2021
Annual Report
Simplify work life. Achieve more.
2
Table of Contents
About Zalaris . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Letter from the CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Management Team. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Report from the Board of Directors. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
Statement by the Board of Directors and the CEO . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Financial Statement: Consolidated Group . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Financial statement: Parent Company . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Corporate Governance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61
Auditors Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Shareholder Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Alternative Performance Measures (APMs) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75
Simplify Work Life. Achieve More.
We simplify HR and payroll administration and empower you
with useful information so that you can invest more in people.
3
About Zalaris
Zalaris ranks among Europe’s top providers of
human capital management (HCM) and payroll solu-
tions – addressing the entire employee lifecycle,
from recruiting and onboarding to compensation,
time and attendance, travel expenses and perfor-
mance management.
Our proven local and multi-country delivery models
include: on-premise implementations, software as
a service (SaaS), cloud integration and business
process outsourcing (BPO). Furthermore, Zalaris’
experienced consultants and advisors cover all
industries and IT environments.
Headquartered in Oslo, Norway, and publicly traded
on the Oslo Stock Exchange (ZAL), we serve more
than one million employees each month, across mul-
tiple industries and with many of Europe’s most rep-
utable employers. We have generated uninterrupted
growth since our founding in 2000 and today oper-
ate in the Nordics, Baltics, Poland, Germany, Austria,
Switzerland, France, India, Ireland, and the UK.
Ireland UK Switzerland Germany Norway Sweden Denmark Finland Estonia Latvia Lithuania Poland IndiaSpain France Australia
years of experience and
continuous growth
2021
Revenue
partnered with Zalaris
giving local expertice
employees served monthly
across all HR solutions
> 1 500 000
20 Years
NOK 775 mill
with service centers
and local expertice
13 Countries
150+ Countries
Zalaris
employees
880
employees served monthly
through payroll services
> 300 000
4
Heading top
Recruiting Onboarding Performance
Goals
Compensation Learning Succession
Development
Trip
Request
Travel
Expense
Buisness
Expense
Credit Card
Intergration
Co2 Footprint
Tracking
Time
Attendance
Absence
Management
Scheduling
Planning
Sick Leave
Monitoring
Benefits
Management
Country Specific
Localisations
Employee
Self Services
Organizational
Structures
Employee
Co2 Footprint
Document
Archive
Cloud
Payroll
Global
Payroll
Payroll
HR-Automation
Payroll
HR-Transformation
Payroll & HR Solutions that Enable
Fully Digital Organizations
Zalaris - Local presence with one global IT
platforms
• Zalaris is a leading European provider of
Payroll and Human Capital Management
Solutions delivered through Software as a
service, Outsourcing, or Consulting delivery
models.
• Supporting fully digital processes for Payroll
and Human Capital Management targeting
20-30% cost savings.
• One common multi-country solution satifying
GDPR requirements combined with competent
resources serving complex customers from
with local competence and language.
HR System
Payroll
Workforce
Managment
Travel and
expenses
Application Maintenance Services (SAP Support)
Professional Service (Advisory, Analytics, Technology, Implementation)
Business Process as a Service (BPaas) and Outsourcing
Software as a Service (Saas)
Talent
Managment
5
Dear fellow shareholders,
#teamZalaris closed 2021 with record high
sales. We secured agreements with predom-
inantly new customers over the year totalling
more than NOK 115 million of Annual Recurring
Revenue (ARR). This will be added to our top-
line as the new customers go live during 2022
and early 2023, securing an overall revenue
growth of 11.5% compared FY 2021.
Revenue for 2021 amounted to NOK 775.3
million – slightly down from last year in absolute
terms. However, the revenue increase was
+1.1%, when measured in constant currency.
In addition, revenue deferred during the year
increased to NOK 41 million – up from NOK 15
million last year – an increase of +176%. This
reflected the large volume of ongoing trans-
formation projects from implementing new
customer accounts that have been invoiced, but
will be recognised as revenue in our financial
statements in future periods.
Throughout the year #teamZalaris made a
tremendous eort to continue delivering on
customer commitments in a flexible mode
working both from our oces and homes. As
Sustainability/ESG is a key focus area for us at
Zalaris, and our stakeholders, we are delighted
to see that our employee engagement continues
to be at an all-time high. What a Team!
All-time high contract signings with landmark
customers in all markets
Coming out of our first year with Covid in 2020,
we experienced an increase in demand in the
market for both our Managed and Professional
Services as customers increasingly look to
digitize and improve the resilience of their
people processes. This, in combination with
increased brand awareness, and a strength-
ened sales organization resulted in a significant
increase in new opportunities across all our
regions. In particular, we saw a trend shift in
Germany and the UK, and for multi-country
deals.
In Germany, our largest country accounting
for more than 35% of our revenue, we saw
positive development in our Managed Services
business. Early in the year, we were awarded
a groundbreaking agreement with the German
mobile phone operator Telefónica Deutschland
/ O2, to provide fully outsourced payroll for
their 8,200 employees in Germany. This was
our first PeopleHub based sale in Germany. In
Q4, we contracted a new global payroll and HR
solution with Siemens spin-o, Yunex Trac,
to serve 3,100 people in 21 countries. Our
Professional Services business continued its
positive development including securing a new
agreement with ThyssenKrupp Elevator for
the implementation of a new payroll solution
in Germany and a frame agreement to deliver
between 3-4,000 man-days of consulting
support over the next three years to one of our
large German customers in the public sector.
Letter from the CEO
Hans-Petter Mellerud, Chief Executive Ocer, Zalaris
6
Médecins Sans Frontières chose us to deliver
a new SuccessFactors based HR solution. We
also completed projects for Stadtwerke Krefeld
and Bitzer.
In the UK, one of our fastest growing markets,
we signed agreements with Claas for out-
sourced payroll, an agreement with Veolia to
host their SAP based solution on the Zalaris
platform, and a five-year agreement to deliver
a comprehensive SaaS payroll and workforce
management solution to Sony Interactive
Entertainment Europe Ltd. Later in the year
we signed Marston’s, with around 14,000
employees in more than 1,000 pubs, to deliver
a complete solution for time & attendance and
payroll. We have supported Marston’s for years
with Professional Services. It is a real proof of
customer satisfaction, when our relationship is
expanded to include a long-term agreement to
deliver a mission critical payroll solution.
We continued with strong development in
Professional Services and Application Mainte-
nance Services during the year in Poland - our
fastest growing market. This included new
projects with Amica, to implement a full suite
of SuccessFactors services, and an expansion
of existing relationships with ABB and Hitachi
Energy for recurring application maintenance
services.
The Nordics, our base, started the year with
an agreement to deliver global payroll for
Finnish forest company, Metsä, serving 10,000
employees in 28 countries. Following that, we
continued to build on our leading position in
the financial services sector by adding insurer
Gjensidige, with 3,700 people, and Tryg, with
6,000+ people, to our customer list. We also
successfully implemented PeopleHub payroll
for Danske Bank’s 2,000 people in Sweden
and a Nordic solution for Entercard.
Acquired ba.se GmbH to strengthen payroll
and HR BPO for the retail industry
In May, we communicated the acquisition of
ba.se service & consulting GmbH - a leading
provider of payroll and related HR services
to the retail industry in Germany. The deal
significantly enhances Zalaris’ presence and
capability to serve this people intensive sector
with eective solutions based on our People-
Hub platform.
As ba.se also has customers with French and
Swiss presence, the acquisition supports us in
serving our customers in these new business
territories. With our German operations scaled
to almost 280 people, and delivering an annu-
alized revenue of more than EUR 30 million,
we are now one of the leading players in the
DACH market for payroll and HR outsourcing.
To continue building our market presence and
realize operational synergies, we recruited
one of the leading industry professionals to
take over the helm as Executive Vice President
DACH from December.
Building Sustainability into
all Products and Services
Zalaris has from its inception aimed at creating
a business based on Nordic values. We have
always believed in long term thinking, and
treating people as Human Capital. We have
communicated our commitments in various
policies, as Code of Conduct, Corporate Social
Responsibility, Whistleblowing etc.
In 2021, we launched a strategic initiative to
build ESG into all our products and services. As
we are a predominantly oce based business,
our environmental footprint is mainly limited to
travel, energy consumption related to powering
of our IT solutions, and securing a good work-
ing environment for our people. To support
creating awareness in how we can influence
our personal and organizational footprint, we
started developing an app as part of People-
Hub, to help track and visualize our CO2
footprint from commuting and business travel.
This was launched in early 2022.
We have a key position in providing solutions
to help our customers manage their workforce
with cloud based HR and payroll solutions, and
are in a good position to support reporting,
visualize and target performance related to
diversity, equity and inclusion. We have created
our first analytics and reporting solution for
internal use that we will start marketing to
customers in 2022.
We are now consolidating our eorts in a group
function reporting to the CEO, responsible for
Sustainability/ESG in Zalaris. Starting with the
sustainability report published together with this
report, we are committed to target setting and
to reporting our results on an ongoing basis.
Strengthening European leadership - further
geographic expansion
Based on industry and market research reports,
we expect the positive development in the
demand for our services to continue. The key
drivers are digitising of people processes and
the need for eciency improvements. In 2021,
Zalaris was included in the Gartner Market
Guide to Multi-Country Payroll. This reflects our
credibility in the market, and supports creating
increased interest in our solutions.
Zalaris is at the time of writing not directly
impacted by the war in Ukraine as we have no
operations nor work with any suppliers being
located in Russia, Ukraine or Belarus. How-
ever, we are all concerned. In particular, our
Polish and Baltic colleagues. With a distributed
network of service centers operating on one
common solution we can move work quickly
between various locations if we should need
to and still deliver on customer commitments.
We are continuously monitoring the situation
and are maintaining our business continuity
plans. We are actively supporting where we can
promote democratic and human values.
7
Leaving the year with a secured 11.5% growth
makes our communicated 10% EBIT target well
within reach.
A key driver to reach our profitability target
is to better scale fixed costs and investments
through growing revenue from existing oper-
ations and services. This means that we will
prioritize sales eorts to expand relationships
with existing customers and to acquire new
customers that we can serve with current
infrastructure and solutions. In addition, we will
continue selective geographic expansion to
strengthen our multi-country capabilities sup-
porting the people footprint of large customers
or to get access to critical skills.
Further, to improving EBIT through scaling
existing operations, we are stepping up our
automation and smart shoring eorts with the
aim to achieve further margin improvements
through the implementation of our Zalaris 4.0
delivery models and packaged solutions.
We will continue pursuing non-organic growth
options that can strengthen our position in
existing markets and leverage the scale of our
existing organization.
This includes opportunities that can support
expanding our geographic coverage, or com-
panies with new HR Tech solutions that can
be utilized by our existing customer portfolio.
We successfully raised NOK 120 million in new
equity in 2021 that is intended to be used in a
disciplined manner for this purpose.
We in #teamZalaris target maintaining record
speed in the year to come!
Hans-Petter Mellerud
Chief Executive Ocer, Zalaris
8
9
Management Team
Corporate Management Team Regional Management Team
Hans-Petter Mellerud
Chief Executive Ocer
Gunnar Manum
Chief Financial Ocer
Halvor Leirvåg
Chief Technology Ocer
Øyvind Reiten
Executive Vice President
Group Commercial and
Sales
Will Jackson
Managing Director &
Executive Vice President
UK & Ireland
Hilde Karlsmyr
Chief Human
Resources Ocer
Peter Martin
Executive Vice President
DACH
Richard E. Schiørn
Executive Vice President
Solution & Delivery –
Global Managed Services
Sami Seikkula
Executive Vice President
Northern Europe
Katarzyna Kwiatkowska
Executive Vice President
Central Europe
Balakrishnan Narayanan
Director & Executive Vice
President APAC
10
”Médecins Sans Frontières is an
extraordinary group of people who work
tirelessly to deliver humanitarian aid.
With our consulting approach and the
flexibility of SAP SuccessFactors we
will simplify their HR processes so that
there is more time for the core task of
the organization: to provide medical
assistance to people in need. We are
honored to be part of it and look
forward to working with them.”
- Hans-Petter Mellerud
CEO and Founder of Zalaris
11
Zalaris’
mission is to simplify HR and payroll
administration, and empower you with useful in-
formation so that you can invest more in people.
proven local and multi-country delivery models
include: on-premise implementations, software as
a service (SaaS), cloud integration and business
process outsourcing as a service (BPaas).
Zalaris delivers a full range of services organized
as two business segments: Managed Services
and Professional Services. Managed Services
consists of cloud services and HR outsourcing
together with all of Zalaris’ other outsourcing
services. Professional Services consists of Zalaris’
consulting business, assisting clients with trans-
formation projects within HR and finance.
Zalaris is headquartered in Oslo and delivers
services out of local-language centres covering
northern and central Europe, the UK and Ireland
and India. Zalaris ASA is listed on the Oslo Stock
Exchange (ZAL).
Operational Highlights
Zalaris recorded revenue of NOK 775 million in
2021, compared to NOK 792 million last year.
Adjusted for the weaker NOK exchange rate
compared to last year, the revenue increased
by approximately +1%. There have been some
negative impacts from the full-year eect of
Covid-19, which resulted in lower transaction
volumes (e.g. travel controls) and less change
orders and project revenue from existing
customers within Managed Services, as well
as less new business generation within Pro-
fessional Services. However, this was oset by
the consolidation of ba.se service and consult-
ing GmbH (“ba.se”) from August 2021.
Within Managed Services, Zalaris signed an all-
time high level of new long-term contracts and
expansions for Business Process as a Service
(BPaaS) and Software as a Service (SaaS)
during 2021. These contracts have an expected
annual contract value of approximately NOK
115 million. Adjusting for contracts that have not
been renewed during 2021, the net amount is
NOK 83 million of additional annual revenue,
which represents 11% of the total revenue for
2021. Most of these new contracts will start
during 2022 and the first quarter of 2023.
Included in the above contracts was a
landmark agreement with Finnish industrial
company Metsä, for the delivery of a multi-
country payroll solution, covering more than
10,000 employees in 28 countries based on
Zalaris’ PeopleHub concept. Zalaris’ position as
a provider of global multi-country HR and payroll
services was further strengthened by the agree-
ment with the German based company, Yunex
Trac, which is a spin-o from Siemens, for the
delivery of a global HR and payroll solution for
their 3,100 employees in 21 countries.
Zalaris confirmed its position as the leading
provider of HR and payroll services to the
Nordic banking and finance sector during 2021,
by entering into a long-term agreement with
Gjensidige, a Nordic insurance group, covering
more than 3,700 employee in three countries,
and expanding the agreement with the financial
services company Tryg, to cover the whole
Nordic region. Other new contracts in the
banking and finance sector included Lindor,
a debt collection company, and Entercard, a
Swedbank and Barclays Principal Investments
Limited Joint Venture, in Scandinavia.
Zalaris also strengthened its position outside
the Nordic region. In addition to the agreement
with Yunex Trac, Zalaris Germany was awarded
a five-year contract to provide outsourced pay-
roll services to Telefónica’s 8,200 employees
in Germany. A similar agreement was entered
into with Hörman Automotive. In the UK, Zalaris
Report from the Board of Directors
Adele Norman Pran
Chair of the Board
Liselotte Hägertz
Engstam
Board Member
Jan M. Koivurinta
Board Member
Corinna Schäfer
Board Member
Kenth Eriksson
Board Member
Erik Langaker
Board Member
1. Zalaris (the “Company” or the “Group”) refers to Zalaris ASA and its subsidiaries if not otherwise stated
12
won an agreement with the hospitality chain,
Marston’s, for a SaaS payroll solution serving
more than 14,000 employees, and a similar
agreement with CLAAS, one of the world’s lead-
ing manufacturers of agricultural engineering
equipment.
Zalaris continues to see a significant interest in
outsourced multi-country payroll solutions, as
customers are exploring alternatives to reduce
costs and optimise their global HR processes.
The Group’s pipeline of opportunities fits well
with our oerings, and where we believe we
have a competitive advantage.
Within Professional Services the work is more
project based compared to Managed Services,
and we have seen a good inflow of consultancy
projects for Cloud payroll, HR transformation
projects and change orders, though the market
is still negatively aected by Covid-19. Zalaris
has also signed several expansions with
customers for our Application Maintenance
Services (AMS) – helping customers maintaining
their in-house payroll and HR solutions mostly
based on long term agreements of a recurring
nature. During 2021, an increased share of
available consulting resources has been utilised
on the implementation of new customers con-
tracts for Managed Services, compared to last
year, which has resulted in additional deferred
revenue on the balance sheet, which will be
recognised as revenue in later periods.
The adjusted EBIT* for 2021 was NOK 49.6
million, compared to NOK 55.2 million last year,
and the adjusted EBIT margin was 6.4% in 2021,
compared to 7.0% last year. The reduction is
mainly due to the negative margin impact of
lower revenue in NOK. The Company is tar-
geting increased operating profit (EBIT), when
the new Managed Services contracts signed
in 2021, with an estimated annual recurring
revenue of NOK 115 million, have been fully
implemented.
*See definition and reconciliation of APM’s in a
separate section of the annual report.
Consolidated Financial Results
for the Group
Zalaris’ consolidated revenue for 2021 was
NOK 775.3 million (2020: NOK 792.3 million), a
decrease of 2.1% compared to last year. When
adjusted for dierences in currency exchange
rates between 2020 and 2021, the revenue
increase was 1.0% (refer to the APMs section
of the annual report for further details). The
operating profit was NOK 22.6 million (37.4 mil-
lion), which gives an operating margin of 2.9%
(4.7%). Zalaris’ ordinary profit before tax was
NOK 15.0 million (negative NOK 13.4 million). Net
result for the year was NOK 12.8 million (nega-
tive NOK 9.0 million).
The cash flow in 2021 showed net cash from
operating activities of NOK 33.0 million (NOK
92.3 million). Net cash flow from investing
activities was negative NOK 63.9 million
(negative NOK 14.3 million). This included an
initial cash payment of NOK 42.5 million (net
of cash acquired), for the acquisition of ba.se.
The remaining cash outflow relates mainly to
internal product development projects.
Net cash flow from financing activities was
positive NOK 84.4 million (negative NOK 39.0
million), which included net proceeds from a
private placement of shares of NOK 115.5 million
and sale of own shares of NOK 7.2 million, partly
oset by a dividend payment for the financial
year 2020 of NOK 19.6 million and payments of
IFRS 16 lease liabilities. The Board’s view is that
Zalaris has sucient cash to internally finance
the Group’s liabilities, investment needs and
operations for the next 12 months.
Zalaris’ consolidated equity amounted to
NOK 209.0 million (NOK 104.4 million) as of 31
December 2021. This corresponds to an equity
ratio of 25.3% (14.4%). The Board and executive
management expect the equity ratio to increase
going forward in line with expected further
improvements in Zalaris’ financial results.
Total assets as of 31 December 2021 were NOK
826.6 million (NOK 725.7 million). Total liabilities
were NOK 617.6 million (NOK 621.4 million) at
the end of 2021.
Business Segments
Zalaris has two business segments: Managed
Services and Professional Services.
Managed Services generated revenue of NOK
529.7 million in 2021 (NOK 544.3 million), a
reduction of 2.7% compared to 2020. As noted
in the operational highlights, revenue for 2021
was higher than last year when adjusted for
currency movements (weaker NOK exchange
rate against functional currency of subsidiaries).
When adjusted for currency movements, the
revenue within Managed Services increased by
0.6% (refer to the APMs section of the annual
report for further details). Operating profit for the
segment in 2021 was NOK 62.0 million (NOK
63.4 million).
Revenue for 2021 for Professional Services
amounted to NOK 245.6 million (NOK 248.0
million), a decrease of 1.0% compared to the
previous year. When adjusted for currency
movements, revenue within Professional
Service increased by 1.7%. Operating profit for
the segment in 2021 was NOK 17.9 million (NOK
25.4 million). The reduction is primarily due to
higher use of external consultants, resulting in
lower margin on some customer projects.
Zalaris research and development (R&D) is
focusing on developing its own IP and integrat-
ing standard software to new and innovative
solutions and process designs that support
13
customers simplifying payroll and HR processes
and achieving more.
The Company does not have dedicated R&D
resources, but development projects are
carried out by Zalaris’ consultants, with the
support of suppliers and partners.
Parent Company’s Results
The financial statements of the parent company,
Zalaris ASA, are prepared and presented in
accordance with the Norwegian Accounting Act
and Generally Accepted Accounting Principles
in Norway (“NGAAP”).
For Zalaris ASA, the total revenue for 2021 was
NOK 144.1 million (NOK 133.0 million), which is
an increase of 8.3% compared to 2020. Result
from operations was a loss of NOK 42.0 million
(loss of NOK 49.1 million). Zalaris ASA reported a
loss for the year of NOK 4.8 million (loss of NOK
67.6 million).
Total shareholders’ equity in Zalaris ASA as of
31 December 2021 was NOK 96.0 million (NOK
-1.5 million), corresponding to 15.9% (-0.3%) of
total assets.
Continuing Operation
With reference to the Norwegian Accounting
Act § 3-3, the Board confirms its belief that
conditions exist for continuing operations and
that these financial statements have been
prepared in accordance with the going con-
cern principle. The confirmation is based on an
estimated long-term profitable growth and the
Company’s solid cash and equity standing.
Operational and Financial Risks
The Group is exposed to various risks and
uncertainties of operational, market and
financial character. Internal controls and risk
management are an integrated part of all
Zalaris organizational business processes
and of achieving the Company’s strategic and
financial objectives.
Operational Risk
The Group has a broad customer base, but
a large share of the revenues come from a
relatively low number of major customers. After
contracts are entered into, the deterioration of
relations with, or the termination of any major
contracts by, Zalaris’ major customers could
have a material adverse eect on the Group’s
business, results of operations and financial
condition. In addition, should any of the Group’s
major customers divest large portions of their
operations, experience consolidation or a
change of control, the functions outsourced by
such customer may face significant alteration,
which could lead to reductions or changes of
the scope of, or termination of, major contracts
with the Group.
The Group might fail to accurately forecast its
ability to deliver outsourcing services eciently
and contracts may not be implemented within
appropriate timescales, or could be implemented
poorly and fail to deliver savings to the custo-
mers. If the Group underestimates the cost,
complexity or time requirements to deliver a
contract it may incur losses. Such delays or
failures may have an adverse eect on the
Group’s business, results of operations and
financial conditions, and on its reputation as an
outsourcing provider.
The Group is increasingly exposed to cyber
security-related risks through the nature of
the services provided, which heavily involve
storage of both identifiable and sensitive
personnel data, as well as the handling of large
amounts of payments to customers’ employees.
This exposes the Group’s IT systems and
personnel as potential targets for threats
ranging from insiders misusing legal accesses
to external threats like hackers and others
trying to exploit the data the Group is processing,
for financial gain or collecting of information for
other illegal purposes.
As a result of these cyber security threat
scenarios and their potential for severe disrup-
tions to the services, the Group has established
numerous countermeasures both of a technical
and organizational nature. The Group has a
dedicated Cyber Security Operations Centre
(CSOC) with continuous monitoring of all
systems and user activities, with the explicit
goal of preventing threats from converging into
actual attacks or exploits of our systems and
the customer data contained within them. If the
Group fails to prevent any such disruptions,
it could have a material adverse eect on the
Group’s reputation, business, results of opera-
tions and financial condition.
14
Financial Risk
Zalaris’ client portfolio consists mainly of large,
financially stable companies with high credit
ratings; thus, the Company considers the credit
risk to be low. The Group invoices customers
monthly and continuously monitors incoming
payments.
Liquidity risk is the risk that the Group will be
unable to meet its financial liabilities as they
mature. The Company continuously estimates
the need for cash to pay its liabilities as they
mature, and ensures that cash is available at
all times, both for operational and capitalized
expenditures. Cash and cash equivalents
amounted to NOK 176.2 million as of 31 De-
cember 2021 (NOK 124.8 million), an increase
of NOK 51.4 million from the end of 2020.
During 2021 the Company carried out a private
placement of shares, which generated net
proceeds of NOK 115.5 million.
At the end of 2021, the Group had interest-
bearing debt of NOK 359.2 million (NOK 377.1
million). NOK 346.8 million (NOK 362.0 million)
of the interest-bearing debt at 31 December
2021 relates to a EUR 35 million bond loan.
The Company is thus exposed to changes in
the EUR/NOK exchange rate. This exposure is
partly oset by the net assets held in EUR in
foreign subsidiaries, and the net income gener-
ated by these subsidiaries. The Group also has
foreign currency-denominated cash deposits.
The Group provides services in countries with
a dierent currency than NOK and is conse-
quently exposed to any fluctuations in the
currency rate between these currencies and
NOK. The Group also has variable interest rate
borrowings and is thus exposed to interest
rate fluctuations. The Group settles internal
transactions on an ongoing basis to reduce the
risk associated with movement in currencies
and interest rates.
