An innovative

force

2021

ANNUAL REPORT

Charging

the future.

It is our responsibility to provide a smarter and more

sustainable future with innovative solutions for everyone.

We are equipped with the right tools to create positive

change. The future is ours to create.

2 GARO in brief

4 Statement by the President and CEO

6 The year in brief

8 Business concept, vision,

strategy and goals

16 Market, drivers and trends

20 Operations

23 Product development

26 Electrical distribution products

product area

28 E-mobility product area

32 Project business product area

33 Temporary Power product area

34 Sustainability Report

50 Auditor’s statement

52 The GARO share

Group

54 Board of Directors’ Report

58 Income statement

59 Balance sheet

62 Cash-ﬂow statement

63 Notes

Parent Company

89 Board of Directors’ Report

91 Income statement

92 Balance sheet

95 Cash-ﬂow statement

96 Notes

106 Audit report

110 Corporate governance report

115 Auditor’s statement

116 Organization and structure

Contents

GARO in brief

2 | GARO ANNUAL REPORT

GARO is a company that develops, manufactures and

markets innovative products and systems for electrical

installations under its own brand in the European market.

In its four product areas of Electrical distribution products,

E-mobility, Project business and Temporary Power, the

Group supplies products and complete solutions with a

focus on electrical safety, user-friendliness and sustainability.

GARO is the market leader in the Nordic region in several

product categories within Electrical distribution products

and E-mobility.

Operations are divided into two business areas: GARO

Sweden and GARO International. The business areas

GARO Electriﬁcation and GARO E-mobility replaced the

former business areas on January 1, 2022. The Group has

sales companies in six countries: Sweden, Norway, Fin-

land, Ireland, the UK and Poland. Group external exports

are made from business area GARO Sweden to other

countries. GARO has a total of four production units, three

of which are located in Sweden: two in Gnosjö and one in

Värnamo, and one in Szczecin, in Poland.

GARO was founded in 1939, has its head ofﬁce in

Gnosjö and is today an international Group with around

500 employees. Total sales for 2021 amounted to

MSEK1,296. GARO is listed on Nasdaq Stockholm under

the ticker name GARO.

MSEK1, 2 9 6

IN NET SALES

(1,040)

MSEK

207

IN EBIT

(136)

25%

GROWTH

(3%)

16%

EBIT MARGIN

(13%)

SEK

3,33

EARNINGS PER SHARE

(1.91)

59%

EQUITY RATIO

(58%)

GARO IN BRIEF

GARO ANNUAL REPORT | 3

GARO IN BRIEF

69%

31%

75%

25%

34%

41%

18%

ALLOCATION OF

NET SALES

per business area 2021

ALLOCATION

OF EBIT

per business area 2021

ALLOCATION OF

NET SALES

per product area 2021

GARO Sweden

GARO International

GARO Sweden

GARO International

Electrical distribution products

E-mobility

Project business

Temporary Power

2021 2020 2019 2018 2017

Net sales (MSEK) 1,295.8 1,039.8 1,008.1 903.7 796.0

Growth, % 25 3 12 13 21

EBIT (MSEK) 207.2 136.2 112.6 113.8 98.1

EBIT margin, % 16.0 13.1 11.2 12.6 12.3

Net income (MSEK) 166.7 95.3 85.7 82.7 85.6

Earnings per share

(SEK) 3.33 1.91 1.71 1.65 1.71

Return on equity, % 34.0 24.7 26.8 30.1 38.3

Investments (MSEK) 45.3 45.3 33.4 22.7 51.4

Equity ratio, % 58.9 57.9 52.2 52.4 47.3

Net cash position (-) / net debt (+) -9.4 11.3 45.6 45.7 56.1

Average number of employees 460 409 420 398 345

For deﬁnitions of key ﬁgures, see Note 30 page 88.

1) Earnings per share after the 5:1 share split was completed in 2021. Earnings per share were not diluted, so earnings per share pertains to before and after dilution.

WITH FAITH IN

A SUSTAINABLE FUTURE,

WE ARE INVESTING FOR

THE NEXT GENERATION.

PATRIK ANDERSSON, PRESIDENT AND CEO

4 | GARO ANNUAL REPORT

STATEMENT BY THE PRESIDENT AND CEO

We are happy to summarize another successful year for

the Group. Net sales for the full-year increased 25% with

strong growth for GARO Sweden and GARO International

as a result of a favorable performance for all our product

areas. Proﬁtability also developed positively mainly as a

result of the considerable volume growth. EBIT rose 52% to

MSEK 207 and the EBIT margin was 16%, which is almost

3 percentage points higher than the preceding year, and

results in our best ever year of operations.

NEWBUILDS AND RENOVATIONS

CREATING CONDITIONS

As a leading company, GARO has an important role in

providing the market with energy-efﬁcient, user-friendly and

smart solutions that can guarantee electrical safety for a

sustainable future.

The Electrical distribution products and Project business

product areas reported growth of 11% and 12% respec-

tively, driven by favorable growth in all markets in new

production and the renovation of properties. The excellent

performance in the UK since our establishment there in

2019 is particularly pleasing. We believe that GARO’s sales

trend in both product areas has outperformed the underlying

market. However, restrictions during the year have impacted

performance in different ways, but ultimately growth has led

to advantageous conditions for all markets.

WE ARE CHARGING THE FUTURE

Back in 2008, when we launched our ﬁrst charger product,

we adopted a clear position, and have been a leading com-

pany in electric car charging ever since. The number of elec-

tric and hybrid vehicles is growing signiﬁcantly, and we have

witnessed several new car models launched in the market

during the year, which has created major demand for more

comprehensive charging infrastructure. At GARO, we are

creating opportunities to charge electric cars where people

live and work. At home, at the workplace, at the shopping

center or along the way. Quite simply, we make it possible for

electric car drivers to charge their vehicles wherever they are.

Sales in the E-mobility product area increased 52%, with

favorable sales mainly in wall boxes and public chargers.

Developing products that are innovative and sustainable

has always been a signiﬁcant aspect of our success. We

made signiﬁcant investments in product development in

2021 in order to remain at the forefront with smart and

accessible products and services, both today and tomorrow.

In 2022, considerable focus will remain in this area and

we are set to launch exciting and innovative products.

SYNERGY EFFECTS MAKE US UNIQUE

Our breadth in electric installation material and electric

car charging creates a unique offering in the market. The

synergy effects that exist between the product areas create

an overall solution that separates us from other suppliers

and generates ﬂexible solutions for our customers. We

assist with everything from power supply to ensuring that

charging stations are operational.

AGGRESSIVE INVESTMENTS

We continued to increase production capacity in our produc-

tion facilities during the year in both Sweden and Poland to

meet demand, particularly within the E-mobility product area.

Further investments are now being made through the con-

struction of a new production and logistics facility in Poland

that will amount to about 15,000 sqm. The facility will gener-

ate a signiﬁcant capacity increase for E-mobility and enable

us to grow and develop in existing and new product cate-

gories. We can also see that the location in Poland makes

distribution to the European market more efﬁcient.

FOR THE NEXT GENERATION

UN’s sustainable development goals to facilitate a fossil-free

society are clear, and the transition is taking place around

us all of the time.

By offering innovative, energy-smart and high-quality prod-

ucts that enable a more sustainable and fossil-free everyday,

we as a company are able to help make the world more

sustainable. We are to be part of this change, which is also

reﬂected in our choice of materials and the work in the value

chain to reduce overall environmental impact. With faith in a

sustainable future, we are investing for the next generation.

Patrik Andersson,

President and CEO

CEO’s comments

As we reﬂect on how the past two years have been in the world and all the changes

that we had to make, there are surely many who share my pride over our dynamism,

team spirit and determination. In 2020, we made the decision not to be limited by the

challenges that world is presenting us with, but to constantly remain solution-oriented

to achieve our objectives. Our innovative ability and strength to envisage potential,

combined with the drive that the Group possesses has contributed to our growth, with

sales of MSEK 1,296 (1,040) and EBIT of MSEK 207 (136).

GARO ANNUAL REPORT | 5

STATEMENT BY THE PRESIDENT AND CEO

THE YEAR IN BRIEF

6 | GARO ANNUAL REPORT

The year in brief

2021 was another year that was different for the world and GARO, as

we were faced with various challenges that impacted our way of living and

working. The market for charging infrastructure continued to grow structurally

with rising numbers of rechargeable vehicles, and we noted a continued

strong trend with expansion of the charging infrastructure in all markets.

New construction and renovation continued at a high level and beneﬁted

demand in component and construction-related products.

DIGITAL INFRASTRUCTURE

To guarantee IT security that is at the leading edge for

customers and employees, GARO works to ensure high

quality in its digital infrastructure.

Investments have been made in various digital plat-

forms, for example, so that training courses and meetings

function optimally, with ﬂexibility for customers and

employees. In addition, a new platform was launched

in the fourth quarter for customers in the Swedish market.

EXPANDED PRODUCTION CAPACITY

To meet the growing demand, particularly within the

E-mobility product area, we expanded production

capacity at the production facilities in Sweden and

Poland during the year. This was done by enhancing the

efﬁciency of existing production spaces, and increasing

the number of employees in production, as well as in

market, service and support. As a result, the Group was

able to maintain healthy delivery capacity throughout the

year. As the organization grows, we have also worked

to maintain a good work environment, to remain a good

workplace and to have healthy employees.

STRENGTHENED E-MOBILITY ORGANISATION

To create a clear focus, intensify our development efforts and adopt a structure for rapid

growth, the E-mobility product area was incorporated on January 1, 2021. In July, Niklas

Rönnäng was appointed Business Area Manager of GARO E-mobility AB, assuming this

position in January 2022.

THE YEAR IN BRIEF

GARO ANNUAL REPORT | 7

PRODUCT DEVELOPMENT WITH SYNERGY EFFECTS

Product development has always been crucial for our growth.

In 2021, we continued to develop new products with the

aim of broadening our customer offering and creating a

unique, comprehensive solution for the market. Our breadth

in product and service offering is a strength and a distinctive

feature of the Group.

Our close collaboration between product development and

the different product areas makes it possible to quickly meet

market demands. This creates excellent growth opportunities

and makes it straightforward for customers to gain a complete

solution from GARO. An example of synergy effects between

E-mobility and Installation that was seen during the year, is that

the increased sales of wall boxes in E-mobility also entailed

higher sales of electrical installation products and components

in the Electrical distribution products product area. We are

seeing the same synergy effects for the Project business prod-

uct area, where sales of cable cabinets increased in conjunc-

tion with increased sales in the E-mobility product area.

LIFE CYCLE ANALYSIS

During the year, we completed a life cycle analysis for

the LS4 charging station. The analysis gives us a deeper

understanding of the product’s impact and the phase of

the life cycle at which the highest emissions occur. Read

more on pages 44–45 of the Sustainability Report.

AWARDS

For the fourth consecutive year, GARO qualiﬁed for

the list of Sweden’s Supercompanies, which has

been compiled since 2005 by Bisnode, now part of

Dun & Bradstreet. A number of criteria must be met for

four consecutive years to classiﬁed as a Supercompany.

This includes, increasing sales and earnings, while the

company must also demonstrate stability and a long-term

approach to business. The award is proof that we have

continued to supply the market with sustainable and inno-

vative solutions of high quality and conﬁrms that we are

working in the right way.

During the year, the Group was awarded the major

Swedish Aluminium Prize, which we are very proud

of. The prize was awarded for successful development,

from manufacturing control cabinets to becoming a lead-

ing player for infrastructure for electric cars and charging

stations based on aluminum, with a focus on innovation,

sustainability and design.

For the second year in a row, GARO Poland won the

Best Entrepreneur of the year award in the medium-

sized company category in West Pomerania.

FLEXIBILITY, FOCUS AND BREADTH

During the year, the organization was solution-oriented and ﬂexible, despite the

prevailing global challenges. With its focus on the customer and continued growth

creation, GARO has been aggressive in its work and stood ready in the face of

the unpredictable events that arose in the past year.

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

We regard challenges as new opportunities and we are driven by

a curiosity to try new approaches. Developing products and solutions

for a sustainable future is a self-evident focus for us. Our history is

deeply rooted in our DNA; it has created our unique GARO spirit,

which combined with our business concept and vision, provides us

with clear strength going forward.

GARO Group

– Charging the future

8 | GARO ANNUAL REPORT

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

BUSINESS

CONCEPT

With a focus on innovation,

sustainability and design,

GARO provides proﬁtable

complete solutions for the

electrical industry.

VISION

Determined to meet

tomorrow’s opportuni-

ties, GARO is constantly

evolving to be the

leading innovator in our

product areas.

MISSION

Through knowledge,

innovation and com-

mitment, our common

desire is to develop

complete solutions that

are future-proof.

CORE VALUES

Our employees are innovative, skilled and driven by a curiosity

to try new approaches. Our shared values are a consistent theme

throughout the entire Group.

INNOVATION

We are an innovative force that develops

opportunities and business for our custom-

ers. This makes us a dedicated, responsive

and active partner.

EXPERTISE

We are experts in what we do and value

the knowledge that leads to our customers’

development and proﬁtability.

LONG-TERM

Our focus is on developing reliable prod-

ucts for a sustainable future through strong

commitment.

PRIDE

Our unique history, strong development

and bright future, have created our special

“GARO culture”. It gives us conﬁdence and

pride in everything we do.

GARO ANNUAL REPORT | 9

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

Using innovation and a new approach, our customers’ future

opportunities are developed to bring about a more ener-

gy-efﬁcient and convenient everyday life. We are experts in

our area, which means that we develop effectively together

with our partners and customers. We take a long-term

approach to all of our relationships and this beneﬁts the

operations, while also contributing to a positive, sustainable

corporate culture. There is well-founded pride among all

employees, which is reﬂected in everything we do.

ORGANIC GROWTH

GARO is driven by a growth focus. GARO’s growth target

of not less than 10% over a business cycle will primarily be

achieved through organic growth.

Sustainable, intelligent, user-friendly and future-proof

products, alongside a strong brand, are central for achiev-

ing the desired performance. During GARO’s history,

the establishment and development of new and existing

markets has been a large part of the organic growth. Focus

is on continuing to strengthen our business in new markets

in Europe.

PRODUCT DEVELOPMENT FOR SUSTAINABILITY

To make organic growth possible, product development is

a decisive part of GARO’s operations. We are to always

maintain a high rate of development when it comes to

smart products that meet current and future needs. This is

achieved by continuously evaluating and improving our

Our strategy is based on organic growth, product development and

geographical expansion supplemented with acquisitions. The goal is

to be the leading brand in the markets in which we operate and to

be able to offer unique complete solutions for the electrical industry.

Strategy for

continued success

GROWTH STRATEGY

The basis of GARO’s success is innovation, product development and organic growth, which is

supplemented with a deﬁned acquisition strategy in accordance with the growth matrix below.

ACQUISITIONS

New/supplementary

product areas

Nordic companies

in the electrical

industry

Companies with

specialist expertise

New geographical

markets

GARO’S GOALS

Become the

leading brand in

selected markets

CAPITAL-INTENSE

ORGANIC GROWTH IN EXISTING MARKETS

DIVERSIFY OPERATIONS

Development of

the existing

product range

New supplementary

products and

segments

New products and

business areas

New geographical

markets

LABOR INTENSIVE

PRODUCT DEVELOPMENT

10 | GARO ANNUAL REPORT

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

offering in all of our product areas and, at the same time,

maintaining an overall perspective and vision of creating

functional and sustainable solutions. Material choices,

functionality and energy efﬁciency are three key words,

in addition to sustainability, that permeate our strategy for

product development.

With strong product development encompassing all of

our product areas, we are creating unique opportunities to

develop sustainable products that satisfy the market. Read

more about our activities on pages 23–25.

DIVERSIFY OPERATIONS

GARO’s strategy includes diversifying the operations by

developing a broad offering to customers to create long-

term complete solutions. GARO also continuously evaluates

the opportunity to acquire new product or business areas,

and to expand into new geographical markets.

ACQUISITIONS

The focus of the acquisition strategy is operations in which

we can add new products and services or companies with

specialist expertise to the Group. The acquisitions made

must be a complement to GARO’s existing operations and

help expand our overall offering. Establishment in new

markets, with a focus on Europe, is also contained in the

acquisition strategy.

SUSTAINABILITY

The goal of GARO’s strategic sustainability work is to be the

leader in responsible business in its area of operation. One

of our core values is “a long-term approach,” which for

GARO means developing safe and innovative products and

solutions for a climate-smart future with great dedication.

The Group’s aim is for the entire value chain to be charac-

terized by sustainability and a high level of ethics. GARO

works toward all 17 of the UN Sustainable Development

Goals (SDGs). We have selected six SDGs where we can

create value and make the biggest difference. Read more

about the sustainability work and the strategy in the Sustain-

ability Report on pages 34–49.

BRAND STRATEGY

GARO’s brand strategy has as its primary aim to strengthen

our position in the market and achieve its business objec-

tives. Through a strong brand and a clear strategy, GARO

creates a long-term approach, proﬁtability and security

for our customers and employees. It is our conviction that

communication is a fundamental requirement for a reward-

ing relationship with the business environment and we work

actively every day to strengthen GARO’s brand.

We have ambassadors in the form of proud employees

and satisﬁed customers, who strengthen our conﬁdence in

the market, meaning that we can grow larger and stronger.

GARO ANNUAL REPORT | 11

Financial targets

SALES GROWTH

GARO’s organic growth will

amount to not less than 10% over

a business cycle.

PROFITABILITY

The EBIT margin for the Group will

amount to not less than 10% of net

sales over a business cycle.

RETURN

Return on equity will amount

to not less than 20% over a

business cycle.

TARGETS

≥

10 %

2017 2018 2019 2020 2021

TARGETS

≥

10 %

2017 2018 2019 2020 2021

TARGETS

≥

20 %

2017 2018 2019 2020 2021

EQUITY RATIO

The equity ratio will not be less

than 30%.

DIVIDEND POLICY

GARO’s dividend will amount to

approximately 50% of the Group’s

net earnings after tax. The dividend

proposal must take into account

GARO’s long-term dividend potential

and the Group’s general investment

and consolidation requirements.

TARGETS

≥

30 %

2017 2018 2019 2020 2021

TARGETS

≈50 %

2017 2018 2019

2020 2021

*) As a precautionary measure, no dividend was

paid for 2019 due to the ongoing COVID-19

situation.

12 | GARO ANNUAL REPORT

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

GARO ANNUAL REPORT | 13

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

Sustainability goals

GREENHOUSE GASES

We intend to reduce our environmental impact

by reducing our emissions of direct and indirect

greenhouse gases in our own facilities in terms of

electricity and heating.

ENERGY

We intend to reduce our environmental impact

by reducing our energy consumption and increas-

ing our share of renewable energy in our own

premises.

RECYCLING

We intend to continuously reduce waste, increase

the amount of recycling and identify and imple-

ment practical solutions for separation.

HEALTH AND SAFETY

Our goal is to reduce the amount of workplace

accidents at our facilities. GARO has a zero vision

for the number of workplace accidents resulting in

more than eight hours’ absence. We strive for a

safe and healthy work environment.

GOALS

0 tons

The goal is that direct and indirect GHG emissions

from own premises in terms of electricity and heat-

ing is zero tonnes by 2025.

GOALS

100%

All electricity in all of our own facilities is to come

from fossil-free sources by 2025.

GOALS

98%

Achieve a >98% recycling level by 2025.

GOALS

GARO has a zero vision for workplace accidents.

OUTCOME SHARE OF CO

EMISSIONS 2021

240 tons

In 2021, GARO’s emissions per sales declined

1.34% year-on-year.

OUTCOME SHARE OF FOSSIL-FREE

SOURCES 2021

94.5%

In 2021, the share of electricity from fossil-free

sources increased 14.5%.

OUTCOMES RECYCLING

LEVEL 2021

84.5%

In 2021, total waste recycling increased about

6%. The increase was the result of efﬁciency

improvements for waste management and reducing

material waste and waste to landﬁll.

OUTCOME NUMBER OF WORK-RELATED

ACCIDENTS 2021

In 2021, 18 accidents were reported,

which is a year-on-year decline of 14.3%.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• Continually work to make processes energy

efﬁcient and reduce emissions.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• Reduce total energy consumption in

our own facilities.

• Increase the share of energy that comes

from fossil-free sources.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• We strive to further reduce our waste and secure

increased recycling in our manufacturing.

• Retain a recycling level of over 98%.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• Clean, light and noise free work environment.

• Ergonomic workplaces for all employees.

• Continual follow-ups on health and safety issues

to ensure good health.

• Training in health and safety.

SHARE OF CO

EMISSIONS

SHARE OF ELECTRICITY

FROM FOSSIL-FREE SOURCES RECYCLING LEVEL

NUMBER OF WORKPLACE ACCIDENTS

WITH AT LEAST EIGHT HOURS OF ABSENCE

Tons CO

% %

Goal 0 tons

100

202120202019

Goal 100%

100

202120202019

Goal 98%

202120202019

Goal 0

120

150

2021

2020

HeatElectricity

2020 2021

14 | GARO ANNUAL REPORT

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

GREENHOUSE GASES

We intend to reduce our environmental impact

by reducing our emissions of direct and indirect

greenhouse gases in our own facilities in terms of

electricity and heating.

ENERGY

We intend to reduce our environmental impact

by reducing our energy consumption and increas-

ing our share of renewable energy in our own

premises.

RECYCLING

We intend to continuously reduce waste, increase

the amount of recycling and identify and imple-

ment practical solutions for separation.

HEALTH AND SAFETY

Our goal is to reduce the amount of workplace

accidents at our facilities. GARO has a zero vision

for the number of workplace accidents resulting in

more than eight hours’ absence. We strive for a

safe and healthy work environment.

GOALS

0 tons

The goal is that direct and indirect GHG emissions

from own premises in terms of electricity and heat-

ing is zero tonnes by 2025.

GOALS

100%

All electricity in all of our own facilities is to come

from fossil-free sources by 2025.

GOALS

98%

Achieve a >98% recycling level by 2025.

GOALS

GARO has a zero vision for workplace accidents.

OUTCOME SHARE OF CO

EMISSIONS 2021

240 tons

In 2021, GARO’s emissions per sales declined

1.34% year-on-year.

OUTCOME SHARE OF FOSSIL-FREE

SOURCES 2021

94.5%

In 2021, the share of electricity from fossil-free

sources increased 14.5%.

OUTCOMES RECYCLING

LEVEL 2021

84.5%

In 2021, total waste recycling increased about

6%. The increase was the result of efﬁciency

improvements for waste management and reducing

material waste and waste to landﬁll.

OUTCOME NUMBER OF WORK-RELATED

ACCIDENTS 2021

In 2021, 18 accidents were reported,

which is a year-on-year decline of 14.3%.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• Continually work to make processes energy

efﬁcient and reduce emissions.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• Reduce total energy consumption in

our own facilities.

• Increase the share of energy that comes

from fossil-free sources.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• We strive to further reduce our waste and secure

increased recycling in our manufacturing.

• Retain a recycling level of over 98%.

FUTURE FOCUS AND NEW LONG-TERM GOALS

• Clean, light and noise free work environment.

• Ergonomic workplaces for all employees.

• Continual follow-ups on health and safety issues

to ensure good health.

• Training in health and safety.

SHARE OF CO

EMISSIONS

SHARE OF ELECTRICITY

FROM FOSSIL-FREE SOURCES RECYCLING LEVEL

NUMBER OF WORKPLACE ACCIDENTS

WITH AT LEAST EIGHT HOURS OF ABSENCE

Tons CO

% %

Goal 0 tons

100

202120202019

Goal 100%

100

202120202019

Goal 98%

202120202019

Goal 0

GARO ANNUAL REPORT | 15

BUSINESS CONCEPT, VISION, STRATEGY AND GOALS

MARKET CONDITIONS

The market for charging infrastructure is growing struc-

turally with rising numbers of rechargeable vehicles, and

we see a continuing strong trend with further expansion

of the charging infrastructure in the European market.

Housing construction remains at a high production rate

with increased energy efﬁciency and electriﬁcation in

general. Demand for construction-related products com-

bined with renovation requirements and energy efﬁciency

is expected to remain favorable.

All in all, we have a positive view of long-term market

conditions, mainly driven by growth in charging infra-

structure.

The market for electric installation material and charging infra-

structure is continuing to grow and we foresee a positive trend for

GARO. At the same time, there is increasing demand for products

and solutions to achieve a fossil-free society in which growing

numbers of players become aware of their environmental impact.

This makes the sustainability aspect a crucial factor in the choice

of product and service.

Strong market trend with

focus on sustainability

NEED FOR SMARTER CHARGING INFRASTRUCTURE

New cars are becoming smarter and will convey more

information, which will enable more functionality, at the

same time as increasing demands on charging stations

and their information transmission. As a result, software

development is becoming an increasingly important part of

E-mobility in making it possible to offer competitive prod-

ucts. Vehicle to Grid, V2G, is an example of technology

that results in electricity from electric cars being transmitted

back to the grid. The burden on the grid can thus be bal-

anced, entailing that electricity is taken when it is cheap

and returned for payment when the price is high. Another

example is Plug & Charge, which is the simplest way for a

driver to charge their electric vehicle. All the driver needs

to do is to connect their electric car to the charging station,

then the charging station recognizes the car automatically

without the need to swipe a payment or charge card.

16 | GARO ANNUAL REPORT

MARKET, DRIVERS AND TRENDS

CHARGEABLE HYBRID CARS AND

ELECTRIC CARS ON THE INCREASE

The number of electric cars and chargeable hybrid cars on

the roads is steadily increasing in the Nordic region and in

Europe, which means there is a need to rapidly expand the

charging infrastructure. The annual growth of rechargeable

passenger cars in the EU amounts to 17.8

% and is expected

to grow in the years to come. However, the total vehicle ﬂeet

in the EU still only comprises 1.6

% rechargeable passenger

cars. In 2021, there were more than 1.15

million recharge-

able passenger cars in the Nordic countries and 3.9

million

in the EU. In Norway, which is the leading market for electric

cars, 86.1

% of new car sales in 2021 were rechargeable

passenger cars, of which 71.5

% were pure electric cars. In

the UK, the electric car ﬂeet is expanding

considerably, and there are now 720,000

rechargeable electric cars in circulation.

The majority of all car manufacturers are

represented in the sale of rechargeable

cars in the market, often with several dif-

ferent models and also with many models

under development. As electrical operation

increases in all transport sectors, the need

grows for more charging stations in society,

which is generating strong demand for

charging infrastructure.

Norway and Sweden are at the fore-

front of development and making large

investments in quick charging, Finland and

Ireland are in progress, and large investments are being

made in Poland. In Sweden alone, there was a charging

infrastructure that included more than 2,600

public

charging stations with approximately 14,000

charging

points in 2021. To meet the growing demand for charging

stations, 19,000

charging points would be required today

and a full 90,000

by 2030 in the Swedish market alone.

We see the same tendency in the rest of Europe.

To accelerate the expansion of the charging infrastruc-

ture, governments in some markets are launching initiatives

to promote the development of fossil-free fuel. In Sweden,

green technology tax deductions of 50% of the labor and

material costs for the installation of wall boxes also were

introduced in January 2021. In the UK, similar measures

will be implemented, with the require-

ment from 2022 that all new housing,

business premises, ofﬁces and properties

that undergo major renovation work

must install a minimum of one charging

station for electric cars. This requirement

is expected to result in the addition of

145,000

extra charging stations annu-

ally. Similar government initiatives exist

in other countries and new strategies are

constantly being developed in the Euro-

pean market.

ANNUAL GROWTH

OF RECHARGEABLE

PASSENGER CARS

IN THE EU

1) European Alternative Fuels Observatory

2) Power Circle

3) www.gov.uk

GARO ANNUAL REPORT | 17

MARKET, DRIVERS AND TRENDS

WE CAN SEE THAT TODAY’S RENOVATIONS AND

NEW CONSTRUCTION REQUIRE MORE ELECTRICAL

INSTALLATIONS THAN BEFORE, LARGELY DUE TO

THE DIGITALIZATION OF SOCIETY.

CONTINUING HIGH RATE OF

CONSTRUCTION AND RENOVATION

New construction, renovation and investments in the

energy efﬁciency of single-family homes and apartments

are driving forces for several of GARO’s product areas.

New construction increased in 2021, and we can see

that housing being built today has higher energy require-

ments and needs to meet increasing amounts of environ

mental and energy certiﬁcations. At the same time, end

users are choosing to enhance the energy efﬁciency of

their homes. Overall, this means that GARO’s energy-

efﬁcient and smart electrical installation products are

attractive in the market and we deem the pace of growth

in construction and renovation to be favorable in the

countries in which we are established. We can also see

that today’s renovations and new construction require

more electrical installations than before, largely due to

the digitalization of society.

SIMPLICITY, RELIABILITY AND USER-FRIENDLINESS

Simplicity, reliability and user-friendliness are three factors

that we believe will gain in importance for our custom-

ers. It should be easy for electrical installers to install the

products, they should be easy for the end user to use and

reliable for everyone, regardless of where in the process

they come into contact with our products. The end user

wants to be able to easily read values in real time, make

adjustments, regulate the time settings, for example, for

when the product is to be used, and take energy con-

sumption readings.

Sustainability has always been an important issue for

GARO. The trend we see now is for increased safety

requirements from the market, while regulations are

becoming increasingly stricter for all types of electrical

products. GARO welcomes the developments related to

safety and certiﬁcations. All of our products are quality

assured and we train installation engineers, retailers and

end users in the importance of safe electrical installation.

18 | GARO ANNUAL REPORT

MARKET, DRIVERS AND TRENDS

INDUSTRY 4.0

A fourth generation of industrial revolution has evolved

over the past decade This entails that more processes are

digitalized and have a focus on connectivity through the

Internet of things (IoT), automation, machine learning and

access to real-time data to optimize production ﬂows and

enhance the efﬁciency of maintenance work. This creates

a more holistic perspective, in which there is enhanced

cooperation between physical and digital production. We

see that more industrial operations are choosing to invest

in digitalization solutions and this trend is expected to

become increasingly stronger.

DEMAND FOR SUSTAINABLE PRODUCTS

The increasing cost and environmental awareness in the

market for electric installation material has resulted in a

willingness in the industry today to choose a sustainable

product with a long economic life, which imposes stricter

demands on suppliers.The requirements on the products’

materials, contents how the product is manufactured and

how the value chain’s environmental impact is managed

by the manufacturer are increasingly key aspects for all

stakeholders.

Regardless of the market or industry, a growing need

persists for energy-efﬁcient solutions that reduce energy

consumption, costs and the overall climate impact.

The need to be able to measure and control individual

devices, such as engine heaters, wall boxes or solar

panels, is steadily rising and, accordingly, the demand

for components in metering and safety.

SOFTWARE DEVELOPMENT IS

ALWAYS AN IMPORTANT AREA OF

E-MOBILITY TO MAKE IT POSSIBLE

TO OFFER COMPETITIVE PRODUCTS.

GARO ANNUAL REPORT | 19

MARKET, DRIVERS AND TRENDS

By maintaining a long-term sustainable approach in our

work, we continue to contribute to the market with future-proof

products. Our employees are proud to be a part of GARO

and to be part of the transition toward an electriﬁed future.

We are a leading company in electrical installation and

E-mobility in the Nordic region and a prominent E-mobility

company in the rest of Europe. GARO develops and manu-

factures innovative products and complete solutions that are

attractive to the market and that support society’s energy

transition under its own brand and within four product areas.

FOUR PRODUCT AREAS

The Electrical distribution products product area is the

core of operations and where everything once started. In

Electrical distribution products, GARO offers products and

complete solutions for ﬁxed electrical installation within

industry, building new housing and for renovation projects.

The E-mobility product area offers everything in electric

car charging, from products for home charging for public

fastchargers. The Project business product area provides

complete, customized and installation-ready distribution

cabinets and power supply for mainly commercial enter-

prises. The Temporary Power product area manufacturers

products for temporary electricity, heating and lighting for

construction sites and events. Read more about the differ-

ent product areas on pages 26–33.

INTERNATIONAL PRESENCE

GARO divides its operations into two business areas:

GARO Sweden and GARO International. GARO Sweden

comprises the Swedish companies including Group external

exports from Sweden, while GARO International comprises

the companies in Norway, Finland, Ireland, Poland and the

UK. On January 1, 2022, GARO was reorganized and

two new business areas were formed: GARO Electriﬁcation

(the Electrical distribution products, Project business & Tem-

porary Power product areas) and GARO E-mobility.

GARO’s operations are based on a drive to continually develop to be the

leading innovator in all of our product areas. We are innovative in our

way of working which results in smart products and solutions for the elec-

trical installations market.

For an electriﬁed future

PRODUCT AREAS

Share of sales 2021

41%

18%

34%

PROJECT BUSINESS

Complete, customized

solutions ready for

installation.

TEMPORARY POWER

Power supply, lighting and

heating for construction

sites and events.

ELECTRICAL DISTRIBU-

TION PRODUCTS

3,500 products and com-

plete solutions for the electri-

cal installations market.

E-MOBILITY

All types of vehicle charging

with associated services.

20 | GARO ANNUAL REPORT

OPERATIONS

SWEDEN

Gnosjö

• Head Ofﬁce

• Sales ofﬁces

• Production of products

in Electrical distribution

products, E-mobility and

Project business

• Service and support

E-mobility

Värnamo

• Sales ofﬁces

• Production of products

in Temporary Power

Stockholm

• Sales ofﬁces

Luleå

• Development of software

FINLAND

Helsinki

• Sales ofﬁces

NORWAY

Drammen

• Sales ofﬁces

Birmingham

• Sales ofﬁces

IRELAND

Dublin

• Sales ofﬁces

NORTHERN

IRELAND

Belfast

• Sales ofﬁces

POLAND

Szczecin

• Sales ofﬁces

• Production of products

in Electrical distribution

products, E-mobility,

Project business and

Temporary Power

Export sales are made to

other countries in Europe

GARO ANNUAL REPORT | 21

OPERATIONS

GARO’s operations cover most of northern Europe for

which Sweden comprises the largest market with 69% of the

Group’s net sales. In Norway, Finland, Ireland, the UK and

Poland, GARO has sales companies with various distribu-

tion networks, while sales to other countries are conducted

through various partners and international contracts. Logis-

tics are operated by the production facilities in Sweden and

Poland. There is the opportunity for growth in several prod-

uct areas in the countries in which GARO is established.

The growing market for electric cars in Europe is creating

the need for charging infrastructure and therefore presenting

opportunities for establishing new operations.

ADAPTING TO THE MARKET

GARO adapts its offering and its products to local regula-

tions in electricity standards and regulations for construc-

tion and end use in each country. The Group’s extensive

experience has contributed to healthy knowledge of the

requirements and needs for different products in different

markets. A specially adapted range is developed for each

country in which GARO operates. Market efforts are run

and organized locally to offer customers the best expertise,

training and accessibility.

PRODUCTION

GARO has production facilities in three locations in Sweden:

one in Värnamo and two in Gnosjö, as well as a facility

in Szczecin in Poland. GARO owns productions processes

which provide good control over the entire production line,

and enables us to be ﬂexible and quickly adapt our products

to unique customer requirements. The Group strives continu-

ally to maintain an even capacity utilization, efﬁcient ﬂows

and low manufacturing expenses as well as strong sustain-

ability focus for successful manufacturing. Employees work in

a safe and developmental environment across the operations.

In January 2022, a decision was taken to invest in new

production and logistics facility in Poland to considerably

increase capacity in the GARO E-mobility business area. The

new facility will be built in close proximity to the existing facil-

ity, strategically located for the rapidly growing European

market, and is planned to consist of approximately 15,000

square meters. The facility is expected to be completed in

summer 2023. Through investments, the Group’s competitive-

ness is increasing in the growing European E-mobility market

and providing GARO with the opportunity of maintaining its

position as market leader. The facility will be designed with

a focus on the environment and sustainability, meaning that

energy-efﬁcient solutions in the property are a given.

22 | GARO ANNUAL REPORT

OPERATIONS

GARO develops products internally, which creates synergy

effects between the different product areas. For the Group,

this entails quick and cost-efﬁcient adaptation to new

solutions, regulations and market requirements, providing

good control and ﬂexibility. GARO’s product development

comprises software, digital solutions, electronics, mechani-

cal and electrical design.

EXTENDED SERVICE LIFE

An important aspect of product development is to develop

products with long service lives. This is achieved by invest-

ing in innovative material choices, smart constructions and

sustainable design. Products often require more kinds of

material, mainly consisting of metal and plastic. Recycled

plastic is used as far as possible. GARO is always looking

for new material with high functionality that can be used in

the products without risking jeopardizing safety, quality or

service life. One such material is Magnelis

, that has been

used for several years and will continue to be a natural

choice of material for GARO’s future outdoor products.

Using Magnelis-treated sheet metal entails reduced zinc

deposits during rainfall, and the production of which leads

to reduced environmental impact compared with non-

treated sheet metal. Read more about Magnelis

in the

Sustainability Report on pages 34–49.

