5967007LIEEXZXG4U097 2022-01-01 2022-12-31 5967007LIEEXZXG4U097 2022-01-01 2022-12-31 ifrs-full:RetainedEarningsMember 5967007LIEEXZXG4U097 2022-01-01 2022-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5967007LIEEXZXG4U097 2022-01-01 2022-12-31 ifrs-full:NoncontrollingInterestsMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:IssuedCapitalMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:SharePremiumMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:TreasurySharesMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:OtherReservesMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:RetainedEarningsMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5967007LIEEXZXG4U097 2020-12-31 ifrs-full:NoncontrollingInterestsMember 5967007LIEEXZXG4U097 2020-12-31 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 ifrs-full:RetainedEarningsMember 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 ifrs-full:NoncontrollingInterestsMember 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 ifrs-full:OtherReservesMember 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 ifrs-full:SharePremiumMember 5967007LIEEXZXG4U097 2021-01-01 2021-12-31 ifrs-full:TreasurySharesMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:IssuedCapitalMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:SharePremiumMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:TreasurySharesMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:OtherReservesMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:RetainedEarningsMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5967007LIEEXZXG4U097 2021-12-31 ifrs-full:NoncontrollingInterestsMember 5967007LIEEXZXG4U097 2021-12-31 5967007LIEEXZXG4U097 2022-01-01 2022-12-31 ifrs-full:OtherReservesMember 5967007LIEEXZXG4U097 2022-01-01 2022-12-31 ifrs-full:SharePremiumMember 5967007LIEEXZXG4U097 2022-01-01 2022-12-31 ifrs-full:TreasurySharesMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:IssuedCapitalMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:SharePremiumMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:TreasurySharesMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:OtherReservesMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:RetainedEarningsMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:EquityAttributableToOwnersOfParentMember 5967007LIEEXZXG4U097 2022-12-31 ifrs-full:NoncontrollingInterestsMember 5967007LIEEXZXG4U097 2022-12-31 iso4217:NOK iso4217:NOK xbrli:shares
GENERATIO
FOR
GENERATIONS
ATIONS
FOR
GENE
Arendals Fossekompani Integrated Report 2022
Annual and Sustainability Report
For generations, Arendals Fossekompani has
provided people and communities with clean energy
and inspiration. Established in 1896 to harness the
energy from an everlasting resource, water – we
have utilized the beneﬁts of this resource to build
and develop high-tech companies. What started
as a local producer of hydropower, has transformed
into a global industrial investor.
While running water continues to power our business,
we search for, invest in, and support companies that
have the potential to make a difference. To enable
the transition to a more sustainable future we offer
human and ﬁnancial resources to renew and advance
industries. Our competence is particularly strong
in areas such as renewable energy, electriﬁcation,
materials, digitalization, and big data analytics.
We are a proud builder and supporter of technology
that impacts the world. That is our legacy, our history,
our future. It is what we have done, and what we’ll
continue to do.
For generations.
GENERATIONS
RATIONS
FOR
GENERATIONS
2
3
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ANNUAL AND SUSTAINABILITY REPORT
Financial and
Sustainability
Highlights 2022
Record-high
electricity
prices, increased
hydropower tax
The average price of electricity
in the NO2 spot market reached
record-high levels. An increased
tax burden on Norwegian hydro-
power producers reduced net
proﬁt for the year.
NOK
7.55
1.9% of market
cap paid as
dividend
In addition to quarterly cash
dividends of NOK 3.75 per share,
Arendals Fossekompani paid
extraordinary dividend totaling
NOK 3.80 per share, as dividend
in kind.
SaaS
growth
continues
Volue reported revenue growth
in all segments in 2022. Total
revenues grew by 17% to NOK 1.2
billion compared with 2021, while
SaaS revenues grew by 28%.
A global player
within induction
heating and
wireless
charging
Following the acquisition of
wireless charging solutions
provider IPT Technology, ENRX
(formerly known as Evolgy)
was established to combine
IPT Technology (Charge) with
EFD Induction (Heat). ENRX
saw high order intake during
2022 and an all-time-high
order backlog at year-end.
64%
Strong increase
in Tekna backlog
Tekna saw a 64% increase in its
backlog at year-end compared to
2021. The Tekna share made the
transition to Oslo Børs, the main
list of the Oslo Stock Exchange
on 1 July 2022.
Establishing
energy storage
company
Following the acquisition of the
German energy storage specialist
Commeo in Q2, AFK established
Ampwell to build an eco-system for
battery technology and Battery-
as-a-Service business model.
Sustainability
linked loan
facilities
Renewal of loan facilities
totaling NOK 1.8 billion was
ﬁnalized in June. As part
of the new terms, Arendals
Fossekompani will be rewarded
for its performance related to a
selection of sustainability targets.
Certiﬁed as
Equal Workplace
Following a thorough evaluation
of how equality and diversity are
implemented in the company
strategy, Arendals Fossekompani
was certiﬁed as an Equal
Workplace in 2022.
Science
Based Targets
We have in 2022 submitted
science based emission reduction
targets in line with the Science
Based Target initiative criteria
and recommendation. We are
committed to reducing absolute
Scope 1 and Scope 2 greenhouse
gas emissions by 42% by 2030.
Reduced
greenhouse
gas emissions
Continuous focus on sustainability
resulted in reduction of our total
Scope 1 and Scope 2 emissions
from 4,404 tCO
2
e in 2021 to
4,061 tCO
2
e in 2022.
FINANCIAL AND SUSTAINABILITY HIGHLIGHTS 2022
4
5
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ANNUAL AND SUSTAINABILITY REPORT
Content
01
Arendals Fossekompani
8
CEO Statement
10
Arendals Fossekompani in the World
12
Who We Are
14
Value Creation for Generations
16
Arendals Fossekompani Group
18
AFK Group Managment
24
Shareholder Information
28
Reporting 100 Years Ago
32
02
Portfolio
34
Assets
36
Green Energy
AFK Vannkraft
38
Ampwell
42
Vergia
46
Digitalization & Big Data Analytics
NSSLGlobal
50
Volue
54
Alytic
58
Electriﬁcation & Materials
Tekna
62
ENRX
66
Property
AFK Property
70
03
From the Boardroom
74
Board of Directors
76
Board of Directors’ Report
78
Corporate Governance Report
84
04
Sustainability
98
Integrity
100
Reporting Frameworks
100
EU Taxonomy Summary
102
Stakeholder Dialogue and Materiality Analysis
105
Sustainability Priorities
106
Updated Materiality Assessment
106
Strategic Focus Areas
107
Membership Associations
108
Ethical Business Conduct
109
Responsible Investments
115
Optimizing the Portfolio Companies
118
A Great Place to Work
122
Community Engagement
135
Ambitions and Targets for 2023
138
05
Financial Statements
142
Annual Accounts and Notes in Full
144
Declaration by the Members of the Board and the CEO
228
Independent Auditor’s Report
230
06
Appendix
236
GRI Content Index
238
Independent Auditor’s Statement
246
List of Abbreviations
248
Additional Reports
250
Activity and Reporting Obligations Report 2022
Carbon Accounting Report 2022
EU Taxonomy Report 2022
Human Rights and Transparency Act Report 2022
Remuneration Report 2022
TCFD: Climate-Risk Assessment Report 2022
About This Report
251
6
7
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ANNUAL AND SUSTAINABILITY REPORT
CONTENT
CEO Statement
10
Arendals Fossekompani in the World
12
Who We Are
14
Value Creation for Generations
16
Arendals Fossekompani Group
18
AFK Group Management
24
Shareholder Information
28
Reporting 100 Years Ago
32
01
Arendals
Fossekompani
9
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
9
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Building a
2030 compliant,
high value portfolio
Arendals Fossekompani is further developing an advanced
technology and industry portfolio that is positioned in
high-growth global megatrends and aligned with global
sustainable development goals for 2030.
Lars Peder Fensli,
Interim CEO
Based on more than a century of renewable energy production, Arendals
Fossekompani has a broad and well-diversiﬁed portfolio with a strong sustain-
ability proﬁle. Major investments are in hydro, wind and solar power, software for
management of renewable energy, battery technology, optimisation of resources,
electriﬁcation, mobile communication solutions, and additive manufacturing. All our
businesses are well positioned in global megatrends, and they have strong organi-
sations and valuable customer bases. Our portfolio is very exciting, and we believe it
has a strong potential for value enhancement towards 2030 and beyond.
POSITIONING THE PORTFOLIO, BUILDING NEW BUSINESSES
In a busy 2022, Arendals Fossekompani completed various structural and strategic
actions, including the acquisition of energy storage specialist Commeo and induction
charging expert IPT Technology.
With the acquisition of Commeo, Arendals Fossekompani established the company
Ampwell, which will combine hardware from Commeo with technology from start-up
Cellect Energy, to build an eco-system for battery technology and a Battery-as-a-
Service business model.
IPT Technology was grouped with EFD Induction in a company called Evolgy, now
rebranded as ENRX. ENRX combines EFD Induction’s global market leadership in
industrial induction heating systems (Heat) with IPT Technology’s leading technology
in the high growth market for wireless induction charging solutions for mobility and
industrial applications (Charge).
A third acquisition, Factlines, was made through our portfolio company Alytic.
Offering a digital solution, Factlines makes supply chain mapping efﬁcient, support-
ing the process from requirements and code of conduct – to risk analysis, follow-up,
and dialogue.
CREATING LONG-TERM VALUE
Today, our portfolio companies have approximately 2,400 employees in 25 coun-
tries. The most important tasks for the AFK Group are to continue to create lasting
value for our shareholders, our employees and society at large and to exercise good
corporate governance of our portfolio companies.
AFK Group has a decentralised management model. The management and boards
of our portfolio companies have the main responsibility for shaping the development
of their companies. The Group is always represented on the boards and contributes
with strategic direction, ﬁnancial strength, a genuine interest in their businesses,
and a network that strengthens the position of both the Group and the companies.
SUSTAINABILITY AND SOCIAL RESPONSIBILITY
Our portfolio of companies has a clear green proﬁle and contributes in several ways
to the UN Sustainable Development Goals. Sustainability and corporate social
responsibility are important drivers of future value creation, in the form of require-
ments from customers, increased access to talent, increased access to capital and
increased interest in our share.
We are committed to the climate targets in the Paris Agreement. We are a UN Global
Compact member and continue to support its principles for responsible business
policies for human rights, labour, environment and anti-corruption.
Arendals Fossekompani has a strong organisation with highly skilled and dedicated
people. We also have a substantial ﬁnancial capacity, and a global customer base
which we will continue to serve in the best possible manner. The outlook for our
companies is good, and we have identiﬁed clear opportunities to strengthen and
build our position in selected segments and markets.
10
11
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Arendals
Fossekompani
in the world
NUMBER OF EMPLOYEES BY COUNTRY
Norway
745
USA
89
Thailand
12
Israel
5
Germany
359
Romania
80
Malaysia
8
Spain
5
India
229
France
72
Japan
7
South Korea
2
China
192
Denmark
65
Italy
6
Austria
1
Canada
179
Sweden
59
Netherlands
6
United Kingdom
155
Switzerland
22
Singapore
6
Poland
126
Brazil
16
Finland
5
Arendals Fossekompani Parent Company
(AFK Group Management, AFK Vannkraft), AFK Property
Employees
38
Head ofﬁce
Arendal, Norway
Countries
Norway
Vergia
Employees
3
Head ofﬁce
Arendal, Norway
Countries
Norway
Ampwell
Employees
60
Head ofﬁce
Arendal, Norway
Countries
Norway, Germany
Alytic
Employees
86
Head ofﬁce
Arendal, Norway
Countries
Norway, Germany, Netherlands
Volue
Employees
778
Head ofﬁce
Oslo, Norway
Countries
Norway, Germany, Poland, Denmark,
Sweden, Switzerland, Finland, Japan, Spain
NSSLGlobal
Employees
223
Head ofﬁce
London, UK
Countries
United Kingdom, Germany, Norway, Denmark,
Singapore, Israel, Netherlands, Poland, USA, Sweden
Tekna
Employees
216
Head ofﬁce
Sherbrooke, Canada
Countries
Canada, France, China, South Korea
ENRX
Employees
1,047
Head ofﬁce
Skien, Norway
Countries
India, China, Norway, Germany, USA, Romania, France, United Kingdom,
Poland, Brazil, Thailand, Malaysia, Italy, Japan, Sweden, Spain, Austria
13
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
12
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
Who we are
Arendals Fossekompani is an industrial investment company
that combines industrial, technological, and capital markets
expertise to identify and develop opportunities for value
creation. We have an attractive portfolio positioned in verticals
driven by global megatrends. Our portfolio companies have
2,400 employees in 25 countries. Established in 1896 to
harness the energy from an everlasting natural resource;
water, Arendals Fossekompani is still a proud producer
of hydropower. In addition, we operate globally in many
forward-looking industries including 3D printing, algo trading,
satellite services, battery and solar technology, software and
digitalisation, as well as various green energy technologies.
Collaborative
We develop our companies in collaboration
with the world around us and our partners.
Long-term
Based on more than a century of industrial
history, we continue to develop our companies
in a sustainable and long-term perspective.
Dynamic
We show the ability, energy and
motivation to carry out our ambitions.
Responsible
We act in an ethical and responsible manner
in all situations. We develop our companies
in a sustainable manner.
Our mission
Arendals Fossekompani shall create lasting value for its stakeholders through long-
term and active development of the companies we own. We invest in and own com-
panies that make energy from renewable sources more usable and accessible, and
that contribute to a more sustainable use of resources. Based on our industrial and
ﬁnancial expertise, we also invest in technology and energy companies that enable
the green transition.
Arendals Fossekompani is a proud builder and supporter of technology that impacts
the world. That is our legacy, our history, our future. It is what we have done, and what
we’ll continue to do. For generations.
Our values
14
15
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Value creation
for generations
1896
Company
founded
1913
Electricity
and industry
1927
More
hydropower
1960s
Financial
investor
1990s
New
opportunities
2000s
International
investor
Arendals Fossekompani was
founded on 30 January 1896
to harness the forces in the
Arendal watercourse system
and transform them into elec-
tric power. We acquired rights
to several waterfalls, including
Bøylefossen and Flatenfossen.
Norwegian industrial entrepre-
neur Sam Eyde was instrumental
in the early years.
Arendals Fossekompani gradu-
ally built a substantial ﬁnancial
capacity. At the end of the 1960s,
the company changed it's mission
statement and built a portfolio of
ﬁnancial investments in listed and
unlisted companies.
The construction of Bøylefoss
Hydropower Plant started in 1911,
in parallel with the establishment
of new industry in Eydehavn. The
ﬁrst electric power from Bøylefoss
was delivered to Eydehavn in the
summer of 1913. That same year,
Arendals Fossekompani was listed
at Oslo Børs.
Deregulation of the Norwegian
electricity market presented new
market opportunities. Arendals
Fossekompani played an active
role and established a subsidiary,
Markedskraft, as an independent
provider of services in the Nordic
and European wholesale electric-
ity market.
Growing demand for electricity
for industrial purposes, led to
the development of Flatenfoss
Hydropower Plant in 1927. The
original plant was operational
until it was replaced in 2009.
The new millennium marked the
start of the transformation of
Arendals Fossekompani, from
a local hydropower producer
to an international investment
company. A series of successful
investments in Norwegian and
international companies, since the
early 2000’s up until today, have
contributed to today’s portfolio of
companies within forward-looking
industries such as Green Energy,
Technology, Electriﬁcation,
Materials and Property.
Consolidated revenues increased
from around NOK 250 million in
2004 to nearly NOK 4,600 million
in 2022.
In 2022, hydropower accounted
for approximately thirteen percent
of consolidated revenues.
17
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
16
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
Arendals
Fossekompani
Group
Arendals Fossekompani is an industrial investment
company holding nine core investments and a portfolio
of ﬁnancial investments. These operations employ
2,400 people in 25 countries.
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Total revenue
4,587
4,232
3,157
EBITDA
726
686
401
Operating proﬁt (EBIT)
429
450
161
Operating margin
9%
11%
5%
Earnings before tax (EBT)
426
332
99
Earnings after tax (EAT)
-33
97
66
Operating cash ﬂow
483
857
135
NIBD
-1,208
-1,805
-580
Equity
3,784
3,909
3,856
Equity ratio
48%
57%
55%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
1,614
1,581
656
1
Scope 2 GHG (location-based) (tCO
2
e)
2,447
2,823
238
Scope 3 GHG (tCO
2
e)
3,394
1,276
175
Energy consumption (MWh)
25,859
24,449
10,336
Social
Lost time injury rate
1.0
0.8
-
Sick leave
3.0%
-
-
Absentee rate
3.0%
1.5%
2.9%
Turn-over rate
16%
7.6%
4.5%
Women in Board of Directors
28%
30%
13%
Governance
CoC signed
78%
87%
87%
No of reported incidents/breach of CoC/SCoC
2
-
-
Operations assessed for corruption risks
69%
100%
-
Training in CoC and Whistleblower policy
45%
87%
-
1.
Former portfolio company, Cogen, is not included.
ENRX did not report GHG emissions in 2020.
Head ofﬁce
Arendal, Norway
Chair
Trond Westlie
Chief Executive Ofﬁcer
Lars Peder Fensli
Employees
2,400
Countries
25
Arendals Fossekompani (AFK) has proud traditions in power production and
owns and operates two hydropower plants. In addition, Arendals Fossekompani
operates globally in many forward-looking industries including 3D printing, algo trading,
satellite services, battery and solar technology, software, and digitalisation, as well
as various green energy technologies.
18
19
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
In 2022, Arendals Fossekompani reported consolidated revenues of NOK 4,587 mil-
lion (4,232 million) and operating proﬁt of NOK 429 million (450 million). Ordinary
proﬁt after tax amounted to NOK -33 million (97 million), of which the AFK sharehold-
ers’ share of the proﬁt was NOK 6 million (107 million). Including currency differences,
changes in the value of available-for-sale ﬁnancial assets, minority interests, and
other comprehensive income items, the Group’s total comprehensive income was
NOK 12 million (160 million).
The Arendals Fossekompani’s ﬁnancial position remains solid. The cash position
as at 31 December amounted to NOK 1,160 million. In addition, the company has
undrawn credit facilities of NOK 1,947 million, securing net available liquidity of NOK
3,107 million at year-end.
Consolidated revenues in 2022 increased by 8% year-on-year. Adjusted for AFK
Property’s revenue recognition of the first phase of the development project
Bryggebyen in 2021, consolidated revenues grew by 23% in 2022, compared to 2021.
2022 was marked by high electricity prices and high activity levels in the portfolio
companies. AFK also completed two strategic transactions during 2022, including
the acquisition of energy storage specialist Commeo, forming the basis for establish-
ing the energy storage company Ampwell, as well as the acquisition of the induction
charging company IPT Technology, which was merged with EFD Induction, forming
ENRX Group.
Volue
Volue continues the transformation towards recurring revenues and Software-as-a-
Service (SaaS), with SaaS revenues growing by 28% from 2021 to 2022. Growth was
particularly strong within the Energy segment, driven by volatile power markets and
high demand for forecast, analytics, and trading services. The SaaS transformation
builds a platform that can handle a large number of new customers, enabling fur-
ther revenue growth. Recurring revenue constituted 63 percent of total revenues
and reached NOK 765 million in 2022, an increase of 15 percent compared to 2021.
Strategic contracts won within all segments during the year conﬁrms Volue’s capa-
bilities and position in the market.
Tekna
Tekna reported operating revenues of CAD 26.9 million in 2022, in line with 2021.
The order backlog as per year-end saw a 64% increase from 2021, reﬂecting grow-
ing demand for additive materials and strong pipeline of systems projects. Tekna
initiated a machine capacity increase program during 2022 to meet the demand
from additive manufacturing, targeting 70% capacity increase. Steps were taken
during the year to improve proﬁtability and cash position. Tekna uplisted to Oslo Børs
during 2022.
ENRX
ENRX (previously Evolgy) was formed through the combination of induction heating
company EFD Induction and the wireless charging solutions provider IPT Technology,
the latter acquired during 2022. ENRX combines EFD Induction’s global market lead-
ership in industrial induction heating systems (Heat) with IPT’s leading technology
in the high-growth market for wireless induction charging solutions for mobility and
industrial applications (Charge). Total operating revenues increased by 15% to EUR
132 million in 2022, driven by both higher activity level within the Heat segments,
as well as a smaller revenue contribution from the Charge segment. Order intake
in 2022 amounted to EUR 157 million as at 31 December, corresponding to a 22%
increase year-over-year. The backlog at year-end was at an all-time high.
NSSLGlobal
NSSLGlobal reported continued strong revenue growth of 13% and proﬁtability
increase during 2022, with airtime revenues and expansion of maritime and gov-
ernment project work as main drivers. NSSLGlobal experienced healthy sales
throughout the year, including new VSAT leasing orders, governmental and maritime
engineering orders, as well as defense contracts across Europe. The company’s long-
term backlog provides a stable outlook going forward.
Alytic
Alytic continued the development of its portfolio of data- and technology-driven
companies during 2022. Highlights for the year included the launch of Kontali’s new
seafood analytics portal Edge and expansive investments in Greenfact to position
the company as a global provider of market data analytics and insight withing green
certiﬁcates and carbon markets. In addition, Alytic established itself in the ESG ser-
vices vertical through the acquisition of Factlines.
AFK Vannkraft
AFK Vannkraft (Hydropower) contributed with substantial revenues and operating
proﬁt in 2022 due to signiﬁcant uplift in electricity prices. The average spot price in
the NO2 price area was EUR 211/MWh (71/MWh) in 2022 while production reached
351 GWh (517 GWh). Operating revenues for the year reached NOK 606 million (373
million) with an operating proﬁt of NOK 537 million (300 million). Earnings after tax
amounted to NOK 156 million (170 million), including a NOK 75 million incremental
tax provision from changes in the tax regime for Norwegian hydropower producers
implemented during 2022.
SUSTAINABILITY
For the ﬁrst time, our Annual Report is compliant with the Global Reporting Initiative
(GRI). The GRI standards are the most widely used standards for sustainability
reporting.
Total Scope 1 emissions for Arendals Fossekompani as a group was 1,614 tCO
2
e in
2022, up from 1,581 in 2021. Scope 2 emissions decreased to 2,447 tCO
2
e (2,823),
while the energy consumption increased slightly. Scope 3 emissions increased to
3,394 tCO
2
e (1,276), mainly because all portfolio companies began reporting waste
in 2022.
In 2022, the AFK Group did an assessment of the Group’s activities against the EU
taxonomy. 58% of the Group’s turnover is eligible with the EU Taxonomy. An align-
ment of 22% shows that the Group contributes positively. Our investment strategy
has resulted in 69% eligibility and 25% alignment of the Group’s CapEx. For OpEx,
the numbers are 50% eligibility and 14% alignment. The OpEx KPI are based on our
reporting on both turnover and CapEx, as no activities have been identiﬁed solely
for OpEx.
The lost time injury rate was 1.0 in 2022, a slight increase from 0.8 in 2021. The absentee
rate increased to 3.0% (1.5%). The Women in Board of Directors rate decreased
slightly because of some start-up portfolio companies which have not yet established
a Board of Directors.
The share of employees that has signed the Code of Conduct decreased to 78%,
mainly due to new acquisitions and newly established companies, especially the
acquisitions of Commeo and IPT Technology.
EVENTS AFTER THE CLOSE OF THE YEAR
On 16 December 2022, it was announced that Ørjan Svanevik would resign as CEO of
Arendals Fossekompani, and CFO Lars Peder Fensli would function as interim CEO
as of 1 January 2023 until a new CEO was appointed. On 10 January 2023, it was
20
21
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
announced that Benjamin Kristoffer Golding was appointed new CEO of Arendals
Fossekompani. Golding will assume his position at Arendals Fossekompani as soon
as his job at DNB comes to an end, but no later than 1 August 2023.
On 11 April 2023, Arendals Fossekompani and Tekna signed a loan facility agreement
totaling MCAD 25 to ﬁnance operations and further growth in Tekna. The facility will
be made available in three tranches (MCAD 5+10+10).
On 9 February 2023, the Board of Directors decided to pay an ordinary cash divi-
dend of NOK 0.95 per share for the fourth quarter 2022. The dividend was paid on
22 February.
On 8 March 2023, the construction of Kilandsfoss Hydropower Plant began. When
ﬁnalized in 2025, Kilandsfoss will produce approximately 38 GWh. Project partners
are the municipalities of Froland and Åmli, each with one-third ownership.
OUTLOOK
There is ongoing uncertainty associated with the war in Ukraine, the tax regime for
the hydropower industry, supply chain constraints, soaring inﬂation, rising interest
rates, as well as the development of energy prices. In this unpredictable environment,
Arendals Fossekompani’s solid ﬁnancial position enables continued support of the
portfolio companies, both in handling short-term challenges but also in continued
investments to strengthen their long-term competitiveness.
In light of the market’s estimated power price trend for 2023 and forecasted produc-
tion, the revenues and operating proﬁt for AFK Hydropower are expected to be lower
than the all-time-high in 2022.
Following high activity levels in all portfolio companies, somewhat offset by lower
power price expectations, 2023 revenues are expected to be on par with 2022.
Operating proﬁt is expected to be lower than 2022.
Our main sustainability target for 2023 is to ensure that our governance is in accor-
dance with the OECD Guidelines for Multinational Enterprises and NUES. AFK will
apply to become a member of Princibles for Responsible Investments (PRI).
In Norway, 2023 marks the ﬁrst year of mandatory reporting on the EU Taxonomy.
During the 2022 assessment, we identiﬁed areas of improvement, and these will
be included in the strategy for 2023. Our focus will be on documentation and scope
of alignment assessments. As a part of our Science Based Target project, we have
committed and submitted science-based emission reduction targets for AFK Parent
Company and AFK Hydropower. The targets will be validated by the Science Based
Target initiative (SBTi) in 2023. Portfolio companies must set their own targets within
ﬁve years. We will also commit to setting net-zero targets to align with the ambitious
goals in the Paris Agreement, which means to reduce emissions to limit global warm-
ing to 1.5 °C by 2050.
We aim to reach the goal of 40% female members on our Board of Directors in 2023.
In addition, we aim to have 40% women in C-suite positions by 2027.
SHARE PRICE
There is a total of 55,995,250 shares in the company. The share price on 31 December
2022 was NOK 250.5, compared to NOK 445 on 31 December 2021, corresponding
to a decrease of -43.7%. When including direct yield (dividend payouts) in the same
period, total decrease in shareholder value was -42.0%.
Arendals Fossekompani’s total market capitalization was NOK 14.0 billion at year-end.
Compounded annual return to AFK shareholders was 18.0% (29.5% including dividends)
in the period December 2012 to December 2022.
22
23
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Group
Management
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Revenue and other income
23
9
7
EBITDA
-82
-60
-52
Operating proﬁt
-86
-63
-53
Operating margin
-
-
-
Earnings before tax (EBT)
461
1,283
504
Provision for income tax
5
30
-15
Earnings after tax
456
1,253
519
Operating cash ﬂow
-539
310
-3,237
NIBD
-1,279
-950
-400
Equity
2,228
1,772
519
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
0
0
0
Scope 2 GHG (Location based) (tCO
2
e)
0.3
0.3
0.6
Scope 3 GHG (tCO
2
e)
34
46
22
Energy consumption (MWh)
32
33.7
32.9
Social
Lost time injury rate
0
0
0
Sick leave
1.3%
-
-
Absentee rate
1.4%
0.8%
0%
Turn-over rate
5%
0%
0%
Women in Board of Directors
43%
43%
43%
Governance
CoC signed
100%
100%
100%
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
100%
100%
-
Training in CoC and Whistleblower policy
100%
76%
-
Equity ratio
74%
75%
43%
Head ofﬁce
Arendal, Norway
Chair
Trond Westlie
Chief Executive Ofﬁcer
Lars Peder Fensli
Employees
21
Countries
1
Arendals Fossekompani Group Management employs
21 people at the head ofﬁce in Arendal. The team
focuses on the development of new sustainable
business opportunities, active ownership of portfolio
companies, hydropower generation, property projects,
and management of ﬁnancial investments.
Combining industrial, technological, and capital markets expertise, Group Management
identiﬁes and develops opportunities for value creation. As an active owner of our
portfolio companies, we drive strategy developments, ﬁnancing, restructuring and
transactions, to ensure long-term sustainable value creation.
24
25
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Arendals Fossekompani has an attractive portfolio positioned in verticals driven by
global megatrends, such as Green Energy, Digitalisation & Big Data Analytics, and
Electriﬁcation & Materials. Our companies are both listed and privately own, and
Arendals Fossekompani is – as part of our strategy – the majority owner.
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
In 2022, AFK Group Management reported revenues of NOK 22 million (9 million).
Operating expences increased to NOK 105 million (69 million), mainly due to costs of
several acquisition processes and increased number of employees. The operating
proﬁt was NOK -86 million (-63 million). Net proﬁt for the year was NOK 456 million,
mainly driven by dividend payments from portfolio companies and proﬁt from trans-
actions.
Arendals Fossekompani's ﬁnancial position remains solid. The cash position as at
31 December amounted to NOK 1,160 million. In addition, the company has undrawn
credit facilities of NOK 1,947 million, securing net available liquidity of NOK 3,107 million
per year-end.
During 2022, we made two strategic investments through the acquisitions of IPT
Technology and Commeo. Both companies have already proven to be highly relevant
additions to our portfolio, expanding our offering in two attractive megatrends and
utilizing and creating synergies within our portfolio.
On 7 April, Arendals Fossekompani acquired the German energy storage special-
ist Commeo GmbH and formed the new company Ampwell. With Commeo as a
key building block, Ampwell will build an eco-system for battery technology and a
Battery-as-a-Service business model.
On 19 May, the wireless charging solution provider IPT Technology GmbH was
acquired, which led to the establishment of the Evolgy Group, which initially consists
of EFD Induction and IPT Technology (Evolgy changed its name to ENRX in March
2023).
In June, loan facilities totaling NOK 1.8 billion were renewed at improved terms and
with links to sustainability targets. As such, Arendals Fossekompani is rewarded for
its continuous sustainability work.
GHG emissions consist of Scope 2 and Scope 3. In 2022, Scope 2 was 0.3 tCO
2
and
Scope 3 was 34 tCO
2
e. During 2022, we committed and set reduction targets in
line with the criteria and recommendations of the Science Based Targets initiative
(SBTi). This commitment includes reduction of absolute Scope 1 and Scope 2 GHG
emissions with 42% by 2030 from a 2021 base year.
The absentee rate was 1.4% in 2022. The turn-over rate was 5.0% with one tem-
porary employee leaving the company, while there were 5 new hires. As in previous
years, the rate of women in Board of Directors was 43%.
100% of employees have signed and received training in AFK’s Code of Conduct.
During 2022, a new Business partner Code of Conduct (BCoC) was developed. We
have a whistleblowing channel, so that employees can report on unwanted situations
anonymously. There were no reported incidents in the whistleblowing channel during
2022.
In 2022, the Transparency Act entered into force. To comply with this act, we have
completed a project where we gathered information from all main suppliers. The goal
of this assessment was to understand the most important risks in our value chain.
The results are published in the separate report Human Rights and Transparancy
Report. In addition, we have created a guideline for handling incoming requests for
information, in accordance with the Transparency Act.
26
27
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Arendals Fossekompani is committed to maintaining an
open dialogue with its shareholders, investors, analysts,
and the ﬁnancial markets in general. Our goal is to ensure
that the share price reﬂects its underlying value by making
all price-relevant information available to the market.
Shareholder
Information
200
400
600
800
1,000
1,200
1,400
2002 2003 2004 2005 2006 2007 2008 2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
2020
2021
2022
SHARE PRICE LAST 20 YEARS (NOK)
Share price
Share price incl. dividend
Share price incl reinv. dividend
We work to create shareholder value in the form of dividends and share price growth
over time. In accordance with the document Corporate Governance in Arendals
Fossekompani (last revised on 30 March 2021), the company’s dividend policy is
deﬁned as follows: “AFK’s dividend policy is to pay dividends that reﬂect the company’s
long-term strategy, ﬁnancial position and investment capacity. AFK’s objective is to
pay dividends that will provide shareholders with a competitive return over time.”
DIVIDEND FOR 2022
Total dividends paid in 2022 amounted to NOK 409 million, corresponding to NOK
7.55 per share. In addition to quarterly cash dividends of NOK 3.75 per share, Arendals
Fossekompani distributed a total of 11,300,000 shares in Tekna Holding ASA, equal
to one share for every 5 shares held in Arendals Fossekompani and corresponding to
NOK 3.80 per share, as dividend in kind. Total dividends paid was equivalent to 1.9%
of the volume-weighted average share price in 2022.
SHARES AND SHARE CAPITAL
As at 31 December 2022, there were a total of 55,995,250 shares in the company, of
which 1,118,319 were treasury shares (2.0 percent of the total number of outstanding
shares). The three largest shareholders of Arendals Fossekompani are Ulfoss Invest
AS (26.3%), Havfonn AS (26.0%) and Must Invest AS (25.2%).
There were 4,999 shareholders at year-end 2022, compared to 5,289 shareholders
at the end of 2021.
28
29
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
ANNUAL GENERAL MEETING
The Annual General Meeting is held as early in the year as is practically possible after
the close of the previous ﬁnancial year, usually in April or May.
21 days prior to the Annual General Meeting, meeting notices and attendance
registration forms are sent to all shareholders with a known address, and made avail-
able on the company’s webpage and via the Oslo Børs distribution service.
The annual report and other enclosures to the meeting notice are made available
solely via the company’s webpage and the Oslo Stock Exchange distribution service.
Shareholders who wish to receive the enclosures by post must contact the company.
Shareholders who are unable to attend the General Meeting may vote by proxy.
Representatives from the Board of Directors and the auditor attend the General
Meeting. The Chief Executive Ofﬁcer and the Chief Financial Ofﬁcer attend on behalf
of the management.
SHARE PRICE AND MARKET CAP
The price of shares in Arendals Fossekompani decreased by 43% in 2022 and closed
at 250.5 at year-end, corresponding to a market capitalization of NOK 14 billion.
TRADING VOLUME
AFK trading volume was comparable to 2021, with a total of 3,430,618 shares traded
in 2022, corresponding to 6.1 percent of all shares. Overall turnover from trading of
the AFK share in 2022 was NOK 1,299 million, compared to NOK 1,114 million in 2021.
The Group’s shares consist only of Class A shares, all of which have equal rights. In
accordance with Article 11 of the company’s Articles of Association, no shareholder
may, personally or by proxy, vote for more than one quarter of the total number of
shares.
Due to Arendals Fossekompani’s hydropower production, the current Norwegian
concession legislation stipulates, among other things, that a shareholder who
acquires more than 20 percent of the total number of shares must apply for a con-
cession. The Concession Act requires that the Board of Directors approve such
acquisitions. There are several other provisions in the concession legislation that
may entail that acquisition of the company’s shares may have consequences for
both the company itself and the other shareholders. Thus, the company has found it
necessary to have the opportunity to deny the approval of the acquisition of shares.
In accordance with Article 7 of the Articles of Association, any acquisition by means
of transfer is conditional on the Board’s consent. Consent may only be denied if there
is a valid reason for doing so.
STOCK EXCHANGE LISTING
Arendals Fossekompani ASA is listed at Oslo Børs under the ticker code AFK. The
company was listed in 1913 and is the second oldest company at Oslo Børs. The
shares are registered in the Norwegian Central Securities Depository with DNB ASA
as the account operator and issuer. The securities identiﬁcation number for the share
is ISIN NO 0003572802.
CURRENT AUTHORISATIONS
Currently AFK Parent Company owns 2.1% treasury shares. At Arendals
Fossekompani’s Annual General Meeting on 5 May 2022, the Board of Directors was
authorized to acquire treasury shares up to a maximum of 10 percent. In accordance
with this authorization, the Board of Directors is only permitted to acquire treasury
shares at a price ranging from a minimum of NOK 10 and a maximum of NOK 2,000
per share. This authorization will remain in effect until the Annual General Meeting
in 2023.
In 2022, the company sold 44,306 shares to Executive Management in connection
with the company’s incentive program.
OPTION SCHEMES
As at 31 December 2022, Arendals Fossekompani had no option schemes.
INVESTOR RELATIONS
Arendals Fossekompani seeks to maintain an open dialogue with shareholders, debt
holders, ﬁnancial analysts, and the stock markets in general. The company regularly
holds presentations in connection with the publication of quarterly results. All com-
pany press releases, stock exchange announcements and investor relations infor-
mation are available at www.arendalsfossekompani.no. The website also includes
quarterly reports, annual report, presentations, Articles of Association, and the ﬁnan-
cial calendar.
NOMINATION COMMITTEE
The company’s Nomination Committee consists of the following members:
Morten Bergesen (Chair), Simen Flaaten, and Trine Must.
AUDIT COMMITTEE
The company’s Audit Committee consists of the following members:
Stine Rolstad Brenna (Chair), Morten Bergesen, and Anne Grethe Dalane.
KEY FIGURES FOR AFK SHARE (NOK)
2022
2021
2020
2019
2018
Closing price 31/12
1
250.5
441
180
103
123
Annual growth (%)
-43
145
75
-17
24
High/Low
2
471 / 214
503 / 175
195 / 82
137 / 86
167 / 98
Share price average
2
322
302
127
112
134
Market cap 31/12 (million)
14,027
24,204
9,863
5,639
6,775
Dividend per share
3
7.55
37.08
3.44
2.24
34.81
Dividend accumulated
105.72
98.17
61.09
57.65
55.41
Annual turnover (million)
1,299
1,113
282
79
94
Volume
3,430,618
3,472,586
1,979,993
738,500
673,425
Total shareholder return (%)
-41.5
166.0
78.3
-15.0
58.9
1.
Numbers adjusted for share split effectuated in 2020
2. Based on closing price
3. Paid quarterly
30
31
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
Reporting
100 years ago
In 1922, production at Bøylefoss hydropower plant
increased compared to the year before, but activity
levels at the two major consumers at the time, Det Norske
Nitridaktieselskap (producer of aluminum) and Arendal
Smelteverk (producer of silicon carbide), was still below
average. Only two of the three turbines at Bøylefoss were
needed to produce enough energy to supply demand.
1922
TOTAL REVENUES FOR THE YEAR
NOK 1,097,000
NET PROFIT
NOK 503,000
DIVIDEND PAID TO SHAREHOLDERS
NOK 288,000
33
ARENDALS FOSSEKOMPANI
ANNUAL AND SUSTAINABILITY REPORT
32
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
Portfolio
02
Assets
36
Green Energy
AFK Vannkraft
38
Ampwell
42
Vergia
46
Digitalization & Big Data Analytics
NSSLGlobal
50
Volue
54
Alytic
58
Electriﬁcation & Materials
Tekna
62
ENRX
66
Property
AFK Property
70
35
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Digitalization & Big Data Analytics
Anything that can be digital, will be digital. By enabling and assisting
a digital transformation and providing decision-making data analytics,
our portfolio of companies are frontrunners in the digital energy space.
AFK ownership
60%
Head ofﬁce
Oslo, Norway
Market cap (31.12)
4,050 MNOK
Listed at
Oslo Børs
AFK ownership
80%
Head ofﬁce
London, UK
AFK ownership
95%
Head ofﬁce
Arendal, Norway
Electriﬁcation & Materials
Anything that can be electric, will be electric. As a result, demand for
electricity will of course grow, as will demand for smart electric solutions.
We invest in companies that install smartness into the electric future.
AFK ownership
71%
Headquarter
Sherbrooke, Canada
Market cap (31.12)
739 MNOK
Listed at
Oslo Børs
AFK ownership
95%
Head ofﬁce
Skien, Norway
Property
AFK ownership
100%
Head ofﬁce
Arendal, Norway
Green energy
Based on more than a century of hydropower production, we are looking
to expand our green energy portfolio. As the world is in dire need of more
green power, we are looking to capitalize on our competence and history
to develop more fossil-free energy sources.
AFK ownership
100%
Head ofﬁce
Froland, Norway
AFK ownership
100%
Head ofﬁce
Arendal, Norway
AFK ownership
100%
Head ofﬁce
Arendal, Norway
Investments are based on an understanding of
Arendals Fossekompani having the competence and
energy necessary to be the best owner in a long-term
perspective. Our investments are concentrated within
four areas: Green Energy, Digitalization & Big Data
Analytics, Electriﬁcation & Materials, and Property.
Arendals
Fossekompani
Assets
36
37
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
AFK Vannkraft
Portfolio company
AFK Vannkraft generates power at two locations in the Arendal
watercourse. The Bøylefoss and Flatenfoss hydropower plants
produce on average more than 500 GWh annually.
Head ofﬁce
Froland, Norway
Chair
Trond Westlie
Operating Manager
Jan Roald Evensen
Employees
15
Countries
1
Running water is an important part of our running business. For more than 100 years,
we have extracted energy from the river Nidelva in the Arendal watercourse.
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Operating revenue
606
373
63
Operating proﬁt (EBIT)
535
298
-2
Operating margin
88%
80%
-3%
Earnings before tax (EBT)
535
298
-2
Provision for income tax
387
130
-3
Earnings after tax (EAT)
148
169
1
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
20
23
12
Scope 2 GHG (Location based) (tCO
2
e)
1.9
2.6
3.0
Scope 3 GHG (tCO
2
e)
7.8
18
0.2
Energy consumption (MWh)
357
277
173
Social
Lost time injury rate
0
0
0
Sick leave
5%
-
-
Absentee rate
6%
1.3%
7.9%
Turn-over rate
0%
0%
0%
Women in Board of Directors
43%
43%
43%
Governance
CoC signed
100%
100%
100%
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
100%
100%
-
Training in CoC and Whistleblower policy
100%
100%
-
38
39
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Power price in the NO2 price
area and power generation
for Arendals Fossekompani
per week for the period
30/09/2021 – 31/12/2022.
POWER PRICE & POWER GENERATION
Power generation (GWh/Week)
Power price (EUR/MWh)
100
200
300
400
500
600
2.5
5.0
7.5
10.0
12.5
15.0
10/21
01/22
04/22
07/22
10/22
01/23
AFK Vannkraft is required by law to improve the power plants and associated dam
facilities, and consequently Arendals Fossekompani is planning upgrades to both
plants in the coming years. The reconstruction of dams will start once detailed
requirements have been agreed with the Norwegian Water Resources and Energy
Directorate (NVE).
AFK Vannkraft reported revenues of NOK 606 million (373 million) in 2022. EBITDA
amounted to NOK 545 million (308 million) and operating proﬁt to NOK 535 million
(298 million). Net ﬁnancial items consist primarily of internal and external dividends
and transactions effects, currency effects, and interest costs.
Provision for income tax amounted to NOK 378 million (130 million) in 2022. The tax
provision reﬂects the following changes in the tax regime for Norwegian hydropower
producers, as presented by the Norwegian government on 28 September 2022: i)
increased resource rent tax from 37% to 45% as of 1 January 2022 and ii) high-price
contribution tax of 23% applicable from 28 September 2022 on realized monthly
average electricity prices above NOK 0.7/kWh. These changes resulted in an incre-
mental provision for income tax amounting to NOK 75 million in 2022.
Electricity prices in southern Norway rose in the three ﬁrst quarters of the year.
However, in the fourth quarter the prices started to decrease, resulting in an aver-
age price in the NO2 price area for 2022 of 211 EUR/MWh (71 EUR/MWh). This is the
highest annual price level seen in the NO2 price area. The high price level was a result
of several factors, including i) low hydro reservoir levels, due to low inﬂow and low
snow reservoirs from the winter season, ii) strong interconnections from the NO2
price area to the European power market, and iii) high prices for coal, gas, and CO
2
lifting the European prices for electricity.
Our hydropower plants had some minor interruptions due to planned maintenance
and inspections in 2022. Power generation amounted to 351 GWh (517 GWh). The
Norwegian Water Resources and Energy Directorate issued a special permission
for the minimum water ﬂow regulation in the watercourse to be reduced from 40 to
30 m
3
/s for the summer season and until 1 November, which resulted in record low
production in this period. AFK has a deﬁned strategy of selling hydropower produc-
tion in the day-ahead (spot) market.
Precipitation and inﬂow by the end of the year were respectively around 91% and
76% of the norm for the watercourse. The accumulated amount of snow and the
reservoir levels in the water course was higher than normal by year-end.
Essential audits and maintenance routines took place during the year with established
control procedures for the hydropower facilities.
In 2022, our Scope 1 emissions were 20 tCO
2
e, compared to 23 tCO
2
e in 2021. Our
location-based Scope 2 emissions were 2,2 tCO
2
e, slightly lower than the year before.
Our Scope 3 emissions were 52 tCO
2
e in 2022.
During 2022 we conducted a risk and vulnerability assessment regarding HSE and
worktasks to identify possible hazards and increase awareness. All incidents are
recorded. In 2022 there was no incidents.
Species of ﬁsh affected by our hydropower stations have been subject of an external
audit. In 2022, there were three species of ﬁsh in the watercourse, which is the same
as in previous years.
OUTLOOK
Considering the market’s estimated power price trends for 2023, water levels and
forecasted production, AFK Hydropower expects revenues and operating proﬁt for
2023 to be lower than in the record-breaking year 2022.
Actual energy prices depend on many factors, including hydrological balance, oil
and gas prices, weather conditions, temperatures, and more. With limited reservoir
capacity, the production volume will also be dependent on precipitation.
AFK Hydropower will perform a complete environmental risk and vulnerability
assessment in 2023, to further map and improve the impact on the surrounding
environment.
Rehabilitation of the exterior of the Bøylefoss hydropower plant building will start
in 2023.
We aim to distribute a new Business Partner Code of Conduct in 2023.
40
41
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Ampwell
Portfolio company
Ampwell was established by Arendals Fossekompani in
2022 to build an eco-system for battery technology and
a Battery-as-a-Service business model. Efﬁcient energy
storage solutions are needed to reduce energy costs and
enable the green transition. With Ampwell, it is possible
to fully utilize non-ﬂexible power production, like wind
and solar, to secure a functional and stable energy grid.
In April 2022, Arendals Fossekompani acquired 54.9 percent of Commeo, a German
company specializing in energy storage and energy management solutions.
Commeo provides solutions for commercial and industrial energy storage by manu-
facturing battery modules and rack systems, including control units and software for
monitoring and data logging. Commeo’s energy storage solutions could for example
be used for ‘peak-shaving’ purposes (using energy from the battery racks during
peak price periods to avoid steep tariffs charged by the energy system operators)
or time shifting (to reduce energy costs by shifting energy consumption to low price
periods).
Head ofﬁce
Arendal, Norway
Chair
Torkil Mogstad
Chief Executive Ofﬁcer
Torkil Mogstad
Ownership
100%
Employees
60
Countries
2
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Operating revenue
105
-
-
EBITDA
-38
-
-
Operating proﬁt
-53
-
-
Operating margin
-50%
-
-
Earnings before tax (EBT)
-62
-
-
Operating cash ﬂow
-64
-
-
NIBD
373
-
-
Equity
31
-
-
Equity ratio
6%
-
-
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
26
-
-
Scope 2 GHG (location-based) (tCO
2
e)
15
-
-
Scope 3 GHG (tCO
2
e)
36
-
-
Energy consumption (MWh)
227
-
-
Social
Lost time injury rate
17
-
-
Sick leave
6.4%
-
-
Absentee rate
6.4%
-
-
Turn-over rate
17%
-
-
Women in Board of Directors
0%
-
-
Governance
CoC signed
0%
-
-
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
0%
-
-
Training in CoC and Whistleblower policy
0%
-
-
42
43
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Established in 2014, Commeo has over the years developed its proprietary energy
storage system and is now in a position where the product can be manufactured on
an industrial scale. Commeo systems typically range from 50 kWh to 1 MWh, but
the modular plug-and-play setup allows for even larger systems. The company is
on a strong growth trajectory and has started the construction of a new production
facility which will be one of Germany’s largest.
In 2022, Arendals Fossekompani acquired 40% of Cellect Energy, a Spanish com-
pany currently developing analysis and control software in cooperation with some
of the largest energy players in Europe. The solutions are speciﬁcally designed for
the stationary storage market and will help customers utilize the stored energy in
the best possible manner. The solutions are meant to be agnostic, which means they
will be able to connect to several different batteries, independent of manufacturer
and technology. Arendals Fossekompani will reach majority ownership by the end
of H1 of 2023.
2022 IN BRIEF
Revenues for 2022 (June-December) amounted to EUR 10.5 million, and operating
proﬁt in the same period was EUR -5.8 million. Revenues were driven by increasing
battery module sales in Commeo throughout the year and increased production
capabilities. Investments in growth in Commeo and Cellect Energy, as well as at
Ampwell parent level, contributed to negative margins in 2022.
The construction of Commeo’s new semi-automatic production facility is currently
ongoing. The ﬁrst part of the new production facilities is estimated to be ﬁnalized in
mid-2024 and will over time enable production capacity above 1 GWh. The demand
for stationary storage, and the sales pipeline for Commeo, continues to increase.
Since the beginning of 2022, Cellect Energy has rapidly developed its software plat-
form, with new applications being developed according to plan. In parallel, the com-
pany has built a strong pipeline of leads and trial customers, from small commercial
& industrial operations, to large and international utility-scale clients.
In 2022 Ampwell performed a double materiality analysis resulting in the following
focus areas: Reliable and resilient energy, Circularity and lifecycle management,
Material sourcing and supply chains, Attractive employer, and Business ethics.
In its ﬁrst year of business, Ampwell started to report on its Scope 1, Scope 2 and
Scope 3 emissions. Emissions stem almost entirely from the Commeo production
facility. Scope 1 emissions in 2022 were 26 tCO
2
e, mainly from transportation. Scope
2 emissions are related to consumption of electricity at the production facility in
Germany and was 15 tCO
2
e in 2022, where most of the energy is bought with guar-
antees of origin. Scope 3 emissions in 2022 were 36 tCO
2
e and related to waste and
business travel.
Ampwell did its first assessment of activities against the EU Taxonomy, where
Commeo’s activities were assessed. 100% of Commeo’s revenue was found to be
aligned with the activity ‘storage of electricity’.
OUTLOOK
Driven by strong demand for energy storage solutions, Ampwell expects to
generate strong revenue growth in 2023, which will be its ﬁrst full year of operation.
EBIT is expected to improve from the 2022 level but remain negative for the year due
to the ramp-up phase of production of battery modules and development of related
software solutions. Uncertainty remains high due to the strained global supply situ-
ation related to components.
In 2023, a sustainability strategy will be developed.
44
45
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Vergia
Portfolio company
Arendals Fossekompani established Vergia early in
2022 to combine all existing green infrastructure
projects and related portfolio companies in a new entity.
Vergia is a strategic green energy enabler leveraging
in-house competence with strategic partners to develop
infrastructure projects in alternative verticals within
the energy transition sphere.
The Vergia ecosystem includes verticals such as small-scale hydropower, energy
parks, power-to-x, offshore wind, and green fuel. Vergia is owned 100% by Arendals
Fossekompani.
Head ofﬁce
Oslo, Norway
Chair
Trond Westlie
Chief Executive Ofﬁcer
Martin Kjäll-Ohlsson
Ownership
100%
Employees
3
Countries
1
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Total revenue
1
EBITDA
-7
Operating proﬁt
-7
Operating margin
Earnings before tax (EBT)
-18
-2
Operating cash ﬂow
-7
NIBD
5
-10
Equity
9
18
Equity ratio
28%
100%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
0
-
-
Scope 2 GHG (location-based) (tCO
2
e)
0.1
-
-
Scope 3 GHG (tCO
2
e)
2.8
-
-
Energy consumption (MWh)
9.1
-
-
Social
Lost time injury rate
0
-
-
Sick leave
0.8%
-
-
Absentee rate
0.8%
-
-
Turn-over rate
0%
-
-
Women in Board of Directors
0%
-
-
Governance
CoC signed
100%
-
-
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
0%
-
-
Training in CoC and Whistleblower policy
100%
-
-
46
47
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
OFFSHORE WIND
Arendals Fossekompani and Ferd, two of Norway’s leading industrial investment
companies, have come together to establish the offshore wind company Seagust.
Seagust is structured as a 50:50 joint venture between Vergia and Ferd, with a
mandate to become an offshore wind developer with operations domestically and
internationally. Seagust and Swedish energy major Vattenfall have joined forces with
the intension to bid on two areas in the upcoming Norwegian offshore wind licensing
round.
AMMONIA
Vergia and Grieg Maritime Group have joined forces to create a leading
provider of green ammonia. North Ammonia is dedicated to developing the next gen-
eration green fuels for shipping and transportation. The company builds on extensive
ﬁrst-hand experience: Grieg Maritime Group has more than 60 years of experi-
ence in shipping. Arendals Fossekompani has 126 years of experience in industrial
developments and green power production. Eydehavn in Arendal has been chosen as
the ﬁrst production site for North Ammonia. Eydehavn is being developed as a mari-
time hub and is ideally located for green ammonia production and distribution. MoUs
have been signed with maritime end-users. World-class technology, engineering and
maritime cooperation partners are in place to develop the project and production
facility.
SMALL-SCALE HYDROPOWER
Demand for electricity is expected to grow signiﬁcantly in years to come, due to
electriﬁcation of the transportation and industry sectors, increased household con-
sumption, and interconnectors between the Nordics and Europe. Vergia has two
small-scale hydropower development projects; Kilandsfoss and Glomsdam, which
can contribute with an annual production of 38 and 7.3 GWh respectively.
