Income Statement Infratek AS

1 JANUARY - 31 DECEMBER
     
Amounts in NOK thousand
Note
2013
2012
Operating revenues
13 333
13 348
Total operating revenues
 
13 333
13 348
Salaries and other personnel expenses
(34 391)
(21 058)
Other operating expenses
(48 230)
(11 964)
Depreciation and impairment changes
(9 843)
(7 480)
Total operating expenses
 
(92 464)
(40 502)
Operating profit
 
(79 131)
(27 154)
Interest income from Group companies
7 335
5 251
Other interest income
 
13
12
Other financial income
45 532
76 367
Interest paid to Group companies
 
(10 790)
(7 237)
Other interest costs
 
(57)
(17)
Other financial costs
 
(568)
(2 631)
Total financial items
 
41 465
71 745
Pre-tax profit
 
(37 666)
44 591
Tax on pre-tax profit
10 059
(12 430)
Profit for the year
 
(27 606)
32 161
       
Transfers
     
Dividend allocation
-
95 795
Transferred from other equity
(27 606)
(63 634)
Total transfers
 
(27 606)
32 161
NOTE 1
ACCOUNTING PRINCIPLES
           
Infratek AS’s accounts have been prepared in accordance with Norwegian accounting law and generally accepted accounting principles in Norway (NGAAP).
               
Accrual, classification and valuation principles
             
               
Classification
             
Classification of balance sheet items is defined as follows: All assets related to the business cycle,receivables payable within one year,and assets not intended for permanent ownership or use by the business,are classified as current assets. Other assets are classified as non-current assets. Liabilities with time to maturity exceeding one year after expiration of the accounting year are recognised as long-term liabilities. Other liabilities are classified as current liabilities.
               
Valuation principles
             
Revenues
             
Revenue is recognized when it is earned,that is,when demand for compensation arises. This occurs when services are provided, along with the work performed. Revenues are recognised at the value of the consideration at the transaction date.
               
Assets and liabilities denominated in foreign currencies
             
Transactions denominated in foreign currency are translated into NOK using the exchange rate at the transaction date. Currency gains and losses due to payment of such transactions – and from translation of monetary items (assets and liabilities) in foreign currency into NOK at the balance sheet date – are recognised as financial items in the income statement.
               
Leases
             
Assets which are leased on terms that are transferring financial risk and control of the leased asset to the company (financial leasing) are recognized under property, plant and equipment and related lease obligations are included as a liability under the interest bearing long term liabilities at the net present value of lease payments. Assets are depreciated according to plan and liabilities are reduced by lease payments less the effective interest cost. Lease for assets that are leased on terms where the financial risk and control lies with the lessor are expensed continuously on the basis of invoices received from the lessor.
               
Cash and cash equivalents
             
Cash and cash equivalents for the company consists of cash holdings,deposits in company specific bank accounts and net holdings on the Group’s consolidated Group account system. The difference between the net deposit or draft on the company specific account in the Group’s consolidated account system and the net deposit or draft on the consolidated account system for the Group, is presented as Group-internal receivables or debt.
               
Other receivables
             
Other receivables are entered at their nominal value less provisions for expected losses. Such loss provisions are made following individual assessment of the receivables in question.
               
Investments in subsidiaries
             
Investments in subsidiaries are valued according to the cost method. Dividends received and other profit disbursements from companies are recognized as financial income if the profit disbursement is retained after Infratek AS bought the shares, if not,then profit disbursement is recognized in deduction of costs of subsidiary shares.
               
Tax expense,deferred tax liabilities,and deferred tax assets
             
Tax charges are based on ordinary pre-tax profit. Tax expenses in the profit and loss account consist of taxes payable for the period and any change in deferred tax liabilities/deferred tax assets. Taxes payable are based on taxable profit for the year. Deferred tax recognized in the balance sheet is calculated using the offset method, with full provision for net tax-increasing temporary differences based on the tax rate on the balance sheet date and nominal sizes. Deferred tax assets recognised in the balance sheet relating to net tax-reducing temporary differences and carry-forward losses are based on the likelihood of sufficient future earnings or ability to benefit from tax positions that can be offset through Group contributions.
               
Pensions and pension liabilities
             
See Note 2.15 to the consolidated financial statements. Infratek AS has exercised the option of switching to NRS 6A, which refers to IAS 19 regarding the accounting treatment of pension expenses.
               
