGHT OF USE ASSETS AND LEASE LIABILITIES ............................................................ 40
NOTE 11. DEVELOPMENT PROPERTIES .................................................................................................. 43
NOTE 12. TRADE RECEIVABLES AND CONTRACT BALANCES .................................................................. 44
NOTE 13. CASH AND CASH EQUIVALENTS ............................................................................................. 45
NOTE 14. NUMBER OF SHARES, SHAREHOLDERS ETC. .......................................................................... 46
NOTE 15. INCOME TAX EXPENSE AND DEFERRED TAX .......................................................................... 47
NOTE 16. NON CURRENT LIABILITIES ..................................................................................................... 48
NOTE 17. OTHER SHORT-TERM LIABILITIES ........................................................................................... 50
NOTE 18. FINANCIAL INSTRUMENTS ..................................................................................................... 51
NOTE 19. WARRANTY PROVISIONS ........................................................................................................ 52
NOTE 20. RELATED PARTY TRANSACTION .............................................................................................. 52
NOTE 21. EVENTS AFTER THE REPORTING DATE ................................................................................... 53
SUSTAINABILITY IN FRIGAARD PROPERTY GROUP ................................................................................. 72
CORPORATE GOVERNANCE ................................................................................................................... 73
DIRECTORS’ RESPONSIBILITY STATEMENT ............................................................................................. 76
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NOTE 1. ACCOUNTING POLICIES – FRIGAARD PROPERTY GROUP
General information
consolidated accounts include Frigaard Property Group AS and its subsidiaries. The consolidated
financial statements were approved in the board meeting on the 25
th
of April 2022. The Group's
activities are described in greater detail in Note 3 – Segment information.
The head office is located at Sandesundsveien 2, 1724 Sarpsborg .
NOTE 2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
2.1 Income and cash flow statements
Frigaard Property Group has elected to present a single consolidated statement of comprehensive
income and presents its expenses by nature.
The Group reports cash flows from operating activities using the indirect method. Interest received is
presented within investing cash flows, and interest paid is presented within operating cash flows.
2.2. Financial reporting framework and basis of preparation of the consolidated financial statements
The 2021 consolidated financial statements for Frigaard Property Group AS’ have been prepared in
accordance with International Financial Reporting Standards (IFRS) as endorsed by the EU as of
31.12.2021, interpretations by the IFRS interpretations Committee and Norwegian disclose
requirements listed in the Norwegian Accounting Act as of 31.12.2021.
The consolidated financial statements have been prepared on a historical cost basis, except for certain
financial assets and liabilities that are measured at fair value.
The functional currency of the parent company is Norwegian Kroner (NOK), and this is also the
presentation currency of both the parent and the group.
The preparation of financial statements in accordance with IFRS requires the use of accounting
estimates which by definition, will seldom equal the actual results. Management also needs to
exercise judgement in applying the group’s accounting policies. Accounting estimates are areas that
involve a higher degree of judgement or complexity, and of items which are more likely to be
materially adjusted due to estimates and assumptions turning out to be wrong. Detailed information
about each of these estimates and judgements is included in paragraph 6.
The consolidated accounts have been prepared on the basis of uniform accounting principles for
equivalent transactions and events under otherwise equivalent circumstances.
The consolidated financial statements have been prepared on a going concern basis.
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2.3 Consolidation principles and equity accounting
Subsidiaries
Control
Subsidiaries are all entities (including structured entities) over which the group has control. The group
controls an entity when the group is exposed to, or has rights to, variable returns from its involvement
with the entity and has the ability to affect those returns through its power to direct the activities of
the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the
group. They are deconsolidated from the date that control ceases. The acquisition method of
accounting is used to account for business combinations by the group.
All intercompany transactions, balances, income, expenses and unrealised gains on transactions are
eliminated in full in consolidation. Unrealised losses are also eliminated unless the transaction
provides evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have
been changed where necessary to ensure consistency with the policies adopted by the Group.
Non-controlling interests in the results and equity of subsidiaries are shown separately in the
consolidated statement of profit or loss, statement of comprehensive income, statement of changes
in equity and balance sheet respectively.
The Group treats transactions with non-controlling interests that do not result in a loss of control as
transactions with equity owners of the Group. A change in ownership interest results in an adjustment
between the carrying amounts of the controlling and non-controlling interests to reflect their relative
interests in the subsidiary. Any difference between the amount of the adjustment to non-controlling
interests and any consideration paid or received is recognized in a separate reserve within equity
attributable to owners of Frigaard Property Group AS.
2.3.1 Accounting for business combinations
The Group applies the acquisition method to account for business combinations. The consideration
transferred for the acquisition of a subsidiary that meets the definition of a business is the fair values
of the assets transferred, the liabilities incurred to the former owners of the acquire and the equity
interests issued by the Group. The consideration transferred includes the fair value of any asset or
liability resulting from a contingent consideration arrangement. Identifiable assets acquired and
liabilities and contingent liabilities assumed in a business combination are measured initially at their
Group Companies Location Ownership
Frigaard Property Group AS (parent company) Sarpsborg 100%
Metacon AS Rakkestad 100%
Alento AS Drammen 100%
Sub-group Frigaard Bolig:
Frigaard Bolig AS (parent company in sub-group) Sarpsborg 100%
Fagerliveien Utvikling AS Sarpsborg 100%
Ryggeveien 33 AS Sarpsborg 100%
Solbyen Utvikling AS Sarpsborg 100%
Dronningensgate Atrium AS Sarpsborg 100%
Sub-group Høgliveien:
Høgliveien 30 AS (parent company in sub-group) Sarpsborg 100%
Høgliveien Eiendom AS Sarpsborg 100%
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fair values as at the acquisition date. The Group recognizes any non-controlling interest in the
acquiree on an acquisition-by-acquisition basis, either at fair value or at the non-controlling interest’s
proportionate share of the recognized amounts of acquirer's identifiable net assets.
Acquisition related costs are expensed as incurred. If the business combination is achieved in stages,
the acquisition date carrying value of the acquirer’s previously held equity interest in the acquiree is
remeasured to fair value as at the acquisition date, any gains or losses arising from such
remeasurement are recognised in profit or loss.
Any contingent consideration to be transferred by the Group is recognised at fair value at the
acquisition date. Subsequent changes to the fair value of the contingent consideration that are
deemed to be an asset or liability are recognised in profit or loss. Contingent consideration that is
classified as equity is not remeasured, and its subsequent settlement is accounted for within equity.
The excess of the consideration transferred, the amount of any non-controlling interest in the
acquiree and the acquisition date fair value of any previous equity interest in the acquiree over the fair
value of the identifiable net assets acquired is recorded as goodwill. If the total amount of
consideration transferred, non-controlling interest recognized and previously held interest measured
is less than the fair value of the net assets of the business acquired in the case of a bargain purchase,
the difference is recognized directly in the income statement
Accounting for asset acquisitions
For acquisition of a subsidiary not meeting the definition of a business, the Group allocates the cost
between the individual identifiable assets and liabilities in the Group based on their relative fair values
as at the date of acquisition. Such transactions or events do not give rise to goodwill.
Changes in ownership interests in subsidiaries without change of control
Transactions with non-controlling interests that do not result in loss of control are accounted for as
equity transactions – that is, as transactions with the owners in their capacity as owners. The
difference between the fair value of any consideration paid and the relevant share acquired of the
carrying value of net assets of the subsidiary is recorded in equity. Gains or losses on disposals to non-
controlling interests are also recorded in equity.
Disposal of subsidiaries
When the Group ceases to have control, any retained interest in the entity is remeasured to its fair
value at the date when control is lost, with the change in the carrying amount recognised in profit or
loss. The fair value is the initial carrying amount for the purposes of subsequently accounting for the
retained interest as an associate, joint venture or financial asset. In addition, any amounts previously
recognised in other comprehensive income in respect of that entity are accounted for as if the Group
had directly disposed of the related assets or liabilities. This may mean that amounts previously
recognised in other comprehensive income are reclassified to profit or loss.
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2.4 Current versus non-current classification
The Group presents assets and liabilities in the consolidated statement of financial position as either
current or non-current.
The Group classifies an asset as current when it:
Expects to realise the asset, or intends to sell or consume it, in its normal operating cycle
Expects to realise the asset within twelve months after the reporting period
Or
The asset is cash or a cash equivalent, unless the asset is 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.
The Group classifies a liability as current when it:
Expects to settle the liability in its normal operating cycle
Is due to be settled within twelve months after the reporting period.
Or it does not have an unconditional right to defer settlement of the liability for at least twelve
months after the reporting period.
All other liabilities are classified as non-current, including deferred tax liability.
2.5 Segment reporting
Operating segments are reported in a manner consistent with the internal reporting provided to the
board.
Frigaard Property Group AS has defined its two segments as:
Property development
Construction
See Note 3 on segment reporting for more details. See also the detailed description under income
recognition.
2.6 Development properties
Land for development
Development projects involve construction of turnkey homes and commercial buildings for sale on
Frigaard Property Group's own account. Cost incurred in respect of sites for development and units
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under construction are recognized under this item. Most of the projects run for longer than 12
months, and assets may therefore not be realized and settled until after more than 12 months have
passed. In terms of accounting, sites and projects are presented as inventory.
By the time a residential project is initiated, there is normally only limited uncertainty regarding
financial outcome of the project. At this point of time the main risk is related to whether the
remaining units under construction will be sold. There is a limited risk regarding construction costs, as
most of the main purchases have been agreed upon at an early stage in the construction phase.
The cost of land for development are capitalised together with the cost of the plot as inventory.
Subsequent costs associated with developing and constructing a project are usually first capitalised
after the plot acquires planning permission. All costs except general sales and administrations costs
are then capitalized as part of the acquisition cost, including interest expenses for as long as the
project is ongoing.
Unsold land and property
Unsold land and property are capitalized under development properties. Fair value of development
properties is based on concrete, individual assessments. If fair value is considered to be lower than
cost price, write-downs are made at fair value.
2.7 Property, plant and equipment
All property, plant and equipment (PPE) are stated at historical cost less accumulated depreciation and
impairment losses. Cost of an item of PPE includes its purchase price and any directly attributable
costs. Cost includes the cost of replacing part of an existing PPE at the time that cost is incurred if the
recognition criteria's are met and excludes the costs of day-to-day servicing of an item of PPE.
Subsequent costs are included in the asset’s carrying amount or are recognized as a separate asset, as
appropriate, only when it is probable that future economic benefits associated with the item will flow
to the Group and the cost of the item can be measured reliably. The carrying amount of those parts
that are replaced is derecognized.