ENERGY PARKS
Vergia is developing Bøylestad Energy Park, an industrial and commercial area
facilitating energy intensive industry, powered by renewable energy. The area is
situated next to one of the largest energy hubs in Southern Norway, which makes
for a highly suitable area for power intensive industries. Bøylestad Energy Park also
offers proximity to highway systems, railway, and a port, which further increases the
strategic value of the area.
HYDROGEN
Vergia, Kongsberg Maritime and Moreld have joined forces to develop a combined
offshore substation and hydrogen factory. Hydepoint is a complete solution for
receiving, converting, and transmitting the full energy potential from offshore wind
farms, with reduced dependence on the onshore power grid. Placed in the ocean,
close to wind farms, Hydepoint can convert all or part of the energy into hydrogen.
This will reduce the need for upscaling the power grid both to and on land.
SUSTAINABILITY
In 2022, Vergia performed a double materiality assessment for two areas; Vergia’s
own operations and Vergia’s projects. For its own operations, Vergia will focus on
business ethics and strive to be a great place to work. For its projects, Vergia will focus
on enabling the green transition, minimising impact on nature, and creating value for
local communities.
Vergia’s GHG emissions include Scope 2 and Scope 3 emissions. Scope 2 is electric-
ity consumption in ofﬁce spaces and was 0.1 tCO
2
e in 2022. Scope 3 emissions are
from waste and business travel and was 2.8 tCO
2
e in 2022.
OUTLOOK
In 2023, Seagust will enter a bid in the ﬁrst Norwegian offshore wind licensing round.
Kilandsfoss Hydropower Plant will begin construction.
Vergia will work to meet the requirements of the EU Taxonomy.
48
49
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
NSSLGlobal
Portfolio company
Building on more than 50 years of experience in the
maritime and military mobility markets, NSSLGlobal
is a well-run company with solid results over the
last decades. With world-class technology and a
unique understanding of its clients, NSSLGlobal is
able to provide vital services in demanding situations
anywhere in the world. This provides for solid revenues
and attractive margins. Arendals Fossekompani has
been the majority owner of NSSLGlobal since 2010.
NSSLGlobal is an independent provider of cyber secure satellite and mobile commu-
nications and IT support that delivers high-quality voice and data services across the
globe, regardless of location or terrain. NSSLGlobal’s activities are divided into four
main areas: Airtime, Projects, Hardware and Service. Its main customers are within
the maritime segment, the military and government sector, large international cor-
porations and the energy sector.
Head ofﬁce
London, UK
Chair
Arild Nysæther
Chief Executive Ofﬁcer
Sally-Anne Ray
Ownership
80%
Employees
223
Countries
10
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Operating revenue
1,042
907
898
EBITDA
255
208
214
Operating proﬁt (EBIT)
209
166
162
Operating margin
20%
18%
18%
Earnings before tax (EBT)
236
178
154
Operating cash ﬂow
154
197
166
NIBD
-356
-322
-274
Equity
524
458
424
Equity ratio
57%
57%
56%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
180
83
167
Scope 2 GHG (location-based) (tCO
2
e)
120
125
134
Scope 3 GHG (tCO
2
e)
270
100
41
Energy consumption (MWh)
1,563
1,024
576
Social
Lost time injury rate
0
0
0
Sick leave
1.8%
-
-
Absentee rate
1.8%
1.0%
1.0%
Turn-over rate
24%
1.8%
13%
Women in Board of Directors
33%
50%
50%
Governance
CoC signed
100%
100%
100%
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
0%
0%
-
Training in CoC and Whistleblower policy
100%
100%
-
50
51
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
NSSLGlobal has more than 50 years of experience in the maritime and military mobility
markets. The company operates its own Global VSAT network using its own patented
Satlink Hub and Modem technology, as well as partnering with other established
satellite and mobile operators such as Inmarsat IridiumThuraya and Vodaphone and
more recently with LEO operator Starlink. Customers are supported locally via global
sales and service ofﬁces, 24/7 network operations centers, teleports and a global
network of local service partners.
NSSLGlobal is headquartered in the United Kingdom, but also has ofﬁces in Germany,
Denmark, Norway, Sweden, Poland, Netherlands, Singapore, USA, Israel, and Japan.
The revenue model is to a large degree based on multi-year subscription and sup-
port contracts, thereby securing a signiﬁcant degree of recurring revenues. Its main
customers are found in the maritime segment, in the military and government sector,
and in the energy sector.
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
NSSLGlobal reported revenues of GBP 88.0 million (76.7 million) in 2022. EBITDA
amounted to GBP 21.5 million (17.6 million). Operating proﬁt was GBP 17.7 million (14.0
million), while the ordinary proﬁt after tax was GBP 15 million (12.0 million).
Revenue growth in 2022 was largely driven by increased government airtime, equip-
ment sales and projects related to increased operational activity caused by the war
in Ukraine. In addition, expansion of maritime and government projects contributed
positively, while delays in component and hardware deliveries had a slight negative
impact on growth during the year.
Operating margin for the year of 20% (18%) was largely related to higher airtime and
project revenues with a positive margin impact.
The company experienced healthy sales throughout the year, including new VSAT
leasing orders, governmental and maritime engineering orders, as well as defense
contracts across Europe. NSSLGlobal and its team partners did not win the spe-
ciﬁc Skynet Service Delivery Wrap contract to operate and manage UK Ministry of
Defence’s (MoD) constellation of military satellites beyond 2024, but remains a sig-
niﬁcant service provider to the MoD through a number of other framework agree-
ments and recent contract wins.
Examples of contract wins during Q4 include a new multi-million 3-year Ships
Alongside contract with Defence Digital, UK Ministry of Defence, including service
management, engineering services and support for a number of UK and International
Dockyards and including installations in ships and submarines. The company was
also awarded a contract with the Bavarian State Ministry of the Interior to strengthen
the state’s critical communications infrastructure. The company secured a 3-year
contract with Mitsui OSK LNG Transport (Europe) Ltd, for their ﬂeet, including VSAT,
Entertainment and Cyber services as well as FusionIPLeo trials which will be rolled
out in the ﬁrst quarter of 2023.
NSSLGlobal’s FusionIPLeo service offers a hybrid of the best of GEO, LTE and LEO-
based satellite constellations. It combines the trusted beneﬁts of a global, high avail-
ability GEO service with the low latency and high capacity from LTE, incorporating
the rapidly expanding LEO constellations as of Q1 2023. At the core of this service
is NSSLGlobal’s Smart@Sea platform providing secure and seamless solutions to
the end user, as well as additional cyber, Crew entertainment, IT and Management
functionality.
In 2022, Scope 1 GHG emmissions were 180 tCO
2
e, related to company-owned fos-
sil-fueled cars and gas usage for stationary combustion. Emissions will decrease as
NSSLGlobal makes its ﬂeet of vehicles hybrid or fully electric over the next 2-3 years.
Scope 2 emissions was 120 tCO
2
e in 2022, a slight reduction from 125 tCO
2
e in 2021.
Scope 3 emissions consists of waste, business travel and fuel-and-energy-related
activities.
NSSLGlobal conducted an EU Taxonomy eligibility assessment and found two eligible
activities. These have not yet been assessed for alignment.
100% of the employees received training in and signed the Code of Conduct. The
sick leave remained low at 1.8%, and the turnover rate was 24%. 33% of Board of
Directors in NSSLGlobal are women.
OUTLOOK
NSSLGlobal expects 2023 revenues to be in line with 2022, driven by a solid pipeline
for sales and bid, somewhat offset by lower expected airtime. Operating proﬁt is
expected to be lower than in 2022, driven by the latter, as well as inﬂation-driven
cost increases.
A long-term goal is to reduce greenhouse gas emissions by 50% by 2035. In 2023,
NSSLGlobal will roll out phase 3 of its Energy Savings Opportunities Scheme and
the Streamlined Energy and Carbon Reporting programmes for the UK part of the
company.
NSSLGlobal will continue its oversight of key vendors to ensure legislative compli-
ance to policies and procedures. The company aims to engage locally to identify envi-
ronmental initiatives which can support local communities, and to identify certiﬁed
schemes which can offset greenhouse gas emissions.
52
53
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Volue
Portfolio company
Arendals Fossekompani created Volue in 2020
based on the belief that the world of energy would
become increasingly volatile, and that this would
require new ways of thinking, new competence, and
new technology. As a testament to this vision being
right, Volue continues to build its European presence
while expanding to other continents. As a provider of
competence and software that enable its customers
to succeed in the green transition, Volue enjoys a
proﬁtable and promising position.
Volue is a market leader in technologies and services that power the green transition.
Based on 50 years of experience, Volue provides innovative solutions, systems and
insights to industries critical to society. 750 employees work with more than 2,200
customers across energy, power grid, water and infrastructure projects that ensure a
sustainable, ﬂexible and reliable future. Volue operates within three segment, Energy,
Power Grid and Infrastructure. The company is active in 40+countries.
Head ofﬁce
Oslo, Norway
Chair
Ørjan Svanevik
Chief Executive Ofﬁcer
Trond Straume
Ownership
60%
Employees
778
Countries
9
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Operating revenue
1,217
1,041
891
EBITDA
147
138
148
Operating proﬁt (EBIT)
40
45
82
Operating margin
3%
4%
9%
Earnings before tax (EBT)
36
40
73
Operating cash ﬂow
214
131
190
NIBD
-426
-382
-432
Equity
809
767
743
Equity ratio
43%
44%
50%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
17
0
0
Scope 2 GHG (location-based) (tCO
2
e)
111
96
641
Scope 3 GHG (tCO
2
e)
404
89
112
Energy consumption (MWh)
2,040
2,078
-
Social
Lost time injury rate
0
0
-
Sick leave
2.7%
-
-
Absentee rate
2.7%
2.2%
2.0%
Turn-over rate
17%
11%
11%
Women in Board of Directors
50%
50%
12%
Governance
CoC signed
97%
89%
-
No of reported incidents/breach of CoC/SCoC
1
-
-
Operations assessed for corruption risks
100%
-
-
Training in CoC and Whistleblower policy
0%
-
-
54
55
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
Volue reported operating revenues of NOK 1,217 million (1,041 million), corresponding
to 17 percent growth year-on-year. EBITDA amounted to NOK 147 million (141 million).
The operating proﬁt was NOK 40 million (45 million), while the ordinary proﬁt before
tax was NOK 36 million (40 million).
Revenue growth was mainly driven by the Energy Segment, which increased by 28%
from NOK 595 million in 2021 to NOK 762 million in 2022. Volue`s Software-as-a-
Service (Saas) revenues grew at a higher pace than the top line, underpinning the
shift in business model. Adjusted EBITDA for the group was NOK 203 million (214
million) with an adjusted EBITDA margin of 17%.
The company is continuing to build a highly sticky customer base and yet again
reported an annual churn well below 2 percent, statistically suggesting an average
customer lifecycle of 50 years.
Annual recurring revenues reached NOK 765 million in 2022, a 15 percent growth
from 2021, while SaaS revenues showed a 28 percent growth year-on-year. Energy
Market Operations contributed with strong non-recurring revenues in 2022, driven
by unparalleled volatility in energy markets.
Volue has taken steps to integrate climate risk assessments into the company’s
risk management process. GHG emission reporting has been expanded to include
waste and electricity upstream in the Scope 3 emissions. In 2022, the Scope 3 emis-
sions were 404 tCO
2
e. Scope 1 emissions were 17 tCO
2
e, which is from 5 fossil-fuelled
company cars. Location-based Scope 2 increased to 111 tCO
2
e from 96 tCO
2
e during
2022. There is an ongoing preparation for committing to targets in line with the Paris
agreement and the 1.5 degree scenario.
Volue did an EU taxonomy assessment and found 4 eligible activities. 3 of these
activities were found to be aligned.
Turn-over rate increased from 11% in 2021 to 17% in 2022. 50 % of Volue’s Board of
Directors are women.
97% of employees have conﬁrmed that they have read and understood the Code of
Conduct. Volue is in an ongoing process to have all suppliers sign the Supplier Code
of Conduct or to provide documentation of compliance with Volue’s Code of Conduct.
In 2022, there was one reported Code of Conduct or Supplier Code of Conduct inci-
dents.
KEY DEVELOPMENTS
The year brought sales of strategic magnitude in all segments. Volue made a break-
through deal with a German power major in the Energy segment. The customer has
split its business into “Green” and “Brown” power production, and chose a cross-port-
folio platform of capabilities from Volue with the goal to digitise the entire value-chain
of its renewable portfolio. The contract was signed less than ﬁve months after the
ﬁrst point of contact, which demonstrates that Volue’s customer-base is moving
faster, and perhaps becoming less conservative. This puts Volue in pole position
for winning market-shares. After conducting a comprehensive market analysis, the
customer found Volue to be unmatched in the competitive landscape. Winning this
breakthrough contract, also brings validation to Volue’s ambitions for continental
Europe. Volue is also very excited to announce its ﬁrst customer in Japan, following
the entrance into the Japanese market during 2022.
Volue also signed a transformative deal in the Power Grid segment. To meet the
expectations of fast and efﬁcient electriﬁcation of society, Volue and a major Nordic
utility have signed a strategic contract. The joint goal is to launch a set of solutions
that will enable the utility to digitise the end-to-end process of planning and con-
structing new grids. These solutions will be modular, targeting a wider European
market, deployable across different geographical markets and regulations. By auto-
mating what is today manual work processes and enabling mobile access, the end
result is a streamlined workﬂow and high efﬁciency improvements for electrical util-
ities. This will signiﬁcantly strengthen Volue’s offering in Europe.
In the Infrastructure segment, the Construction division reached 1,000 customers
and added 100 in 2022. All of them were SaaS contracts and 30 were in Sweden.
To remain an attractive employer to a diverse pool of talents, Volue launched a diver-
sity and inclusion policy in March. A new and common standard for performance
reviews
for all employees was implemented in January.
A Volue Sustainable Leader programme was established, with 90 participating leaders
attending during the year.
Volue’s 24/7 security monitoring and response capabilities has been strengthened.
The number of employees that have signed the information security policy has
increased during the year and a common contingency plan has been implemented.
OUTLOOK
Volue continues to prioritise strategic investments in its SaaS platform and expan-
sion into new markets. This creates short- to mid-term EBITDA impact and increased
R&D capitalisation in line with plans. Measures are in place to counter margin effects,
and Volue will work diligently to improve proﬁtability going forward. The long-term
ambition of NOK 2 billion in revenues, including M&A, by 2025 is maintained. The
long-term target of 15% annual organic revenue growth is also maintained, with
2023 growth expected somewhat under the long-term target. The 2025-targets for
adjusted EBITDA margin are under review. For 2023 Volue sees adjusted EBITDA
margin improving from 2022 levels. ARR and SaaS are expected to improve in line
with 2022 performance.
For 2023, Volue has outlined the following priorities and ambitions:
•
Capitalize on changing energy market dynamics.
•
Focus on margin-improving initiatives.
•
Continue to grow ARR business in line with 2022 performance.
•
Strategic investments for international growth.
•
Structural growth through M&A.
•
Expand activities outside the Nordics.
•
Implement a diversity initiative across gender and ethnicity. The goal
is to have 25% female share by the end of 2023 and 30% by 2025.
•
Increase effort and focus on systematic HSE work, risk assessment and
reporting of occupational incidents. Volue will build a succession plan for
all key roles, with female successors for at least 50% of the roles.
•
Conduct a mapping of business partners in terms of potential
risks to human rights and decent working conditions.
•
Finalise and implement environmental policy.
•
Implement a framework to include EU Taxonomy eligibility
assessment for new business cases.
56
57
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Alytic
Portfolio company
Established by Arendals Fossekompani in 2021, Alytic
builds on the competence and methodology that grew
former AFK portfolio company Wattsight (now part
of Volue) to become a digital European powerhouse
for energy market data. The main goal for Alytic is to
grow companies to world-class businesses within their
respective industries. An investment team work closely
with the portfolio companies to drive value through
strategic development and implementation, leadership
support, sales enhancement, HR and talent acquisition,
and by leveraging data science and technology.
Alytic creates value by developing sustainable companies that centre around exper-
tise and data. There is signiﬁcant untapped opportunity in utilizing data effectively
for insights and actions across numerous industries and markets. There is a growing
demand for more advanced solutions to manage, analyse, and present information.
Head ofﬁce
Arendal, Norway
Chair
Lars Peder Fensli
Chief Executive Ofﬁcer
Espen Zachariassen
Ownership
95%
Employees
86
Countries
3
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Total revenue
41
27
2
EBITDA
-41
-12
-1
Operating proﬁt (EBIT)
-46
-16
-1
Operating margin
-112%
-58%
-66%
Earnings before tax (EBT)
-45
-16
-1
Operating cash ﬂow
-35
-12
NIBD
-45
-25
-32
Equity
132
80
59
Equity ratio
67%
74%
80%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
0
0
-
Scope 2 GHG (location-based) (tCO
2
e)
2.4
Incl. in AFK
-
Scope 3 GHG (tCO
2
e)
57
-
-
Energy consumption (MWh)
324
-
-
Social
Lost time injury rate
0
0
-
Sick leave
3.2%
-
-
Absentee rate
3.2%
0.7%
-
Turn-over rate
13%
17%
-
Women in Board of Directors
21%
50%
-
Governance
CoC signed
20%
0%
-
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
94%
-
-
Training in CoC and Whistleblower policy
20%
18%
-
58
59
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
Alytic reached three signiﬁcant milestones in 2022: The ﬁrst was to establish itself
in the ESG services vertical, which was done through the acquisition of Factlines, a
Norwegian SaaS company. The second was to develop a new, expansive strategy
for Greenfact, with further investment to position the company as a global provider
of insights in markets supporting the transition to net-zero. In line with this strategy,
Greenfact was rebranded to Veyt in the ﬁrst quarter of 2023. The third was the launch
of Edge by Kontali, a new seafood analytics portal and API offering.
During the second quarter, Alytic acquired a majority stake in Factlines AS, a
Norwegian SaaS company specializing in supply chain mapping and transparency.
Factlines’ streamlined software covers the entire process from OECD requirements
and Code of Conduct, to risk analysis, monitoring, and communication. The acqui-
sition of Factlines aligns with Alytic’s strategy and goal to create a European hub for
responsible supply chains, ESG reporting, and product life cycle assessment (LCA).
Since the acquisition, the focus has been on building a robust management team and
enhancing the product, technology, and design capabilities within the organization.
In 2022, Alytic followed up on its ambition to develop Veyt into a globally leading pro-
vider of insights and analytics for renewable energy and decarbonisation. During the
year, the company went from being a niche supplier of market analysis to positioning
itself as a globally leading expert on both renewable energy certiﬁcates markets,
the compliance carbon markets and the voluntary carbon markets. A new product
platform was developed along with a suite of analytics tools to deliver these insights
and support clients with advanced analytics and forecasts. Building on an existing
base of more than 120 international clients, Veyt is well positioned to take advantage
of the increased focus on the renewable energy sector and decarbonisation through
a line-up of new products, reports, webinars, and podcasts.
Alytic’s ﬁrst acquisition, Kontali, a premier knowledge-based consultancy and data
provider for the ﬁsh farming industry, achieved a major accomplishment in 2022.
Through extensive tech talent acquisition in 2021, Kontali doubled in size and
successfully launched its seafood insights platform, Edge, in the fourth quarter
of 2022. Edge has received positive market reception, with Kontali successfully
onboarding a growing number of new and existing clients to the platform.
Utel, an Alytic portfolio company since 2021, acquired senior machine learning engi-
neering and UX design talent to strengthen its technology team. Throughout the
year, Utel worked closely with customers to test prototypes for their new network
anomaly detection solution, building on its existing telco fraud detection solution.
The development of a more general solution opens new application areas for Utel,
with signiﬁcant growth potential expected from emerging technologies such as 5G
and an increased market need to ﬁght and prevent fraud.
Reported for the ﬁrst time ever, Scope 3 emission for 2022 were 57 tCO
2
e and related
to travel and waste. Scope 2 emissions are from the portfolio companies, and Scope 1
emissions remained at zero. An EU Taxonomy assessment has been conducted and
Alytic has identiﬁed two eligible activities. It has been concluded that these activities
are not yet aligned with the EU taxonomy.
Assessments of each portﬁlio company ’s value chain was performed in a due dili-
gence process. Alytic is continuously addressing relevant issues with the manage-
ment of the portfolio companies to ensure that all workers and contractors have
good working conditions.
21% of Alytic’s Board of Directors are women.
20% of Alytic’s employees have signed and received training in the Code of Conduct.
OUTLOOK
In 2023, Alytic’s portfolio companies are transitioning from a development phase to
a growth and commercialization phase. Throughout the year, the Alytic companies
expect to see innovative new products brought to market, creating substantial value
for customers, driving both revenue growth and stronger positions in their relevant
markets.
Alytic continues to invest in its existing portfolio and to search for new acquisition
targets.
In 2023, a sustainability strategy with associated targets will be developed for each
portfolio company.
60
61
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
Tekna
Portfolio company
Arendals Fossekompani acquired Tekna in 2013
to pursue the opportunities presented by a unique
and promising technology developed at the University
of Sherbrooke in Canada. Tekna produces plasma
systems and spherical metal powders in different alloys
and sizes, suitable for additive manufacturing and
industries such as electronics and batteries. This gives
Tekna an attractive position in global megatrends.
Tekna is a world-leading provider of advanced materials and plasma systems to
several industries. Tekna produces high-purity metal powders for applications
such as 3D printing in the aerospace, medical and automotive sectors, as well as
optimized induction plasma systems for industrial research and production. With
its unique, IP-protected plasma technology, the company is well positioned in the
growing market for advanced nanomaterials within the electronics and batteries
industries.
Head ofﬁce
Sherbrooke, Canada
Chair
Dag Teigland
Chief Executive Ofﬁcer
Luc Dionne
Ownership
71%
Employees
216
Countries
4
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Operating revenue
199
184
150
EBITDA
-124
-71
10
Operating proﬁt (EBIT)
-153
-89
-24
Operating margin
-77%
-49%
-16%
Earnings before tax (EBT)
-166
-98
-48
Operating cash ﬂow
-145
-89
2
NIBD
-40
-215
150
Equity
389
531
128
Equity ratio
72%
82%
36%
SUSTAINABILITY KPIs
2022
2021
1
2020
Environment
Scope 1 GHG (tCO
2
e)
585
577
474
Scope 2 GHG (location-based) (tCO
2
e)
34
42
3
Scope 3 GHG (tCO
2
e)
755
432
-
Energy consumption (MWh)
11,583
7,435
5,799
Social
Lost time injury rate
2.7
3.4
0
Sick leave
3%
-
-
Absentee rate
3%
2%
2.4%
Turn-over rate
22%
15%
6%
Women in Board of Directors
40%
0%
0%
Governance
CoC signed
91%
82%
99%
No of reported incidents/breach of CoC/SCoC
1
-
-
Operations assessed for corruption risks
0%
0%
-
Training in CoC and Whistleblower policy
0%
0%
-
1.
2021 numbers were revised in 2022.
62
63
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
Tekna reported revenues of CAD 26.9 million (CAD 26.8 million) in 2022. Adjusted
EBITDA amounted to CAD -12.8 million (-4.6 million). The operating proﬁt was CAD
-20.7 million (-12.5 million), while earnings before tax was CAD -22.5 million (-14.3
million).
Throughout 2022, Tekna continued experiencing rising demand for its materials for
Additive Manufacturing, further conﬁrming the company’s position in this market.
Tekna’s additive material sales grew by 8% in 2022, despite capacity constraints and
R&D work impacting the production. Signiﬁcant new orders were signed during the
year, and Tekna is experiencing a gradual shift towards larger orders and long-term
supply agreements.
Total order backlog at the end of 2022 was CAD 25.0 million. This is a 64% increase
year-on-year, which provides a strong momentum going into 2023. The backlog for
additive materials amounted to CAD 14.1 million.
On 1 July 2022, Tekna Holding was uplisted to the main list at Oslo Børs. This further
increases the company’s visibility in the marketplace and cements its position as a
global provider of advanced material solutions.
Tekna has seen the Systems market rebound with several contracts awarded during
the year. In October, an order in excess of CAD 9 million was conﬁrmed to deliver
PlasmaSonic equipment to a leading aerospace original equipment manufacturer,
with delivery planned for early 2024. In January 2023, two more plasma system sales
valued at CAD 1.6 million for delivery by end of 2023 were announced.
Tekna achieved ISO 13485:2016 certiﬁcation for its Additive Materials division in
2022. This certiﬁcation establishes that the processes Tekna uses to manufacture its
commercial powders meet the highest global standards for medical products. Tekna
Plasma Systems laboratory achieved ISO 17025:2017, which certiﬁes the analytical
services in competence of testing and calibration.
Strong demand and Tekna’s increasing market share have made capacity expansion
a key priority for the company. The additive material capacity increase program has
been progressing well throughout 2022. Increasing capacity will translate into higher
material availability, shorter delivery lead-times and increased sales, which is syn-
chronized with the customer roll-out plan.
Tekna is continuously striving to achieve a climate-friendly production. As a part
of this, Tekna completed a ﬁrst alignment study for the EU taxonomy. In addition,
Tekna have updated their system maintenance manuals to recommend green
maintenance and guidance on end-to-life disposal. A new prototype for a multi-
usage powder transportation vessel got certiﬁed for road and sea freight. After some
design optimization, operations will start in 2023.
Tekna has developed a carbon reduction action plan for more sustainable produc-
tion. To improve reporting of emissions, the baseline measurement for Scope 3
is continuing. In 2022 Tekna mapped the employee commute and deepened the
understanding of the waste category. A productivity improvement of Tekna’s plasma
systems has been implemented for greater energy conservation. Scope 1 emissions
were 585 tCO
2
e in 2022, all these emissions come from use of natural gas. Location-
based Scope 2 emissions were 34 tCO
2
e in 2022, down from 42 tCO
2
e in 2021.
Tekna appointed several new board members in 2022, increasing female represen-
tation from 0% in 2021 to 40% in 2022. Turn-over has increased from 15% in 2021
to 22% in 2022. A Tekna Code of Conduct was approved by the Board of Directors in
2022 and signed by 91% of the employees.
Tekna’s suppliers and business partners should respect human rights. To comply
with the Transparency Act, Tekna has signed a partnership with Factlines to apply
a solid and consistent approach. To handle the climate risk of supply chain, Tekna
has mapped the transport routes of critical suppliers and have assessed them for
potential risk. Mitigation plans are continuously being developed.
EVENTS AFTER THE CLOSE OF THE YEAR
In January 2023, Espen Schie was appointed Chief Financial Ofﬁcer of Tekna. Schie
brings long-term ﬁnancial management experience and comes from the role as Vice
President of Finance & Controlling at Arendals Fossekompani.
AFK reiterates its long-term support of Tekna. In the ﬁrst quarter of 2023, Arendals
Fossekompani and Tekna signed a CAD 25 million term loan facility agreement to
support operations and growth in Tekna.
OUTLOOK
Operating revenues and margins are expected to increase during 2023, supported
by the strong order backlog. Increasing production and delivery of additive materials
remain top priority to serve the Additive Manufacturing industry, which remains the
most prominent segment for Tekna. The company will prioritize near-term revenue
opportunities within additive manufacturing and microelectronics in 2023 including
the commissioning of three additional powder manufacturing systems.
Tekna has taken important and immediate steps towards improving proﬁtability and
cash position. A roadmap to proﬁtability has been drawn up, emphasizing operational
excellence, right-sizing of organisation, strict prioritisation of R&D efforts towards
AM and Microelectronics, and strategic focus on near term revenue opportunities.
Tekna’s strategy, technology and products are considered highly relevant in today’s
global markets, which are marked by geopolitical turmoil, economic uncertainty, and
an urge for sustainability and increased predictability. The company’s customers
are transitioning towards new technology, moving manufacturing closer to markets
whilst considering more sustainable production processes.
Tekna aims to reduce greenhouse gas emissions. The goal for carbon reduction is
50% for Scope 1 and Scope 2. To meet these goals, science-based targets will be
developed in accordance with the Science Based Target initiative. After the ﬁrst EU
Taxonomy alignment study was performed in 2022, formal reporting will start in
2023.
Tekna aims to increase Supplier Code of Conduct self-assessment participation by 10%.
64
65
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
ENRX
Portfolio company
Following Arendals Fossekompani’s acquisition of
IPT Technology in May 2022, IPT Technology and
long-standing portfolio company EFD Induction was
comprised in the new company ENRX. As a frontrunner
within both induction charging and induction heating
systems, ENRX is established as a global powerhouse
for induction technology, serving several large industries.
ENRX combines EFD Induction’s global market leadership in industrial induction
heating systems (Heat) with IPT Technology’s leading technology in the high growth
market for wireless induction charging solutions for mobility and industrial applications
(Charge). Among the industries served by ENRX are automotive, renewable energy,
pipe fabrication, electronics, cable, and mechanical engineering.
Head ofﬁce
Skien, Norway
Chair
Ørjan Svanevik
Chief Executive Ofﬁcer
Bjørn E. Petersen
Ownership
95%
Employees
1,047
Countries
17
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Operating revenue
1,338
1,171
1,104
EBITDA
75
143
109
Operating proﬁt (EBIT)
-3
83
41
Operating margin
0%
7%
4%
Earnings before tax (EBT)
-20
72
30
Operating cash ﬂow
46
96
69
NIBD
425
31
52
Equity
384
405
374
Equity ratio
22%
36%
35%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
766
898
-
Scope 2 GHG (location-based) (tCO
2
e)
2,162
2,557
-
Scope 3 GHG (tCO
2
e)
1,820
1,643
-
Energy consumption (MWh)
9,428
11,008
-
Social
Lost time injury rate
1.1
2.3
-
Sick leave
3.5%
-
-
Absentee rate
3.5%
2.8%
2%
Turn-over rate
13%
2.2%
11%
Women in Board of Directors
17%
0%
0%
Governance
CoC signed
65%
100%
-
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
0%
-
-
Training in CoC and Whistleblower policy
78%
-
-
66
67
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
2022 IN BRIEF
(Figures in parentheses refer to the same period the previous year)
ENRX reported revenues of EUR 132.2 million (115.2 million) in 2022. EBITDA
amounted to EUR 7.4 million (14.1 million). The operating proﬁt was EUR -0.3 million
(8.2 million), while the ordinary 2022 proﬁt before tax was EUR -2.0 million (7.1 million).
Revenue growth of 15% during 2022 was driven by higher activity level within Heat,
as well as a smaller revenue contribution from the Charge division following the
acquisition of IPT Technology in May 2022. In geographical terms, the company saw
solid growth in all regions during 2022. The growth was in some regions hampered
by supply chain disturbances and delayed deliveries.
Operating costs saw an uptick during the year, primarily related to the recognition of
a restructuring provision of EUR 3.9 million related to parts of the German operation,
component cost increase, and general cost inﬂation. In addition, costs related to M&A
and ERP implementation impacted the cost level in 2022. IPT Technology, acquired
during the year, had a negative EBIT contribution of EUR 2.2 million. Adjusted for
restructuring costs related to the German operation and one-time costs related to
the acquisition of IPT Technology, operating proﬁt for the full year 2022 was EUR 4.1
million, corresponding to an EBIT margin 3.1%.
Overall, the Heat segment did well across all activity areas. The order intake for
induction power sources reached an all-time high of EUR 70.1 million, up 52% from
2021. The service and after sales segment reached EUR 51.4 million in order intake,
while the sale of induction hardening machines ended up slightly below budget at
EUR 35.2 million, due to difﬁcult market conditions in the EU and North America,
partly offset by strong demand from Asia.
Despite the acquisition of IPT Technology in 2022, Scope 1 greenhouse gas emissions
for the ENRX group was 766 tCO
2
e, down from 898 tCO
2
the year before. Scope 2
emissions were 2,162 tCO
2
e in 2022, down from 2,557 in 2021. Scope 3 emissions
were from business travel, waste, and fuel-and-energy-related activities and was
1,820 tCO
2
e in 2022.
Through an EU taxonomy assessment, three activities were identiﬁed as eligible,
where two of these were concluded to not yet be aligned, and one was not assessed
for alignment.
To achieve a more resource efﬁcient production, Evolgy is undergoing an ISO 14001
certiﬁcation process for all plants. During 2022, such certiﬁcations were given to the
ENRX plants in Germany, India and China.
Moving closer to its target of 20% female employees in 2025, ENRX Heat increased
the ratio from 15.5% in 2021 to 16.1% in 2022, but with the acquisition of IPT
Technology, the overall female ratio was still at 15.5%. With a continuous focus on
HSE and a vision of zero injuries across all operations, ENRX had 2 injuries in 2022,
down from 4 in 2021.
In 2022, all prioritized suppliers in Norway and India completed a self-assessment
used by ENRX to evaluate supplier performance. A similar self-assessment is under-
way in China, Germany, and the US.
OUTLOOK
Order intake held up well throughout the year. Already in October, the Heat segment
passed the full year’s order intake budget. 2022 ended nearly 30% ahead of target,
at an all-time high of EUR 157 million. The current order backlog creates a strong fun-
dament for continued proﬁtable growth in 2023, and the market for heating products
is still considered strong.
Electriﬁcation is likely to experience tremendous growth over the next decade. The
global trend is a shift from gas and ﬂame heating to more energy-efﬁcient and eco-
friendly alternatives, such as induction heating. To remain at the forefront of induc-
tion technology, ENRX continues its R&D efforts. In the second quarter of 2023, the
company will launch a small mobile air-cooled induction heating generator that can
be used virtually everywhere electricity is found.
For several years, ENRX has been the leading supplier of equipment to the renew-
able power sector. The company aims to contribute to the development of electric
vehicles. The acquisition of IPT Technology opens a growing and potentially large
market within wireless charging solutions, which is expected to generate long-term
revenue and cost synergies to further improve the company’s operational leverage.
Both revenue and operating proﬁt is expected to be higher in 2023 than in 2022.
ENRX is committed to reducing its CO
2
footprint and plans to introduce more digital
solutions that advance remote assistance and reduce the need for travel. Induction
technology is inherently eco-friendly, and ENRX constantly strives to make prod-
ucts even more energy efﬁcient. The ISO 14001 certiﬁcation of production facilities
continues in 2023. Going forward, ENRX will further expand its portfolio by providing
sustainable alternatives for charging electric vehicles as well as power supply solu-
tions for industrial applications.
Being part of a major global industry, ENRX must demonstrate a sustainable supply
chain. ENRX demands from its suppliers in Europe, North America and Asia that they
complete a self-assessment questionnaire and sign off on ENRX’s Supplier Code of
Conduct. For 2023, the goal is to complete this assessment for the remaining pro-
duction facilities.
On route to increasing its ratio of female workforce to 20% by 2025, ENRX’s target
for 2023 is 18%. ENRX aims to train 83% of the workforce in Code of Conduct in 2023.
68
69
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
AFK Property
Portfolio Company
AFK Property comprises all property related companies
and property investments in Arendals Fossekompani.
Head ofﬁce
Arendal, Norway
Chair
Torkil Mogstad
Chief Executive Ofﬁcer
Tom Krusche Pedersen
Ownership
100%
Employees
2
Countries
1
FINANCIAL FIGURES (MNOK)
2022
2021
2020
Total revenue
35
510
10
EBITDA
6
40
-2
Operating proﬁt (EBIT)
-7
27
-11
Operating margin
-19%
5%
-106%
Earnings before tax (EBT)
-10
25
-13
Operating cash ﬂow
-40
309
-200
NIBD
135
68
355
Equity
206
215
198
Equity ratio
47%
46%
31%
SUSTAINABILITY KPIs
2022
2021
2020
Environment
Scope 1 GHG (tCO
2
e)
20
-
3
Scope 2 GHG (location-based) (tCO
2
e)
1.5
-
-
Scope 3 GHG (tCO
2
e)
7.3
34
26
Energy consumption (MWh)
295
-
-
Social
Lost time injury rate
0
0
-
Sick leave
3.8%
-
-
Absentee rate
3.8%
-
-
Turn-over rate
0%
-
-
Women in Board of Directors
0%
0%
0%
Governance
CoC signed
100%
0%
-
No of reported incidents/breach of CoC/SCoC
0
-
-
Operations assessed for corruption risks
100%
-
-
Training in CoC and Whistleblower policy
100%
-
-
The portfolio of AFK Property is diverse. It includes the development of a new urban
residential area in Arendal, featuring an outdoor recreational space and a public
water park – and the management of several properties in Southern Norway.
70
71
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
BRYGGEBYEN
The by far largest company in the property portfolio is Vindholmen Eiendom AS,
which is transforming an old shipyard area into a new urban residential/commercial
zone right outside the center of Arendal City under the name Bryggebyen. The trans-
formation will take 10-15 years to complete and will create 500-700 residential units
in combination with exciting and highly relevant trade and commerce offerings. The
ﬁrst and second stage of the development was concluded in 2021 and all 113 apart-
ments were sold before year-end 2021. Not only was this the largest residential proj-
ect in the region that year, but it also had the quickest sell-out time, demonstrating
the attractiveness of the Bryggebyen area. To satisfy the market’s desire to be part
of Bryggebyen, Arendals Fossekompani made the decision to initiate phase 3 of the
Bryggebyen project, adding 48 new apartments. These went on sale in the second
quarter of 2022, of which 41 were sold as at 31 December 2022. AFK also plans to
build an indoor water park in the area. The municipality of Arendal has signed a long-
term rental agreement with the water park.
ARENDAL AIRPORT & PROPERTY GULLKNAPP
AFK Property is the majority owner of this property which comprises a relatively new
airport facility and an attractive area of 200,000 sqm. The main user of the airport
facility is OSM Aviation Academy which runs a pilot school at the premises. Future
plans include developing the airport facility into a center for drones as well as a hub
for electriﬁed aviation under the name Gullknapp Aerial Center. The signiﬁcant size of
the area combined with direct access to the high voltage grid has made the property
attractive for industrial players, including those drawn to Arendal in connection with
Morrow Batteries’ plan for establishing a giga-factory for battery cell production.
Gullknapp is located about 15 km north of Arendal and therefore in close vicinity to
both the new E18 highway and the Port of Arendal. Having its own airport facility is of
course also an advantage. Real estate areas for industrial use are becoming scarce
around Arendal, and Gullknapp is highly relevant for power and transportation inten-
sive industries such as battery-related production of cells, electrodes and electrode
materials, as well as hydrogen and ammonia production to support the transition
into a sustainable future.
BØLEVEGEN 4
This property, located along the Skien River, just one kilometer south of downtown
Skien, was acquired in 2020. The 4,700 sqm building is fully let to ENRX on a 15-year
bare-house agreement. As the city of Skien expands, this 12,000 sqm river property
will be attractive both for commercial and residential development.
LONGUM PROPERTY
In the second quarter, AFK Property acquired 170,000 sqm of mostly commercial
land located outside the city of Arendal. The property is close to the E18 highway on
route to the main production site of the coming Morrow battery factory. The land is
also in the vicinity of Bedriftsveien 17, which is also in the portfolio of AFK property.
BEDRIFTSVEIEN 17
The commercial property Bedriftsveien 17 has been part of Arendals Fossekompani
since 2015. The 3,500 sqm building has been completely refurbished and is now fully
let to Volue Industrial IoT on a 25-year bare-house agreement. Bedriftsveien 17 is
located in the middle of the emerging commercial area Krøgenes, 3 kilometers east
of down-town Arendal. The area has grown in attractiveness with a new feed-in road
to the new E18 highway recently completed.
SUSTAINABILITY
AFK Property is reporting Scope 1 emissions of 20 tCO
2
e for 2022. These emissions
are all at Gullknapp and is from fossil-fuelled cars and chemical de-icing. Scope 2
emissions was 1.5 tCO
2
e and Scope 3 emissions was 7.3 tCO
2
e in 2022.
AFK Property conducts annual environmental audits. For the largest project
Bryggebyen, there is a focus on reducing carbon emissions and increasing waste
management during the construction phase. At Gullknapp, AFK Property monitors
chemical oxygen demand and noise levels. The chemical oxygen demand is well
below the 10 tonnes limit, and noise levels are satisfactory.
In 2023, AFK Property will continue work with suppliers throughout the value chain
to secure basic human rights and safety and health of people. An updated Business
Code of Conduct will be sent out as a part of the supplier contract.
OUTLOOK
In 2023, AFK Property will proceed with the building of 48 units in the Bryggebyen
apartment project. All units are scheduled to be ﬁnalized in 2024. Regulation of the
fourth stage of the Bryggebyen project will be initiated during the year. AFK Property
will also proceed with the regulation process for Longum Næringspark, in addition
to building a 2,500 square meter facility for ENRX.
72
73
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
PORTFOLIO
ANNUAL AND SUSTAINABILITY REPORT
From the
Boardroom
03
Board of Directors
76
Board of Directors Report
78
Corporate Governance Report
84
75
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
Board of
Directors
Trond Ødegård
Westlie
Director of Board
Trond Westlie (1961) has held
the position as Chairman
of the Board of Directors
of Arendals Fossekompani
ASA since May 2022. He is
an experienced executive
and Chief Financial Ofﬁcer
for large international public
corporations. Westlie brings
a broad understanding of the
ﬁnancial markets and years
of relevant board experience.
Westlie is a Certiﬁed Public
Accountant, holding a degree
from the Norwegian School
of Economics.
Independent of
Executive Management
Current Board positions:
Wilh. Wilhelmsen Holding
ASA, Shama AS, Vergia AS
Board meetings
attended in 2022: 5
Anne Grethe
Dalane
Board Member
Anne Grethe Dalane (1960)
has been a member of
the Board of Directors of
Arendals Fossekompani ASA
since May 2022. She brings
extensive leadership expe-
rience from Yara and Hydro
and is a long-standing board
member of several interna-
tional companies. Dalane
holds a master’s degree
from the Norwegian School
of Economics.
Independent of
Executive Management
Current Board positions:
BW LPG, PGS
Board meetings
attended in 2022: 5
Morten
Bergesen
Board Member
Morten Bergesen (1974) has
been a member of the Board
of Directors of Arendals
Fossekompani ASA since May
2004. He is an experienced
chairperson with a demon-
strated history of working in
a broad range of industries,
serving both Norwegian and
international companies.
Bergesen holds a master’s
degree in economics from BI
Norwegian Business School.
Independent of
Executive Management
Current Board positions:
IFM AG, Aksjefonn AS,
Klynge AS, Bergehus Holding
AS, Breifonn AS, THF AS
Board meetings
attended in 2022: 10
Stine Rolstad
Brenna
Board Member
Stine Rolstad Brenna (1965)
has been a member of
the Board
of Directors of
Arendals Fossekompani ASA
since September 2020. She is
an experienced CFO, investor
and board professional,
serving both Norwegian and
international companies.
Brenna holds a master’s
degree in corporate ﬁnance,
international business and
strategy from BI Norwegian
Business School.
Independent of
Executive Management
Current Board positions:
Lyse AS, Theion GmBH,
Rabbalshede Kraft AB,
Sporveien AS, Lørenskog
kommunale pensjonskasse
Board meetings
attended in 2022: 9
Lise
Lindbäck
Board Member
Lise Lindbäck (1970) has
been a member of the Board
of Directors of Arendals
Fossekompani ASA since
May 2022. She brings exten-
sive and broad experience
from ﬁnancial markets, with
a proven ability to manage
high performing teams in an
international environment.
Lindbäck holds a master’s
degree in economics and
business administration
from the Norwegian School
of Economics.
Independent of
Executive Management
Current Board positions:
Alpha Corporate Finance AS,
SEWA Grih Rin Ltd.,
SubK Impact Solutions Ltd.
Board meetings
attended in 2022: 5
Didrik
Vigsnæs
Board Member
Didrik Vigsnæs (1966) has
been a member of the Board
of Directors of Arendals
Fossekompani ASA since
May 2016. He brings decades
of experience as CEO of
investment companies,
and he is a seasoned board
professional serving a wide
range of companies. Vigsnæs
holds a bachelor’s degree in
business administration from
the University of Bradford
School of Management.
Independent of
Executive Management
Current Board positions:
Dima AS, Zone Security AS,
Vicama Capital AS, Malling
& Co Vekst AS, Oseberget
Eiendom AS
Board meetings
attended in 2022: 10
Christian
Must
Board Member
Christian Must (1973) has
been a member of the Board
of Directors of Arendals
Fossekompani ASA since
May 2021. He brings exten-
sive business development
experience across industry
verticals and has served as
a board professional for a
wide range of companies.
Must holds a master’s degree
in industrial economics
and technology manage-
ment from the Norwegian
University of Science and
Technology and AFA from
the Norwegian School of
Economics.
Independent of
Executive Management
Current Board positions:
DN Media Group, Cenate,
Must AS, Vedeld AS
Board meetings
attended in 2022: 10
76
77
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
With more than a century of industrial history, we continue to develop our companies
in a sustainable and long-term perspective. Our ambition is to utilize our compe-
tencies to build world-leading positions in industries driven by global megatrends.
We do this by taking the long term view on objectives, but relentlessly working to
improve our performance in our day to day efforts. Long term perspective requires
urgent patience.
Our ambition is to build the Arendals Fossekompani even stronger, to serve as the
best owner of our portfolio companies. This implies developing the portfolio based
on industry experience and understanding, ﬁnancial competence and strength, and
by identifying synergies in the portfolio.
Today, Arendals Fossekompani has an attractive portfolio positioned in verti-
cals driven by global megatrends, such as Green Energy, Digitalisation & Big Data
Analytics, and Electriﬁcation & Materials. Our companies are both listed and privately
own, and Arendals Fossekompani is – as part of our strategy – the majority owner.
In recent years, Arendals Fossekompani has been responsible for the creation of
Volue, ENRX, Alytic, Ampwell and Vergia – all serving as examples of overall strategic
decisions to further value-creation. For details on the 2022 performance of our port-
folio companies and the AFK Group, please see chapter 1 and 2 of this report.
Arendal is our hometown. We remain committed to contributing to the development
of this great city and its people.
REVIEW OF THE ANNUAL FINANCIAL STATEMENTS
In the opinion of the Board of Directors, the annual ﬁnancial statements provide a
true and fair view of the company’s and the group’s position at the end of the year.
There are no material uncertainties associated with the annual ﬁnancial statements,
and there are no other extraordinary circumstances that have affected the ﬁnancial
statements. The Board of Directors conﬁrms that the accounts have been prepared
based on the assumption that AFK is a going concern, and that this assumption con-
tinues to apply.
BOARD OF DIRECTORS
At the Annual General Meeting in May 2022, Didrik Vigsnæs and Stine Rolstad
Brenna were re-elected as board members for a term of one year. Trond Westlie, Lise
Lindbäck, and Anne Grethe Dalane were elected to the Board for a term of one year.
PERSONNEL, EQUAL OPPORTUNITY, WORKING
ENVIRONMENT AND THE NATURAL ENVIRONMENT
At the end of the year, Arendals Fossekompani Parent Company had 36 employees,
of which 9 were women. The employment situation is marked by long-term relation-
ships and stability. The company aims to improve the balance between the genders.
The Board currently consists of three women and four men. The working environ-
ment at AFK is considered good. The Parent Company has a separate committee for
dealing with issues related to health, environment, and safety. There are representa-
tives for employees and corporate management on the committee.
The average pay for men and women varies due to differences in job categories and
seniority. A full disclosure of the guidelines for remuneration of the executive leader-
ship team can be found in the separate Remuneration Report.
Sick leave in the Parent Company amounted to 244 days (non-work related), which
corresponds to 3.3 percent of the total working hours. There were no accidents or
personal injuries of signiﬁcance in 2022, nor any signiﬁcant material damage.
•
Sick leave at Volue was 2.7% (2.2%) in 2022. There was
a total of 4,484 days of absence due to illness.
Board of
Directors’ Report
A long-term approach in times of volatility
In times marked by a war in Europe, supply-chain
disturbances in the aftermath of the pandemic,
increased inﬂation, and – in general; global volatility,
Arendals Fossekompani remains true to its core values:
Collaborative, Long-term, Dynamic, and Responsible.
78
79
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
•
Sick leave at Tekna was 2.6% (2.0%) in 2022. There was
a total of 1,221 days of absence due to illness.
•
Sick leave at NSSLGlobal was 1.8% (1.0%) in 2022. There was
a total of 1,192 days of absence due to illness.
•
Sick leave at ENRX was 3.5% (2.8%) in 2022. The company
recorded a total of 8,318 days of absence due to illness.
•
Sick leave at Ampwell was 6.4% in 2022. The company
recorded a total of 587 days of absence due to illness.
•
Sick leave at Alytic was 3.2% in 2022. There was
a total of 456 days of absence due to illness.
•
Sick leave at Vergia was 0.8% in 2022. The company
recorded a total of 2 days of absence due to illness.
•
Sick leave at AFK Property was 3.8% in 2022. The company
recorded a total of 15 days of absence due to illness.
Arendals Fossekompani’s portfolio companies have health, environment and safety
committees and other collaborative bodies in accordance with national legislation.
The Parent Company’s operations have only limited negative impact on the natural
environment in the form of emissions to water and air. The Parent Company has con-
ducted materiality analyses to ﬁnd material risks and opportunities for the company
related to environment, governance, and social issues.
The main positive contributions from the Parent Company are seen in the strategy
for responsible investment and in being an active and demanding owner of its port-
folio companies. The Parent Company also makes a positive environmental contri-
bution through the production of renewable hydro power.
Operations in AFK’s portfolio companies entail little risk of pollution of the natural
environment. All portfolio companies have conducted materiality analyses and cli-
mate risk analyses to manage and measure this risk. To the extent that these analy-
ses show that such risks exist, measures have been implemented in accordance with
national legislation and guidelines to prevent any negative environmental impact.
The company is aligned with the greenhouse gas emission reduction goals for 2030,
as described in the Paris Agreement.
EFFORTS TO PROMOTE THE PURPOSE OF
THE ANTI-DISCRIMINATION AND ACCESSIBILITY ACT
It is important for Arendals Fossekompani to promote equality in all areas and to pre-
vent discrimination based on ethnicity, religion, or disability. The Parent Company has
evaluated, examined risks, analyzed causes, and will implement measures according
to the activity and reporting obligations in The Equality and Anti-discrimination Act.
A separate report on Human Rights and Transparancy Act published and also avail-
able on the AFK website. In addition, Arendals Fossekompani has submitted near-
term company-wide emissions reduction targets in line with the Science Based
Targets initiative.
RESEARCH AND DEVELOPMENT
Capitalised and expensed research and development costs in AFK’s businesses
totaled NOK 261 million (194 million) in 2022.
ETHICS AND SOCIAL RESPONSIBILITY
A report in accordance with Section 3.3 of the Norwegian Accounting Act regarding
corporate social responsibility is included in Chapter 4. This part of the annual report
is also available on the company’s website.
Chapter 4 elaborates on Arendals Fossekompani’s efforts and guidelines in the areas
of environment, social issues, and governance. KPIs and targets for improvements
are aligned across the portfolio.
We set high ethical standards, and communication with the outside world is to be
open, clear, and honest. The company is responsible for ensuring safe and good
workplaces in the local communities where it is present. We seek to create value for
society, customers, employees, and owners. For many years, Arendals Fossekompani
Parent Company has based its activities on the utilization of a local natural resource,
and therefore particularly wishes to contribute to value creation and social devel-
opment in the Arendal region. The same applies to our portfolio companies in their
local communities. We support Arendalsuka, an annual national politics and business
event, and the Canal Street music festival, in addition to various initiatives within
sports and culture.
IFRS
Arendals Fossekompani has prepared the financial statements for the Parent
Company and the Group in accordance with the principles in the International
Financial Reporting Standards (IFRS) as adopted by the European Union.
THE AFK SHARE
There are a total of 55,995,250 shares in the company. As at 31 December 2022
a total of 1,118,319 were treasury shares, which represents 2.0 percent of the total
number of outstanding shares. The share price on 31 December 2021 was NOK 445
and on 31 December 2022 NOK 250.5. The company had 4,999 shareholders at year-
end. The Board of Directors will propose that the Annual General Meeting renew the
Board’s authorization to purchase treasury shares within a total framework of 10
percent of the shares and within a price range of NOK 10-2000.
LIABILITY INSURANCE
Arendals Fossekompani holds a Directors’ and Ofﬁcers’ Liability Insurance with
world-wide coverage.
FINANCIAL POSITION
The Parent Company’s and Group’s ﬁnancial standing is good. The Board of Directors
assumes that the assets of the Parent Company and Group provide a good founda-
tion for future growth.
RISKS AND FACTORS OF UNCERTAINTY
Arendals Fossekompani is exposed to credit risk, market risk and liquidity risk. These
matters are described in detail in Note 16 to the annual ﬁnancial statements for 2022.
The ongoing war in Ukraine continues to pose supply chain risks and disruptions on
the energy markets. The company has taken strong measures to ensure embargo
compliance across the value chain.
DIVIDENDS AND ALLOCATION OF NET PROFIT FOR THE YEAR
Arendals Fossekompani announces dividends on a quarterly basis. The Board of
Directors approves the quarterly dividends based on an authorization from the
General Meeting. When deciding the quarterly dividends, the Board of Directors
takes into consideration expected cash ﬂow, capital expenditure plans, ﬁnanc-
ing requirements and appropriate ﬁnancial ﬂexibility. In 2022, AFK paid dividends
amounting to NOK 409 million. AFK’s net proﬁt for 2022 amounted to NOK -33 mil-
lion. The Board of Directors proposes that the net proﬁt is transferred to other equity.
