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2011 ANNUAL REPORT
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It pays to keep it bottled up
2011 ANNUAL REPORT
Year 2011
Annual and Group Accounts
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The annual accounts, which have been prepared by the company’s board of directors and management, must be read together with the directors and auditor’s report. When actual figures are not available/certain at the time of presenting the accounts, generally accepted accounting standards require that the management calculated the best possible estimate for use in the annual accounts. There may be differences between the estimated and actual figures.
The 2011 annual accounts have been prepared in accordance with the Acts and regulations applicable as at 31 December 2011.
Unless otherwise stated, all amounts are in NOK 1 000.
The annual and group accounts for IKM
Gruppen AS consist of the following parts
for the parent company and group:
- Profit and loss account
- Balance sheet
- Cash flow statement
- Notes
Content
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Financial Accounts
Emplyees, Customers and Growth in Focus
History
HSE Policy
Organisation and Revenue
Director’s Report
Annual and Group Accounts for 2011
Cash-Flow Statement
Notes
Auditor’s Report 2011
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Financial Accounts IKM group (NOK) 1000)
Profit and Loss account 2011 2010 2009 2008 2007 2006
Total operating revenues 3 186 637 2 357 513 2 406 786 2 262 875 1 985 352 1 871 076
Cost of goods 997 572 699 912 814 097 744 686 637 978 648 273
Payroll costs 1 474 334 1 132 973 1 095 112 1 019 912 909 356 784 612
Depreciation and amortization 201 711 165 165 169 165 125 624 87 330 83 179
Other operating costs 351 292 269 245 226 568 177 058 169 011 170 370
Operating profit 161 728 90 218 101 844 195 595 181 677 184 642
Net financial items -39 508 -22 715 -23 458 -100 652 -19 782 -6 505
Pre tax profit on ordianry activeties
122 220 67 503 78 386 94 943 161 895 178 137
Net extraordinary items - - - - -512 -
Pre tax profit 122 220 67 503 78 386 94 943 161 383 178 137
Taxes -51 121 -43 671 -20 622 -39 879 -54 423 -60 634
Profit for the year 71 099 23 832 57 764 55 064 106 960 117 503
Balance Sheet 31.12.2011 31.12.2010 31.12.2009 31.12.2008 31.12.2007 31.12.2006
Deferred tax advantage 29 274 66 206 11 943 10 275 12 891 11 390
Machinery, inventory and plant
582 700 606 636 318 536 308 296 213 484 146 363
Goodwill 725 336 748 139 770 568 770 916 728 323 745 388
Total financial assets 116 002 118 528 70 569 58 027 130 994 767
Total fixed assets 1 453 312 1 539 509 1 171 616 1 147 514 1 085 692 903 908
Inventories 103 394 89 411 31 855 39 747 24 975 21 269
Trade debtors 640 421 471 637 467 425 485 735 376 669 297 245
Other receivables 137 545 131 740 101 343 145 499 122 688 127 993
Cash at bank and in hand 113 071 156 859 115 697 191 845 202 505 230 354
Total current assets 994 431 849 647 716 320 862 826 726 837 676 861
TOTAL ASSETS 2 447 743 2 389 156 1 887 936 2 010 340 1 812 529 1 580 769
Total equity 827 457 731 199 724 063 702 094 647 879 545 034
Pension liabilities 7 260 7 670 12 287 12 287 12 775 9 833
Debt to credit institutions 621 016 726 202 491 612 555 789 594 218 564 953
Other long-term debt 30 609 17 390 13 764 14 006 2 032 19 346
Total long-term debt 658 885 751 262 517 663 582 082 609 025 594 132
Bank overdraft 322 776 379 850 179 828 226 124 192 821 35 006
Other short-term debt 638 625 526 845 466 382 500 040 362 804 406 597
Total current liabilities 961 401 906 695 646 210 726 164 555 625 441 603
Total liabilities 1 620 286 1 657 957 1 163 873 1 308 246 1 164 650 1 035 735
TOTAL EQUITY AND LIABILITIES 2 447 743 2 389 156 1 887 936 2 010 340 1 812 529 1 580 769
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Our objective is to make IKM an attractive
employer to professionals and to people who
possess special qualifications within selected
disciplines. Demanding customers will continually
provide us with challenging tasks that require
capability from our employees.
Our ambition is that all of our customers will
choose IKM as their preferred supplier of the
services and products we provide. Our companies
are ISO certified. IKM will continue to establish
new businesses, do acquisitions and alliances
in order to steadily develop IKM as a quality
supplier. Through close co-operation with our
customers and joint venture partners we
endeavour to deliver cost effective, high quality
solutions to our customers.
The IKM Group’s priority area is growth:
• Growth in sales
• Growth in profits
• Growth in the number of services supplied
Employees, Customers and Growth in Focus
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1989Foundation: Instrumentering Kalibrering og Måleteknisk Laboratorium AS (originally Hydrotech Laboratorium AS), renamed to IKM Laboratorium AS
1992Established: IKM Testing AS
1994Established: IKM Engineering & Kompetansesenter AS, IKM Mekaniske AS and IKM Kristiansund AS
1995Acquisitions: Scana Hydrotech AS and Alfred Paulsen Contracting AS
1996Acquisitions: IKM Engineering AS (Idavoll AS).Established: Dept. in Bergen for IKM Testing AS and IKM Laboratorium AS
1997Acquisitions: Gjerseth Elektro Contracting AS, Alltex AS (service dept) and Semco Industri AS. Established: IKM Stillas AS
1998Acquisitions: Kystbasen Vedlikeholds Senter AS and Subsea Design AS. Established: IKM Testing UK Ltd and IKM Testing Asia Pte. Ltd (Singapore)
1999Acquisitions: Visman AS and IKM Offshore Development AS (Offshore Development AS). IKM Mekaniske AS invests in new workshop in Jåttåvågen
2000Established: IKM Testing Canada Ltd. and Wellcon AS (34%)
2001Established: IKM Kran og Løfteteknikk AS
2002Acquisitions: Everclean International AS, Odim Hitecs dept. for Industrial-automation, Hitec Instrument (80%) and ACGS Pte. Ltd. in Singapore. Established: IKM Testing Spain SL. Share purchase: 34% of Midt-Norsk Stillas AS
2003Established: IKM Service AS and Merlin Subsea AS.Merger: IKM Stillas AS and IKM Visman AS merge with KAEFER Maritim AS. Change of name: KAEFER IKM AS.Share purchase: 23,29% of Rosenberg Verft AS
2004Acquisitions: IKM Larsen & Mortensen AS (Steinsvik Maskin-industri, dept. Stavanger), OIS Inspection AS, IKM Ocean Design AS 51% (former JP Kenny Norge AS) and Textrain (UK) Ltd.
2005Acquisitions: IKM Mekaniske Kristiansund AS (Noomas Offshore AS)Established: IKM Valves AS.Demerger: IKM Elektro AS demerges from IKM Gjerseth Elektro AS, which in turn changes name to IKM Automasjon AS.
2006Acquisition: IKM Instrutek AS (Instrutek AS) and IKM. Morgenstierne AS (Morgenstierne Tekniske AS). Established: IKM Testing Australia Pty. Ltd.
2007Acquisition: Subsea Management Systems merged with IKM Consultants AS (Offshore Development AS), IKM Testing dept. Harstad (Altinex Services AS), IKM Årdal Mekaniske AS (Årdal Mekaniske Verksted AS) and IKM Production Technology AS (Altinex Reservoir Technology AS). Established: IKM Production Technology Sdn. Bhd (Malaysia)Sale: IKM Automasjon AS and IKM Mekaniske AS, (fabrication dept.)