All other repairs and maintenance are charged to the income statement during the financial period in
which they are incurred. Depreciation, based on a component approach, is calculated using the
straight-line method over the following useful life (commencing when the asset is ready for its
intended use):
Buildings, 20 years
Machinery and equipment, 3 -7 years
Other assets, 3 -5 years
A component of an item of property, plant and equipment with a significantly differing useful life and
a cost that is significant in relation to the item is depreciated separately. At each financial year-end the
Group reviews the residual value and useful life of its assets, with any estimate changes accounted for
prospectively over the remaining useful life of the asset. Tangible assets with an indefinite useful life
are not depreciated.
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An asset’s carrying amount is written down immediately to its recoverable amount if its carrying
amount is greater than its estimated recoverable amount. Gain and losses on disposal are determined
by comparing the transaction price to the book value of the assets. When assets are sold or disposed
of, the carrying amount is derecognized and any gain or loss is recognized in the statement of
comprehensive income.
2.8 Leasing activities
The group applies IFRS 16 when recognizing leases as right–of-use assets and liabilities.
Identifying a lease
At the inception of a contract, The Group assesses whether the contract is, or contains, a lease. A
contract is, or contains, a lease if the contract conveys the right to control the use of an identified
asset for a period of time in exchange for consideration. To determine whether a contract conveys the
right to control the use of an identified asset, the Group assesses whether:
The agreement creates enforceable rights of payment and obligations
The identified asset is physically distinct
It has the right to obtain substantially all of the economic benefits from use of the asset
It has the right to direct he use of the asset
The supplier does not have a substantive right to substitute the asset throughout the period
of use
The group leases various properties, equipment and cars. Rental contracts are typically made for fixed
periods of one to five years but property lease agreements may have further extension options. Lease
terms are negotiated on an individual basis and contain a range of different terms and conditions. The
lease agreements do not impose any covenants, but leased assets may not be used as security for
borrowing purposes.
Group as a lessee
For contracts that constitutes, or contains a lease, the Group separates lease components if it benefits
from the use of each underlying asset either on its own or together with other resources that are
readily available, and the underlying asset is neither highly dependent on, nor highly interrelated with,
the other underlying assets in the contract. The Group then accounts for each lease component within
the contract as a lease separately from non-lease components of the contract.
Recognition of leases and exemptions
At the lease commencement date, the Group recognises a lease liability and corresponding right-of-
use asset for all lease agreements in which it is the lessee, except for the following exemptions
applied:
Short-term leases (defined as 12 months or less)
Low value assets
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For these leases, the Group recognises the lease payments as other operating expenses in the
statement of profit or loss when they incur.
Measuring the lease liability
The lease liability is initially measured at the present value of the lease payments for the right to use
the underlying asset during the lease term that are not paid at the commencement date. The present
value is calculated using the interest rate implicit in the lease, if that rate can’t be determined the
group’s incremental borrowing rate is used instead.
The lease term represents the non-cancellable period of the lease, together with periods covered by
an option to extend the lease when the Group is reasonably certain to exercise this option, and
periods covered by an option to terminate the lease if the Group is reasonably certain not to exercise
that option.
The lease payments included in the measurement comprise of:
Fixed lease payments (including in-substance fixed payments), less any lease incentives
receivable
Variable lease payments that depend on an index or a rate, initially measured using the index
or rate at the commencement date
Amount expected to be payable by the Group under residual value guarantees
The exercise price of a purchase option, if the Group is reasonably certain to exercise that
option
Payments of penalties for terminating the lease, if the lease term reflects the Group exercising
an option to terminate the lease.
The Group does not include variable lease payments in the lease liability arising from contracted index
regulations subject to future events, such as inflation. Instead, the Group recognises these costs in
profit or loss in the period in which the event or condition that triggers those payments occurs.
The lease liability is subsequently measured by increasing the carrying amount to reflect interest on
the lease liability, reducing the carrying amount to reflect the lease payments made and remeasuring
the carrying amount to reflect any reassessment or lease modifications, or to reflect adjustments in
lease payments due to an adjustment in an index or rate.
The group presents its lease liabilities as separate line items in the statement of financial position.
Measuring the right-of-use asset
The right-of-use asset is initially measured at cost. The cost of the right-of-use asset comprise:
The amount of the initial measurement of the lease liability
Any lease payments made at or before the commencement date, less any lease incentives
received
Any initial direct costs incurred by the Group
An estimate of costs to be incurred by the Group in dismantling and removing the underlying
asset, restoring the site on which it is located or restoring the underlying asset to the
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condition required by the terms and conditions of the lease, unless those costs are incurred to
produce inventories.
The right-of-use asset is subsequently measured at cost less accumulated depreciation and
impairment losses. Depreciation is calculated using the straight-line method from the commencement
date to the earlier of the lease term and the remaining useful life of the right-of-use asset. The Group
applies IAS 36 Impairment of Assets to determine whether the right-of-use asset is impaired and to
account for any impairment loss identified.
Group presents it's right-of-use assets as separate line items in the consolidated statement of financial
position.
2.9 Intangible assets
Intangible assets that have been acquired separately are carried at cost. Capitalised intangible assets
are recognized at cost less any amortization and impairment losses. Depreciation and amortization
expenses are measured on a straight-line basis over the estimated useful life of the asset,
commencing when the asset is ready for its intended use.
Other intangible assets include renting rights and webpage, depreciated on a straight line basis over
three to five years.
Intangible assets with an indefinite useful life are not depreciated but are tested for impairment at
least annually.
2.10 Goodwill
Goodwill arises on the acquisition of businesses and represents the excess of the consideration
transferred, the amount of any non-controlling interest in the acquiree and the acquisition date fair
value of any previous equity interest in the acquiree over the fair value of the identifiable net assets
acquired. If the total of consideration transferred, non-controlling interest recognised and previously
held interest measured at fair value is less than the fair value of the net assets of the business
acquired, in case of a bargain purchase, the difference is recognised directly in the income statement.
For the purpose of impairment testing, goodwill acquired in a business combination is allocated to
each of the cash generating units (CGUs), or groups of CGUs, that is expected to benefit from the
synergies of the combination. Each unit or group of units to which the goodwill is allocated represents
the lowest level within the entity at which the goodwill is monitored for internal management
purposes.
Goodwill is monitored at the operating segment level. Goodwill impairment reviews are undertaken
annually or more frequently if events or changes in circumstances indicate a potential impairment.
The carrying value of the CGU containing the goodwill is compared to the recoverable amount, which
is the higher of value in use and the fair value less costs of disposal.
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2.11 Financial assets and financial liabilities
Classification
The Group classifies its financial assets in two categories; those to be measured subsequently at fair
value (either through OCI or through profit or loss) and those to be measured at amortized cost.
The classification depends on the entity’s business model for managing the financial assets and the
contractual terms of the cash flows. For assets measured at fair value, gains and losses will either be
recorded in profit or loss or OCI. For investments in equity instruments that are not held for trading,
this will depend on whether the Group has made an irrevocable election at the time of initial
recognition to account for the equity investment at fair value through other comprehensive income
(FVOCI). The Group reclassifies debt investments when and only when its business model for
managing those assets changes.
Recognition and derecognition
Regular way purchases and sales of financial assets are recognised on the trade date, the date on
which the Group commits to purchase or sell the asset. Financial assets are derecognised when the
rights to receive cash flows from the financial assets have expired or have been transferred and the
Group has transferred substantially all the risks and rewards of ownership.
Measurement
At initial recognition, the Group measures a financial asset at its fair value plus, in the case of a
financial asset not at fair value through profit or loss (FVPL), transaction costs that are directly
attributable to the acquisition of the financial asset. Transaction costs of financial assets carried at
FVPL are expensed in profit or loss. Financial assets with embedded derivatives are considered in their
entirety when determining whether their cash flows are solely payment of principal and interest.
Subsequent measurement of debt instruments depends on the Group’s business model for managing
the asset and the cash flow characteristics of the asset. There are three measurement categories into
which the Group classifies its debt instruments:
Amortised cost: Assets that are held for collection of contractual cash flows where those cash flows
represent solely payments of principal and interest are measured at amortised cost. Interest income
from these financial assets is included in finance income using the effective interest rate method. Any
gain or loss arising on derecognition is recognised directly in profit or loss and presented in other gains
(losses) together with foreign exchange gains and losses. Impairment losses are presented as a
separate line item in the consolidated statement of profit or loss.
FVOCI: Assets that are held for collection of contractual cash flows and for selling the financial assets,
where the assets’ cash flows represent solely payments of principal and interest, are measured at
FVOCI. Movements in the carrying amount are taken through OCI, except for the recognition of
impairment gains or losses, interest income and foreign exchange gains and losses, which are
recognised in profit or loss. When the financial asset is derecognised, the cumulative gain or loss
previously recognised in OCI is reclassified from equity to profit or loss and recognised in other gains
(losses). Interest income from these financial assets is included in finance income using the effective
interest rate method. Foreign exchange gains and losses are presented in other gains (losses) and
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impairment expenses are presented as a separate line item in the consolidated statement of profit or
loss.
FVPL: Assets that do not meet the criteria for amortised cost or FVOCI are measured at FVPL. A gain or
loss on a debt investment that is subsequently measured at FVPL is recognised in profit or loss and is
presented net within other gains (losses) in the period in which it arises.
Financial assets represent a contractual right by the Group to receive cash or another financial asset in
the future. Financial assets include financial derivatives, receivables and equity interests. Financial
assets are derecognized when the rights to receive cash from the asset have expired or when the
Group has transferred its rights to receive cash flows and has either transferred substantially all of the
risks and rewards of the asset or has transferred control of the asset.
Cash and cash equivalents
Cash and cash equivalents in the balance sheet includes cash, bank deposits and all other monetary
instruments with a maturity of less than three months from the date of acquisition, and are measured
at nominal value.
Trade receivable
Trade receivable are initially recognized at fair value, subsequently accounted for at amortized cost
and are reviewed for impairment on an ongoing basis. Individual accounts are assessed for
impairment taking into consideration indicators of financial difficulty and management assessment.
Discounting generally does not have a material effect on accounts receivable, however, in special
cases discounting may be applied.
Financial liabilities
Financial liabilities represent a contractual obligation by the Group to deliver cash in the future, and
are classified as either short or long-term. The Group recognises a financial liability when it first
becomes a party to the contractual rights and obligations in the contract.
All financial liabilities are initially recognised at fair value, minus (in the case of a financial liability that
is not at FVPL) transaction costs that are directly attributable to issuing the financial liability. Financial
liabilities are measured at amortised cost, unless the Group opted to measure a liability at FVPL.