For products to be easily disassembled, design is adapted

for products to be easily dismantled and for the different

components to be replaced with new functioning parts. This

saves resources and time and entails cost saving for end con-

sumers. In addition, focus during the year has been placed

on efﬁciently recycling products when they are obsolete by

ﬂexible dismantling that separates the various materials.

Developing products that are at the forefront of electrical

installation has always been a signiﬁcant aspect of GARO’s

success. Focus is on developing user-friendly and safe

products with a modern design and a long service life.

Product development

GARO ANNUAL REPORT | 23

OPERATIONS

SOFTWARE DEVELOPMENT

In 2021, major investments were made to develop GARO’s

offering in software development. This was to address

market expectations for connectable products and continue

to offer future-proof products.

The E-mobility product area is the area in which the

largest investments were made during the year. The market

for charger products is growing rapidly and GARO sees a

considerable need for new smart products and improved

charging infrastructure. This year’s software development

provides GARO with continued healthy prerequisites to

develop next generation charging stations and cloud ser-

vices. As a result, GARO has strengthened its expertise in

software development and how products can be updated

through cloud services. Increased digitalization impacts the

service life of products and GARO is working continually

to improve the ability to update the products’ software

digitally. The market continually dispenses new functional

requirements and it is necessary to fulﬁll these requirements

through software updates to extend product service lives.

INVESTMENTS IN TEST EQUIPMENT

In 2021, investments have been made on advanced

technology in GARO’s test equipment. More advanced and

automated technology secures products of the highest qual-

ity, while the development process is made more efﬁcient.

MATERIAL CONSUMPTION

For the production of GARO’s mature product range,

material consumption is continually reviewed in order to,

for example, be able to alter the sheet metal size of the

products where this is possible without jeopardizing quality.

This leads to lighter products which are advantageous for

both GARO and the company’s customers. This also entails

reduced material consumption in production, lighter prod-

ucts to install for technicians and reduced weight during

transportation, resulting in reduced emissions on the roads.

One example of where product development has resulted

in reduced material consumption is the development of the

new connection box in 2021 that was launched in 2022.

The box has been developed in collaboration with surface

ﬁnishing and coating experts to ensure a long service life

and reduced environmental impact. Material consumption

for the new connection box is 10–25% lower than previous

constructions for equivalent boxes.

PARTNERSHIPS

GARO has long-term partnerships with organizations in the

industry to continually maintain an exchange of knowledge

and increase the Group’s expertise in all product areas.

The organizations that GARO has long-term partnerships

with are those that share the ambition of contributing to the

transition to a more sustainable society. Partnerships are

important for GARO to continually be able to develop prod-

ucts in line with the technology of other market companies,

and in this way, future-proof its products. GARO maintains

close dialog with car manufacturers to ensure that our

charging stations are adapted to the coming generations’

smart vehicles. We believe that the standard consumer

wants to change vehicle more frequently than they want to

change charging station, which means that it is important

for GARO to maintain good knowledge about developing

its products for the next generation of vehicles.

Partnerships continued with the following organizations

in 2021:

• SEK. The Swedish government’s commission to establish

electrical standards in Sweden.

• EL. Electricity supplier in Sweden.

• SAFE. International organization that provides the

market with a technical solution to meet the German

Eichrecht standard, which regulates the way in which

vehicle chargers communicate their readings to end

users.

• Open Charge Alliance. Provides the Open Charge

Point Protocol (OCPP), a standardized global proto-

col for communication between charging poles and

charging operators.

• HUBJECT. An organization that enables electric car

drivers to charge their cars throughout Europe by regu-

lating roaming for charging operators.

INCREASED DIGITALIZATION IMPACTS THE SER-

VICE LIFE OF PRODUCTS AND GARO IS WORK-

ING CONTINUALLY TO IMPROVE THE ABILITY TO

UPDATE THE PRODUCTS’ SOFTWARE DIGITALLY.

24 | GARO ANNUAL REPORT

OPERATIONS

LOCAL SUPPLIERS

For the development projects that GARO has conducted

during the year, considerable focus has been on using local

suppliers in close proximity to our own production facilities

in both Sweden and Poland. This is to shorten transporta-

tion and lead times, enabling simpler logistics ﬂows and

reduced climate impact. For example, the Group’s primary

supplier of sheet metal is located in Gnosjö, creating

ﬂexibility and advantages for continued development and

access to material.

HIGH FUNCTIONALITY

All of GARO’s products are expected to have high func-

tionality. The products are continuously developed to

meet market requirements. One function that has become

increasingly important is smart charging, which means

that the consumer can conﬁgure their product for optimal

charging depending on the burdens and requirements of

the electricity grid. For example, charging can be conﬁg-

ured to commence only when the solar panels generate

electricity or that charging only takes place during the

night to beneﬁt from the surplus in the electricity grid at this

time. This creates cost advantages for the consumer and

reduced the need for long-term electricity grid expansion.

GARO is at the forefront of development for satisfying the

future requirements of consumers and contributing to more

efﬁcient energy consumption.

10–25%

USE OF LESS MATERIAL FOR

THE NEW CONNECTION BOX

COMPARED WITH PREVIOUS

DESIGNS OF THE SAME

TYPES OF BOXES.

GARO ANNUAL REPORT | 25

OPERATIONS

Electrical distribution products

creates simple, safe and

sustainable solutions

OFFERING

The product range consists of electrical distribution products

for the professional market and offers about 3,500 electrical

products and complete solutions with energy efﬁciency and

sustainability in focus. Complete distribution cabinets contain-

ing media, control and metering, exterior facades or ground

meter cabinets. Standard components, connectors, smart

engine heater outlets and electric posts for camping and

marinas are also part of the offering.

DEMAND CONTROLS DEVELOPMENT

Focus is on developing products that continually meet

the increasing security requirements of customers and the

market while meeting expectations in terms of energy-

efﬁcient solutions. Considerable focus is also on reducing

installation time for electrical installers and making their

jobs easier and safer.

The expectations and needs of end users change over time

but the need for energy-efﬁcient smart solutions is increasing

regardless of the industry and market, from both a sustain-

ability and a cost perspective. Demand to measure, govern

and control individual units such as an engine heater, a wall

box or solar panels on a property, is growing. In turn, this

creates considerable demand for energy meters and other

components in the product area.The primary end users in

Electrical distribution products are private individuals, tenant-

owner associations, property owners that are building a new

or renovating properties and camping site or marina owners.

GARO’s core expertise is to

develop and manufacture innova-

tive products and complete solu-

tions for the electrical installations

market and has its foundations in

the Electrical distribution products

product area.

41%

ELECTRICAL DISTRI-

BUTION PRODUCTS

ACCOUNTS FOR 41%

OF TOTAL NET SALES

Net sales Electrical

distribution products

Total net sales, Group

2017 2018 2019 2020 2021

100

200

300

400

500

600

Garo International

Garo Sweden

NET SALES IN ELECTRICAL

DISTRIBUTION PRODUCTS

MSEK

GARO Sweden GARO International

26 | GARO ANNUAL REPORT

ELECTRICAL DISTRIBUTION PRODUCTS PRODUCT AREA

Sales take place through wholesalers and products are

installed by external electrical installers.

CONNECTABLE CAMPING CHARGING STATIONS

With extensive experience from the manufacturing of

electric charging stations and engine heaters and a market

leading role in products for electric car charging, GARO

has a unique opportunity to quickly meet demand for a

combined product that is specially designed for the growing

camping trend. During the year, GARO launched the mar-

ket’s ﬁrst camping charging station with the ability to charge

two electric cars and electrical sockets for two camping

groups using the same installation. The charging station is

connected and designed to allow the easy implementation

of future technology and services.

LAUNCHES IN 2021

As a result of the increase demand and increased trend

for discrete façade meter cabinets, the product was also

launched with a black lacquered front during the year. This

means that GARO now has stocks of the recessed meter

cabinet in four standard colors: white, gray, red and black.

At the end of 2021, GARO launched IP65 enclosures, a

range of sustainable and water-tight enclosures for low-volt-

age distribution that can endure the Nordic climate.

2021 DEVELOPMENTS

The strong growth in the E-mobility product area during

the year has beneﬁted sales of components in Electrical

distribution products. Components such as energy meters

and load balancing combined with electric car charging

enable increased measurement and control of electricity

consumption.

Sales in Electrical distribution products are driven by new

construction, renovation and the energy efﬁciency of prop-

erties. The product area is the Group’s largest and accounts

for 41% of total sales. The market for Electrical distribution

products reported growth of 11% year-on-year, which is

assessed as stronger than the underlying market.

GARO ANNUAL REPORT | 27

ELECTRICAL DISTRIBUTION PRODUCTS PRODUCT AREA

E-mobility is leading the way

toward sustainable infrastructure

OFFERING

GARO presented its ﬁrst charging station back in 2008.

Many years of developing engine heaters formed the basis

of the early launch, and our range of charger products has

expanded signiﬁcantly since then. With wall boxes, public

charging poles, fastchargers, cable cabinets for power

supply, load balancing, control, software services and

measuring, we are creating vast ﬂexibility for our customers.

Together with partners, wholesalers, retailers and contract

customers, GARO offers the market charging stations that

are innovative, sustainable and easy to install and use.

All products that are released have undergone quality

tests and meet market requirements for safety and energy

consumption. In addition, all products are developed with

a focus on digital control and user simplicity. The products

can be connected and are thus able to share information

with one another, the car and the user. They can also

be connected to GARO’s payment services and external

payment services and share electricity consumption in an

efﬁcient way. Our offering also includes aftermarket services

and support, providing support for customers. In this way,

GARO is able to offer a complete solutions that is installa-

tion- and user-friendly as well as being cost-efﬁcient

for customers.

PERFORMANCE IN EUROPE

The increased demand for electric cars and chargeable

hybrid cars is driving the need for products in E-mobility.

The number of electric cars and chargeable hybrid cars on

the roads is increasing in the Nordic region and in Europe,

and the charging infrastructure must be rapidly expanded.

For GARO, this has led to further opportunities to develop

the range and cement the company’s position as a complete

solution supplier in the market.

GARO holds a strong position in the Nordic market. In

the European market, GARO notes a positive trend and

an increase in interest in its products. With the help of inno-

vative product development, products are designed based

on country-speciﬁc requirements and regulations in the

European market. This enables GARO to rapidly grow

in new markets.

In the UK, legal requirements have been introduced for

increased accessibility to charging stations in connection

with the construction of new buildings, such as housing and

ofﬁces. The aim of the new legislation, which will enter force

in 2022, is that it will become equally as easy to charge an

electric car as it is to refuel with gasoline or diesel. Read

more about market development on pages 16–19.

GARO is a signiﬁcant company

in Europe and one of the lead-

ing manufacturers of electric car

charging products in the Nordic

region. With a broad product

portfolio, the E-mobility product

area can offer all types of vehicle

charging with related services –

from wall boxes for single-family

homes or tenant-owner associ-

ations, to charging stations for

residential areas, companies,

service stations and other public

environments.

34%

E-MOBILITY

ACCOUNTS FOR 34%

OF TOTAL NET SALES

Net sales E-mobility

Total net sales, Group

2017 2018 2019 2020 2021

100

200

300

400

500

Garo International

Garo Sweden

NET SALES IN E-MOBILITY

MSEK

GARO Sweden GARO International

28 | GARO ANNUAL REPORT

E-MOBILITY PRODUCT AREA

STRONG PARTNER

With favorable innovation opportunities and our complete

offering of products and services, GARO will be a strong

partner in the market. GARO is partners with several major

companies such as E.ON, Fortum, OKQ8 and Vattenfall

as well as vehicle manufacturers, which generates new

strategical business opportunities. The pace of development

in the energy market remains high and energy companies

continue to play an important role for the end user. The rela-

tionship that energy companies have with their customers is

continually changing, and GARO has noted a trend toward

more long-term relationships and subscriptions for energy

companies. This means that the Group’s relationships with

energy companies and vehicle manufacturers is becoming

increasingly important. With the help of their platforms,

GARO receives access to new markets and opportunities to

introduce products to more European countries.

GARO is a long-term partner to its customers and

assumes complete responsibility with its commitment

throughout the entire process. Service and support is crucial

for procurements in major projects and for quick charging

in which customers demand a long-term solution and close

collaboration. The GARO service and support company EV

Charge Partner plays a signiﬁcant aftermarket role in E-mo-

bility. In addition to service and support, the company also

commissions charging infrastructure, primarily for charging

operators and power companies in Sweden and Poland.

INCREASED FOCUS ON E-MOBILITY

The new separation of business areas as of January 1,

2022 creates the focus for GARO E-mobility and enables

it to take advantage of the major opportunities that Europe

offers in the product area. It also enables the business area

to manage rapid growth, product development and, in

particular, to satisfy customer demand for charging infra-

structure. On all levels, the cornerstone for optimized sales

is an in-depth knowledge of the varied requirements of

the target groups. Using GARO’s value chain, distribution

travels via wholesalers, retailers or contract customers and

on to the market before ﬁnally reaching the end user. To

Bildtext camping xxxxxxxxx

GARO ANNUAL REPORT | 29

E-MOBILITY PRODUCT AREA

capture synergy effects related to expertise, major custom-

ers and the ﬂexibility to manage the rapid pace of growth,

the organization is governed across country borders. This

creates major opportunities for GARO to continue to be a

strong company in the market.

LAUNCHES IN 2021

In the spring, GARO’s range was expanded with a new

compact fastcharger, the Atle 24 kW. The new charging

station has a robust and compact design for simple instal-

lation on walls or a stand. It is a charging solution that

suits, for example, car buyers, repair stores or rental ﬁrms

who have a signiﬁcant need for faster charging. Atle is a

supplement to Althea, 50 kW, which is GARO’s fastcharger

adapted for quicker recharging in locations where visitors

pass by brieﬂy. Atle’s charging begins effortlessly after

identiﬁcation using a RFID tag. The touch screen offers a

number of languages, providing accessibility for everyone.

During the year, the ﬁrst charging station with both elec-

trical sockets and an electric car charger in the same instal-

lation was also launched for camping sites. Read more on

page 27.

2021 DEVELOPMENTS

The E-mobility product area is the product area in the

Group that is growing most rapidly, reporting growth of

52% for 2021 with favorable growth throughout the entire

product portfolio. The product area accounted for 34% of

the Group’s sales with strong growth, primarily in Sweden,

the UK and Finland as well as Group-external exports to

European export customers.

30 | GARO ANNUAL REPORT

E-MOBILITY PRODUCT AREA

GARO ANNUAL REPORT | 31

PRODUCT AREA PROJECT BUSINESS

Project business offers customer-

unique complete solutions

OFFERING

The complete product portfolio can power everything from

a small apartment to large-scale industry. GARO’s ready-as-

sembled distribution cabinets, cable cabinets and switchgears

are customer adapted based on a dialog with the electrical

installer. These complete solutions, which have been prepared

for easy assembly, offer the best total cost for the least effort.

UNIQUE TOTAL SOLUTION

GARO’s climate smart cable cabinet for power distribution

created new opportunities for the product area in 2021. The

cable cabinet has several valuable properties that create

synergies with the other product areas. In the Electrical

distribution products product area, fully conﬁgured electricity

and lighting cabinets are sold that are used to, for example,

supply power for homes and street lighting. When a facility

is built using E-mobility products, the need for power supply

combined with load balancing is, in the vast majority of

cases, essential. All of these functions are built in to the cable

cabinet, which makes GARO a complete solution supplier.

2021 DEVELOPMENTS

Demand in 2021 remained high in the product area as a

result of the beneﬁcial development of new construction, ren-

ovation and energy efﬁciency while strong growth in GARO

International has had a positive effect on sales. Growth in

the UK and Ireland totaled 87% during the year. The product

area accounted for 18% of the Group’s total sales.

In the Project business product

area, GARO provides customer-

unique solutions in the switchgear,

cable cabinets, distribution units

and apartment fuse boxes product

categories. The customer project

is adapted according to each

individual customer’s needs and

is delivered ready-assembled for

simple and safe on site installation.

The wide range in the product

category has provided GARO

with a market leading position

in terms of complete solutions in

low-voltage distribution.

18%

PROJECT BUSINESS

ACCOUNTS FOR

18% OF TOTAL NET

SALES

Net sales Project

business

Total net sales, Group

2017 2018 2019 2020 2021

100

150

200

250

Garo International

Garo Sweden

NET SALES IN PROJECT BUSINESS

MSEK

GARO Sweden GARO International

32 | GARO ANNUAL REPORT

PRODUCT AREA PROJECT BUSINESS

Temporary Power creates

a healthy work environment

at construction sites

OFFERING

GARO’s smart, safe and sustainable products, together with

extensive experience and expertise in the area, makes the total

offering a safe choice for companies in the construction sector.

Sales are mainly driven by new construction and the

renovation of major commercial buildings such as housing,

workplaces, shopping centers and hotels. At the same time,

demand for quality products with long durability is increas-

ing from companies in the construction sector. In Temporary

Power, we offer products with high energy efﬁciency, good

user-friendliness, a high level of safety and that are ergonomi-

cally designed to meet the need of a good work environment.

CLOSE PARTNERSHIPS

GARO has a close partnership with construction retailers and

wholesalers to increase the accessibility of products for the

construction and rental industries. Maintaining close dialog

with both retailers and end customers enables us to more

easily match the customers’ demand with our own offering,

which also contributes positively to our product development.

During the year, GARO expanded its partnership with

Cramo Sverige AB, which is one of Sweden’s largest compa-

nies in machine rental, equipment and rental-related services.

The partnership comprises all products in the product area.

2021 DEVELOPMENTS

During the year, GARO has noted that several rental com-

panies have begun to reinvest in new equipment following

a lower pace of investment in 2020. The product area

accounted for 7% of total sales, with sales increasing 49% in

Sweden, mainly driven by one individual customer who invest-

ed heavily. Sales in other markets remained at essentially the

same levels as 2020.

In the Temporary Power product

area, we are focusing on products

and solutions in temporary power

supply, lighting and heating for con-

struction sites and events. The prod-

uct area also provides locations

with electric car charging for tem-

porary use, which is advantageous

for larger construction projects or

more extensive events. The products

also contribute to a healthy working

climate on building sites through

heat supply, the desiccation of

damp and good work lighting.

TEMPORARY POWER

ACCOUNTS FOR

7% OF THE TOTAL’S

TOTAL NET SALES

Net sales

Temporary Power

Total net sales, Group

2017 2018 2019 2020 2021

100

Garo International

Garo Sweden

NET SALES IN TEMPORARY POWER

MSEK

GARO Sweden GARO International

GARO ANNUAL REPORT | 33

PRODUCT AREA TEMPORARY ELECTRIC INSTALLATIONS

SUSTAINABILITY REPORT

GARO’s operations are divided into four product areas and

the majority of manufacturing as well as all product devel-

opment takes place at our own premises. The suppliers

are mainly based in Europe, and through healthy business

relationships and clear requirement speciﬁcations, GARO

is able to ensure that suppliers meet the Group’s standard.

Purchased raw materials mainly comprise steel, plastic,

copper and corrugated cardboard, the origins of which are

evaluated before agreements are signed.

The company’s sustainability goals form the basis of the

Group’s day-to-day work and ensure that GARO meets

stakeholder expectations. GARO is to deliver products with

high safety standards, qualitative installations and strong

sustainable material to its customers and end users. All

employees at GARO and the Group’s suppliers’ employees

must have a safe, secure and health-enhancing workplace.

Investors must be assured that their investments have long-

term sustainability and contribute to the global transition

toward a sustainable future.

STAKEHOLDERS IN FOCUS

For GARO, it is a given to consider the Group’s stakehold-

ers and their expectations in the design of our sustainability

efforts. Their input is signiﬁcant for our efforts to maintain

a relevant and material nature. As such, ongoing dialog is

maintained with each stakeholder group. GARO designs its

sustainability work and develops its sustainability goals in

line with this data and other relevant information. The table

below describes the Group’s most important stakeholders

and their prioritized sustainability issues.

The Group bases its framework of GARO’s sustainability work on two

cornerstones: how proprietary operations are structured, and how GARO’s

product contribute to the transition to an electriﬁed society. GARO works

for an environmentally friendly, safe and enjoyable workplace in which

the Group assumes overall responsibility for the organization and the

value chain. The products and services that GARO provides create the

preconditions for a fossil-free society and, in this way, operations can

contribute to the transition to a carbon-neutral society.

STAKEHOLDER GROUP

Customers Employees Shareholders Suppliers

PRIORITIZED

ISSUES

Product safety and

secure installations

Sustainable

material choices

Anti-corruption

Health and safety

Anti-discrimination

Equality

Environmental

and social issues in

the supply chain

Climate impact

Anti-corruption

Quality and delivery

capacity

Anti-corruption

GARO – for a

smarter future

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 35

SUSTAINABILITY REPORT

GARO governs its sustainability work with the objective of always

developing. This is ensured through continually following up on

sustainability targets and updating policy documents.

Sustainability control

and the UN Sustainable

Development Goals

Responsibilities are divided based on area and the applica-

ble steering documents are revised every year. Operations

in Sweden, Poland and Norway have ISO 9001 and

14001 certiﬁcations, which are well established external

certiﬁcations for quality and the environmental management

system. Operations in Ireland and the UK are certiﬁed in

accordance with ISO 9001. By being certiﬁed, all of the

operational management systems, processes and proce-

dures undergo an annual external review which enables

GARO to continually develop and ensures that current

regulations are met. Sustainability efforts permeate the

entire Group.

SUSTAINABILITY REPORT

36 | GARO ANNUAL REPORT

MANAGEMENT SYSTEM, POLICIES

AND CODES OF CONDUCT

Policies

· Anti-corruption policy

· Operational policy

· Equality policy

· Whistleblower policy

· Purchasing policy

· Alcohol and drug policy

· Integrity policy

· Vehicle policy

· Sponsorship policy

· Insider policy

· Communication policy

Quality and environmental

management system

· ISO 9001:2015

· ISO 14001:2015

Codes of conduct

· GARO Group Code of Conduct

· Code of Conduct for suppliers

Board of Directors

Overall responsibility for the

company’s sustainability efforts

Strategic work and policies

Operational responsibility/

implementation

Understand and work based on policies

and sustainability frameworks

Group Management

Management

Employees

GOVERNANCE MODEL

GARO’s sustainability efforts are to contribute to the UN

Sustainable Development Goals (SDGs) and be in line with

the Paris Agreement. GARO has selected six of the SDGs

for which the Group creates value and contributes to the

global transition. To ensure that relevant operational targets

have been identiﬁed, continual follow-ups and assess-

ments are conducted throughout operations, including the

value chain. The table below maps the UN SDGs against

GARO’s prioritized sustainability issues and describes the

manner in which the Group contributes to each goal.

UN SDGs Targets Impact Important issues for GARO

7.1

Universal access to

modern energy services

GARO offers products and solutions that contribute to

renewable electricity production and a more energy-

efﬁcient society.

• Energy (accessibility,

efﬁciency)

8.8

Protect labor rights and

promote safe and secure

working environments for

all workers

GARO is responsible for all employees having decent

and fair working conditions, the opportunity for edu-

cation and a safe work environment. GARO always

has safety as its highest priority when developing new

products.

• Discrimination and equality,

• Human rights (social

conditions),

• Health and safety,

• Product safety

11.2

Provide access to

sustainable transport

systems for all

GARO’s safe and smart charging solutions contribute

to a sustainable and energy-efﬁcient vehicle ﬂeet and

infrastructure.

• Electriﬁed infrastructure

12.2

Achieve the sustainable

management and efﬁcient

use of natural resources

As a producer, GARO contributes to a more circular

society by designing products that make recycling com-

ponents easier. GARO works continually to increase

the proportion of reused materials in production.

• Material choices

• Replaceable components

13.1

Strengthen resilience

and adaptive capacity to

climate-related hazards

and natural disasters

GARO offers energy-efﬁcient products that contribute

to the electriﬁcation of society and thereby reduce the

burning of fossil fuels. Systematic climate efforts are

also conducted internally to reduce the climate impact

of operations.

• Climate (emissions, energy

consumption)

16.5

Substantially reduce

corruption and bribery

in all their forms

GARO has an international value chain in which the

Group has the opportunity of impacting how business

is conducted and there is zero-tolerance for corruption

throughout the value chain. Read more about these

efforts in the risks section on page 49.

• Zero tolerance of corruption in

the Group and its value chain.

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 37

GARO’s value chain is an important component for the Group,

impacting suppliers, customers and end users. At GARO, it

is important to have a good insight in how interaction takes

place in different stages of the value chain to continually

improve and contribute to positive development in the industry

and society at large.

GARO’s impact

in the value chain

RAW MATERIALS AND SUPPLIERS

The suppliers that GARO selects to enter strategic partner-

ships with are continually assessed to live up to the Group’s

requirements, both from a quality and a sustainability

perspective. In GARO, there is a work model in place that is

used together with suppliers to develop and achieve a more

sustainable joint working method. In 2021, regulations were

tightened for conﬂict minerals in the EU. This means that

GARO need to maintain a good insight of where minerals

originate and how compliance with laws can be ensured.

This is guaranteed through distinct requirement speciﬁca-

tions and evaluations of the purchases that are made.

GARO’s suppliers are mainly located in Europe, which

limits the risk of non-compliance with the Group’s Code of

Conduct. Structured and systematic efforts are ongoing to

respect human rights and for GARO to be able to conduct

ethically correct operations in all areas.

GARO

The majority of GARO’s products are produced in its

own premises, partly in Sweden and partly in Poland.

By remaining close to production, it is easier to ensure a

healthy work environment, shorten lead times and conduct

efﬁcient quality assurance of GARO’s products. Continual

assessments are made in production to improve the efﬁ-

ciency of processes and reduce resource waste. In addition,

continuous work to increase the share of renewable energy

in production is taking place, thus reducing the total climate

impact of operations. Digitalization and sustainability are

at the very top of the agenda for all product development

that takes place at GARO.

Employees are a central part of operations and GARO

works to create an enjoyable, inclusive environment where

friendliness, openness and a genuine GARO spirit per-

meate everything that is done. Individual development is

promoted in the Group and employees are encouraged for

further development and to try out new areas in the Group.

CUSTOMERS

The sales of GARO’s products and services takes place

through wholesalers, retailers and contract customers. By

maintaining a close relationship and conducting solu-

tion-oriented dialog, customer collaboration is developed

and stimulated. Wholesalers and retailers are provided

with access to market material and digital platforms. It is

of the utmost importance that these customers receive the

knowledge and training required to ensure correct manage-

ment of GARO’s products. Work is continually conducted

with customers to ensure that end customers and consumers

receive the best possible service.

SUSTAINABILITY REPORT

38 | GARO ANNUAL REPORT

Raw materials &

suppliers

GARO Customers End customers End users Reparation and

recycling

Components

Steel

Plastic

Copper

Containers

GARO SWEDEN

GARO AB

GARO Montage AB

GARO Elﬂex AB

WEB-EL

Försäljning AB

GARO E-mobility AB

EV Charge Partner

Sweden AB

Wholesalers

Retailers

Contract customers

Partners

Electrical installers

Industrial companies

Rental equipment &

machinery

Construction

companies &

housing

manufacturers

Contractors

Companies

Property owners

Tenant-owner

associations

Single-family

house owners

Municipalities

Campsites

Marinas

Reserve parts

Service and sup-

port

Recyclable material

GARO

INTERNATIONAL

GARO AS, Norway

GARO Electric Ltd,

Ireland

GARO OY, Finland

GARO Polska

Sp. z.o.o, Poland

GARO Electric Ltd,

END CUSTOMERS

For the installation of products, safety and knowledge

are key factors. Customers are placing increasingly high

environmental requirements, and the materials and contents

of products are now evaluated very thoroughly. During the

year, GARO continued to invest in training, both digitally

and physically with end customers, to ensure that installa-

tions are carried out in the correct way. As products are

digitalized and becoming more complex, the market’s

requirements for service, support and IT security are also

increasing. GARO is at the forefront of meeting these

requirements and offers qualitative, functional and safe

products.

END USERS

The end user’s needs the govern demand for products. For

the use of GARO’s products, the end user must be conﬁdent

that they have a product that will have a long service life.

Products that are produced at GARO must always be of

high quality, user-friendly, safe and energy-efﬁcient. The

relationship with the end user is important and it is partly

through their judgment that GARO can grow and create a

strong brand with high credibility.

REPARATION AND RECYCLING

Circular ﬂows are seen as a natural part of operations,

and they impact the design of the products. In the design

phase, components are adapted to be replaceable and any

reparations are to be carried out in a smart way. When

a product breaks, the primary objective is to always be

able to repair it instead of replacing it with an brand new

product. GARO provides reserve parts for the Group’s

product portfolio, leading to resource savings in all areas,

but it is also ﬁnancially advantageous for the end user. All

of GARO’s products can be recycled down to the smallest

component. It should be simple to dismantle all of the com-

ponents and sort them based on the recycling opportunities

available in each country.

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 39

ENVIRONMENTAL IMPACT OF TRANSPORTATION

In 2020, GARO signed up to the Swedish government’s

Fossil Free Sweden initiative that has identiﬁed a number

of different challenges for reaching the goal of being the

ﬁrst entirely fossil-free welfare state. GARO Sweden joined

the company car challenge, the solar challenge and the

transport challenge, the transport challenge being the only

one of these to remain for this ﬁscal year. In 2021, GARO

continued to work with making Swedish domestic transpor-

tation fossil-free by 2027. This target means that transpor-

tation should have at least a 70% reduction in emissions

compared with fossil alternatives. The challenge concerns

the entire value chain – both outsourced and own transpor-

tation – and is followed up on continually to ensure that the

challenge is completed in the allocated time.

ENERGY-SMART PRODUCTS

When GARO develops products, the objective is for them

to have high functionality, be energy- and cost-efﬁcient

while having the least possible environmental impact

throughout their life cycle. The products should be sus-

tainable in the long term and characterized by timeless,

modern design. Operations have a life cycle perspective

integrated in all product development projects and include

the entire GARO value chain, from the choice of materials

to reparation and recycling. Read more about life cycle

analysis on pages 44–45.

ENERGY EFFICENCY

GARO’s products are designed to contribute to reduced

energy consumption, thereby enabling them to contribute

to reduced CO

emissions. Regardless of the market or

industry, a great need persists today for energy-efﬁcient

solutions that reduce energy consumption. Products that

can monitor and control energy consumptions in real time

so that the conscious user can easily reduce their environ-

mental impact.

DESIGN WITH A LONG SERVICE LIFE

Products that can be used often and for a long time are the

foundation of GARO’s sustainability strategy. Customers

should be offered quality products that are manufactured

to endure harsh climates and daily use, thereby minimizing

resource waste. GARO strives for a modern and timeless

design for its products.

MANUFACTURING

GARO’s production facilities have an environmentally

friendly production process, which is highly valued by both

customers and end users.

GARO works to continually reduce its total environmental impact

and contribute to lowering global emission levels to achieve the

target of limiting global warming to under 1.5° C. The Group

provides products and services that enhance the efﬁciency of

electricity consumption and contribute to a fossil-free future.

Smart and efﬁcient

for a better environment

GARO’S SUSTAINABILITY GOALS AND OUTCOMES

Goals Outcomes

0 tons

The goal is that direct and indirect GHG emissions

from the Group’s own facilities in terms of electric-

ity and heating will be zero tonnes by 2025.

240 tons

In 2021, GARO’s emissions per sales declined

1.34% year-on-year.

100%

All electricity in the Group’s own facilities is to

come from fossil-free sources by 2025.

94.5%

In 2021, the share of electricity from fossil-free

sources increased 14.5%.

>98 %

Achieve a recycling level of over 98% by 2025.

84.5%

In 2021, total waste recycling increased about 6%.

SUSTAINABILITY REPORT

40 | GARO ANNUAL REPORT

GARO ANNUAL REPORT | 41

SUSTAINABILITY REPORT

SUSTAINABLE MATERIAL CHOICES

Market requirements are becoming increasingly stringent in

terms of the choice of materials, both from customers and

end users. GARO works continually for selecting sustain-

able materials and looks for new innovative solutions in the

market. The aim is to always minimize the use of materials

while retaining resistance, quality and adapting to the

applicable safety requirements.

One sustainable material is Magnelis

, an environmen-

tally friendly metal coating that provides GARO’s outdoor

products with superior self-healing properties and strong

resistance to corrosion in adverse environments and climate

conditions. As opposed to hot galvanized materials, Mag-

nelis

does not release zinc deposits, a major advantage

as zinc is a hazardous metal that negatively impacts the pH

value of watercourses. This then leads to altered habitats for

animals and plants which, on a global level, may entail an

increased threat for biological diversity.

The manufacturing of Magnelis

reduces hazardous emis-

sions by 80% compared with comparable material that is

used in today’s market. Magnelis

is used for GARO’s fast-

chargers, ground meter cabinets and cable cabinets and

evaluations take place continually of how more products

can be developed with the material.

THE AIM IS TO ALWAYS MINIMIZE THE USE

OF MATERIALS WHILE RETAINING RESISTANCE,

QUALITY AND ADAPTING TO THE APPLICABLE

SAFETY REQUIREMENTS.

42 | GARO ANNUAL REPORT

SUSTAINABILITY REPORT

ENERGY CONSUMPTION

GARO

EMISSIONS

GARO

RECYCLING LEVEL

GARO

MWh Tons CO

500

1,000

1,500

2,000

2021

2020

HeatElectricity

120

150

2021

2020

HeatElectricity

100

202120202019

2020 2021 2020 2021

Global plastic consumption amounts to approximately

300million tons per year, of which 5–13 million tons end

up directly in nature. GARO takes this issue seriously and

products are designed to the greatest extent possible with

a high proportion of either climate-smart or recycled plastic

granule. There is considerable value in using recycled plastic

instead of consuming raw materials, despite the somewhat

higher level of wear and tear that recycled plastic has on the

production of the operation’s plastic tools. By using recycled

plastic, GARO contributes to the reduced need of raw mate-

rials and prolongs the service life of the plastic.

GARO also uses a considerable amount of aluminum in

products, which has a longer service life and is a material

that can easily be managed in recycling processes. More-

over, GARO uses halogen-free cables instead of PVC that in

some cases, can be environmentally hazardous and, in the

worst case, even carcinogenic.

PACKAGING

GARO maintains continual focus on reducing its carbon

footprint with climate-smart packaging of products. In

2021, continued improvements were made and material

use has been made even more efﬁcient. Packaging was

optimized to reduce material consumption and the Group is

continually seeking out new technology and material.

ENERGY-SMART OPERATIONS

To operate modern and sustainable operations, it is a

given to continually work to make processes energy efﬁ-

cient and reduce emissions. In 2021, GARO’s emissions

per sales were identical year-on-year, which was a result

of various energy-efﬁciency measures. Through installed

solar panels on factory premises and the use of biogas

in several of the Group’s facilities in Sweden, GARO is

able to reduce total CO

emissions. Using biogas instead

of natural gas means that GARO reduces CO

emissions

by about 90% for heating and about 25% of total emis-

sions from operations. At the end of 2021, GARO had

425 solar panels that accounted for about 2% of total

energy consumption during the year. In 2021, GARO’s

total energy consumption amounted to 1,911 MWh for

electricity and 1,128 for heating, which is a year-on-year

reduction per sales.

In 2021, waste recycling increased about 6%. The

increase was the result of efﬁciency improvements for waste

management and reducing material waste and waste to

landﬁll. GARO’s objective is that no waste goes to landﬁll.

GARO operates based on the EU waste hierarchy, which

mainly involves work to minimize and reuse resources.

When this is not possible, waste is recycled and, in a last

case scenario, waste goes to landﬁll.

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 43

Life cycle analysis

of charging stations

LIFE CYCLE ANALYSIS

The charging station is a product with a strong connection

to sustainable infrastructure and that contributes to the

reduced use of vehicles with fossil fuels. It is also a product

that can be considered an ambassador for other E-mobility

products and that presents a general image of the products’

service lives. The aim of the charting was to understand

the product’s resource ﬂows and emissions during its entire

service life as well as to identify how GARO can continue to

develop products adapted to a more climate-smart society

and how GARO can become more climate-smart itself.

Electrical components, 15%

Plastic, 5%

Steel, 6%

Copper/plastic, 8%

Aluminum, 51%

Corrugated cardboard, 15%

Other, 1.5 %

Suppliers

Material

recycling

Electricity

production

Transport

Assemblage GARO

Distributors

End of life

Use and service

Component-/raw

material producers

METHODOLOGY

The analysis is based on ISO 14025, an international stan-

dard for environmental declarations. The collection of data

from all suppliers concerned has been carried out, in which

they have been asked to supply product-speciﬁc information

for each component as well as transportation choice and

distance. Data has been collected from both the ﬁrst and

second line of suppliers. Moreover, data from GARO’s

own operations has been collective, which includes the

description of weight and primary material choice for

each component. In certain cases, generic data has

been used to ensure that all phases of the service life

have been included.

SUPPLIERS AND CHOICE OF MATERIALS

The manufacturing of LS4s is conducted at GARO’s prem-

ises in Gnosjö, but its components are part of a complex

value chain that includes several international suppliers.