80
81
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
OUTLOOK
2023 revenues for AFK Group are expected to be on par with 2022, driven by
high activity levels in all portfolio companies and their position within attractive
megatrends, offset by lower estimated power prices. Operating proﬁt is expected
to be lower than 2022 due to reduced earnings from AFK Hydropower because of
lower estimated price trend. Note that there is uncertainty associated with the war in
Ukraine, supply chain constraints, soaring inﬂation, rising interest rates, the develop-
ment of energy prices, and tax regulations for the Norwegian hydropower industry.
AFK HYDROPOWER
In light of the market’s estimated power price trend for 2023, revenues and operating
proﬁt for AFK Hydropower are expected to be lower than in 2022. Net cash generated
from hydropower production will also be impacted by the increase in resource rent
tax from 37% to 45% (effective as of 1 January 2022), as well as ‘high-price contribu-
tion’ tax on monthly average realized electricity prices in excess of NOK 0.70 per kWh
(effective as of 28 September 2022). These taxes were presented by the Norwegian
government on 28 September 2022. Actual energy prices depend on many factors,
including hydrological balance, oil and gas prices, weather conditions, temperatures
and more. With limited reservoir capacity, the production volume will also be depen-
dent on precipitation.
VOLUE
Volue revenues are expected to be on par with 2022, while operating proﬁt for 2023
is expected to be higher than in 2022.
TEKNA
Tekna expects 2023 revenues and operating proﬁt to be higher than in 2022.
NSSLGLOBAL
NSSLGlobal expects 2023 revenues to be in line with 2022, while operating proﬁt is
expected to be lower than in 2022.
ENRX
ENRX expects 2023 revenues and operating proﬁt to be higher than in 2022.
AMPWELL
Ampwell expects to generate continued revenue growth throughout 2023. EBIT is
expected to improve but remain negative for 2023.
The Board of Directors emphasizes that signiﬁcant uncertainty is associated with
assessments of future circumstances.
EVENTS AFTER THE CLOSING OF 2022
On 16 December, it was announced that Ørjan Svanevik was to resign as CEO of
Arendals Fossekompani, and CFO Lars Peder Fensli would function as interim CEO
as of 1 January 2023 until a new CEO was appointed and operational. On 10 January
2023, it was announced that Benjamin Golding was appointed new CEO. Golding will
assume his position at Arendals Fossekompani as soon as his job in DNB comes to
an end but no later than 1 August 2023.
Froland, 11 April 2023
Trond Westlie,
Chairman
Stine Rolstad Brenna,
Board Member
Lise Lindbäck,
Board Member
Morten Bergesen,
Board Member
Didrik Vigsnæs,
Board Member
Anne Grethe Dalane,
Board Member
Lars Peder Fensli,
Acting CEO and CFO
Christian Must,
Board Member
82
83
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
Being listed on the stock exchange Oslo Børs, Arendals
Fossekompani is subject to reporting requirements for
corporate governance under the Accounting Act section
3-3b, Norwegian securities trading legislation, and the Oslo
Stock Exchange continuing obligations of listed companies.
CORPORATE GUIDELINES
The following guidelines form the basis for corporate governance at Arendals
Fossekompani:
•
Arendals Fossekompani shall communicate relevant information
honestly and openly to the public about our activities and any
circumstances related to corporate governance.
•
The Board of Directors at Arendals Fossekompani shall
be autonomous and independent of group management.
•
Emphasis shall be placed on avoiding conﬂicts of interest between
shareholders, board members and executive management.
•
The tasks and functions of the Board and group management
at Arendals Fossekompani shall be distinct and clearly deﬁned.
•
All shareholders shall be treated equally.
NORWEGIAN CODE OF PRACTICE
Each element of the Norwegian Code of Practice for Corporate Governance, last
revised on 14 October 2021, is addressed below. A total review and amendment of
this corporate governance report was performed by the Board of Directors in 2023,
following the changes made in the company since the last corporate governance
report of 30 March 2022. A description is given of Arendals Fossekompani’s com-
pliance with, and deviations from, the Code of Practice. A complete overview of the
Code of Practice and ofﬁcial remarks by the Oslo Stock Exchange are available online
at www.nues.no.
1. CORPORATE GOVERNANCE REPORT
Arendals Fossekompani has prepared a separate corporate governance policy, and
the Board has decided to implement the Norwegian Code of Practice for Corporate
Governance.
We have implemented further instructions for corporate governance, including rules
of procedure for the Board of Directors of February 2022, rules of procedure for the
CEO of February 2022, instructions for the Audit Committee of May 2021, instruc-
tions for the Renumeration Committee, insider instructions, and a policy on disclo-
sure of information.
Our Code of Conduct reﬂects our commitment to ethical business conduct and
addresses topics such as anti-corruption, equality and anti-discrimination, and
sustainability. The Code of Conduct is subject to regular review and the latest ver-
sion was adopted by the Board of Directors on 9 February 2023. Our expectations
and guidelines towards suppliers and business partners are set out in the Business
Partner Code of Conduct as approved by the Board of Directors.
2. BUSINESS ACTIVITIES
The object of Arendals Fossekompani is, through in-house production, participation
in new infrastructure, purchase, or leasing, to make use of or sell electricity, as well
as to participate, directly or indirectly, in other industrial activities or business enter-
prises, including investing in real estate.
These objectives are expressly stated in Section 1 of our Articles of Association. The
Articles of Association are available on our website: www.arendalsfossekompani.no.
Arendals Fossekompani has signiﬁcant ﬁnancial capacity. Our investment portfolio
will, at all times, consist partly of long-term and active ownership commitments, and
partly of liquid ﬁnancial assets. Liquidity will be managed mainly via listed shares
Corporate
Governance
Report
84
85
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
and bonds. The bulk of our share portfolio will consist of a limited number of major
investments. Our investment strategy is based on our belief that active, long-term
and responsible ownership provides the best return for the risk involved.
Further descriptions of targets, strategies, risk proﬁle and the objective of creating
long-term value for shareholders in a sustainable way, is described elsewhere in the
Annual Report, also available at www.arendalsfossekompani.no/en/investor-rela-
tions.
Our targets, strategies and risk proﬁle are reviewed annually. Sustainability is reg-
ularly on the Board’s agenda. Every year a materiality analysis of topics relevant for
environmental, social issues and governance is presented to the Board of Directors.
In Arendals Fossekompani, we integrate considerations related to our broader
stakeholders into our business and value creation for our shareholders through our
sustainability framework and reporting. Our objectives, principal strategies and
stakeholder engagement are further described elsewhere in the Annual Report, and
on our website www.arendalsfossekompani.no.
In Arendals Fossekompani, we have a clear focus on our corporate responsibility for
environmental and social conditions, including work environment, diversity, equality,
non-discrimination, human rights and work against corruption and bribery. We are
committed to contributing to the UN Sustainable Development Goals, and our work
with diversity and equality is further described in the separate chapter Diversity and
Equality in the Annual Report. Further details and descriptions on our work on these
matters can be found in the Annual report, and on our website.
3. EQUITY AND DIVIDENDS
Equity
The book value of the Group’s equity as at 31 December 2022 was MNOK 3,950
which amounted to 49 % of total assets. Market value is signiﬁcantly higher, and the
company has a solid ﬁnancial foundation. The Board constantly assesses the com-
pany’s ﬁnancial capacity in light of our objectives, strategy and risk proﬁle.
Dividend policy
It is Arendals Fossekompani’s policy to pay a dividend that reﬂects our long-term
strategy, ﬁnancial position and investment capacity. The annual dividend shall, over
time, ensure that shareholders receive a competitive return on their investment.
Since Q2 2020, we have announced our dividends on a quarterly basis. The Board
approves the quarterly dividends based on an authorization from the General
Meeting. When deciding the quarterly dividends, the Board takes into consideration
expected cash ﬂow, capital expenditure plans, ﬁnancing requirements and appropri-
ate ﬁnancial ﬂexibility. The Board believes that quarterly dividend payments provide
a ﬂexibility that beneﬁts both the company and its shareholders.
From 1 July 2013, the Annual General Meeting has the opportunity to authorize
the Board of Directors to distribute dividends on the basis of the approved annual
accounts. Proposals for such authorization should be justiﬁed. In order to ensure
ﬂexibility and efﬁciency in the implementation of quarterly dividend payments, the
Board proposes that the Annual General Meeting in 2023 continues to authorize the
Board to pay dividends, limited in time to the Annual General Meeting in 2024.
Capital increase
No authorization to undertake a share issue has been granted to the Board. The most
recent capital increase occurred in 2012, when the share capital was raised by NOK
201,582,900 to NOK 223,981,000 through a transfer from other funds.
Purchase of treasury shares
The General Meeting can authorize the Board to purchase up to 10% of the com-
pany’s own shares. At the Annual General Meeting on 5 May 2022, the Board was
authorized to purchase treasury shares up to a maximum of 7.93 percent of the
total number of shares. The terms of the authorization permit the Board to acquire
treasury shares only between a minimum price of NOK 10 and a maximum price of
NOK 2,000 per share. This authorization will remain in effect until the Annual General
Meeting in 2023.
As at 31 December 2022, the Group owned a total of 1,118,319 shares, corresponding
to 2.0% of all the outstanding shares in the company. These shares are freely nego-
tiable.
4. EQUAL TREATMENT OF SHAREHOLDERS
AND TRANSACTIONS WITH RELATED PARTIES
Share class
The Group’s shares consist exclusively of A-shares. According to Section 11 of our
Articles of Association, no shareholder may personally or by proxy vote for more than
one quarter of the total number of shares. Shares transferred to new owners do not
confer voting rights until the transfer has been approved by the Board. All shares
have equal rights.
Transactions involving treasury shares
The Board may exercise its authority to acquire treasury shares as long as the shares
are acquired at the market price. Correspondingly, the divestment of acquired shares
will also be undertaken at market price yet so that the shares can be discounted if the
shares are used in connection with programs for employees and board members. At
the same time, the authorization gives the Board the ﬂexibility to utilize the mecha-
nisms that the Public Limited Liability Companies Act gives access to in situations
where the acquisition or disposal of shares is considered advantageous to the com-
pany and the company’s shareholders, including for use in share purchase programs
for directors and employees of the company.
Transactions with related parties
No transactions have occurred between the company and shareholders, board
members, senior executives or their related parties in 2022 that could be described
as not immaterial transactions. In 2022, 51806 shares were sold from the company
to senior executives and board members, in accordance with the approved share
purchase program. See Note 4.1 of the 2022 Annual Report.
Guidelines for board members and senior executives
If a board member or senior executive has a material direct or indirect interest in an
agreement that is being entered into by the company, that person must disclose
the fact before the matter is put to the Board, and he or she may not participate in
discussions or votes on that matter.
5. FREELY NEGOTIABLE SHARES
Under current Norwegian legislation on industrial licensing, a shareholder who
acquires more than 20% of the total number of shares in the company must apply
for a license. The law requires the Board’s approval for such acquisitions. A number of
other provisions of the Waterfall Rights Act could cause the acquisition of the com-
pany’s shares to have consequences for both the company itself and other share-
holders. Therefore, the company has found it necessary to reserve the right to refuse
approval of share acquisitions. According to Section 7 of the Articles of Association,
any acquisition by means of transfer is conditional on the Board’s consent. Consent
may be refused only on reasonable grounds.
86
87
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
Deviations from the Code:
The Articles of Association hold that transfer of shares is
conditional on the Board’s consent.
6. GENERAL MEETING
Notiﬁcation
The Annual General Meeting is held as early as practically possible after the close
of the previous ﬁnancial year, usually in April or May. Meeting notices and atten-
dance registration forms are sent to all shareholders no later than 21 days prior to the
General Meeting through digital communication, or through regular mail to share-
holders with a known address who do not consent to digital communication.
Documents are also made available on our website www.arendalsfossekomani.no
and through the Oslo Stock Exchange distribution service. The annual report and
other enclosures to the General Meeting notice are made available solely via the
website and the Oslo Stock Exchange distribution service. Shareholders who wish
to receive the enclosures by regular mail must contact the company. The Board will
provide shareholders with all the information necessary to help them take a position
on all agenda items, along with proposals relating to the election of board members.
The Articles of Association permits notice of participation to be given up to two days
prior to the date of the General Meeting.
Our ﬁnancial calendar will be published online.
Participation
Shareholders can give notice of their participation either in writing or via email or
digital solutions. The Board wishes to arrange the meeting so that as many as possi-
ble of the shareholders are able to participate. Shareholders who cannot attend are
encouraged to appoint a proxy. We accommodate requests of digital attendance to
the General Meeting in line with legal requirements. Representatives of the Board
of Directors shall attend the General Meeting, along with the auditor. The Chief
Executive Ofﬁcer (CEO) and the Chief Financial Ofﬁcer (CFO) shall participate on
behalf of Group management.
Agenda and execution
The Board of Directors will set the agenda according to the list in Section 10 of the
Articles of Association. According to Section 10, the participants of the General
Meeting appoint a chairperson to lead the meeting.
7. NOMINATIONS COMMITTEE
The company has a three-member Nominations Committee established in
accordance with item 11 of the Articles of Association. One of the members in the
Nomination Committee is currently a member of the Board of Directors.
The latest recommendation from NUES, last revised in October 2021, is to have no
member in the Nomination Committee from the Board of Directors. Our current
practice will be evaluated in 2023. Candidates eligible for election to the Board of
Directors are announced in conjunction with the invitation to attend the General
Meeting. Nominations for other candidates can be submitted before and during the
General Meeting itself.
According to the rules of procedures for the Nomination Committee approved by the
General Assembly in May 2022, the Nomination Committee shall, in the judgement
of candidates, evaluate the competence required by the company. The nomination
committee shall work for diversity in the board of the company. The Nomination
Committee shall also consider that the Board of Directors is ﬁtted to act inde-
pendently of special interests.
Deviations from the Code:
A member from the Board of Directors is in the Nomination
Committee.
8. BOARD OF DIRECTORS: COMPOSITION AND INDEPENDENCE
The Board consists of seven members and is currently composed of the following:
Trond Westlie (Chair, member since 2022), Morten Bergesen (member since 2004),
Christian Must (member since 2021), Didrik Vigsnæs (member since 2016), Anne
Grethe Dalane (member since 2022), Lise Lindbäck (member since 2022) and Stine
Rolstad Brenna (member since 2020), all elected by the shareholders. The members
are elected for a period of one year. There is no maximum length of tenure for the
members of the Board of Directors. The Board has 3/7 women members. According
to Norwegian law, it is prohibited to obtain certain information about job applicants,
in particular linked to underrepresented social groups. Although it is the company’s
objective to have broad representation at all levels, Arendals Fossekompani do not
track or report information relating to underrepresented social groups. Note 4.1 of the
Annual Report contains information about board meeting attendance. Information
about the competence and independence of board members is provided in subse-
quent paragraphs.
Election of board members
The General Meeting elects seven representatives to the Board of Directors. Ahead
of the election, the names of candidates may be submitted to the Nominations
Committee by an individual shareholder or by several shareholders jointly. Hence,
stakeholders’ views will be taken into consideration by the Nomination Committee.
Nominations submitted in time will be included in the invitation to attend the General
Meeting sent to all shareholders and posted on our website. Board members are
elected by simple majority. Members are elected for one year at a time, with the
possibility of re-election. About half of all board members are elected each year.
The composition and competence of the Board of Directors
The Board of Directors should be composed so that it safeguards the interests of the
shareholder community and the company’s need for expertise and diversity. This
implies that the individual board members have the necessary experience, com-
petence and capacity to carry out their duties satisfactorily and independently. The
competence of the members of the Board covers a wide range of industries, technol-
ogies, board experience, compliance, governance, ﬁnance and sustainability. These
are all competences important to the development of the company. The presenta-
tion of the Board in this report gives a presentation of the individual competences
and main positions held by each of the Board members.
According to the Articles of Association, the Board shall comprise ﬁve to seven mem-
bers. The Board currently consists of seven members. The CEO is not a member of
the Board. The members of the Board are elected for one year at a time and selects
its own Chair. Trond Westlie has been elected to chair the Board.
Changes to the Board of Directors in 2022
At the Annual General Meeting held in May 2022, Trond Westlie, Anne Grethe Dalane
and Lise Landbäck were elected Board Members. Jon Hindar, Kristine Landmark and
Heidi Pettersen resigned from the Board of Directors.
Independence of the Board of Directors
All shareholder-elected board members are considered autonomous and indepen-
dent of Group management. The same applies to material business connections. At
the close of the year, Didrik Vigsnæs is the Managing Director of Vicama AS, the larg-
est shareholder in Ulfoss Invest AS, which owns – directly, indirectly or via related par-
ties – approximately 26% of the Arendals Fossekompani shares. Morten Bergesen
was Managing Director of Havfonn AS at the close of the year, which owns directly,
indirectly or via related parties—approximately 26% of the Arendals Fossekompani
shares. Christian Must was at the close of the year, member of the board in Must
88
89
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
Invest, which owns directly, indirectly or via related parties – approximately 25% of
the Arendals Fossekompani shares.
The Board works actively to ensure that no conﬂict of interest exists between share-
holders, the Board, Group management, and other stakeholders. Stakeholders will
be informed if conﬂicts of interest were to occur. The Code of Conduct describes
how Board members should behave if conﬂicts of interest were to occur. All Board
members receive information on the Code of Conduct.
Shares owned by board members
In addition to the shares held by the representatives of the three principal sharehold-
ers, as at 31 December 2022, board member Stine Rolstad Brenna had the following
shareholdings, either personally or through wholly-owned companies: 7,500 shares.
Deviations from the Code: The Board elects its own chair, in accordance with Section
4 of the Articles of Association.
9. THE WORK OF THE BOARD OF DIRECTORS
The Board’s tasks
The Board shall determine the Group’s strategy, carry out necessary control func-
tions and ensure that the Group is satisfactorily managed and organized. The Board
shall set the company’s ﬁnancial objectives and approve its plans and budgets. The
Board is also responsible for approving and updating the organization’s purpose,
value statement, policies and goals related to sustainable development. The senior
executives in the Company are delegated the task to update and present material
to the Board that are relevant to make good decisions regarding plans budgets and
policies and goals related to maintain a sustainable development.
Furthermore, the Board is overseeing the organization’s due diligence and other
processes to identify and manage the organization’s impacts on the economy, envi-
ronment, and people. Stakeholders are encouraged to support these processes with
their input during the Annual General Meeting.
The targets, strategies and risk proﬁle of the Company are reviewed annually by the
Board of Directors.
The sustainability strategy, the materiality analysis, stakeholder analyses and the
sustainability report are approved by the Board of Directors. The operational imple-
mentation of these processes is delegated to the Chief Sustainability Ofﬁcer (CSO) of
the Company. This is in accordance with the Environmental Policy of the Company.
The Board of Directors has delegated the formal stakeholder dialogue to the senior
executives in the companies. A review of the systematic stakeholder interviews is
each year presented to the Board of Directors from the CSO.
Rules of Procedure for the Board
The Rules of Procedure encompass the following: the role of the Board and its tasks,
the tasks of the CEO and his or her obligations towards the Board, formal procedures
for the handling of matters brought before the Board, notice of board meetings and
matters required to be considered by the Board etc. The Rules also stipulate when
the Board is in quorum, how minutes are to be kept, how legal disqualiﬁcation is
determined and how the duty of conﬁdentiality is to apply. The Board may deviate
from the Rules of Procedure in certain situations.
Providing instructions for executive management
A clear distinction has been made between the tasks and work of the Board and
that of Group management. The Chairman of the Board is responsible for ensuring
that the Board’s proceedings and work are conducted in an effective and correct
manner. The CEO is responsible for managing company operations. The CEO’s tasks
are clearly stated in the instructions drawn up for that position.
Notice of board meetings and meeting procedures
The Board has an annual plan containing a set of predetermined topics for consid-
eration at board meetings.
The Board normally meets 6 to 8 times a year. Additional meetings are held when
necessary. In 2022, a total of 10 board meetings were held.
All board members receive information about the company’s operational and ﬁnan-
cial performance on a regular basis and in good time before the scheduled meetings.
Board members also receive monthly operational reports. The company’s business
plan, strategy and risks are reviewed and evaluated regularly by the Board.
The ﬁnal agenda for the board meeting is determined by the Chairman in consulta-
tion with the CEO. The CEO attends board meetings together with the board mem-
bers. Others are invited to attend when this is deemed necessary.
90
91
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
Duty of conﬁdentiality – communication
between the Board and shareholders
In principle, the minutes of board meetings and the Board’s discussions are conﬁden-
tial, unless the Board decides otherwise or there is no apparent reason to maintain
conﬁdentiality or secrecy.
Legal competence
The Board complies with the rules for legal competence and disqualiﬁcation pur-
suant to Section 6–27 of the Norwegian Public Limited Liability Companies Act and
the Board’s own Rules of Procedure. There were no issues in 2022 which a board
member was disqualiﬁed from discussing or voting on for reasons of legal compe-
tence. See also item 4 above, Guidelines for Board Members and Senior Executives.
Use of board committees
The Group has established an Audit Committee and a Remuneration Committee,
both comprising members of the Board.
The Audit Committee
The company has a three-member Audit Committee established in accordance with
the Rules of Procedure for the Audit Committee approved by the Board of Directors.
The members are all members of the Board of Directors and consists of Stine Rolstad
Brenna (Chair, member since 2020), Morten Bergesen (member since 2010) and
Anne Grethe Dalane (member since 2022). The committee has 2/3 women mem-
bers. There are no underrepresented social groups in the committee.
All the members of the audit committee are elected from the members of the Board
of Directors and are independent of the group management. The competence of the
members is covered under the section about the Board of Directors and the presen-
tation of the Board of Directors in the annual report.
The Audit Committee is a preparatory committee to the Board of Directors. The
committee is also responsible for providing support to the Board in the reporting of
annual accounts, audits, internal control, risk management, sustainability reporting
and more. The instruction for the Audit Committee was last revised by the Board of
Directors in March 2023, to also include the obligation to supervise the audit of the
annual accounts by the auditor in line with the EU regulation (EU) No 537/2014, and to
assess and supervise the interdependence of the auditor as included in the amend-
ments to the Auditors Act of 1 January 2021. At least one member shall be indepen-
dent of the company’s Group management and have qualiﬁcations in accounting or
auditing. Board members who are also members of the Group management cannot
at the same time be members of the Audit Committee.
The Remuneration Committee
The Remuneration Committee is a preparatory committee to the Board of Directors
comprising three board members including the Chairperson of the Board. The com-
mittee shall prepare compensation related matters for the Board and prepare the
remuneration policy for remuneration of executive management and the remun-
er-ation report to the General Meeting.
The company has a four-member Remuneration Committee established in accor-
dance with the rules of procedure for the Remuneration Committee approved by the
Board of Directors. The members are all members of the Board of Directors and con-
sists of Trond Westlie (Chair, member 2022), Christian Must (member since 2022),
Didrik Vigsnæs (member since 2019) and Lise Lindbäck (member since 2022). The
committee has 1/4 women members. According to Norwegian law, it is prohibited to
obtain certain information about job applicants, in particular linked to underrepre-
sented social groups. Although it is the company’s objective to have broad represen-
tation at all levels, Arendals Fossekompani do not track or report information relating
to underrepresented social groups.
All the members of the Remuneration committee are elected from the members of
the Board of Directors and are independent of the group management. The compe-
tence of the members is covered under the section about the Board of Directors and
in the Annual Report.
Self-assessment
The Board carries out an assessment of its activities once a year, where the Board
considers the outcomes of its processes and tasks as described above, including
their own performance in overseeing the management of the organization’s impacts
on the economy, environment, and people. The starting point for this assessement
is Arendals Fossekompani’s business activities and the work of the Board, how the
Board works and its interactions. With regards to this, the Board also evaluates its
performance in relation to corporate governance.
In 2022, no self-assessment was conducted as there were many changes to the
Board during the year, hence, no actions were taken in response to the evaluations.
The next self-assessment will take place in 2023 as the members of the Board have
held their positions for some time.
Deviations from the Code:
In 2022, no self-assessment was conducted as there
were many changes to the Board during the year.
Onboarding and competence development
To advance the collective knowledge, skills, and experience of the Board related to
sustainable development, the Board has an onboarding program covering these
topics as the board members enter their roles.
Through regular presentations about topics related to sustainability in the board
meetings as well as more in-depth strategic presentations about this topic in the
strategy meeting, the Board will further advance their collective knowledge in this
topic.
10. RISK MANAGEMENT AND INTERNAL CONTROL
The Group has no separate internal auditing department. Financial audits are car-
ried out on a task-sharing basis, and in compliance with our guidelines and approval
routines. The Board carries out an annual review of the company’s most important
risk areas and internal controls and receives a report from the auditor addressing
such matters. The Board evaluates the company’s core values and guidelines on
ethics and social responsibility every year and veriﬁes the extent of compliance with
these guidelines.
Group and company ﬁnancial reporting process
The Board receives monthly ﬁnancial reports, with accompanying comments on
the ﬁnancial performance of the Group, the company and all portfolio companies.
Extensive reports are prepared every ﬁscal quarter, with comments about the ﬁnan-
cial status of all levels in the Group.
The ﬁnance department analyses the income statement and balance sheet in con-
nection with each monthly report. A detailed reconciliation of balance sheet and
income statement items are prepared each quarter, based on a predetermined plan.
The value of material and risk-exposed balance sheet items are assessed. Major
and unusual transactions are reviewed. All control procedures are documented. The
most signiﬁcant portfolio companies (see Note 1 – Segment reporting) have similar
routines for ﬁnancial reporting to the Group.
92
93
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
FCCS Oracle, a cloud-based database solution delivered by Oracle, is used for ﬁnan-
cial consolidation. Our portfolio companies report all ﬁgures to this database online.
The ﬁnance departments at our portfolio companies are responsible for the quality
of the data reported each month and quarter. The quality of the reported data is
checked by our auditors in connection with the preparation of the annual ﬁnancial
statements. Portfolio company ENRX also uses FCCS Oracle for its consolidation.
Other portfolio companies use spreadsheets for consolidation.
The Audit Committee (see above) carries out and documents a detailed review of the
quarterly and annual reports prior to their consideration by the Board. The minutes
and documentation from the Audit Committee meetings are available to the Board.
Critical concerns
Arendals Fossekompani has guidelines for ethical business conduct (the Code of
Conduct) which can be found on the Company website. All employees and the Board
receive training in our Code of Conduct and the whistleblower policy, which explains
the company’s internal guidelines on how to deal with critical concerns if they occur.
The Board is alerted about critical events.
11. REMUNERATION TO THE BOARD OF DIRECTORS
The Annual General Meeting determines the remuneration payable to board mem-
bers. The 2022 Annual General Meeting resolved that, with effect from May 2022,
the Chairman of the Board will receive a fee of NOK 635,000, and NOK 340,000 will
be paid to the other board members.
Remuneration paid to board members is not linked to ﬁnancial performance or
option schemes etc. None of the Board’s shareholder-elected members work for
the company in other capacities.
12. REMUNERATION OF SENIOR EXECUTIVES
The Remuneration Policy with guidelines for remuneration of executive manage-
ment and report on the annual remuneration of executive management is subject
to approval and advisory vote by the Annual General Meeting in accordance with the
Public Limited Companies Act section 6-16 A and B. The General Meeting approve
the Remuneration Policy by any material change and at least every fourth year
and shall annually provide an advisory vote on the annual remuneration report of
the previous year. No consultants are involved in determining remuneration. The
Remuneration Report and the Remuneration policy for 2022 were adopted unani-
mously in the Annual General Meeting in May 2022.
The Remuneration Policy and Remuneration Report are available on our website.
Shareholders are encouraged to state their opinions regarding remuneration of both
the Board of Directors and Senior Executives at the Annual General Meeting.
Guidelines
The CEO’s employment terms and conditions are determined by the Board of
Directors. Each year the Board makes a thorough assessment of the salary and other
remuneration paid to the CEO in line with the guidelines in the Remuneration Policy.
The Board may also award an annual performance-related bonus to the CEO.
The Board’s evaluation is based on market surveys for similar positions. The terms
and conditions for other senior executives and employees at the Parent Company
are set by the CEO in line with the guidelines in the Remuneration Policy. The CEO
informs the Chair of the Board of the terms and conditions.
Terms and conditions for the senior executives of portfolio companies are set by the
boards of the respective companies. The Board takes the position that the company
must remain competitive with regard to the remuneration paid to senior executives,
without being complicated or be wage leading. The remuneration is structured to
provide strong alignment between the interests of executives and shareholders,
including a focus on delivering on the company’s key strategic objectives, and in sup-
port of the business strategy and long-term interests. More information about pur-
pose and principles for remuneration of senior executives in Arendals Fossekompani
can be found in the Remuneration Policy published on our website.
94
95
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
A description of how the remuneration policy for members of the Board and senior
executives relate to their objectives and performance in relation to the management
of the organization’s impacts on the economy, environment, and people, can also be
found here.
Performance-related remuneration
Senior executives at the Parent Company beneﬁt from performance-related bonus
schemes as described in the Remuneration Policy and Remuneration Report avail-
able at www.arendalsfossekompani.no.
Portfolio companies offer performance-based remuneration to varying degrees, as
stipulated in the employees’ contracts.
Terms and conditions
Terms and conditions for remuneration of the Board of Directors are described in
Note 4 of the Annual Report.
13. INFORMATION AND COMMUNICATION
Annual ﬁnancial statements and annual report – periodic reporting
The Group normally publishes its preliminary annual ﬁnancial statements in February.
The complete annual ﬁnancial statements, along with the Annual Report, are pub-
lished on our website in March/April. In addition, accounting ﬁgures are reported on
a quarterly basis.
The company’s ﬁnancial calendar is published on the company’s websites.
Other market information
It is considered important to the Group to inform owners and investors about our per-
formance and ﬁnancial status. Emphasis is placed on providing the ﬁnancial market
with the same information at the same time. In conversations with shareholders
and analysts, care is taken to avoid giving more information to some than to others.
Arendals Fossekompani has developed an Investor Relations Policy
that is available
on our website.
Arendals Fossekompani insider instructions are updated according to the European
Market Abuse Regulation (MAR).
14. GUIDELINES FOR EQUALITY AND DIVERSITY
Arendals Fossekompani has implemented guidelines for equality and diversity for
the composition of our Board of Directors, board committees and management. The
guidelines set forth that diversity shall be an area of priority in nominating people to
the governing bodies and management of the company. There is a particular focus
on ensuring diversity with regards to gender equality and diverse expertise. The
guidelines set out more detailed objectives for the purpose of achieving these overall
objectives, with both annual target dates and long-term target dates.
The Board of Directors currently consists of three women and four men. The indi-
viduals on the Board of Directors have backgrounds from different industry sectors,
which increases diversity.
The Group management currently consists of one woman and four men. The indi-
viduals in Group management have backgrounds from different industry sectors,
which increases diversity.
The company has set the following objectives for diversity:
•
Within 2023, at least 40% of the members
of Board of Directors shall be women.
•
Within 2023, at least 40% of the Group management shall be women.
During 2022, Arendals Fossekompani recruited new colleagues and is happy to see
a growth in the number of female employees, which is a good start for our journey
towards better inclusion and greater diversity.
15. TAKEOVERS
Based on our current shareholder structure, the conditions described for takeovers
do not apply to the company. The rules of procedure for the Board of Directors of
February 2022 do however include guidelines and principles for the event of a take-
over bid and for transactions that in fact constitute a disposal of the business of
Arendals Fossekompani.
16. AUDITOR
The auditor’s formal relationship with the Board of Directors
The auditor is at the disposal of the Board of Directors and shall attend board meet-
ings if needed. The auditor shall participate in Audit Committee meetings and attend
any board meetings that deal speciﬁcally with the annual ﬁnancial statements. The
auditor will at that time inform the Board about any issues or concerns he or she
might have regarding the annual ﬁnancial statements and other matters, including
any potential disagreements between the auditor and Group management.
The Board holds annual meetings with the auditor to review reports submitted by the
latter concerning the company’s accounting policies, risk areas and internal control
routines.
Auditor’s formal relationship with executive management
The Board has drawn up guidelines for the Group’s business relations with the audi-
tor. The fees paid to the auditor for statutory auditing and consulting services are
presented separately in the annual ﬁnancial statements.
PwC is the selected auditor. In addition to an ordinary audit, the ﬁrm has also pro-
vided consulting services within areas such as accounting, taxation and reporting to
the Norwegian Water Resources and Energy Directorate (NVE). The Board regularly
assesses whether the auditor’s control function is being carried out satisfactorily.
96
97
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FROM THE BOARDROOM
ANNUAL AND SUSTAINABILITY REPORT
Sustainability
04
Integrity
100
Reporting Frameworks
100
EU Taxonomy Summary
102
Stakeholder Dialogue and Materiality Analysis
105
Sustainability Priorities
106
Updated Materiality Assessment
106
Strategic Focus Areas
107
Membership Associations
108
Ethical Business Conduct
109
Responsible Investments
115
Optimizing the Portfolio Companies
118
A Great Place to Work
122
Community Engagement
135
Ambitions and Targets for 2023
138
99
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Integrity
Over the past few years, our sustainability and social responsibility efforts have
become more known due to open and transparent communication. We have pub-
lished an increasing set of sustainability related documents, including our Code
of Conduct, Business Code of Conduct, our annual sustainability report, and other
important policy documents, which are all available on our website.
We are proud that also our portfolio companies are communicating more proac-
tively about their sustainability efforts, and several of the companies, including Volue,
Tekna and ENRX, now publish their own sustainability reports.
Reporting frameworks
GLOBAL REPORTING INITIATIVE
The Global Reporting Initiative (GRI) is an independent, international organisation
that provides a global common language to both the reporting and communica-
tion of impacts. The GRI Standards are the world’s most widely used standards
for sustainability reporting. The Standards are advancing the practice of sustain-
ability reporting, and enabling organizations and their stakeholders to take action
that creates economic, environmental, and social beneﬁts for everyone. Arendals
Fossekompani and portfolio companies report on material impacts for a variety of
sustainability issues, such as climate change, health and safety, and corporate gov-
ernance, in accordance with GRI’s recommendations.
SUSTAINABILITY ACCOUNTING STANDARDS BOARD (SASB)
The Sustainability Accounting Standards Board (SASB) provides a set of industry-
specific standards that are used to guide the disclosure of financially material
sustainability information for Arendals Fossekompani.
TASK FORCE ON CLIMATE-RELATED FINANCIAL DISCLOSURES
The purpose of the TCFD Standard is to give investors more knowledge on the
ﬁnancial impacts of climate-related issues, based on four core recommendations:
Governance, Strategy, Risk Management, and Metrics and Targets. From 2020 to
2022, a climate risk analysis, including an assessment of different climate scenar-
ios, was carried out for the portfolio, based on TCFD recommendations. The TCFD:
Climate-Risk Assessment Report 2022 is attached. Arendals Fossekompani con-
ducted climate risk assessments in accordance with the TCFD recommendations in
2020 and 2021. Based on these assessments, we developed an ambitious target to
limit our negative climate impact.
CARBON DISCLOSURE PROJECT
Carbon Disclosure Project (CDP) is an international reporting framework for companies
to manage their environmental impacts. It is aimed at increasing transparency and
providing an intuitive performance score based on companies’ climate action. 2021
marked the ﬁrst year AFK publicly disclosed its environmental impacts to CDP. AFK
was awarded a score "B" in 2021 and 2022.
GREENHOUSE GAS PROTOCOL
The GHG Protocol establishes comprehensive global standardized frameworks to
measure and manage greenhouse gas (GHG) emissions from private and public
sector operations, value chains and mitigation actions. The GHG Protocol Corporate
Accounting and Reporting Standard provides requirements and guidance for com-
panies and other organizations preparing a corporate-level GHG emissions inven-
tory.
UNITED NATIONS SUSTAINABLE DEVELOPMENT GOALS
Arendals Fossekompani supports the United Nations Sustainable Development
Goals (SDG). We have chosen six SDGs where we think we can make the largest
positive contribution, which are all linked to our focus areas and material topics. Our
portfolio companies have chosen SDGs independently of this. Our commitments to
the SDGs have been tied in with these strategic focus areas to further emphasize
how they are addressed. We have chosen SDGs 5: Gender Equality, 8: Decent Work
and Economic Growth, 13: Climate Action, 7: Affordable and Clean Energy, 9: Industry,
Innovation and Infrastructure, and 12: Responsible Consumption and Producion.
SCIENCE BASED TARGET INITIATIVE
In 2022, Arendals Fossekompani committed and submitted science-based emission
reduction targets in line with the Science Based Target initiative (SBTi) criteria and
recommendation. Validation of targets are booked for 2023. When the targets
are approved by SBTi, it will be communicated through their website. Arendals
Fossekompani will, after validation, continue to report on our emissions and prog-
ress towards meeting our 2030 targets. Arendals Fossekompani has committed to
reducing absolute Scope 1 and Scope 2 GHG emissions with 42% by 2030 from a
2021 base year. Our portfolio companies will set their own science based targets
within 2027, as part of the Portfolio Coverage approach. In 2023, we will commit to
also setting net zero targets to align with the ambitious aim of the Paris Agreement.
This means that we will commit to what science dictates is necessary to reduce
emissions to meet net-zero global emissions by 2050 to limit global warming to
1.5 °C. This target is approved by the Board of Directors.
100
101
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
EU Taxonomy Summary
As a key part of the European Union’s Green Deal, the EU Taxonomy was created to
deﬁne a common and enforceable language on sustainability to scale up sustainable
investments and avoid greenwashing. The EU Taxonomy establishes a European
classiﬁcation system for sustainable economic activities. It includes six environ-
mental objectives, of which the ﬁrst two are adopted by the EU and the others are
not yet adopted:
1.
Climate change mitigation.
2.
Climate change adaptation.
3.
Sustainable use and protection of water and marine resources.
4.
Transition to a circular economy.
5.
Pollution prevention and control.
6.
Protection and restoration of biodiversity and ecosystems.
Companies must report the share of aligned, eligible and non-eligible economic
activities for three ﬁnancial KPIs: net revenue (turnover), capital expenditure (CapEx)
and operating expenditure (OpEx).
An activity is considered eligible if it matches the description of an economic activity
in the EU Taxonomy. An eligible activity needs to fulﬁl technical screening criteria
(TCS) to be considered aligned. Refer to the ﬁgure below for a detailed overview of
the process.
ARENDALS FOSSEKOMPANI AND THE EU TAXONOMY
Arendals Fossekompani carried out a stakeholder analysis in 2021, where the EU
Taxonomy was one of the most material topics addressed. We have incorporated
the EU taxonomy into our investment strategy, encompassing new investments
related to electriﬁcation, materials and green energy. Such investments should show
a potential to contribute to, or to be transformed to contribute to, one of the six envi-
ronmental objectives deﬁned by the EU Taxonomy. Due to strategic importance and
stakeholder expectations, AFK performed an initial assessment of the EU Taxonomy
in 2021, which provided an indication of eligibility and alignment of the portfolio. In
2022, we expanded our assessment to cover alignment, in addition to eligibility.
SCOPE
All portfolio companies in the AFK group have been considered for reporting on the
EU Taxonomy for 2022. Vergia is recently established, and therefore not considered
ﬁnancially material for the group, and therefore scoped out of the 2022 reporting.
We have not included joint ventures and associated companies, as they are not con-
solidated in the group’s ﬁnancial statements. Each portfolio company has identiﬁed
their core activities by assessing the ﬁnancial materiality and strategic relevance of
their economic activities. Activities not assessed as core to the portfolio companies,
have been scoped out from reporting for 2022. In addition to the adopted Climate
Delegated Act, we assessed the activities proposed by the Platform on Sustainable
Finance. Since the technical screening criteria (TSC) for the four remaining environ-
mental objectives have not been adopted by the EU, the reporting on these activities
is limited to eligibility, pending ﬁnalization of the criteria.
KPIs
Identiﬁcation of
business activities
in the EU Taxonomy
for each portfolio
company
Screening the
NACE codes of
the portfolio
companies
Assessment of
eligible activities
per portfolio
company
List of eligible
activities
Identify criteria
for substantial
contribution
Data collection
Assessment of
the impact of the
activities against
the criteria
Identify criteria
for DNSH
Data collection
Assessment of
the impact of the
activities against
the criteria
Identify criteria
for minimum
safeguards
Assessment
of compliance
on group level
Alignment
Calculation of
KPls on portfolio
company level
Consolidation of
reported ﬁgures
on group level
Reporting
group level
Substantial
contribution
Do no
signiﬁcant harm
Minimum
safeguards
Elegibility
ECONOMIC ACTIVITIES IN THE PORTFOLIO
Environmental
objective
Economic activity as
deﬁned in the EU Taxonomy
Transitional/
Enabling
Relevant
companies
Climate
change mitigation
3.6
Manufacture of low carbon technologies
Enabling
ENRX, Tekna
4.5
Electricity generation from hydropower
-
AFK Vannkraft
4.9
Transmission and distribution of electricity
Enabling
Volue
4.10
Storage of electricity
Enabling
Ampwell
8.2
Data-driven solutions for
GHG emissions reductions
Enabling
Alytic, Volue
9.1
Close to market research,
development and innovation
Enabling
Alytic, ENRX
Climate
change adaptation
7.7
Emergency services - Technical
protection response and Assistance
-
NSSLGlobal
8.2
Computer programming,
consultancy and related activities
-
Volue
Transition to a
circular economy
2.6
Manufacture of durable electrical
and electronic equipment
-
ENRX
14.1
Provision of electrical and electronic
equipment through circular
business models
-
NSSLGlobal
EU TAXONOMY ASSESSMENT
102
103
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
STAKEHOLDER DIALOGUE
Why ESG matter for …
… and why that is important
for Arendals Fossekompani
Arena for dialogue
Investors
Attractive returns and
value growth potential
A future-proof investment
Being taxonomy compliant
Access to equity
at favourable terms
Right-priced stock for
use as currency in M&A
Meetings
Quarterly updates
Company presentations
Customers
Customers buying our
products and services
Meetings
E-mail
Seminars /
webinars / conferences
Regulators
Operating in line
with legislation
Operating in line with legislation
(mitigate reputation and ﬁnancial risk)
Operating in line with expectations
from the greater society
Being seen as a transparent
and trustworthy company
Reporting
requirements
Audits
NGOs
Operating in line with expectations
from the greater society
Being seen as a transparent
and trustworthy company
Meetings
Seminars /
webinars /
conferences
Employees
Pride
Sense of purpose
beyond earning a living
Access to great talent
Lower turnover
Lower recruitment costs
Employee
development talks
Town-hall meetings
E-mail / Teams
PROCESS
The EU Taxonomy assessment has been conducted by each portfolio company, sup-
ported by a core team with representatives from AFK. Assessments have been per-
formed in accordance with the structure of the EU Taxonomy, starting with eligibility
assessments before assessing compliance with the TSC for substantial contribution
and do no signiﬁcant harm (DNSH). The minimum safeguards assessment has been
conducted by AFK on Group level, based on policies and procedures covering the AFK
Group. Eligible activities that met the TSC for substantial contribution and DNSH,
as well as the minimum safeguards, are reported as aligned. AFK reports the EU
Taxonomy on an aggregate level of portfolio companies.
CONCLUSIONS
Achieving the goal set out in our 2021 reporting, Arendals Fossekompani is proud to
report on alignment for 2022. Given the high percentage of eligible activities, we see
a great potential within the portfolio companies’ business activities. Our goal is to
increase both eligible and aligned reporting in the years to come. For future reporting
we will focus on activities that have not been fully evaluated for alignment, as well
as the non-core activities that are not reported on this year. We are looking forward
to the 2023 Taxonomy reporting where we expect to have a complete taxonomy
reporting covering all AFK portfolio companies and business activities.
Stakeholder Dialogue
and Materiality Analysis
A stakeholder assessment has deﬁned the following key stakeholder groups for
Arendals Fossekompani: Investors, customers, regulators, NGOs, and employees.
Arendals Fossekompani is continuously engaging with our stakeholders. Stakeholder
dialogue is important because it gives us a representative overview of the expecta-
tions of those around us and ensures that we are on the right track.
The method of engagement varies between the different stakeholders and from
year-to-year. In 2022 we mainly engaged through systematic in-depth interviews, as
well as regular meetings and dialogue, and our annual and quarterly reports.
The two-way communication has resulted in meaningful engagement. The results
from the stakeholder dialogue have provided us with valuable insights into our stake-
holders’ expectations regarding sustainability and has impacted the selection of our
strategic focus areas and material topics. Our progress in this area is communicated
back to stakeholders, mainly through this sustainability report.
EU TAXONOMY ELIGIBILITY AND ALIGNMENT
Aligned
Eligible, not aligned
Non-eligible
22%
aligned
36%
eligible, not aligned
42%
non-eligible
25%
aligned
44%
eligible, not aligned
31%
non-eligible
14%
aligned
36%
eligible, not aligned
50%
non-eligible
Turnover
OpEx
CapEx
104
105
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
ARENDALS FOSSEKOMPANI’S PRIMARY AND SECONDARY VALUE CHAIN
To further analyse our sustainability impacts, we have evaluated each activity of
our primary and secondary value chain, and deﬁned material risks and opportuni-
ties. This analysis has been conducted according to the GRI reporting framework
and TCDF recommendations of best practice. A GRI content index is provided as an
appendix to this report.
Ethical business conduct
Anti-corruption and bribery
Responsible supply chain
Information security
Responsible investments
New investments
Green ﬁnancing
Optimizing portfolio companies
Economic performance
Strengthening sustainability performance
A great place to work
Diversity and equality
Employee satisfaction and talent attractiveness
Health and safety
Community engagement
Sponsorship, partnerships
and other investments
Investment
Policy & Strategy
Financial & Societal
Value creation
Raw Materials
and Supply Chain
Production
and Distribution
Marketing and
Management
Customer
or End-User
Secondary value chain (Portfolio companies)
Primary value chain (AFK Parent Company)
Portfolio
Management
Sustainability Priorities
Based on the analyses of our stakeholders and the primary and secondary value
chain, a consequence vs likelihood analysis has been conducted to deﬁne the material
topics for Arendals Fossekompani.
MAIN RISKS
•
Failure to meet potential legal requirements and stakeholder expectations.
•
Potential gap in ambitions between AFK Parent Company
and portfolio companies.
MAIN OPPORTUNITIES
•
Increased demand for our green technologies.
•
Active sustainability management.
•
Transparency through non-ﬁnancial disclosures.
Updated Materiality Assessment
In 2022, AFK Parent Company did a review of the material topics for reporting.
The review included an internal and external assessment of the focus areas and
material topics, with speciﬁc interviews with a selection of our stakeholders.
The double materiality assessment was carried out in three main parts:
1.
An assessment of Arendals Fossekompani’s impact on sustainability
factors including a consequence analysis of the value chain,
as well as sector impacts and relevant standards.
2.
An assessment of how sustainability
impacts Arendals Fossekompani,
including in-depth interviews and dialogue with stakeholders, analysis of
how megatrends shape and impact us, and risks and opportunities.
3.
Anchoring of focus areas and material topics: Focus areas are
identiﬁed, and the actual approach to follow up the
material
topics and reporting of performance. The 2022 materiality assessment
did not result in any changes to our focus areas, however, the list of
material topics were speciﬁed, as this had not been done before
(hence, no change to the material topics).
Strategic Focus Areas and Material
Topics
The outcome of the 2022 materiality assessment was a detailed overview of
Arendals Fossekompani’s stakeholders and their expectations, a consequence vs
likelihood matrix, where our material topics were singled out based on the signiﬁ-
cance of our actual or potential impact, and the identiﬁcation of ﬁve strategic focus
areas that will guide our sustainability strategy moving forward. These ﬁve focus
areas are: Ethical business conduct, Responsible investments, Optimizing the port-
folio companies, A great place to work, and Community engagement. For each focus
area we have identiﬁed material topics for our business environment.
106
107
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
1. https://afk-assets.fra1.digitaloceanspaces.com/website/documents/Code-of-Conduct-
Arendals-Fossekompani.pdf
Membership Associations
To support the work with these ﬁve focus areas we are members of these relevant
industry organisations:
UNITED NATIONS GLOBAL COMPACT
A UN initiative that supports global companies that are committed to responsible
business practices in the areas of human rights, labour, the environment, and cor-
ruption. Our annual report on Communication on Progress is a key component of
our commitment to UN Global Compact. Furthermore, we cooperate by arranging
seminars, our employees have participated in courses held by UN Global Compact,
and we pay an annual membership fee.
KLIMAPARTNERE AGDER
A network for working together to achieve GHG reductions and a low emission society.
We actively contribute to knowledge sharing by arranging seminars together and
participate in professional events held by Klimapartnere. We pay an annual mem-
bership fee.
FORNYBAR NORGE
A part of the Confederation of Norwegian Enterprises (NHO). We participate through
membership in the industry forum for the power market. We pay an annual mem-
bership fee.
Ethical Business Conduct
Anti-corruption and Bribery
MATERIALITY
At Arendals Fossekompani, we have a long and proud history. We will always act
responsibly and with integrity everywhere we operate. In this way we honour our
legacy and secure our current and future license to operate. Some of our operations
take place in countries associated with high political, corruption and human rights
risks. The potential negative impact from these risks makes anti-corruption and
anti-bribery material topics for us.
Several of the portfolio companies regularly conduct risk assessments relating to
corruption. Corruption risks typically includes the risk of bribery, extortion, fraud,
embezzlement and money laundering, and the signiﬁcance of such risks are often
linked to location of operation. Our portfolio companies are operating in an interna-
tional environment, where our operations in China and India are perceived to consti-
tute a higher risk, ref. the Transparency International Corruption Perception Index.
When we are involving in activities in our supply chain, that means activities both in,
procurement of products to our production or in sale of our products.
APPROACH
Our Code of Conduct constitutes our framework for managing compliance and
integrity risks. The Code of Conduct describes our commitments and requirements
regarding business practice, personal conduct and expectations towards business
partners. The
Code of Conduct outlines clear principles and rules in key compliance
and integrity areas like anti-corruption and anti-bribery, facilitation payments, con-
ﬂict of interest, gifts and hospitality, human rights and labour rights, fair competition,
anti-money laundering, sanctions and trade compliance, and more.
Our Code of Conduct is endorsed by the Board of Directors and is publicly available
on our webpage
1
. The Audit Committee regularly reviews the company’s compliance
with the Code of Conduct and supporting documents, and the Chief Sustainability
Ofﬁcer reports to the Audit Committee on the design, implementation and effec-
tiveness of our business integrity program and activities, and reviews performance
in this respect.
PERFORMANCE
In 2022, Arendals Fossekompani maintained most core elements of its compliance
program including the anti-corruption and human rights compliance frameworks.
•
We conducted screenings of potential projects in
high-risk countries and of potential business partners.
•
All whistleblower reports received were investigated.
•
A Code of Conduct e-learning program
was made available to company personnel.
There was one conﬁrmed incident of corruption in the reporting year, which was a
false representation. One employee was dismissed or disciplined for corruption and
one contract with a business partner was terminated due to violations related to
corruption.
108
109
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
COMMUNICATION ABOUT ANTI-CORRUPTION POLICIES AND PROCEDURES
Total
Europe
America
Asia
Board of Directors
35 (61%)
35
0
0
C-suite positions
38 (67%)
31
6
1
Non-executive level management
140 (84%)
118
10
12
Other employees
1,686 (76%)
1,104
166
416
Business partners
1,287 (5.7%)
230 (1.1%)
46 (8.9%)
1,011 (52%)
TRAINING IN ANTI-CORRUPTION POLICIES AND PROCEDURES
Total
Europe
America
Asia
Board of Directors
20 (35%)
20
0
0
C-suite positions
30 (53%)
29
0
1
Non-executive level management
86
(52%)
74
0
12
Other employees
931 (42%)
519
2
410
Responsible Supply Chain
MATERIALITY
Mismanagement of a global supply chain can cause negative environmental and
social impacts, as well as impacts related to governance issues, such as corruption
and data privacy violations. Arendals Fossekompani takes a precautionary principle
approach to business ethics and responsible supply chain. We have a duty to respon-
sibly manage our relationships with our suppliers, monitor their activities and actively
work to diversify our supplier portfolio. With a multitude of suppliers in our supply
chain, ensuring a responsible approach and management of this network to mitigate
negative impacts, is a material topic for Arendals Fossekompani.
Arendals Fossekompani is committed to respecting human rights in all our oper-
ations. This includes the rules and principles laid out in the UN Guiding Principles
on Business and Human Rights, including the principles and rights set out in the
eight fundamental conventions identiﬁed in the Declaration of the International
Labour Organisation (ILO) on Fundamental Principles and Rights at Work and
the International Bill of Human Rights, and the OECD Guidelines for Multinational
Enterprises. We do not accept any form of forced labour, including child labour. We
comply with all fundamental labour rights and have a continuous focus on providing
safe working conditions for all.
APPROACH
Our policies on ethical business conduct are addressed in our Code of Conduct, which
all our employees have signed, and which is also extended to our suppliers through
our Business Partner Code of Conduct. To secure that we meet the demands that
we set for others, we have revised and assessed our Code of Conduct and Business
Partner Code of Conduct, with help from judicial experts. All portfolio companies
have their own Code of Conduct and Business Partner Code of Conduct.
