Income Statement Infratek ASA

Note

 

2010

restated

NOTE 1

ACCOUNTING PRINCIPLES

Infratek ASA’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 fixed assets. Liabilities with time to maturity exceeding one year after expiration of the accounting year are entered 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 accounted for by the value of the transaction date.

Assets and liabilities denominated in foreign currencies

Monetary items denominated in foreign currencies are translated at balance sheet date.

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 fixed assets, and related lease obligations are included as a liability under the interest bearing long term debt to 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 ASA bought the shares, if not, then profit disbursement is recognized in deduction of costs of subsidiary shares.

Tax expense, deferred tax, and deferred tax benefit

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 taxes/deferred tax benefits. 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 benefits recorded 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 Group accounts. Infratek ASA has exercised the option of switching to NRS 6A, which refers to IAS 19 regarding the accounting treatment of pension expenses.

Change in accounting policy

The company has in 2011 changed the accounting policy for pensions. The change implies leaving the so- called ‘corridor approach’ for the principle of recognizing the net pension obligation, including accumulated actuarial losses previously not recognized, as a liability at the balance sheet day. Estimated actuarial deviations arise from changes in actuarial assumptions or base data. The former accounting principle implied recognition of accumulated actuarial losses over and above the greatest of 10 percent of pension asset value or 10 percent of pension liabilities, in the profit and loss account over a period that corresponds to employees’ expected average remaining terms of employment. The current principle implies recognition of actuarial gains and losses attributable to changes in actuarial assumptions or base data in to the equity on an ongoing basis after provisions for deferred tax.

 

The company believes that the changed policy provides more relevant information for the users of the financial statements.

According to The Norwegian Accounting act § 7-3, ref § 6-6 the change has been made retrospectively and the comparatives have been restated accordingly. This implies that the company is presenting its net benefit obligation, included accumulated actuarial losses previously not recognized, in the balance sheet for both year 2010 and 2011. The change in accounting principle will imply that all future actuarial gains or losses will be recognized through equity on each reporting date.

In addition the company has, according to NRS 6 paragraph 67, ref IAS 19.119 changed how the net retirement benefit costs are presented in the statement of profit and loss. The company has changed its presentation of net retirement benefit cost as salaries and other personnel expenses to dividing net retirement benefit cost between salaries and other personnel expenses and net finance. The retirement benefits accrued during the period are classified as salaries and other personnel expenses and the net interest on the estimated liability and the projected yield on pension fund assets are classified as net finance.

The impact of the change in accounting policy is presented in note 3 Salaries and other personell expenses, note 4 Pensions, note 7 Tax and note 17 Statement of equity.

Cash flow statement principles

The cash flow statement has been prepared using the indirect method of accounting. The method entails analysis being based on the unit’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 other operating revenues

Amounts in thousand NOK

External revenues

Internal revenues

Total operating revenues

NOTE 3

SALARIES AND OTHER PERSONELL EXPENSES

Spesification of personell expenses

Amounts in thousand NOK

 

 

2010

after

restatement

2010

before          restatement

Salaries and holiday pay

Social security contribution

Net pension expenses

Other personnel expenses

Total personnel expenses

As of 31 December 2011, Infratek ASA had 17 employees.

Specification of remuneration

Amounts in thousand NOK

Salary and other remuneration to general manager

Pension costs

Other remunerations

Board remuneration

Total remuneration to senior executives

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 2011, the balance on the loan amounted to NOK 308.333. 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

Amounts in thousand NOK

Fee statutory audit

Fee assurance services

Fee tax advisory services

Fee other non-audit services

Total auditor fee

NOTE 4

PENSION EXPENSES, ASSETS AND LIABILITIES

Per 31 December 2011 the company had 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.

