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Annual Report 2012
Annual Report 2012
Goodtech showed growth and profitability in 2012. Strong cash flow from operations in 2012. The Group has won significant contracts throughout 2012 and after year end. Orders at year end stand at NOK 1.143 billion. Sales in 2012 were NOK 2,179.0 million, compared with NOK 2,007.81 in 2011, an increase of 8.5%. EBITDA in 2012 closed at NOK 76.7 million, compared with NOK 64.3 million in 2011, an increase of
19.2%. Results per share for 2012 are NOK 1.58 per share. The Board suggests a divided of NOK 1.50 per
share. The Board and management see market conditions, strategic position and Goodtech’s future prospects
as good.
The business and highlights in 2011 Goodtech ASA is a listed technology group that contributes to a sustainable society through upgrading infrastructure and energy systems. Our ambition is to provide solutions that improve efficiency and increase competitiveness in industry and meet the environmental challenges facing society. The Group is one of the leading electro and automation companies and the largest process assembly contractor in Scandinavia. Its head office is in Oslo, and the Group is also highly active in Sweden and Finland.
Goodtech’s ambition is to be Scandinavia’s leading supplier of solutions in the fields of electrics, automation, installation, industrial technology and the environment.
The Group’s business concept is to supply cost-effective projects and innovative technical solutions, and to use its own expertise to develop products and technology within the industrial, energy and environment segments.
Since 1 January 2012, Goodtech has been organised into five business areas: Projects & Services, Infra, Solutions, Environment and Products.
In 2011 and 2012, Goodtech has continued to concentrate on integration and improvement activities after the merger with E&I in the autumn of 2010. As of 1 January 2012, organisational changes have taken place and Infra has been set up as a separate business area covering railways and tunneling. Additionally, dedicated units have been set up for Strategic Marketing and Communication as well as for Method/Quality/HSE and Purchasing. These units will be working on long-term market positioning and on systematic improvements to achieve synergies.
Sales closed at NOK 2,179.0 million, compared with NOK 2,007.6 million in 2011, an increase of 8.5%. EBITDA closed at NOK 76.6 million, compared with NOK 64.3 million last year, an increase of 19.2%. Profits before tax (EBT) more than quadrupled and closed at NOK 51.2 million in 2012, compared to NOK 11.5 million in 2011.
Positive developments in 2012 prove that our improvement measures have paid off. This work will be continued. In 2012, we have moved our focus to continued profitable growth and initiated The Goodtech Way programme. This will form the basis of how we will continue to develop our methods, identity and position in the marketplace in the future.
The Projects & Services business area is showing increasing margins compared to last year, but a few projects had a negative impact on results for 2012. Activities in Sweden in the field of Projects & Services are demonstrating increasing margins. Margins for Solutions and Infra increased, but a few projects had a negative impact on results for 2012. Work is continuing to increase profitability, including by increasing the use of resources in Infra and upgrading project management routines and management systems to group standard in Solutions. The Environment and Products business areas demonstrated increased margins in 2012 compared to the previous year.
The Group has expensed NOK 161,000 in bad debts in 2012 compared to NOK 422,000 in 2011. In general, Goodtech experiences few losses due to having solvent customers.
The Group has seen a good influx of orders in 2012 with several large contracts in both Projects & Services and Infra. Orders in hand at year end amounted to NOK 1,143.1 million for the Group compared to NOK 1,016
million at the end of last year. Goodtech won a number of large, important contracts in early 2013, and market conditions for the future look generally positive, although the global outlook remains uncertain.
With the strategic position Goodtech has established, the Board and management view the future positively. As a basis for increased profitability and future growth, the company’s Board and management will concentrate on continuing improvement processes, structuring and strengthening of the company’s market profile. This will form the basis of a predictable dividend policy for the future.
The Projects & Services business area Within Projects & Services, Goodtech carries out all types of electrical and automation projects, from feasibility studies to operation and maintenance. The Infra business area was separated from Projects & Services and was established as a separate business area from 1 January 2012. Infra works on railways and tunneling projects. Comparative figures have thus been modified.
Sales for the year were NOK 1,424.0 compared to NOK 1,310.3 million in 2011, an increase of 8.7%. EBITDA for the year was NOK 44.6 million (3.1%), compared with NOK 37.5 million (2.9%) the year before.
This business area was very active in 2012 with several large on-going projects. The mining project in Kaunisvaara outside Pajala in Northern Sweden was one of Goodtech’s largest projects in 2012. Goodtech was one of the largest contractors on the Kaunisvaara project. With four large sub-projects within the overall project and with 260 people working on the project at its height in the autumn, we have, with the Kaunisvaara project, yet again shown that we are able to deliver large and complex project within a short timeframe. Production at the min started on time in November, and Goodtech’s part in the project is to all intents and purposes complete. Goodtech does not expect to experience losses as a result of Northland’s financial situation.
Projects & Services shows increasing margins compared with last year, but losses on a few projects have had a negative impact on results for 2012. The latest clarifications with Hydro regarding the completion of the Rjukan project were carried out in the second quarter, and the project was completed in June. This affected EBITDA by NOK 7.4 million in the second quarter.
This business area had 1,101 employees at the end of the year, of whom 924 were in Sweden.
Goodtech won several large, important contracts in 2012 and after year end. The order book at year end amounted to NOK 618.1 million, compared with NOK 735.1 million last year.
Market prospects for Goodtech are seen as good in Sweden, but the market is cautious. In Northern Sweden several billion are to be invested in the coming years in hydro power, wind power and mining. The need for expansion of the energy/power sector provides an increased market potential in both Sweden and Norway. Industry is somewhat more uncertain at international level.
At the end of 2012, we set up a marked/customer programme called Power by Goodtech which will showcase our overall capabilities in energy and power solutions to our energy customers.
The Infra business area At the end of 2011, Goodtech chose to separate the Group’s railway and tunneling projects into its own business area called Infra. This is an area in which the Group has seen major growth in recent years, and the Group possesses significant expertise in this kind of project. The Group continues to work to expand capacity, structure the business and position Goodtech in a market where we see that major investment has been planned for the coming years. The need for expansion of rail networks and increased demands for safety are strong drivers in this segment.
Sales for the year were NOK 204.1 compared to NOK 195.9 million in 2011, an increase of 4.1%. EBITDA for the year was NOK 4.9 million (2.4%), compared with NOK 8.1 million (4.1%) the year before. Underlying margins are increasing, but EBITDA in 2012 was affected by losses on a few projects and a great deal of work on tenders and calculation throughout the year. Work in continuing on enhancing the use of capacity and profitability.
Infra has won several large contracts in both 2012 and after year end. Infra has had a good influx of orders in 2012, in the order of NOK 400 million. Orders at the end of the year were NOK 291.9 million compared to NOK 92.4 million last year.
The contract for SEK 150 million for the Swedish Transport Administration related to the railway tunnel at Hallandsåsen in Scania after year end confirmed our market position and includes several of Goodtech’s skills areas in railways, electricity and tunnel installations.
At the end of the year, this business area had 54 employees in Sweden.
Many infrastructure projects are planned in Sweden and Norway. With the Swedish Transport Administration's multi-billion-kronor projects planned for coming years, the opportunities for increased activity and railway contracts are good. Market prospects for Infra are also seen as good in Norway where Goodtech will be investing much more.
The Solutions business area Production lines, machines and logistics solutions are supplied in this business area. Goodtech has its own technologies, with brands such as Portabulk®, MTH Warehouse and LECAB production lines as examples. Goodtech also supplies its own technology and solutions in the fields of robot cells and materials transport. Goodtech also exports selected products and technologies.
Sales in 2012 amounted to NOK 256.8 million, compared with NOK 233.9 million the year before, an increase of 9.8%. EBITDA for the year was NOK 8.4 million (3.3%), compared with NOK 6.4 million (2.7%) the year before.
Most units in Sweden are working well, but EBITDA was affected by losses on two projects in system and project deliveries. Solutions is still being built up and is currently working on major projects for the automotive industry. As a result, and an increased number of prospects, the organisation is being strengthened in order to be able to handle more and larger projects in future. Work in being carried out to upgrade project management routines and management systems to group standard in order to prepare for better project completion and use of resources.
The business area employed 145 at the end of the year, of whom 123 people are employed in Sweden.
Orders at year end amounted to NOK 71.7 million, compared with NOK 82.9 million last year. Prospects are good, and future influx of orders looks healthy.
The market outlook is positive, but somewhat uncertain in the long term. Activity levels and investment from existing customers is seen as slightly cautious in the short term. Major investments are planned among large Scandinavian and international customers in several of our industry segments. Increased interest from major pharmaceutical and food industry as well as an automotive industry that is doing well in Scandinavia could offer real potential for Solutions as we move forward.
The Environment business area This business area supplies environmental technology, water and sewage treatment systems and water purification solutions. Most of the activity takes place within the company Goodtech Environment AB, which is established in Åland (Finland) and Norway. Well known brands include Biovac®, Fluidtec® and KOBIX. In the Norwegian market, Goodtech is the leader in the mini treatment system market with Biovac®.
Sales in 2012 amounted to NOK 239.3 million, compared with NOK 219.5 million last year, an increase of 9%. EBITDA for the year was NOK 17.1 million (7.1%), compared with NOK 14.6 million (6.9%) the year before. Environment had its best year so far with increased sales and increased margins.
Orders in 2012 were at a record high, and more contracts were won after year end. Orders at year end amounted to NOK 147.8 million, compared with NOK 98.9 million last year.
This business area had 71 employees at year end, of whom 38 are in Åland.
There is still considerable public procurement activity in the water and wastewater sector, and the number of prospects and tenders is good. When it comes to biogas, Goodtech has benefited from rising levels of activity so far this year, and tendering activity is increasing.
The market outlook for Biovac® products looks good with several new geographical areas commencing public regulation of waste water from sparsely populated areas. The number of systems sold is 30% above last year’s level. Growth applies both to single systems and joint solutions. Aftersales have seen positive developments
this year and has won several contracts for the replacement of membrane elements in existing water treatment systems.
The Products business area Goodtech distributes automation, communications, electrical components and instrumentation. The company also represents well known manufacturers.
The internal transport business was sold effective on 31 December 2012, and is not included in the sales and EBITDA figures for this business area for 2012. Comparison figures for 2011 have been correspondingly reworked.
Sales for 2012 amounted to NOK 80.1 million, compared with NOK 70.4 million the year before, an increase of 13.8%. EBITDA for the year was NOK 8.8 million (10.9%), compared with NOK 6.2 million (8.8%) the year before.
Orders at year end were NOK 13.5 million compared to NOK 6.8 last year.
This business area had 22 employees at the end of the year.
This year, Goodtech Products has won important contracts for the delivery of products and know-how to the oil and food industries. Goodtech Products has likewise established itself in the market as a leading supplier of control systems for tunnel and traffic monitoring and is also well positioned in the environment and energy markets.
The market prospects are regarded as good in the area of oil and gas, traffic, water/environment and power industries. We continue to see increased potential in the public sector for communication and municipal technology. In traditional, land-based industry, market prospects are currently weaker with relatively low levels of investment in the short term.
Cash flow, investment, financing and liquidity The Group’s total capital at the end of the year was NOK 1,443.3 million. Of this, current assets represent NOK 750.9 million and fixed assets NOK 692.4 million. Equity as at 31 December was NOK 687.8 million, which gives an equity ratio of 47.7%, compared with 47.9% last year.
Goodtech prioritises good cash flow management and in 2012 focused intensely on measures to improve project cash flow, including improved billing procedures and following up on outstanding receivables. We have seen that this produces results, and the group has reported a positive operating cash flow in the third and fourth quarters of 2012. Cash flow will, of course, fluctuate from period to period, depending on the composition of projects and project invoicing dates. For the year as a whole, the Group’s operating cash flow is positive, standing at NOK 115.6 million compared with the negative NOK -89.5 million last year.
Cash flow from investment activities amounted to NOK -7.2 million, compared with NOK -24 million the year before. Cash flow from financing activities amounted to NOK -59.1 million, compared with NOK 25.5 million in 2011. Hence dividend paid for the Group amounted to NOK -26.0 million in 2012, compared with NOK 0 million in the previous year.
At the end of 2012 the Group’s cash position amounted to NOK 82.9 million (NOK 33.0 million in 2011). Total interest-bearing liabilities amounts NOK 139.0 million at the end of 2012, whereas NOK 25.8 million is short term (NOK 174.5 million in 2011 whereas NOK 26.6 million was short term). The Group has unused credits amounting to NOK 170 million at the end of the year. Net interest-bearing liabilities at the end of 2012 amounted to 8.2% compared to 21.2% the year before. This places the Group in a healthy position as regards financing and liabilities.
Given the Group’s positive development over the past few years, the Group has chosen to capitalise its deferred tax benefits at year end, in accordance with IFRS. Loss carry forwards amounted to approx. NOK 149.4 million as of 31 December 2012, of which approx. NOK 149.2 million related to Norway.
Shares and shareholders At the AGM in April 2012, a share dilution of 10:1 was adopted. This was implemented at the beginning of May. The company’s share capital now stands at 32,528,905 shares at NOK 2 for a total of 65,057,810.
EI & Industrimontage Tannergård AB was the company’s largest shareholder at year end, with 28.9% of shares. Holmen Industri Invest 1 AS is the second largest shareholder at 24.0%. This is followed by Skagen Vekst with 6.5%. Sedlak Holding AS, a company owned by Board member and Group Director for Technology and Business Development Veroslav Sedlak, owns 4.8% of shares. EIO AS, a company owned by Group President Vidar Låte, owns 4.6% of shares. About 700 employees were shareholders in Goodtech at year end.
All shareholders in Goodtech must have equal rights. The company has one share class, and each share carries one vote at AGMs. All shares are freely transferable, and no transferability limits for the company’s shares are set out in the company’s Articles of Association.
Please see also the section on shareholders in the annual report as published on the company’s website at www.goodtech.no.
Own shares During the year, Goodtech ASA purchased 80,699 of its own shares. In October, 99,280 own shares were sold to employees via the Group’s share saving scheme. At year end, Goodtech ASA held 35,144 of its own shares, equivalent to 0.11% of the company’s share capital.
Staff, working environment and safety HSE is a priority at all levels within the company. Activities must be planned and executed so that nobody is injured or becomes ill, the environment is not contaminated and property is not damaged.
HSE is a managerial responsibility which follows the company’s line organisation, complies with legislation and authority requirements and must be run in accordance with Goodtech’s guidelines in the BMS control system.
For Goodtech, the HSE includes the following:
Safety in terms of human life and health, including the working environment Safety in terms of the external environment Safety in terms of property and materials
A separate unit for MQS (Method, Quality & Safety) at Group level was established by the Group in early 2012. Procurement has since been added to the unit. The task of the MQS unit is to:
work to protect the environment and people, including safety in the workplace and constant improvements in respect of quality, the environment and the working environment
ensure that we have the expertise with which to run and manage major and/or complex projects safeguard and underpin the Group’s joint methods streamline and safeguard the Group’s project implementation manage and develop the Group’s business management system (BMS) with processes, structures,
procedures and templates.
MQS’ priority area for the future is the management of procedures and methods, and improvement in project-based activities, which account for about 75% of operations at Goodtech.
The Norwegian part of Projects & Services was ISO-certified in 2012. This means that the whole business area of Projects & Services and Infra, as well as parts of Solutions, is ISO-certified. Other units in the Group are projected to gain certification in 2014.
The Group had 1,411 employees at the end of 2012 compared to 1,371 employees at the end of 2011.
There have been 46 accidents in the workplace throughout the year, of which 7 caused the staff members involved to remain off work. An electrical accident involving serious injury was reported to Arbeidsmiljøverket in Sweden. In conjunction with its investment in power and energy, Goodtech has focused further on HSE and safety in the workplace. Absence due to illness within the Group amounted to 4.33% in 2012, compared to 3.26% in 2011.
The working environment is considered to be good, and Goodtech regularly carries out satisfaction surveys and staff appraisals, so any improvements and changes continuously are assessed.
The Group’s general guidelines demand that all employees must be treated with respect and have a workplace free from bullying and/or harassment. Goodtech’s objective is to provide a workplace where there is no discrimination on the grounds of race, gender or sexual orientation. The Group must not apply any form of discrimination in its recruitment and employment practice or in respect of access to training, promotion and remuneration. Goodtech’s general guidelines and rules of conduct are in line with the Discrimination Act: to promote equality, to ensure that staff have equal opportunities and rights, and to prevent discrimination due to ethnicity, national origin, descent, skin colour, language, religion or faith.
In total, the proportion of women in the Group is 8.6% (2011: 8.6%). These women work mainly in finance, administration and marketing. The Group’s goal is to be a workplace offering full equality between men and women, and it is also working continuously to encourage more female engineers to apply for vacant positions. At year end, three of the seven Board members voted for by shareholders were women.
In 2012, the Group also implemented its share saving scheme for the Group’s employees, and participation has been good. Around half of the Group’s employees are shareholders in Goodtech ASA.
Remuneration to the Group President and the company’s Board is specified in a note to the accounts. Goodtech had no bonus or option schemes in place for employees in 2012. Some of the Group’s subsidiaries have individual limited sales bonus agreements and management bonus agreements in place.
Environmental reporting Goodtech is making positive contributions to the development of society by supplying cost-effective projects and innovative technology solutions. At the same time, the company consumes raw materials and causes emissions to air from its transport activities. The Group has identified and selected a number of significant environmental aspects and objectives which it will continuously be working to improve:
We will minimise transport by means of planning, IT/telecommunications, coordinated procurement, pooling, use of public transport and eco-friendly cars, and by encouraging drivers to drive economically
We will select energy-efficient solutions which will reduce customers’ energy consumption, and it is to be hoped that our solutions and installations will be used for decades
We will select health-friendly and eco-friendly products and materials We will dispose of our waste as effectively as possible given local conditions, and attempt to reuse or
recycle most of what we use We will minimise the use of chemical products and select such products while taking health and the
environment into account We will minimise the risk of environmental accidents in the form of fire or chemical leaks, but also have
contingency measures in place to deal with any accidents
Risk The Board is concerned to ensure the systematic and deliberate management of risk in all parts of the business and considers this to be a prerequisite for long term value creation for shareholders and employees. Goodtech is mainly exposed to risk factors connected with financial conditions, market conditions, operations and consequences of changes to external political and economic conditions. Risk assessments are regularly carried out to focus on and assess the most significant risks.