Our commitment to sustainability includes our external operations related to our
suppliers and customers, as well as our internal operations. Suppliers are expected
to adhere to our business ethics guidelines as outlined in the Business Partner Code
of Conduct, including our standards for health and safety, human and labour rights,
environment, quality management, business integrity and corporate social respon-
sibility. We also expect suppliers and business partners to act in a trustworthy and
transparent way.
The Business Partner Code of Conduct and Arendals Fossekompani’s expectations
towards suppliers and business partners are further outlined on our website.
Suppliers and business partners are controlled and followed up through our Factlines
supply chain management system, which enables us to verify and monitor suppliers’
performance. Our risk-based supplier onboarding process, which includes health and
safety, environmental and compliance aspects (such as human and labour rights
risks checks), allows for comprehensive evaluation of our qualiﬁed suppliers. The
goal is to ensure that our supply base is aligned with our principles and requirements.
Our audit questionnaire includes a detailed veriﬁcation of adherence to our Supplier
Declaration and internationally recognized standards for human and labour rights
(e.g., UN Guiding Principles for Business and Human Rights).
It is important that employees are aware of and report undesirable behaviour
through our internal whistleblowing channel.
Arendals Fossekompani is committed to provide for or cooperate in the remediation
of negative impacts that the organization identiﬁes it has caused or contributed to,
weather this relates to negative local community impact, occupational health and
safety breaches, corruption or the like. The company conducts risk assessments on a
regular basis, as stated throughout this report. Although the company has not estab-
OPERATIONS ASSESSED FOR RISKS RELATED TO CORRUPTION
Total number of operations
152
Total number of operations assessed for risks related to corruption
105
Percentage of operations assessed for risks related to corruption
69%
LOOKING FORWARD
In 2023, we will continue our efforts to secure responsible business conduct and
promote a culture of compliance and integrity. We will build a common compliance
program for all portfolio companies to ensure that these matters remain relevant
in a dynamic global context and amid challenges, such as increased regulations,
enforcement, complexity and external expectations, as well as sustainability impact
and alignment with our strategic sustainability agenda.
110
111
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
lished nor participates in ofﬁcial grievance mechanisms, Arendals Fossekompani has
established a whistleblowing channel and provides contact details for key employ-
ees on the company’s website. We are also continuously engaging with relevant
stakeholder groups about our sustainability impact, both systematically and on a
day-to-day basis, to map questions or complaints on topics that they are interested in
or concerned with. Should we receive complaints from stakeholders, our procedure
is to follow the steps as outlined in our whistleblower policy.
THE TRANSPARENCY ACT
On 1 July 2022, the Norwegian Transparency Act entered into force. The act relates
to enterprises’ transparency and work on fundamental human rights and decent
working conditions. More than 8,000 Norwegian businesses now have the duty to
carry out due diligence of human rights in their own operations, as well as their value
chains. Stakeholders’ right to information about conditions at production facilities
concerning a particular product or service that the business provides, is material in
this new act. It is important that Arendals Fossekompani acts according to the law
and sets a good example for the portfolio by identifying risks among suppliers.
To comply with the new Transparency Act, we have completed a project in which
we gathered information from all main suppliers. This due diligence was conducted
through a Factlines CSR self-reporting form, which is based on the OECD guidelines
and the UNGC principles, as well as the Transparency Act. The goal was to gather
information to measure and understand the most important risks in our value chain.
The results classiﬁed the suppliers in different risk groups, which enabled us to iden-
tify which to follow up ﬁrst. In addition, we have created a guideline for handling
incoming requests for information, in accordance with the Transparency Act.
In 2023, we publish a Human Rights and Transparency Act Report to address
the content in the Transparency Act. For more information about how Arendals
Fossekompani works with human rights and a responsible supply chain, includ-
ing screening of new suppliers on social criteria and negative social impact in the
supply chain and actions taken, please refer to the separate Human Rights and
Transparency Act Report found on our website.
PERFORMANCE
Improvements and actions taken in 2022 includes:
•
A mapping of our suppliers.
•
Implementing the Factlines system to follow up suppliers.
•
Updating our Supplier Code of Conduct.
•
Establishing a new Transparency Act routine.
Our survey of suppliers showed no signiﬁcant breaches of human rights, but there
are a few risks related to production countries that we will follow up in 2023. Arendals
Fossekompani had no signiﬁcant instances of non-compliance with laws and regula-
tions during the reporting period and received no ﬁnes for instances of non-compli-
ance with laws and regulations. We had zero reported incidents regarding breach of
human rights in our operations or supply chain in the reporting period.
LOOKING FORWARD
In 2023, we will establish a common business partner conduct procedure for all
portfolio companies. This is important due to challenges like increased regulations,
enforcement, complexity and external expectations, as well as sustainability impact
and alignment with our strategic sustainability agenda. We also plan to continue the
work with our suppliers, nudging them to improve on securing basic human rights,
safety and health of people involved in all parts of their value chains. As a follow-up
from our human right’s due diligence, we will start a dialogue with suppliers that have
production in high-risk countries.
Information Security
MATERIALITY
Cyber security is the application of technologies, processes, and controls to protect
systems, networks, programs, devices, and data from cyber-attacks. Cyber secu-
rity reduce the risk of cyber-attacks and protect against the unauthorized exploita-
tion of systems, networks, and technologies. Cyber security is a critical, board-level
issue in Arendals Fossekompani and our portfolio companies, and we can have both
an actual and potential positive or negative impact on cyber security. Our positive
impact relates to Arendals Fossekompani’s ability to establishing safety guidelines,
providing training to employees, and implementing cyber secure systems.
A lack of cyber security could have an actual or potential negative impact, for exam-
ple relating to the critical infrastructure offered by some of our
portfolio companies,
such as Volue, NSSLGlobal and Alytic, where a potential breaches could, in the most
severe instances, lead to critical downtime, impacting people, the environment and/
or the economy.
The 2022 IBM study “Cost of a data breach” documents that the average cost of a
data breach is USD 4.35 million. 83% of the organisations studied have had more
than one breach. Average cost savings associated with fully deployed security AI and
automation was USD 3.05 million. The cost of breaches is lower for organisations that
deploy zero trust technology. System error or human error account for 45% of the
incidents leading to loss of data, according to IBM.
APPROACH
New regulations and reporting requirements make cyber security risk oversight a
challenge. In Arendals Fossekompani, the Board requires assurance from manage-
ment that cyber risk strategies will reduce the risk of attacks and limit ﬁnancial and
operational impacts. The Board, in cooperation with portfolio company management
groups, has a central role in putting cyber security on the agenda. The goal is to iden-
tify gaps and initiate improvement projects to close the gaps. Improvement projects
will increase the level of awareness and security in portfolio companies.
Cyber security should be a regular and natural part of the agenda and the annual
schedule for the Board. Management should regularly report back to the Board
regarding topics important for cyber security. If gaps are identiﬁed, a list of improve-
ment projects should be made, with a timeline, a responsible person, and a timely
report.
The management is responsible for determining cyber security risks and adequate
company preparedness, and report back to the Board. The most important steps in
securing cyber security are deﬁned in our Cyber Security Check List for AFK Boards:
•
Deﬁning roles and responsibilities for cyber security.
•
Training employees (ambition to train 100% of
employees by end of 2024, up from 19% in 2022).
•
Performing emergency drills.
•
Updating procedures and policies to reﬂect cyber security best practices.
•
Ensuring that the company has an Incident Handling Procedure,
and that it is tested and key employees are trained in using it.
112
113
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
•
Implementing best practices in the organisation.
•
Implementing 24/7 systems surveillance with
both automated and human response to security alerts.
PERFORMANCE
Our performance relating to cyber security in 2022 includes:
•
Establishing cyber security check-list for all our Boards.
•
Information security policy update.
•
Provide training for employees on cyber security.
We currently provide training to several of our portfolio companies, with a possibility
of rolling out training to more companies shortly.
LOOKING FORWARD
In 2023, we will continue to use cyber security check lists for all portfolio companies.
This is important due to increased complexity and external expectations, as well as
the increasing risk for cyber security breaches. Our focus areas for 2023 relating to
this topic includes:
•
Performing risk assessments.
•
Training Board Members.
•
Conduct penetration testing.
•
Facilitate a common awareness campaign in all portfolio companies.
Responsible Investments
New Investments
MATERIALITY
Arendals Fossekompani is looking for potential investments within green energy
and technology that can support our long-term ambition to have a portfolio that will
stand the test of generations, that contributes to a sustainable society, and that is
future-oriented.
As part of our screening criteria, new investments should demonstrate a potential
to contribute to, or to be transformed to contribute to, one of the six environmental
objectives deﬁned by the EU Taxonomy. As far as our impact assessment shows,
neither Arendals Fossekompani nor our business partners have a negative impact
on this topic.
APPROACH
As an international industrial investment company, Arendals Fossekompani is
continuously looking for new investments and M&A opportunities. Possible invest-
ments, partnerships and M&A candidates are evaluated according to Arendals
Fossekompani’s responsible investment scope and screening process. Investment
possibilities that are not in line with our investment criteria and company strategy,
will not be considered. Investments and acquisitions of companies lay the foundation
for a positive sustainability impact in the management phase.
Following our strategy, Arendals Fossekompani’s investments are focused on the
areas green energy, electriﬁcation and materials and digitalisation. With investment
and development goals within these sectors, our portfolio will contribute to a more
sustainable future.
A signiﬁcant part of onboarding a new investment to our sustainability framework
is to perform an EU Taxonomy assessment. Such an assessment will deﬁne if the
investment’s activities are eligible with the EU Taxonomy criteria.
PERFORMANCE
In 2022, Arendals Fossekompani established the battery technology company
Ampwell, which consists of the newly acquired companies Commeo and Cellect.
Ampwell has the potential to become an attractive partner in the green transition
based on the company’s fully integrated energy storage services. Commeo’s battery
solutions are enabling increased use of intermittent renewable energy and Cellect’s
software services increase energy efficiency. Ampwell has performed assess-
ments for EU Taxonomy eligible and aligned activities for their subsidiary company
Commeo. Based on this assessment, 100% of Commeo’s revenue was found to be
aligned with the EU Taxonomy.
The strategic green energy enabler Vergia was established in 2022 to combine all
existing green infrastructure projects and related portfolio companies in a new
entity. Vergia has invested in offshore wind, green fuels, and hydropower, and there-
fore has attractive energy positions driving the green transition.
During 2022, Arendals Fossekompani has also improved its position in the electri-
ﬁcation segment by acquiring the induction charging company IPT Technology. By
merging our portfolio company EFD Induction and IPT Technology, we established
the induction company ENRX. These companies have now been rebranded to ENRX
Heat and ENRX Charge. ENRX Charge solutions for wireless and dynamic charging
enable electriﬁcation of new sectors, both within industrial and mobility segments.
ENRX Charge has identiﬁed six eligible activities, of which ﬁve are categorized in the
environmental objective climate change mitigation. The last one is categorized in the
transition to a circular economy category.
114
115
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
All these new investments are all well positioned for the green transition, in line with
our investment and development strategy, and have high eligibility towards the EU
Taxonomy.
LOOKING FORWARD
Going forward, we will continue to develop our newly established companies, includ-
ing our new investments. The new companies are onboarded to our sustainability
framework, to ensure continuous focus. For future investments, we will continue to
have the same long-term ambition. The EU taxonomy eligibility and alignment will be
a part of the investment criteria. In addition, we will include climate risk assessments
as part of the due diligence process of future possible investments.
Green Financing
MATERIALITY
Arendals Fossekompani aims to be a leading Norwegian industrial investment com-
pany that promotes renewable energy and sustainable utilization of resources. Green
investments and projects provide us with ﬁnancing agreements with favourable
terms, which incentivise us to stay focused on green developments. In this manner, the
green ﬁnancing criteria are important for future investments and potential projects.
In addition, being granted green ﬁnancing will be seen as a quality sign by stakeholders.
Our impact assessment shows that Arendals Fossekompani does not have an actual
or potential negative impact on this topic.
APPROACH
Arendals Fossekompani has two different green ﬁnancing facilities: Green bonds
and sustainability linked loans. Our Green Bond Framework is aligned with the Green
Bond Principles published by the International Capital Market Association. This
deﬁnes investments eligible for green bonds. In addition, Arendals Fossekompani
has renewed its ﬁnancial facilities linked to sustainability targets.
Green bond loans are earmarked for speciﬁc environmental or sustainability projects
and are typically asset-linked. The Green Bond Framework has deﬁned a process
used to identify, select, and report on eligible projects. Issuing bonds under the Green
Bond Framework is part of our broader commitment to making signiﬁcant contribu-
tions to a low-carbon and environmentally sustainable society.
The green bonds are related to two categories: Renewable energy and eco-efﬁcient
and/or circular economy adapted products, production technologies and processes.
A renewal of Arendals Fossekompani’s ﬁnancing facilities was ﬁnalized in June 2022.
This agreement is linked to our sustainability strategy and performance related to
a selection of sustainability targets. Through sustainability linked loans, companies
receive better ﬁnancial terms as they strive to make a planet-positive contribution.
If and when we reach the agreed-upon targets, it will trigger a lower interest rate.
The discount is in itself small, but the principle of being rewarded for continuously
improving our sustainability position is important to us.
PERFORMANCE
Arendals Fossekompani currently has a positive net cash position. However, it is
essential to have instruments in place to provide ﬁnancial capacity when needed,
for instance to make new acquisitions or to support the existing portfolio companies.
Thus, three new revolving loan facilities are provided by Handelsbanken and Danske
Bank for a duration of ﬁve to seven years, including options for extensions. Currently,
88% of our loan facilities have a green proﬁle.
LOOKING FORWARD
Our goal is to develop green and sustainable companies. We will continue to ﬁnance
projects and developments that support our ambitions, so that we remain a leading
Norwegian industrial investment company. We will continuously follow up on our goal
to have loan facilities with a green proﬁle. In 2023, we will publish a report on use of
proceed related to the green bonds and follow up KPIs and report on requirements
of sustainability linked loan to our stakeholders.
116
117
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Optimizing the
Portfolio Companies
Economic Performance
MATERIALITY
Sustainability is linked to long-term performance; this is a clear belief of both
Arendals Fossekompani and our main stakeholders. It is a long-term goal for Arendals
Fossekompani to link our sustainability actions to the economic performance we see
in the group.
Generally, the green revolution is characterized by regulations and market and
technology risks and opportunities. These are necessities for achieving the ambi-
tions of climate mitigation in society. New regulatory requirements, such as the EU
Taxonomy and circular economy reporting, as well as strict regulations for mineral
mining, poses a risk to many businesses. A more volatile energy market and increas-
ing energy prices, due to increased renewable energy production and carbon taxes,
affect businesses that are heavily dependent on electricity. Finally, and perhaps most
prevalent in the green transition, is the need for a technological restructuring of the
energy market, phasing out fossil fuels, and an increased emphasis of low impact-
and zero-emission technologies. This creates valuable opportunities for an industrial
investment company like ours.
APPROACH
Our actual and potential impact relating to economic performance is mainly positive:
As an owner and a parent company we engage directly in the sustainability perfor-
mance of our portfolio companies, and through individual materiality assessments
and climate risk analysis, we focus on material topics that will increase our economic
performance and reduce the risks in the portfolio. We recognise the impact compa-
nies have on the environment and consider environmentally sustainable business
conduct as an opportunity to ensure long-term performance and growth.
Arendals Fossekompani is committed to environmental sustainability in all our busi-
ness decisions and operations, and our Environmental Policy has been adopted by
the Board of Directors and is applicable to all employees and projects. We have made
separate reports about the performance of the portfolio related to the EU Taxonomy
and climate risk assessment. As for the climate risk analysis, we have considered two
different scenarios: 1) a green revolution that is characterized by transition risks and
opportunities, and 2) a climate crisis scenario which entails considerable physical
risks.
Our portfolio companies are exposed to transitional risks throughout their value
chains, particularly in terms of rising energy prices, as well as prices for products and
services in the supply chain. Additionally, regulations aimed at driving the transition
to a circular economy will have an impact on the requirements our portfolio com-
panies face. Arendals Fossekompani’s exposure to physical risks is largely through
our supply chains, with tier 2 and tier 3 suppliers located in areas prone to extreme
weather and higher temperatures. At the customer end of our value chains, we identi-
ﬁed the potential for increased demand for the products and services of our portfolio
companies. Transitional and physical risks will create both opportunities and risks
for us. So far, our analysis gives reason to believe that there is a potential upside for
the economic performance for our portfolio with regards to transitional climate risk.
A TCFD maturity assessment has been conducted for the AFK Group. Documentation
on TCFD risk assessment performed in the group is found as an attachment to the
annual report.
PERFORMANCE
In 2022, Arendals Fossekompani Parent Company continued to support the portfolio
companies. Good collaboration resulted in several important sustainability assess-
ments being ﬁnalized. Targets and ambitions related to economic performance are
established for each portfolio company and followed up on an annual basis. The
effectiveness of the actions taken are evaluated in the annual strategy process.
Other activities conducted in 2022 includes:
•
A materiality analysis has been conducted
for seven portfolio companies and joint ventures.
•
Three joint meetings were held with sustainability teams
of portfolio companies to share knowledge and information.
•
A joint EU Taxonomy project was arranged for all portfolio companies.
•
A TCFD assessment report was established.
LOOKING FORWARD
The following activities have been planned for 2023:
•
Strengthening our EU Taxonomy assessment.
•
Digitalizing our sustainability reporting.
•
Further investigate and, in time, report in accordance
with the Corporate Sustainability Reporting Directive (CSRD).
Strengthening Environmental Performance
MATERIALITY
As an industrial investment company, Arendals Fossekompani has a double value
chain, ﬁrst the value chain as an investment company and then the speciﬁc value
chain for each portfolio company. The most material topic will be how we work with
and improve our portfolio companies. To address the adverse impact of our portfolio,
we do materiality updates of all our portfolio companies. Common denominators for
the group are GHG emissions, use of energy, and waste management. In a diverse
portfolio these topics are regarded as the most material KPIs to follow up across
companies. Each portfolio company also performs its own materiality analysis in
order to follow up the environmental performance that is the most material for their
business.
APPROACH
Continuously strengthening the sustainability performance is essential for optimis-
ing our portfolio of green-tech companies. Arendals Fossekompani seeks to achieve
long-term value through our investments. Crucial to our long-term success is a solid
sustainability framework, ensuring proper governance and compliance, a great
working environment, and a focus on our contribution to the green transition. All our
investments are subject to a sustainability onboarding processes, which include an
initial materiality assessment and the identiﬁcation of sustainability focus areas for
the company.
Once onboarded, our portfolio companies are integrated in the annual sustainability
assessments and reporting processes. To be aware of risks and opportunities, we
conduct climate risk assessments of all our companies annually. Each year, we will
also be screening eligibility and alignment with the EU Taxonomy Regulations for all
companies.
118
119
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
1.
Former portfolio company, Cogen, is not included. EFD Induction did not report GHG emissions in 2020.
GHG EMISSIONS
1
2020
2021
2022
ENERGY CONSUMPTION
2021
2022
Carbon accounting is a fundamental tool in identifying tangible measures to
reduce GHG emissions. Our annual Carbon Accounting Report enables Arendals
Fossekompani to benchmark performance indicators and evaluate progress over
time for all portfolio companies. From the nature of the businesses
in the AFK Group
comes that we have not registered any biogenic CO
2
-emissions in 2022. None of our
businesses are involved in processing of biologically based materials.
Our Carbon Accounting Report for 2022 has been compiled with assistance from
CEMAsys and is based on the international standard; A Corporate Accounting and
Reporting Standard, developed by the Greenhouse Gas Protocol Initiative (GHG
Protocol). The GHG Protocol is the most widely used and recognised international
standard for measuring greenhouse gas emissions (GHG) and is the basis for the
ISO standard 14064-I.
Our Carbon Accounting Report provides an overview of the group’s GHG emissions,
which is an integrated part of Arendals Fossekompani’s climate strategy. In order to
strengthen the sustainability performance of our portfolio companies, we monitor
GHG emissions for Scope 1 and Scope 2 , in addition to a limited Scope 3 reporting.
All emissions data are provided on a group level, using the operational control
method. 2021 is chosen as the base year for emissions in AFK Group, since emissions
from ENRX (former EFD Induction) was not included in the emissions data collected
in 2020. Reported emissions are based on all known emissions, which are docu-
mented by invoices. Emissions are assumed to be based on all purchases made in
2022. The assumptions and emission factors used for calculations are included in
the Carbon Accounting Report 2022.
PERFORMANCE
Scope 1 includes all direct emission sources. For the group, we are reporting emis-
sions related to transportation, chemical processes, stationary combustion, and
refrigerants, which amounted to 1,614 tons of CO
2
e in 2022.
Scope 2 includes indirect emissions related to purchased energy; electricity and
heating/cooling where the organisation has operational control. For the group, we
are reporting emissions related to electricity use, district heating, and electrical
vehicles. Using a location based approach
1
, this amounted to 2,447 tons of CO
2
e in
2022. With market based electricity calculations, the total Scope 2 is 4,052.7 tons
of CO
2
. The electricity emission factors used are based on national gross electricity
production mixes from the International Energy Agency’s statistics (IEA Stat), and
emission factors per fuel type are based on assumptions in the IEA methodological
framework. Factors for district heating/cooling are either based on actual (local) pro-
duction mixes, or average IEA statistics.
In 2022 the total amount of energy produced from these two hydropower plants
was 351 GWh, this equals the amountof energy sold in the power market. Total pro-
duction of energy from the AFK Group, equals the production from our hydropower
plants at Bøylefoss and Flatenfoss. Total use of energy in AFK Group is
equals energy
consumption minus energy sales: 26 GWh-351 GWh= -325 GWh. The energy con-
sumptions is the sum of the energy consumption of AFK Parent Company and all the
portfolio companies. The two major energy
consumers of the portfolio companies in
the group is ENRX and Tekna, which both have industrial processes that require use
of energy in order to produce their end products. The rest of the portfolio companies
are less material energy consumers, since their consumptions mostly are related to
use of energy in ofﬁce buildings and in transportations, with some exceptions.
Scope 3 includes indirect emissions resulting from value chain activities. The Scope
3 emissions are a result of the upstream and downstream activities, which are not
controlled by the company, i.e. they are indirect. For the group, we are reporting
Scope 3 emissions related to waste generation and management, other fuel- and
energy related activities, business travel and employee commuting, which amounted
to 3,394 tons of CO
2
e in 2022.
In total, Arendals Fossekompani and its portfolio companies emitted 7,455 tons of
CO
2
e in 2022. Using a market-based approach, this amounts to 9,061 tons of CO
2
e.
In 2022, several sustainability projects were carried out together with our portfolio
companies:
•
Sustainability onboarding of new AFK investments marked the initial
implementation of sustainability frameworks for several companies.
•
An initial assessment of the EU Taxonomy gave us
an indication of eligibility and alignment of our portfolio.
•
Climate risk assessments, based on TCFD recommendations, helped
identify material risks and opportunities in our portfolio companies.
LOOKING FORWARD
We will continue to work together with our portfolio companies to support their sus-
tainability efforts and encourage improvements in their materiality assessments.
Our objective is to be in full compliance with the EU Taxonomy, and we will map the
consequences and changes necessary for our reporting requirements to be accord-
ing to the new sustainability reporting directives.
In 2022, Arendals Fossekompani committed to and submitted science-based emis-
sion reduction targets, in line with the Science Based Target initiative (SBTi) criteria
and recommendation. The targets will be validated in 2023, and after this, we will
continue to report on our emissions and progress towards meeting our 2030 targets.
Arendals Fossekompani are committed to reducing absolute Scope 1 and Scope 2
GHG emissions from 2021 level by 42% by 2030. The following activities are planned
for 2023:
•
Map the ﬁnancial implications of climate risk and opportunities,
as well as mapping the costs we have taken to manage such risks.
•
Map other important adverse environmental impacts in the portfolio.
•
Follow up on our commitment to the Science Based Targets initiative.
Scope 1 emissions
(tCO
2
e)
Scope 2 emissions
(Location based) (tCO
2
e)
Scope 3 GHG
(tCO
2
e)
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
656
237.5
175.4
1,581
2,823
1,276
1,614
2,447
3,394
21,000
22,000
23,000
24,000
25,000
26,000
27,000
24,449
25,859
MWh
120
121
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
A Great Place to Work
Diversity and Equality
MATERIALITY
In Arendals Fossekompani, we believe that a workforce with a wide array of skills and
backgrounds drives productivity and performance.
We are mindful that if not managed correctly, Arendals Fossekompani could have
a potential negative impact on diversity and equality. That is why this is a strategic
focus area not only for us, but also for each of the portfolio companies that Arendals
Fossekompani is invested in. Ensuring a diverse and equal workplace is also men-
tioned in our Code of Conduct, to which all portfolio companies are expected to
adhere.
Today, Arendals Fossekompani’s actual and potential impact on diversity and equal
opportunity is ﬁrst and foremost positive: We are a global company empowered by
a diverse workforce of 2,445 employees from 25 countries. The number of female
employees is steadily increasing and women are ﬁlling important roles across our
global portfolio. This is important for our future value creation both in the short,
medium and long term.
Our ambition is to preserve and continue to build an inclusive company
culture with zero tolerance for discrimination, whether it is based
on grounds of
gender, age, disability, ethnicity, sexual orientation, or religious belief.
APPROACH
In 2022, Arendals Fossekompani Parent Company carried out a project to address
the Norwegian Equality and Anti-Discrimination Act and Arendals Fossekompani’s
Activity and Reporting Obligation. This work resulted in a separate report where
we map the status of equality and diversity. The Activity and Reporting Obligation
Report is also linked to the certiﬁcation program Equal Workplace. The report is
found on our webpage.
We regularly check in with the portfolio companies to ensure that they are in com-
pliance with relevant laws and regulations regarding equality and diversity, and we
encourage portfolio companies to conduct their own mapping in accordance with
the Activity and Reporting Obligation, to discover the status of diversity and equality
in their own organisations. Our Code of Conduct was updated in 2022 to comply
with the latest version of the Norwegian Equality and Anti-Discrimination Act, and
all portfolio companies are expected to adhere to the Code of Conduct and its guide-
lines for equality, inclusion and non-discrimination. For more information on how we
engage with the speciﬁc portfolio companies, please refer to the Optimizing Portfolio
Companies chapter of this report.
To reﬂect our global operations, we have used the regions Europe, America, and Asia
as signiﬁcant location of operation. Several of our portfolio companies have more
speciﬁc indicators on diversity, where diversity in nationalities is the most used.
Arendals Fossekompani is certiﬁed according to Equal Workplace (Likestilt Arbeidsliv),
a certiﬁcation scheme run by Agder County.This is a certiﬁcation that needs to be veriﬁed
every three years. It facilitates continuous work with equality and diversity in the
workplace and guides the certiﬁed organisations in the right direction with deter-
mined focus areas and criteria. Our certiﬁcation has resulted in the establishment of
an action plan for equality and diversity efforts, with targets for 2022 through 2025.
We have already set up a new HR system as a part of our action plan, to secure equal
follow-up by all employees.
The work we have done to address both the The Equality and Anti-Discrimination
Act and the Equal Workplace certiﬁcation, will be a great guidance and roadmap in
continuing our journey towards better inclusion and greater diversity.
PERFORMANCE
AFK Group has conducted a survey in all portfolio companies to gather the informa-
tion presented in the table Employee Diversity. GRI’s deﬁnitions of full-time, part-
time, permanent, and temporary employee has been used.Compared to 2021, the
number of employees in AFK Group has increased. This is mainly due to acquisi-
tion of IPT Technology, establishment of Ampwell and acquisition of Commeo, and
many new hires in Alytic.ENRX, Ampwell, Alytic and NSSLGlobal have workers with
non-guaranteed hours. Information about gender and region could not be obtained
for 2022.
In 2021, we deﬁned speciﬁc goals for gender equality, applicable for the entire group
of AFK companies. Gender equality is measured at three corporate levels: Board of
Directors, C-suite positions, and total work force. At year-end 2022, there were 28%
women on our Boards, 14% women in C-suite positions and 20% women in the total
work force. The decrease of 2% of women on the Boards is the result of three new
companies that have been included in the portfolio during 2022. These companies
do not yet have a full Board in place, leaving the CEOs as Chair of the Boards as of
now. If we exclude these newly acquired companies, the percentage of women on
the Boards would be 30%.
Annual total compensation for the highest paid individual (CEO) was NOK 7,665,484
in 2022 (percentage decrease from 2021: 16.18%). Annual total compensation for all
employees was NOK 629,672 in 2022 (percentage increase from previous report-
ing period is not reported as we did not collect this information for 2021). The ratio
between the annual compensation for the highest paid individual and the average
annual compensation for employees is 8.2%. For more information regarding remu-
neration, please refer to the separate Remuneration report.
In November 2022, we hosted a Girls & Technology event in cooperation with The
Confederation of Norwegian Enterprises (NHO). The project aims to increase the
number of girls in technical education and professions and raise awareness about
technical ﬁelds of study. By sharing our personal and company stories we hope to
inspire these young girls, and perhaps welcome them as future employees in a few
years.
LOOKING FORWARD
As part of the Equal Workplace certiﬁcation process, an action plan is developed
for the next three years. The goals set during the certiﬁcation process are related
to topics such as inclusive working environment, recruitment and career, and life
phases. The goals include creating and improving routines for a better follow-up of
employees in different life situations, training of leaders in managerial positions, pro-
fessionalising the recruitment processes, increasing knowledge about equality and
diversity, and generally raising the quality of internal processes related to equality
and diversity.
Our portfolio companies are encouraged to work towards achieving the Equal
Workplace certiﬁcation, and we will create learning sessions on equality and diver-
sity for all portfolio companies.
Our
target is to achieve a share of 50% women in all our boards and C-suite positions
by 2027.
122
123
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
EMPLOYEE DIVERSITY
All numbers are per 31.12.2022
Age group (AFK Group total):
< 30 years
30-50 years
> 50 years
Female
495 (20%)
96 (4%)
277 (11%)
122 (5%)
Male
1,956 (80%)
322 (13%)
1,082 (44%)
552 (23%)
Total
2,451
418 (17%)
1,359 (55%)
674 (27%)
Age group (full-time employees):
< 30 years
30
-50 years
> 50 years
Female
438 (19%)
85 (4%)
251 (11%)
102 (4%)
Male
1,863 (81%)
279 (12%)
1,061 (46%)
523 (23%)
Total
2301
364 (16%)
1,312 (57%)
625 (27%)
Age group (part-time employees):
< 30 years
30
-50 years
> 50 years
Female
57 (38%)
11 (7%)
26 (17%)
20 (13%)
Male
93 (62%)
43 (29%)
21 (14%)
29 (19%)
Total
150
54 (36%)
47 (31%)
49 (33%)
Age group (permanent employees):
Europe
America
Asia
Female
475 (21%)
81 (4%)
274 (12%)
120 (5%)
Male
1,794 (79%)
256 (11%)
997 (44%)
541 (24%)
Total
2269
337 (15%)
1,271 (56%)
661 (29%)
Age group (temporary employees):
Europe
America
Asia
Female
22 (12%)
18 (10%)
2 (1%)
2 (1%)
Male
160 (88%)
73 (40%)
80 (44%)
7 (4%)
Total
182
91 (50%)
82 (45%)
9 (5%)
Region (organisation total):
Europe
America
Asia
Female
495 (20%)
385 (16%)
53 (2%)
57 (2%)
Male
1,956 (80%)
1,342 (55%)
215 (9%)
399 (16%)
Total
2,451
1,727 (70%)
268 (11%)
456 (19%)
Region (full-time employees):
Europe
America
Asia
Female
438 (19%)
330 (14%)
53 (2%)
55 (2%)
Male
1,863 (81%)
1,262 (55%)
213 (9%)
388 (17%)
Total
2301
1,592 (69%)
266 (12%)
443 (19%)
Region (part-time employees):
Europe
America
Asia
Female
57 (38%)
55 (37%)
0 (0%)
2 (1%)
Male
93 (62%)
80 (53%)
2 (1%)
11 (7%)
Total
150
135 (90%)
2 (1%)
13 (9%)
Region (permanent employees):
Europe
America
Asia
Female
475 (21%)
368 (16%)
53 (2%)
54 (2%)
Male
1,794 (79%)
1,218 (54%)
215 (9%)
361 (16%)
Total
2,269
1,586 (70%)
268 (12%)
415 (18%)
Region (temporary employees):
Europe
America
Asia
Female
21 (12%)
19(10%)
0 (0%)
3 (2%)
Male
155 (88%)
122 (67%)
0 (0%)
38 (21%)
Total
182
141 (77%)
0 (0%)
41 (23%)
DIVERSITY OF GOVERNANCE BODIES
Board of Directors
< 30 years
30-50 years
> 50 years
Female
16 (28%)
0 (0%)
9 (16%)
7 (12%)
Male
41 (72%)
0 (0%)
13 (23%)
28 (50%)
Total
2445
0 (0%)
22 (39%)
35 (61%)
C-suite positions
< 30 years
30
-50 years
> 50 years
Female
8 (14%)
0 (0%)
5 (9%)
3 (5%)
Male
49 (86%)
0 (0%)
26 (46%)
23 (40%)
Total
57
0 (0%)
31 (54%)
26 (46%)
Executive level management
< 30 years
30-50 years
> 50 years
Female
34
(21%)
2 (1%)
26 (16%)
6 (4%)
Male
132 (79%)
2 (1%)
78 (47%)
52 (31%)
Total
166
4 (2%)
104 (63%)
58 (35%)
Organisation total
< 30 years
30-50 years
> 50 years
Female
495
95 (4%)
277 (11%)
122 (5%)
Male
1956
322 (13%)
1,082 (44%)
552 (23%)
Total
2,441
418 (17%)
1,359 (55%)
674 (27%)
EMPLOYEE FUNCTIONS
Technical and production functions
< 30 years
30-50 years
> 50 years
Female
223
48 (3%)
133 (8%)
42 (3%)
Male
1,447
239 (14%)
821 (49%)
387 (23%)
Total
1670
287 (17%)
954 (57%)
429 (26%)
Administrative functions
< 30 years
30-50 years
> 50 years
Female
201 (50%)
28 (7%)
116 (29%)
57 (14%)
Male
199 (50%)
19 (5%)
109 (27%)
71 (18%)
Total
400
47 (12%)
225 (56%)
128 (32%)
Other functions
< 30 years
30-50 years
> 50 years
Female
32 (20%)
7 (4%)
19 (12%)
6 (4%)
Male
132 (80%)
13 (8%)
80 (49%)
39 (24%)
Total
164
20 (12%)
99 (60%)
45 (27%)
124
125
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
REMUNERATION BETWEEN GENDERS AND EMPLOYEE CATEGORY
Europe
America
Asia
Job function
#
NOK
#
NOK
#
NOK
C-suite men
Remuneration
23
2,346,813
1
-
1
-
Salary
36
1,839,879
*
*
*
*
C-suite women
Remuneration
-
-
-
-
-
-
Salary
6
1,559,676
-
-
-
-
C-suite ratio
women to men
Remuneration
-
-
-
-
-
-
Salary
-
85%
-
-
-
-
BoD men
Remuneration
17
233,840
-
-
-
-
Salary
6
400,383
-
-
-
-
BoD women
Remuneration
8
535,353
-
-
-
-
Salary
9
411,255
-
-
-
-
BoD ratio women to men
Remuneration
-
229%
-
-
-
-
Salary
-
103%
-
-
-
-
Non-executive women
Remuneration
63
643,492
3
-
2
-
Salary
77
641,943
*
*
*
*
Non-executive men
Remuneration
192
787,941
9
1,246,501
10
1,211,055
Salary
258
726,486
9
1,004,477
10
893,871
Non-executive ratio
women to men
Remuneration
-
82%
-
-
-
-
Salary
-
88%
-
-
-
-
Technical and production
men
Remuneration
462
538,491
172
636,117
331
249,316
Salary
829
598,264
172
502,710
331
215,201
Technical and
production women
Remuneration
44
567,181
35
590,419
20
96,008
Salary
136
639,336
35
487,526
20
72,799
Technical and production
ratio women to men
Remuneration
-
105%
-
93%
-
39%
Salary
-
107%
-
97%
-
34%
Administrative men
Remuneration
97
865,812
25
822,782
43
136,455
Salary
110
766,403
25
650,212
43
103,394
Administrative women
Remuneration
105
485,391
18
882,892
32
105,465
Salary
136
486,435
18
719,370
32
88,624
Administrative ratio
women to men
Remuneration
-
56%
-
107%
-
77%
Salary
-
63%
-
111%
-
86%
Other functions men
Remuneration
32
1,052,140
8
937,635
9
574,471
Salary
83
732,272
8
781,368
9
509,984
Other functions women
Remuneration
7
1,291,617
2
-
-
-
Salary
12
793,753
*
*
-
-
Other functions
ratio women to men
Remuneration
-
123%
-
-
-
-
Salary
-
108%
-
-
-
-
* Not displayed salary/remuneration of employee categories with less than 5 employees.
NON-DISCRIMINATION
Total number of incidents of discrimination during the reporting period
2
Incident reviewed by the organization
1
Remediation plans being implemented
1
Remediation plans that have been implemented, with results
reviewed through routine internal management review processes
1
Incident no longer subject to action
1
Employee Satisfaction & Talent Attractiveness
MATERIALITY
Arendals Fossekompani aspires to be a preferred employer. It is important to retain
knowledge and experience in the company, in addition to attracting new talents.We need
great people to help develop and advise our portfolio companies, based on knowledge
about new technologies. This is why ‘Great Place to Work’ is singled out as a strategi-
cally important focus area, and why employee satisfaction and talent attractiveness
is a material topic.
Arendals Fossekompani’s actual and potential impact on employee satisfaction and
talent attractiveness can be both positive and negative. Poor management of the
working environment can potentially lead to dissatisfaction, high turnover rate or
sick leave, and failure to attract the talents we need. On the other hand, establish-
ing clear guidelines for management and employees, and implementing measures
aimed at enhancing the working environment and employee satisfaction, can make
Arendals Fossekompani and our portfolio companies a preferred employer and a
workplace where employees thrive and succeed.
APPROACH
At Arendals Fossekompani we offer favourable working conditions for our employ-
ees: We provide learning opportunities and contribute to the development of our
employees’ careers, and we provide our employees with ﬂexibility, adjust tasks,
working hours etc. if needed. The feedback we receive is that this gives room to
combine a working life and a family life. We are currently in the process of mapping
employee beneﬁts in Arendals Fossekompani’s portfolio companies, including ben-
eﬁts provided to full-time employees that are not provided to temporary or part-time
employees.
As part of our Equal Workplace certiﬁcation, we developed an action plan for the
topic “Recruitment and career”, focusing on professionalising the recruitment pro-
cess, boosting attractiveness towards new talents, as well as developing the com-
petencies of our employees. Another topic is “Life phases” which addresses different
life situations employees can ﬁnd themselves in, and where they need support, for
example maternity/paternity leave, welfare leave, retirement, and more.
We strive for employee satisfaction and the highest possible talent attractiveness
across the portfolio. We regularly follow-up our portfolio companies to see how
they are doing.
126
127
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
NEW EMPLOYEE HIRES AND EMPLOYEE TURNOVER
New employee hires
Total
< 30 years
30-50 years
> 50 years
Female
132 (25%)
48 (9%)
68 (13%)
16 (3%)
Male
395 (75%)
163 (31%)
197 (37%)
35 (7%)
Total
527
211 (40%)
265 (50%)
51 (10%)
New hires per region
Total
Europe
America
Asia
Female
132 (25%)
108 (20%)
15 (3%)
9 (2%)
Male
395 (75%)
295 (56%)
41 (8%)
59 (11%)
Total
527 (22%)
403 (76%)
56 (11%)
68 (13%)
Employee turnover
Total
< 30 years
30-50 years
> 50 years
Female
95 (19%)
21 (22%)
41 (15%)
33 (27%)
Male
285 (15%)
66 (21%)
150 (14%)
69 (13%)
Non-binary
1 (-)
0 (0%)
1 (-)
0 (0%)
Total
381 (16%)
87 (21%)
192 (14%)
102 (15%)
Employee turnover per region
Total
Europe
America
Asia
Female
95 (19%)
72 (19%)
14 (26%)
9 (16%)
Male
285 (15%)
199 (15%)
51 (24%)
35 (9%)
Non-binary
1 (-)
1 (-)
0 (0%)
0 (0%)
Total
381 (16%)
272 (16%)
65 (24%)
44 (10%)
Turnover calculated as number of employees leaving divided by
number of employees in the organisation for each employee category.
Health and Safety
MATERIALITY
Healthy and safe working conditions are recognized as a human right and addressed
in authoritative intergovernmental instruments. Healthy and safe working condi-
tions are also a Sustainable Development Goal. Healthy and safe working conditions
involve both the prevention of physical and mental harm, and promotion of workers’
health.
Failure to ensure healthy and safe working conditions could lead to an actual or
potential negative impact, in which employees are harmed or injured while at work.
In the most severe cases, unsafe working conditions could lead to long-term reduced
health or even fatalities, which is an unacceptable risk.
APPROACH
Arendals Fossekompani aims to have a positive impact on occupational health and
safety, and this is a key priority and a strategic focus across our portfolio. We are
committed to providing a healthy and safe working environment for all employees,
and have conducted risk assessments, implemented guidelines, established man-
agement systems, and provided training to management and employees to prevent
harm and promote health in the workplace. Our policies on health and safety are
addressed in our Code of Conduct, which all our employees (100%) have signed,
and which is also extended to our suppliers through our Business Partner Code of
Conduct.
PERFORMANCE
Occupational health and safety management system
AFK Vannkraft has implemented a comprehensive internal control system, as required
by law (the Norwegian Internal Control Regulations (Interkontrollforskriften)).
Through the implementation of the occupational health and management system,
we aim to protect people’s lives and health, to protect nature and the environment
against unintended stresses, to protect facilities, equipment and production, and to
ensure a targeted and cost-effective operation.
All of our hydropower plant workers
are included in the occupational health and
safety management system. The main activities at the plants are to generate elec-
tricity at two locations in the Arendal watercourse, whereas the activities related to
the production of hydropower are the main scope for the health and safety manage-
ment system.
Hazard identiﬁcation, risk assessment, and incident investigation
To identify work-related hazards and assess risks on a routine basis, AFK Vannkraft
conducts risk and vulnerability analysis for continuous work by identifying and elim-
inating hazards, assessing risks and implementing improvement measures. These
analyses are reviewed annually and audited when needed, and actions are taken to
minimise the identiﬁed hazards and risks. Another measure to identify work-related
hazards and assess risks, is the weekly safety rounds on the hydropower plant, in
addition to a more comprehensive annual safety round on-sight. We also perform
a safe work analysis before starting a job that is not described in a policy, to secure
health and safety in every job execution. Employees’ job descriptions contains
deﬁned safety roles for each speciﬁc area of the on-site hydropower workers.
To identify work-related hazards and assess risks on a non-routine basis, AFK
Vannkraft has established a whistleblowing system for employees to report inci-
dents and irregularities, including situations that can potentially cause injury and
ill health. This system also allows anonymous reporting of incidents. The process of
reporting is described in the Whistle Blowing Policy which is found on our webpage.
There is also a system for registration of any identiﬁed discrepancy that is identiﬁed.
PERFORMANCE
Our goal for the Arendals Fossekompani Group in 2022 was to have less than
3% absentee rate, the actual number was 3.0%. The turnover rate for Arendals
Fossekompani Group was 16% in 2022. The total number of new hires was 165,
and the total number of employees leaving the Group was 137. The total number of
employees who took parental leave during the year was 89, of which 30 were women
and 59 were men.
As part of our work on employee satisfaction and talent attractiveness, we have pro-
fessionalized our recruitment processes. These efforts have extended into a process
of implementing a new recruitment system. We also increased employee beneﬁts.
LOOKING FORWARD
Improvement plans for 2023 include the implementation of a new HR system for
better structures for performance reviews and check-ins, updated job descriptions
for all employees, and policies for parents-to-be, employees on parental leave, and
senior employees. We will also acquire a recruitment/applicant tracking system, and
include templates for pre-, on- and off-boarding in the HR system. We will ensure that
we have good structures for deciding salary and salary reviews to prevent system-
atic differences and implement an employee handbook as part of the HR system.
A HR group will be formed to share knowledge across the portfolio companies, work
together to reach long-term goals, and achieve synergies across industries.
128
129
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Every inquiry or reported incident in these systems are treated by management and
followed up with concrete actions.
The results of these measures are evaluated and reviewed on a regular basis, in order
to improve both the occupational health and safety management system, as well as
the measures taken.
Occupational health services
Arendals Fossekompani has established an occupational health services agreement
with Avonova Helse, where a cooperation plan has been developed for activities
designed to meet our HSE goals. Arendals Fossekompani has a zero vision for injuries
and work-related sick leave. These activities have been implemented to meet this
goal: regular risk assessments, training, and evaluation. As part of the risk assess-
ment, employees are offered health checks, including a hearing and sight check. For
training, a ﬁrst aid course is held annually for employees in AFK Vannkraft. For evalua-
tion, cooperation meetings are conducted. Avonova is supporting with safety rounds
and measurements and risk assessments for employees located at Bøylefoss.
During 2022, Avonova assisted us with several activities. An occupational hygienist
did a safety round and risk assessment at Bøylefoss. An HSE review was conducted,
and an occupational hygienist gave advise with regards to drafting an instruction on
the use of acid washing. In total ten health checks were conducted with employees
at Bøylefoss and four health checks were conducted with employees in Arendal.
Worker participation, consultation, and
communication on occupational health and safety
Employee elected safety representatives at Arendals Fossekompani participate
in the consultation and implementation of the occupational health and manage-
ment system These representatives receive training through a dedicated course for
safety representatives. The representatives are conducting safety rounds annually
to ensure that all safety standards are fulﬁlled. To be able to receive input from all
employees, a suggestion box is placed out in the hydropower station where employ-
ees anonymously can give feedback and improvement suggestions.
During the health checks with the occupational health services, a survey is con-
ducted where topics such as working environment and social conditions are covered.
An ergonomics review, which includes a workstation check, is scheduled annually.
Finally, an assessment of light and noise is regularly conducted.
An HSE group is established and consists of two worker representatives and two
representatives from the management. For Arendals Fossekompani, this includes a
safety representative and a union representative. The CEO and the operations man-
ager represents the management. The HSE group is an arena for exchange of expe-
rience and consultancy. The group can discuss any question related to employee
wellbeing, working environment and safety - and recommend solutions. However, it
is the organisation which is responsible for implementing the solution. The group is
also assisting with training for the organisation. The HSE group normally meet twice
a year
or when needed.
Worker training on occupational health and safety
A ﬁrst-aid course with focus on electrical incidents is conducted annually. In 2022
this was done in March. For personnel conducting work in overhead line installations,
a course must be carried out yearly. A ﬁre drill is conducted every second year. For
employees that are particularly exposed (e.g. employees that are working in a heated
environment, at heights / on scaffolds), necessary courses are provided.
Promotion of worker health
All employees are yearly offered ﬂu vaccines. In 2022, the occupational health ser-
vices provided vaccines for employees both in Arendal and at Bøylefoss. All employ-
ees are covered by the company’s health insurance. This insurance covers expenses
for treatments of work-related illness or injuries. In addition, employees are covered
by the company’s work illness insurance, leisure accident insurance, collective acci-
dent insurance, group life insurance, and travel insurance. All employees are offered
health check-ups with focus on lifestyle. This health check-up gives employees
advise on lifestyle topics such as diets and workouts.
Prevention and mitigation of occupational health and
safety impacts directly linked to business relationships
The Business Partner Code of Conduct is based on the ten Principles of the United
Nations Global Compact concerning human rights, labour rights, environmental
responsibility and anti-corruption, and aims to prevent and mitigate negative occu-
pational health and safety impacts that are directly or indirectly linked to our opera-
tions, products, or services by our business partners.
Extract from the Business Partner Code of Conduct: “AFK does not accept any invol-
untary labour and expects all its business partners to comply with all fundamental
labour rights and applicable laws and regulations. Business partners shall ensure fair
salaries, safe working conditions (including necessary supervision and protection
from ﬁre and other dangers), the right to organize, a good workplace environment,
and have in place a whistleblowing procedure for the reporting concerns by employ-
ees.”
“AFK and its business partners shall comply with applicable laws and regulations
regarding the use, prohibition and restriction of hazardous substances and shall
avoid the use of conﬂict materials, i.e. materials that originate from conﬂict areas
and contribute to fund governments and movements which violate fundamental
human rights.”
ENRX
Vergia
Ampwell
Tekna
AFK
Property
Alytic
NSSL
Global
Volue
AFK
Parent
Company
The number and rate
of fatalities as a result
of work-related injury
0
0
0
0
0
0
0
0
0
The number and rate
of high-consequence
work-related injuries
(excluding fatalities)
0
0
0
0
0
0
0
0
0
The number of
recordable work-
related injuries
67
0
1
4
0
0
1
0
0
The rate of recordable
work-related injuries
36
0
17
11
0
0
2,4
0
0
The main types of
work-related injury
Cuts
n/a
Lacerations,
bruises
Cuts and
scratches
n/a
n/a
Minor
cuts
n/a
n/a
The number
of hours worked
1,853,609
1,907
60,720
372,839
2,978
106,493
414,497
1,262,085
54,930
130
131
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
ARENDALS FOSSEKOMPANI PARENT COMPANY
To identify work-related hazards and assess risks on a routine basis, AFK Parent
Company conducts ROS analysis (risk and vulnerability analysis) for continuous work.
To identify work-related hazards and assess risks on a non-routine basis, AFK has
established a whistle blowing system for employees to report incidents and irregu-
larities, including situations that can potentially cause injury and ill health and which
employees wish to remove themselves from. Risks identiﬁed in the risk assessment
will be used to eliminate hazards. The HSE group consists of two worker representa-
tives and two representatives from the management team, who implement changes
related to eliminating hazards. There have been no cases of high-consequence inju-
ries in the reporting period.
AMPWELL
Determination of hazards has been done by Ampwell’s safety expert through an
annual hazard assessment, and respective measures are introduced in order to shut
down and/or reduce hazards, if any. On-site inspections by the occupational safety
and health committee are taking place on a quarterly basis (participants includes
the external safety ofﬁcer, in-house safety advisers, the external company doctor,
the environmental management ofﬁcer, and head of production). Standards, meth-
odologies, and assumptions used for compiling this information includes:
•
operating manual.
•
risk assessments.
•
hazard assessment.
•
safety inspections.
•
maintenance intervals of operating plant.
•
CE-conformity of operating plant.
•
application/implementation of legal provisions from DIN EN ISO 14001.
•
training of in-house safety advisers
•
training of in-house ﬁrst aiders.
•
training of in-house ﬁre protection assistants.
•
training of in-house adviser for hazardous goods.
•
training of in-house environmental management ofﬁcer
•
training of in-house laser advisers.
•
training of in-house waste management ofﬁcers.
There have been no cases of high-consequence injuries in the reporting period.
VERGIA
There have been no cases of high-consequence injuries in the reporting period.
VOLUE
Volue’s main business relates to software development, where the risk of high-con-
sequence injuries is very low. Volue’s business related to Industrial IoT will in some
cases involve a risk of work-related hazards. These risks are determined individually
for each project based on a risk assessment, for example in the case of working with
high voltage electricity. There have been no cases of high-consequence injuries in
the reporting period.
NSSLGLOBAL
NSSLGlobal determines hazards by conducting Hazard IDs. The company conducts
risk assessments to eliminate hazards and minimize risks using the hierarchy of con-
trols. Standards, methodologies, and assumptions used to compile this information
includes ISO 45001 certiﬁed our OH&S Management System. All accidents, incidents
and near misses are recorded. There have been no cases of high-consequence inju-
ries in the reporting period.
ALYTIC
Alytic’s business relates to software development, where the risk of high-conse-
quence injuries is very low. As a result, there have been no cases of high-conse-
quence injuries in the reporting period.
TEKNA
Tekna determines hazards based on:
•
Audits made with a partner organisation specialised in prevention
that helps the company determine where measures can be taken
to assure the safety of our personnel (mutuelle de prevention).
•
Incident and accident log.
•
Employee concerns that are brought to the health and safety committee.
•
Risk analysis.
To eliminate hazards and minimize risks the company is currently working on:
•
Improvement on some machines (automation) to reduce
the human factor that may cause a potentially dangerous situation.
•
Improvement to the lock out procedure and training
to make it easier to use by employees.
•
Improvement in the work methods and training in
the machining department.
•
Improvement on the hydrogen network to make it safer.
To eliminate other work-related hazards and minimize risks, the company:
•
Complete inspection forms for the health and safety committee members.
•
Look at improvement in the daily inspection forms for lifts and hoist.
•
Adds the Prevention program on same level fall (slips/trip hazard).
Since 2022, Tekna have used OSHA standard methodologies for OHS reporting.
For example, Tekna’s internal LTIR and TRIR is calculated on a 200,000 hours basis.
There have been no cases of high-consequence injuries in the reporting period.
Workers who are not employees have been excluded from the calculations, as the
information is not tracked.