A financial liability is derecognised when the obligation under the liability is discharged, cancelled or
expires.
All loans and borrowings are initially recognized initially at fair value less directly attributable
transaction costs. After initial recognition, interest bearing loans and borrowings are subsequently
measured at amortised cost using the effective interest method.
Financial liabilities included in trade and other payables are recognised initially at fair value and
subsequently at amortised cost. The fair value of a non-interest bearing liability is its discounted
repayment amount. If the due date of the liability is less than one year, discounting is omitted.
Impairment of financial assets
The Group assesses at each balance sheet date whether there is objective evidence that a financial
asset or a group of financial assets is impaired, and the assessment is forward-looking based on the
expected credit losses associated with its debt instruments carried at amortised cost and FVOCI. The
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impairment methodology applied depends on whether there has been a significant increase in credit
risk.
The Group’s financial assets are subject to the expected credit loss model.
For trade receivables, the Group measure the loss allowance at an amount equal to the lifetime
expected credit loss.
Debt investment and other instruments are considered to be low credit risk when they have a low risk
of default and the issuer has a strong capacity to meet its contractual cash flow obligations in the near
term.
The impairment charge for debt investments at FVOCI is recognised in profit or loss and reduces the
fair value loss otherwise recognised in OCI.
2.12 Income taxes, current and deferred
The income tax expense or credit for the period is the tax payable on the current period’s taxable
income based on the applicable income tax rate adjusted by changes in deferred tax assets and
liabilities attributable to temporary differences and to unused tax losses.
The current income tax charge is calculated on the basis of the tax laws enacted or substantively
enacted at the end of the reporting period in the countries where the company’s subsidiaries and
associates operate and generate 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 provided in full, using the liability method, on temporary differences arising
between the tax bases of assets and liabilities and their carrying amounts in the consolidated financial
statements. According to the exception in IAS 12, deferred income tax is not accounted for if it arises
from initial recognition of an asset or liability in a transaction other than a business combination that
at the time of the transaction affects neither accounting nor taxable profit or loss. Deferred income
tax is determined using tax rates (and laws) that have been enacted or substantially enacted by the
end of the reporting period and are expected to apply when the related deferred income tax asset is
realised or the deferred income tax liability is settled.
Deferred tax assets are recognized only if it is probable that future taxable amounts will be available to
utilise those temporary differences and losses.
Deferred tax assets and liabilities are offset when there is a legally enforceable right to offset current
tax assets and liabilities and when the deferred tax balances relate to the same taxation authority.
Current tax assets and tax liabilities are offset where the entity has a legally enforceable right to offset
and intends either to settle on a net basis, or to realise the asset and settle the liability simultaneously.
Current and deferred tax is recognised in profit or loss, except to the extent that it relates to items
recognised in other comprehensive income or directly in equity. In this case, the tax is also recognised
in other comprehensive income or directly in equity, respectively.
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2.13 Employee benefits and post-employment benefits
Payments to employees, such as wages, salaries, social security contributions, paid annual leave, as
well as bonus agreements are accrued in the period in which the associated services are rendered by
the employee.
Contributions to the Groups defined contribution plan is recognized in the income statement in the
period in which they accrue.
2.14 Provisions
Provisions for legal claims are recognised when:
the Group has a present legal or constructive obligation as a result of past events;
it is probable that an outflow of resources will be required to settle the obligation; and
the amount can be reliably estimated.
Provisions are measured at the present value of the expenditures expected to be required to settle
the obligation using a pre-tax rate that reflects current market assessments of the time value of
money and the risks specific to the obligation. The increase in the provision due to passage of time is
recognised as finance cost. Where the Group, as lessee, is contractually required to restore a leased
property to an agreed condition prior to release by a lessor, provision is made for such costs as they
are identified.
2.15 Share capital and dividends
Shares are classified as equity when there is no obligation to transfer cash or other assets. Incremental
costs directly attributable to the issue of new shares are shown in equity as a deduction, net of tax,
from the proceeds.
The amount of dividends recognised as distributions to owners during the period and the related
amount per share are presented either in the consolidated statement of changes in equity or in the
notes. Dividends will not be displayed in the consolidated statement of comprehensive income or
income statement.
2.16 Borrowing costs
General and specific borrowing costs directly attributable to the acquisition, construction or
production of qualifying assets, which are assets that necessarily take a substantial period of time to
get ready for their intended use or sale, are added to the cost of those assets, until such time as the
assets are substantially ready for their intended use or sale.
Investment income earned on the temporary investment of specific borrowings pending their
expenditure on qualifying assets is deducted from the borrowing costs eligible for capitalisation. All
other borrowing costs are recognised in profit or loss in the period in which they are incurred.
Frigaard Property Group capitalises borrowing costs on qualifying inventories.
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2.17 Revenue recognition
Frigaard Property Groups main activities are to deliver on construction projects and development and
sale of properties. The group also has some minor revenue from rental income and sale of services.
Construction
The largest operating segment in the Group relates construction projects. These are engineering and
construction projects delivered to public and private customers based on contractual agreed scope
and price. These arrangements are characterized by the fact that the customers finance the projects.
Revenue from engineering and construction projects is recognized over the lifetime for the project as
these customer contracts qualify as performance obligations satisfied over time. According to IFRS 15,
the revenue from contracting projects is to be recognized over time (percentage-of-completion) in
connection with a gradual transition of control. Application of the percentage-of-completion method
entails income recognition in pace with the degree of completion of the project, based on the
estimated final profit. To determine the amount of income worked up at a specific point in time, the
following components are required:
Project revenue – Revenues related to the customer contract. The revenues must be of such a
character that the recipient can credit them to income in the form of actual payment received
or another form of payment.
Project cost – Costs attributable to the construction assignment, which correspond to project
revenues.
Completion rate (worked-up rate): recognized costs in relation to estimated total assignment
costs, which reflects how the control is transferred to the purchaser.
As a consequence of income recognition based on the percentage-of-completion method, the trend of
earnings of ongoing projects is reflected immediately in the financial statements. Percentage-of-
completion income recognition is subject to a component of uncertainty. Due to unforeseen events,
the final profit of the projects may occasionally be higher or lower than expected. It is particularly
difficult to anticipate profit at the beginning of the project period and for technically complex projects
or projects that extend over a long period.
Provisions for potential losses are recognized against income for the relevant year, and provisions for
losses are recognized as soon as they become known. Contract modifications covering alterations and
supplementary works, compensation for shortcomings in tender specifications and similar items are
recognized when the modifications are enforceable; meaning when there is a legal right to payment
for them.
Property development
The Group develops land and property for the purpose of selling residential properties (turnkey
homes). Properties are usually sold to private customers, but there are also some professional
customers.
Revenue is recognised when control over the property has been transferred to the customer. Control
is considered transferred at the time of delivery of the property to the customer.
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Norwegian regulations allow the customer to withdraw from the contract until the property is
transferred to them. If so, the customer will be responsible to cover any losses incurred by the group
relating to the withdrawal.
The revenue is measured at the transaction price agreed under the contract. In most cases, the
consideration is due when legal title has been transferred. In terms of accounting, sold units under
construction are part of Frigaard Property Group's inventory.
Rental income and revenue from sale of services
Rental income from investment properties is recognized on a straight-line basis over the lease term.
When the Group provides incentives to its tenants, the cost of the incentives is recognised over the
lease term, on a straight-line basis, as a reduction of rental income. The group recognises revenue
from sale of services when the service is performed.
2.18 Interest income and expense
Interest income and expense are recognised within finance income and finance costs in profit or loss
using the effective interest rate method, except for borrowing costs relating to qualifying assets,
which are capitalised as part of the cost of that asset. The Group has chosen to capitalise borrowing
costs on all qualifying assets irrespective of whether they are measured at fair value or not.
2.19 New standards and interpretations not yet adopted
New and amended IFRS Standards adopted by the Group
The following are new or amended to standards and interpretations have been issued and become
effective during the current period:
Amendments to IFRS 9 Financial Instruments, IFRS 7 Financial Instruments: Disclosures, IFRS 16 Leases
- Interest Rate Benchmark Reform Phase 2: Disclosures.
IFRS 16 Leases, relating to the Interest Rate Benchmark Reform Phase 2 entered into force on 1
January 2021. The amendments to IFRS 9 entail that modifications of financial assets and financial
liabilities, implemented as a direct consequence of the Interest Rate Benchmark Reform, are
recognised as a change in the effective interest. Gains or losses arising due to the modification are
thus not recognised.
The amendments listed above did not have any impacts on the amounts recognized in prior periods
and are not expected to significantly affect the current or future periods.
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Other standards and interpretations not yet adopted
The International Accounting Standards Board (IASB) has published a number of interpretations and
changes to existing standards and interpretations which had not yet entered into force at the time the
accounts were closed on 31 December 2021. The group has chosen not to early adopt any new or
amended standards in preparing the consolidated financial statements for 2021. Frigaard Property
Group has concluded that these interpretations and changes are unlikely to have a material effect on
the group’s financial position, profit/loss or note information going forward.
2.20 Financial risk management
2.20.1. Financial risk factors
Through its business operations in the market for property development and construction projects,
the Group is, aside from business risk, exposed to various financial risks.
These financial risks are defined as market risk (including interest rate risk and other price risk), credit
risk and liquidity risk. The primary objectives of the financial risk management function are to establish
risk limits, and then ensure that exposure to risks stays within these limits.
Risk management is carried out by Group management.
Market risk
Market risk can be defined as the risk that the group's income and expenses, future cash flows or fair
value of financial instruments will vary as a result of changes in market prices. The market price
includes three types of risks: exchange risks, interest risks and price risks.
Foreign exchange risk
The Group operates primarily in the Norwegian market and is therefore subject to limited foreign
exchange risk. No hedge accounting in accordance with IFRS 9 is applied.
Price risk
Frigaard Property Group has no significant exposure to price risk as it does not hold any equity
securities or commodities. The Group is not exposed to price risk other than in respect of financial
instruments, such as property price risk including property rentals risk.
The demand for residential and commercial properties is subject to a large number of risk factors,
including economic downturns, interest levels, urbanization trends and demographic changes. Shifts in
demand is closely monitored, and reflected in commercial plans and budgets. No residential building
projects will not as a general principle be approved by the board of directors before a minimum of 50
% of the value of a property project has been sold.
See paragraph 6 for further information regarding Critical accounting estimates and assumptions.
Government regulations and zoning restriction risks
Changes in property regulations, legislation and zoning restrictions from the relevant public
authorities can affect both the progress and implementation of the various property development
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projects of Frigaard Property Group, and can thus potentially limit the opportunities for further
development of properties. This can in turn lead to delays and cost increases.
