2014
AnnuAl
RepoRt
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MHWirth
AKoFS offshore
other
Real estate
Kop Surface products
Fjords processing
Frontica Business Solutions
5 603
4 312
1 052
543
674
436
374
Net capital
employed
noK 13 billion
per 31 Dec 2014
Revenue
noK million
5 078
eBITDA
noK million
5 326
411
262
4Q 13
1Q 14 2Q 14 3Q 14 4Q 14
4Q 13
1Q 14
3Q 14 4Q 14
2Q 14
Key fIguRes
Orders and results continuing operations
order backlog 31 December (NOK million)
order intake (NOK million)
operating revenues (NOK million)
eBItDA (NOK million)
eBItDA-margin (Percent)
net profit (NOK million)
net profit incl. discontinued operations (NOK million)
Cash flow
2014
2013
21 555
17 025
25 254
18 011
21 432
18 448
1 380
1 355
6.4
(1 387)
2 493
7.3
(238)
1 124
Cash flow from operational activities (NOK million)
488
3 078
Balance sheet
Borrowings (NOK million)
equity ratio (Percent)
share
Share price 31 December
Basic earnings per share (NOK)
Diluted earnings per share (NOK)
employees continuing operations
5 028
11 316
38.4
29.8
21.60
108.40
9.13
9.13
4.11
4.11
total employees including contracts 31 December (Full time equivalents)
7 609
7 482
Hse
lost time Incident Frequency (Per million worked hours)
total recordable incident frequency (Per million worked hours)
Sick leave rate (Per million worked hours)
0.65
1.62
2.7
0.83
2.81
2.5
01. tHIS IS AKAStoR
AkAstor in brief
Akastor ASA (hereinafter referred to as Akastor) is an
investment company based in norway with a portfolio of
companies in the oilfield services sector, in addition to
real estate and other smaller-sized holdings. the portfolio
companies of Akastor were organized as
independent
companies following the demerger of Aker Solutions ASA,
in September 2014. Akastor was the surviving entity in the
demerger, and subsequently has been established as an
investment company with independent portfolio companies,
responsible for all aspects of their own operations. Aker
Kværner Holding AS, which is owned by Aker ASA and the
norwegian government, is the largest shareholder of Akastor
with a shareholding of 40.27 percent. the shares of Akastor
are traded on the oslo Stock exchange under the ticker AKA.
Portfolio ComPAnies
Akastor’s portfolio companies had 2014 revenues of about
noK 21.4 billion, eBItDA of noK 1.4 billion and approximately
7 600 employees worldwide.
Akastor operates a lean corporate center with 23 employees
situated in oslo, norway. Akastor’s aim is to develop and
refine our portfolio companies as stand-alone enterprises,
with the goal of maximizing the value potential of each entity.
Akastor works to clarify the portfolio companies’ business
models, capitalize on their market positions, and strengthen
underdeveloped areas of value creation. Akastor has a range of
strategic, operational and financial value-creating measures at
its disposal, including operational improvements and organic
growth, acquisitions and divestments, and financial measures.
MHWIRTH
fRONTICA BusINess sOluTIONs
mHWirth offers a full range of drilling equipment, drilling ris-
frontica business solutions provides cost efficient corporate
er solutions and related products and services for the drilling
services that enable companies to become faster and more ef-
market, primarily the offshore sec tor. the company had reve-
ficient. frontica had revenues of nok 5.8 billion in 2014, and
nues of nok 10.7 billion in 2014, and employs 4 200 people.
has 1 350 employees.
AKOfs OffsHORe
fjORDs PROCessINg
Akofs offshore is a global provider of vessel based subsea
fjords Processing provides wellstream processing technology,
well construction and intervention services to the oil and gas
equipment and expertise to the oil and gas industry. it had rev-
industry. it had revenues of nok 1.5 billion in 2014, and em-
enues of nok 2.3 billion in 2014, and employs 600 persons.
ploys 115 people.
KOP suRfACe PRODuCTs
ReAl esTATe AND OTHeR HOlDINgs
koP surface Products offers a complete range of products for
real estate and other holdings include a portfolio of 8 real es-
offshore and land-based surface production, including surface
tate assets, all in norway, 100 percent ownership of first Geo,
wellheads, Xmas trees, valves and actuators. the company had
76 percent shareholding in steP oiltools, 50 percent stake in
revenues of nok 1.1 billion in 2014, employing 850 people.
Dof Deepwater and 7.4 percent shareholding in ezra.
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improve operations
our ambition is to use the downturn as an
in our
opportunity to
portfolio companies and strengthen their
future competitiveness. unfortunately, several
of our portfolio companies have had to adjust
their workforce base.
02. Ceo letteR
PositioninG for tHe future
2014 was a special year for Akastor. After the split of Aker
Solutions on September 29, Akastor has operated as a
separate company. We are an oilfield services investment
company with a flexible mandate for long-term value creation
through active ownership. In spite of challenging market
conditions the long term work with our portfolio companies
is off to a good start.
Our long term approach
Akastor is the result of a decade-long journey of successful
restructuring and M&A-activities in Aker-owned companies.
During this period, we have gained valuable experience and
built effective tools. this heritage is part of our DnA. We seek
to create value through active ownership combining a range of
strategic, operational and financial measures.
I also believe that one of the keys to successful active
ownership is creating a strong alignment between owners
and management. We are therefore working closely with the
management in our portfolio companies in order to develop
and execute value creation plans.
Challenging market environment
people in the different portfolio companies have a unique
competence in the areas we operate in. this expertise is
what makes me believe in a successful journey. Without the
clever heads and hands of our employees, the companies
would not be able to come up with all the good solutions
for our customers. these solutions are the backbone of
our businesses.
2014 was characterized by our industry adjusting to falling oil
prices and reducing its cost base to adapt to uncertain energy
and oil price-levels. there will be challenging times ahead.
We have therefore focused on making sure our companies
have a competitive cost base, so we can secure work for
our businesses and for our employees going forward. our
ambition is to use the downturn as an opportunity to improve
operations in our portfolio companies and strengthen their
future competitiveness. unfortunately, several of our portfolio
companies have had to adjust their workforce base. I know
this is very challenging for those affected by these changes.
We take our responsibility, and will make sure the process is
fair and predictable, even if it is painful.
In spite of this current downturn, I am confident that our
businesses have the strength to deliver shareholder value,
and generate employment for a lot of people in a long-term
perspective.
frank o reite, Ceo
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Akastor will seek to maximize value by
combining strategic, operational and
financial measures. Akastor will establish
separate financing for each operational
unit to increase the portfolio companies’
flexibility and independence.
03. BoARD oF DIReCtoRS’ RepoRt
Akastor ASA (Akastor) has operated as an oilfield services
investment company since September 2014, following the
split of Aker Solutions ASA into two separate companies.
During 2014, a new corporate structure and governance
model was put in place, as well as a new management team. A
new board of directors has been established for Akastor and
for each of its portfolio companies. Akastor has established a
robust capital structure including financing facilities of noK
4.5 billion. the Akastor portfolio of companies had a total
capital employed of noK 13 billion at the end of 2014.
Akastor’s total revenue in 2014 increased by 16 percent,
whilst eBItDA remained flat, mainly due to tougher market
conditions for all portfolio companies during 2014. the order
backlog amounted to noK 21.6 billion at the end of 2014
compared to noK 17 billion a year earlier. the order intake for
2014 was noK 25.3 billion.
Company overview
Akastor is an investment company based in norway with a
portfolio of industrial holdings, real estate and other holdings,
all in varying stages of maturity. Akastor, in its present form, is
a result of a separation of the oilfield services company, now
known as Aker Solutions ASA. on September 29 2014, the
Aker Solutions share was split, and Akastor and Aker Solutions
became two separately listed entities.
Akastor, primarily focused on the oilfield services sector. the
portfolio covers a range of industrial holdings in this sector,
including:
MHWirth, which provides drilling systems and
lifecycle services
Frontica Business Solutions, which provides
corporate and staffing services to companies in the
oil services industry
AKoFS offshore, vessel-based subsea well
construction and intervention services
Fjords processing, which provides wellstream
processing technology
Kop Surface products, which delivers surface oil
and gas equipment
Akastor Real estate, which owns eight properties
in norway
Step oiltools, a drilling waste management
company
is organized as an
each Akastor portfolio company
independent business with its own board of directors, and a
dedicated management team, fully responsible for all aspects
of its operations. During 2014, new board of directors were
established for all portfolio companies, consisting of dedicated
Akastor key managers, and in some of the boards, external
board representatives and employee representatives. this
lays the foundation for good cooperation between Akastor,
the portfolio company and its employees.
Akastor is based in oslo with a core team of 23 employees.
Akastor’s portfolio companies have a total of 7 600 employees
with activities in 30 countries at the end of 2014.
strategy
Akastor is an investment company, based on a similar business
philosophy as companies
in the private equity sphere;
advocating an independent approach for each portfolio
company to optimize its development potential. Akastor aims
to create long-term value for its shareholders through the
active development of its portfolio companies as standalone
businesses, while maintaining the flexibility to be opportunistic.
Akastor will work closely with the companies’ managements
to make decisions on business development, acquisitions and
divestments to maximize the value of each company. each
portfolio business will develop and execute independent value
creation plans in cooperation with the Akastor investment
team. As an owner, Akastor must understand the portfolio
companies markets and challenges in depth, in order to
evaluate current valuation versus future potential.
Akastor will seek to maximize value by combining strategic,
operational and financial measures. Akastor will establish
separate financing for each operational unit to increase the
portfolio companies’ flexibility and independence.
Akastor will hold portfolio companies as long as it can
create additional value from its ownership. Capital discipline
is a key focus. Akastor will only pursue new investments
generating returns above the cost of equity. In the absence
of new investments, Akastor will either return excess cash to
shareholders, or re-invest into its current portfolio, if such an
investment can increase value or speed up the delivery of the
value creation plan.
Akastor holds companies at varying stages of maturity, and
will base future M&A decisions on independent plans for each
company, developed in close cooperation with each company’s
board of directors and management.
First Geo, which delivers subsurface advice and
products to e&p companies
market outlook
Adding to this, Akastor also owns some financial investments
such as shares in ezra Holdings ltd and DoF Deepwater AS.
the market outlook for 2015 is affected by the sharp decline
in oil prices seen last year. e&p companies’ increased focus on
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capital discipline and reduction of upstream investments are
expected to persist throughout 2015. the oil & gas services
segment observed significant delays and re-tendering through
2014, and the e&p companies are likely to postpone new
developments and thus further prolong the current market
downturn beyond 2015. We expect the market to be very
challenging in 2015.
Akastor’s order backlog was increased by the end of 2014
compared to 2013. Akastor still expects the market conditions
to be demanding for all its portfolio companies in 2015. As an
active owner, Akastor will, in the near-term, focus on adjusting
its businesses to the current market conditions. In a longer-
term perspective, the oilfield services market is expected to
improve, and the focus of each investment manager is to work
closely with the portfolio company to position the companies
for growth in current and new markets.
Group financial Performance
Akastor presents its consolidated accounts in accordance
with the International Financial Reporting Standards (IFRS)
as adopted by the european union. All amounts relate to the
consolidated financial statements for the group. the financial
statement includes the full year accounts for all Akastor
portfolio companies, including the period when they were
business areas in Aker Solutions prior to the demerger. the
numbers for 2013 are comparative numbers, based on the
activity of the portfolio businesses in 2013. the amounts in
the income statement related to disposed and demerged
businesses have been re-presented as discontinued operations.
However, the balance sheet in 2013 has not been restated for
discontinued operations according to requirements in IFRS.
the main companies included in Akastor’s consolidated
accounts are the following: MHWirth, Frontica Business
Solutions AKoFS offshore, Fjords processing and Kop
Surface products. In addition, a portfolio of eight real estate
assets are included, as well as 100 percent ownership of First
Geo, 76 percent shareholding in Step oiltools, 50 percent
shareholding in DoF Deepwater and 7.4 percent shareholding
in ezra.
income statement
operating revenue for 2014 rose 16 percent to noK 21.4
billion. earnings before
interest, tax, depreciation and
amortization (eBItDA) remained flat at noK 1.38 billion. the
revenue increased due to higher activity in AKoFS offshore
in 2014 compared to 2013 and increased revenue in Fjords
processing, Kop Surface products and Real estate and other
holdings. earnings in 2014 were impacted by reduced margins
for MHWirth in key areas and due to low activity for the AKoFS
vessel AKoFS Seafarer (previously named Skandi Aker). net
financial expenses fell to noK 568 million in 2014 from noK
583 million in the previous year. net financial income rose from
noK 47 million in 2013 to noK 119 million in 2014, mainly due
to forex exchange gain.
Depreciation, amortization and impairments rose to noK
2.1 billion from noK 1.1 billion in the previous year. In 2014
Akastor recognized impairments of a total of noK 1 001
million on assets and intangible assets in AKoFS offshore.
noK 664 million in impairments is related to investments in
the AKoFS Seafarer vessel. the impairment is based on the
revised business case after the cancellation in June by total
in Angola of a two-year contract for the vessel. In addition,
impairments of goodwill and other intangible assets of noK
311 million were related to a revised business case for AKoFS
Seafarer and Aker Wayfarer due to weaker market conditions
for the business. the group had an operating loss of noK 706
million, due to the above-mentioned impairments. Several
other non-recurring items impacted the results, caused by a
number of elements, primarily consisting of provisions related
to onerous offices leases, cost from the MMo outplacement
agreement and an income from realization of an investment in
a real-estate project in Stavanger. the pre-tax loss for the year
was negative noK 1.65 billion, compared to negative noK 0.2
billion the previous year.
the income tax benefit for 2014 rose from noK 4 million in
2013 to noK 266 million in 2014. the effective tax rate is
influenced by several one-off items.
earnings per share for continued operations were negative
5.09 in 2014, compared with negative noK 0.87 a year earlier.
include Mooring and loading
Discontinued operations
Systems (MlS), Well Intervention Services (WIS) and Aker
Solutions (AKSo). profit from discontinued operations was
noK 3 880 million, and includes the net profit from disposed
and demerged businesses during 2014. the amount includes
gains on sale of MlS and WIS of noK 2 852 million.
net profit for the year, including discontinued operations, rose
to noK 2.5 billion from noK 1.1 billion in 2013. earnings per
share were noK 9.13 in 2014, compared with noK 4.11 a year
earlier.
the board of directors has resolved to propose to the annual
general meeting not to distribute ordinary dividend for 2014.
this proposal is in line with previous communication.
balance sheet
total assets of Akastor amounted to noK 24.4 billion as of
December 31, 2014, compared with noK 47.9 billion at year-
end 2013. the balance sheet in 2013 includes disposed and
demerged businesses and is thus not comparable with 2014.
For effects of disposals and demerger on the balance sheet,
refer to note 5 in the consolidated accounts. the balance
sheet for continuing operations is summarized in note 6 in
the consolidated accounts. total operating assets in portfolio
companies have increased from noK 21.1 billion in 2013
to noK 23 billion in 2014, mainly explained by increase in
current operating assets. total non-current operating assets
in portfolio companies increased by noK 0.6 billion, however
affected by several significant events. A financial lease of the
vessel Aker Wayfarer was booked by noK 1.5 billion and also
impairments of vessels and goodwill in AKoFS offshore was
booked by noK 1 billion.
total operating liabilities in portfolio companies increased by
noK 0.9 billion, mainly explained by an increase in current
operating liabilities. Gross debt decreased by noK 6.3 billion
reflecting a net 4.1 billion repayment of debt following the
disposals in 2014, as well as the demerger of bonds of noK
2.5 billion. A financial lease obligation of noK 1.4 billion related
to Aker Wayfarer increased gross debt.
total equity amounted to noK 9.4 billion by the end of 2014,
compared to noK 13.4 billion the year before. Due to the
demerger of Aker Solutions, book equity was reduced by noK
5.6 billion. the equity ratio was 38.4 percent as of December
31, 2014.
Cash flow
As of December 31, 2014, Akastor had cash of noK 1.1 billion,
a reduction from noK 2.3 billion in 2013. the cash flow
statement includes discontinued operations as long as these
were part of Akastor group. the net cash flow from operating
activities amounted to noK 488 million, reduced from noK
3.1 billion in 2013. the reduction reflects an increase in working
capital, mainly due to an increase in MH Wirth.
include capex
net cash flow from investment activities was noK 4.5 billion
compared to negative noK 4.3 billion in 2013, increase is mainly
due to proceeds of noK 5.9 billion from sale of businesses.
investments of
Investment activities also
negative 1.9 billion compared to negative noK 3.5 billion in
2013. Cash flow from other investment activities were positive
by noK 616 million, explained by repayment of a convertible
bond in ezra ltd as well as disposal of various shareholdings.
no new business acquisitions were carried out in 2014,
however noK 126 million was paid in deferred consideration
on acquisitions in prior periods.
net cash flow from financing activities amounted to negative
noK 5.3 billion, mainly explained by repayment of external
debt as well as dividend payment of noK 1.1 billion in 2014,
unchanged from the year before.
Going Concern
the board confirms that the company is a going concern and
that the annual accounts for 2014 were prepared on the going
concern assumption.
237 people; half of the workforce was employed in norway.
the company’s business is divided to three core areas: large
projects, Drilling equipment and Drilling lifecycle Services.
MHWirth is the largest the company’s revenue rose by 12.5
percent during 2014, driven by large projects backlog and
strong performance from the Drilling lifecycle Services
business. the eBItDA-margin dropped from 10.1 percent in
2013 to 8.8 percent in 2014, driven primarily by lower margins
on large projects. Working capital (nCoA) increased from
18.6 percent of revenue in 2013 to 24.1 percent of revenue
in 2014, driven by the large projects business. the offshore
drilling market slowed down significantly in 2014 resulting in a
number of prospects and tenders being cancelled or delayed.
this slowdown impacted MHWirth’s order intake, which
ended down by 27 percent compared to 2013. Key large
project orders in 2014 included two jackups, one floater and
one large upgrade project. the order backlog was reduced by
26 percent during the year.
Key figures
Amounts in NOK million
2014
2013
operating revenue and other income
10 681
9 493
eBItDA
eBIt
CApeX
nCoA
net capital employed
order intake
order backlog
employees (Fte)
941
526
762
2 573
5 603
6 941
9 566
4 237
959
742
676
1 767
4 024
9 511
13 004
4 011
MHWirth is using the market slowdown to concentrate on
operational excellence in order to be well positioned when
the market returns. In this context, the company is working
on both near-term and longer-term initiatives. the near term
priority is cost base reduction in response to the decrease
in order intake levels. As a part of this effort, on February
10, 2015, MHWirth announced a plan to downsize the global
work force by approximately 500-750 people. the capacity
reduction is estimated to give an annual cost reduction of
noK 500- 600 million at full run rate. other cost reduction
initiatives include cost negotiations with subcontractors and
an ongoing evaluation of consolidation of operational sites
and offices.
While making the adjustments necessary to face the current
challenging market, MHWirth has launched a number of
initiatives to increase efficiency and improve its competitive
position. this work
includes product standardization,
streamlining of processes, targeted strengthening of customer
relations and improved organizational effectiveness. the
market is expected to be very challenging in 2015.
the Akastor Portfolio
MHWirth
MHWirth is a global provider of drilling solutions and services.
MHWirth has activity on five continents with presence in
14 countries. By the end of 2014, the company employed 4
Frontica Business Solutions
Frontica Business Solutions is a provider of corporate services
with operations in seven countries and delivery in 25 countries
around the world. the company consists of three distinct
business segments; recruitment and staffing, It services and
consultancy, and payroll and additional support services.
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Key figures
Amounts in NOK million
operating revenue and other income
eBItDA
eBIt
CApeX
nCoA
net capital employed
order intake
order backlog
employees (Fte)
2014
5 753
315
218
110
(237)
374
8 196
2 620
1 356
Key figures
2013
Amounts in NOK million
5 680
operating revenue and other income
287
190
114
(249)
216
5 766
eBItDA
eBIt
CApeX
nCoA
net capital employed
order intake
87
order backlog
1 454
employees (Fte)
2014
1 542
175
2013
908
7
(1 117)
(640)
5
(73)
4 312
6 140
6 186
115
611
(216)
3 647
52
1 722
127
the staffing business is conducted under the trademark
Frontica Advantage. Frontica stems from the shared services
division of Aker Solutions, and has more than ten years of
experience as a provider of services. Frontica was established
as a separate business entity in 2014. the client base includes
Kværner, Aker Solutions, Jacobs as well as companies owned
by Akastor. Frontica is the second largest subsidiary within
Akastor, based on sales.
Frontica had revenues of noK 5 753 million in 2014, at the
same level as in 2013. the eBItDA-margin increased during
2014. the eBItDA was noK 315 million, an increase of 9.8
percent from 2013. the order backlog of noK 2.6 billion
represents the estimated value of the fixed contracts and
frame agreements for Frontica.
It outsourcing
Frontica is operating in three different markets, with different
characteristics:
(Ito), business process
outsourcing (Bpo) and recruitment and staffing services. the
general market outlook for Frontica within these three markets
is deemed positive, with expected steady annual market growth.
With customers seeking outsourcing models to a greater
extent, increased industry specific specialization and greater
flexibility in cost base, the company is positioned for growth.
the slow-down in the oil and gas market will most likely affect
Frontica’s customers and is expected to impact the revenue
level in the short term, especially within recruitment and
staffing services.
AKOFS Offshore
AKoFS offshore
is a provider of vessel-based subsea
well construction and intervention services to the oil and
gas industry. the company has a competent and diverse
organization, covering all phases of the value chain from
conceptual development to project execution and offshore
operations. AKoFS offshore operates three specialized
offshore vessels, Skandi Santos, Aker Wayfarer and AKoFS
Seafarer, employing 115 people.
the company’s revenue rose by 70 percent in 2014, whilst
eBItDA increased by noK 168 million to noK 175 million. the
results reflect the high level of activity for the three AKoFS
offshore vessels during the first half of 2014, whilst the second
half was characterized by lower activity and reduced margins
after total cancelled the 2 year firm light Well Invention
contract for AKoFS Seafarer after 9 months of operations
in June. this contract cancellation caused AKoFS offshore
to make an impairment of asset values related to AKoFS
Seafarer and goodwill amounting to noK 1 001 million in 2014.
During 2014 AKoFS offshore signed a five-year extension
of the contract with petrobras for Skandi Santos (valid from
March, 2015), and a new five-year contract (+5 year option)
for Aker Wayfarer with the same client (vessel expected
to be in operations from medio 2016). Both vessels will do
subsea installation work outside Brazil, installing and testing of
deepwater subsea Xmas trees and other production equipment.
the Aker Wayfarer vessel will be, as an effect of the petrobras
contract, converted to a subsea installation vessel. the
conversion investment of around noK 600 million will be
financed through the vessel owner ocean Yield. the vessel
bareboat contract was renegotiated ahead of the offer
made to petrobras and signed following the contract award
in Q3. As a result of the new charter contract, the vessel
charter has according to IFRS been reclassified as financial
lease (previously operational lease). According to IFRS, a
financial lease shall be recognized as an asset and a liability
at commencement of the lease term equal to the fair value
of the vessel. the asset is therefore recognized at noK 900
million. In addition, noK 600 million is recognized as other
non-current assets and represents the CApeX obligation
required to fulfil the petrobras contract (topside and subsea
equipment) that will be made prior to the operational
commencement and financed by vessel owner ocean Yield.
the liability is recognized to noK 1 372 million net of prepaid
charter rates.
AKoFS offshore exercised its option to acquire the Skandi
Aker from DoF Subsea in 2014 for a total consideration of
uSD 122.5 million. the purchase was executed in February
2015. Following the transaction, the vessel was re-named
AKoFS Seafarer.
AKoFS Seafarer was operating in Angola for total as a light
Well Invention vessel from September 2013 and during the
first half of 2014. Following the cancellation of the contract
effectuated by total, it was further employed on a short-term
contract in the construction spot market during the second
half of 2014. the SuRF market is expected to be challenging
going forward. this may affect both Aker Wayfarer and AKoFS
Seafarer in 2015. However, medium to longer-term, AKoFS
offshore aims to redeploy the AKoFS Seafarer in the well
intervention markets.
delivering processing equipment to Korean epC (engineering,
procurement and construction) companies, and was awarded
several strategically important contracts in the Korean epC
market in 2014.
AKoFS offshore had an order intake of noK 6.1 billion for the
full year of 2014, compared to noK 52 million in 2013. this
is mainly explained by the five-year extension of the contract
with petrobras for Skandi Santos, and the new five-year
contract for Aker Wayfarer with the same client.
Following the first five years of successful operations in Brazil,
Skandi Santos will be routinely dry-docked during Q1 2015.
Consequently, the vessel is expected to be out of operations
for about 30 days.
Due to the current weak market conditions in the e&p sector,
both the subsea construction fleet and offshore drilling segment
are in structural oversupply. AKoFS offshore continues to see
Brazil as a positive market for the services provided by the
company going forward. Installation of Xmas trees, as well as
related subsea production equipment, will be essential to the
expected increase in Brazilian oil and gas production. However,
market conditions can be affected by the current oil market
as well as actions taken by petrobras as a consequence of on-
going corruption allegations against the company.
Fjords Processing
Fjords processing provides wellstream processing technology,
systems and services to the upstream oil and gas industry.
the company delivers complete processing systems for both
onshore and offshore installations. Fjords processing delivers
solutions across all oil, gas and water treatment segments.
the company is headquartered in oslo, norway. It had 617
employees at the end of 2014, with representation in 17
countries on six continents.
Key figures
Amounts in NOK million
operating revenue and other income
eBItDA
eBIt
CApeX
nCoA
net capital employed
order intake
order backlog
employees (Fte)
2014
2 322
2013
2 007
52
25
62
(157)
436
2 197
1 190
617
75
52
42
(50)
409
1 959
1 255
628
Revenues of Fjords processing rose by 15.7 percent in 2014.
the eBItDA was reduced by 30.7 percent compared to
the previous year. the reduced margin was caused by cost
increases and delays on one specific project which will be
delivered in 2015. Fjords processing’s order intake for 2014
increased by 12.2 percent compared to the previous year.
In August 2014, Fjords processing established a position in
the Korean market through a 50/50 joint venture with Kolon
Water and energy. Kolon Fjords processing is focusing on
Due to the current slow-down within the oil and gas space,
Fjords is preparing for increased pressure on price and
potential project delays going forward.
KOP Surface Products
Kop Surface products is a global supplier of flow control
equipment to the oil and gas industry. the main products
are valves, wellheads and trees for offshore and land-based
surface production. the company provides engineering,
manufacturing, installation and life-of-field support services.
Kop Surface products has its headquarters in Singapore and
its main manufacturing operations in Batam, Indonesia with
a global network of service centers located in Singapore,
Malaysia, India, Indonesia, thailand, the united Arab emirates,
nigeria and Vietnam. Kop Surface products employed 854
people at the end of 2014. the company’s key market is in
Southeast Asia. During 2014 the company made the first
moves to expand into the Middle east.
Key figures
Amounts in NOK million
operating revenue and other income
eBItDA
eBIt
CApeX
nCoA
net capital employed
order intake
order backlog
employees (Fte)
2014
1 119
156
109
32
375
674
1 052
659
854
2013
873
88
62
59
288
567
990
570
760
Revenue in Kop Surface products rose by 28.2 percent in
2014, driven by demand for surface wellheads and trees in
Asia. the eBItDA-margin for 2014 was 13.9 percent, compared
to 10.1 percent in 2013. Both hardware and service revenues
developed positively during the year. the high margin services
contributed with the highest growth, hence, impacting the
margin positively. As Kop Surface products is predominantly
a uSD business, foreign exchange development contributed
positively to the growth in noK versus the previous year. In uSD
terms revenue rose by 19 percent year on year. order intake
was noK 1 052 million for 2014 as a whole, giving a backlog of
noK 659 million at the end of the year. Kop Surface products
is exposed to the cyclicality in the oil and energy sector, seeing
softening in demand and increased competition and will need
to have a strong focus on cost reduction in 2015, in order to
maintain its competitive position.
Real Estate and Other Holdings
Akastor Real estate owns eight properties in norway, with a
book value of approximately noK 1.0 billion. the properties
yield revenue of about noK 80 million, with a weighted
duration of 16 years. the company also held a 17 percent stake
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in a syndicate with a share value of about noK 30 million.
In addition, the company manages a subletting portfolio
and a few development projects. the other holdings are a
76 percent stake in the drilling waste products and services
company Step oiltools, 50 percent of DoF Deepwater, a 7.4
percent stake in Singapore-based offshore support solutions
provider ezra Holdings, the geological services firm First Geo,
and investments in Aker pension Fund Company and Aker
Insurance Company. DoF Deepwater is a joint venture with
DoF ASA, which owns and operates five anchor handling tug
supply (AHtS) vessels – all currently on charter contracts.
subsequent events
the purchase of Skandi Aker was executed in February 2015.
Following the transaction, the vessel has been re-named AKoFS
Seafarer. the purchase price was uSD 122.5 million, all financed
with new bank debt.
A process in MHWirth has been initiated in February 2015, with
an ambition to reduce the global work force to give a reduction
of approximately 500 staff through downsizing and attrition.
Furthermore, the number of hired in staff will be reduced
accordingly with around 250 employees during the year.
Key figures
Amounts in NOK million
operating revenue and other income
eBItDA
eBIt
CApeX
nCoA
net capital employed
order intake
order backlog
employees (Fte)
2014
975
(260)
(469)
128
(58)
1 595
2 097
1 658
430
2013
594
(62)
(171)
122
464
3 073
618
272
502
Real estate and other Holdings delivered a negative eBItDA
in 2014 of noK –260 million, mainly due to onerous lease
provisions for unutilized office buildings. the revenue
increased by 71 percent to noK 975 million in 2014 compared
to noK 569 million in 2013.
the order intake for real estate was high in 2014 as a result of
taking lease contracts in the backlog.
Parent Company results and Allocation of net Profit
Akastor is the ultimate parent company in the Akastor group
of companies and its business is the ownership of the portfolio
of industrial holdings as set out above. Akastor has outsourced
corporate functions to other companies within the group,
mainly Akastor AS. However, assets and liabilities related to
the Corporate treasury function are held by Akastor ASA.
Akastor had a net loss of noK 80 million in 2014, down from
a profit of noK 2.9 billion in 2013. the main reason for the
reduction is that no dividends from subsidiaries to Akastor
have been distributed in 2014.
the parent company’s dividend policy is to execute ad-hoc
dividend distributions from sales proceeds received by the
company through divestments or other realization of assets.
the company does not intend to distribute regular or annual
dividends. the board thereby proposes the following coverage
of the loss:
Amounts in
Dividend
other equity
total allocated
noK million
0
(80)
(80)
risk management
Key Risk Mitigation process
Akastor and its portfolio companies are exposed to various risks,
both financial and operational and interest rate risk, market
risk, credit risk, and operational risk at the underlying company
level. to manage and mitigate risks in Akastor, risk evaluation
is an integral part of all business activities. Akastor actively
supervises risk management in its portfolio companies through
its participation on the board of directors of each company, and
by defining requirements to the portfolio companies for risk
management and mitigation processes and procedures.
Financial Risks
the group is exposed to a variety of financial risks: currency
risk, interest rate risk, price risk, credit risk, M&A risk, liquidity
risk and capital risk. the market risks affect the group’s income
or the value of financial instruments held. the objective of
financial risk management is to manage and control financial
risk exposures and thereby increase the predictability of
earnings and minimize potential adverse effects on the group’s
financial performance. Akastor uses financial derivative
instruments to hedge certain risk exposures and aims to
apply hedge accounting whenever possible in order to reduce
the volatility resulting from the periodic mark-to-market
revaluation of financial instruments in the income statement.
Risk management is a focus area in every project within the
Akastor portfolio of companies. It is the responsibility of the
project managers, in cooperation with the Akastor treasury, to
identify, evaluate and hedge financial risks. the group has well-
established principles for overall risk management, as well as
policies for the use of derivatives and financial investments.
Integrity risks
Akastor requires all its portfolio companies to implement an
Integrity program to manage and mitigate integrity risks. this
program is also implemented at Akastor level, and includes
requirements in respect of training, due diligence, control
of third parties and regulation of gifts and hospitality. Key
components in the integrity program are education and
awareness training. All Akastor managers and employee groups
which may face integrity challenges are required to participate
in class-room based integrity training. Hired-ins in high risk
roles are also required to undertake integrity training, just as
third party representatives receive integrity training specially
prepared for them. A Code of Conduct e-learning program
has been developed in 2014 and will be introduced to all
employees in 2015. the requirement for all portfolio companies
is to complete and report on the training within 6 months from
employment or publication of a new training session.
company’s corporate responsibility work, including their HSe
work, please refer to the Akastor Corporate Responsibility
Report for 2014. the full report is available on the Akastor
website www.akastor.com.
Akastor has established a whistleblowing system in line with
the company’s Governance policy. the whistleblowing system
is open for all Akastor employees who wish to report a breach
of the Code of Conduct, other internal guidelines or governing
policies. All employees are required to report breaches of the
Code of Conduct, and Akastor encourages reporting of any
concerns around compliance with law and/or ethical standards.
As of February 2015, Akastor received concession from the
norwegian Data protection Authorities to run a whistleblowing
channel which is also available for external parties. this will be
implemented in 2015.
For further details on risk management and exposures, see
note 31.
Corporate responsibility
Akastor’s operating model reflects the fact that each of our
companies are independent entities who operate different
business models and therefore face different Corporate
Responsibility risks and expectations from stakeholders. As
a holding company, Akastor is responsible for setting the
overall Corporate Responsibility priorities and providing
the appropriate risk management framework and policies
applicable for all holdings in the portfolio. In turn, each
portfolio company is responsible for defining their own
Corporate Responsibility strategy with relevant activities and
where necessary supporting policies.
Akastor
is also responsible for the maintenance and
development of industrial relations and collaboration with
unions. Historically, good industrial relations have played an
important role in Aker Solutions, and maintaining these strong
relations have proven to be one of the success criteria in
developing the company over the years. this work will thus
continue in Akastor going forward.
Akastor’s Corporate Responsibility strategy is based on four
main priorities that reflect areas considered crucial to our
business, our stakeholders and within the oil-services industry:
Respecting Human Rights
Working against Corruption
Caring for Health & Safety
Reducing Impact on the environment
the task for Akastor going forward is therefore to ensure the
systematic implementation and integration of the priorities of
the Corporate Responsibility strategy, Code of Conduct and
Integrity policy across all portfolio companies and business
units. For in-depth reporting on Akastor and each portfolio
People and teams
Akastor had a total of 23 employees as of December 31, 2014,
47 percent of the employees are women. Akastor is committed
to equal opportunity and non-discrimination. this commitment
is described in the company’s Code of Conduct, policies and
agreements, and builds on a frame agreement signed with
national and international trade unions in 2008. this agreement
was renewed in 2013 and sets out fundamental labor rights and
standards for general employment terms and employee relations,
with specific focus on non-discrimination. equal opportunities
are fundamental for Akastor and its portfolio companies.
Akastor and the portfolio companies had a total 7 609 people
as of December 31, 2014, the same level as the previous year. 28
percent of the employees are female, 72 percent are male. the
male/female ratio in the portfolio companies were as follows:
MHWirth
frontica
fjords
KOP
AKOfs
Female
Male
19%
81%
55%
45%
27%
73%
24%
76%
12%
87%
Whilst the male/female ratio is well balanced in Frontica
Business Solutions, the other companies have a predominant
male workforce. this is mainly due to reasons linked to history
and industry tradition. each portfolio company promotes equal
opportunities by setting specific requirements for diversity
in recruitment and people development, and by supporting
programs dedicated to equal opportunity. Akastor fulfills the
requirements of the norwegian public liability Companies
Act with regards to gender representation on the board of
directors, , as four of eight Directors are women.
Sick leave in Akastor AS amounted to 2.8 percent of total
working hours in 2014. For the full Akastor group workforce, sick
leave amounted to 2.7 percent in 2014. Sick leave in the Akastor
portfolio companies was relatively low. there were no fatal
injuries in any of the portfolio companies, and the total recordable
incident frequency was low. See figure below for details:
Health and Safety
MHWirth
frontica fjords KOP AKOfs
lost time Incident
Frequency (ltIF) incl.
sub-contractors
total Recordable
Incident Frequency
(tRIF) incl.
subcontractors
Fatalities incl.
subcontractors
sick leave
0.75
0.4
0
0
0 %
1.88
0.4
2.2
0
0
0 %
0
0
3 %
0
0
3.9%
2% 0.6%
2.3%
there are further details on HSe available in the 2014 Corporate
Responsibility report, available on www.akastor.com.
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environment
Akastor’s portfolio companies ’ activities pose a limited burden
on the environment. During 2014 no unintentional discharges
or emissions to the surrounding environment were recorded in
any of the portfolio companies. Akastor works with all portfolio
companies to promote responsible businesses, committed to
sustainable development and high environmental standards.
Akastor operates from its headquarters in oslo and has negligible
effect on the external environment. each portfolio company
has dedicated sustainability programs aiming to reduce the
business’ impact on the external environment by Co2 emission
reductions, waste management, energy efficiency and recycling.
the Akastor portfolio companies report individually on their
impact on the external environment. the new section 3-3c in
the norwegian Accounting Act requires that as of 1 June 2013,
large companies account for their efforts to integrate corporate
social responsibility in their business strategies and day-to-day
operations.
research, innovation and technology Development
noK 640 million related to development activities have been
capitalized in 2014, compared to noK 804 million in 2013. In
addition, research and development costs of noK 112 million
have been expensed during the year because the criteria for
capitalization were not met (noK 275 million in 2013). All
amounts include Aker Solutions until the demerger.
initiatives are
innovation and development
All research,
performed by the Akastor portfolio companies. the Akastor
holding company performed no such activity in 2014.
