1 | Consolidated financial statements 2021, Navamedic ASA
Annual report 2021
Navamedic ASA
2 | Annual report 2021, Navamedic ASA
Contents
Highlights for 2021 ............................................................................................................................................................. 3
Key figures .......................................................................................................................................................................... 3
Comment from the CEO ..................................................................................................................................................... 4
Navamedic – a Nordic pharma company with high growth ambitions ........................................................................... 5
Directors’ report 2021 ........................................................................................................................................................ 6
Corporate governance ..................................................................................................................................................... 19
Consolidated financial statements 2021 ......................................................................................................................... 27
Parent Company Navamedic ASA, annual financial statements 2021 ........................................................................... 70
Explanatory notes to the annual financial statements 2021 .......................................................................................... 76
Statement from the board and CEO ................................................................................................................................ 87
Auditor’s report ................................................................................................................................................................ 90
Alternative Performance Measures (APMs) ..................................................................................................................... 96
3 | Annual report 2021, Navamedic ASA
Highlights for 2021
• Increased revenues by 32.7% to NOK 278.4 million (NOK 209.9 million)
with an EBITDA of NOK 18.2 million (negative NOK 1.3 million) driven
by accelerated growth for specialty pharma products and strong
performance for the antibiotics portfolio.
• Gross margin improved to 40.1% (33.5%) due to favorable product mix
and successful initiatives related to reduction in cost of goods sold
throughout 2021.
• Strengthened the company’s portfolio and offering across product categories. Obesity patient support
program launched in Norway and extended exclusive distribution rights for Mysimba® in the Nordics.
• Continued strong performance for specialty pharma product Mysimba® and consumer health products
ThermaCare® and Alflorex®. Launched new products to strengthen the medical nutrition and consumer
health categories, and the company will launch new products in at least one country in each launch
window going forward.
• In 2021, Navamedic has also continued to strengthen the core by driving underlying growth in the existing
portfolio and continued our push for growth of key products in our markets. This will be key as Navamedic
embark 2022 and continue to launch new products and continue to grow its existing portfolio.
• Navamedic has also increased focus on products in the gastro category, a largely underdeveloped product
area in the Nordics. The main product in this category has been Alflorex, but the company recently
announced the launch of Smectago® and Forlax®, which will strengthen Navamedic’s position in the gastro
product category.
• Going forward, Navamedic is targeting 20% annual growth with a mid-term ambition of building a 500
MNOK company through organic growth with a gross margin of 40% and an EBITDA margin of 15%.
Key figures
(in NOK '1000) 2021 2020
Total revenue
278,439 209,
877
Gross profit *
111,744 70,
339
Operating profit before Depreciation and Amortization (EBITDA)
18,171 -
1,267
Operating profit (EBIT)
11,455 -
4,926
Profit before tax continuing operations
2,358 -
16,596
Net profit / loss (-) continuing operations
618 -
16,460
Net profit / loss (-) Total operations
618 -
16,460
Total assets
330,179 260,
038
Total equity
151,237 129,
486
Gross margin (%) *
40.1 % 33.
5 %
EBITDA margin (%) *
6.5 % -
0.6 %
Equity ratio (%) *
45.8 % 49.
8 %
* Alternative performance measures (APMs)
4 | Annual report 2021, Navamedic ASA
Comment from the CEO
2021 has been an eventful year for Navamedic. We
have continued to build on our solid foundation and
strengthened the core by driving underlying growth
in the existing portfolio. We have launched several
new products and will continue to launch new
products in at least one country in each launch
window going forward. We will push for continued
growth of the key products in our markets. We target
20% annual growth and have a mid-term ambition of
building a 500 MNOK company through organic
growth, with strong gross margins and underlying
profitability. Yes, 2021 was solid, but the journey has
just begun!
During the year, we have strengthened our position
in the Nordic healthcare market. We have an
ambitious growth strategy with a high-potential
pipeline and M&A capabilities. As a reliable supplier
of high-quality consumer health, medical nutrition,
specialty pharma and branded generics products,
delivered to hospitals and through pharmacies, we
have seen increased demand for our portfolio of
products. We seek to build on this momentum as we
embark on 2022.
Even though 2021 was a good year for Navamedic,
the COVID-19 pandemic continued to impact our
societies and markets. Navamedic has monitored the
situation closely and worked to limit effects on
supply and demand. Furthermore, maintaining a safe
and healthy working environment is critical to us,
and the well-being of our employees and their
families is our first priority. I am proud to see the
effort our employees have shown during these
difficult circumstances.
Key growth drivers both in terms of revenue and
profits during 2021 continued to be specialty
pharma, and the obesity product Mysimba® in
particular. The specialty pharma portfolio grew 90%
year-over-year. In 2021, Navamedic extended the
exclusive distribution rights for Mysimba® in the
Nordics, and we launched MyControl in Norway, an
obesity patient support program over 16 weeks. The
program was launched in Norway following a
successful launch in Sweden in 2020.
At the same time, we continue to see good effect on
our investments in the consumer health portfolio. We
see gastro as an area of great future potential, and
our product Alflorex® is a key growth driver. Nearly
half of the population suffer from some gastro
related problems each year, but only 20% of those
suffering from such conditions seek treatment. Going
forward, we aim to execute on our ambitious plans
for new product launches in the Nordics, and early in
2022 we launched two new gastro related products,
SmectaGO® and Forlax®.
Navamedic ended 2021 with a record-breaking fourth
quarter. As we approach 2022, I am proud to say that
we are following our strategy to build a leading
Nordic pharma company. We have already launched
new products, and we continue to expand our
portfolio of quality products in growing key
categories. We have a highly motivated and
competent team, and we are executing on our
pipeline of opportunities to increase and secure
value through M&A. We are also happy to have
engaged and committed shareholders, joining us on
the next stage of our journey. I am certainly looking
forward to the road ahead, as we seek to drive our
business to the next level.
Kathrine Gamborg
Andreassen
Chief Executive Officer
5 | Annual report 2021, Navamedic ASA
Navamedic – a Nordic pharma company with high growth
ambitions
As a Nordic pharma company with a footprint in Northern
Europe, Navamedic is a reliable supplier of high-quality
consumer health, medical nutrition, specialty pharma and
branded generics products, delivered to hospitals and through
pharmacies. The product portfolio consists of prescription and
non-prescription pharmaceuticals, as well as other healthcare
registered products.
The company has 30 highly qualified employees with strong
competence in regulatory affairs, quality assurance,
reimbursement, marketing and sales. Thus, the company is a
full-service provider securing market access through its local competence and hence is a preferred Nordic partner
for many international players. Navamedic’s headquarter is located in Oslo, Norway, and the company has been
listed on the Oslo Stock Exchange (ticker: NAVA) since 2006.
The ambition of becoming a leading Nordic pharma company will be achieved through three main pillars:
Navamedic seeks to strengthen the core by untapping the potential within existing products and territories.
Furthermore, the company will secure and increase the value through ownership and develop new brands. Third,
Navamedic plan to grow through M&A, building on existing M&A capabilities and track record to broaden the
categories or geographical territory.
6 | Annual report 2021, Navamedic ASA
Directors’ report 2021
7 | Annual report 2021, Navamedic ASA
Group’s result for the year
In 2021, the Group reported revenues of NOK 278.4 million, up from NOK 209.9 million in 2020, representing an
increase of 32.7%, mainly driven by growth in the specialty pharma and consumer health product categories.
The EBITDA in 2021 was NOK 18.2 million, compared to negative NOK 1.3 million in 2020. The EBITDA development
is mainly driven by successful growth initiatives and reduction in cost of goods sold.
The operating result (EBIT) in 2021 was NOK 11.5 million, compared to negative NOK 4.9 million in 2020. Net
financials were negative NOK 5.9 million in 2021, compared to negative NOK 7.1 million last year. The result before
tax was NOK 2.4 million in 2021, up from negative NOK 16.6 million in 2020.
The result after tax was NOK 0.6 million in 2021, compared to negative NOK 16.5 million last year.
The total comprehensive income was NOK 1.0 million in 2021, compared to negative NOK 7.6 million in 2020.
Group’s cash flow 2021
The Group had a net cash flow from operating activities in 2021 of negative NOK 1.3 million, compared to negative
NOK 3.2 million in 2020. Changes in inventory contributed negatively this period, while changes in other current
items contributed positively. Net cash from investing activities ended at negative NOK 0.7 million in 2021,
compared to negative NOK 23.1 million in 2020. The net cash flow from financing activities was NOK 15.9 million in
2021, compared to NOK 51.8 million in 2020. The positive cash flow from financing activities in 2021 was mainly due
to an increase in bank loans. The cash and cash equivalents were NOK 52.6 million at 31 December 2021, compared
to NOK 39.6 million at 31 December 2020.
The company’s financial position as
of 31 December 2021
The Group’s consolidated total assets were NOK 330.2 million at 31
December 2021, up from NOK 260.0 million at year-end 2020. Non-
current assets were NOK 124.7 million, down from NOK 142.2 million.
Current assets increased to NOK 205.5 million from NOK 117.8
million at 31 December 2020. The decrease in non-current assets is
mainly related to loans to associated company (Observe Medical
ASA) in 2020, while the increase in current assets is related to the
increased inventory, cash in hand and current loans to associated
companies.
Non-current liabilities are NOK 53.0 million per 31 December 2021,
an increase from NOK 25.1 million at 31 December 2020. At the end of
2021, Navamedic had an equity of NOK 151.2 million, compared to
NOK 129.5 million per 31 December 2020, representing an equity ratio of 45.8%. The increased equity is mainly due
to share premium from ACS share issue (antibiotics portfolio acquisition) in Q1 2021.
8 | Annual report 2021, Navamedic ASA
The Group had current liabilities of NOK 126.0 million compared to NOK 105.5 million at 31 December 2020. The
increase is mainly related to trade payables being up from last year.
9 | Annual report 2021, Navamedic ASA
Sustainability and corporate responsibility
Environmental, Social and Governance (ESG) means
to run the business in a responsible and sustainable
manner over time, and in a way that contributes to a
positive, trust-based relationship between
Navamedic, Navamedic’s stakeholders and society as
a whole. Profitable and sustainable growth is part of
Navamadic’s DNA. Our existing and future customers
and stakeholders expect Navamedic to operate with
high ethical standards.
The company’s code of conduct (the “Code”) sets the
standard for what is expected in terms of business
and personal conduct from each of the employees of
Navamedic. The Code sets our expectations,
commitments, and requirements for ethical conduct.
The Code applies to everyone working for or
representing the company in any form, irrespective
of the nature of the contract the relation is based on.
This includes, but is not limited to, employees, the
management, board of directors, or any hired
contractors. The Code has been approved by
Navamedic’s board of directors and covers key topics
such as business ethics and anti-corruption, working
environment, and environment and climate.
Navamedic is following the European Federation of
Pharmaceutical Industries and Associations (EFPIA)
Disclosure Code. Collaboration between the industry,
patient organizations, healthcare professionals, and
governments is critical to shape the future of
research and development, inform regulatory
decision-making and optimize the use of medicines
in the patient pathway. Transparency is critical to
these relationships, and EFPIA and its member
companies have continued to drive greater
transparency through support for the mandatory
registration of lobbying organizations on the EU
transparency register. Furthermore, the members
work with the implementation of the disclosure
provisions in the EFPIA Code, which require public
disclosure of financial support to patient
organizations across Europe.
Business ethics and anti-corruption
Navamedic is committed to ethical operations. The
company complies with the laws of the countries in
which it operates and runs its business operations in
line with nationally and internationally recognized
principles and guidelines for human and labor rights.
All employees and board members shall refrain from
corruption and bribery in all forms, as described in
the company’s Code.
Navamedic refuses to tolerate any form of corruption
in its day-to-day work or in relation to business
contacts. The company has guidelines for all
employees on accepting gifts, benefits, or other
tokens of appreciation. All employees are responsible
for understanding and identifying possible conflicts
of interest, and they have been informed about their
responsibilities in such cases. Navamedic’s CEO bears
the ultimate responsibility for the enforcement of the
guidelines of the company regarding business ethics.
Furthermore, Navamedic places great emphasis on
cooperating with business partners that promote
high standards of good business practice. Before
signing contracts with partners and suppliers,
Navamedic carries out evaluations on issues relating
to anti-corruption and business ethics. The company
actively communicates with business partners and
suppliers about anti-corruption policies and
procedures.
Based on an assessment of the company's size,
nature of its business, and available management
resources, the company deems the established
policies, procedures and guidelines appropriate for
fulfilling its corporate social responsibilities and
preventing corruption. In the opinion of the board,
the company exercises good control in this area. Any
need for additional guidelines will be assessed on an
ongoing basis as the company grows and develops.
10 | Annual report 2021, Navamedic ASA
All employees are encouraged to report internally if
they are concerned about the group's integrity or
identify breaches of laws and regulations.
Whistleblowing can take place confidentially if so
desired, and the company cannot impose negative
sanctions on the whistle- blower, irrespective of
whether the whistle-blowing is genuine.
There incidents of corruption were uncovered in 2021.
Navamedic and our employees have not taken part in
any legal cases regarding corruption in the reporting
period.
Working environment
All employees shall contribute to achieving
Navamedic’s vision of minimizing harm to people,
the environment and society, as defined in the Code.
Navamedic’s employees are key stakeholders that
are directly affected by the company’s operations
and business success. Maintaining a safe and healthy
working environment is a key priority for Navamedic,
and the ability to attract and retain skilled workers is
critical to the company. Navamedic can impact the
working environment through the guidelines, and by
dialogue with the employees. The company seeks to
have an open-door policy, meaning all employees
should have short access to the management of
Navamedic. The working environment is generally
satisfactory, and all employees are encouraged to
actively contribute with their opinions on how the
working environment can be improved.
Equal employment opportunities and diversity are
topics with increasing expectations for transparency
and corporate action. Navamedic strives to continue
to be a responsible employer that does not
discriminate and that assesses all employees on an
equal basis with respect to career opportunities and
rights, regardless of gender, ethnicity, disability, or
sexual orientation. Navamedic wants to achieve a
balance between the genders. The group's
management team in 2021 consisted of six members,
two of whom are women. The board of directors
consisted of five members during 2021, two of whom
are women.
Navamedic’s policies regarding health and safety are
outlined in the company’s Code. Navamedic
continuously seek to improve the health and safety
at the offices in which it operates. There were no
serious incidents that resulted in personal injuries or
absences in 2021. Nor was there any damage to
property or equipment reported. The sick leave rate
was 5.5% in 2021, compared with 1.8% in 2020. The
group continuously aim to protect and improve
health and safety in its operations.
Environmental impact
With local presence in the Nordics, the Baltics, the
Netherlands and Greece, Navamedic takes pride in
the company’s great relationship with the national
authorities, healthcare professionals, hospital
purchasing organizations and pharmacy chains.
Despite many similarities across the northern
European region, the various nations have distinctly
different local market conditions and dynamics. Our
strength is the detailed knowledge and experience of
the key to success in each country.