Pension liabilities and costs

Amounts in thousand NOK

 

 

2010

after

restatement

2010

before

restatement

Liabilities in the balance sheet are arrived at as follows:

Present value of accrued pension liabilities in fund-based plans

Fair value of pension assets

Actual net pension liabilities for defined benefit plans in fund-based plans

Present value of liabilities not in fund-based plans

Estimate deviations not recognized in profit and loss

Social security contribution

Net pension liabilities in the balance sheet as of 31 December

Net pension expenses are arrived at as follows:

Present value of the year’s pension earnings

Interest expenses of liability

Expected yield on pension funds

Liabilities upon change in plan

Recognized estimate changes and estimate deviations

Social security contribution

Member contributions

One-time payment

Total pension expenses, defined benefit plans

Net financial cost from performance plans

-

Sum recognized performance-based pension costs

Total pension expenses, contribution plans

Adjustment pension premiums

Total pension expenses (incl. in personnel expenses)

Change in liabilities in the balance sheet:

Balance sheet value as of 1 January

Change in employee base due to business transfers

Change in accounting principle

Expenses recognized this year

Pensions paid and payment of pension premium

Deviation of periods estimate recognized in equity

Balance sheet value as of 31 December

The following economic assumptions are used in calculating pension liabilities:

2010

after

restatement

2010

before

restatement

Discount rate

2.60 %

4.00 %

4.00 %

Expected yield on pension funds

4.10 %

5.40 %

5.40 %

Salary growth

3.25 %

3.75 %

3.75 %

G regulation

3.25 %

3.75 %

3.75 %

Annual social security pensiond growth1)

0.10% / 2.5%

1.30% / 2.97%

1.30% / 2.97%

1) Private pensions schemes 0.1 % and public pension schemes 2.5%.

NOTE 5

OTHER OPERATING EXPENSES

Amounts in thousand NOK

Real estate expenses

In-sourced services, etc.

Office expenses

Other operating expenses

Total other operating expenses

NOTE 6

OTHER FINANCIAL INCOME / GROUP CONTRIBUTIONS

Other financial income comprises dividend from subsidiaries, recognized as financial income of NOK 97.5 million in 2011 in addition to Group contribution from subisdiaries, recognized as financial income of NOK 90.0 million in 2010.

NOTE 7

TAX EXPENSE

Amounts in thousand NOK

2010

after restatement

2010

before restatement

Pre-tax profit

Permanent differences

Non-taxed gain on sales of shares

Non-taxed Group contribution recognized as financial income

Taxable Group contribution recognized against acquisition cost

Change in temporary differences

Tax basis before application of loss carryforward

Applied tax loss carryforward

Taxable income

Specification of tax expense for the year:

Tax payable

Tax on share issue expenses recognized in equity

Tax on Group contribution recognized in acquisition cost

Change in deferred tax asset (recognized)

Ordinary tax expense

Taxation rate, 31 December

Amounts in thousands NOK

2010

after restatement

2010

before restatement

Deferred tax/deferred tax benefit:

Pension liabilities

Temporary differences that affect tax payable:

Tax loss carryforward

Basis, deferred tax/(deferred tax benefit)

Deferred tax/(deferred tax benefit)

Reconciliation of effektive tax rate:

Amounts in thousand NOK

2010

after restatement

2010

before restatement

Pre-tax profit

Expected tax expense, 28% nominal taxation rate

Incorrect tax cost 2010

Effect of non-taxed Group contribution

Impact of reversed pension effect recognized in OCI

Effect of permanent differences

Tax expense

Effective tax rate

NOTE 8

BANK AND OTHER GUARANTEES

Amounts in thousand NOK

Bank deposits, Group accounts

Bank deposits outside the Group account system

Total cash and cash equivalents

See Note 12 to the Group accounts for a presentation of the Group account system.

Restricted bank deposits

Amounts in thousand NOK

Employees tax deduction

Down payment deposits

Total restricted cash and cash equivalents 1)

Total restricted cash and cash equivalents

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 ASA. The funds belong to the employees and the yield is earmarked for social purposes benefiting the employees of the Infratek Group. Per 31 December 2011 the deposited amount increased to NOK 16.2 million.