2008Acquisition: IKM DSC Engineering AS (DSC Engineering AS) (67%). Arne Bø Pedersen AS (dept. for bolt working) and Jacobsen Services AS merged with IKM Testng AS. Sale: KAEFER IKM AS and Rosenberg Verft AS (28,4%)
2009Acquisition: Moland Mekaniske AS.Established: IKM Subsea AS, IKM Operations AS, IKM Maskinering AS (merger of IKM Larsen & Mortensen AS, IKM Årdal Mekaniske AS and Moland Mekaniske AS)
2010Acquisitions: Project Partner AS, IKM Technique AS (Technique AS), IKM Miljøteknikk AS (Miljøteknikk AS) and IKM Haaland Group AS (Haaland AS, Industrigravøren AS, Haaland Elektronikk AS) and Chem Tech Services LtdEstablished: IKM Ocean Design Australia Pty Ltd 2011Acquisitions: Cleandrill AS, Ceragon Networks AS (instrument- and the calibration dept.), Electro Partner AS, Røntgenkontrollen AS and Norweld Control Services ASMerger: Electro dept. in Electro Partner AS merges with IKM Elektro AS, Marine dept. in ElectroPartner AS merges with IKM Instrutek AS, IKM Miljøteknikk AS merges with IKM Laboratorium AS, IKM Haaland Group AS merges with IKM Gruppen AS, Project Partner AS merges with IKM Consultans ASEstablished: IKM Cleandrill AS, IKM Subsea Singapore Pte LtdSale: Haaland Elektronikk AS
History
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• Zero injuries is our overall objective
• We shall instill trust and confidence among our customers and employees
• We shall follow acts and regulations, including ethic code of conduct
• HSE is the most important internal work area
• No operation has priority over safety
• HSE is a line responsibility in the entire organisation
• Everyone is responsible for their own safety and the safety of others
• We shall prevent pollution and reduce negative environmental impact
• We shall reduce the amount of waste and optimise the use of resources
We will achieve this through continuous improvement of all processes
and systems established in each organisation.
Together with our clients and suppliers we shall follow statutory
regulations and continually improve our procedures and routines in
environmental management. We believe that social commitment will
result in savings for our clients, and new business possibilities for the IKM Group.
Each IKM company shall establish its own objectives in order to live
up to the IKM Group’s overall policy.
Ståle Kyllingstad
CEO
HSE Policy
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The IKM Group
ELECTRICAL/ INSTRUMENT/ PROCESS
SUBSEA/ COMPLETION/COMMISSIONING
ENGINEERING/ OPERATIONS
FABRICATION/INSPECTION
0
500
1000
1500
2000
2500
3000
3500
2010200920082007200620052004200320022001200019991998199719961995199419931992199119901989 2011
4000
629
1346
1026
454
670
Mill. NOK
733
1521
1182
805
B2012
4500
547
IKM Elektro AS (Sola)
IKM Instrutek AS (Larvik)Dept. Sola
IKM Laboratorium AS (Tananger)Dept. BergenDept. OsloDept. Sotra
IKM Measurement Services Ltd. (Aberdeen)
IKM Measurement Services Asia Pte. Ltd. (Singapore) IKM Measurement Services Australia Pte. Ltd. (Perth)
IKM Production Technology AS(Sola)
IKM Production Technology Sdn. Bhd (Kuala Lumpur)
IKM Valves AS (Stavanger) (67%)Dept. Bergen
IKM Testing AS (Sola) Dept. BergenDept. KristiansundDept. Hammerfest
IKM Testing Asia Pte. Ltd. (Singapore)
IKM Testing Australia Pty. Ltd. (Perth)
IKM Testing Brasil LTDA (Rio de Janeiro)
IKM Testing Canada Ltd. (St. Johns)Dept. Halifax Dept. Alberta
IKM Testing Kazakhstan LLP (Atyrau)
IKM Testing Spain SL (Cadiz)
IKM Testing Poland Sp. z.o.o (Gdansk)
IKM Testing Thailand Co. Ltd. (Rayong)
IKM Testing UK Ltd. (Newcastle)Dept. Aberdeen
PT IKM Indonesia (Batam)
IKM Cleandrill AS (Straume) (51%)
IKM Subsea AS (Bryne)
IKM Subsea Malaysia Sdn.Bhd (Kuala Lumpur)
IKM Subsea Singapore Pte. Ltd. (Singapore)
IKM Consultants AS (Sola)Dept. BergenDept. HortenDept. Oslo
IKM DSC Engineering AS (Tranby) (67%)
IKM Kran og Løfteteknikk AS (Tananger)
IKM Ocean Design AS (Stavanger) (88%)Dept. Trondheim
IKM Ocean Design Australia Pty. Ltd (Perth) (88%)
IKM Operations AS (Sola)
IKM Service AS (Sola)
IKM Haaland AS (Vigrestad)
IKM Hvacesolutions AS (Stavanger) (51%)
IKM Industrigravøren AS (Vigrestad)
IKM Inspection AS (Stavern) Dept. GrenlandDept. Grimstad Dept. Kristiansand
IKM Røntgenkontrollen AS (Rolvsøy) (67%)
IKM Maskinering AS (Tau)Dept. SolaDept. Fyresdal
IKM Mekaniske AS (Stavanger)Dept. Nærbø
IKM Mekaniske Kristiansund AS (Kristiansund)
IKM Minic (Sandnessjøen)
IKM Technique AS(Sandnes) (68%)
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The turnover for IKM Invest comprises companies where IKM’s owner share is 34% or more.
IKM Invest
IKM EIENDOM AS
Commersial property Leased area 61.000 sq.m. Development projectsCommercial real estate (100.000 sq.m.)Recreational residentials (40 units)
Apartments / housing 20 rental units
Company investmentsSelvaag Bolig ASA (4,7%)
IKM INDUSTRI- INVEST AS
Company investments Noreco ASA (9%)North Energy ASA (3%)Acona AS (34%)Inwind AS (38%)Ingenium AS (34%)Grimstad Konserves AS (67%)Scanfarm AS (67%)
Funds Energy Ventures IIIEnergy Ventures IV
0
500
1000
1500
2000
2500
3000
3500
2010200920082007200620052004200320022001200019991998199719961995199419931992199119901989 2011
4000
629
1346
1026
454
670
Mill. NOK
733
1521
1182
805
B2012
4500
547
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Director’s Report IKMGruppen AS
Introduction
IKM Gruppen AS is the parent company for a
number of companies that mainly operate in the oil
and offshore industry, particularly focusing on
operation / maintenance and new construction.
The headquarters of IKM Gruppen AS are located
in the municipality of Sola. All the companies in the
IKM Gruppen AS Group are ISO certified.
IKM Gruppen operates in four main areas (see
www.IKM.com for more information):
• Electrical/ Instrumentation/ Process
• Subsea/ Completion/Commissioning
• Engineering/ Operation
• Fabrication/ Inspection
The majority of IKM’s activities are in the
Norwegian market. However, strong focus on
internalization in recent years has led to a
significant increase in sales outside Norway. The
company expects growth in all business areas in
Norway and internationally in the coming years.
Report on operations, annual accounts and financial status
In 2011, the Group achieved significant growth in
both turnover and profitability. There have been
revenues and earnings records both within a single
month and a single quarter. There has been a
steady improvement in the market through the
whole year and the order backlog also reached an
all-time peak. In 2011, the Group made several
structural changes in the organization in order to
make it easier to meet market trends and our
customers’ needs.
Year 2011
Director’s Report
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Electrical/ Instrumentation/ Process
•
The business area Electrical/ Instrumentation/ Process
mainly provides services, products and personnel within
the field of measuring technique, calibration, instru-
mentation, electrical and process.
This year’s trend in both turnover and profitability has
been satisfactory. In 2011, the main focus has been
new contracts within service, system building and the
maritime sector. Development internationally has been
positive.
Subsea/ Completion/Commissioning
•
The market situation within Subsea/Completion/
Commissioning is good and activity has increased
substantially through 2011 and especially in the second
half-year. Activity is expected to continue to increase in
2012. There has been good growth in the business area,
especially in the drilling, maintenance and modification
market. Several frame agreements with the main players
in the market provide good predictability.
Activity within production and operation of ROVs has
increased significantly in 2011. The order backlog in
this area is increasing and the profitability trend is good.
Activity is expected to continue its positive trend in this
market in the next few years, especially in the Norwegian
market.
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Year 2011
Director’s Report
Engineering/ Operations
•
Development in the business area Engineering/ Op-
erations has also been positive in 2011. Engineering,
Consulting and Operations have gradually achieved a
growing workload, due to increased activity in new con-
struction, subsea and the modification market. There has
been steady growth in the operations and maintenance
companies due to long-term service, maintenance and
operation support contracts with oil / operating companies.