The Code states that Navamedic shall seek to reduce
the company’s environmental impact. Reducing both
Navamedic’s and the customers’ impact on the
environment is an important focus for the company
and the board, and it will become even more
important in the future. Navamedic has taken
significant steps to ensure continuous improvement
of the company’s environmental focus. Through
implementing a new Environmental Management
System program, the company has become ISO
14001 certified during 2021. The company maintains
a continuous focus on minimizing its negative
11 | Annual report 2021, Navamedic ASA
environmental impact through routines for reducing
paper and energy consumption, increasing the
efficiency of waste sorting, increasing recycling and
the reuse of electronic waste, as well as limiting
travel activities. The board considers Navamedic’s
operations to have an overall positive effect on the
global environment.
As the world is facing great environmental
challenges, we take our impact on the environment
seriously. We see it as our responsibility to help the
ongoing negative course to change. Navamedic will
comply with all applicable environmental laws and
regulations as we work to limit emissions and
consumption of energy from our operations. As a
reliable supplier of high-quality products, delivered
to hospitals and through pharmacies, Navamedic’s
main sources of environmental and climate
emissions are emissions from employee business
travel and indirect emissions from our leased offices
such as electricity and waste handling.
12 | Consolidated financial statements 2021, Navamedic ASA
Going concern
The annual financial statements have been prepared on the assumption that the company is a going concern. The
board confirms that the basis for the company as a going concern exists and bases its opinion on the company and
the group’s financial positions, the agreements that have been signed with both suppliers and customers, expected
cash flows in 2022, and the company's financial liabilities. Due consideration has also been given to possible
negative future impacts of the Covid-19 pandemic and the world’s geopolitical situation in the assessment
supporting the going concern assumption.
Risk factors
The operational and financial risks Navamedic is exposed to differ little from what could be considered normal risks
in the distribution of pharmaceuticals in that the company is not directly exposed to the risk of the development
and production of their products.
The Group's operations expose it to various types of financial risk: Market risk (including operational risk, currency
risk, interest rate risk, and price risk), credit risk, and liquidity risk.
The Group is exposed to operational risk. The Group believes that such risk will primarily arise in relation to the
development of future sales of the company's products, measured in terms of both price and volume. Factors that
can influence market risk include increased competition, out of stock-situations at its suppliers, price reductions
and competition from existing and future pharmaceuticals within the company's range of therapies.
The company depends on supply and distribution from suppliers. The company has supply and distribution
agreements with suppliers in which the term of the agreement varies from one to eight years. The company is
dependent on renewing these agreements at market prices and on market terms and conditions and is therefore in
continuous dialogue with the suppliers to ensure they are renewed at favorable terms.
There is a risk that some of the company's products may face competition from new products as well as generic
products. The risk of this can be reduced by a more diversified and broader portfolio of products.
Financial risk mainly consists of interest-, currency-, credit- and liquidity risks. Navamedic continuously monitors
these factors and actively manages risk through commercial operations and other measures to reduce these risks.
As at 31 December 2021, the company considered the group’s liquidity to be satisfactory.
The interest rate risk is primarily linked to the group's liquidity, and interest rates may affect the group's borrowings
and deposits. Thus far, the group has not entered into any types of hedging arrangements in order to reduce
interest rate risks. The company's interest rates on bank deposits and short-term liquidity investments are floating.
Interest rates on external loans as well as loans to associated company is fixed.
In 2021, a substantial portion of the group’s revenue and the majority of salaries and other operating expenses were
in NOK, SEK, DKK and EUR. Materials are generally paid for in EUR, GBP, SEK and USD. Net investments in foreign
subsidiaries are exposed to currency risk in SEK. The board assesses the company's need for currency hedging on
an ongoing basis but has currently not introduced specific hedging strategies beyond natural hedging and specific
assessments in larger agreements.
13 | Annual report 2021, Navamedic ASA
Navamedic trades with deemed creditworthy third parties and generally sells its products to major actors such as
pharmacy chains and wholesalers, as well as public health sectors and hospitals.
Trade receivables are continuously monitored, and the risk of incurring losses is generally regarded as low.
The Covid-19 outbreak has implied risk with regards to supply chain and sourcing of products and a risk related to
Navamedic’s employees becoming infected and consequently may not being able to carry out their work and
functions as required. The company has initiated its business continuity plan to secure all key areas of operations.
Furthermore, the company’s operations and results have shown over the last two years with Covid 19 that it is less
vulnerable to severe negative effects of Covid 19 than most other companies and industries.
The war in Ukraine does not directly affect Navamedic as the company has no suppliers, customers or other
business relations in Ukraine nor Russia. However, the imbalances and instability in global markets may pose a risk
to our business in case our supply chains, our production partners or logistics providers are disturbed.
Consequences may be delayed transport and increased freight cost.
Organization
The group had 30 employees at the end of 2021, compared to 30 at the end of 2020.
In accordance with the Norwegian Public Limited Liability Companies Act, the board has prepared a declaration
concerning pay and other benefits for executive personnel, which is included in note 16.
Navamedic ASA has taken out board liability insurance for the group’s Board of Directors and CEO. The insurance
covers financial claims against the Board members or CEO that may arise as a result of actions taken by the Board
or CEO. The insurance policy is with a reputable firm and it applies to Navamedic ASA as well as all of it’s
subsidiaries.
Corporate governance
Navamedic generally complies with the Norwegian Code of Practice for Corporate Governance (NUES), which was
last revised on 14 October 2021. Please see the special section of the annual report for the company's corporate
governance report.
The share
The Navamedic share has been listed on the Oslo Stock Exchange since 2006 with the ticker NAVA. As at 31
December 2021, the company had 16.345.660 outstanding shares, each with a nominal value of NOK 0.74 per share,
and 876 shareholders.
14 | Annual report 2021, Navamedic ASA
Parent company
Internal support and shared services have been organized in the parent company, Navamedic ASA, in areas where
substantial economies of scale and synergies can be realized. The parent company has a master agreement on
royalties from its subsidiary Navamedic AB. The parent company holds the rights to various products that are resold
by the subsidiaries and thereby earns royalties. The royalties are based on actual sales in Navamedic AB. Service
fees are charged out to subsidiaries covering costs for strategic development, marketing, logistics and purchasing
management, as well as financial and accounting management. In addition, the parent company has activities
relating to insurance, systems development and operations and other operating activities that are performed on
behalf of its subsidiaries, which are also charged out.
The operating revenue in Navamedic ASA of NOK 45.3 million in 2021, compared to 30.8 million in 2020. Total
operating expenses increased to NOK 52.0 million in 2021 from NOK 39.6 million in 2020.
Net financial items amounted to NOK 3.5 million in 2021, compared to negative NOK 8.5 million in 2020. The change
mainly relates to currency translation differences.
Equity amounted to NOK 145.7 million, an increase from 128.2 in 2020.
Disposal of net result for the year and dividends
The parent company’s result after tax for 2021 was negative NOK 3.3 million. The board proposes that the net result
for the year be transferred to and covered by other equity. The board also proposes no dividends to Navamedic
ASA's shareholders for 2021.
Subsequent events
On 16 February 2022, Navamedic announced the launch of SmectaGO[®] for sale through pharmacies in Norway,
Sweden, Finland and Denmark this spring. SmectaGO[®] is a unique product developed to treat acute and chronic
diarrhea in adults and children above 8 years. The launch is part of a long-term agreement with the well-known
French pharmaceutical corporation Ipsen Consumer HealthCare wherein Navamedic has been appointed the
exclusive partner in the Nordics.
Navamedic was as of 31.12.2021 one of the largest shareholders in Observe Medical ASA with an ownership share of
21.54%. As publicly announced by Observe Medical ASA on January 14, 2022, the company acquired Biim
Ultrasound and performed a rights issue and a following share issue to fund the transaction. Navamedic opted not
to participate in the issue, consequently Navamedic’s ownership in Observe Medical ASA is of the publication of this
report reduced to 7.89%.
15 | Annual report 2021, Navamedic ASA
Outlook
Navamedic has the goal of becoming a leading pharmaceutical company in Northern Europe. Growth shall be
achieved through developing the existing product portfolio, licensing new products and through acquisitions.
We see major potential for including more products in the existing distribution platform in the Nordic region, Baltic
States and the Benelux countries. With a well-functioning system of logistics and distribution, as well as skilled
salespeople who regularly meet with hospitals, specialists, general practitioners and pharmacies, we have the
strength to launch new prescription and non-prescription pharmaceuticals.
The company will also actively work to build and retain value through ownership and further development of
assets, both short- and long-term. Through licensing rights and developing and purchasing products, the company
will increase its share of pharmaceuticals that we ourselves own the marketing rights and trademarks to. The
company has solid expertise and capacity within this field and is in the process of building up its portfolio of
potential products to be launched in the coming years. If the conditions are right, we will also consider further
merger and acquisition options.
Based on the growth strategy and outlook, the board of Navamedic expects that the company will continue the
positive development in 2022 and show solid growth in the coming years. Navamedic’s financial targets are 20%
annual growth with a mid-term ambition of building a 500 MNOK company through organic growth with a gross
margin of 40% and an EBITDA margin of 15%.
Responsibility Statement
We confirm, to the best of our knowledge, that the condensed set of interim consolidated financial statements for
2021, give a true and fair view of the company’s assets, liabilities, financial position, and results of operation, and
that the report provides a fair overview of the information specified in Section 5-6, fourth paragraph of the
Norwegian Securities Trading Act.
16 | Annual report 2021, Navamedic ASA
The Board of Directors and CEO of Navamedic ASA
Oslo, 28 April 2022
Chairman
Board member
Board member
Board member
Board member
CEO
17 | Annual report 2021, Navamedic ASA
The Management Team and Board
Management Team
Kathrine Gamborg Andreassen
CEO
Kathrine was appointed CEO of Navamedic in January 2019 and has
extensive experience from sales, marketing, and management of
healthcare products. Before she was appointed CEO, Katrine was elected
as Chair of the Board in June 2018. Kathrine held the position of CEO at
Weifa ASA until the company was acquired by Karo Pharma AB in
November 2017. Ms Gamborg Andreassen holds an MSc in Business
Strategy & Marketing from the University of Wisconsin, Madison and a
Bachelor of Business and Administration from Oslo School of Business
Lars Hjarrand
CFO
Lars joined Navamedic in December 2019. Prior to joining Navamedic Mr
Hjarrand has extensive finance experience from several different
companies and industries over the past 20 years. Mr Hjarrand holds a
bachelor’s degree in economics from University of Minnesota and an MBA
in Finance from the Carlson School of Management.
Board of Directors
Terje Bakken
Chair of the Board
Terje is a partner at Reiten & Co. He has solid investor experience through
leading and implementing various strategic and operational value-based
processes, across different industries, combined with considerable
financial transaction and finance experience. Mr Bakken holds a Master of
Science in Financial Economics and Bachelor of Business and
Administration degrees from BI Norwegian Business School. Mr Bakken
currently sits on the Board of Directors of Observe Medical ASA (Chairman
of the Board), QuestBack Group AS (Chairman of the Board) and Tivian Inc.
(Chairman of the Board).
18 | Annual report 2021, Navamedic ASA
Jostein Davidsen
Board Member
Jostein has more than 30 years' experience from the international
pharmaceutical industry, including managerial positions at Nycomed and
Takeda Pharmaceuticals and as CEO of the Swiss company Acino
Pharmaceuticals.
Inger Johanne Solhaug
Board Member
Inger Johanne has extensive experience from the FMCG sector and has
held leading positions at Orkla for 20 years. Among other things, she has
served as a member of the executive management team at Orkla and was
CEO of Nidar. Ms. Solhaug holds a Master of Business and Economics
degree from the Norwegian School of Economics and is currently
Business
Development Director at Insula AS.
Narve Reiten
Board Member
Narve is the founder of Reiten & Co and has extensive investment and
operational experience in the Nordic market. Mr Reiten holds a Master of
Business and Economics degree from the BI Norwegian Business School
and is a Certified Financial Analyst (CFA) from the Norwegian School of
Economics and Business Administration.
Annika Kollén
Board Member
Annika has 20 years of experience in the Pharma industry in various
Supply Chain Management positions such as Nordic lead at Novartis and
Global head of Supply Chain at Sobi. At Inceptua she holds the position as
EVP Global Supply Chain and Operations and is part of the management
team.
19 | Annual report 2021, Navamedic ASA
Corporate governance
20 | Annual report 2021, Navamedic ASA
Implementation and reporting on corporate governance
The board of Navamedic has adopted guidelines for corporate governance in Navamedic ASA.
The board has stipulated guidelines for ethics and corporate social responsibility that apply to all companies in the
Navamedic Group. The guidelines clarify the ethical values and standards for corporate social responsibility upon
which the group's and the employees' work shall be based.
Business
Navamedic's business and purpose are described in article 3 of the articles of association, which reads:
"The company's business is to develop, produce, market, and sell pharmaceuticals and related products, perform
consultancy services in connection with this, and invest in related activities."
The company’s goals and main strategies are described on the company's website. Its vision, goals, and core values
are set out in the company's guidelines for corporate governance and guidelines for ethics and corporate social
responsibility.
Navamedic also has active risk management to ensure value creation for shareholders and safeguard societal
interests in general.
The company's vision is that the business, as it is described in the articles of association, shall be run in a
sustainable manner.
Equity and dividends
Capital structure
Navamedic's registered share capital amounts to NOK 12,095,788 divided into 16,345,660 shares, each with a
nominal value of NOK 0.74. As at 31 December 2021, equity amounted to NOK 151,237 million, which results in an
equity ratio of 45.8%.
Dividends
Navamedic's dividend policy is established by the board through the guidelines for corporate governance. Each
year, in connection with the preparation of the annual financial statements, the board assesses the company's need
for capital in the coming period. Based on this assessment, the board issues its recommendation concerning
dividends to the general meeting with the explicit goals of ensuring the company's strategy is implemented and
providing optimal value creation for the company's shareholders.
The board has presented a proposal not to pay a dividend for 2021.
Board authorisations
In an extraordinary general meeting held on 11 March 2020 the board of directors was granted an authorization to
increase the company's share capital by up to NOK 1,170,000 in order to issue consideration shares for a portion of
21 | Annual report 2021, Navamedic ASA
the purchase price under the agreement entered into with ACS Dobfar and InfoRLife as announced by the company
in a stock exchange announcement dated 4 August 2020. The board of directors of Navamedic resolved on 4
January 2021 to settle the first tranche of the purchase price under the agreement for an amount of NOK 19 million
by issuance of 1,053,775 new shares to InfoRLife. The subscription price for the consideration shares issued to
InfoRLife was NOK 18.0304.
The annual general meeting on 3 June 2021 gave an authorization to the board to increase the share capital with up
to NOK 1,000,000 (equaling to approximately 8% of the company's share capital at the time) related to the
company's long-term share incentive program as approved by the annual general meeting on 3 June 2020. This
authorization replaced the previous authorization to increase the share capital by NOK 850,000 and it is effective
until the annual meeting in 2023 but not longer than 3 June 2023.
In the annual general meeting, the board was also granted authorization to increase the company share capital by
up to NOK 2,420,000, replacing the previous authorization of up to NOK 2,200,000 granted in the general meeting on
3 June 2020.
Equal treatment of shareholders and transactions with close
associates
The company has one class of share and each share in the company has one vote. The company owned none of its
own shares as at 31 December 2021.
Pursuant to the Norwegian Code of Practice for Corporate Governance, companies should have guidelines that
ensure that board members and executive personnel report to the board if they have, direct or indirect, significant
interests in an agreement entered into by the company.