Interest rate risk
The group's interest rate risk is mainly related to bonds and bank loans where the interest rate is not
fixed. See note 18 Interest-bearing liabilities for an overview of such loans and bonds. An increase in
floating rates would lead to an increase in interest costs and reduce net income and cash flow. No
interest rate swap agreements has been entered into.
Customer credit risk - risk in trade accounts receivable
Credit risk refers to the risk that a counter-party will default on its contractual obligations resulting in
financial loss to the group. Customer credit risk is managed through Frigaard Property Group’s
common procedures for identifying and managing risk, including tender approval procedure and
ongoing operational risk assessments of varying sizes and types with the different customer categories
in the markets of operation.
Frigaard Property Group’s credit risk refers to the risk to the group's trade receivables and investment
in liquid assets. As for the business of housing development a large part is based on customer
prepayments before the handover of the property, the group's credit risk is considered reasonably
low. For building and engineering contracts, the customer is normally subject to arrangements
ensuring bank guarantees and prepayments throughout the project.
The Group’s operations related to construction projects extends customer credit related to account
receivables and recognized work-in-project receivables. Historic customer credit losses have been
limited, and projects are invoiced in advance as much as possible. In other operations, the extension
of credit is limited to customary invoicing periods.
The customer credit risk related to commercial customers are therefore considered medium. In the
case where construction projects customers are public sector clients, state or municipal owned
enterprises, the customer credit risk is considered to be low.
Liquidity and refinancing risk
Liquidity and refinancing risk are defined as the risk of Frigaard Property Group not being able to meet
its payment obligations due to lack of liquidity or due to difficulties in obtaining or rolling over external
loans and bonds. Constraints regarding financing opportunities will negatively affect cash flows from
planned projects. The Group uses liquidity forecasting as a means of managing the fluctuations in
short-term liquidity. Surplus liquidity is, if possible, is primarily used to repay the principal on loan
liabilities and redemption right regarding issued bonds.
Funding
The Group’s principal financial liabilities, besides derivative financial liabilities, comprise of various
bonds, bank loans, trade and other payables. The main purpose of these financial liabilities is to
finance the Group’s operations. Frigaard Property Group has borrowing arrangement through both
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committed bank credit facilities and market funding programs. In addition to building- and
development loans in various banks, Frigaard Property Group has at year end a bond loan of NOK 300
million which is maturing in February 2024. The previous bond, maturing in June 2021 was redeemed
in February 2021 at a price equal to 101 percent of the outstanding bond amount.
The bond loan is defined as a senior secured bond with a security pledged in the shares in the directly
owned subsidiaries. The bond loan limit is NOK 500 million, where Frigaard Property Group as of the
balance sheet date has drawn up NOK 300 million. There are no covenants related to the bond loan,
but further borrowing can only be made if net debt / EBITDA <3.0 and ICR> 3.0. The bond is listed on
the Oslo Stock Exchange.
These arrangements provide good preparedness for temporary fluctuations in the Group’s short-term
liquidity requirements and ensure long-term funding for property development projects.
All decisions relating to external long term financing in the Group's subsidiaries are made by the
management of the parent company, i.e no subsidiary has a mandate to take out loans themselves or
establish overdraft facilities. The Group companies can issue ordinary project guarantees to its
customers.
Frigaard Property Group has no official credit rating.
Capital management
The Group's main goal is to maximize shareholder value while ensuring the Group's ability to continue
operations. The group has an overall target to maintain a capital structure that gives the group an
optimal capital binding given the current market situation. The group makes the necessary changes to
their capital structure based on an ongoing assessment of the business' financial situation and future
prospects in the short and medium term.
2.21 Critical accounting estimates and judgements
The preparation of financial statements requires the use of accounting estimates which, by definition,
will seldom equal the actual results. Management also needs to exercise judgement in applying the
Group’s accounting policies.
Estimates and judgements are continually evaluated, and are based on historical experience and other
factors, including expectations of future events that may have a financial impact on the entity and that
are believed to be reasonable under the circumstances.
Management makes estimates and assumptions concerning the future. The resulting accounting
estimates will, by definition, seldom equal the related actual results. The estimates, assumptions and
management judgments that have a significant risk of causing a material adjustment to the carrying
amounts of assets and liabilities within the next financial year are outlined below.
Property projects under construction
The Group commenced construction of several investment properties and commercial building
projects during the year, where the customer contracts qualify for revenue recognition over time
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based on the percentage-of-completion method. A consequence of income recognition based on the
percentage-of-completion method, the trend of earnings of ongoing projects is reflected immediately
in the financial statements. Percentage-of-completion income recognition is subject to a component
of uncertainty. Due to unforeseen events, the final profit of the projects may occasionally be higher or
lower than expected. It is particularly difficult to anticipate profit at the beginning of the project
period and for technically complex projects or projects that extend over a long period.
Goodwill
Goodwill on acquisitions of subsidiaries is not amortized but is tested for impairment annually, or
more frequently if events or changes in circumstances indicate that it might be impaired, and is
carried at cost less accumulated impairment losses. Gains and losses on the disposal of an entity
include the carrying amount of goodwill relating to the entity sold.
The two operating segments are considered to be different cash generating units (CGU) against which
goodwill is tested. The recoverable amount from the CGU is calculated by taking the historical cash
flows for the CGU, taken into account expectations for moderate growth in the market segments.
Calculation of the fair value less costs of disposal is classified as Level 3 in the fair value hierarchy.
Non- GAAP measures
The group reports its financial results in accordance with accounting principles IFRS as issued by the
IASB and as endorsed by the EU. However, management believes that certain non-GAAP financial
measures provide management and other users with additional meaningful financial information that
should be considered when assessing the group’s ongoing performance. Management, the board of
directors and the long term lenders regularly uses supplemental non-GAAP financial measures to
understand, manage and evaluate the business and its operations. These non-GAAP measures are
among the factors used in planning for and forecasting future periods.
Non-GAAP financial measures reflect adjustments based on the following items:
EBITDA
EBITDA is a measure of earnings before deducting interest expense, taxes, and depreciation charges.
Please see reconciliation to profit or loss before tax in the income statement.
EBIT
EBIT is a measure of earnings before interest and taxes is an indicator of a company's profitability.
Please see reconciliation to profit or loss before tax in the income statement.
Order backlog
Order backlog is contracted and signed orders, not yet delivered to customers. It gives an indication of
future activity in the group. Order backlog is calculated by adding the orders of the current financial
year to the balance of the order backlog at the end of the last financial year and subtracting revenue
in the current financial year.
Page 33 of 77
NOTE 3. SEGMENT INFORMATION
Operating segments are reported in a manner consistent with the internal reporting provided to the
chief operating decision maker.
Frigaard Property Group AS has defined its two segments as:
Property development
Construction
Segment assets and liabilities are not reported to the chief operating decision maker on a regular
basis.
The group "other" consists of sale of services, rental income and other operating expenses for the
holding company Frigaard Property Group AS .
Intersegment eliminations are intra-group sales, where Property development is the contracting
customer and Construction is the builder. Revenue from Property development from project for own
account is recognised upon handover as regulated in IFRS 15, see note 2 and 17.
All amounts in NOK thousand
2021 2020
Income statement
Property development 242 867 157 581
Construction 1 499 615 1 176 519
Other 849 838
Intersegment Eliminations 160 060- 68 261-
Total operating revenue 1 583 271 1 266 677
Property development 5 799- 39 507
Construction 41 147 73 336
Other 14 103- 20 741-
EBITDA 21 245 92 102
Property development 6 132- 39 174
Construction 34 518 67 174
Other 15 163- 21 753-
EBIT 13 223 84 595
Page 34 of 77
NOTE 4. OPERATING AND OTHER INCOME
Contract revenue from Construction is recognized over the lifetime for the project, as these customer
contracts qualify as performance obligations satisfied over time. Revenue from sale of development
property is recognised when control over the property has been transferred to the customer.
For property development, the group has entered into contracts with customers totaling MNOK 303.7
expected to be delivered and recognized as revenue during the next 12 months. Some of the contracts
in the construction segment have a duration of less than 12 months and are not disclosed. As of
31.12.2021 transaction price allocated to partly or fully unsatisfied performance obligations on
contracts with an original duration of more than 12 months was MNOK 1 180.8.
The Group as a lessor
Operating leases
The Group leases out its owned properties to third parties with contracted non-cancellable lease
terms between 1 and 10 years. The Group has classified all these leases as operating because they do
not transfer substantially all the risks and rewards incidental to ownership of the properties of the
counterparties. For the Group's property leases the rental income is largely fixed under the contracts,
however, subject to an annual price adjustment based on inflation.
Frigaard Property Group's income from lease of properties:
All amounts in NOK thousand
Segment 2021 2020
Revenue from contracts with customers
Contract revenues from Construction Construction 1 339 452 1 108 025
Sale of development property Development property 242 017 108 316
Rental income from Property development
Development property
850 2 709
Rental income from Other Other - 28
Total revenue from contracts with customers 1 582 319 1 219 078
Other operating income
Gain from sale of fixed assets Construction 103 233
Other income from Other Other 849 810
Sale of shares Property development Development property - 46 556
Total other operating income 952 47 599
Totalt operating revenue 1 583 271 1 266 677
All amounts in NOK thousand
2021 2020
Rental income this year 850 2.709
Rental income next year 525 740
Total rental income next 2-5 years 600 900
Page 35 of 77
NOTE 5. PERSONNEL EXPENSES
Management remuneration
There are 3 employees in the parent company. The Group Management consist of the Board of
Directors, in addition to the General Managers in the largest subsidiaries. There has been no Board
remuneration in 2021.
No loans or guarantees have been given to any members of the Group Management, the Board of
directors or other related parties.
Pension cost and pension obligations
In Norway, the Group is required by law (Act relating to mandatory service pensions) to have a
pension plan. The programs in the Norwegian companies meet the requirements of the law.
Defined contribution pensions
The pension contribution is 3-9 percent of the pensionable salary. Pensionable pay refers to the basic
salary plus average variable pay for the last three years. The retirement age for the CEO is 70 years.
For other senior executives, the retirement age ranges from 65 to 67 years.
1
On the 17 of February 2021 the CEO in Frigaard Property Group AS bought 5 128 of the shares in
Frigaard Property Group AS through his wholly owned company Elo AS, from Opulentia Invest AS.