Corporate governance
Corporate governance is a framework of values, responsibilities
and governing documents to control the business and ensure
sustainable value creation for shareholders over time. It is the
responsibility of the board of directors of Akastor to ensure that
the company implements sound corporate governance. the
audit committee supports the board of directors in safeguarding
that the company has internal procedures and systems in place
to ensure that corporate governance processes are effective.
Akastor’s corporate governance principles are based on the
norwegian Code of practice for Corporate Governance and are
available on the company’s website www.akastor.com.
04. DeClARAtIon BY tHe BoARD
oF DIReCtoRS AnD Ceo
the board and Ceo have today considered and approved the annual report and financial statements for the Akastor group and
its parent company Akastor ASA for the 2014 calendar year ended on December 31, 2014. the board has based this declaration
on reports and statements from the group’s Ceo and/or on the results of the group’s activities, as well as other information that
is essential to assess the group’s position which has been provided to the board of directors.
to the best of our knowledge:
the 2014 financial statements for the group and parent company have been prepared in accordance with all applicable
accounting standards
the information provided in the financial statements gives a true and fair portrayal of the group and parent company’s
assets, liabilities, profit and overall financial position as of December 31, 2014
the annual report provides a true and fair overview of:
the development, profit and financial position of the group and parent company
the most significant risks and uncertainties facing the group and the parent company
oslo, March 13, 2015 | Board of Directors of Akastor ASA
oslo, March 13, 2015 | Board of Directors of Akastor ASA
Øyvind eriksen | Chairman
lone Fønss Schrøder | Deputy Chairman
Kjell Inge Røkke | Director
Øyvind eriksen | Chairman
lone Fønss Schrøder | Deputy Chairman
Kjell Inge Røkke | Director
Kathryn M. Baker | Director
Sarah Ryan | Director
Jannicke Sommer-ekelund | Director
Kathryn M. Baker | Director
Sarah Ryan | Director
Jannicke Sommer-ekelund | Director
Stig Faraas | Director
Asbjørn Michailoff pettersen | Director
Frank o. Reite | Ceo
Stig Faraas | Director
Asbjørn Michailoff pettersen | Director
Frank o. Reite | Ceo
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05. CoRpoRAte GoVeRnAnCe StAteMent
Corporate governance is a framework of values, responsibilities
and governing documents to control the business and ensure
sustainable value creation for shareholders over time. Sound
corporate governance shall ensure that appropriate goals and
strategies are adopted, that the strategies are implemented
in a good manner and that the results achieved are subject to
measurement and follow-up.
1. the Corporate Governance report
Basis for this Report
the corporate governance principles of the group are laid
down by the board of directors of Akastor ASA. the principles
are based on the norwegian Code of practice for Corporate
Governance dated october 30, 2014 (the «Code of practice»),
the regulations set out in the Continuing obligations of
stock exchange listed companies from oslo Børs (the stock
exchange in oslo) and the relevant norwegian background
law such as the norwegian Accounting Act and the norwegian
public limited liability Companies Act. the Code of practice
may be found at www.nues.no and the Continuing obligations
listed companies may be found at
of stock exchange
www.oslobors.no. norwegian
laws and regulations are
available at www.lovdata.no.
this report outlines how Akastor has implemented the Code of
practice. Deviations from the Code of practice are addressed
under the relevant sections. In general, the Akastor board only
approves deviations that the board believes contributes to
value creation for its shareholders.
In addition to the Code of practice, the norwegian Accounting
Act section 3-3b stipulates that companies must provide a
report on their policies and practices for corporate governance
either in the annual report or in a document referred to in the
annual report. Such report is integrated in the below corporate
governance statement.1)
Governance Structure
on April 29, 2014, the board of directors announced their
strategy for the development of the former Aker Solutions
group, thereunder their intention to propose to the company’s
shareholders that the group be split into two companies.
Following this proposal, the shareholders approved on
August 12, 2014 a demerger pursuant to which the activities
pertaining to Subsea, umbilicals, Maintenance, Modifications
and operations and engineering where spun-off into a new
company which was stock listed at the oslo Børs September
29, 2014. the new company adopted the Aker Solutions name
and the AKSo ticker as of the first day of listing of the new
company. As of the same date, the old Aker Solutions ASA
changed its name to Akastor ASA, trading under the ticker AKA
at oslo Børs. All references to the company or the group in this
statement refer to Akastor ASA and its portfolio of companies.
Akastor is an oil-services investment company with a portfolio
of companies in the oilfield services industry, with a total
capital employed value of approximately noK 13 billion. the
company has a flexible mandate for active ownership and
long-term value creation. MHWirth is a leading supplier of
drilling systems and drilling lifecycle services globally. Frontica
Business Solutions provides cost efficient corporate services
that enable companies to become faster and more efficient.
AKoFS offshore is a global provider of vessel based subsea
well construction and intervention services to the oil and gas
industry. Fjords processing provides world-class well-stream
1)
Below, the items in respect of which information must be disclosed according to section 3-3b of the norwegian Accounting Act are specified, together with
references to where such required information may be found:
1. “A statement of the recommendations and regulations concerning corporate governance that the enterprise is subject to or otherwise chooses to comply
with” can be found in the introduction section of this corporate governance statement.
2. “Information on where the recommendations and regulations mentioned in no. 1 are available to the public” can be found in the introduction section of this
corporate governance statement.
3. “The reason for any non-conformance with recommendations and regulations mentioned in no. 1”. The non-conformances are described in the relevant
section where there are non-conformances, which are sections 6 and 14 respectively.
4. “A description of the main elements in the enterprise’s, and for entities that prepare consolidated financial statements, if relevant also the Group’s internal
control and risk management systems linked to the financial reporting process” can be found in Section 10 of this corporate governance statement.
5. “Articles of Association which entirely or partly expand or depart from provisions of Chapter 5 of the Public Limited Liability Companies Act” can be found
in Section 6 of this corporate governance statement.
6. “The composition of the board of directors, the corporate assembly, the committee of shareholders’ representatives and the control committee and any
working committees related to these bodies, as well as a description of the main instructions and guidelines that apply to the work of the bodies and any
committees” can be found in Section 8 and 9 of this corporate governance statement.
7. “Articles of Association governing the appointment and replacement of directors” can be found in Section 8 of this corporate governance statement.
8. “Articles of Association and authorizations empowering the board of directors to decide that the enterprise is to buy back or issue its own shares or equity
certificates” can be found in Section 3 of this corporate governance statement.
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processing technology, equipment and expertise to the oil and
gas industry. Kop Surface products offers a complete range
of products for offshore and land-based surface production,
including surface wellheads, Christmas trees, valves and
actuators. other holdings include a portfolio of ten real estate
assets, all in norway, 100 percent of First Geo AS, 76 percent in
Step oiltools, 50 percent of DoF Deepwater and 7.4 percent
of the shares in ezra.
It is the responsibility of the board of directors of Akastor
ASA to ensure that Akastor and its portfolio of companies
implements sound corporate governance. the board of
directors evaluates this corporate governance statement on an
annual basis. the board’s audit committee also evaluates the
corporate governance statement as well as other key policies
and procedures pertaining to compliance and governance.
Compliance with, and implementation of these corporate
governance guidelines are continuously evaluated by the
board and said committee; inter alia by way of the board being
the decisive body for the company’s defined management and
reporting structure, which include regular reporting.
Policies and Procedures
Akastor has a total of 10 corporate policies providing business
practice guidance within a number of key areas. these policy
documents express the overall position of the group with regard
to compliance, integrity and governance, for instance. Some of
these are adopted already, while some are work in progress.
the policies provide instructions and guidelines that apply to
the portfolio companies as such and to individual employees in
order to ensure that the group’s operations are in compliance
with internal and external regulatory framework. In addition,
the portfolio companies are requested to implement their
own policies specific to their business within areas like project
execution, HSe and tendering.
Values and Code of Conduct
Akastor aims to develop and refine its portfolio of companies
as stand-alone enterprises, with the goal of maximizing the
value potential of each entity. the company works to clarify
the business models of its portfolio companies, capitalize on
their market positions and promote underdeveloped areas
such as aftersales services for the equipment and systems
delivered. the investment strategy is focused on the oilfield
services sector and the current portfolio. Akastor has an
opportunistic approach and will hold portfolio companies as
long as it creates more value than alternative owners.
Akastor wishes to contribute to sustainable social development
through responsible business practices. the company’s Code
of Conduct is a handbook that applies to all employees and
provides guiding on what Akastor considers to be responsible
ethical conduct. the Code of conduct give a framework for
what is acceptable behaviour that should be reflected in every
aspect of how business is conducted. the ethical guidelines
and other policy documents of the group have been drafted
on the basis of these basic corporate values.
Corporate Responsibility
Akastor takes an active approach to corporate responsibility.
Corporate responsibility in Akastor is about making good
business decisions, with minimum risk to reputation, brand
and the future sustainability of our business. the main focus
of corporate responsibility activities in Akastor, defined in our
group-wide integrity policy, is to work against corruption, to
respect human rights and to care for health, safety and the
environment. All our portfolio companies are expected to
ensure strong corporate responsibility in their operations.
Akastor is a member of trace International, which supports
our work against corruption. Akastor is also committed to
follow the Global Framework Agreement (GFA) entered into
by Aker with the trade unions Fellesforbundet, IndustriAll
Global union, nIto and tekna on 17 December 2012. the GFA
builds on and continues the commitment from the previous
framework agreements signed in 2008 and 2010, and outlines
key responsibilities in relation to human and trade union rights.
the parties commit themselves to achieving continuous
improvements within the areas of working conditions,
industrial relations with the employees of the Aker group of
companies, health and safety standards at the workplace and
environmental performance.
information
Further
in respect of the corporate social
responsibility work of Akastor and its portfolio of companies
can be found in the separate report published simultaneously
as the company’s annual report for 2014.
2. business
the objectives of the company, as defined in its articles of
association, are «to own or carry out industrial and other
associated businesses, management of capital, and other
functions for the group, and to participate in or acquire other
businesses». the articles of association are available at the
company’s website www.akastor.com.
the principal strategies of the group are presented in the
annual report. each year, the board of directors evaluates
the existing strategy and approves any significant changes to
such, as well as goals and guidelines of the company, through
a designated strategy process. Information concerning the
financial position and principal strategies of the company, and
any changes thereto is disclosed to the market in the context
of the company’s quarterly reporting and in designated market
presentations as well as on the company’s web site.
3. equity and Dividends
Equity
the management and the board regularly monitor that the
group’s equity and liquidity are appropriate for its objectives,
strategy and risk profile. the book equity of the group as per
December 31, 2014 is noK 9 378 million, which represents an
equity ratio of 38.4 percent. the management of financial risk
is further described in the annual report for 2014.
Dividend Policy
the board proposes the level of dividend payment to the
general meeting who in turn is the decisive corporate body for
dividend decisions.
the extent possible under local law, the shares purchased
by each employee were funded by a loan provided by the
local employer company. the loan will be repaid by salary
deductions over a period of 12 months.
over time, Akastor’s shareholders will receive a competitive
return on their investment through a combination of cash
dividends and increases in the share price. the ambition of the
board of directors is to execute ad-hoc dividend distributions
from sales proceeds received by the company through
divestments or other realizations of assets. the company
does not intend to distribute regular or annual dividends,
but will consider dividends on an ongoing basis taking into
consideration the company’s M&A activities, expected cash
flow, capital expenditure plans, financing requirements and
appropriate financial flexibility.
Authorizations for the board of directors
proposals from the board of directors for future authorisations
for share capital increases, share buy-backs or similar shall be
for defined purposes, such as share purchase programs and
acquisitions of companies, and shall remain in effect until the
next annual general meeting.
the company’s annual general meeting on April 10, 2014
resolved to authorize the board to purchase treasury shares
up to an aggregate nominal value of noK 45 484 000 (ten
percent of the share capital). the resolution specified three
purposes for utilization all of which were subject to separate
voting under the general meeting: (i) purchase of treasury
shares to be used as transaction currency in connection
with acquisitions, mergers, demergers and other transfers
of business, (ii) purchase of treasury shares to be sold and/
or transferred to employees under share purchase programs
for employees and (iii) purchase of treasury shares for the
purpose of subsequent deletion of such shares.
the board’s authorization to purchase treasury shares is valid
for the period until the date of the annual general meeting of
2015, however in no circumstances beyond June 30, 2015. In
total, 2 705 000 shares were bought by the company in 2014
for use in the share purchase program in 2014. As of December
31, 2014, the company holds 2 976 376 own treasury shares.
there are no current provisions in the Articles of Association
of the company or power of attorney from the general
meeting which grant the board of directors the mandate to
issue or buy back in the company for the purposes of capital
increases, or to distribute extraordinary dividends. However,
it is the board’s ambition to propose to the annual general
meeting on April 8, 2015 that the board of directors is granted
such authorizations.
Share Purchase Program for Employees
Since 2012 the company has had an annual share purchase
programs for eligible employees. In the 2014 program, all
employees in norway and eight other countries were invited
to buy shares for a maximum amount of noK 60 000. to
In the 2014 program participants were offered a standard
discount of noK 1 500 for participation in addition to a price
reduction of 25 percent on the share price. Management was
also invited to take part in a separate management share
program allowing eligible managers to purchase shares for an
amount equal to 25 percent of their salary and with a discount
of 25 percent on the share price.
the board of directors of Akastor ASA resolved in 2014
that Frank o. Reite, Chief executive officer of Akastor ASA
(either personally or through his wholly-owned subsidiary
Fausken Invest AS) could purchase up to 100 000 treasury
shares yearly from the company under the management share
purchase program of Akastor described above. Chief Financial
officer leif H. Borge and Investment Director Karl erik
Kjelstad were authorized to buy up to 100 000 shares each
under the management share purchase program for 2014
(either personally or through their wholly-owned subsidiaries).
Furthermore, the board resolved that Mr. Reite could purchase
up to 100 000 additional treasury shares in 2014 at the price
of 18.72 noK per share (equivalent with the average share
price for the first 20 days of trading following completion of
the demerger of the Aker Solutions group on September 29,
2014, less a discount of 20 percent.
All shares purchased under the share programs described
above were subject to a three year lock-up period under which
the acquired shares may not be sold or otherwise disposed
of. the sale of shares to employees pursuant to the programs
were realized from treasury shares held at any given time, or
by acquiring additional treasury shares pursuant to existing
authorizations for the board of directors.
4. equal treatment of shareholders and transactions
with related Parties
the company has only one class of shares, and all shares carry
equal rights. existing shareholders shall have pre-emptive
rights to subscribe for shares in the event of share capital
increases, unless otherwise indicated by special circumstances.
If the pre-emptive rights of existing shareholders are waived in
respect of a share capital increase, the reasons for such waiver
shall be explained by the board of directors. transactions in
own shares are effected via the oslo Børs.
As of December 31, 2014, Aker ASA holds 70 percent of the
shares of Aker Kværner Holding AS which holds 40.27 percent
of the shares of Akastor. As per the same date, Aker ASA
directly held 17 331 762 shares of Akastor, equivalent to 6.3
percent of the shares, as well as being exposed to 891 762
shares of Akastor through a total return swap arrangement.
proposition no. 88 (2006–2007) to Stortinget (the norwegian
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parliament) contains more detailed information concerning
the establishment of Aker Kværner Holding AS and the
agreement between Aker ASA and the other shareholder of
Aker Kværner Holding AS.
the board of directors is of the view that it is positive for
Akastor that Aker ASA assumes the role of an active owner
and is actively involved in matters of importance to Akastor
and to all shareholders. the cooperation with Aker ASA
offers Akastor access to special know-how and resources
within strategy, transactions and funding. Moreover, Aker
ASA offers network and negotiation resources from which
Akastor benefits in various contexts. this complements and
strengthens Akastor without curtailing the autonomy of the
group. It may be necessary to offer Aker ASA special access to
commercial information in connection with such cooperation.
Any information disclosed to Aker ASA’s representatives in such
a context will be disclosed in compliance with applicable laws.
Applicable accounting standards and regulations require
Aker ASA to prepare its consolidated financial statements to
include accounting information of Akastor. As of January 1,
2014, Aker ASA is deemed to have control of Akastor pursuant
to the revised accounting standard IFRS 10. Akastor is thus
consolidated as a subsidiary in Aker ASA’s accounts from
this date. Subsequently, Aker Solutions ASA and Kværner
ASA are deemed as related parties to Akastor for accounting
purposes. In order to comply with these accounting standards,
Aker ASA has in the past received, and will going forward
receive, unpublished accounting information of Akastor. Such
distribution of unpublished accounting information from
Akastor to Aker ASA is executed under strict confidentiality
and in accordance with applicable regulations on handling of
inside information.
Aker ASA, Kværner ASA and Aker Solutions ASA (or their
subsidiaries) are however not deemed, within the meaning of the
public limited liability Companies Act, to be a related party of
Akastor. the board of directors and the executive management
team of Akastor are nevertheless very conscious that all relations
with these companies, shall be premised on commercial terms and
structured in line with arm’s length principles.
In the event of any material transactions between the
company and shareholders, directors, senior executives, or
related parties thereof, which do not form part of the ordinary
course of the company’s business, the board of directors
shall arrange for an independent assessment. the same shall,
generally speaking, apply to the relationship between Akastor
and Aker ASA related companies.
Akastor has prepared guidelines as part of its rules of
procedure for the Chief executive officer and board of
directors ensuring that directors and the Chief executive
officer notify the board of directors if they have any
material direct or indirect personal interest in any agreement
concluded by the group. the guidelines stipulate that the
board members and the Chief executive officer shall not
participate in the preparation, deliberation, or resolution of
any matters that are of such special importance to themselves,
or any of their related parties, so that the board member in
question must be deemed to have a prominent personal or
financial interest in such matters. the relevant board member
or the Chief executive officer shall raise the issue of his or her
competence whenever there may be cause to question it, and
are the primary responsible for adopting the correct decision
as to whether he or she should step down from participating
in the discussion of the matter at hand.
In general, as further stipulated in Akastor’s principles for related
party transactions, directors of Akastor should be cautious in
participating in the consideration of issues where a potential
conflict of interest or conflict of role may arise, undermining
the confidence in the decision process. Such person may not
participate in board discussions of more than one company
that is part of the same related party agreement, unless the
companies have common interests. these assessments will
be carried out on a case-by-case basis; in most events, and as
a starting point, by the relevant board members themselves,
but often also in cooperation with internal and/or external legal
counsel. For instance, board member Kjell Inge Røkke, who is
an indirect shareholder of both Aker ASA and Akastor as well
as chairman of the board of Aker ASA will, as a ground rule, not
participate in the board’s discussions of matters that concern
commercial relationships between Akastor and Aker ASA related
companies as his relative indirect ownership interests in Aker
ASA exceed his ownership interests in Akastor. Also, chairman
of the board Øyvind eriksen is the Ceo and shareholder of
Aker ASA, but external legal counsel has concluded that such
shareholding, as a ground rule, is not significant enough to, under
normal circumstances, imply that he is under an obligation to
automatically step down from such discussions.
the above principles will normally also be applied if Akastor
contracts with other companies in which said board members
hold direct or indirect ownership interests that exceed, in
relative terms, their ownership interests in Akastor.
If ground for incapacity is concluded, the relevant board
member will, as a ground rule, prior to the relevant board
meeting, not be granted access to any documentation
prepared to the board of directors for the deliberation of the
agenda item in question.
In general, Akastor applies a strict norm as far as competence
assessments are concerned. In cases where the chairman of the
board of directors does not participate in the deliberations, the
deputy chairman of the board of directors chairs the meeting.
As far as the other officers and employees of Akastor are
concerned, transactions with related parties and conflicts of
interest are comprehensively addressed and regulated in the
group’s Code of Conduct.
the Related parties note to the consolidated financial
statements contains information on the most significant
transactions between Akastor and companies within the Aker
ASA group.
5. freely negotiable shares
the shares are listed on the oslo Børs and are freely
transferable. no transferability restrictions are laid down in the
articles of association.
6. General meetings
Attendance, Agenda and Voting
the company encourages shareholders to attend the general
meetings. It is also the intention to have representatives of the
board of directors as well as the chairman of the nomination
committee and the company’s auditor to attend the general
meetings. notices convening general meetings,
including
comprehensive documentation relating to the items on the
agenda, including the recommendation of the nomination
committee, are made available on the company’s website no
later than 21 days prior to the general meeting. the articles of
association of the company stipulate that documents pertaining
to matters to be deliberated by the general meeting shall only
be made available on the company’s website, and not normally
be sent physically by post to the shareholders unless required
by statute.
the following matters are typically decided at the annual
general meeting, in accordance with the articles of association
of Akastor ASA and norwegian background law:
election of the nomination committee and
stipulation of the nomination committee’s fees;
election of shareholder representatives to the
board of directors;
election of the external auditor and stipulation of
the auditor’s fee;
Approval of the annual accounts and the board of
directors’ report, including distribution of dividend.
other matters which, by law or under the articles
of association, are the business of the annual
general meeting.
the deadline for registering intended attendance is as close
to the general meeting as possible, but not shorter than five
days before the meeting. Shareholders who are unable to
attend may vote by proxy. Moreover, information concerning
both the registration procedure and the filing of proxies is
included in the notice convening the general meeting and on
the registration form. the company also aims to structure, to
the extent practicable, the proxy form such as to enable the
shareholders to vote on each individual item on the agenda.
Chairman
the articles of association stipulate that the general meetings
shall be chaired by the chairman of the board of directors or
a person appointed by said chairman. According to the Code
of practice the board should however «make arrangements
to ensure an independent chairman for the general meeting».
thus, the articles of Akastor ASA deviate from the Code of
practice in this respect. this has its background in a long-
lasting tradition in Akastor. Having the chairman of the board
chairing the general meeting also simplifies the preparations
for the general meetings significantly.
Election of Board Members
It is a priority for the nomination committee that the board
of directors shall work in the best possible manner as a team,
and that the background and competence of the board
members shall complement each other. As a consequence,
the board of directors will propose that the shareholders are
invited to vote on the full board composition proposed by the
nomination committee as a group, and not on each member
separately. Hence, Akastor deviates from the Code of practice
stipulating that one should make «appropriate arrangements
for the general meeting to vote separately on each candidate
nominated for election to the company’s corporate bodies».
Physical Attendance and Electronic Voting
It is a priority for the general meeting to be conducted in a
sound manner, with all shareholder votes to be cast, to the
extent possible, on the basis of the same information. the
company has thus far not deemed it advisable to recommend
the introduction of an electronic attendance, i.e. arranging
for general meetings to be held as physical meetings with
online coverage allowing for shareholders to participate
via web. the company will contemplate the introduction
of such arrangements on an on-going basis in view of;
inter alia, the security and ease of use offered by available
systems. Shareholders will have the opportunity to cast votes
electronically in advance of general meetings (however, not
during the meeting).
Minutes
Minutes of general meetings will be published as soon as
practicable on the announcement system of the oslo Børs,
www.newsweb.no (ticker: AKA), and on the company’s own
website, www.akastor.com.
7. nomination Committee
the articles of association stipulate that the company shall
have a nomination committee. the nomination committee
shall have no less than three members, who shall normally
serve for a term of two years. the current members of the
nomination committee are leif-Arne langøy (chairman),
Gerhard Heiberg, trond Brandsrud and Mette Wikborg. the
members leif-Arne langøy and Mette Wikborg are elected up
until the annual general meeting 2015, while Gerhard Heiberg
and trond Brandsrud are elected up until the annual general
meeting 2016. langøy is deputy chairman of the board in
tRG Holding AS and the Resource Group tRG AS, as well
as chairman of the board of Kværner ASA. trond Brandsrud
is CFo of Aker ASA. no members of the nomination
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committee are employed by, or board members of, Akastor.
the majority of the members of the nomination committee
are independent of both Akastor’s board of directors and the
executive management of the company.
the right of the employees to be represented and participate
in decision making is safeguarded through expanded employee
representation on the board of directors of both Akastor ASA
and in a number of the group’s portfolio companies.
the committee’s recommendations (relating to particularly
members of the board of directors and their remuneration)
shall address how the new board candidates will attend
to the interests of the shareholders in general and fill the
requirements of the company, including with respect to
competence, capacity and independence.
the composition of the nomination committee shall reflect
the interests of all shareholders and ensure independence
from the board of directors and the executive management.
the members and the chairman of the nomination committee
are appointed by the general meeting, which also determines
the remuneration of the committee.
the annual general meeting 2010 adopted guidelines
governing the duties of the nomination committee. According
to these guidelines, the committee shall emphasize that
candidates for the board have the necessary experience,
competence, and capacity to perform their duties in a
satisfactory manner. A reasonable representation with regard
to gender and background should also be emphasized.
the chairman of the nomination committee has the overall
responsibility for the work of the committee. In the exercise
of its duties, the nomination committee may contact, among
others, shareholders, the board, management, and external
advisors. the nomination committee shall also ensure that its
recommendations are endorsed by the largest shareholders.
Information concerning the nomination committee and
deadlines for making suggestions or proposing candidates for
directorships will be made available on the company’s website,
www.akastor.com when there are candidates up for election.
For the annual general meeting 8 April 2015, none of the
directors are up for election.
8. Composition and independence of the
board of Directors
Composition
It has been agreed with the employees that the company
shall have no corporate assembly. Hence, the board appoints
its own chairman, cf. the public limited liability Companies
Act section 6-1(2), unless the chairman is appointed by the
general meeting. the proposal of the nomination committee
will normally include a proposed candidate for appointment as
chair of the board of directors. the board of directors appoints
its own deputy chair. According to the public limited liability
Companies Act, the directors are appointed for a term of
two years at a time unless otherwise stated in the company’s
articles of association. the articles of association of Akastor
ASA stipulate that directors may be elected for a period of
one to three years.
the articles of association stipulate that the board of directors
shall comprise six to twelve persons, one third of whom shall
be elected by and amongst the employees of the group. In
addition, up to three shareholder-appointed alternates may be
appointed. the board of directors comprised eight members
as per September 29, 2014, five of whom were elected by the
shareholders and three of whom were elected by and among
the employees. the company encourages the board members
to hold shares of the company. the shareholdings of the
board members as of December, 31 2014 will be set out in the
Management remunerations note to the consolidated annual
statements in the annual report for 2014. In addition to Øyvind
eriksen’s and Kjell Inge Røkke’s indirect ownership of shares in
the company, also the directors lone Fønss Schrøder, Jannicke
Sommer-ekelund and Asbjørn Michailoff pettersen are
currently shareholders in Akastor ASA. the board composition,
including the board meeting attendance and information about
the board members’ background and expertise will be detailed
in the annual report for 2014.
the appointment of employee representatives to the board
of directors is conducted as prescribed by the public limited
Companies Act and the Representation Regulations. the
board of directors has appointed a designated appointment
committee charged with implementing the appointment of
such employee representatives.
Independence
A majority of the board members elected by the shareholders
are independent of the executive personnel and important
business associates. none of the executive personnel of the
company are members of the board of directors.
the composition of the board of directors aims to ensure that
the interests of all shareholders are attended to, and that the
company has the know-how, resources, and diversity it needs
at its disposal. Among the five shareholder-elected board
members, three of such (Sarah Ryan, lone Fønss Schrøder
and Kathryn M. Baker) are deemed independent from the
company’s largest indirect shareholder, Aker ASA.
9. the Work of the board of Directors
Procedures
the board adopts an annual plan for its work. Furthermore,
there are rules of procedure for the board of directors, which
govern areas of responsibility, duties and the distribution of
roles between the board of directors, the chairman of the
board of directors and the Chief executive officer. the rules
of procedure for the board of directors also include provisions
on convening and chairing board meetings, decision making,
the duty and right of the Chief executive officer to disclose
information to the board of directors, the duty of confidentiality,
etc. According to the company’s articles of association, each
of the board members elected by the shareholders will serve
for a period of one to three years pursuant to further decision
by the general meeting. this to provide the nomination
committee with the flexibility to propose varying terms of
service for the candidates.
Meetings
the board of directors will hold board meetings whenever
needed, but normally six to twelve times a year. the need for
extraordinary board meetings may typically arise because the
internal authorization structure of the company requires the
board of directors to deliberate and approve material tenders
to be submitted by the company. Whilst the deadlines for
such submission often change, it is difficult to fit this into the
calendar of ordinary board meetings.
the board of directors held ten ordinary board meetings in
2014, and in addition, two extraordinary board meetings were
held. the total attendance rate at board meetings for 2014
was 94 percent.
The Matters Discussed in the board
the Chief executive officer prepares cases for deliberation
by the board of directors in cooperation with the chairman of
the board. Weight is attached to having matters prepared and
presented in such a way that the board of directors is provided
with an adequate basis for its deliberations. the board of
directors has overall responsibility for the management of
Akastor and shall, through the Chief executive officer, in
cooperation with the chairman of the board, ensure that
its activities are organized in a sound manner. the board
of directors shall adopt plans and budgets for the business,
and keep itself informed of the financial position of, and
development within, Akastor. this encompasses the annual
planning process of Akastor, with the adoption of overall
goals and strategic choices for the group, as well as financial
plans, budgets, and forecasts for the group and the portfolio
companies. the board of directors performs annual evaluations
of its work and its know-how.
Audit Committee
Akastor will have an audit committee comprising two to four of
the board members. the audit committee currently comprise
the directors lone Fønss Schrøder (chair), Kathryn M. Baker
and Asbjørn Michailoff pettersen. the audit committee is
independent from the management.
At least one of the members of the audit committee shall have
either formal qualifications within accounting or auditing, or
relevant experience and skills within the same. Both members
Fønss Schrøder and Baker have such relevant experience
and skills. the audit committee has a mandate and a working
method that complies with statutory requirements. the audit
committee mandate forms an integrated part of the rules
of procedures for the board of directors. the committee
will participate, on behalf of the board of directors, in the
quality assurance of guidelines, policies, and other governing
instruments pertaining to Akastor. the audit committee
performs a qualitative review of the quarterly and annual
reports of Akastor. Significant judgment calls (uncertain
estimates) made in the financial statements in the quarter
are reviewed by the audit committee. the audit committee
further supports the board of directors in safeguarding
that the company has sound risk management and internal
controls over financial reporting. the audit committee reviews
the status on internal controls on an annual basis.
In order to safeguard appropriate processes and assessments,
the board’s audit committee shall also review major M&A
transactions as well as related party transactions which are
not part of the company’s ordinary course of business, unless
such related party transactions are immaterial.
Akastor currently has no remuneration committee as the
experiences from having such showed more merit in discussing
matters comprised by this committee’s mandate with all board
members present. As of 31 December 2014, there are no other
board committees than the audit committee. the board does
not envisage appointing any further board committees in 2015.
10. risk management and internal Control
Governing principles
the board of directors shall ensure that Akastor has sound
internal control and systems for risk management that
are appropriate in relation to the extent and nature of the
company’s activities. the audit committee supports the
board of directors in safeguarding that the company has
internal procedures and systems that ensure good corporate
internal controls and proper risk
governance, effective
management, particularly in relation to financial reporting. the
Chief Financial officer reports directly to the audit committee
on matters relating to financial reporting, financial risks and
internal controls.
Akastor has implemented an internal system for reporting
serious matters such as breaches of ethical guidelines and
violations of the law. In 2015, it is the ambition of the company
that such reporting system will also be made available to
external parties on www.akastor.com.
Risk Management
the board of directors carries out an annual review of the
company’s most important areas of exposure to risk and its
internal control arrangements.
Akastor employs a decentralised model for allocating
managerial responsibility under which the portfolio companies
are required to establish their own risk management and
control systems. Akastor’s representatives on boards of
directors seek to ensure that the portfolio companies follow
the principles of sound corporate governance.
Akastor manages risk through an internal framework both on a
corporate and portfolio company level comprising guidelines,
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policies and procedures intended to ensure good business
operations and provide unified and reliable financial reporting.
Some of these are adopted already, while some are work in
progress. the board of directors has adopted an authorisation
matrix that forms part of its governing documents where
authority is delegated to the Akastor Chief executive officer.
Furthermore, authorization matrices are adopted for each
of the group’s portfolio companies, pursuant to which the
Akastor Chief executive officer delegates authority to the
boards and Ceos of the respective portfolio companies,
which again adopts authorization matrices for the portfolio
organizations. Special expenditure approval procedures have
also been developed.
the board receives and reviews risk reports prepared by the
management. the management’s risk reporting is based on
the total level of insight obtained through regular reporting
and the close cooperation that Akastor has with the portfolio
companies, including from Akastor’s investment directors
and board representatives. the management of operational
risk primarily occurs in the underlying portfolio companies,
although Akastor acts as an active driver through
its
involvement in the boards.
Akastor’s management holds review meetings with the
management of the different portfolio companies. the
purpose of the meetings is to conduct an in-depth review
of the development of each portfolio company, focusing
on operations, risk management, market conditions, the
competitive situation and strategic issues. these meetings
provide a solid foundation for Akastor’s assessment of its
overall financial and operational risk.
prior to the board’s review of risk reporting, the audit committee
reviews the reported risks and associated risk-reducing measures.
the audit committee also reviews the company’s in-house
reporting systems and internal control and risk management,
and prepares the board’s review of financial reporting.
Financial Reporting
the corporate financial reporting division reports to the
Chief Financial officer and is responsible for the external
reporting process and the internal management reporting
process. this also includes assessing financial reporting risks
and internal controls over financial reporting in the group. the
internal management reporting consists of both financial and
operational information.
the consolidated external financial statements are prepared
in accordance with IFRS and IAS standards as approved by the
eu. the existing policies and standards governing the annual
and quarterly financial reporting in the group, including the
Akastor accounting principles, are available on the Akastor
intranet for Akastor employees.
Clearing meetings are held with the management teams
of the portfolio companies in connection with the annual
closing of accounts and may also be held in connection with
quarterly financial reporting. For the 2014 financial year,
clearing meetings were held in october 2014 and January
2015. the main purpose is to ensure high-quality financial
reporting. Such meetings focus on important items involving
estimation and judgment, non-balance-sheet items, new or
modified accounting principles and other topics relevant to
the respective portfolio companies. the external auditor is
present in the clearing meetings. In addition, there are regular
business review and board meetings in the portfolio companies
which ensures reporting from the portfolio companies to the
corporate management.
Regular reports for Akastor ASA and the portfolio companies
are submitted to the board of directors. the quarterly business
update contains key financial numbers, M&A, financing, status
of value creation plans, compliance, risk management and share
price information for the Akastor group. Further, it contains
key financial numbers, key operational topics, status on value
drivers as well as key market information for the main portfolio
companies. the monthly business update contain high level
financial and operational information for the Akastor group, as
well as key highlights for the main portfolio companies.
11. remuneration of the board of Directors
the remuneration of the board of directors will reflect its
responsibilities, know-how and time commitment, as well as the
complexity of the business. the remuneration will be proposed
by the nomination committee, and is not performance-related
or linked to options in Akastor. More detailed information
about the remuneration of individual board members will
be provided in the Management remunerations note to the
consolidated financial statements for the group in the annual
report for 2014. neither the board members, nor companies
with whom they are affiliated, should accept specific paid duties
for Akastor beyond their directorships. If they nevertheless do
so, the board of directors shall be informed and the reward
shall be approved by the board of directors. no remuneration
shall be accepted from anyone other than the company or the
relevant group company in connection with such duties.
12. remuneration of executive Personnel
the board of directors has adopted designated guidelines
for the remuneration of executive management pursuant to
the provisions of Section 6-16a of the public limited liability
Companies Act. the guidelines were adopted by the general
meeting April 10, 2014. the board of director’s statement on
the remuneration of executive personnel for 2014/2015 will
be a separate appendix to the agenda for the annual general
meeting on April 8, 2015.
Akastor has no option schemes or option programs for the
allotment of shares to employees. the Chief executive officer
determines the remuneration of executive management on
the basis of the guidelines laid down by the board of directors.
All performance-related remuneration within the group will be
made subject to a cap.
13. information and Communication
the company has adopted a designated investor relations
policy which covers, among other things, guidelines for the
company’s contact with shareholders other than through
general meetings. extracts from the policy is available on the
company’s website.
Aker ASA has undertaken to retain control of Aker Kværner
Holding AS for a minimum of ten years from June 2007. the
board of directors has not deemed it appropriate to adopt
specific guidelines for takeover situations for as long as the
ownership cooperation context within Aker Kværner Holding
AS remains intact. this is a deviation from the Code of practice.
the company’s reporting of financial and other information is
based on openness and the equal treatment of all securities
market players. the long-term purpose of the IR function is to
ensure access for the company to capital on competitive terms,
whilst at the same time ensuring that the shareholders are
provided with the most correct pricing of the shares that can be
achieved. this shall take place through the correct and timely
distribution of price-sensitive information, whilst ensuring, at the
same time, that the company is in compliance with applicable
rules and market practices. Reference is also made to the above
discussion concerning the flow of information between Akastor
and Aker ASA in connection with their cooperation within, inter
alia, strategy, transactions, and funding.
All stock exchange announcements and press releases are
made available on the company’s website, and stock exchange
announcements are also available on www.newsweb.no.
All information sent to the shareholders is posted on the
company’s website at the same point of time. the company
holds open presentations in connection with the reporting
of financial performance, and these presentations are
broadcasted live via the internet. the financial calendar of the
company will be made available on the company’s website.
14. take-overs
the overriding principle for Akastor is equal treatment of
shareholders. In a bid situation, the board of directors and
management have an independent responsibility to help ensure
that shareholders are treated equally, and that the company’s
business actitivities are not disrupted unnecessarily. In a take-
over situation, the board will have a particular responsibility to
ensure that shareholders are given sufficient information and
time to form a view of the offer.