In the case of members of the board of Navamedic, this is explicitly set out in the rules of procedure for the board.
The company's guidelines for ethics and corporate social responsibility, which apply to all employees and board
members in the group, contain guidelines on handling potential conflicts of interest.
The guidelines also stipulate that Navamedic's employees and board members should avoid having ownership
interests or board positions in other enterprises if these could be deemed likely to weaken the loyalty to
Navamedic. Pursuant to the guidelines, questions concerning board members' and executive personnel's board
positions in companies that compete with Navamedic or that are business contacts of Navamedic, must always be
clarified with the board of Navamedic.
Shares and negotiability
Pursuant to the Norwegian Code of Practice for Corporate Governance, the articles of association should not
stipulate any restrictions on ownership.
The articles of association contain no restrictions on the negotiability of shares. Navamedic ASA is listed on the Oslo
Stock Exchange. Navamedic also actively strives to increase the interest in the company to attract new investors.
22 | Annual report 2021, Navamedic ASA
General meetings
Navamedic held its annual general meeting on 3 June 2021.
The notice was sent prior to the 21 days deadline and contained descriptions of the items on the agenda and the
board's proposed resolutions. The supporting documentation was prepared with the aim of enabling shareholders
to arrive at a view concerning the items on the agenda. The registration deadline was set at three days before the
general meetings, in accordance with the provision in the company's articles of association. The notices described
the procedures for taking part in and casting votes at the general meetings, as well as attendance by proxy.
The proxy forms were designed such that votes could, to the extent possible, be cast concerning each item on the
agenda. In the proxy form a person was also proposed to act as a proxy for the shareholders.
The chairman of the board attended the annual general meeting in 2021. The company's external auditor was also
present at the meeting. The extraordinary general meeting in 2021 was chaired by Terje Bakken.
Minutes of general meetings were published and made available under the company's ticker on Newsweb and on
the company's website www.navamedic.com shortly after the meetings.
Nomination committee
The company established a nomination committee at the annual general meeting on 8 June 2015. The nomination
committee consists of chairman Bernt Olav Røttingsnes, members Bård Brath Ingerø and Grete Hogstad. At the
annual general meeting on 3 June 2021, all members of the nomination committee were re-elected with term
ending on the annual general meeting 2022.
The board, composition and independence
The board of Navamedic has five ordinary members, all of whom are elected by the shareholders. The board
members and chairman of the board are elected by the general meeting. No board members are elected for terms
of more than two years at time. None of the company's board members have any special interests that prevent
them from acting independently.
The company's annual report contains information about the board members' relevant experience, and current
position. The board members have varied experience from industries such as pharmaceuticals, finance,
acquisitions and mergers, industry, and marketing. This experience was gained both in Norwegian and
internationally in both companies and public enterprises.
It is Navamedic's opinion that, as a corporate body, the board safeguards the best interests of the shareholders as a
group. This is based on the board's qualifications, capacity and diversity in relation to the business Navamedic
operates.
23 | Annual report 2021, Navamedic ASA
In the opinion of the board, it is desirable for board members to own shares in the company, but no formalized
encouragement to own shares in the company exists. Chairman of the board Terje Bakken and board member
Narve Reiten have significant ownership in Ingerø Reiten Investment Company, Navamedic’s largest shareholder.
No Navamedic executive personnel sits on the company's board of directors.
The work of the board of directors
The board bears overarching responsibility for the management of the company and supervision of the day- to-day
management and the company's operations. Its main duties consist of formulating the company's strategy and
following up the implementation of this strategy. The board also performs control functions that ensure the
company's asset management is prudent. The board appoints the CEO.
Pursuant to the provisions of Norwegian company law, the board has stipulated rules of procedure for the board
that provide detailed rules for the board's functions, duties, and responsibilities.
The board has a policy that board members and executive personnel must inform the company of any significant
interests they may have in matters that are to be addressed by the board.
The board has an annual plan for its work that particularly focuses on goals, strategy, and implementation. The
chairman of the board is responsible for ensuring that the board's work is executed effectively and correctly in
accordance with the law. For matters in which the chairman of the board is, or has been, actively involved, another
board member is nominated to chair the discussion such that the company is assured an independent process.
A clear division of work between the board and executive personnel has been established. The CEO is responsible
for the company's operational management.
The board holds a minimum of six board meetings a year, one of which is a strategy meeting. Extraordinary board
meetings are held as required to consider matters that cannot wait until the next ordinary board meeting.
16 formal board meetings were held in 2021, and the duties of the board were also addressed through updates via
telephone conferences, with and without the management team present.
The board has established an audit committee as a sub-committee to the board. Special rules of procedure have
been set out for this committee. The audit committee consists of two board members who are independent of the
company's day-to-day management team.
The board has also established an M&A committee as a sub-committee to the board. The M&A committee consists
of two board members, both of whom are independent of the company’s daily operations.
The board has the objective of conducting an annual evaluation of its work, working methods, and qualifications. A
similar evaluation is also conducted of the CEO.
24 | Annual report 2021, Navamedic ASA
Risk management and internal control
The board's supervision must ensure that the company has good internal control routines and appropriate systems
for risk management which corresponds with the scope and nature of the business being operated, including the
company's values and guidelines for ethics and corporate social responsibility. The audit committee has particular
responsibility for monitoring risk management and internal control.
Navamedic is a relatively small company with a small management team, and with limited capacity. However, while
the company's size and operations are not especially extensive, there are several aspects and requirements of
operating in the industry that requires robust routines related to internal control. The company has established
routines to ensure satisfactory internal control and risk management and in 2021 the company implemented a new
ERP system and processes which have resulted in improved internal control.
The board will ensure that routines for internal control and risk management are developed on an ongoing basis as
the scope of the company's operations increases.
As part of its auditing services, the external auditor assesses whether there are any material weaknesses in the
internal control for financial reporting. The auditor takes part in the audit committee meetings as well as board
meetings in connection with the annual accounts.
The management team emphasizes establishing good control routines in those areas that are of material
importance for financial reporting. The control routines are based on an authorization structure that defines roles
and responsibilities for each level of management, as well as guidelines for how one should ensure good internal
control, including satisfactory routines related to division of duties.
The board receives regular financial reports in which the company's economic and financial status is commented
on. The company complies with the Oslo Stock Exchange's deadlines for interim reporting. The company has
chosen not to issue interim reports from and including the fourth quarter of 2017 in accordance with IAS 34, instead
it prepares and publishes a presentation for the quarter.
Accounting problems are analyzed immediately, and the auditor is consulted if required. An overview of relevant
questions is presented to the board in connection with the publication of interim presentations and half-year and
annual reports.
Remuneration of the board of directors
The board's remuneration is agreed each year by the general meeting. The board's remuneration is independent of
the company's results and board members do not have options in the company.
Information about the board's remuneration for 2021 is included in note 16 to the financial statements. No board
members have special duties in relation to the company beyond their board position and participation in the audit
committee and M&A committee.
25 | Annual report 2021, Navamedic ASA
Remuneration of executive personnel
In 2021, the board set out guidelines for the remuneration of executive personnel in accordance with the provisions
of the Norwegian Public Limited Liability Companies Act.
The board's statement on executive pay is included in the annual report and considered by the general meeting in
accordance with the Public Limited Liability Companies Act. No subsequent changes have been made to these
guidelines.
The board's statement on executive pay was approved by the general meeting on 3 June 2021.
Procedures and authorizations for determining the remuneration of the corporate management team are governed
by the company's rules of procedure for the board.
The rules of procedure for the board and the board's statement on executive pay stipulate that all schemes that
include the awarding of shares, subscription rights, options, and other forms of remuneration linked to shares or
the development of the share price, must be established by the company's general meeting.
The setting of the CEO's salary for 2021 was approved by the board and information about the remuneration of the
CEO and other executive personnel in 2021 can be found in note 16 to the consolidated annual financial statements.
Before determining the pay of the management team, a comparison is made with equivalent positions in
companies outside the group.
As of 2021 there are new requirements for reporting remuneration of executive personnel. This report can be found
on the company’s web page Navamedic.com.
Information and communication
Navamedic's information and communication policies are presented in the company's guidelines for corporate
governance. The guidelines are based on the principle of the equal treatment of market actors and cover financial
reporting and investor relations.
Navamedic will provide the market with accurate, consistent, and relevant information. Half-year reports and
interim presentations for the Oslo Stock Exchange are published in English only.
According to the company's guidelines for corporate governance, the board must ensure that interim presentations
issued by the company provide a true and complete picture of the group's financial and business positions, as well
as the extent to which the company's operational and strategic goals are achieved.
The Norwegian Code of Practice for Corporate Governance recommends that the board establishes guidelines for
the company's contact with shareholders outside the general meeting. Navamedic's guidelines for contact with the
shareholders are published on the company's website.
Navamedic's communication with shareholders is based on the principle that all owners should have equal access
to the information. Navamedic arranges public investor presentations in connection with the publication of half-
26 | Annual report 2021, Navamedic ASA
year reports and interim presentations. In these, the results are reviewed, and the development of the market and
the company's outlook are commented on.
As a minimum, the CEO and CFO take part in the presentations. For 2022, Navamedic will present interim
presentations, as well as publish a half-year report and an annual report.
Take-overs
The company's guidelines for corporate governance stipulate that in the event of potential take-overs or
restructuring situations, the board shall exercise particular care such that the assets and interests of all
shareholders are safeguarded.
The guidelines for corporate governance at Navamedic also stipulate that the Norwegian Code of Practice for
Corporate Governance must be followed, and the board will follow the more detailed recommendations in this
document if a potential take-over situation arises.
No take-over offers were presented to Navamedic or its shareholders in 2021.
Auditor
The company’s external auditor is EY. The auditor attends board meetings in connection with the annual financial
statements and most audit committee meetings. At least one meeting a year is held between the auditor and board
without the CEO or other member of the company’s executive management present.
The auditor presents an audit plan for the audit committee each year. According to the company's guidelines for
corporate governance, the auditor shall each year provide the board with written confirmation that they comply
with the requirements for independence and objectivity. The guidelines also stipulate that services from the auditor
beyond the mandatory audit and closely related advice must only be provided following a decision by the board or
audit committee.
27 | Annual report 2021, Navamedic ASA
Consolidated financial
statements 2021
Navamedic ASA
28 | Consolidated financial statements 2021, Navamedic ASA
Consolidated statement of comprehensive income
29 | Consolidated financial statements 2021, Navamedic ASA
Consolidated statement of financial position
(in NOK '1000) Note 31.12.2021 31.12.2020
Assets
Non-current assets
Intangible non-current assets
Goodwill 8 61 031 64 472
Deferred tax assets 24 9 168 9 168
Other intangible assets 8 27 342 9 689
Total intangible non-current assets 97 541 83 330
Other non-current assets
Property, plant & equipment 7 745 174
Right of use assets 9 7 567 1 903
Shares in associated companies 18 18 837 22 022
Non-current loans to associated companies 18 0 34 821
Total other non-current assets 27 149 58 919
Total non-current assets 124 690 142 249
Current assets
Tax receivables 26 15 652 7 614
Inventories 11 61 882 41 945
Trade and other receivables 10 37 730 28 646
Current loans to associated companies 18 37 606 0
Cash and cash equivalents 19 52 620 39 584
Total current assets 205 489 117 789
Total assets 330 179 260 038
30 | Consolidated financial statements 2021, Navamedic ASA
Consolidated statement of financial position (cont.)
(in NOK '1000) Note 31.12.2021 31.12.2020
Equity
Paid in equity
Share capital 12 096 11 316
Share premium reserve 165 830 147 610
Total paid in equity 13 177 926 158 926
Retained earnings
Retained earnings -26 689 -29 441
Total retained earnings -26 689 -29 441
Total equity 151 237 129 486
Liabilities
Non-current liabilities
Non-current license liabilities 21 8 171 3 343
Non-current liabilities to financial institutions 20 29 235 20 870
Non-current right of use liabilities 9 5 824 842
Total non-current liabilities 43 231 25 055
Current liabilities
Trade account payables 14 70 532 66 956
Current liabilities to financial institutions 20 9 745 0
Current right of use liabilities 9 1 839 1 078
Current license liabilities 21 13 158 16 500
Taxes payable 26 10 713 2 795
Other current liabilities 14 29 724 18 168
Total current liabilities 135 712 105 497
Total liabilities 178 943 130 552
Total equity and liabilities 330 179 260 038
31 | Consolidated financial statements 2021, Navamedic ASA
The Board of Directors and CEO of Navamedic ASA
Oslo, 28 April 2022
Chairman
Board member
Board member
Board member
Board member
CEO
32 | Consolidated financial statements 2021, Navamedic ASA
Consolidated statement of changes in equity
Correction opening balance in 2020 is due to a deviation between opening balance group share premium reserve
and parent company share premium reserve.
(in NOK '1000)
Share capital
Share premium
Retained
Total
Balance as at 1 January 2020 8 782 66 037 4 411 79 231
Correction opening balance 23 659 -23 659 0
Net profit / loss (-) -16 460 -16 460
Currency translation differences 8 867 8 867
Capital increase 2 534 57 914 -4 765 55 682
Share options 2 166 2 166
Balance as at 31 December 2020 11 316 147 610 -29 441 129 486
Balance as at 1 January 2021 11 316 147 610 -29 441 129 486
Net profit / loss (-) 618 618
Currency translations differences 348 348
Capital increase
780 18 220
19 000
Share options 1 784 1 784
Balance as at 31 December 2021 12 096 165 830 -26 689 151 237
33 | Consolidated financial statements 2021, Navamedic ASA
Consolidated cash flow statement
34 | Consolidated financial statements 2021, Navamedic ASA
Notes to the consolidated
financial statements
35 | Consolidated financial statements 2021, Navamedic ASA
Note 1 – General
information
Navamedic ASA is a Nordic pharma company with a footprint in Northern Europe listed on the Oslo
Stock Exchange. The company is a reliable supplier of high-quality products, delivered to hospitals
and through pharmacies, meeting the specific medical needs of patients and consumers.
The product portfolio consists of prescription and non-prescription pharmaceuticals as well as other healthcare
products registered as medical nutrition, medical devices, food supplements or cosmetics.
Navamedic is present in all Nordic countries, the Baltics and Benelux and has sales of specific products even in
other European countries like UK and Greece.
Through its subsidiary Navamedic AB, the group distributes more than 40 products from 20 international producers
and brand owners in the European market.
Navamedic’s ambition is to grow by expanding its product portfolio and launching existing products in new
markets.
Navamedic ASA is registered and based in Norway. Its head office is at Solli Plass in Oslo. Its postal address is Henrik
Ibsens gate 100, 0255 Oslo, Norway.
Note 2 – Summary of signficant accounting policies
The most important accounting policies used in the preparation of the consolidated financial
statements are described below. These policies are applied consistently in all of the periods
presented, unless the description states otherwise.
2.1 Framework for preparation of the financial statements
Navamedic's consolidated financial statements have been prepared in accordance with international accounting
standards and interpretations from the IFRS Interpretations Committee (IFRIC), as established by the EU (IFRS).
The consolidated financial statements have been prepared on the basis of historical cost.
The consolidated financial statements have been prepared by applying the same accounting policies to
transactions and events that would be similar under otherwise equal conditions.
The accounting policies applied, and the presentation of the consolidated financial information are consistent with
the previous annual financial statements for the year that ended 31 December 2020.