1
Control shares through privately owned company. See note 14 for details on shareholders
All amounts in NOK thousand
2021 2020
Salaries and holiday pay 113 649 111 311
Social security 16 273 15 038
Pension costs defined contribution plans 3 636 3 440
Other personnel costs
Total salaries and personnel expense 133 558 129 789
A total of TNOK 2 197 of salary cost related to project management have been booked toward development properties in 2021.
2021 2020
Norway 133 558 129 789
Total 133 558
129 789
The number of employees in Frigaard Property Group at 31 of December 2021 was 116 persons (2020: 128 persons).
Board
remuneration
Salaries Bonuses
Pension
cost
Value of
options
granted
Total
remuneration
Number of
shares
31.12.2021
Management
Simon Nyquist Martinsen , CEO 2 757 490 48 3 295 5 128
Gry-Heidi B. Montelius, CFO 1 413 75 48 1 536
Members of the Board
Helge Stemshaug, Chairman - - -
Kristian Lindland, member of the board - - 18 348
1)
Trond Frigaard, member of the board - - 197 826
1)
Total remuneration - 4 170 565 96 - 4 831 221 302
Page 36 of 77
Remuneration of CEO in Frigaard Property Group AS has been carried out in accordance with
guidelines approved by the Chairman of the board. To ensure competitive conditions as well as focus
on achieving results, the CEO and leading employees participate in a bonus program with a maximum
bonus between 40-60% of the individual annual fixed salary. Bonus is dependent upon achieved
financial and operational results. "Leading employees" means the CEO and the CFO of the group
Frigaard Property Group AS.
The decision on whether the performance criteria for variable remuneration are met is made by the
company when the current measurement period for the performance criteria is due. Variable
remuneration shall be considered and are documented annually.
The board's opinion is that bonuses to senior executives and others as described above have a
motivating effect and is therefore an appropriate contribution to the achievement of the Company's
business strategy, long-term interest, and sustainable business.
The CEO has an agreement which gives him the right to a compensation after termination of
employment before retirement that equals 100% of the salary the first nine months.
NOTE 6. OTHER OPERATING EXPENSES
All amounts in NOK thousand
2021 2020
Energy costs 959 541
Advertising 304 593
Repair and maintenance costs 715 446
Short term and low value leasing 1 685 1 755
Travel costs 1 626 3 266
Consultancy fees and external personnel 6 303 6 280
Insurance 2 824 1 915
Management fee 4 380 4 020
Other operating costs 9 127 5 643
Total operating expenses 27 923 24 459
Specification auditor's fee 2021 2020
Audit fees 1 490 1 837
Other non-audit services 52 443
Tax advisory services 12 123
Total 1 554 2 402
Page 37 of 77
NOTE 7. INTANGIBLE ASSETS
Goodwill
Each goodwill item is allocated to a cash-generating unit (CGU). A cash-generating unit is the lowest
level at which independent cash flows can be measured. When an acquired business continues to be
operated as an independent unit, this business is designated the cash-generating unit. Units with
significant synergy effects and which carry out similar activities, are together considered as a single
cash-generating unit. This is the case when acquired operations are integrated with an existing
Frigaard Property Group company. In these cases, the combined business is the cash-generating unit
for which goodwill is measured and followed-up.
Management monitors the goodwill at the operating segment level. The recoverable amount from the
CGU is calculated by taking the historical cash flows for the CGU, taking into accounts expectations for
moderate growth in the market segments. Calculation of the fair value less costs of disposal is
classified as Level 3 in the fair value hierarchy.
Goodwill is not amortised but is tested for impairment in the fourth quarter each year. The
recoverable amount for the cash-generating units was determined by calculating the value in use by
discounting future cash flows. The calculations were based on the company's budget approved by the
Group management for 2022, and prognosticated cash flows covering a five years period. The growth
presented in the budget is based on the management's expectation to the development and
performance in the market segments, which Frigaard Property Group is active. Based on available
information and knowledge about the market, management is expecting some increase in the growth
for the next years. Management's expectation is based on the historical development in trends and
public sector analysis. Assumed annual growth used in the cash flows for the years in the impairment
test is based on a nominal figure of 2% growth, which is in line with the expected growth in the
Norwegian economy.
Expected future cash flows according to these assessments form the basis for the estimates. Changes
in working capital and investments needs were also taken into account. The present value of the
All amounts in NOK thousand
2021 2020
Acquisition cost 284 019 284 019
Accumulated cost 1 of Januar 284 019 284 019
Carrying amount at 1 January 284 019 284 019
Additions - -
Carrying value 31 of December 284 019 284 019
Per 31 december
Acquisition cost 284 019 284 019
Accumulated cost 31 of December 284 019 284 019
Goodwill specified per business combination:
Goodwill arising from the acquisition of Metacon AS at 1 December 2015 7 635
Goodwill arising from the acquisition of Alento AS at 30 June 2018 276 385
284 019
Page 38 of 77
forecast cash flow was calculated using a discount rate of 12.2 percent after tax. This is based on a risk
free interest rate of 1.5 %, plus a risk premium of 7.4 %. The risk premium is based on observations of
similar companies listed at Oslo Stock Exchange.
Impairment testing was conducted in conjunction with the annual accounts on 31 December 2021 and
was addressed by the company's Board. No impairment requirement was indicated.
A change in the discount rate to 27 percent after tax would not result in any impairment requirement
of the Group's recognized goodwill. Even without any growth in our cash flows, no requirements for
impairment have been identified. The calculation assumes a terminal value after five years based on
the Gordon growth model. The discount rate is based on the weighted average cost of capital (WACC)
method. The discount rate is reflecting the current market rate of return in the industry where the
cash generating unit is being compared. The cost of equity has been calculated with the basis in the
capital asset pricing model (CAPM).
Other intangible assets
Other intangible assets include renting rights and a webpage.
All amounts in NOK thousand
2021 2020
Carrying amount at 1 January 333 666
Additions 127 -
Amortisation -333 -333
Carrying value 31 of December 127 333
Per 31 december
Acquisition cost 1 126 1 000
Accumulated amortisation -999 -667
Accumulated cost 31 of December 127 333
Lower of remaining lease term or economic life 3-5 years 3 years
Depreciation method Linear Linear
Page 39 of 77
NOTE 8. PROPERTY, PLANT AND EQUIPMENT
All amounts in NOK thousand
Buildings
and land
Machinery and
equipment
Total
Carrying amount 01.01 4 827 3 888
8 715
Additions 57 1 466
1 523
Disposals - -286
-286
Depreciations -542 -1 297
-1 839
Accumulated depreciation on disposals for the year - 286
286
Carrying value 31 of December 2020 4 342 4 057 8 399
Per 31. December 2020
Acquisition cost 6 492 14 397
20 889
Accumulated depreciation and write downs -2 150 -10 340
-12 490
Carrying value 4 342 4 057
8 399
Carrying amount 01.01 6 492 14 397
8 399
Additions - 1 897
1 897
Disposals - -552
-552
Depreciations -544 -1 515
-2 059
Accumulated depreciation on disposals for the year - 552
552
Carrying value 31 of December 2021 5 948 14 779 8 237
Per 31. December 2021
Acquisition cost 6 492 15 742
22 234
Accumulated depreciation and write downs -2 694 -11 303
-13 997
Carrying value 3 798 4 439
8 237
Lower of remaining lease term or economic life 20 years 3-7 years
Depreciation method Linear Linear
Page 40 of 77
NOTE 9. LEASES, RIGHT OF USE ASSETS AND LEASE LIABILITIES
Frigaard Property Group uses leases mainly in cases where leases provide operational benefits or
flexibility compared with owning the assets. Rent of buildings is used for offices, and for temporary
needs. The Group also leases cars, printers and forklifts.
The Group does not have significant residual value guarantees related to its leases to disclose.
Right of use assets
Page 41 of 77
Practical expedients applied
The Group also leases IT equipment and machinery with contract terms of 1 to 3 years. The Group has
elected to apply the practical expedient of low value assets and does not recognise lease liabilities or
right-of-use assets. The leases are instead expensed when they incur. The Group has also applied the
practical expedient to not recognise lease liabilities and right-of-use assets for short-term leases:
The Group as a lessee – operating leases
The group has entered into different operating leases for machinery, offices and other facilities. These
are agreements related to low value assets, or short-term assets.
The lease costs to these assets were as follows:
Extension options
The Group lease of buildings have lease terms that vary from 2 years to 10 years, and several
agreements involve a right of renewal which may be exercised during the last period of the lease
terms. The Group assesses at the commencement whether it is reasonably certain to exercise the
renewal right.
Purchase options
The Group leases machinery and equipment and vehicles with lease terms of 3 to 5 years. Some of
these contracts include a right to purchase the assets at the end of the contract term. The Group
assesses at the commencement whether it is reasonably certain to exercise the renewal option, and
this assessment is updated when there are circumstances indicating renewed operational plans
pertaining to the leased assets.
Page 42 of 77
Lease Liabilities
Summary of the lease liabilities in the financial statements
Total
At 01.01.2020 18 534
New lease liabilities recognised in the year 3 119
Cash payments for the principal portion of the lease liability -5 319
Cash payments for the interest portion of the lease liability -678
Interest expense on lease liabilities 678
Reassessment of the discount rate on previous lease liabilities -
Currency exchange differences -
Total lease liabilities at 31 December 2020 16 334
Current lease liabilities 5 974
Non-current lease liabilities 10 360
Total cash outflows for leases -5 319
Summary of the lease liabilities in the financial statements
Total
At 01.01.2021 16 334
New lease liabilities recognised in the year 1 510
Cash payments for the principal portion of the lease liability -5 644
Cash payments for the interest portion of the lease liability -556
Interest expense on lease liabilities 556
Reassessment of the discount rate on previous lease liabilities -
Currency exchange differences -
Total lease liabilities at 31 December 2021 12 200
Current lease liabilities 5 215
Non-current lease liabilities 6 985
Total cash outflows for leases -5 644
Undiscounted lease liabilities and maturity of cash outflows
Total
Less than 1 year 5 215
1-2 years 4 528
2-5 years 2 457
More than 5 years -
Total undiscounted lease liabilities at 31 December 2021 12 200
Profit and loss and Other
Financial position
Financial position
Cash flows
Cash flows
Cash flows
Profit and loss
Profit and loss
Profit and loss
Profit and loss and Other
Profit and loss
Financial position
Financial position
Cash flows
Statement of:
Cash flows
Cash flows
Statement of:
Page 43 of 77
NOTE 10. ACQUISITIONS AND DIVESTMENTS
On the 30 of April 2020, Frigaard Bolig AS sold its shares in subsidiaries Höganloft Fastigheter AB,
which is located in Tranås in Sweden. The consideration to be received for the shares is MSEK 58.3. A
warranty commission of MNOK 9.4 to Frigaard AS was signed during Q2 2020. Total gain from the sale
of shares after deduction of the warranty commission is MSEK 46.1 (MNOK 46.6), which was reflected
in the Other operating revenue line in the income statement for 2020. At year end net cashflow from
the transaction amounts to MSEK 25, while the net present value related to the main settlement is
booked as a receivable in the balance sheet.