15. Auditors
the external auditor annually presents a plan for the
performance of the audit work to the audit committee. In
addition, the auditor provides the board of directors with a
written confirmation to the effect that the independence
requirement is met annually. the auditor attends all audit
committee meetings, and the auditor has reviewed any
material changes to the accounting principles of the company,
or to the internal controls of the company, with the audit
committee. the external auditor also attends the board
meeting where the annual financial statements are reviewed
and approved, normally in March. the board of directors holds
a minimum of one annual meeting with the auditor without
any executive personnel being in attendance.
the board’s audit committee stipulates guidelines on the
scope for using the auditor for services other than auditing, and
makes recommendations to the board of directors concerning
the appointment of the external auditor and the approval
of the auditor’s fees. Fees payable to the auditor, separated
into those relating to auditing and those relating to other
services, are specified in the other operating expenses note
to the consolidated financial statements for the group. For the
approval of the auditor’s fees by the annual general meeting,
the fees are specified into those relating to auditing and those
relating to other services in the proposed resolutions to the
general meeting.
the external auditor has issued a statement to the chair of the
audit committee confirming its independence.
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06. FInAnCIAlS AnD noteS
AkAstor GrouP
Akastor Group | Consolidated income statement
Akastor Group | Consolidated statement of comprehensive income
Akastor Group | Consolidated statement of financial position
Akastor Group | Consolidated statement of changes in equity
Akastor Group | Consolidated statement of cash flow
general
note 1 | Corporate information
note 2 | Basis for preparation
note 3 | Accounting principles
note 4 | Accounting estimates and judgements
Performance of the year
note 5 | Disposal of subsidiaries and demerger of new Aker Solutions
note 6 | operating segments
note 7 | operating revenue and other income
note 8 | Salaries, wages and social security costs
note 9 | operating leases
note 10 | other operating expenses
note 11 | Finance income and expenses
note 12 | tax
note 13 | earnings per share
Assets
note 14 | property, plant and equipment
note 15 | Investment property
note 16 | Intangible assets
note 17 | Interest-bearing receivables
note 18 | equity-accounted investees
note 19 | other investments
note 20 | Construction contracts
note 21 | Inventories
note 22 | trade and other receivables
note 23 | Cash and cash equivalents
equities and liabilities
note 24 | Capital and reserves
note 25 | Borrowings
note 26 | other non-current liabilities
note 27 | employee benefits - pension
note 28 | provisions
note 29 | trade and other payables
financial risk management
note 30 | Capital management
note 31 | Financial risk management and exposures
note 32 | Derivative financial instruments
note 33 | Financial instruments
Other
note 34 | Group companies
note 35 | Related parties
note 36 | Management remunerations
note 37 | Correction of errors
note 38 | Subsequent events
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84
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Akastor Group | Consolidated income statement
for the year ended December 31
Akastor Group | Consolidated statement of comprehensive income
for the year ended December 31
Amounts in NOK million
operating revenue
other income
Total revenue and other income
Materials, goods and services
Salaries, wages and social security costs
other operating expenses
Operating expenses before depreciation, amortization and impairment
Operating profit before depreciation, amortization and impairment
Depreciation and amortization
Impairment
Operating profit (loss)
Finance income
Finance expenses
profit (loss) on foreign currency forward contracts
profit (loss) from equity-accounted investees
Profit (loss) before tax
Income tax expense
Profit (loss) from continuing operations
profit from discontinued operations (net of income tax)
Profit for the period
Profit for the period attributable to:
equity holders of the parent company
non-controlling interests
Note
7
7
37
8
10
14, 15, 16
14, 15, 16
11
11
11
18
12, 37
5, 37
37
2014
21 155
277
21 432
(12 742)
(5 104)
(2 206)
(20 052)
1 380
(922)
(1 164)
(706)
119
(568)
(372)
(126)
(1 653)
266
(1 387)
3 880
2 493
2 482
11
Profit for the period
1) Certain amounts shown here do not correspond to the 2013 financial statements and reflect adjustments made, refer to Note 37.
2 493
earnings per share (NOK)
Basic earnings per share
Diluted earnings per share
earnings per share continuing operations (NOK)
Basic earnings per share
Diluted earnings per share
13, 37
13, 37
9.13
9.13
(5.09)
(5.09)
Restated1)
2013
18 388
60
18 448
(10 230)
(4 819)
(2 044)
(17 093)
1 355
(749)
(370)
235
47
(583)
84
(25)
(242)
4
(238)
1 362
1 124
1 114
10
1 124
4.11
4.11
(0.87)
(0.87)
Amounts in NOK million
profit for the period
other comprehensive income
Items that may be reclassified subsequently to profit or loss:
Cash flow hedges, effective portion of changes in fair value
Deferred tax of cash flow hedges, effective portion of changes in fair value
Cash flow hedges, reclassification to income statement
Deferred tax of cash flow hedges, reclassification to income statement
total change in hedging reserve, net of tax
Change in fair value reserve
Currency translation differences - foreign operations
Total items that may be reclassified subsequently to profit or loss, net of tax
Items that will not be reclassified to profit or loss:
Remeasurement gain (loss) net defined benefit liability
Deferred tax of remeasurement gain (loss) net defined benefit liability
Total items that will not be reclassified to profit or loss, net of tax
Total other comprehensive income, net of tax
Total comprehensive income for the period, net of tax
Attributable to:
equity holders of the parent company
non-controlling interests
Total comprehensive income for the period
Note
2014
2 493
2013
1 124
19
27
(942)
254
345
(99)
(442)
(168)
939
329
(70)
19
(51)
278
2 771
2 750
21
2 771
495
(134)
(134)
40
267
49
973
1 289
25
(7)
18
1 307
2 431
2 427
4
2 431
PRINT
Akastor Group | Consolidated statement of financial position
for the year ended December 31
Akastor Group | Consolidated statement of changes in equity
for the year ended December 31
Note
Dec 31, 2014
Restated1)
Dec 31, 2013
Restated1)
Dec 31, 2012
Remeasure-
ment gain
Total
parent
Amounts in NOK million
Assets
Non-current assets
property, plant and equipment
Investment property
Deferred tax assets
Intangible assets
non-current interest-bearing receivables
other non-current operating assets
equity-accounted investees
other investments
Total non-current assets
Current assets
Current tax assets
Inventories
trade and other receivables
Derivative financial instruments
Current interest-bearing receivables
Cash and cash equivalents
Assets classified as held for sale
Total current assets
Total assets
equity and liabilities
Equity
Issued capital
treasury shares
other capital paid in
Reserves
Retained earnings
Total equity attributable to the equity holders of the parent company
Non-controlling interests
Total equity
Non-current liabilities
non-current borrowings
employee benefits obligations
Deferred tax liabilities
other non-current liabilities
Total non-current liabilities
Current liabilities
Current borrowings
Current tax liabilities
provisions
trade and other payables
Derivative financial instruments
liabilities classified as held for sale
Total current liabilities
Total liabilities
Total liabilities and equity
14
15
12
16
17
18
19
12
21, 37
22
32
17, 37
23
5, 37
24
37
25
27
12, 37
26
25
12
28
29
32
5, 37
6 469
707
214
3 122
131
691
264
347
11 945
43
1 785
7 178
2 199
205
1 075
-
12 485
24 430
162
(2)
1 534
742
6 942
9 378
-
9 378
4 720
473
483
285
5 961
308
97
395
6 429
1 861
-
9 090
15 051
24 430
9 457
358
600
8 242
159
162
440
645
20 063
106
2 419
17 586
1 544
511
2 345
3 367
27 878
47 941
455
(3)
1 534
192
11 036
13 214
161
13 375
7 420
748
2 057
356
10 581
3 896
38
872
17 409
834
936
23 985
34 566
47 941
10 041
-
570
6 884
672
168
283
569
19 187
68
2 360
16 524
441
421
1 214
-
21 028
40 215
455
(6)
1 534
(1 121)
10 961
11 823
157
11 980
6 683
805
1 828
415
9 731
1 008
37
1 173
16 012
274
-
18 504
28 235
40 215
1) Certain amounts shown here do not correspond to the 2012 and 2013 financial statements and reflect adjustments made, refer to Note 37.
oslo, March 13, 2015 | Board of Directors of Akastor ASA
Øyvind eriksen | Chairman
lone Fønns Schrøder
Kjell Inge Røkke
Kathryn Moore Baker
Sarah elizabeth Ryan
Jannicke Sommer-ekelund
Stig Willy Faraas
Asbjørn Michailoff pettersen
Frank ove Reite | Ceo
Amounts in NOK million Note
capital
shares
paid in
earnings
share
Treasury
capital
Retained
Hedging
reserve1
translation
reserve1
fined benefit
obligations
value
reserve1)
equity
controlling
Total
holders
interests
equity
Other
Currency
(loss) net de-
fair
company
Non-
equity as of
January 1, 2013
Restatement
Restated equity as of
january 1, 2013
2013
profit for the period
other comprehensive
income
Total comprehensive
income
Transactions with equity holders
24
24
8, 24
Dividend
treasury shares
employee share
purchase program
Total transactions
with equity holders
equity as of December
31, 2013
455
-
(6)
1 534
10 961
-
-
(37)
144
-
(1 157)
(227)
119
11 823
157
11 980
-
-
-
(37)
-
(37)
455
(6)
1 534
10 924
144
(1 157)
(227)
119
11 786
157
11 943
-
-
-
-
-
-
-
-
-
-
-
3
-
3
-
-
-
-
-
-
1 114
-
-
-
267
979
1 114
267
979
(1 082)
180
(100)
-
(1 002)
-
-
-
-
-
-
-
-
-
18
18
-
-
-
-
-
1 114
10
1 124
49
1 313
(6)
1 307
49
2 427
4
2 431
-
-
-
-
(1 082)
183
-
-
(1 082)
183
(100)
-
(100)
(999)
-
(999)
455
(3)
1 534
11 036
411
(178)
(209)
168
13 214
161
13 375
2014
profit for the period
other comprehensive
income
Total comprehensive
income
-
-
-
Transactions with equity holders
Demerger of
new Aker Solutions
Dividend
treasury shares
employee share
purchase program
Total transactions
with equity holders
equity as of December
31, 2014
24
24
8, 24
(293)
-
-
-
(293)
-
-
-
2
-
(1)
-
1
-
-
-
-
-
-
-
2 482
-
-
-
-
2 482
11
2 493
-
(442)
929
(51)
(168)
268
10
278
2 482
(442)
929
(51)
(168)
2 750
21
2 771
(5 428)
388
(105)
(1 115)
(59)
26
-
-
-
-
-
-
(1)
-
-
-
-
-
-
-
(5 437)
(1 115)
(60)
26
(182)
(5 619)
-
-
-
(1 115)
(60)
26
-
(6 576)
388
(105)
(1)
-
(6 586)
(182)
(6 768)
162
(2)
1 534
6 942
357
646
(261)
-
9 378
-
9 378
1) See note 24 Capital and reserves for more information.
PRINT
Akastor Group | Consolidated statement of cash flow
for the year ended December 31
Amounts in NOK million
Cash flow from operating activities
profit for the period - continuing operations
profit for the period - discontinued operations
Profit for the period
Adjustments for:
Income tax expense
net interest cost and unrealized currency (gain) loss
(profit) loss on foreign currency forward contracts
Depreciation, amortization and impairment
(profit) loss on disposals and non-cash effects
(profit) loss from equity-accounted investees
Total adjustments
Changes in operating assets
Cash generated from operating activities
Interest paid
Interest received
Income taxes paid
Dividends received
Net cash from operating activities
Cash flow from investing activities
Acquisition of subsidiaries, net of cash acquired
Acquisition of property, plant and equipment
payments for capitalized development
proceeds from sale of subsidiaries, net of cash
proceeds from sale of property, plant and equipment
proceeds from sale of equity-accounted investments
Acquisition of equity-accounted investments
proceeds from other investments
proceeds from repayment of interest-bearing receivables
payment related to increase in interest-bearing receivables
Net cash from investing activities
Cash flow from financing activities
proceeds from borrowings
Repayment of borrowings
Repurchase of treasury shares
proceeds from employees share purchase program
Contribution from non-controlling interests
Dividends to shareholders
Net cash from financing activities
effect of exchange rate changes on cash and bank deposits
Net increase (decrease) in cash and bank deposits
Demerger of new Aker Solutions2)
Cash and cash equivalents at the beginning of the period
Cash and cash equivalents at the end of the period
of which is restricted cash
Note
2014
Restated1)
2013
(1 387)
3 880
2 493
167
347
436
2 392
(2 956)
51
2 997
(1 578)
1 353
(696)
136
(312)
7
488
(126)
(1 302)
(639)
5 948
15
124
(11)
21
513
(42)
4 499
3 770
(7 963)
(60)
26
6
(1 115)
(5 336)
142
(206)
(1 064)
2 345
1 075
39
(237)
1 362
1 125
502
1 054
(262)
1 872
(66)
24
4 249
(191)
4 058
(796)
149
(333)
-
3 078
(1 136)
(2 651)
(821)
-
39
20
-
29
293
(25)
(4 252)
4 182
(901)
(100)
183
-
(1 082)
2 282
23
1 131
-
1 214
2 345
34
14, 15, 16
14
16
5
14, 15
24
24
24
23
1) Certain amounts shown here do not correspond to the 2013 financial statements and reflect adjustments made, refer to Note 37.
2) Refer to Note 5 for more information about the demerger.
note 1 | Corporate information
Akastor ASA (the Company) is a limited liability company incorporated and
the consolidated financial statements of Akastor ASA and its subsidiaries
domiciled in norway and whose shares are publicly traded. the registered
(collectively, the group and separately as group companies) for the year
office is located at Fjordalléen 16, oslo. the ultimate parent company is
ended 31 December 2014 were approved by the board of directors and
the Resourcec Group tRG AS.
Ceo on 13 March 2015. the consolidated financial statements will be
on 26 September, 2014, the demerger of Akastor was completed and
Aker Solutions Holding ASA (“new Aker Solutions”), a subsidiary of
the group is an oil-services investment company with a portfolio of
Akastor ASA established for the purposes of the demerger, was listed on
industrial holdings, real estate and other investments. Akastor is listed
the oslo Stock exchange on September 29, 2014. At the same time Aker
on the oslo Stock exchange under the ticker AKA. Information on the
Solutions ASA changed name to Akastor ASA.
group’s structure is provided in note 34. Information on other related
authorised by the Annual General Meeting on 8 April 2015.
party relationships of the group is provided in note 35.
note 2 | basis for preparation
Basis of accounting
the consolidated financial statements have been prepared in accordance
the estimates and underlying assumptions are reviewed on an ongoing
with International Financial Reporting Standards (IFRS) as approved by
basis. Revisions to accounting estimates are recognized in the period in
the european union, their interpretations adopted by the International
which the estimate is revised and in any future periods affected.
Accounting Standards Board (IASB) and the additional requirements of
the norwegian Accounting Act as of December 31, 2014.
Demerger of Akastor
Basis of measurement
Several transactions occurred in 2014 in order to demerge Akastor
and reorganize the Aker Solutions businesses under the ownership
the consolidated financial statements have been prepared on the
of Aker Solutions Holding ASA (renamed to Aker Solutions ASA). the
historical cost basis except for the following material items, which are
transactions primarily involved demergers of companies, transfer of
measured on an alternative basis on each reporting date:
shares in subsidiaries and sale of assets. unsettled balances are presented
Derivative financial instruments are measured at fair value.
financial statements. All transactions related to the restructuring were
as interest-bearing payables and receivables to related parties in the
Available-for-sale financial assets are measured at fair value.
Contingent consideration assumed in business combinations
are measured at fair value.
net defined benefit (asset) liability is recognized at fair value
of plan assets less the present value of the defined benefit
obligation.
Functional and presentation currency
completed in 2014. See note 34 for overview of group companies in
Akastor after the demerger.
the demerger of Akastor is a transaction under common control outside
the scope of IFRS 3 Business Combinations and IFRS 17 Distribution of
non-cash assets to owners. Akastor has established the accounting policy
to account for such transactions at book value and accordingly no gain is
recognized in net profit from discontinued operations.
these consolidated financial statements are presented in noK, which is
In preparation of the continuing operations the following key allocations
Akastor ASA’s functional currency. All financial information presented in
between Akastor and new Aker Solutions were made up until the date of
noK has been rounded to the nearest million (noK million), except when
the demerger:
otherwise stated. the subtotals and totals in some of the tables in these
consolidated financial statements may not equal the sum of the amounts
Corporate and other shared costs
shown due to rounding.
Continuing operations include direct expenses as well as allocations arising
from certain shared expenses including office facilities, and management
When the functional currency in a reporting unit is changed, the effect of
fees covering costs related to corporate services provided centrally, such
the change is accounted for prospectively.
as tax, legal, treasury, compliance, business development, insurance,
Use of estimates and judgements
Allocations are made based upon an appropriate allocation method
the preparation of financial statements in conformity with IFRS requires
depending upon the nature of the costs. Headcount, square meters and
management to make judgements, estimates and assumptions that affect
revenues are some of the variables used to perform such allocations.
staffing, risk management, It support and corporate accounting services.
the application of policies and reported amounts of assets and liabilities,
income and expenses. Although management believes these assumptions
Allocation of finance costs
to be reasonable, given historical experience, actual amounts and results
Financial items from group finance arrangements have been allocated
could differ from these estimates. the items involving a higher degree of
based on capital employed. Akastor believes that while the basis for
judgement or complexity, and items where assumptions and estimates are
allocating such costs is reasonable for prior periods, the amounts may not
material to the consolidated financial statements, are disclosed in note 4
be representative of the finance costs necessary for Akastor to operate as
Accounting estimates and judgements.
a separate stand-alone entity.
PRINT
Changes in accounting policies
Interests in associates and jointly controlled entities are accounted for using
expenses from continuing operations, down to the level of profit after
except for the changes below, the group has consistently applied the
Amendments to IAS 36 Impairment of Assets: Recoverable
the equity method. they are initially recognized at cost, which includes
taxes. When an operation is classified as a discontinued operation, the
accounting policies set out in note 3 Accounting principles to all periods
Amount Disclosures for non-Financial Assets
transaction costs. Subsequent to initial recognition, the consolidated
comparative income statement is re-presented as if the operation had
presented in theses consolidated financial statements.
the group adopted the following new standards and amendments to
standards, including any consequential amendments to other standards,
Amendments to IAS 39 Financial Instruments: Recognition
and Measurement: novation of Derivatives and Continuation
of Hedge Accounting
financial statements include the group’s share of the profit and loss and
been discontinued from the start of the comparative year.
other comprehensive income of the equity-accounted investees. the
group’s investment includes goodwill identified on acquisition, net of
eliminations
include
inter-segment revenues and
interests
from
any accumulated impairment losses. When the group’s share of losses
discontinued operations only to the extent that these revenues represent
with a date of initial application of January 1, 2014:
Amendments to IAS 32 Financial Instruments: presentation -
exceeds its interest in an equity-accounted investee, the carrying amount
operations that will not be continued in future periods.
offsetting Financial Assets and Financial liabilities
of that interest, including any long-term investments, is reduced to zero,
IFRS 10 Consolidated Financial Statements
IFRS 11 Joint Arrangements
IFRS 12 Disclosures of Interests in other entities
none of these standards have materially impacted the group’s financial
statements upon implementation and previous years have not been
restated. However, adoption of IFRS 10 have affected the group’s financial
statements indirectly through Aker ASA’s revised assessment that they
Amendments to IFRS 10 Consolidated Financial Statements,
have control of Kvaerner ASA, Akastor ASA and new Aker Solutions ASA
IFRS 12 Disclosure of Interests in other entities and IAS 27
under the new standard. Following this change, Kvaerner and new Aker
Separate Financial Statements: Investment entities
Solutions ASA will be reported as a related party of Akastor as from 2014.
note 3 | Accounting principles
and further losses are not recognized except to the extent that the group
the statement of cash flow includes the cash flow from discontinued
incurred legal or constructive obligations or has made payments on behalf
operations. Cash flows attributable to the operating, investing and
of the investee.
financing activities of discontinued operations are presented in the notes
to the extent these represent cash flows with third parties.
the purpose of the investment determines where the profits and losses
arising from the investment is presented in the income statement. When
Foreign currency
entities are formed to share risk in executing a project or are closely
Foreign currency transactions and balances
related to Akastor’s operating activities, the share of the profit or loss is
transactions in foreign currencies are translated at the exchange rate at
reported as part of other income in operating profit. Share of the profit or
the date of the transaction. Monetary assets and liabilities denominated
loss on financial investments is reported as part of Financial items.
in foreign currencies at the balance sheet date are translated to the
functional currency at the exchange rate on that date. Foreign exchange
Transactions eliminated on consolidation
differences arising on translation are recognized in the income statement.
Summary of significant accounting policies
When the group has entered into put options with non-controlling
Intra-group balances and transactions, and any unrealised gains and
non-monetary assets and liabilities measured in terms of historical cost
the principal accounting policies applied in the preparation of these
shareholders on their shares in that subsidiary, the anticipated acquisition
losses or income and expenses arising from intra-group transactions, are
in a foreign currency are translated using the exchange rate on the date
consolidated financial statements are set out below. these policies have
method is used. the agreement is accounted for as if the put option had
eliminated in preparing the consolidated financial statements. unrealised
of the transaction. non-monetary assets and liabilities denominated
been consistently applied to all the years presented, unless otherwise stated.
already been exercised. If the put option expires unexercised, then the
gains arising from transactions with associates and jointly controlled
in foreign currencies that are stated at fair value are translated to the
liability is derecognized and the non-controlling interest is recognized.
entities are eliminated to the extent of the group’s interest in the entity.
functional currency at the exchange rates on the date the fair value was
Basis of consolidation
Subsidiaries
Acquisitions of non-controlling interests
only to the extent that there is no evidence of impairment.
unrealised losses are eliminated in the same way as unrealised gains, but
determined.
Subsidiaries are entities controlled by the group. the group controls
Acquisitions of non-controlling interests are accounted for as transactions
Investments in foreign operations
an entity when it is exposed to, or has rights to, variable returns from
with owners in their capacity as owners and therefore no goodwill is
Assets held for sale or distribution
Items included in the financial statements of each of the group’s entities
its involvement with the entity and has the ability affect those returns
recognized as a result. Adjustments to non-controlling interests arising
non-current assets, or disposal groups comprising assets and liabilities,
are measured using the currency of the primary economic environment
through its power over the entity. the financial statements of subsidiaries
from transactions that do not involve the loss of control are based on a
that are expected to be recovered primarily through sale or distribution
in which the entity operates. the results and financial position of all the
are included in the consolidated financial statements from the date on
proportionate amount of the net assets of the subsidiary.
rather than through continuing use, are classified as held for sale or
group entities that have a functional currency different from the group’s
which control commences until the date of which control ceases.
distribution. this condition is regarded as met only when the sale is highly
presentation currency are translated into the presentation currency
Business combinations
on the loss of control, the group derecognizes the assets and liabilities of
or distribution in its present condition. Management must be committed
Business combinations are accounted for using the acquisition method as
the subsidiary, any non-controlling interests and the other components of
to the sale or distribution, which should be expected to qualify for
Assets and liabilities, including goodwill and fair value
of the acquisition date, which is the date of which control is transferred
equity. Any resulting gain or loss is recognized in the income statement.
recognition as a completed sale or distribution within one year from the
adjustments, for each balance sheet presented are translated
to the group.
Any interest retained in the former subsidiary is measured at fair value
date of classification.
at the closing rate on the date of that balance sheet.
Loss of control
probable and the asset or disposal group is available for immediate sale
as follows:
the group measures goodwill at the acquisition date as:
the fair value of the consideration transferred, plus
the recognized amount of any non-controlling interests in the
acquiree, plus
when control is lost. Subsequently it is accounted for as an equity-
accounted investee or as an available for sale financial asset depending on
non-current assets and disposal groups classified as held for sale or
the level of influence retained.
distribution are measured at the lower of their carrying amount and fair value
less costs to sell. property, plant and equipment and intangible assets once
Income and expenses for each income statement are
translated at average exchange rates for the year, calculated
on the basis of 12 monthly rates.
Investments in associates and jointly controlled entities
classified as held for sale or distribution are not depreciated or amortized, but
exchange differences arising from the translation of the net investment in
the group’s interests in equity-accounted investees comprise interests in
are considered in the overall impairment testing of the disposal group.
foreign operations, and of related hedges, are included in comprehensive
if the business combination is achieved in stages, the fair value
associates and joint ventures.
income as a currency translation reserve. these translation differences
of the pre-existing equity interest in the acquiree, less
the net recognized amount (generally at fair value) of the
identifiable assets acquired and liabilities assumed.
Associates are those entities in which the group has significant influence,
or disposal groups are first classified as a held for sale or distribution.
operations or when settlement is likely to occur in the near future.
no reclassifications are made for years prior to the year non-current assets
are reclassified to the income statement upon disposal of the related
but not control or joint control, over the financial and operating policies.
Significant influence is presumed to exist when the group holds between
Discontinued operations
exchange differences arising on a non-current monetary item where
When the excess is negative, a bargain purchase gain is recognized
20 and 50 percent of the voting power of another entity. A joint venture
A discontinued operation is a component of the group’s business that
settlement in the near future is not probable forms part of the net
immediately in the income statement. transaction costs, other than
is an arrangement in which the group has joint control, whereby the
represents a separate major line of business or geographical area of
investment in that entity. Such exchange differences are recognized in
those associated with the issue of debt or equity securities incurred in
group has rights to the net assets of the arrangement, rather to its assets
operations that has been disposed of or is held for sale or distribution,
comprehensive income.
connection with a business combination are expensed as incurred.
and obligations for its liabilities. Jointly controlled entities are those
or is a subsidiary acquired exclusively with a view to resale. Classification
Any contingent consideration payable is measured at fair value at the
contractual agreement requiring unanimous consent of the ventures for
meets the criteria to be classified as held for sale, if earlier.
Financial assets and liabilities in the group consists of investments
acquisition date. Changes in the fair value of the contingent consideration
strategic, financial and operating decisions.
in other companies, trade and other receivables,
interest-bearing
from acquisition of a subsidiary or non-controlling interest for transactions
will be recognized in other income as gains or losses.
In the consolidated income statement income and expenses from
receivables, cash and cash equivalents, trade and other payables and
discontinued operations are reported separately from income and
interest-bearing borrowings.
entities over whose activities the group has joint control, established by
as a discontinued operation occurs upon disposal or when the operation
Financial assets, financial liabilities and equity
PRINT
the group initially recognizes borrowings and receivables on the date
Share capital
the relevant economic environment defined as the countries involved
Lease income
when they are originated. All other financial assets and financial liabilities
ordinary shares are classified as equity. Repurchase of share capital is
in the cross-border transaction. Changes in the fair value of separated
Revenue from time charters and bareboat charters are recognized daily over
are initially recognized on the trade date.
recognized as a reduction in equity and is classified as treasury shares.
embedded derivatives are recognized
immediately
in the
income
the term of the charter. the company does not recognize revenue during
statement. All foreign currency exposure is hedged, so the hedging
days that the vessel is off-hire. other rental income from operating leases,
Other investments
Derivative financial instruments
instrument to the embedded derivative will also have corresponding
mainly related to investment properties and office leases, is recognized as
other investments include equity securities where the group has neither
the group uses derivative financial instruments such as currency forward
opposite fair value changes in the income statement.
revenue on a straight-line basis over the term of the relevant lease.
control nor significant influence, usually represented by less than 20 percent
contracts and currency swaps to hedge its exposure to foreign exchange
lease income is in included operating service revenue.
of the voting power. the investments are categorised as available-for-sale
risks arising from operational, financial and investment activities. these
Financial income and expense
financial assets and are recognized initially at fair value. Subsequent to initial
derivative financial instruments are accounted for as cash flow hedges
Financial income and expense includes interest income and expense on
Other income
recognition, they are measured at fair value and changes therein, other
since future highly probable cash flows are hedged (rather than committed
financial assets and liabilities, foreign exchange gains and losses, dividend
Gains and losses resulting from acquisition and disposal of businesses
than impairment losses, are recognized in other comprehensive income
revenues and expenses). the group also has embedded foreign exchange
income and gains and losses on derivatives. Interest income and expenses
which do not represent discontinued operations are
included
in
and presented in the fair value reserve in equity. When an investment is
derivatives which have been separated from their ordinary commercial
includes calculated interest using the effective interest method, in addition
other income within operating profit. Such gains may result from the
derecognized, the gain or loss accumulated in equity is reclassified to profit
contracts. Derivative financial instruments are recognized initially at fair
to discounting effects from assets and liabilities measured at fair value.
remeasurement of a previously held interest in the acquired entity.
and loss. Impairment losses are recognized in the income statement when
value. Derivatives are subsequently measured at fair value, and changes in
Gains and losses on derivatives include effects from derivatives that do
Changes in the fair value of the contingent consideration from acquisition
the decrease in value is significant or prolonged.
fair value is accounted for as described below.
not qualify for hedge accounting and embedded derivatives, in addition to
of a subsidiary or non-controlling interest are recognized in other income
the ineffective portion of qualifying hedges.
as gains or losses.
Investments in equity securities that do not have a quoted market price
Cash flow hedges
in an active market and whose fair value cannot be reliably measured, are
Hedging of the exposure to variability in cash flows that is attributable
measured at cost.
to a particular risk or a highly probable future cash flow is defined as
Revenue recognition
Construction contracts
Share of profit from associated companies and jointly controlled
operations, to the extent that these investments are related to the group’s
a cash flow hedge. the effective portion of changes in the fair value is
Construction contract revenues are recognized using the percentage of
operating activities, are included in other income within operating profit,
Trade and other receivables
recognized in other comprehensive income as a hedge reserve. All foreign
completion method. Stage of completion is determined by the method
as well as gains and losses related to the sale of operating assets.
trade receivables are recognized at the original invoiced amount, less
exchange exposure is hedged, of which about 80 percent qualifies for
that measures reliably the work performed. Depending on the nature of
an allowance made for doubtful receivables. other receivables are
hedge accounting. the gain or loss relating to the ineffective portion of
the contract, the two main methods used by Akastor to assess stage of
Expenses
recognized initially at fair value. trade and other receivables are valued at
derivative hedging instruments is recognized immediately in the income
completion are:
Construction contracts
amortized cost using the effective interest rate method. the interest rate
statement within finance income and expense. Amounts accumulated in
element is disregarded if insignificant, which is the case for the majority of
hedge reserves are reclassified to the income statement in the periods
the group’s trade receivables.
when the hedged item is recognized in the income statement.
Current interest-bearing receivables
Hedge accounting is discontinued when the hedge no longer qualifies for
technical completion, or
contract costs incurred to date compared to estimated total
contract costs.
Contract costs include costs that relate directly to the specific contract
and allocated costs that are attributable to general contract activity.
Costs that cannot be attributed to contract activity are expensed.
tender costs are capitalized when it is probable that the company will
obtain the contract. All other bidding costs are expensed as incurred. See
Current interest bearing receivables include bonds, securities and mutual
hedge accounting. Disqualification occurs when the hedging instrument
When the final outcome of a contract cannot be reliably estimated,
note 4 Accounting estimates and judgements for further description of
funds with short-term maturity. these assets are designated upon initial
expires, is sold, terminated or exercised, or when a forecast transaction is
contract revenue is recognized only to the extent of costs incurred that
recognition of construction contract costs.
recognition as at fair value through profit and loss.
no longer expected or the hedge is no longer effective. When a hedge is
are expected to be recoverable. the revenue recognized in one period
Non-current interest-bearing receivables
is recognized immediately in the income statement unless it relates to a
to date effect of any changes to the estimated final outcome. losses on
payments made under operating leases are recognized in the income
Interest bearing receivables include loans to related parties and other
future cash flow that is likely to occur, but don’t classify for hedge accounting,
contracts are fully recognized when identified.
statement on a straight-line basis over the term of the lease. Any lease
receivables with fixed or determinable payments that are not quoted
in which the accumulated hedge reserve remains in other comprehensive
incentives received are recognized as an integral part of the total lease
in an active market. Such financial assets are recognized initially at fair
income until the hedged cash flow is recognized in income statement.
Contract revenues include variation orders and incentive bonuses when it
expense, over the term of the lease.
disqualified the cumulative gain or loss that was deferred in the hedge reserve
will be the revenues attributable to the period’s progress and the progress
Lease payments
value and subsequent measurement at amortized cost using the effective
interest method, less any impairment losses.
Net investment hedges
is probable that they will result in revenue that can be measured reliably.
Disputed amounts and claims are only recognized when negotiations
Income tax
Cash and cash equivalents
to cash flow hedges. Gains or losses arising from the hedging instruments
and the amounts can be measured reliably. options for additional assets
deferred tax. Income tax is recognized in the income statement except
Cash and cash equivalents include cash on hand, demand deposits held
relating to the effective portions of the net investment hedges are
are included in the contract when exercised by the buyer. In the rare
to the extent that it relates to items recognized directly in equity or in
A hedge of a net investment in a foreign operation is accounted for similarly
have reached an advanced stage, customer acceptance is highly likely
Income tax in the income statement for the year comprises current and
at banks and other short-term highly liquid investments with original
recognized in other comprehensive income as translation reserves. these
circumstances that the option is a loss contract, the full loss is recognized
comprehensive income.
maturity of three months or less.
translation reserves are reclassified to the income statement upon disposal
when it is probable that the options will be exercised.
Trade and other payables
these net investments. Any ineffective portion is recognized immediately
See note 4 Accounting estimates and judgements for further description
or loss for the year, using tax rates enacted or substantially enacted at the
trade payables are recognized at the original invoiced amount. other
in the income statement within net financial items. Gains and losses
of recognition of construction contract revenue.
reporting date, and any adjustment to tax payable in respect of previous
payables are recognized initially at fair value. trade and other payables
accumulated in equity are included in the income statement when the
years. Current tax payable also includes any tax liability arising from the
are valued at amortized cost using the effective interest rate method. the
foreign operation is partially disposed of or sold.
Goods sold and services rendered
declaration of dividends, recognized at the same time as the liability to
of the hedged net investments, offsetting the translation differences from
Current tax is the expected tax payable or receivable on the taxable income
interest rate element is disregarded if it is insignificant, which is the case
Revenue from the sale of goods is recognized in the income statement
pay the related dividend.
for the majority of the group’s trade payables.
Embedded derivatives
when the significant risks and rewards of ownership have been transferred
An embedded derivative is any contract embedded in a host contract
to the buyer, which is usually when goods are shipped to customers.
Deferred tax is recognized in respect of temporary differences between
Interest-bearing borrowings
which meets the definition of a derivative. under certain conditions the
Revenue from services rendered is recognized in the income statement
the carrying amounts of assets and liabilities for financial reporting and the
Interest-bearing borrowings are recognized initially at fair value less
embedded derivative must be separated from its host contract and the
in proportion to the stage of completion of the transaction at the balance
amounts used for taxation purposes. Deferred tax is not recognized for:
attributable transaction costs. Subsequent to initial recognition, interest-
derivative is then to be recognized and measured as any other derivative in
sheet date or is invoiced based on hours performed at agreed rates. the
bearing borrowings are stated at amortized cost with any difference
the financial statements. embedded derivatives must be separated when
stage of completion is normally assessed based on the proportion of costs
Goodwill not deductible for tax purposes
between cost and redemption value being recognized in the income
the settlement for a commercial contract is denominated in a currency
incurred for work performed to date compared to the estimated total
statement over the period of the borrowings on an effective interest basis.
different from any of the major contract parties’ own functional currency,
contract costs. no revenue is recognized if there is significant uncertainty
or that the contract currency is not considered to be commonly used for
regarding recovery of consideration due.
the initial recognition of assets or liabilities that affect
neither accounting nor taxable profit
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Differences relating to investments in subsidiaries to the
Other financial assets
Onerous contracts
extent that they will not reverse in the foreseeable future.
the recoverable amount of receivables carried at amortized cost are
A provision for onerous contracts is recognized when the expected
Goodwill is measured at cost less accumulated impairment losses. In
calculated as the present value of estimated future cash flows, discounted
benefits to be derived by the group from a contract are lower than the
respect of equity-accounted investees, the carrying amount of goodwill
Deferred tax is measured at the tax rates that are expected to be applied
at the original effective interest rate (the effective interest rate computed
unavoidable cost of meeting the obligations under the contract. the
is included in the carrying amount of the investment, and any impairment
to temporary differences when they reverse, based on the laws that have
at initial recognition of the financial assets). Impairment losses are incurred
provision is measured at the lower of the expected cost of terminating
loss is allocated to the carrying amount of the equity-accounted investee
been enacted or substantively enacted by the reporting date.
only if there is objective evidence of impairment as a result of one or more
the contract and the expected net cost of continuing with the contract.
as a whole.
events that occurred after the initial recognition of the asset (a loss event)
Before a provision is established, the group recognizes any impairment
Deferred tax assets and liabilities are offset if there is a legally enforceable
and that loss event has an impact on the estimated future cash flows of
loss on the assets associated with the contract.
When the group disposes of an operation within a CGu or group of CGus
right to offset current tax liabilities and assets, and they relate to
the financial assets that can be reliably estimated.
income taxes levied by the same tax authority on the same taxable
entity, or on different tax entities, but they intend to settle current tax
Non-financial assets
Property, plant and equipment
Owned assets
to which goodwill has been allocated, a portion of the goodwill is included
in the carrying amount of the operation when determining the gain or
loss on disposal. the portion of the goodwill allocated is measured based
liabilities and assets on a net basis or their tax assets and liabilities will be
the carrying amounts of the group’s assets, other than employee benefit
property, plant and equipment are stated at cost less accumulated
on the relative values of the operation disposed of and the portion of the
realised simultaneously.
assets, inventories, deferred tax assets and derivatives are reviewed
depreciation and impairment losses. the cost of self-constructed assets
CGu retained at the date of partial disposal, unless it can be demonstrated
A deferred tax asset is recognized for unused tax losses, tax credits and
indication of impairment. If an indication of impairment exists, the asset’s
assets, production overheads and the estimated costs of dismantling and
the operation disposed of. the same principle is used for allocation of
deductible temporary differences, to the extent that it is probable that
recoverable amount is estimated. Cash-generating units (CGu) containing
removing the assets and restoring the site on which they are located.
goodwill when the group reorganizes its businesses.
at the end of each reporting period to determine whether there is any
includes the cost of materials, direct labour, borrowing costs on qualifying
that another method better reflects the goodwill associated with
future taxable profits will be available against which they can be utilized.
goodwill, assets that have an indefinite useful life and intangible assets
Deferred tax assets are reviewed at each reporting date and are reduced
that are not yet available for use are tested for impairment annually.