Despite the Group’s focus on reducing risks
through internal controls and risk management,
there will still be risk factors that cannot be ad-
equately handled through preventative meas-
ures. Further details on financial risk, including
the sensitivity analysis required by IFRS, can be
found in note 19 in the financial statements.
Corporate Social Responsibility,
the Environment and Employees
Zalaris aspires to achieve sustainable develop-
ment by striking a good balance between
financial results, value creation, sustainability
and corporate social responsibility (CSR). The
Company’s objective is to minimize Zalaris’ im-
pact on the environment and to maximize the
positive impact the Company has on working
conditions, society and customer satisfaction. At
the same time, the Company aims to support
its customers visualizing, driving and docu-
menting the same.
The Company has issued a separate ESG
report for 2021, which is available on www.
zalaris.com.
The statement of corporate social responsibility
required under Section 3-3c of the Norwegian
Accounting Act follows below.
Equal Rights
Zalaris promotes the benefits of equality and
aims at being gender and “background” neutral.
The Company shall be a professional workplace
with an inclusive working environment and re-
spect for the International Labor Organization’s
fundamental conventions.
Zalaris aims to have a balanced representation
of gender, age, ethnicity and religion. Zalaris
had 876 employees across 10 countries at the
end of 2021 (2020: 770), and women are well
represented in all the Group’s companies and
units, comprising 60% (56%) of the workforce.
The Group’s executive management team was
at the end of the year represented with 10%
female. The Company aims to increase female
representation by actively seeking and develop-
ing female talent. The board of directors consist
of three males (50%) and three females (50%).
A statement of equality covering the Norwegian
part of the Group has been issued as a separate
report and made available on www.zalaris.com.
Life-Work Balance and
Healthy Lifestyle
Zalaris strives to make it possible for employees
of either gender to combine their work and
private life, and therefore oers leave arrange-
ments, home oce solutions and part-time
positions and other flexible work arrangements
to support this objective. The Company
organizes programs to motivate its employees
to stay physically active while ensuring the
availability of healthy food in our canteens.
Zalaris’ solution helps customers and their
employees easily track work hours, overtime
and leave through eective mobile based
solutions. Our workforce planning solutions
are being used to secure optimal stang over
the year – building the foundation for a sound
life-work balance. Our analytics solutions for
reporting and analysing absence and sick
leave allow for early detection of potential
issues and documentation of management’s
responsibility in getting colleagues with health
issues back to work.
Our mobile and portal-based solutions deliver-
ing wholly digital payroll and HR processes fully
support flexible work arrangement and working
from home. This has become particularly evident
during 2020 and 2021, with the Covid-19 pan-
demic, where a majority of the workforce have
been working from home for a large part of the
year. Our eorts in managing the Covid-19
15
pandemic are being recognised by our employ-
ees, resulting in high employee engagement
scores across all countries.
Health, Safety and Environment
(HSE) Policy
The long-term business success of Zalaris
depends on our ability to live up to our val-
ues of “Service Excellence, Quality-Focused
Processes and Employees – our key assets.”
The Company wants to continuously improve
the quality of its services while contributing to
a positive working environment for its people.
Zalaris requires the active commitment to, and
accountability for, health and safety from all
employees and contractors. Line management
has a leadership role in the communication and
implementation of, and ensuring compliance
with, these policies and standards.
We are committed to:
• Protect and strive for the improvement of
health, safety and security of our people at all
times with the goal to eliminate “health and
safety” (HS)-related accidents
• Set HS performance objectives, measure
results, assess and continually improve pro-
cesses, services and product quality through
the use of an eective management system
• Work with management, employees and
employee representatives to create a positive
physical and psychological work environment
that maximizes the motivation and teamwork
for all impacted people
• Plan for, respond to, and recover from any
emergency, crisis and/or business disruption
• Develop services that can help our customers
monitor and act upon HS issues
• Communicate openly with stakeholders and
ensure an understanding of our HS policies,
standards, programs and performance.
Absence due to sick leave averaged 2.7%
(2.7%) in 2021. No incidents of injury or acc-
idents in the workplace were reported during
2021.
Environment
Pollution of the external environment because
of Zalaris’ operations is limited. Zalaris’ environ-
mental impact is primarily linked to energy con-
sumption, travel and waste from oce activi-
ties. One of Zalaris’ environmental measures is
to provide all customer-facing IT operations in
a centralized infrastructure concept hosted in
several energy-ecient data centres powered
by green renewable hydro-powered energy.
Zalaris has limited paper consumption through
the introduction of web- and mobile-based
solutions for customers for viewing of pay slips
and reports, thus reducing paper printing. At
the same time, Zalaris has implemented printer
systems where documents are not printed
unless the user logs in to pick up the printed
document.
The Group’s environmental initiatives focus
on using organized recycling schemes for
obsolete IT equipment, reducing travel activities
through the increased use of teleconferencing
and web meetings such as Teams, and respon-
sible waste management.
All employees have a mandatory obligation
to consciously observe the environmental
impact of work-related activities, and to select
solutions, products and methods that minimize
any environmental impact. This is described in
the Company’s Code of Conduct.
Through Zalaris’ Travel expense solutions,
the Company collects detailed information on
travel and consumption patterns that allow
customers to monitor and follow up on the
frequency of travel. This is a key influenceable
environmental driver.
Business Ethics
Zalaris’ Code of Conduct is an integral part
of the Zalaris’ formal governance. The Code
defines the core principles and ethical stand-
ards that form the basis of how the Company
creates value. The Code applies to Zalaris ASA
and any subsidiary in which Zalaris, directly or
indirectly, owns more than 50% of the voting
shares.
It also applies to members of the Board of
Directors, managers and other employees, as
well as those acting on behalf of the Company.
Zalaris requires that the Company’s business
partners have appropriate ethical standards,
that are at a minimum of those defined in
the Company’s Code of Conduct and other
relevant policies. Zalaris does not want to be
associated with business partners that do not
have appropriate ethical standards. This is the
way we shall conduct business in Zalaris – and
the way we shall create value for our custom-
ers, investors, sta and anyone benefiting from
the services we provide.
16
Heading top
Corporate Governance
Zalaris’ corporate governance policy is based
on, and complies with, the Norwegian Corporate
Governance Code.
Zalaris ASA is incorporated and registered in
Norway and is subject to Norwegian law. Accord-
ing to the Accounting Act § 3-3b, the Company is
obliged to report on the principles and practices
of corporate governance. In addition, the Oslo
Stock Exchange requires an annual statement
on compliance with the Company’s corporate
governance policy in accordance with NUES
the Norwegian Code of Practice for Corporate
Governance (Norwegian: “Norsk anbefaling for
eierstyring og selskapsledelse”), issued by the
Norwegian Corporate Governance Board, most
recently revised on 14 October 2021.
The statement for the fiscal year 2021 is based
on the disposal in the Accounting Act § 3-3b, as
well as the disposal for Corporate Governance
Policy for Zalaris ASA, as adopted by the Board
of Directors on 7 April 2018, and has been includ-
ed in a separate section of this annual report.
Zalaris ASA has purchased and maintain a
Directors and Ocers Liability Insurance on
behalf of the members of the Board of Directors
and CEO. The insurance additionally covers any
employee acting in a managerial capacity and
includes subsidiaries owned with more than 50%.
The insurance policy is issued by a reputable,
specialized insurer with appropriate rating.
Directors’ & Ocers’ Liability Insurance provides
financial protection to Zalaris’ directors, ocers
and any employees that can incur personal liabili-
ty for claims made against them in respect of acts
committed, or alleged to have been committed,
in their capacity as such and as a result of an
error, omission or breach of duty.
Events After the Reporting Period
On 2 February the Company announced the
acquisition of vyble, a payroll and HR solution
start-up located in Rostock and Hamburg,
Germany. Zalaris has acquired the assets of
vyble AG for EUR 1.1 million through a newly
formed subsidiary vyble GmbH, which is owned
90% by Zalaris. vyble has a complete suite of
Payroll and HR solutions delivered as Software
as a Service (SaaS) targeting the SME market in
Germany and has annual recurring revenue of
approximately EUR 1 million. Vyble has approxi-
mately 25 employees.
No other events have occurred after the
balance sheet date which have had a material
eect on the issued accounts.
Outlook
Zalaris is well positioned for future revenue
growth, having signed an all-time high level of
new long-term BPO contracts within Managed
Services during 2021. The contracts will gen-
erate approximately NOK 115 million in annual
recurring revenue. When fully implemented
these contracts, combined with the full eect
of revenue from ba.se, will imply a revenue
increase of around 16% compared to 2021.
The increased scale of our operations from this
revenue growth will be a key driver for higher
profitability. Further automation of our delivery
processes, and a more optimised use of re-
sources from dierent Zalaris locations, are key
targets for 2022.
Based on industry and market research re-
ports, Zalaris’ key markets within multi-country
payroll and HR outsourcing are expected to
grow in the foreseeable future. The Company
is well positioned to capture part of this growth
through new customers, as demonstrated by
the multi-country contracts with Metsä and
Yunex Trac, and by expanding the service
oering to existing customers, as we have
done with e.g. Siemens and Tryg. Zalaris is
also expanding its geographical coverage
to strengthen its competitive position in this
market.
We are actively pursuing non-organic growth
options that can strengthen our position in
existing markets, and leverage the scale of
our existing organisation, exemplified by the
acquisition of ba.se during 2021. The key focus
is on opportunities that can support expanding
our geographic coverage, or companies that
add new HR Tech solutions that can be utilized
by our existing customers, or that can expand
our customer base. An example of this is the
acquisition of vyble announced subsequent to
year, which has a payroll and HCM software
solution targeting the SME market.
Zalaris is not directly aected by the war in
Ukraine, and has no operations or customers in
Ukraine or Russia, however Zalaris is following
the developments closely. Covid-19 may still
have some impact short-term, however, the
underlying fundamentals remain strong, and
Zalaris enters 2022 with a solid pipeline of
potential new sales in all regions.
17
We hereby confirm that the consolidated
financial statements and the financial state-
ments for the parent company for the period
1 January 2021 to 31 December 2021, to the
best of our knowledge, have been prepared
in accordance with applicable accounting
standards and that the information in the
financial statements provides a true and fair
view of the Group’s and the parent company’s
assets, liabilities, financial position, and results
as a whole.
We also hereby declare that the annual report
provides a true and fair view of the financial
performance and position of the Group and
the parent company, as well as a description
of the principal risks and uncertainties facing
the Group and the parent company.
Statement by the Board of Directors and the CEO
Kenth Eriksson
Board Member
18
“At Yunex Trac, we are uniting what’s next in
trac. For our customers, we are looking for
opportunities to digitalise our industry.
Preparing for being a fully stand-alone company,
we decided for a collaboration with Zalaris as
we wanted to have an integrated solution for
both our payroll services and a
comprehensive HR IT solution, covering the
majority of HR processes. Using Zalaris
PeopleHub and SuccessFactors Employee
Central provide us the opportunity to stream-
line and digitalize processes while enhancing
employee experience.”
- Armin Seiler
VP Human Resources, Yunex Trac
19
Consolidated statement of profit or loss for the period ended 31 December
(NOK 1000) Notes 2021 2020
Revenue 2, 3 775 265 792 326
Operating expenses
License costs 67 481 72 517
Personell expenses 4 405 949 430 733
Other operating expenses 5 199 886 167 138
Depreciation and impairments 10 4 078 3 311
Depreciation right-of-use assets 11 16 114 19 101
Amortisation intangible assets 9 29 296 27 436
Amortisation implementation costs customer projects 3 29 874 34 666
Total operating expenses 752 679 754 903
Operating profit 22 585 37 423
Financial items
Financial income 6 5 491 5 763
Financial expense 6, 16, 19 (29 031 ) (29 507 )
Unrealized foreign exchange profit/(loss) 6 15 968 (27 069 )
Net financial items (7 571 ) (50 813 )
Profit before tax 15 014 (13 390 )
Tax expense 7 (2 203 ) 4 405
Profit for the period 12 812 (8 985 )
Earnings per share:
Basic earnings per share (NOK) 8 0.60 (0.46 )
Diluted earnings per share (NOK) 8 0.56 (0.46 )
Consolidated statement of comprehensive income as at 31 December
(NOK 1000) Note 2021 2020
Profit for the period 12 812 (8 985 )
Other comprehensive income
Items that will be reclassified to profit and loss in subsequent periods
Currency translation dierences (11 664 ) 16 544
Total other comprehensive income (11 664 ) 16 544
Total comprehensive income 1 148 7 559
Financial Statement – Consolidated Group
Consolidated Group Annual Accounts
Report 2021 for Zalaris ASA
The consolidated group annual accounts report for Zalaris ASA
contains the following documents:
• Consolidated Statement of Profit and Loss
• Consolidated Statement of Comprehensive Income
• Consolidated Statement of Financial Position
• Consolidated Statement of Cash Flows
• Consolidated Statement of Changes in Equity
• Consolidated Notes to the Financial Statement
The consolidated financial statements, which have been drawn
up by the Board and management, should be read in relation to
the Annual Report and the independent auditor’s opinion
20
Consolidated statement of financial position as at 31 December
(NOK 1000) Note 2021 2020
ASSETS
Non-current assets
Intangible assets 9 120 140 119 896
Goodwill 9 187 843 160 418
Total intangible assets 307 983 280 313
Deferred tax asset 7 26 999 23 400
Fixed assets
Right-of-use assets 11 29 765 21 777
Property, plant and equipment 10 29 855 32 518
Total fixed assets 59 620 54 295
Total non-current assets 394 601 358 008
Current assets
Trade accounts receivable 12 141 397 148 651
Customer projects assets 3 94 799 78 246
Other short-term receivables 13 19 614 15 989
Cash and cash equivalents 14 176 224 124 843
Total current assets 432 034 367 729
TOTAL ASSETS 826 635 725 738
Consolidated statement of financial position for the period ended 31 December
(NOK 1000) Note 2021 2020
EQUITY AND LIABILITIES
Equity
Paid-in capital
Share capital 15 2 185 1 962
Other paid in equity 3 657 6 655
Share premium 158 345 34 251
Total paid-in capital 164 186 42 868
Other equity 2 855 14 267
Retained earnings 41 968 47 224
Total equity 209 009 104 359
Liabilities
Non-current liabilities
Deferred tax liability 7 26 836 25 417
Interest-bearing loans and borrowings 16 357 887 375 832
Other long-term liabilities 3 134 -
Lease liabilities 11 16 445 11 104
Total long-term liabilities 404 303 412 353
Current liabilities
Trade accounts payable 18 257 21 190
Customer projects liabilities 3 66 452 50 256
Interest-bearing loans 16 1 356 1 244
Lease liabilities 11 14 423 11 792
Income tax payable 7 2 550 2 698
Public duties payable 36 113 49 486
Other short-term liabilities 18 73 921 71 480
Derivatives 249 880
Total short-term liabilities 213 322 209 025
Total liabilities 617 625 621 378
TOTAL EQUITY AND LIABILITIES 826 635 725 738
21
Consolidated statement of cash flow for the period ended 31 December
(NOK 1000) Note 2021 2020
Cash flow from operating activities
Profit (Loss) before tax 15 014 (13 390 )
Net financial items 6 7 571 50 813
Share based payments 22 5 679 2 851
Depreciation and impairments 10 4 077 3 311
Depreciation rights of use assets 11 16 114 19 101
Amortisation intangible assets 9 29 296 27 436
Amortisation implementation costs customer projects 3 29 874 34 666
Capitalisation implementation cost customer projects 3, 4 (51 350 ) (18 026 )
Customer project revenue deferred 3 41 356 14 961
Customer project revenue recognised 3 (21 701 ) (21 684 )
Taxes paid 7 (4 815 ) (2 427 )
Changes in accounts receivable 12, 19 12 464 (37 )
Changes in accounts payable 19 (3 525 ) (8 655 )
Changes in other items 18 (27 581 ) 28 002
Interest received 6 99 195
Interest paid 6 (19 536 ) (24 864 )
Net cash flow from operating activities 33 037 92 254
Cash flows to investing activities
Investment in fixed and intangible assets 9, 10 (20 630 ) (14 345 )
Acquisition of subsidiaries, net cash 23 (43 322 ) -
Net cash flow from investing activities (63 952 ) (14 345 )
Cash flows from financing activities
Sale of own shares 7 235 3
Buyback of own shares (975 ) -
Capital increase 115 508 -
Payment of lease liabilities 11, 16, 19 (15 767 ) (21 491 )
Repayment of loan 19 (1 919 ) (17 510 )
Dividend payments to owners of the parent 15 (19 639 ) -
Net cash flow from financing activities 84 444 (38 998 )
Net changes in cash and cash equivalents 53 529 38 912
Net foreign exchange dierence (2 151 ) 3 483
Cash and cash equivalents at the beginning of the period 124 843 82 448
Cash and cash equivalents at the end of the period 176 224 124 843
Consolidated statement of changes in equity for the period ended 31 December
Other Total
Share Share paid in paid-in Other Retained Total
(NOK 1000) Note capital premium equity equity equity earnings equity
Equity at 01.01.2020 1 957 34 252 3 804 40 014 (374 ) 52 526 92 166
Profit of the year (8 985 ) (8 985 )
Other comprehensive income 16 544 16 544
Purchase of own shares 5 (2 ) 3 1 063 1 066
Share based payments 2 495 2 495 2 495
Other changes 356 356 (1 903 ) 2 620 1 073
Equity at 31.12.2020 1 962 34 250 6 655 42 868 14 267 47 224 104 359
Profit of the year 12 812 12 812
Other comprehensive income (11 664 ) (11 664 )
Sale of own shares 15 6 731 6 746 489 7 235
Purchase of own shares (2 ) (2 ) (975 ) (977 )
Share based payments 5 679 5 679 5 679
Settlement of share based payments 8 1 858 (8 384 ) (6 518 ) (6 518 )
Issue of Share Capital 8, 15 201 120 537 120 738 120 738
Transaction cost related to (5 032 ) (5 032 ) (5 032 )
issue of new shares
Other changes (294 ) (294 ) 252 2 056 2 014
Dividend 8 - (19 639 ) (19 637 )
Equity at 31.12.2021 2 185 158 345 3 657 164 186 2 855 41 968 209 009
22
Note 1 – Accounting principles
and basis for preparation
The Zalaris Group consists of Zalaris ASA and
its subsidiaries, all fully owned. Zalaris ASA
is a limited company incorporated in Norway .
The Group’s main oce is in Hovfaret 4, Oslo,
Norway. The Group is a provider of payroll and
human capital management solutions.
The consolidated financial statements of
Zalaris for the period ending on 31 December
2021 were approved in a board meeting on 7
April 2022.
1.1 The basis for the preparation of the
financial statements
The Group’s consolidated financial state-
ments of Zalaris ASA for the accounting year
2021 have been prepared in accordance with
international accounting standards (“IFRS”) as
adopted by the European Union (EU).
The consolidated financial statements are
based on the principles of historic cost, apart
from financial instruments which are recog-
nized at fair value. The consolidated financial
statements have been prepared based on
going concern principle.
1.2 Accounting principles
Basis of consolidation
The consolidated financial statements com-
prise the financial statements of Zalaris ASA
and its subsidiaries (together referred to as
“the Group”). Subsidiaries are all entities con-
trolled by the Company. Control is achieved
where the Company has the power to govern
the financial and operating policies of an entity
to obtain benefits from its activities. The results
of subsidiaries acquired or disposed during the
year are included in the consolidated financial
statement from the date when control is
obtained, to the date the Group no longer has
control. The financial statements of the subsid-
iaries are prepared for the same reporting pe-
riod as the Parent Company, using consistent
accounting policies. All intercompany balances
and transactions have been eliminated upon
consolidation.
The acquisition of a subsidiary is considered
on a case-by-case basis to determine whether
the acquisition should be deemed as a busi-
ness combination or as an asset acquisition.
Business combinations are accounted for using
the acquisition method of accounting. The
consideration transferred for the acquisition
of a subsidiary is the fair values of the assets
transferred, the liabilities incurred, and the
equity interests issued by the Group. The con-
sideration transferred includes the fair value of
any asset or liability resulting from a contingent
consideration arrangement. Transaction costs
are expensed as incurred. The excess of the
consideration transferred over the fair value
of the identifiable net assets of the subsidi-
ary acquired is recorded as goodwill. When
acquisitions are deemed as asset acquisitions
no deferred tax on initial dierences between
carrying values and tax bases are recorded,
nor are any goodwill recorded at the date of
acquisition.
Foreign currency
Functional currency, presentation currency
and consolidation:
The Group’s presentation currency is Norwegian
Kroner (NOK). The functional currency of the
Parent Company is NOK.
For consolidation purposes, the balance
sheet figures for subsidiaries with a dierent
functional currency than NOK are translated
into the presentation currency (NOK) at the rate
applicable at the balance sheet date. Income
statements are translated at the average
monthly exchange rate. Exchange dierences
from translating subsidiaries are recognized in
other comprehensive income.
Transactions in foreign currency
Foreign currency transactions are translated
into the functional currency using the exchange
rates at the transaction date. Monetary
balances in foreign currencies are translated
into the functional currency at the exchange
rates on the date of the balance sheet. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation of monetary assets and liabilities
denominated in foreign currencies are recog-
nized in the statement of profit or loss.
Revenue from contracts with customers
Revenue from contracts with customers is rec-
ognized when control of the goods or services
are transferred to the customer at an amount
that reflects the consideration to which the
Group expects to be entitled in exchange for
those goods or services.
The Group’s revenue consists of revenue from
providing payroll and HR services, so called
Managed Services. Managed Services does
also include cloud services. The other segment
is Professional Services which, basically is con-
sulting services.
Managed Services; the revenue from contracts
related to outsourcing consists of a basic fixed
fee and variable revenue based on a number of
factors such as number of employees, pay slips
and expense claims produced. All the above-
mentioned deliverables are considered to be
highly interrelated and are therefore considered
to not be separate identifiable, i.e. one perfor-
mance obligation. Revenue from outsourcing
contracts are also recognized over time, since
23
revenue when the Group fulfills the perfor-
mance obligation(s) under the contract.
The Group may receive prepayments from
customers in the implementation phase of
outsourcing projects. The payments are recog-
nized as contract liabilities (“customer project
liabilities”) and recognized as revenue over the
period the Group fulfills the related perfor-
mance obligation.
Principal versus agent considerations
(Cloud services)
For Cloud services the Group delivers services
partly based on a SAP-license. Where hosting
services are delivered from the Group together
with other services rendered, the customer will
have to discontinue the hosting service upon a
termination of the contract. Where the hosting
is rendered by a third party there is a possibility
for the customer to continue to receive the
hosting service, but without the add-ons and
services rendered by the Group. This will leave
the customer with a dierent product, and
hence the Group is the principal supplier of
cloud services as a whole.
Consideration
The Group’s revenue is determined on contrac-
tual pricing connected to delivered services
within a certain period. Outsourcing and
Cloud services revenue is based on rendered
service in the period while consulting services
are invoiced based on hourly performance.
The is no right of return of the services sold by
the Group.
If the consideration in a contract includes a
variable amount, the Group estimates the most
likely amount of consideration to which it will
be entitled in exchange for transferring the
good or service to the customer. The variable
consideration is estimated at contract inception
and constrained until it is highly probable that
a significant revenue reversal in the amount of
cumulative revenue recognized will not occur
when the associated uncertainty with the variable
consideration is subsequently resolved.
Consideration of significant financing
component in a contract
The Group invoices for delivered services
throughout the contractual period. Some of
these services are short-term financed by the
Group while outsourcing contracts contains an
element of financing over the contract periods.
However, the financing of customer project
is not considered to be significant. Hence,
the Group has chosen to apply the practical
expedient not to adjust any prepayments form
customers.
Income tax
Income tax expense for the period comprises
current tax expense and deferred tax expense.
Tax is recognized in the income statement,
except to the extent that it relates to items
recognized in other comprehensive income
the customer simultaneously receives and con-
sumes the benefits provided by the Group.
Cloud services, a part of Managed Services,
delivered by the Group may comprise of
several deliverables (monthly services, hosting,
licenses etc.) The hosting of program solutions
is either on the Group’s platform or third-party
platform. All the deliverables are highly inter-
dependent and are therefore deemed to be
one performance obligation. The revenue from
cloud services are recognized over time, since
the customer simultaneously receives and
consumes the benefits provided by the Group.
Revenue from Professional Services contains
one performance obligation, i.e. consultant
services. The revenue from these contracts are
recognized over time since the customer simul-
taneously receives and consumes the benefits
provided by the Group. The measurement of
progress is based on hours.
Costs related to customer contracts are
expensed as incurred. However, a portion of
costs incurred in the initial phase of outsourcing
contracts (transition and/or transformation
costs) may be deferred when they are costs
specific to a given contract, generate or
enhance the Group’s resources that will be
used in satisfying performance obligations in
the future, and are recoverable. These costs
are considered to be “costs to fulfill a contract”
and are recognized as customer project asset.