The consolidated financial statements have been prepared on the assumption that the group is a going concern.
2.2 Consolidation policies
A subsidiary is a company over which Navamedic ASA (directly or indirectly) has control. Control is attained when
Navamedic is exposed to, or has rights to, variable returns from its engagement in a company in which it has
invested and is able to influence this return by exercising power over the company. Power means existing rights
36 | Consolidated financial statements 2021, Navamedic ASA
that currently provide Navamedic with the ability to steer relevant activities, i.e. the activities that affect, to a
significant degree, the return from the company that has been invested in. All subsidiaries are owned 100% and
there are no minority interests.
Subsidiaries are consolidated from the date when the group attains control and consolidation ceases when control
of the subsidiary ceases.
The acquisition method is used for acquisitions of business. The consideration is measured at the fair value of the
assets transferred, liabilities assumed,
and equity instruments issued. The fair value of all assets or liabilities according to the agreement on contingent
consideration is also included in the remuneration. Identifiable assets, liabilities, and contingent liabilities are
recognized at their fair value on the acquisition date.
Acquisitions-related costs linked business combinations are recognized as expenses when they are incurred.
Contingent consideration is measured at fair value on the acquisition date. Subsequent changes in the fair value of
contingent consideration classified as an asset or liability and that are not adjustments during the measurement
period must be recognized through profit or loss.
If the sum of the remuneration, fair value of earlier assets, and any fair value of minority interests exceeds the fair
value of identifiable net assets in the acquired company, the difference is capitalized as goodwill. If the sum is lower
than the company's net assets, the difference is recognized through profit or loss.
Intra-group revenue, expenses, and balances are eliminated. The gain and loss elements in a capitalized asset that
arose due to an intra-group transaction are also eliminated. The accounts of subsidiaries are, if necessary, restated
so they correspond with the group's accounting policies.
2.3 Segment information
Navamedic identifies its segments according to the organization and reporting structure as decided and followed
up by the chief operating decision maker. Operating segments are components of a business that are evaluated
regularly by the chief operating decision maker, defined as the CEO, for the purpose of assessing performance and
allocating resources. Navamedic operating segments represent separately managed business areas with unique
products serving different markets. Navamedic currently has only one business segment which is the Pharma
division.
2.4 Translation of foreign currency
a) Functional currency and presentation currency
The accounts of the individual units in the group are measured in the currency that is mainly used in the
economic area in which the unit operates (functional currency). The consolidated financial statements are
presented in NOK, which is both the parent company's functional currency and its presentation currency.
b) Transactions and balance sheet items
Transactions in foreign currency are translated to the functional currency using the transaction's exchange
rate. Realized currency gains and losses that arise during the settlement and translation of monetary items
37 | Consolidated financial statements 2021, Navamedic ASA
in foreign currency at the exchange rate on the balance sheet date are recognized through profit or loss.
Currency gains and losses are presented (net) as financial income or financial expenses.
c) Group companies
The income statements and balance sheets of group companies with functional currencies different from
the presentation currency are translated in the following way:
a) balance sheets are translated using the exchange rate on the balance sheet date
b) income statements are translated using the average exchange rate for the year
c) translation differences are recognized in other comprehensive income and specified in equity as a
separate item
Goodwill and excess values upon the acquisition of a foreign unit are treated as assets and liabilities in the acquired
unit and translated at the exchange rate on the balance sheet date. Translation differences that arise are
recognized in other comprehensive income.
2.5 Intangible assets
All intangible assets are recognized at cost less accumulated amortization and impairments. Cost includes
expenditure that is directly attributable to the acquisition of the assets. Subsequent costs are included in the assets
carrying amount or recognized as a separate asset.
The group’s intangible assets consist of the following:
a) Licenses (product rights) and marketing authorizations
Navamedic holds rights to market and sell specific products in defined geographical areas. Investments
related to such licenses are amortized on a straight-line basis over their expected useful economic life,
which typically range between five to ten years.
Navamedic further distributes a number of products through wholesalers on behalf of rights holders.
Investments related to obtaining such marketing authorizations are amortized on a straight-line basis over
their expected useful economic life, which typically range between five to ten years. For products that are
under registration, the amortization of the cost of acquisition commences upon launch and is amortized
over the period of the agreement.
b) Other intangible assets
Navamedic invests in information technology assets intended to products and marketing. Furthermore,
investments in licenses and marketing authorizations where the products in question have not yet been
launched due to regulatory or other reasons, are classified as other intangible assets until launch.
2.6 Impairment of non-financial assets
At each reporting date, the Group reviews the carrying amounts of its non-financial assets (other than inventories,
contract assets and deferred tax assets) to determine whether there is any indication of impairment. If any such
indication exists, then the asset’s recoverable amount is estimated. Goodwill is tested annually for impairment.
38 | Consolidated financial statements 2021, Navamedic ASA
For impairment testing, assets are grouped together into the smallest group of assets that generates cash inflows
from continuing use that are largely independent of the cash inflows of other assets or CGUs. Goodwill arising from
a business combination is allocated to CGUs or groups of CGUs that are expected to benefit from the synergies of
the combination.
The recoverable amount of an asset or CGU is the greater of its value in use and its fair value less costs to sell. Value
in use is based on the estimated future cash flows, discounted to their present value using a pre-tax discount rate
that reflects current market assessments of the time value of money and the risks specific to the asset or CGU.
An impairment is recognized if the carrying amount of an asset or CGU exceeds its recoverable amount.
Impairment is recognized in profit or loss. They are allocated first to reduce the carrying amount of any goodwill
allocated to the CGU, and then to reduce the carrying value of the other assets in the CGU on a pro rata basis.
An impairment in respect of goodwill is not reversed. For other assets, an impairment is reversed only to the extent
that the asset’s carrying value does not exceed the carrying value that would have been determined, net of
depreciation or amortization, if no impairment had been recognized.
2.7 Inventories
Inventories are measured at the lowest of acquisition cost and net realizable value. Acquisition cost is calculated
using the first-in, first-out method (FIFO). Net realizable value is the estimated selling price less cost of sale.
2.8 Financial assets
The group currently has financial assets within the following category:
a) Financial assets at amortized cost
Financial assets at amortized cost are non-derivative financial assets with fixed or determinable payments
that are not quoted in an active market. They are included in current assets, except for maturities greater
than 12 months after the end of the reporting period. These are classified as non-current assets. The
group’s financial assets at amortized cost primarily consist of trade receivables and other receivables, loan
receivables and bank deposits. Financial assets at amortized cost are initially recognized at fair value,
transaction costs are added to the carrying amount. Financial assets at amortized cost are subsequently
carried at amortized cost.
2.9 Trade receivables
Trade receivables arise from sales of goods or services within the ordinary business cycle. If settlement is expected
within one year or less (or in the ordinary business cycle if this is longer), the receivables are classified as current
assets. If this is not the case, the receivables are classified as non-current receivables.
Trade receivables are measured at the transaction price upon initial recognition. In subsequent measurements,
trade receivables are measured at amortized cost less provisions for expected credit losses.
For trade receivables and contract assets, the Group applies a simplified approach in calculating expected credit
losses (ECLs). Therefore, the Group does not track changes in credit risk, but instead recognizes a loss allowance
based on lifetime ECLs at each reporting date. The Group has established a provision matrix that is based on its
historical credit loss experience, adjusted for forward-looking factors specific to the debtors and the economic
environment.
39 | Consolidated financial statements 2021, Navamedic ASA
The group has entered into a trade receivable financing agreement with Avida Finans AB.
2.10 Cash and cash equivalents
Cash and cash equivalents consist of cash and bank deposits which are readily convertible into cash within a 3-
month period.
2.11 Financial liabilities
The group currently has financial liabilities within the following category:
a) Financial liabilities at amortized cost
Financial liabilities at amortized cost are liabilities that represent a contractual obligation to deliver cash
and are classified as current or non-current based on whether the estimated settlement date is less than or
more than 12 months in the future. The group’s financial liabilities at amortized cost consist of interest-
bearing liabilities in the form of overdraft facilities and instalment loans, licensing liabilities, trade account
payables and other non-interest-bearing liabilities. Financial liabilities at amortized cost are initially
recognized at fair value net of directly attributable transaction costs, and subsequently measured at
amortized costs applying the effective interest method.
2.12 Income Tax
Income tax expense comprises current and deferred tax. It is recognized in profit or loss except to the extent that it
relates to a business combination, or items recognized directly in equity or in other comprehensive income. The
Group has determined that interest and penalties related to income taxes, including uncertain tax treatments, do
not meet the definition of income taxes, and therefore accounted for them under IAS 37 Provisions, Contingent
Liabilities and Contingent Assets.
a) Current tax
Current tax comprises the expected tax payable or receivable on the taxable income or loss for the year and
any adjustment to the tax payable or receivable in respect of previous years. The amount of current tax
payable or receivable is the best estimate of the tax amount expected to be paid or received that reflects
uncertainty related to income taxes, if any. It is measured using tax rates enacted or substantively enacted
at the reporting date. Current tax also includes any tax arising from dividends. Current tax assets and
liabilities are offset only if certain criteria are met.
b) Deferred tax
Deferred tax is recognized in respect of temporary differences between the carrying amounts of assets and
liabilities for financial reporting purposes and the amounts used for taxation purposes.
Deferred tax is not recognized for:
– temporary differences on the initial recognition of assets or liabilities in a transaction that is not a
business combination and that affects neither accounting nor taxable profit or loss;
– temporary differences related to investments in subsidiaries, associates and joint arrangements to
the extent that the Group is able to control the timing of the reversal of the temporary differences
and it is probable that they will not reverse in the foreseeable future; and
40 | Consolidated financial statements 2021, Navamedic ASA
– taxable temporary differences arising on the initial recognition of goodwill.
Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary
differences to the extent that convincing evidence exists that future taxable profits will be available
against which they can be used. Future taxable profits are determined based on the reversal of
relevant taxable temporary differences. If the amount of taxable temporary differences is insufficient
to recognize a deferred tax asset in full, then future taxable profits, adjusted for reversals of existing
temporary differences, are considered, based on the business plans for individual subsidiaries in the
Group. Deferred tax assets are reviewed at each reporting date and are reduced to the extent that
convincing evidence no longer that the related tax benefit will be realized; such reductions are
reversed when the probability of future taxable profits improves.
Unrecognized deferred tax assets are reassessed at each reporting date and recognized to the extent
convincing evidence that future taxable profits will be available against which they can be used.
Deferred tax is measured at the tax rates expected to be applied to temporary differences when they
reverse, using tax rates enacted or substantively enacted at the reporting date, and reflects
uncertainty related to income taxes, if any.
The measurement of deferred tax reflects the tax consequences that would follow from the manner in
which the Group expects, at the reporting date, to recover or settle the carrying amount of its assets
and liabilities.
Deferred tax assets and liabilities are offset only if certain criteria are met.
2.13 Employee benefits
a) Pensions
The company has entered into a mandatory defined contribution pension scheme for employees in Norway
and Sweden. Under defined contribution plans, the group pays contributions to public or private organized
insurance plans for pensions on a compulsory, contractual, or voluntary basis. The group has no further
payment obligations once the contributions have been paid. The plan in Norway complies with the
requirements of the Norwegian Mandatory Occupational Pension Act. The contributions are recognized as
payroll expenses as incurred, see note 15.
b) Severance pay
Severance payments are recognized when the employment relationship is terminated by the group before the
normal retirement date or when an employee accepts voluntary redundancy in return for such remuneration. The
group recognizes severance pay when it is demonstrably obliged to either end the employment relationship of
today's employees in accordance with a formal, detailed plan that the group cannot withdraw, or to provide
severance pay due to an offer made to encourage voluntary redundancies.
2.14 Provisions
Provisions for product warranties, onerous contracts, restructuring costs, termination benefits and legal claims are
recognized when: The Group has a present 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 has been reliably estimated.
Provisions are discounted only when the effect is material and the distribution in time can be reliably estimated.
41 | Consolidated financial statements 2021, Navamedic ASA
2.15 Revenue recognition
a) Revenue from contracts with customers
Navamedic distributes and delivers pharmaceuticals and other products to hospitals and pharmacies, mainly in the
Nordic region, but also in a number of other countries in Europe. Revenues are measured based on the transaction
price specified in a contract with a customer. The group’s revenues are generated from the sale of goods, and
revenue is recognized at the point in time when control of the goods transfers to the customer, typically when the
group has delivered the goods to the customer.
Invoices are issued upon delivery of the goods or based on accumulated monthly sales through a wholesaler.
Payment terms for revenue are typically 30 days.
b) Interest income
Interest income is recognized through profit or loss proportionally over time in accordance with the effective
interest rate method.
c) Revenue from dividends
Dividend revenues are recognized through profit or loss when the right to receive payment arises.
2.16 Leases
The Group assesses at contract inception whether a contract is, or contains, a lease. That is, if the contract conveys
the right to control the use of an identified asset for a period of time in exchange for consideration.
Group as a lessee
The Group applies a single recognition and measurement approach for all leases, except for short-term leases and
leases of low-value assets. The Group recognizes lease liabilities to make lease payments and right-of-use assets
representing the right to use the underlying assets.
Right of use assets
The Group recognizes right-of-use assets at the commencement date of the lease. Right of use assets are measured
at cost, less any accumulated depreciation and impairment losses, and adjusted for any remeasurement of lease
liabilities. The cost of right of use assets includes the amount of lease liabilities recognized, initial direct costs
incurred, and lease payments made at or before the commencement date less any lease incentives received. Right
of use assets are depreciated on a straight-line basis over the shorter of the lease term and the estimated useful
lives of the assets. If ownership of the leased asset transfers to the Group at the end of the lease term or the cost
reflects the exercise of a purchase option, depreciation is calculated using the estimated useful life of the asset. The
right of use assets is also subject to impairment.
Lease liabilities
At the commencement date of the lease, the Group recognizes lease liabilities measured at the present value of
lease payments to be made over the lease term. The lease payments include fixed payments less any lease
incentives receivable, variable lease payments that depend on an index or a rate, and amounts expected to be paid
under residual value guarantees. In calculating the present value of lease payments, the Group uses its estimated
incremental borrowing rate at the lease commencement date because the interest rate implicit in the lease is not
readily determinable. After the commencement date, the amount of lease liabilities is increased to reflect the
42 | Consolidated financial statements 2021, Navamedic ASA
accretion of interest and reduced for the lease payments made. In addition, the carrying amount of lease liabilities
is remeasured if there is a modification, a change in the lease term, a change in the lease payments or a change in
the assessment of an option to purchase the underlying asset.
Short-term leases and leases of low-value assets
The Group applies the short-term lease recognition exemption to its short-term leases of machinery and equipment
(i.e., those leases that have a lease term of 12 months or less from the commencement date and do not contain a
purchase option). It also applies the lease of low-value assets recognition exemption to leases of office equipment
that are considered to be low value. Lease payments on short-term leases and leases of low-value assets are
recognized as expense on a straight-line basis over the lease term.
2.17 Dividends
Dividend payments to the company's shareholders are classified as liabilities from and including the moment the
dividend is determined by the general meeting.