Goodtech operates in several European countries. Its contracts are primarily in the currencies NOK, SEK, EUR and USD. Currency fluctuations may mean adjusted income in NOK for foreign projects. A significant amount of Goodtech business takes place in Sweden, and so the company is exposed in SEK. The Group’s policy is to undertake purchases and sales for individual projects in the same currency, which reduces the risks associated with currency fluctuation. The Group has also set up Group account systems in several currencies, which helps to level out currency risks. During the year the Group did not carry out any significant hedging transactions with any credit institutions as regards currency.
A large part of Goodtech’s operations relates to the implementation of individual projects. The complexity, size, duration and risks of these projects vary. To achieve good results, it is therefore vital that project risk is analysed at the tendering stage and managed in a systematic and professional manner during the implementation phase. The Group’s future operations will depend on the Group’s employees having the qualities and the skills required to ensure that deliveries are made in accordance with contracts entered into. It will be vital in this respect to meet customers’ future demands for service, technology and efficiency. The risk is reduced by the fact that the Group’s contracts have a large spread in terms of both numbers and size, and no contracts are large and
dominant in relation to sales. There is continued pressure in the labour market, especially in project management. This may affect the Group’s access to applicable skills. There is a high level of focus on these risks, which are being weighed up through the systematic work now being initiated and managed by the MQS department, as described above. The Group has implemented the Goodtech Academy programme for training of new and existing project managers. The Goodtech Business Workshop is also being held at all offices to focus on improvement of results and enhanced use of systems, procedures and business operations. Additional training programmes will be organised in more areas. Increased skills and training are important areas that the company needs to concentrate on to achieve its objectives of growth and profitability.
In conjunction with its investment in power and energy, Goodtech has further strengthened its focus on HSE and safety in the workplace.
Goodtech has customers in many sectors, which makes the group less exposed to economic fluctuations.
The risk of our partners being financially unable to meet their obligations is regarded as moderate, and historically the Group has had only limited losses on receivables. Goodtech has set up clear guidelines and criteria for evaluating credit risk. The Group also has a large spread of customers in terms of both numbers and size, and its customers are mainly well established companies and public institutions. This reduces vulnerability to losses on individual customers.
The Board deems the liquidity of the Group to be good. The Group strategy is to have sufficient cash, cash equivalents and/or credit options to be able to finance operations and investments in accordance with the Group’s strategic plan. Profit liquidity is mainly kept in Norwegian kroner. Interest-bearing debt is mainly taken out in NOK or SEK. To reduce Goodtech’s exposure to changes in interest rate levels, an agreement has been entered into concerning fixed interest rates on the company’s long-term loans for the period 2013-2015. Otherwise the Group’s loans and borrowing facilities have variable interest rates.
Regular risk assessments are performed where the most important risks are identified and evaluated.
Research and development Goodtech is constantly working on technology development projects of all sizes. Much of its development is linked with solutions that will be supplied to customers. We have brought the more solution-oriented technologies together under Solutions provide a good, natural basis for investment in technology and product development.
The development of technology for energy recovery in the field of heat intensive production will continue. The costs linked with this development will be capitalised.
Corporate governance The Board of Directors of Goodtech has produced principles for corporate governance which will safeguard the interests of the company’s owners, employees and other stakeholders. These include a description of the division of responsibilities between shareholders, the Board and the general management.
The purpose of the company’s principles for corporate governance is to create greater predictability and transparency, and thereby to reduce uncertainty linked with the business. These principles will support the targets which the company is aiming to attain. The Board is seeking to maintain corporate governance guidelines which are compliant with the Norwegian recommendation for corporate governance.
The Board has reviewed a revised version of the Norwegian recommendation for corporate governance, published on 23 October 2012, and taken this into account when reviewing the Group’s procedures and descriptions of the same. Corporate governance principles adopted by the Board on 21 March 2013 are discussed in a separate section in the annual report.
Report of the annual accounts The Group presents its annual accounts in accordance with International Financial Reporting Standards (IFRS). The annual accounts for the parent company Goodtech ASA are presented in compliance with the Norwegian Accounting Act and Norwegian accounting practice (NGAAP). The Board is of the opinion that the annual accounts provide a true picture of the parent company’s and the Group’s assets and liabilities, financial position and profits. In compliance with Section 3-3a of the Norwegian Accounting Act and Good Accounting Practice
(GRS), it is confirmed that the conditions are in place for the continued operation of the company. The Group is in a healthy economic and financial position.
Group and parent company profits The Goodtech Group showed profits after tax for continuing operations of NOK 51.3 million for 2012, and profits for the year of NOK 54.5 million. Profits per share from continuing operations are NOK 1.58 per share.
The parent company Goodtech ASA had a surplus of NOK 28.9 million in 2012. The Board proposes a dividend of NOK 1.50 per share for the 2012 financial year, totaling NOK 48.7 million. It is proposed that dividends beyond the profit for the year be covered by means of a transfer of NOK 19.8 million from other equity.
At year end, Goodtech ASA’s (the parent company’s) equity after the proposed dividend for the year amounted to NOK 603.7 million, of which the company’s distributable reserves amounted to NOK 461.9 million.
Events after year end Goodtech has won a number of important contracts in 2013, including a project for Trafikverket associated with the railway tunnel in Hallandsåsen in Sweden. This project includes several of Goodtech’s skills areas in railways, electricity and tunnel installations.
In January, through its 50% stake in GAQ Contracting AB, Goodtech won a new contract from MaxLab IV. The contract price for GAQ Contracting is approx. SEK 170 million.
In January, Nordvästra Skånes Renhållnings AB chose Goodtech as its supplier for the expansion of its biogas plant. The contract is worth SEK 37 million and consolidates Goodtech’s position in biogas in the Scandinavian market.
At year end, Goodtech ASA had acquired 80,000 new shares, and now owns 115,144 of its own shares, equivalent to 0.35%.
Future development of the Group The good developments of 2012 confirm that our improvement measures in the CORE programme 2011/2012 are showing results. We will continue to work on measures to improve profit margins even further.
In 2012, we shifted our focus to continued profitable growth and initiated the strategic programme called The Goodtech Way. This forms the basis for how we will continue to develop our methods, our position in the market and our identity.
The market prospects for Goodtech are deemed to be good. Nevertheless, the global outlook is considered to be more uncertain. With the strategic position that Goodtech has established, the Board and management view Goodtech’s future prospects as good.
As a basis for future growth, the company’s Board and management will continue to work on integration processes, structuring and strengthening of the company’s profitability. This will form the basis of a predictable dividends policy for the future.
Oslo, 21 March 2013
Stig Grimsgaard Andersen Chairman
Selma Kveim Board Member
Stig Martin Board Member
Veroslav Sedlak Board Member
Karl-Erik Staubo Board Member
Anne Ma Sødahl Wessel Board Member
Tine Gottlob Wollebekk Board Member
Osvaldo Chamorro Board Member
Göran Rönnbäck Board Member
Håvard Kristiansen Board Member
Vidar Låte CEO
Goodtech Group Profit and Loss Account
1 January - 31 December (NOK 1.000) Note 2012 2011
Operating income 2 2 179 002 2 007 645
Product expenses 2, 4 -1 030 026 -926 437
Salary expenses 4, 5, 23 -821 407 -770 179
Other operating expenses 4 -250 908 -246 715Operating profit before impairment changes and non-recurring items 76 661 64 315
Depreciation 9,11 -22 854 -33 510
Impairment changes and non-recurring items 10 0 -9 923
Operating profit 53 808 20 882
Financial income 6 5 434 9 244
Financial expenses 6 -9 074 -18 598
Net financial expenses -3 639 -9 354
Contribution from associated companbies 20 1 047 0
Profit before tax 51 215 11 527
Taxes 7 -76 -7 080
Profit after tax from continuing operations 51 291 18 608
Net profit/loss for sold operations 3 3 159 -923
Profit for the year 54 450 17 685
Attributable to:
Majority interests 54 428 17 642
Minority interests 22 43
54 450 17 685
Profit per share from continuing operations (figures in NOK) 8 1,58 0,57
Deluted profit per share (figures in NOK) 8 1,58 0,57
Profit per share from sold operations (figures in NOK) 8 0,10 -0,03
Comprehensive Income
(NOK 1.000) Note 2012 2011
Profit for the period 54 450 17 685
Translation differences -8 074 -701
Estimated deviation pensions, net after tax 18 970 -126
Effect of hedging, net after tax 22 -611 -423
Comprehensive income after tax -7 715 -1 250
Comprehensive income 46 735 16 435
Total comprehensive income attributable to:
Majority interests 54 428 17 642
Minority interests 22 43
Sum 54 450 17 685
Note 1 - 28 follow the annual accounts and form an integral part of these.
Balance Sheet as at 31 December (NOK 1.000) Note 2012 2011
ASSETS
Fixed assets
Fixed assets 9 44 788 50 569
Intangible assets 11 611 024 633 215
Investment in associated company 20 1 744 707
Deferred tax assets 7 34 735 27 142
Other fixed assets 169 1 521
Total fixed assets 692 460 713 154
Current assets
Inventory 12 29 180 22 859
Account recievables 13 423 695 374 094
Other short term receivables 14 215 132 249 887
Cash and cash equivalents 15 82 857 32 973
Total current assets 750 864 679 813
TOTAL ASSETS 1 443 324 1 392 968
EQUITY AND LIABILITIES Note 2012 2011
Equity
Contributed equity
Share capital 16 65 058 65 058
Own shares 16 -70 -107
Premium fund 16 35 318 35 440
Other contributed equity 16 500 000 500 000
Total contributed equity 600 305 600 390
Retained eqrnings
Other equity 86 908 66 014
Total retained earnings 86 908 66 014
Minority interests 602 580
Total equity 687 815 666 984
Liabilities
Long term liabilities
Loans 17 113 197 147 889
Pension obligations 18 1 621 3 251
Deferred tax 7 9 298 10 963
Provisions 19 0 1 303
Total long term liabilities 124 117 163 406
Short term liabilities
Loans and credits 17 25 803 26 648
Trade accoutns payable and other short term liabilities 21 594 804 528 922
Tax payable 7 3 959 1 548
Provisions 19 6 825 5 460
Total short term liabilities 631 392 562 578
Total liabilities 755 509 725 984
TOTAL EQUITY AND LIABILITIES 1 443 324 1 392 968
Note 1 - 28 follow the annual accounts and form an integral part of these
Oslo, 21 March 2013
Stig Grimsgaard Andersen Chairman
Selma Kveim Board member
Stig Martin Board member
Veroslav Sedlak Board member
Karl-Erik Staubo Board member
Anne Ma Sødahl Wessel Board member
Tine Gottlob Wollebekk Board member
Osvaldo Chamorro Board member
Göran Rönnbäck Board member
Håvard Kristiansen Board member
Vidar Låte CEO
Statement of Changes in Equity Note Share Own Premium Other Other Total Minority Total
(NOK 1.000) capital shares fund contrib equity equity majority interest equity
Equity as at 1.1.2011 65 058 -181 535 440 0 49 441 649 758 835 650 592
Profit for the period 17 642 17 642 43 17 685
Comprehensive income -1 250 -1 250 -1 250
Acquisition of minority 298 298 -298 0Decided not registered capital decrease *) 16 -500 000 500 000 0 0
Other changes 73 -117 -44 -44
Equity as at 31.12.2011 65 058 -107 35 440 500 000 66 014 666 404 580 666 984
Equity as at 1.1.2012 65 058 -107 35 440 500 000 66 014 666 404 580 666 984
Profit for the period 54 428 54 428 22 54 450
Comprehensive income -7 715 -7 715 -7 715
Divident (**) -25 980 -25 980 -25 980Purchase of own shares/ redemption small shareholders 37 161 198 198Share capital increase on share consolitdation -45 -45 -45
Other changes -76 -76 -76
Equity as at 31.12.2012 65 058 -70 35 318 500 000 86 908 687 213 602 687 815
*) Reduction of share premium account with trensfer to other equity was registered with the Norwegian Company register on 16 March 2012. **) Dividens of NOK 0.08 per share, adopted by the AGM on 25 April 2012. Amount per share is prior to share delution in May 2012.
Note 1 - 28 follow the annual accounts and form an integral part of these.
Cash Flow Statement (NOK 1.000) Noter 2012 2011
Cash flow from operating activities
Annual profit 54 450 17 685
Adjusted for
- Taxes 7 -76 -7 080
- Depreciations and write downs 9,11 22 854 33 510
- Net change in provisions for obligations 19 5 294 -2 434
- Pensions 18 -774 -279
- Capital income *) 6 -1 498 -3 378
- Interest costs *) 6 6 473 10 611
- Other changes 3 587 1 223
Change in working capital
- Inventory -6 527 5 216
- Accounts receivables and other receivables -21 045 -217 274
- Trade accounts payable and other short term liabilities 61 646 85 890
Cash flow from operating activities 124 383 -76 311
Interest paid *) 6 -6 473 -10 611
Tax paid -2 317 -2 581
Net cash flow from operating activities 115 593 -89 503
Cash flow from investment activities
Payment for purchase of fixed assets 9 -7 350 -16 345
Receipts from sales of fixed assets 540 210
Payment for purchase of intangible assets 11 -981 -8 932
Payment for purchase of subsidiary exclusive liquidity 3 - 229
Financial investments -928 -2 683
Interest received *) 6 1 498 3 378
Net cash flow from investment activities -7 221 -24 142
Cash flow from financial activities
Payment of dividend -25 980 -
Receipt from sale of own shares 1 020 1 428
Payment for purchase of own shares -1 074 -1 969
Borrowing - loan 17 - 69 885
Change in short term loan and credits 17 -844 -68 064
Repayment of loan 17 -32 263 -26 810
Net cash flow from financial activities -59 142 -25 530
Net change in cash and cash equivalents 49 230 -139 174
Balance of cash and cash equivalents as at 01.01 15 32 973 172 332
Effect of exchange rate fluctations on cash and cash equivalents 654 -185
Balance of cash and cash equivalents as at 31.12 15 82 857 32 973
*) The comparison figures for 2011 contain a reclassification of agio (MNOK 5.9) from investment activities to cash flow from operations. Losses for 2011 (MNOK 8.0) have been reclassified between items with operational activities..
Note 1 - 28 follow the annual accounts and form an integral part of these.