Cash flow statement principles
             
The cash flow statement has been prepared using the indirect method of accounting. The method entails that the analysis is being based on the company's profit for the year to be able to present cash flows added from ordinary operations, investment activities and financing activities.
NOTE 2
OPERATING REVENUES
 
The operating revenues are specified as follows:
   
     
Spesification operating revenues
   
Amounts in NOK thousand
2013
2012
External revenues
3 833
3 760
Internal revenues
9 500
9 588
Total operating revenues
13 333
13 348
NOTE 3
SALARIES AND OTHER PERSONNEL EXPENSES
Spesification of personnel expenses
   
Amounts in NOK thousand
2013
2012
Salaries and holiday pay
26 883
14 785
Social security contribution
3 535
2 504
Net pension expenses
1 061
1 139
Other personnel expenses
2 910
2 630
Total personnel expenses
34 391
21 058
     
As of 31 December 2013, Infratek AS had 26 employees.
   
     
Specification of remuneration to senior executives
   
Amounts in NOK thousand
2013
2012
Salary and other remuneration to general manager
5 246
3 153
Pension costs
210
162
Other remunerations
27
45
Board remuneration
1 179
1 237
Total remuneration to senior executives
6 662
4 597
     
The general manager has a bonus agreement based on the Group’s performance with respect to share price development and group targets. For further information, please see note 21 in the consolidated financial statements.
     
Due to the general manager leaving on 25 October 2013, Infratek AS has hired an acting general manager in the period from 28 October to 31 December 2013. The expenses related to this hiring are not included in the total remuneration in the table above, and amounts to NOK 166 thousand excluding VAT.
     
Loan to general manager
   
Infratek has extended an interest-free loan to the general manager as part of a car expenses reimbursement program. The loan is written down over a period of 10 years; security is posted for the loan. As of 31 December 2013, the balance on the loan amounted to NOK 212.500. The annual amount written down and the interest-free loan component are reported to the tax authorities as a salary benefit. In case of resignation, any outstanding loans must be paid before the date of resignation.
     
Specification of auditor’s fees (excluding VAT)
   
Amounts in NOK thousand
2013
2012
Fee statutory audit
625
647
Fee assurance services
-
13
Fee tax advisory services
-
-
Fee other non-audit services
52
103
Total auditor fee
677
763
NOTE 4
PENSION EXPENSES, ASSETS AND LIABILITIES
As of 31 December 2013, the company had defined benefit pension plans that covered a total of 4 people in the private plan and 5 people in a public plan. The plans provided rights to defined future benefits. These benefits depend chiefly on the number of years of service and pay level upon reaching retirement age. Pursuant to the law governing mandatory occupational pension, agreements have been established concerning defined contribution schemes for everyone who is not covered by the Group’s group pension plans. The pension schemes are organised in separate pension funds, through insurance companies or directly from the company.
     
Pension liabilities and costs
   
Amounts in NOK thousand
2013
2012
Liabilities in the balance sheet are arrived at as follows:
   
Present value of accrued pension liabilities in fund-based plans
8 909
8 099
Fair value of pension assets
(13 798)
(12 342)
Actual net pension liabilities (assets) for defined benefit plans in fund-based plans
(4 889)
(4 243)
Present value of liabilities not in fund-based plans
1 557
1 430
Estimate deviations not recognized in profit and loss
-
-
Social security contribution
220
202
Net pension liabilities (assets) in the balance sheet as of 31 December
(3 112)
(2 612)
     
Net pension expenses are arrived at as follows:
   
Present value of the year’s pension earnings
(538)
(846)
Interest expenses of liability
(385)
(352)
Expected yield on pension funds
516
435
Liabilities upon change in plan
-
-
Recognized estimate changes and estimate deviations
-
-
Social security contribution
(76)
(118)
Member contributions
13
9
Administrative expenses
(95)
-
Total defined benefit pension expenses included in personnel costs
(697)
(955)
Net financial cost from defined benefit plans
131
83
Total recognised performance-based pension costs
(566)
(872)
     
Total pension expenses, contribution plans
(365)
(184)
Adjustment pension premiums
-
-
Total pension expenses (incl. in personnel expenses)
(930)
(1 056)
     
     
Change in liabilities in the balance sheet:
   
Balance sheet value as of 1 January
(2 612)
3 971
Change in employee base due to business transfers
-
-
Change in accounting principle
-
-
Expenses recognized this year
566
871
Pensions paid and payment of pension premium
(934)
(1 597)
Deviation of periods estimate recognized in equity
(132)
(5 857)
Balance sheet value as of 31 December
(3 112)
(2 612)
     