Note 3 – Financial risk management and capital management
The Group's operations expose it to various types of financial risk: Market risk (including currency risk, variable
interest risk, and price risk), credit risk, and liquidity risk. The group focuses on minimizing the potential negative
effects that unforeseeable movements in the capital markets can have on the group's financial results. The group
does not use financial derivatives to protect itself from specific risks.
The group's risk management is performed by the management team in accordance with company risk policy
approved by the board.
a) Market risk
Operational risk
The Group is exposed to operational risk. The Group believes that such risk will primarily arise in relation to the
development of future sales of the company's products, measured in terms of both price and volume. Factors
that can influence market risk include increased competition, instructions to reduce prices from the
authorities, and competition from existing and future pharmaceuticals within the company's range of
therapies.
The company depends on supply and distribution from suppliers. The company has supply and distribution
agreements with suppliers in which the term of the agreement varies from one to eight years. The company is
dependent on renewing these agreements at market prices and on market terms and conditions and is
therefore in continuous dialogue with the suppliers to ensure they are renewed.
The group is exposed to risk related to pandemic outbreaks like the Covid-19. However, based on the existing
portfolio of products, the company is probably less prone to be affected to the same extent as many other
companies. The demand for most of the company’s products, except some Consumer Health products, is less
likely to be affected since the end users typically use the products based on needs and can not easily stop using
them. There is a risk that some products’ production and delivery could be affected in the event of long term
shut down.
43 | Consolidated financial statements 2021, Navamedic ASA
Navamedic is exposed to risk related to outbreak of war, like the current war in Ukraine. Navamedic has no
direct business relation with neither Ukraine nor Russia, however, if the war has negative effect on prices of raw
material or transportation costs, this would likely have an effect on Navamedic, although it is difficult to assess
to what extent.
Currency risk
The group is exposed to currency risk. A significant proportion of the group's revenue and expenses are in
currencies other than the functional currency in the individual entities (mostly NOK, SEK, DKK and EUR).
Materials are generally paid for in EUR, SEK, GBP, USD, DKK and NOK. Most of the sales in Navamedic AB take
place in Nordic currencies and EUR. Payroll and operating expenses are generally incurred in the currency of
the country in which the individual company is registered. The group has not adopted specific currency
hedging strategies in relation to operations.
The group is exposed to exchange rate fluctuations relating to balance sheet items in foreign currency.
Focusing on the major exposures, SEK and EUR, a sensitivity analysis of the effect of a potential change of +/-
5% in the exchange rates NOK/SEK and NOK/EUR at 31 December 2021 shows that a weakening of NOK against
SEK would result in a reduction in pre-tax profit of NOK 0,7 mill. A weakening of NOK against EUR would result
in a decrease in pre-tax profit of NOK 1,5 mill.
Variable interest rate risk
The group is exposed to interest rate risk related to bank deposits. The interest rate on the Group’s loans is
fixed. The calculated interest income and expenses, as well as actual interest payments, are affected by rate
changes. The group has not entered into any hedging arrangements to cover fluctuations in the general level of
interest rates. Calculations show that a 1% rise in interest rates would result in interest income of NOK 0.5
million.
b) Credit risk
The group is exposed to no significant concentrations of credit risk. Routines have been introduced to ensure
products are sold to customers with satisfactory creditworthiness. The company's customers are largely public
enterprises and larger pharmacy chains that represent a low credit risk. The level of consumer sales is relatively
low. See also note 10, which shows when the group's receivables fall due.
c) Liquidity risk
The group’s liquidity risk is considered moderate as at 31 December, and the group’s liquidity situation as at 31
December 2021 is considered to be satisfactory. As at 31 December 2021, the group had NOK 52.6 million in
cash and cash equivalents (NOK 39.6 million as at 31 December 2020). The group has a loan of SEK 40 million.
The group continually monitors the liquidity risk associated with the due dates for financial liabilities.
The table below illustrates the maturity structure of liabilities:
44 | Consolidated financial statements 2021, Navamedic ASA
Capital structure and capital management goals
The group's goal in relation to capital management is to ensure continued operations to secure returns for its
owners, and to maintain an optimal capital structure. The group continuously strives to have a leverage ratio and
an equity ratio adapted to the business’ risk profile. The Group's main financing agreements are between
Navamedic AB and Avida Finans AB and consist of i) an accounts receivable financing agreement with a credit limit
of SEK 55,4 million which carries a fixed interest rate of 5.9 % p.a. on the used credit, an annual fee of 0.5 % on the
full credit limit amount as well as a fixed fee of SEK 5.00 per invoice; ii) a loan of SEK 40 million with a fixed interest
rate of 5.5% p.a. For the loan agreement there is a covenant that net interest-bearing debt should not exceed 2 x
consolidated EBITDA.
Note 4 – Critical accounting estimates and discretionary
assessments
Estimates and discretionary assessments are evaluated on an ongoing basis and are based on past
experience and other factors, including expectations concerning future events regarded as probable
under current circumstances.
Important accounting estimates and assumptions
The group prepares estimates and makes assumptions about the future. The accounting estimates that follow from
these will, by definition, seldom be fully in line with the final outcomes. Estimates and assumptions that represent a
risk of material changes to the carrying values for assets and liabilities during the next accounting year are
discussed below.
a) Measurement of goodwill and intangible assets
The most important estimates and assumptions that carry a risk that they will materially affect the carrying
values for assets and liabilities during the next accounting year relate to the measurement of goodwill and
intangible assets, see note 7. The management uses estimates and assumptions in the determination of
the accounting depreciation period and impairment assessments of intangible assets.
Maturity structure of liabilities 2021
(in NOK '1000) Note
Carrying
Undiscounted
Year 1 Year 2 Year 3 Year 3-5 Total
License liabilities 21 21 329 22 883 13 292 2 643 6 948 22 883
Liabilities to financial institutions 20 38 980 38 980 9 745 9 745 9 745 9 745 38 980
Interest on liabilities to financial institutions 20 5 360 2 144 1 608 1 072 536 5 360
Right of use liabilities 9 7 664 8 432 2 142 4 193 2 097 8 432
Trade account payables 13 70 532 70 532 70 532 70 532
Taxes payable 26 10 713 10 713 10 713 10 713
Other current liabilities 14 29 724 29 724 29 724 29 724
Total 178 943 186 624 138 293 18 189 19 861 10 281 186 624
Maturity structure of liabilities 2020
(in NOK '1000) Note
Carrying
Undiscounted
Year 1 Year 2 Year 3 Year 3-5 Total
License liabilities 21 19 844 25 087 16 690 2 869 5 528 25 087
Liabilities to financial institutions 20 20 870 20 870 20 870 20 870
Interest on liabilities to financial institutions 20 2 374 1 357 1 017 2 374
Right of use liabilities 9 1 920 2 028 1 153 583 291 2 028
Trade account payables 13 66 956 66 956 66 956 66 956
Taxes payable 26 2 795 2 795 2 795 2 795
Other current liabilities 14 18 168 18 168 18 168 18 168
Total 130 552 138 277 107 118 25 339 5 820 0 138 277
Expected cash flows
Expected cash flows
45 | Consolidated financial statements 2021, Navamedic ASA
Capitalization of identifiable intangible assets is based on expectations of future financial benefits.
Measurements of future financial benefits are based on the management team's judgment and estimates
on balance sheet dates.
b) Tax
Assessment of whether a deferred tax asset is recognizable involves a significant degree of judgment in
determining the likelihood of utilization against future taxable results within the various tax jurisdictions in
which the group operates.
The capitalized deferred tax asset at 31 December 2021 is primarily linked to the tax losses carried forward
in the parent company in Norway.
The management considers that, in accordance with the requirements in IAS 12.35 and 12.36, and also
taking into consideration the ESMA considerations on recognition of deferred tax assets arising from the
carry forward of unused tax losses, that the following convincing evidence exists that taxable profits will be
available:
- The group budget for 2022 and the business plan for 2022-2024, which includes predictable
income from group internal management fee and royalty fee. The group has further assessed that
the fact that Navamedic ASA reported taxable profits in 2021 constitutes convincing evidence that
taxable profits will be utilized in the near-term.
Based on the items above, management considered it highly probable that future taxable profits would be
available against which the tax losses can be recovered and, therefore, the related deferred tax asset can
be realized.
Note 5 – Segment Information and revenue from contracts
with customers
Operating segments are identified based on the reporting the management team uses to evaluate
performance and profitability at a strategic level.
Navamedic has only one segment, the Pharma and Healthcare division. The reporting structure reflects the
company’s business and product composition.
The Pharma and Healthcare Segment consists of pharmaceuticals and medical nutrition products that Navamedic
markets, sells and distributes to hospitals, pharmacies and patients, bought from product suppliers and
manufacturers in Europe and other places.
Navamedic classifies its products into four product categories:
• Medical nutrition, including a broad portfolio of medical nutrition products. Navamedic is a Nordic
distributor of products purchased from the UK based company Vitaflo International ltd, a subsidiary of
46 | Consolidated financial statements 2021, Navamedic ASA
Nestlé. The product range also includes products within carbohydrate metabolism, fat metabolism
(MCT products) and renal disease.
• Consumer health, including gastro, oral, dermatology and pain products such as Alflorex®,
Thermacare®, Gelorevoice®, Aftamed and Nyda®.
• Branded generics, including cardiology products and generics such as Imdur® (used to prevent angina
attacks) and Nitrolingual (treatment for angina pectoris).
• Specialty pharma, including obesity and urology products such as Mysimba® (prescription
pharmaceutical for treatment of obesity) and Gepan® (a product for the treatment of painful bladder
syndrome).
* Markets are defined as the countries in which the products are sold
Operating revenues by major markets*
(in NOK '1000)
2021 2020
Sweden 59 876 54 179
Norway 138 050 64 324
Denmark 27 610 33 888
Finland 13
846
16 344
Other countries 39 057 41 142
Total revenue 278 439 209 877
Operating revenues by product categories
(in NOK '1000)
2021 2020
Branded generics 70 605 68 254
Specialty pharma 112 254 57 091
Medical nutrition 51 929 50 923
Consumer health 43
181
32 901
Other 470 708
Total revenue 278 439 209 877
47 | Consolidated financial statements 2021, Navamedic ASA
No single external customer amounts to 10% or more of the Group’s revenues.
The Group has different kinds of rebates. The rebates are for the most part standard rebates and are mostly in
Denmark, but also in some other countries, typically 10-15% for pharmacies In Denmark. The rebates are mostly for
OTC products but also for some tender products where the Group pays a kick-back.
Also see note 10 regarding trade receivables.
Note 6 – Investments in subsidiaries and associated
companies
The subsidiary Navamedic AB has branches in Norway, Denmark and Finland. Also see note 18 regarding associated
companies.
Non-current assets by country *
(in NOK '1000)
2021 2020
Sweden 50 612 56 436
Norway 64 910 19 289
Total 115 522 75 725
* Other than financial instruments and deferred tax assets.
Office location
Ownership
Subsidiaries
Navamedic AB Gothenburg, Sweden 100 %
Nov
icus Pharma AS Oslo, Norway 100 %
Navamedic A/S (under liquidation) Smørum, Denmark 100 %
Associated companies
Observe Medical ASA Oslo, Norway 21,54 %
48 | Consolidated financial statements 2021, Navamedic ASA
Note 7 – Property, plant & equipment
(in NOK '1000)
Office
equipment
Total
Accumulated cost
Balance at 1 January 2020 240 240
Additions 172 172
Currency translation differences 20 20
Accumulated cost at 31 December 2020 432 432
Balance at 1 January 2021 432 432
Additions 718 718
Currency translation differences -15 -15
Accumulated cost at 31 December 2021 1 135 1 135
Accumulated depreciation
Balance at 1 January 2020 -185 -185
Depreciation -55 -55
Currency translation differences -18 -18
Balance as at 31 December 2020 -258 -258
Balance at 1 January 2021 -258 -258
Depreciation -146 -146
Currency translation differences 13 13
Balance as at 31 December 2021 -390 -390
Expected useful economic life 3-5 years
Carrying amounts
At 1 January 2020 55 55
At 31 December 2020 174 174
At 31 December 2021 745 745
All property, plant & equipment is located in Norway and Sweden.
49 | Consolidated financial statements 2021, Navamedic ASA
Note 8 – Goodwill and Intangible assets
Test for impairment losses for cash generating units that contain goodwill
Goodwill originates from the purchase of Vitaflo AB and other minor acquisitions, including Novicus Pharma AS in
2019. For the purpose of impairment testing, goodwill has been allocated to the group's single cash generating unit
('CGU'), being the Pharma division.
Impairment test – Pharma division
Impairment testing is based on value-in-use calculations, determined by discounting the estimated future cash
flows to be generated by the CGU.
(in NOK '1000)
Goodwill Licenses
Other intangible
assets
Total
intangible
asse
ts
Accumulated cost
Balance at 1 January 2020 59 520
30 857 420 31 277
Additions 4 822 4 822
Currency translation differences 4 953 696 696
Accumulated cost at 31 December 2020 64 472 31 552 5 243 36 795
Balance at 1 January 2021 64 472 31 552 5 243 36 795
Reclassification -863 -963 -1 827
Additions 22 358 10 22 368
Currency translation differences -3 441 -483 -483
Accumulated cost at 31 December 2021 61 031 52 563 4 289 56 853
Accumulated amortization
Balance at 1 January 2020 0 -24 646 -24 646
Amortization 0 -2 043 -65 -2 108
Currency translation differences 0 -352 -352
Balance as at 31 December 2020 0 -27 041 -65 -27 106
Balance at 1 January 2021 0 -27 041 -65 -27 106
Reclassification 1 827 1 827
Amortization 0 -4 010 -537 -4 547
Currency translation differences 0 316 316
Balance as at 31 December 2021 0 -28 909 -602 -29 511
Expected useful economic life 5-10 years 5-10 years
Carrying amounts
At 31 December 2020 64 472 4 511 5 178 9 689
At 31 December 2021 61 031 23 654 3 688 27 342
Intangible assets
50 | Consolidated financial statements 2021, Navamedic ASA
The test is based on the book value of the goodwill at 31.12.2021 compared to the estimated value calculated on
the basis of discounted future cash flows. The calculations were based on the original product portfolio as well as
new products. The basis for including new products is that the acquisition not only provided a product portfolio,
but also a platform to be used for launch of new products. The 2022-2026 budget is used, with a modest revenue
growth of 5%, after which we have assumed a 2.5% growth. A discount rate pre-tax of 12.6% was used to discount
future cash flows. The resulting EBITDA margin estimates ranges from 4% in 2022 to 15% in 2025. The estimated
value of the CGU exceeded the book value at 31.12.2021, therefore resulting in no write-down of the goodwill. In
addition to the discounted cash flow estimation, sensitivity analysis showed that even with a significantly more
conservative view, the estimated value would still not result in a write-down. Key assumptions include moderate
growth in the revenue according to the above mentioned during the period, together with the estimated EBITDA
margin and the level of the discount rate. Additionally, neither reasonably possible negative changes in the growth
assumption, nor reasonably possible negative changes in the EBITDA margin would lead to an impairment. Also, a
reasonably possible increase in the discount rate after tax would not give rise to impairment.
Note 9 – Right of use assets and liabilities
51 | Consolidated financial statements 2021, Navamedic ASA
The weighted average lessee’s incremental borrowing rate applied to lease liabilities recognized in the statement of
financial position at the date of initial application is 4,6 %.
