ANNUAL REPORT
2021
ANNUAL REPORT 2021
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Board of directors’ report
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Annual report Hospitality Invest AS
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Consolidated statement of Comprehensive Income
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Consolidated statement of Financial Position - Assets
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Consolidated statement of Financial Position – Equity
and Liabilities
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Consolidated statement of Change in Equity
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Consolidated statement of Cash Flow
Contents
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HOSPITALITY INVEST AS
ANNUAL REPORT 2021
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Company
As a family-owned investment company,
Hospitality Invest is targeting companies
that can help realize the Company’s vision
of creating sustainable and lasting values.
Hospitality Invest seeks companies where
it can contribute as a value-creating
partner for management and co-owners.
The Group employs about 23 000 people
per year end 2021, equivalent to 11 980
FTE (full time equivalent).
Operations
Care
(Norlandia Health & Care Group AS)
Norlandia Health & Care Group AS
(“NHC”) is a leading Nordic provider of
care services operating within five
business areas: Preschools, Care,
Integration Services, Individual & Family
and Real Estate. The parent company is
headquartered in
,
.
The Preschools operation includes the
preschool activities within Norlandia
Preschools AS and Kidsa Barnehager AS
(“Kidsa”). Per year-end 2021, Norlandia
Preschools and Kidsa Barnehager
operated 393 preschool units in Norway,
Sweden, Finland, Netherlands, Poland
and Germany, an increase of 28 units
year-on-year. 32 of the units are owned
50% and operated by Wekita (Germany).
Wekita and not consolidated in NHCs
accounts.
Preschools delivered a solid year in 2021,
in line with 2020, despite being negatively
affected by materially increased electricity
costs and sick leave. The Preschool
operations demonstrated track-record of
profitable growth through acquisitions and
establishment of new preschools. NHC
has added more than 180 new units to its
portfolio since 2016, which contributed
with more than NOK 1 billion in revenues.
In October 2021, NHC acquired Gnist, a
preschool chain with 17 large operational
units and 5 owned new and modern
properties. Strategic fit, synergy potential
and expected property gains indicated a
healthy value accretion. Overall, the
Preschools operation is progressing well
and is likely to continue to target effective
and sticky growth in all international
markets.
The Care operations provides services
within institutional elderly care, patient
hotels and home care services in Norway,
Sweden and Finland. As of year-end 2021,
45 elderly care homes were operated by
Norlandia, of which 42 in Sweden, 2 in
Norway and 1 in Finland. 9 of the homes
were own-management projects, including
a Generation Concept (preschool and
elderly care). Norlandia also operates 2
patient hotels in Norway, and 1 in Finland.
While Covid-19 is receiving less public
attention, it remains an uncertainty and
risk going forward. The pandemic had a
negative financial impact in 2021 and is
still affecting operations, primarily through
continued low occupancy within Elderly
care, increased costs related to personnel
and procurement and fatigue among
personnel.
The Integration Services operations is
offered through Hero Group AS (“Hero).
The company was established in 1987 and
has grown to become one of the largest
private providers of care services related
to forced migrants, refugees, and asylum
seekers in Norway. In addition, Hero
operates 5 reception centers in Germany.
The group has extensive competence and
experience acquired through 30 years of
operations. The service offering includes
reception centers for asylum seekers and
interpretation services. There are clear
indications that Hero is likely to play a
significant role as operator of acute
refugee centers, as the humanitarian crisis
in Ukraine continues to unfold. Hero is
working closely with UDI, the immigration
authorities, to address the current crisis.
The Individual & Family operations is
provided through Aberia AS (“Aberia”) – a
Nordic provider of health-, welfare- and
care services for children and young as
well as people with physical and mental
disabilities. The group was established in
2010 and has grown to become a
significant player in the Nordic market. The
services are divided in three main areas:
services related to childcare institutions
and foster homes; care services for people
within all age groups with physical and
mental disabilities; and respite care and
personal assistance. Most of the contracts
in the group are with the government,
municipalities, or city district authorities.
Aberia has been through an extensive
restructuring to stream-line operations.
Loss-making and non-core operations
have been terminated or divested, while
the core operations have a continued
strong focus on quality and reputation,
profitability and growth. The business area
is moving in the right direction and is
expected to generate healthy profitability
going forward.
The Real Estate operations, provided
through Care Properties AS is a real
estate developer for NHC. As part of
NHC’s business model, Care Properties
develops or acquires care related real
estate, for use in NHC operations.
Normally, the various properties will be
subsequently divested based on a long-
The board of directors’ report 2021
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HOSPITALITY INVEST AS
term lease contract with NHC. 2021 was
another solid year for the Real Estate
operations. The Real Estate operations
are well positioned to maintain the
profitability level seen in the recent years
and expect to complete several property
divestments during 1H’22.
Full year 2021 revenues for the Care
segment revenues increased from NOK
5,313.8 million in 2020 to NOK 5,933.7
million in 2021 primarily due to growth
within the Preschools operations. Profit
from operations was NOK 239.8 million in
2021, down from NOK 268.8 million in
2020.
As of 31.12.2021, NHC had a cash
balance of NOK 301.2 million, up from
NOK 285.4 million last year. In addition,
NHC has a revolving credit facility of NOK
350 million with DNB. NHC had total
assets of NOK 8,307.6 million per year-
end 2021, compared to NOK 7,462.8
million in 2020.
Staffing
(Otiga Group AS)
Otiga is a Nordic group of companies,
consisting of 10 specialized brands. The
Group offers a complete range of HR
services, ranging from blue-collar staffing
to executive search, selection,
management for hire and consulting
services. The Group is present in four
countries; Norway, Sweden, Denmark and
Finland, and is headquartered in Oslo.
Otiga Group serves a wide set of market
sectors across the Nordic region with a
multi-brand strategy, making the Groups
operations well-diversified and reduces
cyclicality. The Group employs 14,000
unique temporary workers, serves more
than 2500 clients and has ~375 full time
employees in the administration.
After an extraordinary 2020 with Covid-19
and decline in all markets where the group
is present, 2021 started with a satisfactory
Q1 where both revenue and Profit from
operations improved compared to 2020.
The improved momentum continued
throughout 2021 with exceptional results in
Q2 and Q3, as well as a solid Q4. The
experience from lockdowns and
restrictions during 2020, gave the group a
solid foundation for the growth
experienced during 2021. Although some
areas were still affected by Covid-19
restrictions and increased sick leave
during the year, the Group managed to
deliver a solid result.
The Norwegian business area increased
its revenue related to both staffing and
recruitment in 2021 compared to 2020.
The business area experienced strong
demand for staffing across all services
during the year. Especially for the areas
where covid-19 restrictions impacted the
markets during 2020, there has been an
increased demand during second half of
2021. The increase is mainly derived from
existing customers, but also new
customers are added to the portfolio as
the demand for staffing increase. The
demand for permanent recruitment
increased significantly during the year,
adding to the uplift in revenue. The
Swedish business area outperformed its
peers with growth in revenue during the
year. The staffing market performed very
well, and demand in all areas have picked
up to pre-covid levels. Especially the
export industries contributed to the uplift
during the second half of 2021. In the
Finnish market some business areas were
still impacted by Covid-19 restrictions
during 2021. Especially the construction
business area was impacted due to travel
restrictions and limited access to
candidates cross border. However, this
was partly offset by increased sales in
other sectors.
In the Norwegian business area, the
margin improvement compared to 2020 is
mainly driven by higher activity levels and
increased sales. The cost reductions and
efficiency measures performed in 2020 to
handle the business impacts of Covid-19
continued into 2021 and contributed to the
margin improvement. On the other hand,
increased sick leave rates and increased
cost related to staffing of candidates cross
border impacted the margin negatively.
The Swedish business area also
benefitted from the cost discipline and
healthy cost base achieved during the
pandemic when the activity improved
during 2021. Further the reduction of
social security tax for young workers and
reorganization of the less profitable units
had a positive impact on the margin. The
Finnish business area was significantly
impacted by the pandemic during 2020
and this continued into 2021. The
challenging market conditions within
construction lasted throughout the year.
The margin was also negatively impacted
by several organizational restructuring
initiatives, however the Group expects to
benefit from these initiatives going
forward.
Total revenues reached NOK 2,807.7
million in 2021, up from NOK 2,250.4
million in 2020, representing an increase
of 24.7%. Profit from operations increased
from 0.7% in 2020 to 2.7% in 2021, with
corresponding Profit from operations
amounting to NOK 75.8 million in 2021, up
from NOK 15.6 million in 2020.
Hotel Operations (Norlandia Hotel
Group incl. Tanumstrand and Up North
Hospitality)
Norlandia Hotel Group is a company with
long-term experience in hotel operations in
Norway and Sweden. The group currently
operates 30 hotels, of which 20 in Norway
and 10 in Sweden. Norlandia Hotel Group
operates with a multi-brand strategy,
ANNUAL REPORT 2021
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enabling the company to choose the best-
suited brand for each location. The hotels
are operated under strong and well-
established brands, including Radisson,
Best Western, Thon Hotels, First Hotels,
Choice, Scandic and Park Inn.
The Hotel Operations segment delivered
total revenues of NOK 692.1 million in
2021 compared to NOK 490.0 million in
2020. While showing strong growth rates,
the revenue in 2020 was hit significantly
by the Covid-19 pandemic,
Although 2021 revenues are compared to
low levels, the revenues showed steady
growth throughout the year. The increase
in revenues was driven by organic growth
and the acquisition of three additional
hotels.
The start of 2021 was challenging and
significantly impacted by pandemic related
restrictions, which led to several hotels
being temporary closed. The start of the
year was challenging in the Eastern part of
Norway as the most significant Covid-19
measures were introduced in this region.
However, most of NHG’s hotels reopened
during Q2 2021 due to increasing
vaccination rates in the population and
increasingly positive signals with regards
to phasing out restrictions. During the
summer, the Hotel Operations segment
experienced the same tendency as in
2020. While international travel restrictions
reduced travel activity and bookings from
the international customer group, domestic
travel offset the reduction in international
bookings. Hence, the Hotel Operations
segment achieved occupancy rates in line
with pre-pandemic levels.
During the autumn, the hotel segment
experienced continued strong growth
compared to 2020. November and
December showed strong bookings,
however December was heavily impacted
by new restriction due to the Omikron
outbreak.
The segment achieved NOK 11.1 million in
full year Profit from operations,
representing a margin of 1.6%. This
represents a significant improvement
compared to 2020, where Profit from
operations ended at NOK -58.2 million (-
12.4%). The improvement is driven by
increased revenues to cover the fixed
costs, however also positively impacted by
reduced cost levels due to several
management measures. Governmental
support has also in 2021 been awarded,
however far below the support levels in
2020.
The newly acquired hotels contributed
negatively to Profit from operations in total,
however mainly driven by start-up costs.
The new hotels are expected to contribute
positively going forward.
For 2022, the construction of the Radisson
RED-hotel at Økern, Oslo which NHG will
operate is progressing as planned and will
add 204 rooms to the hotel portfolio.
Real Estate
The Real Estate segment previously
comprised of four fully owned hotel
properties: Park Inn by Radisson Oslo
Airport Hotell (Gardermoen), Best Western
Hotel Scheele (Köping), Strand Hotell
Borgholm and Scandic Brennemoen Hotel.
In Q2 2021, these hotel properties were
sold to Pioneer Hotel Properties AS. In
addition, as per Q4 2021, all properties
acquired at the end of December 2020
were moved from the Other segment to
the Real Estate segment. Consequently,
the following entities are now included in
the Real Estate segment: Gaustaskogen
Eiendom AS, Voksentoppen ICE AS, GHT
Eiendom AS, Norab Eiendom Vest AS,
Jentespranget Eiendom AS and Norab
Eiendom Invest AS, Tjuvholmen Eiendom
AS.
Full year 2021 revenue for the Real Estate
Segment is NOK 32.9 million compared to
NOK 43.6 million in 2020, and a full year
profit from operations of NOK 16.1 million
in 2021 compared to NOK 8.9 in 2020.
Comments to the consolidated financial
statements
The Group’s consolidated revenues
increased from NOK 8 574,2 million in
2020 to NOK 9 847,3 million in 2021,
representing an increase of 14,8 %. All
segments delivered strong revenue growth
in 2021 compared to 2020 due to the
Covid-19 pandemic. Net profit increased
from NOK -120,4 million in 2020 to NOK
257,1 million in 2021.
Staff costs increased from NOK 6 276,7
million in 2020 to NOK 7 136,9 million in
2021, implying a 13,7 % percentage point
increase in staff cost. Share of associates
was mainly affected by the profits in
Pioneer Property Group and gain on
disposal of shares in associates. As a
result, the full year profit from operations
for 2021 ended at NOK 451,8 million
compared to NOK 271,7 million in 2020.
Cash flow from operating activities
decreased from NOK 673,7 million in 2020
to NOK 967,5 million in 2021. Net cash
used in investing activities increased from
NOK (51,7) million in 2020 to NOK (94,4)
million in 2021. Net cash received from
financing activities amounted to NOK
(807,2) million, as long-term loan has been
paid by NOK (29,4) and proceeds from
borrowings offset part of the interest
payments made.
The Group’s financial position is sound
and adequate to settle short-term
obligations with the Group’s liquid assets.
The liquidity reserve as of 31.12.2021
amounted to NOK 762,3 million, an
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HOSPITALITY INVEST AS
increase from NOK 704,1 last year. The
Group also has a revolving credit facility of
NOK 350 million.
The Group’s long-term debt amounted to
NOK 2 342 million, of which NOK 1,682.3
million relates to the bond loan in
Norlandia Health & Care Group. The bond
loan in Otiga Group of NOK 283,3 million
and in Hospitality Invest AS of NOK 850.0
million is due late 2022 and classified as
short-term debt.
Total assets of the Group increased from
NOK 11 572,7 million in 2020 to NOK
12 302,4 million in 2021, mainly due to
current assets. The equity ratio increased
from 10,3 % in 2020 to 11,8 % in 2021.
The consolidated financial statements
have been prepared in accordance with
International Financial Reporting
Standards (IFRSs) as adopted by EU.
Comments to the parent company
financial statements
2021 has been a year with both
challenges and opportunities. The
pandemic has remained challenging for
certain portfolio companies within the
group, with continued low revenue levels
as a result. A lot of efforts have been
made on supporting the companies
through these challenging times. Other
companies are operating in industries less
affected, or in industries having
experienced a swift revival. The
investment environment in general has
been characterized by great changes and
movements, creating exiting opportunities.
Hospitality Invest has been fairly active
during 2021, doing several acquisitions,
some new platform investments as well as
some minority investments.
Operating profit for the parent company
amounted to NOK (9,7) million in 2021,
reduced from NOK (12,8) million in 2020.
Net financials increased from NOK 128,6
million in 2020, to NOK 252,1 million in
2021, on the back of dividend from
Pioneer Property Group. Profit from the
year amounted to NOK 253,7 million, up
from NOK 129,7 million in 2020.
Total assets per 31.12.2021 were NOK
2 022,1 million.
Total long-term debt per 31.12.2021 was
NOK 4,5 million while short-term debt was
NOK 862,3 million which consists of the
listed bond issue (adjusted for issuing
costs) due late 2022.
Total equity amounted to NOK 1 155,3
million in 2021, up from NOK 901,6 million
in 2020, resulting in an equity ratio of 57,1
%.
Going concern
In accordance with the Norwegian
Accounting Act §3-3a, Hospitality Invest
confirms that the financial statements have
been prepared on a going concern basis.
This assumption is based on profit
forecasts for 2022 and the Group’s long-
term strategic forecasts. The Group’s
economic and financial position is sound.
Future challenges and market outlook
2021 was a challenging year and Covid-19
tested the Company’s ability to adjust,
innovate and excel. Hospitality Invest
exited 2021 even stronger than last year,
with improved profitability, in particular
within the Hotel- and Staffing segment.
While Covid-19 is receiving less public
attention, it remains an uncertainty and
risk going forward. The pandemic had a
negative financial impact in 2021 and all of
Hospitality Invest’s markets and
operations were affected.
The Russian invasion of Ukraine is clearly
a tragic humanitarian crisis. Hero, as
Norway’s largest operator of immigration
and refugee centers, is central in the
Government’s ambition to establish
accommodation for at least 30 000
Ukrainian refugees. This work is
continuing with intense focus.
Within the Care segment the regulatory
framework has a significant influence on
NHC and its ability to deliver services with
high quality. Political risk is therefore
present as major shifts may have a
significant impact in the way NHC deliver
its services. Currently, these risks are
most evident in Norway, where the new
Government has stated that a public
inquiry will be appointed, to investigate
non-profit operating models within private
welfare.
In November 2021, the new Norwegian
government proposed further regulatory
changes for private preschools, by
reducing the pension cost component of
the municipality grants from 13% to 10%.
The proposition has been implemented
and will, according to NHCs estimates,
negatively impact revenues in the
Preschools operations by NOK 40 million
per year. On the other hand, NHC expect
recent acquisitions as well as other
efficiency measures, to contribute
positively.
For the Staffing segment, 2021 was a
positive year and the segment is
considered well-positioned to continue the
positive development and continue to
capitalize on strong market conditions
during 2022. The impact of the pandemic
was more significant during the last month
of 2021 but is now limited in many
business areas except from increased sick
leave. While the Staffing segment expect
the strong market momentum to continue
into 2022, some trends could impact the
results going forward. This includes the
difficulty to meet all demand due to lack of
candidates within selected operations,
driven by solid demand, travel restrictions,
ANNUAL REPORT 2021
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and somewhat increased skepticism to
work cross-border among the candidates.
If this trend continues to materialize, the
candidate payments are likely to increase
within the impacted operations, negatively
impacting margins.
The hotel segment is expected to continue
its revenue growth in 2022, as newly
acquired hotels have been added to the
portfolio and positive effects from
renovated hotels are expected to increase
the revenue further. In addition, the
segment expects solid contributions from
the Radisson RED-hotel in Økern, Oslo.
Although the Hotel Operations segment is
expected to continue the strong growth in
2022, there are some uncertainties with
regards to the summer season. During the
summer in 2020 and 2021 the reduction in
international travel activity was offset by
the increase in domestic travel activity,
however this summer a large number of
Norwegians are expected to spend their
vacation abroad. Thus, it will be crucial to
have more international travellers coming
this summer. Although being a key
uncertainty, the Group does expect
international activity in Norway to increase
as travel restrictions are lifted in most
parts of world.
