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HIGHLIGHTS
2022
Amounts in NOK million. Figures in brackets are comparative figures for 2021.
NET OPERATING REVENUES
-5.2% Y-O-Y (1 583)
EBITDA
40.9% Y-O-Y (21)
BACKLOG
0.6% Y-O-Y (1 520)
ORDER INTAKE
-14.3% Y-O-Y (1 971)
NET PROFIT
33.3% Y-O-Y (-5)
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BOARD OF DIRECTORS' REPORT
Operations and locations
Frigaard Property Group is a leading construction and property development company. The head
office is in Sarpsborg, Norway and the group operates mainly in the south east area of Norway, in
Viken county.
The group is organized in two business segments, construction and property development.
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 Entreprenør AS
Frigaard Bolig AS
o Høgliveien 30 AS
o Høgli Næring AS
o Fagerliveien Utvikling AS
o Ryggeveien 33 AS
o Solbyen Utvikling AS
o Dronningensgate Atrium AS
o Åsenveien Park AS
Høgliveien Eiendom AS were merged with Høgliveien 30 AS during 2022. Høgli Næring AS arose from
the demerger of asset from Høgliveien 30 AS.
C
omments related to the financial statements
The Group’s revenues decreased from MNOK 1 583.3 last year to MNOK 1 500.7 in 2022. The level of
activity in Frigaard Property Group has been high during 2022. New orders signed during the year, and
revenue from the construction segment has been stable and solid. Order back-log have all risen to all-
time high levels. Macro environment with high inflation and increasing interest and energy prices
affects our final margins.
During 2022 89 development properties were sold, compared to 80 units last year. At year end 190
development properties are under construction.
Total cash flow from operating activities was MNOK - 284 in 2022, and the operating profit is MNOK
53.7. The difference between cash flow and operating profit mainly concerns timing differences in the
payment plan in the construction projects compared to 2022, and production of residential homes in
production. The production of residential homes is fully financed by construction loans, shown as
financing activities in the Group’s cash flow. The Group’s cash flow from investments during 2022
amounted to MNOK 60. This is mainly from the financing of a combined logistic and office building in
Tranås and the final settlement from the sale of the shares in Höganloft Fastigheter AB in 2020. The
building was delivered on the first of March 2022. As a part of the final share purchase agreement
from the sale of shares in Höganloft Fastigheter AB, Frigaard Bolig had to finance part of the building
cost that wasn’t covered by the construction loan.
The Group’s liquidity reserve as of 31.12.2022 amounted to MNOK 237.8.
The Group’s short-term debt as of 31.12.2022 constituted 70 % of the Group’s total debt, compared
to 52 % as of 31.12.2021. This increase is mainly attributable to a short-term construction loan which
is related to property development projects which will be finalized and ready for handover during
2022. The Group’s financial position is sound and adequate.
Total assets at year-end amounted to MNOK 1 439, compared to MNOK 1 105 last year. The equity
ratio was 19.1 % as of 31.12.2022, compared to 22.3 % the year before.
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Market outlook
The order intake of the Construction segment has been very strong during 2022. Consequently, the
order backlog is high, and a large part of work for 2023 is already secured. At the same time, we have
had record high sales of residential properties during 2022 which have secured a sales rate of 78% of
property development projects in the progress of construction. These elements provide a sound basis
for a profitable group going forward.
However, our market view is still positive, but nevertheless affected by the changes to the macro-
economic environment with higher inflation, energy prices and interest rates to construction overall,
as well as for the housing market. The effect results in delays in decisions and start up for new
projects. This situation has been characteristic for the housing market, but much less for the
commercial market as warehouses and other logistic buildings.
We are monitoring the situation and are adapting our risk assessments on an ongoing basis.
F
inancial 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
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and control of liquidity are carried out from the project level and on through all the levels of the
organization.
The Group’s 300 MNOK listed bond is due February 10, 2024, less than 12 months from the issuance
of this report. The secured order backlog for delivery in 2023 is MNOK 1 352 (90% of 2022 revenue),
residential properties for finalization in 2023 have a sales value of MNOK 984 (whereof MNOK
728/74% is sold) and cash reserves as of 31.12.22 were 238 MNOK. Based on this the available
refinancing options is viewed to be good. Further sales of the unsold residential properties represents
a significant upside potential on cash reserves. In a scenario with low or no further sales of residential
properties, these will still be to the benefit in a refinancing, as collateral.
Based on this the available refinancing options are viewed to be good, including the option to repay
the bond fully or predominantly utilizing reserves available to the Group. As such management has
concluded that the matter does not represent a material uncertainty about the Group's ability to
continue as a going concern.
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 7 298 hours in 2022 (13 747 hours in 2021), which equals approximately
2.7 % (6.0 % in 2021) of the total working hours in the Group. The decrease from last year’s 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.
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.
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 152 employees, of which
eighteen 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. Several
measures were implemented in 2022, in accordance with gender distribution. Including around
recruitment where there is a conscious focus on recruiting more women, and where it is signaled in
job adverts that we want more female applicants.
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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. The company's personnel policy is considered to be gender neutral in
all areas, and no feedback has been received that anyone perceives the company's personnel policy to
be gender discriminatory.
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.
C
limate risk
The construction and operation of buildings accounts for 40% of the global carbon emission in 2022,
according to SINTEF Byggforsk. Since the industry we are in has such an effect on the emission,
Frigaard Bolig, as a construction client, is responsible for minimizing emission in its property
development projects and setting an individual environmental plan for all new projects. Frigaard Bolig
focus in new property development project will effect the selection and follow up of conctractors.
Contracts set clear requirements for contractors to operate in accordance with the laws and
regulations in force at any given time, and in accordance with Frigaard Bolig’s guidelines. No breaches
were discovered during 2022.
A significant part of the global carbon emission comes from the production of building materials such
as concrete and steel, for further information on climate risk for concrete and steel see note 21.
Frigaard Property Group AS is exposed to both transition risk and physical risks associated with climate
change. The physical risks associated with climate change may directly affect operations through
increased occurrence of extreme weather conditions, conflict, pandemic, etc. Natural disasters and
conflicts may affect the production and supply of goods, as well as buildings under construction.
Frigaard Property Group AS has many suppliers, who are located in different geographic regions. The
probability that the entire value chain will be affected is therefore low. The group can adapt where
goods is purchased from based of available goods.
A pandemic might impact our business, not only as a physical climate risk, but also as a transition risk
as a result of imposed regulatory restrictions and changes in customer behavior.
The group is working on setting reliable goals that are in line with our ambition to decrease the
climate impact of our technologies in use, and our operational emissions. As part of this process, we
are working on developing roadmaps to be able to reach these targets. The insights we gain as we
work to achieve these goals will be taken into account when we make decisions related to the group's
Page 7 of 83
strategic development, and as we continuously work with improving our sustainability throughout the
value chain.
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.
BREAM-NOR
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
good or best practice for sustainable design and procurement.
Alento AS handed over the largest construction project ever in Frigaard Property Group history to
BAMA in April 2022. The Bama building was built in accordance with the strict environmental
requirements and was certified according to the BREEAM Very Good standard.
In April 2022 a 20000 m
2
logistic center in Tranäs (Höganloft) where handed over to the final owner,
where Frigaard Bolig had the project leader responsibility on behalf of the construction client. The
building was certified according to the BREEAM Very Good standard.
Our Construction segment also delivers fossil-free construction sites when requested from our
external customer.
EDP
Frigaard Property Group AS is in possession of a steel factory, through its ownership in the subsidiary
Metacon AS. 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 2000 EPDs from over 250 companies are now published and freely
available at EPD-Norway (www.edp-norge.no
).
FRIGAARD BOLIG SETS REQUIREMENTS FOR CONTRACTORS
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. This includes among other things solution for energy efficient
buildings, choice of materials and re-use of materials or ground to reduce waste handling and
interaction with the surroundings.
For the property development project Høgli (www.boihøgli.no
) m
aterial was cleaned and recycled
back to the project. Material that would previously have ended up in landfill sites. For the property
development project Fagerlia (www.boifagerlia.no) we had “open houses” where we gave away old
material and vegetation to try and increase the reuse of material and vegetations, before we started
the demolition of older houses and removal of masses on the plot.
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ENVIRONMENTAL LIGHTHOUSE
As a part of our environmental work, our Property Development company and our Construction
companies, have a certification as Miljøfyrtårn (Environmental lighthouse) in place. The certification
guides our companies to continuously show improvement of established criteria and KPI that follow
from the certification.