The following economic assumptions are used in calculating pension liabilities:
     
 
2013
2012
Discount rate
4.10%
4.00%
Expected yield on pension funds
4.10%
4.00%
Annual salary growth
3.90%
4.00%
G regulation
3.90%
4.00%
Annual social security pension growth 1)
0.50 % / 3.25 %
0.50 % / 2.25 %
     
1) Private pensions schemes 0.5 % and public pension schemes 3.25%.
NOTE 5
OTHER OPERATING EXPENSES
Amounts in NOK thousand
2013
2012
Real estate expenses
(31 645)
(7 706)
In-sourced services, etc.
8 982
9 824
Office expenses
(11 230)
(10 701)
Other operating expenses
(14 337)
(3 381)
Total other operating expenses
(48 230)
(11 964)
NOTE 6
OTHER FINANCIAL INCOME / GROUP CONTRIBUTIONS
Other financial income includes Group contribution from subsidiaries, recognized as financial income of NOK 43.3 million in 2013 and NOK 76.1 million in 2012.
NOTE 7
TAX EXPENSE
Amounts in NOK thousand
2013
2012
Pre-tax profit
(37 666)
44 591
Permanent differences
(42 748)
(70 415)
Non-taxed gain on sales of shares
-
-
Non-taxed Group contribution recognized as financial income
43 258
76 074
Pension recognized in equity
135
5 857
Change in temporary differences
37 021
(12 439)
Tax basis before application of loss carryforward
-
43 668
Applied tax loss carryforward
-
(21 764)
Taxable income
-
21 904
     
Specification of tax expense for the year:
   
Tax payable
-
(6 133)
Tax effect of pension recognized in equity
(38)
1 640
Change in deferred tax asset (recognized)
10 097
(7 937)
Ordinary tax expense
10 059
(12 430)
Taxation rate, 31 December
28%
28%
     
Amounts in NOK thousands
2013
2012
Deferred tax liabilities/deferred tax asset:
   
Fixed assets
(21)
-
Pension liabilities
(3 112)
(2 611)
Gain- and loss account
13 042
-
Recognised accruals
24 500
-
Temporary differences that affect tax payable:
34 409
(2 611)
Tax loss carryforward
-
-
Basis, deferred tax liabilities/(deferred tax assets)
34 409
(2 611)
Deferred tax liabilities/(deferred tax assets)
9 290
(731)
     
Reconciliation of effektive tax rate:
   
Amounts in NOK thousand
2013
2012
Pre-tax profit
(37 666)
44 591
Expected tax expense, 28% nominal taxation rate
10 546
(12 485)
Effect of change in tax rate
(344)
-
Effect of non-taxed dividend
-
-
Impact of reversed pension effect recognized in OCI
-
-
Effect of non-deductible expenses
(143)
55
Tax expense
10 059
(12 430)
     
Effective tax rate
(26.7%)
27.9%
NOTE 8
BANK AND OTHER GUARANTEES
       
Amounts in NOK thousand
2013
2012
       
Bank deposits, Group accounts
166 915
201 544
       
Bank deposits outside the Group account system
-
724
       
Total cash and cash equivalents
166 915
202 268
       
             
See Note 12 to the consolidated financial statements for a presentation of the Group account system.
       
             
Restricted bank deposits
           
Amounts in NOK thousand
2013
2012
       
Employees tax deduction
-
-
       
Down payment deposits
-
-
       
Total restricted cash and cash equivalents 1)
16 407
17 261
       
Total restricted cash and cash equivalents
16 407
17 261
       
1) At the date of establishing Infratek Group, the employees received a consideration from Hafslund ASA of NOK 15 million as settlement for loss of rights concerning use of the Hafslund Group’s company cabins. These funds are deposited in an account in the name of Infratek AS. The funds belong to the employees and the yield is earmarked for social purposes benefiting the employees of the Infratek Group. As of 31 December 2013 the deposited amount increased to NOK 16.4 million.
       