Through the sale of shares in Höganloft Fastigheter AB, we have sold a 21 400 sqm building combined
for office and warehouse on a forward contract, in Tranås, Sweden. The building was delivered on the
first of March 2022. As a part of the agreement Frigaard Bolig AS had to finance the part of the
building cost that wasn’t covered by the construction loan. At year end Frigaard Bolig AS have an
interest-bearing receivable of total of MNOK 27.5 (MNOK 9.3), towards Höganloft Fastigheter AB. The
receivable is due together with the settlement in 2022.
Höganloft Fastigheter has further signed a lease agreement with Sono Sweop AB. Sono Sweop AB
started the lease of the building on the first of March 2022.
Frigaard Bolig AS sold the shares with immediate effect from first cash consideration of MSEK 25 was
available for Frigaard Bolig AS on the 30 of April 2020. The cash consideration of MSEK 25 is deducted
in the main settlement. The main settlement is expected to take place no later than 10 weeks after the
start of the lease of the building by Sono Sweop AB.
NOTE 11. DEVELOPMENT PROPERTIES
Interest costs related to projects under construction, is capitalized on an ongoing basis and is included
in the acquisition cost from the time of construction start up to settlement for the residential units. In
2021 MNOK 9.5 have been capitalized, MNOK 6.4 in 2020.
MNOK 46 booked as other non-current liabilities, is related to the purchase price of the two
acquisitions in 2019. The liabilities are a credit is given by the sellers of the net assets. The remaining
amount of MSEK 36.1 will be paid within 31.12.2023, given that some specific milestones are met.
During 2021 the following sites have been purchased:
2021
2020
Sites under development
Projects under construction 308 422
322 299
Unsold completed residential units 25 462
4 577
Total development properties 333 884
326 876
Non residential projects 875
818
As at 31 December 334 759
327 694
Units under construction 31 69
Unsold, or sold but not handed over at year end, completed units 6 1
Page 44 of 77
The acquisitions are regarded as acquisitions of net assets, and not business acquisitions. The total
purchase price is MNOK 23.5. Number of units in the table above refers to the expected number of
apartments to be built. Usage of Høgli Eiendom is under consideration. MNOK 3.8 booked as current
liabilities, is related to the purchase price of Høgli Eiendom.
NOTE 12. TRADE RECEIVABLES AND CONTRACT BALANCES
Trade receivables are non-interest bearing and are measured at amortized cost, see note 18 for
details.
Maturity structure of invoiced trade receivables at 31 of December:
The group's trade receivables are subject to the credit loss model, see note 2.11 for details.
Contract balances
Contract asset
Whereas trade receivable are invoiced receivables, contract assets represent a conditional right to
receive payment. Contract assets are recognised for performance obligations satisfied over time
mainly from engineering and construction projects where progress of work done is measured over the
lifetime of the project. When the consideration becomes unconditional the contracts assets are
reclassified to accounts receivables. This normally occurs when an invoice is issued.
All amounts in NOK thousand
31.12.2021 31.12.2020
Trade receivables
Receivables related to revenue from contracts with customers - external 113 538 117 784
Provision for bad debts
-742
Total trade receivables 113 538 117 042
Provision for bad debts at 1 of January -742 -1 233
+ new bad debts provisions - -742
- reversed bad debts provisions -742 -1 233
Bad debt provision at 31 of December - -742
31.12.2021 31.12.2020
Receivables not due for payment 50 791 89 843
Less that 30 days since due date 54 272 18 658
30-60 days since due date 223 -
60-180 days since due date 3 771 1 074
More than 180 days since due date 4 481 7 467
Total 113 538 117 042
Page 45 of 77
Contract liabilities
For construction projects fixed payment plans are generally used, and if the payment exceeds the
work that has been done, the difference is classified as a contract liability in the statement of financial
position.
In the property development operations, advance payments are received for sold units that are
classified as contract liabilities. On the balance sheet day, all projects are reviewed, and for each
project either a net asset or a net liability to the customer is entered. The advanced payment amounts
to 10 % of the sale price of the apartment. At year end there was sold and received advance payment
for 0 units (45), MNOK 0 (MNOK 15.5). The advanced payment is secured by a warranty, according to
Bustadsoppføringslova §47.
NOTE 13. CASH AND CASH EQUIVALENTS
The Group had unused credit facilities of MNOK 10 as of 31 December 2021 (2020: MNOK 10). There
are no restrictions on the use of the credit facility.
Property plant and equipment, receivables and inventory in Frigaard Property Group AS and
subsidiaries Metacon AS, Alento AS and Frigaard Bolig AS are also used as collateral for the inhouse-
cash facility as of 31.12.2021.
31.12.2021 31.12.2020
Contract assets
As of 1 January 66 007 54 071
Work done, but not invoiced 63 781 66 007
Reclassifications to accounts recievables -66 007 -54 071
Total contract assets 63 781 66 007
31.12.2021 31.12.2020
Contract liabilities
As of 1 January
64 202 15 514
Advances received
117 326 64 202
Recognised as income during the year
-64 202 -15 514
Total contract liabilities 117 326 64 202
All amounts in NOK thousand
31.12.2021 31.12.2020
Cash and bank deposits 195 654 246 905
Restricted funds 13 514 11 851
Total cash and cash equivalents 209 168 258 756
31.12.2021 31.12.2020
Cash at banks and on hand 209 168 258 756
Overdraft facility 10 000 10 000
Page 46 of 77
NOTE 14. NUMBER OF SHARES, SHAREHOLDERS ETC.
The shareholders at 31.12.21 are:
All issued shares have equal voting rights and the right to receive dividends.
Olav Frigaard.
FPG Invest AS 197 826 84.76%
Heti Holding AS 18 348 Kristian Lindland, CEO Alento AS 7.86%
Metacon Holding AS 8 260 3.54%
Elo AS 5 128 Simon Martinsen, CEO Frigaard Property Group AS 2.20%
Longfarm AS 3 077 1.32%
OVRE INVEST AS 769 Tony Øvrevik, CEO Metacon AS 0.33%
Number of shares:
Ownership interest:
Total
233 408
100.00%
Owned by
Trond Frigaard
Page 47 of 77
NOTE 15. INCOME TAX EXPENSE AND DEFERRED TAX
Deferred tax and deferred tax assets:
All amounts in NOK thousand
Income tax expense: 2021 2020
Current tax:
Tax payable -
-
Deferred tax
Total change in deferred tax -158 6 316
Total deferred tax -158 6 316
Acquisition of Alento / other -40
31
Tax expense -197 6 346
2021 2020
Income taxes calculated at 22% -1 173 14 217
Changes in unrecognised deferred tax asset -222
-
Non deductible expenses 1 431 897
Non-taxable income -
-10 276
Other -233 1 508
Tax expense -197 6 346
Deferred tax assets 2021 2020
Property, plant and equipment -71 66
Investment property -
-
Right-of-use-assets 373 336
Non-completed construction contracts 122 869 144 429
Current items -6 010 -8 279
Tax losses carried forward -15 635 -34 310
Deferred tax liabilities - gross 101 526 102 242
Net recognised deferred tax liabilities (asset if negativ amount) 22 336 22 493
Page 48 of 77
NOTE 16. NON CURRENT LIABILITIES
In February 2021 FPG AS refinanced bonds at face value MNOK 300. Transactions cost related to the
bonds amounted to MNOK 5.4 and are included in amortized cost calculations. The existing bonds
mature in February 2024. Fair value of the bonds as of 31.12.21 are estimated to be MNOK 295.5. This
valuation is based on bond prices made public by “Verdipapirforetakenes forbund”. Their valuation
reflects price information from leading investment companies and will be defined as level 2 based on
the IFRS 13 valuation hierarchy.
The table above include repayment of interest.
Construction loans mature as projects are completed and delivered. The interest on the construction
loans and loans from credit institutions have floating interest rates. The current range is from 2.9% on
the construction loans, to a rate of 7% on the issued bonds.
Secured debts
Shares in Frigaard Property Group and subsidiaries Metacon AS, Alento AS and Frigaard Bolig AS are
also used as collateral per 31.12.2021.
All amounts in NOK thousand
2021 2020
Bonds 296 256 -
Construction loans (development projects) 4 889 62 857
Loans from credit institutions 38 944 25 059
340 089 87 916
Repayment profile of loans from credit institutions Bonds
Construction
loans
Loans from
credit
institutions
Total
contractual
cashflow
Less than 1 year 25 204 1 805 2 686 29 695
Year 2 -4 331 862 6 673 39 619 378 154
More than 5 years - -
Total 357 066 8 478 42 305 407 849
Debt secured by collateral
2021 2020
Bonds (current 2020) 296 256 298 565
4 889 62 857
38 944 25 059
340 089 386 481
Booked value of assets used as collateral
2021 2020
Development properties 333 884 326 876
Loans from credit institutions - non-current and current
Construction loans (development projects) - current
Page 49 of 77
Reconciliation of liabilities arising from financing activities
Other transaction without cash settlements in the table above is in 2021 related to accrual of
borrowing cost of the bond loan from 2021, and new lease liabilities according to IFRS 16 recognized
in 2021, see note 9 for further information.
Refinancing of existing bonds
A new secured floating rate bond of NOK 300 million with 3-year tenor was issued in February 2021, to
refinance the existing senior secured bond which was maturing in June 2021 (FRIPRO01). A call
premium was paid for the existing bond of MNOK 3, which was expensed in 2021 together with
residual capitalized financing expenses of MNOK 1.4. The bond is secured by a pledge of the direct
subsidiaries of Frigaard Property Group AS, and the shares in Frigaard Property Group AS owned by
FPG Invest AS.
The coupon interest for the new bond was set to 3m NIBOR + 7% margin per annum. The bonds each
have a nominal value of NOK 100 000 with a minimum subscription and allocation amount equal to
the higher of NOK 1 200 000 and the NOK equivalent of EUR 100 000.