Notes Goodtech Group
Note 1 Accounting principles Goodtech ASA is a public limited company registered in Norway. The company’s headquarters are located at Per Krohgs vei 4, 1065 Oslo, Norway. Goodtech is a technology group that contributes to the development of society through upgrading infrastructure and energy systems, improving efficiency and increasing competitiveness within the industry and through meeting society’s environmental challenges. The company is the leading automation company and the largest process assembly contractor in the Nordic countries. The company is listed on the Oslo Stock Exchange, has a turnover of around NOK 2.2 billion and employs 1,400 people at around 40 locations in Norway, Sweden and Finland. The company is organised into five business areas; Projects & Services, Infra, Solutions, Environmnet and Products. The account was approved by the Board at 21 March 2013. 1.1 Main policy Goodtech presents its accounts in compliance with the Norwegian Accounting Act and International Financial Reporting Standards (IFRS) as determined by the EU with comparison figures provided for 20011. New accounting standards adopted during the year are discussed in Point 1.31. New IFRSes and interpretations that have been published, but were not mandatory as of 31.12.2012 are discussed in Point 1.32. The Group accounts are based on the principles of historic cost accounts with the exception of:
Financial assets and derivatives at fair value over profits
The Group accounts have been prepared with uniform accounting principles for similar transactions and events under otherwise similar conditions. 1.2 Functional currency and reporting currency The Group presents its accounts in NOK. This is also the parent company’s functional currency. Subsidiaries with other functional currencies are converted to the day rate for balance items and the profit and loss account at average rates for the period. The exchange rate difference is allocated to other earnings and costs. On sale of majority shareholdings, major shareholdings or joint control the accumulated exchange rate differences associated with the investment are recognised in the profit and loss account. 1.3 Consolidation principles Subsidiaries The Group accounts include Goodtech ASA and companies of which Goodtech ASA has control, cf. Notes 25 and 26. Control can also be achieved where the Group owns less than 50% of the voting shares in the company by agreement or by the Group being in a position to exercise actual control of the company. Minority interests are included in the Group’s equity. The acquisition method is used for recognising company mergers in the profit and loss account. Companies which are bought or sold during the course of the year are included in the group accounts from the date on which control is achieved until the date on which it ceases. Investments in associated companies Associated companies are units in which the Group has significant influence, but not control (usually an ownership share of between 20% and 50%) of financial and operational management. The Group accounts include the Group’s share of profits from associated companies entered by equity method from the time significant control was achieved and until such control ceases. Investments in companies under joint control The Group accounts include joint ventures using the gross method from the date that joint control commences until the joint control ceases. The gross method means that the proportion of joint ventures included line by line for assets, liabilities, income and expenses. Joint ventures are entities over which the Group has joint control, established by contractual agreement between the parties. A joint venture involves the establishment of a separate entity in which each party has an interest and where there is joint control. Elimination of transactions during consolidation Internal group transactions and intra group balances, including internal earnings and unrealised gains and losses are eliminated. Unrealised earnings in respect of transactions with associated companies are eliminated with the group’s share
of the company. Unrealised losses are eliminated in the same way, but only to the extent that there are indications of depreciation of value of assets that are sold internally. 1.4 Cash and cash equivalents Cash and cash equivalents include cash, bank deposits, other short-term, easily transferable investments with a maximum of three months’ original term and withdrawals on bank overdrafts. Bank overdrafts are included in the loans balance under short-term debt. In the cash flow statement, the bank overdraft has been subtracted from the balance of cash and cash equivalents. 1.5 Receivables from customers Receivables from customers are entered at acquisition price minus loss from depreciation. 1.6 Projects in progress and advance payments from customers Production which has been carried out, but not invoiced is entered at acquisition price plus share of profit earned on the balance date, see point 1.21 for a description of policies for recognition of income. Acquisition price includes costs directly related to specific projects and a share of fixed and variable indirect costs involved in the Group’s contract activities based on either standard or current capacity utilisation – whichever is highest. In determining such costs, expenses for future activities on a contract have not been included. These expenses are shown as goods, advance payment or other turnover assets depending on cost type. The balance shows production that has been carried out, but not invoiced minus provisions for anticipated loss and advance payments under "Other short-term receivables". In cases where advance payment exceeds the production that has been carried out the advance payment is recognised under "Trade accounts payable and other short term liabilities". 1.7 Inventory Inventory is recognised in the profit and loss account at the lower of either acquisition price or net sales price. Net sales price is an estimated sales price for ordinary operations minus estimated costs for completion, marketing and distribution. Acquisition cost is allocated by use of the FIFO method and includes expenses accrued when acquiring the goods and the costs of bringing the goods to their current condition and location. Proprietary goods include variable and fixed costs which can be allocated based on either standard or current capacity utilisation – whichever is highest. 1.8 Financial derivatives and hedging instruments Separate derivatives are valued at fair value. The Group uses interest rate swap contracts as hedging instruments for hedging cash flows related to long-term financing. Cash flow hedging The effective element of the change in the fair value of derivatives which are earmarked and qualify as hedging instruments in cash flow hedging are recognised in other comprehensive income. Hedging profits or losses which are recognised in other comprehensive income and accumulated in equity are reclassified for the income statement in the period in which the hedged item affects the income statement. Profits or losses which are linked to the effective element of the interest rate swap contracts which secure loans with floating interest rates are recognised under "Financial expenses". When a hedging instrument expires or is sold, or when a hedge no longer meets to criteria for hedge accounting, any cumulative gain or loss is recognised in other comprehensive income in equity and is reclassified as profit at the same time as the hedged transaction is recognised. If a hedged transaction is no longer expected to take place, the carrying amount in equity is immediately transferred to the income statement under "Net other (losses) gains". 1.9 Financial assets The Group classifies financial assets in the following categories: at fair value included in profits, loans and debts and assets for sale. The classification depends on what is intended with the asset. Management classifies financial assets on acquisition and carries out a new assessment of this classification on each reporting date. During the reporting period the Group only has financial assets classified as ‘loans and debts’. Loans and debts are non-derivative financial assets with fixed payments which are not transferable in an active market. These are classified as current assets unless they fall due more than 12 months after the balance date. If so, they are classified as fixed assets. Loans and debts are classified as ‘trade debtors, other short-term debts and other fixed assets’ in the balance and are entered at amortised cost. 1.10 Write down of financial assets Financial assets valued at amortised cost are written down when it is probable based on objective evidence that the instrument’s cash flow has been affected negatively by one or more events occurring after the initial recognition of the instrument in the profit and loss account. The write-down amount is recognised in the profit and loss account. If the cause of the depreciation later ceases and the cessation can be objectively associated with an event taking place after the inclusion of the depreciation, the previous write-down is reversed. This reversal must not result in the balance value of the financial
asset exceeding the amount of what the depreciated cost would have been, if the depreciation had not been included at the time when the write-down was reversed. 1.11 Tangible fixed assets Fixed assets are measured at acquisition cost minus accumulated depreciation andwrite-down. When assets are sold or disposed of, the value recognised in the balance sheet is deducted and any profit or loss recognised in the profit and loss account. Acquisition price for fixed assets is the purchase price including duties/taxes and costs directly associated with preparing the fixed assets for use. Costs after the fixed asset has been taken into use, such as continuous maintenance, are recognised in the profit and loss account, while other costs that are expected to provide future financial benefit are recognised in the balance sheet. Depreciation is calculated on a straight-line basis over estimated useful life: Buildings 20-30 years Machinery, equipment etc. 3-10 years Depreciation and amortisation period, method and retirement value are assessed annually. 1.12 Lease agreements Financial lease agreements Lease agreements for which the Group assumes the main risk and profit involved in ownership of the asset are financial lease agreements At the beginning of the lease period, financial lease agreements are recognised at an amount corresponding to the lower of either fair value or the present value of the minimum lease minus the accumulated depreciation and write-down. For calculation of the lease agreement’s present value the implicit interest cost in the lease agreement is used if it is possible to calculate this. If not, the company’s marginal borrowing interest is used. Direct costs associated with establishing the lease agreement are included in the cost of the asset. The same depreciation time is used as for the group’s other depreciable assets. If there is no reasonable certainty that the group will take over ownership at the end of the lease period, the asset depreciates over the shortest of the periods for the duration of the lease agreement or for the useful life of the assets. The Group has no financial leasing agreements. Operational lease agreements Lease agreements where the main risk and profit associated with ownership of the asset are not transferred to the lessee are classified as operational lease agreements. Lease payments are classified as operating expenses and are recognised on a straight-line basis over the contract period. 1.13 Fixed assets held for sale and disposals Fixed assets and groups of fixed assets and debt are classified as for sale if their book value will be recovered through a sales transaction instead of through continued use. This is deemed to be the case when a sale is very probable and the fixed asset (or group of fixed assets and debt) is available for immediate sale in its present form. Management must have committed itself to a sale and the sale must be expected to be completed within a year from the date of classification. Fixed assets and groups of fixed assets and debt classified as for sale are measured at the lowest value of previously booked value and fair value minus sales costs. 1.14 Intangible assets Intangible assets acquired separately are recognised on the balance sheet at cost. The cost of intangible assets obtained through acquisitions are entered on the balance sheet at fair value in the consolidated opening balance. Intangible assets entered on the balance sheet are entered in the accounts at cost less any depreciation or write down. Internally generated intangible assets, with the exception of recognised development costs, are not entered on the balance sheet but are entered as costs on an ongoing basis. Useful lifetime is either predetermined or non-predetermined. Intangible assets with a predetermined useful life are depreciated over this period and tested for write down if so indicated. Depreciation method and period are assessed at least annually. Changes in depreciation method and or period are treated as estimate changes. Intangible assets with an indefinite life are tested annually for depreciation, see Point1.16. Patents and licences Patents and licences are recognised in the balance sheet at acquisition cost minus accumulated depreciation and writedown. Depreciation is calculated on a straight-line basis over estimated useful life, which is varying from 5-10 years. Depreciation period and method are reviewed annually. Research and development Expenses associated with research activities are recognised in the profit and loss account when they arise. Development expenses are recognised in the profit and loss account when it is probable that the project will produce future financial
benefit. The prerequisite for being recognised in the profit and loss accounts is that the project is technically and commercially viable, that the Group has sufficient resources to complete the project and that expenses can be reliably measured. Other development expenses are recognised in the profit and loss account when they arise. Development expenses which have previously been recognised are not recognised in the balance sheet in subsequent periods. Expenses which are recognised in the balance sheet include material costs, direct salary expenses and other directly attributable costs. Development expenses recognised in the balance sheet are entered as acquisition costs minus accumulated depreciation and write-down. Development costs depreciate on a straight-line basis over the asset’s estimated useful life. Customer contracts On purchase of company, customer contracts which fulfil the definition of intangible assets contained in IAS 38 are separated and included individually. Income-based models are used as a basis for determination of fair value. Customer agreements depreciate on a straight-line basis over the contract period. 1.15 Company merger and goodwill Mergers are recognised according to the acquisition method. For a description of how minority interests are measured see Note 1.20. Transaction costs are recognised as they are incurred. The cost of an acquisition is measured as the fair value of the assets transferred, liabilities incurred or assumed, and equity instruments issued. The cost includes the fair value of any asset or liability resulting from a contingent consideration arrangement. Expenses related to the merger are recognised as they are incurred. Identifiable assets and liabilities are recognised at fair value on the acquisition date. Minority interests in the acquired entity are measured from time to time either at fair value or at their share of the acquiree's net assets. When a company is acquired in stages, the stake from previous purchases is reassessed at fair value at the time of the recognition of the value change. Contingent consideration is measured at fair value on the acquisition date. The contingent consideration is classified as a liability under IAS 39 and is recognised at fair value in subsequent periods of change in value in the profit and loss account. If the sum of the consideration, the fair value of previous ownership interests and any fair value of minority interests exceed the fair value of identifiable net assets acquired, the difference is recorded as goodwill. If the total is less than the company's net assets, the difference is recognised. Goodwill is not amortised, but is tested for impairment at least annually, cf. Point 1.16. The part of the fair value of the equity that exceeds the consideration (negative goodwill) is recognised immediately upon acquisition. 1.16 Decrease in value of non-financial assets Fixed assets and intangible assets with undetermined useful life do not depreciate and are evaluated annually for impairment. Fixed assets and intangible assets that depreciate are assessed for impairment when there are indicators that future earnings cannot justify the value recognised in the balance sheet. A write-down is recognised in the profit and loss account by the difference between the value recognised in the balance sheet and the recoverable amount. The recoverable amount is the higher of fair value with deductions for sales costs and utility value. When assessing decrease in value, fixed assets are grouped at the lowest level where it is possible to divide out independent cash flows (cash flow generating units). At each reporting date, the possibility of reversing previous write downs of non-financial assets (except goodwill) is assessed. For assessment of the need for depreciation of goodwill, goodwill is allocated to the current cash-generating units. The allocation of goodwill is to the cash-generating units or groups of cash-generating units which are expected to gain from the purchase. 1.17 Loans Loans are recognised in the profit and loss account at fair value when payment of the loan occurs, with deduction for tansaction costs. In subsequent periods, loans are entered at amortised cost calculated using effective interest rate. The difference between the loan amount paid out (less transaction costs) and the redemption value is recognised in the profit and loss account over the term of the loan. Loans are classified as short-term debt unless an unconditional right exists to defer payment of the debt for more than 12 months from the balance sheet date. 1.18 Provisions A provision is recognised in the profit and loss account when the Group has an obligation (legal or self-imposed) as a result of an earlier event, there is a strong probability that a financial settlement will take place and the size of the obligation can be reliably measured. If the effect is significant, the provision is calculated by discounting anticipated future cash flows with a discount rate before tax which reflects current market conditions and risk applicable to the obligation.
A provision for guarantees is included when the underlying products or services are sold. The provision is based on historical information about guarantees and a weighting of possible outcomes according to the probability of their occurrence. Restructuring provisions are included when the group has approved a detailed and formal restructuring plan and the restructuring has already started or has been made public. Provision for loss making contracts is entered when the group’s anticipated income from a contract is lower than the unavoidable costs involved in discharging obligations under the contract. 1.19 Equity Expenses for equity transactions Transaction costs directly associated with equity transactions are recognised in the profit and loss account allocated directly to the equity after deduction of tax. Translation differences Translation differences arise in conjunction with currency differences on consolidation of foreign units. For disposal of foreign units the accumulated translation difference associated with the unit is reversed and recognised in the profit and loss account for the same period as the profit or loss of the disposal is recognised in the profit and loss account. 1.20 Minority interests Minority interests include the Group accounts constitute the minority interest's booked value of equity. The subsidiary's income and the components of other income and costs are attributed to the owners of the parent company and minority interests. Results are attributed to the parent company owners and to the minority interests even if this results in the minority interest having a deficit. 1.21 Principles for recognition as income Income is recognised in the profit and loss account when it is probable that transactions will generate future financial benefit which will accrue to the group and the size of the amount can be reliably estimated. Sales income is presented after deduction of value added tax and discounts. Sale of goods Income from the sale of goods is recognised when delivery has taken place and the significant risks and rewards of ownership have been transferred to the buyer, and Goodtech no longer has control or administrative influence over the goods. Construction contracts Income from long-term construction projects is recognised in the profit and loss account as the project progresses when the result of the transaction can be reliably estimated. Progress is measured using one of two methods: accrued expenses on the balance date compared to total estimated project cost or hours worked compared to total estimated hours. The choice of method depends on the type of project; hourly or product-based. When the result of the transaction cannot be reliably estimated, only income corresponding to accrued project costs will be recognised as income. In the period in which a project is identified as giving a negative result, the estimated loss on the contract will be recognised in the profit and loss account in its entirety. Services Income from the sale of services is recognised in the profit and loss account as the project progresses. Progress is measured in accrued hours compared to total estimated hours. Some projects include the supply of both services and products. Such projects are recognised in the profit and loss account according to the principles for construction contracts. In the period in which a project is identified as giving a negative result, the estimated loss on the contract will be recognised in the profit and loss account in its entirety. Royalty income is recognised in the profit and loss account when it is earned in accordance with the provisions of the underlying agreement. Interest earnings are recognised in the profit and loss account based on the effective rate as they are earned. Dividends are recognised when the shareholders' right to receive dividends has been determined by the AGM. 1.22 Foreign currency Foreign exchange transactions Foreign exchange transactions are calculated at the exchange rate prevailing at the time of the transaction. Monetary items in foreign currency are converted to Norwegian kroner by using the rate of exchange on the balance date. Non-monetary items which are measured at historical exchange rates expressed in foreign currency are converted to Norwegian kroner by using the exchange rate at the time of transaction. Non-monetary items which are measured at fair value expressed in foreign currency are converted to the exchange rate determined at the time of the balance. Foreign currency fluctuations are recognised in the profit and loss account continuously over the accounting period.
The following exchange rates are used: SEK EUR Exchange rate 1.1.2012 87,01 7,75 Exchange rate 31.12.2012 85,49 7,34 Average exchange rate 2012 85,89 7,48 Activities abroad Assets and liabilities in foreign companies including goodwill and fair value adjustments which appear on consolidation are converted to Norwegian kroner by using the exchange rate on the balance date. Income and expenses in foreign enterprises are converted to Norwegian kroner by using the average exchange rate. Average axchange rate is calculated quarterly. Exchange rate differentials are allocated to equity. Translation differences in equity are recognised in the profit and loss account on disposal of the foreign enterprise. 1.23 Employee contributions Pension schemes The group has various pension schemes. The pension schemes are generally financed through disbursements to insurance companies. The group has both contribution based and defined benefit schemes. In accordance with the law on mandatory company pensions, all group employees in Norway participate in pension schemes that meet the requirements of the law. Defined-benefit pension schemes Net obligation is calculated based on the present value of the future pension benefits which the employee has accrued on the date of balance, less the net realisable value of pensions assets. The discount rate is derived on the basis of on the interest rate on corporate bonds, and is adapted to the maturity of the liability. The calculation is based on a linear earnings model and includes employer’s contributions for net actually underfinanced schemes. Introduction of a new defined-benefit scheme or improvement of an existing one involves changes in pension obligations. This is entered as cost on a straight line basis until the effect of the change is taken up. The introduction of new schemes or changes to existing ones that occur with a retroactive effect, so that the employees have immediately earned a paid-up pension (or change in paid-up pension) are entered immediately. Gains or losses in respect of restriction or conclusion of pension schemes are entered as they occur. Actuary profit and loss are continuously allocated directly to the equity. Contribution based pension schemes Most of the group’s subsidiaries have contribution based pension schemes. The group makes a fixed payment to an insurance company and has no legal or other obligation to make any further payment. Pension premiums are entered as costs as they occur. Profit share and bonus schemes The Group recognises a provision in the profit and loss account where it has contractual obligations or where a previous practice has created a self-imposed obligation. 1.24 Loan costs Loan costs that are directly attributable to the acquisition or production of a qualifying asset are capitalised as part of the acquisition cost of the asset. 1.25 Public grants Public grants are recognised in the profit and loss account when there is reasonable certainty that the company will fulfil the conditions associated with the grant and that the grant will be received. Recognition of operational grants is calculated systematically over the grant period. Grants are recognised as deductions from the cost that the grant is intended to cover. Investment grants are recognised in the balance sheet and calculated systematically over the useful life of the asset. Investment grants are calculated by deducting the grant from the value of the asset recognised in the profit and loss account. 1.26 Income tax Tax costs consist of payable tax and changes in deferred tax. Deferred tax/tax advantage is calculated on all differences between accounting and tax values of assets and liabilities with the exception of temporary differences in connection with goodwill. Deferred tax advantage is recognised in the profit and loss account when it is probable that the company will have sufficient tax surplus in later periods to utilise the tax advantage. The group recognises in the profit and loss account tax advantages which have previously not been recognised to the extent that it has become probable that the group can utilise such deferred tax advantage. Likewise the group will reduce deferred tax advantages to the extent that the group no longer regards it as probable that it can utilise the deferred tax advantage. Deferred tax and deferred tax advantages are measured based on anticipated future tax rates for the companies in the group where previously temporary differentials have arisen. Deferred tax and deferred tax advantages are recognised at nominal value and are classified as financial capital expenditure (long-term debt) in the balance sheet.