If components of property, plant and equipment have different useful
Research and development
to the extent that it is no longer probable that the related tax benefit will
lives, they are accounted for as separate components.
expenditures on research activities undertaken with the prospect of
be realised.
the recoverable amount is the greater of fair value less costs to sell and
obtaining new scientific or technical knowledge and understanding is
value in use. In assessing value in use, the estimated future cash flows
Subsequent costs
recognized in the income statement as incurred.
Construction work in progress
are discounted to their present value using a post-tax discount rate that
the group capitalizes the cost of a replacement part or a component of
Construction work in progress represents the aggregate amount of costs
reflects current market assessments of the time value of money and the
property, plant and equipment when that cost is incurred if it is probable
Development activities involve a plan or design for the production of
incurred and recognized profits, less the sum of recognized losses and
risks specific to the asset. For an asset that does not generate largely
that the future economic benefits embodied with the item will flow to the
new or substantially improved products or processes. Development
progress billings. the presentation in the balance sheet of the construction
independent cash inflows, the recoverable amount is determined for the
group and the cost of the item can be measured reliably. All other costs
expenditure is capitalized only if development costs can be measured
work in progress depends on the financial status of the individual projects.
CGu to which the asset belongs.
are expensed as incurred.
All projects with net amounts due from customers are summarised in
the balance sheet and presented as an asset, and all projects with net
An impairment loss is recognized whenever the carrying amount of an
Depreciation
reliably, the product or process is technically and commercially feasible,
future economic benefits are probable and the group intends to and
has sufficient resources to complete development and to use or sell the
amounts due to customers are summarised and presented as a liability in
asset or its CGu exceeds its recoverable amount. Impairment losses are
Depreciation is normally recognized on a straight-line basis over the
asset. the expenditure capitalized include the cost of materials, direct
the balance sheet. Advances are presented separately as such advances
recognized in the income statement.
estimated useful lives of property, plant and equipment. the production unit
labour overhead costs that are directly attributable to preparing the asset
represent payments from customers in excess of the work performed.
method is used for depreciation in limited circumstances when appropriate.
for it intended use and capitalized interest on qualifying assets. other
Inventories
goodwill and then to the other assets in the unit (group of units) on a pro
Investment property
expense as incurred.
Inventories are stated at the lower of cost or net realisable value. net
rata basis.
realisable value is the estimated selling price in the ordinary course of
Investment properties are properties held either to earn rental income
or for capital appreciation, or for both. these properties are not used
Capitalized development expenditure is measured at cost less accumulated
business, less the estimated costs of completion and selling expenses.
An impairment loss on goodwill is not reversed. An impairment loss on
in production, deliveries of goods and services, or for administrative
amortization and accumulated impairment losses.
An impairment loss recognized in respect of CGu is allocated first to
development expenditures are recognized in the income statement as an
the cost of inventories is based on the first-in first-out principle and
to determine the recoverable amount, and the change can be objectively
principles as for property, plant and equipment (see description above).
Other intangible assets
includes expenditures incurred in acquiring the inventories and bringing
related to an event occurring after the impairment was recognized. An
Acquired intangible assets are measured at cost less accumulated
other assets is reversed if there has been a change in the estimates used
purposes. Investment properties are measured at cost applying the same
them to their existing location and condition. In the case of manufactured
impairment loss is reversed only to the extent that the asset’s carrying
Financial leases
amortization and impairment losses.
inventories and work in progress, cost includes an appropriate share of
amount does not exceed the carrying amount that would have been
leases where the group assumes substantially all the risks and rewards of
overheads based on normal operating capacity.
determined, net of depreciation or amortization, if no impairment loss
ownership are classified as finance leases. At the beginning of the leasing
Subsequent expenditures
Impairment
Trade and other receivables
had been recognized.
Provisions
period, finance leases are recognized at the lower of the fair value of the
Subsequent expenditures on capitalized intangible assets are capitalized
lease’s asset and the present value of the minimum lease payments. the
only when they increase the future economic benefits embodied in the
corresponding liability to the lessor is included in the statement of financial
specific asset to which they relate. All other expenditures are expensed
provision is made when there is objective evidence that the group will
A provision is recognized in the balance sheet when the group has a
position as other non-current liabilities except for first year instalment
as incurred.
be unable to recover balances in full. Balances are written off when the
present obligation as a result of a past event that can be estimated reliably
which is recognized as current liabilities. lease payments are apportioned
probability of recovery is assessed as being remote. the impairment is
and it is probable that the group will be required to settle the obligation.
between finance charges and reduction of the lease obligation so as to
Amortization
recognized in financial items to the extent that it is caused by the insolvency of
If the effect is material, provisions are determined by discounting the
achieve a constant rate of interest of the remaining balance of the liability.
Amortization is charged to the income statement on a straight-line basis
the customer.
expected future cash flows at a market based pre-tax rate that reflects
leased assets are depreciated over the shorter of the lease term and
over the estimated useful lives of intangible assets unless such lives are
current market assessments of the time value of money and, where
their useful lives unless it is reasonably certain that the group will obtain
indefinite. Intangible assets are amortized from the date they are available
Available-for-sale financial assets
appropriate, the liability-specific risks. the unwinding of the discount is
ownership by the end of the lease term
for use.
equity investments classified as available-for-sale are considered to
recognized as a finance cost.
be impaired when there is a significant (more than 20 percent) or
prolonged (more than 6 months) decline in fair value of the investment
Warranties
Intangible assets
Goodwill
Employee benefits
Defined contribution plans
below its cost. Any subsequent increase in value on available-for-sale
A provision for warranties is recognized when the underlying products or
Goodwill that arises on the acquisition of subsidiaries is presented with
obligations for contributions to defined contribution pension plans are
assets is considered to be a revaluation and is recognized in other
services are sold. the provision is based on historical warranty data and a
intangible assets. For the measurement of goodwill at initial recognition,
recognized as an expense in the income statement as incurred.
comprehensive income.
weighting of all possible outcomes against their associated probabilities.
see Business combinations.
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Defined benefit plans
New standards and interpretations not yet adopted
set at one percent of the contract value, but can also be a higher or lower
may result from expected taxable income in the near future, planned
the group’s net obligation in respect of defined benefit pension plans is
the
following new standards, amendments
to standards and
amount following a specific evaluation of the actual circumstances for
transactions or planned tax optimising measures. economic conditions may
calculated separately for each plan by estimating the amount of future
interpretations are effective for annual periods beginning after January 1,
each contract. Both the general one percent provision and the evaluation
change and lead to a different conclusion regarding recoverability, and such
benefit that employees have earned in the current and prior periods;
2015; however the group has not applied the following new or amended
of project specific circumstances are based on experience from earlier
change may affect the results for each future reporting period.
discounting that amount and deducting the fair value of any plan assets.
standards expected to be of relevance in preparing these consolidated
projects. Factors that could affect the estimated warranty cost include
financial statements.
the group’s quality initiatives and project execution model. Reference is
tax authorities in different jurisdictions may challenge calculation of taxes
the calculation of defined benefit obligations is performed annually by
made to note 28 provisions for further information about provisions for
payable from prior periods. Such processes may lead to changes to prior
a qualified actuary using the projected unit credit method. the discount
IFRS 15 Revenue Recognition was issued in May 2014.
warranty expenditures on delivered projects.
periods’ taxable income, resulting in changes to income tax expense in the
rate is the yield at the balance sheet date on government bonds or high-
the standard is effective from January 2017 pending eu
quality corporate bonds with maturities consistent with the terms of the
endorsement. the new standard is expected to significantly
Financial lease
period of change. During the period when tax authorities may challenge
the taxable income, management is required to make estimates of the
obligations.
impact Akastor’s financial statements however the extent to
the determination of whether an arrangement is (or contains) a lease is
probability and size of possible tax adjustments. Such estimates may
which the standard will impact Akastor’s revenue recognition
based on the substance of the arrangement at the inception date. the
change as additional information becomes known. Further details about
Remeasurement of the net defined benefit liability, which comprise
has not yet been assessed.
arrangement is assessed for whether fulfilment of the arrangement is
income taxes are included in note 12 tax.
actuarial gains and losses, the return on plan assets (excluding interest)
and the effect of the asset ceiling (if any, excluding interest), are
recognized immediately in other comprehensive income. the group
determines the net interest expense (income) on the net defined benefit
liability (asset) for the period by applying the discount rate used to
measure the defined benefit obligation at the beginning of the annual
period to the then-net defined benefit liability (asset), taking into account
IFRS 9 Financial instruments becomes mandatory for the
group’s 2018 consolidated financial statements, pending eu
approval. the new standard can change the classification and
measurement of financial assets. the group does not plan to
adopt this standard early and the extent of the impact has
not been determined.
dependent on the use of a specific asset or assets or the arrangement
conveys a right to use the asset or assets, even if that right is not explicitly
Fair value measurement of contingent and deferred consideration
specified in an arrangement.
Contingent and deferred consideration
resulting
from business
combinations, is valued at fair value at the acquisition date as part of the
Property, plant and equipment and intangible assets
business combination. When the deferred and contingent consideration
At every balance sheet date, the group considers whether there are
meets the definition of a derivative and thus, a financial liability, it is
indications of impairment on the book values of long-term assets. If such
subsequently remeasured to fair value at each reporting date. the
any changes in the net defined benefit liability (asset) during the period
Amendment to IAS 28 becomes mandatory for the groups
indications exist, a valuation is performed to assess whether or not the
determination of the fair value is based on discounted cash flows. the
as a result of contributions and benefit payments. net interest expense
2016 consolidated financial statements, pending eu approval.
asset should be written down for impairment. Such valuations will often
key assumptions take into consideration the probability of meeting each
and other expenses related to defined benefit plans are recognized in the
the amendment is dealing with the sale or contribution of
have to be based on estimates of future results for a number of cash
performance target and the discount factor.
income statement.
assets between an investor and its associate or joint venture.
generating units. References are made to note 14 property, plant and
the extent of the impact has not yet been determined.
equipment and note 16 Intangible assets.
Onerous contracts
When the benefits of a plan are changed or when a plan is curtailed, the
resulting change in benefit that relates to past service or the gain or loss
on curtailment is recognized immediately in the income statement. the
group recognizes gains and losses on the settlement of a defined benefit
plan when the settlement occurs.
note 4 | Accounting estimates and judgements
Goodwill
the group has entered into several non-cancellable leases for office space
which may result in surplus lease space. An obligation for the discounted
In accordance with the stated accounting policy, the group tests annually
future payments, net of expected rental income, will in these cases be
whether goodwill has suffered any impairment or more frequently if
provided for. Key assumptions in determining the obligations are primarily
impairment indicators are identified. the recoverable amounts of cash-
related to expected market rental growth, void periods and risk-adjusted
generating units have been determined based on value-in-use calculations.
discount rates.
these calculations require the use of estimates and are consistent with
the market valuation of the group. Further details about goodwill and
Pension benefits
impairment reviews are included in note 16 Intangible assets.
the present value of the pension obligations depends on a number
estimates and judgements are continually reviewed and are based on
met. even though management has extensive experience in assessing the
historical experiences and expectations of future events. the resulting
outcome of such negotiations, uncertainties exist.
Income taxes
of factors determined on the basis of actuarial assumptions. these
assumptions include financial factors such as the discount rate, expected
accounting estimates will, by definition, seldom accurately match actual
the group is subject to income taxes in numerous jurisdictions. Significant
salary growth, inflation and return on assets as well as demographical
results, but are based on the best estimate at the time. estimates and
Remaining project costs depend on productivity factors and the cost of
judgement is required to determine the worldwide provision for income
factors concerning mortality, employee turnover, disability and early
assumptions that have a significant risk of causing material adjustments
inputs. Weather conditions, the performance of subcontractors and others
taxes. there are many transactions and calculations for which the ultimate
retirement. Assumptions about all these factors are based on the
to the carrying amounts of assets and liabilities within the next financial
with an impact on schedules, commodity prices and currency rates can all
tax determination is uncertain during the ordinary course of business.
situation at the time the assessment is made. However, it is reasonably
year are discussed below.
affect cost estimates. experience, systematic use of the project execution
provisions for anticipated tax audit issues are based on estimates of
certain that such factors will change over the very long periods for which
Revenue recognition
risk that estimates may change significantly. A risk contingency is included
model and focus on core competencies reduce, but do not eliminate, the
eventual additional taxes.
pension calculations are made. Any changes in these assumptions will
affect the calculated pension obligations with immediate recognition in
the percentage-of-completion method is used to account for construction
in project cost based on the risk register that is prepared for every project.
Income tax expense is calculated based on reported income in the
other comprehensive income. Further information about the pension
contracts. this method requires estimates of the final revenue and costs
different legal entities. Deferred income tax expense is calculated based on
obligations and the assumptions used are included in note 27 employee
of the contract, as well as measurement of progress achieved to date as a
progress measurement based on costs has an inherent risk related to the
the differences between the assets’ carrying value for financial reporting
benefits - pension.
proportion of the total work to be performed.
cost estimate as described above. In situations where cost is not seen to
purposes and their respective tax basis that are considered temporary in
properly reflect actual progress, alternative measures such as hours or
nature. the total amount of income tax expense and allocation between
Legal claims
the main uncertainty when assessing contract revenue is related to
physical progress are used to achieve more precise revenue recognition.
current and deferred income tax requires management’s interpretation
Given the scope of the group’s worldwide operations, group companies
recoverable amounts from variation orders, claims and incentive payments
the estimation uncertainty during the early stages of a contract is mitigated
of complex tax laws and regulations in the many tax jurisdictions where
are inevitably involved in legal disputes in the course of their activities.
which are recognized when, in the group’s judgement, it is probable that
by a policy of normally not recognizing revenue in excess of costs on large
Akastor operates.
they will result in revenue and are measurable. this assessment is adjusted
lump sum projects before the contract reaches 20 percent completion.
provisions have been made to cover the expected outcome of the disputes
in so far as negative outcomes are likely and reliable estimates can be
by management’s evaluation of liquidated damages to be imposed by
However, management can on a project-by-project basis give approval of
Valuation of deferred tax assets is dependent on management’s assessment
made. However, the final outcome of these cases will always be subject to
customers typically relating to contractual delivery terms. In many projects
earlier recognition if cost estimates are certain, typically in situations of
of future recoverability of the deferred benefit. expected recoverability
uncertainties, and resulting liabilities may exceed recorded provisions.
there are frequent changes in scope of work resulting in a number of
repeat projects, proven technology or proven execution model.
variation orders. normally the contracts with customers include procedures
for presentation of and agreement of variation orders. At any point in time,
Warranties
there will be unapproved variation orders and claims included in the project
A provision is made for expected warranty expenditures. the warranty
revenue where recovery is assessed as probable and other criteria are
period is normally two years. Based on experience, the provision is often
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note 5 | Disposal of subsidiaries and demerger of new Aker solutions
Disposals and dermerger reported as discontinued operations
Disposal of Mooring and Loading systems business
the amounts in the income statement has been re-presented as
on october 30, 2013, Akastor agreed to sell its mooring and loading
discontinued operations. WIS was presented as held for sale in the balance
systems business (MlS) to Cargotec. the unit, known for the pusnes
sheet at December 31, 2013.
brand name, provides mooring equipment, loading and offloading systems,
as well as deck machinery for the global offshore and shipping markets.
Demerger of New Aker Solutions
the division employs about 370 people in europe, Asia and the Americas
on September 26, 2014, the demerger of Aker Solutions was completed
and has its main office in Arendal, norway. the transaction was completed
and on September 29, 2014 Aker Solutions Holding ASA (“new Aker
on January 30, 2014.
Solutions”), a subsidiary of Akastor ASA established for the purposes
of the demerger, was listed on the oslo Stock exchange. the new
the amounts in the income statement has been re-presented as
Aker Solutions includes activities in the following areas of operation:
discontinued operations. MlS was presented as held for sale in the
Subsea, umbilicals, Maintenance, Modifications and operations (MMo)
balance sheet at December 31, 2013.
and engineering.
Disposal of Well-Intervention Services businesses
the new Aker Solutions is presented as discontinued operations and
on november 22, 2013, Akastor agreed to sell its well intervention
held for distribution from July 16, 2014 and the amounts in the income
services businesses (WIS) to eQt. the business provided services that
statement have ben re-presented as discontinued operations. According
optimize flows from oil reservoirs and its main markets were in the uK and
to IFRS 5 no depreciations and amortizations shall be made from the time
norway. the division had about 1,500 employees in europe, Asia, the uS
the held for sale-criteria is met. no gain has been recognized as this is a
and the Middle east. the transaction was completed on January 9, 2014.
transaction under common control accounted for at book values.
the agreement includes an earn-out provision where Akastor will receive
25 percent of any internal rate of return exceeding 12 percent a year on
eQt’s equity investment.
Combined results from discontinued operations
Amounts in NOK million
Revenue
operating expenses
Financial items
Profit before tax
tax expense
Net profit from operating activities
Gain on sale of discontinued operations
tax expense on gain on sale of discontinued operations
Net gain from discontinued operations
Net profit from discontinued operations
profit from discontinued operations attributable to owners of Akastor
profit from continuing operations attributable to owners of Akastor
earnings per share of discontinued operations
Amounts in NOK
Basic earnings per share from discontinued operations
Diluted earnings per share from discontinued operations
Combined cashflow from discontinued operations
Amounts in NOK million
net cash from operating activities
net cash from investing activities
net cash from financing activities
effect on cashflow
Disposal of other subsidiares
Disposal of K2 Hotellbygg AS
2014
24 007
(22 432)
(118)
1 457
(429)
1 028
2 852
-
2 852
3 880
3 867
(1 387)
2014
14.21
14.21
2014
589
4 574
142
5 305
2013
32 403
(30 538)
(21)
1 844
(482)
1 362
-
-
-
1 362
1 351
(238)
2013
4.98
4.97
2013
3070
(2 168)
(110)
792
gain of noK 113 million recognized in other income. the disposal does
on June 4, 2014 Akastor sold the 93 percent shareholding in K2
not represent a separate major line of business, and is not presented as
Hotellbygg AS. the consideration was noK 175 million and resultet in a
discontinued operations.
Cash effect from disposals and demerger
Amounts in NOK million
Consideration received, settled in cash
Cash and cash equivalents disposed of
Proceeds from disposal of subsidiaries, net of cash
Cash demerger new Aker Solutions
Net cash effect
effect of all disposals and demerger on the financial position of Akastor
Amounts in NOK million
Intangible assets
property, plant and equipment
other non-current assets
Current assets
Cash
non-current liabilities
Current liabilities
Net assets and liabilities
note 6 | operating segments
6 204
(256)
5 948
(1 064)
4 884
(6 621)
(5 177)
(325)
(16 833)
(1 320)
5 610
16 942
(7 724)
Basis for segmentation
Measurement of segment performance
Following the split of Aker Solutions, Akastor have five reporting segments
Segment performance
is measured by operating profit before
which are the strategic business units of the group. the strategic business
depreciation, amortization and impairment (eBItDA) and operating profit
units are managed separately and offer different products and services
(eBIt), as included in the internal management reports that are reviewed
due to different market segments and different strategies for their
by the group’s executive Management Group (the chief operating
projects, products and services:
decision maker). Segment profit, together with key financial information
as described below, gives the Ceo relevant information in evaluating
MH Wirth is a supplier of drilling systems and drilling lifecycle
the results of the operating segments and is relevant in evaluating the
services globally. the company offers a full range of drilling
results of the segments relative to other entities operating within these
equipment, drilling riser solutions and related products and
industries. Inter-segment pricing is determined on an arm’s length basis.
services for the drilling market, primarily the offshore sector
AKoFS offshore is a global provider of vessel-based subsea
well construction and intervention services to the oil and gas
industry, covering all phases from conceptual development
to project execution and offshore operations.
the accounting policies of the reportable segments are the same as
described in note 2 Basis of preparation and note 3 Accounting principles,
except for hedge accounting. When contract revenues and contract
costs are denominated in a foreign currency, the subsidiary hedges the
exposure against Corporate treasury and hedge accounting is applied
Fjords processing provides wellstream processing
independently of whether the hedge qualify for hedge accounting in
technology, equipment and expertise to the upstream oil and
accordance with IFRS. the correction of the non-qualifying hedges to
gas industry. the company delivers solutions for separation
secure that the consolidated financial statements are in accordance with
of oil and gas.
Kop Surface products is a global supplier of flow control
equipment to the oil and gas industry. the main products
are valves, wellheads and trees for offshore and land-based
surface production.
IFRS is made as an adjustment at corporate level. this means that the
group’s segment reporting reflect all hedges as qualifying even though
they may not qualify in accordance with IFRS.
Hedge transactions not qualifying for hedge accounting represent an
accounting gain gain of noK 25 million to eBItDA (loss of noK 47 million
Frontica Business Solutions provides a range of corporate
in 2013) and a loss under financial items of noK 103 million (gain of noK
services to companies in the oil services industry.
84 million in 2013). this is recognized as a group adjustment under Real
Further, Akastor owns a portfolio of real estate assets, all in norway. other
investments include mainly 76 percent in Step oiltools, 50 percent of DoF
Information about reportable segments
estate and other holdings.
Deepwater AS, 100 percent in First Geo AS, 7.4 percent of the shares in
the segment information in the tables in this note has been restated for
ezra Holdings ltd and 93 percent of Aker pensjonskasse AS. these are
prior periods.
included in Real estate and other holdings.
PRINT
2014
Amounts in NOK million
Income statement
frontica
Business
solutions
AKOfs
Offshore
fjords
Processing
KOP
surface
Note MHWirth
Real
estate
& other
holdings
elimina-
tions
Total
2013
Amounts in NOK million
Note
MHWirth
Income statement
frontica
Business
solutions
AKOfs
Offshore
fjords
Processing
KOP
surface
Real
estate
&other
holdings
elimina-
tions
Total
total external revenue and other income
10 634
4 868
1 542
2 317
1 119
952
-
21 432
total external revenue and other income
Inter-segment revenue
47
885
-
4
-
23
(960)
-
Inter-segment revenue
9 384
108
4 713
967
906
2
2 001
5
871
2
572
-
18 448
22
(1 106)
-
Total operating revenue and other income
10 681
5 753
1 542
2 322
1 119
975
(960)
21 432
Total operating revenue and other income
9 493
5 680
908
2 007
873
594
(1 106)
18 448
Operating profit (loss) before depreciation,
amortization and impairment
Depreciation and amortization
Impairment
14, 15, 16
14, 15, 16
Operating profit (loss)
Profit (loss) from equity-accounted investees1)
1) NOK 75 million is recognized in Other income.
941
(332)
(83)
526
-
315
(97)
175
(292)
-
(1 001)
218
(1 117)
-
-
52
(26)
-
25
4
156
(260)
(42)
(4)
(133)
(76)
109
(469)
-
(55)
-
-
-
-
-
1 380
(922)
(1 164)
(706)
(51)
Operating profit (loss) before depreciation,
amortization and impairment
Depreciation and amortization
Impairment
Operating profit (loss)
Profit (loss) from equity-accounted investees
14, 15, 16
14, 15, 16
Assets
Current operating assets
non-current operating assets
Operating assets
Liabilities
Current operating liabilities
non-current operating liabilities
Operating liabilities
net current operating assets1)
net capital employed2)
Cash flow
Cash flow from operating activities
Acquisition of property, plant and equipment
payments for capitalized development
order intake (unaudited)
order backlog (unaudited)
employees incl. contracts
7 951
3 738
11 689
1 017
701
1 718
301
4 552
4 852
1 062
635
1 697
637
328
966
442
(206)
11 204
1 861
-
11 815
2 303
(206)
23 019
5 379
1 255
708
89
6 087
1 343
374
167
540
(73)
(237)
374
4 312
297
(167)
(110)
-
8 196
2 620
1 356
(5)
-
6 140
6 186
115
2 573
5 603
(52)
(511)
(233)
6 941
9 566
4 237
1 219
41
1 261
(157)
436
262
29
291
375
674
500
(206)
8 782
208
-
1 242
708
(206)
10 024
(58)
1 595
-
-
2 422
12 995
34
(24)
(37)
113
(22)
(9)
(326)
(128)
-
-
-
-
(101)
(800)
(280)
2 197
1 052
2 097
(1 369)
25 254
1 190
617
659
854
1 658
(324)
21 555
430
-
7 609
Assets
Current operating assets
non-current operating assets
Operating assets
Liabilities
Current operating liabilities
non-current operating liabilities
Operating liabilities
net current operating assets1)
net capital employed2)
Cash flow
Cash flow from operating activities
Acquisition of property, plant and equipment
payments for capitalized development
order intake (unaudited)
order backlog (unaudited)
employees incl. contracts
959
(217)
-
742
3
5 889
3 108
8 997
287
(97)
-
7
(280)
(367)
190
(640)
-
-
75
(24)
1
52
-
88
(26)
-
62
-
(61)
(107)
(2)
(170)
(29)
-
-
-
-
-
1 355
(751)
(368)
235
(25)
910
544
451
4 068
1 128
483
737
302
983
(286)
9 811
2 747
-
11 251
1 454
4 518
1 611
1 038
3 730
(286)
21 062
4 123
1 159
851
79
4 974
1 238
666
205
871
1 767
(249)
(216)
4 024
216
3 647
386
(478)
(251)
180
(114)
-
(242)
(607)
-
9 511
5 766
52
13 004
87
1 722
4 011
1 454
127
1 178
449
24
1 202
(50)
409
(105)
(16)
(26)
1 959
1 255
628
22
471
288
567
96
(44)
(15)
990
570
760
519
138
657
(286)
7 807
-
(286)
1 319
9 127
464
3 073
-
-
2 003
11 935
(455)
(122)
-
-
-
-
(141)
(1 380)
(292)
618
272
502
(884)
18 011
114
17 025
-
7 482
1) Net current operating assets (NCOA) is defined as accounts receivable, accruals, inventories, prepaid expenses including prepaid tax and other
operating current assets less accounts payable, accrued expenses, advances from customers, payable tax and other operating current liabilities.
2) Net capital employed is defined as goodwill, intangible assets, fixed assets, investments, other non-current operating assets, deferred tax assets and
NCOA less pension and deferred tax liabilities as well as other non-current operating liabilities.
Reconciliations of information on reportable segments to IFRS measures
Amounts in NOK million
Assets
total segment assets
Demerger of new Aker Solutions and disposal of subsidiaries
Cash and cash equivalents
Short-term financial assets
long-term receivables
elimination of intra-group assets
Consolidated assets
Liabilities
total segment liabilities
Demerger of new Aker Solutions and disposal of subsidiaries
Short-term interest-bearing liabilities
other long-term liabilities
elimination of intra-group liabilities
Consolidated liabilities
Note
2014
2013
23 225
21 348
-
23 864
1 075
2 345
205
131
511
159
(206)
(286)
24 430
47 941
10 230
-
308
4 720
(206)
9 413
14 123
3 896
7 420
(286)
15 051
34 566
5
23
17
17
5
25
25
PRINT
Other material items
Amounts in NOK million
total segments
Demerger of new Aker Solutions and
disposal of subsidiaries
Consolidated totals
Cash flow from
operating activities
2014
(101)
2013
(141)
589
488
3 219
3 078
Acquisition of property,
plant and equipment
Payments for cap-
italized development
2014
800
502
1 302
2013
1 380
1 271
2 651
2014
2013
280
292
359
639
529
821
Share purchase program for employees
Akastor’s share purchase program in 2014 gave eligible employees the
equal to 25 percent of their salary with a reduction of 25 percent on the
opportunity to purchase shares of up to noK 60 000 with a reduction
share price. In total 27 employees from three countries participated in the
of 25 percent in addition to noK 1 500. to the extent possible under
manager share purchase program.
local law, the shares purchased by each employee were funded by a loan
provided by the local employer company. the loan is repaid by salary
All shares purchased under the programs described above are subject to
deductions over a period of 12 months. In total 567 employees from nine
a three year lock-up period under which the acquired shares may not be
countries participated in the share purchase program.
sold or otherwise disposed of.
Major customers
Geographical information
Management was also invited to take part in a separate manager share
See also note 36 Management remunerations for more details about
Revenue from one customer to all segments represents approximately
Geographical revenue is presented on the basis of the geographical
program allowing eligible managers to purchase shares for an amount
share purchase program for Akastor’s executive management.
noK 4.2 billion (noK 4.3 billion in 2013) of the group’s total revenue.
location of the selling entity. non-current segment assets and capital
Revenue from another customer to the segments MHWirth and Fjords
expenditures are based on the geographical location of the assets. no
processing represents approximately noK 2.1 billion (noK 2.3 billion in
single country has revenues or non-current assets higher than 10 percent
2013) of the group’s total revenue.
of the group except norway.
note 9 | operating leases
Amounts in NOK million
2014
2013
2014
2013
2014
2013
Total non-cancellable operating lease commitments
Operating revenue
and other income
Non-current assets
Capital expenditure
Group as lessee
norway
europe
north America
South America
Asia
Australia
other
Total
13 668
11 523
2 977
1 159
501
2 615
1 078
472
2 054
1 620
878
195
856
284
8 087
1 571
736
751
1 279
50
154
7 740
1 577
604
246
1 167
22
55
462
111
29
252
203
9
14
875
190
34
22
510
5
35
21 432
18 448
12 627
11 411
1 080
1 672
note 7 | operating revenue and other income
Amounts in NOK million
Construction revenue
Service revenue
product revenue
other operating revenue
Rental income from investment property
Total operating revenue
Decrease (increase) in contingent considerations from business combinations
Gain on disposal of subsidiaries
Deferred gain on disposal of real estate
profit (loss) from equity-accounted investees
Accounting gain (loss) on disposals of assets
Total other income
note 8 | salaries, wages and social security costs
Amounts in NOK million
Salaries and wages including holiday allowance
Social security tax/national insurance contribution
pension cost
other employee costs
salaries, wages and social security costs
Note
2014
8 653
10 282
2 024
131
65
2013
7 450
8 916
1 852
139
30
21 155
18 388
103
113
71
4
(14)
277
35
-
-
-
25
60
15
5
18
18
27
4 200
3 928
528
165
211
549
148
194
5 104
4 819
Amounts in NOK million
Contracts due within one year
Contracts running from one to five years
Contracts running for more than five years
Total
1)The amounts in 2013 include discontinued operations
2014
729
2 174
602
3 505
20131)
1 366
3 603
2 761
7 730
Minimum sublease income to be received in the future amounts to noK 4 million (noK 32 million in 2013) and relates mainly to sublease of office buildings.
lease and sublease payments recognized in the income statement
Amounts in NOK million
Minimum lease payments
Contingent rents
Sublease income
Total
1)The amounts in 2013 are presented for continuing operations only
2014
1 141
-
(3)
1 138
20131)
1 284
32
(5)
1 311
the group has operating lease costs for buildings that relate to rentals on a
was acquired in February 2015. Skandi Santos lease contract runs for a
large number of locations worldwide. the leases typically run for a period
period of 5 years, with an option to renew 5 times of 1 year each. the
of 12-15 years, with an option to renew the lease at market conditions.
contract is in its first year of option.
Vessel lease costs relate to operations in AKoFS offshore, and include
the group also has operating lease costs related to It equipment, cars and
AKoFS Seafarer and Skandi Santos for the full year and Aker Wayfarer
inventory. these leases have an average life of 3-5 years with no renewal
for nine months until the vessel was recognized as finance lease, refer to
option included in the contracts.
note 25 Borrowings for more information. the AKoFS Seafarer vessel
Note
2014
2013
Contracts running from one to five years
Group as lessor
Total non-cancellable operating lease income
Amounts in NOK million
Contracts due within one year
Contracts running for more than five years
Total
1)The amounts in 2013 include discontinued operations
2014
799
2 928
1 958
5 685
20131)
655
347
343
1 345
Loans to employees are shown in note 17 Interest-bearing receivables. No guarantees are granted to any employee.
Lease income recognized in the income statement
Seafarer and Aker Wayfarer, investment properties, offices leases to Aker
operating lease income relates mainly to the vessel Skandi Santos, AKoFS
Solutions and to the rental business in Step oiltools.
PRINT
2014
2013
(214)
8
(206)
482
1
(60)
49
-
472
266
(131)
2
(129)
(55)
22
(25)
3
188
133
4
note 10 | other operating expenses
other operating expenses amount to noK 2.2 billion in 2014 (noK
(see note 9 operating leases), travelling expenses, audit fees and other
2.0 billion
in 2013). the expenses
include operating
lease costs
expenses mainly related to premises, electricity and maintenance.
fees to KPMg
Amounts in NOK million
Audit
other assurance services1)
tax services
other non-audit services
Total
Akastor AsA
subsidiaries
2014
2013
2014
2013
2014
4
18
-
1
23
4
-
-
-
4
12
1
1
1
15
9
3
1
2
15
16
19
1
2
38
Total
2013
13
3
1
2
19
note 12 | tax
Income tax expense
Amounts in NOK million
Current tax expense
Current year
Adjustments for prior years
total current tax expense
Deferred tax expense
origination and reversal of temporary differences
Change in tax rate
Write down of tax loss and deferred tax assets
Recognition of previously unrecognized tax losses
1) NOK 18 million relates to services provided related to the demerger of the group. The amount has been recharged to New Aker Solutions.
tax effect on group contributions to companies in Aker Solutions
note 11 | finance income and expenses
Amounts in NOK million
2014
2013
Profit (loss) on foreign currency forward contracts
Interest income on bank deposits measured at amortized cost
net foreign exchange gain
other finance income
finance income
Interest expense on financial liabilities measured at amortized cost
Finance charges under finance leases
Interest expense on financial liabilities measured at fair value
net foreign exchange loss
Impairment on available for sale assets
other financial expenses
finance expenses
Net finance expenses recognized in profit and loss
(372)
43
64
12
119
(341)
(57)
(8)
(9)
(97)
(56)
(568)
(821)
84
37
5
5
47
(526)
-
(13)
(26)
-
(18)
(583)
(452)
See note 33 Financial instruments for information of the finance income and expense generating items.
Foreign currency forward contracts
Some foreign exchange hedge transactions do not qualify for hedge
the loss in 2014 includes noK 269 million related to tender hedges that
accounting under IFRS, primarily because a large number of internal hedge
were stopped (0 in 2013) and a loss of noK 103 million related to hedges
transactions are grouped and netted before external hedge transactions
not qualifying for hedge accounting.
are established. these derivatives are mainly foreign exchange forward
Total deferred tax (expense) income
Total tax (expense) income
Effective tax rate
the table below reconciles the reported income tax expense to the expected income tax expense according to the corporate income tax rate of 27
percent in norway. this is a change from the previous period from 28 percent due to a change in the corporate tax rate in norway
Amounts in NOK million
Profit (loss) before tax, continuing operations
2014
(1 653)
2013
(242)
tax income (expense) using the company's domestic tax rate
446
27.0 %
68
28.0 %
Tax effects of:
permanent differences1)
Prior year adjustments (current tax)
prior year adjustments (deferred tax)
previously unrecognized tax losses used to reduce payable tax
previously unrecognized tax losses used to reduce deferred tax
Deferred tax from write down (or reversal) of tax loss or deferred tax assets
Change in tax rates2)
Differences in tax rates from 27 percent (28 percent in 2013)
effect of functional currency different from currency in tax reporting3)
other
Income tax expense (income), continuing operations
(57)
(3.4 %)
8
-
(3)
49
(60)
1
(21)
(87)
(10)
266
0.5 %
0.0 %
(0.2 %)
3.0 %
(3.6 %)
0.1 %
(1.3 %)
(5.3 %)
(0.6 %)
16.1 %
(22)
2
(13)
5
3
(25)
22
(10)
-
(26)
4
(9.1 %)
0.8 %
(5.4 %)
2.1 %
1.2 %
(10.3 %)
9.1 %
(4.1 %)
0.0 %
(10.7 %)
0.2 %
1) Relates mainly to profit (loss) from equity accounted investees, profit (loss) recognized on various tax-exempted investments and impairment of goodwill.
2) Relates mainly to change in corporate income tax rate from 28 percent to 27 percent in Norway.
3) Relates to AKOFS Offshore which changed functional currency from NOK to USD during 2014
contracts. the corresponding contracts to the derivatives are calculated
the exposure from foreign currency embedded derivatives is economically
Recognized deferred tax assets and liabilities
to have an equal, but opposite effect, and both the derivatives and the
hedged, but cannot qualify for hedge accounting and is therefore included
hedged items are reported as financial results. the net amount therefore
in net foreign exchange gain/loss. Hedge accounting and embedded
reflects the difference in timing between the non-qualifying hedging
derivatives are explained in note 32 Derivative financial instruments.
instrument and the future transaction (economically hedged item).