Nine different material compositions make up LS4s in

which aluminum comprises half of the product’s total

weight. The aluminum used is purchased from a local

supplier about 150 km from the factories in Gnosjö. The

remaining material is mainly purchased from European

suppliers. Together with the electrical components used

in the product, aluminum accounts for 94% of the total

emissions from materials in the product’s service life.

To understand GARO’s environmental impact and

improve environmental efforts, GARO implemented

a process for assessing and reporting the

total environmental impact of products.

In 2021, GARO decided to conduct a life

cycle analysis for the LS4 charging station

for electric and hybrid vehicles.

SUSTAINABILITY REPORT

44 | GARO ANNUAL REPORT

*) Nordic average mix 89.6 g of CO2e per kWh

**) Consumption fossil-fuel cars 170 g CO

e per km

Service life phase Proportion

Production

Transportation between suppliers 0.1%

Transportation to GARO AB 0.4%

Energy consumption for the manufacturing

of components

2.0%

Production of raw materials and components 52.5%

Energy emissions GARO Gnosjö 0.5%

Total production 55.5%

Distribution

Transportation to distributors 0.1%

Total distribution 0.1%

Use and service

Use excluding vehicle charging 39.3%

Service 5.0%

End-of-life 0.1%

Total use and service 44.4%

Total 100%

RESULTS AND ANALYSIS

The entire product’s service life was charted and the point

of the service life that creates the largest environmental

impact was identiﬁed. The results show that more than half

of CO

emissions occur during production, including direct

emissions and those from subcontractors. In addition, almost

40% of emissions in the user phase occur when the product

is in standby mode, based on consumption taking place

with a Nordic energy mix. In total, LS4s release 600.2 kg

during their service lives, excluding vehicle charging.

During the service lives of LS4s, total emissions amount to

about 21.4 tons of CO

including total charging of vehi-

cles performed. This is based on 20,000 charging occasions

over a 15-year period where a Volvo V60 Twin Engine is

used as an example vehicle. To place this in context, this is

equivalent to total savings of 240 tons of CO

e compared

with a fossil-dependent vehicle

. Assuming that Sweden will

achieve its ambition to be 100% fossil-free by 2030, the

total reducing will be 263 tonnes of CO

e. In conclusion,

regardless of energy mix, GARO’s innovative LS4 charging

stations will contribute to societal emission reductions, some-

thing that GARO is incredibly proud of. Through additional

smart product development, the Group could reduce emis-

sions even more, thus ensuring that it – together with its sup-

pliers – contributes to reducing the global climate impact.

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 45

By focusing on people, GARO assumes an overall responsibility in

sustainability which leads to healthy employees who contribute to

maintaining favorable operational development. It is important to

be part of society and to be part of creating a feeling of solidarity

between employees and their surrounding community.

Employees in focus

GARO GROUP’S SUSTAINABILITY GOALS

AND OUTCOMES

Goals Outcomes

GARO has a zero

vision for work-

place accidents.

During the year, 18 acci-

dents were reported,

which is a year-on-year

decline of 14.3%.

STRONG CORPORATE CULTURE

Openness, friendliness and pride are the foundations of

GARO’s corporate culture and symbols of the GARO spirit.

Regardless of position, everyone should be treated in the

same way, and active and close management is the key

to success. Each year, employee surveys are conducted

to ensure that all employees are content and feel that they

have the opportunity of developing together with GARO.

Skilled and committed employees contribute to GARO’s

strong corporate culture. Respect is highly valued and the

aim to create an enjoyable work environment in which

everyone wants to go that extra mile to contribute to opera-

tions. At GARO, it is a given that all employees should feel

a sense of belonging and remain motivated and committed

to their work. Commitment creates a long-term approach

for everyone’s work and affects the design of the continued

development of operations. Employees at GARO are to

be good ambassadors for the Group and proud over their

workplace. This does not only strengthen the brand and

corporate culture, but also contributes to the continued

development of operations while retaining strong relation-

ships with the company’s stakeholders.

PERSONAL DEVELOPMENT

GARO is to be an attractive workplace, which means that

favorable development opportunities and good prereq-

uisites for a career in the Group are on offer. GARO has

its manufacturing process in both Sweden and Poland,

creating opportunities for each country’s operations to take

advantage of each other’s lessons, culture and knowledge.

In turn, this results in development opportunities in the differ-

ent units and the total offering in the Group is strengthened.

Employees that have previously worked in, for example,

assembly, have transitioned to sales and, with combined

knowledge, arrived at new insight for both departments.

All employees have annual appraisals with their

immediate managers where they discuss both short- and

GROUP EMPLOYEES GROUP MANAGEMENT HEALTH AND SAFETY

Gender distribution, % Gender distribution, % Quantity

100

Women Men

100

Women Men

Accidents Incidents

2021

2020

2019

2019 2020 2021

SUSTAINABILITY REPORT

46 | GARO ANNUAL REPORT

long-term goals in terms of work duties, skills development

and opportunities of further training in the Group. This pro-

cess helps to identify the needs of employees at the same

time as valuable knowledge is deﬁned within the Group.

GARO is to be a long-term attractive employer in which its

employees feel acknowledged and are offered developing

and challenging work tasks, regardless of where in the

Group they ﬁnd themselves.

DIVERSITY AND EQUALITY

Everyone is welcome at GARO, regardless of gender,

ethnicity, sexual orientation or disability. There is consider-

able value in having cultural diversity with even age and

gender distribution throughout operations. This creates

a successful corporate culture. GARO always strives to

achieve an even employee composition and to have more

women in senior positions. At the end of the year, Group

Management consisted of one woman and ﬁve men.

GARO has an equality policy that prevents discrimination

from occurring. All employees must study the equality

policy when ﬁrst employed. In addition, GARO has a whis-

tleblower system that all employees are aware of and have

access to. Employees can use the whistleblower system to

report any irregularities entirely anonymously.

FUTURE COLLEAGUES

Many of GARO’s employees are staying for a long time

in the Group, regardless of where in the organization

they began their journey. This is something that we are

pleased to highlight and Skriv 10-, 20, 30 and 40-year

anniversaries are celebrated each year. By offering favor-

able employment conditions and a developing workplace,

GARO is a highly regarded employer. It is important to also

be a sought-after employer from an international perspec-

tive to attract different kinds of expertise to the Group. At

the same time, GARO is engaged in local high schools’

electricity programs, offering pupils with internships to raise

curiosity. In many cases, this also leads to employment in

the Group. In 2021, GARO has collaborated with colleges

and universities in both Sweden and Poland.

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 47

Active company in society

It is naturally important for GARO to take social responsibil-

ity, both at an overall level and a local one in the locations

where the Group operates. It is also an opportunity for

GARO to take part in people’s everyday lives. GARO

shows a large amount of dedication in local operations.

The projects that are sponsored will create value, provide

joy and contribute to continued development for the regions

in which GARO operates. In this way, these regions will

become attractive locations to live and work in.

GARO possesses a signiﬁcant function as an employer

and as such, the Group supports local schools and stu-

dent activities to reach out to new employees who could

become part of GARO’s journey of success. Being an

active employer in society entails GARO being presented

with the opportunity to create healthy partnerships with

the local business community, contributing together to

positive development.

CHILDREN AND YOUNG ADULTS A PRIORITY

GARO sponsors sports clubs and recreational activities

in our local areas. Protecting operations for children and

young adults is given extra focus since GARO wants to

contribute to active childhoods and create social and

valuable communities.

HEALTH AND MEDICAL DEVELOPMENT

GARO’s social commitment also travels further aﬁeld.

This can involve grants to foster a more sustainable

lifestyle, drive medical science or spread happiness to

children who are ill. GARO supports different national

initiatives and charities continually during the year.

SOCIAL COMMITMENT

SAFE, HEALTHY ENVIRONMENT

GARO’s production environment is clean, bright and with-

out noise, and designed with employee safety in focus. All

employees have an ergonomically designed workplace that

is adapted based on individual requirements and disabil-

ities. It is a given that health and safety requirements are

complied with and GARO conducts inspection rounds in

all producing units twice a year. GARO continually follows

up on health and safety issues and any reported incidents

to ensure good health for everyone in the Group. Regular

training is conducted for all employees in health and safety

issues, including CPR, ﬁre evacuation and ergonomics.

Physical activity is encouraged and every employee is

offered a ﬁtness subsidy and occupational healthcare ser-

vices. This creates the best opportunities for all employees

to thrive at the workplace. In general, GARO has very low

absenteeism, which includes long-term sick leave. The goal

is for consistently low sick leave, regardless of work tasks

and country. In 2021, the share of short-term sick leave was

1.24% and long-term sick leave was 1.12%.

GARO’S GUIDELINES IN BRIEF

The guidelines apply to the entire operations, including all

partners and suppliers, regardless of where in the world

they operate. All processes and projects must always oper-

ate in accordance with these guidelines.

• GARO supports, respects and guarantees the protection

of internationally accepted human rights.

• GARO offers employees the right to form and join

organizations they choose themselves, and to negotiate

collective agreements.

• Child labor must never occur within the operations or

at any partner.

• GARO has zero tolerance towards discrimination,

violence or harassment irrespective of gender, sexual

orientation, ethnicity, religion or other religious beliefs,

disability or age.

• GARO has zero tolerance toward all forms of corruption,

bribery or unethical business methods. All employees are

responsible for identifying, complying with and respecting

local laws, regulations, and rules in the countries where

the Group operates and does business.

SUSTAINABILITY REPORT

48 | GARO ANNUAL REPORT

Various kinds of risks arise throughout GARO’s operations and

value chain, from both environmental and social perspectives. For

the production of GARO’s products, raw materials are used that

could present human rights and work condition risks. Risks have

also been identiﬁed related to own operations, including work

environment risks, mental health and discrimination. Refer to the

table for the efforts taken to minimize these risks.

GARO’s sustainability risks

GARO’s areas Risk Risk management

Resource consumption Conﬂict minerals, resource shortages According to GARO’s Code of Conduct, products must not contain

conﬂict materials (tin, tantalum, tungsten and gold) that are originated

from conﬂict-affected and high-risk areas.

Environmental impact Pollution and emissions All of GARO’s companies must have a certiﬁed environmental manage-

ment system in accordance with ISO 14001 or a corresponding own

non-certiﬁed system. The fundamental requirement is that each company

in the Group must systematically follow up on their environmental

impact with the aim of limiting their environmental impact.

Skills supply Loss of or lack of qualiﬁed personnel Continual work is performed for ensuring a safe and secure workplace

with employees who develop and are satisﬁed. GARO is to provide

attractive working conditions with a focus on ﬂexibility and development.

Discrimination Discrimination by gender, age,

origin, religious beliefs, sexual

orientation.

GARO has zero tolerance towards discrimination, violence or harass-

ment irrespective of gender, sexual orientation, ethnicity, religion or

other religious beliefs, disability or age. This is complied with the help

of the company’s equality policy.

Health and wellbeing Psychosocial risks (stress/exhaustion/

strain injuries).

In accordance with GARO’s Code of Conduct, the Group’s employees

are to have a safe and healthy work environment. Measures to prevent

and manage possible incidents, accidents and diseases at the work-

place must always be taken. GARO conducts continual follow-ups of

employee wellbeing through dialogs and offering health-enhancing

activities.

The value chain Inadequate compliance with GARO’s

Code of Conduct for suppliers.

GARO has a Code of Conduct for suppliers that all parties must agree

to before a partnership is entered into. This minimizes the risk of irregu-

larities in the value chain.

Human rights Lack of respect for human rights GARO’s Code of Conduct states that the Group is to support and

respect the protection of internationally recognized human rights and

ensures to avoid contributing to any violation of human rights. Child

labor must never occur within the operations or at any partner.

Ethical business The occurrence of corruption

and bribes

GARO has zero tolerance toward all forms of corruption, bribery or

unethical business methods. All employees are responsible for identify-

ing, complying with and respecting laws, regulations, and rules in the

countries where the Group operates and does business.

SUSTAINABILITY REPORT

GARO ANNUAL REPORT | 49

Auditor’s report

on the statutory

sustainability statement

To the general meeting of the shareholders of GARO AB (publ),

corporate identity number 556051-7772

ENGAGEMENT AND RESPONSIBILITY

It is the Board of Directors who is responsible for the statutory

sustainability statement for the year 2021 on pages 34–49

and that it has been prepared in accordance with the Annual

Accounts Act.

THE SCOPE OF THE AUDIT

Our examination has been conducted in accordance with

FAR’s auditing standard RevR 12 The auditor’s opinion

regarding the statutory sustainability statement. This means

that our examination of the corporate governance statement

is different and substantially less in scope than an audit

conducted in accordance with International Standards on

Auditing and generally accepted auditing standards in

Sweden. We believe that the examination has provided us

with sufﬁcient basis for our opinions.

OPINIONS

A statutory sustainability statement has been prepared.

Jönköping 8 April 2022

Ernst & Young AB

Joakim Falck

Authorized Public Accountant

THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL

SUSTAINABILITY REPORT

50 | GARO ANNUAL REPORT

GARO ANNUAL REPORT | 51

SUSTAINABILITY REPORT

SHARE PRICE AND AVERAGE VOLUMES 2021

GARO’s share has been listed on Nasdaq Stockholm since

March 2016 and has been part of the Mid Cap segment

since January 2, 2018. Shares are traded under the ticker

name GARO.

A total of 15.7 million GARO shares were traded in

2021. The average daily volume during the year amounted

to 62,120 shares. On the ﬁnal trading day of the year, the

share price closed at SEK 216 (127, adjusted for the share

split), an increase of 70% compared with the closing price

on December 31, 2020. GARO’s market value on Decem-

ber 31, 2021 was MSEK 10,800.

SHARE SPLIT

The Annual General Meeting in May resolved to increase

the number of shares in the company by replacing each

share with ﬁve new shares of the same type (a 5:1 share

split). The record date for the share split was May 26,

2021. The share split entailed that the number of shares in

the company increased from 10,000,000 to 50,000,000

and that the quotient value of the shares changed from

SEK2.00 to SEK 0.40.

The ﬁnal day of trading of the company’s shares before

the share split was May 24, 2021. The ﬁrst day of trading

of the company’s shares following the share split was May

25, 2021. In conjunction with the share split, the ISIN

changed and is now SE0015812417.

CONVERTIBLES, WARRANTS, ETC.

GARO has no outstanding warrants, convertibles or other

share-related ﬁnancial instruments.

DIVIDEND

GARO’s dividend policy is that the dividend shall amount

to around 50% of the net proﬁt after tax. The dividend

proposal must take into account GARO’s long-term dividend

potential and the Group’s general investment and con-

solidation requirements. The Board of Directors proposes

a dividend of SEK 1.40 (0.95) for the 2021 ﬁscal year,

corresponding to 42% of proﬁt per share.

Through regular information disclosure to shareholders and the remainder

of the capital market, GARO aims to efﬁciently and correctly create a fair

image of the operations’ performance, minimize the risk of speculation

and rumors being spread and increase interest in the company’s share.

The aim is to maintain continual dialog with the Group’s stakeholders.

The GARO share

52 | GARO ANNUAL REPORT

THE GARO SHARE

DATA PER SHARE (ADJUSTED FOR THE SPLIT)

Data per share 2021 2020 2019 2018 2017

Earnings per share, SEK 3.33 1.91 1.71 1.74 1.71

Cash ﬂow from operating activities per share, SEK 2.43 1.74 2.43 1.48 1.03

Equity per share, SEK 11.03 8.60 6.86 5.92 5.06

Average number of shares (thousands) 50,000 50,000 50,000 50,000 50,000

Number of shares at the end of the period (thousands) 50,000 50,000 50,000 50,000 50,000

THE 10 LARGEST SHAREHOLDERS AT DECEMBER 31, 2021 (FROM EUROCLEAR)

Shareholders Number of shares Share capital, % Votes, %

Svensson, Lars 17,841,725 35.7 35.7

Swedbank Robur Funds 4,675,344 9.4 9.4

Svolder Aktiebolag 4,364,553 8.7 8.7

SEB Investment Management 1,901,695 3.8 3.8

Stefan Jonsson Invest AB 1,740,425 3.5 3.5

Spiltan Fonder AB 1,735,662 3.5 3.5

State Street Bank and Trust Co 1,482,822 3.0 3.0

Nordea Nordic Small Cap Fund 1,399,044 2.8 2.8

Third Swedish National Pension Fund 1,300,000 2.6 2.6

Carnegie Investment Bank Filial, AF 1,234,527 2.5 2.5

Total, largest shareholders 37,675,797 75.5 75.5

Total, other shareholders 12,324,203 24.5 24.5

Total number of shares 50,000,000 100.0 100.0

SIZE CLASSES OF OWNERSHIP STRUCTURE AT DECEMBER 31, 2021 (FROM EUROCLEAR)

Holding Number of shareholders Number of shares Share capital, % Votes, %

1–500 12,870 1,218,077 2.4 2.4

501–1,000 791 616,414 1.2 1.2

1,001–5,000 627 1,335,155 2.7 2.7

5,001–10,000 67 509,320 1.0 1.0

10,001–15,000 17 206,402 0.4 0.4

15,001–20,000 13 234,290 0.5 0.5

20,001– 88 45,880,342 91.8 91.8

Total 8,774 50,000,000 100.0 100.0

GARO OMX Stockholm PI

SEK

SHARE PRICE DEVELOPMENT FROM THE IPO

March 16, 2016–December 31, 2021

100

150

200

250

NOV 2021

SEP 2021

JUL 2021

MAY 2021

MAR 2021

JAN 2021

NOV 2020

SEP 2020

JUL 2020

MAY 2020

MAR 2020

JAN 2020

NOV 2019

SEP 2019

JUL 2019

MAY 2019

MAR 2019

JAN 2019

NOV 2018

SEP 2018

JUL 2018

MAY 2018

MAR 2018

JAN 2018

NOV 2017

SEP 2017

JUL 2017

MAY 2017

MAR 2017

JAN 2017

NOV 2016

SEP 2016

JUL 2016

MAY 2016

MAR 2016

GARO ANNUAL REPORT | 53

THE GARO SHARE

54 | GARO ANNUAL REPORT

BOARD OF DIRECTORS’ REPORT – GROUP

Board of Directors’ Report

for the Group

The Board of Directors and the President and CEO of GARO

AB (publ), Corporate Registration Number 556051-7772,

hereby submit the Annual Report and consolidated ﬁnancial

statements for the 2021 ﬁscal year. All amounts are stated

in MSEK unless speciﬁed otherwise. Amounts in parentheses

pertain to the preceding year.

OPERATIONS

GARO is a group that develops, manufactures and markets

innovative products and turnkey solutions for the electrical instal-

lations market under its own brand. In its four product areas of

Electrical distribution products, E-mobility, Project business &

Temporary Power, the Group supplies products and complete

solutions with a focus on electrical safety, user-friendliness and

sustainability. Over its more than 80-year history, GARO has

established strong customer relationships and a highly devel-

oped supplier network that, combined with proprietary produc-

tion and sales units, form a platform for delivering innovative,

complete solutions.

GARO’s main customer group is electrical wholesalers,

although the company also has good relationships with end

customers that comprise electrical installers, original equipment

manufacturers (OEMs) and industrial companies as well as

tenant-owner associations and private individuals. The company

has operations in Sweden, Norway, Finland, Ireland, the UK

and Poland. The Group is organized in two business areas:

GARO Sweden and GARO International.

The GARO share has been listed on Nasdaq Stockholm since

March 16, 2016.

SIGNIFICANT EVENTS DURING THE

REPORTING PERIOD

On January 1, 2021, GARO completed an incorporation of the

Swedish division of the E-mobility product area by transferring

operations to the wholly-owned subsidiary GARO E-mobility AB.

The purpose of the incorporation is to sharpen focus, intensify

our development activities and to further broaden and strengthen

our offering to the market.

The 2021 Annual General Meeting resolved on a 5:1 share

split, meaning that each existing share was replaced with ﬁve

new shares. The share split was completed during the second

quarter.

GARO reported organic growth of 25% in 2021 compared

with the preceding year.

During the year, the GARO Sweden business area recorded

growth of almost 28%, while growth in the E-mobility product

area amounted to 75% compared with 2020. The Electrical

distribution products product area reported growth of 7% and

the Temporary Power product area reported growth of 49%,

while the Project business product area essentially remained at

the same level as 2020.

During the year, the GARO International business area

recorded growth of 17%, in which the largest growth of 58%

was recorded in the Project business product area compared

with 2020.

The Electrical distribution products product area reported

growth of 17% and the E-mobility product area reported growth

of 3%, while the product area Temporary Power remained at the

same level as 2020. GARO Poland’s sales and production con-

tinued to increase in line with rising volumes, where an increase

in production efﬁciency has been achieved.

EVENTS AFTER THE END OF THE FINANCIAL PERIOD

For increased focus and clarity, GARO has reported operations

divided into the business areas of GARO Electriﬁcation and

GARO E-mobility since January 1, 2022.

In addition, a decision was made to invest in a new produc-

tion and logistics facility in Poland with construction starting in

the second quarter of 2022. The facility will be constructed in

close proximity to the existing establishment, close to the Euro-

pean market and with favorable logistics conditions. The invest-

ment is expected to amount to about MSEK 85.

At the time of writing, the situation in Ukraine and the

COVID-19 pandemic are not deemed to have any notable impact

for GARO and its operations. However, due to the situation

unfolding in Ukraine, future access to components is uncertain.

SUSTAINABILITY REPORT

In accordance with Chapter 6, Section 11 of the Annual

Accounts Act, GARO AB has chosen to prepare the statutory

Sustainability Report as a separate report from the Annual

GARO ANNUAL REPORT | 55

BOARD OF DIRECTORS’ REPORT – GROUP

SUMMARY OF THE GROUP’S FINANCIAL PERFORMANCE

MSEK 2021 2020 2019 2018 2017

Net sales 1,295.8 1,039.8 1,008.1 903.7 796.0

EBITDA 243.0 163.2 134.9 128.8 110.3

EBIT 207.2 136.2 112.6 113.8 98.1

EBIT margin % 16.0 13.1 11.2 12.6 12.3

Total assets 936.9 743.3 657.4 565.8 533.9

Equity ratio % 58.9 57.9 52.2 52.4 47.3

Return on equity % 34.0 24.7 26.8 30.1 38.3

Average number of employees 460 409 420 398 345

For deﬁnitions of key ﬁgures, see Note 30 page 88.

Multi-year summary

Report. The Sustainability Report was submitted to the auditors at

the same time as the Annual Report. The Sustainability Report is

presented on pages 34–49 of this document.

NET SALES AND EARNINGS

Net sales increased 25% to MSEK 1,295.8 (1,039.8). Underly-

ing demand, primarily in the E-mobility product area, was strong

during the year. EBIT amounted to MSEK 207.2 (136.2), corre-

sponding to an EBIT margin of 16.0% (13.1).

EBIT was positively impacted by higher sales volumes primar-

ily in the E-mobility product area and a favorable product mix.

Expenses in relation to net sales were somewhat lower com-

pared with the preceding year, primarily as a result of strict cost

control and lower market activity given that the pandemic con-

tinued to impact operations in 2021. The Group’s net ﬁnancial

items amounted to MSEK 1.2 (-13.1) in 2021, in which EUR has

remained relatively stable against SEK.

The Group’s income after ﬁnancial items amounted to

MSEK208.4 (123.1). The tax expense for the period amounted

to MSEK 41.7 (27.7), corresponding to a tax rate of 20.0%

(22.5). Proﬁt after tax was MSEK 166.7 (95.4). The Group’s

operations in Poland are conducted in a tax-exempt Special

Economic Zone where unutilized tax beneﬁts can be utilized

until 2026.

INVESTMENTS

GARO invests continuously in the maintenance of production

units and production equipment. The Group’s investments in

tangible assets amounted to MSEK 18.8 (15.0), of which invest-

ments in properties and land amounted to MSEK 2.2 (7.8).

GARO also invests in product development and investments in

intangible assets for the year totaled MSEK 26.5 (24.6).

The company has invested in right-of-use assets (leases and

rental contracts) amounting to MSEK 7.0 (9.8) during the year.

Depreciation/amortization for the year amounted to MSEK 35.8

(26.9), of which depreciation of tangible assets was MSEK 24.2

(22.5).

CASH FLOW, LIQUIDITY AND FINANCIAL POSITION

Cash ﬂow from operating activities amounted to MSEK 121.7

(86.9). A higher EBIT was offset during the year by high tied-up

working capital compared with 2020, which was mainly due

to higher component inventories and accounts receivable as

a result of tactical material purchases and growth in general.

GARO repaid MSEK 6.2 (1.5) net of previously raised loans in

2021. Cash ﬂow for the year amounted to MSEK 11.9 (28.9).

Cash and cash equivalents including unutilized overdraft facil-

ities on December 31, 2021 amounted to MSEK 182.0 (166.7).

Net cash on December 31, 2021 amounted to MSEK 9.4 (net

debt: 11.3). Adjusted net cash amounted to MSEK 45.2 (26.8).

The difference between these performance measures is due to

the effects of IFRS 16 Leases.

The Group’s equity on December 31, 2021 amounted to

MSEK 551.5 (430.3). The 2021 dividend amounted to MSEK

47.5 (0.0). Refer also to Note 3.2.

EMPLOYEES

The number of full-time employees in the Group on December

31, 2021 was 498 (412). The average number of full-time

employees in 2021 was 460 (409). The number of employees

in the Group’s foreign companies on December 31, 2021

amounted to 214 (172), corresponding to 43% (42) of the total

number of employees. The percentage of women during the year

was 43% (43). For more information about employees, see Note

8 pages 74–78.

REMUNERATION OF SENIOR EXECUTIVES

Information about the remuneration of senior executives can be

found in Note 8 on pages 74–78.

PERFORMANCE AND EARNINGS

OF GARO SWEDEN SEGMENT

Net sales increased 28% to MSEK 892.6 (698.1).

Underlying demand was strong for the E-mobility product

area, in which growth amounted to 75% compared with 2020.

56 | GARO ANNUAL REPORT

BOARD OF DIRECTORS’ REPORT – GROUP

Group-external exports, which increased almost 300% year-on-

year, are included in the growth in the E-mobility product area.

The Electrical distribution products product area reported growth

of 7% and the Temporary Power product area reported growth

of 49%, while the Project business product area essentially

remained at the same level as 2020. It is GARO’s assessment

that the companies captured market shares during the year

mainly in the Electrical distribution products and E-mobility prod-

uct areas. EBIT amounted to MSEK 151.5 (90.2), correspond-

ing to an EBIT margin of 17.0% (12.9). A favorable product

mix and good cost control are the primary reasons behind the

improved EBIT.

PERFORMANCE AND EARNINGS OF

GARO INTERNATIONAL SEGMENT

Net sales in the GARO International business area increased

17% to MSEK 402.3 (342.3). The largest growth of 58%

was recorded in the Project business product area compared

with 2020.

The product area Electrical distribution products recorded

growth of 17% and the product area E-mobility recorded growth

of 3%, while the product area Temporary Power remained on

the same level compared with 2020. The weaker growth in

the E-mobility product area is a result of a weaker sales perfor-

mance in Norway due to increased maturity, primarily in home

charging, compared with the preceding year. GARO Poland’s

sales and production continued to increase in line with rising vol-

umes, where an increase in production efﬁciency was achieved

during the year.

EBIT amounted to MSEK 55.7 (46.0), corresponding to an

EBIT margin of 13.9% (13.4). General strict cost control and

limitations to market activities due to the pandemic continuing

to impact operations in 2021 are the main reasons for the

increased EBIT.

PRODUCT DEVELOPMENT

GARO’s aim is to be at the forefront of developments in envi-

ronmentally friendly and energy-efﬁcient electrical products and

complete solutions. GARO has an in-house product development

department that continuously works together with other depart-

ments on developing new and improving existing products and

solutions in all product areas. GARO also works close to its cus-

tomers to gain inspiration and better understand customer needs

in the market. GARO has 15 full-time employees who work on

product development. Refer also to Note 2.8.

ENVIRONMENTAL IMPACT

GARO conducts its business activities in accordance with the

legal requirements regarding environmental impact. The com-

pany believes that it is at the forefront of developments in ener-

gy-efﬁcient and environmentally friendly products and solutions

that reduce electricity consumption. All products are subject to

an environment assessment by Byggvarubedömningen (a non-

proﬁt ﬁnancial unit that evaluates and provides information

about goods assessed from a sustainability perspective). The

Group’s facilities have environmentally friendly production pro-

cesses that meet local environmental legislation and also hold

ISO 14001 certiﬁcation.

The production facilities in Sweden and Poland conduct

reportable operations and the local authority is the supervisory

authority. No other companies in the Group conduct licensable

or reportable operations.

RISKS AND UNCERTAINTIES

The Group’s material risks and uncertainty factors include busi-

ness risks related to customers and suppliers, such as component

supply and price risks for supplies. Added to this are ﬁnancial

risks as a result of changes in currency rates and interest rate

levels. A report on the Group’s material ﬁnancial and business

risks is provided in Note 3.

FINANCIAL TARGETS AND MARKET CONDITIONS

The GARO Group’s ﬁnancial targets are as follows:

• GARO’s organic growth will amount to not less than 10%

over a business cycle.

• GARO’s EBIT margin for the Group will amount to not less

than 10% of net sales over a business cycle.

• Return on equity will amount to not less than 20% over a busi-

ness cycle.

• The equity ratio will not be less than 30%.

• GARO’s dividend will amount to approximately 50% of the

Group’s net earnings after tax. The dividend proposal must

take into account GARO’s long-term dividend potential and the

Group’s general investment and consolidation requirements.

Net sales for full-year 2021 increased 24.7% (3.1) to MSEK

1295.8 (1,039.8), with the E-mobility product area experiencing

a strong expansion and EBIT amounted to MSEK 207.2 (136.2).

The market for charging infrastructure is growing structurally

with rising numbers of rechargeable vehicles, and we see a con-

tinuing strong trend with further expansion of the charging infra-

structure in the European market. Housing construction remains

at a high production rate with increased energy efﬁciency

and electriﬁcation in general. Demand for construction-related

products combined with renovation requirements and energy

efﬁciency is expected to remain favorable. All in all, GARO has

a positive view of long-term market conditions, mainly driven by

growth in charging infrastructure.

CORPORATE GOVERNANCE REPORT

Governance of the company is conducted through the annual

general meeting, by the Board of Directors and the CEO in

accordance with the Swedish Companies Act and the Articles of

Association, and the Nasdaq Stockholm’s Rule Book for Issuers,

including the Swedish Corporate Governance Code. The work

of the Board of GARO AB is governed by the rules of procedure

established annually by the statutory Board meeting.

A total of ten Board meetings were held in 2021. Since 2020,

the Board has had a Remuneration Committee comprising some

of the members of the Board. The Remuneration Committee

assists the Board with proposals in renumeration-related matters

and held two meeting in 2021.

GARO ANNUAL REPORT | 57

BOARD OF DIRECTORS’ REPORT – GROUP

GARO has also had an Audit Committee in place since 2019

comprising some of the members of the Board. The Audit Com-

mittee held four meetings in 2021. Further information about

the Board’s work, corporate governance, the Group’s systems

for internal control and risk management can be found in the

Corporate Governance Report on pages 110–114.

THE SHARE AND SHAREHOLDERS

The 2021 Annual General Meeting resolved on a 5:1 share

split, meaning that each existing share was replaced with ﬁve

new shares. The share split was completed during the second

quarter. Figures pertaining to dividends and earnings per share

for previous periods have been recalculated in the annual report

based on the new number of shares.

The total number of shares on the balance-sheet date

amounted to 50,000,000 with a quotient value of SEK 0.40.

Each share provides entitlement to one vote at the Annual Gen-

eral Meeting. There are no limitations to the transferability of

the GARO shares (post-sale purchase rights). There are also no

limitations on how many votes each shareholder may cast at

general meetings. The company is not aware of any agreements

between shareholders that could entail limitations to the right to

transfer shares.

On the balance-sheet date, there was one shareholder who

owns and controls more than 10% of the number of votes for all

of the shares in the company. That shareholder is Lars Svensson,

who, through own holdings, controls 35.7%. More information

about the GARO shares and ownership structure can be found

on pages 52–53.

APPOINTMENT AND DISMISSAL OF BOARD MEMBERS

The Articles of Association do not contain any special provisions

regarding the appointment and dismissal of Board members.

ANNUAL GENERAL MEETING

The 2022 Annual General Meeting will be held on May 11,

at 5:00 p.m., in Gnosjö. Please visit www.garo.se for more

information.

58 | GARO ANNUAL REPORT

GROUP

Group

Annual report

CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME

MSEK Note 2021 2020

Operating income

Net sales 2, 5, 6 1,295.8 1,039.8

Other operating income 7 6.6 8.0

Total operating income 1,302.4 1,047.8

Raw materials and consumables -649.3 -528.8

Other external expenses 9, 10 -144.9 -123.7

Personnel expenses 8 -265.2 -232.2

Disposal of ﬁxed assets 13, 14, 15 -35.8 -26.9

Total operating expenses -1,095.2 -911.6

EBIT 207.2 136.2

Financial income 11 5.3 0.4

Financial expenses 11 -4.1 -13.5

Financial items 11 1.2 -13.1

Proﬁt before tax 208.4 123.1

Income tax 12 -41.7 -27.7

Net income for the year 166.7 95.4

Other comprehensive income

Items that may be reclassiﬁed to the net income for the year

Translation differences 2.0 -7.7

Other comprehensive income for the year, net after tax 2.0 -7.7

Net income and total comprehensive income for the year is attributable to shareholders of the Parent Company.

Total comprehensive income for the year 168.7 87.7

EARNINGS PER SHARE*

2021 2020

Earnings per share, before and after dilution, SEK 3.33 1.91

Average number of shares (thousands) 50,000 50,000

Number of shares outstanding (thousands) 50,000 50,000

* Adjusted for the 5:1 share split

GARO ANNUAL REPORT | 59

GROUP

CONSOLIDATED STATEMENT OF FINANCIAL POSITION

MSEK Note Dec 31, 2021 Dec 31, 2020

ASSETS

Fixed assets

Capitalized development expenditure 13 28.1 13.0

Development projects in progress 13 34.5 35.1

Goodwill 14 45.5 45.5

Lands and buildings 15 67.6 67.4

Plant and machinery 15 1.6 1.8

Equipment, tools, ﬁxtures and ﬁttings 15 33.9 26.4

Construction in progress and advance payments for tangible assets 15 4.4 6.3

Right-of-use asset 10 36.6 38.5

Deferred tax assets 23 3.2 6.2

Total ﬁxed assets 255.4 240.2

Current assets

Raw materials and consumables 159.3 104.4

Finished goods and goods for resale 78.3 73.5

Products in progress 4.5 4.6

Current receivables

Accounts receivable 17, 18 336.0 238.6

Other current receivables 17 9.1 4.5

Prepaid expenses 12.7 8.1

Cash and cash equivalents 17, 19 81.6 69.4

Total current assets 681.5 503.1

TOTAL ASSETS 936.9 743.3

60 | GARO ANNUAL REPORT

GROUP

CONSOLIDATED STATEMENT OF FINANCIAL POSITION, CONT.

MSEK Note Dec 31, 2021 Dec 31, 2020

EQUITY ATTRIBUTABLE TO SHAREHOLDERS OF THE PARENT COMPANY

Share capital 20, 27 20.0 20.0

Reserves -0.9 2.9

Retained earnings (including net income for the year) 532.4 407.4

Total equity 551.5 430.3

Liabilities

Long-term liabilities

Liabilities to credit institutions 17, 21 26.5 30.3

Lease liability 21 26.3 28.2

Other provisions 22 6.3 3.7

Deferred tax liabilities 23 0 0.5

Total long-term liabilities 59.1 62.7

Short-term liabilities

Liabilities to credit institutions 17, 21 2.6 4.9

Accounts payable 17 166.5 123.9

Overdraft facilities 17, 21 7.3 7.4

Current tax liabilities 18.7 7.2

Other short-term liabilities 17 36.8 28.6

Lease liability 21 9.5 9.9

Accrued expenses 24 84.9 68.4

Total short-term liabilities 326.3 250.3

Total liabilities 385.4 313.0

TOTAL EQUITY AND LIABILITIES 936.9 743.3

GARO ANNUAL REPORT | 61

GROUP

CONSOLIDATED STATEMENT OF CHANGES IN EQUITY

MSEK Note Share capital Reserves* Retained earnings Total equity

Opening balance at January 1, 2020 20.0 4.8 318.2 343.0

Net income for the year - - 95.4 95.4

Other comprehensive income for the year - -7.7 - -7.7

Total comprehensive income - -7.7 95.4 87.7

Dividend according to Annual General Meeting

resolution - - - -

Currency effects 17 - - -0.4 -0.4

Total contributions from and value transfers to

shareholders, recognized directly in equity - - -0.4 -0.4

Closing balance at December 31, 2020 20.0 -2.9 413.2 430.3

Opening balance at January 1, 2021 20.0 -2.9 413.2 430.3

Net income for the year - - 166.7 166.7

Other comprehensive income for the year - 2.0 - 2.0

Total comprehensive income - 2.0 166.7 168.7

Dividend according to Annual General

Meeting resolution - - -47.5 -47.5

Total contributions from and value transfers to

shareholders, recognized directly in equity - - -47.5 -47.5

Closing balance at December 31, 2021 20.0 -0.9 532.4 551.5

*The entire “reserves” column is attributable to currency translation differences pertaining to currency in the translation of foreign operations.