Payable tax and deferred tax are allocated in the profit and loss account to equity to the extent that the tax entries relate to equity transactions. 1.27 Segment information Goodtech reports segment information in accordance with IFRS 8, Business Segments, which requires that segment information shall be based on internal management reports which are followed up regularly by the group’s most senior decision maker (Chief Operating Decision Maker) to evaluate the profits of the segments and to allocate resources to them. The group presents segment information for business segments and geographical segments (see Note 2). The group reports on the following five main segments: Projects & Services, Infra, Solutions, Environment og Products. Comparative data is normally prepared for changes in reporting segments; see note 2 for segment information. 1.28 Conditional liabilities and assets Conditional liabilities that are unlikely to be settled or which cannot be measured reliably are not recognised in the annual profit and loss account. Significant conditional liabilities are recognised with the exception of conditional liabilities where the probability of the liability is low. A conditional asset is not recognised in the annual profit and loss account, but is recognised where it is probable that a benefit will accrue to the group. 1.29 Events after the balance date New information about the group’s financial position on the balance date arising after the balance date is recognised in the annual profit and loss account. Events after the balance date which do not affect the group’s financial position on the balance date, but which will influence the group’s financial position in the future are recognised if they are significant. 1.30 The uncertainty of estimates In its presentation of the annual accounts in compliance with IFRS the group management has used estimates and assumptions deemed to be realistic. Situations or changes may arise which may mean that such estimates require adjustment and thereby affect the group’s assets, debt, equity or profit and loss. The Group’s most important accounting estimates relate to the following: • Construction contracts • Estimates of goodwill • Deferred tax advantages Construction contracts present a number of challenges from the tender phase to handover. The estimates on which the accounts are based rely on uniform principles and are subject to control procedures which are designed to ensure effective measurement of project results and progress. The complexity and scope mean that the project estimates have an inherent risk of error despite the Group’s efforts to ensure correct measurement. The group’s recognised goodwill is assessed annually or when there are indications of a fall in value. Factors that may trigger a review of the asset value include poor profits compared to historical profits or poor anticipated profits, significant negative industry or financial developments or significant changes to overall business strategy. Assessments of recoverable amounts of assets and companies are partially based on management estimates, including determining own cash flowgenerating units, estimates of future profits, an asset’s income capacity and assumptions about future market conditions and use of synergy effects. Changes in circumstances and management assumptions may lead to write-downs. The group’s recognised goodwill is assessed annually or when there are indications of a fall in value. Factors that may trigger a review of the asset value include poor profits compared to historical profits or poor anticipated profits, significant negative industry or financial developments or significant changes to overall business strategy. Assessments of recoverable amounts of assets and companies are partially based on management estimates, including determining own cash flowgenerating units, estimates of future profits, an asset’s income capacity and assumptions about future market conditions and use of synergy effects. Changes in circumstances and management assumptions may lead to write-downs. 1.31 Changes in accounting policy New and amended standards coming into force in 2011 have not resulted in amendments to the Group's accounting policy. 1.32 Standards not yet effective A number of new standards, corrections and interpretations of standards are not yet effective as at 31 December 2011. The Group has not opted for early application of new and amended IFRSs or IFRIC interpretations. Amendments to IAS 1 require that the items under other comprehensive income (OCI) should be grouped into two categories. Items that may be reclassified to profit or loss at a future date (e.g. net gain on hedge of net investment, exchange rate differences on conversion of foreign operations into the reporting currency, net change in cash flow hedges and net gains or losses on financial assets classified as available for sale) must be presented separately from items which will never be reclassified (e.g. actuarial gains and losses on defined benefit pension plans). Change affects only the presentation and has no impact on the Group's financial position or results. The amendments are effective for financial years
starting on 1 July 2012 or later, and will therefore be implemented in the Group's first annual accounts presented after the amendments become effective. IFRS 9 ”Financial Instruments” regulerer klassifisering, måling og regnskapsføring av finansielle eiendeler og finansielle forpliktelser. IFRS 9 ble utgitt i november 2009 og oktober 2010, og erstatter de deler av IAS 39 som omhandler regnskapsføring, klassifisering og måling av finansielle instrumenter. Standarden vil få innvirkning på hvordan selskapet presenterer sitt resultat. I henhold til IFRS 9 vil gevinster knyttet til avhendelse av finansielle instrumenter tilgjengelig for salg ikke føres over resultatet, men bare inngå i totalresultatet. Ikrafttredelse av standarden er satt til regnskapsperioder som begynner 1. januar 2015 eller senere. New standards for consolidation, IFRS 10, IFRS 11 and IFRS 12 are not expected to result in significant changes as far as the Group is concerned. Changes to the criteria for control will not result in changes to the assessment of subsidiaries or joint ventures. The standards are not expected to come into force before 2014. IFRS 10 Consolidated Financial Statements is based on existing principles for using the concept of control as the decisive criterion for determining whether an entity should be included in the consolidated financial statements of the parent company. The standard provides additional guidance on determining whether control exists in cases where this is difficult to ascertain. IFRS 11 is the standard that will replace IAS 31. The gross method will cease with the introduction of IFRS 11, but this does not mean that joint control should always be recognised according to the equity method. IFRS 11 has two main categories of joint control: Joint Ventures and Joint Operations. For Joint Ventures, joint control is recognised using the equity method, but for Joint Operations, parties recognise their rights to the assets and liabilities included in the collaboration. For Joint Operations, accounting may in some cases be like the gross method under IAS 31, but not always. IFRS 12 "Disclosures of Interes of Other Entities" inneholder opplysningskravene for økonomiske interessser i datterselskaper, felleskontrollert virksomhet, tilknyttede selskaper, selskaper for særskilte formål "SPE" og andre ikke-balanseførte selskaper. IFRS 12 Disclosures of Interest in Other Entities contains disclosure requirements for financial interests in subsidiaries, joint ventures, joint operations, associates, special purpose entities and other off-balance sheet vehicles. Amendments to IAS 19 coming into force on 01.01.2013 will lead to changes in how estimate deviations are calculated. These changes will result in changes to the distribution of pension liability on pension costs and estimates will be somewhat different, due to the requirement that the discount rate should be applied to net liabilities. The Group's pension liabilities are relatively small compared to the total accounts and the changes will not be significant. The standard further requires that all estimate deviations are recognised in other comprehensive income as they arise (no corridor). The Group has not availed itself of the option of a corridor, so this change will not result in any changes for the Group. IFRS 13 "Fair Value Measurement" defines what is meant by fair value when the term is used in IFRS, provides a consistent description of how fair value is to be determined in IFRS and defines what additional information has to be given when fair value is used. The standard does not expand upon the scope of accounting at fair value, but provides guidance on the application method where use is already required or permitted in other IFRSs. The company uses fair value for its financial investments; these are primarily listed securities, so it is not thought that IFRS 13 will involve any amendments for the company. Otherwise, no other IFRSs or IFRIC interpretations which are not yet effective are expected to have any significant effect on the accounts. There are no other IFRSs or interpretations of IFRIC that have become effective that are expected to have any significant impact on the accounts. New accounting standards and interpretations that are relevant will be applied from the date they become mandatory.
Note 2 Segment information (NOK 1.000) Operating segments Segment information has been prepared in compliance with IFRS 8 and is based on the reporting the management uses when assessing performance, profitability and resource allocation. In 2012, Goodtech has organised its business into five reportable segments (business areas), based on the types of projects, products and services supplied and various customer groups, as follows: The Projects & Services business area supplies qualified technical solutions in the fields of automation, electrics and
power technology to Nordic industry and the public sector. These deliveries include everything from large, technically demanding projects to smaller, ongoing local assignments.
The Infra business area provides services and solutions for upgrading infrastructure. Infra was separated from Projects & Services on 1 January 2012 in order to dedicate Infra to railway and metro. Comparative figures for 2011 have been restated accordingly.
The Solutions business area provides automation products and streamlining solutions to Scandinavian industry, as well as to selected customers and industries internationally.
The Environment business area supplies water and drainage solutions, as well as biogas solutions to municipalities,
industrial companies and the private market. It also works actively with various technology development projects. The Products business area supplies products and knowledge services to Norwegian industry and the public sector.
We represent leading international suppliers and manufacturers in the fields of automation, instrumentation, industrial communications and logistics.
Projects & Group
2012 Services Infra Solutions Environment Products items Total
Income from external customers 1 415 559 204 142 250 899 238 587 69 606 209 2 179 002
Income between segments 8 448 0 5 943 695 10 476 -25 562 0
Total segment income 1 424 007 204 142 256 843 239 282 80 082 -25 353 2 179 002
Product expenses -566 288 -130 738 -138 647 -167 990 -46 875 20 512 -1 030 026
Salary expenses -625 623 -45 354 -83 824 -33 952 -16 558 -16 097 -821 407
Other operating expenses -187 509 -23 114 -25 917 -20 252 -7 882 13 766 -250 908
Operating profit before depreciation and amortisation 44 587 4 937 8 455 17 088 8 766 -7 171 76 661
Depreciation -18 383 -345 -2 112 -829 -333 -850 -22 854
Non-recurring items 0
Operating profit 0
Income from external customers 26 204 4 592 6 343 16 259 8 433 -8 022 53 808
Assets 1 066 986 9 164 144 290 164 402 41 489 16 992 1 443 324
Purchase of fixed assets 3 538 131 366 1 710 461 1 144 7 350
Projects & Group
2011 Services Infra Solutions Environment Products items Total
Income from external customers 1 303 996 193 945 229 666 218 866 61 218 -47 2 007 645
Income between segments 6 300 1 987 4 210 679 9 171 -22 346 0
Total segment income 1 310 296 195 932 233 876 219 545 70 389 -22 393 2 007 645
Product expenses -504 421 -119 600 -122 439 -155 802 -39 417 15 242 -926 437
Salary expenses -592 025 -33 257 -81 407 -33 834 -17 730 -11 926 -770 179
Other operating expenses -176 400 -34 997 -23 609 -15 271 -7 070 10 631 -246 715
Operating profit before depreciation and amortisation 37 450 8 078 6 421 14 638 6 172 -8 445 64 315
Depreciation -28 823 -334 -2 218 -913 -595 -627 -33 510
Non-recurring items -9 213 0 0 0 0 -710 -9 923
Operating profit -586 7 744 4 203 13 726 5 577 -9 782 20 882
Assets 1 083 778 3 902 136 687 110 309 39 569 18 723 1 392 968
Purchase of fixed assets 7 011 0 3 716 1 090 125 4 403 16 345 The segments are reported gross including sales to other segments. Group items include sales among the segments and group activities in the parent company Goodtech ASA that are not distributed among the segments. Standard business conditions apply to transactions and transfers among the group’s segments similar to those employed with external parties. Assets under group items mainly consist of parent company assets.
Income by product group 2012 2011
Product sales 127 423 120 433
Construction contracts 1 460 026 1 334 956
Services 578 734 519 766
Other income 12 819 32 489
Total income 2 179 002 2 007 645
Information about geographical areas 2012 2011
Norway 446 747 517 681
Sweden 1 634 433 1 409 586
Finland 6 954 7 161
Denmark 13 209 14 113
Brazil 3 115 0
Poland 14 326 3 537
Russia 3 836 1 888
Irland 0 430
Italy 0 174
Japan 19 293 12 156
England 22 485 6 392
Germany 2 325 1 555
Austria 0 1 934
Belgium 164 94
Netherlands 101 2 575
Switzerland 170 9 528
Czech Republic 950 444
Azerbaijan 0 4 065
United Arab Emirates 4 485 0
Morocco 0 2 232
Chile 0 3 429
Other 4 614 4 126
Total income 1 797 4 547
Norway 2 179 002 2 007 645
Information about geographical areas is based on where the customer is located.
Fixed assets
Home state/Norway 12 393 12 356
Sweden 30 287 37 454
Other 2 277 2 280
Total fixed assets *) 44 957 52 090 *) Tangible fixed assets and other fixed assets on the balance sheet. Note 3 Changes in the group structure (NOK 1.000) Mergers and organisational changes 2012 Mergers No significant acquisitions were completed in 2012. Organisational changes The Group's activities relating to rail and metro were concentrated in a separate entity called Infra with effect from 1 January 2012. Projects & Services previously undertook these activities. The Group has seen strong growth in rail and metro in recent years, and rail and metro projects require special expertise and experience. Merger 2011 In July 2011, Goodtech acquired Imekon AB in Karlstad. The purchase price was SEK 3.2 million. With this acquisition, Goodtech expanded and complemented its activities in engineering (project planning) and system solutions in the Solutions business area. Acquired companies contributed sales of NOK 4 million in 2011 and pre-tax profits of NOK 0.7 million. In October 2011, Goodtech ASA acquired 2% of the sharesin Goodtech Recovery Technology AS via its subsidiary Goodtech Industry Holding AS, and now owns 100% of the shares in the company. The seller of the shares was Tord Finstad who was employed with Goodtech Recovery Technology AS. The purchase price consisted of 100,000 shares in Goodtech ASA which came from Goodtech's own shares. The shares were transferred at the price on the Oslo Exchange at the end of trading on 21 October 2011 and was NOK 1.40 per share. Sale of companies in 2012 and 2011 On 31 December 2012, the Group disposed of its transport activities in Goodtech Products AS. Income and expenses from discontinued operations are presented net of net profit/loss for discontinued operations in the profit and loss account. Comparative figures have been restated accordingly. On 31 March 2011, Goodtech disposed of its auto-ID activities in Goodtech Products AS by selling these activities to the head of its operations. Income and expenses from sold operations for Q1 2011 are presented net of net profit/loss for sold operations in the profit and loss account 2011. The table below specifies amounts for discontinued activities included in the profit and loss account for 2012 and 2011:
(NOK 1.000) 2012 2011
Operating income 9 078 18 684
Operating expenses -8 673 -19 869
Operating profit 405 -1 186
Net financial costs 0 0
Profit before tax 405 -1 186
Taxes 113 -332
Profit on sale after tax 2 867 -69
Profit/loss for sold operations 3 159 -923 Discontinued operations affect the following balance sheet items in the Group accounts: (NOK 1.000) 2012
Stock -8
Inventory -9
Total assets -17
Net cash consideration on sale, received January 2013 4 000
Cash flow from discontinued operations is considered to be similar to EBITDA for 2012 and 2011. Discontinued operations have not had any significant investment or financing activity. Cash flow from discontinued operations is not considered significant and therefore not shown separately in the Group's cash flow statement. At the end of June 2011, Goodtech Projects & Services AB sold its 50% share in Tunnelentreprenad Svenska AB (TEAB) to El & Industrimontage Tannergård AB, owned by former Chairman of the Board Rolf Tannergård. Through El & Industrimontage Tannergård AB, Rolf Tannergård owned 28.9% of the shares in Goodtech ASA on the date of the transaction. TEAB was owned jointly with Swarco Sverige AB and handled the delivery of the Norra Länken project to the Swedish Traffic Administration. For Goodtech the sale was part of a process to structure and optimise the Group's operations. In conjunction with the sale, a supply agreement was entered into between Goodtech Projects & Services and TEAB that will safeguard Goodtech's ongoing interest in the Norra Länken project until 2015. This means that Goodtech Projects & Services' supply of resources for this project will be completed as previously scheduled. El & Industrimontage Tannergård AB paid cash SEK 20 million for 50% of the shares of TEAB. The buyer and Rolf Tannergård personally acquired joint financial guarantees relating to advance payments which were pledged by Goodtech ASA as the parent company for the ongoing project through a guarantee equivalent to the guarantees ('back to back') which were pledged by Goodtech Projects & Services AB. The buyer also entered into the guarantee related to the completion of the contract. Goodtech simultaneously sold its subsidiary E&I International AB with a division in Baku (electricity) to El & Industrimontage Tannergård AB. The accounting effect of these transactions constituted NOK 13.9 million which was recognised as other operating income in 2011.
Note 4 Other operating expenses (NOK 1.000) 2012 2011
Rent and commercial premises 41 092 43 268
Travel expenses 46 540 36 085
Car expenses 32 015 30 146
Sales and marketing expenses 15 787 14 031
Fees 40 694 53 835
Postage and telephone 11 790 12 908
Losses on receivables 161 422
Other operating expenses 62 829 56 020
Other operating expenses 250 908 246 715 A reclassification has been carried out of product cost to other operating expenses in 2012 compared to what has been reported in the interim accounts in 2012. Similar reclassification has been carried out of product cost (decrease of NOK 106.0 million), salaries (increase of NOK 28.3 million) and other operating expenses (increase of NOK 77.7 million) in the comparative figures for 2011. Remuneration to auditors in Goodtech is included in other operating expenses and attributes as follows:
Remuneration to auditor 2012 2011
Auditor's fee 1 636 2 149
Other certification services *) 119 79
Tax consultancy 246 271
Other non-audit services 190 515
Total ex VAT 2 190 3 014
*) Including allocated to equity - 19
Note 5 Salary expenses and number of employees (NOK 1.000) 2012 2011
Salary 580 904 547 514
Share based salary (share saving scheme) *) 257 341
Employer contributions 145 882 137 330
Pension costs 36 446 31 786
Other social costs 57 918 53 207
Total salary costs 821 407 770 179
Average number of full time equivalents during the period 1 388 1 370
Number of employees as at 31.12 1 411 1 371 *) In 2012, the Group continued its share saving scheme. The group’s employees were offered shares in Goodtech ASA at a discounted price. The discount constituted 20% corresponding to NOK 1,500 per employee, which has been entered as a salary cost. A total of 170 group employees signed up for the share saving scheme with a total of 99,280 shares.
Note 6 Financial items (NOK 1.000) 2012 2011
Interest income 1 398 2 581
Agio profit 3 936 5 865
Other financial income 100 797
Total financial income 5 434 9 244
Interest cost of loans -4 923 -9 060
Guarantees -583 -747
Agio loss -2 601 -7 987
Other financial costs -967 -803
Total financial costs -9 074 -18 598
Net financial costs -3 639 -9 354 Note 7 Tax (NOK 1.000)
Tax costs 2012 2011
Payable tax *) 10 466 3 531
Too much/little allocated previous years -56 1 429
Tax on profit from discontinued operations -1 228 16
Change in deferred tax advantage -7 593 -5 707
Change in deferred tax -1 665 -6 349
Tax costs -76 -7 080
*) Tax payable in balance 3 959 1 548
Reconsiliation of effective tax rate Tax costs differ from the amount that would have arisen if the nominal tax rate had been applied. The difference between the nominal rate and the effective tax rate is specified below. The main components are specified.
2012 2011
Profit before taxes 51 215 11 527
Tax effect of discontinued operations -1 228 0
Tax calculated at tax rate 28% 14 340 3 228
Permanent differences 3 413 -242
Change in unrecognised deferred tax assets -15 741 -9 723
Exchange differences 334 0
Effect of change to tax rate, Sweden 249 0
Change to deferred tax on equity transactions -377 -35
Tax rates outside Norway that differ from 28% -1 065 -309
Tax costs -76 -7 080 The effective tax rate in 2012 and 2011 was significantly impacted by the recognition of previously unrecognised deferred tax benefits. In Sweden, it was decided to reduce corporate tax from 26.3% to 22% effective from 1 January 2013. This affects the calculation of deferred tax as at 31 December 2012.
Deferred tax and deferred tax advantage
Balance – consolidated Profit and loss –
consolidated
Deferred tax advantage 2012 2011 2012 2011
Fixed assets -5 594 -5 293 301 197
Current assets -1 362 612 1 974 -213
Pension 454 910 456 -182
Provisions 480 285 -195 103
Profit and loss account -1 087 -243 844 -61
Deficit to carry forward 41 843 46 596 4 753 4 173
Deferred tax advantage 34 735 42 867 8 132 4 016
Of which unrecognised deferred tax assets 0 15 724 15 724 9 723Deferred tax advantage recognised on balance 1) 34 735 27 142 -7 593 -5 707 Deferred tax 2)
Fixed assets Sweden 5 246 8 485 -3 239 -6 423
Provisions Sweden 2 902 1 487 1 415 106
Fixed assets Finland 1 151 990 160 -31
Deferred tax recognised on balance 9 298 10 963 -1 665 -6 349
The Group's loss to be carried forward as of 31 December is as follows:
2012 2011
2015 or later 0 0
No due date -149 440 -166 414
Total loss to be carried forward -149 440 -166 414
Loss carried forward by land 2012 2011
Norway -149 162 -157 907
Sweden -278 -8 507
Total loss to be carried forward -149 440 -166 414 1) Deferred tax benefits mainly relate to tax losses. The Group has updated its assessment of recognition of deferred tax benefits associated with the Group's tax losses. Previously unrecognised deferred tax assets have been recognised in 2012 based on the positive developments in the Group and expected future taxable profits. 2) Recognised deferred tax relates to temporary differences in Sweden and industrial property in Finland which cannot be offset against deferred tax benefits. The Group recognises net obligation and property only if the Group has a legally enforceable right to offset these and only liabilities and property for deferred tax within the same tax jurisdiction. The payment of dividends to parent company shareholders, as proposed by the Board, affects neither the current tax payable or deferred tax liability.