Amounts in NOK million
property, plant and equipment
pensions
projects under construction
tax loss carry-forwards
Intangible assets
provisions
Derivatives
other
Total before set offs
Set off of tax
Total
Assets
liabilities
Net
2014
2013
85
135
-
448
31
204
12
126
1 041
(827)
214
56
244
-
807
-
282
66
304
1 759
(1 159)
600
2014
(453)
-
2013
(610)
(29)
(552)
(2 041)
-
-
(133)
(322)
-
(163)
(9)
-
(201)
(13)
2014
(368)
135
(552)
448
(102)
204
(151)
117
2013
(554)
215
(2 041)
807
(322)
282
(135)
291
(1 310)
(3 216)
(269)
(1 457)
827
1 159
-
-
(483)
(2 057)
(269)
(1 457)
PRINT
Change in net recognized deferred tax assets and liabilities
Amounts in NOK million
equipment Pensions
Property,
plant and
Projects
under
construction
Tax loss
carry-
forwards
Intangible
assets
Balance as of january 1, 2013
Recognized in profit and loss
Recognized in equity
Additions through business
combinations
Currency translation differences
Reclassification to held for sale1)
Balance as of December 31, 2013
Demerger of new Aker Solutions2)
Disposal of subsidiaries
Recognized in profit and loss
Recognized in equity
Currency translation differences
(522)
(91)
-
2
(1)
58
(554)
114
22
102
(13)
(39)
Balance as of December 31, 2014
(368)
1) Amount represent balances as of December 31, 2013
2) Amount represent balances as of January 1, 2014
223
12
(10)
-
4
(14)
215
(137)
-
(8)
61
4
135
(1 828)
(276)
-
(3)
-
66
(2 041)
573
263
-
(12)
2
(19)
807
1 509
(704)
-
(20)
-
-
(552)
-
297
(1)
49
448
(230)
(19)
-
(80)
(8)
15
(322)
202
-
31
1
(14)
(102)
Tax loss carry-forwards and unrecognized deferred tax assets
Expiry date of unrecognized tax loss carry-forwards
Amounts in NOK million
expiry in 2018
expiry in 2019 and later
Indefinite
Total
Provisions Derivatives Other
Total
306
78
142 (1 258)
1
-
-
(6)
(19)
282
(114)
(96)
163
(61)
-
(106)
-
-
(1)
-
(3)
(13)
(94)
(9)
71
(135)
291
(1 457)
(204)
75
(97)
-
(67)
(38)
-
50
(1)
758
22
472
9
-
87
-
39
14
(126)
(73)
204
(151)
117
(269)
2014
2013
144
138
113
395
149
38
64
251
unrecognized other assets are noK 5 million in 2014 (noK 71 million in 2013).
tax losses are recognized in the balance sheet to the extent that forecasts and realistic expectations about results show that Akastor will be able to use
the tax losses before they expire.
note 13 | earnings per share
Akastor ASA holds 2 976 376 treasury shares at year end 2014 (1 955 611 shares in 2013). treasury shares are not included in the weighted average
number of ordinary or diluted shares.
Amounts in NOK million
profit (loss) attributable to ordinary shares (noK million)
profit (loss) attributable to ordinary shares from continuing operations (noK million)
2014
2 482
(1 398)
Restated
2013
1 114
(248)
Basic earnings per share
the calculation of basic earnings per share is based on the profit (loss) attributable to ordinary shareholders and a weighted average number of ordinary
shares outstanding.
Issued ordinary shares as of January 1
Weighted average number of issued ordinary shares for the year adjusted for treasury shares
Basic earnings per share (NOK)
Basic earnings per share for continuing operations (NOK)
2014
2013
274 000 000 274 000 000
271 830 726
271 162 152
9.13
(5.09)
4.11
(0.87)
Diluted earnings per share
ordinary shares outstanding after adjustment for the effect of rights to
the calculation of diluted earnings per share is based on profit (loss)
receive bonus shares in connection with the employee share purchase
attributable to ordinary shareholders and a weighted average number of
program and all dilutive potential ordinary shares.
Amounts in NOK million
2014
2013
Weighted average number of issued ordinary shares for the year adjusted for treasury shares
271 830 726
271 162 152
expected effect of right to receive bonus shares
Weighted average number of ordinary shares outstanding (diluted) for the year
Diluted earnings per share (NOK)
Diluted earnings per share for continuing operations (NOK)
-
225 076
271 830 726
271 387 228
9.13
(5.09)
4.11
(0.87)
note 14 | Property, plant and equipment
the table below includes discontinued operations until these met the criteria to be classified as held for sale or distribution.
Note
Buildings
and sites
Vessels
Machinery,
equipment, software
under
construction
Total
Amounts in NOK million
Historical cost
Balance as of January 1, 2013
Additions through business combinations
Additions1)
transfer from assets under construction
Disposals and scrapping
Currency translation differences
Reclassification to assets held for sale3)
Balance as of December 31, 2013
Additions1,2)
Financial lease
Reclassification to investment properties
transfer from assets under construction
Disposals and scrapping
Demerger of new Aker Solutions
Currency translation differences
Balance as of December 31, 2014
Accumulated depreciation and impairment
Balance as of January 1, 2013
Depreciation for the year
Impairment
Disposals and scrapping
Currency translation differences
Reclassification to assets held for sale3)
Balance as of December 31, 2013
Depreciation for the year4)
Impairment
Reclassification to investment properties
Disposals and scrapping
Currency translation differences
Demerger of new Aker Solutions
Balance as of December 31, 2014
Book value as of December 31, 2013
Book value as of December 31, 2014
of which financial lease as of December 31, 2013
of which financial lease as of December 31, 2014
1 951
13
260
299
(13)
38
(94)
3 433
426
-
(2)
-
-
2 454
3 857
76
-
(622)
105
(25)
124
974
(476)
(110)
-
61
(15)
26
2
900
-
-
(32)
-
544
5 271
(273)
(264)
(5)
1
-
-
5
(1 138)
5
35
15
5
15
5
6 945
80
963
968
(244)
321
(2 742)
6 291
384
-
(214)
680
(104)
(3 803)
345
3 579
(3 585)
(889)
(4)
156
(144)
1 416
1 674
14 003
17
913
(1 267)
-
46
(43)
1 340
853
-
(62)
(785)
(7)
(529)
144
954
-
-
(361)
-
(19)
-
110
2 562
-
(259)
405
(2 879)
13 942
1 315
900
(898)
-
(168)
(5 470)
1 157
10 778
(4 334)
(1 263)
(370)
218
(178)
1 442
(514)
(541)
(3 050)
(380)
(4 485)
32
-
136
24
(34)
148
(208)
1 940
766
-
-
(281)
(690)
-
53
(270)
-
(1 729)
3 316
3 542
889
(729)
(59)
40
2
(96)
1 982
(1 910)
3 241
1 669
8
4
-
-
-
-
(82)
-
(978)
(949)
176
79
(482)
2 130
(462)
(4 309)
960
492
-
-
9 457
6 469
8
893
1) Includes NOK 25 million of capitalized borrowing costs in 2014, of which NOK 8 million is related to discontinued operations (NOK 7 million in 2013).
The average capitalization rate was 4.4 percent (6 percent in 2013)
2) Includes additions of NOK 509 million related to discontinued operations in 2014 (NOK 1 271 million in 2013), see note 5 for more information
3) Well Intervention Services and Mooring and Loading Services were classified as held for sale in 2013, see note 5 for more information
4) Includes depreciations amd impairment of NOK 234 million related to discontinued operations (NOK 644 million in 2013), see note 5 for more
information
PRINT
Commitments
two-year contract for the vessel, as well as a generally weaker market that
Investment property comprises a number of commercial properties that
and other Holdings. the impairment is based on a revised business case
By the end of December 2014 Akastor has entered into contractual
has created uncertainty about the value of the vessel. In addition, noK 26
are primarily leased out to related parties.
following the sale of MlS in 2014, refer to note 5 for more information
commitments for the acquisition of property, plant and equipment
million was charged as impairment related to Aker Wayfarer vessel based
about the disposal.
amounting to noK 163 million (noK 588 million in 2013), mainly related
on the revised business case reflecting the lower activity in the subsea
Akastor has reclassified property to Investment property following the
to the new MHWirth plant under construction in Brazil. Akastor had also
contraction market.
demerger of the company as these properties were no longer used by the
Disposals
entered into contractual commitments related to two vessels in AKoFS
group but leased out to third parties.
on 21 May 2014 Akastor sold the shareholding in K2 Hotellbygg AS, refer
offshore. Capital expenditure committments related to Aker Wayfarer of
In 2013, AKoFS offshore booked an impairment of noK 361 million related
to note 5 for more information about the disposal.
noK 250 million will be payable during 2015 and 2016. In addition, Akastor
to the investments in the Cat B rig. In 2012 Aker Solutions and Statoil
Depreciation
exercized the purchase option for the vessel AKoFS Seafarer early 2014
agreed that AKoFS offshore would build the so-called Category B (Cat
estimates for useful life, depreciation method and residual values are
Fair value
and the transaction took place in February 2015 for a purchase price of
B) rig and use it to provide Statoil with a range of well-intervention and
reviewed annually. Assets are mainly depreciated on a straight-line basis
Fair value of the investment properties is estimated to noK 968 million. A
uSD 122.5 million, see note 38 Subsequent events.
drilling services for an initial eight years, starting in 2015. the technology
over their expected economic lives:
discounted cash flow model has been used to assess the fair value (level
Depreciation
development needed to build the rig proved to be considerably more
demanding than initially anticipated and the parties mutually agreed on
Buildings
technical installations
30 years
20 years
estimates for useful life, depreciation method and residual values are
June 24, 2013 to terminate the contract with immediate effect.
reviewed annually. Assets are mainly depreciated on a straight-line basis
over their expected economic lives as follows:
Other impairment
Impairment
derived using an exit yield.
In 2014, an impairment charge of noK 16 million was recognized related
3 in valuation hierarchy). the valuation model considers present value of
net cash flows to be generated from the property. the expected net cash
flows are discounted using risk-adjusted discount rates. terminal value is
Machinery, equipment and software
Buildings
Sites
Impairment
3 - 15 years
8 - 30 years
no depreciation
In 2014, an impairment charge of noK 49 million was recognized related
to pusnes eiendom Invest in Arendal, which is included in Real estate
the valuations were performed by an accredited independent valuer.
to investments in engineerium at Fornebu, which is included in Real estate
and other Holdings. the impairment is based on a revised business case
for the use of engineerium following the demerger of the company.
note 16 | intangible assets
Impairment in AKOFS Offshore
Security
the table below includes discontinued operations until these met the criteria to be classified as held for sale or distribution.
In 2014, an impairment charge of noK 664 million was recognized related
See note 25 Borrowings for information about bank loans which are
to investments in the AKoFS Seafarer vessel. the impairment is based on
secured by property, plant and equipment.
a revised business case after the cancelation in June by total in Angola of a
note 15 | investment property
Amounts in NOK million
Historical cost
Balance as of January 1, 2013
Balance as of December 31, 2013
Reclassification from property, plant and equipment
Additions
Disposals of subsidiaries
Balance as of December 31, 2014
Accumulated depreciation and impairment
Balance as of January 1, 2013
Depreciation for the year
Balance as of December 31, 2013
Depreciation for the year
Impairment
Reclassification from property, plant and equipment
Disposals and scrapping
Balance as of December 31, 2014
Book value as of December 31, 2013
Book value as of December 31, 2014
Amounts in NOK million
Rental income derived from investment properties
Direct operating expenses (including repairs and maintenance) generating rental income
Direct operating expenses (including repairs and maintenance) that did not generate rental income
Profit (loss) arising from investment properties
Note
Investment Property
384
384
898
12
(384)
910
(11)
(15)
(26)
(17)
(16)
(176)
32
(203)
358
707
2013
30
(15)
-
15
14
14
2014
65
(52)
(6)
7
Amounts in NOK million
Balance as of January 1, 2013
Capitalized development1)
Acquisition through business combinations
Amortization for the year1)
Impairment1)
Currency translation differences
Reclassification to asset held for sale
Balance as of December 31, 2013
Capitalized development1)
Amortization for the year1)
Impairment1)
Disposal
Currency translation differences
Demerger of new Aker Solutions
Balance as of December 31, 2014
Note
Development
costs
goodwill
Other
5
1 060
804
-
(144)
(12)
70
(54)
1 724
607
(165)
(103)
(2)
42
(1 413)
690
5 553
-
724
-
-
321
(653)
5 945
-
-
(300)
209
(3 832)
2 022
271
-
386
(67)
-
47
(64)
573
33
(70)
-
71
(197)
410
Total
6 884
804
1 110
(211)
(12)
438
(771)
8 242
640
(235)
(403)
(2)
322
(5 442)
3 122
1) Includes capitalized development costs of NOK 360 million (NOK 517 million in 2013) and amortizations and impairment of NOK 75 million (NOK 110
million in 2013) related to discontinued operations, see note 5 for more information.
Research and development costs
developed for other parts of the former Aker Solutions. In addition, an
noK 640 million has been capitalized in 2014 (noK 804 million in 2013)
impairment of capitalized development costs of noK 22 million have
related to development activities. In addition, research and development
been recognized related to the close down of the Mining and Construction
costs of noK 112 million have been expensed during the year because the
business.
criteria for capitalization was not met (noK 275 million in 2013). Amounts
include new Aker Solutions until demerger.
Impairment in AKOFS Offshore
Amortization
In 2014, impairments of noK 297 million related to goodwill and noK 14
million related to capitalized development costs have been recognized.
Intangible assets with finite useful lives are amortized over the expected
See more information about the goodwill impairment below.
economic life, ranging between 5-10 years.
Impairment
Impairment in MHWirth
Impairment test of goodwill
Goodwill originates from a number of acquisitions. Management monitors
goodwill impairment at the portfolio company level (segment) which is
In 2014, an impairment charge of noK 61 million has been recognized,
also considered to be the cash-generating unit (CGu) due to the level of
mainly related to certain technologies in MHWirth that have been
integration within the CGu’s.
PRINT
Allocation of goodwill by portfolio companies
Amounts in NOK million
MHWirth
Frontica
AKoFS offshore
Fjords processing
Kop Surface products
Step oiltools1)
First Geo1)
new Aker Solutions
Total
1) This portfolio company is aggregated into the reporting segment Real Estate and Other Holdings.
2014
1 207
179
145
313
98
60
20
-
2 022
2013
1 097
156
435
298
103
60
20
3 776
5 945
Impairment testing for cash-generating units containing goodwill
on the future cash flow, budgets and strategic forecasts for the periods
Recoverable amounts are based on value in use calculations. For all CGu’s
2015-2019 and an annual growth of 2 percent for subsequent periods. For
except AKoFS offshore the calculations use cash flow projections based
AKoFS offshore, see below.
Weighted Average Cost of Capital (WACC) assumptions for impairment testing
MHWirth
Frontica
AKoFS offshore1)
Fjords processing
Kop Surface products
Step oiltools
Post tax
WACC
Pre tax
WACC
8.2 %
6.1 %
7.1 %
8.1 %
9.3 %
8.2 %
9.4 %
7.4 %
7.1 %
8.7 %
10.1 %
9.2 %
1) Pre tax WACC and post tax WACC for AKOFS Offshore are equal due to the assumption that both Skandi Aker and Skandi Santos will enter the
tonnage tax regime in Norway in the near future.
the risk free interest rate used in the discount rate is based on the 10 year
goodwill has been re-tested for impairment as of 31 December 2014. the
state treasury bond rate of 1.61 percent at the time of the impairment
base case is showing that the estimated recoverable amount exceeds its
testing. optimal debt leverage was estimated for each portfolio company.
carrying amount by approximately noK 380 million.
For all portfolio companies except AKoFS offshore, the recoverable
the values assigned to key assumptions represent management’s
amounts are higher than the carrying amounts and consequently the
assessments of future trends in the business and are based on historical
analysis indicates that no impairment is required. the key assumptions
data from both external and internal sources. the cash flow projections
used in the calculation of recoverable amounts are discount rates, terminal
reflect vessel-specific rates as reflected in charter-agreements and, for
value growth rates and eBItDA-margins. Reasonable changes to the key
periods when the vessels are operating in the spot market, rates achieved in
assumptions do not give grounds to impairment for any of these portfolio
most recent charter agreements.
companies.
AKOFS Offshore
the value-in-use analysis for AKoFS Seafarer has been made with different
probability weighted scenarios covering the variation in day rates and
In Q2 2014, an impairment loss of noK 301 million was recognized. the
utilization. Management has identified that reasonable possible changes in
impairment is a result of the revised business case for AKoFS Seafarer
WACC as well as utilization and day rates related to AKoFS Seafarer vessel
following the cancellation by total in Angola of a two-year contract as well
could cause the carrying amount to exceed the recoverable amount. the
as the market outlook in general for the two vessels AKoFS Seafarer and
recoverable amount will be lower than book value if WACC is increased
note 17 | interest-bearing receivables
Current interest-bearing receivables
Amounts in NOK million
portfolio of bonds and certificates in Aker Insurance AS
Convertible loan eZRA Holdings ltd
Receivables Aker Solutions
other1)
Total
2014
91
-
63
51
205
2013
119
347
45
511
1) Includes loans to employees share purchase program NOK 2 million in 2014 (NOK 3 million in 2013). Average interest rate for loans to employees
was 2.75 percent in 2014.
the convertible loan to eZRA Holdings ltd was repaid in March 2014.
Aker Insurance AS which is classified as financial assets at fair value through
the current interest-bearing receivables are classified as financial assets at
profit and loss.
amortized cost. the only exception is portfolio of bonds and certificates in
Non-current interest-bearing receivables
Amounts in NOK million
other receivable eZRA Holdings ltd
loans to Aker DoF Deepwater AS
other
Total
2014
2013
46
82
3
131
76
83
-
159
See note 31 Financial risk management and exposures for information regarding credit risk management in the group.
note 18 | equity-accounted investees
equity-accounted investees include associated companies and joint
associated companies and joint ventures and any guarantees provided on
arrangements. Such investments are defined as related parties to Akastor.
behalf of or from such entities.
See note 35 Related parties for overview of transactions and balances with
2014
Amounts in NOK million
Business office
percentage of voting rights
percentage held
Share of profit (loss) reported in other income
Share of profit (loss) reported in Financial items
Impairment
Book value
2013
Amounts in NOK million
Business office
percentage of voting rights
percentage held
DOf Deepwater As1) Kolon fjords Processing Co ltd 1,2 )
Other companies 5)
Total
Storebø, norway
Gyeonggi, South Korea
50%
50%
-
(45)
(110)
231
50%
50%
4
-
-
15
-
39
(10)
18
4
(6)
(120)
264
DOf Deepwater As1)
Hinna Park Invest As 3,4)
Other companies
Total
Storebø, norway
oslo, norway
50%
50%
(31)
386
25%
25%
2
25
4
29
(25)
440
Aker Wayfarer.
by more than 1.4%. Sensitivities in day rates and utilization are both short
Share of profit (loss) reported in Financial items
term (in the spot market) and long term (in the lWI market). In addition,
Book value
Following the impairment loss recognized in Q2 2014, the recoverable
timing for when the vessel enters the lWI market is critical (assumed 2017
amount was equal to the carrying amount. therefore, any adverse
in base case for calculation of recoverable amount).
movement in a key assumption would lead to further impairment. the
1) Joint venture
2) New joint venture agreement was entered into in 2014 together with two Korean companies.
3) Associated company
4) Sold in 2014
5) Gain on disposal and share of net profit from investments in K2 Eiendom AS and Hinna Park Invest AS totals NOK 38 million, see also description below
PRINT
summary of financial information for equity accounted investees (100 percent basis)
the ezra share price had a significant reduction in 2014 resulting in an
All other available-for-sale investments do not have an active market,
impairment loss of noK 97 million recognized in financial items and noK
and are measured at cost as this is considered to be the best estimate of
2014
Amounts in NOK million
Current assets
non-current assets
Current liabilities
non-current liabilities
Net assets
Akastor's share of net assets
fair value uplift on acquisition / goodwill
Akastor's carrying amount of the investment
Revenue
operating expenses
net financial items
profit (loss) before tax
Income tax expense
Profit (loss) for the year
Total comprehensive income for the year
2013
Amounts in NOK million
Current assets
non-current assets
Current liabilities
non-current liabilities
Net assets
Akastor's share of net assets
fair value uplift on acquisition / elimination of internal gain
Akastor's carrying amount of the investment
Revenue
operating expenses
net financial items
profit (loss) before tax
Income tax expense
Profit (loss) for the year
Total comprehensive income for the year
DOf Deepwater As
Kolon fjords Processing Co ltd
185 million is changed through other comprehensive income. Bonus
fair value.
shares of noK 8 million was distributed as dividends from the company.
151
1 697
(242)
(1 157)
449
225
6
231
246
(152)
(181)
(87)
(2)
(89)
(89)
110
5
(88)
(4)
23
12
3
15
173
(165)
10
18
(14)
4
4
DOf Deepwater As
Hinna Park Invest As
107
1 738
(133)
(1 175)
537
269
118
269
230
(152)
(118)
(40)
-
(40)
(40)
29
1 263
-
(1 053)
239
60
(35)
25
98
(26)
(58)
14
(7)
7
7
note 20 | Construction contracts
Amounts in NOK million
Construction revenue in the period
Amounts due from customers for contract work
Amounts due to customers for contract work
Construction contracts in progress, net position
Advances are presented as part of Amounts due to customers for contract work.
Construction contracts in progress at the end of the reporting period
Amounts in NOK million
Aggregate amount of cost incurred and recognized profits (less losses) to date
Advances from customers
Retentions
note 21 | inventories
Amounts in NOK million
Stock of raw materials
Goods under production
Finished goods
Total
Inventories carried at net realizable value
Write-down of inventories in the period
Reversal of write-down of inventories in the period
Note
2014
7
22
29
8 653
2 325
(2 170)
155
2013
7 450
4 537
(4 835)
(298)
2014
2013
3 525
43 107
591
-
4 113
113
2014
977
234
574
1 785
1 273
89
27
Restated1)
2013
1 300
414
705
2 419
882
129
-
1) Certain amounts shown here do not correspond to the 2013 financial statements and reflect adjustments made, refer to Note 37.
Hinna Park Invest AS and K2 Eiendom AS
the unrecognized gain amounts to noK 37 million in 2014 (noK
Gain from sale of real estate from Aker Solutions to Hinna park Invest AS
108 million in 2013) and has been deducted from book value of the
and K2 eiendom AS was recognized in 2012 (see note 10 other income).
investments. For K2 eiendom AS, the deferred gain exceeds book value
note 22 | trade and other receivables
However, 25 percent of the total gain, representing Akastor ownership in
of the investment and has been reported in trade and other payables by
these companies, could not be recognized in the income statement until
noK 6 million (noK 11 million in 2013).
remaining shareholdings have been sold. In 2014 the shares held in Hinna
park Invest AS were sold, as well as 8 percentage points of the shares held
Guarantees on behalf of equity accounted investees
in K2 eiendom AS, reducing ownership from 25 percent to 17 percent.
Akastor ASA has issued financial guarantees in favor of financial
the sale resulted in recognition of noK 71 million in deferred gain in
institutions related to financing of the five vessels in DoF Deepwater AS.
other income.
liability is capped at 50 percent of drawn amount. the guarantee was
noK 582 million as of December 31, 2014 (noK 560 million in 2013).
note 19 | other investments
Amounts in NOK million
ezra Holdings ltd
Aker pensjonskasse
other equity securities
Available-for-sale investments
Investments at fair value through profit and loss
Total other investments
Note
2014
34, 35
222
120
5
347
-
347
2013
480
120
18
618
27
645
Amounts in NOK million
trade receivables1)
less provision for impairment of receivables
Trade receivables, net
Advances to suppliers
Amount due to from customers for construction work
prepaid expenses
other receivables
Total
Note
20
2014
3 079
(81)
2 998
226
2 325
371
1 258
7 178
2013
6 464
(100)
6 364
621
4 537
513
5 551
17 586
1) Trade receivables are financial instruments and an impairment loss of NOK 53 million (NOK 47 million in 2013, of which NOK 32 million related to
discontinued operations) was recognized in operating expenses.
Book value of trade and other receivables is approximately equal to fair value.
PRINT
Aging of trade receivables
Amounts in NOK million
not overdue
past due 0-30 days
past due 31-90 days
past due 91 days to one year
past due more than one year
Total
2014
1 804
509
348
380
38
2013
4 497
942
515
421
89
Dividends
paid dividend per share (noK)
total dividend paid (noK million)
ordinary dividend per share proposed by the Board of Directors (noK)1)
1) The board of directors have proposed no dividend for 2014
2014
4.10
1 115
-
2013
4.00
1 082
4.10
3 079
6 464
Hedging reserve
Currency translation reserve
the hedging reserve relates to cash flow hedges of future revenues and
the currency translation reserve includes exchange differences arising
As at December 31, 2014, trade receivables of an initial value of noK 81 million (noK 100 million in 2013) were impaired and fully provided for. See below
expenses against exchange rate fluctuations. the income statement
from the translation of the net investment in foreign operations,
for the movements in the provision for impairment of receivables.
Amounts in NOK million
Balance as of January 1
Demerger of new Aker Solutions
new provisions
utilized
unused amounts reversed
Currency translation differences
Balance as of December 31
note 23 | Cash and cash equivalents
Amounts in NOK million
Restricted cash
Cash pool
Interest-bearing deposits
Total
2014
100
(35)
53
(29)
(17)
9
81
2014
39
499
537
1 075
2013
115
-
47
(16)
(50)
4
100
2013
34
1 023
1 288
2 345
Additional undrawn committed non-current bank revolving credit facilities amounted to noK 1 billion, that together with cash and cash equivalents gives
a total liquidity buffer of noK 2.1 billion.
note 24 | Capital and reserves
Share capital
Share buy-back
Akastor ASA has one class of shares, ordinary shares, with equal rights
At the 2014 Annual General Meeting authorisation was given to repurchase
for all shares. the holders of ordinary shares are entitled to receive
up to 27.4 million shares, representing 10 percent of the share capital of
dividends and are entitled to one vote per share at General Meetings.
Akastor ASA. Akastor ASA increased the shareholdings with 1 020 765
total outstanding shares are 274 000 000 at par value noK 0.592 per
treasury shares in 2014 and as of 31 December 2014 Akastor ASA holds 2 976
share (noK 1.66 in 2013). All issued shares are fully paid.
376 treasury shares representing 1.09 percent of total outstanding shares.
summary of purchase and sale of treasury shares
Amounts in NOK million
treasury shares as of January 1, 2013
purchase
Sale
Treasury shares as of December 31, 2013
purchase
Sale
Treasury shares as of December 31, 2014
Number of shares
Consideration
3 490 985
589 069
(2 124 443)
1 955 611
2 705 000
(1 684 235)
2 976 376
606
50
(183)
473
60
(33)
500
the group purchases treasury shares to meet the obligation under the employee share purchase program.
effects of such instruments are recognized in accordance with the
and foreign exchange gain or loss on loans defined as hedges or net
progress of the underlying construction contract as part of revenues or
investments, see note 11 Financial income and expenses.
expenses as appropriate. the hedging reserve represents the value of such
hedging instruments that are not yet recognized in the income statement.
net investments have been hedged in 2014 with a loss of noK 38 million
the underlying nature of a hedge is that a positive value on a hedging
(loss of noK 9 million in 2013). Accumulated gain on net investment
instrument exists to cover a negative value on the hedged position, see
hedges from 2005 is negative noK 20 million (decreased from noK 18 in
note 11 Financial income and expenses and note 32 Derivative financial
2013). the net investment hedge as of 31 December 2014 relates mainly
instruments.
to investments in the united States and Cyprus.
Fair value reserve
the fair value reserve comprises the cumulative net change in the fair
value of available-for-sale financial assets until the investments are
derecognized or impaired.
note 25 | borrowings
Contractual terms of group’s interest-bearing loans and borrowings which
Financial risk management and exposures. For more information related
are measured at amortized cost. For more information about the group’s
to the financial lease see note 35.
exposure to interest rates, foreign currency and liquidity risk, see note 31
2014
Amounts in million
Currency
Nominal
currency
value
Carrying
amount
(NOK)
Interest
rate1)
fixed
interest
margin
Interest
coupon
Maturity
date
Interest terms
Revolving credit facility
(noK 2 000 million)
Total credit facility
term loan
Term loan
noK
1 000
987
987
1.48%
1.60%
3.08% 03.06.19
IBoR + Margin2)
noK
2 500
2 485
1.48%
1.40%
2.88% 03.06.17
IBoR 3M +
variable margin
Brazilian Development Bank eXIM loan
BRl
25
Brazilian Development Bank eXIM loans
finance lease obligation
Total other loans
Total borrowings
Current borrowings
non-current borrowings
Total
6.10%
-
6.10%
Fixed, quarterly
2 485
70
70
1 376
110
5 028
308
4 720
5 028
1) The interest costs are calculated using either the last fixing rate known by year end (plus applicable margin) or the contractual fixed rate (when fixed rate debt).
2) The margin applicable to the facility is decided by a price grid based on the gearing ratio. Commitment fee is 40 percent of the margin.
3) The book value is calculated by reducing the nominal value of NOK 4 400 million by total issue costs related to the new financing of negative NOK
23 million. Accrued interest and issue costs related to the bonds are included by NOK 116 million. The book value of the bond with notional value of
NOK 1 913 million also includes the mark-to-market value of a fair value hedging interest rate swap of NOK 7 million.
PRINT
2013
Amounts in million
Currency
Nominal
currency value
Carrying
amount (NOK)
Interest
rate1)
fixed interest
margin
Interest
coupon
Maturity
date
Interest terms
ISIn no 001050461.6
ISIn no 001050460.8
ISIn no 0010647431
ISIn no 0010661051
Total bonds3)
Revolving credit facility
(noK 6 000 million)
Total credit facility
term loan
term loan
term loan
Term loan
Brazilian Development
Bank eXIM loan - Itau
Brazilian Development
Bank eXIM loan - HSBC
Brazilian Development
Bank eXIM loan - Itau
Brazilian Development
Bank eXIM loan - HSBC
Brazilian Development
Bank eXIM loans
total other loans
Total borrowings
Current borrowings
non-current borrowings
Total
noK
noK
noK
noK
1 913
187
1 500
1 000
1 812
8,70%
2.00% 10,70% 26/06/14
Fixed, annual
187
1 498
1.65%
1.67%
6.75% 8.40% 26/06/14
Floating, 3M+fix margin
4.25%
5.92% 06/06/17
Floating, 3M+fix margin
1 002
1.68%
4.20%
5.88% 09/10/19
Floating, 3M+fix margin
4 499
noK
1 650
1 636
3.14%
0.00%
3.14% 01/06/16
IBoR + Margin2)
1 636
noK
euR
euR
BRl
BRl
BRl
BRl
750
270
130
145
50
155
50
755
1.70%
2.00%
3.70% 01/10/14
nIBoR 3M+fix margin
0.29%
0.22%
2 257
1 092
4 104
1.85%
1.50%
2.14%
13/11/15 IBoR 3M+variable margin
1.72% 13/05/14 IBoR 3M+variable margin
378
5.50%
0.00%
5.50% 23/07/16
Fixed, quarterly
131
5.50%
0.00%
5.50% 15/08/16
Fixed, quarterly
404
8.00%
0.00% 8.00% 15/08/15
Fixed, quarterly
131
8.00%
0.00% 8.00% 15/07/15
Fixed, quarterly
1 044
33
11 316
3 896
7 420
11 316
1) The interest costs are calculated using either the last fixing rate known by year end (plus applicable margin) or the contractual fixed rate (when fixed rate debt).
2) The margin applicable to the facility is decided by a price grid based on the gearing ratio. Commitment fee is 40 percent of the margin.
3) The book value is calculated by reducing the nominal value of NOK 4 400 million by total issue costs related to the new financing of negative NOK 23
million. Accrued interest and issue costs related to the bonds are included by NOK 116 million . The book value of the bond with notional value of NOK
1 913 million also includes the mark-to-market value of a fair value hedging interest rate swap of NOK 7 million.
Amounts in NOK million
less than one year
Between one and five years
More than five years
Total
Financial liabilities and the period in which they mature
2014
Present value of
minimum lease payments
8
345
716
1 068
Interest
205
744
827
1 775
finance minimum
lease payment
213
1 089
1 542
2 843
Amounts in NOK million
Revolving credit facility (noK 2 000 million)2)
term loan
Brazilian Development Bank eXIM loans
other loans
Finance lease obligation
Total other loans
Total borrowings
2013
Amounts in NOK million
ISIn no 001050461.6
ISIn no 001050460.8
ISIn no 0010647431
ISIn no 0010661051
Total
Revolving credit facility (noK 6 000 million)2)
term loan
Brazilian Development Bank eXIM loans
other loans
Total other loans
Total borrowings
Carrying
amount
987
2 485
70
110
1 376
5 028
5 028
Total
undiscounted
cash flow1)
6 months
and less
6-12
months
1-2
years 2-5 years
More than
5 years
1 139
2 680
86
110
2 843
6 858
6 858
1 015
36
2
33
106
1 193
1 193
15
36
2
77
106
237
237
31
72
4
-
251
358
358
77
2 536
78
-
838
3 529
3 529
-
-
-
-
1 542
1 542
1 542
Carrying
amount
Total
undiscounted
cash flow1)
6 months
and less
6-12
months
1-2
years 2-5 years
More than
5 years
1 812
187
1 498
1 002
4 499
1 636
4 104
1 044
33
6 817
11 316
1 805
187
1 811
1 338
5 141
1 780
4 205
1 176
33
7 194
12 335
1 805
187
45
30
2 067
1 676
1 133
48
4
2 861
4 928
-
-
44
29
73
-
-
89
59
-
-
1 633
176
148
1 809
-
-
-
1 044
1 044
26
52
774
2 298
35
3
577
6
838
2 933
26
-
516
15
557
-
-
-
5
5
911
3 081
2 366
1 049
1) The interest costs are calculated using either the last fixing rate known by year end (plus applicable margin) or the contractual fixed rate (when fixed rate debt).
2) NOK 1 000 million (NOK 1 650 million in 2013) corresponds to the repayment of the drawn portion of the available NOK 2 000 million (NOK 6 000 millon in
2013) credit facility.
Bank debt (Norway)
Finance lease obligation
Mortgages and guarantee liabilities
All facilities are provided by a bank syndicate consisting of high quality
A financial lease obligation was recognized in 2014 following the re-
the group has noK 20 million in mortgage liabilities, which is secured by pledges on property, plant and equipment with book values of noK 39 million.
nordic and international banks. the terms and conditions include
negotiation of the bareboat charter contract with Aker Ship lease 1 AS.
restrictions which are customary for this kind of facility, including inter alia
A lease obligation of noK 1 500 million was recognized in the accounts,
negative pledge provisions and restrictions on acquisitions, disposals and
of which noK 210 million presented as current liability representing the
mergers. there are also certain changes of control provisions included.
yearly lease payment. the non-current part of the lease obligation has
the facility includes no dividend restrictions and is unsecured.
been reduced by the remaining prepayment made in 2009 (reclassified
the financial covenants are based on two sets of key financial ratios; a
purchase option on three different dates. Refer to note 35 for more
from non-current operating assets). the lease agreement includes
gearing ratio based on net debt/equity and an interest coverage ratio
information about this agreement.
based on eBItDA/net finance costs. the financial covenants are tested
on a quarterly basis. the margin applicable to the facility is based on a
the finance lease liability is payable as follows as of December 31, 2014.
price grid determined by the gearing ratio and level of utilization. See
note 31 Capital management and exposures for more information
regarding capital risk in the group.
note 26 | other non-current liabilities
Amounts in NOK million
Contingent considerations from acquistions of subsidiaries in prior periods
Deferred considerations from acquistions of subsidiaries in prior periods
provision for onerous office lease obligations
other liabilities
Total
2014
44
-
157
84
285
2013
142
56
-
158
356
Deferred and contingent considerations
Provision for onerous office leases
Akastor has acquired subsidiaries and non-controlling interests where
provision for onerous leases represents expectations related to future
final consideration is deferred and can depend to a certain degree on
sub-lease revenues to be generated from office lease obligations.
future earnings in the acquired companies. the deferred and contingent
considerations reported in other non-current liabilities as of December 31,
2014 relates mainly to the acquisition of Step oiltools (2011).
PRINT
note 27 | employee benefits - pension
Akastor’s pension costs represent the future pension entitlement
Compensation plan
earned by employees in the financial year. In a defined contribution
to ensure that the employees were treated fairly on the change over
plan the company is responsible for paying an agreed contribution to
to the new plan the company has introduced a compensation plan. the
the employee’s pension assets. In such a plan this annual contribution is
basis for deciding the compensation amount is the difference between
also the cost. In a defined benefit plan it is the company’s responsibility
calculated pension capital in the defined benefit plan and the value of the
to provide a certain pension. the measurement of the cost and the
defined benefit plan at the age of 67 years. the compensation amount will
pension liability for such arrangements is subject to actuarial valuations.
be adjusted annually in accordance with the adjustment of the employees’
Akastor has over a long time period gradually moved from defined benefit
pensionable income, and accrued interest according to market interest. If
arrangements to defined contribution plans. Consequently, the impact of
the employee leaves the company voluntarily before the age of 67 years,
the remaining defined benefit plans is gradually reduced.
the compensation amount will be reduced.