The deferred costs are expensed evenly
over the period the outsourcing services are
provided. The amortization of deferred cost is
presented in the Statement of Profit and Loss
in the line item “amortization implementation
costs customer projects”. These costs are
accrued before startup of the delivery. The
customer’s acceptance of startup signifies
the recognition of the delivery and revenue is
hence rendered from this date forward.
Contract balances
Contract assets: A contract asset is the right to
consideration in exchange for goods or services
transferred to the customer. If the Group is
transferring goods or services to a customer
before the customer pays consideration or
before payment is due, a contract asset is
recognized for the earned consideration that
is conditional.
Trade receivables: A receivable represents the
Group’s right to an amount of consideration
that is unconditional.
Contract liabilities: A contract liability is the
obligation to transfer goods or services to a
customer for which the Group has received
consideration (or an amount of consideration
is due) from the customer. If a customer pays
consideration before the Group transfers
goods or services to the customer, a contract
liability is recognized when the payment is
made. Contract liabilities are recognized as
24
Leases
Zalaris has applied IFRS 16 according to the
following principles:
a) Identifying a lease
At the inception of a contract, Zalaris assesses
whether the contract is, or contains, a lease. A
contract is, or contains, a lease if the contract
conveys the right to control the use of an iden-
tified asset for a period of time in exchange for
consideration. To determine whether a contract
conveys the right to control the use of an iden-
tified asset, the Group assesses whether:
• The agreement creates enforceable rights of
payment and obligations
• The identified asset is physically distinct
• It has the right to obtain substantially all of
the economic benefits from use of the asset
• It has the right to direct the use of the asset
• The supplier does not have a substantive
right to substitute the asset throughout the
period of use
b) Zalaris as a lessee
Separating components in the lease contract
Zalaris accounts for each lease component within
the contract as a lease separately from non-lease
components of the contract. Non-lease compo-
nents, such as other occupancy costs related to
oce lease agreements, are accounted for by
applying other applicable standards.
c) Recognition of leases and exemptions
At the lease commencement date, Zalaris
recognises a lease liability and corresponding
right-of-use asset for all lease agreements in
which it is the lessee, except for the following
exemptions applied:
• Short-term leases (defined as 12 months
or less)
• Low value assets (NOK 50,000 or less)
For these leases, Zalaris recognises the lease
payments as other operating expenses in the
statement of profit or loss when they incur.
d) Measuring the lease liability
The lease liability is initially measured at the
present value of the lease payments for the
right to use the underlying asset during the
lease term that are not paid at the commence-
ment date. The lease term represents the
non-cancellable period of the lease, together
with both periods covered by an option to
extend the lease when Zalaris is reasonably
certain to exercise that option, and periods cov-
ered by an option to terminate the lease when
Zalaris is reasonably certain not to exercise that
option. Based on relevant circumstances, Zalaris
does consider whether to exercise extension
options or termination options or not when
determining the lease term. Zalaris is not ex-
pecting the terms for the extension period to be
lower than the current market price at the time
of execution of an extension period compared
or directly in equity. In this case the tax is also
recognized in other comprehensive income or
directly in equity. Items of the other comprehen-
sive income presented net of related tax eects
in the Statement of Other Comprehensive
Income.
Deferred tax assets and liabilities are calculated
on the basis of existing temporary dierences
between the carrying amounts of assets and
liabilities in the financial statement and their tax
bases, together with tax losses carried forward
at the balance sheet date. Deferred tax assets
and liabilities are calculated based on the tax
rates and tax legislation that are expected
to apply when the assets are realized or the
liabilities are settled, based on the tax rates
and tax legislation that have been enacted or
substantially enacted on the balance sheet
date. Deferred tax assets are recognized only
to the extent that it is probable that future
taxable profits will be available against which
the assets can be utilized. Deferred tax assets
and liabilities are not discounted. Deferred tax
assets and liabilities are oset when there is a
legally enforceable right to oset current tax
assets against current tax liabilities and when
the deferred taxes assets and liabilities relate
to income taxes levied by the same taxation
authority on the same taxable entity.
The companies included in the consolidated
financial statement are subject to income tax in
the countries where they are domiciled.
Intangible assets:
Internally developed software
Costs related to internally developed software
are capitalized to the extent that a future
economic benefit associated with the devel-
opment of identifiable intangible assets and
costs can be reliably measured. Otherwise, the
costs are expensed as incurred. Capitalized
development is amortized over their useful
lives. Research costs are expensed as incurred.
Fixed assets
Fixed assets are valued at cost less accumu-
lated depreciation and impairment losses.
When assets are sold or disposed of, the
gross carrying amount and depreciation are
derecognized, and any gain or loss on the
sale or disposal is recognized in the income
statement.
The gross carrying amount of fixed assets is
the purchase price, including duties/taxes and
direct acquisition costs related to making the
fixed asset ready for use.
The depreciation periods and methods are
assessed each year. The residual value is
estimated every year-end and changes in the
estimate for residual value are accounted for
as an estimation change. The residual value of
the Group’s fixed assets is estimated to be nil.
25
Trade receivables that do not contain a signifi-
cant financing component, as defined by IFRS
15 – Revenue from Contracts with Customers,
measured at the transaction price (e g, invoice
amount excluding costs collected on behalf of
third parties, such as sales taxes). Determining
whether a significant financing component
exists involves considering things like the
dierence between the cash price for an asset
and the transaction price in the contract, the
term of the receivable and prevailing interest
rates. As a practical expedient, Zalaris pre-
sumes that a trade receivable does not have a
significant financing component if the expected
term is less than one year. According to IFRS 9,
Zalaris can recognize a loss allowance based
on lifetime ECLs (Expected Credit Loss) after
the simplified approach if the asset does not
consist of a significant financing component in
accordance with IFRS 15 Zalaris uses a provision
matrix as a practical approach for measuring
expected credit losses for trade receivables.
The provision matrix is based on historical
default rates within dierent ranges of overdue
receivables for groupings of trade receivables
that share similar default patterns. Groupings
are made based on segment and product type.
The provision matrix is also calibrated based
on assessment of current and future financial
conditions. For instance, if forecast economic
conditions (i.e., gross domestic product) are ex-
pected to deteriorate over the next year which
can lead to an increased number of defaults in
the manufacturing sector, the historical default
rates are adjusted. At every reporting date, the
historical observed default rates are updated
and changes in the forward-looking estimates
are analyzed.
The assessment of the correlation between
historical observed default rates, forecast
economic conditions and ECLs is a significant
estimate. The amount of ECLs is sensitive to
changes in circumstances and of forecast eco-
nomic conditions. The Group’s historical credit
loss experience and forecast of economic
conditions may also not be representative of
customer’s actual default in the future.
Cash and cash equivalents
Cash and the equivalents include cash on hand,
deposits with banks and other short-term highly
liquid investments with original maturities of
three months or less.
Financial liabilities
The Group’s financial liabilities include trade
and other payables, loans and borrowings in-
cluding bank overdrafts, and derivative financial
instruments. The measurement of financial
liabilities depends on their classification.
Financial liabilities at fair value through profit
or loss. Financial liabilities at fair value through
profit or loss includes derivative financial
instruments entered into by the Group that
are not designated as hedging instruments in
hedge relationships as defined by IFRS 9.
to similar lease agreements. The Group con-
tinuously evaluates more cost-eective leases
as the business does not have assets that are
particularly important.
The lease payments included in the measure-
ment comprise of:
• Fixed lease payments (including in-substance
fixed payments), less any lease incentives
receivable
• Variable lease payments that depend on an
index or a rate, initially measured using the
index or rate as at the commencement date
Zalaris presents its lease liabilities as separate
line items in the statement of financial position.
e) Measuring the right-of-use asset
The right-of-use asset is initially measured
at cost. The cost of the right-of-use asset
comprise:
• The amount of the initial measurement of the
lease liability
• Any lease payments made at or before the
commencement date, less any lease incen-
tives received
• Any initial direct costs incurred by the Group
The right-of-use asset is subsequently measured
at cost less accumulated depreciation and
impairment losses. The right-of-use asset is
depreciated from the commencement date to
the earlier of the lease term and the remaining
useful life of the right-of-use asset. The Group
has elected to not apply the revaluation model
for its right of use asset for leased buildings.
The Group applies IAS 36 Impairment of
Assets to determine whether the right-of-use
asset is impaired and to account for any
impairment loss identified.
The Group presents its right-of-use assets as
separate line items in the consolidated state-
ment of financial position
Trade and other receivables
Trade and other receivables are non-derivative
financial assets with fixed or determinable pay-
ments that are not quoted in an active market.
After initial measurement, such financial assets
are subsequently measured at amortized cost
using the eective interest rate method, less
impairment. Amortized cost is calculated by
taking into account any discount or premium
on acquisition and fees or costs that are an
integral part of the eective interest rate. The
eective interest rate amortization is included
in finance income in the statement of profit or
loss. The losses arising from impairment are
recognized in the statement of profit or loss in
finance costs for loans and in cost of sales or
other operating expenses for receivables.
26
• Excluding the impact of any service and
non-market performance vesting conditions
• Including the impact of any non-vesting
conditions
At the end of each reporting period, the Group
revises its estimates of the number of options
and RSUs that are expected to vest based on the
non-market vesting conditions and service con-
ditions. It recognizes the impact of the revision to
original estimates, if any, in the income state-
ment, with a corresponding adjustment to equity.
If options are forfeited, the expenses relating
to those options are reversed. The fair value
of the options which have been estimated at
grant date and are not subsequently changed.
When the options are exercised, and the
Company elects to issue new shares, the pro-
ceeds received net of any directly attributable
transaction costs are credited to share capital
(nominal value) and share premium.
1.3 New and amended standards and
interpretations
Below are comments on the standards relevant
for the Zalaris Group.
Standards issued and eective
Amendments to IFRS 16 Lease
The Covid-19 related amendment to IFRS 16
Lease has not had any implication for the
Group, and hence had no eect on the figures
presented as at 31 December 2021
Standards issued and not yet eective
Standards, amendments and interpretations to
existing standards that are not yet eective and
for which early adoption has not been applied
by the Group, are listed below. The Group will
adopt these new and amended standards and
interpretations, if applicable, when they become
eective.
• IFRS 17 - Insurance Contracts (1st January 2023)
• IFRS 10 and IAS 28 (amendments) –Sale or
contribution of assets btween and investor and
its associate or joint venture (1st January 2023)
• Amendments to IFRS 3 – Reference to the
conceptual framework (1st January 2022)
• Amendments to IAS 16 – Property, plant and
Equipment – Proceeds before intended use
(1st January 2022)
• Amendments to IAS 37 – Onerous contracts
– Cost of fulfilling a contract (1st January
2022)
• Amendments to IAS 1 – Classification of lia-
bilities as current or non-current (1st January
2023)
• Amendments to IAS 1 and IFRS Practice
Statement 2 – Disclosure of Accounting
Policies (1st January 2023)
Borrowing costs directly attributable to the ac-
quisition, construction or production of an as-
set that necessarily takes a substantial period
of time to get ready for its intended use or sale
are capitalised and amortized over borrowing
period. All other borrowing costs are expensed
in the period in which they occur. Borrowing
costs consist of interest and other costs that an
entity incurs in connection with the borrowing
of funds as defined in IAS 23.
Gains and losses are recognized in profit or
loss when the liabilities are derecognized. For
further information see note 19.
Pension plans
Defined contribution plan
The Group has only defined contributions
plans. Contributions are paid to pension
insurance plans and charged to the income
statement in the corresponding period. Once
the contributions have been paid, there are no
further payment obligations.
Earnings per share
The calculation of basic earnings per share
is based on the profit attributable to ordinary
shares using the weighted average number of
ordinary shares outstanding during the year
after deduction of the average number of
treasury shares held over the period.
The calculation of diluted earnings per share
is consistent with the calculation of the basic
earnings per share, but gives at the same time
eect to all dilutive potential ordinary shares
that were outstanding during the period, by
adjusting the profit/loss and the weighted
average number of shares outstanding for the
eects of all dilutive potential shares, i.e.:
• The profit/loss for the period attributable to
ordinary shares is adjusted for changes in
profit/loss that would result from the conver-
sion of the dilutive potential ordinary shares.
The weighted average number of ordinary
shares is increased by the weighted average
number of additional ordinary shares that
would have been outstanding assuming the
conversion of all dilutive potential ordinary.
Share-based compensation
The Group operates an equity-settled compen-
sation plan, under which the entity receives
services from employees as consideration for
equity instruments (options and restricted stock
units (RSUs)) of the Group. The fair value of the
employee services received in exchange for
the grant of the options or RSUs is recognized
as an expense (payroll expenses) over the
vesting period. The total amount to be ex-
pensed is determined by reference to the fair
value of the options and RSUs granted:
• Including any market performance conditions
(e.g., an entity’s share price)
27
determining which amount of expenses that
can be capitalized.
The Group tests annually if carrying amounts
exceed its recoverable amount (higher of fair
value less cost to sell and its value in use).
Determining recoverable amount requires that
the management makes several assumptions
related to future cash flows from these assets
which may involve high degree of uncertainty.
As of 31 December, no indication of impairment
was identified.
Impairment of non-financial assets
Impairment exists when the carrying value of
an asset or cash generating unit exceeds its
recoverable amount, which is the higher of its
fair value less costs of disposal and its value in
use. The value in use calculation is based on
a DCF model. The cash flows are derived from
the budget for the next five years and do not
include restructuring activities that the Group
is not yet committed to or significant future
investments that will enhance the performance
of the assets of the CGU being tested. The
recoverable amount is sensitive to the discount
rate used for the DCF model as well as the
expected future cash-inflows and the growth
rate used for extrapolation purposes. These
estimates are most relevant to goodwill or
customer contracts recognised by the Group
on acquisition. The key assumptions used to
determine the recoverable amount for the
dierent CGUs, including a sensitivity analysis,
are disclosed and further explained in Note 9.
Deferred tax asset
Deferred tax asset is recognized in the
dierent entities where it is expected to be
utilized within the jurisdiction in question, and
according to expected future profits in the
same jurisdiction.
Share-based payments
Estimating fair value for share-based payment
transactions requires determination of the most
appropriate valuation model, which depends
on the terms and conditions of the grant. This
estimate also requires determination of the
most appropriate inputs to the valuation model
including the expected life of the share option
and RSUs or appreciation right, volatility and
dividend yield and making assumptions about
them. The fair value of the share options and
RSUs is estimated at the grant date using the
Black-Scholes option pricing model, taking into
account the terms and conditions upon which
the share options were granted. The assump-
tions and models used for estimating fair value
for share-based payment transactions are
disclosed in Note 22.
• Amendments to IAS 8 – Definition of
Accounting Estimates (1st January 2023)
• Amendments to IAS 12 – Deferred Tax related
to Assets and Liabilities arising from a Single
Transaction (1st January 2023)
These amendments are expected to not have
significant eect on the financial statements
when implemented/eective.
1.4 Key sources of estimation uncertainty and
critical accounting judgments
The preparation of the financial statements in
accordance with IFRS requires management to
make judgments, use estimates and assumptions
that aect the reported amounts of assets and
liabilities, income and expenses.
The estimates and associated assumptions are
based on historical experience and various other
factors that are considered to be reasonable
under the circumstances. The estimates and
underlying assumptions are reviewed on an
ongoing basis. The management does not
assess that there are any specific areas for
which there has been much estimation uncer-
tainty.
Critical accounting judgements
Customer projects
Revenues from outsourcing agreements are
recognized over the term of the contract as the
services are rendered. The related costs are
recognized as they are incurred. However, a
portion of costs incurred in the initial phase of
outsourcing contracts may be deferred when
they are specific to a given contract, relate to
future activity on the contract, will generate
future economic benefits and are recoverable.
These costs are capitalized as “customer pro-
jects assets” and any prepaid revenues by the
client are presented separately as “customer
projects liabilities” in the statement of financial
position. When calculating cost, the hourly
rates applied are based on estimates.
The deferred costs are expensed evenly over
the period the outsourcing services are provided
and included in the line item “Amortization im-
plementation cost customer projects”. Deferred
revenue is recognized over the corresponding
period.
The principle requires management to ensure
routines for correct and complete allocation
of cost and prepaid revenues to the individual
customer project and updated and accurate
rates to be applied in the cost estimation.
Capitalized customer projects are tested at
least annually for impairment.
Capitalization of intangible assets
Development costs of software have been
capitalized as intangible assets to the extent
it is assessed that future benefits can be
substantiated. Judgment must be applied in
28
Note 2 – Segment information
For management purposes, the Group is
organized into business units based on its main
products and services and has two reportable
segments, as follows:
The Managed Services segment, which in-
cludes a full range of payroll and HR outsourc-
ing services, such as payroll processing, time
and attendance, travel expenses as well as re-
lated cloud system solutions and services. This
includes additional cloud-based HR functional-
ity to existing outsourcing customers as talent
management, digital personnel archive, HR
analytics, mobile solutions, etc. These services
are predominantly of a recurring nature and
are generally based on long-term contracts
(3 - 7 years).
The Professional Services segment, which
includes the implementation of SAP HCM &
Payroll and SuccessFactors, based on Zalaris
templates, or implementation of customer-
specific functionalities. This segment unit
also assists customers with cost-eective
maintenance and support of customers’ own
on-premise SAP solutions ("AMO"). The AMO
services are generally of a recurring nature,
and much of the services are based on long-
term customer relationships.
For internal reporting and management pur-
poses the financial information is organized by
the two business segments by geography.
Items that are not allocated to business
segments are mainly intercompany sales,
interest-bearing loans and other associated ex-
penses and assets related to administration of
the Group. The Group’s executive management
is the chief decision maker in the Group. The
investing activities comprise total cost in the
period for the acquisition of assets that have
an expected useful life of more than one year.
Geographic information
The Group's operations are carried out in
several countries, and information regarding
revenue based on geography is provided
below. Information is based on location of
the entity generating the revenue, which, to a
large extent, corresponds to the geographical
location of the customers.
2021
Managed Professional Gr.Ovhd &
(NOK 1.000) Services Services Unallocated Total
Revenue, external 529 685 245 580 - 775 265
Operating expenses (428 087) (218 921) (26 314) (673 322)
EBITDA 101 598 26 658 (26 314) 101 942
Depreciation and amortisation (39 598) (8 717) (31 042) (79 357)
EBIT 62 000 17 941 (57 356) 22 585
Net financial income/(expenses) (7 571) (7 571)
Income tax (2 203) (2 203)
Profit for the period 62 000 17 941 (67 130) 12 812
Cash flow from investing activities (63 122)
2020
Managed Professional Gr.Ovhd &
(NOK 1.000) Services Services Unallocated Total
Revenue, external 544 321 248 004 - 792 326
Operating expenses (435 659) (212 633) (21 952) (670 244)
EBITDA 108 662 35 372 (21 952) 122 082
Depreciation and amortisation (45 287) (9 958) (29 416) (84 660)
EBIT 63 376 25 414 (51 367) 37 423
Net financial income/(expenses) (50 813) (50 813
Income tax 4 405 4 405
Profit for the period 63 376 25 414 (97 775) (8 985)
Cash flow from investing activities (14 345)
29
Revenue from external Customers Attributable to
2021 2020
(NOK 1000) as % of Total NOK 1000 as % of Total NOK 1000
Norway 26% 200 875 27% 215 979
Northern Europe, excluding Norway 29% 221 047 29% 228 486
Central Europe 41% 314 540 39% 308 776
UK & Ireland 5% 38 803 5% 39 085
Total 100% 775 265 100% 792 326
Information About Major Customers
2021 2020
(NOK 1000) as % of total NOK 1000 as % of total NOK 1000
Largest customer 11% 88 720 11% 89 591
5 largest customers 24% 182 348 25% 197 362
10 largest customers 36% 281 054 38% 302 994
20 largest customers 54% 416 086 56% 441 600
(NOK 1000) Note 31.12.2021 31.12.2020
Trade receivables 12 141 397 148 651
Customer project assets 94 799 78 246
Customer project liabilities (66 452) (50 256)
Prepayments from customers 18 (9 474) (11 633)
Customer project assets are costs incurred
on specific customers contracts, which will be
used in satisfying performance obligations in
the future, and that are recoverable. These are
generally cost incurred in the implementation
phase of customer contract for the delivery of
BPO HCM services, and is a prerequisite for
being able to deliver these services. These
costs are deferred and amortized evenly
over the period the outsourcing services are
provided.
Customer project liabilities are generally
payments from customers specific to a given
contract, to cover part of the costs for the im-
plementation of the outsourcing contract. The
customer payments are recognized as revenue
evenly as the Group fulfils the related perfor-
mance obligations over the contract period.
Prepayments from customers comprise a
combination of short- and long-term advances
from customers. The short-term advances are
typically deferred revenues related to smaller
projects or change orders related to the system
solution. The long-term liabilities relate to initial
advances paid upon signing the contract. These
advances are contracted to be utilized by the
customer to either transformation-, change- or
other projects. These advances are open for
application until specified, or when the contract
is terminated, where the eventual remainder of
the amount become the property of Zalaris and
is hence rendered as income by the Group.
Movements in Customer Project Assets Through the Period:
(NOK 1000) 2021 2020
Opening balance 1 January 78 246 88 808
Cost capitalized 51 350 18 026
Amortization (29 874) (34 666)
Disposals & currency (4 923) 6 078
Customer projects assets 94 799 78 246
Movements in Customer Project Liabilities Through the Period:
(NOK 1000) 2021 2020
Opening balance 1 January (50 256) (55 740)
Revenue deferred (41 356) (14 961)
Revenue recognized 21 701 21 684
Disposals & currency 3 458 (1 239)
Customer project liabilities (66 452) (50 256)
The Group has only one customer, which accounts for more than 10% of the total revenue (ref.
largest customer in the table above).
Note 3 – Revenue from contracts with customers
Disaggregated revenue information
The Group’s revenue from contracts with cus-
tomers has been disaggregated and presented
in note 2.
Trade receivables are non-interest bearing and
are on general terms from 14 to 90 days credit. In
2021 NOK 2.081k (2020 NOK 350k) was recog-
nized as provision for expected credit losses on
trade receivables.
30
(NOK 1000) 2021 2020
Salary 357 333 356 098
Bonus 19 452 19 204
Social security tax 55 823 54 548
Pension costs (see note 17) 18 480 17 450
Share based payments (see note 22) 5 749 2 495
Other personnel expenses 11 906 12 561
Capitalised to internal development projects (11 444) (13 598)
Capitalised to customer project assets (see note 3) (51 350) (18 026)
Total personnel expenses 405 949 430 733
2021 2020
Average number of employees 811 833
Average number of FTEs 733 723
See note 20 for transactions with related parties.
Performance obligations
Information related to the Group´s performance
obligations and related revenue recognition is
summarised below:
Professional services (Consulting)
Consulting services consist of services deliv-
ered and defined by project plans with defined
milestones and completion specifications (one
performance obligation). The performance
obligation is satisfied over time because the
customer simultaneously receives and con-
sumes the benefits provided by the Group. The
Group recognizes revenue based on the labour
hours incurred relative to the total expected
labour hours to complete the installation. Where
contracts have clauses of support hours utilized
by the customer the revenue is recognized
when support has been delivered. In contracts
where some unused hours may be transferred
to later periods the performance obligation is
not deemed fulfilled, and revenue is only recog-
nized when the hours later are utilized or on the
last possible time of transfer of un-utilized hours
to future periods.
Managed Services (Outsourcing and Cloud)
HR Outsourcing normally consists of services
delivered on a regular basis. Typically, the
deliverables for these contracts are payroll
services where dierent variable elements
are delivered. These may be salary calcu-
lation, payslip delivery, accounting reports,
ocial statistics reporting, travel expense
claims reimbursed, sick leave registration and
reporting etc. All the deliverables are highly
interrelated and therefore not capable to
be distinct, i.e. one performance obligation.
The performance obligation is satisfied over
time, because the customer simultaneously
receives and consumes the benefits provided
by the Group. The Group recognizes revenue
based on the labour hours incurred.
Cloud services delivered by the Group com-
prise of several deliverables (hosting, licenses
etc.), all the deliverables are highly interde-
pendent and are therefore deemed to be one
performance obligation.
The revenue from the cloud services is recog-
nized over time, since the customer simulta-
neously receives and consumes the benefits
provided by the Group
Transaction price
The transaction price is determined either
by fixed agreed price per period for licenses
and hosting services while for outsourcing
and consulting the actual consumption, being
manhours spent or customer employee trans-
actions initiated, on agreed price per unit. The
variable element of the contracts are typically
not limited on customer-initiated transactions
while transition and change projects can be
limited. The transaction price is distributed
over the time the services has been rendered.