WASTE MANAGEMENT
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.
In Norway, the requirement from the authorities (Building Technical Regulations, TEK17) is that a
minimum of 60 per cent of construction waste (measured by weight) must be sorted at source. For
both Alento AS and Metacon this figure was 90% for 2022. For the Steel production this figure was
97%.
C
orporate 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.
E
thical, 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
of decision-making in Frigaard Property Group. The percentage of women working in the Group has
increased to 11.8% in 2022 compared to 9.5% in 2021.
Frigaard Property Group works hard to protect labor 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.
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The company expanded its statement on sustainability in 2022, see page 77 to form a separate part of
its annual reporting. That work continues in 2023, and the company will establish further specific goals
and measures during 2023.
The transparency act
Frigaard property Group is subject to the rules in the Act on the transparency of businesses, and work
with basic human rights and decent working conditions, also called the Transparency Act. This law
aims to ensure companies' respect for basic human rights and decent working conditions and will give
the general public access to the information.
The law requires the company to make a statement of the due diligence assessments carried out
regarding this act.
This must be made public, and Frigaard Property Group will publish this at www.fpg.no
within the
statutory deadline of 30 June 2023.
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 78.
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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.
The demerger of assets between Metacon AS and Frigaard Entreprenør AS was completed on the 28
of March 2023.
No other events have occurred after the balance sheet date which have had a material effect on the
issued accounts.
Th
e 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 2022. 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 3.7 (MNOK 10.9). The
parent company’s equity amounted to MNOK 143.4 (139.8) at 31 of December.
Go
ing 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 2023 and the Group’s long-term strategic forecasts. The Group’s economic and financial position
is sound.
Dato og Signaturer skal inn
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INCOME STATEMENT FRIGAARD PROPERTY GROUP
STATEMENT OF COMPREHENSIVE INCOME
All amounts in NOK thousand
No
te 2022 2021
Revenue from contracts with customers
3,4 1 495 828 1 582 319
Other operating revenue
4,10 4 916 952
Total operating revenue 1 500 744 1 583 271
Materials, subcontractors and consumables 1 571 670 1 562 704
Change in inventories and development properties -332 690 -162 159
Salaries and personnel expense 5 155 425 133 558
Other operating expense 6,9,20 44 208 27 923
Operating profit (loss) before depreciation, amortisation and
impairment losses (EBITDA)
62 131 21 245
Depreciation and amortisation expense 7,8,9 8 462 8 022
Operating profit (EBIT) 53 669 13 223
Interest income 763 3 524
Interest expense 17 265 22 079
Net financial costs 16 502 18 555
Profit before income tax 37 167 -5 332
Income taxes 15 8 999 -197
Net profit (loss) for the period 28 168 -5 135
Profit/(loss) is attributable to:
Majority share of profit/(loss) 28 168 -5 135
Minority share of profit/(loss) - -
Total 28 168 -5 135
2 022 2 021
Net profit (loss) for the period 28 168 -5 135
Other comprehensive income
Items which may be reclassified to profit and loss in subsequent periods
Exchange differences on translation of foreign subsidairies - -
Total comprehensive income for the year 28 168 -5 135
Profit for the year attributable to:
Equity holders of the parent company 28 168 -5 135
28 168 -5 135
*The Group has decided to present "changes in inventories and development properties" separately from "materials, subcontractors and
consumables", restating the information presented in the 2021 financial statements.
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STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP
ASSETS Note 31.12.2022 31.12.2021
Al
l amounts in NOK thousand
Non-current assets
Other intangible assets 7 244 127
Goodwill 7 284 019 284 019
Buildings and land 8 3 275 3 798
Machinery and equipment 8 4 713 4 439
Right-of-use assets 9 9 776 12 576
Investment in associated companies and joint ventures 3 750 -
TOTAL NON-CURRENT ASSETS 305 777 304 959
Current assets
Inventories and development properties 11 661 653 334 759
Trade receivables 12,18 172 917 113 538
Contract assets 12,18 59 977 63 781
Other short-term receivables 10 1 403 79 320
Cash and cash equivalents 13,18 237 750 209 168
TOTAL CURRENT ASSETS 1 133 700 800 566
TOTAL ASSETS 1 439 477 1 105 525
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STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP
EQUITY AND LIABILITIES Note 31.12.2022 31.12.2021
All amounts in NOK thousand
Equity
Share capital 14 467 467
Share premium reserve 167 396 167 396
Total paid-in capital 167 863 167 863
Retained earnings 107 353 79 187
Total retained earnings 107 353 79 187
TOTAL EQUITY 275 216 247 050
Non-current liabilities
Deferred tax 15 31 319 22 336
Bond loan 16,18 298 129 296 256
Liabilitites to financial institutions 16,18 12 600 38 944
Construction loan 16 - 4 889
Leasing liabilities 9 3 898 6 985
Other non-current liabilities 11 3 750 45 955
TOTAL NON-CURRENT LIABILITIES 349 696 415 365
Current liabilities
Short term financial liabilities 16,18 38 830 -
Short term construction loan 16,18 278 448 -
Lease liabilities 9 6 140 5 215
Trade account payables 18 197 989 222 243
Public duties payable 30 854 10 270
Contract liabilities 4,12,18 116 867 117 326
Other short-term liabilities 17,19 145 437 88 056
TOTAL CURRENT LIABILITIES 814 565 443 110
TOTAL LIABILITIES 1 164 261 858 475
TOTAL EQUITY AND LIABILITIES 1 439 477 1 105 525
Dato og Signaturer skal inn
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STATEMENT OF CHANGES IN EQUITY FRIGAARD PROPERTY GROUP
All amounts in NOK thousand
Total
equity
Other Equity
Share
premium
reserve
Retained
earnings
Equity as at 01.01 2021 543 216 389 105 080 322 013
Transaction with owners
Capital decrease -76
-39 752
-39 828
Dividends
-9 241
-20 759 -30 000
Comprehensive income
Profit (loss) for the period - - -5 135 -5 135
Equity as at 31.12 2021 467 167 396 79 186 247 050
Total
equity
Other Equity
Share
premium
Retained
earnings
Equity as at 01.01 2022 467 167 396 79 186 247 050
Profit (loss) for the period - - 28 168 28 168
Other comprehensive income - - - -
Equity as at 31.12 2022 467 167 396
107 353
275 216
Attributable to equity holders of the
parent company
Attributable to equity holders of the
parent company
Page 15 of 83
STATEMENT OF CASHFLOW FRIGAARD PROPERTY GROUP
All amounts in NOK thousand
Note 2022 2021
Cash flow from operations
Profit before income taxes 37 167 -5 332
Taxes paid in the period 15 - -
Gain/loss from sale of fixed assets 8 -1 408 -
10 -2 817 -
8,9 8 462 8 344
11 -326 894 16 452
Adjustment for gains on disposal of shares in subsidiaries
Depreciation
Change in inventory and development properties
Change in trade receivables and construction contract balances
12 -108 455 72 230
Change in trade account payables -24 254 85 209
Contract liabilities from advanced payment from customers, property development 56 171 -
Change in other provisions 77 949 -58 359
Net cash flow from operations -284 079 118 544
Cash flow from investments
Proceeds from sale of fixed assets 8 2 000 -
Purchase of fixed assets 8,9 -2 048 -2 024
Purchase of subsidiaries (net of cash) - -5 857
Proceeds from sale of other investments and sale of subsidiaries 10 33 551 -
Purchase of other investment 10 26 645 -18 231
Net cash flow from investments 60 148 -26 112
Cash flow from financing
Proceeds from the issuance of bonds 16 - 300 000
Payment of bonds 16 - -303 000
Issue costs paid - -5 465
Proceeds from long term loans 17 12 600 -
Repayment of long term loans 16 -114 -115
Proceeds from construction loans 16 273 559 103 523
Repayment of construction loans - -161 491
Repayment of short term loans -27 396 -
Repayment of financial lease liabilities 9 -6 136 -5 644
Capital reduction - -39 828
Payment of dividend 16 - -30 000
Net cash flow from financing 252 513 -142 020
Net change in cash and cash equivalents 28 582 -49 588
Cash and cash equivalents at the beginning of the period 209 168 258 756
Cash and cash equivalents at the end of the period 237 750 209 168
Page 16 of 83
TABLE OF CONTENTS NOTES FRIGAARD PROPERTY GROUP
NOTE 1. ACCOUNTING POLICIES – FRIGAARD PROPERTY GROUP ......................................................... 17
NOTE 2. BASIS OF PREPARATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES ................ 17
NOTE 3. SEGMENT INFORMATION ........................................................................................................ 36
NOTE 4. OPERATING AND OTHER INCOME ............................................................................................ 37
NOTE 5. PERSONNEL EXPENSES ............................................................................................................. 38
NOTE 6. OTHER OPERATING EXPENSES ................................................................................................. 39
NOTE 7. INTANGIBLE ASSETS ................................................................................................................. 40
NOTE 8. PROPERTY, PLANT AND EQUIPMENT ....................................................................................... 42
NOTE 9. LEASES, RIGHT OF USE ASSETS AND LEASE LIABILITIES ............................................................ 43
NOTE 10. ACQUISITIONS AND DIVESTMENTS ........................................................................................ 46
NOTE 11. INVENTORIES AND DEVELOPMENT PROPERTIES ................................................................... 46
NOTE 12. TRADE RECEIVABLES AND CONTRACT BALANCES .................................................................. 47
NOTE 13. CASH AND CASH EQUIVALENTS ............................................................................................. 48
NOTE 14. NUMBER OF SHARES, SHAREHOLDERS ETC. .......................................................................... 50
NOTE 15. INCOME TAX EXPENSE AND DEFERRED TAX .......................................................................... 51
NOTE 16. NON-CURRENT LIABILITIES ..................................................................................................... 52
NOTE 17. OTHER SHORT-TERM LIABILITIES ........................................................................................... 54
NOTE 18. FINANCIAL INSTRUMENTS ..................................................................................................... 55
NOTE 19. WARRANTY PROVISIONS ........................................................................................................ 56
NOTE 20. RELATED PARTY TRANSACTION .............................................................................................. 56
NOTE 21. CLIMATE RISK ......................................................................................................................... 57
NOTE 22. EVENTS AFTER THE REPORTING DATE ................................................................................... 58
SUSTAINABILITY IN FRIGAARD PROPERTY GROUP ................................................................................. 78
CORPORATE GOVERNANCE ................................................................................................................... 79
DIRECTORS’ RESPONSIBILITY STATEMENT ............................................................................................. 82
Page 17 of 83
NOTE 1. ACCOUNTING POLICIES – FRIGAARD PROPERTY GROUP
General information
Frigaard Property Group AS is a Norwegian building- and construction group operating in Norway. The
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 2023. 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
FFrigaard Property Group has elected to present two statements, one consolidated statement, and a
consolidated statement of comprehensive income.