52 | Consolidated financial statements 2021, Navamedic ASA
Note 10 – Trade and other receivables
The Group has traditionally had low losses on trade receivables, and considers the risk associated with trade
receivables as low.
(in NOK '1000)
2021 2020
Trade receivables
31 355 22 790
Other receivables and prepaid expenses
6 374 5 855
Total trade and other receivables
37 730 28 646
(in NOK '1000)
2021 2020
Gross trade receivables
31 801 22 833
Provision for loss on trade receivables
-446 -42
Total trade receivables
31 355 22 790
(in NOK '1000)
2021 2020
Provision for loss on trade receivables at 1 January
-42 -17
Reversal of previous years provision for loss on trade receivables
42
This years provision for loss on trade receivables
-446 -38
Loss on trade receivables
13
Total provision for loss on trade receivables at 31 December
-488 -42
Due date profile trade receivables
(in NOK '1000)
2021 2020
Not due
25 896 14 581
0-3 months
4 653 6 856
> 3 months
1 252 1 354
Total trade receivables
31 801 22 790
53 | Consolidated financial statements 2021, Navamedic ASA
Note 11 – Inventories
Note 12 – Financial assets and liabilities
Fair value hierarchy for financial instruments recognized at fair value
All financial assets are valued based on level 2 inputs in accordance with IFRS 13:81.
Fair value of financial instruments recognized at amortised cost
Due to their short term nature, the carrying value of current financial assets and liabilities is deemed a reasonable
approximation to the fair value of these financial assets and liabilities. The interest rate on non-current liabilities to
financial institutions is considered not to be significantly different from what the Group could achieve as of 31
(in NOK '1000)
2021 2020
Inventory
61 933 42 062
Provisions for inventory obsolescence
-51 -117
Total inventory
61 882 41 945
(in NOK '1000)
Carrying amount
as at 31.12.2021
Fair value as at
31.12.2021
Carrying amount
as at 31.12.2020
Fair value as at
31.12.2020
Non-current financial assets
Non-current loans to associated companies 0 0 34 821 34
821
Total non-current financial assets
0 0 34 821 34 821
Current financial assets
Tax receivables 15 652 15 652 7 614 7 614
Trade and other receivables 37 730 37 730 28 646 28 646
Current loans to associated companies 37 606 37 606 0 0
Cash and cash equivalents 52 620 52 620 39 584 39 584
Total current financial assets
143 608 143 608 75 844 75 844
Total financial assets
143 608 143 608 110 665 110 665
Non-current financial liabilities
Non-current license liabilities 8 171 8 171 3 343 3 343
Non-current lilabilities to financial institutions 29 235 29 235 20 870 20 870
Total non-current financial liabilities
37 406 37 406 24 213 24 213
Current financial liabilities
Trade and other payables 70 532 70 532 66 956 66 956
Current liabilities to financial institutions 9 745 9 745 0 0
Current license liabilities 13 158 13 158 16 500 16 500
Total current financial liabilities
93 435 93 435 83 456 83 456
Total financial liabilities
130 842 130 842 107 669 107 669
54 | Consolidated financial statements 2021, Navamedic ASA
December 2021, and as such the carrying amount is considered not to be significantly different from the fair value.
The discount rate applied to the calculation of amortized cost for non-current license liabilities is considered not to
be significantly different from the market cost of capital as of 31 December 2021, and as such the carrying amount is
considered not to be significantly different from the fair value.
See notes 9 and 20 for information regarding non-cash transactions related to financial liabilities.
Note 13 – Paid in equity and shareholders
(in NOK '1000, number of shares in actual figures)
Number of
shares
Share capital
Share premium
reserve
Total paid in
equity
As of 1 January 2020 11 867 673 8 782
66 037 74 819
Correction opening balance 23 659 23 659
Share capital issues 3 424 212 2 534 57 914 60 447
As of 31 December 2020 15 291 885 11 316 147 610 158 926
As of 1 January 2021 15 291 885 11 316 147 610 158 926
Share capital issues 1 053 775 780 18 220 19 000
As of 31 December 2021 16 345 660 12 096 165 830 177 926
Each share has a nominal value of NOK 0,74 kr.
Largest shareholders as of 31 December 2021
Shareholder
Number of
shares
Share of capital Share of votes
INGERØ REITEN INVESTMENT COMPANY A 3 563 042 21,8 % 21,8 %
UBS Switzerland AG 2 472 497 15,1 % 15,1 %
J.P. MORGAN BANK LUXEMBOURG S.A. 2 185 532 13,4 % 13,4 %
SOLEGLAD INVEST AS 666 668 4,1 % 4,1 %
Carnegie Investment Bank AB 597 757 3,7 % 3,7 %
TRANBERGKOLLEN INVEST AS 525 000 3,2 % 3,2 %
LEIKERANE AS 500 000 3,1 % 3,1 %
SVENSKA HANDELSBANKEN AB 423 715 2,6 % 2,6 %
ARTAL AS 314 800 1,9 % 1,9 %
BJØRNTVEDT 265 000 1,6 % 1,6 %
GINKO AS 250 000 1,5 % 1,5 %
State Street Bank and Trust Comp 245 000 1,5 % 1,5 %
KRAEBER Verwaltung GMBH 214 850 1,3 % 1,3 %
CAM AS 212 785 1,3 % 1,3 %
BECK ASSET MANAGEMENT AS 200 000 1,2 % 1,2 %
LARS HJARRAND 185 882 1,1 % 1,1 %
HARDING INVEST AS 172 188 1,1 % 1,1 %
Nordnet Bank AB
168 255 1,0 % 1,0 %
Total
16 345 660 79 % 79 %
Ingerø Reiten Inv. Company AS is represented on the Board by Terje Bakken and Narve Reiten. Topridghe Pharma LTD was represented
on the Board by Cheng Lu until june 2021. Navamedic distributes the pharmaceutical product Imdur for Topridge Pharma.
55 | Consolidated financial statements 2021, Navamedic ASA
Note 14 – Trade accounts payable and other current liabilities
Shares owned by the board and executive personnel in Navamedic ASA as at 31 December 2021
Name Role
Number of
shares
Comment
Terje Bakken Chairman 3 563 042
Through Ingerø Reiten Inv. Company AS
Narve Reiten Board member 3 563 042
Through Ingerø Reiten Inv. Company AS
Kathrine Gamborg Andreassen CEO 666 668
Through Soleglad Invest AS
Lars Hjarrand CFO 185 882
Ole Henrik Eriksen COO 500 000
Through Leikerane AS
Astrid T Bratvedt CSO 525 000
Through Tranbergkollen Invest AS
Astrid T Bratvedt CSO 2 000
Alexander Lidmejer Commercial Director Specialty Pharma 2 400
Bernt Olav Røttingsnes Chairman of the Nomination Committee 50 000
Grete Hogstad Member of the Nomination Committee 1 493
Shares owned by the board and executive personnel in Navamedic ASA as at 31 December 2020
Name Role
Number of
shares
Comment
Terje Bakken Chairman 3 563 042
Through Ingerø Reiten Inv. Company AS
Narve Reiten Board member 3 563 042
Through Ingerø Reiten Inv. Company AS
Kathrine Gamborg Andreassen CEO 666 668
Through Soleglad Invest AS
Lars Hjarrand CFO 185 882
Ole Henrik Eriksen COO 500 000
Through Leikerane AS
Astrid T Bratvedt CSO 525 000
Through Tranbergkollen Invest AS
Astrid T Bratvedt CSO 2 000
Alexander Lidmejer Commercial Director Specialty Pharma 2 400
Bernt Olav Røttingsnes Chairman of the Nomination Committee 90 358
Grete Hogstad Member of the Nomination Committee 1 493
Due date profile trade accounts payable
(in NOK '1000)
2021 2020
Not due
29 332 20 690
0-3 months
31 916 8 921
> 3 months
9 284 37
348
Total trade accounts payable
70 532 66 960
Other current liabilities
(in NOK '1000)
2021 2020
Accrued salaries and public duties
25 824 13 882
Accrued expenses and other current liabilities
3 900 3 968
Total other current liabilities
29 724
17 850
56 | Consolidated financial statements 2021, Navamedic ASA
Note 15 – Other operating expenses
Auditor expense amounts are excl. VAT.
(in NOK '1000)
2021 2020
Consulting, legal and audit fees 9 695 12 991
Travel expenses 1 010 1 572
Insurance 580 547
IR expenses 1 201 1 811
Marketing, freight, and commissions 26 031 15 065
Other expenses (incl. control and regulatory fees) 10 601 7 045
Total other operating expenses 49 118 39 031
Auditor expense recognised
(in NOK '1000)
2021 2020
Statutory audit 1 014 2 072
Other assurance services 24 779
Total auditor expense recognised 1 038 2 851
57 | Consolidated financial statements 2021, Navamedic ASA
Note 16 – Payroll expenses
(in NOK '1000)
2021 2020
Salaries 30 447 21 676
Employer's Nantional insurance contributions 5 761 4 137
Share options for employees 1 784 2 166
Pension expenses – defined-contribution scheme 2 670 2 714
O
t
her payroll expenses 3 792 1 870
Total payroll expenses 44 455 32 563
Number of FTEs 28 26
Remuneration executive personell 2021
(in NOK '1000)
Salary Bonus
Pension
expenses
Other
remuneration
Total
Kathrine Gamborg Andreassen, CEO 2 452 1 082 112 273 3 919
Lars Hjarrand, CFO 1 791 175 112 101 2 179
To
tal remuneration executive personnell 2021 4 243 1 257 224 374 6 098
Remuneration executive personell 2020
(in NOK '1000)
Salary Bonus
Pension
expenses
Other
remuneration
Total
Kathrine Gamborg Andreassen, CEO 2 142 1 050 108 912 4 211
Lars Hjarrand, CFO 1 562 117 101 1 779
To
tal remuneration executive personnell 2020 3 704 1 050 225 1 012 5 991
Executive personnell is defined as being chief executive officer (CEO) and chief financial officer (CFO).
No loans were issued and no assets were pledged to the benefit of employees, shareholders or board members in 2021 or 2020.
Board fees paid
(in NOK '1000)
2021 2020
Terje Bakken 400 400
Narve Reiten 205 205
Jostein Davidsen 175 175
Inger Johanne Solhaug 195 205
C
h
eng Lu (01.01.2021 - 03.06.2021) 175 175
Annika Maria Kollen (03.06.2021 -)
Total board fees paid 1 150 1 160
Share-based remuneration
Key management personnel in Navamedic ASA receive parts of their salary as share-based remuneration.
Share options held by key management personnel
Quantity at
31.12.2021
Quantity at
31.12.2020
Kathrine Gamborg Andreassen, CEO 105 000 105 000
Lars Hjarrand, CFO 150 000 150 000
Total 255 000 255 000
58 | Consolidated financial statements 2021, Navamedic ASA
Statement on the stipulation of salaries and other remuneration for the CEO and other executive
personnel
Pursuant to Section 6-16a of the Norwegian Public Limited Liability Companies Act, the board of Navamedic has
prepared a statement on the stipulation of salaries and other remuneration for the CEO and executive personnel.
All pay and remuneration in the group are based on the gross pay principle, meaning that any tax consequences of
remuneration individuals receive are not the concern of the group.
The main principle in Navamedic's executive pay policy is that executive personnel will be offered competitive
terms and conditions. The group aims to offer a level of pay that reflects an average pay level in small
pharmaceutical companies in the Nordic region.
As a guideline, executive personnel can be awarded remuneration in addition to their basic salary (bonus), but this
is limited to 75% of the annual salary and linked to the achievement of specific targets, and at the same time such
that total compensation is within the average. Any bonuses to the CEO must be determined by the board.
Executive personnel can only be awarded options for the acquisition of/subscription to shares in the company.
The company offers defined contribution based pensions to all employees. Some executive personal has been
awarded share options. See note 23
The CEO and CFO are subject to notice periods of 6 months. The CEO has a termination payment agreement of 12
months.
59 | Consolidated financial statements 2021, Navamedic ASA
Note 17 – Financial income and expenses
Financial income
(in NOK '1000)
2021 2020
Interest income
-2 787 2 518
Other financial income
-1 248 328
Total financial income
-4 035 2 846
Financial expenses
(in NOK '1000)
2021 2020
Interest expenses
2 501 2 705
Other financial expenses
1 923 1 139
Total financial expenses
4 424 3 844
Net currency gain/losses
(in NOK '1000)
2021 2020
Currency gains
26 497 20 142
Currency losses
-32 020 -26 287
Total net currency gain/losses
-5 523 -6 144
60 | Consolidated financial statements 2021, Navamedic ASA
Note 18 – Shares in associated companies
(in NOK '1000)
Observe
Medical ASA
Carrying amount as of 1 January 2020 15 300
Share capital issue 11 250
Share of net income (loss) -
4 528
C
arrying amount as of 31 December 2020 22 022
Carrying amount as of 1 January 2021 22 022
Share of net income (loss) -3 185
Carrying amount as of 31 December 2021 18 837
At 31 December 2021 Navamedic ASA held 21,54% of the shares in Observe Medical ASA. The share of net income
(loss) is based on reported figures for the period Q1-Q3, and an estimate of net income (loss) for Q4.
At 31 December 2021 the observed share price of the listed company Observe Medical ASA was NOK
15.77, indicating a value of NOK 66,6 mill for Navamedic ASA's investment in the company.
Observe Medical ASA financials
(in NOK '1000)
2021 2020
Operating revenue 24 042 2 961
Gross result 9 519 986
Op
erating expenses -37 981 -25 910
Depreciation and amortization -3 463 -3 163
Operating result (EBIT) -36 543 -28 087
Net financial items 10 223 -8 782
Tax expense 0 0
Total comprehensive income (loss) -36 868 -35 737
Total non-current assets 56 579 57 936
Total current assets 15 158 29 797
Total assets 71 737 87 733
Total equity -14 122 20 349
Total non-current liabilities 13 581 57 449
Total current liabilities 72 278 9 935
Total liabilities 85 860 67 384
Total equity and liabilities 71 737 87 733
61 | Consolidated financial statements 2021, Navamedic ASA
Loan to Observe Medical ASA
The group has an outstanding loan of TNOK 37 606 at 31 December 2021 (TNOK 34 821 at 31 December 2020).
Subsequent to the demerger of Observe Medical ASA in 2019, Navamedic ASA (as lender) entered into a loan
agreement with Observe Medical ASA (as the borrower) for a loan of an aggregate amount of TNOK 32 000. The loan
was structured as a bullet loan, with repayment of the entire loan at the maturity date.
The loan agreement consists of the two following facilities:
• A subordinated convertible term loan facility in the amount of TNOK 19 000 ; and
• A subordinated convertible term loan facility in the maximum amount of TNOK 13 000.
The facilities given under the loan agreement constitute direct, unsecured and fully subordinated obligations of
Observe Medical ASA, and rank at least pari passu with all other existing and future unsecured and subordinated
obligations of Observe Medical ASA (other than in respect of any obligations preferred by mandatory provisions of
applicable law), and rank ahead of all amounts payable in respect of the share capital.
The Facility A was made available to Observe Medical on the completion date of the demerger, while the Liquidity
Facility of TNOK 13 000 was drawn on up until August 2020. Subsequent to August 2020, the loan is fully drawn.