132
133
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
ENRX
ENRX have determined several hazards, mainly related to machinery used. These
hazards are mitigated by safety features at the machinery where possible and
speciﬁc safety instructions and training where not possible. IPT identify hazards
through yearly risk analyses. The results including actions taken are part of the safety
instruction for all employees. No hazards have been identiﬁed in the reporting period.
Actions are taken as part of the risk analysis and integrated into the local manage-
ment system, which includes:
•
Inspection forms for the health and safety committee members.
•
Improvement in the daily inspection forms for lifts and hoist.
•
Adding the Prevention program on same level fall (slips/trip hazard).
Since 2022, ENRX have used the OSHA standard methodologies for OHS report-
ing. For example, ENRX’ internal LTIR and TRIR is calculated on a 200,000 hours
basis. There have been no cases of high-consequence injuries in the reporting period.
Workers who are not employees have been excluded from the calculations, as the
information is not tracked.
AFK PROPERTY
To identify work-related hazards and assess risks on a routine basis, AFK Property
conducts ROS analysis (risk and vulnerability analysis) for continuous work. To iden-
tify work-related hazards and assess risks on a non-routine basis, AFK Property has
established a whistle blowing system for employees to report incidents and irregu-
larities, including situations that can potentially cause injury and ill health and which
they wish to remove themselves from. Risks identiﬁed in the risk assessment are
used to eliminate hazards. The HSE group consisting of two worker representatives
and two representatives from the management implement changes related to
eliminating hazards. There have been no cases of high-consequence injuries in the
reporting period.
LOOKING FORWARD
As part of the Equal Workplace certiﬁcation and the Activity and Reporting Obligation,
we plan to work with a HR system for AFK Parent Company that will ensure good han-
dling of health and safety. We have conducted an extensive mapping of occupational
health and safety risks linked to Arendals Fossekompani and our portfolio’s activi-
ties, and in 2023 we will also set key performance indicators that will be measured
and followed up on a regular basis. In 2023 we will evaluate the effectiveness of the
actions taken and possibly consider implementing other measures and activities.
Community Engagement
Sponsorship, Partnerships and Other Investments
MATERIALITY
Since 1896, Arendals Fossekompani has contributed to building local societies. We
are passionate about developing and contributing to sustainable local value creation,
making the Agder region more attractive to visit and move to. Our ambition is to con-
tribute to quality of life, strengthen local businesses, and attract and retain a compe-
tent workforce. We realize that contribution and participation in partnerships and local
initiatives go beyond our own business goals.
APPROACH
Arendals Fossekompani Parent Company has a positive impact on local communi-
ties through sponsorships, partnerships, and cooperation with universities. Parts of
our efforts are also directed at larger infrastructure initiatives and projects.
In 2022 we established a Sponsor- and Partnership Policy with a regional approach
aimed at southern Norway where our presence is strongest. In this policy we specify
our focus areas and criteria for support, which include culture, sports, education, and
humanitarian and community-oriented purposes. We support partners and projects
that promote sustainability, gender equality and societal development, and prioritize
children and young people, and non-proﬁt purposes and organizations.
Through our support, we seek to actively inﬂuence that our partners also contribute
to community-oriented purposes and make a difference beyond their own core
activity. The sponsor- and partnership committee in Arendals Fossekompani man-
ages these activities.
Local community engagement is based on a mapping of local communities’ needs,
stakeholder engagement, local communty consultation and more. Our sponsor and
partnership criteria and examples of supported partners are disclosed at our web-
page in the section: Local Communities.
Arendals Fossekompani Parent Company's support to infrastructure projects is sub-
ject to ongoing initiatives in the region, and vary from year to year. The sponsor- and
partnership committee evaluates the initiatives. Any support to these projects is
determined by the Board of Directors.
PERFORMANCE
All of Arendals Fossekompani Parent Company’s operations (100%) have imple-
mented local community engagement activities, impact assessments and/or
development programs, for example including the use of social impact assess-
ments, public disclosure of results of environmental and social impact assessments
(through the annual report), local community development programs based on local
communities’ needs, and stakeholder engagement plans based on stakeholder map-
ping.
In 2022, Arendals Fossekompani Parent Company supported 45 organisations and
projects. The socially beneﬁcial activities of our portfolio companies are organised
and implemented by each company, and the different companies have a variety of
focus areas, depending on relevance to their business strategy, material topics and
operations. As a result, there is no central collection of data that could be used to
calculate the percentage of business locations where measures that involve local
communitites have been implemented.
134
135
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Examples of our community engagement include:
Arendalsuka
Arendalsuka is an annual national meeting place for politics and business. Ever since
its inception in 2012, Arendals Fossekompani has been a supporter and main sponsor.
Local sports teams
We proudly partner with local handball club ØIF Arendal, and footballers in Jerv and
Arendal Fotball, which are all engaged in contributing to the society beyond sports
achievements. Together with ØIF Arendal we collaborate on "Strandryddedagen"
where young teams clean the beaches in and around Arendal. The support for
Jerv has been earmarked for the establishment of a fund to help children in low-in-
come families, as well as the club's street team. The support for Arendal Fotball is
divided equally between the women's team and the men's team. Other sponsorship
towards sports include Arendal Tennisklubb, Froland IL, IK Grane, Arendal Thriathlon,
IL Express, and more.
Agder Kunstfagskole
Support to the establishment of a higher education school for art education.
Trainee Sør & internships
Through the regional trainee program, offering young graduates a unique opportu-
nity to get professional experience from a variety of businesses, we have engaged
several trainees. In addition, we hire summer interns to offer young undergraduates
and graduates the opportunity of professional experience. Our commitment to the
regional trainee program Trainee Sør and the hiring of summer interns both contrib-
ute to increasing the overall competence in our region and are unique opportunities
for recruitment of young professionals to Arendals Fossekompani.
Other local engagement activities from 2022 include:
First Lego League Agder, a competition for elementary and middle school within
science, technology, engineering, and math, Froland Skolemusikkorps, Tromøy
Fritidsklubb and Idrettsleiren.
Additionally, in recent years, Arendals Fossekompani Parent Company has sup-
ported a variety of infrastruture projects. Formerly an industrial area, Løkholmen
in Arendal was in 2021 transformed into a popular green islet for recreational activi-
ties. Together with Arendal Municipality we are currently working on realising a new
swimming facility. In 2022 we supported «Kanalselskapet» which is working to rees-
tablish the Arendal canals.
LOOKING FORWARD
We are further developing our community engagement approach and strategy, with
the aim of becoming more proactive in areas and projects we support, to make an
even greater impact. Moving forward we will also concider broadening our scope
and goals.
136
137
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Ambitions and
Targets for 2023
Arendals Fossekompani is committed to improving our
sustainability work and further reducing the impact we
have on our planet. In 2023, we will continue measuring
and improving our work related to our ﬁve focus areas for
the whole group. For 2023, our main target is to ensure that
AFK governance is in accordance with the OECD Guidelines
for Multinational Enterprises and NUES. In 2023, AFK will
apply to become a member of PRI: Principles for Responsible
Investments, a UN-supported network working together
to promote sustainable investments.
Ethical Business Conduct
In 2023, we will continue to improve our way of working with governance, risk, and
compliance.
We will have a particular focus on the implementation of the Corporate Sustainability
Reporting Directive. All enterprises that are covered by the act should perform due
diligence assessments. AFK has launched a project to implement measures and
plans to meet the requirements in the Transparency Act. AFK will also further assess
the EU Taxonomy and publish numbers on eligibility and alignment according to the
EU Taxonomy for 2023.
Improvement Activities in 2023
•
Continuous improvement of our end-to-end
process to follow up on business partners.
•
Improving our global risk assessment process.
•
Implementing engaging business ethics
training concepts to build awareness and engagement.
•
Digitalization or automation of identiﬁed
compliance processes to increase efﬁciency.
Targets
•
100% of employees receive training in Code of Conduct.
•
100% of employees sign Code of Conduct.
•
100% of employees receive training in Whistleblower Policy.
•
100% of employees receive training in ICT security.
Responsible Investments
Responsible investment is an important topic to attract investors and long-term
shareholder. AFK is looking for investments in the three core sectors where we have
our strengths and competences: Digitalization, electriﬁcation and materials, and
green energy. To ensure that all new investments and joint ventures comply with our
standards related to ethical business conduct, we have established an onboarding
process for all new investments. The key element in the onboarding process is to
perform a materiality analysis according to the GRI standard.
Improvement Activities in 2023
•
Onboarding according to our sustainability framework.
•
EU taxonomy eligibility and alignment as investment criteria.
•
Publish report on use of proceed related to green bonds.
Targets
•
100% sustainability onboarding of new investments.
•
100% EU Taxonomy eligibility potential in new investments.
138
139
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Optimizing the Portfolio Companies
Arendals Fossekompani is an industrial investment company, supporting the
green transition. Together with our portfolio companies, we will provide green,
enabling technologies to accelerate global efforts to meet the goals of the Paris
Agreement. We will provide a disclosure of our Scope 1 and Scope 2 emissions,
together with a selection of our material Scope 3 emissions for the entire portfolio.
Our pledge to meet the goals of the Paris Agreement requires us to evaluate how to
reach this target. A roadmap will be developed in 2023, based on the Science Based
Target initiative (SBTi).
Improvement Activities in 2023
•
Conduct an assessment of the portfolio’s alignment with the EU
Taxonomy, in which the new Technical Screening Criteria will be evaluated.
•
Re-evaluate our eligibility. The targets will be validated in 2023,
and after this, we will continue to report on our emissions and
progress towards meeting our 2030 targets.
•
Map the ﬁnancial implications of climate risk and opportunities,
as well as mapping the costs we have taken to manage such risks.
•
Map other important adverse environmental impacts in the portfolio.
•
Follow up on our commitment to the Science Based Targets Initiative.
Targets
•
Reducing absolute Scope 1 and Scope 2 GHG emissions by 42% by 2030.
Great Place to Work
Protecting labour rights and promoting a safe and secure work environment for our
employees, continues to be our main priority for 2023. We will also advance in our
work towards gender equality on all levels of our portfolio. Human rights are import-
ant for AFK, and we strive to work in compliance with the UN Guiding Principles for
human rights.
In 2023, AFK will continue to measure and report on health and safety, including
injuries, turnover, and absentee rate. Our long-term ambition is to ensure low levels
in all these areas. For gender equality, our KPIs will be to measure the percentage of
women in various parts of the organization.
Improvement Activities in 2023
Through the process of preparing the Activity and Reporting Obligations Report
2022, a set of strategic improvements projects for 2023 were deﬁned. Primarily, we
will expand our set of governing policies related to recruitment, wages, job descrip-
tions, and career development. AFK will work towards our goals from the ARP. To
improve communication with potential new attractive employees, we will further
develop the career section on our website and improve our dialogue with Norwegian
universities.
Targets
•
50% women in Board of Directors by 2027.
•
At least 40% women in C-suite positions by 2027.
•
Less than 3.0% absentee rate in 2023.
Community Engagement
Ever since the establishment of Arendals Fossekompani 127 years ago we have been
passionate about developing the Arendal region. Moving forward, we will continue
to support urban community projects, local sports teams, and cultural events and
initiatives.
Improvement Activities in 2023
•
Further developing our community engagement approach
and strategy, with the aim of becoming more proactive in areas
and projects we support, to make an even greater impact.
•
Digitalization of the sponsorship processes and
follow-up of existing partners and initiatives.
•
Concider broadening our scope and goals.
140
141
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
SUSTAINABILITY
ANNUAL AND SUSTAINABILITY REPORT
Financial
Statements
05
Annual Accounts and Notes in Full
144
Declaration by the Members of the Board and the CEO
228
Independent Auditor’s Report
230
143
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Group
Parent Company
Note
2022
2021
2022
2021
Revenue
4 568 534
4 196 380
605 400
370 658
Other Income
1,2
18 002
35 910
22 687
11 713
Revenue and other income
1
4 586 536
4 232 290
628 087
382 372
Materials and consumables used
1 446 542
1 585 290
4 203
2 496
Employee beneﬁt expenses
4
1 691 116
1 421 931
78 370
65 700
Other operating expenses
7
722 461
539 251
82 552
65 370
Operating expenses
3 860 120
3 546 472
165 124
133 566
EBITDA
726 417
685 819
462 963
248 805
Depreciation
5
183 679
170 718
11 532
11 367
Amortisation
6
104 308
58 370
1 934
1 934
Impairment loss property, plant and equipment
5
202
606
Impairment loss intangible assets
6
9 489
5 897
Operating proﬁt
428 740
450 227
449 497
235 505
Finance income
8
118 486
46 574
601 459
1 470 955
Finance costs
8
81 201
152 889
54 503
125 486
Net ﬁnancial items
37 285
-106 316
546 956
1 345 469
Share of proﬁt or loss of associates and joint ventures
11
-40 405
-12 173
Proﬁt before income tax
425 620
331 738
996 454
1 580 974
Income tax expense
9
458 139
234 733
392 149
159 421
Proﬁt (-loss) from continuing operations
-32 519
97 005
604 305
1 421 553
Proﬁt (-loss)
from discontinued operations
26
28 822
Proﬁt (-loss) for the year
-32 519
125 827
604 305
1 421 553
Attributable to
Equity holders of the company
5 744
106 709
604 305
1 421 553
Non-controlling interests
-38 263
19 118
Total
-32 519
125 827
604 305
1 421 553
Basic/diluted earnings per share (NOK)
22
0,10
1,95
11,02
25,92
Group
Parent Company
Note
2022
2021
2022
2021
Items that may be reclassiﬁed to statement of income
Total Effect from Foreign Exchange
56 245
-69 907
Change on Cash ﬂow hedges
-8 582
-3 861
Tax on cash ﬂow hedges that may be reclassiﬁed to P&L
9
1 888
1 335
OCI from discontinued operations
6 550
Items that may be reclassiﬁed to statement of income
49 552
-65 883
Items that will not be reclassiﬁed to statement of income
Change in ﬁnancial assets at fair value through OCI
16
-3 311
95 193
-3 311
95 193
Actuarial gains and Losses
-2 352
5 852
-2 615
2 823
Tax on OCI that will not be reclassiﬁed to P&L
9
838
-1 185
575
-621
Items that will not be reclassiﬁed to statement of income
-4 825
99 860
-5 351
97 396
Total Other Comprehensive Income (OCI)
44 727
33 977
-5 351
97 396
Proﬁt (-loss) for the year
-32 519
125 827
604 305
1 421 553
Total Comprehensive Income
12 208
159 804
598 954
1 518 949
Attributable to
Equity holders of the company
37 690
156 310
598 954
1 518 949
Non-controlling interests
-25 482
3 494
Total
12 208
159 804
598 954
1 518 949
Total Comprehensive Income per share (NOK)
0,69
2,85
10,92
27,69
STATEMENT OF INCOME
(1 000 NOK)
STATEMENT OF COMPREHENSIVE INCOME
(1 000 NOK)
144
145
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
STATEMENT OF FINANCIAL POSITION
(1 000 NOK)
Group
Parent Company
Note
2022
2021
2022
2021
Assets
Property, plant and equipment
5
1 086 112
938 675
229 477
169 928
Intangible assets
6
1 756 782
1 091 977
8 731
10 664
Investments in associates and joint ventures
11
37 317
16 922
16 906
4 750
Investment in subsidiaries
3,11
1 751 829
1 623 119
Intercompany loans
320 728
5 050
Net pension assets
4
24 993
28 365
12 041
13 859
Non-current receivables and investments
12
263 696
264 323
170 609
173 548
Deferred tax assets
9
108 430
91 927
47 349
42 352
Non-current assets
3 277 331
2 432 190
2 557 669
2 043 269
Inventories
13
845 472
502 272
Contract assets
13
136 970
150 780
Accounts receivable
14
926 124
772 808
31 233
58 278
Other receivables
14
261 635
219 347
477 062
100 654
Derivatives - current assets:
16
11 065
11 317
Other current assets
14
30 371
25 545
Cash and cash equivalents
15
2 339 664
2 708 412
1 160 349
1 411 245
Financial assets at fair value through OCI
16
11 830
15 227
11 830
15 227
Current assets
4 563 132
4 405 709
1 680 476
1 585 404
Total assets
7 840 462
6 837 898
4 238 145
3 628 673
Group
Parent Company
Note
2022
2021
2022
2021
Equity and liabilities
Share capital
10
223 981
223 981
223 981
223 981
Other paid-in capital
21 800
10 120
21 800
10 120
Treasury shares
-110 012
-63 119
-110 012
-63 119
Other reserves
-6 608
-47 215
-2 630
681
Retained earnings
2 993 674
3 239 771
2 894 225
2 700 126
Capital and reserves attributable to owners of the company
3 122 836
3 363 537
3 027 365
2 871 788
Non-controlling Interests
11
661 511
545 306
Total equity
3 784 347
3 908 843
3 027 365
2 871 788
Non-current bond loans
17,25
497 581
496 581
497 581
496 581
Non-current interest-bearing debt
17,25
353 067
169 850
153 307
Pension liabilities
4
23 588
25 353
6 358
7 091
Other non-current liabilities
25
32 079
20 380
Non-current provisions
1 950
10 300
1 600
10 000
Deferred tax
liabilities
9
65 025
52 776
Non-current lease liabilities
19,25
203 076
141 601
60 258
15 365
Non-current liabilities
1 176 366
916 841
719 105
529 037
Current interest-bearing debt
17,25
170 841
122 333
Bank overdraft
25
110 873
114 100
Derivatives - current liabilities
16
9 196
4 305
Accounts payable
18
969 613
753 718
12 105
51 777
Payable income tax
9
436 746
187 002
374 830
112 023
Contract liabilities
13
233 496
166 505
Current interest-bearing debt, intercompany
17 185
35 672
Current lease liabilities
19
58 454
64 449
2 300
3 897
Current provisions
18
117 662
92 710
Other current liabilities
18
772 868
507 092
85 255
24 478
Current liabilities
2 879 748
2 012 214
491 675
227 848
Total liabilities and equity
7 840 462
6 837 898
4 238 145
3 628 673
Froland, 11 April 2023
Trond Westlie,
Chairman
Stine Rolstad Brenna,
Board Member
Lise Lindbäck,
Board Member
Morten Bergesen,
Board Member
Didrik Vigsnæs,
Board Member
Anne Grethe Dalane,
Board Member
Lars Peder Fensli,
Acting CEO and CFO
Christian Must,
Board Member
146
147
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
STATEMENT OF CASH FLOWS
(1 000 NOK)
STATEMENT OF CASH FLOWS
(1 000 NOK)
Group
Parent Company
Note
2022
2021
2022
2021
Cash ﬂow from operating activities
Net proﬁt for the year, continuing operations
-32 519
97 005
604 305
1 421 553
Adjusted for
Depreciation, impairment and amortization
297 677
235 592
13 466
13 301
Net ﬁnancial items
-37 285
106 315
-546 956
-1 345 469
Share of proﬁt from associates and joint ventures
40 405
12 173
Gain/loss from sales of assets
-140
-468
-503
-348
Tax expense
458 139
234 733
392 149
159 421
Change in inventories
-276 034
176 267
Change in trade and other receivables
-164 258
-278 692
3 086
-32 098
Change in trade and other payables
180 171
164 892
-38 644
31 936
Cash ﬂow from internal accounts payable and receivable
25 924
-45 124
Change in other current assets
-15 960
8 948
20 422
Change in other current liabilities
248 519
171 554
61 932
10 847
Change in other provisions
-20 011
-25 497
-8 400
Change in employee beneﬁts
-1 861
-7 905
-1 530
-1 520
Tax paid
-193 717
-37 627
-112 023
3 224
Net cash from operating activities
A
483 124
857 290
392 806
236 144
Cash ﬂow from investing activities
Interest received and realized FX gains
8
60 220
16 917
45 855
11 563
Dividends received
8
3 659
2 698
97 229
87 191
Proceeds from the sales of PPE
4 220
5 479
503
348
Purchase of PPE and intangible assets
-358 488
-252 918
-23 828
-7 562
Purchase of shares in associates
-29 829
Purchase of shares in subsidiaries (reduced by cash balance)
3
-224 159
-33 539
Purchase of ﬁnancial assets at fair value
-9 000
-9 000
Proceed from sale of ﬁnancial assets at fair value
85
833 940
85
823 940
Purchase of other investments
-53 305
-76 749
-43 751
-51 452
Proceed from sale of other investments
5 916
35 167
35 167
Purchase of non controlling intrests
-91 651
-46 900
Proceeds from the sales of shares in subsidiaries
5 409
1 183 245
5 506
1 333 515
Net cash from investing activities
B
-586 272
1 705 240
-10 052
2 176 809
Group
Parent Company
Note
2022
2021
2022
2021
Cash ﬂow from ﬁnancing activities
Equity payments from/ to non controlling interests
17 699
636 748
Cash from new borrowings
25
268 680
560 221
147 763
496 775
Repayment of long-term borrowings
25
-256 833
-673 015
-3 958
-525 131
Cash ﬂow from internal loans and borrowings
-514 343
182 623
Cash ﬂow from net change in current interest-bearing debt
25
2 686
-95 029
Interest paid and realized FX losses
8
-54 738
-72 292
-33 675
-42 934
Payment of interest and currency swap
-105 916
-105 916
Dividend paid
-230 544
-1 797 893
-206 292
-1 775 958
Group Contribution
12 278
Cash ﬂow from treasury shares
-35 423
3 192
-35 423
3 192
Net cash from ﬁnancing activities
C
-288 473
-1 543 985
-633 649
-1 767 349
Cash ﬂow
A+B+C
-391 621
1 018 545
-250 896
645 604
Opening balance for cash and cash equivalents
2 708 412
1 688 228
1 411 245
765 641
FX effects on cash accounts
22 873
1 651
Closing Balance for cash and cash equivalents
2 339 664
2 708 412
1 160 349
1 411 245
Unused credit facilities
2 194 085
2 270 996
1 947 000
2 000 000
148
149
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
STATEMENT OF CHANGES IN EQUITY
(1 000 NOK)
Group
Note
Share
capital
Other
paid-in
capital
Treasury
shares
Other
reserves
Retained
earnings
Owner's
equity
Non-
controlling
Interests
Total
equity
Balance at
1 January 2021
223 981
7 675
-63 866
704 379
2 680 261
3 552 430
303 100
3 855 530
Proﬁt (-loss)
for the year
105 581
105 581
20 246
125 827
Total Other
Comprehensive
Income (OCI)
45 752
4 977
50 729
-16 752
33 977
Treasury shares
2 445
747
3 192
3 192
Transactions with
non-controlling
interests
8
1 282 985
1 282 985
1 282 985
Realization of
ﬁnancial asset
at fair value
through OCI
-797 829
797 829
Issue of shares
from non-con-
trolling interests
515 925
515 925
130 154
646 079
Capital changes
from subsidiaries
484
-114 432
-113 948
137 537
23 589
Dividends paid
10
-2 033 356
-2 033 356
-28 979
-2 062 335
Balance at
31 December 2021
223 981
10 120
-63 119
-47 215
3 239 771
3 363 537
545 306
3 908 843
Balance at
1 January 2022
223 981
10 120
-63 119
-47 215
3 239 771
3 363 537
545 306
3 908 843
Proﬁt (-loss)
for the year
6 034
6 033
-38 552
-32 519
Total Other
Comprehensive
Income (OCI)
33 385
-1 728
31 657
13 070
44 727
Effect of share
based payment
4
11 327
11 327
3 883
15 210
Treasury shares
11 681
-46 893
-211
-35 423
-35 423
Transactions with
non-controlling
interests
3,10
-4 340
128 570
124 230
161 543
285 773
Capital changes
from subsidiaries
11 563
18 664
30 226
43
30 269
Dividends paid
10
-408 752
-408 752
-23 783
-432 535
Balance at
31 December 2022
223 981
21 800
-110 012
-6 608
2 993 674
3 122 836
661 511
3 784 347
STATEMENT OF CHANGES IN EQUITY
(1 000 NOK)
Parent Company
Note
Share
capital
Other
paid-in
capital
Treasury
shares
Other
reserves
Retained
earnings
Owner's
equity
Non-
controlling
Interests
Total
equity
Balance at
1 January 2021
223 981
7 675
-63 866
703 317
2 511 897
3 383 004
3 383 004
Proﬁt (-loss)
for the year
1 421 553
1 421 553
1 421 553
Total Other
Comprehensive
Income (OCI)
95 193
2 202
97 396
97 396
Treasury shares
2 445
747
3 192
3 192
Dividends paid
10
-2 033 356
-2 033 356
-2 033 356
Balance at
31 December 2021
223 981
10 120
-63 119
681
2 700 126
2 871 788
2 871 788
Balance at
1 January 2022
223 981
10 120
-63 119
681
2 700 126
2 871 788
2 871 788
Proﬁt (-loss)
for the year
604 305
604 305
604 305
Total Other
Comprehensive
Income (OCI)
-3 311
-2 040
-5 351
-5 351
Effect of share
based payment
4
797
797
797
Treasury shares
11 681
-46 893
-211
-35 423
-35 423
Dividends paid
10
-408 752
-408 752
-408 752
Balance at
31 December 2022
223 981
21 800
-110 012
-2 630
2 894 225
3 027 365
3 027 365
150
151
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Notes to the annual and
consolidated ﬁnancial
statements for 2022
Accounting policies
INFORMATION ABOUT THE COMPANY
Arendals Fossekompani ASA is domiciled in Norway, and with headquarters in
Bøylefoss, in the Municipality of Froland. The consolidated ﬁnancial statements for
ﬁnancial year 2022 include the company and its subsidiaries (as a whole, referred to
as "the Group"). Information about the companies included in the scope of consoli-
dation is disclosed in Note 11, together with information about Group investments in
associates.
BASIS FOR PREPARATION
The annual and consolidated ﬁnancial statements have been prepared in accordance
with International Financial Reporting Standards (IFRS) adopted by the European
Union and associated interpretations, as well as Norwegian disclosure requirements
pursuant to the Norwegian Accounting Act applicable as of 31 December 2022.
The annual and consolidated ﬁnancial statements were approved by the board of
directors on 11 April 2023.
The annual and consolidated ﬁnancial statements will be submitted for adoption at
the Annual General Meeting scheduled for 4 May 2023. The board is authorised to
amend the annual and consolidated ﬁnancial statements until ﬁnal adoption.
The ﬁnancial statements are presented in Norwegian kroner (NOK), which is the func-
tional currency of the parent company. All amounts disclosed in the ﬁnancial state-
ments and notes have been rounded off to the nearest thousand NOK units unless
otherwise stated.
The ﬁnancial statements have been prepared using the historical cost principle, with
the exception of the following assets, which are presented at fair value: Financial
instruments at fair value through proﬁt or loss and ﬁnancial instruments at fair value
through other comprehensive income.
The Group recognises changes in equity arising from transactions with owners in the
statement of changes in equity. Other changes in equity are presented in the state-
ment of comprehensive income (total return).
Preparation of ﬁnancial statements in accordance with IFRS requires the use of
assessments, estimates and assumptions that inﬂuence which accounting policies
shall be applied, and also inﬂuence recognised amounts for assets and liabilities, rev-
enues and costs. Actual amounts can deviate from estimated amounts.
Estimates and underlying assumptions are reviewed on an ongoing basis. Changes
in accounting estimates are recognised in the period in which they arise if they only
apply to that period. If the changes also apply to subsequent periods, the effect is
allocated over the current and subsequent periods.
Areas with signiﬁcant estimation uncertainties, and where assumptions and assess-
ments made have signiﬁcantly inﬂuenced the application of the accounting policies,
are disclosed in Note 21.
ACCOUNTING POLICIES
The accounting policies applied in the preparation of the annual and consolidated
ﬁnancial statements are described below. With the exception of effects described in
the section on changes in accounting policies below, the policies are applied consis-
tently for all periods. In case that subsidiaries have used other principles to prepare
their separate annual ﬁnancial statements, adjustments have been made so the con-
solidated ﬁnancial statements are prepared according to common policies.
Changes in accounting policies for 2022
No new standards have been adopted by the Company and the Group with effect
from 1 January 2022.
Principles of consolidation
BUSINESS COMBINATIONS
The acquisition method of accounting is used to account for the acquisition of shares
that lead to control over another company. The Group's consideration is allocated to
identiﬁable assets and liabilities. These are recognised in the consolidated ﬁnancial
statements at fair value at the date when control is obtained. Goodwill is calculated
when the consideration exceeds identiﬁable assets and liabilities:
•
The consideration transferred; plus.
•
Any non-controlling interest in the acquired entity;
plus any gradual acquisition, the fair value of existing
share-holdings in the acquired entity; less.
•
Net value (normally fair value) of identiﬁable
net assets included in the transaction.
If those amounts are less than the fair value of the net identiﬁable assets of the busi-
ness acquired, the difference is recognised directly in proﬁt or loss as a bargain pur-
chase. If the business combination is achieved in stages, the investment changes
classiﬁcation from associated company to subsidiary, the upward adjustment of the
ex-isting shareholding at fair value is recognised as a gain in the income statement.
A buyout of non-controlling interests is considered a transaction with owners and
does not require a calculation of goodwill. Non-controlling interests for such transac-
tions are adjusted based on a proportionate share of the subsidiary's equity.
SUBSIDIARIES
Subsidiaries are all entities over which the Group has control. Control exists when
the investor is exposed or has rights to variable returns from its investment in the
company and when it has the ability to inﬂuence the return through its power over
the company. To determine the level of control, the potential voting rights that can be
exercised or converted must be considered. Subsidiaries are fully consolidated from
the date on which control is transferred to the group. They are deconsolidated from
the date that control ceases.
ASSOCIATED COMPANIES
Associated companies are entities where the company and/or the Group has signiﬁ-
cant inﬂuence, but not control over ﬁnancial and operational management. Signiﬁcant
inﬂuence is assumed to exist when the Group has between 20 per cent to 50 per
cent of the voting rights in a company. The consolidated ﬁnancial statements include
the Group's share of the proﬁts/losses from associated companies are accounted
for using the equity method, from the date signiﬁcant inﬂuence was achieved until
it ceases.
152
153
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
ELIMINATION OF INTERCOMPANY TRANSACTIONS
Intercompany transactions, balances and unrealised gains and losses on transactions
between group companies are eliminated.
ACCOUNTING IN THE PARENT COMPANY FINANCIAL STATEMENTS
Investments in subsidiaries and associates are recognised at historical cost less any
impairment losses in the parent company’s ﬁnancial statements. When an invest-
ment is reclassiﬁed from fair value through other comprehensive income to subsidi-
ary or associated company, the investment’s carrying amount at the time control or
signiﬁcant inﬂuence is obtained is used as recognised cost.
DISCONTINUED OPERATIONS
A discontinued operation is a component of the entity that has been disposed of or
is classiﬁed as held for sale and that represents a separate major line of business or
geographical area of operations, is part of a single coordinated plan to dispose of such
a line of business or area of operations, or is a subsidiary acquired exclusively with a
view to resale. The results of discontinued operations are presented separately in the
state-ment of proﬁt or loss.
SEGMENT REPORTING
Financial information for the operating segments is determined and presented based
on the information provided to the company's board of directors, which is the Group's
ultimate decision-maker.
Foreign currency translation
TRANSACTIONS IN FOREIGN CURRENCIES
Transactions in foreign currencies are translated to the functional currency of each
individual Group company using the exchange rates at the dates of the transactions.
Monetary assets and liabilities in foreign currencies are translated to NOK using the
exchange rate at the balance sheet date. Differences that arise from the currency
translation are recognised in the income statement.
FINANCIAL STATEMENTS OF FOREIGN OPERATIONS
Assets and liabilities in foreign currencies are translated to NOK using the exchange
rate at the balance sheet date. Revenues and expenses for foreign operations are
translated to NOK at the approximate rates of exchange at the transaction date.
Translation differences are recognised in other comprehensive income and presented
as a translation difference in equity. For subsidiaries which are not wholly-owned,
a proportional share of the translation difference is allocated to the non-controlling
interests. On divestment of foreign operations which result in a loss of control, an
accumulated share of the translation differences is recognised in the income state-
ment as part of the proﬁt calculation.
NET INVESTMENTS IN FOREIGN OPERATIONS
Translation differences arising from the translation of net investments in foreign oper-
ations are speciﬁed as translation differences in equity, and recognised in the income
statement at the time of the divestment.
Financial instruments
NON-DERIVATIVE FINANCIAL INSTRUMENTS
Non-derivative ﬁnancial instruments consist of investments in debt and equity instru-
ments, trade and other receivables, cash and loans, trade payables and other debts.
Trade and other receivables that fall due in less than three months are not discounted.
Non-derivative ﬁnancial instruments are measured on initial recognition at fair value
plus any directly attributable transaction costs. After initial recognition, the instru-
ments are measured as described below.
Interest-bearing loans are valued at fair value less transaction costs on initial recogni-
tion in the balance sheet. Instruments are subsequently measured at amortised cost,
with any differences between cost and redemption value recognised over the term of
the loan as part of the effective interest rate.
Financial assets are derecognised when the contractual rights to the cash ﬂows from
an asset expire, or when the Group has transferred the contractual rights in a transac-
tion where the risk and return of ownership of the ﬁnancial asset have substantively
been transferred.
FINANCIAL ASSETS AT FAIR VALUE
THROUGH OTHER COMPREHENSIVE INCOME
In accordance with the Group's investment strategy, investments in equity instru-
ments are mainly classiﬁed as fair value through other comprehensive income. After
initial recognition, these instruments are measured at fair value. Changes in fair value
are recognised in other comprehensive income.
FINANCIAL ASSETS AT FAIR VALUE THROUGH PROFIT OR LOSS
A ﬁnancial instrument is classiﬁed at fair value through proﬁt or loss if it is held for
trading. The instrument is measured at fair value and the changes in fair value are
recognised in the income statement.
OTHER
Other non-derivative ﬁnancial instruments are measured at amortised cost less any
impairment losses.
DERIVATIVES
The Group uses derivatives to limit exposure to interest risk, currency risks and price
risk that arise from operational and ﬁnancial activities. Derivatives that do not qualify
for hedge accounting are recognised at fair value through proﬁt or loss.
When derivatives qualify for hedge accounting, the recognition of fair value changes
will depend on what is being hedged (see below).
Hedging activities
CASH FLOW HEDGE
When a derivative is designated as a hedging instrument on variability in cash ﬂows
for a recorded asset or liability, or for a highly probable forecast transaction, the effec-
tive portion of a change in fair value is recognised in other comprehensive income.
The Group performs a qualitative assesment of hedging effectiveness. A hedging
instrument is derecognised when it no longer satisﬁes hedge accounting criteria, sold,
terminated or matures. The accumulated change in fair value recognised in other
comprehensive income remains until the forecast transaction occurs. If the hedged
item is a ﬁnancial asset, the amount recognised in other comprehensive in-come is
transferred to to the income statement in the same period as the hedged item affects
the income statement. If the hedged transaction is no longer expected to occur, the
accumulated unrealised gains or losses are immediately recognised in the income
statement.
154
155
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
FAIR VALUE HEDGING
When a ﬁnancial derivative is designated as a hedging instrument on variability in the
value of a recognised asset, a ﬁrm agreement or liability, the gain or loss on the deriv-
ative is recognised in the income statement in the period it incurs. Similarly, changes
in the fair value of the hedged item is recognised in the income statement in the same
period. Principles related to hedging effectiveness and derecognition are the same
as for cash ﬂow hedges.
Equity
ORDINARY SHARES
Ordinary shares are classiﬁed as equity. Costs associated with the issuance of shares
are recognised as a reduction in net equity (share premium) after tax, if applicable.
PURCHASE AND SALE OF TREASURY SHARES
On the repurchase of treasury shares, the purchase amount including directly attrib-
utable costs are recognised as a change in equity. Purchased shares are classiﬁed as
treasury shares and reduce total equity. When treasury shares are sold, the received
amount is recorded as an increase in equity, and the subsequent gain on the transac-
tion is recognised in Other paid-in equity.
DIVIDENDS
Provision is made for the amount of any dividend declared, for the applicable report-
ing period.
Property, plant and equipment
OWN ASSETS
Property, plant and equipment is recognised in the balance sheet at cost less accumulated
depreciation (see below) and any impairment losses. The cost for capital equipment
produced by the company includes material costs, direct costs of labour and a rea-
sonable share of indirect production costs.
Operating assets with different useful economic lives are recognised as separate
components of property, plant and equipment.
Borrowing costs that are directly attributable to the acquisition of an asset are capi-
talised during the period of time that is required to complete and prepare the asset for
its intended use or sale. These borrowing costs are capitalised as part of the asset's
cost when it is probable that they will lead to future beneﬁts for the Group, and the
costs can be measured in a reliable manner. Other borrowing costs are recognised in
the income statement in the period in which they incur.
POST-ACQUISITION COSTS
The company and the Group include expenses of replacing parts of operating assets
in the cost of property, plant and equipment when such expenses are expected to
generate future economic beneﬁts and the expenses for the replaced parts can be
reliably measured. All other costs are recognised in the income statement in the
period in which they occur.
DEPRECIATION
Depreciation is calculated using the straight-line method over the estimated useful
lifetime for each item of property, plant and equipment, and charged to the income
statement. Land is not depreciated. Estimated economic lifetimes are as follows:
Watercourse regulations
40–50 years
Power generation
Buildings
50 years
Dams, water ways, hatches
25-40 years
Machine equipment
40 years
Thermal power plant (Spain)
25 years
Industrial activities
Buildings
20–25 years
Machinery and equipment
7–15 years
Operational moveable property, vehicles, equipment etc.
3–12 years
Residual value is assessed annually unless it is immaterial.
LEASES
The company's and the group's leases consist mainly of ofﬁce space, machines,
cars, IT equipment and other ofﬁce machines. Some contracts have extension
options. Assets and liabilities arising from a lease are initially measured on a pres-
ent value basis.
Right-of-use assets are measured at cost comprising the following:
•
the amount of the initial measurement of lease liability
•
any lease payments made at or before the
commencement date less any lease incentives received
•
any initial direct costs
•
restoration costs
Lease liabilities include the net present value of the following lease payments:
•
ﬁxed payments (including in-substance ﬁxed
payments), less any lease incentives receivable
•
variable lease payment that are based on an index or a rate, initially
measured using the index or rate as at the commencement date
•
amounts expected to be payable by the group
under residual value guarantees
•
the exercise price of a purchase option if the group
is reasonably certain to exercise that option
•
payments of penalties for terminating the lease,
if the lease term reﬂects the group ex-ercising that option
Lease payments to be made under reasonably certain extension options are also
included in the measurement of the liability. The lease payments are discounted
using the lessee’s incremental borrowing rate, being the rate that the individual
lessee would have to pay to borrow the funds necessary to obtain an asset of similar
value to the right-of-use asset in a similar economic environment with similar terms,
security and conditions.
To determine the incremental borrowing rate, the group:
156
157
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
•
where possible, uses recent third-party ﬁnancing received by the
individual lessee as a starting point, adjusted to reﬂect changes in
ﬁnancing conditions since third party ﬁnancing was received
•
makes adjustments speciﬁc to the lease,
e.g. term, country, currency and security
If a readily observable amortising loan rate is available to the individual lessee
(through recent ﬁnancing or market data) which has a similar payment proﬁle to the
lease, then the group entities use that rate as a starting point to determine the incre-
mental borrowing rate.
The group is exposed to potential future increases in variable lease payments based
on an index or rate, which are not included in the lease liability until they take effect.
When adjustments to lease payments based on an index or rate take effect, the lease
liability is reassessed and adjusted against the right-of-use asset.
Lease payments are allocated between principal and ﬁnance cost. The ﬁnance cost
is charged to proﬁt or loss over the lease period so as to produce a constant periodic
rate of interest on the remaining balance of the liability for each period.
Intangible assets
GOODWILL
Goodwill represents the amount that arises on the acquisition of subsidiaries and
investments in associates. For acquisitions after 1 January 2010, goodwill is calculated
as described above. For acquisitions between 1 January 2003 and 31 December 2009,
goodwill represents the difference between the cost on acquisition and the fair value
of the net identiﬁed assets acquired. For acquisitions prior to this, goodwill is based
on the estimated cost that corresponds to the amount that was recognised under
previous Norwegian accounting principles.
Goodwill is recognised in the balance sheet at cost, less any accumulated impairment
losses. Goodwill is allocated to the cash-ﬂow-generating units and is not amortised,
but it is tested each year for impairment. For associates, the balance sheet value of
goodwill is included in the investment's book value in the consolidated ﬁnancial state-
ments.
OTHER INTANGIBLE ASSETS
Other intangible assets that are acquired are recognised in the balance sheet at cost,
less accumulated amortisation (see below) and less any im-pairment losses.
Research and development expenditures which are directly attributable to develop-
ment and testing of the Group's products, and which are identiﬁable and unique, and
which is controlled by the Group, is recognised in the balance sheet as an intangible
asset when all of the following criteria are satisﬁed:
•
It is technically feasible to complete the product
so that it will be available for use.
•
Management intends to complete, use and sell the product.
•
It is an ability to use and sell the product.
•
It can be proven that the product will generate probable economic beneﬁts.
•
Adequate technical, ﬁnancial and other resources to
complete the development and to use or sell the product are available.
•
The expenditure attributable to the product
during its development can be reliably measured.
Costs recognised in the balance sheet include material costs, direct costs of labour
and directly attributable overheads that are included to make the product available
for use.
Other development costs that do not satisfy these criteria are recognised as an
expense as incurred. Development costs that are expensed cannot subsequently be
recognised in the balance sheet.
SUBSEQUENT COSTS
Future costs concerning intangible assets recognised in the balance sheet are only
capitalised if they increase future economic beneﬁts related to this asset. All other
costs are expensed in the period in which they occur.
AMORTISATION
Amortisation is calculated and recognised in income using the straight-line-method
over the estimated useful economic life of the intangible assets, unless the life-
time is indeﬁnite. Goodwill is annually tested for impairment, at balance sheet date.
Capitalised costs associated with the granting of concessions are amortised over
the period until the next concession application. The amortisation period is 50 years.
Excess values associated with customer relations, customer contracts, brands and
own software development and other development costs are amortised over a period
of 3–10 years.
Inventories
Inventories are recognised at the lower of cost and net sales value. Net sales value is
the estimated sales price in ordinary operations, less the estimated costs for com-
pletion and sales costs.
Cost is based on the ﬁrst-in ﬁrst-out principle and includes costs incurred upon pro-
curement of goods and the costs of bringing them to their present condition and
location. For ﬁnished goods and work in progress, cost is calculated as a share of the
indirect costs based on normal utilisation of capacity.
Construction contracts
The booked value of construction contracts consists of earned, non-invoiced income
under the percentage-of-completion method, less received advance payments. The
amount is recognised in the balance sheet under trade and other receivables. The net
worth is classiﬁed as contract assets. Long-term manufacturing contracts where the
customer has paid more than the earned contract value on the balance sheet date
are classiﬁed as contract obligations. See also the section below on operating income
and Note 13.
Determining fair value
The accounting policies and notes require fair value to be determined for ﬁnancial
and certain non-ﬁnancial assets and liabilities. Fair value is deﬁned as the value the
individual asset or liability can be sold for, in an orderly transaction, between market
participants at the measurement date under current market conditions.
Various methods and techniques are used to calculate fair value depending on the
type of asset or liability and to what extent they are traded in active markets.
Financial instruments are classiﬁed in their entirety at one of three valuation levels
based on the lowest level of the valuation information which has an impact on the
valuation of the instruments. Please refer to the disclosures on the different valuation
levels in Note 16.
Based on the above principles, the following methods are normally used to determine
fair value:
158
159
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Property, plant and equipment
In connection with acquisitions and business combinations, property, plant and equip-
ment is recognised at fair value. The market value is determined based on valuations
or observable market prices on similar assets.
Trade and other receivables
The fair value of trade and other receivables is calculated as the present value of net
future cash ﬂows discounted at the market interest rate at the balance sheet date.
Intangible assets
The fair value of intangible assets is based on discounted forecast cash ﬂows from the
use and any subsequent sale of the assets.
Investments in shares, bonds and funds
The fair value of listed ﬁnancial instruments is equivalent to the quoted bid price at
the balance sheet date. For non-listed instruments, fair value is based on the known
market prices close to the balance sheet date or valuations made by investment ﬁrms
applying generally applied valuation methods.
Non-derivative ﬁnancial liabilities
Fair value of ﬁnancial liabilities for disclosure purposes is calculated as the present
value of future cash ﬂows discounted at the market interest rate at the balance sheet
date.
Derivatives
The fair value of swap agreements is the estimated amount that the company and/
or the Group will receive or be required to pay to settle the agreement at the bal-
ance sheet date, taking into account current interest rates and the counterparty's
own creditworthiness. The fair value of energy-related derivatives (futures, forwards
and options) is the market price at the balance sheet date. The fair value of forward
exchange contracts is the market price at the balance sheet date.
Impairment
The carrying amount of the company's and Group's assets is, with the exception of
inventories and deferred tax assets, reviewed each balance sheet date to assess
whether there are indications of impairment. If any such indication exists, the asset's
recoverable amount will be estimated.
An impairment loss is recognised when the carrying amount of an asset or cash-gen-
erating unit (valuation unit) exceeds the recoverable amount. Impairment losses are
recognised in the income statement.
Impairments for cash-ﬂow generating entities are allocated by reducing the carrying
amount of any goodwill in cash-generating units ﬁrst. Subsequently, the remaining
impairments on the other assets in the unit are allocated pro-rata based on the car-
rying amounts.
Calculation of recoverable amounts
The recoverable amount of assets is the highest of the net selling price and value in use.
The value in use is calculated by discounting the forecast future cash ﬂows to their present
value using a discount rate before tax that reﬂects current market pricing of the time
value of money and the risks speciﬁc to the asset. For assets that do not essentially
generate independent cash ﬂows,the recoverable amount is determined forthe valuation
entity to which the asset belongs.
Reversal of impairment
Impairments of goodwill are not reversed.
For other assets, impairment losses are reversed if there is a change in the estimates
used to determine the recoverable amount.
An impairment loss is reversed only to the extent that the asset's carrying amount
does not exceed the carrying amount that would have been determined, net of depre-
ciation or amortisation, if no impairment loss had been recognised.
Employee beneﬁts
DEFINED CONTRIBUTION PENSION PLANS
Obligations to provide contributions to deﬁned contribution pension plan are rec-
ognised as costs in the income statement in the period in which they occur.
DEFINED BENEFIT PENSION PLANS
The net liability related to deﬁned beneﬁt pension plans is calculated separately
for each plan by estimating the size of the future beneﬁts that the employees have
earned through their work efforts in the current and prior periods. These future ben-
eﬁts are discounted to present value, and the fair value of the pension assets is sub-
tracted to establish the net obligation. The discount rate corresponds to the market
interest rate for high-quality corporate bonds (OMF interest rate) with approximately
the same term as the Group's obligations. The calculations are performed by a quali-
ﬁed actuary and based on the straight-line earnings model.
When the beneﬁts in a pension plan improve, the share of the increase in beneﬁts that
the employee has earned the right to are recognised as a cost in the income state-
ment on a straight-line basis over the average period until the employees have earned
an unconditional right to the increased beneﬁts. The cost is recognised immediately in
the income statement if the employees have already acquired an unconditional right
to in-creased beneﬁts at the time of allotment.
Actuarial gains and losses on the calculation of the company's obligation for a pension
plan are recognised in other comprehensive income when they incur. Pension costs
/ earnings, as well as gains and losses on curtailment / termination are recognised in
the income statement.
The net interest on the calculation of pension obligations is reported as ﬁnancial items
in the income statement.
When the calculations result in an asset for the company, recognition of this asset
is limited to the net amount of the total of unrealised actuarial losses and the cost of
previous periods' pension earnings, and the present value of future refunds from the
scheme or reductions in payments to the scheme.
SHARE-BASED COMPENSATION
For share-based compensation by equity instruments granted that do not vest until
the employee completes a speciﬁed period of service, it is assumed that the services to
be rendered as consideration for the equity instruments will be received in the future,
during the vesting period. Such services are accounted for as they are ren-dered by the
employee during the vesting period, with a corresponding increase in equity.
Provisions
A provision is recognised when the Group has a present legal or constructive obliga-
tion, as a result of a past event and it is probable that this will result in an outﬂow of
resources to settle the obligation, and the obligation can be reliably estimated.
Provisions for restructuring are recognised when the Group has approved a detailed
and formal restructuring plan, and the restructuring has either begun or has been
announced to those affected.
160
161
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Operating income
GOODS SOLD AND SERVICES RENDERED
Operating revenue is recognised when performance obligations are satisﬁed through
the trans-fer of a good or service to the the customer, either over time or at a point in
time. By transfer is meant that the customer has obtained control of the good or ser-
vice. The most central indicators of transfer of control is that the Group has obtained
the right to payment for the good or service, that the customer has obtained the right
to the good or service, that the Group has transferred physical control of the good or
service, that the customer has taken on the signiﬁcant risks and rewards related to
ownership of the good or service. Operating revenue is presented net of sales-related
taxes and rebates.
Revenue related to ﬁxed-price contracts where the deliverable is tailored to the cus-
tomer, does not have an alternative use and where the Group obtains the right to pay-
ment based on the projects progress is recognised over time as long as the projects
revenue and expenses can be estimated reliably. When the project’s result cannot
be estimated reliably, only revenue corresponding to expenses incurred may be rec-
ognised. Losses related to onerous contracts are recognosed in the period they are
identiﬁed.
Depending on the type of project, progress is estimated based on costs incurred in
relation to total estimated costs, as direct hours incurred in relation to total expected
hours or by assessing technical grade of completion. Estimates related to revenues,
expenses and progress are revised when assumptions change. Change in estimates
are recognised in the income statement in the period management becomes aware
of the change of assumptions that caused the change in estimate.
In ﬁxed-price contracts the customer normally pays ﬁxed amounts through the proj-
ect period based on a payment plan. A contract asset is recognised if, at the measure-
ment date the value of the deliverable at the exceeds payments received from the
customer. A contract liability is recognised payment from the customer exceeds the
value of the deliverable at the measurement date.
Revenue from energy sales is recognised at the transaction date.
FINANCIAL INCOME
Financial income consists of realised gains fair value changes related to debt and
equity instruments held for trading, dividends received, share of results from invest-
ments in limited partnerships, interest income and foreign exchange gains. Interest
income is recognised in the income statement based on the effective interest method
as it is earned.
Dividend income is recognised as income on the date the right to receive payment is
established.
GOVERNMENT GRANTS
Government grants that compensate for incurred expenses are recognised as a cost
reduction in the income statement on a systematic basis in the same periods in which
the expenses are incurred. Grants related to the acquisition of operating assets are
recognised as reduction of cost and amortised by reducing amortisation over the
operating asset’s useful economic life.
Costs
LEASE PAYMENTS FOR OPERATING LEASES
Lease payments for operating leases are recognised in the income statement on a
linear basis over the lease term. Any lease incentives received are recognised as an
integral part of total lease costs.
FINANCIAL EXPENSES
Financial expenses consist of interest expenses on loans, currency translation losses,
negative changes in the value of derivatives and ﬁnancial instruments held-for-trad-
ing and derivatives that are recognised in income, and other realised impairment
losses for debt and equity instruments.
Taxes
Income tax on the proﬁt for the period consists of current and deferred tax. Income
tax is recognised in the income statement with the exception of tax on items that are
recognised directly in equity or in other comprehensive income. The tax effect of the
latter items is recognised directly in equity or in other comprehensive income.
Current tax is the forecast tax payable on the year's taxable income at current tax
rates at the balance sheet date, and any adjustments of tax payable for previous years
less tax paid in advance.
Deferred tax liabilities are calculated based on the balance sheet oriented liability
method taking into account temporary differences between the carrying amount of
assets and liabilities for ﬁnancial reporting and tax values. The following temporary
differences are not taken into account: goodwill not deductible for income tax pur-
poses, the initial recognition of assets or liabilities that affect neither accounting nor
taxable proﬁt, and differences relating to investments in subsidiaries that are not
expected to reverse in the foreseeable future. The provision for deferred tax is based
on the expected manner of realisation or settlement of the carrying amount of assets
and liabilities, measured at the tax rates in force at the balance sheet date.
Deferred tax assets are recognised only to the extent that it is probable that the asset
can be utilised against future taxable results. Deferred tax assets are reduced to the
extent that it is no longer probable that the related tax asset will be realised.
Tax assets that can only be utilised via group contributions from the parent company
are not recognised until the contribution has actually been paid and is recognised in
the individual companies.
Cash and cash equivalents
Cash means cash in hand and in the bank. Cash equivalents are short-term liquid
investments that can be converted to cash within three months to a known amount
and which have an insigniﬁcant degree of risk. Cash and cash equivalents in the cash
ﬂow statement do not include unused overdrafts.
Accounting standards and
interpretations issued but not adopted
The company has not early-adopted any IFRS standards or IFRIC that have been
issued but are not mandatory as of 31 December 2022. Based on the assessments
made so far, it is assumed that coming standards and IFRIC approved by the EU will
not have a material effect on the ﬁnancial statements.
162
163
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 1 SEGMENT REPORTING
(1 000 NOK)
Per 31.12.