Note 8 Earnings per share (NOK 1.000) Earnings per share is calculated by dividing the share of the annual profits allocated to the company’s shareholders by a weighted average of the number of ordinary shares issued over the year. To calculate the diluted profits per share, the weighted average of the number of issued ordinary shares in circulation is used and adjusted for the effect of conversion of all potential shares which may be diluted. The company has no potential shares which may be diluted.
2012 2011
Annual profit allocated to the company's shareholders 54 428 17 642
Weighted average number of issued shares (in thousands) 32 471 32 419
Earnings/deluted earnings per share (NOK) 1,68 0,54
Annual profit for continued operations allocated to the company's shareholders 2012 2011
Annual profit for disposed operations allocated to the company's shareholders 51 291 18 608
Weighted average number of issued shares (in thousands) 3 159 -923
Profit/deluted profit per share on continued operation (NOK) 32 471 32 419
Profit/deluted profit per share on disposed operation (NOK) 1,58 0,57
0,10 -0,03
(Number of shares in thousand) 2012 2011
Ordinary shares issued as of 31 December 2012 and 2011 32 494 32 475
Effect of own shares 35 54
Total 32 529 32 529
Weighted average number of ordinary shares as of 31 December *) 32 471 32 471 *) Comparative figures for earnings per share and weighted average number of shares are calculated based on the number of shares after the share consolidation in May 2012.
Note 9 Fixed assets (NOK 1.000)
BuildingsMachinery/Equipment
Total
As at 1 January 2011
Acquisition cost 11 897 51 019 62 915
Accumulated depreciation -1 865 -13 721 -15 586
Value recognised in balance 01.01.11 10 032 37 297 47 329
Financial year 2011
Value recognised in balance 01.01.11 10 032 37 297 47 329
Translation differences -43 -93 -137
Additions 16 345 16 345
Disposals -660 -660
Annual depreciation -411 -11 898 -12 308
Value recognised in balance 31.12.11 9 578 40 991 50 569
As at 31 December 2011
Acquisition cost 11 853 66 610 78 464
Accumulated depreciation -2 275 -25 619 -27 894
Value recognised in balance 31.12.11 9 578 40 991 50 569
Financial year 2012
Value recognised in balance 01.01.11 9 578 40 991 50 569
Translation differences -343 -475 -818
Additions 7 350 7 350
Disposals -502 -502
Annual depreciation -404 -11 407 -11 812
Value recognised in balance 31.12.12 8 831 35 957 44 788
Per 31. desember 2012
Acquisition cost 11 510 72 984 84 494
Accumulated depreciation -2 679 -37 026 -39 706
Value recognised in balance 31.12.12 8 831 35 957 44 788
Economic life 20-30 years 3-10 years
Depreciation method Linearly linearly
Annual rent fixed assets not recognised in balance sheet 30 624 25 644 56 268
Estimated rent for next year 30 782 21 592 52 374 Future minimum rent associated with non-terminable rental agreements becomes dea as follows
Within 1 year 24 548
1 to 5 years 30 566
After 5 years 6 332
Total 61 447
Note 10 Impairment changes and non-recurring items Non-recurring items include items that are not considered to be of a recurring nature, such as write down of goodwill, acquisition expenses and restructuring costs. Non-recurring items are allocated as follows:
(NOK 1.000) 2012 2011
Acquisition expenses entered in accordance with IFRS 3 0 867
Restructuring costs *) 0 9 456
Other non-recurring items 0 -400
Total 0 9 923 *) Costs related to the liquidation and closure of branches in Sweden, including severance pay and other direct costs. Note 11 Intangible assets (NOK 1.000)
Development
costs
Customer Added value
Goodwill Patents and
licences Total contracts order backlog
Financial year 2011 Value recognised in balance 01.01.11 11 445 41 520 10 241 582 815 0 646 022
Translation difference -104 -36 -234 -374
Additions 6 148 2 726 8 874
Annual depreciation -98 -11 003 -10 205 -21 307Value recognised in balance 31.12.11 17 494 30 413 0 585 308 0 633 215
Per 31. desember 2011
Acquisition cost 17 765 46 360 14 811 665 308 384 744 627Accumulated depreciation and write-downs -270 -15 947 -14 811 -80 000 -384 -111 412Value recognised in balance 31.12.11 17 494 30 413 0 585 308 0 633 215
Financial year 2012 Value recognised in balance 01.01.12 17 494 30 413 0 585 308 0 633 215
Translation difference -475 -7 437 -7 912
Additions 981 981
Disposals *) -4 218 -4 218
Annual depreciation -98 -10 944 -11 042Value recognised in balance 31.12.12 14 159 18 995 0 577 870 0 611 024
Per 31. desember 2012
Acquisition cost 14 527 45 885 0 657 870 384 718 667Accumulated depreciation and write-downs -369 -26 890 0 -80 000 -384 -107 643Value recognised in balance 31.12.12 14 159 18 995 0 577 870 0 611 024
*) Reductions in development costs are net grants from NFR. See Note 28. Depreciation % 16,7% - 25% 16,7% - 100% 10 %
Economic life 5 år 4 - 6 years 1 - 6 years 10 years
Depreciation method linearly linearly linearly linearly
Development costs relate mainly to the development of technology for improving the efficiency of production of aluminum. The Group has not recognised research and development in 2012 (NOK 0.0 million in 2011). Development costs will be amortised over their estimated useful lives from the start of the project. Goodwill Goodwill which has arisen through the purchase of a company is allocated to the individual unit where the cash flow is identifiable.
Distribution of goodwill among cash generating units:
NOK 1.000 2012 2011
Goodtech Intressenter AB (prev. E&I Intressenter AB) 361 845 368 279
Goodtech Projects & Services AS 142 725 142 725
Goodtech Electro AS 302 302
Segment Projects & Services 504 872 511 306
Goodtech Solutions AS 4 463 4 463
Goodtech Solutions AB 56 448 57 452
Segment Solutions 60 911 61 915
Goodtech Environment Sørumsand AS 5 634 5 634
Segment Environment 5 634 5 634
Goodtech Products AS 6 453 6 453
Segment Products 6 453 6 453
Value recognised in balance 31.12 577 870 585 308 Changes in goodwill from 2011 are entirely due to changes in exchange rates. Goodwill related to Goodtech Project & Services AS originates in the acquisition of the Cronus Group in 2005 and the acquisition of Troll companies in 2010 (merged as of 1.1.2011). Goodwill related to Goodtech Solutions activities in Sweden originates in the acquisition of the companies MTH Automation, IKAB, Wermtec Industriteknik AB, Three-D Tech, KHK and Lecab during the period 2007-2009. The companies were merged in 2011. Goodwill is in all entities related to employees with special skills, customer relationships and anticipated synergies with other Group companies. Testing for value decrease of cash generating units that include goodwill Impairment testing for cash-generating units with significant recognised amounts of goodwill is based on the recoverable amounts. Recoverable amounts are determined on the basis of an assessment of the cash-generating unit's utility value. The utility value is calculated by discounting the expected future cash flows over a period of five years, including a terminal value based on Gordon's growth formula. Cash flow projections are used based on financial budgets approved by management. Cash flow over and above approved budgets is derived on the basis of the Group's long-term strategic plans.
Weighted rate of return used in the impairment test (WACC) After tax Before tax
Goodtech Intressenter AB 9,9 % 12,6 %
Goodtech Projects & Services AS 10,1 % 14,3 %
Goodtech Electro AS 10,1 % 14,0 %
Goodtech Solutions AS 10,1 % 14,7 %
Goodtech Solutions AB 9,6 % 12,4 %
Goodtech Environment Sørumsand AS 9,8 % 13,8 %
Goodtech Products AS 9,8 % 13,9 % The discount rate used is risk-adjusted for each cash-generating unit to reflect the asset's specific risks and tax adjusted before tax using the methods described in IAS 36. Risk-free interest rate is determined based on 10-year Norwegian and Swedish government bonds, adjusted for the spread between the 30-year and 10-year US government bonds. The Norwegian and Swedish risk-free rate has been used in the respective calculations of return to be consistent with the units' currency in cash flows.
Management expects that the market for the company's products and services will increase in the coming years and that the company will be able to take a larger market share within the indicated segments. Stable growth in turnover and EBITDA margins are assumed. Moderate growth expectations and increased earnings beyond the budget period have been assumed, and the conditions set are considered to be moderate and well within the expected developments. The Group has undergone significant integration processes after several acquisitions in the past two years. This has naturally affected Group companies in terms of integration costs. The largest processes have been completed which raises expectations and forms the basis for improving margins in the coming years. There is also an increased focus within the Group to improve company margins. The Group expects that the operating leverage in the form of improved margins will continue. Write down of goodwill Carrying out the impairment test in accordance with IAS 36 as at 31.12.12 found no basis for writing down or need to write down goodwill. Sensivity analysis If conditions develop differently from what has been assumed, this may result in impairment losses of goodwill. Key assumptions used in the calculation of recoverable amounts are discount rates, terminal value growth and developments in EBITDA. The calculated amount of each cash flow-generating unit exceeds its recognised amount by a relatively wide margin for most cash-generating units at the end of 2012. Sensitivity analyses show that Goodtech Projects & Services AS is the unit that is most vulnerable to changes in key assumptions that go beyond reasonable changes. The value of the goodwill associated with Goodtech Projects & Services AS depends on the company improving its margins to the same levels as in 2010. 2012 margins were negatively impacted by one large project that was completed in 2012. Adjusted for this one project, the company's margins in 2012 are already on par with 2010 margins. The company is seeing the positive results of internal processes performed to improve its margins. Minimium level of other key assumptions. Increase in discount rate before tax to more than 17.7% Growth in terminal value lower than 0%. An increase in the discount rate before tax of 17.7% or an increase in terminal value lower than 0% may trigger impairment. Note 12 Inventory (NOK 1.000) 2012 2011
Raw materials 18 177 13 490
Work in progress 1 978 1 824
Finished products 11 696 9 699
Unsaleability -1 058 -542
Depreciation -1 612 -1 612
Total net stock 29 180 22 859
Cost total for the period 1 030 026 926 437
Recognised value of stock pledged as security 42 18 077 Stock mainly includes sales products and materials used for the supply of goods and services. Stock in 2012 is part of the floating charge secured against SEB. See Note 17. Stock pledged as security in 2011 was secured against the former main bank Nordea which was formally cancelled in early 2012. Depreciation of stock is recognised as a product cost in the balance sheet.
Note 13 Accounts receivables (NOK 1.000) 2012 2011
Accounts receivables 424 174 374 884
Provision for loss 479 790
Net accounts receivables 423 695 374 094
Change in provisions for loss -310 -1 083
Actual loss 98 1 904 Loss on accounts receivable is classified in the same way as other operating costs in the profit and loss account.
Not 0-30 30-60 60-90 over 90
Accounts receivables by age due days days days days Total
2012 341 387 63 272 4 887 5 687 8 462 423 695
81 % 15 % 1 % 1 % 2 % 100 %
2011 300 052 56 154 8 834 1 393 7 662 374 094
80 % 15 % 2 % 0 % 2 % 100 % Of outstanding accounts as at 31.12.12, NOK 401.5 million was paid as at 6 March 2013. Note 14 Other short term receivables (NOK 1.000) 2012 2011
Prepaid costs 26 319 21 945
Production carried out, but not invoiced 130 535 168 575
Other short term receivables 58 278 59 367
Total other short term receivables 215 132 249 887 The Group produces a large part of its output on a contract basis. These contracts are recognised in the profit and loss account as ongoing settlements. Projects where earnings are higher than the A account invoiced amounts are presented as receivables on the balance sheet. Projects where earnings are lower than A account invoiced amounts are presented as liabilities.
Production carried out, but not invoiced
Carried to income on projects in progress 1 182 502 1 351 133
Amounts invoiced on account *) 1 051 968 1 182 558
Production carried out, but not invoiced 130 535 168 575 *) Amount invoiced, not paid 36 165 Of this withheld amount 4 374
Invoiced but Production not carried out
Carried to income on projects in progress 1 519 732 1 156 168
Amounts invoiced on account **) 1 673 224 1 338 792
Invoiced but Production not carried out ***) 153 492 182 624
**) Amount invoiced, not paid 43 071
Of this withheld amount 1 526 ***) Refers to note 21
Current projects as of 31.12.
Accrued income 2 674 957 2 489 841
Accrued costs -2 530 349 -2 385 193
Recognised earnings 144 608 104 648
Note 15 Cash and cash equivalents (NOK 1.000) 2012 2011
Cash in bank and cash in hand 82 857 32 973
Cash and cash equivalents in balance 82 857 32 973
Overdraft 0 0
Cash and cash equivalents in cash flow analysis
82 857 32 973 Tied tax funds as of 31 December 2012 are MNOK 7,8 (2011: MNOK 6,3) Note 16 Share capital, premium fund and paid-in capital (NOK 1.000)
Share Premium Other paid-in
capital Own shares fund capital Total
As at 1 January 2011 65 058 -181 535 440 - 600 317
Year change own shares - 73 - - 73
Decided, not registered capital decrease - - -500 000 500 000 0
As at 31 December 2011 65 058 -107 35 440 500 000 600 390
As at 1 January 2012 65 058 -107 35 440 500 000 600 390
Year change own shares - 37 - - 37
Capital increase on consolidation - - -45 - -45
Other changes - - -76 - -76
AS at 31 December 2012 65 058 -70 35 318 500 000 600 305 Share capital Nominal value per share is NOK 2,00. All shares have equal voting rights. All issued shares are fully paid-up. In April 2012, the Annual General Meeting adopted a 10:1 reverse split, which was completed in early May. Par value of shares changed from NOK 0.20 per share to NOK 2.00 per share. To facilitate the split a capital increase of NOK 1.40 was also adopted. The company's share capital consists of 32,528,905 shares with a nominal value of NOK 2, totalling NOK 65,057,810. Before the consolidation, the number of shares issued shares was 325,289,265. The general meeting of shareholders authorised management to issue shares up to the value of NOK 32,528,904. The authority expires on 30 June 2013. As per today’s date the authority has not been used. Own shares Over the years, Goodtech ASA has acquired 80,699 shares. In October, 99,280 shares were sold to employees via the Group's share scheme. At year end, Goodtech ASA had 35,144 own shares, representing 0.11% of the company's share capital. The General Meeting has authorised the Board of Directors on behalf of the Company to acquire own shares amounting to 6,398,332. The maximum amount which may be paid per share is NOK 80 and the minimum amount is NOK 2. The authorisation expires on 30 June 2013.
Dividend 2012 2011
Dividend paid per share (NOK) 1) 0,8 0
Total dividend paid (NOK 1.000) 25 980 0
Dividend per share proposed by the Board 1,50 0 1) Dividend per share is calculated based on the number of shares after consolidation. Dividends before consolidation were NOK 0.08 per share.
20 largest shareholders as at 31 December 2012 No. of shares % of total
El & Industrimontage Tannergård AB 9 403 911 28,9 %
Holmen Industri Invest 7 812 950 24,0 %
Skagen Vekst 2 116 842 6,5 %
Sedlak Holding AS 1 547 271 4,8 %
SIX SIS AG 25PCT (nom.) 1 503 772 4,6 %
EIO AS 1 500 641 4,6 %
Scandinaviska Enskilda Banken A/C client account 518 983 1,6 %
MP Pensjon PK 474 000 1,5 %
Swedbank Clients account (nom.) 408 618 1,3 %
Verdipapirfondet DNB SMB 384 854 1,2 %
Nordea Securities AB Alients account (nom.) 356 125 1,1 %
Trollhaug Invest 320 000 1,0 %
Skandinaviska Enskilda Banken AB 300 000 0,9 %
SHB Stockholm Client C/O Handelsebanken AS (nom.) 284 302 0,9 %
Tvenge Torstein Ingvald 250 000 0,8 %
Termos Eiendom AS 250 000 0,8 %
VJ Invest AS 239 531 0,7 %
VPF Nnordea SMB 229 484 0,7 %
Paulsberg Invest AS 200 000 0,6 %
Avanza Bank AB Meglerkonto 199 039 0,6 %
Total 20 largest 28 300 323 87,0 %
Other shareholders 4 228 582 13,0 %
Total 32 528 905 100,00 At the end of 2012, Goodtech ASA had 1.670 shareholders compared to 1.794 at the end of 2011.
Shares owned by the board and management as at 31.12.2012 No. of shares
Stig Grimsgaard Andersen (Chairman) *) 86 901
Stig Martin (Board member) 65 106
Karl Erik Staubo (Board member) *) 35 000
Veroslav Sedlak via Sedlak Holding AS (Board member/management) 1 547 271
Håvard Kristiansen (Board member, employee rep.) 1 934
Vidar Låte og via Eio AS (CEO) 1 500 641
Synnøve Granli (CFO) 8 394
Arve Teie (Group Director Strategic Marketing) 56 532
Robert Bylin (Group Director MQSP) 1 116
Magnus Falkman (Group Director, Projects & Services Sweden South) 51 863
Magne Reierson (Group Director, Projects & Services Norway) 10 000
Anders Lundmark (Group Director Infra) 20 000
Hans R. Vedde (Group Director Solutions) 34 792
Rune Hoseth (Group Director Environment) 2 534
Eiliv Elvebakk (Group Director Products) 819 *) Also indirect ownership in Holmen Industri Invest 1 AS In addition, managers in individual subsidiaries in the group own minor shareholdings. Share price development At year end the shares were listed at 11,65 per share, compared with 1,57 at the end of the previous year.