Pension plans in Norway
AFP - early retirement arrangement
the main pension arrangement in norway is a general pension plan
AFp is an early retirement arrangement organized by norwegian
organized by the norwegian State. this arrangement provides the main
employers, the main labor union organization in norway (lo) and the
general pension entitlement of all norwegians. All pension arrangements
norwegian State. the “old AFp” arrangement was established to provide
by employers, consequently represent
limited additional pension
pension between the age of 62 to 67 for employees who retired before
entitlements.
the general retirement age of 67. In a recent pension reform individual
employees are given a choice of retirement age, but with lower pension
norwegian employers are obliged to provide an employment pension
with earlier retirement. estimated remaining employer contributions to
plan, which can be organized as a defined benefit plan or as a defined
cover the plan deficit have been provided for.
contribution plan. the norwegian companies in Akastor have closed
the earlier defined benefit plans in 2008 and are now providing defined
the AFp scheme which was newly established in 2011 is not considered
contribution plans for all of their employees under 61 years of age.
to be a defined benefit compensation scheme for early retirement, but a
Movement in net defined benefit liability
Amounts in NOK million
Balance as of January
Demerger of new Aker Solutions and reclassifications1)
Included in profit or loss
Current service and administration cost
Interest cost (income)
Included in OCI - Remeasurements (loss) gain:
Remeasurement loss (gain) arising from demographic assumptions
Remeasurement loss (gain) arising from financial assumptions
Remeasurement loss (gain) arising from experience adjustments
Other
Contributions paid into the plan
Benefits paid by the plan
other movements
Balance as of December 31
Represented by:
Gross defined benefit liability
Fair value of pension assets
Balance as of December 31
Defined contribution plan
lifelong contribution plan. the scheme is classified as a multi-employer
benefit scheme. Akastor has taken the position that the information
1) Amount represent balance as of January 1, 2014
the annual contribution expensed for the new defined contribution plan
available at the date of the financial statements is not sufficient to reliably
Plan assets
was noK 125 million (noK 88 million in 2013). the estimated contributions
measure the allocation of pension cost and net pension liability/asset in
expected to be paid in 2015 is noK 132 million.
accordance with a cost/benefit approach. Akastor has therefore elected
Defined benefit plan
to treat the scheme as a defined contribution plan in which the annual
paid premiums to the AFp scheme are expensed in the income statement
employees who were 58 years or older in 2008, when the change took
as they are incurred. the total liability is not recognized. Based on the
place, are still in the defined benefit plan. this is a funded plan and represent
current financing model for AFp, the annual premiums are expected to
most of the funded pension liability reported in the tables below.
increase. When or if sufficient and reliable data is available and a liability
can be reliably measured, the recognized liability could be significant.
the estimated contributions expected to be paid to the norwegian plan
during 2015 are noK 16 million.
Pension plans outside Norway
pensions plans outside norway are predominately defined contribution plans.
Total pension cost continuing operations
Amounts in NOK million
Defined benefit plans
Defined contribution plans
Total
Net employee defined benefit liability
Amounts in NOK million
Defined benefit plans norway
Defined benefit plans Germany
Defined benefit plans other countries
Total
Note
8
2014
33
132
165
2014
345
105
23
473
2013
33
115
148
2013
647
84
17
748
Amounts in NOK million
Equity Securities
oil & Gas
Maritime transportation
energy Infrastructure
oilfield Services & equipment
telecom Services
Bonds
Government
Finance
private and Government enterprise
Municipalities
Derivatives
FX Forwards
Fund/private equity
FeRD private equity fund
Ambolt
AAM Absolute Return Fund
DnB tMt
Total plan assets at fair value Norwegian plan
Plan assets outside Norway at fair value
equity securities
Debt securitites
Plan assets outside Norway at fair value
Total plan assets at fair value
Note
5
2014
748
(341)
33
15
48
14
34
21
69
(27)
(23)
(1)
(51)
473
809
(336)
473
2013
805
(50)
125
26
151
71
(40)
(59)
(28)
(99)
(43)
12
(130)
748
2 402
(1 654)
748
2014
2013
3
-
-
2
1
6
7
19
44
141
212
-
-
-
1
2
2
5
36
4
8
8
14
70
29
32
353
1 106
1 520
(1)
(1)
4
10
15
14
43
223
1 632
40
73
113
336
8
14
22
1 654
PRINT
the equity portfolio is invested globally. the fair value of the equities is
the contract at the reporting date taking into account the current market
based on their quoted prices at the reporting date without any deduction
conditions. Derivatives are only used for hedging purposes.
for estimated future selling cost.
the investment in bonds are done in the norwegian market and most of
securities and where the fund value is based on quoted prices.
the bonds are not listed on any exchange. the market value as at year end
is based on official prices provided by the norwegian Securities Dealers
Defined benefit obligation - actuarial assumptions
Association. the Bond investment have on average a high credit rating. Most
the group’s most significant defined benefit plans are in norway, Germany
of the investments is in norwegian municipalities with a credit rating of AA.
and uSA.
the investment in fund/private equity is mainly funds that invests in listed
the fair value of derivatives that are not exchange traded are estimated
the following were the principal actuarial assumptions at the reporting
at the amount that the company would receive or to pay to terminate
date for the plans in these countries
Discount rate
Asset return
Salary progression
pension indexation
Norway
germany
2014
2.50%
2.50%
3.25%
2.50%
2013
4.10%
4.10%
3.75%
1.90%
2014
4.54%
4.54%
N/A
1.75%
2013
4.89%
4.89%
n/A
1.75%
usA
2014
3.51%
3.51%
N/A
N/A
2013
4.25%
4.25%
n/A
n/A
Mortality table
K2013
K2013
RT 2005 g Rt 2005 G
RP-2014 Total Dataset
with scale MP-2014
2014 IRS Static
Mortality table
note 28 | Provisions
Amounts in NOK million
Balance as of January 1, 2014
Demerger of new Aker Solutions1)
provisions made during the year
provisions used during the year
provisions reversed during the year
Currency translation differences
Balance as of December 31, 2014
expected timing of payment
Within the next twelve months
After the next twelve months
Total
1) Amount represent balance as of January 1, 2014
Warranties
Other
782
(517)
54
(59)
(34)
16
242
122
120
242
90
(38)
152
(3)
(51)
4
153
67
87
153
Total
872
(555)
206
(62)
(85)
20
395
189
206
395
Warranties
Other
the provision for warranties relates mainly to the possibility that Akastor,
other includes noK 62 million representing current part of onerous lease
based on contractual agreements, needs to perform guarantee work
provisions. non current part of onerous lease provisions is recognized in
related to products and services delivered to customers. See note 4
other long term liabilities, see note 26.
Accounting estimates and judgments for further description.
the information below relates only to norwegian plans as these represent
percent as the benefit obligation in Akastor consist mainly of pensioners
the majority of the plans.
and employees over 60 years. It should also be expected that fluctuations
Amounts in NOK million
in the discount rate would also lead to fluctuations in the pension
trade creditors1)
note 29 | trade and other payables
the discount rate and other assumptions in 2014 and 2013 are based on
indexations. the total effect of fluctuations in economic assumptions are
the norwegian high quality corporate bond rate and recommendations
consequently unlikely to be very significant.
from the norwegian Accounting Standards Board.
Generally, a one percent increase in the discount rate will lead to
statistics and mortality tables. the current life expectancy underlying the
approximately 10-15 percent decrease in service cost/projected benefit
values of the defined benefit obligation at the reporting date are shown
obligation. this is lower than an expected effect of approximately 20
below.
Assumptions regarding future mortality have been based on published
Years
life expectancy of male pensioners
life expectancy of female pensioners
Sensitivity analysis
2014
21.3
24.4
2013
20.4
23.2
Amount due to customers for contract work and advances
Accrued operating and financial costs
other current liabilities2)
Total
Note
20
2014
1 506
2 170
1 951
802
6 429
2013
2 873
4 835
6 712
2 989
17 409
1) Trade creditors include NOK 8 million due after one year (NOK 119 million in 2013).
2) Other current liabilities include NOK 27 million related to deferred and contingent considerations assumed in business combinations (NOK 176 million
in 2013). See note 26 Other non-current liabilities for further description.
Book value of trade creditors and other current liabilities is approximately equal to fair value.
note 30 | Capital management
Funding policy
Reasonably possible changes at the reporting date to one of the relevant
affected the defined benefit obligation as of December 31, 2014 by the
Akastors’ capital management is designed to ensure that the Group
Liquidity planning
actuarial assumptions, holding other assumptions constant, would have
amounts shown below.
has sufficient financial flexibility, short-term and long-term. one main
Akastor has a strong focus on its liquidity situation in order to meet its
Amounts in NOK million
Discount rate (1% movement)
Future salary growth (1% movement)
Future pension growth (1% movement)
Increase
Decrease
cash flow, secures the Groups strong, long-term creditworthiness, as well
obligations long term. Akastors liquidity reserve per year end 2014
objective is to maintain a financial structure that, through solidity and
short term working capital needs and to ensure solvency for its financial
(55)
11
60
66
(10)
(51)
maximize value creation for its shareholder through:
amounted to noK 2.1 billion and was beyond cash and cash equivalents,
primarily composed of an undrawn committed credit facility.
Investing in projects and business areas which will increase the
company’s Return on Capital employed (RoCe) over time.
Funding of operations
the change in discount rate assumptions would affect plan assets in the income statement in next period as it would change the estimated asset return,
but have no effect on pension assets as of year-end.
optimizing the company’s capital structure to ensure both
sufficient and timely funding over time to finance its activities
at the lowest cost.
Investment policy
Akastors’ group funding policy implies that all operations shall meet
their funding needs directly via Corporate treasury. this ensures optimal
availability and transfer of cash within the group and better control of the
company’s overall debt as well as cheaper funding for its operations.
Akastors’ capital management is based on a rigorous investment selection
Funding duration
process which considers not only Akastors’ weighted average cost of
Akastor emphasizes financial flexibility and steers its capital structure
capital and strategic orientation but also external factors such as market
accordingly to ensure a balance between liquidity risk and refinancing
expectations and extrinsic risk factors.
risk. In this perspective, loans and other external borrowings are to be
renegotiated well in advance of their due date.
PRINT
Funding cost
the loan agreement) and finance cost. the reported ratios are well within
at group level as hedges of currency risk on a gross basis. More than 80
Exposure to currency risk
Akastor aims to have a diversified selection of funding sources in order to
the requirements in the loan agreements.
percent of the exposure value either qualify for hedge accounting or are
estimated forecasted receipts and payments in the table below are
reach the lowest possible cost of capital. these funding sources include:
embedded derivatives. non-qualifying hedges are adjusted at group level
calculated based on the group’s hedge transactions through the Corporate
the use of banks based on syndicated credit facilities.
the issue of debt instruments on the norwegian capital market.
the company’s interest coverage ratio must not be less
than 4.0 times, calculated from the consolidated eBItDA to
note 32 Derivative financial instruments for information regarding the
the currency exposure. the net exposure is managed by the Corporate
accounting treatment of hedging and embedded derivatives.
treasury department that is allowed to hold positions within an approved
trading mandate. this mandate is closely monitored and reported on a
the issuance of debt in the foreign capital market.
consolidated net Finance Cost.
Currency exposure from investments in foreign currencies are only
daily basis to the management.
Akastor has strict internal guidelines regarding key financial ratios:
and included in the “unallocated” part of the segment reporting. See
treasury department. these are considered to be the best estimate of
As per end of 2014, the capital structure of Akastor was 100 percent from
the company’s gearing ratio shall not exceed 1.0 times and
bank debt.
is calculated from the consolidated total borrowings to the
consolidated equity.
the group monitors capital on the basis of a gearing ratio (net debt/
equity) and interest coverage ratio (eBItDA/net finance cost). the ratios
these guidelines aim at maintaining a strong financial position for
are calculated from gross debt, including all interest-bearing liabilities as
Akastor, complying with the company’s covenants on its existing debt and
shown in note 33 Financial instruments, eBItDA (earnings before interest,
maintaining sufficient external credit rating to ensure reliable access to
tax, depreciation, amortization and adjusted for certain items as defined in
capital over time.
Gearing and interest coverage ratios at December 31 for term loan and credit facility1)
Amounts in NOK million
Gearing ratio
net debt
equity
Net debt/equity2)
Gross debt
eBItDA
gross debt/eBITDA3)
Interest coverage
eBItDA
net finance cost
eBITDA/Net finance cost
1) Net finance cost, net debt and EBITDA are adjusted for certain items as defined in the loan agreement
2) Net debt / equity introduced as covenant after refinancing in 2014.
3) Gross debt / EBITDA not defined as covenant in current finance agreements
note 31 | financial risk management and exposures
2014
2013
3 155
9 378
0.34
11 875
4 285
2.8
1 380
4 285
167
8.2
664
6.5
hedged when specifically instructed by management. As of December
31, 2014, the group has one active net investment hedge related to its
subsidiary Frontica Global employment limited.
Amounts in million
Bank
Intercompany loans
external loans
usD
(83)
406
-
2014
euR
(56)
(13)
-
gBP
(17)
(11)
-
Balance sheet exposure
323
(70)
(28)
estimated forecast receipts from customers
estimated forecast payments to vendors
Cash flow exposure
forward exchange contracts
Net exposure
1 669
(700)
969
(1 291)
1
75
(191)
(116)
186
-
3
(14)
(11)
39
-
BRl
-
160
-
160
459
(137)
323
(483)
-
usD
(62)
178
2013
euR
(52)
(84)
-
(400)
116
(536)
gBP
(12)
36
-
24
4 016
169
184
(1 227)
(515)
2 789
(346)
(2 899)
6
883
1
(338)
(154)
130
-
BRl
-
(107)
-
(107)
95
(121)
(26)
137
4
Sensitivity analysis
to be reasonably possible at the end of the reporting period. the analysis
A strengthening of euR, uSD, GBp and BRl against noK as of December
assumes that all other variables, in particular interest rates, remain
31 would have affected the measurement of financial instruments
constant and ignores any impact of forecast sales and purchases. Figures
denominated in a foreign currency and increased (decreased) equity and
in the table below only include the effect in income statement and equity
income statement by the amounts shown below. this analysis is based
for change in currency regarding financial instruments and do not include
on foreign currency exchange rate variances that the group considered
effect from operating cost and revenue.
Amounts in NOK million
uSD (15 percent weakening of noK)
euR (15 percent weakening of noK)
GBp (15 percent weakening of noK)
BRl (15 percent weakening of noK)
2014
2013
Profit (loss) before
tax
equity Increase
(decrease)
Profit (loss) before
tax
equity Increase
(decrease)
(945)
87
19
(6)
(909)
152
19
(60)
(2 334)
(2 445)
246
56
(11)
449
234
(11)
Financial risks
Currency risk
A 15 percent strengthening of the noK against the above currencies as
interest rate risk. Borrowings issued at fixed rates expose the group to
the group is exposed to a variety of financial risks: currency risk, interest
the group operates internationally and is exposed to currency risk
of December 31 would have had the equal but opposite effect on the
fair value interest rate risk. However, as these borrowings are measured at
rate risk, price risk, credit risk, liquidity risk and capital risk. the market risks
on commercial transactions, recognized assets and
liabilities and
above amounts, on the basis that all other variables remain constant. the
amortized cost, interest rate variations do not effect profit and loss when
affect the group’s income or the value of financial instruments held. the
net investments in foreign operations. Commercial transactions and
sensitivity analysis does not include effects on the consolidated result and
held to maturity.
objective of financial risk management is to manage and control financial
recognized assets and liabilities are subject to currency risk when
equity from changed exchange rates used for consolidation of foreign
risk exposures and thereby increase the predictability of earnings and
payments are denominated in a currency other than the respective
subsidiaries.
minimize potential adverse effects on the group’s financial performance.
functional currency of the group company. the group’s exposure to
As the group has no significant interest-bearing operating assets,
operating income and operating cash flows are substantially independent
Akastor group uses financial derivative instruments to hedge certain
currency risk is primarily to uSD, euR, GBp and BRl but also several other
the primary currency-related risk is the risk of reduced competitiveness
of changes in market interest rates. external debt was not hedged at
risk exposures and aims to apply hedge accounting whenever possible
currencies.the Akastor policy requires business units to mitigate currency
abroad in the case of a strengthened noK. this risk relates to future
year end.
in order to reduce the volatility resulting from the periodic mark-to-
exposure in any project. Corporate treasury manages internal exposures
commercial contracts and is not included in the sensitivity analysis above.
market revaluation of financial instruments in the income statement. Risk
by entering into forward contracts or currency options with the financial
management is performed in every project. It is the responsibility of the
market place. the Akastor group has a large number of contracts involving
Interest rate risk
An increase of 100 basis points in interest rates during 2014 would have
increased (decreased) equity and profit and loss by the amounts shown on
project managers, in cooperation with the central treasury department
foreign currency exposures and the currency risk policy has been well-
the group’s interest rate risk arises from non-current borrowings.
the table below. this analysis assumes that all other variables, in particular
(Corporate treasury), to identify, evaluate and hedge financial risks
established for many years.
Borrowings issued at variable rates expose the group to cash flow
foreign currency rates, remain constant.
under policies approved by the Board of Directors. the group has well-
established principles for overall risk management, as well as policies for
For segment reporting purposes, each business unit designates all
the use of derivatives and financial investments. there has not been any
currency hedge contracts with Corporate treasury as cash flow hedge,
changes in these policies during the year.
fair value hedge, net investment hedge or identified and seperated as an
embedded derivative. external foreign exchange contracts are designated
PRINT
Effect of increase of 100 basis points in interest rates
Management monitors rolling weekly and monthly forecasts of the group’s
regarding capital expenditures and net operating assets, see note 6
Amounts in NOK million
Cash and cash equivalents
Interest rate swap
non-current interest-bearing receivables
Current interest-bearing receivables
Borrowings
Cash flow sensitivity (net)
2014
2013
Profit (loss) before
tax
equity1) Increase
(decrease)
Profit (loss) before
tax
equity1) Increase
(decrease)
21
-
1
2
(69)
(46)
-
-
-
-
-
-
16
(9)
3
4
(86)
(72)
-
97
-
-
-
97
1) Not including tax effect on hedge reserve or effects to equity that follow directly from the effects to profit and loss.
A decrease of 100 basis points in interest rates during 2014 would have
or counterparty to financial
investments/instruments fail to meet
had the equal but opposite effect on the above amounts, on the basis that
contractual obligations, and arise principally from investment securities
all other variables remain constant.
and receivables. Investment securities and derivatives are only traded
against approved banks. All approved banks are participants in the Akastor
the group has provided the following guarantees on behalf of wholly
to investment securities and derivatives is therefore considered to be
owned subsidiaries as of December 31 (all obligations are per date of issue):
insignificant.
non-financial parent company guarantees related to project
Assessment of credit risk related to customers and subcontractors is
performance on behalf of group companies are noK 33.5
an important requirement in the bid phase and throughout the contract
billion (noK 75.4 billion in 2013).
period. Such assessments are based on credit ratings, income statement
Financial parent company
indemnity guarantees
for
fulfillment of lease obligations are noK 3.3 billion (noK 1.2
billion in 2013).
and balance sheet reviews and using credit assessment tools available (e.g.
Dun & Bradstreet and Credit Watch). Sales to customers are settled in cash.
liquidity reserve on the basis of expected cash flow. For information
operating segments.
financial liabilities and the period in which they mature
2014
Amounts in NOK million
Note Book value
Total
cash flow1)
6 months
and less
6-12
months
1-2 years
2-5 years
More than
5 years
Borrowings
other non-current liabilities
net derivative financial instruments
trade and other payables
Financial lease
Total financial liabilities
Financial guarantees
2013
25
26
32
29
25
(5 028)
(5 870)
(305)
(190)
(285)
338
(378)
338
-
-
1 008
(276)
(6 429)
(6 429)
(4 822)
(1 592)
(1 376)
2 843
106
106
(381)
(86)
(393)
(15)
251
(12 780)
(9 496)
(4 013)
(1 952)
(624)
(2 811)
(3 452)
(1 542)
(197)
(95)
-
-
838
-
-
1 542
(95)
(7 229)
(1 295)
(308)
(1 033)
(1 354)
(3 238)
Total cash
flow1)
6 months
and less
6-12
months
1-2 years
2-5
years
More than
5 years
Borrowings
other non-current liabilities
net derivative financial instruments
trade and other payables
Total financial liabilities
Financial guarantees
1) Nominal currency value including interest.
25
26
32
29
(11 316)
(12 335)
(4 927)
(911)
(3 081)
(2 366)
(1 049)
(356)
710
(356)
710
-
313
-
166
(17 409)
(17 409)
(13 057)
(4 352)
(148)
259
-
(142)
(25)
-
(65)
(3)
-
(28 371)
(29 390)
(17 671)
(5 097)
(2 970)
(2 533)
(1 117)
(8 223)
(1 141)
(306)
(1 255)
(3 439)
(2 082)
Guarantee obligations
loan syndicate and have investment grade ratings. Credit risk related
Amounts in NOK million
Note Book value
Based on estimates of incurred losses in respect of trade and other
the group policy for the purpose of optimizing availability and flexibility
An important condition for the participants (business units) in such cash
Financial guarantees including counter guarantees for bank/
receivables, the group establishes a provision for impairment losses.
of cash within the group is to operate centrally managed cash pooling
pooling arrangements is that the group as an owner of such pools is
surety bonds and guarantees for pension obligations to
provision for loss on debtors are based on individual assessments.
arrangements. Such arrangements are either organized with a bank as
financially viable and is able to prove its capability to service its obligations
employees are noK 4 billion (noK 6.8 billion in 2013).
provisions for loss on receivables were noK 81 million in 2014 (noK
a service provider, or as a part of the operation of Corporate treasury.
concerning repayment of any net deposits made by business units.
Indemnity under financial agreements on behalf of Aker
DoF Deepwater AS are noK 582 million (noK 560 million
in 2013).
100 million in 2013). Revenues are mainly related to large and long-
term projects closely followed up in terms of payments up front and in
accordance with agreed milestones. normally, lack of payments is due to
disagreements related to project deliveries and is solved together with
Guarantee obligations on behalf of New Aker Solutions
the customer or escalated to the local authority.
note 32 | Derivative financial instruments
If an obligation that arose prior to the completion of the demerger is not
the Akastor group uses derivative financial instruments to hedge foreign
project expenses are expected to impact profit and loss. the majority
satisfied by the party to which the obligation has been allocated under the
At the balance sheet date, there were no significant concentrations of
exchange and interest rate exposures. In addition, there are embedded
of project revenues are recognized in accordance with IAS 11 using the
demerger plan, be it Akastor or new Aker Solutions, then the other party
credit risk. the maximum exposure to credit risk at the reporting date
foreign exchange forward derivatives separated from ordinary commercial
percentage of completion method. this may result in different timing of
will have secondary joint liability for such obligation. this statutory liability
equals the book value of each category of financial assets, see carrying
contracts. Further information regarding risk management policies in the
cash flows related to project revenues and revenue recognition.
is unlimited in time, but is limited in amount to the net value allocated to
amounts in note 33 Financial instruments. the group does not hold
group is available in note 31 Financial risk management and exposures.
the non-defaulting party in the demerger. the guarantees listed above do
collateral as security.
not include obligations on behalf of new Aker Solutions.
the table below presents the fair value of the derivative financial
instruments used to price embedded derivatives as well as other derivative
Instruments that do not qualify for hedge accounting include the external
Price risk
For further information, see note 10 Guarantees in the Akastor ASA’s
the Akastor group hedging policy and the assumption that the projects
the group as part of its risk mandate. As of December 31, 2014, these
Akastor ASA provides parent company guarantees to group companies.
instruments and a maturity analysis of the derivatives cash flows. Given
instruments used by Group treasury to hedge the residual exposure of
the group is exposed to fluctuations in market prices both in the
accounts.
investment portfolio used in the pension benefit plan and in the operating
businesses related to individual contracts.
Liquidity risk
the investment portfolio is limited, and the group currently only holds
the obligations associated with its financial liabilities. the group’s approach
one investment in listed companies (ezra), see note 19 other investments.
to managing liquidity is to ensure, as far as possible, that it will always have
liquidity risk is the risk that the group will encounter difficulty in meeting
sufficient liquidity reserves to meet its liabilities when due.
the businesses may be exposed to changes in market price for raw
materials, equipment and development in wages. this is managed in the
prudent liquidity risk management includes maintaining sufficient cash,
bid process by locking in committed prices from vendors as basis for
the availability of funding from an adequate amount of committed credit
offers to customers or through escalation clauses with customers.
facilities and the ability to close out market positions. Due to the dynamic
Credit risk
nature of the underlying businesses, Corporate treasury maintains
flexibility in funding by maintaining availability under committed credit
Credit risk is the risk of financial losses to the group if customer
lines, see note 25 Borrowings.
are cash neutral, this table also indicates when the cash flows related to
instruments only include currency forwards and FX swaps.
PRINT
Fair value of derivative financial instruments with maturity
2014
Amounts in NOK million
Assets
Cash flow hedges
embedded derivatives in ordinary
commercial contracts
not hedge accounted
Total forward foreign exchange contracts
Total assets
Liabilities
Cash flow hedges
net investment hedges
embedded derivatives in ordinary
commercial contracts
not hedge accounted
Total forward foreign exchange contracts
Total liabilities
Instruments at
fair value
Total undiscounted
cash flow1)
6 months or
less
6-12
months
1-2
years
2-5
years
Over 5
years
1 621
520
58
2 199
2 199
(669)
(39)
(868)
(285)
(1 861)
(1 861)
1 621
1 248
225
124
24
520
58
2 199
2 199
(669)
(39)
(868)
(285)
(1 861)
(1 861)
520
58
1 826
1 826
(425)
(31)
(239)
(124)
(819)
(819)
-
-
225
225
-
-
124
124
(31)
(213)
-
(8)
-
-
24
24
-
-
(377)
(228)
(24)
(93)
(501)
(501)
(68)
(517)
(517)
-
(24)
(24)
-
-
-
-
-
-
-
-
-
-
-
1) Cash flows from matured derivatives are translated to NOK using the exchange rates on the balance sheet date.
2013
Amounts in NOK million
Assets
Cash flow hedges
Fair value hedges
net investment hedges
embedded derivatives in ordinary commercial
contracts
not hedge accounted
Total forward foreign exchange contracts
Cash flow hedges
Fair value hedges
Total interest rate instruments
Total assets
Liabilities
Cash flow hedges
net investment hedges
embedded derivatives in ordinary commercial
contracts
not hedge accounted
Total forward foreign exchange contracts
Cash flow hedges
Total interest rate instruments
Total liabilities
6 months
or less
6-12
months
1-2
years
2-5
years
Over 5
years
Instruments
at fair value
Total
undiscounted
cash flow1)
1 009
1 009
-
12
359
127
1 507
29
8
37
-
12
359
127
1 507
29
8
37
414
-
12
189
105
720
29
8
37
203
306
86
-
-
20
16
-
-
91
5
239
402
-
-
-
-
-
-
-
-
59
-
145
-
-
-
1 544
1 544
757
239
402
145
(494)
(21)
(5)
(270)
(790)
(44)
(44)
(834)
(494)
(21)
(5)
(270)
(790)
(44)
(44)
(298)
(21)
(5)
(120)
(444)
-
-
(44)
(59)
(92)
-
-
(22)
(66)
(7)
(7)
-
-
(84)
(143)
-
-
-
-
(44)
(136)
(34)
(34)
(834)
(444)
(73)
(143)
(170)
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(3)
(3)
(3)
embedded derivatives are foreign exchange derivatives separated from
derivatives hedging the embedded derivatives are included in Forward
construction contracts. the reason for separation is that the agreed
foreign exchange contracts - not hedge accounted.
payment is in a currency different from any of the major contract parties’
the hedged transactions in foreign currency that are subject to cash flow
own functional currency, or that the contract currency is not considered
hedge accounting are highly probable future transactions expected to
to be commonly used for the relevant economic environment defined as
occur at various dates during the next one to four years, depending on
the countries involved in the cross-border transaction. the embedded
progress in the projects. Gains and losses on forward foreign exchange
derivatives represent currency exposures, which is hedged against
contracts are recognized in comprehensive income and reported as
external banks. Since the embedded derivatives are measured and
hedging reserve in equity until they are recognized in the income
classified in the same way as their hedging derivatives, they will have an
statement in the period or periods during which the hedged transactions
almost equal, opposite effect to profit and loss. In the table above, the
affect the income statement.
Unsettled cash flow hedges’ impact on profit and loss and equity (not adjusted for tax)
2014
Amounts in NOK million
Forward exchange contracts
Total
2013
Amounts in NOK million
Interest rate swaps
Forward exchange contracts
Total
fair value of all
hedging instruments
Recognized in
profit and loss
Deferred in equity
(the hedging reserve)
194
194
90
90
104
104
fair value of all
hedging instruments
Recognized in
profit and loss
Deferred in equity
(the hedging reserve)
(44)
373
329
-
27
27
(44)
346
302
the value of the interest swaps is attributable to changes in the interest
noK 346 million in 2013) that are currently recorded directly in the
swap curve for norwegian kroner during the period from inception of the
hedging reserve, will be reclassified to income statement over the next
hedge to the balance sheet date. It excludes the accrued interest rates of
years.
the swaps accumulated during the period.
Interest rate swaps
the value of the hedge reserve is before tax to allow comparison with
At 31 December, 2013 Akastor had one bond of noK 1 913 million (out
the value of the hedging derivatives; this value does not include deferred
of which noK 200 million bought back) with a fixed interest rate of 10.7
settlements related to matured instruments.
percent. the bond was settled in 2014. Akastor also had interest rate swaps
with floating interest with a notional value of noK 763 million hedging the
the purpose of the hedging instrument is to secure a situation where
fixed interest bonds.
the hedged item and the hedging instrument together represent a
predetermined value independent of fluctuations of exchange rates.
Hedge accounting was applied using the cash flow hedge accounting model
Revenue and expense on the underlying construction contracts are
which means that gains and losses on interest rate swap from floating to
recognized in the income statement in accordance with progress.
fixed interest rates as of December 31, 2013 are recognized in the hedging
Consequently, positive noK 90 million (positive noK 27 million in 2013)
reserve in equity and was continuously released to the income statement
of the value of the forward contracts have already affected the income
as changes in fair value until the bond was repaid. this is achieved based on
statement indirectly as revenues and expenses are recognized based on
the periodic mark-to-market revaluation of the interest rate swaps whose
updated forecasts and progress. the positive noK 104 million (positive
fair value tend to zero upon maturity.
note 33 | financial instruments
1) Cash flows from matured derivatives are translated to NOK using the exchange rates on the balance sheet date.
the table below lists the group’s financial instruments, both assets and
level 2 - fair values are based on price inputs other than quoted prices
liabilities. Financial instruments measured at fair value are classified
derived from observable market transactions in an active market for
the group uses derivative financial instruments such as currency forward
to foreign exchange variations in future cash flows are related to a few
by the levels in the fair value hierarchy. All other financial instruments
identical assets or liabilities. level 2 includes currency or interest
contracts, currency options and interest rate swaps to hedge its exposure
large projects. the currency exposure in these projects have been hedged
are classified by the main group of instruments as defined in IAS 39. It
derivatives and interest bonds, typically when the group uses forward
to foreign exchange and interest rate risks arising from operational, financial
back-to-back in order to meet the requirements for hedge accounting.
does not include fair value information for financial assets and financial
prices on foreign exchange rates or interest rates as inputs to valuation
and investment activities. Derivative financial instruments are classified as
they are either subject to hedge accounting or separated embedded
liabilities not measured at fair value if the carrying amounts is a reasonable
models.
current assets or liabilities as they are a part of the operating cycle.
derivatives. All other hedges are not designated as IAS 39 hedges and will
approximation of fair value. For financial instruments measured at fair
Foreign exchange derivatives
are classified as cash flow hedges (hedges of highly probable future
internal assumptions used in the absence of quoted prices from an active
Corporate treasury hedges the group’s future transactions in foreign
revenues and/or expenses).
level 1 - fair values are based on prices quoted in an active market for
market or other observable price inputs.
have an effect on profit or loss. Hedges qualifying for hedge accounting
value, the levels in the fair value hierarchy are as shown below.
level 3 - Fair values are based on unobservable inputs, mainly based on
currencies with external banks. Approximately 80 percent of the exposure
identical assets or liabilities.
PRINT
Financial instruments as of December 31, 2014
Carrying amount
Amounts in NOK million
Note
through P&l
instruments
receivables
for sale
liabilities
fair value
fair value - hedging
loans and
Available
Other financial
Cash and cash equivalents
other investments
- equity securities - Available-for-sale1)
Forward foreign exchange contract
non-current interest-bearing receivables
other non-current operating assets
trade and other receivables
Current interest-bearing receivables
- Bonds and certificates4)
- Receivables
financial assets
Forward foreign exchange contracts
non-current borrowings2)
other non-current liabilities
- Contingent consideration
- other liabilities
Credit facility and other current borrowings3)
other current liabilities
- trade and other payables
- Deferred consideration
- Contingent consideration
financial liabilities
fair value
23
19
32
17
22
17
17
32
25
26
26
25
29
29
29
-
-
-
-
-
-
91
-
91
-
-
(44)
-
-
-
-
-
(44)
-
1 075
-
-
2 199
-
-
-
-
-
2 199
(1 861)
-
-
-
-
-
-
-
(1 861)
-
131
691
7 178
-
114
9 189
-
-
-
-
-
-
-
-
-
347
-
-
-
-
-
-
347
-
-
-
-
-
-
-
-
-
Total
1 075
347
2 199
131
691
7 178
91
114
11 826
(1 861)
-
-
-
-
-
-
-
-
-
-
(4 720)
(4 720)
-
(241)
(308)
(44)
(241)
(308)
(6 402)
(7)
(20)
(11 698)
(6 402)
(7)
(20)
(13 603)
Amounts in NOK million
Note
level 1
level 2
level 3
Total
Cash and cash equivalents
other investments
- equity securities - Available-for-sale1)
Forward foreign exchange contract
non-current interest-bearing receivables
other non-current operating assets
trade and other receivables
Current interest-bearing receivables
- Bonds and certificates4)
- Receivables
financial assets
Forward foreign exchange contracts
non-current borrowings2)
other non-current liabilities
- Contingent consideration
- other liabilities
Credit facility and other current borrowings3)
other current liabilities
- trade and other payables
- Deferred consideration
- Contingent consideration
financial liabilities
23
19
32
17
22
17
17
32
25
26
26
25
29
29
29
-
222
-
-
-
-
-
-
222
-
-
-
-
-
-
-
-
-
-
-
2 199
-
-
-
91
-
2 290
(1 861)
(4 748)
-
-
(308)
-
-
-
(6 917)
-
125
-
-
-
-
-
-
125
-
-
(44)
-
-
-
-
(20)
(64)
-
347
2 199
-
-
-
91
-
2 637
(1 861)
(4 748)
(44)
-
(308)
-
-
(20)
(6 981)
Financial instruments as of December 31, 2013
Carrying amount
Amounts in NOK million
Note
through P&l
hedging instruments
receivables
for sale
liabilities
Total
fair value
fair value -
loans and
Available
Other financial
Cash and cash equivalents
other investments
- equity securities - Available-for-sale1)
- equity securities - fair value in profit and loss
Forward foreign exchange contract
Interest rate instruments
non-current interest-bearing receivables
other non-current operating assets
trade and other receivables
Current interest-bearing receivables
- Bonds and certificates4)
- Receivables
- Convertible loans
financial assets
Forward foreign exchange contracts
Interest rate instruments
non-current bonds and borrowings2)
other non-current liabilities
- Contingent consideration
- Actuary estimated insurance provisions
- other liabilities
other current liabilities
- trade and other payables
- Deferred consideration
Credit facility and other current borrowings3)
financial liabilities
fair value
Amounts in NOK million
Cash and cash equivalents
other investments
- equity securities - Available-for-sale1)
- equity securities - fair value in profit and loss
Forward foreign exchange contract
Interest rate instruments
non-current interest-bearing receivables
other non-current operating assets
trade and other receivables
Current interest-bearing receivables
- Bonds and certificates4)
- Receivables
- Convertible loans
financial assets
Forward foreign exchange contracts
Interest rate instruments
non-current bonds and borrowings2)
other non-current liabilities
- Contingent consideration
- Actuary estimated insurance provisions
- other liabilities
other current liabilities
- trade and other payables
- Deferred consideration
Credit facility and other current borrowings3)
financial liabilities
23
19
19
32
32
17
22
17
17
17
32
32
25
26
26
26
29
26
25
-
-
27
-
-
-
-
-
119
-
-
146
-
-
-
(142)
(49)
-
-
-
-
(191)
-
2 345
-
-
-
1 507
37
-
-
-
-
-
-
1 544
(790)
(44)
-
-
-
-
-
-
-
(834)
-
-
-
-
159
162
17 659
-
45
347
20 717
-
-
-
-
-
-
618
-
-
-
-
-
-
-
-
-
618
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2 345
618
27
1 507
37
159
162
17 659
119
45
347
23 025
(790)
(44)
(7 420)
(7 420)
-
-
(165)
(142)
(49)
(165)
(17 233)
(176)
(3 896)
(28 890)
(17 233)
(176)
(3 896)
(29 915)
Note
level 1
level 2
level 3
23
19
19
32
32
17
22
17
17
32
32
25
26
26
26
29
26
25
-
480
-
-
-
-
-
-
-
-
-
480
-
-
-
-
-
-
-
-
-
-
-
-
27
1 507
37
-
-
-
119
-
-
1 690
(790)
(44)
(7 433)
-
-
-
-
-
(4 030)
(12 297)
-
138
-
-
-
-
-
-
-
-
-
138
-
-
-
(142)
(49)
-
-
-
-
(191)
Total
-
618
27
1 507
37
-
-
-
119
-
-
2 308
(790)
(44)
(7 433)
(142)
(49)
-
-
-
(4 030)
(12 488)
1) Investments in level 3 in the hierarchy relate to equity securities with no active market. These investments are measured at cost since this is considered to be the best estimate of fair
value. All available for sale investments are designated as such upon initial recognition.
2) Fair values are based on quoted prices for the bonds noted on the Oslo Stock Exchange. For new bonds, the notional amounts are considered as the best approximation of fair value.
3) For credit facilities and other short-term loans with floating interest, notional amounts are used as approximation of fair values.