Hydropower
Group Management
Volue
NSSLGlobal
ENRX
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Sales at a
point in time
605 400
370 658
233 919
184 353
1 042 013
907 325
708 950
563 008
Sales over time
981 242
854 722
629 369
607 799
Other Income
618
2 568
22 830
9 146
4 307
21 603
6 262
8 389
Revenue and
other income
606 018
373 226
22 830
9 146
1 219 468
1 060 678
1 042 013
907 325
1 344 581
1 179 196
Operating
expenses
61 407
64 906
104 620
68 661
1 072 845
922 553
787 089
699 022
1 269 705
1 036 214
Depreciation,
amortization
and impairment
9 567
9 989
3 904
3 312
106 470
93 097
45 712
42 689
78 316
59 638
Operating proﬁt
535 044
298 332
-85 693
-62 827
40 154
45 028
209 211
165 613
-3 439
83 344
Share of proﬁt
or loss of associ-
ates and JV
Net ﬁnancial
items
546 954
1 345 469
-3 910
-5 525
27 058
12 155
-16 605
-10 973
Income tax
expense
387 028
129 584
5 126
29 837
17 078
11 884
58 730
35 850
14 368
20 427
Proﬁt (-loss)
continuing
operations
148 016
168 748
456 134
1 252 805
19 166
27 619
177 540
141 918
-34 413
51 945
Total assets
222 622
238 329
4 016 715
3 390 344
1 864 916
1 746 235
915 389
800 901
1 765 276
1 140 618
Total liabilities
447 710
170 891
764 312
585 994
1 056 191
979 359
391 148
342 850
1 381 458
735 622
Net interest
bearing debt
-1 278 952
-950 260
-426 070
-382 075
-355 888
-321 947
424 747
30 963
NOTE 1 SEGMENT REPORTING
(1 000 NOK)
Per 31.12.
Tekna
Property
Alytic
Ampwell
Vergia
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Sales at a
point in time
152 489
129 447
23 543
500 151
39 342
26 904
105 265
938
Sales over time
46 063
52 012
Other Income
5 679
5 704
11 628
9 869
1 221
102
769
Revenue and
other income
204 231
187 164
35 171
510 020
40 564
27 006
106 035
938
Operating
expense
327 759
258 057
29 111
469 918
81 189
39 166
143 997
8 116
7
Depreciation,
amortization
and impairment
29 380
18 266
12 652
13 002
4 904
3 445
14 908
Operating proﬁt
-152 907
-89 159
-6 592
27 101
-45 528
-15 605
-52 871
-7 179
-7
Share of proﬁt
or loss of associ-
ates and JV
-11 149
-10 093
-2 100
-10 967
-2 081
Net ﬁnancial
items
-1 938
863
-3 358
-2 032
406
-106
-7 032
-86
Income tax
expense
839
-781
-488
8 202
-2 604
-721
-650
Proﬁt (-loss)
continuing
operations
-166 834
-97 607
-9 462
16 866
-42 518
-14 991
-61 352
-18 232
-2 088
Total assets
536 600
643 883
442 547
471 007
197 092
107 778
520 017
33 840
17 619
Total liabilities
147 705
113 070
236 387
255 740
64 632
27 515
489 313
24 513
10
Net interest
bearing debt
-40 158
-214 578
134 901
68 404
-45 146
-25 394
373 209
4 911
-9 953
Eliminations
Total
2022
2021
2022
2021
Sales at a point in time
2 911 860
2 681 847
Sales over time
1 656 674
1 514 533
Other Income
-35 312
-21 470
18 002
35 910
Revenue and other income
-35 312
-21 470
4 586 536
4 232 290
Operating expense
-25 718
-12 033
3 860 120
3 546 472
Depreciation, amortization and impairment
-8 135
-7 845
297 677
235 592
Operating proﬁt
-1 460
-1 593
428 740
450 227
Share of proﬁt or loss of associates and joint ventures
-16 189
-40 405
-12 173
Net ﬁnancial items
-504 204
-1 446 166
37 285
-106 316
Income tax expense
-21 289
451
458 139
234 733
Proﬁt (-loss)
continuing operations
-500 563
-1 448 211
-32 519
97 005
Total assets
-2 674 551
-1 718 817
7 840 462
6 837 898
Total liabilities
-947 257
-281 989
4 056 111
2 929 061
Net interest bearing debt
-1 208 447
-1 804 838
164
165
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Segment reporting
Financial information for the operating segments is determined and presented
based on the information provided to the company's board of directors, which is the
Group's ultimate decision-maker.
Hydropower
Hydropower generates electricity at two locations in the Arendal water - course. The
Bøylefoss and Flatenfoss power stations produce more than 500 GWh annually. All
ﬁnancial items have been allocated to the Administration segment.
Group Management
The Parent Company is focused on the development of new sustainable business
opportunities and the follow-up of portfolio companies through long-term active
ownership, in addition to power generation, property development, and manage-
ment of ﬁnancial investments. AFK Group Management employs 30 people. The
head ofﬁce is in Arendal. Eliminations consist mainly of proﬁt- and loss items related
to investments in Tekna and ENRX.
Volue
Volue is a leading supplier of technology and enabler of the green transition. With 50
years of green technology expertise, Volue offers software solutions, systems and
market insight that optimise production, trading, distribution and consumption of
energy, as well as infrastructure and construction projects. Volue’s critical services
paves the way for a clean, ﬂexible, reliable and proﬁtable energy future.
NSSL Global
NSSLGIobaI is a leading independent provider of satellite communications and IT
solutions in a global market. The company is committed to delivering high-quality
voice and data services to customers anywhere in the world. NSSLGlobal’s activities
are divided into the areas Airtime, Projects, Hardware, and Service.
ENRX
ENRX was formed through the combination of EFD Induction and the wireless
charging solutions provider IPT Technology, which was acquired by AFK during the
second quarter. ENRX delivers advanced green power technology based on induc-
tion technology, with activities in three main areas: Induction Heating Machines,
Induction Power Systems, Spares and Services, and the new area of Wireless
Charging Solutions. ENRX’s primary customer base operates within the automotive
industry, renewables/wind turbines, pipe production, the electronics industry, the
cable industry, and mechanical engineering.
Tekna
Tekna is a world-leading provider of advanced materials for 3D printing in the aero-
space, medical and automotive sectors, and is well positioned in the growing market
for advanced nanomaterials within the global electronics and batteries industries.
Property
AFK Property comprises all property related companies and property investments.
Alytic
Alytic develops sustainable companies with strong domain competence and data at
the core. In many sectors and markets there is a large untapped potential for utilizing
data effectively to gain insight and make qualiﬁed decisions. This includes better
solutions to process, analyze, and visualize available information.
Ampwell
Ampwell was established by Arendals Fossekompani in 2022 to build an eco-sys-
tem for battery technology and a Battery-as-a-Service business model. Ampwell will
accomplish this by combining hardware, software, other technologies and dedicated
competence. Ampwell is majority owner in the energy storage specialist Commeo
GmBH and 40% ownership in the software company Cellect Energy S.L.
Vergia
Vergia was established by Arendals Fossekompani in 2022. The Vergia ecosystem
includes verticals such as small-scale hydropower, energy parks, power-to-x, off-
shore wind and green fuel. Vergia is owned 100% by Arendals Fossekompani.
NOTE 1 GEOGRAPHICAL SEGMENTS
(1 000 NOK)
Geographical
segments
Norway
Europe
Asia
North America
Consolidated
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
Revenue
1 200 009
2 366 197
2 370 382
1 802 931
616 381
483 647
399 765
366 916
4 586 536
4 232 290
Segment
assets
3 553 373
14 164 847
3 049 811
2 296 486
603 470
516 987
633 809
517 030
7 840 462
6 837 898
Hydropower
Group Management
Total
Parent Company
2022
2021
2022
2021
2022
2021
Revenue and other income
606 018
373 226
22 070
9 146
628 087
382 372
Operating expenses
61 407
64 906
103 718
68 661
165 124
133 566
Depreciation, amortization and impairment
9 567
9 989
3 899
3 312
13 466
13 301
Operating income
535 044
298 332
-85 547
-62 827
449 497
235 505
Net ﬁnancial items
546 956
1 345 469
546 956
1 345 469
Income tax expense
387 028
129 584
5 121
29 837
392 149
159 421
Proﬁt (-loss)
continuing operations
148 016
168 748
456 289
1 252 805
604 305
1 421 553
Total assets
222 622
238 329
4 015 522
3 390 344
4 238 145
3 628 673
Total liabilities
447 710
170 891
763 070
585 994
1 210 780
756 885
Net interest bearing debt
-1 279 127
-950 260
-1 279 127
-950 260
NOTE 2 OTHER INCOME
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Other income
11 646
32 030
4 518
4 527
Other income, intercompany
17 667
6 839
Gain sales of assets
1 946
396
503
348
Grants/subsidies
4 470
3 484
Other income
18 002
35 910
22 687
11 713
166
167
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 3 BUSINESS COMBINATIONS
(1000 NOK)
ACQUISITION OF COMMEO GMBH (AMPWELL SEGMENT)
On 6 April 2022 Arendals Fossekompani ASA acquired 54.9% of the issued share cap-
ital in Commeo GmbH, a German company specialising in energy storage and energy
management solutions. Commeo provides solutions for commercial and industrial
energy storage by manufacturing battery modules and rack systems, including con-
trol units and software for monitoring and data logging. Commeo's battery system is
modular and therefore scalable from kW to MW scale. At acquisition date Commeo
employs 50 people and plans to build new production facilities.
Acquistion of Commeo GmbH
Purchase consideration
Cash paid
72 126
Deferred consideration
21 194
Total purchase consideration 54.9%
93 319
Total consideration based on 100.00%
169 981
The assets and liabilities recognised as a result of the
acquisition of Commeo GmbH on 100% basis are as follows:
Order backlog
7 554
Customer relationships
23 625
Technology
82 416
Property and plant
1 862
Vehicles, machinery and equipment
37 055
Inventory
43 561
Accrued revenues over time
1 052
Trade and other receivables
6 983
Cash and cash equivalents
6
Subordinated loan from shareholders (*)
-32 487
Deferred tax liability
-4 676
Loans and Borrowings
-100 780
Accruals
-2 580
Provisions
-34 141
Trade and other payables
-15 438
Other current liabilities
-62 732
Net identiﬁable assets acquired
-48 718
Added goodwill
218 699
Net assets required
169 981
The net identiﬁable assets are acquired at fair value. (*) In addition, Arendals
Fossekompani has taken over as debtor for shareholders loans of total NOK 32.5 million.
The goodwill is attributable to the workforce and allocated to Ampwell segment.
This acquisition is part of the Ampwell growth strategy to build an eco-system for
battery technology and a Battery-as-a-Service business model. There is believed to
be a signiﬁcant growth potential for the products and services Commeo will be able
to deliver within the Ampwell strategy.
The acquired business contributed with revenues of NOK 105 million and a net loss of
NOK 47 million to the group for the period 6 April to 31 December 2022. If the acquisition
had occurred on 1 January 2022, consolidated pro-forma revenues and proﬁt for the
year ended 31 December 2022 would have been NOK 123 million for revenues and
NOK 56 million as a net loss.
Outﬂow of cash to acquire subsidiary, net of cash acquired
Cash consideration
72 126
Less cash acquired
-6
Net outﬂow of cash - investing activities
72 119
ACQUISITION OF FACTLINES AS (ALYTIC SEGMENT)
On 28 April 2022 Alytic AS acquired 62.4% of the issued share capital in Factlines AS,
a Norwegian company spexcialising in offering a digital solution for securing respon-
sible supply chains.
Factlines supports the process from requirements and code of
conduct - to risk analysis, follow-up and dialogue. On 1 July 2022 the Transparancy
Act entered into force in Norway. The purpose of the act is to promote enterprises'
respect for fundamental human rights and decent working conditions in connection
with the production of goods and the provision of services. Documentation of supply
chains is now required by law, and Factlines offers a digital solution to ensure com-
pliance with these new requirements.
Acquistion of Factlines AS
Purchase consideration
Cash paid
983
Liquidity infusion by Alytic on behalf of NCI of 37.56%
9 059
Total purchase consideration 62.44%
10 043
Total consideration based on 100.00%
16 082
The assets and liabilities recognised as a result of
the acquisition of Factlines AS on 100% basis are as follows:
Other intangible assets
6 546
Vehicles, machinery and equipment
23
Trade and other receivables
2 518
Cash and cash equivalents (*)
179
Loans and Borrowings
-2 344
Provisions
-717
Trade and other payables
-2 818
Other current liabilities
-1 085
Net identiﬁable assets acquired
2 301
Added goodwill
13 781
Net assets required
16 082
The net identiﬁable assets are acquired at fair value. (*) Cash and cash
equivalents before Alytic's liquidity infusion of total tNOK 24 123 into Factlines AS.
The goodwill is attributable to the workforce and allocated to Alytic segment.
Factlines offers a highly competent team, a great software-as-a-service solution, a
solid customer base and is believed to have a huge potential.
168
169
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
The acquired business contributed with revenues of tNOK 2 471 and a net loss of
tNOK 5 063 to the group for the period April 28th to December 31st 2022. If the acqui-
sition had occurred on January 1st 2022, consolidated pro-forma revenues and proﬁt
for the year ended 31st December 2022 would have been tNOK 4 385 for revenues
and tNOK 6 830 as a net loss.
Outﬂow of cash to acquire subsidiary, net of cash acquired
Cash consideration
10 043
Less cash acquired
-179
Net outﬂow of cash - investing activities
9 864
ACQUISITION OF IPT TECHNOLOGY GMBH (ENRX SEGMENT)
On 19 May 2022 Induction Holding AS acquired 100% of the issued share capital in
IPT Technology GmbH, a German company specialising in wireless energy for indus-
trial and e-mobility applications.
ENRX Group was estabished when ENRX Group
acquired 100% of the shares in Induction Holding AS from Arendal Fossekompani
ASA end of June 2022. IPT Technology GmbH and EFD Induction have complemen-
tary induction technology and with the trend towards electriﬁcation that is taking
place in the industrial segment, and the general trend towards electric vehicles, it
is believed to be a signiﬁcant growth potential for the products and services these
companies will be able to deliver together.
Acquistion of IPT Technology GmbH
Purchase consideration
Cash paid
151 554
Total purchase consideration
151 554
The assets and liabilities recognised as a result of
the acquisition of IPT Technology GmbH are as follows:
Order backlog
7 745
Customer relations
2 454
Technology
77 373
Vehicles, machinery and equipment
1 158
Inventory
11 048
Advances paid to suppliers
698
Trade accounts receivables
1 378
Other current receivables
1 202
Bank deposits
18 455
Deferred tax liability
-9 837
Trade and other payables
-6 501
Other current liabilities
-42 112
Advances received from customer
-9 914
Net identiﬁable assets acquired
53 147
Added goodwill
98 407
Net assets required
151 554
The acquired intangible assets consist of technology, patents, order backlog
and customer relationships. The net identiﬁable assets are acquired at fair value.
Outﬂow of cash to acquire subsidiary, net of cash acquired
Cash consideration
151 554
Less cash acquired
-18 455
Net outﬂow of cash - investing activities
133 099
ACQUISITION OF LONGUM PROPERTY AS (PROPERTY SEGMENT)
In April 2022, AFK Property acquired 100% of the shares in Longum Property AS.
Longum Property owns 170,000 sqm of mostly commercial land located outside
the city of Arendal. The property is close to the E18 highway on route to the main
production site of the coming Morrow battery factory. The land is also in the vicinity
of Bedriftsveien 17, which is also in the portfolio of AFK property.
The goodwill is solely related to deferred tax liability regarding added fair value of the
acquired land. The acquired business contribution to revenues and cost for the group
for the period are insigniﬁcant.
Acquistion of Longum Property AS
Total purchase consideration
9 282
Cash paid
9 282
The assets and liabilities recognised as a result of
the acquisition of Longum Property AS are as follows:
Land
9 002
Trade accounts receivables
102
Cash and cash equivalents
205
Deferred tax liability
-738
Other current liabilities
-27
Net identiﬁable assets acquired
8 544
Added goodwill
738
Net assets required
9 282
The goodwill is attributable to the workforce and the high synergies between the
two businesses. It will not be deductible for tax purposes. The acquired business
contributed revenues of NOK 13,1 million and a net loss of NOK 23,2 million to the
group for the period May 19th to December 31st 2022. If the acquisition had occured
on January 1st 2022, consolidated pro-forma revenues and proﬁt for the year ended
December 31st 2022 would have been NOK 16,7 million for operating revenues and
NOK 35,4 million as a net loss.
Outﬂow of cash to acquire subsidiary, net of cash acquired
Cash consideration
9 282
Less cash acquired
-205
Net outﬂow of cash - investing activities
9 077
SUBSIDIARIES ACQUIRED IN 2021
Volue acquired 100% of the shares in Procom Gmbh, Alytic acquired 97% of the
shares in Utel systems AS and 60% of the shares in Greenfact AS. None of these
transactions were signiﬁcant for the AFK Group.
170
171
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 4.1 EMPLOYEE BENEFIT EXPENSES
( 1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Salaries
1 579 526
1 336 072
62 573
53 199
Social security contributions
180 354
135 431
7 784
7 096
Pension costs
63 505
56 719
4 242
3 617
Capitalised cost
-207 360
-156 125
Share-based payments
15 239
797
Other beneﬁts
59 852
49 834
2 973
1 789
Total employee beneﬁts
1 691 116
1 421 931
78 370
65 700
Average number of
full-time headcounts
2 381
2 179
35
28
2022
Salaries,
fees
Previous
year’s
bonus paid
out this year
Beneﬁts
in kind
Total
remune-
ration
Share-
based
payment
Accrued
pension
costs
Number
of board
meetings (i)
Senior executives
Ørjan Svanevik, CEO
4 988
2 379
298
7 665
250
130
Lars Peder Fensli, CFO
2 171
591
27
2 789
125
116
Morten Henriksen,
Executive Vice President
2 768
703
27
3 498
125
118
Torkil Mogstad,
Executive Vice President
2 028
513
27
2 568
125
96
Ingunn Ettestøl, CSO
1 702
376
27
2 105
83
135
Board members, audit and
compensation committees
Trond Westlie,
Chairman from 06.05.2022
470
470
5
Jon Hindar, Chairman,
til 06.05.2022 (iii)
205
205
5
Morten Bergesen, Deputy
Chairman, (ii), (iii), (iv)
436
436
10
Didrik Vigsnæs, Board Member
367
367
10
Christian Must, Board member
387
387
10
Heidi Marie Petersen, Board
Member, until 06.05.2022
107
107
1
Kristine Landmark,
Board Member, until 06.05.2022
107
107
4
Stine Rolstad Brenna,
Board Member, (ii)
419
419
9
Lise Lindback, Board
Member from 06.05.2022
250
250
5
Anne Grethe Dalane, Board
member, from 06.05.2022 (ii)
269
269
5
Total remuneration
16 674
4 562
406
21 642
708
595
2021
Salaries,
fees
Previous
year’s
bonus paid
out this year
Beneﬁts
in kind
Total
remun-
eration
Share-
based
payment
Accrued
pension
costs
Number
of board
meetings (i)
Senior executives
Ørjan Svanevik, CEO
4 851
4 001
293
9 145
122
Lars Peder Fensli, CFO
2 089
888
23
3 000
109
Morten Henriksen,
Executive Vice President
2 664
2 581
31
5 276
115
Torkil Mogstad,
Executive Vice President
1 955
754
28
2 737
100
Ingunn Ettestøl, ESG Director
1 541
520
22
2 083
127
Board members, audit and
compensation committees
Jon Hindar, Chairman, (iii)
614
614
13
Morten Bergesen, Deputy
Chairman, (ii), (iii), (iv)
324
324
13
Didrik Vigsnæs, Board Member
341
341
13
Arild Nysæther, Board Member,
til 06.05.2021 (ii), (iii)
160
160
7
Christian Must, from 06.05.2021 (ii)
253
253
6
Heidi Marie Petersen,
Board Member
347
347
13
Kristine Landmark, Board Member
321
321
13
Stine Rolstad Brenna,
Board Member, (ii)
394
394
13
Total remuneration
15 854
8 744
397
24 995
573
(i) 10 Board meetings were held in 2022 and 13 in 2021.
(ii) Member of Audit Commitee
(iii) Member of Compensation Committee
(iv) Member of Nomination Committee
In addition, tNOK 155 (186) was paid in pensions to former board members.
Senior executives participate in the collective pension scheme for employees of the parent company and subsidiaries. Refer to the
description in the note on pensions. All companies in the Group have phased out deﬁned-beneﬁt pension schemes with effect from
31 December 2015. Bonuses, options and other beneﬁts are not pensionable. Senior executives of the Group received no remuner-
ation or beneﬁts from other Group companies except as shown above. No additional remuneration was paid for special services
beyond normal management duties. Regarding loans and security provided to members of the management team, the Board of
Directors and other elected bodies of the company refer to Note 24.
Employment terms for the CEO and other senior executives:
On 16 December 2022 it was announced that Ørjan Svanevik resigns as CEO of Arendals Fossekompani. Formal resignation date
is 30 June 2023. The following severance pay has been agreed for the CEO in the event the termination of his employment: Salary
will be paid during the notice period (6 months). In addition he will receive a severance pay amounting to 6 months of salary. Total
accrued cost for severance pay for the CEO amounts to NOK 6,2 million including social security taxes.
As part of new incentive program for senior executives in AFK in May 2022, the CEO was given the right to buy 15 637 shares in the
company at a 20% discount with a tie-in period of three years. Each year, Lars Peder Fensli, Morten Henriksen, Torkil Mogstad and
Ingunn Ettestøl have the right to buy 7 819
shares on the same terms. As part of the severance agreement, the CEO may keep these
shares after resignation. The shares are subject to the original requirements including the lock-up period.
Executives may borrow up to two-thirds of the purchase price for the shares on the same terms as ordinary employee loans. Loans
are secured by a mortgage on the shares and run as long as the employment relationship lasts. As part of the severance agreement,
the loan granted to the CEO may be continued after resignation and subject to the existing loan terms.
172
173
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 4.2 PENSION LIABILITIES
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Pension liabilities
Present value of unfunded liabilities
10 626
10 871
5 573
6 215
Present value of funded liabilities
76 592
79 341
45 927
45 891
Fair value of pension assets
-91 682
-95 967
-57 968
-59 750
Recognised employers’ contributions
786
876
786
876
Present value of net liabilities
-3 679
-4 878
-5 683
-6 768
Of which presented as pension assets
24 993
28 365
12 041
13 859
Other pension liabilities
2 274
1 866
Gross pension liabilities
23 588
25 353
6 358
7 091
Change in recognised net liability
for deﬁned-beneﬁt pensions
Net funded deﬁned-beneﬁt
pension liability as at 1 January
-15 049
-3 586
-13 859
-9 621
Liability for unfunded schemes as at 1 January
10 327
7 197
7 091
7 197
Paid-in contributions
1 731
-815
-997
-1 070
Paid out from the scheme
-3 638
-4 378
-535
-549
Actuarial (gains) losses from
other comprehensive income
1 095
-3 218
2 615
-2 823
Exchange rate changes, pension liabilities
418
-70
Costs of deﬁned-beneﬁt schemes
10
534
2
98
Net liability for deﬁned-beneﬁt
schemes as at 31 December
-5 106
-4 337
-5 683
-6 768
Costs recognised in the income statement
Costs relating to this period’s pension entitlements
373
444
Interest on the liabilities
1 588
1 297
961
881
Expected return on pension plan assets
-1 946
-1 802
-1 120
-950
Recognised employers’ contributions
-5
595
162
168
Expenses from deﬁned beneﬁt plans
10
534
2
98
Costs of deﬁned-contribution pension schemes
61 954
54 477
2 922
2 178
Net interest on pension
liabilities transferred to ﬁnance
222
438
70
Transfer effect of discontinuation
of separate line in income statement
1 318
1 270
1 318
1 270
Total pension costs
63 505
56 719
4 242
3 617
Actual return on pension plan assets
-1 526
8 178
-950
5 515
Development of the Group’s
funded pension liabilities
Present value of funded liabilities
76 592
79 341
45 927
45 891
Fair value of pension assets
-91 682
-95 967
-57 968
-59 750
Net result
-15 090
-16 625
-12 041
-13 859
PENSION OBLIGATIONS / COSTS
The Group's Norwegian companies are obligated to maintain an occupational pen-
sion scheme pursuant to the Mandatory Occupational Pension Scheme. The pension
scheme satisﬁes statutory requirements. The pension scheme includes a retirement
pension, disability pension and survivor pension. With effect no later than 31.12.2015,
all the companies in the Group discontinued their deﬁned beneﬁt plan.
NOTE 4.3 SHARE-BASED PAYMENTS
4.3.1 EMPLOYEE SHARE OPTION PLAN - VOLUE GROUP
The amended guidelines for remuneration of leading persons in the Volue group
including the establishment of the share option plan was approved by the share-
holders at the 2021 extraordinary general meeting.
The share option plan is based on a structure in which the Company's senior manage-
ment and certain other key employees are granted share options in the Company.
Each share option carries the right to acquire one share in the Company. The total
number of share options that may be issued under the plan is 2,397,747 for the ﬁrst-
year grant of options and 2,867,621 for the second-year grant of options.
The share options vest three years after the date of grant (service condition) and will
lapse if not exercised within seven years following the date of grant. For the share
options to vest, a minimum average share price development of 4.5% p.a. is required
(performance condition).
Upon any exercise of share options, the Company may settle its obligations by
selling the relevant number of shares or by payment in cash. The share option
plan has been treated as an equity-settled plan under IFRS. The strike price of the
share options will be based on the volume weighted average share price over the
ten last trading days preceding the grant date. The total proﬁt each option holder
may achieve shall be limited to 300% of the fair market value of the share at grant.
Summary of share options granted under the plan:
2022
2021
Average exercise
price per share
option (NOK)
Number
of options
Average
exercise price
per share option
Number
of options
As at 1 January
70,00
1 781 085
0
0
Granted during the year
34,90
2 658 229
70,00
1 781 085
Exercised during the year
0
0
0
0
Forfeited during the year
70,00
107 875
0
0
As at 31 December
48,46
4 331 439
70,00
1 781 085
Vested and exercisable
at 31 December
0
0
No options expired during the periods covered by the tables above.
Share options outstanding at the end of the year have the following expiry dates and
exercise prices:
Grant date
Expiry date
Exercise
price (NOK)
Share options
31 December 2022
Share options
31 December 2021
21-Dec
-21
20
-Dec
-28
70,00
1 673 210
1 781 085
19-Dec
-22
18
-Dec
-29
34,90
2 658 229
0
Total
4 331 439
1 781 085
Weighted average remaining contractual
life of options outstanding at end of period
6.58 years
6.97 years
174
175
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
FAIR VALUE OF OPTIONS GRANTED
The assessed fair value at grant date of options granted during the year ended 31
December 2022 was NOK 7,6 per option (2021 – NOK 15,2). The fair value at grant
date is independently determined using an adjusted form of the Black-Scholes
model that considers the exercise price, the term of the option, the share price at
grant date and expected price volatility of the underlying share, the expected divi-
dend yield, the risk-free interest rate for the term of the option, and the volatilities of
the peer group companies.
The model inputs for options granted:
a. Options are granted for no consideration and vest after three years (service con-
dition) and based on minimum share price development (performance condition).
Vested options are exercisable for a period of four years after vesting.
b. Exercise price 34,90 (2021 – 70.00)
c. Grant date:
19 December 2022 (2021 – 21 December 2021).
d. Expiry date: 18 December 2029 (2021 – 20 December 2028).
e. Share price at grant date: 28,99 (2021 – 56,15).
f.
Expected price volatility of the company’s shares: 40% (2021 – 40%).
g. Expected dividend yield: 0.00% (2021 – 0.00%).
h. Risk-free interest rate: 3.86% (2021 – 3.86%).
The estimated expected price volatility is based on median of volatilities of the peer
group companies over an historical period of 5 years since Volue has a short historical
period only. The estimated expected lifetime of the options is set at 5 years.
Total expenses arising from share options are recognized during the period as part of
employee beneﬁt expenses and based on expected vesting of 75% regarding service
condition.
4.3.2 Employee share scheme - Arendals Fossekompani ASA
In May 2022, the Board of Directors in Arendal Fossekompani ASA approved a new
incentive program for senior management and key employees which implies senior
management is allowed to purchase a certain maximum number of shares in the
Company each year. The shares are offered with 20% discount and three years
lock-up period.
In May 2022, senior management and key employees purchased 49,856 shares from
the Company with 20% discount and a lock-up period of three years resulting in a
share price of NOK 287,78. The price has been calculated based on a weighted aver-
age stock market price of NOK 359,72 for the period 4-6 May.
4.3.3 Employee share scheme - Alytic Group
In 2021, the Board of Directors in Alytic AS approved a new incentive program for
senior management and key employees which implies senior management is
allowed to purchase a certain maximum number of shares in the Company each
year. The shares are offered with 20% discount without any lock-up period.
During 2022, senior management and key employees purchased 63,100 shares from
the Company with 20% discount resulting in a share price of NOK 93,33. The price
has been calculated based on equity investments in the Company resulting in an
estimated stock market price of NOK 116,66.
4.3.4 Employee share scheme - ENRX group
ENRX group granted performance shares to all employees for the share price of
NOK 47,68 per share (exercise price) with a lockup period of 3 years. The cost of the
equity settled transactions is determined by the fair value at grant date using an
appropriate valuation model in form of a Discounted Cash Flow (DCF) model with
several underlying assumptions.
The fair value of the shares granted is calculated
at NOK 77,64 per share. The value between the exercise price of the performance
shares and the calculated fair value of the performance shares is expensed over the
vesting period equal to the lockup period. The lockup period started 1 January 2022.
4.3.5 Expenses arising from share-based payment transactions
Total expenses arising from share-based payment transactions recognized during
the period as part of employee beneﬁt expense were as follows:
(1000 NOK)
2022
2021
Options issued under employee share option plan in Volue
9 100
0
Shares purchased under employee share scheme in AFK
800
0
Shares purchased under employee share scheme in Alytic
1 470
0
Shares purchased under employee share scheme in ENRX
3 870
0
Total expenses
15 240
0
176
177
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 5 PROPERTY, PLANT & EQUIPMENT
(1 000 NOK)
Group 2021
Cost
Hydro
power
plants
Under
constr-
uction
Vehicles,
machinery
and equip-
ment
Buildings
and land
Right-
of-use
vehicles,
machinery
and eq.
Right-
of-use
buildings
and land
Property,
plant and
equipment
Balance at
1 January 2021
311 951
26 449
979 509
580 017
17 674
272 580
2 188 180
Additions
11
17 955
54 764
40 926
113 655
Aquisitions through
business combinations
1 346
514
1 860
Disposal
42
-17 771
-33 918
8 846
-22 723
-65 523
Disposal of companies
and businesses
Transferred from
under construction
-6 988
6 988
No longer in use
-38 496
-400
-38 896
Change in RoU
-825
56 235
55 409
Effect of movements
in exchange rates
850
10 095
2 024
-389
3 110
15 689
Balance at
31 January 2021
311 961
38 308
996 435
588 649
25 305
309 716
2 270 375
Depreciation and
impairment losses
Balance at
1 January 2021
-174 467
-792 661
-167 331
-3 934
-64 312
-1 202 704
Depreciation
-6 200
-69 752
-26 257
-6 414
-62 095
-170 718
Impairment
-606
-606
Reallocated to
operating cost *
-11 030
-11 030
Aquisitions through
business combinations
-270
-270
No longer in use
38 465
421
38 886
Disposal
16 107
11 036
-9 318
492
18 316
Change in RoU
3 425
2 936
6 361
Effect of movements
in exchange rates
-8 397
-338
210
-1 410
-9 935
Balance at
31 January 2021
-180 666
-828 145
-182 469
-16 031
-124 388
-1 331 700
Book value at
1 January 2021
137 484
26 449
186 849
412 686
13 740
208 268
985 476
Book value at
31 December 2021
131 295
38 308
168 290
406 179
9 274
185 328
938 675
NOTE 5 PROPERTY, PLANT & EQUIPMENT
(1 000 NOK)
Group 2022
Cost
Hydro
power
plants
Under con-
struction
Vehicles,
machinery
and equip-
ment
Buildings
and land
Right-
of-use
vehicles,
machinery
and eq.
Right-
of-use
buildings
and land
Property,
plant and
equipment
Balance at
1 January 2022
311 961
38 308
996 435
588 649
25 305
309 716
2 270 375
Additions
5 946
40 698
91 746
11 748
191
890
151 217
Aquisitions through
business combinations
1 075
35 334
10 774
200
2 204
49 587
Disposal
-73
-270 080
-1 038
-1 983
-7 844
-281 018
Transferred from
under construction
-7 441
7 441
Reclassiﬁcation
-13 123
10 046
2 893
183
No longer in use
-53 367
-1 043
-54 410
Change in RoU
5 266
103 042
108 309
Effect of movements
in exchange rates
3 008
18 755
7 609
993
8 808
39 173
Balance at
31 December 2022
317 833
62 526
836 310
619 560
30 156
416 816
2 283 201
Depreciation and
impairment losses
Balance at
1 January 2022
-180 666
0
-828 145
-182 469
-16 031
-124 388
-1 331 700
Depreciation
-6 106
-73 271
-26 810
-7 133
-70 355
-183 674
Impairment
-202
-202
Aquisitions through
business combinations
-3 548
-3 548
Reclassiﬁcation
0
174
-174
No longer in use
53 181
1 229
54 410
Disposal
73
267 055
10
1 983
7 844
276 966
Change in RoU
1 435
10 568
12 003
Effect of movements
in exchange rates
0
-15 800
-2 601
-565
-2 463
-21 429
Balance at
31 December 2022
-186 699
0
-597 181
-214 015
-20 400
-178 793
-1 197 089
Book value at
1 January 2022
131 295
38 308
168 290
406 179
9 274
185 328
938 675
Book value at
31 December 2022
131 134
62 526
239 129
405 545
9 756
238 023
1 086 112
* Reallocation is due to change in accounting principles regarding cloud computing (SaaS arrangements)
Provision of security
As at 31 December 2022 operating assets in the subsidiaries with a book value of tNOK 316 762
(2021: tNOK 343 078) were pledged as security for bank loans (see Note 17).
178
179
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 5 PROPERTY, PLANT & EQUIPMENT
(1 000 NOK)
Parent Company 2021
Cost
Hydro
power
plants
Under
construc-
tion
Vehicles,
machinery
and equip-
ment
Buildings
and land
Right-
of-use
vehicles,
machinery
and eq.
Right-
of-use
buildings
and land
Property,
plant and
equipment
Balance at
1 January 2021
311 951
2 966
13 940
4 756
22 576
356 188
Additions
11
5 222
1 954
7 187
Disposal
-1 336
-1 336
Transferred from
under construction
-1 953
1 953
Change in RoU
504
1 170
1 673
Balance at
31 December 2021
311 961
6 235
16 511
4 756
504
23 746
363 713
Depreciation and
impairment losses
Balance at
1 January 2021
-174 467
-7 338
-1 949
-183 753
Depreciation
-6 200
-1 855
-14
-3 298
-11 367
Disposal
1 336
1 336
Balance at
31 December 2021
-180 666
-7 857
-14
-5 247
-193 785
Book value at
1 January 2021
137 484
2 966
6 602
4 756
20 627
172 435
Book value at
31 December 2021
131 295
6 235
8 653
4 756
490
18 499
169 928
NOTE 5 PROPERTY, PLANT & EQUIPMENT
(1 000 NOK)
Parent Company 2022
Cost
Hydro
power
plants
Under con-
struction
Vehicles,
machinery
and equip-
ment
Buildings
and land
Right-
of-use
vehicles,
machinery
and eq.
Right-
of-use
buildings
and land
Property,
plant and
equipment
Balance at
1 January 2022
311 961
6 235
16 511
4 756
504
23 746
363 713
Additions*
5 946
-5 055
22 938
23 828
Disposal
-73
-421
-494
Transferred from
under construction
Change in RoU
47 253
47 253
Balance at
31 December 2022
317 833
1 180
39 028
4 756
504
70 999
434 300
Depreciation and
impairment losses
Balance at
1 January 2022
-180 666
-7 857
-14
-5 247
-193 785
Depreciation
-6 106
-1 742
-168
-3 516
-11 532
Disposal
73
421
494
Balance at
31 December 2022
-186 699
-9 179
-182
-8 763
-204 823
Book value at
1 January 2022
131 295
6 235
8 653
4 756
490
18 499
169 928
Book value at
31 December 2022
131 134
1 180
29 849
4 756
322
62 236
229 477
* Negative addition of under construction assets of tNOK 5 055 is a reversal
of wrongly capitalized costs that should have been expensed as operating expenses.
180
181
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 6 INTANGIBLE ASSETS
(1 000 NOK)
Group 2021
Cost
Goodwill
Other
intangible
assets
Concessions
Capitalised
development
cost
Intangible
assets under
development
Intangible
assets and
goodwill
Balance at
1 January 2021
700 526
431 062
12 250
462 079
46
1 605 963
Additions
1 476
120 171
16 750
138 396
Aquisitions through
business combinations
25 879
23 978
7 158
57 015
Reclassiﬁcation
-20 779
9 387
11 392
No longer in use
-138 674
-266 812
-405 487
Under development
-1 489
1 489
Effect of movements
in exchange rates
1 219
3 857
1 317
120
6 513
Balance at
31 January 2021
727 624
299 430
12 250
333 300
29 796
1 402 401
Amortization and
impairment losses
Balance at
1 January 2021
-39 459
-282 983
-7 069
-312 107
-641 618
Amortization
-16 468
-245
-41 658
-58 370
Impairment
-1 174
-73
-4 650
-5 897
Aquisitions through
business combinations
-591
-591
No longer in use
138 674
266 767
405 441
Effect of movements
in exchange rates
-4 045
-5 101
-242
-9 388
Balance at
31 January 2021
-44 678
-166 541
-7 314
-91 891
-310 424
Book value at
1 January 2021
661 068
148 079
5 181
149 972
46
964 345
Book value at
31 December 2021
682 946
132 889
4 936
241 409
29 796
1 091 977
NOTE 6 INTANGIBLE ASSETS
(1 000 NOK)
Group 2022
Cost
Goodwill
Other
intangible
assets
Concessions
Capitalised
development
cost
Intangible
assets under
development
Intangible
assets and
goodwill
Balance at
1 January 2022
727 624
299 430
12 250
333 300
29 796
1 402 401
Additions
27 004
176 347
5 175
208 525
Aquisitions through
business combinations
331 625
174 383
31 376
523 302
Reclassiﬁcation
654
-556
-98
No longer in use
-11 587
-11 587
Under development
3 838
-3 838
Effect of movements
in exchange rates
16 189
21 425
1 859
632
54 188
Balance at
31 January 2022
1 075 438
511 310
12 250
546 165
31 666
2 176 829
Amortization and
impairment losses
Balance at
1 January 2022
-44 678
-166 541
-7 314
-91 891
-310 424
Amortization
-204
-42 175
-245
-61 684
-104 308
Impairment
-808
-8 680
-9 489
Aquisitions through
business combinations
-1 797
-1 797
Reclassiﬁcation
649
-649
No longer in use
10 544
10 544
Effect of movements
in exchange rates
1 750
-5 480
-844
-4 573
Balance at
31 December 2022
-43 131
-205 609
-7 559
-163 748
-420 047
Book value at
1 January 2022
682 946
132 889
4 936
241 409
29 796
1 091 977
Book value at
31 December 2022
1 032 307
305 701
4 691
382 417
31 666
1 756 782
182
183
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 6 INTANGIBLE ASSETS
(1 000 NOK)
Parent Company 2021
Cost
Goodwill
Other
intangible
assets
Concessions
Capitalised
development
cost
Intangible
assets under
development
Intangible
assets and
goodwill
Balance at
1 January 2021
8 539
12 250
46
20 835
Additions
375
375
No longer in use
-384
-46
-430
Balance at
31 December 2021
8 530
12 250
20 780
Amortization and
impairment losses
Balance at
1 January 2021
-1 497
-7 069
-8 566
Amortization
-1 689
-245
-1 934
No longer in use
384
384
Balance at
31 December 2021
-2 802
-7 314
-10 116
Book value at
1 January 2021
7 042
5 181
12 268
Book value at
31 December 2021
5 728
4 936
10 664
Parent Company 2022
Cost
Goodwill
Other
intangible
assets
Concessions
Capitalised
development
cost
Intangible
assets under
development
Intangible
assets and
goodwill
Balance at
1 January 2022
8 530
12 250
20 780
Balance at
31 December 2022
8 530
12 250
20 780
Amortization and
impairment losses
Balance at
1 January 2022
-2 802
-7 314
-10 116
Amortization
-1 689
-245
-1 934
Balance at
31 December 2022
-4 490
-7 559
-12 049
Book value at
1 January 2022
5 728
4 936
10 664
Book value at
31 December 2022
4 040
4 691
8 731
NOTE 6 INTANGIBLE ASSETS
(1 000 NOK)
A breakdown of the allocation of intangible assets between the companies is provided below.
Other
intangible
assets
Goodwill
Concessions
Capitalised
develop-
ment cost
Intangible
assets under
development
Total
Intangible assets by company
Arendals Fossekompani
4 040
4 691
8 731
Volue
49 407
271 184
290 221
12 552
623 364
ENRX
80 558
219 611
55 675
1 139
356 983
NSSLGlobal
640
271 145
271 785
Tekna
46 656
6 642
8 860
62 158
Alytic
13 429
47 434
20 247
9 116
90 227
Ampwell
110 970
222 195
9 632
342 797
AFK Property
738
738
Total intangible assets
305 701
1 032 307
4 691
382 417
31 666
1 756 782
Other intangible assets consist mainly of technology, patents and trademarks, cus-
tomer relationships and customer contracts. Capitalised development cost consist
mainly of software development and platform development.
Concession rights in
the parent company are amortised over the term of the concession (50 years). Other
intangible assets are amortised over periods of 4 to 10 years.
Goodwill is tested annually for impairment (see accounting policies and Note 21).
In this testing each segment/subgroup is assessed as
a cash-generating unit. The
recoverable amount of goodwill is estimated based on value in use. Estimated value
in use is based on discounted future cash ﬂows. These measure the cash ﬂows based
on market requirements of return and risk. Value in use for 2022 has been calcu-
lated in the same way as in 2021. Budgets have been used for 2023 andlong-term
forecasts from strategy plans for the period up to 2027.
In addition, a convergence
period of 5 years is applied to bridge 2027 ﬁnancials to a terminal period with an
applied growth rate of 2.0%. The risk-free interest rate has been assessed sepa-
rately for each company. A risk premium between
5.9% and 7.0% was used in the
calculations. Moreover, scenario weighting and peer multiple analyses are used for
sensitivity purposes. Special circumstances relating to the individual calculations
are commented on below.
Volue
Volue is listed on Oslo Stock Exchange and the value as per 31.12.2022 was MNOK
4,050 while the booked equity of the company as per 31.12.2022 was MNOK 809.
The marked value can decrease by more than 80% before an impairment may be
needed.
ENRX
The Required Rate of Return (WACC before tax) has been set to 11.5%. When cal-
culating the WACC consideration is given to the fact that the company's earnings
are in EUR and USD, and that the business is cyclical. The risk-free rate of return has
been set to 3.0%. A sensitivity analysis based on a unilateral change in estimated
future EBITDA shows that a reduction of more than 31% may lead to impairment.
Equivalently, a 2.7 percentage point change in WACC may cause impairment.
184
185
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NSSLGlobal
The Required Rate of Return
(WACC before tax) has been set to 11.2%. The risk-free
rate of return has been set to 3.3%. When calculating the WACC consideration is
given to the fact that the company's earnings are in GBP and USD.
A sensitivity anal-
ysis based on a unilateral change in estimated future EBITDA shows that a reduction
of more than 73% may lead to impairment.
Tekna
Tekna is listed on Oslo Stock Exchange and the value as per 31.12.2022 was MNOK
739, while the booked equity of the company as per 31.12.2022 is MNOK 389. The
marked value can decrease by more than 47% before an impairment my be needed.
Alytic
The Required Rate of Return (WACC before tax) has been set to 12.6%. When calcu-
lating the WACC, consideration is given to the fact that the company’s earnings are
mainly in NOK, and that the portfolio companies to a large degree have a SaaS busi-
ness model. The risk-free rate of return has been set to 2.8%. A sensitivity analysis
based on a unilateral change in estimated future EBITDA shows that a reduction of
more than 52% may lead to impairment.
Ampwell
Goodwill of NOK 222 million is related to the acquisition of Commeo GmbH in 2022.
We refer to note 3 for the purchase price analysis at acquisition date. Goodwill is
determined in Euro and subject to FX translation effects at reporting date.
SUMMARY
For the cash-generating units in the AFK Group the impairment testing suggests
signiﬁcant excess value. Reasonable changes in the assumptions will not result in
additional impairment losses.
RESEARCH AND DEVELOPMENT COST
In 2022 development costs of tNOK 176 347 were capitalized (2021 tNOK 120 171).
Other research and development costs in the Group are expensed as they arise and
amounted to tNOK 84 282 in 2022 and tNOK 74 288 in 2021.
Volue capitalize development cost related to development of a wide range of soft-
ware solutions for the energy and infrastructure industries. The development of
these software products will help customers manage and optimize their operations,
assets, and resources in the future. The software products that Volue develop and
capitalize include: Energy Trading and Risk Management software: Enables energy
traders to manage their physical and ﬁnancial trades, as well as monitor and analyze
market data and risks. Energy Market Analysis software: Provides customers with
up-to-date market information and analytics, helping them make informed deci-
sions about energy trading and pricing. Power System Analysis software: Helps cus-
tomers manage and optimize their power grids, by providing real-time monitoring,
forecasting, and optimization tools. Asset Management software: Helps customers
manage their assets throughout their lifecycle, from planning and construction to
operation and maintenance. Geographic Information System software: Enables
customers to manage and analyze geographical data, helping them make informed
decisions about infrastructure planning and management. Water and Wastewater
Management software: Helps customers manage their water and wastewater treat-
ment plants, by providing real-time monitoring, forecasting, and optimization tools.
NOTE 7 OTHER OPERATING COSTS
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Other operating cost
Contractors
9 622
16 447
Maintenance property, plant and equipment
45 556
37 819
19 135
14 294
Loss sales of other non-current assets
70
116
Premises, service and ofﬁce costs
76 527
47 089
3 870
2 923
Audit and other fees
191 676
130 788
22 410
15 676
Consession fees
2 903
3 482
2 903
2 888
Company cars, lifts and trucks
3 923
11 419
317
244
Communication costs
9 519
5 177
Travelling costs, indirect
43 670
15 404
2 270
690
Sales and marketing costs
69 880
23 538
4 530
52
Manufacturing indirect costs
26 855
21 132
111
128
Other operating costs (Misc.)
61 689
14 833
9 620
12 203
Insurances
13 807
10 899
1 822
1 789
ICT costs
67 591
98 194
8 358
7 853
Property tax
9 304
10 953
4 532
5 545
Loss allowance
-311
257
Bad debts
5 461
6 245
Operating costs, IC
2 671
1 084
Restructuring
39 388
1 386
Other direct costs
44 893
84 332
Other operating expenses
722 461
539 251
82 552
65 370
Remuneration to auditor
Statutory audit
14 420
14 520
2 072
3 058
Other assurance services
1 268
1 381
27
23
Tax advice
1 503
1 137
27
74
Other non-audit services
9 066
5 201
905
120
Total remuneration to auditor
26 257
22 240
3 031
3 276
186
187
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 8 FINANCE INCOME AND FINANCE COSTS
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Finance income
Interest income, intercompany
14 732
3 272
Interest income
35 778
14 287
24 750
8 203
Currency exchange income (net)
74 616
27 979
40 151
6 791
Other ﬁnance income
4 433
1 610
356
88
Gain on partial sale of subsidiaries *
325 421
1 282 985
Gain/loss on total sale of subsidiaries
82 425
Dividend income
3 659
2 698
3 009
2 698
Dividend income, intercompany
94 220
84 494
Group contribution income IFRS, intercompany
98 819
Finance cost
Interest expense
38 268
44 933
23 971
30 188
Interest expense cashpool
2 132
1 281
Interest expense on lease
7 526
7 257
740
581
Currency exchange expense (net)
17 567
12 011
5 751
9 890
Other ﬁnance cost **
15 707
87 408
13 206
84 828
Impairment loss on subsidiaries
10 836
Finance costs
81 201
152 889
54 503
125 486
Net ﬁnancial items
37 285
-106 316
546 956
1 345 469
* Sale of IPT Technlogy and proﬁt from dividend in kind Tekna Holding ASA included in 2022 ﬁgures
In 2021 partial sale and listing of Volue ASA (gain of NOK 1 145 million) and Tekna Holding ASA (gain of NOK 138 million)
were included. In the group accounts these gains has been recognized directly in equity.
** 2022 ﬁgures includes impairment of investment in NorSun AS with tNOK 10 835 (77 737).
NOTE 9.1 TAX EXPENSE
Ordinary income tax in Norway:
•
Ordinary income tax on general income. The tax rate was 22% in 2021
and 2022. The 22% tax rate was used to calculate deferred tax assets
and deferred tax liabilities as at 31 December 2022.
Special tax rules for Norwegian energy companies comprise the following elements:
•
Natural resource tax of 1.3 øre per kWh of the company’s average annual
production in the past 7 years. Estimated natural resource tax is deducted
from the company’s tax payable on general income. Natural resource tax
still has to be paid in years when no tax is calculated as being payable. The
amount is recognised as a receivable and is offset against tax payable on
general income in subsequent years. Natural resource tax accrues to the
municipalities and counties in the concession area.
•
Resource rent tax is taxation of income from use of natural resources like
hydropower. The resource rent tax for hydropower is determined for each
individual power station and accrues to the state. This tax is based on
gross resource rent income less operating costs and tax-free allowances.
Resource rent income is based on market prices and therefore differs
from the company’s recognised sales ﬁgures. Effective resource rent tax
on hydropower has been increased from 37% to 45% with effect from the
2022 ﬁscal year. Small hydropower stations do not pay resource rent tax.
Corporate tax is calculated before resource rent tax on hydropower. An
effective resource rent tax rate of 45% therefore means that the formal
resource rent tax is set at 57.7%. The total marginal tax (resource rent tax
and corporate tax) will then be 67% for hydropower. In addition, high-
price contribution is set at 23% of power revenues that exceed NOK 0.70
per kWh. This means that total marginal tax will be 90% for hydropower
exceeding NOK 0.70 per kWh.
•
High-price contribution tax is introduced as a new tax for hydropower from
28 September 2022. The high-price contribution is set at 23% of power
revenues that exceed NOK 0.70 per kWh. The tax brings the marginal tax
rate for higher proﬁts to 90%. The tax will be calculated based on monthly
average spot prices for each price area, but use actual contract price for
any industrial contracts. In addition to the standard deduction of NOK 0.70
per kWh, the tax base is adjusted for realised gains and losses on certain
hedging instruments and certain deductible expenses. Management
therefore considers the tax base to represent a net amount. In addition,
the tax is imposed on the same tax subjects as for ordinary income tax
and resource rent tax. Furthermore,
it is the owners of the tax-trans-
parent energy producers who are responsible for the tax, and the tax is
not deductible for any other income tax. If management had concluded
that the tax base did not represent a net result, the tax would have been
treated as a levy within the scope of IAS 37, with the consequence that the
tax would have been presented as an operating expense. Since Arendals
Fossekompani do not have any derivative that could inﬂuence the level of
the high price contribution in future periods, there are no deferred tax con-
sequences related to the tax, and the amount recognised as an expense in
2022 would be the same according to IAS 37 and IAS 12.
Based on statements made by the government, the high-price contribution
is considered as a situational and temporary high-price tax that is expected
to be removed within the end of the year 2024.
INCREASED TAX BURDEN
The tax provision for 2022 reﬂects the changes in the tax regime for Norwegian
hydropower producers. Increase of resource rent tax and introduction of high-price
contribution has resulted in an incremental income tax expense amounting to NOK
75 million in 2022.
188
189
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Group
Parent Company
2022
2021
2022
2021
Current tax expense
Natural resource tax for the year
6 266
8 028
6 266
6 592
Tax payable on general income
less natural resource tax
206 763
119 595
125 475
16 766
High-price tax contribution
34 130
34 130
Adjustment for previous years
-1 955
-288
Resource rent tax payable for the year
230 700
95 533
230 700
105 431
Total current tax
475 904
222 868
396 570
128 790
Deferred tax expense
Effect of change in temporary differences
-12 412
15 597
920
29 816
Effect of changed tax rate
-12
-3 956
Effect of change in temporary
differences, resource rent tax
514
224
514
815
Effect of changed tax rate, resource rent tax
-5 855
-5 855
Total deferred tax expense
-17 765
11 865
-4 421
30 631
Total tax expense in the income statement
458 139
234 733
392 149
159 421
Reconciliation of effective tax rate
Total pre tax income
425 620
331 738
996 454
1 580 974
Tax based on current ordinary tax rate
93 636
72 982
219 220
347 814
High-price tax contribution
34 130
34 130
Resource rent tax for the year
225 359
106 246
225 359
106 246
Effect of different tax rates abroad
-3 701
-5 505
Calculated tax
349 425
173 724
478 709
454 060
Effect of non-deductible expenses
89 837
53 116
6 678
26 662
Effect of non-taxable income
-36 573
-21 933
-93 237
-321 302
Effect of unrecognised tax loss carryforward
77 812
42 095
Effect of changed tax rates
-39
-4 729
Effect of changed tax
assessments for previous years
-20 958
-9 547
Over-/underprovision relating to previous years
-1 365
2 007
Tax expense in reconciliation of effective tax rate
458 139
234 733
392 149
159 421
Current ordinary tax rate in Norway
22,0%
22,0%
22,0%
22,0%
Effective tax rate
108,4%
70,8%
39,4%
10,1%
Tax recognised in other
comprihensive income (OCI)
Tax on OCI that may be reclassiﬁed to P&L
1 888
1 335
Tax on OCI that will not be reclassiﬁed to P&L
838
-1 185
575
-621
Total tax recognised in OCI
2 726
150
575
-621
Tax payable
Tax payable of tNOK 436 746 (2021: tNOK 187 002 ) for the Group and tNOK 374 830 (2021: tNOK 112 023)
for the parent company consists of unassessed tax payable for the current period.