Within the business area there is continuous focus on
interaction between the companies and activities in order
to improve efficiency and market focus. The results of
these efforts have been good. The business area antici-
pates growth in the market from oil / operating compa-
nies to contractors, on the Norwegian continental shelf
and internationally. Newly established IKM Ocean Design
Australia Pty Ltd will ensure growth in Australia.
Fabrication/ Inspection
•
In the autumn of 2010, it was resolved to establish the
Fabrication/ Inspection Division as the 4th division in the
Group, which includes companies that essentially engage
in traditional mechanical production and inspection.
During the year, IKM has strengthened its commitment
in the area of inspection through acquisition of Norweld
Control Services AS and Røntgenkontrollen AS. IKM
will continue to strengthen this business area. Haaland
Group – IKM Haaland Group AS, IKM Haaland AS and IKM
Industrigravøren AS are well integrated in the Group in 2011.
Traditionally, Haaland’s market has been onshore-based
industry, but the company has also turned its attention to
an increasing extent to the offshore market, or customers
that supply to the offshore industry. The Division has con-
solidated its position in machining and has closed down
operations at the branch in Arendal,
In 2011, the market improved for the whole Division and
the outlook for 2012 is good.
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Activity abroad has also had a positive trend in 2011. Several
IKM companies have established operations outside Norway
and more services are offered on the international market.
From a turnover point of view, growth has been at 13 per cent
and the order backlog has increased, especial in the second
half-year. The Board of Directors is pleased with developments
and expects activity abroad to continue to increase in the next
few years.
Inter-nationalistion
Indonesia
Thailand
Singapore
Malaysia
Kazakhstan
Australia
Poland
Norway
UK
Spain
Brazil
Canada
Electrical/Instrument/ProcessSubsea/Completion/ CommissioningEngineering/OperationsFabrication//Inspection
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Profit performance
In 2011, turnover in the Group totalled MNOK 3,187, compared with MNOK 2,358 in 2010, which is equivalent to a growth of 35 per cent. The Board of Directors is very pleased with the trend and further growth is anticipated in 2012. In 2011, revenues were divided among the four main areas as
follows:
• Electrical/ Instrumentation/ Process 16%
• Subsea/ Completion 39%
• Engineering/ Operation 32%
• Fabrication/ Inspection 13%
In 2011, operating profit was MNOK 161.7, compared with MNOK 90.2 in 2010. Before depreciation, profit from opera-tions (EBITDA) was MNOK 363, compared with MNOK 255 in 2010. The Board of Directors is also very pleased with the profitability trend.
Profit for the year after tax for the Group increased from MNOK 23.8 in 2010 to MNOK 71.1 in 2011.The cash flow analysis shows a cash flow from operations of MNOK -11.6 for the parent company and MNOK 242 for the Group.
For further information regarding revenues, earnings and cash flow, please refer to the financial statements and accompanying notes and cash flow analysis.
Financial risk
The Group is exposed to fluctuations in exchange rates, especially Canadian and Singapore dollars, Euro and GBP. The Group reduces its currency risk through balancing purchases and sales in the same currency and having no borrowing in foreign currency.
The parent company’s equity is affected by fluctuations in exchange rates through investments in subsidiaries.
There is also exposure to fluctuations in interest rates, as bank deposits and debt are at floating interest rates. As at 31 December 2011, around 40 per cent of the company’s non-current debt is secured at a fixed rate.
The Board of Directors considers the overall credit risk to customers as being low, as the majority of customers are large, financially sound companies in oil-related business. Historically, there have been few losses due to bad debts. As at 31 December 2011, gross credit risk was MNOK 726, compared with MNOK 518 at the same time in 2010.
Balance sheet and equity Goodwill of MNOK 671 has been recorded in the balance sheet. Good earnings and a strong market position in all the Group’s business areas mean that in the view of the Board of Directors it is justifiable to record goodwill at this value and to follow the original depreciation plan.
Furthermore, MNOK 29.3 has been entered as deferred tax assets. IKM Gruppen’s business areas all show positive earnings and the market outlook is positive. In the view of the Board of Directors, it is therefore prudent to recognize the tax asset in the balance sheet. In the interests of caution, tax assets related to losses in foreign countries have not been capitalized.
At year-end, equity amounted to MNOK 827.5, compared with MNOK 731.2 at the end of 2010 and equity ratio was 34 per cent. At year-end, equity for the parent company was MNOK 786.0, compared with MNOK 736.5 at the end of 2010. The Board of Directors is satisfied with the company’s financial
strength.
As at 31 December 2011, the Board of Directors considers the liquidity situation for both the parent company and the Group to be good.
In the view of the Board of Directors, the presented financial
statements for IKM Gruppen AS and the Group give a true and
fair view of the results in 2011 and of the financial position at
year-end. Pursuant to Section 3-3a of the Norwegian Account-
ing Act, it is confirmed that the business is a going concern and
this has been assumed in preparation of the annual accounts.
Year 2011
Director’s Report
14
The parent company
IKM Gruppen AS is a holding, support and administration company for the company’s subsidiaries and has active par-ticipation in management and strategy development of the underlying companies. This also implies the necessary funding of the subsidiaries. Turnover in IKM Gruppen AS mainly repre-sents management and administrative fees and IT services to the IKM companies. In 2011, total turnover was MNOK 31.5 with an operating profit of MNOK – 3.5. The company’s pre-tax profit was MNOK 18, while net profit was MNOK 16.2.
IKM Gruppen AS is owned 100% by Ståle Kyllingstad.
IKM Gruppen has been established as a strong and significant supplier and employer in the chosen business areas. In the future, the Board of Directors will focus on further profitable growth. For further information about each subsidiary, refer-ence is made to the individual companies’ annual reports.
Market outlook, strategy and future
The market outlook for the areas in which IKM Gruppen op-erates looks very good for the next few years. IKM Gruppen will continue the work done within the Group’s business areas and will continue to develop these both as regards services provided and geographical presence, both nationally and internationally.In 2011, there were five new acquisitions, one new establish-ment and one sale. Further acquisitions, combined with or-ganic growth will be relevant in order to achieve the Group’s growth ambitions for the future.
To strengthen IKM’s market position further, cooperation and alliances in conjunction with large projects are continuously being considered.
The order backlog in IKM Gruppen is good. The long-term future outlook for further profitable growth is good and the company has ambitions for further international growth.
The Group’s broad experience in connection with the suc-cessful implementation of both large and small projects has earned IKM Gruppen AS a good name in the market. The Board of Directors considers IKM’s possibilities to still be al-lowed to participate in large projects to be very good.
Operational risk
The company’s activities are strongly linked to the extent of field development, maintenance and modification projects in the oil and gas sector and this applies to Topside as well as Subsea.
Research and development
R&D in the IKM Group mainly concerns process and product improvements carried out in projects in each subsidiary.
Employees and environment
At the end of 2011, IKM Gruppen AS had 17 employees, while the Group employed 2,230 people. The company conducts periodic surveys to map the working environ-ment and job satisfaction among the employees. The Board of Directors considers the working environment in the company to be very good. In 2011, sickness absence in IKM Gruppen AS was at 1.0 per cent and 2.8 per cent for the Group. In 2011, there were 2 LT injuries, 13 cases requiring medical treatment, 10 first aid cases and 229 reported near misses. Health, safety and environment are important areas, on which the Board of Directors and the management continuously focus in order to improve working conditions and safety in the company.
In IKM Gruppen AS, 25 per cent of the employees are women, while in the Group the percentage of women is significantly lower. IKM Gruppen mainly engages in activi-ties that attract few female employees. However, women and men have equal opportunities to quality for all types of tasks and positions and promotion opportunities are the same. Salary reflects the individual’s qualifications, regardless of gender. There are no women on the Board of Directors.
Certain group companies use chemicals, etc., which may pollute the external environment. These companies have routines for collection and disposal of used chemicals and other toxic substances. Environmental accounts have been implemented to document this work. The company does not pollute the external environment.
Measures to prevent discrimination, etc.