62 | GARO ANNUAL REPORT

GROUP

CONSOLIDATED STATEMENT OF CASH FLOW

MSEK Note 2021 2020

Cash ﬂow from operating activities

EBIT 207.2 136.2

Adjustment for non-cash items

Depreciation 35.8 26.9

Other 2.4 6.7

Net interest income and similar items 11 5.3 0.4

Net interest expenses and similar items 11 -4.1 -13.5

Income tax paid 12 -29.1 -36.9

Cash ﬂow from operating activities before change in working capital 217.5 119.8

Change in inventories -59.6 -12.0

Change in accounts receivable -97.4 -25.8

Change in other current receivables -5.9 -0.8

Change in accounts payable 42.5 5.7

Change in other current operating liabilities 24.7 0

Total change in working capital -95.8 -32.9

Cash ﬂow from operating activities 121.7 86.9

Cash ﬂow from investing activities

Investments in intangible assets 14 -26.5 -24.6

Acquisition of subsidiaries 17, 26 0 -5.7

Investments in tangible assets 15 -18.8 -15.0

Assets sold 0.9 0

Cash ﬂow from investing activities -44.3 -45.3

Cash ﬂow from ﬁnancing activities

Amortization of loans/changes in loans 17, 26 -6.1 0

Amortization of loans/changes in overdraft facilities -0.1 -1.9

Amortization of lease liability -11.7 -10.8

Dividend paid -47.5 0

Cash ﬂow from ﬁnancing activities -65.4 -12.7

Decrease/increase in cash and cash equivalents

Net cash ﬂow for the year 11.9 28.9

Currency effect in cash and cash equivalents 0.3 -0.3

Cash and cash equivalents at beginning of the year 69.4 40.8

Cash and cash equivalents at end of the year 19 81.6 69.4

GARO ANNUAL REPORT | 63

NOTES – GROUP

Notes

NOTE 1. GENERAL INFORMATION

GARO Aktiebolag (publ) (the “Parent Company”) and its subsid-

iaries (jointly referred to below as the “Group”) develop, man-

ufacture and market electrical installation materials. The single

largest market is Sweden, which represents 67% (58) of the

Group’s volumes. Export sales are conducted both from GARO

AB and through the company’s own subsidiaries in Norway,

Finland, Poland, Ireland Northern Ireland and the UK.

The Parent Company is a limited liability company registered

in Sweden with its registered ofﬁce in Gnosjö. The address of the

ofﬁce is Södergatan 26, Box 203, SE-335 33 Gnosjö, Sweden.

The GARO share has been listed on Nasdaq Stockholm since

March 16, 2016.

All amounts are stated in millions of Swedish kronor (MSEK),

unless otherwise stated.

NOTE 2. SUMMARY OF IMPORTANT

ACCOUNTING POLICIES

The most important accounting policies applied in the prepa-

ration of these consolidated ﬁnancial statements are described

below. These policies were applied consistently for all years

presented, unless otherwise stated.

2.1 BASIS FOR PREPARING

THE FINANCIAL STATEMENTS

The Annual Report was prepared based on the assumption of

continuing as a going concern. Assets and liabilities are mea-

sured at their historical cost. The consolidated ﬁnancial state-

ments were prepared in accordance with International Financial

Reporting Standards (IFRS) as adopted by the EU, the Swedish

Annual Accounts Act (1995:1554) and the recommendations

and statements of the Swedish Financial Reporting Board in RFR

1 (Supplementary Accounting Rules for Corporate Groups). Pre-

paring ﬁnancial statements in accordance with IFRS requires a

number of important estimates for accounting purposes. Accord-

ingly, management is required to make certain assessments when

applying the Group’s accounting policies. The areas involving a

high degree of assessment, that are complex or are such areas in

which assumptions and estimates are of signiﬁcant importance to

the consolidated ﬁnancial statements are described in Note 4.

2.1.1 CLASSIFICATION

ASSETS

Fixed assets

Fixed assets only consist of the amount that was expected to be

recovered after more than 12 months calculated from the bal-

ance-sheet date.

Current assets

Current assets only consist of the amount that was expected to

be recovered within 12 months calculated from the balance -

-sheet date.

LIABILITIES

Long-term liabilities

Long-term liabilities and provisions only consist of the amount

that is expected to be paid after more than 12 months calculated

from the balance-sheet date.

Short-term liabilities

Short-term liabilities consist of the amount that is expected to be

paid within their normal operational cycle, liabilities that are

held mainly for trade, liabilities that will be settled within 12

months after the reporting period or liabilities for which GARO

does not have the unconditional right to postpone the settlement

of within 12 months after the reporting period.

All other liabilities are classiﬁed as long-term liabilities.

2.1.2 CASH-FLOW STATEMENT AND CASH

AND CASH EQUIVALENTS

The cash-ﬂow statement is prepared in accordance with the indi-

rect method. The recognized cash ﬂow only consists of transac-

tions that entail payments or receipts.

Cash and cash equivalents comprise cash and bank balances

and current ﬁnancial investments with a maturity of less than

three months that can easily be converted at a known amount

and which are only exposed to an immaterial risk of ﬂuctuations

in value.

Cash and cash equivalents only consisted of, for both 2021

and 2020, cash and bank balances.

2.1.3 CHANGES TO ACCOUNTING POLICIES

AND DISCLOSURES

New and changed IFRS that entered force for 2021 have not

had any material impact on the consolidated ﬁnancial statements.

2.1.4 ISSUED NEW STANDARDS AND INTERPRETATIONS

THAT HAVE NOT YET BEEN APPLIED BY THE GROUP

A number of new standards and interpretations come into effect

for ﬁscal years beginning on or after January 1, 2022 and were

not applied when preparing these ﬁnancial statements. No new

or amended standards or IFRIC interpretations published by the

IASB are not expected to have any material effect on the consoli-

dated ﬁnancial statements.

2.2 CONSOLIDATED FINANCIAL STATEMENTS

2.2.1

FUNDAMENTAL ACCOUNTING POLICIES

SUBSIDIARIES

Subsidiaries are all companies over which the Group exercises

control. The Group controls a company when the Group is

exposed to, or has rights to, variable returns from its holding in

the company (the investee) and has the ability to affect returns

through its power over the investee. Subsidiaries are included

64 | GARO ANNUAL REPORT

NOTES – GROUP

in the consolidated ﬁnancial statements from the date on which

control was transferred to the Group. They are excluded from

the consolidated ﬁnancial statements from the date on which the

control ceases.

The purchase method is used to recognize the Group’s busi-

ness combinations. The purchase consideration for the acqui-

sition of a subsidiary comprises the fair value of transferred

assets, liabilities that the Group assumes from previous owners

of the acquired company and the shares issued by the Group.

The consideration also includes the fair value of all liabilities that

result from an agreement covering a contingent consideration.

Identiﬁable acquired assets and assumed liabilities in a business

combination are initially measured at fair value on the date of

acquisition. For each acquisition, that is, on an acquisition-by-ac-

quisition basis, the Group determines whether the non-controlling

interest in the acquired company is to be measured at fair value

or at the shareholding’s proportional share of the carrying

amount of the acquired company’s identiﬁable net assets. No

non-controlling interest is recognized if the Group has a future

commitment, a call/put option, to acquire a non-controlling inter-

est. Instead, the ﬁnancial liability is measured at fair value with

subsequent changes in value recognized in proﬁt or loss. Acqui-

sition-related costs are expensed as they arise.

Goodwill is initially measured as the amount by which the

total purchase consideration and any fair value of non-con-

trolling interests on the acquisition date exceeds the value of

identiﬁable acquired net assets. If the purchase consideration is

lower than the fair value of the acquired company’s net assets,

the difference is recognized directly in proﬁt or loss.

For more information about subsidiaries, see Note 10 on

page 99.

ELIMINATION OF TRANSACTIONS

BETWEEN GROUP COMPANIES

Intra-Group transactions, balance sheet items and income and

expenses for intra-Group transactions are eliminated. Gains and

losses resulting from intra-Group transactions and which are

recognized in assets are also eliminated.

The accounting policies for subsidiaries were changed as

appropriate to guarantee consistent application of the Group’s

policies.

2.3 SEGMENT REPORTING

Segments are recognized in a manner that corresponds to the

internal reporting to the chief operating decision maker. The

chief operating decision maker is the function that is responsible

for allocating resources and assessing the performance of the

segments. For the Group, this function has been identiﬁed as the

CEO. The Group’s segments are made up of GARO Sweden

and GARO International.

2.4 TRANSLATION OF FOREIGN CURRENCIES

FUNCTIONAL CURRENCY AND PRESENTATION CURRENCY

The various units in the Group use the local currency as their

functional currency since the local currency has been deﬁned

as in the currency used in the primary economical environment

where each unit primarily conducts business activities. Swedish

kronor (SEK), which is the Parent Company’s functional currency

and the Group’s presentation currency, is utilized in the consoli-

dated ﬁnancial statements.

TRANSACTIONS AND BALANCE SHEET ITEMS

Transactions in foreign currency are translated into the functional

currency in accordance with the exchange rate prevailing on the

transaction date. Exchange-rate gains and losses resulting from set-

tlement of such transactions are recognized in EBIT in proﬁt or loss.

Monetary assets and liabilities in foreign currency are translated at

the closing rate and exchange-rate gains and losses arising on such

translation are recognized in net ﬁnancial items in proﬁt or loss.

TRANSLATION OF FOREIGN GROUP COMPANIES

The earnings and ﬁnancial position of all Group companies

that have a functional currency that differs from the presentation

currency are translated to the Group’s reporting currency. Assets

and liabilities for each of the balance sheets are translated from

the functional currency of the foreign operation to the Group’s

presentation currency, SEK, at the exchange rate prevailing

on the balance-sheet date. Income and expenses for each of

the income statements are translated to SEK at the average

exchange rates in effect at the time of each transaction. Transla-

tion differences arising from the translation of foreign operations

are recognized in other comprehensive income.

Goodwill and adjustments of fair value that arise from the

acquisition of a foreign operation are treated as assets

and liabilities of this operation and translated to the closing rate.

2.5. REVENUE FROM CONTRACTS WITH CUSTOMERS

In order for companies within the Group to recognize income

from contracts with customers, each customer contract is ana-

lyzed in accordance with the ﬁve-step model in the respective

company as described below:

STEP 1: Identify an agreement between two or more parties that

creates enforceable rights and obligations.

STEP 2: Identify the performance obligations in the contract.

STEP 3: Determine the transaction price, meaning the amount

of consideration to which an entity expects to be entitled in

exchange for transferring promised goods or services. The

transaction price is to be adjusted for variable consideration,

for example, discounts.

STEP 4: Allocate the transaction price to the performance

obligations.

STEP 5: Recognize income when (or as) the entity satisﬁes a

performance obligation, meaning when control is passed to the

customer. This takes place either at a point in time or over time if

one of the criteria in the standard is met.

The Group’s income comprises the sale of goods in the product

areas of Electrical distribution products, E-mobility, Project busi-

ness and Temporary Power.

Goods are sold in both the Group’s GARO Sweden segment

and GARO International segment. Sales essentially comprise

standard products to other companies. The Group has both sep-

NOTE 2, CONT.

GARO ANNUAL REPORT | 65

NOTES – GROUP

arate contracts and framework agreements with its customers.

For framework agreements, a contract with a customer is not

deemed to arise until the customer places an order based on the

terms of the framework agreement since it is ﬁrst at this point in

time that enforceable rights and obligations for the Group and

the customer arise.

The time from order to delivery of the goods is normally short.

Each separate product in the order is considered to comprise a

separate performance obligation.

The transaction price of each customer contract usually com-

prises a ﬁxed amount. If the transaction price includes variable

amounts (some customer framework agreements have volume

discounts based on the number of products purchases), the

Group estimates the amount that it will be entitled to and includes

in the transaction price, taking into account any restrictions for

uncertain amounts. Income is recognized at a point in time since

the criteria for control being passed over time is not always met.

The Group believes that control is passed when delivery is com-

pleted in accordance with the delivery terms, which coincides

with when the risks and rewards are passed to the customer.

2.5.1 PRICING WITHIN THE GROUP

The pricing of transactions, such as purchases and sales of

goods and services, between Group companies is based on

market principles.

2.6 FINANCIAL INCOME AND EXPENSES

Financial income and expenses comprise interest income on

bank balances and receivables, interest expenses on loans,

dividend income, exchange-rate differences and other ﬁnancial

income and expenses.

2.7 LEASES

From January 1, 2019, leases are recognized in accordance

with IFRS 16 Leases, which means that the lessee recognizes

right-of-use assets and lease liabilities in the balance sheet.

GARO applies the practical expedient in IFRS 16 regarding

short-term leases and low-value leases. Expenses arising in con-

nection with these leases are recognized straight-line over the

lease term as operating expenses in proﬁt or loss. GARO does

not apply IFRS 16 to intangible assets. Non-lease components

are expensed and not recognized as part of the right-of-use asset

or lease liability.

When a lease is signed, the Group determines whether it is a

lease or contains a lease. A contract is, or contains, a lease if

it conveys the right to control the use of an identiﬁed asset for a

period of time in exchange for consideration.

2.7.1 LEASE LIABILITIES

Lease liabilities are initially measured at the present value of

the lease payments not paid on the commencement date. These

lease liabilities are recognized separately from other liabilities in

the balance sheet.

At the commencement date of a lease, GARO determines the

lease term as the non-cancelable period plus periods covered

by an extension option or termination option if exercise of these

options by the Group is reasonably certain. The majority of

GARO’s leases contain extension or termination options. When

determining the lease term, GARO considers strategic plans, the

importance of the underlying asset for GARO’s operations, and

contract-speciﬁc conditions, such as expenses associated with

terminating the lease.

Lease payments include ﬁxed payments (less any incentive

in connection with signing the lease), variable lease payments

that depend on an index or a rate, and amounts expected to be

payable under a residual value guarantee. Lease payments also

include the exercise price under an option to purchase the under-

lying asset or penalties to be paid on early termination if exercise

of these options by the Group is reasonably certain. Variable

lease payments that do not depend on an index or a rate are

recognized as an expense in the period to which they relate.

Lease payments are discounted at the implicit interest rate if

the rate can be readily determined, otherwise at the incremental

borrowing rate of the lease. After the commencement date of a

lease, the lease liability increases to reﬂect the interest expenses,

is reduced by paid lease payments and remeasured due to lease

modiﬁcations, changes to the lease term, changes in lease pay-

ments or changes in the assessment of whether to purchase the

underlying asset.

2.7.2 RIGHT-OF-USE ASSETS

GARO recognizes right-of-use assets in the balance sheet on the

commencement date of the lease. Right-of-use assets are recog-

nized separately from other liabilities in the balance sheet.

Right-of-use assets are recognized at cost less accumulated

depreciation and any impairment, and adjusted for remeasure-

ment of the lease liability. The cost includes the initial value rec-

ognized for the attributable lease liability, initial direct costs, any

lease payments made at or before the commencement date less

any lease incentives received, and an estimate of costs to restore

the asset.

Provided that GARO is not reasonably certain that it will take

over ownership of the underlying asset at the end of the lease

term, the right-of-use asset is depreciated straight-line over the

shorter of the term and the useful life.

2.8 INTANGIBLE ASSETS

CAPITALIZED DEVELOPMENT EXPENDITURE

Capitalized development expenditure pertains to the develop-

ment of new products. Development expenses are recognized

according to the activation model as intangible assets provided

the following criteria is met:

a) it is technically and commercially feasible to prepare the asset

b) the intention and conditions exist to sell or use the asset

c) it is probably that the asset will generate future economic

beneﬁts or lead to cost savings

d) expenditure can be calculated in a satisfactory manner

e) a Board approved RoI (return on investment) exists for the asset

The cost of an internally developed intangible asset is the total of

expenditure arising as of the date when the intangible asset ﬁrst

satisﬁes the above capitalization criteria.

66 | GARO ANNUAL REPORT

NOTES – GROUP

Amortization commences when the asset starts to be used. The

period of use is assessed on the basis of the period during which

the anticipated beneﬁts are expected to accrue to the company.

The period of use is deemed to be a maximum of seven years

and straight-line amortization takes place over this period. Cap-

italized development expenditure for assets that have not started

to be used is recognized on the line “Development projects in

progress” in the balance sheet.

Studies and other development expenditure that do not satisfy

the above criteria are not considered to comprise an intangible

asset and are expensed as incurred. Development expenditure

that has previously been expensed is not recognized as an asset

in subsequent periods.

GOODWILL

Goodwill arises on acquisitions of subsidiaries and pertains

to the amount at which the purchase consideration exceeds

GARO’s share of the fair value of the identiﬁable assets, liabili-

ties, contingent liabilities in the acquired company and the fair

value of the non-controlling interest in the acquired company.

For impairment testing, goodwill acquired in a business combi-

nation is distributed between cash-generating units or groups of

cash-generating units that are expected to beneﬁt from synergies

of the acquisition. Each unit or group of units to which goodwill

has been distributed corresponds to the lowest level in the Group

in which this goodwill is monitored in the internal governance of

the company. Goodwill is monitored at company level.

Goodwill is tested for impairment every year or more often if

events or changes in circumstances indicate a potential decline

in value. The carrying amount of goodwill is compared with its

recoverable amount, which is the highest of the value in use and

the fair value less selling expenses.

2.9 TANGIBLE ASSETS

Tangible assets are recognized at their cost less accumulated

depreciation according to plan and any impairment. The cost

includes the purchase price and all costs necessary to bring

the asset to working condition for its intended use. Costs for

improving the performance of the tangible assets in excess of its

original level, increase the value of the asset and are recognized

in the balance sheet as part of the original investment. Costs for

repairs and maintenance are expensed when they arise.

Depreciation takes place systematically over the expected use-

ful lives of the assets and commenced after the asset has started

to be used. Land is not depreciated.

Depreciation periods:

Buildings, permanent equipment, service facilities,

etc., in buildings and land improvements 5–25 years

Plant and machinery 10–20 years

Equipment, tools, ﬁxtures and ﬁttings 3–10 years

The assets’ residual value and useful lives are tested at the end

of each reporting period and adjusted if necessary. The asset’s

carrying amount is immediately impaired to its recoverable

amount if the asset’s carrying amount exceeds its estimated

recoverable amount.

Gains and losses on the sale of tangible assets are determined

by comparing the sales proceeds to the carrying amount and

are recognized in other operating income or other operating

expenses in proﬁt or loss.

2.10 IMPAIRMENT OF NON-FINANCIAL ASSETS

Intangible assets that have an indeﬁnite useful life, such as good-

will or intangible assets not ready for use, are not amortized but

are tested annually for impairment. Assets are tested for impair-

ment whenever events or changes in circumstances indicate that

the carrying amount may not be recoverable. An impairment

loss is recognized at the amount whereby the carrying amount

of the asset exceeds the recoverable amount. The recover-

able amount is the higher of the asset’s fair value less selling

expenses and its value in use. In impairment testing, assets are

grouped at the lowest level for which there are separate identi-

ﬁable cash ﬂows (cash-generating units). For assets other than

ﬁnancial assets that were previously impaired, a test for reversal

is performed every balance-sheet date. Previous impairment of

goodwill is not reversed.

2.11 FINANCIAL INSTRUMENTS

Financial instruments are every form of contract that gives rise

to a ﬁnancial asset in a company and a ﬁnancial liability or an

equity instrument in another company. Financial instruments are

classiﬁed on initial recognition based on factors including the

purpose for which the instrument was acquired and is held. This

classiﬁcation determines the measurement of the instruments.

2.11.1 RECOGNITION AND DERECOGNITION

A ﬁnancial asset or a ﬁnancial liability is recognized in the bal-

ance sheet when the company becomes a party to the contrac-

tual provisions of the instrument. Accounts receivable are recog-

nized in the balance sheet when an invoice has been sent and

the company’s right to receive compensation is unconditional. A

liability is recognized when the counterparty has performed and

there is a contractual obligation to pay, even if an invoice has

not yet been received. Accounts payable are recognized once

the invoice has been received.

A ﬁnancial asset and a ﬁnancial liability are offset against

each other and the net amount is recognized in the balance

sheet only when there is a legal right to offset the amounts and

there is an intention to settle the items by a net amount or to

simultaneously realize the asset and settle the liability. A ﬁnan-

cial asset is derecognized from the balance sheet when the

rights in the contract have been realized, expire or the company

loses control of them. A ﬁnancial liability is derecognized from

the balance sheet when the contractual obligation has been

fulﬁlled or otherwise extinguished. The same applies to portions

of a ﬁnancial asset or ﬁnancial liability.

Gains and losses from derecognition from the balance sheet

and modiﬁcations are recognized in proﬁt or loss to the extent

that hedge accounting is not applied.

NOTE 2, CONT.

GARO ANNUAL REPORT | 67

NOTES – GROUP

2.11.2 CLASSIFICATION AND MEASUREMENT

OF FINANCIAL ASSETS

Debt instruments: classiﬁcation of ﬁnancial assets that are debt

instruments is based on the Group’s business model for holding

the asset and the characteristics of the contractual cash ﬂows of

the asset. The instruments are classiﬁed as:

• Amortized cost

• Fair value through proﬁt or loss

• Fair value through other comprehensive income

Financial assets classiﬁed at amortized cost are initially mea-

sured at fair value plus transaction costs. After initial recognition,

the assets are measured at amortized cost less loss allowance

for expected credit losses. Assets classiﬁed at amortized cost are

held according to the business model of collecting the contrac-

tual cash ﬂows that are solely payments of principal and interest

on the principal amount outstanding.

The Group’s ﬁnancial assets comprise accounts receivable,

cash and cash equivalents, other current receivables and deriv-

ative instruments. All of these are classiﬁed at amortized cost

except for derivative instruments which are classiﬁed at fair

value (value hierarchy, level 2) through proﬁt or loss. The Group

does not apply hedge accounting.

2.11.3 IMPAIRMENT OF FINANCIAL ASSETS

The Group’s impairment model is based on expected credit

losses and considers forward-looking information. A loss allow-

ance is made when there is exposure to credit risk, usually on

initial recognition of an asset or receivable. Under the simpli-

ﬁed approach, a loss allowance is recognized for full lifetime

expected credit losses. The simpliﬁed approach is applied to

accounts receivable and contract assets and is based on past

losses combined with forward-looking factors.

For other items encompassed by expected credit losses, a

three-stage impairment model is applied. A loss allowance is

recognized initially and on the balance-sheet date for the next

12 months or for a shorter period of time depending on the life-

time (stage 1). The Group’s assets have been deemed to be in

stage 1, meaning that credit risk has not signiﬁcantly increased.

Other receivables and assets are impaired according to a

rating-based method through external credit ratings. Expected

credit losses are measured at the total of probability of default,

loss given default and exposure at default. Credit-impaired

assets and receivables are individually assessed, taking into

consideration past, current and forward-looking information.

Measurement of expected credit losses also considers any collat-

eral and other credit enhancement in the form of guarantees.

2.11.4 CLASSIFICATION AND MEASUREMENT

OF FINANCIAL LIABILITIES

Financial liabilities are classiﬁed at amortized cost except for

derivatives. Financial liabilities measured at amortized cost are

initially measured at fair value including transaction costs. After

initial recognition, the liabilities are measured at amortized cost

according to the effective interest method.

The majority of the Group ﬁnancial liabilities (liabilities to

credit institutions, accounts payable, overdraft facilities and

other short-term liabilities) are classiﬁed at amortized cost.

Derivative instruments are classiﬁed at fair value through proﬁt

or loss. The Group does not apply hedge accounting.

2.12 INVENTORIES

Inventories are recognized at the lower of cost and net realiz-

able value. Cost is determined using the ﬁrst-in, ﬁrst-out (FIFO)

method. Cost for own semi-ﬁnished and ﬁnished goods comprise

direct manufacturing expenses and a reasonable portion of

indirect manufacturing expenses.

2.13 SHARE CAPITAL

Common shares are classiﬁed as equity. Transaction costs that

can be directly attributed to new share or options issues are

recognized in net amounts after tax in equity as a deduction

from the issue proceeds.

2.14 PROVISIONS

Provisions are recognized when the Group has a legal or an

informal obligation due to previous events, it is probable that

an outﬂow of resources will be required to regulate the obliga-

tion and the amount has been calculated in a reliable manner.

Provisions for restructuring include expenses for terminating

leases and severance pay.

Estimated guarantee reserves for product guarantees are

recognized when the products are sold. Reserves are based

on expected contractual obligations and determined based on

historical statistics regarding action expenses, etc. Guarantee

reserves amount to MSEK 6.0 (3.5) and are recognized under

provisions. The provision for this is not material. No provisions

are made for future operating losses.

If there are similar commitments, the probability of an outﬂow

of resources being required on settlement is calculated as a total

for the entire group of these commitments. A provision is recog-

nized even if the probability of an outﬂow for a special item in

this group of commitments is minor.

Provisions are valued at the present value of the amount that

is expected to be required to settle the obligation. In so doing,

a discounted interest rate before tax is applied that reﬂects the

current market assessment of the value of money over time and

the risks associated with the provision. The increase in the pro-

vision that is due to the passing of time is recognized as interest

expenses.

2.15 CURRENT AND DEFERRED TAX

Tax expense for the period includes current and deferred tax.

The current tax expense is calculated on the basis of the tax

regulations that have been decided or essentially decided on the

balance-sheet date in those countries where the Parent Company

and its subsidiaries are active and generate taxable income.

Deferred tax is recognized, in accordance with the balance

sheet method, on all temporary differences arising between the

taxable value of assets and liabilities and their carrying amounts

in the consolidated ﬁnancial statements. Deferred tax is calcu-

lated applying tax rates that have been decided or announced

68 | GARO ANNUAL REPORT

NOTES – GROUP

on the balance-sheet date and that are expected to apply when

the particular deferred tax asset is realized or the deferred tax

liability has been settled.

Deferred tax assets on loss carryforwards are recognized

insofar as it is probable that future taxable surpluses will be

available to offset them against.

Deferred tax assets and liabilities are offset when there is

a legally enforceable right to offset current tax assets against

current liabilities, when deferred tax assets and liabilities relate

to income taxes levied by the same tax authority, on either the

same or different taxable entities, and where there is an inten-

tion to settle on a net basis.

2.16 REMUNERATION OF EMPLOYEES

PENSION OBLIGATIONS

The Group has both deﬁned-beneﬁt and deﬁned-contribution

pension plans. The deﬁned-beneﬁt plans comprise ITP 2 plans

(see below for a more detailed description). Deﬁned-contribution

plans are plans under which the Group pays ﬁxed contributions

into a separate legal entity. The Group has no legal or construc-

tive obligation to pay further contributions if the legal entity does

not hold sufﬁcient assets to pay all employee beneﬁts relating to

employee service in the current and prior periods.

For deﬁned-contribution pension plans, the Group pays contri-

butions to publicly or privately administered pension insurance

plans on a compulsory, contractual or voluntary basis. The

Group has no other payment obligations once these contribu-

tions have been paid. The contributions are recognized as per-

sonnel expenses when they fall due for payment. Prepaid contri-

butions are recognized as an asset insofar as a cash repayment

or a decrease in future payments could accrue to the Group.

In parts of the Group, there are salaried employees in Swe-

den who are part of the ITP 2 plan. The deﬁned-beneﬁt pension

commitments in the ITP 2 plan for old-age pensions and family

pensions are covered through insurance with Alecta. According

to a statement from the Swedish Financial Reporting Board, UFR

10 Classiﬁcation of ITP plans ﬁnanced through insurance with

Alecta, this is a deﬁned-beneﬁt multi-employer plan. The com-

pany did not have access to information during the period that

would allow it to recognize its proportionate share of the plan’s

obligations, plan assets and expenses, which meant that it was

not possible to recognize this as a deﬁned-beneﬁt plan. The ITP2

pension plan that is secured through insurance in Alecta is there-

fore recognized as a deﬁned-contribution plan. The premium for

the deﬁned-beneﬁt old-age pensions and family pensions are

calculated individually and depend on factors including salaries,

previously earned pensions and expected remaining period

of service. Fees for the next reporting period for ITP 2 pension

plans that are signed with Alecta are expected to amount MSEK

3.2 (2020: 3.7) The Group’s share of the total contributions to

the plans and the Group’s share of the total number of active

members in the plan amount to 0.012% and 0.011% respec-

tively (0.001% and 0.014% respectively).

The collective consolidation level is comprised of the market

value of Alecta’s shares in percent of insurance undertakings

calculated in accordance with Alecta’s actuarial methods and

assumptions, which do not agree with IAS 19. The collective

consolidation level is normally allowed to vary between 125%

and 175%. With the aim of strengthening the consolidation level

if it is assessed to be too low, one measure can be to raise the

contracted subscription price and expand existing beneﬁts. If the

consolidation level exceeds 150%, premium reductions can be

introduced. At the end of 2021, Alecta’s surplus in the form of

the collective consolidation level was 169% (148%).

VARIABLE REMUNERATION

The Group recognizes a liability and an expense for variable

remuneration based on net income for the year before tax. The

Group recognizes a provision when there is a legal obligation

or an informal obligation due to previous practice.

NOTE 3. RISKS AND UNCERTAINTIES

3.1 RISKS AND UNCERTAINTIES

Through its operations, the Group is exposed to a variety of

different ﬁnancial risks: market risk (including currency risk, inter-

est-rate risk), credit risk and liquidity risk. The Group’s overall

risk management policy focuses on the unpredictability of the

ﬁnancial markets and seeks to minimize potential unfavorable

effects on the Group’s ﬁnancial earnings. The Group uses deriv-

ative instruments to ﬁnancially hedge certain risk exposure. How-

ever, the Group does not apply hedge accounting.

The Group’s central ﬁnance function conducts risk management

activities, following policies adopted by the Board. The ﬁnance

function identiﬁes, evaluates and hedges ﬁnancial risks in close

cooperation with the Group’s operational units. The ﬁnance func-

tion prepares written policies for overall risk management and for

speciﬁc areas, such as currency risk, interest-rate risk, credit risk,

use of derivative instruments and ﬁnancial instruments that are not

derivatives, and investments of excess liquidity.

A MARKET RISK

(i) Impact of economic climate and other macro economic factors

Since GARO conducts most of its operations in Sweden, Poland,

Norway, Ireland and Northern Ireland, the general economic

climate and business conditions in these countries have a con-

siderable effect on GARO’s operations and earnings. The global

economic climate, negative changes in the European economy,

particularly in the Nordic region, and the rest of the world, plus

a lower level of new housing and commercial construction and

conversion and lower investments in the industry could entail

that demand for GARO’s products and services declines, which

would have a negative impact on GARO’s operations, ﬁnancial

position and earnings.

(ii) Competition and price pressure

GARO competes with players in all product areas and in all

geographic markets and GARO must therefore meet end cus-

tomer needs and demand better than its competitors. If GARO is

not sufﬁciently successful in meeting this competition from both

existing and new players, it could have a negative impact on

GARO’s operations, ﬁnancial position and earnings.

NOTE 2, CONT.

GARO ANNUAL REPORT | 69

NOTES – GROUP

Price pressure is a natural element of competitive markets.

There is a risk that GARO’s competitors develop their product

range and that end customers thus increasingly prefer products

that compete with GARO’s current and future range, which

could have a negative impact on GARO’s operations, ﬁnancial

position and earnings.

(iii) Product development

GARO’s earning and competitiveness are partially dependent

on its ability to develop and sell new, innovative products and

solutions. Accordingly, a key element of GARO’s strategy is

to develop and market new products in the areas that GARO

believes are important for continued growth and for safeguarding

its market shares. A central component of GARO’s strategy has

been and remains controlling the entire value chain from product

development and product assembly to delivery to the customer.

There is a risk that expenses for a product development project

exceed budget and that forecast sales volumes and/or sales mar-

gins are not achieved, which could have a negative impact on

GARO’s operations, ﬁnancial position and earnings.

(iv) IT

GARO’s ability to effectively and securely manage sales and

other business-critical operations depends on the reliability, func-

tionality, maintenance, operation and continued development of

GARO’s IT systems, including the company’s website. Such sys-

tem can be disrupted by, for example, software errors, computer

viruses, hacking, sabotage and physical damage. IT systems are

used in the Group to purchase, sell and deliver products, invoice

customers, manage orders and inventories and for accounting

and ﬁnancial reporting. There is a risk that IT disruptions or other

problems with the IT systems could have a negative impact on

GARO’s operations, ﬁnancial position and earnings due to their

length, scope and level of severity.

(v) Currency risk

The Group operates internationally and is exposed to currency

risks from various currency exposures, primarily in euro (EUR),

Norwegian kroner (NOK) and Polish złoty (PLN). Currency risk

arises through future business transactions, recognized assets

and liabilities and net investments in foreign operations.

Currency risk arises when future business transactions are

expressed in a currency that is not the unit’s functional currency.

The Group mostly purchases goods in EUR. In order to manage

currency risk and outﬂows in EUR, the Group has decided to

also have sales in EUR where possible.

Currency risk from future business transactions is managed by

the Group making use of forward contracts when it is not possi-

ble to match the outﬂow of a currency to the inﬂow.

The Group’s risk management policy is to ﬁnancially hedge

between 70% and 80% of expected cash ﬂows (primarily pur-

chases of inventories) in EUR for the next six-month period. Out-

standing forward contracts amounted to MEUR 7.2 (6.7) on the

balance-sheet date. Currency effects of changes in derivatives

are recognized in net ﬁnancial items in proﬁt or loss.

The Group has a number of holdings in foreign operations

whose net assets are exposed to currency risks. Currency expo-

sure arising from net assets in the Group’s foreign operations is

mainly managed by borrowings in the Parent Company in the

relevant foreign currencies. Hedge accounting is not applied for

these transactions.

(vi) Interest-rate risk

The Group’s interest-rate risk arises through long-term borrow-

ings. Borrowings raised at variable interest rates exposes the

Group to interest-rate risk in respect of cash ﬂow, which is partly

neutralized by cash assets subject to variable interest rates. Bor-

rowings raised at ﬁxed interest rates exposes the Group to inter-

est-rate risk in respect of fair value. The Group’s policy is to have

its borrowings at ﬁxed interest rates. The CFO must approve any

deviations. In 2021 and 2020, the Group’s liabilities to credit

institutions at ﬁxed interest rates were denominated in SEK, EUR

and PLN. The Group’s overdraft facilities bear variable interest

rates.

B CREDIT RISK

Credit risk is managed at Group level, except for credit risk

attributable to outstanding accounts receivable. Each Group

company is responsible for monitoring and analyzing credit risk

for each new customer before standard payment and delivery

terms are offered. Credit risk arises on the basis of cash and

cash equivalents, accounts receivable, derivative instruments

and balances with banks and ﬁnancial institutions, including

outstanding receivables and contracted transactions. Only banks

and ﬁnancial institutions that have received a minimum A credit

rating from independent rating agencies are accepted. If a

wholesaler has been rated by an independent agency, this rat-

ing is then used. If no independent credit rating is available, a

risk assessment of the customer’s credit worthiness is performed

that takes into account ﬁnancial position, previous experience

and other factors. Individual risk limits are established based on

internal and external credit ratings in accordance with the limits

set by the Board. The use of credit limits is regularly monitored.

The ﬁnancial assets encompassed by the loss allowance

according to the general approach comprise cash and cash

equivalents. GARO applied a rating-based approach combined

with other known information and forward-looking factors for

assessing expected credit losses.

The Group has deﬁned default as when payment of a receivable

is 90 or more days past due, or if other factors indicate that

payment will be suspended. If the amounts are not deemed to be

insigniﬁcant, a loss allowance is also recognized for these ﬁnan-

cial instruments. The Group has currently made the assessment

that there are no credit losses on cash and cash equivalents.

No credit limits were exceeded during the reporting period

and management does not expect any losses due to non-payment

from these counterparties. For more information, see Note 18.

C LIQUIDITY RISK

The Group’s policy is to have a liquidity reserve of at least MSEK

40. Cash ﬂow forecasts are prepared by the Group’s operating

companies and aggregated by the ﬁnance function. The ﬁnance

70 | GARO ANNUAL REPORT

NOTES – GROUP

function closely monitors rolling forecasts for the Group’s liquid-

ity reserve so as to ensure that the Group has sufﬁcient cash

funds to meet the needs of the operating activities while retain-

ing sufﬁcient scope in contracted unutilized credit facilities so

that the Group does not breach loan limits or conditions (where

applicable) of any of the Group’s loan facilities. Such forecasts

take into account the Group’s plans for repayments, meeting

loan conditions, meeting internal balance-sheet-based perfor-

mance measures and, where applicable, external supervisory

and statutory requirements, such as currency restrictions.

The Group does not have any speciﬁc loan conditions (cove-

nants) with external borrowers.

Surplus liquidity in the Group’s operating companies, exceed-

ing the portion required for managing working capital require-

ments, is primarily to be used to pay off outstanding loans. Sur-

plus liquidity can then be invested in investments approved by

the ﬁnance function that meet the scope for above forecasts and

the liquidity reserves.