NOTE 9.2 DEFERRED TAX
(1 000 NOK)
Group
Assets
Liabilities
Net
2022
2021
2022
2021
2022
2021
Property, plant and equipment
27 598
31 923
-38 478
-43 825
-10 880
-11 902
Goodwill, intangible assets
7 211
7 509
-40 505
-23 960
-33 293
-16 451
Non-current receivables and
liabilities in foreign currency
2 663
698
-1 043
-519
1 620
179
Construction contracts
-3 733
-4 634
-3 733
-4 634
Inventories
11 655
10 410
-247
11 655
10 163
Trade and other receivables
991
1 150
991
1 150
Leases
18 396
17 338
-1 547
-180
16 849
17 158
Untaxed gains and losses
556
817
-9
-11
547
806
Provisions
10 632
8 075
-280
-229
10 352
7 846
Other assets
611
35
-5 072
-5 353
-4 460
-5 318
Financial instruments
2 023
-145
-1 007
1 878
-1 007
Employee beneﬁts
51
1 717
-3 755
-3 708
-3 704
-1 991
Tax loss carryforward
203 094
158 474
1 377
203 094
159 851
Unrecognised tax loss carryforward
-180 311
-144 045
-111
-180 311
-144 156
Recognised tax loss carryforward
22 783
14 429
1 266
22 783
15 695
Total deferred ordinary income tax
105 172
94 100
-94 566
-82 407
10 606
11 693
PPE, resource rent tax
32 800
27 459
32 800
27 459
Total deferred resource rent tax
32 800
27 459
32 800
27 459
Deferred tax asset/liability
137 972
121 559
-94 566
-82 407
43 405
39 151
Offsetting of assets and liabilities
-29 541
-29 631
29 541
29 631
Net deferred tax asset/liability
108 430
91 927
-65 025
-52 776
43 405
39 151
Parent Company
Property, plant and equipment
15 732
16 238
15 732
16 238
Leases
60
60
Gains and losses account
68
84
68
84
Employee beneﬁts
-1 250
-1 489
-1 250
-1 489
Total deferred ordinary income tax
15 799
16 382
-1 250
-1 489
14 549
14 893
PPE, resource rent tax
32 800
27 459
32 800
27 459
Total deferred resource rent tax
32 800
27 459
32 800
27 459
Deferred tax asset/liability
48 599
43 841
-1 250
-1 489
47 349
42 352
Offsetting of assets and liabilities
-1 250
-1 489
1 250
1 489
Net deferred tax asset/liability
47 349
42 352
47 349
42 352
190
191
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 9.3 CHANGE IN DEFERRED TAX OVER THE YEAR
(1 000 NOK)
Group 2021
Total
Opening
Balance
Changes
in Net
Income
Reclassi-
ﬁcation
From
OCI
Change in
tax loss
carry-
forward
Mergers
and
acqui-
sitions
Group
Contribution
Received/
Paid
Total
Effect from
Foreign
Exchange
Closing
Balance
Ordinary
income tax
Property, plant
and equipment
-8 229
6 441
-7 509
1
-3 084
518
-11 863
Goodwill,
intangible
assets
-22 131
-294
7 509
-2 397
862
-16 451
Construction
contracts
-5 046
383
29
-4 634
Inventories
11 289
-985
-141
10 163
Trade and other
receivables
1 042
65
2
41
1 150
Leases
12 858
4 678
-115
-252
17 168
Untaxed gains
and losses
855
-171
684
Provisions
8 718
-1 333
282
7 668
Other items
-7 710
4 226
342
-2 175
203
-5 114
Financial
instruments
22 429
-24 768
1 332
0
-1 007
Employee
beneﬁts
1 818
-2 552
-1 185
-41
-57
-2 017
Tax loss
carryforward
29 343
3 261
-9 806
425
-7 234
-43
15 947
Total ordinary
income tax
45 237
-11 050
342
148
-9 806
-7 385
-7 234
1 441
11 693
Property, plant
and equipment
28 303
-845
27 459
Loss carried
forward -
Resource rent
3 334
30
-3 364
Total resource
rent tax
31 637
-815
-3 364
27 459
Total change
in deferred tax
76 874
-11 864
342
148
-13 170
-7 385
-7 234
1 441
39 151
NOTE 9.3 CHANGE IN DEFERRED TAX OVER THE YEAR
(1 000 NOK)
Group 2022
Total
Opening
Balance
Changes
in Net
Income
Reclassi-
ﬁcation
From
OCI
Change
in tax loss
carry-
forward
Mergers
and
acqui-
sitions
Group
Contribution
Received/
Paid
Total Effect
from Foreign
Exchange
Closing
Balance
Ordinary
income tax
Property, plant
and equipment
-11 863
-753
2 675
-615
-668
-11 223
Goodwill,
intangible
assets
-16 451
522
-2 675
-14 171
-1 975
-34 750
Non-current
rec. and liab.
in for. currency
-177
1 728
70
1 620
Construction
contracts
-4 634
1 146
-7
-3 495
Inventories
10 163
1 389
515
12 067
Trade and other
receivables
1 150
-31
2
30
1 150
Leases
17 168
-491
-30
394
17 041
Gains and
losses account
684
-137
547
Provisions
7 668
2 777
188
10 632
Other items
-5 114
559
-49
-185
-4 789
Financial
instruments
-1 007
997
1 888
0
1 878
Employee
beneﬁts
-2 017
-240
-1 728
838
-89
125
-3 111
Tax loss
carryforward
15 947
6 862
-738
39
927
23 038
Total ordinary
income tax
11 693
12 424
2 726
-768
-14 883
-586
10 606
Property, plant
and equipment
27 459
5 341
32 800
Total resource
rent tax
27 459
5 341
32 800
Total change
in deferred tax
39 151
17 765
2 726
-768
-14 883
-586
43 405
192
193
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 9.3 CHANGE IN DEFERRED TAX OVER THE YEAR
(1 000 NOK)
Parent Company 2021
Total
Opening
Balance
Changes
in Net
Income
Reclassi-
ﬁcation
From
OCI
Change in
tax loss
carry-
forward
Mergers
and
acqui-
sitions
Group
Contribution
Received/
Paid
Total
Effect from
Foreign
Exchange
Closing
Balance
Ordinary
income tax
Property, plant
and equipment
16 704
-467
16 238
Leases
4
56
60
Gains and
losses account
106
-21
84
Financial
instruments
23 506
-23 506
Employee
beneﬁts
-533
-334
-621
-1 489
Tax loss
carryforward
12 246
-5 544
-6 702
Total ordinary
income tax
52 033
-29 816
-621
-6 702
14 893
Property, plant
and equipment
28 303
-845
27 459
Loss carried
forward -
Resource rent
3 334
30
-3 364
Total resource
rent tax
31 637
-815
-3 364
27 459
Total change
in deferred tax
83 670
-30 631
-621
-10 066
42 352
Parent Company 2022
Ordinary
income tax
Property, plant
and equipment
16 238
-506
15 732
Leases
60
-60
Gains and
losses account
84
-17
68
Employee
beneﬁts
-1 489
-337
575
-1 250
Total ordinary
income tax
14 893
-920
575
14 549
Property, plant
and equipment
27 459
5 341
32 800
Total resource
rent tax
27 459
5 341
32 800
Total change
in deferred tax
42 352
4 421
575
47 349
NOTE 10 EQUITY
Share capital
Ordinary shares
2022
2021
Issued as at 31 December – fully paid
55 995 250
55 995 250
55 995 250
55 995 250
Owners of shares are entitled to the dividend approved in each individual case by
the annual general meeting, and are entitled to one vote per share at the company’s
annual general meeting. No shareholder may personally or by proxy vote for more
than a quarter of the total number of shares. Shares transferred to a new owner do
not confer voting rights until at least three weeks have passed since the acquisition
was notiﬁed to the company. The rights to the company’s treasury shares (see Note
22) are suspended until the shares have been acquired by others.
DIVIDEND
The Company pay dividend quarterly. The following dividend has been paid; In
February (for Q4), tNOK 49 407 (tNOK 38 419), in May tNOK 52 174 (tNOK 1 646 605 -
Q1 and additonal), in September tNOK 52 171 (tNOK 43 819) and in November tNOK 52
078 (tNOK 46 620). In additon shares in Tekna Holding ASA (in 2021 Volue ASA) have
been distributed as dividend (5 shares in AFK gave 1 share in Tekna ). Value of this
dividend was tNOK 202 460 (tNOK 257 398). No dividend is paid on treasury shares.
Ordinary dividend
Approved 2022
and paid in 2022
Approved 2021
and paid in 2021
Paid
206 292
1 775 958
Value of shares
202 460
257 398
Total
408 752
2 033 356
NOTE 11 GROUP COMPANIES
(1 000 NOK)
Shareholding
Non-controlling
Value in parent
Subsidiaries
Domicile
2022
2021
2022
2021
2022
2021
Volue ASA
Oslo
60,1%
60,1%
327 948
311 968
304 295
304 295
NSSL Global Ltd
UK
80,0%
80,0%
104 848
91 610
273 298
273 298
ENRX ASA /
EFD Induction AS
Skien
95,1%
96,1%
18 354
5 661
453 036
410 988
Alytic AS
Arendal
95,0%
96,0%
39 610
20 025
140 219
74 100
Tekna Holding ASA
Arendal
71,1%
79,9%
109 136
108 104
321 744
361 426
AFK Property AS
Arendal
100,0%
100,0%
7 351
7 937
227 692
184 060
Vergia AS /
AFK Energy AS
Arendal
100,0%
100,0%
31 343
14 950
Ampwell AS
Arendal
100,0%
54 263
100
AFK Tyskland
Holding AS
Arendal
100,0%
100
661 511
545 306
1 751 829
1 623 119
194
195
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 11.2 SUBSIDIARIES
Shareholding
2022
2021
Subsidiaries in Volue ASA
Oslo
Norway
Subsidiaries in Volue Technology AS
Volue Technology AS
Trondheim
Norway
100,0%
100,0%
Volue Technology Denmark A/S
Odense
Denmark
100,0%
100,0%
Volue AB
Jönköping
Sweden
100,0%
100,0%
Volue AG
Basel
Switzerland
100,0%
100,0%
Volue Enerji Cözümleri
Istanbul
Turkey
100,0%
100,0%
Volue Sp. z.o.o.
Gdansk
Poland
100,0%
100,0%
Volue Gmbh
Dusseldorf
Germany
100,0%
Volue GK
Tokyo
Japan
100,0%
Subsidiaries in Volue Industrial IOT AS
Volue Industial IoT AS
Arendal
Norway
100,0%
100,0%
Volue Denmark ApS
Middelfart
Denmark
100,0%
100,0%
Volue in Situ AB
Åkersberga
Sweden
100,0%
100,0%
Volue Instrument Technology AS
Ås
Norway
100,0%
Subsidiaries in Volue Market Service AS
Volue Market Services AS
Arendal
Norway
100,0%
100,0%
Volue Market Services
Stockholm
Sweden
100,0%
100,0%
Volue Market Services
Aarhus
Denmark
100,0%
100,0%
Volue Market Services
Helsingfors
Finland
100,0%
100,0%
Subsidiaries in Volue Insight AS
Arendal
Norway
Volue Insight AS
Arendal
Norway
100,0%
100,0%
Volue Insight GmbH
Berlin
Germany
100,0%
Volue Germany GmbH (Likron GmbH)
Munchen
Germany
100,0%
100,0%
Volue Energy GmbH (Procom GmbH)
Aachen
Germany
100,0%
100,0%
Volue UK Ltd
Bristol
UK
100,0%
Subsidiaries in NSSLGlobal Ltd.
London
UK
NSSLGlobal LLC
California
USA
100,0%
100,0%
NSSLGlobal PTE Ltd
Singapore
Singapore
100,0%
100,0%
Nera Satellite Services LTD
London
UK
100,0%
100,0%
NSSL Ltd
London
UK
100,0%
100,0%
Aero-Satcom Ltd.
London
UK
50,0%
50,0%
NSSLGlobal AB
Hönö
Sweden
100,0%
NSSLGlobal Technologies AS
Oslo
Norway
100,0%
100,0%
NSSLGlobal Continental Europe APS
Brøndby
Denmark
100,0%
100,0%
NSSLGlobal APS
Brøndby
Denmark
100,0%
100,0%
NSSLGlobal Polska SP. Z.o.o.
Warzsawa
Poland
100,0%
100,0%
NSSLGlobal Israel Ltd
Beit Shemesh
Israel
100,0%
100,0%
NSSLGlobal Kabushiki Kaisha
Tokyo
Japan
100,0%
100,0%
NSSL Global BV
Scheemda
Netherlands
100,0%
NOTE 11.2 SUBSIDIARIES
Shareholding
2022
2021
NSSLGlobal GmbH
Barbüttel
Germany
100,0%
100,0%
NSSLGlobal Distribution GmbH
Barbüttel
Germany
100,0%
100,0%
ESS Hanika GmbH
Barbüttel
Germany
100,0%
100,0%
Subsidiaries in ENRX ASA
Induction Holding AS
Skien
Norway
100,0%
100,0%
IPT GmbH
Skien
Norway
100,0%
100,0%
EFD Induction Group AS
Skien
Norway
100,0%
100,0%
EFD Induction AS
Skien
Norway
100,0%
100,0%
EFD Induction AS
Västerås
Sweden
100,0%
100,0%
EFD Induction GmbH
Freiburg
Germany
100,0%
100,0%
EFD France Holding Eurl
Grenoble
France
100,0%
100,0%
EFD Induction S.A
Grenoble
France
100,0%
100,0%
EFD Induction Ltd.
Wolverhampton
UK
100,0%
100,0%
EFD Induction Inc.
Detroit
USA
100,0%
100,0%
EHE Acquisition Corporation Inc
Detroit
USA
100,0%
100,0%
EFD Induction s.r.l
Milano
Italy
100,0%
100,0%
EFD Induction Ltd.
Bangalore
India
100,0%
100,0%
EFD Induction (Shanghai) Co., Ltd.
Shanghai
China
100,0%
100,0%
EFD Induction Ges.m.b.H
Wien
Austria
100,0%
100,0%
EFD Induction s.l
Bilbao
Spain
100,0%
100,0%
Inductro SRL
Bucuresti
Romania
100,0%
100,0%
EFD Induction SP. Z o.o
Gliwice
Poland
100,0%
100,0%
EFD Induction Co., Ltd
Bangkok
Thailand
100,0%
100,0%
EFD Induction K.K.
Yokohama
Japan
100,0%
100,0%
EFD Inducao Brasil Ltd
Sao Paolo
Brazil
100,0%
100,0%
EFD Induction Oil & Gas Service
Pinang
Malaysia
100,0%
100,0%
EFD Induction Sdn. Bhd.
Selangor
Malaysia
100,0%
EFD Induction S de R.L
Queretaro
Mexico
100,0%
100,0%
Subsidiaries in Tekna Holding ASA
Subsidiaries in Tekna Holdings Canada Inc.
Sherbrooke
Canada
96,4%
96,4%
Tekna Plasma Systems Inc.
Sherbrooke
Canada
100,0%
100,0%
Tekna Advanced Materials Inc.
Sherbrooke
Canada
100,0%
100,0%
Tekna Plasma Europe S.A.S.
Mâcon
France
100,0%
100,0%
Tekna Plasma Systems(Suzhou)Co Ltd.
Suzhou
China
100,0%
100,0%
Tekna Plasma India Private Ltd.
Chennai
India
100,0%
100,0%
Tekna Plasma Korea Co, Ltd
Incheon
South Korea
100,0%
100,0%
Tekna Inc
Delawere
USA
100,0%
196
197
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 11.3 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES
(1 000 NOK)
The Group has the following investments in joint ventures. All businesses are orga-
nized as companies with limited liability corresponding to Norwegian corporations.
Guidelines for the operation of companies are based on shareholder agreements.
According to the shareholder agreements it is required unanimity between the par-
ties for making decisions about relevant activities. Accordingly, participants in the
companies have joint control over the activities. The Group's responsibility as a par-
ticipant in Imphytec Powders SAS, Seagust AS and North Ammonia AS is limited to
the capital contribution, and the return equals the Group's share of proﬁt. Thus, the
group as a participant is entitled to the arrangements net assets.
In the consolidated group accounts the investments in joint ventures and associates
are accounted for in accordance with the equity method.
In the company accounts the investments in joint ventures and associates are
accounted for based on historic cost.
Entity
Country
Ownership interest
Imphytec Powders SAS
France
Production of powders
48,00%
NorSun AS
Norway
Solar energy
20,80%
North Ammonia AS
Norway
Green ammonia
50,00%
Seagust AS
Norway
Offshore wind
47,50%
Hydepoint AS
Norway
Hydrogen
33,33%
Kilandsfoss AS
Norway
Hydro powerplant
33,33%
Glomsdam Kraftverk AS
Norway
Hydro powerplant
50,00%
Cellect Energy S.L.
Spain
Software for energy storage
40,00%
Based on an overall assessment where the size and complexity is taken into consid-
eration these investments are considered to be signiﬁcant joint ventures. Further
information regarding these companies is disclosed below.
NOTE 11.2 SUBSIDIARIES
Shareholding
2022
2021
Subsidiaries in Alytic AS
Kontali Holding AS
Arendal
Norway
100,0%
100,0%
Kontali Analyse AS
Kristiansund
Norway
75,1%
71,0%
Seafood TIP
Utrecht
Netherlands
100,0%
100,0%
Utel Holding AS
Arendal
Norway
100,0%
100,0%
Utel Systems AS
Grimstad
Norway
91,8%
92,5%
Greenfact Holding AS
Arendal
Norway
100,0%
100,0%
Greenfact
AS
Oslo
Norway
60,0%
60,0%
Greenfact GmbH
Berlin
Germany
100,0%
Greenfact Ltd
London
UK
100,0%
Factlines Holding AS
Oslo
Norway
100,0%
100,0%
Factlines AS
Oslo
Norway
62,5%
Alytic Blue AS
Oslo
Norway
100,0%
Subsidiaries in AFK Property AS
Vindholmen Eiendom AS
Arendal
Norway
100,0%
100,0%
Bedriftsveien 17 AS
Arendal
Norway
100,0%
100,0%
Bøleveien 4 AS
Skien
Norway
100,0%
100,0%
Steinodden Eiendom AS
Arendal
Norway
77,6%
77,6%
Arendal Lufthavn Gullknapp AS
Arendal
Norway
92,1%
92,1%
Songe Træsliperi AS
Tvedestrand
Norway
50,8%
Gullknapp Invest AS
Arendal
Norway
100,0%
100,0%
Gullknapp Utvikling AS
Arendal
Norway
100,0%
50,0%
Longum Property AS
Arendal
Norway
100,0%
AFK Longum Invest AS
Arendal
Norway
100,0%
Bryggebyen Folkebad AS
Arendal
Norway
100,0%
Subsidiaries in Vergia
AS
Arendal
Norway
100,0%
Vergia green Fuels AS
Arendal
Norway
100,0%
Vergia green system solutions AS
Arendal
Norway
100,0%
Vergia Hydropower AS
Arendal
Norway
100,0%
Vergia Wind AS
Arendal
Norway
100,0%
Vergia Solar AS
Arendal
Norway
100,0%
Vergia Property AS
Arendal
Norway
100,0%
Subsidiaries in Ampwell
AS
Cellect Holding AS
Arendal
Norway
100,0%
Commeo Holding AS
Arendal
Norway
100,0%
Commeo GmbH
Arendal
Norway
55,0%
AFK Storage 3 AS
Arendal
Norway
100,0%
Subsidiaries in AFK Tyskland Holding AS
Arendals Fossekompani Deutchland GmbH
Berlin
Germany
100,0%
198
199
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NorSun
North
Ammonia
Seagust
Hyde-
point
Kilands-
foss
Glomsdam
Kraftverk
Cellect
Energy
Imphytec
Powders
Total
Balance at
1 January 2021
9 422
9 422
Income from
associates
-980
-1 101
-10 093
-12 173
Aquisitions
through business
combinations
-4 997
-4 997
Investment/dis-
posal of companies
and businesses
10 165
10 165
Issue of shares
from non-con-
trolling interests
4 997
4 997
4 750
14 744
FX differences on
foreign operations
-238
-238
Balance at
31 December 2021
4 018
3 649
9 256
16 922
Balance at
1 January 2022
4 018
3 649
9 256
16 922
Income from
associates
-16 189
-2 370
-4 986
-3 183
-110
-317
-2 100
-11 149
-40 405
Aquisitions
through business
combinations
33 095
-122
1 350
4 566
38 889
Investment/dis-
posal of companies
and businesses
-4
-4
Issue of shares
from non-con-
trolling interests
14 725
2 841
153
500
2 147
20 366
FX differences on
foreign operations
2
1 546
1 548
Balance at
31 December 2022
16 906
1 647
13 388
-342
43
57
1 399
4 219
37 317
Seagust AS is directly owned by Arendals Fossekompani ASA and booked at historic cost of TNOK 4 750
in the company accounts. None of the companies have observable market values in form of market price or similar.
DESCRIPTION OF THE BUSINESS IN ASSOCIATES AND JV
NorSun
NorSun is a Norwegian solar energy company that manufactures and markets high
performance monocrystalline silicon ingots and wafers for the global solar energy
industry. Dedicated to high efﬁciency N-type wafers and sustainable production with
low CO
2
emissions, NorSun is an established supplier to tier-one cell manufacturers.
NorSun is headquartered in Oslo in Norway and operates a modern production facility
located in Årdal in Norway. NorSun became an associate company from 1 July 2022.
North Ammonia
North Ammonia is domiciled in Norway, where the head office is in Arendal. The
group is one of two partners who collaborate on production of green ammonia. This
is a strategically important business as a result of the Group's focus on becoming a
worldwide supplier of green ammonia - the future sustainable fuel. The other partner
is Grieg Edge, a Norwegian innovation company with focus on sustainable solutions
only. The owners of North Ammonia are committed to further capital contributions in
2023 to secure ﬁnancing of the company. The partners have an agreement with North
Ammonia that proﬁts of the company will not be distributed until it has the consent of
both the partners.
Seagust
Seagust is domiciled in Norway, where the head ofﬁce is in Arendal. The group is
one of two partners who collaborate on utilization of offshore wind resources in the
North Sea. This is a strategically important business as a result of the Group's focus
on expansion in the offshore wind market to develop more renewable energy. The
other partner is Ferd, a large Norwegian industrial investment company. The owners
of Seagust are committed to further capital contributions in 2023 to secure ﬁnancing
of the company. The partners have an agreement with Seagust that proﬁts of the
company will not be distributed until it has the consent of both the partners. In 2022
Vattenfall and Seagust have formed a joint venture to bid for offshore wind areas
in Norway's upcoming licensing round. The joint venture intends to bid on licenses
in both the Utsira Nord and Sørlige Nordsjø II areas in the North Sea. The licensing
rounds are expected to take place within 2023.
Hydepoint
Hydepoint is a complete solution for receiving, converting, and transmitting the full
energy potential from offshore wind farms, with reduced dependence on the onshore
power grid. Placed in the ocean, close to wind farms, Hydepoint can convert all or
part of the energy into hydrogen. Arendals Fossekompani, Kongsberg Gruppen and
Moreld are industrial partners and equally large owners of the company Hydepoint
AS. Moreld contributes with offshore infrastructure solutions, Kongsberg Gruppen
contributes with power and management systems, and Arendals Fossekompani
contributes with solutions for optimized planning and operation through its in-depth
knowledge of the power market, including through the portfolio company Volue.
Hydepoint is headquartered in Oslo, Norway. The owners of Hydepoint are commit-
ted to further capital contributions in 2023 to secure ﬁnancing of the company.
Kilandsfoss
Arendals Fossekompani has started the construction phase of the new hydropower
plant Kilandsfoss, located in the river Nidelva in Norway. The run-of-the-river facility
will produce 38 GWh per year. Partner in the Kilandsfoss project are the municipali-
ties of Froland and Åmli, each with one-third ownership. Estimated build time is two
years and Kilandsfoss hydropower plant is scheduled to produce electricity in 2025.
Glomsdam kraftverk
Glomsdam kraftverk is owned by Vergia Hydropower AS (Arendals Fossekompani)
and Vest-Telemark Kraftlag AS. The Company has raised capital from the owners in
January 2023 to enable the planning of the project phase of Glomsdam Kraftverk.
Cellect Energy
Cellect Energy is a provider of smart software for energy storage systems that
helps to operate and optimizes lifetime and proﬁt. The company was established
by Arendal Fossekompani together with key employees and is headquartered in
Barcelona, Spain.
Imphytek Powders
Imphytek Powders S.A.S. has it's headquarters and operations in Macon in France.
The company is combining Aperam's expertise in Nickel & Specialty Alloys with
Tekna's unique wire plasma atomization technology. The joint venture has the
exclusive right to sell nickel alloy powder in Europe, and beneﬁts from all market and
product developments made by Tekna and Aperam in the past years. The compa-
ny's main activities are the production of high-performance powder for advanced
manufacturing technologies. The company is organized as a company with limited
liability similar to Norwegian private limited liability companies, and the company is
not publicly traded. The company is strategically important company within Tekna
Group in the business area Advanced Manufacturing.
200
201
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 11.3 INVESTMENTS IN ASSOCIATES AND JOINT VENTURES CONT.
(1 000 NOK)
The table below shows the condensed ﬁnancial information of the associates and joint ventures, based on 100%
Imphytec
Powders
NorSun
North
Ammonia
Seagust
Income Statement
2022
2021
2022
2021
2022
2021
2022
2021
Revenue
3 956
6 809
301 769
932
Operating expenses
19 130
28 394
357 648
5 606
1 959
10 501
2 318
Depreciation and amortisation
1 134
1 941
17 944
Net ﬁnancial items
-11
-4 182
4
Proﬁt before income tax
-16 308
-23 537
-79 494
-4 740
-1 959
-10 497
-2 318
Income tax expense
17
Proﬁt (-loss) for the year
-16 308
-23 554
-79 494
-4 740
-1 959
-10 497
-2 318
Balance Sheet
Non-current assets
11 320
10 968
97 129
234
889
267
Cash and cash equivalents
60
5 674
45 944
3 351
8 308
30 972
7 829
Other current assets
20 620
18 492
183 068
59
1 751
18
Non-current liabilities
46 941
20 941
123 705
Current liabilities
1 034
5 780
101 311
320
273
4 551
423
Equity
-15 976
8 414
81 280
3 295
8 035
28 185
7 682
Hydepoint
Kilandsfoss
Glomsdam
Kraftverk
Cellect
Energy
Income Statement
2022
2021
2022
2021
2022
2021
2022
2021
Revenue
253
Operating expenses
9 551
329
635
6 096
Depreciation and amortisation
24
Net ﬁnancial items
-5
Proﬁt before income tax
-9 551
-329
-635
-5 872
Income tax expense
Proﬁt (-loss) for the year
-9 551
-329
-635
-5 872
Balance Sheet
Non-current assets
318
Cash and cash equivalents
2 830
125
221
3 001
Other current assets
47
1 364
Non-current liabilities
Current liabilities
3 856
21
107
503
Equity
-1 027
128
114
3 497
NOTE 12 OTHER RECEIVABLES AND INVESTMENTS
(1 000 NOK)
Group
Parent Company
Long-term investments
2022
2021
2022
2021
Loans to employees
32 090
38 525
1 663
1 642
Contributions to company pension plan
22 002
22 002
22 002
22 002
Natural resource tax receivable
42 334
63 780
42 334
63 780
Other non-current receivables
32 685
22 136
20 572
17 180
Other investments
134 585
117 881
84 038
68 944
Total long-term investments
263 696
264 323
170 609
173 548
Security provided for loans to employees
All loans to employees incur interest at a rate that never triggers a taxable beneﬁt.The loans are repaid over 5 years
(vehicles) or 20 years (housing). Loans exceeding NOK 200,000 are secured by mortgages on property or shares.
NOTE 13 INVENTORIES AND CONTRACTS WITH CUSTOMERS
(1 000 NOK)
Group
Inventories
2022
2021
Raw materials
324 986
174 574
Work in progress
253 030
138 926
Spare parts
46 778
37 071
Finished goods
220 679
151 701
Total inventories (net after provision for obsolescence)
845 472
502 272
Provision for obsolescence
94 174
81 979
The provision for obsolescence in 2022 is mainly related to slow-moving items in ENRX (NOK 48 million),
spare parts in NSSL (NOK 10 miillion) and off-size powders in Tekna (NOK 36 million).
202
203
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Group
2022
2021
Contracts with at-delivery billing
Booked income
193 656
236 909
Payments recieved
-56 686
-86 129
Contract assets
136 970
150 780
Contracts with advance billing
Payments recieved
253 113
215 549
Booked income
-19 617
-49 044
Contract liabilities
233 496
166 505
Net contract assets / - liabilities
-107 812
-15 725
Group
2022
2021
Booked income from uncompleted contracts per 31.12
Booked accrued income per 31.12
244 349
300 917
Booked accrued expenses per 31.12
-204 675
-289 925
Reported margin per 31.12
39 673
10 992
Group
2022
2021
Remaining income from sales over time contracts
Within one year
326 218
254 708
Remaining income (sales over time)
326 218
254 708
CONSTRUCTION CONTRACTS (SALES OVER TIME)
The subsidiaries ENRX, Tekna, NSSL and Volue recognise construction contracts in
accordance with percentage of completion method. Changes during the year are
due to most contracts having a duration less then a year. At year-end these subsid-
iaries had the following carrying amounts associated with construction contracts
and projects in progress:
NOTE 13 INVENTORIES AND CONTRACTS WITH CUSTOMERS CONT.
(1 000 NOK)
Contract Assets
Posted gross value of contract assets are distributed as follows:
Receivables
2022
2021
Volue Consolidated
54 181
65 595
ENRX
81 570
77 978
Tekna Group
1 219
7 208
Sum
136 970
150 780
Provisions for expected losses on projects are distributed as follows:
Provision for loss onerous contracts
2022
2021
Volue
16 963
31 118
Sum
16 963
31 118
Provisions are calculated based on historical losses and individual assessment of each item and customer
Changes in the period's provisions are explained as follows:
Group
Provision for loss onerous contracts
2022
2021
Total Opening Balance
31 118
10 668
Changes in expected losses (loss rates) and outstanding receivables (volume)
4 145
33 758
Realized losses during the period (-)
-18 300
-13 308
Exchange differences on translation of foreign operations
Closing Balance
16 963
31 118
NOTE 14 TRADE AND OTHER RECEIVABLES
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Accounts receivables
Trade accounts receivables
950 095
792 808
822
916
Loss allowance (Note 16)
-23 971
-19 999
Trade accounts rec, IC
30 412
57 362
Total
926 124
772 808
31 233
58 278
Other receivables
Current interest-bearing rec., IC
466 123
66 218
Dividends and group contribution receivable, IC
9 462
Other current receivables
261 635
219 347
1 478
34 436
Total
261 635
219 348
477 062
100 654
Advances paid to suppliers
22 876
13 390
Accrued revenues at the point in time
7 495
12 155
Total
30 371
25 545
NOTE 13 INVENTORIES AND CONTRACTS WITH CUSTOMERS
(1 000 NOK)
204
205
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 15 CASH AND CASH EQUIVALENTS
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Cash and cash equivalents
2 339 664
2 708 412
1 160 349
1 411 245
Here of restricted cash
167 558
97 490
2 993
2 821
NOTE 16 FINANCIAL RISK MANAGEMENT / FINANCIAL INSTRUMENTS CONT.
(1 000 NOK)
The breakdown of the parent company’s ﬁnancial assets is as follows:
Financial assets at
fair value through OCI
Number of shares
Shareholding in%
Fair value
2022
2021
2022
2021
2022
2021
Listed shares
Kongsberg Gruppen
25 812
25 812
0,01%
0,01%
10 727
7 382
Canopy Holding
423 167
423 167
0,48%
0,48%
199
1 117
Norse Atlantic
450 000
450 000
0,22%
0,58%
905
6 728
Total listed shares
11 831
15 227
Financial assets at
fair value through OCI
11 831
15 227
Fair value – change during the year:
Financial assets at fair value through OCI
2022
2021
Balance at 1 January
15 227
734 973
Change in ﬁnancial assets at fair value through OCI
-3 311
95 193
Proceed from sale of ﬁnancial assets at fair value
-85
-823 940
Purchase of ﬁnancial assets at fair value
9 000
Balance at 31 December
11 830
15 227
The following dividend is received: Kongsberg Gruppen tNOK 310 (tNOK 206).
Change in assets at fair value are based on changes in the market values of listed shares.
A sensitivity analysis indicates that a 10% change in fair value as at 31 December
2022 would change equity by tNOK 1.183 and proﬁt for the year from continuing oper-
ations by tNOK 0 (2021: by tNOK 1.523 and tNOK 0 respectively).
FINANCIAL RISK MANAGEMENT
The company and the Group are exposed to credit risk, liquidity risk from the use of
ﬁnancial instruments and market risk. The Board of Directors has overall respon-
sibility for establishing and supervision of the Group’s
guidelines on risk manage-
ment. Principles, procedures and systems for risk management in the key areas are
reviewed and assessed regularly. Industrial investments consist of a limited number
of large investments. The investment strategy is based on the premise that long-
term, active engagement provides the greatest return. Other investments are in
liquid deposits with no connection to the Group.
CREDIT RISK
Credit risk is the risk of ﬁnancial losses if a customer or counterparty to a ﬁnan-
cial instrument is unable to fulﬁl their obligations. Credit risk normally arises when
the company or Group extends credit to customers or invests in securities. Credit
risk associated with investments is considered to be limited since investments are
mainly made in liquid securities with a good creditworthiness. A speciﬁcation of the
investments is given earlier in this note.
The Group has routines to ensure that credit is only extended for sales to customers
that have had no previous payment issues and that stay within their credit limit.
The maximum exposure to credit risk associated with receivables at the balance sheet date was:
Group
Parent Company
2022
2021
2022
2021
Total receivables
1 229 195
1 029 018
508 296
158 932
Outstanding trade receivables
950 071
792 805
822
916
Loss allowance
23 971
19 999
Trade receivables
Breakdown of the book value of outstanding trade receivables in:
Overdue
Outstanding
trade receivables 2022
Not due
1-30 days
31-60 days
61-90 days
More than
90 days
Trade
accounts
receivable
Arendals Fossekompani ASA
789
32
822
Volue Consolidated
342 652
41 013
3 313
2 889
5 405
395 272
ENRX
240 057
45 521
11 894
5 663
47 253
350 389
NSSLGlobal Consolidated
90 088
30 358
8 281
7 090
7 096
142 913
Tekna Group
16 574
8 869
6 068
3 375
6 437
41 322
AFK Property Group
966
982
27
27
36
2 037
Alytic (Cons)
4 133
674
827
540
532
6 705
Ampwell Group
10 600
10 600
AFK Tyskland Group
12
12
Total
705 870
127 418
30 408
19 585
66 791
950 071
The company has applied impairment losses for expected credit losses as follows:
Overdue
Loss allowance
2022
Not due
1-30 days
31-60 days
61-90 days
More than
90 days
Loss
allowance
Volue Consolidated
41
64
614
1 719
1 971
4 409
ENRX
515
304
27
11
8 934
9 791
NSSLGlobal Consolidated
9 419
9 419
Tekna Group
302
302
Alytic (Cons)
50
50
Total
556
368
691
1 730
20 627
23 971
Loss allowance is calculated based on historical losses and individual assessment of each item and customer.
206
207
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Breakdown of the book value of outstanding trade receivables in:
Overdue
Outstanding
trade receivables 2021
Not due
1-30 days
31-60 days
61-90 days
More than
90
days
Trade
accounts
receivable
Arendals Fossekompani ASA
756
19
3
137
916
Volue Consolidated
311 531
46 597
6 721
4 286
3 388
372 523
ENRX
205 237
28 898
12 950
7 320
21 349
275 754
NSSLGlobal Consolidated
43 793
16 728
29 419
15 861
8 371
114 172
Tekna Group
7 766
4 618
4 739
3 546
4 252
24 921
AFK Property Group
329
107
139
69
76
720
Alytic (Cons)
3 210
178
238
173
3 799
Total
572 620
97 127
54 225
31 259
37 574
792 805
The company has applied impairment losses for expected credit losses as follows:
Overdue
Loss allowance 2021
Not due
1-30 days
31-60 days
61-90 days
More than
90 days
Loss
allowance
Volue Consolidated
350
350
938
1 638
ENRX
1 249
39
102
2
8 044
9 437
NSSLGlobal Consolidated
8 874
8 874
Alytic (Cons)
25
25
50
Total
1 249
64
477
352
17 856
19 999
Changes in the period’s loss allowance are explained as follows:
Group
Group
Loss allowance
2022
2021
Total Opening Balance
19 999
17 912
Changes in expected losses (loss rates) and outstanding receivables (volume)
5 382
901
Realized losses during the period (-)
-1 088
1 002
Exchange differences on translation of foreign operations
533
184
Closing Balance
23 971
19 999
LIQUIDITY RISK
Liquidity risk is the risk that the Group will not be able to fulﬁl its ﬁnancial obligations
as they fall due. The aim of liquidity management is to secure sufﬁcient liquidity to
fulﬁl the obligations as they fall due, without this causing unacceptable losses to the
company and the Group.
Cash ﬂow from the company and the Group’s ordinary operations, combined with
signiﬁcant investments in liquid securities as well as unutilised credit facilities mean
that the liquidity risk is considered to be low.
Subsidiaries ENRX, NSSLGlobal and Volue have established an group account
arrangement covering most of the subsidiaries. This includes currencies NOK, EURO,
USD, JPY, SEK, DKK og GBP. This helps increase the ﬂexibility and efﬁciency of liquid-
ity management
The breakdown of the liabilities of the company and the Group is as follows:
(Contractual cash ﬂows include interest calculated based on interest rates at the balance sheet date)
(Contractual cash ﬂows of the bond loans that have maturity of 12 months or less are related to interest payments)
Group 2022
Carrying
amount
Contractual
cash ﬂows
6 months
or less
6 to 12
months
1 to 2
years
2 to 5
years
Over 5
years
Accounts payable
969 613
969 456
969 044
412
Current interest-bearing debt
170 841
174 981
161 730
13 251
Bank overdraft
110 869
113 123
18 738
94 385
Current lease liabilities
58 454
60 432
29 031
31 401
Total current liabilities
1 309 776
1 317 991
1 178 543
139 448
Non-current bond loans
497 581
569 733
13 075
13 075
39 225
504 358
Non-current interest-bearing debt
353 067
435 834
8 549
11 174
86 652
88 418
241 041
Non-current lease liabilities
203 076
209
065
62 373
74 504
72 187
Total non-current liabilities
1 053 724
1 214 632
8 549
24 249
162 101
202 147
817 586
Group 2021
Accounts payable
753 718
753 718
753 627
92
Current interest-bearing debt
122 333
126 025
30 942
95 083
Bank overdraft
114 106
114 563
64 387
50 176
Current lease liabilities
64 449
66 712
29 756
36 956
Total current liabilities
1 054 607
1 061 019
878 712
182 307
Non-current bond loans
496 582
591 525
13 075
13 075
39 225
526 150
Non-current interest-bearing debt
169 849
199 685
1 392
1 459
18 587
54 439
123 808
Non-current lease liabilities
141 601
141 601
75 431
66 170
Total non-current liabilities
808 032
932 810
1 392
14 534
107 093
159 833
649 958
208
209
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Parent Company 2022
Carrying
amount
Contractual
cash ﬂows
6 months
or less
6 to 12
months
1 to 2
years
2 to 5
years
Over 5
years
Accounts payable
12 105
12 105
12 105
Current interest-bearing liab, IC
17 185
17 185
17 185
Current lease liabilities
2 300
5 360
2 680
2 680
Total current liabilities
31 590
34 651
14 785
19 865
Non-current bond loans
497 581
569 733
13 075
13 075
39 225
504 358
Non-current interest-bearing debt
153 307
177 836
2 453
2 453
4 906
14 717
153 307
Non-current lease liabilities
60 258
83 568
5 254
14 694
63 620
Total non-current liabilities
711 146
831 137
2 453
15 528
23 235
68 637
721 285
Parent Company 2021
Accounts payable
51 777
51 777
51 777
Current interest-bearing liab, IC
35 672
35 672
35 672
Current lease liabilities
3 897
3 897
1 949
1 949
Total current liabilities
91 346
91 346
53 725
37 621
Non-current bond loans
496 581
590 986
12 536
13 075
39 225
526 150
Non-current lease liabilities
15 365
16 690
3 637
9 879
3 174
Total non-current liabilities
511 947
607 675
12 536
16 712
49 104
529 324
For other receivables and payables measured at amortised cost the book value is
assumed to equal the fair value. For contractual cash ﬂows related to derivatives we
refer to hedge accounting further below.
MARKET RISK
Market risk is the risk that changes in market prices such as exchange rates, interest
rates and share prices will impact net income or the value of ﬁnancial instruments.
FOREIGN EXCHANGE RISK
The company and the Group are exposed to foreign exchange risk on purchases,
sales and loans in currencies other than the companies' functional currency. The
Group’s main exposure is to EUR, GBP and USD. The foreign exchange exposure is
primarily associated with operations in the Group’s foreign subsidiaries and with the
company’s and the Group’s liabilities in foreign currency. The ENRX subgroup uses
derivatives to limit foreign exchange risk associated with sales and trade receiv-
ables. The parent company and ENRX also use foreign currency loans and currency
swaps to limit foreign exchange risk associated with changes in value in the subsid-
iaries. The main foreign currency exposure in the parent company and the Group’s
Norwegian subsidiaries is to EUR.
(1 000 EUR)
Exposure at 31 December was as follows
Group
Parent Company
2022
2021
2022
2021
Bank deposits
12 814
19 329
153
466
Trade receivables
26 641
24 690
78
Trade payables
-2 170
-4 620
-40
Interest-bearing liabilities
-14 299
-12 086
Balance sheet exposure (foreign exchange risk)
22 986
27 313
191
466
A sensitivity analysis indicates that a 5% appreciation of NOK against EUR as at the year-end would impact earnings for the
Group in 2022 by the equivalent of MEUR -1.2 and in 2021 by the equivalent of MEUR -1.4. The amounts are stated before taxes.
Other subsidiaries have only modest exposure to currencies other than the company’s functional currency.
HEDGE ACCOUNTING
Some customer contracts are currency-hedged when entered into. Currency hedg-
ing is also carried out for budgeted cash ﬂows in foreign currency. The relevant deriv-
atives are forward contracts towards banks. The Group companies ENRX and Volue
report cash ﬂow hedging as hedging contracts.
At year-end the companies had the following forward currency contracts speciﬁed as hedging (1 000 NOK)
Contract value
Unrealised gains/losses
2022
Hedging of future cash ﬂows
202 708
1 869
Fair value hedging
Balance sheet exposure (hedging)
202 708
1 869
2021
Contract value
Unrealised gains/losses
Hedging of future cash ﬂows
395 196
11 614
Fair value hedging
-4 305
Balance sheet exposure (hedging)
395 196
7 309
Unrealised gains/losses relating to hedging of future cash ﬂows are recognised in “Other comprehensive income”.
The unrealised loss shown in the table is the value before deducting tax. Net unrealised losses/gains are recognised
as other current liabilities/assets.
Nominal value, carrying amount and maturity of forward currency contracts:
Currency
2023
2024
2025
Nominal amount
(currency)
Carrying amount
(1 000 NOK)
EUR
8 504
6 836
187
15 528
10 814
USD
10 350
1 300
11 650
-8 992
JPY
GBP
370
370
47
Total
1 869
210
211
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
INTEREST RATE RISK
Most of the company’s and the Group’s interest-bearing ﬁnancial assets and liabili-
ties accrue interest at variable rates. In 2021 the parent company took out
a bond of
MNOK 500 at an ﬁxed interest rate of 2,615%. An overview of interest-bearing assets
can be found earlier in this note and of liabilities in Note 17. A 1% change in interest
rates would affect earnings, and proﬁt and ﬁnancial items through the year, by a net
amount of around NOK -0,4 million. The amount is stated before taxes.
PRICE RISK FOR ENERGY SALES
Most of the company’s and the Group’s energy sales take place in the spot market,
which means there is exposure to risk associated with price ﬂuctuations. In the past
two years no energy derivatives have been used as hedging instruments to limit the
risk.
MARKET RISK RELATING TO SECURITIES
The company and the Group are exposed to price risk on investments in equity
instruments classiﬁed as ﬁnancial assets at fair value through OCI and ﬁnancial
assets at fair value throiugh income statement. All decisions on signiﬁcant purchases
and sales are made by the Board of Directors. The main objective of the investment
strategy is to maximise the return through ongoing dividends and increases in the
value of the portfolio. An overview of the company’s ﬁnancial assets is given earlier
in this note.
Group
Parent Company
2022
2021
2022
2021
Book
value
Fair
value
Book
value
Fair
value
Book
value
Fair
value
Book
value
Fair
value
Liabilities
Bond loans
497 581
450 000
496 581
492 500
497 581
450 000
496 581
491 961
Unrecognized income
between book- and fair value
-47 581
-4 621
-47 581
-4 621
Fair value categories ﬁnancial assets and liabilities
Group
Parent Company
2022
Fair value
through
income
Fair value
through
OCI
Amort.
cost
Sum
Fair value
through
income
Fair value
through
OCI
Amort.
cost
Sum
Carrying amount
ﬁnancial assets
Trade and other receivables
1 187 781
1 187 781
32 711
32 711
Cash and cash equivalents
2 339 664
2 339 664
1 160 349
1 160 349
through OCI
11 830
11 830
11 830
11 830
Loans to Group companies
786 851
786 851
Derivatives
11 065
11 065
Sum
11 065
11 830
3 527 445
3 550 341
11 830
1 979 911
1 991 742
Carrying amount
ﬁnancial liabilities
Derivative liabilities
9 196
9 196
Interest-bearing
loans and borrowings
666 856
666 856
153 307
153 307
Bond loans
497 581
497 581
497 581
497 581
Trade and other payables
969 613
969 613
12 105
12 105
Liabilities to
Group companies
17 185
17 185
Sum
9 196
2 134 050
2 143 246
680 179
680 179
2021
Carrying amount
ﬁnancial assets
Trade and other receivables
1 017 701
1 017 701
92 714
92 714
Cash and cash equivalents
2 708 412
2 708 412
1 411 245
1 411 245
through OCI
15 227
15 227
15 227
15 227
Loans to Group companies
71 268
71 268
Derivatives
11 317
11 317
Sum
11 317
15 227
3 726 113
3 752 657
15 227
1 575 228
1 590 454
Carrying amount
ﬁnancial liabilities
Derivative liabilities
4 305
4 305
Interest-bearing
loans and borrowings
426 670
426 670
Bond loans
496 581
496 581
496 581
496 581
Trade and other payables
753 718
753 718
51 777
51 777
Liabilities to
Group companies
35 672
35 672
Sum
4 305
1 676 969
1 681 274
584 030
584 030
Change in carrying amount in the period:
2022
2021
Balance at 1 January
7 012
-4 109
Changes in value posted as OCI
8 582
3 861
Reclassiﬁes from OCI to income statement
-8 582
7 260
Balance at 31 December
1 869
7 012
Asset
11 065
11 317
Liabilities
9 196
4 305
Total
1 869
7 012
212
213
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
FAIR VALUE HIERARCHY
The table below analyses ﬁnancial instruments measured at fair value according to
valuation method.
The different levels are deﬁned as follows:
•
Level 1:
Fair value is measured using listed prices from active markets
for identical ﬁnancial instruments. No adjustment is made to these prices.
•
Level 2:
Fair value is measured using other observable inputs than those
used at level 1, either directly (prices) or indirectly (derived from prices).
•
Level 3:
Fair value is measured using inputs that are
not based on observable market data (unobservable inputs).
2022
Level 1
Level 2
Level 3
Sum
Financial assets at fair value through OCI
11 831
11 831
Financial assets at fair value through income statement
Bond loans
-450 000
-450 000
Total
-438 169
-438 169
Other derivative ﬁnancial assets
11 065
11 065
Interest and currency swaps related to bond loans
Other derivative ﬁnancial liabilities
-9 196
-9 196
Grand Total
-436 300
-436 300
2021
Financial assets at fair value through OCI
15 227
15 227
Financial assets at fair value through income statement
Bond loans
-492 500
-492 500
Total
-477 273
-477 273
Other derivative ﬁnancial assets
11 317
11 317
Interest and currency swaps related to bond loans
Other derivative ﬁnancial liabilities
-4 305
-4 305
Grand Total
-470 261
-470 261
The fair value of the Bond loan is determined by using the indexed tax validation rules at year-end. The index is publicly available.
NOTE 17 INTEREST-BEARING DEBT AND PROVISIONS
(1 000 NOK)
This note provides information on the contractual terms of the Group’s interest-bearing loans and borrowings.
For more information on the Group’s interest rate risk and foreign exchange risk see Note 16.
Group / Parent
Bond loans
2022
2021
2,516% 2021 - 2028
500 000
500 000
Capitalised loan costs
-2 419
-3 419
Bond loans - booked value
497 581
496 581
Fair value (ref note 16)
450 000
492 500
Parent Company
Debenture loans
2022
2021
Euribor + ﬁxed margin
Floating interest
157 707
Capitalised loan costs
-4 400
Total denenture loans parent company
153 307
Subsidiaries
Tekna Consolidated
Fixed interest rate
4 698
34 857
Tekna Consolidated
Debenture loans
37 882
18 723
ENRX consolidated
Floating interest
139 994
90 425
AFK Property Group
Floating interest
135 651
146 463
Alytic AS
Floating interest
3 232
1 714
Ampwell Consolidated
Floating interest
49 144
Total Debenture loans Subsidiaries
370 600
292 182
Total Debenture loans Group
523 907
292 182
Group
Parent Company
Loans secured by pledged assets
2022
2021
2022
2021
Non-current interest-bearing debt
148 800
159 047
Bank overdraft
30 932
27 754
Total
179 733
186 801
Loans are secured
by the following pledged assets
Buildings and land
175 832
119 541
Vehicles, machinery and equipment
140 930
223 537
Inventories
435 132
318 187
Trade receivables
209 974
400 723
Total security
961 867
1 061 989
Security for promissory note and bond loans with a countervalue of MNOK 500 taken out in the parent company
has been given in the form of negative pledges. Trade receivables in two of the subsidiaries have been pledged
as security for bank guarantees and overdrafts given. For the Group the value-adjusted equity must be at least 40%
and have a value of at least MNOK 1 500. For Volue the equity must be al least MNOK 100 and at least 25% of total balance value.
For ENRX the equity must be at least 27%, gearing ratio (NIBD/ EBITDA) <3 and cash reserve > MEUR 10.
Tekna have some covernants connected to operational activities, but none ﬁnancial covenants.
All the companies are in compliance with the requirements of their covenants at 31 December 2022.
214
215
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 18 TRADE PAYABLES AND OTHER CURRENT LIABILITIES
(1 000 NOK)
Group
Parent Company
2022
2021
2022
2021
Trade payables
690 510
476 529
11 036
49 680
Other payables
279 103
277 194
Trade acc payable, IC
1 069
2 097
Account Payables
969 613
753 722
12 105
51 777
Social security taxes and VAT
160 194
102 622
44 581
Advance payments from customers point-in-time
15 230
1 068
Accrued interest cost
11 456
11 454
10 444
10 803
Other current liabilities
586 011
391 983
30 230
13 675
Other current liabilities
772 891
507 126
85 255
24 478
Earn-out liabilities Procom GmbH
60 431
57 253
Onerous contracts Volue group (note 13)
16 963
31 118
Restructuring provision ENRX
40 268
4 339
Current provisions
117 662
92 710
Restructuring provision ENRX
Provision 1 January
4 339
18 250
Increases
39 385
1 382
Provisions used
-5 072
-14 454
FX adjustments
1 615
5 178
Provision 31 December
40 268
4 339
A restructuring provision is recognised when the group has prepared a detailed restructuring plan and started the implementation
of the plan or communicated the plan. A restructuring plan shall include the following information: which business is affected;
the main units and personnel affected by the restructuring; as well as the costs to be incurred and the timetable of the plan.
The restructuring provision (severance pay) at 31 December 2022 is related to the ENRX segment business in Germany, and the
part of the business which has been unproﬁtable for a longer period. Following the restructuring, it is anticipated that the business
unit will deliver positive results. A restructuring provision related to severance pay is booked as other operating expenses.
The non-current provisions of NOK 1.9 million as of 31 December 2022 are mainly related to a guarantee granted by the
parent company to purchase ENRX shares from employees at an agreed price within the year 2027 when required.