The object of the Anti-Discrimination Act is to promote equality, ensure equal opportunities and rights and prevent discrimination based on ethnicity, national origin, descent, colour, language, religion or belief. The company works actively to promote the object of the Act in our business. The activities include recruitment, pay and work-ing conditions, promotion, development opportunities and protection against harassment.
15
Allocation of profit
The Board of Directors is satisfied with the Group’s
result of MNOK 62.3 and proposes that the profit
for the year in IKM Gruppen AS of MNOK
16,187,000 is allocated as follows:.
To other reserves MNOK 16 187 000.
Sola, 8 June 2012
Board of Directors of IKM Gruppen AS
Ståle Kyllingstad
Chairman/ CEO
Tollak Melberg
Director
Kenneth Hansen
Director
Year 2011
Director’s Report
16
•
17
2010 2011 2011 2010
23 322 31 480 Sales revenues 2 3 186 637 2 357 513
23 322 31 480 Total operating revenues 3 186 637 2 357 513
0 0 Cost of goods 997 572 699 912
14 555 18 764 6 Payroll costs 6 1 474 334 1 132 973
1 382 1 023 7 Depreciation of tangible / intangible fixed assets
7 201 711 165 165
18 278 15 241 6 Other operating costs 6 351 292 269 245
-10 893 -3 548 Operating profit 161 728 90 218
79 907 38 167 Income from subsidiaries 0 -1 954
4 267 5 839 14 Other interest income 8 873 9 296
0 0 Profit from investments in associated companies
-11 115 0
0 394 14 Other financial income 14 7 745 12 488
-17 092 -22 779 Other interest costs -38 863 -32 283
-196 -29 14 Other financial costs 14 -6 148 -10 262
55 993 18 044 Pre-tax profit 122 220 67 503
-20 987 -1 857 8 Tax costs 8 -51 121 -43 671
35 006 16 187 Profit before minority interests
71 099 23 832
0 0 Minority interests -8 797 -4 771
35 006 16 187 Profit for the year 62 302 19 061
Parent Note Note Group
Profit and loss account
Annual and Group Accounts 2011
18
Parent Note Note Group
Balance sheet
31.12.201031.12.2010 31.12.2011 31.12.2011 31.12.2010
ASSETS
Fixed assets
Intangible assets
16 148 8 Deferred tax asset 8 29 274 66 206
0 0 Contracts, licences, etc. 7 1 080 1 082
0 0 Trademarks 7 52 800 52 800
0 0 Goodwill 7 671 456 694 257
16 148 Total intangible assets 754 610 814 345
Tangible assets:
0 0 Land, buildings and other real property 7 0 109 000
1 881 1 485 7 Plant and machinery 7 582 700 497 636
1 881 1 485 Total tangible assets 582 700 606 636
Fixed asset investments
1 025 238 1 051 962 5 Investments in subsidiaries 0 0
40 000 40 000 15 Investments in associated companies 15 28 885 38 046
9 860 9 860 15 Investments in other shares 15 9 860 9 860
17 904 5 515 16 Loans to group companies 0 0
69 017 66 812 13 Other non-current receivables 13 77 257 70 622
1 162 019 1 174 150 Total fixed asset investments 116 002 118 528
1 163 916 1 175 782 Total fixed assets 1 453 312 1 539 509
Current assets
0 0 Inventories 3 103 394 89 411
Receivables
71 422 33 308 16 Group receivables 0 0
2 445 9 4 Trade receivables 4 640 421 471 637
0 2 030 Earned, not invoiced income 85 868 46 046
3 223 5 265 Other receivables 51 585 85 208
77 090 40 612 Total receivables 777 874 602 891
Investments
0 0 Market-based shares 91 39
0 0 Other financial instruments 0 447
0 0 Total investments 91 486
648 1 118 12 Cash and cash equivalents 12 113 071 156 859
77 738 41 730 Total current assets 994 431 849 647
1 241 654 1 217 512 TOTAL ASSETS 2 447 743 2 589 156
1 241 654 1 217 512 TOTAL ASSETS 2 447 743 2 389 156
Parent Note Note Group
Year 2011
Annual and Group Accounts
19
31.12.2010 31.12.2011 31.12.2011 31.12.2010
EQUITY AND LIABILITIES
Equity
Called-up, fully paid capital
100 100 9 Share capital 9 100 100
666 34 000 9 Share premium reserve 9 34 000 666
766 34 100 Total called-up, fully paid capital 34 100 766
Retained earnings
735 732 751 923 9 Other reserves 9 773 095 714 608
0 0 Minority interests 9 20 262 15 825
735 732 751 923 Total retained earnings 793 358 730 433
736 498 786 022 Total equity 827 457 731 199
Liabilities
Provisions for liabilities
0 0 8 Deferred tax 0 0
0 0 Leasing liabilities 7,10 359 430 317 109
0 0 Pension liabilities 6,10 7 260 7 670
0 0 Other liabilities 10 0 9 840
0 0 Total provisions for liabilities 366 690 334 619
Other non-current liabilities
200 000 200 000 10 Debt to financial institutions 10 261 586 409 093
7 183 5 449 Other non-current liabilities 10 30 609 7 550
207 183 205 449 Total other non-current liabilities 292 196 416 643
Current liabilities:
263 376 194 209 11 Credit facility 11 322 776 379 850
2 589 679 Trade creditors 203 120 148 485
16 598 -2 276 8 Tax payable 8 29 346 46 955
1 032 2 199 Unpaid government taxes 154 507 112 749
14 379 31 230 13 Other current liabilities 13 251 652 218 657
297 974 226 042 Total current liabilities 961 401 906 695
505 157 431 490 Total liabilities 1 620 286 1 657 957
1 241 654 1 217 512 TOTAL EQUITY AND LIABILITIES 2 447 743 2 389 156
Balance sheet
Parent Note Note Group
Ståle Kyllingstad
Chairman/ CEO
Tollak Melberg
Director
Kenneth Hansen
Director20
Parent Note Note Group
2010 2011 2011 2010
Cash flow from operations
55 993 18 044 Pre-tax profit 122 220 67 503
-12 423 -15 189 Tax paid for the period -31 590 -24 619
0 -30 026 Dividend/group contribution from subsidiaries carried to income 0 0
0 0 Value change - associated companies 9 161 0
1 382 1 023 Ordinary depreciation 201 711 165 165
-185 -1 504 Change in inventories, trade receivables and creditors -166 746 -60 120
0 0 Change in pension liabilities -410 -4 617
10 413 15 981 Change in other accrual accounting items 107 177 -47 182
55 179 -11 672 Net cash flow from operations 241 522 96 130
Cash flow from investment activities
230 0 Payments from sale of tangible assets 109 000 17 959
-106 -626 Payments for purchas of tangible assets via ordinary operations -217 623 -134 729
0 0 Payments for purchase of tangible assets via business acquisitions -31 693 -271 835
-41 451 -6 461 Payments for purchase of shares in subsidiaries -17 122 -78 273
-40 000 33 334 Payments from realisation of shares in subsidiaries 33 334 0
0 0 Payments for purchase of other investments 0 485
-81 327 26 246 Net cash flow from investment activities -124 104 -466 393
Cash flow from financing activities
-9 736 2 205 Change in non-current receivables -6 635 -10 884
-92 817 -1 734 Inc./outg. payment for establ./repay. of non-current
liab. via ord. operations
-91 966 -19 919
0 0 Inc./outg. payment for establ./repay. of non-current
liab. via bus. acquisitions
0 258 135
109 419 -69 167 Net change in credit facility -58 416 200 022
31 011 54 592 Net change in receivables - group 0 0
0 0 Share dividend received 0 0
0 0 Divident payments -4 741 0
-11 826 0 Capital reduction (-) / increase (+) 0 -11 826
26 051 -14 104 Net cash flow from financing activities -161 758 415 528
-97 470 Net change in cash and cash equivalents -44 340 45 265
745 648 Cash and cash equivalents as at 01/01 156 859 115 697
Cash and cash equivalents in acquired companies 3 985
0 0 Effect of foreign exchange rate -3 433 -4 103
0 0 Errors from previous years 0 0
648 1 118 Cash and cash equivalents as at 31/12 113 071 156 859
Cash flow statement
Parent Group
Year 2011
Annual and Group Accounts
21
Accounting principles
The annual and group accounts have been based on the funda-mental principles relating to historical cost, comparability, going concern, congruence and caution. Transactions are reported in the accounts at the value of the payment on the transaction date. Income is allocated to net income when it is earned and costs are grouped with earned income. The accounting princi-ples are explained further below.