Note 4 – Personnel expenses
31
(NOK 1000) 2021 2020
Interest income on bank accounts and receivables 99 191
Currency gain 4 020 4 679
Unrealised foreign currency gain 15 968 -
Other financial income 1 372 893
Finance income 21 459 5 763
Interest expense on financial liabilities measured at amortised cost 17 625 23 145
Currency loss/(gain) 5 685 987
Unrealised foreign currency loss - 27 069
Interest expense on leasing 1 281 1 503
Other financial expenses 4 440 3 871
Finance expenses 29 031 56 576
Net financial items (7 571) (50 813)
(NOK 1000) 2021 2020
Tax paid / payable (8 917) (19 050)
Changes in deferred taxes 6 714 23 445
Tax expense (2 203) 4 405
Tax payable in balance sheet:
(NOK 1000) 2021 2020
Calculated tax payable 2 550 2 698
Total income tax payable 2 550 2 698
(NOK 1000) 2021 2020
Ordinary profit before tax 15 014 (13 390)
Tax at Zalaris ASA’s statutory tax rate of 22% (3 303) (2 946)
Non tax deductible costs and other permanent dierences (2 386) 5 823
Eect of dierent tax rates and impact of changes in rates and legislation 3 607 (1 035)
Tax expense (2 203) 4 405
Eective tax rate 14.7% 32.9%
Specification of tax eects of temporary dierences:
(NOK 1000) 2021 2020
Property, plant, equipment and intagible assets 82 557 65 205
Other dierences (3 155) 4 957
Tax losses carry forward (99 028) (95 723)
Total temporary dierences (19 625) (25 561)
Total deferred tax assets 26 999 23 400
Total deferred tax liability 26 836 25 417
Net recognised deferred tax/(liability) 22% 162 (2 017)
(NOK 1000) 2021 2020
External consultants for customer projects 103 859 80 585
External services 21 054 10 040
IT and telecom 37 516 35 560
Oce premises 8 930 8 326
Travel and accomodation 7 910 10 663
Freight, postage etc. 6 506 4 732
Marketing 5 121 5 051
Audit & Accounting 5 154 5 589
Other expenses 3 836 6 591
Total other operating expenses 199 886 167 138
Auditors Fee
(NOK 1000) 2021 2020
Auditor fee 2 559 4 024
Other attestation services 142 -
Fee for tax services 458 272
Other fees - 985
Total 3 159 5 281
Note 6 – Finance income and finance expenses
Note 7 – Income TaxesNote 5 – Other operating expenses
The Group osets tax assets and liabilities, if and only if it has a legally enforceable right to set o
current tax assets and current tax liabilities.
32
The Group has tax losses, which have arisen
in Norway, of NOK 114.1 mill as of 31 December
2021 that has no expiration date (NOK 101.0
mill).
As of 31 December 2021 the Group has de-
ferred tax liabilities of NOK 5.1 mill on excess
values in connection with the acquisition of
ba.se Consulting and Services GmbH.
The calculation of basic earnings per share is
based on the net income attributable to the
shareholders of the parent company and a
weighted average number of shares outstanding
during the years ending 31 December 2021
and 2020 respectively. Shares issued during
the periods are included in the calculations of
weighted average number of shares from the
date the shares issue was approved by the
general meeting. Diluted equity instruments
outstanding are related to employee share
based purchase programs.
Note 9 – Intangible assets
The goodwill and customer relationships
& contracts in the table above relate to the
acquisitions of sumarum AG (sumarum) and
Roc Global Solution Ltd. (ROC) in 2017 and
ba.se services and consulting GmbG (ba.se) in
2021. The goodwill relates to NOK 110.6 mil in
Managed Services and NOK 77.3 mill in Profes-
sional Services.
The calculated recoverable amount of Goodwill
has been calculated based on the corresponding
CGU in each of its segments Managed Services
and Professional Services.
The recoverable amount is based on a value-
in-use calculation, using cash flow projections
for the next 5 years. The projections are based
on an existing business model without non-or-
ganic growth. The expected cash flow is based
on segment estimates for the period 2022 to
2026. A terminal value is included in the calcu-
lations. Estimates and pertaining assumptions
are made to the best of the management’s
(NOK 1000) 2021 2020
Net profit/(loss) attributable to ordinary equity holders of the parent 12 812 (8 985)
Weighted average number of shares 21 293 532 19 607 117
Weighted average diluted number of shares 22 736 146 20 301 155
Basic earnings per share (NOK) 0.60 (0.46)
Diluted earnings per share 0.56 (0.46)
Internally
Licenses Internally Developed Customer
and Developed Software under Relationships
(NOK 1000) Software Software Construction & Contracts Goodwill Total
Acquisition cost
At 1st January 2020 37 682 82 658 17 890 101 434 153 248 392 911
Additions of the year - 1 858 11 740 - - 13 598
Disposals of the year - (567) (6 708) - - (7 275)
Miscellaneous - - (0) - - (0)
Reclassifications - 15 371 (15 371) - - -
Currency eects 791 611 3 518 4 745 7 170 16 835
At 31 December 2020 38 473 99 931 11 068 106 178 160 418 416 068
Additions of the year 936 2 006 14 509 - - 17 451
Acqusitions 17 153 - - 17 632 33 368 68 153
Disposals of the year (19 889) (25 974) (4 627) - - (50 490)
Reclassifications 13 615 (13 615) - - -
Currency eects (1 978) (1 124) 1 258 (2 948) (5 943) (10 735)
At 31 December 2021 34 695 88 454 8 594 120 862 187 843 440 448
Amortization
At 1 January 2020 33 177 48 006 - 25 528 - 106 712
Disposals of amortization and currency - (567) - - - (567)
This year’s ordinary amortisation 1 746 14 709 - 10 981 - 27 436
Currency eects 638 340 - 1 195 - 2 173
At 31 December 2020 35 561 62 488 - 37 705 - 135 754
Disposals of amortisation (19 880) (25 562) - - - (45 442)
Acquistion 17 632 - - - 17 632
This year’s ordinary amortisation 479 16 981 - 11 836 - 29 296
Miscellaneous - (1 602) - (1 146) - (2 747)
Currency eects (950) (339) - (739) - (2 028)
At 31 December 2021 32 842 51 966 - 47 656 - 132 474
Net Book value
At 31 December 2020 2 912 37 442 11 068 68 473 160 418 280 313
At 31 December 2021 1 853 36 488 8 594 73 206 187 843 307 983
Useful life 3-10 years 5 years N/A 10 years Indefinite
Depreciation method linear linear linear
Note 8 – Earnings per share
33
Professional Services - Headroom Sensitivity Analysis in NOK million
Weighted Average Cost of Capital
5.3% 6.3% 7.3% 8.3% 9.3%
-20.0% 537 391 295 227 177
-10.0% 663 491 378 298 239
Percentage change in EBITDA 0,0% 790 591 461 369 300
10.0% 916 691 544 440 362
20.0% 1 042 792 627 510 424
Managed Services - Headroom Sensitivity Analysis in
Weighted Average Cost of Capital
6.0% 7.0% 8.0% 9.0% 10.0%
-20.0% 477 312 198 114 50
-10.0% 719 510 365 259 178
Percentage change in EBITDA 0,0% 961 708 533 404 306
10.0% 1 202 905 700 549 434
20.0% 1 444 1 103 867 694 561
knowledge of historical and current events,
experience and other factors that are deemed
reasonable in the circumstances.
The value-in-use calculation is most sensitive
to the following assumptions:
• Revenue (5 % organic growth)
• EBITDA / EBITDA margin
• Discount rate
Discount rates represent the current market
assessment of the risks, taking into consider-
ation the time value of money and individual
risks of the underlying assets that have not
been incorporated in the cash flow estimates.
The discount rate calculation is based on the
specific circumstances of the Group and its
operating segments and is derived from its
weighted average cost of capital (WACC).
The WACC takes into account both debt and
equity. The cost of equity is derived from the
expected return on investment by the Group’s
investors. The cost of debt is based on the inter-
est-bearing borrowings the Group is obliged to
service. The beta factor is evaluated annually
based on publicly available market data and is
the same for all segments.
A conservative growth assumption of 1.5% is
applied in the terminal value, which is slightly
below the inflation targets for the markets in
which the Group operates.
A headroom sensitivity analysis has been car-
ried out, which indicates sensitivity to changes
in WACC and operating profit. The range is
+/-20% in EBITDA and +/-2% in WACC
34
(NOK 1000) Buildings Equipment Vehicles Total
Acquisition cost
At 1 January 2020 45 620 4 175 6 985 56 781
Additions 5 870 154 5 6 029
At 1 January 2021 51 490 4 329 6 991 62 810
Additions and adjustments 18 929 308 5 617 24 854
Disposals -220 - -160 -380
Currency changes -630 22 238 -370
At 31 December 2021 69 568 4 659 12 686 86 913
Depreciation
At 1 January 2020 16 653 1 629 3 650 21 932
Depreciation 15 708 1 426 1 967 19 101
At 31 December 2020 32 361 3 055 5 617 41 033
Depreciation 13 618 343 2 153 16 114
At 31 December 2021 45 979 3 398 7 770 57 147
Carrying amount at 31 December 2020 19 128 1 274 1 374 21 776
Carrying amount at 31 December 2021 23 588 1 261 4 916 29 765
Lease liabilities
(NOK 1000) 2021 2020
Current 14 423 11 792
Non-current 16 445 11 104
Lease liabilities at 31 December 30 869 22 896
Interest expense included (in finance cost) 1 281 1 503
Variable lease payments expensed in the period - -
Operating expenses related to short-term leases 160 275
Operating expenses period related to low value assets 122 288
Total cash outflows for leases 17 048 22 994
Furniture IT-
(NOK 1000) Land Buildings Vehicles and Fixtures Equipment Total
Acquisition cost
At 1st January 2020 3 708 23 775 536 18 939 7 909 54 866
Additions of the year - - - 142 616 758
Disposals of the year - - - (773) (413) (1 187)
Miscelaneous - - (9) - (2) (11)
Currency eects 234 1 501 28 580 313 2 656
At 31 December 2020 3 942 25 276 554 18 888 8 422 57 082
Additions through acquisition
1)
28 0 3 500 - 3 528
Additions of the year - - - 381 1 251 1 632
Disposals of the year - - (473) (3 093) (2 042) (5 608)
Currency eects (183) (1 173) (26) (228) (82) (1 692)
At 31 December 2021 3 759 24 131 55 19 448 7 549 54 942
Depreciation
At 1st January 2020 - 990 487 14 105 6 148 21 729
Disposals of ordinary depreciation - - - (708) (386) (1 094)
This year's ordinary depreciation - 506 25 1 550 1 232 3 313
Currency eects - 63 28 412 115 618
At 31 December 2020 - 1 559 539 15 358 7 109 24 564
Accumulated depreciation at closing on-
additions through acquisitions (19) (0) (3 402) - (3 421)
Disposals of ordinary depreciation - - (473) (3 093) (2 042) (5 608)
This years ordinary depreciation - 521 15 8 026 1 124 9 686
Currency eects - (72) (25) 165 (201) (133)
At 31 December 2021 - 1 988 56 17 054 5 990 25 087
Net book value
At 31 December 2020 3 942 23 718 15 3 529 1 314 32 518
At 31 December 2021 3 759 22 144 -1 2 394 1 559 29 855
For description of the acquisitions, see note 23.
Economic life indefinite 50 years 3 years 5 years 3 years
Depreciation method none linear linear linear linear
Note 10 – Property, Plant and Equipment
Note 11 – Right-of-use Assets and Lease Liabilities
Zalaris as a lessee
Right-of-use assets
Zalaris leases several assets such as buildings, equipment and vehicles. The Group’s right-of-use
assets are categorized and presented in the table below:
35
Movements in the Provision for Loss are as Follows: 2021 2020
Opening balance (350) (350)
Provision of the year (46) (21)
Realised loss this year 159 21
Closing balance (237) (350)
Details on the credit risk concerning trade accounts receivable are given in note 19.
The Group had the following trade accounts receivable due, but not paid or written o:
(NOK 1000) Total Not due <30 d 30-60d 60-90d >90d
31 December 2021 141 397 116 216 18 430 2 222 487 4 043
31 December 2020 148 651 128 124 15 337 2 119 1 017 2 054
Note 12 – Trade Accounts Receivables
(NOK 1000) 2021 2020
Gross trade accounts receivable 141 634 149 001
Provisions for losses (237) (350)
Trade accounts receivable 141 397 148 651
Losses on trade accounts receivable are classied as other operating expenses in the income statement.
See note 19 for assessment of credit risk.
Extension options
Zalaris’ lease of buildings has lease terms that
vary from one year to ten years, and several
agreements involve a right of renewal which
may be exercised during the last period of the
lease term. Zalaris assesses at the commence-
ment whether it is reasonably certain to exercise
the renewal right. This is because the Group
is not expecting the terms for the extension
period to be lower than the current market price
at the time of execution of an extension period
compared to similar lease agreements. Zalaris
continuously evaluates more cost-eective
leases, as the Group does not consider these
assets to be critical to the business.
The leases do not contain any restrictions on
Zalaris' dividend policy or financing. Zalaris does
not have significant residual value guarantees
related to its leases to disclose.
36
Note 13 – Other Short-Term Receivables
(NOK 1000) 2021 2020
Advances to employees 341 250
Prepaid rent 550 1 293
Prepaid software 558 1 270
Prepaid insurance 830 241
Prepaid other expenses 2 041 1 269
Prepaid maintenance and service 1 539 1 779
Accrued income 8 070 7 234
Public duties and taxes 2 653 474
Other receivables 3 031 2 178
Total other short-term receivables 19 614 15 989
Note 14 – Cash and Cash Equivalents and Short-Term Deposits
(NOK 1000) 2021 2020
Cash in hand and at bank - unrestricted funds 170 034 118 145
Deposit accounts - guarantee rent obligations - restricted funds 2 078 2 247
Employee withheld taxes - restricted funds 4 112 4 451
Cash and cash equivalents in the balance sheet 176 224 124 843
(NOK 1000) 2021 2020
Customer deposits 1 318 1 825
Note 15 – Share Capital and Shareholder information
Shares 2021 2020
Shares - nominal value NOK 0.10 22 135 279 20 122 979
Total number of shares 22 135 279 20 122 979
The Major Shareholders at 31.12.2021 are:
Shareholder Number of Shares % of Total
Norwegian Retail AS 2 891 482 13,06%
Skandinaviska Enskilda Banken AB 2 158 278 9,75%
Verdipapirfondet Alfred Berg Gamba 2 020 848 9,13%
J.P. Morgan Bank Luxenbourgh S.A. 1 374 925 6,21%
State Street Bank and Trust Comp 1 150 456 5,20%
Vestland Invest A/S 910 659 4,11%
Vpf Norge Selektiv 719 955 3,25%
Verdipapirfondet Nordea Kapital 689 340 3.11%
Verdipapirfondet Dnb Smb 642 759 2.90%
J.P. Morgan Bank Luxenbourgh S.A 613 406 2.77%
Verdipapirfondet Nordea Avkastning 505 705 2.28%
Verdipapirfondet Nordea Norge Plus 466 816 2.11%
Verdipapirfondet Delphi Norge Plus 321 965 1.45%
Skandinaviska Enskilda Banken Ab 300 000 1.36%
Ølja As 299 650 1.35%
Næringslivets Hovedorganisasjon 283 217 1.28%
Deutsche Bank Aktiengesellschaft 270 055 1.22%
Taconic 262 040 1.18%
Sober As 238 718 1,08%
Shares owned by the Company 282 493 1,28%
Others 5 732 512 25,90%
Total 22 135 279 100.00%
Short-Term Deposits
The Group pays salaries on behalf of its customers. For this purpose, separate deposit accounts
are established. These deposits accounts are not recognized in the Group’s balance sheets.
The table below provides information about on the total balance of these deposit accounts.
The nominal value of the share is NOK 0.10. All the shares in the Company have equal voting rights
and are entitled to dividend.
The computation of earnings per share is shown in note 8.
37
Equity and dividend
In Q2 2021, the Company completed a private
placement of 2,012,300 new share at an issue
price of NOK 60.00 per share, generating gross
proceeds of NOK 120.7 million (net proceeds
NOK 115.5 million). Consequently, the author-
ized share capital was increased by NOK
201,230 through the issue of 2,012,300 new
shares at a par value of NOK 0.10 per share.
As approved at the General Meeting held on
20 May 2021, the Company paid dividend of
NOK 1.00 per share in Q2, totaling NOK 19.6
million.
Assets pledged as security
Shares in all subsidiaries of Zalaris ASA have
been pledged as guarantee for the bond loan.
In addition assets in the subsidiaries Zalaris
Note 16 – Interest-Bearing Loans
and Borrowings
(NOK 1000) 2021 2020
Financial Interest Non- Non-
Institution Agreement Maturity Duration Rate Current Current Total Current Current Total
Oslo Stock Exchange* Bond loan Sep 2023 5 years see below 346 806 - 346 806 362 023 - 362 023
Commerzbank, Bank** Bank loan Dec 2031 14 years 1.3% 10 519 1 169 11 687 12 256 1 226 13 481
KfW Bank, Germany Bank loan Dec 2022 10 years 2,45-4% 562 187 750 1 554 19 1 573
Interest-bearing debt and borrowings 357 887 1 356 359 244 375 832 1 244 377 077
*The bond loan has maturity on 29 September 2023 with no down
payments before maturity. Interest rate to be paid is 3 months Euribor
4.75%. The Company has deferred NOK 7.5 million in issuing costs (2%
of the bond loan), which are being amortized over the term of the loan.
The balance at 31 December 2021 is NOK 3.1 million (NOK 4.9 million).
The Company has a swap arrangement to hedge the interest rate
exposures arising from this debt obligation.
**Zalaris Deutschland AG entered a loan agreement with Commerzbank
in March 2017 related to the nancing of the oce building in Leipzig.
HR Services Norway AS, Zalaris HR Services
Sweden AB, Zalaris HR Services Denmark AS,
Zalaris HR Services Finland OY and Zalaris
Deutschland AG have been pledged as
guarantees for the loan. Nordea has pledged
guarantee of NOK 7 mill against assets in Zalaris
ASA as security for bank deposits.
Guarantees and commitments
There are not issued any guarantees from the
parent company on behalf of the Company
against third parties.
The Company is a certified SAP BPO partner.
SAP BPO Partners oer the full stack of business
process outsourcing services based on SAP SF
and SAP HCM business applications. Certified
providers undergo a rigorous assessment of their
delivery and support capabilities every two years
by SAP’s outsourcing partner certification group.
The agreement involves commitments for future
purchases of licenses and maintenance fees
amounting to NOK 25.9 mill (NOK 28.8 mill).
For leasing liabilities relating to right-of-use
assets, see note 11.
(NOK 1000) Financial lease Finance institutions Total
At 1 January 2021 22 896 377 077 399 973
Additions 24 103 - 24 103
Payments 2021 (17 048) (1 919) (18 967)
Currency changes 918 (15 914) (14 996)
At 31 December 2021 30 869 359 244 390 113
38
Note 18 – Other Short-Term Liabilities
(NOK 1000) 2021 2020
Prepayments from customers* 9 474 11 633
Wages, holiday pay and bonus 21 632 18 705
Accrued expenses and other current liabilities 42 815 41 142
Total 73 921 71 480
* Prepayments from customers both relate to prepayments of fixed service fees for the first month starting outsourcing deliveries,
and prepayments related to liabilities for transferred personnel.
Total expenses recognized related to pension in 2021 amounts to NOK 18.5 million (NOK 17.4 million).Note 17 – Pensions
Pension for employees in the Norwegian
entities
The Group is required to have an occupational
pension scheme in accordance with the
Norwegian law on mandatory occupational
pension (“Lov om obligatorisk tjenestepensjon”).
The Group’s pension schemes satisfy the re-
quirements of this law, and represent a defined
contribution plan, with disability coverage. At
the end of the year there were 140 (141) partici-
pants in this defined contribution plan, including
the AFP-scheme.
The pension expenses equal the calculated
contribution for the year and is NOK 5.3 million
(NOK 5.3 million). The scheme is administered
by Storebrand.
In 2016 a new AFP-scheme was established.
The new AFP-scheme is not an early retirement
plan, but a plan that gives a lifelong contribu-
tion to the ordinary pension. The employees
can choose to exercise the new AFP-scheme
starting at the age of 62 years, also in com-
bination with continued work, and the annual
regular post-employment benefits increases
in the new scheme if early AFP retirement is
rejected. The new AFP-scheme is a defined
benefit multi-employer plan which is financed
through contributions that are determined by a
percentage of the employee’s earnings. There
is currently no reliable measure and allocation
of liabilities and assets in the plan. The plan is
accounted for as a defined contribution plan
which means that the contributions are recog-
nized as expenses with no provisions.
The premium paid during 2021 was 2.5% of
salary between 1 G and 7.1 G. 1G equals NOK
106.4 k as of 31.12.2021.
The AFP-scheme does not publish any
estimates on future rate of premiums, but it is
expected that the premiums will be increased
over time to meet the expectations of in-
creased pension payments.
Pensions for other employees
Employees in Group companies outside Norway
have pension plans in accordance with local
practice and local legislation. The Group has only
defined contribution plans. Contributions are paid
to pension insurance plans and charged to the
income statement in the corresponding period.
Once the contributions have been paid, there are
no further payment obligations.
Denmark has defined contribution plans for all
employees, a total of 28 people end of the year.
Finland has a defined contribution plan for all its
employees, a total of 45 employees. Sweden
has a defined contribution plan for all employ-
ees, a total of 54 employees. UK has a defined
contribution plan for all employees, a total of 40
employees. Germany has defined contribution
plan for executive employees.
39
Note 19 – Financial Instruments
Financial Instruments by Category
2021 Financial Assets Financial liabilities Financial Liabilities at Total
(NOK 1000) at Amortized Cost at fair value Amortized Cost Book Value
Financial Assets
Trade accounts receivable 141 397 141 397
Other short-term receivables 19 614 19 614
Cash and cash equivalents 176 224 176 224
Total 337 235 337 235
Financial liabilities at amortized cost
and fair value
Derivatives, Interest rate swaps 249 249
Contigent considerations 4 065 4 065
Borrowings, long term 357 887 357 887
Trade accounts payables 18 257 18 257
Other short-term debt 73 921 73 921
Total 4 314 450 065 454 379
2020 Financial Assets Financial liabilities Financial Liabilities at Total
(NOK 1000) at Amortized Cost at fair value Amortized Cost Book Value
Financial Assets
Trade accounts receivable 148 651 148 651
Other short-term receivables 15 989 15 989
Cash and cash equivalents 124 843 124 843
Total 289 484 189 484
Financial liabilities at amortized cost
Derivatives, Interest rate swaps 880 880
Borrowings, long term 375 832 375 832
Trade accounts payables 21 190 21 190
Other short-term debt 71 480 71 480
Total 880 468 503 469 382
Fair value of financial instruments
The Group classifies fair value measurements
by using a fair value hierarchy which reflects the
importance of the input used in the preparation
of the measurements. The fair value hierarchy
has the following levels:
The fair value of the interest rate swap is deter-
mined by discounting expected future cash flows
to present value through the use of observed
market interest rates from Nordea. The fair value
measurement for interest swap at period-end
2021 using Level 2 is NOK 0.2 mill (NOK 0.9 mill).
It is assessed that the carrying amounts of finan-
cial instruments recognized at amortized cost in
the financial statements approximate their fair
values. The assessment is based on a judgment
that dierence between interest rate at year-end
compared to draw down.
Value assessment is Level 3 in the fair value
hierarchy measured at amortized cost.
Financial risk management
The Group has some exposure to risks from
its use of financial instruments, including credit
risk, liquidity risk, interest rate risk and currency
risk. This note presents information about the
Group’s exposure to each of the above-men-
tioned risks, and the Group’s objectives, policies
and processes for managing such risks. At
the end of this note, information regarding the
Group’s capital management is provided.
Market Risk from Financial Instruments
Market risk is the risk that the fair value of
future cash flows of a financial instrument will
fluctuate because of changes in market prices.
Market prices comprise three types of risk:
market risk (e.g. interest rate risk and currency
risk), commodity price risk and other price risk.
The Company’s financial instruments are main-
ly exposed to interest rate and currency risks.
Interest Rate Risk
Interest rate risk is the risk that the fair value or
future cash flows of a financial instrument will
fluctuate because of changes in market interest
rates. The Company’s exposure to the risk of
changes in market interest is managed by the
mix of fixed and variable rate loans. As described
above, the Company has entered swap arrange-
ments to hedge its interest exposures arising
from its debt obligations on the bond loan (ref.
Note 16). The interest risk is thus considered to
be low.
Foreign Currency Risk
Foreign currency risk is the risk that the fair value
or future cash flows of a financial instrument
will fluctuate because of changes in foreign ex-
change rates. The Company is primarily exposed
to foreign exchange risk arising from various
currency exposures with respect to the SEK, EUR
and GBP in relation to its debt obligations as well
as from commercial transactions.
40
For operational transactions denominated in
currencies other than the functional currency of
the entities in the Group, the Company’s policy
is to exchange into foreign currency as required
on a spot basis. Most transactions carried out by
Group entities are done in the functional currency
of those entities.