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 2022 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
31.12.2022, interpretations by the IFRS interpretations Committee and Norwegian disclose
requirements listed in the Norwegian Accounting Act as of 31.12.2022.
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.
See note 2.20 for discolusure in relation to liquidity risk.
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2.3 Consolidation principles and equity accounting
Subsidiaries
Co
ntrol
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. Unrealized 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
Group Companies Location Ownership
Frigaard Property Group AS (parent c ompany) Sarpsborg 100 %
Metacon AS Rakkestad 100 %
Alento AS Drammen 100 %
Frigaard Entreprenør AS Sarspborg 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 %
Høgliveien 30 AS Sarpsborg 100 %
Høgliveien Næring AS Sarpsborg 100 %
Åsenveien Park AS Sarpsborg 100 %
Tindlund Terasse Sarpsborg 50 %
Page 19 of 83
liabilities and contingent liabilities assumed in a business combination are measured initially at their
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 recognized 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 recognized 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
recognized 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
recognized 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
• Constructio
n
S
ee Note 3 on segment reporting for more details. See also the detailed description under income
recognition.
2.6 D
evelopment 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. Even though a significant proportion of the costs in
the projects are locked in an early stage in the project, there will be some uncertainty linked to the
total estimate of construction costs in the project.
The cost of land for development are capitalized together with the cost of the plot as inventory.
Subsequent costs associated with developing and constructing a project are usually first capitalized
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.
U
nsold land and property
Unsold land and property are capitalized under development properties.
Net realizable value is the estimated selling price in the ordinary course of business less the estimated
cost of completion and the estimated costs necessary to make the sale. In determining the net
realizable value, management assesses important factors relevant for the valuation, including
macroeconomic factors such as expected yields, approvals from the authorities, construction costs
and project progression. If net realizable value is considered to be lower than cost price, write-downs
are made at net realizable value.
2.7 P
roperty, 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
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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.
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.
R
ecognition of leases and exemptions
Page 23 of 83
At the lease commencement date, the Group recognizes a lease liability and corresponding right-of-
use asset for all lease agreements in which it is the lessee, except for the following exemptions
applied:
• Short-term leases (defined as 12 months or less)
• Low value assets
For these leases, the Group recognizes the lease payments as other operating expenses in the
statement of profit or loss when they incur.
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 recognizes 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:
Page 24 of 83
• 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
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 I
ntangible assets
Intangible assets that have been acquired separately are carried at cost. Capitalized 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 Go
odwill
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 recognized 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 recognized 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.
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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.
Page 26 of 83
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 recognized on the trade date, the date on
which the Group commits to purchase or sell the asset. Financial assets are derecognized 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:
Amortized 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 amortized 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 recognized 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
recognized in profit or loss. When the financial asset is derecognized, the cumulative gain or loss
previously recognized in OCI is reclassified from equity to profit or loss and recognized 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 amortized cost or FVOCI are measured at FVPL. A gain or
loss on a debt investment that is subsequently measured at FVPL is recognized 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 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 receivables 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 recognizes a financial liability when it first
becomes a party to the contractual rights and obligations in the contract.
All financial liabilities are initially recognized 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 amortized cost, unless the Group opted to measure a liability at FVPL.
A financial liability is derecognized 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 amortized cost using the effective interest method.
Financial liabilities included in trade and other payables are recognized initially at fair value and
subsequently at amortized 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 amortized cost and FVOCI. The
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impairment methodology applied depends on whether there has been a significant increase in credit
risk.
Th
e 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.
De
bt 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 recognized in profit or loss and reduces the
fair value loss otherwise recognized 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 based on 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 based on 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
realized, 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
utilize 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 realize the asset and settle the liability simultaneously.
Current and deferred tax is recognized in profit or loss, except to the extent that it relates to items
recognized in other comprehensive income or directly in equity. In this case, the tax is also recognized
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 recognized 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
recognized 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 recognized 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 is 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 capitalization. All
other borrowing costs are recognized in profit or loss in the period in which they are incurred.
Frigaard Property Group capitalizes 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.
C
onstruction
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.
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 – Revenue is based on contract price, including agreed modifications to scope
and prices in the contract. Variable consideration is included in the transaction price to the
extent it is highly probable that a significant reversal will not occur.
● Project cost – Project costs are cost attributable to the construction contract based on actual
costs incurred in order to transfer control over the goods and services agreed in the
construction contract.
● Completion rate: The percentage of completion applied to recognized revenue is estimated
on the basis of the percentage of costs incurred with respect to the total estimated costs in
the project.
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.
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.
P
roperty 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.
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Revenue is recognized 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.
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 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 recognized over the lease term, on a straight-
line basis, as a reduction of rental income. The group recognizes revenue from sale of services when
the service is performed.
2.18 Interest income and expense
Interest income and expense are recognized 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 capitalized as part of the cost of that asset. The Group has chosen to capitalize 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
FPG Group has not implemented any new accounting standards or otherwise made any significant
changes to accounting policies during 2022.
Other standards and interpretations not yet adopted
There are no IFRS standards or IFRIC interpretations that are not yet effective that would be expected
to have a material impact on the Group.
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.
Page 32 of 83
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.
M
arket 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 because 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.
T
he 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 2.21 for further information regarding Critical accounting estimates and assumptions.
G
overnment 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
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 have been entered into.
The sensitivity analysis below has been determined based on the exposure to interest rates at the
reporting date, and the stipulated change taking place for the entire period during which the
construction loan is drawn down for the annual year 2022 and 2023.
Page 33 of 83
Customer credit risk - risk in trade accounts receivable
Credit risk refers to the risk that a counterparty 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. Contract assets is included in the assessment together with the accounts receivable.
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. See note 12 for further information on
the maturity structure of invoiced trade recivable.
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.
The Group’s 300 MNOK listed bond is due February 10, 2024, less than 12 months from the issuance
of this report. See the board of Directors report, and the section on liquidity risk for further
information of the available refinancing options.