Consolidation principles Consolidated companies
The group accounts include IKM Gruppen AS (parent company) and subsidiaries, ref. note 5 for a complete list.
The group accounts show the companies’ financial situation, profit from activities for the year and the cash flows as a totalfinancial unit. Standard accounting principles have been used for all companies in the Group.
Elimination of internal transactions
All significant transactions and inter-company balances have been eliminated.
Investments in subsidiariesInvestments in subsidiaries are recognized in the company ac-counts using the cost method.
Inventories
Inventories are valued according to the average cost.
Elimination of assss in subsidiaries
Assets in subsidiaries are eliminted in the group accounts according to the acquisition method. The difference between cost price of the assets and the book value of nest assets on the acquisition date are analysed and referred to each balance sheet item in accordance with the fair value. Any additional price due to expectations for future earnings is entered as goodwill and depreciated in the profit and loss account in line with the underlying situation and the anticipated economic lifetime.
Conversion of foreign subsidiaries
When translating foreign companies’ annual accounts from for-eign currency into NOK, the balance sheet items are translated at the rate of exchange at year-end and profit and loss items are translated at the average rate for the financial year. The differ-ence that arises by translating the company’s incoming equity and the profit for the year at a different exchange rate from the outgoing equity, is usually recognized in the acounts as a correction to the group’s equity.
Minority interests
The minority interests’ share of the profit after tax and equity has been shown as separate items in the profit and loss account and balance sheet.
Associated companies
Associated companies means companies where the group has a 20-50% stake, where the investment is long-term and strategic and where the group can exercise significant influence. Associ-ated companies are incorporated in the group accourding to the equity method and at cost price in the company accounts. The group’s share of the profit in an associated company is based on the profit after tax in the associated company less any deprecia-tion on added values that are due to the cost price of the equity sake being higher than the acquired share of the book equity. In the profit and loss account, the share of profit in the associated company is shown under financial items. In the balance sheet, assets in associated companies are shown under fixed assets.
General accounting principles Investments in shares
Market-based shares are recognized in the accounts at cost price. Carrying to and charging against income (matching)
As a rule, income is carried to net income when it has been earned. Expenses are grouped with and charged against income at the same time as the income to which the expenses can be referred. Expenses that cannot be referred directly to income, are charged against income when these arise. Operating rev-enues are reported net, less taxes directly associated with the sale. Assets and liabilities
Assets/liabilities associated with the operating cycle and items that fall due for payment within a year of the balance sheet date, have been classified as current assets/liabilities. Valuation of current assets/liabilities uses the lower/higher value of the purchase cost and fair value. The fair value has been defined as the anticipated future sales price less the anticipated future sales costs. Other assets are classified as fixed assets. Fixed assets are valued using the purchase cost. Fixed assets that decrease in value are depreciated. The fixed asset is written down if the change in value is transitory. The same principle usually applies to debt items.
Notes
Note 1
22
Cash flow statement
The cash flow statement has been prepared according to the indirect method. Cash and cash equivalents include cash in
hand and at bank.
Tangible and intangible fixed assets
Tangible assets are recognized in the balance sheet at the purchase price less accumulated depreciation and write-downs. If the fair value of a fixed asset is lower than the book value, and this is not due to temporary circumstances, the fixed asset is written-down to the fair value.
Ordinary depreciation has been calculated on a straight-line basis over the fixed asset’s lifetime, based on the historical cost price.
Production contracts/goods
Carrying to income for projects is done on an ongoing basis. This means that carrying to income is done according to the degree of completion, as the work is carried out. This means that the accrued share of the project’s anticipated profit is carried to income. The degree of completion is established on the basis of the completeed production. For projects that are expected to give a loss, the whole anticipated loss is charged against income. Stock is valued at the lower of the purchase price and the fair value.
ReceivablesReceivables are entered at the nominal value less anticipated loss.
Inventories
Inventories are valued according to the average cost.
Deferred tax asset
Deferred tax is calculated on the basis of temporary differ-ences between accounting and tax-related values as at year-end. A nominal tax rate is used in the calculation. Positive and negative differences are assessed against each other within the same time interval.
A deferred tax asset arises if there are temporary differences that give rise to future tax deduction. The tax cost for the year comprises changes in deferred tax and deferred tax asset, together with tax payable for the fiscal year, adjusted for errors in previous years’ calculations.
Pension liabilities and costs
A new AFP early retirement scheme was established in 2010 to replace the old AFP scheme. Unlike the old scheme, the new scheme is not an early retirement scheme, but entitles the employee to a life-long benefit in addition to the ordi-nary pension. The employee may choose to take out the new pension from reaching 62 years of age, and may still continue to work, and it qualifies the employee for further pension if he or she works up to the age of 67 years. The new scheme is a defined benefit based multi-enterprise pension scheme and is financed as a premium, which is set as a percentage of wages. For the time being, there are no reliable measure-ments and allocation of liabilities and funds to the scheme. In accounts, the scheme is treated as a contribution-based pension scheme, where premium payments are charged against income on an ongoing basis, and no provisions have been made in the accounts as at 31 December 2011. De-fined benefit based pension plans are valued at the present value of future pension benefits, which in the accounts are regarded as earned on the balance sheet date. The pension assets are valued at the fair value.
The Norwegian companies in the group have provided contributions to the pension plans. The pension premium is charged against income when is incurred.
Cash items in foreign currency Cash items in foreign currency are value at the exchange rate on the balance sheet date. Leasing
Leasing agreements that extend over the anticipated economic lifetime of the fixed asset (financial leasing) are presented in the balance sheet as an asset, as part of the fixed assets and as non-current liabilities. Other leasing agreements (operational leasing) are charged against income on an ongoing basis.
Year 2011
Notes
23
Segment information
The group has the following distribution of sales revenues according to business areas:
Note 2
Business areas Completion /
Inspection
Engineering
/ Operations
Subsea /
Completion
Electrical/
Instrument-
ation/Process
Total
Sales revenues 415 782 1 016 488 1 247 661 506 706 3 186 637
Geographical areas Norway EU Asia/ Canada TotalAustralia
Sales revenues 2 926 362 124 724 109 046 26 504 3 186 637
Stock of raw material 20 358
Stock of finished products 30 800
Goods in progress 52 236
Total: 103 394
The following distribution of sales revenues among geographical areas
Note 3Inventories
Note 4Trade receivables
Trade receivables are valued at the nominal value less anticipated losses. Provisions for bad debts for the parent
company as at 31 December 2011 are TNOK 0, and TNOK 7 814 for the group.
24
Year 2011
Notes
Production facilities IKM Haaland AS
25
Note 5
Company Reg. office Acquis.