As of 31 December 2021 the Company has
a Euro-based bond loan of EUR 35 million.
Per 31 December 2021 the Company had an
unrealized currency loss amounting to NOK
25.1 million (2020 NOK 42.1 million) related
to this loan. Otherwise, the Group has limited
exposure to currency risk from assets and lia-
bilities recognized as of 31 December 2021 that
are denominated in currencies other than the
functional currency of the Group entities. As
of 31 December 2021 the Group has currency
exposure from EUR, DKK, INR, SEK, GBP, CHF
and PLN. It is mainly the EUR exchange rate
that constitutes a currency risk for the Company.
A +/- 5% negative change in the exchange rate
of EUR would have resulted in a finance loss
pre-tax of approximately NOK 17.5 million.
Credit Risk
Credit risk is the risk that a counterparty will not
meet its obligations under a financial instrument
or customer contract, leading to a financial
loss. The Group is exposed to credit risk from
its operating activities (primarily trade receiva-
bles) and from its financing activities, including
deposits with banks and financial institutions,
derivatives, debt instruments and account
receivables. The counterparty to the cash and
cash equivalents and deposits banks which are
assessed to be solid.
Trade Receivables and Contract Assets
Customer credit risk is managed by each
business unit subject to the Group’s estab-
lished policy, procedures and control relating to
customer credit risk management. Credit quality
of a customer is assessed based on a credit
rating scorecard and individual credit limits are
defined in accordance with this assessment.
Outstanding customer receivables and contract
assets are regularly monitored. The Group has
a customer portfolio of well-known companies
and has had low credit losses (Note 16).
An impairment analysis is performed at each re-
porting date using a provision matrix to measure
expected credit losses. The provision rates are
based on days past due for groupings of various
customer segments with similar loss patterns
(i.e., by geographical region, product type, cus-
tomer type and rating, and coverage by letters
of credit or other forms of credit insurance). The
calculation reflects the probability-weighted out-
come, the time value of money and reasonable
and supportable information that is available at
the reporting date about past events, current
conditions and forecasts of future economic
conditions. Generally, trade receivables are
written o if past due for more than one year
and are not subject to enforcement activity.
The Group does not hold collateral as security.
The Group evaluates the concentration of risk
with respect to trade receivables and contract
assets as low, as its customers are located in
several jurisdictions and industries and operate
in largely independent markets.
Liquidity risk
Liquidity risk is the risk of being unable to pay
financial liabilities as they fall due. The Group’s
approach to managing liquidity risk is to ensure
that it will always have enough liquidity to meet
its financial liabilities as they fall due, under
normal as well as extraordinary circumstances,
without incurring unacceptable losses or risking
damage to the Group’s reputation. Prudent
liquidity risk management implies maintaining
enough cash and the availability of appropriate
funding.
The table below details the contractual
maturities for the Group’s financial liabilities.
The tables do not include interest payments.
The contractual amounts were estimated based
on the closing exchange rates at balance sheet
date.
Capital management
A key objective in relation to capital manage-
ment is to ensure that the Company maintains
a sucient capital structure in order to support
its business development and to maintain a
strong credit rating. The Company evaluates
its capital structure in light of current and
projected cash flows, potential new business
opportunities and the Group’s financial commit-
ments. In order to maintain or adjust the capital
structure, the Company may issue new shares
or obtain new loans.
(NOK 1000) Less than 3 months 3 to 12 months 1 to 5 years 6 to 10 years Total
Per 31 December 2021
Borrowings, long term - - 352 628 5 259 357 887
Borrowings, short term 330 1 027 - - 1 356
Trade creditors and other
short term liabilities 18 257 64 447 9 474 - 92 178
Leasing IFRS 16 3 588 10 764 16 517 - 30 869
Total liabilities 22 174 76 237 378 619 5 259 482 290
Per 31 December 2020
Borrowings, long term - - 370 262 5 571 375 832
Borrowings, short term 346 899 - ´- 1 244
Trade creditors and other -
short term liabilities 21 190 59 847 11 633 - 92 670
Leasing IFRS 16 4 031 12 092 6 773 - 22 896
Total liabilities 25 567 72 838 388 667 5 571 492 643
41
Note 20 – Transactions with Related Parties
a) Purchase from Related Parties
Related Party Transaction 2021 2020
Rayon Design AS
1)
Web site and design services 2 274 2 371
Total 2 274 2 371
Accounts payables 110 66
1) Norwegian Retail AS, a company owned 100% by Hans-Petter Mellerud, CEO of Zalaris ASA, owns 40% of the shares in Rayon Design AS.
b) Remuneration to Management and Board of Directors:
NOK (1000) 2021 2020
Short-term payment 13 270 14 443
Pension based payment 758 739
Share-based payment 9 614 1 354
Total 23 642 16 536
Further details can be found in the annual remuneration report for 2021 published on www.zalaris.com
The costs recognized for the share-based payment plan are shown in the following table:
(NOK 1000) 2021 2020
Restricted Share Units 5 749 2 495
Employee share options 318 696
Accrued social security costs 1 444 1 145
Total recognized costs 7 511 4 335
Accrued payroll tax at the end of the period 643 1 636
Note 21 – Overview of Subsidiaries
The Following subsidiaries are included in the consolidated accounts:
Company Country Ownership/Voting Share
Zalaris Consulting Ltd UK 100%
Zalaris Deutschland AG Germany 100%
Zalaris France SAS France 100%
Zalaris HR Services Denmark A/S Denmark 100%
Zalaris HR Services Estonia Estonia 100%
Zalaris HR Services Finland OY Finland 100%
Zalaris HR Services India Pvt Ltd India 100%
Zalaris HR Services Ireland Ltd. Ireland 100%
Zalaris HR Services Latvia SIA Latvia 100%
Zalaris HR Services Lithuania UAB Lithuania 100%
Zalaris HR Services Norway AS Norway 100%
Zalaris HR Services Sverige AB Sweden 100%
Zalaris Polska SP Z.o.o Poland 100%
Zalaris Switzerland AG Switzerland 100%
ba.se consulting & services GmbH Germany 100%
The following companies were merged with their sister company or closed down during the year.
Company Country
LBU Personal Complete GmbH Germany
Zalaris UK Ltd UK
Restricted Stock Units
The general meeting of Zalaris ASA held on
18 May 2020, gave the Board the authority to
grant up to 135,000 RSUs annually to executive
management, with matching requirements.
Under this plan the executive management
may convert up to 50% of approved bonuses
to RSU’s at a 100% higher value (e.g. NOK 50k
of annual bonus is converted to NOK 100k
worth of RSUs). The purpose of the RSUs is to
further align the interests of the Company, its
subsidiaries and its shareholders by providing
long term incentives in the form of an own
investment in the Company done by the
participant and matching awards (the RSUs).
The granted RSUs have a three year vesting
period. The RSUs require the employee to
purchase the required number of matching
shares at the grant date and hold these until
the RSUs are fully vested. Non-vested RSUs
are cancelled when the employee has given
notice of termination and are treated as
forfeited. If for some reason the Company is
not holding a sucient number of shares at the
relevant settlement date, any RSUs awarded
Zalaris ASA (the "Company") operates a share-based payment plan for members of the executive
management and key employees. The share-based payment plan consists of a share option
program and restricted stock units ("RSUs").
Note 22 – Share-Based Payment Plan
42
Number of RSUs 2021 2020
Outstanding at the beginning of the period 307 152 294 925
Granted 18 041 12 227
Released (199 925) -
Outstanding at the end of the period 125 268 307 152
The Weighted Average Assumptions Used 2021 2020
Expected life of RSUs (year) 3.00 2.76
Weighted average share price 66.00 36.70
The following table illustrates the number of RSUs outstanding:
price for seven days preceding the grant. The
options granted vest after 36 months. Each
share option corresponds to one share.
Employee share options are not subject to any
performance-based vesting conditions. The
Company has the option to settle the share
options in cash, however they have no legal or
constructive obligation to repurchase or oer
cash-settlements for options granted. Non-vest-
ed share options are cancelled when the em-
ployee has given notice of termination and are
treated as forfeited. A total of 971,500 options
were granted in 2021. The options were granted
at an average exercise price of NOK 59.59.
and settled under the plan shall be settled by
a cash bonus payment equal to the fair market
value per share on the date of settlement mul-
tiplied by the number of RSUs. A total of 18,401
RSUs were granted in 2021.
The Company will do its utmost to settle the
granted RSUs as shares, and thus accounts for
the RSUs as an equity-settled plan.
Share Option Program
The general meeting of Zalaris ASA held on
18 May 2020, gave the Board the authority to
grant up to 1 mill employee share options an-
nually for a three-year period. The strike price
is based on the weighted average share
The fair value of the RSUs is the weighted average share price at grant date:
The range of exercise prices for options out-
standing at the end of the year was NOK 29.10
to 59.69.
The fair value of the share options is estimated
at the grant date using the Black-Scholes option
pricing model, taking into account the terms
and conditions upon which the share options
were granted. The weighted average fair value
of share options granted to employees during
the period was NOK 17.35 per option (NOK
9.05). The following table lists the key inputs to
the model used for the year ended 31 December.
2021 2020
Number of WAEP Number of WAEP
Options (NOK) Options (NOK)
Outstanding at the beginning of the period 618 000 38.55 333 000 34.31
Granted 971 500 59.59 280 000 41.97
Terminated (70 000) 41.41 - -
Outstanding at the end of the period 1 519 500 51.87 613 000 37.81
Exercisable at the end of the period - - - -
The following table illustrates the number of options outstanding and their weighted average exercise price (WAEP):
The Weighted Average Assumptions Used 2021 2020
Expected volatility (%) 43.17 40.43
Risk-free interest rate (%) 0.92 0.42
Expected life of options (year) 3.0 3.8
Weighted average share price 58.70 39.05
Expected dividend 0% 0%
Historic volatility is assumed to be a reasonable
indicator of expected volatility. Expected vol-
atility is therefore defined as historic volatility.
The risk-free interest rate used for share option
calculations is collected as of grant date of
Norwegian state bonds from Norges Bank.
Where there is no exact match between the
term of the interest rates and the term of the
share options, interpolation is used to estimate
a comparable term.
43
Annual share purchase program
The Company completed an annual share
purchase program for employees in Q4 2021.
As part of the program, Zalaris has sold 20,777
own shares to employees at a subscription
price of NOK 43.24 per share. The shares were
transferred to the employees in December 2021.
The subscription price was based on the vol-
ume-weighted average share price in the period
between 18 November to 30 November 2021,
less a 20% discount. To receive the discount the
shares have a 12 months lock-up period.
See Executive Remuneration Policy available at
www.zalaris.com for detailed information on the
Group’s share based payment plan.
Note 23 – Acquisition
Zalaris Deutschland AG, a fully owned subsidiary
of Zalaris ASA, acquired 100% of the total share
capital in ba.se services & consulting GmbH
(“ba.se”). The closing date for the acquisition
was 3 August 2021. The total purchase consid-
eration transferred to the seller was NOK 51.9
million, consisting of an initial cash payment of
NOK 47.8 million, and an estimated contingent
consideration of NOK 4.1 million. The contingent
consideration has a minimum amount of nil and
a maximum amount of NOK 16.7 million, subject
to certain revenue and EBITDA targets for bas.
se, for the period 2021 to 2023. The acquisition
was financed by available cash.
ba.se is a leading provider of payroll and HR
services within the German retail sector. With
this acquisition, Zalaris increases its recurring
revenue base in Germany, and gains significant
expertise within the retail sector. The acquisi-
tion will also provide Zalaris with an additional
platform for further BPO growth in Germany and
Central Europe.
ba.se serves approximately 30,000 employees
of numerous large German, Austrian, Swiss and
French customers with a team of around 80
people located in Hagen near Düsseldorf, Ger-
many. The customer base includes well-known
companies, such as Douglas, Christ and Thalia.
The company specializes in payroll, accounting,
document management and real estate manage-
ment services.
The Weighted Average Assumptions Used Shares acquired Amount
Estimated purchase consideration 100% 51 876
Book of value of equity 5 595
Excess value to be allocated 46 281
Customer relations 18 454
Deferred tax (5 541)
Total allocated to identifiable intangible assets: 12 913
Goodwill 33 368
*) The aquired goodwill is not tax deductable and mainly relates to human relations
NOK 1000 Amount
Non-current assts 864
Trade receivables 5 453
Other current receivables 897
Cash & Cash equivalents 4 548
Total assets 11 762
Trade payables 619
Tax and public duties payable 1 660
Other current liabilities 3 887
Total assets 6 166
Net identifiable assets 5 595
Following is a preliminary purchase prices anal-
ysis (“PPA”) for the acquisition of ba.se. At the
acquisition date, the fair values of the acquired
assets and liabilities of the ba.se accounts are
broken down in the table on the right.
The goodwill is calculated on the basis of
expected synergies between Zalaris' experi-
ence and technical solutions and ba.se market
presence, and established customer relations, in
addition to the assembled workforce. The intan-
gible assets in ba.se are license costs posted at
face value, and a 40% minority holding valued at
purchase price. There are no contingent agree-
ments with indemnification clauses.
The receivables and payables are all recog-
nised at fair value. There are no transactions
recognised separately from the acquisition of
the assets and liabilities.
ba.se is included in Zalaris' consolidated financial
figures from 3 August 2021. The revenue and
net profit included in these figures for the 5
months period ended 31 December 2021 was
NOK 21.8 million and NOK 2.0 million respec-
tively. If the acquisition date had been on 1
January 2021, the consolidated revenue and net
profit of Zalaris for the 12 months period ended
31 December 2021 would have been NOK
810.1 million and NOK 15.1 million respectively,
of which ba.se would have contributed with
revenue of NOK 56.5 million and net profit of
NOK 5.1 million.
44
Note 24 – Events After the
Balance Sheet Date
On 2 February 2022, the Company announced
the acquisition of vyble, a payroll and HR
solution start-up located in Rostock and
Hamburg, Germany. Zalaris has acquired the
assets of vyble AG for EUR 1.1 million through
a newly formed subsidiary vyble GmbH, which
is owned 90% by Zalaris. vyble has a complete
suite of Payroll and HR solutions delivered as
Software as a Service (SaaS) targeting the SME
market in Germany and has annual recurring
revenue of approximately EUR 1 million. Vyble
has approximately 25 employees.
There have been no other events after the
balance sheet date which have had a material
eect on the issued accounts.
45
“Gjensidige is pleased to have
entered into a partnership with SAP
and Zalaris to meet Gjensidige’s
oensive HR strategy. Our focus on
relevant ecient user-friendly HR
processes and tools is important for
Gjensidige’s commitment to attract,
develop and retain future employees.”
- Marit Agner Matheson
HR-director at Gjensidige Forsikring ASA
46
Income Statement: 1 January - 31 December
(NOK 1000) Notes 2021 2020*
Other revenue 2 144 062 132 974
Total Revenue 144 062 132 974
Operating expenses
License costs 45 719 44 706
Personell expenses 3 36 447 32 641
Other operating expenses 4 89 004 90 585
Amortisation intangible assets 5 14 639 13 812
Depreciation and impairments 6 233 310
Total operating costs 186 043 182 054
Operating profit (41 981) (49 080)
Financial items
Financial income 15 41 277 96 536*
Financial expenses 15 (22 011) (98 283)
Unrealised foreign currency gain/(loss) 14, 15, 16 15 867 (27 108)
Net financial items 35 133 (28 855)
Ordinary profit before tax (6 847) (77 935)
Income tax expense
Tax expense on ordinary profit 7 (2 011) (10 322)
Total tax expense (2 011) (10 322)
Profit for the year 4 836 (67 613)
Attributable to:
Other Equity (4 836) (67 613)
*2020 restated
Financial Statement – Parent Company
Parent Company
Annual Accounts Report 2021
Zalaris ASA
The parent company annual accounts report for Zalaris
ASA contains the following documents:
• Statement of Income
• Statement of Balance Sheet
• Statement of Cash Flows
• Statement of Changes in Equity
• Notes to the Financial Statement
The financial statements, which have been drawn up by
the Board and management, should be read in relation
to the Annual Report and the independent auditor’s
opinion.
47
Balance Sheet at 31 December
(NOK 1000) Notes 2021 2020*
EQUITY AND LIABILITIES
Equity
Paid-in capital
Share capital 2 185 1 962
Other paid in equity 3 657 6 359
Share premium 158 345 34 251
Total paid-in capital 164 186 42 572
Other equity (68 195) (44 060)*
Total earned equity (68 195) (44 060)
Total equity 95 991 (1 488)
Non-current liabilities
Interest-bearing loans and borrowings 16 346 806 362 023
Total long-term debt 346 806 362 023
Current liabilities
Trade accounts payable 4 479 9 349
Interest-bearing loans to group companies 16 133 784 67 384
Short-term debt to group companies 4 845 9 226
Derivatives 14 249 880
Public duties payable 1 951 395
Other short-term debt 17 13 960 9 841
Total short-term debt 159 269 97 075
Total liabilities 506 075 459 098
Total Equity and liabilities 602 066 457 610
*2020 restated
Balance Sheet at 31 December
(NOK 1000) Notes 2021 2020
ASSETS
Non-current assets
Intangible assets
Deferred tax asset 7 22 934 20 864
Other intangible assets 5 39 399 44 506
Total intangible assets 62 332 65 369
Fixed assets
Property, plant and equipment 6 95 305
Total fixed assets 95 305
Financial non-current assets
Shares in subsidiaries 8 273 621 280 700*
Total financial non-current assets 273 621 280 700
Total non-current assets 336 049 346 374
Current assets
Prepayments 2 508 3 123
Other short-term receivables 9 1 213 8
Other short-term receivables to group companies 9 113 830 97 731
Cash and cash equivalents 10 148 466 10 373
Total current assets 266 017 111 235
TOTAL ASSETS 602 066 457 610
48
Statement of Cash Flows: 1 January - 31 December
(NOK 1000) Note 2021 2020*
Cash flows from operating activities
Ordinary profit before tax (6 847) (77 935)
Income taxes paid - (491)
Net financial items (21 063) (47 733)
Amortisation and depreciation 14 873 14 122
Write os investments in subsidaries - 72 437
Changes in trade accounts receivable and payables (4 870) (1 330)
Changes in other accruals (30 033) 66 339
Interest received 2 128 8 530
Interest paid (17 669) (19 541)
Net cash flows from operating activities (63 481) 14 399
Cash flows from investing activities
Purchases of Intangible assets and property, plant and equipment (9 998) (8 923)
Purchase and investment in subsidiary 8 7 079 (11 471)
Net cash flows from investing activities (2 919) (20 394)
Cash flows from financing activities
Group contribution and dividiends from subsidiaries 37 275 86 066
Own shares 6 258 1 117
Issuance of new shares 115 706 -
Stock purchase program (836) 2 555
Revolving credit 66 400 (56 608)
Paid dividend payment (19 639) -
Net cash flows from financing activities 205 164 33 129
Net changes in cash and cash equivalents 138 764 27 134
Net foreign exchange dierence (671) (27 323)
Cash and cash equivalents at the beginning of the year 10 373 10 562
Cash and cash equivalents at the end of the year 148 466 10 373
*2020 restated
Statement of Changes in Equity
Shares Share Other Paid-in Total Paid-in Other Total
(NOK 1000) Capital Premium Equity Capital Equity Equity
Equity at 01.01.2020 1 957 34 253 3 804 40 014 22 440 62 453
Income for the year - (67 613) (67 613)
Share based payments 2 555 2 555 2 555
Sale of own shares 5 (2) 3 1 114 1 117
Equity at 31.12.2020 1 962 34 251 6 359 42 572 (44 060) (1 488)
Income for the year - (4 836) (4 836)
Paid dividend - (19 639) (19 639)
Issue of share capital 201 115 505 115 706 115 706
Share based payments 5 679 5 679 5 679
Sale of own shares 15 6 731 6 746 489 7 235
Settlement of share based
payments 8 1 858 (8 382) (6 516) (6 516)
Purchase of own shares (2) (2) (975) (977)
Other changes in equity - 826 826
Equity at 31.12.2021 2 185 158 345 3 657 164 186 (68 195) 95 991
*2020 restated
liability company incorporated and domiciled
in Norway . The Company’s main oce located
in Hovfaret 4, Oslo, Norway . The Company
delivers full- service outsourced personnel and
payroll services.
The financial statements of Zalaris ASA for
the period ending on 31 December 2021 were
approved in a board meeting on 7 April 2022.
1.1 The basis for the preparation of the
financial statements
The financial statements of Zalaris ASA for the
accounting year 2021 have been prepared in
accordance with the Norwegian Accounting act
and generally accepted accounting principles
in Norway (“NGAAP”).
Note 1 – Accounting Principles
and Basis for Preparation
49
1.2 Accounting principles
Foreign currency
Foreign currency transactions are translated
into the functional currency using the exchange
rates at the transaction date. Monetary
balances in foreign currencies are translated
into the functional currency at the exchange
rates on the date of the balance sheet. Foreign
exchange gains and losses resulting from the
settlement of such transactions and from the
translation of monetary assets and liabilities
denominated in foreign currencies are recog-
nized in the income statement.
Revenue Recognition
The Company’s revenue consists of revenue
from providing services to subsidiaries and
basic consulting services. Revenue is in general
recognized when it is probable that transactions
will generate future financial benefits for the
Company and the size of the amount can be reli-
ably estimated. Sales revenue is presented net of
value-added tax and potential discounts.
The service revenue and the revenue from
basic consulting services are recognized
according to the rendering of the service. Small
projects and change orders beyond the terms
of the main contract with the customer service
delivery are recognized according to the ren-
dering of the services.
Income Tax
Income tax expense for the period comprises
current tax expense and deferred tax expense.
Tax is recognized in the income statement,
except to the extent that it relates to items
recognized in other comprehensive income
or directly in equity. In this case the tax is also
recognized in other comprehensive income or
directly in equity.
Deferred tax assets and liabilities are calculat-
ed based on existing temporary dierences
between the carrying amounts of assets and
liabilities in the financial statement and their tax
bases, together with tax losses carried forward
at the balance sheet date. Deferred tax assets
and liabilities are calculated based on the tax
rates and tax legislation that are expected
to apply when the assets are realized or the
liabilities are settled, based on the tax rates
and tax legislation that have been enacted or
substantially enacted on the balance sheet
date. Deferred tax assets are recognized only
to the extent that it is probable that future tax-
able profits will be available against which the
assets can be utilized. Deferred tax assets and
liabilities are not discounted.
Intangible Assets:
Internally Developed Software
Costs related to internally developed software
are capitalized to the extent that a future
economic benefit associated with the devel-
opment of identifiable intangible assets and
costs can be reliably measured. Otherwise, the
costs are expensed as incurred. Capitalized
development is amortized over their useful
lives. Research costs are expensed as incurred.
Fixed Assets
Fixed assets are valued at cost less accumu-
lated depreciation and impairment losses.
When assets are sold or disposed of, the gross
carrying amount and depreciation are derecog-
nized, and any gain or loss on the sale or dis-
posal is recognized in the income statement.
The gross carrying amount of fixed assets is
the purchase price, including duties/taxes and
direct acquisition costs related to making the
fixed asset ready for use.
The depreciation periods and methods are
assessed each year. The residual value is
estimated every year-end and changes in the
estimate for residual value are accounted for
as an estimation change.
Leases (as Lessee)
Financial Leases
Leases where the Group assumes most of the
risk and rewards of ownership are classified
as financial leases. Financial leasing contracts
are recognized on the balance sheet and de-
preciated on a linear basis over the expected
useful life of the assets. The leasing debt is
classified as a long-term debt and the leasing
debt is reduced by the payments according to
the leasing contract deducted by an interest
element which is expensed.
Operating Leases
Leases in which most of the risks and rewards
of ownership are retained by the lessor are
classified as operating leases. Payments made
under operating leases are charged to the
income statement on a straight-line basis over
the period of the lease.
Shares in Subsidiaries
Shares in subsidiaries are measured using
the cost method of accounting in the parent
company accounts. Investments are valued
at the acquisition cost of the shares unless
impairment losses have been made. Shares in
subsidiaries are impaired to fair value when the
decrease in value is not considered as tempo-
rary. Impairment losses are reversed when the
reason for the impairment no longer applies.
Trade and Other Financial Receivables
Loans and receivables are non-derivative finan-
cial assets with fixed or determinable payments
that are not quoted in an active market. After
initial measurement, such financial assets are
subsequently measured at amortized cost
using the eective interest rate (EIR) method
(if the amortization eect is material), less
impairment.
50
The company is providing shared services to
its subsidiaries within accounting, IT solutions
both for internal use and further customer
deliveries and consulting services through the
subsidiaries. Items that are not allocated are
mainly sales activities, executive management,
HR, interest-bearing loans and other associated
expenses and assets related to administration of
the Group. The key management in the Company
is the chief decision maker in the Group. The
investing activities comprise total expenses in
the period for the acquisition of assets that have
an expected useful life of more than one year.