In addition, the segment is highly
vulnerable for new pandemic outbreaks
and corresponding government
restrictions. While there are no immediate
expectations of additional outbreaks, it
serves as general risk going forward.
Moreover, the management continues to
monitor the potential for more permanent
changes in travel- and conference activity
in the future.
The Real Estate segment is stable by
nature and is expected to develop
normally going forward.
Financial risk
Overall view on objectives and strategy
The Group is exposed to financial risk in
different areas, including operational risk,
market risk, exchange rate risk and credit
risk. The goal is to reduce the financial risk
as much as possible. In general, the
Group seeks to mitigate risk through
operational- and geographical
diversification. The Group has operations
across a wide range of segments and
operates in several countries, reducing
cyclicality. The Group’s current strategy
does not include active use of hedging
instruments to reduce financial risk,
however, each company in the Group is
continuously assessing this.
Market risk
The Group’s investments, results of
operations and financial conditions depend
on conditions prevailing for e.g. hospitality
services, staffing, childcare and care
services in the Nordic region. A significant
part of the Group is affected by public
policies and the political climate. The
demand for the Group’s services will be
dependent on inter alia the birth rates and
the longevity in the regions where the
group operates. Integration services will, in
addition to political decisions, be affected
by geopolitical situations, which may affect
the number of immigrants and asylum
seekers. Demand for private care services
may decrease depending on a number of
demographic and economic factors.
Demand for hotel stays in the Nordics are
dependent on the general economic
development in the region and the relative
attractiveness compared to other
destinations. The activity level within the
staffing market is closely linked to the
general macroeconomic environment.
Exchange rate risk
The Group has operations in i.a Norway,
Sweden, Finland, Netherlands, Poland
and Germany. Currency fluctuations may
have a negative effect on the Group’s
financial conditions and results of
operations. The Group is predominantly
exposed to the SEK/NOK exchange rate
as the financial statements are presented
in NOK and around 40 % of revenues are
generated in SEK. However, the Group
has a corresponding share of costs in
SEK, whereas approximately 26.5 % of its
bond debt is denominated in SEK, both
representing natural hedges to the
operations. The Group has a relatively
small but growing exposure to the
EUR/NOK exchange rate as operations in
the Netherlands, Poland, Germany and
Finland are growing. The Group is
monitoring the exposure and will consider
hedging this exposure in the future. The
Group is further exposed to changes in
interest rates as most long-term debt in
the Group is subject to floating interest
rates. The Group has not established any
interest rate hedging mechanisms.
Credit risk
The risk of losses on receivables are
considered very low in the Group as a
considerable part of revenues is towards
governmental entities and municipalities.
The Group has not yet experienced
significant losses on receivables.
Liquidity risk
The Group’s liquidity remains healthy at
year end 2021. The bond loan issued by
Hospitality Invest AS matures in October
2022 and represents the first large
refinancing in the group going forward.
Preparations for a refinancing is ongoing
and will be concluded well in advance of
maturity.
Regulatory risk
The Group’s operations are subject to
legal frameworks which may change in the
future. Changes in the legislation and
conditions of providing staffing services,
operating preschools, nursing homes,
reception centres or other parts of the
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HOSPITALITY INVEST AS
Groups’ business and operations, such as
profit restrictions, dividend restrictions or
staffing requirements, may significantly
and adversely impair the Group`s liquidity
and business model, which could have a
material adverse effect on the Group.
Political risk is therefore present as major
shifts may have a significant impact on the
way services are delivered. In general,
these discussions mainly relate to Norway
and Sweden. The Group’s operations
within the Care segment are subsidized by
public authorities. Changes in the political
climate or legislation for such subsidies
may have a material adverse effect on the
subsidiaries’, and eventually, the
Company’s business model, operations,
and financial condition.
Corporate governance
Hospitality Invest is a limited liability
company organized under Norwegian law
with a governance structure based on
Norwegian corporate law. The Company’s
corporate governance model is structured
to provide a foundation for long-term value
creation and to ensure control. The
Company has a board with three directors,
including the two largest shareholders and
a director from one of Hospitality Invest
Groups associated companies. The
governance structure is further based on
the Norwegian Code of Practice for
Corporate Governance and the Company
is continuously seeking to adopt a larger
part of the recommendations.
Hospitality Invest publishes quarterly
interim financial statements in addition to
the ordinary annual financial statements.
The financial statements shall satisfy legal
and regulatory requirements and be
prepared in accordance with the adopted
accounting policies and be published
according to the schedule adopted by the
Board. Closing of accounts, financial
reporting and key risk analysis are
provided monthly to the Group
Management. These monthly reports also
include financials per segment which are
analysed and addressed against set
budgets.
In connection with closing of accounts for
the various subsidiaries, business review
meetings are held to identify risk factors
and measures linked to important
accounting items or other factors. The
Management also has separate meetings
with the external auditor to review such
risk factors and measures in connection
with the financial reporting.
The Board of Directors of Hospitality
Invest has decided to act as Audit
Committee. The board has established
routines and instructions for their work,
including an annual plan for audit
committee matters, with recurring topics to
ensure continuous improvement and
control. The Company’s Audit Committee
met four times during 2021.
The Group has risk management
processes in place within each subsidiary,
which are adapted to fit the size,
complexity, and risk profile of each entity.
The routines focus on managing risks as
well as identifying opportunities.
THE WORKING ENVIRONMENT AND
THE EMPLOYEES
Total number of employees in the Group
amounted to around 11 980 the end of
2021. The working environment is
considered to be good and efforts for
improvements are made on an ongoing
basis. The Group aims to be a workplace
with equal opportunities and seeks to
prevent gender discrimination in all
aspects of our operations. Leave of
absence is an important performance
indicator and is measured throughout the
Group’s operational entities, but not on a
consolidated basis. There has been no
significant leave of absence in the parent
company during 2021.
Corporate Social Responsibility
In addition to being owner of a group of
smaller entities, Hospitality Invest Group
AS is a sole owner of Norlandia Hotel
Group AS and a majority owner of
Norlandia Health & Care Group AS and
Otiga Group AS. All operating groups have
a significant size and a visible position in
the market. NHC, in addition to Hospitality
Invest, have issued bond loans which are
listed on the Oslo Stock Exchange.
Hospitality Invest exercises active
ownership through board participation and
continuous participation in critical
processes in all operating groups. When
evaluating and following up our
investments, the Company consider
financial, commercial, ethical, legal, and
environmental criteria.
Hospitality Invest aspires to be an honest
and trustworthy company and owner. As a
major provider of social services, the
Company is conscious of its role in the
society and the importance of always
being a provider of high-quality services.
The Company’s reputation depends upon
understanding the principles of corporate
responsibility, and continuously
demonstrating integrity and honesty.
Corporate policies, as exercised by the
Board of Directors of Hospitality Invest and
its portfolio companies, include high
ethical standards, a conviction that all
employees are the most valuable
resource, regulatory and contractual
compliance, and a non-tolerance for
corruption.
A set of overall principles and guidelines
will apply to all of Hospitality Invest’s
investments. Each operating group’s
board of directors further adopts their own
governing documents adapted to the
specific business of the company. The
stakeholders, relevant or important themes
and specific challenges will vary from
company to company, depending on its
sector.
ANNUAL REPORT 2021
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Environmental report
The Group’s operations are not harmful to
the environment and are not regulated by
any licenses related to waste handling.
Nevertheless, Hospitality Invest is
committed to manage its environmental
responsibilities and initiated a process of
certifying our portfolio companies
according to the ISO 14001 standard more
than three years ago. The first company
was certified in 2015, and this work
continues going into 2022.
Allocation of income in the
parent company
Hospitality Invest AS’s result for 2021
ended at NOK 253,7 million. The Board of
Directors has proposed the net profit of
Hospitality Invest AS to be allocated as
follows:
To other equity: NOK 253,7
Events after balance sheet date
Hospitality Invest acquired ~52% of
Haneseth Gruppen AS in February 2022.
Haneseth Gruppen is leading provider of
multidisciplinary technical services across
Northern Norway. Haneseth has delivered
strong growth and solid Profit from
operations margins over the years and has
a strong cash position ending 2021.
Oslo, 29 April 2022
Board of Directors of Hospitality Invest AS
Kristian A. Adolfsen
Chairman of the Board
Roger Adolfsen
Chief Executive Officer
Johnny Sundal
Member of the Board
9
HOSPITALITY INVEST AS
Hospitality Invest AS’ consolidated
financial statements have been prepared
and presented in accordance with IFRSs
and IFRICs as adopted by the EU and
additional disclosure requirements in the
Norwegian Accounting Act, that should be
used as of 31.12.2021. The separate
financial statements for Hospitality Invest
AS have been prepared in accordance
with the Norwegian Accounting Act and
Norwegian accounting standards as of
31.12.2021. The Board of Directors report
for the group and the parent company is in
accordance with the requirements of the
Norwegian Accounting Act
and Norwegian
accounting standard, as of 31.12.2021.
To the best of our knowledge:
The consolidated and separate annual
financial statements for 2021 have been
prepared in accordance with applicable
accounting standards.
The consolidated and separate annual
financial statements give a true and fair
view of the assets, liabilities, financial
position, and result of operations as a
whole as of 31.12.2021, for the Group and
the Parent company.
The Board of Directors’ report for the
Group and the Parent company include a
true and fair review of:
The development and performance of the
business and the position of the Group
and the Parent company.
The principal risks and uncertainties the
Group and the Parent company face.
Oslo, 29 April 2022
Board of Directors of Hospitality Invest AS
Kristian A. Adolfsen
Chairman of the Board
Roger Adolfsen
Chief Executive Officer
Johnny Sundal
Member of the Board
Statement from the Board of Directors
ANNUAL REPORT 2021
10
HOSPITALITY INVEST - CONSOLIDATED
STATEMENT OF COMPREHENSIVE INCOME
(all amounts in NOK 1.000)
Note
2021
2020
OPERATING REVENUE
Operating revenue
4
Other revenue
4
NET OPERATING REVENUE
OPERATING EXPENSES
Raw materials and consumables used
Staff costs
5
Depreciation and amortisation expense
8,9,17
Other operating expenses
5
TOTAL OPERATING EXPENSES
Share of post-tax profits of associates
11
PROFIT FROM OPERATIONS
FINANCE
Finance income
6
Finance expense
6,17
NET FINANCE
-192 338
-439 911
PROFIT BEFORE TAX
-168 257
Tax expense
7
-47 808
PROFIT
-120 449
OTHER COMPREHENSIVE INCOME
Items that will not be reclassified to profit or loss
Remeasurements of post employment benefit obligations
18
-20 778
Deferred tax on remeasurement of post employment benefit obligation
15
-1 276
Income tax on items not reclassified
Gain on revaluation of land and buildings
Income tax relating to these items
-10 730
Items that may be subsequently reclassified to profit or loss
Currency translation differences
-40 211
-40 211
TOTAL OTHER COMPREHENSIVE INCOME
-35 685
TOTAL COMPREHENSIVE INCOME
-81 302
Profit controlling interests
-113 474
Profit non-controlling interests
-6 975
-120 449
11
HOSPITALITY INVEST AS
Total comprehensive income controlling interests
-87 931
Total comprehensive income non-controlling interests
-81 302
ANNUAL REPORT 2021
12
HOSPITALITY INVEST - CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(all amounts in NOK 1.000)
Note
2021
2020
ASSETS
NON-CURRENT ASSETS
Deferred tax asset
15
Property, plant and equipment
8
Right-of-use assets
17
Intangible assets
9, 10
Investment in associated companies
11
Loan to associated companies
12
Other investments
3
Other receivables
12, 20
TOTAL NON-CURRENT ASSETS
CURRENT ASSETS
Inventories
Trade and other receivables
12, 20
Market based investments
Cash and cash equivalents
21
TOTAL CURRENT ASSETS
TOTAL ASSETS
13
HOSPITALITY INVEST AS
HOSPITALITY INVEST - CONSOLIDATED
STATEMENT OF FINANCIAL POSITION
(all amounts in NOK 1.000)
Note
2021
2020
EQUITY AND LIABILITIES
EQUITY
Share capital
13
Own shares
-52
-52
Share premium Reserve
Other equity
Total equity attributable to owners of the parent
Non-controlling interest
TOTAL EQUITY
LIABILITIES
NON-CURRENT LIABILITIES
Pension liabilities
18
Loans and borrowings
14
Deferred tax liability
15
Lease Liability
17
TOTAL NON-CURRENT LIABILITIES
Current liabilities
Trade and other payables
16
Loans and borrowings
14
Lease Liability
17
Taxes payable
TOTAL CURRENT LIABILITIES
TOTAL LIABILITIES
TOTAL EQUITY AND LIABILITIES
ANNUAL REPORT 2021
14
STATEMENT OF CHANGES IN EQUITY
(all amounts in NOK 1.000)
Share
capital
Own
Shares
Share
premium
Retained
earnings
Translation
differences
Non-
controlling
interests
Total equity
31 DECEMBER 2019
-52
Comprehensive Income for the year
Profit
-113 474
-6 975
-120 449
Other comprehensive Income
-24 334
-
Total comprehensive Income for
the year
-137 808
-81 303
Contributions by and distributions to owners
Distribution to owners
-41 317
-41 317
Issue of ordinary shares
-21 282
Effect from acquisition subsidiary
Total contributions by and
distributions to owners
-52 383
-9 960
31 DECEMBER 2020
-52
Comprehensive Income for the year
Profit
Other comprehensive Income
-40 211
-9 477
-35 685
Total comprehensive Income for
the year
-40 211
Contributions by and distributions to owners
Increased non-controlling interest
from business combinations
Contribution-in kind
Distribution to non-controlling
interest
-15 684
-15 684
Effect from acquisition and sale of
subsidiary
-3 140
Total contributions by and
distributions to owners
31 DECEMBER 2021
-52
15
HOSPITALITY INVEST AS
HOSPITALITY INVEST - CONSOLIDATED
STATEMENT OF CASH FLOWS
(all amounts in NOK 1.000)
Note
2021
2020
CASH FLOWS FROM OPERATING ACTIVITIES
Profit for the year
-120 449
Adjustments for:
Depreciation of property, plant and equipment
8
Net received/gain on sale of assets
-52 291
-122 638
Share of post-tax profits of associates
11
-116 733
-52 990
Lease liability - depreciation
17
Changes in fair value of financial instruments
-13 192
Interest income/interest expense and financial items
Income tax expense
7
-47 808
Changes in working capital
Changes in accounts receivable and payables
-155 496
-273 423
Increase in inventories
-22 446
-209
Increase in trade and other payables
Increase in provisions and employee benefits
-47 812
CASH GENERATED FROM OPERATIONS
Income taxes paid
NET CASH FLOW FROM OPERATING ACTIVITIES
INVESTING ACTIVITIES
Net book value proceeds from sale of assets
Purchases of property, plant and equipment
8
-165 198
-461 638
Net investment in shares in associates and others
11
-187 916
-27 018
Loans to associated companies
Net investment in shares in subsidiaries
20
-126 130
Interest received
6
NET CASH USED IN INVESTING ACTIVITIES
-94 432
-51 715
FINANCING ACTIVITIES
Payments of long-term loan to finance institutions
14, 22
-29 433
-110 124
Changes in short-term loan to finance institutions
14
-2 865
-508
Proceeds from long-term borrowings from finance institutions
14
Capital increase related to non-controlling interests
Lease liability - amortization
6,17
-438 621
-117 868
Interest paid
6
-363 445
-238 002
Distribution to non-controlling interests
-15 684
NET CASH (USED IN) / FROM FINANCING ACTIVITES
-807 191
-344 171
Net increase in cash and cash equivalents
Cash and cash equivalents at beginning of year
21
Exchange (losses)/gains on cash and cash equivalents
-7 620
CASH AND CASH EQUIVALENTS AT END OF YEAR
ANNUAL REPORT 2021
16
Oslo, 29 April 2022
Board of Directors of Hospitality Invest Group AS
Kristian A. Adolfsen
Chairman of the Board
Roger Adolfsen
Chief Executive Officer
Johnny R. Sundal
Member of the Board
17
HOSPITALITY INVEST AS
NOTES TO THE CONOLIDATED STATEMENT
1. ACCOUNTING POLICIES
1.1 Basis of preparation
The principal accounting policies adopted in the preparation of the financial statements are set out below. The policies have been
consistently applied to all the years presented, unless otherwise stated.
These financial statements have been prepared in accordance with International Financial Reporting Standards, International Accounting
Standards and Interpretations (collectively IFRSs) issued by the International Accounting Standards Board (IASB) as adopted by the
European Union (“adopted IFRSs”).
The preparation of financial statements in compliance with adopted IFRS requires the use of certain critical accounting estimates. It also
requires Group management to exercise judgment in applying the Group’s accounting policies. The areas where significant judgements
and estimates have been made in preparing the financial statements and their effect are disclosed in note 2.
1.2 Changes in accounting policies
There are no changes in, or new accounting standards that have had material effect for the Group’s financial statement 2020.
Other amendments to standards
Other amendments to standards, issued but not yet effective, are either not expected to impact Hospitality Invest Consolidated financial
statements materially or are not expected to be relevant to the Consolidated financial statements upon adoption.
1.3 Revenue recognition
Revenue from contracts with customers is recognized when control of the goods or services is transferred to the customer at an amount
which reflects the consideration which the group expects to be entitled to in exchange for those goods or services. The group has
generally concluded that it is the principal in its revenue arrangements, because it typically controls the goods or services before
transferring them to the customers.
Contracts with customers are analysed using the five-step model and include:
●
●
●
●
●
As described below, the group has multiple revenue streams in accordance with the segment it operates in.