             
             
Infratek has an unused overdraft facility with DNB Bank ASA of NOK 100 million. The facility may be terminated at one month's notice by either party. The agreement requires a minimum equity of 25 percent and a target of maximum 2.0 net debt/EBITDA for Infratek Group.
NOTE 9
INVESTMENTS IN SUBSIDIARIES
 
Registered business adress
Book value
Balance sheet equity
Profit for the year
Ownership voting rights
Amounts in NOK thousand
       
Infratek Norge AS
Oslo
332 173
328 049
50 845
100%
Infratek Sverige AB
Stockholm
254 068
116 520
(14 268)
100%
Infratek Finland OY
Helsinki
41 942
88 156
1 744
100%
Infratek Elsikkerhet AS
Oslo
21 965
45 831
8 307
100%
Infratek Sikkerhet AS
Oslo
54 540
39 947
(8 498)
100%
Total
 
704 688
618 503
38 130
 
NOTE 10
GROUP INTERNAL RECEIVABLES AND PAYABLES
Sale and purchase of goods and services to / from other Group companies are based on general market conditions. Administrative services provided to subsidiaries are sold at cost plus basis.
     
Amounts in NOK thousand
2013
2012
Receivables
   
Group internal accounts receivable
4 495
4 928
Receivables, Group contribution
43 258
220 000
Dividends receivable from group companies
-
58 133
Total current receivables from group companies
47 753
283 061
     
Amounts in NOK thousand
2013
2012
Liabilities
   
Group internal accounts payable
1 189
1 130
Bank accounts in Group account system
425 044
342 579
Other short-term liabilities
25 242
25 000
Group contribution liabilities
-
257 000
Total currant liabilities to group companies
451 475
625 709
NOTE 11
OTHER NON-CURRENT RECEIVABLES
Amounts in NOK thousand
2013
2012
Loans to employees
2 421
2 450
Paid core-capital, pension fund
14 079
14 079
Subordinated loan, pension fund
1 939
1 939
Total other non-current receivables
18 439
18 467
NOTE 12
OTHER CURRENT RECEIVABLES
Amounts in NOK thousand
2013
2012
Pre-paid expenses
3 367
3 075
VAT receivable
1 137
-
Other current receivables
343
378
Total other current receivables
4 848
3 453
NOTE 13
PROPERTY, PLANT AND EQUIPMENT
   
       
Fixtures and fittings
   
Amounts in NOK thousand
           
Aquisition costs 1 January
     
18 253
   
Operating investments
     
461
   
Acuisition costs as of 31 December
     
18 714
   
             
Accumulated depreciation and impairment charges 1 January
 
(6 441)
 
 
Depriciation and impairment charges
 
(2 017)
   
Accumulated depreciation and impairment charges as of 31 December
 
(8 458)
   
             
Book value as of 31 December 2013
 
10 255
   
             
Expected economic life
   
10 years
     
Depreciation
   
Linear
     
             
Operating leasing obligations
           
   
Future lease payments
   
   
Rent
Machinery / equipment
Total
   
Amounts in NOK thousand
           
Due within 1 year
 
6 463
173
6 636
   
Due later than 1 year not later than five years
 
25 758
129
25 887
   
Due later than 5 years
 
-
-
-
   
Total
 
32 221
302
32 523
   
             
Recognized costs regarding operating leases for the period
 
6 061
108
6 169
   
NOTE 14
INTANGIBLE ASSETS
   
Amounts in NOK thousand
Software & licenses
   
Aquisition costs 1 January
60 124
   
Operating investments
10 006
   
Operating disposal
 
(18 071)
   
Aquisition costs as of 31 December
52 059
   
         
Accumulated depreciation and impairment charges 1 January
(15 485)
 
 
Accumulated depreciations disposed assets
 
6 966
   
Impairment charges
 
(1 936)
   
Depreciation
(5 889)
   
Accumulated depreciation and impairment charges as of 31 December
(16 344)
   
         
Book value as of 31 December 2013
35 715
   
         
Expected economic life
 
10 years
   
Depreciation
 
Linear
   
         
Replacement of the IT infrastructure provider and a major upgrade of the Group's ERP system has led to the scrapping of previous investments and system versions. Total disposals of NOK 11.1 million are recognised for the year 2013.
   
 
       
NOTE 15
OTHER CURRENT LIABILITIES
Amounts in NOK thousand
2013
2012
Incurred salaries, holiday pay, employee-related liabilities
6 714
3 045
Personnel development fund
626
826
Other incurred costs
6 345
653
Total other current liabilities
13 685
4 524
NOTE 16
GUARANTEE LIABILITIES
         
             
The Group purchases bank guarantees as security for certain liabilities. As of 31 December 2013, these guarantees amounted to a total of NOK 1.8 million, which relates to tax deduction guarantees. In 2012, corresponding guarantees amounted to NOK 1.9 million, of which NOK 1.8 million was applicable to tax deduction guarantees.
In addition to direct bank guarantees, Infratek AS had to guarantee an amount of NOK 100 million related to our cash credit in DnB and another NOK 180 million in surety associated with Infratek's subsidiaries, also to DnB.
The company has also pledged Group guarantees of NOK 61.3 million for 59 of the subsidiaries' customers.
             