Sensitivity of interest expense to interest movements Impact on interest expense
Interest expense
Increase 1% 4 741
Increase 3% 14 224
Increase 5% 23 706
Decrease 1% 4 741
-
Decrease 3% 14 224-
Page 34 of 83
Funding
The Group’s principal financial liabilities, besides derivative financial liabilities, comprise of 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 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 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. 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. See note 16 for further
information on the repayment profile of loans from credit institutions.
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.
Page 35 of 83
Property projects under construction
The Group commenced construction of several development properties and commercial building
projects during the year, where the customer contracts qualify for revenue recognition over time
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.
G
oodwill
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, considered 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
O
rder 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 36 of 83
NOTE 3. SEGMENT INFORMATION
O
perating 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
S
egment 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
2022 2021
Income statement
Property development 23 033 242 867
Construction 1 476 829 1 499 615
Other 882 849
Intersegment Eliminations - 160 060-
Total operating revenue 1 500 744 1 583 271
Property development 2 035- 5 799-
Construction 87 219 41 147
Other 23 053
-
14 103
-
EBITDA 62 131 21 245
Property development 2 187
-
6 132
-
Construction 80 143 34 518
Other 24 287- 15 163-
EBIT 53 669 13 223
Page 37 of 83
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 recognized when control over the property has been transferred to the customer.
F
or property development, the group has entered into contracts with customers totaling MNOK 775.1
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
31.12.2022 transaction price allocated to partly or fully unsatisfied performance obligations on
contracts with an original duration of more than 12 months was MNOK 1 180.2.
T
he 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 5 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.
F
rigaard Property Group's income from lease of properties:
All amounts in NOK thousand
Segment
2022 2021
Revenue from contracts with customers
Contract revenues from Construction Construction 1 475 612 1 339 452
Sale of development property Development property 19 305 242 017
Rental income from Property development Development property 911 850
Rental income from Other
Other
- -
Total revenue from contracts with customers 1 495 828 1 582 319
Investment property - change fair value
Other
- -
Other operating income
Gain from sale of fixed assets Construction 1 217 103
Other income from Other Other 882 849
Sale of shares Property development Development property 2 817 -
Total other operating income 4 916 952
Totalt operating revenue 1 500 744 1 583 271
All amounts in NOK thousand
2022 2021
Rental income this year 911 850
Rental income next year 1 650 525
Total rental income next 2-5 years 1 800 600
Page 38 of 83
NOTE 5. PERSONNEL EXPENSES
M
anagement remuneration
There are 4 employees in the parent company. The Group Management consist of the Board of
Directors, in addition to the General Managers in the largest subsidiaries. The Board remuneration is
shown in the table below.
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
R
emuneration of CEO in Frigaard Property Group AS has been carried out in accordance with
guidelines approved by the Chairman of the board. Board remuneration carried out in 2022 is for both
2020 and 2021. To ensure competitive conditions as well as focus on achieving results, the CEO and
1
Control shares through privately owned company. See note 14 for details on shareholders
All amounts in NOK thousand
2022 2021
Salaries and holiday pay
131 240 113 649
Social security
19 855 16 273
Pension costs defined contribution plans
4 330 3 636
Other personnel costs
Total salaries and personnel expense
155 425 133 558
2022 2021
Norway
155 425 133 558
Total 155 425 133 558
The number of employees in Frigaard Property Group at 31 of December 2022 was 152 persons (2021: 116 persons).
A total of TNOK 4 461 (2021: TNOK 2 197) of salary cost related to project management have been booked toward development properties
in 2022.
Board
remuneration
Salaries
included
sosial cost
Bonuses
Pension
cost
Value of
options
granted
Total
remuneration
Number of
shares
31.12.2022
Management
Simon Nyquist Martinsen , CEO 2 454 1 020 54 3 528 5 128
Gry-Heidi B. Montelius, CFO 1 601 379 54 2 034
Members of the Board
Helge Stemshaug, Chairman 720 - -
Kristian Lindland, member of the board - - 18 348
1)
Trond Frigaard, member of the board - - 197 826
1)
Total remuneration 720 4 055 1 399 108 - 5 562 221 302
leading employees participate in a bonus program for 2021-2023 with a maximum bonus between 40-
60% of the individual annual fixed salary, whereof 40% is payable in 2024. 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
2022 2021
Freight costs -
-
Energy costs
1 249 959
Advertising
2 048 304
Repair and maintenance costs 1 069 715
Short term and low value leasing
2 396 1 685
Travel costs 2 581 1 626
Consultancy fees and external personnel 10 848 6 303
Insurance 2 297 2 824
Management fee 4 300 4 380
IT cost 6 159 4 745
Other operating costs 11 261 4 382
Total operating expenses
44 208 27 923
Specification auditor's fee
2022 2021
Audit fees 1 621
1 490
Other non-audit services 171 52
Tax advisory services - 12
Total 1 792 1 554
Page 40 of 83
NOTE 7. INTANGIBLE ASSETS
Go
odwill
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. The majority of the goodwill is allocated to the
construction segment.
Management monitors the goodwill at the operating segment level. For the 2022 and 2021 reporting
periods, the recoverable amount of the cash-generating units (CGUs) was determined based on value
in use calculations which require the use of assumptions. The calculations use cash flow projections
based on financial budgets approved by management.
Goodwill is not amortized 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 2023, and prognosticated cash flows covering a five year 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 and the expected
evolution of the orderbook. 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
All amounts in NOK thousand
2022 2021
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 41 of 83
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 considered. The present value of the forecast cash
flow was calculated using a discount rate of 12.1 percent after tax. This is based on a risk-free interest
rate of 3.4 %, plus a risk premium of 5.0 %. 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 2022 and
was addressed by the company's Board. No impairment requirement was indicated.
A change in the discount rate to 30.5 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
2022 2021
Carrying amount at 1 January 127 333
Additions 298 127
Amortisation -54 -333
Carrying value 31 of December 371 127
Per 31 december
Acquisition cost 1 297 1 126
Accumulated amortisation -1 053 -999
Accumulated cost 31 of December 244 127
Useful life 3-5 years 3-5 years
Depreciation method Linear Line
ar
Page 42 of 83
NOTE 8. PROPERTY, PLANT AND EQUIPMENT
Carrying amount 01.01 4 342 4 057 8 399
Additions - 1 897 1 897
Additions through acquisitions -
Reclassifications -
Disposals - -552 -552
Depreciations -544 -1 515 -2 059
Depreciations in acquired companies -
Accumulated depreciation on disposals for the year - 552 552
Carrying value 31 of December 2021 3 798 4 439 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
Carrying amount 01.01 3 798 4 439 8 237
Additions 42 1 835 1 877
Depreciations -565 -1 561 -2 126
Depreciations in acquired companies -
Carrying value 31 of December 2022 3 275 4 713 7 988
Per 31. December 2022
Acquisition cost
6 534 17 577 24 111
Accumulated depreciation and write downs
-3 259 -12 864 -16 123
Carrying value
3 275 4 713 7 988
Useful life 20 years 3-7 years
Depreciation method Linear Linear
Page 43 of 83
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
Right-of-use assets Buildings
Machinery
and
e
quipment
Vehicles Total
Acquisition cost 1 January 2021 21 310 63 14 210 35 583
Addition of right-of-use assets 683 1 1 157 1 841
Transfers and reclassifications -591 - -1 040 -1 631
Acquisition cost 31 December 2021 21 402 64 14 327 35 793
Accumulated depreciation and impairment 1 January 2021 -9 600 -5 -9 289 -18 894
Depreciation -3 417 -22 -2 193 -5 632
Transfers and reclassifications 268 - 1 044 1 312
Accumulated depreciation and impairment 31 December 2021 -12 749
-27 -10 438 -23 214
Carrying amount of right-of-use assets 2021 8 652 37 3 888 12 576
Lower of remaining lease term og useful life 2-7 years 3 years 3-5 years
Depreciation method Linear Linear Linear
Right-of-use assets Buildings
Machinery
and
e
quipment
Vehicles Total
Acquisition cost 1 January 2022 21 402
64 14 327 35 793
Addition of right-of-use assets 1 175 - 2 798 3 973
Transfers and reclassifications - - -4 900 -4 900
Acquisition cost 31 December 2022 22 577 64 12 225 34 866
Accumulated depreciation and impairment 1 January 2022 -12 749 -27 -10 438 -23 214
Depreciation -3 744 -22 -2 458 -6 224
Transfers and reclassifications - - 4 351 4 351
Accumulated depreciation and impairment 31 December 2021 -16 493 -49 -8 545 -20 736
Carrying amount of right-of-use assets 2022 6 083 15 3 679 9 776
Lower of remaining lease term og useful life 2-7 years 3 years 3-5 years
Depreciation method Linear Linear Linear
Page 44 of 83
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 recognize 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 recognize 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.