Date
Owner-
ship and
voting %
Cost
price
Profit
2011
Equity
as at
31/12/11
Book
value
IKM Testing AS * Sola 1992 100 % 662 060 58 161 131 769 662 060
IKM Cleandrill AS Straume 2011 51 % 3 000 - 3 230 3 000
IKM Testing UK Ltd. Newcastle 1998 100 % 554 -1 716 31 976 554
IKM Testing Australia Pty. Ltd. Perth 2006 100 % 205 4 778 -15 591 -
IKM Testing Canada Ltd. Newfoundland 2000 100 % 1 -1 362 10 734 -
Chem Tech Ltd. Nova Scotia 2010 100 % 4 640 27 -1 591 4 378
IKM Testing Asia Pte. Ltd. Singapore 1998 100 % 396 4 667 13 610 396
PT IKM Indonesia Kota Batam 2007 100 % 714 387 1 965 714
IKM Thailand Co. Ltd. Thailand 2009 100 % 392 1 422 1 173 392
IKM Testing Spain SL Poerto Real 2003 100 % 13 594 -2 741 25 755 13 554
IKM Testing Kazakhstan LLP Aktau 2008 100 % 54 -2 524 -7 980 -
IKM Equipment Kazakhstan LLP Aktau 2008 100 % - -108 -244 -
IKM Testing Polen Sp. z.o.o. Gdansk 2011 100 % 1 -22 -13 9
IKM Testing Brazil LTDA Rio 2011 100 % 1 -167 -267 32
IKM Testing Malaysia Kuala Lumpur 2011 100 % 1 -12 189 192
IKM Mekaniske AS * Stavanger 1994 100 % 44 000 1 726 20 797 45 384
IKM Mekaniske Kristiansund AS * Kristiansund 2005 100 % 13 370 -1 801 3 441 13 525
IKM Consultants AS * Stavanger 1999 100 % 66 000 12 833 19 524 57 425
IKM Kran og Løfteteknikk AS * Stavanger 2001 100 % 5 000 9 210 5 388 5 000
IKM Service AS* Sola 2003 100 % 23 000 7 002 5 459 18 573
IKM Inspection AS * Stavern 2004 89 % 11 610 2 397 6 802 12 881
IKM Ocean Design AS * Sandnes 2004 88 % 35 792 10 131 21 372 43 864
IKM Ocean Design Australia Pty. Ltd. Welshpool 2011 100 % 1 -2 340 -2 609 -
IKM Laboratorium AS * Sola 2006 91 % 81 180 19 905 93 908 80 951
IKM Measurement Services Ltd. Aberdeen 2004 100 % 700 876 -3 626 -
IKM Measurement Services Australia Pty. Ltd. Welshpool 2010 100 % 1 -1 172 -1 688 -
IKM Measurement Services Asia Ltd. Singapore 2009 100 % 1 -95 -1 049 88
IKM Valves AS** Stavanger 2005 67 % 6 245 4 910 11 532 6 245
IKM Elektro AS Stavanger 2006 100 % 2 331 -2 756 2 197 8 013
IKM Instrutek AS Larvik 2006 100 % 58 049 5 605 18 877 69 351
IKM Maskinering AS Tau 2007 100 % 45 472 -5 088 3 523 48 641
IKM Production Technology AS Bergen 2007 100 % 21 452 424 23 864 20 234
IKM Production Technology Sdn. Bhd. Malaysia 2007 100 % 464 490 1 622 2 714
IKM dsc Engineering AS * Drammen 2008 67 % 58 500 13 825 19 756 58 500
Merlin Subsea AS * Sola 2008 100 % - 12 1 950 -
IKM Subsea Operations AS Bryne 2010 100 % 110 409 5 681 -
IKM Subsea AS Bryne 2009 100 % 17 500 2 490 110 176 12 000
IKM Subsea Singapore Pte. Ltd. Singapore 2011 100 % 1 -2 045 3 479 5 412
IKM Operations AS * Sola 2009 100 % 110 11 581 8 753 6 210
IKM Technique AS * Sandnes 2010 68 % 11 958 1 271 3 614 11 968
IKM Haaland AS * Vigrestad 2011 100 % 174 021 -5 112 21 479 30 093
IKM Industrigravøren AS Vigrestad 2011 100 % 12 840 1 954 1 343 12 840
** IKM Valves AS is owned 51% by IKM Laboratorium AS and 16% by IKM Gruppen AS. IKM Gruppen AS’ cost price for the shares is 5 529 TNOK.
Total 1255 192
Total investments for the parent company (companies with *) 1 051 963
Investments in subsidiaries
Wages 15 752 12 156 1 205 048 927 378
Payroll tax 2 182 1 786 170 908 135 575
Pension costs 545 236 31 632 19 240
Other payments 285 377 66 745 50 780
Payroll costs 18 764 14 555 1 474 334 1 132 973
No. of employees 17 15 2 076 1 618
Remunerations (in NOK) General Mgr. Board members
Parent
Wages 1 686 80
Other remuneration 11 0
Total 1 697 80
Auditor
Parent Group
Statutory audit 63 1 816
Other attestation services 0 57
Tax advice 87 775
Other services outside auditing 918 1 691
Total 1 068 4 339
The auditor’s fees is ex. VAT
26
Note 6Payroll costs / No. of employees / Remunerations / Pensions, etc.
Wages 15 752 12 156 1 205 048 927 378
Payroll tax 2 182 1 786 170 908 135 575
Pension costs 545 236 31 632 19 240
Other payments 285 377 66 745 50 780
Payroll costs 18 764 14 555 1 474 334 1 132 973
No. of employees 17 15 2 076 1 618
Remunerations (in NOK) General Mgr. Board members
Parent
Wages 1 686 80
Other remuneration 11 0
Total 1 697 80
Auditor
Parent Group
Statutory audit 63 1 816
Other attestation services 0 57
Tax advice 87 775
Other services outside auditing 918 1 691
Total 1 068 4 339
The auditor’s fees is ex. VAT
No bonus, severance pay or the like as been agreed for the General Manager.The General Manager is also general manager in other companies in the group.
Payroll costs, etc. Parent Group
Year 2011
Notes
27
Contribution based schemes:
The Group is covered by the provisions of the Act relating to Mandatory Occupational Pension and has entered into pension agreements that meet the statutory requirements. Defined benefit based scheme treated as a contribution based scheme: A new AFP scheme was established to replace the old AFP scheme. Unlike the old scheme, the new scheme is not an early retirement scheme, but a scheme that provides a life-long addition to the ordinary pension. An employee may choose to take out the new pension on reaching 62 years of age, and may still continue to work, and the new scheme qualifies for further pension when an employee works up to 67 years. The new scheme is a defined benefit multi-enterprise pension scheme and is financed as premiums set as a percentage of wages. For the time being, there are no reliable measurements and allocations of liabilities and funds for this scheme. In the accounts the scheme is treated as a contribution-based pension scheme where premium payments are charged against income on an ongoing basis, and no provisions are made in the accounts as at 31 December 2011.
A calculation has been made as regards undercoverage in the old AFP scheme, which was resolved to be phased out in 2010.
It is only possible to take early retirement under the old scheme up to 31 December 2010. The gain from phasing out the scheme has been carried to income in 2010. When phasing out the old AFP scheme it was found that there was an undercover-age in the scheme. The member companies must cover this undercoverage through continuing to pay premiums for the next five years from 2010. The group’s share of the under- coverage has been estimated and an provision has been made in the accounts as at 31 December 2011. The total provision is 10 141 TNOK.
Defined benefit schemes
Calculations have been made relating to defined benefit schemes in accordance with Norwegian Accounting Standards (NAS 6 Pension costs) and the Norwegian Actuarial Association’s standard for actuarial calculations.
One company in the group has a defined benefit pension scheme. The scheme is an insured scheme, which includes 62 people. The scheme entitles members to defined future benefits. These mainly depend on the number of qualifying years, wage level on reaching retirement and the size of the public pension payment. The liabilities are covered through insurance schemes.
Group
28
Pension costs - defined benefit schemes 2011 2010
Present value of pension contrib., for the year 385 2 560
Interest costs on pension liabilities 46 318
Return on pension assets -122 -101
Accrued estimate differences 6 1 464
Accrued payroll tax 0 153
Once-only effect of transition to new AFP 0 -4 171
Net pension costs 315 223
31.12.2011 31.12.2010
Estimated pension liabilities 1 673 7 662
Pension assets -3 250 0
Estimate differences not recog. in the P&L account -1 304 -3 024
Accrued payroll tax 0 -101
Provisions to cover old AFP scheme 0 3 133
Net pension liabilities -2 881 7 670
Financial assumptions:Discount interest 3,80 % 5,40 %
Anticipated wage adjustment 3,50 % 4,50 %
Anticipated pension increase 0,10 % 4,25 %
Anticipated increase in public pension 3,25 % 4,25 %
Anticipated return on pension assets 4,10 % 5,80 %
Remaining pension cost for the year equals the annual premium on contribution-based pension schemes in the group
Reconciliation of the pension schemes’ funded status against amounts in the balance sheet
Generally used insurance assumptions have been used as a basis for actuarial assumptions for demographic factors and retirement. The pension liabilities in the balance sheet of 7 260 TNOK consists of a provision to cover undercoverage in the old AFP scheme (10 141 TNOK) less net pension assets in defined ben-efit schemes in the group (2881 TNOK). Mandatory occupational pension Under Norwegian law relating to mandatory occupational pen-sion, Norwegian companies in the group are obliged to have
an occupational pension scheme. These have a contribution-based scheme that meets the requirements under Norwegian law relating to mandatory occupational pension. Amounts charged against income correspond to the annual premium. PARENT Under Norwegian law, the company is obliged to have an occu-pational pension scheme and has a contribution-basedpension scheme that meets the requirements under Norwegian law relating to mandatory occupational pension. The amount charged against income corresponds to the premium for the year, which is NOK 545,000.