NOTE 19 LEASES
(1 000 NOK)
Group
Parent Company
Carrying amount right-of-use assets
2022
2021
2022
2021
Buildings
238 022
185 328
62 236
18 499
Vehicles, machinery and equipment
9 670
9 274
322
490
Sum
247 692
194 602
62 558
18 989
Lease liabilities
Current lease liabilities
58 454
64 449
2 300
3 897
Non-current lease liabilities
203 076
141 601
60 258
15 365
Sum
261 530
206 050
62 558
19 263
Income effects
Buildings depreciation
70 355
62 095
3 516
3 298
Vehicles, machinery and equipment
7 132
6 414
168
14
Sum depreciation
77 487
68 509
3 684
3 312
Interest expense on lease
7 526
7 257
740
581
We refer to note 5 for a speciﬁcation of the movements of Right-of-Use assets.
216
217
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 20 EVENTS AFTER THE REPORTING PERIOD
NOTE 21 ACCOUNTING ESTIMATES AND ASSESSMENTS
On 10 January 2023 Arendals Fossekompani announced that Benjamin Kristoffer
Golding has been appointed as new CEO of the company.
On 9 February 2023, the Board of Directors decided to pay an ordinary cash divi-
dend of NOK 0.95 per share for the fourth quarter 2022. The dividend was paid on
22 February.
On 8 March 2023, the construction of Kilandsfoss Hydropower Plant began. When
ﬁnalized in 2025, Kilandsfoss will produce approximately 38 GWh. Project partners
are the municipalities of Froland and Åmli, each with one-third ownership.
On XX, Arendals Fossekompani and Tekna signed a loan facility agreement totaling
MCAD 25 to ﬁnance operations and further growth in Tekna. The facility will be made
available in three tranches (MCAD 5+10+10).
Re-ﬁnancing ENRX available in three tranches (MCAD 5+10+10).
KEY ACCOUNTING ESTIMATES
Key accounting estimates are estimates that are important for the presentation of
the company’s and the Group’s ﬁnancial position and earnings, and which require
subjective assessment. Arendals Fossekompani assesses such estimates contin-
ually based on historical results and experience, consultation with experts, trends,
forecasts and other methods considered reasonable in each individual case.
IMPAIRMENT LOSSES
Goodwill and other intangible assets with an indeﬁnite life are tested for impairment
annually. The company’s investments in subsidiaries and associates are similarly
tested for impairment. The assessments are based on analysis of the company's
ﬁnancial position and forecasts/outlook. Recoverable amounts that are measured
against carrying amounts are the expected selling price or the present value of
cash ﬂows from the investment. Other assets, including property, plant and equip-
mentand ﬁnancial instruments available for sale, are tested for impairment when
there is an indication that a fall in value may have occurred.
CONSTRUCTION CONTRACTS
The Group recognises revenue from individual projects in accordance with the per-
centage of completion method. For such projects the degree of completion is cal-
culated as costs incurred relative to total estimated costs. The greatest uncertainty
is associated with measurement of the project’s total estimated costs. The group
has implemented controls to ensure that accounting for revenue over time reﬂects
management's best estimate with respect to total contract revenue, cost, and if
applicable stage of completion. The group uses the stage of completion method to
determine the contract revenue recognised over time in the period. The method to
determine the stage of completion is costs spent compared to total estimated costs
or direct labour spent compared to total estimated direct labour. The estimation
uncertainty is primarily related to cost calculation and measurement of progress.
When project's remaining costs cannot be reliaby estimated,only revenues equal to
the accrued project costs will be recognised as revenues.
218
219
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 22 EARNINGS PER SHARE IN NOK
BASIC EARNINGS PER SHARE/DILUTED
Basic earnings per share are based on proﬁt attributable to the equity holders of the
parent and the weighted average number of outstanding ordinary shares during the
year, which was 54.851.441 (2021:54.890.000), calculated as follows:
Proﬁt attributable to ordinary shares (1 000 NOK)
2022
2021
Net proﬁt for the year
-32 519
125 827
Minority interest
-38 263
19 118
Equity holders of the parent
5 744
106 709
Weighted average number of ordinary shares
Issued ordinary shares, 1 January
55 995 250
55 995 250
Effect of treasury shares
-1 188 319
-1 099 300
Number of outstanding shares as at 31 December
54 806 931
54 895 950
Weighted average number of ordinary shares for the year
54 851 441
54 890 000
Basic earnings per share / diluted earnings per share (NOK)
0,10
1,94
NOTE 23 THE TWENTY LARGEST SHAREHOLDERS
Number of shares
Shareholding
Ulefoss Invest AS
14 709 875
26,3%
Havfonn AS
14 567 900
26,0%
Must Invest AS
14 106 225
25,2%
Arendals Fossekompani ASA
1 188 319
2,1%
Svanhild og Arne Must Fond
657 225
1,2%
Fabulous AS
453 853
0,8%
Per-Dietrich Johansen
375 375
0,7%
Fondsﬁnans Pensjonskasse
356 228
0,6%
Fløtemarken AS
348 094
0,6%
Folketrygdfondet
332 000
0,6%
Erik Bøhler
280 100
0,5%
Sverre Valvik AS
266 000
0,5%
Bøhler Invest AS
265 000
0,5%
Aksel Oland
237 994
0,4%
Ropern AS
237 478
0,4%
JP Morgan Chase Bank, N.A., London
218 156
0,4%
Annelise Altenburg Must
216 675
0,4%
Erik Christian Must
180 000
0,3%
Trine Must
180 000
0,3%
Falck Frås AS
170 000
0,3%
49 346 497
88,1%
With reference to section 7-26 of the Norwegian Accounting Act the following can be disclosed concerning shares
owned by individual Board members and the CEO, including shares owned by spouses, children who are minors
or by companies in which the person in question has a controlling interest.
Own holdings
Related parties
Total
Board of Directors
Trond Westlie
-
Morten Bergesen
14 567 900
14 567 900
Didrik Vigsnæs
18 000
18 000
Christian Must
180 000
14 106 225
14 286 225
Lise Lindback
-
Anne Grethe Dalane
-
Stine Rolstad Brenna
7 500
7 500
180 000
28 699 625
28 879 625
Senior Executives
Ørjan Svanevik*
17 637
17 637
Lars Peder Fensli *
8 144
8 144
Morten Henriksen *
7 819
7 819
Torkil Mogstad *
7 819
7 819
Ingunn Ettestøl*
7 212
7 212
-
48 631
48 631
* See Note 4 regarding share-based payments.
NOTE 24
RELATED PARTIES
The company’s/Group’s related parties comprise subsidiaries, associates and mem-
bers of the Board of Directors and senior management team.
KEY EXECUTIVES
Members of the Board of Directors and the company management and their clos-
est relations control 51.7% of shares with voting rights in the company. Loans to
senior executives (see Note 4) amounted to tNOK 10.922 (2021: tNOK 9.855) as at 31
December. These loans are included in “other investments”. Interest is charged on
loans to senior executives at a rate that never triggers a taxable beneﬁt. In addition
to regular salaries, senior executives have agreements on other beneﬁts in the form
of a deﬁned-contribution pension scheme. (See Note 4).
RELATED PARTY TRANSACTIONS
Transactions between Group companies and other related parties are based on the
principles of market value and arm’s length.In 2022 Arendals Fossekompani pur-
chased services relating to market management for tNOK 866 from Volue Market
Services (tNOK 1.017). In 2022 Arendals Fossekompani had a gain on foreign currency
loans to Volue Market Services of tNOK 647 (loss of tNOK 2.259 in 2020). In 2022
Tekna sold goods it had produced to EFD Induction for tCAD 2 (tCAD 358). Arendals
Fossekompani ASA supply AFK Property, Vergia, Ampwell and Alytic with adminis-
trative services, all invoiced based market value. Interest is charged on loans from
the AFK parent company to companies in the Group in accordance with the agree-
ment entered into. We also refer to note 4 for information regarding
share-based
payments within the group.
220
221
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 25 CHANGE IN LOANS AND BORROWINGS
(1 000 NOK)
Loans maturing after
more than one year
Loans maturing in
less than one year
Total interest-
bearing liabilities
Note
2022
2021
2022
2021
2022
2021
Group
Total Opening Balance
828 412
613 241
300 888
677 482
1 129 301
1 290 723
Cash from new borrowings
CF
268 680
560 221
268 680
560 221
Repayment of long-term borrowings
CF
-256 833
-673 015
-256 833
-673 015
Cash ﬂow from net change in current
interest bearing debt
CF
2 686
-95 029
2 686
-95 029
Other changes with no cash effect
225 268
320 701
22 651
-280 231
247 918
40 470
Total Effect from Foreign Exchange
20 277
7 264
13 939
-1 334
34 216
5 930
Closing Balance
1 085 804
828 412
340 164
300 888
1 425 968
1 129 301
Parent Company
Total Opening Balance
511 947
233 887
3 897
303 443
515 844
537 330
Cash from new borrowings
CF
147 763
496 775
147 763
496 775
Repayment of long-term borrowings
CF
-3 958
-525 131
-3 958
-525 131
Other changes with no cash effect
48 850
301 219
-1 597
-299 546
47 253
1 673
Closing Balance
711 146
511 947
2 300
3 897
713 446
515 844
Group
2022
2021
Bond
497 581
496 581
Interest-bearing liabilities
and credits (long-term)
353 067
169 850
Other non-current liabilities
32 079
20 380
Non-current lease liabilities
203 076
141 601
Loans maturing after more than one year
1 085 804
828 412
Interest-bearing liabilities
and credits (short-term)
281 709
236 440
Current lease liabilities
58 454
64 449
Loans maturing in less than one year
340 163
300 888
Total interest-bearing liabilities
1 425 967
1 129 301
Parent Company
2022
2021
Bond
497 581
496 581
Interest-bearing liabilities
and credits (long-term)
153 307
Non-current lease liabilities
60 258
15 365
Loans maturing after more than one year
711 146
511 947
Interest-bearing liabilities
and credits (short-term)
Current lease liabilities
2 300
3 897
Loans maturing in less than one year
2 300
3 897
Total interest-bearing liabilities
713 446
515 844
NOTE 26 SALE OF SUBSIDIARY
(1000 NOK)
SALE OF COGEN ENERGIA ESPANA IN 2021
In July 2021 Arendals Fossekompani sold its 100% shareholding in Cogen Energia
Espana. Consequently, the company’s ﬁnancial ﬁgures have been recognised on
separate lines in the income statement
as discontinued operations and in the bal-
ance sheet as assets held for sale. The gain on disposal of Cogen of tNOK 21 264 is
included in “Proﬁt/loss from discontinued operations”. Cogen’s key ﬁgures relating
to the income statement for 2021 are presented below.
2022
2021
Operating revenues and operating costs
YTD
Full year
Operating revenue
280 935
Operating expense
262 329
Depreciation
9 347
Operating proﬁt
9 238
Net ﬁnancial items
-1 681
Proﬁt before income tax
7 557
Income tax expense
Proﬁt (-loss)
from discontinued operation
7 557
Proﬁt from the sale of Cogen Energia Espana
21 264
Net discontinued operations income (after tax)
28 822
Basic/diluted earnings per share (NOK)
0,00
0,53
* The gain on disposal of Cogen of tNOK 21 264, including tNOK 6 550 of accumulated currency translation differences
reclassiﬁed from other comprehensive income, is included in proﬁt/loss from discontinued operations.
222
223
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
NOTE 27 CLIMATE-RELATED RISKS
Arendals Fossekompani (AFK) has assessed climate-related risks based on the
recommendations of the Financial Stability Board's Task Force on Climate-related
Financial Disclosures (TCFD) and has documented the recommended disclosures
and responses in a stand-alone TCFD report. The report covers the company's
exposure to climate-related risks, such as physical, regulatory/liability, technology,
market, and reputational risks, as well as potential opportunities. AFK has not at this
time identiﬁed any material impact on ﬁnancial reporting judgements and estimates
due to climate risks. AFK has ongoing assessments related to EU Taxonomy, and
other internal initiatives to reduce its climate risk exposure. Whilst there is currently
no material impact expected from climate change in the medium term, AFK follows
developments and will regularly assess its portfolio risk exposure to transitional and
physical climate risks.
NOTE 28 CONTINGENT LIABILITIES
A claim has been raised towards Volue Market Services AS related to ﬁnancial market
operations. No provisions has been made
related to the claim at 31 December 2022.
NIBD
Hydropower
Group Management
Volue
NSSLGlobal
Consolidated
ENRX
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Bond
497 042
497 121
Non-current inter-
est-bearing debt
153 846
-539
618
142
Interest-bearing
current borrowings
1st year installm.
non-current
borrowings
139 378
90 284
Bond
Interest and ex
rate swap (curr.)
Bank overdraft
6 892
17 529
23 697
16 185
80 280
80 392
Current and non
current liabilities IC
17 731
35 672
30 574
40 458
363 423
807
Total liabilities
668 619
532 254
37 465
57 987
23 697
16 185
583 698
171 624
Cash and cash
equivalents
1 160 721
1 411 245
446 350
404 390
379 586
338 132
158 950
140 661
Intercompany
loans
320 728
5 050
Current inter-
est-bearing rec., IC
466 123
66 218
17 185
35 672
Financial assets
classiﬁed as
held for trading
Total asets
1 947 571
1 482 513
463 535
440 062
379 586
338 132
158 950
140 661
Net interest
bearing debt
-1 278 952
-950 260
-426 070
-382 075
-355 888
-321 947
424 747
30 963
Tekna Group
AFK Property Group
Alytic (Cons)
Ampwell Group
Vergia Group
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
FY22
FY21
Bond
-539
Interest and ex
rate swap n-c
Non-current inter-
est-bearing debt
29 991
26 219
130 961
141 774
3 232
1 714
34 958
539
Interest-
bearing current
borrowings (inp)
8 717
25 970
14 185
1st year installm.
non-current
borrowings
3 872
1 391
4 689
4 689
Bond
Interest and ex
rate swap (curr.)
Bank overdraft
Current and non
current liabilities IC
65
35 114
30 764
2 508
-19
330 523
23 000
Total liabilities
42 580
53 646
170 764
177 227
5 740
1 695
379 667
23 000
Cash and cash
equivalents
82 739
268 223
35 885
108 719
50 887
27 089
6 458
18 089
9 953
Intercompany
loans
Current inter-
est-bearing rec., IC
-23
104
Financial assets
classiﬁed as held
for trading
Total asets
82 739
268 223
35 863
108 823
50 887
27 089
6 458
18 089
9 953
Net interest
bearing debt
-40 158
-214 578
134 901
68 404
-45 146
-25 394
373 209
4 911
-9 953
224
225
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Eliminations
Total
FY22
FY21
FY22
FY21
Bond
497 581
497 121
Interest and
ex rate swap n-c
Non-current inter-
est-bearing debt
353 067
169 310
Interest-
bearing current
borrowings (inp)
22 902
25 970
1st year installm.
non-current
borrowings
147 938
96 364
Bond
Interest and ex
rate swap (curr.)
Bank overdraft
110 869
114 106
Current and non
current liabilities IC
-810 569
-1 163
703
Total liabilities
-810 569
-107 044
1 131 194
903 574
Cash and cash
equivalents
2 339 664
2 708 412
Intercompany
loans
-320 728
-5 050
Current inter-
est-bearing rec., IC
-489 841
-101 994
-23
Financial assets
classiﬁed as
held for trading
Total asets
-810 569
-107 044
2 339 642
2 708 412
Net interest
bearing debt
-1 208 447
-1 804 838
FINANCIAL PERFORMANCE MEASURES
Group
2022
2021
2020
2019
2018
Sales
4 586 536
4 232 290
3 157 470
3 226 253
3 170 686
Cost of sales
1 446 542
1 585 290
1 062 363
1 036 194
975 389
EBITDA
10)
726 417
685 819
400 973
489 648
428 055
Operating proﬁt
428 740
450 227
160 745
236 825
207 013
Net ﬁnancial items
37 285
-106 316
-46 935
11 249
22 471
Equity company income
-40 405
-12 173
-14 321
-1 632
-3 061
Proﬁt before taxes
425 620
331 738
99 489
236 212
226 423
Provision for income tax
-458 139
-234 733
-33 709
-139 951
-121 593
Net proﬁt for the year, continuing operations
-32 519
97 005
65 780
93 671
105 032
Net discontinued operations income
28 822
54 355
-46 953
35 703
Net proﬁt for the year
-32 519
125 827
120 135
46 718
140 735
Minority interest income
5 744
19 118
58 218
-1 313
-28 322
Total Comprehensive Income
12 208
159 804
-40 302
269 972
762 375
KEY FIGURES
Group
2022
2021
2020
2019
2018
Return on equity
1)
%
-0,8%
2,5%
1,8%
2,9%
2,8%
Total proﬁtability
2)
%
0,2%
2,2%
2,1%
2,5%
2,2%
Gross operating margin
3)
%
15,8%
16,2%
12,7%
15,2%
13,5%
Net operating margin
4)
%
9,35%
10,64%
5,09%
7,34%
6,53%
Gross proﬁt margin
5)
%
-0,7%
2,3%
2,1%
2,9%
3,3%
Equity share
6)
%
48,3%
57,2%
55,2%
54,0%
53,8%
NIBD (tNOK)
7)
-1 208 447
-1 804 838
-580 420
-199 037
53 426
Liquidity ratio 1
8)
1,6
2,2
1,9
2,2
2,0
Result after tax per share
9)
NOK
-0,59
2,29
2,19
0,85
2,57
Dividend per share
NOK
7,45
37,04
1,20
2,24
2,24
Average power production last 10 years (GWh)
501
514
509
502
502
DEFINITIONS
1.
Return on equity
Net proﬁt for the year, continuing operations divided onaverage equity
2.
Total proﬁtability
Net proﬁt for the year, continuing operations
+ interest cost divided on average total capital
3.
Gross operating margin
Operating proﬁt + depreciation in percentage of net operating income
4.
Net operating margin
Operating income in percentage of net operating income.
5.
Gross proﬁt margin
Net proﬁt for the year, continuing operations
divided on net operating income
6.
Equity share
Equity divided on total capital
7.
NIBD - Net interest bearing debt
Ineterst bearing debt
- interest bearing receviables - cash
8.
Liquidity ratio 1
Current assets divided on current liability
9.
Result after tax per share (EPS)
Net proﬁt for the year divided on averange number of shares
10.
Result before interest, tax, depreciation,
amortization and impairment
Operating income- operating cost
226
227
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Declaration by
the members
of the Board
and the CEO
The Board and CEO have reviewed and approved the
Annual Report and Annual Financial Statements for
Arendals Fossekompani ASA, which includes the Group
and the Parent Company, for the calendar year 2022
and as at 31 December 2022 (Annual Report for 2022).
The single-entity ﬁnancial statements and consolidated ﬁnancial statements have
been prepared in accordance with IFRS as adopted by the European Union, along
with relevant interpretations, and in compliance with further disclosure require-
ments pursuant to the Norwegian Accounting Act applicable as at 31 December
2022. The Annual Report for the Group and Parent Company has been prepared in
accordance with the provisions of the Norwegian Accounting Act and Norwegian
Accounting Standard 16 as at 31 December 2022.
TO THE BEST OF OUR KNOWLEDGE:
•
the Annual Financial Statements for 2022 for the Group
and the Parent Company have been prepared in accordance
with applicable accounting standards
•
the information presented in the ﬁnancial statements provides
a true and fair view of Group’s and the Parent Company’s assets,
liabilities, ﬁnancial position and performance as a whole as at
31 December 2022
•
the Annual Report for the Group and the Parent Company
provides a true and fair view of:
•
the development, results and ﬁnancial position of the Group
and the Parent Company, and the key risks and uncertainties
faced by the Group and the Parent Company.
Froland, 11 April 2023
Trond Westlie,
Chairman
Stine Rolstad Brenna,
Board Member
Lise Lindbäck,
Board Member
Morten Bergesen,
Board Member
Didrik Vigsnæs,
Board Member
Anne Grethe Dalane,
Board Member
Lars Peder Fensli,
Acting CEO and CFO
Christian Must,
Board Member
228
229
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
PricewaterhouseCoopers AS, Kystveien 14, NO-4841 Arendal
T: 02316, org. no.: 987 009 713 MVA, www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the General Meeting of Arendals Fossekompani ASA
Independent Auditor’s Report
Report on the Audit of the Financial Statements
Opinion
We have audited the financial statements of Arendals Fossekompani ASA, which comprise:
•
the financial statements of the parent company Arendals Fossekompani ASA (the Company),
which comprise the statement of financial position as at 31 December 2022, the statement of
income, statement of comprehensive income, statement of changes in equity and statement of
cash flows for the year then ended, and notes to the financial statements, including a
summary of significant accounting policies, and
•
the consolidated financial statements of Arendals Fossekompani ASA and its subsidiaries (the
Group), which comprise the statement of financial position as at 31 December 2022, the
statement of income, statement of comprehensive income, statement of changes in equity and
statement of cash flows for the year then ended, and notes to the financial statements,
including a summary of significant accounting policies.
In our opinion
•
the financial statements comply with applicable statutory requirements,
•
the financial statements give a true and fair view of the financial position of the Company as at
31 December 2022, and its financial performance and its cash flows for the year then ended in
accordance with International Financial Reporting Standards as adopted by the EU, and
•
the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2022, and its financial performance and its cash flows for the year
then ended in accordance with International Financial Reporting Standards as adopted by the
EU.
Our opinion is consistent with our additional report to the Audit Committee.
Basis for Opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the
Au
ditor’s Responsibilities for the
Audit of the Financial Statements
section of our report. We are independent of the Company and the
Group as required by relevant laws and regulations in Norway and the International Ethics Standards
Board for Accountants’ I
nternational Code of Ethics for Professional Accountants (including
International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 5 years from the election by the general meeting of the
shareholders on 26 April 2018 for the accounting year 2018.
2 / 6
Key Audit Matters
Key audit matters are those matters that, in our professional judgment, were of most significance in
our audit of the financial statements of the current period. These matters were addressed in the
context of our audit of the financial statements as a whole, and in forming our opinion thereon, and we
do not provide a separate opinion on these matters.
The
Group’s business activities are largely unchanged compared to last year. We have not identified
regulatory changes, transactions or other event that qualified as new Key Audit Matters for our audit of
the 2022 financial statements. Furthermore,
Revenue over time from contracts with customers
and
Valuation of goodwill and intangible assets
have the same characteristics and risks as in the prior
year, and therefore continue to be areas of focus this year.
Key Audit Matters
How our audit addressed the Key Audit Matter
Revenue over time from contracts with
customers
In 2022, revenue recognised over time from
contracts with customers constituted
NOK 1
656 674 thousand, equal to
approximately 36% of total operating
revenues.
NOK 244 349 thousand of
revenue re
cognised over time is accrued
income form uncompleted contracts at the
balance
-sheet date. Revenue over time
from contracts with customers is recognized
based on expected final outcome.
Assessments of total contract cost, revenue
and, if applicable, stage
of completion are
updated on a regular basis.
There are several reasons why we consider
revenue recognised over time to be a key
audit matter. The Group has a significant
volume of contracts where revenues are
recognised over time. Additionally, these
contracts may have a long duration and the
allocat
ion of contract revenue and costs is
subject to management judgement which
may be complex. Furthermore,
management’s judgement affects several
significant financial statement line items,
and thus has a pervasive effect on the
financial statement.
Notes 1
and 13 to the consolidated financial
statement, and the accounting principles,
include additional information on the
Group’s recognition of revenue over time
from contracts with customers.
We obtained a sample of contracts and assessed the
accounting treatment against the Group’s accounting
principles and
IFRS 15 Revenue from contracts with
customers
. We found that the accounting treatment
was consistent with the content of the contracts and
that accounting principles were based on IFRS 15.
Through meetings with management and project
leader, including review of relevant documentation, we
tested whether the Group had implemented controls to
ensure that accounting for revenue over time reflects
management’s best estimates with respect to total
contract revenue, cost, and if applicable stage of
completion. We found that controls had been
implemented at various levels of the organisation, and
that the controls included periodic meetings to review
open contracts.
Estimating project revenue and associated costs, and
if applicable calculating stage of completion requires
judgement. We performed various procedures to
assess whether management’s judgements were
reasonable, including:
•
Interviewed project leaders and management
challenging judgements made with respect to
project estimates.
•
Compared expenses and hours incurred to
budgeted expenses and hours.
•
Compared actual outcome on completed project
against initial budget.
230
231
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
3 / 6
•
If applicable assessed whether stage of
completion on open projects corresponds to
amounts recognised in the financial statements.
We found that assumptions used, and judgements
made by management were reasonable. We further
evaluated the disclosures in note 1 and 13 and found
them to be adequate and appropriate.
Valuation of goodwill and intangible assets
On 31 December 2022 the carrying amount
of goodwill and intangible assets in the
Group’s financial statements was
NOK
1 756 782 thousand, equal to
approximately
22% of total assets. Goodwill
and intangible assets with indefinite
economic life are tested for impairment at
least annually. Impairment testing is
performed at the level of cash generating
unit. When testing for impairment, the
carrying amount is compared
to the
recoverable amount. The recoverable
amount is determined based on value in use
or fair value less cost of disposal.
On 31 December 2022, management’s
impairment assessment indicated that the
recoverable amount exceeded the carrying
amount for all c
ash generating units where
goodwill and intangible assets were
recognised. As a result, no impairment was
recorded.
We focused on valuation of goodwill and
intangible assets because these assets
constitute a significant share of the Group’s
total assets,
and because calculation of the
recoverable amount requires application of
significant judgement by management.
Refer to note
6 to the consolidated financial
statements for further information on
goodwill and intangible assets, cash
generating units and im
pairment testing.
We obtained and gained an understanding of
management’s impairment assessment related to
goodwill and intangible assets. Our procedures
included an assessment of the valuation method and
whether key assumptions used by management
appeared reasonable based on our understanding of
the business and industry of each relevant cash
generating unit. We also traced data used in valuation
models to underlying documentation.
Based on our audit procedures we found that valuation
methods used were reasonable and consistent with
our understanding of the business and industry. Our
testing of data against underlying documentation did
not uncover material exceptions. While we did not find
evidence to indicate that goodwill or intangible assets
were impaired, we note that the valuation of cash
generating units is sensitive to changes in
assumptions.
Lastly, we evaluated the information provided in note 6
to the consolidated financial statements where
management describes the Group’s goodwill and
intangible assets and the results of the impairment
testing. We found that the disclosures described
management’s valuation of goodwill and intangible
assets appropriately.
4 / 6
Other Information
The Board of Directors and the Managing Director (management) are responsible for the information
in the Board of Directors’ report and the other information accompanying the financial statements. The
other information comprises information in the annual report, but does not include the financial
statements and our auditor’s report thereon.
Our opinion on the financial statements does not cover
the information in the Board of Directors’ report nor the other information accompanying the financial
statements.
In connection with our audit of the financial statements, our responsibility is to read the Board of
Directors’ report and the other information accompanying the financial statements. The purpose is to
consider if there is material inconsisten
cy between the Board of Directors’ report and the other
information accompanying the financial statements and the financial statements or our knowledge
obtained in the audit, or whether the Board of Directors’ report and the other information
accompanying the financial statements otherwise appear to be materially misstated. We are required
to report if there is a material misstatement in the Board of Directors’ report or the other information
accompanying the financial statements. We have nothing to report in this regard.
Based on our knowledge obtained in the audit, it is our opinion that the Board of Directors’ report
•
is consistent with the financial statements and
•
contains the information required by applicable statutory requirements.
Our opinion on the B
oard of Director’s report applies correspondingly to the statements on Corporate
Governance and Corporate Social Responsibility.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation of financial statements that give a true and fair view in
accordance with International Financial Reporting Standards as adopted by the EU, and for such
internal control as management determines is necessary to enable the preparation of financial
statements that are free from material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and
the Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going
concern and using the going concern basis of accounting unless management either intends to
liquidate the Group or to cease operations, or has no realistic alternative but to do so.
Auditor’s Responsibilities for the Audit of the Financial
Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole
are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that
includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that
an audit conducted in accordance with ISAs will always detect a material misstatement when it exists.
Misstatements can arise from fraud or error and are considered material if, individually or in aggregate,
they could reasonably be expected to influence the economic decisions of users taken on the basis of
these financial statements.
As part of an audit in accordance with ISAs, we exercise professional judgment and maintain
professional scepticism throughout the audit. We also:
•
identify and assess the risks of material misstatement of the financial statements, whether due
to fraud or error. We design and perform audit procedures responsive to those risks, and
obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The
232
233
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
5 / 6
risk of not detecting a material misstatement resulting from fraud is higher than for one
resulting from error, as fraud may involve collusion, forgery, intentional omissions,
misrepresentations, or the override of internal control.
•
obtain an understanding of internal control relevant to the audit in order to design audit
procedures that are appropriate in the circumstances, but not for the purpose of expressing an
opinion on the effectiveness of the Company's and the Group's internal control.
•
evaluate the appropriateness of accounting policies used and the reasonableness of
accounting estimates and related disclosures made by management.
•
conclude on the appropriateness of management’s use of the
going concern basis of
accounting and, based on the audit evidence obtained, whether a material uncertainty exists
related to events or conditions that may cast significant doubt on the Company's and the
Group's ability to continue as a going concern. If we conclude that a material uncertainty
exists, we are required to draw attention in our auditor’s report to the related disclosures in the
financial statements or, if such disclosures are inadequate, to modify our opinion. Our
conclusions are based on the
audit evidence obtained up to the date of our auditor’s report.
However, future events or conditions may cause the Company and the Group to cease to
continue as a going concern.
•
evaluate the overall presentation, structure and content of the financial statements, including
the disclosures, and whether the financial statements represent the underlying transactions
and events in a manner that achieves a true and fair view.
•
obtain sufficient appropriate audit evidence regarding the financial information of the entities or
business activities within the Group to express an opinion on the consolidated financial
statements. We are responsible for the direction, supervision and performance of the group
audit. We remain solely responsible for our audit opinion.
We communicate with the Board of Directors regarding, among other matters, the planned scope and
timing of the audit and significant audit findings, including any significant deficiencies in internal control
that we identify during our audit.
We also provide the Audit Committee with a statement that we have complied with relevant ethical
requirements regarding independence, and to communicate with them all relationships and other
matters that may reasonably be thought to bear on our independence, and where applicable, related
safeguards.
From the matters communicated with the Board of Directors, we determine those matters that were of
most significance in the audit of the financial statements of the current period and are therefore the
key audit matters. We
describe these matters in our auditor’s report unless law or regulation precludes
public disclosure about the matter or when, in extremely rare circumstances, we determine that a
matter should not be communicated in our report because the adverse consequences of doing so
would reasonably be expected to outweigh the public interest benefits of such communication.
6 / 6
Report on Other Legal and Regulatory Requirements
Report on Compliance with Requirement on European Single Electronic Format (ESEF)
Opinion
As part of the audit of the financial statements of Arendals Fossekompani ASA, we have performed an
assurance engagement to obtain reasonable assurance about whether the financial statements
included in the annual report, with the file name AFK Annual Report 2022.zip, have been prepared, in
all material respects, in compliance with the requirements of the Commission Delegated Regulation
(EU) 2019/815 on the European Single Electronic Format (ESEF Regulation) and regulation pursuant
to Section 5-5 of the Norwegian Securities Trading Act, which includes requirements related to the
preparation of the annual report in XHTML format, and iXBRL tagging of the consolidated financial
statements.
In our opinion, the financial statements, included in the annual report, have been prepared, in all
material respects, in compliance with the ESEF regulation.
Management’s Responsibilities
Management is responsible for the preparation of the annual report in compliance with the ESEF
regulation. This responsibility comprises an adequate process and such internal control as
management determines is necessary.
Auditor’s Responsibilities
For a description of the auditor’s responsibilities when performing an assurance engagement of the
ESEF reporting, see:
https://revisorforeningen.no/revisjonsberetninger
Arendal, 11 April 2023
PricewaterhouseCoopers AS
Lars Ole Lindal
State Authorised Public Accountant
234
235
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
FINANCIAL STATEMENTS
ANNUAL AND SUSTAINABILITY REPORT
Appendix
06
GRI Content Index
238
Independent Auditor’s Statement
246
List of Abbreviations
248
Additional Reports
250
Activity and Reporting Obligations Report 2022
Carbon Accounting Report 2022
EU Taxonomy Report 2022
Human Rights and Transparency Act Report 2022
Remuneration Report 2022
TCFD: Climate-Risk Assessment Report 2022
About This Report
251
237
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
GRI Content
Index
Arendals Fossekompani has reported in accordance with the
GRI Standards for the reporting period 1 January to 31 December 2022.
Disclosure
Disclosure description
Omission
Reference
1. THE ORGANIZATION AND ITS REPORTING PRACTICES
2-1
Organizational details
Shareholder information (Stock Exchange Listing)
Arendals Fossekompani in the world
2-2
Entities included in
the organization’s
sustainability reporting
Notes to the ﬁnancial accounts (Note 1)
About this report
2-3
Reporting period,
frequency and
contact point
About this report
2-4
Restatements
of information
About this report
2-5
External assurance
About this report
Corporate Governance report (Auditor)
2. ACTIVITY AND WORKERS
2-6
Activities, value chain
and other business
relationships
Who we are
Arendals Fossekompani Group
Stakeholder dialogue and materiality analysis
Responsible supply chain
2-7
Employees
The disclosure requirements
are met with one minor
exception: AFK did not manage
to gather information about
non-guarenteed hour employ-
ees in 2022, but will improve
data gathering processes and
plans to obtain the information
in 2023.
Diversity and equality
2-8
Workers who
are not employees
Information not available: The
company did not manage to
gather this information for all
portfolio companies in 2022,
but will improve data gathering
processes and plans to obtain
the information in 2023.
Disclosure
Disclosure description
Omission
Reference
3. GOVERNANCE
2-9
Governance structure
and composition
Corporate governance report (Board of Directors:
Composition and independence, Nominations
committee, The work of the Board of Directors,
Guidelines for equality and diversity)
2-10
Nomination and
selection of the highest
governance body
Corporate governance report (Board of
Directors: Composition and Independence,
Nominations committee)
2-11
Chair of the highest
governance body
Corporate governance report (Board of
Directors: Composition and Independence)
2-12
Role of the highest
governance body
in overseeing the
management of impacts
Corporate governance report
(The work of the Board of Directors, The Board’s tasks)
2-13
Delegation of
responsibility for
managing impacts
Corporate governance report
(The work of the Board of Directors, The Board's tasks
og Notice of board meetings and meeting procedures.)
2-14
Role of the highest
governance body in
sustainability reporting
Corporate governance report
(The work of the Board of Directors, The board's tasks)
About this report
2-15
Conﬂict of interest
Corporate governance report
(Board of Directors: Composition and independence,
Independence of Board of Directors)
2-16
Communication
of critical concerns
Corporate governance report
(Risk management
and internal control, Critical concerns)
2-17
Collective knowledge
of the highest
governance body
Corporate governance report (The work
of the Board of Directors, Critical concerns)
2-18
Evaluation of the per
-
formance of the highest
governance body
Corporate governance report
(The work of the Board of Directors,
Self-assessment)
2-19
Remuneration policies
Corporate governance report
(Remuneration of senior executives)
https://afk-assets.fra1.digitaloceanspaces.com/web-
site/documents/Policy-for-remuneration-of-executive-
management-in-AFK.pdf
2-20
Process to determine
remuneration
Corporate governance report (Remuneration
of Senior Executives, The work of the Board of Directors)
2-21
Annual total
compensation
ratio
a. The disclosure require-
ments are met based on
calculations using average
salary, not median.
b.
As this is a new requirement
we did not collect salary
information in 2021 and
could therefore not
calculate percentage
increase for 2022.
Diversity and equality (performance)
Remuneration report
GRI 2 - General Disclosures 2021
238
239
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
Disclosure
Disclosure description
Omission
Reference
4. STRATEGY, POLICIES AND PRACTICES
2-22
Statement
on sustainable
development strategy
CEO statement
2-23
Policy commitments
Responsible supply chain
Anti-corruption and bribery
Corporate governance report
(Risk management and internal control)
2-24
Embedding policy
commitments
Human Rights and Transparency Act Report 2022
Corporate Governance report
2-25
Processes to remediate
negative impacts
Responsible supply chain
2-26
Mechanisms for
seeking advice and
raising concerns
Human Rights and Transparency Act Report 2022
AFK Parent Company
2-27
Compliance with
laws and regulations
Responsible supply chain
2-28
Membership
associations
Membership associations
5. STAKEHOLDER ENGAGEMENT
2-29
Approach to stakeholder
engagement
Stakeholder dialogue and materiality analysis
2-30
Collective bargaining
agreements
Information not available: The
company did not manage to
gather this information for all
portfolio companies in 2022,
but will improve data gathering
processes and plans to obtain
the information in 2023.
GRI 3 - Material topcis
GRI 3: Material topics 2021
3-1
Process to determine
material topcis
Stakeholder dialogue and materiality analysis
Strategic focus areas
3-2
List of material topics
Stakeholder dialogue and materiality analysis
RESPONSIBLE INVESTMENTS
New investments
GRI 3: Material topics 2021
3-3
Management
of material topics
New investments
Stakeholder dialogue and materiality analysis
AFK KPI
AFK KPI
Turnover
EU Taxonomy Summary
AFK KPI
Capex
EU Taxonomy Summary
AFK KPI
Opex
EU Taxonomy Summary
Disclosure
Disclosure description
Omission
Reference
Green ﬁnancing
GRI 3: Material topics 2021
3-3
Management
of material topcis
Green ﬁnancing
Stakeholder dialogue and materiality analysis
AFK KPI
AFK KPI
Percentage of
loans with green proﬁle
Green ﬁnancing (Performance)
OPTIMIZING PORTFOLIO COMPANIES
Economic performance
GRI 3: Material topics 2021
3-3
Management
of material topcis
Economic performance
Stakeholder dialogue and materiality analysis
GRI 201: Economic performance 2016
201-1
Direct economic
value generated
and distributed
Financial statements
201-2
Financial implications
and other risks and
opportunities due
to climate change
TCFD: Climate-Risk Assessment Report 2022
Strenghtening sustainability performance
GRI 3: Material topics 2021
3-3
Management
of material topcis
Strengthening environmental performance
Reporting frameworks
Stakeholder dialogue and materiality analysis
GRI 305: Emissions 2016
305-1
Direct (Scope 1)
GHG emissions
Strengthening environmental performance
(Performance)
305-2
Direct (Scope 2)
GHG emissions
Strengthening environmental performance
(Performance)
Carbon Accounting Report 2022
305-3
Other indirect (Scope 3)
GHG emissions
Strengthening environmental performance
(Performance)
GRI 302: Energy 2016
302-1
Energy consumption
within the organization
Strengthening environmental performance
(Performance)
240
241
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
Disclosure
Disclosure description
Omission
Reference
ETHICAL BUSINESS CONDUCT
Anti-corruption
GRI 3: Material topics 2021
3-3
Management
of material topcis
Anti-corruption and bribery
Stakeholder dialogue and materiality analysis
GRI 205: Anti-Corruption (2016)
205-1
Operations assessed
for risks related to
corruption
Anti-corruption and bribery
(Performance)
205-2
Communication
and training about
anti-corruption policies
and procedures
The disclosure requirements
are met with one minor
exception: AFK did not manage
to gather this for business
partner in 2022, but will
improve data gathering
processes and plans to obtain
the information in 2023.
Anti-corruption and bribery
(Performance)
205-3
Conﬁrmed incidents
of corruption and
actions taken
Anti-corruption and bribery
(Performance)
Responsible supply chain
GRI 3: Material topics 2021
3-3
Management
of material topcis
Responsible supply chain
Stakeholder dialogue and materiality analysis
GRI 414
414-1
New suppliers that
were screened
using social criteria
The disclosure require-
ment is met for Arendals
Fossekompani Parent
company. Information on
other portfolio companies is
not available. We will improve
data gathering processes and
plan to report for the entire
group in 2023.
Human Rights and Transparancy Act Report
2022
414-2
Negative social impacts
in the supply chain
and actions taken
Human Rights and Transparency Act Report 2022
(Risk of negative consequences)
Information security
GRI 3: Material topics 2021
3-3
Management
of material topcis
Information security
Stakeholder dialogue and materiality analysis
AFK KPI
AFK KPI
Training of people
in ICT security
Information security
(Approach)
Disclosure
Disclosure description
Omission
Reference
A GREAT PLACE TO WORK
Diversity and equality
GRI 3: Material topics 2021
3-3
Management
of material topcis
Diversity and equality
GRI 405: Diversity and Equal Opportunity 2016
405-1
Diversity of governance
bodies and employees
Diversity and equality (Performance)
405-2
Ratio of basic salary
and remuneration
of women to men
Diversity and equality (Performance)
GRI 406: Non-discrimination 2016
406-1
Incidents of discrimi
-
nation and corrective
actions taken
Diversity and equality (Performance)
Employee satisfaction & talent attractiveness
GRI 3: Material topics 2021
3-3
Management
of material topcis
Employee satisfaction
& talent attractiveness
GRI 401: Employment 2016
401-1
New employee hires
and employee turnover
Employee satisfaction
& talent attractiveness
401-2
Beneﬁts provided to
full-time employees
that are not provided
to temporary or part-
time employees
Information not available: The
company did not manage to
gather this information for all
portfolio companies in 2022,
but will improve data gathering
processes and plans to obtain
the information in 2023.
AFK KPI
AFK KPI
Parental leave
Employee satisfaction & talent
attractiveness (Performance)
242
243
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
Disclosure
Disclosure description
Omission
Reference
Health and safety
GRI 3: Material topics 2021
3-3
Management
of material topcis
Health and safety (Materiality,
Approach, Looking forward)
Board of Directors' Report for 2022
(Personell, Equal opportunity)
Stakeholder dialogue and materiality analysis
GRI 403: Occupational health and safety 2018
403-1
Occupational
health and safety
management system
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
403-2
Hazard identiﬁcation,
risk assessment, and
incident investigation
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
403-3
Occupational
health services
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
403-4
Worker participation,
consultation, and
communication on
occupational health
and safety
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
403-5
Worker training
on occupational
health and safety
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
Disclosure
Disclosure description
Omission
Reference
403-6
Promotion
of worker health
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
403-7
Prevention and
mitigation of occupa-
tional health and
safety impacts
directly linked by
business relationships
Information not available:
Information only for AFK
Hydropower. The company
did not manage to gather this
information for all portfolio
companies in 2022, but will
improve data gathering pro-
cesses and plans to obtain
the information in 2023.
Health and safety (Performance)
COMMUNITY ENGAGEMENT
Sponsorship, partnerships and other investments
3-3
Management
of material topics
Community Engagement
Stakeholder dialogue and materiality analysis
GRI 413: Local communities 2016
413-1
Operations with
local community
engagement, impact
assessments and
development programs
Community Engagement (Performance)
AFK KPI
AFK KPI
No. of projects supported
Community Engagement (Performance)
244
245
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
PricewaterhouseCoopers AS, Kystveien 14, 4841 Arendal
T: 02316, org. no.: 987 009 713 MVA,
www.pwc.no
Statsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the Board of Directors of Arendals Fossekompani ASA
Independent statement regarding Arendals Fossekompani ASA’s
sustainability reporting
We have undertaken a limited assurance engagement of Arendals Fossekompani ASA’s GRI Index and
Scope 1 and Scope 2 (location and market based) emissions for the period 1 January 2022 - 31
December 2022 as presented in Arendals Fossekompani Integrated Report 2022 (sustainability
reporting). Our assurance engagement was conducted to obtain limited assurance.
Arendals Fossekompani’s GRI index for 2022 is an overview of which sustainability topics
Arendals Fossekompani considers material to its business and which sustainability disclosures
Arendals Fossekompani uses to measure and report its sustainability performance, together with a
reference to where material sustainability information is reported. Arendals Fossekompani’s GRI
Index for 2022 is available and included in Arendals Fossekompani’s Integrated Report 2022 for
the period ending 31 December 2022. We have examined whether Arendals Fossekompani has
developed a GRI Index for 2022 and whether mandatory disclosures are reported according to the
Standards published by the Global Reporting Initiative (
www.globalreporting.org/standards
)
(criteria)
Arendals Fossekompani has prepared its Scope 1 and Scope 2 (location and market based)
emissions in line with the Greenhouse Gas Protocol - A Corporate Accounting and Reporting
Standard (2004) (the Criteria). We have examined whether the scope 1 and scope 2 emissions have
been calculated, estimated and reported in accordance with the Criteria as presented in the
Integrated Report, chapter 04 Sustainability, subchapter Optimizing Portfolio Companies, section
“Strengthening Environmental Performance”.
Management's responsibility
Management is responsible for Arendals Fossekompani’s sustainability reporting and for ensuring that
it is prepared in accordance with criteria as described above. The responsibility includes designing,
implementing and maintaining an internal control that ensures the development and reporting of the
GRI Index and scope 1 and scope 2 emissions
.
GHG quantification is subject to inherent uncertainty because of incomplete scientific knowledge used
to determine emissions factors and the values needed to combine emissions of different gases.
Our independence and quality control
We are independent of the company in accordance with the law and regulations and the International
Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), and we have fulfilled our ethical
obligations in accordance with these requirements. We use ISQM 1 - Quality management for firms
that perform audits or reviews of financial statements, or other assurance or related services
engagements and maintain a comprehensive system of quality control including documented
guidelines and procedures regarding compliance with ethical requirements, professional standards
and applicable legal and regulatory claim.
Auditor's responsibilities
Our responsibility is to express a limited assurance conclusion on Arendals Fossekompani’s
sustainability reporting based on the procedures we have performed and the evidence we have
(2)
obtained. We conducted our work in accordance with the Standard on Assurance Engagements ISAE
3000: “Assurance engagements other than audits or review of historical financial information",and, in
respect of greenhouse gas emissions, “International Standard on Assurance Engagements 3410,
Assurance Engagements on Greenhouse Gas Statements”. A limited assurance engagement involves
assessing the suitability in the circumstances of management's use of the criteria as the basis for the
preparation of the sustainability reporting, assessing the risks of material misstatement of the
sustainability reporting whether due to fraud or error, responding to the assessed risks as necessary in
the circumstances, and evaluating the overall presentation of the sustainability reporting. A limited
assurance engagement is substantially less in scope than a reasonable assurance engagement in
relation to both the risk assessment procedures, including an understanding of internal control, and
the procedures performed in response to the assessed risks.
The procedures we performed were based on our professional judgement and, among others, included
an assessment of whether the criteria used are appropriate, as well as an assessment of the overall
presentation of the sustainability reporting. Our procedures also included meetings with
representatives from Arendals Fossekompani who are responsible for the material sustainability topics
covered by the sustainability reporting; review of internal control and routines for reporting GRI Index
and scope 1 and 2 emissions; obtaining and reviewing relevant information that supports the
preparation of scope 1 and scope 2 emissions; assessment of completeness and accuracy of GRI
sustainability disclosures and scope 1 and 2 emissions; and controlling the calculations of scope 1 and
scope 2 emissions based on an assessment of the risk of error.
The procedures performed in a limited assurance engagement vary in nature and timing from, and are
less in extent than for, a reasonable assurance engagement. Consequently, the level of assurance
obtained in a limited assurance engagement is substantially lower than the assurance that would have
been obtained had we performed a reasonable assurance engagement. Accordingly, we do not express
a reasonable assurance opinion about whether the sustainability reporting has been prepared, in all
material respects, in accordance with the criteria.
We believe that the evidence we have obtained is sufficient and appropriate to provide a basis for our
conclusion.
Conclusion
Based on the procedures we have performed and the evidence we have obtained, nothing has come to
our attention that causes us to believe that Arendals Fossekompani ASA’s GRI Index for 2022 is not, in
all material respects, developed in accordance with the requirements of the Standards published by
The Global Reporting Initiative.
Based on the procedures we have performed and the evidence we have obtained, nothing has come to
our attention that causes us to believe that Arendals Fossekompani ASA’s Scope 1 and Scope 2
(location and market based) emissions for the period 1 January 2022 - 31 December 2022 is not
prepared, in all material respects, in accordance with the Criteria.
Arendal, 11 April 2023
PricewaterhouseCoopers AS
Hanne Sælemyr Johansen
State Authorized Public Accountant
246
247
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
List of
Abbreviations
AC
Audit Committee
AFK
Arendals Fossekompani
AM
Additive Manufacturing
AMGTA
Additive Manufacturer Green Trade Association
ARP
Activity and Reporting Obligations
BCoC
Business Partner Code of Conduct
BOD
Board of Directors
CAD
Cash Available for Distribution
CSRD
Corporate Sustainability Reporting Directive
CDP
Carbon Disclosure Project
CapEx
Capital Expenditure
CEO
Chief Executive Ofﬁcer
CFO
Chief Financial Ofﬁcer
CoC
Code of conduct
CSO
Chief Sustainability Ofﬁcer
CSR
Corporate Social Responsibility
DCF
Discounted Cash Flow
DNSH
Do No Signiﬁcant Harm
EAT
Earning after tax
EBT
Earnings before tax
EBIT
Earnings before interest and taxes
EBITDA
Earnings Before Interest, Taxes Depreciation,
and Amortization
EU
European union
ERP
Enterprise Resource Planning
ESG
Environmental, Social and Governance
GHG
Greenhouse Gas
GRI
Global Reporting Initiative
GWh
Gigawatt hours
HR
Human Resources
HSE
Health, Safety, and Environment
HSSE
Health, Safety, Security and Environment
IFRS
International Financial Reporting Standards
ICT
Information and Communication Technologies
IEA
International Energy Agency
ILO
Declaration of the International Labour Organisation
inp
Interestbearing current borrowings
IoT
Internet of Things
IR
Injury Rate
ISO
International Organisation for Standardisation
KPI
Key Performance Indicator
kWh
Kilowatt hours
LCA
Life Cycle Assessment
LEO
Low Earth Orbit
LTIR
Lost Time Incident Rate
MACD
Moving Average Convergence Divergence
MAR
Market Abuse Regulation
M&A
Mergers and Acquisitions
MoD
Ministry of Defense
MoU
Memorandum of Understanding
MWh
Megawatt hours
NAA
Norwegian Accounting Act
NGO
Non Governmental Organisation
NHO
Confederation of Norwegian Enterprises
NVE
The Norwegian Water Resources
and Energy Directorate
OCI
Other Comprehensive Income
OECD
The Organisation for Co-operation and Development
OHS
Occupational Health and Safety
OpEx
Operating Expenditure
R&D
Research and Development
SaaS
Software-as-a-Service
SASB
Sustainability Accounting Standards Board
SBTi
Science Based Target initiative
SCoC
Supplier Code of Conduct
SDG
Sustainable Development Goal
SQM
Square meter
TCFD
Task Force on Climate-related Financial Disclosures
TRIR
Total Recordable Incident Rate
TSC
Technical Screening Criteria
UN
United Nations
WACC
Weighted Average Cost of Capital
248
249
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
APPENDIX
ANNUAL AND SUSTAINABILITY REPORT
This is Arendals Fossekompani’s ﬁrst fully integrated ﬁnancial and sustainability report.
The report was published on 12 April, and the information refers to the reporting period
1 January to 31 December 2022.
Arendals Fossekompani publishes ﬁnancial and sustainability reports on an annual
basis, and prior reports can be found on our website: www.arendalsfossekompani.no.
No restatement of information has been made from previous reporting periods.
The ﬁnancial statements for the Parent Company and the Group are prepared in
accordance with the principles in the International Financial Reporting Standard (IFRS)
as adopted by the European Union. This report is prepared in accordance with the
2021 Global Reporting Initiative (GRI) Standard. The information related to the GRI
disclosures are provided for all portfolio companies in the group, unless otherwise
stated. The information regarding sustainability in the annual report is consolidated in
the same way as for the ﬁnancial information, except for the climate accounting which is
established and consolidated using an operational control method in the GHG Protocol
Standard. For information about other reporting frameworks, please refer to the
4.0 Sustainability chapter of this report.
The report has been read and approved by senior executives and the Board of Directors
of Arendals Fossekompani. To ensure transparency and reliability of the reported
GRI Index and Scope 1 and Scope 2 GHG emissions, a limited assurance has been
carried out by our auditing ﬁrm PricewaterhouseCoopers (PwC). A statement on the
assurance is available as an appendix to this report.
For questions about this report and its contents, please contact our Interim Chief
Executive Ofﬁcer, Lars Peder Fensli at lars.peder.fensli@arendalsfoss.no.
For questions related to sustainability, please contact our Chief Sustainability Ofﬁcer,
Ingunn Ettestøl at ingunn.ettestol@arendalsfoss.no
Activity and Reporting Obligations Report 2022
Carbon Accounting Report 2022
EU Taxonomy Report 2022
Human Rights and Transparency Act Report 2022
Remuneration Report 2022
TCFD: Climate-Risk Assessment Report 2022
Additional
Reports
About
This Report
250
251
ARENDALS FOSSEKOMPANI INTEGRATED REPORT 2022
ANNUAL AND SUSTAINABILITY REPORT
APPENDIX
VISITING ADDRESS
Langbryggen 9
4841 Arendal
POSTAL ADDRESS
Box 280
4803 Arendal
+47 37 23 44 00
ﬁrmapost@arendalsfoss.no
arendalsfossekompani.no
© Arendals Fossekompani ASA. All Rights Reserved.