4) Portfolio of bonds, obligations and certificates derived from observable market transactions in an active market for identical assets.
there are no financial assets or liabilities held for trading
PRINT
note 34 | Group companies
this note gives an overview of entities that are consolidated into Akastor group. For information about other investments in the group, refer to note 18
equity accounted investees and note 19 other investments. If not stated otherwise, ownership equals the percentage of voting shares.
group companies as of December 31
group companies as of December 31
Company
Akastor AsA
former company name
location
Country
Aker Solutions ASA
Fornebu
norway
Aker Wirth Australia pty
Aker Wirth GmbH
Aker Drilling technologies India pvt ltd
MHWirth
Australia
Argenton
MHWirth pty ltd
Mpo Austria Holding GmbH1)
Austria
Vienna
Mpo Austria Services GmbH1)
Vienna
Austria
MHWirth Canada Inc1)
newfoundland Canada
MHWirth offshore petroleum engineering (Shanghai) Co ltd Aker e&t (Shanghai) Co ltd
Shanghai
Managed pressure operations International limited (Cyprus) Managed pressure operations International limited limassol
erkelenz
MHWirth GmbH
Mumbai
MHWirth (India) pvt ltd
Jakarta
pt Managed pressure operations (Indonesia)
MHWirth Sdn Bhd1,2)
Kuala lumpur Malaysia
Kristiansand S norway
Drilltech AS
Kristiansand S norway
Managed pressure operations International AS
Kristiansand S norway
Maritime promeco AS
norway
Kristiansand
MHWirth AS
Step offshore AS3)
norway
Hvalstad
Russia
St petersburg
MHWirth St. petersburg llC
Singapore
Managed pressure operations pte ltd (Singapore)
Singapore
MHWirth (Singapore) pte ltd
Singapore
Aker Solutions Drilling technologies (Singapore) pte ltd Singapore
Singapore
Singapore
Mpo Research technologies pte ltd
uK
Aberdeen
MHWirth uK ltd
uAe
Dubai
MHWirth FZe
uAe
Dubai
Managed pressure operations FZe (Dubai)
MHWirth Inc1,4)
uSA
Houston
uSA
Houston
Managed pressure operations llC (uSA - tX)
China
Cyprus
Germany
India
Indonesia
Aker MH uK ltd
Aker MH FZe
Aker Solutions St petersburg Co ltd
Aker MH AS
frontica
Advantage Frontica pty ltd
Frontica Global employment ltd
Frontica Business Solutions Sdn Bhd
Aker Advantage BV6)
Frontica AS1)
Frontica Business Solutions AS
Frontica Advantage AS
Frontica Advantage Group AS
Frontica Advantage ltd
Frontica Business Solutions ltd
Frontica DC trustees ltd
Frontica Advantage Inc
Frontica Business Solutions Inc1,4)
Aker Advantage pty ltd
Aker Global employment ltd
Aker Solutions Asia pacific Sdn Bhd
Aker Business Services AS
Aker Advantage AS
Aker Advantage Group AS
Aker Advantage ltd
Aker Business Services ltd
Aker Solutions DC trustees ltd
Aker Advantage Inc
Australia
Cyprus
Melbourne
limassol
Kuala lumpur Malaysia
Gravenhage
Fornebu
Fornebu
Bergen
Fornebu
london
london
london
Houston
Houston
netherlands
norway
norway
norway
norway
uK
uK
uK
uSA
uSA
AKOfs Offshore
AKoFS offshore Servicos de petroleo e Gas do Brazil ltda5) Aker oilfield Servicos de petroleo e Gas do Brasil ltda Rio de Janeiro Brazil
Aker oilfield Services BV6)
AKoFS 1 AS
AKoFS 2 AS
AKoFS 3 AS
AKoFS 2 Services AS
AKoFS offshore AS
AKoFS offshore operations AS
AKoFS 4 AS
AKoFS Wayfarer AS
Aker oilfield Services Singapore pte ltd6)
Aker oilfield Services norway AS
AKoFS Angola AS
Aker oilfield Services AS
Aker oilfield Services operations AS
Subsea Africa AS
Amsterdam
oslo
oslo
oslo
oslo
oslo
oslo
oslo
Fornebu
Singapore
netherlands
norway
norway
norway
norway
norway
norway
norway
norway
Singapore
fjords Processing
Fjords process Systems pty ltd
Fjords processing Canada Inc
Aker Cool Sorption (Beijing) technology Co ltd
Aker Midsund engineering s.r.o
Cool Sorption A/S
Aker operations ApS
Fjords processing France SAS
Fjords processing AS
Aker process Systems pty ltd
Aker Solutions oilfield Services Canada Inc
Aker Solutions Denmark AS
Aker process Systems SAS
Aker process Systems AS
Australia
Welshpool
newfoundland Canada
Beijing
prague
Glostrup
Glostrup
Vincennes Cedex France
norway
Fornebu
China
Czech Republic
Denmark
Denmark
Ownership (%)
2013
2014
Company
former company name
location
Country
Ownership (%)
2013
2014
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
98
100
100
100
100
100
-
-
-
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
-
100
100
100
100
100
-
100
100
100
100
100
100
100
-
100
100
100
100
100
100
100
100
100
100
100
100
100
100
98
100
100
100
100
Fjords processing International AS
Midsund Bruk AS
Aker Cool Sorption Siam ltd
Aker process Systems ltd
opus Maxim ltd
opus plus ltd
Fjords processing Inc1,4)
KOP surface
pt Kop Surface products
Kop Surface products Sdn Bhd1)
Kop Surface products nigeria ltd
Kop Surface products pte ltd
Kop Surface products (Services) pte ltd
Real estate and other Holdings
Real estate
Akastor Real estate AS
Borgenskogen AS
Dvergsnestangen eiendom Invest AS
egersund eiendom Invest AS1)
Grunnavågen eiendom Invest AS
pusnes eiendom AS
Strendene eiendom AS
tranby eiendom Invest AS
tromsøruffen AS
Ågotnes eiendom Invest AS
First Geo
First Geo AS
Step Oiltools
Step oiltools (Australia) pty ltd7)
Step oiltools limited7)
Step oiltools GmbH7)
pt Step oiltools7)
Step oiltools llp7)
Step oiltools BV7)
Step oiltools AS7)
Step oiltools llC7)
Step oiltools pte ltd7)
Step oiltools (thailand) ltd7)
Step oiltools (uK) ltd7)
Step oiltools FZe7)
Other companies
Aker Solutions Belgium nV/SA
Akastor Mauritius ltd
Aker process BV
Akastor AS
Aker Insurance AS
BtA technology AS1)
AK pharmaceuticals llC
AK Willfab Inc
Aker process Systems International AS
Aker Midsund AS
Fornebu
Midsund
Rayong
Aberdeen
Guildford
orkney
Houston
norway
norway
thailand
uK
uK
uK
uSA
pt Aker Solutions
Aker Solutions Ambico nigeria ltd
Aker Solutions Singapore pte ltd
Aker Solutions (Services) pte ltd
AK eiendomsinvest AS
Indonesia
Jakarta
Kuala lumpur Malaysia
Ikoyi - lagos
Singapore
Singapore
nigeria
Singapore
Singapore
Fornebu
Fornebu
Fornebu
Fornebu
Fornebu
Fornebu
Fornebu
Fornebu
Fornebu
Fornebu
norway
norway
norway
norway
norway
norway
norway
norway
norway
norway
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
-
100
-
49
100
100
100
100
100
-
100
100
100
100
100
100
Aker Geo AS
Stavanger
norway
100
100
Australia
perth
Grand Cayman Cayman Islands
Bad Fallingbostel Germany
Indonesia
Jakarta
Kazakhstan
Aktau
netherlands
Amsterdam
norway
Stavanger
Russia
Moscow
Singapore
Singapore
thailand
Bangkok
uK
Aberdeen
uAe
Dubai
Antwerp
port louis
Zoetermeer
Fornebu
Fornebu
Fornebu
Houston
Williamsport
Belgium
Mauritius
netherlands
norway
norway
norway
uSA
uSA
76
76
76
76
76
76
76
76
76
76
76
76
100
100
100
100
100
100
100
100
76
76
76
76
76
76
76
76
76
76
76
76
100
100
100
100
100
-
100
100
Aker Solutions (Mauritius) ltd
Aker Solutions AS
Aker Kvaerner pharmaceuticals llC
Aker Kvaerner Willfab Inc
1) New companies in 2014
2) Business was part of Aker Solutions Malaysia Sdn Bhd before the demerger
3) Merged into MHWirth AS
4) Business was part of Aker Solutions Inc before the demerger
5) The entity includes businesses in MHWirth, Frontica, Fjords Processing and AKOFS Offshore following a restructuring in 2014
6) Liquidated in 2014
7) Akastor applies the anticipated acquisition method, no non-controlling interest is recognized. Akastor has 100 percent voting rights.
8) Sold in 2014
PRINT
the following companies have been disposed/demerged in 2014
Company
location
Country
Ownership %
2013
Disposals1)
Aker Qserv Sdn Bhd
Aker pusnes AS
Aker Well Service AS
K2 Hotelbygg AS
Aker Well Service llC
Aker Qserv ltd
Qserv pipeline & process ltd
Woodfield Systems Co ltd
extreme trading & Mechanical equipment llC
Aker Well Service Inc
Aker Kvaerner Gotech llC
Aker porsgrunn AS
Aker Solutions pusnes Korea ltd
Demerger of Aker solutions1)
Aker Solutions pty ltd
Aker Solutions do Brasil ltda
Aker Solutions Sdn Bhd
Aker Solutions Asset Integrity and Management Canada Inc
Aker Subsea (Shenzhen) Co. ltd
Aker Solutions Congo SA
Aker Solutions Cyprus ltd
Aker powergas pvt ltd
Aker powergas Subsea pvt ltd
Aker engineering International Sdn Bhd
Aker process Systems Asia pacific Sdn Bhd
Aker Solutions India Sdn Bhd
Aker Solutions Malaysia Sdn Bhd
Aker Solutions umbilical Asia pacific Sdn Bhd
phoenix polymers Malaysia ltd
Aker Solutions de Mèxico
Aker process engineering Services BV
Aker Solutions BV
Aker Solutions nigeria ltd
Aker egersund AS
Aker engineering & technology AS
Aker Installation Fp AS
Aker Insurance Services AS
Aker operations AS
Aker Solutions Contracting Kazakhstan AS
Aker Solutions MMo AS
Aker Subsea AS
Aker Subsea Russia AS
Ingeniør Harald Benestad AS
enovate norway AS
KB eDesign AS
phaze technologies AS
Aker process Gulf Company limited
Aker Solutions AB
Kvaerner Water AB
Aker engineering & technology ltd
Aker offshore partner ltd
Aker Solutions Angola ltd
Aker Subsea ltd
enovate Systems ltd
Aker Solutions uSA Corporation
Aker Solutions Inc
1) Entities are referred to by company names before the disposals/demerger
Kuala lumpur
Arendal
Stavanger
oslo
Muscat
Aberdeen
london
Kent
Abu Dhabi
Houston
Al-Khobar
porsgrunn
Busan
Melbourne
Curitiba
Seria
newfoundland
Shenzhen
point-noire
limassol
Mumbai
Mumbai
Kuala lumpur
Shah Akam
Kuala lumpur
Kuala lumpur
Kuala lumpur
Kuala lumpur
Mexico City
Maastrichts
Zoetermeer
lagos State
egersund
Fornebu
Fornebu
Fornebu
Stavanger
Fornebu
Stavanger
Fornebu
Fornebu
lierskogen
Hvalstad
oslo
lierskogen
Al-Khobar
Gothenburg
Ørnskjøldsvik
london
london
Maidenhead
Maidenhead
Aberdeen
Houston
Houston
Malaysia
norway
norway
norway
oman
uK
uK
uK
uAe
uSA
Saudi Arabia
norway
South Korea
Australia
Brazil
Brunei
Canada
China
Congo
Cyprus
India
India
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Malaysia
Mexico
netherlands
netherlands
nigeria
norway
norway
norway
norway
norway
norway
norway
norway
norway
norway
norway
norway
norway
Saudi Arabia
Sweden
Sweden
uK
uK
uK
uK
uK
uSA
uSA
100
100
100
93
70
100
100
100
49
100
51
100
100
100
100
100
100
100
100
100
68
68
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
100
82
100
100
82
100
100
100
100
100
100
100
95
100
100
note 35 | related parties
Related party relationships are those involving control (either direct or
the largest shareholder of Akastor, Aker Kvaerner Holding AS, is controlled
indirect), joint control or significant influence. Related parties are in a
by Aker ASA (70 percent) which in turn is controlled by Kjell Inge Røkke.
position to enter into transactions with the company that would not be
Aker ASA also controls 6 percent of the shares in Akastor directly. All entities
undertaken between unrelated parties. All transactions in the Akastor
which Kjell Inge Røkke controls are considered related parties to Akastor and
group with related parties have been based on arm’s length terms.
his family through tRG Holding AS and the Resource Group AS.
Akastor ASA is a parent company with control of around 100 companies
After implementation of IFRS 10, Kvaerner is considered to be a related
around the world. these subsidiaries are listed in note 34 Group
party of Akastor and is included as part of Aker entities. For the same
companies. Any transactions between the parent company and the
reason new Aker Solutions is also considered to be a related party from
subsidiaries are shown line by line in the separate financial statements of
the time of the demerger. new Aker Solutions is presented separately
the parent company, and are eliminated in the group financial statements.
from other Aker entities in 2014 due to the high level of transactions
between the companies during 2014, including the post demerger
Associated companies and jointly controlled companies are consolidated
services. transactions and balances with new Aker Solutions have also
using the equity method, see note 18 equity-accounted investees. Any
been presented for comparative periods as if new Aker Solutions had
transactions between the group and these entities are shown in the
been a related party in all periods presented.
table below.
Remunerations and transactions with directors and executive officers are
summarized in note 36 Management remunerations.
Summary of transactions and balances with related parties
2014
Amounts in NOK million
New Aker solutions entities
Other Aker entities
Associated companies
joint ventures
Total
Income statement
operating revenues
operating costs
net financial items
Balance sheet - Assets (liabilities)
trade receivables
Interest-bearing receivables
Finance lease (Aker Wayfarer)
non-current assets (Aker Wayfarer)
trade payables
Interest-bearing payable
Financial lease liability
2013
4 170
(310)
(5)
476
63
-
-
(135)
(82)
-
426
(178)
(57)
54
-
890
600
(2)
-
(1 376)
-
(82)
-
-
-
-
-
(19)
-
-
-
-
5
4 596
(570)
(57)
-
84
-
-
-
-
-
530
147
890
600
(156)
(82)
(1 376)
Amounts in NOK million
New Aker solutions entities
Other Aker entities
Associated companies
joint ventures
Total
Income statement
operating revenues
operating costs
net financial items
Balance sheet - Assets (liabilities)
trade receivables
other non-current assets
Group contribution, receivables
Interest-bearing receivables
trade payables
Group contribution, payables
Interest-bearing payable
4 313
(267)
(8)
566
-
1 871
-
(140)
(129)
(107)
295
(202)
-
47
144
-
-
(19)
-
-
-
-
10
-
-
-
83
-
-
-
4 608
(555)
2
613
144
1 871
83
(204)
(129)
(107)
-
(86)
-
-
-
-
-
(45)
-
-
PRINT
Below is description of the most significant related party transactions and
Akastor have provided parent company guarantees on behalf of Kvaerner
Related party transactions with associated companies
Aker pensjonskasse and Akastor’s share of paid-in equity was noK 120
balances in 2014.
entities of noK 24 billion related to guarantees that were not transferred
K2 Eiendom AS and Hinna Park Invest AS
million at the end of 2014 (unchanged from 2013). Akastor premiums paid
in connection with the demerger in 2011. the amount reflects obligations
Akastor entered into twelve year lease agreement with both K2 eiendom AS
to Aker pensjonskasse amounts to noK 14.1 million in 2014 (noK 12.7
Related party transactions with Aker entities
per date of issue of the guarantees. Kvaerner pays a guarantee commission
and Hinna park Invest AS for office buildings. Akastor had a shareholding of 25
million in 2013).
New Aker Solutions
on market terms and is liable to indemnify Akastor for any rightful claim
percent in both these entities until end of 2014, when most of these shares
Akastor have entered into a number of agreements and arrangements
under the guarantee.
were sold (17% shareholding in K2 eiendom AS remaining at 31 December
even though Akastor owns 93.4 percent in Aker pensjonskasse the
with new Aker Solutions, including:
A main separation agreement addressing various separation
issues between the new Aker Solutions Group and the
Akastor Group following the completion of the Demerger.
An agreement concerning ownership and licensing rights
to intellectual property and know-how as well as several
bilateral license agreements between new Aker Solutions
and Akastor entities based on the principles and allocation
of technology set out in the technology Agreement.
Agreements for the provision of shared services from
Frontica Business Solutions to members of the new Aker
Solutions Group as well as agreements for real estate and
lease agreements from Akastor Real estate and Frontica
Business Solutions to members of the new Aker Solutions
Group. the amount charged for these services are noK 4.0
billion (noK 3.8 billion in 2013).
An agreement for provisioning of transitional services not
covered by the Frontica Agreements by the Akastor Group
to the new Aker Solutions Group.
Various agreements addressing commercial separation
issues between members of the new Aker Solutions Group
and the Akastor Group, for example in relation to joint and
shared initiatives, on-going, committed or contemplated
projects, non-project specific cooperation and shared frame
agreements as well as disputes. these agreements include
an agreement between entities within the Subsea reporting
segment of the new Aker Solutions Group and entities within
the Fjords processing business unit of the Akastor Group
regarding development of certain process technologies and
an agreement between Subsea and MHWirth regarding the
use and development of well control technologies.
Guarantee obligations: If an obligation that arose prior to the
completion of the demerger is not satisfied by the party to
which the obligation has been allocated under the demerger
plan, be it Akastor or new Aker Solutions, the other party
will have secondary joint liability for such obligation. this
statutory liability is unlimited in time, but is limited in amount
to the net value allocated to the non-defaulting party in the
demerger. A guarantee commission will only be charged in
the event that a guarantee cannot be effectively transferred
or novated to new Aker Solutions.
Kvaerner
Fornebuporten AS
been included in the table above for the period until the demerger of Aker
power to govern the financial and operating policies so as to obtain
on January 30, 2015, Akastor entered into a long-term lease agreement
Solutions took place, as this building is leased by Aker Solutions.
benefits from the activities in this entity.
2014). the cost related to the lease agreement for Hinna park Invest AS has
ownership does not constitute control since Akastor does not have the
with Fornebuporten AS starting August 31, 2015 for headquarter offices
at Fornebu. the duration of the contract is 10 years, with two additional
five-year options.
Aker ASA
Other related parties
Aker Pensjonskasse AS
Grants to employee representative’s collective fund
Aker ASA has signed an agreement with employee representatives
Aker pensjonskasse was established by Aker ASA to manage the
that regulate use of grants from Akastor ASA for activities related to
retirement plan for employees and retirees in Akastor as well as related
professional development. the grant in 2014 was noK 355 000 (noK
Akastor is sponsoring employers of the uS pension plan Kvaerner
Aker companies. Akastor holds 93.4 percent of the paid-in capital in
665 000 in 2013).
Consolidated Retirement plan. the principal sponsor for the plan is
Kvaerner u.S. Inc, a subsidiary of tH Global plc. Aker has provided a
guarantee to the plan in the event that Akastor becomes liable for more
than one third of the underfunded element of the plan.
note 36 | management remunerations
Board of directors
Aker Ship Lease 1 AS (Ocean Yield)
the board of directors were elected for two years at the extraordinary
the fees in the table below represent what is recognized as expenses in
In 2009 Aker Ship lease 1 AS and AKoFS offshore entered into a 10 year
General Meeting 12 August 2014. the board of directors did not receive
the income statement based on assumptions about fees to be approved
bareboat charter contract for vessel Aker Wayfarer. In September 2014
any other fees than those listed in the table below in 2014 or 2013,
at the general assembly in 2014 for 2013 rather than what has been paid
AKoFS offshore was awarded a five year contract with petrobras to provide
except for employee representatives who had market based salaries. the
in the year.
subsea intervention services offshore in Brazil for the Aker Wayfarer vessel
members of the board of directors have no agreements that entitle them
with a start in Q4 2016 with a five-year option extension. the vessel will be
to any extraordinary remuneration.
converted to become a deepwater subsea equipment support vessel. the
vessel contract with Aker Shiplease 1 AS was renegotiated to include an
extension of current bareboat contract by 7 years, financing of the topside
and subsea equipment, and new purchase options on 3 different dates. As
a result of this re-negotiation, the vessel contract is recognized as a finance
lease and a lease obligation of noK 1 500 million was recognized in the
accounts, of which noK 210 million is presented as current, representing
the yearly lease payment to Aker Ship lease 1 AS. the non-current part
of the lease obligation is reduced by the remaining prepayment made in
2009 (reclassified from non-current operating assets). noK 900 million
was recognized as finance lease in property, plant and equipments and an
additional noK 600 million was recognized in other non-current assets
and represents the capex obligation in the contract.
Det norske oljeselskap ASA
new Aker Solutions (discontinued operations in Akastor group) delivers
installation and maintenance services to Det norske oljeselskap at
Alvheim, Bøyla and Vilje fields.
Intellectual Property Holding AS
new Aker Solutions (discontinued operations in Akastor group) has an
2014
Amounts in NOK
Øyvind eriksen
lone Fønss Schrøder
Kjell Inge Røkke
Kathryn Baker
Sarah Ryan1)
Jannicke Sommer-ekelund
Stig Faraas
Asbjørn Michailoff pettersen
Anne Drinkwater1)
Atle teigland
Åsmund Knutsen
Arild Håvik
Hilde Karlsen
Stuart Ferguson1)
Koosum parsotam Kalyan1)
Board
meeting
attendance
Aker solutions
extraordinary
board meeting
attendance
Aker solutions
Board Risk
Commitee
Aker
solutions
Audit
Committee
Aker
solutions
7 of 7
7 of 7
6 of 7
2 of 2
2 of 2
1 of 2
7 of 7
1 of 2
Board
fees Aker
solutions
3 000 000
63 750
255 000
255 000
-
255 000
Board
meeting
attendance
Akastor
Audit
Committee
Akastor
Board
fees
Akastor
3 of 3
2 of 3
3 of 3
3 of 3
3 of 3
3 of 3
3 of 3
3 of 3
300 000
38 750
85 000
85 000
21 250
85 000
85 000
85 000
85 000
21 250
85 000
7 of 7
6 of 7
7 of 7
5 of 7
5 of 7
7 of 7
7 of 7
2 of 2
2 of 2
2 of 2
2 of 2
2 of 2
2 of 2
2 of 2
15 000
116 250
255 000
63 750
127 500
15 000
26 250
15 000
127 500
127 500
127 500
330 000
255 000
agreement with Intellectual property Holding which holds all rights, titles and
Total
71 250
243 750
5 115 000
81 250
895 000
interests in and to registered trademarks and domain names containing “Aker”.
Related party transactions with joint ventures
DOF Deepwater AS
A loan of noK 84 million (noK 83 million in 2013) is given to the jointly
controlled entity DoF Deepwater (nIBoR 12 months + 1.5 percent).
1) Board fees in 2014 and 2013 includes an allowance of NOK 12 500 per meeting per physical attendance for board members residing outside the
Nordic countries.
Frontica is a supplier of services to Kvaerner (shared services, recruitment
Akastor ASA has issued financial guarantees in favor of financial
and supply of technical and project administrative personnel). the amount
institutions related to financing of the five vessels in Aker DoF Deepwater,
charged for these services are noK 392 million (noK 295 million in 2013).
refer to note 18.
PRINT
2013
Amounts in NOK
Øyvind eriksen
Mikael lilius1)
lone Fønss Schrøder
Kjell Inge Røkke
Anne Drinkwater1)
Sarah Ryan1)
Atle teigland
Åsmund Knutsen
Arild Håvik
Hilde Karlsen
Stuart Ferguson1)
Koosum parsotam Kalyan1)
nicoletta Giadrossi1)
Total
Board meeting
attendance
extraordinary board
meeting attendance
Board Risk
Committee
Audit Committee
Board fees
10 of 10
3 of 3
10 of 10
7 of 10
10 of 10
8 of 10
10 of 10
10 of 10
9 of 10
8 of 10
10 of 10
7 of 7
3 of 3
1 of 1
0 of 0
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
1 of 1
0 of 0
85 000
45 000
103 333
45 000
80 000
45 000
85 000
51 667
6 000 000
220 000
332 500
332 500
457 500
509 586
166 250
166 250
166 250
166 250
520 000
162 500
170 000
215 000
325 000
9 369 586
1) Board fees in 2014 and 2013 includes an allowance of NOK 12 500 per meeting per physical attendance for board members residing outside the
Nordic countries.
Benefits
According to policy in Aker, fees to directors employed in Aker companies
the executive management participate in the standard employee,
are paid to the Aker companies, not to the directors in person. therefore,
pension and insurance plan applicable to all employees in the company,
board fees for Øyvind eriksen were paid to Aker ASA. Board fee for Kjell
see description in note 27 employee benefits - pension for norwegian
Inge Røkke was paid to the Resource Group. the board fee for Øyvind
members. no executive personnel in Akastor have performance based
eriksen up until July 1, 2014 includes fee for his role as executive Chairman.
pension plans and there are no current loans, prepayments or other forms
The audit committee
of credit from the company to its executive management. no members of
the executive management are part of any option- or incentive programs
Akastor has an audit committee comprising three of the directors, which
other than what is described in this declaration.
held 12 meetings in 2014. As of December 31, 2014, the audit committee
comprises lone Fønss Schrøder (chairperson), Kathryn M. Baker and
As the Ceo resides in Ålesund, the Ceo is entitled to reimbursement for
Asbjørn Michailoff pettersen.
accommodation in oslo as well as travel expenses between Ålesund and oslo.
guidelines for remuneration to the members of the executive
Performance based remuneration
management of Akastor
In addition to the fixed compensation set out above, the executive
the main purpose of the executive remuneration is to encourage a strong
management participates in a variable pay program. the objective of the
and sustainable performance-based culture, which supports growth in
program is to incentivise the management to contribute to sound financial
shareholder value. the remuneration to the executive management in
results for the company as well as executing leadership in accordance
2014 was performed in accordance with the guidelines of the company.
with the company’s values and business ethics. the variable pay program
the remuneration to the executive management shall be recommended
potential is maximised to 2/3 of the annual base salary.
by the Ceo and approved by the board of directors of Akastor ASA on an
annual basis. the same principles for executive wage settlement will be
the payments under the variable pay program are determined based on
applied in 2015.
three components with equal weight:
As of 31 December 2014, the executive management of Akastor comprises
the company’s Ceo, Frank o. Reite, CFo, leif H. Borge, and Investment
Director, Karl erik Kjelstad. the company practice standard employment
contracts and standard terms and conditions regarding notice period and
Development of Akastor ASA’s share price
Delivery of certain key financial targets for Akastor
Delivery of personal performance objectives during the year
severance pay for the Akastor management. the Ceo has a three months’
For the Ceo, payments under the variable pay program are determined
notice period as a part of his employment contract. the CFo and the
based on development of Akastor ASA’s share price alone. Since the
Investment Director both have six months’ notice periods.
variable pay program is partly linked to the development of the Akastor
ASA share price, it requires approval by the general meeting and the
Compensation to the executive management has a fixed element which
guidelines will thereafter be binding.
includes a base salary which pursuant to the company’s benchmarking is
competitive with other investment companies. In addition, the executive
the development of the company’s share price is an element of the
management have variable remuneration, as further described below. All
variable pay program as described above. the accrual related to the future
variable pay shall be subject to a cap.
share based payments of the variable pay is estimated on the basis of the
share price at year-end. the accrual consists of variable pay programs for
the three preceding years.
Further, the executive management may be offered an additional
Remuneration to members of the executive management
variable pay arrangements going forward which differs from the ordinary
the remuneration of the executive management for 2014 and 2013 is
variable pay program described above. the variable pay arrangements
shown in the table below. the salary figures for the remuneration for the
offered to the executive management may in its entirety be linked to the
executive management before the split of the company represents what
development of the company’s share price. the executive management
is paid out in the period rather than what is expensed in the year, except
may from time to time be granted a discretionary variable pay. there was
for leif Hejø Borge and Karl erik Kjelstad who continued in Akastor’s
no discretionary pay expense in 2013 and 2014.
executive management. For the executive management of Akastor the
salary figures represent what has been expensed in the year.
2014
Amounts in NOK
job title
Period Base salary
Variable
pay2)
Other
benefits3,4)
Total taxable
remuneration
earned/cost to
company5)
Pension benefit
Akastor executive management
Frank ove Reite
leif Hejø Borge1,6)
Karl erik Kjelstad6)
Ceo
CFo
Investment director
Aker solutions executive management
Head of Subsea
Alan Brunnen
Head of Drilling technologies
Roy Dyrseth
Head of engineering
Valborg lundegaard
Head of process Systems
David Merle
Head of umbilicals
tom Munkejord
Head of Maintenance, Modifications
tore Sjursen
Åsmund Bøe
nicoletta Giadrossi
Sissel Anne lindland
Mark Riding
per Harald Kongelf
luis Araujo
erik Wiik
Total
and operations
Chief technology officer
Head of operations
Chief HR officer
Chief Strategic Marketing
Regional president of norway
Regional president of Brazil
Regional president of north America
2013
Akastor executive management
leif Hejø Borge1,6 )
Karl erik Kjelstad6)
president & CFo
Head of oilfield Services & Marine Assets
Aker solutions executive management
Head of Subsea
Alan Brunnen
Head of Drilling technologies
thor Arne Håverstad
Head of Drilling technologies
Roy Dyrseth
Head of engineering
Valborg lundegaard
Head of process Systems
David Merle
Head of umbilicals
tove Røskaft
Head of umbilicals
tom Munkejord
Head of Maintenance, Modifications
tore Sjursen
Wolfgang puennel
Rolf leknes
leif Haukom
Åsmund Bøe
nicoletta Giadrossi
Sissel Anne lindland
Mark Riding
and operations
Head of Well Intervention Services
Head of Well Intervention Services
Head of Mooring and loading
Systems
Chief technology officer
Head of operations
Chief HR officer
Chief Strategic Marketing
Chief operating officer and Regional
Jul 1 - Dec 31
Jan 1 - Dec 31
Jan 1 - Dec 31
2 287 385
3 995 668
3 750 771
-
1 024 972
925 526
4 169
48 168
49 601
2 291 554
5 068 808
4 725 898
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
Jan 1 - Jun 30
1 840 190
1 086 784
1 197 676
1 217 077
1 232 325
1 302 201
1 282 952
901 983
922 298
1 188 966
1 465 491
2 049 992
1 292 795
1 019 375
116 604
1 589 701
1 135 174
2 175 895
1 885 034
1 194 941
3 284 229
878 926
967 929
1 525 179
2 010 359
572 217
4 847
28 186
29 196
433 319
24 890
25 178
210 315
79 044
27 024
408 554
28 409
194 611
165 948
2 864 412
1 231 574
2 816 573
2 785 570
3 433 110
3 212 413
2 688 208
4 265 255
1 828 248
2 565 449
3 019 079
4 254 961
2 030 960
40 970
154 558
141 551
251 631
62 388
126 583
51 750
90 989
104 201
62 081
64 206
64 042
79 185
115 201
64 411
149 145
27 014 553
20 306 061
1 761 458
49 082 073
1 622 892
Jan 1 - Dec 31
Jan 1 - Dec 31
3 825 418
3 159 676
1 112 244
1 290 210
57 482
38 606
4 995 144
4 488 492
138 648
127 831
Jan 1 - Dec 31
Jan 1 - Jun 30
Jul 1 - Dec 31
Jan 1 - Dec 31
May 7 - Dec 31
Jan 1 - Mar 31
Apr 1 - Dec 31
2 464 019
1 319 012
1 147 884
2 524 034
2 278 350
413 819
1 885 338
1 485 320
1 764 727
-
2 443 791
1 065 425
183 166
447 575
8 423
53 137
6 007 105
40 115
1 441 653
59 826
11 883
3 957 762
3 136 876
7 154 989
5 007 940
4 785 428
656 811
2 344 796
Jan 1 - Dec 31
Jan 1 - Jun 30
Jul 1 - Dec 31
2 757 219
1 631 352
1 092 336
3 000 610
312 730
-
27 636
6 667
9 105
5 785 465
1 950 749
1 101 441
Jan 1 - Dec 31
Jan 1 - Dec 31
Apr 1 - Dec 31
Jan 1 - Dec 31
Jan 1 - Dec 31
1 835 575
2 549 498
2 773 738
1 903 279
2 354 571
1 400 147
1 373 819
558 003
1 349 513
519 076
48 023
1 332 430
89 252
49 196
814 316
3 283 745
5 255 747
3 420 993
3 301 988
3 687 963
352 421
189 847
59 220
235 025
90 237
56 983
72 499
196 888
83 391
100 966
354 087
109 105
312 163
113 068
144 270
211 140
302 827
260 319
per Harald Kongelf
luis Araujo
erik Wiik
Manager of norway
Regional Manager of Brazil
Regional manager of north America
Jan 1 - Dec 31
Jan 1 - Dec 31
Jan 1 - Dec 31
3 025 421
3 174 175
2 488 654
1 884 454
3 414 686
2 405 076
39 481
476 339
147 560
4 949 356
7 065 200
5 041 290
Total
44 603 368
26 010 572
10 758 235
81 372 175
3 510 935
1) Includes accrued holiday allowances and temporary allowance for additional job responsibility for Leif Hejø Borge of NOK 500 000 in 2014 (NOK 1 000 000 in 2013)
2) Based on variable pay paid out during the year unless othervise stated.
3) Other benefits include insurance agreements, such as membership in the standard employee scheme and an additional executive group life and disability insurance with a maximum cover
of NOK 4 036 340. The amount also includes housing costs, international salary compensation, children schooling costs and severance pay (see footnote 4). Sign on fee of NOK 6 000 000
is included for Roy Dyrseth in 2013.
4) Other benefits includes salary in notice period and severance pay for management where employment is terminated.
5) Pension benefits include the standard employee pension scheme, a pension compensation scheme (for transfer from benefit to contribution scheme), a disability pension scheme and
certain management pension rights related to the wound up schemes and early retirement schemes.
6) Leif Hejø Borge was President and CFO in Aker Solutions in 2013 and first half 2014 (before the demerger). Karl-Erik Kjelstad was Head of Oilfield and Marine Assets in Aker Solutions in
2013 and first half 2014 (before the demerger). Both are as of December 31, 2014 part of the EMT group in Akastor. The amounts in the table are for the full year 2014 and 2013.
PRINT
Share purchase program for Akastor’s executive management team
Furthermore, the board resolved that the Ceo could purchase up to
In 2013 profits from discontinued operations were overstated by noK
in previous years, primarily before 2013. the errors have been corrected
the executive management were invited to participate in Akastor’s
100 000 additional treasury shares in 2014 at the price of 18.72 noK
126 million, mainly related to too high revenue accruals. In addition, a
by restating each of the affected financial statement line items for the
share purchase programs in 2014. the ordinary employee share
per share (equivalent with the average share price for the first 20 days
subsidiary in continuing operations has overstated book value of inventory
prior period, as follows:
note 37 | Correction of errors
purchase program gave the executive management the opportunity to
of trading following completion of the demerger of the Aker Solutions
purchase shares of up to noK 60 000 with a reduction of 25 percent
group on 29 September 2014, less a discount of 20 percent).
in addition to noK 1 500 (funded by an employer loan, to be repaid by
salary deductions over a period of 12 months), refer to note 8 Salaries,
All shares purchased under the programs described above are subject
wages and social security costs.
to a three year lock-up period under which the acquired shares may not
be sold or otherwise disposed of.
Akastor also had a separate manager share program, with a potential to
purchase shares for an amount equal to 25 percent of base salary with
the executive management may also in 2015 be offered to take part
a reduction of 25 percent on the share price. In terms of the executive
in separate share purchase programs, such as programs with a higher
management, the board resolved in 2014 that the Ceo could purchase
maximum purchase amount that for other managers.
up to 100 000 treasury shares yearly from the company under the
manager share purchase program described above. the CFo and
Directors’ and executive management’s shareholding
Investment Director were authorized to buy up to 100 000 shares each
the following number of shares were owned by the directors and the
under the manager share purchase program for 2014.
members of the executive management (and their related parties) as of
December 31:
Frank ove Reite
leif Hejø Borge
Karl erik Kjelstad
lone Fønss Schrøder
Kathryn Baker
Sarah Ryan
Jannicke Sommer-ekelund
Stig Faraas
Asbjørn Michailoff pettersen
job title
Ceo
CFo
Investment Director
Director
Director
Director
Director
Director
Director
2014
200 000
142 775
123 074
4 400
-
-
252
-
3 050
20131)
-
39 725
23 074
4 400
-
-
252
-
-
the overview includes only direct ownership of Akastor shares and does not include Øyvind eriksen and Kjell Inge Røkke’s indirect ownership through
their ownership in Aker ASA.
Impact on consolidated income statement - increase (decrease) in profit
Amounts in NOK million
Materials, goods and services
Income tax expense
Profit from continuing operations
profit from discontinued operations (net of income tax)
Profit from the period
Profit for the period attributable to:
equity holders of the parent company
non-controlling interests
Profit from the period
earnings per share (NOK)
Basic earnings per share
Diluted earnings per share
earnings per share continuing operations (NOK)
Basic earnings per share
Diluted earnings per share
Impact on consolidated statement of financial position - increase (decrease) in equity
Amounts in NOK million
Assets
Inventories
Current interest-bearing receivables
Assets classified as held for sale
Total assets
equity and liabilities
Equity
Retained earnings
Liabilities
Deferred tax liabilities
liabilities classified as held for sale
Total liabilities and equity
Dec 31,
2013
(73)
(73)
(70)
(216)
(179)
(20)
(17)
(216)
2013
(22)
6
(16)
(126)
(142)
(142)
-
(142)
(0.52)
(0.52)
(0.06)
(0.06)
Dec 31,
2012
(51)
-
-
(51)
(37)
(14)
-
(51)
the error did not have an impact on the group’s statement of other comprehensive income or operating, investing and financing cash flows.
note 38 | subsequent events
Purchase of AKOFS Seafarer
Restructuring
the purchase of AKoFS Seafarer was executed in February 2015.