Care
The segment Care's revenue from contracts with customers mainly comprise of services delivered. The segment has assessed the
following performance obligations to exist for the contract with customers:
Preschools
This is the operation of kindergartens and accounts for almost half of the revenue. The operation is based on municipal approval of the
individual kindergarten where the company's revenue consists of grants from the municipalities and payment from parents. Both grants
and parental payments are based on regulations where grant rates are updated annually. The transaction price is based on an amount
per child within different age groups and is based on periodically counts of the actual number of children attending the respective
kindergarten. The parents apply and choose kindergarten. Parents may change kindergarten at short notice, in which way parental
payments stop. Grants from municipalities can be changed in the event of major changes in activity during the year.
What is promised to the customer is a kindergarten offer in accordance with applicable laws and regulations and adopted frameworks.
The customer receives and consumes the benefits of the services as the kindergarten fulfils the delivery obligation. The performance
obligation is the promise to transfer to the customer a series of distinct services that are substantially the same and that have the same
pattern of transfer to the customer. The revenue is recognized per day the kindergarten is open. Any adjustment in the number of
children is a variable consideration that is allocated to the month in question. The company mainly receives grants from the municipalities
ANNUAL REPORT 2021
18
in advance in the beginning of the quarter four times each year, which also implies that there are no contract balances of significance at
year-end. Parental payments take place every month.
Care
This is the operation of nursing homes and patient hotels, as well as the provision of home care services and other practical assistance.
The contracts related to the operation of nursing homes and patient hotel have a duration of 5-7 years. For the home care services, the
contract duration is 3-5 years.
For the operation of nursing homes, fixed monthly operating grants are given based on the number of places for which the nursing home
is dimensioned, regardless of whether the places are in use or not. There are different types of places; short-term and dementia. When
entering into the contract, the number of places the nursing home is dimensioned for the different types, and this can be changed along
the way. For patient hotels, consideration is received based on actual occupancy, while for home care the consideration is determined
based on the actual number of hours delivered. There is no minimum purchase beyond the agreed fixed monthly operating subsidy for
nursing homes.
The performance obligation to the customer is to provide the respective services within the framework and guidelines set by the
municipality as the client and central health authorities. The agreement is met through the 24/7 operation of nursing homes and patient
hotels, as well as through delivery of the number of hours actually requested by users within the framework agreements related to the
home care services. The customer receives and consumes the benefits of the services as the company satisfies the performance
obligations.
For nursing homes, the company stands ready every day to deliver according to the agreed capacity. Although the actual number of
seats used may vary slightly from day to day, a place does not stand empty for long, and it is considered that the legal requirement is met
for each day that passes and revenue is recognized straight-line over the year.
For patient hotels and home care, there is no minimum purchase and no firm consideration. Everything is variable and the consideration
can be attributed to the actual booking and the number of hours, which is also when the performance obligations are satisfied, and
revenue is recognized. In practice, for patient hotels and home care, revenue is recognized at an amount equal to the transaction price
we are entitled to invoice (IFRS 15.B16). Invoicing takes place in arrears for the current month, which means that there are no contract
balances of significance at year-end.
Integration services
This is the operation of asylum reception, performance of interpreting services and language teaching. The duration of the contracts
related to the operation of asylum reception is mainly 3 years. Interpreting services are mainly performed based on orders for individual
assignments. For language teaching, access per course/course group is granted. Each course normally has a duration of one year.
For the operation of asylum reception, regular annual operating grants are given, and a variable part is paid based on the actual number
of residents. The consideration for interpreting service is based on either fixed hourly rate or price per word when translating document.
For language teaching, a fee per course is received. What is promised to the customer is to operate the asylum centers in accordance
with the current guidelines of the public authorities, the provision of interpreting services, as well as the implementation of training
activities. The performance obligations are satisfied through the 24-hour operation of asylum reception, through the provision of
interpretive services based on actual demand and implementation of the course activities stipulated in the respective tenders.
The customer receives and consumes the benefits of the services as the company satisfies the performance obligations.
For asylum centers, the company stands ready to deliver 24 hours of services each day, against fixed consideration. We are in a serial
assessment where every day is distinct, and the fixed consideration is recognized each day on a straight line basis. In addition, there is
variable consideration related to actual use. The variable consideration is allocated to the actual use.
For the interpreting service there are small orders delivered over a short period. The interpreting service is recognized according to the
hours performed or the number of words executed. In practice, revenue is recognized by an amount equal to the transaction price we are
entitled to invoice (IFRS 15.B16). Consideration for courses is recognized as the courses are held. Courses make up an insignificant part
of revenue, and in practice the courses are assumed to be held evenly over the agreed period and are recognized accordingly. For the
operation of the asylum centers, invoicing is mainly for the current month. For interpreting service, the billing takes place within 30 days
after delivery. As a general rule, when it comes to language teaching, 80% of the consideration is received at the start of the course.
However, as it accounts for a small share of the segments' total activities, this does not provide any contract balances of significance at
year-end.
19
HOSPITALITY INVEST AS
Individual & Family
This is mainly the operation of child care and child welfare services, including services associated with user-led personal assistance
(BPA). Framework agreements for these services may run over several years. The user may choose a care place and have the option to
change the selection after a period, a maximum of one year. There are framework agreements where the customer makes call-offs, and
payment takes place according to actual use. There are minimum purchases in some agreements, mainly in child protection.
For the operation of care, the price is agreed per day/weekend/day for the number of places that are actually used. For child welfare
services, it is agreed on a minimum purchase and a number of additional places to be available without purchase obligation. The price is
agreed per place per day and varies depending on whether the space is within the minimum purchase or not and whether this space is
actually used or not. For BPA, the framework agreement is entered into based on the number of hours granted by the municipality, where
the consideration consists in price per hour actually delivered.
What is promised to the customer is to operate the service offering in accordance with applicable law and regulations. The performance
obligation is satisfied through the 24-hour operation of care, as well as child welfare institutions. For BPA, the promise is satisfied through
the delivery of actual requested hours. The customer receives and consumes the benefits as the company satisfies the performance
obligation. For all services within the segment, the company stands ready to provide requested places or services every day, against
variable consideration. The segment is in a serial assessment where every day is distinct, and the variable consideration is allocated to
the actual use. Where there is a minimum purchase, a consideration for the relevant 24/7 will be received at the relevant rates for the
used and not used seats, and these are directly related to standing ready to deliver the relevant 24/7. In practice, the revenue is
recognized by an amount equal to the amount the segment is entitled to invoice (IFRS 15.B16). Billing takes place both in advance and
in arrears for the current month depending on the type of service, which implies that there are no contract balances of significance at
year-end.
Staffing
The Staffing segments revenue mainly comprises of services delivered. Management has assessed the following performance
obligations to exist for the contract with customers: sales of temporary staffing, permanent placements, training and consulting &
outplacement services.
Temporary staffing
Revenues from temporary staffing are generally negotiated and invoiced on an hourly basis. The candidates record the hours they have
worked and these hours at the rate agreed with the customer are accumulated and billed according to agreement with the customer. The
rate includes the salary and salary-related employment cost for the candidate. Temporary staffing contracts can have a duration from
less than one month to several years but can generally be terminated earlier by the customer according to an agreed notice period. The
revenue from temporary staffing contracts is recognized over time upon rendering the service and in line with the segments right to
invoice the customer.
Permanent placement
Revenue from permanent placements includes the fee received. This fee is generally a percentage of the candidate's remuneration. The
revenues of these permanent placements are recognized on the completion of the service when the performance obligations are fulfilled,
being, in principle, the signing date of the candidate. For "retained assignments", revenue is recognized on the completion of certain pre-
agreed stages of the service, for which the fee is non-refundable.
Consulting and outplacement
Revenue from training and consulting and outplacement is recognized over time upon rendering the service. This can either be projects
invoiced on an hourly basis or fixed price projects. Fees invoiced prior to providing services are deferred and recorded in Other accrued
expenses until the services are rendered. Additionally, certain contracts may contain multiple performance obligations in which case the
segment allocates revenue to each performance obligation based on the standalone selling prices generally determined based on the
prices it would charge to other customers in similar circumstances.
Other operating revenue relates to revenue from activities outside the segments main business.
Hotel Operations
Revenues related to hotel operations corresponds to all revenues received from guests. The services rendered (including room rentals,
food and beverage sales and other ancillary services) are distinct performance obligations, for which prices invoiced to the guests are
representative of their stand-alone selling prices. These obligations are fulfilled over time when they relate to room rentals, along the stay
in the hotel, and at a point in time for other goods or services, when they have been delivered or rendered.
ANNUAL REPORT 2021
20
1.4 Principles of Consolidation and equity accounting
Subsidiaries are all entities (including structured entities) over which the group has control. The group controls an entity when the group
is exposed to, or has rights to, variable returns from its involvement with the entity and has the ability to affect those returns through its
power to direct the activities of the entity. Subsidiaries are fully consolidated from the date on which control is transferred to the group.
They are deconsolidated from the date that control ceases.
The acquisition method of accounting is used to account for business combinations by the group. Intercompany transactions, balances
and unrealised gains on transactions between group companies are eliminated. Unrealised losses are also eliminated unless the
transaction provides an evidence of an impairment of the transferred asset. Accounting policies of subsidiaries have been changed
where necessary to ensure consistency with the policies adopted by the group.
Non-controlling interests
Non-controlling interests are recognized as their proportional share of net assets. Transactions with non-controlling interests are
recognized in equity, that is, between the Parent Company shareholders and non-controlling interests. For acquisitions from non-
controlling interests, the difference between the purchase price paid and the actual acquired share of the carrying amount of the
subsidiary's net assets is recognized as a transaction within equity. Hence, no goodwill arises in these transactions. Gains and losses on
disposals of non-controlling interests are also recognized in equity. Losses attributable to non-controlling interests are apportioned even
in cases where non-controlling interests will be negative.
Associates
Associates are all entities over which the group has significant influence but not control or joint control. This is generally the case where
the group holds between 20% and 50% of the voting rights. Investments in associates are accounted for using the equity method of
accounting (see below), after initially being recognized at cost.
Equity method
Under the equity method of accounting, the investments are initially recognised at cost and adjusted thereafter to recognize the group's
share of the post-acquisition profits or losses of the investee in profit or loss, and the group's share of movements in other
comprehensive income of the investee in other comprehensive income. Dividends received or receivable from associates is recognized
as a reduction in the carrying amount of the investment.
When the group's share of losses in an equity-accounted investment equals or exceeds its interest in the entity, including any other
unsecured long-term receivables, the group does not recognize further losses, unless it has incurred obligations or made payments on
behalf of the other entity.
Unrealised gains on transactions between the group and its associates are eliminated to the extent of the group's interest in these
entities. Unrealised losses are also eliminated unless the transaction provides evidence of an impairment of the asset transferred.
Accounting policies of equity accounted investees have been changed where necessary and significant enough, to ensure consistency
with the Group policies.
Changes in ownership interests
The group treats transactions with non-controlling interests that do not result in a loss of control as transactions with equity owners of the
group. A change in ownership interest results in an adjustment between the carrying amounts of the controlling and non-controlling
interests to reflect their relative interests in the subsidiary. Any difference between the amount of adjustment to non-controlling interests
and any consideration paid or received is recognized in a separate reserve within equity attributable to owners of Hospitality Invest AS.
When the group ceases to consolidate or equity account for an investment because of loss of control, joint control or significant influence,
any retained interest in the entity is remeasured to its fair value with the change in carrying amount recognized in profit or loss. The fair
value becomes the initial carrying amount for the purposes of subsequently accounting for the retained interest as an associate, joint
venture or financial asset. In addition, any amounts previously recognized in other comprehensive income in respect of that entity are
accounted for as if the group had directly disposed of the related assets or liabilities. This may mean that amounts previously recognized
in other comprehensive income are reclassified to profit or loss.
If the ownership interest in a joint venture or an associate is reduced but joint control or significant influence is retained, only a
proportionate share of the amounts previously recognized in other comprehensive income are reclassified to profit or loss where
appropriate.
21
HOSPITALITY INVEST AS
1.5 Segment reporting
Operating segments are defined and reported according to the group’s internal reporting structure. The Company’s ultimate decision
maker is the board of directors, including the CEO. The board is responsible for allocating resources to each segment as well as monitor
the performance within each segment. The principles used in the segment reporting is consistent with the principles used when preparing
the financial statements. Transactions between segments are conducted on market terms.
1.6 Intangible assets
Goodwill
Goodwill represents the excess of the cost of a business combination over, the Group’s interest in the fair value of identifiable assets,
liabilities and contingent liabilities acquired and, the total acquisition date fair value of the identifiable assets, liabilities and contingent
liabilities acquired.
The cost of a business combination comprises the fair value of assets given, liabilities assumed and equity instruments issued, plus the
amount of any non-controlling interests in the acquiree plus, if the business combination is achieved in stages, the fair value of the
existing equity interest in the acquiree.
Contingent consideration is included in cost at its acquisition date fair value and, in the case of contingent consideration classified as a
financial liability, remeasured subsequently through profit or loss. Direct costs of acquisition are recognised immediately as an expense.
Goodwill is capitalised as an intangible asset with any impairment in carrying value being charged to the consolidated statement of
comprehensive income. Where the fair value of identifiable assets, liabilities and contingent liabilities exceed the fair value of
consideration paid, the excess is credited in full to the consolidated statement of comprehensive income on the acquisition date.
Trademarks, licenses and customer contracts
Separately acquired trademarks and licenses are shown at historical cost. Trademarks, licenses and customer contracts acquired in a
business combination are recognized at fair value at the acquisition date. They have a finite useful life and are subsequently carried at
cost less accumulated amortization and impairment losses.
Amortization methods and periods
Refer to note 9 for details about amortization methods and periods used by the group for intangible assets.
Externally acquired intangible assets
Externally acquired intangible assets are initially recognised at cost and subsequently amortised on a straight-line basis over their useful
economic lives.
Intangible assets are recognised on business combinations if they are separable from the acquired entity or give rise to other
contractual/legal rights. The amounts ascribed to such intangibles are arrived at by using appropriate valuation techniques (see section
related to critical estimates and judgements below).
Internally generated intangible assets (development costs)
Expenditure on internally developed products is capitalised if it can be demonstrated that:
●
●
●
●
●
●
Capitalised development costs are amortised over the periods the Group expects to benefit from selling the products developed. The
amortisation expense is included within the depreciation and amortisation expense line in the consolidated statement of comprehensive
income.
Development expenditure not satisfying the above criteria and expenditure on the research phase of internal projects are recognised in
the statement of comprehensive income as incurred.
ANNUAL REPORT 2021
22
1.7 Impairment of non-financial assets (excluding inventories and deferred tax assets)
Impairment tests on goodwill and other intangible assets with indefinite useful economic lives are undertaken annually at the financial
year end or when impairment indicators suggest that impairment triggers exist. Other non-financial assets are subject to impairment tests
whenever events or changes in circumstances indicate that their carrying amount may not be recoverable. Where the carrying value of
an asset exceeds its recoverable amount (i.e. the higher of value in use and fair value less costs to sell), the asset is written down
accordingly.
Where it is not possible to estimate the recoverable amount of an individual asset, the impairment test is carried out on the smallest
Group of assets to which it belongs for which there are separately identifiable cash flows; its cash generating units (‘CGUs’). Goodwill is
allocated on initial recognition to each of the Group’s CGUs that are expected to benefit from the synergies of the combination giving rise
to the goodwill. Impairment charges are included in profit or loss, except to the extent they reverse gains previously recognised in other
comprehensive income. An impairment loss recognised for goodwill is not reversed.
1.8 Foreign currency
Functional and presentation currency
Items included in the financial statements of each of the group's entities are measured using the currency of the primary economic
environment in which the entity operates ("the functional currency"). The consolidated financial statements are presented in NOK, which
is Hospitality Invest AS functional and presentation currency.
Transactions and balances
Foreign currency transactions are translated into the functional currency using the exchange rates at the dates of the transactions.
Foreign exchange gains and losses resulting from the settlement of such transactions and from the translation of monetary assets and
liabilities denominated in foreign currencies at year end exchange rates are generally recognized in profit or loss.
Foreign exchange gains and losses that relate to borrowings are presented in the statement of profit or loss, within finance costs. All
other foreign exchange gains and losses are presented in the statement of profit or loss on a net basis within income or other expenses.
Non-monetary items that are measured at fair value in a foreign currency are translated using the exchange rates at the date when the
fair value was determined. Translation differences on assets and liabilities carried at fair value are reported as part of the fair value gain
or loss. For example, translation differences on non-monetary assets and liabilities such as equities held at fair value through profit or
loss are recognized in profit or loss as part of the fair value gain or loss and translation differences on non-monetary assets such as
equities classified as available-for-sale financial assets are recognized in other comprehensive income.
Group companies
The results and financial position of foreign operations (none of which has the currency of a hyperinflationary economy) that have a
functional currency different from the presentation currency are translated into the presentation currency as follows:
- assets and liabilities for each balance sheet presented are translated at the closing rate at the date of the balance sheet
- income and expenses for each statement of profit or loss and statement of other comprehensive income are translated at average
- all resulting exchange differences are recognized in other comprehensive income.
On consolidation, exchange differences arising from the translation of any net investment in foreign entities are recognized in other
comprehensive income. When a foreign operation is sold or any borrowings forming part of the net investment are repaid, the associated
exchange differences are reclassified to profit or loss, as part of the gain or loss on sale.
Goodwill and fair value adjustments arising on acquisition of a foreign operation are treated as assets and liabilities of the foreign
operation and translated at the closing rate.
1.9 Financial assets
IFRS 9 Financial Instruments is used for the financial assets classified in the balance sheet.
23
HOSPITALITY INVEST AS
Trade and other receivables
(a) Classification and measurement
Trade receivables are initially recognized when they originate. All other financial assets and financial liabilities are initially recognized
when the Group becomes a party to the contractual provisions of the instrument. A trade receivable without a significant financing
component is initially measured at the transaction price.
In general, trade and other receivables are financial instruments classified in the "Amortized cost" category as long as they fulfill the
following criteria;
- it is held within a business model whose objective is to hold assets to collect contractual cash flows; and
- its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount
outstanding.
Interest bearing items in the amortized cost category shall be carried at amortized cost using the effective interest rate method.
Subsequent to initial recognition, interest-bearing borrowings shall be stated at amortized cost with any difference between cost and
redemption value being recognized in the income statement over the period of the asset on an effective interest rate basis.