Note 17 Debt and credit facilities Long term debt
(NOK 1.000) Interest Value in
local Value recognised in
balance sheet
rate Due date Currency currency 2012 2011
Secured
Skandinaviska Enskilda Banken (SEB), long term debt
Basisrente + 1,0% 30.12.2015 SEK 84 000 71 812
97 451
Skandinaviska Enskilda Banken (SEB), long term credit facility 81 MSEK
Stibor + 1,0% 30.12.2015 SEK 69 000 58 988
66 998
Renteswap 3,06 % 30.12.2015 SEK 1 034 423
Total securred, long term interest bearing debt 131 834 164 872
Various bank loans – variable interest rate 3,34% - 6,25% 31.01.2019 7 167 9 665
Total long term interest bearing debt 139 001 174 537
Total long term debt 139 001 174 537
First year’s payment on long term debt -25 803 -26 648
Total long term debt excl. first year’s payment 113 197 147 889
Due dates for long term loans are as follows
0 - 2 years 51 897 60 644
2 - 5 years 85 332 113 090
Over 5 years 1 772 804
Short term debt and credits
First year’s payment on long term debt 25 803 26 648
Total short term interest bearing debt 25 803 26 648
The Group’s bank is Skandinaviska Enskilda Bank (SEB). The Group has established a group account for all its Norwegian and Swedish subsidiaries with SEB. The Group has multi-currency overdraft facilities of SEK 175 million and a long-term credit facility of SEK 81 million in SEB. The credit facility expires on 31 December 2015. Total interest-bearing liabilities amount to NOK 139,0 million at the end of 2012, of which NOK 25,8 million is current. An agreement has been entered into concerning a fixed interest rate (interest rate swap) on the long-term loan (MSEK 84) with SEB for the period 01.01.13 to 31.12.15. A commitment fee of 0.25% per year will be paid on the undrawn portion of the long-term credit facility with SEB. The interest terms for withdrawals under the long-term credit facility with SEB are NIBOR/STIBOR + 1.0%. The interest terms for withdrawals under the operating credit facility with SEB are NIBOR/STIBOR + 1.1%. The agreement with SEB regarding loans, credits and guarantees sets requirements for financial key figures for the group. The group shall have net interest bearing debt/EBITDA of maximum 2.5, and EBITDA/interest and amorisation shall be minimum 1.5. Quarterly reporting of accounts information and covenants is also required. The group is not in conflict with covenants as at 31.12.2012. As security for its commitment, SEB has a negative pledge clause, as well as first priority security on floating charges in Goodtech Projects & Services AB for SEK 106.9 million and Goodtech Process AB for SEK 6.0 million, a total of SEK 112.9 million. The types of asset that existed in the companies at the commencement of the credit agreement are referred to in floating charge security. The Group's total guarantees in banks and in other guarantee institutions is NOK 350.5 million, of which NOK 217.3 million were used as of 31.12.12. From time to time, the parent company further provides guarantees on behalf of subsidiaries to customers and suppliers as part of standard operations.
Note 18 Pensions (NOK 1.000) Goodtech has both defined contribution and defined benefit pension schemes for their employees. The Norwegian companies have primarily established defined contribution schemes. The schemes are funded through payments to insurance companies. Pension schemes meet the requirements of the Norwegian Mandatory Pension Act. The Group's defined contribution pension schemes in its Norwegian companies include most employees in Norway and constitute between 2% and 8% of employee salaries. The Group's companies outside Norway have pension schemes that comply with local practice and local legislation. Employees of the Swedish subsidiaries have pension plans (ITP - Industrins och Handelns tilläggspension) covered by insurances in Alecta AB. The ITP pension is managed by Alecta AB and Collectum. ITP includes all 'tjänstemän' in the Group's Swedish operations. Industrins och handelns tilläggspension is a scheme for employees in the private sector in Sweden. The pension plans in Sweden are based on mandatory collective agreement schemes negotiated as part of collective agreements. The ITP pension scheme includes pension, medical insurance and survivors pensions. Employees born after 1979 are included in ITP Plan Option 1, which is a defined contribution plan where the pension premium each term is fixed based on percentage ranges as set out in the associated collective agreement. Employees born in 1978 or earlier are covered by ITP Plan Option 2, but may choose ITP Plan Option 1. ITP 2 is a defined benefit plan where the pension premium varies from term to term based on different calculation variables. Employees who have ITP 2 also has a defined contribution pension scheme called ITPK. ITPK schemes in Swedish companies make up 2% of employees' salaries. The defined benefit scheme for Goodtech's employees acts as a defined contribution plan for the Group where annual premiums are expensed as incurred. This is a multi-employer scheme where policyholders do not have access to the information needed to recognise the scheme as a defined benefit plan. The pension scheme is therefore recognised similar to a defined contribution plan, in accordance with IAS 19.30. Total pension costs for both defined contribution and defined benefit pension schemes constitute NOK 36.4 million for 2012 (NOK 31.8 million for 2011) which are recognised as salary costs in the profit and loss account (cf. Note 5). Defined benefit pension schemes As of 31 December 2012, four people, three employees and one pensioner are covered by the Group's defined benefit pension plan. The scheme includes retirement pension from the age of 67 for life. The scheme also includes disability, survivors and children's pension. In addition, the Group has an unsecured pension agreement with three people.
Pension funds are valued at fair value at the end of the year.
Commitments (net present value of pension benefits accrued on the balance sheet date, adjusted for future salary increases) are valued using best estimates based on assumptions on the balance sheet date. The actuarial calculations of pension liabilities are carried out by an independent actuary. The obligation is calculated using straight-line accumulation.
Calculation of the year’s pension costs 2012 2011
Current value of the year’s pension contribution 498 505
Capital costs of accrued pension oblilgations 224 340
Anticipated retur non pension funds -245 -348
Administration costs 49 90
Employer contributions 74 83
Annual pension costs defined benefit pension schemes 601 670
Annual pension costs defined contribution pension schemes 35 845 37 495
Annual pension costs 36 446 38 165
Pension obligation and pension funds 2012 2011
Gross pension obligation 7 701 8 632
Fair value pensjon funds 6 352 5 783
Net pension obligation 1 349 2 849
Employer contributions 272 402
Pension obligation recognised in balance sheet 1 621 3 251
Change in obligation 2012 2011
Net pension obligation 1.1. 3 251 2 725
Pension costs recognised in profit and loss statement 601 670
Premium payments -883 -319
Estimated deviation entered on comprehensive income statement -1 348 175
Net pension obligation 31.12 recognised in the balance sheet 1 621 3 251
On calculation of pension costs and net pension obligation the following assuptions have been made 2012 2011
Discount rate *) 3,90 % 2,60 %
Return on pension funds 4,00 % 4,10 %
Salary growth 3,50 % 3,50 %
Pension adjustment 0,20 % 0,10 %
G-adjustment 3,25 % 3,25 %
Average turnover 0,00 % 0,00 % *) In the financial year 2012, the Group has chosen to use the discount rate based on the bond interest rates, according to the updated NRS Guide. The Group has determined that interest rates on business bonds reflects a more realistic rate compared to interest rates on government bonds. The net effect on equity as a result of the change in the basis for the discount rate is NOK 1 million in 2012. The pension funds in an insurance-based scheme consist of an insurance policy. The insurance policy is measured at fair value. Fair value corresponds to the transfer value of the policy and any premium funds. The life assurance investment profile is determined in guidelines from the Financial Supervisory Authority of Norway.
Percentage distribution of pension funds by investment category 2012 2011
Shares 8,7 % 6,4 %
Property 16,5 % 17,6 %
Bonds at amortised cost 39,4 % 43,5 %
Bonds in circulation 32,0 % 29,3 %
Other 3,4 % 3,2 %
Total 100,0 % 100,0 %
Note 19 Provisions (NOK 1.000)
Short term provisions Guarantee Obligation Total
Balance as at 1 January 2011 3 364 2 767 6 131
Currency effect on IB -12 -12
Provision 2011 2 127 2 337 4 464
Provision reversed in 2011 2 441 2 441
Provision used in 2011 2 683 2 683
Balance as at 31 December 2011 3 050 2 409 5 460
Long term provisions Guarantee Obligation Total
Balance as at 1 January 2011 1 304 0 1 304
Currency effect on IB -1 -1
Balance as at 31 December 2011 1 303 0 1 303
Total provisions 2011 6 763
Short term provisions Guarantee Obligation Total
Balance as at 1 January 2012 3 050 2 409 5 460
Currency effect on IB -13 -42 -55
Provision 2012 7 797 7 797
Provision reversed in 2012 4 009 4 009
Provision used 2012 2 367 2 367
Balance as at 31 December 2012 6 825 0 6 825
Long term provisions Guarantee Obligation Total
Balance as at 1 January 2012 1 303 0 1 303
Currency effect on IB -23 -23
Reversed provision 1 281 1 281
Balance as at 31 December 2012 0 0 0
Total provisions 2012 6 825 Provision guarantee The group gives a 1 to 5 year guarantee on products and services sold. The guarantee provision is based on historical experience. Provision obligation short term 31.12.2012: Provisions in connection with turnarounds has been used in 2012, see note 10. 31.12.2011: Provisions in connection with organisation changes has been used 2011, see note 10. Provision of NOK 2,337,000 was made in 2011 for final sum in connection with turnarounds, see note 10.
Note 20 Investments in associated companies (NOK 1.000) An overview of the Group's investments in associated companies is shown below. These investments are recognised using the equity method.
Value recognised in
balance as at 1 January Share profit
Translation differences
Value recognised in
balanse 31 December
2012
Kraftkompaniet 707 1 047 -10 1 744
2011
Kraftkompaniet 38 664 5 707 Summary of financial information for associated companies, based on 100% figures:
2012 Country Assets DebtOperating
incomeProfit for the
year Ownership
%
Kraftkompaniet Sverige 26 682 22 229 79 478 2 619 40 %
2011 Country Assets DebtOperating
incomeProfit for the
year Ownership
%
Kraftkompaniet Sverige 66 277 64 414 125 923 1 754 40 %
Note 21 Trade accounts payable and other short term debt
(NOK 1.000) 2012 2011
Liabilities to suppliers 206 722 152 013
Unpaid public taxes 62 373 48 790
Holiday pay/salaries owed 83 858 79 913
Invoiced, but production not carried out *) 153 492 182 624
Accrued costs 38 694 20 462
Other short term debt 49 666 45 120
Total 594 804 528 922
*) Refers to note 14
Note 22 Financial risk and categories of financial instruments Financial risk The Goodtech Group has operations in several European countries and is exposed primarily to interest rate risk, currency risk, liquidity risk and credit risk. The Group's financial instruments consist primarily of external financing (bank loans and overdrafts) and bank deposits. The Group additionally has trade receivables and payables related to its daily operation. The Board is intending to implement an annual review of procedures for risk management. The Group's management has continuously assesses these risks and establishes guidelines for how they should be handled. Management within each business unit is responsible for ongoing monitoring of risks within their area of responsibility. Capital management The Board's goal is to maintain a strong capital base to maintain investor, creditor and market confidence and to develop the business. By ensuring a good ratio between equity and debt, the Group will support its activities and thus maximise the value of its shares. The Group manages its capital structure and makes necessary changes to it based on a continuous assessment of the economic conditions under which the Group is operated as well as general prospects in the short and medium term. The Group monitors its capital by assessing its gearing ratio, which is defined as net interest-bearing debt divided by equity. Additionally, the Group's policy is governed by capital requirements (covenants) related to liabilities to banks. The Group
must not have net interest-bearing debt/EBITDA that exceeds 2.5 and EBITDA/interest and amortisation must be a minimum of 1.5 (see Note 17).
(NOK 1 000) 2012 2011
Interest bearing debt 139 001 174 537
Cash 82 857 32 973
Net interest bearing debt/cash 56 144 141 564
Total equity 687 815 666 984
Gearing ration 8,2 % 21,2 %
EBITDA 76 661 64 315
Net interest bearing debt/EBITDA 0,73 2,20
Interest cost + amortisation 28 860 30 610
EBITDA/interest cost + amortisation 2,66 2,10 No companies in the Group are subject to external capital requirements beyond covenants related to debt to banks. Credit risk The risk that counterparts do not have the financial ability to meet their obligations is regarded as low. Goodtech has established clear guidelines and criteria for the assessment of credit risk. In addition, the Group has a large spread of customers in terms of both number and size, and customers are mainly established companies. The Group has no significant credit risk associated with a single counterpart or counterparts which can be viewed as a group as they present a similar credit risk. The creditworthiness of customers who require credit is regularly assessed. This reduces vulnerability to losses on individual customers, and recent years have shown few losses in this area. Confirmed losses in 2012 were NOK 98,000 (2011: NOK 1,904,000). The Group has not guaranteed third-party debt.
Maximum risk exposure is represented by recognising the value of the financial assets in the balance sheet. The Group considers its maximum risk exposure to be the recognised value of trade receivables (see Note 13) and other current assets (see Notes 14 and 15). Interest risk The Group's exposure to interest rate risks is mainly related to financing at variable interest rates. Funding is primarily short-term loans and credits. Excess liquidity is primarily invested in bank deposits and low-risk money market funds.
See Note 17 for information on long-term and short-term loans. An increase/decrease in interest rates by 0.5% would entail a reduction/increase in Group profits of NOK 0.7 million from net interest-bearing debt of NOK 138.0 million at the end of the year. Similarly, the value of interest rate swaps recognised in equity would result in a decrease/increase in equity of NOK 0.36 million. A fixed rate (interest rate swap) on the long-term loan from SEB has been agreed. This amounts to SEK 84 million for the period 1 January 2013 to 31 December 2015 at 3.06% including margin. The fair value of interest rate swaps as at 31 December 2012 is NOK 3.030 million. Liquidity risk Liquidity risk is the risk that the Group will not be able to meet its financial obligations as they fall due. Liquidity management is exercised to ensure that liquidity is sufficient to meet liabilities when due.
The Goodtech Group's strategy is to maintain sufficient cash, cash equivalents and credit facilities to be able to finance operations and investments in accordance with the Group's strategic plan. Unused credit facilities are described in Note 17. Excess liquidity is held mainly in Norwegian kroner. The table below shows the maturity structure of the Group's financial liabilities based on nominal payments of principal and estimated interest payments.
Financial liabilities 31.12.2012
< 1 year 1-3 years 3-5 yearsMore than
5 years Total
Bank loan 25 803 110 141 1 284 1 772 139 001
Interest on bank loan 3 269 5 421 293 85 9 068
Trade debt and other debt 462 555 - - - 462 555
Interest swap - 1 034 - - 1 034 Renteswapen følger løpetiden på tilhørende lån som forfaller til betaling 31.12.2015.
Currency risk Goodtech is exposed to currency risk, as the Group operates in several countries both within and outside Europe. Contracts are primarily in local currencies (NOK, SEK, EUR and USD). Currency fluctuations may result in adjusted income in NOK for foreign projects. The main risks are related to fluctuations in EUR, USD and EUR. However, Group policy is to keep most of the purchases and sales of individual projects in the same currency, thus reducing the risks associated with currency fluctuations. The recognised amounts of the Group's net investment in foreign companies fluctuate as the Norwegian krone changes compared with the applicable currencies. Profit after tax for the Group is also affected by changes in exchange rates, as the profits in foreign companies are converted into Norwegian kroner at a weighted average exchange rate for the period. The Group has also established a multi-currency cash system that helps to reduce currency risks. Over the past year, the Company has carried out no significant currency hedging transactions with banks.
The following table shows the Group's sensitivity to potential changes in the krone exchange rate – all other factors being equal. The calculation is based on the same change against all applicable currencies. The effect on earnings comes from changes in the value of monetary items, and the effect on equity is the value of net investments in foreign currency.
Accounting impact
(NOK 1.000) Pre-tax profit Equity
10% incr/-red SEK/NOK +/- 2 598 +/- 53 867
10% incr/-red EURO/NOK +/- 985 +/- 10 031 Determination of fair value A comparison of the recognised amounts and fair values of the Group’s financial instruments is shown below. With the exception of the interest rate swap which is recognised at fair value, all financial instruments are measured at amortised cost. There is no significant difference between the fair value and book value. The recognised value of cash and cash equivalents and bank overdrafts approximates fair value because these instruments have short maturities. Similarly, the recognised amount of accounts receivable and accounts payable approximates fair value as these are entered into on ‘normal’ terms. Liabilities to banks are based on floating interest rates and recognised value is regarded as approximating fair value.
Categories of financial instrument 2012 2011
(NOK 1.000) Book value Fair value Book value/
fair value Fair value
Financial assets measured at amortised cost
Cash and cash equivalents 82 857 82 857 32 973 32 973
Accounts receivable 423 695 423 695 374 094 374 094
Other short term debt 54 649 54 649 249 887 249 887
Financial liabilities measured at amortised cost
Loans -113 197 -113 197 -147 466 -147 466
Loans and credit facilities -25 803 -25 803 -26 648 -26 648
Trade debt -206 722 -206 722 -152 013 -152 013
Other short term debt -214 015 -214 015 -379 319 -379 319
Financial liabilities measured at fair value
Rate swap -1 034 -1 034 -423 -423
Valuation hierarchy The Group classifies fair value measurements using a fair value hierarchy that reflects the significance of the input used in the preparation of the measurements. No financial assets or liabilities have been reclassified in such a way that the valuation method has been changed from amortised cost to fair value or vice versa. The different valuation levels have been defined as: Level 1: fair value is measured using quoted prices in active markets for identical financial instruments. Level 2: fair value is measured using observable inputs other than Level 1 inputs – either directly (prices) or indirectly (derived from prices). Level 3: fair value is measured using inputs that are not based on observable market data (unobservable inputs).