Year 2011
Notes
29
Note 7Tangible and intangible assets
Disposals 0
Purchase cost as at 31/12 6 529
Accumulated depreciation as at 01/01 4 021
Depreciation for the year 1 023
Disposals 0
Accumulated depreciation as at 31/12 5 044
Book value as at 31/12 1 485
Economic lifetime 3-5 years
Depreciation plan Linear
Group Land, buildings and
other real estate
Plant, machinery etc Goodwill/
Badwill
Contracts,
licences, etc
Total
Purchase cost as at 01/01 109 000 1 054 633 937 694 56 708 2 158 035
Additions - fixed assets 0 248 484 11 967 0 260 451
Disposals -109 000 -22 318 0 0 -131 318
Purchase cost as at 31/12 0 1 280 799 949 661 56 708 2 287 168
Accumulated depreciation as at 01/01 0 563 165 224 103 2 433 789 702
Depreciation for the year 0 147 215 54 101 395 201 711
Disposals 0 -12 282 0 0 -12 282
Accumulated depreciation as at 31/12 0 698 099 278 205 2 828 979 131
Book value as at 31/12 0 582 700 671 456 53 880 1 308 037
Economic lifetime 3-10 years 5-20 years 1-2 years 3-5 years
Depreciation plan Linear Linear Linear Linear
Capitalized lease agreements
Capitalized lease agreements included in
book value
352 439
Associated liability 359 430
The financial lease agreements have a term of 3-7 years. The group also lease other fixed assets for use in the operations. These have not been capitalized, as according
to generally accepted accounting standards, the lease agreements are not regarded as financial leasing.
Purchase cost Depreciation
2011
Book value
31/12
IKM Labratorium AS 78 713 3 775 56 624
IKM Elektro AS 5 443 191 2 676
IKM Valves AS 3 787 210 3 367
IKM Instrutek AS 36 164 2 441 19 695
IKM Maskinering 31 393 5 603 4 202
IKM Testing AS 541 623 28 036 376 794
IKM Subsea AS 27 845 1 491 23 570
IKM Mekaniske AS 41 394 2 070 31 045
IKM Mekaniske Kristiansund AS 8 152 408 6 113
IKM Service AS 11 802 590 8 852
IKM Ocean Design AS 30 466 1 603 26 194
IKM Kran og Løfteteknikk AS 2 033 102 1 524
IKM Inspection AS 13 154 849 11 333
DSC Engineering AS 48 244 2 412 39 801
IKM Consultants AS 34 905 1 668 28 108
IKM Production Technology Sdn Bhd 1 412 0 1 412
IKM Malaysia 0 0 0
IKM Technique AS 9 824 491 9 002
Chem Tech 3 646 195 3 451
IKM Haaland AS 8 119 812 7 307
IKM Industrigravøren 11 543 1 154 10 389
Total 949 661 54 101 671 456
Trademarks
31/12 Additions 31/12
IKM Labratorium AS 8 400 8 400
IKM Testing AS 24 000 24 000
IKM Mekaniske AS 3 600 3 600
IKM Mekaniske Kristiansund AS 1 500 1 500
IKM Service AS 2 250 2 250
IKM Ocean Design AS 1 200 1 200
IKM Kran og Løfteteknikk AS 750 750
IKM Inspection AS 750 750
DSC Engineering AS 1 950 1 950
IKM Consultants AS 8 400 8 400
Total 52 800 0 52 800
30
Tangible and intangible assets cont.
Book goodwill is related to the following investments:
Purchase cost Depreciation
2011
Book value
31/12
IKM Labratorium AS 78 713 3 775 56 624
IKM Elektro AS 5 443 191 2 676
IKM Valves AS 3 787 210 3 367
IKM Instrutek AS 36 164 2 441 19 695
IKM Maskinering 31 393 5 603 4 202
IKM Testing AS 541 623 28 036 376 794
IKM Subsea AS 27 845 1 491 23 570
IKM Mekaniske AS 41 394 2 070 31 045
IKM Mekaniske Kristiansund AS 8 152 408 6 113
IKM Service AS 11 802 590 8 852
IKM Ocean Design AS 30 466 1 603 26 194
IKM Kran og Løfteteknikk AS 2 033 102 1 524
IKM Inspection AS 13 154 849 11 333
DSC Engineering AS 48 244 2 412 39 801
IKM Consultants AS 34 905 1 668 28 108
IKM Production Technology Sdn Bhd 1 412 0 1 412
IKM Malaysia 0 0 0
IKM Technique AS 9 824 491 9 002
Chem Tech 3 646 195 3 451
IKM Haaland AS 8 119 812 7 307
IKM Industrigravøren 11 543 1 154 10 389
Total 949 661 54 101 671 456
Trademarks
31/12 Additions 31/12
IKM Labratorium AS 8 400 8 400
IKM Testing AS 24 000 24 000
IKM Mekaniske AS 3 600 3 600
IKM Mekaniske Kristiansund AS 1 500 1 500
IKM Service AS 2 250 2 250
IKM Ocean Design AS 1 200 1 200
IKM Kran og Løfteteknikk AS 750 750
IKM Inspection AS 750 750
DSC Engineering AS 1 950 1 950
IKM Consultants AS 8 400 8 400
Total 52 800 0 52 800
The trademarks are not depreciated, as it is not possible to calculate the time horizon for the value of the trademarks.
Goodwill is depreciated over 5 to 20 years, as it has been estimated that the added values from the acquisition will exist for more than 5 years
Year 2011
Notes
31
Note 8Tax payable has been calculated as follows:
Parent company Share
capital
Share premium
reserve
Other reserves Total
Equity as at 01/01 100 666 735 734 736 500
Capital increase 2011 33 334 33 334
Extraordinary dividend 0
Profit for the year 16 187 16 187
Equity as at 31/12 100 34 000 751 922 786 022
Group Share
capital
Share premium
reserve
Other reserves Minority
interests
Total
Equity as at 01/01 100 666 714 608 15 825 731 198
Change in equity for the year
Profit for the year 62 302 8 797 71 099
Capital increase 2011 33 334 33 334
Paument of divident -4 741 -4 741
Conversion differences -3 814 381 -3 433
Equity as at 31/12 100 34 000 773 095 20 262 827 457
2011 2010
Tax payable has been calculated as follows:
Pre-tax profit 18 044 55 993
Permanent differences 1 716 544
Dividend received -8 477 -37
Taxable dividend 254 0
Non-taxable dividend 0 -3 249
RM loss on realization of shares and other securities 0 5 221
Change in temporary differences 470 808
Use of forwardable loss* -11 950 0
Tax payable basis 58 59 280
Tax payable on profit for the year 16 16 598
Settlement - tax from previous years -2 292 0
Total tax payable in the balance sheet -2 276 16 598
2011 2010 2011 2010
Tax cost for the year has been calculated as follows:
Gross change in deferred tax 3 214 29 258 32 835 -17 325
Correction of tax from previous years 0 4 615 1 330 3 747
Tax payable -1 357 16 598 16 957 57 249
Tax cost on ordinary result 1 857 50 472 51 121 43 671
Reconciliation of tax cost
28% of pre-tax profit 5 052 15 678 34 222 21 948
Effect of permanent differences -3 195 694 16 673 17 028
Settlement of tax from previous years 0 4 615 1 377 2 500
Change in deferred tax asset not reported 0 0 0 5 279
Other items 0 0 -1 152 -37
Tax cost 1 857 20 987 51 121 46 718
Breakdown of deferred tax basis:
Differences that are not assessed:
Long-term items 0 -59 -61 168 -65 569
Short-term items -529 0 -39 884 6 267
Total temporary differences -529 -59 -101 052 -59 302
Forwardable loss 0 0 -3 499 -200 478
Deferred tax basis -529 -59 -104 551 -259 780
Deferred tax / tax asset -148 -16 -29 274 -72 738
Off balance sheet deferred tax asset 0 0 0 6 532
Capitalized deferred tax / tax asset -148 -16 -29 274 -66 206
Parentt
Parent Group
* Forwardable loss originates from merger in 2011, see note 17 for more information.