The Staffing segment applies factoring for a significant portion of the trade receivables. As this result in a business model were Otiga
neither hold to collect nor hold to collect and sell the assets, trade receivables subject to factoring are financial instruments classified in
the "Fair value through profit or loss" category. For trade receivables where the risk non-payment is transferred to the factoror, the trade
receivables are derecognized when payment is received by the customer. For trade receivables where the segment still bears the risk of
non-payment the trade receivables are not derecognized until payment is received from the customer.
(b) Impairment
The group recognizes loss allowances for expected credit losses (ECLs) on financial assets measured at amortized cost. The group
measures loss allowances at an amount equal to lifetime ECLs, except for the following, which are measured at 12-month ECLs:
- debt securities that are determined to have low credit risk at the reporting date; and
- other debt securities and bank balances for which credit risk (i.e. the risk of default occuring over the expected life of the financial
instrument) has not increased significantly since initial recognition.
The group has limited loss allowances for trade receivables as counterparty risk is limited due to the fact that either the government is the
customer in most cases and that factoring is applied for a significant portion of the trade receivables where non-payment risk is
transferred to the factoror. In cases where there exists a counterparty risk the group uses an allowance matrix based on historical losses
adjusted for forward looking information.
Expected credit loss on account receivables is presented as an allowance. The allowance reduces the net carrying amount of trade
receivables in the statement of financial position.
(c) Loans and receivables
These assets are non-derivative financial assets with fixed or determinable payments that are not quoted in an active market. They arise
principally through the provision of goods and services to customers (e.g. trade receivables), but also incorporate other types of
contractual monetary asset. They are initially recognised at fair value plus transaction costs that are directly attributable to their
acquisition or issue and are subsequently carried at amortised cost using the effective interest rate method, less provision for impairment.
Impairment provisions are recognised when there is objective evidence (such as significant financial difficulties on the part of the
counterparty or default or significant delay in payment) that the group will be unable to collect all of the amounts due under the terms
receivable, the amount of such a provision being the difference between the net carrying amount and the present value of the future
expected cash flows associated with the impaired receivable. For trade receivables, which are reported net, such provisions are
recorded in a separate allowance account with the loss being recognised within administrative expenses in the consolidated statement of
comprehensive income. On confirmation that the trade receivable will not be collectable, the gross carrying value of the asset is written
off against the associated provision.
The group's loans and receivables comprise trade and other receivables and cash and cash equivalents in the consolidated statement of
financial position.
ANNUAL REPORT 2021
24
Cash and cash equivalents
Cash and cash equivalents are financial instruments classified in the ‘Amortised cost’ category. Cash and cash equivalents includes cash
in hand, deposits held at call with banks and other short-term highly liquid investments with original maturity of three months or less.
Equity Instruments
Investments in other companies not within the scope of other standards such as subsidiaries, joint ventures and associates are equity
instruments within scope of IFRS 9. The group has not selected the OCI option for its equity instruments; hence, they are classified and
measured in accordance to the category "Fair value through profit and loss".
Derivative Instruments
The group applies limited use of derivative for hedging purposes. In cases where derivative instruments exist, the group only use
derivatives for hedging purposes and does not apply hedge accounting in accordance to IFRS 9.
1.10 Financial liabilities
The Group classifies its financial liabilities into one of two categories, depending on the purpose for which the liability was acquired. None
of the Group’s financial liabilities are designated as hedging instruments.
Other than financial liabilities in a qualifying hedging relationship (see below), the Group’s accounting policy for each category is as
follows:
a) Fair value through profit or loss
This category comprises only out-of-the-money derivatives (see “Financial assets” for in-the-money derivatives). They are carried in the
consolidated statement of financial position at fair value with changes in fair value recognised in the consolidated statement of
comprehensive income. The Group does not hold or issue derivative instruments. Other than these derivative financial instruments, the
Group does not have any liabilities held for trading nor has it designated any financial liabilities as being at fair value through profit or
loss.
b) Other financial liabilities
Borrowings are initially recognised at fair value net of any transaction costs directly attributable to the issue of the instrument. Such
interest bearing liabilities are subsequently measured at amortised cost using the effective interest rate method, which ensures that any
interest expense over the period to repayment is at a constant rate on the balance of the liability carried in the consolidated statement of
financial position. Interest expense in this context includes initial transaction costs and premium payable on redemption, as well as any
interest or coupon payable while the liability is outstanding.
Trade payables and other short-term monetary liabilities, which are initially recognised at fair value and subsequently carried at
amortised cost, are using the effective interest method.
1.11 IFRS 13 fair value measurement hierarchy
IFRS 13 requires certain disclosures which require the classification of financial assets and financial liabilities measured at fair value
using a fair value hierarchy that reflects the significance of the inputs used in making the fair value measurement. The fair value
hierarchy has the following levels:
●
●
indirectly (i.e. derived from prices) (Level 2); and
●
The level in the fair value hierarchy within which the financial asset or financial liability is categorised is determined on the basis of the
lowest level input that is significant to the fair value measurement. Financial assets and financial liabilities are classified in their entirety
into only one of the three levels. The inputs used to measure fair value in Hospitality Invest are according to Level 3 in the fair value
hierarchy.
1.12 Share capital
Financial instruments issued by the Group are classified as equity only to the extent that they do not meet the definition of a financial
liability or financial asset.
The Group’s ordinary shares are classified as equity instruments.
25
HOSPITALITY INVEST AS
1.13 Retirement benefits
Defined contribution schemes
Contributions to defined contribution pension schemes are charged to the consolidated statement of comprehensive income in the year
to which they relate.
Defined benefit schemes
Defined benefit scheme surpluses and deficits are measured at the fair value of plan assets at the reporting date less plan liabilities
calculated using the projected unit credit method discounted to its present value using yields available on high quality corporate bonds
that have maturity dates approximating to the terms of the liabilities plus unrecognised past service cost.
Actuarial gains and losses are recognized in other comprehensive income as they arise.
Past service costs are recognised directly in income, unless the changes to the pension plan are conditional on the employees remaining
in service for a specified period of time. In this case, the past service costs are amortised on a straight line basis over the vesting period.
1.14 Leased assets
IFRS 16 contains a single lessee accounting model, which eliminates the distinction between operating and finance leases from the
perspective of the lessee. All contracts that meet the definition of a lease, other than short term leases and leases of low value items for
which a lessee has the option not to apply the measurement and presentation requirements of IFRS 16, is recorded in the statement of
financial position with a “right of use” asset and a corresponding lease liability. The “right of use” asset is subsequently accounted for
through depreciation of the asset and the liability is unwound using the interest rate inherent in the lease.
The Group has implemented IFRS 16 using the modified retrospective approach without restating comparative information, and by
recognizing the same amount as right-of-use and lease liabilities per 1 January 2019. At initial application the Group recognized a
significant lease liability and a significant right of use asset, while equity remained unchanged.
1.15 Deferred taxation
Deferred tax assets and liabilities are recognised where the carrying amount of an asset or liability in the consolidated statement of
financial position differs from its tax base, except for differences arising on:
●
●
affects neither accounting or taxable profit; and
●
and it is probable that the difference will not reverse in the foreseeable future.
Recognition of deferred tax assets is restricted to those instances where it is probable that taxable profit will be available against which
the difference can be utilised.
The amount of the asset or liability is determined using tax rates that have been enacted or substantively enacted by the reporting date
and are expected to apply when the deferred tax liabilities/(assets) are settled/(recovered).
Deferred tax assets and liabilities are offset when the Group has a legally enforceable right to offset current tax assets and liabilities and
the deferred tax assets and liabilities relate to taxes levied by the same tax authority on either:
●
●
●
or liabilities are expected to be settled or recovered.
1.16 Dividends
Dividends are recognised when they become legally payable.
1.17 Property, plant and equipment
Items of property, plant and equipment are initially recognised at cost. As well as the purchase price, cost includes directly attributable
costs and the estimated present value of any future unavoidable costs of dismantling and removing items. The corresponding liability is
recognised within provisions.
ANNUAL REPORT 2021
26
Freehold land and buildings are subsequently carried at fair value, based on periodic external valuations. These revaluations are made
with sufficient regularity to ensure that the carrying amount does not differ materially from that which would be determined using fair
value at the end of the reporting period. The valuation technique used is the Income method as discounted cashflows reflecting current
market expectations about the future cashflows are used when measuring the fair value. Changes in fair value are recognised in other
comprehensive income and accumulated in the revaluation reserve except to the extent that any decrease in value in excess of the credit
balance on the revaluation reserve, or reversal of such a transaction, is recognised in profit or loss.
Freehold land is not depreciated. Depreciation on assets under construction does not commence until they are complete and available
for use. Depreciation is provided on all other items of property, plant and equipment so as to write off their carrying value over their
expected useful economic lives. Expected useful economic is as follows:
- Land and buildings 50 years
- furniture, fixtures and equipment 3-10 years
At the date of revaluation, the accumulated depreciation on the revalued freehold property is eliminated against the gross carrying
amount of the asset and the net amount is restated to the revalued amount of the asset (elimination approach). The excess depreciation
on revalued freehold buildings, over the amount that would have been charged on a historical cost basis, is transferred from the
revaluation reserve to retained earnings when freehold land and buildings are expensed through the consolidated statement of
comprehensive income (e.g. through depreciation, impairment). On disposal of the asset the balance of the revaluation reserve is
transferred to retained earnings.
1.18 Government grants
Grants for revenue expenditure are presented as income the Group. Where retention of a government grant is dependent on the Group
satisfying certain criteria, it is initially recognised as deferred income. When the criteria for retention have been satisfied, the deferred
income balance is released to the consolidated statement of comprehensive income.
1.19 Provisions
The Group has recognised provisions for liabilities of uncertain timing or amount including those for onerous leases, warranty claims,
leasehold dilapidations and legal disputes. The provision is measured at the best estimate of the expenditure required to settle the
obligation at the reporting date, discounted at a pre-tax rate, reflecting current market assessments at the time of the remaining lease
term, value of money and risks specific to the liability. In the case of leasehold dilapidations, the provision takes into account the potential
that the properties in question may be sublet for some or all of the remaining lease term.
1.20 Cash flow statement
The cash flow statement is derived using the indirect method.
Cash flows from investing and financing activities are presented separately. Operating activities comprise both monetary and non-
monetary items. Interest income and interest expenses are presented as part of operating activities with the exception of interest paid
and received which is separated and presented as financial activities.
Cash and cash equivalents comprise of bank
27
HOSPITALITY INVEST AS
2. CRITICAL ACCOUNTING ESTIMATES AND JUDGEMENTS
The Group makes certain estimates and assumptions regarding the future. Estimates and judgements are continually evaluated based
on historical experience and other factors, including expectations of future events that are believed to be reasonable under the
circumstances. In the future, actual experience may differ from these estimates and assumptions. The estimates and assumptions that
have a significant risk of causing a material adjustment to the carrying amounts of assets and liabilities within the next financial year are
discussed below.
Judgements and estimates
(a) Impairment of goodwill
The Group is required to test, on an annual basis, whether goodwill has suffered any impairment. The recoverable amount is determined
based on value in use calculations. The use of this method requires the estimation of future cash flows and the choice of a discount rate
in order to calculate the present value of the cash flows. More information including carrying values is included in note 10. Any significant
modification of market conditions could translate into an inability to recover the carrying amounts of non-financial assets and result in an
impairment charge in the income statement
(b) Useful lives of property, plant and equipment and intangible assets
Measurement of property, plant and equipment and intangible assets with finite useful lives requires estimates for determining the asset’s
expected useful lives and residual values. Management judgement is required to determine the components and the depreciation.
Such judgements and estimates are based on the facts and information available to the management of the group. Changes in facts and
circumstances may require the revision of previous estimates, and actual results could differ from these estimates.
(c) Income taxes
Significant judgement is required in determining the provision for income taxes. During the ordinary course of business, there are
transactions and calculations for which the ultimate tax determination is uncertain. As a result, the Group recognises tax liabilities based
on estimates of whether additional taxes and interest will be due. These tax liabilities are recognised when, despite the Group’s belief
that its tax return positions are supportable, the Group believes that certain positions are likely to be challenged and may not be fully
sustained upon review by tax authorities. The Group believes that its accruals for tax liabilities are adequate for all open audit years
based on its assessment of many factors including past experience and interpretations of tax law. This assessment relies on estimates
and assumptions and may involve a series of complex judgements about future events. To the extent that the final tax outcome of these
matters is different than the amounts recorded, such differences will impact income tax expense in the period in which such
determination is made.
Deferred tax assets are recognized when it is considered probable that deductible temporary differences will be recovered in the
foreseeable future. To the extent that future taxable income and the application of existing tax laws in each jurisdiction differ significantly
from the Group’s estimate, the ability of the Group to realize the deferred tax assets could be impacted.
Such judgements and estimates are based on the facts and information available to the management of the Group. Changes in facts and
circumstances may require the revision of previous estimates, and actual results could differ from these estimates.
ANNUAL REPORT 2021
28
3. FINANCIAL INSTRUMENTS - RISK MANAGEMENT
The Group is exposed through its operations to the following financial risks:
●
●
●
●
●
In common with all other businesses, the Group is exposed to risks that arise from its use of financial instruments. This note describes
the Group’s objectives, policies and processes for managing those risks and the methods used to measure them. Further quantitative
information in respect of these risks is presented throughout these financial statements.
There have been no substantive changes in the Group’s exposure to financial instrument risks, its objectives, policies and processes for
managing those risks or the methods used to measure them from previous periods unless otherwise stated in this note.
Principal financial instruments
The principal financial instruments used by the Group, from which financial instrument risk arises, are as follows:
●
●
●
●
●
●
●
A summary of the financial instruments held by category is provided below:
Financial assets
Financial assets at fair
value through profit or
loss
Loans and
receivables
2021
2020
2021
2020
Cash and cash equivalents
-
-
762 341
704 073
Trade and other receivables
-
-
1 164 315
1 008 818
Market based investments
66 443
-
-
-
Other long term receivables/investments
181 296
204 536
199 840
189 281
Total financial assets
247 740
204 536
1 945 199
1 902 173
Financial liabilities
Financial liabilities at fair
value through profit or
loss
Financial liabilities
at amortised cost
2021
2020
2021
2020
Trade and other payables
-
-
1 826 760
1 715 229
Loans and borrowings
-
-
3 557 997
3 675 575
Total financial liabilities
-
-
5 384 757
5 390 804
General objectives, policies and processes
The Board has overall responsibility for the determination of the Group’s risk management objectives and policies and, whilst retaining
ultimate responsibility for them, it has delegated the authority for designing and operating processes that ensure the effective
implementation of the objectives and policies to the Group’s finance function. The Board receives monthly reports from the Group
Financial Controller through which it reviews the effectiveness of the processes put in place and the appropriateness of the objectives
and policies it sets.
The overall objective of the Board is to set policies that seek to reduce risk as far as possible without unduly affecting the Group’s
competitiveness and flexibility. Further details regarding these policies are set out below:
29
HOSPITALITY INVEST AS
Credit risk
Credit risk is the risk of financial loss to the Group if a customer or counterparty to a financial instrument fails to meet its contractual
obligations. The Group is mainly exposed to credit risk from credit sales. It is Group policy, implemented locally, to assess the credit risk
of new customers before entering contracts. Such credit ratings are taken into account by local business practices.
Most of the Group’s revenues are from (public) authorities. Credit risk related to these customers are minimal.
Credit risk also arises from cash and cash equivalents and deposits with banks and financial institutions. For banks and financial
institutions, only independently rated parties with minimum rating “A” are accepted.
Further disclosures regarding trade and other receivables, which are neither past due nor impaired, are provided in note 13.
Market risk
Market risk arises from the Group's use of interest bearing and foreign currency financial instruments. It is the risk that the fair value or
future cash flows of a financial instrument will fluctuate because of changes in interest rates (interest rate risk), foreign exchange rates
(currency risk) or other market factors (other price risk).
Fair value and cash flow interest rate risk
The Group is exposed to cash flow interest rate risk from long-term borrowings at variable rate. The Group has currently no Group policy
restricting the level of interest risk exposure. The level of interest risk is monitored centrally. Local operations are not permitted to borrow
long-term from external sources without Group management consent. Although the board accepts that this policy neither protects the
Group entirely from the risk of paying rates in excess of current market rates nor eliminates fully cash flow risk associated with variability
in interest payments, it considers that it achieves an appropriate balance of exposure to these risks.
During 2021 and 2020, the Group’s borrowings at variable interest rate were denominated in NOK and SEK.
Based on the various scenarios the Group has the possibility to manage its cash-flow interest rate risk by using floating-to-fixed interest
rate swaps (quantitative disclosures are given in note 12). The Group has not pursued an active strategy in order to mitigate any interest
rate risk. Normally the Group has raised long-term borrowings at floating rates and only to a minor extent swapped them into fixed.
Sensitivity
A change in the interest rate curve will result in a changed interest cost for the net exposure.
The effect on interest payments for a 0.5% change is presented below.
Interest
expense
Effect on
P&L
Effect on
Equity
Effect of a 0.5% increase
17 790
13 876
13 876
Effect of a 0.5% decrease
-17 790
-13 876
-13 876
Foreign exchange risk
The Group has operations in Norway, Sweden, Finland, Denmark, Germany, Netherland and Poland. Currency fluctuations may have a
negative effect on the Group’s financial conditions and results of operations. The Group is predominantly exposed to the SEK/NOK
exchange rate as the financial statements are presented in NOK and around 40% of revenues are generated in SEK. However, the
Group has a corresponding share of costs in SEK and about 35% of its bond debt is denominated in SEK, both representing natural
hedges to the operations. The Group has a small but growing exposure to the EUR/NOK exchange rate as operations in the
Netherlands, Germany, Poland and Finland are growing (note 4), however this represents a natural hedge to the growing investments.
The Group is monitoring the exposure and will consider hedging this exposure in the future. The effect if the NOK/SEK currency change
is presented below.
ANNUAL REPORT 2021
30
Fx-effect
Effect on
P&L
Effect on
Equity
Effect of SEK weakens of 1.0% toward NOK
7 500
5 850
5 850
Effect of SEK strenghten of 1.0% toward NOK
-7 500
-5 850
-5 850
Other market price risk
There is no other significant marked risk exposure on financial instruments.
