Income Statement Group

NOTE 25

BUSINESS MERGER

Acquisition of shares in Mini Entreprenad AB:

Infratek Sverige AB entered into an agreement on 1 July 2011 concerning the acquisition of 70 per cent of the shares in the Swedish company Mini Entreprenad AB. As part of the acquisition, there exists both a sales option and a purchase option related to the remaining 30 per cent of shares in the company, which fall due in 2015. On the basis of existing options and because Infratek does not have full control over the extent to which non- controlling interest shall be maintained in the future, the purchase is pursuant to IFRS considered as a purchase of 100 per cent of the shares, however with an obligation to pay for the remaining 30 per cent of shares when the option falls due in 2015.

In accounting terms, the acquisition of Mini Entreprenad AB has accordingly been treated as a 100 per cent owned subsidiary without non- controlling interest. At the same time, the Group has estimated a future purchase amount concerning the remaining 30 per cent of the shares. At the time of the acquisition, this obligation was estimated at approximately SEK 2,8 million in 2015, which is equivalent to approximately SEK 2,4 million when discounted. This obligation is estimated on the basis of pricing mechanisms set forth in the option agreements and the estimate will be followed up quarterly. Any changes in the estimated purchase obligation will be recognised in the profit and loss account for the Group under financial items.

Analysis related to the acquisition of Mini Entreprenad AB:

Amounts in NOK million

Purchase 70% of the shares

Estimated value option remaining 30%

Total consideration

Fair value acquired net assets

Goodwill

Observable assets and liabilities related to the acquisition as of 1 July 2011:

Amounts in NOK million

Fair value

Property, plant and equipment

Accounts receivable and other receivables

Accounts payable and other current liabilities

Long-term loan

Acquired net assets

Goodwill related to the acquisition

After assessing actual value related to all identifiable assets and liabilities, the Group is left with a net item which was activated as goodwill. The estimated goodwill was activated in the Group’s balance sheet based on expectations that synergy effects involving the Group’s current operations will provide the Group with opportunities for increased growth in revenues in the future. See also note 7. The goodwill is not tax deductible.

Net cash outlay related to the cost price

Amounts in NOK million

The fair value of acquired cash and cash equivalents on acquisition

Cash payment 70 %

Net cash consideration

Effect of acquired companies on the annual results

The acquisition of Mini Entreprenad AB became effective on 1 July 2011. Of this reason, the company`s results as included in the Groups overall results of 2011, was earned in the interval between 1 July 2011 and 31 December 2011.

The acquired companies have contributed based on the following figures for operating revenue and operating profit as reported in the Group’s annual results for 2011:

Amounts in NOK million

Revenues

Operating profit

Acquisition of shares in Unisec Varularm AB:

Infratek Sikkerhet AS entered into an agreement on 5 February 2010 concerning the acquisition of 51 per cent of the shares in the Swedish company, Unisec Varularm AB. As part of the acquisition, there exists both a sales option and a purchase option related to the remaining 49 per cent of shares in the company, which fall due in 2013. On the basis of existing options and because Infratek does not have full control over the extent to which non- controlling interest shall be maintained in the future, the purchase is pursuant to IFRS considered as a purchase of 100 per cent of the shares, however with an obligation to pay for the remaining 49 per cent of shares when the option falls due in 2013.

In accounting terms, the acquisition of Unisec Varularm AB has accordingly been treated as a 100 per cent owned subsidiary without non- controlling interest. At the same time, the Group has estimated a future purchase amount concerning the remaining 49 per cent of the shares. At the time of the acquisition, this obligation was estimated at approximately SEK 16.6 million in 2013, which is equivalent to approximately SEK 15.1 million when discounted. This obligation is estimated on the basis of pricing mechanisms set forth in the option agreements and the estimate will be followed up quarterly. Any changes in the estimated purchase obligation will be recognised in the profit and loss account for the Group under financial items.

Analysis related to the acquisition of Unisec Varularm AB:

Amounts in NOK million

Purchase of 51 % of the shares

Estimated value option remaining 49 %

Total consideration

Fair value acquired net assets

Goodwill

Oberservable assets and liabilities related to the acquisition as of 5 February 2010:

Amounts in NOK million

Fair value

Cash and cash equivalents

Property, plant and equipment

Intangible assets

Amounts receivable and other reveivables

Inventories

Accounts payable and other current liabilities

Other allocations and liabilities

Deferred tax liability

Payroll taxes payable

Acquired net assets

Goodwill related to the acquisition

After assessing actual value related to all identifiable assets and liabilities, the Group is left with a net item which was activated as goodwill. The estimated goodwill was activated in the Group’s balance sheet based on expectations that synergy effects involving the Group’s current operations will provide the Group with opportunities for increased growth in revenues in the future. See also note 2.6a and note 7. The goodwill is not tax deductible.

Net cash outlay related to the cost price

The settlement for the cost price was split into two parts and consisted on the one hand of a cash outlay of NOK 8.7 million and on the other of the value of a buyout responsibility of NOK 12.6 million. In addition, cash reserves of NOK 3.2 million were assumed upon the acquisition.

Amounts in NOK million

Fair value of acquired cash and cash equivalents on acquisition

Cash payment 51 %

Net cash consideration

Effect of acquired companies on the annual results

The acquisition of Unisec Varularm AB became effective on 5 February 2010. The companies’ overall results for 2010 therefore correspond, for all practical purposes, with that which is included in the Group’s annual results for 2010.

The acquired companies have contributed based on the following figures for operating revenue and operating profit as reported in the Group’s annual results for 2010:

Amounts in NOK million

Revenues

Operating profit

Acquisition of additional shares in Eiendomssikring AS:

On 6 September 2010 Infratek entered an agreement concerning the acquisition of an additional 34 per cent of the shares in Eiendomssikring AS. Infratek previously had a 51 per cent ownership interest in the company. As part of the purchase, there exist both a sales option and a purchase option related to the remaining 15 per cent of the shares in the company, which falls due in 2013. On the basis of the same argument which pertained for Unisec Varularm AB, in accounting terms, the acquisition has accordingly been treated as a 100 per cent owned subsidiary without non-controlling interest; however, with an obligation to pay for the remaining 15 per cent of shares when the option falls due in 2013. At the time of the acquisition, this obligation was estimated at approximately NOK 9.6 million in 2013, which is equivalent to approximately NOK 8.6 million when discounted. This obligation is estimated on the basis of pricing mechanisms set forth in the option agreements and the estimate will be followed up quarterly. Any changes in the estimated purchase obligation will be recognised in the profit and loss account for the Group under financial items.

Buyout of the non-controlling has been has been treated as an equity capital transaction pursuant to the revised IAS 27, see also note 2.1.1 for a more detailed description.

Analysis related to the acquisition of Eiendomssikring AS:

Amounts in NOK million

Purchase 34 % of the shares

Estimated value option remaining 15 %

Total consideration

Book value of non-controlling interest

Equity effect

Net cash outlay related to the cost price

The settlement for the cost price was split into two parts and consisted on the one hand of a cash outlay of NOK 8.0 million and on the other of the value of a buyout responsibility of NOK 8.6 million.

Amounts in NOK million

Cash payment 34 %

Net cash consideration