Lease Liabilities
Lease liabilities
Summary of other lease expenses recognised in profit or loss
2022
2021
Operating expenses related to short-term leases (including short-term low value assets)
2 396
1 685
Total lease expenses included in other operating expenses
2 396 1 685
Page 45 of 83
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 -6 200
Summary of the lease liabilities in the financial statements
Total
At 01.01.2022 12 200
New lease liabilities recognised in the year 3 976
Cash payments for the principal portion of the lease liability -6 138
Cash payments for the interest portion of the lease liability -465
Interest expense on lease liabilities 465
Reassessment of the discount rate on previous lease liabilities -
Currency exchange differences -
Total lease liabilities at 31 December 2022 10 038
Current lease liabilities 6 140
Non-current lease liabilities 3 898
Total cash outflows for leases -6 603
Undiscounted lease liabilities and maturity of cash outflows
Total
Less than 1 year 6 140
1-2 years 3 067
2-5 years 394
More than 5 years -
Total undiscounted lease liabilities at 31 December 2022 9 601
Statement of:
Cash flows
Cash flows
Profit and loss
Profit and loss
Profit and loss and Other
Financial position
Financial position
Cash flows
Profit and loss
Profit and loss and Other
Profit and loss
Financial position
Financial position
Cash flows
Statement of:
Cash flows
Cash flows
Page 46 of 83
NOTE 10. ACQUISITIONS AND DIVESTMENTS
O
n the 30 of April 2020, Frigaard Bolig AS sold its shares in subsidiaries Höganloft Fastigheter AB,
which is located in Tranås in Sweden.
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.
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. On the first of April 2022 a total of MNOK
60.2 was received, where MNOK 26.6 was payment of the receivable and interest related to cover
building cost not covered by the construction loan, and MNOK 33.6 was related to the final settlement
from the sale of shares. There was a minor change to the estimate from 2020 to the final settlement
from gain from sale of shares of MNOK 2.8. The amount has been taken to account in 2022.
NOTE 11. INVENTORIES AND 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
2022 MNOK 14.8 have been capitalized, MNOK 9.5 in 2021.
MNOK 3.8 booked as other non-current liabilities, is related to the purchase price of Tindlund AS in
2022. The liabilities are a credit given by the sellers of the net assets.
All amounts in NOK thousand
2022
2021
Sites under development
Projects under construction 651 533 308 422
Unsold completed residential units 6 076 25 462
Total development properties 657 609 333 884
Other inventories 4 044 875
As at 31 December 661 653 334 759
Units under construction 190 31
Uns
old, or sold but not handed over at year end, completed units 1 6
Page 47 of 83
During 2022 the following sites have been purchased:
N
umber of units in the table above refers to the expected number of apartments to be built. The
acquisitions are regarded as acquisitions of net assets, and not business acquisitions.
Åsenveien Park AS is a newly established project company that has acquired a property for MNOK
18,6. The purpose of the company is to develop apartments.
Tindlund AS was bought at a cost of MNOK 3,75 for 50% of the company. The aim of the company is to
develop apartments. The joint control is exercised over the company, governed by an agreement.
Joint control requires unanimity among the participants on important decisions. Frigaard Property
Group uses the equity method to account for joint ventures, and the activities are included from the
date that joint control of the company commences and until the joint control ceases. The accounts of
joint ventures are adapted to IFRS, in keeping with Frigaard Property Group’s accounting policies,
before they are incorporated in Frigaard Property Group’s consolidated financial statements.
NOTE 12. TRADE RECEIVABLES AND CONTRACT BALANCES
T
rade 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:
Project Ownership
Purchase
price
NOK mill.
No. of
units
Åsenveien Park AS 100 % 18 551 156
Tindlund AS 50 % 3 750 100
All amounts in NOK thousand
31.12.2022 31.12.2021
Trade receivables
Receivables related to revenue from contracts with customers - external
172 917 113 538
Provision for bad debts
Total trade receivables 172 917 113 538
31.12.2022 31.12.2021
Receivables not due for payment 105 228 50 791
Less that 30 days since due date 1 322 54 272
30-60 days since due date 4 242 223
60-180 days since due date 13 176 3 771
More than 180 days since due date 48 949 4 481
Total 172 917 113 538
Page 48 of 83
Receivables that are overdue by more than 180 contain are related to two disputes, which take time
to resolve and which in some cases have to be resolved in a court of law. The group's trade
receivables are subject to the credit loss model, see note 2.11 for details.
Contract asset
Whereas trade receivable are invoiced receivables, contract assets represent a conditional right to
receive payment. Contract assets are recognized 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.
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 113 units (0), MNOK 55.3 (MNOK 0). 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 2022 (2021: MNOK 10). There
are no restrictions on the use of the credit facility.
31.12.2022 31.12.2021
Contract liabilities
As of 1 January
117 326 64 202
Advances received
116 867 117 326
Recognised as income during the year
-117 326 -64 202
Total contract liabilities 116 867 117 326
All amounts in NOK thousand
31.12.2022 31.12.2021
Cash and bank deposits 227 274 195 654
Restricted funds ("skattetrekkskonto") 10 476 13 514
Total cash and cash equivalents 237 750 209 168
31.12.2022 31.12.2021
Cash at banks and on hand 237 750 209 168
Overdraft facility 10 000 10 000
Page 49 of 83
P
roperty 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 31.12.2022.
Page 50 of 83
NOTE 14. NUMBER OF SHARES, SHAREHOLDERS ETC.
The shareholders at 31.12.22 are:
All issued shares have equal voting rights and the right to receive dividends.
Soland Invest AS owns FPG Invest AS, through its shares in Frigaard AS which is 100% owned by Trond
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 51 of 83
NOTE 15. INCOME TAX EXPENSE AND DEFERRED TAX
Deferred tax and deferred tax assets:
All amounts in NOK thousand
Income tax expense:
2022 2021
Current tax:
Tax payable
- -
Deferred tax
Total change in deferred tax
8 983 -158
Total deferred tax
8 983 -158
Other
15 -40
Tax expense
8 999 -197
2022 2021
Income taxes calculated at 22%
8 177 -1 173
Changes in unrecognised deferred tax asset
- -222
Non deductible expenses
1 386 1 431
Non-taxable income
-620 -
Other
56 -233
Tax expense
8 999 -197
Temporary differences
2022 2021 Change
Property, plant and equipment
-463 -71 -392
Right-of-use-assets
-260 373 -633
Non-completed construction contracts
162 173 122 869 39 304
Current items
-9 288 -6 010 -3 278
Tax losses carried forward
-9 804 -15 635 5 831
Basis for calculation deferred tax liabilitites
142 358 101 526 40 832
Net recognised deferred tax liabilities (asset if negativ amount)
31 319 22 336 8 983
Page 52 of 83
NOTE 16. NON-CURRENT LIABILITIES
I
n February 2021 FPG AS refinanced bonds at face value MNOK 300. Transactions cost related to the
bonds amounted to MNOK 5.4 and was included in amortized cost calculations. The existing bonds
mature in February 2024. Management is considering various refinancing options, including the option
to repay the bond fully or predominantly utilizing reserves or collateral available to the Group. Fair
value of the bonds as of 31.12.22 are estimated to be MNOK 279.9. 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.
Th
e 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 5.4% on
the construction loans, to a rate of 10.38% on the issued bonds.
S
ecured debts
All amounts in NOK thousand
2022 2021
Bonds 298 129 296 256
Construction loans (development projects) - 4 889
Loans from credit institutions 12 600 38 944
310 729 340 089
Repayment profile of loans from credit institutions Bonds
Construction
loans
Loans from
credit
institutions
Total
contractual
cashflow
Less than 1 year 23 443 284 935 40 383 348 761
Year 2 -4 308 115 - - 308 115
More than 5 years - - - -
Total 331 558 284 935 40 383 656 876
Debt secured by collateral
2022 2021
Bonds 298 129 296 256
278 448 4 889
51 430 38 944
628 007 340 089
Booked value of assets used as collateral
2022 2021
Development properties 657 609 333 884
Loans from credit institutions - non-current and current
Construction loans (development projects) - (current 2022)
Page 53 of 83
Shares in Frigaard Property Group and subsidiaries Metacon AS, Alento AS and Frigaard Bolig AS are
also used as collateral per 31.12.2022.