Liquidity risk
Liquidity risk arises from the Group’s management of working capital and the finance charges and principal repayments on its debt
instruments. It is the risk that the Group will encounter difficulty in meeting its financial obligations as they fall due.
The Group's policy is to ensure that it will always have sufficient cash to allow it to meet its liabilities when they become due. To achieve
this aim, it seeks to maintain cash balances (or agreed facilities) to meet expected requirements for a period of at least 45 days. The
group also seeks to reduce liquidity risk by fixing interest rates (and hence cash flows) on a portion of its long-term borrowings, this is
further discussed in the 'interest rate risk' section above.
The liquidity risk of each Group entity is managed centrally by the Group treasury function. A major focus for the treasury function is to
ensure that there is sufficient liquidity for downpayment on non-current borrowings when they are due. The Group treasury assesses the
terms for borrowings on an ongoing basis, when needed the necessary adjustments are put into place.
Hospitality Invest needs to refinance its outstanding bond loan, as it matures in October 2022. This process is progressing well, and
several options appear available. The terms of the expected refinancing will be subject to the overall condition of the financial markets.
Otiga Group needs to refinance its bond loan as it matures in December 2022. During first quarter 2022 Otiga’s bond loan was
refinanced into a bankloan which matures in March 2025.
The following table sets out the contractual maturities of financial liabilities:
Total
Between 1
and 12 mth
Between 1
and 2 years
Between 2
and 3 years
Between 3
and 5 years
Over 5
years
At 31 December 2021
Loans and borrowings non-current
2 341 608
-704 564
243 206
136 573
2 079 021
586 500
Financial lease liability
6 084 995
674 450
493 355
542 397
1 182 891
3 191 903
Interest payment years 1 to 5 (current NIBOR)
743 714
160 400
208 663
192 003
182 648
-
Trade and other payables
1 826 760
1 826 760
-
-
-
-
Loans and borrowings
1 216 389
1 216 389
-
-
-
-
Total
12 213 467
3 173 435
945 223
870 973
3 444 560
3 778 402
Total
Between 1
and 12 mth
Between 1
and 2 years
Between 2
and 3 years
Between 3
and 5 years
Over 5
years
At 31 December 2020
Loans and borrowings non-current
1 735 398
16 111
902 475
349 426
4 267
463 119
Financial lease liability
5 276 582
530 659
527 473
418 966
854 777
2 944 708
Interest payment years 1 to 5 (current NIBOR)
293 811
107 595
106 596
50 642
28 978
-
Trade and other payables
1 715 229
1 715 229
-
-
-
-
Loans and borrowings
1 940 177
1 940 177
-
-
-
-
Total
10 961 197
4 309 771
1 536 544
819 033
888 022
3 407 827
Capital Disclosures
The Group’s objectives when maintaining capital are:
- to safeguard the entity's ability to continue as a going concern, so that it can continue to provide returns for shareholders and benefits
for other stakeholders, and
- to provide an adequate return to shareholders by pricing products and services commensurately with the level of risk.
31
HOSPITALITY INVEST AS
The Group sets the amount of capital it requires in proportion to risk. The Group manages its capital structure and makes adjustments to
it in the light of changes in economic conditions and the risk characteristics of the underlying assets. In order to maintain or adjust the
capital structure, the Group may adjust the amounts of dividends paid to shareholders, return capital to shareholders, issue new shares,
or sell assets to reduce debt.
Consistent with others in the industry, the Group monitors capital on the basis of the debt to adjusted capital ratio. This ratio is calculated
as net debt adjusted capital as defined above. Net debt is calculated as total debt (as shown in the consolidated statement of financial
position) less cash and cash equivalents.
Due to market uncertainty, the Group’s strategy is to preserve a strong cash base and achieve an equity to total capital ratio of
approximately 15-25%. The objective of this strategy is to secure access to finance at reasonable cost by maintaining a high credit rating.
The debt-to-equity ratios at 31 December 2020 and at 31 December 2021 were as follows:
2021
2020
Loans and borrowings
3 557 997
3 675 575
Less: cash and cash equivalents
762 341
704 073
Net interest bearing debt
2 795 657
2 971 502
Total equity
1 453 198
1 191 971
Total capital
12 302 358
11 572 744
Debt to equity ratio
1,9
2,5
Equity ratio (%)
11,8 %
10,3 %
ANNUAL REPORT 2021
32
4. SEGMENT INFORMATION, REVENUE AND OTHER OPERATING INCOME
The group's operations are divided into operating segments based on components of the business that are reviewed by the Chairman,
CEO and CFO, who are the company's chief operating decision makers. This is referred to as the management approach. Measurment
and reporting are done on an aggregated level. The group's operations are organised in such a way that the BoD, CEO and CFO review
the results of each business area. The business area are also operating segments and an own sub-group.
Based on the reporting requirments in IFRS 8 the group has 4 reportable segments:
●
Care;
Preschool, Care, Integration Services, Individual & Family and real estate.
●
Staffing;
Nordics.
●
Hotel Operations
; Norlandia Hotel Group is a company with long-term experience in hotel operations in Norway and Sweden
that currently manages 24 hotels, of which 14 hotels in Norway and 10 in Sweden. Also includes Tanumstrand.
●
Real Estate
2021. This segment now includes properties rented by the Care segment within both Preschools and Individual & Family
●
Other
consists of the Parent company Hospitality Invest and the majority of HI Capital’s investments, including several
diversified investments.
2021
Care
Staffing
Hotel
Operations
Real
Estate
Other /
Eliminations *
Total
Operating revenue
5 933 763
2 807 362
676 563
31 066
356 779
9 805 533
Other revenue
41 788
337
883
1 820
-3 109
41 718
Total operating revenue
5 975 550
2 807 699
677 446
32 886
353 670
9 847 251
Raw materials and consumables used
175 101
138 787
66 684
-
112 930
493 503
Staff costs
4 303 147
2 381 448
264 879
152
187 274
7 136 900
Depreciation and amortisation expense
554 212
53 881
130 209
7 399
14 036
759 737
Other operating expenses
704 637
157 716
204 596
8 570
46 548
1 122 067
Total operating expenses
5 737 097
2 731 832
666 369
16 121
360 788
9 512 207
Share of post-tax profits from associates
-1 290
-
-
-
118 023
116 733
Profit from operations
237 163
75 867
11 077
16 766
110 905
451 778
Finance income
68 884
4 012
1 730
226
111 745
186 598
Finance expense
-257 826
-68 556
-23 932
-4 591
-24 031
-378 936
Net finance
-188 942
-64 544
-22 201
-4 365
87 714
-192 338
Profit before tax
48 221
11 323
-11 124
12 401
198 619
259 439
33
HOSPITALITY INVEST AS
2020
Care
Staffing
Hotel
Operations
Real
Estate
Other /
Eliminations
Total
Operating revenue
5 313 829
2 250 382
470 588
43 627
422 769
8 501 195
Other revenue
75 680
64
6
-
-2 723
73 026
Total operating revenue
5 389 509
2 250 445
470 593
43 627
420 046
8 574 222
Raw materials and consumables used
131 440
56 843
37 628
-
88 559
314 469
Staff costs
3 849 098
1 974 754
199 531
-
253 332
6 276 714
Depreciation and amortisation expense
501 308
49 904
112 912
19 045
14 244
697 413
Other operating expenses
638 910
153 358
178 750
15 614
80 330
1 066 962
Total operating expenses
5 120 755
2 234 858
528 820
34 659
436 464
8 355 558
Share of post-tax profits from associates
5 935
-115
-
-
47 170
52 990
Profit from operations
274 688
15 587
-58 227
8 968
30 752
271 654
Finance income
20 961
8 138
10 702
-612
54 538
93 727
Finance expense
-344 478
-67 293
-16 554
-6 504
-98 809
-533 638
Net finance
-323 516
-59 156
-8 048
-7 116
-42 074
-439 911
Profit before tax
-48 828
-43 684
-66 275
1 852
-11 322
-168 257
*) In 2020 the Other segment include Norab Eiendom Group, which was bought 31.12.19 and sold 30.11.20, with a revenue of
TNOK 18.247 and a profit from operations of TNOK 1.220. In addition this segment include NH Europe Group with a revenue of
TNOK 178.795 and a profit from operations of TNOK 3.899. NH Europe Group is accounted for as share of post tax profits from
associates under the Care segment as NHC owns 49% of NH Europe Group. As Hospitality Invest Group owns the remaining
part of NH Europe Group the shares of profits from NH Europe is eliminated on Group level.
ANNUAL REPORT 2021
34
5. STAFF COSTS
2021
2020
Staff costs (including directors) comprise:
Wages and salaries
5 609 721
4 921 820
Defined contribution pension cost
299 589
221 096
Defined benefit pension cost (note 18)
58 420
36 251
Other benefits
96 181
128 700
Social security contributions and similar taxes
1 072 989
968 846
Total payroll and related costs
7 136 900
6 276 714
Number of employees full time equivalent (FTE)
11 980
10 678
Remuneration to senior management
2021
Wages
Pension
Other
Total
Kristian Adolfsen
2 100
23
546
2 669
Roger Adolfsen
2 100
23
297
2 421
Total compensation
4 200
47
843
5 090
Fee to board members
150
2020
Wages
Pension
Other
Total
Kristian Adolfsen
1 750
38
423
2 210
Roger Adolfsen
1 750
19
348
2 116
Total compensation
3 500
57
770
4 327
Fee to board members
150
Audit fees
The following amounts have been recognised as audit fees and related services during the period
2021
2020
Audit
17 348
17 631
Tax services
304
101
Attestation services
1 349
97
Other services
2 969
1 337
Total
21 970
19 166
35
HOSPITALITY INVEST AS
6. FINANCE INCOME AND EXPENSE
Recognised in profit or loss
2021
2020
Finance income
Interest received on bank deposits and receivables
15 920
18 845
Other finance income
96 008
20 684
Gain on derivatives classified as held for trading
-
-
Foreign exchange gain
74 669
54 198
Total finance income
186 598
93 727
Finance expense
Loss on derivatives classified as held for trading
777
-
Interest expense on financial liabilities measured at amortised cost
223 084
238 002
Lease liability - interest
140 361
117 868
Other financial expenses
-18 795
18 157
Foreign exchange loss
33 508
159 611
Total finance expense
378 936
533 638
Net finance income recognised in profit or loss
-192 338
-439 911
The above financial income and expense include the following in respect of assets (liabilities) not at fair value through
profit or loss:
2021
2020
Total interest income on financial assets
15 920
18 845
Total interest expense on financial liabilities
363 445
355 870
ANNUAL REPORT 2021
36
7. TAX EXPENSE
2021
2020
Current tax expense
Current tax on profits for the year
-36 508
-132 847
Total current tax expense
-36 508
-132 847
Deferred tax expense
Origination and reversal of temporary differences (Note 15)
38 831
85 040
Total deferred tax expense
38 831
85 040
Income tax expense
2 324
-47 808
The reasons for the difference between the actual tax charge for the year and the standard rate of corporation tax
in Norway applied to profits for the year are as follows:
2021
2020
Profit for the year
257 116
-120 449
Income tax expense
2 324
-47 808
Profit before income taxes
259 439
-168 257
Expected tax charge based on the standard rate of Norwegian corporation tax at the
domestic rate of 22/22 %
57 077
-37 016
Tax effect of share of post-tax profits of associated companies
-25 681
-11 658
Change in unrecognized deferred tax assets
22 436
17 789
Permanent differences
-51 508
-16 922
Total tax expense
2 324
-47 808
37
HOSPITALITY INVEST AS
8. PROPERTY, PLANT AND EQUIPMENT
Land and
buildings
Work in
progress
Furniture,
fixtures and
equipment
Total
At 1 January 2020
Cost or fair value
1 396 756
110 358
557 728
2 064 842
Accumulated depreciation
-181 515
-
-379 306
-560 821
Net book amount
1 215 241
110 358
178 421
1 504 020
Year ended 31 December 2020
Opening book amount
1 215 241
110 358
178 421
1 504 020
Exchange differences
-640
-954
-2 875
-4 469
Acquisition of subsidiary
129 287
-
7 960
137 247
Additions
116 564
23 965
72 594
213 123
Disposals
-510 559
-
-5 415
-515 974
Depreciation
-31 725
-
-57 691
-89 417
Impairment revaluation*
-1 830
-
-
-1 830
Reclasification
-70 014
-19 682
88 177
-1 519
Closing net book amount
846 326
113 687
281 170
1 241 183
At 31 december 2020
Cost or fair value
1 059 566
113 687
718 168
1 891 421
Accumulated depreciation
-213 240
-
-436 998
-650 238
Net book amount
846 326
113 687
281 170
1 241 183
Year ended 31 December 2021
Opening book amount
846 326
113 687
281 170
1 241 183
Exchange differences
-961
-2 285
5 540
2 293
Acquisition of subsidiary
338 617
-
9 542
348 159
Additions
85 131
2 201
67 158
154 490
Disposals
-796 507
-2 023
-5 827
-804 356
Depreciation
-25 199
-
-61 032
-86 232
Reclasification
56 741
-75 321
18 265
-315
Closing net book amount
504 148
36 259
314 814
855 222
At 31 december 2021
Cost or fair value
742 588
36 259
812 845
1 591 691
Accumulated depreciation
-238 439
-
-498 030
-736 470
Net book amount
504 148
36 259
314 814
855 222
* The cost of the revalued assets is TNOK 258.253 and the fair value of these assets is TNOK 574.247. The P&L effect of the
revaluation is TNOK (7.075) and the OCI effect is TNOK 5.245 giving av total effect of TNOK 1.830 for 2020.
Useful life of buildings (land not depreciated)
50 years
3-10 years
Depreciation method
Linear
Linear
Property, plant and equipment pledged as security for liabilities.
2021
2020
Land and buildings, including work in progress
540 407
960 013
ANNUAL REPORT 2021
38
9. INTANGIBLE ASSETS
Goodwill
Other
intangible
assets*
Total
At 1 January 2020
Cost or fair value
2 141 717
1 319 314
3 461 031
Accumulated amortisation
-25 430
-305 717
-331 147
Net book amount
2 116 287
1 013 598
3 129 884
Year ended 31 December 2020
Opening book amount
2 116 287
1 013 598
3 129 884
Additions
1 970
8 738
10 708
Disposal
-41 388
-8 189
-49 576
Acquisition of subsidiary
53 818
1 235
55 054
Exchange differences
56 745
18 750
75 495
Amortisation
-
-71 054
-71 054
Impairment loss
-2 000
-
-2 000
Closing net book amount
2 185 433
963 078
3 148 511
At 31 december 2020
Cost or fair value
2 210 863
1 339 849
3 550 712
Accumulated amortisation
-25 430
-376 771
-402 201
Net book amount
2 185 433
963 078
3 148 511
Year ended 31 December 2021
Opening book amount
2 185 433
963 078
3 148 511
Additions
4 715
5 370
10 085
Disposal
-107 343
-
-107 343
Acquisition of subsidiary
269 606
28 804
298 410
Exchange differences
-20 633
-27 884
-48 517
Amortisation
-
-71 330
-71 330
Impairment loss
-4 498
-3 659
-8 157
Closing net book amount
2 327 280
894 379
3 221 659
At 31 december 2021
Cost or fair value
2 352 710
1 342 480
3 695 190
Accumulated amortisation
-25 430
-448 101
-473 531
Net book amount
2 327 280
894 379
3 221 659
* Other intangible assets include trade marks, customer contracts, software and licenses, resarch and development.
Current estimtes of useful economic life of intangible assets are as follows:
Goodwill
Indefinite
Other intangible assets
5 -20 years
39
HOSPITALITY INVEST AS
10. GOODWILL AND IMPAIRMENT
Goodwill and other intangible assets result from business combinations and mainly relates to strategic investments in order to strengthen
the platform for the provided services within the Group. Such investments provide synergies both between segments and countries as it
enables developing new services and to seek business opportunities between countries. The managing directors within a segment
operate across countries and businesses within a segment is considered to be integrated. Goodwill and other intangible assets are
allocated to the identified cash-generating units (CGU).
Impairment testing for cash-generating units (CGU) containing intangible assets is reported on a aggregate level while testing is
performed on a lower level.
Impairment testing for cash-generating units (CGU) containing goodwill
The material amount of goodwill and other intangibles is allocated as follows between four CGU's:
2021
Care
2 452 049
Staffing
697 509
Other
54 443
Total goodwill & intangible assets
3 204 001
IMPAIRMENT TEST FOR THE CARE CGU
Cash flow projections and assumptions
For the Care CGU the impairment model was based on a 5-year forecast of discounted cash flow based on the long-term business plan
plus a terminal value (calculated by Gordon’s model). The net discounted cash flows were calculated after tax. Estimated cash flow
projections beyond the period covered by the most recent long-term business plan are derived by extrapolating the projections based on
the forecasts using a growth rate of 2.0% for subsequent years.
Discount rate assumptions
The required rate of return was calculated by use of the WACC methodology. The input data of the WACC was chosen by individual
assessment of each parameter. Information from representative sources, peer groups etc. was used to determine the best estimate. The
WACC was calculated to 6.0% after tax.
Sensitivity analysis
The following sensitivity analysis were carried out to test whether changes in relevant parameters would influence the conclusion:
1. Changes in cash flows:
The analysis showed that a decline in free cash flow in excess of 55% for the Preschool CGU, 38% for the Care CGU, 50% for the
Integration Services CGU and 72% for the Individual and Family CGU was necessary to change the conclusion. The result indicated that
there had to be a moderate decline in the market situation to trigger impairment.
2. Changes in discount rates:
The analysis showed that an increase in discount rate of 4.9%-point for the Preschool CGU, 0.8%-point for the Care CGU, 3.8%-point for
the Integration Services CGU and 9.9%-point for the Individual and Family CGU was needed to change the conclusion. The result
indicated that the test was robust in terms of the level of discount rate.
Impairment - test result and conclusion
Value in use for the CGU’s exceeds carrying amount. The impairment test indicated no requirement for impairment of the goodwill. As
the conclusion is somewhat sensitive for changes in the parameters the company will monitor closely the development each quarter the
following year.