For other contingencies, see note 28 in the consolidated financial statements.
           
NOTE 17
EQUITY
       
 
Share capital
Share premium account
Other paid-in equity
Other equity/ uncovered loss
Total equity
Amounts in NOK thousand
         
Equity as of 1 January 2013
319 316
82 458
104 205
28 353
534 332
           
Accrued dividend 2013
-
-
-
-
-
Change in estimate pensions
-
-
-
97
97
Profit for the year 2013
-
-
-
(27 606)
(27 606)
Equity as of 31 December 2013
319 316
82 458
104 205
844
506 822
NOTE 18
PROVISION FOR OTHER LIABILITIES
           
 
In 2009, the Group entered into a ten year lease for Breivollveien 31 (Oslo). As a result of sale of entities and other organisational changes, parts of these premises are now not in use. The unused space has been advertised for sublease for the past two years without success, - and the vacant office space and related costs are assessed to fulfill the criteria of a loss making contract.
       
               
Since 2010, Infratek has subleased the 3rd floor of the same premises at Breivollveien 31 (Oslo). As part of a walk-through of the Group's total commitments, a revised assessment of the cash flow derived from this sublease agreement was performed. A revised method for the allocation of property charges means that the Group has a loss related to the overall leasing contract, a contract that runs until the end of 2018. A loss accrual has been made based on contractual obligations and payments for the remaining lease period. There is a low degree of unceretainty regarding the size of the calculated loss. The measurement of the loss accrual meets the demands for a best estimate of the commitment. As a base for the calculation, the SSB long-term prognosis for the Consumer Price Index at 2.2 percent - and a discount rate based on 5 year long-term risk-free rate of government bonds for the remaining contract period of 2.07 percent – have been applied.
       
               
The best estimate on the loss accrual related to the lease contract for Breivollveien 31 (Oslo) was NOK 24.5 million at the end of 2013, of which NOK 5 million are classified as short-term, and the remaining NOK 19.5 million are classified as a non-current liability. As of 31 December 2013, none of these liabilities are due later than 5 years, while NOK 5 million were due later than 5 years as of 31 December 2012.
       
NOTE 19
SHARE CAPITAL AND SHAREHOLDER MATTERS
           
See Note 13 to the consolidated financial statements.
NOTE 20
EVENTS AFTER THE BALANCE SHEET DATE
           
Decision on delisting Infratek AS on the Oslo Stock Exchange
   
On 18 March 2014, Oslo Stock Exchange decided to delist the shares of Infratek AS. The delisting was executed in accordance with paragraph 25 (1) of the Stock Exchange Act. On this basis, Oslo Stock Exchange made the following decision on 18 March 2014:The last day of trading was 20 March 2014.
               
The shares of Infratek are delisted from the Oslo Stock Exchange.
               
Decision to convert Infratek ASA from a public limited company to a limited company
   
In an Extraordinary general meeting 10 March 2014 it was decided to convert Infratek ASA to a liability company, ref the Norwegian Public Limited Liability Companies Act paragraph 15-1. The resolution passed came into motion as the company's shares were delisted at the Oslo Stock Exchange. The change was registered in the Register of Business Enterprises on 28 March 2014.
               
The Board of directors and company management of Infratek do not know of any other events after the balance sheet date that could effect the profit and loss, balance sheet, cash flow or equity.
               
Deckaration
             
The Board of Directors and CEO hereby declare that to the best of their knowledge, the accounts covering the period 1 January through 31 December 2013, including notes to the accounts, have been prepared and presented in accordance with current accounting standards . They further declare that the information in the annual report for 2013 provides a true and fair view of the Group’s assets, liabilities, financial position, and results as a whole. The Board and CEO also declare that to the best of their knowledge, the annual report provides a true and fair overview of profit, key events in the accounting period and their influence on the annual accounts, the company’s position, and the most important risks and uncertainties facing the company and the Group.
               
               
BOARD OF DIRECTORS INFRATEK AS, Oslo 8 April 2014
         
Lars Ove Håkansson, Chairman    Carl Johan Falkenberg    Mats Jönsson
         
Petter Darin   Olle Strömberg    
         
Roger André Hansen   Rune Tobiassen   Lars Bangen, CEO