Reconciliation of liabilities arising from financing activities
Other transaction without cash settlements in the table above is in 2022 related to accrual of
borrowing cost of the bond loan from 2021, and new lease liabilities according to IFRS 16 recognized
in 2022, see note 9 for further information.
Financial
leasing
obligations
Total
Bond loan
Liabilities to
financial
institutions
Construction
loan
Leasing
liabilities
Liabilities 01.01.2021 298 565 25 059 62 857 16 334 402 815
-
Proceeds from construction loans 103 523 103 523
Repayment of construction loans -161 491 -161 491
Proceeds from the issuance of bonds 300 000 300 000
Payment of bonds -300 000 -300 000
Issue cost paid -5 465 -5 465
Proceeds from loans 14 000 14 000
Repayment of loans -115 -115
Repayment of lease liabilities -5 644 -5 644
Total transactions with cash settlements: -5 465 13 885 -57 968 -5 644 -55 192
Other transactions without cash settelments 3 156 1 510 4 666
Total transactions without cash settlement 3 156 - - 1 510 4 666
Liabilities 31.12.2021 296 256 38 944 4 889 12 200 352 289
Interest bearing liabilities - non current 296 256 38 944 4 889 6 985 347 074
Interest bearing liabilities -current 5 215 5 215
Liabilities 01.01.2022 296 256 38 944 4 889 12 200 352 289
-
Proceeds from construction loans 273 559 273 559
Proceeds from loans 12 600 - 12 600
Repayment of loans -114 -114
Repayment of lease liabilities -6 137 -6 137
Total transactions with cash settlements: - 12 486 273 559 -6 137 279 908
Other transactions without cash settelments 1 873 3 975 5 848
Total transactions without cash settlement 1 873 - - 3 975 5 848
Liabilities 31.12.2022 298 129 51 430 278 448 10 038 638 045
Interest bearing liabilities - non current 298 129 12 600 - 3 898 314 627
Interest bearing liabilities -current 38 830 278 448 6 140 323 418
Liabilities arising from financing activities
Financial liabilities
Page 54 of 83
Refinancing of existing bonds
A secured floating rate bond of NOK 300 million with 3-year tenor was issued in February 2021, to
refinance the senior secured bond which was maturing in June 2021 (FRIPRO01). 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.
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 20 for further information.
NOTE 17. OTHER SHORT-TERM LIABILITIES
See note 19 for more information on the warranty provisions.
All amounts in NOK thousand
2022 2021
Accrued salaries incl. holiday pay and social security
17 276 13 665
Interest expenses
4 498 3 389
Warrenty provision
8 884 8 3
96
Accrued expenses, property development operations
50 270 29 092
Accrued expenses, construction contracts 64 074 31
505
Accrued expenses, other
435 2 009
Total
145 437 88 056
Page 55 of 83
NOTE 18. FINANCIAL INSTRUMENTS
T
he carrying value of assets and liabilities can be broken down into the following categories:
F
inancial 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 amortized 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
2022
2021
Current
Trade receivables and other receivables 174 320 192 858
Cash and cash equivalents 237 750 209 168
Total financial assets 412 070 465 807
2022
2021
Non-Current
Bonds 298 129 296 256
Liabilitites to financial institutions 12 600 38 944
Construction loan - 4 889
Current
Bond loan current - -
Trade account payables 197 989 222 243
Total financial liabilities 508 718 679 658
Liabilities measured at amortized
cost
Assets measured at amortized cost
Page 56 of 83
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.
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.
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.
All amounts in NOK thousand
2022 2021
Warranty provision at 1 of January 8 396 8 136
+
new warranty provisions (additions) 7 133 6 619
- reversed warranty provisions (disposals) 6 645 3 759
- actual claims expenses (consumption) - 2 600
Warranty provision at 31 of December 8 884 8 396
All amounts in NOK thousand
2022
2021
Capital reduction (partial liquidation) to shareholders in FPG - -39 828
Frigaard Property Group AS's transactions with Soland Invest group companies
2022
2021
Managment fee - Soland Invest AS group 4 340
4 593
Income management services 882 849
Rental cost 617 593
Page 57 of 83
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 2022, Frigaard Property Group AS purchased legal services
from BAHR in connection with mainly potential acquisitions and equity transactions for TNOK 1 891.
NOTE 21. CLIMATE RISK
The group has assessed which climate risk we are exposed to. The assessment has been made with
regard to physical risk, regulatory risk and transition risk.
The physical risk linked to climate change could mean that the requirements for solidity in
construction work increase and thus also change the requirements for the products we use. Our
production of steel structures can easily be adapted to such developments.
Production of building materials such as steel and concrete (cement) are a significant source of CO2
emissions. Increasingly greater demands from regulatory authorities for a reduction in emissions must
be expected. This in turn can result in higher concrete prices. Where there are no clear alternatives to
concrete, there is reason to believe that increased production costs will also lead to increased prices
for the end user, which may have some effect on demand in certain segments. However, execution in
other building materials to a greater extent could then become a more attractive alternative.
Our assessment as of now is that the industry will manage to reduce emissions to such an extent that
concrete continues to be a preferred building material in many contexts.
When it comes to steel, it is expected that more and more stakeholders will demand a low CO2
footprint from steel structures. There are good alternatives here and the company has a good
overview of the energy sources of various steelworks, so that we can adapt our purchases to the
emission requirements we meet. We have experience in supplying "green" steel for larger projects
and have delivered projects according to the BREEAM standard, even "Excellent".
As of 31.12.22, none of the company's balance sheet items have been assessed differently than they
would otherwise have been as a result of climate risk.
Page 58 of 83
NOTE 22. EVENTS AFTER THE REPORTING DATE
Th
e demerger of Metacon AS and Frigaard Entreprenør AS was completed on the 28
th
of March 2023.
No other events have occurred after the balance sheet date which have had a material effect on the
issued accounts.
Ø
vre Lian Terrasse, Lier, Alento
Page 59 of 83
INCOME STATEMENT FRIGAARD PROPERTY GROUP AS (PARENT)
All amounts in NOK thousand Note 2022 2021
Other operating revenue 1 1 002 1 074
Personnel expenses 2 8 399 6 795
Depreciation of fixed assets 3,4 819 796
Other operating expenses 1,2,6 16 140 8 653
Total operating expenses 25 357 16 244
Operating profit -24 355 -15 170
Income from investments in subsidiaries 5 50 958 54 038
Interest income from group companies 6,7 16 814 10 974
Other interest income 7 508 5
Interest expense to group companies 6,7 -8 623 -4 254
Other interest expense 7 -26 732 -23 396
Other financial expenses 7 -2 125 -6 434
Profit before income tax 6 445 15 763
Income taxes 8 2 774 4 819
Net profit (-loss) for the year 3 671 10 944
Allocation of profit
Dividend from retained earnings - 30 000
To/from retained earnings 3 671 -19 056
Total 3 671 10 944
Page 60 of 83
STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP AS
All amounts in NOK thousand Note 2022 2021
ASSETS
Intangible assets
Intangible assets 4 102 127
D
eferred tax assets 8 - 2 348
Total intangible assets 102 2 475
Tangible assets
Equipment, fixtures and fittings 3 3 102 3 546
Machinery 3 19 34
Office equipment and similiar 3 735 1 028
Total tangible assets 3 856 4 608
Long term financial assets
Investments in subsidiaries 6, 10, 11 352 090 351 990
Loan to group companies 5 208 781 201 784
Total financial fixed assets 560 871 553 774
Total fixed assets 564 829 560 857
Current assets
Accounts receivables 5 809 907
Other short-term receivables 106 885
Group contribution receivables 5,8 50 958 5 843
Total receivables 51 872 7 635
Cash and cash equivalents 13 176 596 166 477
Total current assets 228 468 174 112
TOTAL ASSETS 793 298 734 969
Page 61 of 83
STATEMENT OF FINANCIAL POSITION FRIGAARD PROPERTY GROUP AS
All amounts in NOK thousand Note 2022 2021
EQU
ITY AND LIABILITIES
EQUITY
Paid-in capital
Share capital 12 467 467
Share premium reserve 122 583 122 583
Retained earnings 20 415 16 743
Total equity 9 143 464 139 793
LIABILITIES
Deferred tax 8 426 -
Total provisions 426 -
Bonds 14 298 129 296 256
Loan from group companies 5 342 337 292 201
Total of other long term liabilities 640 467 588 457
Current debt
Trade account payable 5 913 1 445
Public duties payable 453 407
Other short-term liabilities 7 574 4 867
Total current liabilities 8 941 6 719
Total liabilities 649 833 595 176
TOTAL EQUITY AND LIABILITIES 793 298 734 969
Dato og Signaturer skal inn
Page 62 of 83
STATEMENT OF CASH FLOWS FRIGAARD PROPERTY GROUP AS
All amounts in NOK thousand
2022 2021
Cash flow from operations
Profit before income taxes 6 445 15 763
Depreciation 819 796
Change in accounts receivable 99 -761
Change in accounts payable -532 529
Change in other provisions -37 960 4 449
Net cash flow from operations -31 129 20 776
Cash flow from investments
Purchase of fixed assets -42 -19
Purchase of intangible assets - -127
Repayment of loans to group companies 6 997- 75 581-
Dividend from subsidiaries - 36 000
Cash deposit, and adjustment purchase price shares in subsidiaries 100- 25 000-
Net cash flow from investments 7 139- 64 727-
Cash flow from financing
Proceeds from the issuance of bonds - 300 000
Payment related to bonds - 308 465-
Proceeds from liabilitites to group companies 42 544 278 181
Group contribution received 5 843 4 829
Repayment from capital reduction - 39 828-
Payment of dividend - 30 000-
Net cash flow from financing 48 387 204 717
Net change in cash and cash equivalents 10 119 160 767
Cash and cash equivalents at the beginning of the period 166 477 5 710
Cash and cash equivalents at the end of the period 176 596 166 477
Which consists of:
Cash 176 596 166 477
Page 63 of 83
ACCOUNTING PRINCIPLES
T
he 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.