ANNUAL REPORT 2021
40
IMPAIRMENT TEST FOR THE STAFFING CGU
Cash flow projections and assumptions
For the Staffing CGU the impairment model was based on a 5-year forecast of discounted cash flow based on the long-term business
plan plus a terminal value (calculated by Gordon’s model). The net discounted cash flows were calculated after tax. Estimated cash flow
projections beyond the period covered by the most recent long-term business plan are derived by extrapolating the projections based on
the forecasts using a growth rate of 2.0% for subsequent years.
Discount rate assumptions
The required rate of return was calculated by use of the WACC methodology. The input data of the WACC was chosen by individual
assessment of each parameter. Information from representative sources, peer groups etc. was used to determine the best estimate. The
WACC was calculated to 10.5 % after tax.
Sensitivity analysis
The following sensitivity analysis were carried out to test whether changes in relevant parameters would influence the conclusion:
1. Changes in operating margin:
The analysis showed that a decline in EBITDA margin of 3.84%-point in Norway, 4.92%-point in Sweden and 1.67%-point in Finland
each year was necessary to change conclusion.
2. Changes in growth assumption:
The analysis showed that a reduction in growth in the terminal value of 40.75%-point in Norway, 29.69%-point in Sweden and 9.49%-
point in Finland was necessary to change the conclusion. The result indicated that there had to be a significant decline in the market
situation to trigger impairment.
3. Changes in discount rates:
The analysis showed that an increase in discount rate with 43.95%-point in Norway, 49.57%-point in Sweden and 27.80%-point in
Finland was needed to change the conclusion. The result indicated that the test was robust in terms of the level of discount rate.
Impairment - test result and conclusion
Value in use for the CGU’s exceeds carrying amount. The impairment test indicated no requirement for impairment of the goodwill.
41
HOSPITALITY INVEST AS
11. SUBSIDIARIES AND ASSOCIATES
List of subsidiaries
The subsidiaries of Hospitality Invest AS, all of which have been included in these consolidated financial statements, are as follows:
Country of
incorporation
Place of
office
Ownership
interest
Name
2021
2020
Norlandia Hotel Group AS
Norge
Oslo
100,0 %
100,0 %
HI Capital AS
Norge
Oslo
100,0 %
100,0 %
Guard Hotell AS
Norge
Oslo
0,0 %
100,0 %
Guard Hotell II AS
Norge
Oslo
0,0 %
100,0 %
Norlandia Drift AB
Sverige
Tanum
100,0 %
100,0 %
Skottet Fastighets AB
Sverige
Malmö
100,0 %
100,0 %
Köping Hotellfastighet AB
Sverige
Köping
0,0 %
100,0 %
Strand Hotell Borgholm Fastighets AB
Sverige
Borgholm
0,0 %
100,0 %
Norlandia Health & Care Group AS
Norge
Oslo
97,0 %
100,0 %
Otiga Group AS
Norge
Oslo
65,6 %
68,4 %
Tjuvholmen Eiendom AS
Norge
Oslo
100,0 %
0,0 %
Subsidiaries of Subsidiaries - Norlandia Health & Care Group AS 100 % interest
NHC Managament AS
Norway
Oslo
100,0 %
100,0 %
Norlandia Care Group AS
Norway
Bodø
100,0 %
100,0 %
Kidsa Drift AS
Norway
Bergen
100,0 %
100,0 %
Hero Group AS
Norway
Stavanger
100,0 %
100,0 %
Aberia AS
Norway
Oslo
100,0 %
100,0 %
NHC Eiendom AS
Norway
Oslo
100,0 %
100,0 %
Care Properties AS
Norway
Oslo
100,0 %
100,0 %
NHC Services AS
Norway
Oslo
100,0 %
100,0 %
NH Europe Holding AS
Norway
Oslo
100,0 %
49,0 %
Material operating companies within Norlandia Health & Care Group
Norlandia Barnehagene AS
Norway
Gardermoen
100,0 %
100,0 %
Norlandia Barnehagene II AS
Norway
Oslo
100,0 %
100,0 %
Kidsa Barnehager AS
Norway
Bergen
100,0 %
100,0 %
Kids2Home AB
Sweden
Stockholm
100,0 %
100,0 %
Norlandia Förskolor AB
Sweden
Stockholm
100,0 %
100,0 %
Norlandia Päiväkodit Oy
Finland
Helsinki
100,0 %
100,0 %
Norlandia Kinderopvang BV
Netherlands
Utrecht
100,0 %
100,0 %
Norlandia Kinderopvang Rotterdam B.V.
Netherlands
Utrecht
100,0 %
100,0 %
Norlandia Care Norge AS
Norway
Oslo
100,0 %
100,0 %
Norlandia Hjemmeomsorg AS
Norway
Oslo
100,0 %
100,0 %
Norlandia Care OY
Finland
Tampere
100,0 %
100,0 %
Norlandia Care AB
Sweden
Stockholm
100,0 %
100,0 %
Kosmo AB
Sweden
Stockholm
100,0 %
100,0 %
Hero Norge AS
Norway
Stavanger
100,0 %
100,0 %
Aberia Ung AS
Norway
Moss
100,0 %
100,0 %
Aberia Avlastning BPA AS
Norway
Moss
100,0 %
100,0 %
Aberia Omsorg AS
Norway
Moss
100,0 %
100,0 %
Norlandia Sprelloppbarnehagene AS
Norway
Oslo
100,0 %
100,0 %
Marcus Assistans AB
Sweden
Örebro
76,0 %
76,0 %
ANNUAL REPORT 2021
42
Subsidiaries of Subsidiaries - Otiga Group AS 65.6 % interest
Personalhuset Staffing Group AS
Norway
Oslo
100,0 %
100,0 %
Otiga Sverige AB
Sweden
Stockholm
100,0 %
100,0 %
Personalhuset Staffing Group OY
Finland
Helsinki
100,0 %
100,0 %
Otiga Group Management AS
Norway
Oslo
100,0 %
100,0 %
Personalhuset Service Management AS
Norway
Oslo
100,0 %
100,0 %
Aaltovoima OY
Finland
Espoo
100,0 %
100,0 %
Aaltovoima Logistiikka OY
Finland
Espoo
100,0 %
100,0 %
Active Search A/S
Denmark
Copenhagen
100,0 %
100,0 %
Agito E-Helse AS
Norway
Kristiansand
100,0 %
100,0 %
Vinde Tilkomstteknikk AS
Norway
Trondheim
100,0 %
100,0 %
Mojob AS
Norway
Trondheim
59,5 %
59,5 %
Assessit Holding AS
Norway
Oslo
51,0 %
51,0 %
On Off Bemanning AS
Norway
Bergen
51,0 %
51,0 %
Otiga Invest
Norway
Oslo
100,0 %
100,0 %
Agito Nordic AB
Sweden
Stockholm
100,0 %
100,0 %
Agile Interim AS
Norway
Oslo
100,0 %
100,0 %
Aktiebolaget Söder & Co Förvaltning AB **
Sweden
Borås
28,0 %
39,1 %
** 69.99 % of the voting rights
Subsidiaries of Subsidiaries - Norlandia Hotel Group AS 100.0 % interest
Airport Hotelldrift AS
Norway
Ullensaker
100,0 %
100,0 %
Horten Hotelldrift AS
Norway
Borre
100,0 %
100,0 %
Karl Johan Hotellinvest AS
Norway
Oslo
96,7 %
96,7 %
Kristiansand Hotelldrift AS
Norway
Kristiansand
100,0 %
100,0 %
Levanger Hotelldrift AS
Norway
Levanger
100,0 %
100,0 %
Lofoten Hotelldrift AS
Norway
Leknes
100,0 %
100,0 %
Måløy Hotelldrift AS
Norway
Måløy
100,0 %
100,0 %
Narvik Hotelldrift AS
Norway
Narvik
100,0 %
100,0 %
Otta Hotelldrift AS
Norway
Sel
100,0 %
100,0 %
Spjelkavik Hotelldrift AS
Norway
Ålesund
100,0 %
100,0 %
Viking Hotelldrift AS
Norway
Oslo
100,0 %
100,0 %
NHG Management AS
Norway
Oslo
100,0 %
100,0 %
NHG Development AS
Norway
Oslo
100,0 %
100,0 %
Norlandia Drift AS
Norway
Oslo
100,0 %
100,0 %
Avesta Hotelldrift AB
Sweden
Avesta
100,0 %
100,0 %
Kalmarsund Hotell AB
Sweden
Kalmarsund
100,0 %
100,0 %
Köping Hotelldrift AB
Sweden
Köping
100,0 %
100,0 %
Ronneby Hotell AB
Sweden
Ronneby
100,0 %
100,0 %
Strand Hotell Borgholm AB
Sweden
Borgholm
100,0 %
100,0 %
Jönköping Hotelldrift AB
Sweden
Jönköping
100,0 %
100,0 %
Sverigeråd i Eskilstuna AB
Sweden
Eskilstuna
100,0 %
100,0 %
Klosterkungen Hotel och Restaurang AB
Sweden
Jönköping
100,0 %
100,0 %
Restaurant Entré AB
Sweden
Helsingborg
100,0 %
100,0 %
Subsidiaries of Subsidiaries - HI Capital AS 100.0 % interest
Voksentoppen ICE AS
Norway
Oslo
100,0 %
100,0 %
Kidprop AS
Norway
Oslo
100,0 %
100,0 %
Scandia Healthcare AS
Norway
Oslo
100,0 %
100,0 %
Brennemoen Hotell Eiendom AS
Norway
Oslo
0,0 %
100,0 %
Carafin AS
Norway
Oslo
100,0 %
100,0 %
Scandinavian Care Support AB
Sweden
Tanumshede
100,0 %
100,0 %
Ifront Kompetanse AS
Norge
Oslo
55,6 %
55,6 %
NH Europe Holding AS
Norway
Oslo
0,0 %
51,0 %
BG Entreprenør AS
Norway
Mo i Rana
70,2 %
0,0 %
UP North Hospitality AS
Norway
Oslo
90,1 %
0,0 %
Studio City Norway AS
Norway
Oslo
90,1 %
0,0 %
43
HOSPITALITY INVEST AS
Advisory Group
Norway
Oslo
66,7 %
0,0 %
Subsidiaries of Subsidiaries - Skottet Fastighets AB 100.0 % interest
Älvbäck Fastighets AB
Sweden
Malmö
100,0 %
100,0 %
Restrictions on dividends
Norlandia Health & Care Group AS
Subject to Incurrence Tests of net debt to EBITDA (<3.25x1)
Otiga Group AS
No dividend allowed without acceptance from the lending bank (Collector Bank)
Associated companies
Voss Resort AS
30,6 %
30,6 %
Pioneer Property Group ASA *
32,6 %
32,6 %
Miliarium Bolig AS
24,2 %
22,2 %
Vossevangen Utvikling AS
43,8 %
0,0 %
Hotell Stormen AS
33,0 %
33,0 %
Norlandia Holding AS
23,6 %
10,3 %
* 34.97 % including HI capital AS share of ordinary shares
Associates in HI Capital (Subgroup):
2021
2020
TK Scandinavia AS
49,0 %
49,0 %
BKN AS
45,5 %
49,7 %
A&B Invest AS
16,8 %
16,8 %
Caracap AS
34,0 %
34,0 %
Kvitfjell Prosjektutvikling AS
31,0 %
31,0 %
Caravan Eiendom Ålgård AS
50,0 %
50,0 %
Mestringshusene AS
33,0 %
33,0 %
Pioneer Investment AB
26,6 %
26,6 %
Norefjell Prosjektutvikling AS
16,8 %
16,8 %
Helerudsletta Drift AS
50,0 %
50,0 %
Winn Hotel Group AB
34,4 %
33,3 %
HI Cap Bidco 2021 - 4 AS
33,2 %
0,0 %
AAP Group AS
50,0 %
0,0 %
Elywhere AS
26,9 %
0,0 %
Material associated companies 2021
Miliarium
PPG ASA
Bolig AS
Revenue
37 158
45 517
Profit and loss from continuing operations
4 475
228 301
Other comprehensive income
-257
Total comprehensive income
4 475
228 044
Non-current assets
588 304
1 902 835
Current assets
272 987
283 779
Total assets
861 290
2 186 614
Equity
553 300
1 377 369
Non-current liabilities
210 952
574 701
Current liabilities
97 039
234 544
Total liabilities
861 290
2 186 614
Material associated companies 2020
Miliarium
PPG ASA
Bolig AS
Revenue
60 995
2 052
ANNUAL REPORT 2021
44
Profit and loss from continuing operations
21 685
138 067
Other comprehensive income
-331
Total comprehensive income
21 685
137 736
Non-current assets
545 244
414 681
Current assets
263 834
885 932
Total assets
809 078
1 300 613
Equity
513 581
1 231 992
Non-current liabilities
238 991
36 849
Current liabilities
56 506
31 773
Total liabilities
809 078
1 300 614
Investment in associated companies
2021
2020
Investment in associates as of 01.01
488 969
785 827
Share of post-tax profits of associates
88 889
48 372
Gain on disposal of shares in associates
18 297
Transfers to subsidiaries
Dividends received
-12 510
-419 630
Disposal of investments in Associates
-57 798
New investments in associates
185 081
132 199
Investment in associates as of 31.12
768 726
488 969
45
HOSPITALITY INVEST AS
12. TRADE AND OTHER RECEIVABLES
2021
2020
Trade receivables
783 997
599 506
Less: provision for impairment of trade receivables
-34 267
-27 237
Trade receivables - net
749 730
572 270
Other receivables
621 334
653 559
Total financial receivables classified as loans and receivables
1 371 065
1 225 829
2021
2020
Total trade and other receivables
1 371 065
1 225 829
Less: non-current portion - Loan to related parties
-6 911
-27 730
Less: non-current portion - other receivables
-199 840
-189 281
Current portion
1 164 315
1 008 818
The fair values of trade and other receivables classified as loans and receivables are not materially different to their carrying
values.
The Group does not hold any collateral as security.
Movements on the Group provision for impairment of trade receivables are as follows:
2021
2020
At 1 January
27 237
22 691
Provided during the year
7 030
4 940
Receivable written off during the year as uncollectible
-
-
Reversal of provisions prior years
-
-395
At 31 December
34 267
27 237
Other classes of financial assets included within trade and other receivables do not contain impaired assets.
Aging analysis on trade receivables
2021
2020
Not due (less than 30 days)
737 612
555 888
30-60 days
22 457
17 314
60-90 days
3 631
3 479
More than 90 days
20 297
22 825
783 997
599 506
ANNUAL REPORT 2021
46
13. SHARE CAPITAL, SHAREHOLDERS, DIVIDENDS AND RESERVES
Share capital
2021
2020
Ordinary shares
291 548 539
291 548 539
Own shares*
740 741
740 741
Total Share capital (NOK)
20 408 398
20 408 398
Own shares * (NOK)
-51 852
-51 852
Shareholders - 31 December 2021:
Number of
Interest
Face value
Shares
shares
capital
KLEVENSTERN AS
134 894 971
46,27%
0,07
9 442 648
MECCA INVEST AS
134 877 471
46,26%
0,07
9 441 423
KRONHJORTEN AS
4 000 000
1,37%
0,07
280 000
PIONEER PROPERTY GROUP ASA
2 513 727
0,86%
0,07
175 961
J J K INVEST NORGE AS
2 228 769
0,76%
0,07
156 014
NORLANDIA HOLDING AS
1 571 651
0,54%
0,07
110 016
ATHOS AS
1 336 734
0,46%
0,07
93 571
Adolfsen Consult AS
1 333 335
0,46%
0,07
93 333
KENCO INVEST AS
816 512
0,28%
0,07
57 156
KASCO INVEST AS
814 512
0,28%
0,07
57 016
BERRYKATE AS
814 512
0,28%
0,07
57 016
MAGGIEBERRY AS
814 512
0,28%
0,07
57 016
KRICO INVEST AS
814 512
0,28%
0,07
57 016
Own shares
740 741
0,25%
0,07
51 852
Other shareholders
3 976 580
1,36%
0,07
278 361
291 548 539
100,00%
20 408 398
Board members controlles the following number of shares (RL § 7-26)
Number of
Interest
shares
Kristian A. Adolfsen (Klevenstern AS)
Chairman of the board
134 894 971
46,27%
Roger Adolfsen (Mecca Invest AS)
Board member/CEO
134 877 471
46,26%
Johnny R. Sundal (Sundal Invest AS)
Board member
354 672
0,12%
270 127 114
92,65%
The following describes the nature and purpose of each reserve within equity:
Reserve
Description and purpose
Share premium
Amount subscribed for share capital in excess of nominal value.
Retained earnings
All other net gains and losses and transactions with owners not
recognised elsewhere.
47
HOSPITALITY INVEST AS
14. LOANS AND BORROWINGS
The book value and fair value of loans and borrowings are as follows:
Book
Fair
Book
Fair
value
value
value
value
2021
2021
2020
2020
Non-Current
Bond loans
1 659 207
1 659 207
1 127 425
1 127 425
Bank loans
647 771
647 771
543 908
543 908
Other non-current liabilities
34 630
34 630
64 065
64 065
Total non current
2 341 608
2 341 608
1 735 398
1 735 398
Current
Bond loans
1 133 307
1 133 307
1 917 850
1 917 850
Bank loans
39 623
39 623
9 017
9 017
Other current liabilities
43 459
43 459
13 310
13 310
Total current
1 216 389
1 216 389
1 940 177
1 940 177
The currency profile of the Group's loans and borrowings is as follows:
(Currency in NOK)
2021
2020
NOK
2 817 081
2 527 725
SEK
740 916
1 147 850
EUR
-
-
Total
3 557 997
3 675 575
Borrowings as of 31.12.2021
Interest
Due date
Amount
Bond Norlandia Health & Care Group 2022/2025
NIBOR +5.75%
05/2025
1 682 299
Debt to Husbanken
0.897%-2.438%
2050
214 098
Non-current debt to banks
433 673
Other long Term debt
33 206
Amortized cost of issuing debt
-21 668
Total non current debt
2 341 608
Bond Hospitality Invest AS 17/22 FRN
3 mnd NIBOR + 6.0%
10/2022
850 000
Bond Personalhuset (Otiga) issued 2019/2022
3 months NIBOR +9%
12/2022
283 307
Current portion of debt to banks
84 410
Amortized cost of issuing debt
-1 327
Total current debt
1 216 389
In May 2021 Norlandia Health & Care Group AS successfully refinanced its bond and secured long term financing until 2025. The settlement
and new bond was in a single transaction and several investors rolled over their investment into the new bond. From a cashflow perspective
the Group did only incur directly related transaction costs included as part of the financing activities. As part of the refinancing Hospitality
Invest AS converted an equal of NOK 150 million in obligations debt to equity, lowering the external financing. The new bond is a senior
secured sustainability-linked bond due in May 2025. The bond consists of a 950 million NOK tranche and a 750 million SEK tranche.