Page 50 of 77
Financial covenant was set to liquidity of no less than NOK 30 million, on a consolidated basis for the
Group. A permitted distribution was set to a one-time dividend payment in the calendar year 2021
from Frigaard Property Group AS to its shareholders in a maximum amount of NOK 30 million. The
dividend of MNOK 30 was paid to the shareholders in December 2021. After the annual financial
statement for the Group for 2021 have been approved a distribution up to the lower of NOK 15 million
per calendar year, and subject to certain conditions being met, the sum of 25% of the consolidated net
profit of the Group in the preceding financial year. Any Distribution made as a buyback of shares in
Frigaard Property Group, is limited up to NOK 40 million, see note 21 for further information. The
refinancing resulted in a net cash flow effect of MNOK 8.5 following repayment of existing bond
loan and transactions expenses.
NOTE 17. OTHER SHORT-TERM LIABILITIES
See note 19 for more information on the warranty provisions.
All amounts in NOK thousand
2021 2020
Accrued salaries incl. holiday pay and social security
13 665 25 422
Interest expenses
3 389 970
Warrenty provision
8 396 8 136
Accrued expenses, property development operations
29 092 -
Accrued expenses, construction contracts
31 505 43 281
Accrued expenses, other
2 009 -
Total
88 056 77 809
Page 51 of 77
NOTE 18. FINANCIAL INSTRUMENTS
The carrying value of assets and liabilities can be broken down into the following categories:
Financial instruments
The carrying value of cash and cash equivalents and liabilities to credit institutions is the same as their
fair value, since these instruments have a short maturity term. Correspondingly, the carrying value of
trade receivables and trade payables are the same as the fair value, as they are agreed upon under
”normal” terms. This also applies to unpaid government charges, tax payable and current liabilities.
Non-current liabilities have variable interest rates and continuous interest rate adjustment and
therefore the carrying value is substantially the same as the fair value.
Impairment of financial assets
The Group has trade receivables and other short term receivables subject to IFRS 9’s expected credit
loss model. The Group has to assess on a forward-looking basis the expected credit losses associated
with its debt instruments carried at amortised cost. The impairment methodology applied depends on
whether there has been a significant increase in credit risk.
While cash and cash equivalents also are subject to the impairment requirements of IFRS 9, the
expected credit losses are immaterial. For trade receivables, the Group applies the IFRS 9 simplified
approach to measuring expected credit losses, which uses a lifetime expected impairment provision
for all trade receivables.
All amounts in NOK thousand
2021
2020
Current
Trade receivables and other receivables 192 858 151 007
Contract assets 63 781 66 007
Cash and cash equivalents 209 168 258 756
Total financial assets 465 807 475 770
2021
2020
Non-Current
Bonds 296 256 -
Liabilitites to financial institutions 38 944 25 059
Construction loan 4 889 62 857
Current
Bond loan current - 298 565
Trade account payables 222 243 136 989
Contract liabilities 117 326 64 202
Total financial liabilities 679 658 587 672
Liabilities measured at amortized
cost
Assets measured at amortized cost
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NOTE 19. WARRANTY PROVISIONS
Provision is made for guarantee work under the item other short-term liabilities in the balance sheet.
The provisions are to remedy any defects or omission on completed projects. The provision is also to
cover other liabilities, such as claims from subcontractors, claims from third parties etc. The provision
is to cover both accrued warranty liabilities and contingent liabilities and so on. Among other things,
the provisions must cover future expenses for the remedy of hidden defects, i.e. defects and
omissions that have not been detected. In addition, they must also cover issues that are detected, but
where there is uncertainty regarding the scope, responsibility, costs, etc. (disputes).
NOTE 20. RELATED PARTY TRANSACTION
Soland Invest AS has an ownership of 84.76% in Frigaard Property Group AS through its ownership in
FPG Invest AS.
Transactions between subsidiaries are eliminated in the consolidated financial statements and do not
represent related parties. Frigaard Property Group has during the year, except for ordinary business
transactions, not had any significant transactions with related parties.
In 2020 a guarantee commission of MNOK 9.4 to Frigaard AS was signed and paid. The commission is
related to Frigaard AS responsibilities as a guarantor in the share purchase agreement for Höganloftet
AB, see note 10 for further information.
On the Annual Meeting in February 2021 of Frigaard Property Group AS, it was decided to redeem 38
098 shares and by that reducing the share capital of the company with 76 196,- NOK, from 543
012,- NOK to 466 816,- NOK. After this the share capital of the company consists of 233 408 shares
each with a par value of 2,- NOK. The effective date of the redemption is estimated to April 14th. The
capital reduction in 2021 was related to previous shareholders in Alento AS.
All amounts in NOK thousand
2021 2020
Warranty provision at 1 of January 8 136 9 199
+ new warranty provisions (additions) 6 619 5 892
- reversed warranty provisions (disposals) 3 759 3 794
- actual claims expenses (consumption) 2 600 3 161
Warranty provision at 31 of December 8 396 8 136
All amounts in NOK thousand
2021
2020
Capital reduction (partial liquidation) to shareholders in FPG -39 828 -
Frigaard Property Group AS's transactions with Soland Invest group companies
2021
2020
Managment fee - Soland Invest AS group 4 593 4 148
Income management services 849 810
Rental cost 593 599
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At the extraordinary general meeting held on the 19 of November 2021, Frigaard Property Group’s
shareholders approved the distribution of an additional dividend of NOK 128.53 per share. The
additional dividend of MNOK 30 was paid out to the entitled shareholders on 21 of December 2021.
Frigaard Property Group has ongoing transactions with related parties during its ordinary operations,
including contracts for the development of specific projects. Alento has been selected by Mistelpark
AS as the contractor for "project Mistel Park". One of the board member has a 25% ownership in
Mistel Park AS.
The chairman of the board of Frigaard property Group AS is also partner in the law firm BAHR, thus
BAHR is considered a related party. During 2021, Frigaard Property Group AS purchased legal services
from BAHR in connection with mainly potential acquisitions and equity transactions for TNOK 670.
NOTE 21. EVENTS AFTER THE REPORTING DATE
No other events have occurred after the balance sheet date which have had a material effect on the
submitted accounts. However, it should be noted that the accounts are based on project estimates
which reflect a normal situation of full operation and project staffing levels. Progress on current
projects may be affected by the war in Ukraine, and the consequences will depend on the scope and
duration of the war.
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INCOME STATEMENT FRIGAARD PROPERTY GROUP AS (PARENT)
All amounts in NOK thousand Note 2021 2020
Other operating revenue 8 1 074 1 031
Personnel expenses 6 6 795 11 024
Depreciation of fixed assets 13 796 704
Other operating expenses 6 8 653 9 894
Total operating expenses 16 244 21 622
Operating profit -15 170 -20 591
Income from investments in subsidiaries 2 54 038 40 829
Interest income from group companies 8,9 10 974 8 003
Other interest income 9 5 58
Interest expense to group companies 8,9 -4 254 -209
Other interest expense 9 -23 396 -22 932
Other financial expenses 9 -6 434 -2 961
Profit before income tax 15 763 2 19 7
Income taxes 7 4 819 -3 602
Net profit (- loss) for the year 10 94 4 5 799
Allocation of profit
Dividend from retained earnings 30 000
From retained earnings -19 056 5 799
Total 10 94 4 5 799
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STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP AS
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STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP AS
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STATEMENT OF CASH FLOWS FRIGAARD PROPERTY GROUP AS
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ACCOUNTING PRINCIPLES
The annual accounts have been prepared in conformity with the provisions of the Accounting Act and
good accounting practice in Norway.
Foreign currency
Foreign currency transactions are translated at the exchange rate on the date of the transaction.
Monetary foreign currency items are translated to NOK at the exchange rate on the balance sheet
date.
Revenues
Income from the sale of goods is recognised on the date of delivery. Revenue from sales of service is
recognised over time as they are delivered
Tax
The tax charge in the income statement consists of tax payable for the period and the change in
deferred tax. Deferred tax is calculated at the tax rate at 22 % on the basis of tax-reducing and tax-
increasing temporary differences that exist between accounting and tax values, and the tax loss
carried forward at the end of the accounting year. Tax-increasing and tax-reducing temporary
differences that reverse or may reverse in the same period are set off and entered net. A net deferred
tax asset is entered on the balance sheet to the extent that it is likely that it can be utilised.
Classification and valuation of fixed assets
Fixed assets consist of assets intended for long-term ownership and use. Fixed assets are valued at
acquisition cost less depreciation and write-downs. Long-term liabilities are entered on the balance
sheet at the nominal amount at the time of the transaction.
Classification and valuation of current assets
Current assets and short-term liabilities consist normally of items that fall due for payment within one
year of the balance sheet date, as well as items related to the stock cycle. Current assets are valued at
the lower of acquisition cost and fair value. Short-term liabilities are entered on the balance sheet at
the nominal amount at the time of the transaction.
Subsidiaries and associated companies
Subsidiaries and associated companies are valued using the cost method in the company accounts.
The investment is valued at acquisition cost for the shares unless a write-down has been necessary. A
write-down to fair value is made when a fall in value is due to reasons that cannot be expected to be
temporary and such write-down must be considered as necessary in accordance with good accounting
practice. Write-downs are reversed when the basis for the write-down is no longer present.
Dividends, group contributions and other distributions from subsidiaries are posted to income in the
same year as provided for in the distributor’s accounts. To the extent that dividends/group
contributions exceed the share of profits earned after the date of acquisition, the excess amounts
represent a repayment of invested capital, and distributions are deducted from the investment’s value
in the balance sheet of the parent company.
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Receivables
Receivables from customers and other receivables are entered at par value after deducting a provision
for expected losses. The provision for losses is made on the basis of an individual assessment of the
respective receivables. In addition an unspecified provision is made to cover expected losses on claims
in respect of customer receivables.
Cash flow statement
The cash flow statement has been prepared using the indirect method. Cash and cash equivalents
consist of cash, in house cash and bank deposits and other short-term, liquid investments.
NOTE 1 SUBSIDIARIES
The investments in subsidiaries are valued using the cost method.
MNOK 25 has been given from Frigaard Property Group AS to Metacon as a Group Contribution
without tax effect. Yearly impairment test of shares in subsidiaries has not indicated any events or
changes in circumstances that indicate that they might be impaired.
NOTE 2 INTER-COMPANY ITEMS
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NOTE 3 LIABILITIES
All amounts in NOK thousand
The company's bond is netted against the bond's set-up costs. These costs are depreciated over the
life-time of the bond. On the 10 of February 2021, the process of refinancing the bond of MNOK 300
was finalized. A new 3 year NOK denominated secured floating rate bond was issued.
NOTE 4 TOTAL SHARES, SHAREHOLDERS ETC.
The share capital of NOK 466 816 consists of 233 408 shares with a face value of NOK 2. All shares
have the same rights.