Di
vidends, 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.
Page 64 of 83
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 RELATED PARTY TRANSACTIONS
NOTE 2 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.
Paid board remuneration during 2022, has been TNOK 720. See note 5 in the notes for the group for
further information.
No loans or guarantees have been given to any board members or other related parties.
Remuneration to senior employees is featured in note 2, and intercompany items are featured in note 5.
Transactions with related parties: 2022 2021
All amounts in NOK thousand
a) Interest income
- Companies in the same group 16 814 10 974
b) Interest expense
- Companies in the same group 8 623 4 254
c) Income management services
- Companies in the same group 1 002 1 074
c) Management/IT overhead costs
- Companies in the same group 4 838 5 283
Page 65 of 83
VAT is included in the fees specified above.
NOTE 3 EQUIPMENT AND MACHINERY
All amounts in NOK thousand
2022 2021
Salaries and holiday pay 7 143 5 477
S
ocial security 869 974
Pension costs defined contribution plans 174 136
Other personell costs 212 208
Total salaries and personnel expense 8 399 6 795
Number of average man labour 4 3
Management remuneration
Salaries and holiday pay 3 045
Social security 429
Pension costs defined contribution plans 54
Other personell costs 155
Expensed remuneration to the auditor 2022 2021
Audit fees 894 787
Tax advisory services - -
Other non-audit services - 23
Total 894 809
All amounts in NOK thousand
Equipment,
fixtures and
fittings
Machinery
Office equipment
and similiar
Carrying amount 01.01
3 990 48 1 347
Additions
- - 19
Depreciations
- 444 -14 - 338
Carrying value 31 of December 2021 3 546 34 1 028
Carrying amount 01.01
3 546 34 1 028
Additions
- - 42
Depreciations
-444 -14 -335
Carrying value 31 of December 2022 3 102 19 735
Lower of remaining lease term or economic life 3-5 years 5 years 2-5 years
Page 66 of 83
NOTE 4 INTANGIBLE ASSETS
NOTE 5 INTER-COMPANY ITEMS
NOTE 6 SUBSIDIARIES
T
he investments in subsidiaries are valued using the cost method.
Y
early impairment test of shares in subsidiaries has not indicated any events or changes in
circumstances that indicate that they might be impaired.
F
rigaard Entreprenør AS was founded on the seventh of July 2022.
Cost related strategic review of Alento of MNOK 6.5 is included in other operating cost.
All amounts in NOK thousand
2022 2021
Carrying amount 01.01
127 -
Additions
- 127
Depreciations
- 25 -
Carrying value 31 of December 102 127
Lower of remaining lease term or economic life 5 years
All amounts in NOK thousand
2022 2021 2022 2021 2022 2021
Companies in the same group 208 781 201 784 809 907 50 958 5 843
Sum 208 781 201 784 809 907 50 958 5 843
2022 2021 2022 2021
Companies in the same group 589 600 342 337 292 201
Sum 589 600 342 337 292 201
Other short-term receivables
Long-term receivables
Accounts receivables
Accounts payable
Long-term liabilities
All amounts in NOK thousand
Subsidiary
Frigaard Bolig AS Sarpsborg 100 % 61 206 -4 222 100
Metacon AS Sarpsborg 100 % 32 379 1 843 70 189
Frigaard Entreprenør AS Sarpsborg 100 % 100 - 100
Alento AS Drammen 100 % 102 347 74 957 281 701
352 090
Book value
Office
Ownership
Equity last year
Result last year
Book value
31.12.2022
Page 67 of 83
NOTE 7 FINANCE INCOME AND EXPENSES
All amounts in NOK thousand
Finance income
2022 2021
Interest income from group companies 16 814 10 974
Other interest income 508
5
Total finance income 17 322 10 979
Finance expenses
2021 2021
Interest expenses from group companies -8 623 -4 254
Interest expenses bond -26 732
-23 396
Other financial expenses -2 125 -6 434
Total finance expenses -37 480 -34 084
Page 68 of 83
NOTE 8 TAX
Calculation of deferred tax:
All amounts in NOK thousand
Timing differences: 2022 2021 Cha
nge
Fixed assets 65 209 144
Other differences 1 871 3 744 1 873
Net timing differences 1 936 3 953 2 017
Accumulated tax losses carried forward - -14 626 14 626
Basis for calulation of deferred tax 1 936 -10 672 -
8 100
Deferred tax (22 % ) 426 -2 348 -2 774
Deferred tax liability (-asset) 426 -2 348 -2 774
Taxable income: 2022 2021
Profit before taxes 6 445 15 763
Permanent differences 6 163 180
Change in timing differences 2 017 -2 220
Group contribution received - taxable - 29 156
Received dividend - -23 195
Dividend - -
Change of tax losses carried forward -14 626 -19 685
-
Income tax expense: 2022 2 021
Tax payable - -
Total tax payable - -
Changes in deferred tax assets 2 774 4 819
Tax expense 2 774 4 819
Reconciliation of tax expense:
Profit before taxes 6 445 15 763
Income taxes calculated at 22% 1 418 3 468
Tax expense in the income statement 2 774 4 819
Difference -1 356 -1 351
Tax effect of permanent differences -1 356 -40
Tax on group contributions - -6 414
Dividend - 5 103
Explained difference -1 356 -1 351
Basis for tax expense, change in deferred tax and tax payable
Taxable income
-
Page 69 of 83
NOTE 9 EQUITY
A
ll amounts in NOK thousand
NOTE 10 SECURED DEBTS
NOTE 11 GUARANTEES
A
t December 2022 Frigaard Property Group AS has provided guarantees for its subsidiaries totaling
approximately MNOK 205 in connection with specific construction and property development projects
for group companies.
Share capital
Share premium
reserve
Retained
earnings
Total equity
Equity as at 01.01.2022 467 122 583 16 743 139 793
Profit for the period - - 3 672 3 672
Equity as at 31.12.2022 467 122 583 20 415 143 464
All amounts in NOK thousand
Debt secured by collateral
2022 2021
Bond 300 000 300 000
Total 300 000 300 000
Booked value of asset used as collateral
2022 2021
Shares in subsidiaries 352 090 351 990
Total 352 090 351 990
Page 70 of 83
NOTE 12 TOTAL SHARES, SHAREHOLDERS ETC.
T
he 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 shareholders at 31.12.2022
T
he company is part of the group Soland Invest AS, org. no. 987 521 465, with offices in Sarpsborg.
S
oland Invest AS prepares consolidated financial statements, which can be accessed at the company's
offices at Sandesundsveien 2, 1724 Sarpsborg, Norway.