Cash and Cash Equivalents
Cash and the equivalents include cash on hand,
deposits with banks and other short-term highly
liquid investments with original maturities of
three months or less.
Borrowings
After initial recognition, interest-bearing loans
and borrowings are subsequently measured at
amortized cost using the eective interest rate
method.
Pension Plans
The Company has a defined contribution
pension plan. Contributions are paid to pension
insurance plans and charged to the income
statement in the corresponding period. Once
the contributions have been paid, there are no
further payment obligations.
Cost of Equity Transactions
Transaction costs directly attributable to an
equity transaction are recognized directly in
equity, net after deducting tax.
Events After the Balance Sheet Date
New information on the Company’s position at
the balance sheet date is taken into account in
the financial statements. Events after the bal-
ance sheet date that do not aect the Company’s
position at the balance sheet date, but will aect
the Company’s position in the future, are stated
if significant.
Use of Estimates
The management has used estimates and as-
sumptions that have aected assets, liabilities,
incomes, expenses and information on potential
liabilities in accordance with generally accepted
accounting principles in Norway.
Cash Flow Statement
The cash flow statement is presented using the
indirect method. Cash and cash equivalents
include cash, bank deposits and other short
term, highly liquid investments.
Covid-19
All significant estimates and underlying as-
sumptions to the accounting areas above have
been reviewed in light of Covid-19. Zalaris has
not experienced any major disruption to its
operations or experienced significant financial
eects due to Covid-19 in 2021. As a result,
Zalaris has not identified significant Covid-19
impact to the consolidated financial statements
as of 31 December 2021.
Note 2 – Segment information
The only segment in the Company is service
deliveries to the Group (Group services). This
segment also includes the exercising of own-
ership.
(NOK 1000) as % of total 2021 as % of total 2020
Norway 44% 63 906 44% 58 766
Sweden 18% 25 946 18% 24 111
Denmark 11% 16 060 13% 17 313
Finland 9% 13 424 11% 14 828
Germany 8% 11 712 5% 6 237
Latvia 3% 4 263 3% 4 322
UK 2% 2 237 1% 1 565
Poland 3% 3 628 2% 3 224
Other 2% 2 886 2% 2 608
Total 100% 144 062 100% 132 974
Geographic information
The Company is delivering services to its subsidiaries in dierent countries in the Nordic, Baltic and
Poland, Germany, UK and Ireland, and information regarding revenue based on geography is provided
above.
51
Note 4 – Other operating expenses
(NOK 1000) 2021 2020
External services 53 372 56 465
IT services and telecom 28 162 26 400
Oce premises 2 356 2 333
Travel and transport 289 375
Postage and freight 37 38
Other expenses 4 788 4 974
Total other operating expenses 89 004 90 585
Auditors fee
(NOK 1000) 2021 2020
Auditor fee 1 850 3 156
Other attestation services 19 -
Fee for tax services - -
Other fees 295 100
Total, excl VAT 2 163 3 256
Note 5 – Other Intangible Assets
Internally
Internally Developed
Licenses and Developed Software Under
(NOK 1000) Software Software Construction Total
Acquisition cost
Accumulated 1 January 2020 25 297 72 264 16 795 114 356
Additions of the year - 1 057 7 866 8 923
Internal AUC reclassified - 13 811 (13 811) -
Accumulated 31 December 2020 25 297 87 132 10 850 123 279
Accumulated 1 January 2021 25 297 87 132 10 850 123 279
Additions of the year - 1 985 7 989 9 974
Disposals and currency eects -20 -25 509 0 -25 530
Internal AUC reclassified 0 -10 238 10 238 0
Accumulated 31 December 2021 25 277 53 369 29 077 107 723
Depreciation
Accumulated 1 January 2020 23 219 41 743 - 64 961
This year's ordinary amortisation 909 12 903 - 13 812
Disposals of amortisation and currency eects - - -
Accumulated 31 December 2020 24 128 54 645 - 78 773
Accumulated 1 January 2021 24 128 54 645 - 78 773
This year's ordinary amortisation 671 13 968 0 14 639
Disposals of amortisation and currency eects 0 -25 088 - -25 088
Accumulated 31 December 2021 24 799 43 525 - 68 324
Book value at 31 December 2020 1 169 32 486 10 850 44 506
Book value at 31 December 2021 478 9 844 29 077 39 399
Useful life 5-10 years 5 years N/A
Depreciation method linear linear
Note 3 – Personnel expenses
(NOK 1000) 2021 2020
Salary 40 242 27 652
Social security tax 6 885 5 134
Pension costs (see note 12) 1 573 1 272
Capitalized development expenses (9 769) (8 364)
Other expenses (2 485) 6 948
Total personnel costs 36 447 32 641
2021 2020
Average number of employees 25 24
Average number of FTE 24 22
See note 13 for transactions with related parties.
52
Note 7 – Income taxes
Income Tax Expense:
(NOK 1000) 2021 2020
Tax paid & payable - 491
Changes in deferred taxes (1 514) (10 813)
Changes in previous years (498) -
Tax expense/income (2 011) (10 322)
Tax Payable in Balance Sheet:
(NOK 1000) 2021 2020
Ordinary profit before tax (6 847) (5 498)
Permanent dierences (32) 1 086
Dividend from subsidiaries - (42 506)
Change in temporary dierences 2 889 3 132
Basis for tax payable (3 991) (43 786)
Tax payable (878) (9 633)
Reconciliation of Eective Tax Rate:
(NOK 1000) 2021 2020
Ordinary profit before tax* (6 847) (5 498)
Calculated tax (1 506) (10 793)
Group contribution (37 275) (43 560)
Other permanent dierences (505) 239
Group contribution 8 200 (9 351)
Dividend subsidiaries - 9 583
Tax expense (2 011) (10 322)
Eective tax rate 29% 21%
Specification of Tax Eects of Temporary Dierences:
(NOK 1000) 2021 2020
Property, plant, equipment and immaterial assets (5 422) (4 335)
IFRS amortization loan 3 155 4 957
Tax losses carry forward (101 976) (95 458)
Total temporary dierences (104 243) (94 836)
Total deferred tax assets (22 934) (21 001)
Total deferred tax liability - 137
Net deferred tax (22 934) (20 864)
*Exclusive group contribution from subsidiaries
Note 6 – Property, plant and equipment
(NOK 1000) Furniture and Fixtures IT-equipment Total
Acquisition cost
Accumulated 1 January 2020 3 001 891 3 892
Accumulated 31 December 2020 3 001 891 3 892
Accumulated 1 January 2020 3 001 891 3,892
Additions of the year 24 - 24
Disposals of the year (22) (395) (416)
Accumulated 31 December 2020 3 003 496 3 449
Depreciations
Accumulated 1 January 2020 2 865 412 3 278
This year's ordinary depreciation 58 252 310
Accumulated 31 December 2020 2 923 665 3 588
Accumulated 1 January 2021 2 923 665 3 588
This year's ordinary depreciation 46 188 233
Disposals of the year (22) (395) (416)
Accumulated 31 December 2021 2 947 458 3 405
Book value at 31 December 2020 77 228 305
Book value at 31 December 2021 55 40 95
Useful life 5 years 3-6 years
Depreciation method linear linear
53
Note 9 – Other Short-Term Receivables
(NOK 1000) 2021 2020
Receivables group companies 113 830 97 731
Other receivables 1 213 8
Total other short-term receivables 115 044 97 739
Note 10 – Cash and Cash Equivalents
(NOK 1000) 2021 2020
Cash in hand and at bank - unrestricted funds 146 916 8 590
Deposit accounts - guarantee rent obligations - 145
Employee withheld taxes - restricted funds 1 549 1 639
Cash and cash equivalents in the balance sheet 148 466 10 373
Note 11 – Share Capital, Shareholder Information and Dividend
Shares 2021 2020
Shares - nominal value NOK 0.10 22 135 279 20 122 979
Total number of shares 22 135 279 20 122 979
The nominal value of the share is NOK 0.10.
All the shares in the Company have equal voting rights and are entitled to dividend.
The computation of earnings per share is shown in note 8 in the consolidated financial statement.
Note 8 – Overview of subsidiaries
Company Consolidated Location Ownership
Zalaris HR Services Danmark A/S 15.07.00 Copenhagen 100%
Zalaris HR Services Sverige AB 19.04.01 Stockholm 100%
Zalaris HR Services Finland OY 26.09.03 Helsinki 100%
Zalaris HR Services Norway AS 30.11.06 Lødingen 100%
Zalaris HR Services Latvia AS 27.12.06 Riga 100%
Zalaris HR Services Lithuania UAB 08.05.13 Vilnius 100%
Zalaris HR Services Poland Sp Z.o.o 26.04.13 Warsawa 100%
Zalaris HR Services Estonia 04.06.13 Tallinn 100%
Zalaris HR Services India 01.10.15 Chennai 100%
Zalaris HR Services Ireland Ltd 01.02.18 Dublin 100%
Zalaris Deutschland AG 18.05.17 Henstedt-Ulzberg 100%
Zalaris Consulting UK Ltd 26.09.17 London 100%
Indirect owned subsidiaries
ba.se service & consulting GmbH 03.08.21 Hagen 100%
Zalaris Switzerland AG 18.05.17 Zürich 100%
Company OtherEquity* Share Capital in Local Number Normal Value Carrying
(NOK 1000) Local Currency Currency of Shares Per Share Value
* Other Equity is converted subordinated loan to subsidiary to equity.
Zalaris HR Services Danmark A/S 500,0 DKK 5 000 100,0 5 390
Zalaris HR Services Sverige AB 300,0 SEK 3 000 100,0 9 650
Zalaris HR Services Finland OY 8,0 EUR 1 000 8,0 67
Zalaris HR Services Finland OY 2 450 EUR 21 783
Zalaris HR Services Norway AS 100,0 NOK 1 000 000 0,1 252
Zalaris HR Services Latvia AS 2,8 EUR 2 000 1,4 -7
Zalaris HR Services Lithuania UAB 10,0 EUR 1 000 10,0 0
Zalaris HR Services Poland Sp Z.o.o 5,0 PLN 100 50,0 12 016
Zalaris HR Services Estonia 2,5 EUR 2 500 1,0 2 418
Zalaris HR Services India 40 000,0 INR 4 000 000 10,0 5 722
Zalaris France SAS 1,0 EUR 1 000 1,0 10
Zalaris HR Services Ireland Ltd 0,1 EUR 100 1,0 0
Zalaris Deutschland AG 54,6 EUR 54 552 1,0 191 198
Zalaris Consulting UK Ltd 10,1 GBP 10 100 1,0 23 049
Total 271 548
Restatement of 2020 figures
In the 2020 financial statements the carry-
ing value of the investment in the subsidiary
Zalaris UK Ltd was NOK 81.6 million as of 31
December 2020. It has subsequently been
identified that the dividend received by Zalaris
ASA from Zalaris UK Ltd, following the sale of
certain assets from Zalaris UK Ltd to Zalaris
Consulting UK Ltd in 2020, and other internal
adjustments as part as merger process, should
have been booked against the investment in
Zalaris UK Ltd. The correct carrying value of
the investment in Zalaris UK Ltd should have
been NOK 9.2 million as of 31 December
2020. Total carrying value of our investment in
subsidiaries before this impairment was NOK
353.1 million as of 31 December 2020, which
have been corrected to NOK 280.7 million in
the 2021 financial statements.
54
Note 13 – Transactions with
Related Parties
a) Purchase from Related Parties
Related Party Transaction 2021 2020
Rayon Design AS
1
Management Services 2 274 2 371
Total 2 274 2 371
Accounts payables 110 66
1) Norwegian Retail AS, a company owned 100% by Hans-Petter Mellerud, CEO of Zalaris ASA, owns 40% of the shares in Rayon Design AS.
The Major Shareholders at 31.12.2021 are:
Shareholder Number of Shares % of Total Type of Account
Norwegian Retail AS 2 891 482 13,06% Ordinary
Skandinaviska Enskilda Banken AB 2 158 278 9,75% Nominee
Verdipapirfondet Alfred Berg Gamba 2 020 848 9,13% Ordinary
J.P. Morgan Bank Luxembourg S.A. 1 374 925 6,21% Nominee
State Street Bank And Trust Comp 1 150 456 5,20% Nominee
Vestland invest As 910 659 4,11% Ordinary
Vpf Norge Selektiv 719 955 3,25% Ordinary
Verdipapirfondet Nordea Kapital 689 340 3,11% Ordinary
Verdipapirfondet DNB SMB 642 759 2,90% Ordinary
J. P. Morgan Bank Luxenbourg S.A. 613 406 2,77% Nominee
Verdipapirfondet Nordea Avkastning 505 705 2,28% Ordinary
Verdipapirfondet Nordea Norge Plus 466 816 2,11% Ordinary
Verdipapirfondet Delphi Norge 321 965 1,45% Ordinary
Skandinaviska Enskilda Banken Ab 300 000 1,36% Nominee
Ølja As 299 650 1,35% Ordinary
Næringslivets Hovedorganisasjon 283 217 1,28% Ordinary
Deutsche Bank Aktiengesellschaft 270 055 1,22% Nominee
Taconic As 262 040 1,18% Ordinary
Sober As 238 718 1,08% Ordinary
Shares owned by the company 282 493 1,28%
Others 5 732 512 25.90%
Total 22 135 279 100.00%
Dividend
A dividend of NOK 1,- per share was paid to the
shareholders of the Company during 2021.
Note 12 – Pensions
The Company is required to have an occu-
pational pension scheme in accordance with
the Norwegian law on required occupational
pension (“lov om obligatorisk tjenestepens-
jon”). The Group’s pension schemes satisfy
the requirements of this law, and represents a
defined contribution plan, with disability
coverage. At the end of year there were 24
participants (25) in this defined contribution
plan.
Expenses equals this year’s calculated contri-
bution and amounts to NOK 1.6 mill (NOK 1.3
mill). The scheme is administered by Store-
brand.
For further information see the annual remu-
neration report published on www.zalaris.com.
55
Note 14 – Financial Instruments
2021
Financial Instruments by Category Loans and Liabilities at Total Book
(NOK 1000) Receivables Amortized Cost Value
Financial assets
Trade accounts receivable - -
Other short-term receivables to group company 113 830 113 830
Other short-term receivables 1 213 1 213
Cash and cash equivalents 148 466 148 466
Total 263 509 - 263 509
Financial liabilities
Derivatives, Interest rate swaps 249 249
Borrowings, long term 346 806 346 806
Borrowings, short term, revolving credit 133 784 133 784
Other short-term debt to group company 4 845 4 845
Trade accounts payables 4 479 4 479
Other short-term debt 15 911 15 911
Total - 249 505 826 506 075
2020
Financial Instruments by Category Loans and Liabilities at Total Book
(NOK 1000) Receivables Amortized Cost Value
Financial Assets
Trade accounts receivable - -
Other short-term receivables to group company 97 731 97 731
Other short-term receivables 8 8
Cash and cash equivalents 10 373 10 373
Total 108 112 - 108 112
Financial liabilities
Derivatives, Interest rate swaps 880 880
Borrowings, long term 362 023 362 023
Borrowings, short term, revolving credit 67 384 67 384
Other short-term debt to group company 9 226 9 226
Trade accounts payables 9 349 9 349
Other short-term debt 10 236 10 236
Total - 880 458 218 459 098
Fair value of financial instruments
The Company classifies fair value measure-
ments by using a fair value hierarchy which
reflects the importance of the input used in
the preparation of the measurements. The fair
value hierarchy has the following levels:
Level 1: Non-adjusted quoted prices in active
markets.
Level 2: Other data than the quoted prices
included in Level 1, which are observable for
assets or liabilities either directly, i.e. as prices,
or indirectly, as derived from prices.
Level 3: Data for the asset or liability which is
based on unobservable market data.
The fair value of the interest rate swap is
determined by discounting expected future
cash flows to present value through the use of
observed market interest rates from Nordea.
The fair value measurement for interest swap
at period-end 2020 using Level 2 is NOK 0.2
million.
It is assessed that the carrying amounts of
financial instruments recognized at amortized
cost in the financial statements approximate
their fair values. The assessment is based on a
judgment that dierence between interestrate
at year-end compared to draw down. Value
assessment is level 3 in the fair value hierarchy.
Financial risk management
Overview
The Company has some exposure to risks
from its use of financial instruments, including
credit risk, liquidity risk, interest rate risk and
currency risk. This note presents information
about the Company’s exposure to each of the
above-mentioned risks, and the Company’s ob-
jectives, policies and processes for managing
such risks. At the end of this note, information
regarding the Company’s capital management
is provided.
Market Risk from Financial Instruments
Market risk is the risk that the fair value of
future cash flows of a financial instrument will
fluctuate because of changes in market prices.
Market prices comprise three types of risk:
market risk (e.g. interest rate risk and currency
risk), commodity price risk and other price risk.
The Company’s financial instruments are main-
ly exposed to interest rate and currency risks.
Interest Rate Risk
Interest rate risk is the risk that the fair value or
future cash flows of a financial instrument will
fluctuate because of changes in market inter-
est rates. The Company’s exposure to the risk
of changes in market interest is managed by
the mix of fixed and variable rate loans. As de-
scribed above, the Company has entered swap
arrangements to hedge its interest exposures
arising from its debt obligations (ref. Note 16).
56
Foreign Currency Risk
Foreign currency risk is the risk that the
fair value or future cash flows of a financial
instrument will fluctuate because of changes
in foreign exchange rates. The Company is
primarily exposed to foreign exchange risk
arising from various currency exposures with
respect to the USD, EUR and GBP in relation
to its debt obligations as well as from certain
commercial transactions. As described above,
the Company has entered swap arrangements
to hedge its currency exposures arising from
its debt obligations (ref. Note 16).
For operational transactions denominated in
foreign currencies, the Company’s policy is to
exchange into foreign currency as required on
a spot basis.
Foreign currency risk is the risk that the fair val-
ue or future cash flows of a financial instrument
will fluctuate because of changes in foreign
exchange rates. The Company is primarily
exposed to foreign exchange risk arising from
various currency exposures with respect to
the USD, EUR and GBP in relation to its debt
obligations as well as from certain commercial
transactions.
For operational transactions denominated in
foreign currencies, the Company’s policy is to
exchange into foreign currency as required on
a spot basis.
As of 31 December 2021, the Company has a
bond loan listed on the Oslo Stock Exchange.
Per 31 December the Company had an
unrealized currency loss amounting to NOK
25.1 million related to this loan. Otherwise, the
Group has limited exposure to currency risk
from assets and liabilities recognized as of
31 December 2021 that are denominated in
currencies.
Credit Risk
The carrying amounts of financial assets
represents the Company’s maximum credit
exposure. The counterparty to the cash and
cash equivalents and deposits banks which are
assessed to be solid.
Capital management
A key objective in relation to capital manage-
ment is to ensure that the Company maintains
a sucient capital structure in order to support
its business development and to maintain a
strong credit rating. The Company evaluates
its capital structure in light of current and
projected cash flows, potential new business
opportunities and the Group’s financial commit-
ments. In order to maintain or adjust the capital
structure, the Company may issue new shares
or obtain new loans.
Per 31 December 2021
Less than 3 to 12 1 to 5
(NOK 1000) 3 Months Months Years Total
Borrowings, long term 346 806 346 806
Borrowings, short term 133 784 133 784
Trade creditors and other short term liabilities 4 479 20 756 25 235
Total liabilities 4 479 154 540 346 806 505 826
Less than 3 to 12 1 to 5
(NOK 1000) 3 Months Months Years Total
Borrowings, long term 362 023 362 023
Borrowings, short term 67 384 67 384
Trade creditors and other short term liabilities 9 349 19 462 28 811
Total liabilities 9 349 86 846 362 023 458 218
Per 31 December 2020
Note 15 – Financial Items
(NOK 1000) 2021 2020
Interest income on bank accounts and receivables 2 128 2 310
Group contribution 37 275 43 560
Dividend - 48 726*
Foreign exchange gains 1 874 1 939
Finance income 41 277 96 536
Interest expenses 17 669 19 541
Foreign exchange loss 2 545 2 155
Impairment subsidiaries - 72 437
Other financiel expenses 1 797 4 151
Finance expenses 22 011 98 283
Unrealised foreign currency gain/(loss) 15 867 (27 108)
Net financial items 35 133 (28 855)
*2020 restated
57
The costs recognized for the share-based payment plan are shown in the following table:
(NOK 1000) 2021 2020
Restricted Stock Units 16 416 2 495
Employee share options 318 696
Accrued social security costs 1 444 1 145
Total recognized costs 18 177 4 335
Accrued payroll tax at the end of the period 643 1 636
Note 17 – Other Short-Term Debt
(NOK 1000) 2021 2020
Wages, holiday pay and bonus 6 262 5 076
Accrued expenses and other current liabilities 7 698 4 765
Total 13 960 9 841
Note 16 – Interest-Bearing Loans and Borrowings
2021
(NOK 1000) Interest Balance Sheet
Financial Institution Agreement Maturity Duration Rate Non-Current Current Total
Oslo Stock Exchange* Bond loan Sept 2023 5 years see below 346 806 346 806
Nordea Bank Norge ASA Group cash pool - 133 784 133 784
Interest-bearing debt and borrowings 346 806 133 784 480 590
2020
(NOK 1000) Interest Balance Sheet
Financial Institution Agreement Maturity Duration Rate Non-Current Current Total
Oslo Stock Exchange* Bond loan Sept 2023 5 years see below 362 023 362 023
Nordea Bank Norge ASA Group cash pool - 67 384 67 384
Interest-bearing debt and borrowings 362 023 67 384 429 407
* Bond loan, Oslo Stock Exchange
The Company secured a EUR 35 million bond
loan registered on the Oslo Stock Exchange in
September 2018. The bond has maturity on 29
September 2023 with no principal payments
before maturity. Interest rate to be paid is 3
months Euribor +4.75%.
The Company has deferred NOK 7.5 million
in issuing costs (2 % of the bond loan), which
are being amortized over the term of the loan.
The balance at 31 December 2021 is NOK 3.1
million.
The Company has entered a swap arrange-
ment to hedge its interest risk exposures
arising from this debt obligation.
Assets Pledged as Security
Shares in all subsidiaries of Zalaris ASA have
been pledged as guarantee for the bond loan.
In addition, assets in the subsidiaries Zalaris
HR Services Norway AS, Zalaris HR Services
Sweden AB, Zalaris HR Services Denmark AS,
Zalaris HR Services Finland OY and Zalaris
Deutschland AG have been pledged as guar-
antees for the loan.
Guarantees and Commitments
There are not issued any guarantees from the
parent company on behalf of the Company
against third parties. Nordea has pledged guar-
antee of NOK 7 mill against assets in Zalaris
ASA as security for bank deposits.
The Company is a certified SAP BPO partner.
SAP BPO Partners oer the full stack of busi-
ness process outsourcing services based on
SAP HCM business applications. Certified pro-
viders undergo a rigorous assessment of their
delivery and support capabilities every two
years by SAP’s outsourcing partner certification
group. The agreement involves commitments
for future purchases of licenses and mainte-
nance fees amounting to NOK 25.9 million.
Zalaris ASA (the "Company") operates a
share-based payment plan for members of the
executive management and key employees.
Note 18 – Share-based payment plan
The share-based payment plan consists of a
share option program and restricted stock units
("RSUs").
58
The following table illustrates the number of options outstanding and their weighted average exercise price (WAEP): :
2021 2020
Number Number
of Options WAEP (NOK) of Options WAEP (NOK)
Outstanding at the beginning of the period 618 000 38.55 333 000 34.31
Granted 971 500 59.59 280 000 41.97
Terminated (70 000) 41.41 - -
Outstanding at the end of the period 1 519 500 51.87 613 000 37.81
Exercisable at the end of the period - - - -
The fair value of the RSUs is the weighted average share price at grant date:
The Weighted Average Assumptions Used 2021 2020
Expected life of RSUs (year) 3.00 2.76
Weighted average share price 66.00 36.70
Restricted Stock Units
The general meeting of Zalaris ASA held on
18 May 2020, gave the Board the authority to
grant up to 135,000 RSUs annually to executive
management, with matching requirements.
Under this plan the executive management
may convert up to 50% of approved bonuses
to RSU’s at a 100% higher value (e.g. NOK 50k
of annual bonus is converted to NOK 100k
worth of RSUs). The purpose of the RSUs is to
further align the interests of the Company, its
subsidiaries and its shareholders by providing
long term incentives in the form of an own
investment in the Company done by the partici-
pant and matching awards (the RSUs).
The granted RSUs have a three-year vesting
period. The RSUs require the employee to pur-
chase the required number of matching shares
at the grant date and hold these until the
RSUs are fully vested. Non-vested RSUs are
cancelled when the employee has given notice
of termination and are treated as forfeited. If
for some reason the Company is not holding a
sucient number of shares at the relevant set-
tlement date, any RSUs awarded and settled
under the plan shall be settled by a cash bonus
payment equal to the fair market value per
share on the date of settlement multiplied by
the number of RSUs.