2012
(NOK 1.000) Level 1 Level 2 Level 3
Financial liabilities measured at fair value
Rate swap - -1 034 -
Total - -1 034 -
2011
Level 1 Level 2 Level 3
Financial liabilities measured at fair value
Rate swap - -423 -
Total - -423 -
Note 23 Transactions with close associates (NOK 1.000) Remuneration to board and group management
Period Fee to board
members Fees to board
committees Total 2012 Total 2011Board and election committee
Stig Grimsgaard Andersen Chairman 225 225 181
Selma Kveim Board member 150 150 -
Stig Martin Board member 150 150 -
Veroslav Sedlak 2) Board member 150 150 150
Karl Erik Staubo Board member 150 36 186 159
Annema Sødahl Wessel Board member 150 150 150
Tine G. Wollebekk Board member 150 150 -
Anna-Stina Nordmark Nilsson Board member apr 11-oct 12 150 36 186 -
Osvaldo Chamorro 2) Board member, employee repr. from oct 11 38 38 -
Robert Karlsson 2) Board member, employee repr. to july 12 75 36 111 84
Håvard Kristiansen 2) Board member, employee repr. 75 75 75
Göran Rönnbäck 2) Board member, employee repr. from july 12 0 0 -
Nicolas Brun-Lie Chairman election committee 50 50 -
Per Raaum Election committee 30 30 30
Harald Skogholt Election committee 30 30 30
SalaryPension
contribution Other
benefits Total 2012 Total 2011
Group management
Vidar Låte CEO 1 643 60 115 1 818 1 930
Synnøve Granli CFO 1 045 60 13 1 118 1 078
Arve Teie 3) Group Director, Strategic Marketing 1 098 60 105 1 262 1 069
Robert Bylin Group Director, MQSP 943 248 50 1 241 -
Stefan Helmvall 1) Group Director, Projects & Services Sweden North 1 181 212 49 1 443 -
Magnus Falkman 1) Group Director, Projects & Services Sweden South 1 298 295 72 1 665 -
Magne Reierson 1) Group Director, Projects & Services Norway 1 167 60 34 1 260 -
Anders Lundmark 1) Group Director, Infra 843 170 84 1 098 -
Hans Vedde Group Director, Solutions 999 60 158 1 217 1 083
Rune Hoseth Group Director, Environment 1 021 60 95 1 176 1 141
Eiliv Elvebakk 3) Group Director, Products 71 40 17 128 - 1) Remuneration is paid by a subsidiary in the group 2) The employee representatives on the board also receive normal salary, earn pension rights and receive other benefits as employees that are not included in the table above. 3) Arve Teie was Group Director Products untill 30.11.12 and became Group Director Strategic Marketing as at 1.12.12. Eiliv Elvebakk took over as Group Director Products as at 1.12.12 No loans or guarantees have been granted to management. Loans to employees Participants in the group share-saving scheme for 2012 were offered the opportunity to finance their share purchases with loans of NOK 5,000, which are paid off over one year through salary deductions. Otherwise, no loans or guarantees have been granted to employees. Transactions with close associates Goodtech ASA is the parent company and has direct and indirect ownership and control of 14 companies. Directly owned companies are presented in Note 4 to the Goodtech ASA accounts while the indirectly owned companies are presented in Note 25 Overview of Subsidiaries. Transactions between group companies are eliminated in the consolidated Group accounts. Activity between Group companies is presented in the segment information in Note 2 to the consolidated profit and loss account. Intercompany balances with the parent company are presented in Note 5 to Goodtech ASA accounts. Goodtech has interests in joint ventures. Joint ventures are consolidated line by line in the consolidated profit and loss account using the consolidation method, based on ownership share. Transactions and balances with joint ventures are eliminated in the consolidated group accounts. As of 31 December 2012, Goodtech has outstanding loans to joint ventures of SEK 1.5 million. Reference is made to Note 26 to the consolidated profit and loss account for details of the Group's ownership interests in joint ventures. Transactions between Group companies and joint ventures are carried out on the arm's length principle. Joint costs in Goodtech are distributed among the Group companies in accordance with the allocation rules on an arm's length basis. The Group has not identified other transactions with close associates than the ones mentioned above. The board’s declaration regarding determination of salary and other remuneration for management The Board of Goodtech ASA has set out guidelines for salary and other benefits for management employees in the company and group companies (‘Goodtech’ or ‘the group’) for the coming financial year. The declaration has been prepared in accordance with section 6-16a of the Norwegian Shareholders Act. The declaration must be put before the company’s general meeting, ref. section 5-6, paragraph 3 of the Norwegian Shareholders Act. All companies in the Group must follow these guidelines as set out below. The objective is to coordinate salary policies and schemes for variable benefits across the group. 1. Main principles for the company’s management salary policy Management salaries must be competitive without Goodtech being a salary leader – the company must be able to attract and retain talented managers.
Salaries (total remuneration received) should usually lie around the average level of managerial salaries for comparable managers in similar companies in the country in which the manager is resident Managerial salaries must be motivational – the salary must be put together in such a way that it motivates effort continually to improve the company’s results. The main element of the managerial salaries must be the fixed salary, but additional variable benefits may be awarded to motivate managers’ efforts on behalf of the company. Variable benefits must be reasonable in relation to the company’s profits for the year. In order for these variable benefits to work as an incentive, the criteria must be related to factors that the individual is able to influence. Goodtech wishes the salary system to be structured in such a way as to nurture a team spirit internally in the group and stimulate efforts that produce results outside the individual’s area of responsibility. Part of the overall remuneration may also be awarded in the form of shares in the company. The salary system must be flexible – so that it can be adapted when required. In order to be able to offer competitive salaries, Goodtech must have a flexible salary system that can be adapted to special circumstances. Goodtech should have salaries that are competitive in terms of being able to attract and retain executives in the various geographical areas where Goodtech operates, and the payroll system must be flexible and allow adaptation when required. The salary system must be understandable and acceptable both internally in Goodtech and externally. The salary system should not be disproportionately difficult to explain to the public and should not be disproportionately complex to manage. 2. Principles for determining salary levels The basis for determining salary levels must be the overall level of fixed salary and other benefits. This level must be competitive, but not lead the market. The fixed salary should usually form the main element of any manager’s salary. 3. Principles for benefits that can be given in addition to fixed salary Remuneration for management employees may be awarded in addition to the fixed salary: - Benefits in kind - Bonuses - Share based remuneration - Pension schemes - Pay after termination of employment - Other remuneration Specific benefits are detailed below. Unless otherwise indicated below, no special conditions, frameworks or allocation criteria apply to the benefit concerned. Benefits in kind Benefits in kind will usually consist of car scheme, newspaper/magazine subscriptions and electronic communication. Allocation of benefits in kind must be related to function or in line with market practice. These benefits should not be significant in relation to salary. Bonuses The Group currently has no established bonus schemes in place for management. Share based remuneration The group currently has no established bonus schemes or share-based incentive programmes in place for management. If the group establishes a share saving scheme for employees, management employees will be given the opportunity to participate on an equal footing. Over the last years, the group has had such a scheme in place where all employees in the group have been offered the opportunity to purchase existing shares in Goodtech at a discount of 20% on the market price. The scheme was set up by the company purchasing its own shares in accordance with the authority from the general meeting. The Board is also able in the current and future financial years to set up share saving schemes for employees, including the managing director and other management employees. The Board asks the general meeting that the Board is given authority to purchase own shares for this purpose Pension schemes Management employees are included in the Group’s pension and insurance schemes for all employees. This ensures that they receive a pension commensurate with their salary levels. Pay after termination of employment The CEO and Group Directors have an agreement on pay after termination of employment schemes that varies between 12 and 18 months. The mutual notice period for the CEO is six months. If Goodtech should terminate the employment, it is agreed that a package corresponding to up to 18 months’ salary will be provided.
The CEO should usually have an agreement in place that allows the CEO to step down immediately, should this be in the interest of the company. The pay after termination scheme must therefore be sufficiently favorable for the CEO to accept an agreement on a reduced notice period. Agreements on pay after termination can be entered into for other managers to ensure that the composition of managers is always in the company’s interests. Such agreements will in accordance with the Norwegian Working Environment Act not be binding on any management employees except the CEO. Retirement schemes must be designed so that they are acceptable internally and externally. In addition to salary and other compensation in the notice period such schemes must not entail rights to retirement payments for more than 18 months. Other remuneration Other variable elements in the remuneration may be used or other special benefits allocated than set out above if this is deemed to be practical in order to attract and/or retain managers. No special limitations exist to the benefits that may be agreed. General Remuneration for the CEO is determined by the chairman of the board in consultation with the board Remuneration for other management is determined by the CEO in consultation with the chairman of the board. The company uses standard employment contracts and standard employment terms regarding notice periods and payment on termination of employment for the positions of CEO and Group Directors. 4. Explanation of management salary policy and the effect of agreements on remuneration in the past financial year The management salary policy in the group for the financial year 2012 was implemented in accordance with the guidelines for salary and other benefits prepared by the board on 27 March 2012 and correspond to the guidelines discussed at the company’s general meeting in 2012. No significant changes have been made to agreement terms for management employees in 2012.
Note 24 Contingent liabilities Operational and project risk and uncertainty From time to time, the Group receives demands as a result of its ordinary operations. These may include warranty claims and claims for damages resulting from injury to persons or property arising from the use of its products and solutions. Management is not aware of any ongoing issues that will result in significant liabilities for the Group. The Group's operations are based on long-term contracts and some of these are fixed-price turnkey contracts. Failure to meet delivery dates or performance guarantees or increases in contract costs can result in costs that cannot be covered and that may be greater than income from the project. Where a project is identified as loss-making, provisions are made to cover future losses. Accounting is based on available information and recommendations. Circumstances and information may change in subsequent periods, and the final outcome may be better or worse than the assessments made in the preparation of the initial accounts. Contingent liablities Goodtech ASA and its subsidiaries may have ongoing cases being considered by the local tax authorities in certain countries in which the Group operates. In accordance with IFRS, Goodtech ASA has treated cases that have not finally been determined based on the information available at the time of preparation of the annual accounts. Goodtech Recovery Technology AS has appealed a decision by the Norwegian tax authorities regarding the assessment of tax for the financial year 2010. The Company disagrees with the tax authorities’ decision to increase taxable income in 2010 by NOK 13.9 million, and has appealed the decision. As the Company disagrees with the decision of the tax authorities, as well as the option of being able to offset the demand against if the Company’s appeal is not upheld, the Company has not made any provision in the accounts. Neither the Company's financial position or cash flows are expected to be materially affected by the outcome of this case. Bank and corporate guarantees The Group has pledged collateral to SEB and other banks in connection with the Group's group account arrangements and operating credit facilities. See Note 17 for further discussion of these guarantees. In partnership with co-owner APQ EI AB, Goodtech Projects & Services AB, the Group's subsidiary, is jointly and severally liable for the liabilities of the joint ventures GAQ Contracting AB. The two companies are jointly providing third parties, to whom GAQ Contracting AB has liabilities with guarantees.
Note 25 Summary of subsidiaries The largest subsidiaries that are included in the consolidation of the Goodtech group appear in the following table. Companies owned directly by Goodtech ASA are highlighted
Company
Groups ownership
shareGroup voting
share Registered office Country
Goodtech Industry Holding AS **) 100,0 % 100,0 % Oslo Norway
Goodtech Electro AS * 50,0 % 50,0 % Oslo Norway
Goodtech Projects & Services AS 100,0 % 100,0 % Oslo Norway
Goodtech Solutions AS 100,0 % 100,0 % Porsgrunn Norway
Goodtech Recovery Technology AS 100,0 % 100,0 % Oslo Norway
Goodtech Products AS 100,0 % 100,0 % Oslo Norway
Goodtech Intressenter AB 100,0 % 100,0 % Umeå Sweden
Goodtech Projects & Services AB 100,0 % 100,0 % Umeå Sweden
Goodtech Process AB 100,0 % 100,0 % Umeå Sweden
Goodtech Solutions AB 100,0 % 100,0 % Karlstad Sweden
Goodtech Solutions Manufacturing AB 100,0 % 100,0 % Arvika Sweden
Goodtech Environment AB 100,0 % 100,0 % Mariehamn Åland (Finland)
Goodtech Environment Sørumsand AS 100,0 % 100,0 % Sørumsand Norway
Goodtech Environment Gøteborg AB 100,0 % 100,0 % Gøteborg Sweden *) Cronus Elmatikk AS was merged with Goodtech Industry Holding AS as from 1.1.2012. **) Goodtech Industry Holding AS represents the majority of votes on the company’s board.
Note 26 Investment in joint ventures At the end of 2011, Goodtech Projects & Services AB, in partnership with APQ EI AB, set up a project company called GAQ Contracting AB for the supply of the companies' joint projects. 50 of GAQ Contracting AB is owned by Goodtech Projects & Services AB and 50% by APQ El AB. The shareholder agreements mean that Goodtech Projects & Services AB and APQ EI AB retain joint control of the company. In 2012, investments in joint ventures are recognised using the gross method (proportionate consolidation), based on a 50% stake. The Group has changed the accounting policy from the equity method, which was used in 2011. Both methods are acceptable under IAS 31 Interests in Joint Ventures. The Group has elected to change its policy in anticipation of the new standard, IFRS 11 Joint Arrangements, where activities organised as joint operations must be recognised according to the gross method.
Company Office Business ShareGAQ Contracting AB Malmø, Sverige Assembly and consultancy in the electrical industry 50 %
Below an overview of the share of assets, liabilities, earnings, expenses and net profit in joint ventures are proportionally consolidated in the consolidated profit and loss account. The amounts are shown gross before the impact of eliminations in the profit and loss account relating to intercompany transactions. See Note 23 for a summary of transactions between joint ventures and subsidiaries.
(NOK 1.000) Current assets Short-term debt Turnover Operating costs Net profit
2012 6 340 5 135 16 408 14 811 1 583
2011 1 691 1 651 945 31 4 Goodtech Projects & Services AB and APQ EI AB are jointly and severally liable for the obligations of GAQ Contracting AB. The companies are jointly and severally providing guarantees to third parties to whom GAQ Contracting AB are liable as part of its ordinary operations.
Note 27 Public grants In 2012, the Group received NOK 5,409,000 in grants from the Norwegian Research Council for development projects pertaining to the development of technology for improving the efficiency of production of aluminium (NFR Heat Pipe). In 2011, the Group received NOK 4,218,000 in grants from the Norwegian Research Council. This development project has been capitalised, cf. Note 11. In 2012, the Group has changed the method of presentation of grants from the Norwegian Research Council. The grant will be deducted from the calculation of the recognised value of the development project. Investment grants in 2011 were recognised in the profit and loss account as deferred income. Grants received in 2012 have been incorporated as a reduction of Development Costs in Note 11, while the grant received in 2011 is shown as reduced development costs 2012. In 2011, the Group received grants for research and development projects through the SkatteFUNN scheme of NOK 911,000. This amount is fully recognised as a reduction of capitalised costs associated with the projects.
Note 28 Events after the balance date No significant events affecting the accounts for 2012.
Goodtech ASA
Profit and loss account 1 January -31 December
(NOK 1.000) Note 2012 2011
Operating income
Revenues 3 17 313 11 716
Total operating income 17 313 11 716
Operating expenses
Salary expenses 11 18 060 15 766
Depreciation on fixed assets 2 770 545
Other operating expenses 11, 13 10 746 12 067
Total operating expenses 29 577 28 378
Operating profit - 12 264 - 16 662
Financial income and expenses
Income/cost from investments in subsidiaries 4 24 636 18 935
Financial income 14 3 946 4 701
Financial expenses 14 714 1 475
Net financial items 27 867 22 161
Profit before taxes 15 603 5 500
Taxes 9 - 13 272 - 9 159
28 875 14 659
Profit/loss for the year
Allocations - 19 866 - 11 322
Allocations to/from other equity 8 48 741 25 980
Allocations for dividends 28 875 14 659
Balance as at 31 December (NOK 1.000 ) Note 2012 2011
ASSETS
Intangible assets
Deferred tax assets 9 41 562 28 290
Total intangible assets 41 562 28 290
Fixed assets
Fixed assets 2 5 207 4 834
Total fixed assets 5 207 4 834
Financial assets
Investments in subsidiaries 4 480 864 480 864
Loan to companies in the Group 5 89 007 69 135
Total financial assets 569 871 549 999
Total fixed assets 616 640 583 123
Current assets
Accounts receivables 5 10 567 6 421
Other short term receivables 5 42 990 74 742
Bank deposit and cash 6 44 654 543
Total current assets 98 212 81 707
TOTAL ASSETS 714 852 664 829
EQUITY AND LIABILITIES
Equity
Contributed equity
Share capital 7 65 058 65 058
Nominal own shares 7 - 70 - 107
Share premium fund 8 35 318 535 440
Desided, not registered capitla decrease 8 0 - 500 000
Other contributed equity 8 500 000 500 000
TOTAL CONTRIBUTED EQUITY 600 305 600 390
Retained earnings
Other equity 8 3 444 23 149
Total retained earnings 3 444 23 149
Total equity 8 603 749 623 539
Liabilities
Liabilities to credit institutions 10 0 2 089
Liabilities to suppliers 1 675 1 990
Public taxes owed 1 107 162
Other short term debt 12 59 580 11 069
Provision for dividend 8 48 741 25 980
Total short term liabilities 111 102 41 290
Total liabilities 111 102 41 290
TOTAL EQUITY AND LIABILITIES 714 852 664 829
Oslo, 21 March 2013
Stig Grimsgaard Andersen Chairman
Selma Kveim Board member
Stig Martin Board member
Veroslav Sedlak Board member
Karl-Erik Staubo Board member
Anne Ma Sødahl Wessel Board member
Tine Gottlob Wollebekk Board member
Osvaldo Chamorro Board member
Göran Rönnbäck Board member
Håvard Kristiansen Board member
Vidar Låte CEO
Cash flow statement
(NOK 1.000) Noter 2012 2011
Cash flow from operating activities
Annual profit 28 875 14 659
Adjusted for:
- Taxes 9 - 13 272 - 9 159
- Depreciations 2 770 545
- Group contribution and dividend entered as financial earnings 4 - 24 636 - 18 943
Payment of dividend 4 6 822
Payment of interest on loan 14 816 1 401
Changes in working capital:
- Accounts receivables and other receivables 12 700 14 676
- Trade accounts payable and other short term liabilities - 315 - 494
Change in other accruals 5 555 - 3 288
Net cash flow from operating activities 17 316 - 604
Cash flow from investment activities
Payment for purchase of fixed assets 2 - 1 144 - 4 403
Received interest long term receivables 14 1 896
Net cash flow from investment activities - 1 144 - 2 507
Cash flow from financial activities
Receipt of group contributions 12 032 11 121
Purchase/sale of own shares 198 - 44
Payment of dividend - 25 980
Change in withdrawals from group account 41 689 - 45 805
Net cash flow from financial activities 27 940 - 34 728
Net change in cash and cash equivalents 44 111 - 37 840
Balance of cash and cash equivalents as at 01.01 543 38 383
Balance of cash and cash equivalents as at 31.12 44 655 543
Note 1 Accounting principles The company’s accounts have been prepared in accordance with the Norwegian Accounting Act and good accounting practice in Norway. The main standards are described below. The use of estimates In the preparation of these accounts, the management has used estimates and prerequisites that have affected the profit and loss account and the valuation of assets and debt as well as unsecured assets and obligations on the balance date in accordance with good accounting practice. Foreign currency Transactions in foreign currency are converted at the rate of exchange at the time of the transaction. Monetary items in foreign currency are converted to Norwegian kroner by using the rate of exchange on the balance date. Non-monetary items which are measured at historical exchange rates expressed in foreign currency are converted to Norwegian kroner by using the exchange rate at the time of transaction. Non-monetary items which are measured at fair value expressed in foreign currency are converted to the exchange rate determined at the time of the balance. Foreign currency fluctuations are recognised in the profit and loss account continuously over the accounting period. Criteria for recognition of income Income is recognised when it is earned, i.e. when the claim for payment arises. This takes place when the service is provided, as the work is carried out. Income is recognised by the value of the payment on the date of transaction. Tax Tax costs are presented together with the ordinary pre-tax result. Tax costs consist of payable tax and changes to deferred tax. Deferred tax/tax advantages are calculated on all differences between accounting and tax value on assets and debt. Deferred tax is calculated as 28% on the basis of the temporary differentials that exist between accounting and tax values and tax deficits to be carried forward at the end of the financial year. Net deferred tax advantages is recognised to the extent that it is probable that it will be utilised. Payable tax and deferred tax are allocated in the profit and loss account to equity to the extent that the tax entries relate to equity transactions. Classification and valuation of balance sheet items Current assets and short-term debt include items which become due for payment within a year after the date of acquisition and items associated with the goods cycle. Other items are classified as fixed asset/long-term debt. Current assets are valued at the lower of acquisition cost and fair value. Short-term debt is recognised in the balance sheet at the nominal amount at the time it is taken out. Fixed assets are valued at acquisition price, but are written down to fair value if the decrease in value is not expected to be temporary. Long-term debt is recognised in the balance sheet at the nominal amount at the time of establishment. Fixed assets Fixed assets are recognised in the balance sheet at acquisition cost minus the accumulated ordinary depreciation and amortisation. Fixed assets are recognised and depreciated on a straight-line basis over the anticipated life of the asset. Direct maintenance of equipment is recognised continuously as an expense under operating expenses, while increased costs or improvements are added to the equipment’s price and amortised concurrently. If the recoverable value of the equipment is lower than the recognised value, depreciation is carried out to the recoverable amount. Recoverable amount means the highest of net sales price and value in use. Value in use is the current value of future cash flows that the asset is expected to generate. Subsidiaries/associated companies/companies under joint control Subsidiaries, associated companies and companies under joint control are assessed using the cost method in the company accounts. Investments have been assessed at their share acquisition price unless write-down has been necessary. Write-down to fair value has taken place when a decrease in value is due to factors that are not deemed to be temporary and when it is deemed necessary in accordance with good accounting practice. Write-down is reversed when the basis of the write-down no longer exists. Dividends, group contributions and other distributions from subsidiaries are recognised in the same year as appropriated in the giver’s accounts. If the dividend/group contribution exceeds the percentage share of earned income after the date of acquisition, the excess represents repayment of invested capital and payments are deducted from the investment in the balance sheet. Trade debtors Trade debtors and other debts are recognised in the balance sheet at their nominal value after deductions for provision for expected loss. Provision for losses is made on the basis of individual assessment of each debt. In addition, an unspecified provision is made for the remaining trade debtors to cover assumed loss.