Overview of the largest shareholders at 31.12.2021
The company is part of the group Soland Invest AS, org. no. 987 521 465, with offices in Sarpsborg.
Soland Invest AS prepares consolidated financial statements, which can be accessed at the company's
offices at Sandesundsveien 2, 1724 Sarpsborg, Norway.
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NOTE 5 EQUITY
All amounts in NOK thousand
NOTE 6 SALARY COST AND BENEFITS, REMUNERATION TO THE BOARD AND AUDITOR
For salary cost, pension and benefits the parent company applies the same accounting policies as the
group.
There has been no board remuneration in 2021.
No loans or guarantees have been given to any board members or other related parties.
VAT is included in the fees specified above.
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NOTE 7 TAX
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NOTE 8 RELATED PARTY TRANSACTIONS
NOTE 9 FINANCE INCOME AND EXPENSES
NOTE 10 RESTRICTED FUNDS
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NOTE 11 SECURED DEBTS
NOTE 12 GUARANTEES
At December 2021 Frigaard Property Group AS has provided guarantees for its subsidiaries totaling
approximately MNOK 307 in connection with specific construction and property development projects
for group companies.
NOTE 13 EQUIPMENT AND MACHINERY
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NOTE 14 INTANGIBLE ASSETS
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SUSTAINABILITY IN FRIGAARD PROPERTY GROUP
The biggest change of our time is the transition to a more sustainable society.
Frigaard Property Group will be a pioneering player that actively contributes to the sustainable development of
society - and to making a difference through our core business.
The companies in the group are in the driver's seat of a large value chain with investments, project development
and construction for various types of projects and customers. We recognize sustainability as a highly
interdisciplinary field, with the opportunities and challenges that result from triple gains for the environment,
social conditions and the economy.
Sustainability is high on the agenda in the group's strategic development, and the companies work continuously
with a focus on improving sustainability throughout the value chain. We must ensure that what we influence and
carry out is in line with our ambition within sustainability, and that our activities are positive for present and
future generations. Through our agenda, we will create long-term and lasting values for both society and the
group.
Our priorities - which make a difference:
Management ensures that sustainability is a priority area - in both short and long term.
Sustainability action plan for all companies as well as a joint working group to ensure synergies across
property developer and construction activities.
Environmental lighthouse certification for our Construction companies and Property development
company in the group - and show continuous improvement of established criteria and KPI that follow
from the certification.
Environmental ambition for all new projects. Including a project-specific environmental plan with an
indication of the minimum standard and opportunities, which are linked to the individual project's life
cycle. Especially for self-developed projects, the impact is great from the early phase.
HSE in the driver's seat from early planning and all the way to all our construction sites in operation. We
will take care of safety, working environment and health for all our employees and partners. Our target
is, zero injuries, and that everyone shall get home safe.
Social values are created for society, by safeguarding human rights and complying with our ethical
guidelines. We must also ensure targeted area development and area utilization, adapted to the
individual local market. High end customer satisfaction.
Attractive partner and workplace, which promotes interaction and challenges on alternative
assessments from concept-to-material. We will influence our decision-makers, partners, customers and
colleagues to make fact-based and sustainable choices.
Economic growth that provides security for both people and society. We will be hands-on and ensure
the best possible return with efficient resource utilization in all our projects.
Innovation and presence through participation in industry-related gatherings, networks and societies.
We must be open and transparent for exchanges of experience and cooperation, which can contribute
to more sustainable developments. Membership in industry networks and that all companies have
signed the Guide Against Greenwashing.
The UN's 17 sustainability goals are a global work plan to eradicate poverty, fight inequality and stop climate
change by 2030. We have identified the following goals that reflect where we have the greatest impact through
the group's activities.
Decent work and economic growth
Sustainable cities and communities
Responsible consumption and production
Stop climate change
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CORPORATE GOVERNANCE
The board of directors is responsible for Frigaard Property Group’s corporate governance and
management and conducts an annual evaluation of principles and practice in this area.
Frigaard Property Group is subject to the governance requirements in section 3-3b of the Accounting
Act. Frigaard Property Group is a leading group within property development and construction of
turnkey homes and commercial buildings. As a Norwegian limited company with a bond listed on Oslo
Børs at year end, FPG is subject to a variety of external rules that affects its corporate governance.
Governance structure
Shares and shareholders
The share capital at the end of 2021 amounted to 466.816 NOK consisting of a total 233.408 shares,
FPGs shares are not listed. All shares entitle the holder to one vote per share, and all shares have the
same right to dividend. The largest shareholder FPG Invest AS, which is 100% owned by the founder
Trond Frigaard, held 84.76% percent of the votes at year end in Frigaard Property Group AS.
General Meetings of shareholders
The General Meeting is FPG's highest decision-making body and it is where shareholders exercise their
decision-making rights. At the Annual General Meeting, the shareholders decide on key issues, such as
adoption of income statements and balance sheets; the dividend, the composition of the Board;
discharging the members of the Board and the CEO from liability and election of external auditors.
FPG's financial year is from January 1 to December 31, and the annual General Meeting is to be held
within six months of the end of the financial year.
Board of Directors
The members of the Board are elected at the General Meeting, it shall consist of not fewer than one
and not more than six members. The Board has overall responsibility of FPG's organisational structure
Shareholders, through the General
Meeting of shareholders
External Auditors
Board of Directors
Audit Committee
CEO and Group Management Team
Construction
Property Development
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and management and the Board's main duty is to safeguard the interest of the Company and the
shareholders. The Boards thus makes decisions regarding the Group's strategy, interim and annual
reports, major construction projects, investments and divestments, appointment of CEO and matters
concerning the organisational structure of the Group. The Chairman leads the Board in its work and
has regular contact with the CEO in order to stay informed about the Group's activities and
development. The Board consisted of 3 members elected by the General Meeting.
The work of the Board in 2021
In preparation for each board meeting, the Board receives reports and documentation compiled
according to established procedures. The purpose of this is to ensure that the Board has the relevant
information and documentation on which to base decisions. In 2021 the Board held 11 meetings,
including its statutory meeting. The more important issues dealt with by the Board during the year
included monitoring operations review and approval of the interim reports and the year-end report,
re-financing of the bond, strategic review of FPG, decision on dividend proposal, as well as internal
control, risk management and compliance matters.
Monitoring
The Board continually evaluates the information provided by the Group Management Team and the
Audit Committee. Of particular importance is the result of the Audit Committees's work on monitoring
the effectiveness of the Group Management Team's internal control process. This includes ensuring
that steps are taken to address the shortcomings revealed in external audits and to implement the
proposed actions.
Audit Committee
The main task for the Audit committee is to assist the Board in overseeing the financial reporting,
reporting procedures and accounting principles, and critical accounting estimates and to monitor the
auditing of the accounts for the Company and the Group. The committee also evaluates the quality of
the Group's reporting and risk management, and reviews the reports and opinions of FPG's external
auditors. The committee monitors the external auditors' assessment of their impartiality and
independence and that there are routines in place stipulating which non-audit services they provide to
the Company and the Group. The committee also monitors compliance with the rules on auditor
rotation. The external auditors are present at committee meetings. At least once a year the Audit
committee meet the auditors without senior executives being present.
A new Audit committee has been elected on the 24.02.2021. The members of the committee are
appointed annually at the statutory meeting of the Board. The Board specify which duties and
decision- making powers have been delegated. The Chairman of the committee reports to the Board
at each board meeting and all minutes from the committee meetings are submitted to the Board.
Important matters addressed during the year includes capital allocation, financing, external reporting,
impairment testing, write-downs in construction projects, larger disputes review of the interim reports
and year-end report, internal control, risk management and compliance matters.
External auditors
PwC is elected as external auditors. The external auditor has attended 3 Board's Audit Committee
meetings to report on the auditing process of PwC for FPG, and to provide the members of the Board's
Audit Committee with an opportunity to ask questions.
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The external auditor is independent of Frigaard Property Group and issues an annual written
confirmation to the board of directors that stipulated independence requirements are met. Frigaard
Property Group has guidelines in place on the scope and types of additional services provided by the
auditor. The external auditor’s remuneration is specified in Note 6.
Operation management and internal governance
FPG operates with a decentralised governance model that recognises the local characteristic of the
construction and property development business, empowering the business units to develop their
business and deliver according to plan, while retaining the profit and loss responsibility. The Group
Headquarter sets the Group strategy and targets, ensures effective financial capacity, and conducts
proper follow- up in business unit performance and compliance. In the decentralised governance
structure operated as a rule the Group headquarter establishes what is required while the business
units are responsible for how requirements are met. Each business unit has its own administrative
functions and other resources to conduct its operations effectively. Separately from day-to-day
operations managing projects, the business units deal with matters such as their strategic
development business plans, investments, and organisation.
The CEO and the Group Management Team
The CEO is appointed by the Board and runs the company and the Group in accordance with the
instruction adopted by the Board. The CEO is responsible for the day-to-day management of the
operations of the Company and Group and is supported by the other members of the Group
Management Team. The work of the CEO is evaluated at one of the board meeting each year at which
no senior executives are present.
In the monthly business review the CEO evaluates together with the group management team,
material estimates and judgements related to the reported financial figures.
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DIRECTORS’ RESPONSIBILITY STATEMENT
Today, the board of directors and the chief executive officer reviewed and approved the board of
directors’ report and the consolidated and separate annual financial statements of Frigaard Property
Group AS, consolidated and parent company for the year ending and as of 31 December 2021.
Frigaard Property Group AS’s consolidated financial statements have been prepared in accordance
with IFRSs and IFRICs adopted by the EU as well as additional disclosure requirements in the
Norwegian Accounting Act and as such are to be applied per 31 December 2021. The separate
financial statements of Frigaard Property Group AS and the parent company have been prepared in
accordance with the Norwegian Accounting Act and Norwegian accounting standards as at 31
December 2021. The board of directors’ report for the group and the parent company satisfy with the
requirements of the Norwegian Accounting Act and Norwegian accounting standard no. 16, as at 31
December 2021.
To the best of our knowledge:
The consolidated and separate annual financial statements for 2021 have been prepared in
accordance with applicable accounting standards.
The consolidated and separate annual financial statements give a true and fair overall view of the
assets, liabilities, financial position and profit/loss of the group and for the parent company as of 31
December 2021.
The board of directors’ report provides a true and fair review of the
- development and performance of the business and the position of the group and the parent
company,
- the principal risks and uncertainties the group and the parent company may face.
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Frigaard Property Group AS - Pr ivate Limit ed Company
Domicile in Sarpsborg, Viken county, Norway