NOTE 9

INVESTMENTS IN SUBSIDIARIES

Registered business adress

Book value

Balance sheet equity

Profit for the year

Ownership voting rights

Infratek Entreprenør AS

Oslo

Infratek Sverige AB

Stockholm

Infratek Öst AB

Stockholm

Infratek Finland OY

Helsinki

Infratek Elsikkerhet AS

Oslo

Infratek Sikkerhet AS

Oslo

Total

Infratek Öst AB merged with Infratek Sverige AB in 2011

NOTE 10

GROUP INTERNAL ACCOUNTS RECEIVABLE AND PAYABLE

Amounts in thousand NOK

Receivables

Group internal receivables

Receivables, Group contribution

Earned income, Group

Total accounts receivable

Amounts in thousand NOK

Payables

Group Internal payable

Bank accounts in Group account system

Incurred costs, Group companies

Total accounts payable

NOTE 11

OTHER LONG TERM RECEIVABLES

Amounts in thousand NOK

Loans to employees

Paid core-capital, pension fund

Subordinated loan, pension fund

Total other long-term receivables

NOTE 12

OTHER SHORT TERM RECEIVABLES

Amounts in thousand NOK

Pre-paid expenses

VAT receivable

Other short term receivables

Total other short-term receivables

NOTE 13

PROPERTY, PLANT & EQUIPMENT

Fixtures and fittings

Amounts in thousand NOK

Aquisition costs 1 January

Operating investments

Acuisition costs as of 31 December

Accumulated depreciation and impairment charges 1 January 2011

Depriciation and impairment charges

Accumulated depreciation and impairment charges as of 31 December

Book value as of 31 December 2011

Expected economic life

10 years

Depreciation

Linear

Operating leasing obligations

Future lease payments

Rent

Machinery and equipment

Total

Amounts in thousand NOK

Due within 1 year

Due later than 1 year not later than five years

Due later than 5 years

Total

Recognized costs regarding operating leases for the period

NOTE 14

INTANGIBLE ASSETS

Amounts in thousand NOK

Software & licenses

Aquisition costs 1 January

Operating investments

Aquisition costs as of 31 December

Accumulated depreciation and impairment charges 1 January

Depriciation and impairment charges

Accumulated depreciation and impairment charges as of 31 December

Book value as of 31 December 2011

Expected economic life

10 years

Depreciation

Linear

NOTE 15

OTHER CURRENT LIABILITIES

Amounts in thousand NOK

Incurred salaries, holiday pay, employee-related liabilities

Personal fund

Other incurred costs

Total other current liabilities

NOTE 16

GUARANTEE LIBILITIES

The Group purchases bank guarantees as security for certain liabilities. As of the 31 December 2011, these amounted to a total of NOK 1.8 million, solely applicable as tax deduction guarantees. In 2010, corresponding guarantees amounted to NOK 1.9 million while other guarantees added up to a total of NOK 24.8 million.

In addition to direct bank guarantees, Infratek ASA had to guarantee an amount of NOK 100 million related to our cash credit in DnB and another NOK 200 million in surety associated with Infrateks subsidiaries, also to DnB.

Further, Infratek ASA was subject to securitizing several of the project guarantees issued by DNB located in Sweden amounting to SEK 10.9 million in addition to another NOK 0.6 million, adding up to a total of NOK 10.1 million. This followed as the extent of these guarantees have exceeded the standard framework in association with DnB.

For other contingencies, see note 28 for the Group.

NOTE 17

EQUITY

Share capital

Share premium fund

Other paid-in equity

Other equity/

uncovered loss restated

Total equity

restated

Amounts in thousand NOK

Equity as of 1 January 2010

Effect of changes in accounting principles

Equity as of 1 January 2010 restated

Change in Group contribution 2008

Allocation dividend 2010

Change in estimate pensions

Profit for the year 2010

Equity as of 31 December 2010

Depreciation of share premium account

Accrued dividend 2011

Change in estimate pensions

Profit for the year 2011

Equity as of 31 December 2011

NOTE 18

SHARE CAPITAL AND SHAREHOLDER MATTERS

 

See Note 13 to the Group accounts.

Declaration

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 2011, 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 2011 provides a true and fair view of the Group’s assets, liabilities, financial position, and profit 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 ASA

 

Oslo, 11 April 2012

 

Mimi K. Berdal		Hans Kristian Rød		Dag Andresen
Chairman		Deputy Chairman
Tove Elisabeth Pettersen		Kalle Strandberg		Roger André Hansen
Otto Rune Stokke		Bjørn Frogner
		CEO