The table on the right shows the Group’s ﬁnancial liabilities

that will be settled in a net amount, speciﬁed by the time from

the balance-sheet date remaining until the contractual due date.

The amounts presented in the table are the contractual, undis-

counted cash ﬂows. The amounts falling due within 12 months

correspond to the carrying amounts since the discount effect is

not material.

MATURITY STRUCTURE

At December 31, 2021 < 1 year 1–5 years > 5 years Total

Liabilities to credit institutions 2.6 23.7 2.9 29.2

Lease liability 9.5 20.8 5.5 35.8

Derivative instruments - - - -

Accounts payable 166.4 - - 166.4

Overdraft facilities 7.3 - - 7.3

Total 185.8 44.5 8.4 238.7

At December 31, 2020 < 1 year 1–5 years > 5 years Total

Liabilities to credit institutions 7.1 21.7 6.5 35.3

Lease liability 10.4 20.6 11.4 42.4

Derivative instruments - - - -

Accounts payable 124.0 - - 124.0

Overdraft facilities 7.4 - - 7.4

Total 148.9 42.3 17.9 209.1

Of the MSEK 185.8 stated for 2021 in the “less than 1 year”

interval, the Group intends to repay MSEK 169.4 in the ﬁrst

quarter of 2022 (128.4).

There are currently not deemed to be any additional borrow-

ing or reﬁnancing requirements for meeting future commitments

under the current operations and business plan.

D SENSITIVITY ANALYSIS

Material factors that impact the Group’s earnings are presented

below. The analysis is based on the amounts at the end of the

year and is based on other factors remaining unchanged.

The Group’s net debt is low and a 1% change in the market

interest rate would not have any appreciable effect on income

after ﬁnancial items.

The Group has signiﬁcant currency exposure to EUR, relating

to the company’s purchases of goods in Europe. The company

also conducts sales of goods in EUR.

Sensitivity analysis

Impact on

earnings

2021

Impact on

equity

2021

Impact on

earnings

2020

Impact on

equity 2020

Change in sales

prices, +/- 1%

MSEK +/-

12.9

MSEK +/-

10.3

MSEK +/-

10.4

MSEK +/-

8.1

Change in

volume, 1% MSEK 5.2 MSEK 4.1 MSEK 4.1 MSEK 3.2

Change in purchase

prices, 1% MSEK 6.5 MSEK 5.2 MSEK 4.2 MSEK 3.3

Change in payroll

costs, 1% MSEK 2.7 MSEK 2.1 MSEK 2.7 MSEK 2.1

EUR strengthened

against SEK, 1% MSEK 3.9 MSEK 3.0 MSEK 3.2 MSEK 2.5

3.2 MANAGEMENT OF CAPITAL STRUCTURE

The Group’s objective concerning the capital structure is to safe-

guard the Group’s ability to continue its operations, so that it

can continue to generate a return to shareholders and value for

other stakeholders and maintain an optimal capital structure in

order to minimize the cost of capital. One of GARO’s ﬁnancial

targets is to reach an equity ratio no less than 30%.

Company management continuously monitors the need to

reﬁnance external borrowing with the target of renegotiating

the Group’s credit facilities no less than 12 months before their

due date. To maintain or adjust its capital structure, the Group

can alter the dividend paid to shareholders, repay capital to

shareholders, raise new loans, issue new shares or sell assets to

reduce liabilities. GARO has no bank covenants.

The Group assesses capital based on the debt/equity ratio,

in the same way as other companies in the industry. This perfor-

mance measure is calculated as net debt divided by equity. The

company’s debt/equity ratio has been in line with set targets

during 2021, taking account of growth targets and, as a result,

increased capital requirements.

NOTE 3, CONT.

GARO ANNUAL REPORT | 71

NOTES – GROUP

The Group has an equity ratio of 58.9% (57.9), in which the

equity ratio is deﬁned as recognized equity as a percentage of

total assets.

Equity ratio Dec 31, 2021 Dec 31, 2020

Group

Equity 551.5 430.3

Total assets 936.7 743.3

Equity ratio % 58.9% 57.9%

At December 31, 2021, GARO had net cash of MSEK 9.4.

On December 31, 2020, the debt/equity ratio amounted was

MSEK 2.7, in which the debt/equity ratio is deﬁned as net loan

liabilities divided by recognized equity.

Debt/equity ratio Dec 31, 2021 Dec 31, 2020

Total borrowing (Note 21) 72.2 80.7

Less: cash and cash equivalents (Note 19) -81.6 -69.4

Net debt -9.4 11.3

Total equity 551.5 430.3

Debt/equity ratio, % N/A 2.7%

NOTE 4. SIGNIFICANT ESTIMATES AND

ASSESSMENTS FOR ACCOUNTING PURPOSES

The preparation of ﬁnancial statements and the application of

various accounting standards requires that company manage-

ment make assessments and use estimates and assumptions that

affected the amounts recognized in the consolidated ﬁnancial

statements. These estimates, assessments and related assump-

tions are based not only on experience but also other factors

including expectations regarding future events.

The actual outcome may deviate from assessments made.

Management’s estimates and assessments could impact the

income statement, balance sheet and supplementary disclosures

provided in the ﬁnancial statements. Accordingly, changes to

estimates and assessments could lead to changes in the ﬁnancial

reporting. Changes in estimates and assessments are recognized

in the period in which the change is made and in future periods

if they are affected.

Estimates and assessments were made regarding capitalized

development expenditure, calculating inventory obsolescence,

testing goodwill for impairment, the risk of losses on accounts

receivable, valuations of deferred tax assets, future guarantee

commitments, ongoing disputes and other legal obligations as

well as recognition of right-of-use assets, see below. These esti-

mates and assessments are not deemed to have any material

impact on the income statement or balance sheet in the event of

errors in such estimates and assessments.

LEASES

IMPORTANT SOURCES OF UNCERTAINTY IN ESTIMATES

The application of IFRS 16 entails determining the lease term

and the incremental borrowing rate to be assessments that affect

the measurement of the ﬁnancial lease liability and the right-of-

use asset.

ESTIMATES AND ASSESSMENTS

The most signiﬁcant assessments in determining the lease lia-

bility and the right-of-use asset are related to establishing the

lease terms. The majority of GARO's leases contain options to

either extend or terminate the lease. When the lease term is

determined, GARO considers all facts and circumstances that

create an economic incentive to exercise the extension option or

not exercise the option to terminate a lease. Examples of factors

that were considered are: strategic plans, the importance of the

underlying asset for GARO’s operations and/or expenses asso-

ciated with not extending or terminating the lease.

NOTE 5. SEGMENT INFORMATION

Segment reporting is prepared in accordance with IFRS 8. Oper-

ating segments are recognized in a manner that corresponds to

the internal reporting to the chief operating decision maker. The

chief operating decision maker is the function that is responsible

for allocating resources and assessing the performance of the

operating segments. For the Group, this function has been iden-

tiﬁed as the CEO. Company management has established the

segments based on the information used by the CEO. The CEO

assesses the operation based on a geographic/legal perspective

and by taking in account which business model is applied. Two

operating segments have been identiﬁed in the Group: GARO

Sweden and GARO International. These agree with the internal

reporting.

Operations in the GARO Sweden segment are comprised of

region Sweden and are organized into six legal units. Aside

from trading operations, in-house manufacturing takes place

at three facilities in Sweden. The GARO International segment

includes the legal entities in Norway, Ireland, the UK, Finland

and Poland. Poland, aside from trading operations, also con-

ducts in-house production. Each segment is conducted under

local responsibility. Mutual overhead costs are shared in the

segment and based on distribution in accordance with the arm’s

length principle.

The CEO assesses the results of the segments primarily based

on the EBIT measure (operating proﬁt).

From January 1, 2022, GARO reports operations divided into

the business areas of GARO Electriﬁcation and GARO E-mobility.

72 | GARO ANNUAL REPORT

NOTES – GROUP

INCOME

Sales between segments take place based on market terms. Income from external partners reported to the CEO is measured in the

same way as in proﬁt or loss.

INCOME

GARO Sweden GARO International Elimination Total

Segment information 2021 2020 2021 2020 2021 2020 2021 2020

Sales

Total net sales 1,126.3 883.3 688.9 570.2 -520.2 -413.0 1,294.9 1,040.5

Internal net sales -233.7 -185.2 -286.6 -227.8 520.2 413.0 0 0

Currency effects - - - - 0.9 -0.7

External net sales 892.6 698.1 402.3 342.3 - - 1,295.8 1,039.8

EBIT 151.5 90.2 55.7 46.0 - - 207.2 136.2

Financial income - - - - - - 5.3 0.4

Financial expenses - - - - - - -4.1 -13.5

Tax expense for the year - - - - - - -41.7 -27.7

Net income for the year - - - - - - 166.7 95.3

Other disclosures

Fixed assets 289.9 242.8 61.8 98.4 -95.8 -101.0 255.9 240.2

Other assets 743.5 480.6 327.8 229.3 -390.3 -203.3 681.0 503.1

Total assets 1,033.4 723.4 389.6 327.7 -486.1 -307.8 936.9 743.3

Short-term liabilities 374.3 299.1 176.8 154.5 -224.9 -203.3 326.2 250.3

Long-term liabilities 20.0 22.2 38.9 40.5 0 0 58.9 62.7

Total liabilities 394.3 334.6 215.7 222.7 -224.9 -244.3 385.1 313.0

Investments 38.2 42.1 7.1 3.2 - - 45.3 45.3

Depreciation 31.2 22.4 4.6 4.4 - - 35.8 26.9

Income from

external customers

speciﬁed the customers’

geographical location Fixed assets

2021 2020 2021 2020

Sweden 826.5 678.0 194.1 181.1

Norway 162.7 173.4 2.6 2.6

Ireland 131.5 114.0 20.4 16.9

Finland 48.3 31.1 0.2 0.2

UK 49.2 11.0 1.1 0

Other countries 76.7 33.0 37.5 39.4

Currency effects 0.9 -0.7

Total 1,295.8 1,039.8 255.9 240.2

The Group’s assets exclude ﬁnancial assets, deferred tax assets

and assets related to post-employment renumeration. Assets are

distributed based on where the subsidiaries are located geo-

graphically.

The Group has income from two external customers that each

exceed 10% of net sales at the end of each period. In 2021,

total net sales for these customers amounted to MSEK 225.4

(204.9) and MSEK 152.9 (240.1) respectively, a total of MSEK

378.3 (445.0), comprising 29.2% (42.9) of total net sales. This

income is attributable to the GARO Sweden segment.

NOTE 5, CONT.

GARO ANNUAL REPORT | 73

NOTES – GROUP

NOTE 6. INCOME FROM CONTRACTS WITH CUSTOMERS

Income arises when companies in the Group satisﬁes a performance obligation by delivering a promised good and control of the

asset passes to the customer. This usually takes place on delivery in accordance with the applicable delivery terms. Amounts before

elimination of any foreign exchange gains/losses.

INCOME FROM CUSTOMERS SPECIFIED BY PRODUCT AREA AND SEGMENT:

Product area

GARO Sweden

2021

GARO Sweden

2020

GARO International

2021

GARO International

2020

Total

2021

Total

2020

Electrical distribution products 294.4 275.3 237.4 203.4 531.8 478.8

E-mobility 339.8 194.0 97.3 94.2 437.1 288.2

Project business 176.8 174.1 61.9 39.1 238.7 213.2

Temporary Power 81.6 54.7 5.7 5.6 87.3 60.3

Currency - - 0.9 -0.7

Total income from customers 892.6 698.1 402.3 342.3 1,295.8 1,039.8

GEOGRAPHIC LOCATION OF CUSTOMERS

Geographic location

GARO Sweden

2021

GARO Sweden

2020

GARO International

2021

GARO International

2020

Total

2021

Total

2020

Sweden 826.5 678.0 - - 826.5 678.0

Norway - - 162.7 173.2 162.7 173.4

Ireland - - 131.5 114.0 131.5 114.0

UK - - 49.2 11.0 49.2 11.0

Finland - - 48.3 31.1 48.3 31.1

Other countries 66.1 20.1 10.6 12.9 76.7 33.0

Currency - - 0.9 -0.7

Total income from customers 892.6 698.1 402.3 342.4 1,295.8 1,039.8

Income

GARO Sweden

2021

GARO Sweden

2020

GARO International

2021

GARO International

2020

External auditors 892.6 698.1 402.3 342.3

Income between segments 233.7 185.1 286.6 22.8

Adjustments and eliminations regarding inter-segment sales -233.7 -185.1 -286.6 -22.8

Total income from contracts with customers 892.6 698.1 402.3 342.3

PERFORMANCE OBLIGATION

The Group’s sales of goods to companies take place by invoice,

normally with terms of payment 30–60 days. The Group’s

performance obligations that form part of the contract with cus-

tomers have an original expected term of a maximum of one

year. For framework agreements, a contract is not deemed to

arise until the customer places an order based on the terms of

the framework agreement. The Group’s performance obligations

that form part of the contract with customers have an original

expected term of a maximum of one year. The Group has no

contracts with a maturity exceeding one year where disclosures

of unfulﬁlled performance obligations are required and has as

such utilized the exemption rule in IFRS 15.

For further information about performance obligation, see

Note 2.5 Income from contracts with customers.

CONTRACT BALANCES

No contract assets in the form of accrued or deferred income

occur within the Group. Instead, revenue recognition takes place

in conjunction with delivery and complete performance which is

also when the invoice is issued. The Group’s contract balances

are comprised of accounts receivable. For more information, see

Note 2 Summary of important accounting policies.

REPAYMENT OBLIGATION

Within the Group, customer contracts exist in which the customer

is contractually entitled to volume discounts based on realized

sales volumes. This volume discount is classiﬁed as repayment

obligation and is continuously regulated during the year. For

more information repayment obligation, see Note 24 Accrued

expenses and deferred income.

74 | GARO ANNUAL REPORT

NOTES – GROUP

NOTE 7. OTHER OPERATING INCOME

2021 2020

Capitalized own work, product development 3.7 6.6

Other 2.9 1.4

Total 6.6 8.0

NOTE 8. REMUNERATION OF EMPLOYEES, ETC.

2021 2020

Board, CEO and other senior executives

Salaries and other remuneration 20.7 19.6

Social security contributions 4.5 4.3

Pension costs – deﬁned-contribution plans 3.7 3.6

Total Board, CEO and other senior executives 28.9 27.5

Other employees

Salaries and other remuneration 164.5 141.9

Social security contributions 45.2 37.8

Pension costs – deﬁned-contribution plans 10.1 9.1

Total other employees 219.8 188.8

Total personnel expenses 248.7 216.3

AVERAGE NUMBER OF EMPLOYEES, SPECIFIED BY COUNTRY

2021 2020

Average no.

of employees

of whom,

men

of whom,

women

Average no.

of employees

of whom,

men

of whom,

women

Sweden 264 191 73 238 158 80

Norway 22 20 2 21 19 2

Finland 6 4 2 5 4 1

Ireland 27 23 4 23 16 7

UK 9 6 3 6 5 1

Poland 132 32 100 116 29 87

Group total 460 276 184 409 231 178

GENDER DISTRIBUTION IN THE GROUP (INCL. SUBSIDIARIES) OF BOARD MEMBERS AND OTHER SENIOR EXECUTIVES

2021 2020

No. on balance-

sheet date

of whom,

women

No. on balance-

sheet date

of whom,

women

Board members 8 2 7 2

CEO and other senior executives 10 1 10 1

Group total 18 3 17 3

GARO ANNUAL REPORT | 75

NOTES – GROUP

REMUNERATION OF SENIOR EXECUTIVES 2021

Basic salary/

Board fees

Variable

remuneration

Other

beneﬁts

Pension

costs

Other

remuneration Total

Stefan Jonsson, Board Chairman until May 5, 2021 0.2 - - - - 0.2

Rickard Blomqvist, Board Chairman from May 6, 2021* 0.6 - - - - 0.6

Susanna Hilleskog, Board member 0.3 - - - - 0.3

Lars-Åke Rydh, Board member 0.3 - - - - 0.3

Mari Kadowaki Johansson, Board member 0.3 - - - - 0.3

Jonas Lohtander, employee representative - - - - - -

Johan Paulsson, Board member from May 6, 2021 0.2 - - - - 0.2

Ulf Hedlundh, Board member 0.3 - - - - 0.3

Martin Ahltén, Board member from May 6, 2021 0.2 - - - - 0.2

Patrik Andersson, President and CEO 2.2 0.5 0.1 0.6 - 3.4

Other senior executives (5) 7.3 1.9 0.3 1.9 - 11.4

Total 11.9 2.4 0.4 2.5 - 17.2

Subsidiaries -

Other senior executives (5) 4.8 1.1 0.2 1.2 - 7.3

Group 16.7 3.5 0.6 3.7 - 24.5

REMUNERATION OF SENIOR EXECUTIVES 2020

Basic salary/

Board fees

Variable

remuneration

Other

beneﬁts

Pension

costs

Other

remuneration Total

Stefan Jonsson, Board Chairman 0.5 - - - - 0.5

Per Holmstedt, Board member until May 19, 2020 0.1 - - - - 0.1

Susanna Hilleskog, Board member 0.2 - - - - 0.2

Lars-Åke Rydh, Board member 0.3 - - - - 0.3

Mari Kadowaki Johansson, Board member 0.2 - - - - 0.2

Jonas Lohtander, employee representative - - - - - -

Rickard Blomqvist, Board member* 0.3 - - - - 0.3

Ulf Hedlundh, Board member from May 19, 2020 0.1 - - - - 0.1

Patrik Andersson, President and CEO 2.4 0.3 0.1 0.6 - 3.4

Other senior executives (5) 6.5 1.5 0.2 1.7 - 9.9

Total 10.6 1.8 0.3 2.3 - 15.0

Subsidiaries

Other senior executives (2) 6.0 0.6 0.2 1.3 - 8.1

Group 16.6 2.4 0.5 3.6 - 23.1

* Board member Rickard Blomqvist also received a consultant’s fee of MSEK 0.1 (0.6) during the year via companies, see Note 28.

PENSIONS

DEFINED-CONTRIBUTION PENSIONS

The retirement age for the CEO is 65. The premium is not more

than 30% of pensionable salary.

The retirement age for other senior executives is 65. The pen-

sion premium follows applicable collective agreements. The pen-

sion premium for premium deﬁned pension shall amount to not

more than 30% of the pension qualifying salary.

SEVERANCE PAY

A mutual period of notice of six months applies to the company

and the CEO. In the event of termination of employment by the

company, senior executives also receive severance pay of nine

monthly salaries. Severance pay is not deducted from other

forms of income. No severance pay is paid if the CEO termi-

nates employment.

A period of notice of three to six months applies between the

company and other senior executives if employment is termi-

nated by the employee, and six to 12 months if employment is

terminated by the company.

INFORMATION ON REMUNERATION RESOLVED

BUT NOT YET DUE

Variable remuneration of senior executives refers in its entirety to

variable remuneration that has not yet been paid. Payment will

take place in 2022.

76 | GARO ANNUAL REPORT

NOTES – GROUP

GUIDELINES FOR REMUNERATION

OF SENIOR EXECUTIVES

The General Meeting resolves on guidelines for determining

salary and other remuneration for the CEO and other senior

executives. The current guidelines resolved by the 2020 Annual

General Meeting mainly entail the following:

These guidelines encompass those individuals who, during

the period of validity of the guidelines, are members of Group

Management and other managers who report directly to the

CEO and Board members who are employed by the company,

referred to below as “senior executives.” The guidelines are

applicable to remuneration agreed, and amendments to remu-

neration already agreed, after adoption of the guidelines by the

2020 AGM. These guidelines do not apply to any remuneration

resolved or approved by the general meeting.

If a Board member provides services to the company that

are not part of the Board assignment, remuneration paid is

market-based, taking into account the nature and work required

for the assignment. Such remuneration shall be determined by

the Board (or the general meeting if according to law). Board

members who are employed by the company do not receive

special remuneration for their assignment(s) on the Board of the

company or Group companies.

Employments governed by rules other than Swedish may be

duly adjusted for compliance with mandatory rules or estab-

lished local practice, taking into account the overall purpose of

these guidelines to the extent possible.

THE GUIDELINES’ PROMOTION OF THE COMPANY’S

BUSINESS STRATEGY, LONG-TERM INTERESTS

AND SUSTAINABILITY

In brief, the company’s business strategy is, with a focus on inno-

vation, sustainability and design, to provides proﬁtable complete

solutions for the electrical industry. A prerequisite for the suc-

cessful implementation of the company’s business strategy and

safeguarding of its long-term interests, including its sustainability,

is that the company is able to recruit and retain qualiﬁed person-

nel. To this end, it is necessary that the company offers competi-

tive remuneration. These guidelines enable the company to offer

the executive management a competitive total remuneration.

Variable cash remuneration covered by these guidelines shall

aim at promoting the company’s business strategy and long-term

interests, including its sustainability.

TYPES OF REMUNERATION, ETC.

The remuneration shall be on market terms and may consist of

the following components: ﬁxed cash salary, variable cash remu-

neration, pension beneﬁts and other beneﬁts. Additionally, the

general meeting may – irrespective of these guidelines – resolve

on, among other things, share-related or share price-related

remuneration.

The satisfaction of criteria for awarding variable cash remu-

neration shall be measured over a period of one year. Variable

cash remuneration to the CEO is not to exceed MSEK 2 per

year and does not comprise pensionable salary. Variable cash

remuneration for other senior executives may amount to not

more than 30% of ﬁxed annual cash salary. The variable cash

remuneration is to be linked to clear, target-based criteria in

simple and transparent structures. The criteria can be ﬁnancial

or non-ﬁnancial. They may also be individualized, quantitative

or qualitative objectives. The criteria shall be designed so as

to contribute to the company’s business strategy and long-term

interests, including its sustainability, by for example being clearly

linked to the business strategy or promote the executive’s long-

term development. These criteria currently include sales and

earnings-based ﬁnancial objectives.

The which extent the criteria for awarding variable cash remu-

neration has been satisﬁed shall be evaluated/determined when

the measurement period has ended. The Board is responsible for

the evaluation so far as it concerns variable cash remuneration

to the CEO. For variable cash remuneration to other executives,

the CEO is responsible for the evaluation. For ﬁnancial objec-

tives, the evaluation shall be based on the latest ﬁnancial infor-

mation made public by the company.

For the CEO, pension beneﬁts, including health insurance,

shall be premium deﬁned. The pension premiums for premium

deﬁned pension shall amount to not more than 30% of the pen-

sion qualifying salary. For other executives, pension beneﬁts

including health insurance shall be premium deﬁned unless the

individual concerned is subject to deﬁned beneﬁt pension under

mandatory collective agreement provisions. The pension premi-

ums for premium deﬁned pension shall amount to not more than

30% of the pension qualifying salary.

Other beneﬁts for senior executives, such as company cars,

computers, mobile phones, additional health insurance or occu-

pational health services, may be awarded to the extent that this

is deemed market practice for senior executives in equivalent

positions in the market in which the company operates. Such

beneﬁts may total a maximum of 15% of the ﬁxed annual cash

salary.

TERMINATION OF EMPLOYMENT

The notice period may not exceed twelve months if notice of

termination of employment is made by the company. Fixed

cash salary during the period of notice and severance pay

may together not exceed an amount equivalent to the CEO’s

ﬁxed cash salary for two years, and one year for other

executives. The period of notice may not exceed six months

without any right to severance pay when termination is made

by the executive.

SALARY AND EMPLOYMENT CONDITIONS FOR EMPLOYEES

In the preparation of the Board’s proposal for these remunera-

tion guidelines, salary and employment conditions for employ-

ees of the company have been taken into account by including

information on the employees’ total income, the components

of the remuneration and increase and growth rate over time,

in the Board’s basis for decision when evaluating whether the

guidelines and the limitations set out herein are reasonable. The

development of the gap between the remuneration to executives

and remuneration to other employees will be disclosed in the

remuneration report.

NOTE 8, CONT.

GARO ANNUAL REPORT | 77

NOTES – GROUP

THE DECISION-MAKING PROCESS TO DETERMINE,

REVIEW AND IMPLEMENT THE GUIDELINES

Since 2020, the Board has established a Remuneration Com-

mittee comprising some of the members of the Board. The

Remuneration Committee assists the Board with proposals in

renumeration-related matters. The Board shall prepare a pro-

posal for new guidelines at least every fourth year and submit

it to the AGM. The guidelines shall be in force until new guide-

lines are adopted by the general meeting. The Board shall also

monitor and evaluate programs for variable remuneration to

executive management and the application of the guidelines

for executive remuneration as well as the current remuneration

structures and compensation levels in the company. The CEO

and other members of the executive management do not par-

ticipate in the Board’s handling of and resolutions regarding

remuneration-related matters in so far as they are affected by

such matters.

GUIDELINES FOR REMUNERATION

OF SENIOR EXECUTIVES 2022

The Board of Directors in GARO AB (publ) proposes that the

2022 Annual General Meeting resolve on the following guide-

lines for remuneration of senior executives. In relation to the

current guidelines, the proposal mainly entail, in addition to

some editorial adjustments, an opportunity for the Board to

propose on extra variable cash remuneration to be paid to the

CEO and other senior executives with the aim of promoting the

GARO Group’s strategical initiatives between 2022 and 2023.

The Board has not received any opinions from shareholders

regarding the current guidelines for remuneration of senior

executives.

SCOPE OF THE GUIDELINES, ETC.

These guidelines encompass those individuals who, during the

period of validity of the guidelines, are members of Group

Management and other managers who report directly to the

CEO and Board members who are employed by the company,

referred to below as “senior executives.” The guidelines are

applicable to remuneration agreed, and amendments to remu-

neration already agreed, after adoption of the guidelines by the

2022 AGM. These guidelines do not apply to any remuneration

resolved or approved by the general meeting.

If a Board member provides services to the company that

are not part of the Board assignment, remuneration paid is

market-based, taking into account the nature and work required

for the assignment. Such remuneration shall be determined by

the Board (or the general meeting if according to law). Board

members who are employed by the company do not receive

special remuneration for their assignment(s) on the Board of the

company or Group companies.

Employments governed by rules other than Swedish may be

duly adjusted for compliance with mandatory rules or estab-

lished local practice, taking into account the overall purpose of

these guidelines to the extent possible.

THE GUIDELINES’ PROMOTION OF THE COMPANY’S

BUSINESS STRATEGY, LONG-TERM INTERESTS

AND SUSTAINABILITY

In brief, the company’s business strategy is, with a focus on inno-

vation, sustainability and design, to provides proﬁtable complete

solutions for the electrical industry. For further information about

the company’s business strategy, visit http://www.garo.se/en/

about-garo/our-business-idea. A prerequisite for the successful

implementation of the company’s business strategy and safe-

guarding of its long-term interests, including its sustainability, is

that the company is able to recruit and retain qualiﬁed person-

nel. To this end, it is necessary that the company offers competi-

tive remuneration. These guidelines enable the company to offer

the executive management a competitive total remuneration.

Variable cash remuneration covered by these guidelines shall

aim at promoting the company’s business strategy and long-term

interests, including its sustainability.

TYPES OF REMUNERATION, ETC.

The remuneration shall be on market terms and may consist of

the following components: ﬁxed cash salary, variable cash remu-

neration, pension beneﬁts and other beneﬁts. Additionally, the

general meeting may – irrespective of these guidelines – resolve

on, among other things, share-related or share price-related

remuneration. The Board has proposed that the 2022 AGM

resolve on a long-term inventive program through the issue and

transfer of warrants to, inter alia, senior executives.

VARIABLE CASH REMUNERATION

The satisfaction of criteria for awarding variable cash remunera-

tion shall be measured over a period of one year. Variable cash

remuneration to the CEO is not to exceed MSEK 2 per year and

does not comprise pensionable salary. Variable cash remuner-

ation for other senior executives may amount to not more than

30% of ﬁxed annual cash salary. The variable cash remunera-

tion is to be linked to clear, target-based criteria in simple and

transparent structures. The criteria can be ﬁnancial or non-ﬁnan-

cial. They may also be individualized, quantitative or qualitative

objectives. The criteria shall be designed so as to contribute to

the company’s business strategy and long-term interests, includ-

ing its sustainability, by for example being clearly linked to the

business strategy or promote the executive’s long-term develop-

ment. These criteria currently include sales and earnings-based

ﬁnancial objectives.

The which extent the criteria for awarding variable cash remu-

neration has been satisﬁed shall be evaluated/determined when

the measurement period has ended. The Board is responsible for

the evaluation so far as it concerns variable cash remuneration

to the CEO. For variable cash remuneration to other executives,

the CEO is responsible for the evaluation. For ﬁnancial objec-

tives, the evaluation shall be based on the latest ﬁnancial infor-

mation made public by the company.

In addition to the maximum amount stated above, the Board

must, with the aim of promoting resolved strategic initiatives

during the 2022–2023 period, have the opportunity to resolve

on variable cash remuneration to be issued to the CEO and

78 | GARO ANNUAL REPORT

NOTES – GROUP

other senior executives corresponding to not more than nine (9)

monthly salaries. Such extra variable cash remuneration must

be related to achieving previously set targets that promote the

GARO Group’s strategic initiatives during 2022–2023. The

measurement period must therefore run across two ﬁscal years,

and the evaluation regarding meeting criteria for payment is to

take place following the 2024 AGM. Provided that it can be

completed with cost neutrality for GARO, the CEO and other

senior executives have the right to receive a maximum of 30%

of such extra variable cash remuneration as a pension beneﬁt,

which should be exempt from pension premiums of 30% as

described below.

PENSION BENEFITS

For the CEO, pension beneﬁts, including health insurance, shall

be premium deﬁned. The pension premiums for premium deﬁned

pension shall amount to not more than 30% of the pension qual-

ifying salary. For other executives, pension beneﬁts including

health insurance shall be premium deﬁned unless the individual

concerned is subject to deﬁned beneﬁt pension under mandatory

collective agreement provisions. The pension premiums for pre-

mium deﬁned pension shall amount to not more than 30% of the

pension qualifying salary.

OTHER BENEFITS

Other beneﬁts for senior executives, such as company cars, com-

puters, mobile phones, additional health insurance or occupa-

tional health services, may be awarded to the extent that this is

deemed market practice for senior executives in equivalent posi-

tions in the market in which the company operates. Such beneﬁts

may total a maximum of 15% of the ﬁxed annual cash salary.

TERMINATION OF EMPLOYMENT

The notice period may not exceed twelve months if notice of ter-

mination of employment is made by the company. Fixed cash sal-

ary during the period of notice and severance pay may together

not exceed an amount equivalent to the CEO’s ﬁxed cash salary

for two years, and one year for other executives. The period of

notice may not exceed six months without any right to severance

pay when termination is made by the executive.

SALARY AND EMPLOYMENT CONDITIONS FOR EMPLOYEES

In the preparation of the Board’s proposal for these remunera-

tion guidelines, salary and employment conditions for employ-

ees of the company have been taken into account by including

information on the employees’ total income, the components

of the remuneration and increase and growth rate over time,

in the Board’s basis for decision when evaluating whether the

guidelines and the limitations set out herein are reasonable. The

development of the gap between the remuneration to executives

and remuneration to other employees will be disclosed in the

remuneration report.

THE DECISION-MAKING PROCESS TO DETERMINE,

REVIEW AND IMPLEMENT THE GUIDELINES

The Board has established a Remuneration Committee. The com-

mittee’s tasks include preparing the Board’s proposals for reso-

lutions of guidelines for remuneration to senior executives. The

Board shall prepare a proposal for new guidelines at least every

fourth year and submit it to the AGM. The guidelines shall be in

force until new guidelines are adopted by the general meeting.

The Remuneration Committee shall also monitor and evaluate

programs for variable remuneration to executive management

and the application of the guidelines for executive remuneration

as well as the current remuneration structures and compensation

levels in the company. The CEO and other members of the exec-

utive management do not participate in the Board’s handling of

and resolutions regarding remuneration-related matters in so far

as they are affected by such matters.

DEROGATION FROM THE GUIDELINES

The Board may temporarily resolve to derogate from the guide-

lines, in whole or in part, if in a speciﬁc case there is special

cause for the derogation and a derogation is necessary to serve

the company’s long-term interests, including its sustainability, or

to ensure the company’s ﬁnancial viability. As set out above, the

Remuneration Committee’s tasks include preparing the Board’s

resolutions in remuneration-related matters. This includes any

resolutions to derogate from the guidelines.

NOTE 9. REMUNERATION OF AUDITORS

2021 2020

Ernst & Young

– Audit assignment 1.5 1.5

– Auditing activities in addition

to audit assignment 0.5 0.3

Total 2.0 1.8

Grant Thornton

– Audit assignment 0.1 0.1

Total 0.1 0.1

NOTE 8, CONT.

GARO ANNUAL REPORT | 79

NOTES – GROUP

NOTE 10. LEASES

GARO divides its leases into three classes of right-of-use assets: Properties,

vehicles and machinery. The closing balances of the right-of-use assets and lease

liabilities as well as changes during the year are presented in the table below:

 Right-of-use assets 

2021 ﬁscal year Property Vehicles Machinery Total Lease liability

Opening carrying amount 34.7 3.8 - 38.5 38.0

Additional right-of-use assets and lease liabilities 0.5 5.8 0.5 6.8 6.8

Depreciation of right-of-use assets -7.3 -3.6 - -10.9 -

Exchange-rate differences 2.2 - - 2.2 2.2

Interest expenses on lease liabilities - - - - 0.5

Lease payments - - - - -11.7

Closing carrying amount 30.1 6.0 0.5 36.6 35.8

 Right-of-use assets 

2020 ﬁscal year Property Vehicles Machinery Total Lease liability

Opening carrying amount 40.4 1.5 - 41.9 41.9

Additional right-of-use assets and lease liabilities 4.7 5.1 - 9.8 9.8

Depreciation of right-of-use assets -7.1 -2.8 - -9.9 0

Exchange-rate differences -3.3 - - -3.3 -3.3

Interest expenses on lease liabilities - - - - 0.4

Lease payments - - - - -10.8

Closing carrying amount 34.7 3.8 - 38.5 38.0

The amounts attributable to lease operations recognized in proﬁt

or loss during the year are presented below:

2021 2020

Depreciation of right-of-use assets -10.9 -9.9

Interest expenses on lease liabilities -0.5 -0.4

Expenses for short-term leases -0.3 -1.9

Expenses for low-value assets - -

Total expenses attributable to lease operations -11.7 -12.2

GARO recognizes a cash outﬂow attributable to leases amount-

ing to MSEK 11.7 (10.8) for the 2021 ﬁscal year. See Note 3

for the maturity structure of the Group's lease liabilities.

The Group leases ofﬁce equipment, cars and ofﬁce premises

under non-cancelable operating leases. The lease terms vary

between three and ﬁve years. Only leases for ofﬁce premises

are longer than ﬁve years. Most leases can be extended at the

end of the lease term for a market-based fee.

80 | GARO ANNUAL REPORT

NOTES – GROUP

NOTE 11. FINANCIAL INCOME AND EXPENSES

Financial income 2021 2020

Assets and liabilities mandatorily measured

at fair value through proﬁt or loss

Net gain derivatives 3.2 -

Total ﬁnancial income for items measured

at fair value through proﬁt or loss 3.2 -

Assets and liabilities measured at amortized cost;

Interest income 0.2 -

Interest income other ﬁnancial income 1.9 -

Total interest income according to

effective interest method - 0.1

Exchange-rate differences – income, ﬁnancial

items - 0.3

Total - 0.3

Total ﬁnancial income 5.3 0.4

Financial expenses 2021 2020

Assets and liabilities mandatorily measured

at fair value through proﬁt or loss

Net loss derivatives - -1.5

Total ﬁnancial expenses for items measured

at fair value through proﬁt or loss - -1.5

Assets and liabilities measured at amortized cost;

Interest expenses loans -1.0 -1.2

Interest expenses, lease liability -0.4 -0.4

Interest expenses, other ﬁnancial liabilities -2.5 -3.0

Total interest expenses according to

effective interest method -3.9 -4.6

Exchange-rate differences – expenses,

ﬁnancial items -0.2 -7.4

Total -0.2 -12.0

Total ﬁnancial expenses -4.1 -13.5

NOTE 12. INCOME TAX

2021 2020

Recognized tax

Current tax on net income for the year -39.3 -27.0

Changed in deferred tax (Note 23) -2.4 -0.7

Total income tax -41.7 -27.7

The Group has operations in a tax-exempt Special Economic

Zone in Poland. Only parts of the Polish operations are encom-

passed by these tax breaks. On December 31, 2021, unutilized

tax advantages amounted to approximately MSEK 2.6 (4.7) for

use until 2026. Deferred tax assets were taken into account in

the reporting.