The Company will do its utmost to settle the
granted RSUs as shares, and thus accounts for
the RSUs as an equity-settled plan.
A total of 18 401 RSUs were granted in 2021, and the following table illustrates the number of RSUs outstanding:
Number of RSUs 2021 2020
Outstanding at the beginning of the period 307 152 294 925
Granted 18 041 12 227
Forfeited (199 925) -
Outstanding at the end of the period 125 268 307 152
Share Option Program
The general meeting of Zalaris ASA held on
18 May 2020, gave the Board the authority to
grant up to 250,000 employee share options
annually for a three-year period. The strike
price is based on the weighted average share
price for seven days preceding the grant. 60%
of the options granted vest after 36 months,
while the remaining 40% vest after 60 months.
Each share option corresponds to one share.
Employee share options are not subject to any
performance-based vesting conditions. The
Company has the option to settle the share
options in cash, however they have no legal
or constructive obligation to repurchase or
oer cash-settlements for options granted.
Non-vested share options are cancelled when
the employee has given notice of termination
and are treated as forfeited. A total of 971,500
options were granted in 2021. The options
were granted at an average exercise price of
NOK 59.59.
The fair value of the share options is estimat-
ed at the grant date using the Black-Scholes
option pricing model, taking into account the
terms and conditions upon which the share op-
tions were granted. The weighted average fair
value of share options granted to employees
during the period was NOK 17.35 per option
(NOK 9.05). The following table lists the key
inputs to the model used for the year ended 31
December:
59
Historic volatility is assumed to be a reasona-
ble indicator of expected volatility. Expected
volatility is therefore defined as historic vola-
tility. The risk-free interest rate used for share
option calculations is collected as of grant date
from Norges Bank. Where there is no exact
match between the term of the interest rates
and the term of the share options, interpolation
is used to estimate a comparable term.
Annual Share Purchase Program
The Company completed an annual share
purchase program for employees in Q4 2021.
As part of the program, Zalaris has sold 20,777
own shares to employees at a subscription price
of NOK 43.24 per share. The shares were trans-
ferred to the employees in December 2021.
The subscription price was based on the vol-
ume-weighted average share price in the period
between 18 November to 30 November 2021,
less a 20% discount. To receive the discount the
shares have a 12 months lock-up period.
See Executive Remuneration Policy for detailed
information.
There have been no events after the balance
sheet date which have had a material eect on
the issued accounts.
Note 19 – Events after the
balance sheet date
The following table lists the key inputs to the model used for the year ended 31 December:
The Weighted Average Assumptions Used 2021 2020
Expected volatility (%) 43.17 40.43
Risk-free interest rate (%) 0.92 0.42
Expected life of options (year) 3.0 3.8
Weighted average share price 58.70 39.05
60
"Helping visualizing our
individual CO2 footprint
related to commuting and
business-related travel with
our Peoplehub apps is one way
that we at Zalaris can support
solving our climate challenge."
-
Hilde Karlsmyr
CHRO at Zalaris
61
Corporate Governance
Zalaris ASA’s (“Zalaris” or the “Company”)
corporate governance policy is based on,
and complies with, the Norwegian Code of
Practice for Corporate Governance (the “Code
of Practice”). Good corporate governance will
strengthen confidence in Zalaris and help to
ensure the greatest possible value creation
over time, in the best interests of shareholders,
employees and other stakeholders. The objec-
tive of the Code of Practice is that companies
listed on Norwegian-regulated markets shall
practice corporate governance that regulates
the division of roles between shareholders, the
Board of Directors (or the “Board”) and executive
management more comprehensively than is
required by legislation.
Zalaris ASA is incorporated and registered in
Norway and is subject to Norwegian law. Accord-
ing to the Accounting Act § 3-3b, the Company is
obliged to report on its principles and practices
of corporate governance. In addition, the Oslo
Stock Exchange requires an annual statement
on compliance with the Company’s corporate
governance policy, in accordance with NUES
the Norwegian Code of Practice for Corporate
Governance (Norwegian: “Norsk anbefaling for
eierstyring og selskapsledelse”), issued by the
Norwegian Corporate Governance Board, most
recently revised on 14 October 2021.
The statement for fiscal year 2021 is based on
the disposal in the Accounting Act § 3-3b, as
well as the disposal for Corporate Governance
Policy for Zalaris ASA, and was adopted by the
Board of Directors on 26 April 2018:
1. Zalaris’ corporate governance is in compli-
ance with the Code of Practice.
2. The Code of Practice is available on www.
nues.no
3. The Board of Directors has below made
a statement of corporate governance and
comments on any deviations are made
under each chapter.
4. In chapter 10, the main elements of Zalaris’
risk and internal control in the financial
reporting process are described.
5. Zalaris has no shareholder decisions that
expand or dier from the Norwegian Public
Limited Liability Companies Act, chapter 5.
6. The composition of the Board, the remuner-
ation committee, the nomination committee
and the audit committee are described in
chapter 7, 8 and 9. The main elements of
their instructions and guidelines are de-
scribed in chapter 8 and 9.
7. Shareholder decisions that regulate the
election period for the Board of Directors are
described in chapter 8.
8. Shareholder decisions and Board of Direc-
tors authorizations for issue of new shares
or purchase of own shares are described in
chapter 3.
1. Statement on Corporate
Governance
Zalaris complies with the Code of Practice.
There are no significant dierences between
the code and how it is abided by at Zalaris. The
Board shall ensure that the Company always
has sound corporate governance. Zalaris
provides an overall review of the Company’s
corporate governance in the Company’s annual
report (herein). In addition, a description of the
most important corporate governance principles
of the Company shall be made available for
external interest groups on the Company’s
website.
The annual review of the Company’s compli-
ance with the Code of Practice was adopted
on 7 April 2022.
2. Business
Zalaris ASA and its subsidiaries are providing
full-service outsourcing and consulting services
related to advisory, sales, implementing and
operating processes for the HR (Human Re-
sources) function as payroll, payroll accounting,
personnel administration, travel expenses,
statutory leave, recruiting, performance man-
agement, learning process administration etc.,
and the sale of related software, and to own
shares in other companies and other activities
related to this.
Zalaris focuses on high eciency and high
customer satisfaction and a close relationship
to its customers, which includes local service
centres in all countries in which we operate,
complemented with oshoring, automation
of processes, and utilization of cloud and AI.
Local personnel with high competence in HR
function processes ensure successful long-
term relationships with our customers.
A more detailed description of our services is
available on Zalaris’ website, www.zalaris.com.
The Board of Directors has adopted a yearly
plan focusing on its work to develop objectives,
strategy and risk profiles for the Company so
that Zalaris creates value for shareholders
in a sustainable manner, and to oversee the
implementation of this once a year. In addition,
the Board of Directors executes supervision to
ensure that the Company reaches its defined
targets and that the Company has satisfactory
risk management.
Considerations of sustainability are closely
linked with the Company’s activities and value
creation. Please see Zalaris’ ESG report, which
is also available on www.zalaris.com.
Corporate ethics are about how we behave
towards each other and the world around us.
It relates to human rights, employee rights
and social matters, the external environment,
the prevention of corruption, the working
62
The authorization was limited until the earliest
occurring date of either the ordinary general
meeting in 2022 or 30 June 2022.
Authorization to Purchase Own Shares
The Board of Directors’ recommendation is that
its authority to buy back its own shares shall be
granted for a period limited to the next annual
general meeting.
At Zalaris’ annual general meeting on 20 May
2021, the Board of Directors was granted an
authorization to acquire shares with a total
nominal value up to NOK 201,230. The highest
amount which can be paid per share is NOK
160 and the lowest is NOK 0.10. The Board
of Directors is authorized to acquire and
sell shares as the Board finds it appropriate.
Acquisition can nevertheless not be done by
subscription for shares.
The authorization was limited until the earliest
occurring date of either the ordinary general
meeting in 2022 or 30 June 2022.
4. Equal Treatment of
Share holders
General Information
Zalaris has one class of shares. Each share car-
ries one vote, and all shares carry equal rights,
including the right to participate in general
meetings. All shareholders shall be treated on
an equal basis, unless there is just cause for
treating them dierently.
Share Issues without Pre-emption Rights for
Existing Shareholders
Any decision to deviate from the pre-emption
rights of existing shareholders to subscribe for
shares in the event of an increase in share capital
shall be justified. Where the Board resolves
to carry out an increase in share capital and
deviate from the pre-emption rights of existing
shareholders on the basis of an authorization
granted to the Board, the justification shall
be publicly disclosed in a stock exchange
announcement issued in connection with the
increase in share capital.
environment, equal treatment discrimination,
and environmental impact. Everyone associated
with Zalaris shall comply with the rules and
guidelines that build on Zalaris’ basic values.
At Zalaris, we want everyone to contribute to a
sound corporate culture.
Zalaris has issued a separate Remuneration
Report which is available on www.zalaris.com.
Zalaris has defined a Code of Conduct which
is the foundation of our corporate culture and
defines the core principles and ethical stand-
ards by which we create value in our Company.
The Code of Conduct valid for the Com-
pany and its subsidiaries is available on
www.zalaris.com.
3. Equity and Dividends
Equity
Zalaris believes in further profitable growth in
the years to come. To reach this, it is essential
that the Company has a solid capital structure
and liquidity.
Zalaris’ equity per 31 December 2021 was NOK
207.3 million equal to 25.0% equity ratio.
The cash and cash equivalent per 31 December
2021 was NOK 176.2 million.
The Board of Directors considers the Compa-
ny’s capital structure as satisfactory.
Dividend Policy
The Board shall establish a clear and predictable
dividend policy as the basis for the proposals on
dividend payments that it makes to the general
meeting. The dividend policy shall be disclosed
on the Company’s IR website.
Authorizations to Increase Share Capital
Authorizations granted to the Board to increase
the Company’s share capital shall be restricted
to defined purposes. If the general meeting is
to consider authorizations to the Board for the
issuance of shares for dierent purposes, each
authorization shall be considered separately by
the general meeting. Authorizations granted to
the Board shall be limited in time to no longer
than until the next annual general meeting.
At Zalaris’ annual general meeting on 20 May
2021, pursuant to Section 10-14 of the Norwegian
Public Limited Companies Act, the Board of Di-
rectors was granted an authorization to increase
the Company’s share capital to NOK 201,230.
The shareholders’ preferential rights pursuant
to Section 10-4 of the Norwegian Public Limited
Companies Act can be deviated from.
The authorization can be used at the Board’s
discretion for the purpose of realizing the
Company’s growth ambitions and for general
corporate purposes.
63
prepared, which shall, insofar as this is possible,
be formulated in such a manner that the
shareholder can vote on each item that is to be
addressed and vote for each of the candidates
that are nominated for election.
The general meeting should be attended by
representatives from the Board. The chairman
of the Nomination Committee, the Remuneration
Committee and the Audit Committee may attend
whenever practical. In addition, as a minimum,
the CEO and CFO from the management team
of Zalaris, will attend the general meeting.
The Board of Directors decides the agenda of
the general meeting. The main issues of the
agenda follow the requirements in the law.
Each general meeting appoints a chairman.
The Code of Practice recommends that an
independent person is appointed to chair the
general meeting. Considering the Company’s
organization and shareholder structure, the
Company considers it unnecessary to appoint
an independent chairman for the general meet-
ing, and this task will, for practical purposes,
normally be performed by the chairman of the
Board. However, the need for an independent
chairman is evaluated in advance of each
general meeting based on the items to be
considered at the general meeting.
The minutes from the annual general meeting
will be published on the Company’s websites
and on the website of the Oslo Stock Exchange.
7. Nomination Committee
The Company shall have a nomination com-
mittee comprising such number of persons
as determined by the general meeting of the
Company from time to time — and whose
members shall be appointed by a resolution of
the general meeting, including the Chairman
of the committee. The general meeting shall
determine the remuneration of the nomination
committee and shall stipulate guidelines for
the duties of the nomination committee. The
nomination committee should not include the
Company’s CEO or any other any executive
personnel or any member of the Company’s
Board of Directors.
The nomination committee’s duties are to
propose candidates for election to the Board
and to propose remuneration to be paid to
such members. The nomination committee shall
justify its recommendations. The Company shall
provide information of the nomination commit-
tee and any deadlines for submitting proposals
to the committee.
The general meeting on 20 May 2021 elected
Bård Brath Ingerø (Leader), Ragnar Horn and
Sven Thoren to the nominating committee for a
period until the annual general meeting in 2022.
Transactions in Own Shares
Any transactions the Company carries out in its
own shares shall be carried out either through
the Oslo Stock Exchange, or at prevailing stock
exchange prices if carried out in another way.
If there is limited liquidity in the Company’s
shares, the Company shall consider other ways
to ensure equal treatment of all shareholders.
5. Freely Negotiable Shares
Zalaris shares are freely negotiable and there
are no limitations of the negotiability in Zalaris’
Articles of Associations. There are no limitations
for any party’s ability to own, trade or vote for
shares in Zalaris.
6. General Meetings
Exercising Rights
Zalaris facilitates that as many shareholders
as possible may participate in the Company’s
general meetings and that the general meet-
ings are an eective forum for the views of
shareholders and the Board.
The notice and the supporting documents and
information on the resolutions to be considered
at the general meeting shall be available on
the Company’s website no later than 21 days
prior to the date of the general meeting. The
notice and agenda for the meeting will be sent
per post to all shareholders with a known ad-
dress in Verdipapirsentralen (VPS) no later than
21 days prior to the date of the general meeting.
According to Zalaris’ Articles of Associations, it
is sucient that the supporting documents and
information on the resolutions to be considered
are available on the Company’s website. A
shareholder may, nevertheless, demand to
receive the documents concerning matters that
are to be discussed in the general meeting.
The resolutions and supporting documenta-
tion, if any, shall be suciently detailed and
comprehensive to allow shareholders to under-
stand and form a view on matters that are to be
considered at the meeting.
The deadline for shareholders to give notice of
their attendance at the general meeting will be
set as close to the date of the general meeting
as possible. The Board and the person who
chairs the general meeting shall ensure that the
shareholders have the opportunity to vote sepa-
rately on each candidate nominated for election
to the Company’s Board and committees.
Shareholders who cannot be present at the
general meeting must be given the opportunity
to vote by proxy or to participate by using
electronic means. The Company will provide
information on the procedure for attending
by proxy and nominate a person who will be
available to vote on behalf of shareholders as
their proxy. In addition, a proxy form will be
64
Conflicts of interest and disqualifications
The Board’s rules of procedure states that a
member of the Board, or the CEO, may not
participate in the discussion or decision of
issues of such special importance to the person
in question, or to any closely related party of
said person, that the Board member must be re-
garded as having a distinct personal or financial
interest in the matter. Zalaris’ Code of Conduct
also covers conflict of interest and how this
should be dealt with, and the code applies to all
the board members and employees of Zalaris.
There were no transactions that were material
between the Group and its shareholders, board
members, executive management, or related
parties in 2021.
The duty and responsibilities of the Board of
Directors are defined by applicable law, Zalaris’
Articles of Associations and the authorizations
and instructions given by the General Assembly.
The Board of Directors discusses all relevant
matters related to Zalaris’ activities of signifi-
cance or of special nature. In 2021, the Board
of Directors held 13 board meetings.
In accordance with Norwegian Public Limited
Companies Act § 6-13, rules of procedure were
adopted on 25 April 2014 to set out more
detailed provisions regarding the duties and
working procedures of the Board of Directors
and CEO of Zalaris ASA.
The Chairman is responsible for ensuring that
the Board’s work is performed in an ecient
and proper manner and in accordance with
applicable law.
Rules of Procedure for CEO
The Board of Directors is responsible for the
appointment of CEO of Zalaris. The Board of
Directors also defines instructions, authorizations
and conditions for CEO.
Audit Committee
The audit committee shall consist of between
two and four members of the Board. The com-
mittee shall be composed within the rules set out
in the Norwegian Public Limited Companies Act.
Any committee member may be replaced by the
Board at any time.
The function of the committee is to assist
the Board in overseeing the integrity of the
Company’s financial statements, the Company’s
compliance with legal and regulatory require-
ments, the independent auditor’s qualifications
and independence, and the performance of the
Company’s internal accounting function and
independent auditor.
The committee shall meet as often as it shall
determine, but not less frequently than in
connection with the interim financial report
(four times per year), preparation of the annual
report and the annual budget. The committee
may request any ocer or employee of the
8. Board; Composition and
Independence
Board Composition
According to the Articles of Associations for
Zalaris ASA, the Board of Directors shall consist
of three to ten members.
At the end of 2021, the Zalaris’ Board of Directors
consisted of six members — three women and
three men. The CEO of Zalaris is not part of the
Board.
The Board of Directors in Zalaris has broad
representation from countries in the Nordic
region and Germany, and experience from
dierent industries like IT, finance, industrial
and consulting, as well as competencies within
organization, management, finance, HR and
marketing.
A presentation of the Board of Directors is
available on Zalaris’ website, www.zalaris.com.
Board Independency
The composition of the Board is such that
it can attend to the common interests of all
shareholders and meet Zalaris’ need for
expertise, capacity and diversity and that it can
act independently of the Company’s executive
management and material business connec-
tions. All members of the Board are independent
of the Company’s major shareholders, defined
as a shareholder that controls 10% or more of
Zalaris’ shares or votes, with the exception of
Kenth Eriksson, who is connected to entities
which control 10.26% of the issued shares in
Zalaris.
An overview of the shares owned by related
parties as of 31 December 2021, including
board members, is available in the Remunera-
tion report for 2021.
9. The Work of the Board
General
The Board of Directors is responsible for the
management of the Company, including the
appointment of a Chief Executive Ocer to as-
sume the daily management of the Company.
The Board members shall perform their duties
in a loyal manner, attending to the interests of
the Company, and ensure that its activities are
organized in a prudent manner. The Board of
Directors shall adopt plans and budgets and
guidelines applicable to the activities of the
Company. The Board of Directors shall keep
itself informed of the financial position of the
Company and has a duty to ensure that its
corporate accounts and asset management are
subject to satisfactory controls. Members of
the Board and executive personnel must notify
the Board if they have any significant, direct or
indirect, interest in a transaction carried out by
the Company.
65
risk management should also encompass the
Company’s corporate values, ethical guidelines
and guidelines for corporate social responsibility.
The Board carries out an annual review of the
Company’s most important areas of exposure to
risk and its internal control arrangements. The
most important areas are:
Motivation and Training of Employees
One of Zalaris’ focus areas is to ensure
high-quality services to our customers. This
is only possible through ecient processes
and tools and through highly competent
and engaged employees. Thus, Zalaris has
implemented a talent management program to
ensure a good development of highly qualified
personnel in all our departments and functions
of the Company. To constantly follow up with
employee engagement, Zalaris performs
regular employee surveys to uncover improve-
ments needed to achieve a healthy and good
social environment for its employees. Specific
surveys to measure and follow-up the impact
of Coivd-19 was added in 2020, and continued
to be carried out on 2021. High employee
engagement is important to achieving the
Company’s overall targets.
Internal Work Procedures, Instructions and
Authorities
In addition to the instructions which follow each
employment contract, Zalaris has established
internal procedure manuals for employees to be
followed to ensure quality, eciency and trans-
parency in our internal processes. The Company
focuses on the understanding, training and exe-
cution of these defined internal procedures.
Financial Reporting
Zalaris has developed internal procedures for
monthly, quarterly and annual financial reporting
including routines for internal controls. The
audit committee reviews the quarterly report-
ing in separate meetings with the CFO of the
Company. The consolidated financial statement
is prepared in accordance with IAS/IFRS.
The Board receives a monthly report of the
consolidated financial results with comments
on deviation to adopted budget numbers for
the year per business unit. The Company also
prepares financial forecasts for the current
financial year. Any discrepancies are explained
and planned actions to reach financial targets
and/or budgets are presented to the board.
The Company has monthly business reviews
with each business unit responsible in which
financial results for the unit, status on key
performance indicators in the customer deliv-
eries, personnel statistics and risk areas are
presented and commented on by each man-
ager. The target of these business reviews is
to identify risks of deviation in all these areas,
which can cause financial discrepancies to
adopt targets as early as possible to be able
to initiate actions to reduce potential risks at
Company or the Company’s outside counsel or
independent auditor to attend a meeting of the
committee or to meet with any members of, or
any advisor or consultant to, the committee.
The committee may, at its discretion, request
management, the independent auditor, or other
persons with specific competence, including
outside counsel and other outside advisors,
to undertake special projects or investigations
which it deems necessary to fulfil its responsi-
bilities, especially when potential conflicts of
interest with management may be apparent.
The auditor shall annually present a plan for
the auditing work to the audit committee and
have at least one annual meeting with the com-
mittee to go through the Company’s internal
control systems and to identify possible weak-
nesses and potential areas of improvement.
Members of the current audit committee are
Adele Norman Pran (leader), Erik Langaker
and Corinna Schäfer.
Remuneration Committee
The remuneration committee shall consist of at
least two members of the Board, both of whom
shall be independent of the management of
the Company.
The remuneration committee’s primary respon-
sibilities include:
• Assessing the Group’s compensation and
benefits strategy by an annual review of the
organization’s overall compensation plan
(or practices). This includes monitoring the
eectiveness of the design, performance
measures and award opportunities oered by
the Group’s executive compensation plans.
• Overseeing the CEO’s eorts to identifyand
develop potential successors for key execu-
tive positions.
• Reviewing annually the Board including
performance, working methods and practices
and the adequacy of its composition.
The current members of the remuneration
committee are Liselotte Hägertz Engstam
(leader) and Adele Norman Pran.
Annual Evaluations
The Board has conducted an evaluation of its
performance and expertise in 2021.
10. Risk Management and Internal
Control
The Board and the management in Zalaris
emphasise the importance of establishing and
maintaining routines for internal control and risk
management that are appropriate in relation
to the extent and nature of the Company’s
activities. Internal controls and the systems for
66
The main principles for determining salaries
and other remuneration to the CEO and other
executive personnel in Zalaris, is that these
should be competitive. Further, Zalaris should
oer terms that encourage value creation for
Zalaris and its shareholders, that promote loy-
alty to the Company and ensure the executive
personnel and shareholders have convergent
interests.
At Zalaris, the performance-based remuneration
for executive personnel is at a maximum 30% of
the annual fixed salary.
The CEO has a six-month term of termination.
The other executive personnel in Zalaris have
terms of termination between three to six
months. The termination time is valid from end
of the calendar month in which the notice of
termination is communicated in written form.
The CEO is entitled to six months’ severance
pay in case of dismissal from the Company or if
terminating at own will due to a position change
resulting in no longer solely managing the
Zalaris Group.
An overview of the remuneration for executive
personnel for 2021 will be available in a new
remuneration report to be presented to the
annual general meeting in 2022 for an advisory
vote, and the report will also be published on
www.zalaris.com.
13. Information and
Communication
The communication policy of Zalaris is based
on the approach that objective, detailed and
relevant information to the market is essential
for a proper valuation of the Company’s shares.
Thus, the Company has continuous dialogue
with analysts and investors.
All periodic financial reporting is published
according to the adopted guidelines for
companies listed on the Oslo Stock Exchange.
Zalaris strives at all time to publish all relevant
information in a timely, correct, non-discrimi-
natory and ecient manner to the market. All
relevant information will be published on the
Company’s websites and on the website of the
Oslo Stock Exchange.
Zalaris shall give all shareholders the same
information at the same time. In contact with
analysts and investors, the Board of Directors
and the management of the Company shall only
communicate already published information.
The Company has established a communication
channel for the shareholders on its website. All
published information is available on Zalaris’
website. It is also possible for shareholders to
send inquiries through the website.
the earliest. The unit managers, CEO and CFO
participate in these reviews.
Customer Satisfaction
Zalaris’ mission is to enable our clients to maximize
the value of human capital through excellence in
HR processes, and, thus, customer satisfaction is
a focus area for Zalaris. The Company undertakes
customer satisfaction surveys on a regular basis to
have knowledge about customer satisfaction, and
to collect information about improvement areas
to achieve a high level of customer satisfaction
and ensure further profitable growth for Zalaris.
The Company has established clear targets for
customer satisfaction.
11. Remuneration of the Board
The remuneration of the Board is to be decided
by the shareholders at the Company’s annual
general meeting. The nomination committee
is to propose remuneration to be paid to such
members. The level of remuneration of the
Board shall reflect the responsibility of the
Board, its expertise and the level of activity in
both the Board and any Board committees. The
remuneration of the Board shall not be linked
to the Company’s performance. The Company
shall not grant share options to members of the
Board.
Members of the Board and/or companies with
whom the members are associated shall not
take on specific assignments for the Company
in addition to their appointments as members
of the Board. If they, nonetheless, do take on
such assignments this must be reported to the
Board and the remuneration for such additional
duties must be approved by the Board.