Cash and cash equivalents Cash and cash equivalents for the company comprise cash, separate company bank deposits and net overdraft balance on the group account. The difference between net balance on the company's overdraft and net balance in total on the group account is presented as an internal balance within the group. Short-term positions Short-term positions (shares and units as current assets) are valued at the lower of cost or fair value on the balance sheet date. Dividends and other distributions from the companies are recognised as other financial income. Leasing Rental agreements are assessed as financial or operational leasing based on an evaluation of the individual agreement. Equipment covered by rental agreements deemed to be financial leasing is recognised in the balance sheet and depreciated as ordinary business equipment. Payment of the rental liability is recognised as long-term debt. The liability is reduced by paid rent after deduction of calculated interest costs. Operational leasing agreements are recognised in the balance sheet only to the extent that advance payment has been made to the leaser. The rent is classified as operating expenses and is distributed on a straight-line basis over the rental period. Transactions with close associates Transactions between group companies take place subject to standard market terms. Cash flow statement The cash flow statement has been prepared using the indirect method. This means that the analysis is based on the unit's annual results in order to present cash flow from ordinary operations, investment activity and financing activity. Note 2 Fixed assets
Machinery
NOK 1.000) and equipment Total
Acquisition costs as at 01.01 6 444 6 444
Additions 1 144 1 144
Acquisition costs 31.12. 7 588 7 588
Accumulated depreciation 31.12. - 2 379 - 2 379
Book value as at 31.12 5 207 5 207
Depreciation for the year 770 770
The company uses straight-line depreciation for all fixed assets. The useful life of machinery and fittings is calculated as 3-10 years. Note 3 Segment information (NOK 1.000)
Geographical distribution of income 2012 2011
Norway 13 770 8 999
Sweden 2 013 1 512
Finland 1 529 1 205Total 17 313 11 716
The company’s income in 2012 and 2011 relates mainly to sales to group companies.
Note 4 Subsidiaries (NOK 1.000)
Company Ownership voting share
Registered office Acquistion cost
Acc. write downs
Value recognised on balance sheet 2012
Income from investment in
subsidiaries
Goodtech Intressenter AB 100,0 % Sweden 357 884 -74 577 283 307
Goodtech Environment Sørumsand AS 100,0 % Norway 9 661 -163 9 499 4 608
Goodtech Industry Holding AS **) 100,0 % Norway 123 501 -7 487 116 014 13 206
Goodtech Environment AB 100,0 %Åland
(Finland)21 822 -8 699 13 123 6 822
Goodtech Solutions AB 100,0 % Sweden 66 806 -7 885 58 921
Total 579 674 -98 810 480 864 24 636
*) Impairments in Goodtech Environment Sørumsand AS and Goodtech Industry Holding AS are related to previously received contributions which then exceeded earned income in the period of ownership, and were treated as repayment of invested capital. **) Income for the year on investments in subsidiaries consists of contributions from the subsidiaries Goodtech Projects & Services AS and Goodtech Products AS. These companies are 100% owned by Goodtech Industry Holding AS. Cronus Elmatikk was merged with Goodtech Industry Holding AS in 2012.
Note 5 Balance between companies within the group (NOK 1.000)
Receivables 2012 2011
Loan to group companies*) 89 007 69 135
Accounts receivables group 10 547 6 421
Other short term receivables group 42 431 74 674
Total 141 985 150 230
Liabilities 2012 2011
Liabilities to suppliers within the group 396 926
Other short term debt group 45 470 7 899
Total 45 866 8 826 *) Consists of loans to Goodtech Industry Holding AS of NOK 85 million and loans to Goodtech Solutions AS of NOK 4 million. The loans are due for payment 30 days after demand has been made by the lender. Other balances between Group companies are mainly related to the purchase and sale of products and services as well as contribution requirements. These debts fall due for payment within one year. The Group's Norwegian and Swedish subsidiaries form part of the parent company's group account arrangement with SEB. As of 31.12.2012, the subsidiaries were NOK 43.7 million in credit on the Group account (as of 31.12.2011: NOK 6.4 million). This item has been classified as short-term Group debt and forms part of other short-term debt.
Note 6 Bank deposits (NOK 1.000) 2012 2011
Bank deposits within group account 43 778 0
Bank deposits outside group account 876 543
Total bank deposits 44 654 543
NOK 716,000 of company funds are bound up in owed tax. The corresponding amount as at 31.12 last year was NOK 543,000. See also note 17 to the consolidated accounts.
Note 7 Share capital For information on share capital/shareholders in the company/own shares please see note 16 to the consolidated accounts. Note 8 Equity
Share Own Premium Capital Other contrib. Other
capital shares fund decrease equity equity Total
Equity as at 1.1 65 058 - 107 535 440 - 500 000 500 000 23 149 623 538
Provisions on dividend - 48 741 - 48 741
Change in own shares 37 161 198
Registered capital decrease*) - 500 000 500 000
Annual profit 28 875 28 875
Other changes - 122 - 122Equity as at 31.12 65 058 - 70 35 318 0 500 000 3 444 603 749
A dividend of NOK 1.50 per share for the 2012 financial year is proposed, totalling NOK 48,7 million. *) The reduction of the share premium fund with transfer to other equity was recorded in the Norwegian Company Register on 16 March 2012.
Note 9 Tax (NOK 1.000)
Annual tax is distributed as follows 2012 2011
Tax payable 0 0
Change to deferred tax/deferred tas advantage - 13 272 - 9 159
Total tax costs - 13 272 - 9 159
Calculation of annual tax basis
Profit before tax 15 603 5 500
Permanent differences *) - 6 842 133
Change in temporary differences - 1 090 - 1 551
Used loss to carry forward - 7 671 - 4 081
Annual tax basis 0 0
Summary of temporary differences
Current assets/short term liabilities - 76 - 95
Fixed assets 272 -800
Loss to carry forward -148 631 -156 301
Total -148 435 -157 196
Calculated deferred tax advantage - 41 562 - 44 015
Of which deferred tax advantage not recognised on balance sheet 0 15 725
Deferred tax advantage recognised on balance sheet - 41 562 - 28 290
Reconciliation of effective tax rate
28 % tax on pre-tax profit 4 369 1 540
Permanent differences (28%) *) - 1 916 37
Changes to deferred tax advantage not recognixed on balance sheet - 15 725 - 10 736
Calculated tax costs - 13 272 - 9 159 *) Includes proceeds from Group companies and non-deductible costs.
Deferred tax benefits mainly relate to tax losses. The Group has updated its assessment of the recognition of deferred tax benefits associated with the parent company's tax losses. Based on the positive developments in the Group and opportunities for tax planning in the form of Group contributions, the parent company has decided to capitalise the remaining portion of not previously recognised deferred tax benefits.
Note 10 Charges and guarantees The Group's Norwegian and Swedish subsidiaries are included in the parent group’s financial arrangement with SEB. As of 31 December 2012, the Group's deposits under the operating credit facility under this arrangement constitute NOK 44.6 million. Subsidiaries' balances with the parent company under the group financial arrangement is shown in Note 5. For further information about the Group's loans and credit facilities, see Note 17 to the profit and loss account. Goodtech ASA has a bank guarantee framework that is also used by its subsidiaries. The total guarantee framework is NOK 350 million, where NOK 217.3 million had been drawn on 31 December 2012. On behalf of its subsidiaries and as part of normal operations, Goodtech ASA from time to time provides customers and suppliers with guarantees. For mortgages and guarantees, see Note 17 to the Group profit and loss account. Note 11 Salary costs, number of employees, remuneration, loans to employees etc. (NOK 1.000) Salary costs 2012 2011
Salaries 13 802 11 033
Employer contribution 1 692 1 836
Pension cots 655 547
Other benefits 1 912 2 351
Total 18 060 15 766
The company had 20 employees as at 31.12.2012 and average number of employees over the year was 18. For information on remuneration for the board and management employees please see note 23 to the consolidated accounts. Compulsory occupational pension - OTP The company has an agreement on a defined contribution pension, the Compulsory Occupational Pension (OTP). The scheme meets statutory requirements for compulsory occupational pensions. The scheme includes all employees. Pension premium paid is recognised continuously over the year. Remuneration to auditor 2012 2011
Auditor's fee 410 571
Other certification services 12 19
Tax consultancy 137 14
Other non-audit services 122 255 Other certification services was in 2011 charged to equity. VAT is not included in the auditor's fee.
Note 12 Other short term debt (NOK 1.000) Other short term debt 2012 2011
Short term debt group *) 43 778 7 899
Holiday allowance owed 2 119 1 552
Accrued costs 1 777 1 246
Other short term debt **) 11 905 372
Total other short term debt 59 580 11 069 *) See note 5 **) including draft on credit facility of NOK 10,101,000.
Note 13 Other operating expenses (NOK 1.000)
Other operating expenses 2012 2011
Rent and premises 1 173 1 113
Travel expenses 1 064 954
Car expenses 233 184
Sales and marketing expenses 678 338
Foreign services etc. 5 489 7 587
Postage and telephone 370 424
Other operating expenses 1 739 1 468
Total operating expenses 10 746 12 067 Note 14 Finansial income / finansial costs (NOK 1.000)
Financial income 2012 2011
Interest income within the group 3 508 3 650
Other interest income 438 747
Other financial income 0 304
Total 3 946 4 701
Financial costs 2012 2011
Other interest costs 315 994
Other financial costs 400 481
Total 714 1 475 Note 15 Financial market risk The company does not use financial instruments for the management of financial risk. Interest rate risk Interest rate risk arises in the short and medium term as a result of the company’s debt being at a variable rate. Currency risk The company is at low risk from developments in currency exchange rates. Loans to companies in the group is mainly in Norwegian kroner.
Note 16 Close associated The purchase and sale of goods and services between group companies and close associates are all on market terms. Loans between group companies are based on market terms. No payment has been paid to close associates outside the group companies and employees in 2012. See note 23 in the consolidated accounts for a detailed view of transactions with close associates.
Declaration from the Board and CEO
The board and CEO have today reviewed and approved the Annual Report and Annual Accounts for Goodtech ASA, the group and the parent company, as at 31 December 2012. The annual accounts for the group have been produced in accordance with the EU approved IFRSs and related interpretation statements and the Norwegian information requirements contained in the Norwegian Accounting Act and which must be used as at 31.12.2012. The annual accounts for the parent company have been produced in accordance with the Norwegian Accounting Act and Norwegian accounting practice as at 31.12.2012. The annual report for the group and parent company comply with the Norwegian Accounting Act and Norwegian accounting practice No. 16 as at 31.12.2012. To the best of our conviction: - these annual accounts for 2012 for the parent company and the group meet all current accounting standards - the information contained in the accounts provides a true picture of the group’s assets, debt and financial position
and results as a whole as at 31 December 2012 - the annual report for the group and parent company provides a true summary of
- the developments, results and position of the group and parent company - the most important risk and uncertainty factors facing the group and company.
Oslo, 21 March 2013 Stig Grimsgaard Andersen Chairman
Selma Kveim Board member
Stig Martin Board member
Veroslav Sedlak Board member
Karl Erik Staubo Board member
Anne Ma Sødahl Wessel Board member
Tine Gottlob Wollebekk Board member
Osvaldo Chamorro Board member
Göran Rönnbäck Board member
Håvard Kristiansen Board member
Vidar Låte CEO
PricewaterhouseCoopers AS, Postboks 748 Sentrum, NO-0106 OsloT: 02316, org. no.: 987 009 713 MVA, www.pwc.noStatsautoriserte revisorer, medlemmer av Den norske Revisorforening og autorisert regnskapsførerselskap
To the Annual Shareholders' Meeting of Goodetch ASA
Independent auditor’s report
Report on the Financial Statements
We have audited the accompanying financial statements of Goodetch ASA, which comprise thefinancial statements of the parent company and the financial statements of the group. The financialstatements of the parent company comprise the balance sheet as at 31 December 2012, and the incomestatement for the year then ended, and a summary of significant accounting policies and otherexplanatory information. The financial statements of the group comprise the balance sheet at 31December 2012, income statement, changes in equity and cash flow for the year then ended, and asummary of significant accounting policies and other explanatory information.
The Board of Directors and the Managing Director’s Responsibility for the Financial Statements
The Board of Directors and the Managing Director are responsible for the preparation and fairpresentation of the financial statements of the parent company in accordance with NorwegianAccounting Act and accounting standards and practices generally accepted in Norway, and for thepreparation and fair presentation of the financial statements of the group in accordance withInternational Financial Reporting Standards as adopted by EU and for such internal control as theBoard of Directors and the Managing Director determine is necessary to enable the preparation offinancial statements that are free from material misstatement, whether due to fraud or error.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. Weconducted our audit in accordance with laws, regulations, and auditing standards and practicesgenerally accepted in Norway, including International Standards on Auditing. Those standards requirethat we comply with ethical requirements and plan and perform the audit to obtain reasonableassurance about whether the financial statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosuresin the financial statements. The procedures selected depend on the auditor’s judgment, including theassessment of the risks of material misstatement of the financial statements, whether due to fraud orerror. In making those risk assessments, the auditor considers internal control relevant to the entity’spreparation and fair presentation of the financial statements in order to design audit procedures thatare appropriate in the circumstances, but not for the purpose of expressing an opinion on theeffectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness ofaccounting policies used and the reasonableness of accounting estimates made by management, aswell as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis forour audit opinion.
Independent auditor's report - 2012 - Goodetch ASA, page 2
(2)
Opinion on the financial statements of the parent company
In our opinion, the financial statements of the parent company are prepared in accordance with thelaw and regulations and present fairly, in all material respects, the financial position for Goodetch ASAas at 31 December 2012, and its financial performance for the year then ended in accordance with theNorwegian Accounting Act and accounting standards and practices generally accepted in Norway.
Opinion on the financial statements of the group
In our opinion, the financial statements of the group present fairly, in all material respects, thefinancial position of the group Goodetch ASA as at 31 December 2012, and its financial performanceand its cash flows for the year then ended in accordance with International Financial ReportingStandards as adopted by EU.
Report on Other Legal and Regulatory Requirements
Opinion on the Board of Directors’ report and statement of corporate governance principles andpractices
Based on our audit of the financial statements as described above, it is our opinion that theinformation presented in the Board of Directors report and statement of corporate governanceprinciples and practices concerning the financial statements and the going concern assumption, andthe proposal for the allocation of the profit is consistent with the financial statements and complieswith the law and regulations.
Opinion on Registration and Documentation
Based on our audit of the financial statements as described above, and control procedures we haveconsidered necessary in accordance with the International Standard on Assurance Engagements ISAE3000 “Assurance Engagements Other than Audits or Reviews of Historical Financial Information”, it isour opinion that management has fulfilled its duty to produce a proper and clearly set out registrationand documentation of the company’s accounting information in accordance with the law andbookkeeping standards and practices generally accepted in Norway.
Oslo, 21. March 2013PricewaterhouseCoopers AS
Bjørn LeiknesState Authorised Public Accountant (Norway)
Note: This translation from Norwegian has been prepared for information purposes only.
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