NOTE 13 RESTRICTED FUNDS
NOTE 14 LIABILITIES
Al
l amounts in NOK thousand
Th
e company's bond is netted against the bond's set-up costs. These costs are depreciated over the
lifetime of the bond. On the 10 of February 2021, the process of refinancing the bond of MNOK 300
was finalized. A 3-year NOK denominated secured floating rate bond was issued. The listed bond is
Number of
shares
Ownership
interest
FPG Invest AS
197 826 84,76 %
Heti Holding AS
18 348 7,86 %
Elo AS
5 128 2,20 %
Longfarm AS
3 077 1,32 %
OVRE INVEST AS
769 0,33 %
Metacon Holding AS
8 260 3,54 %
Total 233 408 100,00 %
Trond Frigaard
Kristian Lindland, CEO Alento AS
Simon Martinsen, CEO Frigaard
Tony Øvrevik, CEO Metacon AS
Owned by
All amounts in NOK thousand
2022 2021
Restricted payroll tax obligations 325 282
Restricted bank depostits - -
Total 325 28
2
2022 2021
Long-term debt with maturity in excess of 5 years
- -
2022 2021
Bond debt, face value
300 000 300 000
Initial bond costs
-1 871 -3 744
Total 298 129 296 256
Page 71 of 83
due February 10, 2024, less than 12 months from the issuance of this report.
Management is considering various refinancing options, including the option to repay the bond fully or
predominantly utilizing reserves or collateral available to the Group. See Board of directors report for
further information.
PricewaterhouseCoopers AS, Dronning Eufemias gate 71, Postboks 748 Sentrum, NO-0106 Oslo
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Frigaard Property Group AS
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Frigaard Property Group AS, which comprise:
• the financial statements of the parent company Frigaard Property Group AS (the Company),
which comprise the statement of financial position as at 31 December 2022, the income
statement and statement of cash flows for the year then ended, and notes to the financial
statements, including a summary of significant accounting policies, and
• the consolidated financial statements of Frigaard Property Group AS and its subsidiaries (the
Group), which comprise the statement of financial position as at 31 December 2022, the
income statement, statement of comprehensive income, statement of changes in equity and
statement of cashflow for the year then ended, and notes to the financial statements, including
a summary of significant accounting policies.
In our opinion
• the financial statements comply with applicable statutory requirements,
• the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s Responsibilities for the
Audit of the Financial Statements section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ International Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 13 years from the election by the general meeting of the
shareholders on 21 September 2010 for the accounting year 2010.
2 / 6
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters. The Group’s business activities are largely
unchanged compared to last year. We have not identified regulatory changes, transactions or other
events that qualified as new key audit matters. Recognition of revenue from construction contracts and
Valuation of goodwill have the same characteristics and risks this year as the previous year and
consequently have been areas of focus also for the 2022 audit.
Key Audit Matters
How our audit addressed the Key Audit Matter
Recognition of revenue from
construction contracts
Revenue from construction contracts amounts
to NOK 1 475 612 thousand in 2022.
For recognition of revenue from construction
contracts, the percentage of completion
method is used. Stage of contract completion
is based on contract costs incurred compared
to total estimated contract costs. The
assessment of estimated contract costs,
including impact of disputes and guarantee
work and the stage of contract completion,
represents critical accounting estimates and
judgements.
Accounting for contract revenue was key to
our audit for several reasons. The Group has
a number of construction contracts, some of
which can be long lasting. The estimation of
total contract costs and percentage of
completion can be complex and subject
to management judgement. Application of
Management judgement has a material
impact on several financial statement line
items, such as revenue from construction
contracts, contract assets and contract
liabilities.
We refer to notes 2 and 4 for more information
about constructions contracts and how
management assesses contract completion.
For a selection of construction contracts, we
compared the Group’s use of the percentage of
completion method, to the requirements of IFRS
15. We found that the applied accounting
principles were in accordance with IFRS 15.
Determination of total estimated construction cost
and stage of contract completion involves use of
judgement by the project manager and
management. We challenged management's
estimated total construction cost for a sample of
contracts based on reported project status, on-site
visits and interviews of project managers. We
challenged project managers and management
about assumptions in their estimates. We also
analysed and assessed management’s
consistency in exercise of judgment across
different projects and over time. For two on-site
visits we assessed consistency between incurred
costs and actual delivered materials and services.
We concluded that management’s use of
judgements was reasonable.
We tested the reconciliation of construction
contract project accounts to the general ledger. To
test the contract revenue applied to the calculation
and corresponding recognition of revenue from
construction contracts, we reviewed a sample of
contracts and variation orders. We also tested, on
a sample basis, the accuracy of the calculated and
recognised contract revenues and related contract
assets based on calculated contract completion.
Further, we performed substantive procedures to
obtain supporting evidence for costs incurred and
allocation to the individual construction contracts.
3 / 6
We also performed procedures to test the
completeness of recognised contract cost.
Our testing did not reveal material deviations.
We read the disclosures in notes 2 and 4 and
found that the disclosures were in accordance with
IFRS requirements and reflected the construction
contracts in progress.
Valuation of goodwill
Goodwill amounts to NOK 284 019 thousand
on 31 December 2022 and is material to the
financial statements.
Valuation of goodwill, and the corresponding
impairment test was key to our audit because
of the amounts involved and the effect it
would have on the financial statements if an
impairment should have been recognized.
Further, an impairment test is prone to an
inherent risk of error due to its complexity and
the required level of management judgement
related to assumptions such as future revenue
and cost.
We refer to note 2 and note 7 where
management explain their impairment testing
and the rationale for the assumption
substantiating the value of goodwill.
We obtained and reviewed the Group’s impairment
assessment. The impairment assessment
comprises identifying cash generating units
(CGU’s) and key assumptions made by
management. We assessed and found that the
valuation model, which was based on discounted
future cash flows, contained the elements required
by IFRS. We also tested whether the model made
mathematical calculations as expected.
We challenged management’s use of assumptions
on future revenue and costs. This was done by
comparing the data in the model to historical
financial data, budgets approved by management
and other market information such as benchmarks
for growth. We also assessed historical accuracy
by comparing last year's expectations for revenue
to what was achieved in the financial year. We
found that they compared reasonably well.
We compared the discount rate to empirical data
and expectations of future interest rates, risk
premium and debt ratio. We found the used
discount rate to be reasonable.
We read the disclosures in notes 2 and 7 and
found that the information regarding the valuation
model, the assumptions applied, including the
discount rate, was adequate.
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon. Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsistency between the Board of Directors’ report and the other
4 / 6
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
• is consistent with the financial statements and
• contains the information required by applicable statutory requirements.
Our opinion on the Board of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with the Norwegian Accounting Act and accounting standards and practices generally
accepted in Norway, and for the preparation and true and fair view of the consolidated financial
statements of the Group in accordance with International Financial Reporting Standards as adopted
by the EU, and for such internal control as management determines is necessary to enable the
preparation of financial statements that are free from material misstatement, whether due to fraud or
error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern. The financial statements of the Company use the going concern basis of accounting insofar
as it is not likely that the enterprise will cease operations. The consolidated financial statements of the
Group use the going concern basis of accounting unless management either intends to liquidate the
Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
• identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
• obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
5 / 6
opinion on the effectiveness of the Company's and the Group's internal control.
• evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
• conclude on the appropriateness of management’s use of the going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
• evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
• obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
6 / 6
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Frigaard Property Group AS, we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name 254900PADEO0LU7JL270-2022-12-31-en, have
been prepared, in all material respects, in compliance with the requirements of the Commission
Delegated Regulation (EU) 2019/815 on the European Single Electronic Format (ESEF Regulation)
and regulation pursuant to Section 5-5 of the Norwegian Securities Trading Act, which includes
requirements related to the preparation of the annual report in XHTML format, and iXBRL tagging of
the consolidated financial statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see: https://revisorforeningen.no/revisjonsberetninger
Oslo, 25 April 2023
PricewaterhouseCoopers AS
Sjur Holseter
State Authorised Public Accountant
Page | 78 of 74
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
Page 79 of 83
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 2022 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.
Shareholders, through the General
Meeting of shareholders
External Auditors
Board of Directors
Audit Committee
CEO and Group Management Team
Construction
Property Development
Page 80 of 83
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 organizational structure
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 organizational 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 2022
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 2022 the Board held 5 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’ 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 25.04.2022. 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.
Page 81 of 83
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.
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 recognizes 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 decentralized 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 organization.
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.
Page 82 of 83
DIRECTORS’ RESPONSIBILITY STATEMENT
T
oday, 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 2022.
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 2022. 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 of 31
December 2022. 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 2022.
To the best of our knowledge:
The consolidated and separate annual financial statements for 2022 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 2022.
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.
Dato og signatur skal inn
Page 83 of 83
F
rigaard Property Group AS - Private Limited Company
Domicile in Sarpsborg, Viken county, Norway
S
andesundsveien 2
1724 Sarpsborg
Norway
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