Any remuneration in addition to normal fees to
the members of the Board shall be specifically
identified in the annual report.
An overview of the remuneration for the
Board for 2021 will be available in a new
remu ner ati on report to be presented to the
annual general meeting in 2022 for an advisory
vote, and the report will also be published on
www.zalaris.com when available.
12. Salary and other remuneration
of executive personnel
The Board has established an Executive Remu-
neration Policy setting out the main principles
applied in determining the salary and other
remuneration of the executive personnel. This
policy is considered and approved at the annual
general meeting. The latest updated Executive
Remuneration Policy will be presented for a
vote at the next annual general meeting in
2022, and the policy will also be published on
www.zalaris.com.
67
enclosed with the Board’s statement or repro-
duced/referred to in the statement.
15. Auditor
Zalaris is audited by EY.
Zalaris does not use the auditor for any purpos-
es other than auditing without approval of the
Audit Committee. The auditor submits on an
annual basis the main features of the plan for
the audit of the Company to the Board.
The auditor participates in board meetings deal-
ing with the annual accounts, accounting prin-
ciples, assessment of any important accounting
estimates and matters of importance on which
there has been disagreement between the
auditor and the executive management of the
Company.
The auditor shall at least once a year pres-
ent to the Board a review of the Company’s
internal control procedures, including identified
weaknesses and proposals for improvement.
In addition, the Board shall hold a meeting with
the auditor at least once a year at which no
representative of the executive management is
present.
The Board reports the remuneration paid to the
auditor to the shareholders at the annual general
meeting, including details of the fee paid for
audit work and any fees paid for other specific
assignments. An overview of the remuneration
paid to the auditor is available in the financial
statement note 5.
Zalaris holds quarterly web-based presenta-
tions in which the financial results of the closed
quarter and focus areas of the Company are
commented on in addition to market outlooks
and special events which the Company con-
siders as relevant information for its sharehold-
ers. The presentation is held by the CEO and
the CFO of the Company. Both the quarterly
reporting and the presentations are published
on Zalaris’ website.
The financial calendar valid for Zalaris is adopt-
ed by the Board of Director and determines the
date and time for publishing interim reports,
annual financial statement and holding of the
annual general meeting. The financial calendar
is published on Zalaris’ website and on the
website of the Oslo Stock Exchange.
14. Take-overs
In the event of a takeover process, the Board
shall ensure that the Company’s shareholders
are treated equally and that the Company’s
activities are not unnecessarily interrupted. The
Board shall also ensure that the shareholders
have sucient information and time to assess
the oer.
The Board shall not attempt to prevent or
impede the takeover bid unless this has been
decided by the general meeting in accordance
with applicable laws. The main underlying
principles shall be that the Company’s shares
shall be kept freely transferable and that the
Company shall not establish any mechanisms
which can prevent or deter takeover oers
unless this has been decided by the general
meeting in accordance with applicable law.
If an oer is made for the Company’s shares,
the Board shall issue a statement evaluating
the oer and making a recommendation as to
whether shareholders should or should not
accept the oer.
If the Board finds itself unable to give a rec-
ommendation to the shareholders on whether
or not to accept the oer, it should explain
the reasons for this. The Board’s statement
on a bid shall make it clear whether the views
expressed are unanimous, and if this is not the
case, it shall explain the reasons why specific
members of the Board have excluded them-
selves from the statement.
The Board shall consider whether to arrange
a valuation from an independent expert. If any
member of the Board, or close associates of
such member, or anyone who has recently held
a position but has ceased to hold such a po-
sition as a member of the Board, is either the
bidder or has a particular personal interest in
the bid, the Board shall arrange an independent
valuation. This shall also apply if the bidder is
a major shareholder (as defined in Section 8
herein). Any such valuation should either be
68
Operating the global Zalaris
organization based on our
Nordic democratic values and
promoting equal pay for equal
work are key elements of our
sustainable business model
69
Auditor’s Report
Statsautoriserte revisorer
Ernst & Young AS
Dronning Eufemias gate 6a, 0191 Oslo
Postboks 1156 Sentrum, 0107 Oslo
Foretaksregisteret: NO 976 389 387 MVA
Tlf: +47 24 00 24 00
www.ey.no
Medlemmer av Den norske Revisorforening
A member firm of Ernst & Young Global Limited
INDEPENDENT AUDITOR'S REPORT
To the Annual Shareholders' Meeting of Zalaris ASA
Report on the audit of the financial statements
Opinion
We have audited the financial statements of Zalaris ASA (the Company) which comprise the financial
statements of the Company and the consolidated financial statements of the Company and its
subsidiaries (the Group). The financial statements of the Company comprise the balance sheet as at 31
December 2021 and the income statement, statement of cash flows and statement of changes in equity
for the year then ended and notes to the financial statements, including a summary of significant
accounting policies. The consolidated financial statements of the Group comprise the statement of
financial position as at 31 December 2021, the statement of profit or loss, statement of comprehensive
income, statement of cash flows and statement of changes in equity 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 legal requirements,
• the financial statements give a true and fair view of the financial position of the Company as at 31
December 2021 and its financial performance and cash flows for the year then ended in
accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway,
• the consolidated financial statements give a true and fair view of the financial position of the
Group as at 31 December 2021 and its financial performance and cash flows for the year then
ended in accordance with International Financial Reporting Standards as adopted by the EU.
Our opinion is consistent with our additional report to the audit committee.
Basis for opinion
We conducted our audit in accordance with International Standards on Auditing (ISAs). Our
responsibilities under those standards are further described in the Auditor’s responsibilities for the audit of
the financial statements section of our report. We are independent of the Company and the Group in
accordance with the requirements of the relevant laws and regulations in Norway and the International
Ethics Standards Board for Accountants’ International Code of Ethics for Professional Accountants
(including International Independence Standards) (IESBA Code), and we have fulfilled our other ethical
responsibilities in accordance with these requirements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our opinion.
To the best of our knowledge and belief, no prohibited non-audit services referred to in the Audit
Regulation (537/2014) Article 5.1 have been provided.
We have been the auditor of the Company for 20 years from the election by the general meeting of the
shareholders in 2002 for the accounting year 2002.
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 for 2021. 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
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opinion on these matters. For each matter below, our description of how our audit addressed the matter is
provided in that context.
We have fulfilled the responsibilities described in the Auditor’s responsibilities for the audit of the financial
statements section of our report, including in relation to these matters. Accordingly, our audit included the
performance of procedures designed to respond to our assessment of the risks of material misstatement
of the financial statements. The results of our audit procedures, including the procedures performed to
address the matters below, provide the basis for our audit opinion on the financial statements.
Revenue from outsourcing contracts
Basis for the key audit matter
For the year ended 31 December 2021 the Group
recognized NOK 529.7 million of revenue related
to outsourcing contracts. Revenue recognition
from outsourcing contracts of the various
customer projects involve management
judgement in identification and satisfaction of the
performance obligation as well as assessment of
the allocation of transaction price relating to the
service provided. Accounting for revenue from
outsourcing contracts was a key audit matter due
to the complexity of the various terms of the
agreements and the significant management
judgement involved.
Our audit response
We obtained an understanding of the revenue
recognition process for outsourcing contracts and
how management identifies the performance
obligations as well as the determination and
allocation of transaction price to separate
performance obligations. For a sample of
significant customer projects, we evaluated the
assessments made by management. We read
contracts and compared contract information to
transaction prices and invoicing. We further
reviewed subsequent amendments to the
contracts and assessed their impact on revenue
recognition. Further, we assessed the adequacy
of the disclosures in notes 1 and 3 of the
consolidated financial statements.
Customer project assets
Basis for the key audit matter
The Group capitalizes costs incurred during the
implementation phase related to outsourcing
contracts as customer project assets. Customer
project assets amounted to NOK 94.8 million as of
31 December 2021.
Costs capitalized as customer project assets are
internal hours multiplied with hourly rates. The
estimated hourly rates applied are calculated
based on an assessment of cost base. Costs
incurred prior to the signing of the contract are
only capitalized when they are reimbursable from
the customer. Costs incurred from the signing of
the contract and until the performance obligation
is fulfilled is amortized over the period the
outsourcing services are provided. Accounting for
customer project assets was a key audit matter
due to the significant management judgement of
the variable cost element in the cost base applied
in the calculation of hourly rates and related to the
criteria for capitalization.
Our audit response
For capitalization of customer project assets, we
obtained an understanding of management’s
process for determining the cost base and
estimation of the hourly rates. We verified fixed
employee cost to contracts, assessed the various
elements of the cost base and recalculated the
hourly rates. Further we tested hours booked for a
sample of projects, and performed analytical
procedures related to hours utilized. We also
assessed management’s detailed analysis of
estimated variable cost vs actual variable cost for
2021. We assessed the expenses capitalized to
the criteria for capitalizing cost to obtain a
contract.
We refer to notes 1 and 3 of the consolidated
financial statements.
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Other information
Other information consists of the information included in the annual report other than the financial
statements and our auditor’s report thereon. Management (the board of directors and the CEO) is
responsible for the other information. Our opinion on the financial statements does not cover the other
information, and we do not express any form of assurance conclusion thereon.
In connection with our audit of the financial statements, our responsibility is to read the other information,
and, in doing so, consider whether the board of directors’ report, the statement on corporate governance
and the statement on corporate social responsibility contain the information required by applicable legal
requirements and whether the other information is materially inconsistent with the financial statements or
our knowledge obtained in the audit, or otherwise appears to be materially misstated. If, based on the
work we have performed, we conclude that there is a material misstatement of this other information or
that the information required by applicable legal requirements is not included, we are required to report
that fact.
We have nothing to report in this regard, and in our opinion, the board of directors’ report, the statement
on corporate governance and the statement on corporate social responsibility are consistent with the
financial statements and contain the information required by applicable legal requirements.
Responsibilities of management for the financial statements
Management is responsible for the preparation and fair presentation of the financial statements of the
Company in accordance with the Norwegian Accounting Act and accounting standards and practices
generally accepted in Norway and of the consolidated financial statements of the Group in accordance
with International Financial Reporting Standards as adopted by the EU, and for such internal control as
management determines is necessary to enable the preparation of financial statements that are free from
material misstatement, whether due to fraud or error.
In preparing the financial statements, management is responsible for assessing the Company’s and the
Group’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern
and using the going concern basis of accounting unless management either intends to liquidate the
Company or 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 the
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
skepticism throughout the audit. We also:
• Identify and assess the risks of material misstatement of the financial statements, whether due to
fraud or error, design and perform audit procedures responsive to those risks, and obtain audit
evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not
detecting a material misstatement resulting from fraud is higher than for one resulting from error,
as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override
of internal control.
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• 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 fair presentation.
• 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.
Report on other legal and regulatory requirement
Report on compliance with regulation on European Single Electronic Format (ESEF)
Opinion
As part of our audit of the financial statements of Zalaris ASA we have performed an assurance
engagement to obtain reasonable assurance whether the financial statements included in the annual
report, with the file name zalarisasa-2021-12-31-en.zip, has 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 given with legal basis in 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
Penneo dokumentnøgle: KCWP0-5VADJ-CB4CK-DL5D7-BW4G0-4XXQI
71
5
Independent auditor's report - Zalaris ASA 2021
A member firm of Ernst & Young Global Limited
Management is responsible for the preparation of an annual report and iXBRL tagging of the consolidated
financial statements that complies with the ESEF Regulation. This responsibility comprises an adequate
process and such internal control as management determines is necessary to enable the preparation of
an annual report and iXBRL tagging of the consolidated financial statements that is compliant with the
ESEF Regulation.
Auditor’s responsibilities
Our responsibility is to express an opinion on whether, in all material respects, the financial statements
included in the annual report have been prepared in accordance with the ESEF Regulation based on the
evidence we have obtained. We conducted our engagement in accordance with the International
Standard for Assurance Engagements (ISAE) 3000 – “Assurance engagements other than audits or
reviews of historical financial information”. The standard requires us to plan and perform procedures to
obtain reasonable assurance that the financial statements included in the annual report have been
prepared in accordance with the ESEF Regulation.
As part of our work, we performed procedures to obtain an understanding of the company’s processes for
preparing its annual report in XHTML format. We evaluated the completeness and accuracy of the iXBRL
tagging and assessed management’s use of judgement. Our work comprised reconciliation of the iXBRL
tagged data with the audited financial statements in human-readable format. We believe that the
evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.
Oslo, 8 April 2022
ERNST & YOUNG AS
The auditor's report is signed electronically
Alexandra Bristol
State Authorised Public Accountant (Norway)
Penneo dokumentnøgle: KCWP0-5VADJ-CB4CK-DL5D7-BW4G0-4XXQI
72
“Enabling complex organizations
to eciently manage their people
across borders was the key business
idea behind Zalaris, when founded
more than 20 years ago. With
increased focus on compliance,
enabling of employees to work
from anywhere and the wish to
reduce variable cost – our solutions
are more relevant than ever.”
- Hans-Petter Mellerud
CEO and Founder of Zalaris
73
Introduction
There were 22,135,279 issued shares at the
end of 2021, of which 288,493 were owned by
the Company. A total of 11.2 million (11.9 million)
Zalaris shares were traded on the Oslo Stock
Exchange (“OSE”) during 2021 at a value of
NOK 650 million. The average daily trading
volume for Zalaris shares on the OSE during
2021 was 45k shares (47k) Zalaris’ share price
closed at NOK 54.00 at the end of 2021.
Zalaris’ shares are listed on the Oslo Stock
Exchange.
Dividend Policy
Zalaris’ overall objective is to create value for
its shareholders through an attractive and com-
petitive return in the form of an increase in the
value of the share and through the distribution
of dividends. The dividends paid should reflect
the Company’s growth and profitability.
Zalaris will aim to make annual dividend
payments in the region of 50 percent of the
net profits before tax, provided that this will not
influence target growth negatively and that the
capital structure is sound and at a satisfactory
level. When deciding the final dividend amount
to be proposed for the General Meeting, the
Board of Directors will also take into consider-
ation Zalaris’ capital requirements, including
legal restrictions, capital expenditure require-
ments and potential investment plans.
Buyback of Shares
Zalaris may consider buying back shares.
This consideration will be made in the light of
alternative investment opportunities and the
Company’s financial situation. In circumstances
when share buybacks are relevant, the Board
of Directors proposes buyback authorizations
to be considered and approved by the Annual
General Meeting. Authorizations are granted for
a specific time period and for a specific share
price interval during which share buybacks can
be made. Zalaris has bought back 17,800 shares
during 2021.
Shareholders and voting rights
Zalaris has one class of share. Each share car-
ries one vote and all shares carry equal rights,
including the right to participate in general
meetings. All shareholders shall be treated on
an equal basis, unless there is just cause for
treating them dierently Zalaris shares are freely
negotiable and there are no limitations of the
negotiability in Zalaris’ Articles of Associations.
As of 31 December 2021, the number of share-
holders in Zalaris was 1,308, of which 87.9
percent were in the Nordics.
Investor Relations Policy
The investor relations policy at Zalaris is based
on the idea that objective, detailed and rele-
vant information to the market is essential for
a proper valuation of the Company’s shares;
thus, the Company has continuously had a
dialogue with analysts and investors.
Zalaris shall give all shareholders the same
information at the same time. In contact with
analysts and investors, the Board of Directors
and the Management of Zalaris shall only com-
municate already published information
Zalaris has established a communication chan-
nel for the shareholders on its website and all
published information is made available on this
website. General investor relations inquiries
should be addressed to the following email
address: [email protected].
Zalaris strives at all time to publish all relevant
information in a timely, correct, non-discrimi-
natory and ecient manner to the market. All
relevant information will be published on the
Zalaris website and on the website of the Oslo
Stock Exchange Shareholders can register
to Zalaris’ Investor Relations distribution list if
they would like to receive investor information
directly per email.
Zalaris holds quarterly web-based presenta-
tions highlighting the financial results of the
closed quarter and focus areas going forward.
In addition, market outlooks and special events
which are considered relevant for its share-
holders are addressed. The presentation is
held by the CEO and the CFO of the Company.
Shareholder Information
Key Figures for Zalaris Share
(All figures in NOK unless stated) 2021 2020 2019 2018 2017
___________________________________________________________________________________________
Share price high (close) 72.80 53.20 27.60 58.20 58.50
Share price low (close) 49.60 22.00 19.90 25.20 33.00
Share price average (close) 58.06 36.35 23.63 40.55 44.62
Share price year-end 54.00 51.80 27.60 25.20 56.00
_______________________________________________________________________________________
Earnings per share -0.53 -0.36 -0.06 -0.61
Dividend per share * 1.00 0.00 0.00 0.65
________________________________________________________________________________________
Outstanding shares, average 21 294 19 647 19 729 20 030 19 637
Diluted
**
shares, average 22 736 20 301 20 123 20 177 20 265
Outstanding shares, year-end 21 847 19 620 19 568 20 030 20 030
Diluted** shares, year-end 23 492 20 505 20 196 20 177 20 230
* To be poposed by the Board of Directors for 2021 ** Including employee share options and restricted stock units (RSUs)
74
Both the quarterly reporting and the presenta-
tions will be published on Zalaris’ website.
Investor Relations Contacts
The CFO in Zalaris ASA is the main contact
person for matters related to financial informa-
tion, such as quarterly reporting and financial
statements.
For all other matters, such as new customer
contracts or other share price sensitive infor-
mation, the CEO of Zalaris ASA is the contact
person CEO and founder: Hans-Petter Mellerud
hans-petter[email protected] and CFO:
Gunnar Manum: gunnar[email protected].
Analyst Coverage
ABG Sundal Collier:
Aksel Øverland Engebakken
Arctic Securities:
Henriette Trondsen
henriette.trondsen@arctic.com
Kristian Spetalen
Sparebanken1 Markets: Petter Kongslie
petter[email protected]
VPS Registrar
Nordea Bank Norway ASA
Wholesale Banking | Securities Services P O
Box 1166 Sentrum,
N-0107 Oslo, Norway
Financial Calendar 2022
• Results Q1: 29 April 2022
• Annual General Meeting: 19 May 2022
• Results Q2: 25 August 2022
• Results Q3: 26 October 2022
The 20 Largest Shareholders Hold 74,44 Percent of the Total Issued Shares as of 25 Feb 2022
________________________________________________________________________________
Investor Shares Stake Type of Account
________________________________________________________________________________
Total number of shares 22 135 179 100.00%
The largest 20 shareholders (incl. Zalaris) 74.44%
Ownership Structure by
# of Shares Held
0 100 200 300 400 500 600
+ 1,000,001
100,001 - 1,000,000
10,001 - 100,000
1,001 - 10,000
101 - 1,000
1 - 100
2
22
48
263
499
322
1. Norwegian Retail AS 2 891 482 13.06 % Ordinary
2. Skandinaviska Enskilda Banken AB 2 158 278 9.75 % Nominee
3. Verdipapirfondet Alfred Berg Gamba 2 020 848 9.13 % Ordinary
4. Handelsbanken Nordiske Sambolag 1 213 036 5.48 % Nominee
5. Catella Småbolagsfond 1 150 323 5.20 % Nominee
6. Vestland Invest AS 910 659 4.11 % Ordinary
7. J.P. Morgan Bank Luxenburg AS 878 448 3.97 % Nominee
8. Verdipapirfondet Norge Selektiv 717 368 3.24 % Ordinary
9. Verdipapirfondet DNB SMB 631 589 2.85 % Ordinary
10. Verdipapirfondet Nordea Kapital 533 260 2.41 % Ordinary
11. Verdipapirfondet Nordea Avkastning 505 705 2.28 % Ordinary
12. Zalaris ASA 467 827 2.11 % Nominee
13. Verdipapirfondet Nordea Norge Plus 466 816 2.11 % Ordinary
14. Verdipapirfondet Delphi Norge 322 110 1.46 % Nominee
15. Skandinaviska Enskilda Banken AB 300 000 1.36 % Ordinary
16. Ølja AS 299 650 1.35 % Ordinary
17. Næringslivets Hovedorganisasjon 283 217 1.28 % Ordinary
18. Taconic AS 262 040 1.18 % Ordinary
19. BSN AS 240 000 1.108 % Ordinary
20. A/S Skarv 225 000 1.02 % Ordinary
Other shareholders 5 657 583 25.56 %
•
Norway
•
Sweden
•
Europe
•
Other
75
Alternative Performance Measures (APMs)
Zalaris’ financial information is prepared in
accordance with IFRS. In addition, financial
performance measures (APMs) are used by
Zalaris to provide supplemental information
to enhance the understanding of the Group’s
underlying financial performance. These APMs
take into consideration income and expenses
defined as items regarded as special due to
their nature and include among others restruc-
turing provisions and write-os. Financial APMs
should not be considered as a substitute for
measures of performance in accordance with
IFRS. Disclosures of APMs are subject to estab-
lished internal control procedures.
Adjusted EBITDA and EBIT
EBIT, earnings before interest and tax is defined
as the earnings excluding the eects of how the
operations where financed, taxed and exclud-
ing foreign exchange gains & losses. EBIT is
used as a measure of operational profitability.
EBITDA is before depreciation, amortization
and impairment of tangible assets and in-house
development projects. To abstract non-recur-
ring or income not reflective of the underlying
operational performance, the Group also lists
the adjusted EBIT and EBITDA. Adjusted EBIT
is defined as EBIT excluding non-recurring
costs, costs relating to share based payments to
employees, and amortization of excess values
on acquisition. Adjusted EBITDA is EBITDA ex-
cluding non-recurring costs and costs relating to
share based payments to employees, but after
depreciation of right-of-use assets.
Free cash flow
Free cash flow represents the cash flow that
Zalaris generates after capital investments in
the Group’s business operations have been
made. Free cash flow is defined as operational
cash flow.
Net interest-bearing debt (NIBD)
Net interest-bearing debt (NIBD), consists of
interest-bearing liabilities, less cash and cash
equivalents. The Group risk of default and
financial strength is measured by the net
interest-bearing debt.
Annual recurring revenue (ARR)
ARR is defined as the annualised value of
revenue the Company expects to receive
from SaaS (software as a service) and BPaaS
(business process as a service) contracts with
customers, but excludes change orders that do
not result in regular future revenue.
(NOK 1000) 2021 2020
EBITDA 101 948 121 938
Restructuring costs* 275 4 346
Mergers & Acquisitions 7 677 -
Settlement of VAT dispute from 2018-2019 1 844 -
Share-based payments 5 723 2 495
Deprecation right-of-use assets (IFRS 16 eect) (16 114) (19 101)
Adjusted EBITDA 101 353 109 678
(NOK 1000) 2021 2020
EBIT 22 585 37 423
Restructuring costs* 275 4 346
Mergers and Acuisitions 7 677 -
Settlement of VAT dispute fom 2018-2019 1 844 -
Share-based payments 5 723 2 495
Amortization of excess values on acquisition 11 469 10 926
Adjusted EBIT 49 574 55 190
*Relates mainly to redundancy cost/severance pay for employees
(NOK 1000) 2021 2020
Net cash flow from operating activities 29 780 92 253
Investment in fixed and intangible assets (20 630) (14 345)
Free cash flow 9 150 77 909
(NOK 1000) 2021 2020
Cash and cash equivalents 176 224 124 843
Interest-bearing loans and borrowings - long-term 357 887 375 832
Interest-bearing loans and borrowings - short-term 1 356 1 244
Net interest-bearing debt (NIBD) 183 019 252 234
76
Revenue growth in constant currency
The following table reconciles the reported
growth rates to a revenue growth rate adjusted
for the impact of foreign currency. The impact
of foreign currency is determined by calcu-
lating the current year revenue using foreign
exchange rates consistent with the prior year.
Full time equivalents (FTEs)
The ratio of the total number of normal agreed
working hours for all employees (part-time or
full-time) by the number of normal full-time
working hours in that period (i.e. one FTE is
equivalent to one employee working full-time).
2021 2020
Revenue growth, as reported -2,2% 2,0%
Impact of foreign currency 3,2% -5,8%
Revenue growth, constant currency 1,0% -3,8%
MS revenue growth, as reported -2,7% -1,7%
Adj. for costumers moved from MS to PS in Q2 2020 1,2% 2,4%
Impact of foreign currency 2,1% -4,8%
MS revenue growth, constant currency 0,6% -4,1%
PS revenue growth, as reported -1,0% 11,2%
Adj. for customers moved from MS to PS in Q2 2020 -2,6% -5,2%
Impact of foreign currency 5,3% -8,2%
PS revenue growth, constant currency 1,7% -2,2%
Postal Address PO Box 1053 Ho
NO-0218 Oslo, Norway
Visiting Address Hosveien 4 NO-0275 Oslo
Telephone +47 4000 3300
Website www.zalaris.com
eMail [email protected]
Zalaris and Zalaris products and services mentioned herein, as well
as respective logos and trademarks, are registered trademarks of
the Company. All other product and service names mentioned are
acknowledged as trademarks (or subject to being trademarks)
of their respective companies.
© 2022 Zalaris