A process in MHWirth has been initiated in February 2015, with an ambition
Following the transaction, the vessel prevously named Skandi Aker has
to reduce the global work force to give a reduction of approximately
been re-named AKoFS Seafarer. the purchase price was uSD 122.5
500-750 people, both own employees and hired-ins. this will happen
million, all financed with new bank debt.
through downsizing and attrition. the restructuring cost in first half 2015
is estimated to be noK 100 million.
PRINT
07. FInAnCIAlS AnD noteS
AkAstor AsA
Akastor ASA | Income statement
Akastor ASA | Statement of financial position
Akastor ASA | Statement of cash flow
note 1 | Accounting principles
note 2 | operating revenue and expenses
note 3 | net financial items
note 4 | tax
note 5 | Investments
note 6 | Shareholders’ equity
note 7 | Receivables and borrowings from group companies
note 8 | other non-current interest-bearing receivables
note 9 | Borrowings
note 10 | Guarantees
note 11 | Financial risk management and financial instruments
note 12 | Related parties
note 13 | Shareholders
87
88
89
90
91
91
92
92
93
93
94
94
96
97
97
98
PRINT
Akastor AsA | income statement
for the year ended December 31
Amounts in NOK million
operating revenue
operating expenses
Operating profit (loss)
Income from investments in subsidiaries
net financial items
Profit (loss) before tax
Income tax
Profit (loss) for the period
Profit (loss) for the period distributed as follows:
proposed dividends
other equity
Profit (loss) for the period
Note
2014
2013
Amounts in NOK million
Note
Dec 31, 2014
Dec 31, 2013
Akastor AsA | statement of financial position
for the year ended December 31
2
2
5
3
4
27
(109)
(82)
-
(38)
(120)
40
(80)
-
(80)
(80)
48
(131)
(83)
2 896
13
2 826
1
2 827
1 115
1 712
2 827
Assets
Deferred tax asset
Investments
non-current interest-bearing receivables from group companies
other non-current interest-bearing receivables
Total non-current assets
Current interest-bearing receivables from group companies
non-interest bearing receivables from group companies
Financial assets
other current receivables
Cash in cash pool system
Total current assets
Total assets
equity and liabilities
Issued capital
treasury shares
Share premium reserve
other paid in capital
other equity
Total equity
non-current borrowings
Total non-current liabilities
Current borrowings
Current borrowings from group companies
provision for dividend
non interest-bearing liabilities from group companies
Financial liabilities
other current liabilities
Total current liabilities
Total liabilities
Total liabilities and equity
4
5
7
8
7
7
11
7
6
9
9
7
6
7
11
39
4 963
1 289
85
6 376
4 743
14
2 408
32
499
7 696
14 072
162
(2)
2 000
2 003
537
4 700
3 472
3 472
2
3 290
-
21
2 431
156
5 900
9 372
14 072
13
15 299
2 345
85
17 742
5 393
4 768
1 187
-
1 023
12 371
30 113
455
(3)
2 000
2 442
4 109
9 003
6 366
6 366
3 874
8 435
1 115
38
1 183
99
14 744
21 110
30 113
oslo, march 13, 2015 | board of Directors of Akastor AsA
Øyvind eriksen | Chairman
lone Fønns Schrøder
Kjell Inge Røkke
Kathryn Moore Baker
Sarah elizabeth Ryan
Jannicke Sommer-ekelund
Stig Willy Faraas
Asbjørn Michailoff pettersen
Frank ove Reite | Ceo
PRINT
Akastor AsA | statement of cash flow
for the year ended December 31
Amounts in NOK million
Cash flows from operating activities
profit (loss) before tax
Changes in other net operating assets
Net cash from operating activities
Cash flows from investing activities
payment related to increase in interest-bearing receivables
Net cash from investing activities
Cash flows from financing activities
Demerger consideration
proceeds from borrowings
Repayment of borrowings
Changes in borrowings from group companies
Changes in borrowings to group companies
proceeds from employees share purchase program
Repurchase of treasury shares
Dividends to shareholders
Net cash from financing activities
Net increase (decrease) in cash and bank deposits
Cash in cash pool system at the beginning of the period
Demerger to new Aker Solutions
Cash in cash pool system at the end of the period1)
1) Unused credit facilities amounted to NOK 1 billion as of 31 December 2014 (NOK 4.4 billion in 2013).
Note
2014
2013
presented in conformity with norwegian legislations and norwegian
Cash in cash pool system is the parent company’s cash as well as net
Akastor ASA is a company domiciled in norway. the accounts are
Cash in cash pool system
note 1 | Accounting principles
(80)
(468)
(548)
(29)
(29)
3 000
3 500
(7 242)
6 390
(876)
33
(60)
(1 115)
3 630
3 053
1 023
(3 577)
499
2 827
(2 573)
254
(25)
(25)
-
3 649
(231)
7 600
(9 812)
183
(50)
(1 082)
257
486
536
-
1 023
9
6
6
6
7
generally accepted accounting principles.
deposits from subsidiaries in the group cash pooling systems owned by
the parent company. Correspondingly, the parent company’s current debt
on September 26, 2014, the demerger of Akastor was completed and
to group companies will include the same net deposits in the group’s cash
Aker Solutions ASA (“new Aker Solutions”), a subsidiary of Akastor ASA
pooling system.
established for the purposes of the demerger, was listed on the oslo
Stock exchange. At the same time Aker Solutions ASA changed name
the cash flow statement is prepared according to the indirect method.
to Akastor ASA.
Share capital
the demerger entailed a reorganization without change in ownership.
Costs for purchase of own shares including transaction costs are accounted
For accounting purpose, the continuity method
is applied, cf.
for directly against equity. Sale of own shares are performed according
publication “Demerger” of the norwegian Accounting Standards Board.
to stock-exchange quotations at the time of award and accounted for as
Consequently, the book value of assets and liabilities transferred upon the
increase in equity.
demerger is recognized by Aker Solutions ASA. the effective date of the
demerger is January 1, 2014, hence all transactions during 2014 related
Foreign currency
to assets, rights, obligations and liabilities that have been transferred to
transactions in foreign currencies are translated at the exchange rate at
Aker Solutions ASA in the demerger have for accounting purposes been
the date of the transaction. Monetary assets and liabilities denominated
allocated to Aker Solutions ASA in 2014.
in foreign currencies at the balance sheet date are translated to the
Revenue recognition
Revenue is recognized when the service is delivered. operating revenue
functional currency at the exchange rate on that date. Foreign exchange
differences arising on translation are recognized in the income statement.
is comprised mainly of income from parent company guarantees (pCG).
Derivative financial instruments
the pCGs are invoiced when the guarantee is issued and the income is
Subsidiaries have entered into financial derivative agreements with
distributed over the lifetime of the guarantee. Insurance commissions are
the parent company to hedge their foreign exchange exposure. the
recognized the year the insurance is established.
parent company does not engage in hedging activities other than as a
counterpart in financial derivative agreements with the subsidiaries. In the
Investment in subsidiaries and associates
parent company, derivatives from external banks are used to mitigate the
Investments in subsidiaries and associates are accounted for using the
foreign exchange exposure from the financial derivative agreements with
cost method in the parent company accounts. the investments are valued
the subsidiaries.
at cost less impairment losses. Write-downs to fair value are recognized
when the impairment is considered not to be temporary and reversed if
Hedge accounting is performed at group level. Refer to note 3 in the
the basis for the write-down is no longer present.
Akastor consolidated accounts for description of hedge accounting at
Dividends and other distributions are recognized as income the same
group level.
year as they are allocated from the subsidiary. If the dividend exceeds
All financial assets and liabilities related to foreign exchange contracts are
accumulated profits in the subsidiary after the acquisition, the payment is
revalued at fair value in respect to exchange rate movements each period.
treated as a reduction of the carrying value of the investment.
Classification and valuation of balance sheet items
Akastor also enters into interest swap agreements. the market value of
Current assets and current liabilities include items due within one year or
interest rate swaps classified as cash flow hedges (where the interest rate
items that are part of the operating cycle. the rest is classified as non-
of the debt is switched from floating- to fixed interest rate) is accounted
In order to reduce the interest rate risk related to external borrowings,
current assets/non-current debt.
for directly against equity while the corresponding interest payments are
reflected in the profit and loss to neutralise potential changes in interest
Current assets are valued at the lowest of cost and fair value. Current debt
levels.
is valued at nominal value at the time of recognition.
non-current debts are initially valued at transaction value less attribute
fixed to floating interest rate) is accounted for through profit and loss. At
transaction cost. Subsequent to initial recognition, interest-bearing long-
the same time a corresponding adjustment to the carrying value of the
the value of interest rate swaps classified as fair value hedges (from
term debt is stated at amortized cost with any difference between cost
borrowing accounted for.
and redemption value being recognized in the income statement over the
period of the borrowing on an effective interest basis.
Tax
trade receivables and other receivables are recognized at nominal
in deferred tax. Deferred tax is calculated as 27 percent of temporary
value less provision for expected losses. provision for expected losses is
differences between accounting and tax values as well as any tax losses
tax expense in the income statement comprises current tax and changes
considered on an individual basis.
carry forward at the year end. net deferred tax assets are recognized
only to the extent it is probable that they will be utilized against future
taxable profits.
PRINT
note 2 | operating revenue and expenses
operating revenue comprises mainly noK 18 million in income from
management team. Group management and corporate staff are employed
parent company guarantees (noK 39 million in 2013) and noK 9 million in
by other Akastors companies and costs for their services as well as other
insurance commissions from Akastor companies (unchanged from 2013).
parent company costs are charged to Akastor ASA. Remuneration to
Income from parent company guarantees includes noK 8 million from
and shareholding of managing director Frank ove Reite, is described in
external companies (noK 9 million in 2013).
note 36 Management remunerations in the consolidated accounts.
there are no employees in Akastor ASA and hence no salary or pension
related costs and also no loan or guarantees related to the executive
note 4 | tax
Amounts in NOK million
Calculation of taxable income
Profit (loss) before tax
Group contribution without tax
Write down internal loan
permanent differences
Change in timing differences
Taxable income
Fees to KPMG
Amounts in NOK million
Audit
other assurance services1)
other non-audit services
Total
2014
2013
4
18
1
23
4
-
-
4
1) NOK 18 million relates to services provided related to the demerger of the group. The amount has been recharged to New Aker Solutions.
note 3 | net financial items
Amounts in NOK million
Interest income from group companies
Interest expense to group companies
Net interest group companies
Interest income from related parties
Net interest related parties
Interest income
Interest expense
Net interest external
loss on loans to group companies
other financial expense
Foreign exchange gain
Foreign exchange loss
Net other financial items
Net financial items
2014
255
(27)
228
5
5
27
(298)
(271)
-
(12)
324
(312)
-
(38)
2013
742
(23)
719
10
10
31
(693)
(662)
(68)
(3)
344
(327)
14
13
Positive and (negative) timing differences
unrealized gain(loss) on forward exchange contracts
Interest rate swaps
temporary differences
loss carry-forward
Basis for deferred tax
Deferred tax in income statement
Deferred tax in equity
Deferred tax asset
Tax expense
origination and reversal of temporary differences in income statement
payable tax
Withholding tax paid
Total tax in income statement
note 5 | investments
Amounts in NOK million
Akastor AS1)
AKoFS offshore AS2)
Total investments in subsidiaries
2014
2013
(120)
-
-
(32)
74
(78)
(23)
-
(40)
(82)
(145)
39
-
39
41
-
(1)
40
2 826
(2 896)
68
(6)
(1)
(9)
7
(44)
-
(9)
(46)
1
12
13
3
-
(2)
1
Registered
office
Fornebu, norway
oslo, norway
share
capital
1 004
482
Number of
shares held
Percentage owner
/voting share
1
10 378 306
100%
32.29%
2014
4 160
803
4 963
2013
14 496
803
15 299
1) The share capital of Akastor AS was decreased by NOK 2 496 million in 2014 as an effect of the demerger of the company.
2) The remaining 67.71 percent of the shares in AKOFS Offshore AS are held by Akastor AS. Accordingly, Akastor ASA owns 100 percent of the shares
through direct and indirect ownership. The company has changed name from AKOFS Oilfield Services AS in 2014.
Amounts in NOK million
Group contributions
Total income from investments in subsidiaries
2014
-
-
2013
2 896
2 896
PRINT
note 6 | shareholders’ equity
Amounts in NOK million
share
capital
Treasury
shares
share
premium
Other paid
in capital
Retained
earnings
equity as of january 1, 2013
Shares issued to employees through share program
Share buy back
profit (loss) for the period
proposed dividend
Cash flow hedge
equity as of December 31, 2013
Shares issued to employees through share program1)
Share buy back2)
Demerger of new Aker Solutions
profit (loss) for the period
equity as of December 31, 2014
455
-
-
-
-
-
455
-
-
(293)
-
162
(6)
4
(1)
-
-
-
(3)
1
(2)
2
-
(2)
2 000
2 442
2 260
-
-
-
-
-
-
-
-
-
-
179
(49)
2 827
(1 115)
7
-
-
-
-
-
-
32
(59)
(439)
(3 465)
(80)
537
2 000
2 003
2 000
2 442
4 109
9 003
Total
7 151
183
(50)
2 827
(1 115)
7
33
(61)
(4 195)
(80)
4 700
Akastor ASA is the owner of the cash pool system arrangements with
the cash pool systems had a net balance of noK 499 million per December
DnB, nordea and the Royal Bank of Scotland. the cash pool systems
31, 2014. this amount is reported in Akastor ASA’s accounts as short term
cover a majority of the group geographically and assure good control
borrowings from group companies and as cash in cash pool system.
and access to the group’s cash. participation in the cash pool is vested in
the Group policy and decided by each company’s board of directors and
Akastor ASA is the group’s central treasury function and enters into
confirmed by a statement of participation. the participants in the cash
borrowings and deposit agreements with group companies. Deposits
pool system are joint and severably liable and it is therefore important
and borrowings are peformed at market terms and are dependent of the
that Akastor as a group is financially viable and can repay deposits and
group companies’ credit rating and the duration of the borrowings.
carry out transactions. Any debit balance on a sub account can be set-off
against any credit balance. A debit balance does hence represent a claim
Akastor ASA has an obligation to fund Step oiltools B.V with an amount
on Akastor ASA and a credit balance a borrowing from Akastor ASA.
up to uSD 107 million (out of which uSD 90 million was drawn by end
of 2014). Any loans under this agreement shall be repaid no later than
December 31, 2017.
1) Akastor subsidiaries operate a share purchase program for employees. The subsidiaries purchase shares from Akastor ASA in order to settle
obligations to the employees under the schemes. During 2014 a total of 1 684 235 shares were sold under the program.
2) During 2014 a total of 2 705 000 treasury shares have been acquired in the market. The number of treasury shares held by end of 2014 were
2 976 376 and are held for the purpose of being used for future awards under the share purchase program for employees, as settlement in future
corporate acquisitions or for other purpose as decided by the board of directors.
note 8 | other non-current interest-bearing receivables
Amounts in NOK million
loan to DoF Deepwater AS
Stiftelsen Akastor Kompensasjonsordning
on September 26, 2014, the demerger of Akastor was completed, refer to
the share capital of Akastor ASA is divided into 274 000 000 shares
Total other non-current interest-bearing receivables
note 1. An allocation of the share capital was determined, after deducting the
with a nominal value of noK 0.592. the shares can be freely traded. An
value of Akastors treasury shares, such that 35 percent of the share capital
overview of the company’s largest shareholders is to be found in note 13
2014
2013
83
2
85
83
2
85
was allocated to Akastor and 65 percent was allocated to Aker Solutions
Shareholders.
giving a split ratio of 35:65 percent. Following the demerger Aker Solutions
ASA issued pro rata consideration shares to Akastors shareholders and was
listed on the oslo Stock exchange on September 29, 2014.
note 7 | receivables and borrowings from group companies
Amounts in NOK million
Group companies deposits in the cash pool system
Group companies borrowings in the cash pool system
Akastor ASA’s net borrowings in the cash pool system
Cash in cash pool system
Current interest-bearing receivables from group companies
non-current interest-bearing receivables from group companies
Current borrowings from group companies
Other net interest-bearing receivables from group companies
Current non interest-bearing receivables from group companies
Current non interest-bearing borrowings from group companies
Net non interest-bearing receivables from group companies
Total net receivables from group companies
All current receivables and borrowings are due within one year.
note 9 | borrowings
Contractual terms of group’s interest-bearing loans and borrowings which are measured at amortized cost. For more information about the group’s
exposure to interest rates, foreign currency and liquidity risk, see note 11 Financial risk management and financial instruments.
2014
Amounts in million
Currency
Nominal
currency
value
Carrying
amount
(NOK)
Interest
rate3)
fixed
interest
margin
Interest
coupon
Maturity
date
Interest terms
1.48%
1.60%
3.08% 03.06.19
IBoR + Margin2)
1.48%
1.40%
2.88% 03.06.17
IBoR 3M
+variable margin
Revolving credit facility (noK 2 000 million)
noK
1 000
noK
2 500
Total credit facility
term loan
Total term loan
Accrued interest
Total borrowings
Current borrowings
non-current borrowings
Total
987
987
2 485
2 485
2
3 472
2
3 472
3 474
2014
2 760
(280)
2013
6 503
(552)
(1 981)
(4 928)
499
1 023
4 743
1 289
5 393
2 345
(3 290)
(8 435)
2 742
(697)
14
(21)
(7)
3 234
4 768
(38)
4 730
5 056
PRINT
2013
Amounts in million
ISIn no 001050461.6
Nominal
currency
value
Carrying
amount
(NOK)
Interest
rate3)
fixed
interest
margin
Currency
Interest
coupon
Maturity
date
Interest terms
noK
1 913
1 812
8.70%
2.00%
10.70% 26.06.14
Fixed, annual
ISIn no 001050460.8
noK
187
187
1.65%
6.75%
8.40% 26.06.14
ISIn no 0010647431
noK
1 500
1 498
1.67%
4.25%
5.92% 06.06.17
ISIn no 0010661051
Total bonds1)
noK
1 000
Revolving credit facility (noK 6 000 million)
noK
1 650
1 002
4 499
1 636
1 636
1.68%
4.20%
5.88% 09.10.19
3.14%
0.00%
3.14% 01.06.16
IBoR + Margin2)
Floating, 3M+fix
margin
Floating, 3M+fix
margin
Floating, 3M+fix
margin
Total credit facility
term loan
term loan
term loan
Total term loan
Total borrowings
Current borrowings
non-current borrowings
Total
noK
750
755
1.70%
2.00%
3.70%
01.10.14
euR
270
2 257
0.29%
1.85%
2.14%
13.11.15
0.22%
1.50%
1.72% 13.05.14
euR
130
1 092
4 104
10 240
3 874
6 366
10 240
nIBoR 3M+fix
margin
IBoR 3M
+variable margin
IBoR 3M
+variable margin
1) The book value is calculated by reducing the nominal value of NOK 4 400 million by total issue costs related to the new financing of negative NOK
23 million. Accrued interest and issue costs related to the bonds are included by NOK 116 million . The book value of the bond with notional value of
NOK 1 913 million also includes the mark-to-market value of a fair value hedging interest rate swap of NOK 7 million.
2) The margin applicable to the facility is decided by a price grid based on the gearing ratio. Commitment fee is 40 percent of the margin (35 percent
in 2013).
3) The interest costs are calculated using either the last fixing rate known by year end (plus applicable margin) or the contractual fixed rate (when
fixed rate debt).
Bank debt
All facilities are provided by a bank syndicate consisting of high quality
the financial covenants are based on two sets of key financial ratios; a
nordic and international banks. the terms and conditions include
gearing ratio based on net debt/equity and an interest coverage ratio
restrictions which are customary for this kind of facility, including inter alia
based on eBItDA/net finance costs. the financial covenants are tested on
negative pledge provisions and restrictions on acquisitions, disposals and
a quarterly basis. the margin applicable to the facility is based on a price
mergers. there are also certain changes of control provisions included.
grid determined by the gearing ratio and level of utilization. See note 11
the facility includes no dividend restrictions and is unsecured.
Financial risk management and exposures for more information regarding
capital risk in the group.
Financial liabilities and the period in which they mature
2014
Amounts in NOK million
Total credit facility2)
Term loan
Accrued interest
Total borrowings
Carrying
amount
Total undiscounted
cash flow1)
6 months
and less
6-12 months
1-2 years
2-5 years
987
2 485
2
3 474
1 139
2 680
2
1 015
36
2
3 821
1 051
15
36
-
51
31
72
-
103
77
2 536
-
2 613
More than
5 years
-
-
-
-
2013
Amounts in NOK million
ISIn no 001050461.6
ISIn no 001050460.8
ISIn no 0010647431
ISIn no 0010661051
total bond
total credit facility2)
term loan
Carrying
amount
Total undiscounted
cash flow1)
6-12 months
1-2 years
2-5 years
6 months
and less
1 805
187
44
29
2 065
1 676
1 133
4 874
1 805
187
1 811
1 338
5 141
1 780
4 205
11 126
-
-
44
29
73
26
774
873
-
-
89
59
148
52
2 298
2 498
More than
5 years
-
-
-
1 044
1 044
-
-
-
-
1 633
176
1 809
26
-
1 835
1 044
1 812
187
1 498
1 002
4 499
1 636
4 104
total borrowings
10 240
1) The interest costs are calculated using either the last fixing rate known by year end (plus applicable margin) or the contractual fixed rate (when fixed
rate debt).
2) NOK 1 000 million (NOK 1 650 million in 2013) corresponds to the repayment of the drawn portion of the available NOK 2 000 million (NOK
6 000 million in 2013)
note 10 | Guarantees
Amounts in NOK million
parent company guarantees to group companies1)
Guarantees on behalf of Kvaerner companies4)
Guarantees on behalf of companies sold3)
Counter guarantees for bank/surety bonds of Kvaerner companies
Counter guarantees for bank/surety bonds sold
Counter guarantees for bank/surety bonds2)
Total guarantee liabilities
Maturity of guarantee liabilities:
6 months and less
6-12 months
1-2 years
2-5 years
5 + years
2014
10 846
25 241
425
-
-
3 959
40 471
14 213
413
18 041
7 347
457
2013
50 215
25 192
563
4
4
7 026
83 004
3 031
4 013
15 105
55 467
5 388
1) Parent Company Guarantees to support subsidiaries in contractual obligations towards clients.
2) Bank guarantees and surety bonds are issued on behalf of Akastor subsidiaries, and counter indemnified by Akastor ASA.
3) Guarantees to companies sold, Aker Solutions E&C Ltd, McGregor Pusnes AS (former Aker Pusnes AS) and Altus Invervention Limited (former Aker
Qserv Ltd).
4) Kvaerner is related party to Akastor group. NOK 9.6 billion have been released during February 2015. Guarantees of NOK 8.7 billion reported in
Akastor AS in 2013 has been moved to Akastor ASA.
Guarantee obligations on behalf of New Aker Solutions
will have secondary joint liability for such obligation. this statutory liability
If an obligation that arose prior to the completion of the demerger is not
is unlimited in time, but is limited in amount to the net value allocated to
satisfied by the party to which the obligation has been allocated under the
the non-defaulting party in the demerger. the guarantees listed above do
demerger plan, be it Akastor or new Aker Solutions, then the other party
not include obligations on behalf of new Aker Solutions.
PRINT
note 11 | financial risk management and financial instruments
note 13 | shareholders
2014
2013
Assets
liabilities
Assets
liabilities
2014
Company
Note
Nominee
Number of shares held
Ownership
shareholders with more than 1 percent shareholding
Currency risk and balance sheet hedging
Amounts in NOK million
Forward exchange contracts with group companies
Forward exchange contracts with external counterparts
Total
1 754
654
2 408
(850)
(1 581)
(2 431)
660
527
1 187
(679)
(504)
(1 183)
Aksastor ASA have entered into forward exchange contracts with
that are hedged directly represents about 80 percent of the total
subsidiaries in 2014 with a total value of about noK 66 billion. large
exposure but only a small number of the total contracts. these contracts
contracts are hedged back-to-back with external banks, while minor
have no significant
impact on Akastor ASA’s
income statement.
contracts are hedged based on internal matching principles. Contracts
All instruments are booked at fair value as per December 31.
Interest rate risk
Amounts in NOK million
Interest rate swaps - cash flow and fair value hedge (against equity)
Interest rate swaps - cash flow hedge (against equity)
Total
2014
2013
Assets
liabilities
Assets
liabilities
-
-
-
-
-
-
37
-
37
-
(44)
(44)
Interest rate swaps are applied to achieve the internal policy that 30-
subsidiaries and deposits with external banks. loss provisions are made
50 percent of the company’s gross external borrowing shall be at fixed
in situations of negative equity and where the company is not expected
interest rates, with duration matching the remaining duration of the
to be able to fulfill it’s loan obligations from future earnings. external
borrowing. Interest terms on the borrowing are described in note 9
deposits and forward contracts are done according to a list of approved
Borrowings. the credit facility (nominal noK 2 billion) was drawn up to
banks and primarily with banks were the company also has a borrowing
noK 1 billion by end of the year (not hedged).
relation. the existence of netting agreements between Akastor ASA and
the relations banks reduces the credit risk.
Hedge accounting is applied using the cash flow hedge accounting model
which means that gains and losses on interest rate swaps from floating to
Liquidity risk
fixed interest rates are recognized in the hedging reserve in equity. As of
liquidity risk relates to the risk that the company will not be able to meet
December 31, 2014 Akastor had no interest swaps.
its debt and guarantee obligations and is managed through maintaining
Credit risk
sufficient cash and available credit facilities. the development in the
group’s and thereby Akastor ASA available liquidity is continuously
Credit risk relates to loans to subsidiaries and associated companies,
monitored through weekly and monthly cash forecasts, annual budgets
overdraft in the group cash pool, hedging contracts, guarantees to
and long term planning.
note 12 | related parties
transactions with subsidiaries and related parties are described on a line
Akastor ASA’s agreement with Aker ASA regarding pension obligation in
by line basis in the following notes:
uS is described in the consolidated accounts note 34 Related parties.
Transactions
other services
Financial items
Investments
Cash pool
Receivables and borrowings
Guarantees
Foreign exchange contracts
Info in note
All transactions with related parties are performed at market rates and in
accordance with the arm’s length principle.
note 2
note 3
note 5
note 7
note 7, 8
note 10
note 11
Aker Kværner Holding AS
euroclear Bank S.A./n.V.('BA')
Goldman Sachs & Co
Aker ASA
State Street Bank & trust Co.
JpMorgan Clearing Corp.
Clearstream Banking S.A.
Folketrygdfondet
State Street Bank & trust Co.
SIX SIS AG
oDIn norge
Akastor ASA
2013
Company
Aker Kværner Holding AS
Aker ASA
Folketrygdfondet
Danske Bank A/S
State Street Bank & trust Co.
Clearstream Banking S.A.
Goldman Sachs & Co
State Street Bank & trust Co.
SIX SIS AG
the Bank of new York Mellon SA
the Bank of new York Mellon
RBC Investor Services Bank
JpMorgan Chase Bank
State Street Bank & trust Co.
X
X
X
X
X
X
X
110 333 615
29 298 800
23 800 654
17 331 762
15 251 004
5 614 319
5 369 997
3 992 444
3 774 066
3 697 815
3 333 506
2 976 376
40.27%
10.69%
8.69%
6.33%
5.57%
2.05%
1.96%
1.46%
1.38%
1.35%
1.22%
1.09%
6
Note
Nominee
Number of shares held
Ownership
110 333 615
16 440 000
9 642 797
6 811 034
5 715 568
5 657 001
5 069 723
3 845 116
3 717 235
3 564 876
3 543 912
3 519 791
3 454 266
2 843 009
40.27%
6.00%
3.52%
2.49%
2.09%
2.06%
1.85%
1.40%
1.36%
1.30%
1.29%
1.28%
1.26%
1.04%
X
X
X
X
X
X
X
X
X
X
PRINT
07. AuDItoRS RepoRt
PRINT
08. BoARD oF DIReCtoRS
Øyvind eriksen | Chairman
sarah ryan | Director
Øyvind eriksen is president and Ceo of Aker ASA and Chairman of Aker Solutions. Mr. eriksen
holds a law degree from the university of oslo. He joined the norwegian law firm BA-HR in
1990, became a partner in 1996 and a director/chairman from 2003.
Mr. eriksen is executive chairman of the board of Aker Kværner Holding AS and board
member of several companies, including the Resource Group tRG AS, tRG Holding AS and
Reitangruppen AS. Mr. eriksen holds no shares or stock options in Akastor directly; he has an
ownership interest through his holding of 100 000 shares in Aker ASA and 0.20 percent of
the shares in tRG Holding AS through a privately owned company. Mr. eriksen is a norwegian
citizen and has been elected for the period 2014-2016.
lone fønss schrøder | Deputy Chairman
lone Fønss Schrøder has experience from board positions at the Danish shipping and oil group
A.p. Møller-Maersk A/S. She is director and chairperson for the audit committee at Volvo pV,
Valmet oy and nKt A/S, as well as a member of the board of directors and audit committee of
Schneider electric in France. She is also vice chairman of Saxo Bank A/S in Denmark and senior
advisor for Credit Suisse in london.
Ms. Fønss Schrøder has a law degree from the university of Copenhagen and a Master of
economics from Copenhagen Business School. As of December 31, 2014, she held 4 400 shares
in the company and had no stock options. She is a Danish citizen and has been elected for the
period 2014-2016.
kjell inge røkke | Director
Kjell Inge Røkke is Aker ASA’s main owner and has been a driving force in the development
of Aker since the 1990s. In 1996, Mr. Røkke purchased enough Aker shares to become Aker’s
largest shareholder and owns today 67.8 percent of Aker ASA through the Resource Group
tRG AS, which he owns together with his wife.
Mr. Røkke is chairman of the board of Aker ASA, Kværner ASA and deputy board member of Det
norske oljeselskap ASA. As of December 31, 2014, he held no shares in Akastor, and had no stock
options. Mr. Røkke is a norwegian citizen and he has been elected for the period 2014-2016.
Sarah Ryan is director of investment management at earnest partners. Before joining earnest
partners, she held various technical, operational and management positions at Schlumberger.
She is a non-executive director of Woodside petroleum.
Ms. Ryan holds a BSc in geology from the university of Melbourne, a BSc (Hons) in geophysics
and a phD in petroleum geology and geophysics from the university of Adelaide. As of
December 31, 2014, she held no shares in the company and had no stock options. Ms. Ryan is an
Australian citizen. She has been elected for the period 2014-2016.
Jannicke sommer-ekelund | elected by employees
Jannicke Sommer-ekelund is Senior Consultant and lead Auditor for supply chain support at
MHWirth. She joined Aker Solutions in 2006 and worked as a senior consultant in procurement
in 2012 when she moved to her current role. As of December 31, 2014, she holds 252 shares in
the company and no stock options.
Ms. Sommer-ekelund is a norwegian citizen. She has been elected for the period 2014-2016.
stig faraas | elected by employees
Stig Faraas works as Vendor Invoice Senior Administrator at Frontica Business Solutions. He
joined Aker Solutions in 1992. Mr.. Faraas holds a certificate in Surface treatment, security and
safety. As of December 31, 2014, he held no shares in the company and had no stock options.
Mr. Faraas is a norwegian citizen. He has been elected for the period 2014-2016.
kathryn m. baker | Director
Asbjørn michailoff Pettersen | elected by employees
Kathryn M. Baker joined the nordic private equity firm Reiten & Co in 1999 as a partner. She
previously worked as a management consultant at McKinsey & Company in oslo. Before
moving to norway, she was a financial analyst at Morgan Stanley and an investor relations
account executive at noonan/Russo Communications in new York. Ms. Baker currently sits on
the boards of directors of Data Respons and StormGeo. She serves on the ethics committee
for the norwegian private equity and Venture Capital Association (nVCA) where she previously
served as chairman and board member.
Ms. Baker holds a Bachelor’s degree in economics from Wellesley College and an MBA from the
Amos tuck School of Business Administration at Dartmouth College. She holds no shares in
the company Ms. Baker is an American citizen and has been elected for the period 2014-2016.
Asbjørn pettersen currently works as package Responsible engineer in global projects at
MHWirth. He began his career with the Aker group in 1983 when he joined Aker engineering
where he held various positions until 1997. He joined Aker MH in 2007 after engagements with
ABB environment, including as project leader for one of the first steam power plants in the
norwegian sector of the north Sea, and at Ge Healthcare’s lindesnes plant. Mr. pettersen holds
a BSc in mechanical engineering from trondheim College of engineering. As of December 31,
2014, he held 3 050 shares in the company and had no stock options.
Mr. pettersen is a norwegian citizen. He has been elected for the period 2014-2016.
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09. MAnAGeMent
frank o reite | Chief executive officer
Frank o. Reite joined Akastor from the norwegian investment management and
advisory firm Converto which he cofounded in 2009 and where he was managing
partner. Mr. Reite has earlier held a variety of executive positions in the Aker group,
including overseeing and developing Aker investments in seafood and shipbuilding
at Aker Seafoods, norway Seafoods, American Seafoods Company and Aker Yards.
Mr. Reite also has experience from the banking industry and served as operating
Director at paine & partners, a new York-based private equity firm.
Mr. Reite is Chairman of Converto and of Havfisk ASA. He holds a B.A. in business
administration from Handelshøyskolen. As of December 31, 2014, he held, through
a privately-owned company, 200 000 shares in the company and had no stock
options. Mr. Reite is a norwegian citizen.
leif borge | Chief financial officer
Before joining Akastor, leif Borge served as president and CFo of Aker Solutions
which he joined in 2008. He was CFo of Aker Yards ASA in 2002-2008 after serving
as CFo of Zenitel nV, Stento ASA and Vitana, a subsidiary of Rieber & Søn ASA in
the Czech Republic.
Mr. Borge is a graduate of the pacific lutheran university in Washington State. As of
December 31, 2014, he held, through a privately owned company, 142 775 shares in
the company, and had no stock options. Mr. Borge is a norwegian citizen.
karl erik kjelstad | investment Director
Karl erik Kjelstad has held a variety of executive positions in the Aker group which he
joined in 1998. He was eVp at Aker Solutions from 2009 and earlier served as Senior
partner and president of Maritime technologies at Aker ASA. He was president and
Ceo of Aker Yards ASA in 2003-2007. Before joining Aker, Mr. Kjelstad was senior
consultant at pA Consulting Group and in 1992-1996 held various management
positions at the ttS Group.
Mr. Kjelstad holds an MSc in marine engineering from the norwegian university
of Science and technology (ntnu). As of December 31, 2014, he held, through a
privately-owned company, 123 074 shares in the company and had no stock options.
Mr. Kjelstad is a norwegian citizen.
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10. CoMpAnY InFoRMAtIon
reports on the internet
Copyright and legal notice
the quarterly and annual reports of Akastor are available on
the internet. Akastor encourages its shareholders to subscribe
to the company’s annual reports via the electronic delivery
system of the norwegian Central Securities Depository (VpS).
please note that VpS services (VpS Investortjenester) are
designed primarily for norwegian shareholders. Subscribers
to this service receive annual reports in pDF format by email.
VpS distribution takes place at the same time as distribution
of the printed version of Akastor’s annual report to
shareholders who have requested it. Quarterly reports, which
are generally only distributed electronically, are available on
the company’s website and other sources. Shareholders who
are unable to receive the electronic version of interim reports
may subscribe to the printed version by contacting Akastor’s
investor relations staff.
Copyright in all published material including photographs,
drawings and images in this publication remains vested in
Akastor and third party contributors to this publication as
appropriate. Accordingly, neither the whole nor any part
of this publication can be reproduced in any form without
express prior permission. Articles and opinions appearing
in this publication do not necessarily represent the views
of Akastor. While all steps have been taken to ensure the
accuracy of the published contents, Akastor does not accept
any responsibility for any errors or resulting loss or damage
whatsoever caused and readers have the responsibility to
thoroughly check these aspects for themselves. enquiries
about reproduction of content from this publication should be
directed to Akastor ASA.
Contact Details
Akastor ASA
Frontica Business Solutions
Real Estate
Fjordalleén 16, 0250 oslo, norway
portalbygget, plan 1e-F, Rolfsbuktveien 4, 1364
Fjordalleén 16, 0250 oslo, norway
po Box 124, 1325 lysaker, norway
Fornebu, norway
po Box 124, 1325 lysaker, norway
telephone: +47 21 52 58 00
po Box 222, 1326 lysaker, norway
telephone: +47 21 52 58 00
akastor.com
MHWirth
telephone: +47 678 26 000
frontica.com
First Geo
Jåttåvågveien 10, 4020 Stavanger, norway
Butangen 20, 4639 Kristiansand, norway
KOP Surface Products
po Box 289. 4066 Stavanger. norway
po Box 413 lundsiden, 4604 Kristiansand,
77 Science park Drive #04-01/07 Cintech 3
telephone: +47 51 81 23 80
norway
+47 38 05 70 00
mhwirth.com
Singapore Science park, Singapore 118256
first-geo.com
telephone: +65 6880 9740
kopsurfaceproducts.com
Step Oiltools
Maskinveien 9, Stavanger 4033, orway
AKOFS Offshore
Fjords Processing
telephone: +47 957 28 476
Karenslyst Allé 57, 0277 oslo, norway
Snarøyveien 36, 1364 Fornebu, norway
stepoiltools.com
p.o. Box 244, 0213 oslo, norway
po Box 403, 1327 lysaker, norway
telephone: +47 23 08 44 00
telephone: (+47) 67 83 77 00
akofsoffshore.com
fjordsprocessing.com
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Design:
tania Goffredo
Photos and illustrations:
Rolf estensen
eivind Røhne
Simon Kennedy
Layout:
tania Goffredo
Print/Interactive PDF:
tania Goffredo
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