Subsidiaries are pledged as collateral together with a majority of material operating companies.
The bond loans in the group have certain financial covanants. Hospitality Invest AS comply with their financial covenants related to their
bond loan as the cash and cash equivalents are above NOK 20 million and the book value of equity exceeds NOK 450 million. All group
companies are in compliance with their respective covenants. Reference is made to the Annual reports of Otiga (note 14) and Norlandia
Health & Care Group (note 23) for detailed calulation and confirmaton of compliance hereto.
Otiga Group's bond loan was refinanced in February 2022. The new loan of MNOK 285 is granted by Collector Bank AB and has maturity
date March 31st, 2025. The interest is NIBOR plus 6.50%.
ANNUAL REPORT 2021
48
15. DEFERRED TAX
Deferred tax is calculated in full on temporary differences under the liability method using a tax rate of 22 %.
The movement on the deferred tax account is as shown below:
2021
2020
At 1 January
101 557
186 597
Recognised in profit and loss
Tax expense
-61 710
-98 257
Recognition of previously unrecognised deferred tax assets
22 879
17 789
Recognised in other comprehensive income
1 276
-4 571
At 31 December
5 574
101 557
Deferred tax assets have been recognised in respect of all tax losses and other temporary differences giving rise
to deferred tax assets where the directors believe it is probable that these assets will be recovered.
The movements in deferred tax assets and liabilities (prior to the offsetting of balances within the same
jurisdiction as permitted by IAS 12) during the period are shown below.
49
HOSPITALITY INVEST AS
Details of the deferred tax liability, amounts recognised in profit or loss and amounts recognised in other
comprehensive income are as follows:
(Charged)/
credited
(Charged)/
to profit
credited to
Asset
Liability
Net
or loss
equity
2021
2021
2021
2021
2021
Fixed assets
70 948
-200 448
-129 500
42 162
60 387
Accounts receivable
2 663
-17
2 646
-2 023
-
Inventory
-
-
-
-
-
Pensions
23 742
-4 647
19 096
-4 479
-1 276
Financial instruments
-
-
-
-
-
Profit and loss account
-
-2 900
-2 900
481
-222
Provisions
113 030
-2 216
110 814
22 824
-
Tax loss carried forward
94 161
-
94 161
1 469
-905
Tax asset/(liabilities)
304 543
-210 228
94 316
60 434
57 985
Set off of tax
-
-
-
-
-
Unrecognised deferred tax asset
-89 923
-9 967
-99 890
-22 879
443
Net tax assets/(liabilities)
214 620
-220 194
-5 574
37 555
58 428
2020
2020
2020
2020
2020
Fixed assets
42 512
-274 562
-232 050
39 334
-
Accounts receivable
4 669
-
4 669
706
-
Inventory
-
-
-
-
-
Pensions
27 782
-2 931
24 851
5 843
4 571
Financial instruments
-
-
-
-
-
Profit and loss account
-
-3 160
-3 160
1 160
-
Provisions
96 885
-8 895
87 990
59 554
-
Tax loss carried forward
93 597
-
93 597
-3 769
-
Tax asset/(liabilities)
265 445
-289 548
-24 103
102 828
4 571
Set off of tax
-
-
-
-
-
Unrecognised deferred tax asset
-77 454
0
-77 454
-17 789
-
Net tax assets/(liabilities)
187 991
-289 548
-101 557
85 040
4 571
The unused tax losses and deductible temporary differences can be carried forward indefinitely and relates to
companies in the same tax group; Hospitality Invest, HI Capital incl. subsidiaries, Norlandia Hotel Group incl.
subsidiaries and Norlandia Health & Care Group incl. subsidiaries.
ANNUAL REPORT 2021
50
16. TRADE AND OTHER PAYABLES
2021
2020
Trade payables
265 682
274 578
Tax and social security payments
596 647
618 175
Unpaid wages and holiday pay
676 819
601 786
Other short term debt
287 612
220 690
Total financial liabilities, excluding loans and borrowings,
Classified as financial liabilities measured at amortised cost
1 826 760
1 715 229
Book values approximate to fair value at 31 December 2021 and 2020.
17. LEASES
Operating leases - lessee
The Group leases the majority of its offices, hotels, preschools, nursing homes and houses. Lease agreements typically run for 10+ years
within preschools and less for the other segments.
Contracts normally include an option to prolong the lease.
The Group has not
included any such prolonging due to the uncertainty related to the long remaining lease. Interest rate is estimated per country and vary
between 2.5-3.6%. Contracts with less than 12 months obligation or payments related to revenue is not capitalized. Lease payments are
subject to annual KPI adjustment.
Please refer to Note 1 regarding additional information of accounting principle for Leases (IFRS 16).
Land and
buildings
Furniture,
fixtures and
equipment
Total Right-
of-use assets
Right of use asset
Balance at 1 January 2021
4 324 055
34 974
4 359 030
Depreciation
-578 413
-15 291
-593 704
Additions
792 165
4 709
796 874
Acquisition of subsidiary
396 619
-
396 619
Disposals
-2 706
-
-2 706
Exchange differences
-128 191
337
-127 854
Year ended 31 December 2021
4 803 529
24 730
4 828 259
Lease liabilities
Maturity analysis - undiscounted cash flows
Less than one year
683 349
One to five years
2 227 297
More than five years
3 191 903
Total undiscounted lease liabilities 31 December 2021
6 102 549
Lease liabilities incl. in the statement of financial position 31 December 2021
5 124 813
Current
535 666
Non-current
4 589 148
Amounts recognized in statement of comprehensive income
Interest on lease liabilities
140 361
Depreciation of right-of-use asset
593 704
Expense relating to short-term leases (included in other operating expenses)
-677 019
Expense relating to low-value assets (included in other operating expenses)
-16 023
Total recognized in statement 31 December 2021
41 022
51
HOSPITALITY INVEST AS
18. RETIREMENT BENEFITS
At 31.12.2021, a total of 11,417 employees in the Group are included in a defined contribution plan. The plan is in accordance with the
laws and regulations concerning obligatory pension plans. The costs in conncetion with the plan are recognized in accordance with
premiums paid.
The Group’s defined benefit plan through 2021 includes 563 employees. The plan involves lifelong pension from 67 years. The pension
plans are accounted for in accordance with IAS 19 Employee benefits. Defined benefit plans give rise to defined future payments. These
are mainly dependent on number of years of service, salary level at retirement and the level of payments received from Social Security.
The obligations are covered through an insurance company.
ANNUAL REPORT 2021
52
2021
2020
Pension costs for defined contribution schemes
299 589
221 096
Details of the Group's defined benefit schemes are as follows:
2021
2020
Fair value of plan assets
379 160
345 579
Present value of funded obligations
469 125
458 480
Change in net obligation as a result of business combination
10 220
-35
Net pension obligations
100 185
112 866
Reconciliation of plan assets
2021
2020
At 1 January
345 459
313 179
Expected return
5 043
5 977
Contributions by Group
47 148
29 844
Benefits paid
-1 691
-1 650
Actuarial gain/(loss)
-16 474
104
Settlements
-
-
Administration fees
-326
-299
Change as a result of business combination
43 450
-1 695
At 31 December
422 610
345 459
Reconciliation of plan liabilities
2021
2020
At 1 January
458 325
413 138
Interest cost
7 874
9 524
Current service cost
32 521
31 488
Benefits paid
-1 691
-1 650
Actuarial (gain)/loss
-22 276
20 446
Social security tax
-5 629
-13 119
Settlements
-
-
Change as a result of business combination
53 670
-1 502
At 31 December
522 795
458 325
2021
2020
Actuarial gains and losses recognised in OCI
5 802
-20 778
Pension cost (defined benefit plan)
2021
2020
Current service cost
29 827
27 843
Net interest cost
2 237
2 800
Administration costs
1 135
1 382
Accured social security tax
4 508
4 226
Net pension cost
37 707
36 251
Principal actuarial assumptions
31.12.2021
31.12.2020
Discount rate on plan liabilities
1,9 %
1,7 %
Expected increase in pensionable salary
2,8 %
2,3 %
Future G-increase
2,5 %
2,0 %
Future pension increase
0,0 %
0,0 %
Turnover
8,7 %
8,7 %
Social security tax
14,1 %
14,1 %
53
HOSPITALITY INVEST AS
19. ACQUISITIONS DURING THE PERIOD AND COMPLETED PRIOR PERIODS
During 2021 the following companies were acquired in the Staffing segment:
No major acquisitions were made during 2021.
During 2020 the following companies were acquired in the Staffing segment:
Company
Location and
country of
incorporation
Aquired % of
shares
Voting
rights
Aquistion
date
Acconia Resultatskap AB
Jönkjöping, Sweden
78%
78%
01.02.2020
Premier Services Sverige AB
Trollhättan, Sweden
39%
39%
31.12.2020
As of 31.12.2019 AB Söder & Co Forvaltning owned 35% in Acconia Resultatskap AB. During February 2020 Söder & Co Forvaltning AB
acquired 43% of the remaining shares in the company. The acquisition resulted in a net increase in assets of NOK 475 901 and debt of
NOK 413 934 as of 31.12.2020.
In 2019 Otiga Group, through its subsidiary AB Söder & Co Sverige, had an option to acquire the remaining outstanding shares in
Premier Service Sweden AB. During 2020 the option to acquire the remaining shares expired without any of the parties exercising the
option. In December 2020 the parties came to an agreement and AB Söder & Co Sverige acquired 39% of the shares, increasing the
ownership to 90%.
During 2020 Otiga Group settled contingent considerations related to acquisitions in previous years amounting to
NOK 35.7 million. The amounts settled related to the purchase of Vinde Tilkomstteknikk AS, AB Söder & Co Forvaltning and Clockwork
Holding AB. Otiga Group does not consider these acquisition transactions to be material individually to its consolidated financial position
or statement of comprehensive income.
During 2021 the Care segment had the following acquisitions:
Acquisitions during 2021 have been made primarily in the preschool segment. Total consideration was MNOK 126, which has been paid
during 2021. Gnist Barnehager AS has been consolidated from 1.10.2021.
All business combinations in the Care segment during 2021 resulted in an addition to goodwill of NOK 20.7 million, Right-of-use assets of
NOK 357.8 million, Lease liability of MNOK 354.7, fixed assets of NOK 60.8 million, Deferred tax liabilities of NOK 7.9 million and interest
bearing debt of NOK 37.7 million. Cash in acquired companies has primarily been prepayments from municipalities, where corresponding
unsatisfied performance obligations were recognized as liabilities. No amount of goodwill is expected to be deductible for tax purposes.
No transactions costs have been booked as part of these transactions.
During 2020 the Care segment had the following acquisitions:
Acquisitions during 2020 have been made primarily in the Preschool segment within Norway, Sweden and Finland, with
Sprelloppbarnehagene being the largest. All business combinations during 2020 resulting in an addition to intangible assets of total
MNOK 41.4.
ANNUAL REPORT 2021
54
20. TRANSACTIONS WITH RELATED PARTIES
In addition to the transactions with subsidiaries described in note 11, the financial statements include transactions with the following
related parties.
Transactions with related parties are as follows:
Related party
Relation to the group
Even Carlsen
Owner of Grafo AS, board member in the group
Kristian Adolfsen
Shareholder in Hospitality Invest AS, Chairman of the board
Roger Adolfsen
Shareholder in Hospitality Invest AS, board member in the group
Klevenstern AS
Major shareholder
Mecca Invest AS
Major shareholder
Voss Resort AS
Associated company
Kvitfjell Prosjektutvikling AS
Associated company
Miliarium Bolig AS
Associated company
Hotell Stormen AS
Associated company
A&B Invest AS
Associated company
Mestringshusene AS
Associated company
Pioneer Property Group ASA
Associated company
BKN AS
Associated company
TK Skandinavia AS
Associated company
Brennemoen Eiendom AS
Controlled by the same shareholders
Pioneer Capital Partners AS
Controlled by the same shareholders
Norlandia Holding AS
Controlled by the same shareholders
Stöten i Sälen AB
Controlled by the same shareholders
Norlandia Fastigheter AB
Controlled by the same shareholders
Tanumstrand Fastigheter AB
Controlled by the same shareholders
Oslo Corporate Holding AS
Controlled by the same shareholders
Brado AB incl. Frösunda Omsorg AB
Controlled by the same shareholders
Receivables from associates and related parties
Company
2021
2020
Voss Resort AS incl. subsidiaries
16 103
15 676
Miliarium Bolig AS
139
174
Staffing Invest AS
15 936
14 385
Kvitfjell Prosjektutvikling AS
2 470
2 470
Vestfjorden AS
6 601
6 601
Oslo Corporate Holding AS
119
1 060
Mecca Invest AS
0
250
Klevenstern AS
0
250
Hotell Stormen AS
0
3 043
Frösunda Omsorg AB
0
1 079
Brennemoen Eiendom AS
0
11 881
Tanumstrand Fastighet AB
28 886
26 662
Ferda Gruppen AS
0
5 586
Caracap AS
1 500
1 500
A&B Invest AS
7 097
1 615
Total receivable related parties
78 852
92 231
Interest received from associates and related parties
Company
2021
2020
Voss Resort AS
319
435
55
HOSPITALITY INVEST AS
Norlandia Fastigheter AB
1 029
1 418
Tanumstrand Fastighet AB
1 722
1 673
Norefjell Prosjektutvikling
-
26
Ferda Gruppen AS
140
86
RABG AS
600
600
Pioneer Investment AB
613
385
Staffing Invest AS
935
553
A&B invest AS
113
77
BKN AS
794
181
LNS Mining AS
289
433
Interest received from related parties
6 552
5 867
Rent of properties from associates and related parties
Company
2021
2020
Tanum Hotel & Konferensanläggning AB
20 272
19 905
Norlandia Holding AS inclusive subsidiaries
59 314
32 117
Total rent of properties from related parties
79 586
52 022
Transaction with related parties in Norlandia Health & Care Group AS (subgroup)
Transactions with related parties in Norlandia Health & Care Group AS (subgroup) are as follows:
Related party
Relation to the group
Kristian Adolfsen
Owner of Klevenstern AS, board member in the group
Roger Adolfsen
Owner of Mecca Invest AS, board member in the group
Hospitality Invest AS
Major shareholder 100 %
Pioneer Property Group ASA
Significant ownership interest from the same shareholders
Receivables from associates and related parties
Company
2021
2020
Älvbäck Fastighets AB
3 452
Total receivable related parties
3 452
-
Liabilities to associates and related parties
Company
2021
2020
Hospitality Invest AS
24 680
24 314
Total receivable related parties
24 680
24 314
Sale of assets to associates and related parties
Company
2021
2020
Sale of property to Pioneer Public Preschools AS
14 610
Total rent of properties from related parties
14 610
-
Rent of properties from associates and related parties
Company
2021
2020
Rent of properties from Pioneer Property Group ASA
1 350
12 008
Total rent of properties from related parties
1 350
12 008
ANNUAL REPORT 2021
56
21. CASH AND CASH EQUIVALENTS
2021
2020
Cash related to payroll tax witholdings
56 007
39 486
Unrestricted cash
706 334
664 588
Total cash and cash equivalents
762 341
704 073
22. SUPPORT TO STATEMENT OF CASH FLOWS
Non-current
loans and
borrowings
Current loans
and
borrowings
Non-current
and current
lease liability
Total
At 1 January 2021
1 735 398
1 940 177
4 564 340
8 239 915
Cash flows
-1 118 737
825 641
-354 212
-647 309
Net amounts recognized from purchase and sale of companies
177 729
14 478
424 899
617 106
Amortized cost changes
-2 962
0
0
-2 962
Additions
10 000
0
637 565
647 565
Capital increase
150 000
0
0
150 000
Effects of foreign exchange
-19 125
-478
-148 538
-168 141
Reclassification
-277 384
277 384
251
251
Interest accrued in the period
8 356
9 188
509
18 053
Re-financed bond
1 678 332
-1 850 000
0
-171 668
At 31 December 2021
2 341 608
1 216 389
5 124 813
8 682 810
Non-current
loans and
borrowings
Current loans
and
borrowings
Non-current
and current
lease liability
Total
At 1 January 2020
3 612 976
243 939
3 834 285
7 691 200
Cash flows
-183 235
-205 233
-217 990
-606 458
Net amounts recognized from purchase and sale of companies
98 847
0
0
98 847
Amortized cost changes
2 760
0
0
2 760
Additions
0
15 000
816 541
831 541
Effects of foreign exchange
109 228
700
128 167
238 095
Reclassification
-1 912 184
1 912 184
2 697
2 697
Interest accrued in the period
7 006
-26 413
640
-18 766
Change in fair value
0
0
0
0
At 31 December 2020
1 735 398
1 940 177
4 564 340
8 239 915
57
HOSPITALITY INVEST AS
23. EVENTS AFTER THE REPORTING DATE
Hospitality Invest acquired ~52% of Haneseth Gruppen AS in February 2022. Haneseth Gruppen is leading provider of multidisciplinary
technical services across Northern Norway. Haneseth has delivered strong growth and solid EBITDA margins over the years and has a
strong cash position ending 2021.
The brand Haneseth Gruppen AS was established in 2005, however the company has its origins from K. Haneseth AS, founded in 1959
Haneseth Gruppen AS currently has ~410 employees. The technical breadth of the Group’s service offering makes it an attractive
employer and provider. Their services range from automation and operation to electrical services, heating, water and sanitation as well
as ventilation. The Group has an active growth strategy which in addition to organic growth includes acquisitions. The company has a
strong track-record of M&A to drive growth, having performed 15 acquisitions since 2004.