Income tax on proﬁt before tax differs from the theoretical

amount that would have arisen from the use of the tax rate in

Sweden for the proﬁt of consolidated companies, as follows:

2021 2020

Proﬁt before tax 208.4 123.1

Income tax calculated according to tax rate

in Sweden (20.6%) -42.9 -26.3

Effect of foreign tax rates 1.0 -0.7

Tax effects of:

– Non-deductible expenses -0.4 -0.7

– Tax attributable to non-capitalized

loss carryforwards 0.6 0

Tax expense -41.7 -27.7

Effective tax rate, % 20.0 22.5

GARO ANNUAL REPORT | 81

NOTES – GROUP

NOTE 13. OTHER INTANGIBLE ASSETS

Capitalized development

expenditure

Development projects

in progress Total

At January 1, 2020

Cost 37.9 17.1 55.0

Accumulated amortization and impairment -27.2 - -27.2

Carrying amount 10.7 17.1 27.8

2020 ﬁscal year

Opening carrying amount 10.7 17.1 27.8

Capitalized expenses - 24.6 24.6

Reclassiﬁcations 6.6 -6.6 0

Divestments and disposals -8.9 - -8.9

Depreciation/amortization -4.3 - -4.3

Resolution of depreciation/amortization due to divestments and disposals 8.9 - 8.9

Closing carrying amount 13.0 35.1 48.1

At December 31, 2020

Cost 35.6 35.1 70.7

Accumulated amortization and impairment -22.6 - -22.6

Carrying amount 13.0 35.1 48.1

2021 ﬁscal year

Opening carrying amount 13.0 35.1 48.1

Capitalized expenses - 26.5 26.5

Reclassiﬁcations/internal transfers 26.5 -27.1 -0.6

Divestments and disposals - - -

Amortization -11.4 - -11.4

Closing carrying amount 28.1 34.5 62.6

At December 31, 2021

Cost 62.1 34.5 96.6

Accumulated amortization and impairment -34.0 - -34.0

Carrying amount 28.1 34.5 62.6

82 | GARO ANNUAL REPORT

NOTES – GROUP

NOTE 14. GOODWILL

Goodwill

At January 1, 2020

Cost 42.8

Accumulated impairment -3.2

Carrying amount 39.6

2020 ﬁscal year

Opening carrying amount 39.6

Acquisition of subsidiaries 5.9

Closing carrying amount 45.5

At December 31, 2020

Cost 48.7

Accumulated impairment -3.2

Carrying amount 45.5

2021 ﬁscal year

Opening carrying amount 45.5

Closing carrying amount 45.5

At December 31, 2021

Cost 48.7

Accumulated impairment -3.2

Carrying amount 45.5

Goodwill is distributed between the Group’s cash-generating

units, which comprise the segments. The assessment of recover-

able amount includes assumptions regarding growth, earnings

trend and investments, including investments in working capital.

Assumed growth amounts to approximately 10%, depending on

product area, for next year’s forecast and is sustained at 2%.

The assumed EBIT margins amount to 8.1% for the next year,

and then a forecast lost sales volume in certain product groups

without offsetting by increasing prices, combined with high

competition in other product groups, resulted in an EBIT margin

of a minimum of 7.7%. The growth and margin assumptions are

based on outcomes of prior years and management’s expecta-

tions of market trends. Investment amounts are based on fore-

casts and are subsequently sustained at levels corresponding to

depreciation.

Goodwill is tested for impairment every year. A discount rate

(WACC) of 10.0% was used in this year’s test. The test did not

reveal any impairment requirement. A number of sensitivity

analyses have been performed where the sustained growth rate

was set at 0 percentage points, the EBIT margin declines by 2

percentage points or the discount rate increases by 2%. None of

these analyses indicated any impairment requirement.

Goodwill per segment Dec 31, 2021 Dec 31, 2020

Segment GARO Sweden 45.5 45.5

Segment GARO International - -

Total 45.5 45.5

GARO ANNUAL REPORT | 83

NOTES – GROUP

NOTE 15. TANGIBLE ASSETS

Lands and

buildings

Plant and

machinery

Equipment, tools,

ﬁxtures and ﬁttings

Construction

in progress Total

At January 1, 2020

Cost 112.4 33.8 113.3 6.9 266.4

Accumulated depreciation -47.3 -31.4 -83.5 - -162.2

Carrying amount 65.1 2.4 29.8 6.9 104.2

2020 ﬁscal year

Opening carrying amount 65.1 2.4 29.8 6.9 104.2

Exchange-rate differences -3.0 - -1.7 - -4.7

Purchases 7.9 - 2.2 4.8 14.9

Reclassiﬁcations 0.7 - 4.8 -5.5 0

Divestments and disposals - -11.0 -32.6 - -43.6

Depreciation -3.3 -0.6 -8.7 - -12.6

Resolution of depreciation/amortization

due to divestments and disposals - 11.0 32.6 - 43.6

Closing carrying amount 67.4 1.8 26.4 6.3 101.9

At December 31, 2020

Cost 107.1 22.8 85.7 6.3 221.9

Accumulated depreciation -39.7 -21.0 -59.3 - -120.0

Carrying amount 67.4 1.8 26.4 6.3 101.9

2021 ﬁscal year

Opening carrying amount 67.4 1.8 26.4 6.3 101.9

Exchange-rate differences - - - - -

Purchases 2.2 - 3.4 13.3 18.9

Reclassiﬁcations/internal transfers 0.8 0.8 14.9 -15.2 1.3

Divestments and disposals 0 -0.2 -1.9 - -2.1

Depreciation -2.8 -0.8 -9.9 - -13.5

Resolution of depreciation/amortization

due to divestments and disposals - - 1.0 - 1.0

Closing carrying amount 67.6 1.6 33.9 4.4 107.5

At December 31, 2021

Cost 109.8 23.4 102.5 4.4 240.1

Accumulated depreciation -42.2 -21.8 -68.6 0 -132.6

Carrying amount 67.6 1.6 33.9 4.4 107.5

NOTE 16. INVENTORIES

2021 2020

Raw materials and consumables 159.3 104.4

Finished goods and goods for resale 78.3 73.5

Products in progress 4.5 4.6

Total 242.1 182.5

Impairment was recognized at a total of MSEK 9.6 (10.9).

84 | GARO ANNUAL REPORT

NOTES – GROUP

NOTE 17. FINANCIAL INSTRUMENTS

Measurement of ﬁnancial assets

at Dec 31, 2021

Carrying

amount

Fair

value

Financial assets measured at amortized cost

Accounts receivable 336.0 336.0

Other current receivables 8.4 8.4

Cash and cash equivalents 81.6 81.6

Financial assets measured at fair value

through proﬁt or loss

Derivative instruments - -

Total 426.0 426.0

Measurement of ﬁnancial assets

at Dec 31, 2020

Carrying

amount

Fair

value

Financial assets measured at amortized cost

Accounts receivable 238.6 238.6

Other current receivables 4.5 4.5

Cash and cash equivalents 69.4 69.4

Financial assets measured at fair value

through proﬁt or loss

Derivative instruments - -

Total 312.5 312.5

Measurement of ﬁnancial liabilities

at Dec 31, 2021

Carrying

amount

Fair

value

Financial assets measured at amortized cost

Liabilities to credit institutions 36.4 36.4

Lease liability 35.8 35.7

Accounts payable 166.5 166.5

Other short-term liabilities 34.4 34.4

Financial liabilities measured at fair value

through proﬁt or loss

Derivative instruments - -

Option debt 2.4 2.4

Total 275.5 275.4

Measurement of ﬁnancial liabilities

at Dec 31, 2020

Carrying

amount

Fair

value

Financial assets measured at amortized cost

Liabilities to credit institutions 42.6 42.6

Lease liability 38.1 38.1

Accounts payable 123.9 123.9

Other short-term liabilities 26.2 26.2

Financial liabilities measured at fair value

through proﬁt or loss

Derivative instruments - -

Option debt 2.4 2.4

Total 233.2 233.2

For the purpose of disclosure, a fair value is estimated for inter-

est-bearing liabilities by discounting future cash ﬂow by the princi-

pal amount and discounting interest at the current market interest

rate. For current receivables and liabilities, the carrying amount is

deemed to comprise a reasonable estimate of the fair value.

Measurement of fair value

The Group has derivative that are measured at fair value through

proﬁt or loss. Derivative instruments are included in the row Other

short-term liabilities in the balance sheet and measured at fair

value according to Level 2. Fair value is the price that would be

received to sell an asset or paid to transfer a liability in an orderly

transaction between market participants at the measurement date.

The different levels are deﬁned according to below:

Level 1 – Quoted prices (non-adjusted) in active markets for

identical assets or liabilities

Level 2 – Inputs other than quoted prices included within Level

1 that are observable for the asset or liability, either

directly (quoted prices) or indirectly (derived from

quoted prices)

Level 3 – Inputs for the asset or liability that are not based on

observable market data (Unobservable inputs)

GARO ANNUAL REPORT | 85

NOTES – GROUP

NOTE 18. ACCOUNTS RECEIVABLE

Dec 31, 2021 Dec 31, 2020

Accounts receivable 337.2 239.3

Loss allowance -1.2 -0.7

Accounts receivable – net 336.0 238.6

The fair value of accounts receivable corresponds to their carry-

ing amount since the discount effect is not material.

The age analysis of these accounts receivable was as follows:

2021 2020

Group Gross Impairment Percentage of loss Gross Impairment Percentage of loss

Not past due accounts receivable 282.8 - - 201.1 - -

Past due accounts receivable 0–30 days 41.3 - - 29.6 - -

Past due accounts receivable 31–60 days 6.9 - - 2.7 - -

Past due accounts receivable 61–90 days 2.5 - - 0.4 - -

Past due accounts receivable > 91 days 3.7 -1.2 - 0.5 -0.7 -

Total 337.2 -1.2 - 239.3 -0.7 -

At December 31, 2021, accounts receivable of MSEK 54.4 (33.2) had fallen due for payment but no

material impairment requirement was deemed to exist for the Group. The past due receivables pertain to

a number of customers who have not shown any payment difﬁculties to date.

Change in loss allowance, simpliﬁed approach

Group 2021 2020

Opening reserve -0.7 -0.5

Acquisition of subsidiaries - -

Conﬁrmed losses - -

Reversed unutilized reserves - -

Reserves for the year -0.5 -0.2

Translation differences - -

Closing reserves 1.2 -0.7

Reserved amount in the balance sheet

for expected credit losses -1.2 -0.7

Expected credit losses primarily comprise accounts receivable

for which the Group applies the simpliﬁed approach for recog-

nizing expected credit losses, see Note 2.11.3 Impairment of

ﬁnancial assets.

Realized losses for the past ﬁve years amount to an average

of approximately 0.1% (0.1) of each year’s net sales.

86 | GARO ANNUAL REPORT

NOTES – GROUP

NOTE 19. CASH AND CASH EQUIVALENTS

Cash and cash equivalents, both in the balance sheet and the

statement of cash ﬂows, comprise the following:

Dec 31, 2021 Dec 31, 2020

Bank balances 81.6 69.4

Total 81.6 69.4

NOTE 20. SHARE CAPITAL AND OTHER

CONTRIBUTED CAPITAL

The 2021 Annual General Meeting resolved on a 5:1 share

split, meaning that each existing share was replaced with ﬁve

new shares of the same series.

Share capital at December 31, 2021 comprised 50,000,000

shares with a quotient value of SEK 0.40 per share. Each share

carries one vote per share. All shares that have been issued by

Parent Company are fully paid.

DIVIDEND

At the Annual General Meeting on May 5, 2021, the Board

proposed a dividend of SEK 0.95 per share (adjusted for the

split) for the 2020 ﬁscal year.

At the Annual General Meeting on May 11, 2022, the Board

will propose a dividend of SEK 1.40 per share for the 2021

ﬁscal year.

NOTE 21. BORROWINGS

Dec 31, 2021 Dec 31, 2020

Long-term

Liabilities to credit institutions 26.5 30.3

Financial lease liability 26.3 28.2

Total long-term borrowings 52.8 58.5

Short-term

Overdraft facilities 7.3 7.4

Liabilities to credit institutions 2.6 4.9

Financial lease liability 9.5 9.9

Total short-term borrowings 19.4 22.2

Total borrowings Group 72.2 80.7

LIABILITIES TO CREDIT INSTITUTIONS

The Group’s borrowings are in SEK, EUR and PLN. The Group’s

borrowings comprise loans from SEB.

These bank loans fall due for payment in 2027 and bear

average interest of 2.26% per year (1.4).

The Group does not have any speciﬁc loan conditions

(covenants) with external borrowers.

OVERDRAFT FACILITIES

The Group has granted overdraft facilities of MSEK 107.7 (96.2)

in the currencies of SEK, EUR and PLN that are renegotiated

every year.

NOTE 22. OTHER PROVISIONS

Dec 31, 2021 Dec 31, 2020

Opening balance 3.7 2.2

Amounts used 2.6 1.5

Unutilized amounts that have been reversed - -

Opening balance 6.3 3.7

NOTE 23. DEFERRED TAX ASSETS

AND TAX LIABILITIES

Dec 31, 2021 Dec 31, 2020

Deferred tax assets

Lease liability 7.5 7.9

Other (Note 12) 3.8 6.2

Total 11.3 14.1

Deferred tax liabilities

Buildings, land and land improvements -0.6 -0.6

Right-of-use assets -7.4 -7.8

Total -8.0 -8.4

Deferred tax assets – net 3.3 5.7

NOTE 24. ACCRUED EXPENSES

AND DEFERRED INCOME

Dec 31, 2021 Dec 31, 2020

Accrued salary liabilities 22.6 20.6

Accrued social security contributions 9.1 9.9

Bonuses to customers 35.5 19.8

Accrued interest expenses - -

Other items 17.7 18.1

Total 84.9 68.4

NOTE 25. PLEDGED ASSETS

Dec 31, 2021 Dec 31, 2020

For liabilities to credit institutions

Property mortgages 66.9 71.7

Chattel mortgages 85.2 81.0

Assets with ownership reservation 6.0 6.0

Guarantees for leases - -

Total 158.1 158.7

GARO ANNUAL REPORT | 87

NOTES – GROUP

NOTE 26. BUSINESS COMBINATIONS

In June, 2020, GARO acquired 70% of the shares of EV Charge

Partner Sweden AB. EV Charge Partner is a company that

carries out service and support as well as the commissioning

of charging infrastructure primarily for charging operators and

power companies in Sweden and Poland.

EV Charge Partner Sweden AB employs eight people and is

based in Gnosjö, Sweden. The purchase consideration for the

acquisition amounted to MSEK 5.6 that was paid in cash. The

acquired unit was consolidated on June 1, 2020. The transac-

tion costs amounted to MSEK 1.3.

The acquired unit contributed net sales of MSEK 10.4 (3.1) in

2021 with net income of MSEK -1.3 (-0.3).

With the acquisition, Group goodwill increased MSEK 5.9.

Goodwill is attributable to synergies with existing operations

within the Group. The goodwill value is not tax-deductible.

PRELIMINARY ACQUISITION CALCULATION

EV CHARGE PARTNER SWEDEN AB

Company’s acquired assets

on the acquisition date

Fair value

in the Group

Intangible assets -

Other assets 0.1

Inventories 1.3

Other current assets 1.8

Cash and cash equivalents 0.2

Untaxed reserves -0.5

Other liabilities -1.5

Net identiﬁable assets/liabilities 1.4

Consolidated goodwill 5.9

Cash purchase consideration -5.6

GARO normally applies an acquisition structure with a base pur-

chase consideration and a potential additional option. Together

with the acquisition of EV Charge Partner, GARO received

the right and obligation to acquire an additional 10% of the

shares in EV Charge Partner during 2022. Additionally, GARO

received the option to acquire – and Davids Elteknik an option

to sell – the remainder of shares outstanding in EV Charge Part-

ner after the close of 2025. The amount of MSEK 2.4 is recog-

nized as a liability in GARO AB. The recognized amount is an

estimate of the remaining purchase consideration that is depen-

dent on the ﬁnancial outcomes of EV Charge Partner Sweden AB

during the contract period.

NOT 27. SHARE DATA

Earnings per share (adjusted for the split) 2021 2020

Earnings per share, before and after dilution, SEK 3.33 1.91

Equity, before and after dilution, SEK 11.03 8.61

Average number of shares, thousands 50,000 50,000

Number of shares outstanding, thousands 50,000 50,000

NOTE 28. RELATED PARTIES

Purchases of goods and services 2021 2020

Purchase of services

Consulting services from Board member

(Ekonomerna i Sverige AB) 0.1 0.6

Operations and services purchased from

parties related to the Chairman of the Board 0.1 0.7

Electrical installation services purchased from

parties related to the Chairman of the Board - 0.1

Total 0.2 1.4

The above transactions took place with related parties. The

services were purchased on normal commercial terms and con-

ditions. On the balance-sheet date, no liabilities had been recog-

nized against the related-party purchases described above.

In connection with the acquisition of EV Charge Partner Swe-

den in 2020, an analysis of a conﬂict of interest was conducted

since David Jonsson, who owned 100% of the shares in the

selling company Davids Elteknik AB, was a related party to

GARO’s Chairman Stefan Jonsson. Rickard Blomqvist managed

the acquisition process together with GARO’s management, and

Stefan Jonsson did not participate in the Board decision to carry

out the acquisition. GARO believes that the transaction was com-

pleted on market terms.

NOTE 29. EVENTS AFTER THE END

OF THE FISCAL YEAR

In January, 2022, the business areas GARO Electriﬁcation and

GARO E-mobility replaced the previous business areas of GARO

Sweden and GARO International.

In addition, GARO carried out an investment decision for a

new production and logistics facility in Poland with construction

scheduled to start in the second quarter of 2022. The planned

investment budget amounts to about MSEK 85.

At the time of writing, the situation in Ukraine and the COVID-

19 pandemic are not assessed to have any notable impact for

GARO and its operations. However, due to the situation unfold-

ing in Ukraine, uncertainty prevails concerning future access to

components.

88 | GARO ANNUAL REPORT

NOTES – GROUP

NOTE 30. KEY FIGURES AND ALTERNATIVE

PERFORMANCE MEASURES AND DEFINITIONS

The performance measures in this Annual Report take into

account the nature of the operations and are deemed to provide

relevant information to shareholders and other stakeholders and

also enable comparability with other companies.

PERFORMANCE MEASURES

NET SALES the total of sales proceeds for goods and services,

less discounts provided, VAT and other tax.

EBIT Earnings before interest and tax.

MARGIN MEASURES

EBIT MARGIN EBIT as a percentage of net sales for the period.

CAPITAL STRUCTURE

NET DEBT Interest-bearing liabilities, lease liabilities according

to IFRS 16 less assets including cash and cash equivalents.

NET DEBT/EQUITY RATIO Net debt as a percentage of equity.

INTEREST COVERAGE RATIO Proﬁt after ﬁnancial income as a

percentage of ﬁnancial expenses.

EQUITY RATIO Equity including non-controlling interest divided

by total assets.

TOTAL ASSETS The total on the assets side, or the total on the

liabilities side plus equity.

RETURN MEASURES

RETURN ON EQUITY Net income for the year divided by

average equity.

PER SHARE

EARNINGS PER SHARE Earnings for the period divided by

average number of shares outstanding during the period.

AVERAGE NUMBER OF SHARES, 1,000S The average number

of shares during the period in 1,000s.

ALTERNATIVE PERFORMANCE MEASURES

(NON-DEFINED BY IFRS)

GARO uses certain performance measures that are not

deﬁned in the rules for ﬁnancial reporting that GARO applies.

The goal of these performance measures is to create better

understanding of how the operations are performing. It must

be stressed that these alternative performance measures, as

deﬁned, are not entirely comparable with performance mea-

sures of the same name used by other companies.

ORGANIC GROWTH: GARO’s growth strategy includes an

important ﬁnancial target of growing organically by 10% per

year seen over a business cycle, which is why management has

chosen to follow organic growth, which is deﬁned as organic

growth with adjustments for currency effects from operations in

currencies other than SEK.

EBITDA: With the aim of better illustrating underlying opera-

tional development, management has chosen to follow EBITDA,

deﬁned as EBIT before depreciation and amortization. Key

performance indicators are deﬁned as below:

EBITDA MARGIN, %: EBITDA as a percentage of net sales for

the period

WORKING CAPITAL: Working capital comprises a major part of

the value of GARO’s balance sheet. With the aim of optimizing

GARO’s cash generation, management is focusing on the devel-

opment of working capital as it is deﬁned below.

NET DEBT: Net debt is deﬁned by how large ﬁnancial borrowings

are in GARO in absolute terms less cash and cash equivalents.

Key performance indicators are deﬁned as below:

ORGANIC GROWTH

2021 2020

Preceding year sales 1,039.8 1,008.1

Organic growth 249.3 28.5

Acquisitions and structural changes 5.8 3.8

Exchange-rate effects 0.9 -0.6

Current period 1,295.8 1,039.8

EBITDA

2021 2020

Income after depreciation/amortization 207.2 136.2

Depreciation/amortization for the year 35.8 26.9

EBITDA 243.0 163.1

WORKING CAPITAL:

2021 2020

Current assets 680.8 503.1

Less cash and cash equivalents -81.6 -69.4

Less short-term non-interest-bearing liabilities -306.8 -228.1

Excl. liabilities attributable to additional

purchase considerations -2.4 -2.4

Working capital on balance-sheet date 290.0 203.4

Working capital in relation to total assets (%) 31.0 27.4

NET DEBT

2021 2020

Long-term interest-bearing liabilities 26.5 30.3

Short-term interest-bearing liabilities 9.9 12.3

Lease liability according to the IFRS 16 deﬁnition 35.8 38.1

Less cash and cash equivalents -81.6 -69.4

Net debt (-net cash) -9.4 11.3

Net debt in relation to total assets (%) N/A 1.5

GARO ANNUAL REPORT | 89

BOARD OF DIRECTORS’ REPORT – PARENT COMPANY

SHARE CAPITAL AND OWNERSHIP STRUCTURE

The Parent Company’s share capital amounted to MSEK 20 on

December 31, 2021. There were 50,000,000 common shares

on that date.

The company has been listed on Nasdaq Stockholm since

March 16, 2016.

The total number of shares on the balance-sheet date amounted

to 50,000,000 with a quotient value of SEK 0.40. Each share

provides entitlement to one vote at the Annual General Meeting.

There are no limitations to the transferability of the GARO shares

(post-sale purchase rights). There are also no limitations on how

many votes each shareholder may cast at general meetings. The

company is not aware of any agreements between shareholders

that could entail limitations to the right to transfer shares.

On the balance-sheet date, there was one shareholder who

owns and controls more than 10% of the number of votes for all

of the shares in the company. That shareholder is Lars Svensson

who controls 35.7% of the capital and votes in the company

through his own holdings. More information about the GARO’s

shares and ownership structure can be found on pages 52–53.

APPOINTMENT AND DISMISSAL OF BOARD MEMBERS

The Articles of Association do not contain any special provisions

regarding the appointment and dismissal of Board members.

OPERATIONS

GARO develops, manufactures and supplies innovative products

and complete solutions for the electrical installations market

under its own brand. GARO was founded in 1939 in Gnosjö in

Småland, Sweden, and over its more than 80-year history has

established strong customer relationships and a highly devel-

oped supplier network that, combined with proprietary produc-

tion and sales units, form a platform for delivering innovative,

complete solutions.

The Parent Company’s operations encompass a signiﬁcant

part of the Swedish operations and Group Management, and

also certain Group-wide functions and the Group’s ﬁnance func-

tion. The Parent Company’s inventory function also serves to a

certain extent as the central warehouse for the other operations.

In addition, the Parent Company conducts sales to other Group

companies.

SIGNIFICANT EVENTS DURING THE REPORTING PERIOD

On January 1, 2021, GARO completed an incorporation of the

E-mobility product area by transferring the Swedish part of oper-

ations to the wholly-owned subsidiary GARO E-mobility AB. The

purpose of the incorporation is to sharpen focus, intensify our

development activities and further broaden and strengthen our

offering to the market.

The 2021 Annual General Meeting resolved on a 5:1 share

split, meaning that each existing share was replaced with ﬁve

new shares of the same series. The share split was completed

during the second quarter.

EVENTS AFTER THE END OF THE FINANCIAL PERIOD

In January, 2022, the business areas GARO Electriﬁcation and

GARO E-mobility replaced the previous business areas of GARO

Sweden and GARO International. In addition, the Board carried

out an investment decision for a new production and logistics facil-

ity in Poland with construction start in the second quarter of 2022.

The planned investment budget amounts to about MSEK 85.

At the time of writing, the situation in Ukraine and the COVID-

19 pandemic are not assessed to have any notable impact for

GARO and its operations. However, due to the situation unfold-

ing in Ukraine, uncertainty prevails concerning future access to

components.

SUSTAINABILITY REPORT

In accordance with Chapter 6, Section 11 of the Annual

Accounts Act, GARO AB has chosen to prepare the statutory

Sustainability Report as a separate report from the Annual Report.

The Sustainability Report was submitted to the auditors at the

same time as the Annual Report. The Sustainability Report is pre-

sented on pages 34–49 of this document.

NET SALES AND EARNINGS

Net sales amounted to MSEK 481.7 (622.0). Underlying

demand was strong during the year, particularly in the Electrical

distribution products product area.

EBIT amounted to MSEK 63.4 (69.0), corresponding to an

EBIT margin of 13.2% (11.1). EBIT is a result of a favorable

product mix combined with strict cost control.

Board of Directors’ Report

for the Parent Company

The Board of Directors and the President and

CEO of GARO AB (publ), Corporate Registration

Number 556051-7772, hereby submit the

Annual Report for the 2021 ﬁscal year.

90 | GARO ANNUAL REPORT

BOARD OF DIRECTORS’ REPORT – PARENT COMPANY

SUMMARY OF THE PARENT COMPANY’S FINANCIAL PERFORMANCE

MSEK 2021 2020 2019 2018 2017

Net sales 481.7 622.0 586.6 528.6 428.9

EBITDA 76.0 81.3 58.3 66.4 45.2

EBIT 63.4 69.0 48.4 56.5 36.5

EBIT margin, % 13.2 11.1 8.3 10.7 8.5

Total assets 608.6 546.5 451.3 385.7 356.2

Equity ratio, % 59.5 57.0 53.8 56.4 52.0

Return on equity, % 27.1 24.8 26.8 36.0 32.9

Average number of employees 120 143 137 132 122

INVESTMENTS

The Parent Company invests continuously in the maintenance

of the production unit and production equipment. The Parent

Company’s investments in tangible assets amounted to MSEK

3.1 (3.2). Contributions in existing companies corresponded to

MSEK 1.5 (acquisitions in subsidiaries MSEK 33.2). GARO also

invests in product development and investments in intangible

assets for the year totaled MSEK 25.1 (24.6). Depreciation/

amortization for the year amounted to MSEK 12.6 (12.3), of

which depreciation of tangible assets was MSEK 7.1 (7.8).

CASH FLOW, LIQUIDITY AND FINANCIAL POSITION

Cash ﬂow from operating activities amounted to MSEK 40.8

(97.3). Cash ﬂow for the year amounted to MSEK 7.4 (33.9).

Cash and cash equivalents including unutilized overdraft

facilities on December 31, 2021 amounted to MSEK 168.6

(161.2). Net cash on December 31, 2021 amounted to

MSEK 58.4 (47.0).

The Parent Company’s equity on December 31, 2021

amounted to MSEK 362.2 (311.4). The 2021 dividend

amounted to MSEK 47.5 (0).

EMPLOYEES

The number of full-time employees in the Parent Company on

December 31, 2021 was 123 (150). The average number of

full-time employees in 2021 was 120 (143). The percentage of

women during the year was 37% (39). For more information

about employees, see Note 5.

PRODUCT DEVELOPMENT

The company has an in-house product development department

that works together with other departments on continuously

developing new and improving existing products and solutions.

Refer also to Note 2.8 in the consolidated ﬁnancial statements.

ENVIRONMENTAL IMPACT

The Parent Company conducts reportable operations and the

municipality is the supervisory authority. The Gårö 1:377 prop-

erty is in risk class 2 according to the county administrative

board’s Method for Inventories of Contaminated Sites (MIFO)

inventory. The company has no orders under the Swedish Envi-

ronmental Code. The Parent Company has ISO 14001 environ-

mental certiﬁcation.

RISKS AND UNCERTAINTIES

A description of potential risks and their management is pro-

vided in Note 3 in the consolidated ﬁnancial statements.

GUIDELINES FOR REMUNERATION OF SENIOR EXECUTIVES

These guidelines are described in the Board of Directors’ Report

for the Group.

PROPOSED APPROPRIATION OF PROFIT

The Group’s retained earnings in accordance with the consoli-

dated balance sheet amounted to MSEK 528.6 (407.4).

The following proﬁt is at the disposal

of the Annual General Meeting:

(SEK)

Opening retained earnings 241,330,970

Provisions to fund for own

work, development expenditure -40,514,361

Net income for the year 98,299,387

Total 299,115,996

The Board of Directors proposes that proﬁt

be appropriated as follows:

– to be distributed to shareholders

at SEK 1.40 per share -70,000,000

– to be carried forward 229,115,996

Total 299,115,996

THE BOARD’S STATEMENT ON THE PROPOSED DIVIDENDS

The Board believes that the proposed dividend will not prevent

the company from fulﬁlling its obligations in the short or long

term, nor from making necessary investments. The proposed

dividend can thus be justiﬁed with respect to the provisions of

Chapter 17, Section 3, paragraphs two and three of the Swed-

ish Companies Act.

The company’s equity ratio is satisfactory since the operations

continue to be conducted proﬁtably. It is deemed that the compa-

ny’s liquidity can also be maintained at a satisfactory level.

Multi-year summary

GARO ANNUAL REPORT | 91

PARENT COMPANY

PARENT COMPANY INCOME STATEMENT

MSEK Note 2021 2020

Operating income

Net sales 2, 3 481.7 622.0

Other operating income 4 12.8 23.6

Total 494.5 645.6

Operating expenses

Raw materials and consumables -291.3 -383.3

Other external expenses 6 -50.1 -68.0

Personnel expenses 5 -77.1 -113.0

Depreciation/amortization of tangible and intangible assets 11, 12 -12.6 -12.3

Total operating expenses -431.1 -576.6

EBIT 63.4 69.0

Proﬁt from participations in Group companies 22 7.2 13.3

Net interest income and similar items 8 6.8 2.0

Net interest expenses and similar items 8 -2.5 -7.2

Total proﬁt from ﬁnancial items 7 11.5 8.1

Proﬁt before tax 74.9 77.1

Appropriations 23 47.0 6.0

Tax on net income for the year 9 -23.6 -14.5

Net income for the year 98.3 68.6

The Parent Company does not have any items recognized as other comprehensive income

which is why total comprehensive income corresponds to net income for the year.

Parent Company

Annual Report

92 | GARO ANNUAL REPORT

PARENT COMPANY

PARENT COMPANY BALANCE SHEET

MSEK Note Dec 31, 2021 Dec 31, 2020

ASSETS

FIXED ASSETS

Intangible assets

Capitalized development expenditure 11 9.1 14.3

Development projects in progress 11 34.4 35.1

Total intangible assets 11 43.5 49.4

Tangible assets

Lands and buildings 12 24.3 24.5

Plant and machinery 12 0.2 0.6

Equipment, tools, ﬁxtures and ﬁttings 12 12.5 16.0

Construction in progress and advance payments for tangible assets 12 1.4 6.0

Total tangible assets 12 38.4 47.1

Financial assets

Participations in Group companies 10 80.8 79.3

Receivables from Group companies 59.9 30.6

Total ﬁnancial assets 140.7 109.9

TOTAL FIXED ASSETS 222.6 206.4

CURRENT ASSETS

Inventories

Raw materials and consumables 28.2 47.0

Products in progress 12.2 0.1

Finished goods and goods for resale 0.4 19.7

Total inventories 40.8 66.8

Current receivables

Accounts receivable 13, 14 83.9 119.1

Receivables from Group companies 182.6 86.2

Other current receivables 2.0 0.6

Prepaid expenses and accrued income 5.3 3.4

Total current receivables 273.8 209.3

Cash and bank balances 14, 15, 18 71.4 64.0

TOTAL CURRENT ASSETS 386.0 340.1

TOTAL ASSETS 608.6 546.5

GARO ANNUAL REPORT | 93

PARENT COMPANY

PARENT COMPANY BALANCE SHEET, CONT.

MSEK Note Dec 31, 2021 Dec 31, 2020

EQUITY AND LIABILITIES

EQUITY

Restricted equity

Share capital 16 20.0 20.0

Fund for internal development expenses 40.5 35.9

Statutory reserve 2.6 2.6

Total restricted equity 63.1 58.5

Non-restricted equity

Retained earnings 200.8 184.3

Net income for the year 98.3 68.6

Total non-restricted equity 299.1 252.9

TOTAL EQUITY 362.2 311.4

LIABILITIES

Provisions

Other provisions 1.0 3.5

Provision for deferred tax 17 0.7 0.7

Total provisions 1.7 4.2

Long-term liabilities

Other liabilities to credit institutions 18 10.4 13.7

Total long-term liabilities 10.4 13.7

Short-term liabilities

Liabilities to credit institutions 14, 18 2.6 3.3

Accounts payable 51.4 58.7

Liabilities to Group companies 132.8 107.5

Current tax liabilities 7.0 1.8

Other short-term liabilities 9.0 9.8

Accrued expenses and deferred income 19 31.5 36.2

Total short-term liabilities 234.3 217.2

TOTAL LIABILITIES 246.4 235.1

TOTAL LIABILITIES AND EQUITY 608.6 546.5

94 | GARO ANNUAL REPORT

PARENT COMPANY

PARENT COMPANY STATEMENT OF CHANGES IN EQUITY

Restricted equity Non-restricted equity

MSEK Note

capital

Statutory

reserve

Fund for internal

development expenses

Retained earnings incl.

net income for the year Total

Opening balance at January 1, 2020 20.0 2.6 18.1 202.1 242.8

Net income for the year and

comprehensive income 2020 0 0 0 68.6 68.6

Total comprehensive income 0 0 0 68.6 68.6

Change in fund for internal

development expenses 0 0 17.8 -17.8 0

Dividend according to Annual

General Meeting resolution 0 0 0 -0 -0

Total contributions from and value transfers to

shareholders, recognized directly in equity 0 0 0 -0 -0

Closing balance at December 31, 2020 20.0 2.6 35.9 252.9 311.4

Opening balance at January 1, 2021 20.0 2.6 35.9 252.9 311.4

Net income for the year and

comprehensive income 2021 0 0 0 98.3 98.3

Total comprehensive income 0 0 0 98.3 98.3

Change in fund for internal

development expenses 0 0 4.6 -4.6 0

Dividend according to Annual

General Meeting resolution 0 0 0 -47.5 -47.5

Total contributions from and value transfers to

shareholders, recognized directly in equity 0 0 0 -47.5 -47.5

Closing balance at December 31, 2021 20.0 2.6 40.5 299.1 362.2

GARO ANNUAL REPORT | 95

PARENT COMPANY

PARENT COMPANY CASH-FLOW STATEMENT

MSEK Note 2021 2020

Cash ﬂow from operating activities

EBIT 63.4 69.0

Adjustment for non-cash items

Depreciation/amortization 11, 12 12.6 12.3

Other -5.3 0.9

Dividends received 22 7.2 13.3

Net interest income and similar items 8 6.8 2.0

Net interest expenses and similar items 8 -2.5 -7.2

Income tax paid 9 -16.8 -24.5

Cash ﬂow from operating activities before change in working capital 65.4 65.8

Change in inventories 26.0 -5.8

Change in accounts receivable 13 -61.1 -1.5

Change in other current receivables -1.9 0.3

Change in accounts payable 18.1 0.8

Change in other current operating liabilities -5.7 37.6

Total change in working capital -24.6 31.5

Cash ﬂow from operating activities 40.8 97.3

Cash ﬂow from investing activities

Investments in intangible assets 11 -25.1 -24.6

Investments in tangible assets 12 -3.1 -3.2

Assets sold 12 30.2 0

Investments in subsidiaries -1.5 -33.2

Acquisition of other ﬁnancial assets -29.3 -5.0

Cash ﬂow from investing activities -28.8 -66.0

Cash ﬂow from ﬁnancing activities

Amortization of loans -4.1 -3.4

Group contributions paid/received 23 47.0 6.0

Dividend paid -47.5 0

Cash ﬂow from ﬁnancing activities -4.6 2.6

Decrease/increase in cash and cash equivalents

Net cash ﬂow for the year 7.4 33.9

Cash and cash equivalents at beginning of the year 64.0 30.1

Cash and cash equivalents at end of the year 71.4 64.0

96 | GARO ANNUAL REPORT

NOTES – PARENT COMPANY

NOTE 1. GENERAL INFORMATION

GARO Aktiebolag (the “Parent Company”) develops, manufactures

and markets electrical installation materials. The single largest mar-

ket is Sweden, which represents 65% (64) of the Parent Company’s

volumes. Export sales are conducted mainly to own subsidiaries in

Norway, Finland, Poland, Ireland Northern Ireland and the UK.

The Parent Company is a limited liability company registered

in Sweden with its registered ofﬁce in Gnosjö. The address of

the ofﬁce is Södergatan 26, Box 203, SE-335 33 Gnosjö, Swe-

den. The GARO share has been listed on Nasdaq Stockholm

since March 16, 2016.