32
Note 9Equity and shareholder information
Parent company Share
capital
Share premium
reserve
Other reserves Total
Equity as at 01/01 100 666 735 734 736 500
Capital increase 2011 33 334 33 334
Extraordinary dividend 0
Profit for the year 16 187 16 187
Equity as at 31/12 100 34 000 751 922 786 022
Group Share
capital
Share premium
reserve
Other reserves Minority
interests
Total
Equity as at 01/01 100 666 714 608 15 825 731 198
Change in equity for the year
Profit for the year 62 302 8 797 71 099
Capital increase 2011 33 334 33 334
Paument of divident -4 741 -4 741
Conversion differences -3 814 381 -3 433
Equity as at 31/12 100 34 000 773 095 20 262 827 457
Note 10Non-current liabilities
The parent company has no liabilities that mature more than five years after the balance sheet date. MNOK 117.2 of the group’s liabilities mature more than 5 years after the balance sheet date.
Year 2011
Notes
Temporary differences associated with overseas subsidiaries, which give rise to a deferred tax asset, have not been capitalized, as future use of the tax assets is uncertain. Deferred tax asset is capitalized, as the company has made calculations, which show that it will use the tax asset in future. The connection between tax cost and tax calculated as an average nominal tax rate on pre-tax profit.
Tax payable: Parent Group
2011 2010 2011 2010
Tax payable on profit for the year 16 16 598 16 957 57 249
Tax payable related to group contribution 0 0 0 0
Tax payable - previous years -2 292 0 12 390 -10 294
Total tax payable as at 31/12 -2 276 16 598 29 346 46 955
Tax payable included in other current receivables
Tax payable under current liabilities 29 346 46 955
33
Note 11Security and guarantee liabilities
31.12.2011 31.12.2010 31.12.2011 31.12.2010
Secured book liabilities, etc.
Non-current liabilities to financial institutions * 200 000 200 000 261 586 409 093
Leasing liabilities 0 0 359 430 317 109
Current liabilities to financial institutions 194 209 263 376 322 776 379 850
Total 394 209 463 376 943 792 1 106 052
Book value of assets pledged as
security for secured debt:
Plant and machinery 1 485 1 881 582 700 364 751
Receivables 5 274 5 669 692 006 626 093
Inventories 0 0 103 394 84 697
Total 6 758 7 550 1 378 101 1 075 541
Parent Group
*The company’s shares in subsidiaries have been pledged as security for this debt. The parent company has provided surety for cash credit debt in IKM Subsea AS. As at 31 December 2011, MNOK 16.6 has been drawn on the credit facility. In addition, right of tenancy in IKM Mekaniske AS and IKM Testing AS has been provided as security for the debt. The group has provided surety for leased fixed assets. The Norwegian companies in the group have a credit facility totalling MNOK 430. The companies are jointly and severally liable for this debt. As at 31 Dec. 2011, MNOK 304.5 was withdrawn for the group as a whole.
Note 12Cash at bank
Of the total cash at bank, MNOK 1 for the parent company and MNOK 57.6 for the group is tied-up in tax withholdings.
31.12.2011 31.12.2010 31.12.2011 31.12.2010
Non-current receivables IKM Invest group 66 314 68 857 71 104 68 857
Current receivables IKM Invest group 499 160 499 1 765
Total receivable - close parties 66 812 69 017 71 603 70 622
Non-current liabs. against IKM Invest group 0 0 10 535 0
Current liabs. against IKM Invest group 0 0 438 0
Other short-term 0 11 825 0 11 825
Total liabilities - close parties 0 11 825 10 973 11 825
34
Note 13Security and guarantee liabilities
The parent company and the group lease premises from IKM Eiendom AS, Tankbåtveien 1 AS, Stokkelandsmarka Holding AS, Skvadronveien 24 AS, Målebygget AS, Majestic Views SA, Ljosheimvein 3 AS, Bjorhaugsletta 22-85 AS, Forusbeen 248 AS, Tananger Næringspark AS and Hinnaverket Eiendom AS. These companies are 100% owned directly and indirectly by Ståle Kyllingstad. Rent for the premises has been set at the market price. Total rent paid from the IKM Gruppen group to the IKM Invest group is 39 415 TNOK. Inter-company balances:
31.12.2011 31.12.2010 31.12.2011 31.12.2010
Non-current receivables IKM Invest group 66 314 68 857 71 104 68 857
Current receivables IKM Invest group 499 160 499 1 765
Total receivable - close parties 66 812 69 017 71 603 70 622
Non-current liabs. against IKM Invest group 0 0 10 535 0
Current liabs. against IKM Invest group 0 0 438 0
Other short-term 0 11 825 0 11 825
Total liabilities - close parties 0 11 825 10 973 11 825
Parent Group
Note 14Financial income and costs
2011 2010 2011 2010
Agio gains 0 0 10 023 9 812
Agio losses -1 0 -6 626 -5 739
Total -1 0 3 398 4 073
Parent Group
For the group, agio gains and losses have been recognized in the accounts as part of other financial income and costs for the year in each company. Other interest income in the parent company includes NOK 1 741 346 in interest income from group companies and NOK 4 097 339 in interest income from close parties.
Year 2011
Notes
35
Note 15Investment in shares and associated companies
Note 16Inter-company balances - Receivables
In 2011, IKM Gruppen AS merged with IKM Haaland Group AS with accounting and tax effect from 1 January 2011. The merger took place with accounting and tax continuity. In 2011, IKM Products AS was merged with IKM Instrutek AS. The merger had accounting and tax effect from 1 January 2011. The merger took place with accounting and tax continuity. In 2011, Miljøteknikk AS was merged with IKM Laboratorium AS. The merger had accounting and tax effect from 1 January 2011. The merger took place with tax continuity and from an accounting point of view with group continuity. In 2011, Project Partner AS was merged with IKM Consultants AS. The merger had accounting and tax effect from1 January 2011. The merger took place with tax continuity and from an accounting point of view with group continuity. In 2011, IKM ElectroPartner AS was demerged-merged with IKM Instrutek AS and IKM Elektro AS respectively. The merger had accounting and fiscal effect from 15 April 2011. The merger took place with accounting and tax continuity.
PARENT and GROUPCompany Ingenium AS C6 Technologies AS*
Acquisition date 2008 2010
Registered office Sola Stavanger
Equity stake 17,0 % 50 %
Share of voting capital 17,0 % 50 %
Cost price 9 860 40 000
Pre-tax profit 2011 9 801 -15 369
Equity as at 31/12 28 646 57 771
Book value in the group accounts 9 860 28 885
Book value in the parent company 9 860 40 000
* The equity method has been used for the group
PARENT 31.12.2011 31.12.2010
IKM Consultants AS 10 157 12 478
IKM Testing AS 252 40 000
IKM Inspection AS 2 992 0
IKM Kran og Løfteteknikk AS 13 432 8 734
IKM Service 160 10 210
IKM Laboratorium AS 532 0
IKM Elektro AS 70 0
IKM Valves AS 65 0
IKM Production Technology AS 792 0
IKM Instrutek AS 3 792 0
IKM Subsea AS 143 0
IKM dsc Engineering AS 113 0
IKM Operations AS 262 0
IKM Ocean Design AS 125 0
IKM Mekaniske AS 208 0
IKM Mekaniske Kristiansund AS 22 0
IKM Technique AS 55 0
IKM Haaland AS 5 515 0
IKM Maskinering AS 135 0
Total group contributions entered as income from subsidiaries 30 026 71 422
Total inter-company balances 38 823 71 422
Note 16Mergers
36
Year 2011
Notes
37
Year 2011
Auditor’s Report
38
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IKM Gruppen AS
Ljosheimvegen 14, 4050 Sola, Norway
T: +47 51 64 90 00
www.IKM.com
Our focus is growth!