Each loan given under the facilities accrue interest at a fixed interest rate of 8.00% per annum.
Observe Medical ASA shall on the date falling 36 months after the date of the Loan Agreement repay to Navamedic
ASA the aggregate amount of each loan then outstanding together will all accrued but unpaid interest. Observe
Medical ASA may at any time prepay any loan outstanding in part or in full. Any amount repaid or prepaid may not
be re-borrowed.
Additionally, Navamedic ASA has the right to, following the date falling 12 months after the completion date of the
demerger, 31 October 2020, request that all, but not parts of, the loan outstanding is converted into Shares.
Following the disbursement of a written notice to Observe Medical ASA by the Company informing about an
exercise of the conversion right, Observe Medical has the optionality to either (1) accept the conversion right or (2)
reject such conversion right by settling the loans in full in cash or settling parts of any loans in cash and the
remainder through conversion.
The subscription price in a conversion shall be equal to the volume weighted average share price of Observe
Medical ASA's shares on the Oslo Axess for the last ten days prior to the conversion date, but in no event be less
than the nominal value of each share.
The conversion right attached to the loan to Observe Medical ASA is considered to be an embedded derivative
within the scope of IFRS 9. However, since the subscription price in the conversion right is linked to the observed
share price, this embedded derivative is considered to be of little or no value.
62 | Consolidated financial statements 2021, Navamedic ASA
Note 19 – Cash
Restricted funds consist of tax deduction and other restricted deposit accounts.
(in NOK '1000)
2021 2020
Cash and cash equivalents
51 698 38 797
Restricted funds
922 788
Total cash
52 620
39 584
63 | Consolidated financial statements 2021, Navamedic ASA
Note 20 – Interest-bearing liabilities to financial institutions
Non-current interest-bearing liabilities to financial institutions
2021 2020
Total non current interest-bearing liabilities, nominal value (TNOK)
29 235 20 870
Average interest rate, including margin
5,5 % 6,5
%
Average remaining duration
2,39 years 1,75 years
Non-current interest-bearing liabilities consisted of one loan with Avida Finance AB in SEK both in 2020 and 2021.
The loan was refinanced and increased by SEK 20 mill during 2021. The 2020 loan had a covenant that the outstanding
balance should not exceed 50% of the inventory. The 2021 loan had a covenant that net interest-bearing debt should
not exceed 2 x consolidated EBITDA. Net interest-bearing debt is defined as interest-bearing debt adjusted for cash.
Current interest-bearing liabilities to financial institutions
2021 2020
Total non current interest-bearing liabilities, nominal value (TNOK)
9 745 0
Average interest rate, including margin
5,5 % N/A
Av
erage remaining duration
1,00 0,00
Current interest-bearing liabilities consisted of the part of the loan with Avida Finance AB that falls due within 12
months.
Changes in total interest-bearing liabilities to fincancial institutions
(in NOK '1000)
2021 2020
At 1 January
20 870 23 605
Cash flow
19 500 -5
251
Non-cash changes
1 390- 2 516
At 31 December
38 980 20 870
64 | Consolidated financial statements 2021, Navamedic ASA
Note 21 – License liabilities
The discount rate applied to the amortized cost calculations equals the effective interest rate for each agreement.
For interest free agreements the estimated cost of debt that the Group could achieve on loans with similar maturity
and security is applied.
Note 22 – Contingent assets and liabilities
The group has an outstanding contingent liability of NOK 15,6 mill related to a license agreement. The liability is not
recognized, as it is a possible obligation whose existence will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future events not wholly within the control of Navamedic. Correspondingly, a
contingent asset (intangible asset) of the same amount is not recognized. The amount NOK 15,6 mill is
undiscounted. Upon recognition, the amount recognized as both asset and liability would be the discounted
amount of the remaining payments at the time of recognition.
Note 23 – Options
Key management personnel in Navamedic ASA receive parts of their salary as share-based remuneration (see note
16).
(in NOK '1000)
2021 2020
Total carrying amount non-current license liabilities
8 171 3 343
Total carrying amount current license liabilities
13 158 16 500
Total carrying amount license liabilities
21 329
19 844
Total undiscounted amount non-current license liabilities
22 883 25 087
Average discount rate amortized cost calculation
3,0 % 2,5 %
Non-current license liabilities consist of the discounted cash flows from product licensing agreements with
long-term payment plans. Current license liabilities consist of the short-term part (due in less than 1 year) of the
discounted cash flows from product licensing agreements.
Expected undiscounted cash flows from license liabilities
(in NOK '1000)
2021 2020
Year 1
13 292 16 690
Year 2
2 643 2 869
Year 3-5
6 948 5
528
After year 5
0 0
Total expected undiscounted cash flows from license liabilities
22 883 25 087
65 | Consolidated financial statements 2021, Navamedic ASA
Total costs related to options
(in NOK '1000)
2021 2020
Total option cost
1 784 2 166
Total social security provision
1 007 -318
Total costs related to options
2 791 1 847
Reconciliation outstanding options
Number of
instrumets
Weighted
average strike
price
Outstanding options 1 January 2020
536 875
9,44
Granted
510 000 19,00
Exercised
-446
875 8,68
Terminated
-15 000 6,96
Total outstanding options 31 December 2020
585 000 18,42
Outstanding options 1 January 2021
585 000
18,42
Total outstanding options 31 December 2021
585 000 18,42
Granted options
2021 2020
Number of options granted
510 000 510 000
Weighted average strike price
19,00 19,00
Weighted average share price at grant time
18,89 18,
89
Estimated weighted average fair value at grant time
7,72 7,72
Simulation model
Monte carlo Monte carlo
Estimated volatility
62,8 % 63 %
Interest rate
0,265 % 0,3 %
Expected dividend
0 0
66 | Consolidated financial statements 2021, Navamedic ASA
All outstanding options vest 1/3 every 12 months after the grant date. Options that have not been exercised will
lapse 4 years after grant date.
Shares received from exercised options are subject to a lock-up period of 12 months. The lock-up obligations shall
not prevent the option holders from selling an amount of the option shares necessary to finance the exercise price,
as well as the tax payable as a consequence of the exercise of options.
Note 24 – Earnings per share
Diluted earnings per share
Diluted earnings per share equals ordinary earnings per share in 2020, since net profit/loss is negative, and
additional issue of shares would increase earnings per share.
Note 25 – Transactions with related parties
TopRidge Pharma Limited, which owns 1 420 522 shares in Navamedic ASA, is also a supplier to Navamedic. The
Group purchased goods from TopRidge worth TSEK 57 634 in 2021 and TSEK 41 847 in 2020. ACS Dobfar S.p.A.,
Outstanding options 31 December 2020
Number of
options
Of which
vested
Strike price 14,46
75 000 25 000 2,50
Strike price 19,00
510 000 3,46
Total outstanding options 31 December 2020
585 000 25 000
Outstanding options 31 December 2021
Number of
options
Of which
vested
Strike price 14,46
75 000 50 000 1,50
Strike price 19,00
510 000 170 000 2,46
Total outstanding options 31 December 2021
585 000 220 000
Weighted Average remaining
contractual life (years)
Weighted Average remaining
contractual life (years)
(in NOK '1000)
2021 2020
Net profit / loss (-) 618 -16 460
Weighted average shares issued 16 296 580 14 461 612
Di
lutive potential ordinary shares 133 910
Basic earnings per share 0,04 -1,14
Diluted earnings per share 0,04 -1,14
67 | Consolidated financial statements 2021, Navamedic ASA
which owns 3 424 212 shares in Navamedic ASA, is also a supplier to Navamedic. The group purchase goods from
ACS Dobfar worth TEUR 638 in 2021. ACS Dobfar became a shareholder in Navamedic in 2021.
Note 26 – Tax expense and deferred tax
The effective tax rate in 2021 is higher than the corporate tax rates in the markets where the Group operates (20% -
22%). This is primarily due to some extent, non-capitalised deferred tax assets in the parent entity.
(in NOK '1000)
2021 2020
Profit before tax continuing operations
2 358 -16 596
Tax expense
Tax payable
1 740 455
R
eversed tax provision
-665
Change in deferred tax
74
Total tax expense
1 740 -136
Effective tax rate
73,77 % 0,82 %
Tax payable 2020
Norwegian
entities
Norwegian
branch
Swedish entity Danish branch Finnish branch Total
Profit before tax (not consolidated)
-17 394 10 006 5 119 289 -478 -2 457
Permanent differences / Currency exchange differences
23 30 53
Changes in temporary differences
-839 -839
Deficit carried forward applied
-3 209 -3 209
Total basis for tax payable
-18 210 10 006 1 941 289 -478 -6 451
Tax payable Norway, 22%
2 201 2 201
Tax payable Sweden, 21.4%
415 415
Tax payable Sweden reversed tax provision
Tax payable branches reclaimable Sweden
-2 265 -2 265
Tax payable Denmark, 22%
64 64
Tax payable Finland, 20%
Tax payable Finland, other
40 40
Total tax payable
0 2 201 -1 849 64 40 455
Navamedic AB
Tax payable 2021
Norwegian
entities
Norwegian
branch
Swedish entity Danish branch Finnish branch Total
Profit before tax (not consolidated)
-3 306 40 223 8 449 302 -2 028 43 640
Permanent differences / Currency exchange differences
544 -320 224
Changes in temporary differences
4 314 4 314
Deficit carried forward applied
-1 575 -1 575
Total basis for tax payable
-23 40 223 8 129 302 -2 028 46 603
Tax payable Norway, 22%
8 849 8 849
Tax payable Sweden, 21.4%
1 740 1 740
Tax payable branches reclaimable Sweden
-8 916 -8 916
Tax payable Denmark, 22%
66 66
Tax payable Finland, 20%
Total tax payable
0 8 849 -7 176 66 0 1 740
Navamedic AB
68 | Consolidated financial statements 2021, Navamedic ASA
Deferred tax assets from tax losses carried forward are recognized to the extent that convincing evidence exists that
taxable profits will become available. The group’s tax assets at 31 December 2021 are related to its Norwegian
entities.
There are no time limits relating to the utilization of the tax losses carried forward.
In addition, tax receivables related to prepaid taxes and reclaimable tax within Navamedic AB amounting to TNOK
15 652 (TNOK 7 614) is recognized on the balance sheet.
Deferred tax 2020
Norwegian
entities
Norwegian
branch
Swedish entity Danish branch Finnish branch Total
Property, plant & equipment
-1 452 -1 452
Out
standing receivables
0 0
Provisions for liabilities
17 890 17 890
Tax losses carried forward
50 564 50 564
Total temporary differences
67 001 67 001
Temporary differences not capitalised
-25 327 -25 327
Total net temporary differences
41 674 41 674
Tax rate
22 %
Net deferred tax assets (-)/ defererred tax (+)
9 168 9 168
Navamedic AB
Deferred tax 2021
Norwegian
entities
Norwegian
branch
Swedish entity Danish branch Finnish branch Total
Property, plant & equipment
-64 -64
Out
standing receivables
0 0
Provisions for liabilities
20 816 20 816
Tax losses carried forward
49 122 49 122
Total temporary differences
69 873 69 873
Temporary differences not capitalised
-28 199 -28 199
Total net temporary differences
41 674 41 674
Tax rate
22 %
Net deferred tax assets (-)/ defererred tax (+)
9 168 9 168
Navamedic AB
Tax payable
(in NOK '1000)
2021 2020
Carrying amount tax payable 1 January
2 795 1 092
Reversed tax provision tax provision
0 -665
T
ax payable excl. Reclaimable tax
10 655 2 680
Taxes paid during the period
-2 700 -287
Translation differences
-38 -25
Carrying amount tax payable 31 December
10 713 2 795
69 | Consolidated financial statements 2021, Navamedic ASA
Note 27 – Subsequent events
On 16 February 2022, Navamedic announced the launch of SmectaGO® for sale through pharmacies in Norway,
Sweden, Finland and Denmark this spring. SmectaGO® is a unique product developed to treat acute and chronic
diarrhea in adults and children above 8 years. The launch is part of a long-term agreement with the well-known
French pharmaceutical corporation Ipsen Consumer HealthCare wherein Navamedic has been appointed the
exclusive partner in the Nordics.
Navamedic was as of 31.12.2021 one of the largest shareholders in Observe Medical ASA with an ownership share of
21.54%. As publicly announced by Observe Medical ASA on January 14, 2022, the company acquired Biim
Ultrasound and performed a rights issue and a following share issue to fund the transaction. Navamedic opted not
to participate in the issue, consequently Navamedic’s ownership in Observe Medical ASA is as of the publication of
this report reduced to 7.89%.
70 | Consolidated financial statements 2021, Navamedic ASA
Parent Company
Navamedic ASA, annual
financial statements 2021
71 | Consolidated financial statements 2021, Navamedic ASA
Income statement
72 | Consolidated financial statements 2021, Navamedic ASA
Balance sheet
(in NOK '1000) Note 31.12.2021 31.12.2020
Assets
Fixed assets
Non-current assets
Intangible assets
Intangible assets 3 25 787 6 710
Deferred tax asset 6 9 168 9 168
Total intangible assets 34 955 15 878
Tangible assets
Property, plant & equipment 3 733 152
Total tangible assets 733 152
Financial assets
Investments in group companies 2 102 364 102 904
Investments in associated companies 2 27 250 27 250
Non-current loans to associated companies 0 34 821
Total financial assets 129 614 164 975
Total non-current assets 165 303 181 005
Current assets
Receivables
Trade receivables 138 291
Other short-term loans group companies 9 052 29 764
Other receivables 4 1 777 1 998
Current loans to associated companies 37 606 0
Total receivables 48 574 32 053
Bank deposits 5 2 765 5 566
Total current assets 51 338 37 619
Total assets 216 641 218 624
73 | Consolidated financial statements 2021, Navamedic ASA
(in NOK '1000) Note 31.12.2021 31.12.2020
E
quity
Paid in equity
Share capital 1, 8 12 096 11 316
Share premium reserve 1 165 830 147 610
Total paid in equity 177 926 158 926
Retained earnings
Retained earnings -32 199 -30 700
Total retained earnings -32 199 -30 700
Total equity 145 728 128 226
Liabilities
Non-current liabilities
Liabilities to group companies 36 429 63 458
Non-current licensing liabilities 7 765 1 955
Total non-current liabilities 44 194 65 413
Current liabilities
Trade account payables 1 235 2 214
Unpaid public dues 2 387 1 166
Current licensing liabilities 13 051 15 935
Other current liabilities 10 047 5 671
Total current liabilities 26 720 24 985
Total liabilities 70 913 90 399
Total equity and liabilities 216 641 218 624
74 | Consolidated financial statements 2021, Navamedic ASA
Statement of cash flows
(in NOK '1000) 2021 2020
Cash flow from operating activities
Profit before tax -3 283 -17 283
Depreciation and impairment 3 428 637
Changes in options 1 784 2 599
Interest and contingent consideration with no cash effect -3 924 829
Change in trade receivables -21 399 191
Change trade account payables -979 -
1 255
Changes other current liabilities and receivables 6 303 -5 198
Net cash flow from operating activities -18 070 -19 479
Cash flow from investing activities
Purchase of tangible and intangible assets -728 -4 980
Investments in shares 0 -11 650
Net cash flow from investing activties -728 -16 630
Cash flow from financing activtities
Loans received 16 000 0
Share issues 0 57 848
Interest paid -3 0
Loans issued 0 -17 901
Net cash flow from financing activities 15 997 39 947
Net change in cash -2 801 3 838
Cash and cash equivalents start period 5 566 1 728
Cash and cash equivalents end period 2 765 5 566
75 | Consolidated financial statements 2021, Navamedic ASA
The Board of Directors and CEO of Navamedic ASA
Oslo, 28 April 2022
Chairman
Board member
Board member
Board member
Board member
CEO
76 | Consolidated financial statements 2021, Navamedic ASA
Explanatory notes to the
annual financial statements
2021
77 | Consolidated financial statements 2021, Navamedic ASA
Summary of significant accounting policies
The annual financial statements have been prepared in accordance with the Accounting Act and good accounting
practice.