On February 10th 2022 Otiga Group AS notified Nordic Trustee AS of its intention to exercise its call option of the outstanding amount
under the terms and conditions governing the bond issue OTIGA GROUP AS FRN Senior Secured Bonds 2019/2022
ISINNO0010858806. The loan was refinanced through a new bank facility on February 24th 2022.
ANNUAL REPORT 2021
58
ANNUAL REPORT
(PARENT COMPANY)
2021
HOSPITALITY INVEST AS
59
HOSPITALITY INVEST AS
HOSPITALITY INVEST AS
STATEMENT OF INCOME
(all amounts in NOK 1.000)
Note
2021
2020
OPERATING INCOME AND OPERATING EXPENSE
Revenue
3
15 101
11 662
OPERATING REVENUE
15 101
11 662
Personnel Expenses
2
13 651
11 131
Depreciation and amortisation expense
8
950
533
Other operating expenses
10 165
12 823
TOTAL OPERATING EXPENSES
24 765
24 487
PROFIT FROM OPERATIONS
-9 665
-12 825
FINANCIAL INCOME AND EXPENSE
Other financial income
4
308 538
188 528
Other financial expenses
4
56 404
59 908
NET FINANCE
252 134
128 619
PROFIT BEFORE TAX
242 469
115 795
Tax on ordinary result
5
-11 268
-13 954
PROFIT
253 737
129 749
ATTRIBUTABLE TO
To other equity
253 737
129 749
Net brought forward
253 737
129 749
ANNUAL REPORT 2021
60
HOSPITALITY INVEST AS
STATEMENT OF FINANCIAL POSITION
(all amounts in NOK 1.000)
Note
2021
2020
ASSETS
Fixed assets
Intangible assets
Deferred tax asset
5
67 612
56 345
Total intangible assets
67 612
56 345
Tangible assets
Machinery and Equipment
8,13
3 742
3 885
Total tangible assets
3 742
3 885
Financial fixed assets
Investments in subsidiaries
9,13
1 467 775
1 243 959
Investments in associated companies
10,13
243 682
145 624
Investments in shares
13
17 315
40 249
Other receivables
11
52 381
69 067
Total financial fixed assets
1 781 153
1 498 899
TOTAL FIXED ASSETS
1 852 507
1 559 130
CURRENT ASSETS
Debtors
Accounts receivables
Accounts receivables
8 484
2 905
Other receivables
11
45 519
41 319
Total receivables
54 004
44 224
Cash and bank deposits
12
115 605
164 124
TOTAL CURRENT ASSETS
169 609
208 348
TOTAL ASSETS
2 022 116
1 767 478
61
HOSPITALITY INVEST AS
HOSPITALITY INVEST AS
STATEMENT OF FINANCIAL POSITION
(all amounts in NOK 1.000)
Note
2021
2020
EQUITY AND LIABILITIES
Equity
Restricted equity
Share capital
7
20 408
20 408
Own Shares
-52
-52
Share premium reserve
171 915
171 915
Total restricted equity
192 271
192 271
Other equity
963 055
709 319
TOTAL EQUITY
6
1 155 327
901 590
Liabilities
Other long-term liabilities
Bonds
13
-
847 080
Liabilities to financial institutions
13
4 507
5 539
TOTAL LONG-TERM LIABILITIES
4 507
852 619
Current liabilities
Trade creditors
385
982
Public duties payable
1 877
1 421
Bonds
13
848 673
-
Other short term liabilities
11
11 348
10 866
TOTAL SHOR-TERM LIABILTIES
862 283
13 268
TOTAL LIABILITIES
866 789
865 888
TOTAL EQUITY AND LIABILITIES
2 022 116
1 767 478
Oslo, 29 April 2022
Board of Directors of Hospitality Invest Group AS
Kristian A. Adolfsen
Chairman of the Board
Roger Adolfsen
Member of the Board
Johnny R. Sundal
Member of the Board
ANNUAL REPORT 2021
62
HOSPITALITY INVEST AS
STATEMENT OF CASH FLOW
(all amounts in NOK 1.000)
Note
2021
2020
Cash flow from operations
Profit after income taxes
253 737
129 749
Tax expenses
-11 268
-13 954
Net finance
452
-
Gain/loss from sale of shares
-252 586
-
Depreciation
950
533
Changes in working capital
Change in account receivables and other receivables
11 107
3 248
Change in trade and other payables
-748
815
Change in other accrual items
482
32 277
Net cash flow from operations activities
2 126
152 668
Cash flow from investments
Payments to buy tangible assets
-807
-3 056
Investment in other group companies
79 794
-183 500
Investment in associated companies
-78 062
233 612
Payments to buy other investments
-
-11 546
Interest received
4 022
Net cash flow from investments activities
4 947
35 510
Cash flow from financing
Proceeds from short term loans
-884
Interest paid
-55 593
-59 087
Payment of dividend
-
-
Net cash flow from financing activities
-55 593
-59 971
Exchange gains / (losses) on cash and cash equivalents
Net change in cash and cash equivalents
-48 520
128 207
Cash and cash equivalents at the beginning of the period
164 125
35 917
Cash and cash equivalents at the end of the period
115 605
164 125
63
HOSPITALITY INVEST AS
Notes to the financial statements 2021
1. ACCOUNTING POLICIES
The annual accounts have been prepared in compliance with the Accounting Act and accounting principles generally accepted in
Norway.
Operating income
Revenues from sale of services are recognised in the income statement once the delivery has taken place. Hospitality Invest provides
management services to the operating holding companies in the Group and to some of the associated companies. It is more efficient and
economic to centralise these activities. The management services provided by HI are:
-
-
-
accounting records, preparation of financial statements.
-
contracts, agreements and other legal documents.
Hospitality invest facilitates the purchase of third-party IT services and ERP services on behalf of itself and certain subsidiaries in the
Group. Hospitality Invest performs functions, assets and risks in relation to these third-party services and the costs related to these third-
party services are allocated to the relevant subsidiaries with adding a mark-up.
Operating expenses
Costs are generally recognised in the same period as associated income. In cases where there is no clear correlation between expenses
and income, expenses are charged as incurred.
Taxes
The tax charge in the income statement includes both payable taxes for the period and changes in deferred tax. Deferred tax is
calculated at the tax rate of 22 % on the basis of tax-reducing and tax-increasing temporary differences which exist between accounting
and tax values of assets and liabilities, and the tax loss carried forward at the end of the accounting year. Taxable and deductible
temporary differences that reverse or may reverse in the same period are offset and reported net. The net deferred tax receivables is
entered on the balance sheet to the extent that it is likely that it can be utilised.
Classification and valuation of fixed assets
Fixed assets consist of assets intended for long term ownership or use. Fixed assets are valued at acquisition cost less depreciation and
write-downs. Long-term liabilities are recognized at the nominal amount at the time of the transaction.
Classification and valuation of current assets
Current assets and short-term liabilities are normally considered to be due within one year from the balance sheet date, as well as those
connected to the trading cycle. Current assets are valued at the lower of acquisition cost and fair value. Short-term liabilities are
recognized at the nominal amount at the time of the transaction.
Subsidiaries and associated companies
Subsidiaries and associated companies are valued using the cost method in the company accounts. The investment Is valued at
acquisition cost for the shares unless a write-down has been necessary. A write-down to fair value is made when a fall in value is due to
reasons that cannot be expected to be temporary and such write-down must be considered as necessary in accordance with good
accounting practice. Write-downs are reversed when the basis for the write-down is no longer present.
Dividends, group contributions and other distributions from subsidiaries are recognized in income in the same year as provided for the
distributor’s accounts To the extent the dividends /group contributions exceed the share of profits earned after the date of acquisition, the
excess amounts represent a repayment of investment capital, and distributions are deductible from the investment’s value in the balance
sheet of the parent company.
Associated companies are defined as companies with significant influence normally assumed when ownership interest is between 20% -
50% and where the investments are classified as long-term investments. Ownership in associated companies are listed at cost price.
ANNUAL REPORT 2021
64
Receivables
Receivables from customers and other receivables are recognised in the balance sheet at par value after provision for expected losses.
The bad debts provision is made on basis of an individual assessment of each debtor.
Foreign Currencies
Foreign currency transactions are translated at the exchange rate on the date of the transaction. Monetary foreign currency items are
translated to NOK at the exchange rate on the balance sheet date. Non-monetary items that are measured at historical cost in a foreign
currency are translated to NOK using the exchange rate on the measurement date. Exchange rate fluctuations are posted to the profit
and loss account as they arise under the financial items.
Cash Flow statement
The cash flow statement has been prepared using the indirect method. Cash and cash equivalents consist of cash, bank deposits and
other short-term, liquid investments.
Cash and cash equivalents
The carrying amount approximates to fair value due to the short-term nature of these instruments. Cash and cash equivalents are
comprised of restricted cash, unrestricted cash and short-term investments.
65
HOSPITALITY INVEST AS
2. STAFF COSTS
2021
2020
Personnel expenses
Wages and salaries
11 385
9 412
Employee taxes
1 751
1 339
Pension costs
100
128
Other benefits
416
252
Total payroll and related costs
13 651
11 131
Number of employees (FTE)
8
6
CEO
Chairman
Board
Remuneration to leading personnel
Wages and salaries
2100
2100
150
Pension costs
23
23
0
Other benefits
297
546
0
Total remuneration to leading personell
2 421
2 669
150
Pension liabilities:
The company is liable to maintain an occupational pension scheme under the Mandatory Occopational Pensions
Act. The company's pension scheme satisfy the requirements of this act.
Loans to employees:
2021
2020
Auditor fee
Statutory audit
757
796
Other services
325
676
Total
1 082
1 472
3. REVENUE
Revenue for 2020 consists of management fees invoiced to other group companies in addition to common costs.
2021
2020
Operating income by business area
Norway
12 516
7 678
Sweden
2 585
3 984
Finland
-
-
Total
15 101
11 662
ANNUAL REPORT 2021
66
4. FINANCE INCOME AND EXPENSE
2021
2020
Finance income
Interest income from group companies
1 797
2 295
Financial income from investments*
304 516
184 619
Other interest income
18
36
Other financial income
-
1 577
Total finance income
308 538
188 528
Finance expense
Other interest expenses
55 597
59 887
Other financial expenses
807
22
Total finance expense
56 404
59 908
Net finance income recognised in profit or loss
252 134
128 619
*Financial income of investments in 2021 include gain on disposal of shares in Park Inn by Radisson Oslo Airport Hotell, Best Western
Hotel Scheele and Strand Hotell Borgholm of NOK 252.5 million, dividends from associates of NOK 11.7 million and received group
contribution of NOK 9.5 million. In addition contribution-in-kind of NOK 29.8 million related to the transfer of NH Europe AS to Norlandia
Health and Care Group AS is included. In 2020 the financial income of investments include dividends from associates of NOK 179,3
million and disposal of shares of NOK 5.3 million.
67
HOSPITALITY INVEST AS
5. TAX
2021
2020
Entered tax on ordinary profit/loss:
Payable tax
-
-1 327
Changes in deferred tax assets
-11 268
-12 627
Tax expense on ordinary profit/loss
-11 268
-13 954
Taxable income:
Ordinary profit/loss before tax
242 469
115 795
Permanent differences
-293 685
-179 629
Limitation on interest deduction brought forward
51 405
57 598
Changes temporary differences
-189
203
Taxable income before losses carried forward
-1
-6 033
Utilised losses carried forward
-
-
Taxable income:
-1
-6 033
Payable tax in the balance:
-
-
Receivable tax / Payable tax
-
-1 327
Total payable tax in the balance
-
-1 327
Calculation of effective tax rate:
Profit/loss before tax
242 469
115 795
Calculated tax on profit/loss before tax (22%)
53 343
25 475
Tax effect of permanent differences
-64 611
-39 518
Other Items
-
89
Taxable income before losses carried forward
-11 268
-13 954
Effective tax rate
-4,6 %
-12,1 %
Specification of tax effect of temporary differences and loss to be carried forward has formed the basis for deferred tax liabilities and
deferred tax assets, specified below on type of temporary differences:
2021
2020
Difference
Tangible fixed assets
739
550
-189
Total
739
550
-189
Accumulated los to be brought forward
-139 992
-139 991
1
Limitation on interest deduction brought forward
-168 077
-116 672
51 405
Tax-increasing differences on tangible assets
739
550
-189
Basis for calculation of deferred tax
-307 329
-256 113
51 216
Deferred tax (22 % / 22 %)
-67 612
-56 345
11 268
ANNUAL REPORT 2021
68
6. EQUITY
Share capital
Own Shares
Share premium
Retained
earnings
Total equity
Pr 01.01.2021
20 408
-52
171 915
709 319
901 590
Income for the year
0
0
0
253 737
253 737
Pr 31.12.2021
20 408
-52
171 915
963 055
1 155 327
7. SHARE CAPITAL AND SHAREHOLDERS
Share capital
Number
Nominal Value
In balance
Ordinary shares
291 548 539
0,07
20 408
Own shares
741 740
0,07
-52
Shareholders
Number of
shares
Ownership
Votes
Klevenstern AS
134 894 971
46,27%
46,27%
Mecca Invest AS
134 877 471
46,26%
46,26%
Kronhjorten AS
4 000 000
1,37%
1,37%
Pioneer Property Group ASA
2 513 727
0,86%
0,86%
Others < 1%
15 262 370
5,23%
5,23%
Total
291 548 539
100%
100%
The company has one class of shares and all shares have equal voting rights.
The shares held by the board of directors / CEO, ref. The Norwegian accounting law § 7-26:
Number
Ownership
Kristian A. Adolfsen
Chairman of the
134 894 971
46,27%
Roger Adolfsen
Board member/CEO
134 877 471
46,26%
Johnny R. Sundal
Board member
354 672
0,12%
8. FIXED ASSETS
Machinery and equipment
Acquisition cost as at 01.01.2021
6 815
Addition of fixed assets
806
Acquisition cost as at 31.12.2021
7 621
Deprecation and write-downs as at 01.01.2021
2 929
Ordinary deprecation for the year
950
Deprecation and write-downs as at 31.12.2021
3 879
Book value 31.12.2021
3 742
Economic lifetime
3-10 years
Deprecation schedule
Straight line
69
HOSPITALITY INVEST AS
9. SUBSIDIARIES
Investments in subsidiaries are booked according to the cost method.
Ownershop/
voting right
Balance
sheet value
Subsidiaries
Location
Norlandia Drift AB
Tanum, Sweden
100%
40 771
Skottet Fastighets AB
Malmô, Sweden
100%
783
Norlandia Hotel Group AS
Oslo, Norway
100%
115 548
Hi Capital AS
Oslo, Norway
100%
616 432
Norlandia Health & Care Group AS
Oslo, Norway
100%
481 921
Tjuvholmen Eiendom AS
Oslo, Norway
100%
14 610
Otiga Group AS
Oslo, Norway
66%
197 711
Balance sheet value 31.12.21
1 467 775
10. INVESTMENTS IN ASSOCIATED COMPANIES
Investments in associated companies and joint ventures are booked according to the cost method.
Ownership
Voting rights
Result (100%)
Equity (100%)
Balance
sheet value
Subsidiaries
Location
Voss Resort AS
Skulestadmo
100,00%
30,60%
-14 725
52 137
28 605
PPG ASA ordinære aksjer
Oslo
30,60%
32,60%
62 593
1 377 369
5 487
Miliarium Bolig AS
Oslo
32,60%
24,20%
4 475
553 300
126 270
Hotel Stormen AS
Bodø
33,33%
33,33%
41 951
27 199
13 333
Norlandia Holding AS
Oslo
23,60%
23,60%
63 677
363 349
66 167
Vossevangen Utvikling AS
Voss
43,80%
43,80%
-770
3 748
3 820
Balance sheet value 31.12.21
243 682
11. TRANSACTIONS WITH RELATED PARTIES
2021
2020
Receivables
Group contributions
10 475
6 367
Other short term receivables
35 742
35 008
Loans to group companies
8 357
24 722
Total receivables
54 575
66 097
Liabilities
Group contributions
-
-
Other short term liabilities
47
-
total Liabilities
47
-
Interest received from group companies and related parties NOK 1.796 million and interest paid to group companies NOK 0.
ANNUAL REPORT 2021
70
12. CASH AND CASH EQUIVALENTS
2021
2020
Cash related to payroll tax witholdings
876
1 987
Unrestricted cash
114 730
162 137
Total cash and cash equivalents
115 605
164 124
13. LIABILITIES, MORTGAGES AND WARRANTIES
2021
2020
Liabilities with maturity beyond 1 years
Liabilities secured by mortgage
Liabilities to financial institutions (long term)
4 507
5 539
Bonds
-
850 000
Accrued expense bond
-
-2 920
Total
4 507
852 619
Liabilities with maturity less than 1 years
Liabilities secured by mortgage
Bonds
850 000
-
Accrued expense bond
-1 327
-
Total
848 673
-
Bond interest
3 month NIBOR + 6 %
Bond due date
31.10.2022
Carrying amount of mortgage assets
Machinery and equipment
3 742
3 885
Investments in shares and units
17 315
40 249
Investments in associated companies
243 682
145 624
Investments in subsidiries
1 467 775
1 243 959
Total
1 732 514
1 433 718
Hospitality Invest AS comply with their financial covenants related to their bond loan as the cash and cash equivalents are above NOK
20 million and the book value of equity exceeds NOK 450 million.
GROUP WEB PAGES
PARENT & SUBSIDIARIES
Hospitality Invest AS
www.hospitalityinvest.no
Otiga Group
www.otigagroup.com
Norlandia Care Group AS
www.norlandia.com
Norlandia Hotel Group AS
www.norlandiahotelgroup.no
Hero Group AS
www.hero.no
Aberia Healthcare AS
www.aberia.no
Kidsa Drift AS
www.kidsabarnehager.no
NHC
-
Group
www.nhcgroup.no
ASSOCIATED COMPANIES
Pioneer Property Group ASA
www.pioneerproperty.no
Miliarium Bolig AS
www.miliarium.no
Voss Resort
www.vossresort.no
Norefjell Ski & Spa AS
www.norefjellskiogspa.no
PHONE: +47 22 98 97 40
WEB: WWW.HOSPITALITYINVEST.NO