All amounts are stated in millions of Swedish kronor

(MSEK),unless otherwise stated.

NOTE 2. SUMMARY OF PARENT COMPANY’S

IMPORTANT ACCOUNTING POLICIES

The most important accounting policies applied in the preparation

of this Annual Report are described below. These policies were

applied consistently for all years presented, unless otherwise stated.

The Annual Report for GARO Aktiebolag (the “Parent Com-

pany”) was prepared in accordance with RFR 2 Accounting for

Legal Entities and the Swedish Annual Accounts Act. In cases in

which the Parent Company applies different accounting policies

than the Group’s accounting policies as described in Note 2 of

the consolidated ﬁnancial statements, this is speciﬁed below.

The Annual Report was prepared following the cost method.

RFR 2 stipulates that the Parent Company is to apply all IFRSs

and statements adopted by the EU to the extent that this is pos-

sible within the framework of the Annual Accounts Act with con-

sideration of the relationship between accounting and taxation.

Preparing ﬁnancial statements in accordance with RFR 2 requires

the use of a number of important estimates for accounting

purposes. Management is also required to make certain assess-

ments when applying the Parent Company’s accounting policies.

The areas involving a high degree of assessment, that are com-

plex or are such areas in which assumptions and estimates are

of signiﬁcant importance to the Annual Report are described in

Note 4 of the consolidated ﬁnancial statements.

Through its operations, the Parent Company is exposed to a

variety of different ﬁnancial risks: market risk (including currency

risk, interest-rate risk), credit risk and liquidity risk. The Parent

Company’s overall risk management policy focuses on the

unpredictability of the ﬁnancial markets and seeks to minimize

potential unfavorable effects on the Group’s ﬁnancial earnings.

For more information about ﬁnancial risks, see Note 3 in the

consolidated ﬁnancial statements.

The Parent Company applies different accounting policies than

the Group in the cases described below.

PRESENTATION FORMATS

Income statements and balance sheets follow the presentation

format of the Annual Accounts Act. The statement of changes in

equity follows the Group’s presentation format but is to contain

the components stipulated in the Annual Accounts Act. There are

also differences in the names of items compared with the consol-

idated ﬁnancial statements, primarily regarding ﬁnancial income

and expenses and equity.

PARTICIPATIONS IN SUBSIDIARIES

Participations in subsidiaries are recognized at cost less any

impairment. Cost includes acquisition-related expenses. The

recoverable amount is calculated when there is an indication

that participations in subsidiaries have declined in value. If this

amount is lower than the carrying amount, impairment is recog-

nized. Impairment is recognized in the item “Proﬁt from partici-

pations in Group companies.”

FINANCIAL INSTRUMENTS

Due to the relationship between accounting and taxation, the

rules on ﬁnancial instruments stated in IFRS 9 are not applied

in the Parent Company as a legal entity and instead the Parent

Company applied the cost method in accordance with the Swed-

ish Annual Accounts Act. Accordingly, in the Parent Company

ﬁnancial assets are measured at cost and ﬁnancial current assets

according to the lowest value principle, by applying impairment

of expected credit losses according to IFRS 9 for assets that are

debt instruments. For other ﬁnancial assets, impairment is based

on market value. Derivative instruments with negative fair value

are recognized as a liability at the negative fair value with

changes in value through proﬁt or loss.

The Parent Company applies the exemption of not measuring

ﬁnancial guarantees for subsidiaries, associated companies and

joint ventures in accordance with IFRS 9 rules. Instead it applies

the measurement principles stated in IAS 37 Provisions, Contin-

gent Liabilities and Contingent Assets.

DERIVATIVE INSTRUMENTS

Derivative instruments are recognized in the balance sheet on the

contract date and measured at fair value, both initially and when

subsequently remeasured. Derivative instruments are not used for

hedge accounting. Changes in fair value are subsequently imme-

diately recognized in proﬁt or loss. Outstanding forward con-

tracts amounted to MEUR 6.4 (6.7) on the balance-sheet date.

APPROPRIATIONS AND UNTAXED RESERVES

Excess depreciation, tax allocation reserves and Group contribu-

tions are recognized as appropriations. Outstanding reserves for

excess depreciation and tax allocation reserves are recognized

as untaxed reserves.

LEASES

The rules on accounting for leases under IFRS 16 are not applied

in the Parent Company. This means that lease payments are

recognized as an expense straight-line over the lease term, and

that right-of-use assets and lease liabilities are not included in the

Parent Company's balance sheet. However, a lease is identiﬁed

in accordance with IFRS 16, meaning that a contract is, or con-

tains, a lease if it conveys the right to control the use of an iden-

tiﬁed asset for a period of time in exchange for consideration.

Notes

GARO ANNUAL REPORT | 97

NOTES – PARENT COMPANY

NOTE 3. ALLOCATION OF NET SALES

2021 2020

Nordic region 479.4 603.2

Europe excl. Nordic region 2.3 18.8

Total 481.7 622.0

NOTE 4. OTHER OPERATING INCOME

2021 2020

Rental income 0 3.0

Capitalized own work 3.7 6.6

Lease of personnel and administrative service 7.5 13.5

Other 1.6 0.5

Total 12.8 23.6

NOTE 5. REMUNERATION OF EMPLOYEES, ETC.

2021 2020

Salaries and other remuneration

Salaries and other

remuneration (ofwhich,

bonus payments)

Social security

expenses (of which,

pension costs)

Salaries and other

remuneration (of which,

bonus payments)

Social security

expenses (of which,

pension costs)

Board members, CEOs and other senior executives 10.1 (1.4) 4.8 (2.0) 8.5 (0.8) 4.2 (1.7)

Other employees 49.5 (0.7) 23.9 (5.2) 61.7 (0.4) 27.6 (5.7)

Total 51.6 (2.1) 28.7 (7.2) 70.2 (1.2) 31.8 (7.4)

AVERAGE NUMBER OF EMPLOYEES,

SPECIFIED BY COUNTRY

2021 2020

Average no.

of employees

Of whom,

women

Average no.

of employees

Of whom,

women

Sweden 120 43 143 51

Total 120 43 143 51

GENDER DISTRIBUTION OF BOARD MEMBERS

AND OTHER SENIOR EXECUTIVES

2021 2020

No. on

balance-

sheet date

whom,

women

No. on

balance-

sheet date

whom,

women

Board members 8 2 7 2

CEO and other senior

executives 6 1 6 1

Total 14 3 13 3

Remuneration of senior executives: Information is provided in

Note 8 of the consolidated ﬁnancial statements.

NOTE 6. REMUNERATION OF AUDITORS

2021 2020

Ernst & Young

– Audit assignment 0.7 0.7

– Other auditing activities 0.4 0.2

PwC

– Tax advice 0.3 0.6

Total 1.4 1.5

NOTE 7. OPERATING LEASES

The Parent Company leases machinery, cars and warehouse

premises. The lease terms vary between three and ﬁve years.

Most leases can be extended at the end of the lease term for a

market-based fee.

The Parent Company's future lease payments for non-cancel-

able leases are presented below.

Future minimum lease payments 2021 2020

Within 1 year 3.3 3.1

Between 1 and 5 years 3.5 4.2

More than 5 years 0 0

Total 6.8 7.3

Expensed lease payments for the period amounted to

MSEK 4.1 (3.8).

98 | GARO ANNUAL REPORT

NOTES – PARENT COMPANY

NOTE 8. NET INTEREST INCOME AND

SIMILAR ITEMS AND INTEREST EXPENSES

AND SIMILAR ITEMS

Financial income 2021 2020

Assets and liabilities mandatorily measured

at fair value through proﬁt or loss

Net gain derivatives 3.2 0

Total ﬁnancial income for items measured at

fair value through proﬁt or loss 3.2 0

Assets and liabilities measured at

amortized cost;

Interest income from accounts receivable 0 0

Interest income other ﬁnancial income 2.9 1.9

Total interest income according to effective

interest method 2.9 1.9

Exchange-rate differences – income, ﬁnancial

items 0.7 0.1

Total 0.7 0.1

Total ﬁnancial income 6.8 2.0

Financial expenses 2021 2020

Assets and liabilities mandatorily measured

at fair value through proﬁt or loss

Net loss derivatives 0 -1.5

Total ﬁnancial expenses for items measured at

fair value through proﬁt or loss 0 -1.5

Assets and liabilities measured at amortized cost;

Interest expenses loans -0.4 -0.7

Interest expenses, other ﬁnancial liabilities 0 0

Total interest expenses according to

effective interest method -0.4 -0.7

Exchange-rate differences – expenses,

ﬁnancial items -2.1 -5.0

Total -2.1 -5.0

Total ﬁnancial expenses -2.5 -7.2

NOTE 9. TAX ON NET INCOME FOR THE YEAR

2021 2020

Recognized tax in proﬁt or loss

Current tax on net income for the year -23.1 -15.5

Changes in deferred tax (Note 17) -0.5 1.0

Total recognized tax -23.6 -14.5

Income tax on proﬁt before tax differs from the theoretical

amount that would have arisen from the use of the tax rate for

the Swedish Parent Company, as follows:

2021 2020

Proﬁt before tax 121.9 83.1

Income tax calculated according to tax rate

in Sweden (20.6%) -25.1 -17.8

Tax effects of:

Non-taxable dividends 1.5 2.9

Non-deductible expenses -0.3 -0.2

Previously unrecognized deferred tax 0.3 0.6

Total recognized tax -23.6 -14.5

Effective tax rate, % 19.4 17.4

GARO ANNUAL REPORT | 99

NOTES – PARENT COMPANY

NOTE 10. HOLDINGS AND INVESTMENTS IN SUBSIDIARIES

Dec 31, 2021 Dec 31, 2020

Opening cost 79.3 46.1

Investments in subsidiaries 1.5 33.2

Closing accumulated cost 80.8 79.3

Closing carrying amount 80.8 79.3

Name Corp. Reg. No.

Registered ofﬁce

and country of

registration and

operation

Number

of shares

Share of

common shares

directly owned

by Parent

Company (%)

Share of

common shares

owned by

non-controlling

interest (%)

Carrying

amount

Dec 31, 2021

Carrying

amount

Dec 31, 2020

GARO Electric Irl. Ltd 67083 Dublin, Ireland 10,000 100 0 4.7 4.7

GARO Electric Ltd 12057804 Birmingham, UK 1 100 0 0 0

GARO Elﬂex AB 556717-1003 Gnosjö, Sweden 1,000 100 0 2.5 2.5

GARO Montage AB 556658-9544 Gnosjö, Sweden 1,000 100 0 1.8 1.8

GARO AS 935722713 Drammen, Norway 800 100 0 0.7 0.7

WEB-EL Försäljning AB 556658-1079 Luleå, Sweden 1,000 100 0 30.1 30.1

GARO Polska SP ZOO 8513133236 Szczecin, Poland 200 100 0 5.2 5.2

GARO Fastigheter AB 559180-6426 Gnosjö, Sweden 100,000 100 0 1.6 0.1

GARO E-mobility AB 559272-1871 Gnosjö, Sweden 200,000 100 0 20.0 20.0

GARO Finland OY 2191528-5 Espoo, Finland 100 100 0 7.2 7.2

EV Charge Partner Sweden AB 556980-5384 Gnosjö, Sweden 1,000 70 30 7.0 7.0

Total 80.8 79.3

100 | GARO ANNUAL REPORT

NOTES – PARENT COMPANY

NOTE 11. INTANGIBLE ASSETS

Capitalized

development

expenditure

Development

projects

in progress Goodwill Total

At January 1, 2020

Cost 38.0 17.0 1.9 56.9

Accumulated amortization -25.9 - -1.9 -27.8

Carrying amount 12.1 17.0 - 29.1

2020 ﬁscal year

Opening carrying amount 12.1 17.0 - 29.1

Purchases/capitalized expenses 0 24.6 - 24.6

Reclassiﬁcations/internal sales 6.5 -6.5 - 0

Divestments and disposals - - - -

Impairment - - - -

Depreciation/amortization -4.3 - - -4.3

Closing carrying amount 14.3 35.1 49.4

At December 31, 2020

Cost 35.6 35.1 1.9 72.6

Accumulated amortization -21.3 0 -1.9 -23.2

Carrying amount 14.3 35.1 - 49.4

2021 ﬁscal year

Opening carrying amount 14.3 35.1 - 49.4

Purchases/capitalized expenses - 25.1 - 25.1

Reclassiﬁcations/internal sales - - - -

Divestments and disposals -4.4 -25.8 - -30.2

Impairment - - - -

Depreciation/amortization -0.8 - - -0.8

Closing carrying amount 9.1 34.4 - 43.5

At December 31, 2021

Cost 31.2 34.4 1.9 67.5

Accumulated amortization -22.1 - -1.9 -24.0

Carrying amount 9.1 34.4 - 43.5

GARO ANNUAL REPORT | 101

NOTES – PARENT COMPANY

NOTE 12. TANGIBLE ASSETS

Lands and

buildings

Plant and

machinery

Equipment, tools,

ﬁxtures and ﬁttings

Construction in progress

and advance payments

for tangible assets Total

At January 1, 2020

Cost 69.0 31.2 82.2 6.8 189.2

Accumulated depreciation -42.9 -30.1 -64.5 - -137.5

Carrying amount 26.1 1.1 17.7 6.8 51.7

2020 ﬁscal year

Opening carrying amount 26.1 1.1 17.7 6.8 51.7

Purchases - - - 3.2 3.2

Reclassiﬁcations/internal transfers - - 4.0 -4.0 -

Divestments and disposals - -10.9 -31.6 - -42.5

Depreciation -1.6 -0.5 -5.7 - -7.8

Resolution of depreciation/amortization due to

divestments/disposals/internal transfers - 10.9 31.6 - 42.5

Closing carrying amount 24.5 0.6 16.0 6.0 47.1

At December 31, 2020

Cost 69.0 20.3 54.1 6.0 149.4

Accumulated depreciation -44.5 -19.7 -38.1 - -102.3

Carrying amount 24.5 0.6 16.0 6.0 47.1

2021 ﬁscal year

Opening carrying amount 24.5 0.6 16.0 6.0 47.2

Purchases 1.4 - - 1.7 3.1

Reclassiﬁcations/internal transfers - - - - -

Divestments and disposals - - -0.7 -6.3 -7.0

Depreciation -1.6 -0.4 -5.1 - -7.1

Resolution of depreciation/amortization due to

divestments/disposals/internal transfers - - 2.3 - 2.3

Closing carrying amount 24.3 0.2 12.5 1.4 38.4

At December 31, 2021

Cost 70.4 20.3 53.4 1.4 145.5

Accumulated depreciation -46.1 -20.1 -40.9 0 -107.1

Carrying amount 24.3 0.2 12.5 1.4 38.4

NOTE 13. ACCOUNTS RECEIVABLE

The carrying amounts, per currency, for the Parent Company’s

accounts receivable are as follows:

Dec 31, 2021 Dec 31, 2020

Accounts receivable 84.7 119.1

Less: provision for doubtful receivables -0.8 0

Accounts receivable – net 83.9 119.1

The fair value of accounts receivable corresponds to their carry-

ing amount since the discount effect is not material.

At December 31, 2021, accounts receivable of MSEK 10.7

(13.7) had fallen due for payment but no impairment require-

ment was deemed to exist. The past due receivables pertain to a

number of customers who have not shown any payment difﬁcul-

ties to date.

The age analysis of these accounts receivable was as follows:

Dec 31, 2021 Dec 31, 2020

Within 1–30 days 8.0 13.3

Between 31 and 60 days 1.4 0.4

More than 61 days 1.3 0

Total past due accounts receivable 10.7 13.7

102 | GARO ANNUAL REPORT

NOTES – PARENT COMPANY

NOTE 14. FINANCIAL INSTRUMENTS

The table below presents the Parent Company’s ﬁnancial assets and liabilities classiﬁed based on cost. For current receivables

and liabilities, the carrying amount is deemed to comprise a reasonable estimate of the fair value, and these amounts are

presented in the table below.

MEASUREMENT OF FINANCIAL ASSETS AND LIABILITIES AT DEC 31, 2021

2021 ﬁscal year

Financial assets

measured at cost

Financial liabilities

measured at cost

Total carrying

amount

Accounts receivable 83.9 - 83.9

Receivables from Group companies 182.6 - 182.6

Other current receivables 2.0 - 2.0

Cash and cash equivalents 71.4 - 71.4

Total 339.9 - 339.9

Financial liabilities

Accounts payable - 51.4 51.4

Liabilities to Group companies - 132.8 132.8

Derivative instruments - - -

Other short-term liabilities - 9.0 9.0

Total - 193.2 193.2

MEASUREMENT OF FINANCIAL ASSETS AND LIABILITIES AT DEC 31, 2020

2020 ﬁscal year

Financial assets

measured at cost

Financial liabilities

measured at cost

Total carrying

amount

Accounts receivable 119.1 - 119.1

Receivables from Group companies 86.2 - 86.2

Other current receivables 0.6 - 0.6

Cash and cash equivalents 64.0 - 64.0

Total 269.9 - 269.9

Financial liabilities

Accounts payable - 58.7 58.7

Liabilities to Group companies - 107.5 107.5

Derivative instruments - - -

Other short-term liabilities - 9.8 9.8

Total - 176.0 176.0

GARO ANNUAL REPORT | 103

NOTES – PARENT COMPANY

NOTE 15. CASH AND CASH EQUIVALENTS

Dec 31, 2021 Dec 31, 2020

Bank balances 71.4 64.0

Total 71.4 64.0

NOTE 16. SHARE CAPITAL AND OTHER

CONTRIBUTED CAPITAL

The 2021 Annual General Meeting resolved on a 5:1 share

split, meaning that each existing share was replaced with ﬁve

new shares of the same series. The share split was completed

during the second quarter.

Share capital at December 31, 2021 comprised 50,000,000

shares with a quotient value of SEK 0.40 per share. Each share

carries one vote per share. All shares that have been issued by

Parent Company are fully paid.

NOTE 17. PROVISION FOR DEFERRED TAX

Deferred tax assets and liabilities are distributed as follows:

Dec 31, 2021 Dec 31, 2020

Deferred tax assets

– deferred tax assets attributable to tempo-

rary differences in derivative instruments 0 -0.5

Deferred tax liabilities -

– deferred tax liabilities attributable to

temporary differences in buildings and

land improvements 0.6 0.7

– deferred tax liabilities attributable to tem-

porary differences in derivative instruments 0.1 0

Deferred tax liabilities (net) 0.7 0.2

NOTE 18. BORROWINGS

Dec 31, 2021 Dec 31, 2020

Long-term

Liabilities to credit institutions 10.4 13.7

Total long-term borrowings 10.4 13.7

Short-term

Liabilities to credit institutions 2.6 3.3

Total short-term borrowings 2.6 3.3

Total borrowings Parent Company 13.0 17.0

LIABILITIES TO CREDIT INSTITUTIONS

The Parent Company’s borrowings are in SEK. The Parent

Company’s borrowings comprise loans from SEB.

The bank loan has a tenor until 2027 and bears average

interest for 2021 of 1.22% per year (1.4). The Parent Company

has no loans that fall due after ﬁve years. The Parent Company

does not have any speciﬁc loan conditions (covenants) with

external borrowers.

OVERDRAFT FACILITIES

The Parent Company has granted overdraft facilities of

MSEK97.1 (88.8) that are renegotiated every year.

NOTE 19. ACCRUED EXPENSES

AND DEFERRED INCOME

Dec 31, 2021 Dec 31, 2020

Accrued payroll costs 11.8 13.8

Accrued social security contributions 4.7 5.5

Bonuses to customers 11.2 10.1

Other items 3.8 6.8

Total 31.5 36.2

NOTE 20. PLEDGED ASSETS

Dec 31, 2021 Dec 31, 2020

Property mortgages 35.2 35.2

Chattel mortgages 66.0 66.0

Total 101.2 101.2

Assets pledged for liabilities to credit institutions

NOTE 21. CONTINGENT LIABILITIES

Dec 31, 2021 Dec 31, 2020

Other contingent liabilities for the beneﬁt

of subsidiaries 21.6 21.6

Total 21.6 21.6

NOTE 22. PROFIT FROM PARTICIPATIONS

IN GROUP COMPANIES

2021 2020

Dividends 7.2 13.3

Impairment - -

Total 7.2 13.3

104 | GARO ANNUAL REPORT

NOTES – PARENT COMPANY

NOTE 23. APPROPRIATIONS

2021 2020

Difference between recognized depreciation/

amortization and depreciation/amortization

according to plan 0.8 0.8

Group contributions received, net 47.0 6.0

Total 47.8 6.8

NOTE 24. RELATED PARTIES

The following transactions took place with related parties:

PURCHASES AND SALES TO SUBSIDIARIES

34% (46) of the Parent Company’s sales comprise sales to

Group companies, and 35% (45) of the Parent Company’s pur-

chases comprise purchases from Group companies.

Sales to subsidiaries comprise goods and services. Purchases

from subsidiaries comprise goods. Services are sold to subsidiar-

ies on the basis of normal commercial terms and conditions.

2021 2020

Purchase of services

Consulting services from Board members,

Jan–May (Ekonomerna i Sverige AB) 0.1 0.6

Operations and services purchased

from parties related to the Chairman

of the Board (Jan–May) 0.1 0.7

Electrical installation services purchased

from parties related to the Chairman

of the Board (Jan–May) 0 0.1

Total 0.2 1.4

The services described above were purchased on normal

commercial terms and conditions. On the balance-sheet date,

no liabilities had been recognized against the related-party

purchases described above.

NOTE 25. EVENTS AFTER THE END

OF THE FISCAL YEAR

On January 1, 2022, the business areas GARO Electriﬁcation

and GARO E-mobility replaced the previous business areas of

GARO Sweden and GARO International.

In addition, a decision was made to invest in a new produc-

tion and logistics facility in Poland with construction starting

in the second quarter of 2022. The expected investment will

amount to about MSEK 85.

At the time of writing, the situation in Ukraine and the

COVID-19 pandemic are not assessed to have any notable

impact for GARO and its operations. However, due to the

situation unfolding in Ukraine, uncertainty prevails concerning

future access to components.

NOTE 26. PROPOSED APPROPRIATION

OF PROFIT

The Group’s retained earnings in accordance with the consoli-

dated balance sheet amounted to MSEK 528.6 (407.4).

The following proﬁt is at the disposal of

the Annual General Meeting: (SEK)

Opening retained earnings 241,330,970

Provisions to fund for own work, development expenditure -40,514,361

Net income for the year 98,299,387

Total 299,115,996

The Board of Directors proposes that proﬁt be

appropriated as follows:

– to be distributed to shareholders at SEK 1.40 per share -70,000,000

– to be carried forward 229,115,996

Total 299,115,996

THE BOARD’S STATEMENT ON THE PROPOSED DIVIDENDS

The Board believes that the proposed dividend will not prevent

the company from fulﬁlling its obligations in the short or long

term, nor from making necessary investments. The proposed

dividend can thus be justiﬁed with respect to the provisions of

Chapter 17, Section 3, paragraphs two and three of the Swed-

ish Companies Act.

The company’s equity ratio is satisfactory since the operations

continue to be conducted proﬁtably. It is deemed that the compa-

ny’s liquidity can also be maintained at a satisfactory level.

GARO ANNUAL REPORT | 105

SIGNING OF THE ANNUAL REPORT

Signing of

the Annual Report

The consolidated income statement and balance sheet will be

presented to the Annual General Meeting for approval on May

11, 2022.

The Board and CEO assure that the consolidated ﬁnancial

statements have been prepared in accordance with International

Financial Reporting Standards (IFRS) as adopted by the EU and

provide a true and fair view of the Group’s ﬁnancial position

and earnings. The Annual Report was prepared in accordance

with generally accepted accounting policies and provides a true

and fair view of the Parent Company’s ﬁnancial position and

earnings.

The Board of Directors’ Report for the Group and the Parent

Company provides a fair review of the Group’s and the Parent

Company’s operations, ﬁnancial position and earnings and

describes the material risks and uncertainty factors faced by the

Parent Company and the companies included in the Group.

Gnosjö, March 30, 2022

RICKARD BLOMQVIST

Chairman

SUSANNA HILLESKOG

Board member

MARTIN ALTHÉN

Board member

MARI-KATHARINA JONSSON KADOWAKI

Board member

PATRIK ANDERSSON

CEO

JOHAN PAULSSON

Board member

ULF HEDLUNDH

Board member

JOAKIM FALCK

Authorized Public Accountant

LARS ÅKE RYDH

Board member

Our audit report was submitted on April 8, 2022

Ernst & Young AB

JONAS LOHTANDER

Employee representative

106 | GARO ANNUAL REPORT

AUDIT REPORT

Audit report

REPORT ON THE ANNUAL ACCOUNTS AND

CONSOLIDATED ACCOUNTS

OPINIONS

We have audited the annual accounts and consolidated

accounts of GARO AB (publ) for the year 2021. The annual

accounts and consolidated accounts of the company are inclu-

ded on pages x-y in this document.

In our opinion, the annual accounts have been prepared in

accordance with the Annual Accounts Act and present fairly, in

all material respects, the ﬁnancial position of the parent com-

pany as of 31 December 2021 and its ﬁnancial performance

and cash ﬂow for the year then ended in accordance with the

Annual Accounts Act. The consolidated accounts have been pre-

pared in accordance with the Annual Accounts Act and present

fairly, in all material respects, the ﬁnancial position of the group

as of 31 December 2021 and their ﬁnancial performance and

cash ﬂow for the year then ended in accordance with Internatio-

nal Financial Reporting Standards (IFRS), as adopted by the EU,

and the Annual Accounts Act. The statutory administration report

is consistent with the other parts of the annual accounts and

consolidated accounts.

We therefore recommend that the general meeting of share-

holders adopts the income statement and balance sheet for the

parent company and the statement of comprehensive income

and statement of ﬁnancial position for the group.

Our opinions in this report on the annual accounts and conso-

lidated accounts are consistent with the content of the additional

report that has been submitted to the parent company’s audit

committee in accordance with the Audit Regulation (537/2014)

Article 11.

BASIS FOR OPINIONS

We conducted our audit in accordance with International

Standards on Auditing (ISA) and generally accepted auditing

standards in Sweden. Our responsibilities under those stan-

dards are further described in the Auditor’s Responsibilities

section. We are independent of the parent company and the

group in accordance with professional ethics for accountants

in Sweden and have otherwise fulﬁlled our ethical responsibili-

ties in accordance with these requirements. This includes that,

based on the best of our knowledge and belief, no prohibited

services referred to in the Audit Regulation (537/2014) Article

5.1 have been provided to the audited company or, where

applicable, its parent company or its controlled companies

within the EU.

We believe that the audit evidence we have obtained is

sufﬁcient and appropriate to provide a basis for our opinions.

KEY AUDIT MATTERS

Key audit matters of the audit are those matters that, in our pro-

fessional judgment, were of most signiﬁcance in our audit of the

annual accounts and consolidated accounts of the current period.

These matters were addressed in the context of our audit of, and

in forming our opinion thereon, the annual accounts and conso-

lidated accounts as a whole, but we do not provide a separate

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 accompa-

nying ﬁnancial statements.

OBSOLESCENCE IN INVENTORIES

Description How our audit addressed

this key audit matter

It appears from the group’s reporting of

the ﬁnancial standing as at 31-12-2021

that the reported value of the inventory

amounts to MSEK 242,1. In the indu-

stries in which the group operates, the

product development rate and innova-

tion driving force are high. This means

that business management and the

board of directors must evaluate and

assess on an ongoing basis how the

company’s products should be priced

taking into account market demand.

The innovation driving force in com-

bination with the size of the inventory

and the fact that the management and

the board of directors make appraisals

and assessments of the obsolescence

of the inventory, means that obsole-

scence is assessed as being a speciﬁ-

cally signiﬁcant area of our audit.

Notes 2.12, 3.1 a (ii) and (iii) and note

4 describe, among other things, the

evaluation and risks associated with

inventories.

In our audit, we have reviewed

the assessment of obsolescence

of all units including through

follow-up of inertia with the

information about inventory

movements from the statement

of the inventory. We have also

checked whether the use of the

obsolescence model is consistent

over the years and assessed

assumptions made in the obsole-

scence model. The assumptions

are made at different levels of

the group and include both deci-

sion-makers in individual compa-

nies and the group management

team. In addition, our audit has

included a review of the mana-

gement protocol and discussions

with the company management

on the development of new

products. We have reviewed the

information obtained in the ﬁnan-

cial statement.

To the general meeting of the shareholders of GARO AB

(publ), corporate identity number 556051-7772

THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL

GARO ANNUAL REPORT | 107

AUDIT REPORT

OTHER INFORMATION THAN THE ANNUAL ACCOUNTS

AND CONSOLIDATED ACCOUNTS

This document also contains other information than the annual

accounts and consolidated accounts and is found on pages

[A-B]. The remuneration report for the ﬁnancial year 2021 also

constitutes other information. The Board of Directors and the

Managing Director are responsible for this other information.

Our opinion on the annual accounts and consolidated

accounts does not cover this other information and we do not

express any form of assurance conclusion regarding this other

information.

In connection with our audit of the annual accounts and conso-

lidated accounts, our responsibility is to read the information

identiﬁed above and consider whether the information is mate-

rially inconsistent with the annual accounts and consolidated

accounts. In this procedure we also take into account our know-

ledge otherwise obtained in the audit and assess whether the

information otherwise appears to be materially misstated.

If we, based on the work performed concerning this infor-

mation, conclude that there is a material misstatement of this

other information, we are required to report that fact. We have

nothing to report in this regard.

RESPONSIBILITIES OF THE BOARD OF DIRECTORS

AND THE MANAGING DIRECTOR

The Board of Directors and the Managing Director are respon-

sible for the preparation of the annual accounts and consolidated

accounts and that they give a fair presentation in accordance

with the Annual Accounts Act and, concerning the consolidated

accounts, in accordance with IFRS as adopted by the EU. The

Board of Directors and the Managing Director are also responsible

for such internal control as they determine is necessary to enable

the preparation of annual accounts and consolidated accounts that

are free from material misstatement, whether due to fraud or error.

In preparing the annual accounts and consolidated accounts,

The Board of Directors and the Managing Director are respon-

sible for the assessment of the company’s and the group’s ability

to continue as a going concern. They disclose, as applicable,

matters related to going concern and using the going concern

basis of accounting. The going concern basis of accounting is

however not applied if the Board of Directors and the Managing

Director intends to liquidate the company, to cease operations,

or has no realistic alternative but to do so.

The Audit Committee shall, without prejudice to the Board

of Director’s responsibilities and tasks in general, among other

things oversee the company’s ﬁnancial reporting process.

AUDITOR’S RESPONSIBILITY

Our objectives are to obtain reasonable assurance about

whether the annual accounts and consolidated accounts as a

whole are free from material misstatement, whether due to fraud

or error, and to issue an auditor’s report that includes our opi-

nions. Reasonable assurance is a high level of assurance, but

is not a guarantee that an audit conducted in accordance with

ISAs and generally accepted auditing standards in Sweden will

always detect a material misstatement when it exists. Misstate-

ments 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 annual accounts and consolidated accounts.

As part of an audit in accordance with ISAs, we exercise pro-

fessional judgment and maintain professional skepticism throug-

hout the audit. We also:

• Identify and assess the risks of material misstatement of the

annual accounts and consolidated accounts, whether due to

fraud or error, design and perform audit procedures respon-

sive to those risks, and obtain audit evidence that is sufﬁcient

and appropriate to provide a basis for our opinions. The risk

of not detecting a material misstatement resulting from fraud is

higher than for one resulting from error, as fraud may involve

collusion, forgery, intentional omissions, misrepresentations, or

the override of internal control.

• Obtain an understanding of the company’s internal control

relevant to our 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

internal control.

• Evaluate the appropriateness of accounting policies used

and the reasonableness of accounting estimates and related

disclosures made by the Board of Directors and the Managing

Director.

• Conclude on the appropriateness of the Board of Directors’

and the Managing Director’s use of the going concern

basis of accounting in preparing the annual accounts and

consolidated accounts. We also draw a conclusion, based

on the audit evidence obtained, as to whether any 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 mate-

rial uncertainty exists, we are required to draw attention in

our auditor’s report to the related disclosures in the annual

accounts and consolidated accounts or, if such disclosures are

inadequate, to modify our opinion about the annual accounts

and consolidated accounts. 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 a company

and a group to cease to continue as a going concern.

• Evaluate the overall presentation, structure and content of the

annual accounts and consolidated accounts, including the

disclosures, and whether the annual accounts and consolida-

ted accounts represent the underlying transactions and events

in a manner that achieves fair presentation.

• Obtain sufﬁcient and appropriate audit evidence regarding

the ﬁnancial information of the entities or business activities

within the group to express an opinion on the consolidated

accounts. We are responsible for the direction, supervision

and performance of the group audit. We remain solely

responsible for our opinions.

We must inform the Board of Directors of, among other matters,

the planned scope and timing of the audit. We must also inform

108 | GARO ANNUAL REPORT

AUDIT REPORT

of signiﬁcant audit ﬁndings during our audit, including any signi-

ﬁcant deﬁciencies in internal control that we identiﬁed.

We must also provide the Board of Directors with a statement

that we have complied with relevant ethical requirements regar-

ding independence, and to communicate with them all relations-

hips and other matters that may reasonably be thought to bear

on our independence, and where applicable, actions taken to

eliminate threats or related safeguards applied.

From the matters communicated with the Board of Directors,

we determine those matters that were of most signiﬁcance in

the audit of the annual accounts and consolidated accounts,

including the most important assessed risks for material misstate-

ment, and are therefore the key audit matters. We describe these

matters in the auditor’s report unless law or regulation precludes

disclosure about the matter.

REPORT ON OTHER LEGAL AND

REGULATORY REQUIREMENTS

REPORT ON THE AUDIT OF THE ADMINISTRATION

AND THE PROPOSED APPROPRIATIONS OF

THE COMPANY’S PROFIT OR LOSS

Opinions

In addition to our audit of the annual accounts and consolidated

accounts, we have also audited the administration of the Board

of Directors and the Managing Director of GARO AB (publ) for

the year 2021 and the proposed appropriations of the compa-

ny’s proﬁt or loss.

We recommend to the general meeting of shareholders that

the proﬁt be appropriated (loss be dealt with) in accordance

with the proposal in the statutory administration report and

that the members of the Board of Directors and the Managing

Director be discharged from liability for the ﬁnancial year.

Basis for opinions

We conducted the audit in accordance with generally accepted

auditing standards in Sweden. Our responsibilities under those

standards are further described in the Auditor’s Responsibilities

section. We are independent of the parent company and the

group in accordance with professional ethics for accountants in

Sweden and have otherwise fulﬁlled our ethical responsibilities

in accordance with these requirements.

We believe that the audit evidence we have obtained is sufﬁ-

cient and appropriate to provide a basis for our opinions.

Responsibilities of the Board of Directors

and the Managing Director

The Board of Directors is responsible for the proposal for app-

ropriations of the company’s proﬁt or loss. At the proposal of a

dividend, this includes an assessment of whether the dividend

is justiﬁable considering the requirements which the company’s

and the group’s type of operations, size and risks place on the

size of the parent company’s and the group’s equity, consolida-

tion requirements, liquidity and position in general.

The Board of Directors is responsible for the company’s

organization and the administration of the company’s affairs.

This includes among other things continuous assessment of the

company’s and the group’s ﬁnancial situation and ensuring that

the company’s organization is designed so that the accounting,

management of assets and the company’s ﬁnancial affairs

otherwise are controlled in a reassuring manner. The Managing

Director shall manage the ongoing administration according to

the Board of Directors’ guidelines and instructions and among

other matters take measures that are necessary to fulﬁll the

company’s accounting in accordance with law and handle the

management of assets in a reassuring manner.

Auditor’s responsibility

Our objective concerning the audit of the administration, and

thereby our opinion about discharge from liability, is to obtain

audit evidence to assess with a reasonable degree of assurance

whether any member of the Board of Directors or the Managing

Director in any material respect:

• has undertaken any action or been guilty of any omission

which can give rise to liability to the company, or

• in any other way has acted in contravention of the Companies

Act, the Annual Accounts Act or the Articles of Association.

Our objective concerning the audit of the proposed appropri-

ations of the company’s proﬁt or loss, and thereby our opinion

about this, is to assess with reasonable degree of assurance

whether the proposal is in accordance with the Companies Act.

Reasonable assurance is a high level of assurance, but is

not a guarantee that an audit conducted in accordance with

generally accepted auditing standards in Sweden will always

detect actions or omissions that can give rise to liability to the

company, or that the proposed appropriations of the company’s

proﬁt or loss are not in accordance with the Companies Act.