Sales revenue
Revenue is measured at the fair value of the remuneration, net after deductions for discounts, returns, and VAT.
Revenue is recognized through profit or loss when it can be reliably measured, and it is likely that the financial
benefits will flow to the company. Estimates related to revenue recognition are based on history and assessments
of the type of customer and transaction, as well as the specific circumstances surrounding each transaction.
The company has an agreement on royalties from its subsidiary Navamedic AB. The company holds the rights to
various products that are resold by the subsidiary and thereby earns royalties. The royalties are based on actual
sales in Navamedic AB. The company also charges subsidiaries for services relating to sales management,
marketing and regulatory management, as well as financial and accounting management.
Subsidiaries
In Navamedic ASA’s annual financial statements, subsidiaries are measured using the cost method less any
impairment.
Classification and measurement of balance sheet items
Current assets and current liabilities include balance sheet items that fall due for payment within one year of the
balance sheet date and are associated with the with the daily business operations. Other items are classified as
tangible and intangible fixed assets or non-current liabilities. Current assets are measured at the lower of
acquisition cost and fair value. Current liabilities are recognized at nominal amount at the time of initial
recognition. Fixed assets are measured at acquisition cost but are written down to fair value if the impairment is not
expected to be temporary. Non-current liabilities are initially recognized at nominal amount.
Receivables
Trade receivables are recorded on the balance sheet at their nominal amount less deductions for provisions for
expected losses. Provisions for expected losses are made on the basis of an individual assessment of each
receivable
Other receivables are subject to a corresponding assessment.
Currency
Monetary items in foreign currency are measured using the exchange rate at the end of the accounting year.
Pension scheme
The company has a defined-contribution pension plan. The cost of the plan is recognized through profit or loss
when the liability occurs.
Financial risk management
For further information about financial risk management please refer to note 3 to the consolidated financial
statements.
78 | Consolidated financial statements 2021, Navamedic ASA
Share-based remuneration
The company has the option of awarding share-based remuneration to some executive personnel. The total
amount that must be recognized as an expense over the qualifying period is calculated on the basis of the fair value
of the awarded options.
Intangible assets
Licenses (product rights) and marketing authorizations
Navamedic holds rights to market and sell specific products in defined geographical areas. Investments related to
such licenses are amortized on a straight-line basis over their expected useful economic life, which typically range
between five to ten years.
Navamedic further distributes a number of products through wholesalers on behalf of rights holders. Investments
related to obtaining such marketing authorizations are amortized on a straight-line basis over their expected useful
economic life, which typically range between five to ten years. For products that are under registration, the
amortization of the cost of acquisition commences upon launch and is amortized over the period of the agreement.
Other intangible assets
Navamedic invests in information technology assets intended to products and marketing. Furthermore,
investments in licenses and marketing authorizations where the products in question have not yet been launched
due to regulatory or other reasons, are classified as other intangible assets until launch.
Contingent liabilities
Contingent liabilities are recognized if it is more than 50% likely that a settlement will be forthcoming. The value of
the settlement is based on a best estimate. Contingent consideration linked to future settlement clauses in the
Observe Medical acquisition is deemed to be an uncertain liability and not a conditional liability. The best estimate
of the settlement amount is updated on each balance sheet date and the change is recognized through profit or
loss.
Use of estimates
Preparing financial statements in accordance with good accounting practice requires the management team to
produce estimates and assumptions that affect the recorded assets, liabilities, revenue and expenses, as well as
explanatory notes concerning contingent assets and liabilities. The actual results may differ from these estimates
and assumptions.
Tax
The parent company’s tax expense for 2021 is calculated on the basis of 22%. The tax expense in the income
statement covers both the period’s tax payable and the change in deferred tax. Deferred tax is calculated on the
basis of the temporary differences that exist between accounting values and tax values, as well as the tax loss
carried forward at the end of the accounting year. Tax increasing and tax reducing temporary differences that are
reversed or may be reversed in the same period are offset and recorded net. The deferred tax asset is recorded after
taking into account future revenue in the company.
79 | Consolidated financial statements 2021, Navamedic ASA
Cash flow statement
The cash flow statement is prepared using the indirect method. Cash and cash equivalents consist of bank
deposits.
80 | Consolidated financial statements 2021, Navamedic ASA
Note 1 – Equity
Note 2 – Shares
(in NOK '1000)
Share capital
Share premium
reserve
Retained
earnings
Total
Balance as at 1 January 2021 11
316 147 610 -30 700 128 226
Share issues 780 18 221 19 001
Options 1 784 1 784
Net profit for the year -3 283 -3 283
Balance as at 31 December 2021 12 096 165 831 -32 199 145 728
Investments in group companies:
Acquired
Ownership/voting
rights
Navamedic AS - Denmark 25.09.13 100 %
Navamedic AB - Sweden 04.10.07 100 %
Novicus Pharma AS - Norway 27.02.19 100 %
Book value
Novicus Pharma AS 12 900
Navamedic AB 89 464
Total investments in group companies 102 364
81 | Consolidated financial statements 2021, Navamedic ASA
Note 3 – Intangible assets and tangible assets
(in NOK '1000)
Licenses
Other intangible
assets
Total
Accumulated cost
Balance at 1 January 2020
34 061 420 34 481
Additions
0 4 822 4 822
Accumulated cost 31 Dec 2020
34 061 5 243 39 303
Balance at 1 January 2021
34 061 5 243 39 303
Reclassification
-15 924 -963 -16 887
Additions
22 358 10 22 368
Accumulated cost 31 Dec 2021
40 494 4 289 44 784
Accumulated amortisation
Balance at 1 January 2020
-31 997 0 -31 997
Amortization
-532 -65 -597
Accumulated depreciation 31 Dec 2020
-32 529 -65 -32 594
Balance at 1 January 2021
-32 529 -65 -32 594
Reclassification
16 887 16 887
Amortization
-2 754 -537 -3 290
Accumulated depreciation 31 Dec 2021
-18 395 -602 -18 997
Expected useful economic life
5-10 years 5-10 years
Carrying amounts
At 31 December 2020
1 532 5 178 6 710
At 31 December 2021
22 099 3 688 25 787
82 | Consolidated financial statements 2021, Navamedic ASA
(in NOK '1000)
Tangible assets Total
Accumulated cost
Balance at 1 January 2020
136 136
A
dditions
158 0
Accumulated cost 31 Dec 2020
294 294
Balance at 1 January 2021
294 294
Reclassification
0 0
Additions
635 635
Accumulated cost 31 Dec 2021
929 929
Accumulated amortisation
Balance at 1 January 2020
-101 -101
Depreciation
-41 -41
Accumulated depreciation 31 Dec 2020
-141 -141
Balance at 1 January 2021
-141 -141
Reclassification
83 83
Depreciation
-138 -138
Accumulated depreciation 31 Dec 2021
-196 -196
Expected useful economic life
3 years
Carrying amounts
At 31 December 2020
152 152
At 31 December 2021
733 733
83 | Consolidated financial statements 2021, Navamedic ASA
Note 4 – Other receivables
Note 5 – Bank deposits, overdrafts etc.
(in NOK '1000)
2021 2020
VAT etc
0 705
Other receivables
1 777 1
293
Total
1 777 1 998
(in NOK '1000)
2021 2020
Bank deposits
1 843 4 784
Restricted funds
922 782
T
otal
2 765 5 566
84 | Consolidated financial statements 2021, Navamedic ASA
Note 6 – Income tax
(in NOK '1000)
2021 2020
Total tax expense is divided into;
Changes in deferred tax assets
0 0
Total taxes
0 0
(in NOK '1000)
2021 2020
Calculation of this year's tax base;
Net profit for the year
-3 283 -17 283
Permanent differences
544 23
Changes in temporary differences
4 314 -839
Deficit carried forward
-1 575 0
This year's tax base
0 -18 099
Tax payable, 22%
0 0
(in NOK '1000)
2021 2020
Overview of temporary differences;
Tangible assets
64 205
Outstanding receivables
0 0
Allowances for liabilities
-20 816 -17 890
Deficit carried forward
-48 518 -50 093
Total temporary differences
-69 269 -67 778
Capitalised deferred tax asset (22% / 22%)
-15 239 -14 911
Deferred tax not capitalised
6 071 5 743
Deferred tax asset
-9 168 -9 168
The company expects to be able to utilize this tax asset in the future.
85 | Consolidated financial statements 2021, Navamedic ASA
Note 7 – Employee benefits
The Managing Director and Board of Navamedic ASA correspond to the CEO and the corporate Executive
committee. Information about remuneration for the board and executive personnel can be found in note 16 to the
consolidated financial statements.
(in NOK '1000)
2021 2020
Salaries
22 974 11 538
Remuneration of board members
1 150 1 230
Employer's NI contributions
3
789 2 786
Pension expenses
1 245 1 271
Other payroll expenses*
1 572 2 066
Total
30 730 18 891
Number of FTEs
18 13
The company is obliged to have an occupational pension scheme for the company's employees.
The company has established an occupational pension scheme that satisfies the requirements of the law.
The scheme comprises all employees and an annual premium is expensed with NOK 1 245 030.
Remuneration for auditor specified as follows:
(in NOK '1000)
2021 2020
Statutory audit
584 2 045
Tax advice
0 0
Certification services
24 38
As
sistance other than auditing
0 0
Due Dilligence
0 0
Total
608 2 083
86 | Consolidated financial statements 2021, Navamedic ASA
Note 8 – Share capital and shareholder information
Note 9 – Sales revenue
Note 10 – Other operating expenses
Note 11 – Claims and contingent liabilites
Navamedic ASA is not a party to any ongoing legal proceedings or disputes. See note 22 in the consolidated
financial statements regarding contingent liabilities.
Share capital
Quantity Nominal Book value
A-shares
16 345 660 0,74 12 095 789
Overview of the largest shareholders as of 31.12.2021 and shares owned by the Board of Directors and senior executives in Navamedic ASA
see note 13 in the consolidated financial statements.
Geographical distribution:
(in NOK '1000)
2021 2020
Nordic countries
44 942 32 391
Other EU/EEC
319 0
Total
45
261 32 391
Other operating expenses consist of:
(in NOK '1000)
2021 2020
Rent, etc.
1 743 1 111
Other cost of premises, vehicles, office equipment etc
181 183
Misc. fees
5
521 11 126
Travel expenses
421 797
Insurance
580 523
IR expenses
1 201 848
Regulatory
4 724 788
Other expenses
3 505 4 707
Total other operating expenses
17 875 20 083
87 | Consolidated financial statements 2021, Navamedic ASA
Note 12 – Transactions with related parties
The following internal transactions between the parent company and subsidiaries took place in the accounting year
(figures in NOK thousands):
Note 13 – Financial items
Note 14 – Subsequent events
On 16 February 2022, Navamedic announced the launch of SmectaGO® for sale through pharmacies in Norway,
Sweden, Finland and Denmark this spring. SmectaGO® is a unique product developed to treat acute and chronic
diarrhea in adults and children above 8 years. The launch is part of a long-term agreement with the well-known
French pharmaceutical corporation Ipsen Consumer HealthCare wherein Navamedic has been appointed the
exclusive partner in the Nordics.
Navamedic was as of 31.12.2021 one of the largest shareholders in Observe Medical ASA with an ownership share of
21.54%. As publicly announced by Observe Medical ASA on January 14, 2022, the company acquired Biim
Company: Transaction: Nature:
2021 2020
Navamedic ASA Sales from parent to subsidiary
Royalty 7 019 4 104
Nav
amedic ASA Sales from parent to subsidiary
Service fee 37 937 25 660
Navamedic ASA Other
Adm.expenses 1 156
Navamedic AB Sales from subsidiary to parent company
Interest cost 3 022 4 034
Financial income
(in NOK '1000)
2021 2020
Interest income
2 786 2 515
Other financial income
0 328
Total financial income
2
786 2 843
Financial expenses
(in NOK '1000)
2021 2020
Interest expenses
3 827 4 848
Other financial expenses
29 32
Total financial expenses
3
856 4 880
88 | Consolidated financial statements 2021, Navamedic ASA
Ultrasound and performed a rights issue and a following share issue to fund the transaction. Navamedic opted not
to participate in the issue, consequently Navamedic’s ownership in Observe Medical ASA is as of the publication of
this report reduced to 7.89%.
Statement from the board and CEO
The board and CEO have on this date considered and approved the director’s report and financial statements for
the Navamedic Group and its parent company Navamedic ASA for 2021. The board has based this statement on
reports and statements from the chair of the board and CEO, the results of the group’s operations and on other
information that is material in assessing the group’s position and was provided to the board of the parent company.
To the best of our knowledge, confirm:
That the consolidated financial statements for 2021 have been prepared in compliance with the IFRS as established
by the EU, with the requirements for additional disclosures stipulated in the Norwegian Accounting Act.
That the annual financial statements for the parent company for 2021 have been prepared in compliance with the
Accounting Act and with good accounting practice in Norway.
The information in the financial statements provides a true and fair representation of the assets, liabilities, results
and overall financial positions of the Navamedic Group and Navamedic ASA as at 31 December 2021.
That the director’s 2021 report provides a true and fair overview of the performance, operating results and financial
positions of the group and the company, as well as the key factors regarding risk and uncertainty currently facing
the group and the company.
89 | Consolidated financial statements 2021, Navamedic ASA
The Board of Directors and CEO of Navamedic ASA
Oslo, 28 April 2022
Chair
Board member
Board member
Board member
Board member
CEO
90 | Consolidated financial statements 2021, Navamedic ASA
Auditor’s report
91 | Consolidated financial statements 2021, Navamedic ASA
92 | Consolidated financial statements 2021, Navamedic ASA
93 | Consolidated financial statements 2021, Navamedic ASA
94 | Consolidated financial statements 2021, Navamedic ASA
95 | Consolidated financial statements 2021, Navamedic ASA
96 | Consolidated financial statements 2021, Navamedic ASA
Alternative Performance Measures (APMs)
The following alternative performance measures are used in this report:
• Gross profit is equal to operating revenues minus cost of materials.
• Gross margin is gross profit as a percentage of operating revenue.
• EBITDA is gross profit less operating expenses, or Earnings Before Interest, Taxes, Depreciation and
Amortization
• EBITDA margin is EBITDA as a percentage of operating revenue.
• Equity ratio is the total equity as a percentage of total assets.
97 | Consolidated financial statements 2021, Navamedic ASA
•
Navamedic ASA
Henrik Ibsensgate 100
0255 Oslo
Telephone: +47 67 11 25 40
E-mail: firma@navamedic.com
www.navamedic.com
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