As part of an audit in accordance with generally accepted

auditing standards in Sweden, we exercise professional judgment

and maintain professional skepticism throughout the audit. The

examination of the administration and the proposed appropri-

ations of the company’s proﬁt or loss is based primarily on the

audit of the accounts. Additional audit procedures performed are

based on our professional judgment with starting point in risk and

materiality. This means that we focus the examination on such

actions, areas and relationships that are material for the opera-

tions and where deviations and violations would have particular

importance for the company’s situation. We examine and test

decisions undertaken, support for decisions, actions taken and

other circumstances that are relevant to our opinion concerning

discharge from liability. As a basis for our opinion on the Board

of Directors’ proposed appropriations of the company’s proﬁt or

loss we examined the Board of Directors’ reasoned statement and

a selection of supporting evidence in order to be able to assess

whether the proposal is in accordance with the Companies Act.

THE AUDITOR’S EXAMINATION OF THE ESEF REPORT

Opinion

In addition to our audit of the annual accounts and consolidated

accounts, we have also examined that the Board of Directors

and the Managing Director have prepared the annual accounts

GARO ANNUAL REPORT | 109

AUDIT REPORT

and consolidated accounts in a format that enables uniform

electronic reporting (the Esef report) pursuant to Chapter 16,

Section 4(a) of the Swedish Securities Market Act (2007:528)

for GARO AB (publ) for the ﬁnancial year 2021.

Our examination and our opinion relate only to the statutory

requirements.

In our opinion, the ESEF report #[checksum] has been prepa-

red in a format that, in all material respects, enables uniform

electronic reporting.

Basis for opinion

We have performed the examination in accordance with FAR’s

recommendation RevR 18 Examination of the ESEF report. Our

responsibility under this recommendation is described in more

detail in the Auditors’ responsibility section. We are independent

of GARO AB (publ) in accordance with professional ethics for

accountants in Sweden and have otherwise fulﬁlled our ethical

responsibilities in accordance with these requirements.

We believe that the evidence we have obtained is sufﬁcient

and appropriate to provide a basis for our opinion.

Responsibilities of the Board of Directors and

the Managing Director

The Board of Directors and the Managing Director are respon-

sible for the preparation of the Esef report in accordance with

Chapter 16, Section 4(a) of the Swedish Securities Market Act

(2007:528), and for such internal control that the Board of

Directors and the Managing Director determine is necessary to

prepare the Esef report without material misstatements, whether

due to fraud or error.

Auditor’s responsibility

Our responsibility is to obtain reasonable assurance whether

the Esef report is in all material respects prepared in a format

that meets the requirements of Chapter 16, Section 4(a) of the

Swedish Securities Market Act (2007:528), based on the proce-

dures performed.

RevR 18 requires us to plan and execute procedures to

achieve reasonable assurance that the Esef report is prepared in

a format that meets these requirements.

Reasonable assurance is a high level of assurance, but it is not

a guarantee that an engagement carried out according to RevR

18 and generally accepted auditing standards in Sweden will

always detect a material misstatement when it exists. Misstate-

ments can arise from fraud or error and are considered material

if, individually or in aggregate, they could reasonably be expec-

ted to inﬂuence the economic decisions of users taken on the

basis of the Esef report.

The audit ﬁrm applies ISQC 1 Quality Control for Firms that

Perform Audits and Reviews of Financial Statements, and other

Assurance and Related Services Engagements and accordingly

maintains a comprehensive system of quality control, including

documented policies and procedures regarding compliance with

professional ethical requirements, professional standards and

legal and regulatory requirements.

The examination involves obtaining evidence, through various

procedures, that the Esef report has been prepared in a format

that enables uniform electronic reporting of the annual and

consolidated accounts. The procedures selected depend on the

auditor’s judgment, including the assessment of the risks of mate-

rial misstatement in the report, whether due to fraud or error. In

carrying out this risk assessment, and in order to design audit

procedures that are appropriate in the circumstances, the auditor

considers those elements of internal control that are relevant to

the preparation of the Esef report by the Board of Directors and

the Managing Director, but not for the purpose of expressing an

opinion on the effectiveness of those internal controls. The exa-

mination also includes an evaluation of the appropriateness and

reasonableness of assumptions made by the Board of Directors

and the Managing Director.

The procedures mainly include a technical validation of the

Esef report, i.e. if the ﬁle containing the Esef report meets the

technical speciﬁcation set out in the Commission’s Delegated

Regulation (EU) 2019/815 and a reconciliation of the Esef

report with the audited annual accounts and consolidated

accounts.

Furthermore, the procedures also include an assessment of

whether the Esef report has been marked with iXBRL which ena-

bles a fair and complete machine-readable version of the conso-

lidated statement of ﬁnancial performance, ﬁnancial position,

changes in equity and cash ﬂow.

Ernst & Young AB, Box 2224, 550 02 Jönköping, was

appointed auditor of GARO AB by the general meeting of the

shareholders on the 5 May 2021 and has been the company’s

auditor since the 4 May 2017.

Jönköping 8 April, 2022

Ernst & Young AB

Joakim Falck

Authorized Public Accountant

110 | GARO ANNUAL REPORT

CORPORATE GOVERNANCE REPORT

Corporate

governance report

GARO AB (publ) is a Swedish public limited

liability company and is therefore regulated in

part by Swedish legislation, primarily through

the Swed -ish Companies Act, in part by Nasdaq

Stock-holm’s Rulebook for Issuers that requires the

application of the Swedish Corporate Governance

Code (the “Code”). GARO has its registered ofﬁce

in Gnosjö Municipality, Jönköping County, has

applied the Code since 2016 and provides the

Corporate Governance Report for the 2021 ﬁscal

year here. The Corporate Governance Report has

been audited by the company’s auditors.

Guidelines on the Code are available on the website for the

Swedish Corporate Governance Board (www.corporategover-

nanceboard.se). The Code is based on the principle of “comply

or explain”, which means that companies that apply the Code

can deviate from individual rules, but then provide an explana-

tion for the deviation. GARO made no such deviations in 2021.

Nor has GARO breached Nasdaq Stockholm’s Rulebook for

Issuers or good practice on the stock market.

SHAREHOLDERS AND GENERAL MEETING

The shareholders’ right to decide on GARO’s affairs is exercised

at the Annual General Meeting (or if applicable, the Extraordinary

General Meeting), which is GARO’s highest decision-making

body. The Annual General Meeting (AGM) is held in Gnosjö,

Malmö or Stockholm every calendar year before the end of June.

An Extraordinary General Meeting is held when necessary.

The General Meeting passes resolutions on a number of mat-

ters, including the adoption of the income statement and balance

sheet, appropriation of GARO’s proﬁt or loss, discharge from

liability to the company for the members of the Board and the

CEO, the composition of the Nomination Committee, election

of the Board members (including the Chairman of the Board)

and the auditor, remuneration of Board members and auditors,

guidelines for the remuneration of senior executives and any

changes to the Articles of Association.

The company’s Articles of Association contain no limitations

regarding how many votes each shareholder can exercise at a

General Meeting. The company’s Articles of Association contain

no provisions regarding appointment or dismissal of Board mem-

bers or amendments to the Articles.

There were 14,473 shareholders (8,774) at year-end. The

largest single shareholder is Lars Svensson whose total owner-

ship amounted to 35.7% (35.7). For more information on the

ownership structure, share capital, share price development,

etc., please refer to the section on the GARO share on pages

52–53 and to Note 20 in this Annual Report.

ANNUAL GENERAL MEETING 2021

At GARO’s Annual General Meeting on May 5, 2021, Rickard

Blomqvist, Susanna Hilleskog, Lars-Åke Rydh, Ulf Hedlundh

and Mari-Katharina Jonsson Kadowaki were re-elected and

was Martin Althén and Johan Paulsson were elected as new

Board members. Rickard Blomqvist was elected as the new

Chairman. Stefan Jonsson had declined re-election. IF Metall’s

Jonas Lohtander was also elected as employee representative.

Board fees were decided to be paid in a total amount of SEK

2,100,000, of which SEK 600,000 was to the Chairman and

SEK 250,000 to each of the other elected Board members who

are not employed in the Group. This entailed an increase of

Board fees by 580,000 compared with 2020, in which one

additional Board member was elected in 2021. Adjusted for

this, Board fees increased 22%. Furthermore, the AGM resolved

that fees to members of the Audit Committee are to consist of

SEK 100,000 to the Chairman and SEK 50,000 to each of

the other members of the Audit Committee. For members of the

Remuneration Committee, fees of SEK 50,000 to the Chairman

and SEK 25,000 to each of the other members of the Remu-

neration Committee were decided upon. In accordance with

the Board’s proposal, the AGM resolved that a dividend of

SEK 4.70 would be paid for the 2020 ﬁscal year (SEK 0.94

adjusted for the split). The AGM also adopted guidelines for

remuneration of senior executives.

NOMINATION COMMITTEE

GARO’s Annual General Meeting passes resolutions regarding

procedures for the appointment and work of the Nomination Com-

The illustration below provides a general description

of corporate governance in GARO.

Audit Committee

Remuneration

Committee

CEO

Group Management

External auditors

Nomination

Committee

Annual General

Meeting

Shareholders

Board of Directors

GARO ANNUAL REPORT | 111

CORPORATE GOVERNANCE REPORT

mittee. The Nomination Committee’s task comprises the preparation

and compilation of proposals on the election of Board members,

the Chairman of the Board, the Chairman of the General Meeting,

and auditors, as well as proposals regarding fees to the Board

members, members of any Board committees and the auditor.

The Annual General Meeting on May 4, 2017 resolved that

the Nomination Committee shall be comprised of representatives

of the three largest shareholders in terms of votes as indicated

by the share register kept by Euroclear Sweden on August 31 of

every year, together with the Chairman of the Board, who shall

also convene the ﬁrst meeting of the Nomination Committee. The

member representing the largest shareholder by votes shall be

appointed the Chairman of the committee. If, before two months

prior to the Annual General Meeting, one or more of the share-

holders that appointed members to the Nomination Committee

are no longer among the three largest shareholders by votes,

members appointed by these shareholders shall relinquish their

seats on the committee and shareholders that have joined the

three largest shareholders by votes shall have the right to appoint

one representative each. If a member leaves the Nomination

Committee before its work is complete and the Nomination

Committee ﬁnds it desirable for a replacement to be appointed,

such a replacement shall be obtained from the same shareholder

or, if this shareholder is no longer among the largest sharehold-

ers by votes, from a shareholder who is next in line in terms of

holdings. The composition of the Nomination Committee prior to

each AGM shall be published no later than six months before the

AGM. No compensation shall be payable to the members of the

Nomination Committee. Any necessary overhead costs for the

Nomination Committee’s work shall be covered by the company.

The Nomination Committee’s mandate period continues until the

following Nomination Committee’s composition has been pub-

lished. The Nomination Committee’s independence according to

the “Code” is considered to be fulﬁlled.

EXTERNAL AUDITORS

The company’s auditor, elected at the Annual General Meeting,

examines GARO’s annual report and consolidated ﬁnancial

statements, the Board’s and CEO’s administration, the Board's

proposed appropriation of proﬁt or loss for the year, and the

annual reports of subsidiaries, and submits an audit report.

Ernst & Young AB were reelected auditors at the 2021 Annual

General Meeting, with Joakim Falck as Auditor in Charge. The

auditor from Ernst & Young participated in parts of the Audit

Committee's meetings in 2021 and at the meeting in February

2022, and reported on the observations from the 2021 audit.

The audit of the Group’s companies is coordinated by Ernst &

Young. The Ernst & Young network audit the Group’s companies,

except those in Poland, the UK and Ireland.

BOARD OF DIRECTORS

COMPOSITION AND INDEPENDENCE

According to the Articles of Association, GARO’s Board of

Directors shall consist of at least three and at most seven elected

members. At the Annual General Meeting on May 5, 2021,

seven Board members were elected, two women and ﬁve men.

IF Metall also elected an employee representative to be included

in the Board. No representative of company management is on

the Board. The President and CEO participates in Board meet-

ings to present reports. Other ofﬁcers in GARO participate in the

Board’s meetings as presenters in particular matters. The compa-

ny’s CFO serves as the Board’s secretary.

In the Nomination Committee’s reasoned statement ahead

of the 2021 AGM, the Nomination Committee stated that the

Board applied rule 4.1 of the Code as its diversity policy in

preparing its proposals on Board members. The aim of the pol-

icy is for the Board to have a composition appropriate to the

company’s operations, phase of development and other relevant

circumstances. The Board members are collectively to exhibit

BOARD OF DIRECTORS

AGM-elected Board Elected Born

Remu-

neration

Remunera-

tion Audit

Committee

Remuneration

Committee

Number

of shares/

votes

Independent in

relation to the

shareholders

Independent

in relation to

the company

No.

meetings

attended

Rickard Blomqvist, Chairman 2015 1971 600,000 50,000 50,000 622,500 No Yes 11/11

Susanna Hilleskog, member 2018 1963 250,000 25,000 0 Yes Yes 11/11

Johan Paulsson, member 2021 1963 250,000 0 Yes Yes 6/6

Ulf Hedlundh, member 2020 1960 250,000 50,000 1,500 Yes Yes 11/11

Martin Althén, member 2021 1968 250,000 0 Yes Yes 6/6

Mari-Katharina Jonsson Kadowaki, member 2019 1964 250,000 25,000 650 Yes Yes 11/11

Jonas Lohtander, employee representative 2019 1974 0 89 Yes No 11/11

Lars-Åke Rydh, member 2018 1953 250,000 100,000 0 25,000 Yes Yes 11/11

TOTAL 2,100,000 200,000 100,000 649,739

NOMINATION COMMITTEE FOR THE 2022 ANNUAL GENERAL MEETING

Nomination Committee member Represents Holdings/votes

Lars Kongstad, Chairman Lars Svensson 35.7%

Ulrik Grönvall Swedbank Robur Funds 9.3%

Fredrik Carlsson Svolder AB 8.7%

Rickard Blomqvist Chairman 1.2%

112 | GARO ANNUAL REPORT

CORPORATE GOVERNANCE REPORT

diversity and breadth of qualiﬁcations, experience and back-

ground, and the company is to strive for gender balance on the

Board. The 2021 AGM resolved to appoint Board members in

accordance with the Nomination Committee’s proposals, which

resulted in the current Board. The Nomination Committee estab-

lished when it prepared its proposals that the gender balance in

the proposed Board was not satisfactory. However, the Nomina-

tion Committee believed that continuity on the Board was, at the

time, of greater importance.

In accordance with the Code, a majority of the elected Board

members shall be independent in relation to the company and its

management. To determine if a Board member is independent, a

collective assessment shall be made of all circumstances that can

give cause to question the member’s independence in relation to

GARO or company management, such as if the Board member

was recently employed in GARO or a related company. At least

two of the Board members who are independent in relation to

the company and company management shall also be indepen-

dent in relation to the company’s major shareholders. To assess

this independence, the scope of the member’s direct or indirect

relationships to major shareholders shall be taken into account.

In the Code, major shareholders refers to shareholders who

directly or indirectly control 10% or more of the shares or votes

in the company.

The Nomination Committee’s assessment of the Board mem-

bers’ independence in relation to the company, its management

and major shareholders is presented in the section “Board,

Group Management and auditor.” All Board members are

deemed to be independent in relation to the company and its

management. Six of them are also independent in relation to the

company’s major shareholders. GARO thereby meets the Code’s

requirements on independence.

For further information concerning the Board members, refer

to the section concerning the Board of Directors on page 118 of

this Annual Report.

RESPONSIBILITY AND WORK

The work of the Board of Directors is regulated by the Swedish

Companies Act and the Articles of Association. The work of

the Board of Directors is also regulated by the written rules of

procedure that the Board adopts annually. The rules of proce-

dure regulate, among other things, the division of responsibility

between the Board, the Chairman of the Board and the CEO, as

well as the decision procedure in the Board, the Board’s meet-

ing plan and the Board’s work on accounting and audit-related

issues and ﬁnancial reporting. The Board of Directors has also

established terms of reference for the CEO and adopted other

special policy documents.

The Board of Directors is responsible for the Group’s organi-

zation and management of its affairs, setting the Group’s overall

objectives, development and follow-up of the overall strategies,

decisions on major acquisitions, divestments and investments,

decisions on capital placement and loans in accordance with the

ﬁnance policy, continuous follow-up of operations, establishment

of interim and year-end reports and the continuous evaluation

of the CEO and other members of Group Management. The

Board is also responsible for ensuring the quality of the ﬁnancial

reporting, including systems for monitoring and internal control of

GARO’s ﬁnancial statements and position. The Board shall also

ensure that GARO’s external information provisioning is marked

by openness and is correct, relevant and clear. At the Board meet-

ings, the following items are recurring on the agenda: business

status, future prospects and economic and ﬁnancial reporting.

The Chairman of the Board monitors GARO’s operations

through continuous contacts with the CEO. The Chairman orga-

nizes and leads the Board’s work and is thereby responsible

for other Board members receiving satisfactory information and

decision data. The Chairman is also responsible for the Board

continuously updating and deepening its knowledge of GARO

and otherwise receiving the training required for the Board work

to be able to be conducted effectively. It is also the Chairman

who is responsible for ensuring that the Board annually eval-

uates its work. An evaluation of the Board was performed in

2021 and the Chairman reported the results to the Board and

the Nomination Committee.

In 2021, the Board held six ordinary Board meetings and four

Board meetings in addition to the statutory meeting. The Board

meetings have been devoted to ﬁnancial follow-up of the busi-

ness, strategic issues, budget discussions, investment decisions,

adoption of policies and instructions and external economic

information. Attendance at the Board meetings is presented in

the table above.

The Board meetings are prepared by the CEO and CFO. The

CEO provides the members with written reports and documenta-

tion at least ﬁve work days before the respective meeting. Con-

tinuously during the year, the Board members received monthly

reports, which shed light on the Group’s ﬁnancial and opera-

tional development. These reports were prepared jointly by the

CEO and CFO.

BOARD COMMITTEES

According to the Code and the Swedish Companies Act, the

Board shall establish a remuneration committee and an audit

committee from within its ranks. The CEO participates in the

work incumbent on the Remuneration Committee and Audit

Committee only as the presenter.

The Board of Directors works according to set instructions for

issues that are incumbent on the Audit Committee and Remuner-

ation Committee.

AUDIT COMMITTEE

Three of the seven member of the Board comprise the Audit

Committee, which performs the duties incumbent on the Audit

Committee. The CFO participates in the work incumbent on the

Audit Committee only as the presenter.

The main duties of the Audit Committee are to monitor

GARO’s and the Group’s ﬁnancial reporting, the effectiveness

of its internal controls, internal audit and risk management, and

keep informed on the audit of the annual report and consoli-

dated ﬁnancial statements, examine and monitor the auditor’s

impartiality and independence and thereby pay particular atten-

tion to whether or not the auditor provides the company services

other than audit services. The Audit Committee shall also assist

the Nomination Committee with regard to the election of audi-

tors. The Audit Committee is in continuous contact with the com-

pany’s auditor with the aim of creating a continuous exchange

of opinions and information between the company and the audi-

tor in audit matters. During the year, the committee held seven

GARO ANNUAL REPORT | 113

CORPORATE GOVERNANCE REPORT

meetings, of which the company’s auditors participated in four.

All Board members have otherwise attended the meetings.

REMUNERATION COMMITTEE

Three of the seven member of the Board comprise the remu-

neration committee, which performs the duties incumbent on

the remuneration committee. The remuneration committee has

an advisory and a preparatory function for decision matters

before discussion and decision by the company’s Board. The

remuneration committee works according to a formal work plan

that has been adopted by the Board. The main duties of the

remuneration committee are to prepare the Board’s decisions in

matters that concern remuneration principles, remuneration and

other terms of employment for company management, to monitor

and evaluate programs for variable remuneration of company

management and to monitor and evaluate the application of the

guidelines for remuneration to senior executives that the AGM

approved and applicable remuneration structures and levels in

the company. During the year, the committee held two meetings.

At these meetings, all members were present.

REMUNERATION OF THE BOARD

Remuneration of elected Board members is chosen by the Annual

General Meeting according to a proposal from the Nomination

Committee. The table on page 83 presents the fees that are pay-

able to the elected Board members for the period 2021–2022.

CEO AND GROUP MANAGEMENT

GARO’s President and CEO as well as the Business Area

Manager and CEO of GARO E-mobility AB are responsible

for leading and developing operating activities pursuant to the

guidelines and instructions issued by the Board. The scope is

comprised of written terms of reference for the CEO that are

approved annually by the Board.

The CEO leads the work of Group Management, which is

responsible for overall business development. Besides the CEO,

Group Management has consisted of GARO’s CFO, CTO, Pur-

chasing & Logistics Director and the Business Area Manager of

GARO E-mobility since January 1, 2022.

Group Management has meetings once a month to follow up

operations, discuss matters affecting the Group and draft pro-

posals for strategic plans and budgets, which the CEO presents

to the Board for decision.

The CEO ensures that the Board receives such factual and

relevant information as is required for the Board to be able to

make well-supported decisions. The CEO monitors that GARO’s

targets, policies and strategic plans set by the Board are com-

plied with and is responsible for informing the Board of GARO’s

development between the Board's meetings.

GUIDELINES FOR REMUNERATION

According to the Swedish Companies Act, the General Meeting

will resolve on guidelines for remuneration of the CEO and other

senior executives. The following guidelines were approved by

the Annual General Meeting on May 19, 2020.

GARO is to offer remuneration levels and employment condi-

tions that are deemed to be reasonable to recruit and retain a

management team that is highly skilled and with the right capac-

ity for achieving established targets. The overall principle for

salaries and other remuneration of GARO senior executives is to

be market-based.

Senior executives are to receive a ﬁxed salary. Variable

cash remuneration can be paid in addition to ﬁxed salary as

a reward for clearly deﬁned, target-related performance in the

context of a simple and transparent structure. Variable salary for

the CEO is not to exceed MSEK 2 (2), including social security

contributions, per year and does not comprise pensionable sal-

ary. Variable remuneration for other members of senior manage-

ment is not to exceed 30 percent of ﬁxed salary.

Share-price-related incentive schemes are resolved on by the

General Meeting and are not encompassed by these guidelines.

Non-monetary beneﬁts for Group Management, such as com-

pany cars, computers, mobile phones, additional health insur-

ance or occupational health services, may be awarded to the

extent that this is deemed market practice for senior executives

in equivalent positions in the market in which the company oper-

ates. The total value of these beneﬁts may total a small percent-

age of total remuneration.

Senior executives are encompassed by the ITP plan applicable

at any time or a deﬁned-contribution occupational pension plan

that does not exceed 30% of pensionable salary. Alternatively,

senior executives residing outside Sweden or who are foreign

citizens and receive their main pension from a country outside

Sweden can be offered different pension solutions that are rea-

sonable in the relevant country.

Salary for notice periods and severance pay for members of

senior management is not to exceed a total of 24 monthly sala-

ries for the CEO and 12 monthly salaries for other members.

The Board is entitled to deviate from these guidelines if this is

justiﬁed by special circumstances in individual cases, provided

that this is subsequently reported and reasoning provided. For fur-

ther information regarding salaries and remuneration, see Note 8.

PERIOD OF NOTICE AND SEVERANCE PAY

In the termination of the CEO’s employment contract, there is

a period of notice of nine months, regardless of which party

terminates the employment. In the event of the termination of the

employment contract by GARO, the CEO also has a right to sev-

erance pay equivalent to six monthly salaries. For other senior

executives, there is a period of notice of six to 12 months in the

event of termination of the employment contract by GARO. Upon

resignation by the employee, there is a period of notice of three

to six months. In addition to the CEO, the senior executives are

not entitled to severance pay.

EXTERNAL AUDIT

The Annual General Meeting elects an external audit for one

year at a time. The auditor examines the annual report and

accounts and the Board’s and CEO’s management, and works

according to an audit plan that is established in consultation

with the Board. In connection with the audit, the auditor reports

his or her observations to Group Management for reconciliation,

and then to the Board. The Audit Committee meets the auditor

at least once a year when the auditor reports his or her observa-

tions directly to the Committee without the presence of GARO’s

CEO or CFO. The auditor lastly participates in the Annual Gen-

eral Meeting where he or she brieﬂy presents the audit work and

the recommendation in the audit report.

114 | GARO ANNUAL REPORT

CORPORATE GOVERNANCE REPORT

INTERNAL AUDIT

GARO has well-developed governance and internal control

systems. The Board of Directors follows up on the management’s

assessment of the internal controls. In light of the above, the

Board chose not to establish a separate internal audit.

DIVERSITY

With regard to diversity, refer to the company’s Sustainability

Report on pages 34–49 in this Annual Report.

INTERNAL CONTROL

The Board’s and CEO’s responsibility for internal control is regu-

lated in the Swedish Companies Act. The Board’s responsibility

is also regulated in the Code and the Annual Accounts Act,

which also contain requirements on annual external information

disclosures regarding how the internal control is organized inso-

far as it pertains to ﬁnancial reporting.

The aim of the internal control is in part to ensure that GARO’s

objectives are achieved in terms of suitable and effective oper-

ations, reliable reporting and compliance to applicable laws

and ordinances. Internal control regarding ﬁnancial reporting

intends to provide reasonable certainty regarding the reliability

of the external ﬁnancial reporting and that the external ﬁnancial

reporting is prepared in accordance with law and applicable

accounting standards.

CONTROL ENVIRONMENT

The Board of Directors bears the overall responsibility for inter-

nal control of the ﬁnancial reporting. With the aim of creating

and maintaining a functioning control environment, the Board

has established a number of basic documents of signiﬁcance to

the ﬁnancial reporting. This particularly concerns the Board’s

rules of procedure and terms of reference to the CEO. The Board

ensures that established principles for ﬁnancial reporting and

internal control are complied with. The responsibility for main-

taining an effective control environment and the daily work with

internal control regarding the ﬁnancial reporting is delegated

to the CEO. The CEO regularly reports to the Board based on

established procedures.

The internal control structure is also based on a management

system based on GARO’s organization with clear ﬁnancial roles,

areas of responsibility and delegation of powers. Operational

decisions are made at the company or business area level while

decisions on strategy, overall ﬁnancial issues, acquisitions and

major investments are made by GARO’s Board and Group

Management. The steering documents concerning accounting

and ﬁnancial reporting constitute the most signiﬁcant parts of the

control environment when it comes to ﬁnancial reporting. These

documents are continuously updated in the event of changes of

e.g. accounting standards and legislation.

RISK ASSESSMENT

With regard to ﬁnancial risk assessment, the risk that errors

may be made when reporting the company’s ﬁnancial position

and results is considered the primary risk. To minimize this risk,

control documents have been established pertaining to account-

ing, procedures for annual accounts and follow-up of reported

annual accounts. A Group-wide system for reporting annual

accounts has also been introduced.

The Board deals with the outcome of the company’s processes

for risk assessment and risk management, in order to ensure that

these cover all signiﬁcant areas, and establishes, when appro-

priate, any necessary measures to be implemented. In addition

to assessing the risks in the ﬁnancial reporting, the Board and

management work continuously to identify and manage signif-

icant risks affecting GARO’s business from an operational and

ﬁnancial perspective. Read more about the risks on page 68,

Note 3 in this Annual Report.

CONTROL ACTIVITIES

The risks that have been identiﬁed regarding the ﬁnancial

reporting are handled through GARO’s control activities, such as

authorization controls in IT systems and approval controls.

The control structure consists of clear roles in the organization

that enables an effective division of responsibilities of speciﬁc

control activities that aim to discover or prevent the risk of errors

in the reporting on time. The continuous analysis done of the

ﬁnancial reporting together with the analysis done at the Group

level is very important to ensure that ﬁnancial reporting does not

contain any material misstatements. The Group’s controller orga-

nization plays an important role in this internal control process,

which is responsible for ensuring that ﬁnancial reporting from

each unit is correct, complete and delivered in a timely manner.

INFORMATION AND COMMUNICATION

The Group has information and communication channels that

aim to promote completeness and accuracy in the ﬁnancial

reporting. Policies, guidelines and internal instructions regard-

ing the ﬁnancial reporting are available in electronic form

over GARO’s intranet and on the company’s website. Regular

updates and messages regarding changes of accounting poli-

cies, reporting requirements or other information disclosures are

made available and known to the concerned employees.

MONITORING, EVALUATION AND REPORTING

The CEO is responsible for the internal control being organized

and followed up according to the guidelines that the Board has

established. The CEO is also responsible for ensuring indepen-

dent objective audits are done with the aim of systematically

evaluating and proposing improvements of the Group's processes

for governance, internal control and risk management. Financial

governance and control are carried out by local accounting func-

tions and the Group accounting function. GARO’s management

conducts a monthly earnings follow-up with an analysis of devi-

ations from budget, forecast and previous years and all monthly

closings are discussed with the management of the respective

segments. The Board of Directors is sent monthly ﬁnancial state-

ments and the ﬁnancial reporting is followed up at every Board

meeting. Prior to publication of the annual report, the Board and

management go through the ﬁnancial reporting.

The Corporate Governance Report has been audited

by the company’s auditor.

Gnosjö, April 8, 2022

The Board of Directors

GARO ANNUAL REPORT | 115

AUDITOR’S REPORT

Auditor’s report

on the corporate

governance statement

To the general meeting of the shareholders

of GARO AB (publ), corporate identity

number 556051-7772

ENGAGEMENT AND RESPONSIBILITY

It is the Board of Directors who is responsible for the corporate

governance statement for the year 2021 on pages 110–114

and that it has been prepared in accordance with the Annual

Accounts Act.

THE SCOPE OF THE AUDIT

Our examination has been conducted in accordance with FAR’s

auditing standard RevR 16 The auditor’s examination of the cor-

porate governance statement. This means that our examination

of the corporate governance statement is different and substan-

tially less in scope than an audit conducted in accordance with

International Standards on Auditing and generally accepted

auditing standards in Sweden. We believe that the examination

has provided us with sufﬁcient basis for our opinions.

OPINIONS

A corporate governance statement has been prepared. Disclo-

sures in accordance with chapter 6 section 6 the second para-

graph points 2-6 the Annual Accounts Act and chapter 7 section

31 the second paragraph the same law are consistent with

the annual accounts and the consolidated accounts and are in

accordance with the Annual Accounts Act.

Jönköping 8 April 2022

Ernst & Young AB

Joakim Falck

Authorized Public Accountant

THIS IS A TRANSLATION FROM THE SWEDISH ORIGINAL

116 | GARO ANNUAL REPORT

ORGANIZATION AND STRUCTURE

Organization and structure

The GARO Group’s Board of Directors comprises a total of eight people

under the management of Rickard Blomqvist, Chairman of the Board.

Since January 1, 2022, operations have been divided in to two business

areas: GARO Electriﬁcation, which consists of the three product areas of

Electrical distribution products, Project business & Temporary Power, and

GARO E-mobility which includes the E-mobility product area.

President and CEO Patrik Andersson leads Group Management (which

has comprised of ﬁve people since January 1, 2022), following the

Board’s guidelines. Group Management comprises the functions accord-

ing to the organizational chart below.

President and CEO

Purchasing & Logistics

Director

Board of Directors

GARO E-mobility

CFO

Business Area Manager

GARO E-mobility

GARO Electriﬁcation

CTO

118 | GARO ANNUAL REPORT

ORGANIZATION AND STRUCTURE

Board of Directors

LARS-ÅKE RYDH

MEMBER SINCE 2018

BORN: 1953

Education and professional experience:

Master of Engineering, Institute of Tech-

nology at Linköping University. Former

President and CEO of Nefab AB and

Board Chairman of OEM International

AB (publ).

Other ongoing assignments: Chair-

man of Danfo AB, Chiffonjén AB,

Prototypen AB, Schuchardt Maskin AB

and Kooperativet Olja. Board member

of Nolato AB, Nefab AB, Söderbergs-

företagen AB, Spectria Fond AB and

Östrand & Hansen AB.

Shareholdings: 25,000

MARTIN ALTHÉN

MEMBER SINCE 2021

BORN: 1968

Education and professional experience:

M.Sc. in Industrial Economics,

Linköping University. Has held several

senior positions in Husqvarna Group,

AstraZeneca, PA Consulting and

Deloitte.

Other ongoing assignments: Group

CIO of Securitas AB and CEO of

Securitas Intelligent Services AB since

2016

Shareholdings: –

MARI-KATHARINA

KADOWAKI

MEMBER SINCE 2019

BORN: 1964

Education and professional experience:

M.Sc. from Linköping University. Long

operational experience of the electricity

and manufacturing industry, including as

site manager within the Electrolux Group

and today as CEO of the Swedish part

of the battery manufacturer Saft.

Other ongoing assignments: Vice

Chairman of Teknikarbetsgivarna in

Sweden and the Association of Swedish

Engineering Industries (Teknikföretagen)

in Sweden.

Shareholdings: 650

JONAS LOHTANDER

EMPLOYEE REPRESENTATIVE

SINCE 2019

BORN: 1974

Education and professional experience:

Trained electrician. Has worked at

GARO since 2012.

Other ongoing assignments: Safety

representative, Chairman of GARO’s

workshop association at IF Metall

Shareholdings: 89

JOHAN PAULSSON

MEMBER SINCE 2021

BORN: 1963

Education and professional experience:

M.Sc. in Electrical Engineering.

Extensive experience through previous

positions as COO and Head of R&D at

Ericsson Mobile Platforms AB

Other ongoing assignments: CTO of

Axis Communications AB and Board

member of Acconeer AB.

Shareholdings: –

RICKARD BLOMQVIST

CHAIRMAN SINCE 2021 AND

MEMBER SINCE 2015

BORN: 1971

Education and professional experience:

M.Sc. and B.Sc. in Business and Eco-

nomics, Halmstad University. CEO of

Volador AB. Former CFO of the Akka-

FRAKT Group, Business Development

Manager at Hilding Anders International

AB, and CFO of Hedson Technologies

International AB (publ).

Other ongoing assignments: Board

member of Volador AB, Volador Busi-

ness Development AB, Ekonomerna

Holding Sverige AB and Ekonomerna

Family Ofﬁce AB and Ekonomerna

Family Ofﬁce AB.

Shareholdings: 622,500 (privately

and via company)

ULF HEDLUNDH

MEMBER SINCE 2020

BORN: 1960

Education and professional experience:

M.Sc. in Business and Economics,

Stockholm School of Economics, CEO

of Investment AB Helikon.

Senior positions in the Alfred Berg

Group.

Other ongoing assignments: CEO of

Svolder AB (publ) and Board member

of Arla Plast AB.

Shareholdings: 1,500

SUSANNA HILLESKOG

MEMBER SINCE 2018

BORN: 1963

Education and professional

experience: Master of Economics, Lund

University. Several senior positions at

Akzo Nobel and the Trelleborg Group,

and previously a Board member of

ProﬁlGruppen AB (publ).

Other ongoing assignments: CEO of

Trelleborg Wheel Systems Nordic AB

and Board member of BIM Kemi AB,

Lammhults Design Group AB, Holm-

bergs First Holding AB and Gullberg &

Jansson AB.

Shareholdings: –

GARO ANNUAL REPORT | 119

ORGANIZATION AND STRUCTURE

Group Management

At January 1, 2022

HÅKAN DAVIDSSON

PURCHASING & LOGISTICS

DIRECTOR,

EMPLOYED SINCE 2018

BORN: 1968

Education and professional experience:

Technical college graduate and

business administration. Former CEO

of STEELO AB (Lagercrantz Group),

joint owner and Site Manager MSA

Sordin (part of MSA Group), Production

Engineering Manager and Head of

Operations in the Aearo Peltor Group,

as well as sales of business platforms at

20 Hundra AB.

Other ongoing assignments: –

Shareholdings: –

NIKLAS RÖNNÄNG

BUSINESS AREA MANAGER

E -MOBILITY, AND CEO

GARO E-MOBILITY AB

EMPLOYED SINCE 2022

BORN: 1970

Education and professional experience:

Technical college graduate and busi-

ness administration. Previous served

as Sales Director for NIBE AB for

eight years. Prior to this, 16 years at

SCA Packaging, serving as Sales and

Development Director for the ﬁnal eight

years.

Other ongoing assignments: –

Shareholdings: 2,050

HELENA CLAESSON

CFO

EMPLOYED SINCE 2019

BORN: 1969

Education and professional experience:

Bachelor of Science in Economics,

Jönköping University, Business Manage-

ment, IFL Stockholm University. Former

CEO at Sensys Gatso Sweden AB and

CFO at Sensys Trafﬁc AB.

Other ongoing assignments: –

Shareholdings: 550

PATRIK ANDERSSON

PRESIDENT AND CEO

EMPLOYED SINCE 2007

BORN: 1978

Education and professional experience:

Electrician program. Former western

and southern regional sales manager

for Eldon Group.

Other ongoing assignments: Chair-

man of El- och Belysningsföretagen i

Sverige AB.

Shareholdings: 204,200

DANIEL EMILSSON

CTO

EMPLOYED SINCE 2007

BORN: 1975

Education and professional experience:

Electrical and telecom upper-secondary

program. MS in Engineering Physics,

Entrepreneur Program 40 credits at

University of Gothenburg School of

Business, Economics and Law. Various

senior positions in development and

sales and

President of the telecom company

Comhat AB in

Ödsmål, Sweden.

Other ongoing assignments: Chair-

man of Kjellbergs Golv & Textil AB

Shareholdings: 5,000

Södergatan 26, SE-335 33 GNOSJÖ, SWEDEN

+46 (0)370 33 28 00

garo.se and garoemobility.se